By Kehinde Ibrahim, Lagos
THE Nigerian Content Development and Monitoring Board, NCDMB, has unveiled a major reform of the oil and gas contracting process aimed at ensuring that only indigenous companies with proven technical and operational capacity secure industry contracts, as part of broader efforts to deepen local content implementation and eliminate the long-standing practice of contract racketeering.
The Executive Secretary of the NCDMB, Felix Ogbe announced the initiative on Monday while delivering the keynote address at the opening of the 2026 Nigeria Oil and Gas, NOG, Energy Week in Abuja. He was represented by the Board’s Director of Capacity Building, Abayomi Bamidele.
According to Ogbe, the reform is being implemented in collaboration with the Nigerian Upstream Petroleum Regulatory Commission, NUPRC, Nigerian Petroleum Exchange, NipeX, the Petroleum Technology Association of Nigeria, PETAN, the Oil Producers Trade Section, OPTS, and other key stakeholders in the petroleum industry.
He explained that the initiative aligns with the Presidential Directive on Local Content Compliance and is designed to ensure that indigenous companies with verifiable capabilities receive direct access to oil and gas business opportunities.
Ogbe noted that the Board had identified persistent challenges within the contracting process, where firms lacking the required expertise and infrastructure often secure contracts before transferring execution to more competent companies through subcontracting arrangements. According to him, the practice has continued to undermine genuine local manufacturers and service providers that have invested heavily in facilities, equipment and skilled manpower.
To address the problem, the NCDMB will commence a nationwide joint capacity verification exercise in the third quarter of 2026. Unlike previous assessments that largely relied on documentation and self-declarations, the exercise will involve comprehensive physical inspections of companies’ operational facilities, equipment and production capabilities.
Ogbe stressed that the Board intends to move beyond paper qualifications by conducting on-site assessments that will accurately determine the actual capabilities of indigenous contractors. He explained that the verification process would provide regulators with credible information on companies that possess the infrastructure, personnel and technical competence required to execute oil and gas projects successfully.
He stated that only firms with demonstrable capacity would qualify for future contract opportunities, adding that the audit would provide a comprehensive inventory of Nigeria’s industrial capabilities across various segments of the petroleum value chain.
According to him, the exercise will also expose companies that merely function as intermediaries by obtaining contracts without possessing the resources needed for execution before subcontracting the work to more capable operators.
He said the development has denied competent indigenous companies the opportunity to maximise returns on significant investments made in manufacturing plants, fabrication yards and specialised equipment.
Ogbe observed that it was unfair for companies that own production assets and maintain operational facilities to become subcontractors to firms that contribute little beyond contract acquisition. He maintained that the reform seeks to restore fairness to the procurement process by rewarding competence, investment and technical capability rather than connections or administrative advantage.
As part of the broader reform package, the NCDMB also announced the introduction of a harmonised contractor grading system that will replace the multiple classification frameworks currently adopted by different industry regulators.
Under the proposed arrangement, contractors will be assessed using a unified five-category grading model jointly developed by the NCDMB, NUPRC, NipeX and other industry stakeholders. Ogbe explained that the new framework would eliminate the inconsistencies that currently allow companies to receive different competency ratings from separate regulatory institutions.
He noted that a unified classification system would simplify contractor assessment, improve transparency in procurement processes and provide operators with a consistent benchmark for evaluating indigenous service providers across the industry.
Beyond improving contract administration, Ogbe said that the nationwide capacity audit would generate reliable data on Nigeria’s industrial capabilities, providing government agencies, investors and project developers with accurate information for planning future investments.
He added that the findings would also identify areas where targeted interventions are required to strengthen local manufacturing, technology development and specialised service delivery.
The NCDMB chief emphasised that the reforms have become increasingly important as Nigeria prepares for a new wave of major deep-water oil and gas developments expected to stimulate significant investment and increase demand for local engineering, fabrication and technical services.
According to him, the country must have a clear understanding of existing indigenous capacity before those projects commence. Where Nigerian companies possess the competence to execute projects, he said they should be given priority, while any identified gaps should guide future capacity development programmes and investment decisions.
Ogbe reaffirmed the Board’s commitment to achieving its target of raising Nigerian content participation in the petroleum industry to 70 per cent. He recalled that local content performance has grown significantly since the enactment of the Nigerian Oil and Gas Industry Content Development Act, increasing from less than five per cent before the legislation to approximately 61 per cent today.
Despite the progress, he acknowledged that many indigenous manufacturers continue to operate below installed capacity because of inadequate patronage, limited access to advanced technology and financing constraints.
He stressed that sustained business opportunities remain essential for companies to expand production, invest in new equipment and create additional employment.
Ogbe expressed confidence that the new contracting reforms, combined with the harmonised grading framework and nationwide verification exercise, would strengthen transparency, improve accountability and ensure that indigenous companies with genuine technical and operational capacity play a greater role in executing Nigeria’s oil and gas projects while advancing the country’s local content objectives.
