Oer vol 6 no 7 by Orient Energy Review

ENERGY rient O R e v i e w

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Covering Local Content Oil & Gas

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Vol 6 No.07 2017

Leveraging Technology: Africa Set to Ride On Waves Of Boom & Bust

Nigeria’s Acting President Set to Return To Restive Oil Heartlands Executive Order: “Local Content is our last chance to industrialize Nigeria” – Oye

Ghana: First Oil Flows from OCTP Project Offshore

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Isabelle Kocher CEO Engie

Darren Woods Chairman & CEO ExxonMobil

David Carroll President International Gas Union

Omar Mithรก Chairman & CEO ENH

Bob Dudley Group Chief Executive BP

Fatih Birol Executive Director International Energy Agency

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EDITOR’S NOTE Analysts at McKinsey recently released a report in which it was concluded that African players in the extractive terrain could reduce their degree of exposure to the choppy waters in the industry via a continued and sustained improvement in technological advancements. The OER team reviews this document along with other findings and presents its cover story which is consistent with Nigeria's SPE NAICE 2017 theme. Following the Executive Order by the Presidency seeking patronage and promotion of Local Content, we at OER interviewed the spokesperson of Manufacturers Association of Nigeria, Vassily Oye Barberopoulos. He believes this is Nigeria's golden chance at industrialization. Baring his thoughts on the opportunities, standards and the overall business environment, Vassily compares the Nigerian economy to other climes, and proffers solution. Stories from Nigeria Customs Services (NCS), Nigeria Maritime and Safety Agency (NIMASA),and Ship Owners Association of Nigeria (SOAN) are also found here. We also bring you report from Ghana as Eni's FPSO: John Agyekum Kufuor begins production from its Offshore Cape Three Points (OCTP) block ahead of the scheduled date. Activities in Congo, Guinea and a couple of other African states are not left out.

PUBLISHER/EDITOR-IN-CHIEF: Nneka Ezeemo

Do enjoy the read and let us have your feedback.

EDITOR: Margaret Nongo-Okojokwu PRODUCTION: Chiamaka Umeh

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

CORRESPONDENTS: Oge Obi (Lagos) 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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D GM Business Development Jerome Onoja

‘Nigeria’s Crude Production Has Hit 2.2mb/D’ – NNPC GMD

Business Development Executive: Arit Asuquo Dan Ruth Muo (South Africa) Stanley Etim

CSR-in-Action, Worthy Partner in Building Nigerian Local Extractive Industry - Kachiukwu

CREATIVE: DEE GRAPHICS CI CIRCULATION MANAGER : Ajayi Kayode LONDON OFFICE: Charity Place, Unit 1 Thurrock Pack Way Thurrock Parck Ind. Estate Tilbury,Essex Rm !87Hz. +447974199137 GHA 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

SUSTAINABLE DEVELOPMENT

COVER STORY

Leveraging Technology: Africa Set to Ride On Waves Of Boom & Bust

21 INTERVIEW

WOMEN IN ENERGY

LOCAL CONTENT

Fatima Oyiza Ademoh Emerges The Winner Of The Young Energy Leader Award

OTC 2017: PETAN Recommends Infrastructure Deﬁcit Map NCDMB Targets 100% Domiciliation of FPSO Integration

Executive Order: “Local Content is our last chance to industrialize Nigeria” – Oye LOGITICS & MARITIME Customs E-Auction: 48hrs After, 43 Nigerians Win Bid for Seized Vehicles Amidst Complaints of Website Failure

Orient Energy Review June, 2017

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INDUSTRY NEWS

‘Nigeria’s Crude Production Has Hit 2.2mb/D’ – NNPC GMD

he Group Managing Director (GMD), Nigerian National Petroleum Corporation (NNPC),

Dr. Maikanti Baru, while speaking at the sixth Sustainability in the Extractive Industries’ (SITEI)

conference recently held in Abuja, said that Nigeria’s crude oil production has risen to 2.2million barrel per day. Baru, who was represented by the Corporation’s Chief Operating Officer, Oil and Power, Mr. Mohammed Saidu, said Nigeria intends building the country’s oil reserve to about 2.5mb/d and its subsidiary; the Nigerian Petroleum Development Company (NPDC), has already transformed its production from 15,000mb/d to 210,000mb/d. He also attributed the increase in production to the peace in the Niger Delta. He said the calmness in the Niger Delta, and renewed efforts in the Northeast, are indications that the oil firm has renewed its strength for building oil reserves. He also said the NNPC has identified seven critical gas projects in order to enhance power supply and stimulate industrial growth.

Oil Prices Dip As Prospect Of Deeper OPEC Output Cut Dims

il slipped to one-week lows, as several OPEC and non-OPEC ministers met to discuss a pact to curb oil output but the prospect of the group delivering deeper cuts grew more distant. Brent September crude futures fell 18 cents on the day to $47.88 a barrel by 0850 GMT. The price fell 2.5 percent on Friday after a consultancy forecast a rise in OPEC production for July. NYMEX crude for September delivery fell 20 cents to $45.57 a barrel. “Deeper production cuts have been ruled out, but on the agenda will be caps for exempted OPEC members Libya and

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Nigeria,” PVM Oil Associates analyst Stephen Brennock said. “Faith in the oil market rebalancing is waning by the day and the sooner the Saudis admit the need to do more, the sooner prices can begin their journey on the road to recovery,” he said. Several ministers from the Organization of the Petroleum Exporting Countries and other non-OPEC producers are meeting in the Russian city of St Petersburg to review market conditions and examine any proposals related to their pact to cut output. Saudi Energy Minister Khalid al-Falih said there would be no discussion of deeper oil output cuts, but said there would be a discussion on output caps for Nigeria and Libya. Nigeria and Libya have so far been exempt from the cuts to help their industries recover from years on unrest, although some analysts questioned whether the group would make such a move. “Output cuts by Libya and Nigeria

would be next to impossible considering Libya is just emerging from the civil war,” said Kaname Gokon, strategist for commodities brokerage Okato Shoji in Tokyo. OPEC and some non-OPEC states including Russia agreed to cut production by 1.8 million barrels per day (bpd) from January 2017 to the end of March 2018. Russian Energy Minister Alexander Novak said the output deal had helped to clear 350 million barrels of additional supply from the market so far this year. Kuwait’s oil minister, Essam al-Marzouq, said compliance was good with oil production cuts by OPEC. The United States is considering financial sanctions on Venezuela to halt dollar payments for the country’s oil, which could restrict the OPEC nation’s crude exports. The International Monetary Fund on Monday July 17th kept its growth forecasts for the world economy unchanged for this year and next, although it slightly revised up growth expectations for the eurozone and China. *Amanda Cooper, Reuters

Orient Energy Review Vol 6 No.07 2017

INDUSTRY NEWS

AITEO Takes Over Federation Cup •Splashes N25 m, N10 m on winners

ITEO, Nigeria’s foremost energy solution company, on Wednesday acquired the ‘Naming Right’ of the NFF Federation Cup, as an extension/addendum to the company’s sponsorship agreement with the Nigeria Football Federation. It is also part of the rights AITEO has under the original agreement.

Those rights will enable the acquisition of additional commercial assets from the NFF that are available and not encumbered, on a mutually-negotiated basis. To this end, the NFF Federation Cup, the oldest football competition in Nigeria, is henceforth to be known and addressed as “AITEO Cup” The duration of this aspect of the sponsorship is 5 years, similar to the main agreement (signed on 26th April 2017) on a Cost Value Arrangement and commencing from the 2017 season. This arrangement will see AITEO underwriting the costs of the organisation of the competition which encompasses the costs of organising the competition from the Round of 64 to the men and women’s finals, solidarity support to Football Associations of the 36 States and the FCT, expenses and indemnities of match officials, support to participating Clubs, Media, Branding/Activation and Prize Money to winners. Accordingly, for the 2017 season, the prize monies for the AITEO Cup will be N25million for the winner of the men’s competition and N10million for the winner of the women’s competition. The runner–up for the men’s competition will pocket N10million, with the runner–up for the women’s event going home with N5million.

The NFF and AITEO will, in due course, unveil further details of all the benefits of the extended agreement at a press conference. The Cost Value Arrangement of the transaction is for NFF and AITEO to, annually, decide the nature and value proposition of the AITEO Cup under the framework of the relationship, and AITEO would thus underwrite the cost as the competition’s ‘Naming Right Holder.’ The NFF team at the contract signing inside AITEO Group’s Lagos office said it was “extremely delighted” by the extended agreement, while AITEO chieftains stated “we are happy to do this for Nigeria.” Present at the simple but colourful ceremony were NFF President Amaju Pinnick, Deputy Managing Director of AITEO, Mr. Francis Peters, Barrister Seyi Akinwunmi (NFF 1st Vice President/Chairman, Organizing Committee), Mr. Shehu Dikko (NFF 2nd VP/ LMC Chairman/Chairman, Marketing, Sponsorship and Television Advisory Committee), Mr. Andrew Onyearu (Group Executive Director/Chief Legal Counsel, AITEO), Barrister A. U. Mustapha (SAN, Vice Chairman of NFF Committee on Ethics and Fairplay), Mr. Victor Okoronkwo (Senior Vice President, Commercial and Gas, AITEO), Ms Aisha Falode (Member, NFF Executive Committee/Chairman, Nigeria Women Football League), Mr. Ademola Olajire (Director, Media and Communication of NFF) and Mr. Ndiana-Abasi Matthew (Senior Manager, Corporate Communications of AITEO).

Schlumberger Signs $700 Million Nigeria Oil-Field Deal

By Dulue Mbachu

igeria’s state-owned oil company said it signed a deal with Schlumberger Ltd. to provide $700 million for the development of two oil fields in the country’s crude-rich south. The Anyala and Madu fields, estimated to have reserves of 193 million barrels of crude and 800 billion standard cubic feet of gas, will pump 50,000 barrels of oil and 120 million standard cubic feet of gas daily on completion of field development in early 2019, the Nigerian National Petroleum Corp., or NNPC, said in a statement published on its website. “Under the agreement, Schlumberger will contribute the required services in kind and capital for the project development until first oil,” the Houston, Texas-based company said in a statement. The offshore fields, also known as oil-mining leases 83 and 85, are owned 60 percent by NNPC and 40 percent by Lagos-based First Exploration & Production, which is also the operator of the joint venture. “Apart from providing funding for the development of the fields, Schlumberger would also provide other oil-field services on a limited exclusive basis,” NNPC said in the statement. Nigeria, Africa’s biggest oil producer, is expanding oil exploration and production toward reaching a proven reserves target of 40 billion barrels by 2020. The country’s reserves are currently estimated at 37.2 billion barrels.

*Coutesy: Vanguard

Orient Energy Review Vol 6 No.07 2017

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INDUSTRY NEWS

Chevron Nigeria Urges FG To Unlock Oil, Gas Potential By Margaret Nongo-Okojokwu

r James Okereke, General Manager, Downstream Gas, Chevron Nigeria/Mid-Africa, has urged the Federal Government to unlock the oil and gas industry’s production potential to improve Nigeria’s competitive position. Okereke made the appeal recently in Lagos during a presentation on “Overview of Oil and Gas Industry in Nigeria’’ to students of the Advanced Writing and Reporting Skills (AWAReS) at the Pan-Atlantic University. “For Nigeria to compete successfully, it needs to improve its competitive position and remove obstacles to investment and development. “To keep oil production stable, new developments are needed to offset natural decline of existing assets. “Nigeria is competing internationally for shrinking resources; International Oil Companies have cut production by 10 to 20 per cent. “Crude oil prices have dropped significantly by 55 per cent since 2014. To compete favourably in international market, we should make our business environment to attract investors.” Okereke said that oil and gas sector was important to the nation’s economy, adding that increasing investment and developing the country’s gas reserves would drive economic growth and attract investors. Gas production has multiplier effects. “Every one dollar invested in gas results in about three dollars increase in Gross Domestic Product (GDP). “You cannot keep taking out of a sector without putting adequate investment back; there cannot be development,” he said. According to him, honouring contract sanctity, simplifying approval processes for licences, solving Joint Ventures funding challenges and ensuring security of lives and property will enhance the country’s competitiveness.

He advised that the country should encourage investors by revisiting founding policies while also making new policies and laws. He said good policies form the bedrock for investments. According to him, to keep oil production stable, new developments are needed to offset natural decline curves of existing ones. “Nigeria has 11 largest oil reserves and nine largest gas reserves in the world. What we need is to improve the country’s competitive position and remove obstacles to developments,” he said. Okereke lamented the challenges the IOCs are facing in the country. He listed the critical challenges to include delays in contracting process policy of the government, weak implementation of industry laws and regulation, multiple taxations which is up to 14 in the industry and insecurity. On the Petroleum Governing Industry Bill, PGIB, Okereke said not all activities in the sector needs the PGIB. According to him, international oil companies, IOCs, operating in Nigeria have reduced their capital expenditures in the sector by 20 percent, adding that in the past 15 years, the country engaged in production without new capital investment. He said the oil and gas sector in the country has mainly been witnessing reselling of investments and facilities. He said one of the major challenges facing several production contracts in the industry is undue delays in getting timely approvals from government within the budget period of a contract where foreign exchange and inflation differentials will not change the original narrative of the budgetary preparedness for a particular job. Okereke explained that it always amounts to huge loss when a company targets to get an approval for a contract within few weeks only to get it after several months when costing of implementation logistics have all changed either due to forex scarcity or even relevance of the job in question. Chevron Nigeria Limited is sponsoring all the participants at the AWARES programme as part of its Corporate Social Responsibility, CSR.

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Orient Energy Review Vol 6 No.07 2017

TRANOS Launches End-to-End Factory in Lagos

RANOS, a diversified technology company based in Lagos Nigeria had a successful press launch on the 30th of June 2017 to officially unveil the brand, product and facility. The event was crowned with an exclusive tour of their state of the art facility. Since their existence in 2008, there has never been an official unveil of the TRANOS brand or products. In preparation for this, TRANOS deemed it fit to give their brand a new identity, tagline and website to further support their evolution of being leader in technology products and solutions. The brand is based on the philosophy that TRANOS is a knowledge-driven company who promises to add value to lives with innovative solutions and cutting-edge technology. Present at the event were members of the press, clients, bodies and associations (NIEE, NIMECHE, NIA, NEF, NSE, NSBE), representatives from the Ministry of The launch included a grand unveiling of some of TRANOS’s solutions which were done by the Managing Director, Jude Abalaka. The unveiled products cut across; Energy distribution devices and accessories, power generators like special DC hybrid generators for the telecoms industry, diesel AC generators, changeover switches and isolators, protection devices, power distribution boards, control and automation panels, as well as steel and plastic enclosures. The event was concluded with an insightful tour of their grand facility that fully showcased their capability. As the company approaches 10 years of operations in Nigeria, the management believes it can achieve even more. As Mr Abalaka puts it, “There will be challenges. But we are more than able to function at levels that are comparable to what you would find only amongst the world’s best technology firms.”

Orient Energy Review Vol 6 No.07 2017 www.orientenergyreview.com

COMMUNITY REPORT

Community Contractors to Enjoy 5% Interest Loan on NCI Fund By Oge Obi

s part of the efforts to grow the local economy, community contractors in the oil and gas industry will now enjoy a 30 per cent interest rate waiver from funds accessed from the Nigerian Content Intervention Fund (NCI Fund). The fund which is available to conventional oil and gas service companies at 8 per cent will be accessed by the community contractors at 5 per cent. The Executive Secretary, Nigerian Content Development and Monitoring Board (NCDMB), Engr. Simbi Wabote who disclosed this during an interactive session recently organised by the Board in Abuja for civil societies organisations (CSOs), stressed that contractors in that category execute small scale projects and would not pay the same interest rate as the conventional oil and gas service companies. Stating that the concession for the community contractors was in line with the Board’s Community Content Guideline and provisions of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act Wabote said that it is intended to promote the participation of genuine community contractors in oil and gas projects; integration of communities in the industry value chain as part of the strategy to grow the local econo-

my and promote peace and tranquillity in the communities. Revealing that the disbursement of the Content Fund to oil and gas companies will start this year, the Executive Secretary said that the loan will be disbursed directly to qualified companies by the Bank of Industry (BOI). And that the repayment period is for five years at eight percent interest rate. According to Wabote, the NCI Fund will cater for manufacturing, project financing and equipment purchase. Stressing that the key consideration for granting loan for any project to be the impact it would make. Disclosing the Board’s plan to establish a Nigerian Content Bank, Wabote said the financial institution will manage the utilisation of the Content Fund. “Within the next four years, we will have established the Bank and established a good governance process. We will have key stakeholders, including the civil society as part of the Advisory Board to guard against misapplication,” he stated. Appreciating the important roles played by the civil society organizations in the society, the Executive Secretary said the Board will work with Nigerian Extractive Industries Transparency Ini-

tiative (NEITI) to develop a sustainable model that will guide the participation of CSOs in Nigerian Content implementation. In his goodwill message, the Director of Communications at NEITI, Dr. Ogbonnaya Orji commended the Board’s engagement with civil society organizations. Adding that it is a confirmation of NCDMB’s disposition to openness, integrity and corporate governance. He noted that CSOs could assist the Board to push the boundaries of implementation and carry out advocacy campaigns. Orji described the Board’s plan to establish Nigerian Content Bank as a novel idea that should be realized. He further advised the Board to educate Nigerians sufficiently on the operations of the Nigerian Content Development Fund (NCDF), sanction companies that fail to remit one percent value of their contracts to the NCDF and give incentives to those that comply. The civil society groups that participated at the event include Socio-Economic Rights and Accountability Project (SERAP), Democratic Action Group, Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), the Nigerian Bar Association (NBA), Centre for Policy among others.

SUSTAINABLE DEVELOPMENT

CSR-in-Action, Worthy Partner in Building Nigerian Local Extractive Industry - Kachiukwu By Oge Obi

he Minister of State for Petroleum, Dr. Ibe Kachikwu has identified strategic partnerships as part of the strategies needed by the industry players to launch Nigeria’s extractive industries into global competitiveness. The Minister made this known in Abuja during the 6th Sustainability in the Extractive Industries (SITEI) Conference with the theme, “Building Local for Global”. Kachikwu noted that the country’s goal of transiting from local refining and mining to international and global competitiveness may remain elusive if stakeholders neglect strategic partnerships in their operations. The minister who hinted that several Nigerian companies have the needed capacity in terms of commitment, manpower and equipment to drive the local content policy framework, announced that “CSR-in-Action is one of such organisations which we are happy to partner.” An industry said to be faced with minimal stakeholder engagement, collaboration, as well as the lack of a guiding framework for the management of sustainability in the extractive industries, the Minister said, “Globalising our local economy goes beyond value retention and trade–offs, but rather, strong government demand for local content investment through creation of infrastructural facilities and developing local resources within Nigeria should be of paramount importance.” Speaking also the Minister of Mines & Steel Development, Dr. Kayode Fayemi said that government was committed to harnessing and chan-

nelling the massive potentials in her citizens for the overall good of the country and her citizenry. “We are in the business of not banning and need to engage the illegal miners to globalise our local economy.” In his remarks, the Executive Secretary, Nigeria Extractive Industries Transparency Initiative (NEITI), Waziri Adio, said: “First, we need to build local for local, then for regional, and then for global.” The Conference which is one of CSR-in-Action Advocacy’s core intervention programmes is said to be aligned with federal government plans to build local refineries, mines and develop indigenous entrepreneurs to achieve global competitiveness. The conference identified such challenges as Infrastructural failures, lack of regular maintenance on existing infrastructure, lack of local capacity and support for local entrepreneurs in the extractive sector, among others called on government to give immediate attention to the various issues. In its recommendations, the CSR-in-Action Advocacy called for support for indigenous companies as well as for increased local production, “The right environment, infrastructure, processes and policies must be created to stimulate not only indigenous com-

panies, but industries with strong forward and backward linkages to the extractive industries. “The strategy for the rehabilitation of existing refineries and construction of new refineries must be clearly delineated. We must identify the challenges within existing refineries, and ensure the rehabilitation process properly caters to same (including the flexibility of shelving elephant projects), and maximises existing resources; including funding, the statement read. Indicating its willingness to work with corporations to addressed some of the challenges, the conference convener, Mrs. Bekeme Masade, CEO CSR-In -Action said, “CSRin-Action will through the course of the year, work with interested entities to address some of the challenges highlighted. Even as we embark on this journey, we seek partnerships that can exponentially increase the impact of the work that we are doing, and help us to achieve our collective mission.” SITEI 2017 was proudly sponsored and supported by Aiteo, Lafarge Cement, Ford Foundation, Access Bank, NNPC, NCDMB, PETAN, NEITI, Federal Ministry of Petroleum Resources, Ministry of Solid Minerals Development, Zenera Consulting amongst others. CSR-in-Action is a conglomerate of 3 sustainability driven businesses; Consulting, Training and Advocacy, with a mission to redefine the sustainability terrain in Africa, through collaborative strategies with stakeholders aimed at attaining higher levels of corporate governance, workplace and sustainable philanthropy.

SUSTAINABLE DEVELOPMENT

Checking The Menace Of TB In Nigeria: The Agbami Example

uberculosis, popularly known by its abbreviation, TB, has existed for millennia and remains a major global health problem. It causes ill-health in millions of people each year and in 2015 was one of the top 10 causes of death from an infectious disease worldwide, ranking above HIV/ AIDS. In Nigeria, TB still creates a major health problem. The World Health Organization (WHO) in its 2016 “Global Tuberculosis Report” ranked Nigeria first in Africa and fourth in the world behind India, Indonesia and China. Nigeria is one of the six countries that accounted for 60 per cent of the total global TB burden last year, according to WHO’s report The Minister of Health, Professor Isaac Adewole, few days ago, lamented the high burden TB rate in Nigeria which is exacerbated by undiagnosed cases. According to Professor Adewole about 80 percent of the country’s TB cases are undiagnosed. That means, only one out of six TB cases in the country is diagnosed. In other words, there are five TB cases out of six cases in the country that are undiagnosed. This no doubt, presents a threat to our own health. The problem of TB in Nigeria is also compounded by the emergence of multi-drug resistance cases. Roughly, TB is said to claim over 1.5 million lives annually in the country in spite 10

of the fact that it is treatable and curable. It is therefore imperative for every individual and organization to make concerted efforts to fight this dreaded disease that is killing many people, negatively affecting our lives and threatening our quest for sustainable social and economic development. For sure, no Nigerian should die of TB. However, it is gratifying to see that individuals and organizations such as Star Deep Water Petroleum Limited, (a Chevron Company) and the Agbami parties– Famfa Oil Limited, the NNPC, Petrobras and Statoil- - have keyed-into the Federal Government’s TB program by contributing their quota to the fight against the disease. Recently, the Agbami parties donated modern laboratory equipment to the University College Hospital (UCH), Ibadan, Oyo State and also handed over to the Federal Ministry of Health, the production of national standard operating procedures (SOP) for TB laboratory diagnosis in Nigeria and national guidelines on biosafety for TB laboratories, sponsored by the Agbami parties. The modern laboratory equipment donated to UCH is expected, in no small measure, to transform the treatment of tuberculosis in the country. As Professor Temitope Alonge, UCH’s Chief Medical Director (CMD),

Orient Energy Review Vol 6 No.07 2017

noted, the story of treatment of tuberculosis in the country is anticipated not to be the same again following the donation of the laboratory equipment, an 80 KVA generator and 20KVA stabilizer with two inverters to ensure steady power supply to the laboratory. It is also important to note that the footprints of the Agbami parties in health and TB specifically, are not limited to Oyo State or the Federal Ministry of Health. In partnership with National Tuberculosis and Leprosy Control Program (NTBLCP), screening exercises were conducted in Bayelsa State. From the 14,352 presumptive Tuberculosis cases screened, 2,126 cases were detected. Also, contact tracing among 701 smear positive cases yielded 321 extra smear positive contacts as well as 92 Multi drug-resistance tuberculosis (MDRTB) patients were identified and 53 were treated. In 2016, the Agbami parties, partnering with implementing Non-Governmental Organizations, launched a TB Awareness Campaign to sensitize people in Kano, Lagos, Kaduna and Rivers States, on the dangers of TB, its prevention, management and treatment. From 2008, the Agbami parties have built, equipped and donated 25 chest clinics to institutions and hospital across the country as part of their efforts to support the efforts to control, treat and eradicate TB from the country. It is noteworthy that the Agbami parties are supporting the Federal Government’s quest to provide adequate and affordable quality healthcare to Nigerians, and to ensure the development of the country. A healthy population, no doubt, is important for the socio --economic development of a country. In the words of the Minister of Health, Professor Adewole “TB remains an epidemic. All of us must work together to really put the tag on it because TB is a preventable and curable disease.”

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LOCAL CONTENT

OTC 2017: PETAN Recommends Infrastructure Deficit Map

he Petroleum Technology Association of Nigeria (PETAN) has advised that an infrastructure Deficit Map be created as the county looks forward to attracting investment in the oil and gas sector to show areas and opportunities available for investment. The call was part of the resolutions contained in a communique issued at the end of the Offshore Technology Conference (OTC) 2017 held recently in Texas, USA by PETAN, signed and made available to the Press by its Chairman, Bank Anthony Okoroafor. The communique noted that with a graphic infrastructure Deficit map in place, alongside right policies and right infrastructure, investors’ interest would be aroused greatly to the benefit of the sector and the country at large. The line-up of activities on the Programme for 2017 includes: Opening of the Pavilion by the erudite and visionary honorable minister of state, Petroleum, Dr Ibe Kachikwu Panel session with the Theme “Global Energy Dynamics: Challenges and Opportunities in the Nigerian Oil and Gas industry. Sub-Saharan Africa Oil & Gas Networking pportunities Workshop (Angola, Ghana, Mozambique, Nigeria, Senegal, South Africa & Tanzania) Networking Dinner & Golf Tournament Short training courses on FPSO and Subsea Operations and Maintenance First was the Panel Session was kick started with an opening remark by the Honorable minister of state, Petroleum, Dr Ibe Kachikwu, and a presentation by the GMD of NNPC, Dr Maikanti Kachallah Baru. The session was moderated by the Mr. PIB, Dr Emmanuel Egbogah.

As a fall out of the panel discussion, Project 100 was proposed. The import is to Identify 100 Nigerians with capacities, energy and skill who can make a change. Also their handicaps are to be identified while the right policies are created to help them get to the finish line. On paucity of investment funds, it was advised that Harnessing Local Long term funds like Pensions, Sovereign funds into Long term productive and profitable infrastructure assets like gas, power, lines, refinery, utilities etc as done by other pension funds in developed countries will address it. To minimise challenges of bureaucracy, the communique suggested a cut in Red Tapism and reviewing downward of contracting cycle from 9 months to 6 months as well as reducing/addressing mutual/moral distrust between IOC and Govt by ensuring transparency, consistency, and predictability of policies. The communique equally recignises the need to address security issues in the Niger Delta through collaboration with government and other stakeholders. “We need to execute the promises we made to Niger Delta now by Planning security in new pipeline approval by DPR, while IOC’s comes up with a blueprint on how to update this. It also looked at the downstream challenges, first of which were Pricing and ethical issues and suggested Broadening of the space for participation in the industry; increasing the figure of barrels refined in-country; Changing the business model and Scaling up – leave allocations. PETAN to sustain and promote in-country capacities through bidding in Silos, setting-up of “consortiums

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like Bonga SW so that we can sustain build in-country capacities”. It is to collaborate to fund all these projects instead of raising funds in Silos, and Synergise in all assets work. Other resolutions include but not limited to reduction in Logistics’ costs from $23/bbl. to $2/bbl. by working together and sharing vessels, security and management of assets; knocking down cost by 40% by adopting Brazilian model. Having acknowledged that 90% of all projects need steel, the communique noted that having one functional mill in the next five years would be a catalyst for building all facilities in-country, while emphasising the need to build all facilities in-country. According to the statement, Lead Contractors in every project must have solid Infrastructure In-country, while projects must be handled with at least some measure of local contents especially those that can be acquired readily. In another note of advise, the National Assembly has been told to conclude work on the PIB as soon as possible. It was also agreed that Harnessing Local Long term funds like Pensions, Sovereign funds into Long term productive and profitable infrastructure assets like gas, power, lines, refinery, utilities etc as done by other pension funds in developed countries. The need for closer cooperation between various key ministries to grow the nation rather than working in isolation was highlighted– Petroleum, Power, Industry, Finance etc to synergise of developmental growth of the oil industry. This year’s conference with the theme: “Global Energy Dynamics: Challenges and Opportunities in the Nigerian Oil and Gas industry”, took a closer look at the oil and gas industry, and how to fully optimize the inherent potentials. It is noteworthy that more than 60,000 attendees and 2,400 companies/ exhibitors from around the world gathered at the annual conference, placing 2017’s OTC among the top 10 highest attended in the 49-year history. Also, more than 100 PETAN companies and 2,000 Nigerians attended the highly successful conference. As it has always been since 1969 inception of OTC, attendees got crucial exposure to new technologies and global developments in the energy industry.

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LOCAL CONTENT

Capacity Building: Govt Saves $50m Yearly from Domestication Of Training - NCDMB of the institution acquire the knowledge that was not imparted to them in tertiary schools.

omestication of personnel training in the oil and gas industry saves the nation about $50 million yearly, the Executive Secretary, Nigerian Content Development and Monitoring Board (NCDMB), Simbi Wabote, has said. He made this known at the graduation of trainees from Danvic Petroleum School in Lagos. Wabote, represented by the Board’s General Manager, Capacity Building Division, Ikponmwosa Oviasu, told Press men on the sidelines at the event that before the signing of the Nigerian Content Act in 2010, the nation was losing $100million to foreign training in the industry. He said: “We are here to support the graduation of the first set of trainees from the Danvic Petroleum School after the completion of six months training programme. That is the first phase and the second phase, which is critical, is the attachment of the trainees to the industry for the on-the-job training for 12 months. “Danvic has made them acquire the prerequisite experience that

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will make them ready for the industry. I can assure you once they finish the one year attachment to oil firms, they will become really employable and will be ready to face all the challenges in the industry. “The Board values human capital seriously and we have done similar things in the past by assisting geoscientists and attaching them to major oil companies – Shell, Chevron and Mobil, and marginal fields operators, among others. We work with all stakeholders to ensure we attain common goals. “Therefore, the essence of this training is to ensure that Nigerians participate in the industry by acquiring critical skills for work being done by expatriates. We will continue to support players, such as Danvic, to ensure that the trainees are made for employment in the industry. The Managing Director/Chief Executive Officer, Danvic Petroleum International Nigeria, owners of the petroleum school, Dr. Mayowa Afe, told The Nation that institution was established to bridge the gap between the university and industry to enable the students

He noted that the good thing about the institution was that upon graduation, the students would be helped to get jobs within one year so that the company can use it to assess you for proper employment. “I’m glad to tell you that the graduates are starting work this week and the companies will be paying up to per month as interns. Some people that graduated from universities in Nigeria stay up to five years in the labour market looking for jobs. They go for interviews and don’t get employed. “Therefore, this is a realisation of our long-term vision. Those that are unemployed, some of them have been outside the university for about five years and age is no longer on their side. They are not working and if they are called for interviews, they cannot pass. This is a school that is bridging the gap for them and we will establish the first oil and gas university in Nigeria. That is where we are going but we are starting with these steps to actualise it. If we are able to train our people and they become employable, it will certainly reduce the number of foreigners we bring into Nigeria to work. Our objective is to train Nigerians to become professionals that the oil and gas industry would be proud to employ,” he added.

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LOCAL CONTENT

Nigerian Content is good for business-ExxonMobil MD - NCDMB warns against single sourcing, selective tendering

new projects needed to sustain and grow Nigerian Content in the oil and gas industry. He reiterated the Board’s determination to shorten the industry contracting cycle, which informed the adoption of definite timelines for statutory approvals and pioneering the development and use of Service Level Agreements (SLAs). The first SLA was signed between the Board and the Nigerian Liquefied Natural Gas Company (NLNG) and it commits the parties to compliance with Nigerian Content Act and timely approvals of documents respectively. The model will soon be replicated with other operating companies.

ompliance with the provisions of the Nigerian Content Act is not only a legal and moral obligation for operating and servicing oil and gas companies but also a good strategy for improving profitability and sustainability of operations, the Managing Director of ExxonMobil Nigeria, Mr. Paul McGrath has said. He spoke on recently in Lagos when he received the management of the Nigerian Content Development and Monitoring Board (NCDMB), led by the Executive Secretary, Engr. Simbi Wabote. He promised that ExxonMobil will collaborate with the Board to achieve its mandate, assuring that “together we can transform things.” Admitting that the company had defaulted in complying with some provisions of the Act in the past, McGrath who was appointed in March 2017 assured that the oil giant would henceforth comply with all provisions of the Act alongside associated regulations.

He added that the company would also seek the Board’s guidance and assistance when faced with difficulties and exigencies of business. “The new leadership has zero tolerance for Nigerian Content violations and non-compliance issues. If we must do, we have to first discuss with NCDMB for guidance.” He also underscored the collaboration ExxonMobil had enjoyed from the NCDMB overtime, which contributed to the company’s successes. Speaking further, the MD pledged the company total support for the Board’s initiatives, stating that it is open to staff exchange between the two organisations and is working to open a liaison office in the Board’s new headquarters, when completed in Yenagoa, Bayelsa State.

Wabote also advised ExxonMobil to begin early to engage the Board on the development of its Owowo field to enhance utilization of in-country capacities. Speaking further, the Executive Secretary cautioned operating companies against engaging in single sourcing and selective tendering, stressing that reasons for such must be justifiable and discussed with the Board ahead of execution. He also warned companies against irregular spot hiring and utilization of vessels under the guise of emergency. On the status of the Nigerian Content Intervention Fund (NCIF) Wabote explained that disbursement to deserving companies was yet to start because the Board is working to perfect the governance process. He added that the Funds would only be disbursed through a banking process, after proper risk assessments so as to create the needed confidence and trust.

In his presentation, Engr. Simbi Wabote explained that the visit was in line with the Board’s efforts to encourage and support operating companies to introduce and execute

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LOCAL CONTENT

NCDMB Targets 100% Domiciliation of FPSO Integration …Board set establish Nigerian Content Bank … says local companies default on remittance of NCDF

he Nigerian Oil and Gas industry will between now and year 2027 aspire to domesticate the full capacity and capability required for the integration of Floating Production Storage and Offloading vessels (FPSO), the Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Engr. Simbi Kesiye Wabote has said. He gave the target at the public hearing conducted by the Joint Senate Committee on Petroleum Upstream and Gas in Abuja on Tuesday July 25th, 2017, with the intent to determine the extent of compliance with the Nigerian Content Act and utilization of the Nigerian Content Development Fund (NCDF). The new target for the industry follows from the successful in-country fabrication of six modules of the Total Egina FPSO and scheduled integration of the modules on the FPSO at the SHI-MCI yard in Lagos in September 2017, the first time these feats would ever happen in Nigeria. The FPSO is the biggest component of a Deepwater oil and gas project and the fabrication and integration of the modules at any location spurs multi-dimensional development and creates thousands of jobs. Another major target of the Board according to the Executive Secretary is to establish a Local Content Bank of Nigeria “to focus on establishment of facilities for domiciliation of services with emphasis on optimal use of local resource input.” Dwelling on the achievements of the Board, Wabote confirmed that Nigerian Content activities recorded six million training man hours and is now able to retain $5bn in the local economy from the annual $20bn industry expenditure, which ended up in foreign economies in the past. He stated that 36 percent of the marine

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vessels operating in the Nigerian Oil and Gas Industry were now owned by indigenous players, a marked improvement from total foreign domination of the industry before the implementation of the Act. Speaking further, Wabote cited the establishment of five world class fabrication yards as another evidence of Nigerian Content implementation, adding that “today, Nigeria is able to handle 60,000 metric tonnes of fabrication in-country.” He also mentioned the local manufacture of barites which is required for crude oil drilling operations, noting that NCDMB worked with the industry to support the establishment of a mechanized plant in Benue State for barites mining and beneficiation. On the NCDF, the Executive Secretary reported that international oil companies comply reasonably in remitting one percent of the value of their contracts but some service companies and indigenous operating firms default in their payment. He regretted that the impact of Local Content in the oil and gas sector had not been sufficiently linked to other sectors of the economy and canvassed for the support of key government agencies in deepening Local Content in the country. In his welcome address, the Senate President, Dr. Bukola Saraki, represented by Senator, Ahmed Lawan, Leader of the Senate, highlighted the importance of Local Content in economic development, adding that full implementation would help create employment and grow the national economy. He explained that the National Assembly was keen to ensure that oil and gas companies comply with the Nigerian Content Act, especially in the employment of competent Nigerians and utilization of local good and services in their operations. In their contributions, the Chairman Senate Committee on Gas, Senator

Bassey Albert Akpan asked the Board to submit a detailed report on the operations of the NCDF from inception. The report would include information on the beneficiaries, defaulting firms and amounts. He expressed disappointment that only three companies have benefitted from the NCDF since inception, stressing that “there is no need to warehouse the funds with CBN while Nigerian companies are suffering from lack of capital. There is no way they can build capacity.” In his submission, Chairman of PETAN, Mr. Bank-Anthony Okoroafor asked the Senate to support the NCDMB to ensure that at least 20 indigenous companies accessed the NCDF every year. He also proposed a guideline that would ensure that “companies that bid as lead tenderers should have the capacity to carry out more than 80 percent of the required work scope while companies that have not built capacity should bid as sub-contractors.” “Contract execution and distribution strategy should be such that Nigerian companies with proven capacities should be given preference in terms of percentage of work allocation. In addition, Nigerian companies should be given preference when reallocating any scope of work that could not be handled by the incumbent contractor.” The public hearing featured presentation by other stakeholders of the industry, including the Oil Producer Trade Section (OPTS), Nigerian Shipper Council, Petroleum and Natural Gas Senior Staff Association (PENGASSAN) Nigerian Medical Association, Institute of Chartered Accountants (ICAN), Nigerian Economic Summit Group (NESG) among others.

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LOCAL CONTENT

NCDMB set to raise Intervention Fund to N61. 2 billion By Dirisu Yakubu, Abuja, FCT

he Nigerian Content Development and Monitoring Board, NCDMB, is mooting the idea of increasing the Nigerian Content Intervention Fund by as much as 100 per cent. The fund, domiciled in the Bank of Industry (BOI), and currently valued at about $100 million is dedicated to lending qualified oil and gas operators for the execution of projects as a strategy to build capacity thereby encouraging the participation of Nigerian companies in the industry. The Executive Secretary of the board, Engineer Simbi Wabote, who disclosed this during his recent visit to the new Managing Director of the, BOI, Olukayode Pitan, said raising the pool fund would assist more deserving companies to fully optimize their operations and avail the nation their service and input in the deepening of local participation in the oil and gas value chain. It would be recalled that the NCDMB and BOI launched the NCI Fund in July 2016; however, the fund suffered long delays to come into operation, as efforts were made to fine-tune the governance procedural mechanism. The Fund replaced the original model which permitted the provision of partial guarantees and 50 per cent interest rebate to service companies which obtained facilities from commercial banks to assist them acquire asset and execute projects. Major interest groups in the oil and gas industry, including the Petroleum Technology Association of Nigeria, PETAN, had described the Fund model as a great initiative capable of addressing the paucity of funding for projects by Nigerian indigenous firms. The group said the inability to access credit by manufacturers, service providers, engineering fabrication and construction companies as well as other key players in the Nigerian oil and gas industry was affecting the capacity of indigenous firms to execute contracts. Since the launch of the Fund, Nigerian

operators in the industry have complained of difficulties in accessing the funds under the existing model, necessitating a change of strategy by the Board. As a result, Engineer Simbi said the revised governance framework for the Fund had since been finalized, while the updated Memorandum of Understanding, MoU, with the BOI is expected to be signed within the next few weeks to signal the take-off of the scheme. The Executive Secretary said one of the fundamental features of the revised MoU for the disbursement of the Fund was for the loans to be disbursed directly to beneficiaries by the BOI at single digit interest rate and repaid within five years. Engineer Wabote said only contributors to the Fund, with bankable proposals in the oil and gas industry, would be qualified to approach the BOI to request for a financing facility in line with best practice as obtained elsewhere in the developed world. The Fund is sourced from the statutory funding from the one percent deduction from the value of all upstream contracts based on the provisions of Section 104 of the Nigerian Oil & Gas Industry Content Development, NOGICD Act, with the Act providing that the funds be used for the development of capacity in the oil and gas industry. Subsection 3 of Section 104 also provides that “the fund shall be managed by the Nigerian Content Development Board and employed for projects, programmes and activities directed at increasing Nigerian Content in the oil and gas industry.” The NCDMB boss noted that whereas there were various intervention funds for other critical sectors of the economy, namely agriculture, aviation, mining and others, none was for the oil and gas sector before now; a development he said had hampered the growth of local oil and gas companies in Nigeria in the last couple of years. On his part, Mr. Pitan, said he was delighted at the partnership between the bank and NCDMB, saying that with the collaboration, Nigerian companies in the sector would be able to expand the scope of their operations thereby proving that given the enabling environment; they can provide some or most of the services currently being provided by multi-national companies operating in the land.

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He added that BOI, which was present in 21 states of the federation, was well positioned to support the Board achieve its objectives to effectively disburse and manage the loans for the oil and gas industry. Mr. Pitan assured that the BOI would work with NCDMB to source additional pool of funds for this vital sector of the economy. The Board had set up an advisory committee in 2012 for the NCDF, to deepen transparency and ensure involvement of key interest groups in the administration. Representatives of the international operating companies, PETAN, Oil and Gas Trainers Association, OGTAN, and BOI make up the advisory committee. Important as this collaboration is, stakeholders in the industry insists that the promotion of value added local content in moderate collection and value should be placed on existing in-country capacity, not patronage. Leverage, they say, should be given to Nigerian companies and help the young companies that are coming up to grow without compromising on capacity building in-country. There should be a sense of urgency because it appears as if the local content law battle has been won but the local content implementation is far from been actualized hence “Local content is equal to self-reliance.” And unless standard is well taken care of, the pursuit of local content implementation may be futile as no serious nations or citizens desirous to be taken seriously would ditch quality for questionable nationalism. It is partly as a result of this that the Standard Organization of Nigeria (SAN) is having a running battle with some local manufacturers of building materials who on one hand wants local patronage of their products and on the other hand, are failing in churning out good products that are as good as their foreign counterparts. All said, the Fund, if well managed will go a long way in enhancing the capacity of indigenous firms not only to produce maximally for local consumption but also boost their ability to provide employment to qualified local engineers, fabricators and other professionals in the oil and gas industry. What is important here is the need for an efficient and effective administration of the Fund to ensure that only qualified firms with proven managerial and productive track records have access to it. No doubt, the future is looking bright for local companies and coupled with the passage of a version of the Petroleum Industry and Governance Bill (PIGB), poor access to fund might be taking a back seat in the years ahead.

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LOCAL CONTENT

The Sorry State of Nigerian Refineries By Dirisu Yakubu with agency reports est refineries according to the research findings are Libya’s Ra’s Lanuf refinery built in 1984 with a production capacity of 220,000 barrels per day (bpd) and Port Harcourt refinery built in 1965 and expanded in 1989 to 210,000 bpd. South Africa’s SAPREF Durban refinery built 52 years ago with a production capacity of up to 180,000 bpd and Egypt’s Cairo Mostorod Refinery with 142,000 bpd, were ranked fourth and fifth based on their refining capacity. Within the last decade, Algeria’s over 300,000 bpd refinery at Skikda has undergone a full-scale scheduled maintenance.

he cost of Turn Around Maintenance (TAM) of Nigeria’s four refineries from year 2000 to date is nearly the total cost of building the refineries, report has shown. A total of 1.853Billion dollars had been spent to build the refineries in the past 17 years. The Port Harcourt refinery built in 1985 at $850 million has a 150,000-bpd capacity; the125, 000 bpd Warri refinery was built in 1978 at $478m and the 110,000 bpd Kaduna refinery was built in 1976 at the cost of $525 million. The refineries have continued to produce grossly below their installed capacity levels. However, investigations revealed that over $1.6 billion had gone into the maintenance of the four refineries since 2000. The Port Harcourt refinery, just like its counterparts in Kaduna and Warri has witnessed the worst maintenance in the period under review. The only publicly known TAM carried on particularly the Port Harcourt refinery was a routine maintenance on the facility 17 years ago and despite being one of the biggest in Africa’s, Nigeria’s refineries have suffered the worst maintenance failures in the last decade. Minister of State for petroleum Resources, Dr. Ibe Kachikwu last week admitted that conclusive turn around maintenance of Nigeria’s refineries have not been done over the last 10 to 15 years as this has left the plants “far dilapidated.”

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“Our refineries have not been maintained at the same levels that other nearby countries have continued to do theirs. Look at Ghana and Ivory Coast, the same refineries, about the same ages and working at over 90 per cent capacity,” The minister told a gathering of oil stakeholders in Abuja. Experts say that at the heart of Nigeria’s refining problems has been the lack of maintenance of the plants. A former Managing Director of both the Port Harcourt and Kaduna refineries Engr. Alex Ogedegbe said recently that refineries cannot be run properly in Nigeria because of the way they are organized. Referring to some of the African refineries mentioned, Engr. Ogedegbe said that because “the refineries are run by companies independent of the government, they understand the market and how a refinery is supposed to be run properly. Whereas in Nigeria, the refineries are owned and run by government,” In other words, “it is a monopoly,” he stated. Analysis of the research, showed that aside Dangote’s $9 billion refinery which when completed will be the world’ largest single train refinery with a production capacity of about 650,000 barrels per day, Algeria’s Skikda refinery built in 1983 is currently Africa’s largest refinery with daily production of over 320,000 barrels. Next in ranking among Africa’s five larg-

Algeria’s Skikda refinery usually undergoes at least one full-scale scheduled TAM on a 10-yearly basis as required by the Algerian law, information sourced from state media showed. Five years ago, Algerian state oil firm Sonatrach completely closed the refinery for up to six months to carry out improvement work. Last year, Sonatrach was said to have awarded engineering contracts to upgrade the capacity of the refinery. On the other hand, its CEO Amine Mazouzi in a December 2016 interview with markets intelligence provider, Oxford Business Group (OBG), said the country had initiated an ambitious programme to revamp the country’s three other existing refineries. While the plan has attracted 49 offers from international energy companies who are willing to commit around $6 billion, starting in 2019-20, Algeria will recover its historic role as a petrol and gas oil exporter. SAPREF Durban, South Africa’s largest oil refinery jointly operated by Shell and BP which started operation in 1960 about the time as Nigeria’s old Port Harcourt refinery was built, completed its refinery maintenance program in mid-2013 and is now working on a plan to conclude another circle of turn around this year, according to information sourced from its website.

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LOCAL CONTENT “We expect SAPREF to deliver a safe flawless 2017 Turnaround,” Ton Wielers - SAPREF’s Managing Director said in Columns, the refinery’s in-house magazine publication for April. SAPREF will import refined product when the refinery is shut down for the 2017 turnaround. South Africa has the second-largest crude oil refining capacity in Africa and has about six refineries, surpassed only by Egypt, according to Oil & Gas Journal’s 2015 estimates. In 2013, Oil giant BP unveiled plans to invest $596 million over the next five years to upgrade the SAPREF refinery. Also, South Africa’s state-owned company Petroleum Oil and Gas Corporation of South Africa (PetroSA) is pushing for the construction of a new 300,000 bpd refinery to be ready later in 2017. Egypt as part of an ongoing government plan to address petroleum product supply gaps has started an ambitious plan to increase the oil-processing capacity of the country’s Mostorod refinery one of

its largest, with a further refinery being constructed adjacent to it (the Citadel refinery). Oil minister Tarek El Molla told state newspaper in September last year the refinery is expected to begin operating by the end of 2017 as actual production is expected in 2018. The new Citadel refinery at the Mostorod Petroleum Complex is being built to refine 100,000bpd crude, the newspaper reported.While these four refineries continue to weather Africa’s difficult refining landscape, Nigeria, Africa’s number one oil producer and exporter continues to struggle to fix her refining system that has left the country condemned to petrol imports. Comparing the refineries in Egypt, Libya and South Africa with Nigeria, Ogedegbe said despite the fact these refineries are much older than NNPC’s refinery in Port Harcourt, turnaround maintenance were conducted on the refineries and they run

better. “The refinery in Port Harcourt runs at about 10 per cent of its capacity maximum in the last three years whereas those other refineries have been running at over 80 per cent of their capacities because they are well maintained. These are the differences and they are very important. The owner of a refinery needs to understand the technicalities, the business model and have the money. The federal government does not have the money to put into these refineries,” Also speaking recently, Professor Ibrahim Ali Mohammed-Dabo of the Department of Chemical Engineering, Ahmadu Bello University, Zaria said the major problem with the Nigerian refining system has been corruption. “We have been budgeting money to do this but when the money comes many (it is not used for purpose it was budgeted for),” Prof Mohammed-Dabo who led a team that built a mini-refinery in the ABU said.

GHANA REPORTS

First Oil Flows from OCTP Project Offshore Ghana Tullow Plans More Ghana Wells Once Maritime-Border Spat Settled

T F

PSO John Agyekum Kufuor is designed to produce up to 85,000 boe/d from 18 subsea wells. (Courtesy Eni) Eni has started production from its Offshore Cape Three Points (OCTP) block off western Ghana, three months ahead of schedule. The development covers the Sankofa Main, Sankofa East and Gye-Nyame fields, 60 km (37 mi) offshore, with combined resources of around 770 MMboe comprising 500 MMbbl of oil and 40 bcm of non-associated gas. Produced gas is dedicated to Ghana’s domestic market. The FPSO John Agyekum Kufuor is designed to produce up to 85,000 boe/d from 18 subsea wells. A 63-km (39-mi) subsea pipeline will transport the gas to onshore receiving facilities in Sanzuke for processing and delivery to the national grid, supplying around 180 MMcf/d. Eni CEO Claudio Descalzi said: “The launch of OCTP will provide gas to Ghana for over 15 years and the resulting electricity will give a real boost to the country’s development.” Other partners in the OCTP block are Vitol and Ghana National Petroleum Corp.

ullow Oil Plc plans to drill more wells off Ghana once a ruling on a border dispute is out of the way. Ghana and Ivory Coast disagree over their maritime boundary, frustrating projects to pump oil and gas offshore. In September, the International Tribunal for the Law of the Sea, or Itlos, will rule on the matter, likely clearing the way for an expansion of Tullow’s Tweneboa-Enyenra-Ntomme project, the company said. “We were aware of the dispute before we initiated the overall TEN project,” Paul McDade, chief executive officer of the London-based producer, said Wednesday. “Ourselves and our partners and the Ghana government took some legal advice from various experts globally around the likely outcome,” he said. “We don’t expect any material change.” Tullow has completed 11 wells at TEN and plans 13 more. It’s preparing to start drilling those “around the end of the year,” McDade said by phone. The shares rose 2.7 percent at 10:08 a.m. in London. Tullow earlier reported a 46 percent jump in first-half sales and maintained 2017 output forecasts, including at TEN. It expects the planned wells to boost production capacity at the project to 80,000 barrels a day, compared with first-half output of 48,000 a day. It will be ready to award a rig contract after the Itlos ruling, McDade

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said. “The potential for an improving outlook in Ghana as drilling resumes in early 2018 remains key to the investment case,” James Hosie, an analyst at Barclays Plc in London, said in a note. Separately, Tullow plans to start drilling a “high-impact” well off Suriname in early October, targeting 500 million barrels, Exploration Director Angus McCoss said by phone, describing the well as its “No. 1” prospect. Tullow operates the project with a 30 percent stake and expects results in early November. Drilling off the South American country will follow a recent discovery by Exxon Mobil Corp. off neighboring Guyana. Tullow will pay about $150,000 a day for the rig in Suriname, McDade said. That’s down from fees of about $600,000 a day before the oil-price collapse three years ago *Bloomberg

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INTERVIEW

Executive Order: “Local Content is our last chance to industrialize Nigeria” – Oye manufacturers, SMEs and all other stakeholders, - Member of the Nigerian South African Chamber of Commerce and Director of the Nigerian Kenyan Chamber of Commerce. In this interview

assily Oye Barberopoulos was born in 1962 in Lagos, Nigeria. He holds a BA in Economics from Rollins College, Florida, USA and a MIM degree from Thunderbird, School of Global Management Arizona, USA. He is the Managing Director of the Nigerian Foundries Ltd which incorporates two steel foundries, one aluminium foundry, a fabrication company and a Service/trading provider. Vassily is Chairman of Manloc Group (Manufacturers Association of Nigeria, Local Content Group) and represents on NCCF all material and manufacturers stakeholders. He is also member of the Governing Council of NECA, Executive Director of Nexportrade Houses Ltd - a platform to promote non-oil intra-African trade for

with Orient Energy Review Editor, Margaret Nongo-Okojokwu, Oye speaks on the recently passed Executive Orders by Nigeria’s Vice President, Prof. Yemi Osinbajo, aimed at improving private and government’s business operations in the country and its impact on standards, manufacturing and local content in the oil and gas industry amongst others. Excerpts. What does MAN stand for? MAN is basically the voice of manufacturers; you can only be a member of MAN if you are a manufacturer. And you can apply to become a member and your facilities would be vented. It is basically the main body to talk about manufacturers, about their problems and successes and how

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to industrialize the country forward. Each country of the world has a manufacturer’s association or industrial association as the case may be and it is tied also to the government of the country because you cannot talk of increasing the Gross Domestic Product (GDP) or Grass National Product (GNP) of a country without talking about the manufacturers. Manufacturing cuts across every sector of an economy. Zeroing it down to manufacturing in Nigeria, what has MAN been doing all these years? We know from statistics that manufacturing contributes very little to the country’s GDP. How has the Association been surviving over the years? Let’s put it this way. Many past governments did not see the relevance of manufacturers. Manufacturing was very big in the 60s and late 70s when most countries that had gotten independence from the colonial masters followed import substitution industrialization. Afterward, with the oil prices plunging, manufacturing took a huge hit. So, prior to the entire period, the fortune of manufacturers dwindled and successive governments saw the organized private sector more as an evil than as partner. The organized private sector was seen more or less as being the problem of Nigeria especially by the many successive military governments.By and large, I think manufacturing has assumed better relevance since we have started having civilian governments since the time of President Olusegun Obasanjo when we put focus on exports grants. But again, MAN should be at a much higher place than it is today. I will say relevance is starting to come back. The fact that our Acting President has signed these Executive Orders promoting manufacturing and it is not coincidental that the three of them have to work together and the aim is to promote industrialization. It is admittance that we need local content for the entire country because local content is our last chance to industrialize Nigeria.

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INTERVIEW On May 18, 2017, the Acting President, Prof Yemi Osinbajo issued three Executive Orders following the campaign for Nigerians to patronise more of the country’s local content and or product and jettison the consumption of foreign goods to boost the country’s economy; What do these Executive Orders mean for MAN and the entire country and what would be the shape of manufacturing going forward?

quantity should be there. Once this is done, those who cannot meet the standard will have to find a way to meet it.

An Executive Order is meant to drive the formation of policies and the framework for implementation. These Executive Orders are basically for public procurement and a framework will have to be set up. Right now, I understand that at the House of Representatives, they are talking about local content for the entire country which is an important aspect. We are hoping that these Executive Orders is the beginning of getting local content for the entire country. This means a lot to the manufacturers. One of the biggest problems we have is the lack of adequate demand for our products. We have other problems including the infrastructural challenges that we all know about but the lack of demands for Made-in-Nigeria products is an important aspect. If you don’t have people buying what you make, even if you are producing at a standard, if you don’t have the liquidity either to expand or meet up to quality standard; that is a huge challenge. At the end of the day, it falls down to each manufacturer, to each company who have to seize this as the way forward. There might be companies who want to have their products patronised but who are not willing to meet the quality standard. An important aspect of these Executive Orders and for local content manufacturing in Nigeria is that when the government issue out tenders, the tenders should not only specify the description but should specify the quality. If the quality is not specified, there will be problems because people will be supplying different types of quality at different prices and that means we are not having standards. One of the aspects that we have succeeded between NCDMB, MANLOC and MAN is to bring the Standard Organization of Nigeria (SON) into our fold because there is a need to start setting for the oil and gas industry the right standards and adopting those standards into Nigerian standards. Once tender is issued, the standard, quality and

I don’t agree with your submission. That is what people say but I don’t agree with that all the same. Any company that has survived in Nigeria for over 15 years has only survived because of quality. What Made-in-Nigeria products may probably have is competitiveness with products from China and India where there are export subsidies and so on. Here, we are working in an environment that is extremely harsh from the interest rate being too high to getting financing and so on. An example is the cable industry. People are buying Nigerian made cables because they are of good quality and they are not fake. You can be sure that your house will not get burnt, just like that. In my own line of business, we have only succeeded because we stick to quality standard and international standard.

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Quality is one reason people don’t patronise Made-in-Nigeria goods. What is MAN doing to ensure that products meet the required standards? What is that marginal effort being put in place to prevail on your members to improve on their quality?

What does it mean to stick to standard? It means you need to have a laboratory that can attest to that quality. One thing is to have laboratories but they must be accredited too so that they can give you the right readings. We have come a long way when it comes to setting standards. So, what are you doing to up your game in that aspect? We have actually brought in SON and we are collaborating with them to create enlightenment amongst manufacturers on the importance of quality. There has been a lot of talk anytime a building collapses maybe due to the quality of cement or steel rods and so on. It boils down to everyone. If you are a quality manufacturer, you should be able to show that you’ve got the equipment, accreditation for your laboratories and your laboratories that your quality is standard. In a country like India, the job is done by government or government agency. Unfortunately, we don’t expect everything from

government. During your presentation at the Bonga event, you mentioned Nigerian standard. Can you elaborate a bit more on this? Every country has its own standard and some countries have developed their own while some have adopted theirs. So, Nigeria standard means if you are producing paint for oil and gas; Exxon Mobil has its standard, Shell has its standard, you should have standard. It is an international process of bringing standards together and it becomes the Nigeria standard. That is the job of SON. You will then be able to show which other standard this Nigeria standard is agreeable with. But you see a lot of people flout the ISO standard… (Cuts in) …ISO is only a management standard. It is essentially about how you run your company. Basically, ISO is document what you do what you document, that’s all. Even Mama Osaro who has a bukka can easily get ISO. If you are documenting and you state that you are going produce a product to a standard that is very low and you go ahead to do it; you’ve gotten an ISO. There’s a big misconception about what standards are. Do you have the assurance that when it comes to Nigerian standard, it will be up there with international qualities? It is an international process and once standards are set, it is up to manufacturers to enforce those standards or not. Enforcing standards is also based on those who are issuing out the tenders. So if Federal Government Issue tenders and insist that specified standards are met and ensure that those who don’t meet those standards are disqualified; compliance will come. If we are ready to accept any kind of standard, compliance will be there. Do you agree that policy making and implementation has important role to play in all this? Very well! As a country, we have about 20 years’ experience in local content especially in the oil and gas industry, ...........continued on page 24

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Orient Energy Review Vol 6 No.07 2017

INTERVIEW

Nigerian Senate Affirms Public Private Partnerships For The Reformation Of Refineries

so there’s nothing new for us to reinvent. It is basically to take all our experience and whatever we’ve done in oil and gas and pass it to the entire country. We should also create an apex organization under the Presidency or close to it that will enforce, monitor and evaluate whatever the Nigerian content emphasizes. What is MANLOC’s relationship with the NCDMB? On NCCF, we represent materials and manufacturers. Recently, we have been put in the committee of the NCDMB. We represent MAN on local content committee in the power industry which is under NERC. So, we represent MAN, we are an arm of MAN on anything that has to do with local content. Tell us more about the R & D and….? (Cuts in) …It was basically our first meeting and most likely, it will be before the end of September and it is going to involve R & D done in the universities, research organizations and companies. Everybody should be able to come and showcase what they are doing. In the United States, they have succeeded in making a certain product for the last 20 years and here we have never succeeded; there’s still an R & D involved. How closely do you work with the universities especially in the area of research because R & D is very important to manufacturers in Nigeria? MAN suggests to the association on what needs to be done. It is up to each manufacturing company to spend money on it. We make suggestions but the decision is left for the company to make. In Europe and America, you see universities partnering with industries to be able to develop projects and new materials and so on. Have you suggested this government at all as it is done in the United States of America where a company gives students some form of scholarship to learn from the manufacturers? We have all these systems in existence. Research institutes are in existence as well. The challenge is that there appears to be no modus operandi on the way forward. The problem in Nigeria is that there are often too many singular efforts but no concentrated effort. Yes, MAN is pushing for local content, so is the Chambers of commerce and others. But that togetherness is not there. At the end of the day, it turned out that it’s more a divide and rule kind of effort and that’s sad. Thank you very much for your time My pleasure.

n a bid to strengthen international relations, the Italian Government through ENI (an Italian oil and gas company in which it owns 30.3 percent shareholding), committed to support the rehabilitation of the country’s refineries, specifically the Port Harcourt refinery in which it has a long history of technical involvement. Earlier this year, the Minister of State for Petroleum Resources and Chairman of the Board of the NNPC, Dr. Kachikwu met with ENI CEO, Claudio Descalzi, to discuss further cooperation between ENI and the Nigerian government within the energy sector. The NNPC and ENI, through its local subsidiaries, Nigerian Agip Oil Company (NAOC) and Nigerian Agip Exploration (NAE), signed a Memorandum of Understanding (MoU) to promote new activities which would significantly boost Nigeria’s social and economic development. In the upstream sector, oil and gas production operations would grow with an increased focus on development and exploration activities in the onshore, offshore and Ultra Deep Water operated areas. The parties also agreed to explore a potential collaboration refined product security via technical services for the rehabilitation and enhancement of Port Harcourt refinery, while power generation and access to energy would be further enhanced by doubling the power generation capacity in Okpai IPP through the fast track development of its Phase II, making it one of the largest combined cycle power plants in Africa. The MoU also set the basis for the assessment of the electricity national grid reliability alongside efficient renewable energy projects, to secure energy accessibility in Nigeria’s most remote areas. “There is absolutely no concession framework for the Port Harcourt refinery or any of the refineries. Our mandate has always been to grow our production levels year on year, cost-savings for the country, and an increased dollar revenue. To propel this initiative, we realized we needed a scale-up in the technical know-how in our 100 percent indigenously-operated refineries, as well as private sector participation to crystallize the rehabilitation program,” Dr. Kachikwu said. ENI/NAOC’s decision to partner with Oando to explore technical and funding options to support the government’s refinery rehabilitation efforts is understandable taking into consideration the tripartite long standing working relationship in upstream and DSDP Joint Venture (JV) contracts. With the refinery privatization scheme proven untrue, the Senate has been widely applauded for its oversight of the NNPC, reinforcing the long-running mandate of the Buhari administration regarding transparency and accountability by all arms of government and within the private sector. The Federal Government has increased efforts to implement pertinent and active reforms to develop a more stable and enabling oil and gas landscape to tackle capital flight, create jobs, grow infrastructure and amenities, and impact the country’s GDP. The crude processing nameplate capacity for the nation’s refineries stands at Port Harcourt – 210,000 bpd, Kaduna – 110,000bpd, and Warri – 125,000 bpd. However, all

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three refineries supply a fraction circa 19% (2,009kt) of the nation’s Premium Motor Spirit (PMS) requirement (10,800kt) on an annual basis. This equates to an import burden on the Federal Government in excess of $7bn annually and annual export refining margins of ~$768m.Turn-around Maintenance (TAM) is also required every 18 months for the refineries, instead of the expected 20 years without required levels of maintenance A long-winded privatization exercise under the auspices of the Bureau of Private Enterprises (BPE) was held from 2003-2007 for the Port Harcourt refinery with Blue Star Oil Services Limited emerging the preferred bidder with a successful bid of $561 million. Almost immediately Blue Star opted out of the investment, and was fully refunded by the Nigerian Government. The premise for refinery privatization was subsequently shelved. In light of the current financial and technical deficiencies of the NNPC and avid interest from private companies to spur the sector, the current administration publicly called on private partners, local and international, to support the reformation program and get the refineries back up and running to full capacity. This reinforced a commitment made by President Buhari and Kragha in March 2017 proposing a new approach to the rehabilitation of the refineries via private-public partnerships (PPPs). Via its midstream vehicle, Oando Gas & Power, Oando has often taken up the mantle of supporting the government in economic advancement through PPPs. Its first mover role in the gas sector has seen the development of almost 300km of pipeline infrastructure in the South-West and South-East regions of the country, providing innovative energy solutions to key industrial hubs and over 23 million people. ENI/NAOC has substantial expertise and local knowledge as a refiner of international standing, and has successfully built and run five refineries in Italy and Germany. The company built the the Sannazzaro refinery, similar in complexity to PHC refinery with a capacity of 200kbbl/d, and owns the proprietary technology that delivers Europe’s most efficient refinery. Eni also produces 4 million boepd, a stark contrast to Nigeria’s estimated 2 million boepd. “As a company, our track record shows we have consistently worked with the government in creating solutions for the oil and gas industry and the country at large. We are not new towards working hand-in-hand with the government in creating infrastructure to be able to utilise a common carrier for the entire industry to benefit. What has been agreed upon today is the opportunity to try and establish a framework, which requires input from both the public and private sectors,” Tinubu said. Last year President Muhammadu Buhari’s approved efforts by the Petroleum Ministry for the potential engagement of strategic investors with refining experience and funding capacity to partner with local players with a firm understanding of Nigeria’s downstream oil market to revamp the refineries. Courtesy: Sweetcrude Reports

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COVER STORY

Leveraging Technology:

Africa Set to Ride On Waves Of Boom & Bust Exxonmobil Producing Nigeria Unlimited: â&#x20AC;Śtargeted to increase the current average production level to above one million barrel per day. The East Area Additional Oil Recovery project represents

frica, had over the years, emerged as the worst victim of the volatile global crude oil and gas market. The continent has failed to utilize the resource to hasten its growth and development. This, according to analysts, was as a result of different factors, ranging from the use of outdated technology and bad policies among others. This article tends to explore the losses and setbacks the continent had recorded over the years as a result of the volatility and efforts it is making, through technology to weather the storms of the industry, either in periods of boom or bust. Africa, and by extension, oil and gas companies in the continent, have always been at the receiving end of the volatile global crude oil and gas market. Every time there is a sharp drop in the prices of crude oil

over a sustained period, the biggest casualties are African oil and gas companies and the economies of the continent. On a number of occasions, many of oil firms were either forced to shut down or acquired by other companies with foreign affiliations, while most African economies, especially oil-producing countries, were plunged into crisis. In times of a sharp drop in prices, many exploration and production projects were either suspended or discontinued, workers were laid off, oil assets were sold and bought; government revenue decline sharply, while the value of currencies drop. Oil producers, including BP, Shell and Total, had already made moves to reduce capital expenditure through a range of measures such as instituting pay freezes, reducing headcounts, deferring or abandoning investment and even changing

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business models. In its Africa oil & gas review, titled, â&#x20AC;&#x2DC;The choice to change,â&#x20AC;&#x2122; Analysts at PriceWaterHouse Coopers (PWC) said period of low oil price had consistently led to reduced level of activity among industry players, and also have a crippling effect on countries that historically depended heavily on oil and gas revenues. According to the report, Nigeria, for example, relied on crude oil sales to make up 70 per cent of its government revenue, adding that the sharp decline in price has, therefore, led to a prolonged economic crisis. Angola, it said, had also been hard hit, as it is highly dependent on oil revenue. The country collected $468 billion in oil revenue from 2002 to 2014 and as was the case in Nigeria, the government has taken measures to restructure the national oil company in an effort to turn things around. www.orientenergyreview.com

COVER STORY It said, “There no longer seems to be as much focus on East Africa as there has been in recent years, and companies seem to be scrambling to spend their limited capital budgets in countries with proven resources and decent (if not favourable) fiscal terms. “Despite the trend to avoid frontier areas, Kosmos Energy made a considerable gas discovery in Mauritania during the course of 2015.” PWC further explained that investment in the oil and gas sector is likely to become a more critical issue in coming years, especially as the low oil price has led operators to defer FIDs (final investment decisions) on over US$300 billion of projects. The report added that with a persistently low oil price predicted for the immediate future, this raises the question of when producers will begin investing again in sources of new production to meet forecast demand. It argued that foreign investment continues to wane, and oil company stock prices continue to experience declines, despite heavy effort by oil majors to maintain dividends. The report said service companies have been the hardest hit with some having cut distributions by a whopping 82 per cent lower than the peak rate.

For Mozambique, the report stated that though the country has impressive projects outlook, timing for the onshore Afungi terminal was still uncertain, and low oil and Liquefied Natural Gas (LNG) prices, as well as infrastructure challenges, would most likely delay Final Investment Decision (FID). It also projected that exploration and development would proceed slowly due to the low oil price environment, while license holder are waiting for the export projects to come online before proceeding. In general, the report said industry activity throughout Africa and the world has slowed greatly due to cost cutbacks across the board, noting that exploration and production (E&P) activities had suffered the most, irrespective of a few discoveries in countries like Angola and Mozambique, as well as some sizeable gas discoveries in Egypt. www.orientenergyreview.com

Continuing, it added that the low oil price had afforded some gain to crude oil importers like South Africa, Kenya and Ethiopia and end consumers, but African exporters have been hit hard. “A number of Africa’s top oil producers, including Nigeria and Angola are being significantly impacted since the majority of their fiscal revenues originate from crude sales, and they are struggling to cope with the low oil prices. A critical consideration is the breakeven oil price that sits at almost US$80 for Nigeria,” the report noted. Given the high capital costs in oil and gas sector and the long-term investment cycle, the analysts noted that oil and gas producers have little alternative but to relentlessly focus on cost. According to the analysts, layoffs, reduced capital expenditure budgets and aggressive discounting across the supply chain, reflect a sector trying to adjust to a new reality. The analysts stated that while the much-heralded wave of consolidation across the sector was yet to be realised, it is clear that more transactions may well follow a period of financial distress.

“There are of course other trends shaping the oil and gas sector. With the ongoing emphasis on cost reduction, demand for innovation in technology will grow. Whether it is the more widespread application of the digital oilfield or the use of drones to undertake offshore inspections of pipelines, technology is key to reducing cost and improving operational efficiency,” it added. In their own view, analysts at McKinsey Oil and Gas stated that over the past several years, the global oil and gas industry has had to navigate very choppy waters. According to them, after a prolonged run of high and growing rig counts, mega-capital-expenditure projects, and plentiful capital to support investment, oil prices slid precipitously in 2014 and 2015, adding that within a matter of months, oil companies that had invested heavily based on rosy forecasts were slowing or even halting operations. Despite the challenges posed by low oil price, stakeholders are unanimous in their views that Africa still offers significant opportunities, especially in its oil and gas sector. Already, governments and oil firms in the continent had commenced preparation for the future, especially having realized that the future would certainly look very different to the status quo to which they are accustomed.

“

Despite the trend to avoid frontier areas, Kosmos Energy made a considerable gas discovery in Mauritania during the course of 2015.”

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COVER STORY

Key strategies that they have started developing, according to experts, would be adaptable to a number of possible future scenarios, meaning that the cyclical commodity prices will not impact them as drastically as in the past. Chief among these strategies is the use of technology and deployment of innovation. Again, McKinsey in one of its reports stated that with recent technological advancements, oil executives should consider digital technologies with the potential to transform operations and create additional profits from existing capacity. It stated that its research found out that the effective use of digital technologies in the oil and gas sector could reduce capital expenditures by up to 20 per cent; it could cut operating costs in upstream by 3 to 5 percent and by about half that in downstream. In the report titled, ‘The next frontier for digital technologies in oil and gas,’ the analysts said thanks to the latest technological advancements, Africa is now poised for a second digital age that could further reduce costs, unleash unparalleled productivity, and boost performance significantly— if executives can harness the right technologies to support their business strategy. They noted that making better use of existing technology can deliver serious returns, up to $1 billion in cost savings or production increases, adding that executives that make their organizations more digital will be well positioned to pursue new growth opportunities.” They said, “The oil and gas industry is tailor-made for this transformation: operations typically span multiple regions, with heavy capital investments and extended supply chains.

The visibility and clarity delivered by digital technologies and advanced analytics can give executives unprecedented, granular views into operations, increase agility, and support better strategic decision making. “Digital enablers, from process digitization to robotics and automation, can also help realize this potential by supporting processes in dynamic ways.” McKinsey further stated with the current oil and gas market, companies need to reinvent themselves to improve productivity. According to analysts at the company, while capital expenditures or acquisitions might give executives pause, investing in digital technologies is a no-regrets move that could increase production from existing operations. “Since these technologies are readily available and have proved their value in the form of reduced operating costs, increased efficiency, and revenue generation, oil companies should move quickly to embrace digital. It could be the difference between leading the next wave of industry innovation and being left behind,” they said. Also commenting on the issue, Roman Kilisek, an analyst for Breaking Energy said, “The key to unlocking reserves are experience, engineering innovations in deep-sea drilling and advances in technology – that is, increased computer capacity as well as new seismic equipment – all together allowing for exploration of previously out-of-reach subsea layers of rock.”

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Among a number of companies already leveraging technology to ride on waves of boom and bust in the near future is Obijackson Group and its subsidiaries. The group had continually deployed technology delivering high quality services to companies across key sectors, ranging from oil and gas, construction, aviation and fabrication among others. One of its subsidiaries, Energy Works Technology, is expanding its capacity into the fabrication of super duplex stainless steel, a kind of welding and fabrication that is required for subsea facilities. Another of its subsidiaries, B&Q Dredging and Nesthak, a horizontal directional drilling company, had through the use of technology engaged in a massive dredging project in Bayelsa State and in the laying of pipes under roads and rivers for the OB3 pipeline project respectively. Particularly, B&Q Dredging, a dredging company, helped in dredging the River Niger for the Second Niger Bridge project, while Nesthak is currently involved in helping to cross the Ase River in the OB3 pipeline project, with the River Niger, being the next target, a distance of 1,800 meters. Nesthak was engaged to drill underneath the River Niger to pass the pipeline, so that it is not laid in the water.

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COVER STORY

Mr. Simeon Tor-Agbidye, Assistant General Manager, Group Business Development, Nestoil Limited, said as part of its survival strategies, the group was is optimizing its processes so as to become very competitive and is also deploying more equipment and training people to be more efficient. He said, “All the operators are talking about low cost, high quality; but once we optimize, which is what we are doing now, we would become very competitive; we would have businesses. Even if oil price is $20, we are there; our services would be there for people.” Also, Royal Nigeria Emerging Technologies is making significant inroads into subsea technology domiciliation in Nigeria and is seeking to domicile umbilical technologies. The company is also seeking to establish facilities for the assembly, termination and testing of subsea controls and distribution equipment including subsea umbilicals. Managing Director, Royal Nigeria Emerging Technologies, Mr. Anthony Okolo, said the stage had been set for a more expansive domiciliation of this crucial subsea technology in Nigeria which has its first phase development strategy in Port Harcourt. On his own part, Executive Director of the company, Mr. Ivan Paoli provided clarification on the need for domiciliation of subsea technology in Nigeria and described that umbilicals are part of the building blocks for subsea development in oil and gas industries which offers more to Nigeria in terms of sectoral linkages to the economy. He stated that domiciling this technology would limit more than $40 million of capital flight per year while providing transferable skills and capacity for the aerospace, agriculture, automotive and hydraulic industries. Another company, CB Geophysical Solutions Limited, is currently offering proprietary software and technology in seismic acquisition and processing, stratigraphic and structural interpretation, integrated reservoir characterisation, geologic model and reservoir simulation. The company is providing techni-

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cal solutions to complicated geological and reservoir development problems in complex sedimentary, carbonate, clastic and fractured volcanic reservoirs. The company’s technical solutions range from planning and execution of exploration projects, assessment for prospect and field, designing and documentation of field development plan, and integrated approach for brown field re-development, as well as enhanced oil recovery projects. the case of Dorman Long, the company said it has the facility to produce advance work and various industrial applications based on specially developed technology. NigerDock is offering integrated logistics services, storage and warehousing services, offshore logistics, vessel supply base support services, waste management, cargo handling and heavy lift operations and 3rd party ship handling & management to operators in Nigeria and the rest of Africa,.

in Nigeria, Uganda and Ghana. AOS Orwell is the first truly indigenous African Oilfield Services Company with access to fit for purpose technology and a proven record of technology transfer into Africa - and the product line diversity to compete with the biggest internationals. IFS Africa, a South African company, is developing and delivering agile, component-based software for enterprise resource planning (ERP), enterprise asset management (EAM) and field service management (FSM).

Its fully equipped base and fabrication yard boasts a wide variety of mobile plant and equipment including self propelled mobile trailers (SPMTs), container handlers, tele-handlers, forklifts and over 25 mobile cranes with up to 500 tonne capacity. The facility has its own power plant generating up to 8MW and bespoke fabrication, rolling plant, paint shops, offices, accommodation services, warehousing and laydown facilities. The company offers a solution for onsite access to multiple project support facilities within a free zone environment providing a competitive cost base for project support and execution. AOS Orwel, with operations in Ghana, Uganda and Nigeria, is building on its expertise in oil well construction, process automation, instrumentation and control; OCTG, conductor casing & machine shop services. It delivers access to the world’s best technology through long-standing relationships with world class OEM’s such as Emerson, NOV, FMC, SDI, DSI, Tercel, EATON, 3P, DeTronics, Hoerbiger and others, as well as true local content gained through its investment in its management and staff

“

Since these technologies are readily available and have proved their value in the form of reduced operating costs, increased efficiency, and revenue generation, oil companies should move quickly to embrace digital. It could be the difference between leading the next wave of industry innovation and being left behind,”

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COVER STORY

“

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

The company’s user-friendly software allows oil companies meet and even anticipate changes in technology and business so that you can stay one step ahead of your competitors and the times. IFS solutions offer the flexibility and power needed to address the many aspects of oil and gas recovery and field service operations. IFS solutions also boast extensive capabilities, including mobile scheduling,

Orient Energy Review June, 2017

GPS monitoring and resource tracking, make it the industry leading solution for oil and gas field service operations. Baker Hughes, a General Electric company with operations across Africa is deploying intelligent well systems that remotely monitor and control oil and gas production or water and gas injection. They allow the change of flow from/to individual zones without intervention. They also have well monitoring solutions, comprising permanently installed electronic and fiber-optic systems that help improve production management and optimize reservoir performance. It has production decision services, which include visualization and analysis software and provides consultation to support production optimization, reservoir management, and asset integrity programs.

using technology, but it has placed the US at an enviable height. But Mrs Duntan West, Managing Director Wonderworks Nigeria Ltd, sees the prospects in this. She said “When Fracking was introduced in the States it was an expensive alternative to importing crude oil, but with the advancement of technology the cost of fracking is gradually being reduced and this had had a negative effect on oil producing countries like Nigeria, who depends on the exporting of crude oil for her economy. The United States were one of the largest importers of crude oil but with fracking and a huge reserve, Nigeria needs to be looking cheaper ways of producing crude oil. West added. From the foregoing, it is seen that Africa is fast learning from its past and taking a firm position to remain relevant and profitable in these times of boom or bust.

Meanwhile, as technology evolves, so also do nations as well as the operations of their sectors. Fracking in the United states has been done

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TALKING POINT

Bayelsa has the Infrastructural Base for Oil and Gas Investment - Gov. Seriake Dickson

overnor Seriake Dickson of Bayelsa State was one of the dignitaries that graced the 2017 Offshore Technology Conference which held in Houston, United States of America. In this brief interview with Orient Energy Review (OER) at the Offshore Technology Conference (OTC), Dickson spoke on the readiness of Bayelsa to welcome potential investors in the oil and gas industry amongst sundry issues. Excerpts! Your Excellency, what is your state doing in terms of exploiting its oil and gas resource endowment Bayelsa is historically the place where the story of the Nigerian oil and gas started, I have discussed with the Minister that we like the policy thrust and that by this time next year, we will like to work with them by hosting this kind of event in Nigeria and if possible bring it to Bayelsa. Weâ&#x20AC;&#x2122;ll like to co-host it with them. We like to see how we can work together to build skills and promote investment in this critical sector. How do you intend to provide incentives for these kinds of investments because by the time they all come together, they will also need some support from government?

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The incentives are already on ground and those were the issues I talked about. We have provided a safe and stable operating environment. Bayelsa is one of the safest states in Nigeria. Forget about some of the negative stories people bandied about the Niger Delta and about our country generally. People work here without hindrance and we are working with stakeholders to keep it so. We want them to come so that we can provide jobs and other opportunities and address the economic dimension of some of the causes of instability and insecurity in the Niger Delta, but generally speaking, the Niger Delta is stable. These historical challenges have been there; they come and go and the federal government is also reaching out and we want that to continue more. We have always spoken in support of negotiation, in support of dialogue and that has produced some results. We need to work harder to ensure that the economic dimensions to some of the issues are attended to. The modular refineries are one good way of addressing these challenges. The directive that oil companies should relocate their places of production is also another critical component of empowerment of the people to provide that connection and create ownership. What confidence are you presenting to prospective investors on the need to invest

in Bayelsa state? I am here to make a case for Bayelsa; to say that the state is safe, stable and is ready. We have the infrastructure created in the last five years to accommodate those who want to set up their businesses in the state. We have the energy hub to accommodate investment in power; we have the investment blueprint that is out there. With the right investment, Bayelsa alone can produce power that can address the power need of the whole country. This is so because we have more gas than any other state in Nigeria. We have over 30 per cent of oil/gas reserves in Bayelsa. It is a very critical State. We are stable and ready to go. Would you say your strategy has been successful? Are the people ready to embrace this? Yes. From the interest shown so far, it is very encouraging. We are calling on the investors to heed the call of the federal government and take advantage of the new climate, the change initiatives that government has brought about and the safe environment that we have also created. Bayelsa is safe and the Niger Delta is good to go. Thank you very much Your Excellency Thank you for having me.

Orient Energy Review Vol 6 No.07 2017

WOMEN IN ENERGY

Fatima Oyiza Ademoh Emerges Winner of the Young Energy Leader Award By Gabriel Ewepu

she led the preparation of funding proposal that secured US$150,000 grant in the USADF Power Africa Off-Grid Energy Challenge. Three of the awards, namely Lifetime Achievement, Outstanding Contribution to Power as well as Young Energy Leader Award, were won by women. In her short remarks, she said all young people are to be agents of change in their communities, and appreciated the fact that her effort to transform waste to power was being recognised. She said: “I want to thank all those who have believed in my quest to extend electricity access to off-grid communities, especially in the Waste-2-Watt (W2W) Project. And for all the young people out there, let’s keep being the agents for change in our communities.” Meanwhile, the Lifetime achievement award was won by Helen Tarnoy, Co-Founder and Managing Director, Aldwych International Ltd, United Kingdom, an engineering company that has been involved in some of the most successful independent power projects on the African continent, including the successful construction of the Ebute Power Project in Lagos.

Nigerian woman, Fatima Ademoh, has emerged winner of ‘Young Energy Leader’ award in Cape Town, South Africa. Ademoh who is Founder & CEO, Ajima Youth Empowerment Foundation, Nigeria, bagged the award at the ‘2017 African Utility Week Industry Awards’ that was announced at the CTICC in Cape Town. She is an energy and finance specialist and currently serves as the Project Developer in the United States African Development Foundation, USADF, funded off-grid

Renewable Energy project being implemented by Ajima Farms, which over 500 residents of in Reji village of Kuje Area Council in the Federal Capital Territory, FCT, have been connected to a 20 watt Biogas Digester Off-Grid uninterrupted power supply, and commissioned by USADF, led by its Regional Director, Tom Coogan, along with Reji Village Head, Ibrahim Kuyagwa. She is currently on a 10-Watt Biogas Digester off-grid power project at Kuwizhi village of Kuje Area Council and son to be completed and comissioned. In this capacity,

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Successful construction The Outstanding Woman of the Year in Power/Water award was won by Rose Kaggwa, Director, Business and Scientific Services, National Water and Sewerage Corporation, Uganda. Kaggwa said, “Women must aim to be the best they can be, because at the end of the day, the best multi-tasker is a woman. “In order for us to create change, when we say ‘water for all’ and we say ‘sanitation is a right’ it cannot be done without women. So women must rise up and begin to speak.”

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COMMUNITY REPORTS

Nigeria’s Acting President Set to Return To Restive Oil Heartlands

igeria’s acting president will meet again with community leaders from the Niger Delta oil heartlands next week, his spokesman said on Tuesday, in a bid to shore up a fragile truce between militants and the government there. With Africa’s biggest economy mired in recession, delegations including Acting President Yemi Osinbajo have held talks since late last year with leaders in the oil-producing states in the southeast. But the local leaders have said the efforts to secure peace are empty promises, and a return to violence in the area would derail any broader recovery in the crude-dependent economy.

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“Next week there is going to be a follow-up meeting between the acting president and the stakeholders of the Niger Delta,” said a spokesman for Osinbajo. The government, including an inter-ministerial committee headed by the acting president, and Niger Delta stakeholders will also issue a report next week, he said. Osinbajo was appointed by President Muhammadu Buhari to head the country while the leader remains in Britain on medical leave for an undisclosed ailment. In the meeting next week, the government and representatives from the Delta will discuss key issues such as legalising illicit refineries and turning them into so-called “modular refineries”, which the

administration hopes to start from next month. The contentious clean-up of the heavily polluted Ogoni region and plans to open a maritime university in October, which many community leaders have voiced support for, will also be discussed, said the spokesman. Oil exports are now set to exceed 2 million barrels per day (bpd) in August, the highest in 17 months, from as little as just over 1 million bpd at certain points last year. That is due to a steady decline in attacks on pipelines, providing a much-needed injection of cash into Nigerian government coffers.

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ALTERNATIVE ENERGY

Total brings Energy to 10 million People

otal has sold two million solar lamps worldwide, improving the lives of 10 million people. Ninety per cent of these lamps have been sold in Africa alone. More than one billion people do not have access to electricity. To help remedy that, the group launched in 2011 a line of photovoltaic solar lamps, to provide affordable access to energy for communities in emerging economies. Designed for households that lack access to electricity, Total solar lamps supply affordable, reliable, clean energy. Some of the lamps can also be used to charge small electric devices such as phones. These solar lamps are a safer and better replacement for less effective and more expensive lighting methods like candles, disposable batteries and kerosene.

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“Total intends to provide affordable, safe and clean energy to as many people as possible. And to do so, we strive to find innovative technological solutions, using a business model viable on a large scale,” explains Philippe Cabus, Managing director of Total Access to Energy. “We managed to reach these 2 millions lamps sold, thanks to the commitment of the teams in our local affiliates. Their dedication helps us to better reach the “last mile” and distribute these products to the customers.” These solar products come from the “Total access to Energy” programme, and are built on the group’s solar expertise and extensive presence in Africa via its wide retail network of over 4000 service stations. New last mile channels and retail models are being created with Total forming global partnerships with major development NGOs and

local partnerships to reach the most remote areas. About 90 per cent of Total solar lamps customers’ say their lamp has significantly improved their daily lives. Total believes that better access to energy is a fundamental necessity, which greatly impacts on access to education, communication, information, and the overall development of individuals and societies. As an integral part of Total’s commitment to providing affordable, reliable, and clean energy, Total’s solar solutions are lighting homes mainly in Africa but also in South America and South East Asia, and are still evolving to meet the needs of millions of people who still do not have access to cleaner energy. The group’s goal is to sell five million lamps by 2020 to improve the lives of 25 million people.

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LOGITICS & MARITIME

Customs E-Auction: 48hrs After, 43 Nigerians Win Bid for Seized Vehicles Amidst Complaints of Website Failure By Oge Obi

orty-eight hours after commencing the first-ever e-auction process in Nigeria by the Nigeria Customs Service (NCS), the Service has said that no fewer than 43 persons have won the bidding of vehicles in the newly launched e-auction platform. Speaking to journalists in Abuja recently, the NCS Public Relations Officer, Joseph Attah disclosed this, saying that the platform is active and working. Attah made this clarification after the deluge of complaints that trailed the launch of the e-auction and bidders’ inability to access the website. Reiterating NCS commitment to ensuring a hitch-free bidding, Attah said, “At the first day of the launching, there were technical challenges with the e-auction platform and these challenges have already been resolved. Potential bidders can now register smoothly without hitches. “I understand that today one bank will soon be on board, he said. “The first 48 hours expired at 12noon on Wednesday and already 43 persons have won the bidding including a journalist, so you can see this platform is working. For now, it is only Jaiz bank that is on the platform, other designated banks are having Interswitch issues and they will soon be on board as soon as they ratify the issues. Calling on potential bidders to be calm and make use of the available bank, Attah said that other banks would come on board. “For those trying to register, they should go to the designated bank area on the platform, click on the Jaiz bank and print out the page from their system and go to the bank to pay. “This means the person has activated with Jaiz bank and the bank can key you into the bank system to enable you pay the N1000 administrative fee, which will be transferred to your e-wallet. The Comptroller-General of Customs, Hameed Ali, had on Monday at the inaugurated the e-auction

platform hinted that the new step was aimed at giving all Nigerians equal opportunities to partake in bidding for seized vehicles and to increase Customs’ revenue. However, despite Attah’s claim and assurances that the platform was working, some of the potential bidders’ complaints still borders on their inability to locate Jaiz bank, inaccessibility of the e-auction website, and other hitches issues such as non-recognition of their Tax Identification Number. According to Mr. Habib Salami, “Even when I managed to access the website, I could not complete my registration because the system said it could not find my TIN. And my TIN is genuine. I was forced out of the process. I see no reason why Customs should proceed with this e-auction with one bank. It is illogical and a deliberate attempt to deny many Nigerians the opportunity to participate in this process, Salami said. Meanwhile, Orient Energy Review’s visit to the e-auction website has the stipulated terms and conditions. “All those who want to participate in the e-auction process are advised to note the following terms and conditions: • Applicant must have a valid TIN issued by the FIRS with an active e-mail account. • An applicant shall pay a non-refundable fee of One Thousand Naira (N1,000.00) as administrative charge. • An Item is auctioned “as is” as such request for replacement or refund shall not be entertained. • The successful bidder shall make payment within five (5) working days. • Failure to pay within five (5) working days the item reverts to the second (2nd) highest bidder.

remove the item bidded for or forfeit same at the expiration of the two (2) weeks. • Any auction item not removed from the warehouse within fourteen (14) days from the date of payment shall revert to its pre-bidding status. • Take note for overtime cargo, that the successful bidder shall in addition pay 25% charges for Shipping line and Terminal operator respectively. • Bidders shall be allowed to bid for more than 2 items per bidding window. • For claiming items, the winner shall present; i. A valid copy of paid assessment and bank receipt (optional in case of e-payment); ii. E-mailed code to identify owner after payment; iii. A notarized letter in case owner sends representative. (Where owner is present uploaded photo on registration will do.) iv. Provide proper identification with the notarized letter such as International passport, Driver’s licence, Voters card or National I.D. • The dwell time for this Online Auction Sale shall be Twenty-Eight (28) days. • Third party claims shall not be entertained. • Owner of seized item is excluded from bidding for same. • Conditions and terms of this auction are to be carefully considered by an interested person before acceptance.

• The successful bidder has two (2) weeks from the date of payment to

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LOGITICS & MARITIME

Employment Opportunities: Soan Develops Cadets Training Scheme maritimefirstnewspaper.com

he Ship Owners Association of Nigeria (SOAN) has developed a Cadetship Training Scheme (CTS) to help Nigeria address the challenges of meeting sea-time training, for Nigerian Shipping Development Programme (NSDP) needs. The scheme, encapsulated by a presentation made by SOAN to the management of the Nigerian Maritime Administration and Safety Agency (NIMASA) showed a vision anchored on professionalism, thorough training and mentorship, which actually dovetails into broad based progression plan. “The SOAN initiative reflects our collective commitment as ship owners to addressing the dearth of suitably qualified seafarers for

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the Nigerian Maritime industry”, SOAN President, Engr Greg Ogbeifun intimated the NIMASA Director General, Dakuku Peterside, as the agency management team listened with rapt attention. Ogbeifun stressed the sincere confidence of SOAN members to see more cadets of the NIMASA’s pet project, the NSDP obtain the much-needed seaboard training, not only to satisfy their Certificate of Competence (CoC) requirements and fly Nigerian flag, but also to work on foreign vessels and earn the hard currency. He highlighted that two other African countries had already shown genuine interest to keying into the programme, but the association, fuelled by patriotism has decided

to determine the actual need of the country through NIMASA first, before throwing its gates totally opened for the African countries. He posited that while the Indians are supplying the officers group and Filipinos are supplying the middle level group and ratings, the scheme was meticulously designed to ensure that Nigeria could supply both the officers and ratings perfectly, adding that SOAN also is working towards providing the sea-time at no bigger cost, but essentially that of minimal requirements for the cadets’ food, books, uniforms, medical and such other official requirements.

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LOGITICS & MARITIME “Our streets are full of unemployed (NSDP) graduates” Ogbeifun observed, noting that no patriotic Nigerian, particularly the SOAN can continue to fold hands, when Nigeria as a country is on the IMO White List; and can ensure requisite training to provide cadets their OOW certification and subsequently empower them to prudently work both within and outside the country and realize their God given goals. An elated Agency Boss, Dakuku after sitting through the presentation on the training scheme could not hide his joy. “I am amazed by the extent of work you have done. I am truly, truly grateful!” he indicated, stressing that the most important reason why the NIMASA exists is because there are ships to regulate. He commended the SOAN for its unspared commitment to growing the Nigerian Shipping industry and threw floor open for his executive directors and directors to provide inputs. Their appreciative responses if heard by the cadets presently loafing on the streets could instantly douse their restiveness. A glimpse in the CTS showed that those who would undergo the seatime would be selected purely on merit, following a written exam, after which the successful ones would go through oral interview, and medical tests including tuberculosis tests. The cadets would thereafter be on board for at least a 12- month duration; during which each would be rotated on different IMO approved vessels, to ensure that they acquire different operational learning experiences, under different team members, anchored to different International Oil Companies, that SOAN members presently work with. Report has it that the scheme formalised a mentorship programme which ensures that Chiefs, Engineers and other Seniors onboard are assigned to properly monitor each cadet’s practical progress and competence development; with the ultimate goal of producing a totally equipped officer, after graduating from the Cadetship scheme. Asked for comment, a NIMASA Director who spoke on conditions of anonymity lauded the initiative, noting that it was something the agency should have crafted, but actually was yet to think of. “It’s like some people are thinking for us. And they are doing it in a very positive manner”, the Director explained further.

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GAS

Shell Blames Third Parties for Non-diversion of Bonga Gas to Domestic Market Explains delays in 2,000MW-capacity projects Forcados Yokri, Southern Swamp and new Final Investment Decision for Assa North/Ohaji South. Speaking on the Forcados/Yokri Gas Project designed to provide 80mmscf/d on completion few years ago but is yet to be completed, Odugbesan said the project was delayed by a mix of funding, contract approval and contractor performance issues.

hell Petroleum Development Company (SPDC) has blamed the non-diversion of natural gas from the deep-water Bonga oilfield to the domestic market on third parties, stressing that it has largely concluded its technical scope of the Bonga diversion project initiated to supply 120 million standard cubic feet of gas per day, an equivalent of 650 megawatts of electricity into the domestic market. The company has also explained the delays in the execution of some of its key gas projects initiated to deliver 2,000 megawatts of electricity into the National Grid, noting also that the apparent decline in its domestic market share was mainly because of divestments of its acreages to indigenous players who continued to supply gas from those fields into the domestic market. SPDC joint venture pioneered the supply of natural gas to the domestic market in 1962 and up till about 1997 when other multinational majors started supplying domestic gas, the company was the only supplier.

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With the entry of other IOCs, Shell’s contribution declined to about 60 per cent of the national supplies of domestic natural gas but the company’s new projects have missed their delivery targets. In a response to THISDAY’s enquiries on the challenges that hinder the delivery of the company’s gas project, a spokesman of the company, Mr. Bamidele Odugbesan said the company had largely concluded its technical scope in the Bonga diversion project but that “the diversion cannot be effected until all other parties conclude the work, particularly the gas treatment plant by government-appointed third party.” He noted that the apparent decline in market share for SPDC JV was mainly because of divestments of assets to indigenous players. “Enabling indigenous operators to be active in this area is a positive development and demonstration of SPDC JV’s commitment to local capacity building,” he said. Odugbesan added that the SPDC JV is progressing a number of domestic gas supply projects, particularly the anticipated completion of

“We expect first gas this year while the second phase is planned to commence next year,” he added. On the delays in the execution of the ambitious Assa North/Ohaji South Project was initiated by SPDC and Chevron JVs to provide 500mmscf/d, the Shell spokesman stated that though the project was initiated by Shell and Chevron, the project has experienced changes in participating parties and in concept. This he said, resulted in the need to reconstitute it for effective delivery. Borkir International Company Limited, a subsidiary of Dangote Group, is now the partner to Shell in the project. Report has it that the efforts to boost the supply of gas for power generation under the Domestic Gas Supply Obligation (DSO) imposed on the international oil companies (IOCs) are being hampered by the delays in the execution of some key gas projects initiated to power 2,000 megawatt-capacity power plants. *ThisDay

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EXPLORATION/ DRILLING &PRODUCTION

NNPC, Halliburton to Enhance Exploration in Inland Basins By Dirisu Yakubu

he Nigerian National Petroleum Corporation, NNPC, and US based Halliburton Corporation are in intensifying collaboration in an effort to boost oil and gas exploration in the inland basins through the use of a new technology. The use of the technology known as Neftex solution would culminate in seamless exploration and oil finds, Orient Energy Review has gathered. The NNPC, Group General Manager (GGM), Research and Development Division, Dr. Bola Afolabi, who stated this in a statement, last week, said the collaborative research with Halliburton which had crossed the 65 per cent threshold would take 18 months to complete. He noted that the collaboration with Halliburton would fast-track the inland basin exploration efforts through the use of the innovative Neftex solution designed to provide exactitude in drilling for oil. His words: “The Halliburton Neftex solution which would provide a geophysical mapping structure of the country would complement the ongoing in-house efforts by the NNPC research centre to develop what is known as “Turonian Cenomanian Cretaceous source rock” for all the basins in Nigeria. This essentially seeks to identify all the prolific basins in Nigeria by locating the cretaceous kitchen, that is, areas

where large crude deposits could be found.” he said. Afolabi further noted that, “If you take a football field for instance, there are technologies that will direct you to drill for oil within the whole field but we are using a software solution that will tell you with exactitude to drill for instance in goal post one and when you do that you find large oil. That is what we are seeking to achieve with Neftex solution. We are so excited about this project and with the assured support of the Group Managing Director of NNPC, Dr. Maikanti Baru; our projection is that by the turn of next year, we should be able to help the frontier basin team achieve a pin-point location of possible commercial oil finds for eventual drilling activities.” The GGM also maintained that research work had reached advanced stage on the Federal Government commissioned project assigned by the Organization of the Petroleum Exporting Countries, OPEC, to classify Nigeria’s crude oil and natural gas. “The idea is to check Nigeria natural gas and condensate using the OPEC classification model and determine whether it is within the upper limits or lower limits. The ability to do that well will enable Nigeria to properly classify its Natural Gas Liquids (NGLs)

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and also gas condensate so we don’t mismatch production of oil with condensate because if you do that you may short change yourself,” Afolabi added. He also stated that the corporation research centre was already working on a project to enhance production from existing assets by introducing a cost effective and reliable alternative to drilling new wells. Already, successful pilot scheme has been executed in collaboration with its strategic partners – Cypher Crescent Limited. “With minimal cost, remarkable additional production potential was discovered. We are talking about a digital approach to wells and reservoir management. We are applying a first of its kind technology to easily reveal hidden opportunities and propose realistic well intervention programmes. We are seeking to improve the success rate of exploration and production well intervention activities, reduce operations and improve asset integrity, among others. “Halliburton’s Neftex solution would provide a geophysical mapping structure of Nigeria, and complement NNPC’s ongoing in-house efforts to develop what is known as Turonian Cenomanian Cretaceous source rock for all the basins in Nigeria.

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EXPLORATION/ DRILLING &PRODUCTION This essentially seeks to identify all the prolific basins in Nigeria by locating the cretaceous kitchen-areas where large crude oil deposits could be found,” he explained further. It should be recalled that NNPC earlier this month revealed plans to recommence drilling activities in the country’s northeast in the fourth quarter of 2017. The collaboration is coming almost after a year after the Association of Inland Basin States of Northern Nigeria (APIBONN) accused the NNPC of frustrating exploration activities in the inland basins; an allegation that reportedly got the oil company to begin skeletal work in exploration in the region. Mr. Yabagi Sani, Interim Executive Secretary, APIBONN had while addressing newsmen in Abuja last year, stated that efforts of the NNPC towards the development of the inland basins, had over the years yielded no meaningful result. He had reasoned that the perceived exploration activities of the Frontier Exploration Services (FES) Department in the National Petroleum Investment Management Services (NAPIMS) Division of the NNPC remained very opaque, while many attempts by critical stakeholders to make inputs have been severally and severely rebuffed. “On the other hand, the Department of Petroleum Resources, DPR, had been cooperative with the efforts of other stakeholders, NNPC, like in all its activities keep everybody in the dark on her actions with no motion. “NNPC-FES gets billions of dollars budgetary allocations for exploration of the inland basins with no results and continuous budgetary allocations year-in-year-out. NNPC is not known to have made any significant success in her exploration programs throughout the history of her establishment, even in the prolific Niger Delta,” he had said. It is left to be seen what prospects are there in the basins given the political anxiety it has generated over the past 12 months.

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Chevron to Sell 40% Stake In Two Nigeria Oil Blocks

igeria’s third-largest oil producer, Chevron Nigeria Limited (CNL), a subsidiary of United States international oil company, Chevron, has announced that it will sell its 40 per cent stake in two shallow water oil blocks, OML 83 and OML 85, in the country. “As part of a continuous process of portfolio evaluation and business prioritisation, Chevron Nigeria Limited … has put forward its interests in two oil mining leases for auction,” a company spokesman told Reuters. Although there has been no production yet in the two oil blocks and the company did not state what oil and gas reserves the blocks held, its 2012 net daily production in Nigeria averaged 238,000 barrels of crude oil and 165 million cubic feet of natural gas. While Chevron operates under a joint-venture arrangement with NNPC which owns 60% of the oil blocks, the oil firm remains one of Nigeria’s largest energy investors, spending more than $3 billion annually. The firm has assets on land, swamp and near-offshore concessions covering approximately 2.2 million acres (8,900 sq.

km) in the Niger Delta region. Although Chevron is the latest oil major seeking to dispose of assets in Nigeria, United States’ ConocoPhillips in January sold its Nigerian businesses to Oando Energy for about $1.79billion. In recent years, several oil companies like Royal Dutch Shell, Italy’s Eni and France’s Total have sold their assets onshore or in the shallow waters of the Niger Delta. Some of the oil blocks sold overtime were bought by United Kingdom-listed firms, Heritage Oil and Eland Oil while Chinese-owned Addax have expressed interest in buying more assets in Nigeria. Oil firms in Nigeria face challenges like widespread oil theft, and, at times, difficult relationships with local communities onshore; some of which have driven up the cost of operation there. With the delay in the passage of the Petroleum Industry Bill, some oil companies are skeptical about making investments in new projects. *Reuters

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EXPLORATION/ DRILLING &PRODUCTION

Anglo African Oil & Gas set for Tilapia well number three Anglo African Oil & Gas (AAOG) said it plans to drill a third well on the Tilapia oil field in the Republic of Congo.

The project’s operations team has already identified a preferred rig contractor and AAOG expects to conclude negotiations by mid-August. The rig is already in the Republic of Congo, in close vicinity to Pointe Noire, which reduces mobilisation costs. Drilling is expected to take around 45 days. The London-listed firm has also de-

cided to use fishbones technology to stimulate and complete the Mengo horizon in the well. Fishbones technology uses a large number of small diameter lateral jets or drills from the wellbore to penetrate the reservoir and stimulate production. It is ideally suited to the tight formations that are experienced in the Mengo and is more cost-effective and controllable than the alternative of

a one-off conventional frack. AAOG Executive Chairman David Sefton said: “Significant planning has taken place on the new multi horizon well TLP 103. “As a result of this planning, the team is even more convinced of the potential from Tilapia.”

Hyperdynamics, SAPETRO: Two Years for Appraisal If Oil Found At Fatala

yperdynamics and its partner South Atlantic Petroleum will be given two years for appraisal work in the event of an oil discovery in the Fatala-1 well, offshore Guinea. Hyperdynamics said that the letter granting the assurance for the two-year appraisal period was signed by the Director of ONAP (Guinean equivalent of the Ministry of Oil) Diakaria Koulibaly in response to the official request sent by SCS Corporation Ltd., for the two-year appraisal period.

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EXPLORATION/ DRILLING &PRODUCTION

The drilling at the Fatala-1 well is to be spudded in the first few days of August, using the Pacific Drilling drillship Pacific Scirocco. “We are very pleased with the level of preparation for the drilling of Fatala-1 and with the performance of the contractors. All the elements are coming together nicely for the imminent spudding of the Fatala-1 well,” said Ray Leonard, Hyperdynamics’ President and Chief Executive Officer. “Should the Fatala-1 well result in an oil discovery we will be ready to move to the Bamboo prospect and other targets during the appraisal period,” Leonard said. Hyperdynamics is the operator of its 5,000-square-kilometer concession offshore Guinea. According to a recent company presentation Hyperdynamics, which is looking to raise funds to support the full drilling operation, thinks Fatala holds 650 million barrels of recoverable oil, and this is the base case. In a presentation on July 6, Ray Leonard said: “The initial well that wouldn’t go all the way down to the oil/water contact would prove up 310 million, which would make it a commercial well. And as I said before, additional appraisal wells could move you well beyond that 650-million-barrel resource estimate.” Asked whether the company would immediately drill an appraisal well in the case of oil discovery, Leonard said: “No, the next well will be an exploration well. We’ll need time to incorporate the results of this discovery to plan on an appraisal process. And also, we’ll want to be able to look at the total potential of the block as quickly as possible. And it really is premature to estimate how much that appraisal well will cost. “A lot of things go into costing an appraisal well. And we just don’t have those attributes to be able to make that appraisal yet.”

Exxon Confirms Second Giant Oil Field Offshore Guyana

xxon Mobil Corp. has discovered additional oil in the Payara reservoir on the Stabroek block offshore Guyana. Gross recoverable resources for the 6.6-million acre (26,800-sq km) Stabroek block are now estimated to be between 2.25 and 2.75 Bboe. The Payara-2 well was drilled by ExxonMobil affiliate Esso Exploration and Production Guyana Ltd. (EEPGL) and encountered 59 ft (18 m) of high-quality, oil-bearing sandstone in the Payara field. The well increased the total Payara resource to about 500 MMboe. It was safely drilled to 19,068 ft (5,812 m) in about 7,000 ft (2,135 m) of water. The well is 12 mi (20 km) northwest of the recently funded Liza Phase 1 project on the Stabroek block, which is

about 130 mi (209 km) offshore Guyana. Steve Greenlee, president of ExxonMobil Exploration Co., said: “Payara-2 confirms the second giant field discovered in Guyana. “Payara, Liza and the adjacent satellite discoveries at Snoek and Liza Deep will provide the foundation for world-class oil developments and deliver substantial benefits to Guyana. We are committed to continue to evaluate the full potential of the Stabroek block.” EEPGL is operator and holds 45% interest in the Stabroek block. Hess Guyana Exploration Ltd. holds 30% interest and CNOOC Nexen Petroleum Guyana Ltd. holds 25% interest. *Offshore

*Offshore Energy Today

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