Oil, Gas: Stakeholers Harp On Local Content

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.