Tough time awaits oil and gas companies that have defaulted in the remittance of the statutory 1 percent of the value of contract won by them to Nigerian Content Development Fund (NCDF).
The Nigerian Content Development Monitoring Board (NCDMB) said they would be handed over to the Economic and Financial Crimes Commission (EFCC) for necessary prosecution as soon as the current forensic audit about the companies was completed.
The statutory contribution is meant to be used to deepen local content development in the oil and gas industry and reduce financial challenges most of the companies are facing because of high-interest rates from banks. The institutionalisation of the contributory fund has helped to increase to 30 percent from 5 percent before the Act came to place.
Local companies have been able to access $160 million of the $200 million of the fund at about 8 percent interest rate, while more applications are still being processed to enable more companies have access to the fund.
Simbi Wabote, executive secretary, Nigeria Content Development and Monitoring Board, who disclosed this at the Nigerian Content Seminar organised by CWC, organiser of Nigeria Oil and Gas Conference and Exhibition in Abuja, said the board was determined to fully recovered all outstanding obligations and ensure compliance by companies operating in the country.
He said a lot of things had been achieved by the agency through the contribution of the 1 percent of contract sums by some companies.
“Non deductions of the statutory fees, non remittance of the amount deducted at source amounts to misinterpretation of Section 104 of the Nigerian Content Act,” he said.
He said the essence of the conference was to use it as opportunity to zero in on key provisions of the Nigerian Oil and Gas Content Development Act to reinforce understanding, provides clarifications and use them to serve as additional training outlet for those that are new to the industry or ignorant of the provisions of the law.
He said he had instances where things he thought were very simple and clear in terms of understanding were usually not as clear, or that some people just deliberately don’t want to understand it and try to do anything to circumvent the Act itself.
“To provide further clarity on various events, the Practical Nigerian Content event used to communicate the status of our strategic initiatives under the 10-year road map that is meant to move the industry from the current Nigerian Content level to 70 percent by the year 2027,” he said.
He said the practical Nigerian content event also serve as platform for oil and gas service providers to broadcast their local capabilities and capacities to industry practioners while operators show case their achievements and plans to broadening local content practice in line with the law.
The Nigerian Oil and Gas Opportunity Fair, he explained, is a platform to project the various opportunities in the funnel from the green fields to brownfields and from mature to new frontiers thereby providing guides for investment outlook and industry positioning.
Also, speaking in respect of the development of local content in the Nigerian Oil and Gas industry, Kayode Akiode, executive general manager, Egina close out/Proawei project, said there was great deal of local content in Egina development.
He said the Egina production had reached its plateau of 200,000 barrels production per day. This has helped Nigeria to achieve 2.3 million barrels per day production.