Victor EzejaExecutive Secretary, Nigerian Content Development and Monitoring Board (NCDMB), Engr. Felix Omatsola Ogbe, has debunked claims that the implementation of local content policy increases the cost of crude oil production in Nigeria.
Engr Ogbe explained that the major factors affecting the cost of crude oil production in the country include technical problems, downtime and disruption of operations, insecurity in oil-producing areas and activities of briefcase contractors among others.
Join our WhatsApp ChannelThe NCDMB Executive Secretary, who spoke at a breakfast meeting with media executives in Lagos on Monday, stressed that the local content policy is a national agenda targeted at encouraging the development and utilization of human and material resources to boost local production in the Nigerian oil and gas industry and also increase the industry’s contribution to the country’s Gross Domestic Product (GDP).
The Nigerian Oil and Gas Industry Content Development (NOGICD) Act signed into law in 2010 aims to increase the capacity of indigenous companies to participate in the industry, thereby boosting the sector’s contribution to the economy.
Specifically, the objectives are to increase participation of local or indigenous companies by way of taking active roles in the oil and gas sector; boost the industry’s contribution to the GDP and provide employment opportunities for Nigerians.
Some of the strategies designed by the NCDMB which is spearheading the local content implementation include enhancing research and development (R&D) in the oil and gas industry overtime; the Nigerian Content Development Fund set up to support local content development and other activities geared towards increasing local content.
Engr Ogbe clarified that the Board is keen on ensuring that companies working in the Nigerian oil and gas industry, including international oil companies (IOCs), must add value to the country’s economy.
He further stated that NCDMB is focused on creating an enabling environment for IOCs and indigenous oil and gas service firms to operate smoothly and deliver on key projects.
The NCDMB Executive Secretary also highlighted the importance of the three Executive Orders issued by President Bola Tinubu earlier this year on local content activities.
Prime Business Africa recalls that President Tinubu had on 28 February 2024 signed three Executive Orders aimed at improving the investment climate and positioning Nigeria as the preferred investment destination for the Oil and Gas sector in Africa.
The Orders are:
- Oil and Gas Companies (Tax Incentives, Exemption, Remission, etc.) Order, 2024
- Presidential Directive on Local Content Compliance Requirements, 2024
- Presidential Directive on Reduction of Petroleum Sector Contracting Costs and Timelines, 2024
According to Engr Ogbe, these Presidential Directives have helped in shortening contracting cycle in the oil and gas industry to six months and removing middlemen from the industry’s value chain.
He affirmed that NCDMB had fully complied with the Presidential Directive on Local Content Compliance Requirements, 2024 (E41).
READ ALSO: Adoption Of Local Content Policy Will Boost Africa’s Energy Security, Economic Development – NCDMB
Ogbe also disclosed that the Board has put in place a system that fast-tracks approval processes for projects in the industry, in compliance with the Presidential Directive on Reduction of Petroleum Sector Contracting Costs and Timelines, 2024 (EO 42).
He also noted that the success of the NOGICD Act and the Nigerian Content 10-year strategic roadmap depends largely on public awareness and significant support from oil and gas stakeholders.
The 10-year strategic roadmap unveiled in 2017, aims to achieve 70 per cent local content by 2027. As at December 2023, the Board reported that local content in the industry was at 54 per cent.
Victor Ezeja is a passionate journalist with six years of experience writing on economy, politics and energy. He holds a Masters degree in Mass Communication.
