Sweetcrude April 2012

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A Vanguard Monthly Review Of The Energy Industry VOL 03

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Fuel subsidy probe report ready in 2 weeks

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Uncertainty heightens as SURE wobbles

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2012 Offshore Technology Conference 30 April—3 May, 2012

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Contents 4 6 8 10 11 12 14 18 20 22 24 26 29

COVER

Uncertainty heightens as SURE wobbles

OIL Ogoni sues Shell in London over compensation

FOCUS

Afren expects 46,000b/d from existing assets

GAS

Senate lambasts DPR over delay of gas projects

FEEDBACK

Oil exploitation, the environment and crimes against nature

POWER

Electricity consumers to suffer in the short term

FINANCE

NEITI to conclude NNPC, others audit in October

INSURANCE

Salvaging economic risks through insurance

LABOUR Industrial unrest looms in power sector

SOLID MINERALS Nigeria targets 3mt/yr. of steel

FREIGHT

Pirate attack: Nigeria named high risk area

TECHNOLOGY

Biofuels: Production benefits and technology

COMMUNITY DEVELOPMENT Marine erosion threatens Bayelsa community

Sweetcrude is a publication of Vanguard Media Limited

THE TEAM EDITOR

Hector IGBIKIOWUBO

DEPUTY EDITOR Clara Nwachukwu CORRESPONDENTS Victor AHIUMA-YOUNG Godwin ORITSE Yemie ADEOYE Jimitota ONOYUME Samuel OYANDOGHA Oscarline Onwuemenyi Emma Arubi Rosemary ONUOHA MANAGER, MARKETING Ubong NELSON PAGE LAYOUT/DESIGN

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T

hree month's after the introduction of the 'Subsidy Reinvestm ent and Empowerm ent Programme' SUR E, as a result of the removal albeit partia l removal of subsid y, it would appear that the on ly thing that has un derlined its implementation is 'uncertainty' Gover nment has suddenly gone quiet on it and indications are that the long queues and products scar city that characterized pro ducts supply and distribution prior to the partial rem oval still prevails.

In 'focus' we spoke with the managing director of Afren, a producti on and exploration company which has shown a lot of promise wit h sustained growth, recording 173% growth in pro fits despite challenges in its Ni geria operations.

We have kept fai th with coverage of other spectrum of the Ni gerian energy cha in including oil, gas, feedback, insurance, power, insurance, finance, labour, sol id minerals, freigh t, technology and community de velopment, provin g reportage of these sub-sectors on an unparalleled scale.

In keeping with our tradition of s howcasing Nigerian companie s at the 2012, Offshore Technology Confe rence, OTC, taking place in Houston, Texas, we have called on com panies to take due advantage of our participation to place advertisements on their goods and ser vices. Once more, the Nigerian Content Developm ent and Monitoring Boar d, NCDMB has partnered Sweetcrude for the purposes of identify ing and showcasing indige nous companies w hich have distinguished the mselves as 'Cham pions of Nigerian Content, � at the OTC in Ho uston, Texas, U S A .

Indeed we look forward to showc asing the activities of compa nies identified by the Board, as well as those who wish to be showc ased at the event.

Please note that in a bid to serve you better, we have commenced str eaming live report s of energy news and inform ation. You can fol low us on www.sweetcrudere ports.com.

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Cover Story

Uncertainty Heightens as SURE wobbles B

4

Jonathan

Clara NWACHUKWU

y November 2011, the Federal Government had enunciated the Subsidy Reinvestment and Empowerment Programme, SURE-P, to cushion the effects of the removal of subsidy from premium motor spirit, PMS or petrol. For this reason, the government gave Nigerians the rudest shock of their life by announcing the removal of subsidy from petrol on January 1 and the price of the product skyrocketed from N65/litre to N141, but was later brought down to N97/L following nationwide protests.

Government argued that it was pertinent to remove subsidy on petrol because it, “poses an unsustainable financial burden on the government, creates inefficiency in usage for consumers, disproportionately benefits the rich, and diverts critical resources from muchneeded investments in infrastructure.”

Af t e r t h r e e m o n t h s o f implementation, Clara Nwachukwu, writes that Nigerians are still wondering what the SURE programme is all about, and if they will ever benefit from the gains promised by government.

Gains from SURE The monies “saved” from the difference between the old pump price and the new one, which is N76/L X 35million litres national daily requirement makes a total of N2.67billion daily will be deployed to provide basic amenities for Nigerians.

Government had expected to save more than N1.74trillion, being the sum spent to reimburse oil marketers for selling petrol below market price through full deregulation.

According to the Coordinating Minister of the Economy and Minister of Finance, Dr. Ngozi OkonjoIweala, ‘This programme (SURE) is a 3-4 year programme designed to mitigate the immediate impact of the removal of fuel subsidy and accelerate economic growth through investments in critically-needed infrastructure.”

And to demonstrate its “seriousness” to actualise the gains of the programme, the government made additional provisions for some critical sectors of the economy such as infrastructure, education and health outside budgetary provisions in the 2012 Appropriation Act. Some of the projects and

allocations as announced by the Coordinating Minister of the Economy and Minister of Finance, Dr. Ngozi OkonjoIweala, are as follow: ?Works - about N46.5billion to be used to support a number of road projects including the Abuja-Lokoja Road; Benin-OreShagamu Road; Port-HarcourtOnitsha Road; Kano Maiduguri Road as well as for the construction of the Second

?Health - to get N73.8billion for maternal and child heath ?Niger Delta - gets about N21.7billion to support the East-West Road, and, ?Water Resources –for a fouryear period ending 2015, will get additional N205.5billion for rural water, water supply, and irrigation schemes and other water related projects.

Okonjo-Iweala maintained

She argued that the fight on subsidy is “between the government and Nigerians on one side, and persons who are bent on continuing their age-long ‘milking’ of the system for their personal benefits on the other side Niger Bridge and Oweto Bridge. ? Po w e r - a d d i t i o n a l N155billion will go for power projects such as the Mambilla power plant, coal power plant and small hydro power plants between now and 2015. ?Transport - is expected to get about N20.9billion to support the Abuja-Kaduna and the Lagos-Ibadan railway line projects. ?Education - gets additional N24.6billion for vocational training centres.

that “These projects will not only significantly improve the country’s infrastructure, but will also create millions of jobs for Nigerians. This struggle is not between the government and Nigerians, because government is squarely on the side of the people.”

She argued that the fight on subsidy is “between the government and Nigerians on one side, and persons who are bent on continuing their agelong ‘milking’ of the system for their personal benefits on the other side.”

To be or not to be?

Ironically, no sooner did she beg to “support government’s efforts at defeating these persons, and creating a better country for all Nigerians,” than President Goodluck Jonathan was quoted as saying that the SURE programme was no longer realistic.

According to reports, the President allegedly told the 58th National Executive Committee meeting of the Peoples Democratic Party, PDP that the SURE was hurriedly conceptualised on the heels of the nationwide protest against the removal of the fuel subsidy.

It is uncertain why the president chose to declare the programme as hur riedly packaged, considering that the full policy document was dated November 2011 Accordingly, he said; “We are working on a new document CONTINUES ON PAGE 5

Cover Story

5

that it is impossible to stand on probity, transparency and accountability.”

Jonathan

Diezani

Uncertainty heightens as SURE wobbles CONTINUED FROM PAGE 4

based on the reality, but we don’t want to promise what we will not achieve. Those who have it please withdraw it, we cannot realise the money that is stated therein, but we will still come up with a document based on what we get.”

Since Mr. President is now confused about the workability of the programme, he failed to tell Nigerians what becomes of the Dr. Christopher Koladeled, Subsidy Reinvestment and Empowerment Programme Committee, charged with the responsibility of monitoring the disbursement of funds accruing from the partial petrol deregulation.

Other members of the committee include MajorGeneral Mamman Kontagora (rtd) as the deputy chairman of the board, two representatives of the National Assembly, two representatives of the o r g a n i s e d l a b o u r, o n e representative of the National Union of Road Transport Workers , one representative of the Nigeria Union of Journalists, one representative

of Nigerian women groups, one representative of Nigerian youths, one representative of civil society organisations, as well as the Coordinating M i n i s t e r o f t h e Economy/Minister of Finance, the Minister of National Planning, the Minister of Petroleum Resources, the Minister of State for Health, the Special Adviser to the P r e s i d e n t o n Te c h n i c a l Matters, and six reputable individuals from the six geopolitical zones in the country.

Kolade speaks Speaking on his committee’s responsibilities, Kolade noted in Lagos that the committee had oversight function for only 47 per cent of the total funds accruable, while the larger portion of 53 per cent goes to the space and local governments.

For efficient and better management of the fund, he urged that the committee should be replicated at all levels of government from Federal to the state and local governments.

For equitable distribution of the SURE resources, they noted that some projects planned for the year may have to be shelved, while some others would have to be restructured He insisted that it was necessary for state and local governments to put systems in place to ensure that the amounts that accrued to them were judiciously spent to win confidence in the programme.

He noted, “The Federal Ministry of Finance published the subsidy savings for January 2012 and how it was shared across the three tiers of gover nment, the Federal Government got N15bn. If we continue at that rate, the maximum the Federal Government would get this year would be N180bn. So, if the intention is to ensure that the people, including those in the rural areas, feel the impact of the subsidy savings, we should

find a way to build a partnership with state and local governments,” he said.

Indeed, the 36 states of the federation, the 776 local government areas and the Federal Capital Territory were e x p e c t e d t o g e t N411.03billion, N203billion, and N98billion respectively from the SURE proceeds, but neither the states nor local governments have said anything about their portions of the fund, which is meant to more on Nigerians in the rural areas.

He added that he had ordered consultants working for the committee to report any act of corruption, and promised to resign, “if I find

Policy somersault So far, aside from the launch of the federal mass transit, nothing much has been seen of the SURE programme, a d e v e l o p m e n t t h a t m a ke Nigerians to believe that the programme might well be just another of the white elephant projects that was accompanied with so much fan fare, but not enough substance.

At the launch of the mass transit programme, approved the disbursement of N15billion as a revolving interest-free loan to boost public transportation in the country. But some states listed in the pilot scheme have complained of lack of access to the fund However, analysts believe that the SURE can still be salvaged, if only the Federal Government can priotise the execution of the projects.

They argued that N32.04billion per annum can still achieve a lot if prudently used, saying, “Government would have to priotise the projects in such a way that all the geo-political region would benefit from the programme.

“In the past, we have witnessed lopsided development projects in favour of particular regions, but now to win back the people’s trust, President Jonathan must ensure fair play in the allocation of projects because of the complexity of the Nigerian system.”

For equitable distribution of the SURE resources, they noted that some projects planned for the year may have to be shelved, while some others would have to be restructured.

But they equally expressed concern over “the silence of the states and local governments on the SURE programme. Knowing the states and local governments they would have cried out if they had not received their own share of the SURE funds, and since they have remained silent means that they have received the money, so they should let their people know what progeammes they have for them, rather than depositing the money into someone’s account to be generating interest.”

In spite of analysts optimism, Nigerians are worried about the turnaround of the policy as promised by Mr President, as they noted that policy readjustments takes forever in Nigeria, and if a new SURE document is being planned, then they may never be realized in the tenure of this administration.

Oil Ogoni sues Shell in London over compensation

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igerian CONTENT INITIATIVE Dr. Ibilola Amao

The “CAN DO” Spirit

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Ogoni oil spillage

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h e B o d o c o m m u n i t y, a f i s h i n g settlement in Ogoni, Rivers State, have sued the Royal Dutch Shell in London court over “unpaid compensation for oil spills”.

This is the first time the multinational oil company is facing claims from the developing world in the UK for environmental damage.

Mr. Martyn Day of the solicitors Leigh Day - lawyers representing the community - said the spills had devastated a once-thriving fishing community of some 50,000 people.

He told the BBC’s Today programme: “I’ve been around Bodo on a number of occasions and you just have to walk round, it looks like a World War I scene, where the oil has totally destroyed much of the local environment and the fish, which particularly thrive in the mangroves, have basically disappeared from the area.”

In accepting responsibility for the oil spills, which happened in 2008 and one of which continued into 2009, Shell said they had been caused by operational failures Shell also argued that much more oil has been spilt as a result of illegal activity in the Niger Delta, such as sabotage and theft.

It promised it would pay

Bodo community representatives say they are resorting to legal action after negotiations for compensation broke down

compensation for the spills according to Nigerian law and would clean up the oil and restore the land.

The company is , however, yet to pay compensation to the affected community for the spillage of about 4,000 barrels.

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odo community representatives say they are resorting to legal action after negotiations for compensation broke down.

The head of Shell Nigeria said that with different lawyers representing claimants it was difficult to resolve.

Mutiu Sunmonu, managing director of Shell Petroleum Development Company of Nigeria (SPDC), said it was important to u n d e r s t a n d “ t h e complexities of the Niger Delta” when dealing with these compensation payments.

“There are a lot of people who’ve claimed to be impacted and a lot of intra-

communal strife which is making it difficult for anyone to have meaningful negotiations with different lawyers claiming to represent them.

“We did do everything possible to make sure that we pay compensation to the affected communities, but we also have to make sure that this compensation is paid to the right people. The trouble is you cannot do that as long as different lawyers are representing them.

“Shell will not give up trying to identify those who should be compensated,” Sunmonu told the BBC. The Ogoni people have long complained about the environmental damage to their communities, but they say they have mostly been ignored.

A UN environmental assessment of Ogoniland last year said the region would take 30 years to recover fully from the damage caused by years of oil spills.

was elated by the acknowledgement of the Chairman of Jagal that the NigerDock staff must take a lot of credit for delivering the Abang and Itut platforms which was commissioned by no other than the President of Nigeria: His Excellency Dr. Goodluck Ebele Jonathan, GCFR on March 16th 2012.

“Made in Nigeria” Abang and Itut platforms are two platforms that collect the crude oil, water and gas from at least 10 wells, combine these fluids and sends them off for processing at their host platforms. The topsides consist of 3 decks and weigh approximately 800 tonnes each. The construction involved over 2.5 million manhours without any lost time incidents, and that the impressive performance has earned the indigenous ship builder, a prestigious safety award by Mobil. The well coordinated event must have taken a lot of effort to coordinate and there were no recorded issues or any challenges (logistics, security, confirmation of guests etc. Quite an impressive attendance was recorded with ExxonMobil – the collaborative host, Chevron, TOTAL, SHELL, captains and leaders in the industry in tow.

I kept reminding the former GMD of NNPC, Engr. Funsho Kupolukun of the humble seed he had sown when he picked out Engr. Ernest Nwapa after his Chief Officers course and arising from a laudable presentation, to set up a Nigerian Content unit in NNPC. A journey of a thousand miles began with Engr. Nwapa’s first steps of trying to bring his indomitable and collaborative spirit to bear in ensuring that IOC, multinationals, indigenous players (private sector and public sector alike) come together in a give and take posture to ensure that Nigerian Content marches forward and records success after success. The NCDMB team have proven that a seed sown, if well cultivated can become a beautiful garden even before there appears a forest with time. All stakeholder in the industry have a very important role to play in ensuring that the Nigerian Oil and Gas Industry Content Development (NOGICD) Act is well implemented and we all aspire to achieve goals set in the schedules of the Act. The way forward is surely one of collaboration, coordination and cooperation. This is the fastest way to leapfrog from our agrarian activities and mentality into the ideas age. We must not despise humble beginnings but give our best at any point in time to ensure that we as a nation make progress. One other critical success factor in this regard is the continuity in government policies and pursuant of such to logical conclusion by successors.

We must also give credit to those who before us foresaw the need for knowledge and technology transfer and in 1989 signed the Nigerian National Petroleum Corporation (NNPC) / Bechtel Technology Transfer Agreement which birthed a National Engineering and Technical Company Limited (NETCO), from which many Oil and Gas leaders and professionals have emerged.

Over 60% of the NCDMB team, the Group Executive Director (GED) Exploration & Production (E&P), Group Executive Director (GED) Refining & Petrochemical (R&P), Managing Director’s (MD’s) and General Manager’s (GM) of NNPC have at one time passed through NETCO as full-time staff or enrolled in NETCO for training and empowerment. My humble self served in NETCO as a Consultant between 1992 and 2003. Those were the years when we worked hardest and did our utmost best to ensure that technology and knowledge was acquired by Nigerians.

The clear message I took away from the ceremony apart from being “proud to be a Nigerian” was that success is inevitable if we can persevere with a “Can Do” spirit. Also, every little seed that is sown towards a better and greater Nigeria must be nurtured by all as a collective responsibility and that the greatest benefactors of doing things right are the masses who would have greater opportunities for employment and benefit from the creation of wealth that adds to the betterment of our great nation Nigeria.

We should also, look out for NigerStar7, a consortium of three formidable giants (NigerDock, GlobeStar and Subsea7) who have decided to collaborate and pull resources together intelligently to record more successes that are made in Nigeria.

As, I congratulate NigerDock on a successful completion of the ExxonMobil Abang and Itut platform project and the laying of the foundation of the Skillsbase, I pray that more good news comes from the FTZ and it experiences a brighter future, especially for the well deserving staff.

Oil

Fuel subsidy probe report ready in 2 weeks

NNPC, Nigeria Police partner on pipeline vandalism

CONTINUED FROM PAGE 1

As IGP establishes Police Anti Pipeline Vandalism Squad MD Abubakar

Oscarline ONWUEMENYI

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BUJA - The Management of the Nigerian N a t i o n a l Petroleum Corporation, NNPC and the leadership of the Nigerian Police have pledged to join forces in combating the menace of pipeline vandalism and security threats to key oil and gas facilities currently endangering the smooth operation of the petroleum industry.

This resolution was arrived at after a meeting between the Group Managing Director of the Nigerian National Petroleum Corporation, Engr.

Austen Oniwon and the Acting Inspector General of Police, Mr. Mohammed Abubakar at the Louis Edet House in Abuja.

In his presentation, the NNPC GMD reeled out the alarming cases of pipeline vandalism across the country as well as the growing instances of attacks on operational staff of the Corporation which is posing a massive threat to the operation of the oil and gas industry at the downstream and upstream sectors.

Oniwon revealed that the advent of illegal bunkering, pipeline vandalism and product theft has massively impacted on the capacity of Nigeria’s massive oil and gas assets to function optimally, even as he called on the Police to assist the NNPC in the push to eradicate the intractable incidence of encroachment of pipeline right of way which has over time assumed a frightening dimension.

Oniwon explained that though the combined working

capacity of all the 21 Pipelines and Product Marketing Company (PPMC) depots nationwide, excluding holding capacities at the refineries, can provide products sufficiency of up to 32 days for petrol, 65 days for kerosene and 42 days for diesel, the activities of the pipeline vandals have made it impossible for the facilities to function full blast.

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acked with data to buttress the point, the NNPC GMD informed that a total of 16,083 pipeline breaks were recorded within the last 10 years adding that while 398 pipeline breaks representing 2.4 per cent were due to ruptures, the activities of unpatriotic vandals accounted for 15,685 breaks which translates to about 97.5

pipeline vandalism in the country particularly the Port Harcourt-Aba/Isiala-Ngwa axis.

In all, 8,105 breaks were recorded along the system 2E within the period representing about 50.3 percent of the total number of petroleum products pipeline breaks in the country.

The attacks left the NNPC with a cost of N78.15 billion in product loses and pipeline repairs.

The System 2A product pipeline route which conveys products from Warri-BeninSuleja/Ore depots ranks second on the scale of pipeline break points with 3,259 cases representing about 20.2 percent of the total volume of products pipeline breaks in Nigeria. The figure also came with a loss of over N20.39 billion in products and pipeline repairs.

Currently over 300,000 bpd and 140mscfd is deferred and about 55 vandalized points so far repaired at a cost of N11 billion

percent of the total number of cases.

According to records o b t a i n e d b y o u r correspondent, the System 2E/2EX which conveys p r o d u c t s f r o m t h e Po r t Harcourt refinery to AbaEnugu-Makurdi depots onwards to Yola-Enugu-Auchi appears to be the haven of

The System 2B which carries products from the Atlas CoveMosimi-Satelite-Ibadan-Ilorin depots recorded 2,440 breaks leading to a loss of over N73.6 billion in products and pipeline repairs.

On gas, Oniwon explained that the incessant attacks on the Trans Forcados Pipeline has rendered the TFP out of service

7

since May 2009 thus making it impossible to evacuate crude oil/ condensate from some Shell operated facilities.

“Currently over 300,000 bpd and 140mscfd is deferred and about 55 vandalized points so far repaired at a cost of N11 billion,” he said.

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he NNPC revealed that i t s p e n t o v e r US$42.952million to execute a two-phase repair work which started in September, 2009 on 74 damaged points in System 2C-1. Escravos –Warri Crude Oil Pipelines to enable the start up of the Warri and Kaduna refineries.

The GMD used the occasion to commiserate with the Acting IGP and the Police high command on the demise of his wife as well as the death of DIG John Haruna and some Police officers in the Jos helicopter crash.

In his remark, the IGP pledged the readiness of officers and men of the Force to work with the NNPC in achieving its mandate to the nation.

M r. A b u b a k a r a l s o announced the formation of a special Police Anti-Pipeline vandalism Squad dedicated to the protection and security of the nation’s vast outlay of oil and gas pipelines.

He also declared what he termed “zero tolerance and no laxity on the issue of pipeline vandalism” and pledged to “deal with any officer who fails to perform” in this regard.

Mr. Abubakar thanked the GMD for his show of concern and solidarity with the Police at this trying time.

committee probing the fuel subsidy regime, Hon. Farouk Lawan, says the report of the committee would be ready in two week’s time.

Lawan told newsmen at the National Assembly Complex, Abuja, that since conclusion of its public hearing on the subsidy regime, the committee had been working round the clock to present the report on the floor of the House of Representatives without further delay.

He appealed to Nigerians to give the committee time to do a thorough job before making the report public, saying: “We are prepared to present a report that covers all the areas we are expected to cover and also answer all the questions we are expected to answer in the cause of the investigation.”

Admitting that there had been pressure on the committee to make the report public, he assured that no amount of pressure would make the committee release an uncoordinated report, because according to him, “ we do not want to disappoint Nigerians.”

Lawan stated that apart from other findings from both the public hearing and submissions made by stakeholders in the subsidy regime, his committee has been able to identify the exact amount of petrol, diesel and kerosine consumption by Nigerians per day.

“These are part of our findings so far and I believe it will help the country determine how the subsidy will look like in 2012, especially when the exact number of liters of petroleum products on which subsidies should be paid have been identified”, he added.

On the companies and individuals who failed to appear before the public hearing organised by the ad hoc committee, the chairman said his committee had information about every company or individual that is involved in the subsidy regime controversy.

F

Focus

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Afren is a leading independent exploration and production company

Afren expects 46,000b/d from existing asset

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fren Nigeria is the local arm of the UK-quoted Afren Plc, an oil and gas company engaged in various exploration and production activities in Africa, and with increasing assets in Nigeria. In this interview with Clara Nwachukwu, the M a n a g i n g D i r e c t o r, M r.

A d e b a y o Ay o r i n d e , t e l l s Sweetcrude what attracted the company to Nigeria, at a time when it was a high risk venture in view of militancy and civil unrests in the oil-rich Niger Delta as well as how the company has weathered the storm.

Excerpts: What attracted Afren to Nigeria in spite of the perceived challenging business environment?

Afren was created in 2004 by a group of five founders, three of whom are Nigerian, so Nigeria has always been a key focus point and at the very heart of the Company.

On the most fundamental level, Nigeria is the most prolific oil and gas producing nation in sub Saharan Africa and accounts for around 80% of proved oil and gas reserves that have been discovered to date across the

region. The sheer scale of the resource base and availability of numerous partnership opportunities, coupled with our strong ties and Nigerian management, meant that Nigeria held an instant appeal for us as a place to do business.

Furthermore, a key early priority of Afren’s was to establish a solid platform of cash generative reserves and production that would enable us to build and grow the business on a sustainable basis. Nigeria lends itself perfectly to the achievement of this objective. In particular, Afren identified that there are a large number of discovered but undeveloped oil fields in Nigeria that have been licensed to indigenous operators, and that opportunities exist for an aligned partner that can assist in the effective development and monetisation of these assets through providing access to capital and the necessary technical and operational capacity. We have successfully forged strong partnerships in Nigeria that have yielded two Greenfield developments to date, the Okoro field in partnership with Amni and the Ebok field in partnership with Oriental, both of which are offshore Akwa Ibom. We have several other partnerships at assets across the exploration and

appraisal stages that will be matured into the development projects of tomorrow and allow us and our partners to continue to realise some of Nigeria’s vast potential that resides in these undeveloped assets. It was a founding vision of the Afren’s to work in close partnership with indigenous companies and host governments. We like to think that we have demonstrated our business model to be a highly effective and productive partnership based approach for all concerned.

I n 2 0 0 9 , Af r e n t o o k i t s partnership model to the next level by supporting the establishment of First Hyrdocarbon Nigeria Limited, an indigenous company in which Afren holds a 45% interest, investing directly in the indigenous sector as well as providing technical and financial support. Afren also acts as Technical Services Provider to FHN, and will provide assistance and support to FHN as it seeks to grow its indigenous platform in Nigeria.

Were there assurances from government and in what ways if any, to convince Afren to come to Nigeria?

Afren’s decision to invest in Nigeria was driven by the

Afren’s decision to invest in Nigeria was driven by the business opportunities we knew to exist, rather than any specific assurance or communication from the government

business opportunities we knew to exist, rather than any specific assurance or communication from the government, but the government’s focus over the last ten years on trying to deepen indigenous production has contributed to the success of our business model.

Afren seems to have quite a large portfolio of assets in Africa but what is driving investment decisions in favour of Nigeria?

Our asset base across Africa is at different phases of maturity.

Our East African portfolio of assets is largely focused on exploration and we will be drilling several wells in the

region in 2012, investing a considerable amount of money.

Our asset base in Nigeria is more mature and commercially advanced. We have existing production at Okoro and Ebok and we have strong technical knowledge of the surrounding areas where we are also investing in exploration and appraisal wells in 2012. We have seen early positive results from this work having recently made a new oil discovery with the Okoro East exploration well in partnership with Amni and look forward to drilling key wells at the Ebok/Okwok/OML 115 area in partnership with Oriental as

CONTINUES ON PAGE 8

F

Focus

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Afren expects 46,000b/d from existing asset CONTINUED FROM PAGE 8 the year progresses.

Fundamentally, we believe that the opportunity set in Nigeria for Afren remains exceptional. Having proven our partnership model with Amni and Oriental, and expect average daily production of between 42,000 to 46,000 boepd from our existing asset base in 2012 we are positioned as the ‘partner of choice’ for indigenous companies looking to realise value. When you consider that 37% of the oil and gas licences in Nigeria are held by indigenous companies, but only 4% of those are currently producing oil then the opportunity is clear for further growth.

W h a t h a s b e e n Af re n’ s experience since investing in Nigeria and what value added apart from funding has it brought into the stable?

Given the success of our operations our experience has generally been very positive.

Afren was founded with the objective of supporting the indigenous sector and so the value add that we bring to Nigeria can be quantified in a number of ways.

Firstly, simply by providing the access to finance and technical support required for indigenous companies to achieve production we are supporting the growth of the indigenous sector in the upstream oil and gas sector in Nigeria. Increasing the countries reserves base and developing the indigenous sector both significantly increase the value from the oil and gas sector that remains in Nigeria and enhances long term sustainability.

Secondly, Afren has had a clear policy since it was founded to build capacity in the countries where we operate. We do this in a number of ways. Internally, 95% of our permanent staff in Nigeria, are Nigerian and we are very proud of this. Of the 95% of the Nigerian staff on our facilities, about 40% are local indigenes of those communities.

We provide our partners with the training and exposure they require to grow into strong indigenous producers in their own right. We have deliberately focused on building a strong network of indigenous contractors in support of our

Afren, an oil and gas group

The skills acquisition programme is designed to provide youths with intensive training to acquire vocational skills like welding and fabrication, mechanic and auto repairs, crane operatorship, auto electrical and electronics repairs, computer information and office management, fashion designing and hair dressing operations, and work closely with companies including Century Energy Services, Intels and Amazon. These contractors directly or indirectly provide several thousand jobs to Nigerians within the Nigerian upstream sector. As a result, a substantial portion of our procurement and staffing costs are spent locally and form a core component of our local content policy.

F i n a l l y, E n c o u r a g i n g entrepreneurship and developing the capacity of youths in our host communities and the

surrounding areas is at the centre of our approach to community development. We have focused our CSR programmes on capacity development programmes in the Niger Delta, from establishing skills development programmes for youths and building a youth empowerment centre, to working closely with universities in the region to educate and train the next generation of Nigerian oil and gas professionals. The skills acquisition programme is designed to provide youths with intensive training to acquire vocational skills like welding and

fabrication, mechanic and auto repairs, crane operatorship, auto electrical and electronics repairs, computer information and office management, fashion designing and hair dressing.

Cash grant and the relevant tools and equipment required to open a workshop or business in their area of specialisation is provided.

The youth empowerment centre will have the capacity to host training classes for youths and includes facilities such as internet access, autocad software, a printing press and a photographic studio amongst others, with the hope that youths can gather to learn new and productive skills which can be translated into future careers, allowing them to make a clear and positive economic contribution to their communities and the state as a whole.

Having been in Nigeria for a while, how would Afren describe its experiences so far in terms of value for money, oil a n d g a s p ro d u c t i o n , t h e business environment and future prospects?

Since we were established in 2004 Afren has successfully completed two world class

projects in Ebok and Okoro, grown an asset base across the c o u n t r y, e x t e n d e d o u r partnership model into direct investment into the indigenous sector through FHN and are now positioned for strong production and reserves growth from our existing portfolio in 2012. We are already the leading independent upstream oil and gas company operating in Nigeria and Nigeria remains at the centre of our development plans. With the government’s new drive to pass the Petroleum Industry Bill likely to unleash a new wave of investment into the sector and the potential I have already described inherent within the indigenous sector I think the future prospects are extremely bright.

What challenges did Afren face, how was it able to overcome them, and going for ward, what are your expectations from operating in Nigeria’s oil and gas sector?

Nigeria can sometimes be a challenging place to do business, but the combination of our local knowledge, access to finance and strong technical team have allowed us to overcome any challenges that we have faced.

Gas

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Eni hits huge gas in Mozambique N W

E S

M

APUTO – Italian oil giant, Eni, announced, Monday, another new giant find on its Area 4 block off Mozambique, which has expanded the size of gas discover y so far in the concession.

Eni said its Mamba North East 1 drilled probe in the eastern part of the block has increased resources at the find by at least 10 trillion cubic feet after hitting a total of 240 metres of gas pay in multiple high-quality Oligocene and Eocene sands. Of this, 8 Tcf is located exclusively in Area 4.

Law Makers in session

Senate lambasts DPR over delay of gas projects Inalegwu SHAIBU

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he Senate has lambasted the Department of Petroleum Resources (DPR) over its inability to fast-track the installation of gas pipelines to facilitate the supply of gas generated in the country.

The Senator Nkechi Nwoagu-led committee on gas had summoned DPR to explain the continuous inclusion of the construction of gas pipelines across the country in the national budget since 2009 with a poor record of 8.3 per cent progress report.

The project for the installation of the monitoring equipment was contracted to

Riverman by the DPR to provide definite figure on the amount of gas generated as well as revenue accruable to the country.

But the project has been left uncompleted since it was awarded in 2009.

The committee held the DPR responsible for the delay, stressing that it failed to enforce its powers to ensure that the IOCs comply with the installation of the gas monitoring device.

Nwaogu lamented that it was appalling that since 2009 only 10 out of the 116 projected installations across the country were completed.

She said: “We can’t be saying we are seventh largest producer of gas and the records for the gas generation are abysmal. The

commitment by DPR to perform is not there. We are being denied the revenue we are expected to derive from gas.

“You sit back and you are the r e g u l a t o r. A r e t h e o i l companies going to tell DPR when to allow them access to use the equipment before you enforce the compliance? For oil companies to tell you what they have and you record it is unacceptable.”

Deputy Director of DPR gas, Mr. Oliver Okaraorjiakor, in his defence explained that the oil companies were hesitant to allow installation on grounds of compatibility of technology.

He also added that the IOCs were afraid that their systems would be hacked if the monitoring system was installed.

Are the oil companies going to tell DPR when to allow them access to use the equipment before you enforce the compliance? For oil companies to tell you what they have and you record it is unacceptable

“This new discovery further improves the potential of the Mamba complex in Area 4 off Mozambique now estimated at at least 40 Tcf of gas in place,” Eni said in a statement.

The latest well was drilled to a total depth of 4560 metres and in a water depth of 1848 metres at a location 50 kilometres off the Capo Delgado coast, about 15 kilometres north-east of the initial Mamba South discovery and south-west of the subsequent Mamba North find.

It proved reservoir continuity and pressure communication with the earlier Mamba South 1 and Mamba North 1 wells, according to the company.

The new find looks set to strengthen the case for a landbased liquefied natural gas development, as well as further fuel prospectivity in the hot East Africa play after recent discoveries in neighbouring Tanzania.

Eni plans to drill at least another four wells in nearby structures this year to assess the upside potential of the Mamba complex.

The company is reported to be seeking farm-in partners for Area 4 to help it bear the hefty costs of development, with BP, Shell and Total said to be among interested players.

The Italian firm holds a 70% interest as operator of Area 4, with partners Galp Energia (10%), Kogas (10%) and stateowned ENH (10%).

Fee dback

Feedback

Oil exploitation, the environment and crimes against nature

The toxic crude seeps into the ground and is taken up by the plants’ roots.

Furthermore, as most of the spills a r e accompanied by fire, most of the impacted a r e a i s completely degraded leaving only thick encrusted earth which is black in colour.

Ledum MITEE

L

agos - SINCE the first commercial production of oil in Nigeria in 1956, it has signalled the beginning of a profound transformation of Nigeria’s political and economic landscape. Since the 1970s, oil has accounted for over 80 per cent of the Nigerian government’s revenue and 95 per cent of the country’s export earnings.

All of Nigeria’s oil and gas come from its Niger delta region which sustains the largest wetland in Africa and one of the largest wetlands in the world.

Consisting of approximately 20,000 square kilometres of mangrove forest, fresh water swamp, coastal ridges and fertile dr y land forest, seasonal flooding and sediment deposits over thousands of years have made the land in the region fertile.

The immeasurable creeks and streams have in the past, provided habitat for an abundance of fish and marine wildlife. Abundant rainfall and the fertility of the land, rivers and sea have set the conditions of the Niger delta to have one of the highest rural population densities in the world.

The Niger delta region is of tremendous strategic economic importance to Nigeria. This is because Nigeria’s main strategic economic resource – oil and gas – are concentrated in the region and since these minerals constitute the country ’s economic live-wire, the Niger delta region could rightly be regarded as holding the key to Nigeria’s economic prosperity

and greatness.

While the presence of these huge reserves of oil and gas has turned the Niger delta into the economic “jewel in the Nigerian crown,” the exploitation of these resources have been carried out in such unsustainable manner that not only are the people denied the benefits derivable there from, but their very means of livelihoods and sustenance have been threatened thereby.

In spite of the stupendous wealth that have accrued from decades of oil activities and production in Nigeria, there is surprisingly little good quality independent scientific data on the over-all or long term effects of hydrocarbon on the oil producing communities. There is no doubt, however, that oil pollution and pollution from oil activities has clearly and seriously damaged the environment and the livelihood of those living in the oil producing communities.

The moist, damp and humid forest within the lowland rain forest environment is home of such crops like cassava, yam, banana, pepper which are grown by the people for their basic subsistence. As the incessant spill occurs, it spreads into farmlands and water bodies.

Muddy pools of weathered crude The land is baked and the once fertile soil turned into a black and hard residue devoid of nutrients. Muddy pools of weathered crude are found in several places at spill sites while the deforested area are recolonised by invasive seedlings of various species.

Apart from the crops, marine life also suffers from the toxicity of oil pollution as most of the oil pollution spread to the tidal rivers and streams. When this happens, the mangrove forest, home to most types of fishes and seafood, become heavily contaminated and the fishes find it difficult to survive. Sheen of oil can be seen on the rivers even long after oil pollution had occurred.

The environment and conflict Whilst these environmental devastating effects of oil production are known, very little time is taken to ascertain their role in the crisis situation in the region.

In this respect it would be appropriate to start with the fact that like, most indigenous peoples, the peoples of the region, have traditions and customs deeply rooted in nature which have helped them to protect and preserve the environment for

generations. The land on which they lie and the rivers which surround them are viewed by them not just as natural resources for exploitation but with deep spiritual significance.

Land is viewed as the abode of our ancestors from where they oversee our lives, it is also a god and we revere it as such. Forests are not a collection of trees and the abode of animals.

This is why some forests and trees that we consider sacred cannot be cut indiscriminately without regard to their sacrosanctity. When these are destroyed or desecrated, the people do not see the destruction of some factor of production but the abode of their ancestors, their sacred grooves and shrines which is their bounden duty to defend and protect otherwise they suffer some severe consequences.

An interesting case is that the Yorla Oil Field in Ogoni, which has witnessed some of the worst scenes of oil spills and blowouts. The area occupied by the oil wells that erupted causing the pollution, was an ancestral forest area with deep spiritual significance to the community.

Due to the veneration the community attached to the forest, it was a conserved area by the community. But with the discovery of oil, Shell moved into the area and destroyed a large part of the forest, whilst the remaining part of the forest was destroyed during the oil pollution and the conflagration that accompanied it. Till today the people hold on to the view that the eruptions and mysterious deaths in the community are caused by the anger of their ancestors.

Setting the above dominant and pervasive African concept of the environment against the fact that the resources are being exploited for the Nigerian state by foreign multinational

When these are destroyed or desecrated, the people do not see the destruction of some factor of production but the abode of their ancestors, their sacred grooves and shrines which is their bounden duty to defend and protect otherwise they suffer some severe consequences

11

corporations with little understanding of, and scorn regard for our spiritual attachment to nature and the environment, an inescapable fault line immediately emerges.

Since these multinationals provide the technology for translating the rich resources of the Niger delta into wealth and in fact are operators of the joint venture arrangement with the Nigerian state, they practically control the key to the country’s economic prosperity.

This grip which these companies have on the country ’s economy is occasionally used by them to prod or even blackmail the government into acts of violent oppression. One notable instance was during the height of the Ogoni campaigns, when in requesting the Abacha regime for permission to set up a special force for its protection, Phil Watts, the then Managing Director of Shell wrote: “We must emphasize that SPDC produces more than 50 per cent of Nigeria’s oil which has consequential major impact on the country ’s economy. To ensure a continuation of operations at the present level requires the provision of maximum protection … SPDC will fully support the cost of setting up the contingents.”

The Nigerian state, therefore, are always ready to deploy its security forces at the disposal of the oil companies and for the protection of the oil exploitation companies who are always virtually at conflict with local communities.

This has led local communities to allege, with justification, that there is a conspiracy between the oil companies and the Nigerian state not only to exploit them but also to repress and even kill them. This produces a burning sense of injustice on which the various forms of agitations in the region potentially feeds.

It becomes extremely difficult to counter such arguments in the face of available evidence.

Although under Nigerian law, a licencee of an oil mining lease is precluded from exercising its mining lease where, inter alia, the land is a sacred forest, yet every day dwelling houses, shrines and sacred grooves are being destroyed for oil exploitation. Also there does not appear to have been a single prosecution of corporations for environmental pollution despite the huge oil pollutions with devastating consequences that have been recorded in Nigeria.

Power

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Electricity Consumer

Electricity consumers to suffer in the short term Clara NWACHUKWU

D

espite assurances by the Federal Government that electricity consumers will not suffer unduly on account of the 11 percent tariff increase that will become effective by June 1, data has shown that some classes of customers will actually be paying much more than initially anticipated.

These classes of customers, particularly the high residential and commercial customers who are expected to pay specific fixed monthly charges, will suffer more than any other classes of customers.

In a breakdown of the tariff obtained exclusively by Sweetcrude, the Chairman of the Nigerian Electricity Regulatory Commission, NERC, Dr. Sam Amadi, pleaded for policy understanding in order to attract the much needed investment into the sector.

Aggregated tariff Under the Multi Year Tariff O r d e r, M Y T O s t r u c t u r e , replicated from the British system, tariffs are aggregated and electricity consumers are grouped into various classes of

R1to R4 for residents; C1-C4 for the commercial and industrial users and special consumers.

But Amadi noted, “Till date, we have not granted any consumer a special status. Approval on this will depend on certain terms and conditions.”

Consumers grouped under R1 will be the least paying, as their tariff is not expected to exceed N4/Kwh. This class of consumers are said to be paying less and include the low income earners, and those in the rural areas, who are benefiting from the N50billion Rural Electrification Fund.

I

n order to standardise costs across the country, there will be no fixed charges and maintenance costs, so that consumers in this class will pay between N3.30 to N4/Kwh. For the R2, which applies to the middle income consumers, tariff will rise by 11% and are expected to pay between N11 and N12/Kwh. At this rate, the NERC boss insisted that costs are still highly subsidised by government, without which they would have paid between N22 and N24/Kwh. However, unlike the R1, this

class of consumers will pay at “a fixed charge of N500 per month to cover investments.”

The R3 and R4 customers will pay the highest among all the residents, as these are the high income earners who live in the big and mega estates across the country such as Maitama, Asokoro in Abuja, and VGC, Banana Island and a host of many others.

The new tariffs for these classes of consumers are cost directly by direct metering and will be determined under the agreements with their estate managers.

Like for the residential group of customers, the new tariff also considered the vulnerability of the C1, which comprise the Small and Medium Enterprises, SMEs. The C1 will pay between N12 and N14/Kwh in addition to a fixed monthly charge of between N500 and N600 depending on size.

This class of customers are also enjoying subsidy because of their disadvantaged position. “They do not enjoy the economies of scale that the big companies enjoy and so they can be run out of business at any given time as we have been seeing happening,” Amadi said.

He explained that the subsidies

Like for the residential group of customers, the new tariff also considered the vulnerability of the C1, which comprise the Small and Medium Enterprises, SMEs being enjoyed by the R1, R2 and C1 customers are derived from the federal allocations.

O

n the other hand, the C3and C4 customers will not only pay N26/Kwh but also pay a whopping fixed monthly charge of N160,000.

Defending the rational for the continued subsidy to some classes of customers, the NERC boss said this is so that they are not unnecessarily hurt or run out of business by high tariffs.

“The new tariffs have been put in such a way that variables are considered, as the tariff policy must support economic imperatives as well as support enterprise. So if you punish them with prohibitive costs, the economic purpose will be defeated.”

Amadi further argued that the new tariff, will, among other things, “mitigate risks,” as it is part of the measures to guarantee returns on investments, and has taken into considerations inputs from other stakeholders, investors and financiers.

According to him, “The urgency now is to attract investments to the sector, and going forward, ensure there are no distortions in the market so that investors can recover their costs and consumers get value or money through efficient and reliable services.

Short term losses However, despite assurances of consumers paying less than they are generating power on their own, in the short term, they will actually be paying more,

Power NCP approves Canadian firm for transmissions

Transmission lines

Oscarline ONWUEMENYI

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BUJA - The N a t i o n a l Council on Privatisation (NCP) yesterday approved a Canadian firm, M a n i t o b a H y d r o International for simultaneous opening of their financial proposal and commencement of contract negotiations as the management contractor for the Transmission Company of Nigeria (TCN).

Following NCP’s approval at a meeting presided over by Vi c e Pr e s i d e n t N a m a d i Sambo, should the financial bid sail through, Manitoba will take over management TCN for three years.

Three firms- Manitoba, Power Grid Corporation of India Limited and ESB International of Ireland were invited to place bids by the NCP. It would be recalled that the NCP, at its third meeting for 2010 which was held at the

Presidential Villa, Abuja,had invited Grid of India, ESB International of Ireland and Manitoba Hydro of Canada to re-submit technical and financial proposals in line with current system and industry information for the management contract for Transmission Company of Nigeria (TCN.) TCN is one of the eighteen successor companies carved o u t o f Po w e r H o l d i n g Company of Nigeria (PHCN.) It combines the functions of a transmission services provider, a system operator and a market operator, all of which are central to the sustainability and development of the electricity sector.

Following unbundling, TCN emerged as one of the successor companies of PHCN and was scheduled for a Management Contract in order to transit the company into a financially sustainable, stable, selfsufficient and market-driven company.

For the purpose of

It combines the functions of a transmission services provider, a system operator and a market operator, all of which are central to the sustainability and development of the electricity sector procuring a management contractor for TCN, the BPE retained the services of British Power International (BPI) who were initially engaged by Power Holding Company of Nigeria (PHCN) to provide advice on the engagement of an Operation & Maintenance (OM) contractor and other issues like the development of Management Information Ser vices and Corporate Governance procedures.

T

he technical proposals were evaluated based

on their transmission-lossreduction, network improvement and capacity transfer strategy. The intent is to have a transmission company that will be capable of containing the anticipated changes in the Nigerian Electricity Supply Industry and Market.

According to a statement from the Head of Media Relations in the BPE, Mr. Chukwuma Nwokoh, the management contract is designed to achieve the reduction of electricity losses during transmission, and

13

provide for the achievement of certain predetermined targets that would improve grid security and general performance.

He added, “The contract also has reward and penalty clauses as incentives for success while providing efficient management of government investments. It ensures adequate and equitable generation dispatch according to a fair merit order based on sound regulatory principles, ensure fair market settlements between electricity traders; and provide for skills and expertise transfer to Nigerian counterparts who will serve in deputy and other positions on the management staff of the Management Contractor.”

Manitoba Hydro is the electric power and natural gas utility in the province of Manitoba, Canada. Founded in 1961, it is a provincial Crown Corporation, governed by the Manitoba Hydro-Electric Board and the Manitoba Hydro Act. The company presently operates 15 interconnected generating stations. It has more than 527,000 electric power customers and more than 263,000 natural gas customers. Since most of the electrical energy is provided by hydroelectric power, the utility has low electricity rates.

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t the deadline for submission of the technical bid and financial proposals on Feb 29, 2012, two bids were opened. The result of the evaluation of the technical proposals showed that only Manitoba Hydro International of Canada met the benchmark “ which led to its being appointed as the management contractor for TCN”, Mr Atedo Peterside who briefed newsmen alongside the DG, BPE, Ms Bolanle Onagoruwa said.

NCP also approved the constitution of a six-member team to negotiate with M a n i t o b a H y d r o International, which is the electric power and natural gas utility in the province of Manitoba, Canada.

Founded in 1961, it has considerable experience in managing transmission systems via management contract in many parts of the world including African countries.

Financing

14

Oil facilities

NEITI to conclude NNPC, others‘ audit in October

A

BUJA - The N i g e r i a n Extractive Industries Transparency Initiative (NEITI) says it will conclude audit of the oil and gas, and solid minerals sectors in October this year.

The agency began a comprehensive auditing of the sectors in February.

NEITI’s Director of Communications, Dr. Orji Orji, disclosed this to the Europe Correspondent of the News Agency of Nigeria (NAN) in London.

He listed organisations being audited to include the Nigerian National Petroleum Corporation (NNPC), Department of Petroleum Resources (DPR), Federal I n l a n d R e v e n u e Service(FIRS), Central Bank of Nigeria (CBN) and the Office of the Accountant General of the Federation.

“While the audit of the oil

data required for the exercise.

NEITI’s comprehensive audit of the establishments was to sanitise the sectors, enthrone good business ethics and restore investor confidence and gas industry covers the period 2009 to 2011, that of the solid minerals is to cover 2007 to 2010,” Orji said.

He said NEITI’s comprehensive audit of the establishments was to sanitise the sectors, enthrone good business ethics and restore investor confidence.

“All companies operating in the oil and gas and solid minerals sectors in the country are compulsorily required by NEITI law to open its books and provide relevant information and

data, on demand for purposes of the audit,” he stressed.

Orji further explained that NEITI had already designed audit templates with detailed questions, information and

H

e said the templates were recently publicly presented to all companies doing business in the Nigeria’s solid minerals sector.

Orji described as encouraging, the cooperation of listed companies for the exercise, but warned that companies that failed to respond to audit query risk withdrawal of licence or prosecution.

He explained that the scope of the audit, largely include the determination of the revenue accruable to government from the companies and how much of it went into the Federation Account.

NEITI was inaugurated in 2004 with the mandate to promote due process and transparency in the extractive industry.

$12.4bn oil windfall: Judgment on Okigbo report for April 27 Ikechukwu NNOCHIRI

A

BUJA – A Federal High Court in Abuja, has fixed April 27 to deliver judgment in a suit seeking to compel the Central Bank of Nigeria, CBN, and the Attorney General of the Federation, AGF, to disclose how the $12.4 billion oil windfall money that accr ued to the Federal Government between 1988 and 1994, was spent.

The suit was filed before the High Court by six civil society groups led by the SocioEconomic Rights and Accountability Project, S E R A P, u n d e r t h e Fundamental Rights (Enforcement Procedure) Rules 2009.

Though the judgment has been stalled since last year when hearing was concluded on the matter, however, Justice Gabriel Kolawole, today, ordered all the parties t o a p p e a r o n t h e n ex t adjourned date to re-adopt their processes to enable him to give verdict on the case.

Financing

Afren boosts profits by 173% despite Nigerian challenges

Afren says plan to raise oil output on track

L

AGOS - UK-listed explorer Afren, which maintains a stake in Nigeria’s oil sector, has reported a 173% rise in aftertax profits on continuing operations.

The company said it has earned an after-tax profits of $125 million in 2011 despite major delays to its operations in Nigeria.

Its shares were hit earlier this year over prolonged delays to the full startup of its key Ebok offshore oil field, which got underway in the second half of the year and added some $272 million to Afren’s turnover.

A 37% rise in realised oil prices to $1.09 also helped hike turnover to a company record of $597 million from 2010’s $319 million.

While net working interest production rose by a third to 19,154 barrels of oil equivalent per day over the year, output still came in well short of the original 2011 forecast for 25,000 barrels thanks to the Ebok delays.

Afren says it is now in position to significantly ramp

up output to between 42,000 and 46,000 equivalent barrels this year.

Chief executive Osman Shahenshah said the results reflected the “growing maturity” of the seven-year listed company, pointing out

proven and probable reserves were up 132% during 2011 to 185 million barrels of oil equivalent.

Afren’s acquisition of a 60% interest in two production sharing contracts in Kurdistan were behind much of this

increase.

Shahensha said that Afren’s exploration programme for this year was already off to a good start with January’s oil find at its Okoro East oil field in Nigeria.

India dedicates 2,200-km GAIL natural gas pipeline

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ndian Prime Minister Manmohan Singh dedicated GAIL (India) Ltd.’s 2,200 km Dahej-VijaipurDadri-Bawana-NangalBhatinda natural gas pipeline, which extends through northwestern India. GAIL said the project will spur industrial development across 40 industrial hubs, with the potential to supply 3,500 Mw of power, 1.8 million tonnes/year of urea production, and cities along the pipeline with natural gas for industrial and domestic applications.

Dahej-Vijaipur-Dadri-

Bawana-Nangal-Bhatinda crosses Gujarat, Madhya Pradesh, Rajasthan, Uttar Pradesh, Haryana, Delhi (UT), Punjab, and Uttarakhand states, both interconnecting with the existing network and meeting unsupplied demand northern India. Singh also expressed his hopes the pipeline’s extension would soon carry the gas from the proposed TurkmenistanAfghanistan-

Pakistan-India pipeline into rural parts of the country. The pipeline cost roughly Rs. 13,000 crores.

GAIL has been taking a multipronged approach to meeting India’s growing natural gas demand.

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Ghana rakes in $69 million in oil revenue

C

itifmonline –The Bank of Ghana[BoG]has announced that the country’s total savings from oil revenues have reached $69 million dollars.

This is contained in a report published on the central bank’s website.

According to the report, about $14.4 million dollars has accumulated in the heritage fund which is meant for future generations.

Meanwhile the stabilization fund which is meant to cushion the country in times price volatility has accrued $58 million dollars.

These are monies from three crude oil liftings from the jubilee field even though there were a total of four liftings last year worth about $444million dollars.

Obama Power-Plant Rule Signals Demise of ‘ Old King Coal’

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resident Barack Obama’s proposed carbon-dioxide rules for power plants effectively prohibit new coal power plants, buttressing a shift away from a power source that fueled the Industrial Revolution to cheap natural gas.

Obama’s Environmental Protection Agency proposed the first limits on greenhousegas emissions from U.S. power plants yesterday, setting a standard natural-gas facilities can meet. A new coal plant would need carboncapture technology, which industry advocates say isn’t available at competitive rates.

With natural gas at decadelow prices, no new coal plants are being built, with or without the EPA r ules, according to the agency’s analysis. For critics, from mining companies and utilities to coal-countr y lawmakers, the rules are the latest in a string of EPA regulations they say are meant to put the fossil fuel out of business.

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Insurance

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T

he actions of the Boko Haram sect has led to e c o n o m i c paralysis in some Northern states of the country, however experts are of the opinion that collaboration between the government and the insurance industry can salvage the situation going forward. Rosemary Onuoha reports As terrorism daily assumes a widening dimension, international reinsurance companies no longer extend reinsurance cover for terrorism to developing economies battling with the menace. The reason for this trend, according to findings, is that these international reinsurance firms are of the opinion that most developing economies cannot afford reinsuring their terrorism risks in the international market due to the huge cost involved.

As worrisome as this may seem, experts are insisting that insurance against ter rorism is necessar y; therefore, countries affected by this development must either choose to combat the rising threat of terrorism or sink with it as the case may be.

In Nigeria, the fear of Boko Haram has adversely crippled economic activities in some Northern states even when the federal government, on daily basis, insists that it is on top of the situation. Even while government claims to be on top of the situation, investigations reveal that there is no concrete insurance plan for providing compensation for loss associated with terrorism. To this end, stakeholders are calling for collaboration between the government and the insurance industry in the fight against terrorism.

Chairman of New India Assurance Company Limited, Mr. Annur Sekar said that terrorism is a serious cause for concern in Nigeria, as such, the insurance industry must wake up to the challenge with the full support of the government.

Chairman of Nigerian Insurers Association, NIA, Mr. Olusola Ladipo-Ajayi , stated that with collaboration between all stakeholders, terrorism can be defeated.

For the Former Managing Director of Financial

Terrorist attack

Salvaging economic risks through insurance Institutions Training Centre, FITC, Mr. Oladimeji Alo, there is no better time for terrorism insurance to be put in place than now.

A l o s a i d “A s o u n d understanding of the Nigerian environment should propel the government to embrace insurance to guard against losses which could emanate from terrorism.”

The collaboration If only the insurance industry can get the backing of the government, Sekar said that operators in the sector can come together and create a terrorism pool.

He said “In India we have gone through similar situations in the past.

Following the 911 incident, the overseas market

withdrew the terrorism cover to the Indian market. And what we did in India is that we came out with our terrorism pool with the backing of the regulator and we have a reinsurance corporation. The reinsurance company became the pool manager and the rest of the market players became participants. So we started operating a terrorism pool in India and over the years it has become bigger and bigger and it has been able to meet the domestic requirement of the insured.

But if the risk is very large, what we do is that we go to the overseas market and try to obtain a standard terrorism policy. But the pool is working very satisfactorily and I think in Nigeria, something like this can be taught up by the

regulator here. The local reinsurance company can become a pool manager and the rest insurers can participate in that pool and we find out that this kind of arrangement works very well and one doesn’t have to look to the outsiders.”

The challenge As elaborate as the call for collaboration in the fight against terrorism may sound the biggest challenge to the growth of the Nigerian insurance industry is the government itself.

Managing Director of Custodian and Allied Insurance Plc, Mr. Wole Oshin stated “In other economies, gover nment picks on insurance for progress. Unfortunately gover nment in Nigeria

doesn’t even know insurance.”

He s t re s s e d t hat t he government needs to recognise insurance, adding “A situation where budgets are discussed and insurance industry is not even invited means that government does not understand the importance of insurance.

Our primary and fundamental objective as an industry is to stabilise the economy, produce savings and stabilise the risk of government. But government has not looked at insurance because they don’t understand it because if they do, then the will give priority to insurance because. In advanced countries, the government can’t do anything without the insurance industry. They can’t even make policies without insurance. Here insurance is not in the centre stage yet and I think it is a critical thing,” Oshin stated.

Insurance Experts task insurers on local content law

P

r o f . J o e Irukwu, an insurance expert has called on insurance operators to take advantage of the local content law and participate actively in the oil and gas sector.

Irukwu who said this in Lagos regretted that the level of discipline on the part of insurance operators have dropped drastically despite enabling laws which they can capitalise on.

Irukwu said “Presently there are enabling laws to guide the practice of insurance, but it is so sad that the level of discipline has dropped drastically despite these laws.”

Irukwu, who is one time Managing Director of Nigeria Reinsurance Plc noted that the high level of discipline in the insurance industry in the 60s and 70’s spurred the industry to growth and development despite the absence of enabling laws.

Irukwu who decried the dearth of discipline in the insurance industry now, lamented that the sorry state of affairs in the sector presently was not the case when they were still very much active.

Irukwu therefore called on insurance practitioners to ensure that they abide by the laws guiding the profession adding that the popular saying by international oil companies that Nigerian insurance companies lack capacity to underwrite oil and gas risk has been described as a false statement as they are merely talking for their pockets just to encourage capital flight.

The insurance expert stressed that the country truly have the capacity to do the 70 per cent oil and gas business which the local content law permits her to cover.

According to him, the insurance operators must ensure that they actually underwrite oil and gas

Prof. Joe Irukwu

The country truly have the capacity to do the 70 per cent oil and gas business which the local content law permits her to cover business and not fronting for international underwriters as has been the case all along.

In his words “These people

that keep saying that we don’t have capacity are only talking for their pockets and we the operators in the insurance sector must actually underwrite and not front for the captive insurers of these oil majors.”

He charged insurance practitioners to desist from aiding oil companies operating in the country to defy rules and regulations guiding oil and gas risk underwriting for their selfish gains.

According to him, ordinarily the oil majors want to play by the rules but some insurance practitioners who want to cut corners force them to do otherwise.

In his words “Sometimes

these oil majors operating in the country want to obey the laws guiding oil and gas risk underwriting, but we always find a reason for them not to.”

According to Irukwu, the development is not encouraging because the oil companies have tended to see the practice as the standard norm in the industry, thereby throwing crumbs to Nigerian insurance companies while taking the huge chunk of oil business abroad.

Irukwu lamented that it is the high rate of indiscipline in the insurance industry that has made the practice to go on unabated for a very long time, calling on practitioners in the sector to imbibe the character of discipline.

19 Board to submit risk management declaration to NAICOM

A

s sweeping reforms continue in the insurance industry, the Board of Directors of companies in the sector must now be involved in the risk management process and must submit a risk management declaration to the National Insurance Commission, NAICOM, at the end of every financial year.

The declaration relating to each financial year of the company shall be signed by at least two directors along with the annual returns and accounts of each company.

According to the guideline for developing a risk management framework for insurers and re i n s u r e r s i n N i g e ri a recently issued by NAICOM, from 1st July, 2012, any company that does not comply with the guideline will be duly sanctioned by NAICOM. A risk management framework is the totality of systems, structures, policies, processes and people within the company by which the company identifies, assesses, mitigates and monitors all inter nal and exter nal sources of risk that could have a material impact on the company’s operations.

The guideline sets minimum standard required from each and every insurer and reinsurer by which they can provide a reasonable assurance to the C o m m i s s i o n , p o l i c y h o l d e r s , shareholders and other stakeholders that the risks to which they are exposed are being soundly and prudently managed.

As a result, the Board of all insurance and reinsurance companies must provide NAICOM with a Risk Management Declaration stating that, to the best of its knowledge and belief, having made appropriate enquiries that the company has systems in place for the purpose of ensuring compliance with the guideline.

Labour

Industrial unrest looms in power sector …Labour accuses FG of violating

agreement

Protesters Victor AHIUMA-YOUNG

I

NDICATION of a looming industrial unrest in the n a t i o n ’ s Po w e r sector over claims by three workers’ unions in the sector that the Federal Government through the Ministr y of Power, has breached agreement reached with them.

The unions have already petitioned the Minister of Labour and Productivity, C h i e f E m e k a Wo g u , intimating him with the perceived breaches and the impending industrial unrest should their grievances remained unaddressed after March 31st.

Sweet Crude gathered that if urgent steps are not taken to address the grievances of the unions, days ahead could witness industrial action by workers raising fears of further worsening of the

power situation in the country.

The three unions; of Electricity Employees, NUEE, Senior Staff Association of Electricity and Allied Companies, SSAEAC, and the Nigeria Union of Pensioners, NUP, Electricity sector, listed not less than areas where they claimed their agreement with the Federal Government was breached.

In the petition, NUEE, SSAEAC and NUP, lamented that it was quite unfortunate that they had subsisting collective agreements with Government on several issues yet they (unions) were still being trivialized, arguing that “it is worrisome that Government is running away from abiding with product of social dialogue/ negotiation.”

In the petition by Joe AJaero and Mansur Musa, General Secretary and President of NUEE,

respectively; Abiodun Ogunsegha and Bede Opara, General Secretary and President General of SSAEAC, respectively and Olukayode Ogunbiyi and Temple Ubani, Secretary and President of NUP Electricity Sector respectively, said “agreed in the last round of negotiation that the Corporate Headquarters of PHCN shall remain with full complement of staff until the final liquidation of PHCN when all the labour issues would have been resolved. Barely one week after this agreement was reached, the Power Ministry directed t h a t L P C s ( L a s t Pa y Certificates) of employees purportedly transferred to new companies be raised and issued. This remains one of the very disturbing issues discussed at the Negotiation and we maintained that it would be inappropriate to transfer staff from one company (a holding company)

to another (successor company) without determining the status of employment of the concerned employees.”

“Though, Government agreed that PHCN cannot be liquidated without complying with the required legal process but it amounts to inconsistency if action is being taken to wind down its headquarters by transferring its workers out, without concluding the negotiations and its implementation. Status quo ante should therefore be maintained to uphold the sanctity of PHCN Corporate Headquarters in line with the collective agreement reached in this regard.” ”Though 50% salary increase was agreed to as final settlement of the balance of 137% negotiated salary increase, effective 1stJune, 2011, it is distasteful to report that it is yet to be fully implemented.

20 INSECURITY: PENGASSAN calls for immigration policy review Victor AHIUMA-YOUNG

P

ETOLEUM and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, has i m p l o r e d t h e Fe d e r a l Government to review the nation’s immigration policy to check influx of illegal immigrants into the country.

Speaking on the spate of gunmen attacks and worsening security situation in the country, President of PENGASSAN, Comrade Babatunde Ogun, said that the review of the immigration policy would help in reducing crime rate especially the involvement of aliens.

According to Ogun, many people from Nigeria’s neighbouring countries come into the Nigeria without proper papers or documents and without purpose, lamenting the porosity of the nation’s borders and lack of commitment on the part of the officers and men of the Nigeria Immigration Service, NIS. He said “There have been several reports of cases of attacks on the Nigerians in the Northern part of the country by herdsmen from some neighbouring countries. More worrisome is the Al Quada dimension to the insecurity in the country. I think the review of the immigration policy needs to involve reorientation, training and retraining of the officers and men of the Nigerian Immigration on protecting our borders.”

He argued that the laxity of the policy also allowed foreigners to take jobs are meant for Nigerians, all in the name of expatriates, stating that whereas “Some of the foreigners who parade as expatriates have no specialization that can qualify them for being in the country. With this, they take our jobs and increase unemployment in the country and violate the Nigerian law on expatriate quota.”

Labour

21 NANDS advise government on labour issues Gabriel ENOGHOLASE

N

PHCN Workers outside the office premises

Union challenges BPE on PHCN ghost workers Victor AHIUMA-YOUNG

O

RGANISED Labour has described t h e leadership of the Bureau of Public Enterprises, BPE, as a serial liar that must not be trusted by any right thinking Nigerian.

Speaking against the backdrop of statement credited to BPE that no less than 17,000 ghost workers have been uncovered in the Power Holding Company of Nigeria, PHCN, the National Union of Electricity Employees, NUEE, Senior Staff Association of Electricity and Allied Companies, SSAEAC, and the Nigeria Union of Pensioners, NUP, Electricity sector, challenged BPE to

This is a high level of insensitivity that an employer/govern ment could deny its workers their legitimate remunerations and in-turn referred them as ghost workers publish the names of purported ghost workers.

Leaders of NUEE, SSAEAC and NUP did not stop at daring BPE to publish the names of the so-called ghost workers in PHCN, but to also to immediately forward the names of the supposed ghost workers to the appropriate agencies for arrest and

prosecution.

Pr e s i d e n t o f S S A E AC , Comrade Bede Opara whom spoke on behalf of other leaders, linked the purported ghost workers to the biometric verification exercise conducted by BPE and argued that not even all the regular employees that participated in the exercise were captured and cleared by the consultant saddled with the responsibility of verifying all employees in the power sector.

Opara expressed disgust with the whole process and noted that the affected staff had not been paid their monthly salaries and allowances since the controversial verification exercise because they were been refer red as ghost workers.

According to him, “Several of such staff which included chief executive officers,

general managers, national officers of the in-house union etc who are visible in their various work locations during the verification exercise were not captured and have been denied their monthly emoluments for over three months.

“This is a high level of insensitivity that an employer/government could deny its workers their legitimate remunerations and in-turn referred them as ghost workers. This is just an attempt to call a dog a bad name in order to hang it.

Definitely it would be an exercise in futility,” he said.

Corroborating Opara, General Secretary of SSAEAC, Mr. Abiodun O g u n s e g h a , a L a w y e r, alleged that many names were imported by the ministry of power during the verification exercise.

ATIONAL Association of Niger Delta Students has called on President Goodluck Jonathan to prevail on his M i n i s t e r o f P o w e r, Professor Bath Nnaji, to concentrate on how to address the issues raised by the unions in the power sector or get him sacked.

The students in a statement in Benin by their President, Comrade Grant Gbeloba, also called on the Minister to call his aides to order and stop harassing or intimidating the General Secretary of the National Union of Electricity Employees, NUEE, Comrade Joseph Ajaero, saying that they would no longer fold their hands and watch him being harangued for just no cause.

They said that they had watch with dismay series of newspapers sponsored publications alleging the roles purportedly played

by Comrade Ajaero in the ongoing power sector reform.

According to the statement, “ We have also noted with dismay the way and manner some job seekers who have becomes overnight patriots, sudede3nly made the workers’ struggle for labour issues to be fully resolved before the privatization of PHCN an Ajaero affair. One thing is clear; Comrade Ajaero is an employee of NUEE and therefore must carr4y out every instruction given to him by the union to the letter. It is therefore, unfortunate for anyone to single him out as an enemy o0f the reform programme of the power sector.”

“When the President forwarded the name of Prof. Bath Nnaji to the National Assembly for consideration as Minister, PHCN workers under the aegis of NUEE protested it. However, the President went ahead to appoint him.

Solid Minerals

22

Nigeria targets 3mt/yr of liquid steel Liquid Metal

Oscarline Onwuemenyi

A

buja – THE F e d e r a l Government says Nigeria would be producing 3 million tons per annum of liquid steel by the year 2015, in its determination for the minerals and metal sector to contribute meaningfully to the government’s transfor mation agenda.

Minister of Mines and Steel Development, Arc. Musa Mohammed Sada, disclosed this during the official commissioning of the African Foundries Limited billet mill plant in Ogijo, Ogun state.

T h e m i n i s t e r commissioned the plant, which is capable of producing 500,000 tonnes per annum of billet, as part of his official tour of the S out hwe s t p art of t he country.

Sada pointed out that despite the role played by the

Our current target is to create an investment friendly environment towards the development of steel raw materials reserves of the nation to ease problem of raw materials

metal sector in any industrialised economy, the Nigerian metal and minerals sector was yet to reach its full potential, particularly in the development and

consumption of key metallic products such as iron, steel and aluminum. He said the sector is faced with several challenges such as nonavailability of requisite legal and regulatory frame work, non- completion of required infrastructure, roads, rails, waterways, mines, limited raw material sources, in adequate power supply among others.

Arc. Sada reaffirmed the present administration’s quest for Nigeria to become one of the twenty most industrialized nations by the year 2020.

H e s a i d t h e Fe d e r a l government would continue to partner with development partners in the sector for a viable option to move the minerals and metal sector forward.

According to him, “In view of the quest of the present administration to become one of the twenty most industrialized nations by the year 2020,it has become compelling to engage all

stakeholders in the sector in search for a viable option to move the sector formed.”

He urged the development partners in the nation’s minerals and metal sector to take advantage and invest in the recently discovered iron ore deposits around the country to enable them integrate their facilities for more sustainable operations.

He said government was determined to “provide necessary infrastructure and industrial service clusters through collaboration with relevant ministries such as ministries of transport, power and works to promote policies aimed at catalyzing indigenous capacity expansion of steel production.”

He added that, “Our current target is to create an investment friendly environment towards the development of steel raw materials reserves of the nation to ease problem of raw materials, promote competitiveness of value

added product so as to stimulate domestic and export demand of minerals and metal products.”

The minister commended t h e A f r i c a n Fo u n d r i e s Limited for the huge investment in the minerals and metal sector of the country, adding that, it was a clear demonstration of their faith and support for policies and programmes of the present administration.

While fielding questions from newsmen , the minister disclosed that President Goodluck Jonathan had approved the establishment of board for the solid minerals development fund, he explained that the legal and regulatory frameworks in the nation’s minerals and metal sector has provisions for the establishment of the solid minerals development fund.

He added that international donors like the World Bank were also ready to give financial support to solve some of the militating problems facing the sector.

Solid Minerals

23 Stakeholders urge utilisation of coal for power

U

Solid Mineral

Nigeria to partner private investors in minerals dev’t Oscarline Onwuemenyi

A

BUJA - The F e d e r a l Gover nment has said it was willing to work with private development partners to ensure that the minerals and metal sector contributes significantly to the nation’s economic development.

The Minister of Mines and Steel Development, Arc. Musa Mohammed Sada dropped the hint during his visit to Dangote Cement Group in Ibese, Ogun State as part of his official tour of the South West part of the country.

T h e M i n i s t e r, w h o expressed delight at the progress made so far by the

cement company, pointed out that due to the level of involvement of mining operators such as Dangote cement Group, they are not just stakeholders but development partners in the sector.

Arc. Sada said government as a regulator in the minerals and metal sector of the country would continue to partner with development partners so as to move the sector forward.

According to him, “I believe with partners like Dangote Group, our economy will grow. The Group’s level of involvement in the sector is great; it is not just stakeholders but development partner, we will continue to partner and encourage Dangote Group,

until the country gets to where it is supposed to be by the year 2020.

The minister said his official tour of the south west of the country indicated that some of

the mining operators were willing to take up the challenge of growing the minerals and metal sector of the country.

Y O Stakeholders in Nigeria’s power sector have asked the government to utilise the nation’s coal deposit as source of power generation.

In a communiqué at the end of their bia n n u a l j o i n t generation/operation planning meeting in Uyo, Akwa Ibom State capital, Friday, the stakeholders, who were mainly managers at the various generation and transmission stations across the country, said the nation’s huge quality coal deposits should be exploited for the benefit of power generation.

They stated that Nigeria had a lot of energy resources hence the need to harness the unexploited sources of power generation capacity to boost power supply in the country.

Specifically, T h e f o r u m , specifically, harped on the need for the diversification into coal thermal stations in areas of abundant coal deposit like Enugu, Benue, Nassarawa and Kogi States.

The communique raed: “Also, it has been observed that the country has the potentials for additional hydro plants at various locations.

“These should be harnessed as hydro plants have proved to be highly reliable in our h d r o - t h e r m a l generation mix”.

Coal

Freight

24 Topher Marine builds first fiber boat Godwin ORITSE

T

Pirates

Pirate attack: Nigeria named ‘high risk area’ Godwin ORITSE

T

H E Inter national Bargaining Forum (IBF) a b o d y o f seafarers has warned its members to steer clear Nigerian waters as they declare the country ‘high risk area’ following the incessant attacks on vessels and crew members.

The categorization which has a damaging cost implication on shipment into Nigeria came as result of what the body called increasing number of attacks on vessels and kidnap of crews.

Vanguard gathered last week that the designation will come into effect on April 1, 2012 in order to allow ship operators to make any necessary preparations.

It will afford the same benefits and protections to seafarers in those areas as the High Risk Area in the

Gulf of Aden and around Somalia, including: the need for enhanced security measures; advance notice of intent to enter the area; the right to refuse to enter it; and a doubling of the daily basic wage and of death and disability compensation while within the area of risk.

The High Risk Area provisions apply to all ships operating under an IBF agreement.

The ITF’s Fair Practices Committee Steering Group will decide on whether to also apply them to all ships under non-IBF ITF agreements.

IBF agreements on high risk areas also provide an indicator of good practice to national flag registers. The provisions are set out in full below.

The IBF provides a forum for discussion between the Inter national Transport Workers’ Federation (ITF) and its member unions, and the maritime employers in the Joint Negotiating Group (JNG).

It covers waters of Benin and Nigeria, including: ports, terminals and roads anchorages, the delta of the Niger river, other inland waterways and port facilities, except only when the vessel is attached securely to a berth or SBM facility in a guarded port area.

Under the declaration, all companies operating vessels or installations on the waters around the duo of Nigeria and Benin should have sufficient security arrangements to safeguard their personnel, given the nature of the risk, and should provide adequate protection, advice and compensations to the crews.

Details of the declaration that were made available to Shipping Position Dailyindicate that: Upon the vessel’s entry into and, further, throughout the entire stay in the Area as specified above, seafarers must be protected by increased security measures that will provide adequate levels of safety and security on

board, such as the Best Management Practice.

In the ports of the above listed countries and inland waterways and approaches to these ports, including offshore installations, extra security measures for reducing the vessel’s vulnerability to an unsanctioned approach and boarding should be adopted.

Such measures should, inter alia, provide for an enhanced look-out and an emergency alert/action plan securing sufficient safety for the crew and reliable contact with the authorities. The sufficiency of such extra security measures should be determined depending on the vessel’s type, size and freeboard.

Prior to approaching a port, detailed local advice about the security situation should be obtained and arrivals and departures timed to coincide with security patrols operated by respective government forces, if available]

OPHER marine services has s u c c e s s f u l constructed the first ever made in Nigeria fiber boat that can be compared to any other boat in the world.

Showcasing the newly constructed boat at the ongoing Nigerian Maritime Exposition (NIMAREX), Managing Director of Topher Marine, Mr. Chris Ajayi stated that it took the company four months to put the boat together adding that with the experience gathered so far, it will lesser time to build another boat.

He disclosed that the company has about 3 Naval architects working in his boat yard and are currently working on the orders of some of their clients who came to NIMAREX. Besides the construction of boats, Topher Marine is also into boat trading, boat repairs, water hyacinth clearing, supply of marine equipment and maritime vocational training.

Topher Marine which has technical partners in SriLanka is also into maritime education as the company in collaboration with the University of Lagos to start courses in boat building, while driving marine welding and out-board engine repairs.

He explained that his firm has been able to demystify the science of boat building adding that the technology is open to every Nigerian who wants to make a career of it.

Meanwhile, the Nigerian Maritime Exposition has endorsed the boat built by Topher Marine saying that the construction of the boat is one of the biggest maritime potentials waiting to be exploited.

Speaking to newsmen at the end of the three day event, NIMAREX chair man Mr, Collins Egwuagu said that the ingenuity of the owners goes to show vast maritime potentials in the country.

Freight Godwin ORITSE

25

PORTS DEVELOPMENT:

N Nigeria may lose African

IGERIA has been described a s potentially endowed to serve as hub station for seaports in the African continent, but experts have warned that such opportunity may sleep away due to a mirage of bottlenecks bordering on infrastructural decay and legislative inadequacies.

Participants who spoke at the on-going Nigeria Maritime Exposition NIMAREX 2012, noted that just as the energy sector has been in the doldrums due to protracted delay in the passage of the Petroleum Industry Bill (PIB), the ports system is similarly in chains owing to the neglect of the Ports and Habour Bill.

In a paper titled “Development of the Hub Port Concept for the African Atlantic Coast: Nigeria as a Focal Point”, Managing Director of the Lagos Deep Offshore Logistics base (LADOL), Dr. Amy Jadesimi, warned that the time had come for a realistic approach to the situation in the nation’s interest.

According to her, the issue of a hub status for the African states had become a “sink or swim” paradox for now, adding that “Nigeria has no choice” than to act fast in the face of challenges currently posed by SouthAfrica, Ivory Coast and Ghana.

She noted that with all the advantages enjoyed by the country such as the control of over 25 per-cents of the African population, a 25 percents market share of the ECOWAS ports activities as well as being the second highest host of the container traffic in the sub region, the country is no doubt a natural hub station.

The LADOL boss also noted that the need to create a general Maritime plus Oil & Gas Integrated hub for the sub region is further boosted by the realization that 26 major ports in West Africa handled a total of 250 million tons of cargo in 2000 of which 66 percents were oil exports.

“Deep offshore market is a time limited opportunity for Nigeria to overcome the

hub status

Containers natural resource course.

Over 100 billion USD will be spent on deep offshore projects in West Africa.

“Nigeria risk losing out to its near and far neighbors, and become increasingly s e r v e d b y transshipment…just as well developed ports will receive the larger ships (while) others will be served in transshipment in feeder vessels”, she said.

Dr. Jadesimi however pointed out that despite these arrays of endowments, the country is nonetheless faced with strong competitors who may grab the opportunity to shine, should Nigeria slack in taking her rightful position in this regard.

To attain the status and keep it, she opined that Nigeria must take steps to sur mount “ well known

national challenges” such as “absence of deep water container transshipment terminals, lack of adequate berthing capacity, as well as lack of an integrated land distribution system, particularly for transit traffic”.

Other challenges which must be surmounted, according to her, included the lack of essential supporting infrastructure such as rail system, congested road network, bureaucratic bottlenecks and high maritime and freight charges.

She however raised the hope noting that the Nigeria Ports Authority (NPA) had commence the dredging and wreck removal to allow the free movement of large container vessels currently calling at the Lagos ports, courtesy of Maersk lines.

She said on its part, LADOL had competed and currently

operating a 100 per-cents indigenous facility with which it provides a fully integrated rig repair platform, just as the organization had taken steps to address manpower shortage by partnering with Samsung of South Korea to establish a training institution for the industry.

Speaking in similar vein, Managing Director of NPA, Omar Suleiman, noted that if the country fails to take the bull by the horn, other countries with far less advantages will rule the waves to the detriment of Nigeria.”With a population of just three million people, Togo is trying to establish a deep seaport. If they bring in a 10,000 TEU vessel, where is the content going, if not Nigeria?” he asked rhetorically.

The NPA boss who raised

the hope that deep seaports will soon emerge with developments at Akwa-Ibom, Olokola and Lekki, however lauded the establishment of L ADOL base in L agos, saying, “ with indigenous organizations such as this springing up in Nigeria, I can say that all hope is not lost”.

Chairman of the Ports Consultative Council (PCC), O t u n b a Ku n l e Fo l a r i n , warned that for the hub station to be a reality in Nigeria, all hands must be on deck to improve services such as ships turn-around, ports and cargo security and a codified tariff structure.

He called on more investors to take a leap from the LADOL initiative by establishing facilities which would promote local content and development in line with government’s aspirations.

Technology

Phone: 08027181717,

26

e-mail: jimlaw2004@yahoo.com

the transmission of power more efficient.

Common types of alternative energy 1. Biofuel and ethanol: Biofuel and ethanol are plant-derived substitutes of gasoline for powering vehicles.

2. Solar energy: Solar energy is generating of electricity from the sun. It is split up into two types, ther mal and electric e n e r g y. T h e s e t w o subgroups mean that they heat up homes (and water) and generate electricity respectively.

3. Wind energy: Wind energy is generating of electricity from the wind.

4. Geothermal energy: Geothermal energy is using hot water or steam from the Earth’s interior for heating buildings or Diagram showing how Biofuel is produced from Algae. Source: dailytech.com electricity generation.

5. Hydrogen: Hydrogen is used as clean fuel for airplanes, spaceships, and vehicles.

BIOFUELS: Production, Benefits and Technology Jim Rex-Lawson MOSES

Intro

T

he idea of alternative energy is nothing new to society. In fact, humanity

has always grappled with the need to use alternative sources of energy especially when current resources are running low.

During medieval times, people realized that the main source of fuel, which

was wood, was becoming an increasingly scares resource. This led to the use of coal as an alternative source of energy. Likewise, before the 1800s, whale oil was the most favored source of lamp and lubrication oil. But by mid-

Neat ethanol on the left (A), gasoline on the right (G) at a filling station in Brazil.

Source: Wikipedia

century, the stock was heavily depleted, and fossil fuel became a v a l u a b l e c o m m o d i t y.

Because of these changes in the past, the carbon emission levels in the atmosphere increased to record levels.

What is Alternative Energy?

Based on the foregoing, Alternative energy Sources could be referred to as any source of energy designed to limit or r e p l a c e a n environmentally harmful form of energy. Today, climate change is the primary motivation behind modifying energy sources. Through science, new means are being developed to harness power from untapped resources and even create cleaner ways of using some of the old resources.

Also, an effort to reinvent the power grid has made

BIOFUELS Biofuel and Types.

Biofuels are fuels made from recently living organisms. They can be divided into three categories:

*First-generation biofuels - made largely from edible sugars and starches,

*Second-generation biofuels -

made from

nonedible plant materials, and

*Third-generation biofuels which are made from algae and other microbes.

Biofuel is one of the most promising types of alternative energy source.

In fact, there are actually several different types of biofuel. The different types of this fuel also vary partly depending on the different types of applications that they are intended for. For example, CONTINUES ON PAGE 27

Technology

Phone: 08027181717,

27

e-mail: jimlaw2004@yahoo.com

Diagram showing how biofuel is produced.

Source: Google Images

Above is an excellent beginner tutorial on producing biodiesel.

Source: Google Images

BIOFUELS: Production, Benefits and Technology CONTINUED FROM PAGE 26

this includes the distinction made between biodiesel and biogas.

These are obviously intended for use with different applications, such as diesel engines versus standard car engines.

However, perhaps what proves to be even more of an important distinction as to how these special types of fuels are categorized is based on the type of materials and resources that they are derived from. First, all

types of biofuels are derived from some type of biomass. Biomass refers to a wide variety of organic and natural resources that include solid biomass, liquid fuels and different types of biogases.

Biofuels can actually be extracted or derived from both living and nonliving materials. However, all of these materials and original resources must have been organic and not synthesized in order for them to truly be considered as a biofuel.

As stated above, some of the more prevalent origins that are common in regards to biofuel

derivations are algae, decomposed wood and vegetable oil.

Another special type of biofuel is bioethanol. It is an alcohol which is produced through the process of fermentation of sugars from plant materials, such as sugar and starch crops.

Benefits *Does not require any radical changes to switch to the use of biofuelsunlike the difficulties in switching to other renewable energy sources such as solar and wind power. *Are cheaper than fossil fuels. Many governments

are now offering tax incentives to buy greener cars that run on biofuels (ethanol being one example). *Are considered ‘carbon neutral’ by some people.

This is because the carbon dioxide they release when burnt is equal to the amount that the plants absorbed out of the atmosphere. Therefore, they don’t contribute to global warming. However, it does require some fuel to power the machinery on the farms where biofuels are produced. Still, they are better than fossil fuels!

Research suggests that they reduce carbon emissions by 50-60%. *Reduce dependence on foreign oils. Oil fluctuates i n p r i c e r a p i d l y, s o changing to biofuels will help buffer against the change. *Emit less particulate pollution than other fuels, especially diesel. *Are renewable sources of energy as you can just keep producing more. *Ethanol is very inexpensive to produce. *Can help prevent engine knocking.

Topher zang

29 Samuel OYADONGHA

Y

enagoa - The a n c i e n t settlement of Sagbama in the Sagbama local government area of Bayelsa State is facing one of its worst environmental degradation in recent times.

U n l i ke s e v e r a l o t h e r communities in the state being devastated by oil spills including the self inflicted spill by illegal refinery operators in the deep mangrove swamp the ancient settlement of Sagbama is being terrorized on large scale by marine erosion.

About four hundred families whose homes are located on the bank of the River Forcados may be rendered homeless at the peak of the flood season in September when the velocity of the river would be high.

Also, a private housing estate in the community located a few metres from the troubled river bank is being threatened.

Already, a large portion of the community land including part of its access road and market has been lost to the surging river with more on the verge of being eroded.

Interestingly, Sagbama is

Marine erosion threatens Bayelsa community Recent attempt by the government to tackle the erosion menace by rehabilitating the troubled spot ended in fiasco when the mass of rock use in protecting the river bank collapsed one of the few communities that could be access by road in the predominantly oil and gas rich state.

Some of the natives whose homes are on the throes of being washed away are now living in constant fear especially with the flood

season fast approaching.

When Sweetcrude visited the community it was learnt that a recent attempt by the government to tackle the erosion menace by rehabilitating the troubled spot ended in fiasco when the mass of rock use in protecting the river bank collapsed and further ate into the already narrow road.

It was reliably gathered that the control measure failed because a proper environmental impact assessment was not conducted before the job was done.

The troubled area, a source told Sweet Crude used to be the opening to a creek that linked the River Forcados in the Sagbama flank and River Nun in Opokuma several years ago before it was sand filled in the course of the dredging of the river in the eighties by the administration of late Chief Melford Okilo when the Bayelsa was in Rivers State as part of

measures to protect the community against erosion.

Troubled by the renewed erosion threat, the terrified people of Sagbama have expressed concern over the fate of their community.

Chair man of Sagbama Community Development Committee, Chief Simeon Suoyo, who conducted Sweet Crude round the devastated area, warned that unless urgent steps are taken to save his people from the erosion threat, about four hundred families stand the risk of being sacked when the river level rises.

“As you can see, our people are in grave danger and living in constant fear,” he said pointing at the collapsed area which was recently rehabilitated.

“It was a miracle that no life was lost the day the place collapsed,” he noted, adding, “it could have been worse if people or vehicles were passing that fateful night.”

Erosion threatened community

SPDC hands over N10m school block Emma ARUBI

W

ARRI-IN furtherance of h e r determination to enhance quality education in its areas of operations, the Shell Petroleum Development Company, S P D C , Wa r r i h a s commissioned and handed over a N10m renovated four class room block to the Or ugbo community in Warri South council area of Delta State.

At the commissioning ceremony held at the school play ground, SPDC representative, Dr. (mrs) Coker charged the management and the community leaders to ensure that the structure be maintained and the school kept clean, saying that the renovation was part of her desire to enhance quality education in the country.

She noted that education is the best legacy to bequeath to our children who are the future leaders o f o u r c o u n t r y. S h e charged the pupils of the school to take their studies very seriously, adding that it is only when they are educated that they can be useful to themselves in life and self sustaining.

Earlier, the management committee secretary of the Orugbo community, Mr. Stephen Ejejigbe express appreciation to and commended SPDC for the gesture but requested that more recreational facilities and empowerment programme be granted to them, assuring that the renovated classroom block would be well guarded.

30 only picked the amnesty programme from the long list of other steps recommended by the Niger Delta Technical Committee that should go with the amnesty towards achieving lasting peace in the region.

Mitee said the recent report released by the UNEP on Ogoni was a classical documentation of the threat to live in the region.

Earlier, one of the authors of the book published by Centre for Advanced Social Science, CASS, Dr. Sofiri Peterside said the book was a critical appraisal of the amnesty programme in the region and its implication for the future of the area. He said findings while working on the book showed that even with the amnesty programme the psychology of peace had not been taken care of, the people were still b i t t e r w i t h t h e underdevelopments and poverty in the region.

Jimitota ONOYUME

Gas flare in the Niger Delta

Mitee, Sofiri task FG on N’ Delta issues P

O R T HARCOURT F O R M E R president Movement for the Survival of Ogoni People, MOSOP, Ledum Mitee has called for a more concrete approach towards addressing c h a l l e n g e s o f underdevelopment in the Niger Delta region.

Mitee who spoke in Port Harcourt at the public presentation of a book “Presentation and Reality: Documenting the amnesty process in the Niger Delta region of Nigeria” said the ongoing amnesty programme of the federal government was yet to address challenges of underdevelopment and

poverty in the region.

Ac c o r d i n g t o h i m , t h e programme had only created unhindered oil exploration and operations in the region.

He said to effectively tackle problems of the region the government should go beyond the amnesty and take steps to address infrastructural and poverty problems in the region.

“Uninterrupted flow of oil seems to be the focus of the federal government in the region. The people of the region are poor government is only getting more revenue with the amnesty programme which has not translated into development for the region”, he said.

He said it was worrisome that the federal government

Petroleum products flood Delta Emma ARUBI

A

SABA-Delta S t a t e a n d environs is now flooded with petroleum products following massive loading of fuel at Matrix Energy Depot at Ifie near the Warri Refining a n d Pe t r o c h e m i c a l Company, WRPC, to curb the incessant fuel scarcity in the Niger Delta region.

Investigations reveal that it took security agents hectic time to control desperate drivers of fuel tankers that thronged Matrix Energy Depot to lift petrol for onward delivery to the consumers.

There had been fuel shortage in some parts of Delta State in the past few weeks with some filling stations that have the commodity selling between N110 and N150.

B u t f o l l o w i n g information that Matrix Energy Limited had taken delivery of petroleum products, oil marketers from across the Niger Delta region have been thronging the company’s plant at Iffie to load the products.

31

The Question johniyene@yahoo.com

ALISON-MADUEKE,

work or resign

W

Crude oil thief

Shell laments rising crude oil theft Jimitota ONOYUME

P

O R T H A R C O U RT: CRUDE oil theft has become a major problem in the Niger Delta region.

According to Shell the daily exportation of about 140,000 barrels of oil is being threatened by this ugly act going on massively on its Nembe creek trunkline in the region.

The oil giant recently led media men in Port Harcourt on an over-fly of the Nembe creek trunkline to see things for themselves. There were over fifty illegal bunkering points around the trunkline.

These oil thieves gather the crude into Cotonou boats and then sail into the high sea.

Their actions do not only constitute threat to oil exports but pose a major risk to the environment.

Lamenting the sad incident, the Managing Director of the multinational o i l g i a n t , M r. M u t i u Sunmonu fielded questions from journalists said illegal bunkering had also made it difficult to do complete clean up of some oil spill impacted areas in the region.

The level of oil theft and illegal refining of crude in the region constitutes a major threat to the environment.

“I am really worried about the danger to the environment

Mr Sunmonu who sounded very worried enjoined government and other stakeholders to take urgent steps to tackle the problem.

He said all hands should be on deck to save the country greater loss from the callous activities of the oil thieves.

He also called for increased security around the Nembe creek trunkline.

“I feel extremely saddened by what is happening, display of criminality and lack of care. I am extremely worried. Frankly something has got to be done otherwise our operation in the region will not be sustainable. This is very, very worrisome.”

He said the level of oil theft and illegal refining of crude in the region constitutes a major threat to the environment. “I am really worried about the d a n g e r t o t h e environment”.

According to him, there are a lot of international agencies that had indicated interest to develop the agric sector in the region but were reluctant to invest because of the level of crime.

While assuring that as a multinational oil firm, Shell would continue to do its best in the fight against oil theft and other related crimes threatening its operations, Mr. Sunmonu said the crusade should not be left to the oil giant alone.

“This is not a war that Shell alone can win, we need a coalition of efforts.”

The Managing Director further recommended creation of jobs and development of the region as steps towards resolving the problems.

He said Shell had been actively involved in creating empowerment opportunities for people in the region through various schemes and skills acquisition programmes.

hen the debate for the total deregulation of the upstream sub-sector of the petroleum industry was raging, I mentioned to the few who cared to listen that what the federal government wished to achieve was not the deregulation of the sub-sector but to divest of the subsidy burden.

We did not have long to wait before the federal government pegged the price of petrol at N140.00 per litre, not bothering to explain to Nigerians how a deregulated price regime came by a fixed pump price for all the grades of a product that was imported or manufactured under different circumstances. The value of this recall to our discourse is that the petroleum ministry and indeed the federal government have by virtue of knocking out a whopping N32.00 per litre from the old subsidy regime, become better positioned in every sense to improve on the semi-efficient system of supplying petrol to the points of demand in the polity.

But that is not what Nigerians are experiencing; it appears that instead of improving the lot of Nigerians in relation to the supply of petrol, the long queues of old have returned, the black market is thriving and darkness has swooped on cities starved of this direct source of powering homes, offices and the thousands of small scale industries that sustain the Nigerian economy. What is responsible for this situation and what can we start to do about it as civilised folk? If the savings we have made from the subsidy reduction have worsened our accessibility to the product it simply means that the folk who are on call to manage the gains for our mutual benefit are either mismanaging them maliciously or ignorantly. Either way, we owe ourselves the duty to review the performance of the sub-sector nearly three months after the subsidy reduction to re-strategise for a more efficient sub-sector.

The Honourable Minister for Petroleum Resources is a beautiful lady who has the potential for winning awards for Nigeria in more fields of human endeavour than I care to enumerate here but I am emboldened by the findings of my study of her non-achievements at the Petroleum Ministry, to infer that she is a failure at that ministry. Alison-Madueke had her work defined for her in the challenges presented by the ailing refineries, greedy importers, production sharing contracts which would only benefit Nigerians when fossil fuels are outdated, a regulator that is so ponderous as to require fragmenting to allow for efficiency, an oil and gas industry that has no defined place for the role of the owner occupier of the explored and exploited land, unsafe and unhealthy production environments that have attracted the intervention of the United Nation’s Environmental Protection organs, etc. These are not the kind of problems you resolve with the plumes and colours that Alison-Madueke has become famous for or that are settled by efficient mid-level technocrats, the whispering hi-five buddies of the minister who pretends to mingle with subordinates she has successfully emasculated to the detriment of the whole country.

The Minister for Petroleum Resources is not a bad person and I have no personal scores to settle with her. I once had tea with her mother at their GRA Port Harcourt home while waiting for the very refined and respectable lady prepare a bouquet of roses from her garden that I had planned to present to a friend. The Honourable Minister is no doubt a lady as decent and as respectable as her dear mother but the office she happens to occupy is responsible for the success or failure of this country’s fiscal strategies and by implication, the viability of our society.

Pregnant women, accident victims, critically ill compatriots have lost their lives because they could not be transported expeditiously to medical facilities. And some medical facilities are 90% dysfunctional because of lack of petroleum products to power their generators. If we discount the businesses that have closed down, the losses incurred by the economy for the stagnation of business activities in the real sector as well as the losses suffered by the economy in recreational activities suspended for lack of energy, we cannot afford the loss of human lives that accrue daily to the country because of the inability of a minister to harness a bountiful resource for the benefit of the country.

Please join me in calling upon the Hon. Minister for Petroleum Resources, Mrs. Diezani Alison-Madueke to come alive to her responsibilities or resign.

Sweetcrude is a Publication of VANGUARD MEDIA LIMITED, Vanguard Avenue, Kirikiri Canal, P.M.B.1007, Apapa.

Website: www.vanguardngr.com (ISSN 2251-0001) Editor: HECTOR IGBIKIOWUBO. Phone: 08023145252, All correspondence to P.M.B. 1007, Apapa Lagos.