The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, on Thursday last week called on financial institutions, oil companies and other stakeholders to support the expansion of Nigerian Content Intervention Fund.
Ibe Kachikwu Kachikwu made the call at the launching of a 200 million dollar Nigerian Content Intervention Fund in Abuja. The fund, provided by the Nigerian Content Development and Monitoring Board (NCDMB), is designed to support development of capacity for Nigerian expertise in oil and gas sector.
The Fund, to be administered by Bank of the Industry (BOI), will be disbursed on a single digit interest rate of not more than eight per cent within a period of five years to qualified local players in the industry. Kachikwu said that the fund would help to galvanize some local Nigerian experts who wanted to invest in some areas but lacked sufficient funding.
“As small as the fund might be, 200 million dollars is to ginger everybody to begin to look at how to expand this fund. My goal for this fund is at least one billion dollars and not 200 million dollars. So once the fund is launched, we will work internally and first of all get BOI to also contribute its counterpart funding.
“I also expect the oil industry to begin to say how we can contribute; whether it is through deposit to BOI, to enable us to expand this pool of fund. I like to see investment drives that will bring in Foreign Direct Investments into this fund”, he said.
He also said that there were series of opportunities inherent in the utilization of the fund, hence the need for expansion. The minster also said that it was important to ensure proper disbursement of the fund.
“We must be careful to see that we have reasonable geographical spread in what we are doing, so that we don’t have one geographical entity benefiting from it; so the fund must go round, that is key. Secondly, I like to see this fund go to cutting edge technology driven businesses; we need to look for things that are not there as basic normal day to day activities.”
He said there was the need to ensure sectoral spread of the fund in the downstream, upstream and mainstream sub sectors, whilst he emphasized the need to consider and incorporate the oil producing communities in the disbursement of the fund.
The minster urged oil companies to identify indigenous companies operating within their domain and support them to grow capacity. This, he said, would help to develop the industry further. “The whole idea is for oil companies to identify within their own domain in the last five years, 10 companies that have worked with them and have capacity but lacked in certain things that can help them grow.
“The oil companies can help them grow by giving them adequate patronage, support, by getting training, some time providing certain technology that they can grow with. This industry will not grow by Nigerian company just struggling alone to grow, we have a moral responsibility as oil industry to help the companies grow.”
He thanked NCDMB for its effort at promoting local content, adding that NCDMB should place a benchmark on when to exit the use of foreign capacity in some areas. “We must begin to drive local content development in the oil industry; once we succeed, the rest sectors of the economy will grow. He said efforts were on to reduce the cost of oil production in the country. But NNPC has done a good job by bringing it down to 23, but that is not where we are heading; where we are heading is 15 per cent and is not 18. We must bring down cost of production; we must look at our OPEC brothers in the face and be able to compete adequately; oil companies must rise to the challenges of producing oil, so the target is 15, and we will achieve that.”
Meanwhile, the Executive Secretary of NCDMB, Mr. Simbi Wabote, said the fund was the realization of NCDMB’s efforts to address persistent funding challenge that hindered capacity and growth of local service providers in oil and gas. He said Nigeria had developed capacity to handle fabrication of more than 60,000 tonnes.
“I personally went round to see these fabrication yards, based on my findings, I can boldly say there is nothing we cannot fabricate in Nigeria. In manufacturing, we have grown capacities such that all cables required in the oil and gas sector are all manufactured in Nigeria. Same for bolts, nuts and flanges, fully certified to the required oil and gas industry standards for onshore and offshore projects.”
He said that NCDMB had developed a 10-year strategic plan to achieve its local content development plans in the oil and gas sector. He said that one of the plans was to actively promote and support Indigenous companies venturing into deepwater offshore projects and operations.
He added that the plan also consisted of development in the upstream, downstream and mainstream sub sectors.