Investors in the oil and gas industry may soon heave a sigh of relief with respect to ease of doing business, as the Federal Government says it is set to review tariffs in the sector.
Government was not specific about areas where the tariffs would be reviewed but stated that it has concluded plans to extend fiscal incentives to all investors with oil and gas facilities close to rural oil producing communities.
Ibe Kachikwu , minister of State for Petroleum Resources and Group Managing Director, Nigerian National Petroleum Corporation (NNPC), who disclosed this at the Nigerian Content Forum on Tuesday in Houston, Texas, U.S.A, further said government is making efforts to harness the country’s hydrocarbon resources for industrialisation.
According to Kachikwu, government’s focus is no longer on revenue from crude oil exports, but to process locally to meet petrochemical, power, energy and domestic needs of Nigerians.
The minister’s statement came just as indigenous operators in the Nigerian oil and gas sector cried out over their inability to access the Nigerian Content Development Fund (NCDF) which has reached $600 million over the last three years.
He said government was determined to accelerate the implementation of the Nigerian Oil and Gas Park Scheme, to enable the country’s Small and Medium Enterprises focus on production and services, while infrastructure and facilities are are being developed to support domiciliation imperatives.
He further stated that the sites are being acquired in strategic locations and that physical development is expected to commence in earnest to meet the aspirations of the industry.
The minister, who was represented by Tunde Adelana, Director, Monitoring and Evaluation, Nigeria Content Development and Monitoring Board (NCDMB) in response to the complaints of indigenous operators, said that the fund’s operating model was currently being reviewed to enhance its accessibility to local service companies for their capacity enhancement activities.
“Government is determined to keep our populace productively engaged, as such, we are working on enforcing local content practice in other sectors, especially power, construction and information and communication technology. As you may be aware the National Assembly is currently in the process of amending our public procurement laws with stricter local content provisions.
“The cross sector synergy that will be created therein will expand market opportunities for oil equipment manufacturers that set up in Nigeria, beyond opportunities in the oil and gas sector.”
He said: “NCDF provides source of low interest fund for the execution of projects and capacity development interventions in the oil and gas industry.
“NCDF operating model is currently being reviewed to enhance its accessibility by local service companies for their capacity enhancement activities,” Kachikwu said.
He maintained that Nigeria content is now a key requirement in the conceptualisation of oil and gas projects and contracts, which is creating ample work scope to be domiciled within the economy.
He however noted that there is the lingering issue of contracting processes spanning between 36 to 48 months.
He therefore charged all agencies involved in the contracting process, such as NCDMB, NAPIMS and operating companies to work together and develop a common industry contracting procedure which will reduce the contracting processing time to six months.
He added that there is an ongoing procedure that will identify companies that have invested in the economy and categorise them for specific work scope in a way that will facilitate contract opportunities.
“These measures are intended to boost investor confidence and attract investment into the Nigerian economy,” Kachikwu added.
He said government is determined to engaged Nigerians in productive work by enforcing local content practice in other sector such as power, construction and telecommunications.
He urged Original Equipment Manufacturers of (OEMs) and multinationals to take advantage of the new thinking to set up hydrocarbon processing plants in Nigeria, stressing that the decision to invest in Nigeria will be rewarding.
He maintained that Nigeria content is now a key requirement in conceptualising oil and gas projects and contracts which is creating ample work scope to be domiciled within the Nigeria economy.
Olusola Bello
