Despite huge investments made by the Federal Government of Nigeria in the oil and gas sector of the economy, an average of $10 billion USD per annum, its contribution to GDP growth has been minimal. This is largely due to low Nigerian Content in the industry, evident from the over 80% of work value carried out abroad. This has led to a dearth in jobs, skills development, capacity building / utilization and lack of sustained national economic development.
To address the situation, the Federal government has set Nigerian Content targets for the oil and gas industry of 45% by 2006 and 70% by 2010 respectively. In addition, presidential directives have been issued with the aim of domesticating a significant portion of economic derivatives from the oil and gas industry. To deliver on these directives and targets, the Nigerian National Petroleum Corporation (NNPC) has put in place a comprehensive Nigerian Content development strategy currently being rolled out in the industry.
Nigerian Content is the quantum of composite value added or created in the Nigerian economy through the utilization of Nigerian human and material resources for the provision of goods and services to the petroleum industry within acceptable quality, health, safety and environment standards in order to stimulate the development of indigenous capabilities.
NNPC’s Vision for Nigerian Content
NNPC’s “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 a 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.
The Thrust of the Nigerian Content Policy
The Nigerian Content Policy seeks to promote a framework that guarantees
active participation of Nigerians in oil and gas activities without
compromising standards. The policy also focuses on the promotion
of value addition in Nigeria through the utilization of local raw
materials, products, and services in order to stimulate growth of
indigenous capacity.
The Federal government is optimistic that its policy will result in
steady, measurable, and sustainable growth of Nigerian Content throughout
the oil and gas industry.
Nigerian Content Implementation Framework
A number of key initiatives have been put in place to coordinate
national efforts to achieve the Governments Nigerian Content targets
and objectives:
- A draft Nigerian Content Development Bill has been submitted by NNPC to the Federal government. The regulation which is the responsibility of the Directorate of Petroleum Resources (DPR) will be in place once the bill is enacted.
- An organizational framework that will ensure the implementation of the policy.
The Nigerian Content Division (NCD), headed by a Group General Manager was set up in March 2005 under the NNPC Group Managing Director’s (GMD) 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 by the oil companies.
The Nigerian Content Consultative Forum (NCCF) was also inaugurated with 8 sectorial working committees covering the fabrication, engineering, manufacturing, petroleum engineering & subsurface banking & insurance, and shipping & logistics, sub sectors.
The Joint Qualification System (JQS) is being introduced to facilitate the E&P contracting process in the oil and gas industry. JQS will provide a databank of available of goods and services suppliers to the Nigerian petroleum industry and streamline the prequalification process. The system will be launched early 2006 and open up genuine opportunities for qualified local contractors to participate in the oil and gas sector.
Contact Nigerian Content Division