Oil & Gas
…commend NCDMB for great achievements
By Anthony Isibor
ABDULRASAQ Isa, Chairman, Independent Petroleum Producers Group, IPPG, has urged the Nigerian Content Development and Monitoring Board, NCDMB, to ensure that certain aspects of the Nigerian local content policies are constantly evaluated to ensure that there are continually fit-for-purpose and not counter-productive to the country’s long-term industrial growth and cost effective.
Speaking at the ongoing Practical Nigerian Content, PNC Forum in Yenagoa on Tuesday, Isa stated that the industry has continued to face growing pressures to remain profitable and cost-efficient as it faces competition from other investment destinations.
“To this extent, I would like to encourage the NCDMB to review certain aspects of our legislation that may potentially work against the competitiveness of Nigeria’s oil & gas sector in the global marketplace and ensure that the industry remains globally competitive and sustainable.
“A case in point is the Human Capital Development training requirements wherein industry participants are required to set aside 3% of project cost (projects above $1million) to conduct local content training. While this is undoubtedly a laudable initiative, we must consider that it amounts to a multiplication of levies as industry participants are already equally required to contribute a separate 1% of total costs as NCD levy.
“This invariably leads to higher project costs, especially as the training is not allowed to be provided directly to company staff and service providers. Due to this and other contractual or administrative reasons, the process of complying with local content requirements has, on many occasions, proven to significantly increase the overall cost of delivering projects in Nigeria. Again, this unintended outcome requires some detailed review in order to ensure that we are not losing new investments to emerging investment destinations in the process of driving our local content agenda,” he said.
He also noted that the strict local content requirements have gradually led to a reduction in the presence of leading international oil & gas service providers many of whom are leaving Nigeria in droves.
He said that while it is important to continue to prioritise local content development, Nigeria must recognize that these international players have a key role to play in ensuring technology transfer and knowledge sharing that our local players can benefit from.
“You will agree with me that our local players still lack the requisite skills to adequately support our deep offshore operations and other specialised operations,” he said.
He however commended the NCDMB for the various strides already recorded in deepening local content and reaffirmed the groups commitment to continue to partner with the Board, as it aims to strengthen in-country capacity and increase Nigerian Content for the benefit of the industry and the county.
He said: “The PNC has always provided a viable platform for demonstrating the successes recorded in deepening Nigerian Content and fostering industry-wide collaboration in delivering the key tenets of the Nigerian Oil and Gas Industry Content Development Act (NOGICD Act). I must therefore specially commend the Nigerian Content Development and Monitoring Board, NCDMB, under the able leadership of Simbi Wabote, for once again convening this event. This event will always be a special one for IPPG – as an association of 29 indigenous Exploration and Production companies, there is a natural synergy between the NCDMB and IPPG. The emergence of IPPG and strong indigenous Exploration and Production companies is a testament to the successful local content policy.
“From the theme of this year’s conference, it is clear that a lot is happening in our industry – “Deepening Nigerian Content Amidst Divestments, Domestication & Decarbonisation” – our industry is witnessing a transformational shift and thus continues to underscore the importance of repositioning our industry in the short to medium term. The ongoing global energy transition drive as well as the widespread reforms across the domestic landscape – notably the implementation of the Petroleum Industry Act, the ongoing divestment of onshore and shallow water assets by the IOCs and the Decade of Gas Initiative – means of citing times are on the horizon for the industry bringing with it immense opportunities for growth. As an industry we must remain focused on rapidly and efficiently exploiting our vast hydrocarbon assets for the socio-economic transformation of the nation.
“It is therefore imperative for the industry to be efficient and look inwards in fully optimising these hydrocarbon assets for today and future generations. The faithful implementation of the NOGICD Act is capable of unlocking the nation’s economic potential and serving as an enabler for rapid industrialisation. The acceleration of in-country capacity utilisation, reduction of capital flight and in-country retention of a significant portion of industry spend will no doubt continue to expand the participation of the indigenous companies across the industry value chain and create linkages to the wider economy.
“NCDMB needs to be specially commended for their pragmatic implementation of the NOGIC Act and overall performance. At last year’s PNC and mid-way into the NCDMB 10-year Strategic Roadmap, the Executive Secretary noted the Board had achieved 54% Nigerian Content level,” he added.
Responding to Isa’s assertion of double taxation through the 3% HCD levi, Simbi Wabote, Executive Secretary of the NCDMB noted that the board does not demand such money from the companies.
He said that the 3% HCD levi is set aside by the companies and used by them for the development of human capital to ensure a continuous supply of trained staff for the nations oil and gas sector.
A.I
Tags: Abdulrasaq Isa IPPG NCDMB Simbi Kasie Wabote
