The Federal Government has saved $2 billion on Engineering Procurement and Construction (EPC) contract for Nigeria LNG Train 7 Project through the Nigerian Oil and Gas Industry Content Development (NOGICD) Act implementation.
Mr Simbi Wabote, Executive Secretary, Nigeria Content Development and Monitoring Board (NCDMB), disclosed this in a statement signed by its Corporate Communications on Saturday.
Wabote spoke at a workshop held for the judiciary via zoom which drew over 117 participants, including Justices of the Supreme Court, Appeal Court, National Industrial Court, Federal High Court and external solicitors.
He said that ample evidence had proven that sustainable Local Content practice reduced the cost of oil and gas projects in addition to creating job opportunities and economic prosperity.
He gave example with the LNG Train 7 EPC bid, where Saipem Contracting Nigeria and its consortium, won the contract with lower bid, leveraging on 50 years commitment to local content and investments in Nigeria.
”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, ” he said.
Wabote noted that developing local content and building capacity would always entail some costs at the beginning.
According to him, such costs ultimately gets reduced overtime and creates jobs and stability in the polity.
He also clarified that the focus of Nigerian Content implementation was 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.
Muhammad thanked NCDMB for enhancing the judiciary capacity to dispense justice from an informed and contemporary position, particularly as it related to Local Content development and oil and gas operations.