New NNPC’s Status Ends NDPC’s Era of Anti-local Content Practices

Peter Uzoho

The successful transitioning of the Nigerian National Petroleum Company (NNPC) Limited into a company operating under the Companies and Allied Matters Act (CAMA) has brought to an end the era of violation and disregard of the Local Content laws by its upstream subsidiary, the National Petroleum Development Company (NPDC).

THISDAY learnt that as the NNPCL continues to reposition as a limited liability company in accordance with the Petroleum Industry Act (PIA), the NPDC has promised to change from its past missteps and henceforth make deliberate efforts to comply with the provisions of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act and associated regulations and guidelines.

THISDAY gathered yesterday that key officials of the company made the commitment during a Nigerian Content sensitisation workshop facilitated by NCDMB’s key personnel, which held in Benin, Edo State recently.

Investigations revealed that the decision by NPDC to turn a new leaf followed years of non-compliance with the provisions of the NOGICD Act and other Nigerian content regulations issued by the NCDMB, the Act’s implementing agency.

Findings showed that NCDMB had made several efforts in the past, particularly from 2016 to 2022, to steer NPDC into compliance with the NOGICD Act and the Board’s processes in its operations without much success in comparison with other multinational and indigenous operators in the industry.

Documents seen by THISDAY revealed that the first sensitisation workshop organised by the NCDMB for NPDC officials was held in September 2016, to familiarise the company’s officials with the Board’s processes.

However, the attitude of the company did not improve significantly, which led to NCDMB writing the NPDC letters on November 22, 2018, and January 21, 2019, notifying it of clear breaches of the NOGICD Act and requesting the company to fulfill its statutory responsibility and attend meetings with the Board.

It was also learnt that NPDC’s actions did not match the directives spelt out in the letters, even as the NNPC’s subsidiary did not make any appreciable efforts to address the non-compliance issues until the Local Content board issued a final warning in a letter dated June 6, 2022.

This, THISDAY gathered, prompted NPDC to request the NCDMB to carry out a sensitisation workshop for its key officials on salient issues mandated in the NOGICD Act, the Board’s processes, and expectations from operating companies as enshrined in the Act.

Investigation further revealed that some of the non-compliance infractions, which were previously observed against NPDC included non-submission of statutory reports to the NCDMB, execution of projects and contracts without obtaining relevant approvals from the NCDMB, and procurement of 2624 joints of 12”3LPE coated line pipes procured by NPDC from overseas without due consideration to in-country pipe mills and coating plants with such capacity.

In the same vein, the national operator’s asset management teams were alleged to have delayed providing NCDMB with details of all ongoing projects, contracts and services for effective monitoring of Nigerian Content requirements by  NCDMB.

Some industry stakeholders, who spoke to THISDAY over the matter, on condition of anonymity, stated that NPDC’s unimpressive attitude towards compliance with the NOGICD Act in the past might have related to its status as a government-owned company and the erroneous belief that it was immune from significant sanctions by the NCDMB at that time.

The sources noted that those excuses were no longer tenable now that NNPC Limited is a fully private company, hence the eagerness of the officials to comply with the NOGICD Act to avoid facing heavy sanctions similar to which the Board had meted out to other major players in the oil and gas industry with potential serious impediments to their business operations.

Efforts to get NNPC to react to this report proved abortive as the company’s spokesman, Mr. Garba Muhammad did not take his phone calls or reply to test messages sent to him as at the time of filing in this report.

Following the incorporation of NNPCL as a CAMA company as provided for by the PIA 2021, and its unveiling recently by President Muhammadu Buhari, its Group Chief Executive Officer (GCEO), Mallam Mele Kyari had assured that the company would operate in full compliance with relevant laws.