Power Sector Content Development Policy: NMMP Phase 11 Skewed Implementation

The Nigerian Oil and Gas Industry Content Development, NOGICD, Act is one of the few laws made by the Federal Government that has produced credible results and is being copied by African nations.

A few days ago the Republic of Equatorial Guinea entered into discussions with Nigeria regarding new partnership opportunities such as the establishment of a joint logistics base, deployment of indigenous capacities across countries, and lowering the costs of major oil and gas operations.

The NOGICD Act, being implemented by the Nigerian Content Development and Monitoring Board (NCDMB), has provided several opportunities for indigenous companies and creating thousands of direct and indirect jobs.

Also a few days ago, the NCDMB) and the Nigeria LNG Limited announced a partnership to roll out tender opportunities from the gas production and processing company on the Oil and Gas E-Market Place, thereby implementing a key provision of the NOGICD Act.

Section 106 of the NOGICD Act defines the “Oil and Gas E-Market Place” as a virtual platform for buyers and sellers of goods and services in the oil and gas industry that allows for speedy and transparent transactions.” This provision of the Act had not been implemented since the enactment of the Act in 2010.

The executive secretary NCDMB, Engr. Simbi Kesiye Wabote, said that the roll out of the Oil and Gas E-Market Place project would be carried out in phases and is starting with the Nigerian LNG Limited.

He said that a joint working committee comprising members of the company and the Board was formed to co-create the Blueprint for the Phase-1 implementation of the E-Marketplace, while subsequent phases of the project will include members of the Oil Producers Trade Section (OPTS), Independent Petroleum Producers Group (IPPG), and the other stakeholder groups.

He commended the management and staff of Nigeria LNG Ltd for being ever ready to comply with the provisions of the NOGICD Act and for demonstrating genuine willingness to partner with the Board in various initiatives, recalling that the Service Level Agreements (SLA) was initiated with the company in 2017, to drive the timely approvals of requests submitted to the Board.

The executive secretary explained that the Board uses the Nigerian Content Seminar to discuss the various elements of the NOG

ICD Act with industry operators, service providers and other stakeholders in the industry, noting that this year’s seminar provided a platform to clarify the provisions of the NOGICD Act (2010), the Ministerial Regulations, guidelines, tools and initiatives.

Speaking on various segments of the NOGICD Act, Wabote quoted section 70 (h) to justify the Board’s assistance of local contractors and support of Nigerian companies to develop their capabilities and capacities in furtherance of Nigerian content development in the oil and gas industry.

This clarity is meant to correct the wrong perception held in some quarters that the Board is acting outside its mandate by supporting and partnering companies in strategic business ventures.

Wabote emphasised that this provision is “at the heart of developing local capacities and capabilities in the oil and gas industry. According to him, this provision explains why the Board embarked on several initiatives including the funding support and other initiatives that are directed toward developing both human capital and infrastructure.

He listed some of the initiatives to include the $300million Nigerian Content Intervention Fund with the Bank of Industry (BoI), the $100million Matched Fund with NEXIM Bank, the $50million R&D Intervention Fund and the $50million NOGAPS Manufacturing Fund.

Other support provided by the Board to local companies include partnering with local businesses to establish modular refineries, gas processing plants, LPG storage facilities, Base Oil production plant, LPG depot and refilling plants, and others with clear exit plans once the target goals are achieved.

The NCDMB boss observed that there are severe challenges negating manufacturing in the oil and gas industry, which is why the Board is developing the NOGAPS Industrial Parks to provide modern infrastructure using the “sites and services” model to support in-country manufacturing.

He reported that the Industrial Parks are at various stages of development in seven states namely

Akwa Ibom, Bayelsa, Cross River, Delta, Edo, Imo, and Ondo states, hinting that “the NOGAPS Industrial Parks at Odukpani in Cross River state and the one at Emeyal-1 in Bayelsa state are both at advanced stages of completion and will commence operations in 2024.”

While appreciating the contribution of the Shell Petroleum Development Company Joint Venture and the ExxonMobil Joint Venture for their contributions to the industrial parks using the CDI programmes, he confirmed that the Board has commenced the allocation of manufacturing shopfloors and services plots at the Odukpani and Emeyal-1 parks to qualified applicants.

The Act And The Power Sector

On 11 August 2014, the NCDMB reported that the Federal Ministry of Power (FMP) is setting up a local content policy, following the example set by the oil and gas sector in 2010.

In August 2014, the FMP published a memorandum on ‘The Development of Nigerian Power Sector Content Development Policy, Strategic Framework and Draft Bill’. This document stresses the need for a Nigerian content policy in the electric power sector, aimed at value creation, capacity development, the utilisation of Nigerian human material resources and services, and employment of Nigerians, and reducing the outflow of foreign exchange.

Though there is no further information available on what the exact provisions of the policy, when finalised, will be, or on its implementation date but the NCDMB reported that the FMP is likely to adopt the existing policy in the oil and gas sector - mutatis mutandis - to a large extent, and identified the manufacturing of meters and of 132 kV power lines as possible services Nigerians can easily provide.

This latter statement appears to have been confirmed on 1 October 2014, when the Nigerian Electricity Regulatory Commission reportedly the importation of electricity meters ‘unless there is a proof that local manufacturers cannot meet the demand, as we are committed to enhancing local production’.

The ministry of power then became the latest key sector of the economy to work towards replicating the success achieved with the implementation of Nigerian Content in the oil and gas industry.

The ministry of power, has also made firm promises to ensure that ongoing transformation in the sector and massive investments by governments and private sector entities are steered to develop the local supply chain and encourage manufacturing.

Everything was aimed at promotion of local content which requires a special funding pool to develop local capacity, skills acquisition, infrastructure development, facilities upgrade.

Stakeholders argued that the aim should focus on in-country value creation and that the policy must be a national agenda and championed from the top as part of overall national development program.

Other strategies according to industry operators should include inter-agency collaboration & synergies, the existence of fiscal incentives to attract and sustain investments, policy consistency and political will.

Reacting to the adoption of local content in the power sector, chairman/chief executive officer of MOMAS Electricity Meter Manufacturing Company Limited, Mr. Kola Balogun, said there is need for government to be more drastic in dealing with defaulters of local content in power sector.

Balogun, said government should jail those contravening the Local Content Act especially with regard to the supply of meters, adding that people need to be punished for disobeying the Local Content Act.

He added that it is when the violators of Local Content Act are punished that Nigerians will know the importance of creating the local content in power sector.

According to him, “There is need for us to create employment opportunities through the power sector. This sector can take many jobless people off the streets. So, until government insists on adherence to local content in power sector, we will not be able to go anywhere.

The roll out of the Oil and Gas E-Market Place project would be carried out in phases and is starting with the Nigerian LNG Limited

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