CRITICAL ROLES

Nigeria 2015 | ECONOMY | INTERVIEW

TBY talks to Eng. Ernest Nwapa, Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), on boosting the role of Nigerians in the oil and gas industry.

Eng. Ernest Nwapa
BIOGRAPHY
Eng. Ernest Nwapa has a degree in Civil Engineering from the University of Nigeria, Nsukka, and began his career in the Projects Engineering Division (PED) of the Nigerian National Petroleum Corporation (NNPC) in 1983. He has over 30 years of experience in Nigerian engineering projects, from design to supervision and project management. He was appointed Pioneer Nigerian Content Coordinator at NNPC in 2005 and rose to become the Group General Manager, Nigerian Content Division, NNPC in 2010. He is currently the Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB).

How can indigenous participation in the oil and gas industry be increased?

This is actually already happening. In the past, the extent of participation was limited, yet upon the implementation of the Local Content Act, more Nigerians have become participants. We now have many new areas of focus, and can measure the number of Nigerians working in the oil and gas industry. We can measure the number of man hours of engineering completed in Nigeria and the number of vessels maintained. More Nigerians are playing critical roles in the leadership of the industry. For example, all the major operating companies have a senior hierarchy of Nigerians, and many service companies have Nigerian CEOs. The expatriate management system is such that Nigerians have a say in who comes to work here. The board has to certify that we don't have a Nigerian suitable for a job before an expatriate can occupy that position. The number of loans that Nigerian banks are issuing is also growing. In short, we are confident of increasing the level of indigenous participation. Now, we have to get back to grassroots. Our focus is to translate what is being done by Nigerian companies to more directly and positively impact the Nigerian people.

In which way have you partnered with other governmental bodies to extend the benefits of the oil and gas industries to other sectors of the economy?

We want to create more synergy in what we are doing. We also want to reach out to other sectors of the economy and show them the progress that we have made by relying on the Nigerian local content policy. This works in two ways. First, they can benefit by applying the same principles to their own activities. Secondly, the oil and gas industry drives a large market. We are trying to convince other agencies that we can implement this same model to achieve economies of scale and gradually reduce price. Regarding funding, we believe that the Bank of Industry is experienced in supporting entrepreneurial activity, and we want to work with it to use our funds and its own to support SMEs that manufacture. Original equipment manufacturers (OEMs) are now required to manufacture certain components in Nigeria. Among the challenges will be how to fund these new ventures. It is important to give these new players adequate financial support. We want SMEs to show their potential to OEMs, which can subsequently create companies that supply SMEs with components produced in Nigeria. Meanwhile, the Presidential Task Force on Power is the driving force behind cooperation between government agencies and the private sector in the power sector.

Many indigenous companies are pursuing the same contracts. How do you see everyone getting a slice of the cake in the future?

Ultimately, we are talking about competition. Not everyone is going to get a slice of the cake, and that was part of my message in the beginning. Some companies will have to start doing other things. Before, everyone wanted to do business in pipes. If Shell wanted pipes, 50 companies would try to supply them; however, only one or two would actually succeed. We are trying to place an emphasis on manufacturing. We have four pipe mills in Nigeria. Shell would use a procurement system to buy pipes from four companies using specifications. Were we to do that in many locations, it would reduce the amount of people who are looking to supply services such as welding, roads, or equipment. Instead of having 50 contractors, there will be four supplying through their vendors. The other suppliers will be supplying these manufacturers, whereby a supply chain is built. The industry will be streamlined once we get companies that have assets and certain knowledge in the industry. And as we start moving along the trajectory, we are going to start seeing Nigerian companies that boast assets, knowledge, and specialization. Every participant in the industry must hold a Nigerian local content certificate. What we want to do for job creation is to expand the shop floors in Nigeria, where people can work 24/7 to supply products to the common market. The moment we create platforms on which people can innovate, we will be able to move away from a system in which everyone is pursuing the same contracts.