Orient Energy Review Dec/January 2019 by Orient Energy Review

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COVERING LOCAL CONTENT IN ENERGY,OIL AND GAS

VOL.9 No.01 DEC., 2018 / JAN., 2019

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NCDMB Celebrating Achievements with Deluge of Awards Back your support for women inclusiveness with policy statement, Zigma CEO tells Govt The success story of International Energy Services Limited

PETROLEUM INDUSTRY

DIGITALISATION

Is Nigeria doing enough?

ORIENT ENERGY REVIEW Vol.9 No. 01 Dec., 2018 / Jan., 2019

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CONTENTS

rientEnergy Review ...driving local content development

The success story of International Energy Services Limited

33 06

Africa one out of three continents controlling global energy consumption

Senate commends NCDMBâ&#x20AC;&#x2122;s engagement of local contractor in headquarters building

FG set to launch new guidelines for mining, oil and gas industry

2018 PNC ends with impressive NC achievements, call for more collaboration

Mikano operations rooted in local content

NCDMB, AGF partner on Nigerian Content enforcement

Licence round prequalified companies to be announced on 21 January

The PwCâ&#x20AC;&#x2122;s Power and Utilities Roundtable

NCDMB, AGF partner on Nigerian Content enforcement Three modular refineries to begin operations in 2019 - Kachikwu Deep Petroleum Industry Reforms Set Angola on Path to Growth in 2019

Current issues and policy options

21 ORIENT ENERGY REVIEW Vol.9 No. 01 Dec., 2018 / Jan., 2019

EDITOR’S NOTE

t is a brand New Year. For Nigerian oil and gas industry and the entire energy sector, the New Year has come with fresh outlook of positivity. This is especially so with the OPEC+ price propping mechanism to curb the crude oil price volatility that hit the oil and gas industry in October last year. Nigerian economy had barely staggered out of recession mostly stirred up by the fall in oil prices. As the affected economies savour the gain of a rebounding market, the market forces could not allow the gains to last till the close of the business year, hence, in October the rollercoaster ride of the oil market went wild, crashing the prices which had risen to a four-year high to about 30 per cent low. Behind the sudden flick on the crude oil prices was the power and effect of advanced exploration and production (E&P) technology, which sent the market to another season of a crude supply glut. Considering the undeniable impact, and much more that lies ahead as the digitalisation of processes and operations in the global oil and gas industry becomes dominant, the OER in her agenda-setting role, in this edition wishes to awaken the consciousness of industry players and other stakeholders to the trend with a cover story, ‘Petroleum Industry Digitalisation: Is Nigeria doing enough?’ In 2018, the Nigerian Content policy development and implementation as steered by the NCDMB gleamed with success stories that evoked a stream of awards from different sectors within the country as well as in the global arena where Nigeria’s Content success was also recognised and celebrated. We present you a report chronicling some of these awards. Also in this edition is an exclusive interview with an industry expert, Dr. Diran Fawibe, where he shared the success story of International Energy Services Ltd, its post-NOGICD Act experience and how IESL initiated the popular Energy Forum, a platform where some of the major issues in the industry were articulated, particularly the conceptualisation of the today’s NOGICD Act. For our Women in Energy column, is an interview with the CEO of Zigma Nigeria Ltd, Mrs. Funmi Ogbue whose many decades of work experience in different sectors and in different countries present a huge learning resource and guide for many young women right in the middle of their career journey as well as those inspiring to join the train. This is our first edition in the New Year and it has been carefully loaded with lots of interesting stories covering every aspect of the energy sector. This is aimed at providing you and your team with the much-needed tool (information) for quality decisions and actions that will propel the desired success in your business dealings in the year ahead. Please read and use our various channels to send your feedback to us. We look forward to hearing from you. And from the entire Orient Energy Review Team, we wish you a joyous and prosperous New Year.

Peace Obi

Mobile line: +234 8036979049 peace.obi@orientenergyreview.com

rientEnergy Review

Publisher/ Editor-in-Chief Nneka Ezeemo Editorial Advisory Engr.Andy Olotu Victor Eromosele Stanley Egbochuku Editor Peace Obi Correspondence Dirisu Yakubu (Associate Editor) Chibisi Ohaka (Abuja Oﬃce) Vivian Israel ( Head South-South Bureau, PortHaracourt) Gilbert Boyefio (Ghana Correspondent) Godspower Ike (PortHarcourt) Kenechukwu Obiajuru (Bayelsa) Business Development Executive Catherine Saunt ( UK ) Designs Kelechi Okoro Admin/Finance Chiamaka Okeke Circulation Manager Ajayi Kayode London Oﬃce 15 Goss Avenue, Waddesdon, Aylesbury, Bucks, HP18 0LY +447974199137

...driving local content development

Orient Energy Review has emerged to be the platform and voice for the growing local content policy across the world. It is a bi-monthly publication of Orient Magazine, Newspaper and Communications Limited, 5, Dipo Dina Drive, Abule Oshun, Badagry Expressway, Lagos. www.orientenergyreview.com email: info@orientenergyreview.com ©2019 allrights reserved

ORIENT ENERGY REVIEW Vol.9 No. 01 Dec., 2018 / Jan., 2019

INDUSTRY NEWS

Africa one out of three continents controlling global energy consumption Peace Obi

he African continent has been named among the three continents controlling energy consumption around the world. This was contained in a newly published data from the Energy Information Administration which reveals that Asia, the Middle East, and Africa have been the biggest drivers of global energy consumption since the 1980s. According to the report, energy consumption growth in each of these regions boomed by about 20 percent between 2010 and 2016, adding that it was triggered by strong economic growth, a quick population growth rate,

and greater access to energy markets, especially in East and Africa. In Asia, energy consumption grew strongly, too, and that’s despite a dip in demand from China between 2015 and 2016, the EIA also said. The new data also revealed that crude oil and other petroleum liquids were the most commonly used fuel across the world as of 2016. Irina Slav, an analyst, had noted that as part of the energy mix, crude oil had the largest share in Central and South America, at almost 50 percent, with the Middle East a close second in its prevalent use of petroleum. “Crude oil consumption as part of the total energy mix was the lowest in Eurasia, at a little over 20 percent.” However, the EIA notes that re-

source use often has a lot to do with the availability of certain resources in every region, which partly explains China’s and Australia’s coal use while Europe, on the other hand, was the biggest user of nuclear power and renewable energy. Slav said that a breakdown of energy consumption growth patterns by country shows that China was the only one among the seven largest economies in the world that actually went through market energy consumption growth in the period between 2000 and 2016, EIA’s new data showed. It went up from about 40 quadrillion Btu in 2000 to a little under 140 quadrillion Btu by 2016 while the other six economies’ energy consumption remained relatively flat over the 16-year period.

Oil prices rising amidst scepticism on OPEC deal to stabilize the market Peace Obi

espite the scepticism that greeted the OPEC and non-OPEC allies supply cut’s deal to balance the oil market, the prices of crude oil edged up on Monday following the ongoing supply cuts from OPEC and its petro-power allies, Russia as well as by a drop in U.S. drilling activity. As at the time of filing this report, the International Brent crude oil futures were at $60.75 per barrel at 0040 GMT, up 27 cents, or 0.5 percent, from their last close, while the U.S. West Texas Intermediate (WTI) crude futures were up 22 cents, or 0.4 percent, at $51.81 a barrel.

Pointing to supply cuts from OPEC and some non-OPEC allies, including Russia as a fundamental driver, an economic research firm, TS Lombard had said that “oil prices are likely to stabilise around current levels and quite possibly drift upwards”. The CEO of Sun Global Investments, Mihir Kapadia, also said, “Should Opec continue with the production cutback strategy, oil prices are expected to move towards $65 by mid-March and strengthen exponentially further after the Iran sanction wavier expires.” When about six months ago, the oil prices soared around the $65 and above altitude, not many envisaged the sudden collapse that struck the market in October

ORIENT ENERGY REVIEW Vol.9 No. 01 Dec., 2018 / Jan., 2019

2018, leaving it on a steady slide for about three months. Many industry analysts have attributed the collapse of oil prices to President Trump’s convincing Saudi Arabia to increase production to make up for oil that would be lost as a result of Iranian sanctions. This is also in addition to the exemptions Trump administration’s granted to allow countries to continue importing Iranian oil. The exemptions which were supposed to last for 180 days, is said to have created too much oil in the market. To stakeholders and industry analysts, such market forces and alliances should be taken cognisance of when pushing for market rebalancing.

INDUSTRY NEWS

NNPC set to crash price of LPG

he Nigerian National Petroleum Corporation (NNPC) has said that it is working to crash the price of Liquefied Petroleum Gas (LPG) in the country. The Corporation in a statement explained that it is set to implement an effective commercial framework that would halt the export of propane and butane which are major components in the production of LPG, known as cooking gas so that it can boost gas supply to the domestic market.

It stated that the move which is anchored by the Crude Oil Marketing Division of the NNPC would enable the Corporation boost supply of LPG to the domestic market thereby leading to a natural downward slide in the price of the product in the country. According to the Group General Manager, Crude Oil Marketing Division (COMD), Mallam Mele Kyari the country’s equity butane and propane entitlements were exported due to the absence of in-country vessels to transport it to the domestic market. Stressing that the Division was working

with stakeholders to create the enabling environment for in-country production of LPG and cessation of export of the country’s butane and propane. Kyari said, “Currently some of our butane and propane entitlements are exported largely due to lack of vessels to make sure that these things come into the domestic markets and the absence of a commercial framework. “What we are going to do is to make sure we put the right commercial framework in place so that those exports are converted into domestic consumption”.

Total starts production of giant Egina Oil Field

he French multinational oil and gas company, Total, recently said it had started production from the giant Egina Oilfield located 1,600 metres of water depths, 150 kilometres off the coast of Nigeria. Arnaud Breuillac, the President, Exploration and Production, Total, said that the Egina Field would produce 200,000 barrels of oil per day, which represents around 10 per cent of Nigeria’s production. Breuillac said, in a statement in Lagos, that the Floating Production Storage and Offloading (FPSO) unit used to develop the field was the largest built by Total. The oppressive folly of fuel subsidy According to him, six of the 18 modules on the FPSO were built and integrated locally, while 77 per cent of hours spent on the project were worked locally. He said that startup had been achieved close to 10 per cent below the initial budget, representing more than one billion dollars of capital expenditure savings. Breuillac said that it was due to drilling

performance where the drilling time per well had been reduced by 30 per cent. “Egina will significantly boost the group’s production and cash flow from 2019 onwards. “It will benefit from our strong cost reduction efforts in Nigeria where we have reduced our operating costs by 40 per cent over the last four years,” he said. Initially discovered in 2003, the Egina

Oil Field is the second development in production on the Oil Mining Lease (OML) 130. Total Upstream Nigeria Ltd operates OML 130 with a 24 per cent interest, in partnership with the Nigerian National Petroleum Corporation (NNPC) and South Atlantic Petroleum- SAPETRO Ltd. (NAN)

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LOCAL CONTENT

Senate commends NCDMB’s engagement of local contractor in headquarters building PEACE OBI

…To expand NC act to other sectors

embers of the Senate Committee on Local Content have commended the Nigerian Content Development and Monitoring Board (NCDMB) for conceiving and developing its 17-story headquarters building in Yenagoa, Bayelsa State, using the services of a local contractor. The committee members gave their commendation during a recent oversight visit to the Board’s office and major Nigerian Content locations in Bayelsa and Rivers States. Speaking after the tour of the building site, the Chairman of the Committee, Senator Adeola Solomon Adeola, applauded the overall quality of the project execution. He said that the building, when completed would meet the present and future needs of the NCDMB. “The project will also meet the expectations of all Nigerians, especially those in the oil and gas industry.” He also commended the Board and its main contractor, Megastar Technical & Construction Company Limited for the speedy and professional development of the project. “I am happy that we have a project of this magnitude being executed by a Nigerian company. The most interesting part of this project is that it is local content driven.” Speaking further, Adeola noted that the Board’s efforts in the implementation of Nigerian Content have helped to attract investments into the economy, develop human capacities and technology in the oil and gas sector; stressing that the Nigerian Content aims to promote empowerment

and employment of indigenes and facilitate technology transfer in order to expand the local economy. He assured that the committee would continue to add value to the Local Content initiative, increase the impact and enforcement of the NOGICD ACT and work with the NCDMB for a greater fulfillment of its mandate in the overall interest of all Nigerians. He said, “the committee has commenced the review of the NOGICD ACT 2010 to increase its relevance to the current industry realities and more importantly to expand its scope to cover other industry such as ICT, telecom, manufacturing, extractive industry among others.” Also speaking, the Chairman of the Senate Committee, Upstream Petroleum Resources and member of the Local Con-

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tent Committee, Senator Tayo Alasoadura, described the new building as a wonderful initiative, which would contribute to the development of Bayelsa State and the entire oil and gas industry. In his remarks, Senator Dino Melaye noted that the project would save the economy huge costs in the future. “I commend NCDMB for projecting into the future. Eventually, the building might not even meet the needs of the Board and the oil and gas industry. We need to develop similar projects in many other sectors and locations. In his opening remarks, the Executive Secretary, NCDMB, Engr. Simbi Wabote stated that the Board’s 17-story headquarters building would be a source of pride to indigenes and residents of the Niger Delta region. He confirmed that only eight floors would be used for office space, while one floor would host oil and gas training centre of excellence. According to Wabote, some operating and service companies have already indicated their interest to rent some of the floors. He said that proceeds from such lease would be used to maintain the building. He also said that the structure would utilise electricity generated from an independent power plant being developed by the Nigerian Agip Oil Company (NAOC) in Bayelsa State. In his response to questions by the lawmakers, the Executive Secretary clarified that the Federal Executive Council (FEC) approved an increase in the project’s budget, because of the huge fluctuations in the foreign exchange rates, which greatly affected the costs of inputs.

LOCAL CONTENT

Nigerian Content Development

– Chevron’s Success story

efore the enactment of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act in 2010, only a few International Oil Companies (IOCs) had deliberately put in place policies to build, enhance and sustain the capacity of indigenous companies and contractors to enable them to fully participate in Nigeria’s oil and gas industry. Eight years after the Act was enacted, the situation has changed significantly as recently emphasized by Engr. Simbi Kesiye Wabote, the Executive Secretary, the Nigerian Content Development Monitoring Board (NCDMB). According to him, “Before the NOGICD Act, only 3 per cent of the marine vessels used in the industry belonged to Nigerians, but today, Nigerians control and own 36 per cent of vessels. From a zero active dry-dock facilities for vessels, the country now has four active dry-docking facilities and over 35,000 jobs have been created as a result of the NOGICD Act.” Also, local businesses have been empowered to handle fabrication of more than 60,000 tons; manufacturing of cables bolts, nuts and flanges and assembling of offshore Christmas trees as well as infrastructure for integration of Floating Production Storage and Offloading (FPSO) facilities. Chevron Nigeria Limited (CNL), with its affiliates in the country, is one of the IOCs that had a pre-NOGICD policy in place and has in the post-NOGICD era remained committed to Nigerian Content Development (NCD) by partnering with the NCDMB to significantly grow Nigerian Content in the oil and gas industry. In its 2017 Corporate Responsibility Report, CNL states that the company’s investment in NC was approximately US$2 billion while procurement of materials through Local Community Contractors (LCC) and cost of services

Jeffery Ewing

NCD thus: “At Chevron Nigeria Limited, we demonstrate our commitment to the socio-economic development of Nigeria by building mutually-beneficial partnerships, and supporting the policies of government on Nigerian Content Development. We have helped in building the capacities of several Nigerian businesses by allocating substantial scopes of our major capital projects to Nigerian companies. Chevron is also helping to grow the Nigerian economy by contributing to the development of communities in the areas of our operation. We do all this, not just because it is required by the law, but because it is the right thing to do.”

provided by indigenous companies were $74 million and $284 million respectively. CNL’s four-prong approach to NCD includes: selection of qualified local contractors; facilitation of partnerships and alliances between indigenous companies and foreign firms; capacity building; and development of local competencies. Chairman/Managing Director, CNL, Jeff Ewing, explains the company’s stance on

The various areas in which Chevron implements the NOGICD Act in Nigeria include human capacity development, facility fabrication, construction and installation. Others include support for facility acquisition, facilitation of partnerships between local and foreign contractors, and provision of opportunities for local community contractors through work scope allocation in

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SonamNWP jacket during the loadout at Nigerdock Chevron’s major capital projects in Nigeria. Some of the highlights of CNL’s Nigerian Content success stories include the patronage of Oando Energy Services (OES) Limited and SOWSCO Well Services Nigeria Limited for cementing and pumping services for well drilling contracts. The company also supported Jemtech Global Engineering Services Limited, a local community contractor to fabricate the wellhead jacket for the Abiteye Non-Associated Gas (NAG) Development Project and procured locally assembled desktops and laptops worth millions of Naira from Task Systems Ltd and Zinox Systems. On human capacity development, the company in partnership with the Nigerian Content Human Capacity Development Initiative (NCHCDI) has continued to train and equip Nigerians to deliver value through executive and management training, technical and professional skills training, and on-the-job training during project execution. CNL in partnership with NCDMB and Idmon Engineering Services Ltd trained 26 Nigerians on its Sonam - Okan Pipeline Pig Receiver Fabrication Project. The 12-month classroom and on-the-job training covered Health, Environment and Safety (HES); Information and Communication Technology; Project Management; Quality Management; Fabrication and Assembly processes; Fabrication Engineering; Welding/Fitting/Rigging/ Scaffolding processes; Entrepreneurship; and Material Management. In addition, CNL awarded a contract to local consulting firm,

Agbami Phase 3 Achieves Major Nigerian Content Delivery Milestones (3) Lonadek, to develop and pilot a Human Capacity Development Initiative training plan for CNL’s Drilling and Completions Unit. Chevron supported Marine Platforms Limited (MPL), to become a major player in the Subsea industry, an area previously dominated by international companies. MPL handled the Subsea Installation of flowlines, umbilical’s and jumpers on Agbami Phase 3 project. On fabrication, construction and installation, Chevron facilitated the delivery by FMC Technologies of the first

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assembled-in-Nigeria Subsea Horizontal Xmas Tree, and the fabrication in Nigeria of Agbami production manifolds for the Agbami Phase 3 Project by FMC Technologies/ Aveon Offshore Nigeria Limited. Chevron also facilitated the safe, timely and successful installation of subsea equipment such as flexible flowlines, umbilicals and jumpers on the Agbami Phase 3 project by a Nigerian Contractor – Marine Platforms Limited. CNL also facilitated the fabrication and load out of the Offshore Platform Topsides

LOCAL CONTENT and Bridge Connection for the Sonam Non-Associated Gas Well Platform (NWP) by Nigerdock Plc; the fabrication and load-out of the Okan PRP Topsides; Bridge Fabrication of Okan PRP jacket by Globestar in partnership with Idmon Engineering and Construction Co. Limited; Installation of the 32km and 24” Sonam to Okan NWP pipeline by West African Ventures Limited; and the coating of the pipes used for the Sonam Development Project and Escravos Export System Project (EESP) by Pipe Coaters Nigeria Limited. The Executive Secretary, NCDMB, highlighted Chevron’s NCD achievements in 2017, during the passing out ceremony of earth science graduate-interns that were trained by Chevron. He stated: “In terms of fabrication, Chevron has done a lot. I am sure you heard about the Sonam project which was done in Nigeria. A lot of the fabrication happened here, a lot of the engineers that were on that project are Nigerians. You also heard about the pipeline project Chevron is currently executing - the contractors are Nigerians and most of the vessels that are deployed for that project are owned by Nigerians. So, I think in human capacity, development-wise, they (CNL) have done a lot on fabrication as well as logistic services and trickling that down to community participation in their operations.” Chevron’s commitment to Nigerian Content development did not start today. The Agbami project set industry standards by fabricating more than 10,000 tonnes of steel with Nigerian fabrication companies, the highest ever recorded in Nigeria. Chevron also trained 105 Nigerian engineers from 21 engineering companies in South Korea. The Escravos Gas Project (EGP) has employed over 1,800 Nigerians and sourced millions of Dollars’ worth of services (engineering, procurement, fabrication, marine etc.) locally. Also, the Escravos Gas-to-Liquids (EGTL) project provided employment to more than 15,000 Nigerians during the construction phase of the project. In addition, the project awarded huge sub-contracts to local community contractors, sent 234 Nigerians on a 30-month training program in South Africa at the Synthetic Fuel Facilities of Sasol and trained over 7,000 Nigerians in Technical Skill Crafts, Plant Operation and Maintenance, Business and Project Management, Logistics

Ogere O&M Trainees

Installed Meren GGCP Platform and Supply Chain Management and Gas Tungsten Arc Welding (GTAW) processes. CNL demonstrated unprecedented support for the local barite mining industry by donating barite mining equipment worth $1.4 million and training to the Association of Miners and Producers of Barite (AMAPOB) to boost the supply and quality of local barite, reduce importation of barite and create jobs for the local communities.

For CNL’s MD, Chevron will continue to “empower Nigerian service providers and suppliers through: human and business capacity development; local patronage and work scope allocation; fostering of business partnerships and sponsorship of research and development programmes to enhance the capacity of indigenous companies to participate in the oil and gas industry.”

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LOCAL CONTENT

NCDMB, AGF partner on Nigerian Content enforcement

he Minister of Justice and the Attorney General of the Federation, Mr. Abubakar Malami (SAN) has said that the Ministry of Justice would collaborate with the Nigerian Content Development and Monitoring Board (NCDMB) in the enforcement of compliance and prosecution of defaulters of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act. The chief law officer made the commitment when the Executive Secretary of NCDMB, Engr. Simbi Wabote paid him a courtesy visit in Abuja recently. The Minister commended the Board

for the great strides it has accomplished, particularly for growing Nigerian Content from five per cent before the advent of the NOGICD Act in 2010, to 28 percent presently and its contributions to the economy. He noted that compliance monitoring is a key aspect of the Board’s mandate that requires the Ministry’s collaboration for the prosecution of serial offenders of the Act to achieve compliance by other stakeholders. Earlier in his remarks, the Executive Secretary highlighted the need for in-country value retention in the oil and gas industry and compliance by oper-

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ating and service companies with the provisions of the NOGICD Act. He encouraged staff of the Ministry of Justice to acquire knowledge about the Nigerian Content Act and the operations of the Board. According Wabote, it would enable them interpret matters that might be brought to their attention as well as support the Board in prosecuting defaulters as stated in the Act. The ES reiterated the Board’s eagerness to complete the review of the draft Nigerian Content regulations, which are tailored to achieve 70 percent in-country value retention by 2027 and foster the development of Nigerian Content.

LOCAL CONTENT

NCDMB, IPPG move to shorten delay in contract cycle

he Nigerian Content Development and Monitoring Board (NCDMB) and the Indigenous Petroleum Producers Group (IPPG) have restated their commitment to ending unnecessary delays in contract cycles. In a bid to driving this, the entities signed a Service Level Agreement (SLA), which would boost local content implementation and simplify the procurement and tendering processes for oil and gas projects. The Executive Secretary NCDMB, Simbi Wabote and the General Manager, Projects Certification and Authorization Division (PCAD), NCDMB, Paul Zuhumben, signed on behalf of the Board at a ceremony in Lagos, while the Chairman of the IPPG, Ademola Adeyemi-Bero and the Managing Director, Newcross Petroleum Limited, Victor Sodje, signed for the operating companies. The SLA was developed by the two parties in line with the provisions of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act and in sync with the Board’s 10-Year Strategic Roadmap, according to a statement by NCDMB. Wabote said the SLA would enhance the reduction of contracting timelines to six months to meet the target set by the Minister of State for Petroleum Resources, Dr Emmanuel Kachikwu. The agreement with the IPPG is the third in the series. The Board had executed similar pacts with the Nigeria Liquefied Natural Gas (NLNG) and the Oil Producers Trade Section (OPTS) – the umbrella body of major oil producing companies. “This initiative was the first between a regulator and its key stakeholders in the Nigerian oil and gas industry,” the NCDMB boss added. According to him, the SLA initiative has been very effective since its introduction in May 2017. He said: “It has enhanced the efficiency

of the interface between the Board and industry operators. The example can be seen in the swift execution of some contracts in the oil and gas industry such as the LPG vessel supply contract awarded by NLNG, the NLNG Train-7 project, and several other contracts put in place by the international operating companies under the umbrella of the SLA signed with OPTS.” “The finger-pointing to the Board as the point of delay in contracting process has drastically reduced with the transparency engendered by the SLAs.” The Executive Secretary also reported that the Board’s delivery on the SLA has been receiving accolades, adding that: “One company keeps track of our performance in terms of when their staff submit documents to us and when they get approvals. They scored us 98 percent in terms of the SLA we signed with them.” He also expressed optimism that the new agreement with IPPG would record a similar success and charged the members to fulfill their part of the deal.

The aspiration, he underlined, is for indigenous operators to see NCDMB as a key contributor to the Federal Government’s policy on Ease of Doing Business and not an obstacle to business aspirations. Speaking further, Wabote commended IPPG members for demonstrating that indigenous operators can operate oil and gas fields successfully. “I have always highlighted at different fora that our indigenous operators as represented by IPPG are poster children of the Nigerian Content law,” he noted. He challenged the companies to go into manufacturing, reiterating the pledge that the Board would support firms that come up with bankable proposals that would add value to the nation’s hydrocarbons. “The Board is still waiting for more of your 25-member group to come forward with similar or even better proposals than the one we did with Waltersmith,” he said.

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LOCAL CONTENT

2018 PNC ends with impressive NC achievements, call for more collaboration

Bank-Anthony Okoroafor Chairman of Petroleum Technology Association of Nigeria (PETAN),

The 8th Practical Nigerian Content (PNC) Forum that held in Yenago, Bayelsa State ended on a high note with impressive records of landmark achievements by the Nigerian Content Development and Monitoring Board (NCDMB). This is in addition to several validating testimonies from industry players on the improvement of in-country capacity utilisation, active participation of the indigenous companies in Nigeria’s energy sector activities, among others. And for many stakeholders, collaboration remains key to achieving the much desired increased content level in the nation’s oil and gas industry that will ultimately lead to industrialisation and economic growth and development, Peace Obi reports.

iven the quality and enriching experience participants are left with from every edition of the PNC, the annual industry gathering on Nigerian Content development and implementation (PNC forum) has over the years become an annual convergence of industry experts, captains of industry, and stakeholders in the Nigerian oil and gas industry, and top leaders in the Nigerian Content policy implementation units. The 2018 edition of PNC

recorded an unprecedented number of attendees, confirming industry players other stakeholders’ acceptance of the annual event. With a theme, “Nigerian Content: Driving Economic Development and Sustainability” dissected through keynote speeches, spotlight sessions, panel sessions, roundtable discussions, among others, the NOGICD Act was said to be a true driver of economic development and a strategic enabler for the indus-

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trialisation of the Nigerian oil and gas industry and its linkage sectors. Also, others considered local content policy implementation as an important course that is capable of changing the trajectory of this country. Outlining some of the achievements the industry, as well as the country, has recorded since the enactment of the NOGICD Act, the Chairman of Petroleum Technology Association of Nigeria (PETAN), Mazi Bank-Anthony Okoro-

LOCAL CONTENT afor noted that the enforcement of the Act in the oil and gas industry has accelerated the rate of in-country capacity utilisation, led to increase in the number of Nigerian service companies, Nigerian-owned assets and equipment, among others. According to the Chairman of the association of indigenous technical oilfield service companies in the upstream and downstream sectors, the policy has continued to bear fruit especially, as Nigerian-owned companies are beginning to play more active roles in the industry. Noting that the indigenous companies are now penetrating such areas that were formerly dominated by the IOCs as they now own offshore assets, own vessels, invest in rigs, acquire mining licenses, among others. Attributing the results achieved so far to the impact of knowledge transfer, the PETAN Chairman said, “When we look at what NOGICD Act has achieved looking at its objective to develop Nigerian Content in the Nigerian oil and gas industry, it tells you that the country is on the part of recovery. There has been growth in the number of Nigerian-owned assets and equipment such as rigs, marine vessels and many more. Today, there are more companies in this class which was never the case before the enactment of the NOGICD Act. “On the growth of Nigerian service companies, before the NOGICD Act, we had 27 Nigerian-owned service companies operating in Nigeria. But at the last count, we have 287 service companies. I remember those days they kept telling us “you Nigerians cannot do it. “That is why I said that the NOGICD Act is what I call strategy formulation with strategic execution and what the NCDMB Executive Secretary and his team and the entire Nigerians have done is what I call “change management”. Focusing on capacity development, Okorafor disclosed that while less than 500 man hours of training was the much that was obtained before the enactment of the NOGICD Act, said that it currently stands at more than 6,000,000 man hours of training. “When Usam was on, in-country training was 150,000 man hours, when Egina was on, it was 450,000 man hours. Engineering in Usam was 400,000 man hours while Egina stood at 1,467,000 man

hours. The key thing that happened to that engineering was that we saw collaboration between Nigerian companies, which has never happened before. So, if somebody tells you that NOGICD is not working, the person does not have his facts, the PETAN Chairman, posited. Speaking during the opening ceremony, the Minister of Petroleum Resources, Dr Ibe Kachikwu reiterating Federal Government’s commitment to deepening local content in the Nigerian oil and gas industry. Similarly, the Group Managing Director, Nigerian National Petroleum Corporation, NNPC, Dr Maikanti Baru assured NCDMB of the Corporation’s commitment to partnering with the Board to increase the Nigerian Content in oil and gas industry to 90 per cent before 2027. He said that the NNPC would collaborate with the Board in setting up research clusters with a speciality in oil and gas activities. “We are fully committed to NCDMB’s agenda for the next ten years to increase Nigerian Content in oil and gas industry to 90 per cent. This initiative will engender economic development and sustain it through backward and forward integration for local content maximization of various industries, he said. Calling on the industry operators and stakeholders to adopt collaboration as an integral element towards improving Nigerian Content in the industry, the Country Chairman, Shell Petroleum Development Company of Nigeria Limited, Mr. Osagie Okunbor said that the company’s local content achievement ride on the strength of its collaboration with other stakeholders in the industry as well as the company’s vision for mutual benefit. He said, “Sustainable value is created through a collaborative framework that strengthens the inter-connected system that improves in-country value creation which includes the framework of research and development, education sector performance, human capacity development, strong manufacturing base, industrial sector performance. A good example of efforts aimed at strengthening a value creation system is the ongoing collaboration between SNEPCo and two Nigerian universities – University of Port Harcourt and University of Ibadan.” The objective he

said is to explore the possibility of reducing capital flight by using local materials and stimulating industry production with cross-sectoral linkages. Welcoming participants to the 8th edition of the PNC forum, the Executive Secretary of NCDMB, Engr. Simbi Wabote noted that the Board’s achievements were largely made possible through collaboration with government agencies as well as other stakeholders in the sector. Stating some of the purposes the PNC serves for both participants as well as for the Board, Wabote said the workshops, seminars, conferences are designed to educate Nigerians on the Board’s activities. Adding that “it also creates room for people to see what Nigerians have been able to do over the years; to create room for interaction and for us, most importantly to get feedback from our various stakeholders on how we are expected to improve on our activities.” Enumerating some of the Board’s achievement in 2018, Wabote said that “We are happy to report that we achieved the Egina FPSO integration. Others include the commencement of infrastructural development of our industrial parks and the international certification programme for 20 marine personnel. Another signature achievement under the technical support pillar is the provision of support to catalyse the establishment of the 5000 barrels per day modular refinery in Okigwe, Imo State. In all, it has been collaboration, collaboration all the way,” he said. The Executive Secretary appreciated Bayelsa State Government for its immense and continuous support in hosting the annual event. He noted that the Board deeply appreciated the support it got from different establishments, stating that it would go a long way in stimulating the Board for greater achievement. He disclosed some of the Board’s plans for 2019 to include, “to support the establishment of at least two more modular refineries and participate in the LPG value chain, progress the infrastructural development of the industrial parks, finalise the review of offshore rig acquisition strategies and ensure the posting of the 20 trained marine personnel for one year international sea time training in fulfilment of the requirement for certificate of competency.”

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LOCAL CONTENT

NCDMB Celebrating Achievements with Deluge of Awards Nigerian Content Development and Monitoring Board (NCDMB) unique strategies in overseeing the implementation of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act has resulted in an ever-growing success story of improved local content in the Nigerian oil and gas industry, and this has continued to attract deluge of accolades to the Board and its leadership. NCDMB success story is heard and celebrated in Nigeria and in the global arena. Peace Obi in this report chronicles a few of the awards, commendations and accolades the Board’s uncommon achievements garnered in 2018

he morning they say is a critical time that can set the tone for the entire day. For the Nigerian Content Development and Monitoring Board (NCDMB)

and its award-winning Executive Secretary, Engr. Simbi Wabote, the year 2018 started off on a good note with commendations and pledges for support coming from different quarters where the impact of the Board’s activities is felt and appreciated. Flowing in from the legislators, judiciary, industry players, academics, and even international observers, 2018 remains one outstanding year that NCDMB. To open what will later become a floodgate of accolades, was the Senate Committee on Local Content’s commendation to the Board on its result-oriented approach to the implementation of the Nigerian Oil and Gas Industry Content Development (NOGICD)

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Act on 12th February 2018. The Senators’ seal of approval for the NCDMB’s activities came during a three-day capacity building workshop in Ghana where the NCDMB Executive Secretary, Engr. Simbi Wabote made a presentation on the Board’s mandate, operations, the regulatory framework, the journey so far and the challenges of enforcing compliance. The Chairman, Senate Committee on Local Content, Senator Solomon Adeola along with his colleagues after the presentation realised the zeal and passion with which the Board pursues its national assignment, unanimously concluded that the Board was fulfilling its mandate and purpose for its establishment.

LOCAL CONTENT The Senate committee in addition to their commendation pledged continuous support for the Board. The Senate, having set the ball rolling, in March, the Oil and Gas Trainers Association of Nigeria, OGTAN during its first National Education Summit that held in Lagos conferred the Local Content Development Achievement Award on the Board’s Executive Secretary. Presenting the award, the President of OGTAN, Dr Mayowa Afe noted that Wabote was honoured against the backdrop of the Board’s diligence in the discharge of its mandate as well as for the NCDMB youth empowerment initiatives. Spreading like a wildfire, the message of NCDMB’s stride in the pursuit of local content policy implementation, soon got to the judiciary circle when the NCDMB’s Executive Secretary made the list for the maiden edition of JURIS LAW Office Award titled “Rule of Law Award”. According to the founder of Juris Law Office and President of the International Institute for Petroleum, Energy Law and Policy (IIPELP), Niyi Ayoola-Daniels, the award was in recognition of the efforts and outstanding achievements of Simbi Wabote for driving positive change in Local Content in the oil and gas industry, using the instrumentality of the Rule of Law and the institution of the judiciary to ensure compliance. Presenting the award to Wabote, a legal luminary, the former Chief Justice of Nigeria and Chairman Advisory Board of Juris Law Office, Hon. Justice Alfa Belgore noted that the award seeks to honour leaders who are taking significant steps towards promoting rule of law and economic growth in Nigeria. Still flowing in, CWC, a world-leading event organisers and training producer for the oil, gas and infrastructure industries in July conferred on NCDMB with the first Dr Alirio Parra Award for outstanding contributions to the Nigerian oil and gas industry. The NCDMB’s Executive Secretary was presented with the award at a gala dinner that held in Abuja to mark the end of the 2018 NOG conference in Abuja. According to CWC and Levmora Services, organisers of the NOG conference, NCDMB was chosen for the Dr Alirio Parra Award for being the most outstanding federal agency in the Nigerian oil and gas industry. And the walls they say do have ears! In the global arena, the efforts and commitment of the NCDMB in the development of the inno-

vative approaches to increase indigenous companies’ participation in the country’s oil and gas projects and engendering business opportunities locally did not go unnoticed. Thus, at the 2018 Africa Oil Week in Cape Town, South Africa, Nigeria stood tall with a global recognition when the Executive Secretary, Nigerian Content Development and Monitoring Board (NCDMB), Engr. Simbi Wabote was conferred with a global award of excellence for outstanding contributions to sustainable local content development in Nigeria and across Africa’s Oil and Gas Industry. The award which was conferred on Wabote by the organisers of AOW at the Petro Africanus Dinner was part of the events marking AOW’s 25thanniversary celebration. Engr. Wabote’s selection and suitability for the award was again hinged on his unprecedented contributions to the localisation of industry knowledge and expertise, monumental capacity development programs in Nigeria with cross-border impacts, trenchant advocacy of the imperatives of local content practice and benefits, smart regulations and rare leadership capacity to balance dialogue between international commercial ventures and national interest. AOW, a premier international oil and gas summit, which brings together over 70 governments, national oil companies, investors, regulators, licensing agencies and leaders of major oil and gas companies that shape the continent’s upstream hydrocarbon landscape in Africa again created the platform for global recognition of NCDMB’s ‘magic wand’ on local content policy implementation. It was discovered that Wabote’s award for Local Content excellence by AOW/ITE Group was the first of its kind in the 25 years history of AOW. In his acceptance speech, Wabote expressed delight at the honour and recognition by AOW/ITE Group, noting that the award was significant as “it communicates AOW’s acknowledgement of the Board’s programmes and strategies for localizing industry knowledge and capacity development”. Yet, the echo of Wabote’s exploit through the instrumentality of local content policy (NOGICD) Act was heard and celebrated even among the academics. The ES, on Thursday, November 22, in Port Harcourt, Rivers State was inducted as a Fellow of the

Institute of Petroleum Studies (IPS), the University of Port Harcourt for his exceptional accomplishments in engineering, strategic management and local content leadership in the Nigerian oil and gas industry. The prestigious award was part of the flagship programme of the Institute’s 15t Induction Ceremony/Exhibition which took place at Ebitimi Banigo Auditorium, University of Port Harcourt. The induction is considered a rare honour as NCDMB ES was one of the two persons admitted to the fellowship of the Institute this year. The second person, Hervochon Joel is a French national and Executive Director, Deep Water District, TUPNI, Lagos. Both professionals were inducted for their distinguished career in the oil and gas industry, spanning nearly thirty years. The maritime sector was not left out as it also joined in celebrating and nudging NCDMB for greater achievement when the Nigerian Chamber of Shipping (NCS) Governing Council paid a courtesy visit to the Board’s Executive Secretary at the Board’s Head Office in Yenagoa, Bayelsa State on November. Speaking on behalf of the delegation, the President of NCS Governing Council, Mr Andy Isichei said that the Council had observed the phenomenal achievements of Engr. Wabote-led NCDMB, particularly its transparency in administering the Nigerian Content Intervention Fund (NCI) Fund. Isichei said, “we have observed the uncommon achievements of your Board, hence we decided to come and voice our commendation to you and to encourage you to continue the good job you are doing. We are proud of your agency and want to collaborate with you to advocate and propagate the achievements of your Board.” And another award and commendation that reiterate the industry players’ and core stakeholders’ endorsement came with the Petroleum Technology Association of Nigeria Chairman’s Award for Local Content Personality of the year. PETAN had during its 13th Oil Industry Achievement Award ceremony with a theme, “Forging ties, driving growth stability through Nigerian Content Cooperation” that held in Port Harcourt on the 30th November, 2018 presented the NCDMB’s Executive Secretary with the award in recognition his contributions for the development and growth of Nigerian Content in the country’s oil and gas industry.

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POWER ROUNTABLE

The PwC’s Power and Utilities Roundtable FOR THE RECORDS

CONTINUED FROM LAST EDITION

he economy of Lagos supports the implementation of a cost reflective tariff. Presently, Lagos state gets about 27% of the grid power which gives us about 750MW to 800MW without disruption (300MW to 500MW with disruptions). Hence, the State has put together a proposed Bill titled “The Lagos State Embedded Power Supply Bill” approved by Lagos State Executive Council and currently being fine-tuned by the Lagos State Parliament which with the highlights provided below, constitutes the proposed intervention approach of our government; Intervention in generation. 3000 MW in addition to adequate gas supply in Lagos and support provided to TCN for unlimited transmission in the whole State. A special purpose vehicle will be created to support the discos in bill collection. We will also adopt as well, a super vendor model to ensure there is a seamless metering and collection system. A power theft law which will be the first in the country, if passed successfully will be in line with enforcement support for the discos. Provide finance to enhance the

distribution capacity of the discos, amongst others. The Bill is currently with the State Assembly waiting to be passed. The tariff will be cost reflective as the power program is off the national grid hence the Regulator will want to review the tariff charge. An implementation committee is being set up to come up with a tariff that will not constitute a burden to consumers. There will also be a Power Council made up of representatives of the power consumers including the NLC, TUC, NECA, NCCI, consumer associations and other Trade Groups who will focus on advocacy and protection of consumers’ interest. With respect to power in Nigeria, I want to conclude that we will begin to find solution to the power problems in Nigeria if we focus on Lagos State as the best starting point. This will create a model and provide a workable and implementable plan that is sustainable. Furthermore, States that cannot afford the cost can then be subsidized by the Federal Government. Wrongly subsidizing every power consumer in the country with the mindset that every Nigerian cannot afford power will limit investment into the sector, as

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well as “competition and supply” Key Takeaway Priority 1: Investing in the Recovery. Power is a key driver of Nigeria’s industrialisation aspirations. On-and-off grid solutions, energy mix diversification and network augmentation are key discussion points. What are the “highest impact on-and-off grid projects / plans” that are expected to substantially increase energy delivery to Nigerian businesses and homes? On-grid Generation Transmission, Rehabilitation and Expansion Program The generated load must be proportionate to the connected load. Hence, the grid has to be expanded. Efforts are already geared towards expansion of the grid. The rehabilitation and expansion program has been conceptualised and a total of $1.5billion raised. The rightof-way issue across states is being resolved. More stringent contract qualification criteria Over the years, equipment suppliers were not interested in installations within Nigeria, as a result, equipment that have been fully paid for remain at the port. The Transmission Company of Nigeria (TCN) has cleared stranded

POWER ROUNTABLE

containers worth up to $2.5billion from February 2017 till date. To curb this problem, TCN has modified the contract qualification criteria for the supply of equipment to include an installation clause. Increased gas supply and a more diversified power mix Increasing gas supply to the generation companies will increase power generation by 1,500MW to 2,000MW. Increased generation from new power projects Power generation from hydro projects such as Mambilla and Zungeru hydro power projects should also increase power generation. Currently, Sahara Power’s Egbin Phase II is set to add an additional 1,500MW to 1,800MW to the grid, which is expected to substantially increase energy delivery to Nigerian businesses and homes. Investment in the Power Network Distribution companies need to improve their network in order to better segment their customers and channel power to people that need them. Also, the interface between the TCN and distribution companies has to be improved.

Off-grid Solutions Use of Mini Grids Recent regulation by NERC empowers the general public to set up minigrids and notify distribution companies if it is certain that no distribution company will be in the area in 4 to 5 years. When a distribution company eventually appears in the space, it will compensate the investor for the investment made. The Power Sector reform is designed in a way that Nigerians get to take over the running of privatised companies after a period of 5 years. The Nigeria Employers’ Consultative Association (NECA) further reinforced this through the new rule that enforces the use of local contractors under the local content regulation. Solar Power Renewable energy from solar power is a good addition to our energy mix, but its contribution is dependent on the design of the grid as well as grid stability. Due to the instability of solar, there is a limit to the load that can be put on it at any point in time. Countries that use a lot of solar have much larger grids such that the solar component represents a small component of the energy mix. Technology is being developed to address the major challenge with solar power i.e the need for storage. Embedded Power Pricing and Price Regulation There are willing investors in embedded power generation. However, issues such as high unpaid receivables, losses and an unsustainable pricing system are preventing investors from committing funds. Embedded power generators charge up to N60 per KW of electricity, however the current rate being paid by maximum demand customers ranges between N30 and N40. This shows that if there is no pricing regulation for embedded power, customers will be unwilling to pay that amount. If this commercial aspect is not resolved, investors in embedded power will have negative returns on investment. Segmentation by distribution Companies With the mini grid, distribution companies can dimension the requirements of an area and what is needed to provide power to those people. Consequently, it can execute a deployment plan at its own pace. “I will make electricity so cheap that only the

rich will burn candles”- Thomas Edison, 1871 Payment for Energy Supply Rural electrification could either be financed by customers or the government. An approach to this is for the financially buoyant power consumers to pay cost reflective tariff for power supply, while government subsidizes for the less privileged. Cultural reorientation & reduced government intervention in the Sector Electricity in Nigeria is viewed as a social service. While there may be a social element to it, Nigerians need to realize that the social service goes beyond the government. There is a need to sensitize the Nigerian public that power cannot be subsidized by the government forever. Rural electrification and Renewables Power supply through renewables may be the most effective and efficient way of rural electrification.

Solar Power Renewable energy from solar power is a good addition to our energy mix, but its contribution is dependent on the design of the grid as well as grid stability.

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LOCAL CONTENT

Mikano operations rooted in local content Peace Obi

ikano International Limited has reiterated its commitment to local content policy implementation, stating that the power generation company remains avid to government policies that benefit the economic growth and development of Nigeria. The company’s Public Relations Officer, Mr. David Pakur in an exclusive chat with OER during the 2018 Future Energy Nigeria conference and exhibition in Lagos recently, said that no genuine business should have issues with government policies of improving local value creation in the country. Placing Mikano International Limited’s local content compliance at 85 per cent, Pakur said, “if you are opportune to visit our facility, I need not tell but Mikano works on nothing less than 85 per cent of local content. The local content policy affects every other company, but being an indigenous company, it has not been difficult for us to actually oblige with. With my experience so far, as long as you do business genuinely, you will always find the possibility of following the policies and trend of the government of the country you are doing business. So it has not really been a problem, because we try as much as possible to do business in line with the government policies and that is why we are still here these 25 years. Well, the truth of the matter is that to the Nigerian market, people see us more or less like the market for the people as far as am concerned. So, we get help from the fact that we have been able to support the Nigerian economy in this sector to a level that people can actually have us on their lips. We manufacture locally, we don’t import. Yes, we probably import some of the parts but we manufacture here. Like the generators, we couple it here. We just bring in the parts. In fact most other things like the soundproof; we are the ones who do the

soundproof ourselves. Continuing, Pakur said that the power generation company in its 25 years of operation in Nigeria has distinguished itself through quality and innovative solutions to the Nigerian power problem. Stressing that Mikano’s energy solutions are designed along the economic needs of the country the PRO noted that the company’s business isn’t threatened by the avalanche of renewable solutions available in the Nigerian energy market. Adding that instead of renewable energy dislodging other energy sources, it will rather exist along with them. He said, “When we talk about this alternative energy, it’s more or less the newest technology in the power solution space. When electricity came into place, it took us several years to get to a stage and we have not even gotten it right up till now. So, when we talk about this renewable energy,

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we are just about to start in Nigeria. And for my company, I will say we are moving with the trend of technology. We started with generator but we have diversified into a whole of things. We might not be doing the renewable energy thing in terms of the solar and the rest for now. But I am very sure that technologically wise, we are looking into the better part of the economy when it comes to renewable energy. Talking about going green as well, we have a couple of products like my gas engine from the NTU onsite energy. So with all these and going into the big power generation project, Mikano as a company is trying as much as possible to fit into the economic needs of the nation.

ENERGY DYNAMICS

Current issues

and policy options By Soji Awogbade FEI

Introduction: This material covers most of the policy issues affecting the Nigerian energy sector and as a good segue into the topic, it is important to note that the Nigerian Energy mix doesn’t lack in policies and regulations; what it lacks fundamentally is the willingness to implement these policies aggressively towards the repair and growth of the energy subsectors in the country. Mr. Soji Awagbade is a founding Partner at ǼLEX and heads the Energy and Natural Resources Practice Group. His area of expertise spans across Oil and Gas, Power, Project Finance, Investment and Securities, Environmental and Company Law. Over the last 30 years he has either managed or directly participated in most of the major FDI transactions in the Nigerian electric power and petroleum sectors.

OIL & GAS Below are highlights of some of Nigeria’s Oil & Gas Policies and their milestones. The Economic Recovery & Growth Plan (ERGP) (2017 – 2020) The energy objectives of the Economic Recovery & Growth Plan (ERGP) is to: • Urgently increase oil production; • Expand power sector infrastructure; and • Boost local refining for self-sufficiency. The Economic Recovery & Growth Plan (ERGP) also seeks to: • Restore production to 2.2 mbpd in the short term and 2.5 mbpd by 2020 to increase export earnings and government revenues by an additional N800 billion annually;

• Reduce petroleum product imports by 60 per cent by 2018, become a net exporter by 2020, save foreign exchange and prevent reversion to the fuel subsidy regime; • Reform NNPC to deliver returns to the Government and provide excellent service to customers; • Expand domestic gas production to meet power generation and manufacturing demand; • Promote Liquefied Petroleum Gas (LPG) for domestic use; and • Increase local content in the upstream and downstream oil and gas sectors. This table breaks down some of the issues in the Oil & Gas sector, while also providing information on how to solve them.

ISSUES

SOLUTIONS

PIGB

Enactment of the

Fluctuating oil prices

Improvement in the saving culture to ensure that the excess proceeds of the “boom period” alleviate the hardship of the “doom period.”

Aging/inadequate infrastructure

Encouraging PPPs

Environmental pollution

a) Implementation of existing policies; b) Governmental will to prosecute oﬀenders of envi ronmental oﬀences; c) Judicial activism to stem technicalities like locus standi, especially in cases of public nuisance; d) Governmental will to ensure adequate compensa tion of host communities. ORIENT ENERGY REVIEW Vol.9 No. 01 Dec., 2018 / Jan., 2019

ENERGY DYNAMICS

Oil theft and pipeline vandalism

a) Community policing; b) Greater synergy between NNPC and law enforcement agencies; c) Incentivising whistle-blowing.

Moribund refineries Gas flaring

Modular refineries Implementation of existing policies: • Flare Gas (Prevention of Waste) Regulations, 2018 • National Gas Flare Commercialisation Pro gramme • National Gas Policy • ERGP

Gas storage issues

a) Encouraging virtual gas pipeline; b) Encouraging private sector investments in in-coun try gas pipelines. c) Creation of a special fund for government JV cash calls; d) Proper investigation of frequent allegations of non-remittance of petroleum proceeds to the federation account.

POWER

Below are highlights of some of Nigeria’s Power Policies and their milestones. The National Integrated Infrastructure Master Plan (NIIMP) has the following milestones for power in 2018: • Increase power generation from 3.5 GW in 2015 to 20 GW by 2018 (and to 350 GW by 2043, with focus on gas as the immediate priority and adding alternative sources after 2023); • Increase efficiency of existing power infrastructure – increase load factor, decrease losses in transmission, as well as distribution, billing and collection; • Revamp and expand transmission network to match capacity increase in generation; and • Increase human capacity through training.

In addition, the ERGP also seeks to:

• Optimise the delivery of at least 10 GW of operational power capacity by

2020 to boost economic activity across all sectors and improve the quality of life of the citizenry; • Improve energy efficiency and diversify the energy mix, including through greater use of renewable energy; • Facilitate private sector investment in generation, transmission, and distribution; • Improve access to electricity to all Nigerians; • Increase rural electrification

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through the use of off-grid renewable solutions; • Restore financial viability in the electricity market; • Implement a data-driven approach in power sector development planning; and • Eliminate sabotage of gas and power infrastructure. This table breaks down some of the issues in the Nigerian Power sector, while also providing information on how to solve them.

ENERGY DYNAMICS

ISSUES

SOLUTIONS

Pricing: cost-reflective tariffs versus affordable tariffs Liquidity issues

Introduction of cost-reflective tariﬀs. a) Introduction of cost-reflective tariﬀs; b) Creation of an open and completely privatised elec tricity market.

Metering gap: 4,740,275 meters as at 31 December 2017 Implementation of the Meter Assets Provider Regula tions, 2018: concerted eﬀorts among NERC, Discos and holders of the Meter Assets Provider Permit to ensure prompt rollout of meter assets. Electricity theft: meter tampering, illegal connections, and vandalism

a) Criminalising electricity theft; b) Facilitating community policing; c) Empowering the Anti-Electricity Vandal Re sponse Squad (AEVRES) of the Nigerian Police Force (NPF); d) Increased synergy between Discos and AEVRES.

MDA debts to Discos

a) In the interim, oﬀsetting Disco debts to TCN/NBET against accumulated MDA debts to Discos; b) Making appropriate budgetary allocation specif ically for electricity bills in the budgets of MDA; c) Governmental will to pay oﬀset MDA debts.

Dearth of infrastructure

Encouraging private sector investment in infrastructure.

Bankability of power projects

Introduction of cost-reflective tariﬀs; Creation of an open and completely-privatised electricity market.

CONCLUSION

Legal instruments alone are not sufficient to address the issues in the energy sector. Government must be ready to take up the gauntlet, and frontally address the issues bedeviling the sector. A key point in achieving a number of the laudable milestones set in the policy documents reviewed above, is greater private sector participation. Therefore, policies of government must begin to deliberately instill investor confidence in the energy sector. sawogbade@aelex.com www.aelex.com

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OIL&GAS

70% of lubricants in Nigeria are substandard — SON

he Director-General, Standards Organisation of Nigeria, Osita Aboloma, has disclosed that over 70 per cent of the lubricants in the market failed the quality parameters of the Nigerian Industrial Standard. Worried about the influx of substandard lubricants into the Nigerian market, the agency announced that it was collaborating with manufacturers and dealers of lubricants to stamp out substandard products in the sector. Indeed, the standards body stressed the urgent need to checkmate the emerging trend of faking and cloning of successful brands so as not to short-change the unsuspecting Nigerian consumers while also preventing a drain on the Nigerian economy. The SON boss, during an emergency meeting with stakeholders in the lubricant industry, said the development was a cause of worry to the agency. He said, “The meeting was as a result of the persistent complaints from the consumers on the effect of the influx of substandard and adulterated engine oil that has led to the failure of machineries that are used in manufacturing. “The products are life-threatening and create a drain on the economy. After our nationwide campaign of fighting substandard lubricants, we had to let dealers know that what we have seen is not satisfactory while also having a workable partnership to see how we can combat the menace. “This is why we let them know that when they register their products, it becomes the responsibility of SON to protect them from purveyors of substandard products. Some of the goods that are dangerous will have to be destroyed while some undergo corrective measures all at the cost of the owners of such products.”

He noted that SON would also intensify its effort in constant monitoring of the people who manufacture or blend within Nigeria to ensure that they did not fall below the minimum requirement of the standards. “Any importer or manufacturer that falls below the NIS will face the full wrath of the law. Nigeria is a world trade organisation member and we have the same standards for imported and locally -manufactured products. This is what we call fair trade,” he said. Also speaking at the event, the Managing Director, LUBCON, Taiye Williams, stated that the activity of product adulterators was killing the manufacturing sector of the economy, saying after going through the effort to churn out quality products, the unscrupulous dealers in fake and substandard goods indulge in faking the successful brands in the market to rob consumers of their hard earned money while also destroying the image of successful brands in the market. “We are very happy with what the Director- General, SON, is doing now and we are in full support as a group. We know that if we are able to pull this through, we will be able to solve this problem while also sustaining manufacturing in this country,” he said. The Chief Executive Officer, Dozzy Group, Daniel Chukwudozie, commended SON’s effort in fighting the menace of substandard goods while calling on the Nigeria Customs Service to step up its game as the goods were better checked at the point of entry. “Manufacturing is the hub of this nation and they create job opportunities for Nigeria’s teeming population, so they must checkmate the influx of the substandard lubricants so that they do not kill the industry,” he said. The Punch

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OIL&GAS O IL&GAS

Talent summit: Convert human resources to productive capital, Stakeholders told Peace Obi

he organisers of the Africa Oil and Gas Talent have called on human resources experts, manpower development organisations and stakeholders in Nigeria’s oil and gas industry to gear up more effort towards transforming available human resources into productive capital, especially as the innovative technologies and digitalisation permeate industry and its operations. The third edition of the annual event which held recently in Lagos on a theme, “People as the Real Assets: Delivering Innovation and Growth in the “New Normal: of Global Oil and Gas”, saw a convergence of human resources experts, stakeholders in the Nigerian oil and gas industry, among others as various speakers reiterated the need for Nigerian oil and gas industry to keep abreast with emerging technology. The Chairman, AOGS, Engr. Felix Amieyeofori told OER that Nigeria must

rightly equip her human resources to face the changes going on around the world in politics, business, technology among others to take her rightful place in the comity of nations. He said, “Honestly, things have changed! Globally, looking at the energy sector, you will realise that oil is gradually being dropped for some newer energy solutions. People have been investing heavily in renewable. If you look at it again, the analogue system is gone and everything is now done on the Internet. For example, in the oil and gas industry, it is becoming clear that the industry is being taken over by digital technology. “The question now is, how can we convert the workers to become digital oil and gas personnel? How can we convert the workers to become people that can fit into the current industry need and demand?” Speaking further, Amieyeofori said that the summit aims to sensitise government and the private organizations on the global trends in technology. “It is a new phase, processes and operations of industries are changing, technolo-

gy has come to cause a lot of positive disruption. We cannot keep following from behind, we need to find a way to be part of the new event that is taking place. So, the idea is not necessarily about repositioning human resources; it is to identify the resource in people and then transform them into productive capital.” Speaking also, the Managing Consultant, Human Leadership Resources, Enife Atobiloye noted that Nigeria’s huge human resource must up-skilled for them to become assets. “Technological advancement is placing new demand on the industry. The industry needs a workforce that can develop sub-skills that make people to readily succeed. In the world of continuous changes, one of the skills for needed is adaptability. People have to be adaptable to change. This is not the time for people to sit down and say this is how we used to do things. No! people have to be able to stand up and move with the tide” The event was hosted by an international media personality and corporate communications executive, Wofai Samuel.

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OIL&GAS

FG set to launch new guidelines for mining, oil and gas industry

he Federal Government in its efforts to achieve a standardised oil and gas industry will on Monday in Lagos, launch three regulatory guidelines to that effect. The regulatory guideline which will be launched by the Minister of state for Petroleum Resources, Dr. Ibe Kachikwu according to the Deputy Director, Department of Petroleum Resources (DPR), Dr. Musa Zagi is aimed at standardising the nation’s oil and gas industry. Zagi disclosed this in Lagos, yesterday, during the unveiling of the forthcoming 18th edition of the International HSE Biennial Conference on the Oil and Gas Industry in Nigeria scheduled for November 26th – 28th, 2018. The new guidelines known as Environmental Guidelines and Standards for the Petroleum Industry in Nigeria (EGASPIN), 2018; is said to be the Regulatory Guidance for the Manage-

ment of NORM in the Petroleum Industry:

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Abandonment, Decommissioning and Decontamination of Oil and Gas Installations as well as Occupational Health Guidelines & Standards for the Petroleum Industry in Nigeria. The conference is themed, ‘Driving Sustainability in the Oil and Gas Industry through Improved Stakeholders’ Environmental Stewardship, Health and Environment’ Zagi said contemporary and pertinent issues on security, safety of life and assets vis-a-vis its effect on the environment would be discussed by experts from various fields with extensive experience in the oil and gas industry. “Bearing in mind that the oil and gas industry is global, it is expected that the various speakers and authors who have been drawn from all spheres of discipline will bring to fore their wealth of experience (local and international) as it relates to security hence the theme, he said.

OIL&GAS

Foreign investment drops to $7.7m, investors shun Nigerian oil industry

nvestors’ apathy trailed the Nigerian petroleum industry in the third quarter of 2018, as foreign capital inflow in the industry dipped by 68.9 percent to $7.73 million compared to $24.85 million foreign capital recorded in the second quarter of 2018. According to data obtained from the National Bureau of Statistics (NBS) Foreign Trade Statistics for third quarter 2018, the value of foreign capital inflow into the petroleum industry in the third quarter of 2018 was 51.9 percent lower than the $16.07 million in the third quarter of 2017. The NBS report further stated that foreign capital inflow into the petroleum industry in the third quarter of 2018 accounted for 0.27 percent of total foreign investment inflow into the Nigerian economy in the quarter under review. The report also revealed that the value of foreign investment inflow into the oil and gas industry in the third quarter 2018 was the lowest recorded since the first quarter of 2016. Specifically, in the first, second, third and fourth quarters of 2016, $20.83 million, $200.39 million, $171.63 million and $327.30 million foreign capital flowed into the oil and gas industry respectively, while $101.08 million, $190.39 million, $16.07 million and $23.83 million flowed into the oil industry in the first, second, third and fourth quarters of 2017 respectively. In 2018, the first quarter foreign capital inflow was the highest with $85.62 million, dropping by 70.98 the to $24.85 million the second quarter of 2018; while it dropped further by 68.9 percent to $7.73 million in the third quarter of 2018. The NBS disclosed that the total value of capital importation into Nigeria in the third quarter of 2018, stood at $2.855 billion, dropping by 48.21 percent compared to $5.5 billion recorded in the second

quarter of 2018 and a 31.12 per cent decrease compared $4.14 billion recorded in the third quarter of 2017. The report said, “The largest amount of capital importation by type was received through Portfolio investment, which accounted for 60.5 per cent ($1.723 billion) of total capital importation, followed by Other Investment, which accounted for 21.07 percent ($601.53 million) of total capital, and then Foreign Direct Investment FDI, which accounted for 18.58 percent ($530.63 million) of total capital imported in the third quarter. “By sector, capital importation as shares, which is closely related to equity investment (FDI and Portfolio Investment) dominated the third quarter of 2018 reaching $1.67 billion of the total capital importation in the quarter.” Minister of State for Petroleum Resources, Mr. Ibe Kachikwu, had during the presentation of the petroleum industry scorecard from 2016 to 2018, noted that investments were lacking in the petroleum industry. According to him, the Federal Govern-

ment had been working on rebuilding the country’s four refineries that are owned by the NNPC, adding that the NNPC had struggled to find the financiers, now financiers have finally been found, but to agree on the terms had been difficult. He expressed optimism that between the end of this year and end of first quarter 2019, the commercial aspects of this financial undertaking, which is in the excess of over $2 billion, would have been completed, thereby, allowing the private sector invest in the refineries’ revamp. On other measures that would drive foreign investment inflow into the Nigerian economy, Kachikwu said, “There are 30 other field works that have been approved by the DPR, which have the capacity of adding about 500,000 barrels per day production. If you add that, we expect that, all things been equal and if we are working as we should, by the end of 2019, we should be averaging 2.5 million barrels production, which would be the first time that would be done in the country.” Sweet Crude

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OIL&GAS

Total goes total in energy solution Peace Obi

eading the way into solar energy solutions amongst other oil and gas companies in Nigeria with the introduction of its first solar service station in West Africa in 2013 and the subsequent deployment of solar hybrid solutions in its strategic service stations spread across Nigeria, Total Nigeria Plc in its commitment to make the world a better and a greener place, has introduced different scopes of solar energy solutions to the Nigerian market for domestic, industrial and commercial use. The Product Marketing Manager, Mrs. Kate Ogu-Oige told OER on the sideline of the Future Energy Nigeria conference and exhibition in Lagos recently, that Total

Nigeria Plc has resolved to offer Nigeria and the African energy market a complete energy solution. Adding that the company’s renewable energy solutions are targeted at improving the country’s energy efficiency, reducing carbon dioxide emissions and making energy available to all. Stating that the world is diversifying its energy sources Ogu-Oige said that, “we are in a state where we need to go green because the carbon footprint on the planet is getting too much and it is having a drastic effect on the planet and the inhabitants. Just like our name, we are a complete energy solution company. So, we want to render complete energy solution, be it fossil fuel or renewable. “We appreciate the environment and have the zeal to make the world a better and a greener place. We have a strong commitment to delivering better energy. That is why we

have our name, “Total”. And to live up to our name, we want to deliver better and cleaner energy to our numerous customers. This entails migrating our consumers from fossil fuel to greener energy. So, we are encouraging people to go green - to go from generator usage to solar home solutions,” she said. Speaking further, the Product Marketing Manager noted that the company’s incursion into renewable energy will not pose a sustainability threat to its fossil fuel business. According to her, “we have been around for over 60 years in Nigeria. We are a strong brand and hope to retain our market leadership in the energy sector and our interest, especially in renewable energy solutions. Our business will still be sustainable because we are bringing in new packages, and these packages are designed to meet the energy needs of all segments of the market.”

LADOL Free Zone Becomes First Company to Get ISO Certifications in West Africa

he Lagos Deep Offshore Logistics Base (LADOL) Free Zone has broken new grounds by becoming the first company in the whole of West Africa to be awarded the International Organization Standardization (ISO) 9001:2015 and 45001:2018+14001:2015 certifications. LADOL’s ISO 9001:2015 certification was achieved after a rigorous and transparent audit process conducted by Bureau Veritas while ISO 45001:2018+14001:2015 was conducted by RINA between December 10 -14, 2018. This certification not only shows that LADOL’s success is built on hard work, consistency, long-term planning and sustainable business practices, but has also proven that Nigerian companies can lead the way and exceed international standards. Being the first company in Nigeria to achieve the new ISO 45001:2018 Occupational Health and Safety Management certification and the only one to have both ISO 9001 and ISO

14001:2018, has placed LADOL among the elite category of companies which are internationally recognised for best practices. According to ISO, achieving 9001:2015 certification means that an organisation has demonstrated customer focus, leadership, innovation of people, systematic approach to management, continual improvement, factual approach to decision-making and mutually beneficial supplier relations. Commenting on this, the Managing Director of LADOL, Amy Jadesimi, attributed the new feat to the hard work and dedication of LADOL staff. “Many staff members worked long hours, and everyone was enthusiastic and collaborative. According to her, obtaining the certifications was part of LADOL’s long-term plan, which its management will continue to improve on every year to exceed. Jadesimi, who said that Nigerian companies are very well placed to take the lead in several

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areas, leveraging off the nation’s huge untapped and under-served market, added that having strong quality and safety standards is a must in business. “United Nations 17 Sustainable Development Goals also provide a template on which we can build new business policies, procedures and models that are most likely to be highly profitable in the medium to long-term,” she added. The newest version of the ISO 9001 certification contains key updates including an emphasis on risk-based thinking to enhance the application of the process approach, improved applicability for services and increased leadership requirements. ISO 45001 targets reduction of occupational injuries and diseases. The standard is based on OHSAS 18001, conventions and guidelines of the International Labour Organization including ILO OSH 2001, and national standards.

INTERVIEW

The success story of International Energy Services Limited as narrated by DR DIRAN FAWIBE It is usually difficult to get a Chief Executive officer of a renowned oil and gas company to freely tell his own story in view of the peculiar nature of the business and the prevailing dearth of information and competitive tendencies in the sector. The Chairman/CEO of the International Energy Services Limited (IESL), Dr Diran Fawibe damned the consequences to kindly grant an elaborate and revealing interview to Orient Energy Review. In the interview he spelt out the scope and depth of the activities of IESL and more. According to Dr Fawibe, “IESL as we are popularly known was established about 28 years ago. We started in 1990 but we rolled out effectively in 1991 and we have been engaged in providing consultancy and oilfield services in the industry. “We started as a training company and then moved out to other activities like environmental and analytical laboratory services, waste management and so on. For example, we have a big analytical laboratory in Port Harcourt, where we provide various types of analysis like full hydrocarbon analysis, emission control, effluent monitoring, corrosion management, and water analysis. We also have a microbiology lab and a geotechnical lab all within this laboratory, and we work for virtually all the major oil companies, Chevron, Shell, Total, ExonMobil, and so on.” He said, “We moved on to do manpower supply to the industry by

hiring both expatriates and locals for the various oil companies. We also do Project Management, Construction Supervision for various projects, Pipelines and Facility upgrade, but what remains the flagship service operation we provide is the engineering design of oil and gas facilities and pipelines, including FPSO designs. Continuing he noted that, “As a matter of fact, for over 10 years now, we have been engaged in engineering designs. We were the only Nigerian company that did four modules to the Deepwater Usan FPSO, with 180,000 man-hours. We worked on Ofon 1 & 2, as well as Chevron’s DSO Offshore Project, involving design of two Offshore Platforms. “We are part of the Egina success story, being one of the consortiums of three companies that undertook the Engineering Design of the FPSO. Our contribution was about 30% of the job and that happened so successfully. We were also involved in the subsea production system design with Cameron as a subcontractor for Erha North Phase 2, with a remarkable performance which stood us out as a good stead for partnership with other companies for similar subsea system designs. Disclosing that despite all its achievements, IESL also ventured into the area of Power and Renewable Energy, with the capability to do Solar designs and installation, and even combine it with Wind Energy. “We did this hybrid for the

Energy Commission of Nigeria (ECN) so many years ago and it is still working. We also did a rural electrification solar project in Imo State. We did various solar design and installation of facilities including and navigational aids, homes, schools, boreholes and so on. “In summary, IESL presently operates with five semi-autonomous business divisions; Engineering Design and Construction; Oilfield Supply and Services (dealing with supply management, installation and maintenance of equipment and facilities); Environmental and Analytical Laboratory; Gas, Power & Renewables, and Manpower Resources and Training. “As a result of our phenomenal success, we eventually came to the point where it became necessary to export our expertise to other countries. We are now registered in Ghana, Equatorial Guinea, Angola and Mozambique, Liberia and Gabon. Our real aim is to become a Pan-African company.”

The following represents the question and answer portion of the interview. How did IESL rise to limelight, what will you say your success factor comes down to? I will say it is because we run the company as a business and that we engage the services of professionals. As

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INTERVIEW a business, we try as much as possible to apply good business practices which will satisfy our major clients, noting that these clients are mostly International Oil Companies (IOCs) and their business is a serious business which gives no room for trial and error. This orientation helps us in IESL to provide services that satisfy our clients, which in turn has led to repeat businesses. I will put this down as the first factor of our success. The next factor is the quality of our services; we strive to keep it top notch. Emphasis on quality is one of the core values we’ve imbibed in IESL; it’s like a mantra for us that we render quality services. To show how serious we are about quality, we have three International standard certifications which govern most of our operations. We have an ISO in Quality Management System, the second one is an ISO in Environmental Management System and an ISO in Safety Management System, formally identified as OHSAS. We train our staff regularly to maintain this culture of rendering exceptional quality services to our clients’ satisfaction while meeting all the standard requirements of the business. Also, our Management works as a team to maintain integrity as our most important core value; the combination of these values and our strict adherence to best business practices is what I consider the major driving force behind our activities. We both know that this present Administration has a vigorous drive towards actualising the potentials of our Local Content policies, can you tell us how these policies have impacted IESL? Having been around before the advent of the Nigerian Oil and Gas Industry Content Development Act (NOGICD Act) in 2010, we had to grapple with the obstacles and the challenges which constrained the activities and the progress of the local oilfield service companies. We decided in IESL to contribute what we could to shape the process of formulating the policies that will govern local participation in the industry. So, we started a popular Energy Forum in the form of an annual conference that attracted top level executives in the energy, and oil and gas industry and ministerial presence as well. It was very successful, while we

were engaged in running workshops and training programs as well. There was a year we had four Ministers in one seating! This conference lasted for 10 years and it provided the platform used to articulate some of the major issues in the industry, theimperatives of local content and the NOGICD Act as we know it today was part of this initiative. The Act has provided the basis for us to navigate service offering in the industry differently from the way it used to be before, when the IOCs were playing all kinds of games to exclude Nigerian companies from participating. Before 2010, NNPC was applying policy guidelines meant to allow Nigerian Companies participate in providing services in the industry, whereby specified scopes were assigned to Nigerian companies in some of the projects undertaken by the IOCs, but of course they had their way of making excuses for the reasons why the Nigerian companies can’t participate. In order to resolve this impasse, the government did a fantastic job by setting up a consultancy to audit the capabilities of all the Nigerian Companies in the industry and classified them on the basis of their capabilities or specialisations. The audit thereby provided the basis used for setting the targets given to the IOCs for Local participation. I can say that we all have a win-win situation right now with the drive the NCDMB and government are making

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on local content engagements. If they stopped at creating a very good Local Content Policy and then fail to enforce it, the Nigerian Companies and the economy at large will be worse off. If the IOCs are not working with local service providers who have the right capability and specialisation, their cost of doing business and reputation will be affected negatively in the long run. The Act has emboldened IESL and many other indigenous companies to bring in more investments which we couldn’t have considered doing so if we have no guarantee that we will be successful in our bids for projects. The only thing I can say that has a negative impact on us is the drop in the oil prices and it’s consequently slowing down activities in the industry, apart from that IESL has largely benefited from the enabling environment the Act has availed us. So what was the day-to-day running of business like for IESL in those pre-NOGICD Act days? IESL was privileged enough to have a lot of jobs even before the Act was enacted in 2010. Around 2007 - 2008 we were involved in the engineering and designing of the Ofon platform. We did it for Total and we also got the opportunity to provide our services in their Usan FPSO project. It was based on the good intention Total and NNPC had towards IESL through Hyundai Heavy

INTERVIEW Industries (HHI), the major contractor of Total for USAN FPSO fabrication, because the target that is currently a law was not stipulated then. We were able to perform 180,000 man-hours partly because it was our capacity then and partly because Total had no legal obligation to go beyond their goodwill when it was just policy guidelines as against the current situation that they can be sanctioned for evading or undermining the targets stipulated in the Act. The IOCs who gave us major projects then could have easily side-tracked us in those days. It was quite rampant then that jobs were given to service companies who share the same country of origin with the IOCs for obvious reasons. So, what we got then was a real life saver for us. The record shows compliance to Local Content to be as low as 5% then as against about 30% presently. Contracts awarded in tens of billion dollars were not spent locally up to half a billion, so for IESL to be part of that 5%, it is not something we take for granted. You are here in Cape Town for Africa Oil Week 2018 as an industry expert, whatâ&#x20AC;&#x2122;s your advice to other African countries regarding the implementation of their own Local Content policies, what can they learn from your Nigerian experience and how do you think they should go about implementing their policies in such a way that their national companies can thrive? I will suggest that other countries use what they can learn from Nigeria, although without saying this, many of them out of their own volition are already sending delegations to examine or understand what is happening in Nigeria. I have had the opportunity to make presentations in three African countries where I highlighted how Nigerian Content policy makers have been able to develop our Local Content policy and monitor its implementation in such a way that companies like IESL can now compete well with our foreign counterparts. Subsequently, doors were opened to us based on that unique African expertise, we bring to the table with our quality services and because we have a better understanding of Africarelated challenges in doing business than those outside the region. We used that opportunity to train nationals and build

their capacity. Having said that, I need to sound a word of caution here about Local Content policy implementation. It depends largely on the level of current activities in each Oil and Gas industry per country. Those who are just exploring oil and gas will have a certain level of Local Content implementation (like Namibia) different from those that are actually producing (like Ghana). The success story in Nigeria was largely dictated by the maturity of the Oil and Gas Industry in Nigeria; so for many countries in the region with a growing Oil and Gas industry, it is necessary that they have their own development time-line unique to their needs and stage of development. Do you have concerns about what technology and digital disruptions can do to the progress IESL has made so far? Is IESL prepared enough for the new ways of service delivery in this digital age? IESL is adapting to new technologies; we are doing some things only foreign companies were able to do before. In the past, GE, Halliburton and Schlumberger were the big names when it comes to developing technologies, they have

strong Research and Development (R&D) programmes and each year they showcase their recent innovations in various Oil shows, but since we are operating in the same space through our Local Content policy, we have taken a cue from them to gain from their developed technologies. We seek to improve on their technology by pushing the frontier of their innovations further; we look for ways to make their technology more applicable to our own environment. What I would like to see is a situation where NNPC makes strong provision for R&D on behalf of Nigerian oil and gas industry, and the indigenous companies key in on the programmes in a collaborative way with a synergy. We canâ&#x20AC;&#x2122;t expect Total, ExonMobil, Shell or Chevron to champion this for us. On the other hand, indigenous companies can collaborate to set up their own R&D, knowing fully well that we canâ&#x20AC;&#x2122;t retain our vantage position if the International Oil and Gas community has developed their technological approach of doing business to the point where we are no longer a cheaper option for their operations in the face of declining oil prices.

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Oil&GAS

Regulatory uncertainty stalling Nigerian oil reserve, industry growth – NAPE Peace Obi

he lack of clear policy framework which has stalled many investment decisions in the passing year will continue to be a major challenge to the development of the Nigerian oil and gas industry as well as the attainment of the 40 million barrels oil reserve by 2020, the President of NAPE, Dr. Andrew Ejayeriese has said. Speaking during the 36th edition of the Nigerian Association of Petroleum Explorationists (NAPE) conference in Lagos recently, Ejayeriese said that absence of right reforms has led to the regulatory uncertainty in the industry and will continue to make Nigerian oil and gas industry uncompetitive and unattractive to investors. He said, “Having favourable operational policies is an important ingredient that attracts investors and creates the enabling

business environment for any country. A good demonstration is Mexico, where new operators have successfully bided for acreage and established their presence due to the country’s energy reform.” Ejayeriese disclosed that companies like China’s Offshore Oil Corporation, Australia BHP Billiton, France’s Total, American’s Chevron and ExxonMobil as well as Japan’s Inpex took advantage of the reforms. Adding that “a lot more of our indigenous and foreign firms will emerge and grow bigger with the right petroleum reform policy in place.” “All of us may have heard of the non-accent to the Nigerian PIGB, the governing segment of the long-awaited petroleum industry bill. It is important to state that the current state of the Nigerian oil and gas industry will likely remain the way it is for a long time to come unless there are reforms that will make it globally com-

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petitive and in line with current business practices in addition to taking advantage of the advances in technology,” he said. Ejayeriese warned that Nigeria’s dream of increasing her oil reserve base will remain a mirage without the right policy reform in place. He remarked, “One thing is certain, the world will not wait for us! Oil companies that have refused to go into exploration in Nigeria are doing same elsewhere because the investment climate is conducive in such regions. Businesses will rather take their funds to places where returns on investment, security, and infrastructure are guaranteed. “All these obstacles pose a threat to the realization of the 40 million barrels oil reserve target by 2020. If Ghana could get its oil reform laws sorted out in 18 months, why should ours drag for over 18 years without a headway.

COVER

Petroleum industry digitalisation:

Is Nigeria doing enough? Godspower Ike and Peace Obi

Technology, as it is said, is changing the world and the way we perceive things. It is gradually taking over almost every aspect of our lives, impacting us in many more ways than imagined. Also, the global petroleum industry is going through immense transformation and digitalisation plays a major role in this. This article seeks to explore global trends in digitalization and how prepared the Nigerian petroleum industry is to adopt this innovation.

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COVER

The world is witnessing tremendous advancement in innovative technologies, and this is permeating all aspects of human endeavours and changing the way humans live and work. Specifically, the global petroleum industry is rapidly changing as it grapples with the emergence of alternative technologies for production and other processes, even as countries and oil companies are struggling to catch up with these technological advancements. Data are growing at an exponential rate, and over the past five years, internet traffic had tripled and around 90 per cent of the data in the world today were created over the past two years.

Digitalisation, more than IT

Digitalisation is a scalable application of digital technologies that have a far greater outcome-oriented result. Its adoption, application and usefulness align with the organisational capabilities. In the same vein, research also showed that “digitalisation leaders can access as much as 800 per cent higher human productivity in operations, compared to industry laggards”. Although finding is said to be in its infancy, digitalisation is clearly already having a massive impact on industries, particularly in the

oil and gas industry. The potential business impact has indeed been transformational. This exponential growth has led to the use of increasingly large units of measurement, for instance, global annual internet traffic surpassed the exabyte threshold in 2001 and is expected to pass the zettabyte threshold by 2017. Reports have it that everyday objects such as watches, home appliances, and cars are being connected to communications networks – the ‘Internet of Things’ (IoT) – to provide a range of services and applications, such as personal healthcare, smart electricity grids, surveillance, home automation, and intelligent transport. The number of connected IoT devices, it was stated, was forecast to grow from 8.4 billion in 2017 to over 20 billion by 2020. International Energy Agency (IEA) had in a recent report titled, ‘Digitalisation: A new era in energy?’, stated that the impact of these tremendous digital advances and their rapid deployment across the energy landscape raise the fundamental question of whether the world is on the cusp of a new digital era in energy.

It Promises a more Efficient System IEA noted that over the coming dec-

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ades, digital technologies are set to make energy systems around the world more connected, intelligent, efficient, reliable and sustainable. According to the report, stunning advances in data, analytics, and connectivity are enabling a range of new digital applications such as smart appliances, shared mobility, and 3D printing. The IEA stated that digitalised energy systems in the future may be able to identify who needs energy and deliver it at the right time, in the right place and at the lowest cost, adding, however, that getting everything right will not be easy. It said, “Digitalisation is already improving the safety, productivity, accessibility, and sustainability of energy systems. But digitalisation is also raising new security and privacy risks. It is also changing markets, businesses, and employment. New business models are emerging, while some century-old models may be on their way out. “Policymakers, business executives and other stakeholders increasingly face new and complex decisions, often with incomplete or imperfect information. Adding to this challenge is the extremely dynamic nature of energy systems, which are often built on large, long-lived physical

COVER infrastructure and assets.” The IEA confirmed that the energy sector had been an early adopter of digital technologies, adding that in the 1970s, power utilities were digital pioneers, using emerging technologies to facilitate grid management and operation. It said oil and gas companies have long used digital technologies to improve decision making for exploration and production assets, including reservoirs and pipelines. It also postulated that the industrial sector had used process controls and automation for decades, particularly in heavy industry, to maximise quality and yields while minimising energy use. In addition, IEA noted that intelligent transport systems are using digital technologies in all modes of transport to improve safety, reliability and efficiency.

Investment in Digitalisation Continues to Soar

The IEA said, “The pace of digitalisation in energy is increasing. Investment in digital technologies by energy companies has risen sharply over the last few years. For example, global investment in digital electricity infrastructure and software has grown by over 20 per cent annually since 2014, reaching $47 billion in 2016. “This digital investment in 2016 was almost 40% higher than investment in gasfired power generation worldwide ($34 billion) and almost equal to total investment in India’s electricity sector ($55 billion).” The IEA further noted that the oil and gas sector has a relatively long history with digital technologies, notably in upstream, and significant potential remains for digitalisation to enhance its operations. It stated that further digitalisation in the upstream oil and gas industry in the future is likely to initially focus on expanding and refining the range of existing digital applications already in use. The report said, “For example, miniaturised sensors and fibre optic sensors in the production system could be used to boost production or increase the overall recovery of oil and gas from a reservoir. Other examples are the use of automated drilling rigs and robots to inspect and repair subsea infrastructure and to monitor transmission pipelines and tanks. Drones could also be used to inspect pipelines (which are often

Mr Henry Ikem-Obih Group Executive Director, Downstream, (NNPC) spread over extended areas) and hard-toreach equipment such as flare stacks and remote, unmanned offshore facilities. “In the longer term, the potential exists to improve the analysis and processing speed of data, such as the large, unstructured datasets generated by seismic studies. The oil and gas industry will furthermore see more wearables, robotics, and the application of artificial intelligence in their operations. “Widespread use of digital technologies could decrease production costs between 10 and 20 per cent, including through advanced processing of seismic data, the use of sensors, and enhanced reservoir modelling. Technically recoverable oil and gas resources could be boosted by around 5% globally, with the greatest gains expected in shale gas.”

Digitalisation to Activate a more Automated Operating Environment

Furthermore, the World Refinery Association (WRA) in a recent report also noted that since refineries, petrochemical plants, and other downstream facilities are complex installations, linking processing units with sophisticated digital technologies demand a clear plan that would prioritise clear business objectives. The report also stressed the need for organisations to achieve knowledge management for business processes so that implemented databases could be easily maintained. This, it said, would allow for a long-lasting framework to be built-in with properly designed, user-friendly access, chemical process optimisation via loop-turning and

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COVER

yield optimisation, monitoring of equipment and unit conditions for predictive maintenance, training applications for operators and engineers, as worker safety is key for industrial automation. According to the WRA report, the digitalisation of processes will translate into a more automated operating environment, and workforce adjustment. However, most of these developments remain vague in the Nigerian petroleum industry, as only a few aspects of the industry had enjoyed digitalisation.

Responses from the Nigerian Business Environment

Specifically, the Nigerian Liquefied Natural Gas (NLNG) has automated a

significant portion of its operations, as well as the Nigerian Gas Marketing Company and other oil and gas companies. Though a few companies have gone digital in some areas of their operations, a majority of the companies operating in the industry are yet to embrace innovative technologies. This, analysts, have posited, maybe as a result of issues bordering on funding, job security, level of human capacity development and the educational standards of the country.

How ready are we?

Despite the obvious influence and impact of the fast-paced technological advancement on different sectors and human activities, not many are ready to

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face the reality of digitalization. Presently, many indigenous companies are yet to develop their capacity in terms of man and machine to match the current industry demand. It was also discovered that some employees and even labour unions are reluctant in embracing the trend for fear of job losses. Painfully, the nationâ&#x20AC;&#x2122;s education system faced with such problems as insufficient funding, poor infrastructure, obsolete curricular, poor quality of teachers among others, has not sufficiently positioned itself as an avenue to teach and equip its products with tomorrowâ&#x20AC;&#x2122;s skills, thereby affecting the level of human capacity development in the country. Speaking on the issue during the 2018

COVER robotics is a world challenge. It is not just a Nigerian challenge or an African challenge; it’s a global challenge itself. “Today people are talking about driverless cars. You can imagine that in the next 10 years if all the taxis and the Uber that you will call to pick you up have no drivers. What will happen to all those people, what else can those drivers do? That is where the education sector comes in; its role is critical in human capital development. “The other day, I was telling a group of people that a typical FPSO is manned by BOP and it is usually by 150 people on FPSO. So, in the next 10 years, there will be nobody on board, it will all be robotics. So, it is a global challenge and I think what’s important for us as African countries particularly in Nigeria is, to first, recognize that this is where technology is going and begin to look at our curriculum in the universities, begin to look at some of the technologies that have been developed, begin to look at the future because the problem with Africa is that we always do catch up. It is important that African countries and her policymakers to always look beyond the five years horizon but look at 25 years horizon in terms of where economies in terms of technology are going, Wabote said.

Africa Oil Week in South Africa, the Executive Secretary, Nigerian Content Development and Monitoring Board (NCDMB), Engr. Simbi Wabote told OER that Nigeria was not alone in the digitalisation challenge. The NCDMB boss said that the nation’s education sector should be a purveyor of improved knowledge and skills needed to keep Nigeria and her citizens relevant in the scheme of things, globally. According to him, Nigeria’s response to global trends such as digitalization, internet of things, robotics, should result in an improved curriculum that will offer training and skills relevant in the digital age. “I think the Internet of Things and

The Group Executive Director, Downstream, Nigerian National Petroleum Corporation (NNPC) Mr Henry IkemObih, noted that the Nigerian oil and gas sector had faced tough challenges since 2015, stating that these challenges had brought to fore the need for the industry to undergo an urgent technological transformation. Obih said, “The nation is currently at a turning point where the required urgency for repositioning the oil and gas sector is more critical than ever. Today, technology is playing a key role in the growth of the global oil and gas industry.

Advance Technology behind US oil Production Surge

“The United States oil production has surged to an all-time high of 10 million barrels per day. This achievement was due to technological advancements and digitalisation. The ongoing reforms in the

NNPC represent new dawn. They will provide huge investment opportunities and infrastructure development across the oil and gas value chain.” Obih said the integration of technology into the oil and gas sector would lead to significant improvements in planning, monitoring activities such as predictive maintenance and operation optimisation. According to him, as more oil and gas industries integrate, this would enable the field workers to optimise its monitoring and production.” Declaring NNPC commitment to digitalisation and improved technology, Obih said, “It will also enable us to increase oil production from our new matured and marginal fields, expand our frontiers and improve our local refinery capacities. It will assist our target to increase our crude oil reserves by one billion barrels year-onyear from the current 37 billion barrels to 40 billion barrels by 2020.” For Onyeche Tifase, the Chief Executive Officer, Siemens Nigeria, oil and gas operators in Nigeria should be early adopters of technology. According to the CEO, employees of oil and gas companies should be proactively trained in the application of the new technology, while the industry should be supported by an original equipment manufacturer (OEM) with proven global experience across the entire upstream, midstream and downstream value chain.

A catalyst for Industrialisation and Economic Growth

Tifase noted that by embracing a digital revolution in its oil and gas facilities, Nigeria could propel itself from the shadows of persistent underperformance to become a global energy powerhouse, adding that this would be a catalyst for industrialisation and growth in many other economic sectors. Digitalisation in the energy sector, according to her, involves the use of data to manage and control multiple operations. “It drives efficiencies in energy management and automation systems. Importantly, workers in a digital industrial environment enjoy a massive increase in skills and productivity. “Digital development is not confined to new oil and gas facilities. Existing oil and

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COVER gas infrastructure, from the pipeline to the refinery, can easily be upgraded to digital automation. This means that Nigeria’s ageing oil refineries in Port Harcourt, Warri and Kaduna can be optimised with digitalisation. “These facilities were built as early as 1978 but could be made far more efficient and productive, thereby significantly reducing Nigeria’s dependency on imported petroleum products. The benefits of this investment would be measured in billions of dollars.”

Gains rather than losses

Similarly, digitalization when rightly adopted has been noted to “create revenue, improves business performance (not just process), and solves problems that could not be solved before, empowers personnel and makes them more effective. It builds a culture with digital information at the core.” According to Tifase, effective integration of digital technologies could reduce capital expenditure in the oil and gas sector by up to 20 per cent, cut upstream operating costs by up to five per cent and downstream costs by up to 2.5 per cent. She noted that Nigeria’s best approach would be a combination of local skills and knowledge, and the expertise and experience of a proven international partner able to deliver digital technologies and automation, together with traditional instrumentation and controls, across the entire energy value chain. This, she said, further supports the backward integration of skills and technical competence in Nigeria’s limited skilled workforce. She said, “With 37.2 billion barrels of proven oil reserves, Nigeria could easily meet this demand locally through modernisation and continued exploration. The country’s refining capabilities are currently underperforming and notoriously inefficient, due to lack of maintenance and underinvestment in technology. “Nigeria also struggles with ongoing vandalism of its oil and gas infrastructure. Pipeline insecurity has a devastating effect on oil production, with a staggering financial impact. Technology is a significant part of the solution to this challenge, as it enables real-time monitoring of infrastruc-

ture and quicker incident responses. “To boost productivity and returns, Nigeria’s energy operators should rapidly adopt and integrate digital technology that improves efficiencies and upskills staff.” She noted that digital technology, instead of being a threat to the workforce, should redefine the role of the worker, adding that it has the potential to bridge the blue and white-collar worker, to create what is termed the ‘grey-collar’ worker.

No Competition between Man and Machine

She argued that humans and machines are, therefore, not competing for jobs, but working together to create a new type of talent, which is a vital component of sustained sector growth and maturity. Tifase said, “In the near future, Nigeria’s oil and gas operations will have real-time access to data at the click of a button, from any location on earth. This essentially connects a team of global experts collaborating in real-time to drive improvements in exploration and extraction, health & safety, pipeline security, distribution, refining and transportation of the finished products. “And with a potential $300 billion added to the African economy by 2026 through the adoption of digitalisation, Africa’s largest economy will receive a significant portion of that figure to advance its burgeoning oil and gas market. “This, in turn, addresses the triple threat of unemployment, inequality and poverty – paving the way for a society where business success leads to socioeconomic advancements, such as new business development and job creation, and essential new infrastructure projects that include schools, hospitals, transportation networks and housing.”

Way Out

To make this a reality, Tifase said the Federal Government of Nigeria should include a robust digitalization policy and support legislation in connection to its Economic and Recovery Growth Plan 2017-2020 (ERGP), which sets out the medium-term structural reforms to restore economic growth, invest in people and build a globally competitive economy. She insisted that one of the key priorities

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of the Federal Government, which is to ensure power and petroleum product efficiency, can only be achieved through a digital transition in the oil and gas sector. Furthermore, while we still struggle with these innovations, newer technologies are coming to the fore, such as predictive analytics, which analysts said would have an impact on asset maintenance – human and equipment. Nial McCollam, Chief Technology Officer of Lloyd Register (LR) said, “Foreseeing and preventing events that lead to injury, loss of life or environmental damage is a key part of predictive analytics – and even more so in driving efficiencies and enhancing performance. “The ability to predict erosion and lifespan of equipment such as drills, pumps and other rig equipment promises considerable savings. And we are also seeing companies begin to experiment with predictive analytics in behavioural modelling to help identify symptoms of unsafe human behaviour, and predicting when certain behaviour traits are likely to create high-risk situations. “Along with our clients and partners, we believe that the use of predictive analytics can lead to both improved performance and enhanced safety and better risk management. Encouragingly, the findings of this special edition of the LR Technology Radar show that this potential is beginning to convert into reality.” McCollam added that “Distilling these lessons can only help oil and gas companies to adapt using cases perfected elsewhere, and inspire us to develop innovative ones of our own. However, the report also highlights that governments, regulators and industry leaders have a critical part to play by fostering environments in which oil and gas companies can share data with confidence, and without fear that the data that is shared will be turned against them from an environmental performance or safety perspective.” While Nigeria struggles to play catchup, energy and technology experts are unanimous in their views that policy and market design are vital to steering digitally enhanced energy systems onto an efficient, secure, accessible and sustainable path.

MARITIME NEWS

DP World introduces intelligent container storage system

P World is introducing a world’s first intelligent high bay container storing system touted as the disruptive technology that will radically improve operations. DP World and industrial engineering specialist SMS Group have formed a joint venture to roll out the new and intelligent storing system, which will be applied for the first time at Jebel Ali Terminal 4. The High Bay Storage system was originally developed by SMS Group subsidiary AMOVA for round the clock handling of metal coils that weigh as much as 50 tonnes each in racks as high as 50 metres. Instead of stacking containers directly on top of each other, which has been global standard practice for decades, the new system places each container in an individual rack compartment. Containers are stored in an 11-storey rack, creating 200% more capacity than a conventional container terminal, or creating the same capacity in less than a third of the space. The rack’s design means that each container can be accessed without having to move another one, enabling 100% utilisation in a terminal yard. DP World said the system brings huge gains in speed, energy efficiency, better safety and a major reduction in costs. Costs are further cut by the ability to shorten the time taken to load and unload mega-ships by as much as 30%. Sultan Ahmed Bin Sulayem, DP World group chairman and ceo, said: “DP World’s experience and expertise in moving cargo coupled with the technology of AMOVA will ensure the system is remarkably efficient and relevant for present and future

operations.” Dr. Mathias Dobner, ceo of the joint venture, commented: “This new container handling technology allows cities to use their expensive and sensitive land and waterfront areas more effectively. Our system will significantly increase the productivity of handling ships on the quay. This means that quay walls can be shortened by a third. This disruptive innovation will greatly improve the financial performance of container ports, and well as their overall appearance.”

The rack’s design means that each container can be accessed without having to move another one, enabling 100% utilisation in a terminal yard.

Culled from Seatrade

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NLNG at 34 with astonishing milestone

y May 17, this year, the only existing Incorporated Joint Venture Company in Nigeria, the NLNG would have attained the age of 34 years, having been incorporated in 1985. This means that the NLNG is now of age and impacting highly positively and impressively on its local community, Finima in Rivers State and the entire national economy. Finima in Bonny Island is aptly described as the largest single business site in the whole of Africa. Its parent company, the Nigerian National Petroleum Corporation NNPC was itself incorporated in November 1977. This is a company that most people know very little about and has been facing

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wild abuses and distractions instead of genuine political support. Undoubtedly, it is the most efficient and rewarding business establishment in Nigeria. To drive home this point which some would describe as bizarre, why was Train Seven of the project delayed for several years in spite of the fact that it was planned to increase the size of the total NLNG project by 30 per cent and by extension increase the capacity and benefits of the existence of the NLNG to the Nigerian economy. Some would argue that the issues surrounding the setting up the Brass LNG Limited and later Olokola LNG, were part of the problem but why were the proposals

OIL&GAS

“Through each Nigerian Content plan for its contracts, NLNG has promoted the development and employment of Nigerian manpower.

eventually or purportedly abandoned after the huge dollar investments? If the NLNG were wholeheartedly and consistently supported from the start, gas flaring would have by now been completely eliminated and there would have been more tangible achievements that would have helped to influence genuine quality job creation and also help to excite the entire Nigerian business environment and even influence the desired economic expansion. The alleged disappearance of both incorporated joint venture companies does not in any way diminish the importance or relevance of incorporated joint venture

or equity joint venture. It is according to a source, a type of joint venture where the participants or Joint Venturers arrange for the incorporation of a separate legal entity to pursue an agreed business. The NLNG has more than proven that incorporated joint venture works especially when it’s managed by a good team who strongly believe in good corporate governance as exemplified by the experience of NLNG. The Nigerian National Petroleum Corporation NNPC owns 49 per cent of the NLNG. The other shareholders are Shell Gas BV 25.6 per cent, Total Gaz Electricite Holdings 15 per cent and ENI Internation-

al 10.4 per cent. According to the information provided by the NLNG facts and figures, “Payment to Joint Venture (JV) feedgas suppliers from inception till date stands at about USD24 billion. And 55-60 per cent of such payment goes to the Federal Government of Nigeria via its shareholding in Nigerian National Petroleum Corporation. “NLNG has also over the years paid dividends of over USD33 billion, out of which 49 per cent went to the FGN courtesy of its shareholding in the company, again via NNPC. “As a good corporate citizen, NLNG also contributes to national wealth and the economic well-being of states in which it operates, by paying all applicable taxes and tariffs. “In 2017, the company’s corporate income tax paid to the Federal Government of Nigeria amounted to about USD606 million, almost twice of what was paid last year. On Foreign Direct Investment (FDI), with its plant construction, the NLNG generated considerable FDI for the country. The project today has assets (i.e. property, plant and equipment) worth about USD15.4 billion at cost, financed mainly by NLNG shareholders, with 51 per cent stake by international oil companies and 49 per cent belonging to the country through the NNPC. On gross Domestic Product (GDP), the company, since 2008, contributed about four per cent of Nigeria’s annual Gross Domestic Product (GDP). With rebasing of the GDP, NLNG’s contribution to the GDP was put at about one per cent. On Environmental Hazard Reduction, NLNG has converted about 168Bcm (billion standard cubic metres) or 5.96Tcf (trillion cubic feet) of Associated Gas (AG) to exports as LNG and Natural Gas Liquids (NGLs), thus helping to reduce gas flaring by upstream companies. “Flares are only permitted to eliminate waste and gases which cannot be converted for any further use. “Flares also act as safety systems for non-waste gas and are released via safety pressure relief valves”. On the issue of Job Creation, NLNG Facts and Figures stated that NLNG provided more than 12,000 jobs each construction year. Overall, the major sub-contractors employed over 18,000 Nigerians in technical jobs in the Base Project.

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“Through the Nigerian Content plan for its contracts, NLNG has promoted the development and employment of Nigerian manpower. “For instance, over 700 Nigerians have been trained in Nigeria and at the contractors’ (Hyundai and Samsung) shipyards in South Korea as part of Nigerian Content deliverables tied to the purchase of six new LNG vessels by Bonny Gas Transport (BGT), a subsidiary of NLNG. “Those 700 Nigerians, with enhanced skills in welding, hull assembly, pipe fitting, electrical, mechanical, painting and ship design joined the country’s workforce, providing a support base for technology transfer and industrialisation. At the shipyards in South Korea, over 35 of the Nigerian trainees participated in the ship construction while six other Nigerians worked as ship managers— two Production Managers, two QA/QC Managers and two HSE Managers. Local Content Development in NLNG supports the development of community and Nigerian contractors to enable them to achieve standards of excellence. “In our host community, through the initiative to empower local contractors via the Finima Legacy Project, indigenous contractors have made capital investments in their companies thereby expanding their operating capacity. The capabilities of local vendors have also been developed through mentoring and partnerships be-

tween more established Nigerian vendors and community vendors.” NLNG also promotes the acquisition of vocational skills through funding of Bonny Vocational Centre (BVC). BVC is a Social Development Initiative (SDI), established in 2004 by Nigeria LNG Ltd in partnership with the Bonny Kingdom. The Centre was established to meet the manpower requirements of operating companies on Bonny Island, promote the acquisition of vocational and entrepreneurial skills and development of technical competences and self-reliance in youths of Bonny Kingdom, Rivers State, and Nigeria in general. “The Centre offers vocational and related qualifications in areas such as Building Construction, Business Support, Carpentry and Joinery, Catering and Hospitality, Electrical Installation, Fabrication and Welding, ICT System Support, Leadership and Team Skills, Mechanical Plant Maintenance, Plumbing and Pipe-fitting, Refrigeration and Air-Conditioning, Scaffolding, and Training Skills. “BVC is approved and accredited by relevant agencies and awarding bodies such as the Rivers State Ministry of Education, National Board for Technical Education (NBTE), City and Guilds of London Institute, the Institute of Leadership and Management London, and the Federal Ministry of Labour and Productivity.

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On the issue of Vendor Finance Scheme, “NLNG recognises the fact that funding is the bane of the Nigerian manufacturing industry. This led, in 2013, to the introduction of the USD1 billion NLNG Local Vendors Finance Scheme (NLVFS) which was increased to USD1.2 billion in June 2017 with the introduction of an additional participating bank to the scheme making a total of six participating banks. “The scheme facilitates access to funds from participating banks to NLNG-registered vendors (suppliers of goods or contractors of services). Under the scheme, vendors are able to get fairer financing terms, which were secured using the leverage of NLNG’s relationships with the banks. This way, vendors get speedy access to finance for their contracts, or procurement orders, at competitive rates. Over N1.563 billion and USD21 million have been disbursed to NLNG vendors as at September 2017. It is possible that no other company in Nigeria drives the concept of Local content as much as the NLNG. This is one of the reasons why the company needs all the support it can get, especially now that the country is down to only Bonny NLNG with the Brass LNG and Olokola LNG completely out of the way. Stanley Egbochuku

OIL&GAS

Nigeria: Managing knock-on effect of rising oil prices

oo low is bad, too high is bad. That best describes the nature of oil prices. Yet the world has no choice but to live with oil price fluctuations and their impacts. Factors such as OPEC production curbs, US tight oil production from shale and geopolitical issues, for instance, the US curtailment of Iranian exports, have variously affected the supply of oil and price levels. Oil prices (Brent) have been over $75/ bbl since mid-August and over $80/bbl since late-September. These are the highest levels reached in the last four years, post-downturn. Oil prices barely crossed $60/bbl on New Year Day 2018. To put trend in perspective, at the outset of the down turn, oil prices were as low as $27/ bbl in January 2016 and did not cross $50/ bbl until 2017. Oil-dependent economies such as Nigeria were not only vulnerable but hardly hit during the period of downturn. The country suffered prolonged recession and it is only now struggling to get out of it, which was worsened by acute cut in oil production, caused by disruptions created by Niger Delta militants. Economic growth has been slow and sluggish. Its local currency got a battering, sharply losing 45 per cent of its 2015 value. Now that oil prices are moving to higher altitudes, will Nigeria fare much better? If history is anything to go by, the answer is: Not necessarily. The four-yearly electoral cycle, the gross and pervasive indiscipline and the blatant refusal of Nigeria to wean itself out of over-dependence on oil by properly diversifying its economy, all mean same of the same trend. Were the overall discipline associated with low oil prices sustained when prices are up, individuals, firms and the country would fare better. Reaching higher altitudes Unfortunately, that is not the case. For

Nigeria, once oil prices rise above $65/ bbl and the naira exchanges above 280 to a US dollar rate, a petroleum product “subsidy” emerges downstream. With so much politics in the air, Nigeria currently lacks the will to install a truly sustainable self-adjusting pricing mechanism, as is the case elsewhere. Some may argue though that the ‘subsidy’ can be financed from the

“excess crude account,” where the extra-budgetary oil proceeds are swept into. That mechanism has historically proved grossly imperfect in its running. NNPC naturally becomes the “whipping boy,” when all fails, permanently stands accused by angry state governors. From a global-economy perspective, oil prices above $65/bbl simply help US tight oil and shale gas producers. While the OPEC and Russian collaboration has helped firm oil prices, there are doubts as to how long it will work. The current prices have meanwhile defied all expectations. For Nigeria, it will “kill the economy softly,” at a time political expediency inevitably prevails.

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OIL&GAS

O t

Three modular refineries to begin operations in 2019 - Kachikwu

t s o m t b t p f g u t a

he Minister of State for Petroleum Resources, Dr. Ibe Kachikwu has said there are strong indications that three modular refineries, out of 40 licenses issued, will likely come on stream by end of 2019. Kachikwu disclosed this at the 3-days Biennial International Conference for Health, Safety, and Environment, HSE organised by Department of Petroleum Resources, DPR in Lagos on Monday told participants that “out of the 40 private licenses issued to private investors to build refineries, only 10 have shown signs of progression. “Out of the 40 licenses issued, only 10 have shown progress by submitting their programmes and putting something on the ground”. “By end of 2019, we are assured that three private modular refineries would come on stream,’’ he said. The minister said that the conference is a renowned and highly-professional forum for pooling ideas and research findings for the incubation of enduring and game-changing oil and gas policy initiatives. “Perhaps this edition of the conference could not have come at a better time, first to allay the popular fear that the days of oil and gas as an international commodity and energy source are over. “And secondly, to stimulate new ideas on sustainable ways of developing this re-

source in a manner that will both prolong its acceptability as an energy source and also help the nation reap optimal benefits,” he said.

According to Kachikwu, environmental sustainability is a key component of the Seven Big Wins initiative of the President Muhammadu Buhari Administration for

f o w

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OIL&GAS the oil and gas Industry. He said with the continuous inflow of statistics from the DPR highlighting the gory state of affairs on gas flaring and the failure of previous efforts to end the menace, the ministry had to come up with new initiatives to truly incentivise the flare-out policy by creating the new National Gas Policy. The policy he said, is aimed at ensuring that all currently flared gas, including those previously considered as non-technically feasible and non-commercially viable, is gathered and utilised for various economic utilities that are financially rewarding to the producers, adding that the collectors and interested investors can then convert it

convert more gas to LNG through new and existing investors to retain Nigeria in its currently threatened fourth position as an LNG exporter. “Our push for the increased investments in modular and conventional refineries is not only targeted at helping the nation benefit from its resources by providing products to the entire West African sub-region. “But also essentially to stop the scourge of local unconventional artisanal refineries that have led to massive oil spills that have been hard to manage for nearly a whole decade. “ And, indeed, if anyone has new innovative ideas for improving the science of

“Out of the 40 licenses issued, only 10 have shown progress by submitting their programmes and putting something on the ground”. “By end of 2019, we are assured that three private modular refineries would come on stream,’’

for power generation, petrochemicals, and other beneficial uses. “ Aggressive efforts are being made within the ambits of HSE sustainability to

local refining initiatives, the DPR has been directed to listen to same, improve and license it, perhaps we may end up developing local technologies that can be exported,

provided the HSE content meets acceptable international standard ,’’ he added. Meanwhile, the Director of Department of Petroleum Resources, DPR, Mr. Modeccai Ladan, urged stakeholders to galvanise efforts at maximising Nigeria’s production and minimise wastage. Ladan explained that the oil and gas industry seems to be under a new threat, which is the renewed dislike and global war against fossil fuels and the quest for renewable and cleaner energy, purely for environmental considerations, chief among which is the concern about global warming. According to him, “Over the years, the threat against fossil fuels had always been on paper, but today, it is more real than ever, based on some clear evidence I like to draw our attention to. “Three among the biggest technology companies have made attempts at electric cars to replace gasoline and diesel engines. “While the attempt of Apple may not have made it to production yet and that of Google was suspended after clearly successful street trials that of Tesla actually took the world by surprise. “Not only did the first two releases of Tesla outsell sales forecasts, but they were also actually oversubscribed, and the demand keeps rising while new models are being added,’’ he said. Ladan said; “As we speak, some of the big International Oil Companies (IOCs) here seated are funding gigantic researches into alternative fuels, which include the use of cheap, common algae. “ As sweet as Nigeria’s crudes are renowned to be globally, we have recently lost our most valued customers and our gas buyers are themselves now competing with us in the same market space as suppliers. “Ladies and gentlemen, all of these points to one fact, namely, if Nigeria is to continue to benefit from its vast petroleum resources, now than ever is the time to build sustainability into its prospecting, drilling, production, transportation, and usage. “As well as management of its wastes. And this task rests on the shoulders of not only the DPR but all stakeholders. “Little wonder then that we have chosen a befitting theme for this current edition of the conference, which is: “Driving Sustainability in the Oil and Gas Industry through Improved Stakeholders’ Environmental Stewardship,” he added.

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GHANAREPORT

Licence round prequalified companies to be announced on 21 January Gilbert Borketey Boyeﬁo

Evaluation of Expression of Interest

hana’s Minister for Energy, Mr Peter Amewu, has announced that a team is currently evaluating the pre-qualification applications of the licencing round and by the end of this month (January), the list of pre-qualified companies will be published. Simultaneously, the pre-qualified companies will be invited to submit bids for the blocks for which they have been pre-qualified. Prospective bidders submitted their applications on the 20th of December, 2018. Announcement of pre-qualified applicants and publication of invitation of prequalified applicants to tender will be on the 21st January, 2019 and deadline for the submission of bids will be on 21st May, 2019. The blocks are expected to be awarded to successful bidders in August 2019.

expertise to exploit the oil and gas resource of Ghana.

Objective of the Licensing Round

Current Status

In line with government’s policy to deepen transparency in the management of Ghana’s petroleum resources and also to give practical meaning to Section 10 of the new Petroleum (Exploration and Production) Act, 2016 Act 919, the Ministry of Energy inaugurated the Licensing Round Bid Evaluation and Negotiation (LRBEN) Committee for the first ever oil and gas licensing round for six Offshore Oil Blocks in Cape Three Points in the Western Region. Subsequently, His Excellency, the President, Nana AddoDankwaAkufo-Addo, launched the 1st Oil and Gas Licensing Round on October 15, 2018. The new process aims at ensuring transparency, value for money and getting companies with the requisite financial and technical

Peter Amewu, Ghana’s Minister for Energy

The Licensing Round Bid Evaluation and Negotiation (LRBEN) Committee sent out invitations for expression of interest and pre-qualification in October 2018 for five blocks (Blocks 2, 3, 4, 5 and 6) - three blocks on tender and two for direct negotiation. The first block is reserved for GNPC (Block 1).

Local Content Benefits

For each winning bid, there shall be a 5% equity participation expected of Indigenous Ghanaian Companies in each Petroleum Agreement (PA). The minister therefore urged indigenous Ghanaian companies to prepare adequately to take advantage of this opportunity.

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On the 21st of December 2018, the applications were opened by the Honourable Deputy Minister for Energy in charge of Petroleum in the presence of some staff of the Ministry, the Petroleum Commission and the Ghana Oil and Gas for Inclusive Growth (GOGIG). In summary, sixty (60) applications were received from sixteen (16) companies.58 applications were valid. Out of this 74% (43) were interested in competitive bidding and 26% (15) were for Direct Negotiation. Two (2) other applications for Block 1 were invalidated. This was because the block has been reserved for the Ghana National Petroleum Corporation (GNPC). However, the two companies that have expressed interest in Block 1 may have to hold discussions with GNPC for possible partnership opportunities. The companies that expressed interest and submitted pre-qualification applications are: Exxon Mobile, British Petroleum (BP), Tullow Ghana Limited, Total, ENI Ghana, Vitol, Kosmos, Aker Energy, and China National Offshore Oil Corporation (CNOOC). The rest are Cairn Energy, Qatar Petroleum, Global Petroleum Group, First E&P, Sasol, Equinor, and Harmony Oil and Gas Corporation.

Confidence in Ghanaian Economy

According to the minister, “The interest expressed by some of the major players in the oil and gas sector worldwide in this licensing round speaks volumes about the confidence the global community reposes in our economy”.

OIL&GAS

Deep Petroleum Industry Reforms Set Angola on Path to Growth in 2019 Key measures include the formation of upstream and downstream taskforces, the privatization of some Sonangol subsidiaries, and the creation of a new regulator to manage concessions

eforms span from changes in tax law to changes in concession contracts and the opening of marginal fields to African independents. Key measures include the formation of upstream and downstream taskforces, the privatization of some Sonangol subsidiaries, and the creation of a new regulator to manage concessions. The measures are already attracting interest from investors and establishing confidence in the administration. Angola’s economy is set for recovery in 2019, in large part due to a series of regulatory reforms opening the country to new investment. Since entering office in 2017, President João Lourenço has focused on cleaning up corruption and implementing aggressive reforms to transform the oil and gas sector and the economy. The reforms, which span from deep changes in tax law to changes in concession contracts and the opening of marginal fields to African independents, have hit the books just as the oil price is stabilizing, and Angola is already attracting new interest from investors. Lourenço has made key appointments to shift the trajectory of the oil and gas sector, notably naming Diamantino Azevedo the new Minister of Mineral Resources and Petroleum. The Ministry of Mineral Resources and Petroleum quickly put together a task force comprised of both

international and domestic stakeholders, including the Ministry of Finance, the Office of the President, Sonangol, BP, Chevron, ENI, Esso, Equinor, and Total. The task force has proposed improvements in several areas, including simplifying the oil concessions management process; implementing incentives for investment in marginal fields; and creating a natural gas regulatory framework. By December 2018, several new laws have been enacted, including: • The Natural Gas Regulatory Framework, which establishes policies for the monetization of natural gas (both associated and non-associated gas) in existing and new concessions; • Incentives for investments, which vary from tax reforms to contract reforms, to encourage economic exploration and development of natural resources; • Improved terms to better allow for exploration within development areas in existing blocks. Considered one of the most important changes to Angola’s oil and gas sector, an independent regulator has been created to manage the country’s oil and gas concessions, which were previously handled by the state-owned Sonangol. The National Oil and Gas Agency is the new granter and manager of concessions in a complete restructuring of the management of Angola’s oil and gas industry. The move is

designed to improve transparency, attract new investment and increase output. The reforms have also addressed the downstream sector. The government has created a task force to focus on downstream issues, similar to the upstream task force. The task force teams will focus on what is needed to build a high conversion refinery in the Lobito municipality and a refinery in Cabinda. Eight companies have already been pre-selected for the Lobito refinery and seven selected for the Cabinda refinery. Angola currently imports about 80 per cent of its refined petroleum products. The measures appear to be working — the World Bank’s economic outlook for Angola released in December 2018 predicts GDP will grow by 1.7 per cent in 2018 and 2.2 per cent in 2019 — the first time the country will have seen positive growth since 2014. An improved investor environment is listed as a cause for the improvement. Mega oil and gas projects have achieved final investment decision since 2018, and several more are headed for FID in 2019 and 2020. A new licensing round is expected to attract new international explorers to the country, as well as promote the participation of Angola’s domestic sector by offering incentives for marginal fields. Distributed by APO Group on behalf of Africa Oil & Power conference.

ORIENT ENERGY REVIEW Vol.9 No. 01 Dec., 2018 / Jan., 2019

PHOTOGALLERY

ORIENT ENERGY REVIEW Vol.9 No. 01 Dec., 2018 / Jan., 2019

NAPE 2018

POWER NIGERIA

ORIENT ENERGY REVIEW Vol.9 No. 01 Dec., 2018 / Jan., 2019

INTERVIEW

Back your support for women inclusiveness with policy statement, Zigma CEO tells Govt Funmi Ogbue is the Chief Executive Ofﬁcer of Zigma Nigeria Limited with decades of work experience that is laced with an excellent career history of outstanding performance both as an employee and even currently as an employer of labour. In this interview with OER team on the sideline of the 2018 Practical Nigeria Content in Yenegoa, Bayelsa State, she said it is high time Nigerian government came up with a policy statement on women inclusiveness in the nation’s oil and gas industry as evidence of its commitment to give equal opportunity to all stakeholders. Excerpts:

Let’s get to know about you. My name is Funmi Ogbue, the CEO of Zigma Limited and Jake Riley Limited. I studied Sociology as my First Degree and my Second Degree is in Organisational Development and Change Management. I have worked in most parts of management. I have been in finance, in new ventures; I was leading teams of Geological & Geophysical (G&G) professionals and engineers. I have also worked in HR, in change management, and now in my business leading my team.

So, work-wise and experience wise, I have worked pretty much, doing everything that needs to be done in the setting up of a business, I roll up my sleeves and do it. That is why when I was setting up the consulting firm, it was focused on the public sector as I wanted to work at the policy level to make the government more pro-business. And within the oil and gas industry, which is my domain, I have worked from exploration through to production.

ORIENT ENERGY REVIEW Vol.9 No. 01 Dec., 2018 / Jan., 2019

Tell us more about Zigma Nigeria Limited and how it has fared as an indigenous company? Zigma Limited is an Engineering Procurement & Construction Company. We provide support for oil and gas companies by rendering EPC services, well services, as well as Pipeline and Process services. We do the EPC services by ourselves while we do the Well services & Pipeline and process services in partnership with international service companies as their alliance partners. Zigma has won a few jobs, which we have

INTERVIEW

executed successfully and we also have some ongoing. Interestingly, we are now receiving a lot of bids. We are on NIPEX, so we get bids through that. Unfortunately, we haven’t won any of the NIPEX bids because I think that one requires a lot of understanding the tricks of the trade but I just think practice makes perfect. I have got a good team, I have people who are quite experienced and they are doing very well. So for how long has Zigma been around and

can you share some of your experiences in the corporate world before coming up with Zigma? Zigma has been around since the year 2000 but I have to say that I wasn’t focused on it because I was in employment. My first job was with a company called Abacan, it was a Canadian oil company and I was their first staff in Nigeria. I helped set up their operations in Nigeria. We were sort of the pioneers of this marginal field programme, so we partnered with Alfred James Petroleum, Yinka Folawiyo Petrole-

um Company and Amni Petroleum. So, we discovered all those fields and when I look at how well Amni is doing today or the Aje field, which its production just came on 26 years after its discovery, it gives me a sense of pride. I worked with Abacan for four years and then I went on to work for Canadian Occidental Petroleum, which later became Nexen. And again, that was a new entrant into Nigeria. Their only international production operation was in Yemen prior to Nigeria, so they came to Nigeria and hired me and a team of other people to help set up their operations. I worked in most part of that business before I left. I was in new ventures, budget and planning, HR and I was very active in the industry, very active in NAPE and the NECA, OPTS meetings. After five years, I left to work with SNEPCO. At that time Shell had set up SNEPCO to be the centre of excellence within the Shell companies in Nigeria and to focus on the deep-water fields. The whole idea was that SNEPCO was supposed to be more efficient and have a different culture than the other Shell companies in Nigeria. Again, I worked for five years and resigned and joined British American Tobacco. That was the first time I was out of the industry and the reason was that my husband was transferred to Ghana and Shell’s business in Ghana then was a very small downstream office. I went back and forth trying to get a transfer but there was no template for transfer between upstream and downstream at the time. Meanwhile, I had a four months old baby. I commuted from Nigeria to Ghana for about four months. I spent the weekends in Accra and workdays in Nigeria. But after four months, I couldn’t continue; so, I resigned and got a job with British American Tobacco (BAT). -At BAT, they wanted somebody to head their HR for West African area. It was after then that I realised they wanted to do a big re-organisation with somebody who has my kind of experience. They were transforming the business massively. After I did that for a couple of years, I got transferred to Lagos. And if you remember the reason I left Shell was so I could live with my family in Accra. BAT was really an exciting company and I enjoyed the time I worked there.

ORIENT ENERGY REVIEW Vol.9 No. 01 Dec., 2018 / Jan., 2019

INTERVIEW The transformation project we embarked upon was very aggressive. It was quite an exciting time and I was looking after 13 countries. I was perhaps one of the highest female African in BAT at the time, and I enjoyed it thoroughly. But again, I had to resign because my husband got transferred to Liberia and the distance between Liberia and Lagos was much farther. While I was there, I started consulting and I worked with the UNDP. So while working for UNDP, I was attached to the President’s office. Thereafter, I have worked on a lot of public sector projects in Nigeria for about 10 years. After a while, it gets a bit tiring when you realise that it is like the search for the Holy Grail. Also, when I realised that the public sector was not going to be transformed in a long time, I decided to go back to my first love. So, I picked up Zigma. My husband and I had established Zigma many years ago. So, I went and picked it up and focused it on these services that I talked about earlier. And so far, we have won some jobs but we are not yet to the point where I can say we’ve arrived but it’s growing. So, what will it take a woman to wear the kind of cap you are wearing now because many women may be inspired by your success story in balancing both work and family life? I have to tell you, it takes a lot. When Ann Pickard was the MD of Shell, she said something I will never forget. When she was asked what it takes to be the CEO of Shell she said: “I can’t lie to you, there is nothing like work-life balance”. ‘If you are discussing work-life balance forget it, its work, work balance. She explained this by saying, “I come home at 5 or 6pm, put my child to bed, and I go back to my work and I carry on till about 10pm. So, there is nothing like oh! we want to have it all; you just can’t have it all. It’s a man’s world and if you want to succeed in a man’s world, you have to work doubly hard”. Simply put, this has been my experience. So, yes, it’s not easy! I’m up till late; in fact, the other day I started setting an alarm to go to bed and everyone thought it was a joke, like who sets an alarm to go to bed? But if I don’t set the alarm to go to bed I will be on my computer the whole time. I won’t go to sleep and then

It’s a man’s world and if you want to succeed in a man’s world, you have to work doubly hard”. Simply put, this has been my experience.

in the morning, I struggle with waking up because of tiredness. So, I have found out that, as I am getting older, for my own well being I have to start having a bedtime. But it’s exciting, it’s fun, it’s hard work. I’m trying to balance being a mum because the children don’t want to hear your excuses. Then another thing is having a partner that is supportive. Before I came here (PNC), I was in Onitsha, for a client’s father’s funeral and my husband encouraged me to go. He said, “don’t worry, take the driver, I will take our son to school and pick him up after school. So, you need to have that sort of support. Even when I contemplated cancelling the trip, he encouraged and assured me that he was going to take care of our son for the few days the driver won’t be there, which was a huge inconvenience for him because he also has a job with quite a large portfolio.

ORIENT ENERGY REVIEW Vol.9 No. 01 Dec., 2018 / Jan., 2019

Sometimes, it looks as if a good number of successful career women are either divorced or single mothers, what is your view and how can women be encouraged to remain in a good relationship especially for the sake of the children? For us, it’s been the fundamental thing, when you look at your children and you’re not successful there, you can’t say you’re successful at work, it really counts. When I was in BAT, I was earning a lot of money but I resigned because he said, “look, we have to be together.” Even though I travel a lot now, I travel and go home, it is different when you are living permanently in another place. I think nobody had resigned in Shell for the sort of reason like mine. Everyone kept wondering if I was okay; or, how do you leave a Shell job because your husband said so? But I had to look

INTERVIEW

at the long-term impact of saying to him, “I’m sorry I can’t come because of my job.” Within five years, the marriage will be over. So, I just said, well, we will figure it out. I won’t have money for some time but I will find a way and luckily we eventually found that way. Now, when I look at those salaries that I thought were a lot then, it’s nothing compared to the stability I have now. Have you ever been denied opportunities or not treated properly on the basis of your gender? No, I have been fortunate to always work in quite progressive organisations. In fact, the last job I held in Shell was the Head of Change Management and Diversity and Inclusiveness. It was my job to make sure that all types of employees felt a sense of belonging and had a work

environment where they could thrive. So, we had to categorise the people that were disadvantaged in the business and it was the Nigerian engineers, the women, the gays, the lesbians, people who didn’t go to Oxford and Cambridge, etc. They were the diversity dimensions that we were watching and we try to make sure we gave each dimension adequate focus. Now, in the oil and gas space, the question I always ask is, “women are disadvantaged, why is nobody talking about it? While everybody is busy fighting for local content, no one is looking to say, who are the people in this space? We have to make sure that each group is properly represented. In this forum (PNC), there is not a single female-owned service company, not one. There’s not a female-owned oil company. The only one we have is Mrs Alakija. So, the last bid round that they did, I went to DPR and I said to them, “how are you going to make sure that women are represented in this bid round?” The man I spoke with was surprised, he asked, “What do you mean? The women should compete like everyone else”. So I asked him, “How many women have the kind of balance sheet you’re asking for?” Even when they say you must go and bring a bid bond, how many women can get finance from the Nigerian banks? Culturally women don’t own property, so you can’t provide a property for collateral and then if you give it a go, most of the banks MD are men. So, what kind of conversation are you going to be having with them? I am tired of people telling me “you are too aggressive, you don’t behave like a woman, go and relax, go and cook for your husband.” That’s just the mindset out there. There has to be a targeted effort on the part of the government to deliberate on how to develop an inclusive system so as to accommodate women, just the same way there has been a targeted effort to do local content. In other African countries like Uganda, Kenya, women have quite a good representation in their oil and gas industry but that isn’t the case with Nigeria, how can this be ameliorated? More women need to be encouraged to participate both in government and parliament. We have to look at the correlation

Everyone kept wondering if I was okay; or, how do you leave a Shell job because your husband said so? But I had to look at the long-term impact of saying to him, “I’m sorry I can’t come because of my job.” the women bring in government and women in parliamentary. It has been a common argument that the more women in parliament, the more successful the society becomes. So, the correlation is that more women in government will translate to more women in parliament but the whole thing has been truncated. This government doesn’t seem to have any gender target; even the few women in government appear unperturbed. Do you have any programme to encourage women to participate in the industry? Do you have any special project? Not necessarily, but I have tried to talk to everyone I know in government to do something for women in the oil and gas. But the response has been, oh! There is an existing one already. But I really think that if it is coming from the NNPC or the NCDMB, it will come as a policy drive and a way to encourage more women participation in the industry. There are a lot of women engineers even the non-engineers that have the desire and the drive, who can be encouraged to become active players. There is nothing that they are doing in the oil and gas industry that women cannot do. And in my own company, when there is a woman that is qualified I will hire that woman first.

ORIENT ENERGY REVIEW Vol.9 No. 01 Dec., 2018 / Jan., 2019

INTERVIEW During the Women in Energy session of 2018 NAPE conference, employers were encouraged to consider qualified female applicants for employment even when pregnant. How do you see that? Funny enough, when I got hired in Shell, I went to my interview pregnant and that year my rating was the highest in my career in SNEPCO. Employers need to realise that pregnancy is not a disease. A lot of people will not hire pregnant women, but I went to the interview with my big tummy. They hired me and I will forever be grateful to Ib Udofia and the other members of my interview panel. SNEPCO had a crèche and my baby used to come with me every day to work so Shell is actually a model gender friendly organisation. I just don’t know why that culture hasn’t cascaded down to their contractors. As a female CEO, what is the major challenge you have with your team, especially the male members of your team? Like I always tell my team, my challenge is that I like work too much and even work harder than them. I don’t know if it’s because I’m a woman because I found out that I’m always the one that goes the extra mile; always the one that’s pushing. Notwithstanding, I have an excellent team. What impact has the Local Content policy have on your operations? I find NCDMB under Engr. Simbi Wabote quite helpful to my business. Prior to this present Executive Secretary of the NCDMB, I was barely aware of it and didn’t know what they do or how it could benefit my business. It just seemed to me like an old boys’ network and I didn’t know it was this transparent and systematic. He has made more opportunities available to all people. Despite being pulled left, right and center, he makes himself available to help whenever he can. Lastly, what word of advice do you have for Nigerian women, particularly for those who may be interested in coming into the oil and gas industry? I will say that the oil and gas industry has a specific way it works, and anyone desiring to play in the industry needs to understand that it’s a long-term play. I have this picture that I show everyone. It has the picture of a dog that is looking very hungry with this quote “the patient dog eats the fattest bone”. When you look at the

dog, it looks so emaciated that it appears as if the dog has died of hunger. So, that’s a bit of how the oil and gas space is like. At a point, you feel like you’re about to literally die and then something good happens. So, I will advise that people come in with the mindset that the return on their investment is not going to be instant. It is not like trading or any other sector when the big projects start, that’s when the real challenge starts. But you can be waiting for big projects like Zaba Zaba, Bonga South West etc for God knows how long. But I think it’s an exciting space if you learn about the sector and you are patient, you build your credibility.

ORIENT ENERGY REVIEW Vol.9 No. 01 Dec., 2018 / Jan., 2019

We have to look at the correlation the women bring in government and women in parliamentary. It has been a common argument that the more women in parliament, the more successful the society becomes.

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