The Nigerian Content Development and Monitoring Board (NCDMB) has announced a major reform that will ensure only indigenous companies with verified technical and operational capacity are awarded oil and gas contracts in the country.

This is a part of efforts to deepen local content implementation and eliminate the role of intermediaries within the industry.

The Executive Secretary of the NCDMB, Felix Ogbe, disclosed the development on Monday while delivering the keynote address at the opening ceremony of the 2026 Nigeria Oil and Gas (NOG) Energy Week in Abuja.

He was represented at the event by the Board’s Director of Capacity Building, Abayomi Bamidele.

Ogbe explained that the initiative is being implemented jointly 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), alongside other industry stakeholders, in line with the Presidential Directive on Local Content Compliance.

According to him, the reform is intended to ensure that oil and gas contracts are awarded exclusively to companies with demonstrable capacity while creating direct business opportunities for genuine Nigerian manufacturers and service providers.

As part of the implementation process, the Board will launch a nationwide joint capacity verification exercise during the third quarter of 2026. Unlike previous assessments that relied on paperwork or online submissions, the exercise will involve physical inspections of companies’ operational facilities.

“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 verification exercise is expected to identify companies that obtain contracts despite lacking the required expertise or infrastructure before subcontracting the work to firms with actual operational capabilities.

He said the existing practice has prevented competent indigenous companies that have invested in manufacturing plants and equipment from securing contracts directly.

“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 Executive Secretary also unveiled plans for a harmonised contractor grading system that will replace the multiple classification frameworks currently operated by different regulatory agencies.

Under the proposed arrangement, contractors will be classified using a unified five-category grading system developed jointly by the NCDMB, NUPRC, NipeX and other relevant stakeholders.

Ogbe explained that the reform would eliminate inconsistencies in contractor ratings across regulatory institutions.

“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.

He further stated that the nationwide capacity audit would provide government authorities and investors with dependable data on Nigeria’s industrial capabilities, supporting investment planning and identifying areas where additional intervention may be required.

According to Ogbe, the reforms are particularly significant as Nigeria prepares for several major deep-water oil projects expected to expand activities across the petroleum sector.

“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.

Reaffirming the Board’s long-term objective, Ogbe said the NCDMB remains committed to achieving 70 per cent Nigerian content participation in the country’s oil and gas industry.

He noted that Nigeria’s local content performance has increased from less than five per cent before the Nigerian Oil and Gas Industry Content Development Act came into force to approximately 61 per cent today.

Despite that progress, he observed that many indigenous manufacturers continue to operate below their installed capacity due to inadequate patronage, limited access to technology and financing challenges.

“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 optimism that the reforms would enhance transparency in contract awards, strengthen indigenous participation across the oil and gas value chain, and ensure that companies with verified capabilities play a central role in delivering Nigeria’s petroleum projects.