NCDMB Pays Indigenous Firms $160m from $200m Intervention Fund

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Chineme Okafor and Kasim Sumaina in Abuja

The Nigerian Content Development and Monitoring Board (NCDMB) yesterday disclosed that $160 million has been accessed by indigenous oil and gas companies in Nigeria from its $200 million Nigerian Content Intervention Fund (NCIF).

The board also stated that in line with its 10-year strategic plan, it has set a target to ramp up compliance to Nigerian content regulations in the oil and gas industry from the current 28 per cent to 70 per cent in 2027.

Speaking to journalists at a media briefing, the Executive Secretary of NCDMB, Mr. Simbi Wabote, stated that the NCIF, which is administered by the Bank of Industry (BOI) on a single digit interest rate and a payment moratorium of one year to applicants, was part of effort to provide accessible credit to oil and gas service companies and community contractors in Nigeria.

“A total of US$160 million out of the US$200 million NCI Fund has so far been given out. The Bank of Industry is the custodian and administrator of the NCIF and we are working closely to monitor the beneficiaries and ensure utilisation of the loans for the stated purposes and repayment when due,” Wabote said.

He indicated that so far, the application of the local content law in the oil and gas industry has yielded 300,000 new jobs and $14 billion retained within the country from an estimated $20 billion annual industry spending.

He further stated that: “We have launched our investment policy and we are currently evaluating a number of proposals submitted to the board using clearly set parameters.”

According to him, the NCDMB in the past year made equity investments in two modular refineries in Imo State and Bayelsa State as part its efforts to prompt projects in the sector that would create jobs for Nigerians.

“Another major achievement under the technical capability pillar is the provision of equity investment to catalyse the establishment of 5,000 barrels per day modular refinery by Waltersmith Refining and Petrochemical Company Limited in Ibigwe, Imo State and in the 12,000 barrels per day Hydroskimming Modular refinery by Azikel Petroleum Limited at Obunagha, Gbarain, Bayelsa State.

“The Waltersmith refinery is on track for completion in May 2020 while the Azikel Refinery would be completed in 2021. We expect about 300,000 liters of diesel daily in addition to various volumes of naphtha, kerosene, and fuel oil from Waltersmith while Azikel will produce about 1.5 million litres or 50 trucks of petrol daily, including 170,000 liters of diesel, and other products.

“Both modular refinery projects have huge prospects for jobs creation, value retention, petroleum products availability and the development of in-country capability. They fit perfectly with our vision to serve as a catalyst for the development of Nigeria’s oil and gas sector,” he stated.

He also noted that NCDMB was in negotiations with investors on the establishment of Liquified Petroleum Gas (LPG) cylinders manufacturing plant, LPG depots, and gas processing facilities.

“We are particularly interested in the establishment of an inland LPG depot in Abuja to complement the federal government’s LPG Penetration Initiative,” Wabote explained, adding that: “The 10-Year-Roadmap has five pillars namely: technical capability development, compliance and enforcement, enabling business environment, organisation capability and sectorial and regional market linkage,” he said.

He also declared that a forensic audit is being carried out to ascertain the level of compliance by oil and gas companies comply with the law mandating them to contribution of one per cent of their contract value in the industry to the NCDMB.

He said: “We also deployed chartered accounting firms to carry out forensic audit of Nigerian Content Development Fund (NCDF) remittances. As you might be aware, Section 104 of the Nigerian Content Act mandates that one per cent of the value of contracts awarded in the upstream section of the oil and gas industry must be remitted to the NCD Fund.

“The forensic audit, which started in November 2018, has revealed huge amounts of non-remittances from operating and service companies.

“At the moment, some companies have owned up to their indebtedness and have started addressing their infractions. On the other hand, a few companies have remained recalcitrant. We have concluded plans to hand over such companies to the Economic and Financial Crimes Commission for prosecution.

“Our doors are open to companies that want to come up with structured payment plans, but we would not entertain pleas to write off any indebtedness.”

He also disclosed that the NCDMB was, “close to concluding partnership agreements covering development of hydrocarbon processing and manufacturing facilities in states like Cross River, Delta, Edo, Lagos, and Oyo.”