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Orient Energy Review Vol 8 No.08 August 2018 1

WORLD UPSTREAM SUMMER RECEPTION Thursday, 20 September 2018, 18:00-22:00 at The Hurlingham Club Event Fee: £120 + VAT Visit africa-petroleumclub.com to register now

Guest Speaker: Paul Welch, President and Chief Executive Officer, SDX Energy

”Following on from the highly successful Africa E&P Summit and hosted by the Africa Petroleum Club, you are invited to continue the conversations and reconnect at the World Upstream Networking Reception being held at the prestigious Hurlingham Club” for an end of summer networking social evening”.

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2 Orient Energy Review Vol 8 No.08 August 2018

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Orient Energy Review Vol 8 No.08 August 2018 3

INDUSTRY NEWS

2019 Elections Won’t Derail NLNG Train 7, Kachikwu Assures Investors

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i n i ster of State fo r Pe t r ol e u m Resources, Mr. Ibe Kachikwu, recentlly assured that the forthcoming elections in 2019 would not derail the attainment of the Final Investment Decision (FID) of Train 7 of the Nigerian Liquefied Natural Gas (NLNG).

Kachikwu, who was speaking during a visit to the NLNG plant complex in Bonny Island, Rivers State, disclosed that the company had always remained insulated from politics, while he added that the Federal Government would provide the much-needed support to enable the company to achieve its goals. Kachikwu called on the company to look into the factors responsible for the high prices of its products, especially, Liquefied Petroleum Gas (LPG) in the local market, compared to imported ones.

According to him, operators now find it cheaper to bring in imported gas into the Nigerian market than buying from the NLNG, because it is way cheaper than the ones purchased from the company, while he added that this was not the original plan of the government.

To this end, Kachikwu noted that the Federal Government would set up an inter-ministerial task team to engage with the NLNG on ways to increase consumption and

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drag down the price of LPG, also known as cooking gas, ensuring that locally-produced LPG is cheaper than its imported counterpart.

The min ister also stated that the Federal Government would be engaging with the management of the Nigerian Liquefied Natural Gas Company, NLNG, to determine the best role the company could play in the revival and mobilisation of investments for the moribund Brass LNG and Olokola LNG. He advised the NLNG to get out of its comfort zone and make investments or mobilize resources and investors for the successful take-off of both projects. He assured that the revival of the two LNG projects would help create about 5,000 jobs in peak periods and almost 3,000 jobs in normal periods.

He said, “The NLNG has been fantastic in terms of its comfort zone. You probably can give them a 100 percent in terms of their own performance. But I am saying that the world is bigger than this island.

We have opportunities that are stranded everywhere — Brass LNG, in terms of shareholding, financing; OKLNG, in terms of getting off the ground. “I would like to see NLNG get out of its comfort zone over the next 30 years. Different from Train 8 and nimble investments in smaller fields, how about Brass LNG and OK LNG? Why must you not be the parents of those types of investments? Even if it is just to harness the potential investors because of the clout and respect you have in the international financial community.

“

I like to see you hand-hold some of those projects, even if it is little investments you have as a collective. You need

to go from the whole to a smaller collective and to drive the process.”

Kachikwu further stated that the Federal Government would be reaching out to the NLNG, not seeking to compel it, but enter into a collaboration with it to see what could be done and how government can learn from what they have done well to drive the process of revival and completion of the two LNG projects. He said, “I am saying as the grandfather of this business, the NLNG have built six trains, looking at seven; hopefully, potentially more, let us begin to look at where through minimal investments, through structures and designs, reconfigurations and expert advice, you can actually hand-hold some of those trains that are beginning to lag behind, so that the whole founding fathers’ concept of taking this all over the place happens.”

Also speaking, Managing Director/ Chief Executive Officer of the NLNG, Mr. Tony Attah, expressed optimism that with the support and full backing of the Federal Government, the company is poised to ensuring that Train 7 becomes a reality. In his presentation, General Manager, Production of the NLNG, Mr. Tayo Ogini said the planned Train 7 holds immense potentials for Nigeria. According to him, Train 7 would bring about a 35 percent growth in Nigeria’s LNG output, create 8,000 jobs, build capacity for small-scale LNG and increase domestic LPG supply to about 0.5 million tonnes per annum.

He added that the NLNG as part of its 30-year initiative was targeting an investment of N3 billion annually in the Bonny Kingdom to drive development in the community and transform it into a notable tourist and relaxation destination. *Sweetcrude Reports

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INDUSTRY NEWS

Royal Niger Partners Teledyne Marine as Value-Added-Reseller

By Margaret Nongo-Okojokwu

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oyal Niger Emerging Technologies Ltd. has be en appoi nt e d by Teledyne Marine, as a Value-Added-Reseller for its ODI subsea electrical solutions in Nigeria. As part of the distributor agreement, Royal Niger will offer Teledyne’s full range of engineered interconnect solutions for subsea networks, with highly reliable wetmate connectors, electrical and optical subsea distribution systems as well as local engineering support to customers within Nigeria.

Teledyne’s appointment of Royal Niger followed a rigorous supplier evaluation process, and was a

direct result of an intervention of TechnipFMC to close a key technology gap in the Nigerian subsea industry by bringing in one of its core suppliers into the Nigerian market. Anthony Okolo, Managing Director of Royal Niger added, “Nigeria is a strategic market for subsea projects within the African continent and a key destination for oil and gas investors all over the world. Our partnership with Teledyne ODI in Nigeria will help bolster Nigerian Content capacity for controls and umbilicals for the subsea sector. We hope to continue to work together with TechnipFMC and Teledyne to further national efforts to domicile umbilicals and

controls technologies in Nigeria, for the benefit of all players in the oil and gas industry.”

TechnipFMC commented saying, “Given the strategic situation of Nigeria in the oil and gas market, the tremendous opportunities in the next few years and the i mp o r t a n c e o f c o nt i n u o u s national content development, it gives me great pleasure to see the partnership between Royal Niger an Teledyne ODI come to a successful realization. TechnipFMC supply chain organization worked hard together with them to make this a reality and increase the knowledge transfer to our local market.”

Russia to Increase Involvement in African Oil, Nuclear Projects – Putin developing energy projects in Africa, during the 10th BRICS Summit in Johannesburg.

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ussian President Vladimir Putin said that Russia is planning to increase it s i nvolvement i n

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“I would like to note that Russia plans to increase its assistance in developi n g t he energy sectors of African countries, w ith a number of countries such as Angola, Mozambique and Gabon. We are developing promising oil and gas projects,” Putin said.

oil and gas producers, including Rosneft and Rosgeologia, signed several new agreements to explore and develop hydrocarbons on the continent in recent months.

Putin added that he is planning to discuss organizing a Russia-Africa summit with leaders in the region.

Russia is also planning to boost its cooperation on nuclear energy plants in Africa, Putin said.

Source: S&P Global Platts

His comments come after Russian

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POWER

5 Years after Privatisation, Investors in Discos Declare Losses on N427bn Assets

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lmost five years after core investors put $1.2 billion (about N427bn) to acquire 60 per cent stakes in 11 electricity Distribution Companies (DisCos) in 2013, they say they are yet to recover the investments or make profit. The investors disclosed this recently in Abuja at a joint briefing by the Association of Electricity Distributors and Investors and the Association of Nigerian Electricity Distributors (ANED). The Executive Director, Research and Advocacy at ANED, Chief Sunday Oduntan said, “DisCo investors, who paid $1.4bn (about N427bn) for the distribution assets have not made any return on their investments, a condition which was the basis of the investment

after a five-year performance per iod.”

He revealed a N1.3 tri l lion market shortfall in the DisCos’ financial books that h i nder e d thei r performance on improved metering, customer service and increased customer connections. The DisCos’ operators also decried wrong investments by t h e Ru r a l Electrification Agency (REA) in cities instead of unconnected rural areas using the $350m World Bank fund that could have addressed deficit in the electricity market.

“Additionally, N78bn has been put in the budget for “distribution” projects to be implemented by the Transmission Company of Nigeria (TCN). Categorically, until the tariff gap is addressed by the government, we do not see a pathway to meeting both commitments,” they said.

Chairman of Aura Energy Company (AURA), the core investor in Jos DisCo, Alhaji Tukur Modibbo, who spoke for the investors, said the firms have not gotten any return on their investments. Modibbo said

the labour crisis during the peak of the privatisation in 2013 hindered the potential investors from doing a technical due diligence of the assets before they made payment to the Bureau of Public Enterprises (BPE).

He said: “I was part of the team; we had to rely on records given to us by BPE. I can tell you that the records were not accurate as there was no technical audit or a financial audit of the firms when they were under PHCN.” The investors said they found that the estimated Aggregate Technical, Collection and Commercial (ATC&C) losses, customer enumeration and metering requirement by BPE were wrong, coupled with huge old legacy debts which the DisCos took from the N213bn CBN loan which they are paying interest for.

Modibbo said the investors would want to meet with the Minister of Power, Works and Housing, Mr Babatunde Fashola, on the issue of service improvement. “We have invested much in the utility but we have not recorded any gain,” he added. The investors said they are ready to quit if government would refund their acquisition investments as they have declared a force majeure twice, a condition for their refund with the Federal Government refusing to accept their quit notice.

Agency to Power 197 Rural Communities with Electrification Projects – MD Agency, (REA) is currently working on 197 capital projects across the six geo-political zones of the country.

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etermined to actualise the President Muhammadu Buhari-led administration’s quest to light up rural communities, the Nigerian Rural Electrification 6 Orient Energy Review Vol 8 No.08 August 2018

The REA is an agency of the federal government established primarily to provide electricity to rural communities, with a view to boosting the socio-economic lives of the dwellers, as well as discouraging rural-urban migration occasioned by absence of basic amenities.The managing director of REA, Mrs. Damilola Ogunbiyi, who made the disclosure, said the agency also ensures the creation of appropriate tariffs that are economically

responsive and appealing to the consuming customers/communities.

Since its establishment in August, 2016, the agency has completed a total of 54 projects (39 inherited, 15 initiated) spread across the 6 geopolitical zones of Nigeria, in line with its mandate to cover the field.

Source: New Telegraph Online

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POWER

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Orient Energy Review Vol 8 No.08 August 2018 7

INTERVIEW

PETAN’s Patent Seal: “We are Raising the Bar on Quality Service Delivery” - Okoroafor, PETAN Chairman Does this in any way speak to a Nigerian standard that you have been talking about?

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azi Bank-Anthony O k o r o afo r i s t h e C h air m an of t h e Petroleum Technology Association of Nigeria (PETAN) and the Managing Director of CB Geophysical solutions limited. In this exclusive interview with Orient Energy Review (OER) crew on the sidelines of the Offshore Technology Conference (OTC) held in Houston Texas, Okoroafor speaks on the newly acquired patent seal of quality, announced at the Panel sessions of the Nigerian Business Forum, he also spoke on a wide range of issues trending in the petroleum industry. Excerpts!

What’s the idea behind the PETAN patent Seal of quality?

The idea behind the patent Seal of quality is that we want to raise the bar on the quality of services we deliver, we want a situation where we would be able to deliver services to any part of the world up to a satisfactory level of quality, HSE and quality; you cannot just come out and say I am proficient in this level of service, there has to be a matrix and that is why we involved worldwide Bureau De Veritas, let’s set matrix so that when you say you can provide any of the services in the entire value chain, they use that matrix to certify you and once you are certified you can deliver that service anywhere.

So it is a kind of self cleansing. So the days of just briefcase carrying, saying

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that you can provide a service when you don’t have the necessary skills, necessary competencies will be over and so that is the idea behind the patent seal of quality.

What led to this, what is the drive behind it?

The reason behind it is that we want PETAN companies to be associated with quality service delivery, to be able to deliver services consistently to the same level of quality because the business should not be done anyhow there has to be a matrix, there has to be a satisfactory level of quality delivery.

Why did you choose Bureau De Veritas, what was the yardstick?

In terms of quality, Bureau De Veritas has set a top standard in quality service delivery in many areas and that is why we selected them.

Are they the only ones that PETAN will partner with, or should we expecting any other inspection agencies?

There are many other agencies but you know when you want to start something, you start with one; give them the trials, if they don’t keep to the standard that they are being known for, you replace them.

What we are doing, I don’t want to call it a Nigerian standard, let’s have global standard, yes we must operate global. If calling quality service delivery Nigerian standard is like service delivery must have a particular standard, no, it is global standard. You have to deliver that level of quality anywhere, there is nothing like Nigerian standard or UK standard or US standard, and it is global standard.

On the part of the IOC’s, we know that the cash call has been an issue for a while now until last year that an agreement was reached, the cash call exit; does this in any way impact on the service companies?

First of all the exit of cash call was a good thing because I could remember those days we do services and you will never get paid and when you ask the companies they will say they are waiting on the government, so that is one of the best things that happened in our industry. Now before any of the companies execute or give you a job order or purchase order to come and do any service, they plan for it, they have the money, so you are not going to be worried about anything, nobody will give you excuses because of cash call exit. So I think it is one of the best things NNPC came up with.

How have you been able to handle the issue of single sourcing, how are you tackling it?

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INTERVIEW We tackle things based on information.

You cannot tackle what you do not know. The idea about single sourcing happens when no other person has that technology. I am not aware of situation where something is single sourced when we have available people delivering that service.

Nigeria has a lot of potentials in their service companies; are we considering regional integration? Is there any deliberate plan of action towards helping our African brothers?

Regional integration is good. 75% of people in Africa as a whole do not have access to electricity, so imagine if we can harness all this gas that we are flaring and use it to provide electricity to the entire continent, imagine how much money Nigeria will be generating. Imagine if we can be refining most of our crude oil and selling to the entire African continent. Assuming today we set up to build more bigger refineries and have refining capability of close to 10million barrels per day, we are leaving a lot of money on the table. It is just a strong will, strong infrastructural investment, gets all this gas, provide that power, and sell it. What I see when I look at statistics is opportunities; 75% does not have access to electricity in Africa and we are flaring gas which can run through turbines and generate electricity. So we are by potential a very rich country but in reality a poor country.

Talking about the regional collaboration, some are concerned about your members’ competencies as well as fiscal policies; what do you have to say about that?

On the fiscal policies, somebody asked, let’s take for instance, you have a vessel working in Nigeria and you want to take it to work outside Nigeria and bring it back; somebody said you have to pay so much tax on it. So if as Africans or maybe from the sub region, we can decide to collaborate, work on the fiscals, remove all those bottle necks, ensure free movement of goods and services, free movement of people so that talents can be shared, laboratories can be shared, a lot of things can be shared. But for you to achieve that, people must see what is it in for them, the countries must see a value, if they don’t see a value they may think this country is coming to dominant us, you must see a shared value and once they can see that shared value and they can build that www.orientenergyreview.com

trust, they can open up.

Does that mean you do not support Nigeria’s position of non-signage of the African Continental Free Trade Agreement for free flow of trade and services?

I support free trade but for you to sign for free trade, you must be sure that you can deliver some services. If Nigeria goes now and sign free flow of everything maybe the few refined products that we have, some people could possibly smuggle them out.

But if on our own we have refining capacity that can feed the whole of Africa, we will sign all agreements.

You want to be wary of people taking out what you have produced and then there will be scarcity here, you have surplus. But if there is free movement now, I support free movement of trade but you have to take it in context to your capabilities and your capacities.

For a rare feat like the top side integration of the Egina FPSO, Is PETAN taking advantage of this opportunity to get some young people trained, seeing it’s the first time we are having this kind of scheme.

Nigeria is already targeting the next one, what is the plan?

In every year in OTC, we normally run a lot of training programmes short courses. The reason why we did not run this year is that last year there were subsea trainings, a lot of companies identified interest but they didn’t show up. There was a need for that training, special need.

PETAN paid I think $50,000 hoping most of these companies and the people they are bringing can offset it but they didn’t show up. They ran $50,000 down the drain. So in skill gap trainings, there has to be genuine desire, no matter what you identified as the skill gap, somebody has to pay for it one way or the other. You cannot bring a specialist with structured programme and now everybody said they are coming and they will pay, a week to OTC no payment and you have already committed. We came here but nobody.

About WAIPEC 2019, what are we expecting from PETAN next year?

Regional integration. WAIPEC 2019 is going to be great. We are going to be bringing basically most of the regional players and we have to start looking at practicalizing most of the things we have been talking about. We are going

to bring in the Customs, Legislators, we are going to bring in all those stakeholders that really affect the fiscals we are talking about and the regulations that we are talking about that will make regional collaboration possible or not possible.

What about the countries are we going to be seeing countries from West Africa?

The countries are Ghana, Gambia, Kenya, Uganda, Liberia and Senegal.

What I need to know is what we should be expecting from PETAN, are these efforts going to be taken to other regions like into rural Canada where the PETAN companies, the capacity that you have is being showcased.

Yes, offshore Europe, we would be there, Global Petroleum Show in Canada, we usually attend; remember that every member that is here is paying for their booth; so once we have a critical mass of people that have paid; we would rearing to go because you don’t want to run at a loss.

PETAN had a very novel idea which it executed in the Shell internship scheme; and I think it has been scaled up to other IOC’s and even the independents ones.

What is the present situation?

The internship programme with Shell is running. In this year now we have 40 people and I have 3 of them in my company which at the end of it I am hiring them. The ones I had last year I hired them. So we are doing internship of seafarers with Agip and we are talking with Chevron, we are talking with PETAN and we are talking with many other companies.

The idea is to get people, just do more internship, most people cannot get job because they always say you don’t have any experience. They work in an organised place and get some experience and 80% of them get hired by the PETAN companies they were posted to. Because it makes it easier for you to hire, you are not going to be advertising and having many people come for interview and that process is hectic. Once the people are trainable it is easier to hire them but some people are not trainable.

“About 75 Per cent of People living in Africa Lack Access to Electricity” -

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LOCAL CONTENT

NCDMB, Dangote Refinery set up joint committee on Nigerian Content

By Margaret Nongo-Okojokwu

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he Nigerian Content Development and Monitoring Board (NCDMB) and the Dangote Petroleum Refinery have inaugurated a joint committee that would develop a framework for the implementation of Nigerian Content in the development of the 650,000 barrels per day Dangote Refinery project. The committee was inaugurated in Lagos recently, with four members drawn from each organisation.

The Executive Secretary, NCDMB, Engr. Simbi Wabote was represented at the event by the Director, Planning, Research and Development, NCDMB, Mr. Daziba Patrick Obah and he stated that the committee would ensure that investments by the Dangote Group in the oil and gas industry complied substantially with the provisions of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act. He said the success of the refinery project would impact positively on Nigerians and the nation’s economy as well as create about 235,000 direct and indirect jobs.

Obah added that “we cannot over emphasize the importance

of this collaboration which we believe will bring Dangote and NCDMB closer towards achieving our respective mandates and results with even better impact on Nigerians and the Nigerian economy from oil and gas operations, projects and activities.” He charged the committee to institute modalities for the submission and review of statutory reports and conducting performance rev iew se ssion s, project assessments and verification visits. He however stressed that strategies that would be put in place to implement Nigerian Content in the Refinery Project must not hamper the speed of project execution.

In his comments, Director, Monitoring and Evaluation, NCDMB, Mr. A k intunde Adelana explained that the joint committee was not a corrective measure, rather was aimed at helping the two parties’ foster alliances and achieve a common goal.

The Chief Operating Officer, Dangote Refinery, Mr. Giuseppe Surace pledged the company’s commitment to complying with the NOGICD Act. He stated further that the company would maximize Nigerian Content in all its operations, including Engineering, Construction, Logistics and Employment.

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NCDMB Targets Domiciliation Of 70% Oil Industry Spend By 2027

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he Nigerian Content Development and Monitoring Board, NCDMB, is targeting in-country retention of $14 billion out of the $20 billion annual oil industry capital spending by 2020. By this move, the NCDMB hopes to localise about 70 percent of the total industr y an nual spending and create over 300,000 direct jobs.

The Director, Finance and Per son nel Management at NCDMB, Mr. Issac Iyalah, revealed this i n L a go s , s ay i n g the target would be achieved through a two-pronged approach, which, according to him, included creating enabling environment to attract investors and protecting existing and new local investment by effective compliance oversight and monitoring. It would also “require deepening of local content practice in the upstream, midstream and downstream

sectors of our oil and gas industry”, he said, stressing: “This will retain 14 billion dollars yearly out of 20 billion dollars average yearly in-spent capital in the country, and create 300, 000 jobs by 2027”. He revealed that the board was working towards amending the Nigerian Oil and Gas Industry Content Development, NOGICD, Act 2010 w it h t he a i m of deepening local participation in the oil and gas industry.

“One of the duties of the NOGICD Act 2010 seeks to develop t h e l o c a l s u pp l y chain for effective and efficient service del iver y w ithout c omprom i si n g the oil and gas standard, Iyalah said as he revealed that when amended, the NOGICD Act would further push retention of incountry spent capital in the oil and gas sector from the current five percent which goes to Nigerian companies to 70 percent by 2027.

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LOCAL CONTENT

“The NOGICD Act 2010 is almost ten years old and we are proud to say that the Board is working to increase the current 5 percent capital being spent in the country to 70 percent by 2027. “The bill is currently at the National Assembly for debate. Once amended, we would have created 300,000 jobs by 2027,” he added.

oil and gas sector, which is over 60 years old, has been dominated by International Oil Companies, “with indigenous companies recently and slowly gaining ground in terms of participation”. According to him, the participation of the indigenous oil and gas companies has increased from five percent to 20 percent since the establishment of the NCDMB about 10 years ago.

Iyalah stated that the Nigerian

On the board’s 10-year roadmap, he said its success would be dependent on five pillars: technical capability development, compliance and enforcement, enabling business e n v i r o n m e nt , o r g a n i s at i o n capability and sectoral and regional market. The five pillars, he said, also rest on funding, regulatory e nv i r on me nt , s t a keholde r s’ development, including increasing research, and over all development in the sector.

Osinbajo, NCDMB Lure US Investors to Nigeria’s Oil Industry companies on the Board’s focus areas in Research and Development and support for companies domiciled in Nigeria. The Board has developed a pathway for developing research and development capabilities in the Nigerian Oil and Gas Industry and is partnering with various local and international stakeholders on the initiatives it is pursuing in this regard.

The Vice President, Prof Yemi Osibanjo and the Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Engr. Simbi Kesiye Wabote and other top Federal Government officials were at the Silicon Valley, California, USA recently to canvass for foreign direct investment in the Nigeria to over 25 key international players in the Information Communication Technology (ICT) industry.

sectors like ICT, Oil and Gas, Power, Agriculture, Solid Minerals etc. The delegation also highlighted Nigeria’s market size, entrepreneurial spirit, vibrant young demography, fiscal incentives for pioneer investments.

Wabote was invited on the trip to expatiate on the NCDMB’s strategies to deepen collaborations and sectorial linkages between the Oil and Gas Industry and the ICT sector.

The main objective of the visit was to promote the ample investment opportunities in the country’s key

The Executive Secretary used the opportunity to discuss with top fund managers, sister agencies and the founders of the start-up

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A bout Niger ian 11 star t-up companies in innovation and technology had the opportunity to make presentations to the foreign investors on their business models and the support they require.

The presentations covered the application of technology and innovation to address challenges in logistics, procurement, healthcare, financial services and insurance.

The Vice President thanked the investors for honoring the invitation and the Nigerian delegation for the efforts put into planning the event to make it a resounding success. The delegation also visited the offices of Google and LinkedIn in the Silicon Valley.

Other key officials in the Nigerian delegation included the Hon Minister of Industries, Trade and Investment and the heads of Bank of Industry (BOI), Niger ian Investment Promotion Commission (NIPC), Nigerian Export Promotion Council (NEPC), Nigerian Film Corporation (NFC), and Nigerian Information Technology Development Agency (NITDA).

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LOCAL CONTENT

“At Eroton, We Believe Strongly In New Ways Of Doing Things, Thinking Out Of The Box And Being Creative” – Dr Okeke reduction of cost with new technology.

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r Theo Okeke, Executive Director and Chief Technical Officer, Eroton Exploration & Production Company speaks to Orient Energy Review In line with Dr Ibe Kachikwu’s (Minister of State for Petroleum Resources) ambition to up Nigeria’s daily crude oil production by a million barrels, Eroton, through innovative technologies has been able to ramp up its production from 10,000bpd to 65,000bpd without drilling an additional well! A marginal field operator achieving this feat with the use of indigenous engineers obviously puts itself in the league of a very few.

The technology deployed here has been DOMESTICATED! And that is the major tenet of local content: in-country value addition. In this interview with JEROME ONOJA on the sidelines of the Nigerian Oil and Gas (NOG 2018) in Abuja, Dr Theo Okeke gave some highlights. Excerpts: What are some of the takeaways for you in the past two days of this conference?

There has been a lot of networking with people in the industry and you get to appreciate what they do and how they can add value to your business. We have been doing a lot of that since yesterday. Networking is key. Also, we get to appreciate the new technology in town and find new ways of doing things. So, it’s been beneficial to my company.

In his speech earlier today, the Minister of state for Petroleum Resources alluded to the ministry’s effort in reducing the cost of production which will affect the FID in projects, I would like to find out about Eroton’s deliberate plan in the 12 Orient Energy Review Vol 8 No.08 August 2018

We have a lot in the pipeline. As you know, we started production about three years ago and we have been optimizing our operations to get the best out of the old assets. For instance, we were producing less than 10,000 bpd but now we have been able to move up to 65,000 bpd peak production and we keep growing. We achieved this by optimizing and using new ways of thinking. We added this production not by drilling a single well but by optimizing the existing infrastructure. I personally believe strongly in new ways of doing things, thinking out of the box and being creative. For instance, within our asset, because it’s a brown field, an old asset; we produce oil and water and everything is pumped to the terminal. We asked ourselves ‘why are we doing this? Because what they charge as tariff on the pipeline is the liquid and the total volume we put in the pipeline- both the crude and the water. So, why are we paying to export water from our field to the terminal? Why don’t we take out the water within our field, and inject it for pressure maintenance? Hopefully before the year runs out, we would be injecting it into some reservoirs that we have identified which will save us cost. It will save us about $3.20/bbl we are paying now as tariff for any barrel of liquid. So, imagine that.

We do a lot of Do –It –Yourself. We do the entire major overhaul of pumps, engines and generators in-house.

When we started, there was a lot of corrective maintenance but now we have very minimal breakdown of facility and equipment. The uptime of our critical equipment and facility is well over 95 per cent which is good for an old asset. We have very minimal breakdown of equipment and facility which has helped us with high uptime.

I am quite impressed. How did you achieve this? Was it in partnership?

I can tell you that this was all done in-house by Eroton people, our indigenous staff. We had to start from the scratch. We started with the staff we inherited because the working capital was not there. Also, as a Nigerian with the amount of resources we have and experiences, we should put them to use. Sometimes, we don’t do things because we are not given the opportunity which is what I told myself. It is good enough that I started my career with one of the IOCs before I went abroad which

helped to broaden my experience and my way of doing things. I see my coming down to Nigeria as a way of giving back to the country and that was why I took up the challenge and tasked my technical staff that we have to do this. To be frank, that is the success story of moving from less than 10,000 bpd to almost 65,000bpd.

To be fair, one of the things we did was working with the communities where we operate. We recognized that the communities have something to offer. I mean we should give them the opportunities to also benefit from what is happening. We told them it will be a win-win situation and because of that, we have not had any shutdown due to community issues because we have a special way of dialoguing with them. We develop their capacities to get to do things for us. So, we told them it is not a matter of we giving you bread every time, we also want to help you so that you can do it yourself. So, they bid for contracts just like any other person, they win and get the job done and we are happy about that which has helped us a lot.

What’s your advice to other Marginal Oil field operators?

Just like in a market place there are different routes; if you have a winning team, why change it? It is working for us. We are more than happy to share our strategy with anybody. So even though we don’t make a lot of noise about our achievements, our track record is there. It is sad that we have companies that are fond of going abroad to get expats while we have competent and well experienced Nigerians that can do that job and which is one of the strategies we adopted. We said this is a 100 percent indigenous company.

Do you have a service arm?

For now, we are an E&P company.

Our operations are mostly upstream.

We explore and produce hydrocarbon.

We have some contractors that we get into collaboration with and where we cannot do it ourselves, we employ the services of indigenous contractors. We have very minimal work with high profile contractors, we believe in local contracts, which is the only way we can build capacity as a country. If you go abroad, you’ll see how good and intelligent Nigerians are, they only need the opportunity to prove them and demonstrate what they can do.

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LOCAL CONTENT SHOWCASE

VURIN Redefines Progress in Local Content Terms “Success is better depicted when solutions are innovatively created and subsequently curated around perennial challenges; thereby enabling collective capturing of value within an ecosystem, that ultimately results in forward momentum for the industry.” _ Ude

By Jerome Onoja

gap either through special intervention funds and/or through training of seafarers, the judiciary and other means. The need to si mpl i f y administrative engagement by simplifying processes was also discussed at length. We also examined the concept of the carrot and stick approach to get a pulse check and deter m i ne wh ich arguably works more effectively.

ictor Ude, the Group Chief Executive Officer of VURIN, a leading Nigerian oil and gas services company in this interview with JEROME ONOJA, after a session he moderated at the just-concluded NOG conference in Abuja, speaks on the company’s overarching objectives of providing Oilfield procurement, Installation, Maintenance and repair services, anchored on consultative guidance, just as he advocated for the local content law, as well as the need for compliance and enforcement in the oil and gas industry. Excerpts:

Earlier in the day, we listened to the Deputy Managing Director of TOTAL, Mr. Ahmadu-Kida Musa, sharing Total’s remarkable achievements from embracing and advocating the benefits of local content on the Egina project and the perception I got from that is, it didn’t take enforcement to motivate Total, it took vision, a seismic shift in mindset within Total, that was based on sound economic principles, with pay not necessarily being immediate but anchored on a longer term horizon.

It is these sorts of results that make local content seem less academic to skeptics and help bring more converts to the fold for systemic gain.

Could you please give us highlights of the panel that you moderated earlier today?

As an investor in the industry, what are some challenges that may not have been looked at?

The panel provided industry players the opportunity to get a front row seat as to the thinking of key enabling agencies, both NCDMB and NIMASA, as it relates to compliance and enforcement within the oil and gas industry value chain. The panel also focused on capacity deficit and how both agencies were bridging the

Challenges vary from one vested player to the other; each player has different personae and as such motivated differently. For example, both the regulator and the producer seek different outcomes from the prevailing fiscal regime and as such will support contrasting regime application. However, common to

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all will remain challenges to lower production costs and efficiencies, accelerate contracting cycle and execution times, improve security and relations with host communities, amongst several others. Given the importance of host communities and the need to sustain operational stability, it might be necessary for NCDMB, as part of its capacity development initiatives, to include the compliance and enforcements of global MOU’s executed with host communities, as part of its overa rch i ng responsi bi l ities, which should enhance trust and confidence within host communities.

Nonetheless, the assent of the PIGB will hopefully minimize the uncertainties emanating from all of these challenges.

What’s the next big thing we should be expecting from Vurin?

We are strategic thinkers. We are innovative. We are also plumbers that have found some interesting leaks, which we are currently work i n g on plugg i n g; upon completion will generate cohesive and sustainable value for the industry.

Orient Energy Review Vol 8 No.08 August 2018 13

LOCAL CONTENT SHOWCASE

‘Our Logistics Base Was Built To Tackle Contractors’ Accommodation Problems,’ Says Ojukwu Can you give us an update on Slot Engineering?

S

lot Engineer ing, is an indigenous engineering, fabrication, construction and procurement company founded by a civil engineer. The company since inception has continued on a path of success, leading to its fast growth and expansion into other areas of specialization. With considerable feats in engineering services, procurement, among others, the company has remained a name to reckon with in the Nigerian oil and gas industry. In this interview with VIVIAN OSUJI ISRAEL in Port Harcourt, the Managing Director/Chief Executive Officer, Slot Engineering Nigeria Limited, Mr Ernest Ojukwu, speaks on the company’s recent achievement of a newly built logistics base in Afam, Rivers state Nigeria.

Excerpts.

Slot Engineering is an indigenous oil servicing company. We started operation in 1985 and our activities are concentrated within the Niger Delta region. Our services were mostly in the area of f low line construction, before we gradually started procurement activities in area of project materials. In procurement, you need custom to clear it and before now we were using expatriates but they were not giving us the sort of services we required. Presently, we have registered as custom clearing agent and we now do our own procurement. Our core areas are flow line construction, fabrication works, project procurement and custom clearing services.

Can you enlighten us more on your newly built logistic base?

Our new logistic base at Afam in Oyigbo is made up of 25 rooms accommodation with Catering facilities, swimming pool and a workshop centre. The structure is not only for our use, it is built to serve other contractors coming into Afam, who may have need of accommodation, just like we had

when we were working there. So, with the facilities we have at the logistic base, it will make life easy for people working in Afam.

Apart from the logistics base, what other achievements has Slot engineering recorded in recent times?

We recently acquired a 90-ton crane and a new welding station. The welding station is equipped with the complete equipment for welding.

It has about four welding machines, 100kva generator, a compressor with 75cfm capacity. All is in one track and can move to swampy locations.

As an indigenous company that is actively involved in procurement, how do you source for funds?

By the grace of God we have managed to use our resources for procurement.

Of course, when you develop goodwill within the industry, it will also help to bridge some funding issues.

For instance, if you establish a relationship with an OEM based on trust, they can spread the payment for you to make it easier to meet up with the cash requirement. For us, the issue is not funding but that jobs are not coming as expected.

Slot engineering 90 ton crane

Slot engineering

90 ton crane

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LOCAL CONTENT SHOWCASE

Welding station tractor with 4 welding machine,100kva generator & 75 cfm

compressor

So what could be the reason for this?

Activities in the oil and gas industry have been low. It is mostly because of the fall in the oil price, but things are gradually picking up. Although, the recovery has not been as fast as some of us think, yet, we are very hopeful that the recovery will improve.

Slot Engineering is known to be involved engineering services, procurement, human resources management and logistics. How does your company manage these portfolios to ensure effective and satisfactory services to your clients?

Of course, like I said earlier, the company’s growth did not happen at once. It was a gradual process. So, we were taking it one step at a time.

It is also about strategic planning as well as having the right personnel in the right places. So, there are personnel who are manning each of the departments. For Slot Engineering, we have been lucky to have dedicated and committed staffs who are effectively manning these departments. The truth is that the progress or otherwise of any company depends on the quality of her personnel.

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Recently, Federal Government introduced the gas f lare commercialization programme, NGFCP, what would be the role of slot in ensuring government achieve the desired result?

You know as a member of PETAN we have been enthusiastic in this area of gas flare commercialization.

For us in slot engineering, we have started the initial discussion with some overseas companies. The idea is that government is not going to give any form of guarantee and as I understand it the government is not in position to give any guarantee, investors are also reluctant without having guarantee because for any investor there must be an element of confidence that when you are investing your money you will be able to recover that money, even during the OTC we discussed with some persons and they emphasized on the issue of guarantee and with our capacity, it is not something we can do alone we need external investors.

How has Slot Engineering fared in its manpower services?

It is been good and we have continued improve on our service delivery. One was did when we

had an umbrella contract with SPDC. We don’t just provide local manpower services, we also provide expatriate services. We had some expatriate that were attached to SPDC. However, that contract was called off and we now concentrate on providing local manpower services.

Presently, do you have a functional website?

Of course, we have an active website where people can get enough information concerning our services and can as well reach us, submit their CVs. In the absence of the SPDC contract, we have continued to update our database.

Who are your major clients?

As at now we have SPDC and NLNG, we have also done very few jobs with Total.

What is your product standard like?

In fact in all the services we provide, we are ISO 2015 certified. Our services are in line with international standards.

Orient Energy Review Vol 8 No.08 August 2018 15

POWER ROUNDTABLE

The Axxela Effect: “We need to get Gas to all nooks and crannies of Nigeria to bring about an economic re- awakening” - Osunsanya

B

olaji Osunsanya, a renowned business leader and economist is the Chief Executive Officer of Axxela Group where he oversees the company’s expansion programs, in the West African sub-region. Following an extensive career featuring consulting with Arthur Anderson, banking with Access and GTB up to the position of ED, Corporate Banking. Mr Osunsanya has held positions within the Oando Group ranging from Head of Lubes and Specialties, to Chief Marketing Officer for Oando Marketing. He sits on the board of several companies including Oando PLC and Gaslink Nigeria Ltd. on the sidelines at the just World Gas Conference held in Washington DC, Orient Energy Review’s team sat with him to discuss issues surrounding the Gas industry in Nigeria as well as the directions, opportunities and trends globally. Excerpts!

T

hank you for meeting with us today at this year’s WGC and giving us the opportunity to learn more about the activities of AXXELA in particular, Can you give us a brief background of what AXXELA means and how it came about?

Axxela came about as a new investment vehicle resulting from a relationship between OANDO and Helios Investment Partners. It is coined from the words acceleration and excellence which are the drivers of the company’s vision of being

16 Orient Energy Review Vol 8 No.08 August 2018

Nigeria’s foremost natural gas distribution provider. It says we are pioneers in this area, but fully envision becoming the largest private sector gas distribution company not only in Nigeria but also the West Africa sub region.

We intend to be competitive with all the known names in the industry even on the international level.

It’s a long term vision, but we are taking incremental steps to get us to our destination. To do this, we are leveraging on the strengths and experiences of our investment partners especially Helios whose

sole focus is to bridge their expertise and international capital to our uniquely African enterprise and talent.

How is the AKK project coming along and what major benefits should we expect to see affect the lives of the average Nigerians?

It is going quite well. As you may be aware, we got the contract from Oilserv Ltd. to build the first section of the pipelines.

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POWER ROUNDTABLE

We have spent considerable time putting together the necessary and much needed financing in place because it is a vendor financed program. We are focused on insuring robust financing is in place. All this is going well and that is where we are now. But I must add that our interest goes well beyond just building the necessary infrastructure. We are also heavily invested in opening up new markets. It is not just about vendor financing but to open Nigeria for gas access. As to the second part of the question, let me say from the onset that Nigeria has the resource – gas, but only the Southern part of the country is benefitting. If only we appreciate the multiplier effect that a gas distribution infrastructure does to the economy of the communities it passes through, one would come to the realization that Nigeria is still very much a virgin territory and the opportunities and benefits are immense. We need to get gas to all nooks and crannies of Nigeria and hopefully by doing that, bring about an economic reawakening in each of those markets.

We have not done the Middle Belt or the North. Even the West we are just now headed to Lagos, we have not done Ibadan, the hub in Sagamu has not started, Ilorin West same thing. But when everything is in place we hope to have total interconnectedness. It is the same backbone that will connect back to West Africa and Europe if we are looking to go international and that is where we are ultimately hoping to head. However, we are taking baby steps at the moment and focused on bringing about economic benefits to local communities and indeed Nigeria. By so doing, we will be well placed to go into our sub-region and ultimately Europe. That is our vision. The focus right now is at the industrial level. Individual applications (such as connecting house grids) are still ways off and will ultimately only be done on a marginal basis.

As Partners, How Has Oilserv Impacted Your Development Of Gas Infrastructure?

As I indicated earlier, they awarded us the contract to develop the first section of the AKK. to date, they have been of tremendous help and a great resource. We have a good

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relationship with them and other stakeholders in the industry.

Is Axxela considering going into LNG in the nearest future with a view to the remarkable success registered by NLNG? On the AKK pipeline, the very platform upon which we operate and to even build it has been made possible by the government. They have also been at the fore front of helping to resolve challenges faced by the program from time to time, so I cannot give them enough credit. Our overall view is that government should provide “helicopter “support to the private sector in general and let the private sector do the rest. With regards to going into LNG in the future, one can say we are already in it, though on the infrastructure side, but as I alluded to earlier, the long term vision is to do more. In line with our brand statement, we will keep expanding till we discover a more diversified and sustainable source of energy. I spoke earlier of a total energy mix.

What is Axxela’s virtual pipeline play for sub-Saharan Africa?

Will this strategy help with supply securitization?

Again, we are for now focused on Nigeria as we should surely do. We need to insure access and energy security (in general). We are trying to get the NLNG to look inwards and how they can help to secure the industry. There is a commitment from its board to look inwards and do for LNG, what it has done with LPG – that is, to look at Nigeria as an LNG destination. There is a project we are working on with the NLNG at the moment that should attract that gas from them among all other global sources so that we have a diversified base.

That way, LNG is just part of the total energy mix- albeit an important one. By so doing, we hope to diversify away from the infrastructure construction, from the disruption that sometimes occurs in the industry from time to time. So that speaks to the supply side of things.

pipelines (as was in the case in the oil industry), has virtually been nonexistent at best and very minimal at worst. I can count on my finger tips the number of disruptions we have had this year. The government is doing what it can and the result is a radical departure from where it has been in the past. That security challenge has been brought very much under control. But the way we have also looked at this is to think outside the box. I believe the biggest challenge is that of a single point failure. A disruption to our pipelines in such a scenario is potentially catastrophic. So we are looking at other ways of diversifying supply sources. That is where FSRU and mini LNG comes into play as well as the looping of the Escravos - Lagos pipeline, the AKK etc. The fact that we can create a loop in the infrastructure is what helps when such disruptions occur in the supply chain. We have to create a robust infrastructure such that no one can hold the economy to ransom and to insure that Nigeria always has gas.

In addition, we would also deploy the technologies that will help us manage disruptions.

You recently acquired shipper status on the WAGP. How does this affect your growth strategy across the region?

Our regional play is a big thrust in our overall growth strategy.

We would like to replicate what we have done in Lagos and PH in virtually all the markets along the West African coast. Just as the Escravos -Lagos pipeline was critical to developments in Nigeria, so too is shipper status on the WAGP is just as critical to our regional pay. That is why we are happy with our shipper status and work has begun in earnest to enable us supply those markets in a short while. Nigeria, by the size of its markets, will obviously remain the focus of our supply efforts but we are looking for incremental markets and diversifying our income base, hence our regional play but not at the expense of a reduction in the Nigerian supply. So we are very excited

On a related basis, vandalization of

Orient Energy Review Vol 8 No.08 August 2018 17

POWER ROUNDTABLE

In your opinion, what’s the biggest issue facing gas development in Nigeria and what would you recommend as the solution?

The challenges facing the gas industry in particular and the power sector in general can usually be placed in traditional buckets as follows: • Are the commercially viable?

markets

• Is the existing in frastr ucture adequate and appropriate?

• Are the contracts properly structured and with a good commercial construct?

• Do we have the resources both human and capital to insure sustained development?

Unfortunately, we are still a work in progress in all the four areas and need to improve on how we deal with it. What we have going for us is that we have the actual resource and we just have to make the optimal use of that resource.

While things have not changed much, we are progressing bit by bit.

industry is at such a developed stage that there is a lot to leap frog. Following from this, we have come to the realization that there is no need to learn the industry from scratch and going through the motions. We can learn from those organizations already in play and experienced. So the approach to learning is what brings us to conferences such as this. Speaking to the challenges in the industry, we are also able to learn from the experiences of other participants and source creative solutions. For example, we are working with the idea of working LNG into our gas mix. The Asia countries have been through it all, we can learn from them how to enhance what we have. Issues relating to storage, transportation etc. has been addressed by them and we can learn industry best practices. Attendance at exhibitions also exposes us to cutting edge technology and practical applications in one place which would have cost us time and financial resources going round the world to find solutions to issue we may encounter along the way. So we love attending such conferences and exhibitions. Nigeria, as a nation is also trying to take its rightful

place in the market. So as a private company, we try to play our part by supporting efforts of the government to showcase what we have to offer.

What’s the next big news we should expect from Axxela?

You know progress is a continuum. I am hoping to see faster growth and faster adaptations in the next 10 to 20 years. We have done some good work so far albeit very slowly and there is still a long way to go. But we don’t need to wait to do things organically. We need to deploy technologies and adopt solutions in a much faster way. We gain that by partnerships and there is no need to struggle or wait to do things marginally. We can do acquisitions, M & Es. The more collaborative, the better.

We thank you for your time sir.

What do you aim to take out of WGC this year?

Our participation at this and other similar conferences derives mainly from our positioning as a growth focused company.

We recognize that the

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Africa Oil Week 2018 is the meeting place for Africa’s upstream oil and gas markets. The event brings together senior leaders of governments, national oil companies, investors, corporate players, independents and financiers from across Africa and beyond – giving them a place to network, discuss and share knowledge.

Join us to celebrate our 25th Anniversary in November.

5-9 November 2018

Cape Town International Convention Centre Cape Town, South Africa

info.africa@ite-events.com www.africa-oilweek.com

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Orient Energy Review Vol 8 No.08 August 2018 19

PHOTO GALLERY

Faces and scenes at the Nigerian Oil and Gas Conference and Exhibition (NOG) 2018

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PHOTO GALLERY

NIGERIAN DELEGATION AT THE WORLD GAS CONFERENCE, (WGC 2018)

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Orient Energy Review Vol 8 No.08 August 2018 21

COVER STORY

Oil Politics: Delay in PIB Passage, Elections Stifling Nigeria’s Petroleum Industry

By Godspower Ike

F

or several years, a number of projects in the Nigerian petroleum industry had been suspended, while Final Investment Decisions (FID) on several others had been deferred. The major culprits are uncertainty and the absence of clear policies for the sector. This article highlights the effects the delay in the passage and assent of the Petroleum Industry Governance Bill (PIGB) and the remaining components of the Petroleum Industry Bill (PIB) had had on the industry. It also highlights how the forthcoming elections feature in the equation and steps to be taken

22 Orient Energy Review Vol 8 No.08 August 2018

to address the logjam in the industry.

The uncertainty surrounding the forthcoming elections and the nonpassage of the remaining segments of the Petroleum Industry Bills, PIB, had affected the petroleum industry negatively and can be blamed for the lull in the industry, with the widespread deferment of projects and delay in reaching Final Investment Decisions on a number of projects in the sector. Though, political and state actors would oppose this view, operators had by their unwillingness

to undertake new projects and their consistent call for the speedy passage of the bills into law that this is the true situation of things. Major oil projects that had remained in the doldrums include the Train 7 of the Nigeria Liquefied Natural Gas (NLNG), 225,000 barrels per day (BPD) Bonga Southwest-Aparo project; 120,000bpd Zabazaba-Etan project; 140,000bpd Bosi project; 110,000bpd Uge project and 100,000bpd Nsiko deepwater project has been delayed.

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COVER STORY

Apart from other challenges, the oil well, with proven reserves of 560 million barrels of oil, had been the subject of a corruption probe and prosecution in Italy and Nigeria. FID for the 225,000bpd $10 billion Bonga South West-Aparo deepwater project was targeted for 2018, with first oil expected in 2022.

The asset is located in Oil Mining Licence (OML) 118 but also extends to OMLs 132 and 140. However, Shell had attributed the delay in attaining FID on the fact that it was still exploring more efficient and cost-effective ways of implementing the project. For Bonga South West-Aparo, Shell said FID was delayed to allow SNEPCo and its co-venture and government partners explore more efficient and cost-effective ways of implementing the project. It assured that a new timeframe for FID would be announced as soon as the necessary commercial framework for the investment, among other things, is agreed upon with its partners. Confirming this, Shell, had in a briefing note, a few months back, said its upstream exploration and production arm, Shell Petroleum Development Company, SPDC, had put on hold investment decisions on two key offshore oil and gas projects that would have cost about $30 billion till when the new petroleum law is approved.

Other projects that had suffered delay include Anyala (OML 83) and Madu (OML 85) fields in shallow water off the East Central Niger Delta, the second phase of the Escravos Lagos Pipeline and the Ajaokuta-Kadu naKano gas pipeline among others.

These projects, whose FIDs were supposed to be taken before the end of 2018, were estimated at over $50 billion, and are expected to help boost Nigeria’s crude oil reserves to 40 billion-barrel and also grow the country’s crude oil www.orientenergyreview.com

production to four million barrels per day (bpd). The controversial Offshore Processing Licence (OPL) 245 on the southern edge of the Niger Delta, is expected to be jointly developed by the Nigerian Agip Exploration Limited and Shell Nigeria Exploration and Production Company (SNEPCo) at a cost of $13.5 billion. Agip had planned to achieve first oil production by 2020 and was determined to start the execution of the project in the fourth quarter of 2017.

It said its challenge was not in the potentials to grow capacity to produce four million barrels of oil per day and 40 billion barrels reserves, but mobilising the resources to bring it into reality. It had noted that the key challenge is in making the best out of the resources available by optimising production and making the operational environment more stable for the players. It had stated that if contractors were not sure of a stable investment environment, regular payments, value-adding partnerships and a different project funding approach, it would be difficult to attract fresh investments. It said, “All what the industry is clamouring for is a PIB that would provide for globally competitive returns on investment to all stakeholders as well as a law that would create an investment climate that enables the government to cooperate with industry players without disrupting agreements on funding for oil and gas operations.

On his part, Total E&P Nigeria Limited had also expressed similar fears over non-passage of the bills, saying the relevant authorities should speed up action towards getting the proposed law ready, to help the oil and gas industry continue to grow.

Orient Energy Review Vol 8 No.08 August 2018 23

COVER STORY

It said the IOCs are demanding a balanced, competitive PIB that would guarantee stable operational environment, ensure security, fair fiscal regime; and that would help investors decide on investment on projects and remove funding constraints. In addition, Angus Rodger, Principal Analyst – Upstream Research for Wood Mackenzie, listed Canada, Angola, Kazakhstan, Nigeria, Norway and the United States, as countries with the largest inventory of delayed oil projects.

He said these countries hold nearly 90 per cent of all deferred liquids reserves, including oil sands, onshore, shallow-water and deepwater assets in both greenfield and incremental developments. Also speaking, , Chief Executive Officer, African Initiative for Transparency, Accountability and Responsible Leadership (AfriTAL) and former President of Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, Dr. Louis Brown Ogbeifun, said Nigeria has lost its dominant position in the global oil and gas landscape as a result of the absence of a proper legislation to regulate the industry.

He said, “There is no doubt that the country has lost dominance of its oil and gas industry and also lost trillions of naira because of the delay in passing the PIB either in its original form or in a collaborative compromised state. “The IOCs are revaluating, divesting and adjusting their business strategies. NEITI audits from time to time have clearly shown disparities in figures of the 24 Orient Energy Review Vol 8 No.08 August 2018

agencies of government that should have the same figures from real time data generated. “There are project delays due to funding challenges and delayed approvals from the highest level of governance. The sector has also been impacted by the falling oil reserves in the onshore fields, insecurity in the operating areas, crude theft, vandalism, artisanal refining, community challenges, high Dollar/Naira parity, confused and undefined subsidy regimes and global oil politics.”

According to Ogbeifun, all these resulted in the stunted growth and crippling of the industry as typified by occasional products’ scarcity that have grave consequences for labour, marketers and the country in general. Corroborating it further, global extractive industry watchdog, Publish What You Pay (PWYP), had a few days back, stated that Nigeria is losing N3 trillion annually for failing to put in place a proper legislation for the oil and gas industry.

National Coordinator of PWYP, Mr. Peter Egbule, disclosed that over the years, the country had been losing trillions of naira, as investors were denied the opportunity to invest in the oil sector due to the nonimplementation of internationally acceptable laws that would support business. The PIB was first introduced at the National Assembly in 2000, in the Fourth Assembly. Since then, the bill had never been passed, suffering one form of delay or the other, mainly due to political and economic interests.

The National Assembly had in March 2018, successfully passed the PIGB, which was introduced in the current 8th Assembly by the legislators.

The Bill is currently awaiting the assent of the President for it to eventually become law. The Bills remaining to be passed include the Petroleum Industry Administration Bill, Petroleum Industry Fiscal Bill and the Petroleum Host Community Bill. However, with the 2019 elections around the corner, stakeholders are skeptical about the passage of the remaining bills before the tenure of the current National Assembly runs out. The stakeholders are concerned that the legislatures would be occupied with seeking re-election than the passage of the bills.

“

This will be a major setback in our collective interest in establishing a more responsive a nd s o c i o - e c onom ic a l ly i mpactf u l Ni ger ia Pet roleu m Industry, as well as send the wrong signal to Nigerians and the global community at large.”

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COVER STORY

It had also been touted that President Muhammadu Buhari may refuse to assent to the PIGB and the other bills after their passage, due largely to his political differences with the leadership of the National Assembly.

However, Peter Egbule called for the speedy assent of the PIGB and the passage of the remaining oil and gas bills before the National assembly. According to him, the passage and signing of the Bills into law was in the collective interest of all Nigerians, as this would create a more functional administrative structure, significantly reduce financial leakages, encourage foreign and domestic investments, provide succor for host communities, among others. He said, “Although we hope and expect that the President will assent to the PIGB and the other bills whenever they are transmitted to him, but we also recognize that it is his right to refuse assent.

“If the latter happens, it will be disappointing to well-meaning Nigerians, resulting in another round of legislative reconsiderations, political intrigues, delays, and public frustrations.

“This will be a major setback in our collective interest in establishing a more responsive and socioeconomically impactful Nigeria Petroleum Industry, as well as send the wrong signal to Nigerians and the global community at large.” He appealed to the National Assembly to immediately refocus on the passage of the Bills, and intentionally dedicate substantial time for the legislative processes required for the passage of the bills, especially before they become engrossed in the obviously heightening political activities towards the 2019 general elections. Egbule also implored both the National Assembly and the Presidency to carry out their respective actions without further delays in the interest of the dwindling economy and the lives being affected by the continuous delay in the passage of the Bills. www.orientenergyreview.com

“We implore the National Assembly to take the path of national reverence in passing the bills. This is our expectation on the National assembly, and we are confident that when the time comes, they will do so with visible swiftness, in the interest of all Nigerians,” Egbule noted. He further urged President Muhammadu Buhari to on receipt of the Bills, act in line with his incessantly proclaimed stance on corruption and expedites action on his assent to the bills.

He maintained that the present administration have a one-in-alifetime opportunity of writing its name in the annals of achievements by passing and signing these bills into laws. On his part, Chairman of Council of the Institute of Oil and Gas Research and Hydrocarbon Studies, IOGRHS, Professor Akin Akindoyeni, cautioned against allowing politics to interfere with the assent of the PIGB and passage of the remaining petroleum industry bills.

Akindoyeni, said the passage of the remaining petroleum industry bills was critical, as it was needed to right the wrongs witnessed in the Nigerian petroleum industry over the years. According to him, speedy passage of the bill would send a strong signal that the country was ready to take a bold step in going a bit further to making the Nigerian petroleum industry a world class industry. He said, “We believe if the bill is passed into law, it is a start, and we believe we can still go a lot farther. We hope the provisions in the new bill would be enacted,” he stated. Explaining his expectations from the Bill, Akindoyeni said, “What we would have expected the government and the legislature to adopt is to yield more equity to local people, the landowners where these minerals are being exploited; to improve their life, their environment and to make alternatives available to them.

“

The exploitation of oil and gas in their environment had made it difficult for them to earn better income or have better living standards.”

Also speaking, Professor Charity Emaviwe, Deputy Chairman of the Institute of Oil and Gas Research and Hydrocarbon Studies, also advised

that timely passage of the bill would address most of the challenges confronting the petroleum industry.

Again, Dr Louis Brown Ogbeifun, has warned of dire consequences if the fiscal and host community Bills component of the Petroleum Industry Bill, PIB, are not passed by the National Assembly and President Muhammadu Buhari sign into law before the end of August.

Ogbeifun who is also a former Industrial Relations Manager of the Nigerian National Petroleum Corporation, NNPC, called on stakeholders to work creatively to enable the National Assembly pass the Bills for the President’s assent without delay.

According to him, if the Bills were not signed into law by the end of August and full politicking begins ahead of 2019 general elections, both the lawmakers and the president would no longer have interest for the bills and that would lead to a very serious setback that the nation could not afford. Speaking in Lagos, at a strategic engagement of stakeholders on the Petroleum Industry Administration and Fiscal Regime Bills, before the National Assembly, the PENGASSAN former President lamented that 18 years after the PIB was first came to limelight; Nigeria was still footdragging on the Bill. Ogbeifun argued that no country could develop its hydrocarbon potentials to the optimum with the type of procrastination and indecisiveness as had been the case of Nigeria since 2000 till date.

He said, “My worry is that, despite the efforts of the 8th Assembly in breaking the Bills into smaller components, it does not still look like stakeholders are ready as a group to effect the positive changes that would lift the industry higher. “Some of the reasons for the failure in the past include but not limited to: Lack of political will by the previous administrations to follow through the reforms; Positional bargaining by the critical stakeholders especially on the fiscal regimes; Perceived possible job losses, inadequate guarantees on pension and employment security of the workers and perceived loss of economic, political, administrative and governance benefits/powers by various agencies.

Orient Energy Review Vol 8 No.08 August 2018 25

COVER STORY

“Others are the voluminous and complex nature of the Bill; Political interests especially on the host community funds etc. In midst of our inaction, we have been running the oil and gas sectors with policies that were majorly not enacted into laws. “We have also tried several administrative and financing regimes like the, Crude Swap Arrangements, third Party Financing, Carry Arrangement and Modified Carry Arrangements in managing the agreements with the JV partners. Our nation’s oil and gas sector cannot develop with obsolete laws, inability to restructure or carry out the necessary reforms over a long period of time.

“This surely can not promote investors’ confidence and therefore, not likely to come out strong like Saudi Arabian Oil Company, which earned a revenue of about $455.49 billion in 2015 and had employees in the range of 65,266 in 2016. “It is said to be one of the largest companies in the world by revenue with a market value of about $2-$10 trillion. China Petroleum and Chemical Corporation were founded in 1988 with employees totaling 1.64 million in 2014 and a revenue of $428.62 billion in 2015.

Hindustan Petroleum Corporation runs like the NLNG with 51.11% state holding. In 2013, it ranked 260th in the Fortune Global rankings. It has more than 18,000 employees. “Abu Dhabi National Oil Company was founded in 1971 and restructured in 1988. It is rated world’s 12th largest oil company by production of about 3.1 million barrels per day. It returned revenue of $60 billion in 2014 and had 55,000 employees in 2015.” He added that “these companies though

26 Orient Energy Review Vol 8 No.08 August 2018

state or partially s t at e o w n e d entities run like ideal businesses w ith st r ictly commercial orientations.

They make money for their countries and companies, provide massive employment opportunities to their citizens, and invest outside thei r shores in oil and gas, and other profit yielding businesses.

“This is possible because their countries’ laws and best practices support them to so excel. But in our clime, our models reflect the Father Christmas approach, in which government in the past discretionally allocated oil blocs as gifts to who they liked without due process. We entrenched monthly “share the money syndrome (STMS)” without commensurate reinvestment programmes at the expense of Nigeria and the development of the oil and gas sector. “The change in the operations of the NNPC; as typified by the incessant firing of the Corporation’s Chief Executives at will; and by extension the change at the top management level by successive political administrations has come with dizzying astonishment.

the remaining components of the Petroleum Industry bill.

Speaking at an Oil and Gas Public Lecture Series in Abuja, organized by the Institute of Oil and Gas Research and Hydrocarbon Studies, IOGRHS, Senate President, Olubukola Saraki, said the National Assembly would not allow politics interfere with the passage of these critical bills which would help in the development of the Nigerian economy.

Saraki, who was represented at the meeting by the Vice Chairman of the Senate Committee on Petroleum, Upstream, Senator Gershom Bassey, said the country is losing up to $30 billion annually in terms of foreign capital, due to the absence of a clear legal framework for the petroleum industry. Also, leadership of the House of Representatives had at different for a, assured of a speedy passage of the remaining bills, promising not to allow politicking hamper them from taking decisions on the bills. Despite the assurances by the Senate and the House of Representatives, the next line of action of operators remained to be seen. However, it is a known fact that no business would thrive in an uncertain environment, hence the Executive and the Legislature should walk their talk, shun the distractions of campaigns and politicking; put their sentiments and interests aside and work towards uplifting the petroleum industry and the country in general. Investors and operators in the petroleum industry would be willing to resume investment activities in the industry when there is certainty and clear policies guiding activities in the industry.

However, the Senate had insisted that the forthcoming electioneering and politicking ahead of the 2019 elections would not disrupt the passage of

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LOCAL CONTENT

NCDMB wins 1st Dr Alirio Parra Award at NOG 2018 ‌signs MoU with CWC on PNC Workshop international oil and gas s e c t o r. He had insightful knowledge of the Nigerian oil and gas industry, had been visiting Niger ia for over 40 years and delivered addresses at annual NOG events.

In a similar vein, the NCDMB has signed a Memorandum of

T

he Niger ia n Content Development and Mon itor i n g Boa rd ( NC DM B) h a s b e e n conferred with the first 1st Dr Alirio Parra Award for Outstanding Contributions to the Nigerian Oil and Gas Industry. The award

was presented to the Executive Secretary, NCDMB, Engr. Simbi Wabote at the gala dinner held recently in Abuja to mark the end of the 2018 Nigerian Oil and Gas Conference and International Exhibition(NOG).

28 Orient Energy Review Vol 8 No.08 August 2018

Total Exploration and Production Company was also recognized for its sterling contributions to the growth of Local Content through the execution of the Egina deepwater project. CWC and Levmora Services, organizers of the NOG conference said NCDMB was chosen for the D r A l i r io Pa r ra Award for being the most outstanding federal agency in the Nigerian oil and gas industry. The Board was also feted as very innovative, introducing several initiatives that are geared to improve the operations of the sector and develop the Nigerian economy.

Late Dr Alirio Parra, former Minister of Energy and Mines, Venezuela and Senior Advisor, CWC Group Limited died on March 9, 2018, aged 90. He also served as President of the Organisation of Petroleum Exporting Countries (OPEC) Conference and was involved with many professional activities in the

Understanding (MoU) with the CWC on the organisation of the Practical Nigerian Content (PNC) Workshop and Exhibition. Engr.

Wabote signed on behalf of the NCDMB on Monday at the first day of the NOG Conference while the Vice President, Production, CWC, Ms. Wemimo Oyelana signed on behalf of the company.

The Executive Secretary explained that the MoU is for five years and revenues generated from hosting the annual event would be shared between the Board and CWC. He also stated that CWC was working to be incorporated in Nigeria. The PNC Workshop was conceived by CWC and it organised the first edition in Port Harcourt, Rivers State, in 2011. Subsequent editions were held in collaboration with the NCDMB, in Yenagoa, Bayelsa State between 2012 and 2015. The event was moved to Abuja in 2016 and Uyo, Akwa Ibom State in 2017.

The 2018 edition will be held at the Board’s new headquarters building, which is being completed in Yenagoa, Bayelsa State.

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LOCAL CONTENT

Viper Innovations Sign Deal With Royal Niger Nigerian distributor to represent Viper Innovations expect, as we extend the life of their subsea assets.”

Nigeria is one of a number of key global markets that offer opportunities for Viper Innovations, promoted in part by the accelerated degradation of subsea electrical systems due to the warm water conditions and the general age of the offshore assets in the Niger Delta.

V

iper Innovations, a UK company specialising i n m a x i m i s i n g t he operational life of subsea controls and electrical distribution equipment, has appointed a new distributor to improve its service offering and share of the Nigerian offshore oil and gas market.

Royal Niger Emerging Technologies Ltd, which is based in Port Harcourt, has more than 5 years’ experience in the upstream industry and has already been working closely with Viper Innovations for some time.

Going forward they will be selling and supporting the company’s range of electrical integrity monitoring eq u ipment, i nclud i n g the revolutionary V-LIFE insulation resistance recovery product winner of The Queen’s Award for Enterprise in Innovation in the UK. Jeremy Edwards, Business Manager at Viper Innovations together with Nikki Mann, Service Manager met with Royal Niger’s Managing Director, Anthony Okolo, to sign the official distributor contract in a ceremony at the Viper Innovations office in Aberdeen.

“Viper Innovations has developed a range of leading edge technologies in the field of subsea electrical insulation monitoring and recovery.

Our leading product V-LIFE now has over 70 successful installations worldwide, being used by many national and international oil companies. Our products are particularly applicable in Nigeria where we already have a number of our products installed. The appointment of Royal Niger will strengthen our in-country presence and provide the level of service which is commensurate with the high standards that our customers

A s A nt hony Okolo, Royal Nigeria Managing Di rector sa id, “ T he unique ability of V-LIFE to recover the integrity of subsea circuits is already saving the oil industr y mi l l ions of dollars by preventing the necessity to replace subsea umbilical cables. Royal Niger will also be selling and supporting Viper Innovation’s network integrity monitoring product V-IR and V-LIM an electrical line integrity monitoring module. Royal Niger will be delivering the company’s asset integrity management service, V-ASSURE, and the electrical power module V-SUPPLY. We will be helping our Nigerian customers optimise their operations by maximising asset life while scoring an important point for Nigerian Content by domiciling capability in-country”.

Viper Innovations’ Managing Director Neil Douglas commented,

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Orient Energy Review Vol 8 No.08 August 2018 29

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LOGISTICS & MARITIME

OGFZA Ranks No. 1 among 44 MDAs on FG’s Ease of Doing Business (EO1) Report

By Jerome Onoja

T

he Oil and Gas Free Zone Authority (OGFZA) has emerged as the highest ranked among forty-four other ministries, departments and agencies, MDAs in a recent report.

Published by Presidential Enabling Business Environment Council, PEBEC, the grading in the report was done to measure the compliance level with the Executive Order of Nigeria’s President Muhammadu Buhari with respect to the ease of doing business in Nigeria.

The progress achieved by the MDAs is the result of close collaboration between the MDAs and Enabling Business Environment Secretariat, EBES. Among the MDAS, the one that showed the highest level of compliance are: Oil and Gas Free Zone Authority, OGFZA (94%); Federal Ministry of Finance, FMoFA (91%); Nigeria Agricultural Quarantine Services, NAQS (82%); Nigeria Electricity Regulatory Commission, NERC (81%); and Nigeria Immigration Services, NIS (80%).

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Successful MDAs have i mplemented cr itica l reforms in three areas that have enabled them to streamline their processes and comply with the EO1: automation; transparency and communication; and monitoring evaluation systems. Taking a glance at automation, the outstanding MDAs have aligned their operations with global best practice, using technology as a key tool to improve their efficiencies. For example, with respect to functional online application platforms, the OGFZA and the FIRS have automated all their services. Also, concerning integration of service platforms among related and collaborating MDAs, the FIRS and CAC have both carried out integration of their various platforms.

Over the years, government and its agencies are seen more as obstacles and hindrances rather than as facilitators. This is perceived across all arms of government; whether executive, judiciary or legislative. One of the obvious consequences of such attitude was that, Nigeria’s business environment was one of the most stressful in the world.

Without investment, there’s little or no job creation. Without job creation locally, there’s continued brain drain across the highly-skilled and educated, young labour force. Each unprofessional conduct by a public

servant towards potential investors or anyone seeking approvals and licences, contributes to slowing down the economy. It negatively affects the possibility of establishing a business, an industry, and the desired growth and development of the nation. It was to this end the Executive Order was made by the president. The Executive Order 001 (EO1) was signed on 18 May, 2017, by the Vice President, Professor Yemi Osibanjo (SAN), then Acting President. The very first executive order of the administration sought to promote transparency and efficiency in the business environment. EO1 has been acknowledged as one of the President Buhari’s most innovative strategic initiatives to deliver quick, pragmatic changes for Nigerians. It has the following indicators: entry & exit of people; starting a business; trading across borders; registering property; paying taxes; dealing with constructing permit, getting credit and getting electricity.

Commenting on the report, Mr Umana Okon Umana, the MD/CEO of OGFZA commended the staff and management for the excellent performance and urged them to continue to faithfully implement the policies and programmes of the present administration.

Orient Energy Review Vol 8 No.08 August 2018 31

LOGISTICS & MARITIME

Permanent Solution to Apapa Gridlock: ‘Government Must Kill Corruption, Summon Political Will,’ Tanker Drivers Said

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ith several measures previously adopted in tackling the perennial traffic gridlock in the Apapa and other roads linking the major tank farms in Lagos State and their subsequent failure, trailer and truck drivers have called on the government to reconstruct the roads, go for infrastructural renewal, kill corruption and to summon the political if it hopes to find a lasting solution to end the torturous traffic situation, Oge Obi reports. The recent confederation of forces to tackle the perennial traffic gridlock on the Apapa axis of Lagos State and other roads linking the major tank farms in the country, may not seem new. The complexity of the Apapa gridlock has often times proved these interventions and measures incapable of arresting the situation.

Interestingly, the chaotic traffic situation in Apapa and the subsequent effect on other roads in the state has not been left without efforts from different quarters. The torturous situation which has persisted for close to a decade now has seen government pronouncements, repeated on the spot assessment of both infrastructure and traffic management in the area by the government functionaries, military and paramilitary interventions, concerned stakeholders’ outcry and interventions, just like a riddle has remained unsolved.

32 Orient Energy Review Vol 8 No.08 August 2018

The situation which was described as a “national disaster” that calls for concern by the Lagos State Commissioner of Police recently had a joint task force tagged “Operation Restore Sanity” set up with 1,000 policemen deployed to work with other relevant agencies to bring back sanity on the affected areas. This current effort which seems to be the long-awaited magic wand needed to end the perennial hardship road users have been thrown into for some years now, indeed brought some relief to Lagosians. However, for some stakeholders, it is not yet Uhuru! According to them, the current measure just like similar ones in the past is unsustainable. The government was advised to summon the political to bring an end to the unsavory situation. Our reporter who visited some of the roads in a chat with some trailer and tanker drivers trying to access Apapa for different purposes was told that government needs to summon the political will to bring an end to the age-long traffic chaos in the area.

Describing the Operation Restore Sanity as an unsustainable solution, a trailer driver, Mr. Dada Abbas disclosed that the new task force had only worked effectively for the first three days. He warned that sooner or later, the situation may return to status quo if the government fails to tackle the root cause of Apapa traffic.

Abbas explained that members of

the task force have since resorted to extorting money from drivers after top government officials left the scene. He said, “I have spent about N5, 000 just to move Cele Bus Stop to Second Rainbow. The simple truth is that the new task force is not working.

The higher your bribe, the better your chance of getting to your destination earlier. I will advise government to walk her talk by reconstructing the roads, tackle corruption among these official overseeing traffic management in Apapa and put the necessary infrastructure in place.

“You need to understand that this new task force is not working. Now that the Ogas have returned to their offices, what these people are after is how much they can make from us. As you are seeing me, this is where I sleep, birth and defecate. If it takes me a month or two weeks to get into Apapa in this weather, that is the condition we will live with”, Abbas said. According to another truck driver, Mr. Samuel Ola who said that he had spent six days to move from Cele Bus Stop to Second Rainbow, he expressed fears that it might take him up to one month to get his destination in Apapa. Ola who is headed to Second Gate in Apapa, blamed his predicament on his inability to mobilise as much as N40,000 for express passage. The driver said, “I must confess that the present situation is better than what it used to be, but the painful aspect is that these people have turned into a money-making venture. www.orientenergyreview.com

LOGISTICS & MARITIME

“If I have enough money like N40,000 to settle the soldiers, police, LASTMA, and others, my vehicle will be called up for express passage. That is why when you get to places like Mile 2, Freedom Market and farther down, this single line here becomes two. The shorter line is for those who have settled”, Ola explained. Speaking further, the driver appealed to the Federal Government not to delay any longer in commencing the reconstruction of the roads as was pronounced by the Vice President, Yemi Osinbajo. He also noted that in addition to the road reconstruction, the government should consider infrastructural renewal. Accord i ng to the Ekiti State indigene, delays in getting their papers checked and containers loaded are often blamed on faulty computers, shortage of personnel, among others. Calling for infrastructural renewal, Ola said, “Truck owners should organise themselves and buy land wherever they want and build a truck bay where their vehicles can park while they wait to be called up. If done, this will take care of lot things. For example, after spending these long days under this harsh weather, to enter either the First or Second gates become another huddle because the workers only work for three days in a week. There also, we are faced with another phase of extortion from the terminal workers as well as the security people. And if you don’t want to have problems with them, you will collect their phone numbers for your next trip.”

Chatting the way forward, Ola said that government must be willing to bring an end to the chaotic traffic in Apapa area of Lagos.

They must be willing to deal with the problem of corruption because many of these trucks are owned by top politicians and people who are highly connected in the society.

“So, they don’t allow their trucks to and their drivers to go through what we suffer. All it takes is a phone call or exchange of some Naira notes. They are the ones that enjoy express passage because they can afford”, he alleged.

For Ossi Osim, whose efforts to drop an empty container at some designated places outside the wharf/Apapa area has proved impossible and was forced to join the queue, the story is the same.

Narrating a similar experience in

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the hands of those coordinating the traffic, the Edo State indigene said that they were also not free from the area boys’ harassment and extortion. According to him, “we are troubled on all sides”.

to go and turn at Cele to join this queue that I don’t know when I will get to Apapa. If there are enough terminals to drop our empty containers, we won’t be suffering the way we are, today.

He noted that “the painful aspect is that the task force team can turn you back at any point if you “misbehave”. They don’t care how much you have spent or what you have suffered before getting to that point. All they care is that you settle well.” Asked why he and his colleagues would prefer to park on the roads rather than make use of the available truck parks like the one at Orile Iganmu area of the state, Osim said that lots factors discourage drivers from using the park. According to him, the problem ranges from insecurity to arbitrary charges. “For me, it is better for me to park on the road than go into that Whites and park.

There is no security there. There, the thieves will ‘tear’ your motor down! They steal just anything!

In that park, you will lose your side mirrors, battery, diesel and other removable parts and nobody cares. Then, at night, the armed robbers will come with all manner of weapons to dispossess you of your phone or maybe the little money you have for sorting yourself out on the roads.

For a truck driver who identified himself as Abdulahi, the journey into Apapa is a lot better since the task force took over traffic management in and out of Apapa.

According to the driver who was going to load his tank at MRS tank farm for onward delivery to the northern part of the country, said that it would get better if the government could reconstruct the road as promised. He further said that if other ports are made functional and petroleum products transported through oil pipelines to different states, it would reduce the concentration on the Lagos road and the subsequent risk.

This also corroborated the Lagos State Governor’s view when he said that “The Apapa congestion is a national issue that requires urgent attention. The oil pipelines should be revived to discourage the trend of thousands of trucks coming from other parts of the country to lift petroleum products from Apapa. “It is bad that we still use trucks to lift petroleum products from Apapa to other parts of the country. As it is now, other ports in Nigeria must begin to work immediately to decongest the gridlock in Lagos. Whatever has led to the continual use of trucks to lift fuel, which is, vandalism of the pipelines, should be addressed immediately. “We believe that this will allow the roads to become free.

We don’t need to continuously use taxpayers’ money to build roads that would be destroyed by tankers. We call on the Ministry of Petroleum Resources and the DPR to work towards reviving the pipelines”, Ambode said

“At Orile, the thieves come at night to attack us, it is even safer here on the road. Although Agbero (miscreants) take money from us, we prefer it than the danger we are exposed to in that park. Here on the road, we stay awake at night to guard our vehicles and if there is an attack, other drivers and motor boys respond promptly whenever anyone raises any alarm, Osim said. “Please, help us tell the government to please adopt a more permanent solution to this problem than the temporary measures it has been applying for years now.

They should be tired of playing politics with this situation. The loss we have incurred from this situation has been huge. Lives that have been lost on these roads are so many. It has sent so many out of work and business. This is time for both Federal and Lagos State to corroborate match their words with commensurate action.

The humiliation is too much on us, the drivers. Just because I couldn’t afford N25,000 to drop my container at this terminal by that Lacasera company at Mile 2, I was turned back and directed

Orient Energy Review Vol 8 No.08 August 2018 33

COVER STORY Host

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34 Orient Energy Review Vol 8 No.08 August 2018

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EXPLORATION & PRODUCTION

Senegal Shines Bright as a Developing Region - Hathon and positive social and economic benefits,” Hathon said.

greatly encouraged and supported by the Senegalese authorities who fully recognise that a sustainable industry is potentially transformational for the country” Hathon added.

How the operation is progressing The field development concept for the SNE discovery has been selected and the joint venture is now focused on development, planning milestones leading up to first oil expected in 2021-2023. “We are focused on the Evaluation Report, which will outline the basis of commerciality of the project,” Hathon explained. “Key work is also progressing on detailed concept and front-end engineering and design with preferred contractors beginning in the second half of 2018.

The Exploitation Plan, outlining the full life of the development plans and options is also targeted for submission in the second half 2018.

Government approval is targeted for the end of 2018, with the final investment decision thereafter.”

Cairn is currently operating with 40 per cent working interest in the three blocks alongside Woodside with 35 per cent, FAR with 15 per cent and the Senegal National Oil Company, Petrosen with 10 per cent. According to Hathon, the Atlantic margin is a key area of exploration focus and Cairn continually review suitable opportunities in the wider region.

Eric Hathon, Director of Exploration at Cairn Energy will be speaking at the Africa Oil Week 2018, taking place in Cape Town, South Africa on 5-9 November 2018.

Developing region

I

n 2014, Cairn and its joint venture partners made one of the world’s biggest oil discoveries and this was followed by Kosmos with significant gas discoveries. “The region has now evolved from a frontier to an emerging hydrocarbon opportunity attracting the attention of the global industry,” Eric Hathon, exploration director at Cairn Energy, said. “In the last three years we have operated three safe and successful drilling programmes and laid the foundation for a multi-phase development plan.” Dakar, where Cairn has an office and also built a supply base in the international port, is an attractive and exciting place to operate. “We have been

Given that the industry is relatively new, local industry expertise is just starting to develop and creating capacity through training and education is a key part of operations.

“We are committed to delivering lasting and social economic benefits in Senegal, including, energy security and revenues, employment, development of an infrastructure and social investment,” Hathon continued. “Cairn’s belief is that the discovery and development of sustainable oil production will greatly benefit the national economy and local population. The President of Senegal, who has an industry background having led the national oil company, Petrosen, has established CosPetrogaz to advise the government along with the Energy Ministry on the strategic direction and policy for the development of hydrocarbons.”

Since Cairn’s initial investment and the major discoveries, Senegal has moved from having no oil presence to becoming established as one of the top ten countries for oil and gas resources in Sub-Saharan Africa in the last five years. “We are proud to have opened up a new oil province and look forward to continuing to work with the government to deliver lasting

TOTAL’s 230,000BOPD Kaombo Project Comes Onstream in Angola

TOTAL has started up production of Kaombo, currently the biggest deep offshore development in Angola, located on Block 32, 260 kilometers off the coast of Luanda. Kaombo Norte, the first Floating Production Storage and Offloading (FPSO) unit, has been

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successfully brought on stream and will produce an estimated 115,000 barrels of oil per day, while the second one, Kaombo Sul, is expected to start up next year. The overall production will reach an estimated 230,000 barrels of oil per day at peak and the associated gas will be exported to the Angola LNG plant. A total of 59 wells will be connected to the two FPSOs, both of which are converted Very Large Crude Carriers, through one of the world’s largest subsea networks. Together, they will develop the resources of six different fields (Gengibre, Gindungo, Caril, Canela, Mostarda and Louro) over an area of 800 square kilometers in the central and southern part of the block.

The Kaombo development will monetise an estimated 650 million barrels of reserves and “contribute to TOTAL’s’s growing production and cashflow in Africa,” stated Arnaud Breuillac, the company’s President Exploration & Production at TOTAL. “It will account for 15% of the country’s oil production.

TOTAL operates Block 32 with a 30% participating interest, along with Sonangol P&P (30%), Sonangol Sinopec International 32 Limited (20%), Esso Exploration & Production Angola (Overseas) Limited (15%) and Galp Energia Overseas Block 32 B.V. (5%)

Orient Energy Review Vol 8 No.08 August 2018 35

EXPLORATION & PRODUCTION

Marathon Oil Reports Second Quarter 2018 Results

By Margaret Nongo-Okojokwu,

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arathon Oil has reported second quarter 2018 net income of $96 million, or $0.11 per diluted share, which includes the impact of certain items not typically represented in analysts’ earnings estimates and that would otherwise affect comparability of results. Adjusted net income was $126 million, or $0.15 per diluted share. Net operating cash flow was $767 million, or $849 million before changes in working capital.

Highlights Total production averaged 419,000 net boed; U.S. production averaged 298,000 net boed, both up 5% (exLibya) compared to the prior quarter U.S. resource plays averaged 285,000 net boed, up 6% compared to the prior quarter with all four basins growing sequentially Eagle Ford production increased to 106,000 net boed, up 2% sequentially; 39 wells to sales had an average 30-day initial production (IP) rate of 1,880 boed (66% oil) Bakken production averaged 82,000 net boed, up 11% sequentially, with oil production up 14%; 21 wells to

36 Orient Energy Review Vol 8 No.08 August 2018

sales averaged a 30-day IP rate of 2,700 boed (77% oil); Winona and Mamie wells in West Myrmidon set new basin Three Forks records on 30day IP oil rate; three new Elk Creek wells averaged a 30-day IP rate of 2,530 boed (72% oil) Oklahoma production averaged 80,000 net boed, up 7% sequentially; fourwell Lightner SCOOP Woodford infill pad delivered an average 30day IP rate of 2,620 boed (48% oil) on equivalent eight-well per section spacing Northern Delaware production averaged 17,000 net boed; six new wells from the Cypress infill pilot averaged 1,235 boed IP 30 (52% oil) and the three-well Fiddle Fee pad averaged 1,745 boed IP 30 (66% oil); executed agreement for water gathering and disposal in Eddy County In July, closed on the sale of three non-core, non-operated conventional assets in the U.S., including two in the Gulf of Mexico, further concentrating and simplifying the portfolio Raised both 2018 total Company oil and boe production guidance and 2018 resource play oil and boe production guidance, with no change to 2018 development capital budget

‘Another quarter of outsta nd i n g operational execution across our multi-basin U. S . p o r t fo l i o has driven better t h a n ex p e c t e d production in the resource plays, and has enabled us to raise our annual resource play production guidance for the second consecutive quarter with no increase to our development capital budget.

Our Eagle Ford and Bakken asset teams continue to set the standard for performance in their respective basins, while our Oklahoma and Northern Delaware assets progress important multi-well infill tests,’ said Marathon Oil president and CEO Lee Tillman. ‘Additionally, we continue to benefit from about half of our oil production for the quarter being linked to LLS or Brent, and the flexibility afforded by our differentiated position in the four best U.S. unconventional plays.

In the second half of the year, we plan to drill our first exploration well in the emerging Louisiana Austin Chalk play as we continue our pursuit of low entry cost opportunities to enhance fullcycle returns. Our focus remains on execution and capital discipline, and we generated more than $250 million in organic free cash flow in the second quarter. We remain on track to deliver a strong rate of change in our key financial performance metrics highlighted by an expected annual increase of more than 70 percent in corporate cash return on invested capital (CROIC) at current strip prices.’

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FUTURE ENERGY AFRICA

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The exhibition and conference provides an intensive tour d l’afrique, revealing insights on the issues confronting Africa’s future commercial, business and socio-economic trajectories.

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500

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250

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30+

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50+

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FOR EXHIBITION & SPONSORSHIP ENQUIRIES Brad Hook Commercial Director sales@futureenergyafrica.com +27 11 783 7250

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CALL FOR PAPERS FOR THE CENTRES OF TECHNICAL EXCELLENCE (COTES) NOW OPEN

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Submit your technical abstracts at: www.futureenergyafrica.com/cfp before Thursday 26 April 2018 ORGANISED BY:

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www.orientenergyreview.com

Orient Energy Review Vol 8 No.08 August 2018 37

38 Orient Energy Review Vol 8 No.08 August 2018

www.orientenergyreview.com

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Orient Energy Review Vol 8 No.08 August 2018 39

With Chevron’s approach to Nigerian Content,

everyone benefits...

40 Orient Energy Review Vol 8 No.08 August 2018

At Chevron Nigeria Limited, ours has been an unwavering commitment to Nigerian Content Development.

Ever before the enactment of the NOGICD Act, we have been giving preference to Local Community Contractors, empowering local competencies through training and facilitating partnerships between Nigerian businesses and foreign experts to build capacity. We have also sustained these businesses through work scope reservation. Today, we are happy to see several benefitting Nigerian businesses and thousands of technical professionals thriving in the Oil and Gas industry. This is proof that with CNL, when it comes to Nigeria Content, everyone benefits. www.orientenergyreview.com