Majorwaves Energy Report July 2020 by majorwavesenergyreport

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J U LY 2 0 2 0 VOL 3 NO 7

MAJORWAVES ENERGY REPORT

LOCAL CONTENT

NGN2,000 10 Ghc US $5.00

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SOCIAL INVESTMENT

INFRASTRUCTURE

Nigeria’s Odyssey To Cuuing Production Cost Per Barrel Nigerian Content Intervention Fund Increased To $350m Our scorecard on Social Investments Shell– Nigeria, Uganda, Others Explore Regional Integration Post Covid-19 Mammoet Terminal Crane (MTC 15) Now Operational at LADOL Total Secures Africa's Biggest Debt Financing With LNG Deal

Majorwaves Energy Report JULY 2020, Vol 3 No 7

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Majorwaves Energy Report JULY 2020, Vol 3 No 7

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CONTENTS J U LY 2 0 2 0 VOL 3 NO 7

MAJORWAVES ENERGY REPORT

LOCAL CONTENT

NGN2,000 10 Ghc US $5.00

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SOCIAL INVESTMENT

INFRASTRUCTURE

Nigeria’s Odyssey To Cuuing Production Cost Per Barrel Nigerian Content Intervention Fund Increased To $350m Our scorecard on Social Investments Shell–

Mammoet Terminal Crane (MTC 15) Now Operational at LADOL

Marginal Field bid round enhances local content capacity, impacts Nigeria’s economy- Engr. Auwalu

Nigeria, Uganda, Others Explore Regional Integration Post Covid-19 Mammoet Terminal Crane (MTC 15) Now Operational at LADOL Total Secures Africa's Biggest Debt Financing With LNG Deal

Contractor Hands Over Completed NCDMB 17-Storey Headquarters

Majorwaves admitted founding member of Diversity SWG, NCCF of NCDMB

Nigeria’s Odyssey to Cutting Production Cost per Barrel

27 34 ...my initial presence was met with huge applause and cheer from the men on the rig floor when I was transported” Engr. Elizabeth Rogo

LEKOIL inks infrastructure agreements for Otakikpo development

Nigeria, Uganda, Others Explore Regional Integration Post Covid-19

Sylva commends Saudi Arabia over output cut

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Majorwaves Energy Report JULY 2020, Vol 3 No 7

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Nigeria will cut production costs to $10 per barrel by the end of 2021, -Mele Kyari Group Managing Director, NNPC This weighty statement is a game changer for the industry as the state-owned oil company is bent on making the venture profitable. It has led to reviews of several contracts against the backdrop of recent realities in the global market. The service companies, particularly the indigenous ones are the worst hit. Publishing audited report for Nigeria National Petroleum Corporation (NNPC), the first in over four decades, is a sign of the current administration’s resolve to become transparent. Prior to that startling revelation, the national oil company ranks very high amongst the most opaque public firm, globally. It’s a no brainer to say it won’t be business as usual, henceforth. Nigerian Content Development and Monitoring Board (NCDMB) has continued to elicit praises from observers locally and internationally. The completion of its ultra-modern tower, the transparency with its disbursed Nigerian Content Intervention Fund (NCIF) worth US$200 million, the pursuit and eventual approval of another US$350 million to the fund, the partnerships for proliferation of modular refineries and push for mainstreaming female gender in the oil industry all point to traits of an efficient agency. Flip through for more. Shell companies in Nigeria have put out a scorecard for their social investment activities. Find out what it looks like. Our team at Majorwaves Energy Report recently organised its first webinar in an attempt to contribute to nation building and development across the continent of Africa. It was themed “Optimising Local Content through Regional Integration in a post Covid-19 Africa”. The reception from attendees across Europe, America and Africa was commendable and we intend to keep having important conversations via our online platforms. We look forward to your feedback and engagements on social media.

Best regards,

Jerome Onoja

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Editor’s Note Publisher Joshua Bretz Managing Editor Jerome Onoja Editor Margaret Nongo-Okojokwu Business Development Stanley Etim Taiwo Olamilekan Amicable Aluu Production Solomon Obande Toma Stephen Research Analyst Simon Olanipekun Correspondents: Lagos Ikenna Omeje Abisoye Vincent Emeka Enunwah Daniel Terungwa Chukwunonso Mordi Port Harcourt Arit Dan Stella Odogu US Omaya Joko UK Kunle Kazeem

Majorwaves Energy Report is published by Majorwaves Communications, 25B, Adebayo Doherty Street, Lekki Phase 1. Lagos Phone: +2349035477966 Email: info@majorwavesenergyreport.com www.majorwavesenergyreport.com

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INDUSTRY NEWS

NNPC makes public audited accounts for the first time in its history By Ikenna Omeje

he Nigerian National Petroleum Corporation (NNPC) has made public its audited accounts for the first time in its history with the publication of its 2018 Audited Financial Statement (AFS) on its website. The audited account report shows that the National Petroleum Investment Management Services (NAPIMS) reported revenue of N5.04 trillion and a profit of N1.01 trillion in 2018, making it the most profitable NNPC subsidiary in the period under review. That compares with a loss of 1.65 trillion naira in 2017, as its total assets rested at N18.6 trillion with the oil and gas components valued at N14.2 trillion. Commending the national oil company for its transparency, the Nigeria Extractive Industries Transparency Initiative (NEITI) acknowledged that this historic development fulfils a pledge made by the Group Managing Director (GMD) of NNPC, Mallam Mele Kyari, to the management of NEITI at a meeting on August 6, 2019, a pledge which Kyari reiterated on November, 25 2019 during the official visit to Nigeria of Mr. Mark Robinson, the Executive Director of the global EITI. A release by the Direc tor, Communication and Advocacy, NEITI, Dr Orji Ogbonnaya Orji 6

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said that during the August 2019 advocacy meeting, the agency management had urged the then new GMD of NNPC to consider demonstrating his espoused commitment to transparency by making public the corporation’s audited accounts. Kyari acceded to the request on the spot. “We welcome the eventual fulfilment of this important pledge and obligation,” said Waziri Adio, the Executive Secretary of NEITI was quoted as saying. “Given NNPC’s antecedents and its prominent role in the sector and in the country, the publication of its audited accounts is positive, signaling more openness for the oil and gas sector and for Nigeria.” “ W h en co mbin e d with th e monthly reports that NNPC started publishing in 2016, this development marks a sea-change for a national oil company that used to be renowned for opacity,” Adio added. “We urge NNPC to make this a routine practice and to mainstream transparency into all facets of its operations.” NEITI called on NNPC to go further by publishing its previous audited accounts and in open data formats so that the reports can be more accessible to citizens who are the shareholders of the corporation. NEITI also urged NNPC to strengthen and sustain its commitment to data mainstreaming

and systemic disclosure. It would be recalled that after assuming office in July 2019, Kyari held his maiden town hall meeting with staff of the NNPC at the corporation towers in Abuja. The highpoint of the meeting was the presentation of his agenda titled ‘Roadmap to Global Excellence’, which captures the strategic focus of his management. In the roadmap, NNPC operations under his management was to be anchored on Transparency, Accountability and Performance Excellence (TAPE). According Kyari, while the Transparency component of the agenda was aimed at maintaining positive image, share values of integrity and transparency to all stakeholders, the Accountability leg of the campaign would assure compliance with business ethics, policies, regulations and accountability to all stakeholders. On Performance Excellence, he said the idea was to entrench a high level of efficiency anchored on efficient implementation of business processes which would also emplace an appropriate reward system for exceptional performance among the workforce. The publishing of the audited account of the corporation for the first in its history of more than 40 years, ended secrecy surrounding the income and expenditure of the national company.

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INDUSTRY NEWS

Mammoet Terminal Crane (MTC 15) Now Operational at LADOL

arlier in January 2020, L ADOL and Mammoet signed a strategic partnership. The partnership is aimed at expanding LADOL’s capacity for project cargo handling and logistics for industrial sectors in West Africa and enables LADOL to utilize Mammoet’s crane fleet, project cargo handling and heavy lifting expertise along with project management services to provide clients with more comprehensive and cost-effective solutions. True to the partnership agreement, Mammoet supplied LADOL with the heavy lift terminal crane - MTC 15, which has turned LADOL’s quayside into a heavy lift terminal. With a load moment matching a 1,200 ton crawler crane or a large floating sheerleg, the crane enables loads up to 600 tons to be lifted to and from the quay from non-geared cargo vessels. This lifting capacity is ideal for loading and offloading heavy items such as columns, vessels, reels, engines, and many other project cargoes. The crane has been installed at the LADOL quayside in May 2020 and is the biggest installed shore crane of its kind in the region. To support Ladol’s quayside operations Mammoet has earlier in the year already mobilized a 250-ton crawler crane in addition to the MTC 15.

L ADOL’s Executive Direc tor Business Development, Mr. Jide Jadesimi said “The establishment of a long-term relationship between Mammoet and L ADOL is an extremely exciting and significant development in terms of massively increasing local capacity. Thereby attracting general fabrication and complex construction projects, which are increasing in frequency across the Sub Region, to Nigeria.” The Executive Director also described the process as a combination of teamwork, and dedication from L ADOL and Mammoet staff. “It was with great excitement that the Mammoet Terminal Crane (MTC 15) arrived at Ladol in sections as a Meccano. LADOL and Mammoet personnel worked together and assembled the Crane at the quayside.” “This was no simple task and required precision when each component was connected and assembled. However, in no time at all and with the assistance of cranes, forklifts and a team of dedicated personnel the MTC 15 was assembled.” “LADOL’s business is driven by the United Nations Sustainable Development Goals and this

partnership with Mammoet is in line with this dedication – bringing more partnerships, jobs and education and prosperity to Nigeria by taking Nigeria one step closer to being the Industrial Hub for Africa.“ Commenting on the partnership, Michel Bunnik, Commercial Director of Mammoet Middle East and Africa said, “Combination of Mammoet’s MTC crane and LADOL’s excellent infrastructure, such as 200m quay with 8.5m draft, warehousing, fabrication and assembly yards, the base can now be considered as a fully independent heavy lifting terminal. It can support the largest industrial projects in the world, solving cargo handling and logistics challenges of project owners, EPCs and freight forwarders, as they can get heavier things in and out of Lagos more efficiently than they could before.” “The MTC-15 crane is ideal for loading and offloading heavy breakbulk cargo, without having to reinforce the quay, making it possible to bypass other Apapa quays and transport the cargo and materials directly to sites; this saving a considerable amount of time and resources.” Michel added.

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INDUSTRY NEWS

Marginal Field bid round enhances local content capacity, impacts Nigeria’s economy- Engr. Auwalu

he announcement of marginal field bid round in June 1st compelled the operators and stakeholders in the industry longing for explanation on how the process will be carried out by the country’s regulator. Foremost petroleum industry association, Nigeria Association of Petroleum Explorationist (NAPE) whose members operate mostly at the upstream, invited DPR Director, Engineer Sarki Auwalu to give more insights on the bid round that is ongoing. The regulator of Nigeria’s petroleum industry across the value chain, gave a vivid picture of the bid round. REGULATORY FRAMEWORK OF THE MARGINAL FIELD Engr. Auwalu spoke fur ther disclosing that the national aspiration of oil and gas sector is the driver of marginal field development. The country aspires to have 40million barrels and grows its reserve of gas to about 220 trillion cubic feet (tcf) by 2030. The target for 200 tcf by 2020 was achieved in 2019.

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The capacity is to produce up to 300million barrels. The thought of government in midstream is to monitise gas, eliminate gas flaring and domestic sufficiency. This will be done through power generation, commercial activities in terms of gas-based industries and increase crude refining capacity. For the downstream, the government intention is to achieve price freedom, optimum product and supplies sufficiency. There will be alternative period in terms of Compressed Natural Gas (CNG) and Liquefied Petroleum Gas (LPG), including other related fuels. These are mainly drivers for marginal field development. The Chief Regulator said, technically, a marginal field is any field with reserves that is reported annually to the DPR and has remained unproduced for a period of over 10 years. These fields are not considered by license holder for development. Also, fields that have had exploratory well drilled and are known as oil or gas for more than 10 years. Fields that present lease holders considered for farm out due

to portfolio rationalization. He made clarification that such fields which the “president may from time to time identify as marginal based on constitutional right and provision of Petroleum Act.” In the fiscal regime regulation of 2005, the president reserves the right to give or withhold concept of farm out of marginal field. The federal government also reserves the right to withdraw award should any awardee fails to comply with applicable terms. OBJECTIVES OF MARGINAL FIELD PROGRAMME The entire objective of marginal field programme is a win-win value proposition for government, Nigerians and foreign investors. It is multifarious range of objectives to achieve development of marginal field. Principally, the indigenous participation is being promoted for revenue generation. Production increases, technical capacity built and oil and gas reserves growth. Capital inflow encouraged while synergy and partnership promoted.

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LOCAL CONTENT

Contractor Hands Over Completed NCDMB 17-Storey Headquarters

Managing Director of Megastar Technical and Construction Company, Arch. Harcourt Adukeh handed over the keys to the Executive Secretary of NCDMB, Engr. Simbi Kesiye Wabote represented by Director, Planning, Research and Statistics, Mr. Patrick Daziba Obah

h e N ige ria n C o nte nt Development and Monitoring Board (NCDMB) on Monday took formal possession of its newly completed 17-storey headquarters building from the major contractor of the project, Megastar Technical and Construction Company (MTCC). The symbolic handover of the keys to the edifice was held at the facility located along Ox-Bow Lake Road, Swali, Yenagoa, Bayelsa State. The event has paved the way for the formal commissioning of the building by President Muhammadu Buhari expected to hold soon. The handover and commissioning will be followed by gradual relocation of NCDMB personnel and operations from the offices at Opolo and Onopa, both in Yenagoa to the new building. The Managing Director of Megastar Technical and Construc tion Company, Arch. Harcourt Adukeh handed over the keys to the Executive Secretary of NCDMB, Engr. Simbi Kesiye Wabote. The Nigerian Content Headquarters was conceived in the early years of the Board, but formal construction commenced in 2015. The entire project comprises 17 floors office complex, which was christened Nigerian Content Tower, 4 storey multi-level car park and a 1000-seater capacity conference hall

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and other ancillary facilities. In his comments, the Executive Secretary applauded the technical competence of the main contractor, and other sub-contractors, highlighting that they delivered a world class project within the specified timeline. He confirmed that the Board utilized the project successfully to create jobs, impact skills, procure local goods as well as change the landscape of Bayelsa State. Represented by the Director, Planning, Research and Statistics, Mr. Patrick Daziba Obah, he commended the safety records achieved on the project, particularly for the fact that there was no Loss Time Injury (LTI). He stated that “beyond just giving us a beautiful edifice, the project safety statistics have been very impressive for a building of this size.” He described the completed NCDMB Headquarters as a clear demonstration that Nigerian companies can deliver complex projects to the desired quality level, cost and schedule, if given opportunities. He hinted that the handover marked the beginning of another key phase in the activities of the Board as it will require a step up in its assets management capabilities. Arch. Harcourt Adukeh stated that the project employed over 600 Nigerians at the peak of

construction, with over 70 percent of them drawn from Bayelsa State. He expressed delight that a good number of the workers were women and they had been mobilized to other construction sites and would also work for Megastar in forthcoming projects, in view of their proficiency and dedication. He extolled the Executive Secretary of NCDMB for deploying his rich technical background and projects experience, which helped to ensure the success of the project. “We would say that we are highly privileged to have a client like NCDMB, their timely response and unalloyed support paved way for the success we have recorded”, he said. He confirmed that the company executed a total of 4,916,223 manhours on the project and worked for 1,542 days on site without any Loss Time Injury (LTI). While appreciating the consultants that worked on the project, he pleaded that Nigerian contractors should be given more opportunities as they can deliver projects with bigger expectations. He also thanked President Muhammadu Buhari and the Minister of State for Petroleum Resources, Chief Timipre Sylva, for facilitating timely approvals which contributed immensely to the delivery of the project.

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LOCAL CONTENT

US$50m Nigerian Content Research & Development Fund approved

Members of Governing Council for the Nigerian Content D e v e l o p m e n t a n d Monitoring Board (NCDMB)

he Governing Council of the Nigerian Content Development and Monitoring Board (NCDMB) has approved the establishment of a US$50 million Nigerian Content Research & Development Fund (N CR& D F ). At the N CD MB Governing Council meeting which held on June 16, 2020 under the chairmanship of the Minister of State for Petroleum Resources, Chief Timipre Sylva, the Council approved the deployment of $50million Research Fund for sustainable funding of NCDMBâ&#x20AC;&#x2122;s mandate on Research & Development as enshrined in Sections 37 to 39 of the Nigerian Oil and Gas Industry Content Development (NOGICD) Ac t 2010, which empowers NCDMB to superintend over R&D activities in the oil and gas industry. NCDMB is implementing the Research and Development Roadmap to institutionalize a robust R&D ecosystem that will lead to continuous development of technology, materials and process for industry application from indigenous research efforts. A major success pillar is closing systemic weakness of inadequate funding architecture for R&D

activities in the Oil and Gas industry. Nigeria spends about 0.2% of its Gross Domestic Product (GDP) on R&D and this indicates a poor commitment to R&D, resulting in over-dependence on foreign technology for critical economic development activities, including oil and gas operations. The NCDMB R & D Fund is expected to close this gap and will be applied in four broad Intervention areas, namely-Research (basic and applied), establishment of Centers of Excellence in Academic and Research Institutes, Sponsorship of commercialization of Research and Sponsorship of endowment of professorial chair. The operating model has been designed to ensure transparent and well-focused application of the Fund and it includes a Governance structure to leverage experienced researchers and industry experts in the decisionmaking process of selecting activities to be funded from the NCDMB R&D Fund. The Fund will be domiciled in a TSA Sub-Account in CBN. The NCDMB will put in place an outcome focused performance metrics that will measure success in the application of the Fund

and form part of the reporting template to the Governing Council on an ongoing basis Following the Governing Council approval, the Nigerian Content Research and Development Council (NCRDC) held a meeting on June 25 and revalidated the identified focus areas for the utilization of the Fund. The council also decided that the Fund would also be deployed in developing and implementing a Communication strategy for effective dissemination of NCDMB R&D interventions as part of stakeholder management process. The NCRDC also approved the institution of a Performance management strategy to track progress and ensure application of the R&D fund in line with the key performance indicators (KPI) approved by the Governance Council. It also approved the list for distribution of the smart gas leak and smoke detector alarm device for field trial. The product which was conceptualised by Amal Technologies is a research prototype sponsored by NCDMB The scope of NCDMBâ&#x20AC;&#x2122;s R&D regulatory role includes development of capabilities for Research and Innovation in Nigeria including facilities,

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LOCAL CONTENT equipment, personnel and processes, review and approve R&D plans of operating companies, monitor implementation of R&D projects to ensure the execution of Nigerian content requirements of domiciliation within Nigerian R&D Centers. Other roles include tying R&D spend to addressing industry technology, material, and process challenges

and facilitating commercialization of research breakthroughs and Facilitating the deployment of successful products of research in industry Operations. To achieve its R&D mandate NCDMB developed the R&D framework anchored on seven (7) policy thrust, including focus on market driven research, establishment of world class Research and Development

(R&D) Centers of Excellence, establishment of Research and Development Council and provision of sustainable funding to support Research and Development. Other areas of focus include development of stakeholder collaboration matrix for Research and Development (R&D), provision of enablers for commercialization of research breakthrough and facilitation of acceptance and utilization of products of research by end users.

Nigerian Content Intervention Fund (NCIF) increased to US$350m

h e G o v e r n i n g C o u n c il of the Nigerian Content Development and Monitoring Board (NCDMB) has approved the expansion of the Nigerian Content Intervention Fund from US$200 million to US$350 million. The enlargement of the Fund by US$150 million was part of the decisions taken at the recent NCDMB Governing Council meeting, which held virtually on June 16, 2020. The meeting was chaired by the Minister of State for Petroleum Resources, Chief Timipre Sylva, who is the Chairman of the Council. The Council approved that US$100 million from the additional funds would be deployed to boost the five existing loan products of the NCI Fund, which include manufacturing, asset acquisition, contract financing, loan refinancing and community contractor financing. Similarly, the Council also approved that US$20 million and US$30 million respectively should be deployed to two newly developed loan product

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types – the Intervention Fund for Women in Oil & Gas and PETAN Products, which include Working Capital loans and Capacity Building loans for PETAN member companies. The NCI Fund was instituted in 2017 as a US$200 million Fund managed by the Bank of Industry (BoI), engaged to facilitate on-lending to qualified stakeholders in the Nigerian Oil and Gas industry on five loan product types. The NCI Fund is a portion of the Nigerian Content Development Fund (NCDF), aggregated from the one percent deduction from the value of contracts executed in the upstream sector of the oil and gas industry. About 94 percent of the NCI Funds has been disbursed to 27 beneficiaries as at May 2020. NCDMB has received new applications from 100 companies for nearly triple the size of the original fund. Guidelines for the NCI Fund provide that beneficiaries of the Manufacturing Loan and Asset

acquisition Loan can access a maximum of US$10million respectively. Also, beneficiaries of Contract finance Loan can access US$5million while beneficiaries of the Loan Re-financing package can access US$10million, with beneficiaries of the Community Contractor Finance Scheme limited to N20million. The maximum tenure for all loan types is 5 years and applicants cannot have two different loans running simultaneously. At the onset of the Fund, the applicable interest rate for the various loan types was pegged at eight (8) percent, except the Community Contractor Finance Scheme, which was five (5) percent. However in April 2020 as part of NCDMB’s response to mitigate economic impact of the coronavirus pandemic, the Governing Council approved reduction of the interest rate from eight (8) to six (6) percent per annum for all four of the loan products. The Board also extended the moratorium for all loan products.

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LOCAL CONTENT

NCDMB refutes reports of Petroleum Minister demanding $20m for Bayelsa elections. - Describes it as spurious, malicious, and a piece of fake news.

Simbi Wabote & Timpre Sylva

he management of the Nigerian Content Development and Monitoring Board (NCDMB) has reacted to claims by an online medium that the Minister of State for Petroleum Resources, Timipre Sylva, demanded the sum of $20 million from the agency to fund Bayelsa re-run elections. This is contained in its press statement released on June 19, 2020. The NCDMB while denying the allegation described it as spurious, malicious and a piece of fake news. The board also pointed out that the sponsors of the lies were bent on tarnishing the good image of the NCDMB, and the reputations of the Executive Secretary, Engr. Simbi Wabote, and the Minister of State for Petroleum Resources, Timipre Sylva. According to the statement by NCDMB, “The attention of the management of the Nigerian Content Development & Monitoring Board (NCDMB) has been drawn to a spurious and malicious story published by an online mediumPOINTBLANK NEWS, titled - Sylva

demands $20 Million from Local Content Board Boss to fund Bayelsa Re-Run Elections. “Ordinarily, the Board would have ignored this fake news, especially one planted in a notorious online publication. However, we are constrained to react because sponsors of the wicked tissues of lies are intent on tarnishing the good image of the Board and strong reputation of the Executive Secretary, Engr. Simbi Wabote and that of the Honourable Minister of State for Petroleum Resources, Chief Timipre Sylva and portray the Board as partisan.” The board believes that the fabrication was sponsored by those trying to contest for senatorial elections in Bayelsa West Senatorial District, who were in the habit of raising wild allegations to lure NCDMB into local politics.

* “There is no iota of truth in that story. It is completely mendacious and a figment of the imagination of those behind it. * The current Minister of State for Petroleum Resources, Chief Timipre Sylva has never demanded nor suggested to the Board and its leadership to fund any political activity in Bayelsa or any part of the country, however described. * The Nigerian Content Development Fund (NCDF) was instituted for funding capacity development in oil and gas activities and cannot be applied for any other purpose except that expressly stated in the NOGICD Act. * It is preposterous to allege that the Minister is demanding $20m from NCDMB to fund elections, whereas all funds belonging to the Federal

While trying to clarify issues, the NCDMB stated the following:

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LOCAL CONTENT * Government are in the custody of the Central Bank of Nigeria and NCDMB’s funds cannot be withdrawn except for legitimate purposes consistent with its mandate. Thus it is absurd and unreasonable to contemplate or imagine that the Board can withdraw any money from the NCDF except for any of the purposes it was instituted under the Act. * The status of NCDMB finances are in the public domain and can be verified by anyone or group that is so interested; and that is why the Executive Secretary has consistently announced the balance sheet and utilization of NCDF at every oil and gas fora.

the Honourable Minister of State for Petroleum Resources, to score cheap political points and create disaffection. Going forward, the Board will not hesitate to take appropriate legal action against any individual or media organizations that publish materials that are spurious, malicious and libellous.”

NCDMB signs investment agreements with DUPORT Midstream, ERASKON on energy park, oil blending plant ..projects to create 1500 jobs

* Contrary to the wicked suggestion in the story, NCDMB has never awarded any contract to the Minister or any company connected to him and neither has the Board awarded contracts for shore protection in Brass LGA of Bayelsa State because it is clearly outside our statutory mandate. * It is pertinent to state that NEITI declared NCDMB as the most transparent federal oil and gas agency and the Board achieved this lofty feat because our operations are always compliant with the government’s financial regulations. * NCDMB’s financial processes and operations are always open and transparent. The Board and its leadership have never been manipulated and cannot be influenced to favour individuals or political parties, no matter how highly placed because what the Board does must be in line with its mandate in the NOGICD Act. * One would have expected POINTBLANK NEWS, if it were a credible media outfit, to conduct a thorough investigation with a view to validating the veracity of the story before going to press. But in this case, it was a mere conjecture by the authors to please their sponsors. * From the foregoing, it is obvious that this story was calculated to malign the Board, its leadership and

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h e Nigerian Content Development and Monitoring Board (NCDMB) on Friday signed equity investment agreements with two companies-Duport Midstream Company for the establishment of an Energy Park in Egbokor, Edo State and Eraskon Nigeria Limited, for a lubricating oils blending plant in Gbarain, Bayelsa State. The Board’s investments will catalyse industrialization, with the two partnerships expected

to generate about 1,500 direct, indirect, and induced employment opportunities, in addition to several other spin-off economic activities that will be developed where these projects are located. The planned Energy Park comprises a 2,500bpd modular refinery, 30MMscfd gas processing facility, which will include a CNG facility and 2MW power plant. Similarly, the lubricating oils blending plant will be the first of such plant in Bayelsa State and will have the capacity to produce 45,000liters per day and enhance

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LOCAL CONTENT

the availability of engine oils, transmission fluids, grease and other products. The Executive Secretary NCDMB, Engr. Simbi Wabote signed the Shareholders Agreements and Share Subscription Agreements at the Board’s liaison office in Abuja while Dr. Akintoye Akindele, Managing Director of Duport Midstream Company and Mr. Maxwell Oko, Managing Director of Erakson Nigeria Ltd equally signed for their firms respectively. In his remarks, the Executive Secretary explained that the investments were part of the approvals granted recently by the Board’s Governing Council chaired by the Minister of State for Petroleum Resources, Chief Timipre Sylva. He clarified that the investments were coming under the Board’s commercial ventures program and was in sync with the Board’s vision to serve as a catalyst for the industrialisation of the Nigerian oil and gas industry and its linkage sectors. Wabote indicated that the Duport partnership is in furtherance of the Board’s strategy to enhance in-country value addition by supporting the establishment of processing facilities close to marginal or stranded hydrocarbon fields. He stressed that the recent drastic drop in the prices of oil had made it imperative to have refining capacities to reduce if not eliminate cases of stranded oil cargoes without buyers. Recalling the

Board had already had partnered with the Waltersmith Group and Azikel Petroleum Company for the establishment of modular refineries in Imo and Bayelsa State respectively, he underscored the emerging investment opportunity in developing capability and capacity in-country to maintain the various kits in the modular refinery on a sustainable basis. According to him, ”we do not want a situation where the modular refineries are folding up one after the other in a few years due to lack of technical support or inability to secure critical parts.” He stated further that NCDMB have commenced discussions with some Original Equipment Manufacturers on how we domicile the fabrication and assembly of modular refineries in-country. ”Our strategy is to begin to claw back bits and pieces of the various components of the modular refinery untill we fully domesticate the manufacturing of a large percentage of the kits in-country,” he said. Giving details of the partnership with Eraskon, the Executive Secretary pointed out that the blending facility had the capacity to be deployed for the production of other chemicals and reagents. “The packaging section can also be used for generating additional incomes for the business and for creation of employment,”he said. He said the Board was excited at the prospects of these partnerships

in jobs creation, value retention, petroleum products availability, utilisation of our abundant gas resources and in the development of in-country capability. In his comments, Dr. Akintoye Akindele conveyed the company’s excitement to partner NCDMB in the development of the Energy Park and assured that the project would add value to the nation’s natural resources and create wealth and social amenities for communities. He added that the Energy Park targets to create over 1000 jobs and impact 10,000 families, and indicated that the modular refinery would produce a combination of Naphtha, diesel, kerosine and HFO, otherwise known as residual fuel oil. He pledged the company’s commitment to exceed expectations and help increase government’s revenue, reduce dependence on imported petroleum products Similarly, Mr. Maxwell Oko noted that Eraskon was delighted to contribute to the industrial development of Bayelsa State and the Niger Delta. He said the company would benefit from operating from the same industrial corridor with Shell Gas Gathering facility, Azikel Refinery and NCDMB projects at Polaku. He promised that the company would be a good story of NCDMB partnership and the project would be completed in two years.

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LOCAL CONTENT

Majorwaves admitted founding member of Diversity SWG, NCCF of NCDMB By Mordi Chukwunonso

Margaret Okojokwu, Editor Majorwaves Energy Report, and other panellists at a function

argaret Okojokwu, representing Majorwaves Energy Report, alongside six other women have been admitted as founding members of the maiden Diversity Sectorial Working Group (SWG) of the Nigerian Content Consultative Forum, NCCF. The group was officially inaugurated by the Executive Secretary of the NCDMB, Engr Simbi Wabote in a virtual engagement meeting with members of the entire NCCF groups. Other members of the newly created SWG include Alero Omosode of Seplat Petroleum Development Company, Patricia Simon Hart of Aftrac Limited, Pricilla Thorpe-Monclus of Mrs Oil Limited, Audrey Joe-Ezigbo of Falcon Oil and Gas Corporation Limited, Michele Aiyegbusi of SLC Resources Limited, Nkechi Obi of Techno Oil Limited, Anita Okuribido of Similling Simon Limited and Oladunni Owo of Blackgold Authorities. Inaugurating the Diversity SWG is part of the Board’s commitment which was made during the NCCF Retreat in 2019. It had also promised to set up special funding in support of women participation in the oil and gas industry. The Executive Secretary stated that the creation of the diversity SWG was a product from the Women in Oil & Gas workshop organized by the Board in October 2019. He hinted that the aim of the group is to improve the participation of women in the industry

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as well as to promote all-inclusive gender policies. He reiterated that by mainstreaming women in the oil and gas industry the sector engender greater growth of the economy. In his words, Wabote said: ”I am convinced that if we mainstream women in the oil and gas industry, we are going to achieve a lot.” Wabote announced that a portion of the Nigerian Content Intervention Fund (NCIF) domiciled with the Bank of Industry will set aside to support women operating in the oil and gas industry. Stressing that section 57 and 58 of the NOGICD Act 2010 supported the creation of a robust platform for sharing information and to serve as ‘think-tank’ to develop policies and implement frameworks that will achieve sustainable development of the Nigerian content in oil sector, Wabote charged the members of the two newly created sectorial groups to be proactive and develop recommendations that the Board can implement. Along with the Diversity group, the Executive Secretary inaugurated the Gas Value Chain SWG whose members include Lanre Runsewe from Rungas Industries Limited; Nuhu Yakubu, representing Nigeria LP Gas Association (NLPGA); Taji Ogbe, representing Nigeria Gas Association (NGA) and Bassey Essien, representing Nigerian Association of LPG Marketers. Other members are Frank Ibi from Nigeria Gas Company Limited (NGC); Charles Epelle from the Nigeria Liquefied Natural Gas

Company (NLNG) and Mohammed Ahmed from the Nigeria Gas Marketing Company Limited. Giving reasons for the inauguration of the Gas Value Chain Group, the Executive Secretary stated that the Board believes that the future of fossil fuels is in maximizing gas development and utilization. He noted that Nigeria has about 203 trillion cubic feet (TCF) of gas reserves and recalled that the Honourable Minister of State for Petroleum Resources, Chief Timipre Sylva had at the beginning of the year declared 2020 as the Year of Gas. Prior to this, there had been 10 sectorial committees. They include; Information and Communication Technolog y, Education and Training, Engineering, Fabrication, Essential Services, Shipping and Logistics, Finance, Legal Services and Insurance, PETAN, Material and Manufacturing and Multinationals & Indigenous Producers. The chairpersons for this groups include: Mr Attanda Deremi, Dr Mayowa Afe, Engr. George Okoyo, Dr Timi AustenPeters, Mr Michael Oluwagbemi, Mr Mina Oforiokuma, Mr Robert Ade-Odiachi, Mr Matthew Oweleke, Chief Vassily OyeBarberopoulas, and Mr Anthony Attah. Margaret Okojokwu is the editor of Majorwaves Energy Report. She is a public speaker, a public relations practitioner and a marketing communications expert. Margaret is also a Mandela Washington Fellow with international exposures and multiple paper presentations at global events. As a social entrepreneur, she is passionate about local content development in relation to capacity building, human capital development, advocacy for resource host community relationship and conflict resolutions across Africa. She has over ten years of experience in the media industry and has largely focused on energy reporting. The NCCF, is an integral part of the NCDMB established by the Nigerian Oil and Gas Industry Content Development (NOGICD) ACT of 2010. It is set up to provide a robust platform for information sharing on upcoming projects and local capabilities relating to the Nigerian oil and gas industry.

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SOCIAL INVESTMENT

Our scorecard on social investments – Shell

hell Companies in Nigeria (SCiN) including Shell Petroleum Development Company Limited (SPDC), Shell Nigeria Exploration and Production Company (SNEPCo) and Shell Nigeria Gas (SNG) have contributed in various ways to the development of the economy. Besides contributions through payment of taxes and royalties, among others, they have also through their social investment projects, helped to impact in positives ways the lives of their host communities and Nigerians. In their 2020 Shell Briefing Notes – an annual scorecard of the Royal Dutch oil giant, they listed what they did in 2019 and beyond as responsible corporate citizens. Nigeria is a thriving and vibrant country, offering opportunities for people to improve their livelihoods. These opportunities are mirrored by the scale of the challenges to provide affordable energy, education, healthcare and conditions for local businesses to grow. To enable the citizens attain these goals, Shell has in various ways under its social investments initiatives, created projects that helped Nigerians and communities to grow.

In its 2020 Briefing Notes, the oil giant said its operating arms in Nigeria – SPDC, SNEPCo and SNG, in 2019, made direct social investments of $40 million in Nigeria, making the country the largest concentration of social investment spending in the Shell Group. These investments, the company said, include access to affordable healthcare, supporting education, enterprise support, accelerating access to energy, assistance and safety. The Shell Nigeria Briefing Notes gives update on activities and programmes undertaken by several Nigerian companies either wholly-owned by Shell or in which Shell has an interest. Together these are referred to as the Shell Companies in Nigeria (SCiN). SCiN comprises SPDC – a wholly-owned Shell subsidiary that operates an unincorporated joint venture (SPDC JV) in which SPDC holds a 30 per cent interest; two other wholly-owned Shell subsidiaries SNEPCo and SNG, and the Nigeria Liquefied Natural Gas (NLNG) Limited; an incorporated joint venture in which Shell has a 25.6 percent interest.

SCiN undertakes two types of social investment activities – Direct social investment across Nigeria and Community-driven development programmes and initiatives in the Niger Delta. Direct social investment focuses on community and enterprise development, education, community health, access-to-energy, road safety and biodiversity, which was added in 2018. Community-driven development programmes and initiatives in the Niger Delta focus on various themes as determined by benefitting communities and delivered through a Global Memorandum of Understanding (GMoU). There are 39 active GMoUs in Abia, Bayelsa, Delta, Imo and Rivers States. According to the Brief Notes, Shell Companies in Nigeria have invested in healthcare and education initiatives in Nigeria for decades and they continue to support a range of programmes. In 2019, three new GMoUs were deployed and 10 GMOUs renewed. The GMoUs provide a secure five-year funding for communities to implement development projects of their choice. GMoU projects cover community health,

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SOCIAL INVESTMENT education, enterprise development and social infrastructure, such as improved water and power supply, and sanitation. Since 2006, a total of $252 million has been disbursed to communities through these GMoUs. It also noted that since 2010, more than 27,000 babies have been delivered safely at Obio Cottage Hospital, a secondary health care centre in Port Harcourt, while the Community Health Insurance Scheme was also launched in 2010 at the Hospital.

According to the Briefing Notes, Shell continues to work with key stakeholders to achieve universal health coverage by increasing access to health and the uptake of services in the communities. The SPDC Joint Venture (JV) and SNEPCo support 20 healthcare centres and signature intervention projects throughout the country, which include Health-InMotion community care programme, Community

Promoting innovation

Health-in-Motion (HIM) is a mobile health outreach programme that takes free medical services to where people live and work. Funded by the SPDC JV and SNEPCo, it reaches an average of 50 communities annually. In 2019, HIM services benefitted 27,490 individuals in Imo, Bayelsa, Delta, Rivers and Ogun States. Since its launch in 2010, more than 667,000 people have benefitted from the programme. The Community Health Insurance Scheme (CHIS) is a partnership between SPDC, Rivers State Government and local communities. The programme aims to provide affordable, quality healthcare to the people of Rivers State. CHIS was launched in 2010 at Obio Cottage Hospital, a secondary health care centre, just a short walk from the SPDC JV offices in Port Harcourt. CHIS costs individuals $30 per year and covers about 95 per cent of people’s health care needs. Since 2010, more than 67,000 people have been enrolled.

In 2018, Nigerian Yolo Bakumor Smith, CEO of De-Rabacon Plastics, won the first-ever Shell LiveWIRE Top Ten Innovators Awards for his business. De-Rabacon is a Nigeriabased plastic recycling and waste management Solution Company that recycles end-consumer plastics to viable commercial products such as pavement blocks, buckets, cans, and carpets. “There is often a paper-thin line between success and failure in business, especially for a start-up. The training, support systems and valuable networks I have gained over the last five years courtesy of Shell LiveWIRE, have gone a long way to ensure that my business start-up, De-Rabacon Plastics is thriving. “Shell’s approach to supporting local enterprises to grow and excel is enabling us to scale up our business and focus on designing eco-friendly, energy-efficient and affordable products. Today, my organisation employs 16 people and has recycled over 800,000 tonnes of plastic waste. We plan to achieve two million tonnes by the end of 2020,” Yolo said. Access to affordable healthcare Shell has supported community health programmes in Nigeria since the 1980s with equipment and pharmaceutical donations, emergency care and screening services, hospital maintenance and focused interventions on HIV/ AIDS, malaria, cancer and vision care. Currently, Shell seeks to increase access to health services, introduce health insurance schemes and strengthen health systems.

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Health Insurance Scheme

In 2019, nearly 8,500 new clients registered. The hospital has also seen an increase in the uptake of services. For example, the average number of patients using the facility increased from about 600 at inception to about 7,700 per month in 2019, making Obio one of the most utilised health facilities in the region. This successful pilot has now been expanded to three other locations including the Oloibiri Health Programme (OHP), highlighting the possibility for extended healthcare coverage in Nigeria. The Oloibiri Health Programme is a Shell-sponsored local government initiative in the Ogbia area of Bayelsa

State. It is designed to improve health outcomes in an innovative and holistic way. The initiative included a full refurbishment of the Kolo General Hospital, which was inaugurated in July 2019. More broadly, the initiative focuses on improving and maintaining health, not just treating illness. It strengthens local healthcare systems by upgrading and integrating facilities, training and supporting local healthcare and community workers and ensuring a reliable supply of medicines. The programme has seen increase in service utilisation to 4,210 patients in 2019 from an average of 833 patients in 2017. It has also provided training for over 130 health workers at community, local and state government levels. In addition to this, it has trained 117 volunteers as facility-based extension workers in house-to-house healthcare. To anchor the sustainability of the OHP, the initiative aims to establish the Oloibiri Health Foundation that will institute the Ogbia Health Insurance Scheme akin to the scheme in place at the Obio Cottage Hospital. The scheme will be launched with a onetime contribution from Shell and the Bayelsa State Government. Supporting education Since the 1950s, the Shell scholarship schemes have supported several thousands of students many of whom are among Nigeria’s business, political and social leaders. In 2019, the SPDC JV and SNEPCo invested $7.8 million in scholarships. Since 2011, the schemes have awarded more than 9,400 secondary school grants and over 6,000 university grants to students. The SPDC JV and SNEPCo invest in the Cradleto-Career scholarship programme, which pays for children from rural communities to attend some of the country’s top secondary schools. The SPDC JV has awarded a cumulative 6 0 0 Cradle-to- Career (c 2c) scholarships in the Niger Delta. In 2014, SNEPCo began offering these scholarships to applicants across the country, and so far, 471 students have benefitted. Since 2010, more than 1,000 students have received scholarships. The scholarships cover

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SOCIAL INVESTMENT the full cost of tuition, travel, accommodation, uniforms, books and laptops. For the best tertiary education, Shell invests in advancing education through university scholarships, student exchange programmes and focused research. Since 2011, the SPDC JV and SNEPCo have awarded more than 6,000 university scholarships. As part of the drive to motivate students and reward the high performers in the University Scholarship Scheme, the highest-achieving students are then also given the opportunity to participate in the SPDC JV Students Industrial Work Experience (SIWE) programme. The SPDC JV also established the Shell Niger Delta Post Graduate scholarship programme which has benefitted 92 students from the region over the last decade. The programme offers one-year scholarships to three UK universities for studies related to the oil and gas industry. The SPDC JV, in collaboration with the University of Benin, funds a Centre of Excellence (CoE) in Geosciences and Petroleum Engineering and in 2017, collaborated with the Rivers State University to set up a CoE, which specialises in Marine and Offshore Engineering. By the end of 2019, over 75 students had graduated from the programmes and over 81 per cent of these graduates are currently employed. Enterprise support Shell works to improve the chances for Nigerians to achieve their ambitions. In addition to providing access to loans to small and medium businesses which could become Shell suppliers and contractors, there is also the LiveWIRE youth enterprise development programme. LiveWIRE was launched in Nigeria in 2003 and provides training and finance to young people between the ages of 18-35 to start or expand their own businesses. In 2019, 140 people benefitted from the LiveWIRE programme, receiving training in enterprise development and management, as well as business start-up grants. More than 7,000 Nigerian youths have so far been trained under

the programme and almost 4,000 young entrepreneurs were provided with business grants. Two Nigerian enterprises were shortlisted in 2019 for the Shell Global Top Ten Innovators Awards â&#x20AC;&#x201C; a global competition, which highlights and rewards businesses that demonstrate excellence in innovation as well as giving entrepreneurs a chance to shine on a global platform. The enterprises were FarmToJuice and Foods Nigeria Limited and Basiled Energy Ventures. FarmToJuice produces juices, processing any waste into livestock feed and using a biogas digester to provide energy. Basiled provides solar lamps, solar installation maintenance and repair and solar battery recycling services. In 2014, Shell extended LiveWIRE to Ogoniland despite the SPDC JV no longer producing oil and gas in the area. Shellâ&#x20AC;&#x2122;s aim was to help raise living standards and reduce crude oil theft in the area through the promotion of sustainable alternative livelihoods. This was in line with one of the recommendations of the 2011 United Nations Environment Programme (UNEP) Report for the restoration of the Ogoni environment. In 2018, 100 Ogoni youths from communities near the Trans Niger Pipeline participated in training with 80 top performing trainees receiving business start-up funding amounting to more than $90,000. In 2019, the Ogoniland programme gave way to a livelihood programme led and executed by the Hydrocarbon Pollution Remediation Project (HYPREP), an agency established by the federal government and to which the SPDC JV contributes funds. The programme will train 1,200 Ogoni women in various skills. Every year Shell LiveWIRE supports thousands of individuals to access the knowledge, skills, networks and resources to turn their business ideas into successful enterprises which provide a sustainable income, create jobs and drive innovation. The purpose of LiveWIRE is to improve opportunities for young people to realise their potential through the creation and development of their own businesses.

For many years, Shell has sustained a culture of care by supporting humanitarian programmes in Nigeria to save lives, especially during crisis and disaster. In 2017, a contribution of more than $3 million to the Mercy Corps and Family Health International programme benefitted over 70,000 displaced persons in north eastern Nigeria. In 2018, SPDC provided relief materials worth $1 million to communities hit by floods in the Niger Delta and two other severely impacted states in the country. In 2019, SNG continued to demonstrate its commitment to road safety in Nigeria by extending existing collaboration with the Federal Road Safety Corps in Ogun State to Rivers State. The campaign has held 26 road safety awareness events and reached more than 5,000 people since its launch in 2007. SNG also held a one-day hydrocarbon training for firefighters from Abia and Ogun States to further strengthen their capability. Since 2018, SPDC and SNEPCo have committed $6 million to the government-driven strategic intervention projects for Internally Displaced Persons (IDP) in Yobe and Borno States. The projects focus on immediate relief and critical support development related to health, water and sanitation, education and shelter. Access to energy Shell aims to provide a reliable electricity supply to 100 million people, primarily in Africa and Asia by 2030. Nigeria features in that vision. Despite its oil and gas resources, Nigeria has one of the highest levels of energy poverty in the world. In addition to investing in Nigeriaâ&#x20AC;&#x2122;s gas development and distribution network, Shell has established All On to boost off-grid supply to homes and small businesses in the Niger Delta. All On, an impact investing company, became operational in 2017 and is an independent Nigerian company that works with partners to increase access to commercial energy products and services. In December 2019, Shell made a significant additional long-term financing commitment to All On.

Humanitarian assistance

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ACROSS AFRICA COVER STORY

Nigeria’s Odyssey to Cutting Production Cost per Barrel By JEROME ONOJA AND AMOS IKE

igeria had consistently battled with the high cost of production for its barrel of crude oil and this plays a major part in depriving the country of the full benefits of its oil exploration activities, especially when meagre profits are recorded even during periods of high crude oil prices. This article explores Nigeria’s renewed interest in upping its earnings from the petroleum industry and the quest to bring down the cost of producing crude oil and gas in the country. Nigeria had for many years, shown little concern to the cost at which it produces its crude oil. This nonchalance towards the cost of production may be as a result of the 20

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fact that the price of the

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commodity had always stayed high at

the international market. But the narratives appeared to have changed, and with the looming global economic downturn, occasioned by the COVID-19 pandemic and the low crude oil prices, Nigeria is beginning to show serious concerns. It is a known fact that among member countries of the Organisation of Petroleum Exporting Countries (OPEC), and also among major oil-producing countries, Nigeria

ranks high for countries with most expensive cost of crude oil production per barrel. According to data obtained from global energy data firm, Knoema.com, in 2014, Nigeria ranked 10th among countries with the highest cost of crude oil production, after countries like United Kingdom, Brazil, Canada, Australia, Equatorial Guinea, Gabon, Malaysia, Thailand and Colombia. However, in 2016, Nigeria was ranked third among countries with the highest cost of crude oil production, behind the United Kingdom and Brazil. Confirming this, the Nigerian National Petroleum Corporation

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COVER STORY It, however, noted then, that the medium to long term target was to bring the cost of production to $17 and $19 for onshore and offshore production respectively. In addition, former Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, had also in August 2017, put the average cost of crude oil production in Nigeria at $32 per barrel, saying that it was making the cost of Foreign Direct Investment very expensive. Kachikwu, who was speaking at the 2017 Annual Conference of the National Association of Energy Correspondents in Lagos, had stated that

Dr. Ibe Kachikwu

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(NNPC), had in August 2016, declared that it had been able to bring down the country’s cost of crude oil production by 70.5 per cent, from $78 per barrel, as at August 2015, to $23 per barrel as at August 2017, thus saving an estimate of about $3 billion per annum. The NNPC said the figure was attained by its subsidiary, National Petroleum Investment Management Services (NAPIMS), by looking at the difference between the $78 and $23, which represents the old and new production cost relative to Nigeria’s current daily average production cost.

the Federal Government was making frantic efforts to bring down the cost to $15 per barrel in order to significantly bring down the cost of FDI.

that produce at the cheapest price would remain in the market while jurisdiction with high cost of crude oil production would not be able to cope with the competing prices. Concerns Furthermore, Kyari, had in an interview in June this year, disclosed that among issues that are of serious concern to the NNPC, was the issue of the cost of production of crude oil per barrel. Kyari had argued that if efforts were not made to bring down the cost, there would not be any tax revenues, and therefore investments in the oil sector would become worthless, adding that the end result would be that expectations would not be met and businesses in the sector would become something nobody would want to venture into. He said, “In Saudi Arabia, one can produce oil at less than $5. Their reservoirs are very different from ours. One can lay the oil pipelines on the surface and nobody will tamper with it. The environment there is different from the Niger Delta. But, that does not explain why some of our partners should be producing oil at as high as $93, $40, $30 per barrel in all terrains of our operations in both Production Sharing Contracts (PSCs) and the Joint Ventures. “When crude oil prices go to as low as $12 or $13 to the barrel, it means, technically, the operators are subsidizing crude oil production. Nobody does that anywhere in the world.” Kyari added that production maintenance costs accounted for about 80 per cent of JV and 60 per cent of PSCs operational expenses.

However, by April 2019, Kachikwu disclosed that the average production cost for a barrel of crude oil in Nigeria had declined to $23 per barrel, adding that oil companies were not stopping there and were aiming to reduce this further, to $15 a barrel. Making his own submission to the issue, Group Managing Director of the NNPC, Mallam Mele Kyari, had at a Central Bank of Nigeria Round Table discussion in March 2020, stated that as at then, the cost of crude oil production in the country was within the range of $15 to $17 per barrel. He noted that due to the uncertainties of the global crude oil market, countries

Mele-Kyari

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COVER STORY He said, “For instance, the personnel cost in this country is higher than any other jurisdiction in the world. This is unbelievable. It has to come down. It has to be challenged. We cannot pay for more than we can afford. We cannot take cash flow from one business to practically subsidise other businesses. “When prices are low, and one partner has cost of production of about $36 to the barrel, one should know one is subsidising the other. Some of them have sustained high profile over a long period of time. “Although oil production and sales are going on, in reality it is other businesses that are producing cheap oil at $11 or $10 that are doing it for them.” Senate wades in The issue of the high cost of crude oil production got worrisome that the Nigerian National Assembly was forced to wade in. Specifically, the Senate had in June this year, criticized the NNPC, for what it described as the astronomical cost of production. It said, the cost peaked at $21.2 per barrel. The Senate, through its Committee on Finance, had stated that the production cost was far higher than the $4 and $10 cost of production in other oil producing countries like Saudi Arabia and Russia. The committee expressed displeasure over the cost during its meeting with the Minister of Finance and heads of revenue generating agencies over the revised 2020 budget in Senate committee room 204. Chairman of the Committee, Senator Olamilekan Adeola, disclosed that while cost of oil production in Saudi Arabia was $4 per barrel and $3 per barrel in Russia, it is $21.2 per barrel in Nigeria, indicating very poor marginal profit of about $3 per barrel based on the new oil price benchmark of $25 per barrel. He said,

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“With the benchmark of $25 as proposed, Nigeria is going to have just $3 as its own return on investment 22

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Senator Olamilekan Adeola

as I begin to look at the oil revenue and the mineral revenue as proposed in the Medium Term Expenditure Framework (MTEF) which has dropped from almost N8.86 trillion to N3.33 trillion. Are you saying that it is worthwhile investment for us as a nation? “Going by the fact that the cost of producing one barrel is $21 and the benchmark is $25 for over 180 million Nigerians and all these cost you have listed, who determines them? How do you ensure that Nigeria is being charged the right cost on each barrel of oil? In Saudi Arabia, it is $4 per barrel cost of production, in Russia it is about $3 per barrel, Nigeria is $21, we are beginning to be afraid as to why we are channelling all our efforts to this oil and gas if the return on investment is nothing to write home about.” On his part, Senator James Manager, a member of the committee, stressed that the high cost of producing Nigeria’s crude oil is no longer tenable, stating that: “The reason given for the high cost of production per barrel are not tenable; because wherever oil is produced they have their own security challenges, including even Saudi Arabia, Iran, Russia. “So, how is our own so peculiar that our cost of production is up to $21 per barrel? Which are those administrative issues? Why are we different from the rest of the world? These are issues that, as National Assembly, we are supposed to take up.”

Another committee member, Senator Shaibu Gumau, said: “I just believe even common sense cannot agree with this, not even the National Assembly. How could we expect a situation where cost of production of oil per barrel is $21.2 and the revenue is $25 per barrel? Yet, with other countries in the world, their cost of production is not even up to $10 per barrel. “It is difficult to understand and I don’t think it is only the National Assembly. Even the Executive themselves should sit down and ask themselves this question because we are watchdogs. Not because we are watchdog, that is why we are disturbed but it has got to an extent that they too should be disturbed and there should be a solution and if not, there should be an explanation that somebody can understand and agree, because common sense cannot understand this.” In his own submission, another committee member, Senator Jibrin Issa, also disagreed with the NNPC official over the high cost of oil production, saying that: “I am disturbed because I expected the NNPC to dwell more on fixed costs, but surprisingly you are talking about administrative cost, security. These are variables and even the fixed cost, in the long run, are also variables which you can also work on.” Militating factors While the high cost of production is worrisome, various factors had been adduced to it, chief among them are incessant pipeline vandalism and crude oil theft. NNPC’s Chief Operating Officer (Upstream), Mr Yemi Adetunji, attributed the high cost of oil production to a series of peculiarities ranging from security to crude oil theft.

Mr Yemi Adetunji

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COVER STORY He said, “Security challenges are kind of peculiar to Nigeria, as in other climes, pipelines are on the surface. You hardly see them being tampered with, but in Nigeria, even when they are buried two metres to three metres deep, they are still being vandalised.

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“In some cases, we are trying to take them to deeper levels but those ones will add to cost of production like going 10 metres to 15 metres deep. It will add to the cost about three or four times the cost of production as against putting the pipelines on the surface. “We are working with security agencies to put in place new framework to ensure that all the hitches are brought down to the nearest minimum.” On his own part, Kyari, told members of the Nigerian Guild of Editors few days back, that while NNPC had rolled out strategies aimed at achieving sub-$10 per barrel unit operating cost (UOC), without jeopardizing growth, it had discovered that unit operating cost for 2019 Full-Year Performance, for its Joint Venture (JV) partners exceeded the targeted $10 per barrel in all cases. Kyari said, it was observed that reported performance for the first quarter of 2020 highlighted the need for further cost optimization as UOC figures were above the target of $10 per barrel in all cases. He identified the major cost centers among its JV partners to include: human resources; logistics; service management; direct handling/ transportation; and production maintenance costs, which accounted for about 80 percent of JV operating expenses (OPEX) and 60 percent of Production Sharing Contract (PSC) OPEX. According to Kyari, personnel and logistics costs were the highest cost elements in crude oil and gas production, with logistics and personnel costs, in some instances,

taking up to 75 per cent respectively of the expenditure of oil firms. Kyari had also lamented that:

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There is nowhere any company will spend 50 per cent of its cash flow on human resources and survive. It is not possible.

ranks significantly among the top 10 oil-producing countries with the highest cost of crude oil production per barrel. He said, “Nigeria ranks among the top 10 countries with the highest cost of producing oil per barrel and its equivalent in gas. High cost is a major disincentive to investment, especially at this time of considerable global competitiveness.

The oil business may shutdown especially if the price of oil goes below $30 per barrel for a long time.” Kyari noted that other factors responsible for the high cost of production included issues bordering on security and losses on crude oil pipelines. In addition to the above,

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which led to the loss of about 2.9 million barrels of crude worth $48.42 million that occurred in 74 points between January and February,

Mr. Bayo Ojulari

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“Operating costs are increasing due to attendant increase in required maintenance and well work-overs.

the private sector players worry that multiple taxes and the huge cost being incurred from Nigeria’s insecurity remained snag on cost reduction. Private players weigh in On his part, Mr. Bayo Ojulari, Managing Director of Shell Nigeria E xploration and Produc tion Company (SNEPCO), emphasised the need for transparency around open book economies, while he lamented that

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security of facilities in the country was negatively impacting on efforts by oil firms to cut cost. For Chairman/Managing Director, ExxonMobil Affiliate Companies in Nigeria, Mr. Paul McGrath, Nigeria

Mr. Paul McGrath

Security costs are escalating as peculiarities of the business environment require additional resources to be deployed to secure our people and assets.” He, however, noted that there were fixes that needed to be put in place if the country aspires to maintain and expand the investment profile in the hydrocarbon industry.

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COVER STORY Also commenting on the issue, Director of Petroleum Resources/ Chief Executive Officer of the Department of Petroleum Resources, Engr. Sarki Auwalu, noted that the COVID-19 pandemic had brought to the fore the need for efforts to be geared towards bringing down the cost of producing a barrel of crude oil; ensure business efficiency and financial stewardship, as well as the adoption of good corporate governance. Auwalu disclosed that

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the decision of the Federal Government to conduct a marginal field bid rounds during this period of the COVID-19 pandemic, was borne out of the need to produce crude oil at a lower cost.

Engr. Sarki Auwalu

According to Auwalu, the cost of producing crude oil from marginal fields was very low, owing to the fact that there is no exploration cost. He said, “The Federal Government chose to go ahead with the conduct of the marginal fields bid round now because of its realization of the need to cut cost in crude oil production at this crucial period in the economic life of the country.” Role of technology Prior to now, crude oil produced in the United States from extremely tight formations, called shale, was 24

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just about the most expensive worldwide, especially couple of months back, because of the high technology and deep horizontal drilling. It also is a known fact that crude oil produced in other parts of the world, like Saudi Arabia, are the low-cost producers because their crude oil comes from very porous rocks in much greater quantity. However, shale producers are leveraging technology and in the not-too-distant future, shale would rank among the least expensive. Continued improvement in shale technology has helped in driving down the cost of production for shale companies, such that Artem Abramov, head of global shale research at the consultancy Rystad Energy attested to it recently. He said, “At $30 a barrel, many companies would be able to adapt gradually. But at $20 a barrel, many players – especially those with poor balance sheets – will struggle financially.” Here’s a clear sign of improvement from a $70 - $95 that used to be the cost for producing a barrel via hydraulic fracturing in 2005 at the Permian basin. The present price environment ought to influence producing companies’ appetite for improved technology in order to drive Nigeria’s producing cost down. Due to the high cost of oil production, analysts are afraid, would impact on the realization of Final Investment Decisions on a number of projects, as it would take a longer time for investors in these projects to recoup their investment, considering the impact of the UOC on the cost of the investments. Tackling high cost For Sarki Auwalu, cost control and management were key in driving down costs, as well as business ef ficiency, financial stewardship, better negotiation of contract, improved corporate governance, vertical integration model, improvement in refineries, operational excellence, compliance and asset optimization among others. Auwalu believed the government has a critical role to play, especially in policy and regulation, business

environment and investment drive as well as creating an opportunity for lower cost of production. On steps it had taken to bring down cost of production, Kyari said the NNPC engaged stakeholders in the sector on the need to bring down the high cost. He said, “We negotiated contracts, cut down on contract’s life cycle; selected the right projects and engaged the right institutions to bring down the cost. Our ultimate target is to bring the cost to at most $10 per barrel. This is achievable. But, it comes at a cost and huge challenges. “What that means is that

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we have to shut down some assets and confront very powerful people, who, either as businesses, individuals or institutions and agencies, have entrenched interest in making sure this does not happen.

With such people, the meaning is that we are paying about three times more than what we should. “But, I can assure you that at any cost, we will take steps to bring this cost down, so that our country will benefit and the oil industry will become a profitable business for the 200 million Nigerians, and not just for a fragment of the society committed to frustrating our efforts. “Otherwise, there are issues we have to confront. Our partners and international oil companies have issues. There are clear constraints to taking investment decisions. We have taken this challenge in. We have engaged. We are drawing the lines. We are changing the processes and procedures, and ultimately, there is no doubt that this will serve the common good of all Nigerians.” On his part, Roland Ewubare, the immediate past Chief Operating Officer, Ventures and Business Development of the NNPC, stated that the NNPC was looking very

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COVER STORY closely at such variables as logistics, security, and transportation with a view to reducing cost of production to $10 per barrel or below. He added that the

“

NNPC had set a target of fourth quarter of 2021 to achieve the objective of $10 per barrel UOC of crude oil.

Roland Ewubare

Ewubare explained that a lot of logistics costs would be recalibrated to drive down the cost, stating that: “When you have a low commodity price regime, as the case now, the only way we can squeeze out some reasonable cash and financial gain to the nation is by curtailing and constraining our costs in line with the Group Managing Director’s aspiration to push for a $10 per barrel cost of production. Against this backdrop, the conversation around cost becomes an imperative and urgent one.” He disclosed that much had been done over the years in the area of reducing contracting cycle which used to be a major factor responsible for high cost of production, stressing that the National Petroleum Investment Management Services (NAPIMS) achieved a six-month contracting cycle under him as Group General Manager. In addition, Ewubare added that the NNPC had taken aggressive

capital allocation to prioritize lowcost oil production and additional measures to ensure cost discipline across, including renegotiation of contracts and other business obligations, thus saving 40 percent of proposed budget and cost. Business as usual Minister of State for Petroleum Resources, Chief Timipre Sylva, further maintained high production cost was a big problem for the industry, especially because it was not sustainable to have a situation where average cost per barrel is around $30 per barrel. According to him, COVID 19 has taught everybody in the business of crude oil and gas production that it should not be business as usual. He said, “NNPC is doing very well in this regard. They are looking deeper into the budgets of operating companies.

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Before now, NAPIMS had completely abdicated its responsibility of auditing the cost of production with the joint venture companies and became the contracting agency.

“The contracting cycle was also a big problem. The long contracting cycle led to higher costs of projects, and by extension, higher cost per barrel. “But, now our regulatory agencies and bodies are living up to their billing by shortening approvals and contracting cycles as a result bringing down the cost of projects. We will begin to see soon, a reduction in the cost per barrel.” He explained that the Nigerian Content Development Monitoring Board (NCDMB), NNPC and the DPR were involved very largely in this. Role of local content This had brought to the fore, the critical role played by the local content policy in driving down production cost. Specifically, Sylva, disclosed that the Federal Government would deepen the implementation of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act because it is an effective strategy for lowering Nigeria’s high crude oil production cost. Sylva emphasized that government’s primary target in the sector was to significantly reduce the unit cost of producing per barrel of crude oil. According to him,

“

local contractors tend to be cheaper than expatriates and international contractors,

Chief Timipre Sylva

But, under the current leadership of the Group Managing Director of NNPC, NAPIMS is now deeply more to its responsibility. And we are beginning to see a lot more compliance in the area of auditing of the accounts of the JVCs.

hence, the need to encourage Local Content and give more opportunities to local contractors. He said, “By extension we will reduce the cost of doing business in the oil and gas industry in Nigeria. Local Content is part of cost reduction strategy. That’s why I came here, to encourage more local participation in the activities of the industry.” In addition, Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Simbi Wabote, confirmed that Local Content implementation lowers the cost of crude oil production, particularly in the long run. He had listed other key elements that contribute to high crude oil production cost in Nigeria

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COVER STORY to include security and infrastructural challenges as well as protracted contracting cycle. He noted that several Nigerian oil service companies had executed several projects at costs much lower than their international counterparts, explaining that countries like Brazil, Malaysia and Norway, that had practiced Local Content in their oil sector for decades had long enjoyed significant cost reduction in their per barrel cost. Wabote also noted that Local Content serves as an opportunity for the Federal Government to empower its citizens and get them involved in the activities of the oil and gas industry. He added that Local Content guarantees security of supply in the industry, recalling that

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local service companies and skilled Nigerian personnel ensured that operations of the oil and gas industry continued apace during the height of restiveness in the Niger Delta region a few years ago, when most foreign companies and their staff had pulled out. As the world continues to battle the COVID-19 pandemic and oil-producing nations navigate the volatility in the global market, Nigeria would either hope that crude oil price remains way above the cost of producing the commodity in the country, or channel all its efforts towards ensuring that the costs of production continue to dip.

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Simbi Wabote

ACROSS AFRICA

Total secures Africa’s biggest debt financing with LNG deal

o t a l S A’s M o z a m b i q u e liquefied natural gas project has completed as much as $16 billion in funding involving a score of banks, despite a slowdown in energy investment as the coronavirus hammers the global economy. It is the biggest foreign direct investment in Africa yet, according to law firm White & Case LLP, which advised the financiers. Financial close is expected by the end of September, it said. The African Development Bank will provide $400 million in senior loans and the Japan Bank for International Cooperation signed a loan agreement for as much as $3 billion for the scheme in northern Mozambique, they said

Engr. Simbi Kesiye

Thursday in separate announcements. The amount raised, which includes a loan from the ExportImport Bank of the U. S., matches the African nation’s gross domestic product. Oil India Ltd., a partner, also confirmed the financing in a statement. A Maputobased spokeswoman for the Total-led project didn’t respond to a request for comment. T h e f i n a n c i n g a c h i e ve m e n t underscores the faith being shown in the $23 billion project known as Mozambique LNG. While crude oil has staged a partial comeback from the worst effects of the pandemic, the gas market continues to face a massive oversupply. Despite this, lenders are betting on the country’s location in southern Africa for ease of export, and the sheer size of gas deposits linked to the project. The project, which could be transformational for the country’s economy, still faces significant challenges including its location in an area where an Islamist insurgency began in 2017. Similar

schemes, including Exxon Mobil Corp.’s Rovuma LNG to be built next to Total’s facility, have been delayed due to depressed energy prices and the pandemic. Mozambique LNG’s funding effort still raised $600 million more than planned, with pricing at pre-coronavirus levels, according to Societe Generale SA, the financial adviser for the project. Mozambique LNG will generate about $50 billion in revenue for Mozambique’s government over 25 years, according to Total. That will be supplemented by sales from the even bigger project led by Exxon. While the site is in a geographically strategic location between Europe and Asia, the onshore plant, which is being built in the northern Cabo Delgado province faces other challenges. The site registered a number of Mozambique’s early infections of Covid-19, with control efforts complicated by the movement of foreign workers. Mozambique’s state-owned Empresa Nacional de Hidrocarbonetos, Mitsui & Co Ltd., ONGC Videsh Ltd., PTT Exploration and Production Pcl and Bharat Petroleum Corp. are also partners in Mozambique LNG.

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INFRASTRUCTURE

LEKOIL inks infrastructure agreements for Otakikpo development

EKOIL, the oil and gas exploration and production company with a focus on Nigeria and West Africa, announces that the Otakikpo Joint Venture, has executed definitive agreements for the next phase of the Otakikpo marginal field development. Further to the execution of a non-binding Memorandum of Understanding, the Otakikpo JV has executed binding definitive agreements with Schlumberger which covers the comprehensive inf ras tr u c ture sha rin g a n d field management services for the planned upstream drilling programme. The upstream drilling programme consists of a phased drilling of up to seven new wells in Otakikpo. The drilling of the first two wells is expected to increase gross production to approximately 10,000 bopd from the current gross rates

of 5,755 bopd. “We continue to make progress towards our shared ambitions to drill additional wells and unlock further value for all stakeholders from Otakikpo. We are pleased with the Joint Venture’s relationship with Schlumberger, a world class project execution partner, as we are committed to advancing this exciting and transformative project that is aimed at increasing the value and cash generation abilities of the field,” Lekan Akinyanmi, CEO of LEKOIL noted. “As a result of the lower oil price environment and a change of project scope by the Otakikpo JV and other project stakeholders, these project capex estimates are a reduction on previous estimates of $170 million ($68 million net to LEKOIL Oil and Gas Investments Limited) as announced on 1 July 2019. LEKOIL expects to potentially raise, according to its participating

interest, its own portion of the required funding from a combination of of f take financing from a subsidiary of a major international oil company and cashflow from existing production,” Mr Akinyanmi said. The Otakikpo JV entered into an infrastructure sharing and utilization agreement in respect of the production from the Otakikpo marginal field with Integrated Hydrocarbon Infrastruc ture Limited, a special purpose company incorporated and owned by Green Energy International Limited to build, own, operate and maintain the shared infrastructure facilities (the “ISUA”). Pursuant to the ISUA, Integrated Hydrocarbon Infrastructure Limited will assume the role of facility operator (from its parent, Green Energy International Limited) and will build, own, operate and maintain certain flow stations, pipeline facilities and terminal facilities to be used for the evacuation of crude oil produced from the Otakikpo marginal field.

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INFRASTRUCTURE

Airports concession: Sirika receives certificates of Compliance from ICRC

he federal government’s concession plan for four of its international airports received a boost recently as the Minister of Aviation, Senator Hadi Sirika, received the Outline Business Case Certificate of Compliance for the concession of Lagos, Abuja, Port Harcourt and Kano International Airports from the Infrastructure Concession Regulatory Commission (ICRC). Receiving the certificates of compliance from the Director General of the commission, Mr. Chidi Izuwah, in his office, Sirika said that with the certificates of compliance, “we will go-ahead to the Federal Executive Council for approval for the full business of concession to proceed and that will turn the airport terminals to its full potential in private hands as millions of dollars would be pumped into the airports”. He recalled that President Muhammadu Buhari had earlier approved the Aviation

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Sector Roadmap which the ministry has been following and operating diligently and part of which was airport terminal concession. Sirika, in a statement issued in Abuja by the Director, Public Affairs, Ministry of Aviation, Mr James Odaudu, commended the ICRC, which through its mandate has guided the ministry throughout to ensure compliance and value for money, transparency, equity and fairness. He also expressed satisfaction with the quality of work done by the transaction advisers that culminated into the release of the certificates by the ICRC. The minister noted that with the full implementation of the airport terminal concession, about 241,700 jobs will be created. In his remarks, the Director-General of ICRC, Izuwah said the federal government through the Ministry of Aviation has adopted publicprivate partnership (PPP) as the

strategy to leverage on private sector participation and investment in order to achieve the upgrade and development of new terminal infrastructure at the four airports in a cost-effective and value-formoney manner. He said the airports in Nigeria have great potentials but was currently operating at suboptimal level due to factors that will have to be improved under the PPP programme. According to Izuwah, airport terminal concession is one of the critical projects under the aviation sector roadmap of the federal government and fits well within the scope of the ministry’s strategic plan for the sector. He congratulated the minister, ministry staff and the transaction advisers on the achievements recorded so far, and wished for greater success as the project enters the procurement stage.

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INFRASTRUCTURE

Shell completes 20km domestic gas pipeline expansion project in Abia

hell Nigeria Gas (SNG) has completed the final phase of its 20 kilometer domestic gas pipeline expansion project in Abia State, southeast, Nigeria. The project, which connects Agbor Hill, Osisioma and Araria industrial zones, has also enabled the supply of pipeline gas to Ariaria Market Energy Solutions Limited, the Independent Power Project (IPP) consortium that provides electricity to the popular Ariaria market. Ariaria International Market is one of the largest leather shoe-making and open stall markets in West Africa, with over 37,000 shops and an estimated one million traders. A press release by the Media Relations Manager, Shell Nigeria, Bamidele Odugbesan, quoted the Managing Director, SNG, Ed Ubong, as saying on the completion of the expansion project, “We are proud of this domestic gas infrastructure investment which allows the industries in Abia to have more reliable and cleaner source of energy. SNG is committed to supporting Nigeria’s industrialisation provided there is a stable regulatory

environment in the domestic gas sector that allows investors recover their investment.” Also speaking on the completion of the expansion project, the Managing Director, NICEN Industries Limited, a paint and plastics manufacturer connected to the pipeline gas, Christopher Eze, said, “SNG has put life back into our industries in Aba through the provision of this natural gas line. This milestone will open up the state for an influx of investors thereby creating an enabling environment that will generate job opportunities for the youth of the State. I am sure that many industries in Aba will quickly take advantage of this great opportunity. Our company sincerely appreciates SNG for this great feat”. On his part, the President of the Manufacturers Association of Nigeria (MAN), Mansur Ahmed said, “MAN is proud of the role that Shell is playing in driving industrialisation in Nigeria through domestic gas supply. Industries and manufacturing plants play a key role in transforming the

Nigerian economy and this project will connect many manufacturers in Abia State, one of the nation’s major industrial hubs, to pipeline gas, which is a cheaper, cleaner and more reliable source of energy. According to Ahmed, the gas supply to the Ariaria Market IPP would strengthen micro, small and medium enterprises in the Abia State and enhance the operating environment for manufacturing to thrive. SNG also noted that it has in collaboration with its partners and local stakeholders agreed to build infrastructure and deliver natural gas to over 150 industrial and commercial customers, mostly in Ogun, Abia, Rivers, Bayelsa and Lagos States. This will drive industrialisation; provide employment for skilled and unskilled local population in addition to directly improving internally generated revenues in these states. It added, “With a reputation for safety, credibility and reliability, SNG has maintained a 16-year streak of successful ISO 14001 certification and has operated for over 10 years without any lost time injuries.”

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WEBINAR

Nigeria, Uganda, Others Explore Regional Integration Post Covid-19

fric a’s oil p ro ducing countries can develop their technological capacities and capabilities by learning from Nigeria if regional integration is embraced as a survival strategy post COVID-19, the Nigerian Content Development and Monitoring Board (NCDMB) has said.

Tunde Adelana

The Director of Monitoring and Evaluation, NCDMB, Tunde Adelana stated this during a Webinar hosted by Majorwaves Energy Report recently, with the theme; “Optimising

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Local Content through Regional Integration in a post COVID-19 Africa.” He said local content in the Nigerian oil and gas industry is not about indigenization, but domiciliation and domestication of skills. He added that indigenous companies have since built capacities on the back of the policy. Adelana noted that Africa is a very rich continent and has a lot of mineral resources in every nook and cranny, adding that research should be encouraged in the continent to develop these local resources. He said, “Africa is a very rich continent and we have a lot of mineral resources everywhere. We need to look back and do some more research into our local resources, to see how they can be utilized to support, not just the oil and gas sector, but the entire economy at large. “Nigeria has abundant skills. We have abundant capabilities and competencies, given the length of time we have been in this industry (60 years). Our achievements speak for themselves. And for the rest of Africa, there is a lot you can learn

from Nigerians.” “Our principle is Local Content, and it is not about indigenization. It is about domiciliation and domestication. It means, bring it to us and do it here, our people will learn from it and become experts in that field.” “R&D is the bedrock of any development. We need to continue to evolve, to create values. R&D is very key on this and I think this is one of the opportunities that Africa as a continent needs to take on, post Covid-19.”

Dr. NJ Ayuk

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WEBINAR Also speaking at the webinar, a legal expert on structuring, local content, documentation and negotiation of oil, gas and petrochemical transactions, Dr. NJ Ayuk, enjoined Nigerian oil and gas services firms to take advantage of opportunities in Equatorial Guinea, Mozambique and other Africa countries post COVID-19. Elaborating on the importance of regional integration in post COVID-19 Africa, he noted that the African Continental Free Trade Agreement (AfCFTA) has a pivotal role to play but bemoaned the difficulty it will face if the local content laws of participating countries were not harmonised. “Nigeria for example, has competent oil services firms but finds it difficult operating in fellow African countries because of local content laws” he said, while urging Nigeria to lead the campaign for a regional content law. According to the Executive Chairman, African Energy Chamber, “in the last two years, there has not been any major project in Africa.” He then called on Africa oil producers to make their fiscals competitive, so as to attract big projects. He lauded the Nigerian Liquefied Natural Gas (NLNG), describing it as one of the most successful LNG in the world. ‘’Africans, Stand up! Be conquerors and go to these places where you never thought you will go; set up service companies and compete internationally!” he stated. “We need to get off our high horses as Africans and start competing. Africa, we need to be honest with ourselves: it is a time to go bold!”

effectiveness.” According to her, “ We have opportunities for Joint Venture with UNOC. This is available for African operators to seize.

He stated that, “A Mozambican company is one that is set up in Mozambique and pays tax in Mozambique; it does not have to be owned by a citizen. We’re excited about the opportunities there for other African countries.” On the local content opportunities in the country, he said, “The opportunities for Local Content in Mozambique’s LNG is estimated at 5billion US Dollars over the next 4 to 5 years.”

Peninah Aheebwa

“While FID was delayed in Uganda, we used the opportunity to build some level of capacities which can be deployed in Mozambique and South Sudan; discussions have begun in this regard. “Our National Supplier Database is open to everyone for registration, whether nationals of Uganda or not.” Lending his voice to the discussion, Head, Oil and Gas Southern Africa, Standard Bank Group, Paul Eardley Taylor, said that there is existence of local content escalator for all projects in Mozambique.

He further noted that, “there is no reason why we cannot use this Covid-19 moment to leap frog into the future and break bounds.” On her part, Director of Technical Suppor t Ser vices, Petroleum Authority of Uganda, Peninah Aheebwa said National Content in the Ugandan oil industry is about value creation and retention in-country. She said, “For us, National Content means in-country value creation and retention, whilst ensuring competitiveness, efficiency and

He said, “Local Content escalator exists for all projects in Mozambique, as subsequent plans for development have increasing provisions negotiated projects compared to earlier ones.”

Speaking on the future of oil and gas companies in the country post COVID-19, he said, “The next phase for a lot of the local companies is equity funded joint ventures, and over time they will become the established local corporates in Mozambique which have the skills and the track records of the companies in Nigeria.” The webinar was graced by stakeholders of the oil and gas sector across Africa, Europe and America as attendees aimed at identifying opportunities across Africa for built capacities and capabilities; the flow of capital, formation of JV towards big ticket projects; finding practical solutions to challenges with integrating businesses across national boundaries; optimising bi-lateral and multilateral trade agre em ent s a cross regions; leveraging technology in a post Covid-19 era across the continent; and comparing National Content legislation of individual countries, as well as provisions for collaboration and dispute resolutions. As countries are strategizing on the way forward post COVID-19 pandemic, African countries are expected to recover faster collectively and to benefit more from one another with regional integration strategy, which was the highlight of the webinar.

Paul Eardley

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POWER

World Bank approves $750m credit for Nigeria to improve electricity Supply By Ikenna Omeje

he World Bank recently, approved the Power Sector Recovery Operation (PSRO) of $750 million in International Development Association (IDA) credit facility for Nigeria. A release by the Bank said that the credit, which was approved by the Bank Board of Directors is aimed at improving the reliability of electricity supply, achieve financial and fiscal sustainability, and enhance accountability in the country’s power sector. Giving reasons for approving it, the Bank said: “About 47 percent of Nigerians do not have access to grid electricity and those who do have access, face regular power cuts. In addition, the economic cost of power shortages in Nigeria is estimated at around $28 billion – equivalent to 2 percent of its Gross Domestic Product (GDP). Getting access to electricity ranks as one of the major constraints for the private sector according to the 2020 Doing Business report. Hence, improving power sector performance, particularly in the non-oil sectors of manufacturing and services, will be central to unlocking economic growth post COVID-19.” Speaking on the credit, the World

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Bank Country Director for Nigeria, Shubham Chaudhuri, said: “The lack of reliable power has stifled economic activity and private investment and job creation, which is ultimately what is needed to lift 100 million Nigerians out of poverty.” “The objective of this operation is to help turn around the power sector and set it on a fiscally sustainable path. This is particularly urgent at a time when the government needs all the fiscal resources it can marshal to help protect lives and livelihoods amidst the COVID-19 pandemic.” The PSRO provides results-based financing to support the implementation of the Government’s Power Sector Recovery Program (PSRP). The PSRP is a comprehensive program to restore the power sector’s financial viability, improve service delivery and reduce its fiscal burden. The PSRO is expected to increase annual electricity supplied to the distribution grid, enhance power sector financial viability while reducing annual tariff shortfalls and protecting the poor from the impact of tariff adjustments. This will enable the turaround of power sector while helping the

Federal Government to redirect large fiscal resources from highly regressive tariff shortfall financing towards critical crisis-responsive and pro-poor expenditures. It will also increase public awareness about ongoing power sector reforms and performance. Specifically, the PSRO will ensure that 4,500 MWh/ hour of electricity is supplied to the distribution grid by 2022 by strengthening the regulatory, policy and financing framework. It will also enhance the accountability and financial viability of the sector, helping the sector create a track record of sustainable operation necessary for unlocking much needed private investments in the future. The IDA, established in 1960, helps the world’s poorest countries by providing grants and low to zerointerest loans for projects and programs that boost economic growth, reduce poverty, and improve poor people’s lives. IDA is one of the largest sources of assistance for the world’s 76 poorest countries, 39 of which are in Africa.

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POWER

FG received no payment from international electricity customers in Q4 2019 – NERC

he Federal Government received zero payment from its international electricity customers (i.e., Societe Nigerienne d’electricite – NIGELEC and Communaute Electrique du Benin–CEB) in the last three months of 2019, the Nigerian Electricity Regulatory Commission (NERC) has said. According to the 2019 fourth quarter report of the commission, the invoice issued to the two international customers stood at N29.50million and N2.07billion respectively. “During the quarter under review, the special and international class of customers made no payment to NBET and MO. The invoice issued to Ajaokuta Steel Co. Ltd (designated as a special customer) and international customers (i.e., Societe Nigerienne d’electricite – NIGELEC and Communaute Electrique du Benin–CEB) stood at N29.50million and N2.07billion respectively. The Federal Government has continued to engage the governments of neighbouring countries benefitting from the export supply to ensure timely payments for the electricity purchased from Nigeria,” NERC said. The commission also stated that out

of a total invoice of N193 billion issued to the eleven Distribution Companies (DisCos), only a sum of N74.20 billion was remitted, representing 38.32 percent remittance performance. It said that as much as N3.06 out of every N10 worth of energy sold during the period under review, was not collected from consumers as and when due. “The average total remittance performance to the market for all DisCos wasrose to 38.32% and ranges from 19.57 percent (JosDisCo) to 51.50 percent (EkoDisCo). “The level of collection efficiency during the quarter under review indicates that as much as ₦3.06 out of every ₦10 worth of energy sold during the fourth quarter of 2019 remained uncollected from consumers as and when due. “During the fourth quarter of 2019, a total invoice of N193.66billion was issued to the eleven (11) DisCos for energy received from NBET and for service charge by MO, but only a sum of N74.20billion of the total invoice was settled, representing 38.32 percent remittance performance. This represents 0.44 percentage point increase from the final settlement rate recorded for the

third quarter of 2019 following the commencement of enforcement action by the Commission. Individual DisCo’s remittance performances to NBET and total market (combined MO & NBET) settlements during the fourth quarter of 2019 are represented in Figure B below. Although the DisCos fully met the expected minimum remittance thresholds (MRTs) to MO, the average aggregate remittance “performance to NBET was 27.96 percent, with performance levels ranging from 6.05 percent (Jos) to 43.38 percent (Eko). This is lower than the MRT prescribed in the Orders on minimum remittance issued to all DisCos in July 2019 with only Jos DisCos meeting the remittance obligation during the quarter under review. “ It said that the financial viability of Nigerian Electricity Supply Industry (NESI) is being threatened by nonimplementation of cost-reflective tariffs, high technical and commercial losses, as well as energy theft. “The financial viability of NESI is still a major challenge threatening its sustainability. As highlighted in the preceding quarterly reports, the liquidity challenge is partly due to the non-implementation of costreflective tariffs, high technical and commercial losses exacerbated by energy theft and consumers’ apathy to payments under the widely prevailing practice of estimated billing. The severity of the liquidity challenge in NESI was reflected in the settlement rates of the energy invoices issued by NBET to each of the DisCos as highlighted above, as well as the non-payment by the special and international customers.” As part of efforts to address the challenge occasioned by low remittance to the market and the viability of the DisCos, the Commission said it has since commenced the review of DisCos’ compliance to meeting the MRT for enforcement actions. It is also reviewing the 2020-2025 performance improvement plans filed by the DisCos and related strategy towards addressing the operational challenges of DisCos.

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ENERGY WOMAN

“

...my initial presence was met with huge applause and cheer from the men on the rig floor when I was transported” Engr. Elizabeth Rogo

ngr Elizabeth Rogo has over 19 years international experience in engineering, operations, project management, consultancy, business development and management in oilfield services (onshore and offshore) from global companies including BJ Services, Baker Hughes (Baker Oil Tools Division) and Weatherford International. Areas of operations include Canada, USA, Europe and Africa. She is the Founder and Chief Executive Officer of TSAVO oilfield services, as well as the East African President of African Energy Chamber. With a BSc. in Chemistry minor from Mount Saint Vincent University and a Bachelor of Engineering from Dalhousie University both in Halifax, Nova Scotia, Canada, Elizabeth made history in subSahara Africa’s wing of Weatherford International as the first woman to head and very effectively manage operations in Eastern Africa countries. She previously held the position as SPE Chair (Nairobi Section) and has been an active mentor to many young

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professionals in the energy sector, as well as a sought-after speaker and moderator on gender diversity and local content in the oil and gas industry. In this interview with Jerome Onoja, she covers a number of topical issues ranging from business to personal, from regional to continental. Excerpts: STEM isn’t a very interesting and easy field to succeed in, particularly as an African girl. How did you navigate the narrows? What was growing up like, the environment, and pursuing STEM subjects? STEM is very interesting and exciting if that is what you like and are good at it. I have always been interested in the Sciences. Like many young African girls of my generation, I always thought I would be a doctor growing up. Engineering held no sway for me. I have to say I struggled initially in mathematics as a youngster but one day it all clicked and I was hooked. I give credit to my wonderful teachers

who put up with my endless questions and enthusiasm. I am very fortunate that I grew up in a single parent home with a very liberal and supportive mother who always encouraged us to see the world as our oyster. Education has always played an important role in my family, as far back as my grandparents who were teachers. I attended excellent private schools in Kenya and proceeded to the UK for my secondary education and then on to Halifax, Nova Scotia, Canada for university. It was during my first BSc. degree while still determined to enter medical school that I became interested in environmental sciences which eventually led me to take engineering as my second degree. I am very proud to say that I helped pay my way through engineering school by working during the semester, holidays and internships. This instilled in me strong work ethics and understanding the sacrifices our parents make giving us an international education.

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ENERGY WOMAN

My engineering program had a CO-OP component to it, which meant we needed to undertake two internships. My first internship was with one of the largest Canadian consultancy engineering firms, SNC Lavalin, where I was exposed to the world of oil and gas. One of the major projects my team was involved in was the regulatory process for the

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construction of the Maritime & Northeast Pipeline which would carry natural gas from the Sable Offshore Project (a joint venture) - Canada’s first offshore natural gas project – within the Maritimes and into Northeastern USA. I had the chance to attend many high-level meetings and public open houses that gave me an understanding of how energy and infrastructure like pipelines had a huge socio-economic impact. My second internship was with the Nova Scotia Petroleum Directorate (now part of the NS Department of Energy) where again I was working on highly confidential reports and attending meetings that involved senior level government officials. My strong work ethic and eagerness to learn was noted. I had a chance to travel to Houston, Texas as part of my project and visited the huge Petrochemical plants. After my graduation I moved to Houston and began my career in the oilfield services sector starting as a Field Engineer in Hydraulic Fracturing with BJ Services and eventually progressed into international operations in Europe and Africa as an expatriate with Baker Hughes and Weatherford.

As the Founder of TSAVO Oil Services Limited, what led to the conceptualising and birthing of the consultancy services you offer in oil & gas, geothermal and the mining sectors?

If you had asked me 4 years ago if I would have started TSAVO, I would have given you a resounding No! I was very happy working my way up in management and it was only when my international assignment took me to Uganda in 2011, at the height of Tullow Oil’s exploration project, that I began to see enterprising entrepreneurs who were looking for opportunities in this new sector of oil and gas. It struck me that many of us with the technical expertise and business knowledge were comfortably ensconced in our positions. During the downturn that hit the oil and gas sector from 2015, and as we began consolidating and in many cases closing down operations, retrenching local staff and expatriates, it hit me that with time all this talent would leave the region and then what? It would have been very easy to head back to the US and continue my career and take a breather from working internationally for 10 years. That was when the idea of starting TSAVO began to crystallize.Kenya does not have stringent local content laws like we see in places like Nigeria where international companies must partner with an indigenous company. So, the appetite for many of these international companies was to pack up, leave and wait it out rather than entering into collaboration with local companies at the time;

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barring one or two like Baker Hughes that saw the potential in building a local base and are beginning to reap the rewards today.

I basically took stock of what value and expertise I brought in starting a new venture in a downturn and realized that I had amassed all this knowledge and experience and if my company at the time, Weatherford, entrusted me to run their regional business, surely, I could to the same. TSAVO was born in 2017 with a vision to begin a technical company within the energy sector. I would

be less than honest if I do not tell you that, at the beginning, I was running on adrenaline with very little sleep as failure was not an option. From not having the structure of a large corporation, the expatriate income and benefits, to starting one’s business on the sofa with savings and faith takes gut! Many people thought I was mad to leave corporate America and more so, not to return back to the USA.

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All I know is that, after celebrating our 3rd year anniversary, I have come through bruised in some way, but wiser and even more determined to see the impact of TSAVO, not only in the Eastern Africa region but across Africa. In order to work in the areas of oil and gas, geothermal and mining, I understood very early on that to make the necessary inroads in my business I would need to attract very strong strategic partners and consultants. This is an area that is still growing organically. I was very adamant that the size of my company should not deter from the value I bring to any potential partnership. I have had representatives from some major companies tell me that I have the audacity to think I can sit at the table with them. I even

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had one drilling operations manager push me out of a meeting with the intent of side-lining me and convincing my international partner to go with his choice of a local partner. That is where my connections with my partners, respect, integrity and grit enabled me to call out such practices – it’s the game of the mouse versus the elephant. Basically, word got around that I was not someone you messed with!

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ENERGY WOMAN 3.How are you able to cover these East African countries: Kenya, Uganda, Tanzania, and Mozambique; then Ethiopia? Definitely, there must be several barriers, whether cultural or skill set. How did you surmount them? My previous roles as Senior Business Development, Country Manager and eventually as Regional Area Manager (East Africa) for Weatherford, provided me with a deep perspective of what was on ground operationally and culturally in the region. It was that experience and knowledge base that I brought into TSAVO from day one. I have never liked being pegged in a corner, so I see TSAVO more than just a Kenyan company. I am proud of my Kenyan roots but in order to challenge myself, I need to see that, we can also work across Africa.

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You only have to look at Nigerian companies who started the same way, grew successfully and are not afraid to go head to head with international companies. So, I see TSAVO as having the potential to grow and go anywhere barring obvious constraints. I always think big!

Tell us about your journey since entry into the energy space. What prepared you for the roles you occupy today? I am convinced that the preparation for the roles I have had since entering the energy space began at home. I was raised by a single Mother, Amb. Orie Rogo-Manduli, who is a very dynamic and hardworking person, so in many ways you were expected to emulate her business acumen and strength. I learned that to make it in this world you need to stand up for what you believe in and make your own path. There is nothing free in life. Sometimes even all the hard work and money one may put in is not enough when you consider biases such as one’s gender and ethnicity, for example. It is those 36

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times that you have to really dig deep and look at alternative means and options. And when it does not succeed, always take away a lesson from that experience.

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I believe that God always puts you in situations that are very difficult in order to succeed later on.

If you never understand that, you will always be failing or never advancing in your career and life. I have never allowed my gender become a hindrance, in fact I see it as a powerful tool to show the world that African women can make it, given the opportunity. And…if it is not there, we will create that opportunity and help empower those behind us.

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When you look around in the global oil and gas sector, do you see any Black woman running a major company? No. I too looked around and realised if I wanted to be a CEO, I would need to create that space, knowing that one day we will see a Black woman in that space, just as we are already seeing in the geothermal sector in Kenya for example. Lastly, I say do not look at a hurdle as being a permanent showstopper. Look for solutions. If you have failures in your work learn from them. If you know what you want you need to take the initiative and find that door and if you have to burst it open. Be confident and self-assured. Keep learning and always challenge yourself. Learn to take criticism and improve on areas you are deficient in. Surround yourself with positive people that see your potential and will guide you in your journey. Value their time and advice. The life of an entrepreneur is a very lonely one, especially during those difficult times when you build your business and money is tight or non-existent, bills are piling up, and your bank manager is unavailable.

You must have faith and dig deep within. Have the mind-set that, even this too shall pass!

As an engineer, what were some unique and memorable projects, as well as roles you handled in international projects? My time in field operations in Texas and Louisiana with BJ Services provided a solid foundation before I transitioned with Baker Hughes into international operations where I worked for over 5 years. I was stationed as a Region Engineer in Aberdeen and worked on some exciting projects that included offshore West Africa, Tunisia and Turkey, before a transfer to Angola, where I moved into Sales and Marketing. Every project, whether small in value or multi-million dollar was important to me. I am a people person and a believer in walking together with my clients – I am invested in their projects. It is not just a matter of making money. I am filled with pride when a client appreciates my work and this happened on many occasions.

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Some of my unique projects took place while working as a Field Engineer in parts of Texas and Louisiana where I confronted blatant racism – being questioned about my experience, gender, ethnicity, academic credentials…you name it. It was a very jarring experience the first few times. But, I came to learn that many a time these people had never experienced working with an African woman engineer who was the lead on their projects. The only way to earn their respect was to know my stuff and help them make money! I had one or two stumbles, but I was respected by these same clients who initially refused to shake my hand, to specifically ask for me

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ENERGY WOMAN

to oversee their jobs. I had to learn to be the bigger person, educate and not always take things too personal. If I had to pick a memorable and light-hearted moment as a Region Engineer it would be the first of several offshore rotations I did in Equatorial Guinea (EG). I cannot remember any other location where

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my initial presence was met with huge applause and cheer from the men on the rig floor when I was transported up and back down to the stimulation vessel before we began operations. I was taken aback and my colleagues on the vessel, who already got wind of what was awaiting me were equally amused with all the fuss being made since I was the only woman working on this project. Many of the men came up to me to shake my hand let me know how proud they were of what I was doing as an African woman. Never once was I ever I disrespected by anyone during my time offshore. I have to say that I did leave a little part of me in EG. While at Weatherford, you stood out as the first woman to effectively manage Eastern African countries. How did you pull that off? One of the lessons I learned from a woman executive in the oil and gas sector in Houston was to

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always know your trade and never shy away from taking opportunities,

looking for opportunities and positioning yourself to take an opportunity. But none of these happens in a vacuum.

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You must have people who are sponsors and will go to bat for you. Hard work alone does not always land you into top jobs, and especially when you are making history in Sub-Sahara Africa (SSA) with my company. When the opportunity came to be the Country Manager of Kenya, we happened to be hosting the SSA Leadership Team in Kenya and during the presentations and discussions I made the right impression. In addition, the vice president at the time was very much into gender diversification. It was only a short time after that I took over as Regional Area Manager overseeing Kenya, Uganda, Tanzania, Ethiopia, Mozambique and South Sudan. What’s your assessment of Eastern Africa and its level of energy poverty compared to the rest of Africa? What strategic plans are in place to address this disturbing issue by the various states? Eastern Africa, and Kenya in particular, have made great strides in addressing the energy poverty. We are very fortunate in Kenya that we are endowed with Solar, Wind, Geothermal, Hydro as well as oil and gas projects, and potentially large natural gas offshore reserves. However, you still see that electricity is not only expensive but out of the reach for many. Governments are

cognizant of this and investing in projects and infrastructure to address these deficiencies. Right now, there is a big discussion on clean energy initiatives and the reduction of funding fossil fuel projects, including pipelines. We in East Africa must be given the space to exploit our natural resources for the development of our population.

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We cannot expect renewable energy to take the place of what is traditionally the fuel of choice – oil. But we are getting there through our energy mixes. In the mean time we need to insist that any energy project undertaken must utilize the best technology and solutions. Protection of our natural environment and the well-being of our people are paramount.

.How vibrant is the indigenous oilfield service sector in East Africa? Oil and gas in the East Africa is nascent and the indigenous oilfield services sector in particular is in its infancy. We have several companies across East Africa that are led by mainly entrepreneurs and are working in peripheral services including transportation and logistics. For those involved in the core oilfield services (e.g., drilling, OCTG, cementing, completions, artificial lift, work-over, slick-line, specialized laboratory, etc.),

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ENERGY WOMAN I can say with certainty that in Kenya we are only three companies: TSAVO Oilfield Services - of which I am not only the Founder/Chief Executive Officer but the only Woman, Lakeford Oilfield Services (Kennedy Yugi, General Manager) and Bentworth Energy (Carey Ngini, Founder & Chairman). The oilfield services sector involves technical expertise, high safety measures, and capital, just to name a few major hurdles. In order to upscale as local we all work with strategic partners on some level. I have always viewed these types of collaborations as a win/win for both local and international companies. It is also important that we lead the charge on building a strong local content base and gender diversity. With COVID-19, how has activities changed for you? Also, how long do you see this new normal staying with us? Let’s not beat around the bush…it has been tough! This new normal will be with us for a long time and it is changing timelines on projects. There are other major inhibiting factors such as the big push on climate and clean energy initiatives, as well as steep decrease in funding for fossil fuel projects.

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None of the big Oil & Gas projects in Eastern Africa have reached final investment decision (FID),

and that was even before COVID-19. I am talking about the Tilenga project in Uganda (Total) and the mega East Africa Crude Pipeline project from Hoima, Uganda to Tanga, Tanzania; the Lokichar Project in Kenya (Tullow Oil) which has recently been declared force majeure; all the upcoming mega LNG projects in Tanzania (Equinor/Shell) and Mozambique (Exxon Mobil) are also affected due to the effects of COVID-19. Being a small company, we have the capacity to be very flexible and look for other opportunities. Geothermal in Kenya has been a blessing but is also a very 38

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hard market to crack as it is state owned. However, we have made some inroads including winning work and continue to be heavily involved. In addition, consultancy is another area and that means having a strong network of good consultants and companies to bid with. You belong to the 1 per cent female CEOs in the energy space. What are some of your advocacy activities to ensure Africa draws from more women like you, who are yet to be discovered? Mentorship inclusive. That is indeed an honour and one that I do not take lightly. I have always been very active in mentoring students and young professionals. My position at Weatherford, SPE Chair for the Nairobi Section and then starting TSAVO has provided me with platform to highlight Women like me who are trailblazers in their own right. I have always and continue to advocate for the youth, young professionals and women. As you are aware, I was recently appointed the President (East Africa) for the African Energy Chamber (AEC). I am currently building a new Chapter in the region and having the backing of NJ Ayuk (Executive Chairman) as well as the exceptional people at AEC in Johannesburg, South Africa has really thrust me into the forefront. It is important that not only Africans but the world get to see what women in the energy sector are doing – and more so African women. Within TSAVO, I am very adamant that young women must be given a chance and the space to nurture their strengths and abilities. Many of our young African girls do not come from households where culture dictates their role and status as females and where they are not allowed to be assertive even though they are very bright. It is very important to start with our young girls.

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But I always say diversity works even better when men are involved.

They too must understand that

diversity does not take away jobs for them but adds value by bringing different perspective into the workplace. During a recent webinar that I co-moderated for young professionals in the extractives sector, I was very happy to hear from a young lady geothermal drilling engineer, Phyllis Mathenge who insists that women must take the initiative and advocate for women in the workplace. It is not the place for men, nor should women in leadership abscond their responsibilities to ensure issues concerning women are brought to the forefront. Now that is powerful hearing it from those who are coming behind us – they also get it! Lastly, I am involved in large and strategic conferences where I enjoy moderating, such as Africa Oil & Power, as well as undertake speaking engagements. I have also stepped into the exciting world of webinars under the African Energy Chamber. All these, including my work gives me the platform to showcase the talent African women bring to the Energy sector. As I said before, we usually dream to be what we are from what we see and read about. It’s time we are live to those who will follow in our footsteps. What are some of your aspirations, both as Eastern Africa President with Africa Energy Chamber, and as the CEO of TSAVO Oil Services? Some of my aspirations includes building value and longevity in the ventures I am running. As regional president, it is building a new Chapter from the ground up. What value can I bring to my members? I believe information is power and there is nothing more I enjoy like empowering others. Starting your own technical company has not been an easy feat but one I am fully committed to and determined to build a well-respected company. TSAVO began with a vision and as it continues to grow the visions an input of those around me will continue to mould this company. My aspiration is to build a company that continues long after I have stepped away and eventually leave an African legacy, started by a woman.

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ENERGY WOMAN What are the major challenges in attaining SDG goals for the African woman? And how do these differ across regions in Africa? What solutions do you recommend? By SDG I assume you are referring to Sustainable Development Goals and the effect on the African Women. We know the heavy burdens our African women carry, ranging from poverty, lack of education, clean energy and water, early marriage, access to good health, equal pay and opportunity in the workforce, etc. I would say that this differs more along economic lines. As someone in the energy sector I see how important it is to educate our young girls and steer them in professions that are not only male dominated but certainly have an impact on women. Our voices as women must be heard, loud and clear, and we must be encouraged to provide solutions including the technology One initiative that I am proud of is that TSAVO is a signatory to the international campaign: Equal By 30, which calls for equal pay and access to leadership and opportunities in the clean energy workforce. We came together with NJ Ayuk from the African Energy Chamber who is very passionate about women issues and successes. As we continue to grow, TSAVO will play a leading role in empowering young women.

Majorwaves recently hosted a webinar on regional integration. What’s your position on the concept?

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That was an excellent webinar that really pertains to the East Africa story. I am a big believer in pooling of our resources and allowing cross-border work opportunities within the region.

This means if there is a deficiency of skills in one area of the region, we can utilize the expertise from another area. We have a chance in Kenya, Uganda and Tanzania to move away from local/national and more into regional integration. This is not a new concept to East Africa beginning with such organizations as the East Africa Community. East Africans have always held a strong community spirit that I feel, with time, has been eroded as we have become more nationalistic, especially over resources. This is the time for that spirit to be nurtured and to thrive in the energy sector. I tell people there is no super major in the oil and gas industry that can do everything – that is why global oilfield sector companies like Schlumberger, Baker Hughes and Weatherford exist. How do you manage work-life balance, seeing you have a lot on your plate? How do you relax? Truth be told I am a workaholic and very passionate about what I do.

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I have been accused by some of being “too ambitious for a Woman”

I take that as a compliment. I know if I was a man that would never be an issue. I have not always managed my work life balance as I should and this has caused some rifts in my close relationships and my health. But I am now making strides in the right direction. Ironically, running TSAVO has taught me that I needed to incorporate a more balanced lifestyle.

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During COVID-19 I started cooking my own meals as part of my healthy regime and rediscovered my culinary skills. I am taking time to work on my spiritual and inner self as well as exercising more. I find great comfort being at home surrounded by my family. Being an avid collector of African art, I have created a space I enjoy. What’s the Africa of your dreams? My dreams for Africa is that we the people are given the space to blossom and realize our true potential without unwarranted external interference. We are the keepers of this great continent that is blessed in so many ways – its beauty, abundant natural resources, its flora and fauna and its people. It’s time that we stop electing incompetent, corrupt and crooked leaders and start building out own utopia. We must appreciate what we have and be willing to put in the work to build our own utopia. I see a shift especially with the younger generation.

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MARITIME

NIMASA moves to aid Seafarers By Ikenna Omeje

he Director-General of the Nigerian Maritime Administration and Safety Agency (NIMASA), Dr Bashir Jamoh, has said that the Agency is developing policies to improve the quality of training and certification, as well as remuneration for the country’s Seafarers. Jamoh made the disclosure recently in Lagos during a webinar hosted by NIMASA to mark the 2020 Day of the Seafarer. A Press release signed by the Head, Corporate Communications, NIMASA, Philip Kyanet stated that the event featured local and international participation, with the key speaker and consultant at Transbasin Limited, Dubai, United Arab Emirates, Karen Ogidigben Onimisi, and Nigerian Labour Attaché at the International Labour Organisation (ILO) in Switzerland, Essah Aniefiok Etim, calling for better welfare and support for seafarers. The Director-General said, “Policies are in the pipeline to improve the quality of training and certificates we give to the seafarers. We are taking steps to standardise the curriculum of our training institutions in line with international standards.

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We are also working on increasing the remuneration of our seafarers. These policies would be announced as soon as we complete work on them.” Jamoh said seafarers were among the most courageous people in the world, stressing that the theme for this year’s Day of the Seafarer, “Seafarers are Key Workers,” it’s a “testament to the fact that the world cannot do without seafarers. Seafarers hold the key to humanity’s survival on a day-to-day basis.

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They hold the key to our wellbeing in this time of COVID-19 period.”

He praised seafarers for sustaining the global supply chain, distributing urgently needed medical supplies with enormous risk to their

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lives and families.“The seafarers are unsung heroes; they are also our invisible heroes. We see their handwork every day and everywhere in agricultural machinery, the food we eat, and the unbroken run of the manufacturing base, despite the global lockdown.” Jamoh also spoke on the challenges faced by seafarers amid the COVID-19 pandemic, including stringent work conditions in some countries, movement restrictions, lockdowns, crew change difficulties, fatigue and seasickness, and disruption of contracts. “As a regular, we have taken steps to alleviate the suffering of the seafarers. NIMASA was among the first government agencies to declare seafarers as being on essential duty, and we published this in a marine notice. We also issued COVID-19 guidelines to incoming ships towards ensuring that there is no importation of the virus by sea. “NIMASA was the first in West Africa to issue a COVID-19 marine notice. We challenged ship-owners and employers of seafarers to take necessary proactive measures to lessen the pains of seafarers. “We also walked in lockstep with the IMO to tailor all our marine notices in the

early period of COVID-19 towards supporting the extension of the validity of seafarers’ certificates, crew change, guidelines, procedure and their designation as essential workers,” he said while explaining measures the Agency has so far taken for the sake of the country’s seafarers. “It is said that a good sailor weathers the storm he cannot avoid; COVID-19 was a storm Seafarers couldn’t avoid. As tried and tested seamen and women, our seafarers have continued to weather this storm for us. We celebrate you today. Nigeria thanks you, the world appreciates you, NIMASA as a regulator will never abandon you. We will support you all the way,” Jamoh added. On his part, Karen, who is Director, Maritime Sector Consultant at Transbasin Limited, Dubai, United Arab Emirates, called on the international community to render necessary assistance to seafarers, especially during the COVID-19 pandemic. She commended NIMASA for supporting seafarers during the pandemic and emphasised the need for Nigeria to develop post-pandemic measures to make the country’s seafarers internationally marketable and competitive.

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MARITIME He said, “Seafarers are part of the global supply chain and should have access to shore leave at ports in accordance with global regulations. There is also a need to look at improved ways to mitigate the challenges that COVID-19 has brought before us, commencing with digitalisation of our processes, including local training and licensing of Nigerian seafarers.” Similarly, Etim, who is ILO Nigerian Labour Attaché, Permanent Mission of Nigeria to the United Nations in Switzerland,

demanded better working conditions for seafarers. He called for greater opportunities to make their voices heard, saying they should be encouraged through appropriate rewards and compensations. The release noted that as part of the activities marking the day, the Agency donated items that included essential commodities, Personal Protective Equipment (PPE), facemasks, and hand sanitisers to the seafarers.

The Day of the Seafarer, marked June 25 every year worldwide, is a day set aside by the International Maritime Organisation (IMO) to celebrate seafarers and recognise their invaluable contribution to the global economy. This year’s virtual event, themed, “Seafarers are Keyworkers”, held via WebEx, specifically draws attention to the critical role and challenges of seafarers in the COVID 19 period.

NPA operates no cloned bank account By Ikenna Omeje Authority. “The Authority hereby states that allegations that it operates such an account are untrue.

he Management of the Nigerian Ports Authority (NPA) on Monday said that the Authority does not operate a cloned bank account anywhere. This is in response to media reports based on a petition by one John Okpurhe to President Muhammadu Buhari, alleging that NPA operates a cloned account. According to a release issued by the Manager General, Corporate and Strategic Communications, NPA, Jatto Adams A, the petitioner accused the Attorney General of the Federation, Abubakar Malami (SAN) of allegedly refusing to reward him for exposing over $1bn supposedly hidden in an account with Unity Bank Plc, allegedly operated by NPA. Okpurhe, who claims to be a whistleblower, cited an account number: 0013680344 allegedly being operated by NPA but the Authority said that based on evidence provided by a letter from Unity Bank Plc, the account does not exist. It, however, agreed that the NPA operates an account with Unity Bank Plc. with account number: 0013670344 with a total sum of $1,057,772.03 (One Million, Fifty-Seven Thousand, Seven Hundred and Seventy-Two Dollars, Three Cents) as of December 4, 2019, contrary to the

$1,034,515,000.00(One Billion, ThirtyFour Million, Five Hundred and Fifteen Thousand United State Dollars) alleged by the petitioner. According to the NPA, the account has not been in operation since 27 August 2010 due to a Suit No: FHC/L/CS/582/2010 GARNISHEE ORDER NISI in AMINU IBRAHIM & CO & ANOR. VS. NIGERIAN PORTS AUTHORITY where a garnishee order was placed on it following a case, which went from the Federal High Court to the Supreme Court over a period of eight years. It stated that following the completion of the case, the money was consequently transferred to the judgment creditor on December 4, 2019 in line with the Garnishee Order Absolute. The statement reads: “The Management of the Nigerian Ports Authority is aware of media reports based on a petition by one Mr John Okpurhe to President Muhammadu Buhari. “The petitioner accused the Attorney General of the Federation, Mr Abubakar Malami (SAN) of allegedly refusing to reward him after exposing over $1bn supposedly hidden in an account with Unity Bank Plc. and allegedly operated by the Nigerian Ports

“Mr O kp urh e , claiming to b e a whistleblower cited an account number: 0013680344 allegedly being operated by NPA but this account does not exist as evidenced by a letter from Unity Bank Plc. “The NPA operates an account with Unity Bank Plc. with account number: 0 01367034 4 with a total sum of $1,057,772.03 (One Million, Fifty-Seven Thousand, Seven Hundred and SeventyTwo Dollars, Three Cents) as of December 4, 2019 and not $1,034,515,000.00 (One Billion, Thirty-Four Million, Five Hundred and Fifteen Thousand United State Dollars) as alleged by the petitioner. “However, the NPA account has not been in operation since August 27, 2010 due to a Suit No: FHC/L /C S/582 /2010 GARNISHEE ORDER NISI in AMINU IBRAHIM & CO & ANOR. VS. NIGERIAN PORTS AUTHORITY where a garnishee order was placed on it following a case, which went from the Federal High Court to the Supreme Court over a period of eight years. “Upon the determination of the case at the Supreme Court, the judgment creditors continued with the Garnishee process which resulted in the credit of the amount $1,057,772.03 (One Million, Fifty-Seven Thousand, Seven Hundred and Seventy-Two Dollars, Three Cents) in favour of Suit No: FHC/L/CS/582/2010 GARNISHEE ORDER NISI- AMINU IBRAHIM & CO & ANOR. VS. NIGERIAN PORTS AUTHORITY on 4 December 2019 in line with the Garnishee Order absolute. “It is therefore obvious that there is no cloned account as speculated in the alleged whistle blowing effort of Mr Okpurhe. “The account under discussion was frozen on the strength of a court order in August 2010, following the completion of the case; the money was consequently transferred to the judgment creditor on December 4, 2019 in line with the Garnishee Order Absolute.”

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Oilserv Boss Extols FG Over The AKK Gas Pipeline Project

gas pipelines across South-South gas pipeline, 128 km, from the western end of Akwa-Ibom to Mfamosing, very close to Cameroon, that has made it possible for UNICEM cement plant to be able to operate.

ne of the biggest pipeline projects to be executed in Nigeria is the Obiafu/Obrikom to Oben Node Gas Transmission Pipeline System which forms part of the Nigerian Gas Master Plan. Following on its heels is the recently launched Ajeokuta-Kaduna-Kano (AKK) gas pipeline project. Both projects are being executed by the same contractor, Oilserv Limited, an indigenous integrated engineering, procurement, construction, installation & commissioning (EPCIC) service provider. With the AKK project, Oilserv is announcing that the era of looking inwards for solutions to Nigeria’s infrastructural development, especially in the oil and gas sector, has kicked off in earnest. Speaking to media executives in Ajeokuta, the start-off point for the AKK gas pipeline project, Chairman/ Group Chief Executive Officer, Oilserv Limited, Engr. Emeka Okwuosa noted that the federal government has started a local content policy that will give both credence and opportunity to indigenous companies to showcase their prowess in all areas of development and innovation in the country. Engr. Okwuosa, while applauding the President Muhammadu Buhari-led administration for looking inwards in the execution of a mega project like the AKK gas pipeline project, stated that Oilserv has deployed 100% local content in the execution of the project, especially in manpower. He insisted that Nigeria has abundant

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skilled manpower in all sectors of the economy, sufficient to drive the country, and commended President Buhari for tapping into this resource. “This is a major part of our story, but also, this will go a long way to show that indigenous capacity has grown. Oilserv started its build-up even before the Local Content law came into place a few years ago. And we have continued to build and encourage and develop a lot of capacity. So, for us, it goes to show clearly that we have a Nigerian company that can compete anywhere in the world, and develop. This is one of the largest pipelines that exist in the world.” Oilserv is the major indigenous oil pipeline EPC company in Nigeria. Affirming the company’s competence, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kolo Kyari, while flagging off the project had assured the President: “We are confident that the contractors will deliver on this project. We have put every structure of transparency in management to ensure that this project is delivered as planned. This is a landmark project.” It will be recalled that the first phase of the Nigerian Gas Masterplan, the Obiafu/Obrikom to Oben (OB3) Node Gas Transmission Pipeline System was built by Oilserv. Before then, Oilserv had developed the entire gas distribution network in Lagos, powering industries in the state. Oilserv has also built major

The AKK pipeline is a 614km-long natural gas pipeline set to be laid between Ajaokuta and Kano in Nigeria and forms the first Phase of the Trans-Nigeria Gas Pipeline (TNGP) project. The TNGP project is an integral part of the proposed 4,401km-long Trans-Saharan Gas Pipeline (TSGP) to export natural gas to countries in Europe. The AKK pipeline is slated to originate from Ajaokuta and pass through Abuja and Kaduna, before ending at a terminal gas station in Kano. The project among other benefits will curb gas flaring and further boost industrialization and development in all regions in Nigeria. The choice of Oilserv Limited seems to be deserving as the company has performed various key projects relating to platforms, production facilities, and installation of Bulklines, all of which involve engineering, project management and construction services. The company’s antecedent includes being the first and only Nigerian indigenous company to fabricate, install and commission the largest Oil manifold station for Shell Petroleum Development Co. Ltd. (S.P.D.C.), while also having successfully designed and constructed the largest Gas Transmission Pipeline System in Nigeria and Africa – the Obiafu/Obrikom to Oben Node Gas Transmission Pipeline System, which forms a part of the Nigerian Gas Master Plan. Among other challenging projects, Oilserv is also a major company executing pipeline repairs and rehabilitation work for S.P.D.C and the Nigeria Liquefied Natural Gas Limited (NLNG), in the Niger Delta region of Nigeria.

Majorwaves Energy Report July 2020

Articles inside

Majorwaves admitted founding member of Diversity SWG, NCCF of NCDMB

LEKOIL inks infrastructure agreements for Otakikpo development

Marginal Field bid round enhances local content capacity, impacts Nigeria’s economy- Engr. Auwalu

Mammoet Terminal Crane (MTC 15) Now Operational at LADOL