EXPLAINER: The Nigerian oil and gas industry content bill

The House of Representatives Committee on Nigerian Content Development & Monitoring is scheduled to hold a one-day public hearing to deliberate on important Bills on non-oil and gas; and, oil and gas referred to it.

The Committee, led by Rep. Boma Goodhead (PDP, Rivers) said the public hearing will take place on Thursday, 18 April 2024  at 12 noon in the House of Representatives New Wing Extension, Conference Room 034, Zero floor, National Assembly Complex, Abuja.

As a prelude to the public hearing, OrderPaper presents an analysis of one of the bills aimed at promoting local content development in Nigeria’s non-oil & gas and oil & gas sectors.

Everything you need to know about the bill

Bill Title

An Act to Repeal the Nigerian Oil And Gas Industry Content Act No. 2, 2010 and to Enact the Nigerian Oil and Gas Industry Content Act to establish the Nigerian Content Development and Monitoring Board and to provide for legal framework, structures and programmes for the strengthening of Nigerian Content in the Nigerian Oil and Gas Industry and for Related Matters.

Sponsors

Lead sponsor – Hon. Boma Goodhead (PDP, Rivers); supported by 35 other Rep members.

 Objectives of the Bill:

To establish and maintain programmes for the overall development of Nigerian Content in the Oil and Gas Industry.

The encouragement of the transfer of skills and technology to Nigerians in the oil and gas industry

Ensure international competitiveness of Nigerian domestic businesses in the oil and gas sector of the Nigerian economy.

To ensure the active participation of Nigerians in the development of the oil and gas industry.

The development of the domestic capacities in the value chain of oil and gas exploitation in Nigeria.

Key Elements of The Bill

Establishes the Nigerian Content Development and Monitoring Board

The Board:
(a) shall be a body corporate with perpetual succession and a common seal
(b) may sue and be sued in its corporate name and
(c) acquire or lease any interest in land or other property.

The Headquarters of the Board shall be Yenegoa, Bayelsa State.

Preference for Nigerian Content in the Oil and Gas Sector

Nigerian companies and/or firms that demonstrate the capacity to effectively and efficiently undertake contracts are to get it.

There shall be exclusive consideration to Nigerian service companies and Nigerian personnel with the capacity to execute tasks in the Nigerian oil and gas industry.

Considerations are to be granted to manufacturers of Made-in-Nigeria goods, contractors and suppliers, and Nigerian professionals.

A Made-in-Nigeria good or service to be supplied by a Nigerian citizen or company shall not be rejected solely on grounds of quality (if the quantum of Nigerian content in the good or service is not less than 50%)

Support for Nigerian Sub-Contractors

Foreign firms must subcontract at least forty per cent of the contracted works to an indigenous Nigerian company or indigenous Nigerian companies.

The foreign company that subcontracts part of its contracted works shall be responsible for the performance of the contract.

Pushes for a Nigerian Content Development Plan

The Plan contains the expected total quantity and quality of goods and services that may be required for the execution of projects and the qualifications required from Nigerians to be engaged in the execution of the project.

Foreign firms must implement the Nigerian Content Development Plan by foreign firms

Companies participating in any tender bidding in Nigeria shall submit a Nigerian Content Development Plan to the relevant Board along with the Bid or application and the Board may prescribe fees for the processing of the Nigerian Content Development Plan.

RED FLAGS

Local content development is preferred over quality! This could lead to accidents due to poor implementation of contracts and waste.

The contractors lose on both ends of the stick if they still have to be responsible for a shoddy job by a sub-contractor dumped on them.