The Chairman, Oil Producers Trade Section of the Lagos Chamber of Commerce and Industry, Mr. Mark Ward, has said that international oil companies operating in the country under the aegis of OPTS have brokered over $10bn bank funding for local oil and gas contractors.
He was on Wednesday quoted as saying this at the third annual Practical Nigerian Content Forum in Yenagoa, Bayelsa State, on Tuesday.
He said, “OPTS members have deployed several initiatives to address local contractors’ funding challenges by collaborating with Nigerian banks to provide easy access to contract and purchase order funding.
“Specifically, OPTS members have brokered partnerships with Nigerian banks to provide over $10bn in financing support at reduced interest rates, relaxed collateral requirement and reduced loan processing time. This has also increased capacity of the banks to service financing needs of the oil and gas industry contractors/vendors.”
Ward also said the OPTS members had always supported local content development in Nigeria even before the enactment of the Nigerian Content Development Act.
He said the OPTS members supported the country’s local initiate and that their support had translated into $7.2bn contribution into the Nigerian economy.
Of this fund, he said $5.4bn was retained through the upgrade of fabrication facilities and another $1.8bn spent on maritime.
He said, “In the area of fabrication, we have supported facility improvement and upgrade efforts of two leading companies, Nigerdock and Dorman Long, by providing their much needed technical and financial support.
“This has led to the retention of about $5.4bn in the Nigerian economy from the Floating Production Storage and Offloading value chain, fabrication of the first made-in-Nigeria buoy, and in-country fabrication of over 10,000 of steel.”
He said the group had also partnered with several indigenous manufacturers to improve their manufacturing processes in line with global standards.
“This resulted in SCC Nigeria – formerly a water pipe manufacturer – producing the first made-in-Nigeria Double Submerged Arc Welded Helical Pipes,” he said.
Ward said OPTS’ support also helped Cameron Offshore Systems to produce the first made-in-Nigeria Subsea Christmas Tree in 2012.
He said, “In addition, one of our members has signed domestication agreements with six Original Equipment Manufacturers and their local partners to establish assembly/manufacturing facilities in Nigeria.
“In terms of supporting asset acquisition, we embarked on a policy of deliberately replacing hired foreign-owned flagged vessels (such as Anchor Handling Vessels, Crew Supply Vessels, etc) with Nigerian-owned flagged vessels. This has led to the retention of about $1.8bn out of the estimated $3.5bn annual maritime spend in the Nigerian economy.
“Some of our other initiatives in the maritime sector to promote indigenous vessel ownership also attracted key investments including Nigerdock’s decision to set up an on-country dry docking facility. In several instances, we have also provided innovative project funding arrangements and increased our business with local suppliers to encourage increased indigenous rig ownership.”
Similarly, the Executive Secretary, Nigerian Content Development and Monitoring Board, Mr. Ernest Nwapa, said Nigerians, who were ready and willing to set up manufacturing facilities in the oil and gas industry, could access the Nigerian Content Fund.
He said already, some enterprising Nigerians had started benefiting from the fund.
According to him, the fund is growing and has 50 per cent interest rebates as against what banks offer.
The fund, according to the Nigeria Content Act, provides that all operators and contractors in the upstream oil and gas industry must contribute one per cent of all contract sums to it.
He said part of the fund was being used for direct intervention by the board while the remaining 70 per cent would be for Nigerians to access to form companies that would add value to the industry and create jobs.
The real way to benefit from the Nigerian Content Act, according to Nwapa, is for Nigerians to be deeply involved in manufacturing and not to limit themselves to contract seeking.
He said in the last 30 years, Nigeria had lost about $380bn as capital flight to the western world.
In addition to that, he said about 10 million direct and indirect jobs could have been created.