Nigeria’s oil and gas regulators are preparing to conduct a joint audit of local manufacturers and service providers in a move that signals a new phase in the country’s local content agenda, one that is increasingly focused on strengthening industrial capacity rather than simply increasing indigenous participation.

The exercise, expected to begin in the third quarter of the year, will see the Nigerian Content Development and Monitoring Board (NCDMB), the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), the Nigerian Petroleum Exchange (NIPEX), and the Oil Producers Trade Section (OPTS) harmonise how companies operating in the sector are assessed and classified.

Beyond creating a common grading system, the initiative is expected to provide a clearer picture of the capabilities that already exist within Nigeria’s oil and gas supply chain, helping operators identify local companies that can execute complex projects while reducing duplication in supplier verification and shortening procurement timelines.

For an industry preparing for a fresh wave of upstream investments, including several deepwater projects, the audit could determine how much of the value created by those investments stays within the Nigerian economy.

Speaking at the 25th Nigeria Oil and Gas (NOG) Energy Week in Abuja, the Executive Secretary of the NCDMB, Felix Omatsola Ogbe, said the country’s local content programme is entering a new stage where the emphasis is shifting from participation to competitiveness.

Represented by the Board’s Director of Capacity Building, Abayomi Bamidele, Ogbe said the next phase of growth would prioritise manufacturing, industrialisation, sustainability, capacity expansion and global competitiveness. That marks a significant evolution for Nigeria’s local content policy.

When the Nigerian Oil and Gas Industry Content Development Act was enacted in 2010, the immediate objective was to increase the participation of Nigerian companies in an industry long dominated by foreign firms. According to the Board, indigenous participation has since risen from less than five per cent to 61 percent, with local companies now owning strategic assets and executing projects across different segments of the oil and gas value chain.

But while Nigerian firms have secured a larger share of industry activities, translating that participation into a stronger manufacturing base has proved more difficult.

Many local manufacturers continue to struggle with limited access to finance, technology gaps and inconsistent market opportunities, leaving much of the industry’s equipment and specialised components still sourced from abroad.

According to Ogbe, unlocking the next phase of growth will require stronger collaboration between regulators, operators, financial institutions, manufacturers and service companies.

Also Read:

“Nigeria’s energy sector now has the capacity to support a vibrant manufacturing ecosystem,” he said. “However, many local manufacturers are faced with limited market access, technology gaps and financing constraints.”

The planned audit is expected to help address some of those challenges by identifying companies with the technical capacity to participate in major projects while creating a more transparent supplier database for operators.

It will also support seven planned deepwater developments, which are expected to generate substantial demand for locally manufactured equipment and specialised services over the coming years.

As part of the harmonisation framework, the industry has adopted a five-tier classification system for service providers. The framework recognises that not every company currently has the capacity to compete for large-scale contracts, but aims to create a pathway for growth.

Businesses classified as “Emerging Players” and “Essential Vendors” will receive targeted support through vendor development programmes designed to help them evolve into manufacturers and original equipment manufacturers (OEMs), broadening the country’s industrial base over time.

For the wider economy, the initiative reflects a growing recognition that increasing local content is no longer just about counting the number of Nigerian companies participating in the industry. The bigger challenge is ensuring those businesses can manufacture competitively, deliver at international standards and capture more value from the billions of dollars expected to flow into the energy sector.

If successful, the audit could do more than improve procurement processes. It could help strengthen domestic manufacturing, reduce reliance on imported equipment, create more skilled jobs and position Nigerian companies to compete beyond the country’s borders.

Alongside the planned audit, the NCDMB highlighted several initiatives aimed at building industry capacity, including the Nigerian Content Equipment Certificate Application Guidance Notes, the Field Readiness Training Programme, the Nigerian Content Trainers Registration Certificate, the Back-to-the-Creek Initiative and the Cradle-to-Career Academic Excellence Recognition and Advancement Programme.

For Nigeria, the challenge now is ensuring that the next wave of energy investment does more than increase production. It must also deepen local industrial capacity and create businesses capable of competing long after individual oil and gas projects have been completed.

Meiza Nigeria