The Executive Secretary (ES) of the Nigerian Content Monitoring Development Board (NCDMB), Simbi Wabote revealed in his key note address recently at the Oil and Gas Trainers Association of Nigeria (OGTAN) Summit that the Board will boost Local Content through education. According to him “We have never had this before, since the establishment of the Nigerian Content Monitoring Development Board where we focus on a day like this to talk about the educational aspect of it”. He extolled the virtues of his predecessor, Engineer Ernest Nwapa who pioneered the NCDMB and strived to address and touch all issues as contained in the Act. Wabote emphasized about the private sector mentality with its culture that “when one gets into any organization without political ideas, he will not jettison every good work that has been started, the onus is on you to build on that good work and improve on it that is the challenge I see in this country and when people are appointed to positions they politicized those positions and start new initiatives that they don’t even have time to complete”.
NCDMB is one of the institutions that has not been politicized because all its Executive Secretaries that have been substantially appointed are not politicians. They are technocrats that are meant to deliver value that is expected of them out of what the Act contains. The NCDMB ES touched on key parameters required for sustainable local content practice and the link to quality education and training.
Wabote made it known that an enabling regulatory framework backed with appropriate legislation is very important so that there will be no ambiguity on the duties of various stakeholders. There is an emerging Act from 2010 in place to guide the implementation of Local Content Practice in the oil and gas sector. Before there was no room to practice Local Content on the best endeavour basis as was the case before the law was enacted. Nigeria’s government came out with a clear policy for Local Content because it saw the value of it. The process vested the Nigerian National Petroleum Corporation (NNPC) with the responsibility of implementing the policy direction of government. NNPC did what it could to promote Local Content in the country was on best endeavour basis because there was no legal backing to pursue what it was meant to do.
Besides, the second parameter for sustainable Local Content is capacity building, structured capacity building intervention is essential to spur the initiative. This is not limited to only local manufacturing and infrastructural development but field capacity development. The country’s capacity building intervention in NCDMB has resulted to increase of in-country value retention from less than 5% before the Act to about 30%. Wabote disclosed that the government spent $20 billion yearly for the oil and gas sector and before the act less than 3% of the money was retained in-country, “If the IOCs had their ways they would do anything outside and install here to tap your oil but the 3% job they did was because the resource still remains in Nigeria so they have to come and install.” That was the ugly trend then because the government never focused on the value it will derive from oil and gas, “oil was seen as a commodity and not as a resource.” The NCDMB boss stressed further that the government dependent solely on taxes and royalties by the oil and gas companies before the enactment of the act.
Fortunately, the situation has changed for good, capacity has increased from less than 5% to 30% and out of the $20 billion spent yearly, $5 billion which will soon be increased has been added in-country as part of NCDMB strategy plan. Since the Act came into effect, there have been manufacturing of pipeline coating plants, fabrication yards, engineering designing houses put in place and facilities for FPSO integration in-country. The Board has created over 30000 direct jobs and witness the growth of successful indigenous operators.
Another parameter for sustainable local content is gap analysis. Detecting gap analysis is essential to determine gaps that needed to be closed in the areas of skills, facilities infrastructure because the oil and gas industry is a dynamic one. Wabote advocated for regular reviews of local content goals where capacities have been met and where there is over capacity to guide deployment of resource and investment decisions.
The NCDMB boss made a stunning revelation when he visited a research centre recently. He said that “In the next fifteen years, in most of the developed countries, you are not going to see filling stations any more, there will be no gas stations where you will drive your cars into and they give you gas, you are going to rather see eateries like Madonas, KFCs and in the car parks you are going to see charging points. People stop at those eateries charge their cars not to buy fuel or gasoline for their car.” Nigeria needs to watch out in the next fifteen years instead of building more filling stations and refineries. Wabote advised the country to focus on artificial intelligence and think outside the box. The new oil the world is tapping is not crude oil but data. He spoke on an innovation embark upon by Facebook which it is using, there is research in which details of people who buy items from high earned shops are taken and analysed their consumption pattern and what they like. Facebook uses the data to send unsolicited mails to would-be interested buyers, Wabote described this initiative as “the new oil that the world is pursuing.”
Research and Development (R&D) cannot be over emphasized in the oil sector. Wabote submitted that Local Content thrives when there is robust R&D guidelines drive the development of home growth technology. Countries that have witnessed appreciable Local Content development level such as Brazil and Norway attributed the growth to the priority attention giving to R&D. Wabote asserted, that the academia needs to do more while the oil industry should be breach the gap between the academia and the industry in terms of R&D. He noted that the IOCs collaborate actively with the academia in terms of research requirement and most researches are funded by oil and gas industries in developed countries. For instance in Holland, Shell spends awful amount of money in collaboration with the universities in the country to develop new technology.
In terms of R&D, Wabote decried that Nigeria has not faired because it has not spend what it should have put in place for the countries universities. Annual budget spent on R&D in Africa is poor except for South Africa that has made little impact in the process of research. The Executive Secretary stated thus “How can a country move forward with R&D?” Although in Nigeria, a lot of the burden within the oil and gas sector is invested on NCDMB. The Act provides avenue for collaboration with the academia and innovators in order to bring reasonable research findings. The Board extends its provision of fund to R&D which to be used with the academia to grow the industry. Wabote posited that the demand to access the fund will be based on international standard. The Board will focus on research that is result oriented that will take the industry to development stage. It will soon be inaugurated with the academia.
A significant parameter in the provision of the Content Act is incentives. Physical and monetary incentives are essential to attract new investment and keep existing businesses afloat where required. The Board is in partnership with the Bank of Industry (BoI) and NCDMB launched the intervention fund Nigeria service providers. Wabote said there are contributors to the fund and the oil and gas service providers are contributors to the NCDMB fund. The intervention has seen 8% of growth extended to the Nigerian service provider with interest rate of 5% to community contractors that provide service to oil and gas sectors.
Quality education and training can help to sustain local content practice, this has to do with quality education. It provides all tenets with capabilities that is required to become economic productive, develop sustainable livelihoods that will contribute to peaceful democratic societies and enhance individual well-being. Wabote agreed that provision of quality education training will provide opportunity for sustainable local content practice and providing conducive environment for learning. It will enhance infrastructure and tools while on the output side a well-grounded individual and economic productive will be of great value to the society. He went further to say that “in-put or out-put, head or tail, we are all winners.”
Wabote believed that challenges being faced by institutions in Nigeria has to do with insufficient teachers, unstable academic calendar, curriculum that are inadequate to meet the needs of the industry, and lack of attention to technical and vocational educational training. There are inadequate deployments of ICT tools to teaching learning and research.
However, no matter the challenges, there are opportunities. For instance the country through local content initiatives should be able to produce 15 million pencils for its primary schools every year. Wabote was of the view that it is unfortunate that pencils used in the country are being imported, “through local content opportunity we can change the landscape.” If such endeavour is done in-country it will change value. The country needs about two million computers for its school system which is an opportunity to help to foster local content practice the educational institutions. The Board has been promoting ICT and construction technology to boost Local Content practice. The Board focus much attention on training to assist in human capacity development. It also targets it training programme to job creation and 60-20-20 approach and collaborating with various stakeholders in the oil and gas industry for practical knowledge and requisite experience. This will accelerate sustainability in the oil sector.