The Nigerian Content Development and Monitoring Board (NCDMB) has declared that only companies with proven technical and operational capacity will be eligible to secure oil and gas contracts under a new industry-wide reform aimed at eliminating intermediaries and strengthening local content implementation.
The Executive Secretary of the NCDMB, Felix Ogbe, disclosed this on Monday while delivering the keynote address at the opening of the 2026 Nigeria Oil and Gas (NOG) Energy Week in Abuja.
Represented by the Board’s Director of Capacity Building, Abayomi Bamidele, Ogbe said the reform was being implemented in collaboration with the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the Nigerian Petroleum Exchange (NipeX), the Petroleum Technology Association of Nigeria (PETAN), the Oil Producers Trade Section (OPTS) and other industry stakeholders in line with the Presidential Directive on Local Content Compliance.
According to him, the initiative is designed to ensure that contracts are awarded only to firms with verifiable capacity, while genuine Nigerian manufacturers and service providers gain direct access to business opportunities in the industry.
He disclosed that the Board would commence a nationwide joint capacity verification exercise in the third quarter of 2026, stressing that the audit would involve physical inspection of companies’ facilities rather than relying on documents or online submissions.
“Only companies with proven capacity will secure contracts. The outcome of the in-country capacity audit will provide a detailed understanding of existing capacities. It will no longer be about glossy presentations or attractive pictures on websites. We are going to physically verify what companies can do,” he said.
Ogbe noted that the exercise would expose companies that secure contracts without the necessary expertise or infrastructure before subcontracting the jobs to firms with actual operational capacity.
He said the practice had denied competent indigenous companies opportunities despite their investments in manufacturing facilities and equipment.
“It is painful when a company that owns the assets and manufacturing facilities ends up becoming a subcontractor to someone who merely won the contract without the required capacity. This initiative is designed to correct that,” he stated.
The NCDMB boss also announced the introduction of a harmonised contractor grading system that would replace the multiple classification models currently used by different industry regulators.
Under the new framework, contractors will be classified under a unified five-category grading system jointly developed by the NCDMB, NUPRC, NipeX and other relevant stakeholders.
He explained that the harmonised system would eliminate inconsistencies where companies receive different ratings from separate regulatory agencies.
“Currently, a company can be graded differently by NCDMB and NipeX. With this harmonisation, everyone will work with one classification system, ensuring consistency across the industry,” he said.
Ogbe added that the capacity audit would also provide government and investors with reliable information on Nigeria’s industrial capabilities, enabling better investment planning and helping identify areas requiring further development.
He said the reforms had become more critical as Nigeria prepares for several major deep-water oil projects expected to increase activities across the petroleum industry.
“We must know whether local companies have the capacity to execute these projects. Where the capacity exists, Nigerians should benefit. Where gaps remain, we will know exactly where intervention is required,” he said.
The Executive Secretary reaffirmed the Board’s commitment to achieving its target of 70 per cent Nigerian content in the oil and gas industry.
According to him, Nigeria’s local content performance has grown from less than five per cent before the enactment of the Nigerian Oil and Gas Industry Content Development Act to about 61 per cent currently.
He, however, observed that many indigenous manufacturers continue to operate below capacity because of limited patronage, inadequate access to technology and financing constraints.
“Capacity expansion can only happen when businesses are assured of patronage. There is no point establishing manufacturing facilities if there is no offtake,” he said.
Ogbe expressed confidence that the new reforms would improve transparency in contract awards, strengthen indigenous participation and ensure that companies with genuine capacity play a leading role in delivering Nigeria’s oil and gas projects.
