Diamond Advocates Capacity Building in Nigerian Oil & Gas Industry

To entrench a culture of sound corporate governance practices in the Nigerian oil and gas industry, there has to be a consistent investment in capacity building across board in companies operating in the sector.

Mr. Samuel Egube, director, Corporate Banking, Diamond Bank Plc gave this advice at the recently concluded Nigerian Oil and Gas Conference (NOG 13) held in Abuja, the Federal Capital Territory (FCT). Diamond  Bank Plc, one of Nigeria’s leading commercial banks was the platinum sponsor of the conference.

Egube who presented a paper titled “Domestic & International Funding for Energy Projects in Nigeria (Current Realities/ Charting the Way Forward)” told the distinguished audience that there was need to invest in future growth through structured capitalisation of profit as well as the need to periodically create windows for additional investment through additional equity and other forms of capital investment into the business.

The banker also highlighted the need to constantly deepen the integrity of business processes through ISO Certification and by bench-marking them against other forms of international best practices.

On how to maximise indigenous participation, who are potential game changers in the industry, Egube observed that the passage of the highly anticipated Petroleum Industry Bill (PIB) was expected to engender reduced contract processing and approval cycles through an industry wide adoption and deployment of contracting and bidding vehicles such as the Nigerian Petroleum Exchange (NIPEX).

Other benefits of the PIB, according to him are increased contract tenures from the current 2+1 contract cycles to 5 and 10 years cycles, to encourage long-term project and contract financing as well as simplified tax regime and fiscal structure.

He also stressed the need for investment in long-term technical and professional training, capacity building for operators in the industry and regulators, adding that the Nigerian Content Development Monitoring Board (NCMDB) could introduce mandatory capacity development programmes for top and medium level management of indigenous oil companies while IOCs and other production companies use these benchmarks for contract grading.

Egube also reiterated the need for insistence on ISO certification of internal processes as a pre-condition for specific contracts.   

Diamond Bank has played a major investment role in the Nigerian oil and gas industry over the years. Some of its landmark energy transactions include Neconde Energy Limited $94 million reserve base lending for asset acquisition and field development, Caroil Drilling $110 million acquisition of three land and swamp rigs and the facilitation of the financing of field development for Orient Petroleum Limited and the construction of a new refinery to the value of $100 million. The bank was part of the consortium of banks that won the Project Finance Magazine's Deals of the Year Awards for the financing of last year’s NNPC /ExxonMobil RDP.

The bank has also put together OGCF $500 million Oil and Gas Financing Commitment, Oando’s $100 million for the development of Qua Ibo field- OML 13 and $20 million for the development of the Apapa SPM facility.

The bank’s other exposures to the Nigerian gas and oil industry are its appointment in 2010 as partner bank by the Nigeria Content Development Monitoring Board (NCDMB) for the Nigerian Content Development Fund, a key partner in a $200 million deal to finance an independent power plant -Geometric Power Limited- in Aba, Abia State; Depthwize’s $42 million acquisition of drilling barge and marine spread and Spectrum $50 million construction of oil gas fabrication plant amongst others.