We use cookies to give you the best online experience. By using our website you agree to our use of cookies in accordance with our cookie policy. Learn more here.Close Me
Recently, the Nigerian Content Development and Monitoring
Board (NCDMB), the government body responsible for
administering the provisions of the Nigerian Oil and Gas Industry
Content Development Act (NOGICDA or the Act), has been conducting
compliance reviews on companies operating in the Nigerian oil and
gas industry. The aim of the compliance exercise is to confirm
whether the affected companies fully complied with provisions of
the NOGICDA regarding the deduction of the National
Content Development (NCD) levy and ensure recovery of the
unremitted amounts from these companies. Some of the affected
companies have been assessed to huge liabilities arising from
non-compliance with the provisions of the NOGICDA.
The NOGICDA, enacted in 2010, governs the administration and
enforcement of Nigerian content in the Nigerian oil and gas
industry. The NOGICDA was conceived to replicate the successes
recorded in the implementation of similar local content policies in
countries such as Norway, Brazil and Indonesia. The primary
objective of the NOGICDA is to ensure a measurable and
continuous growth of Nigerian content in all oil and gas
arrangements, projects, operations, activities or transactions in
the Nigerian oil and gas industry.
In order to achieve the above objective, the NOGICDA established
a Fund known as the Nigerian Content Development Fund for the
purpose of funding projects, programmes, and activities directed at
increasing Nigerian content in the oil and gas industry. The
NOGICDA further stipulates that the sum of 1% of the contracts
awarded to any company involved in any project, operation or
transaction in the upstream sector of the Nigerian oil and gas
industry should be deducted and remitted into the Fund.
One key area of contention for companies seeking to comply with
provisions of the NOGICDA is the ambiguity regarding the nature of
transactions that should be liable to the 1% NCD levy. It appears
there are varying interpretations on the nature of transactions
liable to the NCD levy.While the NCDMB posits that all contracts in
the oil and gas industry be subjected to the levy, other
stakeholders in the oil and gas industry are of the view that the
levy should apply to only contracts for upstream oil and gas
projects.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Recently, the Department of Petroleum Resources issued a tetrad of Guidelines in furtherance of the objectives of the Flare Gas (Prevention of Waste and Pollution) Regulations, 2018.
Further to the release of the Flare Gas (Prevention of Waste and Pollution) Regulations, 2018 and the subsequent re-launch of the Nigerian Gas Flare Commercialisation Programme ("NGFCP")
An example of such intervention mechanism is the creation of a priority list for accessing the available FX, including to the manufacturing and oil and gas sector.
With the continued procrastination in passing the Petroleum Industry Bill and the consequent delay in bringing about the much vaunted reforms of the oil and gas sector in Nigeria, other African countries ...