FG must take Local Content Lawserious – PETAN boss
The Petroleum Technology Association of Nigeria, PETAN is an association of Nigerian Indigenous Technical Oilfield service companies in the upstream and downstream sectors of the oil industry. In this interview with OPEOLUWANI AKINTAYO, the newly elected Chairman of the body, Mr. Bank-Anthony Okoroafor, takes the bull by the horn, seeking that the Federal Government of Nigeria takes serious the Local Content Law which would give power to Nigerian companies and create more employment for the teaming Nigerian populace, among other issues.
Excerpt:
What can you say about local content?
Let me start by saying that nobody can love Nigeria like Nigerians. That is why nobody can develop our country like we can.
Local content gives power to Nigerians. Local content provides job for Nigerians. Local content can lift the dollar spell on Nigeria. Remember, nobody can tell our stories better than us. If you allow other people to tell our story, they will never say anything good about us. Have it in mind that Nigerians have a better acumen and the spirit of enterprise. Why is it that our people all over the world shine? That is because there is nothing wrong with us. Nigerian companies have the capacities to deliver services to world’s standard. So, any job that can be done by a PETAN or competent Nigerian company, should not be given to foreigners or foreign companies. It is criminal. For the past 10 years, we have not grown our oil and gas reserves. But now that oil is no longer as golden as it had always been, we must thinking of having enough fuel in our reservoir if not for other things, so that this issue of fuel scarcity can be forgotten issue. We must grow our local content capacity. This should not be about how patronized a company is but the level of services, contributions and development it has been able to render to Nigerians and Nigeria.
Is there a law in Nigeria backing local content?
Yes, there is a law but it is being broken by even our people and the law makers themselves. They know this yet, they bypass Nigerian companies and prefer to give our jobs to outsiders. But right now, we have backings of the Secretariat to make sure that Nigerians are no longer taken advantage of. Some people even go to the extent of registering their companies as Nigerian companies and end up taking the jobs outside the country which is not in the interest of Nigeria. Every country has percentage foreigners and foreign companies who get any form of jobs in their country must pay to the government but such does not hold in Nigeria. PETAN is now serious to fly with the law because nobody or company will try it in other countries of the world without being nabbed.
You said it is criminal to give jobs to foreign contractors when there are indigenous companies that can do them. What steps are you taking as a body, to ensure that Nigeria does not continue to shove aside its own people to favour foreigners and foreign companies?
Well, the Local Content law says all the jobs onshore are to be given 100 per cent to Nigerian companies. Then offshore, wherever there is gap, will form alliance with Nigerian companies. But where the capacity and capability exists in the country, it must be given to Nigerian companies. Have you ever wondered how the foreign oil companies produced during the militancy days? That is because they ran away and our boys were the ones going there to produce. What that tells you is that those jobs done by foreigners can also be done by Nigerians. So, what do we need them for? Nobody can develop this country like Nigerians. Local content is the only way we can circulate the money in the country. That is the only way we can develop our people and raise their confidence, and build up more entrepreneurs. There is no country in this world that does not look out for their people, much more the competent ones.
How does one differentiate a foreign company that pretend to be working in the interest of Nigeria from a true Nigerian company?
Nigeria should have the data of foreigners who come into the country to solicit for jobs. If you want to know the difference between a foreign company pretending to be indigenous and a truly Nigerian company, watch where the money goes. If the money they collect goes outside the company then, know for sure that it is not working for the benefit of Nigerians. Many people come into the country and say they are representing one Nigerian company or the other and once the contracts are given to them, they fly in their own people and import all the equipment from their countries. Then they just rent a room at Ikoyi, buy a Range Rover, wear nice suit and shoes and print very attractive complementary cards yet, they contribute nothing to our economy. But a true Nigerian company will rent or build a proper structure, employ Nigerians, train them, patronize our products and spend the money here in Nigeria so the money circulates and foreigners won’t get our jobs.
With the recent fuel scarcity problem in the country, nobody needs to tell us Nigeria should build more refineries and repair the old ones. What are the strategy does PETAN have on this?
First of all, PETAN pushes for private participation. If our refineries are run by private individual, the rots that are there will not be there today. If you look at the Niger State Petroleum, they have plants that produce 400 barrel per day diesel and the company is 100 per cent Nigerian, and they maintain it well because it is private. Government has no business operating companies. They are meant to set policies which the privates will use to run businesses because when you invest, you will never allow it to fail. As long as refineries are run by the government, I don’t see a lot of progress. They should sell the refineries to private people, remove their equity from it and allow the private people to drive it. That is when you will see progress. The physical environment has to be such that will be friendly. If you regulate the business environment then, investing becomes difficult. We should allow market forces of demand and supply to control the economy because that is what will put an end to this problem of fuel scarcity in this country. Private participation is the key.
The same thing goes with the IOCs Cash Call. If government can reduce the equity holdings they have with the JVs then, they will spend less on cash calls, then earn from royalties, tax and others. We must also make sure that the physical tax we have in our JV is investment friendly because, these days, the investment firms is like a beautiful bride. They go where there are friendly environment. Investment terms must be friendly so that it can be win-win for both investors and government. Let Nigeria stop talking and start executing. The low oil prices has given us a chance to change our focus and start thinking about other areas.
Could you asses the Nigerian Local Content Monitoring Board? How have they been effective so far in terms of monitoring and enforcing because PETAN’s role is just for advocacy?
It is not just their role to monitor and enforce. Everybody must join hands if you want this country to survive. The reason for saying everybody has a role to play is because, for someone like Dangote who is building a 650,000 capacity refinery. It is going to cost $14.5 billion. If all the parts and works are done by Nigerians and Nigerian companies, he will spend almost $10 million. Building the refinery will take 400 hundred people working for 8 months. Would it not be good to do such jobs in Nigeria? Giving the job to India- that means 400 of their engineers will be engaged for good 8 months. So, it is the duty of all of us to educate our people.
But the excuse has always been that we do not have competent hands to do those jobs here in Nigeria
That is not true. If anybody tells you that we do not have competent hands and companies here in the country, call me and I will show you many companies who can. We have PETAN companies that have built storage tanks for IOCs, engine installations and building, and so many jobs being given to foreign companies can be done here in Nigeria. And everything done here can be certified by various certifying bodies. Even when we talk about local content, we spend $15 billion dollar a year to produce oil in the country but importing oil and gas costs us $40 billion dollar a year. The oil and gas is just a little of the pack. PETAN’s new executive mantra is ‘Value added content’- giving jobs to Nigerian companies and keeping the jobs and money in the country. I want to let you know that PETAN now has the attention of stakeholders who are ready to listen to us.
How strong is PETAN to enforce all these?
PETAN is in the board of the Nigerian Content Board. So, a lot has happened but a lot still needs to be done. We have started. What is lacking is information. If you see where the Local Content Law is being broken, inform us and see what will happen.
Nigeria has not been able to grow its reserve for the past 10 years. What are your suggestions?
We need to carry out proper exploration and find out where the reserves are. Then we develop them, and add them to the reserve because for any barrel of oil you produce, the reserves go down. And your reserve has a limited line as long as you do not replace. We are suffering because we have not maintained our refineries. We have to replace our reserves so that it won’t go dry. We need to push increase in exploration activities. Ten years ago, it was 37 million barrels and we are still talking about that amount today so, we need to increase exploration.
Another thing is that, if International Oil Companies, IOCs and Nigerian Oil Companies, NOCs are not physically stable, there will be no jobs for the service companies. Funding problems has to be solved.
Our main focus is to make sure that jobs are made available for more Nigerians thereby circulating the money in Nigeria because we have to do this for our children and the ones yet unborn. The Local content law does not start and stop with the oil and gas industry. Children are going to school outside the country, medical attention are being sought outside the country because we have not taken the local content law serious.
