Uche Usim, Abuja

Simbi Wabote, the Executive Secretary of the Nigerian Content Development Monitoring Board (NCDMB) is not smiling at those frustrating his plans for a successful implementation of the Local Content policy. Indeed, he  is quite upset by the actions of some organisation indebted to the Board  and he is not mincing words in alerting they may soon become unwilling guests of the Economic and Financial Crimes Commission (EFCC) if they fail to settle maturing mandatory obligations.

The ex-Shell engineer, has since also shut the door against quota system abuse by expatriates and is actually not willing to soften his stance.

According to him, deepening local capacity and participation in the oil and gas industry is an assignment that should not be toyed with.

This, he said, explains why from 2010 till date, the NCDMB has reduced the number of expatriates in the Nigerian petroleum industry by 80 per cent.

He said: “Recently, we rejected 494 expatriates quota applications because Nigerians now occupy key positions and deliver critical services in the industry”.

In this interview, he speaks more about the board, his challenges and future plans.

Excerpts:

10-year master plan

When I assumed office as the Executive Secretary of NCDMB on November 1, 2016, that was one of the first framework we put resources into. It has five pillars namely: technical capability development, compliance and enforcement, enabling business environment, organisational capability and sectoral and regional market linkage. It has four enablers, namely funding, regulatory environment, collaboration and stakeholder engagement and research and development.

In the past two and a half years, NCDMB has deployed and driven several impactful initiatives geared towards achieving the key milestones in our 10-year roadmap and we continually support the attainment of the Economic Recovery and Growth Plan (ERGP) of President Muhammadu Buhari’s administration.

We intend to increase local content participation from 28-70 per cent by 2030. The key rewards from the implementation of the 10-year roadmap are the creation of 300,000 jobs from industry activities and the retention of $14billion in-country out of the US$20billion annual industry spend.

On the technical capability pillar, we have moved the Nigerian Oil and Gas Park Scheme (NOGAPS) from mere plans on paper to actual construction in two pilot locations – Odukpani in Cross River and Emeyal 1 in Ogbia Local Government of Bayelsa State. Each of the parks will create employment for 2000 persons when they are fully operational and will spur manufacturing of critical oil and gas equipment, tools and spare parts close to oil fields. Recently, we signed contracts with seven companies for various construction works at the Bayelsa and Cross River Oil and Gas Parks respectively as well as the sand filling and fencing of the Oil and Gas Park site at Ikwe, Onna Local Government Area of Akwa Ibom State. We have also inaugurated Community Interface Committees (CIC) for the first two pilot parks. The committee will liaise between the communities, the contractors and the Board to promote community participation, cordial relationship and compliance with the Community Content elements of the NOGaPS project.

Industrial welding 

Before the implementation of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act, oil sector welding activities were done outside Nigeria because of lack of world-class welding facilities.

Today, we are fabricating about 60,000 metric tonnes per annum in Nigeria, which never existed before.

We have about five world-class welding yards as we speak today. These welding facilities can compete with any of their peers outside the country. Today, 95 percent of service companies in the oil and gas sector, be it onshore and swamp drilling activities, well intervention facilities, well simulation activities and others, are being done by Nigerians.

These used to be the exclusive preserve of multinational companies like Schlumberger, Haliburton and others; but Nigerians have taken all those responsibilities in the land and swamp areas, especially in the area of drilling.

Even in the operations of the upstream sector, in the past, it was the multinationals that were operating all the existing fields; but Nigerians were now operating those fields which accounted for between 25 percent and 30 percent of oil production in the country, aside domestic gas production.

Margin fields are currently being produced by Nigerian companies, adding molecules to oil production.

NIMASA-NCDMB partnership

It’s still part of our efforts to deepen local content. In the past, Wye used to build boats here in Nigeria. There is a part of our Act that harps on developing local content in the maritime sector. We also get some cadets from NIMASA database for sea-time training. That project went belly up because of massive imports of boats. So, with NIMASA insisting on getting some type of boats here, it’ll help deepen local content.

$200m SMEs fund

It is our funds but given to BOI to manage. It’s partly owned by the CBN. We have five products line. Manufacturing, loan refinancing, etc.

It has 8 per cent interest rate. Obligor can apply for $10 million. Applicants are to get a bank guarantee. We’ve disbursed $160 million out of it. They’re trying to use it to attract offshore counterpart funding. It has a one year moratorium. The fund does not completely deplete because it is a revolving one.

Compliance and enforcement

We put in place seven companies to assist the Board in carrying out specific and specialised monitoring and compliance functions in the upstream, midstream, and downstream sectors of the industry.

We also deployed chartered accounting firms to carry out forensic audit of Nigerian Content Development Fund (NCDF) remittances. As you might be aware, Section 104 of the Nigerian Content Act mandates that one percent of the value of contracts awarded in the upstream section of the oil and gas industry must be remitted to the NCD Fund.  The Forensic Audit started in November 2018 and have revealed huge amounts of non-remittances from operating and service companies. At the moment, some companies have owned up to their indebtedness and have started addressing their infractions. On the other hand, a few companies have remained recalcitrant. We have concluded plans to hand over such companies to the Economic and Financial Crimes Commission for prosecution.

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Our doors are open to companies that want to come up with structured payment plans, but we would not entertain pleas to write off any indebtedness.

We also deployed a new monitoring and evaluation template. The new framework simplifies the processes and procedures for reporting Nigerian content performance and enhances speed of compliance and quality of data gathering.

Enabling business environment

On that pillar, we can report on the successful implementation of our novel Service Level Agreements (SLAs), which we signed with the Nigeria LNG, International Operating Companies under the aegis of the Oil Producers Trade Section (OPTS) and Independent Petroleum Producers Group (IPPG).

These SLAs have helped to shorten the NCDMB interface on the tendering cycle in the Oil and Gas Industry from 36 months to 9 nine months. It has also enhanced broad compliance with the requirements of the Nigerian Content Act and led to significant reduction in the unit cost of oil production in Nigeria.

During the last review held in May this year, major operating companies, including SPDC/SNEPCo, Chevron, Total E&P and First E&P all rated NCDMB very high on the implementation of the SLA. On the same pillar, we can confirm that work has almost been completed on the 25 megawatts independent power plant that would supply electricity to the Bayelsa Oil and Gas Park and other dedicated facilities. The IPP is being constructed in partnership with the Nigerian Agip Oil Company (NAOC). We have also opened communications with an independent power provider for power supply to our park in Odukpani, Cross River state.

Under the organisational capability pillar, we are targeting to complete our new 17-storey headquarters building in Yenagoa Bayelsa State before the end of this year. The project has generated thousands of employment for the host community and created ample opportunity for artisanal skills development and other capacity building opportunities. We used the auditorium of the building to host the Nigerian Oil and Gas Opportunity Fair (NOGOF) in April this year. The Fair was attended by about 1500 delegates and provided the opportunity for the launch of the Compendium of Nigerian Content Opportunities in the Oil and Gas Industry and identification of 80 opportunities worth $100billion.

With regard to our human resources, we can confirm that we have completed the deployment of a new organisation structure and reorganised our personnel for optimum performance.

Under the sectoral and regional market linkages, which is the last pillar, we have continued our advocacy for the extension of the Nigerian Content Act to other critical sectors of the economy like Power, Construction and Information Communication Technology. We plan to collaborate closely with the 9th National Assembly to continue the process for amendment which was initiated by the 8th Assembly.

We strongly believe that there is no need to create multiple regulators of Local Content in Nigeria. The Board can modify its templates to suit other sectors. In our view, this is the prudent way to expand and entrench local Content regime in Nigeria.

Technical capability

Under the technical capability pillar is the provision of equity investment to catalyse the establishment of 5,000 barrels per day modular refinery by Waltersmith Refining & Petrochemical Company Limited in Ibigwe, Imo State and in the 12,000barrels per day Hydroskimming Modular refinery by Azikel Petroleum Limited at Obunagha, Gbarain, Bayelsa State.

The Waltersmith refinery is on track for completion in May 2020 while the Azikel refinery would be completed in 2021. We expect about 300,000 liters of diesel daily in addition to various volumes of naphtha, kerosene, and fuel oil from Waltersmith while Azikel will produce about 1.5million litres or 50 trucks of petrol daily, including 170,000liters of diesel, and other products. Both modular refinery projects have huge prospects for jobs creation, value retention, petroleum products availability and the development of in-country capability.

They fit perfectly with our vision to serve as a catalyst for the development of Nigeria’s oil and gas sector.

Beyond our support for modular refineries, we have also progressed discussions with investors on the establishment of LPG cylinders manufacturing plant, LPG depots, and gas processing facilities. We are particularly interested in the establishment of an Inland LPG Depot in Abuja to complement Federal Government’s LPG Penetration Initiative.

We are close to concluding partnership agreements covering development of hydrocarbon processing and manufacturing facilities in several states such as Cross River, Delta, Edo, Lagos, and Oyo.

We have also continued to provide leadership and guidance to other African nations that want to understudy Nigerian Content implementation. In the past two months, we hosted delegations from the Petroleum Ministries of Uganda and Gabon and we advised them on how to institute and implement a successful local content regime in their jurisdictions.

Regulation

We organized workshops for targeted oil industry stakeholders with a view to collating their inputs into the operational guidelines and draft ministerial regulations. Their contributions were infused into the final draft ministerial document which have been sent to the Ministry of Petroleum Resources and the Ministry of Justice for necessary inputs and approvals.

Stakeholder engagement

We are leveraging the sectoral working groups under the Nigerian Content Consultative Forum (NCCF) to get credible feedback from industry practitioners. Under this same enabler, we are supporting the rebuilding of the North East region, which had been impacted negatively by insurgency. In July we completed the training of 107 internally displaced persons (IDPs) under the Fair Chance Initiative (FCI). The beneficiaries were selected from Borno, Yobe and Adamawa States and were trained on plumbing, electrical, carpentry, GSM phone repair, digital soft skills, soap making and bead making. We are partnering with the Industrial Training Fund (ITF) and other bodies to attach the trainees to established companies, to enable them to perfect their crafts, learn the business side of their trades and undergo mentoring. Very soon we will launch the training of 1,000 youths in Kano on phone hardware repairs, software installation and entrepreneurship development. This program will develop a pool of local talents for assembly of GSM phones and development of software applications that are currently largely import dependent.

Over the past two years, we have established collaborative relationships with the Nigeria Customs Service, EFCC, NNPC, NAPIMS, Nigeria Immigration Service, FAAN, OGFZA, National Judicial Council, NIMASA, and others. We have set up joint committees with some of them and we plan to consolidate on them going forward.

On Research and Statistics, we are working to launch our 10 Year R&D roadmap. The Research and Development Council was inaugurated in 2018 and while the Research and Statistics framework was also signed off. In order to promote evidence-driven interventions through provision of relevant and reliable research, data and statistics, we have established a collaborative framework with National Bureau of Statistics. We intend to shortly commission specific data collection projects to counter some of the unverifiable data being bandied around our national discourse

Wielding the big stick

I’ll use the USA as an example. We have layers of security and here people try to circumvent the rules.

We use carrot and stick to build capacity.

We are developing local capacities and we monitor industry to ensure deeper local participation. The law we operate restricts us to only oil and gas.