By Emeka Ugwuanyi
Members of the Independent Petroleum Producers Group (IPPG) have called on the Nigerian Content Development and Monitoring Board (NCDMB) to review certain aspects of its legislation that will negatively affect the competitiveness of Nigeria’s oil and gas sector in the global marketplace.
The Chairman of IPPG, Mr. Abdulrazaq Isa, made the call Tuesday while delivering his goodwill message entitled “Nigerian Content in action” at the ongoing 12th edition of Practical Nigerian Content (PNC) Forum in Yenagoa, Bayelsa State. Isa specifically called for review of the Human Capital Development (HCD) training requirement, which behooves industry players to set aside 3% of their project cost (projects above $1million) to conduct local content training during. According to the IPPG boss, this requirement amounts to a multiplication of levies as industry players currently contribute 1% of their total costs as Nigerian Content Development (NCD) levy as it is cost-ineffective for operation and may make investors divert their investments to emerging investment destinations.
Isa said: “I would like to encourage the NCDMB to review certain aspects of our legislation that may potentially work against the competitiveness of Nigeria’s oil & gas sector in the global marketplace.
“A case in point is the Human Capital Development training requirements wherein industry participants are required to set aside 3% of project cost (projects above $1million) to conduct local content training. While this is undoubtedly a laudable initiative, we must consider that it amounts to a multiplication of levies as industry participants are already equally required to contribute a separate 1% of total costs as NCD levy. This invariably leads to higher project costs especially as the training is not allowed to be provided directly to company staff and service providers.
“Due to this and other contractual or administrative reasons, the process of complying with local content requirements has, on many occasions, proven to significantly increase the overall cost of delivering projects in Nigeria. Again, this unintended outcome requires some detailed review in order to ensure that we are not losing new investments to emerging investment destinations in the process of driving our local content agenda.
“Most critically, because of the strict local content requirements, we have gradually seen a reduction in the presence of leading international oil & gas service providers many of whom are leaving Nigeria in droves. Unfortunately, while we continue to prioritise local content development, we must recognize that these international players have a key role to play in ensuring technology transfer and knowledge sharing that our local players can benefit from. You will agree with me that our local players still lack the requisite skills to adequately support our deep offshore operations and other specialised operations. Therefore, our recommendation is that ways should be sought to modify local content requirements to ensure that the industry remains globally competitive and sustainable.”
He, however, noted that this edition of the PNC will be the last under the stewardship of the indefatigable and high-performing Executive Secretary, Engr. Simbi Wabote. He added that since his appointment in 2016, NCDMB has delivered unprecedented milestones and has been a shining example, not just in the industry but the nation, on how a best-in-class government agency should operate.
These strides, he stated, have definitely laid a solid foundation for the growth and development Nigerian Content in the years to some. It is on that note and on behalf of IPPG, I would like to express our deepest gratitude to him for his continuous support and unwavering commitment to the survival and growth of our industry.
“As a Group, we remain optimistic that the vigour with which the local content policy has been implemented, we are able to get it right for the long-term growth of our industry. IPPG hereby re-affirms its commitment to continue to partner with NCDMB, as it aims to strengthen in-country capacity and increase Nigerian Content for the benefit of the industry and the county,” he added.
The theme of this year’s PNC Forum is “Deepening Nigerian Content amidst Divestments, Domestication & Decarbonisation.”
