Featured, Oil & Gas
By Maureen Chigbo
THE wrangling in the oil and gas sector involving the operations of the Nigerian Development Content Development and Monitoring, NCDMB, may either abate or worsen in the coming days. President Bola Tinubu on Thursday, May 9, appointed Ekperikpe Ekpo, minister of State for Petroleum Resources (Gas), as co-chairman of the Governing Council of the NCDMB. Before this, Senator Heineken Lokpobiri, minister of State for Petroleum (Oil), has been the chairman of the governing council since December 7, 2023, when the governing council members were inaugurated. The Nigerian Oil and Gad Industry Content Development (NOGICD) Act provided for only one chairman who is the the minister of petroleum. President Bola Tinubu is the de facto minister of petroleum with two ministers of state for oil and gas respectively.
Since the inauguration, NCDMB has not known peace due to the interference of Lokpobiri in the administration of the NCDMB, which has been causing a confidence crisis in the sector. This manifested when he kicked against the posting of some staff by Felix Ogbe, new executive secretary of the NCDMB, stating that the latter breached the NOGICD Act.
Lokpobiri’s latest aspersion has been on Simbi Wabote, the former executive of NCDMB. He alleged that the NCDMB under Wabote made bad investment decisions and put over $500 million of the industry’s fund in equity investments in private establishments and in loans that are now non-performing at a dinner at the Petroleum Industry Club, Ikoyi, Lagos in April. Also, Lokpobiri cited the Atlantic Refinery in Brass, where $35 million was made at once against the disbursement threshold. The minister added that not even a block has been put on that site at the Brass Fertiliser Plant, where he alleged that $20 million was spent in an “empty field” without due process. He added that there was malfeasance in the issuance of loans from the $350 million NCF Fund in the custody of the BOI, adding that 90 percent of the loans given out by the NCDMB are non-performing.
Contrary to the minister’s noxious comments, the NCDMB told Realnews that there was no disbursement threshold. Realnews gathered that the NCDMB board invested in four refineries and all the disbursements were done in a single tranche, adding that the WalterSmith received $10 million, Azikel, $20m, Duport, $15m, while Atlantic got $35 million (disbursed in two tranches of $21.5 million, and $13.5 million). Twenty million dollars was disbursed and invested in Brass Fertiliser along with NNPC, which invested over $20 million. Brass Fertiliser is seeking debt finance and financial closure for an over $2 billion project.
The NCDMB also denied that any malfeasance was committed in disbursing the loans, adding, that NCDMB/BOI funds remained: “Best loan scheme so far in Nigeria. No non-performing loan. Repayment is consistent.”
The evidence of the performance of the loans is shown when the Waltersmith Modular Refinery paid a dividend of N450 million to the NCDMB out of the N1.5 billion the company declared in 2023. This represents NCDMB’s 30 percent share in the company for the year ended 2023.
Before this feat, Lokpobiri at the inauguration of the WalterSmith Refinery in November 2023, commended the NCDMB and the company for supporting the Federal Government’s agenda of improving domestic refining capacity. During a facility tour of Waltersmith Petroman Oil Limited, Ibigwe, Ohaji-Egbema Local Government Area of Imo State on Tuesday, November 21, 2023, Lokpobiri commended the NCDMB for investing in Waltersmith Refinery to quickly facilitate the completion of the modular refinery.
He added: “The quickest way to fix our energy challenge in the country should be through modular refineries, while we await the total rehabilitation of the big refineries.” The 5,000-barrel per stream day Waltersmith Petroman, which has been a stable source of diesel, kerosene, naphtha, and high-fuel oil to the domestic market since its inauguration in 2020, was for him proof of how beneficial such smaller processing plants could be.
Another strategic investment decision that NCDMB made, which the minister flayed, but has yielded a dividend of $1 million on April 17 is in NEDOGAS. Emeka Ene, chairman of the NEDOGAS handed the cheque to Wabote’s successor Felix Omatsola Ogbe, who assumed office in December 2023.
Furthermore, ThisDay newspaper reported that the $50 million Eraskon Lubricant Blending Plant with 128,800 litres per day production capacity being built in Gbarain, Yenegoa, Bayelsa State, has reached a 70 percent completion level. The project is a joint venture (JV) between Eraskorp, which has 60 percent equity, and the NCDMB with 40 percent equity. The project will address the huge gap in lube products consumed in Nigeria, which is mostly imported and depletes the country’s scarce foreign exchange and fuelling inflation.
Another project from the stable of the NCDMB investment is the 156,000 metric tonnes per annum Triansel Gas Limited’s Liquefied Petroleum Gas, LPG, storage terminal in Koko, Delta State.
Construction at the site has reached 90 percent and is expected to be inaugurated by December 2024, to boost domestic penetration of the product in Nigeria. The $25 million Triansel Gas project is a joint venture between its parent company, Chimons Gas Limited, and the Nigeria Content Development and Monitoring Board, NCDMB, at equity stakes of 59.1 percent and 40.9 percent, respectively. NCDMB invested $3.4 million in the project, which Chibuike Achigbu, executive chairman of Triansel Gas Limited, said began in 2021.
There is also AMAL Technologies where NCDMB board invested in after a rigorous process as part of its research and development incubation project to encourage local content. Realnews, as part of its investigation to verify the minister’s allegation, visited Amal Technology Limited in Abuja. Realnews was taken around the company by Shehu Tijani, managing director of the company, who explained the processes of the modern equipment installed for manufacturing gas leak detectors, the original product of the company, has been transformed to produce four other items, including manufacturing online and offline POS machine, electricity meter and smart valve for detecting pipeline leakage and phone charger. At maximum capacity, the company has 300 workers and 50 at minimum, Tijani said. Already, Amal Technology is geared to produce meters for electricity distribution companies, DISCOS, including the Kaduna Discos under the Presidential Meter Initiative programme. The company plans to go into producing semiconductors, which Tijani said Nigeria needed to do to diversify and attract investments into the country. Amal Technology, which is 100 percent owned by Nigerians, the first of its kind in Nigeria, was nurtured for five years by the NCDMB, which invested 35 percent of the N5 billion investment with a five-year moratorium for repayment. According to Tijani, Amal Technology will pay off the loan in the next two years. Amal Technology with its unique product has attracted the attention of international and regional bodies and organisations that want to partner with it to transfer the technology they have developed to other African countries. According to Tijani, APPO, 10 countries in Africa that attended the African Organisation for Standardisation Summit and others want to partner with Amal on technology transfer. Amal Technology is also warming up to pay its dividend and even pay off the loan it received from the NCDMB, according to the managing director. “Having seen all I have shown in the Amal office, would you consider the investment a waste?” Tijani replied when Realnews asked him to comment on the minister’s allegation. He added that the company went through a very rigorous process to qualify for the NCDMB research and development incubation centres supported with a repayable loan which was not a grant. “So, I think that if the honourable minister was able to attend the inauguration in person, I think his views would have been totally different at least for Amal Technologies because what we are doing, we are not only just breaking barriers, we are pace setters, we are the leader in the industry,” he said.
Other industry watchers share Tijani’s view, especially when the Executive Order 001, EO1, Compliance Report compiled by the Presidential Enabling Business Environment Council, PEBEC, gave NCDMB a clean bill of health. The PEBEC’s latest report covering January to December 2023, released in April 2024, showed that the NCDMB came first in efficiency and transparency rankings among the ministries, departments, and agencies of the federal government. According to PEBEC, NCDMB scored (70.07 percent) to be first while the Standards Organisation of Nigeria, SON, got 69.5 percent to be second. Also, in October 2023, PEBEC, for the second time, named the NCDMB as the best Federal Agency in transparency and efficiency in business and continued its streak of excellence in the delivery of its mandate. In the 2023 Half Year Executive Order 001 Compliance Ranking, which covered from January to June 2023, NCDMB scored 83.06% to clinch the top position in the federal government’s ranking of ministries, departments and agencies, MDAs, the second straight year it clinched the award.
The sterling performance of the NCDMB has fetched the organisation some national and international recognition such as the Leadership Local Content Champion of the Year Award at the 14th Leadership Conference and Awards held at the International Conference Centre, Abuja.
The award was presented to Wabote by Mohammed Musa Bello, the minister of the Federal Capital Territory, at an event that was chaired by Vice President Yemi Osinbajo, with Raila Amolo Odinga, former Kenya Prime Minister, as the guest speaker.
Some of the reasons the executive secretary was selected for the award included completing the 17-storey Nigerian Content Tower within three years, raising the level of Nigerian Content performance in the Nigerian oil and gas industry from 26 percent in 2016 to 52 percent in 2022, and developing the Nigerian Content 10-year strategic roadmap, with the key target of achieving 70 percent Nigerian Content in the oil and gas industry.
The NCDMB under Wabote also established hubs in-country for manufacturing of equipment, components, and accessories required by the industry and for championing the promotion of local content across the African
Other notable recognitions received by the Board recently included the conferment of the Distinguished Capacity Development Award received by Wabote from President Muhammadu Buhari in October 2022 and the recognition accorded to NCDMB as the best among all ministries, Departments, and Agencies in the Executive Order (EO1) performance ranking for Ease of Doing Business from January to June 2022.
These recognitions justified Lokpobiri’s earlier praise for the NCDMB’s investment decisions.
Thus industry watchers are baffled by his recent castigation of the NCDMB and this prompted people to think that there is more to it than meets the eye. Indeed, a bird’s eye view of the minister’s grouse against NCDMB was provided in Wabote’s statement in April alleging a N30 billion budget padding request by the minister’s emissary, which he turned down. The statement recalled that the former executive secretary’s travails began over budget padding disagreement, which Realnews surmised led to his untimely replacement before his tenure expired. Having succeeded in removing him, the minister appears not still satisfied and unable to sheath his sword notwithstanding the damaging effect his comments have on the fragile investment in the oil and gas sector, which has declined with the attendant divestment by some international oil companies due to inclement business environment. This atmosphere could worsen confidence in the sector should the leadership continue vitriol like that of the minister of petroleum (Oil), especially with the two ministers of state serving as chairman and co-chairman of the NCDMB governing council. The NOGICD Act provides for a chairman for the Governing Council, who is the minister of petroleum. Tinubu is the minister of petroleum, but he inaugurated Lokpobiri before appointing minister of state as co-chairman, creating further anxiety in a board that is already mired in altercations.
For a government that is anchoring its programmes on a renewed hope agenda theme, it is disturbing that Lokpobiri is working at cross purpose with Tinubu’s agenda because his unguarded statements are capable of destabilising further the sector that harbours the nation’s cash cow because of personal animosity and political ambition between two sons of Bayelsa State. For instance, Wabote and Lokpobiri are from the same state of Bayelsa, and the latter allegedly fears that the former’s sterling performance as the executive secretary of NCDMB may pose a stumbling block to him in his aspiration to govern the Bayelsa people. This may explain his spirited effort to erase the former executive secretary’s sterling record or at least tarnish it so much that if Wabote should at any point be considered for the highest office in Bayelsa State, he will not have a record to stand on. But will this acrimonious tactic succeed?
There is doubt because of the blitzkrieg Wabote unleashed to defend the integrity of the NCDMB under his leadership. His statement entitled: “False Narratives by the Hon. Minister of State for Petroleum Resources – Mr. Heineken Lokpobiri at the Petroleum Club, Lagos, “dismissed in Toto the minister’s allegations as “reckless and bundle of lies unbecoming of a minister of State of the Federal Republic”.
According to the former executive secretary, the minister’s reckless statements in the past months are not new to him as Lokpobiri “only recently tried to throw NNPCL under the bus as he stated that Nigeria is losing 400kb of oil because of not signing the Seplat deal thus trying to indict NNPLC a parastatal under his supervision.” This prompted him to ask whether Lokpobiri as a representative of the substantive minister is not supposed to canvass government position or represent his principal correctly instead of acting like a militant activist.
Wabote recalled that his problem as executive secretary started with Lokpobiri in December 2023, when he sent one of his undocumented aides within his ministry to his office in Yenagoa, requesting him to increase the NCDMB budget by N30 billion for the office of the Minister. “ I said it had never been done before. I served two ministers and none of them have ever made such a request to NCDMB, that we only make provision for the office of the chairman of the council which covers his travel expenses.
“I said to him that the maximum NCDMB budget has ever gotten to in the past is circa N80 billion for all our activities, adding that N30 billion will be too much for his office and I was not going to do it. I ask stakeholders to review the NCDMB budget from 2016 to 2023 and also look at what got approved in 2024,” Wabote said. Realnews reports that the budget in 2016 was 21,958,904,000; in 2017 was 30,999459,424; in 2018 NCDMB budgeted 49,358,975,255.67; in 2019 was 59,742,546,552.13; 2020 was N57,368,275.11; N56,062,661.18 in 2021; N62,132,914,277.06 in 2022; N85,812,855,292.93 in 2023 and N138,789,647,551.52 in 2024.
Realnews reports that in August 2023, Wabote led the management of NCDMB to provide a full briefing of the Board’s activities to Lokpobiri and Ekperikpe Ekpom minister of State for Petroleum – Gas. The presentation, in more than 250-page slides provided information on the status of the board’s projects, partnerships, intervention funds, TSA account balances, HCD programmes, forensic audits, and other strategic initiatives under the NCDMB 10-year Strategic Roadmap. The presentation was followed up with an invitation to the ministers of state familiarisation visits to the board’s headquarters and other project sites located across the country. The sites visited between September and November 2023 included – Nigerian Content Tower – the Board’s headquarters in Yenagoa, NCDMB Fire Station in NCT; 204-room NCDMB Conference Hotel under construction; NCDMB Creche; NCDMB NOGAPS Industrial Park, Emeyal-1, near Otueke, Bayelsa State; Waltersmith Refinery, Ibigwe, Imo State; and NCDMB interventions within the PTDF Skills Center in Omagwa, PHC. “Familiarisation visits to other sites were lined up before my unceremonious removal from office right after our flagship event, Practical Nigerian Content, PNC, Forum in December 2023,” the statement said.
The statement wondered why the minister did not use the brief he was given to understand the necessary facts and figures instead of broadcasting mischief to industry stakeholders.
“We had told Mr. Lokpobiri that our projects, interventions, and partnerships were driven by the enabling provisions contained in the NOGICD Act and extant government policies on modular refineries, Decade of Gas, jobs creation, and poverty eradication. It is therefore shocking that the HMSPR-Oil chose to present false narratives before the Petroleum Club in his foray into character assassination, treachery, and waste agenda.
“It is FALSE for the HMSPR-Oil to assert that 90% of the NC Intervention Fund managed by BOI is not performing. He was fully briefed that it is because NCDMB is not a bank that made us partner with BOI as a foremost development bank in the country to manage the intervention fund for the oil and gas industry with each loan secured by Bank guarantee.
“As of Dec 2023, it is on record that the NC intervention funds managed by BOI helped cushion the effects of the COVID-19 pandemic in the industry and that the fund has yielded millions from the low-interest rates with the principal fully secured with BG. The fund was intact when I left office as can be verified from BOI. If the fund is now being declared as wasted by the HMSPR-Oil, he should be asked what he has done or intends to do with the fund to make such a declaration. Industry watchers must not allow the secured funds to be diverted under any pretext.
“Our presentation and briefing notes to the HMSPR-Oil on Brass Fertiliser clearly informed him that the partnership arrangement with NNPC and DSV Engineering is for the establishment of a 10,000TPD Methanol plant. It is therefore FALSE that the partnership was for fertilizer factory,” the statement said.
Perhaps, the statement enjoined Lokpobiri to check with Ekpo and the NNPCL for details of the project and the latest developments rather than the false accusations to castigate the NCDMB.
For the records, the statement stated that the initial investments by NNPC and NCDMB are pre-FID equity injection for the estimated $3.2 billion project. The Board’s additional investment is tied to the achievement of financial close, which has not been achieved by the project promoters.
The status of the 15 Board’s five partnerships are Waltersmith refinery, which is already inaugurated and operational; five ready for inauguration (Nedo, BetterGas, Bunorr, Butane (Kaduna), and Duport); four under construction (Azikel, Triansel, Eraskon, and LadolPower); four in search of debt financing (Brass Fertiliser (Methanol), Rungas Prime, Rungas Alfa, and SPL Utorogu); and one under divestment considerations (Atlantic Refinery).
The statement implored Lokpobiri to visit the construction sites to avail himself of facts on the ground. “He should also check the MPR archives of the strategic plan to diversify oil and gas development clusters in the Niger Delta using Bonny Island, Brass Island, Onne, Ogidigben, Ibom, etc. Perhaps, this will cure his aversion to any developmental initiative in Brass Island and the Niger Delta in general,” the statement said.
Apart from the minister of State (Oil)’s “undiplomatic language as a cabinet member implying that China is an undemocratic nation that sends its citizens to jail without a fair hearing, it is important to draw the attention of the HMSPRO to the international dimension of his false statements on the image of Nigeria. His self-serving outburst in the face of verifiable facts is a dent on the enviable heights attained by Nigeria in local content practice as attested to by several countries within the continent and beyond,” it said.
The statement advised Lokpobiri “to learn to separate the requirements of the office he currently occupies from his political ambition. He should look for another individual and agency of government to demonise in his quest to remain relevant. I am also aware that he is fighting a proxy war with his one-time principal (former MSPR) and only using me as a decor.”
According to the statement, Lokpobiri “should channel his energy to position himself as the Guest of Honour and allow the Board to commission the following partnership projects as part of the first anniversary of President Bola Tinubu: Nedo Gas Processing Plant complete with 300MMscf gas gathering hub in Kwale, Delta State; Better Gas 500MT LPG Storage and distribution infrastructure at Dikko near Abuja; 48,000Liter per day Bunnor Base Oil Production at Omagwa, PHC; Butane LPG Plant Kaduna (2nd plant after the Katsina Plant commissioned in December 2021) and Duport Modular Refinery, Egbokor (Legal squabbles permitting). It added that another set of projects would be due for inauguration by the second anniversary of Mr. President if the minister of oil will allow the Board to function without all the lethargy of woes he has brought to NCDMB since December 2023.
Above notwithstanding, NCDMB under Wabote created the NOGaPS $50 million Manufacturing Fund domiciled under the Bank of Industry to attract oil and gas equipment manufacturers to the Nigerian Oil and Gas Parks Scheme, NOGaPS, facilities established by the NCDMB, and increase access to affordable finance by the manufacturing entities.
The Fund has served as a model for local content practice across the African continent and inspired the creation of the African Energy Bank by the African Petroleum Producers Organization, APPO, in partnership with the African Export Bank, Afreximbank.
Realnews reports that countries like Angola and Namibia had engaged the NCDMB to understand the workings of the NCI Fund to replicate the same in their jurisdictions. The NCDMB under Wabote made wise investments.
“We are only operating with what we have hoping that production will increase when we are not investing in offshore. Take 1% of 6 billion dollars that is about 6 million dollars, out of the 6 million, about 30% of the people don’t want to pay until we go after them with forensic auditors. So what we get in a year is 4 million dollars. And the 4 million dollars is not paid at once. It is paid on an invoice basis even though the law says you pay that money as soon as you sign contracts. But those of us in the industry know that it is not practicable So you look at the total funds that come to the NCDMB, it is nothing, but with it, we can implement all our projects today, and we can carry out all our activities. We pride ourselves today that we have not taken any loan from any bank and we can set up funds to support local businesses. We make bold to say that the NCIF to the Bank of Industry is one of the most successful loan schemes in this country because we have almost 99% payback,” Wabote had explained before he was removed from office last year.
Realnews reports that the NCDMB has been at the forefront in pushing for a 100% Nigerian content agenda, especially in the oil and gas sector, and has continued to achieve great feats by investing in business opportunities that will bring in huge returns. However, what worries industry watchers is that if the current unguarded statements from the leadership of the ministry persist, the waning confidence in the sector will diminish totally and this will be a bad omen that will entrench declining investment in the sector.
A.
-May 12, 2024 @ 07:54 GMT|
Tags: Ekperikpe Ekpo Maureen Chigbo NCDMB President Bola Tinubu Simbi Wabote WalterSmith
