The Nigerian Senate has said it will amend the Nigeria Oil and Gas Industry Content Development Act (NOGICD) 2010, after investigations revealed that the existing law was not achieving the aims for which it was enacted.
“From what we are discovering in this investigation, it is clear that the Local Content Act is not achieving much result, with Nigeria losing billions in expatriated hard currency and not much local skill or transfer of technology taking place,” said Solomon Olamilekan Adeola, chairman of the Ad-Hoc Committee currently investigating local content and cost variation on the $16 billion Egina Deep Sea oil project.
According to Adeola, investigations by the lawmakers revealed some loopholes in the local content law that are being exploited by foreign companies aided by some local collaborators.
He said: “We have a case of award of a contract of $42 million to a supposedly local company by Total Upstream Nigeria Limited under the Egina Project, with Total making direct payment to another foreign company on
behalf of the local company in just a pipeline procurement contract without the money passing through the Nigerian company.
“This is unacceptable and is a way of circumventing the NOGICD Act. It is apparent that indigenous companies are just being used as conduit pipe when they are used at all,” he stressed.
According to him, the committee has made discoveries of “unqualified foreign companies” like NOV Oil and Gas Nigeria Limited, who are cornering multi-billion dollars contracts that should ordinarily go to Nigerian
companies from Total Upstream, while various kinds of suspicious variations of original contract sums running into millions of dollars are embedded in the Egina Project. He stated that it is either the regulatory mechanism under NOGICD is not embracing or there are collusion to undermine its efficacy.
He said the new amendment to the law would seek to place final approval for projects and its execution under the NOGICD Act in the National Assembly to ensure strict compliance, adding that from revelations so far, many things were being done wrongly to the benefit of international oil companies, with collaborations from locals.
Finance September 14, 2020
Frontpage November 4, 2019