By Adedayo Akinwale ín Abuja
The House of Representatives has launched an investigation into the implementation of local content in line with the provisions of the Nigerian Oil and Gas Content Development Act (NOGICD) with a view to determining the degree of compliance in the Industry.
The decision was sequel to a motion moved at plenary on Thursday by Hon. Kolade Akinjo on the need to ascertain the degree of implementation of the requirement of local content in the Nigerian oil and gas industry.
He said that the Act was enacted to promote indigenous participation in the management and control of the oil and gas industry.
Akinjo noted that in 2002, the National Committee on Local Content Development (NCLCD) discovered that local participation in the upstream sector of the oil and gas industry was less than 5 per cent, meaning that 95 per cent of the then yearly expenditure of about $8 billion left the country through capital flight.
He stressed that NCLCD proposed initial target of 40 per cent by 2005 and 60 per cent by 2010 for aggregate local content value in the oil and gas industry from all the categories.
Akinjo said that the Nigerian Content Development and Monitoring Board (NCDMB) was created to regulate and monitor the implementation of the provisions of the Act and ensure that the oil and gas companies comply with the local content practice in the industry.
He expressed concern that despite the benefits accruing to indigenous oil and gas firms from the NOGIC Act, there was still low involvement of indigenous companies in the industry.
The lawmaker said that since 2010, the NCDMB has not transmitted a review of the local content schedule in the NOGIC Act to the National Assembly as stipulated in Section 102 of the Act.
He said the NOGIC Act has a threshold that applies to projects of $1 million and above, yet the targets stipulated in the Act are far from being met.
According to him, the oil and gas sector accounts for about 35 per cent of Nigeria’s GDP and 90 per cent of foreign exchange earnings, adding that if Nigeria achieves local content compliance of about 60 per cent, then Nigeria’s economy would achieve a major boost on account of the oil and gas sector.
The House therefore directed the Committee on Nigerian Content Development and Monitoring to investigate the implementation of local content in line with the provisions of the NOGICD in the oil and gas sector with a view to determining the degree of compliance by the Industry.
It also mandated the committee to investigate the extent of the utilization of the 1 per cent Nigerian Conservation Fund (NCF) in capacity building, human capital development, project implementation, especially in the catchment areas and value addition in the industry.