NCDMB Begins Audit Of Unremitted NCDF Deductions In Fourth Quarter

…Warns Oil Companies Against Sabotaging Local Content Law

From the fourth quarter of this year, the Nigerian Content Development and Monitoring Board will begin third party forensic audit of all unremitted deductions by oil and gas companies meant for the Nigerian Content Development Fund.

The impending exercise was announced by the Executive Secretary of NCDMB, Simbi Wabote on Monday at the Nigerian Content Seminar with theme; “Fortifying the Nigerian Oil and Gas Industry for Economic Stability and Growth.”

He announced that the Third-Party Forensic Audit of remittances for the years 2018, 2019, and 2020 are scheduled to begin by the fourth quarter of this year, adding that upon completion, this will bring the books to date on backlog of remittances.

He reiterated that the one per cent deduction from contracts awarded in the petroleum upstream sector is a statutory obligation, as provided under section 104 of the NOGICD Act, 2010.

Consequently, failure to remit NCDF deductions is a violation of the Act and, in fact, economic sabotage.

He also said the Board had recovered close to $100m of undisputed obligations from the Third-Party Forensic Audit of remittances between 2010 to 2017.

The disputed obligations, he noted, are being closed out to bring the exercise to a close.

He said, “In respect of the non-remittance of the Nigerian Content Development Fund, we have recovered close to $100m of undisputed obligations from the Third-Party Forensic Audit of remittances between years 2010 to 2017.

“The disputed obligations are being closed out to bring the exercise to a close. Ladies and gentlemen, let me use this opportunity to announce that the Third-Party Forensic Audit of remittances for the years 2018, 2019, and 2020 are scheduled to begin by the fourth (4th) Quarter of this year. Upon completion, this will bring our books to date on backlog of remittances.”

He also warned oil companies and other stakeholders in the sector against sabotaging the Nigerian Oil and Gas Industry Content Development Act.

The NCDMB Boss re-emphasized that compliance with the Act is the cornerstone of the success or otherwise of the local content practice.

Wabote said that some of delegates at the conference are beneficiaries of the NOGICD Act, adding that it would be quite uncharitable to turn around to sabotage efforts to broaden the envelope of domestication and domiciliation.

He said, “Let me use this opportunity to re-emphasize that compliance with the Act is the cornerstone of the success or otherwise of the local content practice.

“I make bold to say that some of delegates in the room today are beneficiaries of the NOGICD Act and it is quite uncharitable to turn around to sabotage efforts to broaden the envelope of domestication and domiciliation.

“Great companies self-regulate to do the right thing within the confines of their business environment thus making their interface with agencies of government seamless. Local Content must not be seen as a cost center but part of the business with several benefits all nations, businesses, and investors involved in the practice.

“Let me highlight that we are not helpless or oblivious of what to do as a regulator when it comes to dealing with recalcitrant defaulters. We are very pragmatic and only resort to the deployment of our powers when all efforts to bring offending parties to compliance fail.

“Let me also add that we are a regulator with the additional mandate to catalyze the development and growth in the industry.

“To all the operators, JV partners, co-venturers, contractors, service providers, and various stakeholders present in the room, let me re-emphasis that our desire is not to block or delay the implementation of any project.”

Wabote told the participants at the event that the NCDMB will continue to deploy the provisions of the NOGICD Act to fortify the oil and gas industry against attacks.

Specifically, he said the agency will leverage Sections 3, 12, and 28 of the NOGICD Act which state that first consideration shall be given to Nigerian operators in the award of blocks and licenses, to Nigerian goods and services in the evaluation of bids, and for the employment and training of Nigerians in any project executed in the Nigerian oil and gas industry.

“Let me emphasize that this is the law of the land and the default mindset for any reputable local or international operator or service provider is to comply,” he added.