A paper delivered by Mr Nathaniel Etim-Ukut of the NCDMD-NNPC Group. 
At the 4th Nigerian Dredging summit and Exhibition Calabar 2010. 
Held at Amber Tinapa Hotel Adiabo Calabar on Sept 22-24, 2010. 
Organized by Dredge Skills and Marine Training Centre Ltd, Lagos.

Outline
o	Overview/Introduction
o	Implementation Framework under the Act
o	Key thrust of the Act
o	Implementation Imperatives
o	Focus Areas for National Impact
o	Opportunities for Local Participation
o	 Conclusion

Introduction

•	The Nigerian Oil and Gas Industry is made up of:

•	UPSTREAM  SECTOR
•	MIDSTREAM SECTOR
•	DOWNSTREAM SECTOR
 Upstream Sector
	This is a critical sector and it involves activities upstream of the measurement point(s) of a petroleum mining lease related to the winning of crude oil, gas, and condensate through wells from petroleum reservoirs, drilling, completing and operation of the wells, construction and operation of gathering lines and manifolds, etc. And also construction and operation of offshore facilities, etc.   

Midstream Sector

	Midstream crude oil and gas operations are activities downstream of the measurement point(s) of petroleum mining lease, with respect to the construction and operations of crude oil/ gas transport pipelines, including related pumping stations;  tank farms, refineries, GTL plants , LNG plants, etc.
Downstream Sector

	This sector consists of the sale and distribution of petroleum products as well as storage and product pipeline activities.

	It also include the construction and operation of facilities using natural gas, such as power plants, plants for production of fertilizers, ammonia, aluminum methanol, etc.

Current National Economic Indices In The Industry
•	Oil and Gas Industry is capital intensive. Out of $20billion of Industry Spend, less than $4billion is retained in Nigerian economy.
•	An estimate of over 150 times more jobs are created  in other countries than in Nigeria when Nigerian Projects are being executed.
•	Performance of mega-projects in oil and gas abroad eliminates opportunities to develop human and infrastructural capacities.
•	Ownership profile of marine assets supporting industry activities has a current ratio of about 280 Foreign-owned vessels to a pitiable 20 Nigerian owned.
•	 etc. etc.  
 Government Intervention
o	 Setting up of Nigerian content Division (NCD)of NNPC- Purely regulatory\

•	Nigerian Content Development and Monitoring Board (NCDMB)- Has Legislative backing.
Nigerian Content Implementation Model 
Overview
Inauguration Of The Board
	The  National Oil and Gas Industry Content Development (NOGICD) Act was signed into Law on the 22nd of April 2010 by His Excellency, Dr Goodluck. Ebele. Jonathan, heralding a new implementation framework for the Nigerian Content Policy of Government. 
	
	The Act established the Nigerian Content Development and Monitoring Board (NCDMB) with a clear mandate to superintend over all matters pertaining to NC development in the Nigerian Oil and Gas industry
Inauguration Of The Board (Contd)
	The overarching concept of the Law is to have a single stand-alone legislation that covers all activities pertaining to NC development in the Nigerian Oil and Gas industry. Under the law, the Board is the only Government agency with the responsibility to develop, monitor and implement programs to ensure a steady growth of Nigerian Content.  
Implementation Framework
Organizational Interface – lines of sighng Council
The Council consists of —
(a) The Chairman who is the Honorable Minister of Petroleum Resources;
(b) Representatives of –
	(i) Nigerian National Petroleum Corporation,
	(ii) the Agency in charge of Technical regulation of the industry,
	(iii) Ministry of Petroleum Resources,
	(iv) Petroleum Technology Association of Nigeria,
	(v) Nigerian Content Consultative Forum,
	(vi) Council of Registered Engineers of Nigeria,
	(vii) National Insurance Commission; and
(c) The Executive Secretary who shall be the Secretary of the Council; (Contd) 
Nigerian Content Consultative Forum (NCCF)
Key thrust of Act
The key thrusts of the ACT are categorized into four (4) segments;
•	ORGANIZATION AND IMPLEMENTATION FRAMEWORK
The Act:
•	Creates Robust Nigerian Content Development & Monitoring Board empowered to make regulations (NCDMB) to enforce compliance.
•	Integrates NCDMB into planning and contracting  process to ensure Nigerian Content COUNTS in all industry activities and considerations.
•	Mandates utilization of electronic platform for efficient implementation and coverage of all spheres of industry-upstream, midstream, downstream, independents etc.
•	Requires increased stakeholder engagements in the NC Consultative Forum to create linkages to other sectors and makes provisions that mandates involvement of professional services. 
Key thrust of the Act (contd.)
•	INDIGENOUS AND COMMUNITY PARTICIPATION
The Act:
•	Requires increased participation by indigenes and defines an Indigenous company
•	Creates opportunity for integrating oil producing communities into mainstreams industry activity
•	Mandates the Board to carry out enlightenment and awareness programs of the Act (contd.)
•	DEVELOPMENT AND UTILIZATION LOCAL CAPACITY
The Act:
•	Promotes Education, Employment, Training, Research and Development. 
•	Requires multinational to Domicile proportion of assets in Nigeria-Promotes Indigenous Ownership of Equipment
•	Mandates local capacity development.- Gap analysis; design and implement interventions.
•	Provides dedicated Nigerian Content Development Fund (NCDF) for capacity building.
•	Create access for other sector services particularly insurance, banking, financial services, legal services and general.
Key thrust of the Act (contd.)
D.	NC TARGETS, COMPLIANCE MONITORING AND ENFORCEMENT
•	Sets  targets for specific work items to be executed in Nigerian .
•	Empowers the Honorable Minister to grant waivers under specific conditions.
•	Monitoring, measurement and tracking compliance.
•	Penalty for non-compliance.
 mperatives
•	Capacity limitations are obvious
•	3-year Waiver period largely sufficient for future capacity
•	Propose Strict Waiver Management procedure
•	Proactive approach to identify critical infrastructure, and resources to achieve Schedule targets and  put them in place 
•	No waiver will be recommended by the board without concrete steps by industry to create capacity in same area.
•	Funding from  diverse sources
•	NCDF
•	ITT requirement 
•	HMPR regulations
•	Investor funds

Implementation Imperatives
•	Grow the NCDMB to organizational maturity by establishing the institutional structures identified in the Act to strengthen its governance and operations.
•	Formally launch the Nigerian Content Development Fund to boost access of local players who are Nigerian Content compliant to funding at competitive rates.  
•	Develop and issue Regulations governing implementation of various aspects of the Act that need further elucidation.
•	Implement interventions to promote equipment ownership by Nigerians and establishment of critical strategic facilities and infrastructure for maintenance of equipment in Nigeria.
•	Establish a NOGIC Joint Qualification System to capture relevant operational and Nigerian Content data for tracking, monitoring and categorizing Nigerian Content performance across the entire Oil and Gas value chain.
NCDMB Focus for National Impact
•	Retention of over $10 billion out of an average annual Oil & Gas Industry expenditure of $20 billion in the Nigerian economy compared to the current sum of less than $4 billion.

•	Creation of over 30,000 direct employment and training opportunities considering the scale of activities to be domiciled in Nigeria.

•	Establishment of 3 to 4 new pipe mills to service the demands of the industry and other ancillary manufacturing plants for coatings, valves, fittings & components.
NCDMB Focus for National Impact (Contd)
•	Development of 1 or 2 dockyards and increased utilization of existing shipyards for maintaining marine vessels operating in Nigeria which currently sail out for their maintenance and dry docking.
•	Transformation of ownership profile of marine assets supporting industry activities from a current ratio of 20 Nigerian-owned vessels 280 Foreign-owned vessels to a more equitable ratio of 180 (Nigerian):120 (Foreign).
•	Integration of indigenes and businesses residing in the Oil producing areas into the mainstream of industry economic activity.
•	Capture of over 50 - 70% of Banking services, Insurance risk placements, and Legal services supporting industry activities and transactions.
Opportunities
	Location of project offices in the oil and gas producing communities will ensure that indigenous businesses have first hand knowledge of support services required for  projects in which they can participate.

•	Over 1,200,000 square km of seismic data acquisition and processing on land, swamp, offshore and deepwater;
•	Over 20 million man-hours and 500,000 MT of Fabrication opportunity in Engineering, Procurement, Construction and Installation (EPCI) of Platforms, FPSOs and other Oilfield facilities for Exploration & Production in Greenfield projects;
•	Scores of Drilling Rigs and hundreds of Pipe-lay Barges, Remote Operation Vessels, Marine Support Vessels, Installation Vessels, House and Service Boats;
•	Fleets of Tankers and Coastal vessels required to deliver Crude, Refined Products, LNG, LPG and other cargo to domestic, regional and international markets;

Opportunities (Contd)
•	EPCI for 3 major LNG plants and number of smaller floating plants with total capacity in excess of 35 MTPA with specialized storage, processing and load-out facilities; 
•	Over 10,000km of gas gathering and transmission pipelines under the gas infrastructure development master-plan ,  replacement of aging pipelines and facilities in our national distribution system;
•	More than 50,000 MT tonnes of equipment and facilties in brownfield projects and upgrades to existing Oilfield facilities;
•	Operation & Maintenance service contracts for the facilities and systems both Onshore and Offshore including cutting-edge deepwater technology which frequently involves remote interventions and Robotics.

Conclusion
	With the inauguration of the Governing Council in accordance with the provisions of the Act and the full support of the Federal Government to the implementation of the Act, the Board will forge ahead to build a  robust and ongoing collaboration amongst all key Stakeholders to ensure that Nigerian Content growth becomes a reality that forms the strategic framework upon which indigenous growth within the Oil and Gas sector of Nigeria is sustained.
Conclusion 
	The Nigerian Content Law provides the launchpad for Nigerians, Communities and Nigerian companies to participate in the Oil and Gas industry. However the law can only provide the intended benefits if stakeholders take ownership and work the Law.
Conclusion
Thank You