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Tag: Content Act

  • Local firms contravene Content Act, says Wabote

    The Executive Secretary, Nigerian Content Development and Monitoring Board (NCDMB), Simbi Wabote, has said local firms flout the provisions of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act more than international oil companies (IOCs).

    He is surprised that indigenous operators who benefited from the Act are circumventing it.

    The NCDMB chief spoke with reporters in Lagos at the weeked.

    On the forthcoming Nigerian Oil and Gas Opportunity Fair (NOGOF 2019) holding in Yenagoa, Bayelsa State capital on April 4 and 5, he said the fair had as theme ‘Maximising investments in the Nigerian oil and gas industry for the benefits of the Nigerian people.’

    On the level of compliance with the Act by the IOCs, National Oil Company and the indigenous oil companies, Wabote said, among the three, the IOCs have the highest level of compliance.

    He said: “I can categorically tell you that in terms of compliance from where I sit, the IOCs are the most compliant with the NOGIC Act to a large extent compared to the indigenous players. If there are people who flout the Act, they are the indigenous players who have benefitted from the Act.

    “When you put the measure of compliance between the IOCs and the indigenous operators, I see the clear tendency by the indigenous operators to want to circumvent the provisions of the Act, which honestly to me is an irony. People who benefitted from a process are now the ones who are actively working to see how they can circumvent the Act.

    “In terms of compliance, if you compare the international oil companies with the NOC as well as the indigenous players, the IOCs are on top of compliance because their corporate governance structure is also very strict because they also go through international scrutiny, so they try as much as possible to comply.”

    On the strategy adopted to promote compliance, Wabote said: “Our strategy has always been a pragmatic approach to implementation of the Act. We don’t read the Act like a bible. We have to compare between existing capabilities and capacities and ask; are they available at all and if they are, do they address a particular challenge? When do we build capacity up? Are we going to build them in a couple of years’ time? Don’t forget that oil and gas is the mainstay of our economy and if we don’t manage it properly, we will shut down businesses as well as  our future as a country.

    “So, we use a pragmatic approach in terms of implementing the Act itself. And we made tremendous progress compared to other sectors, be it construction or information technology. Today, every other sector wants to model its local content implementation to that of oil and gas sector which we are also actively supporting them to do.”

  • Indigenous producers pledge compliance to Content Act

    •To sign SLA with NCDMB

    Members of the Indigenous Petroleum Producers Group (IPPG) have pledged to support and comply with the provisions of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act.

    To cement their commitment, the local operating companies will sign a Service Level Agreement (SLA) with the Nigerian Content Development and Monitoring Board (NCDMB), and this will guide the submission and management of statutory reports between the parties.

    The new SLA, akin to the type signed between the Board and the Nigerian Liquefied Natural Gas Company (NLNG) in May 2017, will commit members of the IPPG to complying with the Nigerian Content Act while the Board will keep to a definite response time for reviews and approvals of contracting documentations. The SLA will take into consideration the capacity of the indigenous producing companies and provide necessary concessions as may be necessary.

    These resolutions were reached at a meeting between the Executive Secretary, NCDMB, Simbi Wabote and members of the IPPG in Lagos last Wednesday.

    The independent producers also promised to partner the Board to equip the Petroleum Technology Development Fund’s Vocational Training facility in Port Harcourt, Rivers State, for the purposes of imparting key skills that are currently lacking in the industry.

    Wabote explained at the meeting that indigenous producers were products of the Nigerian Content Policy hence, they needed to work with the Board to take the implementation to the next level.

    He stressed that Nigerian Content Act was not applicable to only foreign companies, but to all players in the oil and gas industry. “Some Nigerian companies assume erroneously that being wholly indigenous makes them complaint. But local content extends to employment, procurement, training, among other things,”he said.

    The Executive Secretary further challenged the indigenous producers to partner the Board to develop Research and Development Centres of excellence in-country so that problems encountered in their operations can be resolved locally. “The international operating companies have huge research and development (R&D) facilities in their home countries. We can only set up R&D centres in Nigeria with the support of indigenous producers.”

    He also tasked the companies on the remittance of Nigerian Content Development Fund’s (NCDF) deductions. He reiterated that the Board will soon commission third-party forensic audit to track and recover due payments on the NCDF.

    Chairman of IPPG, Mr. Ademola Adeyemi-Bero, pledged the readiness of the members to comply with the provisions of the Nigerian Content Act. “We want to participate in the Nigerian Content journey and we are ready to engage with the Board to take our projects to the next level,” he said.

    He further explained that IPPG was constituted by 25 indigenous operators, including joint venture partners of the Nigerian National Petroleum Corporation (NNPC), marginal field operators and indigenous sole risk operators. According to him, “we ensure corporate governance among ourselves, help to put a respectable face to indigenous producers and offer government a credible platform to engage. We account for between 12/25 per cent of Nigeria’s crude oil production”.

  • Companies lack power to enforce Content Act, says court

    An Edo State High Court in Benin has held that Nigerian companies lack power to enforce the provisions of the Oil and Gas Industry Content Development Act, 2010 against international petroleum producing companies operating in the country.

    The court ruled in a case brought by CMES Flange and Fittings Limited against three international oil producing companies – Shell, Chevron and Mobil.

    Chief Judge of the State, Justice Esohe Ikponwen, said the plaintiff had no locus standi to bring action against the companies for noncompliance with the provisions of the Act.

    He said the Act already provided for mechanism of supervision, coordination, monitoring and implementation  of its provisions  with the establishment of the Nigerian Content Monitoring Board in section 69 of the Act.

    Besides, he held that the power to institute a suit for breach of its provisions resides with the monitoring body only.

    The Court also agreed with the submission of the defendants’ counsel ,Dr Momodu Kassim-Momodu, that the plaintiff did not disclose any reasonable cause of action against the international petroleum companies.

    The court held that it lacked jurisdiction to determine the suit against the oil companies, especially as there was no evidence before the court that the indigenous company bided for any contract with any of the three petroleum companies; or that the international companies have been awarding  contracts to only foreign contractors.

    The court also agreed with the defendants that since none of them resides or does any business in Edo State, the High Court of Edo State was devoid of the territorial jurisdiction to entertain the suit.

    The court also upheld the defendants’ argument that the failure of the claimant to comply with the mandatory provisions of Section 97 of the Sheriff and Civil Processes Act by endorsing the Writ of Summons as specified in the law rendered the Writ of Summons fundamentally defective and therefore null and void.

    The judge frowned at the filing of the case in the State High Court instead of the Federal High Court, stating that it is the Federal High Court that has jurisdiction over oil and gas matters.

    A Benin based indigenous company -CMES Flanges and Fittings Limited, in a suit brought by its counsel, LI T Erhabor, claimed that Shell, Chevron, and Mobil did not comply with the Nigerian Content Act in respect of contracts for provision of flanges.

    The company alleged that the defendants are mandated to carry out all fabrication and welding activities in Nigeria, saying that they set up a factory in Benin City to produce flanges, yet the trio of Shell, Chevron and Mobil have refused to patronise the company.

  • Content Act to cover power, other sectors, say Reps

    The House of Representatives has said it’s work on the bill that would extend the Nigerian Content Act to other key sectors of the economy such as power, construction, information communication technology and telecommunications is to enable Nigerians enjoy the sectors.

    Members of the House of Representatives Committee on Local Content led by its Chairman, Hon. Emmanuel Ekon, stated this when the committee paid  an oversight visit to the Nigerian Content Development and Monitoring Board’s (NCDMB) premises and project sites in Yenagoa, Bayelsa State.

    The Committee chairman said the first reading on the bill to extend the Nigerian Content Act to other key sectors has been passed, adding that the House members currently are fine tuning it. “I believe the bill will be passed this year,” Ekon added. He noted that violation of Local Content Act was more prevalent in the construction sector than the oil and gas sector.

    The committee commended the NCDMB for its diligent implementation of the Nigerian Content Act,  speedy execution of its headquarters building and the Polaku pipemill projects located in Bayelsa State.

    Speaking at the Polaku pipemill site, Ekon stated that the location met all requirements for citing such a facility including proximity to natural gas needed to generate electricity for the plant’s operations, access to road, which is a driver for transporting raw materials and finished products.

    He dismissed insinuations that the Board was acting beyond its mandate by promoting the pipemill, insisting that the Nigerian Oil and Gas Industry Content Development (NOGICD) Act empowered the Board to woo investors and prepare locations especially difficult terrains so that prospective investors would be convinced to commit their funds.

    After tour of the projects, Ekon promised that the House of Representatives would pass the bill extending the Nigerian Content Act to other key sectors of the economy so that Nigerians will enjoy the benefits. He also hailed the Board and its main contractor, MegaStar, for the speedy execution of the building project.

    “I was here when this land was acquired in 2015. Then, this place was bare ground. It’s not even up to two years and eight floors are already standing. We need to sell construction companies like this because it is 100 per cent indigenous. This company has invested resources in machines, personnel and construction equipment. Nigerians, multinationals and the Federal Government should patronise these kinds of companies,” he said

    NCDMB Executive Secretary, Simbi Wabote, in his welcome address, explained to the Committee that the Board’s mandate hinged on promoting, monitoring and evaluating Nigerian Content compliance in the oil and gas industry and serving as a catalyst to attract and drive needed investments so as to grow the economy and create jobs.

    Wabote restated the Board’s preparedness to assist any local or foreign investor seeking to develop facilities, stressing that the Nigerian Content Act provided that goods manufactured in-country would always get patronised by the industry ahead of foreign alternatives.

    On the Polaku pipemill, he stated that the Board had completed the sand filling of the site, conducted environmental impact assessment (EIA) and embarked on the construction of the access road, adding that the Board entered into a Memorandum of Understanding (MoU) with Titan Steel of China, who are expected to commence construction and complete the project by 2019.

    On the modular refineries in oil producing states – being encouraged by the Federal Government,  Wabote stated that the Board’s initiatives seek to ensure that the refineries get fabricated and assembled in Nigeria as against being imported from overseas. He also solicited support from the legislature to ensure that indigenous operating companies and the Nigerian National Petroleum Corporation (NNPC) comply fully with the provisions of the Nigerian Content Act.