Senate Kicks off Amendment of Nigeria’s Local Content Law Act
The Senate on Tuesday began the amendment of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act 2010 sequel to the consideration of a bill seeking to boost local content as well as strengthen the nation’s economy.
The Nigerian Oil and Gas Industry Content Development Act (Amendment) Bill 2020 was sponsored by Senator Teslim Folarin, All Progressives Congress, APC, Oyo Central scaled second reading on Tuesday.
Presenting his debate on the Bill, Folarin said the Bill seeks to amend 38 Sections of the extant Act while introducing six new sections. He hinted that the essence of the bill is to bring the provisions of the sections to be amended into congruence with industry best practices.
He recalled that the Nigerian Oil and Gas Industry Content Act which was passed in 2010 sought to among others, address the then abysmally low level of Nigerian content in the oil and gas sector of the economy; create a regulatory mechanism to monitor and enforce compliance by industry players, and to domesticate substantial part of oil and gas exploration and production activities within Nigeria.
Folarin said, “You will recall that before this Act came into force in 2010, over ninety per cent of the $20 billion spent yearly in the Nigerian oil and gas industry was repatriated abroad.
“This was because a large chunk of the contracts was executed by foreign companies and in foreign facilities. With only a few indigenous players and facilities participating in the contracting process in the industry, Nigerian content was less than five per cent.”
He noted that with the enactment of the NOGICD Act and the establishment of the Nigerian Content Development and Monitoring Board, Nigerians have developed the capacity to carry out a lot of onshore upstream activities.
He said, “There has been a boost in the promotion of indigenous participation and the fostering of technology transfer as reflected in appreciable local growth. Only recently, one of Nigeria’s indigenous oil servicing firms established a 100 million fabrication plant in the Niger Delta region.
Speaking further, the Folarin said “the implementation of the Nigerian Content Fund by the Board has also facilitated the provision of capital and financial support to several indigenous companies.”
According to Folarin, the amendment to Section 11 as captured in the new Bill would give powers to the Minister of Petroleum to review the minimum target level for Nigerian content set in the schedule where the level is considered beyond the capacity of Nigerian companies by the board.
Similarly, the amendment proposed to Section 33 of the Act would streamline and strengthen the process for obtaining expatriate quota to close the gap for current leakages and manipulation by foreign companies.
While Amendments to Sections 37, 38, and 39 in the Bill are to improve the provisions relating to research and development and to ensure proper implementation, while Section 76 is proposed to give the Governing Council of the Board the role of Superintending over the conditions of service of employees of the board.
Section 81 was also introduced to empower the Senate to screen and approve the nomination of the Executive Secretary of Nigeria Content Development and Monitoring Board (NCDMB) before confirmation.
In his contribution, Senator Olamilekan Solomon Adeola, APC, Lagos West said, “this amendment is long overdue, and I want to believe it would stand. The Nigeria Oil and Gas Industry Content Bill should now be Nigeria Industry Content Development Act.”
“Now that we have succeeded in trying to see that local content has come to stay in the oil and gas sector, it is time for us to move to other line sectors which include manufacturing, ICT, construction, and other sectors of the economy.
“The main objective of this particular Act is for two things: for Domestication and Domiciliation. That is the reason ab initio, the local content was set-up.”
The Bill was referred by the Senate President, Senator Ahmad Lawan, to the Senator Folarin led Committee on Local Content for further legislative work and report back at Plenary in four weeks.