Sopuruchi Onwuka

Local productivity promoter in the Nigerian petroleum industry, The Nigerian Content Development and Monitoring Board (NCDMB) is working to build domestic capacity for production of facility components necessary for timely and efficient operations and maintenance activities in the industry.

According to the agency which has been adjudged to be the most efficiently run government agency in the country, routine and regular importation of facility and equipment parts, including the associated foreign exchange and sundry financial drains on the industry, will soon be displaced with local production.

In pursuit of the gaol, Executive Secretary, Engr Simbi Wabote, has declared that new policy directives on in-country manufacturing of pumps, flanges, valves, and other major equipment categories utilised in different streams of the oil and gas industry.

Engr. Wabote who received the report of the pan-industry committee on in-country manufacturing of pumps, valves, flanges, gaskets, bolts, and nuts explained that the measure has become urgent in order to retain the huge percentage of capital and operational expenditures associated with importation of such accessories.

He also announced that NCDMB would soon inaugurate a similar committee on local manufacturing of production chemicals, insisting that Nigerian companies should be able to manufacture production chemicals used in the oil industry. He noted that the country has the needed materials for production of industrial chemicals, considering that 70 percent of production chemicals is water.

He challenged Dangote and Indorama Petrochemical plants to extract production chemicals from their factories to use in the oil and gas industry.

The Oracle Today reports that the NCDMB had in July 2022 established the local manufacturing committee, and charged members who were drawn from the agency, international oil companies and indigenous players to come up with detailed study and recommendations on how the displaced imported light equipments with locally manufactured alternatives that meet global quality standards.

Chairman of the committee, Mr. Cyprian Ojum, whose team submitted its report at NCDMB’s liaison office in Abuja, listed eight major equipment categories regularly used  in various oil and gas operations 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 that the industry runs huge OPEX on daily production operations which, according to him, demand that these equipment categories are repaired or replaced where necessary. He noted that some of the items are sourced off the shelf, while some are designed for purpose; requiring long lead time to ship into the country.

The committee recommended that domiciling in-country manufacturing facilities for those components will greatly support operations, improve local content and the national economy.

He made it clear in-country manufacturing of the eight major equipment categories would contribute to achieving that NCDMB’s target of growing Nigerian Content performance to 70 percent by 2027 and the retention of $14 billion in the economy.

In producing the committee report, Ojum narrated 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 said their work covered 12,000 service companies in methodical approach ascertain the available capacity of every facility that laid claim to substantial manufacturing capacity in the described areas.

In receiving the report, Engr Wabote 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 NCDMB would study the report and implement the recommendations in the short, medium, and long term.

Engr 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.

“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, Engr Wabote 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.