The Executive Secretary of the Nigerian Content Development Monitoring Board (NCDMB) Mr Ernest Nwapa, has disclosed how multinational operating and service companies in the oil and gas industry resisted the signing into law of the Nigeria Local Content Act.
The Nigeria Local Content Act, a law which seeks 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 employment of Nigerian staff in the industry, was signed into law by President Goodluck Jonathan in April 2010, after a prolong delay.
Nwapa who recalled how multinational operating and service companies resisted the legislation, said “they highlighted the risk to the government that signing of the Bill will hurt the smooth operations of the industry and derail the national economy.”
He said when the Minister of Petroleum Resources, Mrs Diezani Alison-Madueke was appointed in 2010, “she was confronted by the position of key stakeholders of the oil and gas industry, but had to weigh in on the national development imperatives of the Nigerian Content Law.”
The executive secretary further explained that the signing of the Nigerian Content Bill into law by President Goodluck Jonathan was a calculated risk to promote overriding national interest. “Therefore, successful implementation of the Act’s provisions by the minister, governing council, management and staff of NCDMB involved skilful risk management applications worthy of recognition,” he said.
Nwapa who spoke while receiving the Nigerian Risk Award on behalf of the petroleum minister who is the Chairman of the Board’s Governing Council, for the successful implementation of the Nigerian Content Act, maintained that the implementation of the Act has been a game changer in the operations of the oil and gas industry in view of its contributions to the nation’s economy.
So far, the implantation of the Act is reported to have impacted on the local economy, attracting over $5 billion investment in three years, creating over 52, 000 jobs and generally changing the way oil and gas business is done in Nigeria.
The Board has deployed a strong implementation regime in collaboration with stakeholders to promote investment in assets, facilities and infrastructure, domiciliation of work scope, training and employment of Nigerians as well as use of local resources for industry operations.
The Nigerian Risk Award, which was the first edition, modelled after the UK version, was organised by Conrad Clerk, an international Risk Management company.
“In this case, it is easy to see why the Board deserved nomination for the Risk Management Award considering the increased market share of Nigerian insurance companies occasioned by implementation of the Act which has increased local underwriting capacity by over 200 per cent in the past three years,” Nwapa said.
He further advised investors in fabrication, manufacturing, drilling, shipping, engineering and other areas of the industry to embrace risk management initiatives in view of the massive work, investment inflow and increasing transfer of control to indigenous players.
He also urged banks to adopt modern risk appraisal methodologies in long term transactions with indigenous operators and service companies.
Speaking at the event, the chief executive of Conrad Clark, Mr. Joe-Hakeem Adenusi, explained that the NCDMB was selected as the top performing organisation in oil and gas industry from a survey it conducted on a cross section of industry stakeholders.