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INDUSTRY NEWS

Kyari Expresses Confidence in Fossil Fuel Remaining Relevant Beyond 2040

he Group Managing Director of the Nigerian National Petroleum C orporation (NNPC), Mallam Mele Kyari, has expressed confidence that fossil fuel would remain relevant in the global energy mix, saying contrary to assumptions in some quarters, crude oil demand would be very high even beyond 2040. The NNPC GMD made the declaration in his office in Abuja when he received members of a Higher Command Course of the Indian Army War College on a geostrategic tour of Nigeria. According to a press release signed by the Ag. Group General Manager Group Public Affairs Division, NNPC, Samson Makoji, Kyari espoused the uniqueness of Nigeria’s crude oil grades as rich crude with high global demand, saying NNPC was determined to grow Nigeria’s production to 3million barrels per day by 2023 to enable Nigeria to take advantage of the gap that exists in the demand-supply balance. He emphasized the age-long bilateral relations between Nigeria and India, which cuts across trade, military cooperation, and international peacekeeping, among others. The 6

Majorwaves Energy Report

GMD explained that NNPC’s mandate cut across satisfying domestic energy needs and contributing to the global energy market, especially crude oil and Liquefied Natural Gas (LNG) deliveries across the world. He described energy security as a critical factor in guaranteeing Nigeria’s territorial integrity and growing its economy. “Energy security is everything in terms of national security. The recent attack on Saudi oil facility is one incident that has attracted global attention and has the potential to impact the global economy,” Kyari stated. According to the GMD, understanding the relationship between energy security and global security was important, especially as developing nations strive to grow their respective economies and guarantee their territorial integrity. In his remarks, the leader of the delegation, Brig. Gen. Sudhir Malik, said India was the largest trade partner with Nigeria, stressing that oil formed a large chunk of the trade between the two counties. He described Nigeria as Africa’s economic powerhouse which shares similar aspirations

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as India. “We are also a growing economy. It is a mutual benefit to both nations. In times to come, we hope that these bilateral relations will continue to grow so that we will also increase the trade volumes,” he added. While stating that India was aware of Nigeria’s peculiar security and economic challenges, the military chief, however, expressed optimism that the deep relations between the countries’ armed forces would help in addressing these challenges. According to a report released in July this year by Resources for the Future (RFF) titled “Global Energy Outlook 2019: The Next Generation of Energy”, fossil fuels made up 82 percent of global primary energy in 2015, and under most projections, the total amount of fossil fuel consumption increases through 2040. Overall levels of fossil fuel consumption only decrease under scenarios with ambitious climate policies and largescale deployment of new technologies. The RFF report corroborates with an earlier report by the U.S. Department of Energy in 2013, which stated that the “new” fuels of 2040 will be oil, coal, and natural gas. www.majorwavesenergyreport.com

INDUSTRY NEWS

SPDC Deploys HD Aerial Cameras to Track Spills, Crude Theft … Seeks Stakeholders’ Collaboration

igeria’s leading energy giant, the Shell Petroleum Development Company of Nigeria Limited (SPDC), has deployed state-of-the-art high definition cameras for quick detection of and response to crude oil spills from its facilities. The cameras will also help in tracking vandalism of SPDC joint venture assets. SPDC’s General Manager, Igo Weli, disclosed this last month at a media workshop for journalists in Warri, Delta State. “The cameras are attached to specialised helicopters which carry out daily overflight over our facilities. This measure has improved the surveillance of our Joint Venture assets.” Also, Weli said SPDC had implemented anti-theft protection mechanisms on key infrastructure, such as wellheads and manifolds to stem constant attacks from vandals and thereby prevent and minimise sabotage-related spills. According to him, the daily loss of over 11,000 barrels of oil per day in 2018 and the threat to the integrity of the joint venture assets necessitated the multipronged approach to protecting what he called ‘critical national assets.’ He said, “We collaborate with community leaders, traditional rulers, civil societies and state governments in the Niger Delta to implement several initiatives and

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partnerships to raise awareness on the negative impact of crude oil theft and illegal oil refining. Such public enlightenment programmes on the negative impacts to people and the environment help to build greater trust in spill response and clean-up processes.” Weli noted that SPDC would sustain its air and ground surveillance to complement the efforts of government security forces in checking crude theft, pipeline vandalism and illegal refining. “But for the efforts of Operation Delta Safe in protecting critical oil and gas assets, the situation would have gone beyond control,” Weli said, calling on the Operation Delta Safe, a special oil and gas asset protection force, and other government security forces to intensify their activities around oil and gas facilities. Also speaking at the workshop, SPDC’s General Manager, Safety a nd E nv i ron ment, C h idu b e Nnene-Anochie, said, noting that the majority of spill incidents on SPDC pipelines were as a result of sabotage. “We are burdened by the continuous increase in cases of sabotage and theft. Oil spills due to theft and sabotage of facilities as well as illegal refining, cause the most environmental damage from oil and gas operations in the Niger Delta.” According to Nnene-

Anochie, SPDC removed more than 1,160 illegal theft points from its pipelines between 2012 and the end of 2018, adding that the attendant spills from the theft points were sometimes made worse by challenges of access to the incident sites to investigate and stop leaks. “We track the progress of our spill response from when we learn about the leak to when clean-up is completed and certified by regulators.” Represented by SPDC’s Compliance Monitoring Lead, Temitope Ajibade, NneneAnochie said no spill was acceptable to the company. “A key priority for Shell companies in Nigeria remains to achieve the goal of no spills from our operations. No kind of spill is acceptable, and we work hard to prevent them. However, SPDC cleans and remediates areas impacted by spills from its facilities irrespective of the cause.” Other steps aimed at stemming crude theft, she explained, includes SPDC promotion of alternative livelihoods through Shell’s flagship youth entrepreneurship programme, Shell LiveWIRE. “Between 2003 when Shell LiveWIRE was launched in Nigeria and now, the programme has trained 7,072 Niger Delta youths in enterprise development and provided business start-up grants to 3,817.

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INDUSTRY NEWS

U.S. Chamber of Commerce Appoints Benedict Peters to Advisory Board of the U.S.- Africa Business Center Mr. Peters will join CEO’s from many Fortune 500 companies who have a strong presence in Africa The U.S. Chamber of Commerce announced that Benedict Peters, Chairman and CEO of AITEO, will serve on the Board of Advisors for the U.S.-Africa Business Center. The mission of the U.S.-Africa Business Center is to build lasting prosperity for Africans and Americans through job creation and entrepreneurial spirit, something that Mr. Peters has been active in on the continent for many years. Welcoming Mr. Peters to the Board of Advisors, Chairman of the U.S.-Africa Business Centre,

Peter

Scott Eisner remarks: “We value and appreciate the insights from companies such as yours as they not only benefit the Center, but also play a pivotal role in strengthening the ties between the United States and countries throughout Africa.” Mr. Peters will join CEO’s from many Fortune 500 companies who have a strong presence in Africa, including Banco Prestigío, BP, Caterpillar, Chevron, IBM, MasterCard, Microsoft, and many others.

No room for coal in Africa’s renewable future – Akinwumi Adesina

frican Development Bank President, Akinwumi Adesina in September unveiled ambitious plans to scrap coal power stations across the continent and switch to renewable energy at United Nations climate talks. Addressing a gathering of leaders and officials from almost 200 countries in New York, Adesina outlined efforts to shutter coal-fired power plants and build the “largest solar zone in the world” in the arid Sahel belt. “Coal is the past, and renewable energy is the future. For us at the African Development Bank, we’re getting out of coal,” Adesina told delegates to the Climate Action Summit in Manhattan this week. The Bank’s $500 million green baseload scheme will be rolled out in 2020 and is set to yield $5 billion of investment that will help African countries transition from coal 8

Majorwaves Energy Report

and fossil fuel to renewable energy, said Adesina. Adesina also talked about plans for $20 Billion of investments in solar and clean energy that would provide the region’s 250 million people with 10,000 MW of electricity. “There’s a reason God gave Africa sunlight,” said Adesina. Presidents, princes and government ministers from around the world attended the UN’s climate summit, as they faced mounting pressure to reduce heat-trapping gas emissions and slow the global rise in temperatures. UN Secretary-General, Antonio Guterres also took a swipe at the “dying fossil fuel industry” and said it was still not too late to keep the global rise in temperatures below the benchmark figure of 1.5 degrees Celsius. “But it will require

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fundamental transformations in all aspects of society — how we grow food, use land, fuel our transport and power our economies,” said Guterres. “We need to link climate change to a new model of development — fair globalisation — with less suffering, more justice, and harmony between people and the planet.” The UN says mankind must reduce greenhouse gas emissions to limit global warming to about 1.5 degrees Celsius above pre-industrial temperatures to stave off the worst-case predictions of scientists. The meeting was part of the run-up to the international climate talks in 2020, which is the next deadline for countries to make significant emissions reduction pledges under the 2015 global warming deal. Source: AFDB www.majorwavesenergyreport.com

INDUSTRY NEWS

Quick Saudi Response Was Key to Curbing Volatility – OPEC Sec-Gen

he Secretary-General of the Organization of Petroleum Exporting Countries (OPEC), Mohammed Barkindo has said that Saudi Arabia’s quick moves to restore output have been crucial to curbing oil price volatility after the global oil market had been shaken up following the attacks on some of its facilities. Barkindo told an energy conference in Kazakhstan that an extraordinary meeting of OPEC members and fellow oil exporters was not on the cards as Saudi Arabia has restored the bulk of its supply and the incident was “behind us”. The group remains focused on maintaining oil price stability and “will do whatever it takes to insulate oil from politics”, he said. Barkindo also said OPEC expected robust longterm growth in oil demand, especially from developing nations. Speaking about shorter-term risks, he said the oil market was focusing on the outcome of the trade talks between the United States and China. Overall, while global economic growth figures indicated deceleration, they were not “worrisome” and indicated no signs of recession, Barkindo said.

Source: Hellenic Shipping News

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GECF Secretary General Dr. Yury Sentyurin and OPEC Secretary General Barkindo

OPEC, GECF Sign MoU to Strengthen Cooperation

he Secretaries-General of the Organization of the Petroleum Exporting Countries (OPEC) and the Gas Exporting Countries Forum (GECF) on Friday, October 4th, signed a Memorandum of Understanding (MoU) to strengthen cooperation in research and the sharing of best practices. HE Mohammad Sanusi Barkindo, Secretary-General of OPEC, and his GECF counterpart, HE Yury Sentyurin, signed the MoU in Moscow on the sidelines of Russian Energy Week.The purpose of the MoU is to establish and strengthen cooperation in order to carry out activities and share experiences, views, information and best practices in areas of mutual interest. Areas of cooperation identified in the MoU include energy market monitoring, analysis, modelling and forecasting; energy market research studies covering the short- medium- and long-term, and their methodologies; energy market data and statistics, data and statistical operational topics (such as methodologies of data gathering, assessment and dissemination); energy initiatives and developments aimed at sustainability, along with environmental and social

responsibility; and other areas and matters involving common interests and concerns. OPEC and GECF also agree to cooperate, where possible and appropriate, on the exchange of information and data; hold expert meetings and internal bilateral workshops to promote the exchange of knowledge and experiences; and cooperate on seminars, workshops, conferences and publications. In addition, OPEC and GECF may further identify any other appropriate means to further their cooperation. The MoU follows discussions that took place earlier this year between the Secretaries General on the sidelines of the 9th IEA-IEF-OPEC Symposium on Energy Outlooks. The symposium took place at the International Energy Forum (IEF) Secretariat in Riyadh, Saudi Arabia. At their meeting of 27 February 2019, the Secretaries General recognized the numerous areas of mutual interest to both Organizations, including the fact that they have many Member Countries in common. They emphasized their desire to continue working closely together, both at a high-level, as well as on a technical level.

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INDUSTRY EVENTS

Climate Change: We Keep the Best Standards - PETAN By Ikenna Omeje

he Publicity Secretary of Petroleum Technology Association of Nigeria, Mr. Ranti Omole has said that members of the association keep the best standards, work hard to comply with the ISO 14001and practice effective waste management in response to tackling the challenges of global warming and climate change. He stated this in an interview with Majorwaves Energy Report on the margins of the Process Safety and Reliability Group (PSRG)-Richardson HSSE 2019 annual Health, Safety, Security and Environment (HSSE) forum, with the theme,” Global Warming- Real Issues and Our Responsibilities.” “I believe most of us comply with ISO 140001 on environmental management and ensure that we don’t get involved in things that increase the greenhouse effects of carbon dioxide on sites. We also ensure that we do housekeeping in most of our projects, also on waste management because some waste emit carbon dioxide that can lead to degradation. So really, we keep the best standards, we work pretty hard to comply with ISO 140001 and we also practice effective waste management and housekeeping in most of our projects and communities, where we work. And we ensure that we don’t destroy the environment, but rather, restore after we finish our various projects activities,” he said while responding to a question on what PETAN is doing in response to global warming and climate change. Bearing his www.majorwavesenergyreport.com

mind on the government response to global warming he noted, “We are not doing enough. Several years ago, we had those Programmes like aforestation progammes, where the government deliberately planted trees in the middle belt and arid parts of the north. Also, there were lots of river basin authorities and dams, which they tried to use to ensure that aforestation progamme, arable croppings and to ensure that the lands are utilised for farming. “But nowadays, we don’t hear of such Programmes, we don’t hear of any specific effort towards that. We must go back to planting trees, bringing back that culture, so that we can support aforestation and arrest desert encroachment.” Omole admonished that a concerted effort is needed and called on all stakeholders to work together towards tackling global warming and climate change in the country. Also speaking with Majorwaves Energy Report, the Chief Executive Officer/ Managing Director, Richardson Oil and Gas, who is also the convener of the forum, Mr. Akin Osuntoki said that the idea behind the programme is to give back and create a platform where stakeholders can come together to share ideas, network and proffer solutions to challenges. He expressed happiness that the programme has lived up to that initial goal. “The whole essence of the Programme is to give back. As you know, it is an alliance between the Process Safety and Reliability Group (PSRG) and Richardson Oil and Gas. When we started this,we wanted to give back;

we wanted to create a platform where all stakeholders will come together to share ideas, network and solve challenges together. It remains true to that initial intention. And that is why you find that each year, it is getting bigger and better, because all stakeholders derive value to the Programme,” he said The keynote speaker at the event, Environmental & Social Risk Management, Africa Finance Corporation (AFC), Ms. Constance Omawumi Kola-Lawal, who spoke on this year’s theme,” Global Warming Real Issues and Our Responsibilities” said that to respond positively to global warming and climate change, Nigeria and other African countries should adopt either climate change adaptation or climate change mitigation. She said that although the United States and China are the biggest culprits of greenhouse emissions, African countries may likely be the most affected if they don’t respond quickly and positively. Speaking on “Corporate Social Responsibility: Bridging Socio-Economic Gaps”, the Managing Director of Thistle Praxis Consulting, Mrs. Ini Abimbola described corporate social responsibility as “the DNA of an organization.” She called on corporate organizations to always engage their host communities before carrying out any CSR project, so that their projects will reflect the need of their host communities. She noted that for any organization to succeed in its business, periodic audit of CSR, just like the way organizations carry out financial audits, should be regularly carried out by the heads of organizations. The PSRG- Richardson HSSE Forum is an annual event and a platform for the convergence of industry players in diverse sectors including oil and gas, manufacturing, telecommunication, construction, finance, Marine, security, health, and relevant government agencies. The Forum was inaugurated in 2009 and since its inception, has received several recognitions from various industry stakeholders.

Ranti Omole

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INFRASTRUCTURE

INDUSTRY EVENTS

Over 20 Paper Presentations at the 2019 Power Nigeria Conference and Exhibition By Ikenna Omeje

here were over 20 paper presentations at the 2019 Power Nigeria Conference and Exhibition. The 8th edition of West Africa’s largest power and renewable energy event discussed numerous advantages that digitalization of the power sector in Nigeria will generate. The conference, which was held in Lagos from 24- 26 September, presented an opportunity for delegates to engage in constructive and interactive sessions with industry experts and decisionmakers from various organizations in the power and energy industry. Discussions also centred on the different methods digitalization that organisations can capitalize on. The role of technology in accelerating access to clean and sustainable energy in Nigeria was not left out. There was also a workshop on the installation of industrial solar systems. The session discussed the state of the market in the North-Eastern part of Nigeria, the challenges faced and successes recorded in installing an industrial solar system and a minigrid. Discussions on finance bordered on lack of access to capital, and how it hinders the electricity sector. It also touched on frameworks for assisting companies with funding requests; returns investors can expect and the trend for lending rates within the next two years. There are electricity-focused mutual funds and collective investment schemes, as well as risk-mitigation tools in projects or expansions. These formed discussion points. This year’s edition of the conference attracted hundreds of exhibitors and visitors. 12

Majorwaves Energy Report

Akpabio Lauds NDDC, SPDC On N24 Billion Ogbia-Nembe Road

he Minister of Niger Delta A ffairs, Sen. Godswill Akpabio, has commended the Niger Delta Development Commission, NDDC and the Shell Petroleum Development Company, SPDC, for completing the N24 billion Ogbia-Nembe Road, in Bayelsa State. Akpabio, who addressed NDDC management and staff recently during a working visit to the Commission’s headquarters in Port Harcourt, said that the success story of the partnership between SPDC and NDDC on the road project, should serve as a challenge to other international oil companies. He charged NDDC to prioritize signature projects in each of the nine states of the Niger Delta, stressing that these projects should be funded properly, monitored and supervised closely to ensure prompt delivery, so that NDDC would have legacy projects in the region. The Minister announced plans to start a Post Amnesty Initiative, where industrial clusters would be established across the region to engage youths who graduate from the current Amnesty Programme of the Federal Government. He noted that the programme would end someday and the youths may be forced to fall back on the NDDC. “All the nine Niger Delta states will have the industrial clusters that can absorb between 1,000 and 2,000 youths with different skills. We are going to provide for this in the 2020 budget of NDDC. The Ministry and the Commission will collaborate to realize this goal.” Akpabio stated that the mission of his Ministry and that of the NDDC were similar and that had made it necessary for them to work with one accord. He said the President means well for the people of the Niger Delta region and he has demonstrated this OCTOBER 2019, Vol 2 No 7

by ensuring effective development of the region, especially in the area of infrastructure and human capital development. “We are now united to ensure effective coordination of the development strides of this region. In fact, it is now rapid movement to the next level. Mr. President has placed the supervision of the NDDC under the palms of the Minister of Niger Delta Affairs. That is why we are here now to work together. We are now in a marriage. “The marriage needed to chart a new course for the people of the Niger Delta region. We have to be very frank with ourselves. There is a general consensus that the NDDC could have done better than what it has done in the past. “So, we have to work together to ensure that NDDC lives up to the expectations of our people. But even if we say that NDDC has not met our expectations, it does not mean that it has not made significant progress. It has contributed a lot to the peace in the region.” The Minister said that NDDC must drastically curtail its procurement activities by reducing the number of new projects and programmes. “As at today, the NDDC has 12,000 on-going projects and many of them are experiencing funding challenges,” he remarked. The NDDC Acting Managing Director, Dr Akwagaga Enyia, said the Commission has placed itself on a mission that was in sync with that of the Niger Delta Ministry, anchored on a new narrative that every Kobo expended by the Commission whether on execution of a project or provision of services, must count. Enyia disclosed that under three weeks, the NDDC had extended its frontiers in the desire to cut poverty by half and transform Niger Delta rural communities. “We have held discussions followed with Technical Committee Sessions with teams from the Federal Ministries of Finance and Agriculture, and the International Fund for Agricultural Development, IFAD. “We are driving a partnership to grow agribusiness in the focal states of the Commission that will target about 10 local government areas in each state. The programme, ‘Livelihood Improvement Family Enterprises Project in the Niger Delta, is bringing about $129.2million on the table.” Source: Sweetcrude Reports www.majorwavesenergyreport.com

LOCAL CONTENT

$17bn NLNG Train 7 Project ‘ll Create 40,000 Jobs

he execution of the Nigeria Liquefied Natu ra l Ga s (N L NG) Tra i n 7 project w i l l at it s p e a k c r e ate over 40,0 0 0 d i rect a nd i nd i rect jobs, the E xecutive S ecreta r y of the Nigerian C ontent D evelopment a nd Mon itor i n g Boa rd (NC DM B), Eng r. Si m bi Wabote has said. He stated this i n A buja du r i n g t he s i g n i n g of the L etter of I ntent (L oI) for t he Tra i n-7 E n g i ne er i n g, P rocurement a nd C onstr uction (EPC) Contract between NLNG a nd the prefer red consor tiumS C D, wh ich i s c on st itute d by t h r e e e nt it i e s – S a ip e m, C hiyoda a nd Daewoo. T he Manag ing Director of N L NG, Eng r. Tony Atta h sa id a t t h e e v e n t “ t h a t Tr a i n -7 w i l l move f rom F ront E nd E n g i n e e r i n g D e s i g n (F E E D) to detailed design, construction, commis sion a nd del iver y, a nd this pha se w i l l attract a l most $7bn w ith a n add ition of the upstream scope of $10bn which w i l l b o o st t he foreig n d i re ct investment prof i le of Niger ia.” H e p l e d g e d t h e c o m p a n y ’s com m itment to ach ieve t he p r oj e c t w it h i n fo u r to f i ve yea r per iod a nd hoped that it www.majorwavesenergyreport.com

would sign the Final Investment D ecision (F I D) by the end of October 2 019. Dwelling further on the opportunities, Wabote said “the NLNG Train-7 will deliver 10 0 percent eng ineering of all noncryogenic areas in-country. The tot a l i n- c ou nt r y e n g i n e e r i n g ma n-hours is set at 55 percent w h i c h exc e e d s t h e m i n i mu m level stipulated in the NOGICD Act, i n l i ne w ith our resolve to push beyond the bounda r y of l i mitations.” The schedule of the NOGICD Act set the m i n i mum eng i neer i ng man-hours for F EED and D eta i led Eng i neer i ng on L NG Facility at 50 percent. He stated further that the benefits of the Tr a i n 7 p r oj e c t w i l l e x te n d to site civ i l work s on road s, piling, and jetties, 10 0 percent l o c a l p r o c u r e m e nt o f a l l LV a nd H V ca bles, non- cr yogen ic va lve s, prote ctive pa i nt s a nd coatings, sacrificial anodes and many other direct procurements f rom our loca l ma nufactur i ng pla nts. T he ta rget, accord i ng to the E xecutive S ecreta r y, is to a s sem ble over 70 percent of a l l non- cr yogen ic pu mp s a nd control valves in-country, while

other spi n- of f oppor tu n ities i n c l u d e l o g i s t i c s , e q u i p m e nt lea sing, insura nce, hotels, office supplies, aviation, h au l a ge a nd m a ny mor e. He con f i r med that the M i n ister of State for Petroleum Resources, Chief Timipre Sylva has charged stakeholders connected with the N L NG Tra i n-7 project to fa st track actions related to it. According to him, “the Minister ha s this project a s one of h is focus a rea s to put a n end to t he d r ou g ht of F I D’s i n t he o i l a n d g a s i n du s t r y i n t h e l a s t few ye a r s”. A p a r t f r o m the job oppor tun ities a nd the accr ua ble revenue s f rom th i s mu lt i - B i l l i o n D o l l a r Tr a i n -7 project, the M i n ister a lso sees the add itiona l ton na ge of L PG to b e pro duced f rom Tra i n-7 a s a key benef it to reduce i mp or t at ion of L P G i nto t he countr y, he added. “He is a lso excited that the Train-7 project at t r a c t s ot h e r u p s t r e a m g a s supply projects required to keep the LNG train busy. The project o p e n s up ot h e r d e ve l o p m e nt opportunities for some gas fields in the shallow and deep offshore acrea ges such a s H I, H A, H K, a nd Opou kunou-Tuomo f ields” the loca l content bos s stated.

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LOCAL CONTENT Wa b o t e c h a r g e d t h e S C D c on s or t iu m to f u l ly implement the a g reed Niger ia n C ontent levels a s conta i ned i n the approved Niger ia n C ontent Pla n fo r Tr a i n -7 p r oj e c t , covering engineering, fa b r i c at i o n, c i v i l wo rk s , local procurement, project ser v ices, log istic s, equipment leasing, i n s u r a n c e, h ote l s , o f f i c e supplies, aviation, hau la ge, hu ma n c ap acit y development a nd jobs. A s part of his remarks, MD of N L NG, Eng r. Tony Atta h com mended NC DM B for c omplet i n g it s r ev iew of the commercia l eva luation r ep or t of Tr a i n 7 i n 4 8 hours, noti ng that it took t he natu ra l ga s compa ny a b out th ree month s to produce the commercia l eva luation summa r y. W hile confirming that N C D M B h a d ke pt to it s c o m m it m e nt o f r e d u c i n g its approval cycle on project s, the N L NG bos s a lso tha n ked the Federa l G over n ment u nder the le ader sh ip of P re sident Mu h a m m adu Bu h a r i a nd t he Honou r a ble M i n i ster of State for Petroleum Resources, C hief T imipre Sylva for the suppor t they provide for the project. He lauded the th ree entitie s that constituted the SC D c on s or t iu m – S a ip em of Italy, Japan’s C hiyoda and Daewoo of South Korea for del iver i ng the F E E D a nd pa r ticipati ng i n the E P C tender i n g. He c on f i r me d t hat t he i s sua nc e of t he L oI moved the NLNG even clo s er to t he F i n a l Investment Decision (F I D) a s the ceremony is t he de cla rat ion of i ntent a nd com m it ment to t he c o nt r a c to r s w h o w i l l g o for wa rd w ith the project. Tr a i n 7 w i l l m o v e t h e compa ny f rom 22 -mi l l iontons capacity f rom its si x tra i n s cu r rently to 3 0 m i l l i o n to n s , e s s e nt i a l l y about a 35 percent increase i n capacity.

Majorwaves Energy Report

Host Communities Association to Support Nigerian Content (NC) Implementation

he leadership of the Bayelsa State Chapter of the Host C ommun ities of Niger ia ha s pledged its readiness to support and work closely with the Nigerian Content D eve l o p m e nt a n d M o n ito r i n g B o a r d (N C D M B), t o e n s u r e the sustena nce of the Boa rd’s projects and peaceful operations i n t he st ate. T he a s s o ciat ion made this commitment at a visit t o t h e E x e c u t i v e S e c r e t a r y, NC DM B, Eng r. Si m bi Wa bote at t h e B o a r d’s h e a d q u a r t e r s i n Ye n a g o a , B a y e l s a S t a t e . T he State C ha ir ma n, H R H B om a A l b er t c om mende d t he B o a r d for s it t i n g one of t he Nigerian Oil and Ga s Park Schemes (NOGa Ps) in Bayelsa, h ig h l ig ht i ng t he b enef it s to i n c l u d e j o b c r e at i o n fo r t h e i nd igenes a nd i ndustr ia l i zation of thei r commun ities. He stressed the need for continuous engagement between the a s sociation a nd the Boa rd, to extract more benef its f rom various Nigerian C ontent i n it i at ive s. He r e q ue ste d t he B oa rd to i nclude mem b er s of the a s sociation on its sk i l l acquisition training w ithin and outside the oi l a nd ga s sector. In his words, “being a capacity development a gency, we plead w it h t he B o a r d to t ra i n ou r mem b er s t hat sp a n over 5 0 0 communities on skill acquisition in various strata of the economy to ensure that more people ca n benef it.” I n his com ments, the OCTOBER 2019, Vol 2 No 7

Executive Secretary, represented b y t h e G e n e r a l M a n a g e r, C or porate C ommunications a nd Zona l C oord i nation, D r. Gi na h O. Gi na h pledged the Boa rd’s readiness to support the g roup. H e n ot e d t h at t h e N i g e r i a n Oi l a nd Ga s I ndustr y C ontent D e ve l o p m e nt (NO G I C D) A c t r e c o g n i z e s t he pl ac e of ho st communities and this informed NC DM B’s decision to develop and issue the C ommunity C ontent Guidel i nes to protect thei r r ig ht s a nd pr iv i lege s in oi l a nd ga s operations. Gi na h expla i ned that NC DM B a l s o c r e ate d t h e C o m mu n it y C ontractors F inance Scheme as pa r t of the Niger ia n C ontent Intervention Fund (NCI Fund). He noted that q ua l i f ied f i r ms ca n acces s a s much a s Twenty Million Na ira, for use in f und i ng va l id contracts i n the oi l a nd ga s i ndu str y, w ith a ma x i mum tenor of f ive yea rs, at f ive percent i nterest rate. He added that the Board a l s o prov ide d for c om mu n it y contractors participation in the pr o c u r ement of item s i n t he second pha se of the NOGa PS development.

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I must a ffir m the Board’s determination to conti nuously work w ith host commu n ity stakeholders and ensure that we suppor t ever y go o d ende avou r s prop o s e d to us,” Gi na h sa id www.majorwavesenergyreport.com

LOCAL CONTENT

NLNG Submits Train-7 Project NC Compliance Requirements To NCDMB Wabote harps on Train-7 FID as directed by Sylva

team from the Nigerian LNG (NLNG) led by the Managing Director, Mr. Tony Attah, last month, met with the Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Engineer Simbi Wabote to formally submit the outcome of its recently concluded commercial evaluation exercise of the multi-billion dollars Train-7 project. This submission represents the penultimate step of the Board’s project certification and authorization procedure in compliance with the Nigerian Oil and Gas Industry Content Act of 2010 (NOGICD). Mr. Attah was effusive of the Board’s support at every stage of the process with the sign-off of the Train-7 Nigerian Content Plan in March 2019 up to this stage. He highlighted that although the previous LNG trains were built before the enactment of the NOGICD Act 2010, his company made it a point of duty to fully comply with the requirements of the Act for the Train-7 project. The Executive Secretary commended NLNG for showing a good example with the level of compliance at every stage of the Train-7 project. He said the Board and NLNG have set a new record with the Train-7 project considering the quick turn-around of Nigerian Content approvals obtained from the Board within 5 months. This he said is the stage of the process of identifying the most commercially attractive and Nigerian Content compliant bidder. Wabote highlighted that the Hon Minister of State for Petroleum Resources, Chief Timipre Sylva is very keen on the Train-7 Project FID as it will create jobs, enhance participation of Nigerian businesses in the oil and gas sector, and address insecurity in the region. Thus, the Minister of State has directed that any encumbrance related to the FID of Train 7 must be addressed by all agencies of the Ministry so that FID is taken in a matter of weeks. Wabote promised that the Board will complete the review of the submitted NC requirements and revert to NLNG within a few days. The Executive Secretary also commended the transparency associated with the entire process including the sensitization workshops held in Abuja, Bonny, and Port Harcourt. He admonished other companies to follow Train-7 example to get timely certification of their projects by the Board. www.majorwavesenergyreport.com

NCDMB To Partner NFIU Against Capital Flight

he Niger ia n C ontent D evelopment a nd Monitor ing Boa rd (NC DM B) w ill collaborate with the Nigerian Financial I ntel l igence Un it (N F I U) to reduce capital flight in the oil and gas industry, retain capita l spend i n the loca l economy a nd create va lue. T his a g reement wa s sea led la st month when the E xecutive S ecreta r y NC DM B, Eng r. Si m bi Wa bote received the C h ief E xecutive Off icer of the N F I U, M r. Mod i bbo Ha mma n Tu kur at the Boa rd’s A buja l ia ison off ice. Tu kur expla i ned that N F I U is the Niger ia n a r m of the g loba l f i na ncia l i ntel l igence u n its. He added that the N F I U seek s to sa feg ua rd the Niger ia n f i na ncia l system a nd contr i butes to the g loba l f ig ht a ga i nst money launder i ng, terrorism financing and related crimes through the provision of credible financial intelligence. He i nti mated the Boa rd a bout setti ng up a F i na ncia l Action Ta sk Force to eva luate a nd a na lyse f i na ncia l tra nsactions ca r r ied out by f i na ncia l i nstitutions a nd profes siona ls that hold f u nd s i n t r u st for e sta bl i sh ment s a nd i nd iv idua ls. I n his rema rk s, Wa bote a ff i r med the Boa rd’s preparedness to collaborate with NFIU to curb capita l f l ig ht for the benef it of the C ountr y. He noted that the Board had taken a pragmatic steps to i mplement the Niger ia n Oi l a nd Ga s I n d u s t r y C o nt e nt D e v e l o p m e nt (N O G I C D) Act a nd i s open to sig n i ng a Memora ndu m o f Un d e r s t a n d i n g (M oU) w it h t h e N F I U. S p e a k i n g f u r t her, t he E xe c ut ive S e c r et a r y expla ined that pa r t of the Boa rd’s ma ndate is to promote i nd igenous pa r ticipation i n the oi l a nd ga s sector, stres si ng that L oca l C ontent is not i ntended to ‘Niger ia n i ze’ the i ndustr y, rather is focused on dom ici l i ng oi l a nd ga s activ ities i n- countr y.

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LOCAL CONTENT

Bukola Adubi

Award of NLNG Train 7 to SCD Will Deepen Local Participation, Reinforce Local Cable Supplies – Adubi, Miccom Cables

s the Nigerian petroleum industr y expects Total E &P to reach a F inal I nve stment D eci sion (F I D) o n t h e $10 b n N L N G Train 7 project by the end of 2 019, experts have expressed optimism that the award of the constr uction contract to SC D Group will deepen local content contribution to the project. The SCD J V consortium comprising the Italian company, S a i p e m , J a p a n’s C h i y o d a C orporation and South Korea’s Daewoo, would undertake the eng ineer ing, procurement, and construction of the pr oje ct. Ta k i n g a cue f r om the verifiable in-countr y value retention ev idence d i n t he E g i na project, now en ha nced by the ser vice level agreement (SL A) signed by the company w it h t he Niger ia n C ontent D evelopment a nd Mon itor i n g Board, NCDMB, it is believed that the tra in 7 project w i l l surpass industry expectations in terms of local participation, said Bu kola Adu bi, t he M a na g i n g Director of Miccom C ables on the sidelines of Power Nigeria conference which held in Lagos

Majorwaves Energy Report

recently. She added, “ser v ice a nd ma nufactur ing compa nies have i nve sted re sou rce s, a nd g row n technica l capacities in preparation for these projects.

“

We shall see a multiplier effect across several sectors when the project is completed in 2023”.

But ahead of that, indigenous manufacturers of cables like us have stepped up to the challenge to ensure the ca ble needs of projects like these are met by local supplies.” It i s e s t i m at e d t h at , at i t s peak, the project will provide over 4 0,0 0 0 d i re ct job s a nd over 10 0,0 0 0 i nd i re ct a nd i n du c e d e mp l oy m e nt o f ove r 10 0,0 0 0 workers C ommending the NCDMB and the NOGICD Act, Adu bi noted that, ever y op e r ato r, a s a r e s u lt o f t he Board’s sensitisation, has gotten the ba sic k nowledge of its obligations to Nigerian content development. She stated that, “ t he robu st act iv it ie s of t he NCDMB ensures that all players are conscious of the provisions of the Act”. Though difficult to

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track, the industry’s maintenance works needing low, medium or even high voltage cables can be ha nd led by i nd igenous f i r ms, A du b i a s s e r te d. P r ov i d i n g a n update on the train 7 project during the Total’s Investor Day in New York recently, A rnaud Breuillac, Total’s President of Exploration and Production, said the construction at the Bonny Island plant would increase its capacity, adding seven million tons per year (tpy) of gas to the existing 22 million tpy. NLNG is a joint venture company owned by Nigerian National Petroleum Corporation (49 percent), Shell (2 5 . 6 p e r c e n t), To t a l (1 5 percent) and Eni (10.4 percent).

www.majorwavesenergyreport.com

Majorwaves Energy Report

OCTOBER 2019, Vol 2 No 7 17

POWER

DisCos Blame TCN For Interruptions Despite $1.6b By Ikenna Omeje

le ct r icit y D i st r i but ion Companies (DisCos) have flayed the Transmission Company of Nigeria (TCN) over its obsolete and collapse system that has caused inefficiencies and 5,311 interface disruptions in one DisCo in the first 18 days of September. The Association of Nigerian Electricity Distributors (ANED), which represents 10 DisCos, except Yola DisCo said despite $1.6 billion multilateral funding of TCN, its equipment has caused over 100 electricity grid collapses since privatisation in 2013, and nine collapses this year. In a statement by ANED Executive Director, Research and Advocacy, Chief Sunday Oduntan, explained that it was responding to a recent TCN report that the DisCos misrepresented crucial power evacuation and distribution data. Presenting the facts, ANED said it owes an obligation to the 10 DisCos who have invested about $1.4 billion in the networks, insisting that the DisCos had not rejected energy load as TCN claimed in its publication. ANED also accused TCN of falsifying data that conflicts the data presented to DisCos by the National Control Centre (NCC) which is under TCN and coordinate power allocation to DisCos. While TCN headquarter data published on September 20th, 2019, showed that 13,963megawatts (Mw) was delivered to DisCos between August 22nd and

Majorwaves Energy Report

24th of 2019, the NCC data showed it was 19,173Mw. ANED said indicated a conflicting difference of 5,208Mw data within the same company. “It raises questions as to the veracity and accuracy of TCN’s response, in terms of the energy that is delivered to the DisCos. How could TCN’s supposed sent-out or delivered energy exceed that recorded by its control center, the singular source for such information,” ANED said. While urging TCN to focus on improving its network, the DisCos said except for February 1, 2016, when TCN wheeled 4,557Mw, it has never wheeled sufficient energy to meet the DisCo energy off-take assumptions specified under MultiYear Tariff Order (MYTO) 2015. ANED said the $1.6 billion Federal G over n ment- g u a r a nte e d a nd multilateral funds and grants that TCN has got is unavailable to the privatised Generation Companies (GenCos) and DisCos. Despite TCN saying it is implementing its Transmission Rehabilitation Expansion Programme (TREP) with the $1.6billion, “the reality is otherwise. The Nigerian Electricity Supply Industry (NESI) continues to deal with, largely, a TCN that finds it difficult to move away from a PHCN-legacy of uncleared equipment containers, analog-based and informal communications systems and frequent explosions and burnings of transmission sub-stations and transformers.”

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The DisCos said such substation fire recently put Agbor and Asaba towns of Delta State; and Oye, Ekiti State in blackout. “Over 100 partial and total system collapse recorded since privatisation and nine total system collapses so far this year; multiple transmission interface deficiencies with 5,311 TCN interface interruptions in one DisCo franchise area, from September 1 – 18, 2019.” Citing Siemens: Electrification Roadmap for Nigeria report of May 7, 2019, Oduntan said: “Today, power distribution by the DisCos to end-customers is limited by power infeed from TCN.

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Rather than eliminate all of the bottlenecks of the transmission grid, TCN, vociferously and continuously, continues to crow about its computer-simulated increase in capacity, ignoring the fact that it, currently, only averages a daily 3,700Mw of wheeled or transmitted energy to the DisCos, out of its tested transmission capacity of 5,500 Mw.” It also noted that TCN’s constant drumbeat of the need to re-capitalize the DisCos distracts from the fact that any such re-capitalisation cannot occur in an environment that lacks the following – respect for, or sanctity of contract; regulatory and policy certainty and consistency; ability of the sector operators to recover their costs of doing business; and an alignment of technical and commercial considerations. www.majorwavesenergyreport.com

POWER

Sahara Group, UNDP to Boost Access to Sustainable Energy for 10 Million Households in Africa By Ikenna Omeje

a h a r a Gr oup a nd t he United Nations Development Programme (UNDP) have launched the Africa Renewable Energy Forum to boost access to sustainable energy for 10 million households in A frica through alternative energy initiatives and interventions. This was contained in a press release made available on the company’s website last month. The Forum was launched on the sidelines of the 74th UN General Assembly in New York, United States. The Africa Renewable Energy Forum is expected to bolster ongoing partnership between UNDP and the Sahara Group that aims to create access to clean and affordable energy in Africa. It will serve as a platform for policy discussions, multi-stakeholder collaboration and funding towards the implementation of tailored renewable energy solutions across the continent. Ultimately, the platform will galvanise the political momentum needed to record significant progress through strong partnerships, effective regulation, and mutual accountability. The event had senior officials from both organisations in attendance including, Regional Director and Assistant Secretary-General for UNDP Regional Bureau for Africa, Ahunna Eziakonwa, the Group Managing Director, Sahara Power Group, Kola Adesina, the Director, Governance and Sustainability, Sahara Group, Pearl Uzokwe, Bethel Obioma, the Head Corporate Communications, Sahara Group, Bethel Obinna and a Private Sector Engagement Specialist, Sahara Foundation, Babatomiwa Adesida. According to Sahara Group, Africa has the highest percentage of untapped hydropower potential in the world, with only 11% www.majorwavesenergyreport.com

utilization capacity. Whilst the global electrification rate reached 89% in 2018 and 153m people gained access to electricity (WB Stats, May 2019), the biggest challenge remains in the most remote areas globally and subSaharan Africa in particular, where an estimated 573m people are not connected to grid power. Speaking at the event, Ahunna Eziakonwa said with over 600 million Africans having no access to electricity, the continent urgently needs to embrace renewable energy sources to sustainably connect the poorest and hardest to reach households. “Access to energy will enhance the cause of poverty alleviation and also yield huge benefits for education, healthcare, production, and socio-economic development. The UNDP-Sahara partnership is extremely crucial as it will provide a model for engaging a wide range of stakeholders to address the continent’s energy challenge in line with the SDG framework,” Ahunna was quoted to have said. In his remarks, Kola Adesina said the initiative has the potential to create over one million jobs in Africa as the continent continues its march towards achieving the 2030 SDG Agenda. “Renewable energy is still in its infancy as far as Africa is concerned. We need unrelenting awareness initiatives to inspire a mindset shift to renewable energy in Africa with the various governments, private sector and development agencies leading the charge. At Sahara Group we believe that interventions like the UNDPSahara partnership will enhance productivity and shared prosperity in Africa.”

How Nigeria’s Power Sector Lost N1.9 Billion in One Day By Ikenna Omeje

igeria’s struggling power sector has recorded a loss of N1.9 billion in just one day. According to Electricity Generation Companies, GenCos, the shortfall was due to insufficient gas supply, distribution, and transmission infrastructure. The GenCos had on Friday 27th September, said they had due to the constraint, released an average of 3,857 megawatt-hour of electricity into the national grid on Thursday-almost 2000MW short of the expected 5000MW. The update contained in a daily Energy Report by the Advisory Power Team, Office of the Vice President, said the shortfall had led to the loss of an estimated over N1.9 billion on Thursday, 26th September. Statistics provided by the group showed that electricity sent out was up by 2.6MW. It, however, said 2,144.50 megawatts could not be generated due to unavailability of gas. The report said zero megawatt was also not generated due to unavailability of transmission infrastructure during the period. Similarly, it said 1,719 megawatts were not generated due to high frequency resulting from the unavailability of distribution infrastructure. According to the report, zero megawatt was recorded as losses due to water management procedures. On sector reform and activities, it said the dominant constraint for Thursday, 26th September was unavailability of gas. Peak generation attained the same day was 4,397 megawatts. Nigeria currently generates 7000MW however, 2000MW is stranded due to low transmission capacity.

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OCTOBER 2019, Vol 2 No 7 19

EVENT

CELEBRATING EXCELLENCE IN AFRICA’S OIL & GAS Featuring the Big Five Board Awards 2019 and Big Five Charity Auction The Geological Society, London, 21 November 2019 The Big Five Board Awards offer an unrivalled evening of networking for Africa’s leading oil and gas companies and senior executives in a receptionstyle event for these long-respected and annual accolades. Awarded since 1997

and with over 100 recipients to date, the Big Five Board Awards enter an incredible 23rd year. The event supports the plight of African wildlife and aims to raise funds for various conservation projects on the African Continent with a charity auction.

Keynote Speaker

Ade Adeola Managing Director, Energy & Natural Resources Standard Chartered Bank plc

Building Africa’s Oil & Gas Future Event Highlights • Recognise industry key-players and top performers • Champion Africa’s interests in the oil, gas and energy sector • Enjoy an evening of top level networking • Raise money for conservation in Africa

Visit bigfiveawards.com to Register Now £150 +VAT www.bigfiveawards.com | Tel: +44 20 7193 8224 | email: info@frontierenergy.network

Majorwaves Energy Report

OCTOBER 2019, Vol 2 No 7

www.majorwavesenergyreport.com

SPOTLIGHT Do you have an office here in Nigeria? Yes. We are on Acme Road, Agidigbin, Ikeja. We also have locations in Port Harcourt and Abuja. Do you manufacture here in Nigeria? Do you have a plant here?

Engr Ernest Nwapa (fmr E.S NCDMB) presents award to Mr George Onofowokan at NOG 2019

“We Use Technology to Drive Down Cost” - Country Director, Kartel Energy

la Ogunsemowo is the Country Director of Kartel Energy. He has a first degree in Computer Science and trained as a developer before joining the renewable industry. In his eight years journey as a developer and a computer scientist, he has worked in both engineering and technology companies. Ola, was one of the speakers at the recently concluded 2019 Power Nigeria Conference held in Lagos, where he spoke on, “The Role of Technology in Accelerating Access to Clean and Sustainable Energy in Nigeria.” In this interview with IKENNA OMEJE, he speaks on how his company, Kartel Energy, is helping to accelerate access to clean and sustainable energy in Nigeria and other things his company is doing in the country. Can you tell us what Kartel is into? Kartel is into renewable products. www.majorwavesenergyreport.com

Kartel is a manufacturer of i n v e r te rs , b a t te r i e s , s o l a r panels, controllers and all those components that make up a complete home system. Your presentation was titled, “The Role of Technology in Accelerating Access to Clean and Sustainable Energy in Nigeria.” How has Kartel been helping in using technology to accelerate access to clean and sustainable energy in Nigeria? The first is in the area of manufacturing. Before now, solar energy was out of the reach of many, and you know the power situation in Nigeria; a lot of people want solar power, but you discover that it is beyond the reach of many because of the cost. For us, we use technology to drive down cost, to make our products in such a way that we can adapt to the Nigerian environment and at the same time be affordable for many people to enjoy. We want to see a solar panel on every rooftop in the urban and semiurban areas, but cost is one area we are working on. So, we improve our technology and we also make sure that it translates to lower cost for customers.

For now, all our products are manufactured in China, we do not have plants here in Nigeria because having a plant in Nigeria is a whole lot; recurrent expenditure is very high. One, we do not have a power supply, it is one of the problems we are trying to solve even now. To Site a manufacturing plant here requires a lot, there is manpower requirement, there is energy requirement; a whole lot, so for now, our mid-term goal is only to assemble products here. That will also ensure employment opportunities for many others who have the skill sets to work with us. Maybe in the nearest future we can start a manufacturing plant. What plans do you have towards taking advantage of the Nigerian labour market; like training young graduates? About two months ago, we organized a training for stakeholders in the industry. It was just a short training that lasted for two days; the turnout was massive and the participation was very, very encouraging. We could also see that Nigerians are not complacent; people are thirsty for knowledge they want to learn. So for us, what we have decided is that instead of moving around the country from one location to another, we decided to package all of these into an online series of courses – technical courses in all those identified areas where skills are lacking. We will start registration by November. We will accept candidates and they will be able to go for training for several weeks. The best emerging candidates will be given the opportunity to do an internship with us for a few months and eventually, some may be retained to work with us. So what is your local content policy like? We partner with local companies; we bring in the products and then allow local companies to do the installations, the project executions and build capacity as well. And through that, they make income and grow their businesses as well around our products.

Majorwaves Energy Report

OCTOBER 2019, Vol 2 No 7 21

SOCIAL INVESTMENT

NNPC/Seplat JV Supports SDGs With Community Interventions

eplat Petroleum Development Company Plc (SEPLAT), operator of the NNPC/ SEPLAT Joint Venture, has said its intentions in host communities and other communities in the areas of health, education and economic empowerment, among others, are in line with its mandate to support the Sustainable Development Goals (SDGs) of the United Nations. To this end, the joint venture, in September, brought succour to community members of its areas of operation and other indigenes of Imo State, as it holds the 2019 edition of its Eye Can See and Safe Motherhood programmes, the company’s signature Corporate Social Responsibility (CSR) health programmes. Speaking at the opening ceremony which took place on September 19th at the Medical Health Centre at Izombe, Imo State, the wife of the Imo state governor, Lady Ebere Ihedioha who flagged the medical outreach open said: “If all the corporate organisations were to tow this route of SEPLAT petroleum today, the burden of underdevelopment and social restlessness particularly in the oilproducing areas in the state would be greatly reduced. This programme, therefore, places SEPLAT Petroleum at the top of the Corporate Social

Majorwaves Energy Report

Responsibility in the state, and by extension has won the hearts of our people.” The ‘Eye Can See’ and ‘Safe Motherhood’ Programmes are Seplat’s CSR initiatives executed annually across the Company’s host communities, with a focus on providing comprehensive, quality and free healthcare to members of the host communities and states. These programmes align with the Sustainable Development Goals 3, Health for All and the respective state governments’ aspirations of providing good health for their people. In the company’s response, Dr. Chioma Nwachuku, General Manager, External Affairs & Communications, representing Mr. Austin Avuru, the Chief Executive Officer of Seplat, said: “People are at the center of everything we do. The NNPC/SEPLAT joint venture takes delight whenever we have the opportunity to deploy these two key programmes specially designed for the wellbeing of our community members and for other indigenes of the state who wish to access the benefits of these health progrommes.” Through the Eye Can See and Safe Motherhood initiatives, Seplat has provided premium health care in line with its commitment to ensuring the wellbeing of people living in its host

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communities. The company began in 2017 to run these programmes annually in these communities. The Eye Can See initiative has brought community dwellers face to face with specialist optometrists. Within the two years, a total of 7,343 patients have benefitted from the initiative, 2,200 reading glasses have been given to patients while over 233 successful eye surgeries have been conducted. On the other hand, through the Safe Motherhood initiative, Seplat has supported pregnant women and nursing mothers with Safe Motherhood kits comprising a maternity bag, treated mosquito nets, vitamin supplements, and other medical items which foster safe delivery, and cater to babies. As part of the programme, pregnant women are also enlightened about safe and planned motherhood as well as childcare. So far, 3,586 expectant mothers have received Safe Motherhood kits in Seplat’s Eastern Asset area in the last two editions of the initiative. This year’s Opening ceremony was attended by government dignitaries, traditional rulers, community leaders, government officials and Management/Staff of Seplat and NNPC. www.majorwavesenergyreport.com

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OCTOBER 2019, Vol 2 No 7 23

UPSTREAM

Jubilation as Sylva, Kyari Re-Open OML 25 in Rivers, Sue For Peace

il production activities are now set to recommence in Oil Mining Lease, OML 25, two years after the Belema Flow Station and Gas Plant was shut down, due to a protracted dispute between Shell Petroleum Development Company, SPDC, and the host communities. This is as the Federal Government through the Ministry of Petroleum and the Nigerian National Petroleum Cooperation (NNPC), recently settled the dispute among SPDC, Belemaoil Producing Limited and the host communities, and ordered for the reopening of the oil block within ten days. Meanwhile, there was a huge jubilation on Saturday 28th September, as the host communities of OML25, including women and youth, agreed to vacate the Belema flow station and gas plant for commencement of activities. Addressing the Belema women during the reopening of OML25, the Minister of State for Petroleum, Chief Timipre Sylva, urged them to allow flow of activities, assuring that their interest and agitations will be met with the current development Sylva who was also a former governor of Bayelsa State, charged the people of Kula Kingdom to ensure a conducive atmosphere for investment and development in

Majorwaves Energy Report

the area. He assured the people of the Federal Government’s supports but challenged them for unity and peace among their communities so that investors and investments could be attracted in their communities. “We need peace because if we don’t begin to make our communities peaceful, development will not come, investors want to come here, but we must make our communities conducive for them to come, if investors do not come, there will be no employment for our youths. “It is now our responsibility to bring peace in our communities so that these inv storage can come and create the jobs. I must tell you that this is historic, at no time in the history of Nigeria, such an array of high-level delegation visited a community related to the oil industry. “We have just come here to tell you that you are not alone, the Federal Government is with you, the President is with you, and I want members of the community and Belemaoil to know that we are with you and will support you every step of the way. “We want to assure you that our relationship with the communities have come to stay, I want to appeal to you that we need unity in Ijaw land

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today. We have fought to this point, at least the Federal Government have started to look to our way, it is time for us to change strategy and bring the benefits of investments to our communities,” Sylva said. Also, the Group Managing Director of NNPC, Mr Mele Kyari, said he was interested in ensuring peace and security to ensure that normal life returns to the communities, for development to thrive. “We are happy that we have been able to find solution to the two years dispute and disagreement, we have found a solution and the solution will enable people to go back to their work, employment will be created, and social services will also be created.” On his part, the Amanyanabo of Kula Kingdom, Dr. Koroma Eleki, commended President Muhammadu Buhari for the peace deal, while awarding chieftaincy titles to Chief Timipre Sylva and Mr Melee Kyari, for their contributions in resolving the protracted dispute and bringing peace to his kingdom. King Eleki who inducted the Minister and the GMD into the Kula Council of Chiefs, with full paraphernalia of office, awarded Sylva as Amabelebo of Kula Kingdom, and Kyari as Diepreibo I of Kula kingdom. www.majorwavesenergyreport.com

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OCTOBER 2019, Vol 2 No 7 25

Nigeria@59:

Appraisals, Threats, Opportunities, in the Petroleum Industry By Jerome Onoja & Ike Amos

igeria’s petroleum industry has had a chequered history. Despite the massive revenue accrued to the country from the petroleum industry, the country is still battling with dilapidated infrastructure, declining foreign reserves and a struggling economy. This article highlights the journey of the Nigerian petroleum industry, underscores the various opportunities and threats, while emphasizing the inherent opportunities going forward. Nigeria has come a long way in crude oil and gas exploration since the discovery in commercial quantity at

Majorwaves Energy Report

Oloibiri, in present-day Bayelsa State. In the early days of exploration and production, Nigeria’s crude oil output and export was about 5,100 barrels per day, today however, it has risen to about 2.3 million barrels of oil per day. Before the commencement of production in Oloibiri, a German c omp a ny, Ni ger ia n Bitu men Corporation, NBC, had explored for oil in Ondo State, the South-Western area of Nigeria in 1908. However, it stopped its exploration activities in 1914 during the period of World War 1. Crude oil exploration resumed in 1937 by Shell-D’Arcy, a consortium of Shell and Royal Dutch Company. The companies explored for crude oil in Owerri, South-Eastern Nigeria. World War II broke out in 1939, effectively bringing oil exploration in Nigeria to a halt.

OCTOBER 2019, Vol 2 No 7

At the end of the war, Shell resumed exploration in partnership with British Petroleum, BP, concentrating its renewed exploration efforts on onshore western Niger Delta. Their efforts eventually paid off in 1956, as they made the first commercial discovery at Oloibiri.

Oloibiri Well, First Drilled Oil Well In Nigeria, in June 1956

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COVER STORY

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Today, the majority of Nigeria’s crude oil and gas output is from deep offshore oil fields and due to technological advancements”

and availability of skilled labour, companies are deploying advanced information and communication technology in oil production. Specifically, documents obtained from the NNPC disclosed that the from the very beginning of oil exploration in Nigeria in 1937, till early 1993, virtually all exploration and production activities were restricted to land and swamps, noting that where prospecting ventured offshore, it was in areas not greater than 200 metres water depth. “But then in 1993, the Federal Government opened up a new frontier in oil and gas exploration, heralding the bright prospects of a promising future, by allocating some offshore blocks in water depths reaching 2500 metres. These deepwater depth and plans for even greater depths than 2500 metres will undoubtedly impact positively the country’s production and reserve blueprint. “Though these deepwater operations are technically challenging and massively capital intensive, experienced multinational companies have been awarded some deep offshore blocks, as well as ultradeep concessions. “By the end of 1998, the deepwater operators in Nigeria had achieved the following: acquisition of 21,000 kilometres, KM, 2D seismic lines; acquisition of 21,500 km 3D seismic lines and drilling of 33 exploration/appraisal wells in depths ranging from 3001460 metres,” NNPC stated. Since the discovery of crude oil till date, Nigeria has awarded 185 oil blocks to several companies, including the Nigerian National Petroleum Corporation, NNPC. The awarded oil blocks comprised 76 Oil Prospecting Licences, OPL, and 109 Oil Mining License, OML.

“

However, out of the country’s total of 393 oil blocks, 208 oil blocks are yet to be allocated”.

In the early days of exploration and production, activities were mainly onshore, due to absence of requisite manpower and low technological knowhow at the time. www.majorwavesenergyreport.com

To this end, it had been stated that investments in deepwater exploration had risen to $1.3 billion as of 1998, as against $864 million recorded in the first six years of deepwater prospecting. However, despite the immense opportunities and benefits presented by crude oil and gas exploration, the Nigerian economy is still at a state of despondency, as the majority of the country’s population wallows in abject poverty.

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F rom 1959, when commercial crude oil was discovered in Nigeria, till date, the country has earned about $2 trillion from crude oil and gas sales” but a large chunk of these earnings had been mismanaged, stolen or

frittered away by state actors, oil thieves and saboteurs. Today, about 60 years since the country began selling crude oil and gas, Nigeria is still lacking in basic infrastructure, failed to establish a proper linkage between the petroleum industry and the economy; failed to institutionalize the excess crude revenue account and is currently struggling with low foreign exchange reserve. Today, while Nigeria’s sovereign wealth fund is hovering around $1.5 billion, Norway’s equivalent of the sovereign wealth fund is around $1.1 trillion. Nigeria’s sovereign wealth fund is also a far cry from the oil savings of the majority of the oil-producing Arab nations. In addition, while Brazil and many other oil-producing countries of the world have aggressively pursued manpower development and building of critical infrastructure, Nigeria still relies on infrastructure built in the 1970s and 1980s, while the country still relies on manpower from advanced countries to drive critical segments of its petroleum industry. However, despite the inability of the country to get the best from petroleum industry,

“

the years ahead appear even brighter, especially with the numerous measures put in place by the Federal Government, mostly in the area of local content development”

review of existing contractual structures, planned big-ticket projects among others. Specifically, the proposed ban on the importation of certain categories of vessels into the country from December 2020 and 2024 is expected to grow local capacity in shipbuilding and catalyze the growth and development of the transportation sector, not leaving its ancillary sectors behind. It is also expected to create employment opportunities, engender the development of inland waterway depot and technology transfer in the areas of repair and building of vessels in the country. Also, the Nigerian Content Development Monitoring Board’s (NCDMB) target to achieve 70 per cent local content by 2027 would see a massive increase in local participation in the Nigerian petroleum and bring the much-needed linkage between the industry and the Nigerian economy. Already, indigenous service companies under the aegis of Petroleum Technology Association of Nigeria

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OCTOBER 2019, Vol 2 No 7 27

COVER STORY In addition to the taxes, levies, rents, royalties, and bonuses that are usually imposed on companies operating in the oil and gas sector, Kyari said the Federal Government stands to gain from dividends that would be distributed to shareholders by each IJV.

Bank Anthony-Okoroafor

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(PETAN) annually record a cumulative average of $2 billion dollars in contracts they deliver to IOCs and independents”.

PETAN members are also reputed to spend an average of $10 million in training its workforce yearly, to acquire the requisite skillset to stay relevant in the rapidly innovating industry. Again, the same body expends a minimum of $3 million on international trade shows annually to showcase developed skill sets and domesticated technologies, while forging new partnerships with more advanced technology firms. The investments and positioning by PETAN members are hinged on the opportunities the local content law, Nigeria oil and gas industry content development (NOGICD) Act presents before indigenous players. The regulatory body of this Act, NCDMB has set a target of achieving 70 per cent local content through the implementation of its 10-year roadmap 10-year roadmap, would lead to the creation of 300,000 jobs from industrial activities, and the retention of $14 billion in-country out of the $20 billion annual industry spend. Another initiative that would drive activities in the Nigerian petroleum industry in the years ahead is the government’s adoption of the Incorporated Joint Venture (IJV) model. The model, according to Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari, is expected to make oil and gas business more productive and beneficial to investors, create a robust business system that allows for projects selffinancing and guarantees a win-win situation for all stakeholders. He added that

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Mallam kyari

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the incorporation element of IJV allows it to operate as an independent entity that can source capital to fund its projects and deliver dividends to shareholders at the end of each financial year, as the IJV model would aid the financing of joint venture projects”. The benefits of incorporation of a company include having a separate legal personality from its owners and the ability of the IJVs to independently raise finance for funding petroleum operations without reliance on, and/ or recourse to, its shareholders.

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Furthermore, the NCDMB-promoted Nigerian Oil and Gas Parks Scheme (NOGAPS), planned across the oilproducing region of the country, would lead to the emergence of a vibrant oil and gas hub that would attract businesses that would want to set up facilities and take advantage of the incentives that are obtainable there. The NOGAPS aims to establish a regional low-cost manufacturing hub that would produce equipment components and spare parts that would be utilized in the Nigerian oil and gas industry. When the parks become fully operational, millions of jobs would be created in the areas where they are established, while the citizens of the host community and environs will benefit from on-thejob training opportunities. Executive Secretary of the NCDMB, Engr. Simbi Wabote had explained that NOGAPS sites are planned to be sited close to existing power plants while provisions are also made to generate captive power in a bid to address the electricity challenge that faces most Nigerian manufacturers and businesses. Other opportunities that would reposition the petroleum sector in the years ahead included the Nigerian Gas Flare Commercialisation Programme, NGFCP, which is envisaged to attract about $3.5 billion worth of investments into the Nigerian economy. Specifically, Project Manager of the NGFCP, Mr. Justice Derefaka, noted that assuming an average project size ranging from $10 million to $40 million, the NGFCP has a potential of triggering 70 to 89 projects, adding that over oneand-a-half to two-year period, the NGFCP could generate approximately 300,000 direct and indirect jobs. He added that once operational, projects launched under the NGFCP would reduce Nigeria’s emissions by 13 million tonnes of carbon dioxide per year. Other forthcoming opportunities included the new oil and gas finds, Indorama Petrochemical project, Dangote Refineries and some modular refineries, which are expected to address Nigeria’s fuel supply challenges, help conserve the country’s foreign exchange,

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COVER STORY

He said, “Those in the service industry are not left out with the target to assemble over 70 per cent of all non-cryogenic pumps and control valves in-country. Other spin-off opportunities include logistics, equipment leasing, insurance, hotels, office supplies, aviation, haulage, and many more. “The target job numbers are very exciting. At its peak, the project will provide over 40,000 direct jobs and over 100,000 indirect and induced employment of over 100,000 workers. Justice Derefaka

strengthen the country’s currency and create employment opportunities among others. Furthermore, the Nigerian Liquefied Natural Gas (NLNG) Train 7 project, which is expected to commence before the end of this year, would ramp up NLNG’s production capacity by 35 per cent from 22 million tonnes per annum (MTPA) to around 30 MTPA. Managing Director of the NLNG, Engr. Tony Attah, said the Train 7 project would form part of the investment of over $10 billion including the upstream scope of the LNG value chain, thereby boosting the much needed Foreign Direct Investment (FDI) profile of Nigeria. Attah noted that the project is anticipated to create about 10,000 new jobs during the construction stage, and on completion, help to further diversify the revenue portfolio of the Federal Government and increase its tax base. The construction period after taking the Final Investment Decision, FID, would last approximately four to five years. In his view, the Executive Secretary of the NCDMB, Simbi Wabote, said the NLNG Train-7 would deliver 100 per cent engineering of all non-cryogenic areas in-country.

According to him, on fabrication, the Train-7 scope will bring many of the country’s fabrication yards roaring back into life with over 70,000 tonnes of in-country fabrication covering condensate stabilization units, tanks, pipe-racks, flare system, non-cryogenic vessels, and many other spools and fittings. The benefits, according to him, would extend to site civil works on roads, piling, and jetties, 100 per cent local procurement of all LV and HV cables, non-cryogenic valves, protective paints and coatings, sacrificial anodes and many other direct procurement from our local manufacturing plants.

“

Beyond the project, there is also a huge scope for local businesses to build capabilities in the maintenance of LNG plants especially in the area of cryogenics.” While the opportunities listed above are expected to buoy activities in the Nigerian petroleum industry, the country is expected to introduce measures that would enable it navigate a number of challenges, ranging from the renewed global shift towards renewable and nonfossil fuel commodities and attractive fiscals in neighbouring African states and far away Guyana with attractive fiscals which could lure investments away from the country.

He said

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the tota l in- countr y engineering man-hours is set at 55 per cent which exceeds the minimum level stipulated in the NOGICD Act in line with the country’s resolve to push beyond the boundary of limitations”.

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Engr. Simbi Wabote

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COVER STORY management would be required to grow the petroleum industry and make it possible for the industry to make meaningful contribution to the economy.

Marvin Dekil

Operators and the Nigerian petroleum industry would continue to be faced with inadequate finance and a growing state’s debt profile, which poses some level of uncertainty. It is compounded by the worrisome possibility that its creditors, like the Chinese with penchant of seizure of infrastructure/ assets, could take advantage of these shortcomings. The non-viability of the country’s downstream sector and the inadequate electricity infrastructure across the entire value chain continue to pose a

Timipre Sylva

Majorwaves Energy Report

challenge to the industry, while the widespread insecurity in the Chad basin and the delayed explorations could affect the country’s quest to grow its crude oil and gas reserves in a timely fashion, knowing crude is projected to become unpopular in a few decades. Some experts have decried the painfully slow pace of the Hydrocarbon Pollution Remediation Project (HYPREP) programme, warning it could degenerate to heightened tension in the region. This has the potential to hinder production and scuttle activities in the reg ion. Other challenges before the industr y include the delay in the passage of the variants of the Petroleum I ndu st r y Bi l l (PIB), decaying infrastructure, pipeline vandalism and crude oil theft. Going forward, PriceWaterhouse Coopers (PWC) in its review of the Niger ia n petroleum industry, titled, ‘Nigeria: Looking b e y o n d O i l ,’ disclosed that significant reforms across the labour market, business environment and fiscal

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According to the global consultancy firm, a skilled workforce is critical to improving Nigeria’s productivity and efficiency. It noted that because the services sector is projected to be the key driver of the Nigerian economy going forward, measures have to be implemented to improve the value-add of labour in this sector. Though the PETAN companies are pulling their weight behind training of their workforce, the industry is in dire need of increased numbers of entrepreneurs, with a spread across the entire value chain, offering more sophisticated services to actualise the local content aspirations. PWC explained that Nigeria needs to ensure sustainable fiscal management that is resilient to global oil price cycles, noting that improving tax collection and administration had become imperative for achieving national growth objectives. It said, “Nigeria is a low-taxed economy compared to its peers; besides, challenges with arbitrary exemptions and enforcement have further constrained tax receipts. The framework for tax exemptions should be reviewed and approvals targeted at growth-inducing sectors as the government improves collection. “Efficiency in government spending has to improve; there is room for substantial savings in capital outlays and operating expenditure across the three tiers of government. Also, the government needs to be deliberate about increasing fiscal savings through a higher accretion to the Sovereign Wealth Fund which has investment objectives of diversification and improving long term economic prospects.” Stakeholders are unanimous in their views that there is an urgent need for the implementation of the various developmental programmes in the Nigerian petroleum, while managing the threats. The speedy passage of the different parts of the PIB and the urgent reform of the downstream petroleum sector would attract investments, and lead to the growth and development of the petroleum industry and the economy in general.

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5th GECF SUMMIT and 2ND INTERNATIONAL GAS SEMINAR 26-29 November, 2019 Malabo, Equatorial Guinea

Book online and find out more at www.gecfmalabo.com Hosted by the Ministry of Mines and Hydrocarbons of Equatorial Guinea

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OCTOBER 2019, Vol 2 No 7 31

ENERGY WOMAN

From back left: Sam Chung (EVP Finance and Strategy Salesforce.com), Lina Khalifeh (Founder, SheFighter & Awardee), Stephanie Mehta (Editor-in-Chief, Fast Company), Karla Ruiz Cofiño (Founder, Digital Awareness & Awardee), Zoya Lytvyn (Founder, Novopecherska K12 Private School and Osvitoria (NGO) & Awardee), Dr. Amy Jadesimi (MD LADOL), Alyse Nelson (President & CEO Vital Voices), Cameron Fowler (President, North American Personal & Banking, BMO Financial Group) Front Left: Christelle Kwizera, ( Founder Water Access Rwanda & Awardee), Leah Lizarondo (Co-Founder & CEO, 412 Food Rescue & Awardee), Amanda Ellis (Founder WeEmpower,

LADOL is Supporting Female Entrepreneurs from Around the World through the We Empower Challenge at the UNGA

he Managing Director of LADOL Free Zone, Dr. Amy Jadesimi was one of the five industry leaders chosen to select the winner of the Global WeEmpower female Entrepreneurship challenge at the just concluded United Nations General Assembly week in New York. The WE Empower UN SDG Challenge is the first-of-its-kind global business competition for women entrepreneurs who are advancing the UN Sustainable Development Goals and inspiring entire communities to act to create the world we want by 2030. The WE Empower Challenge honours five women entrepreneurs, one from each of the five UN regions, who are advancing the SDGs through their business practices. The opportunity recognises their innovative work, provides capacity-building training sessions and high-level advocacy opportunities to the awardees, and ignites awareness about the valuable contribution women entrepreneurs can make toward the SDGs. The WE Empower Awardees convened in New York City during the week of the UN 32

Majorwaves Energy Report

General Assembly. The first major event was a dynamic pitch competition hosted by fashion designer, activist and Vital Voices Board Member Diane von Furstenberg, and judged by the - Dr. Amy Jadesimi (MD LADOL), Sam Chung (EVP Finance and Strategy Salesforce.com), Anu Duggal (Founding Partner, Female Founders Fund), Cameron Fowler (President, North American Personal & Banking, BMO Financial Group) and moderated by Stephanie Mehta (Editor-in-Chief, Fast Company).

opportunities. Sustainable businesses, such as these, will be the drivers of global prosperity. 80% of the 680 million new jobs the world needs will come from SMEs. We need to exponentially expand the work of organisations such as WeEmpower, so that millions of sustainable businesses and business leaders can be identified and supported across the world.”

The $20,000 grant was awarded to Leah Lizarondo, CEO and Co-Founder, 412 Food Rescue but all five of the awardees were highly commended. After judging the pitches Dr. Jadesimi commented: “WeEmpower is putting brilliant female entrepreneurs on a global stage. All 5 of the awardees were impressive – both in terms of the bankability of their business models and their passionate dedication to the SDGs. These are the business models of the future. The mainstream financial sector is largely oblivious to such opportunities, meaning they are also great undervalued investment OCTOBER 2019, Vol 2 No 7

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ENERGY WOMAN

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As part of LADOL’s ongoing development we will be developing infrastructure and facilities to support a range of sustainable entrepreneurs and SMEs – developing innovative customised solutions for the West African market.”

Christelle Kwizera, from Rwanda (founder of Water Access Rwanda, providing reliable and affordable access to piped safe water in rural and semi-urban communities in Rwanda using their flagship solution, INUMA Groundwater Solar Kiosks, while also professionally maintaining safe water microgrid systems.), Dr. Amy Jadesimi (MD LADOL)

Dr. Amy Jadesimi (MD LADOL), “Investing in female entrepreneurs with sustainable business plans is one of the most lucrative ways to help ensure achieve the SDGs” LADOL is building the world’s first Sustainable Industrial Special Economic Zone (SSEZ). LADOL is using the UN’s Sustainable Development Goals (SDGs) to build a unique circular ecosystem, servicing a range of industries. The Zone was developed out of a disused swamp and has been operational since 2006. Every year since then the infrastructure and facilities have grown and expanded. The Zone now provides a 24/7 efficient, safe and secure location from which local and international companies, in a range of sectors, can start operating immediately. In 2017 LADOL disrupted the local oil and gas market, halving the costs of local support, and creating thousands of local jobs. LADOL is now focused on attracting and servicing a range of non-oil and gas companies, in sectors ranging from technology to agriculture. The sectors identified will work together to create a circular economy within the Zone. West Africa is one of the largest under-served markets in the world with the fastest growing population. Industrial companies working in LADOL can service this market sustainably and profitably, while creating tens of thousands of jobs. As the local market grows there will be higher demand for locally produced products, a larger skilled workforce and cheaper domestic operating costs. LADOL is becoming a blueprint for the Sustainable Industrialisation of Africa, turning Africa’s demographic dividend into a global wealth creation. www.ladol.com

Judging Panel: Diane von Furstenberg, Dr. Amy Jadesimi (MD LADOL), Sam Chung (EVP Finance and Strategy Salesforce.com), Anu Duggal (Founding Partner, Female Founders Fund), Cameron Fowler (President, North American Personal & Banking, BMO Financial Group)

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OCTOBER 2019, Vol 2 No 7 33

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MARITIME

NCDMB Partners NIMASA, NIWA on New Marine Vessel Categorization Scheme

he Niger ia n C ontent Development and Monitoring Board (NCDMB) has partnered with the Nigerian Maritime Administration and Safety Agency (NIMASA) and the National Inland Waterways Authority (NIWA) in the introduction of a revised Marine Vessel Categorization Scheme, designed to increase indigenous participation, manning and ownership in marine operations of the oil and gas industry. The scheme was presented at a oneday stakeholders’ workshop held in Lagos recently and the key attributes is the reduction of the requirements for vessel categorization from 21 items to 14, taking out some unnecessary documentation and referencing existing processes with global standards. In his remarks, the Director, Monitoring and Evaluation, NCDMB, Mr. Akintunde Adelana said that the current scheme was adopted in 2013 for use on tenders involving marine vessels and it helped to increase the participation of Nigerian owned vessels from below five percent to 35 percent. According to him, “it increased the level of participation for Nigerians, instilled more confidence for investment by Nigerians, increased awareness of Nigerians in this area of operation. Ultimately, it led to an increase in in-country spend and this boosted Nigeria’s economy.” He explained www.majorwavesenergyreport.com

that following the adoption of the Board’s 10-year strategic roadmap, which is focused on ramping up Nigerian Content to 70 percent by 2027 and the Board’s vision to capture a wider interest of Nigerians, it became necessary to adopt an approach that will further increase the participation of Nigerian owners in the marine sector. He confirmed that the new scheme was shared with NIMASA and NIWA and they are in alignment. “We have considered inland waterways vessels in the categorization. This will help to build Community Contractors,” he added. Adelana also stated that the workshop was convened to enable stakeholders to understand what is expected of them and how the process will operate when the scheme is fully deployed during tenders for marine vessels. In his remarks, the DirectorGeneral of NIMASA, Dr. Peterside Dakuku represented by the Assistant Director, NIMASA, Barr. Victor Egejuru said the agency through a joint collaborative committee with NCDMB has built and sustained synergy for the development of local content in the maritime sector. He noted that section 105 of the Nigerian Oil and Gas Industry Content Development Act empowers the Board to implement Nigerian Content in the marine sector in collaboration with NIMASA.

“The interface with NCDMB has resulted in concerted, coordinated and trust-building multi-layered results of activities geared at improving indigenous vessel participation in the oil and gas sector,” he added. Also speaking, the Acting Managing Director of NIWA, Mr. Danladi Ibrahim represented by the Area Manager, NIWA Lagos, Engr. Sarat Braimah thanked the Board for the collaboration among the maritime and government agencies to resolve issues of interests for investors and stakeholders. She added that NIWA will incorporate relevant categorization requirements for inland waterway vessels into its planned electronic registration process to aid the work of the NCDMB. Presenting the revised Marine Vessel Categorization Scheme, the project’s consultant, Engr Emmanuel Ilori listed some of the recommendations to include that vessels should be categorized by area of operation and vessels that are restricted to Inland Waterways should have different requirements as the technical requirements are different from vessels capable of operating in the coastal/exclusive economic zone (EEZ). Various industry stakeholders made contributions during the workshop and officials of the NCDMB assured that their feedback would be taken into consideration before the implementation of the scheme.

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OCTOBER 2019, Vol 2 No 7 35

MARITIME

Dr Dakuku Peterside

Nigerian Government Must Solve Seafarers’ Global Certification Problem – ITF Boss

he seafaring profession in Nigeria has experienced big challenges, especially at the global level as Nigerian seafarers can’t operate competitively with other countries due to lack of global certification and failure to list her name on the white list of the International Maritime Organisation (IMO). In an exclusive chat with Vanguard Maritime Report, the Head of Maritime Operations, International Transportation Federation, ITF, John Kaneyas, lamented that despite the large population of seafarers in Nigeria, they cannot still compete globally with their global counterparts due to lack of certification with global recognition. “What this simply implies is that Nigeria is not on the white list that 36

Majorwaves Energy Report

is eligible to supply labour to other Flag State Countries. Also, their certification will not be recognized by countries like Liberia or Panama unlike countries such as India and the Philippines, whose seafarers are on the World white list that can freely go to these countries which Nigerians cannot do”. In proffering solution to the situation, the ITF boss urged the federal government to establish adequate training facilities in the maritime institutions in a way that it will attract foreign interests as well as involve key maritime stakeholders in the seafaring profession. “The government needs to put a structure, as well as training facilities in maritime institutions which should be in the form of a tripartite system involving

OCTOBER 2019, Vol 2 No 7

the employers, the maritime unions and the government. This will enable foreign interest and other flag states to recognise the certificate of anyone who graduated from the Nigerian institutions to become a seafarer.” Kaneyas, however, commended the efforts of the Nigerian Maritime Administration and Safety Agency, NIMASA, saying that despite the lack of employment opportunities for Nigerian seafarers, when compared to global salary structures they are quite paid well.

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Globally, Nigerians, according to their coastal cabotage trade, are comparatively paid quite well. Salary is not the issue here; it is how to attract employment, for Nigerians to go outside”. www.majorwavesenergyreport.com

www.majorwavesenergyreport.com

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INTERVIEW

J Ayuk is a leading a u th o r i t y i n th e A frican energy sector and a strong advocate for African en trepreneurship an d the indi genous energ y sector. A s E xecutive C hairman of the African Energy Chamber and CEO of Centurion L aw G roup, NJ strives through hi s work to en s ure tha t business, and especially oil an d ga s , impac ts A fri can societies in a positive way a n d d r i v e s l o c a l c o n te n t development. H e i s a g r a d u a te o f t h e Universi ty of Mar yland C ollege Park an d a Juri s Doctor from William Mitchell College of Law. NJ is the author of Big Barrels: African Oil & Gas and th e Q u e s t fo r P r o s p e r i ty and Billions at Play: T he Future of A frican E nergy a n d D oi n g D ea l s . In thi s in terview with Jerome Onoja, he bares his mind on a couple of interesting, and thematic areas touching the A frican energy space.

What’s your take on gender inclusion in the African oil and gas value chain? We don’t have enough women in executive roles in the African oil industry – that needs to change. In majority African oil firms, women in leadership is still under 2-3%. We have to create more opportunities for African women in the oil and gas industry to be empowered in a more meaningful, practical manner. We have to look at local content policies that prioritise womenowned suppliers and sub-contractors. Women have a great deal to offer, and good jobs for women contribute to a more stable, more economically vital Africa.

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We have to do more to ensure that women and men receive equal compensation”,

Majorwaves Energy Report

whether it’s wages, community programs, or property royalties, etc. Governments and private companies can help women through policies that create a more enabling environment for SMEs linked to the oil and gas industry in addition to creating and enforcing local content laws. Wha t’s yo ur posi tion on America’s investment in Africa’s oil and gas in this Trump era? Africa can benefit the global economy with the help of the United States which is the world’s top oil producer. We can also benefit from the companies working on the continent for investment collaborations and to build the infrastructure necessary for industrialization.

OCTOBER 2019, Vol 2 No 7

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Africa needs $700B investment to build roads, railroads, storage facilities, pipelines, d i st r i but ion net work s, engineering, wind and solar power, manufacturing jobs, education and manufacturing opportunities to make the most of its natural gas discoveries”. That’s where the U.S. needs to step in. The U.S. has always been an investor and a terrific partner in Africa, but with China’s growing involvement, now more than ever, American investment in African’s future ensures fair trade through cooperation and regulation. We’re looking to grow that from aid to investment in infrastructure. We need to focus on the people and businesses that can and need to do more and partner with the US to create cleaner, greener, cheaper energy sources, and jobs, www.majorwavesenergyreport.com

INTERVIEW which have the potential to put those dollars back into the global economy and address Africa’s power issues. I tackle this theme extensively on chapter 17 of the book. T h e A fC F TA i s e x p ec te d to promote free trade and interdependence. How do you think Africa’s petroleum industry can benefit from it? It is vital for African governments, indigenous companies, and continental consortia to band together, and we absolutely need African oil and gas traders, power producers, and industrialists to get on board. The AfCFTA will yield great for the oil industry. Forcing our energy producers to look within Africa can be the driving force needed to foster a vibrant intra-African energy trading. Strong economic ties can promote political alliances and create a strong internal market. That’s simply more realistic and more important for the economic health and future prosperity of our continent. A strong regional economy give the continent a competitive edge in the global economy. Power: huge numbers are off grid and lack this basic infrastructure. What’s the practical way out, beyond the rhetorics as regards energy sufficiency because, that’s a main component for social development and economic growth? Energy sufficiency continues to remain a massive challenge to African countries in spite of interventions from within and outside the continent. Why?

It is not simply a matter of how many resources are allocated to infrastructure development, but that it has something to do with the very nature of power utilities in Africa. Obviously, there are no one-size-fitsall solutions. I wish I could offer a formula for eliminating the different forms of violence plaguing African nations with petroleum resources. But on a general level, I’m convinced that solutions must combine multiple factors: better governance and law enforcement, greater accountability for oil and gas companies, outside the-box technological innovation, economic development—and above all, meaningful responses to the grievances that leave people feeling overlooked and hopeless. Giving people more control over a share of the massive revenues that oil and gas generate would go a long way in that regard. We must ensure that people realize significant benefits from the oil and gas industry, not just experience the downsides of production. Are you an advocate of regional content development, seeing some countries have developed indigenous capacities and capabilities which neighboring countries can easily leverage? What complexities do you associate with it? It is imperative in the oil industry for local content to be done right. A nation’s natural resources belong to the people, so the people should benefit from their development.

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All stakeholders need to recognize that local content regulations are based on the principle of long-term improvement”.

Regional content; no single country can do it all. Speaking of cross-border transactions and keeping resources on the continent, we should think about expanding our definition of local content to take other African countries into account. For every African state to work towards the goal of making sure that home-grown entrepreneurs play a role in oil and gas development, either directly or indirectly. When we have a need we can’t meet on our own, we should look close to home—to neighboring and nearby states—before we turn to foreign suppliers. A great example of this is Equatorial Guinea. EG has been talking to all African producers, listening to ideas of Nigeria and Ghana on structuring industry and doing local content, and then implementing them back home. As the world shifts to renewables, A f r i c a l a c k s th e n e e d e d infrastructure to follow suit immediately. Considering the clamour for sustainability and more responsible business models, what' s your forecast regarding investment in fossil fuel particularly in Africa by the investment community pre and post 2040, knowing Africans barely have the required funds?

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In 38 out of 48 sub-Saharan countries, the power sector is completely under state control”.

In most of the other 10, states have allowed some space for private sector participation, but that remains mostly limited. Most of them suffer from the same problems of inefficiencies and aging infrastructure. The problem is that most, if not all, of the states controlling these companies lack the capital to invest in improving and expanding their power networks.

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These are capital-intensive, long-term investments that tend to clash with the shortterm priorities of political leaders”. www.majorwavesenergyreport.com

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INTERVIEW There are a number of arguments to support a progressive, consistent, and strong transition into a greener energy matrix. It will certainly take time, but it is achievable.

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Kenya is a great model country we can learn from, on how it fast became a global leader in renewable energy. Now expecting to reach 80 percent electricity access by 2022 and an astonishing 100 percent renewable energy sufficiency by 2020”. For those countries where renewable energy resources are not as abundant or economical, a low-carbon economy can also be developed around less polluting and abundant resources, namely natural gas, which provides outstanding economic opportunities across the continent. Who are the game changers in Africa’s hydrocarbon industry, and what should we expect from them? Ongoing bidding rounds in key existing and new African hydrocarbons markets will tell if Africa further confirms its position as the world’s new exploration hotspot and manages to attract necessary investment in its oil and gas acreages and mega energy projects are set to transform the future of the continent’s industry. It’s exciting to see bullish historical moves from South Sudan, Senegal, Equatorial Guinea, Gabon, CongoBrazzaville, Nigeria and Angola.

Equatorial Guinea entered the

energy sector when large crude oil reserves were discovered in 1996 and is now becoming a gas hub for Africa as it inaugurated the first LNG storage and regasification plant to be built on the West African coast. It is now taking capitalising on its LNG, providing a great example of what the oil industry can achieve. Senegal is one of West Africa’s more politically and economically stable countries, with a functioning democracy. Its first flow of oil and gas is expected by 2021, prospectively has a fairly attractive production sharing contract-based fiscal regime. What’s the value for African countries participating in the Organization of the Petroleum Exporting Countries (OPEC), among others. How best can they benefit from it? Many people look at African nations and think they are too small or too fragile to have a role in OPEC. Yes, most of them don’t have the reserve size or wealth funds of the historic OPEC members. Having a place at the table is half the job. It will take time, but I believe that OPEC and Africa can work together to create a stronger, more stable oil and gas industry. It’s also important to understand that the fundamentals and dynamics are different between OPEC’s Middle East leaders and Africa. Country membership raises Africa’s voice on the global stage. There is great

significance in 7 African countries joining OPEC. Just to be in the game develops stronger bilateral relations with other hydrocarbons producing nations, and facilitates the flow of investments into the member countries during their implementation stages.

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OPEC as a factor of stability has been central to improving market conditions and investment sentiment across Africa’s hydrocarbons value”. Are there some salient highlights from your recent book you would want to pass across to our readers? The African oil and gas story is a story about all of Africa’s citizens – Energy (in particular oil and gas) impacts our entire livelihood. As Africa makes its comeback in the energy sector, its all our comeback, you don’t have to be an engineer to get involved. Billions At Play: The Future of African Energy and Doing Deals shows us how. It’s sent from the future to show us how to get there. This book is for anyone that wants to make meaningful changes across the continent. The Africa of tomorrow has to be solution driven. We need to engineer growth. I want more Africans to pay attention to the energy sector, you don’t have to be – this is a blue print for Africa. It’s Africa’s time. Thank you for the interviews questions.

As a keen observer of the African markets, what’s your forecast for countries like Nigeria, Senegal, Equatorial Guinea, Ghana and South Africa? What can they do differently to better their fortunes? Africa’s old and new hydrocarbons markets have an opportunity to further entrench the continent’s position as the world’s hottest oil and gas frontier. New exploration and production development projects from West to East Africa Nigeria has come out of its recession stronger and with a continuous push towards reforming its business environment and remains Africa’s biggest hydrocarbons market. Its ongoing reforms have strengthened its position as Africa’s prime oil & gas investment destination. 40

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ACROSS AFRICA

39 Solar Power Projects Receive Approval in Zimbabwe

he Zimbabwe Energy Regulatory Authority (Zera) has processed 39 solar power projects that can generate up 1 151,87MW, as the country moves towards renewable energy to contain shortages. The projects are expected to require an investment of over US$2,3 billion. In e-mailed responses, Zera acting chief executive officer Mr Eddington Mazambani told The Herald of the approved solar projects, six of which are already operational, while others are at various levels of consummation.

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The authority has so far received and processed a total of 39 solar energy projects, with six of them now functional, two (are) under construction and 31 (are) still to be developed,” said Mr Mazambani. Three of the projects are at concept or pre-feasibility stage, and can generate 111MW. Twenty-two of

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the solar projects are at feasibility and technical studies level and can generate 885,1 MW, while three projects with the capacity to generate 70MW are at feasibility or proof of bankability stage. Another three projects are at the funding stage and can generate up to 53,3MW when concluded, while two projects are at the construction stage. They can feed 25MW into the national grid when completed. The six operational solar projects are delivering 7,47MW into the grid, said Mr Mazambani; “The total investment for all solar energy projects is US$2 327 528 108.” The interest in investing in solar projects in Zimbabwe comes at a time when rolling power cuts have become the order of the day due to obsolete equipment at thermal power plants and low water levels in Kariba Dam. Cabinet has since approved the implementation of a large-scale programme to promote the importation, local production of solar equipment and the use of solar power as an alternative energy source.

In this regard, special incentives shall be provided through duty waivers on imported solar equipment, while it shall be mandatory for all new construction projects to be solar-powered. Several companies such as Matshela Energy, Harava Solar, and Centragrid (Private) Limited are working on huge solar projects to alleviate power shortages which have hit domestic and commercial users hard. Centragrid, which is based in Nyabira, about 40km from central Harare, has started feeding 2,5MW into the national grid. The 2,5MW can light up to 1 200 households. Harava Solar expects to commission its 20MW project in December this year. Energy and Power Development Minister Advocate Fortune Chasi has indicated that airports across the country will soon be powered by solar to reduce pressure on grid electricity. Source: Herald

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ACROSS AFRICA

German Oil Firm Wintershall DEA Looking to Withdraw from Libya Uganda’s President Confident of Resolving Tullow, Total Issues

resident Yoweri Museveni has said that he is in touch with the executives of oil companies and will meet them soon to discuss the current impasse in the sector. Museveni, who was speaking at the 5th Oil and Gas Summit at Serena Hotel in Kampala last month, said he was confident a way forward will be agreed at the upcoming meeting.

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I was supposed to meet them in New York but I had more important issues to do here. We shall resolve their issues,” Museveni told delegates. This is the first time Museveni is speaking about the companies since the collapse of a deal where Tullow Oil was expected to sell part of its interests in the Albertine graben to Total E&P and China National Offshore Oil Company-CNOOC. The deal fell apart after the two-year time for negotiations expired. The companies failed to agree with the

Majorwaves Energy Report

government on tax and how much money must be counted as recoverable costs. Tullow was expected to transfer 21 percent of its 33.3 per cent in Kingfisher Blocks to Total and CNOOC. Had the deal been completed, it would have paved way for the conclusion of the Final Investment Decision (FID). This would mean that projects like the oil pipeline and the refinery would kick-off. After the collapse of the deal, Total E&P suspended technical activities on the pipeline and laid off some staff. CNOOC too laid off some staff as technocrats from both companies and politicians went behind the scenes to push for the reopening of the talks to conclude the deal. At Serena, Museveni said he had “already squeezed oil companies quite reasonably” and no one is going to see the mistakes that countries started producing oil earlier made, being repeated here.

intershall DE A, a German oil company, has announced to the German press that it intends to withdraw from the oil value chain in Libya. A statement from Mario Mehren, CEO of Wintershall DEA and Hans-Ulrich Engel, a leader of BASF, the parent company (67%) of Wintershall, confirmed the information. The two leaders will meet in a few days, Ulrich Nussbaum, a high representative of the German Ministry of Economy to discuss the continuation or not of the company’s activities in the country. According to details provided by Hart Energy, BASF and Wintershall also request that Germany provide them with financial and judicial support under an agreement signed with the Libyan Petroleum Company (NOC). W i nt e r s h a l l i s c o n s i d e r i n g compensation because the project is likely to fail and both parties intend to take the case to a judge. Wintershall produces about 25,000 barrels a day of oil in the country.

Source: Agence Ecofi

Source: The Independent

OCTOBER 2019, Vol 2 No 7

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OCTOBER 2019, Vol 2 No 7 43

Nigerian Content Development and Monitoring Board (NCDMB)

Presents

A ONE-DAY WORKSHOP FOR WOMEN IN OIL AND GAS INDUSTRY

The workshop would provide a platform to discuss issues relating to access for women into the oil and gas sector, career advancement, challenges and prospects for entrepreneurship, as well as ascendency of women to top management cadre in the sector.

Guest of Honour

Minister of Finance, Budget and National Planning,

Mrs. Zainab Shamsuna Ahmed

Chief Host

Minister of State for Petroleum Resources

Chief Timipre Sylva

Keynote Speaker

Head of the Civil Service of the Federation

Dr Folasade Yemi-Esan

Goodwill Message

Managing Director, Nigeria Port Authority

Majorwaves Energy Report

Signed: Executive Secretary NCDMB, Engr. Simbi Kesiye Wabote, FNSE, FIPS OCTOBER 2019, Vol 2 No 7

Hadiza Bala-Usman

Media Partner

Majorwaves Energy Report October

Articles inside

Nigeria@59: Appraisals, Threats, Opportunities, in the Petroleum Industry

Award of NLNG Train 7 to SCD Will Deepen Local Participation, Reinforce Local Cable Supplies – Adubi, Miccom Cables

$17bn NLNG Train 7 Project ‘ll Create 40,000 Jobs

Climate Change: We Keep the Best Standards - PETAN

U.S. Chamber of Commerce Appoints Benedict Peters to Advisory Board of the U.S.- Africa Business Center

SPDC Deploys HD Aerial Cameras to Track Spills, Crude Theft … Seeks Stakeholders’ Collaboration

Kyari Expresses Confidence in Fossil Fuel Remaining Relevant Beyond 2040

OPEC GECF signs MoU to strengthen cooperation