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Commitment to growing local content in the oil and gas industry

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World Pipelines,

The Nigerian National Petroleum Corporation (NNPC) and the Nigerian Content Development and Monitoring Board (NCDMB) have committed to growing local content in the oil and gas industry from the current 40% to 70% by 2027 as part of strategies to sustain economic development in country.

NNPC Group Managing Director, Dr. Maikanti Baru, made this commitment while delivering a keynote address at the 8th Practical Nigerian Content Conference in Yenogoa, Bayelsa State, saying strategies for implementing the NCDMB local content development includes closing human capacity gaps, skills acquisition and assets ownership by indigenous companies, among others.

He explained that the theme of this year’s Conference: “Driving Economic Development and Sustainability” is very relevant to NNPC, the industry and the country at large given the considerable gains recorded in the nation’s oil and gas landscape.

The GMD said that as early as 2005, despite almost 50 years of a vibrant national oil industry experience, NNPC was concerned at the low level of Nigerian content in the country and thus called for a fresh approach to domesticating oil and gas industry spend through the establishment of the Nigeria content division (NCD) – with the aim of identifying and guiding the implementation of key national content initiatives, including promoting local manufacturing of steel plates and pipes and developing engineering design expertise in the country.

Dr. Baru maintained that by 2010, when the Nigerian oil and gas industry content development (NOGICD) Act was enacted, a national content co-ordination framework (which incorporates the key stakeholders in achieving increased linkage of the petroleum sectors with other sectors of the economy) was established under NNPC’s NCD, stressing that the division then metamorphosed into today’s NCDMB.

The NNPC GMD listed the achievements recorded in the development of local content to include ramping up pipe mills from 100 000 tpy to 420 000 tpy, representing 40% of industry demand and the sustainable engagement of indigenous service companies and contractors to carry out NPDC’s operations and maintenance activities.

He disclosed that the NNPC was actively collaborating with NCDMB to drive indigenous participation through the engagement of community resources, human resources and capital in the execution of joint venture projects and maintenance activities.

Dr. Baru stated that in a bid to stimulate the participation of indigenous companies in the oil and gas industry, NNPC has continuously worked with NCDMB to align the Nigerian petroleum exchange (NipeX) portal and the Nigerian oil and gas industry content joint qualification system (NOGICJQS) portal with a view to adequately capture the capacity of local companies to enable them take advantage of the available opportunities.

He revealed that as of today, local companies are now active participants in the bidding process for the crude oil term contracts and the direct sale of crude oil and direct purchase of petroleum products (DSDP) contracts.

“Hitherto, this is an activity that was exclusively reserved for foreign companies,” he stated.

He said in order to directly intervene in local participation, NNPC established the NNPC oilfield services limited (NOFS) to create sufficient capacity for direct involvement in the provision of high-end value-added services to the industry.

The NNPC helmsman also stated that the corporation has also continued to midwife local companies to be on the driver’s seat in rehabilitating and revamping critical downstream assets – product pipelines, storage facilities and the refineries.

He said the NNPC was proud of the Nigeria content achievements in the nation’s sustainable economic development, saying that the achievements have stimulated other sectors like information and communication, automobile, construction and power.

The Executive Secretary of NCDMB, Engr. Simbi Wabote, applauded the NNPC for driving sustainable economic development through the Board even as he assured of the benefits of the initiative to the country going forward.

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