Mr. Simbi Wabote, Executive Secretary of NCDMB

How Nigeria saves $2bn on LNG Train 7 through local content initiative: NCDMB Board

*Focus of Nigerian Content implementation not Nigerianisation but domiciliation of capacities, promotion of FDIs, home grown investments ─ NCDMB Executive Secretary

Isola Moses | ConsumerConnect

As Nigeria advances its application of the local content development initiative, the country has saved $2 billion on Engineering Procurement and Construction (EPC) contract for Nigeria LNG Train 7 Project via the Nigerian Oil and Gas Industry Content Development (NOGICD) Act implementation.

Mr. Simbi Wabote, Executive Secretary, Nigeria Content Development and Monitoring Board (NCDMB), said this in a statement by its Corporate Communications Saturday in Lagos.

Wabote spoke at a workshop held for the Judiciary on Zoom, which attracted more than 117 participants, including Justices of the Supreme Court, Appeal Court, National Industrial Court, Federal High Court and external solicitors.

NCDMB Content Tower President Muhammadu Buhari commissioned in Bayelsa State recently

The NCDMB Executive Secretary stated that there is sufficient evidence to prove that sustainable Local Content practice reduces the cost of oil and gas projects besides creating job opportunities and economic prosperity.

According to him, an instance is the LNG Train 7 EPC bid, where Saipem Contracting Nigeria and its consortium won the contract with lower bid, leveraging 50 years’ commitment to local content and investments in Nigeria.

Wabote stated that “in the concluded LNG Train 7 project contract awarded, the difference in price between Saipem that had established itself in Nigeria and the second lowest bidder coming from outside the country was $2 billion.

“That’s a huge sum of money that this country would have lost if not for the drive for the development of local content.

“The other consortium had no footprint in the country and it proposed to put extra $2 billion on the back of the project to develop local capacity to execute the project.

“This is evidence of cost savings associated with the development of local content.”

Developing local content and building capacity would always entail some costs at the beginning, said he, adding that such costs ultimately gets reduced overtime and creates  jobs and stability in the polity.

He, nonetheless, clarified that the focus of Nigerian Content implementation is not Nigerianisation, rather it encouraged domiciliation of capacities and promotion of foreign direct investments and home grown investments.

The Executive Secretary said the NOGICD Act would always protect investments in the country, adding that companies that built capacities were given first right of refusal in industry projects.

“The law is a protective instrument for businesses. There are cable manufacturers in Lagos.

“If there is any opportunity to supply cables to oil and gas companies in Nigeria, those companies have the right of first refusal,” he said.

Also, the Chief Justice of Nigeria, Justice Tanko Muhammad, described the implementation of local content policies across the globe as an apparatus through which citizens of oil rich countries derive value from crude oil resources.

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