Nigerian Content Act And Building Indigenous Capacity

The Nigerian Content Act 2010 is geared towards achieving the domestication of significant portion of derivatives of the oil and gas industry by ensuring the development and deliberate use of indigenous human and material resources in the industry in Nigeria.

The Act makes it mandatory that some jobs in the industry must be done in the country except where there is no local capacity available.

Prior to the Act, equipment used in the industry were usually designed, fabricated and assembled abroad thus leading to capital flight and export of jobs. There was a preponderance of expatriate workers resulting to scarcity of jobs, paucity of skills and capacity building and utilisation for the Nigerian workforce culminating to the economic under-development in the country.

But when the Act came into being the table was over turned. The establishment of the Nigerian Content Development Monitoring Board (NCDMB) gave the Act an added impetus and signalled that it was no longer business as usual; that government was serious about the development of capacity in-country.

Representing the Executive Secretary of NCDMB at a workshop on capacity development in the oil and gas industry organised by Shell in collaboration with PETAN in Port Harcourt recently, Wole Akinyosoye said the mandates derived from the Act given the board by the Minister of Petroleum Resources, Mrs Diezani Alison-Madueke were: “Retention of 10 billion out of the 20 billion average annual spend; create over 30 thousand direct employment and training opportunities; establish 3 to 4 and new pipe mills to service the industry demands; develop one or two dock yards, integrate indigenes and businesses residing in the oil and gas producing communities, and capture 50 to 70 per cent of the banking services, insurance placement and legal service.”

Akinyosoye who noted that the mandates were short term goals also disclosed that while working with DPR, the problem they had then especially on expatriate quota was that they were no laws. And was quick to add that “But today, we have a law specific and so it behooves on us to bring people to comply.”

To say the least, the Act has opened a floodgate of activities in the oil and gas industry resulting to an uprising in indigenous capacity. Shell’s general manager, Local Content, Mr. Igo Weli at the Nigeria Oil and Gas Conference in Abuja while underscoring the success of Shell companies in Local Content Development said the Anglo-Dutch Company was constantly engaged in a number of activities to promote local content development.

According to Weli, such activities are based on the premise that “Nigerian Content Developemnt is the pivot for industrial and economic growth an stability.

Also, at the NOG Conference, Indigenous operators took their turns to say how much of Content Development and value addition their respective firms  have brought into the industry for overall economic growth.

Many of them agreed that the Content Act is the pivot for the recent growth in the industry. This is because indigenous firms were able to attain the level of success they did because of the Nigerian Content Act. The law gave local entrepreneurs the confidence to venture into areas that hitherto were the exclusive preserve of multinational companies.

For instance, an indigenous firm, Vandrezzer Energy Services Limited recorded a milestone in meeting government’s local content aspiration by developing a well head jacket from conception to finish. The company which offers engineering and fabrication services was reported to have completed the construction of world class well head monopod jacket for oil mining lease (OML) 90 field development project.

The project it was reported comprised the engineering design, fabrication, construction and installation of a well head platform complete with jackets and a concrete-coated pipeline for some offshore operations. No doubt, the execution of this project in-country had engendered a respectable number of skills development and technology transfer. Indigenous professionals and supported members of staff of the company had an opportunity to gain experience and further develop their various skills.

It was also reported that due to the functional partnership among government agencies, the IOCs and service companies, well over 700 Nigerians were engaged in various industry projects handled by Delta Afrik, an indigenous company.

This was due mainly to the Act; without which, this over 700 vacancies would have been exported to expatriates while Nigerians wreath under the bondage of unemployment and poverty.

The impacts of government’s local content mandate, no doubt, are being felt not just in the oil and gas sector but other sectors of the economy. But there are still capacity gaps in the industry. A lot still needs to be done in terms of building indigenous capacity to meet the demands of the industry. The Act has fluing open the golden gate of the industry. It behoves on us to grab, the opportunity, and one way of doing this is moving our educational system from knowledge-based to skills-based that can deliver the needed result. Knowledge and skills are the key differentiators and this is what the whole idea of local content hinges on.

Also critical to the development or actuali-sation of the local content law is the Petroleum Industry Bill (PIB). It has been predicted that by 2030, the demand for energy and its contribution to GDP will be more significant. Japan is closing its nuclear plants which means the demand for energy is just going to be sustained as never before. It then means Nigeria will be among the world energy hubs. The PIB, and not leaving out the gas master plan, would launch Nigeria into this period of sustained hydrocarbon resources.

Vivian-Peace Nwinaene