There were interesting revelations At The Red Chamber last Thursday when the 14 firms which benefitted from the N250bn Nigeria Gas Expansion Programme Intervention Fund Disbursement appeared before the Senate Committee on Gas Resources. Sunday Aborisade reports.
The Senate Committee on Gas Resources chaired by Senator Agom Jarigbe commenced the probe of the Delta State Government and the 14 oil and gas companies that had accessed N135 billion out the N250 billion set aside by the Central Bank of Nigeria to encourage investments in the gas sector.
Chairman of the Senate Panel who is the Senator representing Cross River North, had in a paid advertisement in THISDAY penultimate Thursday, mandated the affected companies to appear at the investigative hearing last Thursday by 2pm.
The affected companies benefitted from the Intervention Fund which was disbursed by the Central Bank of Nigeria (CBN).
Jarigbe asked the firms to appear with their progress reports which must indicacte the location of projects and their current status.
He listed the affected companies and the amount of cash disbursement to include:
Nipco Gas Ltd- N25,000,000,000.00; Nipco Plc- N5,000,000,000.00; Hyde Energy Ltd- N2,000,000,000.00; Lee Engineering And Construction Company- N15,000,000,000 00.
Others are Pinnacle Oil And Gas Fze– N10,000,000,000.00; Transit Gas Limited– N8,000,000,000.00; Amalgamated Oil Company Nig Ltd (AMOCON)– N5,000,000,000.00; Gas Nexus Ltd– N10,000,000,000.00 and First Modular Gas Systems Limited – N4,300,000,000.00.
They also included, Novagas Limited– N1,000,000,000.00; Greenville Liquified Natural Gas Company-N10,000,000,000.00; AP LPG Limited – N8,000,000,000.00 and Dangote Oil Refinery– N5,000,000,000.00.
Delta State Government, according to Jarigbe, got N20,000,000,000.00 while Mob Integrated Services Limited, received N2,500,000,000.00.
The Central Bank of Nigeria in January this year, provided insight into how much it spent over the years on various interventions
The apex bank had in media reports claimed that it’s interventions which cut across different sectors of the economy have gulped over N4 trillion. N250bn out of the money was earmarked for the gas sector.
It explained that the beneficiaries of the interventions are expected to repay the money as it is a loan, not a grant.
Jarigbe in his welcome address at the hearing, warned the affected beneficiaries to provide all the necessary documents that would indicate that the funds they collected was utilized for investment in the gas sector.
He noted that the committee’s investigations revealed that some firms who had collected the loan had nothing to do with the gas sector.
The Senator threatened to involve the anti-graft agencies to recover the money from defaulting beneficiaries.
He said, “The Government of the day is very serious about revenue generation following the removal of subsidy. If we don’t make gas available to our citizens, we will be in trouble.”
The committee members were shocked when the Ministry of Petroleum Resources claimed that the programme, which it initiated in 2020, was being implemented by the CBN without it’s input.
The members described as unacceptable, the fact that there was no synergy between the Ministry of Petroleum Resources and the CBN on the project.
They also queried the discriminatory disbursement of the funds to the beneficiaries and wondered why some firms collected more than the N10 billion credit limit.
Chairman of the Committee, Senator Agom Jarigbe, collected the records of the beneficiaries and the locations of their project sites for immediate investigations.
Jarigbe lamented that the funds released under the gas expansion and intervention fund were inappropriately accessed.
He said, “The task of the committee is to ensure that the companies actually expended the funds on what they collected it for.”
However, the Legal Adviser to one of the beneficiaries, Lee Engineering and Construction Company, Mathew Agbadon, told the committee that the publication made by the committee had put the firm in a negative perspective.
He said, “There has been a fundamental misconception out there in the public domain that some people just leverage on the CBN money, stole it and went away.
“That is far from the truth. The truth of the matter is that as a beneficiary of that scheme, we had business with the commercial bank. The discussion was done at the commercial bank level and due diligence was done and our application was approved. Based on the application, we accessed the facility as an organization.
“Lee Engineering has been in the oil and gas industry for 32 years with over 4, 000 employees. This particular project is one of the outfits of Lee Engineering and it is located Warri, Delta State. If the Committee is ready to visit the project today, we are ready for it. It is 90 per cent completed.
It is billed for commissioning in the first quarter of next year. In fact we are looking forward to President Bola Tinubu to inaugurate the project being the first of its kind in this part of the World”.
Also, the Executive Director, Finance & Accounts of Lee Engineering and Construction Company, Benedict Ebalukhota, submitted a detailed explanation to the committee.
The document, obtained by THISDAY read in part, “We present to your esteemed Committee, our compliments, and refer to your publication in THISDAY newspaper of Thursday November 23, 2023 at page 15 therein, inviting our company on the above subject.
“Our response to your open invitation is as follows: “Our Company is one hundred percent Nigerian owned, and a major player in the Nigerian Oil and Gas Industry with over 32 years solid records of outstanding and sterling performance.
“We have also executed and still executing major projects in the oil and gas industry in Nigeria. We have track records of performance for which we have been commended by our various clients. As at today our company has about 4,000 (Four Thousand) employees.
“These numbers will increase when this project comes into full operation. The factory to which this loan was deployed is one of our business units.
“With due respect to your Committee and without trying to tell you how to go about your Committee’s work, we were taken aback that a very well-known company like ours, with a known address, was invited on this subject through the newspaper publication in the manner that your Committee did.
“You will agree with us that in our country today, publications like your open invitation, may send the wrong message to some gullible members of the public who now have the perception that all businessmen in Nigeria are dubious, and that our company may have taken money from the CBN without utilizing the money for the purpose for which it was meant.
“Indeed, we have received many telephone calls and messages from our stakeholders (including our clients) and business partners, within and from outside the country, who read your newspaper advertorial on this subject.
“They are asking to know what was amiss. Needless to state that our company has been highly scandalized and embarrassed by your publication on this subject, which may not have been the intention of your committee.
“Distinguished Chairman and Committee members, we hasten to say that the loan facility we took under the NGEP was obtained from our Bankers (First Bank of Nigeria PLC), after a due process was carried out by the Bank.
“We had no direct dealing whatsoever with the CBN before and after the facility was approved for us. All our dealings on the loan from the time we applied till it was approved, are directly with our bankers, the FBN PLC.
“It was purely a Customer and Banker transaction between us and our bankers, First Bank Plc, done under normal business consideration and due diligence.
“We provided among others, collateral worth over four times the size of the loan, as a security for repayment of the loan.
“Even while we are still enjoying a moratorium period on the loan, we have started paying both the interest and the capital back to our bankers by raising funds from other sources to do so in line with the options available to us in the loan Agreement with our Bankers. This is done on a monthly basis and we have never defaulted since we started repayment.
“Our factory, is a multibillion Naira factory, which will specialize in the fabrication and manufacturing of vital equipment and components for the Oil and Gas industry facilities such as flow stations, refineries, petrochemical, gas plant processing and allied facilities.
“It is located on a large expanse of land at Ekpan Warri Delta State. Closely attached to the project is a customized jetty that will be dedicated to bringing in raw materials to and evacuation of finished products from the factory. We started the construction of the project in 2015 and this loan was obtained in 2021 to facilitate the completion of the project.
“The factory will produce, among others, Pressure Vessels, Heat Exchangers, Process Modules, Gas Scrubbers, Tanks, Flare Systems, which are critical machineries and equipment used in the Oil and Gas industry and other sectors of the Nigerian economy.
Most of these items are currently being imported by industry users with scarce foreign exchange. The Project is about 90 per cent complete, and will be ready for inauguration either in the first or second quarter of 2024.
“It is a major investment in the domestic gas value-chain – It will reduce the cost of importation and cost of securing foreign exchange for these items by Nigerian companies. It will provide direct and indirect employment for many Nigerians. It will promote the local content policy of the Federal government of Nigeria.
“It will provide opportunity for Nigerians to acquire knowledge and ultimately lead to technology transfer. We respectfully invite the Distinguished members of this Committee to note the foregoing, and request that you visit the factory site and see the factory and its facilities with your own eyes. Photographs of the factory and some of the installed machines and equipment are attached for your information and guidance.
“Finally, Distinguished Chairman and members, while we thank you for this opportunity to present our case in this matter, we implore this Committee to use its good offices to correct the publications circulating in the traditional, social and online media, writing tendentious and even libelous stories about us, as a result of this invitation by your esteemed Committee. We need your protection from those Nigerians who are judgmental on matters like this,” the firm stated.