• Monday, March 04, 2024
businessday logo


NCDMB shares 5 opportunity areas in Nigeria’s oil sector

Nigerian content board ignites technical resurgence in Nigerian technical schools

Despite the declining fortunes of Nigeria’s oil and gas sector, which has seen its contribution to GDP fall behind real estate and agriculture, it offers opportunities for investors based on government reforms and the impact of the global oil market, the head of Nigeria’s local content board has said.

In a presentation at the fourth Nigerian Oil and Gas Opportunity Fair taking place in Bayelsa, on Thursday, Simbi Wabote, executive secretary of the Nigerian Content Development Monitoring Board (NCDMB), in the keynote address, said the five broad opportunity areas ripe for investor participation includes Policy Driven Opportunities, People Driven Opportunities, Fund Driven Opportunities, Infrastructure Driven Opportunities, and Situational Opportunities.

Some of these policies are the declaration of a Decade of Gas in 2021 by President Muhammadu Buhari to stimulate the development and utilisation of gas resources for increased domestic utilisation and export towards generating more revenue for the nation.

Other policies such as the automotive gas policy advocates for the use of CNG as an alternative fuel for vehicles which has further created opportunities in the supply and installation of conversion kits in vehicles to enable it use of CNG.

He said these policy initiatives have led to the creation of several businesses and a surge in local utilisation of gas. For example, the annual consumption of LPG increased from 360,000tonnes in 2015 to 1.4million tonnes in 2022.

However, half of the local LPG requirement is imported and the consumption level is still far below the 4 million tonnes consumption by the year 2025 as targeted by the National Gas Expansion Program (NGEP).

“These gaps in volumes and consumption spread present opportunities in local processing, storage depots, trucking, cylinders manufacturing, distribution pipelines, conversion kits, and many other opportunities,” he said.

Initiatives like the Nigerian Gas Flare Commercialisation Programme (NGFCP) aimed at capturing flared gas for local use, the Petroleum Industry Act (PIA) 2021, which seeks to overhaul the sector, African Continental Free Trade Area (AfCFTA), and the Nigerian Oil and Gas Industry Content Development Act provides an opportunity to investors.

Sections 3 and 12 of the NOGICD Act state that First Consideration shall be given to Nigerian goods and services by operators and their contractors in the implementation of their projects.

The NCDMB boss said expertise was required to take advantage of these policies. “The practice of Nigerian Content and the understanding of the regulatory requirements in the Nigerian oil and gas industry in general, require a professional touch. There are huge opportunities for individuals and businesses willing to develop the skill sets required to offer regulatory compliance support services to operators and service companies,” he said.

On financing opportunities, he said “We have introduced and widened the options for accessing interventions even further with our $300 million Nigerian Content Intervention Fund with BOI, our $50 million Nigerian Content R&D Fund, and our $50 million NOGaPS Manufacturing Fund.

“Over 70 companies have so far benefited from the intervention funds for asset acquisition, manufacturing, loan refinancing, and project financing.

“The forensic audit of remittances into the Nigerian Content Development Fund also opened up opportunities for 25 audit companies engaged to check the books of about 150 companies.

Apart from Nigerian Content Intervention Funding, he said other funds such as with the NDDC, NIMASA, BOI, African Development Bank (AFDB), NASENI and AFREXIM Bank are available for operators.

The NCDMB boss noted that Buhari’s focus on railways, roads, bridges, airports, defense, power, and solar energy parks provides opportunities not only in the development of these infrastructures but also in the subsequent maintenance which is very critical.

“I am delighted that some of the capacities and capabilities developed in the oil and gas industry have been deployed to deliver these infrastructures. I implore other service companies not to limit their focus only on opportunities within the oil and gas industry but extend it to other sectors of the economy,” he said.

He said the Nigerian Oil and Gas Park Scheme (NOGaPS) at Odukpani in Cross River state and the one at Emeyal-1 in Bayelsa state are both at advanced stages of completion.

The industrial parks provide opportunities in the areas of manufacturing, logistics, security, facilities management, training, catering services, occupational health services, and many others.

On the infrastructure-driven opportunities, he said “We have also commenced the front-end design of the Brass Island Shipyard Project.

“We see opportunities on the need to put in place a dockyard of sufficient size to handle repair and maintenance requirements of marine vessels of various sizes including container ships, oil tankers, and LNG carriers.

The Brass Island Shipyard project entails the development of a 310m graving dock, 650m fitting out quay for LNG carriers, oil tankers, and cargo ships of up to 150,000DWT (Deadweight Tonnage). In a year, the shipyard will enable in-country maintenance and repairs of seven LNG vessels or oil tankers, 21 container ships, 8 jack-ups, and 30 other vessels.

“The shipyard will further boost our national shipbuilding, maintenance, and servicing capacity thereby earning the much-needed revenue and foreign exchange for Nigeria, he said.

He envisaged that as the Lekki Deep Seaport becomes operational in addition to existing ports, Nigeria will witness more vessels coming into the nation and a facility like the Brass Island Shipyard will create a situation where the LNG tankers and other vessels can carry out maintenance and repairs here in Nigeria.

Wabote also said the global incidents and occurrences opportunities are more pronounced in regions that are experiencing one form of challenge or are the other.

“This situation can be better explained by the existential need of humans for energy which means that people, businesses, and governments will do whatever they have to do to get the energy they need.

This explains the situation where Germany had to restart their hitherto shut coal power plants when they experienced distortion in their supply of gas from Russia due to the Russia-Ukraine war.

“Closer home, the situation we found ourselves as regards the provision of energy in various forms to power economic activities provides huge opportunities.

These opportunities include industries switching from diesel to petrol, LPG, CNG, and electric power, the demand is huge, to improve operations and maintain profitability.

He also identified The Presidential Power Initiative with Siemens which provides a roadmap to ramp power to 25,000MW stable electricity, the Decade of Gas programme, Dangote Refinery, and some new oil and gas projects including the IKEKE field are opportunities in the sector.