COMPLYING WITH THE NIGERIAN OIL AND GAS INDUSTRY CONTENT DEVELOPMENT (NOGICD) ACT.
The Nigerian oil and gas industry has been a vital contributor to the country's economy for decades. However, Nigeria, like most resource-rich countries, faced the challenge of limited local participation in the oil and gas industry. This led to the creation of a legal framework for local content development to promote the inclusion of Nigerian companies and workforce in the industry.
The Nigerian Oil and Gas Industry Content Development (NOGICD) Act is a legislative framework that was established in 2010 to promote Nigerian participation in the oil and gas industry. It was enacted to create an enabling environment for Nigerian companies and personnel to participate and thrive in the industry, as well as to develop the capacity and skills of Nigerian personnel.
One key provision of the Act is that a minimum percentage of Nigerian content must be deployed in all aspects of the oil and gas industry, ranging from exploration to production, including the supply chain. Currently, the minimum is set at 70%, with a target of 100% in the long term.
The NOGICD Act provides that Nigerian companies and personnel shall receive first consideration in all oil and gas contracts in Nigeria.
The Act requires oil and gas companies to submit plans for the training and development of Nigerian personnel. It also mandates that Companies operating in the oil and gas sector must establish expatriate quotas, a process that determines the maximum number of foreign personnel that a company can employ. The quotas are put in place to encourage the employment of Nigerian personnel. This has resulted in an increased number of Nigerians occupying senior positions in the industry, thereby increasing local capacity and skills.
Furthermore, the NOGICD Act mandates the use of Nigerian goods and services in the industry. Companies operating in the oil and gas industry are required to submit their Nigerian Content Plans (NCP) for their projects, which must outline how the company intends to utilize Nigerian content in the procurement of goods and services, such as construction and engineering. By doing so, it has encouraged the growth of Nigerian companies that provide such goods and services, thereby contributing to the country's economy.
The Act also establishes the Nigerian Content Development Fund (NCDF) as a funding mechanism to support the development of Nigerian content in the oil and gas industry. Companies operating in the industry are required to contribute 1% of their annual operating expenses to the NCDF.