OVERVIEW OF THE NIGERIAN
CONTENT ACT: KEY
OBJECTIVES AND
COMPLIANCE TOOLS
Kolade T. Olawuni
Associate
Babalakin & Co
Legal Practitioners
www.babalakinandco.com

INTRODUCTION
•Nigerian Content law was passed to regulate and
coordinate Local content in all Oil and Gas operations
in Nigeria.
•Presentation
analyses
the
law
extensively
and
considers the duties of both the Board and Operators
towards a successful implementation of the law.
2
CREATION OF THE NIGERIAN CONTENT
DEVELOPMENT AND MONITORING BOARD

•The law establishes the Nigerian Content Development and
Monitoring Board.
• Major responsibility is to guide, monitor, coordinate and
implement the provisions of the law.
•The board to implement the law in order to Achieve
measurable and continuous growth of Nigerian Content in
all oil and gas operations.












KEY TASKS OF THE BOARD
Issue certificate of authorization
Conduct public review of operator’s content plan
Set minimum content level for projects where same is not listed
in the schedule.
Review bids, contract and subcontracts
Ensure that operators adhere to recruiting and training of
Nigerians.
Ensure the establishment of catchment area offices.
Enforce the indigenous policy of the law.
Approve expatriate quotas.
Establish and coordinate the oil and gas e-market place.
Establish a joint qualification system together with stakeholders.
Effectively monitor the implementation of the Law.

OPERATOR COMPLIANCE PROCESS
Compliance and the promotion of local content are major conditions
for the award of licences and permits.
•All arrangements, agreements, Contracts or memorandum of
understanding entered into in any Operation to conform with the law
as follows:
•First consideration to be given to Nigerians
•Nigerian independent operators to be given 1st consideration in all
projects for which Contracts are to be awarded.
•Exclusive consideration to Nigerian indigenous service companies
which demonstrate ownership of equipment and Nigerian personnel.

Submission of a local content plan-
• Operators to submit to the board a local content plan
• Content Plan to demonstrate compliance with local content
requirements set out by the law.
• Content of the plan:
a. Details of first consideration given to Nigerian goods and services
b. Details of locally manufactured goods to be utilized by the
operator
c. Employment and Training Plan
d. Research and Development Plan
•Projects above 1million USD
• Operator to provide to the board for approval all advertisements,
prequalification, technical bid documents etc.
• Operators have a duty
board.
to submit sufficient information to the

Establishment of project office in
catchment areas•Operators to establish project office in the catchment
area where project is to be sited
•Project office to have personnel that can make decisions.
•Operators to maintain an office in a community where it
has significant operations
•Operators may be required to have personnel that are
indigenous to the area of operation.

Employment and Training of Nigerians-
Nigerians to be given first consideration for employment and training.
• Nigerians not employed for lack of training, are to be provided with
training in Nigeria or elsewhere.
• Only Nigerians are to be employed in all junior and intermediate
cadres.
• All projects in excess of 100Million USD to have a labour clause
requiring the usage of a minimum percentage of Nigerian labour.
•Expatriate Quota•
Operators to retain only 5% of management position.
•
Applications for expatriate quotas to be made to the board and approval
received before any other made to any other government agency.

Technology Transfer-
• Operators
to
have
technology
transfer
programmes.
• Technology transfer plan to be submitted to
the board.
• Plan to show technology transfer initiative of
the operator.
• Operators may be mandated to set up factories
or production units.

Insurance-
• Operators to insure all insurable risks with a Nigerian
insurance company through a Nigerian insurance broker.
• Operators not to place any risk offshore without the written
approval of the National Insurance Commission.
• Operators to submit a comprehensive Insurance Report to the
board.

Legal services-
• Only Nigerian Legal practitioners whose offices are located in
any area of Nigeria to be engaged.
• Operators to submit a Legal Services Plan to the board every
six months.
•Financial services•
Only services of Nigerian Financial Institutions to be utilized except
where to the satisfaction of the board it is Impracticable.
•
Operators to submit to the board a financial services plan.
Fabrication and welding•
All fabrication and welding to be carried out in-country
•BIDDING PROCESS
• Operators to consider Nigerian content in the evaluation of bids.
• Bids within 1% of each other at commercial stage and bids
containing the highest level of Nigerian content to be selected
• Nigerian Content in the selected bid must be at least 5% higher
than its closest competitor.
• Bidding for goods and services to give full and fair opportunity
to Nigerian indigenous contractors ad companies.
• A Nigerian company not be disqualified on the basis of not being
the lowest financial bidder, provided the bid does not exceed the
lowest financial bid by 10%







ESSENTIAL TIMELINES
Public review of an content plan, the review to be concluded with the
issuance or denial within 30 days from the date of commencement of
the review.
Operators to submit to the board 30 days before the 1st day of each
quarter a list of all contracts exceeding $1millon to be bided and executed
in the coming quarter.
The board to inform the operator by the 1st day of each quarter
contracts designated for review and the outcome of the review.
Operators to submit to the board within 30 days at the end of each
quarter a list of all contracts exceeding $1million awarded in the previous
quarter.
Submission of annual Nigerian content performance report within
60days.
The following to be submitted every six months:





Employment and Training Plan
Research and Development Plan
Insurance programme
Legal services plan
Financial services plan
PENALTY FOR NON COMPLIANCE
Operator who carries out any project
contrary to the law commits an offence
and is liable upon conviction to a fine of
5% of the project sum or cancellation of
the project.

CONCLUSION

The law on Nigerian content seeks to regulate the quantity of
value added or created in the Nigerian economy, this it does
though the utilisation of Nigerian human and material resources
for the provision of goods and services in the oil and gas sector.

This presentation has demonstrated the steps to be taken by both
the operators and the Board toward achieving the targets set by
the law.
THANK
YOU