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Covering Local Content Oil & Gas
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Vol 6 No. 06 June 2017
Local for Global:
Nigeria in Fresh Drive for 100% Local Content
Seaweld Engineering to build vessels in Ghana
Nigerian Oil and Gas Industry Needs More Women Players-Amao
‘Intensive Exploration Activities are ongoing in Nigeria’s Sedimentary Basins’ -Adesanya
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EDITOR’S NOTE Building Locals to Serve Globally Nigeria is at the verge of a major breakthrough in its economic outlook as the country’s drive for increased Local Patronage of its goods and services is being accepted as the right step in the right direction. Only recently, its Acting President, Prof Yemi Osinbajo, issued an Executive Order in support of local content for public procurement by the Federal Government. The Order stated that henceforth, all Ministries, Departments and Agencies (MDAs) shall grant preference to local manufacturers of goods and providers of services. The Government aims to achieve a dominance of Made-in-Nigeria products and services in the activities of its bodies. Recognising that only a virile manufacturing industry would sustain an increase in employment, GD GDP and inclusive growth, it hopes to see the linkage industries benefit from the oil and gas industry while pushing for diversification. Upon satisfying the Nigerian market demands, it is believed that these products and services can then stand international brands as the push for a share in global market becomes inevitable in the long run. Our exclusive interview with NAPE President tells how the group of Petroleum Explorationists fit into the mix of Nigeria’s new drive; country oil-rich basins and the it also touched on the nature of the country’s prospects for investors among other salient issues. Our Women-in-Energy column is fast growing. You’ll find our OTC 2017 reports, as well as the photospeak from OTC and a couple of other recent events.
PUBLISHER/EDITOR-IN-CHIEF: Nneka Ezeemo
Also within are stories from Ghana and neighbouring countries; Local Content watch; and lot more.
EDITOR: Margaret Nongo-Okojokwu
Cheers!
PRODUCTION: Chiamaka Umeh Margaret Nongo Okojokwu Editor, Mobile +234 8170334471 m.okojokwu@orientenergyreview.com
CORRESPONDENTS: Shola Akingboye (Abuja Bureau Chief) Dirisu Yakubu (Associate Editor) Vivian Osuji Isreal (Head,South South Bureau,Port Harcourt) Jerome Onoja (Lagos) Gilbert Boyefio (Ghana Correspondent) Godspower Ike (Port Harcourt) Margaret Ahiakwo (Houston Texas, USA)
CONTENTS 5
INDUSTRY NEWS
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D GM Business Development Jerome Onoja
340MW of electricity to be added to power grid before December – Fashola
OIL
Business Development Executive: Arit Asuquo Dan Ruth Muo (South Africa) CREATIVE: DEE GRAPHICS CIRCULATION MANAGER : Ajayi Kayode LONDON OFFICE: Charity Place, Unit 1 Thurrock Pack Way Thurrock Parck Ind. Estate Tilbury,Essex Rm !87Hz. +447974199137 GHANA OFFICE: +0243915206 orientenergyreviewgh@gmail.com ORIENT ENERGY REVIEW has emerged to be the platform and voice for the growing local content policy across the world.It is a monthly publication of Orient Magazine,Newspaper and Communications Limited 5, Dipo Dina Drive, Abule Oshun,Badagry Express Way Lagos www.orientenergyreview.com email: info@orientenergyreview.com
Controversies Trail Cancellation of Port Harcourt Refinery Concession
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COVER STORY
Nigeria in Fresh Drive for 100% Local Content
WOMEN IN ENERGY
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Nigerian Oil and Gas Industry Needs More Women Players-Amao
LOCAL CONTENT
13 INTERVIEW
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22
NCDMB partners Dangote Group, NLNG on Refinery Project and Local Content Implementation Angola Stole Investors’ Hearts at the 2017 OTC
Intensive Exploration Activities are ongoing in Nigeria’s Sedimentary Basins - Adesanya
GHANA REPORT
Seaweld Engineering to build vessels in Ghana
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Orient Energy Review June, 2017
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INDUSTRY NEWS
Total To Build a 146 MW Plant in Uganda’s ‘Oily’ District
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rench major, Total has applied for power generation licence from Uganda’s Electricity Regulatory Authority (ERA). The company is set to build a 146MW thermal power plant in Buliisa District, in the oil prospective region of Uganda. Buliisa is bordered by Hoima District to the south and the Democratic Republic of Congo, across the Lake Albert to the west. Total is leading the $20Billion Uganda Albert Basin oil development project, which will include draining over a billion barrels of waxy crude and transporting them through a 1,444Km pipeline from Hoima to Tanga, the Indian Ocean port town in Tanzania. The tentative cost of the power project is $117.4Million or 416BillionShs (Ugandan Shillings). Total is hoping to
start the plant’s construction in 2019 if it receives ERA’s approval to generate power. “The project would be financed by 100 per cent shareholder equity”, the company says. Although the project is, in part, intended to boost electricity supply in one of Total’s most important African hydrocarbon portfolios, the power generated will be sold to Uganda Electricity Transmission Company Limited (UETCL), the country’s licensed sole buyer of electricity from power generation plants. UETCL then sells the power it buys to electricity distribution companies such as Umeme and the Uganda Electricity Distribution Company Limited.
PIGB Creates Three Commercial Entities to Replace NNPC
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igeria’s Petroleum Industry Governance Bill (PIGB) 2017 proposes the incorporation of three commercial entities including the Nigeria Petroleum Assets Management Company, National Petroleum Company and the Nigeria Petroleum Liability Management Company. The bill, passed by the Nigerian Senate on May 25, 2017, seeks, among other things, to restructure the Nigeria National Petroleum Corporation by splitting the assets and liabilities of the corporation into two new commercial entities, namely the Nigeria Petroleum Assets Management Company and the National Petroleum Company which will result, mutatis mutandis, in the repeal of the Nigerian National Petroleum Corporation Act CAP N123, Laws of the Federation of Nigeria, 2004, Nigerian National Petroleum Corporation (Projects) Act CAP N124 Laws of the Federation of Nigeria, 2004 and Nigerian National Petroleum Corporation Amendment Act N123. The Nigeria Petroleum Liabilities Management Company is proposed as a limited liability company that has the legal capacity to
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hold assets including shares in the Nigeria Petroleum Assets Management Company and the National Petroleum Company on behalf of the Federal Government. Funding of the Nigeria Petroleum Assets Management Company shall be by appropriation through the National Assembly for the initial capitalisation and subsequent financing of the company. The Federal Republic of Nigeria Appropriation Act 2016 provides for the funding of NNPC through appropriation. Part of the recurrent and capital expenditure components of the Appropriation Act 2016 which shall be received by the Nigeria Petroleum Assets Management Company from the NNPC budget aforesaid shall be adequate to provide for the financing of the establishment of the Nigeria Petroleum Assets Management Company. Therefore, no further financial requirements are needed for the establishment of the Nigeria Petroleum Assets Management Company.
DR Congo ask remaining two consortia running for Inga III project to submit a joint bid
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n the Democratic Republic of Congo, the two remaining consortiums competing for the construction of the Inga II hydropower dam have been invited to submit a joint bid for the project. This was announced by the Agency in charge of the development and promotion of the Great Inga Project (ADPI-RDC). “The two consortiums have been invited, after examination of their respective bids, challenges surrounding the project and developments registered in the supply and demand market, to take all necessary measures to form a single group which will submit an optimized bid,” ADPI-RDC said in statement. The consortiums concerned are ProInga which is led by ACS Servicios, Communicaciones y Energia and Cobra Installaciones y Servicios, and Chine d’Inga which is led by China Three Gorges Corporation. The Inga III power dam will have a production capacity of about 4,800MW. Out of this output, 2,500MW will be sent to South Africa. The rest will be used partly by the people of the region (1000MW) and the country’s industry ministry (1000MW). The Congolese State hopes that the infrastructure will significantly help cut cost of energy in the region. Its construction will cost about $12 billion. The dam project falls under the Great Inga Project which aims at installing hydropower dams with a total capacity of 42,000MW along the Congo River. Inga III comes in this framework after Inga I (360MW) and Inga II (1400MW) which have already been built.
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INDUSTRY NEWS
Elcrest E&P Sign Rig Deal for Opuama-7 Side-track
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land Oil & Gas says its subsidiary, Elcrest Exploration and Production, has signed a rig contract with OES Energy Services to secure a rig for a new drilling programme at the Opuama field in OML 40 in Nigeria. This is coming after Eland last week announced plans to raise up to $19.5 million to increase production from the OML 40 licence by three-fold. The rig will drill the side-track of Opuama-7 well expected to add initial production rates of 5,900 bopd and increase the short-term entire production from OML 40 to 17, 500 bopd. The side-track will be drilled to around 7,500ft
According to the Chief Executive Officer Eland Oil, George Maxwell, “Following the successful completion of our oversubscribed placing last week, I am delighted to announce the signing of a rig contract with OES to accelerate the commencement of our work over programme, starting with the side-track drilling of Opuama-7.We are committed to developing OML 40 to its full potential and have immediately started to deploy the additional funds recently raised. We will continue to target production from OP-7 and Gb-1 in H2 2017, targeting total gross production from OML40 of 25,400bopd (net: 11,430 bopd). This is to double
our current levels of production and should bring significant value to all our stakeholders.” Drilling work is expected to commence next month and will last for about a month. Under the contract, Elcrest has the option to extend the deal for the re-entry of Gbetiokun-1 which the company plans to start after the completion of the Opuama-7 drilling.
Forte Oil Plans to Raise $62m in Capital to Boost Operations
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orte Oil Plc, plans to raise N20 billion ($62million) as equity from the Nigerian Stock Exchange (NSE) to support its diversification processes, according to Julius Omodayo-Owotuga, the company’s Executive Director and
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Group Chief Financial Officer. He said: “We have commenced preparation to raise additional capital as we see opportunities; we continue to explore them and raise money in tranches. Our last
fund raising was very successful. We raised N9 billion by way of corporate bond. This series provided us with the necessary liquidity to actualize our growth strategies and positioned the company for the years ahead.” Omodayo-Owotuga said talks have been ongoing between the company, the Securities and Exchange Commission (SEC) and the NSE concerning the exercise. The indigenous oil company in 2016, raised N9billion ($28million) as the initial capital out of the N100 billion ($312million) approved by the shareholders, to boost its operations. Forte Oil is a Nigeria-based energy group with extended operations in Ghana. It operates majorly in the downstream sector of the country’s oil and gas industry, but has diversified its businesses into other sectors of the energy value chain.
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INDUSTRY NEWS Ben Asante Takes Charge of Ghana Gas
Mainstreaming Gender in the Energy Sector
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CCRA-The Local Content Unit in the Petroleum Directorate of the Ministry of Energy is expected to visit 12 Senior High Schools (SHS) in the Western, Central and Volta Regions before the end of June 2017 to sensitize students on the fundamentals of Ghana’s Energy sector with key focus on the petroleum industry. The team will also provide students with career guidance and employment opportunities available in the industry to stimulate their interest for the future. This is part of the Ministry’s Gender Mainstreaming in the Energy Sector Project which is aimed at increasing female participation in the country’s expanding Energy Sector. The first phase of the project focuses on a sensitization and career guidance programme in the Petroleum and Power sector at Senior High Schools across the country.
In a statement signed by King A. Wellington, the Communication Officer, Ghana’s Ministry of Energy, the sensitization/awareness programme takes the form of a across selected Senior High Schools (SHS) preferably female SHS in the 10 Regions. This is to whip up enthusiasm of female students and encourage them to choose courses relevant to the industry at the tertiary level of their education. This is part of the global commitment to the attainment of the Sustainable Development Goal number 5-Gender quality by the year 2030.
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To ensure a very comprehensive exercise, the selected SHS across all the 10 regions of the country have been grouped into four zones and a minimum of 10 schools are expected to be visited in each region. The zone groupings for the 10 regions are: a) Zone 1-Ashanti & Brong Ahafo Regions b) Zone 2- Central & Western Regions c) Zone 3- Northern, Upper West & Upper East Regions d) Zone 4- Greater Accra, Volta & Eastern Regions The team is scheduled to visit the following schools in June.
This initiative is expected to steer the interest of the young ones particularly the female students in taking active part in the oil and gas industry in the years ahead.
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en K. D. Asante has been appointed the Caretaker, Chief Executive Officer (CEO) of the Ghana National Gas Company (Ghana Gas). This follows the exit of the former CEO of the company, George Sipa-Adjah Yankey. Asante assumes his new role as Acting-CEO with more than 25 years global experience in the Oil and Gas industry. He is a Lecturer at the School of Engineering, Kwame Nkrumah University of Science and Technology (KNUST) and a former Engineering and Technical Director of Ghana’s premier Gas Infrastructure project, which led to the establishment of the Atuabo Gas Processing Plant and allied gas infrastructure in the country’s petroleum rich Western Region. He has worked for major Operating Companies such as Nova/TransCanada Pipelines and Enron as well as Engineering Consulting companies (Jacobs Engineering and Gulf Interstate Engineering) in Canada and the US in various positions up to the Director of Engineering and Operations prior to his recent appointment. Asante also provided consulting services to the World Bank and Asian Development Bank (ADB) in the past; a testament to his deep knowledge of the industry at the global level. He developed the Gas Infrastructure Master Plan for Ghana during his stint with the Energy Commission and also consulted for the Ghana National Petroleum Corporation. Asante holds a BSc in Chemical Engineering (KNUST, Ghana), MSc in Chemical Engineering (University of Calgary, Canada) and a PhD in Chemical Engineering from Imperial College, London/University of Calgary. Dr Asante is a board certified Professional Engineer. He has to his credit, 15 technical papers and made over 80 technical presentations around the world on Oil/Gas Infrastructure Design and Operations amongst sundry issues.
Orient Energy Review June, 2017
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INDUSTRY NEWS POWER
340MW of electricity to be added to power grid before December – Fashola
Maximum Demand Customers Exempted From Estimated Billing –NERC By Sola Akingboye
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T
hree hundred and forty megawatts of electricity would be added to the national grid before December 2017, Babatunde Fashola, Minister of Power, Works and Housing, has revealed. Speaking while inspecting ongoing works at the Afam Power Plant in River State, Fashola explained that the 340MW would be generated from the power plant alone while a further 276MW would be generated from the same plant before 2018-ending. Located in Oyibo local government area of Rivers, the Afam power plan has about 1,000MW installed capacity but has not been working efficiently due to neglect by previous administration. “Afam 1 to 5 power plants is currently producing about 100 megawatts which is as a result of the failure to maintain the facility over the years. We are here to assess the progress of the work we have been doing in the last 17 to 18 months
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aimed to get the facility back to its optimum capacity. The Afam 5 plant is currently being rehabilitated in collaboration with General Electric to restore 240MW to the facility. We think that we will add 240 megawatts and another 100 megawatts before December with addition of 276 megawatts in 2018 from Afam power plant alone, the minister said. Speaking further, he hinted that the country currently generates about 4,000 MW of electricity against a demand of 12,000 MW. According to him, this energy deficit is an important factor in the worst economic downturn over the past 25 years, currently observed in the country.
he recent verification and validation of the Maximum Demand (MD) electricity customers metering exercise by the Nigerian Electricity Regulatory Commission (NERC) has classified electricity consumers within the threshold of 45kVA consumption and above as those under the MD category and should be exempted from estimated billing system. It should be recalled that the NERC had last year issued a directive that no MD customer should be billed based on estimation. According to a press statement from the regulatory agency, the present directive is but a fellow-up to an earlier directive by the Commission to the 11 Distribution Companies (DisCos) to completely meter all their MD customers on or before 31st November, 2016. However, the DISCOS had in a swift reaction, sought and were granted a grace period till 1st of March, 2017 to kick off the implementation. The Commission had directed that “no electricity distribution company shall disconnect any Maximum Demand electricity customer that was not metered by March 1, 2017 on the basis of the customer’s refusal to pay a bill issued after the compliance deadline on the basis of estimated billing methodology.” The Commission also advised MD electricity customers whose billing were not captured through the metering system to promptly report any attempt to disconnect it on the basis of refusal to pay estimated bill issued after March 1, 2017 to the Commission. Disclosing that the rationale behind the directive was for the Commission to ensure that all categories of customers are metered stated that no MD customer should be issued with estimated bills anymore, to avoid double billing a common and recurrent complaint by electricity consumers. And for the non-MD unmetered customers, the DISCOS have also been warned to adhere strictly to the Commission’s approved estimation methodology in accordance with the Estimated Billing Methodology Regulation.“Electricity customers are also advised to avail themselves of the Commission’s redress mechanism in instances of contested bills before seeking legal advice, the statement read.
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OIL
Controversies Trail Cancellation of Port Harcourt Refinery Concession By Dirisu Yakubu,Abuja, FCT
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he Nigerian Senate’s stoppage of the concessioning of the Port Harcourt refinery for lack of “transparency,” has continued to generate a lot of debate in the media. The Minister of State for Petroleum Resources, Dr Ibe Kachikwu, had earlier hinted during at the Offshore Technology Conference (OTC) in Houston, Texas that “Nigeria’s refineries would soon have new investors, and that these investors would be announced around September 2017, as part of the Government’s full commitment towards the country’s self-sufficiency in petroleum products agenda”. Later in May, he announced that the Nigerian Agip Oil Company, a subsidiary of the Italian oil giant, ENI – “had committed to repairing the Port Harcourt refinery, as part of a $15 billion investment that included the building of a 150 thousand barrel per day refinery, complete with a power plant. To further buttress the announcement, Mr. Wale Tinubu, CEO, Oando Plc on May 11, told the Nigerian Stock Exchange (NSE) that the group had secured approval (in principle) of the government to “Repair, Operate
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Orient Energy Review June, 2017
and Maintain” the Port Harcourt Refinery in conjunction with Agip. These assurances therefore made the cancellation as announced by the senate not only shocking to industry stakeholders but to millions of Nigerians craving for optimal performance by the nation’s refineries as quickly as possible.
The complaint and Motion The motion by Senator Sabo Mohammed argued that, due process as it relates to the ‘Public Procurement Act,’ was breached prior to the agreements reached. He therefore prayed the Senate to investigate and find out the criteria used to select AGIP/ENI and OANDO PLC as the preferred entities to repair, operate and maintain the Port Harcourt refinery as well as the cost and the time-frame for the deal, with emphasis on market rate. While adopting the motion, the lawmakers concluded that, while they agree with the intent behind the approach towards the Port Harcourt Refinery, due process in the manner of selection, fell short of transparency. It would be recalled that the feder-
al government recently entered into agreement with AGIP to construct a $15 billion refinery in the Niger-Delta; a deal which also included an investment from the oil company. This agreement in the words of the Oil Minister was part of plans to boost local production, thus marking the gradual end of fuel importation into the country. However, Oando in a statement on the lingering issue insisted no rules were breached, noting that it merely indicated interest to avail the country its services as a company committed to the good of the land. The statement signed by its Chief Strategy and Corporate Services Officer, Ainoije Irune, confirmed that Oando is a party to the agreement reached between Agip and the Federal Government of Nigeria to repair, operate and maintain (ROM) the Port Harcourt Refinery (PHR) an agreement intended to ensure the refinery grow from its current 30 per cent to 100 per cent of its 210,000 barrels per day capacity. “In line with the concerted efforts of the Ministry of Petroleum Resources and the Nigeria National Petroleum Corporation (NNPC) to aggressively drive private-sector led refineries rehabilitation and expansion programs, Oando as local partners to NAOC/ ENI will support the rehabilitation of PHRC’s on activities of terminalling, logistics, structuring and funding,” the statement reads.
PHRC: The need for privatization The PHRC has hardly operated at full capacity owing principally to questionable and irregular Turn-Around Maintenance (TAM) carried out on it. Refineries in Nigeria are known to spend as much as two decades without the required levels of maintenance.
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OIL
Instead the rehabilitation of Nigerian refineries, which barely enables them to operate at minimum capacity (35%) has been the preferred course of action – a constant source of milking the system that has been sustained over the years with little oversight from the same senate. It was therefore not surprising that the PHRC was one of the two crude oil refineries slated for sale, the other being the Kaduna Refining & Petrochemical Company. Pursuant to the Privatization Act of 1999, refineries belonged to the class of enterprises slated for privatization.
Thoughts and Perspectives Events after this would indicate that the process for bids is both time-consuming and fraught with a myriad of subjective considerations. These considerations could have weighed heavily on the minds of the current minister.
Yet, it is important to interrogate the fall-out and hopefully unlearn the missing points. If the NNPC or/and the Honorable minister did not invite the public to tender then there is no way they could have publicly granted the concession to Oando and Agip; unless of course they relied on Section 5 of the Infrastructure Concession Regulatory Commission Act 2005, for which they would have to show proof that Oando and AGIP were the only bidder. If the NNPC intended to grant a “concession” in line with the laws of the land, then there would have been a public invitation to bid, a provision the Senate said appeared to have been ignored. There could well be a case of expediency which under the circumstance will be considered apt. Yet, that same argument provides the base case for an argument about the absence of best practice which engenders trust, investment certainty and
proof of learning from our recent history. While it is understood that the country’s current economic situation requires strategic policy direction and hence a reaction from the operating firms; it is no less important that the process taken to realize this objective is not in itself outside of due process; as it appears to have taken place in this regard. This can and must be quickly resolved by the Oil ministry, saving the sovereign valuable time and effort in an investigation with an obvious conclusion not intended to act as punitive measure but a corrective move to reposition the PHRC for maximum productivity.
APGC Pledges Support for Eligible Customers’ Declaration By Dirisu Yakubu, Abuja, FCT
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ecent declaration of eligible customers has been lauded as a step designed to make the power market more responsive to demands of the public, given the mileage of competition the policy is expected to engender. With the declaration, more is expected from both GenCos and Discos, as the nation looks forward to the gradual emergence of a power stable economy to feed the home, commercial and industrial activities. The recent declaration of the eligible customers in the Nigerian Electricity Market by the Minister of Power, Works and Housing, Mr. Babatunde Raji Fashola has received the backing of the Association of Power Generation Companies (APGC). The association described the declaration as a strategic step to improving efficiency and competition, thereby enhancing quality of service delivery in the generation
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and distribution sub-sectors. The declaration of eligible customers, it would be recalled, came as a response to the clarion call through pressures from consumers worried about the inability of Distribution Companies (DisCos) to fulfil their obligations to the public as well as the need to promote retail competition in the market. Executive Secretary of APGC, Joy Ogaji while briefing energy correspondents recently on the development stated that the declaration would help liberalize the sector and free it from the exclusive preserve of a privileged few whose performances in the first places, leave much to be desired. With stranded generation capacity in the electricity market and poor market liquidity,
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OIL declaration of eligible customers is the brilliant way to liberate the electricity sector from the current monopoly by some underperforming companies. This policy directive will lead to increased energy generated/available and expand generation capacity as Generation Companies (GenCos) would potentially ramp their generation capacity to provide supply to eligible customers, thereby addressing issues bothering on financial viability of the electricity supply value chain, which is the main and immediate challenge confronting Nigerians from enjoying the benefits of the Power Sector Reforms,” Mrs. Ogaji said. The declaration of eligible customers aligns with the provisions of an Act of Parliament, the Electric Power Sector Reform (EPSR) Act 2005, the legal framework of the power sector. Although, there have been voices of dissent over the development, relevant industrial Acts have shown that Fashola’s action falls within the ambit of the law. The National Electricity Power Policy (NEPP) 2001 and the EPSR Act 2005 provides for the development of Nigeria electricity market with wholesale competition and recommendation to assist in monopoly control and cost adjustment, where necessary. The declaration pursuant to Section 24, Subsection 2 and 3 of the Act, according to Ogaji, “does not portend that the market is competitive but rather the declaration is intended to initiate a competitive market as stipulated in Section 24 (3) of the Act.” Subsection of the ESPR Act states that “The Minister shall present to the President and the National Council on Privatization and the National Assembly , each report submitted by the Commission under subsection (2) of this section and when the Minister, in consultation with the President and the National Council on Privatization is satisfied that the electricity market in Nigeria has developed to the point where a more competitive market ought to be established pursuant to section 26 of this Act, having regard to the criteria described in subsections (a), (b) and (c) of subsection (2) of this section, the Minister shall issue a declaration that a more competitive electricity market is to be initiated.” It is noteworthy to stress here for the sake of emphasis that section 26 (1) of the EPSR Act does not imply that competition should be fully entrenched before the declaration but that “the declaration initiates, commences, heralds, starts, begins, originates, inaugurates and launches the process of market competition.” Section 24 (2) of the EPSR Act makes provision for pre-conditions for the readiness of the Nigeria Electricity Supply Industry for a more competitive market, some of which are; -The degree of privatization that has taken place, -The existence of sufficiently large number of potential competitive entities; and -The existence of other pre-conditions, including necessary metering and informa-
tion technology infrastructure, required for the operation of a more competitive electricity market. Ogaji noted that alignment with the law is what led to break up of the defunct Nigeria Electricity Power Authority (NEPA), and its eventual privatization. She stated on behalf of APGC: “In adherence to the provisions of the Act, the end of the monopoly of NEPA has been facilitated and completed with the framework and guidelines for its privatization through the eventual formation of companies to take over the functions, assets, liabilities and staff in a bid to make the electricity market more competitive with seven generation companies, one transmission company and eleven distribution companies-an arrangement expected to encourage private sector investment particularly in generation and distribution.” A lot has happened since the privatization and handing over of generation and distribution assets few years ago. For instance, on November 1st, 2013, peak demand load forecast which stood at 12, 800 MW with available generation capacity of 5, 000MW and a average daily generation of 3, 500MW to 4, 0000MW has culminated to the present demand forecast of 17, 720 MW with available generation of 8, 000MW, with an unchanged daily generation of 3, 500 MW to 4, 000MW. So, what is responsible for the huge gap in these figures in a little over three years period? APGC cited big gap in metering connected grid and suppressed load, more than three years after privatization. “The implication” the association notes, “is that transmission and distribution infrastructures are yet to be put in place to take stranded generation capacity from the generating companies who are willing to sell power to suppressed load centres desperately in need and willing to buy power,” the association explained. More than three years after privatization, the 11 DisCos have enjoyed the monopoly of bulk power purchase; yet unable to distribute and account properly for power purchased and distributed while GenCos that are potentially competitive entities, wait desperately to sell more power as well as end users willing to buy more power for residential, commercial and industrial use. What this means in simple terms is that DisCos have been unable to evacuate power generated for distribution to those in need. The declaration therefore does not in any way paint a picture of worry or uncertainty about the future. The immediate positive takeaway now is that GenCos can now sell power to suppressed load centres, thus making up dwindling revenue to pay their gas suppliers. Customers on the other hand can now synergize by pooling their resources together to be classified as ‘eligible customers.’ This translates to investment in metering, transformers, power lines and electrical switchgears. On the expected gains of the declaration, Ogaji had this to say.“The declaration portends several benefits for the sector as it will also address some of the liquidity and revenue shortfall in the sector
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as guaranteed cash flow will definitely boost the morale for potential investors in the areas of gas field development, power generation capacity and also in the manufacturing industry with assurance of constant power supply to meet production demand,” she noted, adding that competition would also rub off on the sector as a result of the declaration. “Eligibility will furthermore introduce competition on the demand side and complete the liberalization of Nigeria Electricity Supply Industry (NESI) and improve efficiency, bringing about greater pressure for efficiency on the suppliers. In addition, the presence of retailers, or the mere possibility of future competition, will force existing distributors to establish appropriate customer services and commercial divisions, promote national economic development through supplying of electricity to the productive sectors of the economy, thereby supporting economies of scale through bulk purchase of power,” Ogaji added. Additionally, the declaration is expected to lead to reduction of technical and non-technical losses for bulk High Voltage supply in the NESI, reduced financial risks by supplying credit worthy eligible consumers, bring about increased attention to consumers, confers on consumers’ liberty to choose energy supplier, ensures efficient electricity market as well as stimulate investment in the sector. Equally significant is the fact that the declaration will send a great signal that the energy sector is gradually evolving towards full retail competition, thereby ensuring a reduction of financial risk through the supplying of services to credit worthy eligible consumers. On the part of the DisCos, they can obtain additional power as eligible customers. The increased competition is expected to propel them to improve on service delivery in the short-term and reduce losses. The dissenting voices notwithstanding, the association argues that the declaration of eligible customers would create a willing sellers and willing buyers situation, thus engendering a market striving towards effective demand. The impact will be creation around the clock jobs with sufficient power provided to eligible customers who are willing to increase production. The direct effect of this will be a working and stabilized economy that the nation has been craving for. While this policy initiative is capable of turning around service delivery and ensures return on investment, what is most important is its implementation as industry stakeholders agree that the trouble in the power sector has not been much of a lack of innovative policies than the will to implement same. It is left to be seen where this declaration would leave the sector in the years ahead.
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INTERVIEW
Intensive Exploration Activities are ongoing in Nigeria’s Sedimentary Basins - Adesanya
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r. Abiodun Adesanya is the President, Nigerian Association of Petroleum Explorationists (NAPE). A petroleum geologist of the highest category, Adesanya has years of experience in a career spanning more than two decades. He worked with Elf Petroleum, supervising seismic operations and was later deployed to the Asset Management team as Senior Geoscientist in charge of 2D/3D evaluation and portfolio management.In 1997, he joined the then Landmark Graphics (now Halliburton) and was tasked with management and provision of technical consulting, sales marketing and training to local, national and international independent and multinational companies within the Sub-Sahara Africa.
In this exclusive interview with the Orient Energy Review (OER), Mr. Adesanya speaks on oil and gas prospect in the Lake Chad and other Sedimentary Basins, the recently passed Petroleum Industry Governance Bill and the forthcoming NAPE conference, amongst others. It is OER’s exclusive! OER: Let’s congratulate you again on your assumption of office as President of the Nigerian Association of Petroleum Explorationists. What are you bringing to the table differently from your predecessors?
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r. Adesanya: Thank you very much. Let me first of all commend my predecessors that you just mentioned. They have done tremendously well. They have set such high standards. We are going to up the game a bit more because like you know, our industry is a very dynamic one and we have to be responsive and reactive to those changes that we see. So, to that extent, we are going to be addressing the issues that confront the industry today and a number of them, quite
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well known, are being addressed already. One of the issues we’ve had and that has lingered over a long time is the Petroleum Industry Bill (PIB). We can see some movement now and even though we have not gotten to our destination yet, we know that some work is being done in that regard. Another challenge we’ve had has been the issue of the Joint Venture call arrears and liabilities by the Nigerian National Petroleum Corporation,) (NNPC). Again, a formula has been found; not an easy one but it is a workable formula once everybody puts their minds to it. To our members, the biggest challenge is putting them back to work. The industry has lost a lot of experienced hands, some of whom were trained with a lot of resources. Even though, they have been discharged in their primary places of work, our own objective, not directly but indirectly influenced by what goes on in the industry is to find a way, just to illustrate, if there is a licensing round for example, some of our retirees would be put to some work. And if companies are being formed as a consequence of their ownership of new assets, they would be able to get back to some jobs at least to be the managers of whatever
opportunities that are coming from that. Those are for our members. We have very large and vibrant pool of young professionals and student members and we intend to engage them. One of the biggest challenges I have seen is the lack of awareness of what’s going on. We have had a number of social interactions whereby a lot of bonding took place. We had one in Lagos and another in Port Harcourt and we shall continue to do this across the land. The idea is to bring our young professionals together and interact with them,, mentor them and share with them technical and industry information to enable them have a grasp of industry trends and developments. For the NAPE Secretariat itself, we intend to look for another location. Historically, you will recall that NAPE started from Campbell Street, around St. Nicholas in Lagos Island and then we acquired a building in Victoria Garden City. We later moved to Femi Okounu where we are now. We intend to continue that movement and to move closer into town so that accessibility to the secretariat would be a lot easier for our members.
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INTERVIEW
Last year, we had a conference and the Pre- Conference Workshop dealt with the issue of frontier basins. We proffered some suggestions to the Federal government and some of them are being implemented today. We intend to keept our eyes on the ball and continue to guide them. There are also some interactions going on with the Frontier Exploration Services (FES) in that direction. To further continue that conversation , we are planning a workshop in September that will discuss not just what they are doing in the Benue trough alone, but frontier basins as a whole. The workshop will address issues from Dahomey basin offshore Lagos to Anambra basin, to Benue, to Calabar, Chad and Bida basin. We want to update our knowledge because a lot of work has been done in the past and additional information has been available but there has not been a progressive synthesizing of all that information. So, we want to catalog these information, create the awareness, and provide a platform for professional technical interaction around those issues such that we can begin to market the potentials and opportunities in these areas to investors. It is a mid-term strategy towards creating opportunity for employment.. In the nutshell, that’s where we are. The conference theme has been carefully chosen to represent contemporary trends in the oil and gas industry and the nation’s economy. One thing about choosing conference themes is that you have to be able to gaze into the crystal ball and see what the situation will look like by the time you are having the conference, so that your topic will be relevant. We have done that and we are discussing “A Roadmap for Nigeria’s Oil and Gas Industry in a Diversifying Economy.” Nigeria is at that point now where we are discussing ways and means of diversifying the economy. Is there a committee in place to streamline the research into the frontier basins you just spoke about? The committee has not been formed because, you first of all have to carry out some findings as regards what to expect. . We’ve spent some time doing that and we are seeking advice on the best way to go about it. The good thing is that there is tremendous interest and people who
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are very excited about the whole project.. Some of the people who worked in these basins have retired and the information they have needs to be passed to the younger generation. Some of these old hands are around and they are willing to share their knowledge. And we have a very “hungry” and young group that is ready to grab this information and to run with it. Nigerians would like to know if there is oil in Lake Chad basin. If yes, is it of commercial quantity? Let me be very professional here in my submission. Lake Chad is a geographical area and the basin itself is a geological area. Both of them are not the same. Benue for instance is a geographical name given to a river and a State. It is not the same as the geological area that we call the Benue trough. Sometimes, when people talk of Lake Chad, they look at where the water is now, but geologically Lake Chad or what we call the Borno Basin is an expanse of area of which the present lake is a small segment of; it extends from the Southern part of Nigeria to Niger and Chad Republics. So, when you ask if oil has been found in Lake Chad, the answer is yes. But if the question is has oil been found in the Nigerian part of the Lake Chad, the answer is no. Again, is there a possibility of getting oil here? I will say, yes. Perhaps, we’ve been searching in the wrong places, due maybe to working with wrong data and wrong strategy. In 1999/2000, President Olusegun Obasanjo drew a curtain on the spate of indiscriminate drilling in the Chad basin and that was a very good move. It was like: “you have drilled about 23 wells and you haven’t come up with any commercial find, why not pause and analyze the data you have so far acquired just to see whether you have been working in the wrong place of right place”. That exercise of studying what has been done in a very integrated fashion has been accomplished.. They now have areas where they need additional data before drilling and they have marked those areas. They have also seen that where they have been drilling is not quite where they ought to be drilling. Of the 23 wells that have been drilled, 2 have gas shows and once you have gas shows nearby, you need
to be sure that you have oil nearby. This they got from the integrated study and to this extent, it is better they concentrate in the area where there is gas shows. That process is well understood and formed part of what was discussed at last year’s NAPE conference. What needs to be done is clear in the minds of frontiers explorationists. In terms of how much reserve, I will say it is too premature to say and again data is what we have to rely on. We have to make the discovery before determining the volume. Yes, we can make a guess but again, you have to do that based on data strength and that is not available to NAPE right now. Part of that data needs to be acquired in the first instance. We are still a little bit away from where we are heading but we have the direction and the right approach and so, we are heading there right now. And I think in no time, we’ll get the right answer to your question. We understand there are other Sedimentary Basins in Nigeria; can you throw more light on them? We have about half a dozen sedimentary Basins in Nigeria. Niger Delta is a well explored, well-known one. There is Dahomey or Benin Basin, offshore Lagos. It starts from where Niger Delta ends in Ondo. Dahomey Basin geologically stretches from Ondo all the way down to Benin. Republic and Togo and is part of what we call the West Africa margin. Different names come up in different write-ups. If you look at it regionally, we call it the West Africa margin and it goes as far as Senegal. You can see that there is a lot of interest and discoveries being made. Senegal has been able to attract big names there. CNNOC is there, BP and Exxon Mobil also. They are all taking big blocs because of some of the preliminary drilling results. Again, if you look at the approach, they haven’t drilled 23 wells before making those discoveries. In our Chad basin, we drilled 23 wells and we haven’t made any discovery. You now understand the context in which the earlier question was answered. We don’t need to drill too many wells to know where we need to be, to know where we need to explore and all of that.
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INTERVIEW
So, the approach and strategy are very important. Apart from Dahomey Basin, we have the Anambra basin. Again, there is the geological and the administrative components. There is the Anambra River and a State called Anambra. Anambra basin extends from Edo to the other side of the Niger, to a bit of Delta State and into Enugu, Anambra and Kogi State. That is one area. If you look at the history of exploration work in Nigeria, it started offshore Lagos, Badagry and to Anambra Basin. All these were before independence and it then descended into the Niger Delta before discovery was made. So, Shell BP has drilled some wells in the Anambra Basin in the past. Some of them made gas discoveries and this was an era where gas was considered a dry well and such that when you make a gas discovery, it’s assumed nothing has been found. So, some of them were covered up; the blocs have been reorganized and assigned to some new operators now. Additional works have been done and you remember that in 2014, the then President, Goodluck Jonathan came to commission a production for Oriental Petroleum in Anambra River field, which was a field that has been drilled by Elf Petroleum between 1967 and 1974. They drilled three wells, Anambra Rivers 1, 2 and 3 and drilled more wells all over that Basin. To the North of those places is the Benue trough. The Benue trough starts from the North of Enugu State, North of Anambra State, East of Kogi State and goes across to Gombe and Bauchi area and part of it to Yola in Adamawa State as well as Taraba State. And because one arm goes one way and another to Yola, we now have the Yola arm of the Benue Basin and the Gongola arm which is the River. There is a volcanic boundary around Biu which is the Chad Basin and it goes all the way into Chad and Niger Republics from the Southern part of the present Borno and Yobe States, with a part of it extending to Cameroon. Also, the Yola arm of the Benue Basin extends to Cameroon and Chad. The Chadian side has a discovery and a production by Exxon Mobil that are producing through Cameroon. The pipeline was laid entirely in Cameroon into their port by
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the coastline in the Atlantic. It is a proven Sedimentary Basin, just like the Chad Basin is proven in the Niger. Everybody calls it Benue as if it is one homogenous basin but we know that there is Yola Basin and the Gongola Basin. Then there is Bida Basin which is the Western part of Niger on the way to Kebbi State. We also have the Sokoto Basin that covers a bit of Kebbi State and a small area of Zamfara State and that extends properly to Niger Republic. This area is the Sokoto Basin but the French people call it the Ilullemmeden Basin. Has there been any exploration activity in the Benue and Sokoto Basins? Frontiers Exploration Service is in the Benue Basins right now. Shell, Total and Chevron had drilled wells in the Benue before. Relatively speaking, all the basins have been touched and a kind of exploration work had actually taken place but the quantum of works differs. Today, the Dahomey Basin - Aje Field is in production and another discovery, the Ogoh field is where they are developing. You say that is a proven basin. The Anambra Basin already has the Anambra River that President Jonathan commissioned. It has been in production but it is shutting now because they were targeting to produce oil only to discover they had a lot of gas. The strategy and investment for that is what they are trying to put together. There are other pockets of gas discovered in the past that some operators are trying to work on. The effort of Chevron, Shell and Total in the Gongola Basin led to each of them drilling a well apiece in 1996/1997 in their respective blocks they were allocated. Kolmani River made a discovery of gas in that place. There is data acquisition that is ongoing now by Frontiers Exploration Service centre around that area so that they can drill Kolmani River 2 and begin to have an idea of the dimension and size of the gas. In essence, gas has been discovered but we don’t have an idea of what the volume is. Because of shortage of information, we need to do that assessment.
issue and how it was resolved? What was the model deployed by NNPC? From 2005 to 2015, there was accumulated joint venture call arrears. You know when you prepare your budget and the President signs it into law, you must spend the money. It is like you are breaking the law by not doing what you are supposed to do. But we do recognize that there are some constraints of people’s expectations and revenue streams and all that should fund the projects. So these are carried over and they cannot be cancelled. I don’t have the figures but it was close to $20 billion that was owed and recognized as at 2015 when we had our NAPE Conference. What government has done and this is all coming from the discussions that NAPE has had in the past. NAPE chose these topics and had discussions about them and came up with solutions, which were presented through communiqués that we sent to government. This government is listening and somebody is studying and watching what we say; which is very good. So what government did was to call all the oil companies together and presented a scenario to them, They were told that in an ideal situation, Nigeria produces 2.2 million barrel of oil per day, And they, all have a quota production towards that 2.2 million. They were reminded that this 2.2 million is coming from the IOCs, the PSCs, the Independents, the marginal fields. So, whatever their own quota is as joint venture operators, that quota is cast. So government now urged them to propel themselves by exceeding that quota. At the time they settled this issue, the Niger Delta challenge was still there and meeting the quota was still a problem. But today, we can say that there is significant progress in that direction. They not only produce their quota, they produce more and that incremental margin is supposed to be shared by joint venture partners but government now says, use our share of this to defray what it is owed the partners.
Sir, tell us about the huge cash call
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INTERVIEW
So, this is what they did. Going forward, government is trying to remove itself from this cash call responsibility and argued that each project should source for its funding internationally and that is a strategy that is embedded in the Petroleum Industry Governance Bill, (PIGB.) Package your project, convince the investors and let money flow in. That way, you won’t be looking for NNPC to bring cash call. With this, each company is now on its own just as we have SEPLAT and others. As it is now, companies now have to package their projects and convince financiers that they can pay back. This solution fits this PIGB very well. The Senate has passed the Act but the House of Representatives will also need to do same and then both Houses will have a harmonized version which will be taken to the executive for assent. So does the PIGB as recently passed by the Senate meet your expectation? Yes, it does. You see, when you are unable to move at all, anything that comes your way is good enough. I like the strategy and you remember that the earlier version of the PIB is one giant document. Now, if you speak with the parliamentarians and Nigerians in general, people don’t have issues with about 80-85 per cent of that document. It is the contentious 10-15 per cent that derailed the entire document and that nullified the hard work that people put into that document. What this government has done was to break it into three parts and take the less contentious issues and get them done with and then sit down to do an eye-ball to eye-ball negotiation on the rest. That way some activities can be taking place. The PIGB is a welcome development and I hope that the House of Representatives gives it a dispassionate approval and I hope that it will come to government and it will become a law very soon. It’s long overdue and the delay in passing it has done a lot of damage, created anxiety, delayed projects and no new investors came in. There were no exploration activities in the way and manner it should have been. Everyone retreated to their zones and watched what was
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going on. What do you make of this shale, the potentials and its impact on our market? It has already affected our market and has been responsible for why Nigeria is in recession even though the situation was compounded by some Nigerian localized issues. Basically, it has made people that we used to sell oil to become potential sellers to us, if we are able to buy. That is basically the United States of America, which was our biggest importer. They are saying, they can supply gas to Europe as from 2018. This means they have surplus. When they say they can sell, trust me, they have enough for 50 years. What is happening is that the supply and demand have been stabilized by the shale oil. A situation where demand was dictating the oil price is gone as supply is now the new determinant of the oil price. Organization of Petroleum Exporting Countries, (OPEC) has been struggling to hold it by way of supply cuts just to make what is available to be lower, to make the supplier a bit agitated. This is what has been keeping the price afloat but if all countries are allowed to produce the way they like, the oil price will crash down further still. Now, do you think the shale technology is something Nigeria can acquire? Yes but I won’t say we should go in that direction now because we haven’t finished with the conventional practice. We shouldn’t rush into it also because of the cost. Yes, the cost is gradually falling which is one of the factors that delayed it but we still have a sizeable reserve of 37 billion barrels and we want to grow to 40 billion barrels in the next few years. We are not
desperate for energy and we need to develop by using what we have to get to where we want to. We need to develop our infrastructure, our industries and uplift the economic situation of our people. We need this in oil and gas and this is where the theme for the NAPE Conference is linked. We need to ensure that we optimize and become more efficient managers of these resources and channel the revenue thereof into other sectors to grow them. For instance, if you do an audit of the Petrochemicals, what comes from oil and gas will probably be up to about 60 per cent that our lives are invariably tied to. We waste some of these resources and haven’t really used them fully. The Petrochemicals industry is underdeveloped in Nigeria. There is an Eleme Petrochemical industry which is not doing much but we need a giant, modern Petrochemical industry. Basically, we have the multiplier effect that this would bring to the economy if we are able to efficiently work on it. Do you think we are ready for enhanced oil recovery technology in Nigeria? We have been using it because Niger Delta is a mature producing area. Some of the discoveries date back to decades and we have witnessed both peak and declined production. So, we are already doing enhanced recovery in some areas. What will come are guidelines for doing it. The existing guidelines are targeted towards primary production. We need to work on our guidelines to direct the companies on what to do.
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INTERVIEW Aramco is producing a barrel at about $9 or much lesser. What are we doing to bring down this cost at the moment? It is about amortizing the facilities because, don’t forget, Aramco made their discoveries years ago. They have a giant field that is about the size of Ogun State (in Nigeria) and they have thousands of wells on that field. They built infrastructures for production and everything over the years. So, the field itself has been amortized overtime and therefore, the cost has been incrementally falling. You can’t compare them to one small field somewhere in the Delta recently discovered. Having said that, our cost is high in Nigeria and there are two sides to this. We have the technical cost element and the non-technical cost element. We can work with the technical cost element by meeting all the contractors and tell them how much we can pay because oil price is low. But we have the non-technical cost of JTF, Navy, host communities, security, vigilante and cost for monitoring your pipelines and cost for preventing people from doing bunkering on your facility. This cost has been escalating and it has no respect for the fall in oil prices. Recently in Houston, you spoke brilliantly on managing our gas, stressing the importance of having pockets of industries at different locations. You may want to shed more light on that. What I said was that gas has been found in the Sedimentary Basins and therefore more exploration needs to be done. The Gas Master Plan was launched during the stewardship of Diezanni Allison Madueke. Even though, it has not quite gathered traction, the strategy is that gas would be taken from the Niger Delta and there would be a network of pipelines across the country that would take gas to all nooks and crannies of the country for electricity generation, for ammonia fertilizer plants, for urea plants, LPGs in a bid to boost the economy and create opportunities. So, what I was saying was that in the event that gas is found in say Benue, Gombe area, it means, the map would have to be adjusted. You don’t need gas to come from the Niger Delta area. I was advocating for the intensification of exploration work as quickly as possible where we have pockets of gas deposits so that the Master Plan can be revised www.orientenergyreview.com
and made to align with where the gas resources are. That way, you will have fewer distances of pipelines to lay and to vandalize. Another thing about inland basins is that your IPP (Independent Power Plant) can be built on the field; your urea/ ammonia plant can be set up there and then. So you don’t need any pipeline taking gas to anywhere. Once you build your urea/ ammonia plant and set up your IPP, you enter the grid from there and the man on the other end will see the light. The strategy is flawed in principle because of urgency and lack of careful planning. We have a lot of IPP plants like Olorunshogo, Geregu, and Omotosho etc across the country, expecting gas from the Niger Delta. How about putting the IPP right there at the Niger Delta? Okpa field has the IPP by Agip right there and I think it is the only one. Omotosho, Geregu and Olorunshogo are in Kogi, Lagos and Ondo States expecting gas from elsewhere and so if somebody cuts the pipeline, that’s all. So strategy wise, we were in a hurry. Licenses were given to marginal field operators but many of them are not doing very well. Beside their financial challenges, what other hurdles are they battling? I will call it economic challenge because the marginal field is all about economics. There are other challenges like the host communities challenges. If you are in Ogoni where it is difficult to move forward, you have the marginal field but you won’t be able to do anything. Another issue is the nature of crude oil in your field. There is what we call heavy oil, which is sluggish to fill. Take for example kerosene, and engine oil. If you pour both, one is faster, the other is sluggish. That speaks about what we call the viscosity of crude oil. If it’s like that in the reservoir, they call it dead oil. Like I said, the deeper you go while drilling, the hotter it becomes and the more pressurized things are. If you manage to puncture something by drilling into something like a balloon, oil will start coming out by itself. When you have low gravity oil, it is unable to come out; you’ll need secondary effort to push it out which comes with its own attendant cost. By the time you build cost into the economics of everything, it is no longer viable. So even if you have community problem and you throw money at it, you put that money into the economics, it becomes part
of your expenditures. The hypothesis here is, if I spend X, can I make Y? How much profit is being made and is it worth the money being spent? There is technology as well as infrastructure issues. My field is at one stranded location and the person I can lay pipeline to help me evacuate it is so far away. By the time I put the cost into the economics again, it may not make sense. So, can I truck it? Again the cost of trucking not forgetting the associated security risk is another cause for concern. There is also the challenge of people who don’t even know what to do, political people who own blocs. They are given expert advice but they don’t listen.
What is your advice to government on the way out of these pitfalls in subsequent bidding rounds? First of all, their selection criteria in terms of who is awarded should be all-encompassing. They should have the financial resources and technical competence as well as the managerial team to do it. And then, they should come up with a solution that is acceptable to the host community to be able to do it. People shouldn’t just rush into bidding but there is need to engage consultants to help in the screening process of what is available so that you know what you are bidding for. What should be the strategy for catching up with Angola in terms of production level? Let me put it this way. They don’t have our reserves and they are fortunate not to have onshore presence and exposed as we are. They had a template from Nigeria because when they started, they came to Nigeria to find out how things are run here. So they have a book that has some pages on the way things are done but Nigeria started from nothing. Do not forget also that they came out of a long protracted civil war which was fought along ideological lines. So when oil and gas activities started, people were not there but it has become the mainstay of the economy now. They have seen a lot of discoveries, interests and investments from the big guys. Angola is a country of about 14 million people with a landmass of one half the size of Nigeria.
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INTERVIEW They are rich in solid minerals and they a good land for agriculture. So, it is already a prosperous country that is naturally endowed with oil and gas resources offshore. 14 million people with large volume of oil and gold and copper and all of that, they must be above us. Their Per Capita Income is very high. This is what is behind their success. They have seen where Nigeria is making mistakes and they are avoiding those mistakes as much as possible. Nigeria hasn’t optimized what she is doing yet to attain our full potentials. If we do, we’ll surely be ahead of Angola. If we are able to reach our 2.2 million barrel per day, we’ll be ahead of them. Most emerging oil and gas nations in Africa always make reference to Nigeria at international conferences and they avoid the mistakes that we have made and still making. It is easier to learn from other people’s experience but when you don’t have anyone to learn from, it can be quite challenging. With the right leadership, we can get there because our crude is sweet crude devoid of sulphur content unlike what some of these countries have. So, they need huge sums to clean it up a bit more. NAPE’s Annual International Conference and Exhibition is one conference everybody looks forward to. What should
we expect this year? The first thing is the theme: a roadmap for the Nigeria’s oil and gas industry in a diversifying economy. We know there is a lot of effort at diversifying the economy. At this year’s conference, we have already seen very good interest being shown by some of the IOCs and some of the key players in the sector. For instance, Chevron has accepted already to sponsor the opening ceremony and they are also asking for permission to deliver the keynote address. We also have Exxon Mobil showing interest, so the programme is selling itself, but we want to ensure that we speak to the topic because we want to come up with a message at the end of the day for the Nigerian people and Nigerian government. What we see is that the Agriculture Ministry, the Solid Minerals Ministry, Power and Infrastructure are opportunities to diversify the economy of this nation. We want to find a way to bring them into our Management Sessions for discussions. If you bring Audu Ogbeh to talk about agriculture, he will be speaking not only to the industry and the companies but also to individuals who will now know that beyond oil and gas, they can also invest in opportunities in agriculture too. Do not forget that in the old NAPE conferences,
we used to have companies like AGIP exhibiting some agricultural products like yam and plantain, just as a way of supporting the host communities. We want to bring all of this back and create an enabling environment and do not forget that we are geologists and geoscientists and part of our course content is solid, liquid and gaseous minerals. To this extent, we are bringing the Solid Minerals Minister to join us at the conference about the opportunities that exist therein so that companies that take decisions based on these opportunities. We want to carefully open the eyes of government, companies and investors to the opportunities that would be of benefit to them in a manner that will be linked with the oil and gas industry. We must thank you for the time spent with us It’s my pleasure always.
Ease of Doing Business: 48hr Cargo Clearance Premised on Trade Facilitation –Borha Review’s (OER) Peace Obi argues that government must simplify the trade facilitation process in order to attain 48hrs Cargo clearance. Borha also spoke on the port concession review as well as the exit of the Lekki Deep Seaport Partner. Excerpts!
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ndustry expert and head analyst of Borha Management and Economic Services, Chief Christopher Borha in this interview with Orient Energy
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OER: The Committee on Ease of Doing Business has among others things charged with the responsibility of ensuring that cargoes are cleared within 48hrs. How feasible is this and at what point does 48hrs begins to count? Borha: This concept of 48hour clearing has been on for a long time
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but it is just a slogan because nobody has sat down to provide answer to the question- 48hours from when? So let us trace the process. The port is an interface between water and land. An ocean going vessel bringing goods to Nigeria will get to the boundary between the ocean and the channel. That boundary is called the fairway buoy. He gets to the fairway buoy and he tells Nigeria, “Hello Nigeria, I’m here.” Can we start counting 48hours from there? No! Then Nigerian will say, “You wait! We are bringing you in.” The Nigerian Ports Authority sends their pilot to go and bring the vessel into the berth if there is a chance. Where the berths are occupied, the vessel waits. So, coming to the berth, it depends on the occupancy rate but let us assume that for this
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INTERVIEW analysis, there is chance and the pilot berths the vessel successfully. Can you start counting 48hours from there? I don’t think so. Now, you have left the water, you come to land. In the past, it used to be one person that does all of these activities. It used to be Nigerian Ports Authority (NPA) but during the ports concessioning era, the activity on land was concessioned to private terminals operators. So, let us assume for argument purposes that that vessel is in a container terminal. Then the private terminal must still offload the container, hold it and the vessel departs. I think it is at that point you can now start counting your 48hours. The point we are making on the directive is, from the time the container is offloaded and the terminal operator is waiting, the owner of the cargo must take possession within two days. But for the owner to take possession within two days, it is assumed that the owner of the cargo would have completed all documentations with the Nigerian Customs, paid their duties and also paid the Shipping line that brought the vessel. If you then come to the terminal operator, if you come within a specified number of days, you can take your cargo free of all charges before it gets into demurrage. The critical question is “What exactly is preventing the owner of the cargo from showing up within two days. If you can answer that question, you will be in a position to meet the objective of 48hours. Moreso, not all vessels are cleared at the same speed. General Cargo takes longer time. It sometimes takes a week to offload rice and cement. The requirements are different. Roll on, Roll off is supposed to be the fastest, they can be cleared within hours, followed by containerised cargo. Also, take the peculiarities of the Nigerian importer. Let us assume he imports cars from Belgium and has been told to pay one million naira to Nigeria Customs but he doesn’t really have a customer yet. He calculates the demurrage he will pay versus the amount he will pay if he takes his cargo outside the ports to the bonded terminal. If the cost of paying bonded terminal is higher than that of keeping his cargo in the ports, he will leave the cargo in the port. Sometimes, people don’t clear Customs seven days or two weeks because of false declaration. Everybody wants to confirm that what is on the Bill of Lading is exactly what is in the container. So there’s the element of physical inspection. I know www.orientenergyreview.com
that with the professional method of the Customs, they can decide who has a green light or the red light. If the cargo is coming from areas they suspect they need to pay more attention, they pay more attention to it. But if you are going to do physical inspection of containers, it is going to take more time than the 48hour bid. So the interplay of the characteristics of the Nigerian importer, of the characteristics of the Nigerian economy, of the characteristics of security demands of the nation, of our particular culture, affects cargo clearance. On the security of the nation, if you have the power to clear your cargo at night, will you remove it from the port at midnight? Will you put your container on the road at midnight from Lagos to Ibadan or even Apapa? No. Ours is a 12 hour economy. The Nigerian economy is not a 24 hour economy. The nature of the economy also affects 48hour clearance. People don’t work on Sundays in Nigeria. The point I’m making is that 48hours clearing is a goal we should try to achieve by simplifying the trade facilitation process. We should progressively strive to attain 48hours and it should start counting from when the vessel has departed and the cargo is with the terminal operator. Again, it is only in the Western Ports that channels are open 24hours. To this day in the East, vessels are not allowed to sail at night. It started from the Civil War era but it is still on. If you sail at night, you are doing it at your own risk. Only the large LNG vessels going through the Bonny Channel sail at night because Bonny Channel has been adequately dredged and taken care of. You know all the various problems with the Gulf of Guinea. We should also try to ensure that 24 hour sailing on all our channels is attained. What in your opinion is the way out of Port Concession review? NPA as a tool port was not working. We were more efficient on water. We keep all the channels open. We also have the pool of human capital. Since 1956, NPA has been bringing in vessels successfully. However, when it came to our activities on land, we were not quite the best. We did not do well in cargo handling, yard operation, terminal operations, cargo safety, port lining, access roads etc. That was why the thinkers at that time and World Bank said cargo
handling should be concessioned. After the due process, private terminals operators came on board. The World Bank by the way recommended that we started concessioning only a few ports then if it is successful, migrate to others but because of the nature of our economy and politics, if we didn’t do everything at the same time the way it was done, it will never have been done. In fact, a lot of people forget that there was a second part to the Port Concession. The second part is the decentralization of the Ports Authority. And the decentralization was done. There was Eastern Port and Western Port so that the ports could compete amongst themselves. One of the reasons the decentralization was necessary was that, hard currency that is being earned in the east, in the oil terminals at Onne, Calabar, Port Harcourt are all sent to NPA in Lagos and Lagos in turn gives them so to speak ‘pocket money‘ to run their operations. The argument was and I agree with that argument to let the port keep the money they have earned, use it to improve their ports and compete among themselves in prices, cargo handling and operational efficiency. Government accepted that World Bank recommendation and actually decentralised Western Ports and Eastern Ports. But immediately that government that left power and the new government came, everybody said it (decentralisation of the ports) wasn’t in the Port Act and instead of changing the Act to suit what had been done, it was cancelled. The autonomous port system was overruled and they came back to the unitary port system. That is the second part of the concession agreement that has not been done. I will counsel that we go that way. We have to give kudos to former President Olusegun Obasanjo who put the force of his office behind the concession exercise, the then Honourable Minister of Transport and Dr. Abiye Sekibo, the then MD, NPA, Chief Adebayo Sarumi who guided the concessioning exercise objectively and successfully. Port Concession was successful because first, NPA stayed away from terminal operations. Private sector invested in new equipment, yard management, automation etc. Before then, we had ‘wharf rats’; people looting containers, but now the private terminal operators have added value.
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INTERVIEW
The Ports authority also now makes more money through the annual lease fees, berth rent, cargo throughput fees. However, the test is to make good better and better best. So, we need to look at the agreement. Where have we had problems? A major problem of Port Concessioning was that the speed of taking decision was faster in the private sector than the public sector. The private sector is obligated to improve its berth but it must get permission. The private terminal operator brings a proposal for consideration and approval but the Port authority takes months to approve. There are obligations of the NPA in the concession agreement. Take the obligation of NPA to Port Harcourt Port. The NPA was obligated to deepen the channel so that they can handle bigger vessels. It has not been done. Before you do your budgeting, allocate money, get approval, advertise, shortlist and do the various things that government does, what should have been done in one year takes two years and then it creates a problem and becomes a business argument, a liability. Change in government policy is another issue. I remember there was a change in cement policy shortly after a terminal operator in Port Harcourt went into the business of bagging cement. In the middle of that transaction, the policy changed and the man was left holding the bag. In my view, simplifying the processes of the authority will also help the Port Concession Exercise. There is nothing wrong in the review but not just on the side of the terminal operator. Everybody should come to the table with the improvement they think should be considered. I understand there are some grumblings about throughput fees, about paying in hard currency, about updating government policies that affect their cargo offerings, about logistic base and people who want to handle oil and gas products but then balance that with the hazardous nature of that business and the need to be particularly well equipped for the business during the review. Port Terminal Operators are of the view that government is not protective of their interest. How important is it that we address this for our economic growth? Government has not been consistent with its econom-
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ic policies. Of course, the terminal operators are right. The economic climate is hostile and whoever came up with the policy that made the Nigeria Customs to be independent of the Ministry of Finance should please think again. The Nigeria Customs implements policies, they don’t make policies. We have a system where the Nigeria Customs is making trade facilitation policies. Lack of consistency has not helped the private terminal operators. I agree that part of the concession review should include a review of the Trade Facilitation Processes of the FG. Without that review, I am sorry it is not going to work. We should not see private terminal operators as opponents, they are our partners. Let us make trade facilitation easier and step back from this harsh environment. People have planned their terminals and in between, you just change the rules of the game for one reason or the other. The other day, export of logs of wood was banned as well as finished products. Out of the blues! You are a company, you have taken your decision, you have opened Letters of Credit, travelled and met your business partner, they tell you, “we cannot export raw logs, you must add value.” And you have added value, you are at the point of exporting and the Ministry of Environment issues a decree that because some people were smuggling unfinished logs, therefore nobody can take this out until after the Ministry’s review. What do you think you have done to that businessman? He may never be back in business. This is part of the inconsistency we are talking about. Everybody is in charge of trade facilitation – Ministry of Trade, Ministry of Environment. Meanwhile, the Ministry of Finance that has the capability that has signed all the agreement and has the fiscal responsibility is there. Is hostile business climate to blame for the exit of Lekki Deep Seaport Partner? A formula was later arrived at to encourage foreign investors to develop private ports. Foreign Investors were allowed to own 60 per cent; the Federal Government through the NPA had 20 per cent leaving the host community with 20 per cent. I think the Lekki investors should
accept responsibility for one thing – the initial decision they took was to look away from port development and concentrate their emphasis on the Free Trade Zone (FTZ) in my opinion was an error. They first of all acquired lands for Free Trade Zone. When they told NPA that they wanted to build the port, NPA told them that they could not build the port on their own land and so the financial/economic gymnastics started. They had to transfer the land to NPA, NPA valued, hand over to them etc. I think Lekki thereafter got Sovereign Guarantee. Now, the funding has been a problem. Everybody is saying “how much money have you brought?” NPA responded: “we have brought this amount of money”, Lagos State said, “let us pay you with land”. So, between Lagos State and the investor and the Federal Government, things were not moving quite as fast. Then access road became a problem. To evacuate your cargo from Lekki, a new form of express road has to be built; it has to pass through other States. Once Ogun State discovered it was passing through its it, it wanted to be part of the game. So, economic decisions that should have taken one year are taking four years, financial contributions that should have been done and dusted with three, four or five board meetings is taking four/five administrations. They had brought in experts to build the Container Terminal, Ports Authority had already signed on and paying its money, Lagos State was active but the delays in signing off on regulatory and financial approvals affected Lekki until those people got tired. Look at what happened last year, calculations that had been made on N170 to the dollar suddenly became N400 plus to the dollar. All the models became useless. Now it is 300 plus to the dollar. So, can you plan base on this? You need consistency of government policies to do some long term plan. If I want to sign an agreement with you and it has foreign currency content, what rate am I going to use, if it is going to be a two or three year plan? The uncertainty is too high.
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LOCAL CONTENT
NCDMB partners Dangote Group, NLNG on Refinery Project and Local Content Implementation
T
he Nigerian Content Development and Monitoring Board (NCDMB) and Dangote Industries Limited have commenced collaboration towards ensuring maximum utilization of local capacities in the construction of the company’s 650,000 barrels per day petroleum refinery plant, Orient Energy Review gathered. The company also pledged among other things, to utilize certified Nigerian service companies for the fabrication of modules, pipe coating as well as the supply of paints and cables as a way of deepening the utilization of indigenous skills in the country. In addition, the two organizations will hold technical meetings and undertake a tour of the project site to examine extensively other Nigerian Content opportunities that can be utilized on the project.
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The agreement was reached recently in Lagos after NCDMB Executive Secretary Engr. Simbi Wabote led a team from the Board to meet with the management of Dangote Group, led by the President, Alhalji Aliko Dangote. Responding to the presentation made by Wabote highlighting the existing Nigerian Content capacities and capabilities and how they can contribute to the refinery project, Engr. Joseph Makoju, the Honorary Adviser to the President, Dangote Group, confirmed that “there are a number of opportunities for collaboration. We want to partner with you and we hope to have mutual beneficial relationships.” Makoju noted that the company planned to set a record on Local Content accomplishment with the petrochemicals plant, which according to him, would be biggest single
train refinery in the world. He identified the Dangote Academy as another platform for collaboration, especially as the institute’s focus is expected to be expanded beyond the cement industry to include the petroleum industry and other key sectors within the operational scope of the group. In his remarks, Wabote commended Alhaji Dangote for investing in manufacturing across various sectors of the economy and creating employment for thousands of Nigerians. He expressed confidence that the company’s foray into the downstream sector of the petroleum industry would revolutionize the sector and reverse the nation’s dependence on imported petroleum products.
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LOCAL CONTENT
TThe Executive Secretary intimated the Dangote team that the implementation of Nigerian Content Act in the upstream sector of the oil and gas industry had developed huge capacities that should be leveraged for the refinery project, saying that the development has the potential to turn the economy of the nation around for good. Wabote urged the company to visit indigenous companies in the land to have a first-hand knowledge of the depth of expertise they possessed, saying a good number of them are as good as the foreign counterparts. The NCDMB boss explained that companies operating in the downstream sector of the petroleum industry were not mandated to remit one percent of their contract sums to the Nigerian Content Development Fund (NCDF) as has been erroneously reported by a section of the media. On the company’s extensive plan to recruit and train local personnel who would run the refinery proficiently, Wabote urged Dangote to look in the direction of the Nigerian Oil and Gas Industry Joint Qualification System (NOGICJQS), which boasts a database of Nigerians with various competencies in the oil and gas sector. He also asked the Dangote Group to engage the Oil and Gas Trainers Association (OGTAN) because members of the group had capacity to provide some of the trainings being envisaged by the company for their fresh employees. Similarly, the NCDMB has signed a Service Level Agreement (SLA) with the Nigerian Liquefied Natural Gas Company (NLNG) in line with the provisions of the Nigerian Content Act. Engineer Wabote, and NLNG Managing Director, Tony Attah, signed on behalf of their respective organizations recently in Abuja, the nation’s capital. The agreement, which is the first of its kind to be entered
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between a regulator and another entity in the oil and gas industry, would be adopted as the template for managing documentations, contracting and expatriate quota between the Board and international and local operating companies, this medium learnt. In his speech, Wabote said that NLNG’s operations were time sensitive, noting that the agreement would ensure that “NLNG is not exposed to violations and NCDMB is not a blocker to the business.” He described the SLA as a
key strategy for shortening the contracting cycle, cutting the cost of projects, and improving compliance with the Content Act. On his part, Attah commended the Board for the speedy development of the agreement, describing it as an innovative way of addressing the company’s concerns, stating that NLNG is bound to comply with the provisions of the Act.
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PHOTO GALLERY
OTC 2017
OTC 2017
Gala Night
OTC 2017 Golf Tournament
24 Orient Energy Review June, 2017
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Nigeria Content
PHOTO GALLERY
Investment Forum Houston
OTC 2017 Panel Session
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Orient Energy Review June, 2017 25
PHOTO GALLERY
Sub Saharan African Oil and Gas ‘Networking Session’
Global Petroleum Show, Calgary
26 Orient Energy Review June, 2017
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PHOTO GALLERY
OTC Photospeak extra
Sea Works, Southampton
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Orient Energy Review June, 2017 27
LOCAL CONTENT
Angola Stole Investors’ Hearts at the 2017 OTC Dr. Njideka Kelley
W
hile some vendors, exhibitors and government officials from different countries, especially those from the African continent were pre-occupied with activities with little or no investment potential at the just concluded Offshore Technology Conference (OTC), Angola, as a new comer at the OTC was seen attracting and striking business accord with serious-minded investors at the arena. Angola, situated on the southwestern coast of Africa, has 18 provinces and is the 7th largest territory in Africa. She is the 2nd largest oil and gas producing country in Africa, second to Nigeria. And as at 2015, the country was the 2nd largest investment destination in Africa only second to South Africa. Angola, primarily a Portuguese/ Spanish speaking nation, her economy is considered one of the fastest growing in the World with a GDP of 11.1% (2001-2010 estimates). The country has done well and has
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maintained political stability after her 27 years of war, which ended in 2002. I was at the Angola booth on the last day of OTC and was amazed and impressed at the level of collaboration, cooperation and seriousness at which their indigenous operators as well as government officials displayed their industry expertise. All companies were beautifully centered in one area and the national outfit adorned by each representative as they eagerly explained what they deal in to each visitor. The national investment company, Aipex had experts encouraging potential investors. They were friendly, professional, and highly experienced as they guided all of us on the why and how to do business in Angola. So was the BAI, the investment bank that simplifies the process for foreign investors for ease of understanding. I traveled to each of the stands asking questions about their experience at OTC being first timers, what it takes to do business in Angola, their production and challenges as well as their version of the local content. Below are the excerpt of my conversation with these indigenous operators, airlines, Aipex and the bank of investment. At the Aipex stand, I spoke to Jandira Camia who explained the mission of the company. Although she spoke more Portuguese than En-
glish, we were able to communicate enough for me to note that Aipex is the agency that promotes investments and exports of Angola. Kelley: What is the new legislation on investment all about? Landira: Our new Private Investment Act was approved on August 11, 2015. It is for rapid and smooth investment in Angola. Tell me about the scope of this Act It covers both domestic and foreign private investment but not private estate companies and other public entities holding a stake of 50% or more. Also it does not cover private investment related to oil business, minerals and financial institutions. At the National Institute of Petroleum, this is similar to the Nigeria’s NNPC, I spoke briefly with the Vice President for projects and Development Mr. Jorgina Manhengane. Kelley: What type of incentives does Angola provide to investors? Jorgina: Tax benefits are not automatic and are dependent on the amount, location, duration, and partnerships with Angolans, job creations and its economic impact. Is this the core of your local content? Yes. We have huge incentives available for investment equal to 50 million USD, so long as it results in the creation of 500+ jobs; this also depends on the location. Also, we offer incentives to companies reinvesting their capital gains into new projects, expansions or modernization of existing projects. Is there any restriction on foreigners coming to Angola to invest? The investor must offer 35% share capital to a local partner and also have an effective participation in management of the new venture in the following project areas: energy, water, transport, logistics, telecommunications, IT, construction and public work, tourism, and hospitality and broadcasting.
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LOCAL CONTENT
That sums up every sphere of development. So this way, a local and indigenous businessman has much leverage to experience and impact change into the development of the society. Basically yes. At the Angolan Investment Bank (BAI), Mr. Jorge Lutuima Silva was very articulate in explaining that Angola has made it easier for foreigners to invest in the country as well as retrieve their profits. He explained that it used to take several years before investors could retrieve money from the country due to the very stringent laws, which prevailed in the past. Today, Mr. Silva explains that with the emergence of a refined Local Content policy, investors who comply with directives have a smooth sailing entry into Angola. He further says to me that should I ever travel to Angola for investment purposes, I must stop by BAI to ensure that I obtain all the information that is required. I asked what type of documents are needed to invest in Angola and he supplied below as the basic standard requirements • Company status • Certificate of Commercial Registration • Technical, Economic and Financial Feasibility Study of the intended project • Environmental Impact study (For instance an investor cannot embark on a project that will cause the land to be polluted during the project duration or aftermath) • Finally, documents certifying the financial capacity of the company. • Medical Certificate of Fitness • Valid passport • Criminal record, certified by the Angola consulate in the investor’s country. Angola is being called the Land of the future, why is that? I asked Evelise Alexandra Gaspar Neto
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Azevedo the Head, Department of Marketing of Sonair. He replied that Angola is the 5th largest producer of Diamonds and has enjoyed steady economic growth rate and also signed bilateral agreements of promotion and protection of investments with Germany, Spain, Great Britain, Italy, Portugal, Russia, Switzerland, South Africa and Guinea Bissau. He asked me, “Did you know that there is a direct flight from Houston to our capital city of Luanda”? Mr. Evelise informed me that there is a direct connection on SonAir from Houston-Luanda – Houston and offering approximately 80 seats to the public. These flights are offered twice a week. I was so impressed by the organization of the exhibitors. All were knowledgeable and their goal of entering the OTC was foremost on their minds, which I believe they achieved through information sharing. Sonamet and PAENAL were some of the oil and Gas servicing industries that featured at this year’s OTC at the Arena. About PAENAL: It is a major player in the field of fabrications entering into a JV roughly 10 years ago with the state owned Sonangol and the SBM offshore group and by 2010 DSME of South Korea had become a Joint Venture Partner. By 2013, PAENAL was a full-phased fabrication Shipyard providing 10,000 = ton of modules per year representing close to 2 million man hours of work per year. The yard which is located about 2.5-3 km south of the Porto Ambiom is less than an hour drive from Sumbe the capital city of Kwanza Sul Province. Nordine Bousselat, the business development leader and manager (Finance and Administration) proudly informed me that they were the biggest fabrication and integration yard in the entire region. According to Bousselat, PAENAL
was founded to meet Angola’s need to develop manufacturing technology and integration of FPSOs and with its 2500-ton heavy lift crane (HLC) (The prototype was on display) and a 490m purpose-built quayside, one can appreciate Bousselat’s pride as he speaks confidently about PAENAL’s yard. Angola is indeed an emerging player in the pre-salt oil and gas exploration and has pledged to increase production from 1.75-2MMb/d back in 201415 consistently leading to 2020. Today, with PAENAL, Angola can boast of meeting and exceeding the mark by 2020. One impressive success benchmark is Angola’s urgency on training its workforce. They boast of qualified and trained workforce through long-term investment by the government partners SBM offshore and Sonangol. Since 2008, Angola set up and has maintained a training school that has graduated more than 500 skilled welders and fabricators – men and women who were previously petty farmers and fishermen. PAENAL to its credit is a fabrication yard today with at least 87% Angolan nationals in employment. Likewise, Sonamet provides “high quality fabrication, survey, storage and handling services both for shallow and deep water projects offshore Angola”. It is situated in Lobito and employs well over 2000 locals and trains 200 of those annually in skilled welding. Following my visit to the Angola stand at the OTC Arena, my final impression is that of a country that understands the need for continuous improvement, local expertise, acquisition of technical know-how, importance of a well-structured local content, importance of government support and participation in the development process, and the need to encourage indigenous businesses to become sustainable. Now that is Local content or better yet Angola Content at work.
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COVER STORY
Local for Global: Nigeria in Fresh Drive for 100% Local Content
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he Nigerian Oil and Gas Industry Content Development Act (NOGICD) 2010, years after its passage, has brought about some significant gains in the nation’s local content drive in her oil and gas sector and its value chains. However, industry checks has shown that there is still much ground to cover as local content currently ranks at 35 per cent with only a minimal percentage of jobs in the oil and gas sector given to indigenous companies and local contractors. This article, Godspower Ike highlights the many plans and efforts of the Federal Government, National Assembly and private businesses to increase indigenous participation in key sectors of the Nigerian economy. Several years after taking the critical steps in promoting indigenous
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participation in key sectors of the Nigerian economy, the President Muhammadu Buhari-led administration has kick-started the process of deepening the country’s local content initiative. This is aimed at encouraging an increased number of local operators to make significant contribution towards growing the Nigerian economy. Before now, a number of initiatives had been introduced, mainly in the Nigerian oil and gas industry which had helped boost the fortunes of indigenous producers. As a result of these initiatives, the Nigerian Content Development Monitoring Board (NCDMB) recently announced that indigenous participation in the nation’s oil and gas industry had increased to about 35 per cent in the past six years; rising from less than 5 per cent before
2010 to 14 per cent in 2014 and 35 per cent by 2015. According to NCDMB, these initiatives are expected to increase local content levels to 50 per cent by the end of 2017, and that contracts awarded by operating companies to Nigerian service companies had also increased from about 40 per cent of total contracts before 2010 to 75 per cent in 2015 while the target is to achieve 85 per cent by 2017. In the last few years, the Nigerian Content Act had helped the government and Nigerian people to achieve a significant percentage in reversing capital flight in the form of personnel, materials, equipment fabrication and engineering designs in the industry.
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COVER STORY
Another intervention introduced by the NCDMB to attract investments and stimulate domiciliation of manufacturing activities is the Equipment, Components Manufacturing Initiative, ECMI, which was developed to promote the local manufacturing of equipment, components, spare parts and other accessories for the Nigerian oil and gas industry. So far, the NCDMB has issued about 1,430 certificates, translating to an investment commitment value to the tune of about $2 billion. Other initiatives that the Board has put in place to stimulate domiciliation of manufacturing and other value-adding activities include the establishment of the oil and gas park that will serve as the manufacturing hub for equipment and the provision of funding support for local manufacturers of the LPG cylinders. Others include the pilot pipe mill being developed at Polaku, Bayelsa State, the Oil and Gas Industrial Park Development – artisanal training programme being organised by the Board in conjunction with the Federal University Utuoke, amongst others. To show its renewed commitment to the local content initiative, Acting President, Yemi Osinbajo, recently issued an Executive Order in support of local contents in public procurement by the Federal Government. In the order, the Federal Government stated that henceforth, all Ministries, Departments and Agencies (MDAs) of the Federal Government shall grant preference to local manufacturers of goods and service providers in their procurement of goods and services. It added that any document issued by any MDA of the Federal GovernThe Board, relying on Section 104 ment for the solicitation of offers, of the Nigerian Oil and Gas Indus- bids, proposals or quotations for the try Content Development Act also supply or provision of goods and serintroduced the Nigerian Content vices (Solicitation Document), shall Development Fund, NCDF, which expressly indicate the preference to is being funded through the one be granted to domestic manufacturper cent deduction from the value ers, contractors and service providers of all upstream contracts. and the information required to The fund was designed to provide establish the eligibility of a bid for partial guarantees and 50 per cent such preference. The order which interest rebate to service compacame into effect from May 18, 2017, nies that obtain facilities from also required that all solicitation commercial banks for asset acqui- documents shall require bidders or sition and projects execution. The potential manufacturers, suppliAct provides that the funds be used ers, contractors and consultants to for capacity development in the oil provide a verifiable statement on the and gas industry. local content of the goods or services Since inception, the NCDF had to be provided. grown significantly to about $600 The Federal Government also demillion and has been accessed by a clared that Made-in-Nigeria prodfew indigenous companies for their ucts shall be given preference in the capacity development. procurement of certain items and at www.orientenergyreview.com
least 40 per cent of the procurement expenditure on these items in all MDAs shall be locally manufactured goods or local service providers. The items include uniforms and footwear; food and beverages; furniture & fittings; stationery; motor vehicles; pharmaceuticals; construction materials; and information and communication technology. The Order stated that, “Within 90 days of the date of this Order, the heads of all MDAs of the FGN shall: assess the monitoring, enforcement, implementation, and compliance with this Executive Order and local content stipulations in the Public Procurement Act or any other relevant Act within their agencies; “Propose policies to ensure that the Federal Government’s procurement of goods and services maximises the use of goods manufactured in Nigeria and services provided by Nigerian citizens doing business as sole proprietors, firms, or companies held wholly by them or in the majority; and submit such findings to the Honourable Minister of Industry, Trade & Investment.” It also stated that “Within 180 days of the date of this Order, the Minister of Industry, Trade & Investment in consultation with the Director-General of the Bureau for Public Procurement shall submit to the President, a report on the Made-in-Nigeria initiative that includes findings from paragraph 4 above. This report shall include specific recommendations to strengthen the implementation of Local Content Laws and local content procurement preference policies and programmes.
“
For the purpose of this Order, ‘local content’ means the amount of Nigerian or locally produced human and material resources utilised in the manufacture of goods or rendering of services.”
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COVER STORY
“For the purpose of this Order, ‘local content’ means the amount of Nigerian or locally produced human and material resources utilised in the manufacture of goods or rendering of services.” In addition to the Executive Order, Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, also announced plans by the Federal Government to replicate the Offshore Technology Conference, OTC, in Nigeria. Kachikwu stated that the government would no longer be expending state funds in sponsoring delegates to the OTC, starting from 2018. According to him, state-sponsorship from the Federal Government from now on, would be strictly for technical experts within the government agencies in the oil sector. In his words: “Nigeria would be hosting an OTC-like event of its own. We will however work to build an OTC that the world would buoyantly come to the same way we buoyantly come to yours. The idea has already garnered the backing of some African oil ministers.” The Federal Government is also seeking to encourage indigenous participation in crude oil refining through the modular refineries initiative. In the modular refineries initiative, the Federal Government is seeking to encourage oil-producing communities to build modular refineries and also inculcate illegal refiners into the initiative. The modular refineries’ initiative which was first proposed by Kachikwu was essentially the outcome of the Presidential interactive engagements in several oil-producing states led by Acting President Yemi Osinbajo. The initiative would see all illegal refiners and local communities in the Niger Delta integrated in the proposed modular refineries concept of the Federal Government as they would not be left to operate on parallel basis. Under this plan, the Federal Government would supply crude oil to the local refineries at a reasonably considered price, as an incentive to stop the current practice whereby the illegal refiners vandalise and steal crude oil. This concept is expected to work against environmental degradation that the spills often cause to
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the trunk lines. It is also proposing that marginal field operators supply crude to the new modular refineries that would have the illegal refiners integrated. Another important component of the plan under consideration is the proposed involvement of the current illegal refiners and their communities as shareholders while the Niger Delta Development Commission (NDDC) and the Nigerian Sovereign Investment Authority (NSIA) would also hold substantial holdings/equity sufficient to make the smaller refineries operational as a business and a going concern. To facilitate effective community engagements, the initiative envisage that a Memorandum of Understanding ( MoU) would be signed with the affected communities determining the communities share, while the Federal Government would supervise the implementation, which would be driven largely by industry operators and the communities. Kachikwu also announced plans by the Federal Government to launch ‘Project 100’, a concept introduced by his ministry to provide financial assistance to competent Nigerian companies in the execution of projects, formerly handled by foreign companies. The Minister said that work are ongoing in developing the concept, the parameters around it and also put in place the team to work on it, noting that within the next 90 days, they would come out with a position on the project and hopefully, get Nigerians that would be on the project for training. On his part, Emeka Okwuosa, Chairman, Oilserv Limited, an oil and gas pipeline and facilities company, expressed support for the concept, stating that project 100 would guarantee jobs for indigenous companies, in place of briefcase contractors. He said, “Project 100 as mentioned by the Minister of State for Petroleum Resources is a very good idea because some of us have been saying this in different ways. Some of us that have built capacity all the years have to be sure that it will be utilized. “There has to be a process of guaranteeing jobs for companies that have invested. It is not only Oilserv, there are quite a few other companies who have invested and taken the risks. It is important that going forward,
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there would be guaranteed jobs, instead of trying to give contracts or opportunity to briefcase contractors. “Project 100 concept will help address that because they will look at few companies with capacity and help them raise fund for business and this will enable us employ more people. But don’t forget, as we get the details, we know how to move into them, he said. Also speaking on the initiative, Managing Director, Oil and Gas Free Zones Authority, OGFZA, Mr. Umana Okon Umana, said ‘Project 100’ would go a long way in supporting Nigerian entrepreneurs in the oil and gas industry who show potentials. “I think it is a welcome development and it fits into the Federal Government’s plan of building local capacity. It is a way to support Nigerian entrepreneurs in the oil and gas industry who show potentials and who can become big players. I think that is the essence and it is welcome. “The Oil and Gas Free Zones Authority, of course, is collaborating with other agencies like the Nigerian Content Development and Monitoring Board, NCDMB to ensure that we all work in harmony to deliver on our various mandates in the best interest of Nigeria,” he noted. Not left out in the quest to deepen local content, the House of Representatives, represented by its Committee on Local Content also promised that the House would ensure that the bill extending the Nigerian Content Act to other key sectors of the economy would be passed. Chairman of the Committee, Hon. Emmanuel Ekon, said the bill had already passed first reading and is presently being finetuned.
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Project 100 concept will help address that because they will look at few companies with capacity and help them raise fund for business and this will enable us employ more people.
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COVER STORY
On its own part, the Nigerian Content Development Monitoring Board, NCDMB, had already commenced plans to ensure that local content is extended to the construction, power, Information and Communication Technology and other critical sectors of the economy. In addition to this, NCDMB Executive Secretary, Engineer Simbi Wabote, said the Board is gearing up to increase its engagements with industry stakeholders to develop new projects and domicile more work in-country. To this end, the NCDMB, he said had already commenced visits to oil and gas facilities across the country with the aim of assessing capacities and confirming that Nigerian companies have firm footing in their areas of operations. He further noted that information gathered from the visits would be used during tenders and in planning for capacity development. In his words, NCDMB would enlighten International Oil Companies, IOCs, and project promoters on existing in-country capacities and ensure their utilization during projects. He maintained that experts in offshore designs, FSPO designs and detailed engineering were in high demand and local engineering companies must develop strategies to retain them so that their competences will not be lost. Similarly, to increase national capacity in terms of local content, Wabote also disclosed that the NCDMB had adopted a number of strategies that is aimed at creating 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
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and weak manufacturing base, inadequate critical infrastructure and policy inconsistency, among others. Other strategies, Wabote said, 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 NCDMB is planning a series of Research and Development fair, intending 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, he noted that the tenth strategy involved undertaking an internal restructuring of the NCDMB, through the adoption of leading practices to transform NCDMB into a performance driven organization; and the adoption of a 10-year road map to institutionalize long term planning, among others. Speaking further, Wabote 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, he said, are in cable production, marine and pressure vessels, swamp rig, machine shop and training simulator. He explained that the focus of the Board compliance monitoring team had been largely on the upstream sector operations of the industry, mainly because of the higher percentage spend in the sub-sector. He also stated that the NCDMB had in 2017, reorganised its monitoring structures and would pay more attention to the implementation of Nigerian Content in the midstream and downstream sectors of the industry. All these initiatives both by the Federal Government, National Assembly, NCDMB and private organizations, if fully implemented would no doubt go a long way in deepening the country’s drive towards achieving 100 per cent local content in the oil and gas sector and across key sectors of the economy.
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The Oil and Gas Free Zones Authority, of course, is collaborating with other agencies like the Nigerian Content Development and Monitoring Board, NCDMB to ensure that we all work in harmony to deliver on our various mandates in the best interest of Nigeria,�
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LOCAL CONTENT
Lafarge’s Local Content Drive Cuts Forex Use
L
afarge Africa Plc, a leading building solutions provider in Nigeria, has increased local sourcing of critical materials to lower foreign exchange component of its operational costs. Michel Puchercos, Country CEO of Lafarge Africa disclosed this at the company’s Annual General Meeting (AGM) that held at Eko Hotel, Lagos earlier in June. A turn-around plan, launched in the third quarter of 2016 amid country-wide gas shortages, was already counting in 2017, leading to record level fuel flexibility at its Ewekoro I and Sagamu plants; a feat the Federal Government commended recently. Speaking at the AGM, Puchercos said the “our plan is to increase the use of alternative fuel (biomass) and locally mined coal to lessen production disruptions due to gas supply shortages. In 2017, we aim to consolidate energy optimization at Ashaka, Ewekoro 2 and Mfamosing.” Also at the meeting, shareholders
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agreed to issue up to a record N140 billion in additional shares to existing shareholders, the Rights Issue that is planned to be launched in the third quarter of 2017. Listing the benefits of the company’s recapitalisation in 2005, Balogun who doubles as the Chairman of the Board of Directors, said, “It reduces our foreign currency exposure by approximately half, improves our cash flow and positions the Company for our future capacity expansion plans.” Lafarge Africa, with support from LafargeHolcim, is taking measures to hedge against currency risks. The company is embarking on a Rights Issue to reduce its exposure to adverse foreign currency translation losses as experienced in 2016 following a 40% depreciation of the Naira against the US Dollar.
annum has “contributed significantly to Lafarge Africa’s capacity and footprint in Nigeria; provides an opportunity to increase our share of the cement market in the South-East and South-South regions, and has begun to impact positively on the financial results of the company.” A member of LafargeHolcim, the global leader in construction innovation, Lafarge is supplying special anti-corrosion cement for the construction of Eko Atlantic, backed by the group’s Lyon-based R&D
facility. Listed on the Nigerian Stock Exchange with a presence in Africa’s two largest economies (Nigeria and South Africa), Lafarge Africa is actively participating in the urbanization and economic growth of Africa. Combining its operations in Nigeria – Ewekoro and Sagamu plants in Ogun State, Ashakacem in Gombe State, Mfamosing in Cross Rivers State, Atlas cement in Rivers State and Ready-Mix Nigeria with its varied operations in South Africa, Lafarge Africa has a current installed cement capacity of 14.1Mtpa. Lafarge Africa leverages on its innovative competence to provide valued added products and services solutions in the building and construction industry in Sub-Saharan Africa.
Beaming with optimism, Puchercos said that doubling of the production capacity of the Mfamosing plant in Calabar to 5 million metric tons per
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LOCAL CONTENT
House of Reps Commend NCDMB on Projects Execution - Set to pass bill extending Local Content Act to Construction, Power before end of 2017 because it is 100 per cent indigenous. This company has invested resources in machines, personnel and construction equipment. Nigerians, multinationals and the Federal Government should patronise this kind of companies.”
Members of the House of Representatives Committee on Local Content have commended the Nigerian Content Development and Monitoring Board (NCDMB) for its diligent implementation of the Nigerian Content Act and speedy execution of its headquarters building project as well as the Polaku pipemill project. The lawmakers stated this while on an oversight visit to the Board’s premises and project sites in Yenagoa, Bayelsa State penultimate week. Speaking at the Polaku pipemill site, Chairman, House Committee on Local Content, Hon. Emmanuel Ekon said the location met all the requirements for citing such a facility, including proximity to natural gas needed to generate electricity for the plant’s operations, access to road for transporting raw materials and finished products to desired destinations. Hon. Ekon dismissed insinuations that the Board was acting beyond its mandate in promoting the pipemill, noting that the Nigerian Oil and Gas Industry Content Development (NOGICD) Act empowered the Board to amongst others, woo
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investors and prepare locations, especially difficult terrains to convince prospective investors to commit their funds. In his remarks after the committee members toured the Board’s headquarters building project, Ekon promised the readiness of the House to pass the bill extending the Nigerian Content Act to other key sectors of the economy for Nigerians to enjoy the benefits. He said: “The first reading has been passed and we are fine-tuning it. I believe the bill will be passed this year.” Hon. Ekon listed sectors to be covered by the extension to include power, construction and ICT, stressing that violations of Local Content were more prevalent in the construction sector than in oil and gas. He also lauded the Board and its main contractor, Megastar for the speedy execution of the building project. In his words: “I was here when this land was acquired in 2015. Then this place was bareground. It’s not even up to two years and 8 floors are already standing. We need to project construction companies like this
Welcoming lawmakers at the NCDMB headquarters, the Executive Secretary, NCDMB, Engr. Simbi Wabote explained that the Board’s mandate hinged on promoting, monitoring and evaluating Nigerian Content compliance in the oil and gas industry and serving as a catalyst to attract and drive needed investments so as to grow the economy through job creation. He restated the Board’s willingness to assist any local or foreign investor seeking to develop facilities, noting that the Nigerian Content Act provided that goods manufactured in-country would always get patronized by the industry ahead of foreign alternatives. On the Polaku pipemill, the NCDMB boss said the Board had completed the sand filling of the site, conducted Environmental Impact Assessment (EIA) and embarked on the construction of the access road. He added that the Board entered into a Memorandum of Understanding (MoU) with Titan Steel of China, who is expected to commence construction and complete the project by 2019. Speaking on the establishment of modular refineries in oil producing states as being promoted by the Federal Government, Wabote stated that the Board’s initiatives seek to ensure that the refineries get fabricated and assembled in Nigeria as against importation of equipments. The NCDMB boss further solicited support from the lawmakers to ensure that indigenous operating companies and the Nigerian National Petroleum Corporation (NNPC) comply fully with the provisions of the Nigerian Content Act.
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WOMEN IN ENERGY
Nigerian Oil and Gas Industry Needs More Women Players -Amao
Dr. Ibilola Amao, a member of several professional and decision making bodies both home and abroad such as the Lagos Chamber of Commerce, Nigeria Society of Engineers, a member of the Governing Council, Energy Institute, UK is the CEO of the multi-award winning Lonadek Nigeria Limited. In this exclusive interview, Amao spoke on diverse issues ranging from her passion for developing local content through capacity building, capability and competencies, the push for more women in strategic positions in energy, power, infrastructure and oil and gas by catching them young through her STEM project, her anti-corruption stance among others. Can we meet you madam? My name is Ibilola Amao. I am the principal consultant of Lonadek Consulting, a very happy mother of three lovely children. I am mar36
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ried and I love God with a passion and must say that people around me succeed following their own passion. How many years have you been in the industry? I have been in the industry for 26 years. May we know how you came into the oil and gas industry? When I came back from England, I served with University of Lagos as an associate lecturer with Professor Ibidapo Obe and then I started Lonadek when I went to register for my National Youth Service Corps, NYSC. Then, Corporate Affairs Commission’s office used to be next door to NYSC. So, when I was on the queue for NYSC, I just asked why their queue was longer than ours. I was told that the people were waiting to go in to register
their companies. I enquired about the cost and I was told. I had enough money on me. I gave the money to a lawyer I met there whom I didn’t know from anywhere. I collected his card and I went back to join my NYSC queue. And three months later, he sent me the registration. After my NYSC, I wanted to work in a place where I will be very, very fulfilled and I got two references to ATR and Partners and National Engineering and Technical Company (NETCO). They were into bridge and piling designs but that was too close to my late father’s field because he was a highway engineer and a director at the Federal Ministry of Works and Housing. So, I knew I wasn’t going to go there. I went to NETCO where I had learnt that they just bought a lot of computers then and that they may be training some engineers. It sounded exciting to me, which is what I used to do anyway. My qualification was quite instrumental to my coming into NETCO and the fact that they had expatriate from Bechtel training Nigerians on the use of computer systems. And because there was technology transfer agreement between Bechtel and NNPC, they wanted to have a Nigerian doing the training rather than an expatriate. So at least they will be sure that the Nigerian is really, really committed to Nigeria. That is how I came in and you know I just finished my PhD then and I was pretty aware of happenings around the industry. It was like a technician who has learnt to use software himself. That was when I trained the first 67 engineers recruited by NNPC for NETCO to be prepared for the Escravos Gas Phase 1. So, most of my NCDMB people today were my first set of trainees!
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WOMEN IN ENERGY
When was this?
ment of a lifetime.
That was 1992 to 1993. The recruitment was from all over Nigeria; it was quota system recruitment for EGP1. So, we did EGP1, then we did Amukpe and Oroni for Shell, then we did 34 flow stations, we did Komoimu, Cawthorne Gas then we did Bonga Main1, Agbami. I left NETCO in 2003 when they were having the Ela Project to set up Lonadek as an independent consulting company. I must say that my best years were in NETCO; it was a family. I got married and I had all my children there. We worked day and night and ran shifts together. We were always meeting deadlines. We had three ladies on my team, the rest were men and we all got married around the same time. It was a real fellowship of brethren and like minds.
Being a woman at the helm of affairs at Lonadek and having previously worked in an established organisation, how have you been coping with the enormous responsibilities of your office?
So what took you to England? My late father had his secondary school education in England, so believed that his children should go to England after their O Levels. So, after my O Levels at Queens School, Ibadan, I went to London for my A Levels. Thereafter, I went to London University and Bradford University. After my studies, I worked in England for 10 years. My late father thought I should train to become a chartered engineer that it will help me be a professional and that really helped. Because they way I think is very, very professional. I honestly thank God that I did my training in the UK because I don’t behave like I am free to do what I like, even now I just can’t. Up till now, I leave my house at 5:15am and I get to my office at 6:10 before everybody. Sometimes, my husband will ask me, “Where are you rushing to?” And I am just like, I am so sorry, I have to go to my desk at the right time. Once they have trained you for three years to be at your desk at the right time, to be a professional, it will be very, very difficult for you to change. So, I really thank my late father for forcing me after my PhD to train as a PPL engineer. Those three years were an invest-
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First and foremost, I tell people that I don’t see male and female. I don’t see sexes in engineering because in my A Levels, we were only two girls in a class of 14. In my first degree, we were only two girls - me and a Chinese girl in a class of 50. In my PhD, I was the only girl in a class of 12. When I was working in an engineering company overseas, I was the only lady that was an engineer. And when I was on site as assistant resident engineer in Whitfield, I was also the only lady on site. So, there is no way you can even begin to see yourself as a lady, you just get on the job. I mean I can’t remember when I ever thought of myself as a girl or a lady amongst men. No! I just don’t even see it. I am always concerned with getting the job done. How has Lonadek fared in the face of competition? There are a lot of companies that do what Lonadek does but there is no other company that does the combination of what Lonadek does the way Lonadek does it. And that is my joy. We are focused on value creation and solving problems and it gives us great joy to empower people to solve problems and create value in Nigeria. And in terms of competition, we have had to pay our dues. We are anti-bribery and corruption focused organisation and anybody, anywhere in the world can tell you that we don’t touch that stuff. So, it is been tough but one thing I can tell you is that if we do ever get an assignment, a job or an opportunity, we execute the job diligently to the highest quality possible and deliver on our commitment to our clients. So, because of our anti-corruption stance, you may not want to use us because we are not going to offer
you a bribe, but if you are stuck or you have a reason to want a competent company to do your job and you find us; even if you don’t find us and give the job to a quack, they will find us because we do the job for them at our own price. So, that has been our story. We have done a lot of jobs as sub-contractors because we refuse to pay bribe. Sitting in a male-dominated boardroom or bidding process, do you feel like being a lone voice especially as your position as a CEO ultimately thrust that responsibility on you? I don’t have that mindset at all. I was probably born as a tomboy. Wherever I go, I see myself as one of the boys. It is just a no-go-area for me. In fact, when people ask me this question, I will be wondering where they are coming from. I just don’t think like that. Moreover, my late father as a retired lieutenant colonel and a very passionate civil and structural engineer empowered all his girls. He was one of those very exposed people who studied overseas and believed what a girl can do; a boy can also do it. I used to carry crates of drinks like a boy, I used to ride bicycles, wash cars, change tyres, climbed trees. So, I practically did everything and much more than my brother was even doing. I have to say that I am very grateful to my late father. He never gave us any hint that we could be discriminated against. It is difficult for anyone to believe that you grew up as a tomboy because your dressing and speeches reveal otherwise O yes, I used to be really tomboy but I have a kind of calmed down as I grew older with the help of the Holy Spirit. When I was in the university, even till I came back to Nigeria, I was always on trousers but when I gave my life to Christ, I stopped wearing trousers. Then I was always in jeans and jumpers, jeans and shirt. My hair was always like… (Prolonged laughter)
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WOMEN IN ENERGY
How does gender equality sit with you? Well, I don’t believe in gender equality. I believe the two genders are fairly unique and very different and the values we create are very unique and complementary. I am one of those people who believe there is no equality in a man and a woman. We are so uniquely and differently created that we can only harness each other’s strength and complement each other. In whichever way, I don’t believe in gender equality and I don’t think the two genders should discriminate each other. What about situations where gender sentiment is whipped to deny women lofty positions without consideration to her competencies? When there is diversity in a team, it creates maximum value. So diversity could be in character, in behaviour, in gender. It is amazing how people have designed facilities in the past either even scientifically with the male perspective. I mean, when a woman comes into the project team and she reviews it with a maternal, emotional, psychological perspective and she picks up flaws and creates a lot of values. Because the men are thinking like this, the woman comes and starts thinking out of the box from the male’s usual way of thinking. I honestly think that it is to the advantage of every value creating organisation or institution to ensure that there is a balance of some sort or there is mixed gender in decision making team because there is always a perspective the minority or majority gender brings on board. Does that inform your new passion for educating girl children for STEM? O yes! I believe that there are too few women in the decision making process in engineering, energy, power, infrastructure, oil and gas which are the areas I play as an engineer and I have come to realize that even though I am not doing core engineering anymore, my engineering background informs
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the kind of decision I make. And because I am a lady, I think generationally; I carry the pains of my children, my society and my community’s development than a man does for some funny reasons. I am not interested in immediate gratification or gain and that enables me to think medium and long term comfortably more than a man can. So, I sympathise with men because they have to think short term most times. The value a woman creates is able to create more holistic, medium to long term picture and she is more strategic because she is looking at the big picture in the long term. And the kind of solutions you proffer from that mindset for me is more sustainable and long lasting and more value creating in the medium to long term than the men’s now, now, now. Take for example, if you eat your seed, your harvest is poor, but if you defer the eating of your seed, you harvest will be bigger and you can even eat better. I think women have that advantage; that is why I am now pushing for more women to be encouraged to become leaders in energy, power, infrastructure and oil and gas. But I think the best way to do it is to catch them young by identifying young people that are passionate about their sciences. I try to encourage them to push as much as possible to identify their strength, passion and talent while I guide them through career counselling so that they can either become leaders or entrepreneurs in those areas. In so doing, hopefully, they will be able to make better decision on behalf of their community and their society. That is what Nigeria lacks at the moment. They have too many short termers making decisions for this country and it is really affecting the economy of the country.
What do you see as the future of our young women? First and foremost, I always tell young women that I wouldn’t want any young woman to make
the type of mistakes I made because I spent so much time chasing deadlines. When I was having children, I had nannies, aunties, house girls, my mummy, siblings helping me with my children. To God be the glory, I got a second chance to spend a lot of time with my children and correct the gaps that were created in that process. What I will advise any young woman to do now is to make the children their priority because really and truly if at the end of everything you don’t have your children in your space, I mean if they didn’t turn up the way you want them to turn up. I always advise that the women should attend the highest level of qualification and satisfaction she possibly can because when it comes to picking between a man and a woman, if your certification, qualification and expertise is way ahead of the male competing with you, it will be extremely difficult for them to discriminate against you. So, if a woman attains the highest level of qualification, certification possible, she empowers herself in a way that even after child birth, when the children have gone to secondary school, she can re-launch her career at a level whereby her experience, exposure, expertise and qualifications speak volumes for her. She can accelerate her promotion and even surpass the people who were moving on when she was managing her home. So, that is the strategy I would advise young women to use. With these days of kidnapping of children, battering of babies, I don’t advise any woman to do what I did. I think the environment is too harsh now to raise children the way we did. In our own days, the house helps were fearful; they won’t do things they can dear do now. I always believe that women really can have the best of both fronts, if they are able to manage their cycles. You must know the times to give at work and home. Managing one’s cycle is so important; otherwise one will end up without children, without a marriage.
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WOMEN IN ENERGY
What is the staff strength of Lonadek? We have 32 full-time staff-six staff in Chevron, one in Total, one in Addax and we are beginning to look at manpower supply because we are very passionate about Nigerian expertise being domiciled even in the Diaspora. In terms of Lonadek as a company, I don’t see Lonadek as the 36 of us but I see Lonadek from the lives it has touched. We have touched the lives of over 86,000 youths since we started our vision 2020 youth empowerment workshop and career counselling in the industry in 2006 and we have trained over 8,500 Nigerians, some of which are highly placed not just in Nigeria but all over the world. About three years ago, I was in Qatar Petroleum to visit one of our trainees who is doing exceptionally well there. We also have people who are doing well all over the world; very highly placed Nigerians who we have trained at some point. The MD of Warri refinery was one of my trainees from NGC maybe in 1996 and the MD of Elemeh Petrol Chemical at some point was one of the trainees as well. I thank God, for what I don’t have in the bank, I have in the lives that I have touched and I see Lonadek as a family which involves alumni who have gone through our training programmes at different times even those who have left Lonadek. I remember we spent so much money training six Nigerians for Chevron project they even visited and spent six weeks in our partner’s office in the US. We spent so much money training them in Paris, in Cambridge, Chesterfield and they worked in Angola as well. And when they came back, two of them left and went to Shell, one misbehaved I had to fire him, another stayed with us for a while
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and left. And one day, I went out on a dinner with my sister, she told me that the money I spent in training these people if had used it to buy or build a block of flats in Victoria Island by now I should be collecting rent. But I said no, even though I looked at it as a very painful experience, I still could do it. And if you look at the big picture of Nigerian content, when you invest in training Nigerians, you are not doing it for your own company but you would have succeeded in making them a global brand. You know at some point we have got some jobs where these same people were instrumental to it. So, it was a short term loss. Therefore, if we are investing in local resources to develop Nigerian content or capability, wherever they go, they are still Nigerians whose capacity and capability have been further developed. And one way or the other, God will bless you or it. We see that you have a lot of accolades outside there. Internationally, you are seen doing big things and you are associated with high personalities like Hilary Clinton and the likes and the name Dr. Ibilola Amao has gone far, yet I hear you say that you are not satisfied yet. So what is the next big deal for you? First and foremost, I will like to touch the lives of young people and women and empower them to see a global perspective in terms of their potential, their talents and their passion. I will like to see them come to a point whereby they are creating maximum value; that they are able to demonstrate the excellence within them by finding their purpose. Aside this, I am very, very pained as a Nigerian. I am continuously embarrassed by our lack of focus, lack of commitment, diligence and dedication to creating value and
demonstrating the excellence that we are capable of because of greed and corruption. The very myopic attitude of Nigerian businessmen in the oil and gas industry as well as among Nigerian professionals in the industry is unfortunate. The greed and corruption which blind us from the big picture of what we can actually be and what we can actually become. It is a problem that I am really confronted with on a daily basis and I am always racking my brain on how to solve this. And I must solve this problem just to help Nigerians attain those lofty heights. Can you imagine if we have working refineries, gas utilization plant? In the past, we had appropriate infrastructure in this country, I mean there was uninterrupted power supply because we were working in the hydrocarbon industry and we deployed the resources appropriately and we created maximum value for the Nigerian economy. Our projects were lean because there was no bribery and corruption in the bidding process and the lowest bidder with the best quality work was delivering. How much money do we have for the roads, education, health, power and all the resources we enjoy when we go to other people’s country? So, really and truly, solving the endemic cancer of bribery and corruption in the oil and gas industry is fundamental to solving this same problem in the lives of Nigerians. It is necessary for us to have a better Nigeria. And my next big deal is how I can get people’s career counselled to a point they are patriot citizens who enjoy what they do and are so happy creating value in their own space. They won’t see the need to collect bribes and they will go the extra mile on their job to move the country forward and move themselves forward.
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WOMEN IN ENERGY
Gender Bar yet to be Broken in the Oil and Gas Upstream Sector -Owolabi
Damilola Owolabi calls the shots at Dreg Waters Petroleum. A business-inclined mind from years stretching back to her University days, she shares in this interview with Orient Energy Review (OER) her humble beginnings when she incorporated ‘Dammie Mkova Boat’ and today as a big-league industry player. OER: Can you take us through the journey leading to the establishment of Dreg Waters Petroleum? Owolabi: I have always been a business-oriented person. During my university days, I was engaged in the business of buying and selling virtually everything legal to my colleagues, which made them nick named my room ‘Dami’s Plaza. After School in 2011, I saw an opportunity in the beauty business and incorporated a business name which was called ‘Dammie Mkova Boat’. It was a highly saturated market in Nigeria and as most small businesses often face in the first year of operation, an accumulation of environmental factors and low pool of income, resulted in the company’s early demise. In the year 2013, I was introduced into the oil and gas sector by a friend who complained about the difficulties involved in procuring his importation 40
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licence from Department of Petroleum Resources. Sensing a business opportunity despite not having any prior experience in this field, I researched on the various licences and permits on the Department of Petroleum Resources’ website and after acquiring requisite knowledge, I processed the relevant permit within a short period of time. With this success, I requested him to refer other clients having the same challenge which he did and that was how Dreg Waters was formed. To further develop this idea, I enrolled for business management and entrepreneurial course which helped put my passion in the right direction of incorporating Dreg Waters in 2014. In addition to this, the need for self development was further inundated by my enrolment at the Lagos Business School in 2015 and subsequent certification in 2016. What has been your primary motivation? I am very passionate about seeing a project through till the end. In simple terms, I am a very determined person who doesn’t give up easily.So, I would say my motivation has been the drive and thirst for success and desire to be different in everything I do including my business. At 25 years of age, you have made considerable accomplishments. What would you say has been the most rewarding thus far? Since incorporation in 2014, Dreg Waters clientele size has increased significantly and this has always been based on referrals. It ultimately gives me a sense of satisfaction and purpose that our clients have reposed such trust and confidence in us, enough to recommend and profess our high praises.
As a woman in the industry, what have been your biggest challenges? As we often find, women are under-represented in this industry and so the few representatives we have are not likely to be taken seriously. Majorly, my challenge would be proving my capacity to function and perform exceptionally high beyond client’s expectation while being a woman. Where do you see women playing a greater role in the Nigerian petroleum industry, worldwide in the next few years? The Nigerian petroleum industry, in the upstream has quite a number of women as technical staff. What is not happening enough is getting to the C-Suite. In government, we have had a female Minister of Petroleum, who in fact came from the industry – Diezani Allison Madueke. She was an executive director at Shell before she was appointed a minister in 2010. But it is still not the mainstream issue. When it is a multinational company, either upstream or downstream, the chances are slim for a woman at the CEO level. But look carefully; out of about 20 Nigerian E&P independents producing oil, women are CEOs of three with two of them actually owning the companies. For example, Famfa Oil is owned by Folorunso Alakija and Britannia U by Uju ifejika while Seinye Lulu Brigs, who essentially runs MONI PULO is married to the company’s founder O. B. Lulu Briggs. The gender bar is essentially broken in the downstream where several companies are being run by women. Nigeria does far better than the average oil industry count worldwide. Efundoyin Akinyanju opened the Schlumberger operations in East Africa. She is a Nigerian professional and she is now currently the Head of West Africa for GE Oil and Gas. Still, I agree it is a largely male- dominated industry. The examples I gave are mostly freak occurrences and I think that there needs to be far more advocacy.
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GHANA REPORT
Our structures insulate us from government interference -GNPC Explorco Boss insists Gilbert B Boyefio
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overnments’ interference in state owned companies in many countries have always led to investor apprehension and mistrust leading to the collapse or the inefficiency running of the companies involved. This situation is especially worrying when it comes to the oil and gas industry due to the volatile nature of the industry. According to Mr. Michael Aryeetey, Acting Chief Operating Officer of GNPC Explorco, government interference in state companies will continue to exist so long as government owns 100 percent of these companies. It is therefore refreshing to note that measures have been put in place to ensure that the GNPC Exploration and Production Company Limited (Explorco), which Mr. Aryeetey heads, is insulated from government interference. Explorco was established out of GNPC’s aspiration to grow its interests and participation in exploration and production activities in the country. “So the plan of the GNPC is that once Explorco is fully operational and has very good assets, part of the company will be listed on the stock exchange. Once you put it on the stock exchange, you allow other Ghanaians to buy into the company, which then makes it impossible for government to come in and take Explorco’s money or interfere in its operations. What we will do is to pay dividend to our shareholders including the GNPC. And the management and board of Explorco will be select at an Annual General Meeting by the shareholders. For you to be attractive to the financial capital from international circles you must be run efficiently. But if you have government control, you will not be attractive. Nobody will invest in you,” Mr. Aryeetey explained. This structure is to ensure that Explorco is efficiently managed and
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not politically thrown about like a football. Explorco is set up to operate like a private company. It has been registered under the company’s code. Eventually when it is listed on the stock exchange, it would also come under the stock exchange rules and regulations. All these measures are to insulate the young and fledging company from undue government interference and also boost investor confidence and assurance that things are properly and efficiently managed. The focus of Explorco is different from that of its mother body the Ghana National Petroleum Corporation (GNPC). According to Mr. Aryeetey, “Explorco was set up to be completely different from the GNPC. We are focused 100 percent on exploration and production. We are commercially driven. Everything we do we take into consideration whether we are to make profit or loss. We do not have any developmental agenda, so we cannot be used to fund government’s plans or projects. For us it is all about creating value and making profit”. In recent times, the GNPC has come under public criticism for embarking on projects and activities that are perceived not to be directly linked to its core mandate. However, Mr. Aryeetey pointed out that “What people have not gotten right is the objective of the corporation. GNPC even though was set up with a commercial objective, also has a developmental agenda because it is also a government institution. So GNPC is not 100 percent profit focused. That is why sometimes it has to undertake some developmental agendas even sometimes at a loss”. Explorco’s Activities for 2017 This year together with its partners, Explorco has earmark to acquire seismic data over some of their blocks.
“One good thing is that when the industry is suppressed like this globally, labour tends to be cheaper, so we are taking advantage of that to acquire new seismic data. Explorco, Vitol and ENI are acquiring new 3D seismic data north of Sankofa Gye Nyame fields. Explorco is planning another 3D seismic data acquisition with Springfield Ghana (a local company) in April in the Tano Basin, East of the Jubilee Field. This is expected to end in May. We have another seismic campaign with AGM, which is likely to be in the last quarter of 2017 at the South Deep water Tano block. This is to plan drilling for 2018 or 2019,” Mr. Aryeetey disclosed. Funding Explorco intends to raise funding outside the GNPC in the future when the company is fully operational. However, for now, Explorco is 100 percent owned by GNPC. They also have a minimum interest in the various blocks that they are partners to, which means that the company is not exposed to too much risk. “Our funding sources may change as we go into the future. We are currently exploring and some of the assets might move from this stage to development. So one may acquire seismic for 5million dollars but when it gets to developments you are talking about billions of dollars. So even if you have 10% interest and development cost a billion dollars you have 100million dollars to pay”. GNPC itself is funded through the PRMA (Petroleum Revenue Management Act). Part of the country’s petroleum revenues is given to the GNPC but even that has a timeline. The law says GNPC should be funded for 15years. So somewhere along the line GNPC itself will not be funded by government. This
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GHANA REPORT INDUSTRY NEWS was one of the reasons that Explorco was set up; so that they learn to do things the way the private people do it such as efficient management and making a company attractive to investors. Explorco plans to leverage on its shares in the various blocks to raise money in the capital market. “We are not different from KOSMOS or Tullow. Remember that they are exploring and raising funds at the back of the reserves that is owned by the state. So if we are managing a commercial interest we will go through the same or similar financial sources as these operators. What we will normally do is to find a local bank that can syndicate with either foreign or local funding sources”. Though access to funds locally has been a major challenge for players in the industry in Ghana, Explorco strongly believes that they are better placed to overcome this hurdle. “The issue with the local people not being able to access funding locally is not because there is no money but because the banks want guarantee; they want to make sure that the money they give you can be paid back. Unfortunately many of the local companies are startups and they don’t have any assets and most of them may require government’s assistance to guarantee for these things which government is not doing. But once you have a discovery and your portion in this reserve is say 50million barrels that are your guarantee. And once the minister approves your plan to develop the banks will fall on your reserves to give you the money. This is what the Tullow’s and the rest are doing; they don’t have the money but using the reserves to source for the funding outside”. Moving beyond Ghana GNPC has set 2027 for Explorco to be a global operator, which means that the company can now operate beyond the shores of Ghana. But Mr. Aryeetey believes that “Explorco must first register its footprint at home. Right now we are partners, what we want to do is to be fully operators. We want to build the company to the level where it is seen as the dominant domestic operator; after this is achieved we can now step outside Ghana and take on bigger risks”. Explorco’s business module is similar to that of companies like Petronas, Sonagol, Statoil and Petrobas. 42
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Seaweld Engineering to build vessels in Ghana Gilbert B Boyefio
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lans are far advanced for Seaweld Engineering Company Limited, a local oil and gas company that provides a comprehensive range of services and solutions for the Oil and Gas industry, to start constructing vessels in Ghana. The construction of the vessels are to be done completely in Ghana; right from design to using made in Ghana steel and goods and services to its completion. Seaweld Engineering Limited is an Upstream Oil and Gas Service Company with the vision of becoming the leading service company with an impeccable record of excellence and efficiency. Their goal is to provide excellent services to offshore, onshore and near shore drilling contractors in Ghana, Africa and the world. In an exclusive interview with Orient Energy Review magazine, Alfred Adagbedu, Chief Executive Officer of Seaweld Engineering Company Limited, disclosed that Seaweld has the manpower, the capacity and all it takes to construct a vessel. Seaweld has vast knowledge and expertise in the fabrication sector of the oil and gas industry. The company is one of the Ghanaian companies that participated in providing fabrication services to the construction of the FPSO Prof Attah Mills for the TEN project. The FPSO’s module support stools, which attach modules to the deck of the vessel, were fabricated in Takoradi and Tema by Seaweld Engineering Ltd and Orsam Ltd. According to Mr. Adegbedu, “Our experience is not only limited to what we have done in Ghana but also elsewhere in other countries. We want to put all these experience and expertise together to undertake this project”. He indicated that the company wants to start with the construction of smaller vessels first. He pointed out that attempt by Seaweld to partner the Maritime Dock Workers in the past to do similar project was not successful. “So basically we want to start by ourselves and if the players in the industry find out that we are doing it and they want to partner us, so be it. But we want to start with the construction of the type of ferries that is used on the volta lake. Hitherto, Ghana has been buying these ferries from outside. But now we want to start building them in Ghana”. On whether Seaweld has plans to construct a FPSO, Mr. Adegbedu noted that due to the capital intensive nature of such a project, it has to be a govern-
ment driven agenda, noting that, “If government agrees that it can be done and brings all stakeholders on board, it becomes a real feasible thing. So building an FPSO in Ghana is a possibility but must be a goal and agenda by government”. The vessels building initiative is just one of the numerous business ideas that the company want to rollout this year. “Our plan for 2017 is to create more employment. Basically we want to feed the population and the way to feed the population is creating employments and wealth. Apart from that, being an oil and gas service provider, we want to see the industry grow for the new fields that are going to be developed in Ghana. We also want to be the biggest service provider company in Ghana. We want to do more training not just for Ghana but the entire African Community”, he pointed out. Seaweld is an intermediary member of Trace International, which greatly signifies their commitment to transparency in International Commercial transactions. Price of crude oil Mr. Adegbedu was confident that the oil price is going to be stable in 2017 to enable them embark on this ambitious project. It has been projected that oil prices are likely to continue to hover around $50 to $60 per barrel and if this trend continues, it will be very go news for players in the oil and gas industry who had to cut projects and lay off workers due to the fall in oil price in early 2015 to 2016. However, Mr. Adegbedu pointed out that it is too early to be over confident of higher oil price now, pointing out that, “At Seaweld we are cutting our cloth according to the size. We are currently cutting our prices and margins down to survive in the industry. Voltaian basin Seaweld is keeping a close eye on the voltaian basin. To do an exploration of that nature takes expertise and therefore local expertise is very important. The company has already started running courses in partnership with the Regional Maritime University to training local labour so that come 2018 when exploration activities are expected to commence at the Votlta Basin they will have the men to fully take part.
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GAS
NNPC Supports Legislative Intervention for Gas Flaring By Sola Akingboye
T
he Nigerian National Petroleum Corporation (NNPC) has said that it has put in place measures and facilities to curb gas flaring, preparatory to the 2020 flare out deadline by the Department of Petroleum Resources (DPR). This was revealed by the NNPC Group Managing Director, Dr. Maikanti Baru during a one-day public hearing on Gas Flaring Prohibition Bill 2017, at the National Assembly in Abuja, recently. Represented by the Managing Director, Nigerian Petroleum Development Company (NPDC), Mr. Yusuf Matashi, the GMD noted that the corporation’s support for the legislation to reduce gas flaring in the country was based on the financial benefit to the Nigerian economy rather than being seen from the penalty point of view. Adding that NPDC as the highest gas supplier to Nigerian domestic market is committed to the reduction and elimination of gas flaring to generate more revenue for the country. “NNPC supports the legislative intervention to prohibit gas flaring in line with global best practices, considering its negative impacts on the environment and the communities where the gas is flared. NPDC, the exploration and production arm of the Corporation is going ahead to see that the monetization of flared gas is realized despite the challenges of the past, Baru stated. Earlier in his remarks, the Senate President, Dr. Bukola Saraki, who was represented by the Deputy Majority Leader, Senator Bala Ibn Nallah, while declaring open, the public hearing said that the issue of gas flaring was a national embarrassment, adding that the
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8th Senate was committed to enacting a legislation that would end gas flaring in the country. “Gas flaring is as old as crude oil exploration in the country. We are, therefore, committed to this legislation which seeks to put an end to gas flaring which has deprived the nation of huge revenue, impacted the lives of oil producing areas negatively and depleted the ozone layers, Saraki said. Speaking also, the Senate Committee Chairman on Gas, Senator Albert Bassey, stated that the Gas Flaring Prohibition Bill 2017 served as a legislative panacea to end gas flaring in the country. He said the public hearing was to collate views of relevant stakeholders that would enrich the bill and find a lasting solution to the challenge of gas flaring in line with the Paris Agreement on clean environment and World Bank 2030 flare out deadline. NNPC Increased Gas Supply behind Improved Power Supply Efforts by the Federal Government to boost electric power generation in the country may soon yield the required dividend following the sustained increase in gas supply for power generation by the Nigerian National Petroleum Corporation, NNPC. The March 2017 edition of the monthly Financial and Operations Report of the Corporation released recently in Abuja, revealed that the average national daily gas production for the period stood at an impressive 226.918 billion cubic feet, bcf, which translates to over 7.319 million standard cubic feet of gas per day, mmscfd. The report also revealed that the daily average national gas
supply to gas power plants increased to 689mmscfd or the equivalent to power generation of 3056 mw. The March 2017 figure is an improvement on the previous month’s record which stood at 582 mmscfd. The supply is also over 29 percent higher than the corresponding supply record for March 2016. However, pipeline sabotage in the country increased from 49 downstream pipelines vandalized points in February 2017 to 94 in March, 2017. This represents over 91 percent increase relative to the previous months despite FG’s and NNPC’s continuous engagement with the stakeholders. Nevertheless, there is a noticeable improvement compared to corresponding period of March 2016 which posted 259 cases. Also, in the downstream sector, NNPC has in stock, a robust inland supply of over 1.2billion litres of petrol sufficient for more than 34 days forward consumption. On Automotive Gas Oil, AGO and Aviation Turbine Kerosene, ATK. Meanwhile, NNPC has continued to import to supplement AGO local refining even as the Central Bank of Nigeria has released foreign exchange to marketers to import AGO and ATK. The report notes that the inaugurated 497.2km System 2B petroleum pipeline network which was achieved within the period under review has helped the NNPC to sustain the gale of uninterrupted supply and distribution of products throughout the country. Only recently, the NNPC Group Managing Director, Dr. Maikanti Baru noted that the Corporation’s re-commissioned Mosimi and Kano depots had impacted positively on highways across the Country. The GMD disclosed that the two depots had relieved the impacts of long haulage of petroleum products on the roads, saving the nation of serious environmental consequences of bridging to motorists, settlements along highways and the general ecosystem in the country.
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LOGITICS & MARITIME
Nigerian Maritime Administration and Safety Agency (NIMASA) to Provide Support to Ghana …Set to Sign MoU In his response, the Director General of the Ghana Maritime Authority, Mr. Kwame Owusu commended the doggedness of the Dr. Dakuku led Management of NIMASA in repositioning the Nigerian maritime sector and by extension the entire African continent. He said “we are here to strengthen the bilateral relationships that exist between both countries and to learn international best practices from you”.
I
n continuation of its quest to make Africa compete favourably with other maritime nations in the world, the Federal Government through the Nigerian Maritime Administration and Safety Agency (NIMASA) is set to provide support to the Ghana Maritime Authority (GMA) through a proposed Memorandum of Understanding (MoU). The Director General of NIMASA, Dr. Dakuku Peterside who made this known during a working visit by the Ghana Maritime Authority (GMA) to the Agency led by its Director General, Mr. Kwame Owusu stated that in carrying out its statutory functions, the Agency is strengthened by three important Acts of Parliament namely: the Merchant Shipping Act, the NIMASA Act and the Cabotage Act. He also informed the GMA team that in order for NIMASA to actualize its core mandates which cuts across shipping development, maritime safety and security, maritime labour services, amongst others, the Agency is currently repositioning and rebranding for greater efficiency, geared towards realizing a virile maritime sector in line with global best practices.
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“We have taken a number of initiatives to reform, restructure and reposition the organization; what we have now is not what we have always had, a lot has changed over time and you will get to learn from our own experience the life we lived and still living. Nobody realizes his vision overnight, our vision is work in progress with a focus on becoming the foremost maritime administration in Africa, advancing Nigeria’s maritime goal”, the DG stated.
The delegation from Ghana came to learn and share part of the experience of NIMASA so that they can replicate same in their country. The areas being considered for the MoU are; regular knowledge sharing and knowledge transfer, capacity building initiatives and Cabotage implementation/enforcement processes. It may be recalled that the NIMASA DG was elected as the Chairman of the Association of African Maritime Administrations (AAMA) during the 3rd Conference of the body that held in Abuja between April 19 – 21, 2017 and he has since shown determination in taking the African maritime sector to greater heights.
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