Financial Energy Review
L-R: Chairman of the committee on industry-wide implementation committee for in-country manufacturing of pumps, valves, flanges, and gaskets, Mr. Cyprain Ojum submitting their report to the Executive Secretary of NCDMB, Engr. Simbi Kesiye Wabote at the Board’s liaison office in Abuja on Wednesday.
The Nigerian Content Development and Monitoring Board (NCDMB) is set to issue policy directives on in-country manufacturing capabilities of pumps, flanges, valves, and other major equipment categories utilised in different streams of the oil and gas industry.
These the Board said constitutes a huge percentage of capital and operational expenditures.
The Executive Secretary Nigerian Content Development and Monitoring Board (NCDMB), Engr. Simbi Kesiye Wabote gave the indication when he received the report of the industry wide implementation committee for in-country manufacturing of pumps, valves, flanges, gaskets, bolts, and nuts. The committee was set up on July 7, 2022, and members were drawn from international and indigenous operating and service companies and staff of the NCDMB.
Submitting the report at NCDMB’s liaison office in Abuja on Wednesday, chairman of the committee, Mr. Cyprain Ojum noted that eight major equipment categories occur in various oil and gas operations, listing them to include pumps, valve, flanges, gaskets, bolts, nuts, meters, and instrument fittings.
He noted that “these equipment categories come in different uses and specifications and make up a huge integral percentage of capital expenditure (CAPEX) and operational expenditure (OPEX) through the life of the production field, transportation and transformation processes as well as distribution and sales of the products.”
He explained further that periodic inspection and maintenance, shutdowns, and daily production operations demand that these equipment categories are repaired or replaced where necessary, and the cost implication over the years is enormous. He informed that some of the items are sourced off the shelf, while some are designed for purpose, hence require long lead time to ship into the country. He subsequently recommended that domiciling in-country manufacturing facilities for those components will greatly support operations, improve local content and the national economy.
Ojum also submitted that the Nigerian Content target of growing Nigerian Content performance to 70 percent by 2027 and the retention of $14bn in the economy is achievable and in-country manufacturing of the eight major equipment categories would contribute a huge part of that achievement.
Providing insight into the work programme of the committee, Ojum noted that the members “spent 12 months researching, assessing, visiting, evaluating and documenting local manufacturing capacity for these critical and frequently required equipment components and accessories for oil and gas operations in Nigeria.” He indicated that their work covered 12,000 service companies and the committee was methodical in their approach and visited every facility that responded to their questionnaire and claimed to have established substantial capacity in the described areas.
Receiving the report, the Executive Secretary NCDMB thanked the committee for their diligence, sense of duty and belief in the country, noting that they demonstrated resilience and doggedness and have produced a report that is workable. He assured that the Board would study the report and implement the recommendations in the short, medium, and long term.
Wabote described Nigerian Content implementation as a marathon, explaining that the attainment of some targets and percentages in the schedule of the Nigerian Content Act are aspirational. He stated that “we have implemented Nigerian Content with pragmatism, while protecting the companies that have invested in capacity locally.” He recalled that NCDMB had commissioned a similar study on in-country manufacturing of personal protective equipment, which formed the basis of a policy that was issued to the industry. Noting that the whole essence of local content implementation is to eliminate briefcase contractors, add value in-country and create jobs for Nigeria’s teeming population, the local content boss insisted that it would be impossible to build an economy without creating jobs, and that would cause frustration to build up in the polity.
The Executive Secretary further announced that the Board would soon inaugurate a similar committee on local manufacturing of production chemicals. He insisted that Nigeria companies should be able to manufacture production chemicals used in the oil industry, considering that 70 percent of production chemicals is water. “Dangote and Indorama Petrochemical Plants are operating. We should be able to extract production chemicals from those factories to use in the oil and gas industry,” he concluded.
