Wednesday, April 20, 2011

Jonathan orders retention of $10b oil expenditure

By Adeola Yusuf CORRESPONDENT, Lagos

The much talk-about Petroleum Industry Bill (PIB) will be passed any moment from now as President Goodluck Jonathan declared at the weekend that all is set for it.

He also gave a 2013 deadline to the local content governing council to retain $10 billion investments in the oil and gas industry.

Nigeria has been losing $16 billion from an average annual Oil and Gas Industry expenditure of $20billion and Jonathan, who inaugurated the Governing Council of the Nigerian Content Development and Monitoring Board in Abuja expressed dismay that only $4 billion has over the years been retained in Nigeria’s economy.

Minister of Petroleum Resources, Diezani Alison-Madueke, also noted that effective implementation of the Act would ensure that the Nigerian economy will within the next four years retain over $10billion.

According to the President, all is set for the passage of the PIB by the National Assembly, which would restructure the regulatory framework of the Oil and Gas industry and introduce improved funding and commercial focus for the industry.

He directed members of the Governing Council to enforce strict compliance of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act and ensure that Nigerian Content counts in all operations of the Oil and Gas Industry.

The NCDMB, Jonathan said, should create access to funds by leveraging the reforms in the banking sector to design interventions that support local companies with low interests and long term loans.

He explained that the NOGICD Act he signed into law on April 22, 2010, which created NCDMB, with a professional Governing Council can propel Nigeria into becoming one of the world’s industrialised economies in the next decade.

According to him, “we must ensure that our implementation efforts do not fail.

We must be consistent and unwavering in order to transform our industry from an importer of goods and services to an industry that can source its key inputs from local resources; an industry that will generate manufacturing activities to support its operations and employment; an industry that will domicile significant proportions of its derivatives and trap commensurate revenue in Nigeria to develop the fabrication yards, shipyards and manufacturing plants to industrialise our economy.”

The expenditure in the industry, he ordered, must transcend returns in terms of revenue, but also translate to local capacity, increased technological growth, jobs for Nigerians, capacity to operate and maintain assets and develop critical facilities and infrastructure to support performance of work scopes in Nigeria.

He stressed that Nigeria needed to urgently address the issue of local capacity of the industry so as to take advantage of expected investments and guard against the repeat of past mistakes where most goods and services used in the industry were imported while facilities that were built in the country suffered from inadequate after sales service support.

Directing the Governing Council of NCDMB to develop partnerships between local and international companies, government and private sector, Jonathan added that the council should create linkage between sectors of the economy, local banks and global financing institutions to create the enabling environment for capacity building.

“There must be developments in our supply chain management, the integration of government programs such as SME programs, training programs by the PTDF, Industrial Training Fund, NOTAP, to build local capabilities across board and transfer the technological experience inherent in the oil and gas industry to other sectors like transportation construction, telecom, Power, Defence,” he said.

Alison-Madueke however added that successful implementation of the Act will create over 30,000 direct employment and training opportunities considering the scale of activities to be domiciled in Nigeria.

Other expected growth of the economy will also include the establishment of three to four new pipe mills to service the demands of the industry and other ancillary manufacturing plants for coatings, valves, fittings and components.

The minister also expressed hope that the industry will witness the development of one or two dockyards and increased utilization of existing shipyards for maintaining marine vessels operating in Nigeria which currently sail out for their maintenance and dry docking.

She said there will also be the “transformation of ownership profile of marine assets supporting industry activity from a current ratio of 20 Nigerian-owned as against 280 Foreign-owned vessels to a more equitable ratio of 180:120.”

The Minister also expressed hope that the NC Act will lead to the integration of indigenes and businesses residing in the Oil producing areas into the mainstream of industry economic activity.

The act will also help to capture of over 50 – 70 per cent of banking services, insurance risk placements, and legal services supporting industry activities and transactions, she said.

President Jonathan had earlier challenged Nigerians to face the challenge of participating in the Oil and Gas Industry.

He said, “We must change our mindset from the burden of thinking that our people cannot do great things, to embrace a new can-do spirit in pursuit of high quality and global standards of performance required in the oil and gas industry.

“We must embrace the same can-do spirit that has seen our Telecom and Banking sector reforms succeed; the same can-do spirit that will see us complete our Power sector and Electoral reform agenda successfully.”

He said his administration carefully selected members of the NCDMB Governing Council, whom he described as a highly professional team and had high expectation that they will succeed in ensuring that the intendments of the Nigerian Content Act come to fruition.

The Governing Council has a four-year tenure and is chaired by the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke.

Others members are Shawley Coker, representing Petroleum Technology Association of Nigeria, Mr. Emmanuel Bekee, representing the Technical Regulator of the industry and Dr J.T Dawha, representing Nigerian National Petroleum Corporation.

Others are Engr. A.O Ajibola, representing Council of Registered Engineers of Nigeria, Prof. Mike Onyekonwu, representing Nigerian Content Consultative Forum, Dr Sani Shuaibu representing the Ministry of Petroleum Resources, Mr. Fola Daniel, representing National Insurance Commission and Engr. Ernest Nwapa, the Executive Secretary of NCDMB and Secretary of the Governing Council.

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