Ernest Nwapa, executive secretary, Nigerian Content Development and Monitoring Board advises the National Assembly to ensure that PIB domiciles service and manufacturing ends of the oil and gas industry operations
| By Maureen Chigbo | Jun. 3, 2013 @ 01:00 GMT
IT WAS a timely warning coming especially before the National Assembly finally passes the Petroleum Industry Bill which is expected to attract more investments into the country. The Legislature must ensure that the PIB sufficiently domiciles service and manufacturing ends of the oil and gas industry operations in the country. “Failure to do this, would mean that investments would flow into the country after the PIB is passed, but take flight in the form of overseas procurement of equipment used for operations and remuneration of expatriate personnel working on the projects,” according to Ernest Nwapa, executive secretary, Nigerian Content Development and Monitoring Board, NCDMB.
Nwapa, at a forum organised by the Petroleum Technology Association of Nigeria, PETAN, at the just-ended Offshore Technology Conference, OTC, in Houston, Texas, said for Nigerians and the local economy to benefit from the multi-billion dollar investments expected to flow into the country after the passage of the PIB, concerted efforts must be made to develop Nigerian content. Nwapa said there was an urgent need to expand discussions around the proposed legislation beyond the fiscal terms.
“It is expected that when the PIB is passed, it would result in massive investment flow and those investments will yield revenue for Nigeria. But what we are looking for is a kind of impact that can give us employment on top of the revenue. That type of impact would only come from the investments that result in domiciliation. It is a good thing we have had a three-year head-start in the implementation of the Local Content Act which has enabled us to create some capacities in Nigeria such that as the PIB is being passed and investments are coming, we would then have jobs arising from the investments being executed locally,” he said.
The executive secretary also used the forum to canvass for industry support for the Board’s initiatives especially the Nigerian Oil and Gas Industrial Park Scheme and the establishment of a new pipe mill to support the existing SCC Mill in Abuja. He explained that when the initiatives are successful, Nigerians will reap immense benefits from the PIB as more industry activities would be domiciled.
“It is a good thing to get the investments in because we need to increase our revenue intake from oil production, but the real endgame for us is to ensure that as we are getting revenues, we are getting our people to work. Government agencies can only employ a few thousands, but the real employment can come from commercial activities that would arise from our preparedness to expand operations,” he said
Nwapa explained the relationship between the Nigerian Content Act and the PIB, saying there was an urgent need for the big multi-nationals and other companies operating in Nigeria to encourage the establishment of facilities where components of industry equipment can be manufactured locally. Local manufacturing, according to him, holds the key to creating jobs in the oil and gas industry. “The responsibility of the Nigeria Content Development and Monitoring Board is to work with the industry to drive the establishment of these manufacturing facilities and that is why Diezani Alison-Madueke, minister of petroleum resources, is pushing for the launching of the Nigerian Oil and Gas Industrial Park Scheme.”
The Board will use the Nigerian Content Fund to create industrial parks close to the oil fields and get original equipment manufacturers to mentor small and medium-scale enterprises to manufacture components of the equipment used in the industry. The big manufacturers would come to the park and select a local partner that would manufacture their components.
At the PETAN OTC panel session, which had its theme as Post PIB Regime: Challenges and Opportunities for Investment in the Nigerian Oil and Gas industry, stakeholders agreed on the need to ensure that the PIB which is presently on the floor of the National Assembly is passed speedily. They also concurred that the new law should be infused with provisions that will, among other things, ensure increased take for government from industry operations without discouraging investments, while providing incentives for local refinery and investments in gas.