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Board Sets 70% Local Content Target to Retain $14b

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Nigeria's Inflation Rate - Investors King
  • Board Sets 70% Local Content Target to Retain $14b

The Nigerian Content Development and Monitoring Board (NCDMB) has set an ambitious target of 70 per cent growth in local content over the next 10 years. This will enable the country to retain $14 billion from the $20 billion spent yearly in the upstream oil and gas industry.

When the Nigerian Content Law was enacted in 2010, local content in the industry was only five per cent but at the moment it stands at 26 per cent while what is retained in-country from the $20 billion spent yearly is $5 billion.

NCDMB Executive Secretary, Simbi Wabote, said in Lagos during on the sideline of the presentation of the upgraded Nigerian Oil and Gas Industry Content Joint Qualification System (NOGIC JQS), titled: Optimising the JQS functionalities for case of doing business with the board to industry stakeholders that the upgrade was meant to enhance the achievement of the set targets, adding that the targets are achievable.

With the robust NOGIC JQS, the NOGIC JQS portal would capture industry capacity, adequate categorisation, training, employment and expatriate quota management data.

Wabote said: “The NOGIC JQS portal will be sole system for Nigerian Content registration and prequalification of contractors in the industry after verification of contractors’ capacities and capabilities.

“It will ensure tender and expatriate quota management, proper record of issued Nigerian Content Equipment Certificate (NCEC), marine vessels categorisation, skills data bank.”

He added that indigenous and international oil companies (IOCs) will be compelled to make statutory submissions on it.

On the benefits of the upgraded NOGIC JQS, Wabote said on assumption of office, carrying out daily activities were cumbersome due to huge paper works. He said with the upgraded portal, the activities will be done electronically and will substantially reduce turnaround time, enhance internal efficiency and ensure transparency.

“It is in tandem with Federal Government’s Executive Order on Ease-of-doing Business and the 7Big Win, which are to boost transparency and stakeholder management, as well as government’s Economic Recovery Growth Plan (ERGP). It will also foster better institutional collaboration,” he said.

Wabote highlighted some of the achievements of the Board between 2010 and 2017 to include registration of 6800 service companies in the Board’s database, registration of 75,000 people on NOGIC JQS, receipt of 12,000 expatriate applications, and biometric capture of 3600 expatriates. Others are record of 2800 marine vessels, registration of 40 operating firms, issuance of 1200 Nigerian Content Equipment Certificate and registration of 550 marine vendors.

He said the workshop on the new JQS portal functionalities was meant to sensitise the industry and general public about the upgraded NOGIC JQS platform but with special focus on super-users and industry relevant stakeholders such as members of Petroleum Technology Association of Nigeria (PETAN), Oil Producers Trade Section (OPTS), Manufacturers Association of Nigeria (MAN), Nigerian Content Consultative Forum (NCCF) and Oil and Gas Trainers Association of Nigeria (OGTAN).

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Crude Oil

Sirius Petroleum and Baker Hughes Collaborate on OML 65 Drilling in Nigeria

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Sirius Petroleum, the Africa-focused oil and gas production and development company, has signed a memorandum of understanding with Baker Hughes. The MoU names Baker Hughes as the approved service provider for Phase 1 of the Approved Work Program (AWP) of the OML 65 permit, a large onshore block in the western Niger Delta, Nigeria. Baker Hughes will provide a range of drilling and related services at a mutually agreed upon pricing structure to deliver the initial nine-well program.

Sirius has signed various legal agreements with COPDC, a Nigerian joint venture, to implement this program. COPDC has signed a Financial and Technical Services Agreement (FTSA) with the Nigerian Petroleum Development Company (NPDC) for the development and production of petroleum reserves and resources on OML 65. The FTSA includes an AWP which provides for development in three phases of the block. and Sirius has entered into an agreement with the joint venture to provide financing and technical services for the execution of the PTA.

The joint venture will initially focus on the redevelopment of the Abura field, involving the drilling and completion of up to nine development wells, intended to produce the remaining 2P reserves of 16.2 Mbbl, as certified by Gaffney Cline and Associates (GCA) in a CPR dated June 2021.

Commenting, Toks Azeez, Sales & Commercial Executive of Baker Hughes, said: “We are extremely happy to have been selected for this project with Sirius and their JV partners. This project represents an important step towards providing our world-class integrated well-service solutions in one of the most prolific fields in the Niger Delta. Baker Hughes’ technological efficiency and execution excellence will help Sirius improve its profitability and competitiveness in the energy market.”

Bobo Kuti, CEO of Sirius, commented: “We are delighted to have secured the services of one of the world’s leading energy technology companies to work with our joint venture team to deliver the approved work program on the block. OML 65. We look forward to building a long and mutually beneficial partnership with Baker Hughes.”

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Energy

Egbin Decries N388B NBET Debt, Idle Capacity

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Egbin-Power-Plant - Investors King

Egbin Power Plc, the biggest power station in Nigeria, has said it is owed N388bn by the Nigerian Bulk Electricity Trading Plc for electricity generated and fed into the national grid.

The company disclosed this on Tuesday during an oversight visit by the Senate Committee on Privatisation, led by its Chairman, Senator Theodore Orji, to the power station, located in Ikorodu, Lagos.

The government-owned NBET buys electricity in bulk from generation companies through Power Purchase Agreements and sells it to the distribution companies, which then supply it to the consumers.

The Group Managing Director, Sahara Power Group, Mr. Kola Adesina, told the lawmakers that the total amount owed to Egbin by NBET included money for actual energy wheeled out, interest for late payments and available capacity payments.

Egbin is one of the operating entities of Sahara Power Group, which is an affiliate of Sahara Group. The plant has an installed capacity of 1,320MW consisting of six turbines of 220 megawatts each.

The company said from 2020 till date, the plant had been unable to utilize 175MW of its available capacity due to gas and transmission constraints.

Adesina said, “At the time when we took over this asset, we were generating averagely 400MW of electricity; today, we are averaging about 800MW. At a point in time, we went as high as 1,100MW. Invariably, this is an asset of strategic importance to Nigeria.

“The plant needs to be nurtured and maintained. If you don’t give this plant gas, there won’t be electricity. Gas is not within our control.

“Our availability is limited to the regularity of gas that we receive. The more irregular the gas supply, the less likely there will be electricity.”

He noted that if the power generated at the station was not evacuated by the Transmission Company of Nigeria, it would be useless.

Adesina said, “Unfortunately, as of today, technology has not allowed the power of this size to be stored; so, we can’t keep it anywhere.

“So, invariably, we will have to switch off the plant, and when we switch off the plant, we have to pay our workers irrespective of whether there is gas or transmission.

“Sadly, the plant is aging. So, this plant requires more nurturing and maintenance for it to remain readily available for Nigerians.

“Now, where you have exchange rate move from N157/$1 during acquisition in 2013 to N502-N505/$1 in 2021, and the revenue profile is not in any way commensurate to that significant change, then we have a very serious problem.”

He said at the meeting of the Association of Power Generation Companies on Monday, members raised concern about the debts owed to them.

He added, “All the owners were there, and the concern that was expressed was that this money that is being owed, when are we going to get paid?

“The longer it takes us to be paid, the more detrimental to the health and wellbeing our machines and more importantly, to our staff.”

Adesina lamented that the country’s power generation had been hovering around 4,000MW in recent years.

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Crude Oil

Oil Rises on U.S. Fuel Drawdowns Despite Surging Coronavirus Cases

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U.S. Crude Oil - Investors King

Oil prices climbed on Wednesday after industry data showed U.S. crude and product inventories fell more sharply than expected last week, reinforcing expectations that demand will outstrip supply growth even amid a surge in Covid-19 cases.

U.S. West Texas Intermediate (WTI) crude futures rose 48 cents, or 0.7%, to $72.13 a barrel, reversing Tuesday’s 0.4% decline.

Brent crude futures rose 34 cents, or 0.5%, to $74.82 a barrel, after shedding 2 cents on Tuesday in the first decline in six days.

Data from the American Petroleum Institute industry group showed U.S. crude stocks fell by 4.7 million barrels for the week ended July 23, gasoline inventories dropped by 6.2 million barrels and distillate stocks were down 1.9 million barrels, according to two market sources, who spoke on condition of anonymity.

That compared with analysts’ expectations for a 2.9 million fall in crude stocks, following a surprise rise in crude inventories the previous week in what was the first increase since May.

Traders are awaiting data from the U.S. Energy Information Administration (EIA) on Wednesday to confirm the drop in stocks.

“Most energy traders were unfazed by last week’s build, so expectations should be high for the EIA crude oil inventory data to confirm inventories resumed their declining trend,” OANDA analyst Edward Moya said in a research note.

On gasoline stocks, analysts had expected a 900,000 barrel decline drop in the week to July 23.

“The U.S. is still in peak driving season and everyone is trying to make the most of this summer,” Moya said.

Fuel demand expectations are undented by soaring cases of the highly infectious delta variant of the coronavirus in the United States, where the seven-day average for new cases has risen to 57,126. That is about a quarter of the pandemic peak.

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