The Nigerian Content Development and Management Board (NCDMB) and the Bank of Industry of Thursday in Abuja signed a Memorandum of Understanding (MoU) for the implementation of a $200 million content intervention fund, with a target to have local firms in Nigeria control 70 percent of contracts in the nation’s oil and gas sector within the next 10 years.
The Nigeria Oil and Gas Industry Content Development (NOGICD) Act was signed into law in 2010 to help reduce capital flight caused by decades long predominance of foreign firms in contract procurement and execution in the sector.
Before the Act, Nigeria had an annual spend of $20 billion, with little or nothing retained in-country, data from NCDMB show.
According to Simbi Wabote, the executive secretary of NCDMB, “before then, all fabrication, engineering, and procurement were done abroad resulting in an estimated capital flight of about $380 billion in 50 years.”
There was also an estimated loss of 2 million job opportunities, as nothing could be done in-country, with the level of Nigerian content staying far below 5 percent due to total focus on oil revenue.
“This is a very important event in the history of NCDMB because it marks the crystallization of our efforts and plans to address the persistent funding challenge that has stifled the capacity and growth of our local service providers and other indigenous players in the Nigerian oil and gas industry,” Wabote expressed during the MoU signing.
Under the NOGICD Act, NCDMB has been mandated to develop local supply chain capacity for effective and efficient service delivery to the oil and gas industry without compromising standards.
The board has also been mandated to implement and enforce the provisions of the NOGICD Act.
“As at today, I can confidently say that we spend $5 billion in-country every year. Before 2010, we targeted 4 pipe mills; today we have 2 world-class pipe mills and 5 impressive pipe coating yards,” Wabote said.
Before 2010, only 3 percent of marine vessels were Nigerian owned, but today, Nigerians control and own 36 percent of vessels that are used in the oil and gas industry.
Also, there were no active dry-dock facilities, as the few available were abandoned and left to rot away.
Now, Nigeria has four active dry docking facilities for vessels, one each in Port Harcourt and Onne, and two in Lagos, with over 35,000 jobs created on the back of implementation of the Act.
In fabrication, Nigeria can currently handle a capacity of more than 60,000 tonnes.
In Manufacturing,the country has grown capacities such that all cables required in the oil and gas sector are all manufactured in Nigeria.
This is same for bolts, nuts and flanges fully, which are said to be certified to the required global oil and gas industry standards for onshore and offshore projects.
Furthermore, the assembly of offshore Christmas trees in the country never existed before, but these facilities are now available in-country in Onne, near Port Harcourt and the other in Calabar.
NCDMB has spearheaded the development of a new infrastructure for integration of FPSO’s on the back of the Egina Project.
The facility will be used for integration of Egina FPSO, which has production capacity of 200,000bbl/day and holding capacity for 2.3 million barrel of oil, the first in this Nigeria.
With these initiatives, NCDMB says it has moved the in-country value retention of Nigeria from less than 5 percent before the NOGICD Act to the current level of 26 percent.
