Chief Timipre Sylva, Minister of State for Petroleum Resources
…Nigeria lags behind in terms of funding for R&D
…Private sector should support and enhance R&D in the oil industry like the pharmaceutical and biotechnological sectors
-By Felix Douglas
Delivering his keynote address at the 2nd Research and Development Fair and Conference hosted by the Nigerian Content Development and Monitoring Board (NCDMB), the Minister of State for Petroleum Resources, Chief Timipre Sylva made it known that Research and Development (R&D) is a collective commitment to aggressively drive innovation and position the oil industry on the path of an integrated energy sector, where field development and production solutions are sourced through local capabilities.
He stated further that the Nigerian Oil and Gas Industry Content Development Act 2010 confers on the Minister of Petroleum Resources the responsibility of making regulations for the growth of research and development in the industry. “This provision underscores the relevance of research as a key enabler for sustainable local content development, which is the essence of setting up the Nigerian Content Development and Monitoring Board.”
Sylva added that there is a need to do a comparative analysis. Currently, developed nations such as the USA, China, Japan, Germany, and South Korea spend between 2.5 to 4% of their annual Gross Domestic Production (GDP) on R&D, while developing nations like India, Malaysia, and Brazil spend between 0.7% to 1.2%. Nigeria lags well behind by spending only about 0.2% of its GDP on Research & Development.
He said the underfunding of R&D reflects on Nigeria’s overdependence on foreign goods and services. “This is unsustainable if we are serious about building a national technological capability that will drive economic growth. It is my firm believe that this trend can be mitigated through a collaborative approach to research and innovation.
It is important, however, to clear up a certain misconception: The funding of research is not the sole responsibility of national governments, rather, big spenders on research and development globally come from the private sector.”
In 2019 private sector practitioners in the ICT hardware and electronic equipment sector, pharmaceutical & biotechnology sector, automobiles and components sector cumulatively spent US$528bn on R&D representing 22% of the US$2.3 trillion global R&D spend. In India, the private sector contributed 38.1% of the country’s R&D spend.
The essence of this data analytics is to reinforce the importance of local service companies to embrace investment in R&D as a key component of business model.
As part of support from the government, the Minister said, in line with commitment to provide leadership, it has created the “Nigerian Content Research and Development Fund” with an initial seed capital of $50 million. The fund is designed for application in the following areas: establishment of research centers of excellence, funding support for research commercialization, funding support for basic and applied research and endowment of professorial chair.
Although the fund clearly is insufficient but it signifies premium the present administration places on growing the country’s research and development capabilities.
Sylva urged the private sector to replicate global practice by complementing the Nigerian Content Research & Development Fund and actively support the government’s drive in upscaling national research architecture
Following a painstaking forensic analysis of the research eco-system in Nigeria and the anticipation of the industry, NCDMB has developed a 10-year R&D Roadmap to set the agenda for its interventions on R&D.
The Minister formally launched NCDMB 10-year R&D Roadmap. The Roadmap is anchored on 8 success pillars – funding, infrastructure, capability, commercial framework, collaboration, governance, legal framework and enforcement. The 8 success pillars collectively implemented will no doubt position the industry on the path of sustainable assimilation of products of Research in oil and gas operations
Beyond financial intervention, the industry must challenge the local academia with its research problems, to ensure the development of homegrown technology and the retention of oil and gas spend in the economy.
The Minister also enjoined the Nigerian National Petroleum Resources (NNPC) to brace up to the challenge and takes it seriously with its Joint Venture Partners since the country is preparing to unveil a reformed oil and gas industry that is driven by efficiency, innovation and independence as encapsulated in the Petroleum Industry Act of 2021 signed into law by President Muhammadu Buhari.
Sylva pointed out that the Petroleum Industry Act has introduced a governance framework for the industry with clear delineation of roles between regulation and profit-centric business units. The Act contains fiscal incentives to attract investment in gas development and local refining.
It also provides exceptional care for host communities and future energy security through dedicated funding of frontier basins, renewable energy development and local content.
The evolving reality is a pointer for stakeholders to begin to look inward and gravitate towards research and development endeavors capable of granting them technological and strategic competitive advantage.
He added that Research and Innovation ecosystem thrives better with strong collaboration between Government-Industry and the Academia.
He announced approval of reconstitution of Nigerian Content Research and Development Council which will be headed by the Executive Secretary of NCDMB, Engineer Simbi Wabote. The tenure of the Council will for two years consisting of seasoned subject matter experts from industry, Government and academia will consolidate on the gains recorded, proffer sound policies that will shape the direction of NCDMB’s research interventions.
The Minister commissioned the NCDMB Technology Incubation and Innovation Center. A Center that will provide platform for idea generation, incubation and acceleration of innovative ideas to the marketplace.
“Looking at history, innovation does not emanate from giving people incentives; it comes from creating ecosystems where ideas can connect. I will therefore invite all industry stakeholders and our teaming youths to take advantage of this Center to foster adaptation of existing solutions and create new solutions that address major industry challenges.”
To consolidate on entrenching lasting infrastructure legacies, the Minister revealed that President approved establishment of the Oloibiri Museum and Research Center (OMRC) as part of his signature projects for Niger Delta and the oil industry.
The scope of the OMRC project consists of a museum where historic developments, data, equipment, and tools used in the Nigerian oil and gas industry will be stored for posterity. There will also be a functional Research Test Center where prototypes can be tested and validated in fulfillment of the requirement for approval of new technologies. This landmark facility for testing Research prototypes will close a major gap in quest for homegrown technology.
The Minister is confident that combined impact of fiscal, governance, and developmental provisions contained in the PIA and the major infrastructure and institutional support to R&D will lead to a new energy industry that is resilient, adaptive to gas-based energy transition and a source of pride to all compatriots.
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