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Dwindling Number of Projects Can Undermine Local Content Boost

SIMBI KESIYE WABOTE has invested in a range of midstream hydrocarbon projects since he took charge as the Executive Secretary (ES) of the Nigerian Content Development Monitoring Board (NCDMB) in 2016. He has run with the idea of Nigerian Oil &Gas Parks (NOGAPS), and constructed a 10-year roadmap for nearly tripling the Nigerian local content input (from 26% to 70%). But even he admits that it is “so far, still far”.  In the first of a two-part interview for Africa Oil+Gas Report’s C-SUITE SERIES, he discusses the headwinds, the enablers, and the big wins of his six years in office. Excerpts:

AOGR: You took charge of the NCDMB in the sixth year of the passage of the Nigerian Content Act. Coming from a part of the industry that was perceived as the object of the act, what was the one thing on your mind that you thought had to be addressed in the first, say 30 days?

“Summit Oil will supply crude to Duport Refinery in Edo State…Shell will provide feedstock to Azikel Refinery in Bayelsa”

Simbi Wabote, ES NCDMB: At Shell, where I served for almost 26 years, I had the responsibility to manage local content locally and also eventually, internationally because local content at some point, became a global phenomenon. If you remember the Arab spring in North Africa, started by youths who wanted jobs created. They were protesting Globalization which, allegedly, provided a context in which their jobs were disappearing to China and sent to other Asian countries. Thousands of youths were being trained but there was nowhere for them to go and stuff like that. So Shell asked me , ‘hey we need you to design a global Local Content strategy for us because everywhere we operated, we faced the same problem. Be it in the US, be it in the Middle East, be in Europe, they were facing the same problem which was a reaction to the so-called globalization then.

Here in Nigeria, the population was growing geometrically and people are out of jobs. There are no opportunities for them. I have that passion to say what can we do to change the narrative? I am a patriotic citizen and as such, I should be able to drive it even if I was coming from the IOCs. For the first 30 days or a hundred days, what I needed to establish was (a) to assert myself for people to know that I believe in the course of local content development and (b) is to build the capacity of my staff in the sense that, when I was on the other side, I knew the way government institutions are perceived and looked at in terms of competencies and in terms of ability to match them. I had to make sure that their competencies were developed and I had to make sure that the industry knew that this is a Nigerian that is occupying this seat.

Given the kind of training we had in Shell which essentially is that you must stand for the truth, you must be objective and you must make the right decisions. I didn’t see how that could change me when I took on the position.

What drove the decision that by 2027, you could increase industry spend retained in the country from 26% in 2017, to 70% by 2027. As at today, that’s about five years ago. What needs to happen urgently for you to deliver on the targets fully considering the nature and challenges of the industry?

The first thing I did was ask where was Local Content at the time I took over in 2016, because the ACT was enacted in 2010 and as then, they had the operated for almost seven years before I came on board. I needed to ask myself how they Had fared in terms of the aspirations of the authors of the ACT itself? I bought in KPMG as a consultant to determine where we were in terms of implementation of the ACT. Then together we looked at the capacity in country and established where we were as at 2016 and I then said look, in 10 years’ time, I want us to get to 70% irrespective of where we find ourselves. It is an aspirational target on how we most drive things to get to that 70%. It’s very aspirational but I felt it is doable given the building blocks to attaining that 70%. We had to go through a gamut of workshops to say okay, if you want to attain 70%, what are the things you need to do to get there? We broke things down into five strategic pillars of the things we needed to do and then created some enablers that will enable it happen and of course. Now we have five years to go. But again, like you said, attaining that had a lot of conditions precedence. It wasn’t lost on us. We knew it and we lined up those conditions precedence and then created the enablers to support it.

Of course, one of the greatest factors to get there is the number of projects that we see through and within the system in terms of activities; we took a benchmark where the activities were, we looked at the portfolio of opportunities within a couple of years’ time and factored if those opportunities would be realized, then for sure, we’re going to get there.

We looked at the pitfalls, we looked at the risks associated with it and everything and then we created that roadmap to attaining that 70%. Like every roadmap, you will face challenges as you progress. We see those headwinds, we’re able to address them and we are able to use all the tools we have because part of it is that project must come through.

Out of that desire to attain our milestone targets, we had to work very hard with the minister of State for Petroleum Resources to ensure that the NLNG Train-7 project was sanctioned even in the midst of the COVID-19 because, those are things that will enable that 70% as it were. We looked at other projects in the funnel to say how do we bring them alive? You talk about the Ikike project, which of course saw First-Oil, you saw the active participation of Nigerians there. We looked at the Bonga Southwest, we had thought it would come on stream, but somewhere along the line, it was thrown into the lawn grass again, and then we looked at so many other projects. One of the factors we saw in trying to develop the strategy was the uncertainty in the industry which was instituted by the Petroleum Industry Bill that remained there and our aspiration and desire was to drive and work with all stakeholders to see that that bill became an ACT which of course was achieved. The expectation was that once you clear most of those uncertainties, projects will come. Yes, since it was passed, we can see some bit of inertia within the companies to start to move. But of course, we also faced with the challenge of COVID which hit us and then currently, of course, we are in the election season and most businesses would want to see that that is over before they invest. We still believe that we will attain the 70% because today in Africa and in the world, everybody looks up to Nigeria in terms of what we’ve been able to achieve and pull through in the Local Content arena. We keep pushing and driving that agenda.

One of the things that leap at us when we look at this your growth plan is: “Build effective internal structures in terms of people, skills, processes and systems to support the Board’s operations”. Seven years down the line, do you think you have nailed that down?

Today, the NCDMB is seen as the number one MDA by the Ease of Doing Business assessments. We came from almost 27 to become number one.

And this is as a result of the people. We’ve invested heavily in capacity building of our staff and I’m sure that if you have interaction with them, you will see that we have built their capacity. A lot of our staff feel proud putting on the NCDMB barge and we see that even when we serve in committees with other MDAs. We stand out as NCDMB.. The Ease of Doing Business (a unit in the Presidency) assesses the processes that you have established; how functional they are, how transparent they are. All those were put into a basket. So having attained the number one position, there is no other measure I want to use to test that equally because this was independently done within the office of the Vice President of the Federation; they gave us that rating as the number one agency in terms of ease of doing business and it’s about people processes and the institution itself. I could tell you with all certainty that I don’t know what else is there after number one and that’s what we have achieved.

You don’t want to say that’s number one in Nigeria but it could be a global thing?

What do you mean, comparing globally?

Yes; exactly.

NCDMB is sought after by most African countries that have discovered hydrocarbon. I was in Ghana to deliver the keynote address

“The Africa Energy Fund was an Idea of the NCDMB. We started that advocacy then the idea was taken from us under permission by APPO, the African Oil Producers Association. They had to come to us and say, ‘let’s take this idea and let’s midwife it further’.”

at their Local Content workshop. Every time, every day, you have most of the countries calm down to Nigeria to rob minds with us for us to take them on the path we went through to achieve this objective. It’s not a local accomplishment. Like you are aware, I think one of the local magazines or so also give an award to me as the African Local Content Icon. So it’s to tell you that it’s not a local achievement. Yeah.

One of your concerns, when you took charge, was the dwindling size and value of projects. You said, at the 2017 NOG conference, that domiciliation can only be robust when the (upstream) projects are there. Since then, investment has dwindled and the number of projects have reduced. Are you particularly worried?

Not particularly, but I am very concerned. There are so many factors that you could attribute to that and one of them I have addressed. A key headwind we are now facing again is the climate change issue, which is the raging argument against most of the hydrocarbon related projects. How do we respond to the narrative that highlights fossil fuel as the demon and which threaten to dry up funds that are coming to Africa especially now that every country on the continent is now an oil producing country. These international companies and funders would withdraw funds. What do we do? Let us create the African Energy Fund (AEF) and so we started that advocacy in NCDMB and then the idea was taken from us under permission by APPO, the African Oil Producers Association. They had to come to us and say, ‘let’s take this idea and let’s midwife it further’. I believe that if we don’t do that, there’ll come a time when those investments will no longer come. So we are advocating. When COP-26 happened in Glasgow, the entire fossil fuel was put on the table including gas as part of what will not be pursued. But today, thankfully, gas has been taken out of that and made also green energy as it were. That also helped by the regional conflict between Russia and Ukraine where people now saw the energy challenge because the oil and gas business is not something you can switch off and on.

To develop a field takes you almost four- five years and people have seen that Investments have declined with regards to looking for new finds and the rest of it and the world is heading towards an energy crisis. We keep pushing; we see those hand winds, but we try and say, from our own standpoint, what can we do as NCDMB to support that process?

The NCDMB under you has part funded several midstream projects. Our interpretation is that you want to industrialise the country NOW NOW NOW. It means that you are in a haste but critics may say: why not let this be organic, why are you kind of rushing this?

People who will talk about me rushing it are probably not in this business and they probably don’t understand it. There’s no rush associated with wanting to support the growth of the midstream. If there is anything at all, these are things we should have done like yesterday. As an example, you produced almost 2Million barrels of crude oil every day before but now we are struggling with 1Million barrels of oil which we don’t add any value to. You sell all your crude and you import refined products. I mean, how can you explain that? If you are not in a hurry, what else will you be? You look at your gas and you pride yourself that you have almost 206Trillion cubic feet of gas yet, there is no gas available to run your power plants in the country. And 60% of Nigerians perhaps, don’t have access to electricity. What else will spur you on to be in a hurry, is it when Armageddon comes that you will been a hurry? All we are trying to do is catch up because the world is moving on. Today, with an abundant of hydrocarbon beneath our feet, we are still struggling; the world is thinking of other forms of energy. When are we going to get there if we don’t quickly get to do what we have to do in order to bring Nigeria to where it’s supposed to be?

Some people look at what you’re doing and try to make comparison with other projects that are already in the pipeline or under construction. So they look at Nigeria Oil and Gas Parks (NOGAPS) initiative and they say, that looks like the Gas Master Plan that didn’t happen. Is it now going to happen just because NCDMB is driving it?  Yet some would say that NOGAPS is competing with the Ibigwe Industrial Park and the Utorogu Industrial Park. Why are you competing with all these private resources?

I think if I take it from this perspective, Nigeria is not an industrialized Nation. Manufacturing capacity is extremely low in the country and for us, we want to be seen as acting like a catalyst for the industrialization of this country. We’re not in the forefront. We don’t have enough resources to be in the forefront of it. But, let us do good examples that people can see and say it is doable. That’s where we come in. For instance, when we decided to work with Waltersmith to build a modular refinery, a 5,000 barrels per day modular finery, we wanted to catalyze it and we wanted to prove it that it is doable.  Today, the Waltersmith refinery in Ibigwe is running non-stop; they don’t even have a product storage in their tank because as they produce it is taken away. What we didn’t want to be as NCDMB is to talk about things without showing people that it is doable. That’s where we don’t want to be. We don’t want to keep talking about establishing manufacturing base and we are not showing people that it is doable. That’s why you see us in those Industrial Parks. Our industrial park is just a mini 25 hectares industrial park, but we want to show people that if you put your heart to it, it can be done. If you go to Odukpani today, we’re almost there to commission the industrial park, if you go to Yenagoa, as a matter of fact, in all the flooding that happened in Yenagoa, our Industrial Park was not flooded including our head office because it was taught of about properly and it was constructed properly. We do what we say. We don’t want to be the preacher who tells people to do something but turns around and says look, do what I say not as I do. Ours is to say do what we say and as we do. That’s what we are trying to proveWhen we started working with Waltersmith to start the modular Refinery, it wasn’t what was thought about but we did it and within a record time of 18 months. We got the refinery running. It’s one of those good examples that you can think of and we try to touch other areas; also in the gas business today, almost 70% of our partnership, our investments, are in the gas area. Be it storage facilities for LPG, be it SPC Distribution Network to ten northern states of the Federation. We have no capacity to muscle out anybody, but we have capacity to show people that it is doable.

The Board (NCDMB) recently reported it had secured the approval of its Governing Council for a partnership to produce 123,000 metric tonnes per annum LPG, which is about 10 percent of current demand nationwide, from the Utorogu Gas Plant, in Warri, Delta State. That would mean a partnership between that company on one hand and NPDC and ND-Western, joint operators of the Oil Mining Lease (OML) 34, where the Utorogu field is located. But the feelers from the industry is that this same company approached Seplat for the same thing and the deal broke down because they didn’t even show up to build anything, let alone receive the gas. After the Seplat challenge, which Seplat sources say, smacks of PGID, the sense we get from NPDC is the same sense of frustration with this same company. Are you sure of them?

Southfield Petroleum?


Southfield Petroleum is a company we are partnering with in order to produce LPG within the Utorogu field. Currently the company is in discussion with Utorogu gas plant, which is a joint venture between ND-Western and NPDC. First, before the project will go ahead, they will be sure that there is a gas availability and then that commitment has to be on the table because currently where we are at now is the feed development for the project itself; but before we will beat our chest that we have secured that project is to ensure that all the i’s are dotted and the t’s are crossed. It’s within the project development funnel and one thing we must understand about investments in general today is that, if you go and speak to Elon Musk and ask him about how many businesses did he invest in and he didn’t succeed, he will probably give you a catalog of what he tried and he didn’t succeed at but with the ones he succeeded at, he is where he is today. Talk to Bill Gates, talk to Zuckerberg, nobody can tell you that every Investments they’ve been into was a success and that’s the challenge we have in Africa.

The averse appetite for risk-taking is even in us as a people, let alone talking about investment. Take our sense of adventure: some adventures that you see the Caucasians engaging in, you just have to think and ask yourself: How many Africans will want to go and climb Kilimanjaro? How many Africans will want to enter the sea and swim with a shark or with a Whale? These are risks that people take in order to understand nature and these are serious risks. But send an African, particularly in Nigerian man, he will hardly want to take any risks as it were. So with Investments globally, you must continue to push the boundaries and some of them will succeed while some of them will not succeed. But if you want to wait for everything you get involved in to succeed, you’re not going to go anywhere as a person or as a country.

So that -Utorogu-is a good project and it is still work in progress. We’re still pushing and believing that it will come to fruition as quickly as possible.

The NCDMB has succeeded in helping to deliver one modular refinery that has been working now for the past two years. It has also invested in two others, but refineries that are not built on producing fields always have challenges of feedstock supply. What’s the guarantee that these refineries will not be sitting idle?

“We looked at the Bonga Southwest, we had thought it would come on stream, but somewhere along the line, it was thrown into the lawn grass again, and then we looked at so many other projects.”

One of the things we look at in our Investment Portfolio is particularly this risk you have identified because we know that there are some companies that invested in refineries that are not close to producing assets and they’re having some bit of challenges or the people involved are not holders of marginal fields or acreages; those risk are there. But when you look at refineries globally, some of the very big ones are not close to any field or assets. They still procure the crude and they refine and then they sell. Dangote refinery in Lagos is not close to any field. He didn’t own a field when he started the refinery, probably does now, but when he started the refinery project, he didn’t have an asset. He built it on the export mindset. If you go there and you see the intake and outlet, you will know that it is an export mindset. But most of the ones we got involved in are close to producing assets. For instance, the Duport Refinery in Edo State is just about 200 metres from Summit’s oil field and Summit is also a partner in the Duport Midstream. Azikel Refinery that we are involved in is just about 200 metres away from the Shell Gbaran-Ubie gas plant and it is a condensate Refinery and that gas plant produce a lot of condensates and there is an agreement between Shell and him for the supply of condensate. And so we look at all those risks and that’s why we didn’t get involved with a lot of modular refineries that came knocking because the first thing we asked them was where is your feedstock? Where is the agreement for you to get your feedstock? We know it’s always a challenge.

Duport refinery may be ready sir, but we know that Summit is not producing their field as we speak.

As at last week, Summit told me that they were ready because they have done some bit of simulation on their wells and the rest of it; so they too are also working. Yes, Dupont is ready, but they have to align themselves with Summit. Summit like you know, was producing before now. It was heavy on gas and condensate and that Refinery, the Dupont refinery, is a condensate refinery that was designed to receive condensate. I think they are addressing their issues; our inability to open up the refinery right now is predicated on two issues: one is to get DuPont really ready which of course they’ve been trying to do all this while and also to get Summit to also come on stream. I believe very soon they will resolve whatever the issues are and the refinery will start producing.

Let me ask you what you think about this. Do you think Shell will genuinely supply from Gbaran to Azikel knowing that the IOCs don’t typically deal with small projects: 1 or 2 thousand barrels wouldn’t excite Shell will it?

I believe that they will. Like I said earlier, I spent my whole adult life perhaps working for Shell and I know that if Shell commits to doing something, they definitely would do it. They don’t sign an off-take agreement if they don’t mean it because that’s how disciplined they are. I genuinely believe they would do it because I was part of that process; I serve on the board of Azikiel and we went through the process with Shell to sign the off take agreement. The challenge is now for Azikel to get ready and as a matter of fact, earlier this year had to ask me to say “hey, what’s happening with this agreement? We’re still waiting to trigger off that uptake”. They’re really keen and they also see it as a way of also supporting Bayelsa as a State and they also see it as an obligation to support such aspiration. The refinery is just an 11,000 barrels Refinery. So that won’t create any dent with regards to their products supply.



NCDMB Invites Tenders for Infrastructure Work, Consultancy

The Nigerian Content Development and Monitoring Board (NCDMB), the agency that oversees localization effort in the country’s oil industry, has invited tenders for construction of Optical Fiber Backbone Network (OFBN).

It has also invited Expressions of Interest for

Organization of Joint Industry Awards for Cost Conscious Operators in the Nigerian Oil and Gas Industry
Collation and Analysis of Data for Divers, Marine Vessel Operations, and other ski 11 sets relevant to the offshore Oil and Gas Business in Nigeria
Provision of Comprehensive Corporate Branding for NCDMB New Headquarters Building
Development/Publication of Bespoke Advertisements on NCDMB Corporate Advertisements and Key Operations
Consultancy service for feasibility study on Oloibiri Museum and Research centre in Bayelsa State.
Consultancy service for design competition on Oloibiri Museum and Research centre in Bayelsa State.


Full details in the link here

Vessel Owners Seek “Tenure Elongation” For Contracts, Reduced Interest Rates , e.t.c..SPONSORED COMMUNIQUE


By Moses Aremu

A strategy meeting to discuss modalities for a vastly improved indigenous vessel utilization in Nigeria was held on Wednesday, February 20, 2013, at the Cedar Hall in the premises of Lonadek Consultants in Lagos.

The meeting was convened to come up with action items for ensuring that Nigerian vessel owners enjoy a right-of-first refusal in all future vessel contracts and that the existing contracting strategy is designed to favour Nigerian companies, with the country’s financing context taken into consideration.

Attendees included Emeka Ndu(C-I Leasing), Pere Nduku(Seabulk Offshore), Chibuike Ogwuibe(Century Bumi), Uwem Udoh(Coastland Energy), Bunmi Akomolede(Brone Survey), Adesola Osidipe(CNS Marine) Jide Sotande-Peters(Altitude Energy). Ibilola Amao(Lonadek)  moderated the proceedings.

A submission by the Nigerian Chamber of Shipping strategy group proffering “solutions for the increase of the competitive capacity of indigenous capacity of indigenous operators from the upstream sector of the maritime industry” was circulated to participants the day before.

The conversation, which turned out to be a real strategy and national development session, lasted  1 hour 55 minutes with the following recommendations:

All Category I & II vessels must be Nigerian and Nigerians must be given a right of first refusal for Category III vessels.

There is a need for a watchdog that would compel the IOC’s to treat Nigerian vessel owners as fairly as they treat foreign vessel owners.

Most contracts awarded by IOCs do not guarantee utilisation and can usually be cancelled within a short time frame, as low as 30 days. Minimum contract duration should be set at 5years with optimum utilization. Cancellation clause is unhealthy for Nigerian business capacity growth and should be removed. Indeed, the contract termination clause often inserted by IOCs using the services of Nigerian marine vessels should be cancelled.

Most Nigerian Banks currently grant loan at single digit of around 9%.This is rather high, and is too close to double digits. In other to achieve 4-6% interest rate from financial institutions, there is a need to engage and educate the bankers in particular on the nature of the marine/maritime business. A review of the contract lifecycle to five (5) years and above will also incentivise banks to reduce interest rates.

For effective administration of the Nigerian Content Support Fund(NCSF), only contributors and those with marine vessel related operations should have access to the funds. The NCSF should serve as collateral for operators when marine vessel owners are requesting for loans from banks Import duties charged on indigenous vessels should be reduced to 1% so as to enable them compete favourably with foreign vessels and also, enhance in-country growth and development. Temporary Import Permits should continue to be charged, but should be tied to the duration (i.e. within three, six, nine and twelve months respectively) of the contract of the foreign vessel in question.

Intervention by the Federal Government of Nigeria on the issuance of the Temporary Import Permit would be helpful. The call for a Nigerian body to categorise vessels as Brand New, Used and Old is not necessary for the time being. As the marine business is international in nature, applicable rules and classifications go beyond what may apply in Nigeria. Since there are international bodies that accredit and audit vessels, such responsibility falls to them. Such calls may be revisited when the country has developed significant in-country standards that would be acceptable by the international community.

The use of bonds to overcome high customs duty is highly recommended. The option however, needs to be investigated if it is a viable line of action e.g. insurance bonds and cash In order to protect indigenous operators, regulatory agencies such as the Nigerian Maritime Administration and Safety Agency (NIMASA) and the Nigerian Content Development Monitoring Board(NCDMB) need to be sensitized with regards to certain tendencies, by some IOCs, to impose Marine and Maritime Laws and Policies from their home countries on indigenous vessel operators. However, indigenous operators themselves should strive to attain certain level of certifications that are acceptable globally.

NIMASA  requires strengthening so that it has autonomy, utilizes highly skilled and vibrant surveyors and inspectors who can close out surveys in the shortest possible time. It should also have correspondent offices in international waters, and educate, enlighten and work closely with insurance companies.

Challenges are experienced during bidding and uploading stages of a contract, on the bidding portal. The process is still very manual and requires improvement. The NCDMB should publish a list of companies that have successfully registered on the portal as well as successful bidders once selected by operator(s).

The Nigerian Chamber of Shipping should be empowered to function as an authority that regulates Marine Contractors within the Oil and Gas industry, thus filling the yawning gap that is currently in place. However, “Industry Advisory Team (IAT)” or Subject Matter Experts (SMEs) should also be included in the Chamber, so as to bring to bear, the dynamics of the operation of Indigenous Marine Vessels, with focus on asset owners.

A Nigerian Content Development Monitoring Board(NCDMB) Liaison office needs to be established in Lagos for proximity, easy access and ease of administration.

All the participants at the event had a general consensus that we should all work towards achieving and maintaining international standards and that the OVID qualification was extremely useful.

Outside of these recommendations comes some contribution from Phillip Matthew, a marine consultant and CEO, PEM offshore. He notes that Nigeria should promote The International Marine Contractor’s Forum (IMCF)’s Common Marine Inspection Document (CMID) “which is skewed towards the requirements of captains and navigators and is a better at qualification/classification of vessels of below and above 500GRT”.
He argues that the Offshore Companies International Marine Forum (OCIMF)’s  Offshore
Vessel Inspection Database (OVID) , is skewed towards Marine Engineers and “does not recognise the difference between vessels  of 500GRT and above and as such places very unnecessary requirements on owners of smaller vessels and would result in an unnecessary financial burden on
Nigerian vessel owners” .


Egbe’s Party For Local Content, by Chris Paul Otaigbe



Weltek had the chairs and the tables set out as if it was preparing for a glistening bridal party.

On a recent Wednesday afternoon, at its premises in Port Harcourt, Nigeria’s main oil city, the engineering service firm had laid out seats for “important guests”  under three large canopies.  The setting looked surreal, if not incongruous, for a weekday. Ordinarily, this office facility would be busy with technicians and engineers working on heavy duty equipment to move out to a deep offshore facilityfor an Oil and Gas project.

What makes it more intriguing is that this homegrown Nigerian company is as busy as they come. It is currently engaged in Engineering, Procurement Installation and Construction(EPIC) of topsides facilities on the Floating Production Storage and Offloading(FPSO) vessel located on the Bonga Field, Nigeria’s flagship deepwater field.

Weltek is also designing, fabricating and installing wellhead safety control panels on the two wellsAroh-1 and Aroh- 2 on the onshore Aroh field operated by NPDC, an arm of thestate hydrocarbon company NNPC. The company is actively carrying out anupgrade of Flow station instrumentation and control from pneumatic to electronic using foundation field bus technology for five (5) Flow stations on three Shell operated fields: Cawthorne Channel, Awoba and Krakama fields in the east of Nigeria.

This is quite a bit on any company’s plate, let alone a Nigerian company’s.

So why is Weltek throwing a party on a workday?

It so happened that the projects outlined above were at the heart of the reasons why Weltek was entertaining guests. The company wanted to strutt its stuff. An explanation. If you were a Nigerian company carrying out engineering services, there’s a prevailing assumption that you could really just be a commissioned agent; that you didn’t really have the equipment; you don’t have quality staff to handle really technical stuff; that you were taking advantage of the new environment of local content advocacy, to grab for yourself a share of the pie.

Weltek belongs to a body, named Petroleum Technology Association of Nigeria(PETAN). Its founder and CEO, Pedro Egbe, used to be chairman of this association, which is determined to change that perception.

In short, that Wednesday afternoon’s social outing was a programme designed to stage an exhibition of some equipment, locally manufactured by this Nigerian company, or acquired and being used by staff of the company, to do Deep Offshore projects in Nigeria.

This event was to showcase Weltek, as an example of a PETAN member, who has grown technical capacity and works wholly as a technically honed Nigerian company.

Mr Egbe’s guests this afternoon, naturally includedEmekaEne, who is the incumbent Chairman of PETAN and, more pointedly,Ernest Nwakpa,  Executive Secretary(ES) of the Nigerian [R1]  Content Development and Monitoring Board (NCDMB) -The Facility Exhibition was to show and prove to Nwakpa and his team that a Nigerian indigenous company has the capability to stand shoulder to shoulder with any oil service company in any part of the world.

This point was emphasized in Egbe’s opening remarks as he recounted hisrelationship with the NCDMB Executive Secretary. “Ernest and I have been in thisfor a very long time trying to see how Nigerians can benefit by working from theresources that belong to them. The last attempt I remember was even in my village,we were the only Nigeriansin the group with  a lot of foreigners and we weretrying to convince them about how we as Nigerians can work with what we haveavailable to us – our local, natural resources.Then he wasn’t ExecutiveSecretary.”

Egbe, 60, has been in the forefront of pushing the Local Content issue in his over27 years in the Oil and Gas Industry. His passion to get more Nigerians toparticipate in the nation’s Oil and Gas Industry made him combine forces withcolleagues who share the same aspiration with him. “PETAN started on thepremise that we should not as a people, just work and when we die, have ourcompanies die as well. We wanted to work in a system where our governmentunderstood our problems, our dilemmas and ensured that our businesses could out-live us. That is why in 1990, we formed a corporate PETAN, and fought from thatyear till we were heard by the government. And today, I thank God we have theLocal Content issue addressed in our laws. This could not have become lawwithout drivers, people like Ernest and his team have tried to dedicate themselvesto the task and PETAN has not relented in ensuring that what we fought for,came to pass.

The exhibition showcased certain innovations and upgrades that were hitherto done outside the shores of Nigeria.

Some of the most challenging work that Weltek was doing was the flow station information technology systems upgrade in the Cawthorne Channel, Krakama and Awoba fields. “In the NCDMB Law”, Egbe explained to guests,“these areas are seen as things that could be achievedeventually, maybe in many years to come but we want to show today that such things could be achieved by Nigerians in this country”. He also claimed that “The SNEPCO BONGA North Topside project is the first grand field contract for a Nigerian deep off-shore field awarded to an indigenous company.”

Egbe, in the company of Weltek’s Executive Director Igweka Uche, led the guests to the various facilities in the company’s compound.

When they returned, the PETAN Chairman, EmekaEne, expressed his excitement to have witnessed the level of development he had just seen. “I don’t know how to say this,it’s a pleasure, and I mean this in the real sense of the word, to see progress, to acknowledge progress, to see the LocalContent drive become a reality. Executive Secretary, you can take back these words [to your board]:the LocalContent is working. It translates into know-how, technology, multiplying the value in the people’s skills, skills that can be applied over and over again in different scenarios. Every single time a milestone is breached, it becomes the stepping stone for the next milestone.Many people may say a thing is impossible but once it’s done, the limit of impossibility is stretched to the next level. More and more, translating value in our industry is becoming the key to growing local content and its impact. As the Weltek Chairman inferred, you don’t see the rest of the pyramid, what you see is the tip of the pyramid today. There are multiples of sub-contractors who worked on different components that fit into this whole system and this is the key. PETAN as an organization has brought together players in the oil industry that are interested in creating value and we see this as a very good example of what can be achieved at this level”.

Nwakpa, Nigeria’s Local Content czar, acknowledged what he called the patriotic zeal of those Nigerians who decided to own facilities that will add value to the Nigerian economy rather than playing agent to foreign companies in Nigeria must be appreciated. “That’s why people like Pedro, and the people that started PETANmust be recognized for their pioneering efforts.If we did not have a group that had already started practicing the Nigerian content, fighting for the Nigerian content, if we couldnot show what we had done with the policy, we would not have been able to convince the players to follow the policy of government. So, everything we are seeing today actually started from the efforts of PETAN, and we must give them kudos all the time. I remember in the early days, when we were drafting the Law and workingon the policy papers, PETAN had the likes of Pedro, Ugo Ralph Ekezie, and then the younger ones like Emeka [Ene]. The philosophy being discussed then wasdomiciliation, Don Pedro insisted that domiciliation would still allow foreigners to do the work, that it should be about indigenous entrepreneurship. We agreed that that was where we wereheaded but it had to be a gradual process”.


 [R1] Is it Nigeria or Nigerian Content….Board?


Ugandan Businessmen Call For Local Content

Ugandan private sector interest group, the Association for Uganda Oil and Gas Service Providers(AUOGS), has called on government to include opportunities for local firms in the Petroleum Bills tabled before Parliament.

The country’s legislative arm is debating two bills – Upstream (Exploration, Development and Production Bill 2012) and Mid-stream (Refining, Gas Processing and Conversion Transportation and Storage Bill 2012). The Upstream bill instructs Exploration and Production companies as well as their agents to give preference to goods and services produced or available in Uganda unless they are more expensive or of inferior quantity and quality to those that can be imported. The AUOGS however argues that the provision could be interpreted to the disadvantage of indigenous companies. “Who determines whether the services by local firms do not meet the international specifications?” the lobby group contends. “There should be an independent body to scrutinize whether dealers meet the required standards.”

The AUOGS asks the Natural Resources Committee  of the Parliament-which  has been gathering views from the public to include enough clarity in the law to ensure that local firms benefit from local content opportunities set aside for them.

“Government needs to be clear what a Ugandan company is”, AUOGS Chairperson Bob Kabonro told the committee, “is it one registered in Uganda or one owned entirely by indigenous Ugandans?”  He declared that “there has been lack of enabling laws on the provision of goods and services”.

Emmanuel Baluyi, the lobby group’s lead counsel, requested that laws should give preference to indigenous contractors, encourage joint ventures between indigenous companies and foreign companies and ensure uniform financial and legal accounting standards for ll international oil companies that operate in Uganda.

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