Majorwaves Energy Report January 2021 Edition by majorwavesenergyreport

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OUTLOOK 2021: Oil & Gas Industry NCDMB, PETAN Sign Agreement on $30m Working Capital Scheme DPR Shoolists 161 Firms for Final Stage of Marginal Oilfield Bid Round Daewoo Receives Construction Award for Mozambique LNG Plant AKK Gas Pipeline to be Completed, Commissioned in June 2021 â&#x20AC;&#x201D; Oilserv

Joe-Ezigbo, Audrey Majorwaves Energy Report JANUARY 2021, Vol 4 No 1

ENERGY WOMAN

Majorwaves Energy Report JANUARY 2021, Vol 4 No 1

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MAJORWAVES ENERGY REPORT

LOCAL CONTENT

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SOCIAL INVESTMENT

INFRASTRUCTURE

Nigeria Risks Losing 38% Deepwater Oil Output by 2025 – Operators

OUTLOOK 2021: Oil & Gas Industry

NCDMB, PETAN Sign Agreement on $30m Working Capital Scheme DPR Shoolists 161 Firms for Final Stage of Marginal Oilfield Bid Round Daewoo Receives Construction Award for Mozambique LNG Plant AKK Gas Pipeline to be Completed, Commissioned in June 2021 — Oilserv

Nigeria Earns N340bn from LNG, Other Gas Exports in 9 Months

Joe-Ezigbo, Audrey ENERGY WOMAN

FG Plans to Boost Nigeria’s Domestic Gas Usage by Q1 2021 – NNPC GMD

Gas Operators Urge FG to Address Issues of Pricing Regime

OUTLOOK 2021: Oil and Gas Industry

“…to deepen the domestic Gas market in Nigeria, we must be looking beyond purely Natural Gas-” -Joe-Ezigbo

Service Companies Critical to the Growth of Oil and Gas Industry - Wabote

Analysis: Addressing the Issues of Poor Remittance in Nigeria’s Electricity Sector

Woodside Blocks FAR’s Sangomar Deal with ONGC

Will Covid-19 force sustainability to take a back seat within marketing and live experience?

Majorwaves Energy Report JANUARY 2021, Vol 4 No 1

Happy New Year In spite of the vaccines, worries about Covid-19 have not abated, particularly with the advent of the second wave. Even when the pandemic is controlled, economies are still going to deal with the adverse impact of deteriorated fiscal balances and the effect of muted business investment on labour and spending in 2021 Audrey Joe-Ezigbo, our Energy Woman for this edition spoke extensively on a number of issues regarding increased gas monetization across the country on the back of decarbonisation and industrialisation. As the outgoing President of Nigeria Gas Association (NGA), she also shares her scorecard. We bring you some reports on NCDMB’s activities including the agency’s pact with PETAN that saw the release of $30mn as working capital for the group, consisting over 120 indigenous companies. Other interesting stories include Nigeria’s ongoing marginal fields bid round, the proposed commissioning of Ajaokuta-Kaduna-Kano pipeline (AKK) and more on social investment and sustainability. Top stories from across Africa were not left out. Let us hear from you; and please stay safe!.

Jerome Onoja

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

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

Majorwaves Energy Report JANUARY 2021, Vol 4 No 1

INDUSTRY NEWS

Nigeria Risks Losing 38% Deepwater Oil Output by 2025 – Operators

he fiscal terms in the current Petroleum Industr y Bill may lead to a 38 per cent reduction in Nigeria’s deepwater oil production in 2025, an industry group comprising international and indigenous oil firms in the country has said. The operators also said the country could lose over 30 per cent of its deepwater production potential by 2030. “The current PIB 2020 does not improve the investment environment for new project FIDs (final investment decisions) to be taken,” the Oil Producers Trade Section said in a document seen by our correspondent. The nation’s oil and gas production structure is majorly split between Joint Ventures (onshore and in shallow waters) and Production Sharing Contracts in deepwater offshore. The operators said a competitive PIB could unlock Nigeria’s production

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potential, contributing to the country’s next wave of economic growth. “With the right fiscal framework, OPTS could invest an additional about $9bn in deepwater projects to grow oil and gas development in Nigeria with resultant benefits for the nation,” the group said. It said Nigerian projects sanctioned between 2015 and 2019 would bring $3bn of investment over their lifecycle and represented only about four per cent of all expected investments in Africa According to the operators, no major investment decision was taken in the Nigerian deepwater space between 2015 and 2019. They said, “Uncompetitive fiscal terms, increasing cost, unsettled deepwater disputes, and upcoming deepwater lease expiry increase risk for investors and prevent new investments. “Nigeria’s government take exceeds

that of other countries for prolific deepwater basins. Government take on Nigeria’s pre-final investment decision JV oil projects is among the highest in the world.” The group said although some industry issues had been resolved in the PIB, important drivers of investor confidence and Federal Government’s revenues were not addressed. While appreciating the progress made in addressing industry issues, it said there was a need to preserve the integrity of existing investments and encourage future growth. The operators said, “Deepwater provisions in the PIB do not provide a favourable environment for future investments and launching projects. “PIB does not provide clear assurances to investors with regards to the sanctity of existing contracts at conversion or on how and when NNPC liabilities will be settled.”

INDUSTRY NEWS

Dangote Refinery, a Potential Game Changer – Platts

They added, “An investor’s ability to realise return on capital under which the investment decision was made is essential to competing for additional capital. “Lack of contract sanctity compromises the integrity of investments and negatively impacts investor confidence and willingness to further invest and engage in longterm in Nigeria.” An oil and gas governance expert, Dr Dauda Garuba , told our correspondent that the PIBs of 2008, 2012 and 2016, the current PIB in the National Assembly came at a very critical and difficult time of global oil outlook. “Perhaps, the only difference is that there are many collaborative relations and commitments between the executive and the legislative arms of government to pass and sign it into law,” he said. He noted that so much had already been lost due to the failure to pass the PIB by three successive national legislative assemblies. Garuba said, “In view of the present challenges faced by global oil, especially COVID-19, what should be done to ensure that the PIB to be passed delivers investment is to explore inserting incentives that could give win-win for both government and companies. “Also, the bill should anticipate a future of higher price of crude. To that extent, NASS must explore the possibility of inserting trigger clauses for fiscal terms that will enable the government to review the law and maximise it at such times.” T h e PIB has sc ale d secon d reading in the Senate and House of Representatives, with passage expected to happen in the first quarter of 2021.

he Dangote refiner y in Nigeria will be a “potential game-changer” once it comes online, according to a report by Platts Analytics. The plant, which has a capacity to process 650,000 barrels of crude oil, has been described by Dangote Industries Limited as the largest single-train refinery in the world. The Director of EMEARC Consulting at Turner, Mason & Company, Jonathan Leitch, was quoted by S&P Global Platts that following the startup of the Dangote refinery, West Africa “which is a huge trading outlet for Europe will likely disappear.” More European refinery closures and conversions are expecting in 2021 after dominating the sector in 2020 when the COVID-19 pandemic led to plunging demand for most oil products, with very weak margins and new capacity weighing on the sector next year. For European refiners, COVID-19 only exacerbated struc tural weakness due to surplus gasoline production and competition from new capacity elsewhere in the world, according to Leitch. “[But] the redundancies that arise from closures are difficult to accept politically,” he said. However, prolonged poor margins

could speed up that process. European margins are expected to remain “very weak” in Q1, according to Platts Analytics. It added that despite potential improvement during the gasoline season, they will “likely remain well below average levels.” Meanwhile, new refineries are starting up. While Europe is unlikely to feel the impact of new plants in Asia which will mostly meet surging local demand, new export-oriented refineries in the Middle East will be ‘targeting’ Europe as an outlet, said Leitch. Two new refineries in the Middle East, Jazan and Al-Zour, are due to start up at the beginning of next year, while several upgrading projects are nearing completion. Platts Analytics expects that increasing Middle East refinery runs in 2021 will result in ‘increasing product exports to Africa and Europe’. Modernisation at Russian refineries, albeit continuing at a slower pace, will further boost Russia’s significant diesel exports to Europe and could also turn Russia into a gasoline exporter. Although Russia is not expected to pose significant challenges, Leitch said it ‘all adds together’.

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INDUSTRY NEWS

Nigeria Earns N340bn from LNG, Other Gas Exports in 9 Months

igeria earned N340.54 billion from the export of Liquefied Natural Gas, LNG and other gas products in the third quarter of 2020. According to data obtained from the National Bureau of Statistics’ Third Quarter 2020 Foreign Trade Statistics, this amount represented a decline of 23.6 per cent compared to N445.71 billion earned from the export of the same commodities in the third quarter of 2019. A breakdown of the data showed that the LNG export in the third quarter of 2020 stood at N277.62 billion, representing 9.28 per cent of Nigeria’s total export, while earnings from other petroleum gases stood at N55.89 billion, representing 1.87 per cent of Nigeria’s total export. In addition, export of liquefied propane fetched the country N7.03 billion, accounting for 0.24 per cent of Nigeria’s total exports in the quarter under review. In its analysis of general trade data in the period, the NBS said: “The value of Nigeria’s merchandise trade stood at N8.374 trillion in third quarter 2020. This represents an increase

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of 34.15 per cent in third quarter 2020 compared to second quarter 2020, but a decline of 8.85 per cent compared to third quarter 2019. “Total trade year to date amounted to N23.204 trillion. The import component was valued at N5.381 trillion, representing an increase of 33.77 per cent in third quarter 2020, against the level recorded in second quarter 2020 and 38.02 per cent compared to third quarter 2019. The value of imports in third quarter 2020 represented the highest level for any quarter since 2017. “The export component accounted for N2.993 trillion of the total trade in third quarter 2020, indicating an increase of 34.85 per cent compared to the value recorded in second quarter 2020, but a decrease of 43.41 per cent compared to third quarter 2019. “Aside from second quarter 2020, the value of exports in third quarter 2020 represented the lowest level of any quarter since 2017. Due to lower exports and higher imports compared to 2019, the trade balance recorded a deficit of N2.389 trillion during the third quarter. This also represents the widest merchandise

trade deficit since 2017. When compared to the deficit of N1.803 trillion recorded in second quarter, the third quarter deficit rose by 32.45 per cent.” However, the NBS noted that year to date value of imports (January to September 2020) stood at N13.908 trillion. It added that the increase in the value of imports in the third quarter 2020 could be attributed to the increases in the value of mineral fuels, which stood at N484.4 billion or 219 per cent of total imports, Machinery & transport equipment, N314.9billion or 20 per cent of total imports and chemicals and related products N261.0 billion or 34 per cent of total imports, against their respective values in Q2,2020. On the other hand, the report stated that the predominant export remained crude oil, which was valued at N2.425 trillion, representing 81.02 per cent of total exports while noncrude oil was valued at N568.2 billion, or 18.98 per cent of total export during the review period.

INDUSTRY EVENT

Sylva Advocates Lower Cost Solutions for Oil Market Players Survival The minister described the discoveries of COVID-19 vaccines in Russia, North America, China and various parts of the world as a game changer, recalling that the members and non-members of the Organisation of the Petroleum Exporting Countries (OPEC) had on May 20 met to decide the curtailment of oil production volume due to oversupply. The minister said the curtailment had saved the industry and expressed hope that the global economy would eventually recover. The industry, he said, is grappling with over-supply issues from the US shale and struggle for market shares among producers. Chief Timipre Sylva

inister of State for Petroleum Resources, Chief Timipre Sylva, has stated that the survival of players in the oil and gas industry would depend on their ability to adopt lower cost solutions. ThisDay reports that the minister, at the 2020 conference of the Nigeria Association of Energy Economists (NAEE) in Abuja, said the pandemic provided the opportunity for reducing costs as well as carbon emission that will transform the industry. He added that the future and survival of many players depend not only on cleaner energy but also on the ability to deploy lower-cost solutions and seek diversification from crude oil to cleaner energy. Sylva said the country was proposing a post COVID-19 era where the transformed national oil firm will be swift to respond to oil prices fall and carbon emission reduction.

Nigerian oil and gas industry in a post-COVID world is to transform our national oil company into a diversified energy holding company to enable us respond swiftly to the twin challenges of future crash in crude oil prices and de-carbonisation by moving rapidly to becoming an energy holding company with more divested interests. “Consequently, we have focused on our gas resources as a critical transition fuel to help battle global warming and function as a bridge between the dominant fossil fuel of today and the renewable energy of tomorrow,” he said. According to him, natural gas has the ability to meet the increasing global requirement for cleaner energy use and also facilitate economic growth through domestic use. He stated that gas will become an alternative to petrol and diesel to cushion the effects of deregulation on the people.

He, however, said the pandemic, which is now in its second phase, had continued to dampen the structure and dynamics of the energy industry. He stated that the impact will vary across the oil and gas industry segments, adding that while oil companies with low reserve will push to accelerate production, those with higher cost structures will struggle. The minister said due to low revenue, there would be debate on the prioritisation of oil reinvestment and social needs while some governments would take the chance for spurring support for energy transition and diversification. “The future survival of many players in the industry depends not only on focusing on renewable energy sources but also upon an ability to deliver lower-cost solutions. “Our vision is to diversify into more diverse interests. We are focusing on our gas natural resources to function as a bridge between fossil fuel and the energy of tomorrow,” he said.

“Our strategy to strengthen the

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INDUSTRY NEWS

Seplat Announces Crude Purchase Agreement with Waltersmith This new agreement benefits Seplat by selling its crude oil directly to Waltersmith for refining, thereby eliminating crude losses and downtime experienced along the evacuation and export route. The transaction would also boost the capacity of Waltersmith in providing its products particularly to the immediate region of our operations thereby supporting Seplat’s commitment to national energy security. Seplat maintains its guidance of 48,000 - 52,000 boepd for the 2020 financial year. L-R: Roger Brown, Chief Executive Officer, Seplat Petroleum Development Company Plc; and Chikezie Nwosu, Chief Executive Officer, Waltersmith Petroman Oil Limited, at the signing of a Crude Purchase Agreement between both companies in Lagos recently.

eplat Petroleum Development Company Plc, a leading N ige ria n in d e p e n d e nt energy company listed on both the Nigerian Stock Exchange and the London Stock Exchange, has announced a Crude Purchase Agreement (CPA) with Waltersmith Petroman Oil Limited (Waltersmith). According to a release by Seplat, the CPA is for the supply of between

2,000 and 4,000 bopd from existing working-interest production from the Ohaji South Field within OML53, for Waltersmith’s new 5,000 bopd modular refinery at Ibigwe Field, in Imo State. Previously, Seplat’s share of Ohaji South crude was primarily evacuated to the export Terminal via a thirdparty Crude Handling Agreement with Waltersmith.

Speaking on the agreement, the release quoted the Chief Executive Officer of Seplat, Roger Brown as saying: “We are delighted to sign this Crude Purchase Agreement with Waltersmith as it ensures that Nigerian crude will be refined locally by a Nigerian refiner. The agreement will eliminate losses we previously experienced on the export pipeline, meaning more revenue will be booked by Seplat for the same amount of oil produced from the field. Waltersmith’s refinery will also benefit the Nigerian economy by creating local jobs to refine our oil.”

LADOL Remains Best In Class, Overcoming 2020 Challenges and Renewing its ISO Certifications

agos Deep Offshore Logistic Base, LADOL has once proven to be one of the top performing and compliant companies in Nigeria, as the company overcame the 2020 challenges and renewed its International Organization Standardization, ISO 45001:2018, 14001:2015 and 9001 certifications. In 2018 L ADOL became the first company in West and North Africa to be 45001 and 14001 certified. The rapid adaptions, hard

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work, perseverance, and high compliance levels in were given glowing reviews when the company was recertified this year.These certifications reflect 20 years of continuous improvement and development by LADOL. The staff and management have long believed that embedding best practice and strong policies and procedures into the organisation’s DNA are is one of the key ingredients for its success.

INDUSTRY NEWS Continuous improvement in its Management Systems for Quality, Occupational Health and Safety and Environment Management enables the organization to meet and beat international best practices.ISO 9001 is a quality standard, ISO 45001:2018 is for Occupational Health and Safety, while 14001:2015 is for Environment Management Systems. The framework for L ADOL’s management system is very much driven by the United Nation’s 17 Sustainable Development Goals, which is reflected in all the goals, assessments, policies, and procedures of LADOL. The Managing Director of LADOL, Dr. Amy Jadesimi was part of the audit close out meeting along with several members of the staff

and management. Dr. Jadesimi’s closing statements included the following: “I couldn’t be prouder to have the privileged of leading the LADOL team. 2020 has been a tough year, but throughout our staff have shown dedication and an impressive work ethic. We have all worked unbelievably hard, but even as the struggle continues we remain strong and undeterred because we know we have the knowledge, ability, and tools to keep pushing through and exceeding local and global expectations. ”The audit process is not a tick the box exercise for us, it is an opportunity demonstrate and improve how we operate. Compliance to these global standards helped us build a rock solid foundation for LADOL. A foundation on which we continuously improve and build every day, every week, and

every year for the past two decades and for many more decades to come – a big thank you to all our staff and stakeholders. ”LADOL’s Integrated Management System, IMS and the Assistant Coordinator of the LADOL ISO 90 01:2015 project, Abiodun Ogunyemi Moses said: “This shows LADOL’s commitment to the safety and health of her workers and all stakeholders including protection of our environment. Despite the challenges of 2020, LADOL has shown great professionalism in all area, valuing life, and following best practices and international standards in carrying out her activities. This is also a proof to all our customers and intending customers that we are can be trusted to deliver value.”

PPPRA to Tighten Guidelines on Petrol Import Regulations, Roll Out Sanctions for Operators By Mordi Chukwunonso Esther

operators and marketers seeking to supply petroleum products in the country to obtain a commercial licence from it; be issued with a Quantity Notification, and furnish it with their quarterly supply at least two weeks before the quarter commences.

he Petroleum Products Pricing Regulatory Agency (PPPRA) has tightened the guidelines for the supply of petroleum products into the country, with the roll out of sanctions for marketers and operators that breach any segment

In addition, the PPPRA further made it compulsory for indigenous refining companies to furnish it with monthly data on their refinery production and evacuation; while marketers are expected to submit their daily truck out plans, to enable it develop accurate database for proper planning and decision making. of the new framework. In a report by Sweet crude reports, the PPPRA disclosed this in its new regulations titled, the ‘Petroleum Products Commercial Framework (PPCF) Regulations, 2020’ where it is making it mandatory for all

In the regulations, recently gazzetted, the PPPRA disclosed that it would from time to time, request information from oil marketer for the purpose of determination of indicative prices in the downstream sector while it would also monitor

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INDUSTRY NEWS prevailing market fundamentals and periodically advise on indicative prices in the downstream sector. It further stipulated that marketers are inform it of the sources of their products, submit vessel details and also pay administrative charges on all petroleum products, at least three after discharge of the products. The PPPRA stated that any oil trading and supply firm that supply petroleum products to the Nigerian market without obtaining its approval would incur a penalty of N1.5 million and would be required to register the company before commencement of further operations; while those that fail to disclose required documentation to it would incur a penalty of N500,000 and would be compelled to provide the required documents.

For oil trading/supply companies that submit forged vessel documents and other paperworks, the PPPRA said they would be suspended from operations for three months, in addition to the matter referred to the appropriate government agency for investigation and prosecution, while the defaulters would be required to pay a re-admission fee of N5 million to the agency. In addition, the PPPRA stated that any oil marketing company, including the Nigerian National Petroleum Company (NNPC) that fails to register or renew their registration with it, would incur a penalty of N500,000 and be compelled to obtain the necessary approval to discharge the cargo, ensuring that the registration processes is completed within one month.

including the NNPC, who import or supply products with the Quantity Notification (QN) would be suspended for a period of three months and would be made to pay a penalty of N1.5 million; while submission of forged vessel documents, among other documents would be suspended for three months, pay a re-admission fine of N5 million after the matter would have been reported to the appropriate government agency for investigation and prosecution. In addition, the PPPRA declared that any oil marketing company, including the NNPC that fails to pay the administrative charge, three days after being issued a demand note, would be restricted from evacuation/truck out of product until payment of the charge, in addition to a fine of N250,000.

Any oil marketing company,

DPR Shortlists 161 Firms for Final Stage of Marginal Oilfield Bid Round published timelines on DPR website and bid portal. “The current status is that 161 successful companies have been shortlisted to advance to the next and final stage of the process,” Osu said. He said the bid rounds began on June 1, adding that the DPR had put measures in place to ensure that the awardees would be credible investors with technical and financial capability.

he Department of Petroleum T Resources (DPR) says 161 successful companies have been

shortlisted to advance to the next and final stage of the bid round process for 57 marginal oilfields in the country. Richard Kennedy Replaces Jeff Ewing as Chev-

over 600 companies which applied for pre-qualification. Marginal field is any field that has reserves booked and reported annually to the DPR and has remained unproduced for a period of over 10 years.

Theron Head, Public Affairs, DPR, Paul Nigeria’s Chairman and Managing Director Osu, disclosed recently in Lagos that ”The 2020 marginal oilfield bid round the firms were selected from the process is still ongoing in line with our 12

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According to him, the objective of the 2020 marginal field bid round is to deepen the participation of indigenous companies in the upstream segment of the industry and provide opportunities for technical and financial partnerships for investors. Osu said Nigeria last conducted marginal field bid rounds in 2003, with 16 of the fields now contributing two per cent to the national oil and gas reserves, while bringing development to their host communities in the Niger Delta.

INDUSTRY NEWS

FG Plans to Boost Nigeria’s Domestic Gas Usage by Q1 2021 – NNPC GMD

Mele kyari

he federal government has intensified efforts to ensure that Nigeria achieves selfsufficiency in the domestic production and utilisation of its gas resources by the first quarter of 2021. The government noted that currently, Nigeria’s production capacity is insufficient to satisfy local demand, especially for major industries like the Dangote Cement factory, which requires huge gas supplies to sustain its operations. Speaking when he visited the Director General of the Voice of Nigeria ( VON), Mr Osita O ke ch uk w u , at th e m e dia organisation’s corporate head office in Abuja recently, the Group Managing Director (GMD), Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari, explained that Nigeria’s aggressive development of its gas resources will soon begin to bear fruits. In an interview with the organisation, released yesterday, the NNPC boss said contrary to issues raised by some stakeholders as to the actual deregulation of the downstream petroleum industry, the oil market

had been fully liberalised, meaning that the government has completely withdrawn the payment of subsidies. On steps being taken to boost the gas market, Kyari stated that some projects that are critical to the delivery of gas hitherto delayed are now being completed. He said: “We have several projects spanning 10 years. Many of them were hugely delayed for various reasons, sometimes for financial constraints that government faces over time, and also sometimes probably out of a sheer lack of will to deliver on those projects, and there are a number of them.

consumption point.” While giving assurances that by mid-February 2021 that there will be sufficient gas for domestic consumption with the completion of some gas infrastructure, Kyari noted that by then, the country will have enough stock waiting for buyers, rather than the opposite which is currently happening. He added: “More importantly, there’s what we call the OB-3 gas river crossing. That’s a pipeline that is supposed to cross the river Niger to join the OB-3 network and that also has been hanging for a long time.

“There’s a major trunk, Nigeria’s gas pipeline spanning all the way from the east, specifically from around Port Harcourt, all the way across the country into Abuja, all the way to Kano.

“We have also put the process by end of January or latest by middle of February, we would have achieved this. What that will mean is that gas will be waiting for customers and not the other way around.

“Then also you have another line that links the east to the west, through what we call the Escravos-Lagos pipeline segment, and then the OB – OB 3 pipeline. The connection of these three means that you can take gas from anywhere in the country, and also deliver to the key

“Today, customers are waiting for gas. There are a number of customers we are not able to satisfy today, including the major customer like the Dangote Cement factory in Kogi State,

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INDUSTRY NEWS and many other assets that we are not able to deliver full gas to because those infrastructures are not in place.” According to him, Nigeria’s oil and gas sector is now fully deregulated, adding that as far as institutions of government and markets are concerned, the sector is fully liberalised with little government interference. He stated that the little interference by the government in the gas market is to prevent ordinary Nigerians from being exploited by oil marketers. “Deregulation means government does not pay any subsidy on the cost of petroleum, or any other commodity. So this market is completely deregulated.

“It means that people can go to the market, buy the product, come into our markets, and sell or even buy from NNPC and sell to the market, and then recover the cost and then at a reasonable margin,” Kyari said. He stated that all the challenges in the sector in terms of deregulation were because the process was still in a transition, noting that there is no provision for subsidy in the 2020 Appropriation Act and in the approved 2021 budget. According to him, issues surrounding the inability of oil marketing companies to import petroleum products into the country, due to foreign exchange crisis, are being resolved with the Central Ban§k of Nigeria (CBN). “And once that (framework) is put

in place, of course, the NNPC’s monopoly of the importer of last resort will vanish and therefore the markets will react to it. “Why people are confusing it for lack of deregulation is that you always have a price cap in a market environment, otherwise the ordinary people will be exploited by marketing companies. It can even be the NNPC. “When you don’t put a cap around the market conditions, then you’ll seem to have allowed full-fledged exploitation of the ordinary people. “There’s no country in the world that does not have some form of a bracket, a basket within which the marketing companies can do business, and this is determined by the market,” he said.

OPEC+ Oil Output Compliance at 101% in November 2020 One of the sources said compliance from members in the Organization of the Petroleum Exporting Countries (OPEC) reached 104% while compliance was at 95% for their allies, including Russia, with overall compliance at 101%.

he OPEC+ group of oil producers fully complied with supply cuts in November, two sources from the alliance told Reuters ahead of the group’s Jan. 4 meeting to discuss whether to boost production further from February.

Russia last week said it was keen for OPEC+ to raise output by 500,000 barrels per day (bpd) from February despite concerns among some members that the move would be premature in the face of the latest surge in coronavirus infections. “Is the oil demand forecast for the

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first quarter of 2021 better than that forecast in early December? I don’t believe so, given the lockdown in many countries in Europe until the end of January,” one of the OPEC+ sources said. Several European countries including Britain, Germany and France have enforced movement restrictions to contain new infection waves. In early December OPEC+ agreed to ease its record cuts from 7.7 million bpd to 7.2 million bpd after backing down from earlier plans for a 2 million bpd output boost. Under the deal, further monthly adjustments will not exceed 500,000 bpd. “At the end of the day there is not much of a difference in the balance between increasing by 500,000 bpd in February or not. The big issue was not to increase by 2 million bpd in January,” the second source said.

INDUSTRY NEWS

Oil Recovery Hinged on Vaccination as OPEC+ Targets New Quota in 2021

he possibility of oil prices going beyond the $50 a barrel average price appears to be dim as a result of the mutating strains of the coronavirus that threaten economic and oil demand recovery with lockdowns and travel restrictions, 39 experts polled by Reuters has said. The analysts noted that until critical masses of economically active people get vaccinated, oil prices are likely to remain under pressure. For 2021, the Nigerian government is basing its benchmark at $40 per barrel, up from $30 from 2020, when the country had to revise the 2020 budget oil benchmark from $57 per barrel to $30. Its production output was also revised from approximately 2.1 million barrels to 1.7 million per day. According to the analysts, average expectations for Brent Crude prices for 2021 stand at $50.67 per barrel, up from a forecast of $49.35 a barrel in the November Reuters poll, but below the $51.15 price at which Brent Crude traded at 5:25 pm local time.

Also, the analysts raised their forecast for the average price of West Texas Intermediate (WTI), expecting the U.S. benchmark to average $47.45 a barrel in 2021, compared to $46.40 in the November poll. Early on Thursday, WTI Crude prices were down by 1.01 percent at $47.91. Besides, OPEC+ is scheduled to meet on January 4 to discuss how much the group will produce in February and beyond. The group is also set to meet monthly to determine the production quotas for the following month, after weighing market conditions. According to Reuters’ sources, OPEC’s compliance for November reached 104 per cent. Compliance for OPEC’s allies—a group that includes Russia—reached just 95 per cent compliance. Combined, the overall compliance rate for November for OPEC+ was therefore 101 per cent, almost exactly the same as the group’s compliance in October 2020. Another factor to watch in 2021 will be the OPEC+ oil production policy and whether the cartel and its Russialed allies will ease the cuts before demand can absorb the additional

supply. The new COVID-19 strain—first identified in the UK—and the soaring cases across the UK, other parts of Europe, and the United States are likely to cap oil price gains in the early months of 2021, while positive news on the vaccine front is set to put upward pressure on prices. The negotiations about how much oil to produce given the prospects for slackened oil demand have not been without difficulty. Russia has consistently been supportive of increasing oil production, while Saudi Arabia has been more cautious in its approach—or perhaps more aggressive with the production cut plans—as the oil-dependent nation remains the swing producer of the group. Tensions also arose between the UAE in the run-up to the previous meeting, and other OPEC members, too, have expressed a desire to ramp up production and end the painful quotas.

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INDUSTRY EVENT

Gas Operators Urge FG to Address Issues of Pricing Regime

igerian gas operators have said there is urgent need for the federal government to address issues bordering on a pricing regime that allows the market to determine the price of gas in line with the basic global market principle of willing buyer, willing seller model. They said that transitioning to a market-led gas pricing regime would unlock the abundant potentials in the sector through increased investment in the sector. According to TheGuardian, the gas players, at a recent virtual business forum organised by the Nigerian Gas Association (NGA), themed, “Consensus pricing for the Nigerian natural gas value chain”, said the time had come for the country to leverage its gas resources to address its developmental challenges including huge infrastructure deficit, poor electricity supply, unemployment and poverty. Arguing for a market-led pricing regime for the Nigerian gas value chain, the Oil Producers Trade Section (OPTS), an arm of the Lagos Chamber of Commerce and Industry (LCCI), stressed that a market-driven regime will encourage competition

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and attract investments into the country. It said in the meantime, gas pricing should be set at a price that is cost-reflective of the investments and in addition, provides decent returns to encourage investors and investments, adding that this will enable investments and encourage further developments of the Nigerian gas industry. The OPTS in its position paper presented at the session by its Chairman, Mike Sangster, recommended that the three –tier sectoral demand segments of power, gas-based industries and commercial be maintained and that domestic gas framework should not be linked to export parity pricing. Sangster who was represented by the Chairman of OPTS Gas Subcommittee, Okechukwu Mba, said: “Domestic gas demand obligation in the DGSO (Domestic Gas Supply Obligations) arrangement should also be capped at the current multi- year levels and discontinued after 2022, which is the end of the current multi-year allocations. This will represent a major transition milestone to liberalise gas market in Nigeria after marking 15 years

of domestic gas supply obligations. “Nigeria should also draw lessons from other countries and make it competitive to attract the muchneeded investments into the gas sector and stimulate the growth of our GDP. This is even more critical in low commodity pricing environment and in a situation of reduced capital flow to the economy. “In general, a successful and timely development of Nigeria’s vast gas resources including its deepwater resources, will require the industry and authorities working together as close partners to achieve these common objectives”. He said the OPTS believed that accelerating gas development in Nigeria was key to boosting the country’s economy, advising that Nigeria needs to strike a balance between viewing gas as a source of revenue and more importantly, as a catalyst for economic growth. He also said that the Petroleum Industry Bill (PIB) currently in consideration at the National Assembly poses a unique opportunity to make a change towards the transition to a gas-based

INDUSTRY EVENT economy by enabling commercial terms that will pave the way for market-based pricing in the near future. “In this regard, it is expedient that the federal government continues its leadership role to align a broad group of government ministries and industry stakeholders,” Sangster added. Speaking at the session, the President of NGA and Deputy Managing Director of Falcon Corporations, Mrs. Audrey Joe-Ezigbo, said there was need to get it right in terms of gas pricing, stressing that that would enable gas development in the country. “N ow, talking ab o ut p ricing methodologies, I think that one thing that we agreed on is the fact that we have to get it right in terms of pricing, to be able to enable gas development in the country; because of the fact that gas is an enabler of various sectors, and I spoke to that in my opening remarks.

“So, when you think about Nigeria over the last 10 to 15 years, from the Gas Master Plan even today, we have to ask ourselves why we have not seen the kind of supply side projects; the kind of midstream projects that would have enabled a broader gas supply in the country; and that would have taken care of a lot of the pricing conversations we are having today.

demand for transition to a market-led gas pricing regime, said the country was not yet prepared to go that way now.

“Now, we have to be able to do things very differently. So whatever pricing framework we come up with has to take this into cognisance. If we look at Egypt for instance, and Egypt is a good example because they have gone through the same journey of regulated pricing and so had that grossly constrained investments and they had to do a quick turnaround.

Although, Usman said that the issue of infrastructure was almost solved, considering the progress recorded so far in gas infrastructure development, he said that power remained an issue that is yet to be solved, adding that it is only when the issue is addressed that Nigeria can proceed towards a willing buyer, willing seller gas price environment.

“So you have a situation where in a very short time line, within this same period that Nigeria was doing Gas Master Planning and all that, we saw Egypt go through over 80 E&P agreements.

“For the transition period, there are many things to look at in determining how many years it will take to get the market into the willing buyer, willing seller basis. We look at infrastructure. Do we have a robust infrastructure to go into willing buyer, willing seller basis? I can confirm to you today that we have made progress in infrastructure.

“Now, when you look at Nigeria in terms of production and in terms of actual utilisation of gas, the Nigerian gas market is the least developed amongst peer nations and this is something one has to keep bringing to the fore,” she said.

She further said: “In this time, we saw Egypt get the Gas and Offshore Gas Development Projects of over 30 trillion cubic feet in offshore – about 1,500 meters of water; and in less than three years, they had delivered these projects.

She pointed out that many countries and regions were literally moving away from the realm of regulated pricing into a market-led pricing, saying across Europe and North America, the gas markets were fully market-led, while there was an increasing push towards a deregulated market-led regime in the Asia countries of China, India, Malaysia and the rest.

“In this time, Nigeria has not been able to do the same thing. We don’t have the infrastructure, no doubt, and yes, the liquidity issues and all that have continued to impact on the sector. Yes, there is always the tension about what is the appropriate level of recovery and incentivisation for the sellers or investors on one side, which will still ensure affordability for the buyer on the other side.

Joe-ezigbo said: “Of course, in Nigeria, we haven’t really seen that. And when you consider the fact that there is such a clear correlation between the pricing framework in use within your country, the depth and the vastness of the domestic gas market and of course, the economic development like a-one dollar to three-dollar correlation of the GDP side, it explains to some degree why we are where we are, and we have to be able to rethink that. “It’s good to look at models and then try to contextualise them within your own peculiarities; and I think that is critical and I know that’s the kind of work that is being done.

But the economics have to be right for the investors and then, if we have more investors, we are able to net off this issue of costing overtime.” She opined that the appropriate pricing framework for the gas value chain should be the one that ensures availability, cost recovery, and the one that ensures return on investment will be commensurate to the risks taken by an investor. However, citing some encumbrances, the Nigerian National Petroleum Corporation (NNPC) while recognizing the concerns of the operators and their

The Chief Operating Officer, Gas and Power, NNPC, Yusuf Usman, explained that the issues of infrastructure and power needed to be addressed before Nigeria could transition to a free market price regime for the gas sector.

“So, the key infrastructure is actually at the line of sight and therefore, it may not be a consideration for determining how long it will take us to the willing buyer, willing seller basis. “But there are other challenges. If you look at our projection based on demand for gas, power continues to play a significant role in determining marketbased pricing model for gas. “Therefore, the key consideration is, how long will it take us to resolve the issues in the power value chain? Once we are able to do that, then I think we are in the mode that we can go into a willing buyer, willing seller basis”. On achieving consensus pricing for the Nigerian gas value chain, Usman said that doing that would require having an alignment of all the players in the gas value chain, from the gas suppliers, transporters, the distribution businesses, off-takers, and alignment with the stakeholders including government and the Nigerian people.

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INDUSTRY EVENT

DPR: Nigerians Now Taking Centre-Stage in Downstream Sector resilience. “These areas are: legal, institutional, financial, in-sector diversification and indigenous capacity. “And I dare say that, under the focused leadership of President Muhammadu Buhari and the Minister of State, Petroleum Resources, Chief Timipre Sylva, the key fundamentals for industry growth is being emplaced. On the legal front, for instance, Anwalu said government had transmitted the long-awaited Petroleum Industry Bill (PIB) to the National Assembly for necessary parliamentary attention.

Sarki Auwalu

he Director, Department of Petroleum Resources (DPR), Sarki Auwalu, has said Nigerian indigenous oil companies are now taking the centre stage, in expanding domestic refining, domgas supply and gas-based industrialisation, which is a gradual departure from the export-centric companies. Auwalu made the assertion at the Nigeria Oil and Gas (NOG) virtual conference, in a statement issued, by Head Public Affairs, DPR, Paul Osu, in Lagos. He also emphasised the need to build credible and competent indigenous capacity in the industry that would compete favourably with international counterparts. The DPR director said deliberate policies that promote indigenous capacity should be continued for overall economic stability. “ Part of government efforts in this regard is the ongoing marginal field bid round which is aimed at deepening indigenous participation in Exploration and Production,” the DPR director

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said. According to him, it is expected that with the imminent conclusion of the award process, the share of indigenous companies in reserves and production will improve as the fields are developed. Speaking on other developments in the industry, Auwalu noted that Nigeria’s oil and gas industry needed fortification in five key areas to support national economic stability, robustness and resilience. He said the theme of the conference, ‘Fortifying the Nigerian Oil and Gas Industry for Economic Stability and Growth’ was apt because of the sector’s importance to the nation’s economy. He said, “The need to fortify (or strengthen) the Nigeria oil and gas sector is both compelling and imperative. “ For us at the DPR, we contemplate five broad areas in which the industry needs fortification to support national economic stability, robustness and

According to him, when passed, the law will enhance clarity in legislative, regulatory, fiscal and administrative framework. He said it was expected that the evolving commercial institutions would be strengthened for efficiency, prudent management and financial stewardship. Auwalu said: “By the same token, the regulatory institution should be structured to streamline roles, prevent duplication and promote consolidation which will engender regulatory clarity and ease of doing business. “Further, the overall Industry financial position must necessarily improve for sustainability.” In addition to sustaining oil and gas production levels, the DPR director projected that tens of billions of dollar of additional investments are required for developments in deep offshore, inland and frontier basins, as well as for gas infrastructure and gas-based industrial development. He said efforts of government had resulted in the recent closure of landmark deals and major capital projects such as the NLNG Train 7 and the Ajaokuta- Kaduna- Kano (AKK) pipeline.

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LOCAL CONTENT

NCDMB Management Visits GSM Centre

enior managem ent of th e Nigerian Content Development and Monitoring Board (NCDMB) recently visited the NCDMB Skills Acquisition Centre, Kano, venue of the training of 1000 youths on GSM repair, maintenance and software development. The team also visited NCDMB GSM Repair & Maintenance Centre, located at GSM Phone Tech Hub, Yankaba, Kano, where the Board has rented shops for the beneficiaries of the training programme. The Board’s team was led by the Director of Legal Services, Barr. Mohammed Babangida Umar and the Project Lead & General Manager, Research, Statistics and Development, Mr. Abdulmalik Halilu. S ome other staf f members included Chief Officer, Corporate

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Communications, Mr. Obinna Ezeobi and Mr. Nyoki Ita of the Corporate Communications Department. The visit is a prelude to the formal graduation of the trainees scheduled for Monday, 21st Dec 2020. The NCDMB Skills Acquisition and Training Programme was started in August 2019 and the success of the scheme has led it being replicated in Yobe State and two other locations. Among the 1000 youths that participated in the programme in Kano, 80 0 were groomed on hardware repairs while 200 specialised on software aspects of the training, which focussed on various brands of phones. They also learnt entrepreneurship skills and underwent practical sessions and applications

development. The classroom par t of the programme was designed for 8 weeks; the apprenticeship stage, 8 weeks while the mentoring stage was planned for another 8 weeks. The Project Lead, Mr. Abdulmalik Halilu explained that the programme was conceived with an end – to – end model. As part of the strategy, NCDMB paid the stipends to the trainees for the duration of the programme and secured shops for them at the GSM Repairs Market for two years. The Board also provided the trainees with starter packs and registered them into cooperative societies. The platform will enable them to access further institutional and financial assistance from the state government and other groups.

LOCAL CONTENT

NCDMB, PETAN Sign Agreement on $30m Working Capital Scheme

Engr. Simbi Wabote

h e Nigerian Content Development and Monitoring Board (NCDMB) and the Petroleum Technology Association of Nigeria (PETAN) recently signed an agreement on US$30m Working Capital Scheme that will support the operations of oil companies against the adverse effects of COVID-19 Pandemic and loss of contracts due to low oil price. The Executive Secretary of NCDMB, Engr. Simbi Kesiye Wabote and the Chairman of PETAN, Mr. Nicolas Odinuwe signed the Memorandum of Understanding (MoU) on the credit scheme in Abuja. The Working Capital Scheme is one of the newly introduced products in the Nigerian Content Intervention Fund (NCI Fund) approved by the NCDMB Governing Council under the leadership of the Minister of State for Petroleum Resources,

Chief Timipre Sylva. Key features of the credit scheme are single obligor limit of One Million US Dollars ($1000,000.00), tenor of 365 days after 90 days moratorium and eight percent interest per annum for Naira and five percent for United States Dollars. In his remarks at the event, the Executive Secretary explained that the fund which is currently domiciled with the Bank of Industry will bridge the oil companies’ cash flow gaps, support operations and prevent staff layoffs in the industry. He said the Scheme will be triggered whenever the oil price of $40/barrel benchmark is reached and whenever there are such negative impact on the industry. The $40/barrel trigger point strategy is important considering the rapidly changing nature of the oil and gas industry, he said.

Providing details on the eligibility of beneficiaries, Wabote stated that loans granted under the Scheme will enable the beneficiaries to manage operating expenses related portfolio of oil and gas operations, bridge payment delays and restock inventory. The Funds will also be applied in acquiring and maintaining assets, expansion or renovation related to ongoing projects for which working capital is being sought and refinancing of loans. To further guarantee the security of funds, the Executive Secretary indicated that “Insurance Guarantee covering 120 percent of the loan has to be issued to NCDMB by the intending beneficiary. The Board will also demand a Letter of Sponsorship and Guarantee by PETAN and Irrevocable Standing Payment order issued by Beneficiary Bank.”

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LOCAL CONTENT He also confirmed that application to the fund will be processed within seven days and approved within seven days and repayment will be in three instalments, effective six months, after 90 days moratorium.

Service Companies Critical to the Growth of Oil and Gas Industry Wabote

According to him, “the Scheme will be directly managed by the Board using credible consultants in order to simplify and expedite its implementation.” He also clarified that “the MOU has a validity period of three years from effective date and renewable thereafter at the instance of the Board when the Brent crude price falls below $40 benchmark or whenever there are such negative impact on the industry caused by unforeseeable circumstances beyond control.” Providing basis for the new funding scheme, the Executive Secretary noted that “NCDMB is an Agency established to increase indigenous participation in the oil and gas industry; build local capacity and competencies; create linkages to other sectors of the national economy, and boost industry contributions to the growth of Nigeria’s National Gross Domestic Product.” He added that Section 104 of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act established the Nigerian Content Development Fund (NCDF) drawn from one percent of all contracts awarded in the upstream sector of the Nigerian oil and gas industry which is managed and employed by NCDMB for projects, programs and activities directed at increasing Nigerian Content in the oil and gas industry. He recalled the drastic drop in the price of crude oil largely due to the battle for market share between Saudi Arabia and Russia and further worsened with the serious impact of the COVID-19 outbreak. He added that the global oil and gas industry witnessed serious downturn in business fortune and Nigeria operators were equally affected. This was the basis for the NCDMB and PETAN to develop a Business Continuity initiative under the NCDMB Local Content Intervention for Target (LIFT) Sectors.

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Engr. Simbi Wabote

he Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Engr. Simbi Wabote has lauded the roles played by service companies in the provision of goods and services for the sustenance and growth of the Nigerian Oil and Gas industry. Engr. Wabote stated this recently in Apapa, Lagos at the commissioning of a Control Valves Assembly and Service Centre built by BEAMCO Nigeria Limited. The Executive Secretar y commended the company for its contribution to the growth of the Nigerian Oil and Gas industry by demonstrating resilience to the Nigerian enterprise. He further stated that BEAMCO has built its reputation on professionalism and quality service delivery in different sectors of the Nigerian economy without compromising safety and

quality standards and has continued to provide reliable and effective solutions to its ever-increasing clientele base. Engr. Wabote acknowledged that the Valve Service Centre has the capacity to assemble and test Control Valves, Ball Valves, Safety Relief Valves, and others with ISO 9001 and ISO 45001 certifications to ensure strict compliance with Quality and Safety standards. “The ability of the Center to serve other sectors must be emphasized as we are keen to see that the capacities and capabilities being developed in the oil and gas sector are also linked to other sectors of the economy as part of the strategic initiatives under the Board’s 10-year Strategic Roadmap”, Engr. Wabote said. He further said that it is essential for all Nigerian oil and gas service

LOCAL CONTENT industries to widen the application of their services to other sectors of the economy and not solely rely on the oil and gas industry.

NOGTECH Innovators to get Sustained Support, Partnership - NCDMB

The Nigerian Content Chieftain reiterated that the Board is elated, whenever service companies push their boundaries; which is why it is driving the Project100 initiative to grow one hundred indigenous service companies into top-notch service providers. He also commended the international oil companies for their support in the successful implementation of Nigerian Content while charging them alongside other oil and gas service providers to remain resolute with a continuous faith in the ability of local companies to deliver. He challenged other oil and gas service providers to emulate BEAMCO in their focus, dedication and continuous evolution. In his opening remarks, the Managing Director, BEAMCO Nigeria Limited, Mr. Walid El Cheikh assured the Executive Secretary that the company will make modest contribution in line with the Board’s Mission, to promote the development and utilization of incountry capacities. Mr. Walid observed that they could not have succeeded without the endless effort made by every member of the company and more importantly, with the firm belief that the project shall be acknowledged and championed by NCDMB to be embraced by the stakeholders in the oil and gas industry. The Managing Director indicated that BEAMCO Nigeria Limited incorporated in 1980, prides itself in the provision of Industrial Equipment, Field Services, Construction, Trading and Supply Chain Management, and the provision of facilities support for the oil and gas industry. Highpoint of the commissioning was an award presented by BEAMCO to the Executive Secretar y, NCDMB; Engr. Simbi Wabote for his unparalleled contribution to Local Content Development in Nigeria.

he five winning innovators in th e Nigerian Oil and Gas Technolog y (NOGTECH) Hackathon will get sustained institutional and financial support from the Nigerian Content Development and Monitoring Board (NCDMB) and other industry stakeholders to enable them to become successful businesses. The Executive Secretary NCDMB, Engr. Simbi Kesiye Wabote announced this at the demo day held recently in Lagos, where the five startups showcased their homegrown innovative solutions tailored to solve local problems in the oil and gas industry and related sectors. The startups – AirSynQ, Fuel Intellisense, Gricd Mote, Homefort Energy and Kiakia Gas had earlier received US$10,000 grant each from NCDMB and have just completed their three-month

incubation programme, where they had resources and mentors that helped them identify their pilot clients and markets. The NOGTECH Hackathon was launched in July 2020 under the sponsorship of NCDMB and 630 promising startups applied, with 15 finalists selected at the end of the screening phase. The 15 groups took part in the three-day Hackathon stage held in September 2020, where the top five teams were selected. The Executive Secretary confirmed that the Board will continue to support the five startups using the Nigerian Content Research & Development Council, that draws membership from relevant organisations and the US$50m Nigerian Content Research and Development Fund. He reiterated that NCDMB deploys an end to end strategy in its projects and will not relent until the innovations are fully

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LOCAL CONTENT deployed and begin to solve societal problems. He noted that some of the solutions extend beyond the oil and gas sector and they will impact the health sector, community surveillance and the military in their fight against insurgence. “These are innovative solutions to everyday problems that we face in the country; it is beyond the oil and gas industry.” On the connection between NOGTECH Hackathon and NCDMB’s mandate, Wabote explained that the initiative promotes research and development and capacity building, and they constitute key pillars of NCDMB’s mandate and its 10-year s trategic roa dmap. H e added that the 10 teams that made it to the NOGTECH screening stage would also be accommodated at the Board’s incubation centre located at the Board’s headquarters in Yenagoa, Bayelsa State. “We just signed our incubation policy and it will enable us to incubate these innovators until they commercialize their products. Youths of Nigerians are innovative and creative. They are looking for a platform they can get and NCDMB will be that platform.” One of the innovationsAirsynQ seeks to tackle p ip elin e va n da lism by providing real-time aerial intelligence, surveillance and reconnaissance information. It uses balloon satellite to provide long duration aerial surveillance for up to go days. It uses Artificial lntelligence software that automates surveillance data assessment and reporting to pave a path for real-time predictive and preventive approach

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to security. The technology promises to help Nigeria save estimated loss of over $9bn to oil and gas theft every year, despite spending about $1.2bn for staff and asset protection yearly.

the technology are that it will reduce samples loss because clients can take pro-active decisions, ensure potency of samples collected and improve customer trust.

The company is seeking funding to help it accelerate adoption of the technology in Nigeria’s oil and gas sector and defense departments as well as facilitate better Research and Development for the product.

The company is seeking support from the Department of Petroleum Resources (DPR), to mandate the use of real time loggers to track environmental samples collected from local operating companies in the downstream.

Fuel Intellisense automates vehicle identification and fuel management systems. It leverages on technology to enable security, access and control of private and commercial filling stations/ fuel stores whilst monitoring delivery and outputs. The technology seeks to eliminate error prone manual entries and unauthorized fuel usage. It also eliminates misallocations, fuel theft and improves accountability thro ugh ef fe c tive f uel management systems. Some of the services of Fuel IntelliSense include Real-time transaction tracking at fuel terminals, Communication with underground tanks to determine the fuel level remotely and Employee efficiency tracking. Gricd Mote improves realtime storage conditions of temperature-sensitive medications, both stationary and transient. The internet of things (IoT) solution provides real time information on storage conditions and location of perishables. It will enable businesses to take proactive measures to curb losses, prove settlement claims and share existing asset to achieve expansion. Other advantages of deploying

HomeFort makes cooking gas available to low-income households on a pay-as-yougo model. The technology is geared to address the inability of low-income families to switch to clean cooking gas because of the high upfront cost of cylinder and high gas refill costs. The switch to clean energy will save an estimated 93,000 Nigerians that die annually from dirty fuels. Families can get the gas filled cylinder with just N400 down payment and buy LPG for as low as N100 using specified codes from the phones. They can pay for gas unit as low as N150 per time via their low-end mobile phone. Gas access is cut-off when unit is exhausted, until new unit is purchased. The team requires referrals to major LPG marketing companies for possible collaboration and plan to deploy to 1,000 households before end of quarter one 2021. KiaKia Gas is a technology that lets customers know when their gas is about to finish and order for LPG refill through an application. It also alerts customers on the safety status of their cylinders.

POWER

Analysis: Addressing the Issues of Poor Remittance in Nigeria’s Electricity Sector By Ikenna Omeje

igeria’s power sector is being confronted by numerous challenges. The key ones among these challenges are: Poor funding and low remittance by both the country’s international customers and the 11 electricity Distribution Companies (DisCos) operating in the country. T h e A g e n c e Fr a n ç a i s e d e Dévelopement (AFD) or French Agency for Development (AFD), which f un ds , supp or t s an d accelerates the transitions to a fairer and more sustainable world in France’s overseas departments, in its 2019 report on the issues confronting the Nigeria’s power sector, stated, “The industry loss is growing at a rate of at least N474bn per year or N1.3bn per day, but not even including the financial costs of this chaos. Consequently, this liquidity crisis has put the system on the verge of collapsing, which is not able to increase its generation capacity, remove its infrastructure cons traint s at transmission and distribution networks and aggressively reduce its ATC&C

(Average Technical Commercial and Collection) losses.

It stated that the invoice issued to the two international customers amounted to N29.50million and N2.07billion respectively.

“In general, the existing power generation assets are inefficient. More than 50 per cent of the generation capacity is not available, either for technical reasons/planned maintenance or due to unavailability of gas or other unplanned outage reasons.”

“During the quarter under review, the special and international class of customers made no payment to NBET and Market Operators. The invoice issued to Ajaokuta Steel Co. Ltd (designated as a special customer) and international customers (i.e., Societe Nigerienne d’electricite – NIGELEC and Communaute Electrique du Benin–CEB) stood at N29.50million and N2.07billion respectively.

“

According to the Nigerian Electricity Regulatory Commission (NERC), the Federal Government received zero payment from its international electricity customers (Societe Nigerienne d’electricite – NIGELEC and Communaute Electrique du Benin–CEB) in the last three months of 2019.

“

“The Federal Government has continued to engage the governments of neighbouring countries benefitting from the export supply to ensure timely payments for the electricity purchased from Nigeria,” NERC said.

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POWER The regulatory body also stated that out of a total invoice of N193 billion issued to the 11 DisCos, only a sum of N74.20 billion was remitted, representing 3 8 . 32 percent remittance performance. Noting that as much as N3.06 out of every N10 worth of energy sold during the period under review, was not collected from consumers as and when due. “The average total remittance performance to the market for all DisCos rose to 38.32% and ranges from 19.57 percent (JosDisCo) to 51.50 percent (EkoDisCo). “The level of collection efficiency during the quarter under review indicates that as much as ₦3.06 out of every ₦10 worth of energy sold during the fourth quarter of 2019 remained uncollected from consumers as and when due. NERC stated that “During the fourth quarter of 2019, a total invoice of N193.66billion was issued to the eleven (11) DisCos for energy received from Nigerian Bulk Electricity Trading (NBET) and for service charge by Market Operator (MO), but only a sum of N74.20billion of the total invoice was settled, representing 38.32 percent remittance performance. This represents 0.44 percentage point increase from the final settlement rate recorded for the third quarter of 2019 following the commencement of enforcement action by the Commission. It informed that the financial viability of Nigerian Electricity Supply Industry (NESI) is being threatened by non-implementation of costreflective tariffs, high technical and commercial losses, as well as energy theft. “The financial viability of NESI is still a major challenge threatening its sustainability. As highlighted in the preceding quarterly reports, the liquidity challenge is partly due to the non-implementation of costreflective tariffs, high technical and commercial losses exacerbated by energy theft and consumers’ apathy to payments under the widely

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prevailing practice of estimated billing. The severity of the liquidity challenge in NESI was reflected in the settlement rates of the energy invoices issued by NBET to each of the DisCos as highlighted above, as well as the non-payment by the special and international customers.” NERC decried. Similarly, NERC stated that

“

out of $13.22 million service charges and energy invoices issued to Benin Republic, Niger and Togo for electricity received by Market Operator and the Nigerian Bulk Electricity Trading PLC respectively, only $6.66 million was paid in the first quarter of 2020.

The regulator said that Niger made a payment of N1.6 billion ($5.27 million) as part of its outstanding bills for energy received, Benin Republic paid N0.43 billion ($1.39 million) while there was no report on Togo making any payment. The report noted that the special customers — Ajaokuta Steel Company and its environs – did not make any payment in respect of N0.27 billion and N0.05 billion invoices issued by NBET and Market Operator respectively. “It is noteworthy that the payment cycle for March invoices fell within the period of the outbreak of COVID-19 pandemic and the resultant macroeconomic impact of the policies to curtailing its spread in Nigeria have added to the challenge of low remittance to the market. The severity of the liquidity challenge in NESI (Nigerian Electricity Supply Industry) was reflected in the settlement rates of the service charges and energy invoices issued by MO and NBET respectively to each of the DisCos …, as well as the non-payment by the special and international customers for the services rendered by MO.,”

the report said. It explained: “During the quarter under review, the special customers (Ajaokuta Steel Co. Ltd and its environs) did not make any payment in respect of the N0.27billion and N0.05billion invoices issued by NBET and MO respectively. A total of N4.05billion (US$13.22million) invoices were issued by MO to international customers (i.e., Societe Nigerienne d’electricite – NIGELEC, Societe Beninoise d’Energie Electrique – SBEE and Energie Electrique – SBEE and Compagnie Energie Electrique du Togo – CEET). During the quarter, NIGELEC made a payment of N1.61billion (US$5.27million) as part of its outstanding bills for the energy received from NBET and services rendered by MO. Similarly, SBEE paid N0.43bilion (US$1.39million) in respect of services received from MO.

“

“It is noteworthy that tariff shortfall (represented by the difference between actual end-user tariffs payable by consumers and the costreflective rates approved by NERC) has partly contributed to liquidity challenges being experienced in the industry.”

According to the report, “However, the settlement ratio to the expected MRTs (minimum remit tance thresholds), having adjusted for tariff shortfall, as represented indicates that DisCos need to improve on their performance. Whereas DisCos were expected to make a market remittance of 46.09 percent during 2020/Q1, only 32.53 percent settlement rate was achieved within the timeframe provided for market settlement in the Market Rules. Therefore, DisCos’ remittance level, regardless of the prevailing tariff shortfall, was still below the expected MRT.

“

“Thus, to ensure business continuity and improve sector liquidity, DisCos must continue to improve on effort towards reducing ATC&C losses to levels commensurate with their contractual obligations in the performance agreement.

“

the amount of indebtedness to Benin, Niger and Togo stood at $69 million as of the last review in 2019, subsequent upon which several payments were made to the NBET, In a statement, he said that contrary to reports,

“

One of the contributory factors to high ATC&C losses, and hence poor liquidity, is non-settlement of energy bills by MDAs across the three tiers of government (i.e. Federal, State and LG). This issue must be urgently addressed as part of the ongoing Federal Government’s efforts towards ensuring financial sustainability of NESI.”

The Senior Special Assistant to President Muhammadu Buhari on Media, Garba Shehu, said that the country’s electricity export on credit to Benin, Niger Republic between 2018 and 2019, was $20 million not $81.48 billion as reported.

As at July 2020, it was reported that the country’s electricity export on credit was about $81.48bn, however, the presidency denied this.

adding that much of the indebtedness has been repaid by the debtor nations.

POWER According to him, the actual cost of electricity generated between 2018 and 2019 by all the electricity generation companies in the country was about N1.2 trillion ($4 billion), noting that over 90 percent of the electricity generated was distributed and consumed by the 11 DisCos in the country. According to the President of the Senate, Ahmed Lawan, the power sector costs the country’s economy $29 billion losses annually. To address these challenges, it is expected that the regulator (NERC) will come up with a workable blueprint this 2021 -- that will ensure liquidity in the power sector-- by holding both the DisCos and the international customers to pay for electricity supplied to them. This way, there will be liquidity in the sector, which will ultimately result in the building of more power infrastructure in the country and steady power supply to Nigerians for economic viability.

African Development Bank Approves $15m to Boost Low-Carbon Energy Generation in Sub-Saharan Africa By Ikenna Omeje

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INFOGRAPHICS

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INFOGRAPHICS

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POWER The reimbursable grant is earmarked for AREF II’s project support facility. The CTF contribution was approved by the CTF Trust Fund Committee on July 2020 under its Dedicated Private Sector Program (DPSP III).

the delivery of sustainable power infrastructure to meet the region’s growing energy needs. AREF II Project Support Facility will work to bring projects to the required level of readiness and bankability.

The financing will help small and medium-sized producers to add more than 800 MW of hydropower, solar and wind power and battery storage in countries across subSaharan Africa.

AREF II, the second generation of the pan-African Renewable Energy Fund, is targeting a $300 million market capitalization, and will be managed by Berkeley Energy, a well-established fund manager with extensive experience investing in renewable energy projects in Asian and African markets.

“We are very excited to support AREF II at a time when, due to competing financing needs, on account of the cost impacts of the pandemic and for post COVID-19 recovery efforts, there is real risk of under-investment in the African power sector, including in renewables,” said the Bank’s Vice President for Power, Energy, Climate and Green Growth, Dr. Kelvin Kariuki. The Bank manages SEFA, a Special Fund, and is also a CTF implementing entity. Capitalizing the fund’s catalytic tranche is expected to attract critical private investment at a time of investment uncertainty and economic disruption owing to the ongoing COVID-19 pandemic and to ensure capital flows to support

“We are proud to be able to continue our company’s mission of bringing reliable renewable power to countries and communities in Africa to support economic and social development, whilst also meeting the needs of our investors”, said TC Kundi, Berkeley Energy’s CEO. “The Berkeley Energy team is looking forward to working again with SEFA which has played an important role in launching AREF II,” he concluded. SEFA provides catalytic finance for renewable energy to contribute to universal access to affordable, reliable, sustainable, and modern energy services for all in Africa, in line with the Bank’s New Deal on

Daewoo Receives Construction Award for Mozambique LNG Plant

aewoo Engineering & Construction (E&C) out of South Korea has won an LNG plant construction project in Mozambique valued at 500 billion won (over $455 million). The Total-led project in Mozambique LNG Area 1 involves building two liquefaction trains and auxiliary facilities with an annual production capacity of 64 million tons at the Afungi Industrial Complex in Mozambique. It will take 33 months to complete. Daewoo E&C will be responsible for the construction of key processes such as steel frames, machinery, piping, and electricity.

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Energy for Africa and Sustainable Development Goal 7. Established in 2011 in partnership with the Government of Denmark, SEFA counts the United States, the United Kingdom, Italy, Norway, Spain, Sweden, Germany, and the Nordic Development Fund among its donors. The CTF is a $5.4 billion global fund that promotes scaled-up financing for demonstration, deployment and transfer of low-carbon technologies with significant potential for longterm greenhouse gas emissions savings. Since 2010, when the Bank became an Implementing Entity of the CTF in 2010, it has approved over $588 million in CTF resources for a total of 10 projects across Africa. “We welcome the participation of CTF in this project. These concessional resources will be instrumental to maximize the participation of private investors in the Fund while minimizing concessionality, with the aim to support low-carbon and climateresilient development in Africa,” said the Director of Climate Change and Green Growth at the Bank, Prof. Anthony Nyong.

ACROSS AFRICA

Woodside Blocks FAR’s Sangomar Deal with ONGC

ustralian giant Woodside will further increase its stake in a project located offshore Senegal following its decision to pre-empt another project stake sale, this time from compatriot FAR to India’s ONGC.

acquisition will reflect those of the FAR/ONGC transaction, including payment to FAR of $45 million and reimbursement of FAR’s share of working capital, including any cash calls, from 1 January 2020 to completion.

will assist in our targeted sell-down in 2021.

Woodside said recently that it has given notice exercising its right to pre-empt the sale by FAR to ONGC Videsh of FAR’s entire participating interest in the Rufisque, Sangomar and Sangomar Deep (RSSD) joint venture.

The terms will also include the entitlement to certain contingent payments capped at $55 million.

Woodside’s participating interest in the RSSD joint venture will increase to 82 per cent for the Sangomar exploitation area and 90 per cent for the remaining RSSD evaluation area following completion of this acquisition and the Cairn acquisition announced on 17 August 2020, assuming no other joint venture participant pre-empts. Woodside will remain the operator.

FAR has a 13.67 per cent interest in the Sangomar exploitation area and a 15 per cent interest in the remaining RSSD evaluation area. FAR entered into a sale and purchase agreement with India’s ONGC for its entire interest in the production sharing contract for the Rufisque, Sangomar, and Sangomar Deep Offshore Blocks offshore Senegal in November 2020. Woodside said that the terms of its

The acquisition remains subject to Government of Senegal approval, FAR shareholder approval, and other customary conditions precedent. The acquisition will be funded from current cash reserves. Woodside CEO Peter Coleman said the acquisition of FAR’s participating interest makes the value proposition for Sangomar even more compelling. “Sangomar is an attractive, derisked asset in execute phase, offering near-term production. The acquisition is value accretive for Woodside shareholders and results in a streamlined joint venture which

“We plan to commence development drilling next year as we progress the project to targeted first oil in 2023”, he said.

To remind, Woodside in August exercised its right to pre-empt the sale of Cairn’s entire participating interest in the RSSD joint venture to Lukoil. On the other hand, FAR decided not to object Cairn Energy’s deal with Russia’s Lukoil.

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OUTLOOK 2021: Oil and Gas Industry By Ikenna Omeje and Jerome Onoja

nother round of lockdowns following a second wave of the novel Covid-19 virus has sparked increased speculation of what 2021 holds. This write up examines forecasts by industry experts and rating companies on possible outcomes at global, regional and national levels.

It said:

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“Investments from global E&P companies in 2021 are projected to reach around $380 billion, almost flat year-on-year,

Global oil forecast In its 2021 outlook, Rystad Energy projects that investments by exploration and production (E&P) companies will rebound to the precrisis level of $530 billion in the next two years, if oil prices rise to $65 per barrel.

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a Rystad Energy report shows. About 20 percent or $76 billion of the estimated 2021 investments could be at risk of deferral or reduction, with the remaining amount being categorized in the safer tiers of low and medium-range risk.

“Investments may rebound to the pre-crisis level of $530 billion by 2023 if oil prices rise to around $65 per barrel.” While recalling the factor that led to drop in investment by E&P companies, the data consultancy firm said:

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“After the previous market crisis in 2014, annual E&P investments never recovered to the pre-crisis level of about $880 billion

COVER STORY Maintenance work will therefore have high priority in 2021 to avoid unplanned outages in the future. “Well capex is split by the wells’ breakeven price, which gives a clear idea of how much of it might be at risk of deferral or repeal due to lower oil prices. About 23 percent ($37 billion) of the total well capex is assigned to wells with a breakeven price higher than $55 per barrel, which puts this spending at high risk of deferral. Wells with breakeven price in the range of $30 to $55 per barrel are seen as medium risk, while those with a breakeven below $30 per barrel are low-risk drilling opportunities. “For discovered projects under development and undiscovered projects, the breakeven price for each project remains the reference point. We see that 10 percent of the capex associated with projects under development and 30 percent of the capex for discoveries and undiscovered projects may face deferral due to weak economics,” the report stated. Corroborating Rystad Energy’s projection of an increased spend on maintenance activities, particularly for well operations, Stella Okene – Managing Director for Stelog said: “While greenfield projects may seem distant for obvious reasons, there is the tendency of lower budget projects being undertaken especially within already existing brown fields. “Hence,

there will be an increased spend on maintenance activities particularly relating to well operations, such as well Interventions and well workover,” she noted.

Similarly, Deloitte expects global oil demand to recover to nearly what it was before the outbreak of Covid-19. According to its projection, the recovery will be 4 percent lower in the base case. “Global oil demand fell by 25 percent in April and it has rebounded sharply since then, cutting its losses to just 8 percent. Looking ahead,

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2021 oil demand is expected to recover strongly but remain lower than pre–COVID-19 levels, about 4% lower in the base case.

“Work-related travel in the United States still remains 35-40 percent below the pre-pandemic level. Even in the base-case scenario, analysts expect 2021 global jet fuel demand to remain below 75 percent of prepandemic levels,” Deloitte said. In a report released in November last year, a global rating company, S&P Global Rating, said that since the outbreak of Covid-19, its forecasts have stabilized for the first time. It noted that while considerable uncertainties remain, the risks to growth are more balanced.

and instead settled at $500 billion to $550 billion. Much of that reduction was due to supply chain and efficiency improvements.” It noted that “Of the total $380 billion of projected investments, about 60 percent ($234 billion) is likely to come from producing assets, which have two main spending channels: facility and well capex. Within facility capex, about 38 percent is spent on facility maintenance. This is believed to be a low-risk category, as operators were forced to postpone most of their planned maintenance programs in 2020 due to coronavirus restrictions and lower oil prices.

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In its projection, the ratings agency

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Stella Okene, MD Stelog

expects Asia-Pacific GDP to shrink by about 2 percent in 2020 and grow by close to 7 percent this year.

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COVER STORY However, apart from China, activity is not expected to return to preCovid-19 levels before the third quarter of 2021 for the region. In the same vein, the post Covid-19 forecast of S&P Global Platts Analytics projects oil demand growth in 2021 to rise by half a million barrels per day to 6.3 million barrels per day, with Asia and particularly China and India leading the way. Oil demand in 2021 is now expected to come in at 99.53 million barrels per day. Platts, however, cautioned that

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a combination of increasing Covid-19 infections and successful vaccines means global oil demand is likely to worsen in the short run but improve six months down the road.

According to Platts, China and India will account for around 70 percent of the oil growth in Asia, with demand in the region expected to grow by 1.7 million barrels per day in 2021 and will be flat to marginally above 2019, or pre-pandemic levels. Also, Platts projects that the Organisation of Petroleum Exporting Countries (OPEC) and Russia will continue to influence activities in the oil markets in 2021 as non-OPEC supply suffers from a fallout of the pandemic.

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For instance, it stated that the US oil production is expected to drop to 10.24 million b/d in 2021 from 13 million b/d before the pandemic.

volatility this year after OPEC and its partners in the OPEC+ Doctrine of Cooperation (DoC) agreed in December to set output levels on a monthly basis, as against its usual quarterly or half-yearly basis, as they struggle with how much crude oil to supply to the current uncertain market. It would be recalled that

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OPEC+ in April 2020, in response to the drop in oil prices, agreed to a 9.7 million b/d cut, which came into effect in May. This was eased to 7.7 million b/d in August, and will be eased further to 7.2 million b/d this January. In 2020, the group’s balancing act faced various challenges. This was also compounded with over production by some of its key members like Iraq, Nigeria and the UAE, and the return of Libyan oil to the markets toward the end of 2020. There is also possibility of Iranian oil returning to the market this year with Joe Biden’s win in the last US presidential election. This is expected to add more pressure to oil prices. Speaking at the meeting of the Joint Technical Committee (JTC) convened for its 47th meeting via videoconference, in preparation for the 25th Joint Ministerial Monitoring Committee (JMMC) meeting and 13th OPEC and nonOPEC ministerial meeting held early January, the OPEC Secretary General, Mohammad Barkindo said: “The decisions taken at the last ministerial meeting pave for a gradual return of 2 mb/d to the market over the coming months, while standing ready to adjust these levels depending on market conditions and developments.” He noted:

It, however, cautioned that the markets should be prepared for more

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Mohammad Barkindo

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“We anticipate that crude oil demand will shift from reverse to forward gear and rise to 95.9 mb/d this year (2021), a gain of 5.9 mb/d frpom 2020.

The non-OECD will be in the driver’s seat with growth of 3.3 mb/d.” Global Gas Projection In a release in June 2020, the International Energy Agency (IEA) projected that global natural gas demand is expected to reach 4,370 BCM over the next four years, averaging 1.5 percent in annual growth rate. “We have adjusted this year’s forecast to account for Covid19 resulting in expected global natural gas demand reaching over 4,370 BCM annually in 2025, or an average annual growth rate of 1.5 percent per year for the 2019-25 period, compared to initial forecast which assumed an average growth rate of 1.8 percent per year over the same period. “Even if most of the 2020 losses are to be recovered in 2021, the Covid19 crisis has longer-lasting impacts on natural gas demand growth. This results in about 75 BCM /y of lost growth over the forecast period

COVER STORY

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– more than the equivalent of incremental demand for 2019. “Our outlook sees Asia remaining the primary driver of global demand growth, with China, India and emerging Asia together accounting for over half of the net increase in 2019-25. China is the single largest contributor, led by the industrial sector. India’s post-2020 growth is fueled by a combination of supportive government policies and improved infrastructure, while emerging Asia’s demand expansion is power sector-driven, underpinned by the addition of 15 GW of gasfired generation capacity across the region. “When the dust settles after the 2020 coronavirus crisis, China will be in a strong position to return to a trajectory of rapid growth, adding more than 130 BCM /y of incremental gas demand between 2019 and 2025. “China’s post-crisis demand recovery is led by the industrial sector, its demand for gas growing by 60 bcm/y between 2019 and 2025. “Middle East gas demand increases by nearly 100 BCM /y and reaches almost 660 BCM /y by 2025. The largest increments come from Iran and Saudi Arabia (accounting for up to 70% of the total consumption increase), supported by growing domestic supply availability. More than 60% of the net demand increase in the region is from the power and water desalination sector,” the global energy watchdog stated.

Energy Transition with majors While oil and gas will remain relevant, renewable energy is expected to play a key role in the energy mix in the next ten years. According to the Chairman and CEO of Total, Patrick Pouyanné,

Eni has pledged to reach 15 GW by 2030 and 55 GW by 2050.

Patrick Pouyanné,

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Total’s energy production in the period 2020 -2030 “will grow by one third, roughly from 3Million Barrels of Oil Equivalent Per Day (BOEPD) to 4MillionBOEPD, half from LNG, half from electricity, mainly from renewables.”

The company, also on the renewables front, confirmed that it will have a 35 GW capacity by 2025, and has the ambition of adding 10 GW per year after 2025. This could mean creating an additional 250 GW by 2050. In the summer of 2020, the company wrote off $7Billion impairment charges for two oil sands projects in Canada. Both projects at the time were listed as ‘proven reserves’. Moreover, as part of its green future strategy, Eni has purchased a 20 percent stake in Dogger A & B Project. According to its Chief Executive Officer, Claudio Descalzi, the essence is so that it can develop the skill sets needed to better understand offshore wind energy works. Mainly by building its own capacity,

Claudio Descalzi

The company’s 2050 strategic plan to reduce its carbon footprint includes its commitment to make natural gas account for 85 percent of upstream production. Eni is also teaming up with Enel to develop two green hydrogen projects. The partners plan to produce two pilot projects; each pilot project will feature electrolysers of around 10MW. But with all the challenges that confronted the oil and gas industry in 2020, 2021 may even be more challenging for ExxonMobil. The company recently wrote down b et we en $17–$2 0 Billio n in impairment charges. Its market cap plunge to $140Billion, and is capping capital spending at $25Billion a year through 2025, a $10Billion reduction from pre-pandemic levels. What this means is that the company may find it difficult to afford paying its sacred dividend which is costing $15Billion annually. For the Norwegian Equinor, the shuffling at its top management indicated that renewable energy, offshore wind energy, will be the company’s growth backbone.

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COVER STORY

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By mid 2021, it is expected that Equinor’s Renewables Division will have its own reporting structure. This is the most obvious sign yet that in the future offshore wind energy could be spun off as a separate company. Just like Eni, Shell has recently entered a 15-year Power Purchase Agreement (PPA) for 20 percent of Dogger Bank A and B. With this stake,

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Shell will use 480 MW of the wind farm for power offtake.

In its evaluation of Shell’s green progress recently, the Institute for Energy Economics and Financial Analysis, (IEEFA), stated that the company must shift at least $10Billion per annum or 50 percent of total capital expenditures from oil and gas and invest in renewable energy if they are to reduce their carbon intensity in line with their own stated goals. For Chevron, while its share has lost some of its value, it has remained resilient over the last 5 years, continuing to hover in the $90 range. In October 2020, its market cap was $142Billion, surpassing ExxonMobil for the first time. This is attributed primarily to lower debt levels, a constant dividend, and an image of being in control. Spending in the period 2022-2025 will be $14-16billion, instead of $19-22billion: $3.5 billion outside the US, of which 75 percent will be dedicated to Tengiz in Kazakhstan and the remaining $1.5 billion elsewhere

Gas On gas demand in Africa, even though the global gas market was already facing oversupply of LNG before COVID-19 outbreak, resulting in even more depressed prices as the pandemic’s impact on demand started to manifest in the Q1 of 2020, expanding infrastructure to displace diesel will increase use of gas in the power mix and gas for industrial purposes, according to Africa Energy Chambers in its 2021 outlook. The chamber said: “Nigeria for instance has declared 2020 the Year of Gas and adopted a new gas transportation network code this year, and Senegal embarked this year on a gas pipeline network project to construct a 155km national gas grid. (Add decade of gas, along with initiatives and updates from Nigeria). “The inability to prevent gas flaring nevertheless catapults the continent to the overall least carbon efficient continent at about 31 kilogram CO2 emitted per barrel of oil equivalent produced according to the released Outlook.” Also, IEA on gas growth in Africa, estimates that African natural gas consumption grows at an average of 3.3 percent per year to reach almost 195 BCM in 2025. According to the global energy watchdog, it remains primarily driven by industrial and power generation needs in North Africa’s major markets of Algeria and Egypt, followed by Nigeria. It stated that the development of domestic production in West African countries drives the sub-region, which sees an average 6 percent growth rate per annum (excluding Nigeria),

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but the overall size of the sub regional market remains limited at about 14 BCM per year in 2025.

Africa Outlook “Africa is the fastest-growing region

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of production at an average of 5.6 percent per year, supplying close to 295 BCM in 2025. The bulk of this growth comes from LNG exportdriven production developments in Mozambique and Nigeria and the joint offshore development in Mauritania and Senegal, as well as from North African assets to support domestic market growth,” it said. Up-coming African Projects According to Fircroft, major projects on the horizon across the continent include the Tanzania LNG Liquefaction Plant, also known as Likong’o-Mchinga Liquefied Natural Gas Project (LMLNGP). The project has been delayed since 2010 due to bureaucratic challenges. It is expected to begin in 2021 and will cost $30 billion. Also, the Dangote Refinery and Polypropylene Plant which is located in Lekki Free Trade Zone, Lagos, Nigeria, is a 650,000 barrel per day oil refinery. Apart from petrol, it will also produce 153,000 barrels per day of gasoline, 104,000 barrels per day of diesel, 73,000 barrels per day of jet fuel, 4,109 barrels per day of LPG and 12,300 barrels per day of fuel oil. The refinery, which is expected to come on stream this year, will cost $11 billion. The Rovuma LNG Liquefaction Plant which is located in Mozambique, will have an initial cost of $500 million for construction of the initial two liquefaction trains and associated onshore facilities. The project, which each of its trains is expected to output 8.2 million tonnes of LNG per year, will cost $22.4 billion. There is the Ogidigben Gas Revo l u tio n In d u s t ria l P a r k (GRIP), a downstream refinery and petrochemical complex. The complex, which is fully owned by the Nigerian National Petroleum Corporation (NNPC) and will cost $20 billion. The Mozambique LNG is another massive project by a consortium comprising Total, Mitsui & Co, ONGC, ENH, Bharat PetroResources, PTTEP and Oil

COVER STORY India Ltd. The project will cost $15 billion. Etan and Zabazaba oil fields are located in the deepwater of OPL 245 block in the Gulf of Guinea, off offshore Nigeria. The two fields, which are in water depths of between 1,200m - 2,400m, together contain up to 500 million barrels of oil equivalent. The project will cost $13.5 billion.

right fiscal framework, OPTS could invest an additional $9bn in deepwater projects to grow oil and gas development in Nigeria with resultant benefits for the nation.” On his part, the Executive Director, Pillar Oil, Oluseye Fadahuinsi, told Platts recently,

Finally, there is the Namibe Refinery Complex. This is an investment vehicle set up by two Russian groups (75 percent investment by Rail Standard Service and 25 percent by Fortland Consulting Company) and local partners. The project is located in Angola and will cost $12 billion. Outlook for Nigeria On Nigeria’s outlook, the Petroleum Industry Bill (PIB) is one piece of legislation that many industry players see as the way forward for the country’s oil and gas industry. Many believe that the legislation will help address some of the key challenges confronting the country’s oil industry. But the current version of the bill which has scaled second reading in both chambers of the National Assembly will do more harm than good, according to experts. In a statement by the Oil Producers Trade Section (OPTS), a body which comprises both local and foreign oil and gas companies, the right PIB will ensure that total government take, in terms of tax, royalty, and share of deep-water profit oil, is kept at globally-competitive rates, and reduce the cost of doing business in Nigeria. “The current PIB 2020 does not improve the investment environment for new project FIDs (final investment decisions) to be taken,” the country’s Oil Producers’ Trade Section said in a document cited by Punch. They further stated: “With the

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expected to deliver at least one million vehicle conversions by the end of 2021.

According to the Minister of State for Petroleum Resources, Chief Timipre Sylva, while speaking at the inauguration of the program, the induction of gas to power automobiles and other engines represented a step in the right direction, as the NGEP is set to create two million jobs annually for the country. He further stated that under the directives of the President, Nigeria will continue to strengthen the gas value chain, as a vital tool for transforming the economy. Gas products to be widely pushed for adoption include Compressed Natural Gas (CNG), Liquefied Petroleum Gas (LPG) and Liquefied Natural Gas (LNG).

Oluseye Fadahuinsi

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The non-passage of the PIB is the biggest problem, creating uncertainty and eroding confidence in our industry.

It is not an industry problem, but a national problem,” On the demand side, the domestic usage of gas is expected to improve as a result of the Federal Government rolled out National Gas Expansion Program (NGEP), which involves the conversion of fuel-powered cars and generators from petrol to gas. The policy is aimed at deepening domestic usage of natural gas in its various forms. This is in line with the Federal Government’s plan to make gas the first-choice source for cheaper and cleaner energy, and is

Chief Timipre Sylva

Marginal fields allocation ”The 2020 marginal oilfield bid round process is still ongoing in line with our published timelines on DPR website and bid portal.

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COVER STORY “The current status is that 161 successful companies have been shortlisted to advance to the next and final stage of the process,” the DPR Head of Public Affairs, Paul Osu said in a statement in December.

on their efficacy, will have positive effect on economic activities in the next three to four months, but expressed optimism for Nigeria’s economy to pick up after the first half of the year. Commenting on the impact that the African Continental Free Trade Agreement (AfCFTA) will have on the oil and gas industry on the continent, Fawibe said that the implementation of the agreement, which kicked off on January 1, 2021,

Africa Oil+Gas Report in December, reported that three tiers of winners are likely to emerge in the result of the bid round, citing to indications at the Ministry of Petroleum Resources, in Abuja, the country’s capital.

On the pairing of successful companies in the 2020 marginal field bid round, experts have said that oil and gas is a multi-million dollar investment, and for that reason, companies should not be forced to work together, rather, it should be willingly done by companies who are interested in working together. Impact of AfCFTA Giving his perspectives on the outlook for 2021, Dr Diran Fawibe, Managing Director of IESL said that the roll out of Covid-19 vaccines in various parts of the world, depending

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According to Dr Fawibe, government can improve its support for the oil industry by helping indigenous firms acquire high-end equipment which ordinarily would cost service companies a lot, considering the inadequate support from indigenous financial institutions. “It would be great to see agencies of government like the Nigerian C o n te n t D eve l o p m e n t a n d Monitoring Board acquire high end equipment for service companies to execute mega projects. In the same vein, they can develop the industrial parks and have indigenous firms take slots to occupy for operational purposes. These will go a long way”, he said.

Paul Osu

The scoop stated that the first tier refers to a list of two companies awarded the same field. The second tier is a list of three companies awarded the same field and the third tier refers to a list of companies numbering as many as 10, awarded the same field.

fragile to survive another lockdown, reduced trade activities with the regular trade partners who are undergoing another lockdown would inadvertently impact negatively. Policies to spur increased local consumption is one sure way to stay afloat beside huge funds in bail outs. Another proven method to reviving an ailing economy is in building infrastructure.

Dr Diran Fawibe

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(AfCFTA ) will benefit the manufacturing and commerce sectors more as against the oil and gas industry, because of the nature of the industry. AfCFTA, which seeks to establish a single continental market for goods and services, is expected to increase intra-African trade by 52.3% by 2022, through the application of at least a 90% cut in tariffs and by harmonizing trading rules at regional and continental level Conclusion While some economies are too

On her part, Stella Okene sees a huge opportunity for players positioned in the downstream sector. She said, “in the downstream subsector, the untapped potential for digitalization is immense; remote monitoring, artificial intelligence and predictive maintenance can help one get ahead of problems that can shut down a refinery, and they have the potential to be big moneymakers. “Those with skin in the game, who have invested in the subsector should witness an upswing in profitable activities from 2021”, she quipped. With the foregoing, the Autogas policy and other initiatives by the government to execute its National Gas Expansion Programme, there is bound to be an increased economic activities in Nigeria’s oil and gas space while big ticket projects await a conducive environment for FIDs and other major commitments.

INFRASTRUCTURE

AKK Gas Pipeline to be Completed, Commissioned in June 2021 — Oilserv By Ikennqa Omeje

The Chairman of one of the contracting companies handling the Ajaokuta-Kaduna-Kano (AKK) gas pipeline — Oilserv Nigeria Limited — Engr Emeka Ok wuosa, has said the project will be completed and commissioned by the first half of 2021 as stipulated in agreement with the Federal Government. Okwuosa who disclosed this during an inspection of the project said: “We want to assure you sure very clearly that this project will be delivered in line with the schedule and with top quality. “The percentage of work that has been done, putting it in perspectives, normally in this project you do engineering de sign , p ro curem ent of materials, and then the construction but because of the fact that procurement will take time to happen. When pipes are

ordered they will mill the pipes that have. “So we started preconstruction work, and it is a process, but if you put it together we are close to 10 per cent of the entire project, but it will speed up as soon as we have our line pipes.” Commenting on the security situation at the project site so far, he said: “We have come a long way and we always have a security procedure, and that procedure is always based on strategy and plan. It is stated clearly the areas we are operating in and the situation. “We do a scan to know what the issues are and based on that we deploy the right security. We are working in the middle of the bush and we don’t have problem and we are doing what is necessary.

“The major aspect of that security is being in tandem with the community and work closely with the community and that is the first line of security.” Speaking on how the project has impacted local content, he said: “Over here we employ locals as we move to the community and empower them as subcontractors and is a testimony to the development of local content. “Oilserve is a representative of local content from engineering, procurement and construction. The things we have to buy overseas of course are things we cannot manufacture here. “We are abiding by it, the materials and vehicles inclusive so clearly local content is exemplified.”

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INFRASTRUCTURE

FG Gives Approval to National Public Security Communications and Ibom Deep Seaport Projects Concession and Regulatory Commission (ICRC), this was part of decisions reached at its weekly meeting which held recently at the Council Chamber, Presidential Villa, Abuja. With this development, the stage is set for contract signing and implementation with respect to the projects.

he Federal Executive Council has approved the Full Business Case Compliance Certificates for National Public Security Communications project and the Ibom Deep Seaport project. According to the Infrastructure

The National Public Security Communications project is a Public Private Partnership Project between the Ministry of Police Affairs and MPS Technologies Limited (a special purpose vehicle incorporated by Mobitel limited to manage the NPSC Concession), on a Build, Operate and Transfer arrangement, which

IKIKE Project: TEPNG Assures Host Communities of Inclusion

T E P N G G e n e r a l M a n a g e r, Community Affairs Projects and Development, Mr. Obinna Ofoezie, said offshore communities will be integrated into the project in terms of employment and trainings, assuring that every unskilled job will be allocated to the communities. O fo ezie who sp oke at the

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The Ibom Deep Seaport on the other hand is a greenfield port development integrated within the Ibom Industrial City (IIC) Free Zone development. It is located in the South East of Akwa Ibom State. Bolloré-PCI Consortium are the Concessionaires for the project.

SOCIAL INVESTMENT

s t a ke h o l d e r s s e n si t iz a t i o n programme, organised for offshore communities in Port Harcourt, said all offshore host communities have been engaged through their Paramount Rulers for effective inclusion.

ot a l E x p l o r a t i o n a n d Production Nigeria Limited, TEPNG, has assured offshore host communities of inclusion in its upcoming IKIKE project, saying that benefits of the project will be brought to the people.

will combine the network’s 450MHz spectrum with MPS’s 2300Mhz (2.3GHz) spectrum among other assets. The objective of the project is to rehabilitate, upgrade and operate the system in order to more efficiently provide specialized security and surveillance services to the Nigerian Police on a sustainable commercial basis and generate revenue.

Represented by the Community A f f a i r s M a n a g e r, S a h e e d Ogunsanya, Ofoezie who gave details of the project, assured that offshore host communities will be part of the project. “We have engaged with Paramount Rulers in our of fshore host communities in both Rivers and Akwa Ibom State. We ensure our host communities are carried along in our projects. “Offshore communities will be a part of the project in terms of employment, capacity trainings in oil and gas related skills, such as scaffolding, crane operations, etc “We have engaged our contractors for the project, and we are assuring

you that all unskilled jobs goes to the host communities 100 percent. “There will be community assisted projects in our offshore host communities in Akwa Ibom and Rivers State, such as provision of potable water, road rehabilitation, etc. “I can assure you that the benefits of this project will be brought to the people. As a responsible organization, modalities have been put in place by our HSE department to carry out a social impact survey in all our host communities.” Participants at the event applauded the French multinational for the sensitization, explaining that it has bridged the gaps between them, the host communities and the oil firm. A participant, Capt. John Etim, from Okobo, Akwa Ibom State, said Total remains the best IOC in Nigeria, and the only oil firm that has signed an MoU that covers the entire state.

MARITIME

Iroghama Obuoforibo succeeds Ogbeifun as Starzs Investments CEO the acquisition of a 90 Ton ASD Anchor Handling Tug Boat in 2015. Under her management, the company has grown its assets base from three (3) ships in 2014 to eleven (11) ships by July 2 0 19,” t h e statement said.

he Board of Directors of Starzs Investments Company Limited (SICL) has approved the appointment of Ms Iroghama Obuoforibo as Managing Director/Chief Executive Officer of the company with effect from February 1, 2021. Obuoforibo’s appointment is coming on the heel of Engr. Greg Ogbeifun’s retirement as Chief Executive Officer having attained 35 years of meritorious service to the company and over 40 years of impact in the maritime industry. A statement issued by SICL Company Secretary, Dr Omogbai Omo– Eboh (SAN), stated that Iroghama Obuoforibo, who has been the Chief Operating Officer of the company since 2014, is a high achieving senior executive with a strong commercial, financial and operational track record spanning over 13 years across different industries. “In her position as Chief Operating Officer, Iroghama has drawn on her exceptional depth of expertise and entrepreneurial skills to lead strategy and policy, oversee business development, represent and promote the company’s interest amongst other roles. “She has worked to maximize the company’s revenue performance and has recorded landslide achievements. Among several accomplishments, she helped the company qualify for a multimillion-dollar investment for

Iroghama holds a B.Sc. in Biology and Psychology from the University of Massachusetts Boston and an M.Sc. in Public Health and Health Promotion from Brunel University London. She is the winner of the first season of “The Next Titan Business Reality TV show”. Iroghama is an alumna of the Harvard Business School and a member of the Institute of Directors. She is also the current Chairman, Finance and Membership Committee of the Ship Owners Association of Nigeria (SOAN). I r o g h a m a’s e n t r e p r e n e u r ia l excellence has been recognized by several bodies as evidenced by the numerous awards she has won to mark her achievements. Starzs Investments Company Limited, a foremost indigenous maritime logistics company servicing the Nigerian oil and gas industry was established by Engr. Greg Ogbeifun in 1986. Engr. Greg Ogbeifun, a Shell trained Marine Engineer and a dogged advocate for the advancement of the maritime industry in Nigeria, has contributed significantly to the national discourse for the transformation of the maritime sector. This cuts across a variety of topics such as human capacity development, establishment of national shipping fleet, capacity development of ship owners and shipyard operators, accountability and transparency of industry regulators among others.

On the industry stratum, Engr. Ogbeifun during this period, pioneered the leadership of several organizations, including the Nigerian Maritime Expo (NIMAREX) and the Ship Owners Association of Nigeria (SOAN), which he led as its first President. As a core Nigerian ship operator and ship repairer, Engr. Ogbeifun has focused on global best practices, selflessly championing the development of indigenous shipping and ship repairs in Nigeria. His concerns and continuous advocacy for the re-establishment of a Nigerian fleet trading globally, led to his being appointed a member of the Ministerial Committee for the establishment of a National Fleet by the Minister of Transportation, Rotimi Amaechi. Engr. Ogbeifun’s penchant for development of human capacity in the maritime sector led to him dedicating his companies, Starzs Investments Company Limited and Starzs Marine and Engineering Limited, as a platform for cadetship training for students from the Maritime Academy of Nigeria (MAN), Oron and other maritime tertiary institutions. This may have informed his appointment into the Ministerial Committee to restructure and reposition Maritime Academy of Nigeria (MAN), Oron by the Minister for Transportation. “As Engr. Ogbeifun turns 70 in February 2021 and retires from executive office within the company, he will remain a Non-Executive Chairman of the Board of Directors of Starzs Investments Company Limited. “Even in retirement, he plans to continue impacting the maritime and shipping industry through numerous projects that he is privileged to spearhead including the extensive expansion of the Starzs Marine and Engineering Limited (Starzs Shipyard) in Onne, Rivers State as well as the Benin River Port project in Edo State,” the company statement added.

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ENERGY WOMAN

“…to deepen the domestic Gas market in Nigeria, we must be looking beyond purely Natural Gas-” -Joe-Ezigbo

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ENERGY WOMAN

udrey Joe-Ezigbo is the Deputy Managing Director of Falcon Corporation Limiteda leading wholly indigenous midstream and downstream Energy, Gas Distribution & Trading company which she co-founded in 1994. An accomplished professional, Audrey holds several Masters’ degrees in Finance, Marketing and Business Administration from the Lagos Business School, University of Nigeria and Nnamdi Azikiwe University; as well as executive certifications in Management, Leadership and Governance from Harvard Business School, IE Business School, and IESE Business School. She is the outgoing President of the Nigerian Gas Association (NGA) - the umbrella association and voice for businesses and professionals involved in the Nigerian Gas industry, and chartered member of the International Gas Union (IGU). Audrey is an international speaker and has won several awards for her contributions to building entrepreneurial capacity in the industry and Nigeria at large. She was recognized as one of Leading Ladies Africa 100 Most Inspiring Women in Nigeria 2019. She is married to her Chief Encouragement Officer Joe and a mother to four amazing young adults. Excerpts of her interview with Margaret: One-On-One with Mrs. Audrey Joe-Ezigbo, Co-Founder & Deputy Managing Director of Falcon Corporation Limited and President of the Nigerian Gas Association Let’s meet you, please tell us briefly about yourself? I like to describe myself first and foremost as God’s daughter on an assignment to impact the world as He would have me do, and this is my primary view of myself in and out of the corporate world. I am an energy entrepreneur, an astute gas professional, having been in the industry for shy of twenty-seven years now.

has operations in both the midstream and downstream sectors of the gas industry. I play quite actively within key professional industry associations. As you know I am the current President of the Nigerian Gas Association. I am a Fellow of the Energy Institute FEI and a founding member of Women in Energy Network (WIEN). I am a member and role model for Women in LPG (WINLPG) and sit on the Nigerian Content Development and Monitoring Board (NCDMB) Nigerian Content Consultative Forum (NCCF) Diversity Sectoral Working Group. Outside of the industry, I am also a member of the Executive Council of Women in Management, Business and Public Service (WIMBIZ) where I Chair the WIMBIZ Capital Committee (WIMCAP) and Chair the WIMBIZ M emb er ship a n d Prog ra m s Committee. I am a writer and published author, the Founder of The Barnabas Widows Empowerment Foundation, and the Founder and Promoter of The Double Impact Platform for entrepreneurial couples in Business together. I am married and a mother to four amazing young adults. You are a woman of many parts and you wear multiple hats on a daily basis, what keeps you going? What is your driving force? Good question, Margaret. Truth is that I am propelled by my understanding that mine is a life called to create value and dispense value, and that through the different seasons of my life, I will be presented with opportunities to impact the lives of people positively so, if I embrace them fully. So, my ‘multiple hats’ as you call them actually all fit into the same mandate of embracing my opportunities, of me working my seasons optimally so that I can be a blessing to individuals, families, communities, my industry, nation and indeed the world. I know this is not a religious platform, but

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who I am and everything I do is underpinned by my faith.

I say this first, to then respond to your question about what my driving force is. It is found in Genesis 12 verse 3b which says ‘…in you will all the families and kindred of the earth be blessed and by you they will bless themselves’. I am literally minded daily that as long as I step up and serve in various capacities, I make lives better and there will be generations of people – be they my family members, my employees and professional colleagues, people in my industry, etc who will count themselves blessed because I existed and embraced my assignments full on. I will also add that as a woman who is very passionate about seeing other women excel, I do the things I do to encourage the younger women to also step up and take territory within their chosen industries; as well as to setting the example to both men and women that it is possible, that

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success in your chosen field does not have to be at the cost of family. It is not a trade-off. As the elected president of the Nigerian Gas Association (NGA), how would you rate your leadership of the Association based on your achievements so far? With every sense of humility, I can say that I have done exceptionally well in leading the NGA over the past two years. And let me qualify that I do not make this assertion as a brag. Rather, I am simply making bold to state what has been the outcome of two years and counting of diligent service, extremely demanding intellectual pressure and presence, and often grueling time commitments. It has been two years of meetings, workshops, and strategy sessions, multiple travels, and so on to deliberate constantly and consistently on pressing industry issues. Two years of engagements with the different arms of government, different MDA’s, regulators, policy makers and legislators, industry associations

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ENERGY WOMAN and stakeholder groups, special government intervention committees and working groups, our members and private sector industry groups, international embassies, and agencies of governments across the world. I was committed to ensuring that my tenure would further elevate the visibility and profile, significance, and impact of NGA as the voice of the Gas industry in Nigeria. I was determined that my leadership would ensure very clear results, tangible and measurable industry outcomes and achievements by the NGA and this is exactly what has happened by the grace of God.

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When I took on the presidency of NGA, a lot of the buzz was around the fact that I was the first woman to occupy this position in the twenty-plus years since NGA had been in existence.

I said at my inaugural speech that I had chosen to own that title of ‘’first female president’ because indeed it was and remains a significant achievement, and I am forever grateful to God for that. However, I was also clear in that speech that there was a lot of work to be done and that the industry challenges were gender neutral. It was important to me that beyond the ‘first-female’ title, I was able to deliver on the promises I made that day, so I rolled up my sleeves and got to work.

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Today, NGA has significantly leapfrogged, and this has not been by chance. It has been because I stepped up and did the work.

It is not easy leading an organization which is volunteer based. There is a certain level of dexterity that is required to manage and get outputs

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from professional members who also have their own day-to-day work responsibilities, even as much as I also have my own business to run. In this regard, I am very grateful to have been able to rally the support, loyalty and commitment of my Executive Council members, NGA Secretariat staff, and the many great men and women who supported our efforts through our Study Groups, and various working committees. As I position to hand over to my successor in January, I am confident that I am handing over a stronger, resilient, more efficient, and certainly more effective NGA.

We are in alliance with the National LPG Expansion Plan Implementation Office of the Vice President, FRN. We were very integral to the formulation of the 2017 National Gas Policy and as you know Section 8.4 therein speaks specifically to LPG, and the broad objective of attaining five million (5,000,000) MT domestic utilization via various applications within 5 years.

Considering the dismal statistics of over 4million persons with health challenges from use of biomass, is there a deliberate push from NGA to compliment the government’s effort in this regard? Certainly, we are. As the NGA, we recognize that in the push to deepen the domestic Gas market in Nigeria we must be looking beyond purely Natural Gas – be it Pipeline Gas, Compressed Natural Gas, or Liquefied Natural Gas.

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There is an imperative for us to grow the in-country utilization of Liquefied Petroleum Gas (LPG) and not just LPG for cooking, but for other applications including power, transportation, and for various industrial applications.

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So, we are very much in support of government’s National Gas Expansion Program and their various initiatives around LPG for cooking, captive power, small industrial applications, as well as Autogas.

We are also very much in close alliance and partnership with the Nigeria LPG Association (NLPGA) who are doing phenomenal work in shaping the direction of LPG adoption, utilization and working with the government to advocate for an adequate regulatory framework to support investments in LPG infrastructure. More recently, we have been working with NLPGA on the Petroleum Industry Bill,

ENERGY WOMAN again collaborating to ensure the final legislation that is passed is in the best interest of the Gas industry as a whole. Our supporting role is underpinned by our understanding that

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the journey to reducing the use of biomass as a fuel, to LPG expansion, is a function of more investments in infrastructure, improved delivery technologies, consumer education and market penetration, adequacy of funding and on reasonable terms by investors, availability of credit facilities or forms of subsidies to engender easy adoption and lower switching costs by users, and of course regulatory and legislative support amongst others. The push for a deeper domestic LPG market fits in very well with our core advocacy mandates as NGA. What’s NGA’s alliance with the International Gas Union (IGU) as a body; also, are there other global bodies you collaborate with to leverage their vast experiences? NGA is a Chartered member of the IGU which is the premier global body of Gas Associations of all the leading gas nations in the world. Our status as a Chartered member gives us a voice in the global discourse of Gas and a platform within which we can more easily articulate and project insights about Nigeria’s Gas developments, journey and opportunities to the investing world from a private sector viewpoint. Within the IGU, we also sit as Vice Chair of the IGU Exploration and Production Working Committee, ably

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represented by Mr. Emeka Ene of Oildata. Indeed, this is the first time that IGU will have an African, more so a Nigerian, sitting in this capacity.

Fro m o ur m emb er ship a n d engagement with IGU, we then also have access to networking and experience sharing with other member nations’ Gas associations. As NGA, we are working to see how we champion and bring to the fore an African Gas Association and this is because Nigeria holds the largest Gas reserves in Africa at this time, and we also see the potential for Nigeria to be a major regional hub for Gas, so it makes sense that we would lead the charge in bringing together the various Gas Associations on the continent. PIB. What specific role will passing the PIB have on gas development in Nigeria? We are a nation with 213.16TCF of Natural Gas as at today, with another over 600TCF unproven reserves; yet our production levels are still below 2BCF per day, with the bulk of this going to the export market; and then on the domestic front, to the power sector. What this means also is that in not being able to optimize our gas potentials, we are also then missing out on the otherwise attendant multiplier effects of a deeper and more robust domestic gas market -from employment generation, industrialization, local content capacity development, enhanced food production and security, revenue diversification and economic balancing, energy availability and sufficiency, and so on. More than ever before,

Considering the above, the Petroleum Industry Bill (PIB) is the single most important legislative instrument since the Petroleum Act of 1969. The PIB is critical to unleashing the potentials of the Nigerian Natural Gas value chain and fast-tracking our national pathway to economic recovery and growth, power sufficiency, national industrialisation, and wealth creation.

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Among other things, the PIB is supposed to ensure the repositioning of Nigeria’s gas industry for increased resilience and longer-term sustainability.

It is supposed to ensure the increased monetization of our gas reserves, to stimulate increased domestic gas utilization, to engender the production of adequate gas

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there is an imperative to leverage on the enormous potentials of Natural Gas as a catalyst to propel the actualization of our nation’s aspirations to lift 100 million Nigerians out of poverty

by ensuring energy sufficiency, in d u s t r ia liz a ti o n , in c re a s e d employment, revenue generation and improved standard of living of the citizenry.

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ENERGY WOMAN supply power generation and other industrial applications, especially to enable gas-based industries to develop. It is supposed to ensure a fair and transparent fiscal regime, and an attendant competitive commercially viable and attractive business landscape for Gas, backed by regulatory efficiency, transparency, and accountability, among other laudable objectives. This is the kind of environment that investments will come into and thrive in. In effect therefore, once we get the PIB right and passed into law, we expect to see more investments across the gas value chain from exploration to processing, to storage, distribution and of course a robust offtake market as well. Again, the multiplier benefits of a robust domestic Gas market, including the socio-economic benefits which Nigeria very much needs at this time, will come to the fore once the Bill is passed. No doubt, your leadership of the NGA as well as your company, Falcon Corporation Limited during this very interesting time of the global pandemic - COVID-19 would have been tested severely since it caught everyone by surprise; what has been your biggest lesson from this and how can businesses navigate such times in order to stay afloat? There are too many lessons which have been learnt by all throughout this period. Even the more forward-looking of us were caught unprepared in many ways. Truth is that for almost all business around the globe, their different business assurance playbooks, from Emergency Response to Crisis Management to DisasterÂ Recovery and to Business Continuity, did not envisage pandemics and lockdowns. As leaders our capacities were also tested in different ways. We were dealing with unprecedented and evolving business landscapes, global interplays that impacted on our local operations. We were staring macro issues in the face as much as we were also confronted with new definitions of health and safety management. We were grappling with the mental, emotional, and psychological wellbeing of all our people at the

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same time, and indeed with that of ourselves and our immediate families and households as well. If there are any specific two or three lessons I will share however,

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these would include nimbleness and adaptability, leveraging technology, and allowing yourself and your people be human. By nimbleness and adaptability, I mean that we had to learn how to quickly flex established systems and structures, our approaches to customers, markets, contracts and so on, in order to deal differently in the ways that were called for in specific situations that arose. Many leaders lost out in trying to remain rigid in a world that was in a state of flux. By technology,

I speak to the fact that technology played and will continue to play a critical role in business assurance and so it is important that even when things begin to settle down again, leaders still work to migrate as much of their businesses as possible to technological platforms that can easily be assessed regardless of logistics constraints that may arise as we saw from this pandemic. And lastly, I would say that this period has tested the best of us, and we have had to learn to be human in different and better ways. We have learnt how to engage and motivate ourselves and our teams via remote platforms. Those who will continue to have their people keep the strong sense of ownership, accountability and remain highly vested in their organizations will do so by a very different style of leadership that makes better room for the struggles and failings of both the leader and the led.

ENERGY WOMAN None of us is superhuman or above the impact of the challenging environment we find ourselves in, and the best of leaders will do well to remember this, so as to be assured of lifelong loyalty of their people when things to resolve turn into some kind of new normal for us all.

advocating for the acceleration of the pace and scale of process and program implementations so that investors have the confidence to put their resources and finances behind the proposed programs. This is an area we certainly still need to see significant improvement on.

Looking at the various government policies to catalyze the commercial viability of gas in Nigeria, what improvement would you want to see in each of them, viz: the network code; gas flare commercialisation; gas masterplan, etc.

The lack of liquidity in the power sector is a huge factor against investment in the country. What’s your opinion for a lasting solution?

Let me first acknowledge that a lot of work has gone into the development of the various policies you refer to and laud the government for a higher level of stakeholder engagement over the past three years than ever before. At this point in time and with the passage of the PIB being imminent, what we need to see is the harmonization of the various policies to ensure full alignment with the provisions of the PIB such that we do not have further market distortions as has been the case with some of the policy pronouncements over the past three years. As NGA we are already championing some of this work. This is not easy to do because

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there are already some provisions within the Bill which are at variance with established market practices. There are also existing challenges with migrating legacy contracts due to some of those policy pronouncements which will be further impacted by the effective roll-out of the PIB. And so many other issues. But again, this is the way of any restructuring, so with good faith on the parts of all concerned, these should ultimately be resolved. We then also need traction in the implementation of the policies. We need to signal to investors that beyond the sound bites, concrete action is being taken in a sustained manner. As NGA we are constantly

The issue of tariff comes top of mind. We must necessarily address this issue of arriving at marketreflective tariff’s that ensure the value chain is rewarded for their current investment and risk, and further incentivized to build-out added infrastructure which will then also feed the reduction of tariffs over time as competitive forces play out. It is good to see that steps are already being taken in this regard, albeit long overdue. However, pricing is not the be all and end all of the issue.

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The challenge with power sector liquidity is complicated in many ways by the structure of the market, from the structure of regulation, by the refusal to decouple the price of Gas from the price of power, and even by the mindset and behaviors of the end consumer.

And there are numerous examples that exist within and outside Africa of how other nations have allowed their power sectors to be restructured such that some of them, including a couple of our neighboring countries, today have a challenge with excess power rather than a lack thereof. You were recently appointed as an inaugural member of the Diversity Sectoral Working Group of the NCDMB’s Nigerian Content Consultative Forum; what is your assessment of women participation and recognition in the Nigerian Oil and gas sector in the past 27 years of your involvement? I believe there has been a clear change from when I started out in the industry back in 1994 when we barely had any woman in significant leadership and or technical and commercial roles in the industry. It was more commonplace to have women in the back end administrative, HR and support roles than it was for them to be in frontline.

There are many sides to the problem that need to be addressed at the same time if we are to see a mature and robust enough power sector where the investor receives value for their effort and risk, and where the customer receives continuous power and has a choice over their service provider and service bundle based on their own lifestyles and ability to pay.

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The main requirement for a lasting solution in my view, is the depoliticization of the power sector, the will to allow the market reset and come to a place of thriving.

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ENERGY WOMAN

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Today however, the narrative is quite different, and we have many notable women in strategic roles of leadership in the industry.

In addition, we have a few like myself who own companies mainstreaming in the industry and many others who are running companies that provide support technical, commercial, legal and other services to different parts of the industry value chain. Of course, we can still do significantly better in this regard and this is where the role of the Diversity SWG and that of other notable women associations such as the Women in Energy Network(WIEN), the Women in LPG (WINLPG), the Women in Energy, Oil & Gas (WEOG) come into play in advocating for and showcasing the roles, capabilities and competencies of women in the energy sector, and ensuring adequate local content opportunities are available for them to enter and operate successfully in the industry. What’s the Nigeria of your dreams? The Nigeria of my dreams is a Nigeria that is safe, secure, and backed by a legislative, regulatory and policy environment that allows businesses to thrive.

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I dream of a Nigeria that is corruption-free, where ethics and integrity – both personal, corporate, and governmental, are our watchwords.

A Nigeria that operates a secure 24-hour economy, where our men and women, our youth can apply themselves productively to profitable enterprises. I dream of a Nigeria that is largely exportoriented, where our industries are booming and producing products and services that are in demand all over the world. I dream of a Nigeria where our currency is strong and among the leading conversion

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currencies in the world, where the expression ‘value-for-money’ takes on a different meaning in that each note of the Naira commands significant value. I dream of a Nigeria where insecurity is not the order of the day; where kidnappings, ritual killings, insurgences and infractions, terrorism, intolerance, police brutality are no more the order of the day. I dream of a Nigeria which is not as patriarchal and sexist as it is today; a Nigeria where we value our women and allow them full expression of the gifts, talents, and abilities which God Himself imbued them with; a Nigeria where rape, domestic violence and sexual abuse against women is not a daily occurrence which the system largely overlooks. I dream of a Nigeria where our youth are respected and allowed selfexpression, where we make room for them in the leadership of the nation and in industry. I dream of a Nigeria where our educational system is once again the pride of the nation, where international students from different regions of the world are once again jostling for exchange

programs and lecturers and teachers are seeking sabbaticals in our institutions. I dream of a Nigeria where medical tourism is the reverse of what it is today, where our medical institutions, personal and facilities are so top notch that people scramble to come to Nigeria for medical care. I dream of a Nigeria where we earn as much from tourism as we do from oil and gas, where we are able to showcase the beauty in our environment which God has endowed us with. I could go on. I have such high hopes and aspirations for Nigeria, and I believe that the time will come when we will get it right and begin to turn things around in this country. My prayer is that in my lifetime I will see what I envision for this country come to pass, and I dream of a time when as Nigerians we will not be able to refer to the ‘good old days’ because where we are and what lies ahead is miles better than what used to be.

MARITIME

NPA to Commence E-Cargo Clearing In January 2021 Daniel Terungwa

IMO Applauds Nigeria’s Leadership in Fight Against Piracy Daniel Terungwa

he Managing Director of Nigerian Ports Authority (NPA) Hadiza Bala Usman has stated that NPA would introduce an electronic clearing system for cargoes to ease traffic gridlock at the port by January 2021.

across all platforms on phones. You can monitor when the consignment arrives and when you have been assigned to pick up your cargo. The E-call up will also remove human intervention and eliminate corrupt practices.”

NPA boss made known when she accompanied the Minister of Transportation Rotimi Amaechi on the inspection of port access roads in Lagos recently.

Bala-Usman noted that the only thing that would be needed for clearing is the barcode that would be scanned at the entrance of the port to enable them to enter the port.

According to her, the agency is working with the Lagos State government to create truck parks in designated areas.

The Minister of Transportation Rotimi Amaechi on his part, promised to meet with all relevant government agencies on the traffic.

She said that the Lagos State government plans to give a designated truck park at Orile where trucks will park until their cargo is cleared electronically before they can proceed into the port.

Amaechi stressed the need for an urgent solution to curb trucks blocking access roads to the ports towards the efficient clearing of goods with less human contact.

“We are planning to deploy an E-callup system in January 2021. We will provide an electronic call-up system within the Ports and designation truck parks. No more trucks parking randomly on the road, we are going to have a designated truck park; when you are called upon you can enter the Port.

Executive Secretary of Nigerian Shippers’ Council, Hassan Bello, who was also on the inspection, said that the Council has tried to proffer a temporary solution to the gridlock at the Port. He said that with the festive period a lot of goods are expected to be imported into the country which calls for urgent actions.

Bashir Jamoh

he International Maritime O r g a nis atio n (I M O), a specialised agency of the United Nations responsible for regulating shipping, has extolled for the second time in about six months, Nigeria’s leadership role in the quest for security in the Gulf of Guinea. IMO in a letter addressed to DirectorGeneral of the Nigerian Maritime Administration and Safety Agency (NIMA SA), Dr. Bashir Jamoh, specifically highlighted NIMASA’s contribution to the war against piracy and maritime crimes in the region, including facilitation of the Suppression of Piracy and Other Maritime Offences (SPOMO) Act, 2019, and initiation of the Deep Blue Project. It said they were proof of the country’s abiding determination to lead the charge against maritime crimes in the region. Jamoh had earlier, in a virtual address to a meeting of the G7++Group of Friends of the Gulf of

“The electronic call-up system will be

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MARITIME Guinea (G7++FOGG), expressed Nigeria’s resolve to lead efforts to achieve security in the region.

Nigeria’s commitment to safety and security in its waters and the Gulf of Guinea.

He said Nigeria’s strategy against insecurity in the region would be based on home-grown solutions. But the NIMA SA DirectorGeneral also sought international co op eration an d technic al assistance, particularly as regards maritime security strategy and policy development in line with IMO instruments.

Lim said: “I commend your leadership and proactive response. I would also like to reiterate my congratulations to the Nigerian Navy on the successful capture and arrest of pirates from the fishing trawler Hailufeng 11, and more recently on the rescue of the crewmembers of the containership Tommi Ritscher.

In the letter signed on behalf of the IMO Secretary General, Kitack Lim, by the Director, Maritime Safety Division, Heike Deggim, the United Nations Maritime organ praised “the efforts of the Nigerian Maritime Administration and Safety Agency (NIMASA) for its contribution to the fight against piracy and armed robbery in the Gulf of Guinea.”

“Those actions, together with all the other initiatives you highlighted in our meeting, including progress with the Deep Blue Project, send a strong and valuable message to the international community with respect to the considerable efforts your government is making to curb piracy and armed robbery against ships in the Gulf of Guinea.”

“From the successful enactment of new legislation in the form of the Suppression of Piracy and other Maritime Offences Act, 2019, complete with the forthcoming Guidelines, to the initiation and implementation of the C4i Deep Blue Project, Nigeria continues to demonstrate its leadership in the region with regard to maritime domain awareness and the enhancement of maritime security amongst littoral States. “IMO remains committed to supporting the good work being done by Gulf of Guinea States, such as Nigeria, to improve maritime governance and to enhance maritime security in terms of both current and emerging threats and challenges. It is, therefore, imperative that States adopt a strategic approach, in order to ensure effective implementation and compliance,” IMO stated. Lim had in June similarly written to Jamoh following the arrest and prosecution of some suspected pirates by Nigeria. The Secretary General said the moves sent a “strong and valuable message” to the international community about

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Jamoh, while addressing the G7++FOGG meeting, stressed Nigeria’s efforts to rid the Gulf of Guinea of maritime crime, using local initiatives anchored on the Integrated National Security and Water ways Protec tion Infrastructure, also called the Deep Blue Project, with the Command, Control, Communication, Computers, and Intelligence Centre (C4i Centre); SPOMO Act; and intensified regional cooperation. He welcomed the support of international bodies and stakeholders, such as the G7++FOGG, but emphasized the imperative of regional collaboration as Nigeria’s preferred strategy. Jamoh who acknowledged the challenge of piracy and armed robbery in the region said, “Our solution to the insecurity in the GoG must be home-grown, with GoG countries cooperating amongst themselves. Commitment to this cause must become an imperative.” The Director-General underlined the country’s determination to direct the war on maritime crimes in the region, stating, “I have often maintained that Nigeria is the Gulf of Guinea (GoG) and the Gulf of

Guinea is Nigeria. We recognise our strategic leadership position and role in the GoG, which has informed the extent of an integrated system of investment to curb criminality in our waters, ranging from enactment of designated legislation to development of human capacity and acquirement of critical hardware and platforms.” Jamoh hailed the call by international stakeholders for multi-stakeholder cooperation to contain piracy, kidnapping, and other criminal activities in the Gulf of Guinea. According to him, “Nigeria is working with the IMO to develop a National Maritime Security Strategy and in support of this has started work to form a National Maritime Security Committee consisting of the National Security Adviser, Nigerian Navy, Nigerian Air Force, INTERPOL, Marine Police, and other relevant security agencies. This committee will give focus and strategic direction to our maritime security effort.” The G7++FOGG was formed in 2013 during the British presidency of the G7 to support the maritime security architecture developed under the Yaoundé Code of Conduct. The Code of Conduct developed by three regional o rg a nis atio n s – Eco n o mic Community of West African States (ECOWAS), Economic Community of Central African States (ECCAS), and Gulf of Guinea Commission (GGC) – focuses on the Repression of Piracy, Armed Robbery against Ships and Illicit Maritime Activities in West and Central Africa. G7++FOGG comprises the G7 countries (Canada, Germany, Italy, Japan, France, United Kingdom, and United States of America), and Belgium , Brazil (observer), Denmark, the Netherlands, Norway, Portugal, Spain, Switzerland, the European Union, the United Nations Office on Drugs and Crime (UNODC), and INTERPOL.

MARITIME

NIMASA DG Pledges to Promote Maritime Education

he Director-General of the Nigerian Maritime Administration and Safety Agency (NIMASA), Dr. Bashir Jamoh, has promised to place utmost priority to maritime education and ensure professionalism in the transport sector.

In his remarks after the inauguration, Jamoh, who holds a doctorate in Logis tic s an d Transp or t Management from the University of Port Harcourt, said he felt honoured, “to lead this great team towards accomplishment of the noble mission and objectives of the Centre for Logistics and Transport Studies.”

He stated this during his inaugurated as Chairman, Governing Board of the Centre for Logistics and Transport Studies (CELTRAS), University of Port Harcourt (UNIPORT).

He vowed to ensure professionalism in the transport sector, while working hand-in-hand with the Governing Board to achieve the set goals of CELTRAS.

The inauguration, which took place at the university’s Institute of Petroleum Studies Auditorium, was supervised by the acting Vice Chancellor of Uniport, Prof. Stephen Okodudu.

“Transportation is life and life is transportation,” Jamoh stated, adding that he and the Board would strive to surpass the university’s target and intention for creating the Centre.

Jamoh’s investiture followed his appointment in October as Chairman of the 10-member Governing Board of CELTRAS.

“NIMASA, on its part, has a mandate enshrined in its enabling Act, which includes maritime education. It would be all hands on deck and, hopefully, we shall achieve the mandate of maritime education and professionalism in the country,” he said.

Okodudu said Jamoh was chosen by virtue of his position as Director-General of NIMASA , emphasising that his appointment “is an eloquent testimony to your outstanding contributions to national development.”

With the inauguration of the CELTRAS Board coming at a time when the federal government was trying to improve and expand the

transportation infrastructure across the country, Jamoh said the Centre had its work cut out. “Therefore, it is not by accident that we are gathered here to inaugurate this board to ensure that we produce professionals, and encourage research towards development of the transportation sector,” the Director-General said. Earlier, Okodudu appreciated NIMASA for its contributions to CELTR AS, particularly the construction of an office complex for the Centre. He expressed delight with the pace of the Centre’s growth from a humble beginning in 2012. “When I behold the edifice being built to house CELTRAS, I am very impressed that we are benefitting from the dividends of creativity,” the Vice Chancellor said. Acting Director of CELTRAS, Dr. Gladys Emenike, disclosed that the Centre had graduated three PhD students, including Jamoh. CELTRAS, a foremost centre for logistics, transport and supply chain management in Nigeria, was established in 2012.

Majorwaves Energy Report JANUARY 2021, Vol 4 No 1

MARITIME Its mission includes production of qualified professionals with adequate knowledge and practical skills to understand and solve logistics and transport problems in the country. The Governing Board of CELTRAS is charged with the responsibility of identifying and developing strategies for the Centre’s growth,

and effective and mutually beneficial relationship with government and industry. Other members of the Board are Managing Director/CEO, Delta Marine Limited; representative of the Minister of Transportation; representative of the Rivers State Commissioner for Transport; representative of the Corps

Marshal/CEO, Federal Road Safety Corps; National Executive Director, Chartered Institute of Logistics and Transport Nigeria; DirectorGeneral, Nigerian Institute of Transport Technology; Dean, School of Graduate Studies, University of Port Harcourt; Dean, Faculty of Social Sciences, University of Port Harcourt; and Acting Director, Centre for Logistics and Transport Studies, University of Port Harcourt.

NIMASA Denies Granting Waivers to Shipping Firms “So, if the shipping companies or ship owners take waiver processing fee payment as waiver, we shouldn’t call it waiver. NIMASA doesn’t give waiver and I want anybody to come and present waiver given by NIMASA or Ministry of Transportation. “In fact, even though the Act under section 9 (12) gives the minister of transportation powers to approve waivers, they don’t do so because they don’t want to encourage foreign vessels participation over local vessels”.

injustice” towards Indigenous shipping companies, which grants undue advantage to their foreign competitors.

It also disproved allegations of preferential treatments for foreign shipping companies in the shipment of petroleum products.

However, NIMASA DG denied any waivers or preferential treatments for foreign firms, adding that the agency lacked the powers to grant waivers, while the Ministry of Transportation, which is empowered by law to grant waivers had never granted any waivers for 15 years.

he Nigerian Maritime Administration and Safety A gency, NIMASA , has dismissed as false allegations that it has been granting waivers to shipping firms.

Director General of NIMASA, Dr. Bashir Jamoh, made the clarifications during an investigative hearing on the “urgent need to ensure strict compliance with statutory regulations and provisions regarding the Nigerian diving sector” organised by the Senate Committee on Local Content. The Ship Owners Association of Nigeria, SOAN, had earlier petitioned the Senate, asking it to intervene in what the association described as “unfavourable treatment and

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JANUARY 2021, Vol 4 No 1

“The the operation of the Cabotage Act provides that NIMASA has the responsibility under Section 5 (2) to 5 (4) to process waiver and not to grant waiver. NIMASA never grants waiver, but only processes waiver. “As the Minister mentioned, if we process, we send it to the Ministry of Transportation for the Minister’s consideration and approval; and to the best of my knowledge, for over 15 years, no Minister granted waiver.

Dr. Jamoh stressed that it was one thing to own a vessel, but another thing for the vessel to be fit for the business. “In the entire Africa, only Nigeria allows the trading of single whole vessel. The President is aware of this and when I came in, I issued Marine Notice that by 31st of December we will no longer certify single whole vessel. This is because if you want to trade, nobody would accept that particular vessel. That is number one”. He, however assured that the agency was working hard to build local capacities in the industry. But the Chairman of the Committee and former Senate Leader, Senator Teslim Folarin, said: “The whole essence of this investigative hearing is not to trade blames. We understand that they don’t have enough vessels; they don’t have capacity, but the capacity cannot come from heaven” he said

SUSTAINABILITY

Will Covid-19 Force Sustainability to Take a Backseat within Marketing and Live Experience?

By Marble LDN

s we look to 2021 as a brighter year for our sector, we’re looking at the lasting impact Covid could have within the live experience industry. Marble’s Production Manager, Zoe Davies, explores the role of sustainability within marketing and live experience in the post-Covid era, and outlines three small steps you can take to make your next event more sustainable. Pre-Covid, sustainability was a core focus for the marketing events industries, with brands making a clear effort to address the impact humans are leaving on the world. Campaigns such as Coca-Cola’s ‘Round In Circles’ and Iceland’s highly publicised Christmas TV advert (which controversially highlighted the negative impacts of palm oil) increased discussion around brand environmental responsibility. Heightened by highly publicised topics such as Extinction Rebellion protests and the rising popularity of Greta Thunberg, sustainability and climate change was at the forefront of topical issues that brands had a responsibility to address. The rising trend of sustainability has been very apparent in my time working within events, one example being working on Marble’s Absolut Trash project – the first ever sustainable runway at London Fashion Show, and shortlisted for ‘Best Sustainable Initiative’ by the C&IT Awards 2020. However, that was before the industry had come face to face with a pandemic, and now it seems that brands have found a new focus to steer their campaigns towards. IKEA’s ‘Conquer The Great Indoors’ and Tesco’s recent ‘No Naughty List’ Christmas adverts are examples of brands now, unsurprisingly, focusing on the pandemic rather than sustainability. Both IKEA and Tesco have focused their campaigns around sustainability in the past. That being said, there are still some brands who have continued keeping sustainability at a forefront of their brand identity. Brewdog for example, have kept sustainability as a core focus within their advertising and even declared themselves as the first carbon negative beer business; by purchasing 2,000 acres of Scottish

Highland with the intent to plant 1 million trees. They’ve also committed to using wind power to plant their breweries and bars, making them a great example of a brand continuing to pursue their sustainability commitments, despite battling the effects of the pandemic. This year the world has also seen first hand the impact our output is having on the environment, as the pandemic forced most of us to stay indoors, revealing the benefits of a ‘slowed down’ lifestyle – induced by lockdown. In India, citizens “are seeing the view of the Himalayan mountain range for the first time in their lives, due to the drop in air pollution caused by the country’s coronavirus lockdown” (The Evening Standard) and in Venice, the lack of tourism and motorised transport has resulted in the canal revealing never seen-before wildlife to the locals. These widely publicised revelations have hopefully displayed the true feasibility and the amazing benefits of more sustainable cultures. I wanted to think about whether sustainability will continue to be a core value within the live experience industry or whether it will be forced to take a backseat. Budget cuts and frozen client spend dominated the majority of 2020, and so as we approach the New Year with rose tinted glasses, safe in the knowledge a vaccine is on the way, we’re looking to brands and agencies to keep sustainability top of the agenda. One way for agencies to become more competitive would be the obvious way – make your services more

cost effective, however sustainable produc tion can require more investment. Sustainable materials can be more expensive, local suppliers to the event location are not always the preferred nor the cheapest choice and sustainability consultancy may be seen as a non-vital service. Consequently, is sustainability no longer seen as a ‘must-have’ when it comes to working in a live experience communications agency? Although this seems to be an obvious conclusion, I don’t necessarily believe it is correct. Despite Covid being absolutely catastrophic to the events industry, I believe some positives have come from such an unfortunate year. Less work means more time to reflect, more time to establish as an agency who you want to be, how you want to be represented and what you want to stand for. Less live work means more strategy, more business development and more reflecting on what can be improved. You could say that 2020 has forced agencies to be stripped back, with the core values being laid bare. For many and hopefully most, these core values will continue to incorporate environmental responsibility. In addition to this, being sustainable doesn’t have to blow your budget nor a last resort consideration. Here are a few examples of how to make your event more sustainable at little cost…

Majorwaves Energy Report JANUARY 2021, Vol 4 No 1

SUSTAINABILITY Communicate with your suppliers

The Solution to Marine Plastic Pollution is Plural, and Plastic Offsetting is One of Them

E x p re ss yo ur sus t ainabilit y requirements to suppliers and try to find those who share these values. Hire where possible, but if not, use materials that can be reused and recycled post-event. If using bespoke items, consider sustainable materials at the initial design stage and communicate this to your fabricator.

By Roxane Lauzet work and better incomes. But also businesses, by becoming more sustainable with the reduction of the plastic footprint and a strengthen corporate social responsibility

Make it easy for your guests Make it easy for your guests to be more sustainable at your event. Don’t provide single use plastics – maybe provide refillable and reusable water bottles and supply ‘take-home’ polycarb glasses at the bar. To save on production costs, make these sponsorship opportunities. Make recycling bins clearly visible and accessible. Partner with sustainable brands If your event involves sponsors, consider brands who practice and promote sustainability. Partnering with a sustainable brand can help the event be greener as a whole by sharing commitments, values and event sustainability techniques. Companies such as Furthr allow you to fund clean energy and offset carbon emissions via a subscription service, and would make a great starting point for brands looking encourage sustainable actions from their attendees. As there may be a slight ‘restart’ in the industry, it may be the perfect time to rebuild the industry, with sustainability at its core. As Fiona Stewart, organiser of Green Man Festival, put it “This period really makes you realise how precious the environment is and we really need to do more to protect it”. At Marble, we will continue to look at how we can make each event more sustainable, acknowledging the responsibility that we have to stick to the commitments that we made pre-pandemic. Hopefully there will be government support to encourage and enforce this, allowing sustainability to take a front seat, without it being financially damaging for the industry that is suffering the most.

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JANUARY 2021, Vol 4 No 1

ue to growing concerns around environmental protection, businesses, individuals and governm ent s have b e en looking for solutions that can be largely implemented to close the tap on plastic pollution.

TONTOTON, a Vietnamese company, based in Ho Chi Minh City has succeed to connect all stakeholders to create a new market for low-value non-recyclable post-consumer plastic, on the scheme of circular economy. TONTOTON Plastic Neutralization Program

In the last five years, businesses have strengthened their Sustainability Approach to acknowledge the need to take responsibility for their plastic production and consumption.

Following the idea that the informal sector achieve to collect and recycle large amount of plastic in poor waste management areas, Barak Ekshtein, director of TONTOTON decided to look closer to the problem. In fact, a study shows that ‘97% of plastic bottles were collected by informal waste pickers.

If targets have been defined and strong policies followed them to ensure high recycling rates of plastic products, a problem remains. What is the solution for low-value non-recyclable plastics?

The problem therefore does not lie in the logistics but in the price. By giving a market price to non-recyclable plastic, it allows waste collectors to collect and treat waste and thus avoid plastic pollution.

This is where plastic offsetting enters the scene. As a derivative of the Carbon Offsetting concept, where trees are planted or protected to capture CO2 emissions, Plastic offsetting also known as Plastic Neutralization, enables companies to take responsibility for their plastic footprint.

TONTOTON currently works in Southern Vietnamese Islands, Hon Son and Phu Quoc, and has already few tons of low-value plastic waste. To do so, it collaborates with local waste-pickers and thus provide them better incomes. The program focuses on preventing ocean plastic by following the Ocean Bound Plastic Certification. Their activities are audited by a 3rd party control body, the internationally recognized company, Control Union.

Put simply, neutralizing means funding the collection and treatment of plastic, equivalent to the plastic impact of the business. Therefore, giving it the opportunity to compensate for every ton of plastic it has produced by ensuring there is one ton less in the environment. From linear to Circular Economy Itis also a breakthrough in our traditional model of production, the linear economy. By extending the producer responsibility (EPR), this concept allow to build the bridge that lead to the ideal model, the circular economy, where no waste remains. This innovative solution brings with it diverse positive impact. To the environment, by protecting ecosystems from plastic pollution, reducing landfilling and CO2 emissions. A strong social impact, by local communities by empowering local communities with

To treat the waste, TONTOTON partners with a certified cement plant, through co-processing, to valorize waste as an alternative energy and raw material. “Our system can solve two issues. Plastic is made of fossil fuels and contains more energy than coal. Thus we can replace industrial coal consumption with nonrecyclable plastic waste. The plastic will not end up in landfill or oceans, therefore reduce levels of coal consumption and thus also CO2 emissions.”, says Barak Ekshtein. Businesses engaged in their program can claim plastic neutrality on the amount of plastic neutralized to share their sustainability efforts. Moreover, indicate it on their neutralized product by bearing the “Plastic Neutral Product” label.

Majorwaves Energy Report JANUARY 2021, Vol 4 No 1

Majorwaves Energy Report

JANUARY 2021, Vol 4 No 1