Oil & Gas: Senate Committee, NCDMB Collaborate To Enhance Local Content Implementation
By William Emmanuel Ukpoju
In a landmark meeting held at the Senate Building in Abuja, the Senate Committee on Local Content engaged in its inaugural interactive meeting with the leadership of the Nigerian Content Development and Monitoring Board (NCDMB), signalling a pivotal collaboration aimed at enhancing the implementation of local content initiatives within Nigeria’s oil and gas industry and related sectors.
The meeting which was chaired by Senator Natasha Akpoti-Uduaghan, the Committee set a tone of cooperation, affirming a commitment to work hand in hand with the NCDMB and other supervised entities to ensure the effective execution of the Board’s mandate for the benefit of Nigerians.
Expressing grave concerns over the nation’s economic challenges, particularly the alarming rise in unemployment rates, Senator Akpoti-Uduaghan emphasized the urgent need to deepen the implementation of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act. She stressed the importance of leveraging the Act to create job opportunities and spur growth across various sectors of the economy.
Key requests made by the Committee include the submission of comprehensive performance reports from the NCDMB, focusing on critical areas such as third-party investments, capacity-building programs, expatriate quota management, and research and development initiatives. Additionally, suggestions for potential amendments to the NOGICD Act were sought to further strengthen its effectiveness.
The Committee did not mince words in criticizing international oil companies (IOCs) operating in Nigeria for their perceived lack of investment in vital sectors such as petrochemicals and manufacturing, in contrast to their counterparts in other oil-producing nations. Senator Akpoti-Uduaghan announced plans to engage IOCs and relevant government agencies to compel them to diversify their investments beyond crude oil extraction.
In response, Engr. Felix Omatsola Ogbe, the Executive Secretary of the NCDMB, expressed gratitude for the cooperative approach adopted by the Committee, assuring full cooperation and transparency from the Board’s end.
While highlighting the Board’s performance, Engr. Ogbe disclosed significant progress towards achieving Nigerian content targets, with reported content levels reaching 54% for the years 2022 and 2023, putting them on track to meet the 70% target set for 2027.
On international oil companies’ model of operation in Nigeria, the Executive Secretary explained that most oil companies have different arms, which include the downstream companies which make such investments in the petrochemical and linkage sub-sectors. He, however, noted that most operating companies in Nigeria do not have such subsidiaries in the country, suggesting that the Board is willing to support home-grown firms that are interested in such endeavours.
He added that the Board lacked the mandate to compel the IOCs to change their business model in Nigeria but was working together with some oil companies to develop the Nigerian Oil and Gas Parks Scheme (NOGaPs), which is designed to manufacture oil and gas equipment and components as well as other manufacturing and research and technology programmes.
The session also shed light on the performance of the Nigerian Content Intervention Fund (NCI Fund) and the Nigerian Content Development Fund (NCDF), underscoring their fundamental role in fostering local participation in the oil and gas industry. According to the Director of Finance and Personnel Management, NCDMB, Dr. Obinna Ofili the NCI Fund is managed by the Bank of Industry (BoI) on behalf of the Board, and US$300m was deposited with the BOI. He explained that the NCI Fund is a portion of the NCDF – which is pooled from the 1% per cent of every contract awarded in the upstream sector of the Nigerian oil and gas industry, as specified in section 104 of the NOGICD Act.
Dr. Ofili also revealed that BoI had loaned out US$330m to 70 qualified oil and gas companies, with the additional $30m accruing from the interest on the loans. He stated that another fund created by the NCDMB is the US$50m domiciled with the Nigerian Export-Import Bank. It is broken into $30m for working capital and capacity building and $20m for Women in Oil and Gas. He indicated that eight firms have accessed the $30m working capital and capacity building fund, while three firms have successfully accessed the Women in Oil and Gas fund. He said: “We want serious-minded women entrepreneurs in the oil and gas industry to step forward and access this fund. That is the only way it can make an impact on the economy.”
Speaking on the proposed amendment of the NOGICD Act, the Director of Monitoring and Evaluation, Mr. Abdulmalik Halilu explained that concerted efforts were made during the tenure of the 9th National Assembly to review the legislation and the Board developed a compendium on areas that it believed should be amended. He promised that the Board would submit the compendium to the Senate so it could become the reference point for further discussions and considerations. In the end, both parties reiterated the importance of collaborative efforts in driving local content development and economic growth within Nigeria’s oil and gas sector, signaling a promising step forward in the nation’s quest for self-sufficiency and sustainable development
