NCDMB, NNPC, IOCs Sign Agreement, Target 6 MonthsOil Industry Contract Cycle

With the goal of quickly ramping up Nigeria’s flagging crude oil production, ensuring compliance with the provisions of the Nigerian Content Act, and timely approvals of documents,the Nigerian Content Development and Monitoring Board (NCDMB) on Monday in Abuja signed a Memorandum of Understanding (MoU) cum Service Level Agreement (SLA) with the Nigerian National Petroleum Company Ltd (NNPC Ltd) and five international oil-producing companies.

The SLA was conceptualised by the NCDMB and is intended to optimize the contracting cycle in the oil and gas industryand spur the speedy development of new oil and gas projects, contributing to increased oil production and improved national economy.

The agreement was signed by the Executive Secretary of NCDMB, Engr. Simbi KesiyeWabote, while thenew Executive Vice President Upstream of the NNPC Ltd, Mr. Oritsemeyiwa A. Eyesansigned onbehalf of the national oil company.

Other top industry officials who signed the agreement included the Managing Director of Shell PetroleumDevelopmentCompany(SPDC) and Country Chair, of Shell Companies in Nigeria (SCiN) Mr. Osagie Okunbor,and theChairman and Managing Director of ExxonMobil’s affiliates in Nigeria, Mr. Shane Harris. Othersincluded the Director of Joint Ventures for Chevron Nigeria, Mr. Iwueze Cosmas; the Managing Director, Nigerian Agip Oil Company Ltd, Mr. Fabrizio Bloomfied, and the Executive Director, Joint Ventures, Total Exploration and Production Nigeria, Mr. ObiImemba.

The Executive Secretary stated that the overall goal is to conclude the oil and gas industry’s tendering to contract award processes within six months, affirming his conviction that the target is realistic with all key parties now on board with the execution of the SLA. He expressed delight thatNNPC Limited signed up to the MoU, being the senior partner of the joint ventures and concessionaire of theproduction sharing contracts(PSC) arrangements that govern the operations of the industry.

Waboterecalled that NCDMB first introduced the 15-day Rule to the industry in 2017, when it promised that it would respond within 15 working days to any formal requestfor approvals in relation to projects execution. He noted that the rule was later formalized with an SLA in May 2017 with NigeriaLNG Ltd pioneering the process and breaking approval records in respect of the NLNG Train7 project.

He added that “the industry found the outcome impressive leading to the Independent Petroleum Producers Group (IPPG) signing the SLA in 2018 and Oil Producers Trade Section (OPTS) thereafter.”

Wabote reaffirmed that NCDMB is a business-enabling regulator, hinting that “this is attested to by our being recognised and awarded as the most efficient amongst the MDAs in 2022 by the Presidential Enabling Business Environment Council (PEBEC).

”We are also rated PLATINUM by the Bureau for Public Service Reforms in recognition of the self-imposed reforms of our processes.”

The NCDMB boss assured the industry that the SLA would not be an exception, adding that the Board would deliver its ownpart of the deal.

The SLA signed with the Nigeria LNG in 2017 was the first of its kind to be entered between a regulator and another entity in the oil and gas industry. The template was adopted for managing documentation, contracting and expatriate quota applications between the Board and international and local operating companies.

The agreement obligated NLNG to submit to the NCDMB documents like the Quarterly Job Forecast, Nigerian Content Plan, Bidders List, Nigerian Content Evaluation Criteria, Nigerian Content Technical Bid among others, while the Board had to respond on specific timelines. Should the Board fail to respond in accordance with the provisions of the SLA, the company couldproceed with its tendering process after informing the Board in writing or email.