In a communique issued after a Nigeria local content summit held in Port Harcourt last Monday, stakeholders stressed the need for enforcement of the local content law in the oil and gas sector. Excerpts
The Nigerian Content Development and Monitoring Board (NCDMB) was set up following the enactment of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act 2010.
The Act itself provides for the development of Nigerian content in the Nigerian Oil and gas industry. The Act and the Board embody the determination of the Federal Government to increase the benefits and rate of value addition to the domestic environment resulting from activities in the oil and gas industry,. This objective will be achieved through opening up the sector to greater participation of Nigerians and building local capacity to support increased investment.
Since inception, the NCDMB has been making progress towards implementing the provisions of the NOGICD Act, 2010. In a bid to support the efforts of NCDMB, the House of Representatives Committee on Local Content organised a two-day summit on local content to provide an opportunity for an evaluation of the process of implementing the local content agenda, understand the implementation challenges, seek solutions to the challenges, and also explore the possibility of expending the Local Content agenda to other sectors of the economy.
The summit kicked off with an opening ceremony with a number of speeches delivered by the Executive Governor of Rivers State, His Excellency, Rt. Hon. Chibuike Rotimi Amaechi who was represented by his Deputy, Engr. Tele Ikuru, the speaker of the House of Representatives, Rt. Hon. Aminu Waziri Tambuwal, represented by the Depty House Leader, Hon. Leo Okuwe Ogor, Minister of Petroleum Resources, Mrs Diezani Allison-Madueke represented by the Executive Secretary of the NCDMB, Engr. Ernest Nwapa, Minister of Power, Professor Bart Nnaji, represented by his Special Adviser, Mr. C. Don Adinuba, Minister of Communication Technology, Mrs Omobola Johnson and the Chairman of the House Committee on Local Content, Rt. Hon. Honourable Asita.
The first objective of the summit was to seek ways of effectively operationalising the Local Content Act without making the oil and gas and other critical sectors of the economy unattractive to foreign investors and to provide an opportunity for the House Committee on Local Content to engage industry stakeholders in the challenges of implementing the NOGIC Development Act.
The summit involved six key presentations made by eminent resource persons who were supported by selected discussants. The presentations were followed by interative sessions with key issues highlighted such as the limited understanding, perception, penetration/expansion to other sectors and advocacy of the Local Content agenda as currently spelt out, challenges around enforcement powers under the Act cededto the the NOGICD Act is robust but requires to strengthen implementation in the areas of capacity/technological know-how, access to funding/local financing, policy consistency, corporate commitment, and viable national infrastructure:
There is a low level of patriotism by stakeholders in operationalizing the NOGICD Act and there is lack of clarity on measurement of compliance levels in terms of quantum of funds, number of local vendors, and or aggregate domestic spening.
The summit identified the factors critical to the successful operationalization of the Local Content agenda, which include appropriate education and capacity enhancement of service providers/technicians and other stakeholders, high quality of outputs by local contractors already enjoying patronage by IOCs, a conscious effort to domesticate manufacturing and utilization of locally manufactured goods, willingness of banks and other financial institutions to lend long term as opposed to short term and at competitive interest rates, expansion of policy to cover non-oil sector actors that are allied to the oil and gas sector, patriotism and internatlization of the Act by all stakeholders and a good and robust PIB harmonized with the NOGICD Act.
The summit made the recommendations such as there is need to improve public understanding of the provisions and spirit of the NOGICD Act, especially the opportunities they create for the growth of competence and capabilities of local operators and service providers, a clear vision for the operationalization of a robust Local Content agenda needs to be properly articulated and communicated. The current road map of the NCDMB provides an appropriate starting point but should be enhanced, there is need to extend legislation to cover other critical sectors of the economy particularly power and information and communication technology (ICT) as well as the need to encourage partnerships in operationalizing the Local Content agenda, particularly, collaborations amonst local companies and between companies and communities.
Others are the need for government to create adequate incentives and ‘protection’ to local industries. This should include but not limited to review of the Temporary Import Permit (TIP) which is a major impediment to the implementation of the Act, there is need for the National Assembly to accelerate the passage of the PIB, there is need for a review of the Nigerian educational curriculum to address current industry needs, there should be synergy among all relevant ministries, departments and agencies on the implementation of the Local Content Agenda and the need to strengthen the capacity of relevant stakeholder groups and regulatory agencies such as Nigerian maritime Administration and Safety Agency (NIMASA), indigenous Ship Owners Association of Nigeria (ISAN) and Nigerian Chamber f Shipping (NCS).
The key objectives of the House Committee on Local Content is organizing the summit were significantly addressed. The issues and challenges facing the operationalization of the Local Content agenda were highlighted with recommendations. It is believed that the outcome of the proceedings of the summit would form a basis to further the commitment of the House of Representatives, NCDMB and key stakeholders towards achieving the goals of the NOGICD Act.
Shell To Appeal Ruling On Carbon Emission Cut Target
Royal Dutch Shell has confirmed plans to appeal against the Dutch court ruling, calling for it to cut its carbon emissions faster.
Shell’s chief executive, Ben van Beurden, said the company had agreed that “urgent action is needed” to reduce carbon emissions, and vowed to accelerate its progress towards becoming a net zero carbon company, but said that Shell would still appeal against the ruling “because a court judgment, against a single company, is not effective”.
A court in The Hague reached the verdict in May this year after Friends of the Earth and over 17,000 co-plaintiffs successfully argued that Shell had been aware of the dangerous consequences of CO2 emissions for decades, and that its climate targets did not go far enough.
It ruled that Shell has an obligation to cut its carbon emissions by 45 percent by 2030, compared with 2019 levels, under both Dutch law and the European convention on human rights – the right to life and the right to family life – and that the company had known for “a long time” about the damage caused by carbon emissions.
“What is needed is clear, ambitious policies that will drive fundamental change across the whole energy system,” he said. “Climate change is a challenge that requires both urgent action and an approach that is global, collaborative and encourages coordination between all parties,” Beurden added.
Friends of the Earth Netherlands, also known as Milieudefensie had said the appeal would send “the wrong signal” and confirm Shell’s “lack of commitment” to tackling the global climate crisis.
A director at Milieud-efensie, Donald Pols, said the appeal aimed to postpone any action from Shell and warned that “the longer the delay the more serious the climate consequences will be for us all”.
A lawyer for Milieude-fensie, Roger Cox, said: “The judges have passed a well-considered judgment on Shell in the verdict. We are confident that this judgment will be reaffirmed on appeal. The science is clear on the consequences of and solutions to dangerous climate change.”
Shell set out its latest carbon emissions goals earlier this year ahead of a shareholder vote on its plan to become a net zero carbon energy company by 2050. However it also signalled to investors that it would continue to grow its gas business by more than 20 percent in the next few years, despite the urgent need to begin dramatic emissions cuts before the end of the decade.
Although the FTSE 100 group won the support of the majority of its investors it also suffered a significant investor rebellion after a Dutch climate activist group, Follow This, called for the company to set tougher carbon emissions targets and received 30 percent of shareholder votes.
Following court ruling, Van Beurden said in a statement on his LinkedIn page that he was disappointed that Shell was “singled out” by a ruling that “does not help reduce global CO2 emissions”.
He wrote: “Imagine Shell decided to stop selling petrol and diesel today. This would certainly cut Shell’s carbon emissions. But it would not help the world one bit. Demand for fuel would not change. People would fill up their cars and delivery trucks at other service stations.”
DPR Sets Record Straight On Subsidy Removal
The Department of Petroleum Resources, DPR, has clarified that its Director, Sarki Auwalu, was quoted out of context, following recent reports attributed to him that petrol could be sold for as high as N1000 per litre if subsidy was removed without alternative.
A statement by the department faulted the reports, describing it as a “misinterpretation”.
“DPR wishes to state that the headline of the publication is misleading as the comments of the Director/CEO DPR was clearly taken out of context.
“The director/CEO specifically created a scenario of price instability of Premium Motor Spirit (PMS) based on current dollar to naira differentials to the effect that if Nigeria continues to rely on the importation of PMS without creating alternative energy sources like CNG, LNG, AUTOGAS etc, which will provide price buffers for consumers and ultimately crash the price of pms, then the product will be subject to prevailing market forces.
“The director further reemphasised that the strategy for alternative energy sources is a cardinal programme of the government which has led to the declaration of the Decade of Gas (DoG) with the objective to migrate the Nigerian economy to a gas based economy by 2030.
“The Department hereby restates that we will continue to enable businesses and create opportunities through our downstream focus on Quality, Quantity, Integrity and Safety (QQIS)”, the statement said.
Oando Settles Legal Tussle With SEC
Oando Plc has entered into a settlement with the Securities and Exchange Commission (SEC) in the overriding interest of the shareholders of the company and the capital market after years of legal tussle.
This was contained in a circular posted on SEC’s website on Monday and obtained by Tide source.
According to reports, the commission in 2019 said it found Oando guilty of serious infractions, thereby barring the company’s Chief Executive Officer Mr Wale Tinubu, and its deputy CEO, Mr Mofe Boyo, from the boards of public companies for five years.
SEC also instituted an interim management to appoint new board of directors and management team for Oando.
The circular said the company had reached a settlement with the commission without accepting or denying liability on immediate withdrawal of all legal actions filed by it and all affected directors.
It said the agreement included payment of a monetary sum, and an undertaking by the company to implement corporate governance improvements.
“Part of the terms required the submission by the company of quarterly reports on its compliance with the terms of the Settlement Agreement; the Investments and Securities Act, 2007; the SEC Rules and Regulations; the National Code of Corporate Governance and the SEC Guidelines to the Code of Corporate Governance.
“Pursuant to the powers conferred on the Commission by the Investments and Securities Act 2007, and the Rules and Regulations made pursuant thereto, the commission on July 15, entered into a settlement with Oando Plc (the company).
“The commission in its letter to the company dated May 31, 2019, gave certain directives and imposed sanctions on the company, following investigations conducted pursuant to two petitions filed with the commission in 2017.
“The company and some of its affected directors had challenged the said directives in a series of suits commenced at the Federal High Court,” it said.
The circular said Oando approached the commission for a settlement of the matter, and both parties had agreed to settle in consideration of the impact that a further prolonged period of litigation would have on the company’s shareholders and the value of their investments.
The commission also reiterated its commitment to ensuring the fairness, transparency and integrity of the capital market, while upholding its mandate to protect investors.
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