WHAT IS NIGERIAN CONTENT?

Nigerian Content is defined as the quantum of composite value added or created in the Nigerian economy through the utilisation of Nigerian human and material resources for the provision of goods and services to the petroleum industry within acceptable quality, health, safety and environmental standards in order to stimulate the development of indigenous capabilities.

WHAT ARE GOVERNMENT TARGETS FOR NIGERIAN CONTENT ?

The targets set by the Federal Government for Nigerian content is 45% by 2006 and 70% by 2010

WHAT IS NNPC'S VISION FOR NIGERIAN CONTENT?

Our "Nigerian Content" vision is to transform the oil and gas industry into the economic engine for job creation and national growth by developing in-country capacity and indigenous capabilities. In this way, greater proportion of the work will be done in Nigeria with active participation of all sectors of the economy and ultimately Nigeria will be positioned as the hub for service delivery within the West African sub region and beyond .

WHAT IS THE MAIN THRUST OF THE NIGERIAN CONTENT POLICY?

Promote a framework that guarantees active participation of Nigerians in Oil and Gas activities without compromising standards in order to stimulate growth of indigenous capacity.
Promote Value Adding in Nigeria by Utilisation of local raw materials and human resources for manufacturing of Goods and provision of services to the Petroleum industry.
Promote steady measurable and sustainable growth of Nigerian Content.

WHAT FRAMEWORK IS IN PLACE?

A national vision and action plan included in a Policy Package.

Based on contributions by stakeholders and key players in the industry at numerous workshops and seminars, a Nigerian Content Policy has been submitted to the Government.

A legal device in the form of an Act, Statute or Regulation to give it normative force.
A draft Nigerian Content Development Bill has been submitted by NNPC to Government. The Regulation which is the responsibility of DPR will be ready once the bill is enacted.

An organizational framework which sees to the implementation of the Policy.
A Nigerian Content Division, headed by a Group General Manager was set up in March 2005 under the GMD's office. The division is sufficiently empowered to work with industry stakeholders and relevant arms of government to develop strategies, drive implementation and ensure compliance with directives being issued to the Oil companies regarding the Nigerian Content aspirations of Government.

A Nigerian Content Consultative Forum (NCCF) was also inaugurated with 8 Sectorial Working Committees covering Fabrication, Engineering, Manufacturing, Banking & Insurance, Shipping & Marine, Well & Drilling as well as Logistics services.

Another key feature of the organizational framework is the introduction of a Joint Qualification System (JQS) into the contracting process to provide a data bank of available Contractors and Suppliers of goods and services to the Nigerian Petroleum Industry and streamline the prequalification process. The JQS which will be launched in the third quarter of 2005 will eliminate subjectivity and open up genuine opportunities for participation of qualified Nigerian contractors.

WHAT INTERVENTIONS TO MEET TARGETS OF 45% BY 2006 AND 70% BY 2010 SET BY GOVERNMENT?

NCD is gathering data and developing interventions in consultation with Sectorial committees of the NCCF keyed to the achievement of government targets. To this end, the first set of specific intervention guidelines have been issued to all Operators and NNPC departments responsible for projects and operations in the upstream, midstream and downstream sectors on the scope of work that must be performed in Nigeria to achieve set targets.

The notable guidelines are as follows;

FEED and Detailed Engineering for all projects are to be domiciled in Nigeria by end 2005;
Henceforth, all fixed platforms (Offshore and Onshore) piles, anchors, buoys, jackets, bridges, flare booms, storage tanks including selected process equipment and pressure vessels are to be fabricated in Nigeria to maximize utilisation of local fabrication yards;
All FPSO Contract packages are to be bid on the basis of carrying out integration within the country starting from Mid 2006;
Domestication of all seismic data processing and reservoir management studies effective end of 2005;
Clauses that create impediments for/exclude participation of local companies should not be included in any Invitation to Tender (ITT) documents.
Harmonize and apply international codes and standards that support utilisation of locally manufactured products such as paints, cables, etc to improve capacity utilisation in local industries by 2nd Qtr 2005;
HOW ARE THE OIL COMPANIES RESPONDING TO THE NIGERIAN CONTENT INTERVENTIONS?

The Oil companies are already NNPC partners in several Joint Ventures and PSC arrangements for E&P investments in the industry. Expectedly, we have received support from the oil companies who have participated in the review of the draft Nigerian Content Bill, JQS and Capacity Development programs. The oil companies also belong to the NCCF which meets monthly and have complied with several requirements of the NCD. Nigerian Content Managers have been designated in the Oil companies in line with the coordination procedure.

WILL THE NIGERIAN CONTENT POLICY STRAIN THE RELATIONSHIP BETWEEN NNPC AND MULTINATIONAL OIL COMPANIES?

No. Most multinational companies that do business in Nigeria have had experience in Local content development in their home countries and other locations where they operate. To ensure a smooth transition, NNPC has consulted widely and adapted tested and sustainable strategies from other countries in similar setting.

HOW WILL NIGERIAN CONTENT DEAL WITH EXPATRIATE QUOTA IN THE OIL AND GAS SECTOR?

The Nigerian Content Bill makes provisions that empower DPR to participate in the processing of expatriate quotas for cases involving the |Oil and Gas industry. Also the requirement for professional bodies to certify foreign professionals who want to practice in Nigeria is another way to ensure that only unavailable expertise is imported. Professional bodies have been approached to work out modalities.

ARE THERE SANCTIONS FOR NON-COMPLIANCE WITH NIGERIAN CONTENT PROVISIONS?

The draft bill makes provision for sanctions and penalties to be applied to defaulting participants. The coordination procedure also provides checks and monitoring points to ensure complance proactively.

WHAT ARE THE KEY EXPECTATIONS FROM NIGERIAN CONTENT INITIATIVES ?

In the short term, the intervention guidelines are expected to create several thousand jobs for Engineer, welders and other professionals and artisans in the Engineering, Procurement and Construction phase of the project.

With requirements for utilization of locally manufactured goods and equipment, major investments in infrastructure are expected and the local manufacturing industry will be reinvigorated.

WHICH SECTORS ARE COVERED BY NIGERIAN CONTENT POLICY?

The policy applies to all sectors of the Nigerian Oil and Gas industry. In this phase of activities, primary focus is placed on major contracts and operations in Upstream, (JV, PSC & Indigenous Producers) Midstream (Gas & Power Projects) and Downstream (Refinery, Petrochemicals and other) sectors.

The plan is to progress this initiative to the extent that other segments of the national economy begin to benefit fro the capacity in the oil and gas sector.

WHAT ARE THE RECENT ACHIEVEMENTS THROUGH NIGERIAN CONTENT?

A lot is going on in the Nigerian Content scheme. Apart from the organization of many Nigerian companies to brace for the several opportunities from the recent guidelines, actual progress has been recorded in quantum of work awarded to Nigerian Contractors. Oil companies have realigned their work plans to reflect the aspirations of the policy. Nigerian Content Division is ensuring that any work that can be executed in Nigeria or by Nigerians is specified in the Nigerian content scope in ITTs before they are issued.

HOW DO YOU PLAN TO BUILD REQUIRED CAPACITY FOR NIGERIAN COMPANIES IN THE INDUSTRY?

Capacity building is one of the key planks for achieving government targets and this is pursued in the following activities;

Survey of available capacity and identification of needs for new projects and operations;
Identify new Opportunities for Local suppliers;
Training of Nigerians in targeted areas of competency and acquisition of Technological and Managerial capability;
Development of infrastructure and upgrade of facilities
Local Business and supplier enhancement;
Project Financing and funding of local businesses.