NCDMB moves to eliminate middlemen in oil sector contracting

The Nigerian Content Development and Monitoring Board (NCDMB) has disclosed plans to eliminate intermediaries in Nigeria’s Petroleum sector, through a harmonised contractor grading system.

Speaking at the flag off the the 2026 Nigeria Oil and Gas (NOG)Energy week in Abuja on Monday, Felix Ogbe, Executive Secretary of NCDMB, said the exercise would introduce a harmonised five-class grading system for contractors, replacing the different classification models currently operated by various industry regulators.

Representing Ogbe, Abayomi Bamidele, Director of Capacity Building, at NCDMB explained that the new framework was jointly developed with the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), NipeX, Petroleum Technology Association of Nigeria (PETAN), Oil Producers Trade Section (OPTS) and other industry stakeholders in line with the Presidential Directive on Local Content Compliance.

He explained that the initiative would ensure that only companies with proven technical and operational capacity secure contracts, while genuine Nigerian manufacturers and service providers gain direct access to opportunities in the sector.

He said, “Currently, a company can be graded differently by NCDMB and NipeX. With this harmonisation, everyone will work with one classification system, ensuring consistency across the industry.”

Ogbe explained that the Board would begin a nationwide joint capacity audit in the third quarter to physically verify facilities and capabilities of service providers rather than relying on documents or claims submitted online.

According to him, the exercise would expose companies without genuine operational capacity and eliminate middlemen who secure contracts only to subcontract them to firms with actual facilities.

“It is painful when a company that owns the assets and manufacturing facilities ends up becoming a subcontractor to someone who merely won the contract without the required capacity. This initiative is designed to correct that.

“We must know whether local companies have the capacity to execute these projects. Where the capacity exists, Nigerians should benefit. Where gaps remain, we will know exactly where intervention is required.”

Ogbe stressed that the Board remained committed to achieving its target of 70 per cent Nigerian content but noted that the next phase of implementation must move beyond compliance to capacity expansion.

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He observed that although Nigeria’s local content performance had grown from less than five per cent to about 61 per cent since the enactment of the Nigerian Oil and Gas Industry Content Development Act, many local manufacturers still operate below capacity because of limited market opportunities, technology gaps and financing challenges.

“Capacity expansion can only happen when businesses are assured of patronage. There is no point establishing manufacturing facilities if there is no offtake.”

The Board also announced several initiatives to improve ease of doing business, including new guidelines for obtaining the Nigerian Content Equipment Certificate (NCEC), an online escalation platform for complaints, the registration of Nigerian Content Training Providers and a compliance certificate for the Nigerian Content Development Fund (NCDF).

Ogbe however warned companies against defaulting on statutory NCDF contributions, saying compliance would increasingly determine access to regulatory services.

He further disclosed that more than 20,000 Nigerians had already registered under the Board’s Field Readiness Training Programme, with digital skills emerging as the most sought-after area of training.

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Also speaking at the event, Wemimo Oyelana, Portfolio and Country Director of DMG Nigeria Events, explained that Nigeria’s local content policy had evolved into a global reference point after increasing indigenous participation in the oil and gas industry from below five per cent to over 61 percent.

“We must continue investing in the domestication of technology, moving beyond assembly and fabrication towards genuine research, design and innovation.”