Nigerian Content, Shell, equipment manufacturers to inject $62m into oil and gas sector

The Nigerian Content Development and Monitoring Board (NCDMB) and Shell Petroleum Development Company have signed an agreement with five equipment manufacturers to invest 62 million dollars (N9.92 billion) in local components manufacturing in Nigeria. This is contained in a statement issued in Abuja by Mr Obinna Ezeobi, media officer of the board.

It said that the agreement, which would run for the next three years, was geared at getting manufacturers of oil and gas equipment to establish plants for the manufacturing of some components in Nigeria. It quoted the Executive Secretary of the board, Mr Ernest Nwapa, as saying, “the investments by the five companies are expected to create 250 skilled employments for Nigerians.’’ Nwapa, however, said that obtaining the Nigerian Content Equipment Certificates was not a licence to win contracts as the board had in-built mechanism to track investment commitments in the industry.
He said that the board was in the process of making recommendations to the Minister of Petroleum Resources, Mrs Diezani Alison-Madueke, for a fiscal framework. According to him, the framework will impose a higher tax burden for equipment utilised in the industry with less than 50 per cent local content. He noted that this would help address issues of price competitiveness usually associated with locally made goods.

The Managing Director of Shell, Mr Mutiu Sumonu, was quoted as saying that Shell supported the Equipment Components Manufacturing Initiative because of the multiplier effects it would bring to the oil and gas industry and the Nigerian economy.

“Shell has strategically chosen the focus areas to extend support to foreign investors by identifying some of the prime bottlenecks in the business environment. This includes electricity, access to land and security which contribute to over 11 per cent losses in sales and will support to a certain extent, the increase of activities in the country,” Sumonu said.