‘Why Nigeria cannot implement local content 100%’

Crude oil production may be affected if the Nigerian Content
Development and Monitoring Board (NCDMB ), were to enforce full
implementation of the Nigerian Oil and Gas Industry Content
Development (NOGICD) Act .
The Executive Secretary, NCDMB , Simbi Wabote, at the Public Hearing
organised by the Senate Ad- Hoc Committee investigating the $ 16
billion Egina project, said some targets set in the Act were
inspirational, and not attainable at the moment because of limitations
in capacity and technology .
He cited an example with Section 53 of the NOGICD Act , which mandates
that all fabrication and welding activities must be carried out in
Nigeria , yet there are not enough dock yards in - country where the
hull of big vessels such as the Egina FPSO can be fabricated from
scratch.
According to Wabote , "If we are to implement the Nigerian Content Law
100 per cent, we will have to stop oil production in Nigeria , develop
non -existing capacity , and then start production again. The Board
enforces the law with pragmatism . Ninety- five per cent of our
construction in the oil industry is steel , yet we do not have a steel
mill in Nigeria . The oil and gas industry depends on sectoral
linkages to deliver on some items . More so, Local Content is a
marathon race and not a sprint. "
He said the Board set out to achieve 60 per cent Nigerian Content on
the project, but realised over 50 per cent, which he described as
commendable because the execution of Egina set new benchmarks , and
domiciled new capacities and facilities in - country , one of which is
the FPSO integration facility at the SHI- MCI yard located at the
LADOL Free Zone, Lagos.
On why the Board granted some waivers for the importation of certain
equipment used on the Egina project, Wabote explained that some
equipment used in the oil and gas industry were proprietary , like the
Christmas Tree, while some raw materials were not available in Nigeria
.
"In such instances, the operator or contractor would request the Board
for permission to import . When we give such waivers, we also mandate
the companies to execute Capacity Development Initiatives (CDI) to
close the capacity gaps ," he added.