Majorwaves Energy Report July Edition by majorwavesenergyreport

J U L Y 2 0 1 9 VOL 2 NO 4

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SOCIAL INVESTMENT

INFRASTRUCTURE

the

Ojulari

"We are collaborating with operators to create a friendly business environment" Peterside

“NCI Fund: 33 applications approved, 11 receives disbursement" Ehi-Omoike

“In all modesty, we are the most successful cable company as far as oil & gas projects are concerned in Nigeria." www.majorwavesenergyreport.com Kretschmer

economic growth Reﬁnery & Petrochemicals Steel and manufacturing Gas Logistics Barytes

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gas development:

our

success story is

Nigeria's success story...

Chevron Nigeria Limited (CNL), has an aggressive gas development strategy that builds a profitable gas business through a portfolio of domestic, regional and export supply projects that fulﬁll the NNPC/CNL Joint Venture Domestic Gas Supply Obligation and support the Nigerian Government’s Gas Master Plan. We have been the highest supplier of high quality domestic gas in Nigeria since 2015 and will continue to explore opportunities to maintain this position. We have since 2008 also reduced continuous gas ﬂaring in our operations in Nigeria by over 90%. We led the development of the West African Gas Pipeline project through which Nigeria supplies gas to Benin Republic, Togo, and Ghana. All these prove that in the area of natural gas development, Chevron's success story is Nigeria's success story.

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INDUSTRY NEWS

NNPC Gets New GMD, Seven COOs

The Federal Government has named Mele Kolo Kyari as new Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC). He replaces Dr. Maikanti Baru who clocks 60 years next month. A geologist as well as Group General Manager, Crude Oil Marketing Division of the corporation and Nigeria’s ex-National Representative to the Organisation of the Petroleum Exporting Countries (OPEC), Kyari joined the organisation over two decades ago. Announcing the appointment in a statement, NNPC Group General Manager, Group Public Affairs, Ndu Ughamadu, added that the president also appointed seven new chief operating officers (COOs). “President Buhari has directed that the new GMD and chief operating officers work with the current occupiers till July 7 for a smooth transition on July 8 when their appointments would take effect. However, the appointment of Mr. Farouk Garba Said (North West), who is replacing a retiring Chief Operating Officer, is effective from June 28, 2019,” he said. The new COOs are Roland Onoriode Ewubare (South South) for Upstream; Mustapha Yinusa Yakubu (North Central) – Refining and Petrochemical; Yusuf Usman (North East) – Gas and Power; Lawrencia Nwadiabuwa Ndupu (South East) 6

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– Venture; Umar Isa Ajiya (North West) – Chief Financial Officer; Adeyemi Adetunji (South West) – Downstream; and Farouk Garba Said (North West) for Corporate Services. Ughamadu stated that Baru has congratulated the new appointees. The new GMD is a crude oil marketer with certification and pedigree in Petroleum Economics and crude oil and gas trading, graduating from the University of Maiduguri in 1987 with Bachelor’s Degree in Geology/Earth Science. He joined the Nigerian Geological Survey Agency in 1988 and later moved to Integrated Data Services Limited (IDSL), a subsidiary of the NNPC in 1991 before proceeding to the National Petroleum Investment Management Services (NAPIMS) in 1998. He became the Abuja Operations Manager of NAPIMS in 2004 and Senior Supervisor, Production Sharing Contracts in 2006. Kyari was Head and later Manager of Production Contracts Management. He also served as General Manager, Crude Oil Stock Management before becoming Group General Manager, Crude Oil Marketing Division in 2015. The corporation submitted that under Kyari’s watch, the department recorded transformation in the management and sales of the nation’s various crude oil grades via infusion of transparency and automation of the processes. JULY 2019, Vol 2 No 4

Ladan Out, Shakur in as Oil Industry’s Shake up Rocks DPR

Following the expiration of the tenure of Mr. Mordecai Ladan as the Director of Petroleum Resources, and in line with the provisions of Circular Ref. No.SGF.50/S.II/C.S/268, the former Director has formally handed over the affairs of the Department to the most senior officer Mr. Ahmad Rufai Shakur, the Deputy Director and Head, Corporate Services Division in an Acting capacity. Ladan who has been due for retirement about two years ago due to age and number of years in active service, was left to enjoy a four year term as the director. He eventually retired from the DPR, ushering in Mr Ahmad Shakur. According to a statement released by the agency, Mr Shakur comes on board with over 32 years’ experience in the oil and gas industry with very robust service records in the regulatory arm of the sector. A graduate of the Ahmadu Bello University with a Master of Business Administration degree. Mr. Shakur has held various positions across the value chain of the DPR from the zonal offices to headquarter and has attended numerous management and leadership courses locally and internationally in notable institutions worldwide like the Columbia Business School, New York USA and Wharton Business School, Pennsylvania, USA Embodied with renowned past records in strategic leadership, corporate governance and optimal performance, Mr Shakur is expected to steer the Department to the next level. www.majorwavesenergyreport.com

INDUSTRY NEWS

Seplat Announces Resignation of Non-Executive Director, Makes New Appointment Seplat Petroleum Development Company Plc has announced the resignation of one of its NonExecutive Directors as well as the appointment of a new Company Secretary. The oil and gas company, which is dual-listed on the Nigerian Stock Exchange (NSE) and the London Stock Exchange (LSE), made the announcement (yesterday) in a notice issued to the NSE. The notice was signed by Roger Brown, Seplat Petroleum’s Chief Financial Officer. According to the notice, Mr Macaulay Agbada Ofurhie was voluntarily retiring as a Non-Executive Director of the company on the ground of retirement. The resignation will become effective from June 30th, 2019. Appointed to the board in March 2010, Mr Ofurhie was said to have served Seplat Petroleum meritoriously throughout his tenure. Meanwhile, the statement also introduced Seplat Petroleum’s new Company Secretary/Chief Governance and Compliance Officer in the person of Mrs Edith Onwuchekwa. Her appointment became effective on the 24th of June, 2019. In her new capacity as Company Secretary/ Chief Governance and Compliance

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Officer, Onwuchekwa will “will guide and support the Board of Directors of SEPLAT in ensuring compliance with regulatory and statutory requirements,” the notice states.

Edith Onwuchekwa, Seplat Petroleum’s new Company Secretary/Chief Governance and Compliance Officer

Mrs Edith Onwuchekwa’s Profile Edith Onwuchekwa is a graduate of Law from the University of Uyo, Akwa Ibom State. She attended the Nigerian Law School between 1998 and 1999, graduating with Second Class Upper honours after which she was called to bar. She joined Lafarge WAPCO Nigeria Plc in April 2005 and became Company Secretary/ Legal Adviser of Lafarge WAPCO in 2008. She relocated to Cairo, Egypt in December 2010 to take up the position of Legal Counsel,

Sub-Saharan Africa business at the Lafarge Group Regional Office for the Middle East and Africa. In 2012, Mrs Onwuchekwa returned to Nigeria as Lafarge Nigeria Country General Counsel/Public Affairs Director, overseeing the Legal and Public Affairs aspect of the Lafarge Group entities in Nigeria. She later joined the Board of Ashakacem Plc as a Non-Executive Director and Vice Chairman of the Board. She is also a Director in Lafarge Associated Nigeria Limited. A consummate and seasoned professional with experience, spanning over two decades, she is currently an Associate of the Institute of Chartered Secretaries and Administrator of UK and holds a Masters in Business Administration from University of Bradford, UK. Prior to her appointment at Seplat Petroleum, Onwuchekwa was General Counsel/Legal Director at Lafarge

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INDUSTRY NEWS

SEC Vs Oando: Court Adjourns To July 22

Lekoil Reports Significant Upgrade To Otakikpo Field Estimate

Fe dera l H ig h C ou r t sitting in Lagos has adjourned till fixed July 22 for the hearing of the substantive suit brought by two chief executive officers of Oando Plc, seeking enforcement of their rights. The court also fixed July 4th to hear arguments on the motion for consolidation. At the resumed hearing, Mr. Yele Delano (SAN) announced appearance for Oando and expressed the company’s intention to be joined in the suit as well as seeking a consolidation of similar suits, pending before the court. Delano also sought an adjournment to enable him file his processes in the suit. In response, counsel to SEC, Idigbe raised an objection to their request for joiner, on the grounds that it would predetermine the respondent’s case. He argued that the issue of application consolidation was intended to frustrate the case, thereby elongating the hearing of the case. He further argued that the party in question has not formally processed the application for consolidation; it was only a mere oral expression.

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According to him, “My Lord, this matter was adjourned to today for hearing, and I am prepared to go on. The issue of consolidation of the cases is meant to accelerate the matter rather than taking it backward”. He argued that if the court allows the joinder, it would have pre-determined the case of the defence and therefore urged the court to refuse the application. On his part, counsel to the applicants, Mr. Tayo Oyetibo (SAN) argued in favour of the request for joining and urged the court to allow the party seeking to be joined in the suit. According to him, if the court refuses the application for joinder and the party goes on to appeal, then the applicant will be affected. In a short consideration of the issues, the court held that it was far-reaching to think that the grant of an adjournment to enable a party file a motion will be considered prejudicial to the defence. On that note, Justice Ayokunle Faji adjourned the cased until July 4, to hear arguments on the motion for consolidation, and also fixed July 22, for hearing of the substantive suit.

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ekoil Ltd on Wednesday, June 2 6t h, r ep o r te d a s i g n i f ic a nt up g r a de to 2 P o i l r e s e r ve s estimates and prospective resources for the 40%-owned Otakikpo Ma rg i na l F ield located i n OM L 11 L i c e n c e, Ni g e r i a . T h e A f r i c a fo c u s e d o i l a n d g a s E x p l o r at i o n C ompany said a new updated C o mp ete nt Pe r s o n’s R e p o r t detailing recoverable volumes expected within the Otakikpo F ield h a s b e e n c o mplete d by M c D a n iel A s s o c i ate s & C o n s u lt a nt s L td by r e v i e w i n g d a t a f r o m a r e c e nt l y c omplete d 3 D s ei s m ic a c q u i s it ion. The new Competent Person’s Report s up e r s e de s t he p r ev iou s r e s ou r c e r ep o r t c o mplete d o n O t a k i k p o by AG R Tr a c s I nte r n at i o n a l L td i n 2 015. T he new r ep o r t e s t i m ate s 48.6 million barrels of gross proven and probable reser ves ve r s u s p r ev iou s 15.0, w it h 19.42 net to L eko i l. I t a l s o e s t i m a t e s 3 31. 6 m i l l i o n b a r r el s o f g r o s s a g g r e g ate s to ck tank oil in place prospective volu me s on a P5 0, u n r i ske d b a si s, mea n estimate versus prev ious 16 3.0, net 13 2 .6 to L eko i l. “ T h i s C PR dou bles the estimates for unrisked oil resources net to L E KO I L N i g e r i a a n d r e i n f o r c e s t he e c onom ic s of t he development. We now lo ok fo r wa r d, s u bj e c t to s e cu r i ng t he ne ce s s a r y f u nd i ng, to t he mu lt i-wel l d r i l l i n g pro g ra m me a i med at i ncrea si ng production to app r ox i m ately g r o s s 15,0 0 0 to 2 0,0 0 0 b op d,” s a id L eko i l C h ie f Executive Lekan A kinyanmi. Shares in L ekoil were dow n 10.2% at 3.48 p enc e on We d ne s d ay a f ter no on.

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INDUSTRY EVENTS

‘Oil and Gas as an Enabler for Economic Transformation in Sub-Saharan Africa’ The Sub Saharan Africa International Petroleum Exhibition and Conference (SAIPEC) returns to Lagos 25-27 February 2020 ow established as the leading “N oil and gas meeting for the whole region and due to collective

agreement of all involved across Sub Saharan Africa, WAIPEC will become the Sub Saharan Africa International Petroleum Exhibition and Conference (SAIPEC), taking place between 25-27 February 2020 at the Eko Hotel and Convention Centre.” Mr Bayo Ojulari, Managing Director, The Shell Nigeria Exploration and Production Company (SNEPCo) and SAIPEC 2020 Steering Committee With a record-breaking 3,512 exhibition visitors, 656 delegates from 36 countries, 104 exhibitors and 54 speakers, the 3rd West African International Petroleum Exhibition and Conference was the most successful meeting place for SubSaharan Africa’s oil and gas industry. Following an increase in global participation outside of the region, including 11 National Oil Companies, CEO/MD’s plus their delegations from Mozambique, Nigeria, Côte d’Ivoire, Senegal, Uganda, Angola, Cameroon, Ghana, Liberia, Equatorial Guinea and Gambia, the event naturally

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evolved and expanded for 2020 and for its fourth edition to become the Sub Saharan Africa International Petroleum Exhibition and Conference (SAIPEC). Hosted by the Petroleum Technology Association of Nigeria (PETAN) and directed by an esteemed steering committee made up of some of the sector’s most senior thought leaders, the event remains the only truly industry-led event, held in partnership with the country’s petroleum sector.

* Over 3,600 attendees in 2019

SAIPEC annually delivers a mix of highlevel strategic sessions and discussions on game-changing solutions, combined with an international exhibition and unrivalled networking opportunities.

The Programme

In figures… * Delegate participation has increased by from 148 in 2017 – the event’s maiden edition, to 656 in 2019 * A 55% increase in international exhibitors since 2017

Taking place early in the year, SAIPEC sets the pace for the Sub Saharan Africa oil and gas sector moving into the year, designed specifically to be a solutions conference and a platform for the very best representatives to come together and discuss, deliberate and share their insight and knowledge towards creating beneficial strategies for the betterment of all areas of the industry.

Spread across three days, the SAIPEC programme will bring together global industry representatives to discuss, debate and share their knowledge and expertise, through a mix of technical and strategic sessions. The conference theme for SAIPEC 2020 is ‘Oil and Gas as an Enabler for Economic Transformation in SubSaharan Africa’ with a programme that focuses on the critical issues affecting the oil and gas industry in Sub-Saharan Africa

* Over 50 speakers made up the 2019 programme

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INDUSTRY EVENTS

New Features and Unparalleled Line-Up to Drive Programme for Africa Oil Week 2019

today and how to create value and use energy as an enabler for economic transformation, industrialisation and growth instead of as rent. Once again, the event will assemble seasoned industry stakeholders and experts who will dissect this theme from their perspectives and experiences with organisations from a wide range of countries that will be participating, sharing their opportunities, learning points and areas open for exploitation and cooperation. Exhibition and Networking Again, following huge demand, the 2020 exhibition has doubled in size this year, welcoming an audience that rivals all oil and gas events throughout the region, projected to attract more than 200 exhibiting companies. It is designed to give direct access to the primary stakeholders and key players in the Sub Saharan Africa supply and value chains, featuring many leading national and international organisations. In addition, throughout SAIPEC, an emphasis is placed on driving interaction. As well as several networking functions, the event again will feature the exclusive Business Matching service which allows participants to pre-arrange meetings with other attendees through an easy to use technology platform, combined with a personalised service to help maximise networking opportunities. New for 2020 SAIPEC Awards ceremony, which will recognise the fantastic achievement companies are contributing, throughout the region. SA IPEC Women in Industr y: Recog nising women’s involvement in the ever changing oil and gas landscape and how women are helping shape and evolve the energy sector.

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s the leading event for Africa’s upstream, Africa Oil Week is committed to staying at the cutting-edge of developments in oil and gas. Over 1500 delegates, including a record-breaking number of 16+ government ministers will attend the event in Cape Town, taking place between 4-8 November 2019. This year’s programme has been designed to reflect the priorities of a changing sector. Spread over five packed days, it will boast a line-up of more than 200 speakers from government, industry and academia. Conference Producer Catriona McDavid said: “Africa Oil Week has been built on twenty-five years of industry support, and this year we are proud to worked collaboratively with our two expert advisory boards to produce a programme which is truly reflective of the industry’s needs, and which will make Africa Oil Week the premier event for the sector and for Africa.” The new SA Advisory Board for 2019 included representation from: Department of Mineral Resources & Energy, dti, SAOGA, Saldanha Bay IDZ, PetroSA and PASA. The conference’s largest stage, the Plenary, will this year host a wider variety of sessions than ever before, from ministerial panels to supermajors’ strategic outlooks and discussions around driving investment into the African upstream. Delegates will hear from the biggest names in the industry, including Tullow Oil CEO Paul McDade, PGS CEO Rune Olav Pedersen and CEO of ENH, Omar Mithá, to name just a few. In 2019, a fresh focus has been put on the AOWomen initiative, with a series of breakfast roundtables, as well as a panel discussion on the

plenary stage about the topic of inclusive growth across the industry, and potential of advancing the diversity agenda across African oil and gas. Featured speakers include representatives from ExxonMobil, Noble Energy and Maersk Drilling. Additionally, following last year’s success, delegates can expect an extended Finance Forum, catering to NOCs and operators wanting to attract investment, as well as banks and investors who are keen to learn more about Africa’s investment outlook and discover untapped areas. Brand new features for 2019 include the Future Technology & Innovation Forum and the South Africa National Showcase. In the former, service providers, including Halliburton, Schlumberger and NOV, will come together to showcase pioneering technologies aimed to increase efficiencies in the sector and discuss implementation challenges. In the latter, South Africa will for the first-time benefit from a day-long showcase at Africa Oil Week, supported by the dti (Department of Trade and Industry). 15-20 key members of the South African energy community will be featured, whilst the dti will use the event as a platform to outline the department’s commitment to the energy sector. Special day rates are available for South African citizens to attend the showcase on Tuesday 5 November. Africa Oil Week is the leading oil and gas event for the continent, with over 1500 key executives attending from around the world to broker new deals. The global E&P community is brought together at AOW – including governments, NOCs, international oil companies, geophysical companies, independents, investors and service providers. This unique event is a hub for deal-making and networking with senior decision-makers.

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GAS

‘What FGN Must Do to Attract FDI into The Gas Sub-Sector in Nigeria’ – Okoronkwo, Aiteo’s MD policies and lack of clarity on the regulatory landscape occasioned by the non-passage of the Petroleum Industry Bill. Hopefully with the elections now over, government may take steps to help mitigate these challenges. Where are the most attractive opportunities in the Nigerian gas sector at the moment?

n t h is inter v iew g iven to Majorwaves Energ y Report magazine recently in Lagos, the scholarly Managing Director of Aiteo and 1st Vice President of Nigeria Gas Association (NGA), Mr. Victor Okoronkwo highlights the prospects of gas development in Nigeria, its challenges and opportunities. Excerpts: What kind of challenge does the seeking to attract investment to Nigeria gas sector face? The Nigeria gas sector holds enormous investment potential from a resource perspective with over 180Tcf of discovered natural gas reserves. So, the gas sector in Nigeria is robust enough to support growth in both export and domestic markets. Despite numerous efforts, growth in the Nigeria’s gas market seems to have stagnated in both markets. However, recent policy initiatives and pronouncements from the Petroleum Ministry seem to reenergize the sector leading to the increasing hope for the Train7 of the NLNG, the ANOH project development, the transnational AKK pipeline, the Brass Fertiliser project, etc. The sector however, still faces challenges in attracting investments; these challenges can be categorized broadly as follows: Low domestic market offtake due to inadequate infrastructure, high debt owed by the electricity sector impacting major domestic gas suppliers, quasi price control in the domestic gas market, multiplicity of

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Nigeria is resource rich in Natural gas with over 180Tcf of discovered reserves and over 600Tcf of upside potential. Therefore, from a resource perspective, there are lots of attractive opportunities. However due to some and all the factors I mentioned earlier, the most attractive opportunities for NG investment seem to tend towards export-oriented projects, this is mainly because of market uncertainties within the domestic gas sector which is not helped by the huge debt owed the sector by the electricity sector. Even existing market dynamics show that domestic supplies hover around 1.2bcf/d to 1.5bcf/d whereas the export supplies are in excess of 3bcf/d. In fact, new gas developments targeting existing LNG expansion far outstrip the development from ANOH which is being celebrated as the biggest domestic supply project in country. Several studies have shown that with the right environment, the domestic sector to grow to over 3bcf/d in the medium term. So, opportunities to triple the domestic sector exist under the right conditions of infrastructure expansion and downstream utilization projects bankability. Opportunities also exist within the LPG and the virtual pipeline space. Nigerian LPG consumption at less than 2kg per capita is far below the regional average. This provides tremendous investment opportunities, but the government needs to step in to level the playing field amongst local producers and major IOC and NLNG producers, particularly with respect to taxes and infrastructure development like transportation, LPG cylinder manufacturing, jetty and storage construction that will aid market penetration.

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The 10th annual international conference and exhibition of NGA late 2018 spoke to ’shift to gas economypace and scale of innovation in the West African Sub-Region’. What role can Nigeria and/or NGA play in helping to foster the economic revitalization and cooperation in the region using gas? In fact, the terminology shift to gas economy sounds interesting; interesting because the economic recovery and growth plan (ERGP) of the government of Nigeria revolves around the utilization of Natural Gas. Look at the four priority areas enunciated in that plan – Energy Sufficiency, Tra n sp or t at ion, A g r icu ltu re, Manufacturing/Industrialization, the common denominator in all these areas is natural gas. Natural gas is a major fuel for power generation, for transportation and key ingredient for manufacturing fertilizer which is required for Agriculture. Natural gas derivatives of petrochemical products aid manufacturing and industrialization, natural gas is also a preferred fuel choice for generating both electricity and steam required for manufacturing. Really natural gas has a key role to play in unlocking the potentials of the Nigerian economy. So, I think that the ERGP is government’s way of saying we are shifting to gasbased economy without necessarily saying so, but they should say so. The NGA is engaging with ERGP team with a view to reviewing the plan and highlighting the dependency on natural gas. This will therefore give the natural gas the attention it deserves in our journey to economic development. For the West African Sub Region, in this age of global energy transition, collaboration is required at the sub-regional levels for energy optimization particularly around natural gas. There is already a key infrastructure – the West African Gas Pipeline, the countries within the region can leverage this pipeline as enabler for collaboration to ensure the success of the West African Power Pool. Nigeria and indeed the NGA is very well positioned to lead this collaborative effort.

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GAS This effort has indeed started as you saw at the last NGA conference that you referred to. You will recall that there was attendance from Ghana and a few other West African countries. We at the NGA will be working to embed and deepen these collaborations. How can the share of West and Central African gas in Europeâ&#x20AC;&#x2122;s energy mix be increased? The paradox in Africa is that it is resource rich and yet energy deficient. Africa houses about 13% of global population and yet accounts for less than 4% of global energy demand, there is therefore massive potential for African gas to feed the African energy needs. The International Energy Agency in its African Energy Outlook Report estimate that more than 620 million people in Sub Saharan Africa have no access to electricity. In recent times however, there have been substantial discoveries of oil and gas in Africa signaling a global appetite for African energy. The huge gas discoveries in Mozambique and Tanzania coupled with emergence of small to mid-scale producer nations like Ghana, South Sudan, Niger, Kenya, etc. lend credence to this. African traditional major producers like Nigeria, Angola, etc. are also planning capacity additions to their existing LNG export. There is however a looming challenge as the European energy transition shifts more towards renewables, the question will be these African resource rich countries will they find investments capital in good time to develop these resources before the train leaves them behind. Has the expectations of power privatization on the broader gasto-power value chain be impactful? If and/or if not, please address the underlining fact? At the current generation level in Nigeria, the average per capita electricity consumption is estimated at an abysmally low level of 120KWh. The Nigerian electricity grid generation hovers around 4500MW whereas suppressed grid demand is estimated to be over 23000MW, closing the gap, has remained the dilemma of the Nigeria Electricity Supply Industry (NESI). This is in spite all the www.majorwavesenergyreport.com

attention and investment that has gone into that sector since the passage of the Electricity Power Sector Reform Act (EPSRA) in 2005. A recent report by the Nigeria Economic Round Table on Power estimates that Nigeria losses about $29.3bln annually due to lack of adequate electricity supply. This statistic therefore begs the question of the impact of the electricity power sector reform in the past 14years. In fact, experts within the sector have identified liquidity issues creating a market shortfall of over one trillion naira as a key factor. Other challenges impacting the gas to power sector include foreign exchange challenges created by the slide of the naira from around 180 to a dollar down to nearly 500 to dollar and now stabilizing at about 360 to a dollar in recent times. The gap created by this slide has left a huge whole in the books of the industry players. This power sector liquidity challenges have led to huge debt owed to the fuel gas suppliers to the power sector, The NESG Power Roundtable sees the power sector liquidity issue as the most pervasive across the entire gas to power value chain. Facilities granted by money deposit banks to the power sector constitute significant portion of their nonperforming loan portfolio, making it difficult for the sector to attract more loans. The other major factor is the MYTO tariff which has become non cost reflective occasioned by the foreign exchange gap. Some reports claim that the tariff gap is in excess of 1.3trillion naira and growing. These cocktail of liquidity issues make it difficult for the distribution companies to make the necessary investment to curtail losses and improve metering. What is the biggest misconception fund manager have regarding investing in the gas segment of the economy and what will be your advice in other to change the narrative? Natural gas is fundamentally different from oil, in that the components of the gas value chain are more interconnected, and each must be economically robust for a gas project to be bankable. For instance, the upstream, midstream and downstream components all must viable, as the gas value chain

does not tolerate a weak link. Second fundamental difference is that natural gas must have a market before it is produced. Storage of natural gas is a very expensive venture. Therefore, the nature of the value chain creates challenges not only to the fund managers but also to project developers. Natural gas projects have a longer payback period than their oil counterparts and therefore need patient capital. I believe that if we start to see natural gas in its add value form like compressed natural gas (CNG), liquefied natural gas (LNG), gas to products like fertilizers, etc., then fund managers may begin to see the projects end to end and therefore more amenable to participating in gas development projects. What tangible impacts do you want to see happen with the gas flare commercialization program championing from Ministry of Petroleum? The Gas Flare Commercialisation program is the plan set out by the Ministry of Petroleum Resources to implement provisions of the gas policy on Prevention of Waste and Pollution. It is a laudable initiative in that it will provide avenues to commercialize hitherto uneconomic associated gas flares. The model of allowing mid-stream entities into the scheme is a game changer that will allow upstream companies segregate their investment but the risk of reservoir performance and the vagaries of oil production in our clime persist. This is a challenge, and it will be interesting to see how investors will mitigate these risks. It will be advisable that midstream players fully understand these risks as they are largely dependent the projections of the upstream producers for the economics of their projects. In a success case, this program lends itself to encouraging the virtual pipeline strategy that will help in bridging the gap in the natural gas infrastructure domain. Another issue of clarification will be how this fit into the mandate of the gas aggregation of Nigeria (GACN) and whether this will help the upstream companies meet their domestic supply obligations.

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GAS

How transparent and sustainable do you feel the current gas policy is in Nigeria? What is creating the buzz now is the implementation of the flare gas regulations pursuant to the gas policy on Prevention of Waste and Pollution. This implementation is otherwise known as the Gas Flare Commercialization Program (GFCP). Transparency is no longer an issue as the policy has been issued and there has been quite an impressive press and advocacy generated around it. GFCP has been a subject of discussion at several professional fora, so whether enough industry engagement was under taken prior to its enactment is now water under bridge. Commercialization of associated gas which is the focus of the policy has been treacherous for upstream companies particularly when the associated gas is in remote areas without access to market. The cost of processing and delivering the ‘stranded’ associated to market has always been way outside the envelope of domestic gas prices as declared by the government. The sustainability therefore of the implementation program will depend on how the subsurface risks, the above ground risks and the processing and transportation costs are accommodated in the ultimate pricing of the 14

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associated gas to the end user. One point to note however is the limited volumes of these associated gas pockets which lend themselves to small scale individual projects. These projects must prove independently economically robust to attract investments and their sustainability will be based on the risk management, market ability to pay economic prices and the stability of the associated oil production. Over the long term, could the further emergence of non-carbon renewables weaken the position of gas in the global market? This is an interesting point in that in recent times, there is more investment going into electricity globally than into Oil and Gas. Electricity demand is growing faster than demand for oil and gas consumption. It is estimated that over 1 billion people globally have no access to electricity, so there is still a huge demand gap that can disrupt the dominance of oil and gas as primary energy source. The world is moving towards less carbon intensive fuels that will ultimately alter the global energy mix. This means that renewables like wind, solar, hydro, geothermal, biomass etc. as primary energy sources will gain more market share against fossil fuels like oil and coal. Advancements in technology is also helping to

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bring down costs particularly in the solar energy domain for PV cells and batteries. The advancement in battery technology is giving impetus to the growth in the electric vehicle (EV) domain. With increasing penetration of EVs, component fossil fuel transportation will decrease. However, whether this emerging trend will weaken the position of natural gas in the global market will depend on the scenario under consideration. But there are certain ‘knowns’: 1. the global demand for energy will continue to increase with increasing human prosperity aided by technology. 2. As the emerging economies continue to industrialize their demand for electric energy will increase. 3. Electricity generation will constitute the large chunk of the energy demand, so the world will continue to electrify, 4. The global challenge therefore will be to balance within a world of more energy and less carbon. Consequently, soon the world will experience displacement of liquid fossil fuels in favour of natural gas which has relatively low carbon emission intensity, more abundant and relatively cheaper on value basis. So, in my opinion, natural gas will remain strong in the global energy market and indeed fill some of the gap left by liquid fuels as the global energy mix continues to achieve that balance of more energy and less carbon. www.majorwavesenergyreport.com

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LOCAL CONTENT

NCDMB Acquires Equity in Azikel’s 12000bpd Modular Refinery

h e N i g e r i a n C o nt e nt Development and Monitoring B o a r d (NC DM B) h a s recently acquired equity in the 12,000barrels per day Azikel Hydroskimming Modular refinery being constructed by Azikel Petroleum Limited at Obunagha, Gbarain, Bayelsa State. When completed and operational in 2021, the refinery will produce about 1.3million litres of premium motor spirit (petrol) as well as diesel, kerosene, mixed liquefied petroleum gas (cooking gas) and a small percentage of heavy fuel oil. The Executive Secretary of NCDMB, Engr. Simbi Kesiye Wabote and the Director of Finance and Personnel Management, Mr. Isaac Yalah signed the Shareholders Agreement and the Share Subscription Agreement during a ceremony at the Board’s office in Yenagoa, Bayelsa State, while the President of Azikel Petroleum Limited, Dr. Eruani Azibapu Godbless and Vice President, Mr. Presley Asemota signed for the company. Wabote described the Azikel modular refinery as the second and largest so far in the Board’s portfolio of support for the construction of modular refineries, noting that the partnership had huge prospects in jobs creation, value retention, petroleum products availability and in the development of in-country capability. He added that ’’the project fits perfectly with our vision to serve as a catalyst for the development of Nigeria’s oil and gas sector.”

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He said NCDMB was in the final stages of commencing partnership in the development of another modular refinery in Calabar, Cross River state before the end of 2019. According to him, ’’we are proud to be part of the journey to wean off our dear country from massive importation of petroleum products. Our data analytics show that we can more than double the contribution of the oil sector to the Gross Domestic Product if we achieve the current growth trajectory with the refurbishment of existing refineries, completion of the Dangote Refinery, and ongoing modular refineries, to bring refining to about 50 percent of our oil production capacity from the current level of below 20 percent.” The Executive Secretary further explained that the Board’s intervention extends to gas processing and utilization and it had progressed discussions with partners on the establishment of LPG cylinders manufacturing plant, LPG depots, and gas processing facilities. ’’One of the projects of interest is the establishment of an Inland LPG Depot in Abuja to complement Federal Government’s LPG Penetration Initiative. This project is part of the gas value chain as it utilises condensate which is one of the bye-products from gas processing.” He commended President Muhammadu Buhari for his foresight in approving the licensing of modular refineries as a strategic solution for promoting local refining of petroleum products, job creation and industrialization. He also announced that Shell Petroleum

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Development Company (SPDC) would partner with Azikel Refinery by providing it crude feedstock from its oil fields. In his comments, Dr. Eruani described NCDMB’s partnership in the modular refinery project as historic, highlighting that the Board has gone beyond its role as a regulatory agency to also serve as a catalytic agent to develop the infrastructure needed to address insufficiency of refined petroleum products in Nigeria. ”The equity participation from NCDMB sends positive signals not just to the local people but to the international community. This confirms to the international community that the Nigerian state is ready to revive the economy and that Bayelsa State is well positioned to ensure that more investors come in and domicile their investments.” He noted that the company was licensed in 2015 as part of the current administration’s efforts to liberalize the downstream sectors for private participation and it had maintained the lead among 36 other licensed modular refineries. Eruani confirmed that products from Azikel Refinery would meet the petroleum needs of residents in Bayelsa and the Niger Delta region, noting that ”we are creating industrialization and employment, rejigging the economy of the Niger Delta people and Bayelsa State.

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LOCAL CONTENT

Waltersmith’s Modular Refinery Begins Operation Q2 2020-Wabote

he 5000 barrels per day modular refinery being developed by Waltersmith Refining & Petrochemical Company Limited with equity investment from the Nigerian Content Development and Monitoring Board (NCDMB) would be completed in May 2020. This date was confirmed by the Executive Secretary of NCDMB, Engr. Simbi Kesiye Wabote and the Director of Finance and Personnel Management, Mr. Isaac Yalah inspected the project site on Monday at Ibigwe, Imo State, in company of the Chairman of Waltersmith, Mr. Abdulrasaq Isah and the Executive Vice-Chairman, Mr. Danjuma Sale. The progress completion of the project stands at 65 percent, seven percent ahead of the original schedule. The engineering and procurement components had also been completed, with construction at 60 percent. Giving his assessment after taking a tour of the site, Wabote described the project as investment channelled in the right direction. He hailed the contractors-Lambert Electromac and Zerock for their remarkable pace of execution, dedication and expertise, noting that they continued with the project despite the onset of the rainy season. He also expressed delight www.majorwavesenergyreport.com

with the high number of Nigerians working on various aspects of the project, stating that it underscores President Mohammed Buhari’s commitment to create employment for young Nigerians from the activities of the oil and gas industry. “I hope similar projects would come on stream pretty soon to generate employment for Nigerians.“ In line with the requirements of the succession plan requirements of the Nigerian Content Act, Wabote charged the contractors to train and absorb more Nigerians in senior management positions and make them permanent members of their companies, even after the project phase. Wabote also noted that the Ibigwe modular refinery was the first of such projects to be undertaken by the NCDMB and Watersmith and hinted that the Board had sanctioned another modular refinery project to be developed at Calabar, Cross River State. In his comments, the Chairman of Waltersmith thanked the Executive Secretary for the visit and affirmed that the company was satisfied with the quality of work from the contractors. He also noted that Waltersmith had been steadfast on its obligations to the firms. “We expect you to remain consistent with

us as well. But we are very happy with what we have seen and we are looking forward to commissioning and beginning to sell diesel and kerosene from this site in May 2020.” The Project Manager of Lambert Electromac, Mr. Mohamad Chit stated that all outstanding construction at the site were above the ground and being fast tracked. He stated that the installation stage is expected to take four weeks when it begins in October 2019. Chit also said the modular refinery project begun on a good footing with the host community and had continued to enjoy conviviality from the local population. The Board and Waltersmith signed the equity investment agreement in June 2018. Wabote had explained at the ceremony that the investment decision was in line with the Board’s vision ‘to be the catalyst for the industrialization of the Nigerian oil and gas industry and its linkage sectors.’ He added that the Board was also keen to support the Federal Government’s policy on modular refineries and meet the key objectives of the Petroleum Industry’s Seven Big Wins launched by President Mohammed Buhari in October 2016 and the Economic Recovery and Growth Program (EGRP)

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LOCAL CONTENT He also told the Ugandan delegation that Local Content needs the participation of foreigners and Foreign Direct Investment to thrive and that Local Content is not Corporate Social Responsibility, rather it promotes the domiciliation of value-adding activities. He also stated that Local Content requires support of government at the highest level and should not be interpreted as an effort to nationalise foreign businesses.

Abdulmalik Halilu

Nigeria Mentors Uganda on Local Content Implementation

he Nigerian Content Development and Monitoring Board (NCDMB) have begun to provide guidance to the Ugandan Petroleum industry on the implementation of Local Content in their budding oil and gas industry. A nine-man delegation drawn from four different agencies in the Ugandan Petroleum industry visited the (NCDMB) recently to understudy the implementation of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act in the oil and gas industry and seek counsel on how to implement a similar policy in their country. Leader of the delegation and Head of National Content, Petroleum Authority of Uganda (PAU), Mrs. Betty Namubiru explained that Uganda discovered oil in commercial quantities in 2006 and had a reserve base of about 6 billion barrels. She added that her nation was currently developing its oil and gas facilities, perfecting its policies and conducting studies on the best methodology to adopt in extracting and managing its petroleum resources. She indicated that the Ugandan oil sector needed an investment inflow of US$35bn and was expecting US20bn over the next three years. She underlined that the visit to NCDMB was intended to enable the participating officials understand key areas to focus 18

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on in their National Content drive, so the nation could derive maximum in-country value from the projected investments. She added that “Uganda has a long standing relationship with Nigeria and this is just the beginning because our oil and gas sector is just evolving. We want to learn more about the steps you took in setting up your 10-year roadmap to grow Nigerian Content to 70 percent.’’ Welcoming the delegation, the Executive Secretary of NCDMB, Engr. Simbi Kesiye Wabote stated that Nigeria is one of the leading nations in the world petroleum industry and is very advanced in the area of Local Content. Wabote who was represented by the General Manager, Research, Strategy and Development, Mr. Abdulmalik Halilu stated that Nigeria was happy to share knowledge on its Local Content practice and provide guidance to Uganda and other African countries in their quest to improve Local Content implementation.

Providing details on the Board’s Project 100 initiative, Halilu advised Uganda to “look at how to identify some companies that have come up without any assistance and develop some interventions to take them to the next level.” He also advised the team to ensure that every major oil and gas project in their country is designed to leave a legacy investment behind. In his comments, the General Manager, Capacity Building, NCDMB, Dr. Ama Ikuru stated for Local Content to succeed in Uganda, the administrators must insist on industry activities being executed in-country, as that would enable the indigenes to participate and acquire skills. He advised the Ugandan officials to focus on human capacity development and equip their indigenes with specialized skill sets required to work in the oil and gas industry. This is important he said, because the cost of manpower often accounts for between 20 to 25 percent of the operating costs of the industry. “If you can take that chunk, you have already improved your domiciliation.” He also stated that 35 percent of industry budget is normally expended on equipment and assets, adding that Nigerian Content tries to capture that spend by giving first consideration to Nigerian companies that own vessels or manufactures vessels locally

Making a presentation on the activities and achievements of NCDMB, Halilu stated that certain parameters were necessary for sustainable Local Content implementation, listing them to include gap analysis of the industry, capacity building, regulatory framework, incentives and research and development.

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LOCAL CONTENT

Bayo Ojulari

It’s Time to jointly Tackle the Big Elephant in the Room called Corruption - Ojulari, MD SNEPCo

t the Nigerian British Chamber of Commerce organised workshop on Local Content, which held in June at the Four points by Sheraton hotel, Lagos, the Managing Director of SNEPCo, Mr Bayo Ojulari advised industry professionals to take bold steps and jointly tackle the elephant in the room by shunning corruption. He alluded to a recent encounter in Abuja, where the Vice President of the Federal Republic of Nigeria, Professor Yemi Osibajo decried the multiplier effect of corruption on the nation. Mr Ojulari explained that, sharp practices for personal benefits which leads to inflation of the cost of contracts, has the potential of making the country inconducive for doing business. He linked the ease of doing business index to a disadvantaged cost structure occasioned by inflated contract. He noted that, it undermines the collective effort towards building a low-cost region thus failing to be better than other countries. “If we carried out a transparent analysis of cost structure, making it public with regulators and

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comparing with other regions like Ghana, South Africa, Angola, and Brazil, you will notice a disparity. This happens because of corruptioninduced inflation,” he stated. “The practice of everyone adding his own bit to the project cost for personal gains will eventually scare away investors. No investor will want to bring his vessel or investment here. We must think about our children, our cousins too. Will they even have contracts that will sustain them when the FDIs are no longer coming?” Concerning regulations to help promote local content development, Mr Ojulari said, “At Shell, we are accustomed to staying ahead of regulations, and it has given us a sustained advantage. It is stepping forward early into unchartered waters. While regulation is a good reference point, pursuing business value will help you achieve more by unlocking opportunities you never imagined, while still staying above regulations.

“

Though there’s nothing wrong with taking advantage of regulations, it is a mediocre mindset,” he added.

The SNEPCo chief executive expressed concern about sustaining the nation’s local content benefits via talent retention. He noted that companies invest heavily in training, but afterwards, the built human capacity is lost when these skilled individuals relocate outside the country. “About 70 per cent of our trained human capacity move out of the country. Let’s not talk about the mass exodus with our doctors, but the oil and gas industry is beginning to have its fair share and we need to do enough to stop the trend in order to benefit from the local content we pursue,” he explained..

Ranti Omole

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INTERVIEW

‘We are Collaborating with Operators to Create a Friendly Business Environment’

n frien d ly reg ula tor y environment has been d escri b ed as a major impediment to the growth of the nation’s maritime sector. I n t h i s i n te r v i e w h e l d o n the sid elin e o f the O f fs hore Tec hnolog y C on ference, in H o u s t o n , Te x a s , D a k u k u Peterside, the D irector G eneral of the Ni gerian Maritime Safety and A d mini s tra tion , NI M A SA sp ea k s on how the A genc y i s w o rk i n g wi th o p e ra to rs to create a friendly business environm en t. E x cerp t: The Panel session here discusses Deepwater O p era tion s in Ni geria: T he Jo urn e y S o Far; co uld yo u please tell us the experience so far from th e Ni geria n Mari tim e p oin t o f view? You can’t talk about Deepwater develop me nt w it hout t a l k i n g a b o ut t h e r o l e o f m a r it i m e, right from seismic data decision t o d r i l l i n g p r o p e r, s t o r a g e . It’s a l l a b out deploy ment of ma r iti me a s sets to explore oi l in the deep Waters. T he E g ina F PSO that we talk about today is a maritime asset because the ma r iti me body i n the countr y g ave c o n s e nt, a p p r ov a l s a n d the neces sa r y l icense to sa fely berth and contribute to growth. But onshore deep water br ings opp or tu n ity for u s to bu i ld capacity to our inspection d i v i s i o n a n d to d e ve l o p o u r

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Ma r i ners and other c ap a bi l it ie s i n the offshore vessel industry. Again asides bui ld i ng c a p a c i t y, i t g i ve s a l ot o f oppor tun ity for Nigerian f i r m s to bu i ld capacity and i n ma ny other d i mensions. Now what is NIM A SA doing to serve as an enabler for the growth of maritime industry in Ni geria? One i s reg u lator y refor m s. Reg ulations must not be hosti le; they must be f r iend ly to spur economic g row th. We a r e a l s o c r e a t i n g a l o t of i nc ent ive s to enc ou ra ge a num ber of loca l players to get i nvolved i n the loca l ma r iti me i ndustr y. Mea nwhi le, we have a re spon si bi l ity to reg u late the C a bota ge reg i me which means that some of these assets a re dema nded to be bu i lt by Nigerians , manned by Nigerians a nd ow ned by Niger ia ns . S o, we a re conscious of this a nd the need to build capacity over ti me, s o we a re encou ra g i ng Niger ia ns to bui ld capacity to ma n a nd ow n s ome of t he s e assets, we are creating the right reg u lator y env i ron ment for Niger ia n loca l f i r ms to thr ive a nd I t h i n k t hey a r e t a k i n g adva nta ge of it. You ca n see that lot of Niger ia n ma r iti me players a re doi ng g reat thi ngs and the world is acknowledging ou r contr i butions. As the D G of NIM A SA , what are yo u p u ttin g in place to en s ure tha t som e o f o ur local mari tim e players ri se up to m ee t in terna tiona l S tan dard s? JULY 2019, Vol 2 No 4

We have discovered that one of the is sues we have is capita l so we a re dea l i ng w ith is sue of acces s to capita l. Apa r t f r o m t h i s , t h e ot h e r o n e i s Huma n capacity, we a re a lso encoura g ing them to build capacity because i n this ca se, they can’t built capacity if they d o n’t h ave p e o p l e to ut i l i s e it, a nd prov ide oppor tu n ity to g row thei r busi nes s. S o i n three dimensions, we are giving t h e m e a s y a c c e s s to c a p it a l i n b u i l d i n g t h at c a p a c it y to en ha nce sk i l l s a nd of cou r s e i n cre at i n g opp or tu n it ie s for them to bui ld thei r busi nes ses a nd f i na l ly creati ng the r ig ht regulatory environment. Regulations should suit business in growth without endangering the Environment and the people. Wha t i s the Up da te on th e i m p lem e n ta ti o n o f th e C a b o ta ge A c t a s well a s th e F u n d i n th e M a r i ti m e S ec tor? Wel l on the ca bota ge, we a re pa r tner i ng w ith the Niger ia n C ontent Development a nd Mon itor i n g B o a r d, putt i n g a lot of initiatives in place; one of such is that we have a common vessel categorization right now. Two, we have conducted a lot of ship building and ship repair ya rds i n the countr y w ith the a i m of suppor ti ng them w ith f unds a nd ma ny ways to g row our i n- countr y capa bi l ities i n bui ld i ng ships, a nd of cou rse you know we are involved in the Nigerian Seafarers Development prog ra m because we wa nt to build the capacity of our people on the ocea n a nd ma n it. A l l of these a re to build sk ills a nd ena ble our people deploy these sk i l l s to g r ow ve s s el s, g r ow capacities a nd create jobs for the people. We a re rev iew i ng the Nigerian Ship Reg istr y to m a ke it bu si ne s s f r iend ly a nd responsive so a num ber of ves sels wou ld come on boa rd www.majorwavesenergyreport.com

INTERVIEW o u r r e g i s t r i e s , t h at w ay w e wou ld g row ou r ton na ge a nd suppor t the loca l sh ip ow ners. We a re lo ok i n g at a nu m b er of i ncent ive s, i nclud i ng t he fact that we a re enga g i ng the C BN to cre ate a si n g le d i g it i ntere st faci l ity. You k now it is capita l intensive. If we don’t g ive people acces s to f und at a competitive rate, they ca n’t compete w ith foreig ners i n the industr y. We are talking to the Federal Ministry of Finance and Customs to also create a special tariff scheme so that they can be bringing vessel parts and vessels i nto the countr y. Cur rently i f you a re br i ng i ng i n ves sels for temporary work permit, you pay just one per cent. Nobody ca n c omp ete when t he for ei g ner s b r i n g i n t h e i r ve s s e l s u n d e r temporar y work permit and pay just 1 Per cent, work a nd go aw ay, w h e r e a s y o u b r i n g i n ves sels a s a Niger ia n a nd get to p ay 13 Per c ent. We a r e a sk i ng the M i n istr y of F i na nce a nd cu stom s to rev iew that r e g i m e. A s i d e s t h at , we a r e creati ng other i ncentive s l i ke CV FF, trying to bring down the cost of acces sing f unds; we a re also supporting our local players i n other a rea s. U lti mately, the bigger thing is we want to grow Niger ia n ton na ge. We wa nt to own more vessels, we want more Niger ia ns to ow n more ves sels, we wa nt Niger ia ns to be active i n the i ndustr y a nd wa nt more people to be employed i n the i ndustr y. C o u l d yo u g iv e u s a n i d ea o f the size o f the C a b o ta ge fund? Also, a lot of operators are complaining about th e c u m b ers o m e n a tu re i n accessing this fund. What do yo u have to say a b o u t tha t? We a r e c u r r e nt l y r e v i e w i n g the g uidel i nes concer n i ng the CVFF. I think the bigger picture is to secure the f unds so that more f i r ms ca n acces s it. T he bigger picture is that this f und s h o u l d b e a b l e to c r a s h t h e cost of acces si ng f unds i n the a c q u i s i t i o n o f a s s et s a n d i n bui ld i ng i n f ra str uctu re i n the ma r iti me i ndustr y. T he si ze is fa r a bove 150 mi l l ion dol la rs. We hope that deployment would start in earnest and our presence wou ld b e felt th roug hout the leng th and breadth of our ter r itor ia l waters. www.majorwavesenergyreport.com

A re yo u impressed wi th the jud gem en t yo u’re gettin g in the co urt o f law in the area o f prosecu tion? Wel l, it’s not a bout judg ment. It’s about the fact we don’t have the right legal framework. I’m sure you are aware that NIMASA is pushing for early passage of a dedicated A nti Piracy Bill and I a m g lad to say that the House of repre s entative s ha s pa s s e d the E xecutive bi l l awa iti ng c onc u r r enc e of S en ate a nd I am optimistic that Senate would concur to the version passed by t he Hou s e a nd t he P re sident wou ld g ive a s s ent. O nc e t he president g ives a s sent, for the f i rst ti me Niger ia wou ld have a de d ic ate d A nt i P i rac y L aw a nd t hat wou ld prov ide u s a right legal frame work to tackle piracy and prosecute those who a re caug ht i n the act. I thi n k that a l l a long, there ha s been a gap i n prosecution of these g uy s i n t he le ga l te a m work that we a re beg i n n i ng to close w ith the pa s sa ge of the Bi l l by House of Representatives and we hope the S enate wou ld concur a nd that M r P resident wou ld a s sent to it. Issues around the I bom D eepwa ter project has b een on the ta b le for so lon g, a t what level is the project and again quite recently the issue between NIMA SA and NL NG p o p p e d up a ga i n , a t w h a t l e v e l i s th e r e c o n c i l i a ti o n process? T he empha si s of t he cou nt r y ha s beg un to shif t to deep seapor t; we wa nt to have r iver por ts, i f we wa nt bigger ves sels to come in then we shou ld have deep seapor ts. For us a s a reg u lator y a gency, we supp or t t he development of a l l t h e d e e p s e a d e v e l o p m e nt projects that a re on-goi ng now a nd we wou ld conti nue to play our reg u lator y oversig ht. T he second thing is the seeming d i s a g r e ement b et we en N L NG a n d N I M A S A . We a l l h a v e approached the court that please can you interpret the content of the law i n the context a sk i ng ves sels ca r r y i ng ga s or com i ng i n to t a ke g a s to p ay 3 p er c ent lev ie s on f rei g ht s? We don’t h ave a ny q u a r r el s , we have no is sues, it is a f r iend ly disagreement and we are saying

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cour t is i n the best position to i nter pr et t he p o sit ion of t he law. We a re i n the C ou r t of appea l a nd they sa id wou ld y o u t a ke t h i s i s s u e b a c k t o t h e t r i a l c ou r t s o it c a n b e retried again, we have accepted our side, whatever position the court held earlier ; because they d id n’t dea l w ith it su bsta ntive i s sue. T he ma i n i s sue wa sn’t resolved, they went outside what they were supposed to resolve. S o let the status q uo rema i n, L NG you conti nue to pay your 3 per cent lev y to NIM A SA and 2 per cent cabotage charge until cour t resolves the is sue. Wha t wo uld yo u say i s the level of security on our Wa ter ways? We l l e v e n t h e I M B , t h e i nter nationa l Ma r iti me Bu reau i n Ma laysia ack nowledged that there have been i mprovements i n s e cu r ity on t he Water s of Niger ia. A lthoug h it is not at the level we wa nt yet, we a re ver y concer ned a nd a re work ing w ith our pa r tners, Nigerian Port Authority (NPA) a nd Niger ia I n la nd Water ways Authority (NIWA) and all other s t a ke h o l d e r s i n t h e i n du s t r y to see what we ca n do to i mprove the secur ity situation on our Water ways, that is why deploy ment of t he D e ep blue project is very important, which we a re ver y focu sed to see throug h. So what’s the future outlook for NI M A SA? T he f uture look s ver y br ig ht. A s oi l production moves closer i nto de ep of fshor e, s o wou ld a lot of ma r iti me players get involved? We would continue to en ha nce our contr i butions a nd bu i ld c apacit y of ou r p e ople. L ately, # we’ve b e en fo cu s e d on bui ld i ng a lot of a s sets i ncountr y a nd the E g i na project ha s show n that w ith support, a lot of these a s sets ca n be bu i lt i n- cou nt r y. Va r iou s mo du le s of

the E g i na F PS O were i nteg rated i n cou ntr y, thoug h the core it sel f wa s bu i lt i n Korea, a l mo st a l l the modules were integrated in-country. It’s a matter of time, if we keep the r ig ht encou ra gement a nd the r ig ht attitude, we would be able to build a lot of FPSOs in-country. We want to build FPSOs in- country, deploy

them here a nd create jobs a nd oppor tun ities for our people. Energy Report JULY 2019, Vol 2 No 4 21

INTERVIEW

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SOCIAL INVESTMENT

OVH Energy Backs Youth Entrepreneurship Project

V H E n e r g y M a r k e t i n g L t d ., a n Oando Licensee, h a s a n n ou n c e d t h at it is the official fuelling pa r tner of Niger ia’s foremost entrepreneu r ia l rea l ity T V show, the Next T ita n Niger ia, S ea son si x. T he Next T ita n Rea l ity Show prov ides a platfor m for young, creative entrepreneurial Niger ia n youth to pitch thei r bu si ne s s ide a s to a c a ref u l ly selected panel of judges, comprised of successful business ow ners. T his sea son is ta gged “I mp o s si ble i s Po s si ble” a nd w ill air for ten weeks in which the contesta nts w i l l battle for the u lti mate pr i ze of 7 mi l l ion naira and a brand new car whi le undergoi ng tra i n i ngs i n entrepreneurship and exposure to real-life business challenges. S p e a k i n g o n it s s p o n s o r s h ip of the rea l ity show, Head of C or porate C om mu n ication s, OV H E nerg y M a rket i n g Ltd. Olajubu Olasunmbo said,

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“OV H E n e r g y i s p l e a s e d t o be the off icia l f uel i ng pa r tner of the Next T ita n sea son si x. We a re e sp ecia l ly plea sed to b e s up p o r t i n g e nt r e p r e n e u r s who have rea l istic v isions for c o nt r i b ut i n g to j o b c r e at i o n a n d e c o n o m i c g r ow t h w h i c h ha r monizes w ith our v ison to be the ma rketer of choice, p r ov i d i n g t r u s t e d p et r o l e u m products”. She f u r ther added that OV H E nerg y h a s demon st r ate d it s commitment to suppor ti ng i n itiatives that a re ta rgeted at youth. She sa id, “Withi n our ow n sp ac e, we h ave c r e ate d i n itiative s that suppor t the youth. For i nsta nce, we have t he ‘ S o You T h i n k You c a n Wr ite’ c omp et it ion wh ich help s conte sta nt s showca se t hei r w r it i ng p otent ia l a nd our O-Ga s sponsored debate at N YSC ca mps which sti mu lates intellectual debates around the u s e of cle a ner s a fer c o ok i n g a lter nat ive s. We b el ieve t h i s prog ram is desig ned to support t he ent r epr eneu r i a l spi r it of

youth to harness their business potentia l which is why we a re happy to be a pa r t of th is”. A bout OV H Energ y Ma rketi ng OV H E n e r g y M a rket i n g i s Ni g e r i a’s l e a d i n g i n d i g e n o u s oil marketing retailer, formerly k now n a s Oa ndo Ma rketi ng L i m i t e d (w i t h d i s t r i b u t i o n capacity of over 2 billion litres of f uel s repre s ent i ng 13% of nationa l a n nua l consu mption). OV H E ner g y i s pr oud to continue offering its customers sustainable high quality products and services including s u p p l y r e l i a b i l i t y, t e c h n i c a l expertise and unmatched cu stomer s er v ice s nat ionw ide a nd acr o s s t he We st-A f r ic a n su b -reg ion.

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MAJOR SPOTLIGHT

‘In All Modesty, Kabelmetal is the Most Successful Cable Company As Far As Oil & Gas Projects and Maintenance Business Is Concerned’ – Robert Kretschmer Robert Kretschmer

r . R o b e r t K r e t s c h m e r i s t h e M a n a g i n g Director and Chief Executive Officer of Kabelmetal Nigeria Plc., a foremost cable manufacturer in the co un tr y since 19 6 6 . Kab elmetal Ni geria Plc has b een a d mired for i ts ca b le ma kin g e xp erti se for more than 5 0 years. The company ha s es ta b li s hed i tself a s th e l e a d e r a n d p i o n e e r i n the Ni gerian ca b le mark e t b eca use of its drive for excellence in quality of p r o d u c t s a n d p a s s i o n fo r innova tion . In thi s e x cl usive in terview with the Majorwaves E n erg y R ep or t team , Mr Kretschmer speak s about the gian t strides of hi s company most especially as it concerns Nigerian C on ten t d evelopm en t; he says Ka b elm etal i s well p o s i ti o n e d to e x e c u te a n y projec t. E x cerp ts: A r e t h e r e p r o j e c t s y o u’ v e iden ti f ied an d have b uilt capacities to take advantage of? Can you give specif ic e xamples? Ye s. We c ont i nu a l ly s e ek to expa nd the threshold for ou r lo c a l content pa r ticipation. We have prepa red a road map 24

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for loca l production of F PSO topside cables and are awaiting the busines s oppor tunity to implement the plan. We are also work i n g on pro duci n g c a ble s for integration into Umbilicals. We h av e d e v e l o p e d c a p a c it y f o r S o l a r ( P h o t o v o l t a i c) C a b l e s . I n ge n e r a l, we te n d to focus ou r R & D (Resea rch a n d D e v e l o p m e n t) o n n i c h e p r o duc t s/s e g me nt s whe r e we can grow competitive advantage by increasing value proposition to our customers i n the Oi l & Ga s i ndustr y. S eq uel to NO G OF, wha t capacities are you targeting for the future and wha t have you done so far in tha t regard? We hope to do a d r y r un for each of those pla ns I ea rl ier mentioned, a s the pip el i ne Oi l a nd Ga s projects beg i n to mater ia l i ze. T he pla ns a re i n pl ac e a nd I b el ieve we h ave sha red some of these w ith NC DM B. We were pr iv i leged to play host to the E xecutive S ecreta r y of the NC DM B la st yea r where we sha red some of ou r pla ns w ith hi m. Luck i ly, he h ad i n h i s entou r a ge t he Ni ger ia C ontent M a na ger s of the IOC s a nd major NOC s, s o t h e i n du s t r y i s aw a r e o f o u r p l a n s . Yo u k n o w t h e r e a r e fa c et s fo r e a ch o f t he s e pla ns: Technolog y, sta nda rds, materials requisitioning,

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c apacit y, do cu mentat ion, etc. It is a complex eco-system that ensures that we get it right the first time. Suffice to say that we ca n not ma ke the deta i ls pu bl ic for obvious reasons. But we are conti nua l ly sha r i ng these w ith releva nt bod ies, i nclud i ng the project ow ners. Concerning shipboard c a b l e s , w h a t’s Ka b e l m e ta l presen tly doin g? Maybe we ca n sta r t by tel l i ng you what we have done i n the pa st. K a b el met a l i s t he f i r st a nd on ly Niger ia n compa ny to expor t ca bles to S outh Korea wh ich wa s u s e d to bu i ld si x ships for NLNG. Before we were approved for the project, we had to get Ty pe Test cer ti f ication f r o m L l o y d ’s R e g i s t e r a n d Bureau Ver ita s. We produced samples that were tested in the best laboratories in Europe and c e r t i f i e d a s wo rl d s t a n d a r d. A s to you r speci f ic q ue stion, again I return to our roadmap/ pla n s wh ich I have told you ea rl ier. A s you k now, we ca n’t em ba rk on the pro duction of t h e s e c a b l e s i n a v o i d . We need l ive projects to actua l i ze them. What is important is that we a r e c o nt i nu a l l y p r e p p i n g ou r s elve s a nd ex plor i n g how we ca n ma ke these pla ns more e f fe c t i ve a n d e f f i c i e nt. It i s a l s o u s e f u l t o m e nt i o n t h at we benefit from our close pa r tnership w ith Nexa ns, www.majorwavesenergyreport.com

MAJOR SPOTLIGHT especia l ly its va st Resea rch and Development infrastructure a nd c ap a bi l it y. T h i s obv iate s the lea r n i ng exper ience for us. We have had occa sions where Nexans sent their resource staff to super v ise the production of specia l ca bles i n our loca l f a c t o r y. S o y o u s e e w e a r e doi n g t h i n g s c ont i nu a l ly a nd i ncrementa l ly. T he cable sub -sector is unique. What are the peculiar challenges you face? The biggest challenge we have is fa ke and substandard products. T he Sta nda rds Orga n isation of Ni ge r i a i s t r y i n g it s b e s t to f ig ht the scourge, but it is a n uph i l l b at t le. B eyond t h i s i s the tendency of project ow ners to prefer imported options because of cheaper pr ices. But we a l l k now the cost d r ivers i n Niger ia wh ich ma ke s loca l products to be more costly tha n i mpor ted options. A nd of course there is mu ltipl icity of ta xes a nd gover n ment a gencies ov e r s i g ht – e a c h w it h t h e i r c o s t i mpl ic at ion s. L on g ter m financing opportunity and interest charges are a challenge. Deliveries into Oil & Gas project locations have peculiar security a nd f i na ncia l i mpl ications. S o we lo ok to t he gover n ment under the auspices of the M a nu factu r i n g A s s o ci at ion of Niger ia to see how to a l lev iate these challenges. We know these problems are not peculiar to the ca ble i ndustr y. I f gover n ment can address these, the economy w i l l be the better for it. What are your training plans for Ni gerian en gineers? A re there sophisticated skills for whic h en gin eers have b een positioned to acquire? What ways will it benefit the larger economy? We continually have programmes to train our personnel, both loca l ly a nd internat iona l ly. A nd of c ou r s e e ac h of ou r pla n ne d loca l content expansion road maps has i n- bu i lt k nowledge t r a n s fe r/t r a i n i n g c omp on e nt s . Most of these trainings are foreig n si nce there is no loca l capacity for them. We ca n not underestimate the benefits these tra i n i ngs of fer to the nation; www.majorwavesenergyreport.com

e a c h o f t h e s e p e r s o n n e l l i ve with the knowledge/competence even when they a re no longer with the company. And of course the competence they ga i n w i l l b e appl ie d i n t he t i me b ei ng towards producing quality cables t h a t c o nt r i b u t e s t o n a t i o n a l GDP. L et me a lso mention that K a b el met a l ha s com m itte d to training indigenes from the locations of our project supplies i n vocationa l sk i l ls. We have a pa r tnersh ip w ith the G er ma n D u a l Vo c a t i o n a l Tr a i n i n g prog ra m me i n Niger ia, a nd we look for wa rd to benef iti ng the host commun ities ea rl iest. What support would you req uire from governm en t to b e tter f unc tion? We w a nt t h e g ove r n m e nt to adeq uately tack le the scou rge o f f a k e c a b l e s . We w a n t t h e g ove r n m e nt to s o l ve t h e i ntracta ble por t s clea ra nce problems and the Apapa g r id lock which sti f les the ea se of clearance of goods. We want the government to replicate the s u c c e s s o f t h e l o c a l c o nt e nt pol icy i n Oi l & Ga s i ndu str y b y e x p a n d i n g i t s s c o p e i nt o ot her s e ctor s of t he e conomy (Power, I n f r a st r uc t u r e, I C T, S e r v i c e s , I n d u s t r i e s , e t c). We w a nt t h e g ove r n m e nt to a d d r e s s mu lt ip l i c it y o f t a xe s a n d t h e nu m b e r o f a g e n c i e s t hat over sig ht ma nu factu rer s. We wa nt acces s to long ter m funds at concessionary rates. We want the government to address secur ity is sues at com mun ities we m a ke d e l i ve r i e s i nto a n d en-route. This is a big shopping l i st, i sn’t it? But you a sked, s o you got it. I a m however pleased that we have a listening a nd re spon sive gover n ment that is doi ng a lot i n ter ms of i n f r a s t r u c t u r e. But we w a nt them to do more. How has been your penetration in the oil and gas industry? What has been the narra tive o f yo ur ac tivi ties in lin ka ge sec tors? I n a l l m o d e s t y, w e a r e t h e most succes sf u l ca ble compa ny a s fa r a s Oi l & Ga s projects a n d m a i nte n a n c e b u s i n e s s i s concerned. There is no significant project in the industry requiring ca bles that we have not been

involved in. We made a strategic decision to niche ourselves in the industry because we have unique competencies a nd pa r tnersh ips that our competitors do not have. T he req ui rements, k nowledge, sta nda rd s, docu mentation s, q ua l ity a nd H SE a re h ig her i n the Oi l & Ga s i ndustr y, so it is not a n a l l comers’ ga me l i ke the simple cable manufacturing. S o it occurs to us that zeroi ng i nto t he i ndu s t r y g ive s u s a un iq ue adva nta ge a nd busi nes s oppor tun ity. W hen you ta l k of linkage sectors, there are many f a c e t s t o i t . We c o nt i nu a l l y seek loca l sources for ou r raw mater ia l a nd other i nputs; but we must ensure that it meets c e r t i f i e d s t a n d a r d s . We b u y wooden planks loca lly; we buy l i m ited raw mater ia ls a lso loca l ly. We surely w i l l l i ke to do more but a re constra ined by the lack of local options. Beyond this, all our activities like C SR, Training, and local partnerships have important linkage benefits for the nation. In wha t ways d o es Ne x an s Norway impact the activities o f Ka b elm e tal Ni geria? T hey are important partners to K a bel meta l. We work together w ith Nexa ns Nor way to deepen l o c a l c o nte nt i n t h e a r e a o f subsea product(s) a nd systems. S i m i l a r to s h ip b o a r d c a b l e s , w e a l s o n e e d l i v e c o nt r a c t s for physica l execution i n order to ju st i f y i nve st de ci sion s i n machiner y a nd eq uipment. Other w ise, there is no retu r n on i nve st ment on sp e c i a l i z e d capa bi l ities. W h a t’ s th e n e x t b i g th i n g from Ka b elm e ta l tha t we s ho uld b e e xp ec tin g? We sha l l conti nue to focus on wh at we a r e doi n g a nd s e ek way s to do t he m b et te r. We a re committed to deepening loca l content i n the Oi l & Ga s i ndustr y a nd a re i nvesti ng i n the k nowledge, resources a nd sta nda rd s i n th i s rega rd. We hope project opportunities w i l l c ome s o on to en a ble u s h a r ne s s ou r i nve s t ment s a nd prepa rations.

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POWER

Schneider Electric Signs Renewable Energy MOU with EM-ONE Energy Solutions By Ayobami Adedinni

Mir Islam, CEO, EM-One and Paul-Francois Cattier, VP Economic Development, Africa and Middle East, Schneider Electric

n a bid to create an African mini-grid industry involving de centra l i ze d ele ctr icity generation and distribution networks based on renewable energy, Schneider Electric has signed a Memorandum of Understanding with EM-ONE Energy Solutions, a Nigerian sustainable energy engineering company. For 18 months, led by its sustainability department, the Group has been working to set up an industry based on mini-grids built or operated by local stakeholders. This has led to a first MoU with EMONE Energy Solutions, a Nigerian company that also operates in Canada. “EM-ONE Energy Solutions has already won a contract for 30 mini-grids in Nigeria to power hospitals in Kaduna State, and is also targeting the university and rural electrification market. The MoU concerns Schneider’s support with optimizing the architecture of these projects and developing an industrial platform to integrate these mini-grids into containers in Nigeria and manufacture Schneider Electric mini-grid solutions under licence,” explained Paul-François Cattier, Schneider Electric’s Vice President, Business Development, Africa & Middle East. With sales representatives spread out over 12 countries (Chad, Senegal, Côte d’Ivoire, Tanzania and others), Schneider Electric is

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seeking engineering procurement construction (EPC) companies to locally produce its solutions (e.g. Villaya Community, a mini-grid designed for rural electrification, providing 7-63 kW of power). According to the International Renewable Energy Agency (IRENA), West Africa’s energy consumption could quadruple by 2030 to reach 219 TWh a year, less than half of the 478 TWh already consumed in France in 2018. Part of the solution will come from mini-grids, decentralized networks powered by photovoltaic energy. Demand is high: an estimated 200,000 mini-grids are required to power the continent and reach the United Nations Sustainable Development Goal 7 (“Ensure access to affordable, reliable, sustainable and modern energy for all”). “Rather than importing mini-grids produced in Europe, Asia or North America, we want to create an African mini-grid industry with operators, integrators, investors and local jobs,” Paul-François Cattier said. In the past 10 years, the Group has already installed 700 minigrids in Africa, mainly for rural electrification, through its Access to Energy programme. This has largely been achieved with donations to NGOs and equipment often produced

in Europe. Schneider Electric will provide them with advice on setting up an industrial plant and testing. The Group is also working with public and private funding bodies. It intends to cover the full range of needs with capacities up to 500 kW (enough to power a city of 10,000 inhabitants in Africa) through its standardized solutions, and from 500 kW to 20 MW through specific architectures (for cities of several hundred thousand inhabitants that are without an electricity grid).

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Africa today is comparable to China 40 years ago. In 2050, it will account for 30% of the global population according to the United Nations and could be one of the world’s top 5 economic powers by 2050,” explained PaulFrançois Cattier. The potential for electrification is enormous, not only in rural areas but also for companies who would like their own reliable electricity grid, including banks and their network of agencies and cash dispensers, food and beverage manufacturers, data centres and even electricity providers that currently use power generators and need to switch to hybrid energy production with mini-grids.

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Strengthening the Nigerian Oil and Gas Value Chain for a Sustained Economic Growth Ike Amos

ver the years, the Nigerian petroleum industry, apart from making signif icant contribution to the country’s revenue, has made little impact to the growth and development of the economy. Specifically, in some cases, the inability of the country to reach its full economic potentials had been blamed on the discovery of crude oil and gas in Nigeria. However, this article highlights the opportunities to be derived from effectively creating linkage between the petroleum industry and the Nigerian economy and

Majorwaves Energy Report

also ways the oil and gas value chain can be strengthened for sustained economic growth. The Nigerian petroleum industry has over the years made significant contribution to the country‘s economy, and has remained the major revenue earner for the country, accounting for about 90 per cent of the country’s revenue. However, of recent, the industry’s impact in the economy had been waning, especially with the low crude oil prices. Specifically, the industry plunged the Nigerian economy into recession in the second quarter of 2016, while the industry’s contribution to employment generation has diminished considerably.

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In the first quarter of 2019, the National Bureau of Statistics (NBS) disclosed that the oil And gas industry contributed 9.14 petroleum to Nigeria’s total real GDP, down from figures recorded in the corresponding period of 2018 but up compared to the preceding quarter, where it contributed 9.55 per cent and 7.06 per cent respectively. Also, data obtained from the Central Bank of Nigeria (CBN) revealed that in the first quarter of 2019, the oil and gas industry accounted for 61.2 per cent of Nigeria’s gross revenue, with N1.41 trillion, out of the N2.31 trillion gross federally-collected revenue recorded in the period under review. www.majorwavesenergyreport.com

COVER STORY of the industry were yet to be fully harnessed to make meaningful contribution to the economy. Nigeria’s economy is the second largest in Africa and dominant in the West African sub-region, with an increasing energy demand. Nigeria’s real GDP was $320 billion as at 2015 with a growth potential of $476 billion by 2025, averaging four per cent per annum. Nigeria’s petroleum product demand is expected to grow from 13.2 million metric tonnes in 2015 to 15.1 million metric tonnes in 2020 and 17.3 million metric tonnes by 2025 while the population growth corresponding to this demand is 182 million in 2015, 207 million in 2020 and 234 million in 2025 respectively. However, for Nigeria to achieve meaningful development, it had been argued that there must be an effective linkage between all segments the oil and gas value chain and the Nigerian economy, from the exploration, extraction, production, refining, transportation, down to the distribution, storage marketing of petroleum products.

The petroleum industry had enjoyed many years of growth from the commencement of crude oil and gas exploration in the country, in the last couple of years, the sector had suffered dwindling fortunes. Over the last couple of years, no major crude oil and gas find had been recorded in the country, while the midstream and downstream segment are plagued with obsolete infrastructure, government interference and inadequate policy. Despite the huge revenue coming from the oil and gas industry, the sector’s contribution to the growth of the Nigerian economy remained insignificant. This stemmed mainly from the fact that all the value chains of the industry in the upstream, midstream and downstream segments

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In a Policy Research Working Paper, titled, ‘Political Economy of the Petroleum Sector in Nigeria’, Alex Gboyega of the University of Ibadan and other authors, Tina Søreide, Tuan Minh Le and G. P. Shukla, noted that every institution along the Nigerian extractive industries value chain that potentially could prevent fraud was weak. They argued that although these weaknesses allow for manipulation, it is clear that the necessary underlying conditions for what generally is perceived as best practice in petroleum governance are not in place. The energy experts disclosed that Nigeria does not develop from as much of its revenues as it could, noting that numerous studies have pointed to deep-rooted corruption and misuse of power to the exclusive benefits of some groups at the cost of society at large. They said, “Governance challenges are difficult to identify and analyze, however. They require insights into complex power alliances, which cut across formal structures, hierarchies, or sectors. Political power bolstered by petroleum revenues at the federal level has had ramifications beyond the three tiers of governance.

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The alternative explanations behind weak development tend to point toward the political setup. For example, the institutional framework for petroleum governance has not been made strong enough to prevent conflict of interest.”

Muhammadu Buhari, Nigeria’s President and Minister for Petroleum Resources

They insisted that many of the development challenges in Nigeria are the results of past policy choices in the evolution of petroleum governance, pointing out that the comprehensive reform of the petroleum sector proposed by the government was an effort to move out of an adverse equilibrium. “The likelihood of success may depend critically on the following four petroleumrelated mechanisms discussed: how access to oil revenues may have affected politics and core democratic functions; how the political elite has gained access to oil wealth through politics; how groups other than the political elite have claimed access to oil wealth; and how the reactions from those without access to oil revenues have been held largely ineffective. “These mechanisms interact and appear to explain why it has been difficult to implement best practices in petroleum sector governance and make the Nigerian society benefit more fairly from oil revenues.” “The dynamics of the Nigerian politics indicates that while appropriate strategy and adequate resources for reforms are necessary, they are insufficient for the reforms to sustain and succeed. The reforms have to be driven from within, relying on the government’s leadership or effective pressure from civil society organizations, CSO and/or the media, “they maintained. The energy experts further stated that the Extractive Industries Transparency Initiative, EITI, was an important stepforward to better governance of the sector,

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COVER STORY noting, however, that it was inefficient without commensurate reforms across various stages of the oil and gas value chain. They said, “The Nigerian experience with the EITI indicates that internationally, to be effective, the global EITI need to diffuse from audits to remedial measures, that is, actually following up on the findings of the audits in terms of improving various aspects along the value chain.” According to them, enhancing intergovernmental fiscal arrangement, transparency and accountability for service delivery at the state level was critical for the long-term growth and development. They argue that the Nigeria’s prospects for achieving its development agenda of becoming 1 of the 20 most industrialized nations by 2020 may appear daunting under the present circumstances in the oil and gas value chain. They maintained that the country’s development efforts are hobbled by poor infrastructure, human capacity inadequacies, corruption, weak institutions, flawed elections, and unaccountable leadership. According to them, a lot still needed to be done to overcome Nigeria’s development challenges, especially in petroleum sector governance and in the political process. They said, “Nigeria embraced EITI, passed a law to institutionalize the initiative, and conducted physical and process audits of the oil industry. It has been difficult, however, to implement the recommendations of NEITI audits and this is not unconnected to the underlying political economy of the sector. NEITI reports reveal the weaknesses in the oil industry revenue collection machinery. “Although Nigeria’s fiscal regime compares favourably with those of other oil-producing countries, it suffers from overlaps and contradictions and inconsistencies. The main institutions involved in revenue collection — NNPC, DPR, and FIRS experience capacity inadequacies, do not coordinate their efforts, and are liable to political pressures.

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The Niger Delta conflict, criminal activities, and oil theft or bunkering are mutually reinforcing in a seemingly perpetual cycle which resists all sorts of previous intermittent military, amnesty, and rehabilitation interventions.” In her own submission, Elisabeth Proust, former Managing Director of Total Upstream Companies in Nigeria, The transportation and distribution 30

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of produced natural gas remains an underdeveloped segment of the domestic gas value chain. According to her, the investment and operating of the midstream sector falls directly and almost solely on upstream producers, which is not the case in most mature markets. She said, “For example, when it comes to constructing and developing pipelines, the producer undertakes the entire process from the study and design phase to the construction and ultimately the operation and delivery of gas to the power sector and clients. “This is particularly precarious for those producing from joint venture framework blocks. There, the framework dictates a 60/40 split between the Nigerian National Petroleum Corporation and operators. Most of the pipelines that are required to bring gas to the market leave the physical boundaries of the blocks, thus rendering the fiscal negotiations and determinations complex with regards to funding and compensation. ”The emphasis in the market should be on the development of private companies concentrating on the midstream sector. These companies investing in the construction and operation of pipelines, or other transport systems such as CNG or LNG vehicles, would have the opportunity under specific fiscal terms to collect tariffs from producers or to buy the gas at the outlet of the field, transport it and sell it to the customers. “All companies involved in the value chain need to understand the other parts involved in the process. There is a lack of understanding of the risk and costs associated with natural gas exploration, development and production.” To improve the value chain, Proust declared that revisions must also be made to upstream concession frameworks, while noting that on the production-sharing concession side, the lack of fiscal gas terms creates uncertainty for producers on their future returns. She said, “On major production-sharing concessions, such as the Egina project, we hope that the producers’ association can negotiate terms for gas production. Most companies in the deep offshore are compressing and re-injecting the gas, while this gas could go to the domestic or export markets. “In the fabrication and services segment the most significant driver of cost is the lack of competition. By breaking monopolies and expanding the competitive segment of contractors and suppliers, companies are forced

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to become more competitive with regards to their pricing and quality of services. Assisting new Nigerian companies to challenge existing ones is of the utmost importance.” However, despite the gloomy picture painted by Alex Gboyega et al, immediate past minister of state for petroleum resources, Dr. Ibe Kachikwu said the Federal Government had taken significant steps towards developing the oil and gas value chain and creating the necessary linkage that would drive Nigeria’s economic growth and development. Kachikwu, in a chat with newsmen, disclosed that in the upstream, the country had grown reserves by over 600 million barrels, rising from 36.18 million barrels to 37.2 million barrels, while the country had been able to grow the gas reserves by five trillion cubic feet, from 192 trillion cubic feet to 199.09 trillion cubic feet of gas in two years. He said, “We have been to discover so many new fields, like Owowo. We have been able to grow rig activity in the country. When we joined, the rig activity in the country was about two to three rigs that were operating in Nigeria at the time. “As at 2017, we had about 21 rigs in operation, up from about 16 rigs in operation in 2016. And hopefully, with the big Floating Production Storage and Offloading, FPSO, it is beginning to look as if there are possibilities in Nigeria, we expect to see lot more real activity in Nigeria. “Crude oil production had been sustained at a fairly large level. We started at 800,000 barrels, we have grown it to about two million barrels. We should be doing more, but for the cyclical difficulties in terms of occasional pipeline disruptions, occasional closure for purpose of maintenance. We are averaging about two million barrels, and about 300,000 of that is roughly condensates. “Really, by the end of January 2019, we had grown production to about 2.2 million barrels which have been our signpost. In addition to that, there are 30 other field works that have been approved by the DPR, which have the capacity of adding about 500,000 barrels per day production. “If you add that, we expect that, all things been equal and if we are working as we should, by the end of 2019, we should be averaging 2.5 million barrels production, which would be the first time that would be done in the country.” www.majorwavesenergyreport.com

COVER STORY Kachikwu added that the country has a couple of potential Final Investment Decisions, FID, that are in the pipeline, noting that Bonga South-West is obviously a big one for the country. He said, “We are hoping that FID would come in early first quarter next year. We have Zabazaba, still a few things to be dealt with, but if we succeed in completing all the processes that we need to that is another big FID. Those two have the potential of throwing in close to 700,000 barrels of potential production into this country.

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If we work hard enough, by the end of 2019, 2020, we ought to begin to see Nigeria’s production rise from the usual 1.8, 2.0 million barrels, up to between 2.5 million and 3 million barrels. This is the target that I had set in 2015.” In the gas area, the former minister explained that the country had done tremendous work, noting that gas production had risen by about one billion cubic feet per day, rising from 7.16 billion cubic feet to 8.3 billion cubic feet. The effect of this, he maintained, was a 16 per cent increase in terms of gas to power supply, adding that if the issue of infrastructure could be sufficiently addressed in the country, the government would be able to power every Nigerian village. Continuing, Kachikwu said, “In the Midstream and downstream sectors, we have struggled. I would love to see a day when there would be no fuel scarcity in this country. But for that to happen, there are certain realities. The liberalization of the sector is going to be a panacea to been able to solve this. As long as we continue to subsidise products, create marketunfriendly type practices, we would continue to struggle. “We need to find a way that would meet the needs to provide products sufficiently for the populace and at the same time to be able to free the sector to be able to grow. “Investments are lacking in this sector. We have been working on rebuilding the three refineries or four refineries that are owned by the NNPC. NNPC have struggled to find the financiers, now financiers have finally been found, but to agree on the terms have been difficult. “Hoping that by end of this year, end of first quarter next year, we would have completed the commercial aspects of this financial undertaking, which is in the excess of over $2 billion and also allow the private sector collaborate with the NNPC and repair these refineries and bring back 450,000 capacity refineries back into shape. That is one of the first solutions www.majorwavesenergyreport.com

to solving the fuel crisis. “We are not going to trade our way out of the fuel crisis by bringing sufficiency, by expanding reserves, by extravagant costs which cost the country a lot of money; that is not the solution. The solution is to get our refineries working.” In the aspect of refining, Kachikwu said the country’s current refining capacity was 80,000 barrels per day, adding that the country was also working with the Niger Republic to build a refinery in Katsina.The agreement with Niger Republic, he explained was still going through diplomatic process and would be private sector driven.

Dr Ibe Kachikwu, Fmr. Minister of State for Petroleum Resources.

In addition, Kachikwu said the country was also working with Agip, to look at building a refinery in Bayelsa. He said, “Two things most happen: refineries must come to Nigeria, or become prevalent in Nigeria. We need to process a lot more of the crude oil than we process here and I have served notice to oil companies who have been complacent in enjoying the fact of producing crude oil and shipping it out. “The issue is that until you fund and build the refineries, until you find the investors and they work, you are not going to solve the problem. I am mindful of that, I am working very hard with the NNPC on that; NNPC is driving that process; I am the policy driver, they are the mechanics of that process. “What is important is that for the first time, the President had been able to say that he would repair the refineries without government money. Nobody had been able to give attention to that. No government one penny had been spent on any refinery. Every effort we are making is to go find private investors to collaborate with us; save government money and be able to put these refineries in working order.

“This is because every TAM that we have done in the past has always come up with stories. Wrong contracting models, wrong delivery, wrong work, and we don’t want to go that way. Let the private refiners work with us, do this, and help co-manage these refineries and let us get it to work. Let us focus on being able to deliver instead of focusing on my head.” Looking ahead, Kachikwu disclosed that the country must address three critical issues in order to strengthen the Nigerian oil and gas value chain for a sustained economic growth. He identified the issues as, “The removal of subsidy and how do we deal with it and the liberalization of the downstream sector; refineries revamp, we must complete. Increasing crude oil production to 2.5 million barrels must be a target we must push. Domestic gas and crude supply obligations, we must pursue. “Transparency in FAAC remittances, so that there is no dispute between the assembly, governors and us in terms of what we made and what we sent from NNPC, that needs to be addressed. Partnering for uninterrupted power supply, working with oil companies is key.

“

Environmental cleanup; we have started in Ogoni, we need to extend to other areas. Infrastructure revamp in the sector is key, community empowerment programme is also key. There is paucity of work in this sector.” In its own submission, PricewaterHouse Coopers (PWC) in its report titled, The Global (Political) Economy and the Future of Oil’, advised operators and stakeholders in Nigerian oil and gas industry to push full speed ahead on fossil fuels by embarking on forward integration along the oil and gas value chain; provide service offerings to self to cut cost; as well as provide service offerings to the industry. It added that efforts should be geared towards diversification of portfolio, through expansion to other industries outside energy; and forward integration along the gas to power value chain, while it also urged operators to focus more on renewable energy, especially on solar, wind and biomass. It noted that, “In view of the industry’s transformation, industry players need to pay attention to four essential strategic elements. Create a strategic identity based on your inherent capabilities and a vision for how those capabilities can best be employed in the energy sector in the coming year.

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COVER STORY

Offshore oil platform

“Realign portfolios to focus on strengths and new growth areas. Invest in agility through digital innovation. Cultivate and hire the right talent.”

economy and to impact the lives of the citizens positively, every segment of the industry’s value chain needs to be strengthened and linked appropriately.

From the foregoing, it is evidenced that for the petroleum industry to make meaningful contribution to the Nigerian

The necessary linkage of the oil and gas value chain and the Nigerian economy would spur micro and macroeconomic,

would lead to increase value creation for the economy, tackle unemployment and insecurity, as well boost the petroleum industry’s contribution to Nigeria’s Gross Domestic Product (GDP).

Refinery

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POWER

ECOWAS to Start Cross-Border Sale of Electricity to Member States in 2020

e m b e r s t ate s o f t h e E conomic C ommun ity of West African States ( E C OWA S) will commence cros s-border sa le a nd distribution of electricity among themselves in 2020, the regional b o dy a n nou nc e d re c ent ly. T he Chairman, Regulatory Council of the ECOWAS Regional Electricity Reg ulator y Authority (ER ER A), Honoré Bogler, disclosed this in A buja. M r Bog ler spoke at the E C OWA S S ecreta r iat a f ter the s we a r i n g i n of t he t h r e e -m a n reg iona l reg u lator y counci l. He said the cha llenge the reg ion is facing was inadequate funding for t he huge i nve stment s i n i n f ra st r uctu re re q u i re d i n t he reg ion. T he cha i r ma n sa id h is counci l wou ld reposition the power sector of the su b -reg ion. “No countr y i n the su b -reg ion ha s the necessar y funding to get electricity to every home in every country. “That is why the Heads of States and government decided to create a market power pool so that all the potentialities we have i n the reg ion, i n ter ms oi l, ga s, sun, w i nd – cou ld be ha r nes sed for t he b enef it of t he p e ople. “ T h e o n l y l i m it at i o n we fà c e to ha r ne s s t he s e p otent ia l it ie s ha s been lack i ng of f unds to get these resources work i ng for the popu lation,” M r Bog ler sa id. Accord i ng to hi m, the Heads of State and government decided to 34

Majorwaves Energy Report

pool a l l these potentia l ities so that the huge popu lation of the sub-region would be an attraction for investors, once the investors rea l ise that the electr icity that would be produced would be used up by the huge popu lation. Mr Bogler assured that the people of the reg ion wou ld not be lef t at the mercy of the operators, particularly on the issue of tariffs, which he said would be a priority of the regulatory council. The mandate of ER ER A, he sàid, is to prov ide the l i n k between all the interest groups, supervise the effective f unction i ng of the electricity market, by arbitrating on a ny dispute a r ising from t h e a r r a n g e m e nt b et we e n t h e operators. “ T he a i m is to have a power ma rket i n the reg ion, work i ng w ith com mercia l r u les a nd reg u lation s that w i l l be susta i na ble. “ We t h i n k p e o p l e w i l l h a v e the be st pr ice of electr icity i f we u s e t he re g iona l re s ou rce s t h at a r e c h e a p e r to fe e d o u r network. E R E R A w i l l mon itor a nd super v ise a l l these to get it running in an organized manner. “By 2 02 0, t he re g ion w i l l b e r e a dy for t he t r a n s m i s s ion of power f rom one countr y to the other. “⁴Once that is achieved, we w i l l go i nto the pha se of the pla n whereby a l l the countr ies i n t he r e g ion wou ld h ave t he opportunity of buy ing electricity f rom the ma rket throug h

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t he re g iona l l i ne s,” he s a id. By i mpl ication, he sa id w ith the enter ing of the rea l commercial phase of the proje ct, a l l i ntere st g roup s must k now there is a reg iona l reg u lator of the tra ns-border electricity trade. Consequently, he said the various groups must rea l i ze there is somebody that w i l l work for the i nterest of e ve r y o n e; o n e t h at w i l l n ot act i n favou r of a nyone. “I f we w a nt e l e c t r i c it y fo r a l l , we must i nvest i n the sector. But, we a l l k now that a l l the countries of the sub-reg ion are going through electricity supply cha l lenges. “This means that we do not have enoug h electr icity produced i n the region. We do not also have the lines for transmission from one countr y to the other over the borders, even if we generate enoug h electr icity.” On the huge investments required to attract investors, he said the council wa s optimistic to exploit the advantages of the big ma rket i n the reg ion due to the la rge popu lation si nce the i nvestors wa nt retur ns on t hei r i nve stment s. A mem b er of the reg ulator y council, Haliru Dikko, said he was also opt i m i st ic a b out t he s cheme, w ith the reg iona l politica l leaders deter mi ned to prov ide a n en a bl i n g env i r on ment for wou ld-b e i nve stor s a nd t hei r i n v e s t m e nt s . M r D i k ko s a i d the politica l w ill ha s been demonstrated by the leaders of a l l the West A f r ica n cou ntr ies by way of needed g ua ra ntees for i nve stor s’ i nve st ment s to ma ke them sa fe a nd secu red. “The investors who are coming a lso need the a s sura nce that they would be given appropriate r ig hts of what is expected of them to stay. “It wa s for this rea son that the West A f r ica n su b -reg iona l ma rket wa s a ble t o at t r a c t i n v e s t m e nt s f r o m t h e Wo r l d B a n k , A f r i c a n D evelopment Ba n k, a nd other multilateral and multi-national i nvesti ng pu bl ic,” he sa id. S ou rc e: Prem iu m Ti me s

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WOMEN IN ENERGY

Aisha Buhari

Aisha Buhari Leads Campaign For Participation of Women In Maritime

he F i r st L ady, M r s. A i s h a Bu h a r i, w i l l be leading other dignitaries and stakeholders in the maritime community to campaig n a nd enc ou r a ge mor e fem a le p a r t i c i p at i o n i n s e a f a r i n g a nd m a r it i me t r a de a s t he c o u nt r y j o i n s t h e r e s t o f the world to mark this ye a r’s D ay o f t he S e a fa r e r tomor r ow. A statement by the Niger ia n Maritime Administration and Safety Agency (NIM A SA) director-general, D r. D a k u k u Peter s ide, s a id the presence of the first lady wou ld f ur ther boost the ongoing campaig n to enc ou ra ge t he p a r t icip at ion

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of more fema les in sea fa ring a nd t he m a r it i me s e ctor, i n l i ne w it h t he I nte r n at io n a l Maritime Organisation (I M O) c a m p a i g n f o r t h i s year to get more women into the hitherto ma le dominated p r ofe s s ion. Dakuku regretted that ve r y fe w fe m a l e s we r e i n t he p r ofe s s ion of s e a fa r i n g and said NIMASA was wo rk i n g w it h s t a keholde r s to t r y to rever s e “ t he g re at i m b a l a nc e.” He said the presence of t he P r e s ide nt’s w i fe, who will be leading other prom i nent women i n the ma r itime industr y to the eve nt s che du le d to hold i n

L a go s , w i l l b e a b o o s t to t he e f fo r t s to at t r a c t mo r e fe m a le i nvolve me nt i n t he s e c to r. H e n ote d t h at t h i s y e a r’s e v e nt , t h e m e d “O n b o a r d w it h ge nde r e q u a l it y”, wa s gea red towa rd s encou ra g i ng more women to take a dv a nt a ge o f opp o r t u n it ie s i n t h e m a r i t i m e s e c t o r, pa r ticula rly a s sea fa rers; as Marine Engineers, Naut ic a l S cient i st s, M a r i ne Surveyors, Deck officers and even g row to become Ma ster M a r i ne r s .

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MARITIME/ LOGISTICS

Hon Victor Olotu, Head, Group Development strategy

Linda George Head, Sales and Marketing

Local Content: Sifax Advocates 70% Involvement of Nigerians in Shipping Industry By Margaret Nongo-Okojokwu

ifax Group is advocating for 70 per cent involvement of Nigerians in the shipping i ndu st r y for e c onom ic advancement and development of the country. The Head, Group Development and Strategy, Sifax Group, Victor Olaseyin, stated this in an exclusive interview with Majorwaves Energy Report on the side lines of the Day of the Seafarers Forum, held recently in Lagos. The company, which is a multinational organization, has interest in virtually all sectors of the Nigerian economy such as logistics, terminal operation, hospitality and other auxiliary services within the shipping industry. Sifax Group, which recently won the bid at the Warri Port, Terminal B, on which the dredging is currently ongoing, also has portfolio in the banking sector in two African countries - The Gambia and Sierra Leone. According to Olaseyin, the company which has been in existence for over three decades, is currently expanding into Europe and America, and has partnership with various companies, including a recent partnership with Marriot International. Responding to a question on what the company is doing regarding local content, he said, “Well, for now, we are an Indigenous company and virtually everything we do is driven by indigenous personnel - people who believe in local content policy. And to a greater extent, we have been advocating and also mindful that the only way we can move our www.majorwavesenergyreport.com

economy forward is to work with indigenous people to make sure that various areas especially within our own space, that is shipping space, as much as possible, more than 60 to 70 per cent into the business work space such that the Nigerian economy can improve.” The company, which is virtually in all the sub- Saharan Africa and also in the United Kingdom and the United States, is also a major shareholder in SAHCOL Nigeria Limited. Speaking on the issue of trust and integrity, Olaseyin noted that the lengthy years of Sifax in the business environment has made it possible for the company to become a force to reckon with. He said, “If you have been doing something for a very long time, you must have become a master in it. And as a matter of fact, let me just tell you why people should trust us more. Recently, we became a majority shareholder in SAHCOL Nigerian Limited. And you know in the ground handling business, we have two businesses which are like a duopoly, you have NAHCO and you have SAHCOL.

“

Recently, we are actually matching in greater proportion what NA HCO has been doing and so we have been partnering with a whole lot of other international organizations, and so for us just like I mentioned before , we also have our influence in terminal operations in Nigeria and a whole lot of business come through us. And to that extent, Sifax can be reliable

and trust worthy to a point that once you give us your service to render for you, you can go to sleep and have it delivered on time.” Olaseyin called on International Oil Companies (IOCs) in the country to identify with Sifax Group on any form of shipment Services they want, assuring them of worthwhile services. “We want to tell them Sifax is ready for them and willing to deploy all its resources and arsenal to service them in whatever capacity they want us to come in. They can rely on us and we are ready at any point in time at their beck and call, irrespective of the size, the shape, or volume; in whatever ways of shipment they want to us to be of service, we are available” he said. Also speaking during the interview, the Head, Sales and Marketing, Linda George, said that what has been the unique selling point of Sifax Group is that the company offers a variety of services to its clients. “Well, our unique selling point is Sifax as a brand name and as a group; because we have a lot of subsidiaries offering all kinds of services. We are just a one stop shop where you can come for your shipping, transport and logistics, for your clearing, the hospitality end, the air freight, shipment and all that. We are port handlers. We have various warehouses. We operate an off dock terminal. We are at the Tincan Port, Apapa port and recently at the Warri Port,” she stated.

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MARITIME

Ship Owners to Host International Conference, Unveil Sustainability Plans

“

We Are Shareholders of the Oceans, Not Just Stakeholders” - Dr Onyung, President SOAN

Dr Onyung

igh Chief Dr Mkgeorge O. Onyung is the President of S hip O wners A ssocia tion o f N i g e r i a ( S O A N) . H e i s also the chairman , founder a n d c o - fo u n d e r o f a w i d e range of companies and organizations including but not limited to Jevkon O il & G as L td , Nokoy ( Fisheries) Investment L td . , Epxon O il Producing L td . , C apricorn Ma ri ti m e C o. L i m i te d , S t. Eve Concept Limited , White C ross Hospi ta l L td , a n d Jevkon Inc, USA . As a Fellow of the Association of General Medical Practitioners ( FAGP) , he is a general practitioner and con s ul ta n t enzy m o lo g i s t. H e i s a l s o a te c h n o l o g i s t , f i s h e r m a n , s h i p o w n e r, a mari tim e an d an oil an d ga s e n tr e p r e n e u r, h a v i n g r e ti r e d f ro m th e Ni ge r i a n Army Medical Corps ( Direct Short Service C ommission) a s a s u b s ta n ti v e M a j o r i n 19 8 2 . Wi th over 3 0 years’ experience in diversif ied fields comprising marine tra n s p o r ta ti o n , i n d u s tr i a l fishing and the downs tr e a m / u p - s tr e a m s e c to r s of the Ni gerian Petroleum In d u s tr y, D r. O ny un g ha d operated 6 US b uilt shrimp / f i shin g trawlers wi thin 38

Majorwaves Energy Report

Ni gerian , G abon and B enin Republic territorial waters exporting tons of on - board processed A tlan tic - G old b r a n d s h r i m p s to E u r o p e and USA . He had since 199 0 diversif ied into downstream oil tanker operations owning and operating a fleet of 5 oil tankers (sin gle hull) in the pas t, b u t now a new - b uild double Hull M T. In this interview with JEROME ONOJA , he bares hi s th o u gh ts on SOA N, i ts co m i n g con feren c e: L a gos International Shipping E xpo, and a couple of other b urning issues. What is the vision of SOA N? T he vision of the Ship Owners A ssociation of Nigeria (SOA N) is to ensure we take leadership of t he o ce a n. S OA N con si st s of companies who own ships, have proven track records, and a re reg istered to ca r r y out sh ippi ng bu si ne s s i n Niger ia. It’s unlike other groups where only a few own ships. So, our objective is to lead the industry in shipping development and to en su re g re ater va lue for ou r teeming members. To achieve t h at, we s t r i ve to ke e p ou r companies af loat and to remain i n b u s i n e s s . We u n d e r s t a n d the ocean is an embodiment of JULY 2019, Vol 2 No 4

mysteries, and are fully aware of t he enor m it y of t he t a sk. We show leadership and take responsibility for the ocean, so as to guaranty continued benefit from the blue economy. What strategic role(s) are you playing in the big picture as regards enhancing national development? We a r e c o l l a b o r a t i n g a n d engaging with government and its agencies at the highest level towards national development, and ensuring the Nigerian people benefit from the oceans. A s a m at te r o f fa c t, I h ave the authority of my executive council to host a ground breaking national programme: the Lagos International Shipping Expo. This will take place from November 20 to November 22 at Sna ke Island, ending w ith a gala night at Oriental Hotel. H o w e v e r, i t ’s i m p o r t a n t t o note that the takeaways from this conference should impact government’s decisions because operators from across the globe will be in attendance and it will also be a forum to engage the gover n ment. Wit h t h i s t here a r e p o s s i b i l i t i e s o f Fo r e i g n Direct Investments. T he theme is “Ocean Blue E conomy and National Development”. It will be a robust conversation. www.majorwavesenergyreport.com

MARITIME In order to maximize the wealth from the oceans, someone needs to take responsibility in terms of su st a i na bi l it y, i n novat ion, t he he a lt h of t he o c e a n a nd particularly, the life under the s e a w h i c h G o d h a s c r e ate d. You will agree with me that the maritime industry generates a lot of employ ment globally and has this peculiar multiplier effect. For every maritime professional employee there are seven others employed to cater for one need or t he ot her. C on s ider at ion s around the advent and eventual introduction of smart ships to Niger ia n waters a re ongoi ng. T h e r e’s a l s o t h e g e n e r a l conversation a bout the world making the oceans its next huge resource for access to renewable energ y. These and more will be in perspective when we gather to d i scu s s at the f i r st L a gos International Shipping Expo. What are you doing about the pli ght of cadets seeking sea time training to eventually b ecome seafarers? Perhaps, you must have noticed my pr e s ent at ion wa s skewe d from the reg ular tone of other speakers during the Seafarers D ay event. For a l l i ntent s a nd pur poses, ship ow ners mu s t d i s t i n g u i s h t h e m s e l v e s f r om ot her st a keholder s. We a r e n’t ju s t s t a ke h o l d e r s; we are shareholders of the oceans. T hat’s the concept I want us to r un w ith in my tenure a s a le ader. We h ave b or r owe d a lot of money from the bank and we must stay af loat. We h ave a r e s p o n s i b i l it y to t h e o cea n s a nd the env i ron ment; we mu st r id it of p ol lut ion; we must ensure sustainability a nd i ntro duce i n novation s so aquatic life will continue, we must guard against sea creatures going into extinction. It behoves us all to do these because we are one of the largest investors in the oceans. It is well known that one out of ever y f ive ve s s el s on t he s e a b elong s to a Nor we g ia n. Twenty per cent of the global f leet belongs to them. It wasn’t achieved in one day. Like the i l lustration I made the other day, “…those who do not have booths won’t be allowed to play www.majorwavesenergyreport.com

fo ot b a l l. You wo n’t eve n b e on the reser ve bench! At best, you’ll be a spectator! My point is that there’s a need to own more ships in Nigeria! Yes, we have some, but we need more. I was in Nor way not long ago, and met this young managing director, barely 44 years old. He owns 650 ships! He inspired me. A s sh ip ow ner s, we a re willing to take this to the next level. We are willing to channel more investments into maritime equipment. With these desired equipment, we will be able to change the lot of the seafarers. We are already in talks with the Maritime Academy of Nigeria, Oron to see how we can absorb some of these cadets on our ships for them to acquire the needed training. In line w ith gender equality and inclusiveness, we shall be announcing our decision to absorb the lady cadets shortly once our consultations are done. A s rega rds the tra ined but u nemploye d s e a fa rer s, who s e nu m bers r u n i nto thou sa nd s, about four to six thousand; we presently don’t have the capacity for ever yone. It’s going to take a l ot o f i n v e s t m e nt i n n e w ships. So, we are in discussing with NIM A SA and a couple of global financial institutions, not limiting ourselves to Niger ia. T he strateg y is to have more ships which will eventually take care of the seafarers’ plight. H o w a r e y o u go i n g a b o u t accessing the C VFF? A b o u t t h e C a b o t a g e Ve s s e l F i n a n c i n g F u n d (C V F F ), we’v e t a l ke d a n d c r i e d a n d a r e b e g i n n i n g to s ou n d l i ke a broken record. But there is a v i st a of hop e i n t h i s new gover n ment a s t he cha nge i s beg inning to happen. We see the transformation at relevant gover n ment dep a r t ment s a nd believe it will bring about the needed reforms and sparks we de si r e acro s s b o a r d. We a r e law-abiding and will stay the course until we are heard.

at S OA N to sp e a rhe ad t he s e conversations. A team of about two or three persons will take time to deeply look at pertinent issues, engage the top echelon at N I M A S A to smo ot hen t he rough edges and look at the grey area s w ith a v iew to finding lasting solutions. T hese things shouldn’t be about magnif y ing issues only. That’s the approach we are deploy ing to solve the C V F F issue. We a r e g l a d N I M A S A n o w has the International Shipping P r omot ion Un it for wet a nd d r y c a rgo. We have met t he team informally, and do hope to escalate. We are all part of this democratic government and must play our part. So we believe, and are positive there will be disbursement of the CVFF before the Lagos International Shipping Expo in November. Ships are the answers. Without it, there’s no NIMASA. Without ships, there’s no seafarer. Seeing the ocean holds tremendous wealth, there are multiple stakeholders, and everyone is talking; so they end up sending confusing messages to the government. We should separate the noise from sound counsel. What is your parting shot? We are ver y patient people at SOA N. Shipping isn’t a quickr e t u r n b u s i n e s s . We w a i t eight to nine years before we begin to reap. T hat’s how the oceans are. You don’t plunge i nto the ocea n. You te st the waters first. T he Scandinavian countries were transformed by the wealth from the ocean and maritime infrastructure. Global t r a d e c o n s i s t s o f n i n et y p e r cent maritime businesses. Ocean controls the world’s economy. We take seafarers as members of our family because we invest m i l l ion s i n t he s e e q u ipment s wh ich we eventua l ly leave in their custody. If we don’t recognise their welfare, then our businesses will be in jeopardy; thus my shout out goes to the seafarers and the girl child who wants to be a seafarer tomorrow.

T here are huge loans we are ser vicing. Part of my strateg y i s to c o nt i nu e c o l l a b o r at i n g w ith N I M A S A , a s we have created i s sue s-focu sed g roup s

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OTC 2019

OTC 2019: Nigeria Deepens Preparation for Deepwater Opportunities ...Deliberates On Strategies To Harness Alternative Energy. By Jerome Onoja (Houston, Tx)

s the Offshore Technolog y C onference marks its 5 0 t h a n n i v e r s a r y, t h e P e t r o l e u m Te c h n o l o g y Association of Nigeria, PETAN, led Niger ia n delegates in discussions at Houston, Texas on how to deepen the nation’s wealth from its largely untapped hydrocarbon resources in its territorial waters beyond 1,000 meters. Following multiple divestments of land and swamp assets by the International Oil C ompanies, IOC s, indigenous players have grown in capacity to deliver up stre a m proje ct s. We have s e e n a g r ow i n g nu m b e r o f e x p l o r at i o n a n d p r o du c t i o n companies owned by Nigerians. M o r e a s s et s a r e s t i l l b ei n g d i ve s te d i n a s y n c h r o n i z e d move by the IOCs, as they seek b etter r ewa r d s i n r e s er ve s,

Majorwaves Energy Report

moving further away from the shores into the blue ocean. T he conversation on PETA N’s panel session, held on the s idel i ne s of O T C 2 019 wa s tagged “Deepwater Operations i n Ni ger i a: T he Jou r ney s o f a r”. P a n e l l i s t s i d e nt i f i e d typical challenges with exploration activ itie s i n the deepwater space and proffered practica ble solutions, urg ing the reg u lators, operators, service companies and investors to ta ke adva nta ge of the opportunities it presents. Some of the solutions to making the nation’s deepwaters attractive i s h av i n g t he r i g ht f i s c a l s; clea r i ng a l l u ncer ta i ntie s around government regulations, i n p a r t i c u l a r, t h e p e n d i n g Petroleum Industry Governance Bi l l a nd three other bi l ls cover i ng ho st com mu n itie s (PH I C D B), f i s c a l s (PI F B),

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and administration (PI A B). It wa s note d t h at t he p ac e of development of Ni ger i a’s deepwater dipped due to uncertainties around reg ulations which first reared its ugly head shortly after the n at ion to ok del iver y of t he Bonga deepwater project. This unfortunate imbroglio led to Bra zi l over ta k ing Niger ia. To d ay, B r a z i l b o a s t s o f 4 5 FPSOs while Nigeria trails far behind with 8. Speaking to newsmen prior to the panel session, Mr BankAnthony Okoroafor, --Chairman of PETA N said, it was high time Nigerians began to count months and years to a period when a complete F PSO would be ma nufactured in-countr y. While he applauded Total E&P for the feat it achieved via the Egina deepwater project, www.majorwavesenergyreport.com

OTC 2019

Mr Onyekwena, MD of Tolmann receives reprsentative of GMD at the OTC 2019, Mr Rabiu Bello

Ebere Chimezie

(L-R): Engr Ernest Nwapa; Mr Austin Avuru; Dr Nimi Abili; Dr Dakuku Peterside at PETAN-organised Workshop Session in Houston at the just-concluded OTC 2019

in securing an unprecedented level of local content contr i bution, a nd the topside integration in Nigeria, he insists that more can be done.

“

T he theme for this year’s panel session is deliberate! L et’s get t he de epwater adventure right,” he said. “ Tota l ha s set a b ench ma rk, other IO C s shou ld endeavou r t o m a i nt a i n o r s u r p a s s t h e standard,” he urged. “F uture projects should be better t ha n t h i s. I n fact, I e a gerly lo ok for wa rd to seei ng the c o m p l e t e i nt e g r a t i o n o f t h e hull side in Nigeria; and after that, a complete F PSO, from scratch to finish,” he quipped. C on si stent w ith a reg u la r upstream exhibition, Nigerian c o mp a n i e s d i s p l ay e d a l r e a d y deploye d te ch nolo g ie s , wh i le others sought for partners with leading technolog y firms across the entire value chain.

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Mr Emmanuel Onyekwena, the Managing Director of Tolmann spoke at his exhibition booth about simplifying the training process for BOSIET by applying digitization to the delivery of the training session as developed by OPITO. He noted that, “This innovation has seen a drastic reduction in the time spent on training, from three days to a single day for BOSIET. It also comes with a 40% reduction in the cost”. Concerning technologies, he stated: “Our latest technology on display here is the Modular Fire Fighting Emergency Response which helps mitigate fire on offshore platforms”. In the same vein, Lynkpetro had its Remote Operated Vehicle for display at its stand. Explaining the importance of ROV, the Managing Director Mr Ebere Chimezie stated, “ROVs are one of the most important deep sea equipment which is a lot cheaper and easier to maintain”. He added, “I know how difficult and dangerous the deep offshore terrain is for divers. The advent of the ROV is a game changer for us. It enables the construction and

maintenance of underwater facilities. We use it for inspection. And I tell you, 95% of what divers do has been replaced by the use of ROV, even at the fraction of the cost, better precision, and better timing!” With a resolve to deepen commitment in exploring deepwater opportunities, delegates still took turns to bare their thoughts during the PETAN Workshop that x-rayed the growth of renewables. In a session themed, “Global Energy Transformation – The Effect and Future of the African Oil Industry and Economy”, it was agreed that African countries should brace up for an energy future where renewables will replace fossil fuel. It was also a wake-up call for petroleum exporting companies to intensify their activities and optimise the use of the finite hydrocarbon resource. Until 2050, a projected time when renewables is expected to surpass hydrocarbon in contribution to the global energy mix, producing countries were encouraged to use proceeds from crude oil as catalyst to spur rapid economic growth.

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OTC 2019

Highlights at OTC 2019 Awards with PETAN

he PE TA N Awa rds is a n initiative by Niger ia’s foremost industr y advocacy g roup, Petroleum Technology A ssociation of Nigeria (PETA N); and it is intended to promote and heighten awareness of organizations and individuals that are catalyzing development in the countr y’s oil and gas industr y. T he nation’s future is bright when we have leaders and organizations committed to changing the current narrative. Some of the winners at the 2019 (OTC) PETA N Awards ceremony include:

PE TA N is a membership organization that brings together a diverse set of indigenous oilfield ser v ice companies w ith a w ide array of technical expertise. T he continued v isit by PE TA N to the United States during OTC offers its members the opportunity to showca se existing capacities, and to create partnerships for domestication of new technolog ies.

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OTC 2019

Aveon Offshore Is Always Evolving; We Come to OTC to Take New Technologies Back Home – Duntoye

oseph Duntoye is the General Ma nager of Aveon Offshore L i m ite d. I n t h i s i nte r v iew a t t h e O f f s h o r e Te c h n o l o g y C o n f e r e n c e (O T C) , H o u s t o n , Texas; he spea ks on some of t he act iv it ies of t he compa ny in t he n at ion’s oi l a nd ga s i ndu s t r y. E xcer pts: Av e o n o f f s h o r e h a s b e e n consistent at OTC; can you please tel l us what t he drive is a nd why OTC i s i mp or t a nt to your compa ny? Our drive is to showcase to the whole world t hat a compa ny domiciled in Nigeria and 10 0 per cent ow ned by Niger ia n s can do anything other companies outside Nigeria can do. If you visit our yard, it’s an improving one all year round and the d r i ve o f t h e s h a r e h o l d e r s i s to e n s u r e t h at we c a n t a ke on more sophisticated jobs and bring work home and that means employ ment for Niger ia n s. Charity they say begins at home, so we come to OTC to tell the world what we can do; not only look i ng at IO C s domici led i n Nigeria alone. W herever you are, quality plays an important role a nd I t h i n k t hat i s ou r d r ive, s a fet y of l ive s of ou r workers is very important. Our cl ie nt s c a n a lw ay s get t he i r products a s scheduled; so we are also telling the world that what is in Europe and the US is also in Nigeria and we are ver y competitive. www.majorwavesenergyreport.com

How has OTC been beneficial to your compa ny?

you need to retrain the people and you miss out on schedule.

You can see how OTC operates. F irst, the Nigerian companies come under an umbrella of PE TA N wh ich me a n s t hat i f we can showcase what we can d o to t h e w h o l e wo r l d , n ot only for Aveon offshore, other Nigerian companies can bring their products home. As a young engineer in the early 90s, most of the sales that go on in the oil and gas industr y were mainly done A broad, but with PETA N ta k i ng covera ge a nd seei ng NNPC’s stand, it means Nigeria wants to be recognized by the world. So, we should take our place in the oil and gas industry because I think we deser ve to be there and I think with OTC showcasing what Nigeria can do, with time it would get there.

W hen you come to the Niger Delta, to take a lot of boys off the street, of course you need an engineer but you also need the technical expertise, and that is what Aveon offshore offered to a lot of the youth in the Niger Delta, they come in as unskilled a nd a f ter a couple of ye a r s, t hey b e come profe s siona l s i n dredging, welding, fitting and dimensional control.

A s one of t he c omp a n ie s t h at participated in the Egina project, what’s the next big thing for you? The Bonga south west, there is also the LNG train 7 to mention a few and you know about the Zabazaba that is plag ued with lots of legal issues; these are the things we are actually looking into now and some of them are at the tender i ng sta ge. Once you have the facility, it needs to start running. You know I liken fa brication w ith the surgeon, a medical doctor, you need to continuously do this and if you don’t and anytime jobs come in,

Is there any technolog y here you t h i n k yo u c a n a do p t for yo u r compa ny? Not to be specific, first once y o u h a v e t h e c o nt r a c t , t h e contract details would specif y t h e t e c h n o l o g y n e e d e d . We a r e up t her e when it c ome s to fabrication, but you see it’s ever changing. Once your clients specif y what’s needed on the project, equipments are brought in, people are trained to do that and that is the whole essence of the OTC . We don’t want to be saying we have not heard of this before. So when we get back, we take stock of new things we see, we are not only having our st a nd s, t he sh a r eholder s a r e here too, the top management is around. I also won’t only be visiting Nigerian companies. I will go out and see what is out there, a nd when prov ision is specified, it won’t be new to us.

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ENERGY FINANCE

Ms Ebehi Ehi-Omike

NCI Fund: 33 Applications Approved, 11 Receives Disbursement Applicant Expresses Shock, Storms BOI to Verify Offer Letter By Jerome Onoja

he Bank of Industr y (BOI) ha s revea led that a total of 33 applications for access to the Nigerian C ontent Inter vention Fund have been approved, and a tot a l of 11 have re c eive d disbursements. Spea k ing at a recent workshop in Lagos, the group head for oil and gas, Ms Ebehi Ehi-Omike made this known. She added that, about 5 more disbursements ought to have been added to the list but the bank was still expecting some documentation from the approved applicants.

“

We have financed some modular refineries since i n c e pt i o n . T h o u g h it costs a lot to set one up, it is quite technical too, but we a r e f u nd i n g t hem,” she said. She further admonished industr y players to ta ke advantage of the inter vention fund and also make all statutory documentations available. “I believe we are ver y open, w ithout un neces sa r y b ott leneck s. You don’t need 44

Majorwaves Energy Report

to know anybody to have access to the NC I fund. Just apply and you will receive the same treatment like everyone across board. Most recipients of the fund have expressed surprise at the level of transparency,” she added. Na r rating the experience of a customer who received a n offer letter, she said “he walked into our office a nd dema nded to ver i f y the authenticity of the offer letter he had received. He thought it was a scam. That’s how real and transparent we are,” she quipped. The Nigerian Content Intervention Fund is a Nigerian C ontent D evelopment a nd Monitoring Board (NC DMB) fund managed by BOI. It is a portion of the Nigerian Content Development Fund (NCDF) set aside by the NCDMB for the BOI to manage and lend directly to indigenous manufacturers, s er v ic e prov ider s a nd ot her ke y p l ay e r s i n t h e o i l a n d g a s i ndu st r y, to me et t hei r f u nd i ng ne e d s. O ne p ercent of a l l cont ract s awa rde d i n t he up s t r e a m s e c to r o f t he

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Nigerian oil and gas industr y i s deducted a nd rem itted to t h e N C D F a s s t ip u l ate d by S ection 104 of the Niger ia n Oil and Gas Industr y C ontent Development (NOGICD) Act. The fund is designed to increase indigenous participation in the oil and gas industry, build local c a p a c it y a n d c o mp et e n c i e s; to pr omote t he g r ow t h a nd development of Niger ia n Content in activities connected with sectors of the Nigerian oil and gas Industr y; to deepen t he c r e at i o n o f l i n k a ge s to other sectors of the national economy a nd boost i ndu str y contr i bution s to the g row th of Ni ger i a’s Nat ion a l Gr o s s Domestic Product; to address persistent funding challenges t hat have h i ndere d c apacity a nd g row th of loca l ser v ice prov iders in oil a nd ga s; to f a c i l it ate t h e g r ow t h o f com mu n it y ba s e d compa n ie s in the upstream oil and gas s e ctor; to spu r pro duct iv it y and job creation in the Oil and Ga s I ndustr y a nd to attract i nve s t m e nt c a p it a l i nto t h e sector and boost contribution of the sector to Nigeria’s economic growth. www.majorwavesenergyreport.com

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INFRASTRUCTURE

OB3: Lot B 2bscf/D To Be Completed By September, Says Okwuosa *No pipeline built in Nigeria of this size and capacity directional pipeline, that can take gas from GT P in OBEN into E scravosL a gos P ipel i ne s System (E L PS) or take from ELPS into GT P”.

Engr. Emeka Okwuosa

he C h a i r m a n/C E O of O i l s er v Group, E ng r. E mek a Ok w uo s a s ay s efforts are been put in place to ensure that the ObiafuObrikom -Oben (OB3) ‘L ot B’ gas pipeline being handled by h i s compa ny i s completed by September 2019. Okwuosa gave the assurance in an inter view w ith some select Nigerian Journalists atthe Just concluded Offshore Technology Conference (OTC) held in Houston, USA. The Oilserv chairman explained that the project i s q u ite a cha l len g i n g one, add i n g t hat the company has always shown com m it ment i n t he pro ce s s of executing the project from Eng ineer ing, P rocurement C o n s t r u c t i o n (E P C) s t a g e s . He d i sclosed that the OB 3 Gas Treatment Plant (GT P) is the largest in Nigeria and by extension Africa with a capacity of two billion standard cubic feet of gas per day (2bscf/d). On the project delay, he said that few changes in the entire design concept alongside some shortcomings led to some setbacks in the initial deliver y date. It would recall that Oilserv Limited, a leading Engineering, P ro cu rement, C on st r uct ion, Installation and Commissioning C ompany in Nigeria has been a major player in the industr y since her inception in 1992 and ha s contributed immensely to t he development of pip el i ne s systems infrastructure in

Majorwaves Energy Report

T he O i l s er v C h a i r m a n l au de d t he Federal Government and the NNPC for prov id i ng the oppor tu n ities for indigenous companies to flourish in the oil and gas industr y. Recently, NNPC laude d t he ma na gement of O i l s er v Group for its contr i bution towa rd s the development of the countr y’s gas Nigeria, having executed various supply via the construction of biggest large and medium scale projects. pipeline in Nigeria, the East-West Gas Pipeline Project popularly called OB3 Project (136km x 48 inch). “No pipeline of this size and capacity ha s been built in Niger ia. You w i l l reca l l that O i l s er v i s cu r r ent ly exe cut i n g t he in the 70s, 80s, and 9 0s, we biggest pipeline in Nigeria, the Easthave the likes of Wilbros, Mark West Gas Pipeline Project popularly D emon a nd others that were c a l l e d O B 3 P r oj e c t (13 6 k m x 4 8 not Ni ger ia n s pip e s, even at inch). The C ompany, NNPC said, has that, if you look at all pipeline demonstrated indigenous capacity and infrastructure today, you cannot expertise which used to be the forte e q u ate it w it h t he pip el i ne s of i nter nationa l E P C compa n ie s i n built by Oilser v. L et us a lso Nigeria and have earned a reputation put it in perceptive that is not for quality, safety and on-time delivery a b out t he pip el i ne. We have of projects. the GT P at OBEN which is the heart of our scope. T he GT P S p e a k i n g at t he i n sp e ct ion of t he w i l l h a nd le t wo bi l l ion S C F project by some key officials of NNPC of gas per day.T his has never and the Nigerian Gas Company (NGC), ex i s te d a ny w h e r e i n A f r i c a . COO, NNPC , Gas and Power, Engr. You have to be there and see S a idu Moh a m me d, st ate d t h at t he the massive nature of it. W hen project is an aid to government dreams you talk about building OB3, is and aspirations for the sector. “ T his not just building a pipeline. Our is a project that we have been waiting own section would take the gas for in Nigeria and we are glad that from mid-point all the way to the contractor is performing towards Oben plant including the Oben b r i n g i n g l i g ht at t h e e n d o f t h e pla nt itsel f. We f i n i shed ou r tunnel. W hat I have seen so far is own pipeline three years ago, ver y impressive and the deadline of but the treatment plant took a completing this project is achievable as longer time because the location all materials needed for the completion was changed from Oben North to of t he work a re on g rou nd.” A l s o the GTP location and that took speaking, Managing Director, NGC , us two years to go through the Engr. Tunde Bakare said “from what re-engineering process, getting we have seen so far, Oilserv has done the approva l a nd f ina nce. At very well. The GTP is massive with a the moment, the pipeline and capacity of two billion standard cubic t he GT P faci l it ie s a r e goi n g feet per day (2bscf/d). W hat is left is through pre-commissioning. We just the piping work and we are sure have a pipeline going to GT P- that by September 2019 we will have OBEN. It is a 36 line we built the Vice President here to commission from OBEN to E scravos- Lagos the project’’. Pipelines System (ELPS) which is OBEN North, which is a by-

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INFRASTRUCTURE

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COMMUNITY DEVELOPMENT

‘We Would Like To Get a Fair and Honest Treatment from the Oil Companies’ – King Diete-Spiff of Government. He is in the category of elder statesmen In t h is i nter v iew with the Editor of Majorwaves Energy Report, MARGARET NONGO-OKOJOKWU on the side lines of the Offshore Technology Conference in Houston Texas; the king speaks about the relationship between the host communities and Oil operators, highlighting the need to work together to create a clean and healthy environment for his people; while advocating the need to starting looking into alternative source of energy. Excerpts:

is Eminence, king Alfred Papapreye Diete-Spiff is the Amanyanabo of Twon Brass and Chairman of the Bayelsa state council of traditional rulers. He was the first Military Governor of Rivers State, Nigeria after it was created from part of the old Eastern Region, Nigeria. He held office from May 1967 until July 1975 during the military administration of General Yakubu Gowon. He was also a member of the Supreme Military Council. King Diete-Spiff is an Ijaw from Bayelsa State and the Amanyanabo (King) of Twon-Brass, Bayelsa State, born on 30 July 1942. He was educated at St. Joseph’s College, Western Cameroon and Britannia Royal Naval College, Dartmouth, England. He joined the Nigerian Navy and was commissioned ships diving officer in 1964 when appointed Military Governor of Rivers State in 1967, he was a Naval Lieutenant Commander aged 24. In December 2009, Diete-Spiff was National Chairman of the Nigerian Association of Auctioneers. He was in the 2005 Confab and served in the Committee on Models and Structure 48

Majorwaves Energy Report

It is good to see you in Houston at the OTC 2019 your Highness, I saw you for the first time in Bayelsa state at the Nigerian Oil and Gas opportunity fair (NOGOF). So what brings you to OTC? Actually this is my first time here and OTC is very relevant to us in the Niger Delta because of the oil and gas opportunities, as well the health and safety of operators here; moreover, this is a main gathering point for top industry stakeholders like the International Oil companies and all, a great avenue to also pass our host community message across; I mean all the oil big boys, IOCs and NOCs are always at OTC. So this is a big point for all of us interested in the oil industry and the Marine to meet. There’s so much technology in the Marine Industry because it is in support of the oil industry. Aviation has also improved a great deal because of the service to the oil industry. I should have been here several times and a regular member, in fact I am a regular member of PETAN and so this time around I wouldn’t let even all the tea in China or the oil in Nigeria keep me away. JULY 2019, Vol 2 No 4

You represent a very important segment of the Nigerian oil and gas value chain, talking about the host communities where the oil is being extracted from; so far what has been the relationship between your community and the oil operators? All Efforts are being made to see that there is a smooth understanding and respect between the host community and the oil producing Giants, but then it’s been near impossible, because somewhere along the line, these companies would pick like one or two persons and make them their favourite, we keep close Institutions, and once they have the government on their side, they think they can get away with murder, so there is that endless battle and struggle and we are all trying to see that we get a fair and an honest treatment from the oil companies. So what are the efforts being made presently to ensure that there is peace in the Niger Delta? Well, We’ve been able to get our boys engaged, the youths, the Niger Delta youths have been at the receiving end and have been short changed for a long time and we have been trying to tell them to be patient, so their prayers now is ‘God give us patience’, but they are running out of it and they should hurry, their patience have been stretched to the limit and it’s not fair, because they see the future as very bleak and so they now want to see that they can grab things for themselves, but that can only aggravate things and that makes them even more desperate. And in the process they might even kill the goose that lays the golden egg, so we are trying to tell them that the future is not lost, they have the future and that the oil Industry has its own challenges because of the alternative power, so how long would it be before the Stone Age situation gets to them? I mean the Stone age did not end because they ran out of stones, so we don’t have to run out of oil before the oil age ends and it is coming because technology is overtaking everything and it’s the same technology that is taking the oil companies into deeper depths. But there would come a time when you don’t need to go to the moon to get oil www.majorwavesenergyreport.com

COMMUNITY DEVELOPMENT

King Diete-Spiff chats with Nigeria’s president, Muhammadu Buhari, during a courtesy call by Traditional Rulers from South-South Nigeria.

because technology might provide power sources that doesn’t need oil and we are working on noncombustion engines already, Oh really? Can you tell us more about that? Yes, we have a prototype already, we are trying to build an engine that doesn’t release any emission, and it will be about eight times the tuck, an engine that is as powerful as ordinary fossil fuel engine. So once that has been done and put into use, its application is limitless and once that takes off the ground, who needs oil? Because it doesn’t use fuel for generation, it is even an alternative source of power, I don’t know if you have heard of the Jones , the front end is a solar generator, and you don’t pay for solar, you just harness it to produce all the power

King Diete-Spiff joins the ES NCDMB, Engr Simbi Wabote to inspect exhibition booths at NOGOF 2019

you need, by getting the wind speed feeding it into the turbine. These are all the things coming in from the Niger Delta and would eliminate the use of oil, it would take time before petrol and fossil fuel engines fades out, but it is coming. So how are you educating your youths in this aspect knowing that the oil would not always be there, so there is no need for fighting and all? The good thing is that even if you stop producing oil today, all the damages done by the oil companies would still last another 50 years, so clean up and other environmental challenges is still very relevant. What’s the situation of the clean-up at the moment? We are trying to let our boys

understand that cleaning up is not a menial job , so we have gotten an environmental group and so all our youths who are not gainfully employed, her majesty is now getting them to be cleaning up the water front daily and from the meagre money, it keeps them busy and they earning. So who is paying for that clean-up? We are, the community is trying to see how we can get partners to fit in and see how we can get the youth engaged and busy. How about the one the flagged off by the government in ogoni land, is there anything happening there? Yes that’s a very technical one, there is a lee time but something is happening

King Diete-Spiff was part of a high powered delegation of the council of Traditional Rulers from the South-South region of Nigeria who paid a courtesy call to the President, Muhammadu Buhari in Aso Villa.

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Articles inside

NCI Fund

Strengthening the Nigerian oil and gas value chain for a sustained economic growth

What FGN must do to attract FDI into the gas sub-sector in Nigeria - Okoronkwo, Aiteo's MD