Measuring and implementing Nigerian content: Key legal requirements of the local content act 3

Each operator is duty bound to submit to the Board, an annual Nigerian Content Performance Report (the Report) embodying all its activities and projects for the year under review. The Report shall specify the operator’s expenditure, employment achievement, trainings & human capacity development, procurement achievement in terms of volume, tonnage of locally manufactured materials in compliance to the Nigerian Content requirement. The Board has the duty to undertake regular assessment and verification of the Report.

The NOGICD Act requires the Board to organize educational workshops, conferences, seminars, symposia or any other public forum it deems necessary for the benefit of contractors, operators, the public or other stakeholders for the enhancement of the implementation of the provisions of the Local Content Act. 

Evaluation and measurement of Nigerian Content are both necessary and essential for the progressive domestication of local content in the Nigerian oil and gas industry. This fact is aptly captured by the provision of section 106 of the NOGICS Act which defines “Nigerian Content” to mean:

“…the quantum of composite value added to or created in the Nigerian economy by a systematic development of capacity and capabilities through the deliberate utilization of Nigerian human, material resources and services in the Nigerian oil and gas industry.”

This provision suggests a fairly lucid description of how the Act has articulated the specific indicia for the evaluation and measurement of the Nigerian Content development in the oil and gas sector. The following are the evaluation and measurement indicators for the Nigerian content development in the oil and gas industry.

The intendment of the Local Content Act is that the coherent and consistent implementation of its provisions by the NCDMB will progressively lead to value creation or addition. Furthermore, it envisages that the value added to the Nigerian economy should be quantifiable, integrating as well as leveraging the various disciplines, professions, vocations and expertise available among Nigerians for the benefit of the economy. In other words, in addition to being a revenue earner for the government and a source of employment opportunities for Nigerians, activities in the Nigerian oil and gas industry must systematically produce, develop or domesticate relevant skills and capacities among Nigerians as against reliance on expatriates to service the skills and capacity needs of the industry. One of the effects of this will be greater value addition to the Nigerian economy.

dditionally, the crash in the price of crude oil together with the lingering currency crisis in Nigeria makes the case for a more aggressive implementation of the Nigerian Content and not otherwise. Thus, in view of the precarious economic climate in Nigeria, stakeholders in the Nigerian oil and gas industry should be encouraged to re-evaluate industry-related activities so as to identify additional areas or activities which can be further domesticated with relative ease. 

Furthermore, skills and capacities available in-country must be leveraged by the “deliberate utilization of Nigerian resources” to wit; human, material as well as Nigerian services. 

Thus, the two important ways to progressively increase the Nigerian content within the oil and gas industry are: (i) systematic capacity and capability development; and (ii) the deliberate utilization of Nigerian resources.

The existence of a databank and/or data management is one essential infrastructure which the NCDMB has the responsibility to establish for an effectual and systematic domestication of Nigerian content.  This infrastructure is critical for the articulation and aggregation of available local skills, capacities and capabilities for utilization in the Nigerian oil and gas industry. It is an essential infrastructure which will enable the NCDMB to resolve allegations or assertions of the existence or the lack of a given capability in-country. Without a contemporary databank of relevant skills and capacities, the journey to a progressive domestication of the Nigerian content can very easily be derailed by unverifiable assertions of the lack of particular capacities in Nigeria in the Content Plan filed by operators.

Thus, there should be a way to track all the capacity development programmes of both the private and the public sector establishments such as the Petroleum Technology Development Fund (PTDF), State Governments, IOCs, and individual capacity development achievements. There must be a way for the NCDMB, body of Nigerian professionals and the operators in the industry to track and to bring on board, all existing and emerging capabilities for the benefit of the Nigerian economy.

From the foregoing, this paper concludes that considerable progress has been made since the commencement of the Local Content Act in 2010. To this end, the NCDMB, the Petroleum Ministry, industry stakeholders all deserve commendation for the effort made both individually and collectively till date. However, there is a need for additional commitment from all industry actors to ensure that the goal of progressive domestication or development of the Nigerian content is not stalled. The regular interface between the regulators and the industry operators should continue and this should lead to a greater level of information exchanges on ways to fast track the domestication process. Importantly, NCDMB should be supported to consistently improve and building on the database/information bank required for a more meaningful Nigerian content implementation.

Concluded.

Obinna Dike