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Business News of Wednesday, 28 September 2022

Source: guardian.ng

Nigeria retains $7b yearly oil sector industry spending, says Wabote

Simbi Wabote Simbi Wabote

Nigeria now retains $7 billion out of about $21 billion spending in the oil and gas industry in the country yearly, the Executive Secretary of Nigerian Content Development and Monitoring Board (NCDMB), Simbi Wabote, has said.

The NCDMB boss disclosed this while speaking on the 6th anniversary of his first appointment as the Executive Secretary of the Board. He explained that before the introduction of the Board in 2010, Nigeria’s industry capacity hovered around three per cent.

“The yearly spend before now in the industry was $21 billion year-on-year. So, today, we have clawed back $7 billion of industry spending into the country every year. A typical example is the Egina project. Egina which is almost $21 billion, majority of the fabrication was done in-country including topside integration, which was never done in Africa,” he said.

He added that the Board aimed to get $14 billion by 2027, saying: “The truth is, you cannot achieve 100 per cent Local Content. It is not possible because you also have to depend on a lot of countries in terms of intellectual property rights, and you cannot manufacture everything. So, the 30 per cent we are leaving is for what we get outside. What used to happen was that 95 per cent of everything was done outside this country.

“The $7 billion is not the foreign direct investment (FDI). It is different. What we have done is that we have retained that $7 billion in the country. What FDI in the oil and gas industry has attracted in that period is almost $60 billion. The retention is about $7 billion year-on-year in terms of the $21 billion that you spend in the industry. So, it’s important to differentiate these two things.”

The NCDMB chief further explained that while the seven ministerial regulations handed to the Board by the Minister of State for Petroleum Resources were not new, it was primarily meant to promote local content compliance and implementation.

“The regulations only try to address some of the lacunae that we saw within the NOGICD Act. An example of such a lacuna is the process of prosecution. If you look at the Act itself, it says that, upon conviction, the decision is to cancel the project or to fine the culprit as it were. But when you look at the word, ‘upon conviction’, which means you have to go through the court processes and that will take an eternity to get a conviction of any culprit who has breached the provisions of the Act. So what the regulation did was come up with administrative sanctions as a way of ameliorating the legal process to get a conviction. So most of the regulations are not new,” he stated.

Wabote hinted that bringing the insurance sector onboard in the oil and gas industry to play an active role in providing the desired insurance for the sector.

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