Technology & Nigerian Content

Transcription

1 Technology & Nigerian Content A Presentation at NOG Tech Conference & Exhibition June 5, 2013 by ENGR. E.C. NWAPA (FNSE), Executive Secretary, NCDMB

2 Challenge: Changing the Pre NOGICD Act Footprint Pre-Nigerian Content Implementation Buying rather than selling. Exporting Nigerian Jobs Estimated capital flight $380 billion Estimated lost job opportunities 2 million Defining the Roadmap for Change Nigerian Content Implementation Bringing Nigerian Jobs Back Hub for oil and gas services Estimated $191 billion could be retained 300,000 new direct job opportunities -(Engineering, Sciences, Technicians etc) $78b $14b Technical Services $39b $20b Fabrication $20b $39b Engineering $214b $107b Procurement $9b $7b Research & Development Over 95% of industry spend Abroad 30yr 10yr Over 65% of industry spend domiciled

3 Challenge: Ineffective R&D Initiatives Among the contributory elements to capital flight in the industry is lack of sufficient investment in Research & Development which in-turn impedes technology growth in the country.

4 Introduction of the Nigerian Content Act Signed into law by Mr. President in April Established the Nigerian Content Development and Monitoring Board Inaugurated Governing Council for the Board August 2010 NCDMB commenced operations in Yenagoa in June 2010

5 NCDMB Vision: To Be The Instrument Of Industrialisation For Nigeria Mission: Promoting the development and utilization of in-country capabilities for the industrialization of Nigeria through the effective implementation of the Nigerian Content Act.

6 THRUST OF THE NOGICD ACT Key Thrust Maximize utilization of Nigerian made goods and human resources Ensure participation of indigenes and oil producing communities in all aspects of Oil and gas business Foster institutional collaboration Focus areas: Job Creation. Training Acquisition of technology capabilities Development of facilities and infrastructure Developing Research Initiatives

7 HMPR Medium Term Targets Target Key Drivers & Deliverables Retain $10 billion out of $20 billion average annual Industry spend. Domiciliation of technology and knowledge in-country. Create over 30,000 direct employment and training opportunities. Pilot Industrial Park Scheme and associated manufacturing activities. Establish 3 to 4 new pipe mills to service industry demands New jobs to be created in addition to domiciliation of pipe mill technology Develop 1 or 2 dockyards and maximize utilization of existing shipyards. Creation of new jobs and steady developmental increase in dockyard technology and knowledge transfer

8 Sections of NOGICD ACT Dedicated to Research & Development Section 36.the Minister shall make regulations with requirements and targets for the growth of research and development in the Nigerian oil and gas industry. Section 37 each Operator shall submit a revolving three to five year plan for oil and gas related research and development initiatives that will be undertaken in Nigeria Section 38 & 39 requires the Operator to submit periodic reports on its research and development activities

9 NOGICD Act Schedule Targets for Research & Development Description NC% Measured Unit Engineering Studies Reservoir, Facilities, Drilling etc 60 Spend Geological and Geophysical Services 80 Spend Safety and Environmental Studies 75 Spend Local Material Substitution Studies 75 Spend

10 Sections of NOGICD ACT Dedicated to Technology Transfer Section 43: each Operator shall carryout a programme in accordance with the country s own plans and priorities for the promotion of technology transfer to Nigeria in relation to its oil and gas activities Section 45: the Operator shall give full and effective support to technology transfer by encouraging and facilitating the formation of joint ventures, partnering and development of licensing agreements between Nigerian and foreign contractors Section 46 requires the Operator to provide reports on its technology transfer initiatives and their respective results

11 Equipment Component Manufacturing Initiative & Nigerian Content Equipment Certification (NCEC) In a bid to reduce capital flight from importation of oil and gas Equipment, the Board introduced the Equipment Components Manufacturing Initiative, which seeks to get local representatives of Original Equipment Manufacturers (OEMs) in Nigeria to partner with OEMs to set up manufacturing facilities in Nigeria.

12 Equipment Component Strategy focus on Increased Participation of Nigerians in the Equipment Supply and Utilization Value Chain Value chain Manufacture of component of equipments Equipment component assembly Equipment testing, certification and calibration Equipment supply Equipment installation Impact Robust SME base Employment opportunities for over 1 million Harnessing local resources for economic production Linking manufacturing to oil and gas industry Employment opportunities for over 500,000 Technology transfer through OEM partnership Foreign investment inflow (0ver $1billion per annum) Deepen QA/QC capabilities Employment opportunities for over 100,000 Foreign investment inflow (0ver $500 million per annum) This is where Nigerians played in the past - commission agents No foreign investment inflow Less than 10,000 employment opportunities No technology transfer Deepen indigenous capabilities on E&P platform and HSE Attributes of strategy Reduce imported components on equipments used in industry promote establishment of manufacturing facilities for component manufacture Promote assembly of equipments in Nigeria Facilitate OEM presence in Nigeria Equipment repairs and maintenance World class repair and maintenance workshops Local manufacture of spare parts and lubes Employment opportunities for over 20,000 Desired Past Opportunity for Engineers- design. Process, mechanical engineers

13 STRATEGIC INTERVENTIONS Equipment Components Manufacturing (NCEC) Growth Industry guideline mandates all OEMs to domicile manufacture of equipment components, parts, packages and systems in Nigeria Components and Frames Equipment Parts Equipment Packages 2011 to 2017 Year

14 Strategic Interventions:- Training & Employment to Close Skill Gaps Social Employment PUBLIC SECTOR (Regulator) ~30,000 jobs SERVICE PROVIDERS (Services, equipmt) <1 million jobs OPERATOR (Opportunities and finance) ~25,000 jobs LINKAGE INDUSTRIES (Manufactrg) >2 million jobs Productive Employment 1.(NOGETTS) Project Based Training and Attachment - Over 8,000 candidates captured on NOJICJQS, 4100 Trained/Attached Geosciences program to train 500 Environmental Remediation program to train Institutional Development - OGTAN, PETROFAC, TCEs, NIW, SS Academy 3.Expatriate Quota Management - EQ allocation supported by robust succession planning Monitor utilisation of EQ slots

15 Nigerian Content Consultative Forum (NCCF) NCCF Petroleum Technology Association of Nigeria Education and Training Fabrication Finance Services, Legal and Insurance Shipping and Logistics Materials and Manufacturing Information and Communication Technology Engineering Corporate Entity (PETAN) Corporate Entity (OGTAN) Corporate Entity Corporate Entity Corporate Entity Corporate Entity Corporate Entity Corporate Entity

16 Status Of NCDMB Direct Projects S/No INITIATIVE DESCRIPTIONAND INITIATIVES 1 Training programs Environmental Remediation - 1,000 Geosciences training for 50 Establish TCEs for O&G training and certification STATUS Consultant selected for geosciences training. Process for environmental to be concluded Business plan for TCE submitted by Petrofac/ OGTAN. PLANNED ACTIVITIES Shortlist candidates for geosciences and environmental training and commence. Commence TCE implementation in Q PipeMill Pilot Scheme Line pipe demand > 800,000MT 3-4 Pipe Mills required to meet NC target of 100%. The Board is driving pilot project to setup pipe mill in Polaku, bayelsa 10 HA Land acquired at Polaku Land clearing has commenced Operator to build jetty to support the Pipe. Investor preparing to setup Progress with site preparation Investor to commence studies Operator to commence on jetty construction Process outstanding payment 3 Nigeria Oil and Gas Industrial Park Scheme (NOGIPS) To facilitate low cost manufacturing and participation of Oil communities. Scope is 9 oil producing states Commence with 2 pilot locations. Developed concept for NOGIPS Commenced stakeholder engagements Commenced engagement of state Govts Hold SME fair Select SMEs/ OEMs to invest in parks Conduct site selection studies development

17 Two Pronged Approach To Manufacturing 1. Macro - line pipes, Umbilicals, pumps etc 1. IOC collaboration 2.High employment and revenue retention impact 3.Technology transfer Developing a thriving oil and gas based manufacturing 2. Micro - flanges, chemicals, PPEs, bolts & nuts etc 1. State/community participation 2. Skilled and semi skilled employment 3. Low cost manufacturing solution

18 Domiciliation of Manufacturing Technology : - Pilot Pipe Mill Project Polaku aerial view Site preparation ongoing Gas Plant Pipe Mill Site

19 Domiciliation of Manufacturing Technology : - NIGERIAN OIL AND GAS INDUSTRIAL PARK SCHEME (NOGIPS) NOGIPS: Specific location with common facilities for manufacturing of oil and gas products and allied services. Model will reduce start-up and operating costs for prospective industries. Typical activities - manufacturing, training, warehouse & logistics services, workshop, office & residential accommodation, banking services, catering and medical services etc. Objective: 1. To attract domestic and foreign direct investment to Nigeria. 2. To promote community participation in manufacturing and other industry activities. 3. To develop and integrate the local supply chain to support oil and gas operations. 4. To foster mentoring of local SMEs by international OEMs for mutual benefits 5. To facilitate new business start-ups, technology acquisition and competitiveness 6. To provide a range of made in Nigeria goods for the oil and gas industry

20 INTRODUCTION NOGIPS LAND USE MODEL The built up area of each park shall consist of the following businesses at the minimum: Oil states LAND USE MODEL a) Manufacturing (Brackets, switch gear, panels, etc.) b) Maintenance and repairs workshop c) Utilities base -power plant, water supply, waste management, telecommunications d) Parking space e) Warehouse and distribution center f) Security post g) Financial services center h) Training and Research & Development center i) Clinic j) Canteen k) Office accommodation Key considerations: Access to gas supply Availability of skilled labour Availability of raw material base Critical product demand by oil and gas industry

21 INDUSTRIAL PARK DEVELOPMENT PROGRAM Benefits IOCs Relieve employment pressure on IOCs Deepen compliance with provisions of the NOGICD Act Cost and schedule efficiency in the long run Government International OEMs Local supply chain Youths Employment generation in the real sector Diversification of the economy Harnessing of local raw material base Meet government's local content aspirations Facilitate access to Nigerian market Low start up investment cost Access to quality infrastructure Increase cost and schedule competitiveness through shared services Access to technology know-how through collaboration with international OEMs Opportunity for attachment and gainful employment Ability to unleash inherent individual potential and innovation Deepen local supply chain capabilities through mobilisation of grassroot based entrepreneurs

22 NIGERIAN CONTENT DEVELOPMENT FUND MODEL 30% Direct Intervention Ltd 70% Guarantee Ltd Acquisition and preparation of the site for pilot pipe mill. Part funding of NOGIPS Environmental Remediation and Geo science training NCDF (Section 104 of Act ) Provide partial guarantees for loans to finance contracts More relaxed terms Build suppler capacity. Fund Managers (BGL/UBA global) SPV setup to strengthen Governance

23 Opportunities for Nigerian Companies 1. Invest in technology acquisition and international certification in order to exploit opportunities brought about by the NOGICD Act 2. Invest in Research Development and innovation to close knowledge capacity gaps Taking Advantage of Opportunities created by the Act. 3. Establish communication channels with NCDMB to discuss issues hampering growth of Technology Transfer in-country and devise strategies for progress 4. Take steps to diversify technological expertise in various fields with the aim of increasing the marketability of Nigerian tech initiatives in global circles.

24 Challenge to Stakeholders Section 48 the Minister shall consult with the relevant arms of Government on appropriate fiscal framework and tax incentives for foreign and indigenous companies which establish facilities, factories, production units or other operations in Nigeria Stakeholders should exploit such clauses to fast track industrialization in-country

25 Conclusion In the Technology Game, The Ball is in Nigeria s Court All Stakeholders Be BOLD & Take Advantage of Opportunities Presented by the NOGICD ACT Participate actively in NCCF NCDMB Provide support through regulation, enforcement and capacity building initiatives.

26 The End NIGERIAN NATIONAL PETROLEUM CORPORATION NCDMB Nigerian Tech Initiatives Steady Tech Growth TOGETHER WE CAN SUCCEED! THANKS FOR LISTENING Any Questions??