Nigerians Should Be Grateful For The Local Content Law -Fawibe

Ten years down the line, the Local Content Policy in the Nigerian Oil and Gas industry has indeed come a long way.

Before October 2010, when the Nigeria Oil and Gas industry Content Development Bill was enacted into Law, Nigerian Players in the industry found it difficult to get a foothold in Project operations. The result of this was the fact that Nigerian Oil and Gas service companies got little or nothing from the over $20 billion annual industry spend.

But today, the story has taken a positive turn for Nigerians playing on the nation’s hydrocarbon turf.

Dr.  Diran Fawibe is the Chairman/CEO of the International Energy Services Limited (IESL) and major Voice in the Nigerian Oil and Gas industry. He said Nigerians should be thankful to government for enacting such a Law. ‘Oil production started in 1967 and export of Oil began in 1968. You have so many Players in the industry… A lot of Experts have been made to develop the industry. For many years, Nigerians have been producing not less than 2.2 million barrels per day.  While there were times we went up to 2.3/2.4 million barrels per day. Activities that are associated with this level of production is tremendous. But in all of this, Nigerians and Nigerian content were having minimal involvement in the industry… ‘

This prompted the government to probe into the percentage of the spend that is domiciled in Nigeria and how many Nigerians, besides those working for the NNPC and the IOCs were actually participating, effectively, in the enormous volumes of projects going on in the industry. ‘That was when the whole idea of Local  Content was brought up. Hence, the guidelines that for every project being undertaken by in Nigeria a part must be carved out for Nigerian companies.’

He pointed out that, when the Law was not in existence, foreign companies found it a lot easier to circumvent the system. ‘It was easy for them, then,  to come up with all kinds of excuses not to involve Nigerian companies… This was what necessitated the Nigerian government to enact the Law to make it obligatory for the IOCs and other foreign companies to use Nigerian companies and locally made Nigerian goods to execute industry projects. ‘

 

Citing the first schedule of the Local Content Act that insists on particular percentage of Projects implementation that must given to Nigerian companies, Dr.  Fawibe drew attention to the fact that such provisions meant that companies can now be audited along that line. ‘It would then be easy to say, this is the target. Are the targets being met? What are the constraints in achieving the target? ‘

To ensure the Law is effected, enforced and effective, government set up a regulatory agency known as the Nigerian Content Development and Monitoring Board (NCDMB) to oversee the implementation of the Law.

‘The NCDMB is empowered to bring up any case of a company defaulting and sanction such company. ‘Although, the agency does not prosecutorial powers, the IESL boss explained that the agency can bar defaulters from participating in future projects undertaken in Nigeria. ‘Some companies would rally round to plead for pardon, while others took a cue from the sanctioned ones not to breach the Law again. In other words, the sanctions have served as deterrence to discourage circumvention of the Law by companies…’

According to him, the NCDMB has been doing a great job of policing the industry. However, he stated that it is not eureka yet for the Law. For him, the policy is still a work in progress. ‘ He says the agency has been doing a great job in policing the implementation of the Law in relation to the Local Content target. ‘As a matter of fact the targets were reviewed to the point where we can say, for instance, say in a situation we were running on say 50% content or target, we can now say, Nigerians have now developed the capabilities to upgrade to 80-100%.’