Oil and Gas Industry Contents Development Act 2010 (Local Content) Law and Challnges in Nigeria

Samuel Dike

doi:10.7176/jrdm/65-05

Abstract

Any policy, law or regulatory framework that adds value to the indigenous host country’s goods, services and human beings has in it the local or indigenous content. An examination of the Oil and Gas Contents Development Act 2010 in Nigeria will show significant progress made in the foray of the hitherto the dark horse – indigenous oil and gas companies into the elite oil and gas class previously `reserved` for the Multinational Oil and Gas Corporations. This was made possible by the emerging local content laws. However, a lifting of the veils of its actual performance, would reveal both latent and patent challenges facing the application of local contents laws particularly in Nigeria., This paper examines the operations of the Nigeran Oil and Gas Contents Development Act 2010, the challenges and possible recommendations on how to bring it in line with the best global practices. This paper found amongst others that infrastructural and capacity development are the power- base to driving effective local content application anywhere but are sadly lacking in Nigeria. It also found that the Nigerian version of the local contents law tilts towards protectionist regime rather than liberal approach and that a synergy of both frameworks is desired for the smooth operations of local content laws in Nigeria. This paper finally concludes that Nigeria can take a cue from other countries such as Norway and Brazil while considering the peculiarities of the Nigerian oil and gas industry. Keywords Oil and Gas: Local contents law and Practices, challenges and recommendations DOI: 10.7176/JRDM/65-05 Publication date: May 31 st 2020

Highlights

INTRODUCTION The Nigerian Oil and GasIndustry Contents Development Act ( OGCDA) is the cumulative result of decades of attempts by the government and stakeholders in the petroleum industry to ensure that the industry provides local value and maximized benefits to Nigerians and Nigerian companies in the country’s oil and gas industry in key areas of human, material, and economic resources ( Subai2019)
The Nigerian oil industry was solely dominated by the international oil companies until Nigerian companies became interested as a result of the introduction of the Nigerian content directives by the Nigerian National Petroleum Company (NNPC) (Omorogbe 1977) the goal of the Nigerian involvement in oil and gas industry led to the resort to the local content requirements (LCR)
It is conferred with the exclusive responsibility for the regulation and development of the Nigerian content in the upstream and downstream sub sectors including the responsibility of operating an e-marketplace, a Joint Qualification System (JQS) and the provision of support for indigenous firms in their bid to develop their competencies within the Oil and Gas Industry

Summary

Introduction

INTRODUCTION The Nigerian Oil and GasIndustry Contents Development Act ( OGCDA) is the cumulative result of decades of attempts by the government and stakeholders in the petroleum industry to ensure that the industry provides local value and maximized benefits to Nigerians and Nigerian companies in the country’s oil and gas industry in key areas of human, material, and economic resources ( Subai2019). The OGCDA defines local content as “the quantum of composite value added to or created in the Nigerian economy by a systematic development of capacity and capabilities through the deliberate utilization of Nigerian human, material resources and services in the Nigerian oil and gas industry.” (OGICDA2010).

Results

Conclusion