Oil and Gas Industry Act: Stakeholders hail inclusion of Naira component in contracts

By Haruna Salami
Stakeholders in the oil and gas industry have welcomed the proposed amendment to the Nigerian Oil and Gas Industry Content Development, NOGICD Act, 2010 that will include the naira component in the award of contracts in the industry.
This was expressed Thursday at the public hearing of three bills by the joint Senate Committee on Local Content and House Committee on Nigerian Content Development and Monitoring.
Danziba Patrick Obah, director, planning, research and statistics, Nigerian Content Development and Monitoring Board, NCDMB said “benchmarking naira for contracts is a major paradigm shift” as proposed in the amendment bill, which will strengthen the Nigerian economy through job creation”.
As things stand in the extant NOGICD Act, contracts in the oil and gas industry, which are denominated only in US dollar, states that contracts of $1million and above must go through NCDMB.
The amendment in the bill now states that contracts of $1 million or N100 million naira must go through NCDMB.
However, the problem, according to Charles Epelle of Nigerian Liquefied Natural Gas, NLNG the proposed amendment creates loophole for contractors to escape going through NCDMB since N100 million is not the same as $1 million.
Hon. Legor Idagbo, chairman House Committee on Nigerian Content Development and Monitoring said however said “when you introduced the naira you have to put a figure, the naira and the dollar value will always fluctuate. There is no time $1 million will be a particular amount in naira. We just looked at it and said let us put a threshold of N100 million. At the end of the day we will agree on a figure that truly reflects what the minimum threshold should be against the$1 million.
The public hearing was declared open the Senate President, Ahmad Lawan, represented by Senator Philip Aduda, Senate Deputy Minority Whip, while the Speaker of the House of Representatives was represented by Hon. Peter Akpatason, Deputy House Leader.