IBE Kachikwu, minister of state for petroleum resources and group managing director, Nigerian National Petroleum Corporation, NNPC, has assured local service providers and prospective investors of federal government commitment to increased level of local content in the nation’s oil and gas sector.
The minister stated this at the 2016 edition of the Nigeria Content Investment Forum, NCIF, in Houston, Texas, organised by SweetcrudeReports in collaboration with the Nigerian Content Development and Monitoring Board, NCDMB. He stated that in addition to implementing local content policy, government would continue to provide the enabling environment required to nurture businesses and investment towards creating a robust supply chain.
Kachikwu said despite falling crude oil prices, the government would continue to pursue the local content policy with the seriousness it deserved. He told the Small Medium Enterprises, SMEs, and international Original Equipment Manufacturers, OEMs, at the event that specific areas of focus for local content development included infrastructure development, fiscal incentives, funding, addressing long contracting cycle, and in-country processing of hydrocarbon resources.
“We will accelerate implementation of the Nigerian Oil and Gas Park Scheme, NOGaPS, to enable our SMEs focus on production and services while we develop infrastructure and facilities to support domiciliation imperatives. We will accelerate approval for gas infrastructure projects to make gas available in specialised oil and gas manufacturing and service hub. The gas infrastructure will assist in meeting the energy and power requirement of businesses supporting the oil and gas industry,” Kachikwu said.
On fiscal incentives, the minister said government shall extend fiscal incentives to all investors that set up shop close to rural oil producing communities. “Tariffs that put local production at a disadvantage are being reviewed as a way of enhancing competitiveness of locally made goods that are critical to the industry such as steel pipes and valves.”
To support peculiar funding needs of oil and gas service companies, Kachikwu said the NOGICD act established the Nigerian Content Development Fund, NCDF. “NCDF provides source of low interest fund for the execution of projects and capacity development interventions in the oil and gas industry. NCDF operating model is currently being reviewed to enhance its accessibility by local service companies for their capacity enhancement activities. I encourage you all to approach the NCDMB for details on the operating guidelines for accessing NCDF.”
The minister maintained that Nigeria Content is now a key requirement in the conceptualisation of oil and gas projects and contracts which is creating ample work scope to be domiciled within the Nigeria economy. However, Kachikwu noted that there is the lingering issue of contracting process spanning between two to four years.
— May 16, 2016 @ 01:00 GMT