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Implementation Of Nigerian Content’ll Bring Jobs – NCDNMB Scribe

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The Nigerian Content Development and Monitoring Board (NCDMB) said on Thursday that the implementation of the Nigerian Oil and Gas Industry Content Development (NOGIC) Act was geared to bring Nigerian jobs back home.

The Executive Secretary of the NCDMB, Mr Ernest Nwapa stated this at the ongoing 2012 Nigerian Oil and Gas (NOG) conference in Abuja.

He said the board would ensure that all technology required to develop the local content was deployed to the country to create greater opportunities for Nigerians.

Nwapa said the emphasis of the Federal Government with the implementation of the Act was not only to retain the bulk of the annual oil and gas industry spend in the country, but ultimately to create employment for millions of Nigerians on the back of oil and gas industry operations.

He noted that most countries around the world were currently working towards bringing back jobs for their nationals in the wake of the global economic crisis.

The NCDMB executive secretary said that this agenda of the Federal Government should be supported by all stakeholders, conceding that keeping the cost of production reasonable and meeting work schedules were critical to national revenue.

He said that given Nigeria’s population of over 150 million, the oil and gas industry, which is the main stay of the economy, needed to pay special attention to job creation.

Nwapa explained that NNPC and the operating Joint Ventures could not employ more than 25,000 persons, adding that several thousands of Nigerians would be employed if operating companies put jobs in the yards of local service companies and encouraged their traditional service providers to build facilities in Nigeria to execute their contracts locally.

Nwapa regretted that the preference for importing almost all the goods and services used by the industry from abroad was steadily eliminating opportunities to develop human and infrastructural capacity, consequently impoverishing our people and stultifying national economic development.

“Each major offshore production facility awarded to be fabricated in the traditional Asian fabrication yard translates to the export of over $1 billion dollar capital from the Nigerian economy.

“About 5,000 Nigerian jobs in the two-year engineering and fabrication period and opportunity to train several thousand other Nigerians within same time frame.

“Such decisions also result in lost opportunity to upgrade existing yards and build new ones, crippled opportunity to attract investment for facilities and lost opportunities to grow partnerships between local and foreign companies,’’ he stressed.

Nwapa demanded that such practices must stop, adding that compliance with provisions of the Act called for a drastic change in the way the industry has been run for decades to achieve government’s aspirations.

He maintained that foreign and local investors would not be encouraged to establish facilities in Nigeria with a view to bridging capacity gaps until they were convinced that existing facilities were being patronised by the industry.

He said the board would ensure that all components and equipment used in the oil and gas industry were manufactured in Nigeria, stressing that it was the only way to develop the country’s local content.

The Executive Secretary said the board would also ensure that the Original Equipment Manufacturer (OEM) products or components met the Industry guideline mandates, while all OEMs would domicile the manufacture of equipment components, parts, packages and systems in Nigeria.

“We have issued the Nigerian Content Equipment Certificate (NCEC) to companies that have met the requirements.

“While about 52 applications are being processed, a guideline has been issued to the industry making NCEC a requirement in tenders.’’

Nwapa said that over 6,000 candidates were captured on Joint Qualification System (JQS) Platform while another 500 candidates were attached to O & G Projects.

He also hinted that the board has embarked on the Nigerian Oil and Gas Employment and Training Tracking System (NOGETTS).

According to him, the NCDMB model implies that equipment imported should stand at five per cent while Nigerian owned and done in Nigeria will be 100 per cent.

In another development,  the Executive Secretary, Petroleum Technology Development Fund (PTDF) Mr Muttaqha Darma, said the agency has also improved tremendously on capacity development.

“We anticipated training about 10,000 graduates in the next five years but presently we have produced up to 6,000 which indicates gross improvement.

“Our objective is to train Nigerians to qualify as graduates, professionals, technicians and craftsmen in the field of engineering, geology, science and management in the oil and gas industry in Nigeria or abroad.

Darma said that under the human capacity development programme, the fund has established ICT projects in all 102 unity schools in Nigeria and dozens of tertiary institutions.

“ Our mission is to serve not only as a vessel for the development of indigenous manpower and technology transfer and acquisition in the petroleum industry to make Nigeria a human resource centre for the West African sub-region.’’

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FG Woos IOCs On Energy Growth

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The Federal Government has expressed optimism in attracting more investments by International Oil Companies (IOCs) into Nigeria to foster growth and sustainability in the energy sector.
This is as some IOCs, particularly Shell and TotalEnergies, had announced plans to divest some of their assets from the country.
Recall that Shell in January, 2024 had said it would sell the Shell Petroleum Development Company of Nigeria Limited (SPDC) to Renaissance.
According to the Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, increasing investments by IOCs as well as boosting crude production to enhancing Nigeria’s position as a leading player in the global energy market, are the key objectives of the Government.
Lokpobiri emphasized the Ministry’s willingness to collaborate with State Governments, particularly Bayelsa State, in advancing energy sector transformation efforts.
The Minister, who stressed the importance of cooperation in achieving shared goals said, “we are open to partnerships with Bayelsa State Government for mutual progress”.
In response to Governor Douye Diri’s appeal for Ministry intervention in restoring the Atala Oil Field belonging to Bayelsa State, the Minister assured prompt attention to the matter.
He said, “We will look into the issue promptly and ensure fairness and equity in addressing state concerns”.
Lokpobiri explained that the Bayelsa State Governor, Douyi Diri’s visit reaffirmed the commitment of both the Federal and State Government’s readiness to work together towards a sustainable, inclusive, and prosperous energy future for Nigeria.
While speaking, Governor Diri commended the Minister for his remarkable performance in revitalisng the nation’s energy sector.

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Your Investment Is Safe, FG Tells Investors In Gas

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The Federal Government has assured investors in the nation’s gas sector of the security and safety of their investments.
Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo,  gave the assurance while hosting top officials of Shanghai Huayi Energy Chemical Company Group of China (HUAYI) and China Road and Bridge Corporation, who are strategic investors in Brass Methanol and Gas Hub Project in Bayelsa State.
The Minister in a statement stressed that Nigeria was open for investments and investors, insisting that present and prospective foreign investors have no need to entertain fear on the safety of their investment.
Describing the Brass project as one critical project of the President Bola Tinubu-led administration, Ekpo said.
“The Federal Government is committed to developing Nigeria’s gas reserves through projects such as the Brass Methanol project, which presents an opportunity for the diversification of Nigeria’s economy.
“It is for this and other reasons that the project has been accorded the significant concessions (or support) that it enjoys from the government.
“Let me, therefore, assure you of the strong commitment of our government to the security and safety of yours and other investments as we have continually done for similar Chinese investments in Nigeria through the years”, he added.
Ekpo further tasked investors and contractors working on the project to double their efforts, saying, “I want to see this project running for the good of Nigeria and its investors”.
Earlier in his speech, Leader of the Chinese delegation, Mr Zheng Bi Jun, said the visit to the country was to carry out feasibility studies for investments in methanol projects.
On his part, the Managing Director of Brass Fertiliser and Petrochemical Ltd, Mr Ben Okoye, expressed optimism in partnering with genuine investors on the project.

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Oil Prices Record Second Monthly Gain

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Crude oil prices recently logged their second monthly gain in a row as OPEC+ extended their supply curb deal until the end of Q2 2024.
The gains have been considerable, with WTI adding about $7 per barrel over the month of February.
Yet a lot of analysts remain bearish about the commodity’s prospects. In fact, they believe that there is enough oil supply globally to keep Brent around $81 this year and WTI at some $76.50, according to a Reuters poll.
Yet, like last year in U.S. shale showed, there is always the possibility of a major surprise.
According to the respondents in that poll, what’s keeping prices tame is, first, the fact that the Red Sea crisis has not yet affected oil shipments in the region, thanks to alternative routes.
The second reason cited by the analysts is OPEC+ spare capacity, which has increased, thanks to the cuts.
“Spare capacity has reached a multi-year high, which will keep overall market sentiment under pressure over the coming months”, senior analyst, Florian Grunberger, told Reuters.
The perception of ample spare capacity is definitely one factor keeping traders and analysts bearish as they assume this capacity would be put into operation as soon as the market needs it. This may well be an incorrect assumption.
Saudi Arabia and OPEC have given multiple signs that they would only release more production if prices are to their liking, and if cuts are getting extended, then current prices are not to OPEC’s liking yet.
There is more, too. The Saudis, which are cutting the most and have the greatest spare capacity at around 3 million barrels daily right now, are acutely aware that the moment they release additional supply, prices will plunge.
Therefore, the chance of Saudi cuts being reversed anytime soon is pretty slim.
Then there is the U.S. oil production factor. Last year, analysts expected modest output additions from the shale patch because the rig count remained consistently lower than what it was during the strongest shale boom years.
That assumption proved wrong as drillers made substantial gains in well productivity that pushed total production to yet another record.
Perhaps a bit oddly, analysts are once again making a bold assumption for this year: that the productivity gains will continue at the same rate this year as well.
The Energy Information Administration disagrees. In its latest Short-Term Energy Outlook, the authority estimated that U.S. oil output had reached a record high of 13.3 million barrels daily that in January fell to 12.6 million bpd due to harsh winter weather.
For the rest of the year, however, the EIA has forecast a production level remaining around the December record, which will only be broken in February 2025.
Oil demand, meanwhile, will be growing. Wood Mackenzie recently predicted 2024 demand growth at 1.9 million barrels daily.
OPEC sees this year’s demand growth at 2.25 million barrels daily. The IEA is, as usual, the most modest in its expectations, seeing 2024 demand for oil grow by 1.2 million bpd.
With OPEC+ keeping a lid on production and U.S. production remaining largely flat on 2023, if the EIA is correct, a tightening of the supply situation is only a matter of time. Indeed, some are predicting that already.
Natural resource-focused investors Goehring and Rozencwajg recently released their latest market outlook, in which they warned that the oil market may already be in a structural deficit, to manifest later this year.
They also noted a change in the methodology that the EIA uses to estimate oil production, which may well have led to a serious overestimation of production growth.
The discrepancy between actual and reported production, Goehring and Rozencwajg said, could be so significant that the EIA may be estimating growth where there’s a production decline.
So, on the one hand, some pretty important assumptions are being made about demand, namely, that it will grow more slowly this year than it did last year.
This assumption is based on another one, by the way, and this is the assumption that EV sales will rise as strongly as they did last year, when they failed to make a dent in oil demand growth, and kill some oil demand.
On the other hand, there is the assumption that U.S. drillers will keep drilling like they did last year. What would motivate such a development is unclear, besides the expectation that Europe will take in even more U.S. crude this year than it already is.
This is a much safer assumption than the one about demand, by the way. And yet, there are indications from the U.S. oil industry that there will be no pumping at will this year. There will be more production discipline.
Predicting oil prices accurately, even over the shortest of periods, is as safe as flipping a coin. With the number of variables at play at any moment, accurate predictions are usually little more than a fluke, especially when perceptions play such an outsized role in price movements.
One thing is for sure, though. There may be surprises this year in oil.

lrina Slav
Slav writes for Oilprice.com.

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