"THERE ARE VAST BUSINESS OPPORTUNITIES IN MIDSTREAM AND DOWNSTREAM OIL AND GAS SECTOR"-Simbi Wabote, NCDMB Boss

 

Executive Secretary, NCDMB, Engr. Simbi Wabote

Reported by Ali Elias

“There are vast business opportunities in the Midstream and Downstream sectors (oil and gas) ranging from processing, transportation, storage, and distribution; that could be started on a small scale and later scaled up to bigger enterprises”

This was revealed by Engr. Simbi Wabote, the Executive Secretary, Nigerian Content Development and Monitoring Board (NCDMB), while welcoming delegates to their two day maiden edition of the Nigerian Content Midstream and Downstream Oil and Gas summit, held recently, at Victoria Island, Lagos. The theme of the summit was “Maximizing Potentials in the Midstream and Downstream Oil and Gas Sector-a Local Content Perspective”

“The profit margin”, he further informed’ “increases towards the maximum in the Downstream sector, especially in the LPG value chain where the profit is highest at the distribution end. This serves as an incentive to a wider number of players in the Downstream businesses; thus spreading prosperity across board, instead of spreading poverty.

“What that means is that the recent events in Europe has further buttressed the fact that every nation must develop and implement strategic policy to ensure its energy security

“Energy security, according to International Energy Agency (IEA)” he said. “’is the uninterrupted availability of energy sources at an affordable price’.  This energy must be in ready-to-use form for the populace. This means values from the Midstream and Downstream sectors have been added, making this sector very important value issues in energy security”

Perhaps referring to the energy transition agenda of the developed countries of Europe and America, he warned that “a situation in which demand and supply of energy security is weaponized is very precarious for an important, and import dependent, country like Nigeria” “There is need” he went on to advise, “to maximize the potentials of our Midstream and Downstream sector for energy security and national pride”

He also used the opportunity of the Summit to further clear the air on the Board and Its role to the delegates,   operators, stakeholders, and the general public.  “The NOGICD (Nigerian Oil and Gas Industry Content Development) Act 2010 established NCDMB as the regulator of the Nigerian content in the entire spectrum of the oil and gas industry. We are not set up to regulate only the Upstream sector of the industry but also the Midstream and Downstream

“Our regulatory role is not to stifle the industry but to provide an enabling environment – an all inclusive business environment- for businesses to thrive

“We are for the development of the oil and gas industry; and this is why the word “development” is specifically included in the name of our agency, which is, Nigerian Content Development and Monitoring Board.

“it is important to highlight that this development goal goes beyond the oil and gas industry but is also there to linkages in other sectors of the economy covering construction, ICT, agriculture, R&D, education and others” he concluded

Hon. Min.of State for Petroleum Resources, Chief Timipre Sylva

In opening the Summit, the Minister of State for Petroleum Resources, Chief Timipre Sylva, noted that the summit “would serve as a platform to sensitize and enlighten stakeholder about the Board’s capacity building intervention initiatives in support of Nigerian content development in the Midstream and Downstream sectors”

Referring to the broad partnership which the Board has been consistently growing, the Minister recalls that “one of the mandates of the Ministry of Petroleum Resources, under the Next Level Agenda of the Federal Government, is the domestic refining capacity. He concluded on the note that “Some of the  mandates that NCDMB has built to grow the domestic refining capacity is in line with the vision of the Board to be the catalyst for industrialization of the Nigerian oil and gas industry and its linkage sectors”

Dr. Oladuni Owo, the Principal Consultant, Blackgold Authorities and Advisory, in her presentation, was of a strong view that refining is the game changer. In her words “if Nigeria even decides to refine, to focus on refining as a major game changer, because if we actually do more refining in Nigeria, you can industrialize the entire nation”

In her optimism, “If the Dangote refineries, existing refineries, modular refineries, all come on stream by 2023, Nigeria is going to be a net exporter, which is what our target should be” Then urges, “let’s make Nigeria the refining hub of the continent”

Speaking further, she allayed the fears that the global energy transition agenda poses to oil and gas producers, positing that “crude oil is not going to go away. Moreover, there are other crude oil related products that the energy transition does not affect because there is no renewable (for them) now”

During one of the Panel discussions it was highlighted that a major issue facing modular refineries and others, to the extent that some modular refineries are not producing at the moment is the problem of forex. “The refineries buy (crude) in dollars; and after refining sell the refined product in Naira” one of the discussants observed; and then posed a rhetorical question, “Is he expected to go and queue up at central bank to replenish his stock?

This question drew much applause and laughter from the attendees in obvious recognition of its validity. An appeal was then made to the Honourable Minister of State for Petroleum Resources to see what can be done about it. Even after that, and in subsequent presentations, the challenge of forex procurement and the implication continued to be a recurring decimal as a major disincentive to investment in the sector.

Moderating the Panel discussion on “Gas as a catalyst for sustainable economic development..” Abdulmalik Halilu, General Manager, Research and Statistics, NCDMB, remarked that “Nigeria has suddenly realized that gas is suddenly a developmental commodity and not a trading commodity; where we just extract, export, and count the dollars and we are happy. We have seen how gas has transformed hitherto very small economies like Qatar in the last 30 years and what it is today, you appreciate the role of gas. Qatar is an economy that has survived because of gas almost 100 percent, and the third largest economy (in the Middle East) in terms of per capita income, with $80,000 compared with Nigeria’s $5,000”! (Exclamation ours)

Contributing to the discussion, Mrs. Nkechi Obi, Managing Director/Chief Executive Officer, Tecno Gas Limited, spoke on gas availability, gas penetration, and the constraints that she would like Federal Government to look into for survival.

She first appreciated the NCDMB for their intervention in assisting them with facility for working capital, which they have paid back.

“We have problem with substandard cylinder that are coming in from China.

“In terms forex, I am very happy that the Minister was here yesterday and that has actually been a very big problem for us. There has to be an intervention for the gas sector, strictly. It is not just that they have given us support with funds at CBN (Central Bank of Nigeria) because the funds by CBN are all in naira. We should be able to have some of these funds in dollars. They should be able to support us because manufacturing is not easy and you need all kinds of infrastructure to make sure that the plant is working all the time.

“In terms of penetration, there are very serious factors that are not allowing the cylinder penetration in the country. I have always mentioned in the past that anywhere globally, gas penetration depends on government. I know there are a lot of policies but these policies never get to be implemented.

“Cylinder ownership, cylinder exchange program has to be adopted. The way to increase penetration is getting marketers, to own their cylinder and let them be responsible for it; so that even when you talk about maintenance of the cylinder they have responsibility over that; unlike the way we have allowed the roadside to dominate our cylinder market”

Continuing in the same passionate manner, she revealed that “Ghana, Cameroun, Senegal.. . their adoption level  per capita, in terms of domestic usage is very high, higher than that of Nigeria.

“What we are having is demand destruction.

“The domestic gas consumption today is dropping. Why is it like that? It is because the price of gas is so high-very high. What we are witnessing today is that all the efforts we have made in the past, those things, are going down. The demand we had created before is collapsing; because there is still no policy to get this on the increase. What we have asked here is that the government and the CBN must have a way to have an intervention”

In his presentation under the topic, “Deepening Nigerian Content Potentials in the Refining & Petrochemical Value Chain- Projected Economic Impact for Nigeria”, Engr. Babajide Soyode, representing Alhaji Aliko Dangote, Chairman Dangote Group, made some revelations about NNPC (Nigerian National Petroleum Corporation)  and refineries generally. “By the way” he said, “NNPC refineries are not old, they are not junk, all that talk is just to make their value peanut. Refineries don’t get old; but every 3-4 years rehabilitate them. What you do is to upscale them; and up scaling is in terms of their capacity

“If these refineries are properly up scaled it would turn Nigeria to a global production hub so we can supply all of Africa fuel”

He also queried why the industry equipments cannot be fabricated in Nigeria; and urged NCDMB to do more in this area.

The President, Bunker Traders  Association of Nigeria, Sola Adewumi, seized the opportunity of the summit, while making his presentation, “Opportunity Areas and Challenges of Investing in the Petroleum Product Marketing and Bunkering Sector” to correct the negative impression people have about bunkering. He informed that bunkering is in fact one of the opportunities in the oil and gas sector. It is legal, to the extent that the absence of its activities may pose a clog in oil and gas industry wheel. What is illegal about it is when it is carried out outside its approved ways.

According to Emeka Obidike, Executive, LUPAN (Lubricants Producers Association of Nigeria) “the industry has been doing very, very well” He took the delegates from when the industry was dominated by IOCs (International Oil Companies) through its phase when Fmr. President Ibrahim Badamasi Babangida, liberalized the entire sector, paving way for local players to come in, and ended on the note that “this is a sector (now) operated fully by Nigerians”

While closing the Summit, the ES, NCDMB  Engr. Simbi Wabote, noted that “in NCDMB, part of what we do is to start a dialogue like this; and through this dialogue try to get feedback from practitioners, potential practitioners, potential business men, then we take the outcome of the dialogue and begin to work them. Some of the challenges are common, some are particular, but what is common is what we focus on…to clear the roadblocks for you”

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Published by Rareview Communications

Other photos from the event