The Nigerian Content Development and Monitoring Board (NCDMB) and the Petroleum Technology Association of Nigeria (PETAN) on Monday signed an agreement on US$30m Working Capital Scheme that will support the operations of oil companies against the adverse effects of COVID-19 Pandemic and loss of contracts due to low oil price.
The Executive Secretary of NCDMB, Engr. Simbi Kesiye Wabote, and the Chairman of PETAN, Mr. Nicolas Odinuwe, signed the Memorandum of Understanding (MoU) on the credit scheme in Abuja.
The Working Capital Scheme is one of the newly introduced products in the Nigerian Content Intervention Fund (NCI Fund) approved by the NCDMB Governing Council under the leadership of the Minister of State for Petroleum Resources, Chief Timipre Sylva.
Key features of the credit scheme are a single obligor limit of One Million US Dollars ($1000,000.00), the tenor of 365 days after 90 days moratorium and eight percent interest per annum for Naira and five percent for United States Dollars.
In his remarks at the event, the Executive Secretary explained that the fund which is currently domiciled with the Bank of Industry will bridge the oil companies’ cash flow gaps, support operations and prevent staff layoffs in the industry.
He said the Scheme will be triggered whenever the oil price of $40/barrel benchmark is reached and whenever there are such negative impact on the industry. The $40/barrel trigger point strategy is important considering the rapidly changing nature of the oil and gas industry, he said.