By Yemie Adeoye

The Nigerian Content Development & Monitoring Board, NCDMB, has directed operators in the downstream sector of the oil and gas industry to comply with the provisions of the Nigerian Oil and Gas Content Development Act, NOGICD, in all activities in the sector.

The Executive Secretary of the Board, Mr. Ernest Nwapa, who gave the directive recently at a meeting with chief executives of downstream companies at the Board’s headquarters in Yenagoa, Bayelsa State, explained that the provisions of the Act also cover the downstream sector, contrary to the belief by some stakeholders that it is meant to regulate only upstream operations.

He said the engagement with downstream operators will be sustained, so as to take their views into account for the Nigerian Content Regulations which the Board planned to issue shortly. Such regulations would have obvious implications and could be disruptive to business operations in downstream sector if key stakeholders do not key in to the requirements.

He also dispelled misconception in some quarters that indigenous operators in the industry are already in compliance with the Nigerian Content Act on the basis of their ownership of businesses and employment of Nigerians.

According to the Executive Secretary, the successful implementation of the Nigerian Content Act requires strict compliance by indigenous operators as the focus of the Act goes beyond the international operating companies and their service counterparts.

With regard to the downstream sector, Nwapa explained that NCDMB expected the operators to prove that they engage Nigerian service providers in the acquisition and maintenance of their assets, comply with the Cabotage Act in their use of marine vessels and meet the training and employment aspirations enshrined in the Act.

The Executive Secretary further directed downstream companies to ensure that genuine Nigerian owned marine vessels that meet technical requirements are fully utilised in their operations, particularly in the lightering of products before foreign owned vessels are engaged to satisfy the “first consideration” requirements of the law.

He explained that the Nigerian Content Act seeks among others, to increase the participation of indigenous companies in the Nigerian Oil and Gas Industry and promote the ownership of marine vessels and equipment by Nigerians.
Other opportunities for the maximisation of Nigerian Content in the downstream include the fabrication and maintenance of tank farms in Nigerian fabrication yards and the manufacture and maintenance of retail pumps and other accessories in_country.

To ensure that the multiplicity of players in the downstream does not make regulation difficult, Nwapa said the Board will develop a unique framework adapted to the downstream and create a Nigerian Content template which will help operators achieve compliance.

Responding, the representative of Honeywell Oil & Gas, Mr. E.E Ekpeyong, admitted that there are cases where downstream companies use foreign flagged vessels in the lightering of imported refined products.

He hinged the practice on the failure of many indigenous vessel operators to comply with standard conditions required of vessels that will work in the oil industry like having insurance cover and requisite certification.

He claimed that companies had on a number of occasions nominated Nigerian vessels to lighter products but the vessels were rejected for not meeting basic requirements, which resulted in demurrage costs and delay in turn over.

Other stakeholders also complained that many indigenous vessel owners do not comply with international safety standards and are unable to account for the loss of considerable volumes of products during operations.

Reacting, the Executive Secretary clarified that the implementation of the Nigerian Content does not encourage the cutting of corners or provision of poor quality services.

He gave the assurance that the Board will share concerns with stakeholders of the marine industry and requested operators to furnish the Board with a comprehensive list of requirements for marine vessels that will work in the downstream sector.

Nwapa further stressed that a good number of Nigerian service companies had grown their capacity and are providing world class services to their clients in the upstream sector and there is no reason why the downstream sector cannot upgrade its standards.