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BOI, NCDMB meet to decide Nigerian Content Intervention Fund  - Seemberg News

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BOI, NCDMB meet to decide Nigerian Content Intervention Fund 

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Why board is yet to enforce law on fabrication strictly 

The Executive Secretary, Nigerian Content Development Monitoring Board (NCDMB), Engr. Simbi Wabote yesterday disclosed that he was to meet with the management of the Bank of Industry (BOI) yesterday (Monday) to have an update on the state of the fund and take its next decision.

The bank, he said, has disbursed $160million of the $200million Nigerian Content Intervention Fund to qualified oil and gas companies. 

Speaking with reporters in Abuja, he revealed that he was to meet with the management of the bank yesterday (Monday) to have an update on the state of the fund. 

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

“Also on funding, we have launched our investment policy and we are currently evaluating a number proposals submitted to the Board using clearly set parameters.”

Asked whether there was a plan for an injection of more money into the fund, since it was already depleting, he said that the fund was revolving because the borrowers were repaying their loan in accordance with their agreements. 

Wabote, however, noted that since the more companies were demanding for the fund, which is domicile in the BOI, with a year moratorium, the board was to in its Monday meeting with the management of the bank appraise the state of the fund and take its decision. 

He said that: “I am sure that some of the borrowers have been paying back in line with the agreement. It is a revolving fund, it does not completely deplete. 

But when you have more people interested in it, there might be need to look at it and then will look at how successful it has been and then we take a decision.” 

 that the fund which has a year moratorium.” 

The NCMDB boss also explained that base on the economic reality in the country, it is not yet possible to enforce complete ban on external fabrication.

According to him, even as the Act says that all fabrication must be done in Nigeria and that all the steel materials used in the industry must be sourced from the country, adherence with the law would kill the industry since the fundamentals are not yet in place. 

He pointed out that there is no functional steel mill in Nigeria, there is also no adequate power supply, yet other logistics are lacking, these would increase the cost of production and discourage investors. 

 He said that “if the board has to comply strictly with the Act that all fabrication must be done in-country and that all the steels used in the industry must be sourced in country, there might be no project in Nigeria.

He said that it is a process of persuasion to s we how we extend together. Let’s be honest if today they ask you to do all the fabrication in-country, you will not have any project. (A) We don’t even have a functional steel mill. (B) Logistic is a problem. (C) Power is a huge challenge. 

“Our cost of project development will hit the roof because each project has an economic value. If the project cost is more than the economies of investments will anybody put his money? So, because if our knowledge of the industry we try to see how we balance the process in a win -win situation in order order to continue the exploration and explore. 

“Don’t forget that 90 percent of our foreign exchange is from oil and gas. If you use this as a bible and say this is what the law says, you will kill the industry so we must apply a greater level of intelligence.”

He said that in terms of compliance and enforcement, the board has put in place  seven companies to assist the it in carrying out specific and specialized monitoring and compliance functions in the upstream, midstream, and downstream sectors of the industry.

The board according to him, has deployed chartered accounting firms to carry out forensic audit of Nigerian Content Development Fund (NCDF) remittances. 

He noted that Section 104 of the Nigerian Content Act mandates that one percent of the value of contracts awarded in the upstream section of the oil and gas industry must be remitted to the NCD Fund.  

Wobite recalled that the Forensic Audit started in November 2018 and have revealed huge amounts of non-remittances from operating and service companies. 

He said that “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.

“Still on Compliance and Enforcement, NCDMB deployed a New Monitoring and Evaluation Template. The new framework simplifies the processes and procedures for reporting Nigerian Content performance and enhances speed of compliance and quality of data gathering.”

On the Technical Capability pillar, he said that the NCMDB has moved the Nigerian Oil and Gas Park Scheme (NOGAPS) from mere plans on paper to actual construction in two pilot locations – Odukpani in Cross River and Emeyal 1 in Ogbia Local Government of Bayelsa State. 

Each of the parks, according to Wabote,  will create employment for 2000 persons when they are fully operational and will spur manufacturing of critical oil and gas equipment, tools and spare parts close to oil fields.

He added that the oil and gas industry depends also on food, stressing that the recent ban on foreign exchange for food importation would be of great benefit to the growth of local content in the NOGAPS. 

Wobite said that another major achievement under the Technical Capability pillar of the board, is the provision of equity investment to catalyse the establishment of 5,000barrels per day modular refinery by Waltersmith Refining & Petrochemical Company Limited in Ibigwe, Imo State and in the 12,000barrels per day Hydroskimming Modular refinery by Azikel Petroleum Limited at Obunagha, Gbarain, Bayelsa State.

He said that the  Waltersmith refinery is on track for completion in May 2020 while the Azikel Refinery would be completed in 2021. 

Wobite submitted that “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 1.5million litres or 50 trucks of petrol daily, including 170,000liters 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.

“Beyond our support for modular refineries, we have also progressed discussions with investors on the establishment of 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 Federal Government’s LPG Penetration Initiative.

“We are close to concluding partnership agreements covering development of hydrocarbon processing and manufacturing facilities in several states such as Cross River, Delta, Edo, Lagos, and Oyo.”

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