By PETER EGWUTU

Syke Bank Plc has joined the ranks of  banks in Nigeria in financing the oil and gas sector following government’s commitment to boosting indigenous participation in the industry.

After more than fifty years of oil exploration and production in Nigeria, cries of marginalisation and unequal participation in the oil industry by the indigenous investors still continue to play. The ringing outcry against the current order in the industry underlies the new efforts by the government to carry out a holistic reform of the industry with a view to creating a level playing field.

Some encouraging steps taken by the government, no doubt, will open up the industry and promote indigenous participation in the industry. Recently, President Goodluck Jonathan directed the Ministries of Petroleum and Finance to set up an inter-ministerial committee to fashion out modalities for raising financial support for indigenous oil companies who are ready to invest, not only in production but also in refining to add value to the crude oil and gas locally before exporting in order to generate employment for the youth and more money for the country.

As a complement to the proposed government intervention, some Nigerian banks, such as First Bank Nigeria Plc, Fidelity Bank Plc, etc have already introduced a special funding package to support the participation of indigenous companies in the oil and gas sector of the Nigerian economy, considering the fact that it would have been difficult for Nigerian entrepreneurs to favourably compete in the technology-driven, capital-intensive oil and gas industry.

The Nigerian Local Content Act which was recently signed into law has also paved the way for higher domestic participation in the oil and gas industry and more extensive training requirements. Analysts estimate that local participation in the oil and gas industry stands at around 40 per cent, with the majority of skilled and executive-level positions being taken on by foreigners.

Specifically, Skye Bank is financing the drilling campaign by Waltersmith Petroman Oil Limited which is expected to boost the company’s crude oil production and strengthen its participation in the industry.  Besides, the new oil blocks it won as a member of the NDPR consortium that won the Shell’s interest in OML 34 will greatly increase its participation.

Waltersmith Petroman Oil Limited is one of the most successful Marginal Field operators. The company is the operator of the Ibigwe field located in OML16 in Ohaji/Egbema Local Government Area of Imo State, Nigeria. The field was previously operated by Shell/Agip/Elf/NNPC Joint Venture and was awarded to Waltersmith during the Marginal Field Bid Round held in 2003.

Waltersmith is currently engaged in a four well drilling campaign in a bid to boost production at the field. Leveraging off the success of its marginal field operations, the company participated in the recent Shell divestment program and is part of the NDPR consortium that acquired the SPDC consortium’s 45 per cent  interest in OML 34.

The company was incorporated in 1996 as a joint venture between Waltersmith and Associates Limited, a Nigerian company and Petroman Oil Limited of Calgary, Canada to operate as an oil exploration and production company. In 2001, Walter Smith Petroman Oil Limited became a wholly owned Nigerian company with the divestment of Petroman Oil Limited.

The company subsequently participated in the Marginal Oil field licensing round for indigenous companies and was awarded the Ibigwe field located in Oil Mining Lease 16 by Federal Government of Nigeria in 2003. The award was on a joint interest basis with Morris Petroleum Limited and Waltersmith as the operator.