Orient Energy Review Vol 9 No.02 by Orient Energy Review

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...driving local content development

VOL.9 No.02

COVERING LOCAL CONTENT IN ENERGY, OIL AND GAS

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Project 100: How we made it

Landlocked, yet militancy is ruled out in Uganda

Africa Better with Regional Collaboration ‘With Oilserv capacity, Nigeria won’t miss EPCIC opportunities in Africa’

ORIENT ENERGY REVIEW Vol.9 No. 02

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CONTENTS

rientEnergy Review ...driving local content development

‘With Oilserv capacity, Nigeria won’t miss EPCIC opportunities in Africa’

33 08

OGTAN holds annual conference in April

Chevron signs gas sale, aggregation with Dangote Fertilizer

AfDB’s NORMA project nets South Sudan 14.2 million non-oil revenue for first time

120 Niger Delta entrepreneurs receive Shell Nigeria LiveWIRE grant

80% of contracts in Nigeria O&G industry go to local contractors - Wabote

Stakeholders proffer solutions on effective utilisation of Eastern ports

Ghana at Subsea Expo, woos Scottish Investors to Ghana

Petroleum Ministry clears air, says OML 11 licence not revoked

Group harps on need for urgent passage of PIGB International Women’s Day: Sahara makes case for girlchild education Project 100: How we made it

OPEC at 60 reminisces on scribe, the Maadi Pact

ORIENT ENERGY REVIEW Vol.9 No. 02

EDITOR’S NOTE

Publisher/ Editor-in-Chief Nneka Ezeemo

s the year 2019 advances, the trend in the global oil and gas industry has remained somewhat impressive against the earlier predictions of uncertainties that heralded the year. The apprehension at the time was understandable as they hinged on such factors as the US unbridled Shale oil production, the pendulum of sanction dangling on two major oil producers Venezuela and Iran. Prominently was the disbelief on OPEC and allies’ effort to stabilise the market with a renewed commitment by its members and allies to cut production. Yet, against all odds, the OPEC+ propping up price mechanism appears to have given the market a gravitational pull as the prices of crude oil continued to improve. According to some experts, the oil markets have had a muted reaction so far to the chaos in Venezuela as the global oil markets are well supplied, and that the output is estimated to rise further as the number of rigs looking for new oil has increased for the first time in 2019. Here in Nigeria, the re-election of President Muhamadu Buhari has brought some rays of hope to the oil and gas industry. Stakeholders have described his re-election as a good omen for the industry. This is especially so as the industry witnessed investors’ apathy leading to a significant drop in foreign investment into the country in 2018. Statistics obtained from the National Bureau of Statistics revealed that Nigerian Capital Importation report for the second quarter of 2018, foreign capital inflow into the oil and gas industry declined by $60.77 million, about N18.6 billion to $24.85 million, about N7.6 billion in the second quarter of 2018, compared to $85.62 million, about N26.2 billion recorded in the first quarter. Industry stakeholders are optimistic that investment inflow will get back to normalcy, soonest. In this edition, in our commitment to provide you with exclusives and up-to-date industry reports, we have put together some special reports packaged to keep you informed, educated, more importantly to discover several opportunities Nigerian oil and gas industry has for every operator in 2019 and beyond. In our coverage of Federal Government’s activities around Local Content Law implementation through NCDMB, OER notes that it has been a busy and impactful season. The launch of Project 100 in January, hosting of NOGOF in April amongst others depicts how critical this government takes the issue of having Nigerians duly empowered to take their rightful place in the Nigerian oil and gas industry. Read “Project 100: How We Made it” and learn from beneficiaries’ experience and tap into the various opportunities in the industry. 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 say happy reading!

Peace Obi

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

rientEnergy Review

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 Ghana Office +233 2483 61594 orientenergyreviewgh@gmail.com

...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

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INDUSTRY NEWS

Petroleum Ministry clears air, says OML 11 licence not revoked ...NPDC becomes operator to expedite Ogoni clean up Chibisi Ohakah, Abuja

here were conflicting reports recently that signaled the notion that the Federal Government had revoked the Oil Mining Lease 11 directly linked to the protracted Ogoni environmental crises. This followed a written directive from the office President Muhammadu Buhari to the Group Managing Director of NNPC, Maikanti Barau, stating that the operatorship of OML 11 should be taken over by the NNPC/NPDC not later than April 30, 2019. The statement was largely understood in the oil and gas circuit to mean that the OML 11 joint venture partner licence operated by Shell Petroleum Development Corporation has been withdrawn. An impeccable source in the Ministry of Petroleum Resources last weekend cleared the air saying the directive was simply to transfer operatorship of the OML 11 from the joint venture partners to the Nigerian Petroleum Development Company. The senior ministry official said the recovering of licence from the joint venture partners would not be as simple as an ordinary directive from Mr President. “You should know that the joint venture partners in OML 11 were not just NPDC and SPDC. “There are two other international oil companies, Total and Agip, are also partners in the oil block alongside shell,” the source informed, adding that the reason behind government’s action is to ensure smooth clean up of the Ogoni environment, of which the operatorship of the OML 11 will revert to Shell. According to a letter from Aso Rock, Abuja to the NNPC boss, Baru, dated March 1, 2019, with reference number SH/ COS/24/A/8540 and signed by the Chief of Staff to the President, Abba Kyari, the President was clear with his directive that

Ibe Kachikwu, Minister of State for Petroleum the entire operatorship of OML 11 should be taken over by the NNPC/NPDC not later than April 30, 2019. The NPDC is the flagship oil exploration and production subsidiary of the NNPC. The letter from the Presidency to the NNPC, read in part, “Kindly note that the President has directed NNPC/NPDC to take over the operatorship from Shell Petroleum Development Company of the entire OML 11 not later than 30 April 2019 and ensure smooth re-entry given the delicate situation in Ogoniland.” The letter has generated concerns in the oil industry over the status of the OML 11 JVP. It was widely speculated that the President had withdrawn the licence of Shell, but this was refuted by partners in the JV as well as informed officials at the petroleum ministry The source retorted that whoever says the letter mentioned withdrawal or revocation of licence is just being unnecessarily sensational about the directive,

ORIENT ENERGY REVIEW Vol.9 No. 02

pointing out that the President’s action is not new in the oil industry. “Withdrawing the licence means going through another round of bidding processes before you can get the licence. Shell and NPDC are not the only partners; Total and Agip are also involved. Shell operates the JV on behalf of other partners, and as we speak, the holder of the licence on behalf of the partners now is NPDC,” he said OML 11, in terms of production, is one of the most important blocks in Nigeria. It lies in the southeastern Niger Delta and contains 33 oil and gas fields of which eight are producing as per 2017. The terrain is swampy to the south with numerous rivers and creeks. Port Harcourt is located in the northwest of the block, while the major yard and logistics base at Onne is located by the Bonny River. The Bonny oil terminal – the largest in Nigeria – and Nigeria LNG are both located in Bonny.

FG commences first phase of PH Refinery’s rehabilitation

ineteen years after the last Turn Around Maintenance (TAM) exercise of the nation’s premier refining plant, the Nigerian National Petroleum Corporation (NNPC) has commenced the first phase of the rehabilitation of the 210,000 barrels per day capacity Port Harcourt Refinery complex that comprises of 60,000 barrels per day old Refinery built in 1965 and the 150,000 barrels per day, new Refinery, commissioned in 1989. The project is being executed by Milan-based Maire Tecnimont S.p.A, in collaboration with its Nigerian affiliate, Tecnimont Nigeria. The Italian company is listed on Milan Stock Exchange with interest in international engineering and construction, technology and licensing, and energy business development, whereas their Nigerian counterparts, the Tecnimont Group, has operations in 40 different countries, numbering about 50 operative companies with a workforce of about 5,500 employees. The exercise was flagged off in Port Harcourt recently by the Group Managing Director of the NNPC, Dr Maikanti Baru, who -said that at the end of phase 1, the Port Harcourt Refinery complex should be able to reach 60% capacity utilization. The NNPC is engaging Eni/NAOC as technical advisor to support the rehabilitation of PHRC, while the NNPC/PHRC would leverage Eni’s extensive refinery supply chain network and warehouses to procure critical materials for the programme. This first phase of the rehabilitation contract, which would run for six months, will involve detailed integrity check and equipment inspection of the Port Harcourt Refinery complex beginning from the end of March 2019. The integrity test comes as a forerunner to the second phase of the rehabilitation project which entails a comprehensive revamp of the complex aimed at restoring the refinery to a minimum of 90% capacity utilization, it was gathered

Maikanti said that subject to the successful completion of the integrity checks, Phase 2 of the project would be executed on an Engineering Procurement Construction basis by Tecnimont in collaboration with the original builders of the plant, JGC of Japan. Speaking on behalf of the contractors, Antonio Vella, Chief Officer, Upstream, Eni, said all the companies involved would deploy all available modern resources to ensure effective upgrade of the plant. Vella enthused that with the commitment of all parties involved, it was certain that NNPC would be able to celebrate the revamp of the PHRC that would lead to its full capacity utilization on schedule and in full safety. Speaking on behalf of the workers unions, Comrade Odor Victor Ayiri, branch chairman of the Petroleum and Natural

Gas Senior Staff Association (PENGASSAN) and Comrade Dibiah Joseph, chairman of the National Union of Petroleum and Natural Gas Workers (NUPENG), jointly pledged the support of workers to ensure a smooth turnaround of the facility. It will be recalled that the NNPC had to abandon its earlier funding strategy by its DSDP Term Contractors/Consortia due to onerous conditions demanded after more than twelve (12) months of negotiations. The apex oil company has adopted immediate direct funding from internal cash flows while it goes to the financial markets for debt financing. NNPC further segmented the rehabilitation, to begin with, Port Harcourt Refinery Complex and then progress to Warri and Kaduna Refinery complexes using the same methodology.

ORIENT ENERGY REVIEW Vol.9 No. 02

INDUSTRY NEWS

OGTAN holds annual conference in April Peace Obi

he Oil and Gas Trainers Association of Nigeria (OGTAN), recognizes the link between the quality of a nation’s workforce and its economic growth, against this backdrop, the Association in collaboration with the Nigerian Content Development and Monitoring Board (NCDMB) has concluded arrangements to host its second annual international conference and exhibition in Lagos. It noted that the conference is its direct response to the skills gap in the country, especially in the Nigerian oil and gas industry, adding that the Association has concluded arrangements to assemble resource persons to deliberate on the solutions as it relates to generating sustainable employment with a direct impact on the country’s GDP. The conference with a theme, “Human Capital Development: as a Driver for National Transformation” will hold at Eko Hotel and Suites, Lagos from 13 to 16, April

Baru urges Investors to tap into Nigeria’s $48bn Oil & Gas Investment Opportunities Bright Prospects for Africa’s Energy Industry

he Group Managing Director, Nigerian National Petroleum Corporation (NNPC), Dr Maikanti Baru has called on investors to utilize the over $48billion investment opportunities available in the upcoming capital projects within Nigeria’s Oil and Gas Industry. Speaking at a panel session during the 2019 edition of International Petroleum (IP) Week conference in London on a topic, “Insights on Future Exploration Hotspots: Opportunities for Africa’s Oil & Gas Industry” under the sub-theme, “The New Frontier for Africa’s Oil and Gas” Baru said that despite the downturn in the global oil industry, business prospects in Africa energy industry remains high and positive. Speaking on the investment opportunities in Nigeria, the GMD said that the NNPC’s Frontier Exploration Service was currently drilling the Kolmani River-2 Well where desktop estimates revealed that about 400Bcf of gas is expected to be encountered. Adding that several new frontiers for exploration opportunities abound in Nigeria, even as offshore discoveries in the country have mostly

been limited to between 1,000 - 1,500m of water depth. “Beyond these water depths, the new frontiers of ultra-deep waters need to be tested. And that is where we need the investors,” Baru said. Also, enumerating the numerous potentials of Africa’s oil and gas industry, the GMD said that the continent’s energy outlook was looking positive amid difficult operating and economic headwinds. According him, over 41billion barrels of oil and 319trillion cubic feet of gas were yet to be discovered in sub-Saharan Africa alone, while between 2008 and 2017, exploratory success in the sub-region was at least 45%. Baru noted that there has been a surge in the capital expenditure (CAPEX) across Africa’s oil and gas industry, with close to $194billion earmarked to be spent between 2018 and 2025 on 93 upcoming oil and gas fields in Africa. He said, “Out of this $194billion, Nigeria accounts for $48.04 billion (over 24.8%) of the total CAPEX coming into upcoming projects in Africa over 2018 to 2025, with over 20 planned projects,” Baru stated.

ORIENT ENERGY REVIEW Vol.9 No. 02

The GMD also disclosed that 23.8% of the CAPEX in Africa would be spent in Mozambique, 11.3% in Angola while about 29.2% would be spent in Tanzania, Senegal, Mauritania, Uganda, Egypt, Algeria and Kenya combined. He noted that Africa with over 14 oil producing countries currently accounts for 7.5% (126.5Billion barrels of crude oil) and 7.1% (488 Tcf of gas) of global proven oil and gas reserves respectively, also revealed that the continent accounts for 8.7% (8.1Million barrels per day) of global oil production and 6.1% (21.8bscfd) of global gas production, even as it consumed 4Million barrels of oil per day and 13.7bscfd of gas (equivalent to 4.1% and 3.9% of global oil and consumption respectively). Baru however warned that the African Oil and Gas Industry may not achieve its full potentials unless issues related to Legal and Regulatory uncertainties, lack of infrastructure, skilled manpower shortage, transparency and accountability are addressed amongst key stakeholders,

INDUSTRY NEWS 2019. Speaking during a press conference in Lagos, recently, the President, OGTAN, Dr Mayowa Afe, said that an onslaught of complex and broad-ranging socio-economic challenges including poor governance, corruption, inadequate infrastructure, outdated educational curriculum, poor funding of research centres, social unrest and increasing poverty had affected the human capital development in the country over the years. The President said, “OGTAN is also using this conference to address the rapid advancement of digitalisation, automation, and artificial intelligence, and how it compounds the increasing concern about the future of job security, wealth redistribution, and a comparatively rising cost of implementing local content where these advancements are lacking.” According to him, discussants include, the Commercial Service Counsellor, US Consulate, Mr Brent Omdahl; the Manag-

ing Director, Oilserv, Mr Emeka Okwuosa; the Managing Director, Nigerdock Nigeria Plc, Mr Pade Durotoye; the Managing Director, AOS Orwell, Mr Femi Omotayo; Principal, Petroleum Training Institute, Prof Sunny Iyuke, and Group Managing Director, Schlumberger Nigeria, Mr Ifeanyi Nwagbogu, among others. “Some past and present high-ranking government officials, producing oil majors, multinational service companies’ executives, diplomats, and civil society groups are among distinguished guests expected at the conference,” Afe said. The OGTAN President gave the names of the distinguished individuals and companies to be honoured with different categories of awards to include: the Honourable Minister of State for Petroleum Resources, Dr Emmanuel Ibe Kachikwu; GMD NNPC, Dr Maikanti Baru; and the Executive Secretary of NCDMB, Engr Simbi Wabote will receive “The Nigerian Oil & Gas Key Drivers Award” in recognition of their

various roles and quality of leadership over the last 3years which has brought stability and innovation in the Nigerian oil and gas industry. Also, that “The Local Content Achievement Award” will go to Engr Ernest Nwapa, former Executive Secretary of NCDMB, while TOTAL Exploration and Production will be honoured with “the Nigerian Content Project of the Year Award 2018”.

Dr Mayowa Afe, President, OGTAN

Chevron signs gas sale, aggregation with Dangote Fertilizer Stories by Peace Obi

he Nigerian National Petroleum Corporation, NNPC and Chevron Nigeria Limited, CNL have signed a Gas Sale and Aggregation Agreement (GSAA) with Dangote Fertilizer Limited (DFL) and Gas Aggregation Company of Nigeria Limited (GACN) as the ‘Aggregator’. The agreement was executed on behalf of the three companies by the Chairman/ Managing Director of CNL, Jeffrey Ewing, Managing Director/CEO of GACN, Morgan Okwoche, and the Group Executive Director, Strategy, Capital Projects & Portfolio Development of DFL, Devakumar Edwin, respectively. The NNPC subsequently executed the GSAA. NNPC and CNL are obligated to supply 70mmScf/d of natural gas to Dangote Fertilizer Limited to enable start up and operation of the newly built fertilizer

Aliko Dangote plant. The Dangote Fertilizer Plant at Ibeju Lekki, Lagos, is a flagship mega fertilizer

project designed to support the Federal Government’s drive to develop the agricultural sector and in-turn improve the Nigerian economy. Natural gas is the feedstock of the Dangote Fertilizer Plant. This GSAA for the supply of the major raw material needed to run the fertilizer plant is another demonstration of the NNPC/CNL JV’s commitment to the domestic gas market. The NNPC/CNL Joint Venture (JV) is currently the largest and most on-spec supplier of gas to the domestic market. The JV continues to collaborate extensively with other stakeholders in finding creative solutions to issues relating to the domestic gas market. The NNPC/CNL JV is committed to supporting the Federal Government of Nigeria’s policy to boost local industries

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INDUSTRY NEWS

AfDB’s NORMA project nets South Sudan 14.2 million nonoil revenue for first time Peace Obi

outh Sudan, an African country whose economy is heavily dependent on oil revenue has made a remarkable achievement in its effort to diversify her economy as the country earned about US$ 14.2 million in non-oil revenue for first time, with the support of the African Development Bank’s Non-Oil Revenue Mobilization and Accountability (NORMA) project in the country. The African Development Bank in a statement made available to the press on Tuesday announced the achievement. Described as the highest ever receipt from non-oil tax revenues in the nation’s history, the 14.2 million non-oil revenue was made possible through the efforts of a revamped state revenue authority. The impressive result, recorded at the end of January 2019 is evidence that the Non-Oil Revenue Mobilization and Accountability (NORMA) project in South Sudan, set up with a US$14.8 million grant from the African Development Bank to improve domestic resource mobilization in the non-oil sector, is achieving its objectives. NORMA, in collaboration with the state National Revenue Authority (NRA), had driven accountability and transparency in the national revenue generating system. South Sudan’s Revenue Authority (SSRA) was said to have consolidated all its non-oil revenue receipts since January 1st 2019 into one single account - the NRA Block Account. The account has yielded approximately US$ 14.2 million, for the month of January 2019 alone. The statement also noted that the NORMA is also focusing on strengthening financial control and accountability mechanisms, directly benefitting the Ministries of Finance and Planning, SSRA, and several other states regulatory and fiscal bodies. Adding that with the Bank’s support,

Benedict Kanu, AfDB Country Manager for South Sudan the SSRA will continue to work with concerned partners to strengthen the capacity of the key revenue agencies such as customs, to review the legal framework for the collection of non-oil revenue and the creation of an integrated/computerized revenue collection system. According to the Bank, “AfDB remains committed to working with South Sudan and its partners to help diversify the country’s economy and build the foundation for long-term structural transformation in Africa’s youngest nation.” In his remarks, the African Development Bank Country Manager for South Sudan, Benedict Kanu, commended the results, which are being described by government officials, analysts and development practitioners as amazing. “This is a notable step in the right direction, underlining the Bank’s unflinching commitment to help South Sudan diversify its economy away from oil, a finite resource, to more productive and inclusive sectors such as agriculture,” he noted. According to Kanu, these new figures could be used by the government as a baseline for revenue forecasting. Adding

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that further improvement in non-oil revenue mobilization is expected in the medium to long term, as the government continues to tighten its accountability systems. He said, “With the right conditions in South Sudan, the Bank is poised not only to ensure continued improvement in the performance of the existing country portfolio but to grow the portfolio over the next three years, in line with the expressed national strategic priorities, as well as the Bank’s vision for continental economic transformation,” Kanu added. With US$899,100 in support from the Bank’s Institutional Support Project to Public Finance Management and Aid Coordination (PFAID) a purpose-built office building has been built for the SSRA. Upcoming activities of the African Development Bank-financed NORMA project include review and drafting of revised tax law, development of an IT system for revenue management, a taxpayer education program, study tours for knowledge generation on tax authorities within the region, and rollout of targeted training programs for the staff of the SSRA.

INDUSTRY NEWS

International Women’s Day:

Sahara makes case for girl-child education Peace Obi

he Managing Director of Asharami Energy, a Sahara Group Upstream Company, Olajumoke Ajayi has urged regional and global stakeholders to invest in the education of women to ensure they are empowered to take on the critical role of nurturing the leaders of tomorrow. Speaking at an event organized by the United Nations Information Centre and United Nations Association of Nigeria to commemorate the 2019 International Women’s Day, Ajayi said that girl-child education remains the bedrock of development. “She said, “Education takes off limits and shatters all manner of ceilings women may come across. It is the bedrock for ensuring global sustainable development as everyone goes through the tutelage of women at various cycles of life. “At Sahara, we believe that no effort should be spared in providing support for the education of girls and boys; this should be a global campaign that should be embraced by world and business leaders as well as the civil society.” She said that Sahara Foundation since inception has implemented its Personal and Corporate Social Responsibilities (PCSR) initiatives in the areas of Health,

Education and Capacity Building, Environment and Sustainable Development. Over two million people have benefitted from Sahara Foundation’s projects, with women and girls accounting for over 50 per cent of the beneficiaries. Some of the initiatives include eye care programmes, scholarships, literacy development programmes, career guidance programmes, water and sanitation programmes. In his remarks, the Director of the United Nations Information Centre, Lagos Dr Ronald Kayanja urged participants to seek innovative ways of using technology to improve the lives of women, their `participation in governance and business. He said, “We need to find innovative ways of reimagining and rebuilding our nation so that it works for everyone. There are tasks that women and girls perform today that technology and innovation has made easier and we must ensure that they get access to these tools to improve the quality of life for women everywhere,” Kayanja said. According to the United Nations, about 740 million women currently make their living in the informal economy with limited access to social protection, public services and infrastructure that could increase their productivity and income

security. Kayanja also noted that one in three women are likely to face violence in their lifetime, yet public services, urban planning and transport systems are rarely planned with women’s safety and mobility in mind. The keynoted speaker, Executive Director of Joan Agha Foundation, Dr Joan Agha, urged participants to look towards using education and digital technology to empower women and girls. “We live in a patriarchy and we must see the rights of women as our common objective to build a prosperous and inclusive world as we move towards achieving the 2030 Agenda for Sustainable Development,’’ Agha said. Speaking further, Agha said that while a little more than a decade remain to achieve the Sustainable Development Goals, including Goal 5 on gender equality, that all indications show that at the current pace of change, closing the global gender gap will take a staggering 108 years, and 202 years for economic gender parity. According to her, to meet the needs of women and those most marginalized at the bottom of the pyramid, public services, infrastructure and social protection require innovative platforms to increase the quality and affordability for women users.

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INDUSTRY NEWS

Austin Avuru, Chief Executive Officer, Seplat

Seplat releases financial result, depicts brighter future Ngozi Egenuka

eplat has released its 2018 financial result and an operational update that predicts solid growth in years to come. The Chief Executive Officer (CEO), Seplat, Austin Avuru, commenting on the results said, “Seplat has delivered an excellent operational and financial performance resulting in robust profitability and cash flow generation provides us with an extremely solid foundation for growth in the coming years. “At our core assets in the West, OMLs 4, 38 and 41, the extension of the license to 2038 means that we can confidently plan and invest long into the future to realise the full potential of those blocks. As we continue to enhance production and revenue diversification with new wells scheduled at OML 53 in the East, the board took the Final Investment Decision to invest in the large scale ANOH gas and condensate development which will form the next phase of transformational growth for our gas business. He explained that the organisation focused on capital allocation, which helped to achieve the present result and create more opportunities. “Disciplined capital allocation continues to

remain at the core of our activities evidenced by our continual deleveraging of our debt levels to the current balance of US$350m. In 2018, we reinstated the dividend, increased capital investments and with the resources and headroom in our capital structure, we are equipped to capitalise on organic and inorganic growth opportunities as they may arise.” He added. The result showed 2018 full year average working interest production at 49,867 boepd and represents an overall increase of 35% year-on-year. Within this, liquids production was up 44% year-on-year whilst gas production was up 27% year-on-year. The 2018 figures reflect a production uptime of 85%, compared to a production uptime of 50% in full-year 2017 when the first six months of that year continued to be impacted by force majeure at the Forcados terminal. Overall reconciliation losses arising from the use of third-party infrastructure were around 8% for the year. License renewal for OMLs 4, 38 and 41 obtained with a new expiry date of 21 October 2038. US$25.9mn renewal bonus paid to ensure all conditions have been met (renewal bonus included in 2018 capex). The statement contained, “Full-year

ORIENT ENERGY REVIEW Vol.9 No. 02

revenue US$746mn; operating profit US$310mn, profit before deferred tax US$238mn; after adjusting for deferred tax of US$91mn, net profit after tax stood at US$147mn “The board has recommended a final dividend of US$0.05 per share. Cash flow from operations US$502 million significantly ahead of capital expenditures of US$88 million.” Successfully concluded debt refinancing in Q1 2018, including debut US$350mn bond which diversifies the long-term capital base and new four years US$300mn RCF Cash at bank US$585mn and gross debt US$450mn resulting in a net cash position of US$135mn at end 2018, was also included in the result. “Amukpe to Escravos alternate export pipeline nearing completion; anticipated to be fully commissioned and operational in Q2 2019, ramping up to initial permitted capacity of 40 mblpd during Q3 2019; access to three separate export routes at our western assets and two at our eastern assets providing adequate redundant capacity will significantly de-risk distribution of oil production to market.” The result further stated.

LOCAL CONTENT

120 Niger Delta entrepreneurs receive Shell Nigeria LiveWIRE grant

nother 120 youth entrepreneurs from seven states of the Niger Delta have been given Shell Nigeria LiveWIRE business training and grant worth of N48 million by the Shell Petroleum Development Company (SPDC) Joint Venture to begin small-scale businesses in their respective states. Shell Nigeria LiveWIRE grant is one of the multinational oil company’s efforts to deter youth involvement in vices with the expectation that beneficiaries will become models for alternative livelihoods. The 120 beneficiaries received their certificates at a Regional LiveWIRE graduation ceremony that held in Port Harcourt recently. Speaking at the event, the SPDC General Manager External Relations, Mr Igo Weli, described the company’s flagship youth enterprise development programme (Shell Nigeria LiveWIRE) as a potent initiative that has produced over 7,000 Niger Delta entrepreneurs since inception in 2003 with most of them now employers of labour. He said, “Some of the beneficiaries have also been given the opportunity to participate in SPDC’s supply chain as vendors and have been linked to growth capital from other agencies.” Speaking at the graduation ceremony, the Director of Secondary Education, Rivers State Ministry of Education, Mrs Sokari Davies, commended SPDC and its joint venture partners for the consistent sponsorship of the Shell Nigeria LiveWIRE programme. Mrs Davies said, “Irrespective of the challenges in the operating environment, SPDC still deemed it necessary to empower and develop the youths. Other multinational oil companies should copy SPDC and channel resources towards the development of the youths. That way, restiveness will greatly reduce. The government will contin-

ue to partner with SPDC because of this. “It is indeed a remarkable day for the 120 beneficiaries and we are pleased to see this group of young entrepreneurs start-up businesses that will contribute to the economic development of our communities.” A previous LiveWIRE beneficiary and now Managing Director of De-Rabacon Plastics, Yolo Bakumor Smith, told the Regional LiveWIRE graduates how he also won the maiden Shell Outstanding Achievement Prize in the 2018 Shell LiveWIRE Top Ten Innovators Global Awards. Yolo said, “I owe my gratitude to Shell because no other multinational operating in our region has given back the way and manner that they have. I am my own boss now and I have been privileged to assist a lot of people courtesy of Shell. “The Shell LiveWIRE Nigeria programme, a part of the global Shell LiveWIRE social investment programme, enables young people to start their own business and create employment. In 16 years of operation in Nigeria, the Shell LiveWIRE has received local and international recognition. For example, in 2011, the programme received the African Leadership

Magazine award for Youth Development, Social Enterprise and Reports Award (SERA) 2010.’’ Two Nigerian beneficiaries emerged winners in the 2017 and 2018 editions of the Global Shell LiveWIRE Top Ten Innovators Award. Three others won the 2017 pitching contest in LiveWIRE #Makethefuture Accelerator event held in Port Harcourt and, between 2010 and now, five beneficiaries have won the international ‘’GO and Trade Enterprise Linkage Award’’ (which enabled them to make international trade visits to London, Dubai in the United Arab Emirates and Neighbouring Ghana.) At the national level, five beneficiaries have won the Federal Government ‘YOU WIN’ awards in 2014 and 2015. Two of them won the Central Bank of Nigeria Entrepreneurship award, while 10 others won the Tony Elumelu Foundation Award.’’ The Regional LiveWIRE programme operates in the Niger Delta region and aims to inspire, encourage and support young people aged 18-30 to start up their own businesses in the Nigerian states of Edo, Delta, Bayelsa, Rivers, Abia, Imo, Cross River and Akwa Ibom.

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LOCAL CONTENT

NSE confers fellowship on Wabote, Ikuru

he Nigerian Society of Engineers (NSE) on Friday conferred the rank of fellowship on Engr. Simbi Kesiye Wabote, the Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB) for his outstanding contributions to the engineering profession and Local Content Development in the oil and gas industry. Wabote was decorated among 38 other eminent engineers, including the General Manager Capacity Building Division of the NCDMB, Dr. Ama Ikuru, at the 10th fellowship conferment lecture and ceremony held in Abuja on Friday. The new fellows were decorated by the President of the NSE, Engr. Adekunle Mokuolu and the Chairman of the Board Fellows, Engr. Felix Atume. Thereafter, Engr. Wabote was nominated to deliver the vote of thanks on behalf of the conferees and he thanked the NSE Council

Simbi Kesiye Wabote

Ama Ikuru

for bestowing the honour of fellowship on them. He noted that all the nominees were senior practitioners of the profession, who had made impressive contributions to the growth of engineering. He also promised that new fellows would

continue to fly the flag of the society and uphold the responsibilities expected of them. Some staff of the NCDMB, friends and associates of Engr. Wabote and Dr. Ikuru were at the event to celebrate with them.

80% of contracts in Nigeria O&G indus …Despite delay in passage of PIGB, FIDs, investments still happen

he Executive Secretary, Nigerian Content Development and Monitoring Board, Engr. Simbi Wabote has said that almost 80 per cent of the contracts in the Nigerian oil and gas industry are awarded to local contractors. Engr. Wabote made this disclosure on Thursday in Lagos during a press conference for the forthcoming 2019 Nigerian Oil and Gas Opportunity Fair (NOGOF), stating that the Board’s commitment to its mandate of building local capacities in the Nigerian oil and gas industry has resulted in a significant level of penetration by the local contractors in the nation’s oil and gas industry. According

to the NCDMB boss, the 2019 NOGOF scheduled to hold between April 4th – 5th April 2019 at the NCDMB’s Headquarters Oxbow Lake, Yenagoa, Bayelsa State, that it is specifically designed to serve as a platform where opportunities that exist within the Nigerian and oil and gas industry is showcased. H said, “One of the key objectives of NOGOF is to bring together governments, national oil companies, investors, corporate players and independents; we can give them a unique space within our country to network, discuss and share knowledge. The potential benefits of the NOGOF 2019, include integrating of producing communities into the oil and

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gas value chain, fostering institutional collaboration, maximizing participation of Nigerians in oil and gas activities, linking oil and gas industry to other sectors of the economy, and maximizing utilisation of Nigerian resources,” Wabote said. Speaking on some of the Board’s achievements, the ES said, “The level of penetration by the local contractors is impressive. I can tell you that almost 80 per cent of the contracts that are awarded in the oil and gas sector go to local contractors. That gives you a significant level of penetration because no international company without the local firms is allowed to take up a contract in the oil and gas industry,”

LOCAL CONTENT

Wabote reveals project phase service providers must not miss ...urges service providers to look beyond project phase

he Executive Secretary, Nigerian Content Development and Monitoring Board (NCDMB), Engr. Simbi Wabote has called on indigenous service providers in the oil and gas industry to look beyond the project execution phase of any project and tap from other windows of opportunities the operation phase offers. He noted that whereas every project has two phases, oftentimes, contractors and service providers tend to limit their scope of participation to the first phase, thereby losing out in an important phase that offers longer and better economic benefit. The ES revealed that huge opportunities abound in the operation phase of a floating, production storage and offloading (FPSO). He encouraged service providers to tap into the opportunities in such areas like maintenance work, coating, catering among others. Wabote who spoke during the presentation on Egina and Bonga FPSO by Total and Shell respectively, at the International Petroleum Summit (IPS) that held in Abuja, recently,

noted that most contractors concentrate their efforts only on participating in the phase of the project, “forgetting that project in its nature is sinusoidal.” According to him, while the duration for execution of a project varies, “if a company secures a contract in a project that may last two years, after that, you don’t have any project to work on, but during the operation phase of an FPSO, the next 25 years offers you various opportunities where different services will be needed. And that is where the money is, not in the project,” he said. The NCDMB boss stated further that players in the oil service sector often times forget that there is huge opportunity there. “If we had mentioned the huge amount of money that SNEPCo would have spent throughout the operation phase of Bonga, it would have surpassed the $16m that would have been spent during the project phase. “So, imagine what will happen to Egina in the next 25 years that it is going to be offshore in the operation phase. That brings another

opportunity for Nigerians and we should begin to think in that direction. So, I urge you to look at this and take advantage of the operation phase of a project like Egina. The project phase is gone but the operation phase is here and most of you will retire and Egina will still be there. “If they decide to list the opportunities out in these vessels like catering, maintenance work, painting, etc, there is a lot of money in this phase. I ask you guys to look beyond projects and look at operation phase of facilities like that,” he said He called on stakeholders to take advantage of Nigerian Oil and Gas Opportunity Fair (NOGOF) coming up in Bayelsa in April, to discover more opportunities in the oil and gas industry. “In NCDMB, we run a programme called “Opportunity fair” in April; we hope to showcase opportunities that are in the project phase as well as in operation phase. I hope most of you will attend and see what we have in the basket.”

dustry go to local contractors - Wabote Also on the integration of the oil communities into the oil and gas business the Executive Secretary, said, “About five months ago, we signed off what is called the “community Content Policy”, with that, any project opportunity that will be happening in any community, there are scopes that have been earmarked for the community contractors. As such, opportunities for employment for community people are also spelt out clearly in the Nigerian Content Plan which is very important.” Speaking further, the ES noted that despite the delay in the passage of the PIGB into law, the country has continued to witness significant investment decisions and the subsequent execution of several projects. Disclosing that about

$20bn investment has been attracted into the country in the last two years while projecting that about $25bn investment opportunities would be attracted into the nation’s oil and gas industry in the next two years. Citing some of the opportunities that the Board highlighted during the 2017 NOGOF which FIDs have been taken on to include SPDC Assa North Gas Development project, SNEPCo Bonga South West, Ikike projects; completed projects like, Total’s Egina, the ES said, “There has been substantial progress and things are looking up, especially with the resolution of a lot of the cash call challenges that joint venture operators were facing which stagnated projects and investments.

“Since the resolution, a lot of opportunities are springing up in all the Joint Venture operators that e have. The other day, we also saw the Nigerian Petroleum Development Company inaugurating a significant project, almost about $200m adding value to the industry. “So, within the past two years, I can comfortably say that we have pushed opportunities up to about $20bn into the oil and gas industry through these opportunities that we share and I think in the next two years, we also look forward to another $25bn in the Nigerian oil and gas industry going by the opportunities that we have identified and want to also share.

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LOCAL CONTENT

NCDMB, NLNG sign $12bn Project Train 7 Nigerian Content Plan …to create 10,000 jobs, legacy facility

he Nigerian Content Development and Monitoring Board (NCDMB) and the Nigeria LNG Limited (NLNG) have signed the Nigerian Content Plan (NCP) for the NLNG Train 7 project. The Executive Secretary NCDMB, Engr. Simbi Kesiye Wabote and the Managing Director of NLNG, Engr. Tony Attah signed the NCP in Abuja at an event witnessed by senior personnel of the Nigerian National Petroleum Corporation (NNPC), Shell, Total and ENI – shareholders of the NLNG in Abuja on Friday. The event signaled the kick-starting of the long awaited huge gas project that would create a flurry of activities in the oil and gas sector and contribute immensely to the nation’s economy. Speaking at the signing ceremony, Wabote revealed that the Train-7 scope will deliver 100 percent in-country fabrication of the Condensate Stabilization Unit, piperacks, flare system, and non-cryogenic vessels. Site civil works on roads, piling, jetties and will also keep local businesses occupied. He stated that Train 7 project is expected to expand NLNG’s production capacity by 35 per cent from 22 Million Tonnes Per Annum (MTPA) to 30 MTPA. Stressing that at peak construction, the project is projected to provide direct, indirect and induced employment for over 10,000 persons. According to him other spin-off opportunities would include logistics, equipment leasing, insurance, hotels, office supplies, aviation and haulage, the NCDMB’s ES pointed out that the increased number of NLNG Trains would also provide huge business opportunities for local businesses to build capabilities in the maintenance of LNG plants, especially in the area of cryogenics. Adding that the project would also catalyze other upstream gas supply projects required to keep the LNG train busy and make stranded gas fields in the shallow and deep offshore in the area economical. Speaking further, he explained that the expected job explosion from Train 7 is banked on the Nigerian Content Plan, which provides for 100 percent engineer-

Tony Attah ing of all non-cryogenic areas in-country. Adding that the total in-country engineering man hours is set at 55 percent, which exceeds the minimum level stipulated in the NOGICD Act, in line with the Board’s resolve to push beyond the boundary of limitations. He said, “It will also provide great opportunities for utilization of local goods and services in addition to enhancing and developing new capacities and capabilities for the local supply chain. There will be 100 percent local procurement of all LV cables and HV cables, all non-cryogenic valves, protective coatings, and all sacrifice anodes. 70 percent of all non-cryogenic pumps and control valves will be assembled in-country.” The Executive Secretary said that Train 7, like other forthcoming major projects in the oil and gas sector must leave a legacy facility, just like Total’s Egina deepwater, which catalyzed the development of an FPSO integration facility in Lagos. Collaborating the ES on the value of the project, the Managing Director of NLNG, Tony Attah in his remarks said that “It is also about the upstream development which is the real gas that will come to us. That also is a huge investment

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of $5 to $6 billion. So, potentially, the full value network is almost $12 billion.” Engr. Tony Attah noted that the Nigerian Content Plan for Train 7 contained clear and robust Local Content provisions that are significantly higher than the previous NLNG projects. “NCDMB and NLNG are fully aligned to collaborate during the operationalization of the plan. This synergy will ensure that value added opportunities for Nigeria are indeed maximized and the Train 7 project is delivered to meet international standards of quality and safety.” He also disclosed that NLNG shareholders are primed to take the Final Investment Decision (FID) for the project before the end of Quarter 4 2019. The MD further highlighted that the expected increase in the production capacity of LNG “will reinforce the company’s comparative and competitive advantage in the global LNG market while also increasing the country’s revenue and foreign investment profile. This is in addition to moving the nation’s economy from being oil-based to becoming a gas-based economy to be reckoned with globally. We are here to enable gas. Nigeria has ridden on the back of oil for more than 50 years, it is now time to fly on the wings

LOCAL CONTENT

Project 100 office hub to drive supplier development programmes - Wabote

he Executive Secretary, Nigerian Content Development and Monitoring Board, NCDMB Engr. Simbi Wabote, has said that the members of the recently inaugurated Project Management Office (PMO) of the Project 100 were carefully selected in view of the relevance of their functions in the delivery of the supplier development programs that will drive the growth of Nigerian oil service companies. The support the PMO will provide to beneficiaries include, non-financial interventions and financial linkages which will include policy interventions, access to market, capacity building, research development and business insight. The financial linkages include letters of recommendation to access intervention funds and highlighting collaborative opportunities between beneficiaries to enable them take on larger projects. Last January, the Minister of State, Petroleum Resources, Dr Emmanuel Ibe Kachikwu, had launched Project 100 to upscale small businesses in the oil and gas sector by empowering individuals and groups with relevant support and finance to boost their ideas. Sixty oil service companies who were successfully selected were also showcased at the event that held at the Petroleum Technology Development Fund (PTDF) headquarters in Abuja. The PMO members were drawn from the Ministry of Petroleum Resources; the Nigerian National Petroleum Corporation (NNPC) and Petroleum Technology Development Fund (PTDF), the NCDMB, with support from KPMG.

“As PMO members, your focus will include; managing the ongoing process and refinement of Project 100 strategy, managing the selection, acceleration and graduation process of Project 100 beneficiaries, and managing the implementation of initiatives for the various target beneficiaries. “Other assignments include developing fact based documentation of performance of Project 100 interventions and impact on local content and managing wide relationships and partnerships with public and private sector entities that support the delivery of Project 100 initiatives and interventions,” Wabote said According to him, the PMO members will also work assiduously to create a pool of high performing large scale enterprises that will impact positively on job creation, retention of industry spend within the Nigerian economy, development of skilled manpower, robust policies, and access to credible data. This, he explained, will be done by identifying the various areas of interest of the beneficiaries and provide them opportunities with the collaboration of the National Petroleum Investment Management Services (NAPIMS). “While we would engage in public tendering, we have to specially look for opportunities. We also need to engage Nigeria Liquefied Natural Gas (NLNG) and other organizations that carry out procurement outside the Nigerian Petroleum Exchange (NIPEX) System. Project 100 companies must be included in the bidders list of such organizations.” NCDMB secretary noted.

Also speaking at the inauguration, the general manager, research strategy and development of the NCDMB, Mr. Abdulmalik Halilu, said the concept of Project 100 was to identify and grow indigenous companies from small players to large enterprises, and also support such companies to grow their annual turnover from about N100 million to over N500 million, increase job creation and their local content level, train more manpower and acquire cutting edge technology. Halilu listed factors that determined the selection of the beneficiaries to their impact in the oil and gas sector; status of their registration on the Nigerian Oil and Gas Industry Joint Qualification System (NOGICJQS); compliance with Nigerian content; and their level of regulatory compliance; their ownership status, compelling business plans submitted by the companies and their baseline commitments. The Project Management Office will begin operation in March 2019 to engage beneficiaries to revalidate expectations and thereafter develop execution plans for targeted interventions. Halilu informed that from June 2019 to December 2020, the PMO would begin to implement targeted interventions. NCDMB research manager added that key performance indicators for Project 100 would include “percent increase in business, percentage increase in employment, percentage increase in local content level from contracts executed and percentage increase in personnel training and certification.”

ORIENT ENERGY REVIEW Vol.9 No. 02

LOCAL CONTENT

Project 100:

How we made it

fter successfully hosting the 2019 Nigerian International Petroleum Summit (NIPS), the Minister of State, Petroleum Resources, Dr Emmanuel Ibe Kachikwu, on January 31 launched Project 100. Designed to provide institutional and financial support to 100 Indigenous oil and gas service companies, the project targets indigenous companies offering seismic, marine, engineering and drilling services to provide financial and non-financial as well as technical support and access to the market for the beneficiary companies. At the launch of what has been described by industry players as a laudable initiative, the first set of the Project 100 beneficiaries – 60 oil service companies who were successfully selected got showcased at the event that held at the Petroleum Technology Development Fund (PTDF) headquarters in Abuja. In this report, Peace Obi chronicles few reactions from the Project 100 beneficiaries who spoke to OER at the project launch in Abuja. These beneficiary companies who expressed profound gratitude and amazement at the level of transparency the coordinators adopted in the process, called on stakeholders to take advantage of the initiative to improve their businesses.

No Intervention Whatsoever

For the only female-led establishment, that made the list, Zigma Nig Ltd, Mrs Funmi Ogbue, the excitement was contagious. She said, “I feel privileged. If you were present when the list was read, you would have heard that they had about 8000 companies in their database with 2,500 being active out of which 1221 companies were initially evaluated and then they selected only 60. “The honest truth is that we had no intervention. Initially, I thought it was a scam because I know some people in

NCDMB and no one mentioned anything to me. It was truly out of the blues. Continuing, Mrs Ogbue, added that “They told us of the evaluation steps and gave us a checklist of the documentation we needed to provide. However, we didn’t

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get any feedback. Next thing we got was a letter saying we have been selected. I felt very proud of all the hard work. This is a good initiative and platform. And if the government sees through this project, it would go a long way to encourage women’s

LOCAL CONTENT active participation in this industry.”

We didn’t Lobby for it

The Managing Director, Nowerox Nig Ltd, Mr Toni Ubiebor, whose company is into pipeline services and a couple of other maintenance and procurement services in the oil and gas industry, said that the seven-year-old company been selected for the project meant that they have done well. On what Nowerox did, he said, “One thing we do was to ensure our documentation are in order even with the NIPEX’ and every other stakeholder in the industry. Our major challenges before now have been finances and issues of partnership. “Not the less, we are fulfilled because this wasn’t lobbied for but gotten by merit. I feel happy because most of the MDs here are far older than I am. Most of my age group here are representing their companies but I came for myself. I believe this project will help tackle the challenges we have faced as a company. “With a project like this and the opportunity it offers, I am sure it will encourage other graduates and young Nigerians to do more. And with this selection, we will be able to employ more because it will expand our business and we will take more people out of the streets. It had been our dream to build up, create employment for Nigerians and at the same time reap the benefits of our efforts. “ He said.

Shocked to discover that we were shortlisted

According to the Managing Director, Nec Technical Systems Ltd, Mr Charles Emelu, whose services involve Corrosion Control in oil and gas industries, fabrication and construction, said “We also engage in pipeline activities like maintenance and sectional replacement. We build small-diameter pipelines.” On how Nec Technical made the list, he said, “We got a mail from NCDMB which looked like a scam to us. Initially, we doubted the source but when we checked well, we discovered that was genuine. So, I got my team engaged immediately to respond to it. They kept sending emails for some other things that were demanded. In the end, we were shocked to discover that we were shortlisted. Asked how the project 100 will impact

his business, Emelu explained, “I am passionate about creating employment for our teeming youths and to provide them with a stable means of livelihood. “So, with this initiative and our contact with the NCDMB, it would be a lot easier for us to penetrate the market, develop our capacity because we need to train our people. We need to also get into the market as when you have more jobs, you expand the portfolio of vacancies and employees you have.

Our excitement is that it was purely on merit For Saint Mube, CEO Skymark Energy

& Power Nigeria Limited, who barely knew about the NCDMB and its activities, stated, “Our contact with NCDMB was when LNG advertised for a supply job for their operations. Then we didn’t have local content compliance, so we went to NCDMB in order to meet up with the requirements for that project, that was how we got into the platform and that also gave us this opportunity. “On a particular day like that I saw an

invitation; it wasn’t Project 100, it was a call for application for intervention program by the Federal Ministry of Petroleum Resources in conjunction with NCDMB. Then, we followed all the procedures and answered all the questions and submitted before the deadline. And last year, we got a mail that our company has been selected out 1200 companies that presented. On how his company will utilize the opportunity, Mube reiterated, “First, this is a great opportunity for Skymark Energy and Power. We hope to develop on this and also create job opportunities for other people. The interesting thing about project 100 is that one gets selected without connections. So, It is an encouragement to others, especially young people. So what your message to the Ministry of Petroleum, NCDMB and KPMG? “This project is key, not only for oil and gas sector. As such, other sectors should come up with a similar project so that they can promote the country. Nigeria has diverse opportunities but people don’t really know how to key into these opportunities. However, this is a very good example for other sectors to follow. NCDMB with their partner, KPMG have done well as the process of selection was excellent. “Our excitement is that it was purely based on merit because we didn’t contact any person. That is a very good credit to the NCDMB,” CEO Skymark Energy & Power noted.

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POWER ROUNTABLE

Free prepaid meter: not free, not available Ngozi Egenuka

ven after the Credited Advance Payment for Metering Initiative (CAPMI) intervention programme where customers were made to self-finance meter acquisition was stopped by the Minister of Power, Works and Housing, Babatunde Fashola, selling of prepaid meter continues to remain a lucrative business. In a random survey conducted by Orient Energy Review, in a bid to know if these meters are free went about asking residents within Eko Electricity Distribution Company (EKEDC) region the process it took to acquire a prepaid meter, it was discov-

ered that the policy made by the Nigerian Electricity Regulatory Commission (NERC) that meters should be provided for customers free, is flat on its face. A caretaker in Ikeja, Debo Akinpelumi said it is more difficult to get a prepaid meter from EKEDC than IKEDC. He lamented that he had to give up on the process when he had waited more than six months without getting the meter. He noted that from his observations, it is easier to get the meter for a new building than an old building with an existing electricity plan. A resident of Alakija, Ojo Lagos, known simply as Mama Gold said the process of

getting the meter is fraudulent. Narrating her experience recently, as her building was trying to get the meter, Mama Gold said she

Nigeria’s Power Sector Loses N108bn Revenue In 3 Months

igeria’s power sector has lost N108.652 billion revenue between January and March due to various constraints, representing an increase of about N10.924 billion or 11.17 per cent from the revenue lost during the same period in 2018, according to the operational data obtained from the Office of the Vice President, Prof. Yemi Osinbajo. The statistics from the Advisory Power Team (APT) in Osinbajo’s office also stated that about 2,978 megawatts (MW) of electricity have not been able to get to the national grid within the period under consideration because of challenges of gas supply to generation companies (Gencos) as well as unavailability of transmission and distribution infrastructure. The report, however, explained that the average constrained megawatts was higher than the 2,597MW recorded during the same pe-

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riod in 2018, while average supply to the grid within the periods were 4,062MW for 2019 and 3,875MW for 2018. According to the report, 53,043 metric million standard cubic feet (mmscf) of gas has so far been supplied to Gencos for power production in 2019. This was also lower than the 54,480mmscf of gas that was sent to Gencos within the same period in 2018. Disclosing the activities of the sector on a daily basis in 2019, the report stated for instance that: “On March 09, 2019, average energy sent out was 4,181MW (down by 28.25MW from the previous day). 2,295.5MW was not generated due to unavailability of gas. 33.8MW was not generated due to unavailability of transmission infrastructure, while 1,226MW was not generated due to high frequency resulting from unavailability of distribution infrastructure.”

“The power sector lost an estimated N1,707,000,000 on March 09,2019 due to insufficient gas supply, distribution infrastructure and transmission infrastructure. “The dominant constraint on March 09, 2019 remained unavailability of gas – constraining a total of 2,295.5MW from being available on the grid. Estimated amount lost to insufficient gas supply, distribution, transmission and water reserves to date in 2019 – N100,106,000,000 (One hundred billion one hundred and six million naira only),” it added. Similarly, it was reported that: “On March 08, 2019, average energy sent out was 4,210MW (up by 31.33MW from the previous day). 2,472MW was not generated due to unavailability of gas. 33.8MW was not generated due to unavailability of transmission infrastructure, while 852.4MW was not generated due to high frequency resulting from unavailability of distribution infrastructure.

POWER ROUNTABLE was required to pay a certain amount to queue for the meter, when it gets to your turn, you pay a certain amount into the bank, then you are asked to wait for your turn before the meter gets to you. According to her, on one of such occasions, when she went to the office, they brought out 6 meters and told her to wait because there was already a long list of people expecting it before her, so it could take a very long time before it gets to her turn. “We decided we couldn’t wait that long so we saw an official in the office that told us if we could pay N120,000, he would get it fixed the next day, we gathered the money and paid but he ran away with the money and we have not seen him ever since,” she said Another respondent, Theresa Nneka, said in her process to get the meter, she was required to fill a form, after she had been given a

“The power sector lost an estimated N1,612,000,000 (One billion six hundred and twelve million naira) on March 08, 2019 due to insufficient gas supply, distribution infrastructure and transmission infrastructure. “The dominant constraint on March 08, 2019 remained unavailability of gas – constraining a total of 2,472MW from being available on the grid.” Also, it stated that the sector on March 10, had an average power output of 4,021MW, but could not generate 2,774.05MW due to unavailability of gas; 34.7MW due to unavailability of transmission infrastructure, and lost an estimated N1.348 billion. On March 11, it explained that 4,114MW was generated while 2,793.58MW; 176MW and 168.6MW were not due to gas supply, transmission and distribution challenges, with the revenue loss for the day estimated at N1.506 billion. For March 12, 4,442MW was generated but not 2,512.5MW; 31MW; and 440MW due to gas, transmission and distribution constraints. N1.432 billion was estimated to have been lost on that day to these constraints. The trend continued on March 13, when 4,438MW – down by 4.82MW, was generated and 1,818MW; 42.7MW and 1,497MW could

teller with the amount N26, 500 to pay into the bank. “After payment, one is expected to send the proof of payment via Whatsapp message or one goes to their office with it. “When payment had been confirmed, they will call the person to agree on a day to come to the house to inspect the location, in order to determine if persons resides within their jurisdiction, or not. “The arrangement would be in order to make provisions for a meter. You are required to buy the wire that would connect the meter to the pole, pay a token for installation and some other things needed for installation. You end up spending approximately 40, 000,” Nneka narrated Another respondent, Adeniyi Olatunji, said it was free when it was still new but now, one has to pay 20,000 for the meter and the same amount for installation. He said prepaid meter is not free, even though the government portrays it as that. He narrated that his friend paid N60,000, but was able to get a refund because she had a contact from the office.

not be generated due to gas, transmission and high frequency issues. Estimated loss for the day was N1.612 billion. “On March 14, 2019, average energy sent out was 4,141MWH/Hour (down by 296.63 MWH/Hour from the previous day). 1,776MW was not generated due to unavailability of gas.32.4MW was not generated due to unavailability of transmission infrastructure, while 863.5MW was not generated due to high frequency resulting from unavailability of distribution infrastructure. The power sector lost an estimated N1,283,000,000 on March 14, 2019 due to insufficient gas supply, distribution infrastructure and transmission infrastructure. “On March 15, 2019, average energy sent out was 4,427 MWH/Hour (up by 286.34 MWH/ Hour from the previous day). 1,797.52MW was not generated due to unavailability of gas. 32.6MW was not generated due to unavailability of transmission infrastructure, while 1,013.5MW was not generated due to high frequency resulting from unavailability of distribution infrastructure. The power sector lost an estimated N1,365,000,000 on March 15, 2019 due to insufficient gas supply, distribution infrastructure and transmission infrastructure,” added the statistics.

UNN Uses Organic Waste To Install 100KVA Refuse Driven Fuel On Campus

s part efforts to ensure stable power supply within the campus through other sources, the University of Nigeria Nsukka (UNN) has set the record of electricity generation by using organic waste to install 100KVA Refuse Driven Fuel (RDF) gasification plant for its Nsukka Campus. Prof Benjamin Ozumba, UNN Vice-Chancellor, who expressed happiness over the project during its inauguration, said the university would no longer be a customer to Enugu Electricity Distribution Company (EEDC). He said the project was first of its kind in Nigeria and described it as another feather added to the cap of the institution. “I am happy that the university under my watch has witnessed innovations and transformation, as today another feather has been added to the cap of my administration. “This is the first of its kind in the country, using waste to generate electricity. “By the time more of the plants are produced that will cover every part of the university, millions of naira will be saved every month, as UNN will longer pay monthly electricity bill to EEDC, ” he said. The VC also commended Prof Emenike Ejiogu-led research team that produced the RDF gas plant. In his remark, Ejiogu from the Department of Electrical Engineering applauded Ozumba on his belief of making record-breaking innovations to transform UNN. “The 100 KVA RDF project is designed and fabricated by the laboratory of industrial power devices and energy system under a special grant by Ozumba. “The aim is to enable UNN to generate its own electricity with organic waste that will serve as fuel,” he said. The Japan-trained engineer said his the research team was set to produce 250KVA plants, which will supply the energy need of the entire university and its environ. “UNN power demand now is 3mgwats, so with twelve 250KVA of RDF plants, we will meet electricity supply need of the university,” he said.

ORIENT ENERGY REVIEW Vol.9 No. 02

POWER ROUNTABLE

NAPTIN commences training of 600 TCN engineers

he National Power Training Institute of Nigeria (NAPTIN) has commenced the training of 600 engineers of the Transmission Company of Nigeria (TCN), under the joint collaboration between NAPTIN and TCN. The training of the TCN engineers is scheduled to hold simultaneously in Lagos, Kaduna and Kainji Dam in Niger State. The acting Director-General of NAPTIN, Ahmed Nagode, said the capacity building training of the Transmission Service Providers (TSP) staff of the TCN was put together to broaden their knowledge on effective service delivery. Nagode said that the institution had begun the first batch of 246 trainees in three locations in the country, adding that the programme would last for seven weeks. He said that the training was segmented into various key categories namely, transmission lines, design construction and maintenance, maintenance of transformers and power system protection. According to him, the training was carefully selected for TCN engineers to improve their knowledge and keep them abreast of modern technologies in the world. “We commend the management of TCN for the initiative to train their staff and for attaching importance to capacity building of staff.” Nagode urged the trainees to make the best use of the opportunity by ensuring that they achieved the objectives of the train-

ing, adding that it would make them better industry players and also guarantee their safety at work. According to him, under the collaboration, NAPTIN will train 600 staff of power utilities in the country. Nagode said the initiative would lead to enhancement of the capacity and competence of the manpower in the maintenance of the facilities and improvements in service delivery, as the collaboration is to train 600. Nagode who reaffirmed their commitment in training young Nigerians who wants to pursue careers in the power sector,

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disclosed the institutes plans to get its International Standards Organising (ISO) certification, to boost its operations in country. Urging workers on transparency, Mohammed disclosed “We have gotten an approval to recruit about 200 young electrical engineers and 45 linesmen, which means five per region, to boost out production. We are also working to ensure workers are paid like the private sector and we are also planning to buy two helicopters for effective surveillance and working operations,’’ he added.

SPECIALREPORTS

OPEC at 60 reminisces on scribe, the Maadi Pact …Says its market stabilization eﬀorts for the benefits of all Chibisi Ohakah, Abuja

his April, the Organisation Petroleum Exporting Countries (OPEC) celebrated the 60-year anniversary of first-ever Arab Petroleum Congress, which attracted industry experts from across the region. The historic meeting that took place in Cairo and literally had transformative repercussions for the re-

gion, the industry and the world. Reminiscing on the April 16 to 23, 1959 event at the Egypt Petroleum Show in Cairo last February, OPEC Secretary, Mohammad Sanusi Barkindo said it is important to be conscious of the nature of the oil industry at that time. “This preceded the UN General Assembly adopting resolution 1803 on “Permanent Sovereignty over Natural Resources” on the 14th December 1962. According to him, at that time, the industry was dominated by a handful of western oil majors, who controlled all

aspects of the supply chain, with minimal involvement by the host countries. Developing nations that were home to such resources did not have a modicum of participation in decisions that profoundly affected our countries. In attendance at the Arab Petroleum Congress were two kindred spirits who felt that the situation needed to be reconsidered, the OPEC scribe stated. Venezuela’s Juan Pablo Pérez Alfonzo was in Cairo to drum-up support for his idea of a production and stabilization arrangement among oil-producing countries, while Ab-

Reminiscing on the April 16 to 23, 1959 event at the Egypt Petroleum Show in Cairo last February, OPEC Secretary, Mohammad Sanusi Barkindo said it is important to be conscious of the nature of the oil industry at that time. “This preceded the UN General Assembly adopting resolution 1803 on “Permanent Sovereignty over Natural Resources” on the 14th December 1962. Opec secretary general Mohammed Barkindo ORIENT ENERGY REVIEW Vol.9 No. 02

SPECIALREPORTS

The momentum generated at the Cairo meeting eventually created the foundation for OPEC in Baghdad on 14 September 1960 by the five founding fathers of the Organization, namely, al-Tariki; Perez Alfonzo; Fuad Rouhani of Iran; Dr. Tala’at alShaibani of Iraq; and Ahmed Sayed Omar of Kuwait.

dullah al-Tariki of Saudi Arabia wanted to form a committee of oil-producing countries that could meet periodically to discuss mutual problems and challenges, and develop unified policies. The two men agreed to widen their discussions and together with representatives from Iran, Kuwait and Iraq, they met towards the end of the conference at the Maadi Yacht Club. There the ‘Gentlemen’s Agreement’ of Maadi was forged, which encouraged the signatories’ governments to establish a formal consultation commission as a means of countering the arbitrary decisions of oil companies and sought to secure better concession terms for oil-producing countries. The momentum generated at the Cairo meeting eventually created the foundation for OPEC in Baghdad on 14 September 1960 by the five founding fathers of the Organization, namely, al-Tariki; Perez Alfonzo; Fuad Rouhani of Iran; Dr. Tala’at al-Shaibani of Iraq; and Ahmed Sayed Omar of Kuwait. He said OPEC will always remember the debt owed to Egypt for the role it played in facilitating the birth of our organization. Aside from incubating our OPEC, Egypt has been a regular attendee and supporter at OPEC meetings since the 1980s and has consistently heeded OPEC’s call for all stakeholders to work together to surmount common challenges. Moreover, Cairo hosted the 133rd (Extraordinary) Meeting of the OPEC Conference on 10 December 2004.

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The organization’s creation also defied the majors, who were under the control of the established powers at that time. In those six decades since the Maadi Pact, the world has seen profound changes and OPEC has confronted many challenges: the energy crisis of the 1970s; the oil glut of the 1980s; the Asian financial crisis of the 1990s; the Great Recession of the late 2000s, following the global financial crisis; geopolitical tensions; war between two founding members of the organization; the invasion of a founding member; natural catastrophes; sudden shifts in market fundamentals – to put it mildly, it’s been an eventful journey! Despite all of the obstacles, not only has OPEC survived, it continues to flourish. “It is perhaps apt to ask the question: what would the world have been without OPEC?”, Sanusi Barkindo asked, pointing out that time after time OPEC has taken a proactive stance at times of supply shortfalls, geopolitical turmoil and financial crises. He reiterated that on occasions OPEC has helped rescue the global economy and that there is no doubt that the formation of OPEC, and its continued existence, has been beneficial to both producers and consumers, oil companies, and the global industry at large. One of the clearest manifestations of OPEC’s durability has been the response to the severe market downturn 2014-2016; one of the worst downturns in the industry’s history. OPEC’s response to the impending catastrophe of epoch-defining proportions

SPECIALREPORTS

was to forge an alliance with 10 non-OPEC producers to create the historic ‘Declaration of Cooperation,’ signed on 10 December 2016. Twenty four oil-producing countries came together voluntarily to take concerted action to work to bring sustainable stability to our oil market. Participating countries developed effective monitoring mechanisms: the Joint Ministerial Monitoring Committee, supported by its Joint Technical Committee and the OPEC Secretariat. It was the openness of this scale which allowed the market to recover and make a meaningful contribution to the synchronous global economic upsurge witnessed in 2017-18. As was the case with the foundation of OPEC, the ‘Declaration of Cooperation’ was initially met with scepticism upon its formation. The cynics have been proven wrong. The ‘Declaration of Cooperation’ has evolved into a permanent feature of the energy landscape. This has been for the benefit of producers, consumers, and, unquestionably, the global economy, as this extraordinary group of producing countries has spared no effort in contributing to market stability. At the 175th OPEC Conference and the 5th OPEC and non-OPEC Ministerial Meeting on the 6th and 7th December 2018, there was an initial endorsement of a draft ‘charter’ which would provide a framework for our future work. Indeed next week in Vienna, a further meeting will take place to discuss this ‘Charter of

Cooperation.’ Particularly important in reducing the downside supply risk in the oil market has been the proactive and early output adjustments by the ‘Declaration of Cooperation’ partners. As a result, the OECD stock overhang is targeted to reign in towards the latest five-year average. However, geopolitical tensions, the impact of sanctions, the fact that the risk of a recession has not completely abated these factors could continue to impact the market throughout 2019. The key to OPEC’s longevity lies in the fact that at its core, OPEC has a clear and simple objective. This objective serves producers as much as it does consumers. And this objective has a vast array of multiplier effects. This objective, this raison d’être, can be surmised in just 4 words: sustainable oil market stability. “OPEC does not seek stability for stability’s sake: rather we are acutely conscious of the broader social and economic benefits for all which come as a result of sustainable oil market stability. The clarity of our goal has sustained us in good times and bad. “It is the vision which guided Juan Pablo Perez Alfonso, Abdullah al-Tariki, Fuad Rouhani, Tala’at al-Shaibani and Ahmed Sayed Omar nearly 60 years ago. It inspires our member countries, countries participating in the ‘Declaration of Cooperation’, our entire staff and indeed, everyone who is a member of the OPEC family,” Barkindo said

OPEC does not seek stability for stability’s sake: rather we are acutely conscious of the broader social and economic benefits for all which come as a result of sustainable oil market stability. The clarity of our goal has sustained us in good times and bad.

ORIENT ENERGY REVIEW Vol.9 No. 02

INTERVIEW

‘With Oilserv capacity, Nigeria won’t miss EPCIC opportunities in Africa’ Oilserv is an indigenous engineering, procurement, construction, installation and commissioning (EPCIC) company. Its 22 years of existence has been transformational, growing from carrying out sectional maintenance and repair work on pipelines to being an operator in the EPCIC space where it has left a huge footprint in providing services for pipelines, facilities for both oil and gas and other clients. In this interview, the Oilserv Managing Director, Mr Adegbite Falade said his company’s mission is to produce competencies that will enable Nigeria not to lose engineering, procurement, construction, installation & commissioning (contract) opportunities on the account of capacity. Could you please outline for our readers the scope of the business of Oilserv? Are there new projects you are currently working on? Oilserv is an engineering, procurement, construction, installation and commissioning company (EPCIC). So, we are operating in the EPCIC space. That means we take turnkey projects from cradle to grave. We do that basically for pipelines and facilities for both oil and gas and for some other

clients in related fields. We have got a huge footprint of doing that for clients that span the international oil companies, joint venture companies, downstream companies, NNPC and its subsidiaries. Presently, we have an ongoing project where we are at the verge of completing the biggest diameter inch gas pipeline in Nigeria. It is one of the strategic gas pipeline systems under the Nigerian Gas Master

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Plan, called the OB3 Pipeline. This pipeline was awarded to two contractors. We are in the North B and our responsibility covers the deployment of 65 kilometres in the 48-inch gas pipeline including surface facilities and a gas treatment plant to handle 2 PCF of gas per day, which is at the final stage. At the same time, we also carry outflow line replacement pipeline project for upstream companies;

OIL&GAS

We are a Nigerian company not because our footprint is in Nigeria; it is because we are powered by Nigerians in all the technical disciplines. We have been able to achieve quite a number of firsts in terms of technology deployment that have stood us out.

maintenance, leak and sectional repairs for Nigerian Liquefied Natural Gas (NLNG) Oilserv has just been awarded the North A of segment 1 of the Ajaokuta Kaduna Kano (Akk) pipeline which is the second of the Nigerian gas strategic pipeline. The entire length of Akk is about 614 km of which our own, Segment 1, is about 303 km, comprising of 303 km linear length of 40 inches and a number of surface facilities. This has not started; hopefully, before the end of this year. At the moment, we are starting off with the detailed engineering design while we continue to raise the capital needed for the project. Do you have specialities or is your company multifaceted? We work with two sister companies in the Oilserv group. The first is Frazimex; it is an engineering design company. They handle everything from concept engineering to front-end engineering design to detail engineering design. I put it on record that Frazimex is the one that designed the entire OB3 gas pipeline which was now executed by both us and another company handling the north A. Frazimex is also go-

ing to handle that same brief for the same 303km stretch of the Akk gas pipeline. We are a Nigerian company not because our footprint is in Nigeria; it is because we are powered by Nigerians in all the technical disciplines. We have been able to achieve quite a number of firsts in terms of technology deployment that have stood us out. We have been able to transform over the last 22 years from a company that was doing sectional maintenance and repair work on pipelines to a company that is EPC and undertaking projects that are of significant scale in terms of capital. We have a number of other projects in our opportunity funnel that we are nurturing at the moment. What do you have as your organizational goals? Our intention is to be that contractor of choice that the industry goes to when the industry is looking for the construction and deployment of gas pipeline, oil pipeline and associated infrastructure of worldclass standard and of value for money in terms of justifying what premium has to be paid to get that done. We believe we are right there at the

moment. So for us, it’s about doing more of that and contributing our own quota to the development of local capacity, human capacity and being proud to say we are part of the infrastructure deployment to solve domestication of gas in Nigeria. To help our clients to evacuate their products whether it is oil and gas, make commercial sense out of it. We have regional aspirations; we have footprint and prospects we are nurturing in the West African sub-region, in Ghana, Cote d’Ivoire, even going as far as Uganda. They are still very much at the infant stage. It could take about five years before you are able to take a prospect to a real opportunity. Oilserv’s projects are often huge, how have coped with financing? We have been around for more than 22 years. So, it has taken a combination of retaining profit and capital from initial projects, finding financiers who believe in our track record and who are willing to finance us. We’ve done a lot of re-investment in local capacity. Today, we own 100% of the equipment we use. We have invested significantly in heavy-duty equipment, excavators, pipe layers, cranes and the likes. We have a well established operational land and jetty operational base. Because we take a long term view of our existence, we are happy to continue to roll over whatever margin we made and keep investing it in developing local capacity. At the peak of our operations, we had over a thousand Nigerians working for us. We have developed in capacity over time and then it becomes easier with the capacity you have developed and the assets you own for financiers to take you seriously. How has NOGICD Act impacted your business as a Nigerian company? We have reasons to thank God. Where we are today used to be the exclusive preserve of the IOCs. In the past, if you’re going to talk about building 40 to 48-inch gas pipeline, you’ll be looking in the direction of the Wilbros, the Daewos, and the Saipems of this world. But with the intensity and the application of the NOGICD Act, we now have space at the table to participate. And when we have won and proven ourselves that becomes a calling card for the subsequent tenders. It must be emphasised that the NOG-

ORIENT ENERGY REVIEW Vol.9 No. 02

INTERVIEW

ICD Act gave indigenous companies like us the opportunity to be heard, to be able to raise our hands and say ‘I can do it!’ It is a strong boost for indigenous companies that are willing to get into the service space in the oil and gas industry. What do you think is the major challenge to the full implementation of NOGICD Act in Nigeria? Improvements will come as we continue to deepen the awareness. Although the Act has been around for a while now, not everybody in the industry is fully aware of its provisions. So, we need more enlightenment and education. We need to keep the perception of this Act from that of punishment to that of support and assistance. Such that makes everybody feel that ‘we are all part and parcel of this initiative’, whether the regulator or players like ourselves or the IOCs that are giving us the opportunity to tender. We must find a constructive way to help people move away from violation to such a point that each and every one of us become the Apostle of the intent and principles of Local Content Law. What does the future hold for Oilserv? Success is a function of your readiness and the opportunity that presents itself. We want to be sure that when the opportunity will show up, whether it is next year, five or ten years or, we are ready. That we will not give Nigerians the opportunity to say that there is no competent or capable Nigerian to undertake this opportunity. That is our vision; that is our mission. Your CEO talked about having Oilserv footprint in Uganda, are you faced with such challenges that the call for collaboration among African sub-region should address? Yes we are, and everybody is having it. The barriers and challenges are not often technical in nature, they are soft issues. They are issues about culture, preferences and styles and it takes time to understand those nuances and to be able to conform. So, if you are going to do business in a different country and you don’t truly understand their culture, the nuances of their own legislation; you could for instance,

take their legislation, transcribe into English language and read, meanwhile, it means something completely different from the intent that it was drafted for in their own language. Again, your country of destination must be ready to reciprocate and give you the opportunity. There are some companies or countries that won’t oblige until you give certain jobs to non-African expatriates because they don’t believe you can do a great job. Even here in Nigeria, it took a while for tenderers of the job to get comfortable with Nigerian companies. So, let’s show a bit understanding to our fellow African countries that it will take some time to build that level of confidence where they can feel that this Nigerian-base company, is capable of delivering the same standard

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and quality job. What is your take on the call for collaboration among African countries in harnessing their hydrocarbon resources? Let’s find out how we can support in closing skills gap, realising that such efforts are an investment for the future. In the long term, we cannot run away from our continent, even when we don’t find certain situations unpalatable, we are here to stay. Some other persons who have come here purely for financial reasons, at the slightest blast of an issue, are ready to carry their bag to run away. We have nowhere to run to, so let’s see it as a deliberate building of capacity for the long term sustainability of our own economy, the growth of our people and the development of capacity for Africans.

OIL&GAS

Group harps on need for urgent passage of PIGB Pita Ochai

he Nigeria Natural Resource Chartered (NNRC) has raised the need for urgent passage of the Petroleum Industry Governance Bill (PIGB). The NNRC is a global initiative designed to help governments and societies effectively harness the opportunities created by natural resources. The organisation described the PIGB as a platform that will ensure reforms in the nation’s oil and gas industry. It said the PIGB has set out the foundations that will ensure optimum management (perform and drive growth) of Nigeria’s petroleum resources. “The Bill has satisfactorily defined the governance and institutional frameworks necessary to put the country in line with contemporary global and industry trends, and expedient passage of the bill and purposeful implementation will be key to the turnaround aspirations of the reforms in the oil and gas industry,” said the NNRC programme coordinator, Tengi Goerge-Okoli. She said the PIGB will create efficient and effective governing institutions, clarify and separate roles and accountabilities, which means the restructuring of the industry to assure clarity, efficiency and effectiveness. To her, one of the objectives of the PIGB is the establishment of a framework for the creation of commercially oriented and profit-driven petroleum entities, which will lead to the restructuring of the NNPC to ensure delivery of profits on a sustainable basis. She further stated that PIGB will promote transparency and accountability, which will strengthen governance by legislating processes and controls, promotion of systems that minimize corruptive behaviours and actions, and enforce consequences. It will also create a conducive business environment for petroleum industry operations by establishing structures, systems and processes that promote ease of doing business in the sector. The NNRC Benchmarking Exercise Report (BER) 2017 assessed the operational activities in the nation’s oil and gas sector between 2015 and 2017 against the Natural

Buhari Resource Charter. The exercise unveiled the true state of oil resource extraction, governance, and transparency among others based on a set of underlying economic principles in line with international best practices. One of the precepts assessed is on State Owned Enterprises (SOE) with Nigeria National Petroleum Corporation (NNPC) as a case study. Although the report recognized mild positive changes in the NNPC, it scored the corporation low on the aggregate in the focus period. It concludes that Nigeria is not getting the most from the nation’s oil and gas firm on many fronts and suggests a reform that gravitates the corporation towards a commercially-driven and globally-competitive entity. This brief provides actionable policy recommendations that can enhance the operational and financial competitiveness of NNPC, especially in response to the challenges identified in the 2017 BER. The body recommended that the NNPC’s corporate governance structure has to

limit political interference in technical decision-making while allowing for effective oversight. It said in its 2017 BER, which relates to the high level of political interference in the affairs of the corporation, that incessant political meddling is observed in the recruitment into top hierarchy positions of the corporation. This is detrimental to policy consistency and stability in the corporation as well as limiting to the effective operation of the board of directors. The body also said that at the heart of the corporation’s effectiveness lies its struggle to key into commercially-effective principles in its operations. The corporation’s commercial and non-commercial functions are not well aligned and, in most cases, conflicting with each other. For example, part of the non-commercial roles discharged by the NNPC is to ensure regular supply of refined petroleum products irrespective of the prevailing economic conditions. This quasi-fiscal activity distorts market incentives and hampers its profitability and commercial viability – part of the explanation for the serial operational losses in the corporation. The Petroleum Industry Governance Bill (PIGB) is just a fraction of a more comprehensive Petroleum Industry Bill (PIB). The PIGB was first proposed some 17 years ago by stakeholders in the oil and gas sector, as an answer to the massive corruption and theft that has confronted every administration since the 1960s. On Thursday, May 25, 2017, the Bukola Saraki-led Senate broke a 17-year jinx by passing the Petroleum Industry Governance Bill (PIGB) into law. The bill was passed after a clause-by-clause consideration and amendment of the report by the Senate. Weeks later, the House of Representatives passed its own version. On March 28, 2018, the PIGB was harmonised and passed by the Senate and the House of Representatives. On July 3, 2018, the PIGB arrived Aso Rock for President Buhari’s assent. But the bill is yet to be assented to by the President

ORIENT ENERGY REVIEW Vol.9 No. 02

MARITIME

Stakeholders proffer solutions on effective utilisation of Eastern ports ...call for an integrated Master Plan for the transport sector Elizabeth Uwandu

takeholders at strategic group meeting organized by the Nigerian Chambers of Shipping in Lagos have called for the revitalization of the Eastern ports to reduce the over-concentration of maritime activities in the South West and diversify the economy. They argued that the near non-functionality of the ports is a reflection of challenges in the marine sector. Tagged, “The Economies of the Eastern Ports,” the stakeholders stated that to maximize the economies of the Eastern Ports requires Port Master Plan. It also noted that in addition to the preparation of the Port master plan, is the need for a holistic, integrated approach to the issues, particularly security, container management, ports infrastructure, geographical area of the ports, the relationship between the public and the private sector in maritime activities and the financing requirements. All these must be derivable from a comprehensive transport policy and its resultant

shipping policy, the forum noted. The President, Nigeria Chamber of Shipping, Mr Andy Isichie, said the under-utilisation of the eastern ports has taken a toll on the nation’s economy. According to him, the strategy group meeting is meant to garner Nigeria government commitment to make things work properly. “We gather key stakeholders in the industry to chart the way forward that will see challenges facing the Eastern Ports from functioning being discussed; make recommendations and put all in a draft for necessary steps. “This is because the challenges of the Eastern Ports reflect the challenges of the Nigerian maritime sector as a whole and thus addressing the issue requires an integrated, holistic, and all-inclusive approach in addressing the Nigerian maritime sector,” NCS president said. The meeting recorded the presence of Nigerian Ports Authority (NPA), managing director, Hadiza Bala-Usman, Capt. Iheanacho Ebubeogu; and Admiral Dele Joseph Ezeoba, Nigeria’s 20th Chief of Naval, Mrs Foluke Akinmoladun, managing

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solicitor, Trizon Law Chambers Joshua Babade, Associate, Trizon Law Chambers. The stakeholders posited that the Eastern Ports of Nigeria are currently experiencing a high level of sub-optimal utilization and there is a need to address this issue in the light of the current government policy drive on the diversification of the Nigerian economy. Stressing that the Eastern Ports lack security, which needs to be addressed from four levels namely – social, economic, environmental, physical security challenges, it was noted that this has made it difficult to adequately plan, implement and address the issue in the Nigerian maritime sector particularly the ports, their usages, the ports area infrastructure, multimodal activities around the ports amongst others. Speaking further, the stakeholders called for a comprehensive shipping policy for Nigeria, stressing that ports security needs a holistic, integrated and multilevel approach that starts with an all-inclusive analysis of the issues that lead up to Nige-

MARITIME identified 33 checkpoints to ensure adequate maritime domain security, however, only nine are being adequately manned. The Navy also needs the support of necessary stakeholders as far as security in the Eastern port areas is concerned. Isichei said the Nigerian Chambers of Shipping is committing to giving positive feedback at the next meeting as it ensures that it works with relevant stakeholders in addressing the issues raised at this particular Strategy Group Meeting.

Onne Port is located at Along Bonny Estuary on Ogu Creek, Onne, Rivers ria’s maritime security. According to them, the acceleration of the development of deep sea ports and its attendant infrastructural facilities will significantly increase the economic benefit of the Nigerian Maritime sector. Adding that the ports should be automated to reduce the issues of corruption and gridlocks at the major Nigerian Ports. This is in addition to managing containerized transportation that has become the order of the day in maritime cargo logistics and transportation. On the development of the Eastern Ports, the forum said it would require increasing the awareness of the existence of these ports. These include educating the communities on international shipping best practices and also educating the shipping communities to enable them to have a better understanding with host communities Adding that the increased usage of

the Eastern Ports will increase traffic of business and in turn significantly increase the economies of scale in the ports and as well boost the local economy around the port area. Continuing, the stakeholders said that in addressing the security issues around the Eastern Ports, economic integration through poverty alleviation initiatives along with training and development of human capital in these areas will reduce the community interference on the government right of way and outside these ports. “Government policies can help ensure that the Eastern Ports are well utilized. There is a need for the political will for this to happen. Policies such as the use of the Onne port for oil and gas activities shows that the government can make any port in Nigeria increasingly functional and utilized.” It was said that the Nigerian Navy has

Government policies can help ensure that the Eastern Ports are well utilized. There is a need for the political will for this to happen. Policies such as the use of the Onne port for oil and gas activities shows that the government can make any port in Nigeria increasingly functional and utilized.”

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COVER

Africa Better with Regional Collaboration

ndeed, in the last two decades, the African sub-region has witnessed a rapid spread of hydrocarbon discoveries, thus presenting the sub-region with a new energy map, as well as huge and exciting opportunities. Intrinsically, these discoveries are expected to usher the region into a new phase of economic prosperity and development. Ironically, the continent’s huge resource is yet to meet the expectation of lifting Africa out of her abysmal economic growth. Major setback to African Development While such issues as corruption, poor governance and mismanagement of resources by African leaders are considered as the bane of the continent, the failure

of the oil-rich countries to collaborate in needed areas is also considered a potent factor slowing the pace of development in the African region. It is believed that the individualistic approach by the oil-rich countries in harnessing their resources remain inimical to the continent’s strive for sustainable development, hence the call for Africa’s collaboration at different fora. Findings by Orient Energy Review magazine has suggested that the sustained demand for African oil-rich countries to integrate, innovate and collaborate their efforts and resources suggest the orbit on which the effort to blur existing boundaries, promote interdependencies among players in the African oil and gas industry revolves around strong regional

It is believed that the individualistic approach by the oil-rich countries in harnessing their resources remain inimical to the continent’s strive for sustainable development, hence the call for Africa’s collaboration at different fora.

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COVER

collaboration. It is believed that the call for collaboration will among others lead to the sharing of knowledge, infrastructure, risks and responsibilities, business development, poverty alleviation, among others.

The Reverberating Call for Africa’s Collaboration

The call for Africa’s collaboration, especially amongst her oil-producing states resonates during major stakeholders’ meetings and conferences. From the first major convergence of Oil and Gas (O&G) industry players in the West African Sub-region – WAIPEC in Lagos, Nigeria; NIPS in Abuja, Nigeria; Annual Ghana Summit; Angola Oil and Gas Conference, African APPO Cape VII Conference and Exhibition to Africa Oil Week in South Africa, the call for collaboration consistently reverberates. One of the advocates for regional

collaboration and integration is President Muhammad Buhari. Speaking during 2019 International Petroleum Summit (IPS) in Abuja, President Buhari harped on the need for Africa to pursue a common solution in harnessing the continent’s hydrocarbon resources. Calling for effective collaboration among African nations, the President noted that it would enable countries to jointly develop mega energy infrastructures like refineries, gas turbines and pipelines and create employment opportunities for their citizenry.

Time to Cross the Rubicon

Stressing on the timeliness of the 2019 IPS theme, “Africa on the Global Stage: International Collaboration, Opportunities and the Future”, the President who represented by the minister of state for petroleum resources, Dr Emmanuel Ibe Kachikwu, commended African countries

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for working collaboratively under the aegis of the African Petroleum Producers Organisation [APPO], noting that the relationship amongst the oil-producing nations would enable the movement of specialised skills set and investors across member-states. He remarked that the role of the African Energy Investment Corporation, a body under APPO, has been expanded to mobilise about $2 billion needed to finance identified joint infrastructure. In his words, “The time for Africa has come. The realities have dawned on us as soonest unless we protect our border posts and begin to look more at financing that we can find locally to develop the key infrastructure we need in this sector, we would have lost a huge opportunity,” President Buhari said. Buhari added that it was time African countries stopped operating in silos and building individual facilities with their

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“This year again, the organisers are actively chasing us to enhance that platform. So, these are the steps we are taking to actualize that dream. “Ultimately, it will reduce the cost for them that are supposed to go into Europe, China to look for those capacities.

needs in the African collaboration strategies. “We are really trying to lead in the African collaboration in the oil and gas sector. We started by looking at sub-Saharan Africa first, like some months back, Petroleum Technology Association of Nigeria (PETAN) organised the West African International Petroleum Exhibition and Conference (WAIPEC) in Lagos, where about seven leaders of the oil and gas sector came together in order for African countries to start the discussion; to showcase our various opportunities, our various capabilities, so that we can learn from each other and access opportunities where they are available,” Wabote said. He noted that discussions at major African O&G events in recent times have been on collaboration. “So, we have started the process. While we were at the Africa Oil Week in Cape Town, South Africa, we also took the centre stage, discussing the collaboration of Africa in terms of harnessing our oil and gas resource which was a huge success. “This year again, the organisers are actively chasing us to enhance that platform. So, these are the steps we are taking to actualize that dream. “Ultimately, it will reduce the cost for them that are supposed to go into Europe, China to look for those capacities. And speaking on the barriers, the ES said that they are being addressed at various levels. “At ECOWAS level, AU level and policy level

limited resources, he said, “If we cross the Rubicon and extend hands of infrastructural relationships across Africa, we can build joint pipelines, plants and refineries. We need to protect the African market. That way, we would have taken a huge step not only to develop Africa but also the stabilisation of independent African countries.”

Collaborative Efforts to Bolster Regional Economy, its Barriers

Also speaking on the subject, the Executive Director, Nigerian Content Development and Monitoring Board (NCDMB), Engr. Simbi Wabote said that different efforts and cross-border programmes aimed at tackling the issue of African collaboration are already in place. He said that the African Union (AU), ECOWAS, New Partnership for Africa’s Development (NEPAD), and the establishment of the African Development Bank (AfDB), among others, was to serve some specific

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We need to build enough entrepreneurial capacity in Africa. African continent needs about 100 Dangotes and Tony Elumelus. Our priority should be to eliminate poverty while preserving our environment. Africa is under-explored with a huge hydrocarbon potential and a readily available market. The continent has the opportunity to use its oil and gas reserves to boost its economic and social development

of government and many others, those issues are being discussed in order to take away those barriers and foster free movement of people and goods. I am sure that today, you see that you can travel to most African countries without a visa. You get a visa on arrival. So, these are measures with which they are using gradually to address those issues, Wabote said.

Time to Pursue a Common Economic Interest

In his submission, the Chairman, Petro-

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leum Technology Association of Nigerian, Mr Bank-Anthony Okorafor said that Africa should vigorously pursue collaboration, especially within the O&G industry. According to Okorafor, it is an essential step African continent needs to undertake to effectively deal with the various socio-economic challenges the continent is confronted with. Leaning on the strength of some statistics, PETAN chief said that Africa has huge resource base - 128 billion barrels or 7.5% of world proven oil reserve, 503.3 Tcf (86.8 billion BoE) or 7.6% of worldâ&#x20AC;&#x2122;s proven gas reserves and 26 Billion barrels (Libya 5th globally) of Shale oil. Algeria Shale gas potential 3rd globally 707 Tcf or 121.9 billion BoE. The continentâ&#x20AC;&#x2122;s oil and gas resource is estimated to increase by 74% by 2050. â&#x20AC;&#x153;We need to collaborate, learn, and establish common economic interest. If common economic interest is not created, we are wasting our time, Okorafor posited. Access to Power, the Starting Point of Collaboration Okorafor opined that the continent should establish a strong ally amongst themselves at different levels to ensure that a greater percentage of the people have access to power. Stressing that the present

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situation in the continent where a good number of people are neither connected to the on-grid or off-grid source of power correlates to poverty. He said, “We need to build enough entrepreneurial capacity in Africa. African continent needs about 100 Dangotes and Tony Elumelus. Our priority should be to eliminate poverty while preserving our environment. Africa is under-explored with a huge hydrocarbon potential and a readily available market. The continent has the opportunity to use its oil and gas reserves to boost its economic and social development,” Okorafor said.

Global Perception, Hard facts and Need for Regional Collaboration

Because of the complex issues involved in regional collaboration, governments would need to work with different sectors of the economy to achieve the needed result. Meanwhile, the PETAN chief has enumerated some of the hard facts why Africa needs to assiduously seek for collaboration and said, “Oil & gas in Africa has not alleviated poverty; common economic interest not seen; key economic opportunities that will drive collaboration not identified yet; 620 million people in sub-Saharan Africa living without access to electricity; lack of infrastructure and connectivity to connect

the population; logistics is not easy; Key government agencies are not connecting; practitioners in the industry are not connecting; common fiscal policy & regulation – customs duties & tax not in place; interstate commerce not in the picture yet. Continuing he said, “We do not know much about the oil industry in other countries; ECOWAS and AU are not challenged to be a platform for regional collaboration; Most cars will run on electric by 2030; legislature in Europe for cars to run on electric underway; technology not domiciled in Africa. As long as we continue to purchase technology from outside, it is still going to be difficult.; No academic collaboration within Africa around critical research topics.; LNG exports from Nigeria, Algeria, Egypt and Equatorial Guinea was 1.61 Tcf, 13.1% of global in 2016; Refining capacity as % of global 2.6% or 2.1 million bbl/day; LNG operating capacity in 2016 51%, rest of world 82%; gas pipeline exports were 45.6bcm and consumption 13.3 Bcf per day; Africa accounts for 25% of Europe’s total imports, 20% of China’s total imports and 20% of US total imports (oil & Gas);

“We need to build enough entrepreneurial capacity in Africa. African continent needs about 100 Dangotes and Tony Elumelus. Our priority should be to eliminate poverty while preserving our environment. Africa is under-explored with a huge hydrocarbon potential and a readily available market. The continent has the opportunity to use its oil and gas reserves to boost its economic and social development,

The Benefits and Need for a Changed Approach

Speaking on the benefits of collaboration amongst African countries, he said that collaboration will open up lots of networking opportunities in the entire oil and gas value chain. “Share ideas and learn from each other on best practices to move the industry forward and also how to survive in the present competitive landscape,” Okorafor said. Again, national content expert, Uganda National Oil Company, Mrs Jessica Kyeyune said that the major barrier to effective collaboration amongst African countries is the penchant for countries to operate in silos with infrastructure and facilities singlehandedly owned. According to Kyeyune, this problem also permeates the management of local content plans and policies even among new entrant into oil exploration and production in Africa. “I think the biggest challenge is that we like operating in silos such that each of the African countries has her own local content plans.” She said that a situation where a country insists that every project must be handled

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COVER by the local people alone was unnecessary, stressing that the unwillingness to leverage the huge experience a company or someone from a country like Nigeria can bring in a project is a major setback. Adding that where companies from within the region are considered, they are forced to enter into a partnership with an indigenous company and then transfer the skills. Speaking on the way forward, she said it was high time the countries domiciled and harmonised their local content policies and adopt a standard format for its operation. “Without harmonizing our policies, we cannot make African countries work together,” Kyeyune warned.

Need to Leverage Emerging Technologies

According to a partner/data & analytics leader, PricewaterhouseCoopers, Mr Femi Osinubi, while Advanced economies have continued to adopt new technologies in achieving efficiency, reduced cost of production and ultimately achieving excellent results, the same cannot be said of emerging economies. “Most of their current mode of operation requires expensive, bulky and slow technologies in addition to specialized skills and equipment. Hence, the operations are very expensive and risky due to inaccessible and hostile environments in the industry.” He said that ETs such as robotics and automation, Artificial Intelligence, IoT, analytics, and other hardware and software tools and technologies have in recent times found inroads in a variety of the oil and gas production and processes. However, he noted that emerging economies are on the back foot of adoption. “Emerging Technologies in the oil, gas, and petrochemical industry provide a wide range of benefits such as the use of unmanned vehicles, whether airborne, ground or underwater with unimaginable capabilities to human capabilities. The use of these automated equipment reduces human interaction and costs while improving the safety and operational efficiency.” Calling on African oil-rich countries to rise and leverage on the emerging technologies to boost their capacity, less-risky

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Based on current advancement in ET, the oil-rich African countries can leverage the advancements in inspections, transportation, prospecting, exploration, extraction and other related activities. Other ET can also be enabled for autonomous drilling, remote access, automated sampling, analysis and other activities that reduce operational risks and costs

and cost-effective operations, Osinubi said that it would be better achieved through collaborative effort. According to him, it is no longer profitable to operate in silos as it was high time the continent aligned and integrate their resources to serve a common purpose “Based on current advancement in ET, the oil-rich African countries can leverage the advancements in inspections, transportation, prospecting, exploration, extraction and other related activities. Other ET can also be enabled for autonomous drilling, remote access, automated sampling, analysis and other activities that reduce operational risks and costs. Some of the applicable ET for the industry include robotics, drones sensors and data collection hardware, modern testing methods, drone-based nondestructive testing tools (NDT), cloud-based systems, software analytics tools, and more. “In addition, advanced tools such as autonomous underwater vehicles, remotely operated aerial drones, unmanned ground vehicles, remotely operated vehicles, robotic drills and more can be explored to improve efficiency and field safety of offshore personnel. The vehicles are ideal for almost all locations and applications, especially when the terrain is difficult, or the distances are inaccessible as it is in the African context,” Osinubi said. Standardisation, the Way Forward Reiterating the fact that collaboration

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amongst oil producing countries will move the industry forward, the local content Manager, SNEPCo, Mr Lanre Olawuyi said that it would offer inestimable benefits to the African continent if properly handled. Speaking during the 2019 WAIPEC in Lagos, Olawuayi said that the continent should consider standardization as the major process towards a mutually beneficial collaboration. According to him, adopting a standard rule, measurement and policy would streamline the processes involved as well as eliminate unnecessary conflict. In reminiscence, Olawuyi shared how standardization aided the building of a tunnel between the United Kingdom and African. He said, “a couple of years ago when a tunnel was to be built between the United Kingdom and France and we understand that these are two different countries; English speaking, French-speaking, metrics, imperial. There were differences but by standardizing the processes, there was an opportunity for that train to be built and that opportunity led to a huge change in the mode of transportation across the English Channel. Similarly, in West African sub-region and the whole sub-Saharan area, that opportunity exists today,” he said. Stressing that Nigeria stands as a model when it comes to collaboration, Olawuyi said that the country’s achievements in

local content development have brought to fore the power of synergy amongst industry players. “In Nigeria, courtesy of NCDMB, the country has developed a system that allows us to do a number of things together. Citing vessel categorization as one of such areas that need to be harmonized on the regional level, Olawuyi said, “Presently, vessel categorization in Nigeria is different from the one across the entire West African sub-region. It is different everywhere else in Africa. So, a vessel that is categorized as one in Nigeria doesn’t have the same categorization everywhere. If we are going to benefit from this, why can’t we learn and copy across?” Continuing he said, “People in construction remember that there was going to be an integration in Europe and one of the things that had to happen was the introduction of the Euro code, which allowed people that practised construction, engineering to standardize across all countries. The German had their own standards prior to that, the same with the French and Dutch. But with the introduction of the Euro code, they had a common standard that allowed everybody to benchmark the equivalent of their local standard. By so doing, the Germans, Swiss, Dutch could relate to the Euro Code and even Britain had the opportunity to relate to the Euro Code as well.

“We have a similar opportunity here in Africa. We can begin to standardize with countries taking leadership in certain areas and that is one of the opportunities I think International Oil Companies, (IOCs) can bring to the table. The IOCs represent a big lever that can move this as they move into these countries; the best practices coming from their own countries can be shared across to cut short the learning circle in many of these areas. “For all of us in Africa, if we articulate our consumption, it doesn’t make sense if we start citing individual pipelines because the market is too small and fragmented. Let us begin to share knowledge, forecast. We know the project funnel for Nigeria, Liberia, Côte d’ Ivoire, we have seen what the next five years look like for all of them, we can aggregate together and agree on where to cite the pipe mill. “Currently, when you want to do a geotechnical intervention in deep offshore in Nigeria, there is no vessel in Nigeria to do that and there is none in Africa, all the vessels we use for geotechnical intervention come from Europe. It doesn’t make sense for a single country to hold the ISO because it would not be fully utilized. Whereas, if African countries can come together and ensure the use of the vessel, it would be done in a similar way we do our ‘cable sequence’ in our different countries, Olawuyi said.

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ANGOLA REPORT

A look at Angola’s new oillicensing strategy, 2019 – 2025 …Angola’s oil production has been decreasing since its peak of almost 1.9 million bopd in 2008 to reach 1.478 million bopd last year.

n yet another landmark reform for its hydrocarbons sector, Angola released in February 2019 a new Presidential Decree detailing the country’s oil licensing strategy for the next six years. Published in February 2019, Presidential Decree No. 52/19 is a continuation of the Lourenço administration’s efforts to incentivize investments into exploration and arrest declining output. Angola’s oil production has been decreasing since its peak of almost 1.9 million bopd in 2008 to reach 1.478 million bopd last year. With the objective of “increasing the production of oil and gas” and “ensuring the substitution of reserves to replace the evident decline in production in recent years,” the new decree hence defines the country’s new general strategy for the attribution of its petroleum concessions up until 2025. Under the terms of the decree, petroleum José María Botelhos de Vasconcelos, Angolan Minister of Petroleum concessions are to be awarded under three different modalities: public bidding, limited ding, restricted to a number of previously-se- 2017 elections. public bidding and direct negotiation. In May 2018, Angola had already released The public tender and bidding avenue fol- lected companies. The modality applies to lows the legally-established procedure for the the blocks and contract areas that have been three presidential decrees related to the govaward of oil concessions under a competitive returned to the State, and eligible bidders will ernance and regulation of its oil & gas sector: auction, as detailed in Presidential Decree be selected from companies that have demon- Presidential Decree No. 5/18 establishing the 86/18. Under such an auction, state-owned strated knowledge, expertise and both techni- framework for the exploration activities of the Sonangol is entitled to a 20% stake in research cal and technological competence operating Development Areas; Presidential Decree No. operations in the case where it is not operator in Angola. The procedure will follow the rules 6/18 regulating the development of marginal set out in Presidential Decree No. 86/18 and fields and Presidential Decree No. 7/18 regof the block. In 2019, Blocks 11, 12, 13, 27, 28, 29, 41, 42 will apply in 2021 to maritime blocks 7, 8, 9, ulating the prospection, research, evaluation, and 43 in the Namibe Basin, and Block 10 in 16, 33 and 34, and to free area blocks 31 and development, production and sale of natural the Benguela Basin are to be awarded under 32, and in 2025 to blocks 22, 24, 25, 26, 35, 36, gas. The clarity provided by the new oil licenspublic bidding. In 2020, blocks CON1, CON5 37, 38, 39 and 40. Finally, blocks 6, 30, 44, 45, 46 and 47 are ing strategy, and its promulgation by Presdiand CON6 in the Congo Basin (onshore) and blocks KON5, KON6, KON8, KON9, KON17 open to direct negotiations, which must be ential Decree is expected to provide sufficient and KON20 of the Cuanza Basin (onshore) concluded before the end of the first semester incentives to raise interest of African, indeare proposed to be awarded. Finally, blocks of 2019. Successful companies must enter into pendent and international majors in explorCON2, CON3, CON7 and CON7 of the Con- a Service-at-Risk Contract and demonstrate ing Angolan acreages. It will also be coupled go Basin (onshore) and blocks KON1, KON3, relevant proven experience, expertise, techni- with the country’s first Marginal Fields BidKON7, KON10, KON13, KON14, KON15 cal and technological capabilities operating in ding Round, set to be launched at the Angola Oil & Gas Conference in Luanda on June 4-6, and KON19 of the Cuanza Basin (onshore) Angola or other oil provinces. The legislation is in line with Angolan 2019. are proposed to be subject to public bidding President João Lourenço’s implementation of in 2023. For reasons of national strategic interest, a a bullish reformist agenda that is drastically Adriano Rioja Ciprian, Associate Attorsecond modality will be a limited public bid- transforming the governance of sub-Saharan ney, Centurion Africa’s second largest producer since the ORIENT ENERGY REVIEW Vol.9 No. 02

GHANAREPORT

Ghana earns US$ 813.95 million from 2018 oil lifting

n 2018, Ghana earned a total of US$ 813.95 million from crude oil exports representing lifting proceeds received into the Petroleum Holding Fund (PHF). This is according to Bank of Ghana’s (BoG’s) Petroleum Holding Fund and Ghana Petroleum Funds Semi-Annual Report from July 2 to December 31, 2018. The PHF received a total amount of US$423.93 million from lifting proceeds in the second half compared to receipts of US$390.02 million in the first half of 2018. Total receipts from TEN (7th to 9th liftings) were US$223.60 million compared to US$123.88 million received in the first half of 2018 (5th and 6th TEN liftings), whilst receipts from Jubilee (44th to 46th) were US$200.32 million compared to US$203.10 million received in first half 2018 (41st to 43rd liftings). It has been explained that the higher lifting receipts during the second half of the year were predominantly as a result of higher crude oil prices.

Other Income

During the period under review, a total amount of US$77.34 million was received

Allocations

Ghanian Energy Minister, Boakye Agyarko from various entities for the payment of surface rental, corporation income tax, and interest accrued on the PHF account. The amounts received in respect of other income comprised of US$0.317 million from surface rental and US$76.14 million from corporate income tax. In addition, an interest of US$0.880 million was earned on undistributed funds held in the PHF.

The total amount distributed from the PHF during the period was US$501.26 million. This comprised proceeds of the 44th, 45th and 46th parcels lifted from Jubilee totalling US$203.10 million, proceeds of the 5th and 6th liftings from TEN totalling US$123.88 million and the first SGN liftingamounting to US$63.03 million. Other income distributed during the period was US$73.55 million. Total amount received by ABFA for the second half was US$117.55 million. ABFA target was met for the second half of 2018. GNPC received an amount of US$162.45 million for its Carried and Participating Interest (CAPI) and Equity Finance Cost (EFC) in the second half of2018 compared to US$142.82 million in the same period of 2017. The Ghana Stabilisation Fund and the Ghana Heritage Fund received US$154.88 million and US$66.38 million respectively in the second half of2018 compared to US$150.84 million and US$64.65 million respectively received in the first half of 2018.

Group urges Ghana parliament to reject state oil Gilbert Boyeﬁo corporation royalty proposal

he African Centre For Energy Policy (ACEP) has called on the Parliament of Ghana to reject a proposal by the Ghana National Petroleum Corporation (GNPC) to annex royalty belonging to the state, noting that this move is “dangerous and can deepen inefficiency of the Corporation while denying the State required investment in public expenditure and savings for future generations”. GNPC had submitted its annual program of expenditures to the Parliament of Ghana for approval. This is a legal requirement of the state Corporation to receive expenditure clearance and account for public investment through its activities. For the first time, GNPC has included royalty from oil in its expected revenue.

According to ACEP, on the analysis of GNPC’s Work Programme for 2019 financial year, ACEP the GNPC is not entitled to receive royalty from Ghana’s petroleum operations. It is erroneous therefore for GNPC to account for petroleum royalty as revenue accruing it from “ordinary activities”. This fact has been acknowledged since oil production begun. “GNPC is only entitled to two disbursements from the PHF as prescribed by Section16 (2) and (3) of the Petroleum Revenue Management Act (PRMA) as amended. The PRMA Act provides that GNPC’s share of the petroleum revenue should first be for its equity financing cost deductible from the CAPI. Next, up to 55% of the CAPI - less equity financing

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cost (net CAPI) - must be ceded to the Corporation either in cash or barrels of oil equivalent. “Therefore, the basis for GNPC’s revenue from oil does not accrue from royalty but from the CAPI which they have already budgeted to take from the three producing fields, amounting to $348.06 million. Budgeting to take additional $232.82 million from royalty is not only illegal but also unconscionable. This opens the government up for legal challenge in court for breaching the PRMA,” ACEP noted. According to ACEP, royalty is a significant part of revenue allocation to the ABFA. Up to seventy percent of the royalty goes to support the budget.

GHANAREPORT

Only Ghanaian, black NonExecutive Director retires from Tullow Oil Plc in April Peace Obi with Agency report

he Only Ghanaian serving on Tullow Oil Plc and first black Non-Executive Director Tutu Agyare is set to retire by the end of April 2019, the Oil exploration firm disclosed recently. According to the Chair of Tullow Oil PLC, Dorothy Thompson, Tullow is very grateful for his support over the years, “All of the Board joins me in thanking Tutu Agyare for his contribution to Tullow over the past nine years.” Thompson noted that he has been a constant source of wise counsel with his strong financial and commercial expertise, his deep knowledge and understanding of Ghana. She said, “I am also delighted to welcome Sheila and Genevieve to the Board of Tullow where their wide experience of both Africa and the resources sector will be invaluable. I look forward to working with them closely over the years to come.”

Who is Tutu Agyare

Tutu Agyare, now 55 years and a Ghanaian was appointed as a non-executive Director in August 2010. He is currently a Managing Partner at Nubuke Investments, an asset management firm focused solely on Africa, which he founded in 2007. Previously, he had a 21-year career with UBS Investment Bank, holding a number of senior positions, most recently as the Head of European Emerging Markets, and served on the Board of Directors. Tutu Agyare, left UBS Investment Bank in 2007 to found Nubuke. The principals perceived that there were very few man-

Tutu Agyare agers who truly understood the opportunities available in Africa and fewer still who have the knowledge and contacts that would allow them to exploit such opportunities. Nubuke was established to offer investors a diverse platform to access the dynamic economic growth and the structural changes, occurring in key capital markets across the African continent.

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GHANAREPORT

Gilbert Boyeﬁo

Ghana at Subsea Expo, woos Scottish Investors to Ghana

he Chief Executive Officer of the Petroleum Commission, Mr. Egbert Faible, has espoused the numerous business opportunities that Ghana’s emergent oil and gas industry has to offer to International Oil Companies, and National Oil Companies that have interest in the country. Speaking during a business to business meeting between members of the Aberdeen and Grampian Chamber of Commerce and a business delegation from Ghana on the sideline of the Subsea Expo conference in Aberdeen, UK, Faible said that it was exciting times in Ghana since the launch of the first licensing and bidding rounds late last year by the Ghanaian President. The Petroleum Commission bosses noted that the Subsea Expo was strategic for Ghana as it offers them a pristine opportunity to network and match some of their companies under the auspices of UPSAG, a very progressive and smart organization he said has just been launched in Ghana that enjoys the full support of the Petroleum Commission. Enumerating some of the opportunities that are available in the country, Faible said, “As you may know, Exxon Mobile has executed a petroleum agreement with the Republic of Ghana and it is expected that it will be ratified by the Parliament of Ghana because that is the position of the law. “Aker Energy is also in there, BP is knocking hard at Ghana’s upstream door and so countless opportunities exist and this is an opportunity for businesses and entities in Aberdeen need to take advantage of and pair up with some of the Ghanaian companies. We believe in the next few months, we shall be seeing a lot of you in our upstream sector,” Faible enthused.

Speaking further on the maiden licensing bidding rounds, Faible said that bids have been received that they are being considered for evaluation, adding that successful companies will be announced in the course of the year. Stating that the licensing and bidding rounds process is enshrined in transparency, Faible said it is based on best international benchmarks. Stressing that Ghana is an investment haven with a stable political atmosphere, he said, “If you look at our political architecture, we are an oasis of peace and though we are humans, we are not known to implement business-unfriendly laws or taxes. We run a very open, transparent system. Our laws are inherited

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from the British and therefore the principle of the laws that applies here also applies in Ghana. The only difference is our customary laws, which are subservient according to article 11 of our Constitution to the Common Law and for that matter the laws of the Republic of Ghana. “I want to assure you that Ghana is the place to be and you are certain of result, nice and friendly people to a government that is committed to ensuring that every sum of money that is invested in Ghana get the investor the appropriate yields within the framework of our laws. And there are so many companies that can attest to that”, Faible said. Speaking on the local content provisions

GHANAREPORT in Ghana and how foreign companies fit in, Mr. Kwaku Boateng, explained that Ghanaian laws require that foreign companies wishing to provide services in the country’s oil and gas industry to form a joint venture with a Ghanaian company. Stating that Subsea Expo created the opportunity for Ghanaian companies to meet their Scottish counterparts, Boateng noted that the conference also offers the prospect for companies to form alliances. “What we are doing now is encouraging joint ventures between Ghanaian companies and foreign companies that are in common line of business. “So, if it is about engineering, the Ghanaian company has to be a company in engineering, if it is about sub surface, the Ghanaian company should be into that line of business. So that there should be that kind of synergy between the Ghanaian company and the foreign company,” he noted. Continuing, he said, “But Ghana is not only looking for investors outside Africa, the country strongly believes in regional local content under the auspices of ECOWAS in a South-South cooperation and at many fora have encouraged companies in the sub-region to come to Ghana. At a recent local content conference held in Ghana in November, authorities focused on regional content. Ghana believes that a country like Nigeria, which is far ahead in the upstream activities, has a lot to share with Ghana. “We are even encouraging Ghanaian companies to spread to countries in the sub-region that are now emerging and we now have some few of them operating in the Senegal, Sierra Leone, Kenya and Uganda”, Boateng enthused.

‘Give us more information on Licensing and Bidding Rounds’, Civil Society Groups demand Gilbert Boyeﬁo

he Ghana Oil and Gas for Inclusive Growth (GOGIG) and Natural Resource Governance Institute (NRGI) have raised red flags over Ghana’s maiden licensing and bidding rounds, demanding that authorities makes every information of the process open and available to all Ghanaians. In 2018 the Ministry of Energy announced bidding rounds for Ghana’s oil blocks. This was made known on the sidelines of the 50th Offshore Technology Conference (OTC) in Houston, Texas. The bidding is the first ever-bidding process being carried out in Ghana’s offshore oil and gas sector. In all of the nine oil blocks mapped for this process, three blocks were to be allocated through open competitive tender; two are to be allocated through a restrictive tender, while are to be handed over to GNPC. Amongst the three stages in the licensing and bidding rounds – (Pre-qualification, Evaluation and Awards and contracting), the government has so far completed stage one for the blocks that were enlisted for the open tender process. The government stated its reason for direct negotiation to include “The water depths of blocks GH__WB_05 and GH_WB_06 severely test the limits of modern technology and would take research and development to optimally develop and exploit discovered resources; the setting in ultra-deepwater results in high drilling cost, therefore, increased emphasis on full regional technical understanding and experience in exploration in similar geological plays prior to drilling is essential, also that critical success factors in any petroleum basin such as Ghana’s is the attraction and retention of International Oil Companies (IOCs) with the relevant technical expertise and sound financial capability with access to both capital and project finance. However, GOGIG and NRGI have demanded for more information on the process from the government, stating that in addition to what has been made available, the government should let Ghanaians know the names of the companies that have qualified and those who did not. Explaining further, Mr. Samuel Bekoe of GOGIG pointed out that “Government published reasons for direct negotiation but did not mention which company or contractor they were planning to directly negotiate with. We understand more than one company have applied which triggers a competitive process to be effected but the government has not provided any information on this yet.” According to him, Section 10(3) of Ghana’s oil Exploration and Production Act 2016 (Act 919) stipulates that, the allocation of a new exploration rights to prospective investors, should be done in open, fair, transparent and public process. Bekoe warned that any attempt to directly negotiate and sign agreement with one of the two companies may likely lead to potential breach of section 10 (8) of the Exploration and Production Act. “We need more information on the process and progress of the direct negotiation. Best practices in Mexico even provide video evidences on the progress and process of each stage,” he added.

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GHANAREPORT

Ghana’s 4th oilfield development plans begin soon Toma Imirhe

he next few weeks will be critical for Ghana’s medium term economic fortunes as Aker Energy concludes its drilling of two more appraisal wells in its oil rich Deepwater Tano exploration block. Already, the Pecan 4A appraisal well drilling has unearthed enough oil to commence development of the Pecan oilfield, Ghana’s fourth oilfield, but ongoing drilling and subsequent assessment of the results will determine how big the impending oilfield will be, how productive and how it will be developed. Aker Energy expects to submit is plan of development for the Pecan oilfield to government by the end of March, which will incorporate decisions guided by the latest, ongoing drilling and assessment programme, the company’s chief executive, Jan Arve Haugen has revealed. Already, the appraisal drilling at the Pecan 4A well has indicated an estimated 450-550 million barrels of oil equivalent (mmboe), enough to set up an oilfield that produces some 125,000 barrels per day. However Aker is hoping that the two subsequent wells being drilled and assessed could indicate an

increase in estimated reserves to somewhere between 600 – 1,000 mmboe. The upper end of that range could support production of some 200,000 bpd which would effectively double Ghana’s oil production which currently stands at about 200,000 from the Jubilee, TEN Cluster and Sankofa oilfields. Already Aker is considering a plan of development that would enable a phased development of the Pecan field with first oil from the first phase taking place as early as late 2020, as the company prepares to leverage on its long and intense experience in the Norwegian sea and its access to the latest technologies. However some oil engineers see this as over-ambitious, even if the first phase is designed as a relatively small one just to get production up and running in order to generate part of the monies needed for a full-blown field development. Indeed the development of the field will be a drawn out affair as Aker has already identified multiple targets to be drilled as part of a greater area development outside of the initial plan of development to be submitted to government for approval some six weeks from now. Government itself will accede to an accel-

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erated, albeit phased, plan of development. Initially, subsequent to Aker’s acquisition of Hess Ghana’s exploration properties in Ghana at the start of 2018, the company had announced that it expected to have an approved plan of development in place before the end of last year, with first oil scheduled for 2021. However that was before the Pecan 4A discovery and expectations of further major discoveries in the area, which provides the foundation for a much bigger oilfield than originally anticipated and a full-blown field development could push first oil forward as far. Government on its part however has put it hopes on the impending Pecan’s oil export revenues, which it expects to start flowing in just as the repayment of the series of Eurobonds issued during the tenure of the Mahama administration start falling due for repayment. The then Finance Minister Seth Terkper never hid his expectation that the large foreign loans taken between 2014 and 2016 would be serviced and ultimately amortized from increasing oil export revenues as Ghana discovers new oil deposits and brings them into production.

GHANAREPORT

Tullow well positioned to deliver full potential in 2019 Gilbert Boyeﬁo

ccording to Tullow Oil plc (Tullow), in 2019, overall working interest oil production, including production-equivalent insurance payments, is expected to increase and is forecast to average between 93,000 and 101,000 bopd. Working interest gas production from TEN is expected to average 1,000 boepd. The company’s West Africa oil assets performed strongly in 2018 and delivered net production of 88,200 bopd. This includes production-equivalent insurance payments of 8,600 bopd received under Tullow’s corporate business interruption insurance. Working interest gas production averaged 1,800 boepd giving overall Group net production of 90,000 boepd. Overall Group net production is therefore expected to be in the range of 94,000 to 102,000 boepd. “The TEN fields and the West African non-operated business outperformed substantially in 2018 and with further growth in production to come in 2019, this business is well-positioned to deliver on its full potential,” said Gary Thompson, executive vice president for West Africa. In Ghana, Tullow returned to drilling in 2018 following the conclusion of proceedings at the ITLOS tribunal in Hamburg in September 2017 and after gaining government approval of the Greater Jubilee Full Field Development Plan. Tullow began a new drilling programme in March with the Maersk Venturer and a second rig, the Stena Forth, was contracted during the year to work alongside the Maersk Venturer. The second rig was contracted for an initial three-well campaign with flexible extension options reflecting conditions in the rig market which continue today. The Stena Forth began drilling in October 2018 and the additional rig capacity enabled Tullow to carry out simultaneous drilling and completion activity, allowing the tie-in of new wells to be brought forward. This year, Tullow expects to drill and complete seven new wells across the TEN and Jubilee fields allowing gross oil production from Ghana to rise to around 180,000 bopd. Production from Jubilee was slightly low-

er than expected. This was due to downtime related to work on the gas compression system in the first half of 2018 and some minor facilities issues towards the end of the year, which have since been resolved. Over the year, two new Jubilee production wells, J51-P and J53-P, were drilled and successfully met all pre-drill expectations. The completion of a water injector, drilled during the previous campaign, was also carried out. These wells were brought on stream in the second half and are accessing highly productive parts of the reservoir. Tullow expects 2019 average gross oil production from the Jubilee field to increase to around 96,000 bopd (net: 34,000 bopd). The company’s corporate business interruption insurance is expected to provide around 1,000 bopd of net production-equivalent insurance payments, resulting in expected total 2019 Jubilee full year net production of around 35,000 bopd. The Turret Remediation Project is close to completion. This pioneering and unique project, which included the first ever remediation of this type at sea, required the FPSO Kwame Nkrumah to be shut down twice in the first half of 2018 for work to stabilise the turret bearing for periods of 19 days and 21 days respectively. The TEN fields performed well in 2018, with gross production averaging 64,500 bopd (net: 30,400 bopd) reflecting good results from the drilling programme. The first additional Ntomme well, NT05-P, was successfully drilled in the first half of the year and started producing in August 2018. Tullow expects 2019 gross oil production from the TEN fields to average around

83,000 bopd (net: 39,000 bopd). The company is confident of this growth in production following strong performance in 2018, good results from recently drilled wells in both the Ntomme and Enyenra fields and production testing that has seen the TEN FPSO deliver in excess of its design capacity. Tullow has successfully pre-qualified for Ghana’s maiden licensing round with bids due by mid-May 2019. The licensing process is expected to conclude by the end of August 2019. Following a trial in the English Commercial Court in May 2018, the court ruled on 3 July 2018 that Tullow was not entitled to terminate its West Leo rig contract with Seadrill on 4 December 2016 by invoking the contract’s force majeure provisions. Following advice from counsel, Tullow decided not to appeal this ruling. Tullow paid Seadrill a contractual termination fee, other standby fees that accrued in the 60 days prior to termination of the contract and interest amounting to $248 million in aggregate. Although Tullow regards these as JV Partner costs, Kosmos disputed separately, through an international Chamber of Commerce arbitration against Tullow, its share of the liability (c. 20%) of any costs related to the use of the West Leo rig beyond 1 October 2016. On 17 July 2018, the arbitration tribunal delivered a final and binding award in favour of Kosmos which determined that Kosmos is not liable for its share of these costs. As a result of both litigation results, Tullow’s net exposure in 2018 was a cash outflow of $208 million.

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GHANAREPORT

Ghana woos UK investors in Aberdeen Nneka Ezeemo

hief executive officer of the petroleum commission of Ghana, Mr. Egbert Faibille, has said that the idea behind the substantial presence of powerful Ghanaian delegation at the 2019 Subsea Expo conference in Aberdeen, UK, was for the West African country to use the platform to woo investors to her emerging oil and gas industry. According to him, the government of Ghana intended to expose the country’s indigenous companies to opportunities and possible partnerships. “Essentially as a regulator, we have the mandate as the Petroleum Commission to promote indigenous Ghanaian businesses. So, while here in collaboration with Upstream Petroleum Service Providers Association of Ghana (UPSPAG), whom I am sure you have met, we took a strategic decision to get into Aberdeen and Grampian Chamber of Commerce and offer some indigenous Ghanaian companies who came with us on this trip, the opportunity to leverage with their counterparts here,” he told Orient Energy Review in an interview, adding that there are scores of opportunities coming up in the upstream sector in Ghana. The Ghanaian oil boss said also that the country’s investment laws are inviting and beneficial to foreign investors. “Our local laws require a foreign entity that wants to do business in Ghana incorporate a joint venture with a Ghanaian company and offer that indigenous company at least 10% equity in the joint venture to enable that joint venture to do business in Ghana’s upstream space. “Such factors propelling the attraction of investors into the country upstream sector include finance, capacity, technology, among others. So we are here to connect our indigenous Ghanaian companies to the right companies to enable them successfully bid for jobs and contracts that are available in our upstream space,” he said. He explained that President Nana Akuffo-Addo, has ensured that we set up a local content fund. The fund sits at the Bank of Ghana. According to him, for every contract that is executed in Ghana’s upstream sector,

Egbert Faibille, new CEO of Petroleum Commission one per cent (1%) is taken off the contract value and paid into that account. The government, Faibille stated further, has a flagship program that is the Aspirated Oil and Gas Capacity (AOGC) building programme, which essentially trains and equip Ghanaians especially the youth and school leavers with the requisite skills to get jobs in the upstream sector. Embedded in the AOGC also is an SME plan which ensures that these indigenous, young and fledgeling companies are given a handheld elevation to the right places with respect to financing, training and capacity building. He informed that the Ghanaian Petroleum Commission has set up a new department, the business advisory and enterprise development department, which helps companies with all kinds of issues. “So even here, what they have done is to go round, pick the brochure of exhibitors and sensitize them on what we have in Ghana and also prepare the platform such that when other companies go to them looking for certain type of business, they will be able to recommend some of our indigenous Ghanaian companies,” he said The Ghanaian Petroleum Commission CEO said the country has made rapid and tremendous progress considering where they started from and where they are, presently. He pointed out that Ghana’s compliance spectrum is broadening and will still get better and better. “Even now, every company in

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Ghana, because of the strategic interventions of the Petroleum Commission, has realised that without compliance they are not going to get it easy. We are very firm and doing it with a human face, but we will ensure that our IOCs and International Service Companies will not take Ghana for granted,” he said The Commission, he said, is ever poised to open doors for indigenous Ghanaian businesses and that they should endeavour to keep in touch with the Commission to know what is going on in the industry. “The Commission now has a dedicated department in charge of business advisory and enterprise development for them. The commission, he said, is not just going to wait for indigenous companies to come to them; the commission will organize forums, seminars, and workshops to build their capacities. “We will also take advantage of such platforms as we have here at this conference and others to organize Ghana sessions so that indigenous Ghanaian companies can take advantage and build the needed linkages for the successful growth of their businesses and also the industry in Ghana. The Commission will take advantage of other international conferences such as the OTC, NIPS, Africa Oil Week, Ghana’s local content conference and exhibition and a whole lot of others to enable them leverage the opportunities they bring,” he said

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INTERVIEW

Landlocked, yet militancy is ruled out in Uganda Jessica Kyeyune, a beauty pageant turned professional holds a postgraduate diploma from the Institute of Chartered Secretaries and Administrators, London among others. Her journey into the corporate world has seen her work with local and international organizations where she functioned in the Procurement Unit at Uganda Development Bank, the National Content Manager at CNOOC Uganda Limited, among others. Presently, she is a National Content Specialist with Uganda National Oil Company, UNOC. In this interview with OER team on the sideline of 2019 WAIPEC in Lagos, Nigeria, Kyeyune said though Uganda is landlocked, that the countryâ&#x20AC;&#x2122;s excellent land resettlement plan has obliterated issues like militancy and other forms of community agitation that tends to resent government possession of national resources located in their locality. She speaks on other sundry issues. Excerpts. Describe your journey into the Oil and Gas industry has been Miss Uganda? It is really not a long story. Firstly, being Miss Uganda is one of the things you do as part of your other career activities. So, if you are in school, you can compete for Miss Uganda but you have a major responsibility to become somebody outside being Miss Uganda. I went to school in the UK for my Bachelors and my Masters in Procurement I started off my career in a bank that is a Development Finance. However, I became interested in the oil and gas industry when Uganda started advertising for jobs in the industry. I was first employed by the National Content in its procurement section. I later left to work with an IOC and from there UNOC wanted me to work with them and I joined them. As a former Beauty Queen who currently occupies an important position in UNOC, how do you feel when people doubt the ability of Beauty Queens to be great professionals? And have you experienced any form of gender discrimination in your profession? Actually, I do not know if gender discrimination has happened to me as I

just compete with myself. I only believe in doing the best things I can. I believe in

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respecting people. I believe in progressing myself. So these are things I believe in, but

INTERVIEW if at all there has ever been such a scenario, it is really things I never noticed. The Uganda Minister of Petroleum is a woman and you are also occupying a prominent position in your countryâ&#x20AC;&#x2122;s energy sector, yet there is the saying that women are not well represented in the energy sector. So, do you agree to that? No! Actually, there are more female Chief Executive Officers than men, presently. Also, our Speaker in Uganda is a woman. Let me let you know that Uganda has affirmative action for women which started a long time ago. This started around 25 years ago. And even in our parliament, seats are reserved for women. In some other African countries, sidelining of women may exist, but due to the affirmative action in Uganda, women do not feel threatened. In UNOC, we have five departments, excluding the CEO, which is a woman; two are manned by women, while the other three are led by men. So, you realised that most of the positions are occupied by women. Oil discovery in Uganda happened the same year with that of Ghana, where is Uganda in terms of the strategies adopted in developing your hydrocarbon resource? The differences in the development of Ghana oil and gas industry and that of Uganda may be due to two major reasons - one is that Uganda is landlocked, while Ghana is onshore. Uganda has to build a pipeline. Also, in Uganda, the land is owned by individuals, not by the government, while Ghana does not have to go to the stress of land acquisition. Another reason is that Uganda does not want to make the mistake other countries made. So, we needed to have in place laws and regulations for the oil sector before oil comes out from the ground. At the moment in our upstream, we are SINOCTullow and Total almost making the final investment decision. Now we still have the pipeline that is also required for the oil and gas sector. We are also are building a refinery, though there are issues and challenges in getting an investor. Again, there is this view that Uganda should not have a refinery because it is not going to be economical. But now you see that the whole region has realised the need for it. For instance, we get oil from Mombasa Kenya about 4000km into Uganda. And then other countries like Rwanda, Democratic Republic of Congo and sometimes Southern Sudan, all have their oil passing through Uganda and sometimes, Burundi. So, it is like why canâ&#x20AC;&#x2122;t we have a

We are committed to the Resettlement Action Plan and are opposed to giving them money unless if the portion of the land being taken is small and it is not affecting their residential quarters. In addition to that, we have a second resettlement plan that ensures the people are helped to settle down in their new areas as they are given support to startup, schools for their children and we keep on following them up to see that their lives are better. refinery and start selling to those people? I mean it will be more economical. But, you know that there are other decisions that have to be made, but the main one is that Uganda is landlocked. We have to go through a lot of issues to get oil to the market but Ghana is offshore. Considering the peculiarities in land ownership in Uganda, especially as it regards the problem oil exploration brings, how do you manage community demands? The good thing is that we are dealing with it in line with IFC performing standards, and especially with the IFC 2, one that deals with communities, how we relate with them. We are following the IFC performance. In addition to that, we have support from the government. We also have Community Liaison Officers, CLOs who manly are indigenes from those areas. They are purposely recruited because they

are from those areas. They deal with all these issues. A lot of communications is done based on what is happening in the oil and gas sector. And of course, demystify those expectations is one of the things the community liaison people have done as well as the on the land acquisition. We also have Ministry of Lands that is responsible for land issues such as setting land rates; how much money you are to pay for a piece of land etc. So, we have had very little scuffles with people. We also have a Resettling Action Plan that has been approved by the government. It entails that when you are reselling a person or people, you have to put them in a better place than you found them. For instance, there are so many people in those villages who did not brick houses, but had lands etc. so when their lands are acquired for oil exploration, we give them brick houses of a very high standard than what they had. We also give them land that is equivalent to what we got from them. The unfortunate thing is that sometimes when you give them these beautiful houses, they sell it off below proportional price. But, you cannot stop them from doing whatever they want to do with the land given to them. We are committed to the Resettlement Action Plan and are opposed to giving them money unless if the portion of the land being taken is small and it is not affecting their residential quarters. In addition to that, we have a second resettlement plan that ensures the people are helped to settle down in their new areas as they are given support to startup, schools for their children and we keep on following them up to see that their lives are better. If they were fishermen and they are moved away from their environment, we give them fish ponds, populate it for the first year, provide them with other equipment to enable them to stand on their own. There are so many things Uganda is doing to basically make people be in a better place, although there are a few people who are a bit difficult to handle. How long has the Resettling Action Plan programme been? It has been on for the last seven years. So, it becomes a journey that you need to sensitise these people first. Even the ones that are going to get some money, you have to train them first through financial literacy training so that they will come out better than they were before.

ORIENT ENERGY REVIEW Vol.9 No. 02

PHOTOGALLERY WAIPEC 2019, LAGOS

ORIENT ENERGY REVIEW Vol.9 No. 02

NIPS 2019, Abuja

PHOTOGALLERY

ORIENT ENERGY REVIEW Vol.9 No. 02

IP WEEK 2019

SUBSEA EXPO 2019

ORIENT ENERGY REVIEW Vol.9 No. 02

PHOTOGALLERY

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ORIENT ENERGY REVIEW Vol.9 No. 02

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