Ibekimi Oriamaja Reports.
The successful conversion of the Nigerian National Petroleum Company (NNPC) Limited into a company operating under the Companies and Allied Matters Act (CAMA) has ended the era of violation and disregard for Local Content laws by its upstream subsidiary, the National Petroleum Development Company (NPDC).
Track News has learned that, as the NNPCL continues to reposition itself as a limited liability company in accordance with the Petroleum Industry Act (PIA), the NPDC has promised to learn from its mistakes and make concerted efforts to comply with the provisions of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act and related regulations and guidelines.
Track News learned yesterday that key company officials made the commitment during a Nigerian Content sensitisation workshop facilitated by NCDMB’s key personnel, which was recently held in Benin, Edo State.
According to investigations, the NPDC’s decision to turn a new leaf came after years of noncompliance with the provisions of the NOGICD Act and other Nigerian content regulations issued by the NCDMB, the Act’s implementing agency.
The findings revealed that NCDMB had made several efforts in the past, particularly between 2016 and 2022, to bring NPDC into compliance with the NOGICD Act and the Board’s processes in its operations, but with little success when compared to other multinational and indigenous operators in the industry.
The first sensitisation workshop for NPDC officials was held in September 2016, according to Track News, to familiarize the company’s officials with the Board’s processes.
However, the company’s attitude did not improve significantly, prompting NCDMB to write the NPDC letters on November 22, 2018, and January 21, 2019, informing it of clear violations of the NOGICD Act and requesting that the company fulfill its statutory responsibility and attend meetings with the Board.
It was also discovered that NPDC’s actions did not correspond to the directives outlined in the letters, despite the fact that the NNPC’s subsidiary made no discernible efforts to address the non-compliance issues until the Local Content board issued a final warning in a letter dated June 6, 2022.
According to Track News, the NPDC requested the NCDMB to conduct a sensitization workshop for its key officials on key issues mandated by the NOGICD Act, the Board’s processes, and the Act’s expectations from operating companies.
Investigation revealed that some of the previous non-compliance infractions observed against NPDC included non-submission of statutory reports to the NCDMB, execution of projects and contracts without obtaining relevant NCDMB approvals, and procurement of 2624 joints of 12″3LPE coated line pipes procured from overseas without due consideration to in-country pipe mills and coating plants with such capacity.
Similarly, the national operator’s asset management teams were alleged to have delayed providing NCDMB with details of all ongoing projects, contracts, and services in order for NCDMB to effectively monitor Nigerian Content requirements.
According to some industry stakeholders, NPDC’s unimpressive attitude toward NOGICD Act compliance in the past may have been related to its status as a government-owned company and the mistaken belief that it was immune from significant sanctions by the NCDMB at the time.
According to the sources, those excuses were no longer valid now that NNPC Limited is a fully private company, hence the officials’ eagerness to comply with the NOGICD Act to avoid facing heavy sanctions similar to those meted out by the Board to other major players in the oil and gas industry, with potential serious impediments to their business operations.
Attempts to get NNPC to respond to this report were futile because the company’s spokesman, Mr. Garba Muhammad, did not answer his phone calls or respond to test messages sent to him as of the time this report was filed.
Following NNPCL’s incorporation as a CAMA company, as required by the PIA 2021, and its recent unveiling by President Muhammadu Buhari, its Group Chief Executive Officer (GCEO), Mallam Mele Kyari, assured that the company would operate in full compliance with relevant laws.
