{"id":4538,"date":"2018-10-16T12:21:02","date_gmt":"2018-10-16T12:21:02","guid":{"rendered":"https:\/\/www.aziza.com.ng\/read\/?p=4538"},"modified":"2024-11-10T09:55:18","modified_gmt":"2024-11-10T09:55:18","slug":"effects-of-nigerian-local-content-act-in-oil-gas-industry","status":"publish","type":"post","link":"https:\/\/www.aziza.com.ng\/read\/effects-of-nigerian-local-content-act-in-oil-gas-industry\/","title":{"rendered":"Effects of Nigerian Local Content Act in Oil & Gas Industry"},"content":{"rendered":"

As Oil and Gas industry is still the major source of Income to Nigeria. Nigerian Local Content Act<\/a> was developed to aid Nigerians to participate in its Oil & Gas Industry as it was almost controlled by foreign nationals.<\/p>\n

Nigeria is a middle-income, mixed economy and emerging market, with expanding manufacturing, financial, service, communications, technology and entertainment sectors. It is ranked as the 30th-largest economy in the world in terms of nominal GDP, and the 23rd-largest in terms of purchasing power parity. It is the largest economy in Africa; its re-emergent manufacturing sector became the largest on the continent in 2013, and it produces a large proportion of goods and services for the West African subcontinent.<\/p>\n

The Oil and Gas industry in Nigeria is regarded as the foremost lucrative sector in the economy. It entails the exploration, transportation, development and sale of Nigerian oil and gas resources including upstream and downstream oil and gas operations.<\/p>\n

 <\/p>\n

Click for Full Local Content Act<\/a><\/h2>\n

 <\/p>\n

There are a number of policies governing the Oil and Gas sector inter alia the Petroleum Act, Petroleum Technology Development Fund Act, Petroleum Equalization Fund Management Board Act and Petroleum (Drilling & Production) Regulations. In addition, Government institutions such as the Ministry of Petroleum Resources (MPR), the Department of Petroleum Resources (DPR), amongst others, were also created by the Nigerian government to ensure that due process and procedures in the industry are adhered to.<\/p>\n

It is however safe to note that a gap was identified as regards the protection of local participation in the industry. This led to the enactment of the Nigerian Oil and Gas Industry Content Development Act, 2010 (herein referred to as the\u00a0\u2018Local Content Act\u2019\u00a0<\/em>or\u00a0\u2018The Act\u2019<\/em>) by the Nigerian Government.<\/p>\n

 <\/p>\n

THE LOCAL CONTENT ACT<\/strong><\/p>\n

The objective of the Act is to increase indigenous participation in the Oil and Gas Industry. The Act is designed to promote local participation within the industry, that is, Nigerian incorporated companies. There is no clear definition of a Nigerian Company in the Companies and Allied Matters Act (CAMA) however it recognises that a company duly incorporated in Nigeria, with not less than 51% equity shares by Nigerians and in accordance with the provisions of CAMA can be referred to as a \u2018Nigerian Company\u2019 or a \u2018Local Company\u2019. This is also in accordance with the Local Content Act.<\/p>\n

The Nigerian Content Monitoring Board (NCMB) was established as the regulatory body responsible for monitoring, coordinating and implementing the provisions of the Local Content Act. The NCMB has also been given the mandate to certify companies to ensure compliance with the Local Content Act.<\/p>\n

 <\/p>\n

Read: Permits & Certificates you Need to Operate in Nigerian Oil & Gas Industry<\/span><\/a><\/h3>\n

 <\/p>\n

THE Effects of Nigerian Local Content Act<\/strong><\/p>\n

The impact of the Local Content Act on the Nigerian Oil and Gas Industry has been tremendous. A few of these impacts include:<\/p>\n

Employment<\/strong><\/p>\n