‘30% equity in Waltersmith’s modular refinery makes NCDMB player-regulator’
An oil and gas development analyst, Dr. Humphrey Ugbo Amadi has picked holes in the recent $10m Shareholders Agreement and Share Subscription Agreement between a regulator, the Nigerian Content Development and Monitoring Board (NCDMB) and promoters of Waltersmith Refining & Petrochemical Company Limited for the construction of 5,000 barrels per day modular refinery.
According to the deal sealed in Lagos last week, NCDMB will hold equity investment agreement to the tune of 30 per cent while it serves as a catalyst in the short run.
But reacting to the deal, Dr. Amadi argued that “The agreement will suggest that the Board is selective in those it will partner with and those it will force to fail in the course of regulation”.
“With such agreement, no matter how the law looks at it, confidence level will be affected in the spirit of both existing investors in modular refinery and new comers.
He said “All over the world, industry regulators are known to always be neutral and not co-investors in a regulated sector like upstream oil and gas industry.
Business Hilights gathered that 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.
However, Wabote explained that 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.’
He added that NCDMB will support the Federal Government’s policy on modular refineries as parts of drive in meeting 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).
Wabote was quick to note that “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.”
NCDMB hailed Waltersmith for coming up with a bankable proposition, saying “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.”
The 5,000 bpd Waltersmith Refining & Petrochemical Company Limited’s modular plant, which is capable of producing naphtha, kerosene, diesel, and low pour fuel oil has made significant progress in development at the location in Ibigwe, Imo State.
This is based on the fact that the company’s Approval To Construct (ATC) has been granted by the Department of Petroleum Resources (DPR) while Engineering, Procurement and Construction (EPC) contract terms have been agreed with VELEM.
Also, the Environmental Impact Assessment (EIA) review session with DPR has been conducted and the company is closing out funding with Africa Finance Corporation (AFC).
Just as the Waltersmith refinery brings total of serious modular investors to seven with total capacity to process 181,000 barrels of crude oil per day (bpd) have progressed towards completion stage, other companies, which have made similar progress are Clairgold Oil & Gas Engineering Limited, Niger Delta Petroleum Resources, Dee Jones, Energia Limited, Southfield Petrochemical & Refinery Limited, and Starex Petroleum Refinery Limited.
