March edition 2015 by Sweetcrude reports

Power sector: A darkling conspiracy hatched by thieving DISCOS P/47

At Afam VI, we maintain 95% availability -Agbajogu P/13

A Review Of The Nigerian Energy Industry March, 2015

VOL 02 N0. 24

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

108

56.07 54.06 44.38 59.46 75.57 85.06 95.98 100.75 105.61 107.89 105.44 104.27 104.15

55.77 U$

106 104 102

Idle Nigerian marginal fields face revocation First Bank, Diamond Bank, UBA, others’ exposure exceeds $1bn

100 98 96 94 92 90 88 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15

World Bank votes $1bn to combat Nigeria’s gas flare

he World Bank has announced plans to work closely with Nigerian officials to curb gas flare from oil fields in the Niger Delta region. The partnership is also aimed at encouraging significant investments in gas-to-power initiatives to further help the country realise its power sector reform process. Under the 10-year deal, Chevron Nigeria will CONTINUES ON PAGE 16

www.sweetcrudereports.com

Swamp rig

Contents

2015 March, SweetcrudeReports

Editor’s note

or marginal fields operators who are yet to develop their assets, the time of reckoning may have come. The Department of Petroleum Resources will, any time from now, commence revocation of all non-performing marginal fields licenses awarded in a 2003 bid round, which incidentally is the nation's first and, up till now, the only marginal fields licensing round conducted. The DPR had served notice of the impending revocation of the licences of the idle fields last year, saying it would carry out the action from March 2015. As we have been told by a ranking official of the DPR, compilation of the list of affected fields has already begun. 21 fields may be affected. The oil and gas sector awaits the industry regulator with bated breath, but the big question though is whether the Federal Government can summon the courage and political will to carry out this action in a period of crucial national elections. Away from DPR and the marginal fields, the Shell Petroleum Development Company of Nigeria has got reasons to celebrate. The leading oil exploration and producing company is giving Nigeria appreciable volume of electricity through a most modern and technology-intensive Afam VI power station, a combined cycle power plant, which, according to its operational manager, Engr. Ben Agbajogu, is

4 8 15 17 20 32 35 38 39 41 42 45

delivering clean electrical energy and eliminating 500,000 tons of CO2 per year. Shell has also launched N1 billion Oloibiri health project to mark Nigeria’s centenary in addition to empowering 105 young entrepreneurs in Ogoniland with N21 million to pursue and promote their businesses. We bring you all these in this edition of your favourite publication. Also in this edition, pipeline vandals are still putting the government under pressure as regards its plan to ensure adequate power supply nationwide. Power generation has again dropped following acts of vandalism on the the Escravos-Lagos Gas Pipeline System. "As we speak, we have only four days that are vandals-free. We have 53 days of vandalism. We have only had four days of free flow of gas without vandalism. That tells you how horrible the situation with vandalism is," a distraught Minister of Power, Prof. Chinedu Nebo, lamented. Could oil traders be benefiting from the current oil price slide? Fitch, the global rating agency, says "yes, they are". The paper you are holding in your hands provides you all the details and more. Thanks for keeping a date with us.

COVER

Idle Nigerian marginal fields face revocation

OIL

Unease in OPEC over volatile oil market

FOCUS

At Afam VI, we maintain 95% availability -Agbajogu

GAS

Pipeline vandalism: Govt plans digitalised surveillance

POWER

Power generation drops again due to pipeline vandalism

FINANCE

Govt paying N117 as subsidy per litre of petrol, kerosene

LABOUR

PENGASSAN demands ‘ practical action’ against oil theft

SOLID MINERAL

Steel manufacturers lament hike in electricity tariff

FREIGHT

ISPS Code compliance level hits 83% -NIMASA

MOTORING

Volvo vows to put first self-driving cars in customers’ hands by 2017

TECHNOLOGY

Combined cycle power generation

COMMUNITY

Shell implements N1bn Oloibiri health project to mark Nigeria’s centenary

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

+234 08060249746

Design/Layout Frontline Concept

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

WEBSITE:

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

2015 March, SweetcrudeReports

Cover Story

2015 March, SweetcrudeReports

YEMIE ADEOYE & KUNLE KALEJAYE

he last days are here for operators of marginal fields who are yet to develop their fields 12 years after they were awarded the assets in a 2003 bid round. The Department of Petroleum Resources, DPR - the Nigerian oil industry regulator - had last year served notice of revocation of licences on all idle marginal fields from this month (March). Sources, who hinted of seriousness on the part of the agency on the matter, told our correspondent that a list of the affected fields was already being compiled with a view to withdrawing the licences. SweetcrudeReports gathered that as it is, the Federal Government, through the DPR, may revoke the licences on 21 marginal fields, with their operators losing all claims to the fields. The Federal Government had in 2003 awarded a total of 30 swamp, onshore and offshore fields to local players in the nation's first and, up till now, the only marginal fields licensing round. The fields were originally recovered from the international oil companies, IOCs, for not developing them. According to Mr. George Osahon, Director of DPR, government had supported these operators by giving them 10 years to develop their assets. "Talking about government support, in 2003 we gave five years to operators to develop these fields. After that we gave another five years and that has expired. "Think about it, if these fields were collected from major operating companies because they did not develop them after 10 years, does it make sense to leave them with these operators? "Section 16 of the law is very clear about that. What will happen when you keep them with Nigerian companies for another 10 years? There is no just need. Something has to happen. We need to move on," said the DPR director.

Swamp rig

Idle Nigerian marginal fields face revocation Local banksâ&#x20AC;&#x2122; exposure exceeds $1bn

Non-performing fields As at March 7, according to information on the DPR website, of the 30 marginal fields awarded in 2003, nine are now producing while 21 are classified as non-producing or idle, meaning they are the ones whose licences are likely to be pencilled down for revocation. Marginal fields in the latter category include Asaramtoru in OML 11 (swamp), owned by

Prime Energy and Suffolk Petroleum; Eremor - OML 46, owned by Excel E&P; Ofa - OML 30 (onshore), owned by Independent Energy and Atala OML 46 (swamp), promoted by Bayelsa Oil and Gas, a company with Bayelsa State government and Senator David Brigidi, a former chairman of Senate Committee on Petroleum, as directors.

the DPR, include Millennium Oil &Gas Company's Oza field in OML 11 (onshore), Network E & P-owned Quo Ibo field in OML 13 (offshore); Universal Energy Resources Ltd's Stubb Creek in OML 14 (onshore) and Tom Shot Bank field in OML 14 (offshore), which is jointly owned by Associated Oil & Gas Services Ltd and Dansaki Petroleum Ltd.

Other idle fields, according to

Also included are Tsekelewu

Nigeria Content Investment Forum

Where prospects meet opportunities

in OML 40 (onshore/offshore), owned by Sahara Energy Ltd and African Oil & Gas Ltd; Ororo field in OML 95 (offshore), which is owned by Guarantee Petroleum and Owena Oil & Gas; Akepo field in OML 90 (swamp) awarded to Sogenal Ltd; Ogedeh field in OML 90 (offshore) operated by Bicta Energy System; Dawes Island

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 March, SweetcrudeReports

Idle marginal fields face revocation

Swamp rig CONTINUED FROM PAGE 4 field (OML 54, swamp) operated by Eurafric Energy; Ke field (OML 54, offshore) awarded to Del Sigma Ltd; Oriri field (OML 88, swamp) awarded to Goland Petroleum; Ekeh in OML 88 (offshore) won by Movido E&P; Amoji field in OML 56 (onshore) awarded to Chorus Energy. The rest are Okwok field in OML 67 (offshore) owned by Oriental Energy; Ubima field (OML 17, onshore) awarded to All Grace Energy; Otakikpo field (OML 11) owned by Green Energy International and Omerelu field in OML 54 (onshore) awarded to Niger Delta Petroleum Ltd. Challenges For operators of the idle marginal fields, the greatest challenge appeared to have been that of sourcing funding. Many of them, allegedly, were also illprepared for the task of developing the fields which explains why after the first five years of grace and an additional five years by the government, they were still unable to do something about developing their assets. The DPR boss, Mr. Osahon,

explained this much at a meeting last year with the marginal field operators, where he identified funding and technical competence as the major challenges of developing the marginal fields. "We know that people who have assets have challenges, but two things affecting them the most are funding, the other being technic al competence and capability for them to operate their assets," he said. Indeed, the marginal field operators were able to raise funds for the purchase of the fields but buckled under the weight of the enormous amount needed to develop the fields. Because of the huge nature of funds required for the marginal fields, local banks could not, on their own, provide all the funds needed for the purchase of the marginal fields, thus requiring the syndication of loans and involvement of foreign banks. One of the operators already producing from its field, Niger Delta Petroleum, for instance, collected $6 million project completion loan from the erstwhile Intercontinental Bank, now Access Bank. This is minus the field purchase fund and initial project finance.

Will govt revoke the licences?

Indeed, the marginal field operators were able to raise funds for the purchase of the fields but buckled under the weight of the enormous amount needed to develop the fields

The big question being asked by oil and gas industry observers is whether the Federal Government will have the courage and political will to recover the idle marginal fields now, especially given that this is an important election period. A credible source at the Ministry of Petroleum hinted that neither President Goodluck Jonathan nor the Minister of Petroleum R e so u r c e s , M r s . D i e z a n i Alison-Madueke has any intention to revoke the licences now. The source explained that before the licences of the nonperforming marginal field operators would be revoked, the DPR has the statutory duty to compile and forward the list of performing and nonperforming marginal fields to the Minister of Petroleum Resources with clear recommendations. The minister in-turn would present the list to the president, who would give the final instructions. Findings, however, revealed that the current political atmosphere in the country

might force the president to give additional life-line to these operators. Another source among the marginal fields operators was confident that the president would not touch the recommendations made by DPR and the Minister if they recommended a recovery of the marginal fields. "I can assure you that the recommendation of DPR would not be touched by the Minister or the President until after the elections," said rather confidently, adding: "As we speak, some of the owners of these idle fields are working hard to make sure that their assets are not recovered by DPRâ&#x20AC;?. But, a reliable source at the DPR told SweetcrudeReports that the March deadline still stands. "As far as we are concerned at the DPR, the deadline still stands. Ours is to make the recommendations, and we will do that. Whatever happens after that, we have done our work,â&#x20AC;? the source asserted. Success story of producing

CONTINUES ON PAGE 6

Cover

2015 March, SweetcrudeReports

Oil rig

Marginal fields face revocation CONTINUED FROM PAGE 5 marginal fields Data obtained by SweetcrudeReports from DPR website indicated that nine marginal fields have commenced production, including Egbaoma field OML 3 8 ( o n sh o r e ) a wa r d e d t o Platform Petroleum; Uquo, OML 13 (onshore) operated by Frontier Oil Ltd; Ajapa, OML 90 (offshore) owned by Brittania-U Nigeria Ltd; Umusadege, OML 56 (onshore) operated by Midwestern Oil & Gas and Suntrust Oil Ltd as well as Umusati, OML 56 (onshore) awarded to Pillar Oil Ltd. Others are Ebendo field, OML 56 (onshore) operated by Energia Ltd and Oando; Ebok field, OML 67 (offshore), belonging to Oriental Energy and Ogbelle field OML 54 (onshore) operated by Niger Delta Petroleum, a subsidiary of Niger Delta Exploration and Production Plc. SweetcrudeReports was able to speak with the Managing Directors/CEOs of two of the producing marginal fields, Engr. Thomas Dada of Frontier

Oil Ltd and Dr. Layi Fatona of Niger Delta Exploration & Production Plc, who shared their companies' success stories. According to Dada, who said his company was successfully producing gas from the Uquo field in OML 13 (onshore), perseverance, self believe and professionalism were the main factors in their success. "I think we have been luck in th e se n se t h at w e h a ve persevered, we believed, we've been very professional in the way we approached the development of our field and we have been able to identified the potential for gas development in Nigeria. When others ran away from that sort of challenge, we stuck to it and turned it into a success story," he said. Dada added: "As Frontier Oil, we are very focused on developing gas for domestic use and we want to develop oil as well so that we will be an integrated oil and gas company, and we believe that by doing work professionally, with integrity, we will fully grow in the oil and gas space in Nigeria.

As Frontier Oil, we are very focused on developing gas for domestic use and we want to develop oil as well so that we will be an integrated oil and gas company, and we believe that by doing work professionally, with integrity, we will fully grow Frontier Oil in the oil and gas space in Nigeria "For other marginal fields operators that are not producing, they will know their fate in March, 2015 whether the government will decide or not to revoke their licences. "My prayer is that government will look at each case individually, based on its own merit. By the end of March we will know which marginal fields have been retained and which ones have been lostâ&#x20AC;?. Dr. Fatona of Niger Delta

Exploration, on his part, said the success story of his company was and is still driven by the vision of one of the company's founders, the late Aret Adams, the first Group Managing Director of the Nigerian National Petroleum Corporation, who died in 2012. He quoted the former NNPC boss as saying, "I am a force for good. I defy the odds. I go for new standards and I am continuously stepping up," explaining that Mr. Adams

disclosed the vision on August 2, 2002. He said putting together the pioneering marginal field team, both technical and financial partners, and carrying the host community along from the conceptualisation stage of the field to when first oil was produced yielded the desired result. "As of this morning (23rd February, 2015), Ogbele (his company's marginal field) has produced nine million barrels of oil. We have been able to delivere 19.024 billion standard cubic feet of gas to Bonny NLNG since November 27th, 2012," he said. "In 2014, Niger Delta Petroleum contributed 1 percent of the total gas delivered and processed by NLNG. We also refined and sold up to date 45 million litres of diesel into the Nigerian domestic market. "We are presenting the success story of our company as a working model for and from the Nigerian petroleum landscape. We are ready to flourish as a Pan- African corporate vehicle

CONTINUES ON PAGE 7

Cover

2015 March, SweetcrudeReports

Marginal fields face revocation

Oil rig CONTINUED FROM PAGE 6 f or o i l a n d g a s r eg i on a l development," Fatona stated. But, his Niger Delta Petroleum also owns the idle Omerelu field, which licence may be up for revocation, according to DPR’s list. Fatona said there are ongoing efforts to evaluate the field and to commence production from it, adding that a tenfold factor success story of Ogbele and other producing fields could be applied. “Our next asset to be developed is Omerelu filed 54. Current evaluation of the field is based on the studies conducted by Geotrex Systems Ltd and Robertson Research in 1995 and September 2006. We have signed farm out agreement with Chevron and commenced field development plan in 2014," he stated. Local banks in trouble Currently, there are indications that some commercial banks operating in the country are in deep trouble following the move by the DPR

to recover the non-performing marginal fields. A DPR source confided to our correspondent that not a few of the marginal fields’ licensees got local banks to fund the purchase and development of their fields. Due to non-performance by the marginal fields, these licensees can no longer meet their obligations to the banks, leaving the banks hugely exposed to the tune of billions of dollars. Sweetcrudereports exclusively gathered that companies like First Bank, Fidelity, UBA, Access Bank, Diamond Bank and Skye Bank may have been involved in the failed deals, with some of them having exposures as high as US$1 billion. The DPR source, who craved anonymity, revealed that First Bank is the most exposed of all the above mentioned banks and that the fear being expressed by some stakeholders is that the bank may begin to have difficulties in meeting its obligations to shareholders and depositors. When contacted, First Bank’s

spokesman and Head, Media and External Relations, Mr. Babatunde Lasaki, was evasive on the exposure of the bank. He rather stated via text that the bank is fully capable of meeting its commitments to depositors and shareholders. According to him, First Bank has enough liquidity by virtue of its compliance to the Central Bank of Nigeria’s liquidity requirement. He said: “The CBN policy has ensured that banks are adequately capitalised for the businesses they undertake with the increase in CRR, the mandatory payment of 30 percent MPR rate, as well as attaching a risk weight of 125 percent to Oil and Gas exposure of banks, with 20 percent or more of its portfolio in the sector and First Bank is among this.” “Also, FirstBank currently have enough liquidity having complied with the liquidity requirement of the regulator in addition to the mandatory deposit with the CBN which currently stands at N560 billion. There has never been a case of default in meeting our obligations to depositors,

The CBN policy has ensured that banks are adequately capitalised for the businesses they undertake with the increase in CRR, the mandatory payment of 30 percent MPR rate, as well as attaching a risk weight of 125 percent to Oil and Gas exposure of banks, with 20 percent or more of its portfolio in the sector customers or staff and our nine months financial ending September 2014 showed that we made significant progress with a profit of N74 billion compared to N70 billion for the corresponding period of previous year”. As at time of going to press, Diamond Bank was yet to respond to our enquiries.

Spokesperson for the bank, Mr. Mike Ikechukwu, assured our correspondent of getting back to him with the banks' official position, but he did not. Efforts to reach contact persons in the other banks mentioned in the marginal field quagmire for their reactions were unsuccessful.

Oil

2015 March, SweetcrudeReports

Unease in OPEC over volatile oil market

espite the Organisation of the Petroleum E x p o r t i n g Countries, OPEC, appearing to show any sign of unease so far over the slide in crude oil prices, the 12member organisation may well be under deepening unease about the crisis, going by the account of Nigeria’s Minister of Petroleum Resources and current OPEC president, Mrs. Diezani Alison-Madueke. Mrs Alison-Madueke disclosed recently plans by the county to call an extraordinary meeting of OPEC if crude oil prices slip any further. Speaking in an interview published by the Financial Times, Alison-Madueke expressed growing alarm over the impact of oil’s collapse on oil-producing economies, such as Nigeria.

“We’re already talking with member countries,” said Alison-Madueke in the interview. As OPEC president, she is responsible for liaising with member countries and the producer group’s secretarygeneral in the event of an emergency meeting," she said. She noted that, If the price “slips any further it is highly likely that I will have to call an extraordinary meeting of OPEC in the next six weeks or so." Almost all OPEC countries, except perhaps the Arab bloc, are “very uncomfortable" about the continuing slide, the minister added. The comments are the first public sign of the deepening unease about the oil crisis since Venezuela and Iran last month pushed for the cartel to cut output in a bid to reverse the more than 50-percent drop in prices since June last year. In November, the 12-member group chose to hold production

at 30 million barrels a day. The next official meeting is scheduled for June. Global benchmark Brent oil prices briefly rose by more than $1 a barrel on the comments, reversing earlier losses, but quickly sank again as dealers doubted whether there was any scope for rapid action given core Gulf OPEC members led by Saudi Arabia have given no sign they are ready to curb production.

As at the end of February, UK's Brent crude rose $2.53 to $62.58 a barrel. February's 18% gain was the biggest monthly percentage rise since May 2009. US crude rose $1.59 to settle at $49.76, managing a 3.1% February gain. US crude gains have been curbed by rising crude oil inventories in the country, up 8.4 million barrels a week before February ending, according to government data. Nigeria “obviously needs more money for its oil, but if the Saudis, who control one third of OPEC production, do not go along, what can it do?”

Mrs Alison-Madueke necessitated by uncertainty over oil prices and the need to address the challenge an unreliable benchmark price would pose in the implementation of the budget, which was originally based on 75 dollars benchmark by the executive, before it was moved to $65 and then to $52 by the Senate.

Speaking in an interview published by the Financial Times, Alison-Madueke expressed growing alarm over the impact of oil’s collapse on oil-producing economies, such as Nigeria said James L. Williams, energy economist at WTRG Economics in London, Arkansas. Nigerian Senate recently reduced the oil benchmark price for the country's 2015 budget from $65 dollars to 52 dollars. The reduction came after months of dilly-dallying

As a result of the oil price slide, economic experts are expecting a drop in the nation's oil revenues with most of the Ministries, Departments and Agencies unlikely to execute any reasonable capital project d u r i n g t h e y e a r .

IEA foresees oil prices partial rebound

he International Energy Agency, IEA, says global oil prices will recover only partially from spectacular lows, which are unlikely to spur economic growth or kill off United States shale gas production. The IEA said in its five-year forecast that crude prices will recover from around their current range of $50-60 per barrel, but will remain well below the level of more than $100 per barrel seen before the slump began last June. “While there have been drops and price corrections roughly every 10 years since the 1970s, there has never been a situation like we are facing today,” IEA’s Executive Director, Ms. Maria van der Hoeven, said in London following the release of the report. “The global oil market looks set to begin a new chapter of its history, with markedly changing demand dynamics, sweeping shifts in crude trade and product supply, and dramatically different roles for Organisation of the Petroleum Exporting Countries, OPEC, and non-OPEC producers in regulating upstream supply,” the report said. Ample supply and subdued demand caused prices to fall as much as 60 percent, but the IEA said market rebalancing could occur “relatively swiftly” with increases in inventories halting mid-year and the market tightening. However the IEA foresees “prices stabilising at levels higher than recent lows but substantially below the highs of the last three years.” The sharp fall in oil prices has cheered oil-consuming nations as lower fuel prices usually translate into stronger economic growth.

2015 March, SweetcrudeReports

Oil

2015 March, SweetcrudeReports

Oil rig

New Nigerian discoveries boost ExxonMobil reserves

xxon Mobil has replaced by 104 per cent its 2014 production by adding proved oil and gas reserves totalling 1.5 billion oil-equivalent barrels, including a 162 per cent replacement ratio for crude oil and other liquids. According to the company’s chairman and chief executive officer, Rex Tillerson, ExxonMobil’s diverse global portfolio of attractive opportunities puts it in a unique position to execute its strategy to identify, evaluate and develop new energy supplies. “Our ability to achieve an industry-leading record of long-term reserves replacement is made possible by the size and diversity of ExxonMobil’s resource base along with its project execution and technical capabilities,” he said.At yearend 2014, ExxonMobil’s proved reserves totalled 25.3 billion oil-equivalent barrels,

which was made up of 54 per cent liquids, up from 53 per cent in 2013, and 46 per cent natural gas. Liquid additions during 2014 totalled more than 1.2 billion barrels, or 162 per cent of production, and natural gas additions totaled approximately 300 million oil-equivalent barrels for a 42 per cent replacement ratio. During 2014, ExxonMobil added 3.2 billion oilequivalent barrels to its resource base, driven primarily by resource additions in Nigeria Argentina, Canada, Tanzania and the US. The additions include continued success in by-thebit exploration discoveries, undeveloped resource additions and strategic acquisitions.? ExxonMobil’s by-the-bit conventional exploration success in 2014 included discoveries in Nigeria, Argentina, Australia, Norway and Tanzania.

Overall, the corporation’s revisions, production, and resource base totalled more asset sales. than 92 billion oil-equivalent The resource base includes barrels at year-end 2014, proved reserves and other taking into account field

discovered resources that are expected to be ultimately r e c o v e r e d .

In honour of Aret Adams, NNPC's first GMD

il and gas industry players and stakeholders as well as captains of industries gathered recently in Lagos in honour of a Nigerian industry great, the late Mr. Godwin Aret Adams, a former Group Managing Director, GMD, of the Nigerian National Petroleum Corporation, NNPC, who passed on, in August 2002. The event was the 12th edition of the Aret Adams Annual Memorial Lecture, which featured two guest speakers, the Group Executive Director (Gas and Power) at the NNPC, Dr. David Ige, and the Managing Director/CEO of Frontier Oil Limited, Engr. Thomas Dada. Organised by the Aret Adams Foundation, the 2015 lecture had as theme, “Gas: An Engine of Growth For Nigeria”. Mr. Akin Jokojeje, programmes coordinator of the Foundation, said the Foundation has as its aim, the promotion of policy formulation and building of educational capacity. He said the annual lecture series was

established in honour of the late NNPC chief executive officer because of his contributions to Nigeria's oil and gas industry and the nation’s e c o n o m y i n g e n e r a l . Aret Adams was the first GMD of the NNPC (1988 to 1990), and later Special Adviser on Petroleum Resources to former Head of State, General Abdulsalami Abubakar. Jokojeje disclosed that the National Energy Policy delivered to the Federal Government in April 1980 was formulated by the late Aret Adams and that it was him who re-energised negotiations that led to the successful execution of shareholders' agreements for the execution of the Nigeria Liquefied Natural Gas, NLNG, project in 1989, among many others achievements. According to him, the Foundation has institutionalised the Aret Adams Professorial Chair at the University of Port Harcourt in collaboration with the Shell Petroleum Development Company of Nigeria.

Oil

2015 March, SweetcrudeReports

1 1

Market volatility:

Nigeria crude shows strength …Attracts higher values on strong margins

Oil vessel

igerian light sweet crude grades are trading higher i n t h e international market, according to oil traders, who also say the nation's crude values have increased as higher refining margins supported by healthy light end and middle distillate cracks boosted the West African crude market. Specifically, activity reportedly picked up about two weeks ago once the March term allocations were finalised modestly in the past week and demand for the light sweet grades like Akpo and Agbami was very strong initially. Qua Iboe was assessed at Dated Brent plus $1.30 per barrel on Monday last week, the highest since November 20, 2014, Platts data showed. Traders also said recent March stems were traded close to or higher than Dated Brent plus $ 1 . 5 0 p e r b a r r e l . Differentials for Nigerian light sweet crude grades such as Akpo and Agbami had risen by more than a $1.30/b from previous trades in February. The main reason for the jump in prices for Agbami and Akpo, according to the traders, was due

to buoyant demand caused by widening naphtha crack spreads. Market sources said Agbami for March had traded between Dated Brent minus $0.70/b and minus $0.40/b, or $1.50/b above the level of the February program. "Undeniably, the market is improving, especially if you compare it to the levels at which the grades traded for the February program," a trader said. "It is specifically the Nigerian light sweet grades which are

It is specifically the Nigerian light sweet grades which are trading much higher. Margins in Europe are much better and the naphtha crack has improved considerably," he added

trading much higher. Margins in Europe are much better and the naphtha crack has improved considerably," he added. Traders said there were now approximately 15-20 March Nigerian stems available which is a much shorter overhang than the Nigerian market had experienced recently. Also, with prompt margins holding well, traders said they expected some prompt demand. Another supporting factor was Suezmax freight out of West Africa which had actually come off compared with three weeks ago, and this was opening the arbitrage to Europe, encouraging more demand from the Mediterranean and Northwest European refiners.

'Army committed to end oil theft permanently’

he Nigerian Army has reiterated its commitment to put an end to oil theft, pipeline vandalism and illegal oil refining in the country.

has been reached on what to do to permanently put an end to illegal refineries in the country.

The Commander, 2 Brigade and Sector 2 Joint Task Force Operation Pulo Shield, Brig. Gen. Koko Essien, stated this while fielding questions from journalists in Port Harcourt.

Brig. Gen. Essien said he would not disclose details of the strategies the Joint Task Force, JTF, would be employing to put an end to oil theft, but restated that the task force was winning the war against the menace.

The Brigade Commander, who said he has gone for a review of oil pipelines belonging to the Shell Petroleum and Development Company, SPDC, and those belonging to the Nigerian Agip Oil Company, NAOC, along with his men and security of the companies, said agreement

“Pipeline vandalism and oil theft have reduced drastically, though oil thieves have re-strategised in such a way that they will blow up pipelines to make sure that if they don’t have the oil, the government also will not have the oil. That is what we see now in the creeks though we have

developed strategies to guard against that. “Secondly, the JTF has been fighting to destroy illegal refineries in the creeks because if we can put those refineries out, a whole lot of them (oil thieves) will not be able to steal the crude since they will not be able to refine it,” he said. Essien, who resumed office in Port Harcourt few weeks ago, lamented that oil thieves have become highly sophisticated to the extent of carrying out underwater welding to vandalise pipelines and steal oil, said the military would also restrategise to deal with the emerging threat.

Oil

2015 March, SweetcrudeReports

‘We're paying price of overdependence on oil’

igeria is currently paying the price of its o v e r dependence on oil as a major source of revenue, Minister of Finance and Coordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala, has said. The minister made the assertion in Abuja as she expressed fears that the nation's domestic debt will rise this year as it borrows more to meet a shortfall in revenue caused by the plunge in the global price of oil. According to her, the amount to be borrowed will be dependent on the final scenario adopted after talks with the National Assembly on the oil price benchmark for the 2015 budget. “Then we’ll know exactly how much more debt that we’ll raise," she said. "Our income is still coming from a source that is not diversified. Because of the drop in oil prices we will have a difficult year,’’ OkonjoIweala stated. She blamed lawmakers who had opposed her moves to use a lower oil price for budgeting and save the rest. "A year ago before the fall in prices we said that we should save but we were not listened to. Today they’re saying we didn’t save," she said, explaining that the additional domestic debt will go toward paying the salaries of government employees, adding that, ‘‘You cannot throw people out on the streets.’’

Nigeria, Africa’s biggest oil producer, depends on crude exports for 70 percent of government revenue and more than 90 percent of

A year ago before the fall in prices we said that we should save but we were not listened to. Today they’re saying we didn’t save," she said, explaining that the additional domestic debt will go toward paying the salaries of government employees, adding that, ‘‘You cannot throw people out on the streets

Okonjo-Iweala

foreign income, making it vulnerable as prices plummeted more than 50 percent since last year’s peak in June. Pressure has mounted on the naira, which has weakened 7.5 percent this year, the most among 24 African currencies recently surveyed by Bloomberg. Nigeria is also facing rescheduled presidential elections on March 28, and had trimmed spending by eight percent and reduced the proposed benchmark oil price twice, before settling for $65 a barrel in December. Planned capital spending of 634 billion naira ($3.2 billion) this year is 15 percent of the total budget of 4.36 trillion naira, with recurrent spending, including salaries and overheads, representing about 80 percent.

Chevron sees reserves slip

S supermajor Chevron said its oil and natural gas reserves fell by 1% last year largely due to the sale of its stake in a Chad oilfield. The company posted proved reserves of 11.1 billion barrels of oil equivalent as of the end of 2014, Reuters reported. At the end of 2014, about 20% of Chevron’s reserves were in Kazakhstan and 19% were in the US, the largest single areas of holdings, Chevron said. Last year, Chevron sold its stake in an oil concession and pipeline system in Chad’s Doba basin to the country’s government for $1.3 billion. The exit from the project, led by ExxonMobil, was largely seen as a way to refocus cash towards Chevron’s prolific Permian basin holdings in Texas, one of the top unconventional plays in the world. While Chevron has invested billions of dollars in global energy projects in recent years, investors have grown anxious as smaller independent rivals, including Whiting Petroleum and Continental Resources, have successfully developed US shale plays. More than half of Chevron’s 1.5 million Permian acres do not require royalty payouts to landowners, an advantage over rivals. Chevron is trying to lift Permian production to 250,000 barrels of oil equivalent per day by 2020.

Oil

2015 March, SweetcrudeReports

IEA foresees oil prices partial rebound

Petroleum Exporting Countries, OPEC, and nonOPEC producers in regulating upstream supply,” the report said. Ample supply and subdued demand caused prices to fall as much as 60 percent, but the IEA said market rebalancing could occur “relatively swiftly” with increases in inventories halting mid-year and the market tightening. However the IEA foresees “prices stabilising at levels higher than recent lows but substantially below the highs of the last three years.” The sharp fall in oil prices has cheered oil-consuming nations as lower fuel prices usually translate into stronger economic growth. The IEA cautioned that the net impact “will be more modest than might be expected” because of a lingering hangover from the global economic crisis in 2008 and weak investment. “Oil price declines against a backdrop of slowing demand growth will not be as potent an economic stimulus as they

would be in a context of strong underlying income gains,” said the agency.

this year to 3.5 percent from the 3.8 percent it predicted in October.

It also noted that despite the oil price decline the IMF last month revised downward its forecast for global growth

The drop in oil prices was accelerated by OPEC’s decision in November not to cut production, saying it did

not want to cede market share. Analysts saw this as an attempt to drive out higher priced competitors, particularly US shale or “LTO” oil output that has been the largest source of new supply to the market in recent

Experts urge govt to revive refineries, check importation

hree financial experts have urged the Federal Government to urgently revive the country’s refineries so as to cut the country's dependence on importation of petroleum products. They said functional refineries and an efficient tax system were needed in the short term to cushion effects of dwindling oil prices. A don, Sam Goddorms of the University of Jos, said by-products from functional refineries would create wealth because most of the by-products were imported. "We should in a short time quicken the infrastructure needs of the Niger-Delta sub region as they are potential customers of petroleum products,” he said. The former Commissioner, National Insurance Commission, NAICOM, Mr Bailey Oladipupo, said government could

also invest more in cotton production. "Investing more in cotton production, in which we have a better comparative advantage, will turn the economy round in the long run. "Focusing on some cash crops, where we have strength, is sacrosanct if the nation’s economy must develop,” he said. The Chief Executive Officer, Precious Confectioneries, Lagos, Mrs Precious Aremu, said government should also encourage more Nigerians to venture into entrepreneurship. "In spite of the number of Nigerians who are into entrepreneurship, more people are still needed to produce things that we often import. “Government should sponsor young people to acquire skills on items which will add value t o t h e e c o n o m y . "Learning new techniques of biscuit production can generate employment for m a n y y o u t h s , ” s h e s a i d .

Oil

2015 March, SweetcrudeReports

Oil thieves’ camp

Navy hands over 11 suspected oil thieves to EFCC

he Nigerian Navy has handed over 11 suspected oil thieves to the Economic and Financial Crime’s Commission, EFCC, for prosecution. Navy Captain Noel Madugu, Commanding Officer, Forward Operating Base, Brass, made the disclosure in Yenagoa, Bayelsa State, saying the suspects were on board the vessel “MT Redemption’’ which was arrested by Nigeria Navy Ship, NNS, in B a d a g r y . The commander said that the vessel was subsequently transferred to the Naval Base in Brass, which is saddled with the responsibility of handling oil theft-related matters where the impounded vessel is currently held. Madugu said the vessel was laden with some 100,000 litres of stolen crude which weighed about 1,000 metric tons, adding that the captain of the ship on interrogation, claimed that the content of the tanks and drum was bitumen. “The Captain of the vessel said that the cargo in the drum was

bitumen but what we discovered was petroleum product suspected to be crude oil. “We subjected the products to laboratory tests on Jan. 20, 2015 at Nigeria Agip Oil Company laboratory and it turned out to be crude oil. We have handed the suspects to the EFCC for further investigation and prosecution. “A Senior Detective, Abraham Rege of the EFCC, was here at the handing over ceremony performed on Feb. 23, 2015,” M a d u g u s a i d . He said that MT Redemption belonged to Omar Oil Agency Ltd., a firm based in Tema, Ghana and owned by one Alhaji O m a r S u l l e m a n . Madugu, who said the captain and crew members are all Nigerians, added that MT Redemption concealed the products in some external tanks comprising of 5×1000 litres container and 28 drums on the main deck. He reiterated the command’s zero tolerance for oil theft and warned anyone contemplating disrupting the forthcoming elections to desist or have themselves to be blamed.

The Captain of the vessel said that the cargo in the drum was bitumen but what we discovered was petroleum product suspected to be crude oil.

The commander also urged the people to give the Navy useful information to clamp down on oil theft and illegal oil bunkering.

Six contractors sued in Brazil's 'Operation Car Wash" scandal

ix construction and engineering groups are under prosecution in Brazil in lawsuits filed in connection with a contract-fixing, bribery and political kickback scandal at state-run oil company Petrobras. Brazilian prosecutors are seeking 4.47 billion reais ($1.55 billion) in damages under in relation to the scandal widely known in the country as ' O p e r a t i o n c a r w a s h ' . The five lawsuits, filed in federal court in Brasilia, are against Camargo Correa, the Brazil unit of Japan’s Sanko; Mendes Junior Engenharia; OAS; Galvao Engenharia; and Engevix Engenharia, the federal public prosecutor’s office, known as MPF, said in a statement seen by Reuters on Friday. The lawsuits also name 13 of these companies’ subsidiaries and 28 of their executives as

defendants, the news wire said. All the companies except Sanko are Brazilian. Camargo Correa and Sanko are being sued together, the rest of the construction and engineering groups are being sued individually. The lawsuits seek to recover 319 million reais in lost state funds and 3.19 billion reais in damages and to impose a civil penalty of 959 million reais. The cases stem from what criminal prosecutors say was a scheme where the construction companies and their executives conspired with Petrobras executives to overcharge for contracts. Much of the excess was then kicked back to Petrobras executives, politicians and political parties as bribes and illegal campaign contributions in a scandal known as Operation Car Wash

Focus

2015 March, SweetcrudeReports

At Afam VI, we maintain 95% availability - Agbajogu

ngr. Ben Agbajogu is Operations Manager at the Afam VI power station, a major source of electricity for Nigeria's national grid. In this interview with MKPOIKANA UDOMA, Agbajogu speaks on operations at the power plant, owned by Shell Petroleum Development Company, SPDC, as well as on the challenges of power generation, among other issues

Excerpts: Afam VI power plant is a major source of power for the country. What gave SPDC the courage to embark on such ambitious project? We saw a government that had an aspiration to get the power sector on track, and we keyed into that aspiration. We had an understanding with the Federal Government of Nigeria under the leadership of then President Olusegun Obasanjo, to contribute to government's aspiration in the power sector which we saw as key to national development. So, as part of that commitment to supporting development of the economy of Nigeria and the Niger Delta in particular, in 2005, Shell Petroleum Development Company of Nigeria decided to build a 650MW combined cycle power plant, and it was awarded to Daewoo Engineering and Construction Nigeria Limited. The plant is located at Okoloma village, 30km North-East of Port Harcourt in Oyigbo Local Government Area, Rivers State. Originally, there was an existing Afam IV, before we built ours (Afam VI). The project scope also included the provision of a 240Mscf/d gas plant at Okoloma and 6 wells to supply fuel for the power station, and additional gas for sale to the Nigeria Gas Company (NGC). The Afam VI power plant takes roughly 9096Mscf/d, while the excess gas is delivered into the eastern domestic gas network for other users through the NGC system. What is combined cycle power plant, and how is Afam VI different from other power plants? As I said, it is a combined cycle power plant, combined cycle in the sense that there is a gas turbine that takes gas to run, and when it runs, the heat from that unit traditionally goes into the atmosphere at a very high temperature, but in our own design, we decided that we will

not release that gas at that temperature into the atmosphere. Rather we will recover it and use it to generate high pressure steam (waste heat) and put it into another system generator, which delivers additional 200MW. This is not common in Nigeria; because the traditional (thermal) power plants will just consume that gas, generate power and waste the heat. So, you can see that the technology we have is the best to recover the heat, and use it to generate a n o t h e r 2 0 0 M W . Afam VI is made of three gas turbines of 150MW each and a steam turbine of 200MW, which is equal 650MW installed capacity combined cycle gas turbine power plant, which contribute between 15-20% electrical power to the Nigerian n a t i o n a l g r i d . What is the operational mode of Afam VI like? Because electricity cannot be stored on the grid, electricity is generated as people demand and

Afam power plant

Afam VI is made of three gas turbines of 150MW each and a steam turbine of 200MW, which is equal 650MW installed capacity combined cycle gas turbine power plant, which contribute between 15-20% electrical power to the Nigerian national grid because of that, when there is a low demand in the grid we will run the plant only with the gas turbines which we call simple cycle, and during this period, that waste gas we donâ&#x20AC;&#x2122;t recover it, we release it into the atmosphere because the demand is low and it happens often. But

the plant's operating mode is the combined cycle mode where we recover the heat and use it to generate additional megawatts. May we know the number of jobs created so far by the SPDC through this power

plant, as related to the Nigerian content policy, as well as the plantâ&#x20AC;&#x2122;s contribution to human development. During the construction phase of this plant, we employed 2,100 people and these were community people and people within the Oyigbo Local Government Area, primarily our host communities and other people around the project area. Now at the operation phase, we have almost 75 workers from our host communities - Okoloma and Afam - working on that plant now. 62 are unskilled workers and 13 are skilled workers. But, the original equipment manufacturer who has the equipments we are using is a different contractor, and during various inspections, he takes 3040 workers to do his job. So you can see that the bulk of the activities we are doing on Afam

VI power plant is by Nigerians. The number of experts there are not many, few of them are needed to transfer the knowledge to Nigerians and we have a structure in place to take over from them in the next 3-4years, which is part of our commitment to local content development. The gap we face is the gap of human resources to man the sector, and our graduates that come out of the universities have little or no experience, and so for you to develop a competent person in the industry, it takes not less than 5 years, to get somebody in the position where he or she can deliver. For us to close that gap, and as part of our delivery and commission phase, we are committed to training 30 youths of engineering discipline from our host communities. We have done the first batch of 15 youths in a 24-month of intensive

CONTINUES ON PAGE 14

Focus

2015 March, SweetcrudeReports

say megawatts or kilowatts because those are just capacity, but kilowatt hour or megawatt hour is what has actually reached the consumers. But you know we are not generating directly to consumers, we generate to the Transmission Company of Nigeria (TCN), and the TCN decides where the power goes. So, with the installed capacity of 650MW combined cycle gas turbine power plant, we have three of 150MW gas turbine generators and a 200 MW steam turbine generator. At base load, the Afam VI generates 650MW electrical power to the Nigerian national grid, increasing the current power supply to the nation by 1 5 % t o 2 0 % .

CONTINUED FROM PAGE 13 training, including one month of classroom work oversea to study about operations and maintenance of combine cycle power plants. Before we could finish training them, all of them have gotten employment in the industry. We have commenced the second batch. We have just finished the selection process and this month, they are mobilising to site, to commence their hands-on training, to refresh their academic knowledge and thereafter go for one month oversea training, and then practical experience on how they can efficiently man and operate a power plant. We are training them and also paying them monthly stipends; the intention is to grow them in the industry, to work in Nigeria or outside the country and contribute to Nigeria. They are all from our 16 host communities under the General Memorandum of Understanding (GMoU) cluster. We are also working with the academia to train IT students on the industry so that as they are coming out, they already have some knowledge to move into the industry and make their own contributions. How does the power plant contribute to the capacity building of host community contractors? Almost all the local services which the main contractors or the company is not doing, are all subcontracted to the local community contractors, and we drive their performance, we drive them to work as we work. Doing performance management and making sure that they work as t h e y s h o u l d w o r k . What are your sustainable development contributions to your host communities? During the project phase, there were lots of community development and infrastructure we put on ground. We built town halls, roads and engaged in rural electrification. At the time we were to move into site, the communities were in blackout. There was an existing power network though, but it was not working, power situation in the communities was in a shamble. So, we didn’t just go in to start putting poles and transformers, rather we did electrification study of 16 communities, because EIA (Environmental Impact Assessment) study of the Afam Power Plant/Okoloma gas plant shows that we will impact on 16 communities (as per government regulations) during the construction and the operation phases. So, we did an electrification study of these communities to understand their immediate electrical need and then installed a capacity that will take the community for 10 years. In Afam

You talked about the plant's contribution as a clean energy source. Can you expatiate on that? Shell’s Afam VI is registered as a clean development mechanism project with the United Nations executive board for climate change. In the course of our business, we are eliminating 500,000 tons of CO2 per year. Ordinarily, a power plant of that size, without being registered as ours, will emit even more than that volume of CO2. That is why I said we are delivering clean electrical energy. If we have other

Afam power plant

‘At Afam VI, we maintain 95% availability’ and neighbouring communities today, there is almost a 24-hour power supply, though we didn’t power them from our power plant direct, we hook them on the national grid on the basis that when we take the plant out for maintenance, they wouldn’t b e o n b l a c k o u t . Currently, we have given five secondary school scholarships to Ayama and Okoloma indigenes. What is the operations objective of Afam VI power plant? Having built a plant, we said we will safely operate and maintain the plant to give Nigerians clean electrical energy. Remember not all power plants in the county are giving you clean electrical energy; because they are giving you electricity and also damaging the environment. But ours is that we give you light and we don’t harm the environment, which is our main objective here. We operate with due regards to the health of our people, the community people, our workers, safety of our workers, safety of

We are also working with the academia to train IT students on the industry so that as they are coming out, they already have some knowledge to move into the industry and make their own contributions the equipments and less harm to the environment and also mange our sustainable development requirement. How is the plant performing, in terms of availability? Again, Afam VI Power Plant is the biggest combine cycle power plant on the Nigerian grid, and because Afam VI is the second largest power plant on the Nigerian grid - following Egbin power plant - we are maintaining 95% availability, because if we sneeze (not available) the grid is in trouble. And for us to achieve that 95%

availability, we have got to achieve a high level of maintenance execution compliance. That means anything that needs to be maintained, we must achieve it more than 98% so that we can achieve more than 95% availability, which is what we a r e d r i v i n g a t . What would you say are the achievements and contributions of the plant to the Nigerian economy? From the time we first pushed power to the national grid till today, we have generated over 18 trillion watt-hours. We don’t

power plants like Afam VI generating power in Nigeria, our environment will be very clean. All these said, does a power plant such as Afam VI face any challenges? In anything a person does in life, there are challenges, but, the issue is how you are dealing with those challenges. Some of the challenges are under our control, but majority of the challenges are outside our control. A typical example is the transmission constraint; most times we are not able to deliver all the power that we generate to the grid because the transmission capacity is not there. Though the Federal Government is doing a lot through the NIPP (National Integrated Power Projects), but it is slow. Effort is going on though to build a transmission line but acquisition on way-leave can take years, but I believe we will be there. So, most times we don’t deliver all the power that is available and we are also working with the Transmission Company to accelerate new and existing transmission network expansion works to make the grid robust.

Gas

2015 March, SweetcrudeReports

Pipeline vandalism: Govt plans digitalised surveillance

Oil pipeline KUNLE KALEJAYE

he Federal Government plans to embark on electronic monitoring of pipelines and other facilities transporting gas to power plants across the country to curb incessant pipeline v a n d a l i s m . ? Minister of Power, Prof. Chinedu Nebo, who disclosed this at the commissioning of the new 220-megawatts turbine at the Egbin Power Plant in Lagos, said vandals were deliberately frustrating government efforts at achieving previously-targeted power generation capabilities with their nefarious activities. According to him, most of the power supply in the country comes from gas-based power plants, accounting for about 70 per cent of power with 30 per cent coming from hydro sources. Oil thieves, vandals who break into our pipelines make it difficult for Nigerians to benefit from what this government has done. “Electronic gadgets are being installed to ensure that at any point of disruption our security forces will be alerted and know how to forestall it,'' he said.

He added that vandalism has become one of the biggest challenges in the energy industry, with attendant colossal losses running into millions of dollars in terms of crude oil and gas loss as well as power generation shortages. The minister explained that in addition to the electronic surveillance of pipelines, the Joint Task Force operating in the Niger Delta will team up with the Nigerian Air Force to provide aerial surveillance. Nebo said government’s promise to Nigerians as far as power is concerned, is to achieve stable power supply, noting that everything has been put in place to ensure that it is achieved. Commenting on the 220megawatt turbine in Egbin power plant, Nebo said, "The commissioning of this unit is a clear demonstration of the wisdom of President GoodLuck Jonathan administration’s commitment to the reform and development of the power sector". He further stated: "The power sector is beginning to see the impact of the privatisation of the generation and distribution assets to the benefit of the Nigerian

electricity consumer. "With this new unit, the new owners of the Egbin Power Plant have accomplished the commendable feat of bringing the power plant back to its original installed capacity of 1,320 mega watts. "The ability to wheel this power from the generation stations on to distribution companies rests with the Transmission Company of

Nigeria (TCN) which has been strengthened by the private sector participation of Canada’s Manitoba Hydro International, as the management contractor. "TCN has the mandate of not only upgrading the existing transmission infrastructure but also to embark on new transmission projects to expand capacity around the country".

He said that the nation's major pipelines - the TransNiger Pipeline and the TransForcados Pipeline had been hacked into in multiple points, leading to production losses as well as drop in power generation, as power plants were starved of gas supply. The minister, however, said the situation was now under control, as generation capacity has increased to 3,600 megawatts.

Seplat expands capacity of Oben gas plant

…To produce 300MMSCF of gas daily

ondon and Nigeria-quoted Seplat Petroleum Development Company Plc has expanded the capacity of its Oben gas plant, a joint venture between the company and the Nigerian Petroleum Development Company, NPDC - the upstream arm of the Nigerian National Petroleum Corporation, NNPC. To this end, the company recently shut down the plant to tie in an expansion unit w i t h t h e e x i s t i n g p l a n t . The plant was expected to be down for 10 days for the tie in project, leading to a drop in gas supply to the nation's power generating plants by 135 million standard cubic feet of gas per day, MMSCF/D. According to Mr. Austin Avuru, Managing Director and Chief Executive Officer of Seplat Petroleum, the shutdown, which ended on

March 5, enabled the company tie in its newly installed 2 x 75 MMSCF/D unit into the company’s existing gas plant. Said Mr. Avuru: “Post tie-in operation, Seplat will have a single homogenous plant consisting of 2 by 45 MMSCF and 2 by75 MMSCF trains and will be able to deliver 240MMSCF/D WAGP (West African Gas Pipeline) specification gas postcommissioning, from the Oben node. This facility expansion and upgrade will bring the company’s overall daily gas production capacity to slightly over 300MMSCF/D”. Seplat’s original daily production of 135MMSCF, from Oben node was not available during the upgrade, but it still produced 60MMSCF of gas daily from its Sapele node.

Gas

2015 March, SweetcrudeReports

A gas City gate

Nigeria to see highest level of gas demand by 2020 - NNPC OSCARLINE ONWUEMENYI

omestic gas demand is expected to rise to over 10 billion cubic feet per day, bcf/d, in Nigeria by 2020 from a little above 2 bcf/d now. Group Managing Director of the Nigerian National Petroleum Corporation, NNPC, Dr. Joseph Dawha, disclosed this in a statement made available to SweetcrudeReports in Abuja, regretting that sabotage attacks on gas pipelines, however, pose a major threat to meeting the demand target. According to Dawha, the rising demand from the power sector and industry is fueling growth in the domestic gas sector, with demand set to hit over 5bcf/d in 2017, before rising to 10bcf/d by 2020. "The Federal Government and the NNPC have embarked on a very aggressive implementation of the gas master plan to meet the astronomical increase in gas demand," he said.

He added that, "over 500 kilometres of pipelines have been laid and many more kilometres planned in the next two to three years." Nigeria has proven gas reserves of about 180 trillion cf, the world's ninth biggest,

but Africa's biggest energy producer continues to burn about 20% of the gas produced, mainly along with crude oil due to the limited domestic market outlets. The Federal government last November signed an

agreement with eight oil companies, including ExxonMobil, Shell and Seplat for the supply of natural gas to 10 power plants in the country, built to tackle chronic energy supply. At less than 4,000MW, the

country’s electricity output is still a far cry from the national demand level, put at around 15,000MW. Meanwhile, attacks on key gas pipelines in the restive Niger Delta area have cut supplies to power plants by 1.1 bcf/d, the statement a d d e d .

World Bank votes $1bn to combat Nigeria's gas flare oil fields across Africa to generate power.

The bank noted that, "About two thirds of people do not have electricity in sub-Saharan Africa and the continent is hopeful that new gas finds along the east coast can boost power projects. "Power shortages are a big impediment to economic growth, and many businesses provide their own power using costly diesel generators."

Gas flaring CONTINUED FROM PAGE 1 supply the gas-fired Egbin power plant near Lagos to generate electricity in a bid to increase supply in the populous nation where around three quarters of power comes from gas. According to the bank, it has set aside more than $1 billion in risk financing to back the use of flared gas from

The Senior Director of Energy at the bank, Anita George, said about 700 billion kilowatt hours of power – equivalent to 80,000 megawatts running for the whole year – could be produced from all the gas flared routinely around the world. Nigeria is Africa’s top oil producer and worst flarer of gas found when extracting oil. The country received its first partial risk guarantee of $145 million in 2013, from the bank to support the country’s gas-to-power industry. The bank’s guarantees cover private lenders against the risk of a power utility failing to honor its financial obligations. Two other Nigerian projects will bring the total risk financing to $400 million.

Gas

2015 March, SweetcrudeReports

NLNG re-assesses N2bn USP initiative

University of Port Harcourt, a beneficiary of the USP initiative

KUNLE KALEJAYE

he management of Nigeria LNG Limited, NLNG, has undertaken a painstaking reassessment of its N2 billion University Support Programme, USP, granted to six tertiary institutions in the country. NLNG started the inspection exercise with two universities, Ahmadu Bello University, ABU, Zaria, and University of Port Harcourt, UNIPORT, to evaluate the progress of the programme at these institutions. NLNG, through the USP initiative announced in Abuja last year, is committed to s u p p o r t i n g t h e renovation/building of engineering faculties and supply of state-of-the-art equipment at the selected six universities in the country to enhance the development of teaching and research in the institutions. The six institutions are University of Ibadan (South West Zone), University of Port Harcourt (South-South Zone),

University of Nigeria, Nsukka (South East Zone), University of Maiduguri ((North East Zone), University of Ilorin (North Central Zone) and the Ahmadu Bello University, Zaria (North Central Zone). They are expected to access funds to the tune of N340 million provided by NLNG. “We are pleased at the progress made on engineering faculties at both ABU and UNIPORT. ABU’s renovation work on its engineering building is completed and at UNIPORT, the appointed contractors are at the superstructure stage of the building. "Beyond the structures, both schools have also made good strides in kick-starting the procurement of the laboratory equipment that will, without doubt, impact positively on the quality of teaching delivered to their students,” said Isa Inuwa, Nigeria LNG’s Deputy Managing Director, who led a team from the company on the inspection tour of the two universities. Inuwa added that plans were underway by NLNG to visit the

remaining four beneficiary universities. NLNG, in statement, said the six beneficiary universities were selected based on rankings by the National Universities Commission, NUC, and the institutions’ preeminent positions in their geopolitical zones in terms of their long-standing contributions, especially in grooming notable Nigerians who have contributed to national development. "The USP is one of the many social investment initiatives undertaken by NLNG to consciously raise standards in the country’s educational sector. Others include the annual scholarship awards for post-primary, undergraduate and overseas post-graduate studies," the company stated in the statement. It added: "In Rivers State, home to the company’s operations, NLNG promotes a science quiz competition, provides educational materials and builds classrooms across its host communities. "Its signature investment in education, however, is widely

Expert tasks govt on framework to harness flared gas

ormer Publicity Relations Officer, Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, Mr Seyi Gambo, has urged the Federal Government to end gas flaring and harness it for domestic consumption. Gambo said in Lagos that for government to achieve this, there should be an effective legal framework on gas flaring. He said gas flaring was not only ravaging the coastal environment but has deprived the nation of huge revenue needed for development. "Revenue loss from gas was due to the government’s inability to focus and explore many other natural resources apart from oil. This has practically frustrated the development of the gas industry. "Flared gas is also known to contain toxic substances which could cause respiratory diseases and air pollution, leading to depletion of the ozone layer," Gambo said. He advised government to harness the potential of the nation’s enormous gas reserves by encouraging investments in domestic gas projects.

considered to be the wellcelebrated Nigeria Prize for Literature and the Nigeria Prize for Science, established in 2004 to honour and encourage outstanding innovators and writers. The prizes, the largest in Africa, each come with a $100,000 prize money.

“NLNG is owned by four shareholders, namely, the Federal Government of Nigeria, represented by the Nigerian National Petroleum Corporation, NNPC (49%), Shell Gas BV, SGBV, (25.6%), Total LNG Nigeria Limited (15%), and Eni International (N.A,) N. V. S. a. r. l (10.4%)".

Power

2015 March, SweetcrudeReports

Power plant

Power generation drops again due to pipeline vandalism OSCARLINE ONWUEMENYI

he Minister of Power, Prof. Chinedu Nebo, has disclosed that Nigeria presently has broken the record as the only country in the world with the highest number of breaks and vandalism of key petroleum products pipelines. This is coming as new reports from government indicated that the nation’s 3,642 megawatts, mw, level of electricity generation has dropped to about 3,000mw as vandals broke the Escravos-Lagos Gas Pipeline System, ELPS, in Delta State. \ Nebo, who made the disclosure at the unveiling of 25-kilowatts, kW, hybrid renewable plant constructed by the National Power Training Institute of Nigeria, NAPTIN, in Kainji, Niger State, said currently, no country in the world records the number of petroleum pipeline breaks like Nigeria. “There is no other country in the world where gas pipelines is destroyed other than Nigeria. We have never seen a set of people that can be as wicked to

themselves as we have in some Nigerians who are bent on perpetrating their wicked acts on our gas pipelines”, said the minister, who was represented by the Permanent Secretary in the ministry, Godknows Igali. The latest attack, which was confirmed by the Transmission Company of Nigeria, TCN, in a statement, has reduced gas supply and by extension power generation. The pipeline is important as it is dedicated to delivering gas from Escravos to Lagos for power g e n e r a t i o n . “Vandals struck at the EscravosLagos Pipeline System, ELPS, Gas Pipeline at Inikorogha, Gbaramatu Kingdom, Delta State, blasting away about 24 inches of the pipeline,” it disclosed. The General Manager, Public Affairs of TCN, Mrs. Seun Olagunju, who signed the statement, indicated that the latest act of sabotage by unscrupulous Nigerians has once again affected gas supply to electricity generation and resulted in the reduction of generated power to the national grid.

For instance, as we speak, we have only four days that are vandals-free. We have 53 days of vandalism. We have only had four days of free flow of gas without vandalism. That tells you how horrible the situation with vandalism is She stated, “The vandals also struck the Trans- Forcados Pipeline a month ago and while restoration efforts were being completed, they struck again. “You may recall that early in February, the Minister of Power, Prof. Chinedu Nebo, signed several MoUs with the National Association of Nigerian Students, NANS, the office of the Senior Special Assistant to the President on Youth Matters and several NGOs to embark on sensitisation of Nigerians to desist from acts of vandalism

and report any plan to vandalise gas and power infrastructure.” The company assured that the Federal Government was unrelenting in efforts to check these acts of sabotage, including introducing sophisticated technology, in order to provide more reliable and stable power supply to the people. Stakeholders said the gas pipeline vandalism and other challenges may affect government’s ability to meet set target in the sector this year.

The minister noted recently at the launch of an interactive customer framework to improve service delivery to electricity consumers that the menace of pipeline vandalism was taking a great toll on electricity generation in the country. Fielding questions from journalists on government’s ongoing plan to deploy digital security measures to protect critical pipeline networks in the country, Nebo said the country records only about four days of gas flow in a week before vandals attacked the pipelines conveying gas to power plants. “For instance, as we speak, we have only four days that are vandals-free. We have 53 days of vandalism. We have only had four days of free flow of gas without vandalism. That tells you how horrible the situation with v a n d a l i s m i s . “Vandalism is affecting our capacity to generate electricity. We are hoping that in the next two weeks, with the other pipelines that are being repaired and the ones that are being serviced put in use, we would have been back to, or even beyond where we are,” Nebo said.

Power

2015 March, SweetcrudeReports

Power sub-station

Mambilla hydro project hit by security, logistic snag …As cost rises for 30-year electricity project OSCARLINE ONWUEMENYI

fforts by the F e d e r a l Government to kick-off the 3,050 megawatts, mw, Mambilla Hydropower Plant in Taraba State - the largest hydropower dam in the continent - may have hit fresh challenges over inability to reconcile financial plans between the ministries responsible for bringing the project on stream. The project's planned kick-off may also have been thrown into quandary in the wake of the increase in terrorism activities by Boko Haram in the North East of the country. The Minister of Finance and Coordinating Minister for the Economy, Dr. Ngozi OkonjoIweala, was scheduled to travel to China last year to sign the billion-dollar agreement with the Chinese builders, but had to put that off in the face of the economic onslaught brought about by declining global oil prices. In the light of the deadlock over the project’s signing last October, officials hinted that the newly-contracted company, China Gezhouba Group

Company Ltd – that built the 22500mw Three Gorges Dam (world’s largest dam) in China will work with the financier, the China EXIM Bank, to arrange the finance. According to sources in the Ministry of Power, who spoke to our correspondent in Abuja, the inability to harmonise financial plans by the Power Ministry and its finance counterpart last year was the major setback that affected the project. Last year, President Goodluck Jonathan gave marching orders to the Power Ministry to ensure the flag off of the project before the end of 2014. Investigations showed that part of the delay in the take-off was because the Minister of Finance and Coordinating Minister of the Economy, CME, Dr. Ngozi Okonjo-Iweala was not originally in the picture of the project, a situation which had created logistical jam and resulted in the halted last minute moves to flag off the electricity project in the North East last October. “What delayed the project kickoff initially was that the Finance Ministry was not incorporated in the early process, and the Federal Ministry of Power could not have signed a loan agreement with another country

without the Finance Ministry, on behalf of Nigeria. They now had to ensure that our Finance Minister travels to China to perfect the agreement signing,” a s o u r c e s a i d . The source further noted that, “She (CME) was about to go in December when all these crises started. The fall in oil price was the most critical issue because she had to stay back to ensure that there were measures in place to cushion the effect; and then election fever started. There was also a crisis about the ministries not getting money in the month of December, she had to stay back.”

What delayed the project kick-off initially was that the Finance Ministry was not incorporated in the early process, and the Federal Ministry of Power could not have signed a loan agreement with another country without the Finance Ministry, on behalf of Nigeria

S h i f t i n g c o s t s In 2006, the Chinese firms, CGC/CGGC won the Lot 1 tender for about $1.4 billion while the contract was signed by May 2007 and later cancelled. The project consultant valued the cost at $3.2 billion (about N653.7 billion) in 2011, but it has encountered various hurdles since conception some 30 years ago.

The Minister of State, Power, Mohammed Wakil, gave the October timeline at a political rally in Gombe State in September. He said, “The President has broken the jinx of the Mambilla hydro dam which is worth about $7 billion. The dam is to generate over 3,000mw and is about the biggest on the continent.

The new cost of the project, according to the Ministry of Power, is about $5 billion (about N1.021 trillion). This is a significant $1.8 billion (about N367.7 billion) difference of an upward review from the initial transaction plan.

“This project has been on the drawing board since 1970. This president has given marching orders for the signing of the Mambilla hydro dam by this (last) October,” he noted. A sister project, the 700mw

Zungeru Hydropower station in Niger State was flagged off in May 2013, after the power ministry awarded the contract to China National Electric Equipment C o r p o ra t i o n , C N E E C , a n d another Chinese firm, Sinohydro Nigeria Ltd, at $1.2 billion. According to the terms of the contract, the companies arranged for the 85 percent financing through the Chinese Bank while the Federal Government will provide its 15 percent counterpart funding; but the agreement is awaiting a formal pact signing on financing between Nigeria and the Chinese government.

Power

2015 March, SweetcrudeReports

Power sector privatisation to end in 2017

Sapele power station

OSCARLINE ONWUEMENYI Company.

he Federal Government's power sector privatisation programme will end in 2017 by which time all the government-controlled assets in the industry would have been handed over to private sector players. The government had privatised the generation and distribution arms of the power sector in November 2013, with the transmission segment still not yet privatised. It is expected that with the government's new position that privatisation in the sector will end in 2017, the transmission arm would be sold off to private players by that year. President Goodluck Jonathan confirmed the new terminal date for power sector privatisation as he commissioned the 750 megawatts Olorunsogo II power station in Ogun State built under the National Integrated Power Project, NIPP, and run by the Niger Delta Power Holding

President Jonathan also stated at the event that the Federal Government has so far invested about $8.26 billion in the power sector through the NIPP. He said a total of $650 million of this amount was committed to the Olorunsogo power plant, adding that 10 of such power projects were currently ongoing across the nation. He said these were minus two others which he inaugurated in Kogi and Ondo states in 2014. The president expressed happiness that he has continued to deliver on his campaign promises including the reformation of the power s e c t o r . According to the president, his administration would not relent in its determination to drive away darkness from Nigeria. “I am happy that I have consistently delivered on my campaign promises to transform Nigeria and my administration would leave no stone unturned to achieve its goals,” he said.

The president pledged that the interface between the government and the private sector on the privatisation of the power sector would be completely sealed by 2017

The president pledged that the interface between the government and the private sector on the privatisation of the power sector would be completely sealed by 2017, if voted into power. He said that the power plants in Kogi and Ondo states had already been privatised, while that of the Olorunsogo is in the process of being privatised.

'Nigeria, others losing 80,000mw of power to gas flaring’

he World Bank says about 700 billion kilowatt hours of power, equivalent to 80,000 megawatts running for the whole year, is being lost to gas flaring in oil and gas producing countries. This represents the quantum of power that could be produced from all the gas flared routinely around the world. "Power shortages are a big impediment to economic growth, and many businesses provide their own power using costly diesel generators," the Senior Director of Energy at the bank, Anita George, said, noting that "about two thirds of people do not have electricity in sub-Saharan Africa and the continent is hopeful that new gas finds along

the east coast can boost power projects". Nigeria is Africa’s top oil producer and worst flarer of gas found when extracting oil. The World Bank chief made the disclosure as she announced plans by the Bank to work closely with Nigerian officials to curb gas flare from oil fields in the Niger Delta region. The partnership is also aimed at encouraging significant investments in gas-to-power initiatives to further help the country realise its power sector reform process. Under the 10-year deal, Chevron Nigeria will supply gas to the Egbin power plant near Lagos to generate electricity in a bid to increase supply in the populous nation where around three quarters of the country’s power comes from gas.

2015 March, SweetcrudeReports

Power

2015 March, SweetcrudeReports

Manager Distribution, SMD, has been renamed Distribution Manager, DM. He takes care of faults/engineering, electrical and control, requests for materials from the zonal store in Ijora for preventive maintenance. His duties also include submitting daily, weekly, monthly fault reports on substation transformers, HT 33kv feeders, LT 11kv feeders, faults with transmission stations (power plants), inspecting and monitoring over-load feeders and working hand-in-hand with NIPP contractors to construct relief feeders in cases/areas of over-load.

EKEDC head office, Marina, Lagos

EKEDC redeploys 11 Business Managers to Marina KUNLE KALEJAYE

ko Electricity Distribution C o m p a n y , EKEDC, has redeployed eleven Business Managers from its districts to head newly-created commercial and distribution offices in Marina. This was made known to SweetcrudeReports by EKEDC's General Manager, Public Affairs, Mr Godwin Idemudia, who said the redeployment did not lead to

any loss of job in the company. Mr. Idemudia explained that this became necessary as capable and efficient hands were required at the head office as a result of the new offices created. SweetcrudeReports had earlier reported that EKEDC reshuffled business district managers and distribution staff in a bid to enhance revenue generation for the company. It was also learnt that aside from the business mangers, all

computer centre managers, CCMs, responsible for printing bills were also redeployed to the head office, indicating that printing of bills would now take at the headquarters. It also means that field marketers will be used to gather and capture customers readings on their prepaid meters and sent to Marina for billings. With this development, the computer staff in the 11 Business Districts have been deployed as field marketers for the company.

Other changes in EKEDC is that t? he undertakings are now called zones and are headed by Zone managers. The office of the Senior Manager, Marketing, SMM, is now renamed ? Commercial Manager. He takes care of all customers issues/complaints and requests as it applies to meters, bills, procurement/installation of meters and monitoring of data sent to the computer unit in Marina SweetcrudeReports also learnt that the office of the Senior

The office of the Manager, Planning and Construction , P&C, have also been centralised to the head office in Marina from the various under-takings. It was also learnt that the office of the Manager Protection Commissioning and Maintenance has been renamed Manager Protection and Testing. Smart Metering The management of the company in a statement made available to our correspondent explained that it has introduced smart metering technology into its operation. "Through this programme, a total 360,000 meters are to be rolled out for installation in our customersâ&#x20AC;&#x2122; premises free of charge within the next few years. "On our human resources side, we have evolved a well laid out capacity building plan for all staff members to fit into the new order of optimal service delivery and customer satisfaction," the c o m p a n y s a i d .

Power

2015 March, SweetcrudeReports

Olorunsogo ll Power Station never commissioned by Obasanjo - NDPHC

Olorunsogo ll Power Station

he management of the Niger Delta Power Holding C o m p a n y L i m i t e d , NDPHC, owners of the National Integrated Power Projects, NIPP, has refuted reports that the recentlycommissioned 750MW NIPP Olorunsogo ll Power Plants had earlier been commissioned by former President, Olusegun Obasanjo. The company said in a statement issued by its General Manager, Communication and Public Relations, Mr. Yakubu Lawal and made available to newsmen in Lagos, that the c o m p l e t i o n a n d commissioning of the phase II Olorunsogo plant was another manifestation of President Goodluck Jonathan’s commitment to deliver on his promises to complete inherited projects. The General Manager said that the phase II is a combined circle plant consisting of 4No GE made Gas turbines, 4No Heat Recovery Steam Generators

and 2no Steam turbine units each turbine unit of 125MW capacity. The power plant thus has the capacity to generate 750 MW, a positive development over the phase I plant commissioned by Obasanjo regime which has 8 turbine units each of 42MW with a total of 335MW. While the Olorunsogo II project was built by the NIPP ( as a joint investment of the three tiers of governments of Nigeria), the Olorunsogo I project was basically a Federal Government project. Both of the projects were built by SEPCO III of China under distinct and separate contracts. The two power plants sit adjacent to one another but on defined and distinct survey coordinates. Lawal stated that the NIPP was conceived in 2004 by President Obasanjo as a major fast-track initiative to add significant new capacities in power generation, transmission and distribution to Nigeria’s electricity supply chain but t h a t J o n a t h a n ' s commitment, first as the

steering Chairman of NIPP and later pioneering Chairman, Board of directors of NDPHC actually gave life to the success stories of today. "The efforts of the two leaders (one former and the

latter current) should be complimented rather than used as a basis to cause unnecessary debates with the intention to cause disrepute and undue rancour," Lawal said.

According to him, the commissioning of Olorunsogo ll power plant will increase the volume of power on the national grid and further enhance the gradually improving power supply situation in the country.

Indigenous meter manufacturers commend power sector Local Content Law

he Electricity Meter Manufacturers Association of Nigeria, EMMAN, has commended the Nigerian Electricity Regulatory Commission, NERC, for enacting a law that would encourage local players in the p o w e r s e c t o r . The association said in a statement in Lagos by its Executive Secretary, Mr Muyideen Ibrahim, that the local content law would not only protect indigenous players in the sector but also impact positively on the economy. It said in the statement that it would also provide employment and business opportunities for Nigerians, adding that local meter manufacturers had the production capacity to bridge the wide electricity metering gap in the sector.

“We are particularly proud of Amadi for having the political will to make the commitment which will go down in the history of this country. It will re-position the power sector which is very critical to the country’s economy,” the statement further said.

They can also supply world class meters to neighbouring West African countries and Africa at large, the statement further said. “On behalf of the Electricity Meters Manufacturers Association of Nigeria (EMMAN), I will like to commend the Dr. Sam Amadi-led Nigerian Electricity Regulatory Commission (NERC) for the bold step in the

It urged electricity distribution companies to embrace the local content law in the power sector by patronising the local meter manufacturers, assuring Nigerians that they were capable of delivering world-class metering solutions and allied products that could compete favourably with those in the world.

right direction,” it noted.

Ibrahim used the medium to pledge the association’s unalloyed support and commitment to the Nigerian power sector reform. According to the statement, the reform would encourage foreign companies to set up manufacturing plants in Nigeria, thereby boosting the economy and improving capacity of Nigerians.

2015 March, SweetcrudeReports

Power NKEM IGBIKIOWUBO

iemens as an international corporation and global industry giant has been operating in Nigeria for over 40 years. Within this timeline, the organization has evolved to become a household name in Nigeria with interests in Power, Oil and Gas, Healthcare, Telecoms and Industry. The organization's foray into energy dates back to 1964 when the first hydro power station was built in Kainji, Niger State. This project led to the establishment of Siemens' Resident Engineers' office in Lagos in 1968. In 1970 a full-fledged company "Siemens Nigeria Limited" with headquarters in Lagos was established, and which was later renamed to "Siemens Limited Nigeria". Branch offices were set up in Abuja to cater for power and utilities and Port Harcourt for its Oil and Gas businesses respectively.

Nigerian Content Act Strategy S e q u e l t o t h e establishment of the Nigerian Content Act in April 22, 2010, Siemens redefined its Nigerian Content Strategy, hinged on the following pillars: growth and empowerment of local employees, partners, customers and communities. In rolling out its implementation, the following initiatives were set up: in-country human capital development, training and licensing of local partners and contractors, design and assembly of electrical systems, packaging and storage services for Oil and Gas, and operation and maintenance of Siemens' installed bases in Nigeria.

Some Key Achievements Siemens has recorded significant milestones in the course of local content development including but not restricted to the following:

Establishment of Oil & Gas Field Service Team 100% composed of Nigerians In 2012, Siemens initiated a scheme to develop a world class field service management team manned by Nigerian engineers. Prior to this period, the organization relied heavily

Siemens Nigeria: A true local content champion

Executive Secretary, Nigerian Content Development & Monitoring Board (left), Engr. Ernest Nwapa presenting the NCEC certificate to Siemens in July 2012

on other offshore regions and partners for manpower support on a call-out basis. A rigorous process was rolled o u t f o r t h e recruitment, training and mentoring of Nigerians field service engineers for a period of 2 years, after which they were certified ready to deliver in-country field services. To date, all service engineers in the organisation are Nigerians who are trained and certified in various Siemens facilities worldwide.

Rotating Equipment Workshop in Port Harcourt S i e m e n s i s building a rotating equipment service workshop in Trans Amadi, Port Harcourt, Rivers State. The workshop will provide maintenance services for gas turbines and compressors incountry. This is geared towards reducing down time

and ensuring the reliability and availability of clients' Siemens' installed bases. The workshop activities will cover the following: gas turbine core engine, combustion and power turbine, compressors full strip inspection, rotor, thrust bearing, disc

coupling, shaft sleeves, mechanical and electrical run out check, non destructive testing of materials, and seal insert inspection. The workshop will also provide fleet management including spare parts management and stocking,

gas turbine core engine storage, compressor spare bundle storage and tooling rentals.

Establishment of Siemens Power Academy in Lagos In recognition of the enormous need for technical manpower development in Nigeria and Sub-Saharan Africa, Siemens set up the Siemens Power Academy (SPA) in 2010. Hundreds of professionals in the Oil & Gas industry & Power sector, as well as young graduates have been beneficiaries of the SPA and have received training especially on general power engineering courses, gas turbine and turbo compressors operations and maintenance, electrical engineering for oil and gas field personnel, transformer and switch gear operations and maintenance, etc. Siemens has 28 Power Academies around the globe, and they are all built to conform to international standards and best practices. The academy was set up in Nigeria primarily to address the skills gap in the Nigeria power sector. Siemens Power Academy in Lagos is part of an international network and its trainers undergo regular international trainthe-trainer refresher programs in-and-out of Nigeria. The curriculum based certification is internationally and locally accredited. The academy also offers tailor-made training solutions addressing specific customer requirements for maximum personalization including the development of specific course contents, and cooperation with external partners to cover any training demand. SPA training offers are structured to fit into local requirements and industry expectations. Some of these local needs are high-tech engineering trainings, young graduates' vocational trainings, nonpower engineering trainings and continuous capacity building programs. The Academy has also formed partnership with state governments and major tertiary institutions in Nigeria including the Universities of Lagos and Benin respectively on capacity building as well as the Lagos State Government. The SPA played an CONTINUES ON PAGE 27

2015 March, SweetcrudeReports

Power

Siemens Nigeria: A true local content champion CONTINUED FROM PAGE 26 important role in the recently established Lagos State Energy Academy (LEA). The Lagos State Energy Academy (LEA) was set up by the Lagos state Government under the flagship of the Lagos State Electricity Board. The main goal is to train and certify young graduates of the state on common power engineering techniques, and technology and enable them to get firsthand experience for efficient employment in the industry. Siemens via its Siemens Power Academy (SPA) has been a valuable partner s u p p o r t i n g t h e implementation of the LEA project in different capacities including: —Support and advisory services in the set up —Design and development of curriculum —Selection and certification of LEA trainers —Accreditation and licensing of the LEA by the Siemens Power Academy Global —Accreditation of LEA as reseller and regional partner for SPA Global (Value added reseller of all Siemens training programs, as well as project specific trainings)

Assembly of Power Distribution Systems The organization is in partnership with Nigerian companies for assembly of low voltage switchgear and compact substations and has also set a target to domesticate assembly of medium voltage switchgear. The servicing of Siemens range of electrical products for Oil & Gas and Power Distribution Companies is also carried out via partners internationally trained and certified by Siemens. Prototype of compact substation built by one of Siemens partners Locally made Siemens LV Panel on No-load testing

Development and Execution of New Oil & Gas Projects Siemens is collaborating with small and medium range Nigerian companies to deliver various solutions including pipelines and water treatment, subsea projects, EPC partnership for execution of major oil and gas

Prototype of compact substation built by one of Siemens partners projects, and energy automation systems and project management. These areas of collaboration are targeted towards the development of local man power capacity and skills transfer, job creation and valuable income and growth of indigenous companies as well as prompt and enhanced service delivery to oil and gas clients In recognition of Siemens local content achievements and future plans, the company was awarded the Nigerian Content Equipment Certification (NCEC) in July 2012 by the Nigerian Content Development and Monitoring Board (NCDMB).

Landmarks in the Nigeria Energy and infrastructure space

Locally made Siemens LV Panel on No-load testing

Major projects implemented by Siemens include the design and installation of over thousands of kilometres of 132kv transmission lines and 33kv and11kv distribution lines under the national rural electrification program. The construction of sub-station projects as well as a m a j o r c o n t r o l a n d communication project for the National Control Centre, construction of 276mw Afam V power plant, construction of 414mw Geregu I and434 mw Geregu II gas turbine power plants in Geregu, Kogi State, 100mw captive power plant for Dangote Group, service maintenance for PHCN in Kainji, Shiroro and Afam power plants. In addition, Siemens has over 130 units of small and medium range gas turbines and compressors installed in both onshore and offshore oil and gas facilities in Nigeria. In view of Siemens' enviable feats so far recorded in local value creation and its great plan, there's no doubt whatsoever that the organization is well positioned to continue to impact not only its key industries, but the Nigerian economy as a whole. Today Siemens top management positions are filled by Nigerians. The company MD/ CEO and CFO are wholly com m i t t e d t o a d op t ion of Nigerian Content regulations across industries. Selected top talents in the organisation are also constantly trained and mentored to fill future management positions in the organisation. Siemens is not resting on its laurels, as it continues to progressively identify and implement new means to ensure the organisation remains a key player in Nigeria, driving and promoting local content in everyday business and operations. Siemens is in Nigeria for Nigeria.

2015 February, SweetcrudeReports

Finance

2015 March, SweetcrudeReports

Govt paying N117 as subsidy per litre of petrol, kerosene

Petrol station IKE AMOS

he amount the F e d e r a l Government is paying to petroleum marketers as subsidy on Premium Motor Spirit, also known as petrol, and kerosene has risen to N117.44 per litre. Particularly, data from the Petroleum Products Pricing Regulatory Agency, PPPRA, revealed that the amount paid as subsidy on kerosene is N80.78 per litre, while the amount paid for PMS is N36.76 per litre. Giving a breakdown of the PMS price component on its Pricing Template for the month ended, February 27, 2015, the PPPRA calculated the Expected Open Market Price of PMS at N123.66 per litre, hinging this on the average Platts price for the day. This is N36.66 higher than the regulated price of N87 per litre. Further breakdown puts the Cost-plus freight charges of PMS at $653.86 per metric tonne. Using a conversion rate of 1,341 litres to a metric

tonne and an exchange rate of N198 to a dollar, this translates to N96.54 per litre, about N9 more than the regulated price of N87 per litre of PMS. Trader’s margin stood at $10 per metric tonne or N1.48 per litre; lightering expenses $28.22 per metric tonne or N4.17 per litre and Nigerian Ports Authority, NPA, charge $5.25 per metric tonne or N0.78 per litre. Cost of financing is put at

$9.53 per metric tonne or N1.41 per litre and jetty depot thru’put charge $5.42 per metric tonne or N0.80 per litre; storage charge $20.32 per metric tonne or N3 per litre. All these bring the landing cost of PMS to $732.6 per metric tonne or N108.17 per litre, N21.17 higher than the regulated price of N87 per litre. The PPPRA template also puts distribution margins at

$104.91 per metric tonne, an equivalent of N15.49 per litre. This is broken down into: retailers margin — $31.15 per metric tonne or N4.60 per litre; transporters — N2.99 per litre ($20 per metric tonne); dealers —N1.75 per litre ($11.85 per mt); bridging fund — N5.85 per litre; marine transport average, MTA — N0.15 and admin charge —N0.15 per litre. In the template for

household kerosene, the PPPRA puts the landing cost at $717.37 per metric tonne and equivalent of N115.29 per litre. This comprises cost-plus freight charges of $648.36 per metric tonne. Using a conversion rate of 1,232 litres to a metric tonne and an exchange rate of N198 to a dollar, this translates to N104.20 per litre, about N54 more than the regulated price of N50 per litre of kerosene.

Oil trading firms to benefit from crude price volatility — Fitch IKE AMOS

lobal rating agency, Fitch, has disclosed that oil trading houses such as Glencore, Vitol and Trafigura will benefit from the volatility in oil prices and will post robust earnings in their 2015 financial statement. According to a statement

by Fitch, the periods of volatile oil prices and wider spreads are more favourable for traders when they are able to capitalise on increased arbitrage opportunities. Fitch said, “For example, when forward oil prices are higher than spot, the market is known as contango. This enables oil traders to play the ‘storage game’ — buying

oil today while selling futures at a higher price. “They can then lock in a profit equivalent to the difference in price minus the cost of storage. Brent has been in contango since July 2014, after more than three years of the opposite situation, known as backwardation. “The forward curve is not as steep as it was in January,

meaning storage costs could eat up any profit, but other arbitrage opportunities are still there.” Fitch predicted that the volatility in oil price is likely to remain in the market throughout 2015, before oil recovers and the market finds an equilibrium.

2015 March, SweetcrudeReports

Finance

IKE AMOS

idwestern Oil and Gas has concluded plans to invest 285 million Canadian dollar, C$, equivalent of N45.63 billion in the acquisition of Mart Resources. The proposed deal will see M i d w e s t e r n p a y shareholders of Mart Resources 80 cents per share, which is about a 40 per cent premium to weekend’s closing price and a 20 per cent premium to the average price for the preceding 20 days. According to a statement by Mart Resources, shareholders will be asked to vote on the proposed transaction in June, adding that the Midwestern approach was unsolicited, and it was subsequently recommended by an independent special committee that was formed last month to review the offer and consider the company's strategy. The company stated further that, “A letter of intent has been signed by Mart and Midwestern, which is now in an exclusivity period so that Mart can close a private financing for the transaction. “Midwestern has until June 15 to secure the financing for the acquisition, though there is an earlier deadline of May 15 for a definitive agreement to be reached.” M a r t R e s o u r c e s Incorporated is an international oil and gas company focused on production and development opportunities in the Niger Delta region.

Midwestern Oil installation

Midwestern Oil to invest N46bn in acquisition of Mart Resources The company was one of the first foreign oil companies to establish ventures with local operators under the indigenous and marginal field programme. Mart had been holding talks with its Nigerian bank to restructure debt facilities in order to have more flexibility in funding the ongoing development of the Umusadege field. Umusadege, according to a statement by the company, has undergone a step change

in production volumes in recent months following the completion of a new export pipeline. The company had a couple of weeks ago disclosed that daily production had been achieved in January, with the field’s gross volumes of 29,000 barrels per day, with the company’s economic interest in Umusadege's production averaging between 65 and 70 per cent. Mart Resources funded the

field's development, while Midwestern is the group's indigenous Nigerian partner and is the operator of the field. Mart Resources had also stated that crude oil production for the month of December 2014 had rose to 573,633 barrels, representing daily crude oil production of 18,841 barrels, compared to 12,554 barrels of oil per day in November 2014.

Oil Price Slump: Nigeria's debt to rise in 2015 —Okonjo-Iweala OSCARLINE ONWUEMENYI

i g e r i a ' s domestic debt will rise this year as it borrows more to meet a shortfall in revenue caused by the plunge in the global price of oil. Making this disclosure in Abuja, the Minister of Finance and Coordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala, warned that the country is paying the price of its dependence on oil as a

major source of revenue. She noted that, "Our income is still coming from a source that is not diversified. Because of the drop in oil prices we will have a difficult year.’’ The Minister blamed lawmakers who had opposed her moves to use a lower oil price for budgeting and save the rest. "A year ago before the fall in prices we said that we should save but we were not listened to. Today they’re saying we didn’t save," she stated. She explained that the additional domestic debt will go toward paying the salaries

of government employees, adding that, ‘‘You cannot throw people out on the streets.’’ Nigeria, Africa’s biggest oil producer, depends on crude exports for 70 percent of government revenue and more than 90 percent of foreign income, making it vulnerable as prices plummeted more than 50 percent since last year’s peak in June. Pressure has mounted on the naira, which has weakened 7.5 percent this year, the most among 24 African currencies recently surveyed by Bloomberg.

Okonjo-Iweala

The company stated that the combined net delivery of oil before estimated pipeline and export facilities losses, from the Umusadege field through the Umugini pipeline and the Nigerian Agip Oil Company, NAOC, export pipeline totalled around 570,197 barrels in December last year, and approximately 491,148 barrels after the deductions. The company explained that, the combined delivery of oil from the field through the Umugini pipeline and the Nigerian Agip Oil Company Limited export pipeline reached record daily gross volumes of around 24,000 barrels of oil per day (bopd) for several days in the month and a record daily gross volume of around 29,000 bopd in late January 2015. The company said its oil export has recorded significant increase as oil began to flow on December 3 last year through the 51kilometre long Umugini pipeline and into TransForcados crude oil export pipeline that connects to the Forcados oil export terminal. The company also added that, in December, gross delivery of oil from the Umusadege field into the Umugini pipeline was as high as 17,300 bopd.

2015 March, SweetcrudeReports

Finance

Fuel pump

he decline in crude oil prices has taken a toll o n t h e operations of Afren as it has defaulted in the payment of a $15 million, an equivalent of N3 billion, interest owed its bondholders. The company also raised an alarm over its negative financial position, warning that it might have to seek a bailout from its creditors, leading to a dilution of its shares. The company's statement, according to reports, was originally due to pay interest on its bonds maturing in 2016 at the start of February,

Oil Price: Afren defaults on N3bn interest payment but had deferred the payment using a 30-day grace period. However, despite the default, investors holding about 55 per cent of the bonds have pledged not to take enforcement action over the default to give the company breathing space to agree to a refinancing. The company further stated that it had decided not to pay the $15 million, so as to enable it preserve cash, while continues talks on a bailout

deal. “While such non-payment will result in a default under the 2016 notes, this will not result in an immediate obligation to repay such 2016 notes or any crossdefault under its 2019 notes or 2020 notes or its other debt facilities,” the company said. Afren further cautioned that an emergency funding

Oil marketers' outstanding subsidy payments ready before March 31 - Govt KUNLE KALEJAYE

he Federal Government would have before the end of this month paid oil marketing their outstanding N264 subsidy funds, according to Minister of Finance and the coordinating Minister of the economy, Dr. Ngozi Okonji Iweala. The government has,

according to her, drawn up a workable payment timetable for the marketers, who are being owed N264 billion, part of 2014 and 2015 (uphill March ending) subsidy claims. At the end of a recent meeting between the minister and oil marketers, they were assured that a total of N164 billion of the subsidy claims and N100 billion foreign exchange and interest would be paid. SweetcrudeReports had

earlier reported that fuel importation had dipped by 14 percent as marketers shunned products importation over the subsidy claims, leading to scarcity of the products since the early part of the month. Industry sources said the scarcity may last till April. To address fuel shortage in the country, the finance minister had met with oil marketers in Lagos while

The company's was originally due to pay interest on its bonds maturing in 2016 at the start of February, but had deferred the payment using a 30-day grace period the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, who was in London for official duties, flew into the country to take charge of the situation. Executive Secretary of Major Oil Marketers Association of Nigeria, MOMAN, Mr. Obafemi Olawore, had confirmed the outcome of the meeting with Okonjo-Iweala to journalist in Lagos, saying government had assured them of their payments on schedule.

deal is likely to come from its debtors, rather than third party investors, and warned that a rescue would hit its equity investors. It said, “While the company is also having discussions with its other stakeholders and third party investors regarding interim funding and recapitalising the company, the board believes that an agreement between the company’s creditors presents the most likely solution to the immediate issues facing the business.”

Labour

2015 March, SweetcrudeReports

Oil theft ELUONYE KONYEGWUAEHI

he Petroleum and Natural Senior Staff Association of N i g e r i a , PENGASSAN, has warned that crude oil theft was still harming the Nigerian economy greatly and should be addressed urgently. President of PENGASSAN, Comrade Francis O. Johnson, equally decried the level of casualisation and outsourcing of workers in the nation’s oil and gas industry, warning that organised labour would no longer take issues of unfair labour practices in the industry lightly. According to him, “The problem of crude oil theft in the country is very huge and is harming the economy seriously. The government must develop the political will to fight these criminals who have been bleeding the economy very seriously. It is very huge and it is alarming. We must look at how we can solve it. "The sad thing about it is that even the security agencies are also involved in the theft. We are losing a lot of revenue as a country and I

PENGASSAN demands 'practical action' against oil theft tell you, the impact on the job is so alarming and that is why we are saying it must be addressed so that we can see that at times like this, the little we are producing, we can also get value for it.” Speaking on unfair labour practices, the PENGASSAN president said casualisation and contract staffing in the

industry was alarming. "We have situations where some workers have been on contract staff for 18 years. After being contract staff for 10 to 20 years, it is as if they have not been working because if anything happens, what will be their entitlement? "As it is, they have nothing and these

people have dependants This is inhuman. There are labour laws relating to this, and we have several understandings and communiqués to address the issue, to no avail. We are definitely going to have a tougher look at it because you cannot have somebody working with or for you as

contract staff or casual staff for years without finding him or her worthy of permanent employment". On the Petroleum Industry Bill, PIB, still pending passage into law at the National Assembly, Comrade Johnson said it is a legal framework that will drive investment policy direction in the industry.

Power sector apprenticeship scheme will bridge technical gap - Nebo

he planned apprenticeship scheme by the Ministry of Power will bridge the technical gap in the power sector, according to Minister of Power, Prof. Chinedu Nebo. The minister said in Abuja that the scheme was conceived by the ministry to train artisans, filters, machinists, linesmen, sub-station operators

and joineries. "There exists a huge gap, which we need to fill, otherwise foreigners will take over this sector. Qualified and skillful Nigerians will also be needed in the area of renewable energy. "It is a huge way of advancing the local content capacity of our people. If we can train our people, why do we need to bring from abroad technicians, when our people can do the job?”

he said in a statement issued on his behalf by the ministry's Deputy Director of Press, Mr Timothy Oyedeji. According to him, when trained, the staff would be a driving force to take the power sector to higher heights. Nebo said he had on assumption of duty discovered a near hopeless situation on the technical side of the sector, with over 16 years of non-engagement

Chinedu Nebo of engineers. He said the sector then was filled with sick and incapacitated workers, with no hope of being replaced by competent hands.

2015 March, SweetcrudeReports

Labour

Shell donates N21m to entrepreneurs in Rivers MKPOIKANA UDOMA

h e S h e l l Petroleum Development Company, SPDC, has donated N21 million to 105 youths of Ogoniland, who graduated recently after three months of LifeWIRE entrepreneur and skill acquisition programmes. Presenting the cheque and starter-packs to the graduating entrepreneurs in Bori, Khana Local Government Area of Rivers State, the Managing Director of SPDC and Country Chairman of Shell Companies in Nigeria, Mr. Mutiu Sunmonu, said it was another milestone by his organisation to further impact meaningfully in the lives of the people in the company's business communities. Sunmonu, who was represented at the event by Mr. Nedo Osayande, Shell’s General Manager on Sustainable Development and Community Relations, said LifeWIRE Nigeria is a flagship programme for youth enterprise development intervention in Nigeria. Mr. Osayande said the management of Shell has retained the services of local consultants to mentor the entrepreneurs for one year following their graduation. He said: "Its indeed a remarkable day for the 105 trainees who are graduating today after three months of intensive training in various skills areas and another five days training on the Shell LifeWIRE programme. We are happy about the successful completion of the LifeWIRE training programmes, and are pleased to see this group of young entrepreneurs' startup business that will contribute to the economic d e v e l o p m e n t o f communities". “ A s a f u r t h e r demonstration of our commitment to the LifeWIRE programme, SPDC JV has retained the service of competent local consultants to mentor our young entrepreneurs for one

Skills acquisition programme year following today's graduation. Each graduate will also receive from SPDC JV, the first trench of the start-up grant and some materials and equipments to assist them in establishing their businesses. “LifeWIRE Nigeria is our flagship programme for youth enterprise development intervention in Nigeria and has won several awards

locally and internationally. Over the years, the programme has also undergone some improvements. For example: it now provide access to an incubation centre to support growth and establishment of new business, mentoring by already successful entrepreneurs, an alumni network and Shell supplier

opportunities”. In his remarks, the Paramount Ruler of Tai and Chairman Rivers State Council of Traditional Rulers, H.R.M. Gbenemene Godwin Giniwa, commended Shell for the initiative targeted at improving the socio-economic wellbeing of the Ogoni youths. Giniwa, who was represented by the Secretary

General of the Supreme Council of Ogoni Traditional Rulers, King Sunday Tane, also advised the benefiting youths to make good use of the opportunity given them through the LifeWIRE programme. “Gbenemene Godwin Giniwa said that I should tell you he was impressed with the way you comported yourselves during this training.

NAPTIN upgrades facilities to provide quality workforce for power sector …To leverage on NERC’s ‘no objection’ clause on job retention

he National Power Training Institute of Nigeria, NAPTIN, says it has upgraded its training facilities to provide up-todate training modules to its students, with the aim of providing quality workforce for the power sector. It is also working on a Memorandum of Understanding, MoU, with the Nigerian Society of

Engineers, NSE, to have students from the institute tested and certified by the society. Director General of NAPTIN, Mr. Reuben Okeke, made these known during a meeting with members of the society, where he also announced plans by the institute to take advantage of a clause in the Nigerian Electricity Regulatory Commission, NERC, rules for power sector

operators, in ensuring that operators in the sector do not resort to importing skills into the country whereas such skills existed in the country. Under NERC's 'no objection clause', operators could only import skills into the nation's power sector with the clearance of the commission and such skills could only be imported when such skills are not available or are inadequate in the

country, According to Okeke, the clause is aimed at growing in-country skills and retaining jobs for Nigerians in the sector, a development, he said, was in line with the activities of NAPTIN, which is concerned with improving in-country skills reserves to retain jobs for Nigerians in the power sector.

Labour

2015 March, SweetcrudeReports

Refinery

he Independent Petroleum Marketers Association of N i g e r i a , IPMAN, says it would not allow further interruption in the petroleum products supply chain in the country as it harped on the sensitivity of fuel supply in the weeks ahead of the up-coming March 28 presidential election. With the fuel scarcity which hit the nation last month just coming to an end, the association said it would work to ensure "free flow of petroleum products at all times". IPMAN gave these hints as its western zonal executive recently set up a caretaker committee to pilot the affairs of the association in the zone for the next three months. The setting up of the committee followed the shift of the nation's general elections from the original February date to March, which forced IPMAN to also reschedule its western zonal elections originally scheduled for March 24. In a letter empowering the new committee, which was signed by the Zonal Chairman, Mr. Debo Ahmed and Zonal Secretary, Mr.

IPMAN sets up Committee to avert fuel supply interruption Mark Alaba Obu, the association charged members of the committee to work to ensure there are no disruptions in fuel supply. The letter read: “IPMAN western zone hereby constitutes a caretaker committee for Ore Depot to pilot the affairs of IPMAN Ore Depot for the next three months effective from March 13, 2015 at the first instance.”

“The Zonal Executive Council took this decision on the grounds that the IPMAN Ore Depot election had earlier been fixed for March 24, 2015 without envisaging the shift in Nigeria’s general election now slated for March 28, 2015 and the security situation usually accompanying the period of general election”. It added: "Nigeria is just

coming out of a fuel scarcity situation and IPMAN will not allow further interruption in the supply chain. "Your committee is hereby mandated to ensure that we have free flow of petroleum products at all times”. According to the association, it was not ready to allow the shift in its election to put the depot

administration in vacuum, hence the constitution of the caretaker committee, in line with the association’s constitution. Also, IPMAN said the shifting of the election was in line with the judgement in the suit no HOR/21/2014 on the 23rd day of October 2014 by His Lordship Hon. Justice A. Adegoroye of Ondo State High Court of Justice, Ore judicial division.

Low Oil Prices: US energy producers shed more jobs

he US oil and gas sector bled away more jobs last month as sustained low oil prices forced energy producers to reduce spending, suggesting that further pain may be ahead for the struggling industry. A roughly 50% drop in oil prices since June has pummelled the US oil sector, prompting a

quick drop in activity. The number of oil rigs active in the US has fallen 40% since October. The mining sector of the workforce, which includes oil and gas workers, fell by 9300 to 844,500 last month, according to the Labour Department’s February payrolls, driven by a fall in oil and gas drilling activity. The losses added to a 5,800 drop in January,

Reuters reported. Jobs in the oil-extraction sub-sector, which includes rig workers, dropped 1100 to 198,300, adding to a 1800 drop in January. Support activities for mining, which includes oil and gas workers, fell 7,400. That made the energy sector a rare black mark in the jobs report, which showed non-farm payrolls soaring 295,000 last month,

beating expectations, and the jobless rate falling to a more than 6-1/2-year low of 5.5%. Job losses in the oil and gas sector have been relatively modest since June, in part due to the lag between falling crude prices and job cuts. But the last two months suggest the speed of the cuts may be increasing as prices remain depressed.

Solid Mineral

2015 March, SweetcrudeReports

Steel manufacturers lament hike in electricity tariff OSCARLINE ONWUEMENYI

h e S t e e l Manufacturing Group of the Manufacturers Association of Nigeria, MAN, may shut down operations in the face of persistent hike in electricity tariff without commensurate increase in power supply. The group is lamenting that the hike in electricity tariff has crippled many steel companies in the country. The Chairman of the MAN Steel Manufacturing Group, Sunil Goel, who stated this at a presentation during a stakeholders’ meeting organised by the Nigerian Electricity Regulatory Commission, NERC, in Abuja, urged the commission to revert to the previous Multi-Year Tariff Order, MYTO, that was scheduled to run till 2017. Goel said, “We want to reiterate the following obvious facts and the impacts of the new hike on electricity tariff on our production and its adverse effects on our planned long-term projections which were actually based on MYTO 2012 - 2017.” He said the five-year plan of the 2012 - 2017 MYTO actually formed the basis for the industries and

Steel making plant manufacturers’ long term plan which is being disrupted by the current MYTO review, adding that, “As we are not informed of the revocation of the MYTO order, we consider your sudden action unfair to our members.” Goel said the increase

between 44% and 45% was too astronomical and has only served to make life difficult for its members. According to him, “The market/consumers will not be able to absorb any increase as the market is already saturated.”

The group said the steel industries are presently operating on a low profit margin of less than N1 per kilogramme, and that cannot sustain a N7 – N8 differential prices amongst competing companies; they appealed to NERC to

Unions want National Assembly to stand up for Ajaokuta Steel ELUONYE KONYEGWUAEHI

he Steel and Engineering Workers of Nigeria, SEWUN, and its Iron Steel Senior Staff Association of Nigeria, ISSSAN, counterpart have called on the National Assembly to champion the drive to complete the Ajaokuta Steel Plant because of its importance to the nation, especially in this period of falling crude of prices. The two unions faulted perceived calculated attempts by individuals

and groups with foreign interests to run down the plant and ensure Nigeria did not join the league of steel producing giants, to the detriment of the economic development of the country. Speaking on behalf of unions, President of ISSSAN, Mr. Otori Saliu Maliki, recalled alleged unfounded claims by the Chairman of the Board of Assets Management Company of Nigeria, AMCON, Alhaji Kola Belgore, on September 1, 2014, that the Federal Government was wasting N3.4 billion monthly to pay workers of Ajaokuta Steel Company, ASC, in Kogi State,

for doing nothing. According to the unions, this strange claim was contrary to the fact that what was captured in the 2014 appropriation Act for A S C , w a s N3,821,718,510.00 for a year for personnel cost, asking “where did Belgore get his figure from?” The unions lamented that less than five months after, the event from the floor of the House of Representatives and the action of a civil society group on the same matter, have convinced them that "our Breton Wood detractors are still in action

a n d w e a r e determined to expose them.” Maliki contended that all these were coming when there were realistic and concrete efforts by the workers at keeping the plant facilities intact and serviceable as well t h e o n g o i n g rehabilitation works on the plant's light section mill and the thermal power plant preparation for operation.

approve a uniform tariff for all steel manufacturers in Nigeria regardless of their location to harmonise the system. Meanwhile, the Director General of the Budget Office of the Federation, Bright Okogu, also lamented the sudden increase in electricity bills, saying the office since 2013, had N700,000 to less than N1million bills monthly, only for the bill of September 2014 to read N3.3 million. Okogu said the bill had risen to N7.6 million by January 2015 adding that, “This was attributed to increase in electricity tariff from N22 to N35. This explanation is not tenable as the increase is 59% which should not result in 100% increase as indicated in the bill.” In his response, NERC Chairman, Dr. Sam Amadi said the regulator had advertised the review processes many times on radios, its website and newspapers.

Freight

2015 March, SweetcrudeReports

Surveillance camera at the port

he Nigerian M a r i t i m e Administration and Safety A g e n c y , NIMASA, which is targeting 90 per cent compliance of Nigeria's port facilities to the International Ship and Port Facility Security, ISPS, code this year, has said the level of compliance has now reached 83 per cent. The maritime agency had said towards the end of 2014 that the 90 per cent compliance would be achieved through continuous Verification Inspection Exercise, VIE, of port facilities in order to maintain implementation pace and focus on continuous improvement. NIMASA, however, announced recently that the compliance level has attained 83 percent, up from just 7 per cent in the last two years. Director General of NIMASA, Ziakede Patrick Akpobolokemi, who dropped this hint in Lagos, said the advantage of the development is that it has provided better environment for port operations.

ISPS Code compliance level hits 83% — NIMASA He added that the agency has adopted the ISPS code regulation, developed guidelines and quick reference cards to enhance assessment, inspection enforcement and monitoring inspection on a regular basis to ensure continuous improvement. Said he: “The improved

x e c u t i v e Secretary of the N i g e r i a n Shippers” Council, Mr. Hassan Bello, has disclosed plans to reclaim over 300,000 metric tonnes of transit cargoes Nigeria has, hitherto, lost to ports of neighbouring countries. Bello said efforts in this regard were already yielding result while some landlocked countries were currently routing their

International Ship and Port Facility Security Code compliance level in Nigerian ports and terminals has pitched those benefiting from the status quo against the agency. “Since the Federal Government under President Goodluck

Jonathan administration appointed the agency as the Designated Authority for the implementation of the ISPS Code in the country, the compliance level rose from 7 per cent to 83 percent within two years”. According to Akpobolokemi, the compliance level has

eliminated wharf rats, hawking and even touting at the ports while, unlike in the past, when imported goods often arrived the country in bad shape, importers could now be sure that their goods would arrive the ports and reach them intact.

‘Shippers Council redressing cargo loss to neighbouring countries’ import cargoes through Nigerian ports. Efficiency was also returning to the Nigerian ports and the confidence of importers in landlocked countries was gradually building up, he stated. He said: “We have always emphasised the issue of competition and efficiency,

so transit cargoes are won and lost through efficiency of a port. “Long before Nigerian ports were concessioned, the Nigerian ports were really inefficient and some landlocked countries that patronised Nigerian ports had to resort to neighbouring countries to transit their

cargoes. “Even though the movement of their through ports of neighbouring countries does not make sense to them in term of proximity and cost and other economy scale, it is preferable that they have their goods imported through Nigerian ports.

2015 March, SweetcrudeReports

Freight

Establish more shipyards, stakeholders urge govt …Say move will tackle unemployment

igerian ship owners have advised the F e d e r a l Government to establish more shipyards as part of measures to tackle unemployment in the country. The chairman, planning committee of the 2015 Nigeria Maritime Expo, NIMAREX, Prince Ayorinde Adedoyin, made the call in Lagos, saying the est a b lishm ent of m ore shipyards in Nigeria would help solve the problem of unemployment because a large workforce is required in the operation of shipyards. Adedoyin, a Lagos-based ship owner, who is also the Managing Director and Chief Executive Officer of Peace Gate Group, asked the government to adopt, in this regard, the Brazilian model which, according to him, required ships meant for long-term contracts in Brazil to be built in the country. Adedoyin explained that shipyards offer jobs to maintenance engineers, technicians, spare-parts dealers, drivers, doctors, nurses, caterers, and many others he stressed the importance of enforcement of the Nigerian Cabotage Law

Shipyard to offer advantage to local players in the maritime sector. He said: “Let me use Brazil as an example. The law says categorically that any vessel that would do a long-term contract in Brazil must be built in Brazil. See how many

shipyards in the world that ran to Brazil to go and set up shipyards. See how many thousands of jobs that they’ve created". “Why do we find it very difficult to enforce the law that we have written? If we

enforce it, it would be beneficial to us. If there is a shipyard, you will have direct workers. You will have suppliers. You have suppliers to supply. You would have food vendors. See the chain,” Adedoyin added.

'NSDP training programme uninterrupted’ KUNLE KALEJAYE

he Nigeria Seafarers Development Programme, NSDP, in Philippines ‎was ongoing as scheduled, the Nigerian Maritime Administration and Safety Agency, NIMASA, has clarified. NIMASA's explanation follows media reports that some seafarers have been rejected in Philippines due to non-payment of their tuition fees by NIMASA. In a statement signed by the Deputy Director, Public Relations, Mr. Isichei

Osamgbi, NIMASA said, "There have been reports in some sections of the media alluding that beneficiaries of the Nigeria Seafarers’ Development Programme (NSDP) in the Philippines under the sponsorship of the Nigerian Maritime Administration and Safety Agency (NIMASA) have been ejected from their various schools owing to the inability of the Agency to pay their school fees. "Nothing can be further from the truth than this assertion. To put the records straight, the school fees and other allowances of the NSDP

beneficiaries in all the institutions of their studies is not only budgeted for, but are also paid up to date with all the students in the various institutions undergoing regular trainings uninterrupted. "For the avoidance of doubts, all the schools training the Nigerian NSDP beneficiaries in the Philippines are standard institutions with websites for communication and enquiry purposes. "Journalists may therefore wish to contact the University of Perpetual Help Laspinas, the University of

Lyceum and the University of Cebu directly for the correct position of these cadets should they require further clarification."

He lamented that many trained seafarers in the country were jobless due to lack of vessels in which they could work and also noted that the average ship owner in the country had been reduced to begging for jobs that are theirs by right, given the provisions of the Cabotage Act 2003 and the Local Content Act. Adedoyin called for strict enforcement of Cabotage Law and the Nigerian Local Content Law to address the ugly situation.

There have been reports in some sections of the media alluding that beneficiaries of the Nigeria Seafarers’ Development Programme in the Philippines under the sponsorship of the Nigerian Maritime Administration and Safety Agency have been ejected from their various schools owing to the inability of the Agency to pay their school fees

Motoring

f self-driving technology has seemed more like science fiction than fact so far, it's because of not just the limits of the software, but the legal rules as well. All trials of selfdriving vehicles in the United States so far have involved a handful of corporate employees in just a few states, and even then the results look like a new form of cruise control rather than something that could change how we live. Today, Volvo announced a real, on-the-streets test of 100 of its self-driving cars — a first in the world, and one that will put regular owners in the seats of what it says are production-ready autonomous vehicles, by 2017. Doing so requires far more than the 28 cameras, sensors and lasers Volvo says its system uses, along with a complex set of software rules, to tackle nearly 100 percent of all driving situations. It also required the approval of lawmakers in Sweden and Gotheberg, the city which will allow owners of these Volvos to legally cruise the streets while reading or chatting away on their phones from behind the wheel. Making it possible for computers to understand everyday driving situations requires multiple types of radars, several cameras, a multiple-beam laser scanner in the front bumper and 12 ultrasonic sensors — the kind normally used to tell you if you're about to back into a pole. All of these are permanently linked to a special high-definition 3D map, refined GPS sensors and the local traffic control office — which can not only warn of jams, but command inattentive drivers to shut off their autopilots and drive themselves if necessary. And all of the systems have failsafe modes and backups in case something goes wrong. “It is relatively easy to build and demonstrate a selfdriving concept vehicle," says Erik Coelingh, a technical specialist at Volvo Cars, "but if you want to create an impact in the real worldyou have to design and produce a complete system that will be safe, robust and affordable for ordinary customers." Volvo has long said self-

2015 March, SweetcrudeReports

Volvo vows to put first self-driving cars in customers' hands by 2017

driving cars were the logical next step in its stated goal of eliminating deaths and serious injuries in its vehicles. While all major automakers and companies like Google are

also exploring the technology, none have been quite as forward as Volvo in predicting when it will come to fruition; most major automakers have said it

would be at least 2020 to 2025 before fully self-driving vehicles were in production, due to legal hurdles as much as technical ones. If the company that invented the

three-point seat belt can perfect self-driving cars, that traffic jam could break much sooner.

2016 Audi R8 ups the supercar ante with 610 hp, all-electric edition

n the annals of supercars, the Audi R8 has always suffered from the curse of the tweener. While successful in racing, it's overshadowed by the Le Mans-dominating Audi diesel race cars; inside the Volkswagen empire, the shadow comes from the Lamborghinis that use the same V-10. With Porsche assimilated into VW, there's even more potential for internecine thunderstealing. So Audi decided to ensure the new R8 has thunder to spare. The 2016 model that will be shown live for the first time in Geneva next week hones the R8 into more of a pure sportscar. The V-8 editions are cast out (for now); the only power source is the V10, either in 540 hp or 610 hp states of tune, equal to what's granted those flashy Italian models. Power runs through a refreshed sevenspeed automatic transmission and a bolstered Quattro all-wheel-

drive system which will route all of it to either the front or rear axles as called for. And the revised aluminum-and-carbon fiber chassis sheds 110 lbs. from the first generation R8 — a necessary move, as it's the basis for the GT3 race-car edition. The result: the R8 now hits 62 mph in 3.2 seconds, a half-second faster than before, with a top speed of 205 mph — the fastest car to ever wear the four rings from the factory to the public road. In typical Audi fashion, the styling changes inside and out involve alterations rather than renovations — although the new R8 face looks tauter in every direction, the dimensions have barely changed. Other supercar brands can cite their low volume as a reason to skimp on amenities despite their price tags, but Audi has a luxury reputation to uphold, and throws every option it has at the R8, from carbon-ceramic brake discs to custom-stitched Alcantara headliner to in-car WiFi for what must be the world's most blasé passengers. And in a nod to the real world, the V10 now features both cylinder deactivation and a "coasting" mode to save that

precious high-octane fuel. The GT3 version of the R8 due next year will use 50 percent of the road car's parts, including a detuned version of the V10. While the R8 V10 eschews the modern trend toward hybrid supercar power, Audi says it will build allelectric versions on the R8 on order. The new R8 e-tron is the first car from an e s t a b l i s h e d manufacturer to hold more electric power than a Tesla Model S — 92 kWh, which Audi

says gives the e-tron a range of 279 miles, and can be recharged in two hours with Audi's high-energy charger. The e-tron is slower than the V-10 — 3.9 seconds to 62 mph, and a top speed limited to 155 mph — and Audi will only build them upon request, at a price that wasn't disclosed but is guaranteed to be breathtaking. It's the kind of engineering muscle-flexing that's not possible in Maranello or Sant'Agata or Stuttgart, and with the new R8, Audi has made it clear it wants to be second to none.

Technology

n electric power generation a combined cycle is an assembly of heat engines that work in tandem from the same source of heat, converting it into mechanical energy, which in turn usually drives electrical generators. The principle is that after completing its cycle (in the first engine), the working fluid of the first heat engine is still low enough in its entropy that a second subsequent heat engine may extract energy from the waste heat (energy) of the working fluid of the first engine. By combining these multiple streams of work upon a single mechanical shaft turning an electric generator, the overall net efficiency of the system may be increased by 50 â&#x20AC;&#x201C; 60 percent. That is, from an overall efficiency of say 34% (in a single cycle) to possibly an overall efficiency of 51% (in a mechanical combination of two (2) cycles) in net Carnot thermodynamic efficiency. This can be done because heat engines are only able to use a portion of the energy their fuel generates (usually less than 50%). In an ordinary (non combined cycle) heat engine the remaining heat (e.g., hot exhaust fumes) from combustion is generally wasted.

Combining two or more thermodynamic cycles results in improved overall efficiency, reducing fuel costs. In stationary power plants, a widely used combination is a gas turbine (operating by the Brayton cycle) burning natural gas or synthesis gas from coal, whose hot exhaust powers a steam power plant (operating by the Rankine cycle). This is called a Combined Cycle Gas Turbine (CCGT) plant, and can achieve a best-of-class real (HHV see below) thermal efficiency of around 54% in base-load operation, in contrast to a single cycle steam power plant which is limited to

2015 March, SweetcrudeReports

Combined cycle power generation

topping and bottoming cycles

efficiencies of around 3542%. Many new gas power plants in North America and Europe are of this type. Such an arrangement is also used for marine propulsion, and is called a combined gas and steam (COGAS) plant. Multiple stage turbine or steam cycles are also common. Other historically successful combined cycles have used hot cycles with mercury vapor turbines, magnetohydrodynamic generators or molten carbonate fuel cells, with steam plants for the low temperature "bottoming" cycle. Bottoming cycles operating from a steam condenser's heat exhaust are theoretically p o s s i b l e , b u t uneconomical because of the very large, expensive equipment needed to extract energy from the small temperature differences between condensing steam and outside air or water.

However, it is common in cold climates (such as Finland) to drive community heating systems from a power plant's condenser heat. Such cogeneration systems can yield theoretical efficiencies above 95%. In automotive and aeronautical engines, turbines have been driven from the exhausts of Otto and Diesel cycles. These are called turbocompound engines (not to be confused with turbochargers).

turbine power plant cycle is the topping cycle. It depicts the heat a n d w o r k transfer process taking place in h i g h temperature region. The cycle a-b-cd-e-f-a which is the Rankine steam cycle takes place at a low temperature and is known as the bottoming cycle. Transfer of heat energy from high temperature exhaust gas to water and steam takes place by a waste heat recovery boiler in the bottoming cycle. During the constant pressure process 4-1 the exhaust gases in the gas turbine reject heat. The feed water, wet and super heated steam absorb some of this heat in the process a-b, b-c and c-d.

Steam Generator The steam power plant gets its input heat from the high temperature exhaust

gases from gas turbine power plant.[1] The steam thus generated thus can be used to drive steam turbine. The Waste Heat Recovery Boiler (WHRB) has 3 sections: Economiser, evaporator and superheater The efficiency of a heat engine, the fraction of input heat energy that can be converted to useful work, is limited by the temperature difference between the heat entering the engine and the exhaust heat leaving the engine. In a thermal power station, water is the working medium. High pressure steam requires s t r o n g , b u l k y components. High temperatures require expensive alloys made from nickel or cobalt, rather than inexpensive steel. These alloys limit practical steam temperatures to 655 Â°C while the lower temperature of a steam plant is fixed by the temperature of the cooling water. With these limits, a steam plant has a fixed upper efficiency of 35% to 42%. An open circuit gas turbine cycle has a compressor, a combustor and a turbine. For gas turbines the amount of CONTINUES ON PAGE 43

Basic Combined Cycle The thermodynamic cycle of the basic combined cycle consists of two power plant cycles. One is the Joule or Brayton cycle which is a gas turbine cycle and the other is Rankine cycle which is a steam turbine cycle.[1] The cycle 1-23-4-1 which is the gas

Heat transfer from hot gases to water and steam

2015 March, SweetcrudeReports

Technology

Combined cycle power generation CONTINUED FROM PAGE 42

metal that must withstand the high temperatures and pressures is small, and lower quantities of expensive materials can be used. In this type of cycle, the input temperature to the turbine (the firing temperature), is relatively high (900 to 1,400 °C). The output temperature of the flue gas is also high (450 to 650 °C). This is therefore high enough to provide heat for a second cycle which uses steam as the working fluid (a Rankine cycle). In a combined cycle power plant, the heat of the gas turbine's exhaust is used to generate steam by passing it through a heat recovery steam generator (HRSG) with a l i v e s t e a m temperature between 420 and 580 °C. The condenser of the Rankine cycle is usually cooled by water from a lake, river, sea or cooling towers. This temperature can be as low as 15 °C.

Typical size of CCGT plants For large-scale power generation, a typical set would be a 270 MW gas turbine coupled to a 130 MW steam turbine giving 400 MW. A typical power station might consist of between 1 and 6 such sets. Plant size is important in the cost of the plant. The larger plant sizes benefit from economies of scale (lower initial cost per kilowatt) and improved efficiency. Gas turbines of about 150 MW size are already i n o p e r a t i o n manufactured by at

Working principle of a combined cycle power plant (Legend: 1-Electric generators, 2-Steam turbine, 3-Condenser, 4-Pump, 5-Boiler/heat exchanger, 6-Gas turbine)

least four separate groups – General Electric and its licensees, Alstom, S i e m e n s , a n d Westinghouse/Mitsubish i. These groups are also developing, testing and/or marketing gas turbine sizes of about 200 MW. Combined cycle units are made up of one or more such gas turbines, each with a waste heat steam generator arranged to supply steam to a single steam turbine, thus forming a combined cycle block or unit. Typical Combined cycle block sizes offered by three major manufacturers (Alstom, General Electric and Siemens) are roughly in the range of 50 MW to 500 MW and costs are about $600/kW.

then in to economiser section as it flows out from the boiler. Feed water comes in through the economizer and then exits after having attained saturation temp in the water or steam circuit. Finally it then flows through evaporator and super heater. If the temperature of the gases entering the heat recovery boiler is higher, then the temperature of the exiting gases is also high.

Dual Pressure boiler

It is often desirable if high heat is recovered from the exiting gases. Hence dual pressure boiler is employed for this purpose. It has two water/steam drums. Low pressure drum is connected to low pressure economizer or evaporator. T h e l o w pressure steam is generated in low temperature zone. The low pressure steam is supplied to the low temperature turbine. Super heater can be provided in the low pressure circuit. Some part of the feed water from the lowpressure zone is

transferred to the highpressure economizer by a booster pump. This economizer heats up the water to its saturation temperature. This saturated water goes through the hightemperature zone of the boiler and is supplied to the high-pressure turbine.

Supplementary firing and blade cooling Supplementary firing may be used in combined cycles (in the HRSG) raising exhaust temperatures from 600 °C (GT exhaust) to 800 or even 1000 °C. Using supplemental firing will however not raise the combined cycle efficiency for most combined cycles. For single boilers it may raise the efficiency if fired to 700–750 °C; for CONTINUES ON PAGE 44

Heat exchange in dual pressure heat recovery boiler

Unfired Boiler The heat recovery boiler is item 5 in the COGAS figure shown above. No combustion of fuel means that there is no need of fuel handling plant and it is simply a heat exchanger. Exhaust enters in super heater and the evaporator and Steam turbine plant lay out with dual pressure heat recovery boiler

2015 March, SweetcrudeReports

Technology

Combined cycle power generation CONTINUED FROM PAGE 43

multiple boilers however, supplemental firing is often used to improve peak power production of the unit, or to enable higher steam production to compensate for failure of a second unit. M a x i m u m supplementary firing refers to the maximum fuel that can be fired with the oxygen available in the gas turbine exhaust. The steam cycle is conventional with r e h e a t a n d regeneration. Hot gas turbine exhaust is used as the combustion air. Regenerative air preheater is not required. A fresh air fan which makes it possible to operate the steam plant even when the gas turbine is not in operation, increases the availability of the unit. The use of large supplementary firing in Combined Cycle Systems with high gas t u r b i n e i n l e t temperatures causes the efficiency to drop. For this reason the Combined Cycle Plants with maximum supplementary firing are only of minimal importance today, in comparison to simple Combined Cycle installations. However, they have two advantages that is a) coal can be burned in the steam generator as the supplementary fuel, b) has very good part load efficiency. The HRSG can be designed with supplementary firing of fuel after the gas turbine in order to increase the quantity or temperature of the steam generated. W i t h o u t

supplementary firing, the efficiency of the combined cycle power plant is higher, but supplementary firing lets the plant respond to fluctuations of electrical load. Supplementary burners are also called duct burners. More fuel is sometimes added to the turbine's exhaust. This is possible because the turbine exhaust gas (flue gas) still contains some oxygen. Temperature limits at the gas turbine inlet force the turbine to use excess air, above the optimal stoichiometric ratio to burn the fuel. Often in gas turbine designs part of the compressed air flow bypasses the burner and is used to cool the turbine blades. Supplementary firing raises the temperature of the exhaust gas from 800 to 900 degree Celsius. Relatively high flue gas temperature raises the condition of steam (84 bar, 525 degree Celsius) thereby improving the efficiency of steam cycle.

Fuel for combined cycle power plants The turbines used in Combined Cycle Plants are commonly fueled with natural gas. The improvement in shale gas extraction has increased gas supplies

thermal efficiency offered by a Rankine bottoming cycle.

Low-Grade Fuel for Turbines

a n d r e s e r v e s dramatically. Because of this fact, it is becoming the fuel of choice for an increasing amount of private investors and consumers because it is more versatile than coal or oil and can be used in 90% of energy applications. Chile which once depended on hydro-power for 70% of its electricity supply, is now boosting its gas supplies to reduce reliance on its drought afflicted hydro dams. Similarly China is tapping its gas reserves to reduce reliance on coal, which is currently burned to generate 80% of the countryâ&#x20AC;&#x2122;s electricity supply. Where the extension of a gas pipeline is impractical or cannot be economically justified, electricity needs in remote areas can be met with small-scale Combined Cycle Plants,

using renewable fuels. Instead of natural gas, Combined Cycle Plants can be filled with biogas d e r i v e d f r o m agricultural and forestry waste, which is often readily available in rural areas. Combined cycle plants are usually powered by natural gas, although fuel oil, synthesis gas or other fuels can be used. The supplementary fuel may be natural gas, fuel oil, or coal. Biofuels can also be used. Integrated solar combined cycle power stations combine the energy harvested from solar radiation with another fuel to cut fuel costs and environmental impact (look ISCC section). Next generation nuclear power plants are also on the drawing board which will take advantage of the higher temperature range made available by the Brayton top cycle, as well as the increase in

Gas turbines burn mainly natural gas and light oil. Crude oil, residual, and some distillates contain corrosive components and as such require fuel treatment equipment. In addition, ash deposits from these fuels result in gas turbine deratings of up to 15 percent. They may still be economically attractive fuels however, particularly in combined-cycle plants. S o d i u m a n d potassium are removed from residual, crude and heavy distillates by a water washing procedure. A simpler and less expensive purification system will do the same job for light crude and light distillates. A magnesium additive system may also be needed to reduce the corrosive effects if vanadium is present. Fuels requiring such treatment must have a separate fuel-treatment plant and a system of a c c u r a t e f u e l monitoring to assure reliable, lowmaintenance operation of gas turbines.

Community

2015 March, SweetcrudeReports

Shell implements N1bn Oloibiri health project to mark Nigeria’s centenary

hell has signed an agreement with General Electric f o r t h e implementation of a N1-billion health project as part of three initiatives to mark 100 years of nationhood by Nigeria. The project which is phased over three years aims to provide affordable and quality health care delivery through a population-wide approach in Ogbia Local Government Area in Bayelsa State. Using a Health System Strengthening model, the project will involve the delivery of care through a network of four primary health centres and one general hospital. It will also involve the establishment of a health research centre at Oloibiri to disseminate best practice for replication. A project steering committee has been set up comprising representatives of the Shell Petroleum Development Company of Nigeria Ltd, SPDC, General Electric, Bayelsa State Government, Federal University, Otuoke and Ogbia Local Government Council. “The Oloibiri project is one of the single biggest social investment initiatives we have undertaken in the Niger Delta and underlines our commitment to a better future for the people there,” said SPDC immediate-past Managing Director and exCountry Chair, Shell Companies in Nigeria, Mr. Mutiu Sunmonu, at the signing ceremony in Lagos. “We’re looking to see a holistic community health improvement in poverty alleviation, water and sanitation, safe/clean housing and household renewable energy among many others.” SPDC new Managing Director and Country Chair, Shell Companies in Nigeria, Mr. Osagie Okunbor, agreed. “This is a game changer in the provision of health care in the Niger Delta.” Lazarus Angbazo, President & CEO General Electric,

Former Managing Director, Shell Petroleum Development Company Nigeria Ltd. and Country Chair, Shell Companies in Nigeria, Mr. Mutiu Sunmonu (right); CEO, GE International Operations Nig., Mr. Lazarus Angbazo (second right); and others, at the signing of the Shell-funded N1billion Oloibiri, Bayelsa State Health Project in commemoration of Nigeria’s Centenary in Lagos.

Nigeria, said: “We’re pleased to act as implementing partner on a project that will significantly touch lives and improve the lot of community people.” The Bayelsa State Commissioner of Health Dr. Ayibatonye Owei and the Vice Chancellor of Federal

University, Otuoke, Prof. Mobolaji Aluko, pledged their support for the project. Shell’s Regional Health Manager for Sub-Saharan Africa, Dr. Femi Oduneye, said: “The envisaged model will focus on health and not just illness and focus at the grassroots to reduce

inequalities and ultimately increase life expectancy and quality of life. Our experience at Obio in Rivers State, where SPDC has successfully implemented a community health insurance scheme will be very useful here.” The two other projects Shell

is implementing to mark Nigeria’s centenary are a 200-seater library in Port Harcourt and upgrade of athletics infrastructure in five secondary schools in Delta State. All the three projects are estimated at N2 billion.

MOSOP raises committee on UNEP Report, oil production resumption in Ogoniland MKPOIKANA UDOMA

he Movement for the Survival of the Ogoni People, MOSOP, has in compliance with last month's resolution of the Ogoni National Congress, set up a 15-member consultative committee on the implementation of UNEP reports and the controversial resumption of oil production in Ogoniland.‎ The committee’s mandate is to further consultation across Ogoniland and interface with different groups and interested investors in petroleum and

other development in the area, especially relating to Shell’s publicised divestment. The committee is to make recommendations to the National Congress of the Ogoni people.‎ President of MOSOP, Mr. Legborsi Saro Pyagbara‎‎ in a statement said the committee has Professor Johnson Nnaah and

Barrister Mike Karikpo as Chairman and Secretary, respectively. Other people serving on the committee include the Vice Chancellor of the Rivers State University of Science and Technology, Prof. Barineme B. Fakae; a social a ct i v i st . Mr. C e l e st i ne Akpobari, amongst others.

2015 March, SweetcrudeReports

Community

MKPOIKANA UDOMA

ome land-owners affected by oil spills in Gokana L o c a l Government Area of Rivers State, say they should be given preferential treatment in the implementation of the United Nations Environment Programme, UNEP, reports, which had recommended a clean-up of Ogoniland. The land-owners, under the a e g i s o f G o k a n a Environmental Welfare Association, GEWA, made the demand at a joint pressbriefing in Port Harcourt, with an environmental right group in the Niger Delta, known as the Agape Birthright Organisation. One of the affected landowners who spoke on behalf of GEWA, Chief Fyneface Faa, called on Ogoni stakeholders to allow individual landowners and families to discuss directly with prospective oil companies wishing to resume oil exploration activities in Ogoniland. “We demanded for justice, we should do so with clean hands and allow the deprived, the long-sufferings and the neglected landowners, who for decades sacrificed their lands which have been their only source of livelihood, to discuss and negotiate with those who want to take the oil on their lands, and those who wants to clean up their oildevastated lands under the UNEP reports or any other guise. "Consequently, we therefore demand not to be neglected or isolated in the p r o c e s s o f t h e implementation of UNEP report on the cleanup of Ogoniland,” he said. The Executive Director of Agape Birthright Organisation, Mrs. Ankio Briggs, said her organisation

Environmental pollution in Ogoniland

Ogoni landowners seek special treatment in UNEP Report implementation has obtained a power of attorney from the affected land-owners in Gokana, to speak and act on their behalf, on all matters concerning the planned resumption of oil production on their land and the implementation of the UNEP report. “We are concerned as far as Agape Birthright is concerned, and our legal department is concerned, so it

is a genuine concerned which is to say that so far they are not involved in the process of discussing how the UNEP report will be implemented, of which their land is also recognised in the UNEP report. “Therefore, I believe they have a case and we will of course get in touch with all the bodies that we need to get in touch with. They have

already written letters to the Federal Government and even to the President himself. So, we will get in touch with MOSOP as well as UNEP,” she said. Meanwhile, Ogoni persons living with disabilities have urged the management of Belema Oil Company Limited, who is prospecting to resume oil exploration and production activities in Ogoniland, not to apply the

NDDC partners Agip for sustainable development MKPOIKANA UDOMA

he Niger Delta Development Commission, NDDC, has promised to collaborate with the management of the Nigerian Agip Oil Company, NAOC, in order to tackle the challenges and achieve desired sustainable developmental results in the Niger Delta region.

Managing Director of the NDDC, Sir Bassey Dan-Abia, disclosed the plan while receiving the management team of NAOC, led by its General Manager, District, Mr. Paolo Carnevale, at the commission’s headquarters in Port Harcourt. The NDDC boss, who spoke in the presence of the NDDC management team drawn from the state offices and the

head office, described NAOC as strategic stakeholders and partners for the development of the Niger Delta region. “We are aware of the challenges faced by the oil companies; we are ready to collaborate with NAOC to overcome the current challenges. NDDC is ever ready to collaborate with any stakeholder for the

sustainable development of the Niger Delta region,” he said. Dan-Abia further pointed out that NDDC's door is open to NAOC and other companies operating in the region, in various areas of sustainable development in the region, especially at this period of dwindling oil price.

divide and rule approach which Shell was accused of using to cause crisis among the people of Ogoni. National Coordinator of Ogoni persons living with disabilities, Prince David Bari-ato at a press briefing in Bori called on the indigenous oil firm not to neglect people living with disabilities, as they plan to take over operations of Shell in Ogoniland. He accused Shell Petroleum Development Company, SPDC, of anti-people activities in Ogoniland. “We want Belema Oil to come on board and we are appealing to the Federal Government and the Ogoni community to give in to Belema Oil. Let’s allow our oil fields to be once again explored, and by Belema Company. And let the Ogonis partake in the wealth that is in the Ogoni soil. "Belema Oil should come on board, and let’s see how we will conclude all arrangements and have the Ogoni oil explored for the good of the Ogoni people,” Bari-ato said.

Community

2015 March, SweetcrudeReports

E-mail: johniyene@yahoo.com

POWER SECTOR:

A Darkling conspiracy hatched by thieving Discos

Oil pollution

Oil spill: Group seeks justice for Rivers community MKPOIKANA UDOMA

n environmenta l rights group under the auspices of Environmental Right Action/Friends of the Earth International, ERA/FoE, has restated its commitment in the struggle for the environmental emancipation of Goi community in Gokana Local Government Area of Rivers State. Goi community in Ogoniland had in 2003, 2004 and 2005 got impacted by crude oil spills from leakages in the Trans-Niger Pipeline, TNP, belonging to the Shell Petroleum Development Company, SPDC, which runs through neighbouring Bodo, K-dere and several other Ogoni communities to Bonny island. Executive Director of the group in Nigeria, Rev. Dr. Godwin Uyi Ojo disclosed this during a townhall meeting with the chiefs, traditional rulers and people of Goi community in BuaNumuu, Goi, Gokana Local Government Area. Ojo, who decried the level of environmental damages in Ogoniland caused by Shell, particularly in Gokana, said the ERA//FoE will not rest until every devastated community is duly compensated.

Goi community in Ogoniland had in 2003, 2004 and 2005 got impacted by crude oil spills from leakages in the TransNiger Pipeline, TNP, belonging to the Shell Petroleum Development Company, SPDC, which runs through neighbouring Bodo, K-dere and several other Ogoni communities to Bonny island He restated that ERA has won several court cases for devastated communities in Nigeria, and Goi community will not be an exception. According to him, “The plight you are facing here is not peculiar to Gokana alone, but also in almost all the communities of the federation. This is why ERA is working with almost every community. But the case of Goi community is very dear to the heart of ERA/Friends of the Earth, and we will keep coming until environmental justice is done". He added: "Your livelihood has been reduced to nothing unlike as it were in the days of our forefathers, and that course, we are ready to upturn it and this court case is one of the process. As many that has suffered one kind of injustices or other, whether your fish farm has been destroyed or your farmland has been

destroyed; compensation will be paid. Y o u r environment that has been destroyed and devastated will be cleaner and restored”. H e a l s o assured the community t h a t ERA/Friends of the Earth, will not receive any financial benefits from the people of Goi, in the event that compensation is paid. Also speaking, the representative of the Friends of the Earth Netherland, Mr. Geert Ritsema, assured the community that the group is working assiduously in the court case between Shell and Goi community. The ambassador for Friends of the Earth Netherlands reiterated that the success recorded in Bodo community which led to the £55 million compensation from Shell will be replicated in Goi community. “My organisation, Friends of the Earth Netherland, has already been working on your court cases since 2008 and we will continue until we have victory," he further stated, adding: "On the 12th of March, there will be an important hearing in the Appeal court in Hague.

t was a grand conspiracy that was hatched by fellow Nigerian citizens; their spouses and children are Nigerian and live in Nigeria like you and I. It was supposed to transpose Nigeria into the sphere of modern technology, providing the innovative minds the platform and stability of mind to unleash their creative energy. They assured Nigerians and a world weary of hoping Nigeria would break loose from the barnacles of underdevelopment, that this policy shift in the power sector would midwife Nigeria into a haven for modern technology. On paper and in theory, the unbundling of the federal government’s Power Holding Company into power gatherers, distributors and marketers, was a simple enough strategy to break the existing monopoly, foster specialisation and incentivise investment. And so these men, sat together, priced the assets of the PHCN as it suited their designs and awarded spheres of operational influence to themselves like a Sicilian mafia. The unfortunate techies and bureaucrats who survived the purge, that is, the whittling down of “an excessively redundant workforce” by the new owners of the privately owned power companies tell whoever they come in contact with that these are common thieves, adventurous upon the future of a whole nation. The Discos, as they are called in the current power dialectics, have not invested any fresh funds into the structures they acquired from the PHCN. The result is the power supply has diminished drastically. This situation notwithstanding, the Discos have joined the monopolistic interaction with their customers. Many households which have not acquired the new metres (the Discos like their predecessors in title present the ludicrous argument that power consumers have the duty to acquire from the providers, the metres with which their consumption can be monitored) suffer the monthly misfortune of estimated bills. Estimated bills are a nightmare, an assessor’s guestimate of a family’s consumption which can be as excessive as the amount of dislike in the assessor’s pouch for the family or as little as that family’s willingness to dance to the tunes of the Disco’s assessor. The consumer has no avenue for redress or for advancing the superior argument that it is the provider of power, the enterprise that has the need for computing input and output that has the responsibility to provide the system with metres. And so the customer suffers for the negligence of the service provider. Forget the story that unbundling PHCN would break the monopoly of the PHCN. Yes, the PHCN is gone but we have in its place, a group of marauding adventurers on our patrimony. Those who have acquired power metres are no less prone to the shenanigans of these new set of thieves. They have retained the “monthly fixed charge” of N735.00 enjoyed without reason by the PHCN. I have the misfortune of maintaining two metres, the one at home and the other in my D/Line office. D/Line residents rely on generators so the N5000.00 worth of electricity charged in November 2014 is still in the system. Of course, the firm has spent more than N50,000.00 on petrol and oils since then. Anytime the N5000.00 runs out, we shall be liable to the new power masters to the tune of N735.00 multiplied against the number of months we have had the audacity not to re-charge! Nobody in the government, the federal and state legislatures are speaking up for Nigerians. Increased power supply which was the sole incentive for breaking PHCN into competitive and diverse specialties is still a dream for Nigerians. A responsible government that cares for its people would initiate a robust monitoring system that would correct the abuses in the sector. Why do I have to pay N735.00 monthly to a company that has given me nothing and that has created no value to my production effort? Is there not an implied contract between me and the resident Disco that I shall have power until the value of power I charged runs out? What is my remedy if I am not supplied with power at all? Why indeed should I maintain a relation with a Disco that does not supply me with electricity? Why are we engaging a service provider that is not investing to improve on service delivery? Are we going to endure this perfidy against our just aspirations to develop a technological platform worthy of harnessing our creativity? Are we to continue as hostages to the unnecessary markets (for UPS machines, Voltage Protectors, Power Stabilisers, Inverters, Power Generators, etc.) that have sprung and feed needlessly on our Gross Domestic Product? How can we continue to endure the frequent destruction on our domestic and industrial equipment? Is there no limit to our endurance for suffering, for the manipulation of our aspirations as a people and to our acceptance of situations that can actually be corrected? The deregulation of a sector implies as in this situation that any entrepreneur can enter into a deal, say with the residents of Bode Thomas, Surlere for the steady supply to them of electricity. The entrepreneur can be Theophilus Emuwa, Mr. Bode Thomas himself, Eon or General Electric. It is the congruence on terms, not the imposition of a service provider that determines in a free economy who gets a service contract. If Nigeria is to meet any meaningful goals of development we have to engage for ourselves the best hands we can afford in the business and send these pretentious Discos into extinction.

2015 March, SweetcrudeReports