In a bid to create more jobs in the country through the Nigerian Content Act, the oil and gas industry will this year pursue greater patronage of local services and products, the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, has said.
The implementation of the Nigerian Content Act in the past 30 months, she added, had deepened the local oil and gas supply chain and increased industry man-hours performed by Nigerians by over 350 per cent, resulting in over 30,000 direct productive jobs.
Speaking at a meeting of the Governing Council of the Nigerian Content Development and Monitoring Board held in Abuja, the minister, who doubles as the chairman of the council said, “Just by insisting on using Nigerians in the industry, we have deepened the local supply chain.
“I have no doubt that more jobs will be created in 2013 and we shall achieve greater localisation of industry services, manufacturing and fabrication in 2013.”
According to her, the 30,000 jobs were generated in engineering, fabrication, exploration and production, marine transportation and logistics sectors, have been developed to become more robust.
Alison-Madueke expressed optimism that the job growth trajectory would not only be sustained but also drive multipliers across industries following the integration of youths’ training into the implementation process.
According to her, the implementation of the law has increased the level of participation of Nigerians in oil and gas contracts to 87 per cent of total industry contracts, describing this as a first step towards domiciliation and local value addition.
Commenting further on the success recorded so far, the minister said, “The board has to a large extent achieved consensus in most aspects of Nigerian content implementation to the extent that there has been no major dispute amongst stakeholders on interpretation of provisions of the Nigerian Content Law.
“Stakeholders are also responding positively to the need to do things differently in the industry for the benefit of all. This clearly demonstrates that we have been carrying the industry along in the implementation of the Act.”
Alison-Madueke also gave an assurance that the Federal Government would continue to support the board and its numerous local value-addition initiatives aimed at deepening indigenous participation in the industry.
Dwelling on the Petroleum Industry Bill presently before the National Assembly, the minister said the provisions of the Nigerian Oil and Gas Industry Content Development Act were safeguarded in the bill in order to sustain the momentum that had been achieved in Nigerian content.
“The PIB is now in the National Assembly and should provide the needed impetus for additional investments in the industry. This should be a major benefit for the capacity we are building in the local industry,” she said.
In his remarks, the Executive Secretary, Nigerian Content Development and Monitoring Board, Mr. Ernest Nwapa, explained that the Nigerian Content implementation model was focused on growing and utilising in-country capacity, while operators were made to consider long term value addition.
Under this model, government may get slightly lower revenue but this will be compensated with a higher in-country value and greater attention to life cycle of industry operations.
While acknowledging progress on the number of contracts awarded to Nigerians, the executive secretary said real Nigerian Content could only grow if indigenous companies that win contracts procure items from the country and execute the jobs in-country.
To grow real Nigerian Content, Nwapa said the industry must focus more on manufacturing, bringing back the bulk of fabrication jobs that are done in foreign countries and ensuring that pipes, valves, fittings and related equipment are procured from Nigeria.
He said appreciable progress had been made in fabrication and engineering, noting that similar growth must be achieved in the manufacturing sector as most of the valves, pumps, oil and gas equipment were still being imported.
Nwapa said, “We have started creating the platform to ensure that components of these equipment can be done here, even if we cannot manufacture the whole equipment here.
“With the support of the minister, we have also issued guidelines that require any new project to create some legacy facilities. We have been able to get commitments from international operating companies on FPSO integration facilities, dockyards, umbilical manufacturing and fabrication yards.”