By Simbi Wabote
It is my great honor and privilege to deliver this welcome keynote address to you all at this 12th Edition of the Practical Nigerian Content Forum (PNC) as well as welcome you back to Yenagoa, the PNC host city after our sojourn last year to Uyo, Akwa Ibom State due to the devastating flood incident.
Once again, we appreciate the support of all stakeholders in making last year’s event a success despite all the challenges of that period.
Despite initial concerns, the weather this year has been very considerate to enable me deliver this keynote address within NCDMB headquarters perhaps in recognition that this is my last PNC keynote address as the Executive Secretary of NCDMB.
This welcome keynote address provides opportunity for me to share the facts about where we are on the 10-year strategic roadmap with only three (3) years left to get into the year 2027, reflect on the journey in the last seven (7) and a half years of being in the saddle as the Executive Secretary, and express my gratitude for the wonderful support received across board to get us to this point in our local content practice.
At the end of the year 2017, we launched our 10-year strategic roadmap aimed at increasing Nigerian Content (NC) in the oil and gas industry to 70% by the year 2027.
Our guests and stakeholders in the industry will recall that we had rolled out five (5) pillars and four (4) enablers to drive the focus areas under the roadmap, each supported with short, medium, and long-term initiatives.
I am delighted that the journey has been transformational from where we started to the point where we are now.
We have completed 83% of the 96 initiatives under the strategic roadmap with focus now shifting to the remaining initiatives that require some heavy lifting to bring into fruition.
With the support of the industry, our sponsors, principals, advocates, staff, contractors, host communities, and even critics, the transformational impact of the delivery of these initiatives has been of resounding success.
Under the roadmap, the technical operations data in NOGIC-JQS shows that the number of registered industry operators moved from fifty-three (53) in 2018 to one hundred and fourteen (114) in 2023 representing about 100% increase. Within the same period, service companies increased from 8,000 to 11,000 while individual registrations increased from 140,000 to almost 400,000.
Certification of NC Plans increased from 178 in 2022 to 255 in 2023 while the approved NC Compliance Certificates dropped from 197 in 2022 to 168 in 2023.
We believe the higher certified NC Plans in 2023 will soon translate to approve contracts with NC Compliance Certificates as the industry get accustomed to the policy directions of the new government.
training and provision of sea-time exposure to marine cadets, underwater divers, boat builders, NDT Level-3 certified engineers,
Our ICT Intervention programs in secondary schools in promotion of STEM education remain very popular and in high demand with over 100 ICT and Science Labs completed to date. The teachers are not left out with almost 2,000 of teachers trained on STEM Education and use of K-YAN Device.
Under the roadmap, we have trained over 7,000 youths in Bayelsa, Kano, Kaduna, Cross River, and Yobe States on GSM hardware repairs and software development.
Regarding our Commercial Ventures portfolio, we partnered with Waltersmith to establish a 5,000bpd modular refinery in Ibigwe, Imo State. This year alone, the refinery has produced and sold over 170 million liters or about 3,000 trucks of petroleum products that would have been hitherto imported using our scarce forex. I am pleased to note that site works for the expansion of the refinery to 10,000bpd refinery commenced in September 2023.
The three (3) other modular refineries are being progressed to completion and start-up. For example, the financial close to get the remaining funding for Azikel Refinery is nearing completion with the great support from AFREXIM bank.
While Duport Refiney in Edo State is essentially complete, we are looking at the various options and offers before us to bring closure to the partnership in line with our Investment Policy.
The jetty and the FAT for the Inside Battery Limit (ISBL) of the Atlantic Refinery modular refinery have been completed. We are now focused on taking delivery of the ISBL while exploring all the options open to address the funding challenges hindering the completion of the project.
In the area of gas utilization, one of our partnerships has enabled the utilization of part of the OB-3 pipeline with the commissioning of NEDO Gas plant currently injecting lean gas into the gas pipeline infrastructure. The partnership has also opened export outlets for other gas operators within the Kwale axis thus eliminating the need for gas flaring.
Other active sites under our partnerships with local businesses include Butane Energy for LPG storage and distribution in 10 northern states, Bunorr for the production for base oil, Eraskon for lube oil blending plant, and Triansel for construction LPG Terminal and 5,000MT storage tank.
Financial close required by our partners in Brass Fertiliser for 10,000TPD methanol plant, Rungas for the manufacturing of LPG cylinders, and SPL Utorogu for gas processing for LPG extraction remain area of concern. We have commenced discussions on key steps required to cure the issues around the partnerships. These will be presented for consideration and approval to our Governing Council once re-constituted.
Ladies and gentlemen, permit me to also share our remarkable success in the area of Enabling Business Environment. Under the roadmap initiatives, we challenged ourselves to move from the 27th position in 2019 on the Ease of Doing Business Ranking from MDAs to the 1st position last year and still maintained this position this year.
The Board completed, commissioned, and commenced utilization of its iconic new headquarters building (Nigerian Content Tower). Since the official commissioning in 2020, we have put in place strategies to ensure the facilities are well maintained and in good condition.
We have an operational 10MW power plant put in conceived as a CDI project with one of the NAOC JV. We have never defaulted in settling the bills for the fuel gas consumed and we also ensure that the routine and preventive maintenance is carried out to the letter.
The portfolio of Nigerian Content Intervention Funds being managed by BOI and NEXIM Bank has grown to Five Hundred Million Dollars ($500 million) with various product offerings for assets acquisition, project finance, manufacturing, and others.
Under the Strategic Roadmap initiatives, we made substantial recoveries from the Third-party Forensic Audit of the NCDF Remittances instituted to determine, track and recover outstanding statutory remittances into the Fund.
Apart from the flagship Practical Nigerian Content (PNC) Forum, we introduced other Board-sponsored events to deepen the conversation around the practice of Nigerian Content such as the Nigerian Oil and Gas Opportunity Fair (NOGOF), Research and Development Fair, NCCF Retreat, NC Managers Retreat, Women in Oil and Gas Workshop, APPO African Local Content Roundtable, Midstream and Downstream Workshop, HCD Workshop, and Nigerian Content Sensitization Workshops.
Other highlights include the Project-100 wherein 5 beneficiaries accessed funding and our Impact Assessment of the program shows that the Project-100 companies on average, grew by 15% annually between 2019 and 2022.
I must also highlight the progress being made in the various collaboration projects with other MDAs and state governments such as the Oloibiri Museum and Research Center, PTDF Skills Development Center, and others.
As we carry out various intervention across the industry, we also ensure that our staffs are not left behind as we continue to develop the capacity and capability of our staff via training and exposure and assignment to job roles that bring out commensurate talents.
We continue to provide the best-in-class work environment and tools for our staff in the various locations which contributes to our recognition as the reigning No1 MDA in the country.
As a gender-friendly organization, we have completed and commissioned a creche for our staff. This is part of our efforts to foster a conducive work environment for our women.
Similarly, we have constructed a fire station that is now fully operational with trained personnel.
Ladies and gentlemen, last year in Uyo, I indicated that as we move into the last horizon of initiatives under the roadmap, our focus will be on these few but very demanding deliverables:
a. Launch e-marketplace for industry supply chain transactions.
b. Facilitate delivery of dry dock facility on the back of E&P projects
c. Deliver additional four (4) NOGAPS Industrial Parks under the Phase-2.
Permit me to briefly provide some updates on these initiatives.
Section 106 of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act 2010 defines the “Oil and Gas e-market Place” as a virtual platform for buyers and sellers of goods and services in the oil and gas industry, that allows for speedy and transparent transactions. Section 54 of the NOGICD Act gives the Board the mandate to establish the E-Marketplace.
As part of strategies to implement this provision of the Act, the Board has elected to roll out the project in phases starting with tender opportunities from NLNG. Subsequent phases of the project will be rolled out to include OPTS, IPPG, and the other stakeholder groups.
I signed the e-marketplace Phase-1 blueprint framework with the MD of NLNG last month in Bonny Island. I commend NLNG once again for taking the bold step in promotion of transparency, efficiency, and compliance.
It is my expectation that the E-marketplace pilot phase will become fully functional next year so that we can apply the learnings and adapt it for wider industry application in line with the provision of the NOGICD Act (2010).
Regarding the Brass Island Shipyard, we have commenced the engineering design even though our focus is now on building the facility for ship maintenance, repairs, and overhaul. It is envisaged that when completed, the shipyard will be able to capture about 30% of the market share for repair and maintenance of LNG carriers and cargo ships.
The permits and consents plan for the shipyard is being progressed with NIWA, NIMASA, NUPRC, NPA, NIGS, OGFZA, and several other stakeholders.
As we firm up the technical and regulatory aspects of the project, we are preparing the commercial framework for the project to ensure there is clarity on funding, ownership, and efficient operations of the facility.
We are also delighted that we are already being contacted by reputable firms interested in the construction of the shipyard while offering their technical and financial expertise to bring the project to reality.
On the construction of additional NOGAPS industrial parks, we currently have eight (8) in our portfolio including the two (2) planned to commence operations next year. The other six are in Akwa Ibom, Imo, Ondo, Delta, Edo, and Abia states which are at various stages on engineering design and site preparation works.
Your Excellencies and distinguished ladies and gentlemen, based on all of the above, it is my pleasure to announce that the 2023 Nigerian Content level in the Nigerian oil and gas industry is 54% based on our monitoring and evaluation of industry activities. This is similar to the 54% NC level achieved last year.
Once again, this performance is well above the minimum target of 47% NC set for 2023 by the Board’s Project Management Office (PMO) just like we outperformed the 42% NC target set for 2022 by achieving 54% Nigerian Content.
Further analysis of this year’s NC level performance shows that the top 3 performers of in-country spend are Shipping, Surveying/ Positioning services, and Inspection/ Testing and Certification with each at 100% NC level.
On the other hand, the bottom 3 performers are Modification and Maintenance at 26% NC level; Health, Safety and Environment at 31% NC level; and Materials and Procurement at 32% NC level.
While the 54% NC Level achieved in 2023 is commendable, it calls for industry stakeholders to reflect if this is a sign of stagnation or the inflection point leading to the decline in NC level in the oil and gas industry. From where I sit, I see some disturbing signs pointing to that direction and I believe we can counter these emerging dynamics as this is not the first time we have faced such onslaught on local content practice.
I am sure you all know that getting the industry to this level of Nigerian Content is not a walk in the park and I believe all discerning stakeholders in the industry will play their part to prevent us from going back to the dark days of implementing Nigerian Content as a token of consolation. The nexus between high Nigerian Content levels and the relative peace in the industry must not be lost on us.
In more than seven (7) years of being in the saddle, I have served under 2 Presidents and 3 Ministers of State, with oversights from 7 Committee Chairmen spanned over the 8th, 9th, and now the 10th National Assembly not to mention the interactions several CEOs of international and indigenous operators.
We have managed to adapt our work styles and initiatives to derive the support of our principals and various stakeholders while enabling their various programs and policy initiatives such as 7 Big Wins, Economic Sustainability Program, Year of Gas, Decade of Gas, and several others.
As we applause these achievements, permit me share some thoughts and reflections on the implementation of the strategic roadmap:
Clear and well communicated goals and targets are very important in any organization.
The goals and targets will need considerations and approvals from governance authorities at various levels otherwise they will not be realized. For us, our success would not have been possible without the endorsement and approval of our Top Management Committee, Tenders Board, Ministerial Tenders Board, Governing Council, Bureau of Public Procurement, National Assembly, and the Federal Executive Council.
Time truly flies; it is imperative to finish off initiatives met on ground, aim to finish what you started, and pass the rest to the next dispensation for completion.
Momentum is underrated; It is important to utilize timely decisions to sustain momentum otherwise things grind to a halt, and you will require extra efforts to re-start. There is a saying amongst project managers that Procrastination eats project commencement for breakfast while indecision eats project completion for dinner.
Lastly, I can submit that Local Content growth is directly proportional to its being prioritized as a National Agenda. Once there is a lack of leadership backing at all levels, it opens the door for the practice to take the back seat. Needless to add that this has its consequences which are not usually immediate.
In closing, permit me to also use this opportunity to dispel some of the assertions or provide clarifications on some narratives out there about the Board and its activities.
Ladies and Gentlemen, is it TRUE or FALSE that NCDMB is very buoyant and awash with money? The answer is FALSE.
The fact is that the 1% NCDF remittance on contracts awarded is dwindling due to the lull in the industry. Through prudent and judicious use of the fund, we have grown it to a sizeable amount such that it could be leveraged for intervention and our operational needs.
The fund has 68% of it placed with BOI and NEXIM Bank as intervention funds and 32% utilized for our partnerships. These placements have enabled us to attract some yields and capital appreciation while still fulfilling our mandate.
Is it true or false that our 17-storey headquarters building is wasteful and under-utilized? The answer is FALSE. We only have 3 floors out of the 17-storey building available for let. We are in discussions with one of the telecom companies, a bank, and a well-known operator with a huge footprint in Bayelsa for office space to let within the NC Tower.
This narrative about under-utilization reminds me of the story about the Federal Secretariat in Abuja which is now congested even though it was considered too big at the time of construction.
Is it true or false that NCDMB plans to relocate its headquarters to Abuja? The answer is definitely FALSE. We are still here seven (7) years after some people took us to court on the unsubstantiated rumor. We are also building a 200-room Conference Hotel next door to the headquarters that is ‘penciled’ for relocation.
I receive hundreds of letters all the time asking, and even demanding for employment as there is the perception that NCDMB could employ staff as it likes. This is incorrect. Please know that as an agency of the Federal Government, we cannot carry out employ as we like. There are several layers of approvals required to employ individuals into the Public Service.
Another one is that NCDMB is partaking in areas outside its mandate. This is FALSE.
Section 70 of the NOGICD Act (2010) is very unambiguous on the functions of NCDMB. Sixteen functions of the Board are listed under the provision and I had to dedicate my keynote address at the last NOG Nigerian Content Seminar to list out our functions as including evaluation of NC Plans, Monitoring of NC Performance, Carry our research and investigations, organize conferences and workshops, develop capacities and capabilities of local contractors, implement Ministerial Regulations, delegate any of its functions to any agent or operative, and do anything legally necessary to enable the Board to carry out its function.
It is therefore not true that we carry out activities outside our mandate as contained in the NOGICD Act.
Lastly, Ladies and Gentlemen, let me use this moment to express my gratitude to the various stakeholders across the nation including the Presidency, National Assembly, Operators, Service companies, Sister agencies, Associations, Civil society organizations, the media, and several others for the support provided to the Board in the past years of being in the saddle.
I would like to formally welcome you once again to this forum for the last time as the Chief Host. I implore you all to actively participate in all the sessions.
My views on the subjects of Divestments, Domestication, and Decarbonization are well known. We have designed this year’s program to hear the various perspectives and agree way forward as we strive to deepen Nigerian Content in the oil and gas industry.
Thank you all for your attention and I wish you all a rewarding event.
*Engr. Simbi Wabote, FNSE, FIPS is the Executive Secretary,
Nigerian Content Development and Monitoring Board (NCDMB) presented this keynote address at the 12th edition of the Practical Nigerian Content Forum (PNCF) in Yenagoa, Bayelsa State… recently.