25 January 2016, Lagos – The Nigerian Content Development and Monitoring Board (NCDMB), has started engaging banks to find ways of providing long-term funding to oil and gas firms, the Executive Secretary, Denzil Kentebe, has said.
Kentebe, who spoke on the sideline of the Load-Out and Sail-Away ceremony of Chevron’s Sonam Non-Associated Gas Wellhead Platform (Sonam NWP), built by Hyundai Heavy Industries and Nigerdock in Lagos at the weekend, said the discussion has become imperative to enable banks move away from the current short term facilities to oil and gas companies, as the oil industry projects are long tenured.
He said the Board has been in discussion with banks on the issue. “Discussion with banks to ensure they (banks) don’t put pressure on oil firms is nothing new to us, because we have over time been engaging the bankers and that has been one of the areas we have been pushing them to make sure we have facilities that last for quite long and not just short term facilities.”
He debunked allegations that the Nigerian Content Fund has remained idle while many players in the industry couldn’t access funds to execute their jobs, or projects.
Kentebe, who refused to be drawn as to the current value of the Fund, or the amount so far disbursed, said Nigerian companies are utilising the Fund, “therefore it is not idle,” he added.
He said: “The Nigerian Content Fund is not idle. The Fund is being utilised by Nigerian companies. For instance, Ladol, which is in Lagos, is taking advantage of the facility, and a lot of other companies. We are doing all we can to make sure Nigerians are more aware of the Fund’s availability. We are also engaging the banks to ensure that the banks release information at their disposal that can help their clients on the standards of the facilities that can be tapped into.”
He expressed concern over the job loss in the industry on account of low oil prices in the international market.
The Nigerian Content Development Fund (NCDF) as at April last year, had about $540 million. The Fund was established by the Nigerian Oil and Gas Industry Content Act (NOGIC Act), 2010 to address financial and liquidity challenges of local companies that operate in the oil and gas industry.
The Fund is built through contribution of one per cent from every contract awarded to any operator, contractor, subcontractor, alliance partner, or any other entity involved in any project, operation, activity or transaction in the upstream sector. It is deducted at source by contract awarding entities and paid into designated accounts which are kept with Custodian Banks under the programme
- The Nation