Executive Secretary, Nigerian Content Development and Monitoring Board (NCDMB), Engr. Simbi Kesiye Wabote with some members of the National Executive Committee and NCDMB Branch Executive of the Petroleum and Natural Gas Senior Staff Association (PENGASSAN) at the 2023 Energy and Labour Summit in Abuja.

The Nigerian oil and gas industry is poised for a boost in crude oil production, employment creation, and capital injection with the planned divestment of some assets by select international oil and gas companies and concomitant acquisition by Nigerian operating companies, the Executive Secretary, Nigerian Content Development and Monitoring Board (NCDMB), Engr. Simbi Kesiye Wabote said last Wednesday.

The Executive Secretary painted this picture while delivering the keynote address on Divestments in oil and gas: the challenges, the opportunities, and the implications to the industry in Nigeria at the 2023 Petroleum and Natural Gas Senior Staff Association (PENGASSAN) Energy and Labour Summit in Abuja.

Quoting the AfricaReport magazine, he stated that about 26 oil mining licenses have been divested or acquired by oil and gas companies in the Niger Delta Basin area of Nigeria in the past decade. Some of the divestments currently on the cards include the plan by Shell and ExxonMobil to sell oil and gas assets worth billions of dollars, in addition to Eni’s announcement in September of an agreement with Oando PLC for the sale of NAOC interests in six (6) onshore blocks and Okpai gas power plant in, Delta State.

He emphasised that divestments of oil assets are not necessarily negative, rather they present an avenue for the local capacities and capabilities that have been developed through local content implementation to be brought to bear in the upstream sector.

Wabote outlined several opportunities that would accrue from divestments, such as the injection of new capital, the rejuvenation of divested assets, and an increase in crude oil production through the investment in technologies by the acquiring firms.

Other direct benefits are the creation of direct and indirect employment opportunities by the indigenous companies and their service providers.

He reiterated that the divestments confirm that Nigerians and indigenous companies have come of age and have acquired the technical, managerial, and financial capabilities to play in the “big league”. He added that “the involvement of our financial institutions on the transactions represents means of efficient capital deployment and capacity building on loans syndication on an international scale. This is also applicable to legal services, insurance, government relations, employee relations, community liaison, and others.”

Aside from the opportunities, the NCDMB boss equally highlighted challenges encountered in the divestment exercises. These revolved around the time required to get necessary regulatory approvals as well as the substantial interests from various groups covering political, legal, communities, and labour. Among other challenges are the potential for the disruption of oil and gas production, job losses, as well as “access to latest technology especially if the new investors lack the technical expertise or have no support from original equipment manufacturers.” There are also issues around how “to manage legacy issues or liabilities related to the environment, communities, and other social commitments and pressure on new investors to recoup investments on time to offset loans and address other financial requirements.”

The NCDMB boss assured that the Board would continue to partner with industry stakeholders to institute regulations that would ensure that the increasing footprints and stakes of indigenous oil and gas production companies would not lead to a reduction in Nigerian content compliance. He promised that the Board would continue to partner with PENGASSAN to shape a future where Nigeria’s energy industry not only survives but thrives in the face of change.

(L-R): Dr. Stephen Ighomuaye, NDDC legal Services Director; Dr. Samuel Ogbuku, NDDC MD; Dr. Philip Mshelbila, NLNG’s MD/CEO; and Andrew Ohaneje, NLNG’s Assistant General Counsel, Technical Litigation & Regulatory Risk Management during the signing of an MoU between NLNG and NDDC at NLNG’s Corporate Head Office in Port Harcourt, Rivers State.

The Niger Delta Development Commission (NDDC) and Nigeria LNG Limited (NLNG) have signed a Memorandum of Understanding (MoU) to leverage shared aspirations and collaborate on diverse fronts in the delivery of sustainable development projects in the region.

At a brief signing ceremony at NLNG’s Corporate Head Office, the Managing Director and Chief Executive Officer of NLNG, Dr Philip Mshelbila, and NDDC’s Managing Director, Dr Samuel Ogbuku, signed the MoU in the presence of executives from both organisations. As part of the pact, the two organisations agreed to collaborate and partner to empower communities in the region, promote local content and capacity development, and work with stakeholders along the value chain to deliver sustainable development projects effectively.

Dr. Mshelbila, in his remarks, stated that through the partnership with NDDC, NLNG aspires to set a precedent for how such collaborations can drive positive change in the Niger Delta region. He said NLNG’s goal was to replicate the success of its projects and initiatives across the Niger Delta, working closely with NDDC to maximise the impact of collective efforts. He stated that the goal aligns with its vision of “helping to build a better Nigeria”.

“Today, we are proud to formalise our partnership with NDDC, an organisation empowered to deliver development projects in this vital region of our nation. At Nigeria LNG, our journey has always been guided by a commitment to seek strategic partners in sustainable development. This commitment is deeply rooted in our core values and principles, and it drives us to continuously explore innovative avenues to make a meaningful impact on the lives of those we serve. Our partnership with NDDC is evidence of this commitment.

“Our dedication to the sustainable development of our host communities in health, education, economic development, and infrastructural development remains unwavering. We understand that our success is linked to the well-being and prosperity of the communities in which we operate. Therefore, investing in projects and initiatives that empower these communities, promote social inclusion, and foster economic growth is an ethical responsibility.

“We believe that the highest standards of project execution and accountability are essential to achieving our sustainable development outcomes. We intend to share knowledge and build capacity with NDDC to make these outcomes feasible,” Dr. Mshelbila added.

In his remarks, NDDC’s Managing Director, Dr Ogbuku, stated that the pact demonstrated unity towards sustainable development and progress in Nigeria. He noted that the MoU heralds a new era of collaboration for the betterment of the Niger Delta region and the nation.

“While the NDDC and NLNG each have unique missions, their common goals emphasise sustainable development, socio-economic empowerment, local content promotion, capacity building, and stakeholder collaboration. This alliance represents a pivotal moment in Nigeria’s journey towards progress and prosperity. It is a testament to the power of unified action in addressing the complex challenges faced by the Niger Delta region and the nation. The NDDC and NLNG are poised to create a more prosperous, inclusive, and sustainable future for Nigeria and its people.

“NLNG is recognised as a significant player in the global LNG industry, committed to conducting its operations with environmental responsibility and contributing to monetising Nigeria’s invaluable natural resources. Similarly, the NDDC is committed to promoting sustainable development within the Niger Delta, focusing on the delicate balance between economic growth, environmental stewardship, and the well-being of local communities,” he stated.

According to Dr. Ogbuku, the NDDC is dedicated to uplifting the Niger Delta region through targeted initiatives to enhance livelihoods, education, healthcare, and socio-economic conditions. He said the organisation strongly emphasises empowering local communities through skills training, support for small and medium-sized enterprises, promoting self-sufficiency and building solid relationships with state governments, local communities, non-governmental organisations, and private enterprises to design and implement practical development projects within the Niger Delta region. He stated that the partnership with NLNG underscores a shared commitment to inclusive governance and comprehensive development.

As outlined in the MoU, the agreement will promote harmonious relationships between the two organisations as an enabler for achieving a common goal of facilitating the sustainable and continuous development of the Niger Delta region through investment in development projects that will maintain peace and security in the region. The MoU will also provide a framework for partnership between the organisations to maximise the impact of NLNG’s contributions to NDDC through effective delivery of development projects in the Niger Delta in an objective, judicious, transparent, sustainable, auditable manner and with due regards to accountability and global best practice.

(L-R) Busari Kamaru, representing the Permanent Secretary of the Federal Ministry of Petroleum Resources, Rt. Hon. Ekperikpe Ekpo, Minister of State for Petroleum Resources (Gas), Nnamdi Anowi, GM, Production, (NLNG), and Dr. Philip Mshelbila, MD/CEO of (NLNG), during a visit of the minister’s to NLNG’s Train 7 construction site on Bonny Island, Rivers State.

Nigeria must be deliberate in its desire to take opportunities offered by the energy transition, the recognition of gas as a transition fuel and the quest for clean energy to increase its gas investment and harvest the gains from gas, the Managing Director and Chief Executive Officer of Nigeria LNG Limited (NLNG), Dr. Philip Mshelbila, has said.

He said this during the visit of the Honourable Minister of State for Petroleum Resources (Gas), Rt. Hon. Ekperikpe Ekpo, to the NLNG plant on Bonny Island, Rivers State. The Minister was received by Dr. Mshelbila; Nnamdi Anowi, General Manager, Production; Andy Odeh, General Manager, External Relations and Sustainable Development and other management staff.

Briefing the Minister on NLNG’s operations and business, Dr. Mshelbila stressed the need to overcome the challenges within Nigeria’s energy sector. He stated that failure to address the root causes of these issues would perpetuate the country’s struggle with energy poverty and result in a significant loss of revenue from the monetisation of valuable resources. He stated further that a pivotal starting point for remedying these industry challenges lies in a concentrated effort on the gas sector.

“As we embark on the journey to complete Train 7, we are on the precipice of achieving a remarkable milestone – a capacity of 30 Million Tonnes Per Annum (MTPA). This accomplishment will not only position us as one of the largest single-site operations globally but potentially among the top three worldwide in terms of such capacity at a single site. It is an achievement that elevates Nigeria’s standing, placing us among the top six nations in this crucial industry.

“However, the world is evolving at an unprecedented pace, and recent events, such as the Russian/Ukraine conflict, have ushered in a wave of new developments in the LNG sector. This surge in activity underscores the robust demand for liquefied natural gas, a demand recognised by nations worldwide as integral to the global energy transition. Considering these dynamic changes, our position in the rankings is likely to shift rapidly, as other countries make substantial investments in LNG production. This is why we believe it is important for us to conclude Train 7 and begin to look beyond that for further expansion.

“Today, the biggest challenge we have, one that poses a threat not only to our existing operations but also to our expansion plans, is feed gas supply. Trains 1 to 6 currently operate at roughly half their potential capacity, a situation that has persisted for some time. The main issue behind the challenge is crude oil theft which affects associated gas supply. The plant is half-full, not because we don’t have the capacity but because the feed gas is not there. We have aspiration for Train 8 but we cannot progress that work because we have no line of sight as to where that gas will come from. We believe that the gas can only come from deep water gas but the terms for that must be addressed. At present, the Production Sharing Contracts (PSCs) that govern deep-water exploration do not offer commercially viable terms for producers.

“Our commitment to harnessing the immense potential of natural gas will not only restore Nigeria’s reputation as a major energy powerhouse but also propel us towards a cleaner, greener future. With innovation, collaboration by a wide array of stakeholders, including the government, and unwavering determination, we can shape the energy landscape of tomorrow, driving economic prosperity, creating jobs, and mitigating environmental challenges through gas,” he said.,” he said.

Responding to the briefing, Rt. Hon. Ekpo, said the Federal Government will continue to encourage engagements amongst stakeholders to resolve gas supply and security issues and restore plans to compete with peers in the world. He stated that NLNG stand as a leading light to the Nigeria’s quest to become an energy-efficient country where clean energy, including gas, is utilised.

He stated further that all hands must be on deck to stop the loss of revenue in the sector and missed opportunities, adding that the Federal Government is engaging with investors to tap into the huge gas reserves in Nigeria.

“The development of gas is something we should pursue vigorously. The present administration will do everything possible to address the issues. I am glad that the stakeholders in the sector, like NLNG, are not laid back. They are constantly seeking ways out of this issue. NLNG needs all the necessary encourage to expand. It is for the good of this country. We must be quick to make these gains in development for the benefit of our future generations,” he stated.

During the visit, the Minister took a tour of the Central Control Room (CCR), the plant complex and the Train 7 construction site.

NLNG is owned by four Shareholders, namely, the Nigerian National Petroleum Company Limited (49%), Shell Gas B.V.  (25.6%), TotalEnergies Gaz & Electricite Holdings (15%), and Eni International N.A. N. V. S.àr.l (10.4%).

The Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, has identified the effective implementation of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act 2010 as one of the key levers for actualising the Renewed Hope Agenda of President Bola Tinubu’s administration.

Speaking during his tour of NCDMB facilities and projects in Bayelsa State on Tuesday, the Minister revealed that the key mandates of the NCDMB, which are the promotion of in-country value addition in the oil and gas industry, incentivizing local manufacturing in the oil industry, development of human and material capacities and job creation are major pathways for meeting the key aspirations of the current administration.

He hailed the Executive Secretary and the management of the Board for a sterling performance, highlighting the creation of the Nigerian Content Intervention Fund (NCI Fund) as one of the Board’s most impactful initiatives. He noted that lack of access to affordable finance is one of the biggest challenges facing emerging players in the oil and gas sector, hinting that the NCI Fund which is administered by the Bank of Industry (BOI) will assist qualified oil and gas companies to access the capital they need to grow, build capacities, and create jobs.

Commenting after he toured the Nigerian Oil and Gas Park Scheme (NOGaPS) at Emeyal 1, in Ogbia Local Government Area of Bayelsa State, the Minister described the park project as a game changer in the nation’s drive to catalyze in-country manufacturing in the oil and gas and linkage sectors and job creation. He promised that the Federal Government would support the NCDMB in every possible way to achieve its core mandates.

According to him, “Mr. President will do whatever he can to ensure that we achieve a lot more than had been achieved in the past from Nigerian Content. We are happy that Nigerian Content has made very strategic investments geared towards creating jobs. We need to redouble the achievements of the Board. We hope that NCDMB will help Nigerians to play a lot more prominent role in the oil and gas industry.”

Referencing the ongoing plans by some international oil companies to divest from onshore and shallow waters and move to deep and ultra-offshore operations, Senator Lokpobiri pointed out that indigenous companies have been able to step in and fill the openings courtesy of the systematic empowerment by the Board over the years. “Nigerian companies are doing very well today, courtesy of the capacity-building strategies that were institutionalised by the NCDMB in the past years,” he asserted.

Lokpobiri further extolled the Board for constructing and maintaining the iconic 17-storey Nigerian Content Tower and the 1000-capacity NCDMB Conference Hall. He indicated that the aesthetics and ambiance of the facilities surpassed most locations across the world and called for the sustenance of the culture.

He said: “I commend the Board for the maintenance culture it has on its facilities. I want to see the edifice having the same look down the line. The challenge of infrastructural development is the maintenance. I will give all the support I can, so we have the edifice maintained for the benefit of all Nigerians.”

The Executive Secretary, NCDMB, Engr. Simbi Kesiye Wabote, gave the Minister a brief history of the Board, successive stages undergone, the strengths and accomplishments of the Board to date. On the NoGaPS project, the Executive Secretary mentioned that the Emeyal- 1 park would be commissioned in the first quarter of 2024. He attributed the slight delay in the execution schedule to the devastating flooding that hit several states in the second and third quarters of 2022.

Giving further updates on the project, Wabote announced that several manufacturing firms and other vendors had expressed interest in operating at the parks. He said the Board is currently screening the applicants to select serious firms for the Bayelsa and Cross River parks.

As part of the facility tour, the Minister and his entourage inspected the NCDMB Fire Station, Creche, the three-star NCDMB Conference Hotel under construction, the Nigeria Oil and Gas Park Scheme (NOGaPS) facility at Emeyal-1, the NCDMB gas power plant at Elebele, and the NCDMB Gas Hub at Polaku.

The ongoing and planned divestments of onshore assets by some international operating oil and gas companies (IOCs) and subsequent acquisition by Nigerian operating companies

must not be allowed to impact negatively on the level of compliance with the Nigerian Oil and Gas Industry Content Development (NOGICD) Act and remittance of tax revenues to the Federal Government, the Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Engr. Simbi Kesiye Wabote has admonished.

Speaking during the breakfast meeting he had with members of the Guild of Corporate Online Publishers (GOCOP) and editors of newspapers and directors of broadcast stations in Abuja, the Executive Secretary enthused that the planned sale of assets of Nigerian Agip Oil Company Ltd to Oando Plc and Seplat Plc’s planned acquisition of assets of Mobil Producing Unlimited (MPNU) would transform Oando and Seplat from midsized players into big-time oil and gas operating companies.

He corrected the impression that the international oil companies were exiting the country because of unfavourable conditions, hinting that the foreign firms were carrying out assets rationalization, whereby they leave the onshore and shallow waters and focus on deep offshore operations, where they retain a competitive advantage and contend with minimal human interferences.

He said the ongoing and other planned divestments are big accomplishments for Nigerian Content development, describing them as “bold statements that Nigerian indigenous operating companies have come of age and acquired the technical, managerial, and financial capabilities to play in the big league.”

He said: “We are proud that we have moved from near zero participation in the oil and gas sector to the point that our indigenous operators such as SEPLAT, AITEO, and others are now responsible for 15% of our oil production and 60% of our domestic gas supply.” With this planned acquisition, the share of local firms in crude oil production could reach 30 percent or more in a short while.”

The Local Content boss however warned that the ongoing transactions and future divestments from international companies to local producing firms could pose serious challenges to the country in terms of declining Nigerian content compliance and reduction in tax payments to the Government from the new owners and operators.

He based his position on the Board’s experience and records which showed that indigenous firms, especially the indigenous operating companies are serial violators of the Nigerian Content Act and other laws. According to him, “many indigenous companies feel entitled and assume they can get away with non-compliance. Some indigenous firms have also argued that they should be excluded from the implementation of the NOGICD Act since their primary investors are Nigerians.”

Comparing the attitude of the local firms to their international counterparts, the Executive Secretary stated that “in many instances, international operators try to comply with the Nigerian Content because it is in their DNA to obey laws or they have to show evidence of compliance to their home offices. The IOCs will do everything to comply with the provisions of the NOGICD Act. But the indigenous companies will do everything to circumvent the law.”

He emphasised that the provisions of the Nigerian Content cover all entities and all activities connected to the Nigerian oil and gas industry and no firm is exempted from compliance. He explained that the Nigerian economy would not develop without encouraging local content in key industries, catalyzing local production of goods and services retaining spend in the country, and conserving foreign exchange.”

On strategies that would compel the indigenous companies to comply, the Executive Secretary said the Board would continue to use existing regulations and guidelines as well as the provisions of the NOGICD Act to reign in non-compliant firms.

The Board is also partnering with relevant agencies, including the Economic and Financial Crimes Commission (EFCC) and industry stakeholders to ensure that the increasing footprints and stakes of indigenous production companies do not cause a reduction in Nigerian content compliance and remittance of taxes to the Government.

He charged the media to advocate for Nigerian Content compliance by all stakeholders of the industry and to challenge indigenous oil and gas operating companies to comply with the laws of the land, including the payment of accurate taxes on their operations.

He stated that the Board organised the breakfast meeting to update the media stakeholders about the Board’s programmes, build their competencies, enhance their professional effectiveness, and update them on the latest trends in their industry.

He described the media as a reliable stakeholder and promised the Board’s continuous support toward an enduring symbiotic relationship.

L-R: Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri and the Executive Secretary, Nigerian Content Development and Monitoring Board (NCDMB), Engr. Simbi Kesiye Wabote, inspecting civil work construction at the NCDMB Gas Hub at Polaku, Bayelsa State during the Minister’s tour of NCDMB facilities and projects in Bayelsa State on Tuesday.

Several gas-related industries are being developed at the Gas Hub.