Against the backdrop of incessant vandalism, oil theft and disruption of activities in the oil-rich Niger Delta, the Chief Executive of First Marine and Engineering Services (FMES), Chief Joseph Penawou, has suggested a robust application of the community content guidelines (CCG) as promoted by the Nigerian Content Development and Monitoring Board (NCDMB) across the entire oil and gas valuechain.
Chief Penawou called on IOCs, independents, government parastatals, indigenous and multinational service companies alike to adapt the principles behind the CCG to their activities in the industry. He made this statement in an interview with Majorwaves at the just-concluded Offshore Technology Conference in Houston, Texas.
He said, “the NCDMB has designed a tool called CCG that everyone needs to look into in addition to their regular CSR activities to these host communities.
“There’s hardly any company operating in the Niger Delta that isn’t having one form of support program or the other to its host community. But proven models and guidelines like the CCG is worth considering to have an effective and lasting impact.”
He also emphasized the need for all players to join in the campaign. “This cross is for everyone to carry. Whether private or government, everyone is being affected, and we need to seek solutions. So, IOCs, independents, and service companies should explore the CCG and new ways to engage continually.”
The Nigerian Oil and Gas Industry Content Development (NOGICD) act, was signed into law on April 22nd 2010, with the aim to increase indigenous participation in the oil and gas industry through the prescription of minimum thresholds for the use of local services and materials.
The NOGICD act has six key thrusts, which include integration of oil & gas producing communities into the oil and gas value chain; maximizing participation of Nigerians in oil and gas activities; maximizing utilization of Nigerian resources i.e. manpower, goods, services and assets; attracting investments to the Nigeria oil and gas sector (service providers, equipment suppliers and any other investment relevant to oil & gas industry.); linking oil and gas sector to other sectors of the economy; and fostering institutional collaboration.
Integrating oil & gas producing communities into the oil and gas value chain, underscores the premium consideration placed on community participation by the NOGICD act.
Specifically, sections 25, 26, 27 and 28(2) of the NOGICD act provides for the operator to maintain a level of presence in communities where projects are located. The sections also mandate participation of host community entrepreneurs in the contractual commercial activities of the Promoter, Operators and Contactors throughout the project life cycle.
The national aspirations for host communities was given a boost in 2016 when President Muhammadu Buhari, launched the Petroleum Industry Roadmap on October 27, 2016 to revitalize the oil and gas industry. A key Performance Indicator in the roadmap is to “Deploy~30 percent of business opportunities from operating companies to communities”
Pursuant to the launch of the Petroleum Industry Roadmap, CCG was developed by the NCDMB with the intent to achieve structured engagement of youths in host communities in productive endeavors including employment, training, services, supplies, manufacturing and contracts; establish critical infrastructure to stimulate development in host Communities; attract new businesses to strategic locations in host communities; and sustain growth of host community entrepreneurs through funding and policy support.
CCG is anchored on four (4) broad pillars. The pillars include project office; employment and human capital development; procurement of goods and services; and funding.
Sections 25, 26 and 27 of the NOGICD act grants the Board the power to require operators to maintain project offices in the catchment area where the project is located and an office in the community where they have significant operations. The sections also require that the operator shall locate within the project office, personnel with decision-making authority in accordance with a list of personnel to be approved by the Board.
“Operations and/or projects above $100 Million or duration above 2 years shall open and maintain a project office in the catchment area as part of the Project Organization. Inclusion of this requirement shall be considered a Nigerian content requirement in the review of the Nigerian Content Plan by the Board. Certificate of Authorization to proceed with
the project may not be granted by the Board on account of non‐submission of plan to open a project office in the catchment area,” the guideline states.
On Procurement of Goods and Services , the guideline notes that Compliance will be evaluated based on actual amount spent on contracts executed in the host communities.
“The Project Office established in a catchment area shall be given powers to take procurement decisions in favor of the host Community Contractors, on items relevant to the needs of the Project. These items include procurement of consumables (water, stationeries, printer cartridges, etc.), provision of services such as catering, logistics support(trucks, boats, houseboats, stores, warehouses, labour, etc.),supply of paints, PPEs, and others services and projects where capacity exist in the host Community. Quarterly procurement reports shall be submitted to NCDMB demonstrating that at least 30% of procurement opportunities were accessed by Entrepreneurs from the host community,” it notes.
