Indigenous upstream operators urge NCDMB on monitoring

Indigenous service providers in the upstream sector of the oil and gas industry  have urged the Federal Government to reinforce the Nigerian local content programme to enable  it meet its value creation agenda, and not just being a mere gate keeper.

The President of the Petroleum Technology Association of Nigeria (PETAN), Emeka Ene, who stated this in a chat with The Nation, said   the purpose of creating the Local Content and Nigerian Content Development and Monitoring Board (NCDMB), is to ensure that value from the industry is retained in-country, as well as capacity building for the locals,  but regretted that some players have turned the programme into toll gates, where no value and capacity are created.

He said  the Content Board has done well in the development of local content, but said that it has not so performed in monitoring and enabling access to long-term loans by players.

Ene said although the Nigerian Content Fund now over $500 million, so it needs to improve in these areas so that the programme will achieve its objective.

He said: “The NCDMB has created an enabling environment for Nigerian companies to grow capacity.  When the Nigerian Content Development and Monitoring Board was formed, the policy makers did the right thing by not emphasising the monitoring part, but the development part.

“Although the people in the industry were a bit concerned about the potential negative impact of the local content on the growth of business, the NCDMB went to a large extent to assure companies and emphasise the development of Nigerian capacity. That has expanded the scope of many indigenous companies.”

Ene said there has been a fair amount of abuse because one of the dangers of local content is the potential creation of toll gates, where no value is added, adding that PETAN as an organisation frowns at such.

“We think that local content should be value-added. It should be competitive. People should make investments and not to sit back and collect tolls. That does not help to grow the industry. That is not local content,” he stated.

“Nigerians have borrowed money and made investments. We expect that the NCDMB should support such companies so that they recoup their money. What happens is that when they invest in equipment and capacity, people learn real things that they can apply. Nigerians are working across the globe now based on the skills they learnt from Nigerian service companies.”

Ene said the content board focusses much on monitoring, an aspect he stressed, is ”very important. It allows us to sieve the chaff from the real thing. It also helps to strengthen the institutional and regulatory role of the NCDMB.

“One area we think more should be done is in the area of capacity building through fund access for local companies. That was the purpose of the Nigerian Content Fund. Nigerian Content Fund was supposed to strengthen Nigerian companies. Not necessarily contract financing, but to strengthen capacity growth,” he stated.

“If a company invests $100 million buying an ocean going vessel, and all he has to finance it is a two plus one year contract, whereas it takes 10 years to recover the cost of that investment, if you take away that contract, what happens to him? How does he make up?

How do you then encourage local content, he querried?

He said for the content board to develop local content, “we must put money where our mouth is. We must support Nigerian companies with real capital, access to long-term low cost capital, so as to deepen and grow their capacity in the real, not in the figurative and inconsequential way.”

The post Indigenous upstream operators urge NCDMB on monitoring appeared first on The Nation.

Get more trends like this

Subscribe to our mailing list and get latest Nigeria trends in your inbox.

Get more trends like this
in your inbox

Subscribe to our mailing list and get latest Nigeria trends in your inbox.