20100405
ALLAFRICA

Abuja — After several years of insignificant presence in the oil sector, indigenous firms would soon receive an unprecedented backing that would lead to increased participation in that critical sector.

This would be made possible through the Nigerian Oil and Gas Industry Development Bill otherwise known as the Local Content Bill, which is set to be signed into law by Acting President Goodluck Jonathan.

The legislation makes provision for the establishment of a Nigerian Content Monitoring Board, which will oversee the implementation of the provisions of the law.

Chairman, House of Representatives Sub-Committee on Local Content, Hon. Tam Brisibe, said the Local Content Bill would regulate the activities of the multinational oil companies; ensure the full participation of Nigerians in the sector; and address the problems of mass unemployment and youth restiveness in the Niger Delta region.

It would be a departure from the past where issues of local content were governed by mere guidelines that were not binding on multinationals, he argued.

The new regime, according to the lawmaker, would put in place a clear cut legal framework for the supervision, coordination, monitoring and implementation of content policy in the industry.

Under the new law, all International Oil Companies (IOCs) operating in the Niger Delta are required to establish local offices in their areas of operation and not the old system of operating the oil wells in the region with offices mainly in Lagos and Abuja.

"Where applicable before carrying out any work or activity in Nigeria, the operator or other submitting a plan shall establish in the catchments area where the project is to be located, a project office where project management and procurement decision making are to take place, to the satisfaction of the Board," says the bill.

It also stipulates that Nigerian independent operators in the industry "shall be given first consideration in the award of oil blocks, oil field licences, oil lifting licences and shipping services, and all projects for which contracts are to be awarded in the Nigerian oil and gas industry; subject to the fulfilment of such conditions as may be specified by the minister, and there shall be exclusive consideration for Nigerian indigenous service".

It also requires the operators to ensure that more Nigerians are engaged in key sectors of the industry to enhance indigenous human capital development and technology transfer.

However, "where Nigerians are not employed because of their lack of training and requisite skills, the operator shall ensure, to the satisfaction of the Board that every reasonable effort is made within a reasonable time to supply such training locally or elsewhere.

"Such effort and the procedure for its execution shall be contained in the operator's employment and training plan while the operator shall report to the Board quarterly on employment and training activities for the reporting period and compare this to the employment and training plan".

According to the legislation, such report would include the number of new employees hired during the year and their places of residence at the time of hiring as well as their employment status.

It also spells out a clear career path for Nigerians in the industry as each operator is required to submit to the Board a succession plan for any position not held by Nigerians. Such succession plan is expected to provide for Nigerians to understudy each incumbent expatriate for a maximum period of four years after which the position shall be taken over by the Nigerian.

The bill, however, makes a provision of five per cent for management positions for expatriates to protect the interest of the investors.

There are strong indications that the acting president is itching to sign it into law because of the nexus between it and the post amnesty programme.

Brisibe disclosed at the weekend that a harmonised version of the bill was transmitted to the Presidency just before the parliament went on Easter break.

The legislator, who was Chairman, House Committee on Petroleum Resources (Upstream) when the bill was at its formative stage, expressed delight at the successful completion of the processes in the National Assembly.

He added that Jonathan would be writing his name in gold when he signs the bill.

The bill was initially passed by the House on Tuesday, November 17, 2009 and transmitted to the Senate for concurrence. Thereafter, the Senate passed it but with minor differences, thereby causing the two chambers to meet on Wednesday, February 10, 2010 to adopt a harmonised version.

The conference report on the legislation was adopted by the House on March 3, 2010.