Local service companies and manufacturers must strive to be competitive and adjust their business models in line with trends to stay in business, the Executive Secretary, Nigerian Content Development and Monitoring Board (NCDMB), Engr. Simbi Wabote has advised.
He gave this advice while speaking on the Requirements for Sustainable Growth of Manufacturing in Nigeria’s Oil & Gas Sector, at the Nigerian International Pipeline Technology and Security Conference organized by the Pipeline Professionals Association of Nigeria in Abuja recently.
According to him, the Board will continue to ensure patronage of local businesses in line with the provisions of the Nigerian Content Act and Presidential Executive Order 003, but companies that set their prices above reasonable thresholds will not be supported. “It must be stated that local content is not at all cost. There is a level of premium that becomes un-economic for patronage and there is little the Board can do in such situations.”
He commended the Federal Government for promoting the Local Content policy through various initiatives, one of which is the Executive Order 003, which mandates all Ministries, Departments and Agencies to give consideration for the procurement of at least 40 percent made-in-Nigeria products and services across all sectors of the economy.
Speaking further, the Executive Secretary listed requirements that would make the nation’s manufacturing sector grow, including the provision of steady power supply and patronage of locally manufactured goods.
He also gave an insight into some achievements recorded by the Board, including an increase of in-country value addition from the paltry five percent level to 26 percent.
Wabote mentioned the existence of two world-class pipe mills, five pipe coating yards, the increase in the number of Nigerian-owed marine vessels to 36 percent, resuscitation of moribund dry-dock facilities and local manufacturing of electrical cables required in the oil and gas industry. He further stated that Nigeria has also grown its fabrication capability to over 60,000 metric tonnes per annum and has capacity to carry out over 80 percent of engineering design in-country.
Other achievements of the Board include the creation of over 30,000 direct jobs, delivery of over six million training man-hours, award of over 90 percent of industry contracts to Nigerian companies, growth of indigenous operating companies and construction of facility for in-country integration of Floating, Production, Storage and Offloading vessels.
In his speech at the event, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Kacalla Baru decsribed pipeline vandalism as a great threat to Nigerian economy, both in terms of revenue lost and environmental effects and charged key players in the industry to confront the challenge.
He insisted that pipelines remained the cheapest means of transporting crude oil and natural gas, regretting that the Trans Niger Pipeline (TNP) with a capacity of 150,000 barrels of production per day (Bopd) was breached 39 times in 2016. “Year-to-date 2017, we have recorded 27 breaching incidents on the TNP,” he said.
The GMD added that “for the Trans Forcados Pipeline (TFP) with a capacity of 300,000 Bopd, recorded 17 breaches in 2016 while year-to-date 2017, we have recorded at least 15 breaching incidents on the TFP.”
Baru also lamented that about 700,000 barrels of oil per day was deferred due to pipeline vandalism in 2016 “while power generation in the country dropped significantly as the gas plants had to shut down thereby resulting in shortages in gas supply to power. “At present, huge amount of money is spent on protecting these pipelines which significantly add to the cost of production,” he added.