All posts tagged Nigerian Oil and Gas Industry Content Development

Two Percent Is Too High for Operators to Pay Now, NCDMB Pleads

The Nigerian Content Development and Monitoring Board (NCDMB) and key organisations in the country’s oil and gas industry – the Petroleum Technology Association of Nigeria (PETAN), Petroleum Contractors Trade Section (PCTS), Oil Producers Trade Section (OPTS) and the Nigeria LNG Ltd have advised against increasing the percentage of the Nigerian Content Development Fund (NCDF) from the current 1% to 2% as proposed in the amendment of the Nigerian Oil and Gas Industry Content Development (NOGIDC) Act.

The NCDF is deducted from the value of contracts awarded in the oil and gas industry and was pegged at 1%  by the NOGICD Act of 2010.

The organisations canvassed this position in separate presentations they made last Monday in Abuja at the two-day public hearing organised by the Joint Senate Committee and House of Representatives Committee on Nigerian Content Development and Monitoring.

The NCDMB argued that the 1% NCDF deduction should be maintained, “given the pressure that the global oil and gas companies are facing with cost escalations and price reductions in the industry. With prudent management of the NCDF and the full cooperation of the operating companies, we believe Local Content shall continue to operate efficiently and grow.”

The public hearing is focused on three proposed legislations, namely the Bill for an Act to amend Nigerian Oil and Gas Industry Content Development Act, Cap 2, 2010 and other maters connected thereto and  the Bill for an Act to enact Nigerian Local Content Act for the development, regulation and enforcement of Nigerian Content in all sectors of the Nigerian economy except Oil and Gas Industry Sector and for related matters. The third legislation seeks to repeal the NOGICD Act and enact Nigerian Local Content Development and Enforcement Commission Act and establish the Nigerian Local Content Development and Enforcement Commission.

The NCDMB also responded to the proposed new provision to earmark 0.5%  of gross revenue of oil and gas companies for research and development, saying that the Board welcomes it on the condition that the money would be for the operator’s own utilization. The Board also supported the proposal by the amendment to add Naira to the Benchmark Currency for Local Contracts “This means a paradigm shift from the dollar-denominated provision to a bi-currency model,” the Executive Secretary explained.



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