All is now set for the unveiling of a new contract cycle guidelines for the oil and gas industry, the Nigerian Content Development and Monitoring Board (NCDMB) has said.
The move is in line with its resolve to comply with the Presidential Directives on Local Content announced by President Bola Ahmed Tinubu in March 2024 to accelerate oil and gas contract timelines, incentivize investments in the sector and increase Nigeria’s crude oil production.
NCDMB Executive Secretary, Engr. Felix Omatsola Ogbe gave the hint at the just concluded two-day contracting cycle guidelines sensitization workshop organized by the Project Certification and Authorization Directorate (PCAD) of the Board for international and indigenous operating oil and gas companies and their service counterparts in Lagos.
Maritime Bits checks revealed that the workshop provided a platform for NCDMB to explain the provisions of the guidelines and how it would implement them in alignment with the Nigerian Oil and Gas Industry Content Development (NOGICD) Act and the presidential directives.
Ogbe who was represented at the occasion by the Director, Project Certification and Authorization, Engr. Abayomi Bamidele stressed that NCDMB is a business enabler hence the decision to get stakeholders’ feedback before finalizing and launching the guidelines at the forthcoming Practical Nigerian Content Workshop slated for December 3-5, 2024 at the Nigerian Content Tower, Yenagoa, Bayelsa State.
As a way of assisting the companies, Ogbe promised that NCDMB would convene a technical workshop in the first quarter of 2025 to train personnel of operating and service oil and gas companies on how to efficiently complete various technical documents utilized in oil and gas contracting process.
These presidential directives include the Presidential Directive on Local Content Compliance, Presidential Directive on Reduction of Petroleum Sector Contracting Cost and Timelines and Presidential Directive on Oil and Gas Companies (Tax Incentives, Exemption and Remission).
The NCDMB helmsman stated that the objectives of the presidential directives were meant for Nigeria to deepen local content practice and grow the sector.
According to him, they were also meant to eliminate premium margins charged by some service companies, stop frequent policy changes and ensure that final investment decisions (FIDs) are signed regularly, to catalyze new projects.
He recommended that at least one or two FIDs should be signed at the annual oil and gas conferences, to create activities in the sector.
Giving further insight into the development, Ogbe noted that the presidential directive on Local Content Compliance addressed issues pertaining to NCDMB while the presidential directive on Reduction of Petroleum Sector Contracting Cost and Timelines referred to NCDMB and the Nigerian National Petroleum Company and its investment arm, the NNPC Upstream Investment Services (NUIS).
He added that NCDMB is working to support oil firms to accelerate their projects and take advantage of the incentives provided by the presidential directive on Oil and Gas Companies (Tax Incentives, Exemption, and Remission).
Ogbe explained that that the presidential directives have reduced the period for concluding oil and gas contracts from 180 days to six months while it also revised the Contracting Timelines in the Memorandum of Understanding (MoU) the Board had signed with the Nigerian National Petroleum Company Limited and international operating companies in September 2023 and reduced the number of days allotted to NCDMB on the cycle.
He pointed out that NCDMB was mandated to develop templates to collapse its touch points on the contracting cycle to enhance the business environment within the provisions of the law.
Accordingly, it has reduced its touch points from nine to five for open tenders and selective tenders while retaining only four touch points for single source contract.
He stated that another goal of the presidential directive is to eliminate intermediaries with no demonstrable capacity and to develop structured processes to determine, verify and document in-country capacities and capabilities.
He added that the board has adopted robust pre-qualification and technical evaluation process, policy revisions to provide clarity on in-country value addition for OEM representatives and in-country capacity audit every two years.
According to Ogbe, another objective of the presidential directive is to target global benchmarks. For this, he noted that NCDMB is proposing the co-creation of tender cost templates/tariffs, the promotion of joint venture of local/foreign service companies, the adoption of robust waiver management system by the board and conveyor belt of at least two final investment decision (FID) per year.
Among other things, the workshop featured technical presentations and interactions.
Participants commended the management of NCDMB for providing a platform for stakeholders to make constructive inputs into the industry’s operating guidelines.
