Nigeria’s Oil and Gas Industry Content Development Act of 2010 mandates that companies in the oil and gas sector prioritize locally sourced goods, services, and manpower. The goal is to boost Nigerian participation, develop local capacity, and create jobs. The Nigeria Local Content Development and Monitoring Board (NCDMB) monitors compliance.
The Act aims to maximize economic benefits by ensuring a larger share of oil and gas revenue remains within Nigeria through local investment and employment. Foreign companies are not excluded but are required to involve Nigerians in their company formation for upstream operations.
NNPC, under the leadership of Mele Kyari, is committed to the Act’s objectives. Kyari views local content as crucial for the oil and gas sector’s development and Nigeria’s economic growth, aligning with the Presidential Directive on Local Content Compliance Requirements 2024.
NNPC has aligned with the NCDMB to increase indigenous participation in the sector’s value chain, enhance job creation, and develop in-country capacities. Strategic initiatives have been introduced to enhance local firms’ capabilities.
NNPC has supported the Nigerian Content Intervention Fund (NCIF) and the Nigerian Oil and Gas Parks Scheme (NOGaPS). The company restructured NNPC Exploration and Production Ltd (NEPL) and positioned NNPC Engineering and Technical Company LTD (NETCO) as a full engineering company. Local content in the oil and gas sector increased from 26% in 2017 to 54% in 2022.
Kyari advocates prioritizing local content as a key element of national development. He believes all energy sector operators should make local content a key policy.
The Tinubu administration has established an Energy Office to implement reforms to position Nigeria as a leading global investment destination. NNPC plays a critical role in enforcing the NOGICD Act by monitoring compliance and supporting local capabilities through training programs.
NNPC has a Nigerian Content Division and issues directives to industry stakeholders to comply with the Act. It works with the NCDMB to enforce compliance and actively supports local content suppliers.
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) streamlines regulatory compliance processes, providing a clear framework for standards and best practices, enhancing the ability of indigenous companies to participate in upstream projects.
The Nigerian Local Content Act has allowed local companies to secure contracts and fostered relationships between international and local companies. The NCDMB projects local content in the oil and gas sector to rise to 70% by 2027. NNPC is committed to promoting local content in the energy sector.
Credit: Thisday
