By Yemie Adeoye
THE implementation of the Nigerian Oil and Gas Industry Content Development, NOGICD Act, is geared towards establishing facilities in Nigeria and ensuring that they are patronised so as to bring Nigerian jobs back home.
The Executive Secretary,the Nigerian Content Development and Monitoring Board, NCDMB, Mr. Ernest Nwapa, stated this recently when he led a team to Chevron Nigeria Limited, and Mobil Producing Nigeria, as part of a week-long sensitisation programme involving major oil and gas industry stakeholders in Lagos.
According to him, the emphasis of the Federal Government with the implementation of the Act is not only to retain the bulk of the annual oil and gas industry spend in the country, but ultimately, to create employment for millions of Nigerians on the back of oil and gas industry operations.
He noted that most countries around the world are currently working towards bringing back jobs for their nationals in the wake of the global economic crisis, adding that this agenda of the Federal Government should be supported by all stakeholders.
While conceding that keeping the cost of production reasonable and meeting work schedules are critical to national revenue, Nwapa stressed that given Nigeria’s population of 150 million, the oil and gas industry as the mainstay of the economy needs to pay special attention to job creation.
The Executive Secretary noted that the Nigerian National Petroleum Corporation, NNPC, and its Joint Venture partners cannot employ more than 25,000 persons, adding however that several thousands of Nigerians would be employed if companies put jobs in the yards of local service companies and encouraged their traditional service providers to build facilities in Nigeria, to execute their contracts locally.
He regretted that the preference for importing almost all the goods and services used by the industry from abroad is steadily eroding opportunities to develop human and infrastructural capacity, and consequently impoverishing the people and stultifying national economic development.
He said, “Each major offshore production facility awarded to be fabricated in the traditional Asian fabrication yard translates to the export of over $1billion capital from the Nigerian economy, 5000 Nigerian jobs in the two-year engineering and fabrication period and opportunity to train several thousand other Nigerians within same time frame.
“Such decisions also result in lost opportunities to upgrade existing yards and build new ones, crippling opportunity to attract investment for facilities and lost opportunities to grow partnerships between local and foreign companies.”
He stressed that such practices must stop, adding that compliance with provisions of the Act calls for a drastic change in the way the industry has been run for decades to achieve government’s aspirations.
Nwapa further asked the international oil companies to provide the Board with concrete strategies they had adopted to ensure compliance with the provisions of the Nigerian Content Act, and meet the targets set by the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke for the industry.
He said the board is set to invoke the non compliance sanctions prescribed in the Act for defaulting companies.
Specifically, he charged companies to come up with individual strategies of putting work in the yards of Nigerian service companies, utilizing indigenously owned marine vessels, and complying with the expatriate quota provisions of the Act.
The Executive Secretary further maintained that foreign and local investors will not be encouraged to establish facilities in Nigeria with a view to bridging capacity gaps until they are convinced that existing facilities are being patronised by the industry.
He pledged that the board will be unwavering in enforcing compliance, adding that, “We need to demonstrate to bidders and service providers that when you do not comply with provisions of the Act, you lose out from tenders.”
He also canvassed for a change of mindset by Nigerians holding executive and management positions in the multinational companies, to balance loyalty to employer with a responsibility to align with national objectives when advising their companies and taking key operations decisions.
In his comments, the Managing Director, Chevron Nigeria, Mr. Andrew Fawthrop, commended the NCDMB for initiating the engagement, which he said will build consensus on the implementation of the Act.
He said that Chevron was committed to complying with the Act, but pointed out some difficulties arising from the absence of a transition period and insufficient capacity in certain areas.
He illustrated the dilemma of balancing government’s aspirations, saying, “If you are seeing resistance, it is because we have goals to meet on oil production and gas delivery among other things and failure has got some penalties.”
On his part, the Managing Director and Country Chairman, ExxonMobil Nigeria, Mr. Mark Ward, assured the NCDMB of his company’s proactivity in complying with the Act.
According to him, “You are going to see a different approach from ExxonMobil. We will not wait until we get everything right because doing nothing frustrates implementation.”