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Nigerian Content Fund exceeds $500m – Wabote

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NCDMB To Launch US$50m Fund For Oil Industry Manufacturing

 

The Nigerian Content Intervention (NCI) Fund has exceeded half a billion dollars, the Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Engr. Simbi Kesiye Wabote has said.

He spoke recently at the Sub-Saharan African International Petroleum Conference (SAIPEC) organised in Lagos by the Petroleum Technology Association of Nigeria (PETAN),

He indicated that the NCI Fund which is extended as low-cost credit to qualified oil and gas companies covers asset acquisition, project financing, manufacturing, working capital, loan refinancing, women in oil and gas, and research and development.

The NCI Fund is a component of the Nigerian Content Development Fund (NCDF) which is accumulated through one percent deductions from contracts awarded in the upstream sector of the oil and gas industry.

Wabote added 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 replicated at the continental level and be 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.”

He explained 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, the Executive Secretary 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 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.

He 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 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.

Corporate Communications

February 24, 2022

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Group Credits PINL with Safeguarding Environment, Farms

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A group has given kudos to the Pipeline Infrastructure Nigeria Limited (PINL) for effective pipeline surveillance and community interventions during the recent flooding in parts of the Niger Delta.

The Niger Delta Progressive Alliance (NDPA) in a statement signed by its Convener, Nse Victor Udoh, noted that the PINL’s operational efficiency and sustained maintenance of pipeline corridors helped prevent additional environmental damage, preserve farmlands and protect aquatic ecosystems from threats associated with pipeline failures and oil spills.

According to the NDPA, annual flooding in the Niger Delta poses serious environmental risks, particularly when floodwaters come into contact with damaged pipelines, oil spills and illegal activities around oil and gas infrastructure.

The organisation noted that the recent flood season was different, as there were no reported cases of widespread oil contamination of floodwaters, dead fish or the spread of oil into farms and residential areas attributable to pipeline failures.

READ ALSO: DPRP Decries Rising Fuel Imports, Despite Strong Local Supply Capacity

It said the development underscored the importance of preventive pipeline management, stressing that effective infrastructure protection was often measured by disasters that were prevented rather than emergencies that attracted public attention.

According to the group, regular patrols, monitoring and right-of-way surveillance enabled PINL to identify and address potential threats before they escalated into major incidents.

It added that inspection, maintenance and repair activities had also contributed to maintaining the integrity of critical pipelines, especially during periods of heavy rainfall and flooding.

The NDPA further commended PINL for its interventions in flood-affected communities in Rivers, Bayelsa and Imo States.

It cited the company’s restoration efforts in areas previously affected by illegal refining, as well as empowerment programmes targeting women and youths in host communities.

Udoh said the initiatives showed that corporate social responsibility should go beyond occasional charitable gestures and become part of a sustained commitment to community welfare and development.

“We commend Pipeline Infrastructure Nigeria Limited, therefore, on two counts that this season has made inseparable: the efficiency of its service, tested by a flood and found equal to it, and the seriousness of its social responsibility,” he said.

He added that the group had observed that farms remained protected and waterways retained their ecological value despite the flooding.

“This season, our farms still stand where the water reached them. Our creeks still hold their life,” Udoh said.

The alliance maintained that infrastructure security and community welfare were closely linked in the Niger Delta, where pipelines pass through several communities and environmentally sensitive areas.

It urged PINL to sustain the standard, stressing that protection of critical national infrastructure, environmental preservation and improved host-community welfare should remain mutually reinforcing objectives.

The NDPA described PINL’s performance during the flood season as an example of how operational efficiency and responsible community engagement could combine to protect energy infrastructure and the environment.

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Dangote Threatens Petrol Importers’ Supply Over Product Blending

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As concerns continue to mount over product quality and allegations of blending of imported fuel with products refined locally against major oil marketers, the Dangote Petroleum Refinery and Petrochemicals (DPRP), is contemplating cutting off supplies to the culprits.

The proposed measure could take effect as early as this week, subject to further consultations and any last-minute intervention, according to sources familiar with the situation.

The grave concern is that some marketers are allegedly blending imported Premium Motor Spirit (PMS), also called petrol, with petrol purchased from the DPRP before distributing the resulting product in the market.

READ ALSO: Nestoil Boosts Oil Production with $28m Drilling Fleet

This has left the refinery concerned that such practices could make it difficult to distinguish between products it supplied and the products subsequently blended or handled by third parties.

“It is difficult to understand why we would invest heavily in producing high-quality petroleum products for Nigerians, only for those products to be mixed with imported products of uncertain quality and the resulting product to be associated with the refinery,” a senior official at the $20bn Lekki-based plant, who spoke in confidence due to the lack of authorisation to speak on the matter, stated.

The refinery has also raised concerns about what it called a lack of a standard laboratory and adequate quality-control infrastructure for imported petroleum products, particularly the capacity to independently verify and certify the specifications of products entering the Nigerian market.

The latest development comes barely days after the DPRP warned that rising petrol imports were forcing it to export excess stocks despite having sufficient capacity to meet Nigeria’s domestic demand.

The refinery said imported PMS accounted for approximately 43 percent of fuel supplied into the Nigerian market in July, saying the continued issuance of petrol import licences had created uncertainty over domestic demand and made production and inventory planning increasingly difficult.

The DPRP said it had consistently maintained sufficient inventory and reserved product volumes to guarantee steady supply to the Nigerian market, but argued that keeping large stocks indefinitely was becoming commercially unsustainable when it could not determine how much imported petrol would enter the country.

“As a responsible energy provider, we have always endeavoured to keep adequate reserves to satisfy local demand at all times. However, in an environment where significant volumes of imported PMS continue to enter the market through licences issued by the regulator, and where there is limited visibility on future import volumes, it becomes commercially unsustainable to continue holding excess inventory indefinitely.”

The refinery said the surplus petrol that could not be absorbed by the domestic market would consequently have to be exported to regional and international markets.

The proposed restriction on sales to importing marketers now adds a new dimension to the refinery’s concerns, as Dangote moves from highlighting the commercial impact of rising imports to considering measures that would prevent marketers from sourcing its petrol while simultaneously importing competing products.

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Nigeria Beats 2026 Foreign Reserves Target, Hits $53.1b

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CBN Prohibits Foreign Banks' Rep Offices From Banking Operations

Nigeria’s economic fortune is benefiting from the Middle East crisis, as the impact of capital inflows from stronger crude oil earnings has seen her foreign reserves climb to record $53.1 billion, beating the $51.04 billion year-end target.

Data available on the Central Bank of Nigeria’s (CBN) website indicated that the reserves closed at $53.1 billion on August 24, which is the highest level in almost 18 years.

Any analyses of the growth shows that the difference in reserves position places the Nigerian economy in good stead, because it can cover over 12 months import.

It is noteworthy that Nigeria’s external reserves fuel the CBN’s capacity to support the local currency and meet external obligations, have continued to rise steadily, since the face-off between the United States and Iran.

Further analysis of the data displayed by the CBN showed that the liquid portion of the external reserves stood at $52.5 billion.

Biztellers reports that Brent crude traded around $87 per barrel, within the week, well above Nigeria’s 2026 federal budget benchmark of $64.85.

READ ALSO: Shell Endorses Regional Action Plan for Safe Helicopter Services

With the Middle East crisis not showing signs of abating, analysts believe the price rebound would largely bolster Nigeria’s fiscal revenues.

The line of thought is popular among those who know, because as a crude oil exporter, Nigeria will continue to earn more petrodollars, which they argue would support the domestic currency – naira’s stability, while pumping the volume of external reserves.

In its economic projections for 2026, the CBN targeted stronger oil earnings, foreign exchange market reforms and improved external capital inflows to achieve the year-end reserves projection.

According to analysts, the current reserves position reinforces the steady growth in Nigeria’s external buffers.

The founder/Chief Executive Officer of the Centre for the Promotion of Public Enterprise (CPPE), Dr Muda Yusuf, earlier hinted at a positive outlook for Nigeria’s external reserves as he does not see anything derailing the forex and fiscal reforms that have brought about stability and improvement in external reserves, as reported by The Nation.

Yusuf said: “Well, the outlook for me is positive because I don’t see anything derailing these forex reforms, fuel subsidy etc. It is these reforms that have brought about stability.”

The CBN data further showed that Nigeria’s external reserves have maintained a steady upward surge in recent months.

The reserves started June at $49.80 billion and crossed the $50 billion mark by June 5, reaching $50.12 billion.

On June 15, reserves had increased further to $50.81 billion before rising to the current position. The reserves stood at $51.9 billion on July 31, and continued.

The sustained increase reflects stronger foreign exchange inflows and improved liquidity conditions in the country’s external sector.

The CBN Governor, Olayemi Cardoso, said: “This strong buffer continues to reinforce investor confidence in the Nigerian economy and support exchange rate stability.”

The CBN’s decision to clear over $7 billion unsettled FX backlogs raised investors’ confidence in the economy, supporting dollar inflows and foreign reserves accretion, Cardoso added.

The CBN boss had explained that although he had no idea where the fund for the backlog clearance would come from, when he assumed office, he believed it was the right thing to do, and gave investors his word.

He said: “Credibility is at the heart of any central bank. If you don’t have credibility, people do not trust you and they do not invest in your economy. When I took office, I made a promise we would pay the backlog, the verifiable backlog of monies that were owed by Nigeria to third parties.

“And it was, at the time, estimated at over $7 billion US dollars. And to be honest with you, I had no idea how I was going to do it, but I just felt it was not something to be negotiated.”

Cardoso explained that Nigeria needed to ensure that its integrity is maintained. Analysts believe the higher reserve level could enhance the CBN’s capacity to support exchange rate stability and meet external obligations.

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