Adewale Sanyaolu
The signing into law of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act which came into effect on April 22, 2010, has no doubt created opportunities for indigenous oil and gas companies hitherto relegated to the background.
The NOGICD Act which gave birth to the Nigerian Content Development and Monitoring Board (NCDMB), saddled with the responsibility of promoting the development and utilisation of in-country capacities for the industrialization of Nigeria through the effective implementation of the Nigerian Content Act.
Executive Secretary of NCDMB, Mr.Simbi Wabote, recently explained that most fabrication, engineering, and procurement in the oil and gas industry were done abroad prior to the enactment of the NOGICD Act in 2010.
This was as the pioneer Executive Secretary of NCDMB, Mr. Ernest Nwapa, in 2013 lamented that the Nigerian economy lost billions of naira in five decades by allowing its crude oil to be lifted by foreigners.
But, today the story seems different as some of the revenue loses quoted above have been reduced through the participation of indigenous companies in oil sector.
Stakeholders, including government are however, championing the cause that Nigerians should rightly take what belongs to them by actively being involved in oil and gas operations either as contractors or vendors to grow indigenous capacity.
Revenue loss to foreign contractors
Wabote lamented that the idea of carrying out most fabrications, engineering, and procurements in the oil and gas industry done abroad led to an estimated capital flight of $380 billion in 50 years.
“Estimated job loss opportunities were in the region of two million. The narrative then was that nothing can be done in-country resulting in less than five per cent of in-country value addition,” he said.
He added that much of the 28 per cent Local Content achievement recorded since the enactment of the Act till date were done using the passion and commitment of the various directorates in the Board. “Our next big leap from 28 per cent to 70 per cent in-country value retention will require step change in the enforcement of the law to drive reversal of capital outflow,” Wabote said.
The Local Content boss stated further that the target Nigerian Content level is meant to create 300,000 direct jobs and retain over $14 billion in-country out of the $20 billion yearly spend.
For his part, Nwapa in 2013, recalled that the Nigerian economy lost over $100 billion in five decades by allowing its crude oil to be carried exclusively by foreign owned tankers.
He equally said the country also lost opportunities to build a virile national carrier fleet on the back of the hundreds of millions of barrels exported every year and equally missed opportunities to train and utilise youths especially from maritime communities of the Niger Delta in formal shipping activities.
Steps to registering as contractor/vendor
Each IOC has its own unique registration process but a common feature in terms of documentation process is similar to almost all of them since they are statutory documents that cannot be boycotted.
There are two types of registration; Nigeria Vendors/Contractors and Foreign Vendors
Requirements for registration; • Certificate of Registration with Corporate Affairs Commission
• Tax Identification Number(TIN)
• Value Added Tax(VAT) certificate
• Tax Clearance Certificate
• Bank details
• Form C02,C07 where applicable
• Memorandum & Article of Association
• Total number of employees
• Registered company address
• Director(s)/Sole Proprietor’ s Signature Specimen where applicable
• Management contact information
• Organisational Structure
• Area of business and previous experience
• HSE policy statement
• Quality Assurance policy
• Insurances
• Financial Information
• Registration certificate with DPR
• NOGIC JQS registration with NCDMB
Foreign Vendors
• Certificate of Registration
• Bank details
• Total number of employees
• Registered company address
• Management contact information
• Organisational Structure
• Area of business and previous experience
• HSE policy statement
• Quality Assurance policy
• Insurances
• Financial Information
Financial support for contractors
Exxonmobil, Shell and NLNG has a contractor finance scheme aimed at helping vendors with limited funds to finance their Local Purchase Order (LPO).The fund is made available to registered vendors with prove of a job offer to help them carryout and deliver their contracts within the time frame stipulated.
ExxonMobil Nigeria affiliates have an agreement with 12 Nigerian banks to offer exclusive financing options to its business partners, under the ExxonMobil Nigeria Contractor Finance Scheme (EMNCFS). The EMNCFS is targeted at Nigerian vendors seeking access to better funding options to fulfill ExxonMobil awarded contracts/orders.
Contractors participating in the scheme will have access to competitive loan rates from participating banks. Loan processing time will also be significantly reduced due to upfront definition of eligibility criteria by the banks.
Contractors seeking to join the scheme should complete the EMNCFS enrollment form and return them to [email protected]. Following notification of successful enrollment in the scheme, the contractor may approach their bank (on which platform they have joined the scheme) to secure loans at agreed rates to execute their valid ExxonMobil contracts or orders, subject to the specific bank’s credit evaluation process.