02 May 2012, Sweetcrude, HOUSTON - Petroleum Resources Minister, Mrs. Diezani Alison-Madueke, at the ongoing Offshore Technology Conference in Houston, Texas, United States, spoke of the immense potentials in Nigeria’s oil industry, assuring investors that the government would carry on with aggressive reforms in the sector.
Declaring the Nigerian stand at the conference open, the minister said the government was determined to ensure reforms in the sector for the benefit of Nigerians.
Alison-Madueke stated that government was also determined to extend support to indigenous players in the oil sector.
“We will continue to give robust support aggressively to our indigenous operators and service providers, while at the same time acknowledging the technological wherewithals and financial expertise and partnership that our multinationals and our foreign partners bring,” she said.
She added: “We will expect that this will continue for a long time to come because there are partners across the board. But, I must say that since the advent of the Nigerian content act, as every year passes, it is really wonderful to see the tremendous frontiers that our indigenous operators and service providers are making in the oil and gas sector.”
Chairman of the Petroleum Technology Association of Nigeria (PETAN), Mr. Emeka Eneh, in his speech, said lack of capital to build needed infrastructure for capacity development was the greatest challenge confronting indigenous operators in the sector.
Eneh said: “The real challenge of capacity is not the lack of know –how, it is the absence of capital to build the infrastructure that is needed. The Nigerian companies have been playing a losing game.
“It is simple. Global finance the world over, for a company competing with the Nigerian company located in United States and Europe, they are looking at one or two percent maximum interest on very long term capital, 5 years, 10 years, 20 years capital.
“Nigerian companies are dealing with 20-25 percent interest on two year capital, so it difficult to compete.
“Now the advantage of creating bankable budget with the local content act comes with the Nigerian Content development Fund (NCDF), which if properly managed and linked together is going to create that kind of link to boost the capacity of Nigerian companies.
“So capacity is a real key issue and funding or capitalisation is real big challenge”.
He stated that PETAN was currently working with the Nigerian Conternt Development Management Board (NCDMB) to establish the criteria for the accessibility of the NCDF.
“Right now, we are at pilot stage and there are still a number of companies that are already being lined up to tap into the fund. Ofcourse they are still challenges, challenges of longer term tenures; interest rate to be lower; all these things are being worked out,” he said.