The Federal Government is deepening the implementation of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act as part of measures to lower the country’s high crude oil production cost, according to the Minister of State for Petroleum Resources, Chief Timipre Sylva.

Sylva stated this during his first working visit to the Head Office of Nigerian Content Development and Monitoring Board (NCDMB) in Yenagoa, Bayelsa State, at the weekend.

Emphasizing that Government’s primary target in the sector is to significantly reduce the unit cost of producing per barrel of crude oil, Sylva stated that ”local contractors tend to be cheaper than expatriates and international contractors and that’s why we want to encourage Local Content and give more opportunities to local contractors. By extension we will reduce the cost of doing business in the oil and gas industry in Nigeria.

“Local Content is part of cost reduction strategy. That’s why I came here, to encourage more local participation in the activities of the industry.”

The Minister also lauded the NCDMB for epitomizing its mandate by using an indigenous contractor to develop its new headquarters. He described the edifice as world class and a clear demonstration of the capacity of Nigerians contractors. “Such superlative performance on projects would pave way for the engagement of other local contractors in the oil and gas and construction sectors,” he suggested.

”When you have seen one contractor perform this good, you are encouraged to patronize more local contractors.”

He expressed confidence that the new NCDMB structure will attract a flurry of oil industry activities to Bayelsa State. He noted that ”the problem we have had over the years was that the region where oil production takes place did not have proper structures to promote lots of events. That why you see oil and gas events going to Abuja and Lagos. But when you have a befitting facility here, going forward, there will be a lot of oil and gas related activity in the Niger Delta.”

The Minister commended the NCDMB for the numerous achievements it had recorded in the implementation of the NOGICD Act. He said, ”I am quite impressed with what they have done in a very short time of existence. The new headquarters building is a testament to that impressive performance and of course, you have the 10 mega watts independent power plant. It is a modular plant that can be increased up to 25 megawatts.”

In his remarks, the Executive Secretary of NCDMB, Engr. Simbi Kesiye Wabote confirmed that Local Content implementation lowers the cost of crude oil production, particularly in the long run. He listed other key elements that contribute to high crude oil production cost in Nigeria to include security and infrastructural challenges as well as protracted contracting cycle.

He affirmed that several Nigerian oil service companies had executed several projects at costs much lower than their international counterparts. He also clarified that countries like Brazil, Malaysia and Norway that had practiced Local Content in their oil sector for decades had long enjoyed significant cost reduction in their per barrel cost.

Wabote also explained that Local Content serves as an opportunity cost for the Federal Government to empower its citizens and get them involved in the activities of the oil and gas industry.

kolafolabi:
The amount of large qualities and quantities of crude oil our Country had produced, I expect us to be among the best top Countries in the world but it's other way round..

sylve11:
Just legalize bunking activities and local refineries. Well, even if you don't want to, with what you just said; illegal refineries will become legal. Abi nor be local content law you dey talk about?


the way government dey dribble us for this country.........

YorubaPrince:
Low cost but, high prices? Against Economics theories, abeg. Rubbish!

austin4real:
Make una go chop una oil, the news doesn’t kuku spell development for the nation... make dem sha Dey share the money for aso rock, the lord is there strength

Kanade21:


No..it doesn't work that way.

The top countries in the world are those who manufacture things the world needs, not oil producers. (And before you say it, Saudi Arabia and Qatar have very small populations and produce more oil than Nigeria...that's why they look good.).

Hotzone:
Nigeria na scam

Kanade21:


No..it doesn't work that way.

The top countries in the world are those who manufacture things the world needs, not oil producers. (And before you say it, Saudi Arabia and Qatar have very small populations and produce more oil than Nigeria...that's why they look good.).

kolafolabi:


I understand but don't you think bad governance contributed to Nigeria not being at the top irrespective of having such privileges

martowskin1:


I don't really think is because they are smaller, if u observe Saudi Arabia, they are gradually shifting from the so call oil.... Moving into tourism. The value of oil is depreciating. The world is gradually moving away from it.

Nigeria mid managed their golden time, Saudi Arabia have what to offer the world at the moment which they built from oil.

What did Nigeria achieve from oil, exactly nothing.

So our problem is not huge population but mismanagement

Kanade21:


Certainly....but whenever I hear people say 'We should be a top country'..what they mean is that we should be like Qatar, for example...because they are oil producers.

What people don't relaize is that Qatar produces nearly as much oil as we do...for a population of less than 3 million people. Nigeria has at least 160million people and counting. (A family of ten who earns N300000 per month would look poorer than a family of two on the same income)

Also, the truth is, most Nigerians think of development as 'a handout from government' (which is why progammes like Sure P and Npower are not really good economic wise). It isn't. Development for me is putting a lot of energy into developing our industrial capacity.

munex007:
The world is on the 4th industrial revolution with Digital economy and we are still struggling with the first state of Rostow's stage of growth.. We are stuck with this fast depleting Asset called oil..

Politics apart FG needs to start have a strategic plan to cater for the population that grows more than 50% yearly..


Our greatest resource is not oil but our MIND. We need to go back to the drawing board and have a complete overhauling of our constitution and system.

Kanade21:


Basically by increasing local content in the oil industry, the cost of extracting a barrel of oil would be reduced...which would lead to more revenue for Nigeria in the long run, particularly as oil prices are too low for us to make much profit.

Hotzone:
Nigeria na scam

YorubaPrince:


Sir, it's either you're not making sense or I'm not understanding you. I need more clarity, pls.

What do you mean by "Increasing local content in the oil would reduce the cost of extraction"?

Even if we reduce the costs of production (which I doubt since we don't refine our own oil), we don't control the global prices. How would that generate more revenue?

I just need better explanation perhaps, I could use this as a project for students in my next lecture.

Thanks