Nigeria Declassifies Makeshift Investors in Oil & Gas Sector

Samuel Mobolaji

The federal government has taken major action to protect its oil and gas sector from briefcase laundering entities without a clear plan and model for reinvesting or adding value to the economy.

With a new policy now being implemented, only investors with a verifiable local content plan are required to operate in the industry.

The Nigerian Content Development and Monitoring Board (NCDMB) which announced this development on Monday said, it had eliminated middlemen from the oil and gas industry value chain and contributed to shortening the oil industry contracting cycle to six months.

This, it said, was courtesy of the three Presidential Directives on Local Content operations issued by President Bola Tinubu in March 2024.

The executive secretary of NCDMB, Engr. Felix Omatsola Ogbe stated this in Lagos while speaking at a breakfast meeting with some media executives.

He confirmed that, NCDMB had complied fully with the Presidential Directive on Local Content Compliance Requirements, 2024 (EO 41), which sought to ensure that only local service companies that have domiciled proven capacities and capabilities can participate in oil and gas tenders.

He also indicated that NCDMB has reduced its touch points and fast-tracked projects approval processes, in compliance with the Presidential Directive on Reduction of Petroleum Sector Contracting Costs and Timelines, 2024 (EO 42).

The Presidential Directives and the Board’s compliance, he said, are geared to attract new international and local investments, encourage speedy development of oil and gas projects and improve the Nigerian economy.

The Executive Secretary hinted on plans to launch a major initiative tagged “Back to the creeks.” This policy will take the impact and contribution of local content implementation to oil producing communities and other hinterlands across the country.

Responding to questions from journalists, the NCDMB boss dismissed insinuations that local content implementation increases the cost of producing crude oil in Nigeria.

He clarified that the major drivers of increased cost of crude oil production are downtime and disruptions in operations caused by community issues or technical problems.

Other challenges responsible for extraneous costs include the cost of providing security and the activities of briefcase contractors, he said.

On the Board’s strategies for enabling growth of the industry, Ogbe stated that, NCDMB was working intently to create an enabling environment for international oil companies to take final investment decisions for new projects and was evolving policies to support indigenous oil and gas service companies.

Responding to a question on insurance, the NCDMB boss promised to revive the insurance services guidelines the Board signed in June 2022 with the National Insurance Commission (NIACOM), which would oblige the Nigerian oil and gas industry to patronize the local insurance sector.

He acknowledged that the success of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act and the Nigerian Content 10-year strategic roadmap depends largely on public communication, awareness and support from key oil and gas stakeholders.

Other senior management of NCDMB that attended the breakfast meeting included the Director Corporate Services and Capacity Building, Dr. Ama Ikuru; Director Monitoring and Evaluation, Mr. Abdulmalik Halilu; Director Projects Certification and Authorization, Engr. Abayomi Bamidele and Director, Legal Services, Mr. Naboth Onyesoh, Esq.