Orient Energy Review March 2018

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Vol 7 No.03 March 2018

Technology and Oil:

Navigating the Thin Line

Nigeria’s Emeka Ene Appointed IGU’S Vice Chair www.orientenergyreview.com For The 2018-2021 Triennium

Amni Int’l Receives $270m Oil-Backed Loan from Shell, Orient Energy Review Vol 7 No.03 March 2018 1 GTBank

Africa Oil Week 2018 is the meeting place for Africa’s upstream oil and gas markets. The event brings together senior leaders of governments, national oil companies, investors, corporate players, independents and financiers from across Africa and beyond – giving them a place to network, discuss and share knowledge.

Join us to celebrate our 25th Anniversary in November.

5-9 November 2018

Cape Town International Convention Centre Cape Town, South Africa

info.africa@ite-events.com www.africa-oilweek.com 2 Orient Energy Review Vol 7 No.03 March 2018

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Orient Energy Review Vol 7 No.03 March 2018 3

INDUSTRY NEWS

Chevron Carts Away Two Oil & Gas Industry Awards at NIPS Abuja

By Margaret Nongo-Okojokwu

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hevron Nigeria Limited, (CNL), operator of the joint venture between the Nigerian National Petroleum Corporation (NNPC) - NNPC/CNL JV - received a resounding ovation at the Oil/ Gas industry award presentation ceremony organized by the Ministry of Petroleum Resources as part of the programmes to mark the official opening ceremony of the Nigerian International Petroleum Summit (NIPS) held recently in Abuja. CNL carted away two awards – “Top domestic gas producer in 2016/2017” and “The best Performing Upstream International Company in Social Contribution for 2016/2017.”

The award certificates and plaques were presented to CNL at a dinner event organized at the Conference Hall of the Transcorp Hilton Hotel Abuja, and witnessed by many dignitaries including the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, representatives of the NNPC/industry regulators, participants from other African countries and other industry players.

On hand to receive the awards which were separately presented by the Honourable Minister of State for Petroleum Resources and the Chief Financial Officer of the NNPC, Isiaka Abdulrazaq, who represented the Group Managing Director, NNPC, Engr. Maikanti Baru was the General Manager Policy, Government and Public Affairs, CNL, Mr. Esimaje Brikinn.

Speaking on the award, Mr. Brikinn expressed CNL’s delight over the recognition and awards.

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He explained that CNL has a comprehensive and aggressive gas development programme that is driven by good environmental stewardship to eliminate gas flares in its operations, help meet Nigeria’s energy needs and convert Nigeria’s huge gas resources into wealth for the benefit of the nation.

According to Brikinn, “the NNPC/ CNL Joint Venture is a major oil and gas producer and has provided substantial revenue to the Nigerian National Petroleum Corporation (NNPC), Federal Government and State Governments for over 50 years. NNPC/CNL Joint Venture is a key domestic gas supplier with over 444 MMSCFD Gas sales in 2017.” He stated that Chevron has made great strides in putting out gas flaring and increasing gas supply to the domestic market through its integrated gas development projects. On social contribution to the communities and the country at large, Mr. Brikinn noted that CNL has demonstrated its commitment to the ideals of social responsibility and community development in the thematic areas of health, education, economic development. CNL has provided over 10,000 scholarship awards worth billions of naira to Nigerian students. CNL has also established the Scholarship for the Blind to cater for the visuallyimpaired students.

He informed that the Global Memorandum of Understanding (GMoU ), a c om mu n i t y- l e d participatory partnership model for community engagement and sustainable development was

pioneered by CNL in 2005. “CNL continues to contribute funding (running into billions of naira) to the Regional Development Committees (RDCs) that represent the communities in its area of operations to execute hundreds of projects in the communities through a governance model that ensures transparency and accountability. The projects which cover the areas of education, health, housing, scholarships, economic development, etc., have benefitted over 600,000 people and assisted in enhancing the quality of life in these communities,” he stated.

Mr. Brikinn also noted the efforts of other Chevron companies in social contributions in Nigeria.

For instance, the Star Deep Water Petroleum Limited (a Chevron Company) and the other parties in the Agbami field, have also contributed to the sustainable development of Niger ia v ia interventions in health, education and economic empowerment.

“From 2008 to 2016, the Agbami parties have invested N2.5billion on education infrastructure, N8.4 billion on scholarships and N2.2 billion on the provision of fully equipped modern chest clinics across the country. Over 16,000 students from all the states of Nigeria have benefitted from the Agbami Medical and Engineering Scholarship and among these, an impressive total of 456 have graduated with first class degrees,” he disclosed.

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INDUSTRY NEWS

NNPC Plans to Drill Four Wells in Chad, Gongola Basins – Baru …Partners Mining Society to grow oil reserves

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Our search is primarily targeted at increasing the hydrocarbon reserves of the country and also to harness these resources which may be in other parts of the country,” he added.

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he Niger ian Nationa l Petroleum Corporation (NNPC) has announced that it plans to drill four wells in the Chad and Gongola Basins.

Group Managing Director of the Corporation, Dr. Maikanti Baru, made the announcement while speaking at the Nigerian Mining and Geosciences Society (NMGS) Conference in Kano, recently, shortly after being conferred with the honourary fellowship of the Society. Speaking on NNPC’s latest efforts to find crude in some inland basins, notably in the in the Chad Basin, Baru said the Corporation plans to drill four wells in areas that it has acquired 1,961 square kilometre 3D seismic data out of 3,550kmsq planned.

He said NNPC would be going into the deeper Maiduguri sub-basin to acquire more 3D seismic data as soon as normalcy returns to the Chad basin.

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While waiting for normalcy to return to the Chad Basin, we have stepped up efforts in the Lower Benue trough. So far, we have acquired 20km of 2D data out of the planned 455km 2d seismic data,” he added.

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On the Gongola Basin, Dr. Baru said four wells were also being planned for drilling to further test the prospects identified around Kolmani River-1, Nasara-1 and Kuzari-1 in 2018. Meanwhile, the NNPC GMD has expressed the Corporation’s readiness to collaborate with the Nigerian Mining and Geosciences Society (NMGS) towards growing the nation’s abundant hydrocarbon reserves. Dr. Baru acknowledged the “indispensable role” played by geoscientists, mining engineers as well as metallurgists towards the development of the nation’s Oil and Gas Industry, adding NMGS was critical to the attainment of the NNPC’s core mandate.

“NNPC pledges to continue to work with you and every willing partner in the search for more hydrocarbon deposits in the country,” he said.

He said it was in line with this collaboration that the corporation developed a strategy involving various geoscience departments in the country’s tertiary institutions which culminated in the renewed search for hydrocarbon deposits in the inland basins.

He described as “saddening” last year’s unfor tunate incident which claimed the lives of s ome Un ive r s it y of M a i du g u r i s t a f f working on the Chad basin exploration as well as the loss of one of the corporation’s staff working on the Benue Trough exploration. “I pledge on behalf of the NNPC that their sacrifice shall not be in vain. There is no better way to honour the efforts of our gallant heroes than to continue the good work they died for,” he added. He thanked the Society for conferring on him with their Fellowship, saying that the recognition would spur him to rededicate himself towards giving his all for the Oil and Gas Industry and by extension the country.

He pledged to re-dedicate himself to the lofty ideals of NGMS, stressing that he would not disappoint the Society in the trust it reposed in him. Earlier in his speech, the President of the NMGS, Prof. Silas Dada said the Society was honounring the GMD for his untiring commitment and service to the growth of the Nigerian Oil and Gas Industry. Established in 1977 for the advancement and practice of mining, earth sciences and metallurgy, the Nigerian Mining and Geosciences Society (NMGS) is charged with upholding the ethics and safeguarding the interests of the professions covered by the society.

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INDUSTRY NEWS

Baru Bags Nigerian Newsdirect Man of the Year Award ...Says NNPC to revive four refineries soon

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he Ni ger ia n Nat ion a l Petroleum Corporation, NNPC, has said it would not relent in its efforts to get the nation’s four refineries back to the optimal nameplate capacities.

Group Managing Director of the Corporation, Dr. Maikanti Baru disclosed this shortly after receiving this year’s Man of the Year Award from Nigerian NewsDirect, a Lagosbased daily publication, recently.

Dr. Baru said as part of the ongoing reforms in the NNPC, the Corporation had been holding far-reaching discussions with some consortia to get the best funding options for the refineries’ overhaul. He added that the Corporation, under his watch, had recorded remarkable progress in resuscitating some of the nation’s critical downstream infrastructure, a development which has ensured a seamless supply of products nationwide, until the recent past hiccups which are now under control.

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Since coming on board, we have made the revamp of our abandoned assets and critical downstream infrastructure a key component of our corporate vision of 12 Business Focus Areas (BUFA),” he stated.

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Dr. Baru said over the last few months, several crude oil, petroleum products, and natural gas pipelines were resuscitated while more than half of the nation’s 21 strategic depots were also upgraded. He decried acts of pipeline vandalism, crude oil theft, and sabotage which he noted had resulted in huge loss of revenue, lives, and property as well as damage to the environment. The Group Managing Director called on the security agencies and other stakeholders nationwide to collaborate with the Corporation in its on-going campaign against acts of sabotage on the nation’s oil and gas facilities.

While attributing the recent fuel challenges faced in parts of the country to the nefarious acts of hoarders, diverters, profiteers, and smugglers, Dr. Baru stressed that the Corporation was working with relevant stakeholders to ensure that the sufficiency currently witnessed nationwide is sustained. Dr. Baru thanked the Editorial Board of Nigerian NewsDirect for conferring on him their Man of the Year Award, saying that the recognition would spur him to rededicate himself to continue to give his best to the Oil and Gas Industry and by extension the country. He commended the interest shown by the Nigerian media towards

the critical sectors of the national economy, a development which he said, had portrayed the Fourth Estate of the Realm as partners in progress in the Nigerian project. Earlier in his address, Chairman of Editorial Board of Nigerian NewsDirect, Prince Aderemi Adekile described Dr. Baru as a patriotic Nigerian with indelible imprints as a frontline engineer, a worthy patriot and one of the best administrators the oil and gas sector has ever produced.

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Today, we are recognizing him for his transparency, unrelenting effort at ensuring the stability of products supply, revamping downstream infrastructure, opening up of inland basins, growing crude oil reserves, increasing oil production as well as maintaining strategic communications amongst stakeholders in the Nigerian Oil and Gas Industry,” Adekile added.

Nigerian NewsDirect Publisher, Prince (Dr.) Samuel Ibiyemi said the publication decided to celebrate Dr. Baru as one of Nigeria’s best given the lasting impressions he is making on the nation’s Oil and Gas Industry.

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POWER

213 Containers Of Power Equipment’s Still Stranded At Seaport Against 159 Reported …to delay FG PSRP on nationwide electrification ... HOR yet to investigate PSRP incongruities

By Anthony Okafor

A

s against the reported 159 power equipment container stranded at the seaport, a fresh indication has emerged that 213 containers are yet to be cleared from the port. Investigation revealed that, out of the total 759 that were abandoned by contractors at seaports for several years, 213 containers is still at the country’s seaport yet to be cleared. It was gathered that the containers had been abandoned at the ports for about six years by contractors for various reasons, which includes the suspension of the TCN Import Duty Exemption Certificate, IDEC, in 2013 by the Ministry of Finance, also the slow processing of the IDEC by the firm in the past and inefficiency of the contractors.

The resulting effects have halt several transmission projects in various parts of the country.

The Managing Director/Chief Executive Officer, TCN, Usman Mohammed, had said that, “I think that at the last count, we had 758 or 759 containers at the ports.

We’ve actually cleared about 550 in the last one year that we’ve been here, but we still have 159 containers that are in the ports.” He also disclosed that some of the containers were being auctioned, we had to buy back the equipment from the auctioneers. He stated that the firm was also working to clear the remaining stranded containers, as it had commenced the process of clearing about 45 of them.

“Another thing is that even among the 159 that are at the ports, I think that about 45 are in the process of being removed and so it is about 112 or 113

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the draft of the programme last week.

that are remaining, which we have not completed the process.

However, we are working to remove all of them because we can’t leave them there.” But, finding shows that, as at the 6th of March, 2018, only 546 containers have been cleared as against the reported 550. A source from the Federal Government also disclosed that, they are still undergoing some negotiation process to clear the container, adding that, “Hopefully all would soon be cleared once we reach the agreement.”

Why power sector will not achieve it PSRP plan World bank had said that, 45 percent of the nation’s populace still without access to electricity while those connected experience frequent power outage, it remains a doubt for the sector to meet it Power Sector Recovery Programme, PSRP. The World Bank Group had expressed its willingness in assisting the federal government through its support for the PSRP, with a loan of about $2.5 billion, and an addition of $2.7 for private investment. But the bank only announced a $486 million International Development Association credit to support the rehabilitation and upgrade of Nigeria’s electricity transmission substations and lines. Although, the House of Representatives has mandated its Committee on Power to investigate the Power Sector Recovery Programme (PSRP) to resolve the incongruities in

According to unanimous adoption of a motion by Representative of Gombe at the HOR, Abubakar Ahmed (GombeAPC), “Inefficiency had bedeviled the power sector in the country in spite of the privatisation of power sector in September 2013. He added that the sector had failed to deliver valuable services to the citizens in spite of the huge costs committed to implementing power projects across the country. The lawmaker said that without government’s intervention, the cumulative shortfall of about one trillion naira would put the sector at risk of insolvency, leading to loss of investors’ confidence. Ahmed said that the Federal Ministry of Power, Works, and Housing in conjunction with the World Bank and other institutions, had created PSRP. He said that the programme was designed with a view to attaining financial viability for the sector and to rehabilitate the Nigeria electricity industry. In addition, he noted that though PSRP proposed solutions to financial concerns, it did not propose a solution for fixing the critical business, infrastructure and technical f laws, which accounted for the failures being experienced in the sector.

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The programme required the Ni g e r i a n B u l k E l e c t r i c i t y Trading Plc (NBET) to raise debt for funding, being the manager and administrator of the electricity pool in Nigerian Electricity Supply Industry.”

As part of the PSRP, the Federal government is yet to complete and commission the following renewable energy projects: 10 MW Katsina wind farm, 30MW Gurara Hydro Power, 29MW Dadin Kowa Hydropower and 40MW Kashimbila HydroPower, 700MW Zungeru Hydro Power and the 14 Solar Independent Power Plant, IPP. The program also mandate the Niger Delta Power Holding Company, NDPHC, to complete all projects to evacuation stage for all 10 power plants, complete all transmission projects, finalize all commercial agreement and the privatation of Calabar, Gerugu 2, Ihovhor and Omotosho power plants in conjunction with BPE, before the 20th of March, 2018.

Orient Energy Review Vol 7 No.03 March 2018 7

POWER

Edo in Talks with Azura REA Initiates 619 Rural Electrification Projects Power over New Projects – Obaseki

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do State Governor, Mr. Godwin Obaseki, has said the successful partnership between the state government and developers of Edo Azura Power Project has further demonstrated how much other investors can achieve if they invest in the state, Vanguard reports.The governor made the submission during an interview with journalists in Benin City, Edo State capital, noting, “The impact of the Edo Azura project is quite significant because it tells the world that things can be done properly and in line with global best standards in Nigeria, particularly in Edo State.”

“We are currently talking with developers of Edo Azura Independent Power Project to work with us in other ground-breaking development projects.” Noting that the state government will continue to partner with investors, he added.

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he Rural Electrification Agency (REA) said it has initiated and is working on 422 new electrification projects across the six geopolitical zones under the 2017 capital appropriation. It also hopes to complete another 197 projects that were approved under the 2016 budget appropriation, Daily Trust reports.

A breakdown of the new projects obtained from the agency yesterday showed that the North Central comprising Abuja has the lion’s share with 93 projects. The lowest share of the federal intervention rural electrification efforts went to the South West which has 43 projects.

Eni Targets 1-GWp Renewables Goal by 2021

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talian oil and gas major E n i SpA intend to pour EUR 1.2 billion (USD 1.47bn) in a plan calling for the addition of 1 GWp of renewable energy capacity by 2 021,

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There are 52 of the new capital projects in the North East, 77 others are in the North West, 76 are in the South East, and 81 projects are being executed in the South South geopolitical zone.

The Managing Director, Damilola Ogunbiyi according to the agency signed the contract agreement of over 300 contractors for year 2017 Capital Projects last Thursday at its headquarters in Abuja. The agency also said about 197 projects that were initiated before and during the 2016 budget year were in progress.

ALTERNATIVE ENERGY Renewables Now reports. This was announced in the company’s 20182021 strategy, which was unveiled in London on Friday as “the natural evolution of the strategy implemented in previous years.” Under the plan, the Italian group said it will lift its installed new energy capacity by nearly 400 MW in the next two years as a step towards achieving a longterm goal of up to 5 GWp by 2025. The new strategy envisages investment in a number of brownfield and greenfield solar and wind projects.

The schemes are expected to yield returns of around 10% on average, thanks to their distinctive integration with Eni’s upstream operations, the company said.

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ALTERNATIVE ENERGY

REAN Rejects 10% Import Duty on Solar Panels ...Says policy will hinder FG’S 2030 Electrification plan ...FG should dedicates task force ....It’s a government policy issue -Customs

By Anthony Okafor

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S the nation strives in the face of poor manufacturing capacity, with weighty reliant on imports, the Renewable Energy Association of Nigeria, REAN, has disclosed that the 10 percent import duty on solar panel by the Nigerian Customs Service, NCS, will hinder the Federal Government 2030 vision on nationwide electrification.

This is even as the Association calls on the Federal Ministry of Finance to establish a dedicated task force for Renewable Energy (RE) and Energy Efficiency (EE) within the Nigerian Customs.

According to the President, REAN, Mr. Segun Adaju, “It has come to the attention of the Executive Committee of the REAN, a private sector renewable energy group in Nigeria, that our members are being forced to pay between 5 percent to 10 percent import duty on solar panel by the Nigeria Custom Service even though under the CET code 8541.4010.00 a classification for import duty tariff on solar panel should be 0 percent.” Reacting to the claim, the Public Relations Officer of the NCS, Mr. Joseph Attah, “It has to do with the policy of the federal government.

It is true that the government policy to support electrification of the nation actually places solar panel on HS code 8541 which is zero percent duty.”

Adaju explained that, “The imposition of a rbitra r y por t cha rges w i l l accelerate value destruction within this industry and will cause prices to rise to uncompetitive levels. All over the world, the cost of solar panels is falling leading to increased adoption of renewables. Paris-based International Energy Association said that renewables accounted for almost two-thirds of net

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power capacity around the world in 2016, with almost 165 gigawatts (GW) coming online boosted by solar. The country stands to lose out on this.

In addition, he stressed that, “Nigeria currently does not have the capacity to manufacture solar panels in volumes that meet market demand hence our recourse to importation while growing capacity locally. This tariff will increase acquisition cost of solar panels in Nigeria which are currently heavily deplored in rural areas where purchasing power is low. This could derail Nigeria’s plan to generate 30 percent of electricity t h r ou g h r e ne wa ble s by 2 03 0.

“Consequently, discharge of goods from the ports has been slowed down immensely and demurrage charges have risen for our members since the start of the year. This has grave implications for Nigeria’s quest to improve the ease of doing business and deepen energy quest for over 70 million people without inadequate access to power.

He noted that the nation moved up 24 places, from 169th to 145th on the World Bank Ease of Doing Business Report in 2017 because of the current administration willingness to improve business climate and ensure the survival of private sector. Segun stated that, “We commend the Presidential Enabling Busi ne ss Env i ron ment Cou nci l (PEBEC) team on its successes thus far.

However, it will be counterproductive for government agencies at the ports to operate in a manner that set them against the vision of government.

This will reverse achievements this government has made thus far.

government, the federal ministry of finance, PEBEC and EBES to take control of the situation immediately and instruct the Nigerian Customs Service to immediately stop the imposition of these port charges on imported Solar Panels.

“We also urge the Federal Ministry of Finance to establish a dedicated task force for Renewable Energy and Energy Efficiency within the Nigerian Customs that will fast track screening of RE and EE components coming into the country and streamline the cumbersome importation process. This task force will also ensure that the correct HS codes and federal government incentives are applied to imported RE and EE goods.

“As concern Nigerians and sector participants, the members of REAN have answered that national call by providing solutions to the country’s epileptic power situation and our members currently provide over 10,000 direct and indirect jobs to the Nigerian economy. This is apart from the other benefits like increased disposable incomes, improved environmental conditions (like reduced noise and air pollution due to the displacement of diesel generators).

The PRO, NCS further noted that,

“

However, the World Custom Organisation stated that, a panel without any other component is classified under 8501 which attracts 5 percent, so if you bring a set that has some other components comes with the panel, it is no longer classified under 8541, rather it is classified under 8501 and it attracts 5 percent duty charge.”

He noted that If the association want to bring the complete solar set to zero percent, “It will be in their place to approach the federal government to bring 8501 under the zero import duty policy and we will implement, because, we only implement policies of the government.”

“We, therefore, urge the federal

Orient Energy Review Vol 7 No.03 March 2018 9

LOCAL CONTENT

Full Integration of FPSO will Happen in 8 years -Wabote …FG to prioritize oil productions with competitive costs-Kachikwu

Egina FPSO was sufficient to solve the nation’s electricity challenges, ref ine petroleum products to meet the needs of the populace, build durable roads and address other infrastructural deficiencies.

Kachikwu charged project promoters in all spheres of the energy sector to fast track their projects, noting that the Federal Government was in a hurry to industrialize the nation and increase the volume of crude oil production at competitive costs.

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he Nigerian oil and gas industry must strive to develop local capacities to execute full fabrication and integration Of Floating Production Storage and Off loading (FPSO) vessels in-country within the next eight years, the Executive Secretary, Nigerian Content Development and Monitoring Board (NCDMB), Engr. Simbi Wabote has said. He spoke on recently in Lagos when he accompanied the Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu and other top officials of the oil and gas industry to inspect the Total Exploration and Production Nigeria Limited’s Egina FPSO docked at the SHI-MCI Yard, LADOL Free Zone.

The Executive Secretary commended Total E&P for setting high Nigerian Content benchmarks with the Egina project, in engineering, fabrication, testing, coating and integration, stressing that the challenge for forthcoming projects would be how to raise the bar. “Our aim is to stretch the limit to get more for Nigeria.Our aspiration is that come the next seven to eight years, full integration of an FPSO must happen in Nigeria.” Already the Board and major operating companies are working towards full domiciliation of FPSOs. The Zabazaba deepwater project being promoted by Nigerian Agip Exploration Limited (NAE) in partnership with Shell Nigeria Ex ploration a nd P roduction Company (SNEPCo) and the Bonga South West Aparo (BSWA)deepwater project also developed by SNEPCO

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have been planned to domicile 50 percent of the fabrication of modules and integration of the FPSOs. He also charged other operating companies in Nigeria to take a cue from Total’s can-do attitude and their fervent belief in the Nigerian capability.

“When the oil price fell to almost $27 a barrel, they did not stop the project.

They continued and Nigerians were engaged.” The first key stephe said, is for companies “to stop looking for waivers and change the default thinking from ‘it cannot be done here’ to ‘what do we need to do to make it happen’.”

The NCDMB boss also affirmed that the Egina project has changed the narrative about the capacities and capabilities of oil servicing companies in Nigeria. According to him, “the project simply raised the bar in local participation in various scope covering the Wells, Subsea Production Systems, Umbilicals, Flowlines and Risers, FPSO topsides, and Offloading buoy.“One of the Nigerian contractors that fabricated the Buoy completed it three months ahead of schedule. The argument often put forward by project promoters is that Nigerian Content is expensive and cannot deliver on schedule. Egina has buried that mindset for forever.”

He also underscored the need for new projects to sustain the achievements and employments that were created on the Egina project.

In view of the oil prices which currently hover within the range of 60 dollars per barrel, the Minister informed that the Federal Government will soon prioritize oil production from fields that bring more returns to the nation as against others that operate with high production costs. He said, “we will begin to pay more emphasis on where we make more money. As you look at your numbers and the terms under which you want to develop these fields, please spend a good amount of time in checking the bottom-line and what goes to the Federation Account. There is no need building a huge $70 billion facility without commensurate value addition. Those kinds of things wouldn’t happen anymore. So the terms will change and basis on which you will proceed will change.” Also speaking, the Managing Director of LADOL, Dr. Amy Jadesimi highlighted the key roles played by the Board on the Egina project. She said,

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the feat would not have been possible if NCDMB had not insisted and if Total had not taken a huge risk when nobody thought it was possible to support us. I also want to thank NCDMB for providing us the financial support.”

In his remarks, the Minister of State for Petroleum Resources commended Total for the feat noting that local capacities deployed to fabricate the

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LOCAL CONTENT

NCDMB to Sue Offenders of Local Content Act

… Justices must refer to the NC Act in Oil and Gas cases – CJN

By Margaret Nongo-Okojokwu

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il and Gas companies that fail to comply with the provisions of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act will henceforth be dragged before the law courts by the Nigerian Content Development and Monitoring Board (NCDMB), the Executive Secretary, Engr.

Simbi Kesiye Wabote said in Abuja recently.

He spoke at the first national seminar for Justices and Judges on the Role of the Judiciary in the development of the Nigerian Local Content Law and Policy, organised by the Juris Law Office and NCDMB in collaboration with the National Judicial Institute (NJI). He noted that the NCDMB had used administrative procedures to enforce the Act in the past eight years but will begin to prosecute cases of infringement in line with Section 68 of Nigerian Content Act.

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We are changing gear in NCDMB from writing letters of non-compliance on infractions to actual prosecution of offenders who think they can trample on the law of the land on Local Content and get away with it.”

The Executive Secretary said the Board delayed the prosecution option because it wanted to fully exploit the Alternative Dispute Resolution (ADR) mechanism, develop its operating guidelines and organise capacity building workshops on the Nigeria Content www.orientenergyreview.com

Act for the Judiciary. “After this workshop, we will begin to institute cases in the courts. If we don’t enforce the provisions of the Act, we will not be able to create employment opportunities for Nigerians from the activities in the industry.” Giving details of the Board’s achievements, Wabote explained that most fabrication, engineering, and procurement in the oil and gas industry were done abroad prior to the enactment of the NOGICD Act in 2010 and it resulted in estimated capital flight of $380billion Dollars in 50 years.

“Estimated job lost opportunities was in the region of two million.

The narrative then was that nothing can be done in-country resulting in less than five percent of in-country value addition.

He added much of the 28 percent Local Content achievement recorded since the enactment of the Act till date were done using the passion and commitment of the various directorates of the Board.

According to him, “our next big leap from 28 percent to 70 percent incountry value retention will require step change in the enforcement of the law to drive reversal of capital outflow.”

He further solicited the support of the Justices when interpreting the objectives and philosophy of the NOGICD Act if cases bordering on Local Content become subject of litigation. “We need the support of the judiciary to achieve our drive

to create wealth for local businesses and jobs for our teeming populace in line with the law.” The Local Content boss stated further that the target Nigerian Content level is meant to create 300,000 direct jobs and retain over $14billion in-country out of the $20billion yearly spend.

In his keynote address, the Chief Justice of Nigeria, Justice Walter Onnoghen charged judicial officers to always refer to the Nigerian Content Act when deciding matters related to oil and gas servicing and exploration contracts as such agreements must comply with the Act. He underscored the need for Justices and Judges to keep abreast with developments in the Nigerian oil and gas sector, adding that “the adjudicatory duty of a Judge can only be performed optimally when he remains up to date with the emerging developments and trends in jurisprudence pertaining to the oil and gas sector.”

The CJN challenged judicial officers to ensure speedy resolution of disputes so as to assure investors and other major players in the Oil and Gas industry that their investments are safe. Onnoghen also directed judicial officers to encourage the use of Alternative Dispute Resolution mechanism, such as Arbitration and Mediation to ensure quick resolution of cases in the oil and gas industry.

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LOCAL CONTENT

Senate Committee on Local Content Commends NCDMB

By Margaret Nongo-Okojokwu

fulfil its mission “to be the catalyst for the industrialization of Nigerian oil and gas and its linkage sectors”.

He acknowledged the encouraging remarks of the Senators noting that their commendations and positive feedback will act as fresh tonic to the Board in the pursuit of its strategic objective to increase Nigerian Content performance to 70 percent in the next ten years.

the Oil and Gas Industry.

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embers of the Senate Committee on Local Content have lauded the Nigerian Content Development and Mon itor ing Board (NCDMB) for its strategic implementation of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act and the steady growth in local capacities in the Oil and Gas Industry. They made the commendations at the close of the three–day capacity building workshop organized for the Senate Committee on Local Content in Accra, Ghana.

After several insightful presentations on the Board’s mandate, operation, the regulatory framework in the Nigerian Oil Industry, the journey so far and the challenges of enforcing compliance, all the eight Senators in attendance lauded NCDMB for the significant milestones recorded, despite very many drawbacks.

Chairman Senate Committee, Senator Solomon Adeola stated that from all that he had heard and seen, the Board is fulfilling the purpose for which it was established. The Senate Minority Leader and Vice Chairman of the Committee, Sen. Godswill Akpabio as well as other Senators re-echoed the same opinion and promised to support the Board to ensure that Nigerians derive more benefits from

12 Orient Energy Review Vol 7 No.03 March 2018

The Deputy Minority Leader of the Senate, Senator Abiodun Olujumi underlined that the participation of two principal officers of the Senate – with six other senators clearly showed the importance the upper legislature attaches to the issue of local content in Nigeria.

In his opening speech, Sen. Adeola reminded members the purpose for creating the Senate Committee on Local Content, which includes to ensure the use of local manpower by companies operating in Nigeria; design policies that would engender the patronage of locally made goods and services; to oversight the work of NCDMB and to identify the gaps in the NOGICD Act with a view to amending it to reflect current realities. He noted that the Senate capacity building workshop was necessary to develop legislators’ understanding of NCDMB’s Mandate, the journey so far, what has been achieved, the challenges and further actions required “to ensure that Nigerians derive more benefits from the industry”.

The workshop had many papers presentations from a cross section of professionals. The papers were followed with Panel Discussions.

There were lively and extensive question and answer sessions. At the end of the workshop, the Senators unanimously agreed that there was an overwhelming need to amend the NOGICD Act to provide clarity to some vague and ambiguous expressions in the Law; to revisit the waiver provisions; to rephrase the section on penalty for effectiveness; and to undertake a holistic review and repackaging of the Act to cover other sectors of the economy and to meet current realities.

The senators also identified the urgent need to resuscitate technical and vocational education (TVE) as a vector for human capacity development. They observed that the curriculum of science, engineering and technology courses offered in Nigerian Universities and other tertiary institutions needs to be reformed and reorganized to meet requirements of the Oil and Gas Industry.

Speaking on the topic, “Structure and Operation of the Nigerian C ontent Development a nd Monitoring Board”, Executive S ecreta r y, NCDMB, En g r.

Simbi Wabote, reaffirmed the determination of the Board to

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LOCAL CONTENT

NAPTIN to Train Young Nigerians for Careers in Power Sector

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he National Power Training Institute of Nigeria, NAPTIN, says it plans to train young Nigerians desirous of seeking careers in the power sector. Acting Director General of NAPTIN, Mr. Ahmed Nagode, who stated this, said beneficiaries will go through skills acquisition training in skills that are in high demand in the power sector, including d i s t r i but i on s u b s t at i on operation, cable jointing, lines maintenance and electrical fitting.

TCN workers was flagged off in Lagos recently with TCN workers from Nigeria’s six geopolitical zones represented.

The institute will also be training 203 staff from power d i s t r i but i o n c omp a n i e s in Nigeria and 42 workers from Ghana’s Volta River Authority/Gridco. NAPTIN is conducting the training under an international collaboration with the Association of Power Utilities of Africa, APUA. “We are privileged to be the only APUA centre of excellence in the whole of English speaking West Africa.

Nagode disclosed this as he announced the commencement of training of 300 engineers of the Transmission Company of Nigeria, TCN. A two-week training of the first batch of

“

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This feat was achieved as a result of NAPTIN meeting the requirements of APUA for admission into the African Network of Centre of Excellence

i n Electr icity (A NCEE) culminating in an MOU with APUA whose dividend we are witnessing today”, he said.

The NAPTIN boss said that the initiative will not only lead to enhancement of the capacity and competency of the manpower of the affected utilities but also transform into improvement in the delivery of electricity to the countries.

According to him, the initiative will also serve as a means of generating foreign exchange to the nation because the contract with APUA is in Euro currency, to be paid into the government’s Treasury Single Account, TSA.

Orient Energy Review Vol 7 No.03 March 2018 13

DOWNSTREAM

IPMAN Tasks NNPC on Rehabilitation of Ore, Ilorin Depots …We will revive refineries soon – NNPC

T

he Independent Petroleum Marketers Association of Nigeria, IPMAN, has tasked the Nigerian National Petroleum Corporation, NNPC, to expedite action on the rehabilitation of the Ore and Ilorin depots – both owned by the NNPC.

products to depots in the western part of the country, to address shortage in the hinterlands.

Alhaji Debo Ahmed, Chairman, IPMAN Western Zone, made the appeal in Lagos, as the NNPC Group Managing Director, Dr. Maikanti Baru, also speaking in Lagos, assured on NNPC’s com m itment to br i n g i n g the nation’s four refineries in Warri, Kaduna and Port Harcourt back to their optimal nameplate capacities. Ahmed, who spoke against the backdrop of the inability of IPMAN members to import petrol into the country, also called on the NNPC to intensify efforts on the distribution of petroleum

“We are very happy about the massive supply of petrol to depots within the western zone, which has the biggest depots in the country,” he said, adding: “The supply of petrol to depots has improved grossly in the western zone. We appeal to NNPC to maintain the tempo”.

14 Orient Energy Review Vol 7 No.03 March 2018

Ahmed said full rehabilitation of the Ore and Ilorin depots would ease loading and distribution activities within the western axis.

“

All depots within the western zone now sell petroleum products at government-regulated prices, compared to when petrol was sold above ex-depot prices,” he said.

A h med assu red that h i s members would partner with NNPC officials to ensure the protection and surveillance of petroleum product pipelines, to curb incessant vandalism.

Meanwhi le, NNPC Group Managing Director, Dr. Baru, has said the corporation would not relent in its efforts to get the nation’s four refineries back to their optimal nameplate capacities.

Baru said, as part of the ongoing reforms in the NNPC, the corporation had been holding important discussions with some companies to get the best funding options towards the refineries’ overhaul. *Sweetcrude Reports

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Orient Energy Review Vol 7 No.03 March 2018 15

COMMUNITY DEVELOPMENT

Rivers Community Pledges To Protect Oil Facilities against Vandalism

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s a way of fighting vandalism, the people of Olo community in Ikwerre Local Government Area of Rivers State, have pledged to exert surveillance on all oil wells, flow stations, oil installations and other facilities in the community.

The community has also called on all oil firms operating in the area, particularly Total Exploration and Production Nigeria Limited, to embark on people-oriented projects as part of their corporate social responsibilities to the community.

Leader of the community, Chief Anthony Wonah, announced the position of the community while briefing newsmen at an event in Port Harcourt. Wonah emphasised that the community was resolved to fight any acts of pipeline vandalism, oil theft and illegal bunkering in the area. According to him, “We affirm to abstain from and not to indulge in any acts of vandalism, kidnapping and any other uncouth and unscrupulous behaviour that is capable of hampering the peace and development of our communities.” The community also called on potential investors to come into area, assuring that the safety of their investment was guaranteed.He added that the people of Olo community were law abiding and open to partnership to promote peace, development and wellbeing of the community.

Shell, Eni ‘Misled’ Nigeria on Oil Spills, Amnesty International Says

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oyal Dutch Shell Plc and Eni SpA may have misled regulators in Nigeria by wrongly attributing oil spills to theft and sabotage in order to avoid paying compensation to affected communities, rights group Amnesty International said.

“Amnesty International researchers have identified that at least 89 spills may have been wrongly labeled as theft or sabotage when in fact they were caused by ‘operational’ faults,” the London-based group said in a report released recently.

“Of these, 46 are from Shell and 43 are from Eni. If confirmed, this would mean 16 Orient Energy Review Vol 7 No.03 March 2018

that dozens of a f fe c t e d communities have not received the compensation that they deserve.”

Shell and Eni, along w ith ExxonMobil Corp., Chevron Corp. and Total SA operate joint ventures with state-owned Nigerian National Petroleum Corp. that pump most of the crude of Africa’s biggest producer. In the southern Niger River delta, which is home to the country’s oil and gas industry, local communities are frequently in conflict with energy companies over allegations of pollution and environmental degradation.

environment in which the company operates,” Shell’s Nigerian unit said in an emailed statement. The company “responds to spill incidents as quickly as it can and cleans up spills from its facilities regardless of the cause,” according to the statement. Details of the alleged spills said to have occurred from 2011, in the case of Shell, and from 2014 for Eni, have been given to the Nigerian government, which is being urged to reopen investigations into the incidents, Amnesty said. Eni will make a statement later in response to the allegations by Amnesty International, a company official said when contacted for comment. Shell and Eni have been on trial in Italy since March 5 over bribery charges involving an oil field in Nigeria.

They are accused of having paid $1.1 billion to the Nigerian government in 2011 for a license to drill in deep waters off the Nigerian coast.

Courtesy: Bloomberg

SHELL DENIAL “The allegations leveled by Amnesty International are false, without merit and fail to recognize the complex

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Orient Energy Review Vol 7 No.03 March 2018 17

WAIPEC 2018

New Energy Mix: Time for Africa to Plan for the Harsh Reality

By Oge Obi

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he world is experiencing a new energy mix with other sources of energy trying to replace fossil fuels. The demand for cleaner energy is growing by the day and African continent, particularly Nigeria as a country cannot afford to close its eyes to the realities on the ground. Drawing the continent’s attention to the inevitable transition to other sources of energy, the 2018 WAIPEC provided participants with the up-todate information on industry trends. To industry players and stakeholders, the conference was a good step in the right direction as it sent a timely wake-up call to Nigeria and other countries from the continent of Africa in readiness for the new energy mix.

The West A f r ican Inter national Petroleum Exhibition and Conference, WAIPEC in its 2018 edition with a theme, “Sustaining West African Oil and Gas Production through Innovation and Collaboration” discussed industry trends and charted the way forward towards attaining a profitable growth in the sector. Converged at Eko Hotels and Suits between February 7 and 8, seasoned industry experts, key players and stakeholders in the oil and gas industry around the world, dissecting the conference theme provided exclusive insights to stakeholders and key players in Nigerian and Western African’s oil and gas supply and value chains. The conference among others provided insight on how to unlock strategic value from the untapped opportunities in the sector as well as revealing how to leverage innovation, best practice, and technology to grow the industry as well as how to remain competitive in a tough global market.

In his presentation titled, “Global Energy

18 Orient Energy Review Vol 7 No.03 March 2018

Transition: Way Forward for Nigeria”, the Managing Director, Nigeria LNG Limited, Tony Attah said that global energy transition is real and cannot be wished away. He noted that oil and gas executives’ argument and denial that the advent of renewables will not succeed or last, has no indices supporting their denial position and that the world is moving on with the renewables.

Asking rhetorically, Attah said, the question for Nigeria is: “Are we ready because we are aware that countries are making moves in preparation for the energy transition?” According to him, “Nigeria needs to develop gas in readiness for the challenge ahead of her. We can power our economy just on the strength of gas and gas alone can lift Nigeria,” the LNG boss proposed. Speaking further, the industry expert noted that the thirst for cleaner energy is increasing and a lot of it has to do with increasing environmentfriendly policies. And that in response to the need for cleaner energy, countries like the United Kingdom, Sweden, Norway and many other countries are making moves to significantly reduce their carbon footprint.

Citing example with India, which he said aims for 40% renewable energy by 2030, stressing that the United Kingdom will join France to ban fossil-fuel cars by 2040. He further revealed that Norway aims for all new passenger cars and vans sold in 2025 to be zero-emission vehicles while Sweden has committed to 100% renewable energy by 2040. Charting the way forward, the LNG boss said, “The best bet for Nigeria is gas. It is available in abundance and three times cleaner than oil in terms of carbon content.

Nigeria has to begin to think about the relevance of oil in the future. Nigeria

has to start to develop its gas resources in readiness for the future. Some critics say gas is not profitable but let me draw your attention to Qatar, a small fishing economy which was transformed from a GDP per capita of $2,000 in1970 to a GDP per capita of $124, 000 in 2017 using gas. “Gas can lift Nigeria, which is where NLNG comes in. NLNG is producing 22 Million Metric Tonnes Per Annum (MMTPA) but we are not resting on our oars. We want to construct a Train 7 that will increase our capacity to 30 MTPA. It is time for gas. It is time to unleash Nigeria’s potentials. That is how we can survive the future with increasing appetite for renewable energy.

“The world’s population will grow by an additional 2 billion people by 2050.

They will need energy. Where will it come from? Most stakeholders in the future will not accept the carbon emission levels that are prevalent now. Renewables play a significant role in the growth of electricity, contributing almost 40% of the growth in global power generation in 2016. By 2040, EIA estimates that 31% of world electricity consumption would come from renewables, roughly half of which will be from hydropower, as wind and solar power will grow rapidly in the coming decades.” “The energy mix is fast changing and Nigeria has to come to terms with that. Nigeria’s proportion of global total proven oil reserves is 2.2% and gas, on the other hand, is 2.8%. What are we going to do with these resources?

There is still coal in Enugu and all these fossil fuels will still exist in the future but will they be acceptable as a source of energy? I think that is the harsh reality we have to prepare for,” he said.

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WAIPEC 2018 Meanwhile, the CEO of Seplat Petroleum Development Company (Nigeria), Mr. Austin Avuru in his keynote address titled, “The Future of the Global Oil and Gas Industry in the next Decade and the Impact on the African Region” said that while attention is shifting to renewable energy, Africa should strive to attain domestic energy security in the region.

The industry expert explained that as the improvement on the continent’s GDP continues, that it will certainly attract increased energy demands. To the CEO, the African region should concentrate its effort on building structures that would guarantee a sustained supply of energy over the next 20 year. According to him, the replacement of the fossil fuels by renewable energy may not be as swift as it is being presented, after all. “We seem to suggest in an alarmist way that by 2035 perhaps there will be no place for oil and in gas in the world.

Multinationals are investing substantial funds today away from oil and gas into renewable around the world.

“However, within Africa, as the GDP improvement continues, we will naturally see increased consumption of energy.

Therefore, for us in Africa, the emphasis over the next five years so that we can sustain our consumption over the next 20 years will be on domestic energy security.

“

So, as emphasis and investment funds are moving away into new frontiers of renewable. We, as Africans and operators in this continent need to recongise that a lot of those new frontiers when they are fully developed will take another 20 years to return to Africa for our consumption and therefore in the meantime as they are moving

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into those new frontiers, we, here in Africa need to emphasis domestic energy security so that on our own internally, we can survive,” Seplat boss averred.

Speaking on the oil balancing, Avuru said that the industry will be better off with a stable oil price that will translate to a reliable oil rebalancing result, rather than the rise in the oil prices that may unleash more pain on the industry as was the experience in the past. “We will rather have a stable $60 oil than an $80 oil that will draw us out with our investment funds and then crash back to $30. But the rebalancing we are referring to is the fact that when the prices get to a certain threshold, certain volumes of unconventional become attractive to develop. Stressing that the present positive changes in the prices of crude oil was a combination of factors, Avuru said, “When the prices crashed that it become too low like we saw in 2016, a lot of projects were deferred. The $69 you are seeing today are results from projects that were differed or cancelled 24 months ago. Over that period of time, was the OPEC influence, the Paris agreement, carbon dioxide emission, among others.”

Earlier in his address, the PETAN President, Bank Anthony Okoroafor, while welcoming participants to the second edition of the WAIPEC conference, said that PETAN through the conference wants to promote the region’s oil and gas industry, seek industry best practice, explore new technologies and develop commercial opportunities for business and international investment.

integrated platform for business organized by the industry. He further disclosed that the organizers of the conference had carefully selected keynote speeches, topics for discussion, and panel sessions to be handled by seasoned industry experts.

Adding that critical issues affecting industry would be discussed. Speaking further, the PETAN President noted that the conference theme was apt. “At a time when the industry is grappling with the daunting challenges of oil discoveries everywhere and the attendant oil price hovering around $69 with their effects on the affected economies. The WAIPEC conference offers a veritable opportunity to oil industry stakeholders to gather, deliberate and articulate ideas on relevant developments, strengths and challenges.

“It is noteworthy that this conference is organized by the industry and for the industry. That is, it is the best conference this year. Following our current realities, including depleting oil production and reserve, security challenges becoming complex, high and increasing unit cost of production, crude budget indices, low industry activities and uncertainty of physical framework.

“

We have assembled seasoned industry stakeholders and operators who will dissect this theme from their perspectives and experiences. The conference is rich in technical content. It is our belief that the sessions will enrich us in the issues we discuss, showing our willingness to make necessary sacrifices to sustain the industry towards a viable, stable and prosperous,” Okoroafor said.

According to Okoroafor, the WAIPEC second edition was commissioned by PETAN to serve the industry as an

Orient Energy Review Vol 7 No.03 March 2018 19

WAIPEC 2018

Local Content Policy Performance Dependent on Strict Adherence to Rules

By Oge Obi Hon. Emmanuel Ekon has disclosed.

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esides the need for capacity building in relevant areas, gover n ment agencies commitment and willingness to strictly adhere to the principles of the nation’s Local Content policy implementation is an important factor in the attainment of measureable policy performance, the chairman, House Committee on Local Content, National Assembly,

Speaking du r i n g the 2 018 the West African International Petroleum Exhibition and Conference, (WAIPEC) in Lagos recently, Ekon warned that Nigeria may be far from realizing her local content policy objectives if those charged with the responsibility of ensuring proper implementation of the policy fail in their oversight function. Adding that what the country needs to enjoy the huge benefits accruable to her and her citizenry from the policy was sincere implementation.

“A situation where the regulatory bodies that are supposed to do the right thing are even the one that are

infracting the law, it is not going to take us to anywhere,” the Legislator said.

The lawmaker, who called for full implementation of the law, said “If the law is implemented the way it is crafted, I believe we will have fewer issues in our oil and gas sector.” Cautioning against quick gratification strategies allegedly adopted by some local firms against building up and having the needed competencies and capacities, Ekon advised indigenous firms to pay more attention to capacity building rather than focus on how to make quick money. Speaking further, the House Committee on Local Content warned that, “the fact that we are running local content regime doesn’t meant that we have to patronize incompetents. We need to patronize Nigerian companies, but the demand should be based on competence.” Earlier in his remarks, the lawmaker commended the organizers - Petroleum Technology Association of Nigeria (PETAN) for their efforts and commitment on how to grow the industry as well as the nation’s economic wellbeing.

Nigeria’s Emeka Ene Appointed IGU’S Vice Chair For The 2018-2021 Triennium

By Margaret Nongo-Okojokwu

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equel to its meeting held on 26 October 2017 in Tokyo, Japan; the Council of the International Gas Union (IGU) has entrusted Nigeria’s Mr. Emeka Ene (member, NGA), CEO Oildata Energy Group (Oildata & Xenergi) with the position of Vice Chair of the IGU Exploration & Production Committee for the 2018-2021 triennium. According to Article 11.4 of the IGU Articles of Association, the Vice Chairs for the 2018-2021 triennium are eligible to become Chairs in the 2021-2024 triennium, subject to the decision of the

20 Orient Energy Review Vol 7 No.03 March 2018

IGU Executive Committee (IGUEC).

Having a representative in a Chair position in one of the standing IGU Committees also means that Nigeria automatically has a seat in the IGUEC during the same tr ien n ium. Mr. Ene has accepted the appointment.

The IGUEC shall formally appoint Mr. Ene at its meeting in Cairo on 18 April 2018.

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Orient Energy Review Vol 7 No.03 March 2018 21

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Orient Energy Review Vol 7 No.03 March 2018 23

LOGISTICS/ MARITIME

Buhari Pledges FG’s Support for Lekki Deep Sea Port Project

By Oge Obi

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resident Muhammadu Buhari on Thursday flagged off the construction of the Lekki Deep Sea Port in Lagos, promising that the Federal Government would give the needed support to the project.

The President, who was represented

by Vice President Yemi Osinbajo, noted that the project would become one of the largest seaports in the region. Adding that it would serve as a hub for port operations in the whole of West Africa. According to Buhari, the seaport, once completed, is designed to influence the generation of up to 170,000 direct and indirect jobs in the economy. He said, ”It is a landmark project for several reasons — the promoters of this project are targeting, we are told, about 1.5 million TEUs (Twenty Equivalent Units) container capacity annually, which they expect to grow to about 2.7 million and 4.7 million TEUs when the project commences. ”With this feat, this seaport will become

24 Orient Energy Review Vol 7 No.03 March 2018

one of the largest in our region and serve as a hub for ports operations in the whole of West Africa.”There is no question at all that the project will be the largest in Sub-Saharan Africa and possibly, the largest in Africa. ”I’m also told that the promoters also plan to dredge the port channel to about 16metres draft, which is not currently obtainable in any sea port or any port for that matter in the country.

”

This, in itself, is an indication that ships of larger sizes will now be able to visit the port, and greater efficiency and economies of scale will generate significant revenues for the Nigerian economy, with government earning a significant portion of it.”

Speaking further, the President hinted that the second reason why the port’s construction is a landmark event is because of its relevance to the government’s Economic

Recovery and Growth Plan (ERGP) and FG’s emphasis on supporting game-chang i ng i n f rastr uctu re projects directed at making major impact on trade and commerce. ”We are developing the Lekki Special Economic Zone as a model special economic zone, specifically targeting exports. The development of this deep-sea port is mission-critical to the achievement of the important objective of creating this special economic zone ”So, the third reason is the commitment of our economic philosophy to private sector leadership of our economic development. ”This project is essentially private sector driven — the Tolaram Group and China Harbour are of course the lead private sector participants in this project. ”And like we have heard, their commitment to this project is total. I commend them for driving this project this far.

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LOGISTICS/ MARITIME ”The Nigerian Ports Authority and the Lagos State Government are the public sector partners. The business of government is, in our view, to contribute by way of equity when necessary to project of this size, but more importantly, to create the enabling environment for the private sector.

”

Let me say that we must move ahead to ensure the speedy completion of this project. There would be problems as I’m sure you must have experienced some. Be assured that the Federal Government and the Lagos State government will be with you every step of the way to ensure that we give all the support that is required, ” he said.

Also speaking, Governor Akinwunmi Ambode of Lagos State, represented by his deputy, Idiat Adebule said the Lekki port was a golden egg waiting to positively impact the economy.

Ambode explained that the project

was a testimony of government’s commitment to growing the economy and aligning the country with the industrialised countries in the world.

“Data shows that the maritime industry has the potential of becoming a major revenue to the GDP of Nigeria. ”This port when delivered in 2020 will have modern features that will ease pressure on Apapa and Tincan port as it has the capacity to berth larger vessels. This port will impact greatly on the development of the Lekki Free Trade Zone. ”This journey started in 2007 and has been pursued with doggedness.

The Lagos State government has equity stake of 20 percent in the Lekki Deep Sea Port. ”This is a show of our faith in the viability and our trust in the capability of the Tolaram group to deliver the project. “It has been estimated that this project will facilitate an injection of $2.23 billion for construction and fixed assets into the country. This projected to over a 45-year concession period has an

aggregate impact of about $3.61 billion on the Nigerian economy.”

The governor called for more private investment to complement the provision of infrastructure, saying the government could not bear the cost alone. He also solicited the support of the Federal Government in all ramification to partner in the project.

In his remarks, Chief Executive Officer, Lekki Sea Port, Navin Nahata, one of the promoters of the project, said that the project had demonstrated that Nigeria is an investment destination.

He promised to put in all efforts to deliver the project by 2020.

Buhari, who is on a two-day state visit to Lagos, also commissioned an ultramodern bus terminal in Ikeja and attended the 66th birthday colloquium of former Lagos Governor, Bola Ahmed Tinubu.

NIMASA Reiterates Commitment to Building Robust Maritime Sector

By Oge Obi contribute to t h e n at i o n’s Gross Domestic Product, GDP.

T

he Ni ger ia n Ma r iti me Administration and Safety A g e n c y, N I M A SA , h a s reiterated it commitment to building a robust maritime sector and to

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NIMASA Director General, D r. D a k u k u Peterside, who stated this at the City People Media Group’s 21st awa rd c e r emony i n Lagos at the weekend, said the Niger ia n maritime sector has the capacity to catalyse economic growth. Dakuku who won the “Award of Excellent Leadership in Public Service”, said the award was an indication that the efforts of the agency in repositioning the sector

had not gone unnoticed.

In his words, “This award means a whole lot because it shows that Nigerians acknowledge the efforts that we are making to ensure a cleaner ocean for safe and secure shipping. Also, this will spur us to keep doing our best so as to have a robust maritime sector capable of catalysing and impacting the growth and development of the economy”.

He disclosed that in the past two years, NIMASA for the first time was able to put over 250 cadets onboard ocean-going vessel to do seatime training, making them employable.

He added that NIMASA also went a step further to release the maritime industry forecast, which will serve as a compass to investors for the year 2018 and 2019.

Orient Energy Review Vol 7 No.03 March 2018 25

Technology and Oil: Navigating the Thin Line

By Godspower Ike, Dirisu Yakubu Margaret Nongo-Okojokwu

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he Petroleum industry has over the years thrived on technology and innovation.

New initiatives are constantly being introduced in the drilling, exploration and production of crude oil and gas, as well in the refining of crude oil and gas and monitoring of petroleum infrastructure. This article seeks to explore the many ways technology and innovation had changed the face of the petroleum industry and the future of the petroleum industry in the face of advanced and changing technologies.

Technology is currently changing the face of the global petroleum industry, and has gone a long way in boosting efficiency and bringing about a significant reduction in the cost of crude oil exploration and production.

The National Petroleum Council (NPC), in one of its topic papers on

26 Orient Energy Review Vol 7 No.03 March 2018

the global oil and gas, disclosed that technology has continued to develop in pursuit of larger quantities of petroleum from increasingly complex geologic structures. It noted that drilling technology had progressed from 71 feet to many miles below the surface— horizontally as well as vertically, adding that technology has coaxed more resource from the tight grip of rocks where just a decade ago that grasp could not be broken.

Petroleum science, it also explained, had evolved from rudimentary geology to elaborate supercomputerbased calculations and 3D views of the subsurface. “It has taken the drilling process from a ‘let’s try over there’ guessing game to the precise targeting of ever smaller pockets of fields that have already produced for half a century, as well as areas that have produced nothing before. “The 21st century natural gas and oil industry

is supercharged by innovation and technology. It has dramatically altered the manner in which oil and gas reserves are identified, developed, and produced. Advancements in technology have also improved environmental protection and conservation of natural resources,” the report explained.

Since the advent of petroleum production, the key to increasing recoverable reserves had been research and development (R&D), while many breakthroughs and thousands of incremental advances in exploration and production have increased oil recovery levels from less than 10 per cent of the initial volume in place to in excess of 70 percent, in some cases.

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COVER STORY oil executives were making use of 3-D seismic, linear program modelling of refineries, and advanced process control for operations. The report averred that the use of such technologies unleashed new hydrocarbon resources and delivered operational efficiencies across the value chain. The analysts said, “Thanks to the latest technological advancements, we are now poised for a second digital age that could further reduce costs, unleash unparalleled productivity, and boost performance significantly—if executives can harness the right technologies to support their business strategy. “Making better use of existing technology can deliver serious returns: up to $1 billion in cost savings or production increases. Executives that make their organizations more digital will be well positioned to pursue new growth opportunities.

A s a re su lt of th i s, la rge independents and multinational petroleum companies had invested in R&D, though their motivation is also primarily economic, but is focused on the near-term reward of increased shareholder value while maintaining long-term sustainability through reserves replacement.

Company, disclosed that over the past several years, the global oil and gas industry has had to navigate very choppy waters; noting that after a prolonged run of high and growing rig counts, mega-capitalexpenditure projects, and plentiful capital to support investment, oil prices slid precipitously in 2014 and 2015.

It further stated that a strong domestic energy policy demands a robust R&D component, noting that it is important for federal and state governments to support natural gas and oil research, and to help train that next generation of scientists, engineers, and geologists. Furthermore, in their report titled: ‘The next frontier for digital technologies in oil and gas,’ oil and gas analysts at McKinsey &

As result, they stated that within a matter of months, oil companies that had invested heavily based on rosy forecasts were slowing or even halting operations. In the report, the analysts however explained that oil and gas companies were pioneers of the first digital age in the 1980s and 1990s, declaring that long before phrases such as big data, advanced analytics, and the Internet of Things became popular,

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“The oil and gas industry is tailor-made for this transformation: operations typically span multiple regions, with heavy capital investments and extended supply chains. The visibility and clarity delivered by digital technologies and advanced analytics can give executives unprecedented, granular views into operations, increase agility, and support better strategic decision making. “Digital enablers, from process digitization to robotics and automation, can also help realize this potential by supporting processes in dynamic ways.”

Presently, it is widely accepted fact within the oil and gas industry that technology has reduced the risk of exploration and cut the time required to drill a well. These advantages alone are critical factors in the decision to adopt technology. Analysts are also of the view that technology had helped in the conservation of natural resources by increasing the percentages of oil and gas recovered from existing reservoirs.

Such fuller resource development, they claim, is in turn an economic motivator because it translates into increased revenue for all involved, that is company owners, royalty owners, and taxing governments. Some technology have also reduced costs through smaller crew requirements and improved safety, while others had created better relations with surface owners, an important improvement, though difficult to quantify.

“

Digital enablers, from process digitization to robotics and automation, can also help realize this potential by supporting processes in dynamic ways.

Orient Energy Review Vol 7 No.03 March 2018 27

COVER STORY Analysts declared that although some new technologies initially require steeper investments, they result in faster, more effective resource recovery and a net economic gain for the company. In the case of shale oil extraction in Texas, new technology first made the extraction of natural gas from that shale possible, which attracted more research dollars to better understand the resource and extract even more natural gas. In the future, the National Petroleum Council disclosed that contracts are likely to include stronger clauses allowing the buyer to procure new technology from a different supplier when the incumbent does not supply a comparable product or service. It further stated that access to new technology is increasingly facilitated by the Internet, which allows a frontline engineer to research, identify, and even procure technologies from any corner of the globe.

The report insisted that this trend would enhance the ability of smaller players to access and service global markets, although the constraints of supply and service infrastructure will remain. Technology adoption practices, the NPC said showed little sign of changing, although much has been made at industry conferences of the need for a new wave of technology to mitigate rising operating costs and open new resources to development.

It said, “Technology is definitely a key factor in the decisions made by major resource-holding nations to grant operating licenses to international operators. As such, large operators are refocusing their research, development, and deployment efforts on technology areas relevant to the competition for new acreage, such as the exploitation of difficult gas resources and the sustainable production of resources heavily contaminated with hydrogen sulphide (H2S) and carbon dioxide (CO2).

to accept increased technology risk to continue to compete. The current shortage of experienced manpower—commonly referred to as the “great crew change”—will have a detrimental effect on technology uptake. “New technologies require experienced champions within the business to defend them against skeptics who magnify downside risks and question the benefits. Young, inexperienced engineers cannot fall back on historical experiences when advocating the use of new technology, and are generally less able to objectively assess its value or the risks associated with its application.”

Coming home, Nigeria’s Minister of State for Petroleum Resources, Mr. Ibe Kachikwu, is of the view that natural crude oil endowment in the country would only provide the needed growth if the right technology is deployed in the processing of the commodity. He stated that the use of technology and innovative solutions is critical in the quest to bring down the cost of production and ensuring that the petroleum industry contribute significantly to the country’s Gross Domestic Products (GDP).

According to Kachikwu, for Nigeria to realize huge economic mileage from oil, the cost of production must be brought reasonably low compared to earnings generated from its sale.

He said, “The reality is that today, if you cannot produce cheap cost oil, if you cannot diversify the processing of your oil; if you cannot look to internalising and externalising investment in the sector; if you cannot capture the requisite technological skills that are essential to help you operate efficiently, you are lost before

you start. “The challenges for oil companies have changed. Oil has got to provide the resources to power this country; jobs for our people; and the operational environment that is transparent enough for others to take Nigeria serious. Oil has got to provide the technical and advanced skills sets that are essential for us to export people out to other African countries, and to become investors in other African countries; something the banking sector has tried to do successfully over the last six to seven years.”

He stated that the production of a Floating Production Storage and Offloading (FPSO) unit in Nigeria would remain unattainable unless there is adequate deployment of technology, while sufficient production of power is sustained over the next couple of years. “My target is that over the next 10 years, Nigeria would produce an FPSO and that is not too much to ask. My target over the next 10 years is that Nigeria would become self-sufficient in its own power provision. And over the same period, Nigeria would gravitate from crude oil, as it where, to very refined, clean provision of fossils. “My target is that over that same period, investment in the sector, in the sense that Nigerian companies, Nigerian entities and Nigerian shareholders, would begin to move from the minuscule 10 per cent today, to between 40 and 50 per cent of local investments,” he added.

He also lamented the impact lack of adequate funding has had on the deployment of technology in the industry, adding however,

“Recently, major operators have become increasingly risk-averse as new projects have become more costly, less economical, and technically more challenging. Smaller, more difficult plays afford less opportunity to learn by trial-and-error and therefore favor the application of proven technical solutions. “There also are correspondingly fewer ‘elephant’ projects capable of underwriting the development of a particular technology. While the trend toward more difficult resources is unlikely to reverse, operators might be forced

28 Orient Energy Review Vol 7 No.03 March 2018

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COVER STORY that the prospect for the sector looks good nonetheless. “What have we achieved since the launch of the 7Big wins two years ago? We have been able to, through a lot of struggle, change the funding capacity for the upstream, and that had sort of energised investors in the upstream sector. Now we are beginning to see projects like Egina, $15 billion; Zabazaba, potential $10 billion; Bonga, potential $10 billion, and the likes. “We can put these at over $40 billion potential investments over the next five years, if we do the right thing, set the right models and set the right policies,” he noted adding that “That is very key and is coming from a country where investments has runaway for nearly seven to 10 years.” Kachikwu also noted that the Federal Government is putting up lots of efforts to ensure that in no distant time, new refineries will be up and running, a development that would mark the beginning of the journey to the stoppage of petroleum products importation in the country.

He said, “We have addressed refineries for the first time. We are creating a model where target investments are going into the dilapidated refineries. Some of those would be announced over the next one month. We are still targeting to be able to get these refineries up and running from about 14 per cent utilisation capacity today, to about 90 to 95 per cent over the next 18 to 20 months. If we do that hopefully, we would begin to move drastically to self sufficiency in the production of refined petroleum products.” On the issue of power supply, Kachikwu said, “I ask everybody to look at the challenges that we face. Africa is probably the continent with the least supply of power. And until power is available, this country, this continent cannot move. “Nigeria, obviously, with its 180 million people and growing at a very rapid rate, is critically in need of power.

That power won’t come unless gas projects are incentivised and make to rapidly,” he noted.

In the area of gas, Kachikwu called for increased investment, noting that though, Nigeria boast of huge gas deposit, the lack of adequate infrastructure has led to the continuous incidence of gas flaring.

His words: “We have a lot of gas but we need the infrastructure. It is like you have raw materials without the infrastructure to harness them.

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“What is stopping us from that?

Africa is the only continent that still imports most of her petroleum products from abroad, whereas we have refineries, we have the crude oil. Africa is still the only continent where there are question marks in terms of whatever activities in the oil sector, whether we are doing the very best that we can. “What is stopping us from improving?

Africa is the still the only area with vast amount of resources, where the owners of these resources, all over the nation and all over African countries, continue to cry for neglect and abandonment. “There are so many challenges, and sometimes you ask yourself, what is holding Africa back? What is it about Africa that prevents it from taking the bold step that is essential for it to move and actually win the liberation that is essential to make it a continent of envy?

“

Let me give you the silver lining, which is that most developed countries have reached the peak of their development. Africa today, with its bushes and wildlife and resources, remains the continent yet untapped, abundant potentials, potential possibilities unlimited. If we do the right things at the right time, with the right energy, with the right opportunities, African would begin to move.”

In thei r ow n cont r i bution , Shell Nigeria Exploration and Production Company (SNEPCo), in a report titled: ‘Overcoming Technology Challenges,’ declared that innovation and technology are vital to providing a wider, more sustainable mix of energy resources for the world’s growing population. The company insists that open innovation can help speed up and deliver more costeffectively developments in areas such as natural gas, biofuels, solar power, water treatment, carbon dioxide (CO2) management and energy efficiency. In the report, Shell said thousands of its scientists, researchers and engineers around the globe are working to develop tomor row’s g rou nd-brea k i n g solutions, collaborating with experts and specialists beyond our industry.

Shell said it had been a technology pioneer for more than a century,

adding that today, it is one of the largest investors in research and development (R&D) among international oil and gas companies, spending more than $1 billion each year to turn ideas into commercially viable technologies. It noted that scientists and researchers at its R&D facilities around the world work across time zones to develop groundbreaking innovations, ranging from fuels and lubricants that help customers use less energy to the world’s largest floating production facility to unlock and liquefy natural gas at sea, Prelude FLNG. The company said it works with governments, world-class academics and industry specialists, and share ideas and expertise with partners inside and beyond the energy sector to drive innovation forward. It added that it is also developing innovative ways to make its operations more efficient and help manage water consumption and carbon dioxide (CO2) emissions. It said, “The era of easy-to-find oil and gas is coming to an end. We are developing new technologies to detect reservoirs that were once invisible, for example at depths of more than 3,000 metres, or hidden under thick layers of salt deep below the seabed. “Once we decide to invest in an oil field our task is to drill the wells and produce the energy as safely and efficiently as possible, with minimum impact on the environment. To achieve these goals we continually develop new technologies and refine our safety processes, applying the same global standards to all our well designs and operating procedures. “Our innovations include technology to allow more oil and gas to flow from deeper wells, letting us tap otherwise uneconomical resources; smaller, leaner drillships that drill faster and use less fuel than comparable vessels; smart oil and gas fields equipped with sensors to monitor production in real-time; and mobile drilling rigs that drill faster and more efficiently on land than conventional rigs.” Continuing, the company said, “To find these resources we collect and process vast amounts of data from sensors to produce an accurate geological map of the site we are investigating.

We then turn the data into images that can be analysed and interpreted quickly and efficiently. This ability to visualise and interpret lies behind our biggest successes in oil and gas exploration.

Orient Energy Review Vol 7 No.03 March 2018 29

COVER STORY “When an oil field comes on stream, it has enough pressure inside to push the oil up through the wells naturally.

But over time the pressure in the field drops and the flow of oil slows. We have developed enhanced oil recovery (EOR) techniques to help us extract an additional 5-30% of the oil in place, increasing the overall recovery level from the field to 50-70% or even higher.”

Adding his voice to the discourse, Managing Director, Kabelmetal Nigeria Plc, Robert Kretschmer, stated that for an Original equipment/ components manufacturer, the requirements to supply to Oil & Gas compared to other industries are more stringent. The manufacturer has to prove that the entire process is controlled, starting from qualified raw material suppliers, goods inward tests, a controlled production process up to the product testing - often witnessed by the customer.

A controlled production process means that all operations are planned and continuously supervised. For us as a cable maker, integrated inline measurement systems in our production lines are giving the feedback that the required product parameters are sustained. If required, these data can be logged e.g. during the extrusion process through a process with graph report over the full cable length.”

30 Orient Energy Review Vol 7 No.03 March 2018

He said “Technology in the cable manufacturing process is not the only way to meet the requirements of the O&G industry. Product design comprises the selection of tailor made compounds / components in combination with the right cable construction. Both decide if a cable can fulfil the specification.

It goes far beyond the electrical properties of a cable. The resistance of a cable to mechanical stress, chemicals, heat a nd non -h a z a r dou s properties in the case of a fire matters for these applications. “Being a Nexans aff i l iated company is giving us access to comprehensive know-how and testing c apac it ie s of f u l ly fledged laboratories with e.g mass spectrometer, smoke den sit y a nd corrosivity tests and fac i l it ie s for c a ble class approvals or type tests. Nexans is having four Research Centres which are recognized by independent international certification bodies. This is giving us the leading edge in proposing the best & proven solutions to our clients. Principal Consultant of Lonadek Inc. Dr Ibilola Amao sees technology as an enabler in the oil and gas sector, she believes that when appropriately deployed, technology can greatly increase productivity; in her words, “Precision is more reliably achieved in Engineering whenever IT is implemented intelligently.

Technology appropriately deployed increases productivity & efficiency.”

She said.

‘Technology has become the fuel that propels all machinery in the oil and gas industry and also across various industries, says Dr Njideka Kelley, Principal at New Generation Consulting Resource Solutions and Consultant with Kaztec Engineering Ltd. “Technology means that I can close deals in Angola in my pyjamas from my office in Houston without physically flying there until all the participants are ready to “meet and greet”; she said.

An oil and gas service provider who pleaded anonymity also gave his opinion on the impact of technology on his business saying, “Improved technology has increased the efficiency of our modern equipment also creating improved communication on location sites, making feedback more real time and solution provision more timely as well”, he said. However, emphasising the role of technology and the future of the petroleum industry, Secretary General of the Organization of Petroleum Exporting Countries (OPEC), Mr. Mohammed Barkindo, stated Oil is expected to remain the fuel with the largest share in the energy mix between 2016 and 2040, declaring that oil and gas together are still expected to provide more than half of the world’s energy needs within these periods, with their combined share relatively stable between 52–53 per cent.

He argued that primary global energy demand is expected to increase by 35 per cent in the reported period, while long-term oil demand is expected to increase by 15 million barrels per day (mb/d), rising from 94.5 mb/d in 2016 to 111.1 mb/d in 2040.

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COVER STORY

He said majority of this rising demand will come from developing countries, increasing by almost 24 mb/d, to reach 67 mb/d by 2040.

Significantly, this means there is no expectation for a peak in oil demand over the forecast period to 2040. World consumption is on course to exceed 100mb/d, much earlier than projected.

According to Barkindo, to meet the projected increase in global oil demand, investments worth an estimated $10.5 trillion would be required, underscoring the absolute necessity of a sustainable and stable oil market, conducive to encouraging the type of longcycle investments necessary to prevent supply gaps in the future. He noted that oil is an essential building block for economic growth, especially in developing countr ies, explaining that throughout its history, our resource has stimu lated development, prosperity and social mobility..

To this end, Barkindo said, “The world will continue to need all energy sources,

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especially for the 1.1 billion people in developing countries that have no access to electricity and the 2.3 billion deprived of commercial energy.

T he r efor e , r at he r t h a n discriminate against any energy source, it is vital that we collectively develop and adopt technologies, as well as allinclusive energy policies, that transform the environmental credentials of all energies, including the 1.5 trillion barrels of proven reserves which currently exist.” To this end, it has become obvious that for a country or an organisation to develop technology capability, such a country or organisation needs to firstly search for new knowledge, assimilate the knowledge, transform and apply the knowledge to solve local problems.

associated with implementing a relatively unproven solution against the expected upside if its application delivers as promised. Such risks and rewards are highly uncertain and difficult to quantify.

Technology is constantly evolving, it is hoped that the Nigerian, as well as African petroleum industry would evolve along with it, so as not to be left behind and not to become irrelevant in the scheme of things.

“

Nigeria, obviously, with its 180 million people and growing at a very rapid rate, is critically in need of power.

That power won’t come unless gas projects are incentivised and make to rapidly,” he noted.

The significance of technology i n nationa l econom ic development and in the creation of a competitive edge for companies can never be over emphasised. However, adopters of new technology must balance the technical and financial risk

Orient Energy Review Vol 7 No.03 March 2018 31

LOGISTICS/ MARITIME

44 African Countries Sign Free Trade Agreement without Nigeria, South Africa

By Oge Obi

T

he Africa Continental Free Trade A rea (A f CF TA) agreement was on Wednesday signed in Kigali, Rwanda by leaders from 44 African countries to form a $2.5 trillion continental free-trade zone while Nigeria and South Africa, the continent’s largest economies, were absent. The agreement was signed during the African Union Summit in Kigali, Rwanda. The free-trade zone had been described as the largest in the world since the creation of the World Trade Organisation in 1995. Deliberations

on the free-trade zone agreement which started in 2015 had projected to capture 55 countries however had only 44 countries signed up for the agreement. President Muhammadu Buhari had scheduled to attend the summit and sign the agreement after the Federal Executive Council gave its approval at its March 14 meeting, the trip was however cancelled on March 18 without any reason.

However, the South African

President, Cyril Ramaphosa, said that his country will join the agreement when the necessary legal processes are concluded.

“

President Ramaphosa has undertaken that South Africa will become a signatory to the agreement once the legal and other instruments associated with (the trade bloc) are processed and ratified

by South African stakeholders and parliament,” he said.

Elimination of Sub-Standard Shipping: Pay Attention to Ship and Crew Proficiency - Amaechi

By Oge Obi

T

he Transportation Minister, Mr. Rotimi Amaechi has called on the member states to the Abuja Memorandum of Understanding on Port State Control (Abuja MoU) to also pay attention to ship and crew proficiency in its drive to eliminate sub-standard shipping on African waters. The Minister said this while speaking at the 3rd Ministerial Conference of the Abuja Memorandum of Understanding on Port State Control (Abuja MoU) which held in Accra, Ghana, recently.

He expressed delight that the port state control regional agreement has continued to expand its frontiers, adding that its expansion into new areas is making it impossible for unscrupulous ship owners to identify convenient ports to trade and evade Port State Inspection and possible detention.

32 Orient Energy Review Vol 7 No.03 March 2018

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LOGISTICS/ MARITIME Calling for the adoption of stricter measures in realising the regional agreement, Amechi advised that while focusing on eliminating substandard shipping, greater attention should be paid to the ship and crew proficiency.

“

This is particularly important because an incompetent crew can turn the most modern vessel into a potential hazard culminating into loss of lives, property and pollution of the marine environment.”

He called on member nations to identify and engage all relevant stakeholders to further boost the effectiveness of the Port State Control Inspection regime and foster cooperation in the drive to eliminate substandard shipping. “I therefore call for a more all-inclusive stakeholder interactive session in our different jurisdictions to enable us work together in addressing areas of common concern and further bring to fore the safety administrations’ zero tolerance for non-compliance with maritime safety standards,”

Amechi said. In his speech, the Transportation Minister of Ghana, Kwaku Ofori Asiamah noted that some ship owners in their quest to make profit, often resort to cutting corners and undermining best practices. He disclosed that some unscrupulous ship owners neglect the maintenance and repair of of their vessels. Adding that they also prolong the work life of vessels beyond the age at which they would usually be sold off as scrap. He also disclosed that their ships are often manned with poorly trained or inadequately equipped personnel who are to navigate the vessels and transport cargo. According him, these practices encourage the increase in the number of substandard ships in existence on the waters today.

2016, the report from the Abuja MoU indicated that only four percent of vessels were inspected by port state control officers. This development is not encouraging and calls for immediate attention,” he said.

Spea k i n g f u r ther, A sia ma h explained that member states are required to target at least 15 percent of foreign ships calling at the ports for port state control inspections.

“However, reliable statistics over the years indicate that as a sub region, we are far from meeting the 15 percent target. For example, in

tighten the net through effective coordination and harmonization of port state control procedures to improve maritime safety and eliminate the menace posed by the operation of substandard ships in the sub region.”

Speaking further, Asiamah called on the member nations to enquire why targets are not being met and if it is due to inadequate equipment and qualified personnel, he advised parties to the Abuja MoU to consider establishing an audit assessment mechanism among member nations to ensure that port state control officers perform their normal duties diligently even as maritime administrations implement the right measures. He urged member nations to, in the spirit of the theme of the conference,

“

MAN Cautions Nigeria over African Free Trade Agreement

By Oge Obi

T

he Manufacturers Association of Nigeria (MAN) has called on Nigerian government to circumspectly handle the signing of a free trade agreement with other African countries. Calling on the Federal Government to carefully consider the trade agreement, the President of MAN, Frank Jacob, urged the FG to renegotiate trade conditions that will impede economic growth in its review of the Africa Continental Free Trade Area (AfCFTA) agreement. He said that MAN is worried that the Rules of Origin (ROO) in the AfCFTA cannot adequately guard against the influx of European Union (EU) goods into the Nigerian market.

According to him, “We are afraid that the rules of origin cannot be adequately enforced because goods from the EU can find their way into one of the African countries that have bilateral agreement with

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the EU.

“

When the goods get into the African country, they can repackage them, change the label from made in Europe to that of the African country. That same goods will surely find its way to Nigeria which is the main target market for the EU.” The MAN President noted said that the market access of the agreement was a concern to manufacturers as it leaves low protection to locally produced goods. “The agreement says that 90% of the tariff plan would be liberalised, leaving only 10 percent to protect manufacturers, and that 10 percent is too low,” he said. “That means the rest of the 90% is open, duty free, people can import. What we are saying is that the 10% is too small, even at the

current Common External Tariff (CET) regime, we enjoy more than 10 percent,” he said.

President Muhammadu Buhari recently cancelled his trip to Kigali, Rwanda, to sign the framework agreement for establishing the African Continental Free Trade Area (AfCFTA).

According to a statement from the Presidency, the trip was cancelled to allow for more consultations with stakeholders in Nigeria over the trade agreement. The MAN is not alone in the call for caution over the trade agreement, Nigerian Labour Congress (NLC) and the Organised Private Sector (OPS) have also kicked against AfCFTA.

Orient Energy Review Vol 7 No.03 March 2018 33

LOGISTICS/ MARITIME

President Buhari Directs Truck Owners to Establish Private Parking Lots

By Oge Obi

P

resident Muhammadu Buhari has warned truck drivers to desist from parking on Federal highways. Adding that they should establish private parking lots to avoid congestion and ease vehicular mobility across the country. The President gave the warning at a public enlightenment forum organized by the Federal Ministry of Power, Works and Housing (FMPWH).

According to the FMPWH, the en l ighten ment prog ram me was to sensitise the public and other stakeholders on recent developments in the road sector such as weighbridges, road signage and the return of the toll gates among others. The President said the warning become necessary to ensure that huge investment in the road sector, especially capital projects raised from 15 percent to 30 percent achieve desired impacts. Acknowledging the importance of good roads in achieving economic recovery and growth, the President said. “The eradication of overloading on our highways will promote competitiveness in business and reduce high maintenance cost of heavy-duty vehicles. “I implore

34 Orient Energy Review Vol 7 No.03 March 2018

all vehicle fleet operators and tanker drivers to stop parking their vehicles on the federal highways, as these often cause roads to be congested.

“

The highways should be free at all times for safe and comfortable movement of vehicles. Fleet owners should endeavour to create private parking lots for their fleets at designated locations.”

The President, who was represented by the Secretary to the Government of the Federation (SGF), Boss Mustapha, said the Federal Government is increasing investments and resuscitating the rail sector to reduce stress on the federal road networks. He urged the stakeholders to contribute meaningfully to enhance implementation of the existing policies.

Speaking further, the President noted that the new regulations was to increase the lifespan of the federal road networks. Adding that the new regulation is also applicable within the Economic Community of West African States (ECOWAS) sub-region. Speaking earlier, the Min ister, FMPWH,

Babatunde Fashola highlighted the importance of road projects to improving socio-economic development of the people and optimizing inherent opportunities. He cited instance of the Trans-Sahara highway project connecting Nigeria to Chad, Niger Republic, Tunisia, Mali and Algeria; the Lagos-Abidjan highway which runs through the Benin Republic, Togo and Ghana and the road project connecting the country to Cameroun, from Enugu through Abakaliki, Ogoja, Ikot and Ifun. He said the existing treaty obligations on permitted weights and axle load of heavy duty goods is such that should be obeyed. According to him, the treaty within the West African sub-region regulates, “the amount of loads any goods vehicle can put on an axle and by extension, the amount of loads that is put on road pavement within ECOWAS region and beyond.”

“Our compliance with this regulation will open a massive door of opportunity and prosperity of cross-border trade to Nigerians who are engaged in road transport business.

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POLICY

National Assembly Passes Harmonized PIGB

PIGB: Oil Marketers, Private Sector Reject Single Regulator Proposal

T

he oil marketing and trading companies, as well as the Organised Private Sector (OPS) has rejected the single regulator for both the upstream and downstream sectors of the Nigeria’s oil and gas industry as provided in the Petroleum Industry Governance Bill (PIGB) passed by the National Assembly.

This was disclosed at a joint press conference organised by the OPS and the marketers under the aegis of Major Oil Marketers Association of Nigeria (MOMAN) and the Depots and Petroleum Products Marketers Association of Nigeria (DAPPMAN) on Sunday in Lagos. The group had called on President Muhammadu Buhari to ensure that the PIGB provides for two regulators before signing the bill into law. Executive Secretary of MOMAN, Mr. Femi Olawore, noted that the bill harmonized by the Senate and the House of Representatives provides for only one regulatory, did not consider the position of the marketers, who recommended for two regulators during the public hearing conducted by the National Assembly.

“Our position is that one regulator is inadequate for the entire industry.

Historically, from the beginning, we had one regulator but we found out that the regulator was not able to police the industry very well. That was why PPPRA came up to deal with pricing. The upstream deserves one regulator because the activities are very massive. The downstream deserves one regulator because the activities in the downstream are quite different from the activities in the upstream. Each of them requires different specialists as the regulator.

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The two have little or nothing in common. One regulator for both will lead to excessive bureaucracy. Having one regulator will be detrimental to the industry and the Nigerian economy,” he explained. Speaking further, Olawore said that the board of the two regulators should be autonomous and should not be subject to President’s removal except with the support of two-third of the members of the National Assembly. Stating that the private sector is excluded from the PIGB board, Olawore said the board members of the single regulator are mostly civil servants, representing different ministries and government agencies. In his remarks, the Chairman of the Economic Policy Group of the Manufacturers Association of Nigeria (MAN), Mr. Reginald Odiah, who represented the Organised Private Sector, said the exclusion of the critical stakeholders in the board of the single regulator is detrimental to OPS. Stating that the OPS is a critical stakeholder in the oil and gas industry hinted that their machines and equipment use petrol, diesel, gas and other petroleum products.

“

As OPS, we are interested in having two regulators for the oil and gas industry. The board of PPPRA has critical stakeholders as members and this gives OPS voice and capacity to make contribution,” Odiah added.

T

he National Assembly on Wed ne sday pas sed the h a r mon i z e d Pet r oleu m Industry Governance Bill (PIGB).

The bill was passed by the Senate after Donald Alasodura, the lawmaker representing Ondo Central Senatorial District, presented a conference committee report on the bill.

The House shortly after passed the harmonised version. The two chambers of the National Assembly set up the conference committee after the Green Chamber passed a slightly different version of the bill on January 17.

In July 2017, the senate passed its version. The harmonised bill is expected to be sent to President Muhammadu Buhari on Friday for his assent. If the bill signed into law, the Nigerian National Petroleum Corporation (NNPC) will be unbundled and will start running like proper business units.

Also speaking, the Executive Secretary of DAPPMAN, Mr. Olufemi Adewole disclosed that the marketers had recommended for two regulators at the public hearing conducted by the National Assembly, but the lawmakers ignored their recommendation.

Orient Energy Review Vol 7 No.03 March 2018 35

WOMEN IN ENERGY

GE Africa: Empowering Women-Owned Enterprises to Solve Local Energy Challenges to install six green power units in Kalangala district, a remote island in Lake Victoria. Fishing is the main industry there, but farmers struggle to access commercial ice to preserve fish because it’s both expensive and limited. This contributes to the significant amount of fish that is lost before it can be sold in the market.

L

ack of access to electricity continues to plague many African countries, including Uganda, where up to 80% of the population lives without power.

Given the increasing demand, it will take more than the Ugandan government to power up the East African country. Organisations like the United States Development Foundation (USADF), in partnership with Power Africa and GE Africa are doing their bit to help bring electricity to the people of Uganda.

One way is through the Women in Energy Challenge that invests in organisations either led by women or benefitting women. It also supports technologies advanced by African women innovators and leaders who generally have lower access to finance than their male counterparts.

This year’s winners – Joint Energy and Environments Projects (JEEP) and Conservation and Development Uganda Limited (CODE) – each received US $100,000 to expand their renewable energy enterprises to reach women beneficiaries. “The Women in Energy Challenge is one of our commitments towards supporting local entrepreneurs and we are delighted that African women-owned enterprises are solving local challenges.” – Jay Ireland, President & CEO of GE Africa According to USADF, less than 25% of the global renewable energy workforce is made up of women, a rate which is even lower in Africa. USADF and GE Africa are targeting the next generation of

36 Orient Energy Review Vol 7 No.03 March 2018

women entrepreneurs and providing financing and technical assistance for off grid lighting solutions. While women have lower access to credit in many African countries, they also bear the brunt of energy poverty.

The Women in Energy Challenge addresses the important need to finance women entrepreneurs in Africa. JEEP Chairwoman Dr Maria Bawabya Senkezi says investing in women entrepreneurs is critical because “women invest money back into the community.”

JEEP is a 100% women-owned organisation founded in 1983 after deforestation and soil erosion were identified as major threats to the health and welfare of Ugandans.

The non-governmental organisation proudly works “for a green Uganda with an environmentally safe and clean habitat for the present and future generations.”

Located in what is known as the ‘Pearl of Africa’, where biomass accounts for over 90% of the entire energy used, their mission is to combat environmental destr uction and conserve natural resou rces. The Women in Energy Challenge victory couldn’t have come at a better time for the enterprise, which plans to use the prize money

The green power units will each have solar-powered cold storage facilities for preservation, phone charging and solar home systems, and will be run by a women’s group trained in bookkeeping. The NGO plans to replicate the model throughout the region to empower more women whilst creating much needed job opportunities. Some of JEEP’s work includes training and awareness seminars, focusing on environmental conservation and energy-saving technologies. The company mainly reaches out to rural farmers, helping them with new technologies so they can continue providing adequate nutrition for families, while gaining access to larger markets. Though female entrepreneurs in Africa continue to tussle with unique challenges, women-led organisations like JEEP thrive in the face of difficulty. They have managed to bring tangible change to communities, proving that empowering women and girls has far-reaching impact. www.africa.com

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WOMEN IN ENERGY

Trade and Investment Are Vital Drivers of Economic Growth, Patricia Kenneth-Divine

By Oge Obi

P

atricia Kenneth-Divine is the Principal Consultant, Synergy System Consults (UK) Limited. She is an expert in energy and sustainability, international trade advisory, business development and management. Kenneth-Divine is a woman of uncommon quality, experience and exposure in various fields where her expertise is sought after both home and abroad. She is known to provide and recommend innovative and strategic solutions to improve the quality of business’s especially promoting trade and investment opportunities in Africa/SubSahara Africa.

Speaking at the London School of Economics (LSE) Alternative Career Society conference in London, Kenneth-Divine said that all activities and services should aim at stimulating economic growth, Oge Obi reports. LSE Alternative Careers Society recently organised a career talk for its members. Enthusiastically seated at the venue of the event in room 4.10 of the fourth floor, Old Building at LSE (WC2A 2AD) were students and professional who were keen on to learn the right they will require in their career development plans, especially in international trade advisory. And one of the finest professionals considered worthy to share some insights with this assembly of people desirous of acquiring a broader knowledge in building successful careers was Patricia Kenneth-Divine. Giving a brief outline of her career progression, the Principal Consultant, Synergy System Consults (UK) Limited said that within a period of 18 years, she had moved from being a specialist in the agricultural sector to the Energy, Renewable sectors and Business management applications. Adding that her quest for knowledge, commitment to developing new skills and competencies has empowered her to function in the capacity of a truly equipped and experienced human resource expert suitable for global demand for quality manpower which has left her with a multi-dimensional career track.

According to Kenneth-Divine, “I have over 11 years experience with the Foreign and Common Wealth office now Department of International Trade and private consulting. I have gathered excellent expertise on international trade advisory and business development. I have worked with over 800 SMEs, mid–sized and global corporate UK and overseas businesses, fund aided projects, government departments and many more. As an Energy Expert she has proven ability for developing and leading new strategic businesses, advisory, leading on implementation of huge projects, turning around global opportunities, and increasing export performance for both international and local companies.” she said.

Sharing her success story as a consultant/trade

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investment advisor and what the job entai ls, KennethDivine disclosed that the portfolio leaves her with the responsibility of providing guidance, direction and excellent advice to both new and experienced companies as well as the information they require to make informed business decisions. This she said is in addition to providing the market support in any industry, specialised market or country, export or import, inward or outward trading.

Providing further details into the role of a trade investment adviser, the Principal Consultant said that roles also involve “providing key support and excellent business advisory, tracking business interaction, one on one meeting/business reviews, providing strategic business methodologies, transforming global opportunities to achieve and implement performance frameworks, align strategies/research support, secure efficient deliveries and significant achievements for business, develop dynamic market approach, planning & project management, high profile networking, organise and lead trade missions.

Providing insight into some of the skills needed for consultancy, especially in international business investment, Kenneth-Divine said that one should possess such skills as business development and operations; strategic planning; development & intelligence; impact assessment and research evaluation; risk management; excellent communication and relationship management, among others.

On key competencies, she said that achieving commercial outcomes is very necessary. It is about having a commercial, financial and sustainable mind-set to ensure all activities and services are delivered with added value and working to stimulate economic growth. She further said that aspirants should also possess the ability to manage and ensure quality service delivery, collaborate and partner with relevant persons and entities, and must be open to change and improvement. “People who are effective in this area are responsive, innovative and seek out opportunities to create effective change. Seeing the big picture - having an in-depth understanding and knowledge of your role and how it fits and supports businesses.

Stressing that international trade and investment are vital drivers of economic growth, Kenneth-Divine said that requires dynamic and experienced individuals who can live up to the ever-changing trends of events around the world “With the size and shape of the world economy changing dramatically in recent years, traditional patterns of trading and investing have had to rapidly evolve alongside it. Ensuring regulatory framework keeps up, different market policies and legal laws and willingness of companies to take risk in new markets.”

Participants wanted to know where Africa sits with Brexit and in her reply she said Africa is the new face of business. The opportunities are robust and this is the time for foreign companies to maximise the opportunities open for trade and Investment. Africa must maintain a focus on increasing productivity.

This will require a continued focus on human capital development, Investment policies and incentives. It is also relevant to improve the business environment especially in key areas especially access to finance and regulatory reforms that will support innovation, implement policies that will encourage export diversification, improve infrastructure, reductions in nontariff barriers etc. are important for expanding opportunities for trade. In her advice to those aspiring to a career as an international trade consultant, Kenneth-Divine urged the participants to, “Gain practical experience and learn new skills. You must have a clear picture of what it takes to be an international trade consultant, prepare, be strategic; you must be a people’s person. Develop your career skills in an area of interest and match your vision with opportunities, explore career paths, be part of your community and meet new people,” she council led

Orient Energy Review Vol 7 No.03 March 2018 37

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EXPLORATION & DRILLING

Amni Int’l Receives $270m Oil-Backed Loan from Shell, GTBank

By Anthony Okafor

The Federal Government is also turning to private companies in an effort to finance everything from refinery upgrades to oil pipeline reconstruction. When contacted, a spokesperson for Shell Western Supply and Trading Limited stated: “Shell Western Supply and Trading Limited can confirm it has signed a loan agreement with Amni International as part of a package that includes longterm crude oil off-take contracts.

We cannot share further details about the deal for reasons of confidentiality.”

S

h e l l We s t e r n S u p p l y and Trading Limited, a subsidiary of Royal Dutch Shell and Guaranty Trust Bank have granted an oil-backed loan of $270 million to Amni International Petroleum Development Company Limited. Amni International Pe t r o l e u m D e ve l opm e nt Company Limited operates as an independent indigenous oil and gas exploration and production company in Nigeria. It owns platforms, pipelines, and offshore terminal infrastructure in Nigeria and an offshore concession in Ghana. The company was founded in 1993 and is based in Lagos, Nigeria.

However, the terms of the loan to Amni will give Shell Western Supply and Trading sole access to the 16,000 barrels per day (bpd) of oil the company pumps in two fields off Delta region.

The company’s production at offshore fields, including Amni’s Ima and Okoro/Setu, is difficult to maintain. But, Amni said the loan would allow them to further develop the fields. The company’s Chairman, Chief Executive Officer and Managing Director, Tunde Afolabi, stated that, “We are excited to work with GT Bank and Shell as commercial and financial partners to enable the realisation of Amni’s ambitious plans for growth.”

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The Group Head, Communication and External Affairs, GTbank, Oy inade Adeg ite, told ou r c or r e sp ondent t h at , “ T he release did not come from us. So, unfortunately, we do not have a statement available to send to you. We do not usually issue press statements for facilities and loans. We will try and see if we can get a statement.” Recall that, Oil trading firm, Vitol Group had earlier in January, 2018, reached a similar agreement deal of $530m with a Nigerian oil and gas producer, Shoreline Group, to finance an oilfield in exchange for access to some of the oil it produces. The agreement with Shoreline, provides the company with cash to refinance existing debt and further develop the Oil Mining Lease 30 in the Niger Delta. The field currently produces 50,000 barrel per day and has an estimated one billion barrels of oil reserves. Shoreline has a 45 per cent interest in the field.

he said.

The financing was arranged with support from Vitol, as well as Ecobank Transnational Incorporated, Fidelity Bank Plc, Union Bank of Nigeria Plc, FCMB Group Plc and Farallon Capital Management LLC. Bigger oil companies and trading houses often extend financing to smaller oil and gas producers in deals that allow the financier preferential access to physical cargoes and give the recipient companies the cash they can use to develop and maintain their assets.

The Chairman, Shoreline Group, Mr. Kola Karim, stated that the “transformational” deal would enable the company to step up gross production to as much as 100,000bpd over the next year. “The funds will be used to refinance existing debt and provide us with working capital to expand production. As part of the funding arrangements, Shoreline will work with Vitol to market the crude, and in the development of its export logistics capabilities,”

Orient Energy Review Vol 7 No.03 March 2018 39

EXPLORATION & DRILLING Shell Files Criminal Complaint against Ex-Employee over Nigeria Oilfield Sale

Erin Energy Suspends Hydrocarbon Exploration Activities In Kenya

R

oyal Dutch Shell has filed a cr i m i na l compla i nt against a former employee over suspected bribes in the sale of a Nigerian onshore oilfield in 2011, shedding more light on the company’s activities in the oil-rich West African country.

The suspected wrongdoing is unrelated to a court case against the Anglo-Dutch company and Eni in Italy over the acquisition of a different Nigerian oilfield, known as OPL 245, a Shell spokesman said on Wednesday. ‘Based on what we know now from an internal investigation, we suspect a crime may have been committed by our former employee ... against Shell in relation to the sale process for Oil Mining Lease (OML) 42 in Nigeria,’ the spokesman said. ‘We have filed a criminal complaint with the Dutch authorities and are considering other steps we could take.’

Shell sold its stake in OML 42, an aging onshore field in the Niger Delta, to Nigerian firm Neconde Energy in February 2011. Neconde Energy was not immediately available to comment. As part of the internal investigation carried out in recent months, Shell discovered that kickbacks may have been paid to a Seychelles-listed company owned by the former employee in the sale of OML 42, a source familiar with the probe said.

T

he US hydrocarbon exploration company, Erin Energy Corporation, has announced that it is suspending its research activities in four exploration blocks in the Lamu Basin off Kenya. A decision made by the company, due to financial constraints.

Indeed, the company has recorded a drastic drop in cash flow since the beginning of the fall in oil prices. This situation, says Jean-Michel Malek, the acting CEO of the company, “causes a capital shortage that raises significant doubts about the ability of the company to continue exploration . “ The other parameter that comes into play in the company’s difficulties in financing its exploration campaigns is the

decline in its oil production volumes following the closure in Nigeria of the Oyo-8 well in September 2015. to May 2016, and the current closing of Oyo-7.

In add ition, exploration expenditures were $ 4.6 million in 2017, compared to $ 39.3 million in 2016 and $ 16.4 million in 2015. Several wells drilled during this period were dry. .

In Kenya, exploration costs were $ 0.8 million in 2017, down from those of 2016 of about $ 2 million and 2015 of $ 7 million. , $ 7 million. He acquired exploration rights on the L1 and L16 onshore blocks and the offshore blocks L27 and L28 in May 2012.

The offshore company was linked to two Swiss bank accounts under the employee’s name, the source added.

Shell is the largest international oil producer in Nigeria.

Source: Reuters 40 Orient Energy Review Vol 7 No.03 March 2018

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EXPLORATION & DRILLING

Sirius Petroleum Announces Delivery of Compact Well Head Systems for Ororo-4 And Ororo-5 Wells

A

I M- l i s t e d S i r i u s Pe t r o l e u m , t h e Nigeria focused oil and gas development and production company, has provided a further update on the Company’s Ororo field operations, confirming that two further well head systems are on route to Nigeria where they are planned for deployment on wells Ororo-4 and Ororo-5.

in a location close to the Ororo-1 well which was originally successfully drilled by Chevron in 1986.

All well head equipment and services for the Ororo Field are being supplied through Cameron, a Schlumberger Group Company. The Cameron SOLIDrill modular compact

wellhead systems increase casing and tubing hanger landing reliability and help prevent debris from entering the wellhead. The hangers and packoffs are designed with angled shoulders to repel debris, such as dirt, metal shavings, and cement plugs.

Sirius announced on 21 December 2017 the delivery of its first two sets of Cameron SOLIDrill modular compact well head systems in Nigeria for the Company to commence the drilling programme at: Ororo-2 and Ororo-3. Sirius plans to commence the drilling of its first well on the Ororo Field, the Ororo-2 in April 2018 which will be

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Orient Energy Review Vol 7 No.03 March 2018 41

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Orient Energy Review Vol 7 No.03 March 2018 43

With Chevron’s approach to Nigerian Content,

Everyone Benefits...

At Chevron Nigeria Limited, ours has been an unwavering commitment to Nigerian Content Development.

Ever before the enactment of the NOGICD Act, we have been giving preference to Local Community Contractors, empowering local competencies through training and facilitating partnerships between Nigerian businesses and foreign experts to build capacity. We have also sustained these businesses through work scope reservation. Today, we are happy to see several benetting Nigerian businesses and thousands of technical professionals thriving in the Oil and Gas industry. Proof that with CNL, when it comes to Nigeria Content, everyone benets.

44 Orient Energy Review Vol 7 No.03 March 2018

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