The Nigerian Content Development and Monitoring Board (NCDMB), at the weekend in Lagos signed a $10m equity investment agreement with Waltersmith Refining & Petrochemical Company Limited for the construction of a 5000 barrels per day modular refinery to be located at Ibigwe, Imo State.
The Executive Secretary of NCDMB, Engr. Simbi Kesiye Wabote and the Director of Finance and Personnel Management, Mr. Isaac Yalah signed on behalf of the Board while the Chairman of Waltersmith, Mr. Abdulrasaq Isah and the Executive Vice-Chairman, Mr. Danjuma Sale signed for the company.
Under the Shareholders Agreement and the Share Subscription Agreement, the Board took 30 percent equity in the modular refinery.
The Executive Secretary of NCDMB, Engr. Simbi Wabote said the investment decision was in line with the Board’s vision ‘to be the catalyst for the industrialization of the Nigerian oil and gas industry and its linkage sectors.’ The Board was also keen, he added, to support the Federal Government’s policy on modular refineries and meet the key objectives of the Petroleum Industry’s Seven Big Wins launched by President Mohammed Buhari in October 2016 and the Economic Recovery and Growth Program (EGRP).
According to him, “we have our exit strategy in place to ensure that the refinery reverts back as a fully owned, privately run modular refinery as our role is clearly defined as a catalyst.”
He also commended Waltersmith for developing a bankable proposition, stating that “they sorted out the project feasibility, regulatory approvals, and other pertinent details before reaching out to the Board with the value they are bringing to the table and a clear definition of the support they seek.”
Wabote confirmed that NCDMB in line with its mandate in the NOGICD Act 2010 and as part of the Nigerian Content 10-year strategic roadmap would intervene and fund projects and activities directed at increasing Nigerian Content in the Oil & Gas industry, especially those that utilize available resources in-country, add value and create jobs locally. “Establishment of LPG depots, resuscitation of abandoned or establishment of new LPG cylinder manufacturing plants, partnerships on mini-petrochemical plants, and several others fall into the pack of interventions we are willing to look at,” he said.
He advised project sponsors and promoters of modular refineries seeking the Board’s support to study the checklist of requirements hosted on the Board’s website.
He restated his belief that at least 10 percent of Nigeria’s oil production should be refined using modular refineries, assuring that the Board would be willing to consider proposals that meet the guidelines.
Chairman of Waltersmith, Mr. Abdulrasaq Isah explained that the modular refinery project was originally conceived to mitigate the incessant vandalism of the company’s crude oil pipelines but feasibility studies later indicated that it could be a viable business because of the significant demand for refined petroleum products. He disclosed that the refinery would be sited close to the firm’s oil field at Ibigwe, Imo State and the refined products would be distributed to consumers within 40 kilometer radius of the plant. He expressed optimism that the project would support the Federal Government’s plan to substitute imported refined petroleum products and as well as the strategy to use the establishment of modular refineries to address the menace of pipeline vandalism, illegal refining and other social challenges prevalent in the oil producing region.
He commended the leadership of the NCDMB for supporting the project and assured that the company would do everything within its power to make it a success. “This is landmark in the history of the NCDMB and we pride ourselves as the first beneficiary of this initiative.”