Orient Energy Review, March 2017

ENERGY rient O R e v i e w

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Covering Local Content Oil & Gas N500

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Vol 6 No. 03 March 2017

NOGICD Act @7: NCDMB Unveils Five -Year Road Map New Strategies target growth and Effective Policy Implementation

'We Are Addressing Governance Aspect of the PIB' - Sen. Marafa

Ghana: ACEP Calls On Government to Check GNPC

EDITOR’S NOTE The Nigerian Oil and Gas Industry Content Development (NOGICD) Act was designed to enhance the level of participation of Nigerians and Nigerian companies in the country's oil and gas industry.

With the promulgation of the Act on 22nd April 2010, the Government has clearly established its intention to increase indigenous participation in the industry in terms of human, material and economic resources.

The implementation of the Act is expected to significantly change the current business and operating structure in the Nigerian oil and gas industry, particularly for the international oil service companies. But seven years down the line, industry players are unanimous in their views that local content development in the Nigerian oil and gas industry still remain unsatisfactorily low and continued to inhibit the growth potential of the industry. However,to address the shortcomings recorded in the implementation of the Nigerian Content initiative, the NCDMB has adopted a number of strategies aimed at increasing national capacity, creating an enabling environment to attract investors and protecting investments made through compliance oversight. We seek to explore these new strategies in this edition of the magazine.Turn to page 26 for the cover story.

There are other exciting stories in this edition ranging from our popular Local Content reports, updates from Ghana and the entire energy value chain across Africa.

Have a great read and do send us your feedback.

PUBLISHER/EDITOR-IN-CHIEF: Nneka Ezeemo EDITOR: Margaret Nongo-Okojokwu

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

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

CONTENTS 4

INDUSTRY NEWS

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Warri Refinery down tools

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

NOG Conference updates

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ORIENT ENERGY REVIEW has emerged to be the platform and voice for the growing local content policy across the world.It is a monthly publication of Orient Magazine,Newspaper and Communications Limited 5, Dipo Dina Drive, Abule Oshun,Badagry Express Way Lagos www.orientenergyreview.com email: info@orientenergyreview.com

GHANA REPORT

COVER STORY

New feather in GE’s Cap

NCDMB@7:The journey so far

30

COPECGH’s patriotic call

LONDON OFFICE: Charity Place, Unit 1 Thurrock Pack Way Thurrock Parck Ind. Estate Tilbury,Essex Rm !87Hz. +447974199137 GHANA OFFICE: +0243915206 orientenergyreviewgh@gmail.com

The gains of WAIPEC

LOCAL CONTENT The gains of Local Content Act Angola embraces Local Content

12 INTERVIEW

Latest on Dangote refinery

Senator Kabiru Marafa Making a case for downstream deregulation

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INDUSTRY NEWS

Total Nigeria Reports Stellar Revenue Growth

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he company said revenue rose to N290.95 billion in 2016 compared to N208.03 billion reported in the previous year.

Total Nigeria – the petroleum marketing subsidiary of Total Group – reported today that its 2016 revenue rose by 40 per cent, driven mainly by higher sales of petroleum products across the country.

The revenue growth was supported by an increase in sales of petroleum products given the hike in prices of premium motor spirit from N97 per litre to N145 per litre. Sales of lu-

bricants and other related products rose by 53 per cent to N38.97 billion.

Given the steep rise in revenue, Total Nigeria reported that its after-tax profit rose by 266 per cent to N14.8 billion in 2016 as against N4.05 billion posted a year earlier. Nevertheless, the company’s profit and revenue slightly underperformed analysts’ estimates, according to Cardinal Stone Partners, a Lagos-based investment advisory firm.

An analysis of Total Nigeria’s financials suggests that the company benefitted from favourable access to foreign exchange given its relation-

ship with the global oil giant, Total Group. This allowed the Nigerian company to import petroleum products at a relatively cheaper cost compared to other indigenous petroleum marketers.

Total Nigeria said basic earnings per share rose to N43.58 per share compared to N11.92 per share in 2015. The company has proposed a final dividend of N7 per share, potentially taking total dividend to N17 per share.

Established in 1956, Total Nigeria is one of the largest petroleum marketers in the country with over 500 service stations, five depots, five liquefied petroleum gas (cooking gas) bottling plants, three lubricants blending plants, and numerous industrial outlets. The company is also one of the two largest suppliers of aviation fuel with airport service centres in Lagos, Abuja, Kano and Port Harcourt.

On the Lagos Stock Exchange where Total Nigeria is listed, the value of its stock has experienced a somewhat erratic evolution over the last ten days, but clearly fell on Wednesday 22 March 2017. Henceforth its progression over a period of 12 months, is more than 84%, compared to 94% on 16 March 2017.

Warri Refinery Out Of Service for Technical Reasons

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ue to technical problems, the Warri refinery in Nigeria has temporarily ceased operations. This was announced by the Chief Operating Officer of the Nigerian National Petroleum Corporation (NNPC), Anibor Kragha, recently in Abuja.

The technical difficulties in question, which are of an electrical nature, relate to a breakdown of the gas turbines. However, the official indicated that the NNPC was doing everything to solve the problem.

“Only the Warri refinery is currently out of service because of technical difficulties.

However, we are working with General Electric, GE, to solve them as quickly as

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Orient Energy Review March, 2017

possible, “Kragha said.

Indeed, according to Anibor Kragha, the other two refineries in the country, particularly Port Harcourt and Kaduna, continue to operate, although below their processing capacities of 210,000 and 110,000 barrels per day respectively.

They currently produce only about 5 million liters of diesel, gasoline and kerosene every day.

By 2016, the three refineries operated at less than 15% of their production capacity. This was due to attacks on several oil pipelines in the Niger Delta region and renovation work.

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INDUSTRY NEWS

OPEC partners IEF to End energy poverty in Africa

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he Secretary General of the Organisation of Petroleum Exporting Countries

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(OPEC), Mohammad Sanusi Barkindo, has met with Dr. Sun Xiansheng, Secretary General of the Riyadh-based International Energy Forum (IEF) to discuss enhancing cooperation and bringing an end to wide spread energy poverty in Africa.

In the meeting which took place during the week at the OPEC Secretariat in Vienna, Barkindo highlighted the essence of the IEF to bring all parties, producers and consumers, together in the interest of sustainable stability in the oil industry

and the global economy. They both agreed that Africa should be a strong focus for the future due to widespread energy poverty.

The organizations decided to lay out specific ways of deepening the strong collaborative relationship and shared activities that exist between both of them. These include joint participation at various upcoming events and multilateral fora.

“Let us gradually but steadily work together on the issues of energy access and energy poverty on the African continent,” Barkindo said, and commended the OPEC Fund for International Development (OFID) for supporting efforts on environment and sustainable development.

JDR Expands in West Africa with Proserv Partnership

DR expanded its presence in West Africa through a partnership agreement with Proserv Instrumentation Nigeria Ltd. JDR is a leading supplier of subsea cables and umbilicals for the global offshore energy industry, Under the strategic alliance, JDR will establish a service and maintenance base in Proserv’s operations facility in Port Harcourt, Nigeria.

Together, the companies will offer combined subsea solutions and local content support to the West African market. JDR’s offering will include maintenance and offshore installation services, product termination and testing and technical training.

The company has worked a number of contracts in the region already, including the supply of complex intervention, workover control systems to the Egina, Kaombo, and Moho Nord developments in Nigeria, Angola, and Republic of Congo respectively.

JDR also delivered a hybrid steel umbilical to the ABO 12 field offshore Nigeria, and has since

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invested in a technical test and repair container for umbilical and reeler management.

Carl Pilmer, sales director for oil and gas at JDR, comments: “This alliance will enable JDR to increase local content support for projects in Nigeria and the wider region. We’re proud to work alongside Proserv to better service our clients with integrated solutions and develop the local skills needed to execute projects.

“Almost every project in the deepwater basins off West Africa includes a JDR-supplied umbilical and this partnership marks the next step in our strategic plan to offer our customers high quality, reliable products and services on a global scale.”

Olu Phillips, Proserv country manager based in Lagos, said “Nigeria is a key growth market for Proserv and given the very dynamic opportunities in the region, we are delighted to formalise our working relationship with JDR with the signing of this new strategic alliance.

“Proserv has worked well with JDR for many years and this partnership will allow us to build on our long and successful track record through the delivery of world class subsea technology solutions and services to our customers in Nigeria, strengthening Proserv’s presence in the country.”

The partnership follows the appointment of business development manager, Tai Fadipe-Davids last year, to lead JDR’s strategic sales and marketing activities in the region.

Orient Energy Review March, 2017

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LOCAL CONTENT

Nigerian Content is a Veritable Tool for National Development – Ojulari development, as well as effective collaboration in goods and services and the supply business.

T

he Managing Director of Shell Nigeria Exploration and Production Company (SNEPCo), Mr. Bayo Ojulari has described the local content law in Nigeria’s oil and gas industry as a veritable tool for national development.

such as Brazil, companies have leveraged on each other’s capability to deliver Floating Production Storage Offshore (FPSO) vessels “at half the price and half the time.” Ojulari revealed that Brazil currently has 43 FPSOs, while seven are under construction.

In his presentation on “Service company – Operator Collaboration Models; Drawing on experience from other providences,” at the recent maiden edition of the West African International Petroleum Exhibition and Conference (WAIPEC) held in Lagos, Ojulari noted that even in the developed world, the concept of “country first” is becoming increasingly popular.

Ojulari, who called on service providers to collaborate in order to survive the current low oil price regime, added that in other countries

He however, listed six conditions that would make local content to work in Nigeria’s oil and gas industry. One of the conditions, he pointed out, is stability of government policies. According to him, the stability of government policies is critical to the survival of local content, adding that the Nigerian Content Development and Monitoring Board (NCDMB) should cease to be a policeman and assume the role of an enabler.

To ensure the survival of local content, Ojulari advocated a consistent commitment to local capacity

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Orient Energy Review March, 2017

He also stressed the need for the service providers to exploit economy of scale and ensure standardisation.

According to him, the service providers should maintain standard in the current era of paucity of jobs.

In his remarks, the Managing Director of National Engineering and Technical Company (NETCO), a subsidiary of NNPC, Mr. Siky Aliyu, who represented the Group Managing Director of NNPC, Dr. Maikanti Baru said it was “ imperative that local companies rendering services in this larger segment need to emulate the Engineering companies by coming together to position themselves for effective competition with international companies who currently have a competitive advantage in this current low price regime.”

Earlier, the Chairman of Petroleum Technology Association of Nigeria (PETAN), Mr. Bank Anthony Okoroafor, said the mission of WAIPEC is aimed at promoting the region’s oil and gas industry, while seeking the industry best practise, explore new technologies and develop commercial opportunities for business and international investment. Okoroafor stated that the inaugural event, which is commissioned by PETAN is focused at serving the industry as an integrated platform for business organised by the industry.

*

source: ThisDay

www.orientenergyreview.com

LOCAL CONTENT

NCDMB, IOCs Pledge to Fast-Track Projects Execution document would be shared with stakeholders for their inputs and identification of roles they will play in the actualization.

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he Nigerian Content Development and Monitoring Board (NCDMB) and international oil companies (IOCs) operating in the country have made commitment to fast-track execution of oil and gas projects.

This will lead to an increase crude production and create opportunities for the growth and development of Nigerian Content.

The IOCs gave the assurance when the Executive Secretary of NCDMB, Simbi Kesiye Wabote visited some IOCs in Lagos to seek collaboration and get their commitment to support upcoming projects.

Wabote visited Chevron, Total Upstream and Shell with top management of the Board and confirmed that NCDMB had adopted mechanisms that accelerate processing time for Nigerian Content plans, technical and commercial evaluation and issuance of Nigerian Content certificates.

He urged other entities involved in the contracting cycle to adopt similar strategies for the sector to achieve the six-month contract processing target set by the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu. He also expressed the Board’s readiness to partner various stakeholders in resolving challenges they have in

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executing their projects.

According to him, the visits were conceived to engage stakeholders, and explain strategies adopted by the NCDMB to foster projects and ensure domiciliation of work scopes and maximisation of in-country capacities.

One of those strategies is the categorisation of service companies by their capacities, which he said, will be used in the contracting process.

He stressed that all new projects must comply with the provisions of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act 2010 and urged the operating companies to ensure that their contractors and sub-contractors remit one per cent of their contract value to the Nigerian Content Development Fund (NCDF) as required by law.

The NCDMB chief praised the establishment of pipe coating facilities and steel pipe mills in-country and directed operators to patronise the facilities. He said the Board would sanction operators that award contracts without approved Nigerian Content Compliance Certificates (NCCC).

He also informed the companies that the Board was developing a 5-year Road Map for Nigerian Content development. The final

Speaking at Chevron, Wabote canvassed for the participation of operating companies in the Nigerian Content Opportunities Fair planned for March 29 and 30 at Uyo, Akwa Ibom State.

The goal is to showcase opportunities in upstream, midstream and downstream sectors and provide multinationals the opportunity to link up and utilize in-country capabilities, he said.

He added that “most Nigeria companies do not know when projects will come through so they do not prepare themselves adequately.

The fair will provide a platform where we can share information that are not confidential.’’

At Shell, the team led by the Vice-President Nigeria and Gabon, Mr. Peter Costello discussed the company’s projects, including the Bonga Southwest /Aparo (BSWA).

They also officially presented their plans to align the project timelines with the Board, achieve early Final Investment Decision (FID) and carry out joint contracting workshops and in-country capacity re-assessment/revalidation among others.

Speaking at Total, Wabote commended the company for its Nigerian Content achievements on the Egina Deepwater project, which helped to sustain many Nigerian service companies despite the crash of crude oil prices.

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LOCAL CONTENT

Nigerdock Ranked among Nigeria’s Best 100 Companies to Work For

By Jerome Onoja Occupational Health and Safety, Welding, Fitting, Painting and Coating, Machining, Lifting and Rigging and Scaffolding and when they graduate, they become highly-sought after.

Nigerdock, a member of Jagal Energy, is the leading indigenous integrated support hub to the oil and gas industry providing: World class Engineering, Procurement and Construction (EPC) capability, the largest ship repair facility in West Africa and major logistics and base services without parallel in the Lagos area.

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eading indigenous energy services company, Nigerdock, has emerged the only one in its markets to be listed among the Best 100 companies to work for in Nigeria, according to Jobberman’s latest ranking.

Nigerdock was ranked 87th on the recently released list of companies adjudged and recognised as best employers of labour in Nigeria.

In the Jobberman ranking, oil and gas companies such as Shell, Chevron, ExxonMobil, and Total emerged in the 5th, 16th, 21st and 36th positions respectively. The 3rd Annual Jobberman ‘Best 100 companies To Work For’ focused on identifying, recognizing and celebrating top employers in Nigeria, as rated by employees and professionals.

Commenting on Jobberman’s ranking, Joy Okebalama Group Corporate Affairs Director, Jagal, noted that the company earned the recognition due to its core values of leadership, excellence, accountability and dynamism and an unparalleled focus on its employees and their capacity development.

She said, “While we are positioned to deliver work class services at our

10 Orient Energy Review March, 2017

state-of-the-art facility, within a fully integrated industrial free zone, we always give priority to safety, well-being and continual development of our workforce. We are above all committed to their health, safety, living environment and developing their capacity.

In terms of building capacity for our workers, Nigerdock’s Training and Development Academy provides the highest quality needs-based training that impacts on our service delivery and contributes to local content development. Sometimes our trainees arrive barely educated, but we transform them through our trainingprogramme which equips them to become qualified and accredited professionals with exposure to world class standards. Nigerdock is committed to ensure the highest levels of international competences are achieved and hence is accredited to City and Guilds, Nigerian Institute of Welders and several other comparable vocational education accreditation bodies,” she explained.

Located at the Snake Island Integrated Free Zone (SIIFZ), Lagos, Nigerdock is a self-sufficient facility that provides safe and standard working environment for employees. It offers access to 24-hour healthcare, power supply, world class Internet connectivity, state of the art offices and accommodations, recreational facility and high quality meals, all provided at affordable rates.

According to Jobberman, the ranking provides insight to job seekers on the companies they should have their eyes on, for employment and career growth, as well as providing opportunities for business prospecting.

To date the Nigerdock training academy has trained over 6,000 personnel in a range of skills including Project Management, Quality, www.orientenergyreview.com

LOCAL CONTENT

NCDMB to Flag-Off Egina Project in Q4, Applauds LADOL’s Compliance to Local Content

By Margaret Nongo-Okojokwu

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he Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Simbi Kesiye Wabote has applauded the pace of work at the Lagos Deep Offshore Logistics base (LADOL), stressing that he will be on hand to inaugurate the Egina FPSO in the fourth quarter of this year.

Wabote stated this in Lagos when he led a team of his officials and other top industry service providers and international oil companies (IOCs) on a facility tour of the base at the Apapa Ports Complex, Lagos.

LADOL is currently playing host to the fabrication of a $3.8 billion oil and gas logistics service facility commonly known as the Floating Production Storage and Offloading –FPSO rig, otherwise called the Egina project.

The project which has been applauded as first -of- its- kind in the sub-Saharan Africa is being handled by the Korea-based Samsung Heavy Industries (SHI) on behalf of Total Oil Exploration, with LADOL serving as its local content partner. He said the indigenous oil and gas logistics service provider is a testimony of the success story of local content laws in Nigeria.

On the pace of work at LADOL, he said: “So far so good I have seen remarkable progress. I was here in December last year

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and I saw some of these things been fabricated. Today I am here again, I can see a discipline work force. My only fear now is what will happen to the thousands of Nigerians working here if we do not have projects coming on stream. As you recall I have been going round to visit some of the IOCs in the last few weeks to ask them the projects they have on stream and their challenges.

“We are also looking at how the Nigerian content can help accelerate those projects so that we can keep Nigerians employed.

Luckily for us, this is the first integration on FPSO that is happening in Nigeria and I believe that nobody can tell is now that we cannot do it. Now we have fabricated six module, the next project should go beyond that, we cannot as a country go backwards it is only forward that we can go. So I tell project promoters, the IOCs and indigenous companies that we must have a benchmark in the future FPSO that we have in the country using Egina as a benchmark of what is acceptable in the country.

“We will continue to pursue the letters of the law, what the law wants to achieve in terms of local content, be it capacity for our fabrication industry, capacity for Nigerians. We must continue to move up the trajectory instead of coming down.

I also believe in the maxim and I say it everywhere I go that if there is no project there can be no local content. If Egina has achieved this others should be looking at surpassing it. “ The Managing Director of LADOL, Dr. Amy Jadesimi said the location of LADOL in Lagos was informed by the growth in oil and gas activities in the country, and that a deep offshore logistics company in the region will guarantee an effective control of domestication of deep offshore activities in the industry.

On why the NCDMB was at LADOL, he said he was there to inspect progress being made in the LADOL FPSO facility on the Egina project.

“As you heard him say, we are moving on schedule. On LADOL side we are committed to supporting more fabrication across the country because the more fabrication there is the more integration for us to do.

This is a none stop train and it is fantastic for local content,” she said.

The Chief Operating Officer, SHI Nigeria, Mr. Frank Ejizu, explained that the Quay side was ready to receive the FPSO, noting that the tracks have been certified.

On the workforce, Ejizu stated that 364 Nigerian welders have been qualified and awarded international certifications with which they can work anywhere in the world.

The NCDMB chief also visited the facilities of Dover Engineering, JC International and Thompson and Grace Limited, all located in Port Harcourt, Rivers State.

He explained that his visits to oil and gas facilities across the country were aimed at assessing capacities and confirming that Nigerian companies have firm footing in their areas of operation.

According to Wabote, information and observations gathered from the visits will be used during tenders and in planning for capacity development. He also promised to enlighten IOCs and project promoters on existing in-country capacities and ensure their utilisation during projects.

At Dover Engineering, Wabote noted that experts in offshore designs, FSPO designs and detailed engineering were in high demand and engineering companies must develop strategies to retain them so their competences will not be lost. He praised the company for forming a consortium with other engineering firms to deliver major projects, charging other service companies to emulate the model.

Orient Energy Review March, 2017 11

INTERVIEW

Downstream Deregulation: ‘We Are Addressing Governance Aspect of the PIB’ – Sen. Marafa

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he Chairman, Senate Committee on Petroleum (Downstream) sector, Senator Kabiru Marafa, stated in an interview at the 16th Nigeria Oil and Gas conference in Abuja, that the Senate had given its nod to the total deregulation of the petroleum downstream sector, but also with the passage of PIB as a tool to curbing corruption in the system. He spoke with newsmen, having Orient Energy Review in attendance. Excerpts: Tell us what Nigerians should expect from the planned deregulation of the downstream sector by the Federal government, as endorsed by the Senate committee under your watch?

This 8th National Assembly decided to give Nigeria a sense of direction as far as the downstream sector is concerned.

What the downstream sector requires actually, is total deregulation, and the PIB is under consideration as of now.

We are currently considering the government aspect of the PIB, intending to make it like a one-stop shop, where investors can have access to know the industry and the activities of the body that regulates the industry. We are going to work on the PIB in order to make it stronger for investors’ delight.

Can you expatiate more on the reality of this aspect of the PIB which we all know failed under the past leadership?

Let me go a little down memory lane.

We all know that the previous administrations contributed a lot to some of the woes that befell petroleum industry.

Also, that the PIB has suffered a lot of setback from two or three National Assemblies, and it failed to see the light of the day; discussions, deliberations went on for years, yet no success. But this present NASS has decided to do it with a different approach. God willing, it will be fulfilled in the next couple of

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weeks, after which we will go to the Fiscals, on how the monetary aspect will be championed. Thereafter, we’ll go to the Communities and social issues. I will say, as far as the Senate is concerned, we are doing everything possible, under the leadership of Dr. Bukola Saraki, who took it upon himself by assuring Nigerians that this Bill will see the light of day; and when that is done, the downstream sector will have a fresh breath of life.

Sir, do you mean that the PIB will be completely passed this year?

I wouldn’t understand what you mean by completely, but what I said is that, the three aspects from the bill will be assented to this year by God’s grace.

The Governance aspect will be done in the next couple of weeks, maybe by the end of March or early in April.

Meanwhile, the Community aspect has already gone through first reading, and is already coming up for second reading; if that is done, maybe we will give it another three to four months or lesser.

But before the actual passage of the Governance Bill, the Fiscal Bill would have gone through the first reading, and of course, we shall give it all the attention it needs.

You just mentioned that deregulation is the way out of the problems in the downstream sector, but over time, past governments have made attempts, but the coalition of labour and the civil society always kicked against it. What is the NASS doing to forestall such resistance?

As a nation, we have to make deliberate and conscious decision on what we intend to achieve as a people and as a country. Just few hours ago, the Senate ordered a probe into issue of subsidy again. The NNPC alone collected over

Five Trillion Naira (N5tr) of subsidy from 2006 to 2015; so subsidy is actually a cancer. Labour union, Civil Societies and others need to ask questions as stakeholders. What is subsidy all about and what value are we getting out of subsidy compared to the amount of funds injected into it. Now if you want to consider the actual amount collected

by NNPC and the Independent Marketers and so on, it is over Nine Trillion Naira (N9tr) within the scope of ten years. That is alarming because it is over our national budget. It is only in 2017 that our budget rose up to N7tr. In previous years, when we had budget range of between five and six trillion, what NNPC gulped have been double of Nigerian national budget, all on subsidy! The question here is, does common man on the street get the value of N10, N20 or N30 deductions from their transactions from the sector? But, if such amount of money is pumped into other sectors like health, mining, agriculture, railway system and what have you, will there not have been value addition to the lives of common man on the street? So, these are wagging questions that we must seat down and analyse. Each time, Labour would come with the agitation of improving workers’ salary, where would the money for salaries comes from?

Just few months ago, the Automotive Gas Oil (AGO) subsidy was removed, did heaven fall? Are we not better-off now? We have to look into things like this and ask ourselves, “who does the status quo favour?” Maybe, less than 0.0001% of the population! And it is this subsidy issue that is behind the failure of our refineries. People are feeding fat on subsidy; just like the problems of Power generators merchants and the epileptic electricity supply. If we put together all the monies used in buying power generators, it’ll be enough to fix our Power sector problems, but because we are sentimental about it, we end up robbing Peter to pay Paul. So, that is also what is applicable to the Oil and Gas sector. We need to take a look at it as a people and to educate the common masses on what values they derive from the so-called subsidy compared to what they would benefit from paying, say N200 per litre on PMS in order to have infrastructures fixed, such as: roads, airport maintenance, agriculture and many more. The man on the street should be able to differentiate which one is better.

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LOCAL CONTENT

INTERVIEW

Dangote Lets Contract For Nigerian Refining Complex Still on the deregulation, do you think the refineries would be better off with the deregulation as you are canvassing?

You don’t need to be an engineer to know that the refineries will work. Which one will be more convenient: to refine in London or to refine in Kaduna? Which labour is cheaper? Why we keep importing is simply that some people are feeding fat on subsidy. By virtue of taking your products abroad to be refined, you take out your employment generation. Consider the numbers of people working in Port Harcourt, Warri, and Kaduna refineries, because you need to know how much employment is lost from Cleaners to the level of Managing Directors when you take your crude outside. So, everyone needs to know how many problems will be solved by the time you do the arithmetic.

You appear optimistic about it; tell us how best government could fast-track and achieve the unbundling?

All we need do is to allow the market force to determine these prices; number one, the prices will crash! Number two; you will have competition, people will come and build these refineries and ensure that they work because the market is here. We are a nation of almost two hundred million people. Even with the fear of prices soaring up, doesn’t really count. We have seen it in the Communication sector. At the time GSM came on board, SIM card was N20,000, but today it is almost free of charge. We were paying per minute at the time but today, we pay per second, under a stiff competition. So, I don’t know why we are pessimistic of imminent changes. I want to maintain that, Nigerians need a proper understanding as regards both sides of the coin as far as subsidy in the oil sector is concerned in order to make their decision.

I don’t think the hypocrisy surrounding arguments on deregulation is healthy for the nation, and that is my view.

Can you tell us more about the 3 to 5 years waiver that the Federal government is planning for investors coming to invest in the nation’s refinery?

Unless you allow the market forces to determine prices in whatever you are doing, I don’t think whatever waiver you are going to give will work.

Rather, allow the deregulation of the sector; let market forces work, while government face other problems, and take their taxes. The waiver would be great if you are going to give it as incentive, not neglecting the other recommendations, otherwise, that won’t make sense.

D

angote Oil Refining Co. (DORC), a division of Nigerian conglomerate Dangote Industries Ltd (DIL), has let a contract to MAN Diesel & Turbo SE (MDT), Augsburg, Germany, to provide equipment and associated technology services for its grassroots integrated refining complex now under construction in south-western Nigeria’s Lekki Free Trade Zone, near the capital of Lagos, OGJ reports.

MDT will build and deliver two axial compressor trains driven by 30-Mw turbines to support operations at the refinery’s fluid catalytic cracking plant, as well as provide a comprehensive auxiliary service package, including equipment commissioning services, MDT said.

While a precise cost of the contract was not revealed, the service provider valued the order in the double-digit million dollars.

MDT said it expects to deliver the equipment sometime in 2018, ahead of DORC’s planned startup of the entire $12-billion refining and petrochemical complex in 2019.

Africa—more than 37 billion bbl—the country currently imports most of its refined product requirements due to lack of domestic refining capacity.

Once completed, however, DORC’s refinery will be able to satisfy 100% of Nigeria’s fuel demand, said Alhaji Aliko Dangote, DIL’s president and chief executive.

Additional planned capacity of the refinery comes alongside a series of efforts under way by the Nigerian government to modernize and expand capacities of refineries operated by stateowned Nigerian National Petroleum Corp. beginning this year as part of a strategy to meet Nigeria’s domestic demand for refined products and reduce its reliance on foreign imports. *Coutesy: Robert Brelsford, Oil and Gas Journal

Project details According to social media posts from the state government of Lagos as well as details of a previous contracts awarded for the former $11-billion project, the integrated complex will include a 650,000-b/d crude distillation unit and 3.6 million-tonne/year polypropylene plant, as well as units for the following major processes: residual FCC; diesel hydrotreating; continuous catalyst regeneration; and alkylation.

While Nigeria holds the second-largest amount of proved oil reserves in

www.orientenergyreview.com

Orient Energy Review March, 2017 13

LOCAL CONTENT

Obijackson Group Says Local Content Law Boosting Growth of Indigenous Companies …Group ventures into Deep Offshore to adopt cost-cutting measures

By Margaret Nongo-Okojokwu

O

il services and Fabrication Company, Obijackson Group has commended the implementation of the Local Content Laws by the Federal Government, which created opportunities for indigenous oil and gas companies to grow.

Mr Simeon Tor-Agbidye, the Assistant General Manager (AGM), Group Business Development, Obijackson group who gave the commendation said that a subsidiary of the Obijackson Group – Energy Works Technology Limited, is fabricating part of the topside facilities of Total’s Egina floating 200,000 barrels per day production, storage and offloading (FPSO) vessel.

He said that the Local Content Law has recorded great success in creating homegrown skills in the country’s oil and gas sector of the economy.

He said that the Nigerian Content Act had opened the floor for indigenous companies to prove that they were capable of playing competitively in the international oil and gas scene.

According to him, Nigerian companies have the capacity to carry out contracts efficiently like other foreign companies dominating the oil and gas sector of the Nigerian’s economy, adding it clearly means that the Nigerian Local Content Act is a success because Nigerian companies, technicians, and engineers have acquired expertise, and built capacity that has increased indigenous participation in the Nigerian Oil and Gas sector.

“With the Local Content Act, we have

made significant progress as a nation and assumed a position of dignity amongst International Oil Companies (IOCs), and other players in the sector, who are the beneficiaries of our first-rate services,” he explained.

Tor-Agbidye said that before the implementation of the Law, Nigerian companies who had the competence in the oil and gas business were marginalised, but the situation is gradually changing now.

He said the level of the implementation of the Law had been quite impressive, stressing that the compliance level by the International Oil Companies (IOC) has been satisfactory to a reasonable extent.

He explained that the Nigerian Content Act had been quite effective, useful and well cut out because it was long due.

He said that the Local Content Law had come to stay and the IOCs were effectively obeying and implementing such laws.

“We have completed scope for that project and a few weeks ago, we had a sail off for the Oil Loading Terminal (OLT) piles for the project.

We sailed them off to South Korea where they will be integrated on the FPSO. We have finished that and we are at the final stages of completing K2s pipeline for Shell Petroleum Development Company (SPDC)”.

Continuing he said, “We are also progressing smoothly with the pipeline.

The project is an engineering, procurement and construction contract for the 40kmx20 inches export pipeline to re-route Kolo Creek gas to Soku Gas Plant,’’.

Tor-Agbidye said that the company had also recorded smooth progress with the OB3 pipeline, adding that Obiafu/Obrikom–Oben is an EPC contract for the 64.5km x 48 inches gas pipeline project.

14 Orient Energy Review March, 2017

He said that the project will soon be completed, adding that the scope of OB3 was actually split between Nestoil and Oilserv.

He said that while Nestoil is coming from the West, Oilserv is coming from the East.

“Completion time for the project cannot be given right now, but we are progressing nicely.

One of the major achievements we have accomplished on this project is being able to surmount the challenges of the terrain.

Coming from the West, we had some of the most difficult terrain crossing several rivers. We have crossed these rivers successfully with the innovative horizontal directional drilling (HDD) technology with our client, the Nigerian National Petroleum Corporation (NNPC).

Our subsidiary, NestHak HDD Limited is an expert in the technology and only company in Nigeria that has 100 per cent success in the job. A few days ago we completed the crossing of the Ashe River, and currently, we are looking to the crossing of the River Niger” he said.

According to him, we will drill under the River Niger and pull a pipe through so that it doesn’t lie on the water and constitute a hazard to shipping and other users of the river. We will lay pipes under the River Niger. It is almost two kilometers (2000 meters). It looks small but the way it is done is not an easy feat.

In another development, the Group pointed out that it had adopted far-reaching measures to substantially cut its costs, especially as it plans to venture into the deep offshore segment of the petroleum industry.

In an interview in Abuja, Mr. Chris Ijeli, Group Head, Business Development, Nestoil Limited, said the Obijackson Group is planning to go more into deep offshore and also build into platform facilities and offshore facilities. To do this he said it is planning an optimization of its processes, both in construction and fabrication, so that it can cut down its cost and be competitive, not only in Nigeria, but also in the sub-region.

On plans for the future, Mr Agbidiye also noted that the company is positioning to tap into the forthcoming opportunities presented by the Zabazaba field, promoted by ENI.

www.orientenergyreview.com

LOCAL CONTENT

NNPC Rates Compliance to Nigerian Content Act At 56%

By Sola Akingboye

T

he Group Managing Director of the Nigerian National Petroleum Corporation (NNPC) Dr. Maikanti Baru, has commended the 8th National Assembly over the improved relations between the Corporation and the lawmakers, confirming that there is improvement on the level of Local Content compliance across installations, fabrications, procurement and various level of engineering in the oil and gas industry.

Dr. Baru revealed this during an interactive session between the Management of NNPC and members of the House of Representatives Committee on Local

Content at the NNPC Towers in Abuja. “It is indeed a delightful day for me as the Honourable Chairman and members of his committee have exhibited a paradigm shift by coming to NNPC for an interactive session.

This shows the improvement of relations between us and the National Assembly and particularly the Committee on Local Content,” Dr. Baru stated.

He noted that within the short period that the Local Content Committee had gone on oversight visit to some Oil and Gas Companies, it had achieved significant progress in ensuring that the lofty ideals of the Nigerian Content Act of 2010 was strictly adhered to.

Dr. Baru informed that NNPC, as the incubator of the Nigerian Content Act, was one of the most compliant organizations in respect of the local content law and had also concerned itself to encouraging all its partners in the Nigerian Oil and Gas Industry to comply with the law.

The NNPC GMD stated that there

had been a steady growth in the level of compliance with the law and that as at today there was 56 per cent level of compliance, especially in the area of installations, fabrications, procurement and various level of engineering.

While he described the session as a “paradigm shift that would deepen the relations between the National Assembly and the Corporation,” he stressed that a smooth relationship with the legislature was very imperative for progress.

Earlier, the Chairman of the Committee, Hon. Emmanuel Ekon, said the interactive session with the NNPC was informed by the need for a strong synergy in order to ensure full compliance to the Local Content Act to enable Nigerians benefit from the Nigerian Oil and Gas Industry.

He said: “We intend to amend the act so as to extend it to other sectors of the economy. We want to work as partners and not confront the executive. We believe by so doing, Nigerians will gain more.”

Ekon said.

Angola Prepares Legislation on Local Content in the Oil Sector of domestic enterprises to reduce the import of goods and services and ensure the diversification of economy.

T

he Angolan government is preparing a set of legal and economic measures on local content to ensure greater participation by domestic companies in providing services to the oil sector, the country’s Oil Minister said recently in Luanda.

Botelho de Vasconcelos also said that because the ministry is responsible for promotion of local content in the oil sector, it will present a strategic project for integration and development

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According to Angolan news agency Angop, the minister, who was speaking at the proclamation ceremony of the Angolan Association of Geosciences and Support for the Oil Sector (AEAGSAP), said the project would weaknesses and risks associated with local content production to make it a reality.

The minister stressed that the use of the national services market will benefit all national and foreign stakeholders, bringing advantages to Angolans such as increased national income, new jobs, more tax revenue and a greater supply of goods and services.

“The regulation on local content, legislation on which is dispersed, should

be concentrated in a law that protects national businesses,” he said.

Botelho de Vasconcelos stressed that the participation of national companies in the oil sector is desirable and added that the Oil Ministry would facilitate contacts for establishing partnerships, “thus contributing to economic growth and development.”

The Angolan Association of Geosciences and Support for the Oil Sector proposes to help local businesses to establish partnerships for exploration projects and services, participation in national reconstruction, employment promotion and enhancement of national skills.

*

Source: www.macauhub.com. mo

Orient Energy Review March, 2017 15

POWER

Bill Payment Will Revamp Power Supply-Adesina Dirisu Yakubu, Abuja, FCT audits of bills submitted by energy distribution firms.

The government’s decision is a fresh boost in liquidity in Nigeria’s power sector and is coming on the heels of the N701 billion guarantees for the Nigerian Bulk Electricity Trading Plc, NBET announced about a fortnight ago.

O

Ever since he assumed duty as Minister of Power, Works and Housing more than a year ago, Babatunde Raji Fashola has been battling the barrage of criticisms directed at government by distribution companies (DisCos) over unpaid bills. For the Minister, the seemingly unwillingness to pay stems from uncertainties surrounding the exact amount owed by ministries, departments and agencies (MDAs).

Speaking recently at a one-day Power seminar in Abuja, the Managing Director, Sahara Power, Kola Adesina lamented the increasing indebtedness of government and the private sector, noting that the development does not support continuous investment in power generation. Egbin, according to him, is capable of generating a total of 1, 100 megawatts of electricity but insisted the money being owed by the distribution companies is enough to send anyone out of business.

“The last time I checked, we are being owed over N100 billion; yet we are still doing our part to make sure power is available for evacuation.

This is not good for the power industry because at the end, if we cannot sustain the cost of generation; there would be nothing left to transmit and distribute,” Kola stated.

It appears that the lamentation has now moved the hand of government given its readiness to begin the payment of all verified debts owed over the years to DisCos and GenCos for power supplied. This is against the backdrop of findings in the on-going 16

At the 13th Monthly Meeting of Power Sector Operators presided over by Fashola recently at Ughelli, Delta State on the on-going verification of government’s indebtedness to distribution companies, a report made available to the media, indicated moves by the MDAs to immediately clear all debts as a way of empowering electricity firms to do more in service delivery.

A communiqué issued at the end of the meeting stated that the audit team has so far received claims amounting to N59.3 billion, out of which an estimated N51 billion representing 86 per cent of the debts, are owed by top 100 energy consumers, made up of the military and defence installations across the land.

Consequently, the National Delta Power Holding Company (NDPHC) is set to embark on projects aimed at connecting rural communities playing host to the National Integrated Power Projects, NIPP, with progress reportedly at top gear in Egbema, Olorunsogo, Magboro, Omotosho and Ikot Nyong communities.

According to Orient Energy Review (OER) findings, Magboro would be connected next month while connection for Olorunsogo is expected to be completed in June this year.

The meeting, according to reports also witnessed the presentation of reports on ongoing power projects in Ondo, Edo and Rivers States (Transmission Company of Nigeria report); completion of maintenance works in Awka, and Maiduguri aimed at improved service delivery as well as audited accounts by the Nigerian Electricity Regulatory

Orient Energy Review March, 2017

Commission, NERC. Aware that the economic progress of the country is dependent on the optimal performance of the power sector, the meeting commended government for the recent approval by the Federal Executive Council of funds to offset payment due power generating companies, GenCos, for power generated and supplied to the national grid Participants also expressed joy with government’s decision to release the sum of N701 billion to NBET for payment to GenCos under the power purchase agreements. DisCos were however warned not to renege in their payment of invoice to the market operator for services provided by Transmission Service Provider (TSP) and Independent System Operator (ISO).

The Minister called on the people of the Niger Delta to embrace peace, saying without it, development of the region would be elusive.

“The governors of the Niger Delta have been and must continue to be the champions of peace. The youth of the Niger Delta must recognise that nobody can be more Niger Deltan than Tony Elumelu (Chairman, Transcorp Power Limited). He chooses to invest here. So every time you take away gas from this plant, you are hurting one of us, you are hurting one of your own and we are losing opportunities,” Fashola stated.

With this move, power supply is expected to be relatively stable in the next couple of weeks as the liquidity challenge is now being addressed. Nevertheless, in the words of Fashola, meters must be provided to customers to enable them pay appropriately for energy consumed. Anything short of this would be tantamount to a negation of the change agenda of incumbent administration.

www.orientenergyreview.com

ALTERNATIVE ENERGY

Nigeria to Allocate $30million in 2017 Budget to Solar Power Projects -REAN of $30 million to solar projects in the 2017 budget, this month. This, he said, will be used to fund offgrid solar projects, photovoltaic manufacturing, and transmission upgrades.

T

he Renewable Energy Association of Nigeria (REAN) has said that the country might turn to solar to generate more of its power.

According to the REAN Executive Secretary, Godwin Aigbokhan, Senators in Abuja are expected to make a decision on the allocation

“It just gives you an idea of how the government sees solar as part of the total energy mix,” he added.

Nigeria is part of a growing list of OPEC countries increasing the use of green power, Bloomberg reports.

$21.8 billion annually powering diesel generators so as to have access to electricity.

The Federal Government said it wants to increase the contribution of renewables to its energy mix from 13% in 2015 to 23% by 2025.

In this framework, the Niger Delta Power Company in January signed an agreement with Azuri Technologies to provide power systems for 20,000 rural households without access to the grid.

According to Nigeria’s Acting President, Yemi Osinbajo, this deal falls in line with the government’s commitment to boost access to electricity.

A study by German developing agency, GIZ, has shown that households and small businesses in the country currently spend about

Nigeria to Amend Laws on Power Generation he Nigerian National assem-

T

bly has revealed plans to amend laws on power generation, transmission and distribution in the country. This is aimed at following the footsteps of Germans who allow residents to combine efforts and local resources to generate clean and renewable energy.

According to Bukola Saraki, President of the Nigerian Senate, the project can be achieved in Nigeria if the government and operators take it seriously.

“We have to amend the laws to allow communities to generate energy that is more than 10 megawatts and even the laws about power transmission and distribution have to be amended to allow more creativity and involvement from the private sector,” Saraki added.

He said the energy crisis currently being faced in the country remains a priority in the agenda of the Senate as it is vital in eradicating poverty and unveiling the potentials of the people. www.orientenergyreview.com

…Senate set to adopt German model

Orient Energy Review March, 2017 17

WAIPEC 2017

West Africa’s Oil & Gas Potentials Unlocked at WAIPEC 2017 LNG Limited, Dr Yakie Ogon; Chief Executive Officer, TenOil Petroleum and Energy Services Limited, Dr. Tony Chukwueke; Associate Director – Financial Advisory Services, PwC, Nigeria, Olumide Adeosun; and Chief Executive Officer, First Hydrocarbon Limited, Femi Bajomo.

T

he inaugural West African International Petroleum Conference and Exhibition (WAIPEC) has come and gone, providing delegates and visitors world-class conference program and exhibition.

The two-day event which kicked off on the 22nd of February came to a climax the next day, focusing on unlocking strategic value, leveraging innovation, best practices and technology to grow West Africa’s energy industry, with specific discussions on how West Africa’s oil and gas sector can remain competitive in a tough global market.

The opening address kicked off proceedings with a key note address delivered by Dr. Maikanti Baru, Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), on ‘Collaboration and local capacity development as an enduring strategy in a low oil price environment.’

First E&P Development Company Limited, Demola Adeyemi Bero; Chief Operating Officer, Upstream, NNPC, Dr. Bello Rabiu; former Managing Director and Chief Executive Officer, Conoil Producing Limited, Dr. Moses Ebietsuwa Omatsola and Managing Partner, Compliance Professionals Plc, Ifueko Omogui-Okaro.

Then followed expert panel discussion, featuring Managing Director of SEPLAT, Austin Avuru; Executive Director/GM Business Development Upstream Nigeria Commercial, Mobil Producing Nigeria Limited, Seyi Afolabi; Managing Director,

Finally the role of new technology was addressed, with a topical panel discussion featuring the Director –Technical, Addax Petroleum Development (Nigeria) Limited, Chikezie Nwosu; Corporate Strategy & Planning Manager, Nigeria

18 Orient Energy Review March, 2017

Best practice and collaborative efforts was also of paramount focus at the conference, with Dafe Stephen Sejebor, Group General Manager, National Petroleum Investment Management Services (NAPIMS) highlighting the ‘Government expectations for collaboration in joint ventures’ and Bayo Ojulari, Managing Director, the Shell Nigeria Exploration and Production Company following up immediately with a discussion on ‘Service company and operator collaboration models – drawing on experience from other oil provinces.’

Day Two of the conference dwelled on local content development – with Executive Secretary, the Nigerian Content Development and Monitoring Board (NCDMB), Engr. Simbi Kesiye Wabote, leading with his discussions on ‘Identifying policies and factors that encourage and hinder local content development in Nigeria and the region, strategies for growing the industry.’

This theme was then debated by a panel featuring, Chiedu Oba, General Manager, National Content Development, Shell Petroleum Development Company of Nigeria, Dr. Timi Austen-Peters, Chairman, Dorman Long Engineering, Olusoga Oduselu, General Manager, Chevron Nigeria, Tunde Adelana, Executive Director, Monitoring & Planning, NCDMB, Taofik Adegbite, Chief Executive Officer, Marine Platforms Limited, Hon. Emmanuel Ekon, Chairman House Committee on Local Content, Daere Akobo, CEO, Plant Engineering and the NCDMB boss.

The proceedings ended with further discussions on innovation and best practices across the sector, including the spheres of upstream oil and gas development.

www.orientenergyreview.com

WAIPEC 2017

NNPC to Improve Utilisation Capacity with Private Sector Collaboration

G

roup Managing Director, Nigeria National Petroleum Corporation (NNPC), Dr. Maikanti Baru has called for improved private sector collaboration in order to improve petroleum capacity utilisation in the country, saying there are huge opportunities which the private sector can benefit from if it partners with government.

be how we can partner with other West Africa countries to get things going. Fixing of the refineries is not the main challenge; there is the issue of pipeline vandalisation. The minister for state for Petroleum is doing a lot to involve the Delta-Niger communities. Fixing the refineries requires huge capital outlay and this is why we need private sector collaboration,” he added.

Baru who disclosed this recently at the maiden conference of West Africa International Petroleum Exhibition and Conference (WAIPEC) With the theme; ‘Collaboration and Local Capacity Development as an Enduring Strategy in a Low Oil- Price Environment’ in Lagos, noted that in West Africa, the entire production capacity is about 6,900 barrels, from which Nigeria contributes 73 percent, adding that “the capacity of what we are getting is very low.”

Baru further explained that the success story of the Detailed Engineering Design (DED) of the Topside of TUPNI’s Egina FPSO project delivered safely, on time and within budget by a consortium of Nigerian Engineering companies led by NETCO, describing the feat as a good example of successful collaboration and capacity development. “No engineering project of this magnitude has been handled locally because no single local company had the capacity to do so,” he stated.

Represented by the Chief Operating Officer Upstream NNPC, Managing Director of National Engineering and Technical Company (NETCO), a subsidiary of NNPC, Mr. Siky Aliyu, Baru said the corporation is committed to improving the utilisation capacity of the refineries to attain about 60 capacity utilisation by the end of 2017 or the first quarter of 2018.

He also pledged the commitment of the corporation to achieving 90 percent capacity utilisation in 2019.

The NNPC boss said a lot is being done while expressing optimism that there are opportunities inherent for investors to key in and harness to boost the growth of the sector.

“There are other potential areas in trade diversification. Here, our focus should

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He added: “The collaborative success story of the DED of Egina FPSO project, which represents only a maximum of 10% value chain of the FPSO, has indeed repositioned the Nigerian Engineering companies. Rather than being the traditional competitors, they are now partners in progress and they are expanding their synergetic arrangements in readiness to take up other projects of this magnitude. Examples of such upcoming

projects are; SNEPCO’s Bonga South-West FPSO projects, NAE’s Zabazaba FPSO project, Exxon Mobil’s Bosi FPSO Project, NLNG Train 7 and/or NLNG Debottlenecking Project, etc.”

“If so much can be said to have been achieved with DED which represents just about 10% of a typical FPSO project, one can only imagine what other opportunities exist in the remaining 90% of the project value chains in the procurement and construction scope of work for such projects which are characterized by high requirements for expertise, finance and other capacity requirements.

“It is imperative that local companies rendering services in this larger segment need to emulate the Engineering companies by coming together to position themselves for effective competition with international companies who currently have a competitive advantage in this current low price regime,” he said conclusively.

In his address, the President of Petroleum Technology Association of Nigeria (PETAN) Bank Anthony Okoroafor, said WAIPEC is committed to promoting the region’s oil and gas industry, while seeking the industry best practise, explore new technologies and develop commercial opportunities for business and international investment.

Okoroafor said the inaugural event commissioned

by PETAN is focused at serving the industry as an integrated platform for business organised by the industry.

Orient Energy Review March, 2017 19

PHOTO GALLERY

WAIPEC 2017 PHOTOPEDIA

20 Orient Energy Review March, 2017

www.orientenergyreview.com

PHOTO GALLERY

FACES @ NOG CONFERENCE 2017

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Orient Energy Review March, 2017 21

NOG 2017

NOG 2017: Industry Stakeholders Set Agenda in a Recessed Economy The recently held NOG conference in Abuja brought together big players in the oil and gas industry, with the sole aim of brainstorming on the future of the highly volatile sector. With government representatives in attendance to avail the nation of the policies in place; participants got value for time spent as the three day event lived to its billing.

By Dirisu Yakubu, Abuja, FCT

T

he Nigerian oil and gas industry holds the key to harnessing the nation’s growth potentials despite the downturn in the economy occasioned by the fall in the global oil prices. To make the most of the industry, the Nigerian National Petroleum Corporation, NNPC recently expressed its commitment to grow the Nigerian Petroleum Development Company, NPDC’s crude oil production capacity to 500,000 barrels per day by 2020.

Additionally, the Corporation said it would also grow NPDC’s gas production to 1500mmscf per day within the same period.

The Group Managing Director of

22

NNPC, Dr Maikanti Baru, who stated this in a keynote address entitled: “NNPC’s Commercial Strategy and Priorities” at the recently concluded Nigeria Oil and Gas (NOG) Conference and Exhibition in Abuja, added that everything was being done to achieve the target reserve growth as well as increase national crude oil production to 3million barrels per day up from the current 2.2 million barrels per day.

According to him, the NNPC would sustain frontier exploration in the inland basins to meet government’s aspiration to achieve crude oil and gas reserves of 40 billion barrels and 200 trillion cubic feet respectively by 2020.

Dr. Baru put the current oil and gas

Orient Energy Review March, 2017

reserves at 37 billion barrels and 192 trillion cubic feet (tcf) respectively.

“Furthermore, efforts are currently ongoing amongst all stakeholders to reduce the level of gas flaring by converting most of the flared volumes to ensure commerciality of the gas resources”, he noted.

While declaring open the 2017 edition of the NOG Conference and Exhibition at the International Conference Centre, Abuja, Dr. Maikanti Baru, said Nigerian oil and gas industry was on the path of recovery with crude oil price on the upswing, decline in pipeline vandalism and drop in restiveness in the Niger Delta. www.orientenergyreview.com

NOG 2017 Dr. Baru, who expressed delight that the NOG Conference which could not hold in 2016 has roared back at a time when hope was rising for the industry, stated that there were indicators that things were beginning to shape up for the industry.

The first indicator in this regard according to him was that cases of pipeline vandalism have reduced with a positive impact on crude oil production.

“We are having a lot of engagements with people in our core area of operations in the Niger Delta and this is bringing a lot of hope.

If we go by the number of pipeline vandalism cases, they have dropped to an average of 20 per cent on a monthly basis as against a similar period last year. This is an indicator that calm is returning to the environment”, he said.

On gas commercialization, the NNPC boss said efforts were on top gear to raise between $3.6 and $4.5 billion to build the Abuja-Kaduna-Kano (AKK) pipeline, capable of generating 3.2 gigawatts (GW) of electricity for the country.

“Beyond growing gas for the power sector, there has been a strategic positioning of the sector to support massive gas-based industrialization. We will incubate and midwife a portfolio of critical and mutually dependent investments (Central Processing Facilities, CPFs, Fertilizer, Petrochemical, Free Trade Zone, FTZ, infrastructure and Ports) which will jumpstart the gas revolution agenda. NNPC intends to develop or take equity in some of these gas-based industries such as fertilizer and others”, he said.

Another priority for the Corporation, according to the GMD, is the rehabilitation of the refineries, adding that his management has secured the approval of the Board to pursue the Turn Around Maintenance, TAM with a view to increasing their capacity utilization to above 60 per cent.

He expressed confidence that diligent execution of the initiatives would increase the commerciality and profitability of the Corporation in the near term.

Meanwhile, legion of big players in the oil and gas industry were not left out of the optimism as speaker after speaker expressed hope in the ability of the country to take comwww.orientenergyreview.com

parative advantage of her natural endowment to drive the change needed to make the nation truly the giant of the African continent.

Of paramount importance, they warn, is the need to formulate and implement key policies directed at revamping the industry for good.

Senator Omotayo Alasoadura, chair of the Senate Committee on Petroleum (Upstream) who was a panelist on Day 2 of the conference said the National Assembly would do everything within its power to ensure the smooth conduct of business in the sector.

In the words of the lawmaker, a lot is being done to make Nigeria reap maximum revenue from its oil and gas resources, noting that in no distant time, the Petroleum Industry and Governance Bill (PIGB) would be passed into law; a remark that elicited thunderous applause from conference participants.

“The PIGB is almost certain to become law as it has reached the third reading stage. Most likely, before the end of March or first week of April, we will be through with it,” the lawmaker assured.

Important as legislations are to the revival of the industry; there is the increasing need to place premium on local refining of crude if only to save enough foreign exchange for a country still battling the weight of a recession. Apart from the routine TAM, the refineries need to be run efficiently and profitably with a near zero tolerance to wastage and low capacity. Quick fixes would have to be done away with in preference for a total overhauling of the existing refineries to make this noble aim attainable.

Good enough, Anibor Kragha, Chief Operating Officer, Refineries at the NNPC disclosed the plan of the corporation to comprehensively fix the refineries to make them deliver optimal service in the long run.

refineries in the past 15 years. This coupled with militancy in the oil producing areas of the Niger Delta negatively impacted production and ultimately birthed low earnings for the country.

“We had over 2000 attacks on pipelines in the last four years and the NNPC spent nearly N10 billion annually on gas pipeline repairs.

These challenges have had a negative impact on the company’s bottom-line,” Kragha lamented.

It’s gratifying that the Organization of Petroleum Exporting Countries (OPEC) is working round the clock to sustain the current incremental but gradual leap in oil prices. Consistent engagement with relevant stakeholders is key to making this a reality as stated

by Mohammed Barkindo, OPEC Secretary General at the recently concluded Nigeria Oil and Gas Conference and Exhibition.

According to the OPEC scribe, the organization is determined to address the challenges which threatened the market, almost knocking it off balance. He said, “For the first time in history, we were able to build a platform of 24 producing countries within six months in order to address the stock overhang which has been the variable to the supply equation that had sent this market off balance since 2014.”

“The NNPC is determined to move away from the approach of quick fixes and undertake a comprehensive revamp of the plants,” said Kragha, adding that for a start, the three existing refineries would be able to meet domestic demand at the end of the exercise. “Bringing the refineries back on stream would mean increased capacity to meet local demand,” he noted, arguing that the trouble stemmed from the fact that there was no meaningful investment in the Orient Energy Review March, 2017 23

NOG 2017

OG 2017

Barkindo further added that the smart move by OPEC in the wake of price fall is now fated to turn the economies of member countries for good, especially in the long-run. “I can confidently report that those… events have altogether changed the energy landscape and turned a historic page in oil for good,” he said, noting that Nigeria is on the verge of reaping the gains of OPEC’s initiatives as well. “We are on course of pulling this industry out of the worst recession that we have entered to restore stability to the market on a sustainable basis that will allow investments to come back on a continuous basis,” Barkindo submitted.

Oil prices fell abysmally low in the last quarter of 2014 from over $100 a barrel to less than $40, culminating in the inability to carry out

many capital projects highlighted in the budgets for the oil and gas industry.

However, there are reasons to be optimistic about the future given the encouraging assurances given by Dr. Emmanuel Ibe Kachikwu, Minister of State for Petroleum Resources. The government of President Muhammadu Buhari, according to Kachikwu, is committed to creating an enabling environment that would guarantee returns on investment and value for money. Speaking extempore at the NOG Conference, the Minister said a sustained investment of $10 billion annually for the next four years is needed to transform the oil and gas industry given the infrastructural decay occasioned by years of negligence by successive administrations.

While calling on oil companies to cut cost, Kachikwu noted that though oil prices are currently on the rise, there’s no guarantee against further fall; a development, he said call for some form of mitigation, especially on the part of oil companies, including the indigenous and the International Oil Companies, IOCs. “There is no guarantee that oil prices may not tumble to as low as $40 per barrel again. I believe oil companies should look at cutting cost in their operations,” he stated.

And more than ever before, the Minister promised continuous engagements with relevant stakeholders in the Niger Delta to tackle incidences of oil theft, vandalism and all forms of criminality in the region.

ExxonMobil Bags 2017 NOG Excellence Award …As Marine Platforms Wins Best Technology Company of the Year

E

xxonMobil Nigeria Unlimited has won the excellence award at the recently concluded 2017 Nigeria Oil and Gas (NOG) Conference in Abuja.

The News Agency of Nigeria (NAN) reports that the company received the award at a Gala Night of the conference to honour companies that had done well in the sector over time.

Dr Maikanti Baru, the Group Managing Director (GMD) of Nigerian National Petroleum Corporation (NNPC), lauded the impressive investments b y ExxonMobil in the oil

24 Orient Energy Review March, 2017

and gas sector.

Baru, who was represented by Mr. Saidu Mohammed, the NNPC Group Executive Director (Gas and Power), said ExxonMobil merited the award given its active roles in the industry.

According to him, the award is a well-deserved one based on the company’s significant impact in the oil and gas sector.

The GMD also applauded the organizers of the 2017 Nigeria Oil and Gas Conference, adding that ‘this year’s conference is unique in various areas’.

He pledged NNPC commitment to

support the conference and sponsor the gala night because it is the only platform where experts, stakeholders and engineers meet annually to discuss issues affecting the sector.

“We will ensure optimal participation of the NNPC and stakeholders at the conference to drive investments and productivity in the sector.

We appeal for better participation in subsequent years so as to develop the industry,’’ Baru said.

Dr Alirio Parra, a member of the Board of Directors of CWC Group and Chairman of the 2017 NOG Conference, commended ExxonMobil for working hard to merit the award.

“The massive multinational investments of ExxonMobil both in Nigeria and internationally is impressive,” Parra said.

The chairman said that the conference stood as rallying point for stakeholders in the oil and gas business.

Marine Platforms, an oil service operator, also won the Best Technology Service Company of the year.

NAN reports that the four-day conference recorded about 6,000 conference delegates and 250 exhibitors.

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NOG 2017

Upstream Sector and the Imperative of Collaboration

By Dirisu Yakubu, Abuja, FCT

T

he upstream sector of the Nigerian Petroleum industry holds the key to the present and future growth of the nation’s energy sector.

With an array of respectable International Oil Companies, IOCs and many indigenous firms holding their own in exploration and drilling, there is a general expectation that the industry could be turned around given the focus of the present administration in the task of developing the nation’s oil and gas reserves.

This requires increased level of partnerships and collaborations amongst the players as experts brainstormed on the way forward in the recently concluded Nigerian Oil and Gas (NOG) Conference in Abuja, the Nigeria’s capital.

Speaking on “Energizing the Upstream Sector through Increased Collaboration,” panelists at the NOG Conference harped on the importance of building and sustaining synergies which in their words, help greatly in the task of shouldering risks and business uncertainties.

Moderator of the session and Managing Principal Partner, OJA Petroleum Services Limited, Jimmy Ahmed said the time has come for companies to collaborate in areas of common strength and capacities, arguing that uncertainties associated with businesses in the upstream sector would be better mitigated when cost fluctuations are bore by more than a single entity.

“This is the time for companies to come together and trust themselves by pooling resources (money, equipments, technicals) in the execution of contracts. This will go a long way in fostering further partnerships in the future, thus leading to improved service delivery,” Ahmed stated.

For Osagie Okunbor, Country Chair, Shell Companies in Nigeria and Managing Director, Shell Petroleum Development Companies, SPDC, gov-

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ernment owes it a duty to Nigerians to ensure that companies do well, noting that the public sector must find a way of building close ties for the sake of the industry.

“Government must ensure that companies do well in their production capacities. Both need to collaborate for good,” said the Shell boss.

Okunbor’s remark is premised on the fact that a good number of companies have either folded up or are gasping for breath owing largely to their inability to operate in a harsh business environment. Apart from the difficulty associated with ease of access to loans, companies have had to put up with poor fiscal regimes, leading to exodus of some to neighboring countries in the past few years.

One man whose contributions drew a thunderous applause from participants was Sadiq Adamu, Executive Director, Mobil Producing Nigeria Unlimited.

According to Adamu, collaboration is important given the fact that some Nigerian companies do not respect the terms of contract. He also pointed out that to be taken seriously, there’s the compelling need to learn and adopt what works for other players in other countries of the world.

“Nigeria is just beginning to embrace the tradition of obeying laws and respecting contracts,” he said, urging upstream players “To borrow a leaf from other countries on the way their oil and gas industry works.”

In what appeared a veiled reference to the lingering crisis between government and Shell over the Malabu scandal, Adamu said approaching a court for resolution should not be interpreted as an end to a business relationship, noting that time has indeed come to appreciate the significance of resolving cases within the ambit of the law as obtained in advanced climes.

“In Nigeria, there is the tendency to see those who take us to court as enemies. This should not be because people go to court to settle their differences,” he counseled, calling on incumbent administration to put in place incentives capable of attracting investors into the petroleum upstream sector. “If we want to attract investors, we must make fiscal regimes good and conducive for doing business,” he added.

Jeff Ewing, Chairman and Managing Director, Chevron Companies in Nigeria emphasized the importance of collaboration this way: “Whether we are talking about security in the Niger Delta, technical know-how or manpower, companies can come together in their quest to deliver service in the oil and gas industry. This collaboration would ultimately culminate in reduction in the cost of doing business,” he stated.

Echoing same position, Managing Director, Total E &p Nigeria Limited, Nicolas Terraz said the company is ready to engage in multi-levels collaboration with any company operating in Nigeria provided such a company is of proven integrity and competence.

Terraz also stated that collaboration would afford local companies opportunities to imbibe best-practice culture, stressing that to a large extent, the petroleum industry would be better for it.

“Collaboration is good for the industry as it mitigates risks associated with uncertainties such as dollar/naira fluctuation and rising cost of production.

Even the IOCs are not immune from occasional hazards associated with contract execution. So when burden is shared, even the smaller companies can cope and continue in business,” he noted.

In a quick chat with Orient Energy Review at the end of the session, Ahmadu-Kida Musa, Deputy Managing Director, Deep Water District, Total E & P Nigeria Limited called on companies offering same or complementary services to come together and find ways of taking the sector forward.

Asked for his take on the call for increased collaboration, Musa responded: “This is the time to come together to salvage the oil and gas industry. Crude oil prices are beginning to rise but no one is sure about the future. Despite the optimism in the gradual rise of oil prices, you will agree with me that it is far from what it used to be. This is enough for stakeholders to synergize and share operational and personnel costs for mutual benefit. Government also needs to play its part in this collaboration,” he added.

Meanwhile, it is the hope of Nigerians from all walks of life that the deliberations at this all-important session would provoke new policies and subsequent implementation to leave the old for the new business model that the experts keep talking about. Time is of the essence!

Orient Energy Review March, 2017 25

COVER

Nigerian Content Act @7: NCDMB Unveils Five -Year Road Map

New Strategies targets growth and Effective Policy Implementation

By Godspower Ike Margaret Nongo-Okojokwu

The Nigerian Content Development and Monitoring Board (NCDMB) was set up by the NOGICD (Nigeria Oil & Gas Industry Content Development)Act to boost the participation of indigenous companies in the oil and gas sector; but several years down the line, inspite of the pockets of successes registered, there is a lot of room left for improvement. This article seeks to explore the role the NCDMB had played over the years and the recent strategies it has deployed to achieve its core mandate.

Seven years after its establishment, the Nigerian Content Development and Monitoring Board (NCDMB) is yet to fulfil one of its core mandate, which is to deepen indigenous participation in the petroleum industry.

26 Orient Energy Review March, 2017

Stakeholders are unanimous in their views that local content development in the Nigerian oil and gas industry still remained unsatisfactorily low and continued to inhibit the growth potential of the industry. The NCDMB was established following the signing into law of the Nigerian Content Act on April 22, 2010. Saddled with the responsibility of increasing indigenous participation in the oil and gas industry, build the capacity and competencies of indigenous operators, create linkages to other sectors of the national economy and also boost industry contributions to the growth of Nigeria’s Gross Domestic Product; the board has recorded significant milestones in the implementation of the Nigerian Content Policy. How-

ever, despite these achievements, it is obvious that a lot still needs to be done in achieving the ideals of the Nigerian Content Act. This is especially so, as the NCDMB recently stated that indigenous participation in the nation’s oil and gas industry had increased to a meager 35 per cent in the past six years.

Also, Mr. Lee Maeba, Former Chairman, Senate Committee on Petroleum Resources, Upstream, and sponsor of the Nigerian Content Bill, stated that from inception of the NCDMB in 2010 to 2016, not much has been achieved in the area of compliance. As a result, according to Maeba, Nigerian companies are not deriving the optimum benefit of the Nigerian Content Act.

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COVER However, to address the shortcomings recorded in the implementation of the Nigerian Content initiative, the NCDMB had adopted a number of strategies.

Executive Secretary of the NCDMB, Mr. Simbi Wabote, said the strategies which are aimed at increasing national capacity in terms of local content, would help create an enabling environment to attract investors and protect investments made through compliance oversight.

One of the strategies, he said, includes stakeholder collaboration to overcome key challenges in the area of macro-economic issues, skills gap, weak sectoral linkages and weak manufacturing base, inadequate critical infrastructure and policy inconsistency, among others.

Other strategies, Wabote said also include the fast-track establishment of five oil and gas parks and the organization of Nigerian Content Opportunities Fair to showcase available capacity in-country; showcase opportunities in upstream, midstream and downstream sectors and provide multinationals the opportunity to link up and utilize in-country capabilities.

He further stated that the Board is planning a series of Research and Development fair and intends to support the completion of ongoing third party investments, which he said, would have a number of positive impact in the area of Job creation for teeming youths; increase in-country Engineering and Fabrication work scope significantly; and bring down the cost of in-country manufacture/ assembly of equipment, component parts and spare parts.

He also stated that one of the strategies include streamlining the contracting cycle to six months, adding that it is setting a 100 days turn-around target provided documents are in compliance with the Act. In addition, the Executive Secretary noted that the tenth strategy involved undertaking an internal restructuring of the NCDMB, www.orientenergyreview.com

through the adoption of leading practices to transform NCDMB into a performance driven organization; and the adoption of a 5 year road map to institutionalize planning, among others.

Again, the NCDMB highlighted some of the success stories of the Nigerian Content initiative to include in the areas of coating paints, line pipes, put at about 670,000 metric tonnes per annum; barite processing, engineering design, platforms fabrication and pipe coatings.

Other successes recorded are in cables production, marine and pressure vessels, swamp rig, machine shop and training simulator.

In line with this, Wabote said the NCDMB had developed a Community Content Guideline which provides pragmatic steps for incorporating and engaging community contractors as a critical delivery point for Nigerian content development.

He declared that the guideline was borne out of the necessity to boost peace and security in the Niger-Delta and address the lingering squabbles between host communities and operating and service companies over participation in oil and gas activities. “We have also already aligned our Capacity Development Initiatives to support the delivery of the aspirations encapsulated in the Petroleum Industry Roadmap,” he explained.

In addition Wabote stated that with the Council of the NCDMB in place and the calibre of members of the Governing Council, the Board is well positioned to fast track implementation of its flagship projects, like the Nigerian Oil and Gas Parks Scheme (NOGAPS), Polaku Pipemill and accelerated disbursement of the Nigerian Content Development Fund (NCDF) to deserving oil and gas service companies.

Furthermore, he disclosed that one question that he had had to answer repeatedly in the last 100 days had to do with the Nigerian Content Development Fund (NCDF), adding that in the last seven years,

the NCDF had grown to nearly $600 million but only three service companies successfully accessed the Fund. “Despite the healthy growth of the Fund, we are frustrated that it has not significantly addressed the purpose for which it was established by the Act,” he lamented.

However, he stated that within the last 100 days, the NCDMB had worked on various strategies geared to improve access to the Fund, adding that it is hopeful that clear modalities that will guide the utilization of the Fund would be out within the next 100 days.

To this end, Wabote said, “Oil and gas companies that default in their deduction and remittance of one percent of the value of contracts they executed in the upstream sector would henceforth be disqualified from participating in tenders for new contracts.

We also announced plans to conduct a forensic audit of the industry to track and recover due payments on the NCDF held by some companies.” He added that the Board’s compliance monitoring had focused largely on the upstream sector operations of the industry, mainly because of the higher percentage spend in the sub-sector.

Specifically, Wabote disclosed that this year, it had undertaken a reorganization of its monitoring structures and will pay much more attention to the implementation of Nigerian Content in the midstream and downstream sectors of the industry.

The Board is planning a series of Research and Development fair and intends to support the completion of ongoing third party investments, which he said, would have a number of positive impact in the area of Job creation for teeming youths;

Orient Energy Review March, 2017 27

COVER In addition to efforts at expanding indigenous capacity, the NCDMB also introduced a new policy for Floating, Production, Storage and Offloading (FPSO) platforms construction in Nigeria, stating that henceforth, greater percentage of the vessels would be fabricated in the country.

Wabote declared that this was in light of the successes recorded by indigenous companies in the fabrication of modules for FPSOs and would be a reversal of the trend, whereby, over 60 per cent of the modules for the vessels are fabricated overseas, with a handful fabricated in-country.

According to him, international oil companies and promoters of new deepwater projects in Nigeria must deliver Nigerian Content milestones that would exceed in-country integration of Floating, Production, Storage and Offloading (FPSO) platforms.

This, he noted, was because Total Nigeria’s Egina Deepwater project which would be integrated at the LADOL Free Trade Zone had become the benchmark for Nigerian Content on deepwater projects,

adding that going forward, forthcoming projects have to break new records.

The Executive Secretary disclosed that in-country integration of the Egina FPSO and fabrication of six modules of the vessel created 5000 direct jobs and 5,000 indirect jobs, arguing that increased domiciliation of future FPSO projects through the fabrication of more modules would create additional jobs, estimated to reach 30,000, he added.

capacity development.

Wabote also promised to enlighten international oil companies and project promoters on existing in-country capacities and ensure their utilization during projects.

He also noted that experts in offshore designs, FSPO designs and detailed engineering were in high demand and engineering companies must develop strategies to retain them so their competences will not be lost.

According to Wabote, the Board would not rest on its oars with regards to the implementation of the Nigerian Content Act, adding that new projects must look at doing FPSO integration and more as the country seek to add something to its achievements. He said, “Six modules of the Egina FPSO were fabricated in-country across some yards, whereas 12 modules were welded at Samsung’s base, Geoje, South Korea. For next FPSO, more modules must be fabricated locally.”

Wabote, however, expressed delight with the level of investment and the utilization of local workforce, while he described the project as an example of possibilities. He assured that the Board would continue to work with industry stakeholders to develop new projects and domicile more work in-country.

On his own part, Senator Lee Maeba expressed confidence that the Nigerian Oil and Gas Industry Content Development Act, will achieve sustainable development of the nation’s economy through the stimulation of industrial development, growth of local capacities, building of a skilled national workforce and the creation of a competitive supplier base.

According to him, to achieve the laudable benefits of the Act, however, it is vital that the government continually collaborate with industry stakeholders to ensure the effective implementation and enforcement of the provision of the Act. He said, “It is also important to ensure that these benefits are realized by local companies participating directly in the oil and gas operations, rather than through farming it out to foreign partners due to lack of financial or technical expertise.

Indigenous companies must live up to the expectations of the Act by maximizing local capacity.

“Finally, it is imperative that the interests of various stakeholders are protected continuously to guarantee the economic drive and growth that will result in local capacity building and return on investment for both operators and their alliance partners and Nigerian individuals and companies.”

The Executive Secretary had visited the facilities of some indigenous companies to get first-hand information of their operations and challenges. Among the companies are Dover Engineering, JC International and Thompson and Grace Limited, all located at Port Harcourt, Rivers State.

He explained that his visits to oil and gas facilities across the country were aimed at assessing capacities and confirming that Nigerian companies have firm footing in their areas of operations, adding that information gathered from the visits would be used during tenders and in planning for

The NCDMB had developed a Community Content Guideline which provides pragmatic steps for incorporating and engaging community contractors as a critical delivery point for Nigerian content development.

NCDMB Exec Sec. Engr Simbi Wabote 28 Orient Energy Review March, 2017

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COVER

Maeba stated that one of his reasons for sponsoring the Local Content Bill was due to the fact that the economic opportunities expected from the oil and gas industry for our people since oil was discovered in commercial quantities in the Niger Delta has still not materialised after 53 years.

He added that of the total contracts awarded by operators in the industry, put at more than $1.8 billion per annum, only a paltry five per cent is given to Nigerian indigenous companies, while far less than two per cent of this five per cent are done by business owners from the oil prospecting Niger Delta region.

In addition, other reasons he said, include the fact that “Contracts signed by the Federal Government of Nigeria with the oil operators and their alliance partners whether as oil Petroleum Sharing contracts (PSCs) or as Joint Ventures (JVs) contains provisions for training and employment of Nigerians, but oil companies never implement these agreements.

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“Jobs that could be given to Nigerian indigenous companies are given to foreign companies for example French International Companies gives job to only French counterparts, American oil majors give to only Americans etc.

“Jobs that can be perfectly done in Nigeria are taken outside and done in Europe, America, Korea, Japan, China etc. this has induced so much pressure on the value of the Naira in the Foreign Exchange Market.”

Maeba declared that Nigerian Indigenous service companies stand to benefit tremendously from the provisions of the Nigerian Local Content Act, especially as they are one of the key targets of the Nigerian content policy.

companies.

It is expected that in the next couple of years, the effect of all the initiatives introduced by the NCDMB and suggestions put forward by critical stakeholders would begin to yield positive results and bring about a significant increase in indigenous participation in the oil and gas industry.

Sen. Lee Maeba

He said the indigenous companies would benefit in the area of skill development and capacity building; principles of first consideration; regulation and enabling framework; full and fair opportunity in bid processes and opportunities for indigenous service

Orient Energy Review March, 2017 29

GHANA REPORTS

TechnipFMC Wins Onshore Contract

GE Opens New Facility in Ghana

By Margaret Nongo-Okojokwu

T

he Franco-American oil and gas company TechnipFMC has been awarded an onshore contract for project management, engineering, procurement, construction and commissioning (EPC) of the Gas to Power project in the Sankofa offshore field. The value of the contract was not disclosed.

In a statement issued by Reuters, TechnipFMC explained that the works will be executed by the company’s teams in Ghana and will end by mid-2018.

“We are proud to have secured this new contract that rewards the long-term commitment of TechnipFMC in Africa and will play a strategic role in the Gas to Power program in Ghana.

This success is also the result of TechnipF ™’s sustainable development works in Ghana, particularly our permanent engineering center in Accra, “said Nello Uccelletti, President of the onshore / offshore branch of TechnipFMC. Sankofa will enter service in 2018 and should allow the country to end its imports of electric power with a planned capacity of 1,000 MW of electricity.

The field is controlled and operated by Eni with 44% stake, Vitol with 35.6% and GNPC with 20%.

30 Orient Energy Review March, 2017

G

E Oil & Gas has opened a new facility in Ghana’s Takoradi Port, expanding its global footprint and supporting local investment. The facility, which will be the primary service center for deep-water offshore projects in Ghana, has a 1,600-square meter indoor test area with capability for testing three subsea trees (XTs) simultaneously, and 4,000 square meters of indoor and outdoor storage.

The new infrastructure is already playing a critical role in supporting the installation of ENI’s OCTP project, for which it is supplying subsea and turbomachinery equipment, and will support the local community by helping to provide direct employment opportunities. It will also provide welcome support for the local supply chain, and for small and medium-sized enterprises.

Along with commitment to delivering a comprehensive training program for the local workforce, GE Oil & Gas has recruited more than 30 Ghanaian staff to work at the new facility, including two fully-trained field service engineers who are now working offshore to support the

installation phase for the OCTP project.

GE Oil & Gas partnered with GNPC and Ashesi University College in a two-phased approach to local capacity building, including education and skills development, and a small to medium enterprise (SME) development program. The partnership is helping to develop the next and future generations of the oil and gas workforce, providing them with practical learning opportunities and access to technical expertise, locally.

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GHANA REPORTS

ACEP Calls On Government to Check GNPC

By Gilbert Boyefio

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and participating interest by 2026.

We therefore call on the government to fulfill its commitment to restructure GNPC in a way that shields the NOC from political interference so that it can focus on its

he African Centre for Energy Policy (ACEP) has appealed to Ghana’s new government to ensure that the Ghana National Petroleum Corporation (GNPC) focuses on its core mandate.

Last year, the GNPC came under strong public criticism for its guarantee and support for projects deemed not part of its core mandate such as the US$550 million Quantum Power Re-gasification project and the US$ 100 million Karpower project.

core mandate”.

Earlier in the month of March, ACEP presented its analysis of the 2017 budget with special focus on the power and petroleum sectors.

For the purpose of this analysis, the power sector focuses on government’s key interventions in tackling power sector challenges whilst the petroleum sector focuses on petroleum revenue allocation and investment.

Lawmakers in Ghana’s parliament expressed concerns about what they claimed as the GNPC “veering off its core mandate by undertaking projects that have nothing to do with oil and gas.”In its Semi Annual Report on Management of Petroleum Revenue, the Public Interest and Accountability Committee (PIAC) also condemned the decision of GNPC for refusing to adhere to a directive not to invest its proceed in non-core business of the industry.

The budget statement on petroleum was limited to receivables for 2017. ACEP’s petroleum sector analysis was done within the context of compliance with the PRMA of revenue outflows from the Petroleum Holding Fund (PHF) to the various funds, and ABFA allocation to the priority areas. Some areas of concern have been raised and recommendations proposed to improve upon petroleum revenue management and investment in the 2017 fiscal year.

ACEP described as a good initiative the decision by government to revise the benchmark price.

“We wish to commend the Ministry of Finance for managing its own expectations and that of Ghanaians of the extent to which our oil resources can support the national budget and overall development finance. The Ministry’s decision to revise the benchmark revenue (BR) based on benchmark price of US$73.2264 per barrel, derived from applying PRMA’s seven year moving average formula, to US$56.142 per barrel based on market predictions by expert institutions is commendable,” it stated

Commenting on the 2017 budget statement, ACEP indicated its support for the allocation of adequate funds for GNPC’s growth but was concerned “about how GNPC has utilized its share of petroleum revenues in the past on activities outside its core mandate, noting that if the trend continues, GNPC will fail to be the vehicle for maximizing the value of Ghana’s oil and gas resources as envisioned by the current government”.

In the words of Benjamin Boakye, Deputy Executive Director of ACEP, “This is particularly an issue of concern because, per Section 16(3) of the PRMA, GNPC will be weaned off its share of net carried www.orientenergyreview.com

The Oil and Gas Sector

This is particularly important when the Ghana Stabilization Fund (GSF) has been depleted in a manner that renders it irrelevant for the purpose of stabilizing the ABFA. This also reveals the extent of unreliability of the Seven Year Moving Average proposed in the PRMA. Since 2014, the formula has missed the actual price by being either overly pessimistic (as was the case in 2014) or optimistic (as has been the case since 2015).

ACEP was also happy with the decision by the Finance Minister to ensure that distributions of petroleum revenues are consistent with the provisions of the PRMA. The Finance Minister made it clear that the revenue distribution formulae in the PRMA will be followed.

Section 16(1) of the PRMA (as amended) prioritizes allocation of oil revenues to the National Oil Company (NOC), the Annual Budget Funding Amount (ABFA), the Ghana Petroleum Funds (GPF) which comprises the Ghana Stabilization Fund (GHF) and the Ghana Heritage Fund (GHF) and for exceptional purposes according to the Act, in that order. This is precisely what was done in the budget.

It observed that allocation to GNPC in 2017 is below the 55% of net carried and participating interest ceiling prescribed by the PRMA in sub-section 3a of section 16.

In accordance with Section 18(1) of the PRMA, exactly 70% of the BR (total petroleum receipts less allocation to GNPC), amounting to US$169,458,674.13 has been allocated to the ABFA for the 2017 financial year. Also, exactly 30% of the BR has been allocated to the GPF. One of the major concern of watchers of the oil and gas industry in Ghana pertaining to the oil revenue utilization was the haphazard manner the ABFA was used.

Orient Energy Review March, 2017 31

GHANA REPORTS Perhaps taking a cue from this development, the new government has ensured that in the 2017 budget, priority areas to receive support from the ABFA are very focused and clear.

“The current budget choice of priority areas for ABFA investment are clear, much focused, and fall within the prescribed priority areas specified in Section 21(3) of the Petroleum Revenue Management (PRMA) Act, 2015 (as amended) Act 815. The priority areas reflect ACEP’s persistent advocacy for oil revenue investment in pro-poor sectors of agriculture, education and health. We take particular notice of the fact that about 53% of ABFA will be spent in the pro-poor sectors,” a government official stated.

It is clear that government has moved away from using ABFA to finance expenditure and amortization of loans for oil and gas infrastructure. This was one of the priority areas until 2016. In 2016, Ghana Gas financed its loan obligations through the sale of the liquids (propane, etc) it processed. Overall, it appears that more money will be freed for specific sustainable development investments.

According to ACEP, goods and services expenditure of the ABFA is precise and trackable. The education sector will receive about 26.5% of ABFA, constituting 88.6% of ABFA allocation to goods and service in 2017. This is the amount to be spent on the government’s flagship free SHS policy from oil revenue.

And for the first time there is greater clarity on what exactly the recurrent expenditures of the ABFA will go into. This helps to track impact of not just the portion that goes into physical infrastructure but also recurrent expenditures. Investing in education in particular, fits into the key objective of the PRMA in Article 21(2) (b) to promote equality of economic opportunity for all.

“ACEP observed that for the first time, PIAC received full disbursement of its budget from the ABFA to the tune of GHC960, 000 in 2016 following the 2015 amendment to the PRMA to provide funding to support PIAC’s work. The funding allocation to PIAC has almost doubled to GHC1, 900,000 in 2017.

ACEP wishes to commend the previous and current governments for heeding civil society call for adequate funding for PIAC to strengthen its oversight responsibili-

ties prescribed by law. This will help shift the focus from lack of funding to ensuring that PIAC delivers on its mandate,” read a statement issued

by ACEP recently.

ACEP further welcomed the non-allocation of 25% of ABFA to Ghana Infrastructure Investment Fund (GIIF).The GIIF Act and PRMA (as amended) prescribe that up to 25% of the ABFA earmarked for capital expenditure must be disbursed to the GIIF. This arrangement implies that 25% of the investment portion of the ABFA every year would be isolated from the governance framework established in the PRMA, thereby making it difficult to track petroleum revenue utilization.

ACEP’s concern has been that the ABFA is structured as an investment fund which had already been leveraged for loans. The GIIF allocation provision was therefore only an attempt to create multiple collateral securities for the same money moving across different funds.

COPECGH demands stoppage of persistent fuel price increase

By Gilbert Boyefio

T

he Chamber of Petroleum Consumers Ghana (COPECGH) has warned government of public anxiety and anger over the current persistent fuel price increase.

The pressure group insisted that the current spate of fuel price increases is simply unsustainable and must be a top priority for the current government to curtail and reverse.

According to COPECGH in a press release signed by Duncan Amoah, Executive Secretary, “Fuel prices continue to go upwards in the country even after the budget presentation that

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sought to attempt reducing same from the removal of excise levy and a reduction on the special petroleum tax (spt) from 17.5% to 15%.”

He noted that although consumers jubilated and cheered these budgetary reductions, the net expected impact of about 3% which is yet to be felt across pumps seem to have already been wiped off by recent increases at the pumps.

Fuel prices over the past six windows spanning some three months has only seen consumers pushed to squeeze additional monies every window,

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GHANA REPORTS a cumulative 19.6% has since been added to pump prices from previous average pump prices of 16.30/ gallon or 3.620/litre to current average levels of 4.320/ litre or 19.46/ gallon.

However, world market indices have remained fairly stable over the period, trading at averages of between $53-$56 though currently a bit lower.

The cedi which seems to be the major factor in these incessant increases has since the same period lost about 17.73% from previous exchange values of ghc3.89/1$ to current market average levels of ghc4.580/$1.

“The managers of the country’s currency obviously have and are doing a very poor job with the

speed of depreciation of the local currency hence resulting in these avoidable increases on consumers.

What has become more worrying is not only the trend but the fact that there seems no end in sight for these persistent fuel price increases as importers who require over $300 million monthly to be able to supply the market with the needed products also have to go on the open market for the dollar as there are not guaranteed the notes by the bank of Ghana.”

“The net effect of this poor management of the country’s currency is the continuous increases in pump prices at a time when the global fuel pricing index seems to suggest Ghana has reduced fuel prices from the previous $0.94/litre

to current $0.87/ litre levels,” he lamented.

COPECGH also put part of the blame on the deregulation of the downstream sector of the oil industry, calling for the deregulation programme and its application to be reviewed if necessary. According to the group, some oil marketing companies are taking undue advantage of the system to charge over the roof prices on unsuspecting consumers.

Ghana’s decision to deregulate the petroleum sector was to allow petroleum importers and marketers to reduce their price as well as pull in more private players into the sector.

GE to power Amandi Project The Electricity Company of Ghana (ECG) is the primary off-taker having signed a 25-year Power Purchase Agreement.

M

ultinational power solutions company, General Electric (GE), announced that it has received an order to provide a 200MW combined-cycle power plant, which will be operated by Amandi Energy Ltd in Aboadze, Ghana.

In December 2016, Amandi Energy declared to have reached financial close for the Amandi project based in Aboadze.

According to a GE Africa press release, the plant will assist in adding reliable and efficient capacity to the grid, which will help to tackle Ghana’s increasing demand for power. The construction process will be overseen by international engineering contractor, Metka.

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According to the power solutions company, this turnkey plant will be powered by GE’s 9E.04 gas turbine with tri-fuel capabilities.

Initially, the Amandi project was powered by light crude oil, and the switch will be made to indigenous gas from Ghana’s offshore Sankofa natural gas field once available.

General manager for Amandi Energy Ltd, Ghana, Boaz Lavi, said: “GE’s fuel capabilities are unmatched. Having a turbine that is able to switch between fuels can provide increased plant operability allowing for power generation months before the indigenous gas supply would otherwise be available.”

Combined-cycle power plant For this project, the power solutions company will in addition provide the steam turbine, heat recovery steam generator, associated balance of plant, and a seven-year CSA. Once operational, the 200MW Amandi power plant is anticipated to be one of the most efficient power plants in the country, generating the equivalent power needed to supply more than one million homes.

“Our customers have complex fuel needs, and this project illustrates the breadth of solutions we are able to deliver to meet their expectations,” general manager Gas Power Systems at GE Power in Sub-Saharan Africa, Leslie Nelson, stated.

“We are pleased that our strong regional presence allows us to get power to our customers, like Amandi Energy, quickly and efficiently,” he added.

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GAS

OANDO Divests Interest in Captive Power Plants mercial concerns because pipeline vandalism is taking a toll on their operations.

OGP is developing LNG facility via its newly-created Transit Gas Nigeria Limited (TGNL) subsidiary in partnership with Nigerian Gas Company (NGC). The facility aims at meeting the gas supply requirements for captive power plants, embedded generation, and industrial clusters in the Northern region, as well as stranded customers in the South.

Osunsanya stated further that the firm has developed over 260km of gas pipeline distribution network, and pioneered the development of gas infrastructure and solutions across southern Nigeria, adding that the company has divested from its captive power plants.

O

ando Gas and Power (OGP), a subsidiary of Oando Plc, has stated that it has divested its interest in captive power plants and focuses its ambition on expansion of gas infrastructure.

Speaking on the sideline of the 16th Nigeria Oil and Gas Conference and Exhibition (NOG) in Abuja recently, OGP Managing Director, Bolaji Osunsanya, stated that “as portfolio developers, we’ve divested from our captive power plants and aggressively focused on the expansion of our Gaslink franchise which serves over 160 industrial and commercial customers across the greater Lagos area.”

“Our Joint Venture subsidiary with the Rivers State government and Central Horizon Gas Company is poised to complete an additional 9km of pipeline infrastructure within the Trans-Amadi area by the end of first quarter of this year. Also, our Compressed Natural Gas (CNG) entity, Gas Network Limited (GNL), which is our pioneering virtual pipeline initiative currently delivers 36

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gas to customers within a 100km radius,” he added.

In the medium term, Osunsanya disclosed that the firm’s five critical flanks are to ensure gas supply security, develop virtual pipelines asset stable and gas processing infrastructure. In the long term, he noted that OGP expects long term appropriate infrastructure financing and expansion of last mile distribution infrastructure with a particular focus on regional growth.

However, the OGP boss said his company is set to take the Final Investment Decision (FID) on its planned multi-million $20 million standard cubic feet per day (mmscf/d) mini-liquefied natural gas (LNG) plant to be located in Ajaokuta, Kogi State, before the end of June.

“OGP targets to increase gas sales levels from an average volume of 47mmscfd in 2016 to about 70mmscfd in the year. It also expects to complete and commission projects such as Greater Lagos 4 (GL4), and Central Horizon Gas Company (CHGC) expansion as well as aggressive regional expansion opportunities into Benin, Togo, Ghana, and Senegal,” he stressed.

He further revealed that in December 2016, OGP completed the divestment of 49 per cent stakes Oando’s midstream business subsidiary, Oando Gas and Power Limited to Glover Gas & Power B.V; a special purpose vehicle owned by Helios Investment Partners at a cost of $115.8 million.

He added that after taking the FID, construction of the facility would begin in the third quarter of the year while the essence of building virtual in the Ajaokuta mini-LNG is to create other ways of bringing natural gas to industrial and comwww.orientenergyreview.com

GAS

Cameroon Set to Host the World’s First Floating LNG

A

ustralia, the quiet Atlantic waters offshore Cameroon are steadily on course of hosting the world’s first Floating Liquefied Natural Gas (FLNG) unit.

Golar’s FLNG Hilli, currently under conversion in Singapore’s Keppel Shipyard, is close to moving to West Africa to start its eight-year contract in the second half of 2017. Golar, owner and operator of liquefied natural gas carriers; Perenco, the French E&P independent and Cameroon’s state hydrocarbon company Société Nationale des Hydrocarbures (SNH), are partners in the 1.2Million Tonnes Per Annum (MMTPA) FLNG Hilli, which they have been developing since November 2014.

Shell’s bigger Prelude FLNG project, planned for offshore Western Australia, took Final Investment Decision (FID) in 2011, four years earlier than the September 2015 FID for FLNG Hilli. But Prelude FLNG is a 5.3MMTPA project

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with all the issues of a large LNG facility. With 488m in length and 74m in width, it is the largest facility of its kind. It will monetize the resources in the 3Tcf Prelude natural gas field, discovered in 2007.

Partners in the project include Shell, 67.5%, INPEX, 17.5%; KOGAS, 10% and CPC, 5%.

Golar has spoken with certainty about the scheduled delivery of the conversion project and claims it is within its $1.2Billion budget.

Shell speaks less of timing of delivery and more of the might of the Prelude: “Hundreds of engineers from across the world have combined their experience and expertise to design the world’s largest floating offshore facility”, the company says on its website, adding that “It will be used to help open up new natural gas fields at sea that are currently considered too costly or difficult to develop”.

largest of its kind, but the world, really, does not yet know of any stationary gas floater! Module installation work for the Prelude FLNG has been completed at Samsung Heavy Industries’ Geoje shipyard in South Korea and, in the words of the JGC, which is contracted to support the completion work for the FLNG’s safe and on-schedule completion.

Still, it is likely that this project would not be commissioned until the third quarter of 2017.

The Cameroon project is based on the allocation of 500 Bcf of natural gas reserves from offshore Kribi fields, which will be exported to global markets via the FLNG Hilli. The 1.2MMTPA of LNG represents approximately 50% of the vessel’s nameplate production capacity. *Source: AOGR

Prelude FLNG is said to be the

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TALKING POINT

‘Sustainability, Key to Growth of Oil and Gas Businesses in Sub-Sahara Africa’ – Dapo Ayoola the biggest in Africa, so we think the chicken has come home to roost and we will get bigger if we get wider and better support from Nigeria oil and gas sector.

So what makes this Conference unique, what sets it apart from the other Industry Conferences and Exhibition that we have been seeing?

What sets this apart is the fact that it is the first Platform for the Sub- Saharan African Oil and Gas Community to meet on the home soil. There are quite Mr. Dapo Ayoola, Chief Executive Officer of the Sub-Saa few other ones that cut haran African Oil and Gas Conference and Exhibition in across nations that are orthis interview with MARGARET NONGO-OKOJOKWU, speaks on the prospects, opportunities and sustainability of oil ganized but they are largeand gas business in Sub Sahara Africa: Excerpts ly held outside of Africa, either in Europe or United ow has the Journey been States of America (USA) but this so far with the Sub-Sahaplatform is uniquely African. It has ran African Oil and Gas been put together by Africans, our Summit? resource persons are Africans, and we are no less intelligent than our The journey has been mixed. counterpart from other continent.

Sub-Saharan African Oil and Gas An African Petroleum Engineer Summit has recorded some levels of or Investor or Finance person or success while contending with few Community Engagement person is challenges. The first two editions not less intelligent than his colleague held in Ghana in 2015 and 2016 refrom Houston Texas for example. spectively have gone very modestly Disappointingly, we hardly meet by well. It has been very impactful on our businesses, and commercial rela- ourselves to have a clearing out and discuss unique opportunities in the tionships have been built especially sub-region. between investors in Nigeria and The level of participation that we Uganda, including some professionget is another unique attribute. In al friends across the industry. The the first two editions, virtually every challenges relate to the fact that the participant at some point in the event is an upcoming platform. The three day meeting had the opportuSub-Saharan African Oil and Gas nity to hold the microphone and has Summit brand is relatively new to got a voice; it is done so differently some people. This accounts for our from where we go in our thousands struggle with attracting the quality and we are just part of the statisof people and companies that can tics. We just go there to listen to provide support that we require. We other discuss the challenges of their are nonetheless confident that the industries. They never discuss what platform has come to stay and we is peculiar to a businessman or to will continue to sustain it. a Petroleum Engineer in Lagos or The 2017 edition which is the 3rd in Yenegoa or in Kampala or in its series will be held in Nigeria and Addis-Ababa. We have our own hopefully for the 4th. Nigeria is peculiar issues that we relate to; the biggest oil producing country culture, technological challenges etc. in West Africa and perhaps one of

H

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This is what we have established this platform to address.

What is the conference theme other issues that will be discusses at this year’s Conference?

The theme for this year is; “Oil and Gas Business in Sub-Sahara Africa, Prospects and Sustainability”. This year’s conference will particularly address ‘’Sustainability’’ because of the challenging times we had in the industry across the globe. The problems of dwindling oil , the price of crude oil, the issues relating to license to operate in our various communities, either in Niger-Delta in Nigeria or Shebab in East Africa, where these issues that affect us and has led investors’ apathy will be discussed. Sustainability of all the prospects is the focus of this year’s summit. We will examine the opportunities in Nigeria, Ghana and East Africa, with Tanzania and Kenya in focus, looking at these around the prevailing operating environment.

Was there a reason why you moved the Conference from Ghana to Nigeria?

The objective of the conference in terms of location is to keep it on African soil and to take it from one African country to another as well as spread the message and make Africans come onboard the platform.

So we knew that we will eventually have to come to Nigeria but because the idea was birthed and planted

by Nigerians, we thought we should send the right signal to our brothers across the continent by not starting in Nigeria. So they can see that it is “Our” collective platform and that was why we held the first two editions Ghana. Now we are in Nigeria and I think we will be here till next year after which we will go to East Africa.

Coming to Nigeria, what is your assessment of the oil and gas sector in the past decade?

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TALKING POINT

It is a very resilient one; it is quite promising notwithstanding the challenges. In the last 10 years, the oil and gas business in Nigeria has grown metaphorically. 10 years ago there were a few indigenous oil companies operating. Today we have got quite a good number of them. The international operating companies are divesting from one asset and putting more into another asset. So if you look at that, what used to be unprofitable fields which we now call marginal fields are now being taken over by indigenous players and those fields that were thought not to be profitable are now profitable.

Beyond the marginal field what other opportunities do you see in the oil and gas sector and how can they be harnessed?

First, I see one box that we are not opening in Nigeria and this is our intellectual capacity, which is our know-how in the industry. From the decades of Nigeria and Nigerians’ involvement in the industry, we have a reservoir of knowledge that we should begin to export to other parts of the world.

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Apart from marginal field, we are not doing well in infrastructure, support services and shipping. We are still relying on foreign firms to take our crude to other parts of Africa and to the West. Again this is a huge investment opportunity.

Somebody called my attention to the issue of insurance. Aside companies like AIG and LASACO, other insurance companies need to come in to the industry and play more active roles. Oil and gas is a capital intensive project. We still do not have enough local finance going there which means most projects are financed by hedge funds based in the West so the profit goes out. Whereas our banks are doing what they can, a lot more financial experts need to come into the industry (Upstream).

In the downstream, there are quite a lot of opportunities such as modular refineries. We can even go into power generation, petrochemicals, and fertilizers.

Are there issues in the industry that are giving you concerns?

issue of the Petroleum Industry Bill (PIB) as an example. I always say it is time we had a Petroleum Industry Act (PIA) and no longer a Petroleum Industry Bill (PIB).

Once the Bill becomes an Act of the parliament, it would send a signal of stability. The other day I read that the Group Managing Director of the NNPC is concerned that the Bill is taking longer than necessary. I share that vision with Dr. Baru. I believe we should put in place an Act of parliament so that this restructuring deregulation can be settled once and for all.

The issue of the Niger Delta is being addressed now. The current government is doing very well in that regard. I believe they need to translate that into action plan and walk the talk. Collectively I would like to say the issue of national reputation management gives me concern. If the perception about the country is positive, then that would affect attitude, it would affect the way we are treated, it would determine who comes in here to do business.

Yes! Definitely there are. First regulation is not negotiable. Take the

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