Nigeria Content Online

The recently
introduced Nigerian Content Act will guarantee that indigenous Nigerian
service companies are accorded exclusive considerations in the award of
contracts and services on land and swamp operating areas of the
nation’s oil and gas industry.

The Acting
Executive Secretary of the Nigerian Content Development and Monitoring
Board (NCDMB), Ernest Nwapa, gave the assurance yesterday in Abuja, at
the quarterly meeting of the Board with multinational service companies.

According to Mr.
Nwapa, the provision of the Act challenges Nigerian service companies
to demonstrate capacity to take advantage of the policy by acquiring
the necessary technical competence to execute such contracts.

The emerging nature
of the oil and gas business, he pointed out, is such that the operating
companies outsource most of the activities to service providers, mostly
foreign companies operating in Nigeria, while some Nigerian companies
pretend to work as foreign counterparts.

“By our own
estimation, over 75 percent of the work done in the industry, both in
terms of man-hours and spend, are done by the service companies.

“It is in these
service companies that the technology resides, and this is where we can
get more people employed and the only way of doing that now is to make
sure that substantial value of that work is domiciled in Nigeria and
the spend is retained in Nigeria. That is what the government and the
people of Nigeria expect us to do,” he said.

Nwapa further
explained that government was happy that well established service
companies are operating in the nation’s oil and gas industry, adding
that government was not planning to drive them out of the country.

He, however,
explained that government was committed to ensuring that indigenous
companies get more opportunities to participate, or make the
multinational service companies become more Nigerian.

“We have to merge
the two approaches. But, it has to be very clear that this is no longer
a question of having a registered Nigerian company that has no assets.
We would be testing the companies that have Nigerian subsidiaries to
ensure that they have capacity to work in Nigeria and are owned
substantially by Nigerians.

“It makes no sense
working in Nigeria, only to retain 5 or 10 percent of what is derived
and export over 90 percent of the proceeds from Nigerian contracts to
the real owners of the company assets abroad,” he said.

Government, the
Board Secretary further explained, was also using the Act to secure the
future of the country and sustain the activities in the oil and gas
industry, adding that the new law would improve the sector’s cost
effectiveness, its ability to service and maintain the assets, which
cost huge funds to acquire, employ Nigerian youths, integrate
inhabitants of the oil producing communities into industry activities,
and maintain tranquility in the Niger Delta, where most of the oil and
gas fields are situated.

Nwapa also noted
that the monitoring Board had commenced enlightenment campaign across
the country about the benefits of the new law, adding that it would, in
the coming weeks, engage people living in the oil producing communities
to reassure them that the post-Amnesty Programme of the Federal
Government was on course and capable of boosting its efforts.

The Board would
promote the development of critical facilities needed in the industry
like Steel Pipes and Plate Mills, Umbilical Spool Bases, Deepwater
Logistics Facilities, FPSO Topside integration facility, and
Offshore/Onshore Module Fabrication Yards.

Others facilities
to be set up by the NCDMB are repair and dry-docking facilities for
marine vessels drilling Rigs, Shipbuilding activities, Heat Exchangers
Assembly Plants, wellhead and valves manufacturing, and assembly plants
and Subsea Production Systems testing facilities.

He stressed that there is no better way of providing employment for
the ex-militants, other able bodied indigenes of the Niger Delta, and
indeed other Nigerians through the industry, than by creating these
facilities and job opportunities.