19 minute read
Marginal Field bid round enhances local content capacity, impacts Nigeria’s economy- Engr. Auwalu
The announcement of marginal field bid round in June 1st compelled the operators and stakeholders in the industry longing for explanation on how the process will be carried out by the country’s regulator.
Foremost petroleum industry association, Nigeria Association of Petroleum Explorationist (NAPE) whose members operate mostly at the upstream, invited DPR Director, Engineer Sarki Auwalu to give more insights on the bid round that is ongoing. The regulator of Nigeria’s petroleum industry across the value chain, gave a vivid picture of the bid round.
Advertisement
REGULATORY FRAMEWORK OF THE MARGINAL FIELD
Engr. Auwalu spoke fur ther disclosing that the national aspiration of oil and gas sector is the driver of marginal field development. The country aspires to have 40million barrels and grows its reserve of gas to about 220 trillion cubic feet (tcf) by 2030. The target for 200 tcf by 2020 was achieved in 2019.
The capacity is to produce up to 300million barrels. The thought of government in midstream is to monitise gas, eliminate gas flaring and domestic sufficiency. This will be done through power generation, commercial activities in terms of gas-based industries and increase crude refining capacity.
F o r t h e d o w n s t r e a m , t h e government intention is to achieve price freedom, optimum product and supplies sufficiency. There will be alternative period in terms of Compressed Natural Gas (CNG) and Liquefied Petroleum Gas (LPG), including other related fuels. These are mainly drivers for marginal field development.
The Chief Regulator said, technically, a marginal field is any field with reserves that is reported annually to the DPR and has remained unproduced for a period of over 10 years. These fields are not considered by license holder for development. Also, fields that have had exploratory well drilled and are known as oil or gas for more than 10 years. Fields that present lease holders considered for farm out due to portfolio rationalization.
He made clarification that such fields which the “president may from time to time identify as marginal based on constitutional right and provision of Petroleum Act.” In the fiscal regime regulation of 2005, the president reserves the right to give or withhold concept of farm out of marginal field. The federal government also reserves the right to withdraw award should any awardee fails to comply with applicable terms.
OBJECTIVES OF MARGINAL FIELD PROGRAMME
The entire objective of marginal field programme is a win-win value proposition for government, Nigerians and foreign investors. It is multifarious range of objectives to achieve development of marginal field. Principally, the indigenous participation is being promoted for revenue generation. Production increases, technical capacity built and oil and gas reserves growth. Capital inflow encouraged while synergy and partnership promoted.
Contractor Hands Over Completed NCDMB 17-Storey Headquarters
Managing Director of Megastar Technical and Construction Company, Arch. Harcourt Adukeh handed over the keys to the Executive Secretary of NCDMB, Engr. Simbi Kesiye Wabote represented by Director, Planning, Research and Statistics, Mr. Patrick Daziba Obah
Th e N i g e r ia n C o n te n t D e v e l o p m e n t a n d Monitoring Board (NCDMB) on Monday took formal possession of its newly completed 17-storey headquarters building from the major contractor of the project, Megastar Technical and Construction Company (MTCC). The symbolic handover of the keys to the edifice was held at the facility located along Ox-Bow Lake Road, Swali, Yenagoa, Bayelsa State. The event has paved the way for the formal commissioning of the building by President Muhammadu Buhari expected to hold soon. The handover and commissioning will be followed by gradual relocation of NCDMB personnel and operations from the offices at Opolo and Onopa, both in Yenagoa to the new building. The Managing Director of Megastar Technic al an d Cons truc tion Company, Arch. Harcourt Adukeh handed over the keys to the Executive Secretary of NCDMB, Engr. Simbi Kesiye Wabote.
The Nigerian Content Headquarters was conceived in the early years of the Board, but formal construction commenced in 2015. The entire project comprises 17 floors office complex, which was christened Nigerian Content Tower, 4 storey multi-level car park and a 1000-seater capacity conference hall and other ancillary facilities. In his comments, the Executive Secretary applauded the technical competence of the main contractor, and other sub-contractors, highlighting that they delivered a world class project within the specified timeline. He confirmed that the Board utilized the project successfully to create jobs, impact skills, procure local goods as well as change the landscape of Bayelsa State.
Represented by the Director, Planning, Research and Statistics, Mr. Patrick Daziba Obah, he commended the safety records achieved on the project, particularly for the fact that there was no Loss Time Injury (LTI). He stated that “beyond just giving us a beautiful edifice, the project safety statistics have been very impressive for a building of this size.” He described the completed NCDMB Headquarters as a clear demonstration that Nigerian companies can deliver complex projects to the desired quality level, cost and schedule, if given opportunities. He hinted that the handover marked the beginning of another key phase in the activities of the Board as it will require a step up in its assets management capabilities.
Arch. Harcourt Adukeh stated that the project employed over 600 Nigerians at the peak of construction, with over 70 percent of them drawn from Bayelsa State. He expressed delight that a good number of the workers were women and they had been mobilized to other construction sites and would also work for Megastar in forthcoming projects, in view of their proficiency and dedication. He extolled the Executive Secretary of NCDMB for deploying his rich technical background and projects experience, which helped to ensure the success of the project. “We would say that we are highly privileged to have a client like NCDMB, their timely response and unalloyed support paved way for the success we have recorded”, he said. He confirmed that the company executed a total of 4,916,223 manhours on the project and worked for 1,542 days on site without any Loss Time Injury (LTI).
While appreciating the consultants that worked on the project, he pleaded that Nigerian contractors should be given more opportunities as they can deliver projects with bigger expectations. He also thanked President Muhammadu Buhari and the Minister of State for Petroleum Resources, Chief Timipre Sylva, for facilitating timely approvals which contributed immensely to the delivery of the project.
Members of Governing Council for the Nigerian Content D e v e l o p m e n t a n d Monitoring Board (NCDMB)
The G overning Council of the Nigerian Content D e v e l o p m e n t a n d Monitoring Board (NCDMB) has approved the establishment of a US$50 million Nigerian Content Research & Development Fund (N CR& D F ). At th e N CD M B Governing Council meeting which held on June 16, 2020 under the chairmanship of the Minister of State for Petroleum Resources, Chief Timipre Sylva, the Council approved the deployment of $50million Research Fund for sustainable funding of NCDMB’s mandate on Research & Development as enshrined in Sections 37 to 39 of the Nigerian Oil and Gas Industry Content Development (NOGICD) Ac t 2010 , which emp owers NCDMB to superintend over R&D activities in the oil and gas industry. NCDMB is implementing the Research and Development Roadmap to institutionalize a robust R&D ecosystem that will lead to continuous development of technology, materials and process for industry application from indigenous research efforts.
A major success pillar is closing systemic weakness of inadequate funding architecture for R&D activities in the Oil and Gas industry. Nigeria spends about 0.2% of its Gross Domestic Product (GDP) on R&D and this indicates a poor commitment to R&D, resulting in over-dependence on foreign technology for critical economic development activities, including oil and gas operations.
The NCDMB R & D Fund is expected to close this gap and will be applied in four broad Intervention areas, namely-Research (basic and applied), establishment of Centers of Excellence in Academic and Research Institutes, Sponsorship of commercialization of Research and Sponsorship of endowment of professorial chair. The operating model has been designed to ensure transparent and well-focused application of the Fund and it includes a Governance structure to leverage experienced researchers and industry experts in the decisionmaking process of selecting activities to be funded from the NCDMB R&D Fund. The Fund will be domiciled in a TSA Sub-Account in CBN.
The NCDMB will put in place an outcome focused performance metrics that will measure success in the application of the Fund and form part of the reporting template to the Governing Council on an ongoing basis Following the Governing Council approval, the Nigerian Content Research and Development Council (NCRDC) held a meeting on June 25 and revalidated the identified focus areas for the utilization of the Fund. The council also decided that the Fund would also be deployed in developing and implementing a Communication strategy for effective dissemination of NCDMB R&D interventions as part of stakeholder management process.
The NCRDC also approved the institution of a Performance management strategy to track progress and ensure application of the R&D fund in line with the key performance indicators (KPI) approved by the Governance Council. It also approved the list for distribution of the smart gas leak and smoke detector alarm device for field trial. The product which was conceptualised by Amal Technologies is a research prototype sponsored by NCDMB The scope of NCDMB’s R&D regulatory role includes development of capabilities for Research and Innovation in Nigeria including facilities,
e q u i p m e n t , p e r s o n n e l a n d processes, review and approve R&D plans of operating companies, monitor implementation of R&D projects to ensure the execution of Nigerian content requirements of domiciliation within Nigerian R&D Centers.
Other roles include tying R&D spend to addressing industry technology, material, and process challenges
Th e G o v e r n i n g C o u n c i l of the Nigerian Content Development and Monitoring Board (NCDMB) has approved the expansion of the Nigerian Content Intervention Fund from US$200 million to US$350 million. The enlargement of the Fund by US$150 million was part of the decisions taken at the recent NCDMB Governing Council meeting, which held virtually on June 16, 2020. The meeting was chaired by the Minister of State for Petroleum Resources, Chief Timipre Sylva, who is the Chairman of the Council. The Council approved that US$100 million from the additional funds would be deployed to boost the five existing loan products of the NCI Fund, which include manufacturing, asset acquisition, contract financing, loan refinancing and community contractor financing. Similarly, the Council also approved that US$20 million and US$30 million respectively should be deployed to two newly developed loan product and facilitating commercialization of research breakthroughs and Facilitating the deployment of successful products of research in industry Operations.
To achieve its R&D mandate NCDMB developed the R&D framework anchored on seven (7) policy thrust, including focus on market driven research, establishment of world class Research and Development types – the Intervention Fund for Women in Oil & Gas and PETAN Products, which include Working Capital loans and Capacity Building loans for PETAN member companies. The NCI Fund was instituted in 2017 as a US$200 million Fund managed by the Bank of Industry (BoI), engaged to facilitate on-lending to qualified stakeholders in the Nigerian Oil and Gas industry on five loan product types. The NCI Fund is a portion of the Nigerian Content Development Fund (NCDF), aggregated from the one percent deduction from the value of contracts executed in the upstream sector of the oil and gas industry. About 94 percent of the NCI Funds has been disbursed to 27 beneficiaries as at May 2020. NCDMB has received new applications from 100 companies for nearly triple the size of the original fund. Guidelines for the NCI Fund provide that beneficiaries of the Manufacturing Loan and Asset (R&D) Centers of Excellence, establishment of Research and Development Council and provision of sustainable funding to support Research and Development. Other areas of focus include development of stakeholder collaboration matrix for Research and Development (R&D), provision of enablers for commercialization of research breakthrough and facilitation of acceptance and utilization of
Nigerian Content Intervention Fund (NCIF) increased to US$350m
products of research by end users. acquisition Loan can access a maximum of US$10million respectively. Also, beneficiaries of Contract finance Loan can access US$5million while beneficiaries of the Loan Re-financing package can access US$10million, with beneficiaries of the Community Contractor Finance Scheme limited to N20million. The maximum tenure for all loan types is 5 years and applicants cannot have two different loans running simultaneously. At the onset of the Fund, the applicable interest rate for the various loan types was pegged at eight (8) percent, except the Community Contractor Finance Scheme, which was five (5) percent.
However in April 2020 as part of NCDMB’s response to mitigate economic impact of the coronavirus pandemic, the Governing Council approved reduction of the interest rate from eight (8) to six (6) percent per annum for all four of the loan products. The Board also extended the moratorium for all loan products.
NCDMB refutes reports of Petroleum Minister demanding $20m for Bayelsa elections.
Simbi Wabote & Timpre Sylva
Th e m a n a g e m e n t o f the Nigerian Content D e v e l o p m e n t a n d Monitoring Board (NCDMB) has reacted to claims by an online medium that the Minister of State for Petroleum Resources, Timipre Sylva, demanded the sum of $20 million from the agency to fund Bayelsa re-run elections.
This is contained in its press statement released on June 19, 2020. The NCDMB while denying the allegation described it as spurious, malicious and a piece of fake news. The board also pointed out that the sponsors of the lies were bent on tarnishing the good image of the NCDMB, and the reputations of the Executive Secretary, Engr. Simbi Wabote, and the Minister of State for Petroleum Resources, Timipre Sylva. According to the statement by NCDMB, “The attention of the management of the Nigerian Content Development & Monitoring Board (NCDMB) has been drawn to a spurious and malicious story published by an online mediumPOINTBLANK NEWS, titled - Sylva
demands $20 Million from Local Content Board Boss to fund Bayelsa Re-Run Elections.
“Ordinarily, the Board would have ignored this fake news, especially one planted in a notorious online publication. However, we are constrained to react because sponsors of the wicked tissues of lies are intent on tarnishing the good image of the Board and strong reputation of the Executive Secretary, Engr. Simbi Wabote and that of the Honourable Minister of State for Petroleum Resources, Chief Timipre Sylva and portray the Board as partisan.”
The board believes that the fabrication was sponsored by those trying to contest for senatorial elections in Bayelsa West Senatorial District, who were in the habit of raising wild allegations to lure NCDMB into local politics.
While trying to clarify issues, the NCDMB stated the following: * “There is no iota of truth in that story. It is completely mendacious and a figment of the imagination of those behind it.
* The current Minister of State for Petroleum Resources, Chief Timipre Sylva has never demanded nor suggested to the Board and its leadership to fund any political activity in Bayelsa or any part of the country, however described.
* The Nigerian Content Development Fund (NCDF) was instituted for funding capacity development in oil and gas activities and cannot be applied for any other purpose except that expressly stated in the NOGICD Act.
* It is preposterous to allege that the Minister is demanding $20m from NCDMB to fund elections, whereas all funds belonging to the Federal
* Government are in the custody of the Central Bank of Nigeria and NCDMB’s funds cannot be withdrawn except for legitimate purposes consistent with its mandate. Thus it is absurd and unreasonable to contemplate or imagine that the Board can withdraw any money from the NCDF except for any of the purposes it was instituted under the Act.
* The status of NCDMB finances are in the public domain and can be verified by anyone or group that is so interested; and that is why the Executive Secretary has consistently announced the balance sheet and utilization of NCDF at every oil and gas fora.
* Contrary to the wicked suggestion in the story, NCDMB has never awarded any contract to the Minister or any company connected to him and neither has the Board awarded contracts for shore protection in Brass LGA of Bayelsa State because it is clearly outside our statutory mandate.
* It is pertinent to state that NEITI declared NCDMB as the most transparent federal oil and gas agency and the Board achieved this lofty feat because our operations are always compliant with the government’s financial regulations.
* NCDMB’s financial processes and operations are always open and transparent. The Board and its leadership have never been manipulated and cannot be influenced to favour individuals or political parties, no matter how highly placed because what the Board does must be in line with its mandate in the NOGICD Act.
* One would have expected POINTBLANK NEWS, if it were a credible media outfit, to conduct a thorough investigation with a view to validating the veracity of the story before going to press. But in this case, it was a mere conjecture by the authors to please their sponsors.
* From the foregoing, it is obvious that this story was calculated to malign the Board, its leadership and the Honourable Minister of State for Petroleum Resources, to score cheap political points and create disaffection.
Going forward, the Board will not hesitate to take appropriate legal action against any individual or media organizations that publish materials that are spurious, malicious and libellous.”
NCDMB signs investment agreements with DUPORT Midstream, ERASKON on energy park, oil blending plant
..projects to create 1500 jobs
Th e Nige ria n Co nte nt D e v e l o p m e n t a n d Monitoring Board (NCDMB) on Friday signed equity investment agreements with two companies-Duport Midstream Company for the establishment of an Energy Park in Egbokor, Edo State and Eraskon Nigeria Limited, for a lubricating oils blending plant in Gbarain, Bayelsa State.
The Board’s investments will catalyse industrialization, with the two partnerships expected to generate about 1,500 direct, indirect, and induced employment opportunities, in addition to several other spin-off economic activities that will be developed where these projects are located. The planned Energy Park comprises a 2,500bpd modular refinery, 30MMscfd gas processing facility, which will include a CNG facility and 2MW power plant. Similarly, the lubricating oils blending plant will be the first of such plant in Bayelsa State and will have the capacity to produce 45,000liters per day and enhance
the availability of engine oils, transmission fluids, grease and other products.
The Executive Secretary NCDMB, Engr. Simbi Wabote signed the Shareholders Agreements and Share Subscription Agreements at the Board’s liaison office in Abuja while Dr. Akintoye Akindele, Managing Director of Duport Midstream Company and Mr. Maxwell Oko, Managing Director of Erakson Nigeria Ltd equally signed for their firms respectively.
In his remarks, the Executive Secretary explained that the investments were part of the approvals granted recently by the Board’s Governing Council chaired by the Minister of State for Petroleum Resources, Chief Timipre Sylva. He clarified that the investments were coming under the Board’s commercial ventures program and was in sync with the Board’s vision to serve as a catalyst for the industrialisation of the Nigerian oil and gas industry and its linkage sectors. Wabote indicated that the Duport partnership is in furtherance of the Board’s strategy to enhance in-country value addition by supporting the establishment of processing facilities close to marginal or stranded hydrocarbon fields. He stressed that the recent drastic drop in the prices of oil had made it imperative to have refining capacities to reduce if not eliminate cases of stranded oil cargoes without buyers. Recalling the
Board had already had partnered with the Waltersmith Group and Azikel Petroleum Company for the establishment of modular refineries in Imo and Bayelsa State respectively, he underscored the emerging investment opportunity in developing capability and capacity in-country to maintain the various kits in the modular refinery on a sustainable basis.
According to him, ”we do not want a situation where the modular refineries are folding up one after the other in a few years due to lack of technical support or inability to secure critical parts.” He stated further that NCDMB have commenced discussions with some Original Equipment Manufacturers on how we domicile the fabrication and assembly of modular refineries in-country. ”Our strategy is to begin to claw back bits and pieces of the various components of the modular refinery untill we fully domesticate the manufacturing of a large percentage of the kits in-country,” he said.
Giving details of the partnership with Eraskon, the Executive Secretary pointed out that the blending facility had the capacity to be deployed for the production of other chemicals and reagents. “The packaging section can also be used for generating additional incomes for the business and for creation of employment,”he said. He said the Board was excited at the prospects of these partnerships in jobs creation, value retention, petroleum products availability, utilisation of our abundant gas resources and in the development of in-country capability.
In his comments, Dr. Akintoye Akindele conveyed the company’s excitement to partner NCDMB in the development of the Energy Park and assured that the project would add value to the nation’s natural resources and create wealth and social amenities for communities. He added that the Energy Park targets to create over 1000 jobs and impact 10,000 families, and indicated that the modular refinery would produce a combination of Naphtha, diesel, kerosine and HFO, otherwise known as residual fuel oil. He pledged the company’s commitment to exceed expectations and help increase government’s revenue, reduce dependence on imported petroleum products
Similarly, Mr. Maxwell Oko noted that Eraskon was delighted to contribute to the industrial development of Bayelsa State and the Niger Delta. He said the company would benefit from operating from the same industrial corridor with Shell Gas Gathering facility, Azikel Refinery and NCDMB projects at Polaku. He promised that the company would be a good story of NCDMB partnership and the project would be completed in two years.
