The Nigerian Senate has said it will amend the Nigeria Oil and Gas Industry Content Development, NOGICD Act, 2010, noting that the existing law was not achieving the aims for which it was enacted. The Senate took the decision to amend the Act after the Ad-HOC Committee currently investigating the local content and cost variation of the $16 billion Egina Deep Sea oil project, made its observation known.
The Committee which is headed by Senator Solomon Olamilekan Adeola stated that the investigation had discovered loopholes in the local content law stressing that the loopholes are being exploited by foreign companies with local collaborators to perpetrate fraud.
“From what we are discovering in this investigation, it is clear that the Local Content Act is not achieving much result, with Nigeria losing billions in expatriated hard currency and not much local skill or transfer of technology taking place.
‘We have a case of award of a contract of $42 million to a supposedly local company by Total Upstream Nigeria Limited under the Egina Project, with Total making direct payment to another foreign company on behalf of the local company in just a pipeline procurement contract without the money passing through the Nigerian company.
This is unacceptable and is a way of circumventing the NOGICD Act. It is apparent that indigenous companies are just being used as conduit pipe when they are used at all.”
He further explained that the committee has made discoveries of “unqualified foreign companies” like NOV Oil and Gas Nigeria Limited cornering multi-billion dollar contract that should ordinarily go to Nigerian companies from Total Upstream, while various kinds of suspicious variations of original contract sums running into millions of dollar are embedded in the Egina Project. According to him, it is either the regulatory mechanism under NOGICD is not embracing or there is collusion to undermine its efficacy.
