01 January 2014, Lagos –The Chairman and Chief Executive Officer of ELSHCON Nigeria Limited, Dr. Emi Membere-Otaji has stated that if successfully implemented, the planned marginal fields bid round would boost the Nigerian Content in the oil and gas sector.
While speaking on the exercise, Membere-Otaji said if the Department of Petroleum Resources, DPR, and the Ministry of Petroleum Resources followed the new guidelines they established, the current bid round would be more successful than the previous one.
He said by insisting that no individual would own more than 25 percent equity in the indigenous companies that would be awarded the fields, the DPR was determined to ensure that the mistakes of the previous exercise were not repeated.
According to him, the 2001 exercise was not very successful because individuals without financial capacity were allowed to own 100 per cent of equity in the companies that were awarded the fields
He said such ownership structure made it difficult for the companies to raise funding to develop the fields.
“I participated in the current road-show and DPR is insisting that this time around, the new investors must demonstrate that they have the money. Not that the money will be paid into the account of DPR but that DPR must feel the money and see the money to confirm that the investor has the financial capacity. The guidelines also provide that, instead of having a consultant to do the bidding, the awardees must demonstrate competence. If the DPR and the Ministry of Petroleum implement the rules they have set, the new investors will do better. The problem we have in Nigeria is that we establish good guidelines and rules but we will not follow them. But we must give the DPR and the Ministry of Petroleum the benefit of doubt that the rules will be followed in the selection of the investors,” he said.
He said the marginal fields were currently not adding value to the Nigeria’s economy because the International Oil Companies (IOCs) held on to them for several years without developing them.
Membere-Otaji, whose company is an Engineering, Procurement, Construction and Installation (EPCI) contractor, as well as marine services provider, listed the advantages of the award to include boosting Nigerian Content, increasing Nigeria’s crude oil production and reserves, as well as empowering indigenous producers to improve their capacity. He said the Nigerian Content would be the major beneficiary as the award of the fallow fields to indigenous producers would open up opportunities for Nigerian companies in other areas, including fabrication.
ELSHCON Nigeria Limited, which is currently spinning off its marine division to a new company called ELSHCON Offshore Nigeria Limited, owns and charters marine vessels and provides other marine logistics and jetty services for offshore activities. The company is also involved in the construction of tug boats, barges, accommodation vessels, ship building and ship repairs.
*Ejiofor Alike, Thisday