Content area
Full text
The passage into law of a national content law in Nigeria in 2010 marked a very significant stage in a journey of more than 60 years to increase Nigerian participation in the nation's petroleum industry. The new law has radically changed the regulatory regime in that area. This article traces the evolution of legal and policy measures to enhance national content. It shows that while considerable progress has been made, such progress has paradoxically tended to feed demands for even more measures to promote national content. The new national content law is a product of this paradox and contains provisions that could seriously hamper the growth of the Nigerian petroleum industry. The article highlights some of these provisions and their potential impact, and argues that while it is perfectly understandable for Nigerians to seek a greater share of the petroleum industry, this must not be pursued in a way that hurts the industry and the nation itself.
In recent years, the Nigerian National Petroleum Corporation (NNPC) and some other agencies of the Nigerian Government have steadily intensified efforts to expand participation by Nigerians in various aspects of the nation's upstream petroleum industry. These efforts (described as the promotion of 'Nigerian content'1) have been primarily aimed at securing greater employment for Nigerians and increasing opportunities for Nigerian companies to supply goods and services. The passage into law, in April 2010, of the Nigerian Oil and Gas Industry Content Development Act 2010 (the 'NOGICD Act') marked a watershed in this drive to increase Nigerian content. The NOGICD Act has specified ambitious Nigerian content targets, granted wide-ranging powers to the board responsible for implementing the Act (including the power to set even more ambitious targets) and introduced significant penalties for companies that breach the provisions of the Act. Depending on how the Act is implemented, it could have serious consequences for the Nigerian petroleum industry.
This article will consider the potential impact of the NOGICD Act. Before doing so, it is necessary to outline the evolution of legal and other mechanisms that have been adopted to promote Nigerian content as this evolution is critical to an understanding of the NOGICD Act and its likely effects. The article therefore consists of three sections. The first section will consider...