Nigerian Content Development Short Term Directives Rev. 2

Sequel to Revision 1 of the Nigerian Content Development directives issued to the industry by our letter ref. GMD 144 dated 13th December 2005 and feed back from industry stakeholders, the directives are further revised as follows:

FEED and detailed engineering design for all projects is to be domiciled in Nigeria.

Project Management Teams and Procurement center for all projects in the Nigerian Oil and Gas industry must be located in Nigeria.

Henceforth, all operators and project promoters must forecast procurement items required for projects and operational activities and forward the Material Lists of NCD on or before 31stary of every year. Also, a Master Procurement Plan (MPP) for ongoing and approved projects should be submitted to the Nigerian Content Division of NNPC on or before 31st January of every year.

Fabrication and integration of all fixed (offshore and onshore) platforms weighing up to 10,000 tonnes are to be carried out in Nigeria. For the fixed platforms (offshore and onshore) greater than 10,000 tonnes, all item directive 5, pressure vessels and integration of the topsides modules are to be carried out in Nigeria.

Henceforth, fabrication of all piles, decks, anchors, buoys, jackets, pipe racks, bridges, flare booms and storage tanks including all galvanizing works for LNG and process plants are to be done in Nigeria.

Henceforth, all flow lines and risers must be fixed and must be fabricated in Nigeria except for special cases to be demonstrated and approved by NCD.

Henceforth, Assembling, testing and commissioning of all Sub sea valves, Christmas tees, wellheads and system integration tests are to be carried out in Nigeria.

All FPSO contract packages are to be bid on the basis of carrying out topsides integration in Nigeria. A minimum of 50% of the total tonnage of FPSO topsides modules must be fabricated in Nigeria.

All third party services relating to fabrication and construction including but not limited to NDT, mechanical tests, PWHT as well as certification of welding procedures and welders must be carried out in Nigeria. Nigerian Institute of Welding must certify all such tests in collaboration with international accreditation bodies.

All operators and project promoters must ensure that recommendations for contract awards in respect of all major projects being forwarded to NNPC/ constituted boards of such oil and gas companies for approval must include evidence of binding agreement by the main contractor with Nigerian Content Subcontractor(s). Such agreements shall indicate the cost and detailed scope including total man-hours for engineering, tonnage and man-hours of fabricator and relevant defining parameters for materials to be procured locally as well as other services.

Henceforth, all low voltage Earthing cables of 450/750V grade and Control, Power, Lighting Cables of 600/1000V grade must be purchased from Nigerian Cable Manufacturers.

Henceforth, all line-pipes, Sacrificial anodes, Electrical switchgear paints, ropes, pigs, heat exchangers and any other locally manufactured material and equipment must be sourced from in-country manufacturers.

All carbon steel pressure vessels shall be fabricated in Nigeria.

All seismic data acquisition projects, all seismic data processing projects, all reservoir management studies and all data management and storage services are to be carried out in Nigeria.

Henceforth, all waste management, onshore and swamp integrated completions, onshore and swamp well simulations, onshore fluid and mud solids control, onshore measurement while drilling (MWD), logging while drilling (LWD) and directional drilling (DD) activities are to be performed by indigenous or indigenous companies having genuine alliances with multinational companies.

Henceforth, coating of all line-pipes and threading of all oil country tubular goods (OCTG) are to be carried out in Nigeria.

Henceforth, all concrete barges and concrete floating platforms are to be fabricated in-country.

Henceforth, operation and maintenance off offshore production units, FPSO and FSO in particular, are to be performed by Nigerian companies.

All international codes and standards used in the country are to be harmonized to support utilization of locally manufactured products such as paints, cable, steel pipes, rods section, ropes etc. and to improve capacity utilization in local industries. Clauses that create impediments for/exclude participation of local companies in any ITT.

Operators and project promoters must ensure that recommendations for contract award for all drilling contracts shall a binding agreement at Technical Evaluation stage for the sourcing of Barite and Bentonite from local manufacturers.

Henceforth, all projects and operations in the Oil and Gas industry demonstrates strict compliance with procisions in the insurance Act 2003 and submit a certificate of compliance issued by NAICOM to NCD as part of technical evaluation requirements for insurance or reinsurance contracts. In this respect, NAICOM verified Gross underwriting capacity of Nigerian Registered Insurance companies must be fully utilized to maximize Nigerian Content before ceding risk offshore.

Henceforth, all projects and operations in Oil and Gas industry must demonstrate strict compliance with provisions of the Cabotage Act.

All operators and service providers must make provisions for targeted training and understudy programmes to maximize utilization of Nigerian personnel in all areas of their operations. All operators must therefore submit detailed training plans for each project and their operations.

The revised guidelines above supersede the precious guidelines issued under letter ref: GMD. 144 dated 13th December 2005 and are for your continuous guidance in the implementation of the Nigerian Content Development policy.

Signed

GMD, NNPC

Source: Nigerian Local Content Development unit, NNPC Headquarters, Abuja.

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