Febuary 2015 edition by Sweetcrude reports

Release of NNPC forensic audit report: What next?

China steps up LNG imports from Nigeria

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A Review Of The Nigerian Energy Industry February, 2015

VOL 02 N0. 23

U P DAT E S MONTHLY BASKET PRICE FEB-15 JAN-15 DEC-14 NOV-14 OCT-14 SEP-14 AUG-14 JUL-14 JUN-14 MAY-14 APR-14 MAR-14 FEB-14 Daily | Weekly | Monthly | Yearly

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50.81 U$

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OPEC hikes 2015 demand forecast

he Organisation of the Petroleum Exporting Countries, OPEC, has forecast that demand for its oil would be greater than expected in 2015 as the number of US oil rigs hit a three-year low. OPEC forecast demand for the cartel's oil will average 29.21 million barrels per day, bpd, in 2015, up 430,000 bpd from its previous forecast. In its latest monthly report released this month, the organisation also slashed its forecast for the rate of growth in non-OPEC supply, citing a slowdown in the US shale boom and lower capital investment by energy firms.

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OIL & GAS INDUSTRY:

Season of budget cuts; concern persists over projects Production hits low ebb NNPC slashes expenditure Oil services firms bemoan low business

Contents

2015 February, SweetcrudeReports

Editor’s note

t is the season of budget cuts as oil exploration and producing companies battle to keep afloat in the face of plunging global crude oil prices. Nigeria is not shielded from the effect of this development as majority of international oil companies, IOCs, that are slashing their capital expenditure budgets for the year maintain significant operations in the country. The question on the lips of many as we conducted investigations for our cover story for this edition, is the extent to which the budget cuts will affect the operations of the local arms of the IOCs in-country and the proposed projects which they are part of, together with the Nigerian National Petroleum Corporation. Good thing is that oil market traders appear convinced that oil prices are bound for a rebound soonest, which informs their relentless effort so far in stockpiling over 40 million barrels of crude at sea merely to take advantage of the expected development when it comes. For us, it is rather interesting that at a time the market is closing up

for Nigeria's crude oil, China has stepped up natural gas imports from the country. Asia's power house has snapped up six cargoes of Nigeria's LNG in less than six weeks of this year, up from two cargoes for the whole of January and February last year. This is clearly a pointer to the nation which way to go - seek the expanded gas production and export option. Did the recently-released forensic audit report on the alleged mismanagement of about $20 billion by the Nigerian National Petroleum Corporation, NNPC, indict the corporation? The report absolved the NNPC of culpability over the allegation of non-remittance of $20 billion, but it asked the corporation to refund the sum of $1.48 billion to the Federation Account. Our story on the 'Focus' section of this edition provides further details on this question. All these are more in this edition of your foremost energy Newspaper. It is a loaded package. Enjoy.

4 COVER 6 OIL 12 FOCUS 16 GAS 21 FEEDBACK 23 POWER 28 FINANCE 33 LABOUR 36 SOLID MINERAL 38 FREIGHT 39 MOTORING 41 TECHNOLOGY 44 COMMUNITY

Season of budget cuts; concern persists over projects

Oil traders go for the ‘kill’

Release of NNPC forensic audit report: What next? China steps up LNG imports from Nigeria

Big Spenders Report, resource curse and tears of many nations Govt boosts power distribution with 395 substations

Seplat acquires 22.5% working interest in OML 55 for $132.2m

Electricity meter glut: Manufacturers lay-off over 50% work force

Govt spends N1.5bn to reclaim abandoned mining sites Ships coming into Nigeria with foreign guards will be detained -NIMASA BMWs with the Connected Drive system are vulnerable to hacker attack Pipeline security and monitoring

Controversy trails Belema Oil’s plans to explore for, produce oil in Ogoniland

EDITOR-IN-CHIEF Hector IGBIKIOWUBO EDITOR Chuks ISIWU ASSISTANT EDITORS Yemie ADEOYE Ike AMOS Eluonye KOYEGWUAEHI

SNR. CORRESPONDENT Oscarline ONWUEMENYI Sam IKEOTUONYE

GM, Marketing Nkem IGBIKIOWUBO

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2015 February, SweetcrudeReports

Cover Story

2015 February, SweetcrudeReports

Oil facility

Season of budget cuts; concern persists over projects CHUKS ISIWU

t is the season of budget cuts in the global oil and gas industry as exploration and producing companies devise measures to negotiate the fiscal uncertainties presented by the plunge in crude oil prices. SweetcrudeReports investigations in the Nigerian oil and gas sector showed that management of the leading companies in the industry are bemoaning the fate of proposed projects, in the face of reduction in capital expenditure budgets as announced recently by their parent international oil companies. It is estimated that all together, around the world, 35 offshore and oil sand projects

would be affected by the latest development, and Nigeria is expected to have a fair share of this. According to our investigations also, workers in most of the companies operating in Nigeria are fearing for the security of their jobs as the current low oil prices and the resultant budget cuts have put additional pressure on the local industry, where a near absence of exploration and a significant drop in production activities had since last year forced many companies into laying off employees. Season of budget cuts The Royal Dutch Shell announced last week a reduction of potential capital investment by over $15 billion in the next three years due to

the declining crude oil prices. Besides, the company has recorded an eight per cent drop in yearly net profits and said it would accelerate spending cuts. “Shell is considering further reductions to capital spending should the evolving market outlook warrant that step," the company said in its recently released full year 2014 update. It stressed that it would continue to defer spending in many areas, without compromising on Health Safety Security and Environment, HSSE, exiting selective growth positions, and driving costs down in the supply chain. The French oil giant Total is shedding 10% from its 2015 capital budget of $26 billion. Its exploration budget will be hit with a 30% cut to less than $2 billion.

Nigeria Content Investment Forum

Where prospects meet opportunities

“We are all rediscovering that oil is a volatile commodity. We have to react, but not overreact. A major company like Total has always been successful when we manage to maintain our base strategy for these types of low prices. "The best way to face this volatility is to have the company strong enough to lower your cash break-even,” said Patrick Pouyanne, the company's chief executive officer, who succeeded the late chief executive officer, Christophe de Margerie, last year. Chevron Corporation's recently announced $35 billion capital and exploratory investment programme for 2015 is 13 per cent lower than total investments for 2014. ConocoPhillips, the largest US

exploration and production company, plans a much steeper 33 per cent cut in its capital spending this year to $11.5 billion, $2 billion less than it had suggested in its previous guidance issued only last month. As part of its own survival strategy, BP said it is cutting 300 staff and contractor jobs from its 3,500-strong North Sea business and freezing salaries across the company in an attempt to cut costs. It has also sold down its equity interests in two massive Gulf of Mexico oilfields. On its part, ExxonMobil Corporation is yet to unveil its 2015 capital expenditure plan, which it said would be released on March 4, but there are indications that this would witness a reduction from last year's budget. Already, the company has revealed it would slash its share buyback programme in the first quarter of this year by more than half to $1 billion. Implications for Nigeria Of the oil companies cited above, Shell, Total, Chevron and ExxonMobil maintain significant

CONTINUES ON PAGE 5

Houston, Texas, May 4, 2015 For far too long oil & gas enthusiasts from Sub Saharan Africa, especially Nigeria visit the USA in search of technical partners, products and services. Most of them go back empty handed. We seek to change all of that. Enquiries: tukur70@sweetcrudereports.com, yemie@sweetcrudereports.com Powered by

Cover

2015 February, SweetcrudeReports

Season of budget cuts; concern persists over projects agreed in the last quarter of 2014, there have been drastic changes in the parameters considered by the partners,” another NNPC source said. Job fears There is currently palpable fears of fresh job losses in the industry resulting from the current budget cuts. At one of the major IOCs, which began a massive lay off of staff in Nigeria last year, workers are bracing for further job cuts. The company sacked thousands of workers last year, including over a thousand sent home only in December. "As I am sitting here, if I tell you I am not in fear, then I am joking. We are living with the fear of losing our jobs all the time. In fact, there are threats and rumours every day. "The effect of the price slump is serious. Our tanks are full and there are no shipments because the low oil prices means nobody is buying the crude. Production is not going on any more. This I can confirm to you, and that's the situation," a worried worker with the leading oil exploration and producing company told SweetcrudeReports.

Oil platform CONTINUED FROM PAGE 4 operations in Nigeria and are currently pursuing key projects in the country. These projects include Bonga South-West and North-West by Shell, ExxonMobil’s Erha North Phase 2 and Phase 2 of the Satellite field development, Total’s Egina and Ukot oil fields and Oberan deepwater field by Eni (Agip). Also included are the multibillion Nsikko project and the Funiwa gas project belonging to Chevron, as well as the Brass and Olokola liquefied natural gas, LNG, projects, to mention a few. Some of these projects have been in the pipeline for more than five years, suffering delayed take off while others are still awaiting approval, due to what observers described as the Nigerian National Petroleum Corporation, NNPC's, apathy towards the very important projects. Industry analysts said the international oil companies' expenditure cut could now result in delay, suspension or outright abandonment of some of these projects. But, it is not clear which would be affected. Indeed, the Group Managing Director of the Nigerian National Petroleum Corporation, NNPC, Dr. Joseph Darwa, has confirmed that some

projects in Nigeria would be affected by the decline in oil prices and budget slash by the IOCs, without being specific. “A number of deepwater projects may suffer delays or cancellation, including one in Angola, three in Nigeria and one in Ghana; while in shallow waters, two projects in Angola, one in Nigeria and two in Ghana may suffer delays,” Darwa said. Also, according to the NNPC GMD, the oil price decline and budget cuts "will result in delays in the development of otherwise economic viable projects". "Many analyst are of the view that at this level, 80 percent of North America light tight oil wells will still be in the money at $80 per barrel, but that cash flow concerns might reduce spending in the medium time. "Meanwhile, some project may still be viable at $50 dollar per barrel, however delays in major projects will be a feature in many companies' plans and programmes especially for larger offshore and oil projects as companies try to balance cash flow projects," Darwa stated. While it is still not certain which projects could be affected in Nigeria, the South African company, SacOil, says it was planning the cancellation of an agreement to participate in an

Industry analysts said the international oil companies' expenditure cut could now result in delay, suspension or outright abandonment of some of these projects. But, it is not clear which would be affected appraisal asset in Nigeria.

N N P C a l s o c u t s expenditure budget Just as the IOCs are scaling down expenditure in view of the oil price situation, SweetcrudeReports gathered that the decline in oil prices has forced the Nigerian government, in a joint venture, JV, with the IOCs through the NNPC, to cut total expenditure in the form of cash call to the JVs. It slashed its capital budget for the JV operations to $8 billion, a 40 per cent drop in the year's proposed budget, according to Platts. Platts reported, quoting an NNPC source: “The NNPC has informed the joint venture partners that this year’s capital expenditures will be cut down by

40 per cent from the initial proposed budget of $13.5 billion. “The $13.5 billion has been the level that has been maintained in the past three years, but because of the drastic decline in oil prices, that level cannot be sustained this year”. NNPC did not comment officially. Under Nigeria’s joint venture arrangement with the IOCs, NNPC contributes about 60 per cent of the funding requirement while the foreign firms provide the 40 per cent balance. Initially, the Nigerian government had proposed N1.22 trillion ($7.5 billion) to fund its share of the oil joint venture operations this year, with the foreign oil firms expected to provide the balance of $6 billion. “But since this budget was

Heat for oil services firms Engr. Uche Ejiogu, the Field Manager at Port Harcourt-based Segofs Energy Services Limited an oil services company, alluded to the fact that oil production was virtually not on-going in the country as he maintained that the situation has hit oil servicing companies. He said most oil exploration and producing companies were inactive at the moment, adding that this situation "has inadvertently rendered oil servicing companies jobless", with most of the services companies now dependent on marginal oil field operators for survival. The field manager, whose company specialises in directional drilling, bore hole surveying and drilling tools rentals, added: “We (oil servicing companies) are really affected, because the drop in oil price means that there is no need drilling ahead and or carrying out drilling operations. It is really affecting us because we are not operating on our own; we operate only when the exploration and producing companies bid us. but right now in this period when you are not making profits, there is no need drilling more. "And I don’t know how long this is going to continue, because most of the oil services companies are really financially strapped right now and for that, they are retrenching workers”.

Oil

2015 February, SweetcrudeReports

Oil traders go for the 'kill' …Stockpile 40m barrels in anticipation of price recovery

Oil tanker SAM IKEOTUONYE

il traders are expecting a turn-around soon in the d e c l i n i n g fortune of crude in the international market. Global oil prices have been in steep decline since June 2014, occasioned by slow demand growth and a number of other factors, among them the slowdown in economies globally, from China to the European Union; an overproduction of oil, with the United States producing more energy from shale oil deposits; and the Organisation of the Petroleum Exporting Countries, OPEC, holding its output steady, even as prices dropped. Indeed, the last quarter of 2014 and the early part of this year saw prices drop below $50

a b a r r e l . But, a Reuters report following this major slump predicted that prices would rebound this year and in 2016 as the market stabilises in the wake of the near-40 per cent collapse. The Reuters survey of 31 analysts and economists, showed, for instance, that North Sea Brent crude would average $82.50 a barrel this year. In obvious anticipation of this price recovery, which has also been predicted by many other analysts, oil traders are building up stocks to take huge advantage of the expected d e v e l o p m e n t . As at January 21, according to shipping and oil market sources, oil traders have booked up to 20 tankers to store an estimated 40 million barrels of crude at sea, rising from 25 million barrels the previous, as they soaked up a stocks glut in

anticipation of future profits. The more than 50 percent fall in spot prices since June enables traders to make money by storing the crude for delivery months down the line, when prices are expected to recover. The volume of oil earmarked for floating storage had risen in recent days, sources said. Some of the tankers could nonetheless still be used for c o n v e n t i o n a l o i l transportation. “Floating storage remains a major focus in the tanker market as charterers have been fairly active in securing VLCCs (very large crude carriers) on time charters, with options to use the vessels as floating storage,” said Omar Nokta of Clarkson Capital Markets. As far back as early January, trading firms, including Trafigura, Vitol, Gunvor, Koch and energy company Shell have started booking oil tankers for

floating storage for up to 12 months, according to industry sources and freight bookings seen by Reuters. This trading strategy was last used in 2009 when prices slumped and led to more than 100 million barrels of oil being parked on tankers at sea before stocks were sold off. Industry sources say rates to hire vessels for longer periods

year charters have been done around the $38,000/day to $40,000/day level though our Clarksons team now assesses one-year charters at a rather hefty $52,500/day. This adds roughly $0.20 per barrel to the monthly break-even requirement, which could impact interest for more floating storage,” Nokta said. Taking into account vessel hire and other expenses including bunker fuel and insurance, overall monthly floating storage costs are estimated anywhere in the region of $1.5 million to $1.8 million per tanker. Oil traders still stand to make a profit, however, as spot prices for crude are trading below future contracts, in a market structure known as contango. The December 2015 Brent contract was trading around $57.40 on Wednesday, $8 a

In obvious anticipation of this price recovery, which has also been predicted by many other analysts, oil traders are building up stocks to take huge advantage of the expected development — known as time charters — have risen by a few thousand dollars a day in the past week to over $40,000 a day, and are quoted at more than double the level at the same time last year. “On average the latest one-

barrel above the spot price. “Floating storage is the cherry on the cake for the tanker market right now, which was already strengthening before this trend started,” said Georgi Slavov, a resource analyst at Marex Spectron in London.

2015 February, SweetcrudeReports

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Nigeria to face economic crisis if oil price fails to rebound - Soludo …Says N30tr lost from poor oil & gas management, theft OSCARLINE ONWUEMENYI

former governor of the Central Bank of Nigeria, CBN, Prof. Chukwuma Soludo, has predicted an unprecedented economic crisis for Nigeria should oil prices not recover soon from its low levels in the global market. Soludo, in a lengthy response to Finance Minister, Dr. Ngozi Okonjo-Iweala’s rebuttal of his earlier criticism of the management of the Nigerian economy under the administration of President Goodluck Jonathan, said the nation was in for a very turbulent time this year because the economy had been grossly mismanaged. The government had prior to the lengthy response, described the five-year tenure of Soludo as the governor of the CBN between 2004 and 2009

as a disaster to the banking sector. Soludo, who also alleged that over N30 trillion had been stolen under the watch of the Minister of Finance, said if the prices of crude oil in the international market failed to rebound, Nigeria would face an unprecedented level of economic crisis with horrible attendant hardships for the citizenry. “Our public finance is haemorrhaging to the point that estimated over N30 trillion is missing, or stolen, or unaccounted for, or simply mismanaged,” the former CBN governor stressed. In the piece entitled, ‘Ngozi Okonjo-Iweala and the missing trillions’, Soludo said the sharp decline in the nairadollar exchange rate from 158 a few months ago to 215 currently showed that trouble was already at the doorstep. He added that “unless oil

price recovers, this is just the beginning,” adding, “For the sake of Nigeria, I won’t keep quiet anymore!” The former CBN boss said his earlier article was written out of concern that the 2015 election campaigns were being conducted in a manner that did not show that the economy was in a crisis. “Part of my frustration is that five years after, everything I warned about has come to happen and we are conducting our campaigns as if we are not in a crisis. As a concerned Nigerian, I have a duty to speak out again,” he said. Giving the details of the N30 trillion allegedly stolen under Okonjo-Iweala’s watch, Soludo said, “Under you as the Minister of Finance and coordinator of the economy, the basket of our national treasury is leaking profusely from all sides. Just a few illustrations! First, you admit that ‘oil theft’

you tell Nigerians how much the amnesty programme costs, and also the annual cost for ‘protecting’ the pipelines and security of oil wells? And the ‘thieves’ are spirits? “Second, my earlier article stated that the minimum forex reserves should have been at least $90 billion by now and you did not challenge it. Rather, it is about $30 billion, meaning that gross mismanagement has denied the country some $60 billion or another N12.6 trillion. Now, add the ‘missing’ $20 billion from the NNPC. You promised a forensic audit report ‘soon’, and more than a year later, the report itself is still ‘missing’. This is over N4 trillion, and we don’t know how much more has ‘missed’ since (former CBN governor, Sanusi Lamido) Sanusi cried out. “How many trillions of naira were paid for oil subsidy (unappropriated?). How many trillions (in actual fact) have been ‘lost’ through customs duty waivers over the last four years? As coordinator of the economy, can you tell Nigerians why the price of Automotive Gas Oil, popularly called diesel, has still not come down despite the crash in global crude oil prices, and how much is being appropriated by friends in the process? “Be honest: Do you really know (as coordinator and minister of finance) how many trillions of naira self-financing government agencies earn and spend? I have a long list but let me wait for now. I do not want to talk about other ‘black pots’ that impinge on national security.” Soludo added, “My estimate, Madam, is that probably more than N30 trillion has either

“Our public finance is haemorrhaging to the point that estimated over N30 trillion is missing, or stolen, or unaccounted for, or simply mismanaged,” the former CBN governor stressed has reduced oil output from the average 2.3 - 2.4 million barrels per day to 1.95 mpd (meaning that at least 350,000 to 450,000 barrels per day are being ‘stolen’). On the average of 400,000 per day and the oil prices over the past four years, it comes to about $60 billion ‘stolen’ in just four years. “In today’s exchange rate, that is about N12.6 trillion. This is at a time of cessation of crisis in the Niger Delta and the amnesty programme. Can

been stolen, or lost, or unaccounted for, or simply mismanaged under your watchful eyes in the past four years. Since you claimed to be in charge, Nigerians are right to ask you to account. Think about what this amount could mean for the 112 million poor Nigerians, or for our schools, hospitals, roads, etc. “Soon, you will start asking the citizens to pay this or that tax, while some faceless ‘thieves’ are pocketing over $40 million per day from oil alone.”

Oil MKPOIKANA UDOMA

he newlyappointed Chairman of S h e l l Companies in Nigeria and Managing Director of the Shell Petroleum Development Company of Nigeria, Mr. Osagie Okunbor, has decried the continuous fall in global oil prices, describing it as "a challenge confronting the company". Okunbor disclosed this to newsmen at the welcome party and send-forth for himself and the outgoing managing director, Mr. Mutiu Sunmonu in Port Harcourt, saying his company would take necessary measures to avoid panic over the development. “We will do what we need to do, just to make sure we contain cost, but at the end of the day we will have to take a long-term measure, because when we invest it is in terms of 15 to 20 years. So, it is not something we take lightly. "It is certain that we will not allow the global fall in oil price to get to us in such a way that we will start panicking. All the necessary precautions

2015 February, SweetcrudeReports

Okunbor, Shell Nigeria's Chairman designate, decries oil price drop …To follow Sunmonu's footsteps in tackling oil theft

will be taken, all the necessary measure will also be taken, we will adjust our business, as well as adjust our strategy,” he said. The managing director designate promised to continue with the steps so far taken by the outgoing managing director in tackling oil theft in the Niger Delta. He said: “The business of oil theft disturbs me deeply, not just as the MD of Shell, but also as a Nigerian, because the problem with oil theft is not just the devastating effect it has on the environment, but also what it means for us economically, because anytime you put holes in these pipes, apart from destroying the environment, what it means is that we have to shut down production to prevent escalating problems. "So, on both grounds we lose, not just as Shell but more so as government and as a people”. In his farewell address, Sunmonu, the outgoing managing director, expressed gratitude to the management and staff of Shell for believing in him as he tasked his successor to educate leaders in the oil producing communities about the dangers of oil theft.

Okunbor

Time lag in approval cycles inflates contract costs - Proust, Total CEO

anaging Director and Chief Executive Officer, Upstream Companies of Total in Nigeria, Mrs. Elisabeth Proust, has explained how time lag in approval cycles for contracts in the Nigerian oil and gas sector add in inflating the cost of contracts. Proust, who spoke at the recent Offshore West Africa Conference in Lagos, said contractors often integrated the cost of uncertainties and the time lag of contract approval cycles in their bid o f f e r s . According to her, “If those approval cycles could be

reduced, it would have a positive impact in reducing project costs. Other high expenditure uncertainties relate to the security cost of protecting people and installations as well as the time value of possible disruptions of the work”. On oil exploration, she said there was currently a stiff competition between countries in Africa, citing West African oil producers and Kenya, Tanzania and Mozambique as areas where the competition is very stiff. “Exploration will preferably continue in countries offering attractive terms, incentives and facilitating the circulation of means and goods,” the Total Nigeria

CEO stated as she also maintained that costefficiency was important in sustaining businesses in the oil and gas sector. Citing his company's experience in Angola, she said: “We have sanctioned the development of Kaombo in Angola after saving $4 billion in capital expenditure.” On the current low price of oil in the international market, Proust maintained that as oil price continued to drop‎, there was urgent need for the enactment of petroleum laws that encourages investment and grow production as well as a vehicle that works during both good and not-so-good t i m e s .

Exploration will preferably continue in countries offering attractive terms, incentives and facilitating the circulation of means and goods

In this “not- so -good time”, the Total boss stated, decision to invest in large projects after discoveries and appraisal would be more scrutinised by shareholders. Such decision, she added, would also depend on investors' confidence in the stability of the contractual and fiscal terms and the perception that the country would respect the terms all along the duration of the contract. According to Proust, the industry together with the stakeholders, including the government, regulator, contractors, E&P companies etc, needed to do more to keep building the future of the industry in Africa.

Oil

2015 February, SweetcrudeReports

Oil depot

Oil marketers say profit margin on petrol not sufficient KUNLE KALEJAYE

i g r i a ' s petroleum p r o d u c t s marketers, under the umbrella of the Major Oil Marketers Association of Nigeria, MOMAN, and the Depot and Petroleum Products Marketers Association, DAPPMA, say the current profit margin on petrol accruable to marketers and dealers was not sufficient enough. The associations, which claimed the Federal Government was still owing them subsidy arrears of N250 billion on petrol for , said foreign exchange differentials and accumulated interests from banks added up to N95 billion while N155 billion was the real subsidy arrears owed marketers. Making the revelations to journalists in Lagos, Executive Secretary, MOMAN, Mr. Femi Olawore, who spoke on behalf of both associations, said the news of the recent N87 reviewed

pump-price of petrol was surprising to operators, as no details were given by the Federal Government before and after the reversal took effect. He said current oil dealers and marketers’ margin of N4.60 per litre was not adequate, and that they remain committed to seeking an upwards review of the m a r g i n . Olawore said for the past two years marketers had been requesting a review of the margin from government, which was last reviewed in July 2007. Asked what was the position of government as regards the margin review, Olawore said, “The Minister of Petroleum Resources has directed that a committee be set up to look into current margins.” He added, “It is the right of the Minister of Petroleum Resources to announce a decrease or increase in pump price of petrol, according to the Petroleum Act. We don’t object to the N87 price, though it came to us as a surprise. So we had to meet

It is the right of the Minister of Petroleum Resources to announce a decrease or increase in pump price of petrol, according to the Petroleum Act. We don’t object to the N87 price, though it came to us as a surprise

with the government. We had a meeting with the Department of Petroleum Resources and Petroleum Products Pricing Regulatory Agency. “We do not object to the N87 and we will comply. Good a thing that the N10 decrease is on the ex-depot price. If it was from our own margin, we won’t be able to comply.”

DPR to raise licence fees for oil marketers

onal Controller of Operations at the Department of Petroleum Resources, DPR, says the agency was planning an upward review of licence fees for oil marketers and operators in the oil and gas sector. Mohammed Usman revealed this during an interactive session with independent and major oil marketers at its oil Marketers Annual General Meeting in Abuja, noting that the licence fees for filling station owners at N30,000 for two years, was the lowest in all business enterprises operating in Nigeria. “If those that are selling potatoes heard that we are charging the filling stations N30,000 as licence fees for two years, I am sure they will want to lynch us,” he said, adding that it was because of this reason that the agency was considering an upward review of the

licence fees. Usman disclosed that with the review, the tenure of the licence would be increased from two to five years. Vice President, Independent Marketers Association of Nigeria, Alhaji Abubakar Shettima, had in his remarks, urged the DPR to review the span of the licence from two to five years. Hettima also called on the agency to ensure that the tank farm owners did not sell refined products above official prices. “In most of the places where we buy this product at the tank farm they sell above stipulated rate and when we bring this to our various stations we encounter difficulties in s e l l i n g , " h e s a i d .

Oil

2015 February, SweetcrudeReports

JTF vows to crush oil thieves in Niger Delta

JTF officers at work MKPOIKANA UDOMA

he Commander of the Joint Task Force, JTF, operating in the Niger Delta, Maj. Gen. Emmanuel Jebe Atewe, has warned kidnappers, sea robbers, oil thieves and criminals that engage in criminalities in the region and its environs to look for a legitimate job or risk being crushed. Maj. Gen. Atewe gave the warning when the new Air Officer Commanding, AOC, Mobility Command of the Nigerian Air Force, Air-Vice Marshal Frank Nyoyoko, paid him a courtesy call at the headquarters of the JTF at Opolo Road, in Yenagoa, the Bayelsa State capital. The JTF Commander, who called on all stakeholders in the region to join hands to fight against criminalities, wondered why people, especially the youths who are supposed to engage in legitimate activities to assist themselves and their families,

would rather choose to engage in illegalities and activities that jeopardise government’s effort in building a crime-free nation. On his zero-tolerance campaign against oil theft and illegal oil bunkering in the Niger Delta, the Commander reiterated his commitment towards total eradication of oil-related crimes. He told the visiting AOC that “the JTF has so far intercepted and arrested several illegal oil bunkering vessels and suspects and handed them over to prosecuting agencies for prosecution”, while commending the Nigerian Air Force for effective manning of aerial operations of the JTF. Meanwhile, the JTF also said it has recorded tremendous success in its operations in the region. It stated that Sector 5 Special Squad of its anti-illegal oil bunkering team, deployed at the Nigerian Agip Oil Company, NAOC, flow stations in Akri community in Imo State, discovered oil theft syndicates specialising in

pipeline vandalism in the area. Suspected members of the syndicates, Longinus Adizua and Ijeoma Chidi, both native of Oguta Local Government Area of the state, were arrested while vandalising oil pipeline belonging to the oil company. The JTF, in a statement by its Coordinator, Joint Media Campaign Centre, Lt. Col. Ado Disa, said: “Items discovered with the bunkerers include handsaw and blades, four mobile phones, 4-inch hose and cash sum of N14,900”. The suspects and items recovered

were handed over to the 34 Artillery Brigade Provost Group for further investigations. The statement also said Sector 1 of the anti-oil theft team, operating along SapeleWarri check point in Delta State, also arrested one Colllins Duru and Chidi Eme for illegal oil bunkering. It said the arrest was in the aftermath of the discovery of three vehicles loaded with suspected illegally refined Automated Gas Oil or diesel, parked in the premises of JesMota Company in Sapele.

On his zero-tolerance campaign against oil theft and illegal oil bunkering in the Niger Delta, the Commander reiterated his commitment towards total eradication of oil-related crimes

“The vehicles and the products were evacuated to a safe place and destroyed in line with the JTF mandate in the region while the arrested suspects were handed over to the joint task force for further action,” the statement added. Lt. Col. Disa, in the statement, also said that troops of 3 Battalion of the sector at Egwu 1 and Isaba area in Warri South and Burutu Local Government Areas of Delta State also discovered some illegal oil bunkering sites where oil thieves operated with Cotonou (wooden) boats filled with stolen crude oil and other items such as 38 cooking oven, two pumping machines and 18 metal drums filled with illegal distilled diesel. Other items discovered at the site included three dugout pits, forty surface tanks and other illegal oil bunkering e q u i p m e n t s . The site was destroyed together with the items. No suspect was arrested during the operation as the suspects jumped into the water and escaped on sighting the troops.

Oil

2015 February, SweetcrudeReports

Kerosene queue at NNPC fuel station

We're committed to eliminating kerosene 'black market' – NNPC OSCARLINE ONWUEMENYI

he Nigerian N a t i o n a l Petroleum Corporation, NNPC, has vowed to eliminate kerosene 'black market' in the country to ensure the product is easily accessible to Nigerians. The NNPC Group Managing Director, Dr Joseph T. Dawha, declared the commitment of the corporation to eliminating the arbitrage system in the distribution and sale of kerosene that has created the 'black market' in the country, saying this was the objective of its recently introduced Kero-Correct scheme. “We are committed to ensuring the elimination of the kerosene ‘black market’ so that Nigerians can buy kerosene at the correct price of N50 per litre. We know this will be challenging, but with the unwavering support and assurance of Government through the able leadership of the Minister of Petroleum Resources, we are confident that the objectives of this laudable scheme will be achieved”. He said the NNPC Management was aware of the daunting challenge posed by the arbitrage system in kerosene distribution and has taken the step to engage some stakeholders and non-

governmental organizations to help in grassroots sensitization and monitoring to ensure transparency and sustainability in the distribution and sales of the product across the country. The NNPC boss explained that kerosene has become indispensable to "virtually every Nigerian family," adding that despite the importance of the commodity, accessing it at the correct price has been a challenge to many people. “I am delighted that the Coalition of Grassroots NGOs (CGN), the umbrella NGO that will facilitate and ensure compliance and transparency in the distribution and sales of the product is here with us today. I am confident that their commitment to making a difference in the welfare of our fellow Nigerians will accelerate the pace of success and ease the hardship experienced by Nigerians in procuring kerosene," he enthused. He said the NNPC Mega and Affiliate Stations across the country will ensure that “our mothers and sisters who daily struggle for this product have easy access to kerosene going forward." While thanking President Goodluck Jonathan and the Minister of Petroleum Resources, Mrs. Diezani

Aliso-Madueke, for graciously approving the Kero-Correct initiative, he assured of the NNPC’s commitment to making it a resounding success so as to reduce the hardship on the average Nigerian and also to help alleviate poverty in the country. Speaking earlier in her welcome address, the Group Executive Director,

Commercial and Investment, Hajia Mata Abdurrahman, said the Kero-Correct scheme was aimed at touching “lives in many positive ways” in keeping with the NNPC slogan. The high-point of the flag-off ceremony was the sale of kerosene to some members of the public by the GMD and other members of NNPC top M a n a g e m e n t .

NCDMB allays operators’ fears over falling oil prices

ith no end in sight yet to the rapidly falling oil prices, the Nigerian Content Development and Monitoring Board, NCDMB, has urged both International Oil Companies, IOCs, and indigenous players in Nigeria not to panic, but to be more innovative in their effort to get past the troubling time. Executive Secretary of the NCDMB, Engr. Ernest Nwapa, who made this known at the 19th edition of the Offshore West Africa Conference in Lagos, hinted that some Nigerian oil companies were already requesting for the reduction of local content scope because of the huge financial implications ‎during this time of oil

p r i c e f a l l , He explained that it would be inappropriate to reduce the local content scope during this period, urging operators not to panic but to be more innovative and allow the Local Content Act to thrive. “A family of six where they are used to eating large amount of food with a new baby ‎but there was sudden increase in the rent. The head of family told his household that for them to continue living in the house and paying the rent, they have to cut cost. The first cost they want to cut is the feeding bottle of the baby by taking it away from him. So what’s going to happen to that baby? So keep the local content alive,” he said.

Focus

2015 February, SweetcrudeReports

Release of NNPC forensic audit report: What next? OSCARLINE ONWUEMENYI

ollowing the release earlier this month of the muchawaited forensic audit report on the alleged mismanagement of about $20 billion by the Nigerian National Petroleum Corporation, NNPC, many Nigerians are left wondering if this is the end of all the rife speculations, allegations and counter-allegations that have been hurled from end to end; and if so, what's next? Is anybody or group of people going to face prosecution for certain accounting infractions? President Goodluck Jonathan had, while receiving the report from the accounting firm recently requested the AuditorGeneral of the Federation to study the report and make the key highlights public within a week. The audit followed allegation in 2013 by the immediate-past Central Bank of Nigeria, CBN, Governor, Lamido Sanusi, now the Emir of Kano, that about $20 billion oil money was missing from the NNPC, following the diversion of about $49 billion by the national corporation. The amount was later scaled down to $20 billion, just as he called for investigations after writing to President Jonathan. But the government insisted at the time that no money was missing and promised a forensic probe. The presentation of the report is coming almost 10 months after Finance Minister and coordinating Minister of the Economy, Dr. Ngozi OkonjoIweala, in April 2014, announced the appointment of PricewaterhouseCoopers, PwC, to conduct an investigation that

was to last about 16 weeks. President Jonathan had sought to downplay the enormity of the allegations, describing media reports on the issue as " r i d i c u l o u s " . â&#x20AC;&#x153;There has been so much of controversy over this NNPC and leakages or no leakages. I remember the Senate has also looked into it; it is also good that you professionals have also l o o k e d i n t o i t . â&#x20AC;&#x153;What appears in the papers and the speculation is also very high, the figures that I cannot even imagine the country will make are being bandied in the newspapers. So, I am quite

Mrs. Diezani Alison-Madueke, Minister of Petroleum Resources

The audit report said the amount also went into third party financing arrangements and equity crude processing, besides costs directly and indirectly linked to domestic crude

pleased that you have undertaken the forensic audit," the President stated. The audit report as unveiled in Abuja by the AccountantGeneral of the Federation, Mr. Samuel Ukura, had indicted the corporation and its upstream subsidiary, Nigerian Petroleum Development Company, NPDC, over unreconciled transactions, and ordered the refund of about $1.48 billion to the Federation Account. The report further revealed

that $20 billion was spent on petroleum products subsidy between January 2012 and July 2013. The audit report said the amount also went into third party financing arrangements and equity crude processing, besides costs directly and indirectly linked to domestic crude. Others include signature bonuses, petroleum profit tax and royalties which are yet to be paid by the NPDC. The auditors

faulted the NNPC's operational modalities which it noted is unsustainable, hence the need to urgently review and restructure the oil behemoth. The report also showed that only $100 million from the NNPC's portion of eight oil leases worth $1.85 billion had been paid to the NPDC, faulting the transfer value which it said ought to be higher. According to the report, gross revenue from crude lifting during the period stood at $69.34 billion, more than the $67 billion by the Senate's reconciliation committee earlier s e t u p . Of this also, $50.81 billion was remitted to the Federation Account from crude oil lifting, instead of $47 billion reported by the committee. A further breakdown showed that of the $69.34 billion, $28.22 billion was the value of domestic crude oil allocated to NNPC, adding that total amount spent on subsidy for petrol amounted to $5.32 billion. It also noted that the sum of $3.38 billion which was not appropriated in the national

budget was spent on Kerosene subsidy. It said although the Petroleum Products Pricing Regulatory Agency and the NNPC relied on a presidential directive of June 15, 2009 to stop subsidy on kerosene, the directive was not gazetted, following which there was no legal instrument canceling the subsidy on kerosene. Specifically, the PWC audit report said: "Total other third party financing arrangement and equity crude oil processing costs amounted to $1.19 billion. Total costs directly attributable to domestic crude oil amounted to $ 1 . 4 6 b i l l i o n . "Other costs incurred by the corporation not directly attributable to domestic crude is $2.81 billion. Revenue attributable to NPDC as submitted by the former Managing Director to the Senate hearing is $5.11 billion. "PWC stated that this amount needs to be incorporated into the financial statements of NPDC from where dividend should be declared to the federation accounts.

CONTINUES ON PAGE 13

2015 February, SweetcrudeReports

Focus

NNPC Towers, Abuja

What next after release of NNPC forensic audit report? CONTINUED FROM PAGE 12 "Signature bonus, Petroleum Profit Tax and Royalty yet to be paid by NPDC is $2.22 billion. Total cash remitted into the Federation Account in relation to crude oil liftings was $50.81 billion and not $47 billion as earlier stated by the Senate Reconciliation Committee for the period January 2012 to July 2013. "Based on the information available to PwC, and from the above analysis, the firm submitted that NNPC and NPDC should refund to the Federation Account a minimum of $1.48 billion." The report, which release many link to the ongoing brick-a-bat between another former CBN Governor, Prof. Chukwuma Soludo and members of the National Economic Management Team led by Dr. Okonjo-Iweala, noted that the NNPC is unable to sustain remittances to the Federation Account and meet operational costs from crude oil revenue, hence the resort to third party liabilities to bridge the funding gap. Ukura said the report was based on three key areas - NNPC costs, ownership of NPDC revenues and kerosene subsidy noting that 46 per cent of proceeds of domestic oil revenues

for the review period was spent on operations and subsidies. "The corporation is unable to sustain monthly remittances to the Federation Accounts Allocation Committee, and also meet its operational costs entirely from proceed of domestic crude oil revenues, and have had to incur third party liabilities to bridge the funding gap," it added. The report said although the NNPC presented a transaction document representing additional costs of $2.81 billion related to the review period, stressing the need to clarify whether such deduction should be made by the corporation as a first line charge before remitting the net proceeds of domestic crude to the federation account. Consequently, PwC recommended that on the ownership of NPDC revenues, NPDC should remit dividend to NNPC and ultimately to the federation account, based on NPDC's dividend policy and declaration of dividend for the review period. Meanwhile, reacting to the release of the report, a statement by the NNPC signed by the Group General Manager, Group Public Affairs Division, Mr. Ohi Alegbe said the audit report vindicated its stand that $20 billion was not missing or

The report said although the NNPC presented a transaction document representing additional costs of $2.81 billion related to the review period, stressing the need to clarify whether such deduction should be made by the corporation as a first line charge before remitting the net proceeds of domestic crude to the federation account unremitted. It said the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke has directed that $1.48 billion should be remitted to the Federation Account, insisting that the amount is "not part of the alleged unremitted revenues from crude lifting." According to the NNPC, the amount was never in dispute as it is made up of statutory payments such as signature bonus, taxes and royalties which are statutory

payments that come with assets a c q u i s i t i o n . It said the delay in payment was due to the reconciliation processes between the Department of Petroleum Resources (DPR) and the NNPC. The corporation stated that the forensic audit report and the Senate Committee on Finance report on the unremitted revenue all alluded to the fact that NPDC reported crude oil revenues of $5.11 billion. Expatiating further on the

kerosene subsidy issue, the corporation said the audit report also clarified that subsidy on "DPK is still in force as the presidential directive of 19th October, 2009, was not gazetted in line with provisions of Section 6 Subsection 1 of the Petroleum Act of 1969. "The Forensic Audit Report also acknowledged that Section 7 Subsection 4 of NNPC Act empowers the corporation to defray its costs and expenses including the costs of its subsidiaries from crude oil revenues, though it also recommended that the laws be reviewed to make the Corporation meet its costs and expenses entirely from the value it creates." In a recent piece entitled, "Ngozi Okonjo-Iweala and the Missing Trillions (1)," which was written in reaction to an earlier piece by the Finance Minister describing him (Soludo) as Nigeria's worst CBN governor, Soludo regretted that Nigeria continues to bleed uncontrollably under Okonjo-Iweala's watch as coordinating Minister of its Economy. Soludo noted that "our public finance is haemorrhaging to the point that estimated over N30 trillion is missing or stolen or unaccounted for, or simply mismanaged- under your watch!” He said: "My estimate, Madam, is that probably more than N30 trillion has either been stolen or lost or unaccounted for or simply mismanaged under your watchful eyes in the past four years. Since you claim to be in charge, Nigerians are right to ask you to account. Think about what this amount could mean for the 112 million poor Nigerians or for our schools, hospitals, roads, etc. Soon, you will start asking the citizens to pay this or that tax, while some faceless "thieves" were pocketing over $40 million per day from oil alone.” President Jonathan has admitted that the nation’s petroleum sector needs to be reformed. He expressed the hope that most of the lapses being noticed in the sector would be corrected by the time the Petroleum Industry Bill was passed into law. While promising to handle the recommendations of the report decisively, Jonathan expressed the belief that the forensic report would help the nation move forward. The President said, “Nigerians don’t need to be scared, this is something that Nigerians are interested in. They (the audit firm) wanted to submit an interim report, but I said no, they must conclude this matter, because it is a forensic audit and there is no room for interim report so they must go back and conclude it and luckily they have concluded it. “I hope we will not call them back, but where need be, we will call them back if there are issues that are not so clear, but we are happy with what we have done so far.

2015 Februayy, SweetcrudeReports

Focus

NCDMB, positioning Nigeria as Africa’s Oil and Gas industry hub

Offshore rig

YEMIE ADEOYE

our years after the enactment of the Nigerian Oil and Gas Industry Act, the Nigerian Content Development and Monitoring Board, NCDMB has driven indigenous growth by 18 percent even has it has also saved the country well over 12.7 billion dollars annually in capital flight. As the Federal Government agency saddled with the responsibility of implementing the Nigerian Oil and Gas Industry Content Development Act or NOGICD Act, the NCDMB has developed concepts that has driven indigenous participation in the oil and gas industry from 5 to 18 percent in a period of four years, an effort which has positioned Nigeria as Africa's emerging oil and gas industry hub. Currently, East Africa is intensely working to become a central oil and gas hub for Africa by 2020 through the efforts of Kenya, Mozambique and Tanzania. This may well remain a

dream due to the efforts of the NCDMB. Since inception, the NOGICD Act has enhanced job creation and development of indigenous human and technical expertise. This has further stimulated other sectors of the economy and will ultimately, continue to positively impact Nigeria's Gross Domestic Product. Speaking at the Practical Nigerian Conference Content seminar in Yenagoa, Bayelsa State capital, Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, took time out to outline the successes of the NOGIC Act as being driven and implemented by the NCDMB even as she also noted that local companies were still facing some challenges, including technical knowhow, finance etc. “The good news however, is that government – through the NCDMB – is putting processes and initiatives in place to combat these challenges. Some of these initiatives include partial guarantee of loans through NCDF (Nigerian Content Development Fund) and various capacity

Mrs. Diezani Alison-Madueke took time out to outline the successes of the NOGIC Act as being driven and implemented by the NCDMB even as she also noted that local companies were still facing some challenges, including technical knowhow, finance etc development initiatives,” the minister said. Mrs. Alison-Madueke further stated that these initiatives were driven by the desire of government to maximise the utilisation of Nigerian goods and services across the oil & gas industry value chain within the shortest time possible. She said: “In the area of indigenous ownership of assets, Nigerian ownership of strategic assets like marine vessels and oil rig assets are cardinal to local content development. Measures have been put in place to encourage local investments on such critical assets. There

is also a certification regime in place to audit equipment ownership claims and ensure that no foreign equipment or asset is put to work until existing Nigerian capacities have been exhausted”. The minister, who was represented at the event by the Permanent Secretary, Ministry of Petroleum Resources Dr. Jamila Shu’ara, told the gathering of top industry players that since the implementation of the marine vessel utilisation strategy in 2013, there has been a marked growth in the number of Nigerian-owned vessels that are doing business in the oil and gas

industry. She explained that out of 1,000 marine vessels that were captured by the NCDMB in 2013, 49.5 percent were in category A, meaning they were either built in Nigeria or owned by Nigerians. Also, out of 1,232 vessels captured as at third quarter of 2014, 89.2 percent were in category A (and class AAA). On the area of infrastructure development and facility upgrade, the minister said NigerDock now has the largest dry-dock facility in West Africa for maintenance and service of medium-sized vessels, a direct result of the local content policy, even as she noted that a minimum of two additional dry-docking facilities would be required within the shortest possible time for vessel maintenance and ship repairs in view of the growing economic and maritime activities in Nigeria and West Africa. “Such drydocking facilities would also put the nation on a right path towards building ocean-going vessels. Government is keen on encouraging investments in this area. A new dry dock CONTINUES ON PAGE 15

2015 February, SweetcrudeReports

Focus

Oil tank farm

NCDMB positions Nigeria as Africa’s Oil and Gas industry hub CONTINUED FROM PAGE 14 facility would attract about $1billion dollars into the Nigerian economy and generate over 9,000 direct and ancillary employment opportunities for Nigerians,” she stated. According to the minister, since the inception of NOGICD Act 2010, over $5 billion has been invested in facility upgrade that was largely driven by oil and gas industry needs. Fabrication capabilities have subsequently increased by 40 percent. The minister further stated: “Tt is gratifying to know that production platforms, christmas tree frames, pressure vessels and many other facilities are now fabricated in-country. It is our desire to ensure that incountry fabrication yards are kept busy; we shall therefore continue to ensure local fabrication to the full extent provided by the law. "Interventions in the area of human capital development

on the back of projects have provided over 5,000 training a n d e m p l o y m e n t opportunities. We have also packaged trainings that address the age-long environmental degradation in oil producing communities through an environmental remediation training programme for youths where 1,000 youths are currently acquiring the required skill sets. In the same vein, 50 students have completed classroom training in the geo-sciences field; they are currently being placed in relevant organisations to receive the required handson experience to enable them get gainful employment.” Buttressing this point, Executive Secretary of the Board, Engr. Ernest Nwapa, assured that the decision of the government to make the country Africa’s Oil and Gas industry hub is already on course as the Board, which he heads, has among other things, conceived the

Nigerian Oil and Gas Park Scheme, NOGaPS, to encourage local value addition for equipment used in the oil and gas industry and encourage equipment manufacturers to procure component parts of their equipment from Nigerian SMEs. Implementation of NOGaPS has commenced in earnest, he announced. While also revealing that the Nigerian Content Development Fund has grown to a formidable level and now supports lending with partial guarantees and interest rebates to participating companies. Engr. Nwapa also stated that over 10 million direct and indirect jobs that were being exported abroad are now being retained incountry. According to him also, more indigenous players are now operating major E&P assets even as the country has witnessed over $5 billion investments in the

Engr. Nwapa also stated that over 10 million direct and indirect jobs that were being exported abroad are now being retained in-country

development of new yards and upgrade of existing facilities. The Executive Secretary further listed other achievements of the NOGIC Act to include the fact that existing pipe mills were now manufacturing oil and gas pipes while new mills are under development. OEMs a r e s e t t i n g u p manufacturing facilities while the US company, GE, has commenced construction of a major service centre in Calabar.

Phase 1 of the project is costing $250 million. Nigerian companies are also forming formidable partnerships that are competing for mega projects – EPCs, IPPs etc. Nigerian marine vessels and rig operators are now acquiring and operating their own assets, incountry training and project attachment model are providing effective transition for employment in service industry, Nwapa said. Over 5,000 participants to date.

Gas

2015 February, SweetcrudeReports

China steps up LNG imports from Nigeria

LNG tanker

OSCARLINE ONWUEMENYI

hina's stateowned buyers have stepped up liquefied natural gas, LNG, imports from Nigeria, with six cargoes delivered to the country's LNG terminals so far this year, according to Platts' shiptracking software cFlow. China imported two cargoes from the Nigeria LNG, NLNG, in the period between January and February 2014 and seven cargoes for the year as a whole -- all in the first seven months, according to the ship tracking software and China's import data. According to the report, the increase comes during limited inter-basin arbitrage opportunities caused by weak demand and falling spot prices in Asian markets. In the period January to February 2014, the NBP-JKM s p r e a d a v e r a g e d $7.382/MMBtu versus $1.676/MMBtu in the same delivery months in 2015. But most of the deliveries were said to be part of longterm supply deals between China's state-owned buyers and portfolio sellers, sources said. State-owned Petrochina

received a Nigerian cargo aboard the LNG carrier Solaris at its Rudong terminal in China's eastern Jiangsu province Wednesday. Sources said the cargo was likely a spot delivery by Shell, which currently controls the vessel and has no known longterm contracts with the buyer. Petrochina was reported to have secured a spot cargo in H2 December for delivery in late January or early February in the mid-to-high $9s/MMBtu, but it was unclear at the time whether Shell was the seller. Petrochina received another NLNG-sourced cargo aboard the Neo Energy to its Tangshan terminal in China's northern Hebei province on J a n u a r y 1 5 . Furthermore, Portfolio seller BG was heard to have delivered this cargo as part of an agreement signed with PetroChina in 2014 for the supply of LNG from the seller's portfolio. No further details on the timeline, quantity or price of the deal were immediately a v a i l a b l e . Elsewhere, China's state owned buyer CNOOC (China National Offshore Oil Corp.) received its fourth NLNG

cargo of 2015 on Wednesday, according to cFlow. The Maran Gas Coronis also delivered the cargo to CNNOC's Tianjin FSRU on Wednesday, cFlow data s h o w e d . Previous NLNG deliveries to CNOOC include cargoes aboard LNG River Orashi to Shanghai LNG on February 2,

the LNG Adamawa to Shanghai LNG on January 25 and the Gaslog Santiago to Tianjin FSRU on January 10. The seller of at least some of these volumes was portfolio player BG, which has current long-term contracts with CNOOC for the supply of 3.6 million mt/year -- four to five cargoes a month -- according to a source close to the buyer.

NPDC becomes largest supplier of domestic gas ...Produces 560mscf increases pipeline by 500km

he Nigeria Petroleum Development Company, NPDC - the exploration and production arm of the Nigeria National Petroleum Corporation, NNPC, has become the largest supplier of domestic gas with 560 million standard cubic feet, scf, production. Dr. Kenny Obateru, Manager, Public Affairs, at the National Petroleum Investment Management Services, NAPIMS, made this known to journalists at a briefing in Lagos ahead of the recent 2015 Offshore West African Conference. Obateru said NPDC's focus at OWA

would be to showcase the efforts the Federal Government has put in place to develop gas in the country. Commenting on government efforts on gas development, he stated that as at January 15, NPDC produced 560 million scf of gas to domestic market, adding that with the development, government's effort was paying off. The gas pipelines have increased by 500 kilometres, and 300 kilometres of gas pipeline is ongoing while 1,400 â&#x20AC;&#x17D;is in the project development phase," Obateru said.

2015 February, SweetcrudeReports

Gas

Gas facility

Nigeria witnessing highest gas infrastructure development - NNPC OSCARLINE ONWUEMENYI been corrected to that effect.

he Federal government has lauded the implementation of its Gas Masterplan scheme, saying a massive outlay of gas pipeline infrastructure over the past few years has boosted production of gas in the country. The Group Executive Director, Gas, at the Nigerian National Petroleum Corporation, NNPC, Dr. David Ige, who disclosed this in an interview in Abuja, said implementation of the Gas Masterplan has been successful, baring activities of vandals which has grown over the past few months. He said, "The Gas Masterplan is a policy document that outlines government's gas aspirations for Nigeria. It talks about the commercial gas framework for gas which has been implemented hundred per cent so the price of gas has

It talks about contractual bankable framework for gas in Nigeria that will allow a market that works, which has been completed and is being implemented and today, we are operating gas based on gas agreement. "On the gas-to-power end, we have grown gas supply in the market, and today we have grown from 300 million cubic per day to about two billion cubic per day.” According to Ige, "In no time in the history of this country have we implemented this much gas pipeline infrastructure as we have done in the last four years. "Furthermore, the blueprint of the Gas Masterplan talks about gas industrialisation, which we have started. Basically, today we have an outlay of many fertiliser plants already positioning Nigeria to be the largest producer of fertiliser by 2018".

In no time in the history of this country have we implemented this much gas pipeline infrastructure as we have done in the last four years

“Those are the aspirations of the gas master plan, it talks about regional export we have started producing in West Africa. Everything that was outlined in the government policy is being implemented to the letter and it is beginning to deliver," he f u r t h e r s t a t e d .

Total ends gas flaring at Ofon oil field

rench oil giant Total says it has ended gas flaring at its Ofon oil field, offshore Nigeria. Managing Director and Chief Executive Officer of Total's Upstream Companies in Nigeria, Mrs Elisabeth Proust, ‎who disclosed this at the recent Offshore West Africa conference in Lagos, said the Ofon flare-out was significant to the company "because it represents 10 percent reduction in the Group's exploration and production flaring.” She also stated that the Ofon flare-out has enabled‎the company to comply with the gas flare out targets sets by the Ministry of Petroleum Resources. "This flare-out allows for the gradual increase of production towards 90,000 barrel per day target through monetisation of around 100 million cubic feet of gas per day," Proust said.

She maintained that the company, as at January 12, 2015, has completed a section of its Northern Option Pipeline from Obigbo to the Imo River that is now ready for gas in-flow to the National Integrated Power Plant at Alaoji, near Aba, in Abia State. Commenting on Total's other projects in West Africa, the managing director of Total's Upstream Companies in Nigeria said: "CLOV went on stream in Angola on June 12, 2014 on time and on budgets and achieved production plateau of 160,000 barrels per day. This is the fourth FPSO (Floating Storage and Offloading vessel) on block 17‎. "Kaombo, also in Angola, has received FID (Final Investment Decision) with first oil planned for 2017 and will deliver 230,000 barrels per day at plateau.

2015 February, SweetcrudeReports

Gas

Govt says pipeline vandalism may derail goal of Gas Masterplan

Gas pipeline OSCARLINE ONWUEMENYI

i g e r i a i s witnessing almost daily acts of vandalism on its numerous gas pipeline infrastructure which has led to shortages in gas supply for government’s gas-topower initiative. According to the Nigerian National Petroleum Corporation, NNPC, many security operatives have lost their lives in the process of trying to protect the pipelines from vandalism. The activities of vandals, which have been on the increase lately, threaten the success of the Gas Masterplan, especially for gas supply across the country, Group Executive Director, Gas, at the Nigerian National Petroleum Corporation, NNPC, Dr. David Ige, said. He stated, "The TransForcados gas pipeline vandalism is almost every week now, and it has been going on for some time. In fact, from the first of January till today the pipeline has been vandalised several times, and each time we have tried to fix it we are on the third phase of fixing the pipelines. "It has been vandalised consistently, what happened is that the guys go and drill holes in multiple points in the pipe; in some cases, they kill the security operatives that come to

intervene. This is how gruesome it has become," he said. He noted that the implication of activities of the vandals on the Trans-Focardo is clear: "It is a major outreach. It evacuates most of the crude oil from our production facilities at Oben, Sapele, Utorogun and so on through Forcados which is the main export terminal. "The implication is that when the pipeline is out, we lose gas production from Oben, Sapele, Oredo and Utorogun that immediately account for almost 40 to 50 per cent of entire gas production in the country. "It takes some time to repair a typical repair takes about four to five days depending on how many holes we find. Sometimes, after repairing you realise that additional holes have been drilled because what happens is that when you want to repair the pipeline you have to depressurise the line which gives the vandals sufficient time to go and drill more holes downstream from where there original attack happened.” According to the NNPC chief, "This has been consistent; it has become a major frustration for us and all the efforts we have been putting because we have been doing significantly well in bringing in new gas production, that will bring the visible impact on power but the off and on of the pipeline is a challenge

for us. "The additional challenge we have is that when the pipeline is out it takes a lot of time before we could bring it back to get our production capacity because it takes a long time to build up the capacity. It is not just what we do on and off, we lose time, we lose money. Sometimes, before we get capacity back up, the pipeline is blown up again". He explained that vandalism

was not limited to Forcados, adding that, "We have the same problem on the Trans-Niger pipeline on the eastern side of Nigeria that also get vandalised similarly on the same frequency and the implication of the pipeline being out, is that the Afam power plant goes out, the Okpai power plant goes out and the supply of gas to a lot of our customers is impacted immediately - that is a lot of c h a l l e n g e f o r u s . "

NLNG reiterates HSE commitment

he Nigeria Liquefied Natural Gas Limited, NLNG, has reiterated it's commitment to Health, Safety and Environment, HSE, policy as it donated an ambulance to the Lagos ‎State Sector Command of the Federal Road Safety Corps, FRSC, as part of its corporate social responsibility. According to NLNG, HSE policy guides it's operations and s t a f f a c t i v i t i e s ‎a n d i t , therefore, believes that the ambulance will assist FRSC to improve its response capacity to road accidents. The company explained in a statement that the donation was made on Wednesday January 14, 2015 sequel to NLNG's similar charitable

gesture to FRSC’s Abuja Sector Command by donating five radar guns and five metro count devices. The donation of the five radar guns and metro count devices was in an efforts by the company to help save lives from road accidents, and came after FRSC declared that 120 persons were killed in road crashes across the country between December 19 and 28, 2014. NLNG's Acting General Manager, External Relations, Charles Okon, said: “At NLNG, safety is central to our operations and of utmost importance to our success as a world-class organisation. We have achieved notable milestones in our safety records and want to replicate this

achievement in the wider society. "With the right support, we believe FRSC can bring down the rising surge of road accidents in the country. It is for this reason we are making donations to FRSC to empower it for the important task of saving lives on Nigerian roads. When more lives are saved, the vision of a better Nigeria comes closer to reality.” Receiving the vehicle on behalf of the FRSC, Corps Marshal and Chief Executive, Zonal Commanding Officer, FRSC Lagos Headquarters, Godwin Ogaga Oghene, said: “We appreciate the management and staff of NLNG for the donation of an ambulance to the Lagos State Sector Command.

2015 February, SweetcrudeReports

Gas

Gas facility

WAGP: Nigeria committed to supplying gas to neighbours, NNPC insists ...Ghana may demand $30m fine for non-delivery OSCARLINE ONWUEMENYI

igeria is insistent on its commitment to fulfilling it's obligations towards supplying adequate gas to neighbouring countries under the West African Gas Pipeline project. Meanwhile, the Ghanaian government is set to demand an additional $30 million dollars as fine from the Nigerian government for failure to supply gas to the country as indicated in the contract. Last month, Ghana’s President, John Mahama disclosed that Nigeria had to pay Ghana the amount of $10 million in penalties for failing to deliver the quantity of gas spelt out under the West African Gas Pipeline project contract

Nigeria’s failure to provide enough of gas in accordance with the contract has led to the power plants that rely on gas from the West Africa Gas Pipeline to be been shut down, according to reports. The Nigerian National Petroleum Corporation, NNPC, has blamed the inability of the country to meet up with its contractual supply of gas to its West Africa neighbour to incessant shut down of key gas facilities within the country as a result of vandalism. "This phenomenon has continued to make the fulfillment of obligations to the Benin Republic, Togo and Ghana in the contractual agreement to be more difficult," Group Executive Director, Gas and Power at the NNPC, Dr. David Ige, said. He insisted that the disruptions in gas

supply to Ghana and other West Africa countries were being addressed. “Where net shortages existed as in 2013, these were remedied according to terms of the agreement through penalty payment of $10 million,” he said. He added that, “Nigerian suppliers (NNPC, Chevron and NPDC) have a contractual obligation to supply about 130mmcf/d of gas to customers across West Africa. This transaction is governed by a supply agreement, which recognises various operational and commercial situations. Since 2013, there have been some unfortunate supply disruptions affecting gas shipped through the West African Gas Pipeline. "These have been largely due to Force Majeure events like the outage of the Escravos-

This phenomenon has continued to make the fulfillment of obligations to the Benin Republic, Togo and Ghana in the contractual agreement to be more difficult

Lagos pipeline and other secondary pipelines such as the Trans-Forcados pipeline.” Stating that many of the disruptions have been addressed, the NNPC GED maintained that where net shortages existed as in 2013, these were remedied according to terms of the agreement through penalty payment of $10 million. According to him, Nigeria

“remains committed to supplying the West African region. The current supply challenge is being addressed aggressively and full contractual supply should be attained within a few months. “In addition, new independent suppliers are also looking to develop supplies to WAGP beyond the base volume. The medium term projection is very p o s i t i v e . ”

2015 February, SweetcrudeReports

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2015 February, SweetcrudeReports

Oil well

Big Spenders Report, resource curse and tears of many nations CHIJIOKE K. MAMA

overnance in Africa is far f r o m transparent. This is also true in many other parts of the world. Despite repeated rhetoric, the level of corruption in the management of Africa’s natural resources is alarming. Worse is the fact that governance is intentionally shrouded in a mystical secrecy. Big Spenders: Swiss trading companies, African oil and the risk of opacity” is the theme of a report released by Swiss-based Berne Declaration, BD, in July 2014. BD is a non-profit campaigning for more

equitable relations between Switzerland and underprivileged nations. The report validates the unexpressed fears of many suffering citizens in subSahara Africa. By selecting 1,500 crude sales transactions in 10 subSaharan oil producing nations of Nigeria, Angola, Cameroun, Chad, Cote d’Ivoire, Republic of Congo, Equatorial Guinea, Gabon, Ghana and Sudan; BD highlighted the presence of “Resource curse” in Africa. “Resources curse” is a situation where resourcerich nations exhibit higher levels of poverty, lowerquality of governance and democracy than less resource endowed nations. Many of these nations and their

governments are involved in shady transactions relating to the sale of oil and gas commodities. These governments and their National Oil Companies, NOC, allegedly create condition that encourages corruption in buyer selection and price determination for commodity sale in oil, gas and mining industries. This is often in connivance with foreign commodity trading giants. The report identified that Swiss companies purchased close to 25% of total sales between 2011 and 2013, buying over 500 million barrels of oil valued at $55 b i l l i o n . Salient points of the Report All NOCs in Africa are fully

owned by their respective governments, thus proceeds from the sale of oil, gas and mineral are usually transferred to the state treasury or held in part by the NOCs. The NOCs themselves are involved in the sale of significant portions of national productions. They obtain crude oil from many sources , including their share in Joint Venture initiatives, government's allocation in production Sharing Contracts, in-kind payments received from private companies as part of royalties or tax liabilities and production from their own E&P operations. The procedure and guidelines for these transactions and the consequent payments

grossly lack integrity in many of the countries studied, according to BD’s research. In spite of the recent global movement to increase transparency in the extractive industries, especially in developing nations, many nations and commodity trading companies are yet to adopt measures meant to promote good practices. The Extractive Industries Transparency Initiative, EITI, has been adopted by about 45 nations, yet public disclosures with respect to payment made to government and NOC in many developing nations have been shunned. This leaves citizens at the mercy of CONTINUES ON PAGE 22

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2015 February, SweetcrudeReports

Big Spenders Report, resource curse and tears of many nations

Oil rigs CONTINUED FROM PAGE 21 corrupt leaders and institutions. The share of commodity sales in sub-Saharan Africa involving Swiss giants is significant enough to attract the attention of the Swiss government (and other commodity-buyer nations), via the enactment of laws that mandate public disclosures for these commodity traders. They are believed to have perfected “the skill of forging the right (wrong) political relationships with African governments” However, a report last year from the Swiss government (June 2014) has indicated a preference to exclude such payment in future regulations requiring public disclosure. This makes it even less likely that citizens will ever have a tool to confront a resource-corrupt government. The commodity traders frequently declare revenues in excess of $100 billion, placing them in the league of companies like Apple and Chevron and raising

suspicion about the legitimacy of their business i n v o l v e m e n t s . Implications for the citizens The Mo Ibrahim Prize for Achievement in African Leadership could not find a winner among African leaders for the year 2009, 2012 and 2013. A systematic procedure for selecting African leaders who have demonstrated leadership excellence has failed to identify any winner during this period. This portrays the state of transparent leadership in Africa and the effectiveness of governments and leaders in delivering citizens’ expectation. The deliberate lack of transparency in commodity payments for resources that account for significant percentages of the GDP and government revenue should be a serious source of concern for sub- Saharan Africans. If citizens are not provided the tool required to hold their governments accountable, then executive profligacy will be promoted and enshrined

while blatant and brazen corruption will be celebrated. No other entity is more culpable than the institutions of the affected nations which continually support opacity in payments from commodity sales and also continually produce leaders who see public resource as a means to p e r s o n a l g a i n s . On Nigeria's commodity trading It will be naïve to attribute the absence of transparency in the sales commodities that constitute up to 90 percent of government revenue to any one individual, regime or institution. Neither the president nor the concerned cabinet can be solely held accountable. The lack of integrity, transparency and standard rules in these transactions is a systemic anomaly that benefits many institutions and individuals. The crude oil sales procedure in Nigeria is sufficiently complex (maybe deliberately so) to indict – literally - everyone in the chain. This includes agents who constantly connive to see that metering facilities at

The crude oil sales procedure in Nigeria is sufficiently complex (maybe deliberately so) to indict – literally - everyone in the chain. This includes agents who constantly connive to see that metering facilities at major loading terminals are constantly in a broken state major loading terminals are constantly in a broken state, making it impossible to capture accurate data on sales (a situation that benefits both buyers and sellers). Also culpable are high ranking functionaries and their foot soldiers that consciously mystify other areas in the transaction to create the needed opacity. It’s hard; however, to completely exonerate the leadership of the Nigerian government from the theft. Having inherited a systemic problem, it behooves the leaders, especially law makers, to enact laws that introduce the much-needed

transparency. This will ensure that all aspects of the nation’s development-critical extractive industry are channeled towards the provision of the needs of the much-suffering masses. Dakar to Abuja, N’Djamena to Luanda, the same gory picture is seen of affluent nations with tear-eyed suffering citizens and millions of households lacking the most basic of needs which are taken for granted in resource-poor nations. *Chijioke K. Mama is a Senior Oil and Gas analyst b a s e d i n L a g o s . Chijioke.mama@yahoo.com | 070-6101-3333.

Power

2015 February, SweetcrudeReports

Power substation

Govt boosts power distribution with 395 substations

No more tolerance for energy theft, impostors - Port Harcourt Disco MKPOIKANA UDOMA

OSCARLINE ONWUEMENYI

he Federal Government has disclosed that it had completed the construction of 395 substation to boost power distribution across the country. Vice President, Namadi Sambo, who disclosed this at a campaign rally in Ondo State, noted that power generation had increased to about 4,500 megawatts, MW, as against the 2.000MW being reported in the media. Sambo, who heads the National Council on Privatisation and thus oversees the power sector reforms, added that 100 of the installations are new substations, while over 295 injection substations were also completed. Stating that government has

also successfully constructed 3,500 kilometres of transmission lines, Sambo said that this is to ensure effective evacuation of the additional power being generated by the 10 new power plants built across the country. The Vice President frowned at a media report, which claimed that Nigeria did not have the capacity to transmit additional power being generated by the new power p l a n t s . He explained that the Federal Government has successfully constructed 3,500 kilometres of transmission lines to ensure effective evacuation of the additional power being generated in the country. “The power generation in Nigeria was about 2,000mw. Today, we are generating over 4,500mw,” he said. “Yesterday, I was watching the television and somebody, I

think, who called himself an expert, said we did not have the capacity to transmit power from the 10 new power plants we constructed. “That is a lie, he has no information. We have constructed 3,500km of transmission lines in this country. We have constructed over 100 new sub-stations, we have constructed over 295 injection sub-stations. “Every town in Nigeria has a new substation that will transmit and distribute the additional power being generated.” Sambo added that President Goodluck Jonathan had approved the construction of hydroelectric power projects that would produce more than 4,000megawatts of electricity. “Mr. President, we thank you very much. So, let’s get the correct information that the transformation of the power (sector) is being done globally,” h e s a i d .

he management of the Port Harcourt Electricity Distribution Company, PHED, says it will no longer tolerate any form of energy theft and meter bypass in the four states of its operations. Head of Communications of the PHED, Mr. Jonah Iboma, disclosed this in an interview with SweetCrudeReports at the company's corporate headoffice in Port Harcourt. Iboma said the power distribution company will prosecute anyone involved in energy theft and meter bypass to serve as deterrence to others as he disclosed plans by the company to embark on consumer education and interactive forums, to address the complaints and challenges of its numerous customers. In his words, “As for energy theft and meter bypass, we will do a lot of consumer education for people to know that when there is a bypass or any form of energy theft, the system have a way to ensure that people still pay for it. So that means that if you are not paying for it as somebody that has bypassed, you will be making your neighbour to pay for the energy you consumed, because our system will indicate that such amount of power has been supplied to consumers in a particular area and if some people bypassed, it means that probably the cost will be passed on to others in that area. "So, we need to educate consumers on that. Added to that we will be doing revenue protection, that is, we will identify people who are involved in bypass and apprehend them, then hand them over to the law enforcement agencies”. The PHED communications boss also stressed the company's determination to address the issue of impostors posing as staffs of PHED.

2015 February, SweetcrudeReports

Power

NERC assures of discipline, corporate governance in electricity sector …As Transition Electricity Market finally kicks off OSCARLINE ONWUEMENYI

he Nigerian electricity supply industry has attained the much-awaited transitional stage electricity market, whereby wholesale buying and selling of power are based on contractual and regulatory rules. According to the Nigerian Electricity Regulatory Commission, NERC, the contract-based power market is sequel to its directive to all electricity market participants on the commencement of the transitional market. In a statement from the Commission, made available to SweetcrudeReports, the Chairman, NERC, Dr. Sam Amadi, noted that attaining the Transition Electricity Market, TEM, is stage "will ensure more discipline, corporate governance, guarantee returns on investment as well as give certainty of a sustainable and growing electricity market that will serve the needs of Nigerians.” The commission further stated that with this development, a greater degree of business and investment certainty had been introduced into the country’s electricity market, adding that this would set an even firmer basis for increasing the quantum of electricity available to Nigerians in the short term. NERC, in its order to the

market participants, said the conditions precedent set out in the market rules and subsequently agreed to be necessary for an effective TEM had been satisfactorily fulfilled. “With effect from February 1, 2015, the amendments to the market rules and application and enforcement of the said market rules shall be in full force. With the effectiveness of the market rules, as amended, the transitional stage electricity market shall commence with effect from the same date,” it s t a t e d . The order, which was dated December 31, 2014, further directed all relevant market participants, service providers and the Nigerian Bulk Electricity Trading Plc to comply with the rules from February 1, 2015. The commission said, “From that date, the market will now be governed with the strict application of the terms and conditions of the Multi Year

Power transmission line

According to the Nigerian Electricity Regulatory Commission, NERC, the contractbased power market is sequel to its directive to all electricity market participants on the commencement of the transitional market

Tariff Order 2.1 that was approved on December 24, 2014 and became effective January 1, 2015. This tariff order ensures that market participants now have a cost reflective tariff. “The tariff order is one of the major conditions precedent for the take-off of the TEM. Some other conditions include the constitution of a Dispute Resolution Panel and Initial Stakeholder Advisory Panel, approval of the Grid Code and the Market Rules and their implementation, among others.” One of the implications of

the TEM is that the gas bottleneck, which has constrained electricity supply, will be reduced as gas will be supplied to electricity generation firms on legally binding basis as regards delivery and payment. Besides, the failure of the electricity distribution companies to pay for the energy bought from the generation firms and for deliveries on their privatisation performance obligations will now attract sanctions in line with the market rules and contractual o b l i g a t i o n s .

2015 February, SweetcrudeReports

Power

Takoradi Power Station, Ghana

Ghana hit by insufficient gas supply from Nigeria Forced to shed 600mw of power Demands $10m penalty from Nigeria OSCARLINE ONWUEMENYI 120 million cubic feet of gas pipeline project.

nadequacy of gas supply from Nigeria through the West African Gas pipeline project has forced Ghana to shed between 400 and 600 megawatts, mw, of power. As a result of this development, the West African country is demanding $10 million compensation from Nigeria for failing to supply it enough gas as specified under the gas supply and purchase agreement between them. Nigeria, the main initiator of the pipeline project and country possessing the largest gas reserves in the West Africa region, was expected to provide at least

daily but reports say Nigeria has consistently failed to meet this obligation, leading, as at last week, to a protracted power crisis in Ghana. Officials of the Ghana Grid Company last week indicated they have been forced to shed between 400 and 600 megawatts of power due to the inconsistent and reduced supply of power from the local power generators who also blame their inability to generate more power on the insufficient supply of gas from Nigeria. Ghana’s President, John Mahama, recently lamented the situation, saying Nigeria would have to pay Ghana $10 million in penalties for failing to deliver the quantity of gas spelt out under the

The latest development may have forced the Ghanaian government to look more inwards. “Potentially we can get 150 million standard cubic feet from the Jubilee field, we are developing the TEN field which will come on stream in 2016 and that again can provide us with between 50-80 million standard cubic feet. “So going forward we are looking at about between 300350 million standard cubic feet which will be very important in generating power and ensuring energy security for us,” the Ghanaian president stated. Meanwhile, the Nigerian National Petroleum Corporation, NNPC, has admitted that recent shortfalls experienced due to

gas pipeline vandalism may have disrupted supply along the West African Gas pipeline network. Explaining this in an exclusive interview with SweetcrudeReports in Abuja, the Group Executive Director, Gas, at the NNPC, Dr. David Ige, said: "What happens is that whenever there is a shortfall in Nigeria due to this problem (vandalism), everybody is affected because it is the same pipeline that supplies all and this affects Ghana as well… “Unfortunately, Ghana is at the final end of the pipeline infrastructure, so they feel the pain the most. As soon as there is problem and the pressure drops immediately, by the time all our power plants are taking gas the pressure at Itoke is so low and gas can only flow to Ghana on free flow at about 40 million cubic per day as opposed to 90 or 100 million c u b i c f e e t " .

2015 February, SweetcrudeReports

Power

Govt to shorten PPA negotiation with power firms OSCARLINE ONWUEMENYI

he Nigerian Bulk Electricity Trading Plc, N B E T , i s working to shorten the multi-year negotiations often associated with the closure of Power Purchase Agreements, PPAs, with potential developers of electricity generation plants in Nigeria. NBET, also referred to as the bulk trader, buys bulk electricity from generation companies for resale to distribution companies in the country within the liberalised power sector. According to the Managing Director of the company, Mr. Rumundaka Wonodi, with its experience so far in negotiating and closing up frontline and legacy PPAs in the country’s reformed power industry, NBET is able to understand and proffer solutions to recurrent issues in signing off functional PPAs with new power developers and has thus aggregated its experience into a handbook. PPAs are instruments used to facilitate the sale and purchase of electricity. It is usually signed between a generator and a credible offtaker as the case maybe and defines the revenue cycle in such trading arrangement. Wonodi explained in Abuja that the handbook, like existing PPAs it had concluded on, represents an

Electricity workers

attempt to give ready-made solutions to the challenges that investors in power generation confront while drawing up standard and acceptable PPAs. “This is a handbook that will resonate with power project developers seeking to generate power from different energy sources,” said the

managing director. “It is an important contribution to the body of knowledge on electricity generation in Africa, and is of particular importance to key stakeholders in the Nigerian electricity sector,” Wonodi added. On the need for the publication which was

EKEDC commences tender process for embedded power project KUNLE KALEJAYE

ko Electricity Distribution Company, EKEDC, has started the tender process to select partners that would give it embedded power as part of its plan to ensure improved power supply in its area of coverage. EKEDC’s Assistant Manager, Corporate Communication, Mr Godwin Idemudia, in statement o b t a i n e d b y

SweetcrudeReports, said the company recently held a prebid conference with representatives of companies and organisations that had earlier been pre-qualified for the project. Addressing representatives of the pre-qualified organisations, the Deputy Managing Director of the company, Mr. Ramesh Narayanan said the massive response to the prequalification advertisement for the project was proof that the country had all it takes for

the total positive turnaround of its electricity power industry. He said the purpose of the pre-bid conference was for the prequalified organisations to have a clear picture of the project and what it entails before the commencement of the bid for the project. Participants at the conference lauded the initiative of EKEDC on the embedded generation project adding that they were happy to have been pre-qualified for the project.

developed in partnership with the United States Agency for International Development, USAID, Wonodi explained: “In negotiation of PPAs, a lot of issues are on the table that need to be negotiated and positions taken on them. “What we have done in the past is that we started with

people who are developing their projects and we are negotiating the PPA with them but somewhere along the line, we find that there are new issues that need to be brought to the table and we look at them and agree on how to treat them.” Wonodi said the handbook was an important contribution to the body of knowledge on electricity generation in Africa. “It ensures that stakeholders gain a clearer understanding of many issues surrounding contractual framework for power generation, including issues of risk allocation, tariff consideration, other project agreements in the electricity value chain that need to be aligned with the PPA, project finance and force majeure, among others,” he said. Explaining the significance of the document by citing examples of delays encountered when signing PPAs in the past, Wonodi said one of the agreements signed in the wake of the reform took up to three years before it was eventually endorsed.

2015 February, SweetcrudeReports

Power

Pipeline

otal E&P Nigeria L t d h a s announced that a section of its Northern Option Pipeline, NOPL, from Km 38 (at Obigbo) to Km 50 (at Imo River), has been completed and is ready for gas flow to the National Integrated Power Plant, NIPP, at Alaoji along the Imo River in Abia State. The announcement was contained in a statement from the company which was made available to our correspondent in Abuja. “This milestone will help bring to reality, the Federal Government’s aspiration of improved electric power supply in Nigeria and demonstrates Total’s commitment to meeting its promises to deliver Better Energy,” said Elisabeth Proust, Managing Director of Total E&P Nigeria Ltd. The NOPL is a 24 inch wide, 50km long pipeline under construction by Total E&P Nigeria Ltd on behalf of the NNPC/TEPNG Joint Venture. When completed later this year, the project will deliver 100 million cubic feet of gas per day to this strategic power plant. The statement further explained that in an effort to ensure early gas supply to newly built power plants, the Federal Government requested Total E&P Nigeria Ltd, TEPNG, to complete a section of the NOPL from kilometre 38 (at Obigbo) to

Total E&P boosts gas delivery to Alaoji Power plant Km 50 at Imo-River where the line connects to Nigeria Gas Company, NGC, facilities. “This is the point that allows gas inflow to the Alaoji Power Plant. This intervention for early gas required that Total E&P mobilized additional resources to fast track the works in order to meet the deadline despite numerous changes associated with the

difficult terrain. “The Gas now being supplied to the Alaoji Power Plant during this interim period will come from Seven Energy, while NGC will transport the gas through their pipeline and the section of our NOPL,” it stated. Total’s activities in Nigeria are carried out by

Total E & P Nigeria Limited, o p e r a t o r o f t h e NNPC/TEPNG Joint Venture, Total Upstream Nigeria Limited, TUPNI, and various Total E & P Deepwater subsidiary companies with best practices in corporate social responsibility, CSR, health, safety & environmental protection, HSE, and

Nigerian content development. Total is a leading international oil company and a world-class operator in gas and petrochemicals with operations in more than 130 countries. Furthermore, in response to rising energy demand, the Total Group says it is stepping up its growth in solar energy and biomass.

Egbin Power Station targets 1,350mw increase by 2017 KUNLE KALEJAYE

igeria’s largest power generation station, Egbin Thermal power plant, ‎has been repositioned to boost electricity supply in the country by an additional 1, 350 megawatts, mw, in 2017. With initial installed capacity of 1, 320mw, consisting of six units of 220mw each, the addition of 1,350mw at the plant will see it generate 2,670mw in two years time. This was made known by the Minister of Power, Prof Chinedu Nebo during a visit to the power plant in Lagos at the weekend. Nebo, who spoke to journalist, said the management of the power stations has invested over N 50 billion to revive the

220mw unit six of the power plant which has been moribund for over 10 years. “We have been assured by the new owners of the station that now that the 220 mega watts unit has come on stream, the station is targeting to contributes about 2,670 mega watts to the national grid. “Government has lots of other basic needs to attend to, government did not find the resources to revive it. What we are celebrating today is one of the rich harvests of privatisation exercise. “This has shown that

privitisation is working very well. This station is the largest power plant in West Africa,’’ he said. Nebo explained that it was difficult to regain lost capacity that was lost several year ago, adding that the station can also achieve a total capacity of over 10,000 mega watts in the next decade, if increased demand permits. He said that the additional 220 mega watts from the station would also bolster power supply to Lagos metropolis, thereby improving socio-economic activities in the state and the south-west region.

Finance

2015 February, SweetcrudeReports

Seplat acquires 22.5% working interest in OML 55 for $132.2m

Seplat workers KUNLE KALEJAYE

ot deterred by the free fall of crude oil prices, Seplat Petroleum Development Company has gone ahead to conclude negotiations to acquire 22.5 percent working interest in Nigeria's OML 55 for $132.2 million. Seplat has already notified the Nigerian Stock Exchange, NSE, as is customary for companies listed in the stock market both home and abroad of the acquisition of OML 55 located in the swamp coastal zone of south eastern Niger Delta. Head, Listings Regulation Department of NSE, Josephine Igbinosun, in a statement obtained by SweetcrudeReports, explained that Seplat purchased 56.25 percent of the share capital of Belema Oil Producing Limited, a Nigerian special-purpose vehicle that has completed

acquisition of a 40 percent interest in the producing OML 55. The statement also explained that Nigerian National Petroleum Corporation, NNPC, holds the remaining 60.00% interest in OML 55. The statement read in part: “The cost for Seplat to acquire its 22.5 percent effective working interest in OML 55 is US$132.2 million. The company has also advanced certain loans of US$132.9 million to the other

shareholders of Belema Oil to meet their share of investments and costs associated with Belema Oil. “Consequently, the upfront cash outlay to Seplat after adjustments is US$265.1 million. "The adjustments to the upfront acquisition cost include a deferred payment of US$20.6 million contingent on oil prices averaging US$90/bbl or above for 12 consecutive months over the next five years.

Under the agreed terms, Seplat will recover the loaned amounts, together with an uplift premium of US$20.6 million and annual interest of 10 percent, from 80.00 percent of the other shareholders' oil lifting entitlements

“Under the agreed terms, Seplat will recover the loaned amounts, together with an uplift premium of US$20.6 million and annual interest of 10 percent, from 80.00 percent of the other shareholders' oil lifting entitlements. “The company estimates net recoverable hydrocarbon volumes attributable to its 22.5 percent effective working interest to be approximately 20 MMbbls of oil and condensate and 156 Bscf of gas (total 46 MMboe).” Igbinosun, in the statement, also stated that current gross production at OML 55 is approximately 8,000 bopd (1,800 bopd on a 22.50% working interest basis, adding that pursuant to the Joint Operating Model approved by the Honourable Minister of Petroleum Resources, Seplat has been designated operator of OML 55 and will also act as technical services provider to Belema Oil. OML 55 covers an area of

approximately 840 square kilometres and is located in the swamp-to-shallow water offshore areas in the south eastern Niger Delta. The block contains five producing fields - Robertkiri, Inda, Belema North, Idama and Jokka. The majority of production on the block is from the Robertkiri, Idama and Inda fields. The Robertkiri field is located in swamp at a water depth of five metres and has a production platform and utility platform installed. Other infrastructure on OML 55 comprises four flowstations, a network of flowlines and two eight-inch pipelines that connect to third party-operated infrastructure. All produced liquids from OML 55 are delivered via third party infrastructure to the Bonny terminal for processing and shipping. In addition to the oil potential on the block, there is also an opportunity to develop the significant gas resources that have also been identified.

2015 February, SweetcrudeReports

Finance

OSCARLINE ONWUEMENYI

n the aftermaths of the release of the recommendations of the forensic audit report on the alleged $20 billion missing oil fund, the Nigerian National Petroleum Corporation, NNPC, and its subsidiary, the Nigerian Petroleum Development Company, NPDC, are to refund the sum of $1.48 billion to the national coffers. This is specifically the recommendation of the audit undertaken by the multinational audit firm, Pricewaterhouse Coopers, on the alleged missing money. President Goodluck Jonathan had, while receiving the audit report from Pricewaterhouse Coopers' country representative, directed Auditor General of the Federation, Mr. Samuel Ukura, to make the high points of the audit report public after careful review by his (Auditor-General of the Federation's) office. The Federal Government had in March, 2014, hired the accounting firm to carry out the exercise following allegations by the former Governor of the Central Bank of Nigeria, Lamido Sanusi (now the Emir of Kano), that $20 billion was not remitted to the Federation Account by the NNPC. The controversy led to the former CBN boss being directed in February last year to proceed on compulsory leave. M e a n w h i l e , t h e management of the NNPC has stressed that the forensic audit report has absolved the corporation of culpability over the allegation of nonremittance of $20 billion. NNPC noted in a statement signed by the Group General Manager, Group Public Affairs Division, Mr. Ohi Alegbe, that what is due for remittance to the Federation Account is $1.48 billion signature bonus, taxes and royalties on the assets transferred to its upstream subsidiary, NPDC. The corporation stressed, therefore, that the release of the forensic audit report has finally laid to rest the controversy surrounding allegations of “missing oil revenue” or non-remittance to the Federation Account. The corporation explained that it was not true that it was indicted in the audit

Mrs Alison-Madueke

NNPC to pay back $1.48bn to Federation Account Minister directs corporation to defray signature bonus, taxes report as being speculated in some quarters as the $1.48 billion that the audit firm recommended the corporation to remit to the Federation Account was not part of the alleged unremitted revenues from crude lifting.

It explained that the $1.48 billion was never in dispute as it is made up of payments such as signature bonus, taxes and royalties which are statutory payments that come with assets acquisition.

It stated that the delay in payment was due to the reconciliation processes between the Department of Petroleum Resources, DPR, and the NNPC. Meanwhile, the Minister of Petroleum Resources, Mrs.

Diezani Alison-Madueke, has directed the NNPC to defray the signature bonuses, taxes and royalties in line with the recommendation of the forensic audit report.

Electricity Stabilisation Fund: CBN disburses N18.26bn to beneficiaries OSCARLINE ONWUEMENYI

he Central Bank of Nigeria, CBN, has c o m m e n c e d disbursement of the Electricity Stabilisation Fund to beneficiary power distribution companies, DISCOs, and electricity generation companies, GENCOs.

It has already disbursed N18.26 billion to the first batch of beneficiaries of the N213 billion Nigeria Electricity Market Stabilisation Facility, NEMSF. Beneficiaries in the first round comprised two DISCOs and three GENCOs. At a ceremony at the Bank’s head office in Abuja, CBN

Governor, Mr. Godwin Emefiele, noted that the N 213 billion NEMS Fund was a way of kick-starting the electricity market in order to ensure that the sector delivered tangible improvement in power supply to Nigerians.

2015 February, SweetcrudeReports

Finance OSCARLINE ONWUEMENYI

he Nigerian N a t i o n a l Petroleum Corporation, NNPC, has deplored the recent increase in attacks on crude oil and gas pipelines, saying it was adversely affecting the nation’s economy. This was contained in a statement in Abuja by its Group General Manager, Group Public Affairs Division, Mr Ohi Alegbe, who stated that the nation lost about 60,000 barrels of crude oil per day to acts of vandalism on its pipelines in the last six weeks. Reports show that at $53 per barrel, Nigeria lost about $3.2 million (about N534.3 million) per day to oil theft during the period. Alegbe added that the sudden increase in the activities of saboteurs around the Trans-Forcados Pipeline and the Escravos-Lagos Pipeline in the last six weeks was shocking. He said the Escravos-Lagos Gas Pipeline was vandalised with four breaks in the first weekend of this month (February). According to Alegbe, “NNPC loses between 50,000 and 60,000 barrels of crude oil and condensate on a daily basis to pipeline breaks. The act had robbed the nation of several billions of naira to the

Nigeria losing $3.2bn to pipeline vandalism daily —NNPC

Pipe repair detriment of the national economy." The NNPC spokesman said there appeared to be a syndicate behind the economic sabotage.

Alegbe said none of NNPC’s gas pipelines had been able to run two straight days without being brought down. He regretted that these acts of vandalisation have

adversely affected power generation given that most of the power plants, including those in Calabar, Alaoji, Omoku and Olorunsogo had been connected to gas

Chevron unveils $35bn capital and exploratory budget for 2015 …Reports $3.5bn Q4 net income, $19.2bn 2014 earnings SAM IKEOTUONYE

S super major C h e v r o n Corporation would be spending $35 billion on capital and exploratory investment this year. Included in the 2015 investment programme are $4 billion of planned expenditures by affiliates, which do not require cash outlays by Chevron . The 2015 budget is 13% lower than total investments for 2014. “We continue to execute against a consistent set of

business strategies which are focused on creating long-term value for our shareholders. Although commodity prices have fallen recently, we believe long-term market fundamentals remain attractive,” said Chairman and CEO John Watson. “Our investment priorities are ensuring safe, reliable operations and progressing our queue of projects under construction. Once on-line, these new projects are expected to measurably increase our production and cash generation,” he said. Watson added: “We will

continue to monitor and be responsive to market conditions, and to actively pursue cost reductions throughout our supply chain in order to lower overall outlays. We anticipate growing flexibility in our spend as projects under construction are completed and as supplier contracts are renewed. “We are testing our shortcycle investments, particularly base business and unconventional assets, at current prices and are selecting only the most attractive opportunities to

move forward.” For Upstream, approximately $12 billion of planned upstream capital spending is directed at existing base producing assets, which includes shale and tight resource investments ($3.5 billion). Roughly $14 billion is related to the construction of major capital projects already underway, primarily LNG ($8.5 billion) and deepwater developments ($3.5 billion). Global exploration funding a c c o u n t s f o r approximately $3 billion.

pipelines. "All the efforts of the Federal Government to c o n s t r u c t unprecedented massive gas pipeline infrastructure are being sabotaged by pipeline vandals. "It is unfortunate that between January and early February 2015 alone, the TransForcados Crude Pipeline was attacked and vandalised four times," the NNPC spokesman noted. He added that the corporation was exploring a number of options on how to tackle the menace of pipeline vandalism. The options, he said, ranged from an aggressive community engagement to installation of technological gadgets to stave off the vandals.

2015 February, SweetcrudeReports

Finance

civil society group, SocioE c o n o m i c Rights and Accountability Project, SERAP, has sent a Freedom of Information Act request to the Minister of Finance, Dr. Ngozi OkonjoIweala, asking her to “urgently provide information about the spending of the alleged missing N30 trillion, which represents some accruable income to the Federal Government in the past four years.” SERAP’s request followed the disclosure by the former governor of the Central Bank of Nigeria, Prof. Chukwuma Soludo, that over N30 trillion had been missing, or stolen, or unaccounted for, or simply mismanaged under the minister’s watch. The organisation threatened to “take all appropriate legal actions under the Freedom of Information Act to compel” the minister to comply with the request if “the information is not provided to us within 14 days of the receipt and/or publication of this letter.” In the letter of request dated February 2, 2015 and signed by SERAP’s Executive Director, Adetokunbo Mumuni, the organisation, said, “As trustee of public funds, SERAP contends that your ministry has a legal duty to render account on the missing N30trillion to the beneficiaries (Nigerians) of the trust, if and when called upon to do so. “As a key agency of government, the Ministry of Finance has a sacred duty to ensure that the country’s resources and wealth are used solely to fulfill the basic economic and social rights of all Nigerians and achieve the country’s overall socioeconomic development. "This implies providing strong leadership in the efforts to curb public sector corruption, and to refer to appropriate anti-corruption agencies any allegation of corruption in which agencies of government may be involved or officials of your ministry may be complicit,” the organisation also said. The organisation further expressed concerns that the stealing or mismanagement of such a large sum of public funds might be responsible for the economic crisis and attendant hardship being faced by millions of Nigerians.

Dr. Ngozi Okonjo-Iweala, Minister of Finance

Group threatens suit over alleged missing N30tr “SERAP considers this a serious allegation that requires your immediate and urgent clarifications. If true, such allegation will clearly amount to a fundamental

breach of national anticorruption laws and the country’s international anticorruption obligations and commitments, under the UN Convention against

corruption to which Nigeria is a state party," it stated. It added that, "Any failure or refusal to render account on the missing N30 trillion will also be clearly inconsistent

with the attitude of a government that has repeatedly expressed commitment to the fight against corruption, and in fact signed the Freedom of Information Act”.

Oil Slump: Zero allocation for SURE-P from FAAC

he reality of the current fiscal crisis confronting the Nigeria government has led to the Subsidy Reinvestment Programme, SURE-P, getting zero allocation from the Federation Account Allocation Committee, FAAC. The Federation Account Allocation Committee

met weeks back in Abuja and shared N580.378 billion among the Federal, State and Local Governments. This was the revenue available for distribution to the three-tiers of government for the month of December 2014. Unlike in the previous months, however, no provision was made for SURE-P. Explaining the zero

allocation to SURE-P, Minister of State for Finance, Alhaji Bashir Yuguda, said: "We all know the prices of crude are falling and that's why you see that zero allocation. We've been telling Nigerians to brace up; we've come up with measures, we've been telling Nigerians that from the month of November, we would start seeing the effect

of the falling oil prices. And that's what we are seeing now." The minister added that the persistence of force majeure declared by Shell since June, 2014 as well as shut down and shut in of trunks and pipelines at various terminals also had negative impact on overall revenue receipts in December.

2015 February, SweetcrudeReports

Finance

Nigeria’s foreign reserves falls to $34.5bn in January —CBN

CBN head office, Abuja

igeria’s foreign exchange reserves fell to $34.51 billion by January 13, down 20.2 percent from $43.24 billion a year earlier, owing to drawdowns by the Central Bank to defend the local currency, the naira. Data from the Central Bank of Nigeria, CBN, showed the reserves of Africa’s biggest economy have steadily declined, falling 3.2 percent month-on-month from December, when they stood at $35.66 billion. The naira has remained under pressure, trading outside the central bank’s target band of 160-176 to the dollar, as oil prices plunge. This is despite a devaluation meant to find the currency’s true value and shore up Nigeria’s foreign reserves. Meanwhile, reports have shown that Nigeria’s revenue from crude oil exports, which is currently taking a hammering from the

Data from the Central Bank of Nigeria, CBN, showed the reserves of Africa’s biggest economy have steadily declined, falling 3.2 percent month-on-month from December, when they stood at $35.66 billion lingering decline in crude oil prices, is set to continue dropping as buyers of the commodity appear to be looking elsewhere. Specifically, about 35 million barrels of the country’s crude oil remained unsold at the international market as at December 2014. Also, the country’s crude oil production dropped by 17,300 barrels per day from 1.919 million barrel per day it recorded in November to 1.902 million barrels per day in the month

under review. Furthermore, Asian countries, which Nigeria turned to when the United States stopped buying Nigeria’s crude oil due to the shale boom, now prefer Angolan grades. The Organisation of Petroleum Exporting Countries, OPEC, made this disclosure in its December report and attributed this development to weak crude oil demand at the international market. According to OPEC, low

European refinery demand amid weak gasoline and naphtha margins has put pressure on West African crudes, most especially, Nigerian light sweet crude. It said that Angolan grades have predominantly sold out, supported by robust Chinese buying, though values have fallen for heavier Angolan grades, as they compete with cheaper Mideast Gulf supplies. The report disclosed that the price of Nigerian Bonny Light dropped by $16.80 or 21.2 per cent in December to $62.53/b, accumulating about $49 in losses since June. The cartel also said that crude oil buyers are taking advantage of the price decline and current supply glut by buying and storing of product with the hope of selling at higher prices later in the year. OPEC said that the United States, which used to be Nigeria’s biggest crude oil buyer, has increase its

export providing an outlet for additional production that would otherwise have added to the country’s stockpiles. OPEC forecasts that demand for the group’s oil will drop to 28.78 million barrels per day (bpd) in 2015, down by 140,000 bpd from its previous figure and the lowest since 2004. It however also trimmed the rate of growth in non-OPEC supply partly due to a slowdown in the U.S. shale boom. “As drilling subsides due to high costs and a p o t e n t i a l l y sustained low oil price, production could be expected to follow, possibly late in 2015,” it said.

Labour

2015 February, SweetcrudeReports

Electricity meter glut: Manufacturers lay-off over 50% work force KUNLE KALEJAYE

...Demand liberalised meter market, 5% intervention fund

nformation has emerged in the power sector that indigenous electricity meter manufacturers companies are la y ing off t heir workers due to slow business arising from low patronage f r o m p o w e r distribution c o m p a n i e s , DISCOs. ‎ M e t e r manufacturers in Nigeria under the umbrella body of Electricity Meters Manufacturers Association of Nigeria, EMMAN, said, due to low patronage by the Discos, meters produced by them were not being evacuated into the market. SweetcrudeReport s learnt that this has led them to begin laying off staff to the extent they have at moment disengaged over half of their original workforce. Production has also stopped as the m e t e r manufacturers seek to exhaust their s t o r e s a n d warehouses. Describing these development as " r a t h e r unfortunate", Executive Secretary of EMMAN, Mr. Muyideen Ibrahim, the Federal Government to ‎i n t e r v e n e a n d arrest the ugly situation. He also called for the creation of a five percent special intervention fund f o r m e t e r manufacturers to aid their operations and enable them sell

Electricity meter

their products at competitive price. ‎Ibrahim also urged the government to liberalise the meter market to allow EMMAN members sell directly to individuals,

corporate organisation and Nigerian Electricity Regulatory Commissionapproved vendors. The executive secretary, who made the appeal to news men in Lagos,

If the market is liberalised, more electricity customers will be metered and it will go a long way in addressing crazy bills and estimated billing system

maintained that in order to ensure effective distribution of meters to electric consumers, meter manufacturers should also be allowed to sell their products to government institutions, private estates, companies and individuals. "Government should liberalise the meter market so that individuals can also buy meters from approved NERC vendors and installers. "If the market is liberalised, more electricity customers will be metered and it will go a long way in addressing crazy bills and estimated billing system. "Because some distributions companies are not willing to gives meters to customers, that is why government

should allow meter manufacturers to sell meters directly to the consumers "Government should also create enabling environment for manufacturers to excel, it’s only the distribution c o m p a n i e s t h a t manufacturers can sell to," Ibrahim stated. He added that the liberalisation of the meter market and the five percent intervention fund would result in gainful employment for more Nigerians as he reiterated the resolve of the association's members to continue to contribute their quota to the development of the power sector and to the entire nation through development and manufacturing of high quality products.

2015 February, SweetcrudeReports

Labour

Fuel attendant OSCARLINE ONWUEMENYI

he Trade Union Congress, TUC, and the Nigeria L a b o u r Congress, NLC, want the Federal Government to further reduce the pump price of petrol, which was last month slashed from N97 to N87 per litre by the Federal Government. While commending the government for the recent price reduction in line with the current falling prices of crude oil in the international market, TUC President, Comrade Bobboi Kaigama, stressed that the reduction has not gone far enough. “N10 slash in the fuel price is indeed a commendable

Labour urges further petrol price reduction …Say price should be N60 or less one, but the government should have pegged the price at N50 or N60 to reflect the prices in other oil producing countries. But, for now, we are comfortable with the price pending when another step is taken by the government. “In the case of diesel, despite being deregulated long ago, the product still sells at a high price. I had expected that the market forces should have

determined the prices, but I hope that in no distant time, Nigerians will understand the workings of the industry, but we ought to have our refineries working in full capacity,” TUC President said on a television programme in Abuja. Also, the NLC said through its said although its General Secretary, Peter Ozo-Eson, that though the price drop

was a welcome development, it was ‘not sufficiently deep enough.’ Ozo-Eson said in a statement: “Prior to this

price reduction, government had substantially devalued the Naira, thus ensuring that the full benefits of falling crude price are not passed on to Nigerians.”

PENGASSAN recommends modular refineries for Nigeria MKPOIKANA UDOMA

he Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, has called for the establishment of modular refineries to help the country achieve efficiency in local refining of petroleum products. Speaking on the recent reduction in the pump price of petrol in the country, the Port Harcourt

Zonal Chairman of PENGASSAN, Comrade Azubuike M. Azubuike, said the price reduction would be inconsequential so far as the nation was still dependent on imported fuel. Azubuike, who spoke in an i n t e r v i e w w i t h SweetcrudeReports in Port Harcourt, urged the government to make the existing local refineries functional or build modular

refineries across the country in order to meet the needs of the masses. He said: “Even if the Federal Government should reduce the pump price to N30 per litre, it will not have much impact on the economy of Nigeria, because these things (petroleum products) are being imported and Nigeria is losing a lot of revenue, no jobs and many other things. Source: Energi Talent Resourcing

2015 February, SweetcrudeReports

Solid Mineral

2015 February, SweetcrudeReports

Govt spends N1.5bn to reclaim abandoned mining sites

Mining site

he Federal Government has announced that it spent N1.5 billion to reclaim 20 abandoned mine sites across the country from 2007 to 2014. The Acting Director, Mines, Environmental Compliance Department in the Ministry of Mines and Steel Development, Mr Salim Adegbayega, who disclosed this in Abuja, said the ministry had planned to reclaim 100 sites from 2007 to 2020 across the country. According to him, the ministry have so far been able to reclaim only 20 due to lack of funds for the project. The acting director explained that paucity of funds meant that only four abandoned mines were reclaimed in 2007; six in 2008; two in 2009; three in 2010; one in 2011; one in 2012 and three in 2014.

He said the reclaimed sites were located in Edo, Ebonyi, Plateau, Kano, Borno, Abia, Kaduna, Cross River, Bauchi and Nasarawa states. He said the ministry had planned to reclaim eight sites annually within the period but due to lack of fund, it had been reclaiming less the targeted plan yearly and would reclaim three in 2015.

Adegboyega said so far the government had identified 1,200 abandoned sites across the country and more would be identified, as the field surveys were still ongoing. According to him, Plateau State has 732 abandoned mining sites, making it the state with the highest number; it is followed by

Plateau State has 732 abandoned mining sites, making it the state with the highest number; it is followed by Bauchi State, 63; Narasawa State, 36; Borno, 33; Enugu, two; Katsina, two and Lagos, four

Bauchi State, 63; Narasawa State, 36; Borno, 33; Enugu, two; Katsina, two and Lagos, four. The acting director further noted that about N6 billion was budgeted to reclaim 100 sites effective from 2007 to 2020 at the average cost of reclaiming N60m per site. He said reclamation of a site could cost as high as N200 million and as low as N20m, depending on the size of the site but on the average it was put at N60 million. He said that minesâ&#x20AC;&#x2122; reclamation was an expensive venture because the cost depended on size of a particular site and the distance of the place where the materials would be brought down to fill the mines and other factors. â&#x20AC;&#x153;We reclaimed based on the environment statutes and the magnitude of danger the abandoned sites posed to the communities; those are the

criteria we looked at.â&#x20AC;? He said it was impossible for the ministry to reclaim all the sites because some of the mining ponds were used for irrigation farming, fishing and water supply for domestic and industrial purposes. Adegboyega said if mining ponds were found to be useful economically to the host communities and if its water was safe, the sites would not be reclaimed but those with high risks or hazards would be reclaimed. He said mining sites were abandoned in the past because there were no laws stipulating that they should either be reclaimed or rehabilitated whenever they were no longer active. He said according to the new environmental policy, any mineral title holder must reclaim the land before vacating a mining site.

2015 February, SweetcrudeReports

Solid Mineral

Ajaokuta Steel Complex

House probes N3.4bn salary scam at Ajaokuta Steel

he House of Representatives is investigating alleged increase in monthly salaries of workers of the moribund Ajaokuta Steel Company from N228 million to N3.4 billion. In a directive to its Committee on Steel, the House asked it to probe the development and report back

in two weeks. The action of the House followed a motion by Hon. Abbas Tajudeen entitled: "Need to investigate the expenditure of huge sum of N3.4 billion monthly on payment of salaries to staff of the moribund Ajaokuta Steel Company." Tajudeen, in his submission, expressed concern over a report last year that quoted the Chairman of

Assets Management Corporation of Nigeria, AMCON, Aliyu Kola Belgore, that the sum of N3.4 billion was being spent monthly to pay salaries in the moribund company. He equally noted that there was a twist in another report published in September, 2014, where the Iron and Steel Senior Staff

Why govt revoked 44 coal titles, by Mining Cadastre Office

h e M i n i n g Cadastre Office in A b u j a h a s explained that the recent revocation of 44 coal titles out of the 119 initially listed for revocation was due to non-compliance, on the part of the title holders, with the Nigerian Minerals and Mining Act, 2007, dormancy, nonsubmission of statutory report and non-payment

of annual service fees. Announcing the revocation of the 44 titles recently, the Federal Government said it had retained 54 coal titles while 13 others have been relinquished and four others still under processing. Western Goldfield Group Limited, Dome Minerals Nigeria Limited and Nifex Limited were among the top three on the list whose coal titles were revoked, according to a statement by the Mining

Cadastre Office. Ashakacem Plc, NCC Okabo Mines Limited, Golden Horsefield Mining Company Limited and 51 others had their coal titles retained for submitting satisfactory reports to the regulatory body. The statement also indicated that the coal titles that were relinquished also submitted satisfactory reports. However, the office stated

Association of Nigeria, ISSAN, in conjunction with Engineering Workers Union of Nigeria, TEWUN, addressed a press conference claiming that the monthly wage bill for 2,900 staff of the company was N288 million and not N3.4 billion as alleged. This discrepancy, he noted, shows that some individuals are exploiting

that the revocation of some coal titles was as a result of unsatisfactory report submitted and inactiveness. Some were also revoked for having defaulted and not submitting report to the regulatory body as required. Meanwhile, the statement indicated that the four coal titles of Owkpa Consolidated Mines Limited are still under processing as a r e s u l t o f t h e unsatisfactory performance “in compliance.”

the dire state of things presently at the multibillion dollar project to rip the country of billions of naira. Tajudeen further disclosed that “the provisions of Section 88(2) (b) of the Constitution, which empowers the National Assembly to direct or cause to be d i r e c t e d a n investigation aimed at exposing corruption, inefficiency or waste in the administration of funds appropriated by it.” He said, “Despite that the company was conceived and built with the aim of f a c i l i t a t i n g industrialisation and e c o n o m i c transformation of the country, it has failed to fulfill that expectation, hence the engagement of U.S. consultants and Indian technical contracts for 10 years.”

Freight

2015 February, SweetcrudeReports

Ships coming into Nigeria with foreign guards will be detained —NIMASA

A ship KUNLE KALEJAYE

he Nigerian Maritime Administratio n and Safety A g e n c y , NIMASA, has warned vessel operators against entering the Nigerian maritime domain with foreign guards. Director, Shipping Development at NIMASA,

Captain Waredi Enisouh, issued the warning on the back drop of the recent arrest of three British armed guards on-board three ships. “Nigeria did not sign up to the International Maritime Organisation, IMO, for the use of armed guards onboard ship,” Capt. Warredi Enisuoh said as he stressed that any vessel that comes into country’s territorial waters

with a foreign guard, caught with arms or not, would be detained. He also maintained that no cargo operation of any kind would be allowed into the country if found wanting. NIMASA recently arrested three British armed guards and the ships they were in for allegedly threatening Nigeria’s maritime security. The ships are MT Lilac

Victoria, MT UACC Eagle and MT Morgane, but SweetcrudeReports could not ascertain the names and other details of the armed guards. SweetcrudeReports reliably gathered that NIMASA got intelligence reports about the vessels through its Satellite Surveillance Centre on the ships’ entrance into the

Vehicle importation drops by 50%

he volume of vehicles being imported into Nigeria has declined sharply by 50 percent‎ sequel to the nearimplementation of the Federal Government's new automotive policy. This development has allegedly to the diversion of used vehicles meant for Nigerian to the neighbouring port of Cotonou, Benin Republic for onward movement

into Nigertia The Managing Director of Port and Terminal Multiservice Limited, PTML, Mr. Asconio Russo, disclosed this to news men in Lagos, saying drop in vehicle importation into Nigeria might get worse when the auto policy is fully implemented in April, this year. ‎Russo stated this when the National President of the Association of Nigerian Licensed Customs Agents, ANLCA, Prince Olayiwola Shittu visited the

terminal in Lagos. “I may not want to comment on government policy because it is not my prerogative, but, I can give you the figures, tell you that the number of vehicles being discharged all over Nigerian – I am not talking about our terminal – but in Nigeria, it has dropped 50 percent," Russo stated. He added: “So, the calculation is if the whole of Lagos was discharging 20,000 or 25,000 vehicles

every month, it is like we are now doing 10,000 vehicles and these are the ones coming in RORO. There are also some coming in containers which has also disappeared. “We have noticed that the number of vehicles coming into Cotonou has increased dramatically, so we are losing business while Cotonou is gaining business.

country’s territorial waters from Ghana and Ivory Coast. It was also gathered that the arrest of the ships started on January 27. Captain Enisouh, who confirmed the arrest, said all three ships had onboard British nationals linked to private registered security firms overseas that are specialised in giving trainings in the use of weapons. The NIMASA director explained that the private security firm signed an unconstitutional Memorandum of Understanding, MoU, and partnership with Nigerian security officials (names withheld) to provide security for merchant ships in Nigerian waters, describing the MoU and the partnership as a threat to Nigeria’s maritime security with possibly far reaching consequences for the country.

Motoring

2015 February, SweetcrudeReports

BMWs with the Connected Drive system are vulnerable to hacker attack

ackers have found a way to use BMW's Connected Drive system to remotely unlock car doors,

according to PCWorld. The website quotes Dave Buchko, a BMW spokesman, saying that the perpetrators were able to “reverse engineer some of the software that we use for our telematics . . . and they were able to mimic the BMW server.” The glitch was first discovered by the German Automobile Association (ADAC). The PCWorld article reports that BMW is beaming “software patches to the 2.2 million cars equipped with Connected Drive and BMWs with the Connected Drive system are vulnerable to hacker attack

said it hadn't come across any cases in which the vulnerability had been used to unlock or

Driving the 2015 BMW X6M, and its 567 hp of individuality

attempt to unlock its cars.” Buchko went on to say that U.S. customers will start getting the patch beginning from next week. PCWorld says that the fix “adds HTTPS encryption to the connection from BMW to the car, which runs over the public cellular network. The added encryption will not only safeguard the content of the messages but also ensures that the car only accepts connections from a server with the correct security certificate.” This issue brings to light the possible downside of remote locking/unlocking services from various manufacturers: vulnerability to creative hackers to get in your car. The BMW breach comes on the heels of the massive data breach that hit health insurance company anthem.

2015 BMW X6M

oo big to be a sportscar, not rugged enough to take off-road, and about as glamorous to look at as an old shoe, the BMW X6 got a lot of flack when it debuted in 2010. Jeremy Clarkson famously called the X6 “the stupidest car ever made.”

But BMW has turned out to be about as stupid as a Black Forest fox. The X6 is a solid success, consistently selling in the mid-five figures yearly worldwide since its launch. Suddenly, there is competition from Porsche and Mercedes-Benz, and a new segment has been born.

The second generation X6 debuted last year to decent reviews. It was still stupid, but had improved in most of the important ways, and was extremely comfortable inside. And now comes the inevitable performance edition, the BMW X6M. Save a few carbon-fiber

accents, the M has the exact same interior as the regular X6, like a massive leather sofa on wheels, and the exact same killer stereo system. But everything is new in the M where it counts: Engine, suspension, cooling system, and dynamic power control. Underneath that weird shoe-shaped hood, a monster stirs. CONTINUES ON PAGE 40

2015 February, SweetcrudeReports

Motoring

BMWs with the Connected Drive system are vulnerable to hacker attack

CONTINUED FROM PAGE 39

rand-new bright-blue X6Ms were zipping around the track at the Circuit Of The Americas in

Austin, driven by committed car journalists, trailing a couple of professional race-car drivers who were driving lead. Frank Van Meel, President of BMW's M division, sat around eating pastries and drinking coffee with the rest of us. After pleasantries, I asked him who his intended customer was for this X6M. “We have all kinds of customers, really,” he said, paused, and then added. “People who want to reward themselves. Who want performance. Serenity. Indvididualists.” Well, now I knew that BMW wasn't aiming the X6M at bike-riding residents of a Danish housing collective. It made sense that “individualists” would want to buy a performance edition of a not-veryuseful sports utility vehicle, with a 4.4liter V-8 engine that generates 567 hp and an eight-speed transmission, contained within a 5,000-plus pound behemoth that goes zero to 60 in four seconds and has an interior more luxurious than the screening room at a Russian billionaire's dacha. This X6 is “just the logical next step,” Van Meel told me. A step it definitely is, but whatever's going on with the X6M has very little to do with logic. At a price tag just over $100,000, it isn't the people's car.

2015 BMW X6M

hey gave us a street route for the X6M, but I live in Austin, and I knew that route foretold nothing but anxious traffic. Instead, my drive partner and I took it out onto state highway 130, a toll road built a couple of years ago to ease traffic on I-35. It's turned out to be an expensive, poorly maintained boondoggle

thus far, but the portion between Austin and San Antonio is also the only road in the United States with an 85mph speed limit. It is little used and even less patrolled. We quickly found that the car company that made the shockingly innovative i3 can still generate turbocharged wastefulness with the best of them. We drove nearly 100 miles in it, and it took us under an hour. The car barely

crawled at 80 and didn't even begin to protest when it topped 100. We may have peeked at 120 a couple of times. The road was so empty that we even put it at 100 on cruise control for a small moment, coasting along atop a monument to speed and power. There's a saying in M-land that all its cars must be “fit for the Nordschliefe,” which is the most German-

sounding phrase imaginable. But absent the Nordschliefe, the track at COTA, with its corkscrew turns and long straightaways, is a good substitute. Honestly, I couldn't make heads or tails of the X6M on the track. It felt too big to me for what we were asking it to do. But one of the pro drivers, who, admittedly was paid to be there, seemed genuinely pleased when he provided this assessment:

“One hundred and fiftyfive miles an hour in a two-ton sports utility vehicle, and when we hit the brakes, it's no trouble. We've been doing these runs for two days straight and we haven't had any problems at all. In almost any other car, the brakes would have burned out.” Well, there you have it. That's what you get for your $100,000-plus, individualists of the world. Serenity now.

Technology

2015 February, SweetcrudeReports

Schematic diagram of pipeline surveillance

Pipeline security and monitoring – protecting the industry

By Adrian Fielding, Senior Manager-Industrial Security Solutions, Honeywell Process Solutions And David Hill, Technical Director

t has been an industry goal for many years to protect oil, gas and refined product pipelines against sabotage, illegal tapping and terrorist action, in addition to the everyday detecting of leaks and in-line equipment failure. This article highlights how a distributed acoustic sensing system called OptaSense is helping to protect the world’s critical oil and gas supplies. Critical infrastructure in a

dangerous world It has never been more important to ensure the safety and reliability of production and distribution assets for the oil and gas industry. In a fragile economy, any threat to pipeline infrastructure can have a significant effect, whether from an intentional disruption or simply inadvertent damage caused by everyday activity or natural events. Along with threats from theft and construction work,

Remote Pipeline Monitoring Station pipelines are also an easy ‘soft target’ for terrorist organisations aiming to damage Western economic and political interests. Limitations of existing technologies Common pipeline security

measures include aerial surveillance, installation of pipeline warning boards/markers, deployment of security personnel, and conducting awareness campaigns to educate

habitants and workers along the pipeline route. Advanced telecommunication systems and leak detection systems are also widely used to CONTINUES ON PAGE 42

2015 February, SweetcrudeReports

Technology

Pipeline security and monitoring

Security video surveillance CONTINUED FROM PAGE 41

improve the monitoring and remote control of pipelines. However, armed security guards c a n n o t b e everywhere at the same time. While aerial surveillance vehicles that have a passing inspection window and closed circuit t e l e v i s i o n (CCTV) security cameras are effective for surveillance, they are not applicable o v e r l o n g distances, and are less useful if not incorporated into a complete security system. The majority of existing detection technologies only provide notice that a damaging event has already

occurred so an operator can put into place reactive countermeasures to stop the associated costs from

escalating. OptaSense aims to change this. Latest pipeline monitoring solution

OptaSense actively carries out acoustic sensing for pipeline condition monitoring, security and leak detection on the same strand of fibre, making it ideal for retrofit projects with existing cable installations

Remote Pipeline Monitoring Station

Distributed acoustic sensing (DAS) is a recent addition to the pipeline security world, but one that has quickly established an international track record in providing benefits to pipeline operators. The OptaSense system is designed to prevent pipeline damage from occurring in the first place by providing advance warning of the events leading up to an incident. Attaching an OptaSense

Interrogator Unit (IU) to one end of a standard fibre optic cable, such as those used for telecommunication, creates an acoustic array of virtual microphones every 10 m along the fibre. The sound received from the virtual microphones is analysed and converted into a simple graphical display showing the operator what is happening along each individual section of fibre. OptaSense works by sending a pulse of light down the fibre optic line from an IU. A small percentage of light is reflected back towards the source – this effect is called ‘backscatter’. Sound or vibration near the fibre changes the pattern of backscattered light, and these changes are analysed by the IU to recreate the sound or vibration that caused them. The sounds are then sent to a processing unit, which analyses the sounds using algorithms to create specific alarms for a given event or sequence of events. These alarms can be displayed on the system graphical user interface, including a map of the pipeline network with alert accuracy of 10 m, or relayed to the operator’s existing control systems. OptaSense actively carries out acoustic sensing for pipeline condition monitoring, security and leak detection on the same strand of fibre, making it ideal for retrofit projects with existing cable installations. These systems can also cover up to 80 km of cable between power and CONTINUES ON PAGE 43

2015 February, SweetcrudeReports

Technology

Pipeline security and monitoring CONTINUED FROM PAGE 42

network connections, making implementation in the real world simple and with no effect on existing operations. A solution which matches requirements DAS technology provides around-the-clock monitoring over very long distances. Operators can ‘see’ the entire length of the fibre optic cable continuously and detect, classify and locate multiple simultaneous disturbances with excellent resolution. Most importantly, the signal extracted from each section of fibre is unaffected by the vibration on any other section. OptaSense employs a processing architecture for analysing acoustic activity that draws upon decades of military sonar research within QinetiQ, which is one of Europe’s largest research and technology companies. This tells the operator what

OptaSense has been deployed worldwide on pipeline systems to monitor activities ranging from active hot taps to air conditioning units in block valve stations the threat is and minimises false or nuisance alarms. Customisable software allows the operator to create zones where specific activity can be activated, suppressed or tuned to account for differing environmental conditions or requirements. This allows the user to control what information they feel is relevant to their installation. Detection ranges from the

pipeline itself depend on the type of soil surrounding the fibre, but OptaSense can typically detect: —People walking when they are 5–10 m away from the buried cable —Manual digging 5–15 m away —Vehicles 5–15 m away —Mechanical digging or other large machinery at a distance of 20–50 m.

OptaSense can be used to cue other security platforms such as CCTV or unmanned aerial vehicles for visual confirmation. Typical industry applications OptaSense has been deployed worldwide on pipeline systems to monitor activities ranging from active hot taps to air conditioning units in block valve stations. Some of the company’s typical applications include:

—Third-party interference —Asset protection —Leak detection —Pig tracking and profiling —Equipment monitoring —Reporting and forensic analysis. By continuously engaging with pipeline operators, Optasense has been able to tailor its approach to meet customer requirements and adapt to new and varied threats. This flexibility ensures distributed acoustic sensing is at the forefront of pipeline security today.

Community

2015 February, SweetcrudeReports

Oil exploration

Controversy trails Belema Oil's plans to explore for, produce oil in Ogoniland MKPOIKANA UDOMA

ontroversy is t r a i l i n g approval by a section of Ogoni leadership for an indigenous oil company, Belema Oil Producing Limited, to commence immediate oil exploration and production in the community. Traditional rulers, chiefs and some elders of the Ogoni ethnic nationality in Rivers State, approved the immediate commencement of operation by the company recently. They also approved that Belema Oil Producing Limited should be the sole prospecting firm "to explore and extract Ogoni oil". The decision was contained in a five-point communiqué signed by the president of the Supreme Council of Ogoni Traditional Rulers, HRH

…Stay away from Ogoni, MOSOP, others warn company King Godwin Giniwa and other traditional rulers from the oil producing communities in Ogoniland. The communiqué, which was read by the Paramount Ruler of Ogale community in Eleme Local Government Area of Rivers State, HRH Godwin Bebe-Okpabi, endorsed Belema Oil to take over from Shell, which was forced to leave the area over environmental issues and the death of playwright Ken Saro Wiwa, a prominent citizen of the community. “We hereby accept, present, endorse and declare Belema Oil Producing Limited to all Ogoni people, Shell Africa, Shell Investor Group, the Federal Government of Nigeria, World Investors Finance Groups, United

Nations, all human rights support groups, European Union. "Ogoni oil is now open for exploration and production for Belema Oil Producing Limited. Shell, the Federal Government of Nigeria and all groups should kindly give all necessary support to making this historic event successful,” the communiqué read. Also speaking, the chairman of Bodo Council of Chiefs and Elders, Mene Sylvester Kogbara said the new oil outfit has agreed to meet the demands of the Ogoni people. The Movement for the Survival of the Ogoni People, MOSOP, and other Ogoni groups have, however, kicked against the

plan to recommence oil activities in Ogoniland, saying they were not part of the decision by the traditional rulers. President of MOSOP, Mr. Legborsi Saro Pyagbara, in a statement obtained by SweetcrudeReports, said MOSOP was surprised and disappointed over the decision of the Ogoni chiefs at a time efforts were on, "on remediation and restoration of our degraded environment via the implementation of the UNEP report on Ogoniland”. The statement read in part: “MOSOP is disappointed at the demonstrable desperation of the Ogoni Chiefs, Belema Oil and their collaborators hence the MOSOP dissociates itself

from the purported declaration of the chiefs. Our position remains that whilst we are not opposed to prospective companies indicating interest in the Ogoni oil concession, and recognising the sensitivity and peculiar circumstance of our people in relation to oil matters, due process has to be followed to foster genuine participation and collective decision. "We regret to say that the haste with which the socalled process has been handled remains suspect as it lacks transparency. We therefore call on the good people of Ogoni and the general public not only to discountenance the baseless CONTINUES ON PAGE 45

2015 February, SweetcrudeReports

Community

MKPOIKANA UDOMA

r e n c h multinational oil company Total E & P h a s commended the Joint Task Force, JTF, operating in the Niger Delta region on its efforts at combating oil theft and illegal oil bunkering activities in the region. Total’s Deputy Managing Director and Head of the Port Harcourt Operation Centre, Mr. Nicholas Brunet made the commendations when the Commander of JTF, Major General Emmanuel Atewe paid him a courtesy visit in Port Harcourt. Brunet, while welcoming the Commander and his team to his office, praised the Task Force for effectively checkmating the activities of oil thieves, illegal oil bunkering and pipeline vandals, which he said has led to increased oil production in Nigeria. He also appealed to the JTF Commander to increase the presence of his officers and men in all Total facilities especially the offshore platforms, for the protection of lives of about 2,350 employees of the company. “We will appreciate if more troops will be deployed to our facilities to protect the facilities from attack by criminals operating in the waterways,” he said. Brunet further disclosed that about 96 maritime attacks were recorded on the Nigerian maritime environment in 2013, but relatively not much was recorded in 2014 as a result of the presence of JTF and other security agencies. On the achievement of the company in the year 2014, Brunet said Total E&P embarked on numerous developmental projects as part of its cooperate social responsibility to the host communities. In his response, Maj. Gen. Atewe said the JTF under his command has put in place strategies required to eliminate all oil-related crimes in the region, saying: “We are carrying out our mandate in a professional manner through our zeroTolerance campaign against oil theft and illegal bunkering”. He said the Defence Headquarters has provided the platform to fight criminality, explaining that more boats and marine outboard engines with

JTF on patrol

Total commends JTF on fight against oil theft capacity ranging from 200 to 250 Horse Power have been acquired for the task force. Maj. Gen. Atewe urged “harsher and stiffer punitive measures to be meted on oil thieves to deter others from engaging in the criminal acts”, while also commending some

host communities for giving out information to the security operatives which, he said, led to many successes recorded in the fight against oil criminalities. In another development, the Joint Task Force's

special anti-illegal oil bunkering and oil theft of Sector 1 has intercepted a Mercedes Benz truck loaded with unquantified volumes of substance suspected to be illegally refined Automated Gas Oil, AGO, along WarriSapele road in Okpe Local

Government Area of Delta State. Four suspects were arrested in connection with the illegal activity. The truck and the product were destroyed while suspects were taking into custody for preliminary investigation.

Controversy trails Belema Oil's plans to explore for, produce oil in OgonilandOgoni oil concession has to state that we do not see National Coordinator of CONTINUED FROM PAGE 44

claims but also resist any attempt to fraudulently sell Ogoni oil through the back door”. It continued: “We consider as appalling and provocative the role of Belema Oil in this whole saga and it would be held responsible for any conflict that may occur therefrom. The way and manner with which it has pursued its interest in the

caused disaffection and division in the area. "Evidence abound that Ogoni has not recovered from the oil crisis in the area, which has consumed over 3,000 sung and unsung Ogonis, including a generation of the Ogoni leadership and we are no longer prepared to suffer same… "We thus call on Belema Oil to stay away from Ogoni until the issues are resolved. We are compelled therefore

how oil production can commence in Ogoni, when we are not sure as to whether the Ogoni environment can stand any oil mining especially in view of available scientific environmental reports on the area, which have not been addressed. "To us, the priority is the remediation and restoration of our degraded environment via the implementation of the UNEP report on Ogoniland”.

the Ogoni Solidarity Forum, Mr. Celestine Akpobari, has also disagreed with the planned resumption of oil drilling activities in Ogoniland. Akpobari described as sad the decision of the Ogoni c h i e f s d e s p i t e commencement of clean-up of oil impacted areas caused by 30 years of oil exploration by Shell. An environmental right group, the Ken Saro Wiwa Associates, also distanced itself from the decision.

2015 February, SweetcrudeReports

Community MKPOIKANA UDOMA

everal oilp r o d u c i n g communities in Ilaje Local Government Area of Ondo State now have cause to smile, as work on the multi-billion naira UgboOghoye road has been stepped up to ensure its completion on schedule. The 21.4-kilometre regional road with four bridges, being constructed by the Niger Delta Development Commission, NDDC, would connect various riverine communities that were hitherto inaccessible by road. Speaking during an inspection tour of the project, the NDDC Managing Director, Barrister Bassey Dan-Abia, observed that the project was very strategic as it would eventually link up with the Koko-Oghoye Road, taking off from Koko in Warri North Local Government Area of Delta State. Sir Dan-Abia, who led a team of NDDC officials to the site of the first bridge where pilling was in progress, said the communities should thank President Goodluck Jonathan for making it possible for the commission to undertake such a gigantic project. The NDDC chief executive officer noted the enormous challenges posed by the swampy environment and appealed for more understanding for the delays

NDDC road projects to lift Ondo oil-communities

Road construction in executing road projects in most parts of the Niger Delta. He said: “This Ilaje area is a typical Niger Delta terrain and I wish other Nigerians will appreciate the peculiar problems we encounter in the region. With this kind of setting, people should not be

surprised that the cost of executing projects is usually huge. However, we look forward to driving on this road to Ayetoro in no distant time.” Briefing the NDDC boss and other officials of the commission, Mr. Augustus

Owowa, the project consultant, gave a graphic picture of what it takes to build a road in the swamps. “We have to fill up to four metres with sharp sand to stabilise the soil. Here, we are working on the first bridge and we have drilled 63 metres deep, yet we are

NDDC denies awarding contract to First Lady; inability to pay salaries MKPOIKANA UDOMA

he Niger Delta D e v e l o p m e n t Commission, NDDC, has refuted reports by an online media, alleging that resources of the Commission have been put at the disposal of certain politicians in Abuja and Port Harcourt. It also denied reports that workers of NDDC were being owed salaries. A statement issued by the Head of Corporate Affairs of the NDDC, Mr. Ibitoye Abosede, described the allegations as untrue and lies fabricated to dent the good image and new reputation of the Commission. The statement said it is not

only laughable to say NDDC is unable to pay salaries of its workers, but misleading as it is aimed at dragging the Commission into the political battleground. NDDC in the statement also denied giving money to the wife of the President, Dame Patience Jonathan, nor any other person for the passage of its annual budget. According to the statement, “For the avoidance of doubt, the Commission has never given money to the First Lady or anybody for that matter for the passage of our annual budget, neither has NDDC ever failed to pay the salaries of its staff as at and when due”. The NDDC, in the statement, also appealed to politicians

and their agents in the media, to steer clear of NDDC and allow the Commission focus on its mandate of providing lasting solution to the socio-economic difficulties of Niger Delta region. “It is on record and indeed public knowledge that since the advent of the present board, a little over a year ago; the NDDC has shown great leadership, maturity and dynamism in championing and completing hundreds of uncompleted projects rather than awarding new contracts or consultancies. We certainly prefer at this point not to be distracted or dragged into the same ring with politicians, but continue the momentum of sustainable developmental efforts which is now visible on ground to all and sundry,” the statement said.

still coming up with clay soil. Such challenges will invariably lead to variations in the designs,” he said. The NDDC team also inspected the 10.5-kilometre Igbokoda-Orere Ara road, which had been completed and was ready for commissioning. After driving through the 7.3metre-wide asphalted road with side drains, Barr. Benson Amuwa, the representative of Ondo State on the NDDC Governing Board, explained that the road would link Igbokoda, the commercial nerve centre of Ilaje, to Orere Zion, Orere Ara, and several other neighbouring communities. He said that several other communities in the area were looking forward to the commencement of the second phase of the project which would take the road to Orere Ara town and beyond, and thus give the people the full value of the first segment that had been completed. Barr. Amuwa also led the inspection of the 3-kilometre Ugbonla township roads laid with interlocking stones. He said the NDDC has brought life back to the town, which was virtually abandoned when there was no road to access the fishing community.

Community

2015 February, SweetcrudeReports

Measuring the gains of the Jonathan administration

President Jonathan JOHN IYENE OWUBOKIRI

o d e r n democracy as opposed to rule by the elite involves the interplay of all segments of society. The argument for universal adult suffrage is that anybody whose input may be required in the administration of the state and who might suffer a wrong or stand to enjoy a privilege should have a say as to the person or group of persons that administers his input or potentials in that society. As there is rain and sun, light and darkness as well as good from bad so are there folks with poor perceptions of issues of government and folks with a clear perception of issues. There are those who support or promote candidates for elections because of their interests, mainly financial, religious and ethnic. Again, as unfortunate as it is, modern political practice has shown that the masses would be swayed to a decision, not on the fair assessment of a candidate's track record or the track record of his opponent but by the effect the economy and society has had on them, their friends or family. This was the situation Mr. Barack Obama faced in the United States. Inheriting a comatose economy almost on the same scale as the aftermath of the Wall Street crash of the 1920s, Mr. Obama rolled up his sleeves, imposed strict regulations on Wall Street while injecting public funds to bail out the Street, aided the automobile industry into recovery, unleashed an unprecedented fervour into the research of alternative energy sources, pumped funds for the execution of

again, an unprecedented number of capital projects, among many other laudable efforts that have brought America's unemployment down to 5.6% and the GDP up to 5% from 2.6%. Despite these achievements, Mr. Obama almost lost re-election to the same party that crashed the economy with adventurist wars in the Middle East, with exit polls showing the masses argued that the revamped economy did not impact their own households. President Goodluck Jonathan is the one Nigerian leader who alone has established more schools for the North's talakawa, federal universities and airports all over the country than ALL his predecessors put together. According to Nigerian farmers and the former governor of the Central Bank, now Emir of Kano, a fierce critic of the president, President Jonathan's government grappled with and solved the riddle of fertilizer distribution to farmers nationwide. For the first time since the 1970s, nonoil exports, mostly agricultural, out-performed oil exports by $5billion in the

President Goodluck Jonathan is the one Nigerian leader who alone has established more schools for the North's talakawa, federal universities and airports all over the country than ALL his predecessors put together

fiscal year 2013. Brookings Institute, America's most prestigious international auditors and CNN's Focus on Africa say that apart from being the biggest economy in Africa, Nigeria is the 3rd fastest growing economy in the world, behind China and Qatar, with a GDP growth rate predicted at 7% as at the end of 2014. Nigeria has achieved all these under President Jonathan but like Americans, the mischievous “street economists of Nigeria” urge the common man on the street, impacted by the economic changes as in the stabilisation and reduction of prices in the transportation, leisure and telecoms sectors, the a v a il a b ilit y of se v e ra l alternatives of agricultural products and the consequent fall in prices, to believe instead and to align with the inept argument that derides Newton's laws of motion, that the economy has operated on autopilot. For those voters who believe in cognate achievements, a government that has touched all aspects of our social lives and granted us a sustainable democratic culture and environment where Citizen John can refer to the President as “clueless” on national television and sleep peacefully in his own bed, for those who believe that seeds sown which are still germinating shall someday grow into flourishing fruit producing plants, for those who agree with me that nations and economies are nurtured by the deliberate acts of a leader, for those who foresee the bridging of the inequities between the North and the South on account of the hundreds of almajiri schools and federal universities established in the North, for those who graciously accepted the queuing culture introduced by the president's opponent, which is recorded as the only achievement of his government, for those who would courageously call integrity what it is: a laudable human virtue but not an achievement, for those who would graciously thank the elderly gentleman for his many years of meritorious service to our nation but allow him his retirement and peace, Goodluck Ebele Jonathan is your man come February 2015.

E-mail: johniyene@yahoo.com

The Local Content Act, Unemployment and Economic Justice

he development o f a n d experimentation on regional political and economic blocs such as ECOWAS, the European Union, NAFTA, etc and the trend of globalisation, indicate that the concept is far from being acceptable by all. The adoption of the Euro by all EU countries except Britain has not in any way done more for Europe's less privileged countries and EU migration continues to be a hot topic in election debates and European households. The moral of this conundrum is that within national boundaries, governments and people can fair better if they have predictable control of their resources. T h e N i g e r i a n government enacted the Local Content Act ostensibly to give more opportunities to Nigerians in the oil industry than they had been given. Even though Nigeria was coming late into the game (South African companies are by law obligated to advertise a job placement in the South African media and await local interest for 60 days before offering the job to a foreigner) the enactment of the Act was commended. However events and the business practices of Nigeria's oil majors show a total disdain for the Act and its intendments. Nigerian companies have, in breach of the Local Content Act, engaged foreign companies to execute lucrative contracts that could have changed the unemployment statistics in Nigeria. The Joint Venture Partners and other oil companies have continued to award lucrative contracts that could have been executed in Nigeria to foreign elements that profit at the expense of young Nigerian

school leavers. Now, in so far as there is a Local Content Act with specific provisions that promote the award of contracts to Nigerian companies and that mandate companies to employ a minimum level of Nigerians at certain cadres, it would amount to economic injustice for companies to source contractors and workers externally. The Act provided for a Monitoring Board which has the duty

The moral of this conundrum is that within national boundaries, governments and people can fair better if they have predictable control of their resources of monitoring compliance with the Act but the duty falls on all Nigerians to monitor the performances of companies in their domains against the expectations of the Local Content Act. The Board is a government body constituted by government with all the implications of monitoring one's own employer. Most JV companies are owned substantially by the federal government. It is my humble opinion that the failure or success of the Nigerian Content Act would depend a lot on the attitude of those that suffered when it had not been implemented and those that stand to benefit from its provisions and its implementation.

2015 February, SweetcrudeReports