NCDMB introduces stricter guidelines to eliminate unqualified firms from oil contracts

The Nigerian Content Development and Monitoring Board (NCDMB) has issued new guidelines for oil and gas contracts in Nigeria aimed at eliminating unqualified firms and middlemen from the sector’s procurement process.

The comprehensive regulations represent a significant overhaul of the contracting framework in Nigeria’s petroleum industry, with the NCDMB seeking to ensure that only competent and capable companies participate in oil and gas projects worth billions of dollars annually.

According to officials, the new rules are designed to streamline the contracting process, reduce inefficiencies, and prevent the practice of “fronting,” where unqualified companies win contracts only to subcontract the work to foreign firms or more capable operators, often inflating costs and compromising project quality.

“These guidelines will ensure that contracts are awarded to firms with genuine technical capacity, financial strength, and track records of successful project execution,” an NCDMB spokesperson said. “We are committed to building a transparent and efficient oil and gas sector that maximizes Nigerian content while maintaining international standards.”

The new framework includes stricter requirements for contractor registration, enhanced verification processes for technical and financial capabilities, and measures to prevent the proliferation of briefcase companies that have long plagued Nigeria’s oil sector.

Under the revised guidelines, companies bidding for oil contracts will be required to demonstrate verifiable experience, maintain certain levels of local capacity, and meet stringent qualification criteria before being eligible to participate in tenders.

The NCDMB also indicated that the new rules would help combat corruption and rent-seeking behavior by middlemen who have historically inserted themselves into the contracting process without adding substantive value, driving up costs for operators and ultimately affecting the sector’s competitiveness.

Industry analysts have broadly welcomed the initiative, noting that eliminating unqualified firms could improve project delivery timelines, reduce costs, and enhance the overall efficiency of Nigeria’s oil and gas operations.

However, some stakeholders have expressed concerns that overly stringent requirements could inadvertently exclude smaller Nigerian companies still building capacity, potentially limiting opportunities for indigenous participation in the sector.

The NCDMB emphasized that the guidelines strike a balance between ensuring quality and promoting genuine Nigerian content development, with provisions for capacity building and gradual qualification pathways for emerging local companies.

The new regulations are expected to take effect in the coming months, with the NCDMB planning stakeholder consultations and training sessions to ensure smooth implementation across the industry.