File Name: nigerian oil and gas industry content development act .zip
Prior to the enactment of The Nigerian Oil and Gas Industry Content Development Act popularly referred to as the Nigerian Content Act , the Nigerian oil industry was originally the exclusive preserve of the International Oil Companies IOCs and other expatriate companies in areas ranging from exploration and production, trading as well as service operations. Attempts by previous administrations to introduce local content policies were ineffective and impotent largely as a result of the absence of an appropriate legal framework to drive such policies. The Nigerian Oil and Gas Industry Content Development Act was therefore signed into law on April 22 nd and aims to increase indigenous participation in the oil and gas industry by prescribing minimum thresholds for the use of local services and materials and to promote the transfer of technology and skill to Nigerian labour in the industry.
Local sourcing. The new law seeks to increase indigenous participation in the oil and gas industry by prescribing minimum thresholds for the use of local services and materials and to promote the employment of Nigerian staff in the industry. The Local Content Act derives from the Nigerian Content Policy which seeks to promote active participation of Nigerians in the petroleum sector without compromising standards.
The policy also focuses on the promotion of value addition in Nigeria through the utilization of local raw materials, products, and services in order to stimulate growth of indigenous capacity.
All regulatory authorities, operators, contractors, subcontractors, alliance partners and other entities involved in any project, operation, activity or transaction in the Nigerian oil and gas industry are required to consider Nigerian content as an important element of their projects. Nigerian independent operators shall be given priority in the award of oil blocks, oil field and oil lifting licenses as well as in all projects for which contracts are to be awarded in the Nigerian petroleum industry subject to the fulfilment of conditions specified by the Minister of Petroleum Resources.
The Act establishes a comprehensive local content regime that enshrines legal measures which promote the patronage of Nigerian products and services by operators in the Nigerian oil and gas industry. In this regard, the article suggests that the exemptions under Article 4 of the TRIMS Agreement, which permit a WTO member whose economy is in the early stages of development and can only support low standards of living to temporarily apply local content measures, can be applied by Nigeria to justify the oil and gas industry local content measures under the Act for the purpose of promoting economic development and improving living standards in the country. AJOL and the millions of African and international researchers who rely on our free services are deeply grateful for your contribution. Your donation is guaranteed to directly contribute to Africans sharing their research output with a global readership. Skip to main content Skip to main navigation menu Skip to site footer.
Nigerian Oil and Gas Industry Content Development Act. Requirement for succession Plan. Allowance for expatriate position. Approval of Board for.
Local sourcing. The new law seeks to increase indigenous participation in the oil and gas industry by prescribing minimum thresholds for the use of local services and materials and to promote the employment of Nigerian staff in the industry. The Local Content Act derives from the Nigerian Content Policy which seeks to promote active participation of Nigerians in the petroleum sector without compromising standards. The policy also focuses on the promotion of value addition in Nigeria through the utilization of local raw materials, products, and services in order to stimulate growth of indigenous capacity. All regulatory authorities, operators, contractors, subcontractors, alliance partners and other entities involved in any project, operation, activity or transaction in the Nigerian oil and gas industry are required to consider Nigerian content as an important element of their projects.
As noted in the NOGICD Act, the NCDMB is required to, inter alia , supervise, coordinate, administer, monitor and manage the development of the quantum of composite value added to or created in the Nigerian economy through the development of capacity and capabilities by the deliberate utilization of Nigerian human, material resources and services in the Industry. With the outbreak of the COVID pandemic and the protectionist and curtailment policies introduced by different countries to protect their citizens and economies, the need to further enhance Nigerian content development not just in the Industry but other sectors of the economy for the overall development of the Nigerian economy is now critical. The Senate Bill has now been referred to the Senate Committee on Local Content for further legislative work in line with the legislative process of law making.
The upstream oil sector in Nigeria since the discovery of oil in the s has been dominated by international oil companies. To revise this situation and learning from the experience of countries with strong representation for indigenous local participation such as Norway and Brazil, Nigeria adopted the Marginal Fields Programme MFP allocating marginal oil and gas fields to Nigerian enterprises. The main aim of this joint action is to advance local participation in the oil industry, further liberalise the oil sector and create greater opportunities for jobs and entrepreneurship by Nigerians. This paper considers the potential of the MFP and the Act on achieving these objectives. Local content and the marginal fields programme: challenges for indigenous participation in the Nigerian oil industry.
Awe, S. The drive of Nigerian government to boost economic activities through local capacity utilisation, human capital development and empowerment of indigenous companies resulted in the implementation of Nigerian content development in the oil and gas industry which was previously exclusive to the multinationals. The Nigeria Oil and Gas Industry Content Development Act of provides the legal framework to facilitate and promote mandatory participation of companies owned by Nigerians in the high-risk and high-cost petroleum industry. Prior to the enactment of the act, insignificant number of Nigerian companies had the financial strength and technical know-how required to be competitive in the petroleum sector compared with the well established multinational operating and service companies. These factors made compliance with the requirements of the act a daunting challenge for the sector. Historically, The Shell Petroleum Development Company SPDC has played important roles in the development of various aspect of petroleum industry in Nigeria owing to its visionary leadership position in the sector. This disposition of the company to NCD ensured that by the time the act was enacted in , competent local contractors in drilling operations, production maintenance, facilities construction and so on had been developed.
We provide below, another update on the operation of the law and the events that are likely to shape its success in the years to come. At the workshop, the Senators highlighted the urgent need to:. We expect the upper house to follow up this initiative with amendment to the law Act to reflect the proposed changes. However, any proposed amendments to the NOGICDA should be exposed to all the stakeholders to ensure that their view points are considered before enactment of the amended legislation. Click to download and read the full issue on this newsletter. All rights reserved.
The Bill was submitted to the House of Representatives on 18 December for its first reading and has made slow legislative progress since and which seems likely to slow further as the Government tackles the effects of Covid and the oil price crash.. The Act established a legal framework for the development of local content requirements in the oil and gas sector in Nigeria. The Bill has two main new functions: 1 it broadens the existing local content requirements for the oil and gas sector; and 2 it implements a similar regime for the ICT, power, solid minerals and construction sectors. Among other things, the Board is responsible for evaluating and approving Nigerian content plans and reports submitted by operators and, in conjunction with the Minister of Petroleum, making regulations establishing minimum standards. Penalties : penalties for non-compliance now include five years imprisonment in addition to a fine of fifteen per cent of the project sum. From the draft of the Bill we have seen, there are some important changes from the Act including the end of charging of the content development levy and the Board is to instead receive funding from the Government however the power and solid mineral industries will face content levies.
This Act provides for the development of Nigerian content in the Nigerian oil and gas industry, Nigeria content plan, supervision, coordination, monitoring and implementation of Nigerian content.
The Act has been instrumental to the promotion of the development and utilization of indigenous capacities in Nigeria, and we expect that the progress made will be consolidated for greater impact in the years to come. The Bill seeks to, among others, extend the application of the local content principles and philosophy to the following key sectors of the economy - Information and Communications Technology, Power, Solid Minerals, and Construction. We are reviewing the Bill and will issue a detailed newsletter on it in due course. In the interim, it is important that the industries that may be impacted by the new legislation closely follow this development.
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Increasing globalisation has made it even more imperative for countries to 'validly' protect their economies through strategic initiatives including promoting local content LC and import substitution.Lovergirl227 15.12.2020 at 09:29
AN ACT TO PROVIDE FOR THE DEVELOPMENT OF NIGERIAN CONTENT IN THE NIGERIAN OIL. AND GAS INDUSTRY, NIGERIAN CONTENT PLAN.