President Goodluck Jonathan at the weekend stated that Nigerians and the national economy can only derive maximum benefits from the oil and gas industry if the Nigerian Oil and Gas Industry Content Development Act, otherwise referred to as the Local Content Act, was implemented to the latter.
The President noted that until a reasonable percentage of the requirements of the industry are produced in-country, Nigeria as a nation cannot benefit from the industry which accounts for over 80 per cent of its gross national earnings. The President maintained that the country’s industrialisation should come from the oil sector in view of its contribution to the economy.
Jonathan who was speaking while commissioning the Abang and Itut Satellite Field Development Project Platforms, designed and fabricated at Nigerdock Island, Integrated Free Zone for Mobil Producing Nigeria, explained that merely earning money from sale of crude oil to pay salaries and build infrastructure is not helping the economy in the desired way.
While regretting that the failure to attain the old target of 70 per cent local content in the industry by 2010 was as a result of limited capacity, he said that it was by developing capacities locally and owing assets used in industry operations that the sector can increase employment opportunities, produce and utilise more locally manufactured goods and components.
Describing the completion of the Satellite Fields Development Platforms, the first to be achieved locally, as a proof that the Nigerian Content Act was already yielding the expected transformational results, he said: "What we have witnessed today is a demonstration of the rightness of the local content law. When you consider that oil and gas sector accounts for over 80 per cent of the country’s income then you will appreciate the importance of what the law can do to transform our economy."
However, the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, who expressed satisfaction with the implementation of the Content Act so far, recalled that for several decades, similar ceremonies were celebrated in yards located in Asia, Europe and the Americas where the Nigerian oil industry had always procured floating, processing, storage and offloading units as well as offshore platforms, line pipes, marine vessels, LNG Tankers, drilling rigs, power plants and other equipment packages with which the industry is serviced.
She lamented that the resultant effect was that while revenue from oil production activities has been impressive, there has been no employment growth and little impact on our Gross Domestic Product (GDP) from industry activity.
Alison-Madueke explained that by fabricating the platforms and similar structures locally, Nigerdock’s facility supports a workforce of over a thousand people, provides practical training and employment opportunities for hundreds of engineers and welders and would be attracting international technical partnerships and investments for upgrade of plant and infrastructure.
She maintained that Nigerian Content interventions have spurred growth across the entire industry, adding that the implementation model adopted by the Nigerian Content Development and Monitoring Board (NCDMB), had resulted in the successful collaboration between the Nigerian National Petroleum Corporation (NNPC), international oil companies, other multinationals, equipment manufacturers and local service companies.
With the federal government’s target of achieving Final Investment Decisions (FIDs) for new projects estimated to be worth over $150billion in the next fiveyears, efforts must be geared towards ensuring the availability of enough yards, facilities, institutional knowledge and trained manpower to execute a high proportion of the works in Nigeria that can meet international standards in terms of quality and safety.
Speaking on the chances of industrialising Nigeria with the implementation of the Content Act, the Managing Director of SCC Nigeria Ltd. (Pipe Mill Plant), Levy Yuval, said that although investment in new areas is very risky and very difficult, the company picked up the challenge to set up the first Pipe Mill Plant and fabrication yard in Nigeria, knowing that patronage was guaranteed due to the Content Act policy, adding that in a maximum of two years, all technology would be transferred to Nigerians.