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IPPG lament exist of oil service companies

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By Abdulwasiu Usman

Consistently assessing domestic policies effectiveness is crucial.

The Independent Petroleum Producers Group (IPPG), representing indigenous oil and gas producers, expressed concern about the growing number of major international oil service companies leaving Nigeria. These departures are attributed to the stringent local content regulations imposed by the country on its upstream petroleum sector. Overall expenses of project delivery in the country have risen due to the multiplication of local content levies. These levies include the Nigerian Content Development (NCD) levy, which requires participants to pay 1 percent of total project costs, and an additional 3 percent charge for projects costing over $1 million, specifically for the purpose of local content training.

Mr. Abdulrazaq Isa, the Chairman of IPPG and Group Chief Executive Officer of Waltersmith Group, made this known during the 12th Practical Nigerian Content (PNC) Forum in Yenagoa, Bayelsa State. In his speech titled Nigerian Local Content in Action, Isa emphasized the need for a re-evaluation of local content policies to bolster domestic investments and elevate Nigerian global competitiveness. During the event, with the theme “Deepening Nigerian Content Amidst Divestments, Domestication and Decarbonisation,” he stated that it is imperative to consistently assess the effectiveness of the country’s domestic policies to ensure they contribute positively to long-term industry expansion and financial objectives, rather than hindering them.

NCDMB urged to reassess the domestic content laws.

In light of the fierce competition from other lucrative investment spots, the Nigerian oil and gas industry encounters mounting challenges to maintain profitability and cost-effectiveness. In response to this, he called upon the Nigerian Content Development and Monitoring Board (NCDMB) to carefully reassess specific components of the domestic content laws that may hinder the global competitiveness of Nigeria’s oil and gas sector. The IPPG Chairman asserted that alongside the commitment to promoting local content development, Nigeria must acknowledge the crucial role international stakeholders play in facilitating technology transfer and sharing knowledge. These valuable contributions are essential for the growth and benefit of local players to adequately support our deep offshore operations.

According to him, players in the Nigerian oil and gas sector must steadily focus on efficiently and swiftly harnessing their abundant hydrocarbon resources to drive the country’s socio economic development. Consequently, it is crucial for the industry to prioritize efficiency and internal exploration in order to maximize the potential of these valuable resources. Mr. Simbi Wabote, former Executive Secretary of the NCDMB, stated that the 5000 barrels per day Waltersmith Refinery located in Imo State has yielded $500 million in dividends to the agency.

Relevant stakeholders encouraged to work with the board.

Wabote further disclosed that almost all of the 96 initiatives outlined in the NCDMB’s 10-year Strategic Roadmap had been successfully executed, assuring confidence with a resolute commitment to fully accomplish the plan in the foreseeable future. While speaking during the PNC Forum, he gave a speech pointing out the strong dedication of NCDMB management towards accomplishing essential goals. The Executive Secretary encouraged all relevant stakeholders to work together with the board to further strengthen local content in the nation.

Under the roadmap, the data from NOGIC-JQS indicates a notable rise in the number of registered industry operators from 53 in 2018 to 114 in 2023. The certification of Nigerian Content Plans witnessed an upward trajectory, rising from 178 in 2022 to 255 in 2023. However, the approved Nigerian Content (NC) Compliance Certificates experienced a decline, going down from 197 in 2022 to 168 in 2023. Wabote remains optimistic that the increased number of certified NC Plans in 2023 will swiftly lead to authorized contracts accompanied by NC Compliance Certificates, as the industry adapts to the new government’s policy making.

Capacity of in-country fabrication rises to 250,000 tons annually.

Also, in an endeavour to reduce the contracting timeline to a maximum of six months, the board recently executed a new Service Level Agreement (SLA-MOU) with industry operators and the Nigerian National Petroleum Company Limited (NNPC), he said. The Technical Capability Development pillar of the roadmap witnessed a substantial growth in Nigeria in-country fabrication capacity, escalating from 60,000 tons per year to an impressive 250,000 tons annually. He stated that significant progress was achieved in the recovery of outstanding statutory remittances into the Fund from the Third-party Forensic Audit of the NCDF Remittances, through the implementation of the Strategic Roadmap initiatives.


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AN-Toni
Editor
2 months ago

IPPG lament exist of oil service companies. – Consistently assessing domestic policies effectiveness is crucial. – Express your point of view.

Adeoye Adegoke
Member
2 months ago

I understand your concern about the existence of oil service companies and the need to consistently assess the effectiveness of domestic policies. It’s important to regularly evaluate policies to ensure they are achieving their intended goals and addressing the challenges faced by industries like oil services. By assessing the effectiveness of policies, we can identify areas for improvement and make necessary adjustments to support the growth and sustainability of these companies. It’s crucial to have a proactive approach in addressing the concerns and needs of the oil service sector to promote a thriving and resilient industry. Let’s hope that policymakers continue to prioritize the evaluation and enhancement of domestic policies to create a favorable environment for oil service companies and contribute to the overall economic development of Nigeria.

Taiwo
Member
2 months ago

Additionally, many seem to be complaining the loss of oil servicing providers. Addressing these problems and maintaining a healthy sector need regular evaluation of the efficacy of domestic policy.

Kazeem1
Member
2 months ago

Oil service firms are a source of regret for IPPG. It is essential to regularly evaluate the efficacy of domestic policy.the existence of oil service companies and the mandate to periodically assess the effectiveness of government initiatives. It is essential to regularly evaluate policies to ensure they are serving the intended aims and resolving issues that arise.