By Michael Eboh, Gabriel Ewepu, Jacob Isaac & Ife Mic-Braimoh
ABUJA—The Federal Government, yesterday, said it has initiated plans to achieve 100 per cent local fabrication of modular refineries in Nigeria and has entered into discussions with Original Equipment Manufacturers, OEM, in this regard.
This was even as the Minister of State for Petroleum Resources, Mr. Ibe Kachikwu, also said the Federal Government intended to set a deadline for the local fabrication of oil vessels and Floating, Production, Storage and Offloading vessels, FPSO, while the Bank of Industry said the newly launched $200 million intervention fund could be used for contract financing and loan refinancing for oil companies.
The BoI also stated that it would, through the fund, take over the loans of oil companies in commercial banks, slash interest rates on such loans and reduce the burden on the companies.
Deadline for locally-made FPSO
Speaking at the Memorandum of Understanding, MoU, signing ceremony on the implementation of the $200 million Nigerian Content Intervention Fund, NCIF, between BoI and the Nigerian Content Development Monitoring Board, NCDMB, Kachikwu said Nigeria would not continue to award contracts, but set deadlines on when to localize most of the vessels and projects in the country.
He said: “Specifically, areas dealing with vessel fabrication and offshore platforms, FPSO, we must set a benchmark for when we can exit. No country in the world has been able to achieve this by just sitting around and giving contracts.
‘’We must be able to see that in 10 years time, all FPSO in Nigeria would be localized. We must begin to drive that.”
Kachikwu further disclosed that NCI Fund being launched today is a portion of Nigerian Content Development Fund, NCDF, and is drawn from one per cent of all contracts awarded in the upstream sector of the oil and gas industry.
He said the Federal Government would further engage with the NCDMB, BoI, oil companies and multinational agencies on how to increase the fund from its initial outlay of $200 million to $1 billion.
100% local fabrication of modular refineries.
Speaking in the same vein, Executive Secretary of the NCDMB, Mr. Simbi Wabote, stated that the board had keyed into the drive to discontinue petroleum products importation in Nigeria, adding that its strategic initiative was to achieve 100 per cent local fabrication of modular refineries.
He said: “We have commenced discussions with OEMs, local fabricators to make this a reality. We have set aside areas in our oil and gas scheme for practical training on operations, maintenance and running of modular refineries as a sustainable business model and for fabrication of the units.”
He added that efforts were on to ensure that Dangote Refinery, when operational, would be managed and maintained by Nigerians and Nigerian companies.’’
Fund’ll be used to increase capacity
Also speaking, Managing Director of the BoI, Mr. Olukayode Pitan, said the fund would be used to increase capacity in the industry, generate employment, create linkages that would affect and lead to the growth of the oil and gas sector.
He said: “The fund can be used to acquire assets for those who have contracts. The single digit on that kind of facility would not exceed $10 million and the interest rate on it would not exceed eight per cent.
“Also we have taken into account community contractors because this fund is trying to ensure that they also are carried along and it even makes it much easier. For community contractors, they can access up toN20 million and the interest on that would not exceed five per cent per annum.”