INDUSTRY NEWS
Nigeria’s Oil Exports to Leap by 575,000 Barrels/Day
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epairs of vandalised oil facilities in Nigeria is set to help drive up the volume of the country’s crude oil exports by 575,000 barrels, per day, in the last quarter of 2016.exxonMobil is the latest oil giant to have a pipeline prepared to export Qua Iboe grade of crude, with the first cargo expected to load as early as the end of September, Reuters reports, quoting trading sources. Qua Iboe is Nigeria’s largest crude oil stream, exporting more than 300,000 barrels per day. Exports had been under force majeure since July after a leak on the 48-inch pipeline carrying it to the export terminal. Shell, recently, lifted force majeure on Bonny Light, Nigeria’s benchmark crude oil grade, following the repair and reopening of the Nembe Creek Trunk Line (NCTL) by the pipeline’s operator, Aiteo. The repairs of the NCTL potentially restored about 275, 000 barrels/day production shut-in since May 10, according to an NNPC June operation reports. However, two other Nigerian crude oil grades, Forcados and Brass River, remained under force majeure. Shell had in February declared force majeure on lifting from the Forcados export terminal while in May, an Italian oil major, Eni, declared force majeure on the Brass River grade, following an attack on a key pipeline at the Brass Rivers terminal. Exports of crude from the country have plunged to the lowest in almost 30 years, following the spate of production disruptions caused by militant attacks on oil infrastructure in the Niger Delta but the country’s oil production has remained resilient.
OPEC Agrees To Cut Production by 750,000 Barrels per Day The Organisation of Petroleum Exporting Countries has agreed to cut production by 750,000 barrels a day, Bloomberg News reported Wednesday, citing a delegation member. The surprise news triggered an immediate spike of more than 5 percent in crude prices, as markets had expected the Algiers meeting to end without agreement. In London benchmark Brent North Sea crude for November delivery rose $2.72 to $48.69, while in New York a barrel of West Texas Intermediate (WTI) was up $2.38 to $47.05. OPEC members, whose countries produce 40 percent of the world’s crude oil, agreed to cut their output to 32.5 million barrels per day, Bloomberg said citing a delegation source who requested anonymity. An informal OPEC meeting opened in Algiers earlier Wednesday to discuss a possible freeze in output by the cartel, with the aim of raising prices which have fallen by more than half since mid-2014. *AFP
4 Orient Energy Review September 2016
INDUSTRY NEWS
Shell Shuts Trans Niger Pipeline
OPEC List Challenges Confronting Global Oil Market
The Trans Niger Pipeline in Gio, Tai Local Government Area of Rivers state has been shut by Shell Petroleum Development Company (SPDC) of Nigeria Limited. In a statement issued in Port Harcourt recently, Mr. Joe Obari, SPDC spokesman, said fire was observed on the right of way of the pipeline (TNP) at Ogoni land. “This is also the right of way of the Bonny-Refinery pipeline belonging to the Petroleum Products Marketing Company (PPMC), a subsidiary of Nigeria National Petroleum Corporation (NNPC),” the statement reads. Obari said that a joint investigation team visit would determine the cause and impact of the fire. “SPDC has shut the TNP as a precautionary measure pending the investigation,” he said. It was not clear whether Shell was referring to the same Bonny Crude Export pipeline, which the Niger Delta Avengers claimed its men damaged recently. The Trans Niger Pipeline is one of two major pipelines carrying the Bonny Light crude grade for export. It will be recalled that a force majeure was declared earlier in May by Shell on Bonny Light exports after the NCTL was closed. The Anglo-Dutch oil giant is joined at TNP by the Nigerian National Petroleum Corporation (NNPC), French multinational company, Total and Italian major Eni’s subsidiary Agip. The shutdown comes as repairs are completed on the Nembe Creek Trunk Line (NCTL) that also moves the major export grade. Shell had initially declined to confirm the report or whether oil export has been compromised, with the latest sabotage by the Avengers. The Niger Delta Avengers however has said its attack was “only a wake-up call” and a response to a clampdown by security forces
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Orient Energy Review September 2016
The Organisation of the Petroleum Exporting Countries (OPEC) has listed the challenges confronting the oil market to include uncertain prospects for the global economy; excessive speculation and the role of financial markets. Others, the cartel noted are the impact of geopolitics; advances in technology and their impacts on exploration and production; and environmental concerns. OPEC’s Secretary General, Mohammad Sanusi Barkindo, put these challenges forward to the 15th Ministerial Meeting of the International Energy Forum (IEF), which is due to end in Algiers, Algeria today. In an article submitted for inclusion in the official IEF Ministerial publication, Barkindo said it all points to the need to continually strive to develop and enhance dialogue and cooperation. He added that there is evidently much for producers and consumers to talk about and cooperate on. He said that the global energy system is complex and ever expanding — “one that is finely balanced and where stability must be the mantra over all timeframes.” Barkindo added that it is essential to appreciate that the short, mediumand long-term are all interlinked.
He noted that the importance of this can be viewed in the constant flux oil markets have found themselves in since the summer of 2014. “It has been a period of significant instability. Oil prices now are considerably lower than in mid-2014, many investments have been deferred and some can celled, manpower has been laid off, oil supply has been greater than demand and stocks have risen considerably,” he said. Barkindo maintaining that the market has been searching for balance, said: “While we see some signs that supply and demand fundamentals may balance themselves this year, there remains a significant stock overhang that needs to be reduced. This is now a central element to the return of a more balanced market.” The OPEC chief stressed that it is vital to appreciate where the additional supply has come from. “Between 2008 and 2014 all of the supply growth of more than six million barrels a day came from nonOPEC countries, while in 2015, nonOPEC output grew by almost 1.5m bpd, for OPEC it was at around 1.1m bpd,” he added. *Courtesy: Guardian
POWER
Power Africa: US On Track To Fulfill $7bn Commitment
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hree years after the launch of Power Africa by President Barack Obama to bring abouttransincreased access to elecElectricity tricity in the continent, the United States is on track to fulfill its initial $7 billion commitment, according to Power Africa partners. The US had pledged $7 billion initial commitment over five years as part of its contribution to drive the initiative. Experts said the US government has now nearly released the entire amount to the project. At the recent US-Africa Business Forum, the US government and its Power Africa partners announced several new milestones across dozens of energy projects and transactions. These commitments – totalling more than $1 billion worth of debt and finance – will advance deals that aim to provide access to electricity across sub-Saharan Africa. Power Africa partners, including African governments, multilateral and bilateral partners, and more than 130 private sector partners are helping to maximise our impact and accelerate private sector investment in renewable energy. The US government’s initial $7 billion commitment has mobilised more than $52 billion in additional external commitments, including more than $40 billion in private sector commitments to invest in power generation and distribution across sub-Saharan Africa. The US African Development Foundation, USADF, announced 20 new $100,000 grants for African energy entrepreneurs in the newest round of the Off-Grid Energy Challenge. These winners are innovating, using renewable technologies from solar micro-grids to biogas, to bring electricity to rural communities living far from the national grid.
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Orient Energy Review September 2016
National Power Boost Uncertain as Erosion Threatens Hydro-Project by the Federal Government Moves to boost power supply nation-
wide with the construction of a hydro-plant on Mambilla Plateau in Sardauna Local Council of Taraba State, North Eastern Nigeria may have turn out a tall dream. Reason: The community hosting the project is on the verge of being cut off by gully erosion. A border settlement with Cameroun, Lakkitaba, is reportedly in the throes of extinction if the problem was left to tarry. Motorists and travelers negotiating Gembu, the administrative headquarters of Sardauna Local Government and Cameroun, are, according to reports, being left to devise an alternative route as a result of the erosion. The Guardian, during a visit to the area, observed that the erosion had eaten deep into the only motorable road leading to the project site, a development that has instilled hopelessness in the people as regards the coming into fruition of the cherished facility. Some community leaders, who spoke to the press, said the project would sure be affected if nothing was done urgently to fix the dilapidated federal road, as it would play host to heavy machines during construction.
The Village Head, Alhaji Hammidu Umar, pleaded with government to tackle the menace expeditiously. Similarly, commuters urged quick intervention to stave off avoidable loss of lives and properties. The council’s Vice Chairman, Yerima Hassan Aliyu, who confirmed that the state government had been written, added: “This is a federal project but I am very certain that our governor, who is an architect by profession, will give all the needed help to fix the road.” Speaker of the State House of Assembly, Abel Peter Diah, bemoaning the hardship of the people, called on government “to come to our rescue by bringing to an end this ongoing erosion that has taken over the major and only road leading to the site of the project.”
POWER
Power Sector Faces Collapse - Frontier Oil CEO
“We need quick-win initiatives that will put a stop to vandalism of oil and gas assets to ensure that oil and gas production ramps back up to about 2.2 million barrels of oil production per day and 5,000 megawatts of power generation, which is what we are capable of generating and transmitting successfully at this point due to an antiquated ‘dumb’ grid that is the weakest link in the gasto-power value chain.”
Engr. Dada Thomas
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hief Executive Officer of Frontier Oil Limited, Engr. Dada Thomas, has warned that the nation’s power sector risks collapse, urging the Federal Government to act fast. He stressed the need to address the problem of gas production as 80 per cent of current and future power generation, according to him, is based on gas-fired power plants. Thomas said, “But the gas-to-power value chain itself is terminally sick in the emergency ward infested with a number of crippling diseases, chief among which are the primary diseases of vandalism of oil and gas facilities, sector illiquidity, price and securitisation challenges. According to him, other challenges are inadequate and dilapidated power transmission and gas distribution infrastructure, low economic returns for gas projects and lack of access to gas reserves by those willing to develop them if the terms and conditions are right. “If nothing is done soon, the patient will surely die and Nigeria will be plunged into perpetual darkness and all the associated knock-on effects,” he said. Thomas said the problem of vandalism would soon be solved as the government was now taking the matter very seriously. He said, “In the past six weeks, the third party-owned gas evacuation system through which our company – Frontier Oil Limited – transports gas has been sabotaged twice, resulting in the loss of about 450 megawatts of power from the nation’s power generation capacity, thereby worsening an already dire situation.
8 Orient Energy Review September 2016
The Frontier Oil CEO said this would yield the immediate short-term benefit of increasing the country’s foreign exchange earnings and providing power for the nation, as “factories are closing down daily, offices and homes wasting hard-earned income on expensive diesel or petrol for self-power generation”. He said the distribution companies were primarily responsible for the illiquidity in the gas-to-power sector. “They are not metering properly and are, therefore, not collecting their revenues efficiently as demonstrated earlier. They have continued the odious practice of estimated billing and they are not doing the things they contracted to do when they took over the franchises they bought. “They argue that they are not getting enough electricity to sell; that the electricity tariff is not cost-reflective and consumers are stealing power, and as such are not making enough money to pay their loans, let alone fund additional capital investments. The blame game and list is endless. The fact is that the DisCos are not the only ones to blame.” He said the government and consumers who stole electricity without paying for it should also take part of the blame. “The DisCos claim government ministries, departments and agencies owe them N93bn. This means government is the biggest debtor to the DisCos and is also partly responsible for the illiquidity in the gas-to-power sector.”
Thomas said, “As long as the DisCos are insolvent or not making enough money, they cannot invest in meters and the upgrade of distribution infrastructure. The money they are making is barely enough to service their loans and the banks are no longer willing to lend money to the power sector, especially the DisCos. We have a complex but undeniable problem and government needs to and must do something about it urgently.” He said Nigeria could learn from the Indian model, with the Indian government supporting the power sector for 10 years by subsidising it. He suggested that the government should use the N1tn savings realised from fuel subsidy removal to stimulate and support the power sector. “The government’s intention and objective of diversifying the economy will amount to nothing unless the gas-to-power sector is rescued from imminent and catastrophic systemic collapse. Government has to do something drastic. “Should government allow the Nigerian Bulk Electricity Trading Plc to sit on $800m and let the sector collapse before our very eyes? Should government not consider the idea of a bond for the power sector as many experts are advocating? What role can the pension funds, with the right and effective safeguards and stringent due diligence to protect people’s pensions and future, play in meeting the huge funding requirements of the gas-topower sector? “ Thomas urged the Federal Government to declare a national emergency on the power sector fast and ensure “it takes the courageous, far-reaching and wellthought-out decisions to save the sector before it is too late. “I am encouraged by the fact that my interaction with the current government leads me to believe that this is a listening government that truly wants to do something about the Power sector.” *Punch
POWER
Electricity Sector Operators Raise Alarm over Meter Bypass practice of bypassT heingfraudulent the normal function of electricity meter by some consumers may have become a nightmare to operators in the electricity sector. They have used the just concluded West African Energy Summit, at Eko Hotels and Suites, Lagos, last week to alert the government on the dangers ahead as a result of the situation. Speaking at the event, tagged: “Developing Sustainable Power Generation, Transmission and Distribution Networks for West Africa”, Chair-person, ECOWAS Regional Electricity Regulatory Authority, ERERA, Mrs. Ifey Ikeonu, stated that bypass of meters is a criminal offence and hostile to growth in the country’s power sector. She said, “I think we should bring this to our awareness, so that people will also know the impact to a larger society because, if we don’t pay our
bills, at the end of the day the distribution companies do not have the required revenue that is needed to deliver services and function properly. “And so, it becomes a vicious cycle and makes it almost impossible and difficult for us to go beyond where we are. When you bypass someone else is paying for that.” On the way forward, she called for collaboration between customers and operators as well as strong legal system with enforceable fine structure as deterrent to perpetrators. “We should quickly review existing legislation and allow for quick trial and conviction, and also it should be in line with offence committed.”
electricity workers as a major factor for the proliferation of the meter bypass, calling on electricity companies to go beyond the use of smart meters “as people are smart also”. On his part, Group Leader, Generation, Sahara Power Group, Engineer Mike Uzoigwe, warned that if the ills (electricity theft and vandalism), in the power sector are not tackled, there would be general power breakdown in the next six months.
Also speaking, an expert and senior researcher from the Centre of Clean Coal Technology School of Chemical and Metallurgical Engineering, Dr. Samson Bada, blamed corruption among
AEDC Cancels Payment for Meters
Electricity Distribution Company (AEDC) has T hesaidAbuja customers should no longer pay for prepaid meters
as it continues with its metering plan. AEDC said recently that it began the winding down process to stop the Credited Advance Payment for Metering Initiative (CAPMI) while complying with the directive from the Nigerian Electricity Regulatory Commission (NERC). The company in a notice to customers said it had directed its offices and officials to stop receiving any payments for meters either in cash or by bank draft with immediate effect. It recalled that NERC directed the 11 Distribution Companies (Discos to wind down the process for CAPMI ending 9 Orient Energy Review September 2016
by November 1, urging electricity consumers to desist from paying to get prepaid meters. It assured customers that have paid for meters under CAPMI before the notice that their meters would be supplied and installed shortly. AEDC said it had rolled out over 50,000 meters this year with plans to massively deploy another 85,000 units this year.
POWER
Egbin Power Plant May Be Shut Over Rising Debt
Managing Director and Chief Executive Officer, Egbin Power Plc, Mr. Dallas Peavey Jr.
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he nation’s electricity woes may worsen in the coming weeks as liquidity and gas supply issues are threatening the operation of its biggest power station, Egbin. The Managing Director and Chief Executive Officer, Egbin Power Plc, Mr. Dallas Peavey Jr., told our correspondent in an exclusive interview that the owners of the plant might be forced to consider shutting it down if the challenges remain unresolved. Egbin, which is located in Lagos, was acquired in 2013 by Kepco Energy Resource Limited in collaboration with its technical partner, Korea Electric Power Corporation, during the privatisation of the successor companies carved out of the defunct Power Holding Company of Nigeria. Asked if the company had any challenge in paying gas suppliers, he said, “We do because we are owed N86bn and we in turn owe the gas suppliers approximately N30bn. We are working on payment plans. “We think if this is not addressed in the next couple of weeks, we are going to take the hard look at shutting down, because we can’t afford running it any 10 Orient Energy Review September 2016
longer. That’s a dire prediction.” Peavey said the company owed banks $325m as it had to borrow to overhaul the plant after it was acquired to enable it to operate at its installed capacity of 1,320 megawatts. Generation from Egbin was said to be limited to 383MW on Wednesday due to gas constraints, compared to 1,085MW on March 15, according to industry data obtained by our correspondent. The plant hit a record low of 246MW on last Saturday from 425MW on Friday. Its unit ST1 was said to have tripped on generator CB trouble; ST2, 3 and 5 not on spinning reserve due to Egbin G/S management decision, while the ST4 was out due to gas constraints. “Right now, because of gas and transmission issues, we only have three of our six units running. Each one of our units can produce 220MW. For a megawatt, that is about 100,000 people that it provides power for,” Peavey said. The Egbin CEO, who spoke with our correspondent shortly before the nation recorded its latest total system collapse on September 16, said, “We are helping to stabilise the national grid. If you notice, over the last six weeks, we haven’t
had a grid failure or system collapse because of Egbin. “Egbin is the sole reason there has not been a total system collapse in the nation, because we regulate everything coming to Lagos all the way to Abuja and farther north.” Out of the six power stations meant to provide spinning reserves, only one had actual reserve of 9.4MW as of 6am on Wednesday, September 21, down from 17.4MW on Sunday and 30.4MW on September 10. The power stations are Egbin, Kainji, Delta, Olorunsogo II, Geregu II and Omotosho II, with a combined reserve capacity of 235MW. The reserve capacities and actual reserve of Egbin and Kainji stood at zero as of Wednesday, while those of Delta were 80MW and zero, respectively. This year, the nation’s power grid has so far recorded 22 collapses – 16 total and five partial – up from 13 and 10 in the whole of 2014 and 2015, respectively. *Punch
POWER
BoI, UNDP Sign $2 Million Pact on Solar Power to Nigerian Communities By Our Correspondent with agency Reports
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he Bank of Industry, BoI, has signed a $2 million agreement with the United Nations Development Programme, UNDP, to provide solar-powered electricity to no fewer than six communities in six states of the federation. Speaking at the signing of the Memorandum of Understanding, MoU, on cost sharing pact in Abuja recently, Acting Managing Director of BoI, Mr. Waheed Olagunju, said the bank would provide $1.4 million for the project while the UNDP would provide the balance of $600,000. Olagunju said: “This commenced in 2015 with a pilot phase in which the first set of low-cost, off-grid solar electrification projects were deployed in one community in each of the six geopolitical zones, in partnership with GVE Projects Limited and Arnergy Solar Limited. “The pilot project involved the provision of long-term financing for the installation of micro-grid and stand-alone solar solutions in Bisanti community, Katcha LGA in Niger State, Idi-Ita/Onibambu community, Ife North LGA in Osun State, Kolwa community, Kaltungo LGA in Gombe State, Onono community, Anambra West LGA in Anambra State, Obayantor 1 community in Edo State and Charwa/Chakun communities, Makarfi LGA in Kaduna State. These projects were commissioned in record time between October 6, 2015, and May 24, 2016. “The blend of BoI’s contribution in the sum of US$1.4 million as debt financing for the projects, with UNDP’s grant contribution of US$600,000 will provide the much needed stimulus to scale up the projects in view
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of the attendant reduction in the cost of deployment and enhancement of its overall viability,” he explained. He noted that BoI’s contribution and the UNDP grant would be deployed to provide solar energy solution in states where both BoI and UNDP had existing collaboration. Olagunju said the pilot project scheme in Gombe, Niger, Osun, Anambra, Edo and Kaduna states, was aimed at giving rural communities the opportunity to take control of their energy generation and also pay for only the units consumed. Olagunju disclosed that plans were underway to replicate the project in other off-grid communities in Edo State, in collaboration with the state government as well as other parts of the country, working with the various state governments. He said for Nigeria to meet up with its energy needs, she must diversify into the use of alternative sources as the country had some of the world most abundant and least exploited renewable energy sources, especially solar power. He maintained that solar power could be utilized to provide the much needed electricity for the nation’s rural communities, rather than waiting in vain for the national grid to get to these areas He, however, said the Development Finance Institution’s (DFIs) medium term vision was to have about 100,000 homes installed with stand-alone solar home systems, pointing out that this move was essentially a programme aimed at poverty alleviation, reduction in rural-urban migration to foster rural economic development.
“We are all aware that power remains a major obstacle to growth in Nigeria, as inadequate and unreliable electricity undermines investment opportunity, economic growth, social and infrastructure developments,” he said, adding that the central power generation, transmission and distribution system operational in the country could no longer deliver competitive, cheap and reliable electricity to remote customers on and off the national grid. According to him, renewable energy sources, such as hydro, wind and solar, are growing in relevance and commercial adoption on a global scale, even as issues such as climate change and energy security have taken the front burner globally. He said solar power had emerged as a tested solution to the rural electrification challenge and was now the cheapest source of electricity for more than one-third of Africa’s population, a figure that would continue to increase as the cost of solar plummets. He said solar power solutions was the best technology Nigeria could get from the United States to be financed by the BoI and UNDP, adding that if the project succeeded, it would be used in other off-grid areas in the state and the nation at large. He said scaling this pilot project across 774 local government of Nigeria with 10 micro-grid installed in each local government would generate 300MW of uninterrupted electricity, devoid of sabotage or pipeline vandalism. Olagunju further said BoI was working in partnership with 20 states and the Federal Capital Territory, while the bank hoped to cover the remaining 16 states as soon as possible. The Country representative of UNDP, Mrs Mandisa Mashologu, who commended BoI for the collaborative effort to reach out to the communities, said both parties would look out for states already partnering with BoI and UNDP.
POWER
FG Targets Energy Audit for Adequate Electricity Supply T
he Minister of Power, Works and Housing, Babatunde Fashola, penultimate Tuesday said the Federal Government was planning an audit of energy consumers to meet power supply needs of Nigerians. Fashola who stated this at the Made-In-Nigeria Summit 2016 held at the Eko Atlantic City in Lagos added that Nigerians were wasting a lot of energy and there was a gap between power generation and distribution that needed to be ascertained. Some panelists at the event said that about 80 per cent of energy generated through various energy alternatives was usually not absorbed by distribution companies. The minister said there was the need for synergy between power generation and distribution companies in order to reduce loses, while ensuring their adequate consumption. Fashola said: “It is important for government to know the number of its citizens; to predict the kind of energy demand they have; and in what way they demand that energy. It is a data that every sensible and serious government would want to have at its disposal; whether it collects it by itself or through private efforts.” He disclosed that the ministry was working with the National Population Commission, NPC on how best to conduct the next census and explore its energy opportunity for Nigerian businesses. Fashola stressed the need for an energy mix for power generation, depending on the sources available in the various regions which included gas, solar, hydro and coal. He also said that government was verifying debts before making payments to contractors to ensure that they followed due process and the right procurement procedures in contract awards and execution. The minister added that government was rehabilitating power assets across the country, which had been responsible for the steady power supply being enjoyed currently. His words “In the last one year Kainji, Jebba and Shiroro dams have been going through a lot of investments, repairs and maintenance that have been abandoned for decades and we have increased water levels. We are also seeing solar initiatives coming through, and this is the combination of what is providing the stability.’’ The minister said though the nation had lost about 3,000 mega watts to vandals not too long ago, it was able to generate about the same amount this year. Fashola said that government was working on increasing power supply until it achieved sufficient power generation and distribution. Universities located in rural areas according to the Minister would be connected to the national grid in the foreseeable future. The minister said that by so doing, government would actualize its rural electrification goal.
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Fashola gave his support for Made-In-Nigeria meters, transformers, cables and other electrical fittings and appliances that complete the value chain of electricity distribution and generation. Orient Energy Review reports that the minister had earlier declared open the Power Nigeria Exhibition at Eko Hotel. He lauded the number of exhibitors who were about 200 from various countries. Fashola said this confirmed the fact that there were opportunities from the challenges in the power sector which ‘rational investors’ were exploring.
Power Crisis: Egbin MD’s Comment Not In National Interest – Minister
However, Fashola said Peavey’s comment is capable of discouraging investors. “I must comment on the recent statement made by the Egbin MD. Such words are insensitive and not in the national interest because it is capable of sending investors away,”he said.
Babatunde Fashola, Nigeria’s minister of Power, Works & Housing. he Minister of Power, Works and Housing, Babatunde Raji Fashola has described the comment of the Managing Director and Cheif Executive Officer of Egbin Power Plant, Mr. Dallas Peavey on the imminent collapse of Nigeria’s power sector as not in the country’s interest. Fashola who stated this on Tuesday at the ongoing 2016 Power Nigeria Conference in Lagos noted that Mr. Peavey’s comment on the power sector is not progressive and not in the national interest. Mr. Peavey had earlier said Nigeria might experience total darkness if the government does not wade into the power sector crisis by paying its debt. He explained that government agencies, police, and army barracks are owing power generation and distribution over N80 billion.
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Fashola then assured investors of great opportunities in the Nigerian power sector noting that “I have had talks with investors who are willing to come into Nigeria. And I am particularly encouraged when I heard that about 200 investors from about 17 countries are here today. “I will like to say here that Nigeria is a market that no rational investor can ignore. I am focused on delivering good and fast electricity and investors can be assured that their investments are protected so long as they play by the rules,”he said. Commenting on the strength of the national grid, and the over N80 billion debt, Fashola said the grid is capable of supporting 5,300 megawatts adding that all debts will not be paid until government verifies who owes what and how the debts were accrued, stressing that the government will not pay “illegal debt”.
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COVER STORY
Nigerian Marginal Fields: Despite Dwindling Fortunes By Godspower Ike
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he marginal field development programme was introduced by the Federal Government of Nigeria to encourage local participation in the petroleum industry, grow the country’s reserves and boost crude oil production. About 13 years after the commencement of the programme, it is yet to achieve its aims. This article highlights the various setbacks, challenges and prospects of the programmes and how marginal fields can contribute meaningfully to growing Nigeria’s crude oil output.
14 Orient Energy Review September 2016
COVER STORY
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he Nigerian marginal field development programme was introduced over a decade ago with optimism for increased indigenous involvement in crude oil exploration and production. However, many years down the line, the programme is yet to achieve its aim. Today, marginal field operators contribute less than four per cent of the country’s crude oil output and their future looks bleak, especially with the low price of crude oil in the international market. In 2003, the Federal Government awarded 24 marginal fields’ Oil Mining Leases, OML, to 31 companies. The DPR stated that the fields are presently at various stages of development, with only nine of the fields producing. Actually the programme was heralded by the award of the Ogbelle field to Niger Delta Petroleum Resources Limited in 1999. The company was the first beneficiary of marginal field in the country.
said marginal fields operators, only accounted for 3.09 per cent of Nigeria’s crude oil output between June 2015 and May 2016. Specifically, the NNPC stated that marginal fields produced 23.243 million barrels of crude oil from June 2015 to May 2016, compared to a total 751.882 million barrels produced in the period under review. Another report disclosed that marginal field operators had added more than 100 million barrels of crude oil reserves to the National Reserve Base and produced some 57.4 million barrels of crude oil from 2004 – 2014. Difficulty in accessing financing was listed as the major challenge responsible for the inability of majority of the license holders to develop the fields. Other factors include the highly technical nature of the petroleum industry and other issues bothering on insecurity and a difficult operating environment.
Following the 2003 awards, in 2006 and 2007, Okwok field and Ebok field were awarded respectively, to Oriental Energy to compensate the company for losing part of its OML 115 to Equatorial Guinea due to boundary adjustment. In addition, in 2010, Otakikpo and Ubima fields were awarded to Green Energy Limited and Allgrace Energy Limited respectively as part of a lingering award process that commenced in 2004. T he active and productive marginal fields identified by the DPR were: Platform Petroleum – Egbaoma – OML 38; Walter Smith and Morris Petroleum – Ibigwe – OML 16; Frontier Oil Ltd – Uquo – OML 13; Britania-U Nig. Ltd. – Ajapa – OML 90; Midwestern Oil & Gas/Suntrust Oil Ltd – Umusadege – OML 56. Others are: Pillar Oil Ltd – Umusati – OML 56; Energia Limited/Unipetrol Petroleum Limited (bought over by Oando) – Ebendo – OML 56; Oriental Energy – Ebok – OML 67; Niger Delta Petroleum Ltd – Ogbelle – OML 54. The DPR had stated that the nine productive fields were able to grow their reserves from 141 million barrels in 2004, to 302.6 million barrels in 2013, while more recently, the Nigerian National Petroleum Corporation, NNPC, 15 Orient Energy Review September 2016
Adeyemi-Bero
Managing Director/Chief Executive Officer, First Exploration and Petroleum Development Company, Mr. Ademola Adeyemi-Bero identified the challenges faced by indigenous marginal field operators to include difficulty in agreeing operational synergies with lease owners, mainly international oil companies, IOCs, as well as competition with IOCs in terms of technology and personnel. He further listed worsening security issues in their operational areas and the fact that third party evacuation infrastructure are constantly being breached. He argued that multiple taxation, delay in project approvals, and the absence of a gas flaring policy which makes it uneconomical to develop associated gas in marginal fields, are as some of the other hurdles hindering marginal field development.
In addition, Adeyemi-Bero noted that the inability to access funds and the right people; unattractive marginal field assets and the increasing cost of qualified personnel, specialised goods and services. To address the challenges hindering marginal field development in the country, Adeyemi-Bero said the Federal Government and the Department of Petroleum Resources, DPR, should enable and grow the programme by ensuring certainty in the proposed improvements to the fiscal framework. In addition, he stated that the Federal Government and the DPR should create incentives for operators that are expanding the value chain into gas, midstream and downstream business and also help the operators eliminate the security threat in the Niger Delta. He maintained that the government should undertake a proactive support for the marginal fields programme; support more operators to put their field into production and also offer additional marginal fields bid rounds and direct deals. On the part of the operators, he said, “Marginal field operators must assess the reserves and resources and upside with the marginal field coordinates and secure credible independent Competent Persons Report; assess funding options and fit to the development plan, and put in place fit-for-purpose and experienced integrated field. “They should also collaborate with other operators, independents and service companies to deliver a mix of financing and services; deliver a phased field development plan to achieve a sustainable bankable proposition. “In addition, they are to aim for initial field production plateaus of three to five years; pursue field extension and exploration & appraisal opportunities; maximise the value by commercialising oil and gas production streams and focus on cost optimised developments targeting Unit Technical Cost in the range of between $2 and $10 per barrel of oil equivalent.”
COVER STORY
The OES Teamwork formerly known as the Searex XII was built in 1982 and enhanced in 1990. The rig which was purchased by OESL in 2007 is a 2000HP swamp drilling barge equipped with 10,000PSI BOP systems.(Courtesy Oando Plc) “In addition, they are to aim for initial field production plateaus of three to five years; pursue field extension and exploration & appraisal opportunities; maximise the value by commercialising Oil and gas production streams and focus on cost optimised developments targeting Unit Technical Cost in the range of between $2 and $10 per barrel of oil equivalent.” On his own part, Felix Amieyeofori, Managing Director/Chief Executive Officer, Energia Limited, while speaking with Orient Energy Review, disclosed that for marginal field operators to overcome their funding challenges, they need to adopt a viable structure to attract financing partners, including contractor financing models and must also look for quick win through Early Production Facilities (EPF). According to him, funding challenges for low reserves volumes requires operators pooling facilities together into a cluster operation, while he advised that to mitigate foreign exchange risks, marginal field operators should negotiate flexible currency split with service providers, and also identify projects and activities that can be funded with 100 per cent local currency. In addition, Amieyeofori said, “In a case of inability to attract financing, marginal oil field must undertake the following: generate an articulate Information Memorandum (IM) consisting 16 Orient Energy Review September 2016
of: detailed technical development of the field; revenue status of the operator; proposed development of the field; phase by phase development of the field; re-entry of existing wells; drilling of new wells; flow of hydrocarbon either by existing pipelines or trucking. “Ensure professional corporate governance and quality management. Avoid a family laden organization. Strong technical expertise and terrain experience. This gives lots of comfort to financiers to know that the company has the capacity to execute/operate the field with emphasis on track record, asset specific knowledge, regulator/host community engagement.” He further stated that the operators should adopt strong internal control mechanism for strong and effective risk management framework and put in place a robust and secured Information Technology infrastructure (IT) to support the company in meeting its strategic objectives. The marginal oil fields programme was an offshoot of the Lease Administration, which was originally structured in favour of International Oil Companies, IOC, making access to the assets by indigenous/independent operators very difficult. IOCs, after receiving exploration licenses, left significant oil and gas resources unappraised and unproduced many years after discovery for several reasons.
“Marginal field operators must assess the reserves and resources and upside with the marginal field coordinates and secure credible independent Competent Persons Report; assess funding options and fit to the development plan, and put in place fit-for-purpose and experienced integrated field. The Petroleum (Amendment) Decree No. 23 of 1996 was later enacted to award such fields as ‘marginal’ to indigenous companies, while the guidelines for the Farm-out and operation of marginal fields were prepared in 2001. The aim of the programme, which formed the major thrusts of the Farmin Act No 23 of 1996, was to promote indigenous participation and build indigenous capacity in the upstream sector; provide alternative sources of funding for exploitation of hydrocarbon resources and to increase production capacity through accelerated development of discovered reserves.
Amieyeofori
COVER STORY It also aimed to increase the oil and gas reserves base through aggressive exploration; encourage capital inflow; gainfully engage the pool of the high-level compestent Nigerians in the petroleum industry and create employment opportunity for Nigerians.
personnel and skills. “Presently, investment in marginal fields comes from JV, Debt and Equity financing, or a combination of these. There should be more effective mutual integration between operators and the local financial sector.
Commenting on the prospects of the marginal oil field in Nigeria, Professor Chijioke Nwaozuzu, a downstream petroleum sector expert and Director, Emerald Energy Institute, University of Port Harcourt, disclosed that the future of marginal fields’ development still looks very promising despite the various challenges.
“Operators can form Special Purpose Vehicles (SPV’s) and tap into the international investment market as well. They can also attract more capital expenditure (CAPEX) investment by aggregating or co-mingling proximal fields’ reserves in order to achieve critical volumes.”
On the technical side, he maintained that operators would have to develop more effective reservoir management systems and synergistic facilities utilization in order to boost mutual profitability.
On the role of government in the success of the programme, Nwaozuzu said, “Government has a crucial role to play in enhancing the profitability of these ventures. Government can revise the fiscal terms and make them more investor- friendly; suspend royalty payment for at least three years from commencement of production to eliminate front-loading of royalty payments and thereafter apply the sliding- scale method to royalty payments based on productivity; and provide tax holiday of three years by suspending VAT, import fees, education tax, etc.
He said, “Energy & Petroleum Academic Centres in the country should be strengthened through funding by local industry players. This should enhance human capacity development needed in the industry and reduce the strong dependence on expensive expatriate
“The CBN can support the local banks in reviewing monetary terms for energy projects, and government can also establish Energy Bank, as separate from Bank of Industry, to enable local energy companies gain access to funds at globally competitive rates.”
However, going forward, he said there are a number of financial, technical initiatives and government policies that will aid the process of marginal fields’ development, adding that the most important of these is the passage of the PIB.
17 Orient Energy Review September 2016
In spite of the various setbacks, analysts are still hopeful that putting the right machinery in place and with the right policies, the marginal field programme can achieve its original objectives and make meaningful contribution to growing Nigeria’s oil and gas reserves. Also, marginal field operators are beginning to show commitment to addressing the various challenges confronting them and have commenced moves to overcome their initial slowdown. Today, a number of them are entering into strategic partnership and are already recording slight improvements in their output. If this trend continues and with the support from the Federal Government, these marginal operators would in the near future, become the major driver of Nigeria’s oil and gas sector. “Ensure professional corporate governance and quality management. Avoid a family laden organization. Strong technical expertise and terrain experience. This gives lots of comfort to financiers to know that the company has the capacity to execute/ operate the field with emphasis on track record, asset specific knowledge, regulator/host community engagement.”
INTERVIEW
Government Needs a Multi-Dimensional Approach to Curb Pipeline Vandalism -Emeka Okwuosa In this exclusive interview by our Orient Energy Review (OER) correspondent, Emeka Okwuosa, MD/ CEO of Oilserv Ltd., avails the sector steps to adopt to curb the menace of pipeline vandalism, a challenge currently rattling the oil and gas industry especially in the Niger Delta region. Excerpt! km of pipelines for instance, are you going to put armies and polices in every metre? That is not feasible; it requires again engaging the people around there which are the host communities because they are the first and primary line of defense for the pipelines. Somebody has to know that something is going to happen and make report appropriately. Will that solve the problem? That is part of the solution. It has to be an integrated solution. If you put drones, it can work but what it means is that when you have detected any abuse by drone you will still intervene, meaning an integrated system is vital. In view of the recent attacks by militants, what have you put in place to secure your investments? Pipelines are built based on what you call engineering codes and these codes determine the way you scope the project, the way you put the specifications on the projects done. Our job is to build according to the specification of the clients. There are many ways to secure a pipeline but the most efficient way is engagement of stakeholders particularly government with various entities including communities and all manners of people that are impacted or have direct impact on the pipelines. Also, there are various forms of technologies: the fibre optic detection system but that has not been installed yet because it is not part of the original scope. But anybody tampering with a gas pipeline is a saboteur because you don’t tamper with gas pipeline to steal the gas unlike oil. So the incidence of pipeline vandalism is not normal, and 19 Orient Energy Review September 2016
whenever it happens, it means that whoever has gone all the way to do those cannot easily be stopped as it is purely an act of sabotage. So how do you think government can find solution to that? The government has to set up a system to guide the pipelines because they are strategic national assets. Everywhere in the world you guide your pipelines, either using technology or engaging host communities including military outfits. In other words, you are supporting the government to create separate security outfits to guide against vandalism of pipelines? I’m not saying I support it. I don’t have the details but what I’m saying in general is that you have to do various combinations of methods and modalities. You cannot restrict it to putting police around there. If you have 500
So what is the best method to stop vandalism in your opinion? It depends on the pipeline, the area; the communities and so on. It depends on many things but like I said, it is a combination of many factors and it is the only when you take a specific pipeline that you can address such issues clearly and be able to put a formula in place. It is not easy to say this is the way forward. Being able to work together with the communities and the individuals around the area of that pipeline, being able also to build the pipelines in conformity with the right codes in a way that makes it difficult for anybody to get in there like burring the pipeline which is what we do. The other one is being able to deploy technology such as a detector like fibre optic, track system or any method along the line, or you can put drones to monitor, and then finally you have to put an intervention system, which means when you have detected it;
INTERVIEW what next are you going to do? You need human beings to go there and take actions which means it has to be well organized; then finally you have your legal system that when you catch somebody you prosecute that person, and not let the system filter in and nothing happens. That encourages negative actions going forward. It is quite complex anyway but it can be solved. Sir, let’s talk about your incursion into oil and gas exploration, the upstream. Now that you have downward trend in the oil and gas industry, how are you guys moving on in terms of explorative drilling and similar things? When you look at exploration and production, it is part of the whole package. We started with construction work, and expanded it to EPC. Oilserv is the first indigenous company to go fully into engineering, procurement and production, and with that we have been able to consolidate our activities and develop capacity. We later moved on into gas development, exploration and production. The whole idea is to have a balanced portfolio and be able to de-risk your business. Now oil price is low but people have to understand that oil price never remain permanently low or high. It is a cycle that has been going on for the past 30 years, and for those who fully understand the oil industry, you have to fully read the cycle to know when to invest. The oil price is low but the reality is that this is the best time to invest because you can price lower; the only challenge is that you may not find the money to invest, so it is a balance. So we have gone into exploration and production to be able to gauge. Right now, exploration is more difficult as it is sometimes difficult going out there to drill, spending money in exploration with the low oil price but you can still do that if you can get the services at reduced cost. You can get into production assets where you can optimize production, reduce your cost and be able to produce at a cost that is less than $30 per barrel. So you have a margin you can sustain until the price goes up. The profit end of the industry seems to have shifted to the downstream with the drop in oil price; given your stake in the industry, do you have any plan to go into explore that sub-sector? Secondly, looking at your corporate profile, you have diversified into agriculture, exploration and production, a whole food chain. How do you integrate all of them into a single business strategy? I mentioned here that we have moved into other areas in order to de-risk our business. Do not forget that Oilserv started business in 1995, so we have come quite a long way. We are 21 years old in business and you can see that we have matured. 21 years is enough not only for you to strategies but tried the strategies and be able to fine- tune them. We have done this and are continuously to integrating to adapt to prevailing
20 Orient Energy Review September 2016
circumstances. As we speak, we are going through a major strategy section to reposition ourselves relative to what we have done and been able to determine which areas to pay more attention to. In the medium and long term strategies, planning, and understanding the industry. It is a matter of not being a flight by night industry that is not just coming into business and trading and all that. So if you look at refining and refinery for instance, that is a different business, we do not intend to go into yet. The only way we can get into refining will be to do modular refinery in order to utilize our productive inputs going forward if we do not want to evacuate the crude or turn same into refined products for use within the country. We have not decided to go into that yet as we must create the right value with the right strategy to go into refining. A lot of operators are actually weighed down by huge debt and almost every PETAN member is complaining that it is being owed. How are you coping with this situation and what strategy do you think can get the industry out of this situation? We are affected one way or the other. We have an industry wide downturn with low activities and low price regime which is affecting everybody. It is also creating a challenge for government to cope with issues of funding knowing full well that oil is the major driver of our economy, spurring economic growth. Oil still constitutes more than 60 percent of our foreign exchange revenue as a country and you realize that a lot of things used in Nigeria, you buy overseas. So to fund that, you need to make sure that you have enough money from sale of crude, knowing that a gap there which makes it more difficult for government to fund its Joint Ventures (JV) commitments. Do not forget that some of these commitments are outdated, some dating back to between 5 and 8 years ago. This is actually a problem, and I believe strongly that like the honorable minister of state, (Petroleum) stated times and again recently; work is in progress to address the issue. They are looking at alternative means of funding. They are looking at the possibility of assessing funds from the Middle East- China and other sources. Well, government is in a better position to decide. I am a private business man and am not but I believe they know what the problem is and they are dealing with it as far as it affects PETAN members as well as Oilserv. However, we all know this problem will not last forever because if you look at the oil price regime, it appears but it doesn’t mean it will hit the $100 per barrel mark. It means you are going to have that contour coming up slowly. So overtime it requires planning and adaptation and what is important is that oil producers that need our services are still in business. As long as they are in business, they need our services one way or the other. It is just a matter of rationalizing.
Some of your members have expressed frustration in accessing the Nigerian Content Fund. What is the position of the fund today? This is a very good question and I am glad you raised it. The National Content Fund is a major issue because some of us in PETAN who fought so hard with other members to set up the NCMD based on the Local Content Act are not happy that some of the aims are not being achieved. It may be too early to judge but some of the things we’ve seen so far need to change. We are slowly building fund that is being taken away. The purpose of that fund is for capacity building but how the fund is being disbursed today is not clear to any of us until we all come together and looks at it and make sure that this fund is being disbursed properly in order to build capacity, and capacity is not for one person, it is for the nation. We have to make sure that the oil and gas industry mileage rob off on the economy of this country and the only way we can do this is to continue to build capacity, provide jobs, and grow the Nigerian participation in the production and distribution of oil and gas services. I have not seen much effort in this direction today.
What are stakeholders doing to correct these anomalies? It is still early and don’t forget this law has just been in place for only 4 or 5 years. In practice, we are still coming to terms with it. We are taking it up as an organization to address it with NCDMB and where that does not yield results, we take it up the more as NCDMB reports to somebody and there is a process but we have to make sure that NCDMB manages the situation in a way as to address the reason for setting it up. How true is it that some of PETAN members have accessed this fund? Let me tell you, it is like saying that out of a million of funds, one person accesses one cent; that is not access as far as I’m concern, it is not more than 1 or two companies that have accessed the fund at a very low level. By level, I mean complete low level that for a company like OILSERV, that fund cannot do a single project for us, so we cannot even go for it because it makes no sense to us.
INTERVIEW Sir, we have talked a lot about pipeline security and the other side of it is pipeline integrity. Some of these pipelines have been laid for decades. What is your assessment of the integrity of some of them? It depends on the pipeline. Don’t forget that when you talk of pipelines you talk of crude oil pipelines, product pipelines and these are owned by different entities. Crude oil pipelines are still owned by the IOCs and local producers. The codes are very clear; we know the codes and we know the standards and which you are oblige to maintain. To assure integrity you have to build in conformity to the code. Secondly you have to do the routine maintenance like digging and what have you. You also need to have your catholic protection going to stop corrosion from happening. With this, the pipeline can last you more than 20 – 30 years. Crude oil producers more or less keep to this. When you get to gas pipelines they are owned by different entities, mostly by NGC and other entities. They are also well maintained. Where we have a gap is the product pipelines. For years now, we have heard claims that product pipelines are
talking about the executive and the legislature, that is purely in my own opinion a huge joke because every year, we hear promises that this year is the last year and it went on for 4 good years, but there was no commitment to do it. I have stated it clearly in few interviews that if Nigeria needs to move forward, we have to define the operation of the regime of oil and gas because investors cannot invest on the bases of an unknown system or a system that has a potential to make a change that can impact on their investment. When that is the problem, you discover that companies, entities take the back seat, so it is a major challenge. I believe the present administration is serious about making a move. Few things have convinced me that they are serious but how they are going to go about it is what I don’t know. Lest we forget, this is not just about the executive arm only; the major culprits are the Senate and the House of Reps. So if the legisla-
manage all these things to make sure that the host community which it is meant for actually gets it? You talked about how pipelines situated in host communities are better protected. What is Oilserv doing to these communities? How have you been able to manage the expectations of the communities whereby you don’t have issues with them? We have a process and that process has been going on for years. We are the only oil servicing company that was operating fully in repairs and rehabilitation of pipelines between 2001 and 2008 when militancy was at its height especially from 2004 to 2007. We managed to operate in the middle of the swamp ranging from the western swamp all the way to the eastern swamp from Onne River to Bonny. It is very simple; it is a matter of understanding what the issues are and having a problem strategy in place to address them and being able to engage the community in a sustainable manner. If you deal with them, agree on anything and you do them, when you come back, they will receive you. But when they see you as someone who is taking advantage of them, then you have a problem. It has to be a consistent and sustainable relationship. This is from the service point of view. But you cannot solve the entire problems doing it that way.It requires the engagement of the oil and gas producers because after we have worked and gone, they will remain there to produce oil. Government has a lot to do with it, how they organize communities, how they make sure that communities become stakeholders in everything government is doing. Most of the reasons you have these problems is when the communities are shot out of normal processes, then they revert to where they can get something. In the face of all these, what do you see as the way forward for the
Emeka Okwuosa (R) addressing Engr. Saidu, GED NNPC and also representative of the Minister of Petroleum Resources; at his booth at OTC 2016. being maintained but they are not serviceable. Some of them have not been dug for years; the tank farms are not working so there is a gap. This is where PPMC have to take the blame. You cannot be the owner of an asset without taking care of it and you expect the asset to remain valuable. This is why we still have problems with distribution of products in Nigeria today. You cannot put diesel or petrol in pipeline in Port Harcourt and expect it to get to Yola. It means we have to continue moving it with trucks which is not feasible. The PIB has been presented to the National Assembly. However it has been stepped down by the same apprehension that follows previous moves. What should we do next? Clearly the immediate past administration did not handle the PIB well, and you are
21 Orient Energy Review September 2016
ture does not go ahead and do its work, the executive cannot do anything. From what I heard yesterday in the briefing of the Chairman, House Committee on Petroleum (Upstream), and work is in progress and I know they are working on it. What we hope for is that sooner than later before the end of 2016, they will come up with the first phase of that law. I think they have broken it down into sections, that makes sense but there have to be a strategy and a clear target of where we are heading to. The fund you are talking about is part of the entire sys tem, so it cannot be treated in isolation. You have to look at the whole gamut of the issue because beyond the host community fund there are other issues there. Clearly host community fund has to be looked into but it has to be put into perspective with various other schemes like NDDC which has a lot of things going on there. How do we
oil and gas industry? The way forward is to continue to build local and indigenous capacity in a very structured manner looking at long term plans. Secondly, being able to continue to invest in the oil and gas industry regardless of the price regime is vital. Finally, government must understand that it has no business owning assets in oil and gas; government’s duty is to regulate, tax, and then utilize the proceeds of the tax for the development of the country. Each time you allow government to claim the assets either in JV or whatever, it does not work because they are not structured to manage it. Going forward, you have to realize that the government of America does not own any oil assets, so far as you collect your tax and allow the private individual to do their business they will create capacity and collect more money in tax
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Republic of Congo: Petroleum Code and License Round Update at 23rd Africa Oil Week 2016
Cape Town, South Africa 31st October - 4th November 2016 With over 30 Government/State Presentations | 130+ Speakers | 100+ Exhibitors 1000+ Senior Executives | Africa Exploration Zone | Workshops Social Evenings and Dinners | Traditional Sunset BBQ on the Beach Total, Tullow Oil, ExxonMobil, BP plc, Ministry of Energy and Mineral Development - Uganda, Oando plc, Petrosen, Pluspetrol, Eni Spa, Maersk Oil, FirstEnergy Capital, Ministry of Petroleum, Energy & Mines - Mauritania, Agence de Gestion et de Coopération entre la Guinée-Bissau et le Sénégal, Ministry of Mines - Ethiopia, PetroSA, Impact Oil & Gas, U.S. Department of State, Galp Energia, Richmond Energy Partners, SacOil Holdings, Lekoil, Shoreline Natural Resources, Moni Pulo Ltd, Rhino Resources, Petroleum Agency SA, JOGMEC, Velocys, Kalahari GeoEnergy, United Hydrocarbon International, Canadian Overseas Petroleum, FAR Limited, Shell, NVentures, Kosmos Energy, Mirabaud Securities, Stellar Energy Advisors, Moyes & Co, Orient Energy Review, Ghana Oil & Gas Service Providers Association, Gulf Reservoir Modeling Technology, University of the Witwatersrand, Danvic Petroleum International Corp, International Energy Solutions, Preng & Associates, Sound Energy, Monetizing Gas Africa, Petroleum Training and Education Fund (PetroFund), Allen & Overy, Engen, Africa Fortesa Corp, ION E&P Advisors, Geological Bureau (Union des Comoros), Ministry of Energy and Mines Eritrea, Ambit Energy Corporation, Woodside Energy, OMV, South African National Energy Association, Tower Resources, CGG, Makerere University, ACAS-Law, Ophir Energy plc, Manokore Attorneys, Fugro NV, CMS Cameron Mckenna, Svenska Petroleum Exploration, Africa Oil+Gas Report, Mitsui & Co, Ministry of Mines & Energy - Namibia, Petrolin Group, Instituto Nacional de Petróleo Moçambique, ONHYM - Morocco, Ministry of Energy and Petroleum - Kenya, Discover Exploration, RPS Energy, NewAge, PGS, Ministry of Hydrocarbons - Republic of the Congo, Ministry to Presidency of Mines & Petroleum - Madagascar, NAMCOR, Seplat Petroleum Development Company, Aker Solutions, Noble Energy, Cairn Energy, Rystad Energy, Veolia, Africa Energy Corp, Eland Oil & Gas, Regalis Petroleum, AziNam, Empresa de Nacional de Hidrocarbonetos de Moçambique, Combifloat, AAPG Datapages, Spectrum Geo, Sogenal Oil & Gas
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PHOTO GALERRY
Africa Small & Marginal Oil Fields Development Conference 2016
24 Orient Energy Review September 2016
PHOTO GALERRY
25 Orient Energy Review September 2016
GHANA REPORT
Atuabo Gas Processing Plant Undergoes Third Mandatory Maintenance
T
he Ghana National Gas Company Limited is undergoing ten days maintenance of its Atuabo Gas Processing Plant at Atuabo in the Ellembelle district in the Western Region of the country. The Plant and its allied gas infrastructure are to be shut down during the maintenance period. This mandatory maintenance is the third time since lean gas and associated liquids production begun and is expected to last for approximately ten calendar days.
In a statement signed by Alfred Ogbamey, the Corporate Communication’s Manager of the company, “the plant has been in operation for more than 12,000 hours since pre-commissioning and commissioning activities started in 2014,” the statement read. “The mandatory outage is required by original equipment manufacturers and vendors for maintenance of certain critical components of the gas processing plant on periodic basis and to facilitate warranty assurance on the installed equipment,” it added. According to the gas company, the Vol-
ta River Authority (VRA), the primary downstream lean gas off-taker, and other product off-takers, as well as the upstream gas supplier, Tullow Ghana Limited, have been informed of the planned maintenance. The last time a similar exercise was undertaken by Ghana Gas at the Atuabo Gas Processing Plant was on January 15, 2016 and it lasted for fourteen calendar days.
Ghana Fuel Consumers to Pay More as Fuel Prices Go Up -COPECGH “The 1st pricing window for the month of September 2016 is set to commence from the 1st of September and there are very strong indications consumers will be paying more for fuel in the coming window”, says the Chamber of Petroleum Consumers Ghana (COPECGH). The consumer group hinted that prices across the various Oil Marketing Companies (OMCs) went down by between 2-4% during the current fuel pricing regime and has over the past one month seen some cumulative reductions of between 3-6% across most service stations. In a press release signed by its Executive Secretary, Duncan Amoah, COPECGH noted that Radiance Oil continues to dispense the lowest prices for PMS or petrol at 3.425/litre and also sell the cheapest diesel on the market at 3.360/litre. “Current world market prices continue to hover around $47/barrel up from previous levels of around $42/barrel as at the beginning of the current pricing window,” the release read. 27 Orient Energy Review September 2016
“The cedi has over the past two weeks also recorded some losses to close trading at 3.98/dollar from previous trading at the start of the current window at 3.89/dollar.” “Figures from the various Bulk Distribution Companies (BDCs)point to an imminent upward adjustment in pump by between 4-7% across most BDCs as some BDCs that were charging 1.48/ litre before taxes have moved to 1.71/ litre and likely to result in pump prices going up by same margins,” the release added. COPECGH noted that the downstream price deregulation programme continues to be closely monitored and looks likely to roll to the second phase which would allow the various oil marketing companies to charge different prices at their various stations across the country “though we understand the National Petroleum Authority is asking for it to be put on hold,” it says “This second phase, when rolled out, has the tendency to cause a lot of distress and confusion as it will now completely leave the consumer to pay
whatever rates the various outlets across the regions decide to charge and must not be encouraged as cost of products in places where prices will be higher, will most likely affect cost of living,” the chamber argues The current uniform pricing policy serves the interests of a unified state such as Ghana and will be dangerous if tampered with. Transport operators have served notice that this will lead to charging of different transport fares at different parts of the country depending on how cheap or expensive pump prices for those areas are and will eventually lead not only to confusion but arbitrariness and eventual fleecing. “We are, by this notice, calling for the shelving of any such moves as it will not only violate the laws of the land but also lead to complete arbitrariness in the system,” COPECGH warned.
GHANA REPORT
Ghana Could Be Africa’s Number Four Oil Producer By 2020 - Report
G
hana could become the fourth biggest oil producer in sub-Saharan Africa by 2020 once two new offshore fields come on stream, to push total output above 240,000 barrels per day (bpd), pan-African bank Ecobank said recently.
bpd. The Jubilee field, which started producing oil in 2010 and is operated by British oil company Tullow, could bounce back to production of around 115,000 bpd once it solves technical problems with its production vessel.
The West African country produces around 103,000 bpd ranking it ninth, far behind leaders Nigeria and Angola, which produce an average of 1.867 million bpd and 1.754 million bpd respectively, said the Ecobank research report. Ghana’s Tweneboa-Enyenra-Ntomme (TEN) field came on stream in August and is expected to increase output to a peak of around 80,000
At the same time, the Sankofa field operated by Italian company ENI is due to open in August 2017 and should produce around 30,000 bpd, while U.S. independent Kosmos Energy plans to connect the Mahogany-Teak-Akasa (MTA) field to the Jubilee oil production ship. ‘Based on existing fields and field development plans Ghana crude oil output is estimated to be over 240,000 bpd by 2019. This
28 Orient Energy Review September 2016
could potentially make Ghana the fourth largest oil producer in Sub Saharan Africa by 2020,’ the report said. Production costs for Ghana’s oil projects, which are all in deep water, mean that the crude remains viable if global prices fall to $40 per barrel, allowing it to remain attractive to investors in the event of price fluctuations, it said. Gas from TEN, Sankofa and MTA could eliminate the need for Ghana to import gas from Nigeria through the West African Gas Pipeline Company, it said. Source: Reuters
LOGISTICS/ MARITIME
FG Orders Fresh Probe of NIMASA, NPA, Others
Transport Minister, Rotimi Amaechi
M
inister of Transport, Rotimi Amaechi has ordered fresh audit of the Nigerian Maritime Administration and Safety Agency (NIMASA) and the Nigerian Ports Authority (NPA). The minister expressed worry at the level of decay and corruption in NIMASA and revealed that auditors would be engaged to audit all agencies under the ministry. “We are in the process of appointing an auditor to audit NIMASA, NPA and other agencies in the Ministry of Transportation. Maybe after the auditor’s work, we would have a clearer
29 Orient Energy Review September 2016
picture as to where all the billions went,” he said. The essence of the audit and the committee to be set up, he said, “is to find out if NIMASA at any point discharged its core responsibilities beyond collection of revenues. And all the revenues NIMASA has been collecting, where did it go?”
Dakuku Peterside said for NIMASA to be efficient and operate optimally, the current structure of the agency must be changed.
“We also set up your committee to reposition NIMASA and make it relevant to grow the economy. I will study the report and call a management meeting of the ministry and take a decision on the way forward,” Amaechi assured.
The committee proposed a new organogram to NIMASA where more powers will be given to the zones were activities take place instead of having concentration of personnel at NIMASA head offices,” Peterside added.
Director General of NIMASA,
“We recommend that NIMASA devolves more powers to the zones. We also recommended some drastic changes in the modus operandi of NIMASA.
LOCAL CONTENT
President Buhari Appoints New Executive Secretary For NCDMB …Approves new heads for PEF, BPE, others
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resident Muhammadu Buhari has approved the appointment of Engineer Simbi Kesiye Wabote as the substantive Executive Secretary of the Nigerian Content Development and Monitoring Board, NCDMB. His appointment, alongside 12 other chief executives for Federal agencies was announced in a statement by the Director of Press in the Office of the Secretary to the Government of the Federation (SGF), Mr. Bolaji Adebiyi. Before his appointment, Wabote, who hails from Brass in Bayelsa State, South-South Nigeria was the General Manager, Business and Government Relations, Shell Petroleum Development Company Nigeria Limited and member of the company’s Board. Before this, he served as the Local Content Manager, Shell C&P Global and had the responsibility of developing Local Content Strategy for Royal Dutch Shell (RDS) Upstream, and Downstream operations in addition to ensuring implementation for business outcomes. His job functions also included development of local procurement strategy, local and international partnership development strategies, cross-functional team management and the alignment of global supply chains with local supply chains in countries like Nigeria, Gabon, Brunei, Oman, Kazakhstan, Australia, Iraq, Qatar, Jordan, Americas, USA and new frontier countries for Shell. He was appointed to the role after a creditable performance as the General Manager, Nigerian Content Development, Shell Nigeria. An experienced Oil and Gas professional with proven track record in Engineering, Supply Chain, Stakeholders management, Local Business Development and General Management, Wabote has over 20 years top-flight experience in International, Multinational and National business environment. He is also a Change Management
Agent with proven competence to manage change and implement strategic business models. A graduate of Civil Engineering and holder of a Master of Science Degree in Corporate Governance from Leeds Metropolitan University, United Kingdom, Wabote managed lots of major Civil Projects in the Oil and Gas Industry and including the External Affairs portfolio for SPDC. He has also supervised the construction of roads and various drilling locations for Shell, served as Head of Civil Engineering East for SPDC, Project Manager for the Development of Osubi Airstrip Development, National Assembly Relations Adviser for Shell and Managed the development of Community/ Nigeria Contractors to provide services to the Oil and Gas Industry. He takes over from, Mr. Patrick Daziba Obah - the Director of Planning, Research and Statistics - who functioned as the Acting Executive Secretary following the removal of Mr. Denzil Amagbe Kentebe in February this year. Other appointees include Mr. Joseph Ari who is the new Director-General, Industrial Training Fund (ITF), Dr. Isa Ali Ibrahim (Pantami) as Director-General of the National Information Technology Development Agency (NITDA) and Aboloma Osita Anthony, the new Director-General of the Standard Organization of Nigeria (SON). Also appointed as Director-General of the Bureau of Public Procurement (BPP) is Mamman Amadu; Pension Transitional Arrangement Directorate (PTAD) has Barrister Sharon Ikeazor as Executive Secretary, New Partnership for Africa’s Development (NE
31 Orient Energy Review September 2016
PAD) National Coordinator/CEO has Princess Akodundo Gloria, Petroleum Equalization Fund (PEF) has a new Executive Secretary in Alhaji Ahmed Bobboi, while the Oil & Gas Free Zone Authority has Umana Okon Umana as Managing Director. Others are Sa’adiya Faruq as Federal Commissioner for the National Commission for Refugees, Migrant and Internally Displaced Persons, Nigeria Railway Corporation (NRC) new Chairman is Engineer Usman Abubakar, Petroleum Technology Development Fund (PTDF) has Dr. Bello Aliyu Gusau as the Executive Secretary while Yewande Sadiku is the Executive Secretary of the Nigeria Investment Promotion Commission (NIPC).
LOCAL CONTENT
LOCAL CONTENT IN ICT: Operator Wants FG To Monitor Compliance ..Says lack of govt patronage killing industry
Director-General of NITDA, Dr. Vincent Olatunji, -(PHOTOS: technologytimes.ng)
T
he Federal Government (FG) has been enjoined to adequately monitor compliance with local content directives in the Information and Communications Technology (ICT) sector. Making this appeal was the Managing Director of Beta Computers, Will Anyaegbunam, when his firm played host to the Acting Director-General of the National Information Technology Development Agency (NITDA), Dr. Vincent Olatunji and his team in Lagos. Anyaegbulum, who lamented that lack of government patronage for locally made goods, especially in the ICT was killing the industry, stressed that unless the FG monitors and implements local content policy in the sector, Nigeria might continue to be a consuming nation in the 21st century knowledge economy. Anyaegbulum, whose firm manufacturers SpeedStar Computers, noted that Nigeria’s quest to use IT to significantly increase its GDP in these days of dwindling oil revenues may not be achieved soon if the FG does not take urgent steps to ensure compliance of its agencies with the local content policy in IT that has been in existence for many years now. He stressed that local PC assemblers needed to be encouraged and supported by the government so that they can increase their capacity and generate employment in the whole value chain of PC manufacture up to content development and customer support. The visit of the Ag. DG was part of the renewed engagement process of the government to re-connect with the stakeholders in the Nigerian information technology ecosystem to grow the digital economy.
It would be recalled that the drive to encourage and support local manufacturers of computers started in 2002 when the former president, Chief Olusegun Obasanjo, through the office of the secretary of the Government, issued a circular dated 7th of March, 2002, to all Ministries, Departments and Agencies, that only locally manufactured computers, certified to be of acceptable quality standard should be patronized by all Federal establishments. This directive was followed up during the last government with the establishment of the Office for Nigerian Content in Information Technology (ONC), to drive this process deeper to ensure increased implementation, monitoring and compliance. In his narrative of how Beta Computers has been assembling SpeedStar PCs even before government started recognizing local hardware years back, he said that, “Government cannot be developing local capacity and be using foreign brands in their offices. We need to be enabled and supported to make Nigeria a Hub of PC manufacturing in the West African sub region and capable of generating significant foreign exchange earnings for the country. “NITDA is a development agency. The local content policy has been there but monitoring and implementation remain the issue. If Nigerian PC manufacturers are not developing, I am sure as DG, you will feel that the mandate of NITDA as a development agency is not bean realized. “No local PC assemblers in the country can claim enough patronage from the government. Lack of government patronage is
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killing local capacity. I do not see the reason why government agencies should be using foreign brands in the office. It amounts to gross violation of its own policy on local content in IT. While commending NITDA DG for supporting the formation of Certified Computer Manufacturers of Nigeria (CCMON), he said that the group looks forward to the Office of the Nigerian Content on IT, ONC, for a more robust implementation of policy.Noting that Beta Computers assembling plant has the capacity to assemble no fewer than 200 PCs per day, he said that, “We have a renewed expectation from NITDA” In his remarks, the NITDA DG, assured of government commitment to support the growth of local capacity in IT.“We are here to reconnect with the stakeholders. It is a multi-stakeholders approach. We are here to see what you are doing, hear from you and see how best we can work together to grow the sector. “We are already putting in place structures that will make IT work. I just told our management during our meeting that nobody should bring foreign PCs brands in the office again. I have written a letter to the Vice President on why government should not buy foreign brands. “I am discussing with the government on this. We will build local capacity to position Nigeria as the hub of IT in Africa. We are working with the IT hubs”, the Acting NITDA DG assured. As part of growing the Nigerian IT sector, Olatunji said that NITDA will use the GITEX trade exhibition to tell the Nigerian story to the world by showcasing home grown IT products. According to him, NITDA at the GITEX will tell the whole world that the story is changing, adding that it is time to promote IT Nigeria and tell the whole world that the sector is growing. *Guardian
LOCAL CONTENT
Telcos Harp On Local Content to Address Imbalances in Telecom
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he Association of Telecommunications Companies of Nigeria (ATCON) said it is supporting the Nigerian Communications Commission (NCC) and Office for Nigeria Content Development in ICT (ONC) moves to galvanise stakeholders’ views towards addressing local content related issues in the industry. Mr. Olusola Teniola, president of ATCON expressed the Association support during Stakeholders Forum on Local Content Development in the Telecommunication Sector in Nigeria organised by the regulatory body in Ikeja, Lagos. Teniola said that ATCON’s support for the initiative was borne of the need to eliminate imbalances in the sector as some indices are skewed against the local investors. “The Association of Telecommunications Companies of Nigeria (ATCON) considered this initiative strategic and timely and for these two reasons it is happy to identify with the collaboration put together by Nigerian Communications Commission and Office for Nigeria Content Development in ICT to address Local Content Development in the telecommunications and ICT subsector,” he said.
Speaking on the philosophy of ‘Local Content Development in the Telecom and ICT Sector’, the ATCON President said, that all stakeholders should work towards correcting the imbalance in the international trade balance; restructure Nigerian ICT industry with a view to increase Nigeria participation in the value chain, and to stimulate growth and development in the manufacturing of some ICT products and services.
Local Content charged with the responsibility of making the ICT and Telecommunication sector less dependent on importation”. Giving the way forward, Teniola recommended for “a plan to comprehensively develop the ICT sector.”
“It is obvious that the structure of Nigeria Telecommunications and ICT sector is not really beneficial to Nigeria as a country in terms of foreign exchange earnings because most of the inputs in the sector are imported from the developed countries.
ATCON noted that since the inauguration of the Office of the Nigerian Content, there is little or no productive activity to drive the guidelines that were published. ATCON would like NCC and ONC to come up with short and long term plans. This plan would enable the entire ICT ecosystem to know the area where they can invest their ‘investible’ funds.
“If we really want to pursue Nigerian Local Content development vigorously as a nation with the intention of increasing its impact on our revenue we must devise a means of producing those inputs locally.
“NCC and ONC should as a matter of urgency implement the plan they have developed to increase the active participation of Nigerian Content in the value chain of telecommunications business in Nigeria.
“The liberalization of the sector has attracted some Large investments to the country but the country needs to develop the sector by making it less import dependent and to do this, the then Honourable Minister of Communication Technology, Dr Mrs Omobola Johnson created an office under NITDA called the office of the Nigeria
“NCC and ONC should pool resources together for the establishment of ICT Park. The ICT Park would be given the mandate to encourage the production of some ICT inputs like switches, router, mobile phone repairs/assembly etc.
33 Orient Energy Review September 2016
LOCAL CONTENT
Oil Crash Boosting Nigeria’s Local Services Industry, Ladol Boss Says T
he crash in oil prices is forcing offshore producers in Nigeria to turn to local service providers to save costs, according to the head of Ladol, one the West African nation’s largest logistics hubs for the industry. Ladol, which owns an industrial free zone and shipyard opposite the main port in Lagos, Nigeria’s biggest city, has seen more interest from international oil companies that have traditionally opted to repair rigs and vessels in places as far away as Singapore, according to Amy Jadesimi, its chief executive officer. It is already used as the main hub for Yinka Folawiyo Petroleum Co. Ltd., a Nigerian company that operates the Aje field off Lagos’s coast, she said. “There’s no way IOCs can afford to do business in Nigeria unless they get their offshore support from Lagos,” Jadesimi, a 41-year-old Stanford graduate who used to work as a mergers and acquisitions banker at Goldman Sachs Group Inc., said in an interview in New York on Sept. 21. “Return on investment in Nigeria is half what it is in Brazil, half what it is in the North
Sea. That’s because the cost is too high. What will unlock more investment is producers lowering their cost of doing business.” Oil Investment Nigeria’s government is trying to boost investment in its oil industry, including its offshore fields, which have largely been immune to the militant attacks on land-based export terminals and pipelines that cut overall production to a near-three decade low of 1.4 million barrels a day in August. Deep-water fields first began operations about 15 years ago and now account for more than half the country’s output. Ladol is in talks with several operators in Nigeria and Tullow Oil Plc, which runs Ghana’s Jubilee field, Jadesimi said. “One IOC in Nigeria recently met with us and they’ve started the process of moving to Ladol,” she said. “They’re going to save $2 billion in the next three years. We’re already talking to the Ghanaians, as Nigeria’s just next door to Ghana, so it would make the whole supply chain for them cheaper.”
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Jadesimi’s family owns about 80 percent of Ladol and has pumped $500 million into the business in the past decade, including money from loans and a sale of a 20 percent stake to investors in Nigeria, she said. It plans to invest the same amount in the next five years. “We are looking at raising capital internationally, both debt and equity,” she said. “We’d definitely consider a listing.” The company wants to build more infrastructures so that it can improve its logistics facilities and ship-building capacity. It is the only base in West Africa that can construct and repair floating oil rigs known as FPSOs, which are common in Nigeria and Ghana, according to Jadesimi. Early next year, it will finish construction of an FPSO owned by Total SA and which will be used to pump oil from Ejina, a field with a depth of 1.5 kilometers (0.9 miles) that the French company says will be able to produce 200,000 barrels a day by 2018. *Bloomberg
EXPLORATION/ DRILLING
Eni Successfully Restarts Exploration Activities In Tunisia The drilling of Laarich East-1 is part of Eni’s near field strategy, adopted to cope with the low oil price environment, and consisting in conducting exploration activities in the proximity of existing infrastructures with available spare capacity. In case of a discovery, this strategy allows for the optimization of development costs and competitive time to market for production start-up.
Eni operates in Tunisia in exploration and production activities since the early 60s, when the giant oil field El Borma, which is still operating today, was discovered. Eni’s equity production in the country is currently 11 thousand barrels of oil equivalent per day.
Seplat Gets a New Shareholder
E
ni has successfully resumed exploration activities onshore Tunisia in the Sahara desert, approx. 700 kms south of Tunis. Eni has just completed operations on the discovery well Laarich East-1, located in the MLD (Makhrouga-Laarich-Debbech) licence, where Eni owns a 50% stake and the Tunisian state company ETAP the remaining 50%. Laarich East-1, which is 5 kms away from the oil treatment centre in the concession, has reached the final depth of 4,111 meters discovering hydrocarbons in sandstone layers of Silurian and Ordovician age. Production tests revealed a delivery capacity of approx. 2,000 barrels of oil per day, confirming the upside potential of the concession identified through the recent three-dimensional geophysical survey carried out on the permit. The Laarich East-1 well, whose drilling started in June, has already been connected to production. In the meantime, exploration activities in Tunisia are continuing with the drilling of additional prospects, which have been already identified on 3D Seismic.
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The French explorer Maurelet Prom (M&P), is about to sell all its shares to Petramina, the Indonesian state hydrocarbon company. M&P holds 21.37% in Seplat, Africa’s largest home grown E&P Company. Petramina has already bought about a quarter (24.53%) of M&P’s shares and hopes to purchase the remaining after an M&P board meeting has approved the purchase. The 24.53% was sold by Pacifico, a fund controlled by Jean Francois Henin, chairman of M&P. That block trade was completed for €4.20 ($4.68) per share, plus a €0.50 ($0.56) earnout per share payable if, from January 1st 2017 (included) to December 31st2017 (included), the Brent price remains above $65 per barrel during all trading days within a period of ninety consecutive calendar days. “Should Maurel & Prom’s Board of Directors deliver a favourable reasoned advice on the offer, following the conclusions of the report from the independent expert, Petramina has undertaken to file, to the French market authority, a voluntary tender offer on (i) all Maurel & Prom shares under the same conditions as those offered to Pacifico and on (ii) 2019 and 2021 convertible bonds at their par value plus accrued interests”, M&P says in a release. “The schedule of the operation is expected to be completed by the end of 2016”. Petramina already owns producing property in Africa (it acquired ConocoPhillips’ interests in Algeria), but the M&P buy, of which Seplat is the largest pie, will be clearly the jewel in its African crown.
Seplat operates four acreages (OMLs 4, 38, 41, and 53) in Nigeria and has non- operating interests in two others (OPL 283 and OML 55). At optimum, those assets deliver around 88,000Barrels of oil per day (BOPD) and 300Million standard cubic feet of gas (MMscf/d) gross. These translate to 37,750BOPD and 135MMscf/d net to Seplat. Maurel & Prom‘s Board of Directors has unanimously indicated that it supports the offer and has the intention to recommend the shareholders to tender their shares. In accordance with applicable regulation, Maurel & Prom’s Board of Directors will deliver its definitive reasoned opinion on the tender offer once it has obtained the fairness opinion from Ledouble, the independent expert it has appointed.
EXPLORATION/ DRILLING
Clontarf Energy Provides Update On Negotiations For Deep Water Tano Basin Acreage
A
IM-listed Clontarf Energy has advised shareholders that, further to its announcement of 7th September 2016, Clontarf and its partners have been offered revised Tano Basin acreage coordinates by Ghanaian officials, which the Company has accepted in principle. Negotiations to formalise a revised Petroleum Agreement between the Company and Ghanaian officials will continue as agreement has yet to be reached on certain matters.
The Company’s directors look forward to providing shareholders with further updates, including specific geological information relating to the new acreage coordinates, as negotiations progress.
company held 60% Clontarf, 30% by Petrel Resources and 10% local Ghana interests. Source: Energypedia.com
At present no assurances can be given that these negotiations will lead to a successful outcome for the Company or that a formal agreement will be reached. Clontarf ’s Ghanaian affiliated company, Pan Andean Resources (Ghana), is a private Ghanaian
37 Orient Energy Review September 2016
Amah-Koffi, Ghana’s Minister of Petroleum
MINING/ SOLID MINERALS
Nigeria Loses 500,000 Jobs To Illegal Miners
N
igeria’s House of Representatives recently said that illegal mining of solid minerals had deprived the country of about 500,000 jobs. This followed a unanimous adoption of a motion moved by Rep. Solomon Maren. He also stressed the need to curb the activities of illegal miners in the country. The lawmaker said the mining and solid mineral sector was a multi-billion naira sector that was being undermined by the activities of illegal miners. He said, “These illegal miners are reducing Nigeria’s stake in solid minerals and other raw materials and also depriving the country of about 500,000 jobs for the teeming unemployed youths.” He said that the illegal miners do not contribute to the development of host communities as part of corporate social responsibility. Maren also noted that the activities of illegal miners had exposed host communities to hazardous environmental conditions. The House, in its resolution, urged the Federal Government to declare a state of emergency in the solid minerals sector to help diversify from oil to non-oil sources of revenue for the country. The House also mandated the Committee on Solid Minerals Development to investigate the activities of miners, their collaborators and sponsors as well as the extent of involvement of foreign and local firms and report back within four weeks.
Nigerian Govt Targets 7% GDP Contribution from Mining Federal Government T hehasNigerian announced plans to boost
earnings from mining sector with a view to increasing its GDP contribution from 0.33 per cent to seven per cent over the next 15 years. The Minister of Mines and Steel Development, Dr Kayode Fayemi, announced this at the National Council on Finance and Economic Development Conference in Abeokuta. The minister said it had become imperative for Nigeria to diversify its revenue sources in the light of the prevailing decline in the global price of crude oil. Fayemi expressed regrets that in spite of the huge mineral resources in the country, the mining sector had remained underdeveloped with a contribution level of 0.33 per cent to the GDP in 2015 He said, “The 0.33 per cent is a reversal from historically higher but still poor percentage levels of between four and five per cent in the 1960s to 1970s “Our policy goal, however, is to return to a contribution level of five to seven per cent in the next 10 to 15 years.” He recalled that Nigeria could boast of a very rich mining history as far back as 1902 that was once globally renowned. He said, “Up till 1960, Jos was the sixth largest producer of tin in the world while the eastern city of Enugu became known as coal city due to robust mining activities introduced under the British rule.”
38 Orient Energy Review September 2016
He listed the most promising mineral resources as gold, iron ore, barite, bitumen, tin, zinc, coal and limestone. Fayemi identified major challenges which had confronted the mining sector as poor policy choices, inadequate data required by investors and insufficient financing and fiscal incentives. Others according to him, are infrastructure deficit and poor partnership with critical stakeholders. He said that the Federal Government had marshalled plans to reposition the sector, to unlock its potentials. Fayemi disclosed that plans were underway to establish the Nigeria Solid Minerals Investment Fund in partnership with the private sector to enhance the financing of mining projects. The minister also announced a 13 per cent derivation sharing from mining revenue to states as part of efforts to promote “co-operative federalism”. “Our goal is to provide a better deal for the local communities where these minerals are located to ensure communal buy-in and benefits,” he said. Fayemi also announced plans to rebuild key institutions like the mining school in Jos to become fit for purpose and train the next generation of mining specialists, innovators and entrepreneurs. (NAN)
TECHNOLOGY
Flexible Software Licensing Model Offers New Opportunities for Smaller Engineering Companies Project Design Group Ltd benefits from AVEVA Client Activated License Management industry comes to terms with Asthethe“lower for longer” oil price
situation, a number of smaller Engineering, Procurement and Construction (EPC) contractors are emerging with specialism-focused offerings, or regionally-focused offerings for Oil & Gas facility owners and operators. By identifying innovative new practices to manage costs during periods of low activity with the ability to rapidly scale up operations during peak periods, smaller engineering firms are now able to either compete with or work alongside much larger contractors. To do this, smaller engineering companies must have access to enterprise technology and that has previously proven cost prohibitive. Conventional software licensing arrangements with a variety of initial and annual agreements, rentals, renewal dates and restrictions on product use that do not fit the changing business needs of smaller EPC contractors need to be deemphasized. Project Design Group Ltd (PDG), a multi-discipline engineering and project management consultancy firm, has addressed this issue by taking advantage of a flexible software licensing
model being offered by AVEVA which provides usage-based access to AVEVA’s full Integrated Engineering and Design suite, including engineering data management, 2D drawing and 3D modeling tools. This allows PDG to tightly control its licensing costs and still get maximum value from AVEVA’s software. “Historically, enterprise technology has always aided the larger, more established organizations.” Andrew Rhodes, Managing Director at Project Design Group Ltd explained. “Without a flexible licensing model, it would be difficult for PDG to access specialist engineering and design software due to the initial investment required,” he added. A flexible licensing model also enables a company to “cherry pick” the applications that are required for a specific project. Tools that are not being used can effectively be ‘shelved’ until required. This means the license is always optimized for what is actually being used. AVEVA now provides flexible licensing for its full suite of Integrated Engineering & Design tools, including market-leading technologies such as AVEVA Everything3D (AVEVA E3D).
Instead of fixed licenses, clients buy ‘tokens’ for their planned software licensing and ‘spend’ them exactly as their needs dictate. By introducing innovations such as flexible software licensing, the industry is responding to the need to optimize operations during the downturn in the oil & gas market. This is creating opportunities for smaller specialist firms to emerge and gain ground with EPC companies such as PDG competing for major engineering projects against much larger businesses. The lines between traditional tier 1 and tier 2 contractors are blurring and the result of increased competition is likely to drive down the cost of complex oil & gas projects. AVEVA software has powered the design and construction of some of the world’s most complex engineering projects over the last 50 years. AVEVA enables engineering contractors, Owner Operators and shipbuilders to work more safely, more efficiently and with less risk throughout the life cycle of their projects and operations.
Oilserv Group Limited Partners UNN to Promote the Application of Nanotechnology in Energy, Health, Safety and Environment By Patrick Egwu, Enugu, Nigeria Limited, an oil and gas O ilserv service company with expertise
in pipelines and flow lines has organized a 4-day International African Conference on the Applications of Nanotechnology on Energy, Health, Safety and Environment.
The conference which held at the Princess Alexandria Auditorium of the University of Nigeria, Nsukka, was organized in collaboration with the Nano Research Group of the University and drew international scholars, researchers and scientists from different parts of
39 Orient Energy Review September 2016
the world. The conference started with a courtesy visit to the Vice-Chancellor of the University, Professor Benjamin Ozumba by the guests and sponsors of the conference.
TECHNOLOGY Some of the guests and resource persons at the event includes; Engr. Emeka Okwuosa, MD OILSERV Ltd Group of companies; Prof Wole Soboyejo, Princeton Institute of Science and Technology Materials (PRISM) and Department of Mechanical and Aerospace Engineering, Princeton University, New Jersey, USA; Professor Kenneth Ozoemena, Chief Researcher, Energy Materials, Council for Industrial and Scientific Research (CSIR), Pretoria, South Africa; Professor Deji Akinwade of the Electrical and Computer Engineering Department, The University of Texas-Austin, USA; Professor P. N Kalu, College of Engineering, Florida State University, USA; Professor Hulda Swai, Nelson Mandela African Institute of Science and Technology, Tanzania, Dr M.V Reddy, Department of Physics, National University of Singapore; Professor A.A Attama, Faculty of Pharmaceutical Sciences, University of Nigeria, Nsukka, principal officers of the University and a host of others. Receiving the guests, the Vice-Chancellor who was represented by the Deputy Vice Chancellor (Administration), Professor Charles Igwe, thanked the guests for gracing the conference, noting that nanotechnology is
ciety of Electrochemistry (ISE) as well as the Singaporean Materials Research Society for providing a grant to the Best Poster award for young scientists. Participants who came all the way from the United States, Singapore, Malaysia, Colombia, Mexico, Germany, Ethiopia, Canada and a host of other countries go a long way in highlighting the diversity of talents that drive research in Nanotechnology,” the VC said. “This conference proclaims that nanotechnology is key to national development. This is a true statement given the fact that in contemporary society, we are indeed flooded with numerous innovative products for our everyday living that are spin-offs from research in this emerging technology. I urge participants at this conference to give serious thoughts to translational research that
grow and we hope to continue organizing more discourse on science and development”. While delivering his lecture, Engr. Obi described nanotechnology as the future of the world, capable of addressing the country’s challenges. He said, “Nanotechnology is the future and it is high time we embraced this new emerging reality. Nanotechnology is found everywhere both in oil and gas, agriculture, mining, agriculture and health.” On the way forward for nanotechnology, Engr. Obi said “it starts with you and me by maintaining our active participation in the field of nanotechnology. There should be strategic and prioritized funding of nanotechnology by both government and other private individuals. OILSERV on its part will continue to support nanotechnological research with this type of conference”. He also stated that Oilserv has been at the forefront in engaging technicians and fresh graduates from tertiary institutions across the country in the company through their Graduate Training Programme (GTP), adding that stakeholders should stop asking “if ” but “how”.
Executives of Oilserv, Int’l Resource persons and officials of the University of Nigeria Nsukka, pose for a group photograph at the conference
a vital field of research that will help in solving some of the myriads of problem in Nigeria and wished them fruitful deliberations. In a welcome address delivered by Professor Igwe, the Vice-Chancellor commended the organizers and sponsors for thinking towards the area of nanotechnology, adding that the conference was timely “I will like to congratulate the UNN Nano group for yet another successful outing. My profound gratitude goes to the MD of OILSERV for virtually sponsoring this conference single-handedly. I also appreciate the many scientific organizations that provided additional funds for hosting the conference like the Third World Academy of Science (TWAS), the International So-
can culminate in the emergence of new products that will drive the quest for new jobs for our teeming population of unemployed youths”, he added. On his part, Engr. Emeka Okwuosa, who was represented by the General Manager, Project, Engr. Chigozie Obi, said as the driver and clear leader in the oil and gas sector in Nigeria, OILSERV believes in investing in research as a way of achieving sustainable development in the country. “This conference is our own way of investing in concerted efforts that will better our society especially in the area of nanotechnology and its applications in diverse fields. This is what makes us
40 Orient Energy Review September 2016
Professor Kenneth Ozoemena, a foremost Scientist and Chief Researcher at the Council for Scientific and Industrial Research (CSIR), a South African – government based research centre in Pretoria, South Africa, while delivering a paper titled “Nano structured Energy Storage Materials for Renewable Energy” noted that through renewable energy powered by nano materials, electricity could be generated in Nigeria as it is done in other African countries, thereby solving our epileptic power supply problem.
TECHNOLOGY “It is really pathetic that in terms of power generation in Africa, it is only South Africa and countries in North Africa (Egypt, Libya et al) that stand out for mention. They control more than 80% of electricity generation in Africa. Nigeria is not generating next to nothing. In fact, the amount of electricity generated by Nigeria officially as you find in literature or magazines is equivalent to what one airport in Tokyo, Japan (Narita International Airport) generates. Just one airport generates the same amount of electricity generated by Nigeria. That is quite pathetic and this is a country that has a lot of things to offer to Africa and the world. And there is no way you can develop your economy or people without energy. Energy is the only way to go,” he submitted.
when we can generate at least one third of what South Africa is generating, we will move far and I think we can do that”. A Professor at The University of Texas, Austin, in the United States of America and winner of Presidential PECASE Award from President Barack Obama, Professor Deji Akinwade in his paper titled “Automatic Nanomaterials for Education, Mobile and Industrial Anotechnology”, noted that nanotechnology has its applications in the transportation industry, flexible smart phone systems, portable water desalination solutions, internet and mobile health care. In an earlier remark, the Leader of
He further stated the future of nanotechnology in terms of power generation. He further stressed the importance of nanotechnology to power generation this way: “Hawaii for example, a big island in the United States, would by 2030, go 100% total renewable, New York city plans to generate 50% of their electricity from renewable energy by
Nelson Mandela African Institution of Science and Technology, Tanzania, and Professor Anthony Attama from the Department of Pharmaceutical Sciences, University of Nigeria, Nsukka, delivered separate papers on “Nanomedicine in drug delivery including herbal medicine” and “Nanomedicines and bacterial infections” respectively. In their submissions, they stated that nanotechnology has efficacy in curing many infections and communicable diseases. According to Professor Swai, “nanomedicine has rapidly gained ground over the past several years as may be observed from the increase in the number of nanopharmaceutical patents. This technology has successfully revolutionalized therapies for diseases like cancer with a number of nanomedicine products for cancer already available in the market”. For Professor Attama, “nanomedicines have demonstrated capability in treating certain infections because of their ability to penetrate certain anatomical barriers such as the blood brain barriers”.
Cross section of participants at the Nanotechnology conference
2030, the European Union is targeting to generate 20% of its renewable by 2020, California targets to add 1.3 gigawatt of energy from renewable sources.. That’s the future, because I think the problem we have is that we are limited by our hydro-power which we are getting power from. We are not even using coal, solar, and all those technologies are available for us to use. It doesn’t make sense that we have all those sources and we are still suffering and living in darkness. If Nigeria can generate at least one third of what South Africa is generating, then I think no country in this world will compete with us in terms of our power or economy. I am surprised that we are number one economy in Africa with our epileptic power generation. Think about it
the UNN Nano Research Group and the Chairperson, Local Organizing Committee, Prof Rose Osuji, said the conference became necessary as the world of science is changing at a very fast pace and the need to keep abreast of trends in Nanotechnology. “Current trends in research and development have shown that nanotechnology has emerged as the next frontier for the exploration of science and the development of new technologies. It is our desire to fast-track development through human and infrastructural capacity building, consequently reducing the gap between the developed and the emerging economies,” she said. Regarding its application in the health sector, Professor Hulda Swai of the
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Earlier in his presentation, Professor Wole Soboyejo, from the Department of Mechanical and Aerospace Engineering, Princeton University, United States of America, said nanoparticles “are used in the early detection and treatment of breast and prostate cancer”, adding that nanotechnology has a “multi-scale/multi-functional applications in medicine, energy and infrastructure systems”. Other resource persons that presented papers at the conference include; Professor P.N Kalu, on “Tertiary education in science and engineering: the way forward”; Professor M.V Reddy, on “Overview of novel nanomaterials for energy storage”;
TECHNOLOGY Dr. Mesfin Kebede, on “nanostructured cathode materials for efficient lithium ion battery energy storage systems” and Professor Francis Dejene, on “New renewable materials for solar energy applications”. Other paper presenters from other Universities, research institutes from within and outside the country also delivered their paper on the various application of nanotechnology to different fields. During the poster presentation by participants and lecturers at the conference, various awards and cash prizes were given to some of the poster presenters by the International Society of Electrochemistry (ISE), Switzerland and the Materials Research Society (MRS), Singapore for their works on the posters exhibited. Christian Nwosu, a researcher from the Department of Physics/Geology/Geophysics, Faculty of Science, Federal University, Ndufu-Alike, Ikwo, (FUNAI) Ebonyi state, won an award by the International Society of Electrochemistry (ISE), Switzerland, for Best Presentation for a work co-authored with Professor Michael Ukonu, a renowned Professor of Physics and current Dean of Science, FUNAI. The paper is titled “Fabrication of reflectors via vapour deposition of nanoscale thin film of silver and copper for concentrated solar thermal power applications”. Also, Miss Blessing Ezealigo, a Post Graduate student from the Department of Physics and Astronomy, University of Nigeria, Nsukka, won the first position for her works on “Structural, optical and electrochemical properties of nanorod CuSCN thin films deposited by successive ionic layers absorption and reactions (SILAR) methods” courtesy of the Materials
Research Society of Singapore (MRS). She also won the second position award by the International Society of Electrochemistry (ISE), Switzerland, for her work on “Electrochemical capacitive properties of triangular-like nanostructured copper iodide thin films deposited by SILAR method”. Another researcher, Mr. Okagu Desmond from the Department of Physics and Astronomy, University of Nigeria, Nsukka, won the first prize position for Best Poster presentation. Others who won awards at both the ISE and MRS categories include; Nwanya Chinwe, Ezema C.G, Ighodalo et al; Mgabdike et al; Odo et al;Awua et al; and Anyaezue et al for their works in different aspects of nanotechnology. While presenting the awards, the Executive-member and representative of the President of ISE, Professor Kenneth Ozoemena, congratulated the awardees and urged them to continue to work harder in the field of research and nanotechnology, adding that more awards will be instituted at the next conference. He stated that the essence of the award was to showcase good works on nanotechnology and encourage others to carry out research on new areas. He further revealed on-going plans to institute a regional chapter of ISE in Nigeria, saying it will help in getting more sponsors and funds for the conference and other activities of nanotechnology in Nigeria and Africa at large.
ma Okafor from the Department of Science Education, said she learnt a lot from the conference and promised to apply them in her field” Festus Ifeanyi, form the Department of Industrial Chemistry said: “I now feel challenged to bring out the hidden potentials in me from the knowledge gained from this conference. I am really impressed with the papers delivered”. A lecturer, Adewale Phillip from the Federal University of Agriculture, Abeokuta, (FUNAB), commended the organizers of the conference and said it was a rewarding experience. In a vote of thanks, the LOC Chairperson, Professor Rose Osuji, thanked all the participants and guests at the conference, adding that the aim of the conference had been achieved. “I thank you all. I am really impressed with what I have seen so far. I can say that we have achieved the aim of the conference, which is geared towards using research and scientific development to improve ourselves and make our society a better place to live in. I pray that the next conference will be better than this,” she said. Highlights of the conference were paper presentations by invited international resource persons, exhibitions of posters and certificate presentation to resource persons and participants from different Universities and Research Institutes within and outside the country.
He called on the participants to join the society (ISE) when established. Some of the participants expressed their feelings on the conference. A student, Chio-
HEALTH, SAFETY, SECURITY & ENVIRONMENT stresses need for security in oil business OWA Pennwell Corporation, organisers of Offshore West Africa has highlighted the importance of health, safety, security and environment in the oil and gas industry, despite the low oil price environment. The OWA Organisers said HSSE would be a focal point for discussion at OWA 2017, considering the issues of risks involved as part of the oil exploration business in the midst of low crude price regime. Director of Operations, Africa, PennWell Corporation, Mr. Dele Olaoye, was quoted in a statement to have said, “Occupational health and safety management should continue to be top priority today despite the global low crude oil regime. “According to DuPont studies, during low oil price regime, there is typically an attendant increase in incidence rates which would manifest about three years after the trend has commenced.
This is because organisations in their bid to cut costs impact on health and safety measures. Any cost saving that affects occupational health and safety could imply that such an organisation is delaying the evil day. The eventual loss usually far outweighs the perceived immediate savings.” Noting that the issue of health and safety cannot be over- emphasised, Olaoye said, “When people cut cost, in every organisation, the first thing they intend to do is to get rid of marketing budget, the second thing they think of is get rid of training. Eventually, many go as far as to get rid of personnel, which could include key staff with years of experience and competence. “Usually, there is no deliberate focus to ensure that these measures do not affect the overall measures in place to safeguard people and their health, the environment as well as assets. According to him, one other key issue worth mentioning is contractor management during low oil price regime.
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Olaoye said, “Negotiating or renegotiating contracts needs to be carefully guarded to ensure people’s lives, their health, and the environment as well as company assets are not negatively impacted during project execution.“ He described the OWA conference as the most global in West Africa with participants coming from over 40 countries and all continents. According to him, six country pavilions are expected on the exhibition floor at the next edition scheduled to hold in Lagos from June 6 to 8, 2017. He said, “This includes the USA Pavilion (already confirmed by the United States Department of Commerce) and Scottish Pavilion (already confirmed by the Scottish Development International). Other pavilions would include Ghana, Angola, United Kingdom and Nigeria.”
FROM THE COMMUNITIES
Ogun communities celebrate Shell Nigeria Gas for schools’ upgrade
*External Relations Communications Manager of Shell Nigeria, Mrs. Sola Abulu; Managing Director, Shell Nigeria Gas, Mr. Toyin Adenuga; and Social Performance Advisor, Mr. Babatunde Olaleke, at the handover of new and upgraded facilities of the Ebenezer African Church Primary School and African Church Community Secondary School, Ewupe-Ota, Ogun State to the government.
of Ewupe, Isorosi and Ijaliye P eople communities in Ota, Ogun State rolled out the drums in a fanfare recently at the opening of multimillion naira new school facilities donated by Shell Nigeria Gas (SNG) the downstream subsidiary of Shell in Nigeria. The projects, executed in co-located Ebenezer African Church Primary School and African Church Community Secondary School in Ewupe within SNG’s operational area included new and upgraded blocks of classrooms, football field, toilets and water facilities. Speaking at the ceremony, Managing Director of SNG, Mr. Toyin Adenuga, described the investment in the two public schools as part of the broad social investment programme of the company. “We recognise education as the topmost need of the people of our neighbouring communities and what we have done is a progression of our longstanding support to these schools and to the communities.”
He noted that SNG was committed to supporting initiatives aimed at closing the opportunity gap between students in rural public schools and their counterparts in private schools.
This is why we have always beckoned on corporate concerns, public-spirited individuals, and non-governmental organisations to team up with us in lifting the education sector to great heights.”
In her speech, Ogun State Commissioner for Education, Mrs Modupe Mujota, commended SNG’s investment in the schools and charged the students to take full advantage of the ultramodern school infrastructure to “upscale their academic performance and competitive exploits”.
An elated Principal of African Church Community Secondary School, Mr. Gbolahan Adekunjo, described SNG’s support to the school as ‘a spectacular, historic and positive one that has transformed the life of the schools.’ He added, “The company has put a smile on the faces of not only the students, staff and parents but the entire Ewupe and Ota community as a whole.”
Represented by the Director of Secondary Education in the State, Mrs. Abosede Ogunleye, the Commissioner noted that the cost of education was capital-intensive and that public-private partnership in education was a viable option to overcome the funding challenge. “This administration has never pretended to be benevolently buoyant enough to single-handedly underwrite the cost.
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The event was witnessed by senior government officials, traditional rulers, community leaders and leadership of the community development committees in Ogun State.
FROM THE COMMUNITIES
Nigerian Military Pushes the ‘Belemaoil Model’ For Pipeline Security
‘Treat host communities as business partners. No private contractors. Use community governance structures. Make payments verifiable via BVN-supported bank-transfer-enabled salaries’
T
he Chief of Army Staff (COAS) of the Nigerian armed forces has advised oilfield operators in the Niger Delta to adopt the “Belemaoil Model”, in their engagement with host oil communities, to minimize attacks on oil facilities. Following a meeting with several E&P companies in the east of Nigeria, initiated by the military as part of the “Operation Crocodile Smile”, the COAS put the first burden of securing pipelines on the oil companies. The military stated clearly at the beginning of the communiqué: “Oil pipelines should be secured by oil companies while ensuring a clear field of view along pipelines’ right of way”. The key idea in the model, presented at the meeting by Belemaoil, a Nigerian independent and operator of the Oil Mining Lease (OML) 55, is to engage communities, not contractors,
(not even when the contracting company is owned by top militant leaders), in pipeline surveillance. “Rather than use contractors – whether or not of community origin – the aspiration is to use community governance structures to employ large number of youths (verifiable via BVN-supported bank-transfer-enabled salary payments)”. The Belemaoil model argues for oil companies to treat host communities as business partners, budget certain percentage of profit to improve the quality of lives in the host communities, use host communities to provide security services rather than outside contractors, hold host communities responsible for breach of security of oil assets within the communities, promote peace through massive employment of youths from host communities, improve environmental performance and government, NGO and Civil Society Relations, Partner with security agencies to increase surveillance and patrols.
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Some of these suggestions are already part of the extant mode of relations with host communities by companies, “but the importance of this call is to spread the idea around, especially the part that host communities, and not individuals or contractors, be responsible for surveillance”, say participants at the meeting. Courtesy: Africa Oil+Gas Report
GAS
NNPC Pledges Support For Nigerian Gas Association
S GMD, NNPC, Dr. Maikanti Baru
The Group Managing Director of the Nigerian National Petroleum Corporation, Dr. Maikanti Baru on Thursday pledged the support of the NNPC to help the Nigerian Gas Association achieve its objectives of ensuring that the country derives maximum benefit from its huge gas resource base. Speaking while receiving the NGA delegation led by its President, Mr. Bolaji Osunsanya, at the NNPC Towers Abuja, Dr. Baru noted that as the midwife of the nation’s premier gas association in 1999, the NNPC has a moral and strategic interest in
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ensuring the continuous existence and sustained growth of the association.
the nation’s vast gas resources by incentivizing all parts of the gas value chain.
Describing the NGA as a reflection of the development of the gas industry in Nigeria the GMD said the Corporation would continue to provide the association with human and material resources.
On his part the NGA President thanked the NNPC and Dr. Baru for the unflinching support for the association and pledged the readiness of members to work with the NNPC in this regard.
While thanking the members of the NGA for their advocacy in ensuring a review of the Production Sharing Contracts, PSC, gas terms, Baru noted that the NNPC is working round the clock to ensure maximization of
Osunsanya called on government to create incentives which would promote deliberate and well-funded projects in the search for gas as against the practice of accidental gas discoveries.