Local Content cuts costs of projects


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Effective implementation of Local Content by operating and service companies in the oil and gas industry will lower the costs of their projects, the Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Engr. Simbi Wabote has said.

Speaking recently when he led Nigerian Content General Managers of international operating companies and some service companies on visits to the facilities of Lagos Deep Offshore Logistics Base (LADOL), Nigerdock and Dormanlong in Lagos, the Executive Secretary explained that Local Content implementation might attract huge investments costs but would ultimately make the projects cheaper in the long run. According to him, “Local Content guarantees security of supply which reduces costs significantly. All over the world, Local Content reduces costs if you do it correctly and stay the course. You are assured of the security of your facility if you involve the locals.”

On plans for the industry, the Executive Secretary announced that the Board would collaborate with international operating companies to conduct fairs on upcoming industry projects and their capacity requirements so that stakeholders can prepare effectively to participate in them. He added that the Board would conduct skill gap analysis in the industry to understand the capacity gaps that needs to be filled in existing and forthcoming projects. He further assured that the Board will work with international and indigenous operational companies to kick start projects which are necessary to keep Nigerians employed and grow Nigerian Content.

He also commended LADOL and SAMSUNG for their quality of work on the Total Egina’s FPSO project, noting that it meets international standards. He affirmed that the investments at LADOL’s facility illustrated the Board’s policies of domiciling industry operations, creating job opportunities for Nigerians and extracting legacies from major industry projects. He promised that the Board would galvanize the industry to patronize such facilities to justify the investments.

Speaking further, Wabote revealed that the development of the integration yard was made possible because the Board insisted that the Egina FPSO project must be partially integrated and fabricated in Nigeria. The Board also supported LADOL through the Nigerian Content Development Fund (NCDF) by providing it with $15m partial guarantee on a facility it accessed from GTB. As part of the package, the Board granted 50 per cent rebate on the facility, whereby the NCDF would pay half of the loan if it performs. The implication is that $7m is provided over the life of the loan, bringing the total exposure of the NCDF on the project to $22m.

Speaking when he visited Nigerdock, the Executive Secretary praised the company for employing over 1000 Nigerians and providing several others with qualitative training despite the challenges facing the industry.

He explained that he decided to visit the facilities in company with Nigerian Content General Managers to enable them appreciate capacities that exist in local service companies.

He stressed that Nigerian Content was not about indigenization but domiciliation and domestication, noting that the quality of fabrication in the company was comparable to what was obtained in China and Brazil.

Speaking earlier, Chairman of LADOL, Mr. Ladi Jadesimi applauded Total for committing to the EGINA FPSO project despite the uncertainties surrounding the 2015 general elections, the Petroleum Industry Bill and fall in crude oil prices. He assured that the project will be completed according to schedule.

Also speaking, Chairman of Nigerdock, Mr. Anwar Jamarkani solicited the support of the NCDMB in ensuring that the company got new contracts to enable it keep its employees and maintain its equipment.



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