Orient Energy Review, February 2017

ENERGY rient O R e v i e w

w w w .o r i e n t e n e r g y r e v i e w .c o m

Covering Local Content Oil & Gas N500

7.0Ghc US $3.00

Vol 6 No. 02 February 2017

‘SEPLAT is occupying a pre-eminent position and adding a lot of energy value to Nigeria’ - Dr. A.B.C Orjiako

“Transparent process of accessing $600M Local Content Fund Under way” - Wabote

INDUSTRY NEWS

Recession: Nigeria’s Biggest Pipe Factory May Be Shut Down

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fter several months of staying idle, the country’s biggest pipe factory owned by SCC Nigeria Limited may be shut down soon as it grapples with lack of patronage amid the recession rocking the country.

The company had in October last year inaugurated the 280,000-tonne ultra-modern steel pipe manufacturing mill in Ushafa, Abuja, with President Muhammadu Buhari represented by the Secretary to the Government of the Federation, Mr. Babachir Lawal, on the occasion.

The Project Co-ordinator, SCC Nigeria, Mr. Festus Onyenenue, spoke with our correspondent on the

sidelines of a tour of the facility by some participants of the sixth Practical Nigerian Content Conference.

Onyenenue said the last production the factory carried out was for the Nigerian National Petroleum Corporation, with the delivery completed in September 2016.

He said, “In this factory, we have a production capacity of 280,000 tonnes for helical submerged arc welded pipes. And then, we also have a brand new coating plant for three-layer polyethylene coating.

But now, we are idle. Since June, we have no job to do here and we are still keeping our staff and paying salaries.

“Today, you met the factory in this way because we have a need to produce some pipes for our own internal use. At the completion of this project, this factory may be shut down in the next three or four months, and the whole members of staff will be asked to go home. But we hope that before then, something new will come in.”

The project co-ordinator decried the situation in which a huge facility that could bring money into the country had been idle because of lack of jobs, saying, “The recession has worsened the situation.”

Onyenenue added that as of the time the company was producing, it had about 300 employees working at the factory.

He said, “Right now, as we speak, I am not sure they are up to 100. And as time goes on, we will continue to reduce the number. So, it is as bad as that.

“To the best of my knowledge, there is no other factory like this in the country.”

Asked what could be done to salvage the situation, Onyenenue stated, “What the government needs to do is to channel a large chunk of the pipeline jobs to this factory; the manpower here will remain and then the money will come into the country.” *Femi Asu, Punch

NNPC Records Massive Reduction In Pipeline Vandalism

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he Nigerian National Petroleum Corporation (NNPC) recorded a marked reduction in the cases of pipeline sabotage.

This was disclosed in the Corporation’s monthly Financial and Operations Report for the month of December 2016 which has just been released.

According to the report, only 18

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Orient Energy Review February, 2017

cases of vandalized points on downstream pipelines were recorded in December 2016 as against 43 in the previous month.

The downward trend in the cases of pipeline sabotage, according to the report, was due to sustained engagements with stakeholders by the Federal Government and Corporation.

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INDUSTRY NEWS The report also indicated a 13.4 per cent rise in oil and gas sales in December 2016 over sales in November 2016.

A total export sale of $195.40 million was recorded for crude oil and gas in the month under review as against the sum of $166.18 million recorded in November 2016.

“This is $20.22 million higher than the preceding month’s performance.

Crude oil export sales contributed $100.37 million (or 51.36%) of the dollar transactions compared with $96.31 contribution in the previous

month,” the report stated.

The report put the total export sales of crude oil and gas from January to December 2016 at $2,445,451,363.

The report also indicated that the total export proceeds of $175.04 million for the month of December 2016 was “remitted to fund the JV cash call for the month of December 2016 to guarantee current and future production”.

In the downstream, a total of 1,392,154,486 litres of white products was distributed and sold by the Pipelines and Products Marketing

Company (PPMC) in December 2016 compared to 1,248,831,982 litres in November 2016.

According to the report, of the total volume of 12.67 billion litres of white products distributed in 2016, petrol accounted for 88.07%.

The report also revealed that about 9,493,640 barrels of crude oil were processed under the Direct-Sales-Direct-Purchase (DSDP) scheme in November, 2016.

Oil Price Rises Modestly In Tight Trade, Boosted By OPEC Hopes

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il prices ended modestly higher on Thursday, as the market weighed swelling U.S. inventories against possible renewed efforts by major oil producers to reduce a price-sapping glut.

Crude futures were initially bolstered after sources said the Organization of the Petroleum Exporting Countries (OPEC) may consider extending its oil supply-reduction pact with non-members and might even apply deeper cuts if global crude inventories failed to drop to a targeted level.

Oil swayed between modest gains and losses throughout the session before rebounding late, and U.S. crude futures CLc1 settled at $53.36 a barrel, up 25 cents. Brent crude LCOc1 ended the day at $55.65 a

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barrel, down 10 cents.

Prices have traded in a tight $5-range since OPEC and other exporters including Russia agreed last year to cut output by 1.8 million barrels per day (bpd) to reduce a price-sapping glut. The deal took effect on Jan. 1 and lasts six months.

sharply in the past six weeks, with crude and U.S. gasoline inventories hitting all-time records last week, the U.S. Energy Department said on Wednesday. Analysts say that the market is setting up for a possible fall if inventories do not start to decline soon.

“I think that inside this little band we can expect a lot of choppy trading,” said Gene McGillian, manager of market research at Tradition Energy in Stamford, Connecticut. “I still think the forward expectation (for inventory drawdown) is what the market is focused on.”

OPEC’s supply pact could be extended by May if all major producers showed “effective cooperation”, an OPEC source told Reuters.

“There’s a good chance and high odds that the group (OPEC) decides that they want to continue this process,” Energy Aspects analyst Richard Mallinson said.

Most producers appear to be sticking to the deal so far but it is unclear how much impact the supply reductions are having on world oil inventories that are close to record highs.

U.S. oil inventories have risen

“The market’s response to yesterday’s stats suggests it continues to focus on forward expectations of further rebalance through production cuts and increased demand, but doesn’t have any oomph to push higher,” said McGillian.

The anticipation that OPEC’s cuts - and surprisingly high level of adherence to those production reductions - will start to reduce inventories has kept traders heavily invested in futures contracts betting on more gains.

As of last week, non-commercial traders had a net long position of 477,000 U.S. crude contracts, just short of the previous week’s level that represented a record long position in oil futures, according to data from the U.S. Commodity Futures Trading Commission.

Orient Energy Review February, 2017

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OIL AND GAS PEOPLE

ExxonMobil Gets New Boss For Its Nigeria Operations

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n his welcome address to energy correspondents, Ogechukwu Udeagha, Manager, Communications of ExxonMobil disclosed that the current Managing Director (MD) of the company, Nolan O’ Neal tenure ends in Nigeria at the end of February 2017. He retires after thirty-four years of service while the

new Chairman and MD, Paul McGrath resumes on the 1st of March to head Nigeria operations.

Before his appointment, McGrath was most recently a senior executive in charge of project execution for ExxonMobil Development Company, based in Houston, Texas.

He joined ExxonMobil in 1999 and has held a variety of technical and managerial positions in upstream and downstream operations while working in the United Kingdom, Korea, Qatar, Australia and the United States.

In his interaction with journalists, Ogechukwu revealed that 2016 was a tough year for the oil industry in Nigeria and for four months the revenue base of the company depleted owing to the dwindling fortune of the industry globally. He urged energy correspondents to join hands with the multinational so as to work together and ensure that the company and the oil industry

survive. Although the past year was turbulent for the industry, ExxonMobil saw it as a perfect storm and will work with its partners in 2017.

The multinational had a retreat and training for energy correspondents in Lagos and Ogechukwu enjoined them to ensure that the industry activities are well articulated because what the media say, how it is said and done matters.

The main objective is for information about the oil industry to be disseminated in order for it to survive because if it collapsed, the media has a greater share of the blame since it possesses the arsenal to keep it afloat for stakeholders to strategize.

The media has a lot to do even though the issues and challenges appear to be insurmountable but the opportunities abound for success and progression.

OGTAN Elects President, Others Mike Onyekonwu, the pioneer Chairman who led the Association for six years.

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il and Gas Trainers Association of Nigeria (OGTAN), an independent umbrella group of training services providers in the oil and gas sector has elected Dr. Mayowa Afe as its president.

Mayowa was elected in November 2016 at the Association’s General meeting in Abuja, to replace Prof

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Mayowa is the Managing Director & Founder, Danvic Petroleum International, a subsurface petroleum consulting and training company with offices in Lagos and Houston.

He has 28 years oil and gas industry experience, a fellow and past President, Nigerian Association of Petroleum Explorationists (NAPE).

Current Chairman, Board of Trustees, McPherson University, Seriki Sotayo Ogun State.

He was Country Manager, Paradigm Geophysical Nigeria, Business Development Manager, Africa, Halliburton Energy Services among many other senior management and technical work history.

Oil and Gas Trainers Association of Nigeria OGTAN, which was established by the Nigerian Content Development and Monitoring Board in 2010, represents the Education and Training Sectorial Group of the Nigerian Content Consultative Forum (NCCF) under Section 58 of the NOGICD Act (2010), with the purpose to build local human capital capacity in the Nigerian Oil and Gas industry and act as a business group that interfaces with Operators, International Organisations and the Nigerian government.

The association also elected Engr Eje Fred, as the General Secretary; Engr Funmilayo Alabi, Assistant General Secretary; Mr Olaleye Matthew, Financial Secretary; Mr Itua John, Publicity Secretary.

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LOCAL CONTENT

NCDMB to Conduct Forensic Audit on Oil Industry Content Board to Disqualify Defaulters from Oil Contracts

By Margaret Nongo-Okojokwu

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il and Gas Companies that default in the deduction and remittance of one percent of the value of contracts they execute in the upstream sector of the oil and gas industry will henceforth be disqualified from participating in tenders for new contracts.

The Nigerian Content Development and Monitoring Board (NCDMB) announced this on Monday, (February 6th) and indicated plans to conduct a forensic audit of the industry to track and recover due payments on the Nigerian Content Development Fund (NCDF) held by some companies.

The NCDF was established by Section 104 of the Nigerian Oil & Gas Industry Content Development (NOGICD) Act of 2010 and provides that one percent of every contract in the upstream sector of the Nigeria Oil and Gas industry shall be deducted at source and paid into the Fund. The Board manages the Fund and employs it for projects, programmes and activities directed at increasing Nigerian Content in the Oil & Gas industry.

Speaking in Lagos at the Stakeholders Forum on the NCDF Remittances, the Executive Secretary of the Board, Engr. Simbi Wabote stated that some companies were defaulting in their deduction and www.orientenergyreview.com

remittance on contracts they executed.

He noted that the Forum provided a window for all covered entities to understand the channels for paying the one percent NCDF to the Board before the audit, adding that there were no exemptions for players in the upstream sector.

He charged companies to make the remittance to the NCDF TSA Account with the Central Bank of Nigeria (CBN), stressing that NCDMB does not operate an account in any commercial bank.

Giving a background to the Fund, Wabote explained that the NCDMB focused the early years in collections, putting in place the Operating Model for utilization of the Fund, establishing the NCDF Advisory Committee for efficient governance of the Fund and creating confidence and trust of industry stakeholders.

According to him, “The Board opened up the Fund for utilization from 2013, based on the approved operating model that segmented 70% of the Fund to financing Commercial interventions and 30% for Developmental initiatives and activities carried out by the Board on behalf of the industry.

“Under Commercial interventions, the Fund was leveraged to provide 30% Partial Guarantee to commercial banks for loans granted to oil and gas service companies towards financing project execution, asset acquisition or facility upgrade. It also provided 50 percent interest rebate on performing loans. Some beneficiaries of the Fund include Ladol, Starz and Vandrezzer.”

Speaking further, the Executive Secretary stated that Developmental Interventions covered Capacity Development Initiatives (CDIs) including training programmes, NCCF administration, establish-

ment of NOGICJQS, establishment of oil and gas parks, direct equity participation by the Board in high impact projects as well as compliance monitoring activities carried out by the Board on behalf of the industry.

The introduction of the Treasury Single Account (TSA) policy by the Federal Government and the need to deepen accessibility of the Fund for critical activities, he said, created the need to re-engineer the Operating Model of NCDF He noted that “to enhance accessibility to the Fund, the Board in July 2016 signed a Memorandum of Understanding (MOU) with the Bank of Industry (BOI) to establish the Nigerian Content Intervention Fund (NCI Fund).

He confirmed that the Board was at the verge of finalizing the processes for release of the initial $100 Million (N31 Billion) to BOI for the pilot phase. Once this was concluded, he said, the Board will conduct a road show and publicise the requirements for accessing it.

He stated that only contributors to the Fund with manufacturing proposals in the oil and gas industry can approach BOI for the NCI Fund facility. The Fund has a single obligor limit of $10 million and tenor of up to 5-10 years on the basis of 8 percent interest rate.

In his presentation, the General Manager, Finance and Accounts, NCDMB, Mr. Obinna Ofili explained that remittances of the NCDF has to be made in the currency of the contract, notably, Naira, USD, GBP and EUR. He confirmed that though the Act provided that deduction should be based on awarded contract sums; the Board adopted the invoice model to make it convenient for stakeholders.

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LOCAL CONTENT

32 Chevron Agbami Scholarship Beneficiaries Make First Class Degrees Agbami Co-venturers Express Satisfaction with Impact of N7.5bn scheme

By Margaret Nongo-Okojokwu view said that AMEPS is a mer¬it-based scholarship scheme which was es¬tablished in 2009 and administered by the Agbami Co-venturers to bridge the gap in the nations supply of En¬gineering and Medical professionals.

He added that from its inception to date, over N7.5 billion have been spent on AMEPS with over 15,000 young Nigerian beneficiaries, noting that 310 of them have graduated with First Class honours.

The AMEPS Graduands

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hevron Nige¬rian Limited has produced 32 First Class gradu¬ates through its Ag¬bami Medical and En¬gineering Professional Scholarship (AMEPS) scheme, just as it con¬gratulated the 289 ben¬eficiaries of the scheme who graduated in the 2016 convocation cere¬mony of the University of Lagos (UNILAG).

Star Deep Water Petroleum Limited, a Chevron Company and Operator of the Agbami Field, with its co-venturers in the Ag¬bami Field, Nigerian National Petroleum Company, Famfa Oil Limited, Statoil Nige¬ria Limited, Petroleo Brasileiro Nigeria Lim¬ited, also congratulated Miss Omotuyi Oy¬indamola Ajoke, one of the beneficiaries, who came out as best gradu¬ating student. Miss Ajoke attributed her high flyer performance to God and

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Orient Energy Review February, 2017

the support she got from Agbami Co-venturers through AMEPS. In her words at the convocation ceremony, “I am grateful to Agbami Co-venturers for the scholarship.”

Lanre Kalejaiye, Acting Director, Star Deep Water Petroleum Limited, expressed the Co-venturers’ delight with the impact of AMEPS. “We congratulate all the beneficiaries of the Agbami Medical and Engineering Professional Scholarship in the University of Lagos.

We especially commend the 32 who graduated with First Class Degrees.

They are all valuable ambassadors of AMEPS.” He said.

The General Manag¬er, Policy Government and Public Affairs, Star Deep Water Petroleum Ltd., Esimaje Brikinn, in a press statement made available to Orient Energy Re

Brikinn noted that as at the end of 2016, over 9,000 of the beneficia¬ries have graduated from the scheme, while a total of 6,500 are cur¬rently on the scheme.

The Agbami Co-Venturers have also provided strategic support to the development of education by donating 26 fully equipped Science Laboratory complexes, plus six hybrid and two conventional libraries to schools across the country.

The Agbami Field is located approximately 70 miles (113 kilometres) offshore Nigeria, and in line with the Deep Offshore Community Affairs Group (DOCAG) engagement principles, co-venturers view the entire country of Nigeria as Agbami community.

The Field is currently the single largest oil field in deepwater West Africa. It commenced production in July 2008. At peak production, the Agbami project contributes 250,000 barrels of oil per day to Nigeria’s total oil production.

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LOCAL CONTENT

NCDMB Woos Prospective UK Manufacturers and Investors at Subsea Expo 2017

By Nneka Ezeemo

Executive Secretary, NCDMB, Engr. Simbi Kesiye Wabote making his presentation at the Subsea Expo Feb, 1st 2017

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ubsea Original Equipment Manufacturers (OEMs) and investors in the United Kingdom have been called upon to focus on establishing a strong manufacturing presence in Nigeria as this is a critical time in the history of both nations to leverage on established trade relations for economic growth.

Speaking at the Global Opportunities Session hosted by the Department for International Trade at the Subsea Expo and Conference in Aberdeen, UK, The Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB) Engr. Simbi Kesiye Wabote disclosed that the biggest capital expenditure, as much as 54% of the Nigerian Oil and Gas proj-

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ects, is the procurement of manufactured goods.

He explained that the past focus of the Nigerian Government on Oil revenue generation on its own has since changed to in-country value addition, with the enactment of the Nigerian Oil and Gas Industry Content and Development (NOGICD) Act in 2010. The new focus is to accelerate industrialization by attracting capital investments into the Nigerian economy.

In his opening remark, he said,

technology and skills. Our challenge is to respond to the new trends in technology and talents required in the industry while building in-country capabilities�

“There are aggressive explorations activities in Nigeria and new exploration are being made in our shallow and deep offshore terrain. Deep offshore field development and operations require more sophisticated

He emphasized that Egina project has attracted strategic investments, such as the establishment of the FPSO integration yard in LADOL Lagos;

Despite the challenges, he identified few significant inroads made in deepwater projects, notably among them being the Egina FPSO, the first offshore project under the Act, which has been in continuous compliance with the Act and is being monitored by the Board.

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LOCAL CONTENT

he posited that the facility would bequeath new capabilities in modern fabrication and integration of FPSO topsides modules.

While making known the Board’s plan to organise an Opportunity fair where companies can showcase their competences and capabilities, Engr. Wabote identified some opportunity areas such as manufacturing of component parts, spares and accessories, equipment assembly, subsea umbilical termination units, component of hydraulic power units, hydraulic fluid, pressure regulators, pressure gauges, accumulators, units of master control stations, subsea star plates, electrical flying leads, Christmas trees, Training, quality assurance and quality control, manufacturing of drilling fluids and chemicals, line pipes, installation and commissioning of facilities.

Wabote stressed that all investment and capabilities that exist in Nigeria are given first consideration in bid processing and that foreign companies that have invested in-country have the right of first refusal, even in terms of procurement.

He went further to explain that the intent is not to do the entire manufacturing in-country because the Board understands that there are some challenges with intellectual property rights and proprietary rights rather their expectation is for a significant amount of value added activity in the manufacturing processes to take place in-country.

Giving further insight on the steps of the Federal Government of Nigeria under the leadership of President Muhammadu Buhari to create an enabling environment for investors, he made a reference

about the recent launch of the Petroleum Industry Road Map in Oct 2016 tagged “The 7 Big Wins” which outlined the President’s bold step to deepen transparency, improve efficiency, attract investments, create safe operating environment, develop robust local supply chain and support exploration and production activities on a sustainable basis.

As a result of the road map, the Federal Government is streamlining regulatory agencies and their functions, simplifying business registration processes, granting pioneer status by the Nigerian Investments Promotion Commission, with incentives like 3 – 5 years Tax holidays and 10% tax concession for 5 years for Local Value Addition.

He emphasised that the Board is also working on reducing contracting cycles of projects to make it more attractive for investors by bringing down the cost largely attributed to the long contracting cycle. He pointed out that the annual capital spend on road, rail and power infrastructures has increased significantly since 2016.

According to him, the NCDMB has put in place an Equipment Component Manufacturing Initiative (ECMI) as an intervention to encourage manufacturing of oil and gas components parts, spares and other accessories through categorization and certification of vendors according to their investment in manufacturing and ownership of equipment, he reiterated that investors who commit their resources will have first consideration during the bidding process.

In addition, he discussed elaborately about the Nigerian Oil and Gas Park Schemes (NOGAPS) stressing

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that the Board is championing this initiative to establish Oil and Gas manufacturing hubs in strategic locations close to Gas corridors, Power plants and waterways to ease the operation of firms that choose to set up in the parks, the intent among others being to engender low cost production through a shared service model.

Continuing, Wabote allayed their concern about funding by throwing more light on the Nigerian Content Development Fund managed by the Board to support Nigerian Content Development which is the one percent contribution on all upstream contracts, he said “there is no gain saying that my organisation also has fund to support Nigerian Businesses and their partnerships that are created to establish their presence in country” He went further to say, “The fund has matured to a level that it can attract complimentary funds from Nigeria and international financial institutions. In Nigeria we are in partnership with the government owned Bank of Industry to support investments in manufacturing, asset acquisition and contract financing under Nigerian Content” He identified UK Export Finance (UKEF) as another financial institution they are in talks while thanking the Department for International Trade for making Nigeria Content Development a key feature of the event.

With Nigeria becoming more investor friendly and UK facing Brexit, it could be that this is best time for UK manufacturers and investors to seize the opportunities he presented in this outing.

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POWER

FG Should Index Gas Price to GenCos in Naira – NERC Stories by Dirisu Yakubu with agency reports

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he Nigerian Electricity Regulatory Commission (NERC) has called on the federal government to review the gas pricing of generation companies (GENCOs) from dollar to naira.

This announcement is in line with the pricing methodology which mandates

the commission to carry out a minor review of the tariff bi-annually.

According to NERC’s Head of Public Affairs Department, Usman Arabi, over 80% of the electricity generated in Nigeria is from gasfired power plant and the gas price is indexed to the dollar.

“We have proposed to the government the option of pricing gas in local currency to mitigate the foreign exchange risk which is the major cause for the gap in tariff,” he said.

The commission explained that the current economic condition in the country was a huge challenge to the development of the power sector.

“As Nigerians are fully aware, the macroeconomic indices such as the rate of

France Injects 50m in Kandadji Dam Construction

inflation and exchange rate have steadily gone up over the last one year. This increase has affected the prices of all other commodities in the country. The purchasing power of Naira has crashed to all time low within the last couple of months.

The official exchange rate in the country has risen from N198.97 to over N305.05 to a dollar. This alone is bound to trigger an increase in electricity tariff given the fact that all equipment, spare parts, meters used for the generation, transmission and distribution of electricity in Nigeria are imported. Electricity is, therefore, a product like any other product that is affected by changes in micro-economic indices.” NERC said.

It added that as at February 1, 2017, Nigeria’s inflation rate rose to 18.55% as against the normal 8.3% used in the calculation of electricity tariffs.

U.S’ Power Africa plans $1bn to sponsor the Nigerian Power Sector

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rance and Niger have signed a 3-year cooperation agreement which might see the first provide the second over FCFA39 billion (about €60 million) of financing. The agreement was initialed in Paris during the visit of Niger’s Prime Minister Brigi Rafini from Feb 7 to 10, 2017.

From the total amount provided, about €50 million will be used to establish the Kandadji hydropower dam. The infrastructure whose construction was launched since May 2008 will help provide more water to Niamey’s populations and generate 125 MW of power. It will also insure a flow of 120 m3/s at the beginning of the low-water period of the Niger River.

Asides this agreement, others were signed in various domains, totaling more than FCFA6 billion (about €10 million).

One of the projects covered by the agreements is directed at the Diffa youth (in the South Eastern part of the nation which suffers terrorist attacks).

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ower Africa plans to invest about $1billion in the Nigerian power sector, Andrew Herscowitz, the Programme Coordinator, revealed on Tuesday.

According to Herscowitz, the U.S

dollars in the funding of energy projects in Nigeria and the country needs to see capital flow in the entire energy value chain.

“Since Power Africa was launched, U.S’ Trade Development Agency has committed approximately $6.5 million in funding for 10 activities supporting Nigeria’s energy sector, which could leverage up to $2.7 billion in investment. It has advanced $50 million in financing from the Oversea Private Investment Corporation (OPIC) to Lumos, a Nigeria-based solar energy company, to increase it’s off grid solar power service to about 200,000 Nigerian homes and businesses,” he explained, adding that the programme also supported power companies by providing technical assistance.

has already committed billions of

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ALTERNATIVE ENERGY

NAEE: Experts Underscore Renewable Energy, Call on Investors to stick to Local Content Policy

By Sola Akingboye

Recent statistics have proven that Nigeria’s overall electricity generation output could drop from the peak of 4,500MW to an unprecedented low of 1,327 megawatts, which the Ministry of Power once confirmed, and as continued to have very negative impact on the power supply in the country; but not a few expert at the recent Nigerian Alternative Energy Exposition (NAEE), have described as laudable the efforts of the Sustainable Energy Practitioners Association of Nigeria(SEPAN) to collaborate with concerned authorities in ensuring that renewable and other alternative sources of energy are mainstreamed as investment with private sector participation, aimed at cushioning the protracted energy shortfall in the country. In this special report, our Abuja correspondent, SOLA AKINGBOYE, who was at the Sixth edition of the Nigeria’s Alternative Energy Exposition (NAEE) held in Abuja reports the nitty- gritty of the event.

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nchored by Sustainable Energy Practitioners Association of Nigeria (SEPAN), Nigerian Alternative Energy Exposition, (NAEE) represents Nigeria’s largest gathering of policy makers, researchers, manufacturers, investors and consumers who brainstormed and brought to practical focus the implementation of Nigeria’s Intended Nationally Determined Contribution (INDC) using renewable and energy efficient sources in line with President Buhari’s commitment at the Paris Agreement.

“We note with concern the deficiency in our energy infrastructure over the years in Nigeria, and the need to expand the services is imperative, hence, the drive towards renewable energy.”

That was the highpoint of the sixth edition of NAEE as issued by SEPAN to herald the three days expo, which had twelve plenary session format with panellists drawn among delegates hinged on practical implementation of Nigeria’s INDC. Accordingly, SEPANS led initiative under the National Appropriate Mitigation Action (NAMA) framework presented two key intervention projects under energy: renewable and energy efficient sources.

Various panel of discussants also touched on mobilising climate finance for INDC implementation in Nigeria, such as; challenges and opportunities for private sector participation in Re-

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newable and energy efficient projects in Nigeria; Developing GHG inventory and the accompanying MRV system in Nigeria; Legislative Framework in Renewable and energy efficient projects, the all-inclusive Nigeria Climate change Bill 2016 before National Assembly was x-rayed; the green growth agenda for Nigeria with Nigeria’s Great Green Wall as a case study; domestication of Science and Technology in Renewable Energy and Energy sources for sustainability; Green Campus Initiatives and SEPAN’s Intervention programme: Data collection and collation for renewable energy sources.

to see that the lives of people in their states are improved. The emission standard that goes with industrialization is also addressed. So it was an all-inclusive event for us and to the stakeholders coming from the states.”

Highlighting the significant of Power for All, which cut across sub-saharan Africa and also at the center stage of the NAEE event, Malo explains that the organization’s modus operandi is to educate and connects potential investors to the Renewable Energy industry while expatiates Nigerians’ response to the calls for renewable source for power generation thus:

The former Senior Policy Advisor on Energy Policies, Regulations and Partnerships in the Ministry of Power, and presently, Country Director, Power for All campaign in Nigeria, Mrs. Ifeoma Malo who was one of the key speaker described Renewable Energy potentials for Nigeria as the lee-way to solving the country’s energy deficit.

“I think the conversations we had from this morning have been very encouraging; we saw state governments representatives, government agencies, second tiers government agencies that were very passionate about driving sustainable energy in their communities, seeing both investors potentials and the growth potentials for their states”.

“Power for All is an international organization, globally recognized for building platforms and collaborations for distributed power; promoting access through decentralized renewables; and employing communications, advocacy and strategy to advance energy access and address energy poverty, and more importantly addressing climate change matters. These are the things Power for All is very passionate about. That is our goal and objective in Nigeria. One of the things we want to see is to make sure that every community, especially the rural communities is electrified with using sustainable, renewable, energy; I think to that extent, our goals are align and that is why we are in full support of what NAEE is doing.”

“They have also seen corresponding issues bothering on climate change;

Orient Energy Review February, 2017

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ALTERNATIVE ENERGY

“We have our word well cut out for us.

Nigeria is one of the largest markets for Power for All in parts of Africa we are operating in, and then with the population of 170milion is expected to double in another couple of years.”

“We really have one of the largest markets we are operating on, but one of the things we have seen is and have been doing in the past six months, is that people have reached their point of faint when it comes to electrification” “Not having light, having to use coal for cooking with the use of heavy generating sets as well as ‘I pass my neighbor’ with all of the attending health effects.

So people are welcoming the idea of renewable energy, they want to know more, understand more of the technology, and that is where Power for All and organization like NAEE comes in, we need to ramp up our advocacies.”

The Havard trained, while commending the present administration minced no word calling on authorities for a meaningful policy direction that will enhance large scale investment in the sector: “Though governments are already keying in;what we are hearing from the government is that we are ready to go.

‘Renewable Energy is the way to solve our energy deficit in Nigeria that your investment is safe and you will have safe return on investment if you bring your money here to actually deploy renewable energy.’ I think in that regard, government is sending the right signal” “If you remember, as part of Paris agreement, we got some announcement from the Federal Ministry of Environment that Nigeria has 30% five years plan for renewable energy; and very recently, we got an announcement from the Vice President Osinbajo that Nigeria has 50% target for Nigerian energy mix using renewable energy. That is a positive measure for investors who want to come into Nigeria to do business.”

“But we still have to get our policy and legislation aligned with some of the targets that have been set.” She said.

However, stakeholders in their resolution commended the federal government for

the zeal shown recently at ensuring that renewable and energy efficient sources of energy are mainstreamed as investment with private sector participation. While appreciating President Muhammadu Buhari for signing the Paris Climate Change Agreement, the conference requested for its expeditious ratification so as to enable Nigeria partake from the accompanying opportunities Renewable Energy has brought to bear.

SEPAN also vouch its support to relevant government ministries, department and agencies (MDAs) for the development of Framework on Nationally Appropriate Mitigation Actions(NAMAs) for the five priority sectors chosen in Nigeria’s Internal Nationally Determined Contribution(INDC): Energy; Gas flaring; Agriculture and Land Use; Industry and Transport; According to the communique issued and signed by its President, Dr. Magnus C. Onuoha, SEPANcalls on the Federal Government through Standard Organization of Nigeria (SON), with the support from Energy Commission of Nigeria (ECN) to oversee the importation of quality renewable energy products into the country, with believe that importation of substandard products by quacks has painted genuine investors in the sector in bad light.

Among other prayers of the communique as highlighted are as follows: That there should be one stop desk office in the Federal Ministry of Finance. This office should serve as first point of call for local investors on green growth projects to explore challenges and opportunities in Nigeria.

That the regulatory agency, the Nigerian Electricity Regulatory Commission (NERC) should be much more proactive, independent and transparent on Renewable Energy (RE) and Energy Efficient (EE) regulations.

That there is need for collaboration between the Federal and State Government and the Private Sector to support training and job creation provided by off-grid renewable energy market for

technicians, installers and artisans.

That there is the need to domesticate the nation’s science and technology innovations in renewable and energy efficient sources for sustainability.

That we call upon relevant Stakeholders, development partners to collaborate with SEPAN’s robust Data Base Department for the collection and collation of data on Renewable and Energy efficient sources.

That the Rural Electrification Agency (REA) should re-invent itself as the Renewable Energy Development Agency and focus on the promotion of off-grid, mini-grid renewable energy solutions working with the private sectors investors to achieve fast rural electrification; that the renewable energy and energy efficient policy will only be more potent if it is backed by law.

That SEPAN will support and encourage the Climate Change Bill (2016) on the floor of the National Assembly which seeks to give legal teeth to sustainable agriculture, renewable energy and infrastructure, among others.

Stakeholders resolved to pursue with vigour the Nigeria’s local content policy in the renewable and energy efficient sector, imploring the developers and oil companies that are diversifying their investment into this sector not to go contrary to the lofty policy of the Federal Government.

However, the three-day Expo attracted dignitaries such as the French Ambassador to Nigeria, Denys Gauer, Finnish Ambassador to Nigeria Suomela-Chowdhury, Project Manager Africa-EU,RECP Ina de Visser, the Chairman of Southern African Sustainable Energy Association Alwyn Smith, state governments, senior government officials from the Ministries, Department and Agencies(MDAs), among other numerous participants from the private and public sectors, academic, the civil society organization, with more than twenty manufacturers in renewable energy sector exhibited their products.

Rwandan Government Drops $35m Biogas Project

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he government of Rwanda just dropped a biogas production project worth $35 million. Officials of the National Industrial Research and Development Agency (NIRDA) told Rwanda Today that the decision was taken due to the lack of viability of the project.

According to Joseph Mungarurire, director general of NIRDA, challenges met to collect raw materials and raise funds necessary to its implementation

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caused the project to be dropped. “You cannot ask investors or the government to invest in a project that is not economically viable. And a project involving the production of biogas at 1,000 Rwandan francs (about $1.21) the litre for a sales price of 800 Rwandan francs (about $0.97) is not viable,” he said.

Following initial forecast which stated that the nation had significant potential for eco-farming such as jatropha,

NIRDA recently revealed that the local climate did not favor the cultivation of plants necessary for the project.

Orient Energy Review February, 2017 15

COMMUNITY REPORTS

Kachikwu Unveils 20-Point Plan on Ending Militancy in the N’Delta • Country Loses $100b Revenue to Pipelines Sabotage • 100,000 jobs to be created in each oil-producing state, Amnesty Programme to be decentralised a seven-point roadmap, engaging the oil-producing communities and sustaining the Amnesty Programme for the repentant militants.

Kachikwu added that the President Buhari’s efforts to sustain the programme were being hampered by declining oil revenue, as the present administration only gets 55 per cent of the revenue that was available to previous administrations. He said the crisis has refused to abate despite the efforts, adding however that the administration led by Buhari was going to be very bullish in finding final solutions to the crisis.

Nigeria lost billions of dollars in oil revenue at the peak of the militant attacks on oil and gas facilities in the Niger Delta, which slashed oil production from 2.2 million barrels per day to 1 million barrels per day last year, the Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu has said.

To tackle the scourge, the minister also unveiled a 20-point agenda aimed at instituting permanent peace in the oil-producing region.

Speaking on “Oil Sector Militancy Challenges…Roadmap to Closure,” Kachikwu said in his monthly podcast that the country lost billions of dollars at the height of militancy in 2016.

According to him, the Niger Delta crisis, coupled with the 45 per cent drop in oil production, worsened the financial challenges of the Muhammadu Buhari administration.

Kachikwu said the crisis resulted in attacks on oil and gas facilities and the sub-optimal performance of the refineries, stressing that Nigeria was unable to meet its international obligations as a result of the militancy. He said despite all efforts made by successive administrations to tackle the militancy in the Niger Delta, a permanent solution was never found.

“The problem has been the absence of consistency, even before President Obasanjo’s administration and it went on with other governments – Yar’Adua and Jonathan’s,” he said.

Kachikwu identified the steps taken to tackle the Niger Delta crisis to include the setting up of the Niger Delta Development Commission (NDDC) and the 13 percent derivation for oil producing states.

The minister also stated that the present administration has also made efforts to end the crisis by launching

The minister said the administration is determined to tackle the militancy and achieve peace in the region.

Kachikwu said the government would focus on the environment, adding that the Niger Delta has a rich environment that is suitable for tourism.

To clean-up the environment, Kachikwu said Buhari would continue to implement his seven-point agenda and other behind-the-scenes engagements of the relevant stakeholders.

The first point on the 20-point agenda is for oil companies to engage the state governments and communities on issues affecting a particular state.

The second point focuses on inter-agency collaborations between the Ministries of Petroleum Resources and the Niger Delta, as well as the NDDC. The third point is what he called a ring-fenced approach, stressing that the federal government would stop dealing with the militancy as a national issue and adopt a state-by-state approach.

Kachikwu also said government would focus on creating 100,000 jobs in each of the oil-producing states in the Niger Delta in the next five years.

The Amnesty Programme, according to the minister, will also be decentralised, explaining that the federal government can no longer fund the programme alone as a result of dwindling oil revenue.

Another plan under the agenda is to adopt what he termed as the “Security Holds Hands Approach”, aimed at strengthening security through the collaboration of all the relevant agencies.

Kachikwu also identified peace and investment initiatives, stressing that peace encourages investment, while a crisis serves as a disincentive to investment.

He added that there would be a core business focus wherein the federal government will continue to attract business opportunities to the Niger Delta.

16 Orient Energy Review February, 2017

According to the minister, at the core of the militancy is economics, stressing that cottage industries and business start-ups will encourage violent agitators to shun militancy and engage in business activities.

Another item on the agenda, he said, is for the government to focus investments on gas-to-power projects for steady power supply in the Niger Delta.

Kachikwu also said that the federal government would provide incentives for peace keeping by boosting investments in the Niger Delta states that are peaceful and investor-friendly.

The minister stated that oil companies would embark on the revamp of oil and gas infrastructure in the Niger Delta, while also focusing on the “clean-up of our mess”. In this respect, the minister said the president had launched the Ogoni clean-up exercise.

Other aspects of the 20-point plan included the domestication of oil and gas business opportunities to achieve greater participation of the people of the oil-producing region without excluding other Nigerians.

In addition, a development fund will be launched while also attracting foreign investors to the region.

The federal government would also encourage education programmes in the Niger Delta to make the people embrace education and shun militancy, the minister stated.

Kachikwu also revealed that the Amnesty Programme would be launched on a state-by-state basis to create opportunities for 5,000-10,000 youths in each state, adding that the federal government cannot continue to fund the programme alone because of dwindling oil revenue.

He also advocated for the establishment of an umbrella youth organisation in each state, even as the federal government partners the oil-producing states to create investments.

The minister also identified justice for all the stakeholders as a major plank of the agenda, while policing for peace would remain critical to sustaining peace in the oil-rich region.

On the security measures, the minister said the government would continue to strengthen the military and other security agencies to maintain peace, adding that it was no longer acceptable for the militants to hold the country to ransom. *Source: ThisDay

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COMMUNITY REPORTS

FG Committed To Developing Niger Delta Communities – Osinbajo

Acting President, Professor Yemi Osibanjo has declared that the President Muhammadu Buhari-led administration is committed to the rapid development of oil bearing communities in the Niger Delta region.

This is as Rivers State governor, Chief Ezebunwo Nyesom Wike has stated that the state government is not at war with the Federal Government of Nigeria or any of its ministries or agencies.

Osibanjo, made the declaration recently while speaking at a town hall meeting at the Banquet Hall, Government House, Port Harcourt, in continuation of his tour of states and communities in the

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Niger Delta region.

The acting president was accompanied to the town hall meeting by former Rivers State governor and minister of Transportation, Mr. Chibuike Rotimi Amaechi, and the minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu.

He said, “We had during the visit of Pan-Delta Forum in November 2016, decided that we must undertake visits and engage the leadership and people of the oil producing communities, to seek to better understand their stand first hand and offer some of these communities in the Niger Delta a new vision and a new beginning.

“It is now clear the Niger Delta needs a new vision. It is no doubt at all that a new vision is required for the Niger Delta. But not only new vision, but a fresh commitment, a renewed spirit by all stakeholders including the states, federal agencies and the oil bearing communities.

“The federal government is committed in going into a partnership with the oil producing states, local governments and the private sector as well as civil society organisations for the rapid development of these communities.”

Orient Energy Review February, 2017 17

LOGISTICS/MARITIME

Capacity Building: Charkin Maritime Unveils Nigeria’s First Ever LandShip

By Vivian Isreal Osuji, Port-Harcourt.

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ivers State Governor, Chief Nyesom Wike has formally unveiled Nigeria’s first ever land ship, MV Rivers Pride to boost capacity development in the maritime sector.

The land ship, which was built by an indigenous and privately-owned maritime training institution, Charkin Maritime and Offshore Safety Centre, is situated at Ozuoba, along the East-West Road, Port Harcourt, Rivers State.

Wike, who was highly elated about the development also did the foundation laying of 200 cadets accommodation block in the centre, and further approved a certificate of occupancy for the land in which the land ship will be situated.

To give effect to his approval, the governor directed the Chairman and Chief Executive Officer (CEO), Charkin Maritime and Offshore Safety Centre, Sir Charles K. Wami to meet with the Director of Lands to bring up his file on his table to append his signature.

Wike further assured that the Rivers State Government would do everything possible to assist the centre to grow to an enviable height to the benefits of Rivers State indigenes in particular and Nigerians in general.

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Dignitaries at the event including the Royal Ambassador of Norway to Nigeria, Jens-Petter Kjemprud, Director General of NIMASA, Dr. Dakuku Peterside lauded the centre for the feat.

Moreover, to realize its vision of training young Nigerians to qualify for the Nigeria and global maritime labour market, Charkin is being upgraded to award National Diploma in Nautical Science and Marine Engineering.

of engendering better and quality sea fearers that could meet the challenges in labor market, we are willing to collaborate with state and local governments, International Oil companies (IOCs), marine oil and gas servicing companies, voluntary individuals and other stakeholders in any way possible,” he said.

Furthermore, the Charkin boss craved the support and cooperation of Niger Delta Development Commission,

The new institution, expected to commence lectures in September 2017, will be known as Charkin Maritime Academy.

In his speech at the occasion, Charkin Executive Officer and Managing Director, Sir Charles Wami said the institution is working assiduously with the National Board for Technical Education (NBTE), to ensure all necessary approvals and accreditation.

NDDC, Nigerian Content Development and Monitoring Board, NCDMB, local government council chairmen, the IOCs, marine and oil servicing companies, voluntary agencies and individuals in the area of sponsorship of cadets for National Diploma program including on-board placement of their cadets and graduates for internship.

In view of providing sea berths for it cadets to conduct their twelve months STCW 2010 mandatory sea service as soon as they complete two years diploma programme in the institution; Sir Wami disclosed that negotiations with the Norwegian ship owners association including selected shipping companies around the world had commenced.

“In order for us to see an alternative way

Orient Energy Review February, 2017

In his response, Rivers State Governor, Barrister Nyesom Ezenwo Wike commended the effort of Charkin Managing Director and pledged to collaborate with the institution for the good of the State and Nigeria.

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LOGISTICS/MARITIME

get financial assistance from commercial banks for future developments.

He stated that the centre needs the encouragement of all stakeholders to continue to provide maritime education and training of international repute.

Also speaking, Dr. Emi Membere Otaji, President of Port Harcourt Chamber of Commerce and chairman, Ship Owners Association of Nigeria commended the effort of Charkin Mr. Oderide Akin who represented the Director General of NIMASA Dr. Dakuku Peterside pledged the collaboration of the agency with Charkin in its quest at capacity building and human capital development.

Wami solicited for the support of the state government to ensure that the centre attain set goals and objectives, even as he asked for a certificate of occupancy to enable the centre

According to him, Charkin Maritime and Offshore Safety Centre have a trend of rendering and improving on high quality training to guarantee competence in a conducive and friendly environment.

It is a one-stop-shop for the marine, oil and gas training.

He explained that the official commissioning of the facility was meant to bridge the gap in maritime education and training in the country.

The land ship comprises full mission navigational bridge simulator; ECDIS Simulation Room; GMDSS (Navigation) Simulation Room which conforms

to the 2010 Manila Amendments by the global maritime watchdog, the International Maritime Organisation (IMO); and the basic dynamic positioning class.

Other components of the land ship are advance dynamic positioning and examination class; nautical institute examination room; and the drilling system crane simulator.

The centre has the approval of local and international regulatory agencies across the globe. These include NIMASA, Department of Petroleum Resources (DPR), OPITO, United Kingdom, and the International Well Control Forum (IWCF), United Kingdom.

Others are the Nautical Institute (NI), Oil and Gas Training Association of Nigeria (OGTAN), International Association of Safety and Survival Training (IASST), United Kingdom, and the Petroleum Technology Association of Nigerian (PETAN).

Besides the fact that it is a member of British Safety Council among others, it is also affiliated to the Regional Maritime University, Accra, Ghana.

EU Carbon Market Reform: Shipping Industry calls for Exemption

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n proposals adopted by the European Union Parliament on Wednesday, February 15, 2017, to reform the bloc’s carbon market, the shipping industry was included for the first time. Reacting to the development, the global shipping industry has urged the European Union to drop the sector’s inclusion, saying it risks distorting trade and international efforts to cut the sector’s emissions.

Shipping accounts for an estimated 2.2 percent of global carbon dioxide (CO2) emissions and forecast is expected to rise dramatically unless action is taken.

It is also estimated that about 90 percent of world trade is transported by sea.

The draft reforms of the EU’s carbon market post-2020 that were adopted by the European Parliament recently could result in emissions from the shipping sector being included in the bloc’s emissions trading system (ETS) for the

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first time.

But the International Chamber of Shipping (ICS), which represents more than 80 percent of the world’s merchant fleet, argued that efforts should be focused through the United Nations’ shipping agency, the IMO. “EU member states, which are also members of IMO, now have a duty to reject these unhelpful proposals,” said Simon Bennett, director of policy and external relations at the ICS. “Trying to include thousands of small shipping companies — including thousands of companies not based in the EU — into a system designed for major EU power-generating companies and steel and cement producers will only complicate this reform.”

The IMO has said that inclusion of emissions from ships in a European Union ETS significantly risks under-

mining efforts on a global level.

IMO Secretary General Kitack Lim said last month that such a move “could easily be the first step on a slippery slope towards fragmentation of the regulatory regime that controls global shipping”.

Environmental campaigners, meanwhile, welcomed the European Parliament’s stance.

Bill Hemmings, of green lobby group Transport & Environment, said that EU governments must support the draft reforms and the plan for ship CO2 emissions to be included in the ETS if the IMO fails to act.

With plans underway for the adoption of final CO2 reduction commitments in 2023, the IMO laid out a “road map” last year, 2016.

Orient Energy Review February, 2017 19

TALKING POINT

‘We provide solutions to Africa’s challenges in the Oil and Gas industry’ – Jaffer, Canadian Envoy Shane Jaffer works with Alberta firms on International Financial Institutions’ funded projects, including the World Bank, Inter-American Development Bank and the Asian Development Bank. Jaffer has also co-led a number of multi-national Private Sector Liaison Officer (PSLO) missions in Africa. He is Senior Director (Africa) at the International Development Office, Government of Alberta. In the past few years, he has been active in facilitating sharing of best practice between government of Alberta and a number of African governments on topics including oil and gas regulatory policy, environmental best practice and governance issues.

In this exclusive interview with our Jerome Onoja at the African Oil Week, Jaffer speaks on his experience working with the World Bank, the local content initiative and his mission in Africa amongst other important issues. Excerpt!

Mr. Jaffer, tell us what brings you to Africa Oil Week?

Africa Oil Week is the biggest and most important oil and gas event that takes place in Africa. For us, it’s a center of gathering for industry and government officials. And it’s really a good opportunity for Canadians to meet all the key decision makers and we’ve been doing this for the last four years. We find this to be a valuable venue for that interaction. If companies are interested in Africa, this is where you’ll see them come, and that’s the reason I got here.

What are some milestones that you’ve achieved from your involvement and interactions at the Africa Oil Week in the last couple of years?

One startseeing presof nadian panies program, of our have

has ed the ence Cacomin the some groups

booths. These are indicators that show some level of success. We have some companies in on the E&P side, we’ve got the Stock Exchange here, and there are a number of companies from around the world listed for doing business in Africa. Polaris is here. High Arctic Energy Services, which is on the survey side, is also here. The other thing is that you can see more of an emergence of Canadians working within companies in different markets, like, you know, the Vice President of Exxon. We are seeing more and more Canadians engaged internationally as well. At the end, our measurement or milestone is the success of our companies in those markets. How many have gone into those markets?

Have they been able to create wealth in those countries? Have they created jobs in those countries? Have they created opportunities for Albertan people to be engaged in those countries? That’s what we’re looking for. So it’s really a win-win situation.

Tell us your view on local content practice in the entirety of Canada.

I served on the World Bank local content committee, because the Bank was interested in Canada’s long track history of local content. A lot of developments in Canada takes place on indigenous or aboriginal territories. And one of the things we’ve been able to highlight is how Canadian practices have been adopted in other parts of the world where we’ve been able to create wealth and opportunities for other indigenous communities? We’ve also done some things wrong, but that is part of the things that we have learnt from; how some things haven’t gone well and what we can

20 Orient Energy Review February, 2017

do to improve that. I earlier said that we look for joint win-win opportunities.

Part of our participation is also learning what other countries are expecting. Nigeria is a good example. When we started off, maybe it was some sort of a certain target, but then realized it’s going to take some time to hit those targets.

Still we resolved to go towards that. So it’s really, I think, an opportunity for us to learn. I mentioned some examples of companies here who are very much involved in local content promotion. Also for Canada, we want to see see benefits accrue to a country, to a region. We’ve had in the past and we’ll continue to have educational institutions come here.

It is part of what we wanted to share; we wanted to share that message of local content. It’s important to have certain capabilities accruing to a country. It’s of benefits to both countries (Nigeria and Canada) as well. Because you’ll find out that you have less disruptions; you’ll have amiable communities to work with. You see, it’s a win-win situation.

We encourage it. Canada’s practice has always been to encourage benefits for local communities. Our example is with the indigenous people in Canada. And I think you’ll see that Canadian companies which are working in various parts of the world including Africa are very community-oriented.

What are the setbacks your companies have experienced while operating in some of the African markets?

The setbacks, I think, aside from the fact that you’ve got this global low price, which is a huge constraint, the part that they tend to have concerns with is making sure that there is an understanding of governance practices that meet up international standards and that you have an open and transparent market. One of the things that we are trying to assist governments with is capacity building.

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TALKING POINT We work with governments around the world to sort of say; look, here are some of the best practices that you might want to look at. It’s not being prescriptive, it’s like saying, here’s what worked in other countries and here’s what didn’t work, and maybe you as a country, might want to look at some of these practices. We’ve been utilized by the World Bank, by the African Development Bank to go and share some of these best practices with countries of the world. So, what’s the challenge is making sure that the governments have transparent legal system, governance system; whether it’s the petroleum bill or not, just having the policies in place that support the oil and gas industry, and in a sustainable manner for the communities.

You’ve been involved in trade missions for Canada. What has been your role in the African oil market so far?

There are probably two things. A big part for me has been educating Canadian companies about Africa. There are 54 countries in Africa, and I have to make sure they understand that there’s a difference between Nigeria, Tanzania, Egypt and so on. Though a homogenous continent, the countries are very unique. And they need to be specific about the countries and how to work in after identifying the opportunities they seek. The other part is that our job is to open the doors. We want to create linkages between our companies and companies in Africa or business leaders or governments.

We open the doors and the companies make decisions whether to step through. So, we are a bridge; well connected. That is primarily what our role is.

So how do you work with governments of all these countries?

We simply ask, what are your challenges; how can we share some of our experiences in the oil and gas sector? We’ve been doing this for a hundred years; we’ve made a lot of mistakes. How can we help you? And I think that a lot of governments and NOCs are very receptive in terms of hearing this message. So, that’s the thing that we’re looking for. We try to check what is it these governments consider in an ideal partner, things they are looking for, that we can help provide solutions to. We seek mutual benefits. What will be beneficial for your country will also be something that will benefit us too. We’re looking for those kinds of relationships where we can feel that we’re partners. That’s the type of relationships that we’re looking for with governments.

In carrying out these trade missions, what value additions do you have for locals? Do you have specific programme for each specific country on this?

Yeah, I think you need to have a specific programme for each country. Because when we come to a country we don’t just tell them these are all the things that we can do.

No, we ask them to tell us the issues that

they have. We don’t want be the ones prescribing for what we think the issues should be. Governments have asked us to tell them what services we offer but we respond by asking them what their issues are then we could say, these are our expertise and if it’s something we offer.

Can you give an overview of the programmes you have for Africa?

Alberta has an arrangement where groups can learn how Alberta has managed its oil and gas industry. So, we’ve had a number of countries who have come to our border to spend time to learn about that governance structure. They’ve also looked at, when you’ve collected the revenue, how do you disburse it, and how do you put it into different programmes? The other piece has been how do you develop the sovereign wealth fund; and how do you utilize it? How does it support infrastructure, how does it support education? So those are the type of things that we’ve looked at. We’ve also had some specific issues, like ‘how did we developed our physical transparency’. Those are the types of issues we’ve handled under the extractive industry. We’ve also had countries ask us to look at low-cost housing.

How do we accommodate people in poverty, people who can’t afford a house; how do you provide a safety net to make sure that those kinds of needs are addressed? So, it’s the countries that tell us what they need.

PHOTO GALLERY

SNAPSHOTS FROM EGYPT PETROLEUM SHOW, CAIRO EGYPT Under the theme: “Gateway to Egypt’s new oil and gas opportunities, Egypt Petroleum Show “EGYPS 2017, held between February 14th – 16th, 2017 under the patronage of His Excellency Abdel Fattah El Sisi, President of The Arab Republic of Egypt.

23rd Africa Oil Week

Chairman Seplat Dr A.B.C Orjiako (Middle)Flanked by the seplat team and OER Editor (in Blue) at the Africa Oil week exhibition

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Orient Energy Review February, 2017

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GHANA REPORTS

NPA Refutes Imminent Fuel Shortage Claim

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he National Petroleum Authority (NPA) has urged the public to dismiss claims that there could be an imminent fuel shortage for petrol and LPG. According to the NPA, there is enough fuel to last the nation for the next six weeks adding as far as the NPA is concerned, there is a current stock of 200 million liters diesel nd 100 million litres of petrol.

In a statement signed by the PRO of NPA Wednesday, Yaro Kasambata, assured that there are no challenges at the discharging terminals

at the country’s ports and ensured that there is fairness in the process leading up to the discharge of cargoes of all importers.

The reaction is in response to an earlier statement from energy thinktank Institute for Energy Security (IES) alluding that Ghana’s fuel supplies are expected to face serious disruptions due to the unanticipated shut-down of the Tema Oil Refinery (TOR), and port congestion facing the oil companies.

The Principal Research Analyst of the Petroleum Unit of the Institute, Richmond Rockson said in a statement that the current situation is compelling oil companies to postpone their import and export programmes; amid acute discharge and loading constraint.

“As a result, stocks of the two main petroleum products consumed in the country have fallen short of the mandatory strategic level of 6-weeks, at a time when economic

activities have picked up across the country after the General Election and Christmas festivities,” the statement said.

At the time of filing in this report, the country’s stock of Gasoline and Gasoil at both the TOR and the Bulk Oil Storage and Transportation Company (BOST) installations across the country was 86,000 metric tonnes, the statement added.

“Also, the stocks held in-tank at Bulk Oil Distribution Companies (BDC’s) facilities in Tema stood at 24,750 metric tonnes. A year ago, the combined stock of these fuel stood at 451,200 metric tonnes; a little above the mandatory 6- weeks requirement,” it said.

However, NPA CEO, Hassan Tampuli says by the end of this week, new stocks will be discharged.

Newmont Committed To Health, Welfare of Locals Newmont Ghana has said it is committed to transparently engaging and partnering with local communities to improve lives and mitigate impacts associated with its operations.

The miner said in a statement that in line with its “purpose to create value and improve lives through sustainable and responsible mining,” it “welcomes all well-intentioned input to enhance mining’s benefits to local communities.”

Paul Sowley, Newmont Ghana’s Senior Director for Sustainability and External Relations, in response to allegations in certain media outlets based on reports developed by non-governmental organisations (NGOs), WACAM and Ford Foundation said: “Protecting and promoting the health and welfare of our employees and local communities is a top priority for us.”

“We are currently studying the accuracy of the reports and will provide further information once we complete the review,” said Mr. Sowley. “Our review will include following up with the reports’ authors to better understand their data collection, analysis and assessment methods, which seem to lack the scientific rigour to support their conclusions.”

Impact mitigation.

Newmont Ghana said it’s mitigation programmes in Ahafo, namely the Agricultural Improvement and Land Access Programme, Vulnerable Peoples’ Programme and Skills Development Improvement Programme, have supported more than 10,000 people. In addition, the Company has installed new wells, monitored ground water supplies, improved

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sanitation and worked closely with local communities on monitoring and protecting water quality.

In addition, the Newmont Ahafo Development Foundation, which has accrued more than Gh¢54.2million, is “positively enhancing lives with the award of over 8,000 scholarships, 100 infrastructure projects (including schools, libraries, health facilities and potable water projects). The Foundation also has given out micro-credit support to approximately 1,500 beneficiaries, most of them women,” the statement said.

Gender mainstreaming Newmont also added that it has undertaken deliberate efforts to empower women in all spheres of development. From its inception, the Ahafo mine instituted a gender mainstreaming policy to guide all social development interventions, it said.

In addition to the formation of a Women Consultative Committee, which has had “tremendous impact on women in the 10 host communities,” Newmont said “there has been an appreciable level of inclusion of women in the local economy. It is worthy to note that more than 40 percent of the scholarships and 98 percent of the micro-credit beneficiaries have been women.”

Newmont said it recognises that there remain opportunities to improve lives and mitigate impacts. Through ongoing, transparent and responsible partnership with local communities, the miner said it will help create value and improve lives through sustainable and responsible mining.

About Newmont Ghana Africa is one of five core operating districts of Newmont Mining Corporation, the second largest gold company in the world (www.newmont.com). Newmont holds two gold mining operations in Ghana: the Ahafo mine in the Brong-Ahafo Region and the Akyem mine in the Eastern Region. The company currently employs approximately 4,000 employees and contractors.

Its exploration and development focus is centred on Ghana. Newmont regularly review other opportunities throughout the continent and are currently undertaking greenfield exploration activities in Ethiopia.

Newmont is the only gold company listed in the S&P 500 index and in 2007 became the first gold company selected to be part of the Dow Jones Sustainability World Index. In 2016, Newmont was ranked the DJSI global leader in sustainability for the second consecutive year. The Akyem and Ahafo mines were in 2016 also voted the best company in Ghana and the mining company of the year by the Ghana Investment Promotion Council and the Ghana Chamber of Mines, respectively.

Newmont’s industry leading performance is reflected through Newmont Ghana’s high standards in environmental management, health and safety for its employees and creating value and opportunity for its host communities and Newmont’s shareholders.

Source: http://www.classfmonline.com

Orient Energy Review February, 2017 23

SUBSEA EXPO

JDR Set to Expand Operations in Nigeria UK Company seeks to Domicile Subsea Technology in Nigeria

By Nneka Ezeemo, Aberdeen, UK

Richard Turner and Tom Nightingale

J

DR, a world-class provider of subsea technologies and services connecting the global offshore energy industry, is set to expand its operations in the Nigerian Oil and gas sector. The company also looks to building capacity of its local workforce in Nigeria, thereby complying with provisions in the Nigerian Content Act. Speaking with Orient Energy Review at the just concluded Subsea Expo in Aberdeen, UK, Richard Turner, JDR’s Chief Operating Officer, said his company has a lot to offer the global offshore Energy market, with their manufacturing centre in the UK and operating centres in

Africa.

“We are solution providers, we operate in the entire offshore energy market producing subsea production umbilical and also subsea power cable, we are a global business although our manufacturing centre is based largely in UK, we export all around the world, we’ve got a lot of experience working predominantly in Africa, we’ve got a lot of IWOCS (Intervention Workover Control Systems) product, some of our customers are FMC and Aker and they are operated in-country”, Turner said.

He spoke further about JDR’s involvement in the Abo 12 Phase 3 Project

24 Orient Energy Review February, 2017

saying: “we’ve got installed capacity in Nigeria. Last year, we executed the Abo 12 phase 3 project, which is the deepwater electro-hydraulic steel tube hybrid umbilical. The 1.55km umbilical was designed to include a combination of hydraulic control and chemical hoses, low voltage signal cables and a central bundle of steel tube chemical supply lines. The umbilical system connects an existing Subsea Distribution Unit (SDU) to a new well through the use of two umbilical termination units (UTA).

JDR manufactured and delivered the umbilical on a 9.2m installation reel from their deep-water, quayside facility in Hartlepool, UK.

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SUBSEA EXPO

“That project was a ‘first’ for Nigerian Content as it also provided for the training of Nigerian nationals in the integration, testing, installation and commissioning of the umbilical. This training took place at JDR’s facility in Hartlepool and transferred valuable knowledge in key activities related to the final stages of the project before load-out and beyond. We worked closely with other organisations in Nigeria to comply with the Local Content requirements as well”, Turner emphasized.

Moreover, the Chief Operating Officer further expatiated on their plans to expand their scope of operations in Nigeria with a clear view of engaging more locals, build capacity and engage in local suppliers development, thereby fulfilling the provisions in Nigeria’s Local Content Policy saying: “In terms of future potentials to increase our level of compliance with the Local Content policy, We’ve looked into doing the testing, termination, welding and fabrication scopes in country. We trained some Nigerian nationals in the integration, testing, installation and commissioning of the umbilical termination. We’ve also got assets on the ground in Nigeria for Offshore mobilisations for this integrations and testing works, we can offer that today, we’ve looked into potentially supporting development of local suppliers in things like low voltage cables, the supply chain is not yet in-country, so we’ve looked into a five year plan to support these community development structures to meet the qualification requirements to go in the product” said Turners.

“But it’s not just a case of going into Nigeria, said Tai Fadipe-Davids, JDR’s Business Development Manager, Oil and Gas, Africa Region; recently we have been operating in West Africa as well, but it has been indirectly. What we are trying to do now is actually to establish ourselves better in the region so that the Nigerian Government and local community can see us as more visible, so we’ve been partnering with other people. But in the next couple of years as Richard said we have a long term plan where people will begin to see JDR NIGERIA in a bigger capacity and we can begin to work with the operators and save them cost, and with that, it becomes a win-win

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arrangement, instead of them going to somebody else to order something before it comes round to us, they will deal directly with us and we can save them some money, in that way they get good value for what they invested.

But why Africa, what is the attraction?

Tom Nightingale, JDR’s Strategy and Marketing Manager gave a passionate response: “a lot of the markets especially in West Africa is deep oil, this is where we’ve got the best technology available in the market to offer especially for our production umbilical and our IWOCS products and a lot of the biggest companies and the most prestigious projects are actually in Nigeria and Angola, we won’t allow the competition take us out, we want a piece of the action too, we have to be in these places for us to be successful, he said.

For Glyn Francis, Sales Manager IWOC Umblicals, the long standing patronage they enjoy from clients is proof they are doing a good job, he said: “We have a long track record in West Africa with IWOC products, if you look at most of the fields they are a JDR umbilicals and a JDR IWOC operating system in there, so we’ve been doing that for so many years and would like to carry on” Francis said.

Challenges encountered in the process of domiciling Operations in Nigeria?

“Yes, there are plenty of challenges but lots and lots of opportunities”, says Chief Operating Officer, Richard Turner; “ it’s a complex market, also from a competitive situation there are a lot of majors, we are a relatively small company compared to our competitors, and some of them already have presence in the country” “The Local Content requirements are onerous and also very unclear, it’s quite difficult to understand exactly what the requirement is, I think some of it is a requirement while some of it is a request and we find it quite difficult to understand exactly what is required to operate in country. Things like visas are quite difficult to get, the process again is complicated, but this is not limited to Nigeria only, I’ve worked in Angola and even when I had a plant in a factory in Angola it was almost impossible to get in. I guess it’s all manageable, fortunately we’ve got a lot of people who have a lot of experi-

ences working in country so we are able to plan our business model accordingly bearing in mind the geographical complexities we have to grapple with while operating around the region, so yes there are a lot of challenges but because we have the right technology, the right people with the right experience, I’m sure we can be very successful,” Turner emphasized.

JDR was formed in the early 1990s when two of the most respected names in the industry Jacques Cable Systems (UK) and De Regt Special Cable (Holland) merged. As JDR the company has in excess of 75 years combined experience in the design and manufacture of subsea umbilicals and power cables that operate in harsh, dynamic, subsea environments.

JDR’s scope of work on the Abo project included fast track design and manufacture of a 1550m Steel Tube Hybrid static umbilical. JDR also supplied 2x umbilical terminations comprising flanged armour body and BSR, plus spool piece for integration to free issued UTA’s. JDR also integrated the UTA’s as well as manufacturing 150m of post-production qualification sample for bend stiffness, crush and tensile testing.

JDR Services also included flushing and filling, Project Management and Documentation, Design Engineering, Analysis (APS, load effects, thermal review, on bottom stability & flow) and 3rd Party Verification of Umbilical FAT.

Tai Fadipe (R) and the Brazilians

Orient Energy Review February, 2017 25

NNPC/Chevron Joint Venture: Consistent commitment to Nigeria Content Development • Spends $3.6 Billion on NCD in 2015 Chevron Nigeria Limited (CNL), the Operator of the NNPC/Chevron Joint Venture has unwavering commitment to Nigeria Content Development (NCD). Since the 1990s, the Company has implemented strategies for training, capacity building, and employment of Nigerians; provision of contracts and procurement opportunities to Nigerians on its major capital projects, including the Escravos Gas-to-Liquids (EGTL), Agbami, Meren Gas Gathering Compression Platform (GGCP) & Sonam Non-Associated Gas Well Platform (NWP), Escravos Produced Water Disposal (PWD) and others. In 2015 alone, Chevron spent $3.6 Billion on NCD.

Sonam NWP Jacket fabricated by Nigerdock Plc during loadout at Nigerdock yard, Snake Island, Lagos State

The following are the visuals of our recent NCD stories and achievements.

Sonam NWP topside during installation

Recognition and Award for CNL’s efforts in NCD: Businessday Newspaper presented an award to CNL as the Best Local Content Compliant JV Company in 2015 due to the following achievements: • Robust Human Capacity Development Initiative which included the training of 161 Nigerians in construction processes (welding, fitting, scaffolding etc.) at Nigerdock in collaboration with HHI among others • 48 Nigerian understudies successfully took over roles from expatriates • The engagement of Nigerian contractors like Sigmund Engineering, SCC Pipe Mill Abuja, etc • The Company achieved 100% of its target budget on sponsorship and partnership which included providing an advance payment of over $5 million to Gramen Petroserve Nigeria Limited, an indigenous company with 100% Nigerian workforce to build a jetty for load out of fabricated structures for its Escravos Produced Water Disposal (PWD) & Meji Living Quarters projects

The Sonam Non-Associated Gas Wellhead Platform is a 300-MMSCFD capacity topside (weighing about 3,000 metric tonnes) fabricated by Nigerdock Plc - an indigenous company

Installed Meren GGCP platform

Nigerians working on Sonam Non-Associated Gas Well Platform (NWP) at Nigerdock Plc

Brownfield modification work by Prime Sources Limited (PSL) at Malu Production Platform to gather gas from Malu to Meren GGCP as part of ongoing gas flaring elimination efforts in our production facility

First made-in-Nigeria Subsea Horizontal Xmas Tree: The Horizontal type Subsea Wellhead Xmas Tree (XT) which is rated to 10,000 psi working pressure and weighs 55 metric tonnes was fully assembled by FMC Technologies, the Subsea Equipment Vendor (SEV) to the Agbami Phase 3 project at the Nigerian manufacturing plant in the Federal Ocean Terminal (FOT) Onne, Rivers State

Idmon Engineering and Construction Limited, a fully indigenous company, successfully completed the fabrication and load-out of the Okan Pig Receiver Platform (PRP) Deck and Bridge in March 2016 incident and injury free; working over 500,000 man-hours and fabricating over 800 tonnes of steel

Okan PRP Jacket fabricated and loaded out Globestar Yard Warri

Cross section of Local Community Contractors (LCCs) during a capacity development programme on the use of the Nigerian Petroleum Exchange (NiPeX) portal for business opportunities in the oil and gas industry

161 Nigerians with their trainers and CNL officials during Construction training Close-out ceremony at Nigerdock Plc. The training program, which was for the Meren Gas Gathering and Compression Platform (GGCP) and Sonam Non-associated Gas Wellhead Platform (NWP) Field Development Project, covered areas such as work-pack engineering, lifting operations, scaffolding and welding

Four Nigerians with their trainers at a subsea engineering training programme in France. The training was aimed at equipping participants with the requisite technical skills on the Agbami Phase 3 Project which added five new wells and two additional drill centers. Chevron sponsored the training in partnership with the Nigerian Content Development and Monitoring Board (NCDMB) and Technip Offshore Nigeria Limited

Workers of Marine Platform Limited, a fully owned Nigerian company installing an ancillary equipment on the flowline during the Agbami Phase 3 Project

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13

COVER

Egina FPSO: Nigerian Companies Come Of Age Showcasing Competence with global best practice

By Margret Nongo-Okojokwu Godspower Ike

A

number of indigenous companies had been involved in Total’s Egina project and these companies have blazed trails, despite the fact that only a few gave them any chance.

This article attempts to highlight the various companies that played major roles in the multi-billion dollars project and the fact that they were able to be prove that Nigerian companies in the petroleum servicing sector have come of age and can hold their own against their counterparts worldwide.

T

otal’s Egina Floating, Production, Storage and Offloading, FPSO, project has helped in proving one fact in the Nigerian petroleum sector: that Nigerian oil and gas servicing companies have come of age and when given the opportunity, can compete favourably with their peers across the globe.

Following the signing of the Final Investment Decision, FID, on the Egina deepwater field, Total awarded

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the contract for the construction of the FPSO and other related projects.

Specifically, the FPSO is being built by Samsung Heavy Industries of Korea at a cost of $3.3 billion, while the entire Egina field development project, including the FPSO is expected to cost around $16 billion on completion.

The company had stated that the 200,000 barrels per day capacity FPSO vessel had been scheduled to arrive

Nigeria in March or April 2017, where it is expected that the Apapa Wharf would be blocked when the 300 metres FPSO would sail in.

Located some 130 kilometre off the coast of Nigeria at water depths of more than 1,500 meters,

Total said the Egina oil field is one of its most ambitious ultra-deep offshore projects, adding that for the most part,

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the project is being developed locally to accelerate the pace of technology transfer and expand the local industrial fabric.

On its site, the company stated that it began the drilling program on the Egina field in December 2014, noting that the intense project would keep two rigs busy for a total of 3,000 days.

Five out of the planned 44 subsea wells had already been drilled, at water depths of between 1,400 meters and 1,700 meters, while 13 more would be completed when the field comes on stream.

Total plans to connect the fields, using umbilicals and risers, to an FPSO vessel designed to hold 2.3 million barrels of oil.

The field was discovered in December 2003 when the Egina-1 well was drilled.

Following the discovery, the appraisal well Egina-2 was drilled in October 2004.

The appraisal programme and seismic data processing resulted in the Egina-3 well drilling in September 2006, which occurred at a water depth of approximately 1,500m. Following this, Egina-4 was drilled in November 2006 and Egina-5 was drilled in January 2007.

The company said the Egina Project was in line with the Nigerian Oil and Gas Industry Content Development (NOGICD) Act of 2010, stressing that despite the challenges in the operating environment, Total was in full compliance to the Act. The company disclosed that 70 per cent of the project is local content, adding that the framework of Egina is always local content.

In line with this, and as a pointer to the improving fortunes of indigenous companies, Total revealed that a lot of the fabrication work for Egina field, which is located two kilometers into the waters, had been completed by Nestoil, Nigerdock, Dorman Long, Aveon, as well as Saipem.

The Executive Secretary of the Nigerian Content Development and Monitoring Board, NCDMB, Mr. Simbi Wabote, said it is heart-warming to note that Egina provided a good opportunity for Nigerian companies to demonstrate their capacity and maturity since the enactment of the Nigerian Oil and Gas Industry Content Development Act in 2010.

Wabote said the NCDMB would soon embark on the categorisation of fab-

rication yards and other major service companies for specific work scopes in a way that would facilitate contract opportunities.

For Saipem, which has been in Nigeria since the late 1960s, the Egina project implementation plan confirms its strong commitment to Local Content in the country.

The company said its scope of work includes engineering, procurement, fabrication, installation and pre-commissioning of 52 kilometres of oil production and water injection flow lines, 12 flexible jumpers, 20 kilometres of gas export pipelines, 80 kilometres of umbilicals, and of the mooring and offloading systems.

It stated that the marine activities would be performed throughout 2016, continuing to the second quarter of 2017.

Saipem said the vast majority of fabrication works is being performed at its Rumuorlumeni Yard in Port Harcourt, which would also be used as a logistics base.

On the part of Nigerdock, the company completed the largest in-country constructed oil facility, which has sailed to its location to accelerate oil production from the Egina field.

Specifically, Nigerdock successfully completed the fabrication and the sail away of the Flare Tower for the Egina FPSO project for Total.

Nigerdock was selected by Samsung/ Total for critical in-country fabrication works and training services as the provider of choice.

The flare tower structure which weighs in at 732 tonnes was completed on time, loaded out and sailed away on March 24, 2016. It is one of a number of structures fabricated by Nigerdock at its Fabrication Yard on Snake Island Integrated Free Zone for Samsung Heavy Industries Egina FPSO project.

It stated that it expended over 1.7 million man hours on the project, and has helped generate employment for hundreds of Nigerians while also creating the opportunity for the provision of thousands of man-hours of specialised training.

Energy Works Technology Limited, EWT, a subsidiary of the Obijackson Group, had completed the fabrication of nine Oil Loading Terminal (OLT) buoy anchor mooring piles for the Egina field.

The piles were inaugurated in January 2017, during the load-out and sail-away ceremony at the EWT Fabrication Yard, Nestoil Industrial Area, Abuloma Jetty, Port Harcourt.EWT said, with the

project, it achieved a significant milestone in the oil and gas industry in Nigeria.

It said more than 98 per cent of the resources used in the project were all local content, while it also noted that every single thing that was done in the project was done in Nigeria by Nigerian experts with diverse experiences.

Commenting on the role of the company in the project, Group Managing Director/Chief Executive Officer, Obijackson Group, Mr. Ernest Azudialu-Obiejesi, said,

Saipem had been involved in all of Nigeria’s major developments as one of the few international contractors able to operate maximizing the local content, ensuring business sustainability and therefore fulfilling the country requirements.

The remaining works, the company said, would continue through to the first quarter of 2017 as contracted.

The company said the fabrication for Egina was a big success, being delivered on time and budget and to world class specifications.

30 Orient Energy Review February, 2017

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HRH. Brigadier General (rtd) Bright Ateke Fibionumama, Anany Anabo 1 of Abuloma Kingdom; Dr .Ernest Azudialu-Obiejesi, GMD, Obijackson Group; Engr. Simbi Wabote, executive secretary, Nigerian Content Development and Monitoring Board (NCDMB); Guido D’Aloisio, MD, SAIPEM and Gabriel Oramasionwu, GCCO, Energy Works Technology (EWT) during the load-out and sail-away ceremony of OLT Bouy Mooring Piles fabricated by Energy Works Technology (EWT), a subsidiary of the Obijackson Group, for the Tupni-Egina Project, at the Nestoil Industrial Area, Abuloma, Port Harcourt on Tuesday, January 17, 2017 “The important thing is that as a company, we have been part of the fabrication to actualise this dream. What it now means is that future development will continue to grow capacity until Nigeria is able to build a complete FPSO system integrated fully in Nigeria, and that is our aspiration.”

In his own reaction to the project

by EWT, Executive Secretary, Nigerian Content Development and Monitoring Board, NCDMB, Mr. Simbi Wabote, said the OLT was the second of the four scopes subcontracted to EWT by Saipem Contracting Nigeria Limited, which is the main contractor for the engineering, procurement, construction and installation of the umbilicals, flowlines and risers www.orientenergyreview.com

scope of the Egina main field development.

He said EWT had earlier participated in the Egina FPSO scope and fabricated 11 pressure vessels for the FPSO topside and hull compartments through a subcontract from Samsung Heavy Industries Nigeria.Wabote said, “The achievements of the EWT are similar to the performance of other Nigerian service companies on different scopes of the Egina deepwater project.

The Board is proud of the EWT, particularly for the giant strides it has made within six years of commencing operations.

“Today, the company can be

counted among the heavy fabrication yards in Nigeria. In July 2015, officials of the board were here to inaugurate the first 90 millimeters mm stainless steel clad vessel fabricated in Nigeria for the SPDC’s Soku Field Development plan.

“As we celebrate the EWT, I call on industry stakeholders, particularly the operating companies and the EPCI contractors to ensure that this facility is well patronised for fabrication solutions.”

Obijackson Group is a business conglomerate with interests in oil and gas exploration and production, pipeline construction,

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pressure vessel fabrication, power generation, dredging and marine logistics, aviation, among others.

Other subsidiaries of the group are Nestoil Limited, Neconde Energy, Century Power Generation Limited, IMPaC Engineering Limited, Shipside Drydock Limited, Gobowen Exploration and Production Limited, Scorpio Drilling International, Hammakopp Consortium Limited, B&Q Drilling Limited and Nesthak HDD Services Limited.

Also speaking at the Egina OLT Piles Loadout Ceremony, Mr. Felix EKAM – GM Egina Project Control, Partners and Authorities Relations, said that the Egina Project has the highest level of Nigerian Content of any Oil & Gas project to date, According to him, “The Egina field development is of major significance to all stakeholders. When completed, Egina will add 200,000 barrels per day to the national oil production by 2018.

The significant localization level on the project is directly contributing to building local expertise, facilities and employment in the country.

32

“We are very proud that Egina Project has the highest level of Nigerian Content of any Oil & Gas project to date. Our Project Management Team and all the main contractors’ offices are based in Nigeria. About 94 percent of the project’s Basic Engineering was performed in Nigeria

by Nigerian companies. Similarly, the Detailed Engineering represented about 85 percent of engineering man-hours spent in Nigeria. The project’s in-country fabrication activities represent about 60,000 tons of equipment.

“The local content commitments undertaken by our main contractors like SAIPEM were always meant to have a trickledown effect on their local partners and subcontractors in terms additional infrastructure, exposure to new technology, development of human resources and new fields of operation, “ Ekam said.

Another company that showcased its expertise on the Egina project is Pipe Coaters Nigeria Limited (PCN), which recently celebrated comple tion of the coating and cut back

Orient Energy Review February, 2017

of the last pipe for the Egina UFR (umbilicals, flowlines and risers) project at the Onne Oil and Gas Free Zone, Rivers State.

At a ceremony to mark the successful completion of the coating at the Onne Oil and Gas Free Zone on Wednesday, PCN Country Manager, Mr. Ricardo Capria, had stated that the Egina pipe coating is the largest in the oil and gas industry.

He said, “The final pipe for the largest pipe-coating project the oil and gas industry has seen to date– consisting of 6,000 tons of material – has been coated. The work was performed by the only plant in Africa capable of applying the sophisticated coating technology on large diameter pipe, Pipe Coaters Nigeria Limited (PCN).

“PCN recently applied a specialized coating on the final pipe for the Egina field, celebrating a major milestone for a project that required extensive training of local employ ees, plant qualification, and the development and full-scale testing of a specially formulated material to withstand the harsh conditions of the ultra deepwater application.”

Capria said PCN collaborated with Tenaris, a global supplier of steel pipe products with a strong presence in Nigeria, on developing a proprietary component to the formula for the coating material.

He said, “The specially formulated material, 5 Layer Syntactic Polypropylene (5LsynPP) Thermal Insulation coating, was tested and proven to: improve resistance to corrosion, improve flow assurance and prevent paraffin deposits.

“The amount of coating used for the Egina project is the largest in the world with 6,000 tons of the proprietary material applied – in five-inch thick layers – on 14″ and 18″ pipes. PCN employees received specialized training to carry out the production and advanced coating application. Its plant, located in the Onne Oil and Gas Free Zone, underwent a yearlong qualification process in 2014 to ensure the facility was capable of meeting the customers’ strict requirements from safety, quality and production.” www.orientenergyreview.com

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The company noted that about 800,000 man-hours were worked, locally, on the challenging coating project with 90 per cent of employees with PCN. Saipem was awarded the contract

by Total Upstream Nigeria for the subsea development of Egina, handling the engineering, procurement, commissioning and installation.

In 2013, Saipem selected PCN to produce and apply the advanced coating required for the project.

PCN is one of the largest pipe-coating companies in Nigeria, providing a wide range of products and services for the oil and gas industry since 1996.

The company was formed as a joint alliance with Tenaris in 2011 to serve customers in West Africa with complete made in Nigeria onshore and offshore line pipe and coating packages.

Another Nigerian company, Bell Oil and Gas, in association with its partner, Vallourec, delivered to the Egina Project the full package of 24,000 tons subsea line pipe, comprising 16,000 tonnes of flowlines used for production, water injection and gas export lines, and 8,000 tons for a riser pipe-in-pipe construction.

Vallourec is to supply over 1,700 tons of pipe, adding that the project management team of the Pipe Project Division is coordinating quality planning, production and delivery for over 250 different items from the factories in France, Germany and Brazil.

Aveon Offshore Limited, a Nigerian oil and gas engineering and fabrication company, was awarded the contract for the provision of more than 5,000 tonnes of subsea structures.

The project is being executed by Aveon Offshore at its 240,000 square meter fabrication yard in Rumuolumeni, near Port Harcourt and is expected to generate over one million productive man-hours of work.

First steel cutting occurred in December 2013 and the load-out and sail-away of the subsea structures www.orientenergyreview.com

took place in 2015.

Mr. Tein George, Chairman, Aveon Offshore Limited said, “The award of this project significantly expands the depth and boundary of our capabilities and provides reassurance to the Nigerian Oil and Gas industry that we are a very dependable local partner.

“It also proves our willingness and readiness to make the investments required to meet the very exacting expectations of our clients in respect of safety, schedule and quality.”

As at today, the company says it has successfully completed fabrication of six Foundation Support Structures and loaded out these components in respect of the Egina Subsea Production System (Egina SPS) project. The load out and sail away of these structures occurred at the end of November 2016.

Aveon Offshore, who was awarded part of the subsea contract by the American oil service company FMC Technologies, says it has already delivered some of the project scope including sixteen Umbilical Termination Boxes and subsea tree fabrications (Frames, Permanent Guide Base and Gasmats) throughout 2015 and 2016 and assures that “the fabrication of remaining subsea tree fabrications will be completed for delivery by the end of the 1st Quarter of 2017.

Nigerdock successfully completed the fabrication and the sail away of the Flare Tower for the Egina FPSO roject for Total.

Aveon Offshore successfully completed fabrication of six Foundation Support Structures for the Egina FPSO

Lagos Deep Offshore Logistic (LADOL) Base, an indigenous oil and gas logistics firm is currently working on the sections of the FPSO at its Free zone base in Apapa.Managing Director of the company, Dr Amy Jadesimi, said the yard is where the first ever locally fabricated Floating Production Storage Offloading (FPSO) project took place, noting that the implementation of the $3.8 billion project in-country would boost capacity and aid the national economy.

According to her, the vessel with a length of 340 meters and 70 meters wide has reached an advanced stage of completion, as the entire project had already gulped about $4 billion in which LADOL had put in $500 million in local content.She said: “This project is first of its kind in Africa and sitting at an indigenous facility like LADOL, speaks volumes of our national resolve and determination to take our pride of place as the regional hub.

“We started development in 2004, when we got the first lease from NPA, and our mission and vision has been to see a situation where Nigeria will join its foreign counterparts such as Korea, and China, in creating industrial zones that will take us to the future.

“We look forward to moving Nigeria forward along the line of other developed countries of the world,where private indigenous development is key to economic growth.

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It makes sense because Nigeria has a huge market for this, going by the population.”

Meanwhile, the major concern to most International Oil Companies and major operators still remains in the aspect of capability, ensuring required capacity is available and that these indigenous firms can deliver on the required quality.

According to Mr. Solomon Ewanehi, Group CEO Solewant Group/ Pipe coating Company Nigerian indigenous players have come of age in the delivery of quality and value added projects in Nigeria.

He said “we have actually become instruments for domestication of technology in Nigeria. The advocacy on the “Made-in-Nigeria” and “Buy Nigeria” campaign has been making the rounds lately, sounding really like a call for all in Nigeria.But the focus should be on what drives project owners to Nigerian indigenous company product and service delivery.

“Basically, clients want value for their money and worthy return on their investments. Nigerian indigenous oil and gas companies had in the past successfully executed classified projects from engineering, procurement construction, and protection of pipes/metals to installation and maintenance of state of the art facilities in Nigeria utilising global best practices. Strategic line 34

pipe coatings are now produced in factories here in Nigeria, Standard and very high end fabrications and construction of oil and gas structures are being delivered by Nigerian companies, to mention but a few,” said Ewanehi.

Ewanehi whose top notch Pipe coating facility is currently ranked the largest in Africa, further spoke on the role of indigenous companies to stimulate other aspects of the economy using the oil and gas industry platform,emphasis should therefore be laid on premium quality and value as this would be the way project owners will willingly and gradually bid goodbye to full importation of products and services, and settle for a Nigerian made product and services.,” Ewanehi said.

Taking another angle to this, Orient Energy Review spoke to an expert in Human Capital Development, Dr. Njideka Kelley (aka Dr. Njideka Nwapa-Ibuaka), the Principal of New Generation Consulting Resource Solutions (NGCRS) a US and Nigeria based Human Resources and consulting firm, she spoke on policies and various regulations guiding adequate capacity development in the country and how role of the government in making this work, she says: “Oil and Gas in Nigeria has been influenced by various Laws and Regulations; administered through Local, National and other government organizations competing for the interest of State and country.

“The Nigerian Government regulates exploration and production of natural gas and oil as prescribed by the Nigerian Constitution and Petroleum Act (PA) which gives ownership and control of oil and gas (Petroleum) to Nigerian Government on behalf of the people of Nigeria.

Notable government institutions: Ministry of Petroleum Resources (MPR), Nigerian National Petroleum Corporation (NNPC) and the Department of Petroleum Resources; these institutions ensure that operations within the oil and gas industry are regulated to specified standard.

“Having said that, Nigerian compa-

Orient Energy Review February, 2017

nies have been compliant according to the laws so I can emphatically say that the trend has been to supply capacity to the oil and gas companies. Capacity training has been at the core of the Nigerian oil and gas industries.

Training has been seen as very relevant in advancing the Local content laws. So Nigerian organizations have been steadfast in ensuring that Nigerian employees gain the required competence that they need to take over from their foreign counterparts both in the technical and administrative levels. Nigerian companies in the Oil and gas sector have been delivering since the days of Ernest Nwapa at the NCDMB primarily due to his leadership and enforcement of the law.

“Now with the turn of the economy leading to the ban on certain types of training including foreign training, it seems that many organizations including my consulting company New Generation have slowed down in delivering that the same competency within the oil and gas industry.” Kelley said.

Dr Kelley, who was also a former consultant to Kaztec Engineering Ltd., further opined that the participation of indigenous companies in the Egina project means a lot for the entire industry. Referring to the Egina FPSO, which has been described as a “flagship project” for Total and the Ministry of petroleum resources. ‘‘This is a very important project and its timing is crucial.

Companies like LADOL have been able to build a full capacity fabrication yard and are geared to create 50,000 jobs. Those 50,000 jobs are people that will need training in assembly, production, Human Resources, fabrication. Countries like South Africa are targeted to send their vessels to Nigeria for that purpose. Employment opportunities will emerge as a result and that is a big deal. It is the local content law that structured, framed and mapped out this success.LADOL might now very well be called the leader in capacity development and the local content law made it possible’’.

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achieve its strategic intent for facility development and execution.

“Once, the strategic purpose has been achieved, the industry should be able to identify the resources, capabilities and competences required to close the gap between the strategic purpose and the current economic situation in Nigeria without compromising standard. So, appropriated company resources acquisition, allocation and utilization are the key factor that decides the industry operation efficiency and profitability,” said Ewanehi.

Dr Amy Jadesimi, Managing Director LADOL

She added, ‘‘gone are the days when Nigerian companies sending out jobs to boost other economies and gladly many other companies are following suit.As a trainer and consultant, that translates to sustainable work for me and others.

So as far as whether the economy will boom, I can predict that the long awaited turn-around is soon set to sail, thanks to the Egina project.” Kelley said With the present state of the Nigerian economy, one wonders what can be done to help utilise and optimise the capabilities and competences of Nigerian companies. Mr. Solomon Ewanehi who is also an ex-officio member of the Petroleum Technology Association of Nigeria, (PETAN) believes that once the Oil and gas industry’s goals and objectives should align with the available resources and capabilities, leveraging on its core competencies, value addition and assisting the industry to achieve its strategic intent for facility development and execution: “ for us in PETAN, we have often said that Nigerian companies should be awarded projects on the basis of competence and not Patronage.

“Having said that, you will also agree with me that Oil and gas industry goals and objectives should align with the available resources and capabilities, leveraging on its core competencies, value addition and assisting the industry to www.orientenergyreview.com

construction of state of the act technological facilities through the provision of low interest loans and then create several incentives for those investors who want to build education facilities in- country,” Dr. Kelley said.

The Egina field is expected to come on stream in 2018. The production from the Egina-5 well is estimated to reach 12,000 barrels a day. The oil field is expected to produce at a peak production rate of 200,000 barrels per day, whereas the production capacity of the FPSO will be 208,000 barrels a day.

Having established the fact that Nigerian indigenous companies have the capacity and capabilities required to carry out classified and quality projects like the monumental Egina FPSO, which is set to sail into the country later in the year, it is hoped that the performances of these indigenous companies would open doors to more opportunities for other companies and hence further the cause of local content in Nigeria

Dr Njideka Kelley

Dr. Njideka Kelley wants the government’s ban on training lifted to give equal opportunity to the Nigerian workforce: “Actually the government is not encouraging in building capacity for our work force. With the present ban on training how can the work force meet industry standards? Training both local and foreign ensures that industry benchmark is met.

“Our skilled work force should be encouraged to improve their skills through certifications, training and important courses. Some of these industry technologies can only be obtained outside of the country.

MD/CEO Solewant Group/ Pipe coating Company, Mr. Solomon Ewanehi

The government must release the budget to organizations in a timely manner, encourage global learning, build infrastructure, enable local organizations to get into Orient Energy Review February, 2017 35

INTERVIEW

“Transparent process of accessing $600M Local Content Fund Under way” - Wabote

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ngr. Simbi Kesiye Wabote was appointed as the Executive Secretary Nigerian Content Development and Monitoring Board (NCDMB) by President Muhammadu Buhari (GCFR) on the 29th of September 2016. Prior to his appointment he was an Executive Director of Shell Petroleum Development Company (SPDC) Nigeria Limited and the General Manager Business and Government Relations for Shell Companies in Nigeria (SCiN).

Engr. Wabote joined Shell in September 1991 as an Oil and gas Engineer after a short stint with the Banking industry in Nigeria.

Prior to taking up his role as an Executive Director of Shell, he had served Shell in various senior positions within and outside the country in Engineering, Contracting & Procurement, External Affairs and Community Affairs Directorates. As Head of Civil engineering in Shell Eastern Division, he was responsible for major key civil engineering projects for the company, including the Shell Osubi Airport in Warri Delta State Nigeria. He served as the National Assembly Relations Adviser to Shell and was the General Manager, Local Content Development, of Shell Exploration Production Company in Nigeria (SEPCiN).

ropolitan University, Graduate of Civil Engineering from Rivers State University of Science and Technology Port Harcourt and a graduate of INSEAD group leadership programme.

He is also a member of the Nigerian Society of Engineers and a COREN Registered engineer and a member Institute of Civil Engineers London.

As the Executive Secretary, NCDMB his new assignment is to steer strategic National programs being implemented by the Board to build capacity and domicile industry activities within Nigeria.

He is expected to bring his global experience to bear in re-engineering the Board’s business processes to achieve maximum impact on Nigerian Content development.

In this exclusive interview with Orient Energy Review’s Editor, MARGARET NONGO-OKOJOKWU; the revered engineer makes a bold debut of his new role at the helm of affairs at the NCDMB, making it clear that the Board is ready to change the face of the game of Local Content Implementation in Nigeria .

He spoke on the sideline of the Practical Nigerian Content Forum in Abuja.

Excerpt!

What strategies are you bringing to the table as the New Executive Secretary of the NCDMB? I consider this a very important question because when you have a new helmsman in any establishment, people are often interested in knowing what difference such a person would make.

He was responsible for the development of Royal Dutch Shell’s local content strategy and framework and supervised Shell Local Content implementation across several countries including Nigeria, Gabon, Brunei, Oman, Kazakhstan, Australia, Iraq, Qatar, Jordan, USA and new frontier countries for Shell.

Simbi holds an MSc from Leeds Met-

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Orient Energy Review February, 2017 37

INTERVIEW

I am an engineer; I worked for Shell Petroleum for 25 years. I became a director at Shell and one thing my engineering knowledge always teaches me is the imperative of planning. You have to plan and plan before entering the execution mode. While we’ll focus on some quick fixes, we would also ensure continuity and relevance of the NCDMB. The first thing we would need to do is to take stock on how we have been able to implement the Act in the past six years; and then ask ourselves the pertinent question on how well we have done. Base on that stock taking, we would then set a baseline on the things we need to do in the next four years. So, first of all, we’ll focus on some quick wins and focus on how the Act has been implemented for the past six years and then begin to strategize on the areas we need to improve upon to change the game. This is the strategic approach I would like to follow in the course of my tenure and I am sure the review would be for a very short time. The work has started and after that review, we will set a very clear strategic direction. In the short term, we would build on some of the successes we’ve seen in the implementation of the Act, some of it being the development of the pipe mills that all this while, we promised Nigerians; the development of the oil and gas park to encourage manufacturing and to also encourage local businesses to set up shops for manufacturing . We will look at the research and development agenda that we have within the Act. A lot of work has been done, stakeholders have been engaged and some kind of regulation has been agreed upon in terms of research and development and we will make sure we move quickly into the implementation phase. And like the Minister of State for Petroleum Resources charged the board, we are to think big on the things we need to bring about in the Nigerian Content to change the face of the game, our ambition is big, robust and conscious execution.

Let’s talk about the Nigerian Content Fund. We would like to know how much is in it and how much has been disbursed and how many companies have so far benefitted from such disbursement.

This is a question that bothers the mind of key stakeholders, when you look at the Nigerian Content Fund that they 38

started contributing since 2010; when the Act was enacted, I must say here that the Fund has grown over the years to approximately $600 million. As far as I am aware, about six Nigerian companies have benefitted from the Fund for capacity development, but I must say that it is not directly giving money to those six Nigerian companies, it is about guaranteeing some of the loans they sourced from the banks because we are not a funding institution. Not much has been expended from that Fund for capacity development and part of the strategy of the new board is to come up with a very transparent process in which genuine Nigerian contractors in the oil and gas sector will have access to the Fund. This is the strategy we will push in the shortest possible time to bring about development because some of the Fund’s contributors are asking questions about the disbursement and we are not oblivious of this fact and we would make the process transparent as soon as possible. Again, one important step is the establishment of the Governing Council of NCDMB which was inaugurated on November 18th by the Nigerian President, His Excellency, Muhammadu Buhari. That would bring about corporate governance in the activities of the NCDMB and will also support us in terms of strategies to be deployed for fund management.

Sir, it does not appear that most of the companies in the upstream sector want to contribute to the Fund and if this is the case, what are you doing to reverse the trend?

While people worry about the fund that has been contributed, there are a lot of Nigerian companies that are not meeting up in their contribution as enshrined in the law. This board will look at strategies that will make them comply with the provisions of the Act. By and large, this development may be due to ignorance or lack of clear understanding of the implications of not contributing to the fund and the mechanisms to do those contributions. I can assure you that within the shortest possible time, we will reach out to those companies that have been defaulting in their contributions to the Fund. Having said that, it is important to also give them comfort that the Fund will be judiciously utilized for what it is meant for.

Orient Energy Review February, 2017

Many of the operators have been complaining about the cumbersome process of accessing the Fund. Is there something you are doing to make this process less difficult?

I don’t think the process is cumbersome, I think the process is not very transparent in terms of accessing the fund. I don’t think people have applied conscientiously for that fund to come out for them to do business with. The process is not clear to them. That is why I said this board will bring about transparency. By the time we come out with the strategy, it will published in the newspapers and many news media and stakeholders would be engaged on the process to follow to access the fund. I have not seen applications to access the fund, maybe because there is no clear process on how to do so.

Following the decline in crude oil prices from a peak of $115 per barrel in 2014, local service providers have been hard hit. Are you not worried that some international oil companies are still asking for discounts?

If you recall, most of the jobs that were tendered were done when the price of oil was about $100 per barrel. Once oil price is up, the costs of services also go up. But when oil price is down, they also try to ask that the service providers reduce their costs. It doesn’t translate to poor work quality. In as much as the IOCs look at various ways to undertake their activities because of the low price, service companies also look at various ways to reduce their costs. It is a natural thing. The man who is paying cannot pay more than what he earns; so it has to be vice-versa. I think that is why they are asking for that cost reduction.

It is not out of place; it is what is done globally and the request to renegotiate some contracts is still going on in so many parts of the world because of the fall in oil price.

There was a very heated debate on the review of some of the provisions of the Act especially in relations to the place of indigenous companies. Can you please throw more light on this?

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INTERVIEW

Every legislation in this country and elsewhere in the world calls for review from time to time. I know there was an attempt some months ago by the Federal House of Representatives to review the Local Content Act and in the process, many stakeholders decided to make their input on what they think the Act should look at, having operated it overtime. And one of the contentious issues with regards to proposals for review is the ownership of equipments by indigenous companies. Currently, the Act stipulates 51 per cent ownership by the Nigerian Companies but the proposed amendment which I think at the moment has not progressed too far, wants the ownership to be 100 percent. I think the board is not aligned with that position because we believe that in a global environment, you need to continue to encourage foreign investment.

You need to continue to encourage partnerships, you need to continue to encourage the formation of consortiums and you need to continue to encourage companies to distribute their risks, in a way that if there is a downturn in the economy as it were today due to fall in the price of oil, no one company bears the entire brunt of that impact. It is a world we live in that believes in interdependency and Nigeria will continue to collaborate with foreign countries and foreign companies in order to enhance our capacity in local content.

as possible. In fact, he gave a benchmark of six months. I think all the agencies have been actively working on this to come out with a strategy to ensure they reduce the contracting cycle time. One of the strategies that the NCDMB will adopt is to give a timeline with which if what is required of us is not received by the operators or project promoters within 15 days, they should consider that that item has been approved. We are drawing a line in the sand which I think is a bold step. All my colleagues on the board are aware of this and are working conscientiously to ensure that the turnaround time is drastically reduced on those items that are within our control. But you know it is not only the NCDMB that gets involved in the contracting process in the oil and gas industry. We are working collaboratively with other agencies to understand where the challenge is. But on the other hand, we are also challenging project promoters and operators to keep their house in order because we have realized that the bulk of the challenge comes from them.

For instance, I received a letter six months of assumption of duty that the NCDMB had approved to a particular operator asking for a further review. I am sure once the operator gets the approval, the story might not be put there in the public in the way it ought to be. It would push the blame to the NCDMB.

You did mention in the course of your presentation that if there’s no response from the NCDMB after 15 days of submission of proposal, same should be considered to have been approved. You may like to shed more light on this.

Sir, still on the contracting cycle; you’ve mentioned the NCDMB and allied agencies involved in the process. The argument is that all these agencies represent the interest of government. Isn’t it possible for a sole agency to undertake this function?

Contracting cycle time is of great concern not only to the operators but also for the NCDMB and some of our sister regulatory agencies because it increases the cost of doing business and delays investment decisions. The Minister of State, Petroleum Resources charged all stakeholders in the oil and gas industry to ensure that they reduce the contracting cycle time as much

It is important to clarify the roles of the different agencies. NAPIMS is not a regulator; it is a joint venture partner to the oil and gas operators. Therefore, they own a critical stake that their operators undertake. They have a joint operating agreement which they have negotiated with the various operators on the role they will play in the contracting cycle.

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NCDMB is a regulator as opposed to NAPIMS that is a joint venture partner. Technically, NCDMB also regulates NAPIMS and just to differentiate; in every country, there are different arms of government that undertake different activities, but it is the same government that sets up these arms. Now as an instance: The Central Bank of Nigeria has also gotten a regulatory agency to ensure that their excesses are curtailed. In the same vein, NCDMB will ensure that local content implementation is adhered to in the oil and gas industry. So, NAPIMS is a joint venture partner. The only regulatory agency that I know of in this sense is the NCDMB. There is this complain of job outsourcing, jobs that can be executed locally are being outsourced. This, no doubt is too big a problem to ignore for it makes no sense if an investor expend huge sums of money in facility procurement and manpower only for the plant to be filled with expatriates?

I always say that local content is not a sprint but a marathon. It is not something that can happen in a year or two or even five years. It is a process that needs focus and tenacity to ensure its implementation. A lot of gains have been made in terms of local capacity development to replace expats that come into the country to work. As journalists, I think it is important for you guys to portray to the world the significant gains made so far. For instance, most of the International Oil Companies (IOCs) in the country today are being managed by Nigerians and this was not the case about seven or eight years ago when expatriates were the managers. first of all, we’ll focus on some quick wins and focus on how the Act has been implemented for the past six years and then begin to strategize on the areas we need to improve upon to change the game.

Orient Energy Review February, 2017 39

INTERVIEW

Additionally, almost 85 to 90 percent of the employees of these IOCs are Nigerians. So, a lot of progress has been made in this area. Again, most of the owners of oil blocs, OMLs, are Nigerians. This was not the case some years back. Let’s not forget that Rome was not built in a day. We will continue to push the boundaries and we will continue to do all we can to attain local content in the oil and gas industry. So, let us not begin to think that overnight, we will eliminate expatriates within our midst. Do not forget that I came from the IOC and most of those companies have Nigerians, giving a lot of their expertise to those countries. In Shell that I came from, there are more Nigerians outside the country than expats within Nigeria. Journalists should therefore strike a balance in their reportage because Nigerians need to also go out there to acquire knowledge and come back to the country to render their services to further develop the country.

Your competence for this job is not in doubt but there are insinuations that that in itself may be detrimental to the course of local content as you may have sympathy for these multinational oil companies. The belief is that it is the Nigerians in these companies that are helping them to bend the rules. How would you guard against this?

(After a prolong laughter). That is a good question and I must tell you that even my staffs are concerned on whose side I would find myself. For me, I am first of all a Nigerian before I had the opportunity of working for the IOC. Do not forget that I managed local content for the company I worked for before my appointment into the NCDMB for eight years both locally and internationally.

The company knew my antecedents in terms of where I stand on issues concerning Nigeria and my employers, Shell as it were. I saw the benefits of local content and so did Shell. First, local content would reduce cost in the long run and also ensure job security. Today in the Niger Delta where militant activities are predominant, most of the expatriates had to leave but if we did not invest in the development of local content, oil production would have come to a halt.

Local content also provide security for the life and properties of the investor(s) because there is no security better than the one provided by the people that work for you. Thus, the benefits of local content are quite enormous. Now, I am working for the government to further enhance the development of local content for the oil and gas sector. I believe in this country and believe in the drive

by the present administration to create jobs for our people. So, there is no way my voice would be compromised simply because I come from that sector (IOCs).

Now, building on the gains of local content, the immediate past Executive Secretary, worked relentlessly on the development of the NOGAPS. We happened to be following that project but we really do not know what has become of it now. Few years ago, the NCDMB signed an MOU with Shell bringing in OEMs (Original Equipment Manufacturers) for capacity building. With you now at the helm, what plans do you have in the pipeline to bring all these into reality?

Like I said earlier, some of the quick wins we will focus on are the development of the oil and gas park for manufacturing activities. As you are aware, over some time, there was a kind of lull in leadership in the board but since my appointment, we have picked it up and in the next couple of days, you guys will be seeing some adverts in the papers for securing the sites and most of the sites that we have identified have been secured. Some of them have been cleared and sand filling is probably ongoing. In the next couple of days, there will be advert for contractors to express interest. Detailed design will also be out very soon. We have set a timeline for every milestone we hope to achieve in the next couple of months. Indeed, the project is still on the drawing board and it will happen. It is very much in line with the seven big wins launched by the President a couple of weeks ago for us to develop local parks to encourage local manufacturing of oil and gas products.

We heard in the news that there is going to be concession for manufacturers and I see this as a way of attracting FDI and growing the GDP. Is there any special concession for manufacturers of oil and gas products?

A team is looking at the entire process end to end and taking into consideration the realities, the design of strategies on how those facilities would be utilized, and how those facilities can be accessed by the manufacturers. We are also talking actively to Original Equipment Manufacturers and trying to partner them with local companies with a view to manage some of the components of the manufacturing process. The strategy is being developed as we speak.

You are developing a blueprint of local content beyond the upstream. What exactly are we looking at in all these? I know it is not all about policing these companies but

40 Orient Energy Review February, 2017

also ensuring that they remain in business.

What is the board doing in this regard?

In terms of the blueprint, it is about strategy in the next five years. We will build capacity in the areas that we are lacking currently. We will also enhance capacity in strategic areas and develop our research as contained in the Act. We will also try to understand the demand and supply in the oil and gas industry of the various components that manufacturing involves. On existing companies, we shall try to keep them in business.

As you know, oil and gas business has slowed down a bit because of the current oil price. Investors have been shelving some projects waiting for opportunity to bounce back as the price improves.

We are also looking at opportunities that the current situation would bring.

By the time the price picks again and we don’t get Nigerian companies ready, they will miss out on the opportunities.

So, we’ve been engaging actively with the various stakeholders, exchanging ideas on the strategy to put in place for businesses to be sustained until things are turned around. Only recently, we had a meeting with NETCO, which is a consortium of design companies and part of the discussions was ‘how do we strategize to keep them in business during this period and when perhaps, the boom would come?’ So, all these discussions even in the marine vessels area, as soon as the lull is over, would begin to manifest. The jobs are no longer there, so it is a continuous search for opportunities to sustain them in this time of low oil price regime.

How many companies have benefitted so far and can you please name names?

I don’t think it would be fair to begin to call the names of those companies because this is a kind of private arrangement between the lending institutions and these companies.

Today in the Niger Delta where militant activities are predominant, most of the expatriates had to leave but if we did not invest in the development of local content, oil production would have come to a halt. Local content also provide security for the life and properties of the investor(s) because there is no security better than the one provided by the people that work for you.

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LOCAL CONTENT CHAMPIONS

We have rewritten the geological history of Nigeria-Bolaji Musah Operators of OML 113, Yinka Folawiyo Petroleum made history recently with the opening of a frontier basin after 26 years of toiling day and night. In a chat with Orient Energy Review (OER), Acting Managing Director, Chief Executive Officer and Technical Adviser of Yinka Folawiyo Petrolume Company’s Bolaji Musah says there is no limit to what the company can achieve in the years ahead. It is OER’s exclusive!

Tell us more about OML 113

O

ML 113 is the Aje field and we are currently producing, pioneering production activities in the frontier basin, opening up the transform margin. The first one was in May (2016) and we hope to up production to between 15, 000 to 20, 000 barrels in the next couple of months. We have two wells currently in production.

You found oil at a very critical time in our nation’s economy. How are you coping with the challenges of these times?

It is nostalgic that when things were really down, and when oil price stood at about $29, we started drilling with the view to put the field into production. Right now, we are not where we hope to be. We haven’t really gotten into our full capability on those two wells but we are comfortable with the fact that the basin is now a producing basin. We did our first lifting a couple of weeks ago for 620, 000 barrels and we are hoping to do another lifting before the end of the year (2016).

Funding isn’t easy to come by but you have pulled this one off. How did you manage to do this considering the high interest rates being charged by banks?

The consortium is made up of five technical partners-Yinka Folawiyo Petroleum as the operator, New Age is based in the UK, Jackal Resources is also a public quoted company, Energy Equity Resources is also an indigenous E & P company. So all those partners contribute their cash call obligations and Folawiyo Aje Services Limited is now the entity carrying out development activities on behalf of the joint venture partners. So funding is being sourced through this arrangement. The bulk of the funding activities of the consortium are done through their equity interests. Things have changed a bit now. Since we started lifting some a couple of weeks ago; the partners have had access to financing, debt financing.

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And all this investors and financial institutions would be able to leverage credit or financial to the crude oil and to the number of barrels that some of the partners are supposed to be doing.

One other thing that differentiates us from other producers is the comfort and confidence in our production and being able to live up to our obligations.

We are not in the Niger Delta; we are in the relatively benign Benin environment where our production is guaranteed and obligation and projections are almost certain. So when they are ranking risks, these kinds of things make things easier and the premium on access to funds would become relatively better. It is not that we do not face challenges but they are better compared to what our contemporaries in other basins face.

How do you think companies can survive the current economic hardship being experienced in the economy?

Primarily, there is the need for them to stay focused, stay very committed.

There is the need also to be clear in your package and documentation. It is also important to have a complete business proposal. Be very objective and fair in your package to potential investors. Once you do these, things become quite easier because those people would do their due diligence. Again, those companies should try to weigh their risks and ensure they are taking mitigating risks. Before you make any form of commitment, be very fair on those parameters, your MPVs and don’t be too aggressive on your expectations.

You look relatively young and one is tempted to ask how experienced you are in being able to manage crisis at this time?

have opened a basin and rewritten the geological history of Nigeria. The third of May, we opened Aje just as Oil was discovered in Oloibiri in 1956. That was the driving goal and objective for us in the past 26 years. It has taken us that long to get to this stage. Even when the chips were down, when partners go and come and the challenges of opening a frontier basin hit us, we always go back to say we know what our goals are. We would repackage ourselves; change things when necessary modify our strategies with a view to keeping up with the common goal.

In the light of local content, what has been the participation of Nigerian service companies in the process of trying to discover oil?

I always tell people that Yinka Folawiyo Petroleum as a company, Folawiyo Aje Services Limited as an entity; are local. As an operator, we are local. But we are not stopping there. We proactively encourage local content we rely on it to get to where we are today. I have to mention Delta Afrik because when even the oil majors and indigenous companies felt our objectives were a mirage; Delta Afrik believed in us.

There is also Geospec and other companies in our list of service support.

I am young and I take that as a complement (general laughter). The issue is that if I limit this to our consortium, Aje Development is strategic for us; more strategic than looking at what returns would be. It is not like we are trying to blow the trumpet but we Orient Energy Review February, 2017 41

LOCAL CONTENT CHAMPIONS

‘SEPLAT is occupying a pre-eminent position and adding a lot of energy value to Nigeria’ - Dr. A.B.C Orjiako in Nigeria.

These include Abbeycourt Trading Company Limited (with which he traded crude oil and refined petroleum products with, amongst others, Glencore UK Limited), Abbeycourt Energy Services Limited, Zebbra Energy Limited and Shebah Exploration and Production Company Limited.

He also has other business interests in construction, real estate development, pharmaceuticals and shipping.

He went into full-time business in 1996 after eleven years of active medical practice. He co-founded SEPLAT in 2009 and became the Chairman, spearheading new business development and fundraising as well as providing leadership on strategy and stakeholder

D

r. A.B.C. (Bryant) Orjiako is co-founder and chairman of Seplat Petroleum Development Co., a leading Nigerian independent oil and gas company listed on the London and Nigerian stock exchanges. Under his leadership, the company has increased production exponentially.

He was appointed as a director on 14 December 2009 and as Chairman on 3 March 2010.after obtaining an M.B.B.Ch. degree in 1985 from the College of Medical Sciences, University of Calabar, Nigeria where he trained as a General Surgeon at the Lagos University Teaching Hospital, Lagos, and later sub-specialised in orthopaedic and trauma surgery and became a fellow of the West African College of Surgeons in 1996.

Whilst still practicing at the National Orthopaedic Hospital, Igbobi, Lagos, he established and managed various companies in the upstream, downstream and services sectors of the oil and gas industry

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Orient Energy Review February, 2017

relationships. He is also the chairman of Neimeth Pharmaceutical International plc, which is listed on the NSE, and a director of MPI, which is listed on NYSE Euronext Paris.

Consolidating his firm commitment to philanthropy, he founded the Daniel Orjiako Memorial Foundation (‘‘DOMF’’) in 1996 in honour of his late father, Chief Daniel O. Orjiako. The DOMF is committed to breaking the poverty cycle in rural Nigerian communities through education, healthcare services and economic empowerment through agriculture.

The DOMF runs scholarship schemes for indigent students across the spectrum of education in Nigeria and has to date assisted towards the education of over 10,000 pupils in primary schools, over 200 in science education in post-primary schools and over 200 university graduates especially in medicine,

engineering, pharmacy and geology. The DOMF also provides free care services to the elderly and micro-credits to rural farmers,

especially rural women. He further supports education and medical research through an endowment of a professorial chair in orthopaedics and trauma at the University of Calabar, Nigeria.

Between 2004 and 2006, he attended Harvard Business School’s Owner’s and President’s Management Course and obtained a Certificate in Business Management in 2006.

In recognition of his services to humanity and the Roman Catholic church, Pope John Paul II in 2003 bestowed on him a Knighthood of the Order of St. Gregory the Great (KSGG), an award which earned him the title ‘‘Sir’’. In addition to receiving a KSGG from Pope John Paul II in 2003,he has also received numerous other awards including Paul Harris Fellow of Rotary International for Philanthropy, Distinguished Alumnus Award and Doctor of Sciences (D.Sc. Honoris Causa) by the University of Calabar, Nigeria (2001), Doctor of Business Administration (DBA Honoris Causa) for entrepreneurship, Anambra State University, Nigeria (2006), Life Member National Association of Resident Doctors of Nigeria which he led in 1994/95 and Platinum Award of the West African College of Surgeons for Support of Medical Research and Training. In 2012, the President of Nigeria conferred on him National Honours as an Officer of the Federal Republic (‘‘OFR’’).

Seplat’s awards include Best Africa Listing 2014 by Africa Investors and Global Growth Company 2014 by the World Economic Forum. Dr. Orjiako was named African Business Executive of the Year in 2014 by the Oil and Gas Council.

Dr Orjiako spoke with JEROME ONOJA on the sidelines of Africa Oil Week, in November 2016, where he spoke extensively about the progress being made by his company, Seplat amid the present Oil price downturn.

Excerpts.

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LOCAL CONTENT CHAMPIONS

How has SEPLAT fared and how many assets do you have presently?

In terms of our acreages, we pioneered the leapfrogging of the Nigerian indigenous program with the acquisitions we did from the international oil companies in 2010 and ever since then we have remained focused on following our vision, objectives and aspirations.

We’ve grown those assets organically in terms of production and reserves.

We have acquired more assets in the process. We have done some kind of diversification from the Western Niger Delta to the Eastern Niger Delta. We have remained focused on gas development and gas commercialization as one of our strong points. In all of these, we are focused in the areas we have always talked about; our people.

Our people being our employees in the communities we operate in. These are communities where we have turned a major challenge into an opportunity in the on-shore Niger Delta.

So, today we have three major assets in the Western Niger Delta: OML 4, OML 38 and OML 41. We also have an investment in a small marginal field owned by Pillar Oil. In the Eastern Niger Delta, we are operating OML 53 which we just acquired from Chevron.

In all, one of the strong points is the fact that we remained the operators of all of these assets. That enables us to also add the needed value.

What is the estimated production level at the moment at these oil and gas facilities?

Today we are doing 75,000 bbl/d due to downing outages from the Trans-forcados pipeline. But it is better to appreciate that when we took over it was barely14, 000 bbl/d. That’s about five fold increase. But we are replacing every molecule we have used, we have replaced every barrel, we have added more, we have grown production. Today we have just a little less than 500 MMbbl in reserve and that is quite significant compared to where we started when it was less than 100 MMbbl in 2010.

Give us a brief on your activities outside the Nigerian space?

Outside Nigeria like I said earlier, what we have is a global investor base. In terms of operation, we don’t have oil and gas operations outside Nigeria.

Our strategy has always been to consolidate and maximize the opportunity in the Niger Delta which is the most prolific in Africa and in the world.

Until we finish doing that, we aren’t considering going outside Nigeria.

Funding; how have you managed the challenges?

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SEPLAT occupies a very pre-eminent position being that we are the only Nigerian E&P Company that has dual listing: Nigeria and London Stock Exchange. That brought with it a high level of scrutiny in what we do. Therefore, strong corporate governance, excellent management team, deliverables were being achieved, with very high efficiency and effectiveness became common place. That also brings us right in front of a very large pool of investor community such that we are attracting quite a lot of investment funds. We are able to tap into debts and equity very easily and have access to the capital we need. That doesn’t mean that capital isn’t a challenge, though we have been able to overcome it with time.

How have you been managing your cash flow?

In terms of our cash flow, our business is very cash-generating and what we have done over the years is to re-inject the free cash flow into further developments; especially in gas. If you followed our history you would know that we took our gas production from about 90 MMscf/d to 300 MMscf/d. All of these came from our generated cash flow. Going forward, we will continue to grow this. By the end of this year, we are looking to take our gas capacity to more than 500 MMscf/dand by 2018 when we bring on stream our very big gas business; we are hoping to do at least 1Bscf of gas a day in the domestic finds. If you think about that and the fact that we are contributing about 25 percent of gas to power in Nigeria, it tells you that SEPLAT is occupying a pre-eminent position and adding a lot of energy value to Nigeria.

Do you actually get value for the gas supplied; are your clients meeting their payment obligations?

Yes, payments come in. Sometimes they are slow in coming but they surely come in. In terms of price you can see the improvement in gas price. Before the gas revolution in 2012, gas was less than 50 cent per MMscf but today we are having it at 3 dollars to 3.5 dollars a thousand SCF. So that shows a major improvement in price and the demand is increasing. Increasing price and increasing demand is making investment in gas more attractive.

Most of these gas finds are stranded.

How do you manage the challenges associated with them and what ways do you think the government can incentivize investors?

The truth of the matter is that almost all the gas that has been discovered in Nigeria today was discovered while looking for oil. That was because not

quite a lot of value was attached to gas but all of that has changed. Today you will see a lot of companies that are well known, who will invest in chasing just pure gas reserves and also will do this alongside the associated gas. When you produce that, it comes to a lot of gas liquids which you can monetize as well.

It’s good business.

A major difficulty businesses encounter in the industry today is insecurity. How do you manage that?

The very first line for managing security is community engagement. For us, that is one of our strengths. We have the SEPLAT model for community engagement where we emphasize partnership. We build confidence and mutual trust with our communities and that has brought about a lot of ease in the business we do. Communities have become security agents on our assets. So, all of these have led to the fact that in the last three years we haven’t had any incident of vandalism of our assets. That is speaking very strongly to the fact that we have managed security very well. But having said that, the third party facilities we have to contend with really is a challenge. But going forward we need to look at developing to improve alternate export route which we are doing at the moment.

Do you have plans for the downstream sector or building a refinery?

The way to answer that question is that you can’t exclude any aspect of the entire value chain in the oil and gas industry but for now we are focusing on our upstream business.

Tell us about your Local Content policy and how you have fared?

Local content policy...we are completely compliant. More than 90 percent of our contractors are local contractors. Very large numbers of these are community-based contractors who we have actually trained and empowered to do business for us. So, we are very compliant and are happy to promote our indigenous companies.

If you were to have a word of advice for the government on how to assist businesses in the oil and gas industry, what would that be?

Government should continue to focus on the right regulatory frameworks that are efficient, reduce bid round cycles and contracting cycle and make sure there is effectiveness in the framework, then allow the private businesses to drive the oil and gas business.

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LOCAL CONTENT CHAMPIONS

‘We are determined to produce up to 200,000 bpd if…’ – Dr. Bada Dr. Ladi Bada is a big player in the Exploration and Production (E &P) segment of the Nigerian Oil and Gas Industry.

With an indigenous company boasting of over 95 per cent Nigerian workforce, Bada says the key to the future of the industry lies in the full implementation of the Nigerian Local Content Development Act. In this exclusive interview with Orient Energy Review (OER), the Shoreline boss speaks on the activities of his company, the challenges of indigenous companies amongst sundry burning issues. Excerpt!

S

horeline Natural Resources has been in the eye of the storm recently, with the spate bombings carried out by the Niger Delta Militants. While looking at the rise of independents in Nigeria, could you tell us how your company has fared in the past few months?

Shoreline Natural Resources is an E&P Company that is in joint venture with the exploration arm of the NNPC and the NPDC. We jointly own an onshore asset in the Niger Delta called OML 30. While we own 45 percent interest, NPDC owns 55 percent and the NPDC also act as the operator of the asset. The asset is a producing asset; we averaged roughly about 50 barrels per day.

What is the recent development on this asset?

We bought the asset in 2011 and we are trying to develop the reserves and also the production. We’ve been able

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to do well but unfortunately, we have had a lot of interruptions from militants either from the main field reserve or the pipelines because we also own the trans-forcados pipeline which is the main pipeline outage of the western Delta that takes crude from several injectors like SEPLAT, Anaconda to the forcados terminal owned by shell.

So we have a lot of interruptions by the militants, terrorists and also bunkerers. I think this has been our major challenge so far.

Have you been hampered by funding challenges? If not, how have you been able to fund your operational activities?

It is a joint venture business and in this case, each party brings its participating interest into the joint venture fund. We bring in 45 per cent while the NPDC brings 55 per cent. At different times, there have been challenges of the parties bringing in their fund but generally, we have not had too much of cash call from the NPDC. I know some of the majors have it but what we have had as funding issue is one, the reduction in the price of oil at the international market from $100 to $40 and even $30 at a point in time. But more importantly, our biggest loss in revenue that has affected our funding has come from our shutdown.

On February 14, 2016, the export line,

Shell-operated Forcados terminal was blown up by the Niger Delta Avengers.

That line was down from February 14 and was only opened in the first week of October, 2016. That was ten months of zero production; it was unprecedented in the life of any field anywhere in the world. In all this, you still have financing cost, funding cost to banks and operational cost even those it had reduced.

So, it’s been difficult for us and also for the NPDC because we’ve had revenues coming in without outgoings.

This is what has affected us and unfortunately for us, dealing with the issues concerning the Avengers has very little to do with us. They don’t have problems with us but with government. We are just like collateral damage here and it is very unfortunate.

Are you looking at possible new discoveries in this field?

The field is very rich. Discovered reserve is about a billion barrels as I said in my presentation. But we have other upsides that we have not yet drilled but which we hope to do in the next two years according to our field development plan.

What are your expectations from this?

We believe very strongly that today we have 50, 000 but the lynchpin into any expectation before I go on is security and stability. If you don’t have security and stability, you can only make plans via your mouth but nothing happens.

We need a situation where we would have the freedom to work securely to make it happen. We pray to God that if we have an extremely minimal disruption either from the militants or bunkerers, we plan to move production up from 50, 000 bpd to about 200, 000 bpd within the next four years.

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LOCAL CONTENT CHAMPIONS

What is the local content disposition of your company? Can you be specific about this especially in recent time?

We are not the operator of the field; NPDC is, but we are actively involved in key decision making. Local content is number one to us and under the joint venture arrangement, 80 to 90 per cent of contracts are given to local contractors. That goes beyond what the local content law says. We work more with local companies than foreign companies.

Are you looking at asset acquisition outside the shores of Nigeria at the moment?

Yes, when the opportunity comes. In the past, we looked at assets outside Nigeria. We are also looking within as well.

What are your expectations of the Africa Oil Week? Tell us why you are here Africa Oil Week allows us to do many things. It allows us to tell our story to the world as an African company. Nigerian companies are not seen in the best light out there in terms of capability.

So, it’s good for us to be able to show to the world what we do operationally. We want to tell the world that Nigerian companies have capacity. Like I said in my presentation; 95 per cent of our staff are Nigerians and we are doing the activities that the IOCs were doing, effectively. Two, it afforded us the opportunity to meet other similar Nigerian and African companies so as to explore possible areas of collaboration and network with them on such things. These are some of the gains of the Africa Oil Week for us.

are peculiar to indigenous producers.

This is not an unusual situation. We’ve had for many years the OPTS which has acted largely on behalf of the IOCs but the indigenous people were never excluded from it. We are also member of the OPTS as well as other members of the IPPG but the IPPG focuses on problems peculiar to the indigenous producers. For instance, today due to the level of divestments that have taken place, most of the companies that are onshore in terms of number are indigenous. So, most of the militant activities affect more indigenous companies than the IOCs. If you remember, the IOCs sold so that they go offshore; they have more protection from the offshore. The IOCs talk about security but we are the one more impacted by it. Security is not the only issue the IPPG is championing. There is the issue of fiscal regime and licensing that will help indigenous companies to grow.

These are not the best of times for producing companies, with oil prices down and low. What model have you come up with to be able to manage the situation?

The only thing we can do as individual companies is to try to seek ways of forcing down prices and that includes many of us that are into partnerships with the NNPC, NPDC and other agencies. We need to seeks ways to work together to bring down prices; that is the first driver. Two, we have fields close to each other and we have to be more synergistic by way of sharing cost within the group, either production cost or security.

What is the funding mechanism of the IPPG?

Tell us about the IPPG PPG stands for Independent Petroleum Producers Group. It is a group that invites all indigenous independent producers that are into production to come together. That means, one can have assets but if he is not into production, he cannot join the IPPG. The reason it was formed is to act as a focused advocacy group to help indigenous companies tackle government in ways it can help to resolve issues that

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The group is not heavily funded; we are just like the OPTS. We just charge ourselves a fee to be able to run the secretariat and the operations of the secretariat. We just charge ourselves individually.

Are you considering coming together to have some agreements with banks, like PETAN did some times ago?

ent from that of PETAN. PETAN is a service company; IPPG is an advocacy group seeking the protection of the interest of its members only.

What are those policies you think government can put in place to help your activities in the industry?

First and foremost is security. Government must deliver on security in a way that truly brings about peace in the Delta. Two, government need to do things outside the oil companies in terms of development because part of the root cause of these problems is developmental challenges in these affected areas. The oil companies have their role to play and so is the government in terms of providing amenities for the host communities. We as a company will stand up to our responsibilities to do our part. We also believe government should work closely with indigenous companies by giving them better fiscal terms. A good portion of the profits made by the IOCs is repatriated but the indigenous companies would plug their profits back into investment once they identify an opportunity either in oil and gas, agriculture, maritime or just anything because they live here. So, it is a multiplier effect on the part of government to support indigenous companies.

What is your advice to other indigenous companies on survival strategies in this time of recession?

As indigenous companies, we have to act responsibly, we need have due process on how we run our activities and we need corporate governance.

We can’t be expecting greater things from others when we don’t challenge ourselves. These are some of the things we do at IPPG. We do peer review and hold ourselves to high standards. Two, I believe we can get government support in terms of security and fiscal regime like the PIB. Government should give us the opportunity to participate in the bidding process before making same available to foreign companies.

Not at all! Our business model is differ-

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LOCAL CONTENT CHAMPIONS

‘At Friburge we leverage Cutting edge technology that will significantly cut costs and reduce the heavy effects of resource mining on Africa’s bourgeoning eco system’ – Dos Santos

F

riburge is a pan African Oil & Gas and Mining Services provider headquartered in Angola with a support office in Cape Town South Africa and a strong presence in the gulf of guinea. To meet the increasing demand for technologically innovative, more cost-effective and environmentally-safe methods for exploring and extracting, in Africa’s growing Oil and Gas exploration market, Friburge has partnered with several international technology providers in order to provide the best services, with the best technology available, positive impact to the environment and significantly reduce operational costs

Friburge oil and gas is driven by innovation and professionalism and aims to win the trust of both its customers and partners by living up to a code of ethics and transparent business; delivering on both efficiency and reliability, joining local knowledge with international standards

It is in the light of the above that Friburge Oil & Gas announced its innovative liquid waste treatment solution in this snap interview with Jerome Onoja at the 23rd Africa Oil Week in Cape Town, South Africa. Excerpt: Let’s get to know you please?

My name is Miguel Dos Santos. Born and raised in Angola. Did my studies in South Africa became a South African in 1996 and left officially in 2012. Friburge was established at a time when we saw the vision of the opportunities that we could deliver in the country. Having proven our mettle in Angola, we decided to extend to the rest of Africa.

What are your basic services?

We have about four main services at FRIBURGE. First is the inspection service in the country; we are in charge of controlling the quality, quantity and delivery, onshore and offshore. So far this year, we have controlled about over 2 million onshore and offshore inspections and over 22 million m3 of petroleum products imported into Angola.

To briefly explain our duties again; as vessels come in from overseas, before it is discharged, it is our mission to go on board, take samples and test them in the different labs, check the quality before it is supplied to the client. So we have been doing it for the past four years and for two years now we are the only ones carrying out that service for the companies who are allowed to import on behalf of Sonangol.

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Summarily, in all of Angola, we do inspection on trucks and on vessels.

Delivery is done from South to North on the waters and on the road as well.

This is important as you know, because Angola delivers the products to other countries as well. Against all odds, like theft, water getting into the product, we endeavour to discharge our duties by transporting the product from the South up to the North. We contribute a whole lot in the reduction of robbery while on the road. Our operations in Sonangol last year, managed to save around 500, 000 litres of the product which ordinarily was lost to theft.

Besides inspection do you offer any other service?

Yes we do. We are in charge of the STS services which are the Ship To Ship transfer. Our duties include the supply of equipment, fenders, import vessels and even Cabotage vessels. The maneuvers, tug boats, and others are being supplied by us. Cabotage and imports.

Also, we are trying to launch and domesticate in Angola some novel technologies from Norway; a company called Nurture Oil and Gas. They are listed in London Stock Exchange. The technology they have is quite amazing and I believe

strongly it would help do a lot to save the African environment.

Ok in terms of capacity have you gotten any certifications?

Yes we do. We have the ISO 14001: 2004, ISO 9001:2000 and OSHA. We are also in the process of getting certified by Trace for due diligence compliance. We are fully licensed to carry out the listed activities.

As a proof of your capacity, what are some of the companies you currently work for in Angola?

We work with the fish authority, supplying them services on special maneuvers for their fish boats; we also work for the state oil company: Sonagol, via the three subsidiaries of the company. We handle all their maneuvers. They are young. It’s a blend of experienced hands; though some are learning on the job. A typical example is the head of Operations who happens to be a lady. She started out as very young and inexperienced but has since risen up the ranks over the years with 18 men now reporting to her.

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LOCAL CONTENT CHAMPIONS

With a view to technicalities of the job you’re involved in, do you have a plan for technological transfer?

We sure have plans for that. It’s a huge part of our focus in 2017.

For instance, as we plan to go into Nigeria, we are considering a slow, step by step approach. Equipped with this innovation, we shall enter the market steadily with a wellplanned partnership.

Dalila (Friburg’s BDM) adds…I spent two weeks in Norway with this technical partner of ours in trying to understand the operations. They are very willing to teach us and are open about skill transfer. Our plan includes the outright purchase of all listed equipment and machinery for the operations and these would be operated by Angolans. This is our agreement with them.

There are also plans to build these machines in Africa. We have big dreams. We started out by outsourcing most of our operations but today, most of these outsourced jobs are being done

by Angolans and that’s what is responsible for the certifications we’ve acquired.

Do you have a timeline covering your agreement with this partner with a view to deliberate technology transfer?

Not exactly, but time would tell how it pans out. But we do have the exclusivity to Africa.

How is this new technology different from your regular operation?

This technology is about the wastewater treatment on rigs. Not only on rigs but also on terminal points where water is being contaminated by chemicals like drilling fluids, oil base, etc. The normal practice is to collect the waste water offshore, then move it all the way onshore, to some treatment plant. But this technology cuts off the time wasted in transporting the waste.

It also cuts off the cost of leasing vessels to achieve this objective.

So, we have mobile units that sit www.orientenergyreview.com

on the rig and do the treatments.

Also, the regulatory standards put the discharge concentration of waste into the water body at 30 ppm but this technology achieves 5 ppm. It’s also highly appreciated as an operator does not need to have a permanent structure on the rig when there’s a mobile unit. This 20 foot container-like structure can serve two or more operators, one after the other.

Are you looking at entering into other countries?

Yes. Our priorities are: Nigeria, Ghana, and Equatorial Guinea.

Still looking at the local content policy in Angola, how are companies faring? Can you point to some milestone or achievements spurred by the Act? There are a lot of JV partnerships happening between multinational companies and indigenous companies in Angola taking place. A typical example is what I saw some days back: Aker Solution Angola now manufactures valves and some other equipment within Angola for the consumption in the industry. There is Oceaneering Angola doing something similar things as well. We at Friburge plan to set up an assembly shop in 2017, which would metamorphose into a manufacturing plant later on as we hope to manufacture our own equipment, like fenders, etc. We have acquired the land for this already.

How well have you done as a company since the creation of the local content law?

The recent dollar crisis witnessed the departure of many companies from Angola. At a particular time, we were among the four companies to supply Sonangol with inspection services. Then Sonangol had to cut down on cost and revert to paying in our local currency, but the multinational companies dumped the projects and we were the only player left, who was willing to accept such payment terms. So we thrived.

Has the local content law encouraged local entrepreneurship?

Well, there have been lots of Joint Ventures being formed between indigenes and foreign companies but there haven’t been very many indigenous companies, established by themselves to operate like we are, just a few of us. An indigenous company that readily comes to mind would be embarking on drilling shortly; but that’s the only local drilling company I know of. Let’s put the total figure at 5: just about 5 companies are wholly indigenous, operating in Angola as at now.

I have never seen an Angolan company in any international exhibition like this; Friburge is the first. Besides Sonagol, we don’t see Angolan companies. But, we feel we needed to hear from another indigenous company and because you are not government owned it would be great to know the effect of this policy from your end.

Well, all we ask of the regulators is for support so we can expand to new markets like I had earlier highlighted. With support of our services, we are able to go into Nigeria, Ghana, Equatorial Guinea, etc. So we are not asking for money from our regulators but for support in any way that would further our expansion. This is why the business development manager in Angola is still going to be the same person anchoring business development anywhere in Africa, regardless of the business model we adopt there.

Talking of financing, how are the banks supporting your operations?

Do you get enough support?

No the banks haven’t supported in anyway.

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GAS

Sahara Gas to Deliver First Consignment to West Africa in March

N

ewly built Liquefied Petroleum Gas (LPG) Vessels, MT Africa Gas and MT Sahara Gas are set to deliver their first consignment of gas to the West African coast from March 2017.

According to Sahara Gas, both vessels’ operations are expected to actualise the vision of the Nigerian National Petroleum Corporation (NNPC), which hinges on boosting the availability of the commodi-

ty in Nigeria and the West African sub-region.

It added that the two vessels will address the lingering challenges of supply, affordability and fraudulent activities of individuals and organisations seeking to adulterate cooking gas due to

scarce supply.

The company disclosed that MT Africa Gas has already taken the lead, commencing its maiden voyage by sailing towards the Caribbean/US Gulf Region. Sahara Gas is due to follow suit in the coming weeks.

Considered as a cleaner, much safer and more affordable alternative to firewood and kerosene, the acceptability of LPG in the sub-region

has been affected by some challenges over the years.

These hiccups include, but are not limited to low supply and logistics arising from limited to LPG vessels in the region. But with the recent unveiling of the two LPG vessels, being acquisitions driven by West Africa Gas Limited, a Joint Venture of NNPC and Sahara Group, there is a renewed optimism for what is popularly referred to as cooking gas in the country.

The company explained: “These two vessels, Hulls 8182 and 8183 were christened “Africa Gas” and “Sahara Gas” respectively at a historic naming event in Ulsan, far away South Korea.

“The JV is run by two companies, NNPC LNG Ltd, a wholly-owned subsidiary of NNPC and Sahara Energy’s oil and gas trading arm, Ocean Bed Trading Ltd (BVI).

Orient Petroleum, First Modular Partner to Boost Gas Supply

O

rient Petroleum Resources Plc (OPR) and First Modular Gas Systems Limited (FMGSL), a natural gas processing and marketing company, have signed a Gas Processing, Sale and Purchase Agreement for the development of the first phase of a gas processing plant at OPR’s Anambra River oil and gas field, located in the Anambra Basin.

The Anambra Basin is estimated to have significant gas deposits and contains the OPR operated Oil Prospecting Licenses (OPLs) 915 and

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916. Improved domestic gas supply is expected to increase the use of cleaner energy in Nigerian homes.

The Chairman of OPR, Chief Emeka Anyaoku, said the agreement represents an important step to monetize the Anambra River field hydrocarbon resources. He added that the agreement was made possible by the close cooperation and deep commitment of OPR and FMGSL. The Managing Director/Chief Executive Officer of OPR, Engr. Sunny Okoye, said the new deal will result in a cost-effective development that will ensure zero gas-flaring and also promote a cleaner, safer and healthier environment.

The first phase, expected within six months, involves the initial production and processing of 5mmscfd of gas into Liquefied Petroleum Gas,

Natural Gas Liquids and Compressed Natural Gas, with incremental volumes coming on stream as more wells are drilled in the acreages held by OPR. Both parties are keen to ensure a doubling of capacity by the end of the second year. The gas produced will add to Nigeria’s domestic gas supply.

FMGSL is a midstream gas portfolio company jointly owned by Àrgentil Capital Management Limited (ACML) and Dharmattan Gas Facilities Limited to develop gas processing clusters that support making gas available for the domestic market.

The Managing Director of ACML, Gbenga Hassan, stated: “We see this as an immediate value-creating response to the need for monetisation of currently stranded and / or flared gas. Also, the Managing Director of Dharmattan, Mr. Bashir Koledoye, added: “we assist indigenous oil and gas producers recover value from their gas.

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