Engr. Earnest Nwapa is the pioneer Executive Secretary of the Nigerian Content Development and Monitoring Board, NCDMB, since the enactment of the Nigerian content bill he has pursued its implementation with intense passion, and when a milestone was achieved by Nigerdock an indigenous company over the successful construction of the Abang and Itut well-head platforms for Exxonmobil in Nigeria an elated Engr Nwapa told BIZTELLERS that it is time for Nigeria to commence full FPSO integration in-country as the country has shown evidence of capability.
I know you must be very proud of this accomplishment; the concern now is FPSO Integration. What do you intend to do to ensure that happens with the next FPSO project?
I think we’ve already taken the very necessary steps, we’ve worked with the operators, we’ve worked with the facilities in Nigeria, and we’ve worked with the international companies that have yards where FPSO Integration has been done in the past and at least we have all come to the conclusion that there is no more excuse for not doing FPSO Integration in Nigeria. There is evidence that it can be done, there is evidence that some people have been working towards that for more than five years, there’s evidence that people have been trained to carry out things that look like the FPSO Integration we in the NCDMB have had to ask one or two operating companies to carry out studies to demonstrate how an FPSO can be brought into yards in Nigeria at least three yards have been studied and the conclusion is that FPSO Integration will be done, the very next one has to happen here, so our challenge is to make sure that it is carefully decided where this will happen because just doing it in Nigeria would create a minimum of 20,000 jobs. In minimum, it would create the kind of knowledge that we cannot get from ten different operations in one location. The knowledge you get from integrating an FPSO in Nigeria would be amazing. if you know the kind of stir that just putting a floater on marina caused, that floater that stayed in marina for a few weeks, school children now knew what a rig looks like. Even bankers who had been signing off on leasing rigs had never seen a rig before in an oil producing country, so if we have that big animal called an FPSO sitting inside the harbor of Lagos and Port Harcourt the impact, the interest, the signal it would send to the whole world would be that Nigeria has arrived in technology.
Therefore, since we can do it, we must insist on doing it. We have talked about concepts around cost, concepts around delay and inefficiencies, but you cannot improve in efficiency without doing, it is by doing it that we would now learn. So I think it is a major step that Mr. President himself has come to see for himself so that when the fight starts he would be the final referee when we begin to insist that things must be done in Nigeria up to that skill nobody can say it is not possible. We are happy that the president and three of his cabinet members including the Minister of petroleum were here and if you listen to discussions today everybody is proud to be a Nigerian.
Part of the feelers we have been getting from the industry, from some of the indigenous operators especially in the service sector is that there is disparity of price between the international companies and indigenous companies.
Has this been brought to your notice?, if it has; what are you doing about it because a lot of indigenous operators have actually complained about this anomaly. Then again, the Nigerian Content Act has been two years now. I would like to know, what is your assessment so far?
My assessment of the Nigerian Content Act comes first from what you guys here say to us. We know that the press in Nigeria is a free press, a very critical press. One thing that keeps me going everyday is that I open the newspapers and I do not see very negative things about Nigerian content. What gives me joy is that the press reaches out to us and asks us the probing questions you’re asking us and we are able to explain it. The performance of the Nigeria Content should not be measured by a number; it should be measured by the number of yards we have. By the number of engineering companies that we know that are doing things, by the number of marine vessels that are moving from foreign hands to indigenous hands and therefore keeping money in the Nigerian economy that used to be thrown to the foreign owners of the business.
It is a measure of how many pipe mills we have now and how many we are seeing in the pipeline coming to fruition. It is a measure of how many Nigerians are being employed and trained in the industry. So we are now capturing such data, data that you can touch and feel. And as we always say, if Nigerian content is working, the people themselves would be the ones talking about it.
I can tell you, the number of serious partnerships that are going on here in Nigeria; we don’t even know ourselves but every day I run into people who tell me that because of the way Nigerian Content is being implemented in Nigeria, people from abroad are making more and more enquiries. Just yesterday we were meeting with some Greek people; they said they had something on the drawing board for a long time but their foreign partners have come to bring them that we must come and do this in Nigeria because this is the right time. The regulatory environment is clear to everybody, so these are soft achievements that when you now capture all of these and you now say it’s 30 per cent, 40 per cent, 50 per cent people can relate with, so we’re trying to start first from that side of tangible things that we can show before we go to the issue of theoretical index numbers.
Could you please respond to the question on price disparity? If the international company is bidding for a job, their prices are usually very high compare to that of the indigenous companies and the IOC’s awarding the contract seems to be aware and ok with this?
I can tell you that that cannot happen; there are a lot of things that people complain about, however, what you can say, and that is something we are addressing, is that there may be a disparity in the way they have put a fee structure for certain professionals and when you say somebody is a local hand and an expatriate hand and that is all related to the number of years of experience and when we don’t have that clear issues, we begin to deal with that, if you say that a lead engineer must have 15 years experience, Nigerians only started doing engineering design in the oil and gas industry about five or six years ago so you may never have a Nigerian who will be a lead engineer. So these are the things that we must leave with for some time and we are trying to restructure that arrangement so that it is not just years of service but competence, but it takes time. You would get to that point when you would have more work being done in Nigeria then you’d have more engineers, then you’d begin to look at the field and say okay, you’re already doing this; you must restructure how you price Nigerian labour.
Going forward, having passed through initial challenges as expected, what in the next 2 years as a regulator are you going to do to realise your set objectives?
As we sit here in Nigeria, we are sitting on prospects in the oil and gas sector, beyond the oil and gas we are sitting on major infrastructural programs for gas, power, rail, telecommunication and even agriculture. So our view is that if you put in all the work that the oil and gas industry will do you will only be taking thirty percent of the potentials in Nigeria.
By doing what we are doing successfully, we are already seeing all the sectors in the Nigerian economy trying to latch onto the Nigerian Content philosophy. You can understand that anybody who can build that platform can build telecom masts of any complexity even the power pylons (that are used to cross high tension cables across the country) can now be manufactured in Nigeria; we do not need to import them anymore because the technology is now here.
We do not see ourselves as regulators in that sense. Nigerian Content Development, “development” is the key word there. The development part of it is not to be running after people, it is meant to bring people together and build things, build capacity, concession, innovation, technology and the monitoring part of it is after you have built so it is not a standalone.
We want to see in the next two years three to four pipe mills. I will be happy if I am around to bring the president to another pipe mill and say to him this pipe mill is going to supply gas between Calabar and Kano. This marine location is where we are going to dry dock. We do not take our LNG tankers from Nigeria to Cameroun to fix a rudder those things can be done once we have support of the industry. Serious people who plan to use LNG tankers that as you are building your LNG fleet, you must have a dry dock as you saw how we drove to the dry dock in the yard here. All we need is a bigger one and the revenue we take out of this country to do all our marine vessels outside will just come in here. Today, Nigerdock is overfull like a lady who was in the bus with us said that she tried to move her marine vessels here but Nigerdock cannot take them until the next three months because the yard is full. That means there is market for it she took it to Ghana. We are looking forward to have all these places here and once they are there it does not matter if it is for the oil and gas sector or not.
The vessel that brings cement into the country can just stop by in Lagos or Port Harcourt and do some work in its stock and then move. What we are doing in the oil and gas industry is to use this consistency and organization in oil and gas industry to sell these facilities. So for me that is my aspiration.
Let me say you have an onerous task and I am aware that you have issues with funding which makes me wonder how you have been able to cope and it makes me ask why you have not been getting what you are supposed to be getting statutorily?
It happens always like that in a new organization. The people whose task it is to appropriate funds have not yet come to terms fully with the fact that this new organization is supposed to do so much but where there are scarce resources we have to look at the way of apportioning this whole thing. It is our responsibility in the board to continue to make a case. We need more money from appropriation to run the organization that has been given so many responsibilities. The Minister of Petroleum Resource is taking up the case.
Has it been affecting your efficiency and ability to deliver?
Well, it has affected our efficiency in terms of growth. In fact, we are meeting the challenges but at great personnel and corporate strain it will be better if we are normally funded. We have made the case and we believe it will be looked into between the National Assembly and the executive something must give. However, we also have a one percent fund, a lot of people think that it is the fund we use to operate but it is to help build the service industry and the supply chain in Nigeria and that is the program we are running. We believe that our task is more important in focusing on helping these people who strengthen this supply chain to take root on this and on that basis we believe that we will have our gain.