Orient Energy Review, May 2017

Nigeria’s Deepwaters: Blue Ocean for Investors, Pathway to Industrialization

LOCAL CONTENT CHAMPIONS

‘We must take advantage of existing opportunities in the Nigerian Oil and Gas Industry’ - Kachikwu

OILSERV

- Reliability Delivered

Oilserv Limited, an Oil & Gas EPCIC (Pipelines & Facilities) Company, commenced business in 1995 with the mission to provide Engineering, procurement, Construction, Installation, Commissioning, Fabrication, Upgrade, Repair, Maintenance and Project Management services to Multinational, Local Oil & Gas and Power industries in Nigeria.

These services are provided on Land, Swamp and Offshore locations.

Quality is the key driver of our customer satisfaction, value delivery, regulatory compliance (Nigerian Content Law, OHSAS 18001 and ISO 14001) and sustainablilty strategies.

Oilserv Limited is ISO 9001:2008 certified Our detail design and Front End Engineering (FEED) support is provided by our Subsidiary Company, Frazimex Engineering Limited.

KEY ON-GOING PROJECTS: EPC of Obiafu/Obrikom to Oben (OB3) Gas Pipeline system LOT B 67m x 48-inch for Nigerian National Petroleum Corporation (NNPC) Contract for onshore Emergency Pipeline Repair Services (EPRS) for Total E&P Nigeria Limited and NLNG EPRS Contract For Flowline Replacement And Mechanical Repair Services (28km X 4inch) for Eroton Exploration & Production Company Limited

Oilserv Limited has the capability to Weld & Lay Oil & Gas Pipelines/Flowlines ranging from 2-inch to 56-inch Diameter. All our river crossings are being carried out using Horizontal Directional Drilling Technology (HDD).

Also crossing of major access roads, including railway crossings are undertaken using Thrust Boring Mechanism. We have been meeting our ultimate goal in delivering of services to our clients on schedule without compromising the HEALTH, SAFETY and SECURITY of our personnel and the communities that are within our areas of operation, as well as the Environment.

Oilserv Group of Companies:

Corporate Office Address: 7 Bori Road, Rumuibekwe Estate, P. O. Box 10242, Port Harcourt, Rivers State, Nigeria.

TEL: +234 706 966 1694, +234 810 810 3065 E-mail: oilserv@oilservltd-ng.com

www.oilservltd-ng.com

EDITOR’S NOTE

Nigeria’s deepwater has remained largely unexplored, with only a handful of companies currently making giant strides in the sector. This is irrespective of the fact that it holds great opportunities for production and reserves accretion; as well as revenue increase.

We seek to showcase the massive potentials buried under secto Find details on page 32. this sector.

Also in this Special OTC Edition, we continue to celebrate our Local Content Champions, companies that have thrived against all odds, pushing against the tides to write their names in gold. Turn to pages 39 – 49.

The maiden segment of “Women in Energy”, aimed at celebrating women striving to make their mark in this male-dominated industry is featured also. Check it out on page 37.

You’ll find other interesting stories inside, from Exploration, through Production, to Maritime; go ahead and enjoy the read.

Looking forward to your feedback.

PUBLISHER/EDITOR-IN-CHIEF: Nneka Ezeemo

Cheers!

EDITOR: Margaret Nongo-Okojokwu

Margaret Nongo Okojokwu Editor, Mobile +234 8170334471 m.okojokwu@orientenergyreview.com

PRODUCTION: Chiamaka Umeh CORRESPONDENTS: Shola Akingboye (Abuja Bureau Chief) Dirisu Yakubu (Associate Editor) Vivian Osuji Isreal (Head,South South Bureau,Port Harcourt) Jerome Onoja (Lagos) Gilbert Boyefio (Ghana Correspondent) Godspower Ike (Port Harcourt) Margaret Ahiakwo (Houston Texas, USA)

CONTENTS 5

INDUSTRY NEWS

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NEITI Begins 2015, 2016 Audit Of Nigeria’s Oil and Gas Sector

D GM Business Development Jerome Onoja Business Development Executive: Arit Asuquo Dan Ruth Muo (South Africa) CREATIVE: DEE GRAPHICS CIRCULATION MANAGER : Ajayi Kayode

NigeriStakeholders Call for Quick Regulatory

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COVER STORY

Nigeria’s Deepwaters

LONDON OFFICE: Charity Place, Unit 1 Thurrock Pack Way Thurrock Parck Ind. Estate Tilbury,Essex Rm !87Hz. +447974199137 GHANA OFFICE: +0243915206 orientenergyreviewgh@gmail.com ORIENT ENERGY REVIEW has emerged to be the platform and voice for the growing local content policy across the world.It is a monthly publication of Orient Magazine,Newspaper and Communications Limited 5, Dipo Dina Drive, Abule Oshun,Badagry Express Way Lagos www.orientenergyreview.com email: info@orientenergyreview.com

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DRILLING / EXPLORATION & PRODUCTION WOMEN IN ENERGY

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‘Women Are Capable Of Doing So Much More’

LOCAL CONTENT

13 INTERVIEW

Nigerdock Rebrands its Training and Development Academy to Boost Local Capacity Security, Key to Local Content Development

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‘We must take advantage of existing opportunities in the Nigerian Oil and Gas Industry’ - Kachikwu

LOCAL CONTENT CHAMPIONS We have perfected the Horizontal Directional Drilling Technology

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INDUSTRY NEWS

NEITI Begins 2015, 2016 Audit Of Nigeria’s Oil and Gas Sector corporate governance in conformity with the EITI standards,” he noted.

Adio, however, warned that NEITI would not hesitate to invoke relevant sanctions under the law on companies and other covered entities that failed to cooperate with it during the exercise.

All major international oil and gas companies operating in Nigeria were represented at the Workshop. The event was also attended by a cross section of the media and the civil society.

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he Nigerian Extractive Industries Transparency Initiative (NEITI) recently said it had commenced a comprehensive independent audit of the nation’s oil and gas sector that would cover the periods of 2015 and 2016.

The Executive Secretary of NEITI, Mr. Waziri Adio, announced this at a workshop organised for major oil companies in Nigeria, said that the independent audit was in line with the principles and standards of the global Extractive Industries Transparency Initiative, EITI. According to him, relevant government agencies are expected to participate in the exercise.

He said that the workshop was designed to acquaint participants with the structure and content of the template, the kinds of questions that NEITI would ask and answers expected to be provided by the covered entities.

“This workshop is to seek your views, suggestions and inputs as well as listen to your concerns on how to make the exercise hitchfree,” Adio added.

The workshop witnessed presentations on the EITI processes, methods, principles and stan-

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dards including emerging issues on beneficial ownership and contract transparency.

The benefits of implementing EITI in Nigeria also topped discussions at the interactive session.

Waziri further announced that NEITI would introduce a ranking reward system to incentivize participation of covered entities.

He said in the ranking system, companies would be graded based on their efficiency in populating the audit templates such as the quality, depth of information, data provided and quick response to set deadlines.

While reviewing the templates, the representatives of the various companies welcomed the objective of the workshop, describing it as a fundamental step in building partnerships and trust with NEITI in the execution of its mandate.

They urged NEITI to note carefully their observations and the issues they had raised at the workshop.

The representatives said that this was to ensure that the reviewed template suited the peculiar operations of the diverse covered entities slated to participate in the process.

Adio explained that the system would be shared with over 51 member countries of EITI and multi-lateral organisations, to serve as reference points on adherence to business ethics for major investment decisions in Nigeria.

“NEITI is committed to working closely with the companies under the EITI framework to create good business environment that is conducive for the inflow of more foreign direct investments into the extractive sector.

“For this to happen we encourage all companies to embrace transparency, accountability and

Orient Energy Review February, 2017

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DRILLING / EXPLORATION & PRODUCTION

Stakeholders Call for Quick Regulatory Approval as Key to E&P Sustainability

By Micheal Obineme

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il and Gas Stakeholders in Africa’s sub Saharan region have called for quick regulatory approval as solution to enhancing the Exploration and Production potentials in the region.

Speaking at the Sub Sahara Africa Upstream Oil and Gas Summit and Exhibition, recently, they identified delay in regulatory approval and limited infrastructural growth and development as hindrances to the prospects in deepwater exploration.

In his presentation, Managing Director, Shell Nigeria Exploration and Production Company (SNEPCo), Bayo Ojulari who was represented by General Manager, Deepwater Exploration, Engineer Gbenga Adewuyi, said there is modern day preference for gas and the available new grounds are in the offshore.

He said, “There are delays in regulatory approval from when you find oil till when you eventually get approval. You spend an average of 12 years compared to that of Australia which is 3 to 7

years. There is limited infrastructural growth and development where we need to influence the policy makers on how to address the issue of logistics,” he said.

According to him, the issue of insecurity has led to cost escalation implication, high risk projects and high capacity exposure. He said, “This requires a diverse and comprehensive skill set among the various economic blocs across sub Saharan Africa. How much do we allow the flow among the different trade blocs if we want our investments to be sustainable?

“We don’t have a standardized fiscal policy in sub Saharan Africa. We have ECOWAS, East African Community, and Southern African Development Community, (SADC) but there is no harmony. Our strength lies in understanding our environment. We need world wide access to skilled workforce.

“We contribute less than 10 per cent of the world’s needs whereas we have the potentials for 3 times more. From

2005 to 2014, exploration activities show that we are actively looking for these resources,” he added.

On his part, Chairman, Petroleum Institute of East Africa and Managing Director, Galana Oil, Powell Maimba said local content has to be looked at on the basis of competence rather than to score political gains. He said, “When people are looking for oil, they have no idea what will come up out of it. It is not about the big machines but how far you can go to explore the opportunities that the oil and gas industry provides. The role of the politician is not to determine economic activity.

“We should not frustrate mega projects because of local content. Local content has to be looked at on the basis of competence, thus, it has to be redefined,” he added.

Africa Oil Completes Kenyan Farmout Deal with Maersk Oil Africa Oil Corp. has announced that it has completed the previously announced farmout with Maersk Olie og Gas A/S (Maersk) related to Kenyan Blocks 10BB, 13T and 10BA

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t completion, Africa Oil received US$427mn from Maersk. This amount represents US$344mn of reimbursed past costs incurred by Africa Oil prior to the agreed 31 March 2015 effective date of the farmout and US$83mn representing Maersk’s share of costs incurred between the effective date and 31 December 2015, including a carry reimbursement of US$15mn of exploration expenditures.

An additional US$75mn development carry may be available to Africa Oil upon confirmation of existing resources, which is expect-

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ed to take place in the first quarter of 2016. Upon final investment decision, Maersk will be obligated to carry Africa Oil for an additional amount of up to US$405mn depending on meeting certain thresholds of resource growth and timing of first oil.

The resulting interests in each of Africa Oil’s Kenyan blocks are as follows:

near term. At completion of the Ethiopian portion of the Maersk farmout, the respective working interests in each of Africa Oil’s

Kenya Block 10BB: Africa Oil - 25 per cent, Maersk - 25 per cent, Tullow - 50 per cent* Kenya Block 13T: Africa Oil - 25per cent., Maersk - 25 per cent, Tullow - 50 per cent* Kenya Block 10BA: Africa Oil - 25 per cent.

Maersk - 25 per cent. Tullow - 50 per cent* Kenya Block 12A: Africa Oil - 20 per cent.

Tullow - 65 per cent, *Marathon - 15 per cent.

Kenya Block 9: Africa Oil - 50 per cent* Marathon - 50 per cent. *-denotes Operator The farm out of 50 per cent of Africa Oil’s interest in the Rift Basin and South Omo Blocks remains subject to Ethiopian government approval, which is expected in the

Keith Hill, Africa Oil’s CEO, commented, “We are very pleased to have completed the Kenyan portion of our farmout to Maersk. We feel Maersk will be an excellent partner in terms of technical and financial strength and experience critical to moving the development project forward. This transaction puts Africa Oil in the enviable position of not requiring any additional equity financing prior to first oil and will allow us to weather the current difficult oil price environment should it continue into 2016.”

Ethiopian blocks will be as follows:

Ethiopia Rift Basin Africa Oil: - 25 per cent, * Maersk - 25 per cent, Marathon - 50 per cent Ethiopia South Omo Africa Oil: - 15 per cent, Maersk - 15 per cent, Tullow - 50 per cent, * Marathon, 20 percent (*denotes Operator)

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DRILLING / EXPLORATION & PRODUCTION

FAR To Drill First Pure Exploration Well Offshore Senegal since the SNE Discovery

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AR Limited and the Senegal Joint Venture are drilling the FAN South-1 exploration well into the Southern FAN prospect in the first pure exploration well to be drilled offshore Senegal since the discovery wells of FAN-1 and SNE-1 in 2014.

FAN South-1 will be the next well to be drilled in the current Senegal drilling campaign and will be drilling into the South Fan prospect. FAN South-1 is the first well drilled into the Basin play since the initial FAN-1 discovery well in 2014. The well will assess the upside potential for improved reservoir presence and quality in the basin.

FAR assesses the FAN South prospect to contain 134 mmbbls of recoverable oil on a best estimate basis, with an 18% chance of success (refer ASX release 7 February 2017).

Figure 1 below shows the location of the FAN South-1 well.

The South Fan prospect consists of several stacked reservoir targets. The well will be drilled to an estimated Total Depth (“TD”) of 5,317 metres in a water depth of 2,139 metres. The firm well plan for FAN South-1 includes logging programs prior to the well

being plugged and abandoned.

tion in understanding the substantial potential of the large deep water basin area. With drilling continuing to progress ahead of schedule, without incident and safely, we look forward to bringing further news of the planned interference test in SNE-6 in the coming weeks.’

Figure 2 below illustrates the geological setting of the Basin Fan play containing the North Fan (drilled with the FAN-1 discovery well) in addition to the Central Fan and South Fan prospects.

FAN South-1 will be drilled on completion of the SNE-6 appraisal well which has now reached Total Depth and operations including wireline logging, collection of samples and drill stem testing are underway. SNE-6 has been drilled ahead of planned timing.

Managing Director, Cath Norman said: ‘It is great to be back drilling a pure exploration target offshore Senegal and the first well in the basin play since our original FAN-1 discovery. We are drilling in a part of the basin where we expect to encounter improved reservoir presence and quality and gain valuable informa-

Nigeria: Eland Oil & Gas Announces Near-Term Reserves Update

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hree-fold increase in recoverable reserves attributable to existing Opuama and Gbetiokun well inventory, adding gross 22.6 million barrels *Net 2P Present Value to Eland of US$ 186.8 million

40, provided by Netherland, Sewell & Associates Inc. (‘NSAI’) as at 31 March 2017.

AIM-listed Eland Oil & Gas, an oil & gas production and development company operating in West Africa with an initial focus on Nigeria, has announced the results of a Reserves and Resources evaluation on Opuama-1, Opuama-3, Opuama-7 and Gbetiokun-1, all contained within OML

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Orient Energy Review February, 2017

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DRILLING / EXPLORATION & PRODUCTION

Following the successful re-entry of Opuama-3 announced on 25 April 2016, Eland, through its joint-venture subsidiary Elcrest Exploration and Production Nigeria Ltd, together with NPDC, its co-venture on OML 40, intend next to initiate production by means of a side track on the Opuama-7 well in Q2 2017 followed by an Early Production System (EPS) on the Gbetiokun Field in the second half of 2017.

This is the initial stage of a planned phased development of the Opuama and Gbetiokun fields.

The remaining capex associated with Op-7 is $7m (Net: $3.15m) and the Gb-1 of $16m (Net: $7.2m). Eland’s joint-venture subsidiary Elcrest Exploration and Production Nigeria Ltd holds 45% equity in the OML 40

license. Opuama fields total reserves previously reported in the NSAI 30 June 2015 CPR remain unchanged.

However, the significant increase in oil recovery from the existing well inventory (Op-1, Op-3, Op-7 and Gb-1) are expected to lead to less infill wells being required to access the remaining reserves on OML 40 and therefore reducing future total Capex spend.

deck, are as follows: CEO of Eland, George Maxwell, said: ‘The confirmation of an additional gross 22.6 million barrels from our existing well re-entry strategy is very exciting. The level of capex investment required to produce this incremental volume is less than a dollar fifty per barrel, contributing to the significant NPV of $186.8 million from the four wells.

This programme will put the Company in a very strong position to move forward with the Opuama infill drilling and the full development of the Gbetiokun and Ubima fields, creating greater value for all our stakeholders.’

The oil reserves and future net revenue to Eland allocated to Op-1, Op-3 and Op-7 as of March 31, 2017 with a flat $55/bbl price deck and Eland cost parameters are as follows: The oil reserves and future net revenue to Eland allocated to Op-1, Op-3, Op-7 and Gb-1 as of March 31, 2017 with a flat $55/bbl price

American Firm Opens Discussion on Nigeria-Sao Tome Oil Blocks

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RHC Energy Inc., a publicly traded American company with oil and gas assets in Sub-Saharan Africa, is in discussions with the Nigeria-Sao Tome & Principe Joint Development Authority (JDA), regarding the terms of a new Production Sharing Contract for block two of the Joint Development Zone (JDZ).

The company said in a statement that in addition to ERHC, the JDA has designated at least one new contractor on the Production Sharing Contract (PSC) in replacement of interest-holders that have terminated their interests in the block.

According to the company, it is expected that similar discussions regarding JDZ Block three and four will also commence in due course.

It stated: “As earlier disclosed, the company has been reviewing its legacy exploration assets with a view to deciding, on an asset-by-asset basis, the feasibility and desirability of retention in the light of conditions in the oil industry and ERHC’s revised strategic focus.

“In the course of the review, the company has come to a conclusion

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regarding Block BDS 2008 in Chad.

“After careful consideration, ERHC has elected not to apply for renewal of the Exclusive Exploration Authorisation and the Production Sharing Contract over Block BDS 2008 upon the expiration in April 2017, of the current term.”

ERHC stated that it would continue working toward a strategic realignment of the company in the light of the current oil-price environment, and continued constraints on funding for oil exploration activities.

It said that it is refocusing on opportunities for cost-efficient entry into production and producing assets.

This, it noted is in contrast to the pure exploration model which the company previously ran and is intended to open up the company to new streams of investment and revenue.

“Accordingly, the company has concluded a Term Sheet with Starcrest Nigeria Energy Limited (Starcrest) pursuant to the Memorandum of Understanding earlier signed between

the parties.

The Term Sheet sets out a 180-day period commencing May 1, 2017, for a definitive agreement between the parties that gives ERHC entry, for valuable consideration, into Starcrest’s current entitlements to production.

Starcrest has a significant stake in Elcrest Exploration and Production Company Limited, the holder of 45 per cent of Nigeria’s producing OML 40.

Starcrest also holds directly OPL 291 and OPL 242 in Nigeria.

ERHC continues to bid, as part of several consortia with backing from financing partners, for producing interests in West Africa.

Newstar Oil and Gas Inc., a wholly owned subsidiary of ERHC, has also been set up to acquire producing assets domestically in the United States.

Orient Energy Review February, 2017

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OIL

Nigeria to Legalize ‘‘Illegal’’ Oil Refineries in Niger Delta

Oil Output Drops to 1.676 Mmbpd in March

By Dirisu Yakubu, with agency reports

Dr. Ibe Kachikwu

Nigeria’s Vice President, Yemi Osinbajo

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s part of efforts to bring peace to the Niger Delta region, the Nigerian government has revealed plans to legalize illegal oil refineries in the state.

These refineries, which support tens of thousands of people, are temporary structures processing stolen crude from oil company pipelines. The decision to legalize them is part of the demands made by community leaders during talks with the government.

“Under the plan that is being developed, communities would come together working with their respective state governments, the federal government and private sector operators to work out a template for the establishment of modular refineries in the communities,” a statement released by the Vice President, Yemi Osinbajo a fortnight ago reads.

If legalized, this could assist in relaxing tensions in Delta State where attacks by militants on oil installations have reduced since early January after the government initiated peace deals with communities in the region.

“We are saying there is a way out of violent agitation, but it is by creating opportunities and the environment where the people in the communities can benefit. The legalized refineries must be structured in a way that works for business; otherwise, it would not last. It is a business proposition first and foremost, it must make sense,” Osinbajo said.

The government in a bid to prevent theft from oil company pipelines, in 2016 shifted its attention to shutting down the illicit refineries. But the security

igeria’s crude oil and condensate production dropped by more than 200,000 bpd to 1.676 million bpd last month against 1.9 million bpd in February, according to the Ministry of Petroleum.

Although the Ministry which disclosed this recently did not provide the reason behind the monthly drop, sources with knowledge of the issues attribute the fall to the ongoing maintenance at the Bonga oil field located in Niger Delta.

Shell Nigeria, the operator of the field, early last month announced that production would be halted for about four to five weeks to carry out turnaround maintenance and engineering upgrades at the Bonga floating, production, storage and offloading (FPSO) vessel.

deals with communities in the region. The OPEC member is still exempted from a pact to cut production reached late last year. The deal which will expire in June would be reviewed at the next meeting of the Organization of Petroleum Exporting Countries (OPEC) on May 25, 2017.

Oil minister, Emmanuel Ibe Kachikwu, said few months ago that if Nigeria’s output recovers, the country could be asked to join the output cuts if extended. “I don’t expect that once you reach your volume you are going to have free rein, so we probably have six months to get our act together and then hopefully zoom back out production and then we will be asked to contribute.

That is what I imagine,” he added.

Nigeria’s oil output recovered gradually on account of reduced attacks by militants in the Niger Delta oil hub since early January after the government intensified peace

Missouri American Energy Commits $200m for Modular Refinery Margaret Ahiakwo

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issouri American Energy, a leading United States modular refinery investor, has set aside $200 million to launch Nigeria’s first modular refinery with a production capacity of 20,000 barrels per day in Delta State.

This was disclosed by the President of the company, Henry Iwenofu, while leading a delegation of top officials to Abuja.

According to him, $200 million has been budgeted by the company for the fabrication and installation of the components needed for the refinery in both the United States and Nigeria, saying another $200 million is also available for infrastructure development. Commenting on the development, Rabiu Suleiman, Executive Director/Coordinator, Refinery, Downstream and Infrastructural Development at the Nigeria National Petroleum Corporation (NNPC), explained that the government’s decision to encourage the establishment of modular refineries was born out of concerns about the huge environmental degradation and pollution caused by the unprofessional and unconventional methods being used by local refinery operators in the country.

In this regard, President Buhari had assured that requirements needed for the establishments of such a refinery will be reduced so as to attract foreign investors.

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Orient Energy Review February, 2017

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COMMMUNITY REPORT

Total, PHCCIMA Commit To SME Development, Capacity Building

Dr Emi Membere, President of PHCCIMA

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otal Exploration and Production Nigeria Limited, TEPNG, and the Port Harcourt Chamber of Commerce, Industry, Mines and Agriculture, PHCCIMA, have affirmed their commitment to capacity building and development of micro, small and medium-scale enterprises, SMEs, to stimulate the Rivers State economy.

They made the affirmation during a visit of PHCCIMA delegation, led by its President, Dr. Emi Membere-Otaji, to the Deputy Managing Director of Total, Mr. Le Cocq said during the visit that the

move was necessary as SMEs are the economic growth drivers, with high potentials to harness local raw materials for industrial production, generate wealth and engage skill and unskilled population.

He explained that TEPNG’s new management policy is more focused on less cash handouts and more of capacity building to identify with new business strategies and to empower the people and stimulate the local economy. He said building capacity of enterprises will help Nigerians reach their full potentials.

“TEPNG is committed to building capacities that will open frontiers of economic opportunities in the oil and gas sector and harness openings in other sectors especially in agriculture and its value chain,” he said.

He enumerated some of the initiatives of Total in promoting Nigerian Content Development and corporate social responsibilities to include the pioneering of an independent power plant that would be commercialised soon to add to the national grid and help invigorate the economy.

TCN Commissions 66MVA 132/33kv Power Transformers to Boost Supply

By Micheal Obineme

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he Transmission Company of Nigeria (TCN) has successfully completed the installation and commissioning into service of two 66MVA 132/33kV power transformers in its Katampe and Alagbon Transmission stations in Abuja and Lagos respectively.

TCN in a statement signed by the Assistant General Manager (Public Affairs), TCN, Ndidi Mbah, said that the 132kV voltage level section of the Katampe Sub-station which operates with2x 60MVA capacity transformers has in the past six weeks been functioning with only one 60MVA 132/33kV power transformer because the second one developed an internal fault that necessitated its replacement. This resulted in load shedding in areas like Gwarimpa, Jabi, Lifecamp, Maitama and Wuse 2, from 1st March - 10th April, 2017.

With the successful installation and energizing of a 66MVA 132/33kV power transformer at Katampe by TCN engineers, on Tuesday, 11th of April

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2017, the bulk load wheeling capacity of the transmission sub-station at 132kV voltage level increased from 120MVA to 126MVA. This means that the substation now has the capability to wheel power at full capacity to distribution load centers.

Also, with the installation and commissioning of a 66MVA 132/33kV power transformer in Alagbon Transmission station, Ikoyi, last week, the station now has a total of 3x60MVA and 2x66MVA power transformers, bringing the total capacity of the substation to 312MVA on 132kV voltage level. Consequently there has been improved power supply to Ikoyi, Victoria Island, Dolfin Estate and Marina in Lagos State.

TCN reiterated its resolve to continue to further expand its grid capacity, to ensure that it continues to efficiently move bulk electricity from generating companies to distribution companies nationwide.

Earlier, the president of PHCCIMA, Dr. Membere-Otaji, assured that the Chamber will work closely with Total to achieve capacity development.

According to him, the shortfall in oil prices dealt a great blow to the country because of her over-dependence on crude oil.

Otaji explained the need to tap from the huge potentials in exportation and build capacities that would increase Nigeria’s competitiveness in line with global standards.

He corroborated Mr. Le Cocq belief that SMEs in Nigeria represented a critical segment of the nation’s business community which accounts for over 80 percent of businesses, hence the need to develop the sector and help build capacities in other to open channels of opportunities and create strings of employment.

Cross River State to Construct a Total of 36 MW Micro Power Plants

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he Government of Cross River has concluded plans to construct a 2 MW multi-fuel power plant in each of the 18 local councils of the State. The State Governor, Ben Ayade who disclosed this, said the move is aimed at boosting electricity supply in the rural communities of the State.

“I have 18 local government areas and it is my commitment to ensure that every council and village has electricity under my watch,” he said.

According to him, the plants would combine renewable and non-renewable energy sources as the state is “considering the option of using solar for the day and gas fire for the night.”

“We are trying to have an industrial setting where we will actually be dealing with power supply and solar base systems to stranded communities,” the governor added.The project, which is scheduled to be completed by 2019, will be executed in partnership with Industrial Project Services SA Ltd, a South African company. “This will be the first solar power project to be undertaken in South-South Nigeria at a commercial scale. Once this succeeds, it means that we would have opened the door to the real big market of Africa which is Nigeria and if you have the Nigerian market, Africa will simply follow,” Ayade explained

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Organised By:

New Ventures, Strategies & Deal-Flow The 16th Africa Independents Forum 2017 showcases independent companies with acreage and portfolio assets held in the Gulf of Guinea, Northwest Africa, Maghreb-North Africa, Central Africa, Eastern and Southern Africa; and in landlocked and littoral frontier states, and engages too with related service and supply industry parties drawn from around Africa, Europe, United States, Australia, Asia and elsewhere.

The Forum in London will focus on up-to-date and emerging exploration plays and capital development projects, current corporate strategies in-place, insight into Africa’s large and yet-to-find hydrocarbon reserves, the state-of-Africa’s geo-economics of oil and the way forward, plus key issues shaping the future funding of companies and ventures in Africa’s upstream.

Including 79th PetroAfricanus Dinner 24th May, Jasper Peijs, Vice President for Exploration, Africa, BP, London, UK 8th Global Women Petroleum & Energy Luncheon 25th May, Sandy Stash, Group Vice President, Safety, Sustainability and External Affairs, Tullow Oil, London, UK

24th - 25th May 2017 The Waldorf Hilton, London, United Kingdom

www.africa-independentsforum.com Contact: Sonika Greyvenstein sonika.greyvenstein@ite-events.com

Amanda Wellbeloved Harry Harrison-Sumter Amanda.Wellbeloved@ite-events.com harry.sumter@ite-events.com

London: +44 207 596 5065 Johannesburg: +27 11 880 7052

INTERVIEW

‘We must take advantage of existing opportunities in the Nigerian Oil and Gas Industry’ - Kachikwu take advantage of them; we concentrate on the negative and fight each other all the time. Am hoping that we’ll look at local contents in terms of what we need to do as a nation to create our expectations, our targets and our aspirations as individuals.

So, how important is NOGOF?

T

he Minister of State, Petroleum Resources, Dr. Emmanuel Ibe Kachikwu is committed to the deepening of local content in the Nigerian Oil and Gas Industry. At the recently concluded Nigerian Oil and Gas Opportunity Fair (NOGOF) with the theme, “Advancing Indigenous Participation in the Nigerian Oil and Gas Industry for National Development, Dr. Kachikwu harped on the need by oil companies and investors to take advantage of the sundry opportunities in the Nigerian environment. The event which had incumbent Governor of Akwa Ibom State, Emmanuel Udoh, Senate Committee Chairman on Gas, Senator Albert Bassey and Hon. Emmanuel Ekon, House Committee Chairman on Local Content, in attendance drew participants from across the country. The Minister spoke on burning issues spanning local content development, bureaucracy, contracting cycle amongst others.

Sir, what do you have to say about opportunities in the Nigerian oil and gas sector?

What is important as we see some of these developments is realising really how much opportunities lie in

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this country that have been wasted. I congratulate the Executive Secretary of NCDMB, Engr. Simbi Wabote for organising the Nigeria Oil and Gas Opportunity Fair (NOGOF), this has deepened the concerns for the opportunities in the oil and gas sector to the opportunities in Nigeria because there are huge opportunities in Nigeria that we have abandoned so far and the time has come to begin to look again. This very minute before us, I will say I am almost impatient with Nigeria, because this is one of the very few countries in the world where there is advantage of population and never mind what we earn, we have the advantage of land mass and as we fly the sea, tons and tons of land are still available and not developed for agriculture or whatever else we want to do. It is absolutely resourced in a way that God has not resourced any other nation, both by manpower and resources in the land.

It is resourced by people with a very strong sense of culture, anything that will make a nation be the very best in the world is here. I just wonder what is wrong. What is wrong is us. Because we fail to see these potentials, we fail to

Advancing Indigenous Participation in the Nigerian Oil and Gas Industry for National Development is very apt. It is coming at the time when the focus of the federal government has shifted to nationalization with not a sense of expurgation but a sense of focusing on the latent contents and potentials that we have as a nation- growing the food that we eat, providing the manufacture that we use, focusing on the services that we can provide. And for the oil industry, we are looking at how to internalise those opportunities that exist in the oil and gas sector and to deepen the whole process.

How is the government planning to leverage on these opportunities?

Early this month, the Federal government itself lunched an Economic Recovery and Growth Plan (ERGP) and part of that was basically ‘think Nigerian, think Nigerian and think Nigerian’ and very important in the oil industry, it sets out very lofty aims. When I dream, I dream big because I think this country have the capacity to deliver in the dream if we just focus on it. I see that 2.2 million barrels of oil is been too long in production, we need to move on. We hold those numbers as if the whole world focuses on 2.2 million. This country has the capacity to produce 4 million barrels of oil. We need to find out what it will take for us to produce 4 million barrels of oil.

Orient Energy Review February, 2017 13

INTERVIEW We need to remove institutional and financial constraints to move forward rapidly to those numbers.

And so in this plan we have put 2.5 million barrels. We have the capacity with emerging share coming out from Chevron, Exxon Mobil, we have capacity in this country to produce oil in excess of 3 million so why are we crying about the difficulties that the present times have created? I said we need to focus on the opportunities that there are with the decisions that we have been given to find solutions to the problems that we see. We are focused on local refining because after 40 years, our refineries are basically decrepit.

The time has come for us to begin to move away from transporting and externalizing the export of crude to begin to refine petroleum in its very finest.

The OPEC world today has changed. Being a supplier of crude does not necessarily own an advantage and in fact in the next 15-20 years, the bodies may over strip the games in the oil sector. So like the vice president keep saying in his speech, “the time has come, the urgency is now” but I said, the urgency is yesterday. We need to begin to refine petrol, get into the petro-chemical industry; we need to limit the amount of raw product we send out of the country and this responsibility not just for the NNPC’s portion of crude but also for the IOCs who work here. The business model will not continue to remain, to trail, to produce and to export.

It must be to trail, to carry to refine and to export.

The model will have to change and over the next couple of years as the incentives roll out, we are going to see a new level of skills geared out in different participation and productivity in oil and gas sector. And I urge our friends who work here, to take advantage of these.

We will look at how we deal with spill. For very many years we look at spill as the usual thing in phraseology and ecologies. Time has come when all of us to begin to say what does oil do as an impact to those communities and how do we do something to reverse that. And so the things we will have to look at now will have to change from just approving of licences to finding out how you intend to exist. What are your production patterns? What are the things that you respect? The rule of safety must merge with the role of survival in terms of clean-

14

liness and so there are a lot more deepening in terms of global content philosophy.

What’s the role of Financing in all of this?

Unless you find the funding, everything we say, is entertainment and so we need to begin to focus very seriously as a nation on dealing with the financial challenges of the sector not just for the big players but indeed very importantly even for the small players and so we are taking the very first step under the Seven Big Wins launched by the president to look at how to exit the boat and imposing cash calls…. We’ve reached an agreement with majors in December, we are trying to finalise the process of the first stage of payment in April and once we do that, the funding constraints that we have had in the sector will go.

And once they go, and indeed just preparatory to go in, the tremors that I hear and see in the oil sector, in terms of opportunities that have been taken advantage of, and our project that has been re-launched that have been dropped are becoming quite exciting. I think while others in other sectors may worry about the downturn in the economy, you guys in the oil sector should get excited about what is happening.

There’s no sector of the economy well-placed than the oil industry in helping the country solve its problems, and to continue to multiply the opportunities and advantages in this national economy. So, we must all begin to look at different frame of doing things and Nigerians must continue to challenge themselves to the opportunities that are there.

Those who have tried have succeeded. When the President declared in the road map in October that “The task before the Ministry of Petroleum Resources is to maximise the potentials and opportunities across the whole range of the oil and gas industry to stimulate our economy in spite of the current challenges;” to this requires creativity, innovation, technology and robust partnerships amongst various stakeholders.” We have commenced very aggressive implementation and tracking of specific actions arising from this same road map. We focus on limiting the time that contractors take to get approval. We also focus on the cost of production and moving from a $27 per barrel to hopeful-

Orient Energy Review February, 2017

ly between $15 and $18 per barrel and creating incentives around those who are able to match this very quickly. We focus on creating early renewals because historically people wait for you to beg for renewals.

We are actually approaching you, expecting you to come early enough and let us do the things that we need to do.

Looking Into New Frontiers For the Ministry, there are a lot of things we’ve done differently over the past one and a half year but there’re more opportunities still. So I say to you that when people talk of challenges, I see a lot of opportunities everywhere. When people talk of uncertainties in the system, I see a lot of growth opportunities; when people see unpredictability, what I see is a chance for innovation.

When they talk about delays, I look for opportunity for rebirth. When they hammer on the fear, I say have a sense for adventure. And when people talk of local content rivalries, I say talk of local content collaboration. Everything you see as a gap in our system, there is a huge potential to make a difference. The upstream sector alone spent over 12 billion in Joint Ventures investment. It’s going to get higher with the funding arrangement that we have put in place because new projects are on board. But it is important that as we do this, all of you must begin to deepen their areas of specialization because the greatest problem of the Nigerian phase is overcrowding.

There are tons and tons of opportunities but everybody wants to follow the same business model. And once you succeed in creating a new one, everybody runs into it. The time for individual’s selective creativity has come because only that would make you survive in a very competitive environment. I ask you to help us make Nigeria a Japan of sort. For us to do this, we have to reduce the time we spent on bureaucracy. I have very little patience for bureaucracy and those people that have dealt with me know that I like to cut through the chase. If anybody stands in your way and give you bureaucracy rather than speed and services, please come to me, you will have a hearing. It is absolutely essential that we drive public officials to provide services, not road blocks.

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INTERVIEW On Institutional Capacity The NOGAPS which is the Nigerian Oil and Gas Park Scheme which the NCDMB is instituting is an attempt by us to enhance local manufacturing by providing research and services scheme for those who want to go into manufacturing. I ask all of you to take advantage of that. We need to think of how to empower investors with fiscal incentives. Lower taxes today mean imploded earnings tomorrow for government and with this; we’ll begin to look at the long term rather than the short term.

Training of Nigerian companies has come a long way but we are not there yet. I am looking for a wholesale Nigerian company that can one day compete with ExxonMobil or Chevron here in this place with its own abilities to produce locally, at its own risks. I am looking out for this and it is not too much to ask. Training is key and I urge everyone that is part of this from the oil companies that give scholarships to NCDMB, to PTDF to continue to dialogue at Joint Ventures with the academia.

There is too much gap between the academia and the actual industry and we need to bring them together to be able to make some veritable difference.

There are a lot of complain about accessing the Nigerian Content Development Fund (NCDF), what are you doing to help the situation?

I have directed the management of the NCDMB to review the operative model of the NCDF to make it readily available for those who have very unique proposals to grow local content. It is the era of transparency and we are focusing on this. In an era where the stories you hear about the oil companies are stories of graft, gaps and difficulties; that is not the oil industry that I want to bequeath to this country. We want an oil industry that is transparent and transparency should move away from avoidance. In other words, the fact that we hide things from you is not transparent. Transparency means that we must open our boxes to you and to correct those things we think we are doing wrong. So one of the steps we have taken is to ask most of the agencies including the NNPC to work very collaboratively with groups like NEITI whom I find enjoyable working with; www.orientenergyreview.com

although in a critique, I found out some gaps and until you get those criticisms and work collaboratively with a mind to correct, you won’t be able to make progress. So when we see legislators around, we must see them as joint venture partners.

So, what must we do to make local content grow for us as we go forward?

The first is security. We have gone all over the country trying to involve all those who have one thing or the other to do with security to make it better. We are working collaboratively with the Ministers and His Excellency, the Vice President who has found time to go around with me. I am working collaboratively with governors with no party lines at all to try and find a solution and this is yielding results.

In three months, we’ve not had an incident. If you look at our seven roadmaps, one of our key commitments is a zero free shutdown on the basis of militancy in 2017. So far, we are delivering but a lot of work still needs to be done. So, if you want to grow local content, you’ve got to provide the enabling environment. When I hear talks about moving headquarters, I totally support that, we need to look at the new model but I will also place on you the imperative of providing the requisite secured environment. The second is we encourage what I call the antelope leapfrog. We cannot accept the chase that requires gradual process. We are so far behind in everything you think of; from infrastructure to refining, to production model and virtually, everything.

So, we need to be leapfrogging like an antelope in a haste, to get to the finish line.

How bright is the future?

The future lies in self belief, in hope. The future lies in trying to get ourselves out of the melancholic environment in which we think we have given up. For all the difficulties we’ve had today, there is so much attraction in this place, so many opportunities available.

And local content is probably the most practical example of how we can deepen the participation of Nigerians, so oil companies should be a little more calm and bubble anytime we talk of local content. Sometimes, we see delays inter-agencies competition that

stretches time for the approval of contracts. I have given a directive that average contracting time should not exceed six months and we already have a committee working across board to do this and I hope that by the end of this year, we would have achieve this objective. I am very hopeful of this country. I think there are lot of opportunities and I believe our time is now but the moment must be seized. We no longer have the luxury of time, to quarrel and get confused in polemics. We need to have practical, simple and direct steps and move forward. We’ve taken six, seven solid steps in case you have not noticed since we began this sojourn. We’ve dealt with your downstream, funding, transparency in the NNPC and we are dealing with a whole more. We are just beginning and if we keep up with this fast pace, very focused, very direct, we would achieve what we want our local content to become what everybody enjoys and help us to achieve what is the basic thing we want, which is reduced cost and giving opportunities to Nigerians.

However, we get there; we need to get there fast.

“

The task before the Ministry of Petroleum Resources is to maximise the potentials and opportunities across the whole range of the oil and gas industry to stimulate our economy in spite of the current challenges;”

Orient Energy Review February, 2017 15

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Security, Key to Local Content Development – Kachikwu Data on Upcoming Oil Industry Projects Ready in Two Weeks – NCDMB

By Margaret Nongo-Okojokwu

T

he Federal Government has underscored the importance of security to the development of local content and reported efforts he and other top government functionaries had made to mobilize support around the country for peace initiatives in the Niger Delta, which had started yielding positive results.

Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu, stated this at the Nigerian Oil and Gas Opportunity Fair (NOGOF) held on the 29th – 30th of March, 2017 in Uyo, Akwa Ibom State.

Kachikwu highlighted the importance of the fair, noting that the outcome would enable service companies in the industry choose areas of specialization and prevent overcrowding in certain fields.

According to him, “The greatest problem of the Nigerian space is overcrowding. There are tonnes and tonnes of opportunities but we must succeed in creating business models.”

“A lot of work still needs to be done. If you want local content, you have got to provide the enabling environment.”

Meanwhile, an outlook of upcoming activities across the upstream, midstream, and downstream sectors of the Nigerian oil and gas industry would be out in two weeks according to the Nigerian Content Development and Monitoring Board (NCDMB).

This compilation is the key outcome from the Nigerian Oil and Gas Opportunity Fair (NOGOF) with the theme, “Advancing Indigenous Participation in the Nigerian Oil and Gas Industry for National Development.”

Companies across the value chain discussed their forthcoming projects at the fair, complemented by presentations by the Department of Petroleum Resources (DPR) Nigerian Ports Authority (NPA) Nigerian Customs Service (NCS) and ancillary agencies of government.

The compendium of opportunities will guide international and local service companies in making strategic investment plans, with a view to maximize the domiciliation of activities and enhance in-country value retention.

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It will also assist the NCDMB to identify high impact activities with potential for employment generation, training, in-country value addition, and revenue retention for support and inclusion in her 5-year roadmap thereby further cementing the sustainability of Nigerian Content development and implementation.

The two-day NOGOF event was attended by major stakeholders of the industry, including the Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu, Managing Directors of Exxon Mobil, Total Upstream, Chevron Nigeria and Addax.

There were also high level representations for the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC) and the Managing Directors of Shell Petroleum Development Company of Nigeria and Nigerian Agip Oil Company.

In his welcome address, the Executive Secretary of NCDMB, Engr. Simbi Wabote remarked that “while the Board and industry had made giant strides especially with respect to developing capacity in-country, upgrade of existing facilities and establishment of new facilities, there had not been an alignment of the capacity being established with the demand/ opportunities available.”

Instead, companies and investors often acquired assets and facilities to pursue short term opportunities based on trends they had seen in the industry, he said.

This scenario, he regretted, “had resulted in overcapacity in some areas where in-country facilities scrambled for available work while there was lack capacity in some other areas resulting in exporting of work scopes abroad with the attendant loss of revenue and jobs.”

Wabote listed the objectives of NOGOF to include “showcasing opportunities in the upstream, midstream, and downstream sectors of the oil and gas industry, present available and planned capacity in-country provide multi-nationals the opportunities to link up and utilise in-country and enable Nigerian companies tailor their business strategies towards exploiting available opportuni-

Orient Energy Review February, 2017

ties.”

According to him, the Board had adopted a 100 days target for completing its aspects of the contracting processes in line with the 6 months contracting cycle time set out by th Minister of State for Petroleum Resources.

He stated further that recent assessment visits to oil and gas facilities and assets around the country had provided the Board’s management with updated knowledge about the scale and size of capacities and capabilities available in-country as well as plans of some service providers to scale up their capacities. “It is imperative that we patronise and utilise these facilities to encourage current and aspiring investors.”

The Executive Secretary also revealed that the Board has issued directives that electrical cables procurement, coating of all line-pipes and threading of Oil Country Tubular Goods (OCTG) must be carried out in Nigeria. “Similarly, all in-country capacity must be exhausted before approval will be given for procurement of Line-Pipes outside the country.” Also speaking, Governor, Akwa Ibom State, Mr. Udom Emmanuel, stressed the need for deliberate efforts by government and oil companies to boost local capacity in the industry and enhance security. According to him, “We have paid lip service to the issue of capacity building over the years. We need to transfer technology by building skills development centres in the region,” he said, urging oil companies to partner the state government to achieve this.

In his goodwill message, the Chairman, House of Representatives Committee on Local Content, Hon Emmanuel Ekon commended the Board for organising the Nigerian Content Opportunity Fair, which he described as the first time operating companies would inform service companies of projects to expect.

He advised service companies to make good use of the opportunities, stressing that Nigerian Content was for companies that have built capacity and ready to deliver value.

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LOCAL CONTENT

Nigerdock Rebrands its Training and Development Academy to Boost Local Capacity

I

n line with its commitment to enhance Nigeria’s local capacity and provide competent indigenous workforce for the energy services sector, Nigerdock has unveiled its re-branded Training and Development Academy, the foremost indigenous institution offering the highest quality and competence needs-based training for its workforce and clients in the sector.

The fully-equipped academy, which was unveiled on Thursday, April 6, 2017, is a globally recognised centre that has been training tradesmen and professionals for over three decades, recording over 6,000 trainees in various skills including project management, quality assurance, occupational health and safety, welding, fitting, painting and coating, machining, lifting, rigging and scaffolding among others.

Representatives of the Nigerian Content Development and Monitoring Board (NCDMB), Oil and Gas Trainers

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Association of Nigeria (OGTAN), Nigerian Institute of Welding (NIW), International Oil and Gas Companies (IOCs) as well as business partners, who graced the occasion, commended Nigerdock for its consistent efforts to bolster local content and put Nigeria on the global map in the terms of complex oil and gas projects delivery. unveiling the re-branded academy (formerly known as Nigerdock Training Centre), Group Corporate Affairs Director, Jagal – Joy Okebalama, noted that by re-branding the centre, the company will be able to replicate its excellent quality footprints in the industry. It will also be able to increase its accreditation portfolio, enable partnerships with relevant public and private organizations, arm Nigerian youth with skills for employment and life and will ultimately be franchised across Nigeria with the bid to offering internationally accredited qualifications in various disciplines.

She explained that the training centre recorded a landmark achievement in 2012 when it was adjudged most suitable to develop and deliver bespoke training programs in different skill sets lacking in the Oil and Gas sector on the back of the Chevron DSO Project

in Nigeria.

“Our trainees are highly sought after by both our competitors and admirers due to the quality of training they have received. We are very proud of the fact that we give them the training and tools that equip them to add value in a very demanding industry”, she said.

Established in 1986 as Nigerdock Training School, its initial focus was providing training and qualification for the company’s internal needs.

Thereafter, it entered into partnership with the National Directorate of Employment for training of welders, fitters and machinists. An active member of OGTAN and NIW, the Nigerdock Training Academy was the first Private Sector organization to be accredited as an Authorized Training Body by the International Institute of Welding. It is also a City & Guilds Approved Training Centre, boasting over 30 internally developed courses, leading to international/industry recognised certifications.

Nigerdock has made significant contribution to Nigerian Content Development and Monitoring Board Human Capacity Development Initiative (NHCDI), contributing over 500,000 man hours by successfully executing programs that have trained Nigerians in over 30 skillsets/disciplines, across Fabrication, Engineering, HSEQ, Project Management, Commercial Disciplines, Supply Chain Management and integrating training beneficiaries through employment by Nigerdock.

Orient Energy Review February, 2017 19

LOCAL CONTENT

Tolmann Celebrates Silver Jubilee In Style. ...sets up Integrated Fire Field Response System and Major Emergency Centre

By Jolly Adjevwe, Port Harcourt

Tolmann Allied Services, a leading international risk management safety and emergency company rolled out its drums to celebrate its 25 years of existence and its operations in the oil and gas industry.

As part of the celebration, there was a ground breaking ceremony of Tolmann Integrated Fire Field System and Major Emergency Response Centre in its head office in Port Harcourt.

Speaking at the ceremony, the Minister of state for petroleum Resources, Dr. Emmanuel Ibe Kachikwu, ably representedviser, by the senior Technical Adviser, Upstream and Gas, Mr Gbite Adeniji commended the company’’ for achieving great fit in its 25years of operation, saying that, “the existence of Tolmann is a testimony that our local content policy is working. When we have companies like Tolmann to showcase to the world, there is no doubt that anyone will challenge the government of our policies in the oil and gas industry”.

Kachikwu who was represented by Mr. Gbite Adeniji, Senior

Technical Adviser Upstream and Gas, stressed that, “Focus, dedication, loyalty and team work have brought Tolmann to this position of celebrating its silver jubilee. This is to say we have a world class company and leader in Africa’, adding that Tolmann, a purely indigenous company is a motivated company even in the face of high competition in the industry.

Speaking earlier, Sir Emmanuel Onyekwena the Managing Director/ Chief Executive Officer, Tolmann Allied services, said that the company was born as a child of circumstances, when there was so much casualization in the industry, where workers were demanding for increase in wages without job security.

According to him, ‘Tolmann was formed in 1992 and incorporated in 1997 with registration number 316077 when the company have its major breakthrough in the oil and gas industry.

Today, the company has grown in strength and capacity, meeting the ever increasing challenges of its goals, values, vision, mission and

20 Orient Energy Review February, 2017

strategic focus. We promote safety management through specialist safety training support services and technology’.

He stresses that, Tolmann was the first company to own a private training facility that was involved in logistics, training, highest international certification regards OPITO approved courses and other international bodies in Health Safety and Environment (HSE). In his words, “people can train in Tolmann and use the certificate to work anywhere in the world. This is a major achievement.

Sir Onyekwena said that the major constrain in the industry is that there was no levelled play ground for operators to do business in the right way. According to him, “It is not about competence in Nigeria, but who do you know. There is so much interference from the government of the day and individuals. I am happy for some companies that want things done the right way. To us in Tolmann, safety is our watch word.

He commended the various companies that have been patronizing Tolmann over the years, especially Total, Agip, Boseit and others, saying that the quality services we render in the industry will continue to give the right playing field and one day Nigeria will be better for it because we are building capacity of the people. I also advise that people who take decisions in the oil and gas industry should not personalize institutions, but should establish institutions so that those coming behind will follow their footsteps thereby stabilizing the industry totally. Speaking in a welcome address, Mrs. Helen Agboire the Administrator, Tolmann Maritime Training School said that Tolmann has become a quintessential facility for offshore/onshore, maritime and aviation safety training, a one stop shop that embodies professionalism in its purest form,

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LOCAL CONTENT

pointing out , “it is not just what we do, it’s more importantly how we do it. This has endeared us to our clients over the years, because we actually care. Our job is very much part of who we are, it says a

lot about us”.

She thanked the esteemed clients, stakeholders, and hard working staffs of the company for standing with Tolmann in its years of operation, in her words, “Each one of you has something to offer and even those who do the

same job, do it in different ways.

In the years to come, we will undoubtedly face challenges and have setbacks; we will overcome because of our unflinching commitment to safety, quality and customer satisfaction”.

Egina FPSO Integration: NCDMB, MDAs to Facilitate Record Breaking Activity …Board to organize knowledge sharing sessions

I

n-country integration of the Egina Floating, Production, Storage and Offloading (FPSO) units at the SHI-MCI yard in Lagos will receive full collaboration from the Nigerian Content Development and Monitoring Board (NCDMB) and ancillary agencies.

That will be the first time it would happen in Nigeria.

The leadership of the NCDMB and other agencies, including the Nigerian Maritime Administration and Safety Agency (NIMASA), Nigerian Ports Authority www.orientenergyreview.com

(NPA), Nigerian Customs Service (NCS) and the Nigeria Export Processing Zones Authority (NEPZA) declared their commitments last week after inspecting the Total Upstream Nigeria Egina’s FPSO undergoing construction at the Samsung Heavy Industry (SHI)’s yard at Geoje, South Korea.

The FPSO is scheduled to sail away in June 2017 and arrive SHIMCI yard in Lagos, September 2017 where the six modules fabricated in-country will be integrated, with 21400 pre-commissioning

tasks expected to be performed.

After integration, the FPSO will be towed to the Egina field, about 200 kilometres south of Port Harcourt, Rivers State and hooked-up for operation.

Speaking during the visit, the Executive Secretary, NCDMB, Engr. Simbi Wabote charged Total Upstream Nigeria (TUPNI) to identify issues that required the Board’s intervention for quick resolutions ahead of the arrival of the FPSO. Such approvals, he explained, like authorizations for expatriates who would lead the integration, towing of the FPSO and other scopes, would guarantee smooth conclusion of the project.

He underscored the importance of the Egina project to the Nigerian economy, particularly the addition of200, 000 barrels to the country’s daily crude oil production. Egina will also contribute to the Federal Government’s commitment to address production decline and shore up national revenue. The Nigerian oil and gas industry needs more projects to build capacity and keep existing facilities from wasting, he added.

Orient Energy Review February, 2017 21

LOCAL CONTENT sortium that has made in-country integration of the FPSO possible, noting that they have positioned themselves for future projects. He challenged the partners to work together to further develop the yard and attract the African market.

The Managing Director of SHIMCI, Mr. CW Kim in his remarks, reaffirmed Samsung Heavy Industry’s preparedness to help Nigeria upscale its technological base. This philosophy informed the decision to make the long term investment, he said.

The Executive Secretary, who hailed Total and SHI for their Nigerian Content credentials on the Project, informed that “this happened because of the push by the NCDMB; even though Total was convinced, they still needed a little push.

“

We are happy with the progress of the project and its contribution to Local Content and the national economy. FPSOs have been built abroad in the past and moved straight to site. This is the first time that many Nigerians will see what it looks like.”

Speaking further, the NCDMB boss announced plans by the Board to organize a one-day knowledge sharing session on Nigerian Content, to enable international operating oil companies (IOCs) share strategies they deployed on their projects.

The session, he explained, would ensure that IOCs can leverage on Nigerian Content experiences of others when planning projects or faced with similar challenges.

Wabote reiterated that NCDMB was developing guidelines that would ensure that Nigerian companies participate actively in the operations phase in oil and gas projects, noting that the sustainability of Nigerian Content lie in the operations phase which often lasts up to 25 years.

In his comments, Deputy Managing Director, Total Upstream (TUPNI), Mr. Ahmadu Kida Musa hailed the collaboration between the TUPNI and NCDMB teams on the Egina project and charged the Board to continue pushing the boundaries of Nigerian Content implementation.

22

He commended regulatory agencies that pledged to support the in-country integration phase, noting that “some of the things we will be seeing have not been done in Nigeria.

We would need accelerated approvals, while not breaking the law.”

Musa recalled that Total embarked on the project in 2013 when the country faced economic uncertainties, particularly the Petroleum Industry Bill (PIB) and 2015 general elections.

According to him, “Total believed in Nigeria, in Nigerians and on Egina. The project has set Nigerian Content standards and we are proud of the jobs it created, inputs from Nigerians and the fact that contributions from Nigerian companies are comparable to the ones done in South Korea.”

The DMD also commended SHI and LADOL for forming the con-

Orient Energy Review February, 2017

He added, “We decided to invest in Nigeria for the long term, not just for Egina. It would not make sense to invest for just one project; it needs several projects. We have capacity in construction and we have been in business for over 40 years.

To succeed in Nigeria, we plan to be competitive and operate with a long term plan.”

The Egina field development consists of the FPSO, connected to the Subsea Production System via Umbilicals, Flowlines and Risers and Offloading Terminal.

In-country integration of the FPSO and fabrication of six modules of the vessel created 5000 direct jobs and 5000 indirect jobs. Increased domiciliation of future FPSO projects through the fabrication of more modules is expected to create additional jobs, estimated to reach 30,000.

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LOCAL CONTENT

Solewant Nigeria Limited: the number one choice coating company for the oil and gas industry coatings, etc. Different pipeline coating systems are dominant in different regions in the world.

Mr solomon Ewanehi Managing Director,Solewant Nigeria Ltd.

P

lant applied pipeline coating system solution in the mill and in the field has achieved world-wide acceptance as the most reliable system for reliability, cost saving and efficient delivery of pipeline projects. Pipeline owners in Nigeria, international and indigenous oil companies now has pipeline coating application solution as the “choice coating” to protect their pipelines in offshore locations, above and below ground installations.

Corrosion is the primary factor affecting the longevity and reliability of buried and sub-sea oil and gas pipelines throughout the world. As a result, the pipelines are designed and constructed with an external corrosion resistant coating and protected simultaneously with an effective cathodic protection system. Over the past 50 years, oil and gas pipelines have been coated with a wide variety of different coatings, such as coal tar or asphalt enamels, polyolefin tapes, two layer extruded polyethylene coatings, single or dual layer fusion bonded epoxy coatings, heavy three or multi-layer polyolefin (polyethylene or polypropylene)

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About 90% of coating done in Africa is the plant or mill applied Polyethylene/Polypropylene coating system.

This is because terrains in this region pose a lot more challenge due to its high abrasion, high temperature and high chemical conditions. So, it is only imperative that a coating that is resistant to these conditions is widely adopted.

As an industry leader in pipe coating solutions and with more than 16 years of experience, with hundreds of thousands of square meters of line pipes, valves, flanges elbows, etc. coated over the years, Solewant Nigeria Limited (SNL) is dedicated to the development and supply of quality pipe coating application services to meet the challenging needs of the oil and gas industry in this era of oil price fluctuation.

“Our competence includes pipe coating, pipeline field joint coating application services, custom coating application services, supply of specialty coating materials and application in line with industry standards. We have been able to deliver quality and standard pipe services to Nigeria Gas Company, SEPLAT/NPDC, Notore and to mention but a few.

And with the Solewant state of the art pipe coating plant capable of coating PP/PE coatings on 24mtrs pipes, African pipeline owner will worry less,” Solomon Ewanehi, Group CEO of Solewant Group.

Solewant was able to deploy her mobile coating plants and coating application experts to deliver several FJC projects for MPN, NGC, Oando pipeline projects. Solewant also delivered O.U.R/TEPENG 42”X45km FJC pipeline project in Nigeria using high-tech mobile coating plants on surface prepara-

tion and solid epoxy application system.

In 2012, Solewant Nigeria Limited was awarded over 300km of line pipes with Seplat Petroleum Development Company to apply three layer polyethylene coating method by Seplat Petroleum Plc. The need of this pipe coating campaign was borne out of the need for Seplat petroleum, after careful consideration, to free issue coated line pipes to their pipeline laying contractors. This process proved to be efficient in both internal and external cost control, adequate records keeping and quality monitoring and management of her overall pipeline protection management system.

Seplat elected Solewantas their foremost pipe coating contractor and with this relationship, over twenty-five thousand line pipes, spools and bends of various sizes and diameter have been coated and delivered to Seplat Petroleum Development Company.

To provide the best services for its clients, Solewant Nigeria Limited has formed strategic alliances and partnership with international coating material and equipment manufacturing companies such as KEMA coatings of Canada, Canusa CPS of UK, and XYT steel of China. With these alliances, Solewant has continued to deliver quality FJC services in a timely manner and within budget.

Solewant Nigeria Limited has adapted her brand new pipe coating plant to coat 24mtr length of line pipes; this shall be done by first seamlessly welding two 12mtrs line pipes together. This is achieved by the use of an automated welding system to weld the pipe joints.

Solewant has integrated the latest cutting edge technology into her plant to be able to coat dual pipe joints. This system will invariably reduce cost of logistics during coating and also reduce general FJC cost by almost half.

Orient Energy Review February, 2017 23

LOCAL CONTENT

PETAN: WAIPEC 2018 to Hold in February 2018

T

he Petroleum Technology Association of Nigeria (PETAN) has said that the West African International Petroleum Exhibition and Conference (WAIPEC) will return to Lagos for its second edition 6-8th February 2018 following hugely positive feedback from the inaugural event, which took place at the Eko Convention Centre in February this year.

Over 350 delegates and over 200 participating companies took part in WAIPEC 2017, which over two days through topical debates and speaker sessions, offered exclusive insight in to how to unlock strategic value within West Africa’s oil and gas sector, how to leverage innovation, best practice and technology to grow the industry and how to remain competitive in a tough global market.

24 Orient Energy Review February, 2017

In addition, an international exhibition ran alongside the conference showcasing all of the latest products and services from companies.

Speakers and participating organisations included representatives from the Nigerian National Petroleum Company (NNPC), Shell Nigeria Exploration and Production Companies Ltd (Snepco) Seplat Petroleum Development Company Plc, First E&P Development Nigerian National Petroleum Corporation and Nigerian Content Development and Monitoring Board.

The Chairman of PETAN, Bank Anthony Okoroafor stated that WAIPEC’s programme for 2018 will build on the progress of 2017 and will once again be driven by an esteemed steering committee, representing a cross section of key

stakeholders from the Nigerian oil and gas industry.

He said: “WAIPEC 2017 provided a great platform for the very best representatives from across the West African energy industry to come together and discuss, deliberate and share their insight and knowledge towards creating beneficial strategies for the betterment of all areas of the industry. After some fantastic feedback and much demand, we are delighted to announce that WAIPEC will return for 2018, where we will continue the conversation and hopefully reflect on the progress that has been made from 2017.”

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LOCAL CONTENT

MONIPULO: “I See The NCD Act As A Very Useful Intervention…” Dr Seinye Lulu-Briggs

M

onipulo Limited is an exploration and production company with its head quarters in Port Harcourt. Though the sole operator of OML 114, it has since added three other blocks and is making plans to diversify into gas development and commercialization. Dr Seinye O.B Lulu-Briggs, the Executive Vice Chairman, in this interview with Orient Energy Review, bares her thoughts on Local Content practice in Nigeria.

You mentioned that Monipulo came on board in 1992 after the rise in the number of indigenous companies. How has it been since then for Monipulo?

We are grateful to God, we are still standing. It has been quite a lot of activities from then till now. Back then, hardly anybody knew that a time like this would come. It wasn’t foreseen but we are happy that we’ve come this far.

We have had partners that worked with us to explore and develop the field which led us to production. Eventually we divested, and today we own 100 percent of our block and we have also expanded our portfolio of assets by acquiring 3 more blocks during the previous bid rounds that was done in Nigeria. In addition to where we are producing from, we now have OPL 231, 234 and 239; that’s an offshore Block.

You started operations before the Local Content Act was passed. How can you compare that era of not having a law that backs up what you do and now that you have a law?

First of all not everything is bad con-

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cerning the Nigerian government. It was the government that came up to encourage indigenous companies to apply and have licenses after paying signature bonuses. Monipulo did successfully and we were granted the block. There was support at that time from the Nigerian government. For us at Monipulo, we set out to showcase to the world that truly the indigenous Nigerian can also venture into the oil and gas business, which before now had only been operated by the huge international co-operations.

So, because we had that local-content focus from the beginning, we had the policy of ensuring that there would be a phase replacement of international experts with Nigerian engineers. We have successfully done that for the past 10 years or so. We have been operating with 100 percent indigenous staff. These happened long before the last government thought of local content policy and all of that. We have been on top of the situation and can today boast of 100 percent compliance with regards to the structures they have put in place to recognise local content in operations.

But what’s your overall take on the Local Content legislation?

For us it is not new. It is our culture; our life. But it is a bit of a concern when you have been a local player; and have 100 percent of staff as Nigerians, then the law comes up and tells you that you have to pay a percentage contribution of your expenses to government in the name of Nigerian content. We have been very compliant, basically because we have to remain in good standing with the various laws or bodies governing the oil and gas industry in Nigeria. I would think that such levies from the law will

be applicable to Oil and Gas companies that didn’t practice Local Content in Nigeria. Those who see the Oil industry as a platform to make wonderful returns to shareholders that are probably not Nigerians. We are a 100 percent Nigerian company and shouldn’t be forced, whenever we have a project, to be attached to another Nigerian company before we execute. It doesn’t make sense to me.

First of all we are a Nigerian company, the engineers we have on board are all Nigerians and the companies we use are Nigerian companies. But we are still forced to set aside a certain sum or a certain activity again for a company to be determined by the board. I think there is need for a rethink, to look into the issues that are rising now and how it affects companies that are a 100 percent compliant. Moreso, there are those of us that even started it before the government thought of local content. There are many issues. We carry out our social responsibility, we also train. To be forced to contribute money again, for some training…is double take for me, I truly don’t understand it, but we are complying.

But we hear that there are companies that have benefitted from NCDF. Are they oil producing companies? What is the Nigerian content there when my entire 100 percent belongs to Nigeria?

Beside the NCD Fund what other thing do you see as a grey area in the Nigerian content Act? I am not looking out for grey areas my dear. I see the Nigerian content board as a very useful intervention. What I am trying to say is that, companies like ours that can be seen and proven to actually be doing what it has set out to do, should be commended. There should be a way to measure our activities so we don’t spend on the same thing twice.

That is what I am saying.

What is the prospect of your company for the next 5 years?

We would have registered some milestones as regards our diversification into gas. We are growing and we will continue to grow.

Orient Energy Review February, 2017 25

LOCAL CONTENT

Aveon Offshore: Clear Leader in Pioneering Indigenous Content Development

Engr. Joseph Duntoye, General Manager, Aveon Offshore Limited

A

veon Offshore is a fully-owned Nigerian company, established in 1999 to provide Engineering, Procurement, Construction and Fabrication services primarily to the oil and gas industry in Nigeria and the West African sub-region.

Formerly known as Grinaker-LTA Construction Nigeria Limited, Aveon Offshore is focused on providing construction services in Nigeria as well.

After its incorporation in 1999, and after registering with the Department of Petroleum Resources for the provision of Engineering and Construction services in the oil and gas sectors, Aveon Offshore Limited has grown and has become highly compliant with Nigerian Content in the last couple of years.

The company whose initial activities were in the field of fabrication and installation of plant and equipment, had ventured into the onshore and offshore oil and gas sectors, while it plans to diversify into infrastructure projects

28 Orient Energy Review February, 2017

related to power, water and transport.

This is especially with the expected liberalization policy of the President Muhammadu Buhari administration.

Today, Aveon is a specialist in in-country and local fabrication for the oil and gas sector and is vast in the area of fabrication for new installations, ranging from topside structures, jackets, metallic caissons, bridges, decks, helidecks, suction & driven piles, boat bumpers, protectors, riser guards, pipe spooling, flare/vent booms, equipment modules, skids, subsea manifolds, to PLEMS and FLEM, among others.

The company also supplies and fabricates pressure vessels, while its presence in the offshore petroleum sector involves the repairs and refurbishment of aging platforms / drilling rigs, supply of labour and equipment, and offshore operations support services, such as marine security/escort, mooring services, house boats and barges.

Given Aveon’s adherence to local content capacity building programme, only about five to seven per cent of its workforce is expatriates, while about 93 to 95 per cent are Nigerians.

Speaking on this development recently, General Manager (GM) of the company, Mr. Joseph Duntoye, said: “The reasons why we still have expatriates are diverse. First, like in orbital welding phase and duplex welding phase, it is not where you do quick fixes.

The expatriates help to start monitoring your progress once the work gets out.

Again, we have Nigerians also in the field, which means once they are good in what they are doing, the expatriates leave. That is the succession plan. It is not only in welding; in project control for instance, we have engineers and they are 100 per cent Nigerians.

On the strength of the local workforce, Duntoye continued: “In the workshop, when you have those welding stuffs that need to be done and which is new technology, some of these expatriates have actually done it in projects outside this country; so they come in. Our guys are with them and when our guys know what to do, the expatriates leave.

Apparently to underscore the significance of training in the realization of

corporate objective, the GM argued that manpower development of the staff is a cardinal policy the company holds dear to heart.

“We have a training manager who is also a Nigerian that gives on the job training for our staff, but most times we look at external training. That is why they should have a lot of grip on what they should know. Also, imagine you have one expatriate that has done a lot of these jobs before he comes to Nigeria; before he comes into the yard, you want such person for that short period so that your guys can learn.

“Even in crane, a lot of things we do have to do with heavy lift; so we buy a new crane. The company comes and assemble it; stay for a month or two and our guys are on the crane. The biggest crane we have now is about 350 tonnes and with the mass at the back, it can lift 550 tonnes load. There are lots of equipments like that on site, like the water jets. We brought that from the US. The company came in, installed and I think stayed for like 3 or 4 weeks. Now Nigerians are the managing it.”

In its years of existence thus far, some of the major projects the company had undertaken include the fabrication of subsea structures for Bonga Northwest; fabrication of seabed structures and installation aids for Usan UFR; Adanga North production separator pressure vessel; and subsea structures for Erha North.

Others are fabrication of OFQ jacket/ Utility deck and helideck for Ofon; Onshore Asset Gas Management (OAGM); subsea production systems for Egina and FPSO topside fabrication for Akpo.

Aveon is currently working on the Egina Buoy and it is the first of its kind to be fabricated in the country. It is a part of the last phase of the Egina Subsea Production Systems project-the $3.3 billion-worth Egina FPSO, billed to be completed by the last quarter of 2017.

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LOCAL CONTENT In a recent visit to the company, Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Engr. Simbi Kesiye Wabote, commended the operations of Aveon Offshore Limited, on its delivery of the Egina FPSO structures and the sound state of its facility.

In the company of some departmental heads of the Board, alongside Nigerian Content Development representatives from Total Exploration and Production (E&P) Nigeria Limited ‎and Nigerian Agip Oil Company Limited, made this statement while on a recent visit to the Port Harcourt facility of Aveon Offshore Limited as part of its renewed bid to ascertain the competencies of Nigerian companies.

As the delegates toured the fabrication yard, Wabote observed the level of investment in technology and civil infrastructure which included vertical and horizontal boring machines, water-jet laser-cutting machine, a 350-ton crane, 450-ton crane with superlift, state of the art machining workshop, a 35 metres slipway for the off-loading of buoy structures, and a couple of other upgrades.

“This is one fabrication yard that we think is doing very well. They are wholly indigenous, fully established in the Niger Delta, creating employment for the Niger-Delta people and also supporting the oil and gas industry, Wabote said.

“Aveon Offshore is a creation of the NCDMB. They have kept faith with the Board, and have invested. Based on that, the Board has continued to support them to do most of the fabrication jobs that hitherto were done outside Nigeria.

This has been an impressive story.

All the International Oil Companies Aveon worked for have given a positive feedback on Aveon Offshore. Even the major contractors that sub-contracts jobs to them; the likes of Saipem, have also commended their activities. We are seeing a company that has thought through the entire process in terms of HSE, timely delivery, quality, and have stayed committed to it,” added the NCDMB boss.

In spite of its giant strides the company still have a soft spot for it host communities and workers. Aveon believes that everybody has a stake in its business venture and that communities have actually been good business partners.

Duntoye said, “You may ask ‘are the communities investing money?’ What they are investing, which is peace, is more than money. And what we do is that we don’t wait until things happen before we start to solve the problem; we are proactive.

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“We sat with them and we did what is called a Memorandum of Understanding (MoU) which is in every two years. This is because what the community wants from any company in their locality is employment and the opportunity to do business.”

Duntoye also harped on the importance of having all stakeholders on board, saying “the traditional rulers that cannot be part of the business, even if you are not giving them money, you can bring simple contract to them and also to those people that are business-minded.

Two, as workers, we believe what we cherish most is the workforce; the equipment will be there but a happy workforce is what will spur your production. There is what is called condition of service in the workforce and it is explicit; touched on training, remuneration, vacation. The fact that my office is even here gives us that contact all the time. I try to meet with them almost every week.

We don’t wait, like I said, for things to happen.”

The GM further said in a statement that “Medical facility is provided. You look at their concern and address them.

Obviously, the expectation is very high and in the industry now there is a kind of slow activity. So how do you help to make sure they keep their job is what we should be looking at.

“We fill their purse and they also fill us.

The mission of the shareholders is to get offshore and start installation work. The design for a vessel has been done but like I told you we need work and money and also the cooperation of the community to actualize that.

“Even the security agents are part of it. We give scholarships to students; we reach out to the women group. We also look at governmental affairs and agencies of government. We try to follow them and know about their regulations.

We do things transparently and I think that is what has been keeping us going.

“And when you talk about Aveon Offshore outside, you have to interview one or two people from the community. What you are likely to hear will be something like ‘that company is well structured and we can see their impact.’

“Like I told you, I won’t be looking for a hand that will do a job; if I know the community person can do it, I don’t need to go far away to do it; it makes it easier for you. A lot of them from the community are managers in this company probably because we are indigenous, probably, it is also helping.”

However, despite all the positive reviews, the company is not exempted from the challenges in its operational environment, chief among which is finance.

Commenting on challenge of accessing finance and what the company is doing to surmount same, Duntoye said, “There is no business concern that wants to expand that will not have challenges with financing. It could be your working capital, and your payment is not coming as it should be from your clients. However, to address this, we bank with a lot of financial institutions and it has been up and about but it is something that we have been able to keep above board.”

“To make your project work, you point in your invoice; you tell your client the true situation. There will be back and forth, there will be challenges. Meanwhile our bankers are also there to see what we are doing, to know the projects we have at hand and to show up when it is required.

“We believe that consultation with stakeholders also matters. But by and large, things have been okay so far. If not, we would have been out of business. But obviously, it is a big concern, because you need money to pay salaries, buy consumables, and to equip yourself.

“The yard was not like this when the shareholders took over. A lot of money, above $50 million has been spent for equipment, for land, for upgrading of the yard,” he added.

On the issue of high interest rate, Duntoye said, “We are not operating differently from other companies. Once it is above 10, you say double digit. I think there should be layers, once it is above 20 it is not the same thing as 10; so when you say double digits it doesn’t portray what you go through and it is about late 20’s now getting to 30 per cent, but what do one do?”

Duntoye lamented the inability of Aveon to access the Nigeria Content Development Fund, despite the fact that it is not defaulting in its contributions. He called on the authorities to help remove the hindrances to accessing the fund.

On plans for the future, Duntoye said: “I see a bright future, the evidence are there. You don’t have to start looking at what will work because to build a car in this country for example, I see 100% home built Nigerian cars but I think that shouldn’t be a problem to do because you know how it works, you know what you need.

“For us it is bright, but I think probably we need to get our acts together; the executives, the legislature, even from the presidency to the governors as well as well-meaning Nigerians.”

Orient Energy Review February, 2017 29

AVEON OFFSHORE LIMITED A Wholly Owned Nigerian Company with World Class Service Delivery

The Nigerian Content Development and Monitoring Board (NCDMB) Executive Secretary Engr. Simbi Wabote, his senior management team and representatives of IOCs visit the Aveon Offshore facility in Port Harcourt, Rivers State.

During the facility tour by the Executive secretary of the Nigerian Content Development and Monitoring Board, in Port Harcourt, Rivers state.

L-R: Mr. Tein George- Chairman Aveon ,Engr. Simbi Wabote, Engr. Joseph Duntoye General manager For Aveon Offshore

Jackets

Piping Spools Prefabrication

Decks and Piles

Piping Spools Prefabrication

Pressure Vessels

Pressure Vessels

Subsea /Manifolds1

Bridges

Jumpers

WAIPEC 2017 WEST AFRICAN INTERNATIONAL PETROLEUM EXHIBITION AND CONFERENCE

30 Orient Energy Review February, 2017

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PHOTO GALLERY

NOGOF 2017

OGTAN INAUGRATION

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Orient Energy Review February, 2017 31

COVER STORY

Nigeria’s Deepwaters: Blue Ocean for Investors, Pathway to Industrialization

By Jerome Onoja Godspower Ike

N

igeria’s deepwater petroleum sector has remained largely unexplored, with only a handful of companies currently making giant strides in the sector. This is irrespective of the fact that the sector holds great opportunities for production and reserves accretion, as well as revenue increase.

This article seeks to explore the Nigerian deepwater space, the many initiatives introduced by government to attract investments into the sector and the numerous opportunities that abound therein.

Nigeria, despite its many efforts, is yet to fully explore the potentials of its deepwater resources, irrespective of the fact that the deepwater sector of the petroleum industry holds vast opportunities for reserves accretion, increased revenue genera-

32

tion and foreign exchange accumulation among others.

In particular, Shell stated that beneath the world’s oceans – in waters ranging from a few hundred to several thousand metres deep – lie vast supplies of oil and natural gas which have the potential to boost economic growth and play a vital role in the future energy mix.

The company disclosed that freezing temperatures, immense water pressure and pitch darkness all make producing oil and gas from deep water a major technical challenge.

However, despite these challenges, the United States Energy Information Agency, EIA, said global offshore oil production, including lease condensate and hydrocarbon gas liquids, from deepwater projects reached 9.3 million barrels per day (b/d) in 2015.

Orient Energy Review February, 2017

According to the EIA, deepwater production, or production in water of depths greater than 125 meters, had increased 25 per cent from nearly seven million barrels per day a decade ago.

It stated that shallow water had been relatively less expensive and less technically challenging for operators to explore and drill, but changing economics and the exhaustion of some shallow offshore resources had helped to push producers to deepwater or, in some areas, ultra-deepwater (at depths of 1,500 meters or more) resources.

It explained that the share of offshore production from shallow water in 2015 was 64 per cent, the lowest on record, while globally,

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COVER STORY

offshore oil production accounted for about 30% of total oil production over the past decade.

In 2015, it noted that offshore production was 29 per cent of total global production, a moderate decrease from 32 per cent in 2005.

The EIA also disclosed that advancements in drilling technology, dynamic positioning equipment, and floating production and drilling units have made prospects viable that were previously unreachable.

It said, “Although technological advancements have made new areas accessible, deepwater projects require more investment and time compared to shallow waters or onshore developments. As a result, most nations with offshore assets operate only in shallow water.

“In areas with deepwater operations, production has grown significantly, and in many cases overtaken shallow-water production. The majority It is preposof deepwater or ultra-deepwater terous and production occurs in four countries: Brazil, the United States, Angola, damaging to and Norway. Each of these countries has realized an increasing share of pay humongous crude oil production from deepwater amount of monor ultra-deepwater projects over the previous decade. The United States ey for overseas and Brazil together account for more than 90% of global ultra-deepwater training of divproduction, with ultra-deepwater production expected to increase in ers in deepwater 2016 and 2017 in both countries.” simulation” The EIA said Brazil leads the world in the development of deepwater and ultra-deepwater project, and had increased deep and or ultra-deepwater production from 1.3 million barrels per day in 2005 to 2.2 million barrels per day in 2015. offshore oil production accounted An increasing amount of Brazil’s for about 30% of total oil produc- production, according to the US tion over the past decade. agency, comes from presalt resources In 2015, it noted that offshore found under thick layers of salt at production was 29 per cent of total extreme depths. global production, a moderate de- The EIA also noted that the coast crease from 32 per cent in 2005. of Angola shares similar geologic The EIA also disclosed that adfeatures with the coast of Brazil vancements in drilling technology, because of the separation of the Afdynamic positioning equipment, rican and South American tectonic and floating production and plates during the Early Cretaceous drilling units have made prospects period, around 150 million years ago, viable that were previously unadding that these geological similarreachable. ities have led producers in Angola to target several major basins for It said, “Although technological presalt exploration. advancements have made new areas accessible, deepwater projects In Nigeria, according to the Draft require more investment and time National Petroleum Policy, from the compared to shallow waters or very beginning of oil exploration in onshore developments. As a result, 1937 until early 1993, virtually all most nations with offshore assets exploration and production activities operate only in shallow water.

“

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were restricted to land and swamps.

It stated that where prospecting ventured offshore, it was in areas not greater than 200 meters water depths.

To address this, the Nigerian Government opened up a new frontier in oil and gas exploration, heralding the bright prospects of a promising future, by allocating some offshore blocks in water depths reaching 2,500 metres.

It noted that these deep-water depths and plans for depths even greater than 2,500m would undoubtedly impact positively on the country’s production and reserves.

It added that although these deep-water operations are technically challenging and very capital intensive, experienced multinational companies had been awarded some deep offshore blocks and even ultra-deep concessions.

In its bid to unlock Nigeria’s potentials in Deep water, Shell Nigeria Exploration and Production Company Limited (SNEPCo), which carries out Shell Companies in Nigeria’s offshore activities, is drawing on Shell’s global industry-leading deep-water expertise as well as its Nigerian engineers and technicians to deliver safe, world-class and economic projects that provide jobs and training for local people.

The company said the deep waters of the Gulf of Guinea hold rich oil and gas resources, stating that tapping into these fields will deliver vital energy to help meet growing energy demand in Nigeria and beyond.

Over the past decades, according to SNEPCo, industry-wide production from deep-water fields had added more than 800,000 barrels per day to Nigeria’s total oil output, which currently stands at around 2.1 million barrels per day.

The Nigerian Government via its short and medium term priorities aimed at the development of Nigeria’s oil and gas sector, termed the ‘7 Big Wins’, has set ambitious targets to increase total oil production in the next few years with a plan to significantly increasing deep-water exploration and production.

Currently, there are a number of deepwater projects going on or about to commence in the country, while a number of the projects had been concluded and had started producing.

Orient Energy Review February, 2017 33

COVER STORY

It was reported that the offshore market in Nigeria had been around $12 billion from 2010 to 2012 with Usan (ExxonMobil), Bonga (Shell), Akpo (Total) and Agbami-Ekoli (Chevron) being major projects, among others.

The Nigerian Oil and Gas Journal disclosed that from 2012 to 2014 the market grew to $17 billion, with an expected decline in 2016.

In later years’ projects like Egina, Bonga-Southwest- Aporo and Etan/Zabazaba are expected to drive investments to a level of $20 billion. Producing fields were estimated to account for half of the offshore market in Nigeria from 2016, with the largest being Agbami-Ekoli, Bonga, Usan, Akpo and Erha (ExxonMobil).

Major international oil companies present offshore Nigeria are ExxonMobil, Shell, Chevron, Total, and Eni. ExxonMobil is currently developing future phases of the producing Erha field. Shell has two projects, the Forcados Yokri redevelopment and the large Bonga Southwest project.

Total is currently developing the Egina field and Eni’s Etan/Zabazaba field is expected to come on-stream before 2020.

In addition, Chevron and several smaller exploration and production (E&P) companies have smaller new projects expected to be initiated before 2020.

Some of the projects, which are scheduled to come on stream in 2020, are Bonga Southwest and Aparo, with a capacity of 225,000 barrels per day (bpd); and Bonga North, with a capacity of 100,000bpd, all belonging to Shell.

Others are Eni’s Zabazaba-Etan, 120,000bpd capacity; ExxonMobil’ s Bosi, 140,000bpd; Satellite Field Development Phase Two, 80,000bpd and Uge 110,000bpd; and Chevron’s Nsiko, with a 100,000bpd capacity.

Zabazaba/Etan, which is Oil Prospecting License (OPL) 245 is located on the southern edge of the Niger Delta, in water depths ranging from 1,700 to 2,000 metres and is operated by Eni. The block holds significant discovered

34

hydrocarbon reserves and is thought to be very prospective, with two oil and gas discoveries already made on the block. Etan and Zabazaba were discovered in 2005 and 2006 respectively.

Eni plans to develop the Etan and Zabazaba fields in phases with subsea wells tied-back to a leased floating production, storage, and offloading (FPSO) vessel. The project is currently in the early tender phase, The first phase of the development is expected to use a Floating, Production, Storage and Offloading vessel (FPSO) on the Etan field and the second phase an FPSO on the Zabazaba field. The converted Etan FPSO will have a capacity of 120.000 barrels per day. The project is anticipated to entail investments of around $10 billion with potential startup of Etan in 2018.

Bonga Southwest/Aparo (BSWA) field is located in the Gulf of Guinea offshore Nigeria. The field location is about 130 kilometers offshore in water depths of 1160 metres to 1340m. The field straddles OML 118, 132, 140 block boundaries, while the host facilities would be located in OML 118.

Existing infrastructure around the area is at Bonga Main, which is some 19km Northeast of BSWA, but offers limited synergy. The project objective is to produce about 800 million barrels, developed in two phases (Phase 1 + 2) over 25 years.

The operator, Shell Nigeria Exploration and Production Company, SNEPCO, said the Front-End Engineering Design (FEED) and detailed engineering of the project is to be performed in-country, with 50 per cent of the topsides modules (by weight) to be fabricated in-country and the FPSO integration also to be performed in-country.

The $12 billion project by Shell was initially planned to reach final investment decision in 2015/2016 with first oil expected in 2020/2021. The project is now facing indefinite delays as commercial bids for contracts related to FPSO and subsea work were too high, and will be retendered. Uncertainties in the fiscal framework are also highlighted as a reason for a possible project delay.

However, Shell is optimistic of reaching a potential final investment decision earliest in 2017. The development concept comprises an FPSO unit with nameplate oil processing capacity of 225.000 bblpd of oil and 270 million cubic feet per day of gas.

The field will also need a 44-well subsea production system.

Orient Energy Review February, 2017

Another major deepwater project in Nigeria is the Egina project. Located some 130km off the coast of Nigeria at water depths of more than 1,500 metres, the Egina oil field is one of Total Nigeria’s most ambitious ultra-deep offshore projects.

For the most part, the company said the project is being developed locally to accelerate the pace of technology transfer and expand the local industrial fabric.

The projected production capacity of the Egina field is 200,000 barrels per day and the expected date of commencement is 2018. Total, which is the operator of the field, owns 24 per cent interest in the field and its partners in the project are CNOOC and Petrobras Sapetro.

Total said it began the drilling program on the Egina field in December 2014, stating that this intense project will keep two rigs busy for a total of 3,000 days.

It added that five out of the planned 44 subsea wells have already been drilled, at water depths of between 1,400 m and 1,700 m, and 13 more will be completed when the field comes on stream.

It said the wells would be connected, using umbilicals and risers, to an FPSO designed to hold 2.3 million barrels of oil.

Meanwhile, Intsok, a Norwegian oil and gas firm, in a report titled, ‘Nigeria offshore Market Report 2016 to 2020,’ said the largest producing fields in 2014 were Agbami-Ekoli, Bonga (main field), Akpo, Usan, Erha and Ubit. These fields, the company said, are expected to provide the majority of production towards 2020, adding that in 2020, fields currently under development are expected to constitute 25% of the offshore production in Nigeria.

According to the report, the largest contributors are the projects Egina, Sonam, Forcados Yokri (redevelopment) and Erha Satellite development.

It stated that Samsung and Ladol contracted for the Egina FPSO, is planning to invest in a yard dedicated to integration of floating production vessels in Nigeria However, it said, “The future of large new investment projects in Nigeria remains uncertain as a result of the legislative stand-still in the country, the security situation and demanding local content requirements. Relatively few new large projects are expected to reach FID before 2020.

“

Although technolocal advancements have made new areas accessible, deepwater projects require more investment and time compared to shallow waters or onshore developments.

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COVER STORY

“The main projects are Bonga-Southwest-Aparo and Etan/Zabazaba. The projected start-up date for many of the new projects has been pushed out in time because of the uncertainties mentioned above.”

Managing Director of Aiteo, Mr. Chike Onyejekwe, stated that Nigeria’s deepwater potentials is capable of generating about $3 billion yearly, besides producing up to 600,000 barrels per day and 200,000 jobs, which is equivalent to growing the oil and gas industry by 30 per cent.

He estimated that the deepwater operators are spending over $5 billion yearly, hence the need for a fair legislative document that would encourage further investment in the sector.

A top official of SNEPCo, Stefan Vos De Wael stated that, with the huge potential posed in the deepwater basins in Nigeria, the IOCs are planning to invest about $165 billion into the industry in the next five years.

According to him, the investment will go into new oil and gas development and infrastructure that would boost production and development of industries’ competences.

The United States Energy Information Administration (EIA), stated that IOCs participating in onshore and shallow water oil projects in the Niger Delta region became affected by the instability in the region, forcing a general trend for IOCs to sell their interests in onshore oil projects.

Some of the already divested blocks include Oil Mining Licences (OMLs) 3, 38, 41, 26, 30, 34, 40 and 42. Other which would have gone at the time of this report include: OMLs 13, 16, 25, 60, 61, 62, 63, 131 and OPL 214. Today, our estimates put oil block ownership by Nigerian companies at over 100 while ownership of marginal fields by Nigerian companies is over 30.

Shell had stated that oil theft incidents in the country has cost it an estimated $700m, a figure hotly disputed by the federal government and the NNPC. Overall, many of the assets being sold are mature assets onshore the Niger Delta region,

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which are naturally more vulnerable to operational and security problems in the region.

To further drive the development of deepwater projects, Nigeria’s Minister of State for Petroleum Resources, Mr. Ibe Kachikwu, had commenced a series of roadshows to various countries in a bid to mobilize investment in the Nigerian petroleum industry, especially in deepwater projects.

Kachikwu said the roadshows are aimed at raising bulk funds for the Federal Government through successful leveraging of some of the country’s oil assets, raising investments through positive policy mixes and opening of all sectors to greater private sector participation and funding.

Kachikwu also said the key target was to raise $5 billion in the short term, within 1 year, and $15 billion to $20 billion in the mid-term, between two and three years.

To achieve this, Kachikwu said the Federal Government is seeking to cut contract approval times from two years to three to six months, while he said the government hopes to reduce strangle hold on oil sector by the Federal Government and cut down over supervision.

Kachikwu’s visit to China saw the signing of a memorandum of understanding (MOU) worth over $80 billion, between the country and Nigeria. The funds were earmarked to be spent on investments in the upstream sector, as well as in other areas, such as in oil and gas infrastructure, pipelines, refineries, power and facility refurbishments.

In another visit to India, Kachikwu was able to secure a $15 billion investment for the country. Both countries agreed to work on a Memorandum of Understanding to facilitate investments by India in the Nigerian oil and gas sector and specifically in areas such as Term Contract, participation of Indian companies in the refining sector, oil and gas marketing, upstream ventures, the development of gas infrastructure and in the training of oil and gas personnel in Nigeria.

of investments in Nigeria’s Oil and Gas sector.

In his latest investment drive, Kachikwu visited ExxonMobil in the United States, where he secured the commitment of the company to increase its investment in Nigeria.

However, investing billions of dollars that ends up in capital flight isn’t the ultimate model. The attempt by indigenous companies to participate in closing the investment gap on the supply chain of services in deep and ultra deep water terrain is commendable; though it still leaves a huge blue ocean opportunity for foreign investing community to tap from.

Some Nigerians have invested in purchase of equipment and training facilities and formed technical alliances with partners in developed climes. The General Manager of Aveon Offshore, Joseph Duntoye empasised in an interview that Aveon Offshore possess pioneering ideas and advanced methods in proffering state-of-the art solutions in engineering with proven competence in seabed to surface engineering and project services in SURF (Structures, Umblicals, Risers and Flowlines) and Subsea engineering (platforms, pipelines and equipment).

Mr Anthony Okolo, of Royal Niger believes Nigerian companies can now render services in subsea maintenance of structures and should be given the right of first refusal on contracts. He rued a missed opportunity with an IOC and blamed it on the continued lip service some companies pay local content development without adequate assessment of capacities and capabilities.

“It is preposterous and damaging to pay humongous amount of money for overseas training of divers in deepwater simulation” when his company has the same world-class facility in Nigeria, says Mr Emmanuel Onyekwena, Managing Director of Tolmann, a PETAN company.

However, deep offshore drilling has not seen convincing participation by indigenous firms and the level is abysmally low.

Kachikwu also visited Italy, where where he got commitment from Italy to invest in refining in Nigeria and also in other sectors of the economy.

He met with the Ministers of Foreign Affairs and Economic Development of Italy to formalize the new trend of cooperation between oil majors and Nigeria and also met with 10 other oil and gas companies in Italy to further expand the partners

Orient Energy Review February, 2017 35

COVER STORY

It bears repetition to state that the largest FPSO topside integration in sub-Sahara Africa would be carried out at the Lagos Deep Offshore Logistics, sometime in the third quarter of this year. The LADOL fabrication base is positioned to attract over $10 billion dollars worth of investment into the country.

Fabricating 15,000 tons for Egina FPSO is a significant progression from where the industry was three years ago, when a few Nigerian companies participated in the construction of six NLNG vessels contracted to Samsung Heavy Industry and Hyundai Heavy Industry by supplying cables, paints and anodes valued at just $10 million. In 2016, that was followed by the 2,700 ton Sonam Non-Associated Gas Wellhead Platform (Sonam NWP) built by Hyundai Heavy Industries in partnership with Nigerdock in Lagos.

On the demands for deep offshore vessel maintenance, the Executive Secretary of the Nigerian Content Development and Monitoring Board, Mr Simbi Wabote, recently confirmed that the industry would save millions of dollars in mainte-

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nance of vessels, particularly now that the nation can boast of four dry docks in Port Harcourt in addition to the two in Lagos – Nigerdock and Naval dockyards.

In spite of these developments, the entire hull side of an FPSO still remains a “black box”. That in itself is another huge investment and knowledge gap to be filled.

To support the drive for investment promotion, the Federal Government, in the proposed Draft National Petroleum Policy, said it intends to develop upstream resources, through maximising production from existing production blocks; reduce Niger Delta insecurity; ensure accountability of production; maximise additions to reserves and future production.

In addition, it intends to diversify resource base, and identify low cost resources; allocate oil licences and leases under a transparent process among others.

The Federal Government is also considering setting up an Investment Promotion Office for the petroleum industry, which would provide technical support in promoting a project; serve as a centre of exper-

tise on upstream and downstream petroleum opportunities within Nigeria, which will work with the Nigeria Investment Promotion Council (NIPC).

It is also expected to provide a database of projects and investment opportunities, as well as an informative website and also provide support with promotions and roadshows.

With the current initiative proposed by the Federal Government and the vast opportunities in the deepwater segment of the Nigerian petroleum industry, investors stand to gain from investing in the sector.

Investors have been assured of safety and high return on their investments, while their investments would further help develop Nigeria’s deepwater segment, boost the country’s crude oil and gas production and reserves and invariably, shore up the country’s revenue base.

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WOMEN IN ENERGY

‘Women Are Capable Of Doing So Much More’ – Allanah encouraged me to learn. So, I believe that if you are teachable and willing to learn, you can do exploits.

OER: How did you rise through the ranks?

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rs. Sonye Allanah, a graduate of Foreign Languages served in Nigerian embassies in Paris, Dakar, Bonn and Berlin and was the first female Director of Protocol to former President Olusegun Obasanjo. A top-notch civil servant before pitching tent with the Oil and Gas Industry, Mrs. Allanah is currently Deputy General Manager, DGM (Government Relations), Total E &P Nigeria Ltd. and Member, Advisory Board, She Forum Africa. In this exclusive interview with Orient Energy Review (OER), the DGM speaks on her journey to the top, the marginalisation of women, how they can cope in a male-dominated industry among other sundry issues.

Excerpt!

OER: May we meet you madam?

Allanah: My name is Sonye Allanah.

I started in the civil service actually.

I was headhunted by Total when I was already a senior officer because www.orientenergyreview.com

they wanted to start a government relations unit. They needed someone with in-depth knowledge of government to come on board to head the unit. And that’s how I joined the industry.

OER: Tell us about the journey It was an interesting journey; a big step virtually into the unknown.

The thing is that when you have a good foundation, you can actually function anywhere. I think the woman by her nature is multi-faceted, although, sometimes, what we lack is the platform to express ourselves. So you never know what you can do until you are challenged.

Initially when I heard it was the Oil and Gas Industry, I was a bit uncomfortable because I knew nothing, as it were, about oil and gas.

All I knew was palm oil, groundnut oil and whatever (general laughter). But I had a very supportive and inspiring boss at the time that

I started as a manager and now I am the Deputy General Manager. I have handled Public Affairs in the company in relations to conferences such as this (The Nigerian Oil and Gas, NOG, Conference), sponsorships and related issues. So, it has been quite interesting. Anything to do with the public, the public space and what I see lacking in the industry is that whereas people have the technical skills, they don’t always have the soft skills to compliment their technical know-how. We need to strike a balance a bit more in this area because by the time you grow through the ranks in the technical field maybe as an engineer or a driller into the management level, those skills alone are no longer enough. This is where soft skills come in to smoothen the rough edges. Soft skills play a major part in being influential, to speak to the decision makers and to executives in government. To do this, you need diplomatic skills and tact to influence decisions, one way or the other. How do you now manage interpersonal skills, gain access and sustain relationships? I can say therefore that we are the bridge between government and the industry. We take the message from government to the industry and vice-versa. We have found that at both ends of the spectrum, there are lots of misconceptions.

OER: So, how easy or difficult was it for you to become the Deputy General Manager for Total, one of the biggest IOCs in Nigeria?

Allanah: I had many years of experience in the civil service as I said earlier and also a very supportive boss. That gave me the enabling environment to express and develop myself and of course, visible results, and positive feedback.

Orient Energy Review February, 2017 37

WOMEN IN ENERGY OER: What is your experience in a male-dominated world that the Nigerian Oil and Gas Industry is? What were the obstacles you had to surmount, the competition from colleagues and all that?

Allanah: I find it sad really that things haven’t changed much. It is a global phenomenon that in the boardroom, you still find very few or none at all. The figures are fluctuating and now shrinking. I remember making a presentation about two years ago on the occasion of the International Women’s Day about the UN initiative for stepping up gender equality by the year 2020. I made a presentation using pie-charts showing the ratio of male-female in the company, top executives and what have you. This is a very thin slice of the cake. It is sad and I believe we can do so much more. Very often, women are given positions in form of tokenism. It seems some corporations feel that once they’ve ticked the right box once a while, all righteousness has been fulfilled. This ought not to be because given the right platform and encouragement, we can excel. When a woman is in a position and sometimes she fails, they always use that as an example but when the men fail and they are failing every day, not much is said about it. We are still in a position where it seems we have to prove ourselves but the point is that we have a lot more to give than we’ve been given credit for.

OER: You may wish to throw more light on the woman having so much to give. It appears the woman is always in the spotlight, trying to prove herself time and again.

Allanah: There is lot of pressure, no doubt on the woman either subtle or overt because by our nature, we stand out. The woman is a very strong entity and in many respects, stronger than the man. She has the capacity to balance, juggle between children, home, husband, family, shopping and others needs. It is not an argument that intellectually, we hold our own. What remains is to be given the platform to speak and now we are in energy, how many women do we have here? A session (at the NOG) on local content just ended and there was only one woman on

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the panel. We want more representation because we can do more based on merit.

OER: Let’s talk about pressures you earlier alluded to. As a career woman, how have you managed to handle it given the place of family and work?

Allanah: If you want to be a career woman, you have to make up your mind and definitely, there are sacrifices to be made, otherwise you will wear yourself thin and collapse.

When my children were little, I had nannies but I also spent quality time with them especially during the weekends or whenever I could.

In Total, we have a crèches in our major locations in Port-Harcourt and Lagos to ensure that the nursing mother can be at ease because her child is well taken care of. She can go breastfeed her child and still give the input required of her. This is a massive support system that I think our company is bringing to the table. Apart from this, you still have to go shopping, wash clothes and or sometimes care for your sick child. Sometimes, when you return home, the children are sleeping but we do make up during weekends. It is about trying to strike a balance.

OER: You are working with a multi-national company that understands the work-life balance and equity, ready to help their staff to be focused and avoid distractions. And I think this is why they established crèche for the nursing mothers. Looking at Nigeria’s work sector, do you think career women like you are being properly attended to in the workplace?

Allanah: Generally speaking, women are disadvantaged and people don’t really care much about women. It is the big multi-national companies and like-minded organizations that are really taking these issues seriously. I don’t think much of the clarion call by the UN has been heard.

You hear it once in a year and the question is after the celebrations, what next? It is like the Mothers’ Day when everyone celebrates motherhood, but the following day it is business as usual. A lot can be done by government, the Ministry of Women Affairs, the NGOs, in terms of awareness to help the woman to achieve her full potential.

I believe so many women died with their talents buried with them. This is a shame because I always look at the woman like a flower, like a bud which contains lot of promise-flagrance, essence strength but if not allow to develop into full bloom; that will be the end of it.

OER: What are the challenges you face as a mother, wife and a career woman?

Allanah: It is the challenge of being profiled a woman, generally. You are looked at for being pretty but when it comes to serious things, they talk about the men. That is a challenge but by and large, this is not a problem in my organisation. It is not a yardstick at all. At international conferences, it is the same thing, whether black or white. You see one or two women and the rest are men.

OER: How were you able to adjust yourself to this reality?

Allanah: I am unapologetically a woman and I celebrate my gender.

I believe I know what I want and what I bring to the table. My quest each day is to bring value to the company. The day I think that I’m no longer useful is the day that I should withdraw. It is a mindset thing and I believe excellence is not a skill but an attitude. I approach everything with an attitude of excellence, knowing that I have something to give. When I retire to bed each night, I ask myself how I fared during the day. It’s a kind of self evaluation of trying to do better the next day or build on whatever platform I have to develop myself.

OER: What’s your advice to the up and coming women who look up to you as their role model?

Allanah: I would advise any woman not to be intimidated and to discover her passion in life. Continue to do your best and keep improving yourself. You will get to the top. Always remember that you have a voice; let it be heard.

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LOCAL CONTENT CHAMPIONS INDUSTRY NEWS

We have perfected the Horizontal Directional Drilling Technology – Okwuosa Oil and Gas Local Content Law three years ago. This Law has helped to institutionalize the development of sustainable local capacity in the Oil & Gas industry.

Emeka is the Group Chief Executive Officer of the following companies: Oilserv Limited, Frazimex Engineering Limited, Frazoil Exploration And Production (E & P) Limited, Frazpower Limited, Ekcel Farms Limited, Crown Energy Resources Limited

E

ngr. Emeka Okwuosa is a seasoned engineer, administrator, entrepreneur and a visionary with over 35 years of experience in engineering in the following areas: maintenance and operations, teaching, wireline logging and interpretation, seismic acquisition, processing and interpretation, pipeline engineering, procurement and construction (EPC), project management, drilling and drilling services.

Some of these activities span Europe, North Africa, West Africa, Gulf of Guinea/Central Africa and Indonesia.

Emeka worked in various capacities for Schlumberger in positions that spanned Field Engineer to Technical Manager in the following parts of the World; Europe (Pau, France, Scotland), North Africa (Libya), West Africa (Mauritania, Senegal, Cote D’Ivoire, Ghana), Gulf of Guinea/Central Africa (Nigeria, Benin Republic, Cameroun, Gabon, Congo and Angola) and Indonesia.

Together with other key practitioners in the Oil and Gas Engineering, Exploration and Production sectors, Emeka was instrumental to the enactment of

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Okwuosa, a key arrowhead in the evolution of the Nigerian Content Law, he continues to insist that building local capacity for the petroleum industry operations is of strategic security and economic importance for sustainable development of the country. In this exclusive interview with the Orient Energy Review team, the Oilserv Boss bares his mind on this and some other salient issues. Excerpts.

Can you tell us briefly about the numerous prospects from the massive 67 kilometres gas transmission pipeline that is close to completion right now?

The pipeline in question is what is termed OB3 (Obiafun, Obrikom to Oben)gas transmission system. It is a pipeline that is meant and conceived to move gas from the Eastern flank of Nigeria to the West and North. It kicks off from OBOB which is Agip concession all the way to Oben which is Shell concession. One section goes to join the Escravos, to Lagos pipeline and another section goes all the way up North to Ajaokuta. Now, the aim of that is primarily to move a total of 2 billion standard cubic of gas at full capacity and that is meant to be able

to add more capacity of gas to Lagos and the West; and to be able to feed the West African gas pipeline with more gas. The other one is to facilitate movement of gas to Ajaokuta, with a plan of doing the Ajaokuta to Kaduna, and to Kano pipeline.

At the Oloibiri lecture series recently, the PTDF DG fingered poor human capacity development as the bane of the oil and gas industry in Nigeria. Do you subscribe to this? If yes, how have you been able to address this challenge in your group of companies?

Yeah, he said it all.

The problem is poor human capacity building. The reason for this is that there has not been a concerted effort by all parties to address the issue holistically. There have been bits and pieces of activities towards that, of which one is the Nigerian Content initiative, which led to the NOGICD Act being managed by the NCDMB. I am sure you are aware that PETAN was the primary force behind the entire process. I remember clearly that the first time we had meeting with NAPIMS in 1992, not much was understood about it. We pushed it down the road and other stakeholders keyed into that and we finally had it. You may also be aware that the only entity that is a private organisation that sits on the board of the NCDMB is PETAN; and that is in recognition of what we’ve done. That is a way to build capacity.

Again, I’m glad to hear that PTDF is saying this and I would like PTDF to strive to add more effort in activities that will result in building more capacity. There are billions of Naira under the control of PTDF and I know they are trying to do something. We need to have them engaged in schemes and sustained effort to improve capacity.

Today, talk of training, and take what Oilserv and the likes are doing to improve capacity. Oilserv started in 1995 with just two persons; today, we have over 500 people working with us, apart from the fact that we have over a thousand indirect employees, a lot of contractors and suppliers. This is what called capacity building is and it can be aided if we have a system in place that guarantees us cheaper fund or ease of access to finance. Legislation can also be looked into to aid local content development.

Orient Energy Review February, 2017 39

LOCAL CONTENT CHAMPIONS INDUSTRY NEWS We still talk about local content law but I have not really seen in reality, any project I have gone for to tender against international companies that I won without being the lowest bidder. You can’t win if you are not the lowest bidder! The point I am making is that, we need to address this issue and be able to know that a local company that is operating in Nigeria will build up capacity, make revenue and retain the revenue in Nigeria. An IOC working in Nigeria, on the other hand, will have to send the money back to where it is coming from.

This is natural and we can’t blame them. They are not concerned about capacity building, no matter what anybody says. So, we have to deliberately encourage capacity building by helping to build local companies the right way, not brief-case-carrying companies.

Back to OB3, can you give us in numbers, how many Nigerian local engineers this project has been able to give gainful employment?

Let me start by telling you how many engineers we have been able to train since OB3 started and in line with Oilserv training programme. We have what we call Graduate Training Programme (GTP). We have graduated 25 to 30 young engineers yearly, consistently for the last four years, and they started out without experience. We make them go through a one-year training programme and expose them to work experience. If you add that up, that is more than a hundred engineers already trained.

Apart from the fact that this project is at its peak, look at the staff matrix, we have more than 200 out of which engineers are about 30 direct engineers working in there. If you look at it, you can tell the story. This is apart from the fact that we have operators, welders that we train and graduate every year. But that does not mean that we employ all of them after training. We give them certificates after absorbing those the project can take.

With a view to OB3, what challenges are peculiar to this project and how have you been able to surmount same?

Every project comes with its challenges and OB3 is not different.

But generally, the challenges we faced that are not peculiar to OB3 have to do with being able to get 40

Orient Energy Review February, 2017

the right quality of staff for certain category of work. Many times, we get them and train them for the task we have. Another thing you just alluded to is finance. Finance is a major challenge. It will interest you to know that banks in Nigeria hardly give loan facility. I can tell you that 90 per cent of the time, you will not get any loan facility from the banks. When you finally get them to look at your proposal, the annual interest rate in naira of about 30 per cent is what you have to pay back in addition to the principal. This is not feasible. It is a death knell. If you decide to keep the money for one year before repaying, you have lost 30 per cent of the value. Which project can you execute genuinely that is guaranteed to fetch you 30 per cent profit? So, it is a problem. It is so bad that that the dollar facility attracts between 16-18 per cent per annum in some cases. You can’t fund project on your own. What you do is project planning and financial model; you can then look at the gap as far as project funding is concerned. When you get that, you repay as soon as you get your revenue. The other one is the community management. It is getting worse because there is no rule of law. There is the issue of general insecurity and this translates to extra cost in running the projects.

This brings us to the issue of funding local content and local projects in the energy sector. As one of the champions of local content, have our expectations been met thus far?

The local content idea is very good. By and large, I think it has progressed in line with the original intent. The current management of NCDMB is quite competent.

The current Executive Secretary, Engineer Simbi Wabote is quite knowledgeable and focused. But of course, he has a lot of work to do because the way to improve a system is not to sit and carry on with the same activities over and over.

I believe he is doing a lot to tweak certain practices to enable us get better results. You may have heard him speak recently about how to ensure that the 1 percent deduction (NCF) is utilised to build capacity because, from inception, a lot of us that carriedout these projects had 1 percent of our revenues deducted. Apart from the ones deducted directly from the IOCs and the NOCs, the NCDMB have not done

much previously to utilise this fund in building capacity. Today, we are seeing a turning point by the statements and actions of the Executive Secretary. There is no point collecting the money and not utilising same well for the intended purpose, while the Nigerian companies that need loans cannot access them. It is possible to fund companies and be able to get these monies repaid complete with interests.

Senator Lee Maeba stated at the NOG that banks are mandated by the Act to have 10 per cent of the IOCs revenue domiciled in Nigerian banks to fund local companies.

We hear all this but we don’t see that happen. Again, that is the preserve of the Central Bank of Nigeria (CBN) to implement. So, I think this is a question you have to raise with the CBN because if they are up to it, they will know the implication of implementing it. It will bring a lot of capacity into the country. The bottom line is that, it is beyond us because we cannot force the banks to do this. We don’t regulate the banks and neither does the NCDMB. It is the preserve of the CBN. Please tell us about the Nano-technology drive that was launched in UNN last year. We were there to cover it. For us, it’s amazing to see an oil company championing that.

What informed your decision?

It is the same story of capacity building and development of technology. You may not be aware that Oilserv has done so much in the development of technology that relates to oil and gas production and transportation in the past 15 years.

Take for instance, Oilserv built the longest cofferdam for the repairs of 28 inch pipelines of 76 metres in the swamp. Prior to that, the only company that had done this was Wilbros. Wilbros had not done more than 30 metres; we did 76 metres, and it was delivered by100 per cent Nigerian workforce! This was done with our own equipment; with zero fatality, zero incidents and no safety issue. Today, Oilserv is the primary company that has perfected the horizontal directional drilling technology.

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LOCAL CONTENT CHAMPIONS INDUSTRY NEWS

Few other companies in Nigeria are also doing it but with great difficulties-they get stuck but we have perfected it. We just finished the second river crossing of 48inch pipeline. For you to do this with HDD you have to drill and rim to 62 inches, more than 5 feet diameter for a kilometre under water; we have done that. Back to your question, it is in the same light that we looked at how we can develop capacity and development of capacity is not restricted to the industry, it is across board. We figured out clearly that working closely with the universities would make a lot of difference. We can help them build capacity. So, we decided to fund and sponsor activities in nano-technology. You may not be aware that nano-technology is still a young technology but its application in the oil and gas industry is vast. I give you an example! By using nano-technology, you can develop drilling bits that that can last 10 times longer. You can develop communication systems when you drill your well so that you can feed up from down hole certain information that you cannot do under normal circumstance.

You can also use nano-technology to improve your mud system so that you can have mud that can sustain drilling programs as far as different formations are concerned down hole. So for the past 5 years, we have spent quite a lot of money to sponsor them, develop their departments. We help them go overseas to study in the universities and to learn what obtains there while being be able to have them develop that department and to build Nano-technology beyond the

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conceptual level, to applying the same in the industry.

Gas commercialization in the country is a big problem today. What specific recommendations would you want the country to adopt to arrest the situation?

There are no hard and fast rules, but we need to look at the general principles of gas production, transportation and utilization and put these side by side with our local situation. The bottom line is that Nigeria can never develop without building gas infrastructure to be able to provide source of energy that is available and affordable, and that is cleaner than oil. My understanding has always been that gas is not useful unless you build infrastructure to transport it. It is not like oil that you can store in containers, in tanks and what have you. You cannot store gas. As you produce, you transport and utilise.

And if you cannot transport and utilise, you have to flare or you shutdown the wells if you cannot flare, in the case of associated gas.

What this means is that we have gas being flared but we don’t have gas to use. It means there is a gap between gas production and utilisation and what constitutes this is the transport system, which is the pipeline system. If we can build the pipeline system with an eye for the future and not just what we need now, Nigeria will solve her problem.

(Cuts in)‌What about virtual pipelines?

physical pipelines only. We are investing a lot in virtual pipelines, in macro LNG, in nano LNG, in mini LNG systems. You will see the result of that in the next two years. We will be able to process the gas, liquefy, transport it and inject it into pipelines or to the end users as it were. So, virtual pipeline is part of the whole process.

What is your model on host community and oil and gas company relationship? Which magic wand led to the security of your facilities in these communities?

The magic is being true to yourself and to others. You may not be aware that at the height of militancy from 2003 to 2009, Oilserv was the only pipeline company working in the Niger Delta.

We maintained the entire Shell transportation system, the pipeline system from the whole Shell East, from Bayelsa, all the way to Akwa Ibom and up to Imo and Abia. We were able to do this without problems because we carried the communities along. They have genuine issues that have not been addressed by government across the land.

What we do basically is to engage them and make them stakeholders, not by throwing money up in the air. You make them stakeholders by engaging them. They benefit from it but they work for it as well.

Be truthful to them. If you make a deal with them, do not renege.

Once you have that confidence, you can work in the Niger Delta region without problems.

When I say pipelines, I don’t mean

Orient Energy Review February, 2017 41

TOPLINE LIMITED

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LOCAL CONTENT CHAMPIONS INDUSTRY NEWS

Nigerians Must be Involved 100% for Local Content to Thrive – Sen. Lee Maeba encourage financially both by the board and the banks, and if Nigerian companies are not encouraged financially, we can’t do more, because as I said earlier, in ten years, we should be able to do more than we have done in the whole operations, I say I will protest because it is my vision that by 2020 we should have hundred percent Local content across all operations in the oil and gas industry.

How then can an enabling environment be created for Nigerian Content to thrive?

By encouraging the Board to do what they are supposed to do. The authors of the bill put a lot of powers within the Board and they have put a lot of empowerment on the board to do what is right. If the Board does what is right, we will achieve everything. It is only when the Board is not biased, not corrupt, not compromised, that we will achieve everything. So we wish that the Board is not compromised, the Board is up-to-date in their duties and so by 2020 we should achieve a hundred percent Local content across board.

S

enator Engr. Lee Maeba, is renowned for sponsorship of the Landmark Nigeria Content Act in 2010 while in the Nigerian Senate as Chairman of the Senate Committee of Petroleum Resources, in this interview with Orient Energy Review Editor, Margaret Nongo-Okojokwu, at the Nigerian Oil and Gas Conference 2017, he spoke extensively on the vision and directions with which the Nigerian Content Act was designed, saying until Nigerians’ participation in the sector is achieved one hundred percent, local capacity building would not measure up to international standards.

As the champion of Local Content in Nigeria, how far do you think Nigeria has gone on the policy since you initiated the Bill?

Well, the whole Act is about compliance and sustaining local capacity. But between 2010 and now, I am not impressed with what has been achieved in terms of compliance, and compliance means that every company must commit itself to the major schedule about Local Content.

Also, Nigerian companies have not been

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So far, do you see the passion with which the Local Content Bill was originated as being achieved at the moment?

Well, from what the Executive Secretary said, I am impressed. One thing is to say it, and then one thing is to do it. And that is why I am saying that the only way you can achieve all the things he is saying is to have hundred percent maximum participation of the Nigerian companies, and the only way Nigerian companies can do it is to encourage them financially to do it. So, the Nigerian content fund is enough to do it. So, I believe and vividly believe that the money available in the fund can go a long way to assist the companies to build capacity in order to measure up to international standards.

About the funding, what message do you have for the Banks?

I have already said it at the conference, if the Banks are not doing what they are supposed to be doing, it then means they don’t appreciate what we did.

The Nigerian Content and Monitoring Board (NCDMB), should engage the Banks and say ‘we brought you money by the provision of this act, please use the money to support Nigerian Content Development’.

Any comment on the PIB and its neglect?

Where I left the PIB is where it is now, I can’t comment beyond that.

We understand the PIB has been broken into parts?

Look, the PIB does not need to be broken into anything. What we put together was the bill that was supposed to pass as the PIB. Now they say there is PIGB, PICB, PIWB, that is not what we intend for the industry. You need political will to pass the bill; it is only when you have a president that is courageous before the Bill can be passed. It is beyond the four walls of the National Assembly; in fact, let me say that you need the courage of the Senate and the House to pass the Bill. This is because there are a lot of intrigues involved, and so the lawmakers must organise themselves in the interest of the nation, because the PIB is all about the national interest...

(Cuts in)...How? To pass the PIB, you don’t need to look at your interest or regional interest; you need to look at national interest and that is why people like me, where the national interest is involved, we sacrifice regional interest, we sacrifice community interest, etc. So, once the Senate and the House of Reps and the relevant committees as a whole are able to come up and re-define the national interest, the PIB would be passed; and to defend national interest, you know, you need to make a lot of sacrifice over it.

Do you see the bill passed this year, by the 8th assembly?

The way I am seeing it, no! But I am a consultant to a lot of them. We are consulting to give them the real injection that will stimulate national interest in them.

What should be done?

Orient Energy Review February, 2017 43

LOCAL CONTENT CHAMPIONS

‘At Royal Niger, Our Vision is to be a Subsea industry champion for Nigeria in the area of wellheads, Xmas trees, Subsea controls and Distribution equipments’ - Okolo

M

r. Anthony Okolo has many years of significant experience within the Commercial and SOperations disciplines. He has played a key role in the growth and margin expansion across several oil and gas related businesses. Currently as Managing Director of Royal Niger Emerging Technologies Limited, Anthony has led the company growth from start-up into an entity that provides services on several key projects ranging from the supply, installation and maintenance of subsea umbilicals to provision of turnkey solutions for fabricated control and distribution products in the subsea environment. In this interview with MARGARET NONGO OKOJOKWU, the young enterprising Managing Director tells us why the World should look out for this budding Subsea Company.

professionals telling us we could not manage controls equipment efficiently, just because none of the components are made locally. It was also heart-breaking that most of the opposition came from fellow Nigerians in the industry. But I have to give special thanks to Nigerian Agip Exploration (NAE), NAPIMS, NCDMB and Chevron (Star Deepwater) for giving us the opportunity to show what we could do in the Subsea environment. Today, we have a great working relationship with TechnipFMC and a few other multinational service companies, who have nurtured our experiences and helped us do more than we could have imagined ourselves.

The Subsea environment is a rare terrain for a Nigerian company. Please tell us how the journey towards domiciliation of subsea technology has been for you?

We don’t tend to use technical partners now because we have gained considerable experience as a corporate entity in our field, to add to our individual technical experiences. However, this has not always been the case. We have previously worked with other companies in Europe the US and Asia, but we have always

It has been an exciting and very revealing journey. We started off with many people including respected industry 44

Orient Energy Review February, 2017

Who are your technical partners?

believed that the answers to our technical issues in terms of engineering can be just as efficiently found in Nigeria in most cases or through working with consultants in diaspora. We do still rely on some foreign expertise in specialist areas, but mostly the expertise is provided by consultants engaged by the company for this purpose.

Is your arrangement such that you secure the contacts and they come to execute, while your engineers understudy?

We have a rich history of self-performance using local professionals who we have invested in, and trained to standards obtained in the best oil and gas regimes in the world. Also, more than 80% of our service equipment are self-owned, meaning we have a better opportunity than most to properly manage our work scope internally, as well as provide a cost-effective solution for the Client, in accordance with global quality standards.

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LOCAL CONTENT CHAMPIONS INDUSTRY NEWS Are there Nigerians on your team and what fractions of your engineers are expats? What’s the succession plan?

We have a 98% Nigerian team with just one senior expat engineer who is able to support our local team remotely.

Looking at Standards; which is quite huge on this rare patch; what Standards have you deployed?

Has it been acceptable by the IOCs? At the start, and till now, it has always been important to us to meet the most stringent of international quality standards. So, from inception we pursued ISO 9001 certification of our processes and facility. We obtained this at the first time of asking in 2016. We consider this to be an important milestone for us as well as vindication that we have gone about our activities in a manner that is compliant with global service expectations.

Tell us about patronage. What projects are you working on and what are the sizes of these projects?

We perform a variety of services across the Wellheads and Controls product lines. Currently we are engaged in 2 major maintenance projects for Clients operating in shallow and deepwater environments. Although the market has contracted quite a lot in comparison to pre-2014 activities, we have maintained a steady order-book, with services provided to a wide section of operators and service companies.

Safety onshore isn’t handled with levity in the industry for huge colossal effect, let alone offshore. What parameters have you put in place?

Our safety culture starts with our colleagues and employees. The training is quite detailed and tries to create an awareness of the fact that ALL accidents are preventable, and also that ALL individuals are responsible for their own safety, as well as that of the group.

This way, the blame game is avoided and our people have taken pride in their individual safety statistics. Frequent safety awareness meetings are part of the weekly meeting structure at Royal Niger. This also adds to the complete assimilation of the company’s safety values which have been imbibed from best practise recommendations from all over the world.

What is your training programme for these indigenous engineers in your employment and what’s the projected cost for the next five years? Are there special skill sets you’re considering?

We have so far spent more than $250,000 USD on training our colleagues over the last 2 years. For a small company like us, that is a huge amount of money.

But the value far outweighs the financial

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value of that expenditure. Seeing a fresh graduate develop over time to take ownership of a technical solution for a problem in the field, due to the learning and experience that our training process has afforded them, is a rare pride that we will never get tired of replicating at Royal Niger.

So, do you manufacture these umblicals from the scratch or you integrate the components parts only? Are there plans to source the entire parts and manufacture locally?

10 years?

Royal Niger will be a Subsea industry champion for Nigeria in the area of wellheads, xmas trees, subsea controls and distribution equipment. We are working towards this goal already, and by being steadfast and maintaining our integrity and Will to apply the best of our experiences, we will succeed.

Today, many of the services we provide in the umbilical product space are assembly, repair and testing services.

However, we are currently developing our facility at Angel Park, Badagry which will be focused on production of the umbilicals and umbilical products How much foreign currency are we talking about saving if the IOCs shift to your company and other developing ones in this area of business?

We not only save cost but also create other cost saving avenues through lowering of logistics costs for shipping and transportation. What we also deliver is peace of mind because our Nigerian Clients can more closely monitor the work we do as part of their standard quality process. So, I can confidently say we save the Client a lot when we perform the services.

How have you handled the issue of funding, being a young Nigerian start-up company?

All our investments have been self-funded. To be honest, that’s the only way we know how to successfully run such a young company such as ours. Opportunities for loans have come up in the past, but we believe our growth will be “organic” and based on creating value for our shareholders and equity subscribers, rather than institutional lenders.

What’s the most difficult part of this subsea technology domiciliation?

Trying to overturn the biases from local and foreign Clients, which leads to illogically refusing to entertain the possibility that a Nigerian company can do every bit as well as a Subsea company anywhere else in the world. Happily, this bias is slowly changing, but there is still a lot of hearts which need to be turned before we can boast of a strong subsea service industry which can export our services to Africa and beyond. Also, the fact that we are not playing on a level field with our foreign competitors who come into the country on unfair “frame agreements”, limiting the opportunities open to local service providers. This is really what killing sustainable capacity development in the country is.

Where do you see Royal Niger in the next Orient Energy Review February, 2017 45

LOCAL CONTENT CHAMPIONS

‘We Are Set To Diversify Local Content beyond the Oil Sector’ – Hon. Ekon out by the legislative arms of the Nigerian National Assembly.

For me as the Chairman, I believe that if we can diversify this law to other sectors like Power, Aviation, Construction considering the gains we had in the oil and gas industry, Nigeria would be better for all of us.

H

on. Emmanuel Ekon is the Chairman, Nigerian House of Representative’s Committee on Local Content, at the recently held Nigerian Oil and Gas Opportunities’ Fair in Uyo, Akwa Ibom State, he spoke extensively on the need to review the existing Local Content Act as enacted in 2010 for the oil and gas industry with a vow to replicate same laws in other areas of government functionaries; while blamed the arbitrary abuse of the Nigerian Content laws on Nigerians nonchalant disposition at switchboard, negligence and lackadaisical approach to due-diligence, Ekon promised better deal in days ahead. He spoke with MARGARET NONGO-OKOJOKWU in Uyo. Excerpt: What’s your view on the Nigerian Content Act? Let me start by saying, Local Content law was enacted by President Goodluck Jonathan. One of the cardinal reasons why that law was enacted in 2010 was to build indigenous capacity in the oil and gas industry in Nigeria and looking back on the road map between 2010 and today; you will agree with me that Nigeria has done well in the oil and gas industry. Prior to the enactment of this law, a lot of things were going wrong; a lot of Nigerians did not have opportunity of being supplied water even food like have being consumed by expatriate in the oil and gas industry, but since the enactment of the law, quiet a lot of people have been gainfully employed, couple of fabricated job has been won by Nigerians in the oil and gas industry. So, for me I think it is a good law as churn

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sector?

Can you throw more light on the opportunities in the oil and gas

The opportunity fare essentially is to gather the oil majors, the international oil companies operating within the shore of Nigeria to come in here and tell the indigenous local contractors, what are the opportunities that are coming up in the next couple of years, so that the Nigerian indigenous companies can also brace up to key into those opportunities if it means to undergo trainings, it can be done now if it means to build capacity, they can do it now; if it is in terms of funding, they can also look for funding now, so it is a kind of giving us an expo on what is going to happen so they can get prepare for the exams, so that is why we gathered these people here today to come and tell our indigenous contractors what is being expected, what is going to happen, what kind of projects and which way are they looking at in the oil and gas industry, which way is it going in the next couple of years, so that we can also brace up and follow them.

Nigeria is marking seven years since the enactment of the Local Content Act, what do you have to say about the journey so far?

Prior to seven years ago, a lot of services were being outsourced, including the supply of water that expatriates would drink within the oil and gas facilities, even food that we consumed were outsourced, little things like bolts, shafts were outsourced, even labour; talk of little artisan jobs were also outsourced, but with the existence of this law today, some of those things are now being carried out by Nigerians, so for me in the

Orient Energy Review February, 2017

last seven years, I would say we have attained a little mileage in terms of local capacity development.

I understand that there is a planned review of the Local Content Act by PETAN, as a NASS member, what is the role of the Senate in this and how far has this gone?

Well, I don’t know which one they have pushed, but I know that if in the process of trying to implement this law, we observe that there are some deficiencies and difficulties that needs to be addressed, a lot can be tinkered with, that is why we have the room for amendment, so if there are issues in the law that have existed or arisen which we did not notice when the law was being passed, we can amend it. However, I have not seen anything from PETAN yet, but I know an amendment was done by me last year, but then like I said, we are ready at any time that Nigerian people needs a law to be tinkered with, but what I am working on right now is to diversify the law to other sectors like construction, telecoms, aviation, etc so that we can replicate the gain we have in the oil and gas sector, that is what we are working on now.

Recently, NCDMB inaugurated local content committee in ICT, as a member of the House Committee, in what areas are you diversifying?

I don’t know how the NCDMB inaugurated its committee on local content on ICT, but I do know that Nigerian Communication Commission, NCC has local content in their organization; yes, the local content department is there, but there has never been an existing legislature to back it up, but what we are trying to do now, as at last week is to sit down, write a letter and look at things holistically, and send these letters to some of these organizations like NCC and Niger Delta Power Holdings, let them come and brief the committee on what they are doing about Local content in the IJC, in that way we would know where to start by trying to draft the implementation on those policies that have been put in place. We need to diversify the Local Con

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LOCAL CONTENT CHAMPIONS

Do you think we have the capacity to handle this in those areas at the moment?

Nigeria has the capacity to handle anything, even the international community has proffered in several forums that Nigeria has capacity to go about anything, all we just need to do is to change our attitude, there is nothing that is impossible for Nigerians to do, the capacity is there, we only need to open the platform for other people to manage.

We Have Done Well In Local Content Policy Drive But...Wabote

How would you go about monitoring of the IOCs which you mentioned on flouting the provisions in the Local Content law?

I have shared it in different fora, the problem we have in Nigeria is that Nigerians are the architect of their own problems. For example, a situation where we have an agency that is supposed to oversee a scheme; for instance, infractions in the expatriate quota, agencies that are supposed to monitor the number of expatriates that come into the country are not doing what they are supposed to do, until we sit down as a body and say let’s do what we are supposed to do.

The enabling law is there for us to follow, the thing is that we are not following it. The law is very emphatic, it is very explicit that when you want to bring in an expatriate, there are processes you have to follow, but in a situation where those processes are not being followed and the regulatory body that are supposed to check whether these processes are being followed ignore it, there is a problem, so it is not the expats that are giving us the issues, it is us Nigerians, and when we sit down and say enough is enough, I think we would able to correct our mistakes.

What future do you see for Local Content in Nigeria?

Great future of course, we are driving it; I have been in the saddle for one and a half year, though I can’t rate myself but I think the industry have seen the kind of leadership, I believe the industry has confidence on the Local Content Committee, we are going to build on that, the future is bright, future is great if only the people can understand that this law is actually made for us not the IOCs, and if they know that and partner with the National Assembly, I think we will get there.

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t OGTAN, Executive Secretary of the Nigerian Content Development and Monitoring Board, Engineer Simbi Wabote bares it all to OER on the journey so far in driving the local content policy in the Nigerian Oil and Gas industry.

for the oil and gas industry.

But the government is working very hard because they have also recognised this and they are working very hard on a daily basis to address most of these challenges and I think with time, we will overcome them.

OER: How would you rate the local content policy in Nigeria? How far have we gone and what do we need to do to make it better?

But in terms of figures, how much do you think the Nigerian nation has saved so far in our attempt at building domestic capacity?

I think we have done very well as a country. Like I said in my speech, I went round this country inspecting facilities myself. While I was on the other side I didn’t know that Nigerians have really invested in capacity development. So I think without missing words, we have done tremendously well but we still have a long way to go because in the oil and gas business, technology changes on a daily basis and we need to catch up with some of these technologies; so there is potential for improvement.

On a yearly basis, the industry itself spent almost $20billion year in, year out. When oil price was good and production was good and before the enactment of the Act, only 3% of that was retained in country. But today I can confidently tell you that $5billion out of that $20billion plus is saved in Nigeria through the intervention of the local content Act

There are some challenges no doubt.

Can you identify some and suggest way to tackle same?

Of course we know what the challenges are. . You also have the almighty challenge of power situation in the country which is adding to the cost of production and provision of services

What’s your message for OGTAN? I think my message to OGTAN is to become a lot more professional, to raise the bar. It is to be abreast with the requirements of the oil and gas industry in such a way that those training programmes can help the industry. And most importantly, to train Nigerians on how they can gain access to job and become entrepreneurs.

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LOCAL CONTENT CHAMPIONS INDUSTRY NEWS

GPPS: A Local content success story ‘Huge Patronage from ExxonMobil Catapulted Our Growth to Enviable Heights’ – Uzu

E

ngr. Obidike Nelkon Uzu CEO, Global Process & Pipeline Services Limited (GPPS), has more than 26year’s oil field experience in drilling operation (Sedco Forex), production technology (SPDC) and Process and Pipeline Service (B.J Services) and supervised many successfully projects in Nigeria, America and Uk. In an interview with Frank Uzuegbunam, Editor, West Africa Energy, he talks about process and pipeline industry, Nigerian content amongst other issues. Excerpts: Can you tell us briefly about Global Pipeline Service Limited (GPPS) and its critical success factor?

Global Process and Pipeline Service Ltd (GPPS) was formed in 2002 but commenced operation 2010 as a specialist company built on professionalism for quality service delivery in process and pipeline pre-commissioning, commissioning, maintenance and project management service to the pipeline industry.

Our critical success factors include massive in house capacity in terms of fit for purpose equipment; competent, dedicated and resilient workforce; extremely commendable track record and unbroken focus in her core areas of competency and robust management style that is tied to strict ethical standard adherence.

GPPS currently has the largest in-country pumping and equipment capacity in the focused product service line in Nigeria.

What will you say are the achievements since the take-off of the company?

We have achieved rapid growth to become among the 10 top fastest growing company in (Africa Business Review report). GPPS is the only fully Nigerian Process and Pipeline Company, with major projects completed in the deep water applications in her product services line and we are proud to say that we own the largest fleet of resources in Nigeria for our line of business. We have become a name in the pre-commissioning and pumping industry with numerous awards. More importantly, we have ramped up our safety and quality operating delivery to the admiration of our clients.

How would you assess process and pipeline services as it concerns competence and capabilities of local companies in Nigeria?

There is very scarce depth of competence and capacities of local companies in Nigeria for this product service line. However, GPPS has differentiated herself on this with her topdown exceptionally competent management team.

GPPS has attracted the best hands in the industry from multinational firms to work for her. Competence level is very high with unrivalled capabilities with other local companies. We have also established a continuous learning and competency program for the development capacity enhancement. We have been sending our employees abroad for cross training and leadership development to sustain our market position in the industry.

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Orient Energy Review February, 2017

More importantly, we are increasingly becoming the resource base (equipment and people) for this product service line in the Nigeria market.

Safety and Environment can be described as the most critical aspects of your operations. How do you maintain global best practices in your HSE operations?

Our top-down approach to Health Safety and Environment fosters a company-wide “safety first” attitude. To us in GPPS, Safety is very body’s business. We have encouraged improvement to ensure HSE standards and adopt global best practices as part of our operations.

Our operating standards are based on international standards (ISO, SON etc) and industry best practice. This has ensured we continuously deliver high quality customer satisfaction.

We have also encouraged our workers to own and adopt high safety awareness and be very conscious of the environment.

Is it safe to say that Global Process & Pipeline Service limited (GPPS) is a product of Nigerian Content initiative?

Absolutely, we are proudly Nigerian Content Initiative. The leading Nigeria Company operating on international standards and industry best practice in her product service line. This is a brand that should be promoted in other parts of the world.

What do you think should be done to deepen local content adoption in the country?

No doubt, we have made progress with the Nigeria Content initiative but we can do more. For Nigeria to deepen local content in the Oil and gas sector, we should first and foremost strive to increase participation of capable local companies in the sector. The first step is monitoring and assessing performance of the local companies. There should also be mechanism for demanding feedbacks from the operators on the performance of the local companies’ post-work completion. There should be an incentive to encourage and drive technology transfer from International Oil Companies (IOCs) to local companies. Finally, we should establish a transparent template of already achieved verifiable in- country competency database which will form the base to subject IOCs to use them.

There are accusations that most IOCs operating in Nigeria devise various means to evade complying with the Nigerian Content Act?

tional service company and now as a service provider, I can frankly tell you that IOCs are happy to patronize competent and reliable local companies once they are sure the local companies will deliver at acceptable ethical, safety and quality standards.

ExxonMobil, have supported us origin with training, positive feedback and huge patronage which catapulted our growth to this enviable capacity which we have achieved and delivering good services to Total E&P and SENPCO. However, we have been denied couple of times work that we won ahead of our multinational competitors. In one of the cases, we were told that it is not possible for a local company to score higher in technical than a multinational service provider, which we did.

Some operators are afraid of insurance liability and escalated project cost that may arise if the said local company could not deliver as required but really, some local companies just want to be agents without capacity, thereby becoming platform for the IOC’s to use in ensuring they get all that they want from international companies.

Five years from now where do you see Global Process Pipeline Services (GPPS)?

I see GPPS brand spreading into other countries. No doubt GPPS would become the obvious market leader in her product service line in Nigeria’s oil and gas sector. Five years from now, GPPS would have expanded her foot-print and geography into other West Africa and Sub-Saharan Africa countries.

Definitely, by then, GPPS would double her current revenue base with massive ramp-up on operational deliverability and efficiency. (culled from West Africa Energy)

Having been employed by IOCs, multina-

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LOCAL CONTENT CHAMPIONS

OGTAN: We Are Repositioned For Effective Human Capital Development in Nigeria –Dr. Afe other countries that are attracting Nigerians to their country by giving them scholarships and citizenship because they know that we have the capacity. So we want to attract this capacity by also ensuring that we have the favourable environment to attract this and get Nigerians to build Nigeria. And you have heard that a lot of countries are asking other nationals to leave their country, we have nowhere to go. Americans are saying America first, South Africa are saying South Africa first, so we want Nigeria to build Nigeria here and make sure we enhance the oil and gas industry business.

D

r. Mayowa Afe is the President, Oil and Gas Trainers Association of Nigeria (OGTAN), a body dedicated to human capacity building in the Oil and Gas Industry.

In this exclusive chat with Orient Energy Review (OER), Dr. Afe speaks on the mandate of the association, challenges of the industry amongst others.

How has OGTAN helped in boosting local content in the petroleum industry in Nigeria?

In terms of entrepreneurship and gaining access to jobs, we have done quite a lot. Also don’t forget the fact that most of the IOC’s including Shell now has Nigerians as their managing directors. I think we have made tremendous progress and what we are looking at today is trying to build on that capacity that has been built and we need to go to the next level.

OGTAN is the Oil and Gas Trainers Association of Nigeria. It is to encourage our members to help build capacity so that most of the trainings that are done outside the country can be done inside the country.

You might have heard about the Executive Secretary of the Nigerian Content Development Monitoring Board (NCDMB) talked about the FPSO, and how so many of them are being built in Nigeria; it has not been done before. It helps engage Nigerians in terms of employment. Now we the oil and gas trainers arm of this local content want to ensure that Nigerian trainings are done in Nigeria. The multiplier effect of this cannot be phantom.

Look at Globacom, it is an offshoot of ConOil and ConOil is a Nigeria oil and gas company.

Because of the capacity of ConOil, it has led to the birth of Glo and look at the multiplier effect of that. If MTN and others were Nigerian companies, you will now see what the multiplier effects will look like. So we are all up on this local content development gain and we want to continue to build on it to ensure a total capacity building for Nigerians.

Is OGTAN really ready for this?

Yes of course we are. The greatest asset in Nigeria is not oil, it is human capital; we have all types of human capacity in Nigeria and a lot of Nigerians are all over the world. I mean

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You said you want your association to start a training that will measure up to international standard. Is OGTAN planning to go into partnership with international associations or organisations?

Yes, in the course of this event, I just announced that we are partnering with European Association of Engineers; we are bringing in experts that will help grow our capacity so that that capacity can be retained in-country. We don’t need port folios and those who will just get contracts and go away. No, we want people who will help build capacity in Nigeria.

What role is OGTAN playing towards the passage of the Petroleum Industry Bill?

We intend to add OGTAN’s voice for the passage of the PIB as this will help establish the necessary framework for doing business in Nigeria thereby boosting investor’s confidence in this country. We want to appeal to the National Assembly to please set aside politics and look at the future of Nigeria by passing the PIB. How do you intend to boost indigenous capacity and human capital development in Nigeria?

The emphasis of my team shall be to bring value to Nigeria through the domestication of more quality trainings. The executive secretary of NCDMB always tells us that you cannot drive the foreign trainers away. We have to improve the quality of our trainings and we need to establish standards. We shall work with all members of the association to effectively implement the following goals that we have set for ourselves.

First, we must actualize the OGTAN House in 2017. If your company wants us to name that house for example Total OGTAN house, just give us N80 million and your name will be there forever. Secondly, we are also driving an aggressive membership recruitment and retention. We are also going to pursue OGTAN certification as a certifying body.

Additionally, we are also going to properly classify and accredit all our members. We are going to do that with the standard that is set with NCDMB. If you meet those standards you will be accredited and classified. There will also be issuance of guidelines for standardization of training and establishment of national occupation standard. We are going

to do this in conjunction with NCDMB and if you are not certified, I am sure with the passage of time your company may have no business to do in Nigeria. We are going to pursue forcefully collaboration between regulatory bodies, academia and the oil and gas industry to help close the gap between the university theories and the practical of the oil and gas industry.

To this end OGTAN is organizing a national educational summit in July to try to address some of these concerns. As we go on, there are concerns that Nigeria graduates are not fit. We are helping the universities and we are donating software. We are also training the trainers of the lecturers. So we are going to train and help our universities to grow so that they can produce quality students that can be employable by the industry without re-training.

We are also going to seek appropriate legislation to back up the establishment of OGTAN through the National Assembly and we have commenced this process. We are going to sponsor a bill on the floor of the National Assembly that will empower OGTAN. We have met with the Senate and the House of Reps and we are already working with our lawyers on that. We are also going to pursue profitable local and international partnership. OGTAN just signed an incorporation agreement with the European Association of Geo-scientists and Engineers to bring more international certified training to Nigeria.

Unlike those days when 20 Nigerians will go and do training in Ghana with a Nigerian instructor, they will ship themselves from Nigeria to Ghana to go and do training just because people want estacode. We want to discourage this. All our trainings must be inhouse henceforth.

Furthermore, we are going to help the business growth for our members; those who are just starting we’ll help them and explore affordable funding opportunities for our member companies. As a first step we have already started discussions with our own executive secretary of NCNB of the possibility of having our members to benefit from the 1% training deductions from all oil and gas projects which I believe must have run into billions of naira and he promised us that this will happen very soon. Only three companies have benefitted from this loan and we want to see Nigerian companies benefiting from this loan.

Finally, we will continue the education of our members through monthly technical meetings, business meeting, workshops and organisations of identified training certification. We are already discussing with companies that we will partner with. Prior to this event, we have paid courtesy and business visits to the Honourable Minister of State for Petroleum Resources, GMD of NNPC, and the Executive Secretaries of PTDF and NCDMB. We hope to continue in these visits to other stakeholders like the DPR, NAPIMS, NIPEX and others to make sure that OGTAN membership becomes the criteria for you to do business in the training in Nigeria. These business meetings afforded the new executives council of OGTAN the opportunity to interact with the stakeholders on the need for the domestication of all trainings in Nigeria and how we could be useful in this course.

We also sought their participation and support to help stop all the expensive capital flight from Nigeria through having industrial trainings outside the country.

Orient Energy Review February, 2017 49

TALKING POINT

Ibile Oil & Gas Corporation is open for Business – Oluwo Lagos State Commissioner for Energy and Mineral Resources, Olawale Oluwo in this interview with OER is optimistic that Ibile Oil and Gas Corporation owned by the state government has come into the oil and gas space at the right time, to further expand the economic outlook of this economic hub in Nigeria. mance in human capital development will help the state avoid the unintended consequences that comes with oil and gas activities like we are witnessing in the Niger Delta presently.

What other area is the state looking at developing manpower?

Following the discovery and commencement of crude oil exploration in Lagos State, how is the state looking to develop indigenous manpower in this sector?

I

want to say that of all factors of production; land, labour, capital and entrepreneurship, the human capital is the most important of all. It is not resources and it is not money but creativity, skills added with technology that can produce a sustainable economy and indeed a sustainable oil and gas space and that is what Lagos state is focusing on. We are pleased that you are helping the Nigerian economy and I know very quickly you will be helping the Lagos economy too as we move deeper into our oil and gas operation. As you are all aware, Lagos state is the newest oil and gas producing state in Nigeria courtesy of the discovery of crude oil in the Aje field OML 113 offshore and this is the first oil found outside of the Niger Delta. There is a great expectation among Lagosians that the discovery of this hydro carbon should translate to massive investment in the state and contribute to our GDP and as well as diversify our revenue base.

However this can only be achieved if the state is able to approach the process of exploration, production, distribution, logistics and safety in a very structured and environmentally viable manner and this is where the contribution of your medium becomes very critical to our oil and gas ambition.

In Lagos state, the association’s perfor-

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For us, what we have at the moment is an academy owned by the state which was set up to focus on electricity and power related issues and it is attached to our Lagos state electricity board.

But following the discovery of oil and gas and the interactions we have been having with the stakeholders in the sector, the state has decided to upgrade the Academy from being an electricity training academy to an energy academy that will deal with issues with human capital development in the power sector and as well as in the oil and gas sector.

The intention of this energy academy is to make sure that we can collaborate with associations to focus on regulation and monitoring to the extent that it does not offend people at the federal level because at the federal level, they have a lot of things to deal with, but in Lagos state we must also complement their efforts by doing those things that the regulators and trainers should be doing.

The state has also established a fully staffed oil and gas company, a for-profit organization that will go into businesses in the upstream, midstream and downstream. I am sure a lot of OGTAN members will be interested in collaborating with that company because they need a lot of human capital development initiatives. They are new as they started less than six months ago. So, we will be collaborating with the association in this regards also.

Some new oil and gas fields are springing up; what are the prospects for the state?

For us in the state, we see a correlation between oil and gas and power and what we see is a situation where you cannot even generate one kilowatts of power without having gas to sustain it.

That is why we are excited about the prospect of this Agip fields, Yego fields as well as all other fields we see along the coast of Lagos.

So we will like to advise that OGTAN join us in strengthening the advocacy for the federal authorities to quickly allocate some of these oil fields that have been there for years, now that we know that there is oil and gas in the state. It is important that we allocate as many of them as possible to operators who can raise money and bring out oil and gas because for us in Lagos we have an ambition to do up to 3,000 megawatts of electricity that we will keep in Lagos to power the Lagos economy.

And from an energy security point of view, it is also critical for us that the gas that will power the 3,000 megawatts over the next 5-7 years must be gas that comes from within the soil of Lagos.

On the plan by the Lagos state government to collaborate with associations like OGTAN; what do we intend to achieve by this, in the area of building local content?

What we intend to achieve is in three phases. One, we believe that human capital development is key, both in the oil and gas industry and the power industry. Now by collaborating with OGTAN, we will be in the position to develop the inner capacity of our people and to ensure that we take less of our foreign exchange outside Nigeria and that is what this is about.

And we have an academy that they can collaborate with and jointly, we will put the curriculum together and we are going to make sure that our people get the necessary skills.

Orient Energy Review February, 2017 51

LOGITICS & MARITIME

African Leaders Converge In Abuja to Reset Maritime Sector

Delegates resolved that AAMA should immediately give operational effect to the African Union charter of maritime security, safety and development adopted by African heads of government in Lome, Togo, in 2016.

T

he third conference of the Association of African Maritime Administrations (AAMA) in Abuja, from April 19 to 21, 2017, may have come and gone, but the memories and takeaways from the occasion would be cherished by the regional and global maritime community for a long time to come.

A major development at the three-day event was the unanimous election of the Director-General of the Nigerian Maritime Administration and Safety Agency (NIMASA), Dr Dakuku Peterside, as the new chairman of AAMA. He took over from Sobantu Tilayi, the acting chief executive officer of the South African Maritime and Safety Agency (SAMSA), who has been the acting chairman since 2013. Peterside, who was immediately congratulated by President Muhammadu Buhari, pledged to reposition the industry for the good of Africans.

The AAMA programme, themed “Sustainable Use of Africa’s Oceans and Seas,” was hosted by NIMASA and saw various African maritime leaders and officials of the International Maritime Organisation (IMO) speak with one accord on how to reset

52

Orient Energy Review February, 2017

the industry for the greater benefit of the continent.

From North to West Africa, East to Southern Africa, speaker after speaker harped on the need for the continent to explore and control its vast and untapped maritime resources.

It was unanimously agreed that Africans should wake from their self-induced slumber and marshal out strategies on how to snatch the lucrative shipping trade from non-Africans who control 95 per cent of the market.

The maritime delegates, drawn from 34 countries in Africa, listed challenges like poor financing of the sector, poor legislative and regulatory functions, weak intra-African cooperation and bureaucracy as blights that have robbed the continent of its rightful place on the global maritime map.

While pledging to implement the resolutions of the conference, the experts said it was appalling and unacceptable for Asians and Europeans to dominate the international shipping business, while millions of African youths wallow in poverty due to joblessness.

They also pledged to work out structured, inter-agency, inter-governmental regional and continental cooperation and integration on all maritime issues.

Declaring the conference open, Prof.

Yemi Osinbajo, who represented President Muhammadu Buhari, said said that intelligence sharing, dismantling intra-African trade barriers, tackling piracy and building blocks of unity were necessary to unlock the vast maritime potential of Africa.

“We in Africa need to speak with one voice at the global level. That is the unity we are talking about. Africa boasts of enormous untapped maritime potential. We have a lot administrative, security and safety challenges but they are not insurmountable.

Piracy, kidnapping and sea robbery are some of these challenges. These crimes have hiked insurance cost for vessels and goods. Our waters are being polluted. We have not acquired adequate human and material resources to tackle the issues. That is why a strong collaboration and synergy from the national to the regional levels are key.

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GAS

Chevron lets contract for Nigerian Gas project

C

hevron Nigeria Limited (CNL) has let a contract to Frames Group BV, Alphen aan den Rijn, in the Netherlands, to provide a natural gas dehydration unit for the 165-MMcfd Okan offshore gas gathering and compression platform (GGCP), which CNL 40% operates in Nigeria’s western Niger Delta region on behalf of partner Nigerian National Petroleum Corporation (NNPC) 60% under their Escravos gas project joint venture.

Frames’ scope of work will include design and construction of the glycol-based gas dehydration unit, which will be installed as part of an expansion of the GGCP’s existing dehydration system, the service provider said.

Expanded gas dehydration capacity at the platform comes as part of CNL’s Okan GGCP debottlenecking program to increase production from Okan field, Frames said.

This latest contract follows CNL’s April 2016 award to a consortium of NNCP subsidiary National Engineering & Technical Co. (Netco) and PAI Engineering Ltd. to deliver detailed engineering design (DED) services for the Okan GGCP debottlenecking project, which is intended to boost handling of additional non-associated gas (NAG) supply from new NAG wells CNL plans to drill as well as surplus NAG from the new Okan pig-receiver platform (PRP).

Designed to sustain Nigeria’s domestic gas supply, the Okan GGCP debottlenecking project will include: • Mitigating declining associated gas

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(AG) rates.

• Debottlenecking to increase NAG handling capacity to 200 MMcfd.

• Increasing capacity of the glycol regeneration system to 320 MMcfd from its current 200 MMcfd capacity.

• Diverting excess NAG gas from Sonam NWP field to Okan GGCP. Okan GGCP debottlenecking project located off Nigeria in about 25 ft of water within OML-96, Okan field’s GGCP currently dehydrates both AG from the Okan production platform and NAG from two NAG wells, OK-33 and OK-72.

Composed of three existing 55-MMcfd compressors, the Okan GGCP compresses and dehydrates AG in a nameplate 32-MMcfd triethylene glycol (TEG) gas contactor—currently operating at 57 MMcfd capacity—and routes it through a 20-inch pipeline to Escravos Gas Plant (EGP) Train 1’s slug catcher.

NAG used for gas lifting is routed through the lift-gas separator and TEG lift-gas contactor into Okan’s gas-lift network. With the most recent reservoir-deliverability forecast predicting a decline in rich gas supply to EGP Train 1, there is the need to increase Okan GGCP’s NAG-handling capacity to make up for the declining AG rate, Netco said.

According to current project plans, Okan GGCP’s existing 200-MMcfd glycol regeneration system will be replaced with a 320-MMscfd capacity regeneration system to allow for increased NAG-handling capacity.

Alongside NAG supplies arriving from new wells in Okan field, additional

NAG will be routed to Okan GGCP via a 16-inch pipeline from the new Okan PRP, which receives excess NAG from Sonam NWP field.

Based on Netco’s June 2016 contract description, Netco and PAI Engineering’s scope of work on the Okan GGCP debottlenecking project will include delivery of DED for the following components: • Modifications to existing interconnecting piping and instrument between the NAG separator, GGCP Stage 3 scrubber, and TEG gas contactor to increase NAG flow rate to 200 MMcfd from 128 MMcfd.

• Debottlenecking of Stage 3 scrubber to enable a 300-MMcfd handling capacity.

• Replacement of existing glycol regeneration package with a 320-MMcfd capacity system.

• Modification of existing flare system to accommodate new operating conditions.

• Updating of existing utility adequacy report to ensure it entails checks on power, vents, instrument air, chemical, fire water, and open and closed-drains systems.

• Installation of new pig receiver and associated piping, including riser.

• Extension of deck to accommodate new pig receiver.

• Installation of a new flow meter downstream of new pig receiver.

• Detailed review of constructability issues related to replacement of glycol regeneration package, interconnecting piping, pig receiver, new flow meter, and other equipment.

For the Okan PRP portion of the project, the service companies will cover DED on the following: • Installation of a two-phase separator.

• Installation of pig launcher and associated piping for the proposed 16-inch Okan PRP-Okan GGCP pipeline.

• Installation of an ultrasonic flow meter on pipeline.

• Installation of interconnecting piping valves.

• Installation of pipeline tie-in, including riser and validation of tie-in point on Okan A timeline for full start-up of the completed debottlenecking project is yet to be disclosed. *Source: www.ogj.com

Orient Energy Review February, 2017 51

POWER

NNPC Set to Shift Focus to Power Generation and Transmission

T

he Nigerian National Petroleum Corporation, NNPC, plans to shift its focus from mainly oil and gas to power generation and transmission, in a bid to tackle the country’s power challenges.

bridge the huge energy gap in the Nigerian market,”Maikanti Baru, NNPC’s managing director, said not disclosing the timeline or the size of planned investment for the change.

Nigeria’s power generation and electricity grid have been affected by lack of investment and poor infrastructure. This has made many people in the country depend on private generators.

According to local media, no fewer than 70 million generators have been imported into the country due

“The Nigerian National Petroleum Corporation (NNPC) wants to transform into an integrated energy outfit with interest in power generation and transmission. The decision to diversify into the power sector was hinged on the need to

to the situation.

While the Transmission Company of Nigeria (TCN) attributes the situation to shortage of gas, which is the feedstock of power plants across the country, NNPC says there is enough gas to generate 8 GW of electricity but the transmission network is not capable of handling the load.

Earlier in April, the corporation disclosed plans to invest $15billion in the construction of thermal plants with a capacity to generate 4, 000 MW of power across Nigeria within the next 10 years. Three of these plants would be built in Abuja, Kaduna and Kano.

Nigeria in 2013, privatized most of its power sector but maintained control of the ailing Transmission Company of Nigeria, TCN.

FG Allocates $6.3m to KickStart Rural Electrification Fund

T

he Federal Government of Nigeria has set aside N2 billion ($6.3 million) in the 2017 budget to kick-start its Rural Electrification Fund (REF), according to Louis Edozien, the Permanent Secretary of the Ministry of Power.

Edozien explained that the REF is aimed at enabling private investors with viable off-grid renewable electricity projects in rural communities across the country get access to financing to execute their projects. This will boost power supply and ensure that rural communities get access to off-grid power.

He noted that the 2017 budget was still undergoing hearing at the National Assembly, but it is hoped

that the N2 billion REF provision would be accommodated in time.

Once kick-started, the REF would also get funds from the Nigerian Electricity Regulatory Commission (NERC). These funds would include NERC’s incomes gathered from regulatory sanctions to disobedient operators in the country’s power sector.

54 Orient Energy Review February, 2017

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WAIPEC

West African International

Petroleum Exhibition and Conference

Official Event Publication

21 – 23 February 2017 Eko Convention Centre, Lagos

At the Heart of West Africa's Exploration & Production Community 6-8 February 2018 Eko Convention Centre, Lagos, Nigeria

At the Heart of West Africa’s Exploration & Production Community

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Contact the organising committee today: PETAN T: 080 372 55190 E: secretariat@petan.org

Rehia Giwa - Osagie (Nigerian Consultant) T: 07069 117347 E:rgiwa-osagie@waipec.com

Dan Grogan (International Consultant) T: +44 1737784952 E: dgrogan@waipec.com

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Global Event Partners