OPTS participated in the Nigeria Oil and Gas Opportunity Fair (NOGOF) 2021, organized by Nigerian Content Development and Monitoring Board (NCDMB) which took place virtually on the 25th and 26th of May 2021. .
DAY 1 – “How has the pandemic affected NCDMB’s 10-year strategic roadmap to achieve 70% local content by 2027”.
The OPTS Chairman, Mike Sangster was ably represented by the Executive Director (ED), OPTS, Mr. Bunmi Toyobo on the 25th of May. During the session, the ED, OPTS remarked that since the inception of NCDMB in 2010, OPTS has been a very strong partner and ally in growing local content capacity in Nigeria. Speaking on the Impact of the COVID-19 pandemic on the oil & gas industry in Nigeria, he said the pandemic presented several challenges to the oil and gas industry such as supply chain disruptions. However, the in-country capacity built over the years, helped to sustain Nigeria’s Oil and Gas operations. He noted that the NCDMB’s 10-year strategic roadmap’s 1st Strategic pillar – to extend and deepen in-country technical capability in the oil and gas industry – yielded benefits despite the pandemic.
Bunmi opined that with the commercialization of NNPC as proposed in the PIB, funding for upstream projects may no longer be a challenge and as a result budget costs, which bring about reduction in contracts, will no longer be a problem. He added that the ongoing oil and gas reform and the associated fiscal terms need to be sufficiently attractive to support additional investments which would increase local content participation.
Mr Toyobo remarked that it was important to ensure that the proposed amendment to the NOGICD Act is such that investor confidence will be maintained and should not further financially burden the oil and gas industry as it is already inundated with a plethora of taxes, fees and levies.
Furthermore, he said it was important to also focus on the other issues affecting the growth of Nigeria’s oil and gas industry to ensure it is competitive in the face of scarcity of globally investable funds and the drive towards energy transition. He concluded that the resolution of these issues would ensure a steady flow of projects and contracts which would help to deepen local content capacity and capability development
DAY 2 – “Leveraging Exploration & Production for Manufacturing Development in Nigeria”
During this session on the 26th of May, 2021, the OPTS Chairman, Mike Sangster spoke about the O&G sector as a catalyst for the growth of the manufacturing industry and diversification of the economy adding that the last wave of deep water investment decisions between 2000-2014 greatly supported the growth of the manufacturing sector in Nigeria. Mike mentioned that while a number of countries like Trinidad and Tobago and Egypt had successfully leveraged their O&G industry to grow their manufacturing sector, there are issues around natural gas supply which are currently constraining access to power and holding back the development of the manufacturing industry in Nigeria.
Mike explained that the Niger Delta, where the bulk of proven gas reserves lies, has far less gas infrastructure than comparable basins across the world and the existing infrastructure is prone to sabotage. He said that the PIB presents a unique opportunity for Nigeria to improve the sector’s competitiveness and stimulate exploration activity by enabling globally competitive terms that protect existing investments and unlock new opportunities, limiting the plethora of taxes, fees, and levies, NNPC funding their own share in the JV and addressing the unnecessary high cost of regulation to the industry. He concluded that one important driver of this was the long cycle times for contract approvals in Nigeria which could be improved by strict adherence to Joint Operating Agreement (JOA) provisions on contract approvals and timing.
