OGR SAIPEC 2020 Special Edition

OGREPUBLIC PUBLICATION

OIL & GAS REPUBLIC Vol 4 JANUARY - FEBRUARY 2020

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January/February Issue 2020

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COUNTRY REPORT INTERVIEWS AND INDUSTRY NEWS

ISSN 2705-2052

GEP, PETAN, OTHERS JOIN FORCES TO DEVELOP SSA OIL & GAS INDUSTRY: This comes in-line with the establishment of SAIPEC.

NCDMB TAKES LOCAL CONTENT TO NEW HEIGHTS IN AFRICA: NCDMB is at the forefront of facilitating local capacity development in Africa

INTRODUCTION Oil and Gas Republic's quarterly magazine explores the global oil and gas industry, featuring latest trends in the industry. This publication is a SPECIAL EDITION focused on Sub-Saharan Africa International Petroleum Exhibition & Conference 2020.

Publisher & Editorial Director: Engr. Idowu Babalola (MBA, MNSE, MEI)

Editor-in-Chief: Tobi Owoyimika

In this publication, we also featured some of the industry's latest trends especially in Sub-Saharan Africa Region where there are number of projects underway and industry experts has forecasted that the region will contribute about 2.3 million barrels per day (mmbd) of global crude and condensate production and about 9.6 billion cubic feet per day (bcfd) of global gas production in 2025.

This publication also provides key recommendations from industry experts on ways of improving African oil and gas business and investment environment.

Senior Correspondent, Technical and Creative Writer: Ndubuisi Micheal Obineme

Tobi Owoyimika

Correspondents: Genevieve Aningo Jackson Olagbaju

Contributing Authors: Ayobami Adedinni Binutiri Samson

Editor-In-Chief

Oil and Gas Republic (OGR) Reg. Number: 2347423

EDITORIAL CONTENTS

Oil and Gas Republic is an international publication covering the entire value chain of the Renewable Energy, Power & Electricity, Aviation, Mining, and Oil & Gas Industry. For more information, please visit www.oilandgasrepublic.com

OGREPUBLIC PUBLICATION

Email: info@oilandgasrepublic.com oilandgasrepublic@gmail.com Phone: +2349098095532

OIL & GAS REPUBLIC Vol 4 NOVEMBER - DECEMBER 2019

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November/December Issue 2019

We look forward to continue reporting about the oil & gas industry on our next edition.

Please send your feedback or general inquiries as we will be happy to respond as soon as possible.

SAIPEC FEATURES

PAGE 6

INDUSTRY NEWS

PAGE 12

LOCAL CONTENT

PAGE 19

FEATURED CONTENT

PAGE 25

EXCLUSIVE INTERVIEW

PAGE 26

SAIPEC TOP STORIES

PAGE 29

SAIPEC INTERVIEW

PAGE 34

SAIPEC SPONSORS

PAGE 36

USA $12, Europe €10, UK £8, Nigeria N1500, South Africa R60

COUNTRY REPORT INTERVIEWS AND INDUSTRY NEWS

ISSN 2705-2052

NIGERIA, CANADA TO RATIFY INVESTMENT AGREEMENT IN 2020: Nigeria and Canada Bilateral Trade Worth $984 Million.

UK SET TO HOST AFRICA INVESTMENT SUMMIT IN LONDON BY JANUARY 2020: The idea is to Showcase the opportunities that UK can offer.

Total is one of the largest international oil and gas companies in the world involved in Upstream, Midstream and Downstream activities not only to produce energy but to supply energy to the people. The Group operates in more than 150 countries. The Group is also a first rank player in chemicals, exploration, and production of oil and natural gas, refining and marketing, gas and new energies, trading, and chemicals.

Its 96,000 employees put their expertise to work in every part of the industry.

In Nigeria, Total operates over 500 service stations across the country, all strategically positioned to ensure quality products and services from Total. The company is also expanding its global network of service stations in order to be closer to its customers on a daily basis. Total owns over 16,000 stations, offering quality products and services tailored to customer needs.

Total service station in Onigbagbo, Ikeja, Nigeria, is equipped with solar panels, launched in Lagos on June 12, 2014, and making it the first self-powered station in West Africa.

In Berlin-SchĂśnefeld, Germany, its station is completely autonomous and powered by a combination of fully renewable energies (solar, wind and hydrogen). The Solar-powered filling station is a new innovation introduced by Total Plc which is a case study to encourage the use of safe energy in Nigeria. The construction of the service station is part of efforts aimed at providing energy solutions that are efficient and environmentally friendly.

The Onigbagbo Total solar service station is an integral part of the group's efforts to reinforce our network identity with a resolutely contemporary image, installations that are more energy-efficient and outlets that blend harmoniously into the environment.

The SunPower photovoltaic panels on its forecourt roof convert the sun's rays into electricity. This electricity is used to supply renewable energy to power the entire service station.

Its eco-friendly design, transparent canopy, earthy and neutral color tones, and green area creates a warm and welcoming environment for our esteemed customers.

This innovative service station also features zero emissions of harmful greenhouse gases, zero noise pollution, and a renewable energy source. Therefore, whether customers fuel, service or wash their cars or simply get cold drinks at its CafĂŠ Bonjour shop, they are partnering with us to build a more sustainable environment. The establishment of the solarpowered service station clearly depicts Total's dedication to continuous improvement and the establishment of an identity related to constant innovation that makes Total different in the global energy industry.

Total's management team said that innovation was part of the company's effort to catch up with the ongoing energy transition. The service station, which also houses a departmental store makes it less dependable on public electricity or fuel to power generating sets as well as boost customers' confidence in its services.

The goal within the next five years is to equip 5,000 Total stations with solar panels. This project is equivalent to installing approximately 200 megawatts of power and represents an investment of close to $300 million. It will reduce CO2 emissions by 100,000 metric tonnes per year. The Group is also present in Africa, where it has been involved in distribution for over 80 years. Total is the leading distributor of petroleum products with 4,300 stations located throughout 36 countries.

In Africa, for example, where more than 70% of the population is equipped with a mobile phone, Total offers mobile payment and money transfer solutions in partnership with service providers such as Orange and Airtel. This service already exists in 20 African countries and will soon be extended to 10 other countries in Africa.

The total network consists of 16,000 service stations in 66 countries, situated in city centers, suburban areas and along major roads and highways. This includes the European AS24 network devoted to heavy goods vehicles, with its 770 stations located throughout 28 countries.

Total has developed a smartphone app. Available in seven languages, it suggests routes and indicates the location of its stations and the services they provide.

Lubricants: Total's globally acclaimed range of lubricants are developed through continuous research & innovation, and in cooperation with equipment manufacturers to create high technology, energy-efficient products for optimal performance and protection of machinery.

As the world's fourth-largest distributor of lubricants and the leading distributor of petroleum products in Africa, Total Marketing Services operates 50 production sites worldwide where it manufactures the lubricants, bitumen, additives, special fuels, and fluids that sustain its growth.

In 2018, Total Lubrifiants, a world leader in lubricants, and Temot, a global automotive parts and accessories purchasing company, entered a new partnership agreement.

This three-year strategic partnership will enable customers around the world to benefit from TOTAL's broadest and most powerful range of lubricants available today.

Bonjour Shop: Total has also diversified its line of products and services offered at its stations, which are becoming true 'one-stop-shop' and opening its network to partners providing food service. Stopping at a station provides an opportunity to do much more than just stretch your legs.

You can grab a snack, drink and so much more in Total's Bonjour shops. The company has also partnered with top quick-service restaurants such as Chicken Republic and KFC to ensure all your needs are met at one-stop.

Car Wash: There are 3 decisive features in selecting a car wash, Wash quality, Vehicle protection, and value for money; Total offers a variety of car wash packages covering all three features that ensure your car gets the shine it deserves.

In Nigeria, the company's car wash is located at Igbobi Service Station, Ikorodu Road, Ikeja, etc...

Over 20 of its stations have the manpower to give your car a good traditional hand wash.

Total Wash centers also demonstrate its commitment to eco-responsibility as 150 of these facilities recycle around 75% of the water they use. e-cash: Financial Services in Total Service Stations. In making Total a one-stop-shop for all your needs. Automated Teller Machines (ATM) are installed in select stations in Nigeria.

Quickteller: A platform called Quickteller is available in Total services stations to facilitate the performance of other financial transactions such as mobile money services, bills payments, Airtime vending, funds transfer and collection points for international remittances e.g. Western Union, Money gram, account opening for banks and lots more.

Total e-cash - *737# Cashout: Total customers can now make cash withdrawals in select Total Service Stations without an ATM as the company has partnered with GTBank. Total Nigeria Plc now offers customers the opportunity to get cash from selected stations with the "dial of a button".

How does it work?

Customers dial a USSD string on their mobile phones e.g. *737*35*AMOUNT*SAP CODE# to withdraw cash from Total service stations.

The customer's GT Bank account is debited by the amount withdrawn, and Total's account is credited. The station staff then releases the cash to the customer.

Benefits Convenient service for the customer through Instant cash out.

Reduces the need to go to the ATM or bank to withdraw cash.

Enhanced liquidity management: Total Stations are able to manage cash and save time in going to the bank to deposit cash.

No installation or capital expenditure required: GTBank has provided the phones required for the 50 (fifty) stations in the pilot phase.

Courier Service: DHL Express, the world's leading international express services provider and Total, Nigeria's leading multinational energy and provider of convenience services, has come together to provide customers with better access to global express services. A consumer looking to send documents or parcels overseas can simply walk into a Total service station to send their shipment, ensuring greater convenience and accessibility to the over 220 countries and territories that DHL serves.

This further emphasizes the TOTAL's vision of being a one-stop-shop that caters to the growing needs of consumers beyond just the provision of petroleum products.

SAIPEC FEATURES

GEP, PETAN, Others Join Forces to Develop Sub-Saharan Africa Oil & Gas Industry

By Ndubuisi Micheal Obineme a much greater Sub Saharan Africa involvement, hence the progression to the SAIPEC brand moving forward.

“The Sub Saharan Africa International Petroleum Exhibition and Conference will again return to the Eko Convention Centre 25-27 February 2020 for its 4th edition.

“Working directly with PETAN and a team of industry thought leaders; we will draw on these global resources to ensure that the event delivers to the needs of all stakeholders throughout the region,” he concluded.

G

lobal Event Partners, Petroleum Technology Association of Nigeria, PETAN, and other industry players has joined forces to develop the Sub-Saharan Africa oil and gas industry. This comes in-line with the establishment of the region's major industry event, known as Sub-Saharan Africa International Petroleum Exhibition and Conference (SAIPEC) scheduled to hold on 25 - 27 February 2020, in Lagos.

Global Event Partners, GEP, are among those companies at the forefront creating a business platform for the oil and gas industry as a whole. GEP is organising international energy events that attract industry stakeholders, government officials, operators to share knowledge and expertise.

GEP will be organising the Sub-Saharan Africa International Petroleum Exhibition and Conference, SAIPEC, held in partnership with the country’s petroleum sector and hosted by Petroleum Technology Association of Nigeria (PETAN).

SAIPEC 2020 will kick off with an outstanding Keynote Session, Extremely focusing on Transformation in Sub-Saharan Africa. GEP has added five new features to the conference programme. It explores the unrivalled opportunities, and will also recognise the best-performing companies, local content projects plus women in energy.

The event also serves as a practical solution for the SSA oil & gas industry, connecting industry players working

together to advance sustainable growth and development in the region.

PETAN Chairman, a member of the SAIPEC Steering Committee, Bank Anthony Okoroafor, said that the oil and gas industry in the region must be an enabler for Africa’s economic growth and not just a revenue earner.

He further stated that Africa is still underexplored with huge hydrocarbon resources and the continent has the opportunity to use its oil and gas reserves to boost its economic and social development.

He said: "The future prospects look brighter than before. Investors have changed their perception of Africa as a risky jurisdiction to jurisdiction of enormous opportunities.

With the enablers in place, the oil and gas industry will finally become a source for Africa economic growth and not just a revenue earner.

"Regional collaboration requires government and industry working together because of the complex issues involved – this is exactly what SAIPEC sets out to achieve," he added Paul Gilbert, Event Director, and member of SAIPEC Organising Committee commented: “With a record-breaking 2,817 exhibition visitors, 650 delegates from across 36 countries, 11 NOC’s, 104 exhibitors and 54 speakers, the 3rd edition was the most successful event.”

“As the event has continued to grow and develop, it is increasingly attracting a much wider and more global audience, particularly

SAIPEC is a major industry event in SubSaharan Africa that attracts delegates from Nigeria, Uganda, Ivory Coast, Ethiopia, Kenya, Senegal, Gambia, Liberia, Ghana, Angola, Mozambique. Each country will share opportunities in its oil and gas industry, and learning points and areas open for exploitation and cooperation.

The SAIPEC Conference feature a wealth of content for both strategically and technically minded companies seeking a full solution event.

SAIPEC PROSPECTING SAIPEC Prospecting provides an unrivalled opportunity for prospecting NOC’s and governments alongside geoscience companies to showcase the latest blocks on offer from throughout Sub-Saharan Africa.

SAIPEC WOMEN IN INDUSTRY SAIPEC’s Women in Industry provides a unique platform for some of the finest minds of the oil and gas industry in Sub-Saharan Africa to convene and connect, and put forward solutions towards building a diverse and inclusive oil and gas industry.

SAIPEC AWARDS SAIPEC Awards will unite the oil and gas industry’s most prominent, market-leading and innovative companies throughout the value chain together to celebrate SubSaharan Africa’s developments and achievements.

SAIPEC AFRICAN CONTENT SERIES SAIPEC African Content Series addresses the opportunities in the successful implementation of local content across a series of discussions from heads of NOC’s, IOC’s and Independent and Indigenous oil and gas companies.

And, in partnership with the Nigerian Content Development and Monitoring Board (NCDMB).

SAIPEC FEATURES

Collaboration and Adopting New Technologies Major Talking Points in Africa’s Oil & Gas Industry ...Operators are looking for further collaboration, innovation and best practices to lowering cost and risk for their deepwater projects

G

lobal Event Partners, GEP, is at the forefront, creating a business platform for the oil and gas industry globally. GEP is organizing international industry events that attract industry stakeholders, government officials, operators to share practical experience in the oil and gas industry.

One major event the company will be organizing in 2020 is the Sub-Saharan Africa International Petroleum Exhibition and Conference, SAIPEC, the largest industry event in the region.

SAIPEC presents practical solutions for the Sub-Saharan Africa oil & gas industry and connects industry players working together to advance innovation and best practices that will foster growth and development in the region. The event is also an avenue where operators showcase their projects to industry stakeholders as well as investors.

This article provides more insights into how industry players have been working to create new innovative strategies that will improve the competitiveness of their

operations in the offshore oil and gas industry in Africa.

During the 2019 edition, Shell Nigeria Exploration and Production Company Limited, SNEPCO, launched its Deepwater Book. Shell has 60 years operational record in Nigeria and playing a key role in onshore, shallow and deep-water oil exploration and production with a strong working partnership with the Federal Government of Nigeria, local and international companies, investors, contractors, and communities to develop the country's oil and gas sector.

SNEPCO holds interests in four deepwater blocks, three of which are under the terms contained in a Production Sharing Contract. It operates OML-118 (including the Bonga field, 55% interest) and OML-135 (Bolia and Doro, 55% interest) and holds 43.75% interest in OML-133 (Erha) operated by the ExxonMobil subsidiary Esso Exploration and Production Nigeria (Deepwater) Limited.

SNEPCO separately holds 50% interest in OPL-245 (Zabazaba, Etan), which is operated

By Ndubuisi Micheal Obineme by the ENI subsidiary Nigerian Agip Exploration Limited, under a Production Sharing Agreement.

According to Shell's annual report, about 617,000 barrels of oil equivalent per day were produced in 2018: average daily production

by Shell-operated ventures in Nigeria, while, 92 percent of Shell Companies in Nigeria contracts are awarded to Nigerian companies in 2018.

The deep waters of the Gulf of Guinea hold rich abundant oil and gas resources. These fields deliver vital energy to help meet the growing energy demand in Nigeria and international markets. The Shell Nigeria Exploration and Production Company's deepwater production comes from the Bonga and Erha fields which accounted for 15% of Nigeria's total oil production in 2018. This translates to 37% of Nigeria's deepwater production in 2018.

SAIPEC FEATURES place as a valued partner by maintaining our close collaboration with our joint venture partners, host communities, the tiers of government in Nigeria and other stakeholders to further contribute towards the drive for sustained economic growth in Nigeria�

In West Africa, the current outlook shows that there are still unexplored offshore areas with huge potential for oil and gas. The challenge, of course, is that this new potential is mainly located at deepwater depths.

In Sub-Saharan Africa, operators from both NOC's and IOC's are looking for further collaboration, innovation and best practices to lowering cost and risk for their deepwater projects.

Bonga FPSO can produce up to 225,000 barrels of oil per day, and 170 million standard cubic feet of gas per day. The Bonga field achieved a cumulative export of more than 819 million barrels of oil in 2018.

As part of its effort to boost production, Shell deployed state of the art 7th generation drillship in the Bonga field.

The FPSO vessel's capacity has been upgraded in recent years, allowing SNEPCO to expand the main Bonga field with further drilling of wells in Bonga Phases 2 and 3.

SNEPCo pioneered the use of deepwater technology in Nigeria. Bonga boasts the first, largest and most technologically advanced polyester moored deep-water buoy built in Nigeria. The SPM buoy was fabricated and installed at Nigerdock, Snake Island in Lagos.

Five subsea trees were refurbished at a fabrication yard at Onne in Rivers State, the first in Sub-Saharan Africa with Nigerian engineers and technicians playing key roles. The refurbishment of the subsea trees has helped to increase oil production in the Bonga field.

Bonga has undertaken major turnaround maintenance, which covered statutory and regulatory checks, inspections, recertification, repairs and replacement of equipment as well as an upgrade of facilities.

More than 1,000 people and 50 Nigerian contractor and sub-contractor companies participated in the 2017 turnaround. All fabrications were done in Nigeria, an innovation that marked a turning point in SNEPCo's efforts to develop the capabilities of Nigerian companies in the provision of goods and services in deepwater oil and gas production.

During 2018-2019, wells are being drilled in the Bonga field to sustain production by using a newly built 7th generation Enesco DS10 drillship.

Maersk Drilling firmly believes that there is a Georgieva across the oil need for Kristalina strategic partnership and gas value chain and pursue innovation in both technology and business models. The company is pursuing two types of innovation, which are; Technology and Commercial Innovation.

The rig has several state-of-the-art features including; a specialized drill (dual rotary) and crane (heave-compensated) for enhanced capability. It is capable of drilling in water depths up to 3,600 meters and maximum drilling depths of 12,100 meters. The rig has two blow out preventers that are compliant with Tier 2 emission standards.

Maersk Drilling’s former Chief Operating Officer, Angela Durkin, discussed on the subjects matter of "Surviving the Downturn" and "Future Outlooks for West Africa" at a conference.

After receiving bids in 2015, the project scope was reviewed to significantly reduce cost. In early 2019, following the conclusion of OML 118 negotiations between SNEPCo and the NNPC, a clear commercial framework is in place, supported by the government and project investors, toward a potential Bonga South West Aparo Final Investment Decision.

In early 2019, SNEPCo also announced the release of Invitation To Tender (ITT) for engineering, procurement and construction contracts for the 150,000 barrels per day development of the Bonga South West Aparo (BSWA) oil field. The project's initial phase includes a new FPSO vessel, more than 20 deep-water wells, and related subsea infrastructure. The field lies across Oil Mining Leases 118, 132 and 140, about 15km southwest of the existing Bonga Main FPSO. Country Chairman of Shell Companies in Nigeria, Osagie Okunbor, said: "Through 2018 we continued to produce crude oil and natural gas, distribute gas to industries and for domestic power generation and produce Liquefied Natural Gas for export, which generated revenues for the government.

The companies also contribute to social investment in communities and indigenous companies."

"In 2019, we will continue to cement our

In her words, she explained that Maersk Drilling had been operating successfully in Angola for a couple of years, contributing to the country's budding oil industry. But when the oil price dropped, projects simply stopped dead in their tracks because the much lower oil price could not sustain the higher costs of deepwater exploration and production.

"With the current rise in oil price, optimism is returning to the West African industry. It is no surprise that local authorities are eager to restart projects and introduce new licensing rounds, with all the benefits they could bring to their countries.

"Oil equals revenue at the national level, but it also brings an influx of skills and competencies when we include local content and an additional boost to the local economy when supplies and services are procured locally, as we in Maersk Drilling prefer to do whenever possible," she added.

According to her, the lesson learned must be that West African deepwater is quite Vulnerable to the traditional boom-bust cycle. She adds: "This challenge is not smaller in a world with renewables on the rise, where oil and gas must compete with alternative energy sources on near-equal terms.

"The answer to this can only be to establish a more sustainable foundation for the projects to decrease the risk that recurring

SAIPEC FEATURES

bust-cycles mean they never really get off the ground. To do that, we at Maersk Drilling firmly believe that we need to cooperate closer across the value chain and pursue innovation in both technology and business models"

Aligned incentives will drive efficiency Speaking about driving efficient operations in the oil and gas industry, Angela Durkin emphasized that leveraging new technology is an enabler to boost production and reduce costs for deepwater projects.

“For the improvements to be sustainable, I believe we should attack the issue from a mindset of driving efficiency, not only saving costs. It is evident that some costs can be saved, but if we simply continue to squeeze out costs from all parts of the value chain, it will inevitably result in higher risk and impaired performances.

“If we are able to transport this way of thinking to the emerging West African markets, with local governments and regulators as important enablers, a similar focus on collaboration and alignment can become a key component on the way to confirm West African deepwater as a strong long-term proposition.

"There is more to be gained from collaboration and coordination, making sure that the goals of all parties are aligned, and in that way focusing on faster and better delivery, not only cheaper. If we do it right, we can make the cake bigger for everyone involved, "she noted.

"And most importantly, this will require operators and contractors to establish close and mutually beneficial relationships with local vendors and suppliers. Such relationships make it easier to run a safe and efficient operation, which again will ensure that business and society cooperate for better value," she concluded.

"We are still at a point where it requires up to 60 suppliers and 6,000 invoices to drill a single well, and the net nonproductive time across all services on the well is 20-25% from the oil company's perspective, even when the individual service providers can claim uptimes close to 100%.

New business models to ensure long-term viability She further explained that the oil and gas industry needs to evolve and agree upon new business models which can establish smoother interfaces between all parties involved.

The upcoming Sub-Saharan Africa International Petroleum Exhibition and Conference in Lagos on February 25 – 27, 2020, will present practical solutions for the SSA oil & gas industry, and connecting industry players together.

"To fix this, we need to work closer together and make sure that incentives are aligned across the board," she explained.

"As anyone who has ever been part of a drilling campaign will know, coordination is easier said than done. As mentioned above, 60 suppliers and 6,000 invoices can be involved when we drill a single well.

Oil and Gas Republic, an official event publication, will be producing unique content on collaboration, innovation, local content, and latest industry trends across the African region.

She stressed that much progress has been made in recent years in terms of cost-cutting. Hard times have forced many to take a harder look at their cost base. But it is important to realize that not all these cost-savings are sustainable in the long term.

"That is exactly what we are targeting in the alliance between Aker BP, Maersk Drilling and Halliburton where Maersk Integrator next year will become the first rig to work fully under the alliance's incentive structure, sharing the pain and gain on the well between the alliance partners.

SAIPEC FEATURES

SAIPEC 2020: Industry Players Set to Unleash SSA’s Onshore and Offshore Opportunities

A

s the Africa's energy industry has entered into a new era of prosperity, industry players, regulators, NOCs, IOCs, will open up discussion on the range of opportunities for onshore and offshore exploration and development across the Sub-Saharan Africa oil and gas industry. The sessions will highlight the opportunities as several new and existing countries will offer their prospects, dynamics’s of Sub Saharan Africa’s Oil and Gas, the impact of the oil sector in Sub Saharan Africa over the next five years, new approaches to Sub Saharan Africa’s Gas industry among others.

On the Dangote Refinery, the Chamber called attention to the current state of Nigeria’s infrastructure and the contribution the project would have specifically as the country works towards tripling its refining capacity to 1.5 million bpd by 2025 as a means to reduce its reliance on fuel imports.

To this, the report said, “the refinery’s tank farms are set out for completion in Q4-19 and they may be used as a depot before the refinery’s production starts. This would provide an immediate increase to fuel storage capacity.”

Nigeria and Ghana top list of markets to watch for key project developments, according to African Energy Chamber report.

Ghana’s determination to become subSaharan Africa’s first LNG importer in 2020 is set to become a reality as the Tema LNG terminal project nears completion. The project will be able to cover 25 percent of Ghana’s total electricity generation capacity, with gas providing a cheaper alternative to oil.

The report is spotlighting the $12 billion Dangote Refinery in Nigeria and Ghana's Tema LNG Terminal, the Chamber noted essential role such projects play in revamping the sector and creating opportunities for private sector investors.

Senegal has launched, for the first time in the history of petroleum exploration in the country, a licensing round of three blocks of sediment basin. The licensing round would be

By Ndubuisi Micheal Obineme promoted at international oil conferences, during a first phase of the process, while energy companies would be able to evaluate the blocks’ potential between the end of January and end of July 2020, according to Senegal’s Oil and Energy Minister Mahamadou Makhtar Cisse. Senegal has seen predominantly natural gas discoveries offshore in recent years, most of which are shared with neighbouring Mauritania.

Angola’s newly formed national oil, gas and biofuels agency, ANGP, announced that the country has formed a consortium with five international oil companies, including Eni and Chevron, to develop liquefied natural gas (LNG) for its Soyo plant. The consortium’s project, costing an initial $2 billion, is expected to start production by 2022.

In an interview, Uganda’s Minister of Energy and Mineral Development, Irene Muloni, says "Uganda is Ready for Business".

SAIPEC FEATURES Uganda will be among the African countries leading a delegation of private and public sector players at SAIPEC 2020.

During the event, in a National Showcase, SSA countries will be showcasing their ongoing second licensing round for oil exploration, and other opportunities in its sector.

Equatorial Guinea’s Oil Minister, Obiang Lima, said that his country

would award seven to eight blocks from its current licensing round at the end of November.

A data room for companies interested in the Zafiro oilfield license would be opened as soon as possible Minister Lima said.

Chairman of Mozambique’s upstream regulator, INP, Carlos Zacarias announced that the country’s long-awaited sixth licensing round is due to be launched early next year.

INP, Zacarias said, is currently working out which acreage to offer industry and will then submit its proposal to government for approval.

Industry players from Ivory Coast, Nigeria, Mozambique, Senegal, Uganda, Angola, Cameroon, Ghana, Liberia, Equatorial Guinea, South Sudan, Gambia, will be participating at the SAIPEC 2020.

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CEOs from Sub-Saharan Africa’s NOCs, IOCs to speak at SAIPEC 2020

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EOs from Sub Saharan Africa’s National Oil Companies, International Oil Companies, will be speaking at the SAIPEC 2020. The 4th PETAN Sub Saharan Africa’s oil and gas conference provides a unparalleled opportunity to hear first-hand from CEOs and managing directors of NOCs, IOCs, indigenous oil companies and the whole value chain who come together to discuss new and emerging opportunities from across Sub Saharan Africa.

The confirmed speakers includes; Mr Bank-Anthony Okoroafor, Chairman, Petroleum Technology Association of Nigeria (PETAN), Federal Republic of Nigeria, Engr. Simbi Wabote – Executive Secretary – NCDMB, Federal Republic of Nigeria, Dr Ibrahima Diaby, Chief Executive Officer, Société Nationale d'Opérations Pétrolières de la Côte d'Ivoire (Petroci), Côte d'Ivoire, Mr Omar Mitha, CEO, ENH, Republic of Mozambique, Dr Kofi Koduah Sarpong. CEO, Ghana National Petroleum Corporation, Republic of Ghana, Mr Victor Ogwuda - Deputy Country Manager and Asset Manager - Equinor Nigeria, Federal Republic of Nigeria, Mr Mike Sangster, Managing Director, Total E&P, Federal Republic of Nigeria, Mr Bayo Ojulari, Managing Director, Shell Exploration and Production Company, Federal Republic of Nigeria, Mr Jeffrey Ewing, Managing Director, Chevron, Federal Republic of Nigeria, Mr Ahmadu Musa Kida, Deputy Managing Director, Total E&P Nigeria, Federal Republic of Nigeria, Dr. Ben Asante, Chief Executive Officer, Ghana Gas Company Limited, Republic of Ghana, Mr Omar Mitha, CEO, ENH, Mozambique – Rovuma LNG case study, Republic of Mozambique, Mr Jean Jacques Koum, Director of Gas, SNH, Republic of Cameroon, Mr Ahmadu Musa Kida, Deputy Managing Director, Total E&P Nigeria, Federal Republic of Nigeria, Mr Augusto Artur Antonio DA Silva, Secretary General, AGC - Senegal/Guinea Bissau, Mr. Immanuel Mulunga . Managing Director, NAMCOR, Namibia, Attorney Saifuah-Mai Gray, President and Chief Executive Officer, National Oil Company, Republic of Liberia, Mr Jide Agunbiade, Director, National Oilwell Varco, United States of America, Mr Walter Peviani, Managing Director, SAIPEM Contracting, Federal Republic of Nigeria, Mr Austin Avuru, Chief Executive Office, SEPLAT, Federal Republic of Nigeria, Mr Jeff Ewing, Chairman and Managing Director, Chevron, Federal Republic of Nigeria, Mr Bayo Ojulari, Managing Director, The Shell Nigeria Exploration and Production Company (SNEPco), Federal Republic of Nigeria, Dr Achille Ngwanza, Legal Consultant for APPO, Jus Africa SARL, Mr Braulio de Brito – President of the Board, Association of Contracted Companies of Angola Oil & Gas Industry (AECIPA), Angola, Mrs Jessica Kyeyune, National Content Expert, Uganda National Oil Company (UNOC) Uganda

INDUSTRY NEWS

TALKING POINT

Olusegun Obasanjo Nigeria's Former President

Collaboration Key to Sustainability for the oil and gas challenges on the continent over the technology will pave the way to sector in Africa coming decades. "The challenges that extending the life of oil and gas. "With

N

igeria's Former President, His Excellency Olusegun Obasanjo, flies the flag for a strong oil and gas future in Africa as he points to collaboration as the key to sustainability for the sector.

Nigeria is the second biggest oil-rich country in Africa, after Libya, and the commercialization of resources has been in the hands of the Nigerian National Petroleum Corporation (NNPC).

During his tenure, he was pivotal to Nigeria's oil activities as well as setting the nation on the path to democracy. He was president of Nigeria, Africa's most populous nation, from 1999 to 2007 overseeing Nigeria's first democratic handover of power and administrative reforms that accelerated economic growth. He is credited for his pivotal role in the regeneration and repositioning of the African Union, including helping to establish the New Partnership for Africa's Development (NEPAD) and the African Peer Review Mechanism (APRM), designed to promote democracy and good governance.

Despite being out of the office for 12 years H.E. Obasanjo is still a very influential and popular figure in the continent. And, he has been attending major industry events in Africa.

Facing up to challenging times Despite his optimism, H.E. Obasanjo admits that the sector faces some

we face in Africa are adequate investment in oil and gas, challenges of infrastructure, challenges of security, challenges of local content, challenges of regulation and challenges of predictability and stability," he explains.

"These are then the same in the oilproducing countries, the oil market and in the industry in general.

"These challenges are not challenges that only one country can deal with on its own. They are national challenges, they are regional challenges that they are also, what I would call oil and gas industry challenges, which we must handle together. Whatever the challenges we are facing as an industry must be able to disaggregate and find the best instrument, the best institution or the best organization to deal with the challenges."

The rising of renewables When it comes to the sustainability of the sector and the rising tide of renewable energy, he believes that despite the need to reduce carbon emissions the oil and gas sector still has an important role to play and a bright future in Africa. "The present challenges particularly include renewable resources growing into the areas where oil and gas have been predominant," he says. "I believe this should not really worry us too much. “For me, I believe for the foreseeable future there will be no renewable energy that will be as portable as oil and gas.

That is something that we can take as the advantage of to ensure oil and gas will still be there for the foreseeable future."

But H.E. Obasanjo believes that

technology, we have to make the production of oil and gas cheaper and if the production of oil and gas is cheaper, we will be able to get oil and gas going on for much longer than some people have predicted.

A future driven by technology "I believe that this is the area where the oil countries should really work together and take advantage of new technology that is part of the digitalization transformation such as artificial Intelligence. All the technology that is here now that were not available to us 15 years ago. They are there for use everywhere but are very important in the oil and gas industry. Of we bring this into the industry I believe that the industry and the fear that we have now will all be a thing of the past. The next 10 to 15 years may not be the way some people think.

As for the foreseeable future, H.E. Obasanjo points to collaboration as the key to sustainability for the sector. "I see collaborations at the national level, at the regional level, and at the industrial level, and of course, collaborating, at the global level," he says. "Collaboration and taking advantage of technology. That would make the life of the oil industry much longer than reduce the fear that some people have that renewable energy resources will make oil and gas a thing of the past. If we can surmount this challenge, then the future of oil and gas cannot be dictated by anybody except by us; the producers and the investors.

This will maintain oil and gas as an active resource for humanity."

INDUSTRY NEWS "A precondition is that the countries improve the underlying conditions: good political leadership, improving tax administration and government auditing, legal security, fighting corruption and democracy," he added.

Mueller signed several contracts, including a water supply contract in Tunisia, constructing a factory for making organic chocolate in Ghana and the expansion of a textile factory, also in Ghana, for producing sustainable fabric.

The latter project will create 1,500 new jobs.

In addition, a further 50 projects aim to create 70,000 jobs and 32,000 places for trainees in Africa.

German direct investment in Africa has more than doubled since 2015, according to Kristalina Georgieva official government figures.

Germany pledges more investment for African nations pursuing reforms

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hancellor Angela Merkel encouraged African countries to engage in political, financial and tax reforms, vowing that greater transparency would lead to increased German investment.

Speaking at an investors' conference in Berlin being held under the auspices of the Compact with Africa initiative of the G20, Merkel said Africa's more than 50 countries had a major role to play in solving global problems.

Egyptian President Abdel Fattah al-Sissi described Germany as a reliable strategic partner and called for greater investment in his country, noting that the African market had considerable potential.

As al-Sissi met German President Frank-Walter Steimeier on Monday, the German Foreign Ministry called for an improvement in the human rights situation in Egypt.

The Compact with Africa initiative is being conducted by the World Bank and the International Monetary Fund with strong German support. Several African leaders are attending the Berlin conference, along with German business leaders.

Merkel said the more than 50 countries in Africa and the nations of Europe faced many common challenges, including climate change, digitalization and migration.

A decision by African countries to work towards a free trade zone on the continent represented an ambitious agenda, the chancellor said, calling for a transition to self-supporting economic growth in Africa.

While much had improved, there were still many problems to resolve, Merkel said, mentioning the challenges posed by terrorism in the Sahel, as well as rapid population growth.

German business continues to see problems in making greater investment in Africa.

"Bureaucratic obstacles, corruption and security issues often prevent German companies from daring to take the first step into Africa," Martin Wansleben, the managing director of the German Chamber of Industry and Commerce (DIHK), said.

The aims of the compact include better conditions for trade and investment and a partnership of equals. A development investment fund with up to 1 billion euros (1.1 billion dollars) was set up at the last summit.

The German Development Ministry has signed reform partnerships with three of the Compact with Africa ??countries: Tunisia, Ghana and Ivory Coast.

"We are banking on individual responsibility, private investment, professional training and employment, so that Africa's youth has a future in Africa," Mueller said.

According to the Development Ministry, about half of the world's 20 fastest growing economies are in Africa; and the population there is expected to double by 2050 to reach 20 per cent of the global total.

Germany is the largest economy in the European Union (EU) and the fourth largest in the world after the USA, China, and Japan.

It is also the fourth largest country in the European Union after France, Spain, and Sweden. It shares its borders with nine countries, eight of which are EU member states. No other European country has more neighbours than Germany. In the north, Germany has access to the North and Baltic Seas.

On the international level, Germany enjoys a very broad network of close contacts. It maintains diplomatic relations with almost 200 countries and is a member of all the important multilateral organisations and informal international coordination groups such as the "Group of Seven" (G7) and the "Group of Twenty" (G20). The Federal Foreign Office, which is based in Berlin. In total, Germany maintains 227 missions abroad. Together with its partners, Germany promotes peace, security, democracy, and human rights all over the world.

Germany is one of the countries with the highest employment rates in Europe and lowest youth unemployment percentage.

Recent GDP data showed that the German economy is expanding year-on-year. The German labour market also remained a bright spot.

An average of 44.8 million people were employed in Germany in 2018, the highest number in Europe's largest economy since reunification.

INDUSTRY NEWS

Africa to Double Natural Gas Production by 2040, Global Consumption to Double by 2050

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lobal natural gas use is projected to increase by 2050; replacing more traditional fossil fuels and facilitating an energy transition towards sustainable development.

Following this development, Africa's natural gas growth prospects will be highlighted at the upcoming Sub-Saharan Africa International Petroleum Exhibition & Conference scheduled to hold on 25 27 February, 2020, in Lagos.

According to the GECF’s Global Gas Outlook Model, natural gas will be the only hydrocarbon source to increase its share in the global energy mix, remaining the fastest-growing fossil fuel. GECF member countries currently represent 71% of natural gas reserves, 44% of marketed gas production, 55% of pipeline gas trade and 53% of LNG trade globally.

H.E. Gabriel Mbaga Obiang Lima, Minister of Mines and Hydrocarbons of Equatorial Guinea said: “Natural gas will continue to be in demand and will help us meet the objectives of sustainable development and the energy transition for our country, for Africa and for the world. We are working on the gradual implementation and exploration of various gas fields. All of the work that we are doing is in line with

the policies that the international community is asking us to have for fossil fuels. We want to protect the environment and provide for the needs of remote communities in rural Africa.”

The African continent is set to increase its presence in the global energy sphere, more than doubling its natural gas production by 2040 and altering the global energy supply mix in the process. Africa will contribute as much as 9.2% to global natural gas production by 2040, resulting in an expansion from 255 bcm to more than 505 bcm and corresponding to a compound average annual growth rate of 3.4%.

In West Africa, Nigeria is set to advance its gas plans as the Honorable Minister of State for Petroleum Resources, H.E. Chief Timipre Sylva, has declared 2020 as the Year of Gas for the West African Nation. Chief Sylva is showing leadership and commitment. So far, he has proven himself to be the leader that Nigeria needs to develop new LPG and LNG industries that will take the country to the next level of development, not only economically speaking, but socially, environmentally, humanly.

Nigeria has an estimated 200 trillion cubic feet of gas reserves. With the right policies,

it could change the face of the country completely. It could give light to the people, it could power major industries, releasing them from the handicapping dependency on diesel generators, it could relinquish the country from its dependency on imported fuel for power and heat, it could create new opportunities for job creation and industrial development, it could take millions of people out of poverty. Moreso, strong domestic gas and gas-based industries could help boost intra-African trade, create new synergies with our neighbours, boost integration of power generation networks, establish new partnerships, even contribute to peace.

However, Nigeria is in a prime position to truly enact change and be a beacon to others by showing leadership and resolve. It is the continent’s biggest economy and has the continent’s biggest reserves of hydrocarbons, both oil and gas. NNPC already works with some of the best major IOCs and the country has Africa’s best and most developed indigenous exploration and production capabilities.

Fur t h e r , S A I PEC w i l l p r o v i d e th e opportunity for African countries to gain insights on new approaches to Sub-Saharan Africa's Gas industry, Gas Monetization and the importance of LNG and Gas to Power Projects.

INDUSTRY NEWS

Stability is key for supermajor investment in Africa - IOCs

decisions expected soon, one of which is Greater Tortue Ahmeyim in Mauritania and Senegal.”

So why is BP focusing so strongly in Africa?

“First, is that Africa provides opportunity for growth,” Peijs adds. “Demand for energy in Africa is well ahead of the world average, populations are growing, economies are advancing, the production of energy is growing even more strongly. Looking ahead the forecast for energy production in Africa is likely to grow by around 60% by 2040, almost twice the global rate.

“The second reason companies invest in Africa is that it provides opportunities for competitive Evy Maffini partnerships. Since the oil price crash in 2014, our industry has become much more efficient, much more disciplined, more selective on invested capital. We are all competing on a global scale but in Africa we have found several countries providing conditions for investments.

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lthough it may appear that much of the exploration activity in Africa is driven by smaller independents, the supermajors still have a significant role to play. In recognition of the importance of the market these supermajors were all well represented by senior executives at major industry event in Africa. The key message they delivered was that they were ready to invest further in the region but were looking for investment opportunities that could offer them assurance in terms of fiscal and political stability.

Searching for stable fiscal regimes When it comes to success in Africa, Pam Darwin, vice president Africa Exxon Mobil admits that there is no silver bullet, but one thing that is crucial going forwards is access to capital. “Our industry must continue to strive to meet energy demand for reducing environmental impact,” she said. “To do that we face competition for capital. All our efforts take capital and the competition is greater than ever.”

The key she explains is stable and attractive fiscal regimes; where these are present investments are occurring.

“There's a clear message from the United States where investment in the shale industry or the shale revolution as they call it has increased dramatically since 2005,” she adds. “As a consequence, US liquid production has more than doubled over ten years, generating billions of dollars. In contrast, over the last ten years, African liquid production has steadily decreased. In order to tap Africa's immense reserves, commercial terms

must be in place to draw those investments.

“Investment also needs to focus on making communities strong, this is really important for us as a company. We fund programmes and training, education, and women's empowerment along with health issues such as malaria. We've invested nearly $4 billion since 2000 in these kinds of programmes, over a billion just in education, and 120 million in women's economic empowerment.”

BP growing on a rich heritage According to Jasper Peijs, exploration vice president Africa, BP, Africa has been very important to BP and perhaps BP is important to Africa as well. He explains that BP’s current activity and presence is right across the continent of Africa. “We have a strong multi decade positions in Angola, Egypt and Algeria, where we are currently producing 400,000 barrels a day.”

When it comes to a positive environment for investment, Peijs points to Angola as a case in point. “I'm happy to recognise the positive changes the Angolan Government has made,” he says. “They are now incentivising investment again and we as BP have taken notice. We've extended the licencing for block 15 and 18 and created a joint venture to develop gas fields.

But Angola is not alone, you see lots of positive changes across the continent and that is why our investment in Africa is growing. Since 2016, we have delivered seven major projects and eight scheduled to come online by the end of the year. These are in Algeria, Angola, and Egypt, and the next tranche of major projects have already been sanctioned with the final investment

Glacier makes appointment in Norway to grow local business

“And then thirdly, is that Africa provides opportunities for long term; as well as having a growing energy consumption and production, economic development is driving up levels of skills and capabilities across the continents.

These are human resources coming together.

So, the great untapped potential of Africa in every sense.”

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Building on success in Angola One man new to the challenges of the continent is Mike Sangster, MD Total E&P Nigeria, who has recently taken over the leadership of Total exploration and production in Nigeria. “There are four main technologies that we need to be strong in to succeed – deepwater, LNG, petrochemicals, and lubricants. Here in Africa, we are very much present with three of those four technologies with deepwater and energy as well as retailer and lubricants on the downstream side. We are the leading integrated major in Africa, we are present in 43 countries across the continent, all the way across the value chain from the upstream, the midstream and downstream “Almost 20% of our production last year came from it came from Africa, and 16% of our reserves are still in Africa. We are currently investing more than one third of our exploration budget in Africa. We operate 11 FPSOs across the continent. The downstream also is going to come in Africa. We have almost four and a half thousand service stations across all the different countries, and about 18% of market share.”

One of the recent projects that Total sanctioned was the Kaombo Project in Angola, which features two FPSOs each with a capacity of 115,000 barrels a day, one of which started producing in the middle of last year, and the second one began earlier this year. “We are producing close to capacity of 230,000 barrels a day, so it is a major achievement for the company in the country.

INDUSTRY NEWS “In Angola there are a new wave of developments coming along as well, supported by attractive fiscal terms. In Angola recently we have seen some good initiatives from the government for the industry. And you can see that industry is responding by investing in low-cost, short-cycle projects such as subsea tie backs to existing facilities, and infill drilling.”

Unlocking Africa’s potential So, what does it take to unlock Africans countries’ economic potential? Colette Hirstius, vice president exploration Middle East & Africa, Shell explains that the industry faces unique challenges and opportunities. “These are often driven by geology, the maturity of the industries and in the case of customer facing businesses, the size and

structure of the market,” she explains.

“Some of these challenges include the lack of infrastructure, security issues, unstable fiscal and regulatory environments and limited access to energy.”

The answer to this is a long-term vision for each country, and long-term partnerships between the industry and government built on trust and commitment. “These will be critical elements for success,” she adds.

“Shell believes strongly in partnerships and that everyone has their role to play, the role of government is all about creating an enabling environment that encourages the industry to invest. This includes developing and communicating a clear energy strategy.

As well as creating strong, effective, and predictable, regulatory and fiscal regimes along with respecting the sanctity of governance and contracts and providing a

secure operating environment. And lastly, embedding transparent and clean business practices. For industry to deliver its part by conducting activities in a sustainable manner, which means being safe and environmentally and socially responsible.

“Companies should build local capabilities and capacity, develop local value chains to maximise competitive opportunities for local economies and, of course, promote innovation and technology. Shell strongly believes that building local capacity and capability is key for helping Africa to achieve its full potential. And it's one of our clear focus areas.”

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Market access and cooperation will unlock opportunities in Africa’s energy sector

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frica’s energy sector is a catalyst for growth and development across the continent. Industry and investors need to stay abreast of the high-speed advances in the energy landscape.

Recently, the African Energy Chamber (AEC) launched its first annual African Energy Outlook for 2020. The report, compiled to provide key insight on what sub-Saharan Africa’s oil and gas industry can expect to see next year, also doubles as an overview of the role the energy sector stands to play in developing competing economies.

Though the continent’s oil and gas sector was significantly impacted by the oil price crash, 2019 has proven to be a year of recovery for many African economies. With many continuing works on projects that were previously halted or cancelled, some developing new large-scale projects and others working to increase their exploration and production activities; the continent is undoubtedly poised to see accelerated growth in the years to come.

To this, in the African Energy Outlook 2020, the AEC showcases key economies and projects that are set to transform the energy landscape, placing the sector at the center of economic growth. In outlining major projects and economies to look out for

in 2020, the Outlook features highlights on announce oil projects in Angola, Ghana, Senegal and Nigeria as well as announced gas projects in Mauritania, Congo Republic, Ethiopia, South Africa and Cameroon.

that, “Lessons have to be learned on how to negotiate transnational infrastructure deals and 2020 will show if African nations have learned how to cooperate better for the benefit of all.”

In unlocking the next phase of transformation for the sector, the report insists the market access and intra-Africa cooperation will be critical, particularly in oil and gas pipeline and infrastructure projects.

“Next year, we need to see continued progress. We all understand what we have on our hands, now we must build environments that will not only attract investors but keep them for the long-term,” said NJ Ayuk, Executive Chairman of the African Energy chamber. “That is going to be our main challenge, ensuring policy certainty, political stability, favourable environments and matching returns.”

“Market access is increasingly on the agenda of existing and upcoming African producers of oil and gas, with several cross-country oil and natural gas pipelines in the works to unlock billions of dollars,” it says. Noting

INDUSTRY NEWS

Norwegian Ambassador to Nigeria, Jens-Petter Says Investment in New Technology, key to Increase in Nigeria’s Oil Output

because any Nigerian manufacturer cannot run in a competitive way on generators.

By Ayobami Adedinni

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he Norwegian Ambassador to Nigeria, Jens Peter Kjemprud has said that investment in new technology could help the nation’s oil and gas sector to receive the needed boost in its output.

The Ambassador said although Nigeria acquires lot of high technology for its offshore subsea sector from Norway, investments need to be made to improve the quality and efficiency of its oil and gas industry.

In his words, “Nigeria acquires a lot of high technology for the offshore subsea sector from Norway. More importantly, we have common interest and benefit in improving the oil sector.

“For instance, from certain oil fields you can only extract 20 per cent but with the use of new technology, you can

increase that to 50 per cent, although you need to make investments in this new kind of technology and that’s where we are more advanced.

“These are investments made for improving the quality and efficiency of the Nigerian oil and gas sector.

“As I said during the Oil conference (NOG 2019), it’s not only the size of the Nigerian oil sector but also about utilizing and making it more efficient,” he said.

Speaking further, he noted that the power sector needs to be developed for Nigerian manufacturers to be competitive and remain in business.

He said, “One important thing I have been focusing on since my assumption in Nigeria is Nigeria to develop its electricity sector

“You have huge potential in renewable energy such as hydro, solar and to some extent wind power. What we did was to develop our power sector.

“We produce 36,500 MW for 5 million people. Nigeria produces 3,650 MW which is one tenth, for 200 million people. For me, the most important thing to change in Nigeria is therefore the power sector. If you look around the world, the key is to have stable and cheap power delivered to the industries and to the people.

“It will expand productivity and profits of company and satisfy people’s demands.

Now, with the AFCTA, if the Nigerian manufacturing industries should expand, it would need to have that efficient power sector.

“A lot of African countries have cheap power. If Nigeria does not have it, it won’t be competitive. It will take a few years for the agreement to come into effect but before that, Nigeria needs to get the power sector in order, ” he added.

Kristalina Georgieva

NCDMB, PETAN team up to host the African Content Series at SAIPEC 2020 As an important step, in the development of local content, the Nigerian Content Development Monitoring Board (NCDMB) and the Petroleum Technology Association of Nigeria will be collaborating to host the African Content Series, as part of the Sub Saharan Africa International Petroleum Exhibition and Conference (SAIPEC) in Lagos 25-27th February 2020.

The SAIPEC African Content Series which will take place on 27th February, will focus on African oil producing countries and the necessity of

economic diversification and local content evolution. It will address the opportunities in the successful implementation of local content across a series of discussions from heads of NOC’s, IOC’s, independent and indigenous oil and gas companies throughout the oil and gas value chain.

The Executive Secretary of NCDMB, Engr. Simbi Wabote commented: "Local content collaboration is paramount, NCDMB is leading the way across Africa when it comes to local content. We need to ensure our targets are continually met and carry on demonstrating to Africa that the NCDMB is ensuring coming operate in Nigeria with local content at the forefront of their business. I look forward to showcasing further developments at next year's event” In addition to this, and marking its 10th anniversary in 2020, NCDMB will also be showcasing the significant work it has undertaken in developing local content over the last decade.

LOCAL CONTENT chase these opportunities within their strength.

"We are also working with PETAN, which is an amalgamation of indigenous oil and gas service providers to see how we can bring them together to use their strength to pursue opportunities in the industry.

"This collaboration isn't just between the service providers but we are also working to collaborate with other sectors, government institutions to get their support to ease the activities of most of the service providers.

"For instance, we have a very firm collaborative agreement with NIMASA, Nigerian Immigration, Customs, Oil and Gas Free Trade Zone Authority (OGTZA), NNPC, NAPIMS, DPR, such that oil the challenges the service providers encounters, we can Kristalina Georgieva jointly resolve the challenges.

NCDMB takes local content to new heights in Africa

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he Executive Secretary of NCDMB, Engr. Simbi Kesiye Wabote has called for local content collaboration across all African countries. The Nigerian Content Development and Monitoring Board (NCDMB) is leading the way across Africa on local content development in the oil and gas industry.

In his words, "Local content collaboration is paramount; NCDMB is leading the way across Africa when it comes to local content. We need to ensure our targets are continually met and carry on demonstrating to Africa that the NCDMB is ensuring companies operate in Nigeria with local content at the forefront of their business, I look forward to showcasing further developments at next years event."

Since the inception of the NOGICD Act enacted in 2010, NCDMB is at the forefront of facilitating local capacity development and ensuring that the execution of large components of any project is domiciled in Nigeria.

According to him, the Nigerian oil and gas industry will between now and year 2027 aspire to domesticate the full capacity and capability required for the integration of Floating Production Storage and Offloading vessels (FPSO).

The new target for the industry follows from the successful completion of the Total's Egina FPSO, the first time these feats would ever happen in Nigeria. The FPSO is the biggest component of deepwater oil and gas project and the fabrication and integration of the

modules at any location spurs multidimensional development and creates thousands of jobs.

Today, reference is being made to Total as the industry benchmark for the Nigerian content, given its significant support and investment in local content development through major oil and gas projects such as Egina projects.

Wabote hinted that in the past two years, about $20 billion has been invested in the Nigerian oil and gas sector.

"In the next two years, we are looking at another $25 billion into the oil and gas sector of Nigeria.

"Nigerian Federal Government has created an enabling environment for doing business more efficiently in Nigeria.

"Almost 80 percent of the contracts awarded in the oil & gas industry are awarded to local contractors in the Nigerian oil and gas sector.

"That gives you a significant level of penetration as no international company without a local affiliate is allowed to take up contracts in the Nigerian oil and gas sector.

"If you go through some of the objectives of Project 100, it is geared towards achieving collaborations across the oil and gas industry. Some of it also includes, how local players can merge themselves to pursue bigger opportunities. The local players all want to go for the bigger opportunities but they don't have the capacity. But, if they collaborate with others they will be able to

"In terms of engaging the oil and gas communities, it has always been the major topic of how do you contribute to the oil and gas communities.

"We signed up for the Community Content Policy in which any project opportunities that are happening in any community there are scopes that are marked for the community contractors. And, opportunities for employment for the community people are spelled out clearly on the Nigerian Content Plan which is very important.

"We have also established the Community Contractor Funding which is an avenue to help them access single digit interest loan for funding of their opportunities and the interest is just about 5 percent with a five years payment period," he added.

Moreso, NCDMB has produced a Compendium of Nigerian Content Opportunities. The Compendium contains all the project opportunities as well as local content specific opportunities that will enable industry stakeholders and investors to see the opportunities available within the next five years in the oil and gas sector of Nigeria.

The Compendium also contains over 80 listed projects and opportunities. The estimated value of all the projects and opportunities highlighted in it is over $100 million. Compendium provides a collection of industry opportunities that will guide the Nigerian oil & gas entrepreneurs to pursue specific opportunities in the industry based on their capacity which will also help them measure the level of achievements attained on the listed opportunities from time to time.

According to NCDMB, the compendium will be updated every two years to enable stakeholders in the industry to be aware of what is coming their way as a lack of information has been one of the major challenges of local businesses.

LOCAL CONTENT

H

e began his career with Shell Petroleum Development Company (SPDC) in 1995 and later joined BJ Services two years after.

He worked with BJ Services for over 12 years, rising to the position of a Country Manager for the pipeline services from 2001 to 2009. Engr. Obidike Nelson Uzu is a Petroleum engineer and an administrator. Following the enactment of the Local Content law in the Nigerian oil and gas industry in 2010, he established Global Process & Pipeline Services Limited with the aim to take advantage of the opportunities he believed the law would create for Nigerians. Hear him: " After the enactment of the Local Content Law 2010, I realized that it was going to create a big opportunity for local participation, hence I took that positive initiative to start Global Process & Pipeline Services even when the company barely had anything to leverage on as asset."

Speaking on the extent to which the Act has helped his company, he says," Before now we were not even given the opportunity to come close to the door not to talk of competing. Nobody would have recognised that we can do this.

The Local Content Act has given us the opportunity to say that we can." He thinks that what his company and other Nigerian service Companies are doing within the oil and gas industry now, may not have been possible 20 years ago, but for the Local Content law.

GPPS was awarded early this year in Abuja as the best pipeline servicing company in Nigeria at the 2019 Nigerian International Petroleum Summit (NIPS). This is just one of the 'miracles' of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act. In the past nine years following the enactment of the NOGICD Act, numerous opportunities have been created for Nigerians in the oil and gas space, resulting in increase in human capacity development, retention of capital in-country and job creation, especially for the teeming youth population in the country.

Prior to the enactment of the Act in 2010, the Nigerian oil industry was literary the exclusive preserve of the International Oil Companies (IOCs) and other foreign companies in areas ranging from exploration and production, trading as well as service operations.

According to reports in 2008, even though the oil and gas industry accounted for 90 percent of the country's revenue, it contributed less

Analysis: Assessing the Nine Years Implementation of NOGICD Act than 38 percent to the Nation’s Gross Domestic Product (GDP).

This was because of the absence of local capacity in the industry, which made it difficult for the country to retain a significant percentage of about $18 billion, as of then, yearly average industry spend.

Most of the the local strategic positions were largely dominated by expatriates. As a result, most of the industry’s lucrative contracts were carried out in foreign fabrication yards, ultimately leading to adverse effects on labour creation and the growth of the domestic economy as a whole.

The Central Bank of Nigeria (CBN) 2011 Annual Report of Sectoral Contribution to Growth Rates of GDP at 1990 Constant Basic Prices, shows that crude oil contributed -0.1, -0.9, 0.1, 0.8 and -0.1 to the GDP in 2007, 2008, 2009, 2010 and 2011 respectively.

By Ikenna Omeje engineering, and procurement were done abroad, resulting in estimated capital flight of US$380 billion and over two million jobs lost in 50 years of our hydrocarbon history.

Our vigorous implementation of the Act has reversed the trend: from less than five percent in-country value retention in 2010 to 28 percent, marked by a seismic shift from negligible local Content activity in earlier deepwater projects to over 60 percent domestication and domiciliation of work and services in Egina."

Key Components of the Act Section 1 and 2 of the Act state: "Notwithstanding anything to the contrary contained in the Petroleum Act or in any other enactment or law, the provisions of this Act shall apply to all matters pertaining to Nigerian content in respect of all operations or transactions carried out in or connected with the Nigerian oil and gas industry.

Efforts by previous administrations to introduce local content policies had challenges largely because of the absence of an appropriate legal framework to drive such policies. It was in a bid to address these challenges that the 2010 NOGICD Act was signed into law on April 22nd 2010, with the aim to increase indigenous participation in the oil and gas industry by prescribing minimum thresholds for the use of local services and materials and promote transfer of technology and skill to Nigerian labour in the industry.

"All regulatory authorities, operators, contractors, subcontractors, alliance partners and other entities involved in any project, operation, activity or transaction in the Nigerian oil and gas industry shall consider Nigerian content as an important element of their overall project development and management philosophy for project execution.”

The Executive Secretary of Nigerian Content Development and Monitoring Board (NCDMB), Engr. Simbi Wabote captures it this way: " Before the enactment of the Nigerian Oil and Gas Industry Content Development Act, all fabrication,

Section 3 (1) states that local oil and gas companies in the country will be given first consideration in the award of oil blocks, oilfield licences and in all projects. In section 3 (2), it says that Nigerian service companies that demonstrate ownership of

LOCAL CONTENT equipment, have Nigerian dominated workforce and the capacity to execute projects, will be given exclusive consideration in award of contracts.

Section 3(3) notes that compliance to the Act will be the primary criteria for the award of licences, permits and bidding for exploration, production, transportation and development in the country's oil and gas industry.

"3.-(1) Nigerian independent operators shall be given first consideration in the award of oil blocks, oil field licences, oil lifting licences and in all projects for which contract is to be awarded in the Nigerian oil and gas industry subject to the fulfilment of such conditions as may be specified by the Minister. "(2) There shall be exclusive consideration to Nigerian indigenous service companies which demonstrate ownership of equipment, Nigerian personnel and capacity to execute such work to bid on land and swamp operating areas of the Nigerian oil and gas industry for contracts and services contained in the Schedule to this Act. "(3) Compliance with the provisions of this Act and promotion of Nigerian content development shall be a major criterion for award of licences, permits and any other interest in bidding for Oil exploration, production, transportation and development or any other operations in Nigerian Oil and Gas industry," the Act reads.

According to Section 7, "In the bidding for any licence, permit or interest and before carrying out any project in the Nigerian oil and gas industry, an operator shall submit a Nigerian Content Plan ("the Plan") to the Board demonstrating compliance with the Nigerian content requirements of this Act." In the last nine years, the vigorous efforts of NCDMB to ensure regimented compliance to the Act by companies through rigorous implementation of the Act, has in no small measure led to economic revolution in the Nigerian oil and gas industry.

Major Challenges of the Act According to Jean Balouga, an energy economist, in his academic paper, "Nigerian Local Content: Challenges and Prospects", Nigerian banks do not have the required capacity to energy financing.

"Nigerian banks lack the financial base to make any meaningful impact on local content development. The biggest Nigerian banks are tiny banks when it comes to energy financing.

Most Nigerian banks operate in dilemmaladen territory as most indigenous contractors have no proper business structure. Others are not really in the business because more often than not the person who gets the contract is not the one looking for finance. Other obstacles are a thin industrial base, lack of adequate power, water and other infrastructure to support an expanded manufacturing base, lack of small and medium-sized enterprises and an underdeveloped capital market" He adds that, "Other problems of local companies revolve around executive capacity and critical mass with technical and financial wherewithal. Generally, most local companies are small, fragmented and incapable of packaging or attracting loans.

Few of them can deliver turnkey projects without resorting to some form of partnership agreement for equipment, expertise or technical support.

"There exists the so-called “Knowing-Doing gap” in Nigeria, that is the disconnect that exists between policy formulation and policy implementation. This term describes the absence of a critical link between strategy and action. Public policy initiatives and actions in Nigeria have persistently been incapacitated by this gap, with many government programmes and projects ending in downright failure. Inadequate think through, weak institutional capacity, lack of political will to carry through change, inconsistency in govern? ment policies, lack of support from relevant stakeholders and corruption are some of the causes of this gap." Alhough, a lot has changed positively between 2012 when this article was published by the International Association for Energy Economics and now.

Expressing his view on the enforcement mechanism of the Act, a Petroleum Tax and Fiscal Systems Specialist, Bar. Naboth Onyesoh, in one of his articles, is of the opinion that enforcement mechanism is essential and suggests the adoption of administrative penalty as against the current criminal penalty as stipulated in Section 68 of the Act. He describes criminal penalty as a lengthy excercise that demands lots of evidence to nail violators of the Act. In his words: "Enforcement is an essential component of regulatory function. The mechanism for enforcement determines the temper of a law and the behaviour of those regulated. Legal enforcement is either criminal or civil or a combination of the two.

Regulatory sanctions are, therefore, divided into criminal penalty or administrative (civil) penalty.

"The sanctions prescribed under section 68 of the Nigerian Oil and Gas Industry Content Development Act 2010 (‘the Act”) are

criminal in nature. The section describes breach of the Act as an offence punishable upon conviction by fine or project cancellation. That’s a problem.

"Depicting breach of the Act as an offence is troubling and gives multiple reasons to be concerned. First, the implication is that the penalties stipulated thereunder can only kick in after conviction. Yes, conviction by a court of competent jurisdiction based on strict rules of evidence and proof beyond reasonable doubts. Thus, criminal law remedies are hard to obtain. They entail diligent prosecution, high evidentiary requirements and strict proof with presumption of innocence in favour of the alleged offender."

In recent years, administrative penalty has become very popular among countries in the developed world. For instance, Canada chose administrative monetary penalty (AMP) to drive its Smart Regulation Initiative. Other countries like Australia, Germany, Netherlands and the United States have adopted administrative monetary penalties because it's more beneficial than criminal penalty. Also, in the United Kingdom and the Flemish region, which used to rely solely on criminal penalty to enforce environmental regulations, have since 2009 adopted the use of administrative fines to complement criminal penalties.

Onyesoh, however, notes that administrative fines are not new in Nigeria, using sections 15 & 16 of Nigerian Communications (Enforcement Regulation) 2004 made pursuant to section 70 (1) (c) & (e) of the Nigerian Communications Act 2003, which gives the Commission the power to impose monetary penalties on erring operators as an example.

According to him, the same is true of section 6 (2) & (3) of the National Oil Spills Detection and Response Agency (Establishment) Act 2005, which allows NOSDRA to impose monetary penalties for specified environmental infractions and omissions. The Civil Aviation Act gives similar power to the Nigerian Civil Aviation Authority (NCAA) under section 27 (1) – (3).

In his argument for a review of Section 68 of the Act, Onyesoh says,"The point is that criminal penalty is severely limited. It is incapable of providing efficient and effective enforcement of Nigerian content requirements. This is the reason to rethink the current enforcement mechanism under the Act, now that it is up for review. The proposal is for the National Assembly to insert a new clause after section 68 or a subsection empowering NCDMB to make regulations to sanction infractions (e.g. failure to obtain approvals, failure to remit NCDF levy, expatriate quota breaches, failure to make statutory returns, etc.), through administrative fines. The extreme sanction of project

LOCAL CONTENT cancellation might still be left for judicial conviction. It is submitted that a sensible combination of administrative and criminal penalty will engender better compliance, cooperation and timely rectification by the regulated community.�

Also, some indigenous players in oil and gas industry have pointed out that the Law has not checked the issue of rate discrimination in the industry.

According to them, when Nigerian companies bid for jobs, the International Oil Companies (IOCs) expect that they should be charging very low, but the foreign players like engineers bidding for such contracts be demanding four times more than what the Nigerian engineer is being paid, and the IOCs would oblige this request, which when they question why, IOCs say is because they are expatriates.

In the area of capacity, training and development, many operating and service companies still apply for substantial expatriate quota approvals from the NCDMB, claiming that requisite capacities are not available incountry. Also, many of these companies keep sending their staff overseas for routine trainings, a situation which the President, Oil and Gas Trainers Association of Nigeria (OGTAN), Dr. Mayowa Afe, described as an indictment on Nigeria as a country in an interview with Local Content Digest, a quarterly magazine of the NCDMB. "It is an indictment on Nigeria as a country. Take , for example, a Nigerian company with a Nigerian instructor going to Dubai to train. Is that a foreign training or indictment of our members?

No! Many workers prefer overseas training because of the estacode and shopping and not because of any additional training they will get." He added,"Our regulatory framework has to be strengthened to monitor this Act." Perspectives of Industry Players on the Act Giving his assessment of the Act, the Chief Executive officer of Oilserv Group, Engr. Emeka Okwuosa is of the view that the Act has helped to institutionalise the development of Sustainable local capacity, but emphasises the need for NCDMB to address the issue of contract awards to companies without capacity.

Hear him: " Overall, I would say the Nigerian Content Law has helped to institutionalise the development of Sustainable local capacity in the oil and gas industry.

"However, there is need to address the issues bordering on briefcase contractors who hide under the Local Content Law to harass fully . Nigerian companies that have built capacity. This harassment sometimes comes in the form of attempting to force wholly Nigerian companies to use their services even though these companies have full internal capacity to execute such scopes."

On her part, the Chief Executivr Officer of Lagos Deep Offshore Logistics (LADOL) base, Dr. Amy Jadesimi, believes that the Act has led to a revolution in the oil and gas industry in Nigeria, but points out the importance of spreading it beyond petroleum sector.

"I think that the Local Content Act has already changed the landscape for the oil and gas industry and it had such a positive impact. One of the first things we need to look at is how to spread that beyond the petroleum sector to other sectors; to the manufacturing sector, the technology sector, the fine art sector. The benefits of local content when it's properly applied and strictly enforced to the economy, are second to none. In other words, having correct local content could push economy into the G-29 just as it did for Brazil," she said recently in an exclusive interview with Majorwaves Energy Report.

The Chief Executive Officer of Solewant Group, a pipe/metals fabrication and coating company, Mr. Solomon Ewanehi, thinks NCDMB should increase the level of awareness regarding the Act to improve on it's implementation.

"Well, so far so good. However, improvements will come as more awareness is created. Indeed the Act came into existence some nine years ago, but not many of the players in the industry are aware of the full provisions. Awareness is a key component to improving the implementation of the Act by the NCDMB," he says while sharing his thoughts.

Leading her voice to the nine years implementation of the Act, the Chief Operating Officer, MicCom Cables and Wires, Mrs. Bokola Adubi, says that the Act has given Nigerians immeasurable advantage and leverage.

In her words: " The Local Content Act is probably one of the best decisions our legislature has taken on behalf of the country in the last few years. It would appear like that tiny piece of law was enacted for companies such as ours. To help help us Garner in-road into an otherwise very difficult industry to enter into. Today, the advantage and leverage we have through this law has been immeasurable."

Giving his perspective on the Act at the 2018 Practical Nigerian Conference (PCN) held in Yenagoa, Bayelsa State, the Chairman, Petroleum Technology Association of Nigeria (PETAN), Engr. Bank-Anthony Okoroafor gave some wow statistics to point out how impactful the implementation of the Act has had in the service end of the Nigerian oil and gas industry.

"Before the Nigerian Content Act, we had 27 service companies operating in Nigeria. At Last count, there were 287 service companies operating in Nigeria," he said. He noted that the implementation of the Act has led to a remarkable growth in the number of goods sourced in-country and has contributed to an increase in the training of Nigerians on the back of major oil and gas projects.

"When Usan deep water project was done, incountry training was 150,000 man-hours.

With Egina, it was 450,000 man-hours. In Engineering, Usan recorded 40,000 manhours but Egina had 1.167 million man-hours and we saw collaborations between Nigerian companies - NETCO, IESL and Delta Afrik," he said.

Way Forward NCDMB must find a way to address issues surrounding access to fund. Most Nigerian companies do not have the financial muscle to fund big contract. To this end, effort should be made to address financial challenges they face in trying to execute projects by reviewing Section 101 of the Act upward. This will ensure that NCDMB have enough fund to grant credit to these companies.

Section 104 (1-3) states: "A Fund to be known as the Nigerian Content Development Fund (the "Fund") is established for purposes of funding the implementation of Nigerian content development in the Nigeria oil and gas industry. "(2) The sum of one per cent of every contract awarded to any operator, contractor, subcontractor, alliance partner or any other entity involved in any project, operation, activity or transaction in the upstream sector of the Nigeria oil and gas industry shall be deducted at source and paid into the Fund. "(3) The Fund shall be managed by the Nigerian Content Development Board and employed for projects, programmes, and activities directed at increasing Nigerian content in the oil and gas industry."

Going by the capital intensive nature of executing contracts and investing in the oil and gas industry, the one percent deduction according to the Act is no longer realistic, which is why NCDMB as not just a regulatory body, but also an intervention body, should sponsor a bill to amend Section 104.

LOCAL CONTENT

It is also important for the NCDMB to partner with the Central Bank of Nigeria to ensure that Nigerian banks begin to engage in long term financing of projects in oil and gas industry. This will help indigenous exploration and production companies not to lose their licences due to their inability to develop their fields. Speaking on the challenges of indigenous E&P companies in this regard, the Head, Energy Covering Downstream and International Oil Trading within Corporate Banking Directorate, First Bank of Nigeria, Oluwatoyin Aina says," Hedging is a major requirement for most Reserve Based Lending financing as it provides a buffer to falling prices. Commercial banks generally are not positioned to take exploration risk due to the nature of our foreign currency capital which isn’t long term . Our long term financing are usually in local currency. For foreign currencies, banks borrow the funds at an expensive cost and the tenure is usually short."

She admonished local E&P companies in the country to look outside of Nigeria while seeking credit facility to fund their projects, like targeting African Finance Corporation (AFC) and International Finance Corporation (IFC) for fund.

However, the recent pledge to amend the NOGICD Act by the Chairman of the House of Representatives Committee on Nigerian Content Development and Monitoring, Rt. Honorable Legor Idagbo at the

inaugural meeting of the Committee with the NCDMB held at the National Assembly recently if fulfilled, will help the country a great deal in addressing some of the challenges confronting the implementation of the Act. In 2017, NCDMB launched a 10-year roadmap aimed at domiciliating skills and competence in the Nigerian oil and gas industry up to 70 percent by 2027. Speaking at a summit in the twilight of 2018, Wabote said," We are determined to grow Nigerian content to 70 percent within 10 years. The target includes generating 300,000 jobs, retain $14 billion in-country from the industry's annual spend, engender manufacturing and increase oil and gas contribution to the the nation's GDP." The annual spend in the industry is currently about $20 billion.

To achieve this noble target, the Board in the Q2 of 2018 embarked on fostering collaborations and synergies critical to the realization of the 10-year rolling plan. The most fundamental of the collaborations was the one with the Nigerian Stock Exchange (NSE), in which the Board advocated for a shift in the listing of companies on the Exchange. The Board advocated listing by upstream and midstream oil and gas companies to add more value to the country's hydrocarbon resources incountry.

Speaking on the advocacy, Wabote said," No doubt, the listing of upstream companies, refineries, petrochemical industries, fertilizer companies and allied firms in the LPG/CNG value chain on the

Exchange will spur cross-sectorial linkage and economic buoyancy.�

It is also important for the Board to take the issue of Skill Gap Audit seriously. The current efforts by OGTAN, with support of the NCDMB, in championing a Data Gathering Strategy and Categorisation of OGTAN members outside the proposed NOGOS effort, is a welcome development and should be sustained. Speaking on this, Dr. Afe says," This will help to identify these seemingly non-existent capacities and equip Nigerians with the skills" adding that," It will further provide a veritable Skills Gap Analysis and Needs Assessment Plan."

To a large extent, the implementation of the Act has helped the country to build capacity in various areas in the industry, increase retention of annual industry spend to about 30 percent and led to creation of jobs. It can be better if the scope of the plan amendment of the Act as Hon. Idagbo said at the House Committee inaugural meeting with NCDMB, is expanded to cover other sectors. This will ensure that Executive Order 5 yields the desired fruit and help the country to build capacity that will ensure the overall development of Nigeria.

EXCLUSIVE INTERVIEWS

Analysing our Operational Records Globally Mr. Morten Kelstrup talks with OGR on how technology combined with new business model will drive greater value for the oil & gas industry, and explaining how Maersk Drilling have been able to succeed with it. see in the industry, among other things establishing a shared vocabulary on safety and openly discussing which of the partners is best equipped to handle each of the many tasks involved in a drilling operation.

A few months ago, our Maersk Invincible rig on the Valhall field in Norway performed a 12conductor run 36% faster than estimated and with a 23% cost saving versus the budget. This definitely showcases the potential value of working closely together like we do in the Aker BP alliance.

Morten Kelstrup, Chief Operating Officer (COO), Maersk Drilling

OGR: Congratulations Mr. Morten Kelstrup for your new appointment as Chief Operating Officer of Maersk Drilling. What was your first impression when you were appointed as COO? Any surprises?

And how has being your previous experience working as Chief Commercial & Innovation Officer so far?

Morten: I have a background on the other side of the fence, so to speak, having previously worked on the operator side of the business. My goal has been to use this experience to facilitate a greater understanding of how Maersk Drilling as a drilling contractor can create maximum value for our customers, the operators and countries we engage with. The organizational changes we most recently performed is one more step in that direction, where we have merged our Technical, Commercial, Innovation and Operational functions into one joint Operations department which will take end-to-end responsibility for customer delivery and operational efficiency.

OGR: What is your action plans to strengthen Maersk Drilling Operational records?

Morten: I’m happy to say that Maersk Drilling already has an outstanding operational record, with a financial uptime in excess of 99% so far this year. This translates into highly efficient operations for our customers. One example is recent operations in Ghana where our drillships have executed campaigns more than 200 days ahead of schedule, in this way helping to bring down the time to first oil. We remain focused on combining operational excellence with technological and business model innovation to drive greater value creation for the customers.

OGR: Collaboration and Innovation is seen as a key driver for the oil and gas industry. Please could you highlight some of the strategic partnership at Maersk Drilling and the benefits to operators?

Morten: In the North Sea, we have entered into a major alliance with Aker BP and Halliburton. Within this alliance, we collaborate much closer than you used to

In addition, we have other kinds of strategic partnerships, such as you’ll find in connection with our West African operations where we have been very happy to team up with local partners on services including training and manning, and where we have also provided various kinds of integrated services to our customers.

We have also partnered up with the exploration company Seapulse. In this alliance, we will be responsible for delivering the full package of drilling services allowing Seapulse to focus on what they do best, namely finding oil. We will deliver these services in close cooperation with a few key partners allowing us to jointly optimize and eliminate waste in the drilling process. We see a significant upside in this area.

OGR: What are your solutions for the rapidly changing oil and gas sector, in terms of technology?

Mor ten: Ongoing development of technology has always been an important part of the drilling industry, and as a drilling contractor you must always listen to the customers’ needs when scoping the rigs and technologies of the future. With that said, I don’t believe technology is the solution all in itself. There is no doubt that we will see further digitalization and automation of drilling operations, but in my view, an important key to unlocking significant extra value in the industry lies in aligning incentives to be able to increase the focus on removing waste across the value chain. By ensuring that operators and contractors work together towards

EXCLUSIVE INTERVIEW

mutual goals and trust each other to cooperate towards the most efficient solutions, all involved parties will benefit.

OGR: What ways have your technologies help oil companies boost production and reduce cost?

Morten: As mentioned previously, it is not only technology but also technology combined with business model innovation that is making the difference. We at Maersk Drilling pride ourselves of the skills we have developed in the ultra-harsh North Sea environment, of course, and we have been able to successfully export this to drilling in other situations where cutting-edge skills and technology make a difference. For example, one of our drillships, Maersk Venturer, holds the world record for the deepest water depth ever drilled – 3,400m offshore Uruguay in 2016. But combining technological advances with a new approach to collaboration and aligning

incentives with the customers is what will unlock real value.

OGR: How does local content development impact your operations?

Morten: Local content development is an important part of our operations, since it’s a key part of creating shared value for our customers and the societies we engage with. In West Africa, for example, we have an ambition to engage in the conversation on how to collaborate across borders to build local capacity that benefits the region as a whole.

Our goal is to always do better than what is required of us in this arena. Local authorities will set minimum requirements for local content, but we want to go beyond that and include a higher ratio of local content than the bare minimum. I’m happy to say that we are succeeding in doing so, and one key factor in reaching that result is our focus on training local content via joint ventures with local partners and support for the institutions that are developing the country’s skills base. One recent example worth mentioning was when our drillship Maersk Voyager moved from Ghana to begin a new campaign in Equatorial Guinea.

After Maersk Voyager left Ghana, it only took three days before we were ready to start up operations in Equatorial Guinea with a crew including 46% Equatorial Guinean nationals.

OGR: What are the available services in your company for clients who have business enquiries or seeking opportunities?

Morten: Maersk Drilling is a drilling contractor which is specialized in operating under the most challenging conditions. Our history started in the harsh and ultra-harsh environment of the North Sea where physical conditions can be extremely challenging, and you must adhere to strict regulations to have license to operate. In addition, we now have a very flexible floater fleet which can operate from the shallowest to the deepest water depths, both of which present serious difficulties in their own way.

Based on this, our strategic direction is focused on seeking closer collaboration and operational alignment to create greater value for our customers, and as part of that stand ready to offer to orchestrate and deliver a diverse range of the additional services needed in a drilling campaign as it fits the individual customer.

Maersk Drilling secures major contract in AsianPacific market and UK North Sea

drillships in the Asian-Pacific market,” says Morten Kelstrup, COO of Maersk Drilling.

Maersk Viking is a high-spec ultradeepwater drillship which was delivered in 2013. In August this year, Maersk Viking completed its latest campaign in Ghana, which included a well drilled at an ultra-deepwater depth of 10,125 ft.

Moreso, Maersk Drilling has entered into a contract with Serica Energy UK Ltd. to drill a subsea development well at the Columbus Development in the Central part of the UK North Sea. The contract value is USD 8m.

M

aersk Drilling has secured a contract for the 7th generation drillship Maersk Viking which will be employed by the POSCO International Corporation, a Korean operator, for a threewell campaign offshore Myanmar. The contract is expected to commence at the end of 2019, with an estimated duration of 154 days. The value of the firm contract is USD 33m, including a mobilisation fee. An additional one-well option is included in the contract.

“We are very excited about having the opportunity to work together with the POSCO International Corporation and helping them achieve their goals. This campaign will enable us to showcase the nimbleness of our deepwater fleet, including the ability to move our floaters from one region to another and quickly start up new operations.

We look forward to demonstrating the capabilities of our 7th generation

The contract is expected to commence in Q4 2020, with an estimated duration of 70 days. The harsh environment jack-up rig to be used for the job has yet to be assigned.

Maersk Drilling owns and operates a fleet of 23 offshore rigs specialising in harsh environment and deepwater drilling operations. With more than 45 years of experience operating in the most challenging environments

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By Ndubuisi Micheal Obineme

F

or a very long time, the oil and gas industry has continued to be a fast generating asset for African countries and the major source of energy in this 21st century. Africa is seen as a 'Big Continent' with bigger prospects despite the challenges. The low oil price incident in 2014/15 was one of the hardest-hit to the region. Apart from that, tough operating and economic conditions, coupled with regulatory uncertainty, political instability and a lack of infrastructure has become a major challenge.

But, in view of all this, Africa still has an opportunity to further entrench the continent's position as the world's hottest oil and gas hub.

2019/2020 is very positive for Africa as it has entered a new era of energy prosperity. The year also holds a new set of dynamics and challenges set to influence the future of the industry, from presidential elections to megaprojects developments, amidst intensifying international competition.

Moreso, there's much to look forward to across the oil and gas value chain in Sub-Saharan Africa. There are a number of projects underway or in the preparatory phases – some of which are in progress, major developments set for Final Investment Decision (FID).

According to GlobalData, Seventy crude and natural gas projects are expected to start operations in Sub-Saharan Africa during 2019–2025.

The findings are laid bare in a 48-page report entitled, "H1 2019 Production and Capital Expenditure Outlook for Key Planned Upstream Projects in Sub-Saharan Africa – Nigeria Dominates Crude Production and Capex Outlook."

Industry Latest Updates Ø Wood Mackenzie forecast that deepwater investment to increase from $50 billion to a peak of nearly $60 billion by 2022. Ø Seventy crude and natural gas projects are expected to start operations in Sub-Saharan Africa during 2019–2025, according to GlobalData. Ø SAIPEC attracts over 6000 attendees, 650 delegates from across 36 countries, 104 exhibitors and 54 speakers, including 11 National Oil Companies, IOCs, CEO/MD's. Ø SAIPEC features a wealth of content for both strategically and technically minded companies seeking a full solution event. Ø Sub-Saharan Africa oil and gas industry is open for business especially in offshore exploration development.

SAIPEC TOP STORIES

Bank Anthony: The theme for SAIPEC 2020 will be ‘Oil and gas as an enabler for economic transformation in Sub-Saharan Africa’.

"We will be discussing critical issues affecting the oil and gas industry in Sub-Saharan Africa today and how to create value and use energy as an enabler for economic transformation, industrialisation and growth instead of as rent. We will assemble seasoned industry stakeholders and experts who will dissect this theme from their perspectives and experiences".

Bank-Anthony Okoroafor

In terms of the number of planned oil and gas projects, Nigeria leads among countries with eight projects, followed

by Mozambique and Chad with two projects each. In terms of announced projects, Nigeria again leads with 21 projects, followed by Angola with seven projects.

Major projects in sub-Saharan Africa are expected to contribute about 2.3 million barrels per day (mbd) of global crude and condensate production and about 9.6 billion cubic feet per day (bcfd) of global gas production in 2025.

In terms of total crude and condensate production from announced and planned projects in sub-Saharan Africa, Nigeria leads among countries contributing around 46% of the region's total crude production in 2025. The highest capital expenditure (Capex) spenders on key planned and announced projects, during the period 2019–2025, are expected to be Nigeria, Mozambique, and Angola.

More interesting, this article provides key recommendations from industry experts on ways of improving African oil and gas business and investment environments, strategic insights to positioning Africa's energy market for global opportunities.

However, a new platform has emerged

which serves as a connecting point, as well as a top-notch guide for government, industry players, stakeholders, and operators. Oil and Gas Republic in its investigative report has unearthed the SubSaharan Africa International Petroleum Exhibition and Conference (SAIPEC), as the only truly industry-led event, held in partnership with the country's petroleum sector.

Based on our findings, SAIPEC is the largest event in the region's oil and gas hub. It was previously known as West Africa International Petroleum Exhibition and Conference (WAIPEC), but it was rebranded to Sub-Saharan Africa International Petroleum Exhibition and Conference (SAIPEC) after several collective agreements between the steering committee and organizers of the event to attracting a much wider audience and broaden the event beyond West African region, but also to a much wider audience in Sub-Saharan Africa.

According to report, SAIPEC attracts over 6000 attendees, 650 delegates from across 36 countries, 104 exhibitors and 54 speakers, including 11 National Oil Companies, IOCs, CEO/MD's plus their delegations from Mozambique, Nigeria, Côte d'Ivoire, Senegal, Uganda, Angola, Cameroon, Ghana, Liberia, Equatorial Guinea and Gambia.

Following the successful editions, industry experts have raised critical issues that need

to be addressed in order to develop and nurture the region's oil and gas industry for economic transformation.

Industry experts also confirm that there are still unexplored offshore areas with huge potential for oil and gas. According to them, the challenge, of course, is that this new potential is mainly located at deepwater depths. And, as offshore hydrocarbon developments move deeper and into more complex areas, many technological challenges exist for operators and offshore engineering service providers.

Wood Mackenzie has forecasted that deepwater investment will increase from $50 billion to a peak of nearly $60 billion by 2022.

In the report, it estimated a 50% drop in the cost of developing new deepwater barrels since 2013, a drop driven primarily by lower rig costs, lower drilling times, and greater emphasis on efficient project execution.

While the average deepwater project saw 10% to 15% cost overruns from sanction to startup from 2006 to 2013, that figure dropped to 5% from 2014 to 2016. This has created a more favorable investment environment for operators and private equity in the near term.

To meet the growing energy demand, operators will require a favorable investment environment, collaboration, innovation & technology, and best practices to boost productivity and reduce costs on projects.

SAIPEC TOP STORIES Industry experts have said that the future of energy in Sub-Saharan Africa is bright especially with offshore exploration development, noting that African countries need to work together, focus more on collaborative measures and strategies that will position the region to compete globally.

In their words, "All the African countries should have a collaborative strategy and common ideas on ways to collaborate for the growth of the industry. There should also be delibrations focused more on collaborative strategies on human capacity development between African countries.

"African government should set practical steps on moving the collaboration forward. And, there should be a steering committee to do follow-ups on the action plans for every participating country and company.

and promotion of local content across all African countries.

promoting African content across SubSaharan Africa.

"Sustaining oil and gas production is not just about putting any kind of innovation, but having strategic innovations in place that will change the market dynamics.

"There should be a uniform local content criteria and guideline across Sub-Saharan Africa. Policies should be put in place to enabling a working local content space across Africa.

"PETAN should work closely with NCDMB and IOC to organize trade delegations to African countries, attend the exhibition and engage local service providers in those countries.

"ECOWAS needs to be at the forefront in the push for this innovation and collaboration with a key aim of doubling the trade level.

"APPO should be involved in all FORA of oil and gas decision making and processes.

"Local content should be seen as an economic pursuit, not a charitable venture and it should be backed up by-laws.

"PETAN should work with APPO to engage policymakers to improve mobility across the oil & gas exploration and producing countries in Africa, through seamless approval of visa on arrival at the airports," they concluded.

"There is a need for all African countries to come together and compete in a global capital investment market.

Improved transparency, efficiency, and stable investment is key to achieving it.

"Seek technological advancement and see other African countries as friends, not competitors.

"Updating skills sets and collaborate to educate key stakeholders on key judicial and security issues.

"There should be a working synergy between the government, companies, and host communities with a clear definition of the owner of the resources.

"There should be clearly circulated business laws and regulations of host countries to enable easy investment across the continent. There should be a policy for a certain amount of content coverage.

"African Independent and small E&P companies should have the privilege to bid for the oil blocks.

"The future is gas - therefore more African countries need to focus more on gas production and utilization.

"Infrastructural investment is strongly needed in the African oil and gas industry.

"A good R&D operating framework should be established that will provide funding on research. African government should invest in training; talent and skill retention.

"The use of language will improve synergy and collaboration to develop the industry.

The French-speaking countries should strive to learn English and the Englishspeaking countries should also try to learn French.

"African countries should form an oil and gas service providers association which will serve as a focal point for joint pursuit of objectives that will foster local and regional collaborations.

"There should also be the development of African content strategy and collaboration/partnership framework between regional service providers.

"Acceptance of African work experience as local qualifying work experience in other African countries is also important.

"APPO and AFRAA should work closely on

"There should be capacity development

PETAN has been the host of SAIPEC, and Africa's leading association of Indigenous, Technical Oilfield Service Companies in the upstream and downstream sectors of the oil and gas industry in Nigeria. Over the years, PETAN has been raising the local content bar very high, working closely with NCDMB and industry players to having more indigenous companies to take advantage of the enormous opportunities in the oil & gas industry, build FPSO's, Vessels, Rigs in Nigeria.

Since the signing of the Nigerian Oil & Gas Industry Content Development (NOGICD) Act in 2010, Nigerian Content has started to spring up again across the oil and gas value chain. The law mandated the Nigerian Content Development and Monitoring Board (NCDMB) to deepen the participation of Nigerians and indigenous companies in the oil and gas industry, and facilitating local capacity development and ensuring that the execution of large components of any project is domiciled in-country.

Nigerian Companies now own Rigs, Vessels, Fabrication yards, Seismic centers, Bosiet Centers, Engineering Centers, Constructing Pipelines, Coiled Tubing Services, Stimulation services, Mud Logging, and

SAIPEC TOP STORIES

Engr. Simbi Wabote: “Local content collaboration is paramount; NCDMB is leading the way across Africa when it comes to local content.”

Patrick Pouyann Drilling fluid services, Slickline and Electric Logging Services, Wellheads.

Also, Nigerians are now owning and managing oil fields.

According to NCDMB, Nigeria will continue to domesticate the full capacity and capability of local content across the oil and gas value chain. The new target for the industry follows from the successful completion of the Total's Egina FPSO, the first time these feats would ever happen in Nigeria. The FPSO is the biggest component of deepwater oil and gas project and the fabrication and integration of the modules at any location spur multidimensional development and creates thousands of jobs locally.

The Executive Secretary of NCDMB, Engr. Simbi Kesiye Wabote commented: "Local content collaboration is paramount; NCDMB is leading the way across Africa when it comes to local content. We need to ensure our targets are continually met

and carry on demonstrating to Africa that the NCDMB is ensuring companies operate in Nigeria with local content at the forefront of their business, I look forward to showcasing further developments at SAIPEC 2020."

DR MICHAEL MUGERWA General Manager - Uganda Refinery Holding Company, commented: "We are seeing a lot of Nigerian companies express interest in Uganda given the vast opportunities, this is paramount to the development of Uganda's oil industry, ensuring we utilize the best practice and experience of developed experts, IOC's, NOC and companies throughout the oil value chain” Highlighting the unparalleled investment opportunities in Africa, DR IBRAHIMA DIABY Chief Executive Officer, Société Nationale d'Opérations Pétrolières de la Côte d'Ivoire (Petroci) suggested that there should be open investment opportunities across African countries.

"Collaborative exchange of the huge resource base on experience and development are important to Africa's oil and gas industry and the more we collaborate at meetings like SAIPEC, the greater value will be delivered to the people to ease business migration" SAIPEC features a wealth of content for both strategically and technically minded companies seeking a full solution event. The event will be held on 25 - 27 February 2020, at the Eko Hotel & Suites in Victoria Island, Lagos.

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SAIPEC INTERVIEW diversification needed now; most especially diversification from crude export to incountry refining for more value addition; inter-country trade cooperation and tariff harmonisation across adjoining countries to minimize or eliminate smuggling. There is also the challenge of integration – No economic or fiscal integration in sub-sahara Africa.

In terms of capacity, for the sub-Sahara African sub-region to compete favorably and overcome the negative effects of the cyclical crude oil price trends, we need to increase our refining capacities to sustain our in-country needs and then trade excess more with other Sub Sahara –African countries. This will be more cost effective than imports from Asia, Europe or America.

It is imperative that we need to balance high crude output with high refining capacities to reduce imports costs and charges, export Georgieva etc. This will charges, Kristalina subsidy payments effectively position us to get more value from the crude fractions as opposed to a single price value for the crude alone. It will also ensure that we are less exposed to market fluctuations and then give us control of products marketing and supply. As we reduce reliance on imported refined products, we would be more competitive.

Bank-Anthony: African Countries Must Diversify from Crude Exports The Chairman of the Petroleum Technology Association of Nigeria (PETAN), Mazi Bank-Anthony Okoroafor, who is also the Managing Director/Chief Executive Officer of two oil service companies – CB Geophysical Solutions Limited and Vhelbherg International Limited, in this interview with Ndubuisi Micheal Obineme of Oil and Gas Republic, Bank-Anthony urges economies in Africa to develop refining capacity to eliminate smuggling. He also speaks about preparations ahead of the 2020 Sub Saharan Africa International Petroleum Exhibition and Conference.

Peter Uzoho presents the excerpts: OGR: What’s the idea behind rebranding WAIPEC to Sub-Saharan Africa International Petroleum Exhibition and Conference?

Ban k- An t h on y: Th e e v e n t h a s developed and progressed very rapidly in its three years since inception. We are attracting a much wider audience and focuses have broadened to no longer just be West African focused, but a much wider focus now on SubSaharan Africa. This was a collective agreement across the steering committee and organisers that deliver the event.

In 2019, 36 different countries participated in SAIPEC, with the vast majority of those made up from Sub- Saharan Africa including 11 NOC CEO/MD’s plus their delegations from Mozambique, Senegal, Nigeria, Ghana, Liberia, Gambia, Cote d’Ivoire, Gambia, Niger, Uganda and Equatorial Guinea.

OGR: For SAIPEC 2020, what will you be presenting to industry stakeholders that will be different from your previous editions?

Bank-Anthony: The theme for SAIPEC 2020 will be ‘Oil and gas as an enabler for economic transformation in Sub-Saharan Africa’. We will be discussing critical issues affecting the oil and gas industry in SubSaharan Africa today and how to create value and use energy as an enabler for economic transformation, industrialisation and growth instead of as rent. We will assemble seasoned industry stakeholders and experts who will dissect this theme from their perspectives and experiences.

OGR: From your experience so far and in your opinion, what are the challenges in the region?

Bank-Anthony: Collaboration and economic diversification – Economic

OGR: What are your plans about strengthening SAIPEC throughout the region, with emphasis on your action-plans to use the event as a platform to create opportunities for Indigenous companies operating in the region?

Bank-Anthony: We have huge resource base in Africa, 128 billion barrels or 7.5 per cent of world proven oil reserve, 503.3 Tcf (86.8 billion BoE) or 7.6 per cent of world’s proven gas reserves and 26 Billion barrels (Libya 5th globally) of shale oil. Shale gas potential Algeria third globally 707 Tcf or 121.9 billion BoE. It is estimated that Africa oil & gas will increase by 74 per cent by 2050. We need to collaborate, learn, and establish common economic interest. If common economic interest is not created, we are wasting our time. Electricity to Africa should be the starting point of development.

Without access to electricity correlates with poverty. How can we build Sub-Sahara African content? The type of regional collaboration needed is that that will create wealth and value in our region. The oil & Gas industry needs to become an enabler for Africa economic growth and not just a revenue earner. An economy powered by adequate electricity & petroleum products.

We need to build enough entrepreneurial capacity in Africa. Africa need about a 100 Dangote’s and Tony Elumelu’s in Africa. Our priority should be to eliminate poverty while preserving our environment. Africa is under explored with a huge hydrocarbon potential and a readily available market.

SAIPEC INTERVIEW The continent has the opportunity to use its oil and gas reserves to boost its economic and social development. The future prospects look brighter than before. Investors have changed their perception of Africa as a risky jurisdiction to a jurisdiction of enormous opportunities. With the enablers in place, the oil & gas industry will finally become a source for Africa economic growth and not just a revenue earner. Regional collaboration requires government and industry working together because of the complex issues involved.

OGR: What are the success stories so far from your previous editions?

Bank-Anthony: Great network opportunities created with delegates from Uganda, Ivory Coast, Ethiopia, Kenya, Senegal, Gambia, Liberia, Ghana, Angola, Mozambique. Each country shared opportunities and learning points from their different countries and areas open for exploitation and cooperation. It was great and well attended.

To give some figures; • Delegate participation has increased by from 148 in 2017 our maiden edition to 624 in 2019 • A 55% increase in international exhibitors since 2017 • Over 50 speakers made up the 2019

programme • Over 3,600 attendees in total OGR: What are the available services in your organisation for companies who have business enquiries or seeking opportunities?

Bank-Anthony: We provide services that cover the entire oil & gas value chain from exploration to the tank farm. From Seismic Acquisition, Processing, Interpretation, Drilling, Logging, Completion, Engineering, Stimulation Services, Pipelines, Pipe coating, Marine Vessels, Sub-sea services, Training, coiled tubing, sand control, cementing, slickline, well head, fabrication, installation, operation & Maintenance, FPSO etc

Aiteo Group Ranked Among Fortune 500 Companies Providing Job Opportunities in Africa Kristalina Georgieva

U

.S. Chamber of Commerce Appoints Benedict Peters To Advisory Board of The U.S.Africa Business Center. Mr. Peters will join CEO’s from many Fortune 500 companies who have a strong presence in Africa. He will serve on the Board of Advisors for the U.S.-Africa Business Center. The mission of the U.S.-Africa Business Center is to build lasting prosperity for Africans and Americans through job creation and entrepreneurship development. The mission of the U.S.-Africa Business Center is to build lasting prosperity for Africans and Americans through job creation and entrepreneurial spirit

Welcoming Mr. Peters to the Board of Advisors, Chairman of the U.S.-Africa Business Centre, Scott Eisner remarks: “We value and appreciate the insights from companies such as yours as they not only benefit the Center, but also play a pivotal role in strengthening the ties between the United States and countries throughout Africa.”

Mr. Peters will join CEO’s from many Fortune 500 companies who have a strong presence in Africa, including Banco Prestigío, BP, Caterpillar, Chevron, IBM, MasterCard, Microsoft, and many others.

Aiteo is aggressively pursuing exploration and production. Africa is the next growth frontier and is central to our vision and ambitions for the future. We see opportunities where

others do not look, and employ expertise and innovation to turn opportunity into rewarding reality.

while retrieval of the valuable commodity could bring this figure back down to less than 28 billion barrels by 2021.

The company’s joint venture with IS45 energy has produced more than a highly complementary partnership. We are devoted to responsibly developing energy resources in some of the world's most significant basins, including the Niger Delta basin and the Benue Trough.

Nigeria is Africa's largest oil producer and, in global terms, ranks 11th, with an output of around 2.45 million barrels per day.

The potential of these key areas is enormous and we are well positioned with the expertise, production assets and strategic locations to grow the yield for the long term.

Nigeria is ranked 11th in the world overall for oil production capacity and in 2010 produced roughly 2.45 million barrels per day. Through aggressive exploration and innovative extraction techniques, we are keeping the oil flowing for an energy-hungry world.

The deep water basins off the shores of West Africa represent an important source of new oil at a time when many conventional sources are becoming more challenging to develop.

It may not be easy to realize the full potential of West Africa's offshore fields, from the Niger Delta to the Benin Basin to the west, but the rewards for doing so are significant.

Deepwater exploration is expected to take Nigeria's proven oil reserves above 40 billion barrels by the middle of the decade,

However, an increase in output of 500,000 barrels per day could take it to 7th worldwide, ahead of Mexico and the United Arab Emirates; output growth of 1 million barrels per day would put it close to Canada with nearly 3.5 million barrels of daily oil production.

Aiteo aim to work tirelessly across the upstream market, in both exploration and retrieval, so that our future discoveries add to the known oil reserves of the African continent as a whole and support the oil industry for the long term, while our work to tap into already-known reservoirs of oil increases output in the short term, bolstering Nigeria and other African countries' positions as world leadersin oil production.

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Total ready to explore more oil and gas in Nigeria

L-R: Country Chair / Managing Director of Total Upstream Companies in Nigeria, Mike Sangster; Chairman and Chief Executive Officer of TOTAL, Patrick Pouyanne; Honorable Minister of State for Petroleum Resources, Chief Timipre Sylva; President, Exploration & Production, Arnaud Breuillac; Deputy Managing Director, Deepwater District, Ahmadu-Kida Musa and Senior Vice President, E&P Africa, Nicolas Terraz

T

he Honorable Minister of State for Petroleum Resources, Chief Timipre Sylva, received the Chairman and Chief Executive Officer of TOTAL, Patrick Pouyanne who led a high-powered delegation of the Oil and Gas Giant, comprised of the President, Exploration & Production, Arnaud Breuillac, Senior Vice President, E&P Africa, Nicolas Terraz, Country Chair / Managing Director of Total Upstream Companies in Nigeria, Mike Sangster, Deputy Managing Director, Deepwater District, Ahmadu-Kida Musa and Executive Director, Corporate Affairs & Services, Abiodun Afolabi, in a strategic visit.

The TOTAL Chairman and Chief Executive Officer while noting the Group’s commitment to deepening investments in the country, stated that “Nigeria has a big potential that has not been fully explored and we (TOTAL) are ready to open discussions for new licenses”.

He further stated that “we (TOTAL) will

continue to invest more and it is imperative to have conversations that will ensure a rewarding investment structure”.

He also reiterated the need for reinvestments stemming from the return on earlier investments with a focus on the practicality of the Egina Field while noting that “in a show of commitment, TOTAL is committed to reinvestments in the country from the proceeds of the Egina venture.”

Chief Sylva in his statement noted that TOTAL remains an important partner in Nigeria’s Oil and Gas landscape while namechecking the Group’s Nigerian content achievement with the laudable Egina field with a production of about 200,000 barrels of oil per day, representing over 10% of Nigeria’s production, at plateau.

He further applauded TOTAL for the notable investment in the Downstream Sector and recent strides in the Solar Energy business.

He assured that “the Nigerian Government will do everything to encourage the further

stay of TOTAL” while adjuring on the need for the right high-level representation of the Group at occasions instanced by the Nigerian Government. Chief Sylva led the Group to see President Muhammadu Buhari, afterwards.

It may be recalled that Mr. Patrick Pouyanne had earlier visited Nigeria in April 2019 where he noted that “Nigeria is important to the TOTAL Group as the country now represents about 10% of the Group’s global production. Nigeria has a lot of prolific oil fields and Total would gladly carry out exploration activities if the government grants the licence”.

This recent visit was to underscore the seriousness of the Group to firm up talk with action while signaling the opening of new partnerships between the TOTAL Group and Nigeria.

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Shell’s Operational Records in Nigeria Grows from Strength to Strength .According to him, the daily loss of over 11,000 barrels of oil per day in 2018 and the threat to the integrity of the joint venture assets necessitated the multi-pronged approach to protecting what he called ‘critical national assets.’

He said, “We collaborate with community leaders, traditional rulers, civil societies and state governments in the Niger Delta to implement several initiatives and partnerships to raise awareness on the negative impact of crude oil theft and illegal oil refining. Such public enlightenment programs on the negative impacts on people and the environment help to build greater trust in spill response and clean-up processes.”

S

hell has 60 years operational record in Nigeria, and playing a key role in onshore, shallow and deep-water oil exploration & production with a strong working partnership with the Federal Government of Nigeria, local and international companies, investors, contractors, and communities to develop the country's oil and gas sector.

Shell Companies in Nigeria consist of SNEPCO, SPDC, SNG, etc.During the WAIPEC 2019, Shell Nigeria Exploration and Production Company Limited, SNEPCO, launched its Deepwater Book. SNEPCO holds interests in four deepwater blocks, three of which are under the terms contained in a Production Sharing Contract. It operates OML-118 (including the Bonga field, 55% interest) and OML-135 (Bolia and Doro, 55% interest) and holds 43.75% interest in OML-133 (Erha) operated by the ExxonMobil subsidiary Esso Exploration and Production Nigeria (Deepwater) Limited.

SNEPCO separately holds 50% interest in OPL-245 (Zabazaba, Etan), which is operated by the ENI subsidiary Nigerian Agip Exploration Limited, under a Production Sharing Agreement.

According to Shell's annual report, about 617,000 barrels of oil equivalent per day were produced in 2018: average daily production by Shelloperated ventures in Nigeria, while, 92 percent of Shell Companies in Nigeria contracts are awarded to Nigerian companies in 2018.

Country Chairman of Shell Companies in Nigeria, Osagie Okunbor, said: “Through 2018 we continued to produce crude oil and natural gas, distribute gas to industries and for domestic power generation and produce Liquefied Natural Gas for export, which generated revenues for the government.

The companies also contribute to social investment in communities and indigenous companies.

“In 2019, we will continue to cement our place as a valued partner by maintaining our close collaboration with our joint venture partners, host communities, the tiers of government in Nigeria and other stakeholders to further contribute towards the drive for sustained economic growth in Nigeria” As part of its efforts to strengthen its deepwater operation in Nigeria, SPDC recently announced that it has deployed state-of-the-art high definition cameras for quick detection of and response to crude oil spills from its facilities. The cameras will also help in tracking the vandalism of SPDC joint venture assets.

SPDC’s General Manager, Igo Weli, disclosed this on Monday at a media workshop for journalists in Warri, Delta State. “The cameras are attached to specialized helicopters which carry out daily overflight over our facilities. This measure has improved the surveillance of our Joint Venture assets.”

In addition, Weli said SPDC had implemented anti-theft protection mechanisms on key infrastructures, such as wellheads and manifolds to stem constant attacks from vandals and thereby prevent and minimize sabotage-related spills

Weli noted that SPDC would sustain its air and ground surveillance to complement the efforts of government security forces in checking crude theft, pipeline vandalism, and illegal refining. “But for the efforts of Operation Delta Safe in protecting critical oil and gas assets, the situation would have gone beyond control,” Weli said, calling on the Operation Delta Safe, a special oil and gas asset protection force, and other government security forces to intensify their activities around oil and gas facilities.

Also speaking at the workshop, SPDC’s General Manager, Safety and Environment, Chidube Nnene-Anochie, said, noting that the majority of spill incidents on SPDC pipelines were as a result of sabotage. “We are burdened by the continuous increase in cases of sabotage and theft. Oil spills due to theft and sabotage of facilities as well as illegal refining, cause the most environmental damage from oil and gas operations in the Niger Delta.”

According to Nnene-Anochie, SPDC removed more than 1,160 illegal theft points from its pipelines between 2012 and the end of 2018, adding that the attendant spills from the theft points were sometimes made worse by challenges of access to the incident sites to investigate and stop leaks.

“We track the progress of our spill response from when we learn about the leak to when clean-up is completed and certified by regulators.”

Represented by SPDC’s Compliance Monitoring Lead, Temitope Ajibade, NneneAnochie said no spill was acceptable to the company. “A key priority for Shell companies in Nigeria remains to achieve the goal of no spills from our operations. Nospill is acceptable, and we work hard to prevent them. However, SPDC cleans and remediates areas impacted by spills from its facilities irrespective of the cause.”

SAIPEC SPONSORS where subscribers have the option of enjoying services from several different providers – MTN, Glo, 9 Mobile, and have the ability to switch between providers if the pricing or quality of their service provider no longer suits them.

"This is a proper industry driven by market forces. Tower companies, left to provide uninterrupted infrastructure to run their equipment are compelled to power their thousands of towers almost exclusively on diesel generators.

"Though somewhat primitive, this is their innovative response to keep the telcos running 24 hours a day, 7 days a week.

Competition has also aided the birth of smaller companies like Smile, IPNX, to name a few, who provide primarily quality data service, and now also voice service at competitive pricing.

Dr Chukwueloka Umeh Group Chief Operating Officer, Nestoil Limited

Nigeria Must See Gas as a Resources Beyond Oil

D

r. Chukwueloka Umeh, Group Chief Operating Officer of Nestoil Limited, has said that Nigeria and other African countries should see gas as a resources beyond oil, and other developed countries are already moving away from fossil fuels to clean energy.

Dr. Chukwueloka revealed that the world is now steadily shifting to clean energy, and the focus on oil has started to decline. And, many countries in Europe are at the forefront of this energy revolution.

He further explained that it is high time that Nigeria should change its energy focus from oil to gas. He adds: "With its position as the 9th largest gas reserves in the world, we have the resources to do that. The will is also there. The only thing missing is the innovation to build a sustainable gas economy in the country.

“Currently, the only guaranteed gas income stream comes from production and exportation of LNG. This is understandable because the energy value chain, which taps into the gas reserves in Nigeria, is broken, and cannot therefore reliably pay for gas.”

He also said that there should be a kind of innovative approach for the gas industry to function effectively as some of its value chain such as transportation, usage in power generation, petrochemicals generation & agriculture, power distribution, is broken.

"We cannot put the cart before the horse, therefore for the gas industry to work, the gas off-take and the means for collecting revenue to pay for it must work. Herein lies the required innovation.

"We cannot simply copy and paste what has worked in other developed or developing countries. We must leverage learning from other countries to create our semi-unique methods that will work. We have done this successfully in several other industries.

"For example, Telecoms (data and voice) works very well in Nigeria. We have the highest internet penetration in Africa, with 55% in Nigeria alone. This is an average of 1 in 2 people (111 million people in 2019) with internet access in Nigeria. The Telcos divested from owning towers, and left that to the likes of IHS, while they focus on the business of providing quality voice and data services within their allocated frequencies.

"Competition amongst them and intelligent regulation by the National Communications Commission (NCC) have created a market

"The telecoms industry works because the companies did it our way, for our market, and primarily, because the government regulations were relaxed enough to allow the industry to grow, and develop and the competition was allowed to drive pricing and product offerings.

"Imagine if we replicate this in the energy industry. Imagine a situation where private power generating companies, GENCOs, secure the required licenses without having to deal with too much bureaucracy.

"They would develop IPPs within 2 – 4 years, secure the required investment based on bankable agreements with the off-takers, and build plants.

"They would be able to deal directly with privately-owned distribution companies, DISCOs, and large industrial, commercial and residential clusters, selling power to them at cost-reflective tariffs, i.e. tariffs that are economically viable and allows the GENCOs to repay their loans, pay their fuel suppliers and make a decent return.

"DISCOs would be allowed to sell power at a cost-reflective tariff that allows them to make the required investment to meter most of the customers within their network, and generally improve their network, and also make a decent return. Like the tower companies in the telecoms industry, ultimately, DISCOs would likely be split into companies that own the cables and transformers for distributing power, while Power Traders would use this infrastructure to get power to their end customers.

"The customers themselves would be able to buy power from the power trader of their choice, depending on price. In this scenario, competition for customers’ business would drive pricing.

"Bringing this home to the oil and gas industry, GENCOs would buy gas from gas producers,

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who in turn would be able to deliver their gas on pipelines owned either by NGC or private companies. With the increase in the number of GENCOs, DISCOs and metered customers, more gas pipelines would be built in the country.

"A true gas grid would, therefore, be born.

Nigerians would have cooking gas piped directly to their homes instead of carrying ugly gas cylinders around. Imagine how many pipeline EPC companies would have to grow to meet the demand? More companies like Nestoil would spring up and grow. Imagine it.

"We look at a nation like China, who turned their economy around in 20 years; the primary catalyst was the country’s strong stance to invest in building a robust infrastructure. They built large baseload power plants in many locations to provide reliable power to its growing manufacturing industries.

"With these power plants that run primarily on coal, they can produce goods at competitive prices.

Anywhere you visit in China, you would see its bustling economy, with a considerable percentage of its citizens

being elevated out of poverty each year.

"I have imagined the scenario I described, and it is simply remarkable. It would be the beginning of the much talked about growth in our economy. Anything short of this is a dream that would never come to pass.”

................................................................................................................

FG Promises Bigger Plans, Transparent Policies for Development of Downstream Oil, Gas Sector

T

he Nigerian Federal Government has once again reiterated its commitment to repositioning the downstream petroleum sector by making new policies that will transform the sector for growth opportunities.

The Honourable Minister of State for Petroleum Resources, Chief Timipre Sylva, said that the Nigerian Government is focused on the holistic development of the downstream sector, creating a friendly environment and enormous opportunities for the industry players.

The minister further explained that new action plans will be taken to encourage Public-Private Partnerships in the downstream sector especially in the areas of fixing and expansion of existing pipeline infrastructures and depots.

“We will actively collaborate with the private sector to create a large number of well-paying jobs for Nigerian youths.

“The government is currently finalizing clearer and more transparent regulatory framework with welldelineated activities to support the rapid infrastructural development in

the sector including new refining capacities emerging in the country.

“Government will aggressively promote the passage of PIB which will among others, in respect of the downstream sector, engender: a focused Regulatory Agency; Regulated tariff and open access – pipeline and terminals, Establishment of customer protection principles including transparency and accountability; Introduction of transportation network code; Regulatory enforcement; Better relation amongst all stakeholders.

“The flare gas commercialization will be aggressively pursued albeit with foolproof framework, void of ambiguity to ensure sufficient economic benefits to the nation.

“LPG expansion programs to make it the first choice of energy for domestic and industrial purposes is ongoing. This is being pursued

through “the LPG Penetration Initiative” of the Ministry of Petroleum Resources. The framework is designed to achieve at least 40% fuel switch to LPG by 2025, attainment of 5MM MT domestic utilization of LPG and the creation of an estimated 500,000 job opportunities within the next 5 years.

“The recently launched ‘Operation White’ has been strategically developed to eradicate the smuggling of PMS across Nigerian borders.

The Government will not relent on the sustenance of the program. A team of 89 persons drawn from 5 key Agencies has been mandated to ensure transparency and accountability in the distribution of petroleum products across the country.

“Refurbishment of the existing refineries to achieve full capacity operations shall be fasttracked: (PH ongoing, others to follow by Q1 & Q2 2020),” the minister added.

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