22 January 2013, Sweetcrude, Yenagoa – The implementation of the Nigerian Content Act in the past 30 months has deepened the Nigerian Oil and Gas local supply chain and increased industry manhours performed by Nigerians by over 350 per cent resulting in over 30,000 direct productive jobs, the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke has said.
Speaking at a meeting of the Governing Council of the Nigerian Content Development & Monitoring Board held in Abuja last week, the Minister who doubles as the Chairman of the Council explained “that just by insisting on using Nigerians in the industry, we have deepened the local supply chain”
The jobs were generated in engineering, fabrication, exploration and production, marine transportation and logistics sectors, which had been developed to become more robust.
She expressed optimism that the job growth trajectory will not only be sustained but also drive multipliers across industries following the integration of youths training into the implementation process.
“I have no doubt that more jobs will be created in 2013 and we shall achieve greater localization of industry services, manufacturing and fabrication in 2013,” she added.
According to Alison-Madueke, Nigerian Content implementation has increased the level of participation of Nigerians in oil and gas contracts to 87 per cent of total industry contracts, describing this is a first step towards domiciliation of spend and local value addition.
Commenting further on the success recorded so far, the Minister noted that “The Board has to a large extent achieved consensus in most aspects of Nigerian Content implementation to the extent that there has been no major dispute amongst stakeholders on interpretation of provisions of the Nigerian Content Law.
“Stakeholders are also responding positively to the need to do things differently in the industry, for the benefit of all. This clearly demonstrates that we have been carrying the industry along in the implementation of the Act.”
Alison-Madueke also assured that the Federal Government will continue to support the Board and its numerous local value addition initiatives, aimed at deepening indigenous participation in the industry.
Dwelling on the Petroleum Industry Bill presently before the National Assembly, the Minister noted that that the provisions of the Nigerian Oil and Gas Industry Content Development Act were safeguarded in the PIB, in a bid to sustain the momentum that has been achieved in Nigerian Content.
“The PIB is now in the National Assembly and should provide the needed impetus for additional investments in the industry. This should be a major benefit for the capacity we are building in the local industry,” she said.
In his remarks, the Executive Secretary of Nigerian Content Development and Monitoring Board, Engr. Ernest Nwapa explained that the Nigerian Content implementation model is focussed on growing and utilizing in-country capacity, while operators are made to consider long term value addition.
Under this model, government might get slightly lower revenue but this will be compensated with a higher in-country value and greater attention to life cycle of industry operations.
While acknowledging progress on the quantum of contracts awarded to Nigerians, the Executive Secretary stressed that real Nigerian Content can only grow if Nigerian companies that win contracts procure items from Nigeria and execute the jobs in-country.
To grow real Nigerian Content, Nwapa said the industry must focus more on manufacturing, bringing back the bulk of fabrication jobs that are done in foreign countries and ensuring that pipes, valves, fittings and related equipment are procured from Nigeria.
He stated that appreciable progress had been recorded in fabrication and engineering, noting that similar growth must be achieved in the manufacturing sector as most of the valves, pumps, oil and gas equipment are still being imported.
Nwapa further noted, “We have started creating the platform to ensure that components of these equipment can be done here, even if we cannot manufacture the whole equipment here.
“With the support of the minister, we have also issued guidelines that require any new project to create some legacy facilities. We have been able to get commitments from international operating companies on FPSO integration facilities, dockyards, umbilicals manufacturing and fabrication yards.”
To grow participation of the oil producing communities, the Board will organise Original Equipment Manufacturers/Small and Medium Enterprises fairs in the oil producing states which will result in the selection of serious local SMEs for integration into the equipment components manufacturing schemes.
The Board will also collaborate with the state governments to create industrial clusters to accommodate such enterprises, Nwapa explained.