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| NCDMB Executive Secretary, Mr. Denzil Kentebe |
Nigerian Content scopes for new and ongoing oil and gas
projects will not be reduced because of the substantial drop in crude oil
prices, the Executive Secretary Nigerian
Content Development and Monitoring Board (NCDMB), Mr. Denzil Kentebe has
confirmed.
The Nigerian
Oil and Gas Industry Content Development (NOGICD) Act spelt out percentages
that must be achieved for every activity connected with operations in the
upstream sector of the Nigerian oil and gas industry and these benchmarks are
enforced by the Board on projects through various mechanisms.
Speaking
when he met with the Managing Director of Total Exploration and Production
Nigeria Limited, Mr. Nicolas Terraz in Abuja recently, the Executive Secretary
regretted the negative effect the fallen oil prices has had on the Nigerian oil
and gas industry, which included contracts being reviewed downwards, delays in
approving new contracts, drop in drilling campaigns and even attempts to
negotiate away Local Content in projects.
He however,
affirmed that the Board was convinced that there was no need to cut back on
Local Content requirements for projects.
Rejecting
the perception that Local Content increases cost of projects, Kentebe called
for “a holistic review of every contract scope and realistic and honest efforts
to adjust costs across the board.” He stressed that industry stakeholders “have
to look at the long term and realize that a strong and viable local supply
chain ultimately helps in reducing cost of projects while creating a local
conducive atmosphere for business to thrive.”
Speaking
further, the Executive Secretary underlined the close collaboration the Board
had enjoyed with international operating companies and other key stakeholders,
noting that it helped to institutionalize Local Content practice in the oil and
gas industry.
He stated
that Total E&P’s Egina project was the first deep water project to take off
under the Nigerian Content Act, adding that major breakthroughs were being
recorded on the project in terms of scope of work given to Nigerian companies
in engineering, fabrication, training, procurement of manufactured goods and
other areas.
According to
Kentebe, “a legacy project (Floating Production Storage and Offloading Topside
Integration Yard) is under construction. This facility will create thousands of
job opportunities, domicile major engineering, procurement and construction
(EPC) activities in-country and keep future FPSO integration scopes in
Nigeria.”
He confirmed
the Board’s commitment to ensure that all agreed Nigerian Content scopes on the
Egina project are fulfilled, charging Total E&P to work closely with the
Board and the EPC contractors in addressing all issues that may impact
schedule, quality or pricing on the project.
In his
remarks, the Managing Director of Total E&P stated that the company had
taken steps to cut costs in view of the fallen oil prices. Some of these
strategies according to Terraz include improving efficiency, eliminating waste,
reducing expatriate workforce and accelerating succession plans for Nigerian
understudies.
While
assuring that the company had no intention to downsize its workforce in Nigeria
and other locations, the Managing Director called for an industry effort to
reduce the long contracting cycle, which he believes contribute to the escalation
of project costs.
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