Four months after its passage and subsequent inauguration by President Goodluck Jonathan, the Nigerian Content Development Monitoring Board (NCDMB) has revealed that a major obstacle to achieving a significant local participation in the oil sector was as a result of lack of commitment of many top government officials towards compliance with the Nigerian content regulation.
The board says that for indigenous local participation in the oil sector to be actualized all hands must be on deck and that all stakeholders’ and operators alike must ensure that their hands are kept above board.
The Executive Secretary of the NCDMB Mr Ernest Nwapa, in a paper which was he presented at a recent workshop inn Lagos and which was made available to Shipping Position Weekly stated that one of the factor which has led to the major gap in Nigeria’s involvement in its upstream activities is “the continual absence of commitment and resolve on the part of Nigerians in key position of authority within the industry to insist that we collectively and consistently abide by the position of this law and make it count in the way other nations drive their local content laws.”
According to Nwapa, the local content achievement is currently still at 37 percent and Nigeria’s inability to participate in the crude oil lifting is costing the country to lose a lot of money which he puts at $5milion per day. He added that only about 10 percent out of the spending in the sector is retained in the country.
According to the NCDMB boss, the enactment of the local content law is the last opportunity that has been made available for the country to take advantage and make a meaning of its natural endowments and that “if we do not insist, the foreigners will not help us with compliance.”
Nwapa in the statement also stressed the need to increase the participation of Nigerians and Nigerian entities in all sectors of the oil and gas industry vis-à-vis engineering and fabrications in order to reduce capital flight from the country. He explained that operators in the sector are expected to invest not less than $67.5b in the sector in the nest four years so as to ensure that Nigerians thrive in the sector.
A break down of the money as contained in the document revealed that $8bn has been earmarked per year for fabrications scope in the upstream sector; $500m per year will be on engineering design and production, while $25bn is to be spent on the procurement of materials within the same period.
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