100% implementation of local content law could temporarily slow crude oil production
Bukola Odufade is Businessamlive Reporter.
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Simbi Wabote, executive secretary of the Nigerian Content Development and Monitoring Board (NCDMB) has said that a 100 percent implementation of the Nigerian Oil and Gas Industry Content Development Act (NOGICD), could slow crude oil production momentarily due to the limitation in capacity and technology.
Wabote disclosed this at the public hearing organized by the Senate Ad-Hoc Committee investigating the $16 billion Egina project. He noted that some targets set in the Act were too ambitious and not attainable at the moment because of limitations in capacity and technology.
“If we were to implement the Nigerian Content Law 100 percent, we will have to stop oil production in Nigeria, develop non-existing capacity, and then start production again,” he said, adding that 95 percent of the nation’s construction in the oil industry is steel, and that there is no operational 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 also noted that the board had set out to achieve 60 percent Nigerian content on the Egina project, but has realized over 50 percent, 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.
Wabote explained that while some equipment used in the oil and gas industry were proprietary, like the Christmas Tree, other raw materials were not available in Nigeria, which is why the board granted some waivers for the importation of certain equipment used on the Egina project.
“In such instances, the operator or contractor would request the board for permission to import. However, when we give such waivers, we also mandate the companies to execute Capacity Development Initiatives (CDI) to close the capacity gaps,” he added.