Nigerian oil and gas industry content development act pdf
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- Updates On Nigerian Content
- NIGERIAN OIL AND GAS INDUSTRY CONTENT DEVELOPMENT ACT, 2010.
- Nigeria considers changes to Nigerian content requirements in the oil and gas sector
Prior to the enactment of The Nigerian Oil and Gas Industry Content Development Act popularly referred to as the Nigerian Content Act , the Nigerian oil industry was originally the exclusive preserve of the International Oil Companies IOCs and other expatriate companies in areas ranging from exploration and production, trading as well as service operations. Attempts by previous administrations to introduce local content policies were ineffective and impotent largely as a result of the absence of an appropriate legal framework to drive such policies. The Nigerian Oil and Gas Industry Content Development Act was therefore signed into law on April 22 nd and aims to increase indigenous participation in the oil and gas industry by prescribing minimum thresholds for the use of local services and materials and to promote the transfer of technology and skill to Nigerian labour in the industry. The Nigerian Content Act applies to all regulatory authorities, operators, contractors, sub-contractors and other entities involved in any project or activity in the oil and gas industry Section 2 and takes precedence over all other existing enactments and laws in respect of all operations and transactions pertaining to Nigerian content carried out in or connected with the Nigerian oil and gas industry Section 1. There is also provision in the Act for a Nigerian Content Development Fund which is established for the purpose of funding the implementation of Nigerian content development in the Nigeria oil and gas industry Section
Updates On Nigerian Content
The Bill was submitted to the House of Representatives on 18 December for its first reading and has made slow legislative progress since and which seems likely to slow further as the Government tackles the effects of Covid and the oil price crash.. The Act established a legal framework for the development of local content requirements in the oil and gas sector in Nigeria.
The Bill has two main new functions: 1 it broadens the existing local content requirements for the oil and gas sector; and 2 it implements a similar regime for the ICT, power, solid minerals and construction sectors. Among other things, the Board is responsible for evaluating and approving Nigerian content plans and reports submitted by operators and, in conjunction with the Minister of Petroleum, making regulations establishing minimum standards.
Penalties : penalties for non-compliance now include five years imprisonment in addition to a fine of fifteen per cent of the project sum. From the draft of the Bill we have seen, there are some important changes from the Act including the end of charging of the content development levy and the Board is to instead receive funding from the Government however the power and solid mineral industries will face content levies.
The requirement to retain a minimum 10 per cent of revenues from Nigerian operations in a Nigerian bank account has been maintained in the Bill. The Bill must still pass through the House of Representatives and the Senate in order to reach Presidential assent and enter law. The draft of the Bill we have seen contains many of the compliance challenges the Act caused for participants in the industry: the scope is deliberately wide so as to promote engagement but this approach raises questions of interpretation of its terms, whether it applies across the industry or just the upstream part, and how feasible it is for operators to fully comply with all its terms.
Considering the potential implications of the Bill on the oil and gas sector as well as other key sectors in Nigeria, we expect to see increased engagement and lobbying from industry on its contents as it works its way through the National Assembly. Adam Blythe is an energy lawyer with a focus on oil and gas related transactions.
He has experience working on mergers and acquisitions, project development, joint venturing and other commercial arrangements in the upstream, midstream and downstream sectors. Adam has particular experience of African and cross-border transactions. Catherine Todd is a transactional energy lawyer based in London.
She focuses her practice on energy financings and projects, notably in the oil and gas and power sectors. Catherine has experience advising banks, international financial institutions and borrowers on complex cross-border financings. She also advises clients on corporate and commercial matters in the energy sector. Prior to joining Bracewell, Catherine spent six months on secondment to ExxonMobil. Skip to main content.
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NIGERIAN OIL AND GAS INDUSTRY CONTENT DEVELOPMENT ACT, 2010.
The Act has been instrumental to the promotion of the development and utilization of indigenous capacities in Nigeria, and we expect that the progress made will be consolidated for greater impact in the years to come. The Bill seeks to, among others, extend the application of the local content principles and philosophy to the following key sectors of the economy - Information and Communications Technology, Power, Solid Minerals, and Construction. We are reviewing the Bill and will issue a detailed newsletter on it in due course. In the interim, it is important that the industries that may be impacted by the new legislation closely follow this development. Click to download and read more on this update.
We provide below, another update on the operation of the law and the events that are likely to shape its success in the years to come. At the workshop, the Senators highlighted the urgent need to:. We expect the upper house to follow up this initiative with amendment to the law Act to reflect the proposed changes. However, any proposed amendments to the NOGICDA should be exposed to all the stakeholders to ensure that their view points are considered before enactment of the amended legislation. Click to download and read the full issue on this newsletter. All rights reserved. Request for proposal.
Nigeria considers changes to Nigerian content requirements in the oil and gas sector
Skip to main content Skip to main navigation menu Skip to site footer. Abstract The Nigerian Oil and Gas Industry Content Development Act of prescribe local content requirements to promote the patronage of Nigerian products and services by operators in the oil and gas industry. The article finds that sections 10 1 a , 11 1 , 12 and 13 of the Act, which favor the use of local products and materials for projects in the oil and gas industry, contravene the national treatment obligations under Article III of GATT. The article also finds section 53 of the Act to be in violation of the obligation to ensure the general elimination of quantitative restrictions under Article XI:1 of GATT. Author Biography.
This Act provides for the development of Nigerian content in the Nigerian oil and gas industry, Nigeria content plan, supervision, coordination, monitoring and implementation of Nigerian content. An Act to provide for the development of Nigerian content in the Nigerian oil and gas industry, Nigerian content plan, supervision, coordination, monitoring and implementation of Nigerian content; and for related matters. Published by Law Nigeria Admin at 26th April Tags Laws of Nigeria Laws of the Federation. EMAIL: lawnigeria gmail.
The Bill was submitted to the House of Representatives on 18 December for its first reading and has made slow legislative progress since and which seems likely to slow further as the Government tackles the effects of Covid and the oil price crash.. The Act established a legal framework for the development of local content requirements in the oil and gas sector in Nigeria. The Bill has two main new functions: 1 it broadens the existing local content requirements for the oil and gas sector; and 2 it implements a similar regime for the ICT, power, solid minerals and construction sectors.
The upstream oil sector in Nigeria since the discovery of oil in the s has been dominated by international oil companies. To revise this situation and learning from the experience of countries with strong representation for indigenous local participation such as Norway and Brazil, Nigeria adopted the Marginal Fields Programme MFP allocating marginal oil and gas fields to Nigerian enterprises. The main aim of this joint action is to advance local participation in the oil industry, further liberalise the oil sector and create greater opportunities for jobs and entrepreneurship by Nigerians. This paper considers the potential of the MFP and the Act on achieving these objectives. Local content and the marginal fields programme: challenges for indigenous participation in the Nigerian oil industry.