C1953

1113. 97 NIGERIAN OIL AND GAS INDUSTRY CONTENT

DEVELOPMENT BILL, 2008

,kJ,1,,-\N6EN1FN7 OF CLAUSES

Cld a rc
PART I - NIGERIAN CONTEN: DEVELOP ^rENz :N 0:: Acv GAS INvtS:mv

1. Application of the Act.

2. Nigerian content as management philosophy for project execution.

3. First consideration in all operations and contracts.

4. Role of Nigerian Content Division.

5. Promotion of measurable growth in Nigeria Content.
6. Conformity of petroleum arrangements and other agreements.

7. Submissl in ofNigerian Content Plan for all projects.

8. Certificate oof' -'authorization.

9. Public Rcvicw of Plan.

10. Contents of Operator's Nigeria.
11. Minimum cod sroccificationof Nigerian content.
12. First Consideration For Nigerian Goods and Services.

13. Contents of Ong ncrator's Nigeria Content Plan.

14. Principle of lEid F cluation.

15. iFuil and fair oporn,rlity for Nigerians.

5. Princil;:c of Bid Evaluation.

List of Contracts to be Submitted to the Board.

18. Submission ofjL;b forecasts, etc. to Board.

19. Designation of contract for review.

20. Document to be Submitted to the Board during Pre-qualification Stage.

21. Document to be Submitted to Board during Bidders List Stage.

22. Document to be Submitted to the Board during award stage.

23. Design_ition surd Review of contract,

24. Quarterly Procurement Report.

25. Establishment o^° Local Office.

26. Personnel for local office.
C 1954

27. Office in community of operation.

28. First Consideration For Employment and Training.

29. Submission of Employment and Training, Plan.

30. Training of Nigerians.

1. Requirement for succession plan and \ igerianizat1on of positions.

32. Allowance for expatriate positions.

33. Approval of Board for application for expatriate quota.

34. Requirement for Labour Clause.

35. Compliance with Nigerianizationpolicy.

36. Research and Development Regulations.

37. Programme for Research and Development.

38. Submission and content of Research and Development Plan.

39. Report on Research and Development.

40. Regulations for training at Petroleum Training institute.

41. Regulations to further growth of indigenous capacity.

42. Regulations for registration with Nigerian professional bodies
43. Programme for Technology Transfer.
44. Submission of technology transfer plan.
45. Support of technology transfer.

Technology Transfer Report.

47. Regulations to establish operations in Nigeria.

48. Fiscal incentives.

49. ,Insurance and reinsurance business.

50. National Insurance Commission approval for offshore insurance.

51. Legal Services.

52. Financial Services.

53. Prohibition of importation of welded products.

54. Petroleum e- ma rketp face.

55. Establishment of Joint Qualification System.

56. Functions ofJoint Qualification System.

57. Setting up of Nigerian Content Consultative Forum.

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58. Composition of Nigerian Content Consultative Forum.

59. Powers of NCMB to monitor implementation ofAct.

60. Requirements for submission of Nigeria content performance report.

61. Content of Nigeria content performance report.

62. Assessment and verification of N igeria content performance report.

63. Directives to facilitate reporting Directives to fiiCilitate reporting.

64. Access to facilities for assessment and verification purposes.

65. Requirements for third party access and reportiMc.
66. Responsibility to communicate Nigerian content policies to contractors.

67. Responsibility of Board for enlightenment on Nigerian content.

68. Offences and penalty.
PART II - ES TABLISF-L IE\T OF T_rE NIGERIA CO\TEy MO\ZiOR:\C 130.1RD

69. Establishment of'the Nigeria Content Monitoring Board.

70. Functions of the Board.

71. Establishment of the Governing Council of die Board.

72. Composition of the Council.
73. Appointment.

74. Membership of the Council.

75. Status of Appointment of Executive Secretary.

76. Powers of the Council.
77. Tenure of Office.

78. Cessation of Membership of Council.

79. Replacement of membership.
80. Removal of member.

81. Remuneration of the members.

82. Executive Secretary.

83. Functions of the Executive Secretary.

84. Tenure of office.

85. Remuneration of the Executive Secretary.

86. Cessation of office.

87. Resignation of appointment.

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88. Other staff.

89. Direct appointment.

90. Transfer of Service.

91. Directorates.
92. Service in the Board Cap. No. 2 2004.

93. Funds of the Board.

94. Budgetary Estimates.

95. Gift to the Board.

96. Expenditure and account.

97. Audit and Account.

98. Auditor-General.
99. Acquisition of land or interest in land for office use. Cap. L5 LFN.

100. Legal Proceedings against the Board. Cap. P41 LFN.

101. Restriction on execution against property of the Board.

102. Indenmity of officers.

103. Service of documents.

104. Engagement of professionals and other staff.

105. Power of the Minister to give Directive to the Board.

106. Regulation.
107. Review of Schedule.
108. Transfer of implementation of Nigerian content to Nigerian Content Monitoring Board.

109. Establishment of Nigerian Content Development Fund.

110. Coastal and Inland Shipping (Cabotage) Act No. 5 2003.

111. Locus staiidi and special jurisdiction of the Federal High Court.

112. Interpretation.

113. Citation.

SCHEDULE
 (" 19,57

A BILL
FOR
AN ACT TO PROVIDE FOR T.-E DEVELOPMENT OF NIGERIA CONTENT IN
'E TE NIGERIAN O:L ,ANT) GAS INDUS _RY ; FOR NIGERIAN CONTENT PLA.\ ; FOR
SL?ERVIS:ON, COORDINATION, MONITORING AND IMPLEMENTATTCN OF
NIGERIAN CONTENT AND FOR :MATTERS INCIDENTAL -THERETO

HON. T.AMARAUTARE 131PISIBE HON. 13ALA AL:u BANA'E

HON. DANIEL REYENIEJU
HON. 13ASSEY ET:\I
HON. YuSLuF M. TUGGAR
HON. IOR\VAS E 1-1. HEMBE
HoN. ABBAS OIOPOENIA
HoN. AUSTIN \\vACI-ILI;wli
HON. ABDLLAZIZ ABUEAKAR Y.
EON. SADA Soul JIBIYA
HON. AM:N2t MUSA KOKO
HON. BETHEL AMAD:
HON. IE CHIN-\\O
HoN. BABAGAN.A TIJAN
HON. ALI ATM USMAN AIDOKc
HON. AI,\EA OJO\_0
HON. YACOOB E. A. ALEBIOSU
HON. C. I. I). MADUARUM
HON. IBR4IIIE: BA\VA KA\IBA
HON. IFALUYI ISIBOR
HoN. D.AEau K UNAIYI- AI;P.ANAH
RoN.OL.AKA \\voGU

Commence-
mcr.t.

BE IT ENACTED by the National Assembly of the Federal Republic of

'Nigeria as follows:

PART I - NIGERIAN CONTEN-T DEVELOPMENT IN O:L AND GAS INDUSTRY

1. N otwidnstanding anything to t11e contrary contained in the Petroleum Application of

the Act.
Act or in any other enactment or law, the provisions of this Act shall apply to
all matters pertaining to Nigerian content in respect of all operations or

transactions carried out in or connected with the Nigerian oil and gas industry.

2. All regulatory authorities, operators, contractors, subcontractors, Nigerian

Content as
alliance partners and other entities involved in any project, operation, activity managemen:
philosophy for
or transaction in the Nigerian oil and gas industry shall consider Nigerian project
execution.
content as an important element of their overall project development and
management philosophy for project execution.

3.-(1) Nigerian independent operators shall be given first consideration Firs:

considerat.on
in the award of oil blocks, oil field licenses, oil lifting licenses and in all in all
operations and
projects for which contract is to be awarded in the Nigerian oil and gas industry contracts.
 C 1958 2008 No.
Nigerian Oil and Grt c lnd zcuy C onteni Development

I subject to the fulfilment of such conditions as may be specified by the Minister.

2 (2) Compliance with the provisions of this Act and promotion of'Nigerian
3 content development shall he a major criterion for award of licenses, permits
4 and any other interest in bidding for oil exploration, production and development
5 or any other operations in Nigerian oil and gas industry.
Role of
Nigerian 6 4. The Nigeria Content Monitoring Board ("the "Board") established in
Content
Monitoring
7 accordance with this Act shall make procedure guides and monitor, coordinate
Board. $ and implement the provisions of this Act.
Promotion of
measurable 9 S. The Board shall implement the provisions of this Act with a view to
growth of
Nigerian 10 ensuring a measurable and continuous growth in Nigerian content in all oil and
content.
11 gas arrangements, projects, operations, activities or transactions in the Nigerian
12 oil and gas industry.
Conformity of
petroleum 13 6. Upon the commencement of this Act, all subsequent oil and gas
arrangements 14 arrangements , agreements, contracts or memoranda of understanding relating
and other
agreements. 15 to any operation or transaction in the Nigerian oil and gas industry shall be in
16 conformity with die provisions of this Act.
Submission of
17 7. In the bidding for any license , permit or interest and before carrying
-Nigerian
content Plan
18 out any project in the Nigerian oil and gas industry, an operator shall submit a
for all
projects. 19 Nigerian Content Plan ("plan") to the Board demonstrating compliance with
20 the Nigerian content requirements of this Act.
Certificate of
Authorization.
21 S. The Board shall review and assess the plan and if satisfied that the
22 plan complies with the provisions of this Act, issue a Certificate of'Authorization
23 (Certificate) to the operator for that project.
Public Review
o` plan.
24 9. For purposes of'reviewing or assessing the plan, the Board may conduct
25 a public review in relation to the exercise of any of its functions under this Act

26 provided that any such review or assessment is completed and certificate issued
27 or denied within 30 days from the date of commencement of such review or
28 assessment.
Contents of 29 10.- (1) A plan
operator's shall contain provisions intended to ensure that -
Nigerian 30 ( a) first consideration shall be
Content Plan..
to services provided from within
31 Nigeria and to goods manufactured in Nigeria: and
 Nueefian Oil and Ga.c lnduscr-y Content Development 2005 No. C 1959

1 (b) qualified Nigerians shall be given first consideration for training and
2 employment in the work programme for which the plan was submitted.

3 (2) Any collective agreement entered into by the operator or other body

4 submitting the plan with any association of employees respecting terns and

5 conditions of employment in the project shall contain provisions consistent with

6 this section.

7 11.-(1) As from the commencement of this Act, the minimum Nigerian Minimum and
specification
8 content in any project to be executed in the Nigerian oil and gas industry shall of Nigerian
content.
9 be consistent with the level set in Schedule A to this Act.

10 (2) Where a project description is not specified in Schedule A to this Act,

11 the Board shall set the minimum content level for that project or project item

12 pending the inclusion of the minimum content level for that project or project

13 item trough an amendment of Schedule A by the National Assembly.

14+ (3) All operators, alliance partners and contractors shall comply with die

15 minimum Nigerian content for particular project item, service or product

16 specification set out in Schedule A to this Act.

17 12. Subject to section 7 of this Act, the Nigerian Content Plan submitted First
consideration
18 to the Board by an operator shall contain a detailed plan, satisfactory to the for Nigerian
goods and
19 Board, setting out how the operator and their contractors will give "first crvices.

20 consideration" to Nigerian goods and services, including specific examples

21 showing how "first consideration" is considered and assessed by the operator in

22 its evaluation of bids for goods and services required by the project.

23 13. The Nigerian content plan submitted to the Board by any operator or Contents of
Operator's
24 alliance partner shall contain detailed plan on how the operator or its alliance Nigerian
Content Plan.
25 partner intend to ensure the use of locally manufactured goods where such
26 goods meet die specifications of the industry.

Z7 14. All operators shall consider Nigerian content when evaluating any Nigerian
content in bid
28 bid; where bids are otherwise equal, the bid containing the highest level of evaluation.,
29 -Nigerian content shall be selected.

30 15. All operators and alliance partners shall maintain a bidding process Full and fair
opportunity
31 for acquiring goods and services which shall give full and fair opportunity to for Nigerians.
C 1960 2008 No. Ni eiiarl Oil and 6/is Industry Colmrenr i3 t vVopznenr

1 Nigerian indigenous contractors and companies.

Principe of 2 16. The award of contract shall not be solely based on the principle of the.
!yid
evaluation. 3 lowest bidder: where a Nigerian indigenous company has capacity to execute

4 such job, the company shall not be disqualified exclusively on the basis that it

5 is the lowest financial_ bidder. provided the value does not exceed the lowest bid

price by 10 percent.

List of 7 17.-(1) For all proposed pro' cts_ contracts, subcontracts and purchase
Contracts to
be submitted
8 orders estimated by the operator to be in excess of SI.000.000 (USD). the
the Board.
9 operator shall provide to the Board for approval, advertisements. pre-qualification

10 criteria. technical bid documents, technical evaluation criteria and the proposed

11 bidders lists.
12 (2) The operator shall submit sufficient information with the notifications

13 to enable the Board assess the subject matter and to be satisfied that the

14 requirements for Nigerian content have been complied with by the operator.
Submission of 15 18.-(1) The operators shall submit to the Board, thirty days prior to the
job forecasts
etc, to Board 16 first day of each quarter, a list of all contracts, subcontracts and purchase

17 orders, exceeding S1,000,000 (USD), which will be bided or executed in the

18 upcoming quarter.
19 (2) For each contract, subcontract and purchase order, the list should

20 provide-
21 (a) a description of the service(s)/item(s) to be contracted/purchased

22 (material and equipment specifications shall be provided upon request)

23 (b) estimated value of contract, subcontract or purchase order;

24 (c) the Anticipated Request for Proposal (RFP) issuance date, RFP closure

25 date and award date; and

26 (a) any other information requested by the Board for purposes of

27 implementing the provisions of this Act.

Designation of 28 19. Subject to Section 17 of this Act, the Board shall advise the operator,
C101111-ac'. for
review. 29 by the first day of each quarter, which contracsts and sub-contracts have been

30 designated by the Board for review and shall advise the operator of the outcome

31 of such contract review.

 Nigerian Oil and Gas lndu err r^ Conion! De vek^pr,^enr 2008 No. C 1961

I 20. Prior to issuing a pic-qualiticatiotl notification to prospective bidders. Docunte;a to

be Submitted
2 the operator shall submit to the Board the following- to the Board
during Prc-
3 (a) a description of'the scope of work;
yualification
stage.
4 (b) a copy of die pre-qualification notification, if these documents differ
5 from the standard pre-qualification notification previously reviewed by the
6 Board;

7 (c) a list of companies, indicating locations of head offices, to whom

8 questionnaires will be issued; and

9 (a anticipated dates for closure of pre-qualification and issuance of a

10 Request for Proposals (RFP) or a Request for Quotations (RFQ).

11 21. For purposes of compiling a bidding list for any project, the operator Docuuteta to
be subtaitted
12 or alliance partner shall submit to the Board, prior to issuing a RFP or RFQ, to Boarc
during bidders
13 the following-
list stage.
14 (a) list of bidders;
15 (b) a copy of die RFP/RFQ; (die Board will advise the operator of its
16 requirements in this regard on a case by case basis);

17 (c) a description of corporate ownership (main shareholders by percentage)

18 of bidders;

19 (a) location(s) of any Nigerian based office, plant or facility;

20 (e) anticipated dates for closure of bids and award of contract or purchase
21 order; and

22 (t) any other information requested by the Board.

23 22. Prior to the award of contract or purchase order to the selected Documei:t to
be subtaitted
24 bidder, the operator shall submit to the Board the following- to the Board
during award
25 (a) the name of the selected contractor or vendor; stage.

26 (b) a list of designated sub-contractors or sub-vendors;

27 (c) where applicable, a list of proposed sub-suppliers;

28 (d) for construction or service contracts; the estimated Nigerian

29 employment (inperson-hours);

30 (e) contract/purchase order commencement and completion dates;

31 (1) Award Notification Form signed by an appropriate official of the

C 1962 00S : o. Vi ° riim Oil, m! Gas Lldii. irv C of oen/ Dc t-clor'incnm

1 operator
^j statement ofaward rationale (evaluation ofbids) showing:
(^) percentage difference iuprice bet een selected bidder and each

4 bid:
(ii) primary location(s) of work associated with each bidder;

6 (Iii) estimates of Ni`eriatt content associated with the bid of each

7 bidder calculated in accordance with the definition of Nigerian content

8 to be provided by the Board: and

9 (iv) other information relevant to the evaluation of bidders including

10 where applicable, a sunimary+ of the technical, commercial and Nigerian

1 content aroects of the hid evaluations.

Oesienat:on
12 23. Upon assessment of the documentation received in compliance with
and review of
13 section 19 of this Act. the Board will advise did operator, within 10 days, which
contracts.
14 contracts, subcontracts and purchase orders have been designated by the Board
15 for review, and the designated contracts, subcontracts and purchase orders

16 shall be reviewed to the satisfaction of the Board.

Quarterly
17 24. The operator shall submit to the Board, within thirty (30) days of the
Procurement
18 end of each quarter. a listing of all contracts; subcontracts and purchase orders,
Report
19 exceeding S1,000.000 (LSD) or such other limit as the Board may determine,

20 awarded in the previous quarter. This listing should provide-

21 (a) a list of all items and services;

22 (h) value of contract/purchase order;
23 (c) name of successful contractor/vendor;

24 (d) primary location of work;

25 (e) estimates of Nigerian content;

26 (fj commencement and completion date; and
27 (g) any other information required by the Board for purposes of

28 implementing the provisions of this Act.

Establ islunent 29 25. Where applicable. before carrying out any work or activity in Nigeria,
o' Local
Office. 30 the operator or other body submitting a plan shall establish in the Local

31 novernment Area where the project is to be located, a project office where

 A 'trethuj Oil and G s lndusu'v Content Development 2008 No. C 1963

I project management and procurement decision making are to take place, to the
2 satisfaction of the Board.

3 26. The operator shall locate within the project office, personnel with Persoi el for
4 decision-making authority in accordance with a list of personnel to be approved local office.

5 by the Board.

6 27. Subject to section 25 of this Act. the Board shall have powers to office in
conunuuity of
7 require any operator to maintain office(s) in a Community where. the operator operation'

8 has signiticant operations.

9 28. Subject to section 10, subsection (b) of this Act, qualified Nigerians Firse
consideration
10 shall he given the first consideration for employment and training in any project for
employment
11 executed by any operator in the Nigerian oil and gas industry. and training.

12 29. The Plan submitted by any operator for any project shall contain an submission of

13 Employment and Training Plan (E&, T Plan). The E&T Plan shall include- Emp;oymen:
and Training
14 (a) an outlineof die luring and training needs of the operator, and operators Flan.

15 major contractors with a breakdown of the skills needed, anticipated skill

16 shortages in the Nigerian labour force, project specific training requirements,

17 and the anticipated expenditures that will be made directly by the operator

18 in implementing the E&T Plan as a forecasted and actual expenditures;

19 (b) a tinne frame for employment opportunities for each phase of project

20 development and operations, to enable members of the Nigerian workforce

21 to prepare themselves for such opportunities;

22 (c) the operator shall report to the Board quarterly on employment and

23 training activities for the reporting period and compare this to the Employment

24 and Training Plan. The quarterly report shall include number of new

25 employees hired during the year and their place of residence at the time of
26 hiring and their employment status; and

27 (tit any other information required by the Board for purposes of

28 innplennenting the provisions of this Act.

29 30. Where Nigerians are not employed because of their lack of training, Training of
30 the operator shall ensure, to the satisfaction of the Board that every reasonable Nigerians.

31 effort is made within a reasonable time to supply sued training locally or

C 1964 2008 No. Nieei- an Oil and Gas Indusu v Content Dev°elopivent

I elsewhere. Such effort and the procedure for its execution shall be contained in

2 the operator's Employment and Training Plan.

Requirement 3 31.-(1) For each of its operations, the operator shall submit to Board a
for succession
plan and 4 succession plan for any position not field by Nigerians. Such succession plan
\igerianisation.
5 shall provide for Nigerians to understudy each incumbent expatriate for a

6 maximum period of four _years. At the end of the four year period the position

7 shall become Nigerianised.

8 (2) All Nigerianised positions shall attract salaries, wages and benefits

9 as provided for in the operators' conditions of service for Nigerian employees.

Allowance for 10 32. For each of its operations, an operator may retain a maximum of five per
expatriates
positions. 11 cent of management positions as expatriate positions to take care of investor interests.

Approval of 12 33. Upon the commencement of this Act, all operators shall make
Board for
application 13 application to and receive the.approval of the Board before making any application
for
expatriates. 14 for expatriate quota to the Ministry of Internal Affairs or any other agency or

15 Ministry of the federal Govern vent. The application shall be detailed and shall

16 include job titles, description of responsibilities, the duration of the proposed

17 employment in Nigeria and any other information required by the Board for

18 purposes of implementing the provisions of this Act.

Requirement 19 34. zNotwitlhstanding the provisions of the Schedule to this Act, all projects
for Labour
Clause. 20 or contracts whose total budget exceeds S100 million (USD) shall contain a

21 "Labour Clause" mandating the use of a minimum percentage of Nigerian

22 labour in specific cadres as may be stipulated by the Board.

Compliance 23 35. All operators and companies operating in the Nigeria oil and gas
with
\ioerianisation. 24 industry shall employ only Nigerians in their junior and intermediate cadre or

25 any other corresponding grades designatedby the operator or company.

Research and 26 36. The Minister shall make Regulations with requirements and targets
Development
Regulations. 27 for the growth of Research and Development in the Nigerian oil and gas industry.

Programme 28 37. For every project for which a Plan is submitted, an operator shall
for Research
and 29 carry out a programme and make expenditure, to the satisfaction of the Board,
Develooment.
30 for the promotion of eduefition, attachments, training and research and

31 development in Nigeria in relation to its work programme and activities.