By John Ikani
The Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Engr. Simbi Wabote has disclosed that the Nigerian Content Intervention (NCI) fund has exceeded $500m (half a billion dollars).
Engr. Wabote made the disclosure while speaking at the recently held Sub-Saharan African International Petroleum Conference (SAIPEC) organised in Lagos by the Petroleum Technology Association of Nigeria (PETAN).
The NCDMB boss who explained that the NCI fund is a component of the Nigerian Content Development Fund (NCDF), added that it is accumulated through one percent deductions from contracts awarded in the upstream sector of the oil and gas industry.
According to him, the NCI fund is deployed as a low-cost credit to qualified oil and gas companies, adding that it covers asset acquisition, project financing, manufacturing, working capital, loan refinancing, women in oil and gas as well as research and development.
Engr. Wabote went on to note that the Board is using the NCDF to catalyse the construction of modular refineries, gas processing plants, LPG terminals and bottling plants, LPG Cylinders manufacturing plants, lube oil blending plants, base oil production plant, methanol production plant, and many others.
He canvassed that a similar fund should be replicated at the continental level and utilized to develop huge mega oil and gas projects, particularly as world financial institutions were getting reluctant to finance hydrocarbon-related projects.
He said: “let me use this opportunity to once again canvass for the creation of an African Local Content Fund that could be utilised to set up a bank or finance institution to provide funding for the development of oil and gas projects in Africa. This is especially important against the backdrop of the reluctance and outright declaration by some banks and financial institutions to stop funding of hydrocarbon-related projects. I hope the AFRIEXIM Bank, AFDB, or the AU through the AFCFTA Secretariat need to institute a form of contribution, no matter how little, as a fund to support the continent’s need for funds.”
The Executive Secretary went on to explain that: “in our own case, the deduction of one percent of every contract awarded to any contractor, subcontractor, alliance partner or any other entity involved in any project, operation, activity, or transaction in the upstream sector of the Nigeria oil and gas industry has resulted in us having a pool of funds to support various intervention programmes.”
Speaking further, Engr. Wabote described the recent spike in crude oil prices above $90 a barrel as an excellent opportunity for African oil producers and its service providers to develop new fields, ensure the security of supply and affordability as well as increase revenue generation.
He noted that the price of crude oil has increased by 50 percent in 12 months and African oil producers should use the opportunity to also make plans towards energy transition, and lowering the cost of services.
Dwelling on the topic “Sub-Saharan Africa Local Content Collaboration Strategy,” Wabote stated that an enabling regulatory framework backed with the appropriate legislation is very fundamental in Local Content practice and commended African oil producers for putting in place investor-friendly laws to promote the oil and gas industry as well as ongoing collaboration among the countries to advance the local content journey.
Engr. Wabote noted that such laws will align with the goals of the Africa Continental Free Trade Agreement (AFCFTA) which seeks to create the world’s largest free trade area by integrating 1.3 billion people across 54 African countries, with the objective of tapping into a combined Gross Domestic Product (GDP) of over $3 trillion.
He described AFCFTA as the practice of Local Content on the continental level, noting that it is a huge trading and collaboration platform for the participating countries.
The NCDMB boss harped on the need for African oil producers to utilize existing cross-border infrastructures to unlock the development of stranded assets or bring energy closer to the people. He mentioned that the existing West Africa Gas Pipeline (WAGP) and ongoing AKK gas transmission infrastructure provide a good opportunity to serve regional markets. He also pointed out that the SHI-MCI yard in Lagos which is the only FPSO integration yard infrastructure in Africa has put Nigeria at a vantage position to serve the wider African market.
In his remarks, the Chairman, PETAN, Mr. Nicholas Odinuwe advocated for regional collaboration and innovation to enhance the future of the energy sector. He disclosed that the key enabler for the continent is to create a collaborative ecosystem between the local industry stakeholders alongside the African Continental Free Trade Area (AfCFTA).
Odinuwe encouraged governments across Africa to provide necessary incentives to attract private sector investments across the entire value chain which would trigger a massive economic revolution, human capital development, and deepen local content across the continent.