For more information on the Nigerian Content Law please visit the official website of the Nigerian Government Local Content page found in this introduction to the Nigerian Content Law.
Local Content development is an initiative on the part of the Nigerian Government to help develop local capacity building in the Nigerian Oil & Gas Industry and to enable Nigerians participate actively.The Nigerian Government is actively promoting the internalization of inputs in the upstream sector. The objectives of the Local content policy are to promote a framework that guarantees active local participation without compromising standards; to promote value adding in Nigeria through utilization of local raw materials and human resources; and to promote steady, measurable and sustainable growth of Nigerian content.
Both foreign and Nigerian investors, either solely or in partnership, have the opportunity to participate actively and effectively in all the facets of the industry and not just as suppliers of peripheral services, particularly as Exploration & Production operations expand towards the deep offshore and the Gulf of Guinea.
Legal, regulatory and institutional structures and mechanisms to drive the actualization of the local content program are being put in place.
WHAT IS NIGERIAN CONTENT?
Nigerian Content is defined as the quantum of composite value added
or created in the Nigerian economy through the utilization of Nigerian
human and material resources for the provision of goods and services to
the petroleum industry within acceptable quality, health, safety and
environmental standards in order to stimulate the development of
indigenous capabilities.
WHAT ARE GOVERNMENT TARGETS FOR NIGERIAN
CONTENT ?
The targets set by the Federal
Government for Nigerian content is 70% by 2015
WHAT IS NIGERIAS NATIONAL PETROLEUM
CORPORATION'S VISION FOR NIGERIAN CONTENT?
Their "Nigerian Content" vision is to transform the oil and gas
industry into the economic engine for job creation and national growth
by developing in-country capacity and indigenous capabilities. In this
way, greater proportion of the work will be done in Nigeria with active
participation of all sectors of the economy and ultimately Nigeria will
be positioned as the hub for service delivery within the West African
sub region and beyond .
WHAT IS THE MAIN THRUST OF THE NIGERIAN CONTENT POLICY?
Promote a framework that guarantees active participation of Nigerians in Oil and Gas activities without compromising standards in order to stimulate growth of indigenous capacity.
Promote Value Adding in Nigeria by Utilization of local raw materials and human resources for manufacturing of goods and provision of services to the Petroleum industry.
Promote steady measurable and sustainable growth of Nigerian Content.
WHAT FRAMEWORK IS IN PLACE?
A national vision and action plan included in a Policy Package. Based
on contributions by stakeholders and key players in the industry at
numerous workshops and seminars, a Nigerian Content Policy has been
submitted to the Government and approved.
A legal device in the form of an Act, Statute or Regulation to give it
normative force.
A draft Nigerian Content Development Bill has been submitted by NNPC
to the government which has been passed this year. The enforcement of
this regulation is
the responsibility of the Department of Petroleum Resources.
An organizational framework which sees to the implementation of the
Policy.
A Nigerian Content Division, headed by a Group General Manager was
set up in March 2005 under the Group Managing Director's office of the
Nigerian National Petroleum Corporation. The division is sufficiently
empowered to work with industry stakeholders and relevant arms of
government to develop strategies, drive implementation and ensure
compliance with directives being issued to the Oil companies regarding
the Nigerian Content aspirations of Government.
A Nigerian Content Consultative Forum (NCCF) was also inaugurated with 8 Sectors Working Committees covering Fabrication, Engineering,
Manufacturing, Banking & Insurance, Shipping & Marine, Well & Drilling
as well as Logistics services.
Another key feature of the organizational framework is the introduction
of a Joint Qualification System (JQS) into the contracting process to
provide a data bank of available Contractors and Suppliers of goods and
services to the Nigerian Petroleum Industry and streamline the
prequalification process. The JQS has been launched. It will eliminate subjectivity and open up genuine
opportunities for participation of qualified Nigerian contractors.
WHAT INTERVENTIONS TO MEET TARGETS OF 70%
BY 2015 SET BY GOVERNMENT?
NCD is gathering data and developing interventions in consultation
with the 8 Sectors committees of the NCCF keyed to the achievement of
government targets. To this end, the first set of specific intervention
guidelines have been issued to all Operators and NNPC departments
responsible for projects and operations in the upstream, midstream and
downstream sectors on the scope of work that must be performed in
Nigeria to achieve set targets.
The notable guidelines are as follows;
HOW ARE THE OIL COMPANIES RESPONDING TO
THE NIGERIAN CONTENT INTERVENTIONS?
The Oil companies are already Nigerian National Petroleum Corporation's
partners in several Joint Ventures and PSC arrangements for E&P
investments in the industry. Expectedly, they have received support from
the oil companies who have participated in the review of the draft
Nigerian Content Bill, JQS and Capacity Development programs. The oil
companies also belong to the NCCF which meets monthly and have complied
with several requirements of the Nigerian Content Department. Nigerian
Content Managers have been designated in the Oil companies in line with
the coordination procedure.
WILL THE NIGERIAN CONTENT POLICY STRAIN
THE RELATIONSHIP BETWEEN NIGERIAN NATIONAL PETROLEUM COMPANY AND
MULTINATIONAL OIL COMPANIES?
No. Most multinational companies that do business in Nigeria have had
experience in Local content development in their home countries and
other locations where they operate. To ensure a smooth transition, NNPC
has consulted widely and adapted tested and sustainable strategies from
other countries in similar setting.
HOW WILL NIGERIAN CONTENT DEAL WITH
EXPATRIATE QUOTA IN THE OIL AND GAS SECTOR?
The Nigerian Content Bill makes provisions that empower the
Department of Petroleum Resources to participate in the processing of
expatriate quotas for cases involving the Oil and Gas industry. Also the
requirement for professional bodies to certify foreign professionals who
want to practice in Nigeria is another way to ensure that only
unavailable expertise is imported. Professional bodies have been
approached to work out modalities.
ARE THERE SANCTIONS FOR NON-COMPLIANCE
WITH NIGERIAN CONTENT PROVISIONS?
The draft bill makes provision for sanctions and penalties to be
applied to defaulting participants. The coordination procedure also
provides checks and monitoring points to ensure compliance proactively.
WHAT ARE THE KEY EXPECTATIONS FROM
NIGERIAN CONTENT INITIATIVES ?
In the short term, the intervention guidelines are expected to create
several thousands of jobs for Engineers, welders and other professionals
and artisans in the Engineering, Procurement and Construction phase of
all oil and gas projects.
With requirements for utilization of locally manufactured goods and
equipment, major investments in infrastructure are expected and the
local manufacturing industry will be reinvigorated.
WHICH SECTORS ARE COVERED BY NIGERIAN
CONTENT POLICY?
The policy applies to all sectors of the Nigerian Oil and Gas
industry. In this phase of activities, primary focus is placed on major
contracts and operations in Upstream, (JV, PSC & Indigenous Producers)
Midstream (Gas & Power Projects) and Downstream (Refinery,
Petrochemicals and other) sectors.
The plan is to make progress with this initiative to the extent that
other segments of the national economy begin to benefit from the
capacity of the oil and gas sector.
WHAT ARE THE RECENT ACHIEVEMENTS THROUGH
NIGERIAN CONTENT?
A lot is going on in the Nigerian Content scheme. Apart from the
organization of many Nigerian companies to brace for the several
opportunities from the recent guidelines, actual progress has been
recorded in quantum of work awarded to Nigerian Contractors. Oil
companies have realigned their work plans to reflect the aspirations of
the policy. Nigerian Content Division is ensuring that any work that can
be executed in Nigeria or by Nigerians is specified in the Nigerian
content scope in ITTs before they are issued.
HOW DO YOU PLAN TO BUILD REQUIRED CAPACITY
FOR NIGERIAN COMPANIES IN THE INDUSTRY?
Capacity building is one of the key plans for achieving governmental targets and this is pursued in the following activities;
1.
Survey of
available capacity and identification of needs for new projects and
operations;
2.
Identify new
Opportunities for Local suppliers;
3.
Training of
Nigerians in targeted areas of competency and acquisition of
Technological and Managerial capability;
4.
Development of
infrastructure and upgrade of facilities
5.
Local Business
and supplier enhancement;
6.
Project
Financing and funding of local businesses.
We encourage all our clients to partner with Integrity Intercontinental as your Nigerian Local Content partners in all your Nigerian oil and gas dealings. This will indeed help in facilitating the speed required not just in the geting of contracts and deals but also in thier fulfilment.
For more information on the Nigerian Content Law please visit the official website of the Nigerian Government Local Content page here.
Thanks in advance.
Anakwe Joseph Chimeleze
CEO/Chairman
ceo@nigeriancrudeoilandgas.com
