Crude Oil Prices: Wabote Sees Increased Prospects For African Producers 

Executive Secretary,Nigerian Content Development and Monitoring Board (NCDMB), Engr. Simbi Wabote,says the recent spike in crude oil prices presents excellent opportunity for African oil producers and its service providers to develop new fields, ensure security of supply and affordability as well as increase revenue generation.

.He disclosed this  at the Sub-Saharan African International Petroleum Conference (SAIPEC) organised in Lagos by the Petroleum Technology Association of Nigeria (PETAN),

He said that the price of crude oil has increased by 50 percent in 12 months and urged African oil producers should use the opportunity to also make plans towards energy transition, and lowering the cost of services.

Speaking  on the topic “Sub-Saharan Africa Local Content Collaboration Strategy,” Wabote stated that an enabling regulatory framework backed with the appropriate legislation is very fundamental in Local Content practice and commended African oil producers for putting in place investor-friendly laws to promote the oil and gas industry as well as ongoing collaboration among the countries to advance the local content journey.

According to him, such laws will align with the goals of the Africa Continental Free Trade Agreement (AFCFTA) which seeks to create the world’s largest free trade area by integrating 1.3 billion people across 54 African countries, with the objective of tapping into a combined Gross Domestic Product (GDP) of over $3 trillion

He described AFCFTA as the practice of local content on the continental level, noting that it is a huge trading and collaboration platform for the participating countries.

He harped on the need for African oil producers to utilize existing cross-border infrastructures to unlock the development of stranded assets or bring energy closer to the people. He mentioned that the existing West Africa Gas Pipeline (WAGP) and ongoing AKK gas transmission infrastructure provide a good opportunity to serve regional markets.

He also disclosed that the SHI-MCI yard in Lagos which is the only FPSO integration yard infrastructure in Africa has put Nigeria at a vantage position to serve the wider African market.

He said the Nigerian Content Intervention (NCI) Fund has exceeded half a billion dollars.

He indicated that the NCI Fund which is extended as low-cost credit to qualified oil and gas companies covers asset acquisition, project financing, manufacturing, working capital, loan refinancing, women in oil and gas, and research and development.

Wabote added that the Board is using the NCDF to catalyse the construction of modular refineries, gas processing plants, LPG terminals and bottling plants, LPG Cylinders manufacturing plants, lube oil blending plants, base oil production plant, methanol production plant, and many others.

He advocated  that a similar fund replicated at the continental level and be utilized to develop huge mega oil and gas projects, particularly as world financial institutions were getting reluctant to finance hydrocarbon-related projects.

He said: “let me use this opportunity to once again canvass for the creation of an African Local Content Fund that could be utilised to set up a bank or finance institution to provide funding for the development of oil and gas projects in Africa. This is especially important against the backdrop of the reluctance and outright declaration by some banks and financial institutions to stop funding of hydrocarbon-related projects. I hope the AFRIEXIM Bank, AFDB, or the AU through the AFCFTA Secretariat need to institute a form of contribution, no matter how little, as a fund to support the continent’s need for funds.”

He explained that “in our own case, the deduction of one percent of every contract awarded to any contractor, subcontractor, alliance partner or any other entity involved in any project, operation, activity, or transaction in the upstream sector of the Nigeria oil and gas industry has resulted in us having a pool of funds to support various intervention programmes.”

In his remarks, the Chairman, PETAN, Mr. Nicholas Odinuwe advocated for regional collaboration and innovation to enhance the future of energy sector. He disclosed that the key enabler for the continent is to create a collaborative ecosystem between the local industry stakeholders alongside the African Continental Free Trade Area (AfCFTA).

Odinuwe advised  governments across Africa to provide necessary incentives to attract private sector investments across the entire value chain which would trigger a massive economic revolution, human capital development, and deepen local content across the continent.