Dec by Sweetcrude reports

Govt expecting $373bn revenue from Lekki Deep Seaport —Minister P/35

12 years after, Nigeria resumes licensing round for marginal fields P/7

A Review Of The Nigerian Energy Industry December, 2013

VOL 01 N0. 10

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Discretion, opacity, fraud, theft dog Nigeria’s oil trade

108.92 U$

Oil sold to briefcase traders, letterbox firms Traders, firms fronting for top political office holders NNPC operations increasingly shrouded in secrecy

114 112 110 108 106 104 102 100 Dec-12 Jan13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13

FG approves Customs' handling of all import transactions

he Federal Government has, in accordance with the amended Import Guidelines of the Destination Inspection Scheme, approved the takeover of full processing of all import transactions to Nigeria by the Nigeria Customs Service, NCS. This follows the expiration of the Destination Inspection Contract Agreements between the Federal Government and Scanning Service Providers, SSPs, and President Goodluck Jonathan’s directive that Destination Inspection Service should transfer from contracted SSPs to the NCS. CONTINUES ON PAGE 35

P/8

Money from stolen crude not laundered through African banks - Alison-Madueke

Contents

2013 December, SweetcrudeReports

Editor’s note

oing through our reports for the outgoing year, it would appear that Nigeria's case with corruption is irredeemable. It is a year we at SweetcudeReports, your foremost energy publication, chronicled the unprecedented fraud and shady dealings at the topmost level of the oil and gas industry, the precarious situation that confronts the sector as well as the dangers these expose Nigeria to. From the bribery and subterfuge that characterised the contract award of the FPSO for the $13.35 billion Egina project, to the several failings of the Ministry of Petroleum and the Nigerian National Petroleum Corporation that have set the oil and gas industry on reverse gear; disturbing cases of crude oil theft; indicting reports commissioned by the Chatham House, London, that of the Petroleum Task force commissioned by this same government, and the recently published Berne Declaration, it is abundantly clear that all is not well with the sector. Yet, the Federal Government appears anything but disturbed. We wonder how any government operating in the 21st century could possibly put up with such mind blowing cases of corruption and do absolutely nothing about it. On a cheery note though, it is heart-warming that the long drawn out

4 8 14 16 19

privatisation of the power sector has been brought to a logical conclusion and that after 12 years in the proverbial wilderness, Nigeria finally resumed licensing round for the marginal fields. In all, 31 fields are on offer. All we can do here is call on the Ministry of Petroleum and its agencies handling the exercise to ensure fairplay and transparency in the process. 2013 has been quite an eventful year for us at SweetcrudeReports. It is a year that may have defined our future, considering the various strides we have accomplished in the year: an insightful SweetcrudeReports monthly which you have in your hand, a strong online edition (www.sweetcrudereports.com) that is waxing even stronger and a collaboration with the Guardian Newspapers that has attracted industrywide commendation. For everyone who has been with us during the year, we say a BIG thank you, and merry Christmas and a happy New Year in advance. We hope to make the New Year a most memorable one for you through more incisive investigative, analytical, factual and objective reports on all our three platforms SweetcrudeReportsmonthly, SweetcrudeReports in the Guardian and SweetcrudeReports online. See you next year.

COVER

Discretion, opacity, fraud, theft dog Nigeria’s oil trade

OIL A boost for Total's Ofon Phase 2 project

FOCUS Local Content: Our story is incomplete without Chevron -Marine Platforms

GAS LNG launches $1bn finance scheme for contractors, vendors

POWER Shortage of manpower hits power sector

25 29 33

FINANCE

35 39 42 44

FREIGHT

Oando to complete $1.86bn ConocoPhillips deal January 31

LABOUR

‘Don’t sell refineries, deal with pipeline vandalism’

SOLID MINERAL

Ajaokuta Steel needs massive auxiliary infrastructure

Govt expecting $373bn revenue from Lekki Deep Seaport

MOTORING Best car to buy 2014: Editors’ pick

TECHNOLOGY

Environmental remediation

COMMUNITY New board for NDDC

EDITORS Hector IGBIKIOWUBO Chuks ISIWU ASSISTANT EDITORS Yemie ADEOYE Toju VINCENT Eluonye KOYEGWUAEHI

GM, Marketing SNR. CORRESPONDENTS Oscarline ONWUEMENYI Nkem IGBIKIOWUBO Chima UGWUANYI +234 08060249746

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Printed and Published by Sweetcrude Nigeria Limited Plot 2191 Osiefa Crescent, ‘Amuwo Odofin, GRA, Lagos.

WEBSITE: www.sweetcrudereports.com Enquiries? Call: +234 08023145252

2013 December, SweetcrudeReports

Cover Story

2013 December, SweetcrudeReports

Discretion, opacity, fraud, theft dog Nigeria’s oil trade

HECTOR IGBIKIOWUBO

IGERIA’s crude oil trade a p p e a r s consistently dogged by official discretion, opacity, downright fraud and of course theft on a mind blowing scale, the Berne Declaration, Chatham House and the Report of the Petroleum Revenue Special Task Force has disclosed. “Nigeria is the only major oil producing country that sells 100 per cent of its crude oil to private traders, rather than marketing it itself and benefitting from the resulting added value. A number of beneficiaries of export allocations are nothing but letter box companies whose sole merit is that they are linked to high ranking political officials,” the Berne Declaration report has

disclosed. The Crude Oil Marketing Division, COMD, of the Nigerian National Petroleum Corporation, NNPC, is charged with the responsibility of awarding a number of contracts each year to pre-qualified c o m p a n i e s . H o w e v e r, SweetcrudeReports investigation reveals that the list of companies which emerge successful is vetted and approved by both the Minister of Petroleum Resources and Mr. President. In its report submitted to Mr. President last year, the Petroleum Revenue Special Ta s k F o r c e d e s c r i b e d beneficiary companies of this yearly award as ‘briefcase traders with little or no commercial and financial capacity’. Another Chatham House report noted that "only 25 to 40% of the holders of export

allocation for Nigerian crude oil actually have ‘the capacity or will to finance, ship and sell their own cargoes directly to refiners with all the market and price risk involved. Most of the remaining ones are briefcase companies – small entities which sell their allocations of crude to the main traders for a margin, most often at the higher end of $0.25-$0.40 per barrel". Government/NNPC reaction An NNPC staff who pleaded anonymity but graciously spoke on award of allocation noted that most of the companies lifting Nigerian crude oil are acting as fronts for political office holders and power brokers. Efforts to get a reaction from both the Minister of Petroleum Resources, Diezani AlisonMadueke and spokesman to Mr. President, Dr. Reuben

Another report by Chatham House noted that "only 25 to 40% of the holders of export allocation for Nigerian crude oil actually have the capacity or will to finance, ship and sell their own cargoes directly to refiners with all the market and price risk involved Abati proved abortive at the time of filing this report. Even a text message sent repeatedly to both parties three weeks ago failed to elicit any response at the time of filing this report. The only semblance of a response to this came in a statement released by Ms.

Tumini Green, the erstwhile Acting General Manager, Public Affairs Division of the NNPC, claiming that it was common knowledge that the call for tender for oil lifting contract is published periodically ‘by almost all the CONTINUES ON PAGE 5

Cover Story

2013 December, SweetcrudeReports

Nigeria Oil-well No 1, Oloibiri, Bayelsa State

Nigeria’s oil sold to briefcase traders, letterbox firms CONTINUED FROM PAGE 4 newspapers in Nigeria’. She said that in practise the Corporation sells Nigerian Government equity crude oil to lifters/traders engaged on Annual Term Contract basis, adding that at present, there are about 50 of such contracts. Opaque awards system The Berne Declaration noted that the yearly award of allocation to lift crude oil is done under obscure conditions and on the basis of criteria that are unknown outside the restricted circle of decision makers. “Traders are allowed to choose the most lucrative pricing option for individual cargoes retroactively and there is a question of whether favoured traders may receive subsidised prices well below market. The lack of transparency in Nigerian crude sales encourages

In the last few years, the financial operations of the NNPC has become more deeply shrouded in secrecy, with the corporation withholding revenue receipt from sale of crude oil to the state coffers.

fraudulent activities,” the Report of the Petroleum Revenue Special Task Force further disclosed. In the last few years, the financial operations of the NNPC has become more deeply shrouded in secrecy, with the corporation withholding revenue receipt from sale of crude oil to state coffers. The corporation performs numerous roles and is into all manner of

partnerships that have been severally described as ‘operational and financial black boxes. Oil theft Nigeria’s Bonny Light, stolen and traded openly on the west Coast, goes for as low as $68.84 per barrel, our investigations revealed in August. SweetcrudeReports went undercover posing as a buyer

and was offered 70,000 metric tons (about 522,900 barrels) of Bonny Light at $36 million (about N5.6 billion), or $68.84 per barrel. The seller offered to deliver the cargo to us offshore Cotonou in Benin Republic and was willing to accept either a bank guarantee or letter of credit as payment. The seller whom SweetcrudeReports gathered was acting on

behalf of a cartel, assured that they could deliver same volume on a monthly basis. Although Dr. Ngozi OkonjoIweala, the Minister of Finance and head of the economic management team, had disclosed that the country loses over 400,000 barrels of crude oil per day to theft, our investigations show that losses incurred by the state are actually in excess of 540,000 barrels per day.

Oil

2013 December, SweetcrudeReports

A boost for Total's Ofon Phase 2 project “The successful completion of this platform is a further demonstration of the excellent relationship between Nigeria and the Republic of Korea.” The Ofon Phase 2 project is designed to unlock undeveloped reserves in Nigeria’s offshore while implementing new solutions with lasting environmental benefits. First oil and first gas from the project are expected in 2014, with a capacity of 70,000 barrels of oil equivalent per day, boe/d. The project consists of the installation of a new production platform, an accommodations platform and two additional wellhead platforms. Twenty-four new wells - 16 producers and 8 water injectors - will be drilled. The waterflood capacity will be increased and an artificial lift system (gas lift) installed on the producing wells. Gas from the field, which is currently flared, will instead be gathered and exported to the Bonny LNG liquefaction complex via the Amenam gas gathering network. The project scope also includes the laying of a 70-kilometre subsea pipeline for this purpose. Total says the halt to gas flaring under routine operating conditions is a major step forward that

Total’s Ofon field off Nigeria

CHUKS ISIWU

he Total Ofon Phase 2 project has been boosted by the completion of construction of the Ofon Phase 2 Process Platform, OFP2, in South Korea. Construction work was conducted at the Hyundai Heavy Industries, HHI, yard in Ulsan, South Korea, and following the completion of work, the platform is now on its way to the Ofon field located in the Oil Mining Lease, OML 102, about 50 kilometres off the coast of

Nigeria in 40 metre water depth. The field is owned by Total E&P Nigeria Limited, TEPNG, with 40 per cent stake, in partnership with the Nigerian National Petroleum Corporation, NNPC (60 per cent). According to a statement, the sail-away for the OFP2 was performed at the Hyundai Heavy Industries yard in Ulsan, South Korea on Friday, November 22 by the Deputy Head of Mission of the Nigerian Embassy in Korea, Ambassador Salihu Ahmed and his wife Michelle, Deputy Managing

D i r e c t o r, T E P N G , P o r t H a r c o u r t D i s t r i c t , M r. Nicolas Brunet, Executive D i r e c t o r, T E P N G P o r t H a r c o u r t D i s t r i c t , M r. Patrick Ngene, TEPNG Ofon 2 Project General Manager, M r. E m m a n u e l H y e s t , TEPNG Ofon 2 Company Representative in Ulsan, Mr. Jean-Marc Pecquois and the Senior Executive vice President and Chief Operating Officer, HHI, Mr. J. D. Kim. The ceremony was also witnessed by other officials from Total, the National Petroleum Investment Management Services, NAPIMS - a

Construction work was conducted at the Hyundai Heavy Industries, HHI, yard in Ulsan, South Korea, and following the completion of work, the platform is now on its way to the Ofon field located in the Oil Mining Lease, OML 102, about 50 kilometres off the coast of Nigeria in 40 metre water depth. subsidiary of NNPC, Department of Petroleum Resources, DPR, and HHI. Ambassador Ahmed said:

upholds its pledge to reduce greenhouse gas emissions on its operated sites.

Oil

2013 December, SweetcrudeReports

A marginal fields

12 years after, Nigeria resumes licensing round for marginal fields OSCARLINE ONWUEMENYI

fter more than 12 y e a r s , t h e N i g e r i a n government recently flagged off the second oil marginal fields licensing round aimed at deepening the participation of indigenous oil companies in the upstream sector of the oil and gas industry. Minister of Petroleum Resources, Mrs. Diezani AlisonMadueke, who declared the bid round open at a press conference in Abuja stated that it is designed to boost the participation of Nigerian indigenous companies in the upstream and to generally increase exploration and production activities in the oil and gas sector to the benefit of Nigerians and the Nigerian economy. She also announced Federal government’s intention to rehabilitate the four national refineries prior to their sales to the private sector next year. Alison- Madueke said the bid process will be completed in the next four months. The minister, who encouraged local companies to form

consortia to increase their capacity to win the fields, noted that Nigerian firms which have been operating marginal fields licensed in 2001 have done very well. According to her, “Over the next two weeks, the Department of Petroleum Resources, DPR, will undertake a road show to different parts of the country about the programme. This will be followed by a three and half months of competitive bidding process in line with the federal government’s commitment to openness and transparency in the conduct of business activities in the country. “In carrying out the exercise, government is determined to ensure that proper technical and financial due diligence is done on companies indicating interest in these assets. In this regards, government encourages companies where possible to bid in consortia to enable the parties leverage upon each other’s strengths," the minister said. Offering details of the licensing round, Mrs. AlisonMadueke stated that a total of 31 fields are on offer with sixteen (16) of them located onshore, while the remaining fifteen (15) are in the continental shelf.

The Minister who said the Federal Government is committed to transparency in the bid process also encouraged companies indicating interest in the assets to form consortia that would enable them leverage upon each other’s strengths. Giving an update on the last marginal fields bid round which held in 2001, the Minister disclosed that of the 24 fields that were allocated to 31 indigenous oil companies in that exercise, 8 were already producing while the others are at various stages of development. Alison-Madueke noted that the marginal field operators who currently account for about 1% of the nation’s production have also

recorded huge discoveries in excess of 100 million barrels to the nation’s reserve base, adding that of the eight assets that have so far been divested by the IOCs, at least four are held by active marginal field operators, who have continued to demonstrate remarkable technical ability in operating significantly larger assets. “In their operations, the companies have addressed corporate social responsibility as a critical element, by providing for stakeholder participation as part of their success factors. In addition, their development strategy is in line with the nation’s Gas Flare Policy and global

environmental guidelines on Green House emissions, by ensuring full utilization of their associated gas. Indeed, one of them has established a modular refinery for diesel production which is the first of its kind in the country” Alison-Madueke stated. The Minister explained that the Federal Government is encouraged by the modest achievements of the marginal field operators in line with the objectives of the local content policy to kick off this marginal field licensing round. She explained that government’s decision to hold the bid rounds was geared towards opening up the oil and gas sector of the industry to a wider participation with a view to creating a robust and virile industry that will positively impact on the lives and living standards of Nigerians. On the proposed sale of the refineries, Alison-Madueke reiterated government’s stance to move away from managing major infrastructure, adding that government was going ahead with the original plan to rehabilitate the refineries so as to be able to get premium price from their sale.

Oil

2013 December, SweetcrudeReports

Money from stolen crude not laundered through African banks - Alison-Madueke

inister of Petroleum, M r s . Diezani AlisonMadueke, says money from Nigeria's stolen crude is not being laundered through African banks but is rather going to entities in various parts of the world. This is the finding of Federal Government investigations on the oil theft scourge in Nigeria, Alison-Madueke said in Abuja. Said the minister: “Over the last 18 months we have set up various committees to fight this scourge, but it was clear from the beginning that we could not do it alone. The reason being that stolen crude is not necessarily being refined in the Gulf of Guinea; it is being refined in other parts. “In addition, the money from this stolen crude is not been laundered through African banks, for the most part, it is going to entities much further afield, which means we must do this in partnership with foreign governments. Happy to say we have begun to discuss from the presidential level down with a number of foreign governments who have been very keen to work with us on this”. “It is critical to have the

intellige nce to map the path of the stolen crude to make it unattractive at the point of receipt to make it more unattractive from the point of stealing it,” she added. Alison-Madueke, who spoke of plans by government to map the various paths of the stolen crude trade, stated that “it is critical to have the intelligence to map the path of the stolen crude to make it unattractive at the point of receipt and to make it more unattractive from the point of stealing it”. The Nigerian Senate disclosed recently that Nigeria loses 400,000 barrels daily to crude oil theft, pipeline vandalism and related criminal vices in the country’s oil sector. This was contained in the passed report of the Senate Joint Committee on Finance and Appropriation on the 2014-2016 Medium Term Expenditure Framework and Fiscal Strategy Paper, MTEF/FSP. “Oil theft came into prominence in 2012 with a daily loss of about 150,000bpd. By July 2013, the loss had risen to about 400,000 barrels per day.

The Nigerian Senate disclosed recently that Nigeria loses 400,000 barrels of oil to theft, pipeline vandalism and related criminal vices in the country’s oil sector Government needs to take some drastic steps to halt this development,” the Senate report said.

y the calculation of the Nigerian National Petroleum Corporation, NNPC, the nation lost as much as 11,753,217 million barrels of crude oil to theft in the last three years. NNPC, at a closed-door meeting with members of the House of Representatives Committee on Petroleum (Upstream), said the losses were recorded between 2010 and 2012 at various pipelines n o t a b l y t h e

Escravos/Chevron Nigeria (ESC/CNL)-Warri trunk line, which has the highest cumulative figure of

6,415,052 million barrels in the years under review. The figures presented to the committee by NNPC's Group General Manager, Corporate Planning and Strategy, Dr. Timothy Okon, showed that 965,069 million barrels, 4,213,468 million barrels and 1,236,515 million barrels respectively for the years under review from ESC/CNL-Warri line alone. O n t h e Wa r r i - K a d u n a pipeline, Ige said losses of 720,748 million barrels for 2010, 644,193 million barrels for 2011 and 752,598 million barrels for 2012 were recorded. On the Shell Petroleum Development Company/Warri pipeline, loss of 34,644 million barrels, 153,879 million barrels and 88,989 million barrels were recorded for the years respectively while the Bonny/Port Harcourt Refinery Company line saw loss of 595,820 million barrels, 1,379,770 million barrels and 967,522 million barrels for 2 0 1 0 , 2 0 11 a n d 2 0 1 2 respectively. According to Okon, the cumulative crude oil loss figures for 2010 were 2,316,281 million barrels, 2011 (6,391,311 million barrels) and 2012 (3,045,625 million barrels). totalling 11,753,217 million barrels for the three years.

Oil

2013 December, SweetcrudeReports

Oil refinery

Commendations, war drums over plan to sell refineries CHUKS ISIWU

n announcing plans by t h e F e d e r a l Government to sell the nation's four refineries in Warri, Kaduna and P o r t H a r c o u r t r e c e n t l y, Petroleum Minister Diezani Alison-Madueke must have known she has opened an issue that would spark instant national contention. Expectly, it has. While the Independent Petroleum Marketers Association of Nigeria, IPMAN, is full of commendation for the government over the planned sale, organised labour in the oil gas sector is beating the war drums. IPMAN says government's plan to private the refineries would enhance the quality and supply chain of petroleum products across the country, bu t t h e P e t roleum and Natural Gas Senior Association of Nigeria, PENGASSAN, and the National Union of Petroleum and Natural Gas Workers, NUPENG, insist they would resist the sale.

o r M r. C h i n e d u O k o r o n k w o , PENGASSAN Vice-

Chairman, the refineries have been performing below expectation and should be disposed off to bring them to efficiency. "We have four refineries; some are almost obsolete, while other ones are functioning far below their installed capacities. "These plants were installed with maintenance schedules and these schedules are not being followed; we have several challenges with the plants and they are not producing as they ought to. "We observed that we can't even get enough crude supplies because of the high rate of pipeline vandalism and that again constitutes a major challenge. The impression most Nigerians have is that we are riddled with a lot of challenges that require serious attention and we are not getting that attention," Okoronkwo said. He would, however, prefer that the refineries are rehabilitated before the sale. According to him, the rehabilitation of the refineries will boost their production capacities and guarantee a sustainable supply of petroleum products in the country.

These plants were installed with maintenance schedules and these schedules are not being followed; we have several challenges with the plants and they are not producing as they ought to PENGASSAN and NUPENG on their part are against the plan for refineries on the basis that it is not in the national interest as the nation would not benefit from the exercise.

nsisting the two unions would resist the sale, PENGASSAN President, Comrade Babatunde Ogun, claims the deal could benefit some government’s officials and their cronies. According to him, the problem of the refineries is underfunding on the part of government and refused to c a r r y o u t Tu r n - A r o u n d Maintenance, TAM, and supply crude to the refineries. The PENGASSAN chairman, who maintained that government officials deliberately sabotaged the

TAM and supply of crude to the four government refineries, said: “This planned outright sale is uncalled for, inimical to economy and Nigeria as a nation. It will only benefit the officials of government who are pushing for the sale as their fronts and cronies are already being positioned to buy the refineries as scrap. "We have said no to it and we will continue to say no. If government refuses to listen to voice of reason, we will have no other option to do the needful (shut down the sector) to protect these assets for generations unborn. “ We ( N U P E N G a n d PENGASSAN) made our position on this known for a very long time. Even in our position paper on Petroleum Industry Bill, PIB, we also

stated what should be done to the refineries. As soon as government woke up and made known this repulsive planned sale of the refineries, NUPENG issued a statement denouncing it and we also issued a statement advising government to jettison the idea to avoid unnecessary industrial unrest in the sector. "The planned sale is antiNigeria, anti-people and will not benefit the drivers and their cronies.”

gun is of the opinion that rather than sale, the Federal Government should adopt a modified process tailored towards the Nigerian Liquified Natural Gas, NLNG, with the National Oil Company, NOC, as owners of the four refineries holding a substantial minority shares, while core investors/local participation hold the working majority with the staff, trade unions, and the host communities holding minority shares.He threw a challenge to the government to deal with the problem of pipelines vandalism that has hampered the supply of crude oil to the refineries, carry out TAM on them and see if the refineries would not work.

Oil

2013 December, SweetcrudeReports

Oyo field: Latest discovery to produce oil 2014 SAM IKEOTUONYE

he latest oil discovery at Nigeria's Oyo field will come on stream as early as next year, given indications by the US sxplorer Camac Energy. The Houston-based company announced that it h a d s t r u c k m o r e hydrocarbons at a well off Nigeria, adding recently that the well will expectedly produce first oil in the middle of next year. The company struck a total of 65 feet of net pay between three intervals in the Miocene formation at the Oyo-7 well on

offshore Block OML 120, making it the first well to successfully drill into the Miocene formation on the oilfield. With the discovery, Camac has now been successful in both its primary and secondary objectives at the well having last month hit 115 feet of net oil pay and 93 feet of net gas pay in the already-producing Pliocene formation at the deep-water probe. According to Camac, drilling has been temporarily suspended but the horizontal section would be drilled in the first quarter to pave the way for first oil as planned by the middle of 2014. Initial production from the well is estimated at 7,000 barrels

per day of oil. The probe being drilled by t h e Tr a n s o c e a n s e m i submersible Sedneth 701 was originally scheduled for between April and August but was put back several times over delays on another job. Allied Energy, a Nigerian subsidiary of Camac Energy, operates the Oyo field, which straddles OML 120 and OML 121. The explorer has been aiming to boost output levels at the field, which have lagged well behind targeted 25,000-barrel first-phase output. The field was originally discovered by Italy’s Eni, which sold out of the project in January 2012.

Eni to spend $28bn in Nigeria, rest of Africa

taly’s Eni, the parent company of leading Nigerian oil explorer and producer Agip, is to pump $28 billion into exploration and production activities in Africa in the next few years. The Paolo Scaroni-led major plans to drill 140 wells between this year and 2016 as it hunts a huge resource boost. “We are targeting 3 billion barrels of equity resource in four years,” Reuters quoted executive vice president for exploration Luca Bertelli as saying. “If achieved, this will give us access to new resources at an exploration cost of $1.2 per barrel. With the results achieved so far in 2013 we are very confident that this target will be met,” Bertelli added. Eni interest in Nigeria is through Nigerian Agip Oil Company, NAOC, which operates a joint venture with state-owned Nigerian National Petroleum Corporation, NNPC, among others, and is engaged in oil and gas exploration and production. Operating Oil mining Leases, NAOC produces 150,000 barrels of oil per day mostly from small onshore fields. Eni expects its operations in

In Mozabique, Eni has hit huge discoveries, an estimated 70 trillion cubic feet of natural gas. Eni owns 70 percent of the Mamba acreage and sources have said the group is being courted by oil rivals Africa, including its jumbo find in Mozambique, to underpin long-term growth as it presses ahead with plans to shift its focus to exploration and production. " Af r i c a h a s b e e n t h e backbone and will be a key driver for the future. Our long-term relationship positions us well for new opportunities," Africa and Middle East executive Roberto Casula told analysts in an Eni Upstream Seminar in London months back. State-controlled Eni is the biggest foreign major in Africa and key projects there represent 55 percent of Eni's volumes, the highest proportion of any oil major. North Africa accounts for about a third of Eni's total oil and gas production, but there

are worries that uncertainty in Libya after its civil war could jeopardise growth targets. In Mozabique, Eni has hit huge discoveries, an estimated 70 trillion cubic feet of natural gas. Eni owns 70 percent of the Mamba acreage and sources have said the group is being courted by oil rivals. "Seventy percent is an unusual percentage and unusual because it's too big. In the future we can have some change in this JV (joint venture) in terms of ownership," E&P head Claudio Descalzi had told reporters in a press conference. J.P. Morgan estimates Eni's 70 percent stake in Mamba to be worth $15.2 billion.

NIGERIA CONTENT INITIATIVE Dr. Ibilola Amao

GACN, NLPG, GENCOs, DISCOs and Nigeria Gas Revolution The growth and development of natural gas utilisation in Nigeria has been constrained by a lack of political will to put in place the appropriate policy, incentives and fiscal regime that would stimulate domestic gas utilisation. Now, we seem to be making progress as practically all the ingredients are in place to ensure a successful tie-in to the Obama Power Africa project. This is a good time to challenge the government of President Goodluck Jonathan to deliver uninterrupted power to Nigerians. The Gas Aggregation Company Nigeria Limited, GACN, which exists to stimulate domestic gas utilisation and was formed in line with the National Domestic Gas Pricing Regulations, NDGPR, of 2008 is now available to serve as a vehicle for the implementation of the Gas Master Plan, GMP. GACN must begin to engage stakeholders aggressively if it should actualise its role as a strategic aggregator of Nigeria’s gas. Two government policies - NDGPR and the Nigeria Domestic Gas Supply and Pricing Policy, NDGSPP - are also available for gas investors. It is hoped that with the privatisation of PHCN, signing of agreements with GENCOs and DISCOs, stakeholders would be encouraged to maximise statutory provisions and utilise existing policies and agreements to bring about a positive change. The Gas Sale and Aggregation Agreement, GSAA, simplifies a lot of complexities that had hitherto frustrated the efforts of well meaning investors. It requires that a buyer submits a Gas Request Form, GACN processes the form, the buyer completes a due diligence questions, GACN processes the questionnaire, Buyer is accepted or rejected into the demand pool, accepted buyer is issued a GPO and draft GSAA and an agreement is signed as soon as such is reached by the buyer, seller and GACN. Nigeria thus has a definitive legal and regulatory framework with the gas master plan that can empower investors to achieve projects of national repute whilst creating value. Another viable vehicle for domestic gas use is the Nigerian Liquefied Petroleum Gas Association, LPGA, an umbrella body of stakeholders with a primary objective of promoting the use of LP gas at an affordable cost. It is expedient now that we push for the implementation of the GMP thus ensuring that the three main facets: The Domestic Gas Supply Obligation, which is the obligation on upstream companies to make available to the domestic market a specific volume of their total gas production, thereby creating a structured approach to ensuring availability of domestic gas; the Gas Pricing Framework which adopts a gas pricing framework that categorises the demand sector into three strategic sectors and applies various and bespoke pricing regime for each sector and the Gas Infrastructure Blueprint which proposes an integrated infrastructure strategy to support domestic, regional and LNG export markets are implemented speedily. Now is the time for Power and hydrocarbon industries to collaborate and bring about a transformational development. Nigeria has been plagued with epileptic power supply for over 25 years so there is no better time than now for us to wake up and shape up. We need to see connectivity between natural resources and societal development. Now is the time to encourage investment in the development of Central Processing Gas Facilities, CPFs, and kilometres of pipeline network. If the last set of NEPA/PHCN staff were recruited over 20 years ago, I am now bothered that if Nigerian Content is to be achieved, we must find Nigerian experts who understand the national and regional grid, who can repair and fix the equipments in the old substations and stations and up-skill experienced hands, craftsmen, technicians and vocational who can deliver in the construction, operations and maintenance of safe gas and power infrastructure.

Oil

201 December, SweetcrudeReports

A refinery

'Refineries to be refurbished before privatisation’

inister of Petroleum Resources, Mrs Diezani A l i s o n Madueke, dropped hints recently of Federal Government's plan to sell the nation's four crude oil refineries in Warri, Kaduna and Port Harcourt next year. “We would like to see major infrastructural entities such as refineries moving out of government hands into the private sector. Government does not want to be in the business of running major infrastructure entities and we haven’t done a very good job at it over all these years,” AlisonMadueke told Bloomberg TV Africa in London. The refineries, which have a combined 445,000 barrel-a-day capacity, should be privatised within 18 months, according to the report submitted to President Goodluck Jonathan in November 2012. Now, the minister says the refineries would first be refurbished to optimise their potentials before the sale. Alison-Madueke, who also disclosed that the labour unions in the oil and gas sector would be be carried along by

the government in the privatisation process, said of the government plan for the refurbishment of the refineries: “As you know we started with the TAM (Turn Around Maintenance) with the original contractors that built the refineries with the intent of ensuring that the right people carry out the TAM once and for all. "Unfortunately, the actual negotiations have been an extremely drawn out one because of the prices that they came in with. So it has taken a number of months of robust negotiations to get to the point with Port Harcourt refinery where we can actually begin to implement the work. Once that is close to completion Kaduna and Warri will continue”. She continued: “The intent was to ensure that government does not sell the refineries when we do privatise, in the worst possible state, to ensure that we get some commercial value for these refineries. " We w i l l k i c k o f f t h e privatisation rounds, we will have all the due negotiations with the unions to ensure that we are all working together to ensure that it is a win-win

situation for all parties at the end of the day. “But, it goes without saying that over the last 20 years, government has not done too well at handling major infrastructure and government should not be in the business of handling infrastructure. Let the private sector come in and let us see competitive efficacy in the handling of these major entities in the interest of our economy.” Improvements to the twounit 210,000 barrel-a-day Port H a r c o u r t r e f i n e r y, t h e country’s biggest, will be completed by the end of the year, to be followed by enhancements at the Warri and Kaduna sites in 2014, according to the NNPC. Warri has a daily processing capacity of 125,000 and Kaduna 110,000 barrels. Very close to its tenure in 2007, the President Olusegun Obasanjo administration sold the refineries to a consortium belonging to billionaire businessman Aliko Dangote and Femi Otedola. The sale was, however, upturned by the suceeding President Musa Yar’Adua government shortly after assumption of office.

Nigeria losing ground in investment destination to Angola -ExxonMobil

igeria is fast losing ground in terms of an investment destination to fellow African nation Angola and needs to create competitive policies, among other terms, to enable it achieve its full potential in the oil and gas sector, according to US super major and oil industry giant ExxonMobil. Vice President, ExxonMobil Production Company, Elijah White, disclosed this in Lagos, listing other factors Nigeria needs to come to terms with in its drive for an effective and efficient oil and gas industry to include the creation of a stable and attractive investment climate. He said: "Nigeria needs to create a stable and attractive investment climate, competitive fiscal terms to attract capital and develop clear regulatory and competitive policies that would enable her to realise the full potential of the industry". Expressing fears over Nigeria's aspiration to raise oil reserves to 40 billion barrels by 2020, White said this may well remain a dream in the absence of a "stable and attractive" climate for investors, especially with the continued delay in the passage of the much-awaited Petroleum Industry Bill, PIB, "Nigeria is uniquely challenged by reduced exploration activities, decreasing resource size, tightening of fiscals and uncertain gas terms," White asserted as he also pointed out that "Nigeria would need to quickly address fundamental issues such as funding limitations and operations inefficiencies.”

Oil

2013 December, SweetcrudeReports

Chevron increases total global fund investment to $60m Commits new $5m investment for HIV prevention in Nigeria

hevron Nigeria Limited, CNL, operator of the Chevron/NNPC Joint Venture has announced that Chevron Corporation has committed an additional $5 million over two years to The Global Fund to Fight AIDS, Tuberculosis and Malaria to target the prevention of mother-to-child transmission of HIV, PMTCT, in Nigeria. This commitment raises Chevron’s 8-year investment in the Global Fund to $60 million, making the company the single largest private sector partner to the organisation. “We recognise the deep interdependence of healthy businesses and healthy societies,” said Rhonda Zygocki, Executive Vice President, Policy and Planning for Chevron Corporation. “Our continued partnership with the Global Fund reflects our long-term commitment to investing in health, education and economic development initiatives that help build strong communities.” Chevron became The Global Fund’s inaugural Corporate Champion in January 2008, when it committed $30 million to support AIDS, tuberculosis and malaria programmes in Asia and Africa. In 2010, the company made an additional commitment of $25 million to fight HIV/AIDS and PMTCT in Angola, South Africa, Thailand, and Vietnam.

part in saving 8.7 million lives through the company’s support of The Global Fund". “Chevron has shown commendable leadership in the fight against infectious diseases,” said Dr. Mark Dybul, the executive director of The Global Fund. “With shared responsibility and strong partnerships with governments, civil society and private sector players like Chevron, we will defeat these deadly diseases. Chevron’s strong support helps bring us ever closer to this historic opportunity.” Chevron has been at the forefront of the fight against AIDS since 1986 when it joined 13 other Bay Area companies to promote education and reduce stigma in the workplace. In the 1990’s, Chevron expanded efforts internationally and in 2005 the company implemented a global HIV and AIDS policy supporting employees and their families.

s part of its commitment to help eliminate mother-to-child t r a n s m i s s i o n o f H I V, Chevron joined the Business

Chevron

Chevron became The Global Fund’s inaugural Corporate Champion in January 2008, when it committed $30 million to support AIDS, tuberculosis and malaria programmes in Asia and Africa

hevron said in a statement that, in expanding these efforts, it initially chose The Global Fund as a partner in 2008 "because its performancebased model provides an efficient and highly-impactful way to sustain healthy communities around the world. The Global Fund also places a significant emphasis on measurement and evaluation of the programs it funds, ensuring that Chevron’s investments are making a tangible difference. To date, Chevron has played a

Leadership Council (BLC) on an ambitious program focused on empowering state governments to lead their own HIV response, setting concrete targets for the reduction of HIV transmission and developing a simple plan to get there. Under this programme, in Nasarawa State, Prevention o f M o t h e r To C h i l d Transmission continues to achieve encouraging results as the number of clinics

offering PMTCT services tripled in both public and private clinics thus leading to over 35,000 additional women tested for HIV and 1,500 additional HIV+ pregnant mothers and 650 babies put on Anti-RetroViral Drugs. In May 2013, Chevron announced a new US$1.3 million commitment over three years to fund our BLC partnership in support of Nigeria Scale-up of PMTCT

in Bayelsa, Lagos and Rivers States. “I am happy to say that the programme is delivering good result” said Andrew Fawthrop, CNL’s Chairman Managing Director. “In the last 6 months, over 6,000 people have been touched with the HIV/AIDS outreach in Bayelsa State under the PROMOT program- a PMTCT program in Bayelsa state which we are doing in partnership with Pact”. He explained.

Oil

2013 December, SweetcrudeReports

kerosene queue at a filling station

Kerosene: Lagos residents want Task Force to enforce N50 price

agos residents are clamouring for a government Task Force that would enforce the official N50 per litre pump price for kerosene . In many fuel outlets in the state, kerosene is being sold by dealers for as high as N150 per litre. A First Bank of Nigeria official, Mr. Felix Balogun, said many marketers were not selling kerosene at the official price of N50 and this had made cooking difficult in some homes. Urging the regulatory agencies to sanction marketers selling above the official pump price, he also urged the Federal Government to find a lasting solution to the persistent high cost of the product. “The high price of kerosene is exposing many Nigerians to difficulties and causing a drain in their pockets. Most families have been forced to use firewood in spite of its cumbersome process,’’ Balogun said. Mrs. Deborah Yakubu, a kerosene retailer in Onipanu area of Lagos, blamed the high cost of the commodity on

both major and independent marketers. “They sold a litre of kerosene to me at N105 per litre with other charges. How much did they expect me to sell it to make my gain? Government should set up an independent task force to sanction any erring marketer,’’ she said. Alhaja Modinat Ojora, a food seller in Maryland, said that the situation was pathetic and urged the Federal Government to find a way of addressing the problem. F o r M r. B a m i d e l e Ogunshakin, the Managing Director of Ollymore Oil and Gas Ltd., his station was allocated 10,000 litres to sell at N50 per litre and all had been exhausted. Ogunshakin said marketers, who were selling above the official pump price, were sourcing the product on their own at the rate of N98 per litre, excluding other charges. “Marketers should not be blamed for the hike in the price of kerosene. Government should live up to expectations by supplying the commodity at the official

pump price of N49.50. We are businessmen. We cannot keep our storage facilities empty without the product. “We have to source the product at any price to keep the company running so that we will be able to pay for

utilities and other expenses,’’ he said. In spite of the launch of the campaign on “sale of kerosene at N50 per litre” nationwide, some filling stations in Lagos are still selling it above the pump

price of N50 per litre. Consumers often spend hours on queues at filling stations to buy the product at the official pump price. A litre of kerosene costs between N160 and N170 outside the filling stations.

Bayelsa JV gives Heritage Oil more foothold in Nigeria H

eritage Oil, an international independent upstream exploration and production company engaged in the exploration and production of oil and gas, says its recent strategic alliance with Bayelsa Oil Company, owned by the Bayelsa State government, has given it more foothold in Nigeria. The Jersey-based company entered into a joint venture with Bayelsa Oil Company to establish an indigenous Nigerian oil company called Petrobay Energy, which will go into acquisition of production, development and exploration assets from international oil companies operating in Nigeria. Heritage holds a 45-percent equity interest in the joint venture company with base in Yenagoa, the Bayelsa State capital. It said the deal will give it a better foothold in the Nigerian oil and gas industry and allow it to be a "significant contributor" to the future development of Nigeria’s oil and gas industry. Petrobay will also enable it to build upon its current interests in Nigeria. "Heritage Oil is honoured to be entering into a commercial strategic alliance with the state of

Bayelsa through the joint venture, Petrobay, with Bayelsa Oil Company. "Petrobay will be uniquely positioned to acquire and develop hydrocarbon assets in the Niger Delta, where we can bring exploration and production expertise that, harnessed with the energy and aspirations of the people and state of Bayelsa, will generate value and benefits for all stakeholders," Heritage's chief executive officer, Tony Buckingham, said. He added: "Petrobay will develop close relationships with local communities and other stakeholders in the Niger Delta in recognition of the key role their support plays in securing assets and delivering safe, stable and productive operations. " T h i s a l l i a n c e r e i n f o r c e s H e r i t a g e ’s commitment to a country with huge potential and the company is well placed to play a significant role in the future oil and gas industry in Nigeria." Heritage Oil established a footprint in Nigeria when it acquired a major interest in the OML 30 license through its interest in Shoreline Natural Resources.

Focus

2013 December, SweetcrudeReports

Local Content: Our story is incomplete without Chevron - Marine Platforms

we run specialised tools to the home before lower completions to clean up the well of debris. We’ve been doing this since 2007 and the second leg of the business is in the subsea services where we provide remotely operated vehicles and subsea solutions for companies. The third leg is in the vessel chattering, primarily multi-purpose support vessels, which is the pedestal with which we launched our subsea solutions. At present we have 250 locals and we are carrying about 50 expatriates. We have our headquarters in Lagos and we have operational base at Onne (FOT) and we have our technical support office in Aberdeen.

YEMIE ADEOYE

a r i n e Platforms Limited, MPL, is an indigenou s Nigerian company offering diverse oil and gas services in strategic alliance with reliable and proven technical partners. MPL adds value to the upstream sector of the oil and gas industry in Nigeria and beyond through safe delivery of quality products and services ranging from completions and sub-sea services to vessel chartering services. In this interview with SweetcrudeReports in Lagos, the Chief Executive Officer of the company, Mr Taofik Adegbite, affirms that the company’s story will be incomplete without C h e v r o n a s t h e multinational company did a yeoman’s job in ensuring that Marine Platforms attained the position it holds today. In extolling the virtues of the company which gave it the life it has today, Adegbite says Chevron does quite a lot in the area of Nigerian Content development but falls shy to speak of it. Excerpts: Please introduce yourself and tell us a little bit about Marine Platform My name is Taofik Adegbite, Chief Executive Officer of Marine Platforms, a hundred percent indigenous Nigerian company. It was registered in the year 2001 and started business in 2002. Our creation was actually at the

Mr. Taofik Adegbite

advent of the Nigerian Content initiative as it were, and we have metamorphosed from a Nigerian Content initiative riding on the tight rope to where we are today with the advent of the Nigerian Content Law. We have seen the entire spectrum of Nigerian Content initiative to Nigerian Content Directive to Nigerian Content Law. In Marine Platforms, we operate in three segments. On the completion side, we do well working of tools where

Our creation was actually at the advent of the Nigerian Content initiative as it were, and we have metamorphosed from a Nigerian Content initiative riding on the tight rope to where we are today with the advent of the Nigerian Content Law.

How did you come about Marine Platforms? It started during the clarion call for local participation in the oil and gas industry right about year 2000, there was a renewed vigour for Nigerian companies and indigenous companies to participate. At the same time, in consonant with human nature, we followed the part, most companies went into the downstream sector, we had a lot of companies leveraging o n t h e r e n e w e d encouragement for indigenous companies, while few companies went upstream, so at the time we decided that we would go the upstream route, it wasn’t particularly easy. We were actually a product of the local content initiative and that was what created the awareness and the company was established. When the company started, CONTINUES ON PAGE 15

Focus

2013 December, SweetcrudeReports

partners became sure after seeing Chevron’s visitation come and do inspection it further gave them confidence, and on the strength of that they created a company out of Cayman Island through which they now transact with us. So, truly speaking this little here and there created the whole opportunity with which we emerged from the subsea vessel side of our business so successfully. Chevron played a very serious role because without that there would be no track record and without track record we would not be able to obtain other milestones.

CONTINUED FROM PAGE 14 we were very clear that the part we’ve chosen would not be easy and would take considerable act. In 2002, three promoters of the company debated and the conclusion was if we don’t make profit for 5 years, we would still stick with it, and it was agreed that we would not do what is easy. We were at the time thinking about long term sustainability, so, we knew that if we go for the low hanging fruits, it might not be sustainable. That was what brought about going into the subsea services, which at the time was still even new for the foreign companies. So, we decided to start, and we started deep water operations. It’s been a very rough road since 2002 to 2007 without any job. Amongst the three of you who started the company, are any of you an engineer or geologist? No! We were not engineers or geologists. We were entrepreneurs and we knew what we are setting out to do in business creation. We knew we lacked the technical knowledge; we knew we didn’t understand native greetings but we knew we could acquire purpose and define the entrepreneur chase. Tell us about your relationship with Chevron? Our story is incomplete without Chevron. Marine Platforms' achievement today would not have been possible without riding on the back of Chevron. I’m saying this proudly to Chevron, we were only doing the running of well bugling, clean up tool and with all sense of responsibility. Well bugling clean up tool is about two percentage of our revenue stream now. So, to explain well bugling, clean up, those are the tools we run down hole that represents about two percent of our entire revenue. We still take it seriously, it’s our bread and butter. We like doing it, we don’t want to despise our days of little beginning but we cut our teeth in the subsea services, in the vessel charting with Chevron.

Adegbite

Our story is incomplete without Chevron So, the big leap for Marine Platforms was as a result of Chevron, And I must say because that’s a general statement, Chevron at the time chooses not to be very strict in following contracting rules to the l e t t e r. R a t h e r t h a n disqualifying us during technical tender stages, they chose to follow through, verify our technical partners and competences. We see that as a major turning point. I could remember, it was their mutual relationship with NIPS at the time that brought about them following us to Aberdeen to go and look at our partner’s location and thereafter when we were to get the vessel they went to Norway to go and inspect the

So, the big leap for Marine Platforms was as a result of Chevron, And I must say because that’s a general statement, Chevron at the time chooses not to be very strict in following contracting rules to the letter

vessel and that gave our would-be partners in Norway confidence, especially because at that time in 2009 was about the peak of the

Niger Delta unrest. So, for the Norwegians, it was forbidden for any Norwegian owner to work in Nigeria, hence when our

Tell us about Chevron’s contribution to the local content development? Chevron’s contract was the first contract that I would ever see in my little oil and gas experience that is specifically different for training of locals at the time within the contractual framework. They make provision for training of pilots that they pay for. Now as a company we leveraged on that. They made provision for two slots. As we speak, we have trained twenty five pilots using that slot. That explains our discipline, and leveraging on the little creation of Chevron has been a very successful privilege to channel out IBX pilots. So that’s a major and a very remarkable thing Chevron is doing regarding local content development. Where do you see Marine Platforms in another six or seven year from now? We are a five-year span company. We take five strategic years to plan 2002 to 2007, 2007 to 2012. So 2012 to 2017 is the span we are now in. Between now and 2017 which is already happening, we and our clients can put a seal of approval and trust on Marine Platforms. Where there is an emergency to please call Marine Platforms, they will fix it. That’s where we are getting. Now, the moment we do that, every other ones will fall in because it takes you away from competition and for our 2017-2022 plans, we are looking at our financial consolidation.

Gas

2013 December SweetcrudeReports

NLNG launches $1bn finance scheme for contractors, vendors gas masterplan, together with NLNG Train 7 and Brass LNG, on completion, would create thousands of jobs for Nigerians. The Train 7 project specifically, he said, would create economic opportunities for local companies and address the nation’s capital and infrastructural challenges. Noting that the scheme was a demonstration of his company’s commitment to the Nigerian Content and in line with the company’s vision of helping to build a better Nigeria, Omotowo advised the beneficiaries and banks to strictly play by the rules to guarantee the success and sustainability of the scheme. He explained that the facilities were neither grants nor awards, adding that NLNG and the participating banks had developed a comprehensive strategy to ensure effective monitoring of the scheme. NLNG has achieved several milestone in the development of Nigerian

A gas vessle

SAM IKEOTUONYE

o a i d i t s registered local contractors and vendors access scarce funds from banks in form of loans at conducive rates, the Nigeria Liquefied Natural Gas Limited, NLNG, has initiated a $1 billion financing scheme for them. Five local banks are participating in the scheme and any contractor or vendor registered with the NLNG could approach any of the banks for a facility that would enable them execute jobs from the gas company. To access the loan, however, such vendor or contractor would be expected to present to the bank a work order, purchase order or contract document from the NLNG. The participating banks are First Bank of Nigeria, Access Bank, United Bank for Africa, UBA, Standard Chartered Bank and Zenith Bank. NLNG's Managing Director, Mr Babs Omotowo, signed, in

Port Harcourt recently, on behalf of his company, a M e m o r a n d u m o f Understanding, MoU, with representatives of the five banks. Specifically, the scheme is part of the Nigerian Oil and Gas Industry Content Development Act of 2010 which encourages full participation of local companies alongside their foreign counterpart. According to Omotowo, who was represented by NLNG’s General Manager for F i n a n c e , M r. S o l o m o n Folaranmi, the credit would enable the NLNG registered contractors and vendors speed up delivery of goods and services to the nation’s oil and gas industry. “Banks in Nigeria often find it challenging acceding to loan applications from local contractors with little or doubtful assurances of repayment. Local enterprises, which have little track record, credit history or liquid collateral are often refused finance because banks perceive them to be

risky," he said. He added: "Today, the NLNG is taking a major step in bringing both potential lenders and borrowers together to bridge the financing gap that exists locally. This scheme will alleviate funding challenges of vendors, reduce operating cost, improve project delivery timeline and drive the growth of Nigerian vendors. “This is just a step, and in the right direction. The success of any local contractor is linked to larger and smaller businesses around it in the value chain. We need to further develop initiatives as an enabler or platform to develop the value chain and maximise the opportunities of the future, especially with huge projects in sight such as the federal government’s Gas Master Plan initiative and Train 7". “NLNG recognises the many challenges limiting the sustainable growth and development of local content in Nigeria, a key one being lack of access to adequate funds. A significant number

A significant number of willing contractors struggle to get financing. Banks in Nigeria often find it challenging acceding to loan applications from local contractors with little or doubtful assurances of repayment of willing contractors struggle to get financing. Banks in Nigeria often find it challenging acceding to loan applications from local contractors with little or doubtful assurances of repayment. An enterprise may have little track record, credit history or illiquid collateral and thus risks are therefore perceived to be high and this makes it more difficult for local contractors to find finance,” he added. The NLNG boss stated that the Federal Government’s

Content in the areas of manufacturing, fabrication, shipping, training and skills development and transfer of technical knowledge to indigenous companies. The company is owned by four shareholders, namely, the Federal Government of Nigeria, represented by the Nigerian National Petroleum Corporation, NNPC (49 per cent), Shell Gas BV (25.6 per cent), Total LNG Nigeria Limited (15 per cent), and Eni International (10.4 per cent).

2013 December, SweetcrudeReports

Gas

Cooking gas

IPMAN wants Nigerians to adopt cooking gas as household fuel

n the face of the difficulty various households across the country are experiencing with kerosene, the Independent Petroleum Marketers Association, IPMAN, would want the nation to adopt the liquefied petroleum gas, otherwise known as cooking gas, as household fuel in place of kerosene. The call is coming amid scarcity of kerosene in many parts of the country and the high prices of as much as N150 per litre the product has been selling at, despite the government pegging the price at N50 per litre. Making the call in Lagos, IPMAN's national president, Alhaji Abdulkadir Aminu,

said the need for Nigerians to switch to gas from kerosene was not only born out of the scarcity and high prices that have been associated with kerosene but was a result of the knowledge that gas was the energy of the future, and has been adopted as household fuel in many countries across the world. Irked by high kerosene prices across the country, IPMAN recently carried out a campaign in the Southwestern zone of the country, including in Lagos, Ibadan and Ilorin, enforcing the sale of kerosene at the official price of N50 per litre at fuel stations. Aminu said after the campaign in Lagos that the association would be

moving to Sokoto, Kano, Jos, Maiduguri, Yola and Enugu to also enforce the official N50 per lire price for kerosene at fuel stations. "I want to assure Nigerians

that a lot has been done by government to ensure that gas has come to stay. If you go to Benin, we have Compressed Natural Gas. In Lagos NIPCO has 5,000

metric tonnes of LPG," he stated as he disclosed that IPMAN was currently involved in the promotion of the utilisation of gas in the country.

Micro-finance Banks join Oando in promoting gas utilisation

icro-finance banks across the country have joined force with Oando Plc to drive the mass utilisation of cooking gas in the country. This follows the recent signing of a Memorandum of Understanding, MOU, between Oando Marketing Plc, OMP, and the National Association of Microfinance Banks for the promotion of Oando Gas or O-Gas, a cleaner and safer cooking fuel, packaged by OMP to make the gas easily accessible to Nigerians. According to Head of Marketing communications at Oando Marketing Plc,

Seun Soyinka, the signing of the MOU was in keeping with his company's plan to convert millions of Nigerians from the use of other energy sources for cooking to gas. He said that with the new partnership, every Nigerian could own the O-Gas threein-one gas cylinder by paying N200 at any micro-finance bank as initial deposit, following which the person would be issued the portable 3kg O-Gas complete set. The customer will then be required to make a further N200 deposit daily with the selected micro-finance bank for a month to complete payment.

2013 December, SweetcrudeReports

Power

2013 December, SweetcrudeReports

Shortage of manpower hits power sector

Sapele II Power Plant

ELUONYE KONYEGWUAEHI

h o r t a g e o f manpower has hit the nation's power sector after the mass sack of workers of the defunct Power Holding Company of Nigeria, PHCN, by the Bureau of Public Enterprises, BPE, in the wake of the hand-over of PHCN facilities to the new owners. Mostly affected, according to sources, are electricians and transformer technicians. Organised labour is alleging that this development is partly responsible for continued poor power supply situation across the country. But, the BPE said t that those who were sent away from PHCN were mostly nontechnical people and that their sack could not have affected power supply. Mr Chigbo Anichebe, chief spokesman of the BPE, told

SweetcrudeReports on telephone from Abuja that the disengagement of the workers followed a well-co-ordinated discussion with the electricity unions, which began as far back as 2006, insisting that efforts were made between the government, the industry unions and the new owners of the privatised PHCN companies to ensure that those who were vital to the smooth operation of the electricity industry were retained by the new investors. The BPE had after the new owners took over the PHCN facilities on November 1, sacked over 60 percent of the workers, including union leaders, leading to tension and a looming industrial unrest in the sector. While government handed over the PHCN successor companies to their new owners on November 1, the BPE had on Monday November 4,

But, the BPE said last night that those who were sent away from PHCN were mostly non-technical people and that their sack could not have affected power supply

issued sack letters dated October 21, to the workers, allegedly indiscriminately without payment of their severance benefits. The BPE action was said to have breached the agreement reached between government and organised labour on the eve of the hand-over that none of the workers not paid their entitlements would be sacked. At the same time, it gave six

months contract of employment to workers without allegedly bothering to ascertain the status, competence and state of health of such workers. Like the sack letters, the reengagement letters were equally dated October 21. It has long been discovered that B P E r e l i e d o n a rationalisation list allegedly prepared under the

immediate-past Minister of Power, Professor Barth Nnaji, without auditing or scrutinising it. Investigation revealed that the sector is now grossly under-manned as well as lacking competent hands. For instance, many of the transformer technicians were said to have been sacked, leaving customers to be grappling with erratic power supply. A business manager in one of the units in Lagos, who spoke on condition of anonymity, decried the manner the workers were sacked without recourse to their competence, experience and other requirements to stabilise power supply during this transition period. He said: "In most of the units or facilities, we are experiencing acute shortage of personnel. Those that know

CONTINUES ON PAGE 20

Power

2013 December, SweetcrudeReports

OSCARLINE ONWUEMENYI

drawn and not just drawn frivolously, that is why the BPE, Bulk Trader and the banks signed the agreement to say that you have to follow a process to draw this money otherwise there will be penalties. The lead bank is FCMB which is the lead escrow agent, others are UBA and First Bank. The money is coming from the proceeds of the sale of PHCN successor companies”. The BPE boss however clarified that the distribution companies or Discos were not covered by the fund, explaining that the Disco owners had committed to reducing t h e A g g r e g a t e Te c h n i c a l Commercial and Collection, ATC&C, losses of the distribution companies. “If you recall, they (distribution companies) were not given to the highest bidder but to those that committed to reducing ATC&C losses by a certain percentage, they have committed and have given a technical proposal with a business plan cataloguing the level of investments that they will make every year in this regard”, he explained.

he Federal Government has placed N50 billion i n e s c r o w accounts of three selected Nigerian banks to support power generation companies, GENCOS. The money which was part of the amount realised from the recent sale of the successor companies of the Power Holding Company of Nigeria, PHCN, would insure generating companies from any revenue loss in their effort at boosting electricity generation. This is following from government's earlier promise to provide such incentives to the newowners of the generation companies which had accordingly made payments for their assets such basis; through the Bureau of Public Enterprises, BPE, and Nigerian Bulk Electricity Trading Company Plc, NBET. The government thus signed in Abuja an escrow agreement on power with three Nigerian banks, the participating banks being First City Monument Bank Plc, FCMB - the lead escrow agent, United Bank for Africa, UBA, and First Bank Plc. The accounts would be managed by the Electricity bulk Trader, NBET. Speaking to newsmen shortly after the signing of the agreement with the banks, Director General of BPE, Benjamin Dikki explained that the fund is not an endowment to the GENCOs but was put in place as an incentive to the power plants owners to invest in expanding their capacity. According to him, “This N50 billion is not a dash, there are certain conditions that must be met before funds can be drawn from this escrow account. The market and systems operator have to confirm the quantum of power that was put on the national grid. “The market operator has to confirm that because of system defects and inefficiencies in the transmission network, certain amount of power was lost, so there has to be a due process before any Genco can draw from this amount, it is not a gift because certain conditions have to be met. “It is actually the generation companies that are left on the high end and we need to guarantee that whatever power they generate will be paid for if not, they will lose their capital and not able to

Dikki

FG 'insures' GENCOs with N50bn escrow account deposit Shortage of manpower hits power sector invest on expansion of their capacities”. He noted that the country has about 29,000 megawatts, MW, of basic power needed to stabilise the nation's power need of 40,000MW and that the average cost of installing a megawatt is about $1.3 million, which would mean an investment of $7.5 billion for 5,000MW. He said government needed to ensure the creation of the atmosphere that will enable these generation companies to make investments in power generations without looking back or worrying whether they will be able to recoup monies they have invested and that is why this escrow account was created. Dikki said the whole “essence is to induce efficiency in the market, if somebody is penalised for losing power in the system, that person will sit up and ensure that it does not lose power and money. Whatever that is already drawn from

the escrow account cannot be clawed back, it is the insurance that the federal government is giving to ensure that we have stable power". “Something must come at a cost, at this initial stage of the development of a private sector-driven power market, there has to be some guarantees that will enable investors to see a clear horizon of investments; if they see any chances of them losing money in the process, they won’t invest and so in this transition market, government must provide some sort of guarantees that will give the Genco owners some confidence to go and invest $1.5 million per megawatts to give us the level of stability that we want," he added. Commenting on the roles of the banks, he stated that they “are the custodians of the money which is deposited in them and we want to establish a process through which this money will be

CONTINUED FROM PAGE 19 the jobs have been sacked. In most places, what you have now are marketers. Transformer technicians and other qualified electricians have been sacked. If there is break down or fault, there is hardly anybody to send to effect the repair. It is obvious that those who carried out the mass sack, do not understand the sector. Even before the privatisation, the sector was under-staffed to the extent that we had over 15,000 casual workers. "The sooner the new owners and government jointly take a second look at the mass sack, do a competence auditing and recall valuable hands indiscriminately sacked, the better for the industry. As it is today, the consumers are bearing the brunt of erratic power supply." It could be recalled that the National Union of Electricity Employees, NUEE, petitioned the Federal Government through the Minister of Power, Professor Chinedu Nebo, over alleged sacked of almost all the union officials in the sector and casualisation of jobs in the sector, urging authorities concerned to reverse the perceived anti-labour policy or risked industrial action without notice. Reacting to the allegation of mass sack, Anichebe, the BPE chief spokesman, said: "It is outlandish to claim that the BPE carried out a mass sack. The disengagement of workers at the PHCN and the decision as to who should be sacked or retained followed careful discussions which the labour unions were fully involved in". He noted that prior to the disengagement exercise, there was an careful assessment of the sector, where the new investors outlined where they needed personnel and the personnel they needed, and that it was based on this the decision as to who should be retained and who should be sacked was reached.

Power

2013 December, SweetcrudeReports

New power firm owners push for tariff increase

Power substation

erely weeks after take over of their n e w companies, investors in the defunct Power Holding Company of Nigeria, PHCN, successor firms are complaining. One of the complaints is that the current electricity tariff as specified in the Multi-Year Tariff Order, MYTO, is grossly inadequate to guarantee return on investment. This they voiced at a recent meeting with the National Electricity Regulatory Commission, NERC, in Abuja. The operators, who have already raised service charge from N750 to N1,500, allege that though they were yet to commence operating under the MYTO, they have have seen that the inadequate tariff would combine with with other observed problems in the sector to make operations difficult for them. It was not initially clear what

the NERC position on the matter was, but the Senate was prompt in warning the new power investors not to inflict more pains on Nigerians through tariff increase. The Senate is yet to receive any official document on this, it confirmed complaints by electricity consumers of alleged hike in tariff by some of the operators. Chairman, Senate Committee on Power, Senator Philip Aduda, said: “I’ve not seen it (any document) because they’ve not brought it before me. When they bring it before me, of course, I will look at it and then I will see what we can do because we can’t continue to overburden Nigerians with such charges. “We have to keep interacting with them to ensure that Nigeria has steady power supply. We need to make sure that they do the right thing and ensure that Nigerians get value for the money that is

paid. We also have to ensure that they keep to the contractual agreements.” The Senate Committee chairman lamented the poor power evacuation capacity of the Abuja Electricity D i s t r i b u t i o n C o m p a n y, otherwise known as KANN Consortium. “I am aware that adequate power is given to the Abuja Disco but unfortunately, to evacuate it becomes a problem,” Aduda as urged the Minister of Power, Prof. Chinedu Nebo, to improve the operations and management of the Transmission Company of Nigeria to ensure smooth evacuation of generated electricity. “We must also get our transmission right. We must ensure that those that are saddled with the responsibility of managing our transmission get it right,” he said. In a statement days after, NERC denied approving

We must also get our transmission right. We must ensure that those that are saddled with the responsibility of managing our transmission get it right

electricity tariff hike for the power distribution companies or DISCos. At a media briefing in Abuja, NERC chairman, Dr Sam Amadi, said the commission had not approved any increase in electricity tariff or charges by the DISCOs. "We want to make it clear that NERC has not approved any increase by any DISCO. However, customers who feel that they are victims of such purported increases should come forward with evidence," he said. Amadi said the commission

had put in place a team to go out to the field and investigate such complaints, stressing that the new owners of the DISCOs could not unilaterally increase the tariffs without the express approval of NERC. "Companies who want to charge more for their services must apply for a rate review. Once this application is received by the commission, a thorough and transparent process of stakeholders engagement follows before any rate review becomes official," Amadi said.

2013 December, SweetcrudeReports

Power

Oloronsogo II Power Plant

Power investors require $7.5bn to grow generation … Allege inclement operational system OSCARLINE ONWUEMENYI additional skilled manpower

nvestors in the power g e n e r a t i n g companies, originally owned by the defunct Power Holding Company of Nigeria, PHCN, but which has now been sold to private investors, would require an investment of $7.5 billion to meet the target set by them by the Federal Government. This is part of the many challenges confronting the core investors in the privatised PHCN power generating and distribution companies, who are under obligation to increase generation capacity by 5,000 megawatts, mw, in five years. Director General of the Bureau of Public Enterprises, BPE, Mr. Benjamin Dikki, who confirmed the target of 5,000mw generation set for the new investors, said an investment of $7.5 billion was required to meet the figure. “The core investors must invest in capacity building and skilled manpower if they are to achieve their targets," he said in Abuja as he maintained that the private sector takeover of the power sector has opened up the prospects of employing

and training of the retained workforce. Dikki explained that government was monitoring the activities of the new owners closely and any found in breach of the terms of purchase agreement would face sanction, which may include recovery of the assets from the investors.

ut at a meeting last week in Abuja, the new investors lamented the operational challenges confronting them in the aftermaths of their takeover of the PHCN firms, alleging that things were actually upside down in the companies. “How on earth will I make money? We are not even near the assumption of MYTO (Multi-Year Tariff Order) because MYTO says I should be allocated eight per cent of the total generation capacity, which means if the generation is 2,000MW, Kano should be allocated at least 160MW. "Yesterday, our allocation was 80MW and out of that 25MW is going to Niger Republic. So, I think these are serious issues which we have found on the ground and they should be

In the past couple of weeks, there have been problems nationwide. The public now believe that when they don’t have power, the new owners do not know what they are doing when in reality it is because of lack of gas,” Osibodu added

supposed to pay their bills until January, they believe that the debt they owed before should be written off and that they should stand in front of you and collect free meters.” “In the past couple of weeks, there have been problems nationwide. The public now believe that when they don’t have power, the new owners do not know what they are doing when in reality it is because of lack of gas,” Osibodu added.

a d d r e s s e d u r g e n t l y, ” lamented Dr. Jamil Gwamna, Managing Director of Kano Electricity Distribution Company. Gwamna further stated: “In terms of complying with rules especially those in MYTO, the reality on the ground in Kano Disco is that all the assumptions in the MYTO model have been turned upside down. Load allocation to Kano is so bad that for the last three days we are getting as low as 40 megawatts (MW)

to cover Kano, Jigawa and Katsina States. Not only that, about 20MW goes to Niger Republic".

anaging Director of Benin Distribution Company, Funke Osibodu, who also spoke on the challenges before the new power investors, said: “There is confusion in the public and we have to as a group address the confusion. For instance, the public believe that they are not

fficials of Egbin and Geregu power plants also spoke at the event, accusing the Market Operator, MO, and System Operator of the Transmission Company of Nigeria, TCN, of not adhering to the MYTO-2 agreements and provisions in the interim rules. According to them, the MO does not use the official rate stipulated in the interim rules. Chairman of NERC, Dr. Sam Amadi, in his response, however, assured that all issues raised would be addressed by the regulator, adding that the essence of the meeting was to bring the operators together to draw up interventions that will address the problems.

2013 December, SweetcrudeReports

Power

NIPPs bidders must have $100 to $250m net worth - Olotu Financial evaluation to be announced January 2014 efficiently and effectively a power plant of the size of which they themselves said they want to buy. "This is to safeguard Nigeria from people who are just coming in to buy, strip the assets and then take away the money. Having been satisfied that the people who want to buy are technically competent and effectively able to run the kind of power plant they are talking about, we now look at their financials. "Again, sometimes somebody may be technically good but he does not have the money to pay. We look at the financials and see that they have the clout to do so. Then we announce the financial results. "That hopefully according to our agenda will finish by J a n u a r y n e x t y e a r. Thereafter, the preferred winners and the runners up would be made known. "Then we give them a period of six months to be able to gather all the money they need to gather. By June or July next year, all the payments would have been made. "Do not forget they are

Ihovbor Power Plant, near Benin City

SAM IKEOTUONYE

nvestors bidding for any of the 10 National Integrated Power Projects, NIPPs, put up by the Federal Government for privatisation must have a net worth of between $100 and $250 million, according to Managing Director of the Niger Delta Power Holding C o m p a n y, N D P H C , M r James Olotu. This is specifically part of the NDPHC guidelines, which a bidder must meet before being considered for possible ownership of any of the power plants and the net worth expected of each bidder would be dependent on the capacity of the power plant under consideration. The NDPHC has received about 66 proposals for the acquisition of 80 percent of the 10 power plants, with installed capacity of 4,700mw The plants are still largely under construction. According to the NDPHC M a n a g i n g D i r e c t o r, a n

Evaluation Committee is already considering the proposals sent in by the bidding companies and was expected to round up its assignment soon to kickstart the approval process for the bids. The committee, comprising technical people, such as engineers, lawyers, accountants, EFCC, SSS officials and representatives of the World Bank and other members of the international community, is evaluating the proposals on the basis of establishing the validity of the claims by the bidders.

t is being monitored by Nigerian Electricity Regulatory Commission, NERC, Ministry of Power, as well as staff of NDPHC. Olotu stated that the committee had a mandate to complete its assignment in a minimum of two weeks, but added that if they needed more time, it would be given to them. But, he stressed that the target is that within the two weeks, they would

"bring the evaluation based on certain parameters". He said the committee would be looking out for three things from the proposals of the bidders, first of which is the competence of the investors to operate and manage successfully the power plants of the capacity that they wish to acquire. Second, according to him, is their financial capability while the third is "to ensure that the team that forms a consortium is strong enough and not one that may fall apart halfway into the process." The Alaoji power plant got three proposals, Egbema, four; Ogorode, Omoku and Geregu got eight proposals each; Gbaran, seven; B e n i n / I h o b o r, f o u r ; Olorunshogo, five; Calabar, six; while Omotosho had the highest proposals of 13. Olotu spoke on what follows after the assignment of the Evaluation Committee: "It is after the evaluation, that the report will be submitted, which will be taken to the

sometimes somebody may be technically good but he does not have the money to pay. We look at the financials and see that they have the clout to do so. Then we announce the financial results

board and the owners of the company. "Upon their approval, we announce the results. Then we open the financial bid.

he technical bid is to ensure that the people have competencies technically to be able to run

investing in 80 percent shares in the individual power plants that are existing. It is not as if we are selling the assets. They are buying into a growing concern. What they are buying is the ability of that growing concern to make money by giving power efficiently into the grid".

2013 December, SweetcrudeReports

Power

PHCN Staff

Stakeholders blame defunct PHCN for erratic power supply

ome stakeholders in the power sector have blamed the defunct Power Holding Company of Nigeria, PHCN, management for the epileptic electricity supply in spite of the Federal Government’s huge investment in the sector. They said in separate interviews in Lagos that the poor state of electricity supply did not justify the N328.2 billion invested between 2010 and 2013. Statistics showed that power sector received N147. 59 billion in 2010, while N91.2 billion was approved for the sector in 2011. The sector got N12.18 billion and N77.4 billion in 2012 and 2013, respectively. Mr Fashola Thomas, Chairman, Scalps Electrical Engineering Nig. Ltd., in Lagos, said that the Nigerians, especially the organised private sector, had not benefited from government's investments in the power sector.

Thomas said that inability of Nigeria to meet its development goals as captured in ‘Vision 2020’, especially on electricity g e n e r a t i o n a n d s u p p l y. remained a major set back. According to him, development plans will only become a reality when they are complimented with practical commitment. He said that sustainable development would be achieved through aggressive investments in infrastructure and strategic plans. The Chairman said that the n a t i o n ’s p o o r e l e c t r i c i t y generation and supply were serious obstacles to domestic and foreign investors. The Managing Director, Dolby Engineering Company, Mr Felix Duru, said that Nigeria had failed to meet the 35, 000 megawatts electricity generation projection in the last seven years. “Am not sure we can meet the projection of archiving 40,000 megawatts of electricity by year

2 0 2 0 . T h e Vi s i o n 2 0 2 0 , therefore, recognised that for the Nigerian economy to become one of the top 20 in the world, it has to generate and make available to its citizenry adequate power for economic and social purposes. “But electricity supply has been unstable in the country and subsequently stunted economic growth because of multiple factors, ranging from lack of adequate investments. Others include lack of maintenance, new infrastructure and abandonment of other reliable sources of cleaner and sustainable electricity like coal, solar, nuclear, wind and biogas,” he explained.

rs Benedicta Godwin, the Managing Patner, Global Electric Installation Ltd., said that the critical questions should be why Nigeria had, over the years, failed to deliver stable electricity supply. Godwin said that government

investment in the power sector was not commensurate with the current state of electricity generation and distribution nationwide. She urged relevant authorities to critically overhaul the power sector management to avert a repeat of Nigerians experience under the defunct PHCN managment. “The former and current Minister of Power should be blamed for the recurring crisis in the Power sector. The amount government invested in the power sector should be investigated to ascertain if they were well managed," she said. Mr Adeogun Babalola, Chairman, Infinity Engineering Company, said that government's intervention in the power sector was enough to develop effective technical model for the nation’s power sector. He said that less than 40 per cent of Nigerians enjoyed electricity supply, adding that

The former and current Minister of Power should be blamed for the recurring crisis in the Power sector. The amount government invested in the power sector should be investigated to ascertain if they were well managed,

the poor energy supply had driven many companies out of the country.

Finance

2013 December, SweetcrudeReports

Oando to complete $1.68bn ConocoPhillips deal January 31 Oando service station

igeria's l e a d i n g integrated energy group, Oando, will now complete the $1.68 billion acquisition of the assets of ConocoPhillips in Nigeria on January 31, 2014. Oando Energy Resources, the upstream arm of Oando Plc, said it had extended the closure date of the acquisition by 60 days from November 30, 2013 to January 31, 2014. Dr. Alex Iruna, Head, Corporate Communications at the Oando Group, affirmed the company's commitment to completing the deal by the new date, saying: â&#x20AC;&#x153;The availability of $815 million in committed credit facilities from local and foreign banks and the already paid $435 million deposit place OER in good stead to finalise the financing of the balance necessary to close the $1.68 billion purchase.â&#x20AC;? He said Oando had focused on upstream diversification in an effort to increase annual free cash flows and increase value creation for shareholders.

Also available to Oando is ConocoPhillips offshore business, which includes Conoco Exploration and Production Nigeria Limited, CEPNL, which holds a 95 per cent operating interest in OML 131, with other partners as Medal Oil, 5 per cent; and Phillips Deepwater Exploration Nigeria Limited, PDENL, which holds a 20 per cent nonoperating interest in OPL 214 According to him, this acquisition would be a transformational milestone, making Oando the largest indigenous exploration and production company in Nigeria with 50,000 barrels of oil equivalent per day in production, 236 million in 2P reserves and over 500 million in contingent resources. Oando chief executive Wale Tinubu has said that the company's upstream business will account for about three quarters of its assets after the Conoco acquisition, against 40 percent now. Prior to divesting from Nigeria, ConocoPhillips

onshore business in the country included Phillips Oil Company Nigeria Limited, POCNL, which holds a 20 per cent non-operating interest in Oil Mining Leases, OMLs, 60, 61, 62, and 63 as well as related infrastructure and facilities in the Nigerian Agip Oil Company Limited, NAOC, Joint Venture, in which the Nigerian National Petroleum Corporation, NNPC, holds a 60 per cent interest while NAOC, which operates the assets, holds 20 per cent. The second onshore business is Phillips Brass

Limited, PBL, which holds a 17 per cent shareholding interest in Brass LNG Limited, which is developing the Brass LNG project. Brass LNG is a greenfield project to develop a twotrain of 10 million tonnes per year Liquefied Natural Gas, LNG, facility in Bayelsa State. The other partners are NNPC, 49 per cent; Eni, 17 per cent and Total, 17 per cent. Also available to Oando is ConocoPhillips offshore business, which includes Conoco Exploration and Production Nigeria Limited,

Wale Tinubu

CEPNL, which holds a 95 per cent operating interest in OML 131, with other partners as Medal Oil, 5 per cent; and Phillips Deepwater Exploration Nigeria Limited, PDENL, which holds a 20 per cent nonoperating interest in OPL 214. The other partners include ExxonMobil which is the operator with a 20 per cent stake; Chevron, 20 per cent; Svenska, 20 per cent and the Nigerian Petroleum Development Company, 15 per cent, as well as Sasol, 5 per cent.

2013 December, SweetcrudeReports

Finance

CBN's N5.7trn facility to banks will boost business, economy —Expert

he Central Bank of Nigeria, CBN's, recent injection of N5.74 trillion into the nation's financial system will bolster business activities and boost the economy, according to a financial expert. “Irrespective of the amount injected into the system, once there is an injection, it simply means that money will be readily available in the system for those who intend to borrow," Executive Secretary of Financial Markets Dealers Association, Mr Wale Abe, said. He said the rationale behind the injection of the fund was to bring down the interest so that those who intend to borrow could do so for their business. Specifically, according to him, the N5.74 trillion facility given banks by the CBN will help to reduce interest rates in the country. Abe stated that availability of liquidity in the financial system would encourage Nigerians to borrow from banks at low interest rates. CBN injected the N5.74 trillion through Standing Lending Facility, SFL, to banks at 14 per cent interest rate.Abe said that the low interest rates would automatically boost economic and business activities. “Irrespective of the amount injected into the system, once there is an injection, it simply means that money will be readily available in

Irrespective of the amount injected into the system, once there is an injection, it simply means that money will be readily available in the system for those who intend to borrow

Sanusi Lamido Sanusi, CBN Governor

the system for those who intend to borrow. “The rationale behind the injection is to bring down the interest rate so that people who intend to borrow can do business,” Abe said. Abe said that the CBN was

managing liquidity in the system through injection and withdrawal of funds. He however, said that the CBN could at anytime mop up such injected funds from system if it perceived that there was excess liquidity.

Abe pointed out that the CBN could also mop up excess liquidity so as not to distort price level stability and cause inflation in the country. “The CBN is always out to do the needy. The needy are

Shell, NPDC, others enjoyed N65bn duty waivers —Ministry

everal operators in the energy sector enjoyed duty waivers this 2012/2013 fiscal year, according to the Federal Ministry of Finance. Information released by the ministry in Abuja listed players in the energy sector that benefitted from the waivers to include Shell Petroleum Development Company Limited, Nigerian Petroleum Development Company, NPDC - a subsidiary of the Nigerian National Petroleum Corporation, Shoreline Power Company Limited, Niger Delta Power Holding Company, NDPHC, and Geometric Power Limited. According to the ministry, the total sectoral waivers granted during the period stood at N64,954,823,288.17. Many federal ministries and departments as well

as state governments, including Rivers, Sokoto and Ebonyi also benefitted from waivers during the period. The power sector topped the list of beneficiaries, enjoying a total N25,868,620,005.04 waivers, followed by the gas s e c t o r w i t h N17,875,687,748.27. Coming in third on the waivers list is the agricultural sector with N11,841,058,035.87, according to the data by the Ministry of Finance.

that it injects money or withdraws money from the system. That is part of the monetary responsibilities and function of the central bank to ensure price level stability,” he said.

The Ministry of Mines and Steel and its health counterpart also featured in the list with N1,442,024,137 and N7,935,433,366.99. The granting of waivers became a con tentious issue recently followed allegations that the controversial amoured cars bought for Aviation Minister, Mrs Stella Oduah were granted waivers. Observers said that the Federal Ministry of Finance may have been led to issue the data on the waivers to clear itself from the allegation that it may have granted waivers on the armoured cars.

2013 December, SweetcrudeReports

Finance

Zenith is bank of the year Zenith Bank head office, Lagos

eading Nigerian bank, Zenith, has been named "Bank of the Year Nigeria 2013" by the Banker magazine, a publication of Financial Times of London. At the award ceremony at the Intercontinental Park Lane Hotel, London, which attracted top global personalities and institutions, Zenith Bank Plc's Group Managing Director, Mr. Godwin Emefiele, said: “The bank's competitive advantage as a financial powerhouse for value creation in Nigeria and the several achievements and successes of the brand are a result of a strategic combination of people talent, proprietary knowledge, strong brand equity, leadership, integrity and relationship management.” He stated that the award was an indication of the level of trust and confidence on the brand and a testimony to the strong management, sound business model and prudent risk approach of the bank.

The bank's competitive advantage as a financial powerhouse for value creation in Nigeria and the several achievements and successes of the brand are a result of a strategic combination of people talent, proprietary knowledge, strong brand equity, leadership, integrity and relationship management Mr. Emefiele dedicated the award to the bank’s customers and commended the management team and staff for working assiduously to build Zenith into a respected global brand. According to the award organisers, nominees were evaluated on the basis of their ability to deliver shareholder returns and gain strategic advantage in terms of market visibility and positioning. The Banker magazine said Zenith Bank was selected based on its overall performance and the opinion

of leading financial analysts from the world’s financial markets. Last week, Zenith Bank was named in the top 20 of Africa’s third most valued brands, a list in which the Nigerian National Petroleum Corporation, NNPC, was named in the third position with South Africa’s firms, mobile telecoms operator, MTN, retailers Shoprite and Woolworths named the top three. The Banker Magazine had earlier this year selected

Zenith Bank as Nigeria’s largest financial institution. In its 2013 rating of the world’s Top 1,000 banks, the magazine listed the bank as Africa’s 6th largest by Tier 1 capital having grown its Tier I capital to $2.969 billion within 12 months. Zenith Bank has continually evolved through innovation, dynamism, insight and leadership and has ultimately become a brand respected globally for its tremendous success in the deployment of cuttingedge technology, niche marketing, competitive advantage, provisioning and unwavering commitment to providing best-in-class service to its customers. An eloquent attestation of Zenith Bank’s best-in-class customer-centric service delivery was made by KPMG in its 2013 Banking Industry Customer Satisfaction Survey (BICSS). Zenith Bank Nigeria was ranked the best CustomerFocused bank in both the retail and corporate banking

categories on the basis of a Customer Satisfaction Index (CSI) which took into account key factors like, C o n v e n i e n c e , Product/Service Offering, Transaction Methods and Systems, Pricing and Customer Care. The survey covered more than 14,000 retail customers, 3,000 SMEs and 400 corporate/commercial organisations across Nigeria.

Mr. Godwin Emefiele

2013 December, SweetcrudeReports

Labour

2013 December, SweetcrudeReports

Pipeline vandals

Don't sell refineries, deal with pipeline vandalism —NUPENGASSAN *Oil workers prepare for 'war' over planned sale of refineries SAM IKEOTUONYE

igeria's oil industry workers are preparing for 'war' with the government He insisted that government over the plan to privatise the four state-owned refineries next

year. The oil workers, under the umbrella of the National Union of Petroleum and Natural Gas Workers, NUPENG, and the Petroleum and Gas Senior Staff Association of Nigeria, PENGASSAN, are asking that the government, rather than privatise the refineries, should solve the problem of pipeline vandalism as this was partly for the shutdown and poor level of performance of the refineries. According to NUPENG and PENGASSAN or NUPENGASSAN , problem of p i p e l i n e s

There is need to incentivise and, or compel IOCs to refine an agreed percentage of crude oil in the country. A suggestion is to tie upstream licensing to downstream investment and private ownerships of jetties should be encouraged

vandalism hamper supply of crude oil to the refineries, ensuring they remained unoperational even when the plants were in good operational condition. PENGASSAN President, Comrade Babatunde Ogun, who harped on the need for government to deal with the problem of pipelines vandalism that hamper the supply of crude oil to the refineries, urged that "those planning to sell the refineries and their cronies planning to buy them should emulate Alhaji Aliko Dangote and establish their own refineries instead of waiting to corner the nation’s common investment". “Why is the government

proposing the sale of these national edifices without doing the needful to ensure that the refineries work at their optimal capacity? Nigerians and the public deserve to know more on the desperate reasons for the spate and row of proposed privatisation, even when the selfish motives of these proposed national assets sales can spell doom for the country,” Ogun said. He also said the refineries should be entities independent of either the Nigerian National Petroleum Corporation, NNPC, or the proposed National Oil Company, NOC, as in the Petroleum Industry Bill, PIB, while the board of management of

each refining company should be fully responsible for its success and failure. Ogun also stated that instead of privatising the refineries, the government should grant effective incentives to allow for the development of private refineries alongside the existing ones, adding that a framework should be articulated that will make available, required crude for effective functioning of local refineries. “There is need to incentivise and, or compel IOCs to refine an agreed percentage of crude oil in the country. A suggestion is to tie upstream licensing to downstream investment and private ownerships of jetties should be encouraged,” he said.

2013 December, SweetcrudeReports

Labour

POWER PRIVATISATION:

No plan for sustainable energy supply, says Labour Electric power station

ELUONYE KOYEGWUAEHI

rganised labour in Nigeria has expressed concerns that the privatisation programme of the defunct Power Holding Company of Nigeria, PHCN, has no clear path to addressing existing gaps and building sustainable energy supply for the future. This was part of the communiqué at a roundtable organised to mark the Africa Industrialisation Day 2013 with the Theme: “Job

C r e a t i o n a n d Entrepreneurship Development - A Means to Accelerate Industrialisation in Africa." organised by the Nigeria Labour Congress, NLC, Trade Union Congress of Nigeria, TUC, affiliates and Federation of Informal Workers, FIWON, with the support of the Friedrich Ebert Stiftung, FES. Unions at the event included National Union of Textile, Garments and Tailoring Workers of Nigeria, NUTGTWN, National Union of Construction, Civil Engineering, Woodwork and

In spite of the challenge of global competition, the manufacturing industry as a whole, generates around 72 per cent of its own energy needs at a greater cost. But operating with generators greatly increases the cost of manufacturing goods, making it difficult for Nigerian goods to compete with cheaper imports

Workers Union; Food, Beverage and Tobacco Senior Staff Association, Steel and Engineering Workers of Nigeria, SEWUN, as well as FIWON. The unions also urged the Nigerian government to take immediate steps to resolve all residual labour issues in the power sector and pay all workers their entitlements to avoid the distasteful experience of employees of privatised Nigeria Airways and Nigeria Telecommunication Limited. The roundtable discussed issues around the privatisation of PHCN and the provision of efficient electricity for industry and the citizens at large, harping on the relevance of efficient electricity supply for sustainable industrial development. According to the communiqué, the roundtable noted that in spite of the promise of independence for sustainable industrial development and the

observed progress in industrialisation in the 1970s through the 1980s in which Nigeria recorded significant growth in the manufacture of household goods, steel and engineering, textile and apparels as well as automobile assembly, industrial manufacturing had witnessed monumental decline in the last two decades with contribution to GDP standing at a meagre 4 per cent in 2012. Participants argued that notwithstanding an annual GDP average of 7.4 per cent in the last decade, growth had not been inclusive, broad-based and transformational, saying, “Key economic indicators revealed that industrial development in Nigeria is on the decline rather than improving. Manufacturing contribution was a paltry 7 per cent in the 1960s and 1970s before growing to its peak of 10.5 per cent in 1985. Since then, total c o n t r i b u t i o n o f manufacturing has been on

a steady decline. The lowest in the history of the country is in 2010 where the total contribution was as low as 2.2 per cent. “In spite of the challenge of global competition, the manufacturing industry as a whole, generates around 72 per cent of its own energy needs at a greater cost. But operating with generators greatly increases the cost of manufacturing goods, making it difficult for Nigerian goods to compete with cheaper imports. The problems dovetail into the informal economy with its peculiar needs for electricity across rural and urban divide. There is a huge gap between the electricity needs estimated to be about 25,000 megawatts currently and the current electricity generation of 4,000 megawatts". It was noted at the roundtable that this gap will be further widened with increasing demand for electricity that is estimated to double in 2025.

2013 December, SweetcrudeReports

Labour

ELUONYE KOYEGWUAEHI

he Trade Union Congress of Nigeria, TUC, has called on President Goodluck Jonathan to personally intervene in the plight of thousands of sacked workers of Power Holding Company of Nigeria, PHCN, who have not been paid their terminal benefits. Report has it that no fewer than seven thousand workers of the defunct PHCN have not been paid a kobo, while 30,000 of them were paid only part of their severance benefits. It would be recalled that the Federal Government through the Bureau of Public Enterprises, BPE, on November 1, handed over the assets of PHCN to new owners, while three days later, over 30,000 of the workers were issued sack letters dated October 21, 2013. Contrary to the agreement reached between labour and the government on October 31 that no worker would be disengaged without full payment of his or her terminal benefit, it, it has been uncovered that no fewer than 7,000 were disengaged without receiving a kobo. In the same vein, contrary to the extant labour law, few thousands that were reengaged were employed on six months contract (casuals). Decrying the action of BPE, President of TUC, Comrade Bobboi Kaigama, said: “ We further implore the President to intervene to put an end to the plight of thousands of power sector workers who have not been paid their terminal benefits under the previous managements of the original successor-companies to the PHCN.” Collaborating Comrade Kaigama, President-General of the Maritime Workers Union of Nigeria, MWUN, Comrade Anthony Emmanuel Nted, recalled that the same plight has befallen workers in the maritime sector, especially employees of the Nigerian Ports Authority, wondering why the Federal Government would treat its citizens as slaves. According to him, “It is very sad that the Federal Government would sack its

PHCN workers

TUC, MWUN urge Jonathan's intervention on plight of PHCN workers employees that served for years without paying their terminal benefits as agreed with organised labour. What

sort message is the government sending to other employers? It is unacceptable and

condemnable. We call on President Jonathan to wade into this national embarrassment. How do

they expect these workers to go on with their lives, or do they want them to take to crimes?

Manufacturing sector unions task FG on re-industrialisation

abour unions in the nation’s manufacturing sector have called on the Federal and State Governments to dedicate greater efforts at re-industrialisation of the country, saying industrialisation must be on the table for Nigeria to be among the 12 global leading economies in 2020. T he unions are National Union of Textile Garment and Tailoring Workers of Nigeria, NUTGTWN, National Union of Petroleum and Natural Gas Workers, NUPENG, Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, National Union of Electricity Employees, NUEE, Chemical and Non-Metallic Products Senior Staff Association of Nigeria, CANMPSSAN, and National Union of Chemical, Footwear, Rubber, Leather and

Non-Metallic Products E m p l o y e e s , NUCFRLANMPE. Operating under the umbrella of IndustriALL Global Union Nigeria (umbrella body for unions in manufacturing sector across the globe), the unions vowed to jointly fight against precarious work, casualisation, anti-union and other unfair labour practices in the country. Speaking at the National

Executive Council, NEC, meeting of IndustriALL Global Union African region, African Region Chairman and General Secretary of NUTGTWN, Comrade Issa Aremu, said: “It is top on our agenda to fight against precarious work, casualisation in Nigeria and in Africa because it is the same story everywhere in Africa.

2013 December, SweetcrudeReports

Labour

eneficiaries of the SURE-P Community S e r v i c e s Women and Youths Employment Project, CSWYE, have reached 118, 912 in the 36 states of the federation and the Federal Capital Territory, according to Minister of Labour and Productivity, Chief Emeka Wogu. Wogu said in Abuja at the formal meeting with members of the Senate Ad Hoc Committee on Subsidy Reinvestment and Empowerment Programme, SURE-P, that the volume of work done by the beneficiaries of CSWYE so far in all the states of the federation "translated to a total of 160,548,400 manhours, with environmental sanitation accounting for the highest value of 110,776,900 man-hours and traffic control the lowest, with a total of 3,817,300 man-hours output". According to him, "a total of 118,912 persons, who comprise 75,823 males and 43,089 females; with 5122 physically challenged persons spread across a total of 8,864 service points in 11,139 communities of 8,993 wards across the 774 Local Government Areas of the federation are currently benefitting from the project". The CSWYE Project, the minister said, has become a promise kept to Nigerians, with the unique features that ensure transparency and accountability, adding that it is the first of its kind that has direct positive impact on the lives of poor women, youths and other vulnerable members of the society.

SURE-P benefits 118,912 in 36 states

Women at work in a factory

Senator Abdul Ningi, chairman of the Senate Ad Hoc Committee on SURE-P, at the occasion, commended the minister for his transparent presentation. The Senate Committee chairman maintained that the CSWYE was a project that should be supported and sustained for its direct bearing on the poor and vulnerable

citizens of the country. He noted that the Senate and his committee "view this particular programme as very cardinal and very important to the wellbeing of the citizens of this country" and believes that if properly implemented, it would be a catalyst for development.

A total of 118,912 persons, who comprise 75,823 males and 43,089 females; with 5122 physically challenged persons spread across a total of 8,864 service points in 11,139 communities of 8,993 wards across the 774 Local Government Areas of the federation are currently benefitting from the project

Poor infrastructure, major drawback to Nigeria’s development - NUTGTWN.

he National Union of Textile, Garment and Tailoring Workers of Nigeria, NUTGTWN, has decried the poor s t a t e o f infrastructure in Nigeria, saying it has remained a major drawback in the nation’s quest for socio-economic development.

General Secretary of the union, Comrade Issa Aremu, while delivering a paper on Nigeria’s Democracy and Economic Challenges in Kaduna, lamented that infrastructure such as power, telecommunications, transportation and water supply are basically inadequate in terms of geographic spread, quality and efficiency. Comrade Aremu who is also a Vice President of Nigeria

Labour Congress, NLC, argued that the state of disrepair of most of these facilities was a reflection of poor maintenance culture in the country. According to him, “infrastructure such as power, telecommunications, transportation and water supply are basically inadequate in terms of geographic spread, quality and efficiency. Most of the facilities are dilapidated,

obsolete, unreliable and ineffective. The state of disrepair of most of these facilities is a reflection of a poor maintenance culture. The overall outcome is high cost of goods and services as industrialists often pass on the high cost of transportation and power supply, among other costs, to the consumers.” “A major challenge is making the basic needs of life available and affordable

to all Nigerians. Government would, therefore, need to restructure her expenditure patterns and move away from direct involvement in the production of goods to the provision of adequate infrastructure. This would also require private sector partnership. In pursuance of the economic and democratic country, Nigeria must have labour policies that encourage and strengthen independent, democratic, transparent and accountable trade unions," he said.

Solid Mineral

2013 December, SweetcrudeReports

Ajaokuta Steel Company

inister of Mines and S t e e l Developme n t , M r Musa Sada, says the Ajaokuta Steel Complex in Kogi State needs massive auxiliary infrastructure to enable it take off the ground. Sada, who revealed that the Federal Government was taking its time with the i m p l e m e nt a t i o n o f t he project to prevent avoidable mistakes, said beyond cash bail out, there was need for urgent provision of infrastructure to revive the project. Speaking in in Abuja, the minister said: "The project needs massive provision of auxiliary infrastructure to revamp and put the steel company back on stream”. He added that the most critical infrastructure needed included rail tracks and sea port for conveying raw materials and finished products as he emphasised the determination of government to ensure the project became an economic asset to the country. At a recent interaction with the minister, the Senate Committee on Power, Steel Development and Metallurgy had asked for the injection by the Federal Government of $1 billion into the project as the members expressed displeasure over the delay in the revival of the project. Chairman of the Committee, Senator Philip Aduda, stated that the

Ajaokuta Steel needs massive auxiliary infrastructure —Minister committee would not relax its efforts at ensuring the company was revamped to advance Nigeria's industrialisation and that the committee would be seeking audience with President Goodluck Jonathan on the matter, especially as it concerned financial allocation for the steel sector in the 2014 budget.. “We want to see that the steel sector is revamped to

The project needs massive provision of auxiliary infrastructure to revamp and put the steel company back on stream

boost our industrial sector. For us to industrialise, we must ensure that our steel sector is working. “We need to have audience

with Mr President to discuss the worries of the committee on revamping the company and the need for one billion dollars loan for the auxiliary

infrastructure. We will do everything possible within our power to move the sector forward because without the sector there can be no industrialisation in the country,” Aduda said.

World Bank grants $2.5m to 50 mining co-operatives

he World Bank has granted 2.5 million dollars (about N412.5 million) to 50 small scale mining co-operatives in Nigeria. Director, Artisanal and Small Scale Mining Department at the Ministry of Mines and Steel Development, Mr Obiora Azubike, made the disclosure in Abuja, saying each of the 50 cooperatives got $50,000 (about N8,250,000) through its micro-credit scheme. According to him, the miners and their host

communities benefited from the grant. "The unit of disbursement was 50,000 dollars. But before you are given the money, you are expected to also bring in some of your own matching grant, but not necessarily in cash. "So, whatever you are able to produce on your own will depend on how much you will be given. But the highest is 50,000 US dollars. The World Bank MicroCredit Scheme has ended. So, right now there is no World Bank Micro-Credit Scheme for artisanal miners. "The one we had before

under the Sustainable Management of Mineral Resource Project has ended," Azubike said. The director added that the World Bank project closed in May 2013 and the last disbursement was before the closure as he also disclosed that the next disbursement was expected as soon as the S o l i d M i n e r a l s Development Fund begins full operations. He stressed the need for the Federal Government to increase the funding of the sector through increased budgetary allocation.

2013 December, SweetcrudeReports

Solid Mineral

Kogi urges stricter mining regulation

Expert laments continued neglect of solid minerals sector

cting Director General of the N i g e r i a Geological Survey Agency, NGSA, Mr. Nwegbu Ndubuisi, has lamented lost opportunities in the solid minerals sector arising from its neglect by previous governments in the country. Ndubuisi, who identified the major problem militating against the development of the sector as failure by government and the private sector to fully appreciate the potentials of the industry, said this is shown in their lack of commitment to investing in the industry. He said: "Nigeria has no choice than to diversify the economy considering the endowment we have in the solid minerals sector.

A mining site

pecial Adviser to Kogi State Governor on Special Duties, Mr Johnson Onekutu, has called on the Federal Government to restrict the issuance of mining licence to only genuine miners. He told the Federal Government Solid Minerals Post Mortem Committee in Lokoja that rather than making solid minerals exploration an issue on the exclusive list, the state government should be

involved in deciding those to be granted approval to carry out exploration. The Kogi State Government, meanwhile, also said it is targeting the solid minerals sector for 50 per cent of its funds this year, an amount which is higher than the 13 per cent realised last year. The government decried a situation where the state was blessed with 29 out of the 35 solid mineral deposits found in the country, but was earning little or nothing from the resources. Represented by his deputy,

Mr Yomi Awoniyi, Kogi State governor, Idris Wada, urged the committee to ensure that the state benefited from its vast solid mineral resources to improve its fortunes. Wada, who decried the situation whereby communities in the state were at the receiving end as a result of solid minerals exploration, said the committee's visit to Kogi State was ''hope rising and signs of better things to come." Reiterating his

administration's desire to pay priority attention to the development of its solid minerals as alternative to the dwindling oil revenue, he said the state government would use whatever money it derived in the course of its solid mineral exploration for the development of the industry and the communities. Wada also urged the committee to ensure that the state got its right measure of the solid minerals it produced as he assured that the state was willing to

'Power sector can gain from experience of local steel firms' The Nigerian power sector has a lot to gain by tapping the potentials of local steel companies involved in the business of fabrication, according to the vice chairman of D o r m a n L o n g Engineering Limited, Chief Chukwuma Okolo. Okolo said in Lagos that indigenous fabrication companies have had wide-range experience in producing facilities for the oil and gas industry and that this has placed them in good stead for

fabrication jobs in the power sector. He was speaking in the backdrop of the recent disclosure by the Federal Government of plans for a N475 billion power transmission infrastructure, which according to Information Minister, Labaran Maku, follows from a proposal prepared by the Presidential Action Committee in support of government's plan for a 16,000 megawatts power generation capacity. Okolo, who spoke eloquently

of the preparedness of local companies to take up opportunities in the power sector, maintained that with the experience gained by the indigenous companies in the oil and gas sector, it would pay the nation to have the companies extend such experience to the power sector. According to him, having built up enough capacity to handle any job in oil and gas, all the nation's existing six medium-to-large scale fabrication yards required to perform in regard to the

power transmission infrastructure was for them to be issued guaranteed purchasing order, meaning they would be patronised if they built up more capacity. On the advantage of tapping the potentials of the local companies, he said this would create jobs and save the nation huge foreign exchange that would otherwise have gone to foreign companies.

partner with the mining industry with the provision of machinery and other working tools to ensure that the state derived maximum benefit from solid minerals. Ajibola Fagboyegun, leader of the committee, said recent discoveries showed that revenue accruing from sold minerals were not going to the respective states. According to him, the committee's visit to the state was to ascertain what should be due to the state in terms of derivation from monies already saved from previous sales and to determine if the actual amount received from explorations were being remitted into the federation's account. The visit would also establish a template to monitor inflow of monies derived from solid minerals, he said, urging states to pay more attention on mineral resources in their areas because, if well harnessed, Kogi, for instance, would stand tall in revenue indices in the country. Fagboyegun enjoined the Kogi Government to invest in the solid minerals sector as revenues from oil was no longer reliable, appealing to the state also to to look inwards and diversify its economy as, according to him, efforts would be made for the state to share from revenue that had so far accrued to the government from solid minerals.

Freight

2013 December, SweetcrudeReports

Seaport

Govt expecting $373bn revenue from Lekki Deep Seaport —Minister

bout $373 billion revenue would accrue to the Federal Government within the 45 year period of the concession of the Lekki Deep Seaport in Lagos, according to Minister of Transport, Senator Idris Umar. Umar disclosed this in Abuja shortly after the Federal Executive Council meeting presided over by Vice President Namadi Sambo approved the contract for the execution of the project. He said the project would create 162,000 jobs. Going by the FEC approval, the Federal Government will be spending $1.3 billion (about N217 billion) on the development of the seaport, which is being built to decongest existing ports in the country and provide importers in Lagos with an option outside the current facilities. Senator Umar told journalists after the meeting that the project, expected to be completed within the next four years, was to be constructed under a Public Private Partnership, PPP, arrangement on a concession basis for a period of 45 years,

The port will have the capacity to handle 4 million tonnes of general brake bulk cargoes. When completed, about $9.3 billion will be accruing to the Nigerian Ports Authority, NPA

after which it will revert to the Federal Government. According to the minister, the Federal Government has 20 percent equity in the project with Lagos State having 18.5 per cent equity while private investors take up the larger chunk of 61.85 per cent stake. “Council approved the issuance of a guarantee to cover financial obligation of the NPA (Nigerian Ports Authority) to pay compensation in the event of expropriation, war, civil disturbance, breach of

contract and other event of default as per the concession agreement for the development of the port, as $800 million out of the project cost is to be funded through debt financing while the balance of $554.5 million is to be contributed by equity. “The port will have the capacity to handle 4 million tonnes of general brake bulk cargoes. When completed, about $9.3 billion will be accruing to the Nigerian Ports Authority, NPA, made up of $2.6 billion from

FG approves Customs' handling of all import transactions CONTINUED FROM COVER PAGE The transition took effect from December 1, 2013, according to a statement in Abuja by Mr. Paul Nwabuikwu, Special Adviser to the Finance Minister, Dr Ngozi Okonjo-Iweala. The development confers on the NCS the

responsibility of full processing of all import transactions to Nigeria in accordance with the amended Import Guidelines of the Destination Inspection Scheme. In line with this, all Scanning Service Providers (Cotecna, SGS and Global Scan) shall cease to approve new Form M, issue Risk

Assessment Report, RAR, or perform scanning operations for goods imported into Nigeria, Nwabuikwu said in the statement, adding that the SSPs are to hand over all valid Form Ms and existing valuation database to the Customs Service. “However, the contract for provision of ICT

marine services and royalty and $6.7 billion from share of profit from the investment," he said. Minister of Information, Mr. Labaran Maku, also said of the development: "The Minster of Transport presented a memo seeking an approval for the development of the Lekki Deep Seaport, Lagos State, through a Public Private Partnership (PPP) arrangements for a concession period of 45 years for the Ministry of Transport/Nigerian Ports Authority (NPA).

infrastructure back up for the scheme currently being executed by Webb Fontaine is extended for a period of 18 months to ensure a smooth takeover by NCS. "As part of the take-over plans, help desks and dedicated hotlines have been provided to enable stakeholders and the general public channel complaints, observations and suggestions on the process to the NCS commands across the country," he said.

2013 December, SweetcrudeReports

Freight

Piracy still on the rise in West Africa —Report • Costs shipping, offshore industry $1.2bn TOJU VINCENT

iracy off the West African coastline has e s c a l a t e d dramatically in the past year, costing the shipping and offshore industry $1.2 billion, according to Maritime and Coastal Security Africa. The organisation said 851 seafarers have been attacked this year and pirates are currently holding 589 hostages. It further reports that piracy off the Horn of Africa costs the industry between $7 billion and $12 billion yearly, while illegal fishing off the African coastline costs the industry $1 billion a year. An estimated 600 maritime and naval experts will meet in Cape Town, South Africa, from 25 to 27 November to focus on institutional and technical solutions to piracy during the annual Maritime and Coastal Security Africa conference and exhibition. Leading military suppliers will display their technology and services at the event. Event promoter Tracey-Lee Zurcher said that South Africa and its maritime neighbours were actively setting out acquisition requirements to procure inshore and offshore patrol vessels, which are the most cost-effective patrol solutions and are easier to navigate in shallow waters when pursuing high-speed targets in an asymmetrical warfare scenario, such as piracy.

Apapa port

Anti-piracy patrol

“Secure ports and trade lanes are quintessential to the development of African economies as 90 percent of trade in and around Africa is seaborne,” Zurcher said.

Reuters reports that attacks off Nigeria’s coast have jumped by a third this year with ships passing through West Africa’s Gulf of Guinea, a major

commodities hub, increasingly under threat from gangs wanting to snatch cargoes and crews. “Pirates, often heavily armed and violent, are

Navy Chief seeks prosecution of maritime thieves

hief of Naval Staff, Vice Admiral Dele Ezeoba, has called for the prosecution of suspected oil thieves and other criminals engaged in illegal activities along the country’s waterways. Ezeoba made the call in Calabar after the i n s p e c t i o n a n d inauguration of some projects undertaken by the Eastern Naval Command, in Calabar. He said that the

enforcement and prosecution of the suspects would serve as a deterrent to others with similar intentions, noting that lack of prosecution of the suspects was one of the operational challenges the force was facing in the fight against criminality in the country’s maritime boundaries. According to him, the Navy also had challenges of inadequate platform, but he added that the challenges were being addressed.

He said: "To police our large maritime boundaries requires a lot of platforms in the right places. We need helicopters, operational patrol vehicles, human capacity and above all, technology that will provide us with a requisite surveillance. "And to large extent enforcement, which means that those who have been arrested for engaging in act of illegality are prosecuted in courts of competent

Jurisdiction and appropriate punishment meted to serve as deterrent to other people. "I think all of that is coming on stream. Very soon we begin to see a very high level of compliance by Nigerians, particularly, as it pertains to rules and regulations governing the maritime industry".

targeting vessels and their crews along the (Nigerian) coast, rivers, anchorages, ports and surrounding waters.

To police our large maritime boundaries requires a lot of platforms in the right places. We need helicopters, operational patrol vehicles, human capacity and above all, technology that will provide us with a requisite surveillance

2013 December, SweetcrudeReports

Freight

A cruise boat

LASWA ridership hits 12 million in 8 months TOJU VINCENT

o fewer than 12 million residents of Lagos State traveled through the waterways between January and July this year, the latest ridership of the Lagos State Waterways Authority has revealed. The ridership also showed that out of the over 20 million currently residing in Lagos, more than 1.8 million currently use the waterways

hana’s oil and gas assets could face serious threats from increasing pirate activities in the Gulf of Guinea, as a new report suggests that these activities in the region could double, with attacks, presently one a day, set to rise to two a day in 2014. A c c o r d i n g t o Paramount Group, Africa’s largest privatelyowned defence and

to move in and around the city on a monthly basis. The recently released LASWA ridership statistics also showed an increase of over a hundred percent in three years. The ridership is a statistical data used by the Lagos State Waterways Authority to monitor the number of commuters that use the state waterways to move within

Lagos. From a mere 494,010 ridership in June 2010, the ridership, as at July 2013, has gone up to 1,862,767, a development that has contributed in reducing pressure on the roads. A breakdown of the ridership showed that there has been a progressive increase in the number of people that travel by water

on a monthly basis. As at January 2013, a total of 1,103,567, as against 481,745 people in 2012, used the waterways . For the months of February and March 2013, 1,471,325 and 1,545,183 were recorded respectively, while the month of April saw a total of 1,671225 people using the waterways for that month.

Piracy: 'Ghana oil sitting on time bomb’ aerospace business, unless pragmatic measures are put in place to protect the country’s offshore assets, “piracy could do serious damage to Ghana’s oil and gas industry, slowing development for years to come.” A main driver of pirate activities in the Gulf of Guinea has been the boom in the regional oil ‘black market’, where stolen oil finds a ready market on the high seas, and

also serving as a conduit for drug and arms trafficking in the West Africa region. The problem has, however, assumed an international concern, on the basis that more than 30 percent of US oil and 40 percent of Europe’s oil passes through the Gulf, and is vulnerable to pirate activities. By the beginning of the last quarter of 2013, the International Maritime Bureau’s Piracy Reporting

Centre had recorded 30 pirate attacks in Nigeria alone, including two hijacking acts. The International Maritime Organisation’s 2012 Annual Report also indicated that despite a decline in Somalia-related piracy, the pirates’ success rate had seen significant increase of attacks vessels tanker vessels.

The figures for the months of February, March and April 2012 stood at 892,456, 1,212,768 and 1,560,182 respectively. For May, June, July and August 2013, the figures stood at 1,671,325, 1,852,653, 1,862,767 and 1,788,370 as against 1,318,372. The figures for the months of September, October and November were not available at the time of filing this report as they were still being expected from LASWA officials at the various terminals across the state. A source close to the authority said the ridership for each of the months could be as high as 2 million going by the steady increase in the number of people that have opted to travel by water over the years. Me a nwhi l e , t he st a t e government has concluded plans to commence the concessioning of the four major terminals with a view to providing more efficient a n d s a f e w a t e r transportation in the state. Already, interested investors have submitted their bids to that effect.

Motoring

2013 December, SweetcrudeReports

Best car to buy in 2014: Editorsâ&#x20AC;&#x2122; pick

ach year, the editors of The Car Connection drive and review more than 200 new cars, trucks, SUVs, crossovers and minivans. We rate those vehicles against other new vehicles available in the same model year, and grade them by how well they perform in a number of categories: styling, performance, fuel economy, safety, comfort and utility, and features. From those ratings, editors choose The Car Connectionâ&#x20AC;&#x2122;s Best Car To Buy award. The award is given to the vehicle that scores the highest overall rating from editors, and also has a base price of under $50,000, including destination fees. In the case of a tie, editors name a winner based on its significance and impact, as well as its potential appeal to a wide range of shoppers, drivers, and owners.

Subaru-forester

Mercedes-benz-cla

Mazda 6

Mazda 3

Lexus-is

CONTINUES ON PAGE 40

2013 December, SweetcrudeReports

Motoring

Best car to buy in 2014 CONTINUED FROM PAGE 39

Kia-Soul

Kia-Cadenza

Kia-Sorento

Chevrolet-Silverado-1500

GMC-Sierra-1500

CONTINUED FROM PAGE 41

2013 December, SweetcrudeReports

Motoring

Best car to buy in 2014 CONTINUED FROM PAGE 40

-Chevrolet-Impala

Cadillac-CTS

Acura MDX

BMW-4-Series

Infiniti Q50

Technology

2013 December, SweetcrudeReports

Environmental remediation Environmental remediation in progress

nvironmental remediation deals with the removal of pollution or contaminants from environmental media such as soil, groundwater, sediment, or surface water for the general protection of human health and the environment or from a brownfield site intended for redevelopment. Remediation is generally subject to an array of regulatory requirements, and also can be based on assessments of human health and ecological risks where no legislated standards exist or where standards are advisory.

Remediation standard In the USA, the most comprehensive set of Preliminary Remediation Goals, PRGs, is from the Environmental Protection Agency, EPA, Region 9. A set of standards used in Europe exists and is often called the Dutch standards. The European Union (EU) is

rapidly moving towards Europe-wide standards, although most of the industrialised nations in Europe have their own standards at present. In Canada, most standards for remediation are set by the provinces individually, but the Canadian Council of Ministers of the Environment provides guidance at a federal level in the form of the Canadian Environmental Quality Guidelines and the CanadaWide Standards|CanadaWide Standard for Petroleum Hydrocarbons in Soil.

Site assessment Once a site is suspected of being contaminated there is a need to assess the contamination. Often the assessment begins with preparation of aPhase I Environmental Site Assessment. The historical use of the site and the materials used and produced on site will guide the assessment strategy and type of sampling and chemical analysis to be done. Often nearby sites owned by the same company or which are nearby and have been

reclaimed, levelled or filled are also contaminated even where the current land use seems innocuous. For example, a car park may have been levelled by using contaminated waste in the fill. Also important is to consider off site contamination of nearby sites often through decades of emissions to soil, groundwater, and air. Ceiling dust, topsoil, surface and groundwater of nearby properties should also be tested, both before and after any remediation. This is a controversial step as: No one wants to have to pay for the clean up of the site; If nearby properties are found to be contaminated it may have to be noted on their property title, potentially affecting the value; No one wants to pay for the cost of assessment. Often corporations which do voluntary testing of their sites are protected from the reports to environmental agencies becoming public under Freedom of Information Acts, however a

"Freedom of Information" inquiry will often produce other documents that are not protected or will produce references to the reports.

Funding remediation In the US there has been a m echa nism for t a x ing polluting industries to form a Superfund to remediate abandoned sites, or to litigate to force corporations to remediate their contaminated sites. Other countries have other mechanisms and commonly sites are rezoned to "higher" uses such as high density housing, to give the land a higher value so that after deducting clean up costs there is still an incentive for a developer to purchase the land, clean it up, redevelop it and sell it on, often as apartments (home units).

Mapping remediation There are several tools for mapping these sites and which allow the user to view additional information. One such tool is TOXMAP, a

In the USA, the most comprehensive set of Preliminary Remediation Goals, PRGs, is from the Environmental Protection Agency, EPA, Region 9 Geographic Information System (GIS) from the Division of Specialised Information Services of the United States National Library of Medicine(NLM) that uses maps of the United States to help users visually explore data from the United CONTINUES ON PAGE 43

2013 December, SweetcrudeReports

Technology

Thermal desorption

Environmental remediation Thermal desorption is a technology for soil remediation. During the process a desorber volatilises the contaminants (e.g. oil, mercury or hydrocarbon) to separate them from especially soil or sludge

CONTINUED FROM PAGE 42

States Environmental Protection Agency's (EPA)Superfund and Toxics Release Inventory programs.

Remediation technologies Remediation technologies are many and varied but can be categorised into ex-situ and in-situ methods. Ex-situ methods involve excavation of affected soils and subsequent treatment at the surface, In-situ methods seek to treat the contamination without removing the soils. The more traditional remediation approach (used almost exclusively on contaminated sites from the 1970s to the 1990s) consists primarily of soil excavation and disposal to landfill "dig and dump" and groundwater "pump and treat". In situ

technologies include Solidification and Stabilization and have been used extensively in the USA.

Thermal desorption Thermal desorption is a technology for soil remediation. During the process a desorber volatilises the contaminants (e.g. oil, mercury or hydrocarbon) to separate them from especially soil or sludge. After that the contaminants can either be collected or destroyed in an offgas treatment system.

Excavation or dredging Excavation processes can be as simple as hauling the contaminated soil to a regulated landfill, but can also involve aerating the excavated material in the case of volatile organic compounds

( V O C s ) . R e c e n t advancements in bioaugmentation and biostimulation of the excavated material have also proven to be able to remediate semi-volatile organic compounds (SVOCs) onsite. If the contamination affects a river or bay bottom, then dredging of bay mud or other silty clays containing contaminants may be conducted. Recently, ExSitu Chemical oxidation has also been utilized in the r e m e d i a t i o n o f contaminated soil. This process involves the excavation of the contaminated area into large bermed areas where they are treated using chemical oxidation methods.

SEAR surfactant enhanced aquifer remediation A l s o k n o w n a s Solubilisation and recovery, the Surfactant Enhanced Aquifer Remediation process involves the injection of hydrocarbon mitigation agents or specialty surfactants into the subsurface to enhance desorption and recovery of bound up otherwise recalcitrant non aqueous phase liquid, NAPL. In geologic formations that allow delivery of hydrocarbon mitigation agents or specialty surfactants, this approach provides a cost effective and

permanent solution to sites that have been previously unsuccessful utilising other remedial approaches. This technology is also successful when utilized as the initial step in a multi faceted remedial approach utilizing SEAR then In situ Oxidation, bioremediation enhancement or soil vapour extraction, SVE.

Pump and treat Pump and treat involves pumping out contaminated groundwater with the use of a submersible or vacuum pump, and allowing the extracted groundwater to be purified by slowly proceeding through a series of vessels that contain materials designed to adsorb the contaminants from the groundwater. For petroleum-contaminated sites this material is usually activated carbon in granular form. Chemical reagents such as flocculants followed by sand filters may also be used to decrease the contamination of groundwater. Air stripping is a method that can be effective for volatile pollutants such as BTEX compounds found in gasoline. For most biodegradable materials like BTEX, MTBE and most hydrocarbons, bioreactors can be used to clean the contaminated water to non-detectable levels. With fluidized bed bioreactors it is possible to

achieve very low discharge concentrations which will meet or exceed discharge standards for most pollutants. Depending on geology and soil type, pump and treat may be a good method to quickly reduce high concentrations of pollutants. It is more difficult to reach s u f f i c i e n t l y l o w concentrations to satisfy remediation standards, due to the equilibrium of a b s o r p t i o n (chemistry)/desorption processes in the soil. However, pump and treat is typically not the best form of remediation. It is expensive to treat the groundwater, and typically is a very slow process to cleanup a release with pump and treat. It is best suited to control the hydraulic gradient and keep a release from spreading further. Better options of insitu treatment often include air sparge/soil vapour extraction, AS/SVE, or dual phase extraction/multiphase extraction, DPE/MPE. Other methods include trying to increase the dissolved oxygen content of the groundwater to support microbial degradation of the compound (especially petroleum) by direct injection of oxygen into the subsurface, or the direct injection of a slurry that slowly releases oxygen over time (typically magnesium peroxide or calium oxyhydroxide).

Solidification and stabilisation Solidification/stabilisation work has a reasonably good track record but also a set off serious deficiencies related to durability of solutions and potential longterm effects. In addition CO2 emissions due to the use of cement are also becoming a major obstacle to its widespread use in solidification/stabilisation projects. Stabilisation/solidification ( S / S ) i s a remediation/treatment technology that relies on the reaction between a binder and soil to stop/prevent or reduce the mobility of contaminants. Stabilisation - involves the addition of reagents to a contaminated material (e.g. soil or sludge) to produce more chemically stable constituents; and Solidification - involves the addition of reagents to a contaminated material to impart physical/dimensional stability to contain contaminants in a solid product and reduce access by external agents (e.g. air, rainfall).

Community

2013 December, SweetcrudeReports

Boardroom

New board for NDDC

new board has been confirmed for the Niger D e l t a Development Commission, NDDC, with Sen. Bassey Ewa-Henshaw as chairman and Mr Bassey Dan-Abia as managing director. The Senate in Abuja confirmed 12 others as members of the board. They are Mr Itotenaan Ogiri, Executive Director, Finance

and Admin (Rivers); Tuoyo Omatsulu, Executive Director, Projects (Delta); Mr Ball Turofade Oyarede (Bayelsa); and Chief Ephraim Etete (Rivers). Also included are Mr Etim Inyang Jnr. Akwa Ibom; Mr Adah Andeshi, Cross River; Mr Tom Amioku, Delta; Mr Samuel Nwogu, Abia; and Mr Uchegbu Kyrian, Imo. The others are Maj.-Gen. Suleiman Said, Niger, representing North-Central;

I hope that this new board having been approved very quickly by the Senate will also reciprocate by performing well

10,000 benefit from ALSCON's N23bn water projects in A'Ibom

t least 10,000 are benefiting from N23.25 million water projects executed by the management of Aluminium Smelter Company of Nigeria,

ALSCON, in Ikot Abasi Local Government Area of Akwa Ibom State. D i r e c t o r o f Public/Government Relations at ALSCON, Mrs Tatyana Smirnova, disclosed this in Ikot Abasi, saying 15 water

projects were executed by the company in different communities in the local government area. "We have executed 15 water projects in Ikot Abasi villages to provide clean and portable water which

amounted to N23.25 million," Smirnova said as she maintained that no fewer than 10,000 people had benefited from the water projects. Smirnova disclosed that the company was building a gas-fired power plant with a capacity to generate 540 megawatts of electricity.

and Alhaji Abdulmalik Mahmud, Bauchi, representing North-East. Prior to the confirmation, Senate President, David Mark, cautioned senators against sacrificing merit on the altar of local politics. "I want to appeal that we be careful in bringing local politics into the Senate. These people are qualified and I think we should allow them to go. I am happy because every lawmaker that spoke said that these candidates are qualified," Mark told his colleagues. The Senate president said this because, Sen. Wilson Ake (PDP-Rivers), and Sen. Magnus Abe (PDP-Rivers), opposed the nomination of the candidates from Rivers on the ground that their nomination allegedly did not follow due process. Ake was of the view that although he was not against the candidates directly, he was against the fact that their nomination did not follow due process. "I don't personally have anything against any of those people, but procedurally it is wrong," he said as he noted that there was a tradition in the Senate whereby, if two senators opposed the nomination of a candidate, such a candidate was not confirmed. Mark, however, said the rule Ake had referred to was made to prevent nominees from disregarding senators from their areas, and thereafter challenged the new board to ensure that they turned around the fortunes of the commission. "I hope that this new board having been approved very quickly by the Senate will also reciprocate by performing well," Mark added. He also challenged the Senate Committee on Niger Delta to rise up to its responsibility and supervise the commission efficiently. Earlier, Sen. Abdul Ningi (PDP-Bauchi), had noted that the speed with which the Senate confirmed the nominees, underscored the importance of the NDDC. According to him, the the issues raised by Ake and Abe were fundamental, but "we refuse to employ the politics of Nigeria in the matter". He stated that since it was established that the candidates were qualified, personal issues should be secondary and the nation should be put first. Several other senators, who spoke on the issue, supported the confirmation of the candidates based on merit since they were qualified.

2013 December, SweetcrudeReports

Community

Oil spill pollutes Ikarama community, Bayelsa coastline

he Ikarama community in Yenagoa Local Government Area of Bayelsa State and the Atlantic coastline near Brass were polluted in two recent separate spill incidents. The latest spill was from Brass crude export terminal operated by Agip, which discharged a yet-to-be ascertained volume of crude into the Atlantic Ocean on November 28. "Agip should not only send relief materials to impacted communities and satellite fishing settlements, but pay adequate compensation for general and specific damages," a nongovernmental organisation, Environmental Rights Action/Friends of The Earth Nigeria, ERA/FoEN, said in reaction to the spill. In the second incident, which occurred earlier, an oil spill from Rumuekpe crude delivery line discharged volumes of crude into the environment at Ikarama community. It was a fallout of activities of oil thieves which left a hacksaw cut on the 14 inch crude oil pipeline. The Public Relations Officer of Ikarama Community Development Committee, Mr Washington Odoyibo, told newsmen that the leakage had been clamped and that the spill had taken a negative toll on the farming and fishing vocations of Ikarama community. However, a Joint Investigation Visit Report released in Yenagoa stated that the cause of the spill

The latest spill was from Brass crude export terminal operated by Agip, which discharged a yet-to-be ascertained volume of crude into the Atlantic Ocean

A polluted farmland

was traced to sabotage by unknown persons. The report stated that the spill impacted an area of 6,400 square metres which stretched beyond Shell Petroleum's right of way into the adjoining land near the spill site.

It said that some 482 barrels of Shell's Bonny Medium crude stream was discharged into the environment while 15 per cent of the volume might have evaporated. It was learnt that

representatives of National Oil Spills Detection and Response Agency, N O S D R A , h o s t communities, Bayelsa Ministry of Environment, Department of Petroleum Resources, signed the

report. The report further stated that Shell has since commenced the recovery of spilled oil while clean up of the site would be completed in April 2014.

We are committed to respecting corporate citizenship â&#x20AC;&#x201D;ExxonMobil

xxonMobil, the parent company of Mobil Producing Nigeria Unlimited a n d E s s o Exploration, will continue to respect corporate citizenship in relation to Akwa I b o m S t a t e , according to a top official of the company. ExxonMobil's Executive Vice C h a i r m a n , Emmanuel Ibe

Kachikwu, stated this, saying his company was committed to giving back to host communities. "ExxonMobil would continue to respect corporate citizenship in relation to Akwa Ibom State," Kachikwu said when he led a team to visit Akwa Ibom State governor, Godswill Akpabio in Uyo. Praising the governor for his support and for creating a conducive business environment for the company, he also thanked the host communities for

their co-operation and understanding. Akpabio at the occasion announced the setting up by the government of a committee to discuss possible compensation to communities for oil spills. The government set up the committee, comprising management staff of ExxonMobil and leaders of the host communities in Eket Federal Constituency, as a result of demands by host communities that the oil firm paid compensation for oil spills and that it met

its pledge of investments to e n h a n c e development in the communities. "We have already set up a committee to meet and discuss between the host communities and ExxonMobil with a view to proffering solutions to the payment of the oil spill compensation," he said.

2013 December, SweetcrudeReports

Community

h e Environmental R i g h t s Action/Friends of The Earth Nigeria, ERA/FoEN, a nongovernmental organisation, NGO, has urged prompt clean-up of the Atlantic coastline in Bayelsa impacted by oil spill from Brass oil export terminal. An oil spill from Brass crude export terminal operated by Agip, discharged a yet-to-be ascertained volume of crude into the Atlantic Ocean on November 28. ERA/FoEN, an environmental rights group, made the call in its field report on the spill incident. According to the report signed by Mr Alagoa Morris, Head of Operations at ERA/FoEN’s office in Bayelsa, ongoing efforts to contain the spill are commendable. The NGO said that on receiving reports of the spill, it dispatched its field monitors to evaluate the situation. "ERA/FoEN mobilised to visit the Odioama community environment on Sunday, 1st Dec., 2013. It was in the normal tradition of investigating and monitoring the environment with a view to making independent observation and speaking directly with victims. “The Chairman of Odioama Kingdom Council of chiefs conducted field monitors of ERA/FoEN around some sites and fishing camps. Signs of crude oil were noted,” the report stated. ERA/FoEN further stated that preliminary investigations by its field monitors showed that the spill might have been caused by operational failure. It further noted that the possibility of sabotage from the fortified export terminal was remote. It demanded transparency and international best

Effect of oil spill

Oil Spill: Group demands clean-up of Bayelsa coastline practices, including the convening of a Joint Investigative Visit (JIV) by all relevant stakeholders to the impacted communities. "Agip should not only send relief materials to impacted communities and satellite fishing settlements, but pay adequate compensation for general and specific damages.

“The media and other human and environmental groups ,local and international, should show interest in this matter and act accordingly, in the interest of the victims and humanity” the report further said.

The Chairman of Odioama Kingdom Council of chiefs conducted field monitors of ERA/FoEN around some sites and fishing camps. Signs of crude oil were noted

Ijaw youths demand involvement in oil firms' operations

jaw youths under the aegis of Ijaw Youth Council, IYC, has demanded involvement in the operations of local oil companies purchasing oil fields in their areas or the exit of such oil firms from their localities. Asking the oil firms to ensure a stake for oil producing communities in their operations, IYC president, Mr Udengs Eradiri, noted that a local exploration and producing company, Seplat had bought over most of the oil fields belonging to Shell Petroleum Development Company, SPDC, in Ijwaland. He warned that the youths would not allow the

company to operate its fields in Ijawland, unless the local people were given a say as directors and percentage of ownership in the company. "We must be given a say in the ownership and operations of the oil fields in our areas. We must get a directorship in the oil company, ownership and profit sharing. I am sending this message to them that

we will not allow them to operate in our land unless our demands are met," Eradiri said. Mr Deji Haastrup, Chevron's General Manager, Policy, Government and Public Affairs, in a goodwill message, commended the leadership of the Keffes Foundation for the commissioning of 30 projects in Keffes communities.

The projects include rural electrification, town halls, concrete foot bridges, market stalls, principal's quarters for a community secondary school and provision of generating plants for deep riverside communities.

2013 December, SweetcrudeReports

‘NDDC needs N1tr to complete abandoned projects’

Abandoned road project

he Senate Committee on the Niger Delta says the Niger D e l t a Development Commission, NDDC, would requires over N1 trillion to complete abandoned projects across the Delta region. Senator Nurudeen Abatemi-Usman, vice chairman of the committee, revealed this at the screening of nominees for the NDDC board at the Senate, saying the members of the committee expressed shock when they learnt about the figure. According to him, his committee members were worried over the litany of abandoned projects across the Niger Delta region. President Goodluck Jonathan had forwarded to the Senate the name of Senator Bassey EwaHenshaw and Mr. Bassey Dan-Abia for screening and confirmation as chairman and managing director of the NDDC Board. Ewa-Henshaw was

nominated to represent Cross River State in the NDDC, Dan-Abia was named to represent Akwa Ibom State. Others whose names were also sent to the Senate for confirmation,included Itotenaan Henry Ogiri (Executive Director, Finance and Administration) Rivers); Tuoyo Omatsulu (Executive Director, Projects) Delta; Ball Turofade Oyarede (Bayelsa), Chief Ephraim Sobere Etete (Rivers); Etim Inyang Jnr (Akwa Ibom); Adah Paul Andeshi (Cross River) and Sir Tom Amioku (Delta). Others are Samuel Okezie N wo g u ( A b i a ) ; U che g b u Chidiebere Kyrian (Imo); Maj.-Gen. Suleiman Barau (Northcentral); Alhaji Abdulmaik Mahmud (Northeast); Benson Adegbenro (Ondo) and Mark Ward. The senator insisted that the Managing Director nominee, Mr. Bassey Dan-Abia, should tell the committee how the abandoned projects would be completed and how abandoned projects would become a thing

of the past in the commission. Dan-Abia, in his response said part of his immediate task, if confirmed would be to set up effective project monitoring committee. He noted that with effective project monitoring committee, the commission would identify and complete abandoned projects. He added that before the projects were awarded, they would have been valued and properly funded to avoid project abandonment. Dan-Abia also said the failure of some of those in leadership positions in the commission to appreciate their roles and functions breeds friction in the commission. He noted that the NDDC Act specified the functions of chairman, MD and other board members of the commission, lamenting however that “failure to appreciate what role each person should play causes friction in NDDC”.

E-mail: johniyene@yahoo.com

Developing our societies through qualitative democratic culture

remember how as a young teenager I was caught within the grips of what my friends and I now call the “Kodendiara effect.” It was Camara Laye, the author of “The African Child,” who introduced our young African minds to the delicious mystery of Kodendiara. Although in Ijawland newly born males are circumcised on the eighth day after their birth, we longed to have the more traumatic Guinean version which was performed between the ages of twelve and fourteen, in order for us to experience a real coming into manhood with an inevitable meeting with the legendary Kodendiara. Laye depicted an Africa of rolling hills, lush meadows and unspoilt glades, an Africa far less developed than the Europe of the 1950s but nevertheless a much beloved Africa. The Africa of Camara Laye was going through a process of changes that appear to have scarred her deeply. Having been weaned of the unwholesome practices (cannibalism, piracy, slavery and schism) that almost destroyed them, European societies had imbibed civilisation but still had needs for expanding their pretentious empires. Upon the invitation of Otto von Bismarck, German Chancellor and statesman, the ‘civilised world’ as it was then constituted (the United States opting out) met up in Berlin and partitioned Africa into spheres of influence for the signatory countries. With a few exceptions such as South Africa and apart from the violence required at the points of entry to quell dissent against occupation, violence by colonialists within the African continent was rare and subtle even when applied. Laye’s Conakry was an idyllic society where Africans and Europeans co-existed in a predictable and mutually acceptable pattern with the available infrastructure sparse but also curiously sufficient for the populace. But that was the turning point, the moment of great changes for Africa; the continent peopled by dark skin natives were about to be liberated by her own. In form the African people have been liberated but the substance of their existence show they have need for further liberation, this time, from their own kind. Apart from Ghana and South Africa, the societies of Africa are governed by political interest groups that mock and force the will of the people. It is very simple logic that leaders whose performances are not reviewed through the ballot do not pursue or advance the preferences of the ballot and the ballot can only attract obeisance where it is effective. The political activists of Laye’s generation took much for granted; they trusted in the inherent goodness of the African to his fellows. There were hardly any futuristic plans to develop the political structures of the societies created by the colonialists, with the result that new interest groups with intents not different from the conferees at Berlin in 1884, hijacked power for their selfish interests. The direct implication of the logic of a weak ballot is the failure of the society. The gullies on our roads, our inability to generate sufficient energy for our technological advancement, the insecurity on our streets, the slums and unplanned dwelling places, the unwholesome practices of regulatory agencies and the sharp reduction in life expectancy in our societies are all traceable to weak ballots. We can still do it right and justify Camara Laye’s generation’s trust in the intrinsic goodness of the African to his fellows so that even though we may not bring back those green hills, meadows and glades that was the Africa of yore, we can live in orderly, predictable and safe societies in which Kodendiara will only be invoked to chastise errant behaviour in the young.

2013 December, SweetcrudeReports