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On 22 April 2010, Nigeria adopted an act which provides for the development of Nigerian content in the Nigerian oil and gas industry: The Nigerian Oil & Gas Industry Content Development Act 2010, also known as the 'Local Content Act' or the 'Act'.
The new law seeks to increase indigenous participation in the oil and gas industry by prescribing minimum thresholds for the use of local services and materials and to promote the employment of Nigerian staff in the industry.
The Local Content Act derives from the Nigerian Content Policy which seeks to promote active participation of Nigerians in the petroleum sector without compromising standards. The policy also focuses on the promotion of value addition in Nigeria through the utilization of local raw materials, products, and services in order to stimulate growth of indigenous capacity.
All regulatory authorities, operators, contractors, subcontractors, alliance partners and other entities involved in any project, operation, activity or transaction in the Nigerian oil and gas industry are required to consider Nigerian content as an important element of their projects. Nigerian independent operators shall be given priority in the award of oil blocks, oil field and oil lifting licenses as well as in all projects for which contracts are to be awarded in the Nigerian petroleum industry subject to the fulfilment of conditions specified by the Minister of Petroleum Resources.
The following provisions are stipulated in the act:
On 30 July 2014, the Federal Government was reported to free up $500 million for projects fostering the development of local content in the sector, such as include the pilot pipe mill being developed at Polaku, Bayelsa State, the NCDMB Headquarters building project in Yenagoa, the Oil and Gas Industrial Park development in Utuoke, also in Bayelsa State, artisanal training programme being organised by the NCDMB in conjunction with the Federal University Utuoke, and a host of other activities.
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