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NOGICD Act: NCDMB decries high rate of non-compliance by indigenous firms



NOGICD Act: NCDMB decries high rate of non-compliance by indigenous firms


The Nigerian Content Development and Monitoring Board (NCDMB) on Thursday decried  the high rate of non-compliance to the Nigerian Oil and Gas Industry Content (NOGIC) Development  Act by indigenous oil firms.

Mr Simbi Wabote, Executive Secretary of NCDMB, told the News Agency of Nigeria in Lagos that the International Oil Companies (IOCs) were the most compliant with NOGICD Act.

Wabote spoke with NNN on the sideline of a news conference on the forthcoming Nigerian Oil and Gas Opportunity Fair 2019 (NOGOF 2019).

NNN reports that the Nigerian Oil and Gas Industry Content Development Act signed into law on April 22, 2010, is designed to enhance participation of Nigerians and Nigerian companies in the country’s oil and gas industry.

With the promulgation of the Act, the government  clearly established its intention to increase indigenous participation in the industry in terms of human, material and economic resources.

It prescribes minimum thresholds for the use of local services and materials and to promote the transfer of technology and skill and provides that Nigerian independent operators be given first consideration in the award of oil blocks, oil field licenses, oil lifting licenses and all projects contracts (Section 3(1)).

It also notes that there shall be exclusive consideration to Nigerian indigenous service companies which demonstrate ownership of equipment, Nigerian personnel and capacity to execute contracted work (Section 3(2)).

For the purposes of the Act, a Nigerian company is defined as:“A company formed and registered in Nigeria in accordance with the provisions of the Companies and Allied Matters Act with not less than 51 per cent equity shares by Nigerians” (Section 106).

“The IOCs are the most compliant of the NOGICD Act 2010 compared to indigenous players;  if there are people who flout the Act, they are the indigenous players (oil firms) who have benefited from the Act.

“When you compare the compliance level between the IOCs and the indigenous operators, there is clear tendency by the indigenous operators to want to circumvent the provisions of the Act, which to me, is an irony.

“People who benefited from a process are now the ones who are actively working to circumvent the Act; the IOCs’ corporate governance structure is very strict.

“They also go through international scrutiny, so, they try as much as possible to comply,” he said.

On the strategy adopted by the NCDMB to promote compliance, Wabote said the board had put in place a pragmatic approach to the implementation of the Act.

“We have to compare between existing capabilities and capacities; are they available at all or available now to address a particular challenge.

“When do we build capacity up, are we going to build them in a couple of years’ time because, don’t forget that oil and gas is the mainstay of our economy.

“If we don’t manage it properly, we will shut down businesses as well as shut down our future as a country.

“So, we use a pragmatic approach in terms of implementing the Act itself and so far, we have made tremendous progress compared to other sectors, be it construction or Information Technology,’’ he said.

On the difference between Practical Nigeria Conference (PNC) and NOGOF, he said: “PNC focuses on policy thrust and direction of the oil and gas sector while NOGOF remains a platform for sharing potential opportunities in the oil and gas.

“NOGOF is a very distinct platform that we use to manage various stakeholders’ goals; there is no overlap as long as I am concerned,’’ Wabote said.

NNN reports that NOGOF 2019 Fair is expected to take place on April 4 and April 5 in Yenegoa, Bayelsa.