March edition 2016 by Sweetcrude reports

Finance

2016 March, SweetcrudeReports

CBN head-office, Abuja

KUNLE KALEJAYE

igeria's external reserves which stood at $34.47 billion as at December 31, 2014, declined by 15.67 percent in 2015, and is expected to deplete further in 2016, according to a report by Guaranty Trust Bank, GTB. The report, tagged 'Nigeria: Macroeconomic and Banking Sector Themes for 2016', said the nation's current external reserves of $29.07 billion would deplete for obvious reasons. "The country's external reserves which stood at $34.47 billion as at December 31 2014, declined by $5.4 billion (15.67%) to close the 2015 financial year at $29.07 billion on Deceber 31 2015. "With the price of oil, which account for more than 90 percent of the country's exports, hovering around $28 per barrel in January 2016 and backlogs of unmet foreign exchange demand, we expect further depletion of the reserves in 2016," the report said. It maintained that the

Nigeria's external reserves to deplete in 2016 â&#x20AC;&#x201D;Report ...Inflation to trend above 10% depletion of the external reserves will make Nigeria's economy unattractive for foreign investors. The report also stated that the crash in yields on treasury bills and uncertainty around the true pricing of the naira would suspend the inflow of capital into the economy. "The current negative real return in the local economy makes ?investment in Nigeria's assets by foreign portfolio investors unattractive," the report added. On national and subnational debts, the reports stated that 2016 might witness more debtrestructuring, recurring intervention funds, bail-out packages and pleas for debt reliefs/write-off for state government. The reason for increased

The past through effect of imported inflation arising from FX restrictions (imposed as part of the exchange rate policy) will likely add to inflationary pressure in 2016 debt-restructuring and pleas for debt relief and write-offs for state government, according to the report, is due to oil price fall and its attendant effect on the revenue of the country. To the cushion the effect of oil price fall on the

country's revenue, GTB in the report expects that most states would implement their Internally Generated Revenue, IGR, policy similar to the IGR model adopted by Lagos and Rivers States. ?Despite the Central Bank of Nigeria, CBN's, target to keep inflation at a single

digit, GTB reports stated that it was not sustainable. "We expect to inflation trend slightly above 10 percent in the first half of 2016 for two reasons. "The past through effect of imported inflation arising from FX restrictions (imposed as part of the exchange rate policy) will likely add to inflationary pressure in 2016. We believe that importers will source for FX from the parallel market to meet maturing obligations as they fall due, and them attempt to pass on the effect to consumers -atleast- on essential everyday products. "Even when they are able to purchase FX from the official market, the price of goods and services would still be m

2016 March, SweetcrudeReports

Finance

Price modulation, subsidy suspension yield N2.6bn for govt —Ex-PPPRA Chief OSCARLINE ONWUEMENYI

he suspension of the petrol subsidy and the r e c e n t introduction of the price modulation regime by the Petroleum Products Pricing Regulatory Agency, PPPRA, has yielded N2.6 billion for the Federal Government, former Executive Secretary of the agency, Mr. Farouk Ahmed, has stated. Ahmed, who disclosed this in Abuja shortly before leaving office, said the funds was paid into a special account in the Central Bank of Nigeria, CBN. He also disclosed that the government spent over N2 trillion on fraudulent fuel subsidy claims by the Nigerian National Petroleum Corporation, NNPC, major and independent petroleum products marketers at the end of 2011. Ahmed said price modulation regime has instilled efficiency in the system, noting that there are possibilities that the pump price of petrol will crash further in the second quarter going by the trend. He noted, “There are possibilities of Nigerians paying less for petrol in the second quarter of the year. The Minister of State will look at all the facts pragmatically and arrive at a just figure for petrol.” The outgoing PPPRA boss, however, explained that the delay in handing over was informed by the need to compile a comprehensive ha nd ov er not e for his successor in office in view of the price modulation regime that is still at its infancy. According to him, “As at February 12, 2016, because we verify based on what was imported, about N2.6 billion has accrued to that account. The fund is still low because most of the cargoes arrived in December last year. The PPPRA has already communicated to the appropriate authorities that we are in the regime of overrecovery.” He explained that so far, N8 has emerged as the average figure for the year, adding that as at Tuesday close of market, the subsidy on petrol was N13.81kobo over-recovery. "The PPPRA would now send a debit note to every marketer that falls within

Ahmed that bracket to refund the money to government. Farouk said, "There is already an account with the CBN, which is managed by the Accountant General of the Federation where all overrecovery funds are deposited. So, there is no question about where does the money from

over-recovery go." He explained that all the money that goes into the over-recovery account will also be used to pay for the subsidy when the price of crude oil soars in the international market. The erstwhile Executive Secretary, hinted that the

PPPRA would on March 15, begin to collate data on the trends in the industry between January and March to determine the components of the template for the second quarter. He added, “A meeting has been scheduled for next Tuesday with marketers on

the template and whatever is arrived at will form part of the next quarter template and the PPPRA will advise the Minister of State for Petroleum Resources appropriately.”

AFC increases stake in Cabeólica Wind Farm

frica Finance Corporation, AFC, has completed the purchase of InfraCo Africa’s stake in the Cabeólica Wind Farm. The deal follows the share purchase agreement signed on May 6, 2015 in which AFC agreed to purchase InfraCo Africa’s remaining stake in the project. Cabeólica is the first privately-financed sustainable wind farm on a commercial scale in subSaharan Africa. Operating across four of Cape Verde’s islands (Boa Vista, Sao Vincente, Sal

and Santiago) and consisting of over 30 wind turbines, it has a total installed capacity of 25.5MW, equivalent to around 20% of Cape Verde’s energy needs. To date, Cabeólica has generated over 300,000 MWh of clean wind power, transforming Cape Verde’s access to electricity. Prior to becoming operational, the islands suffered from chronic power shortages and were heavily dependent on imported oil, with only 2% of the country’s energy needs being sourced from

wind power. Today, Cape Verde benefits from a reliable and extended electricity grid. Andrew Alli, President/CEO of Africa Finance Corporation said: “We are very excited to take a larger part in this groundbreaking project. Cabeólica provides access to electricity for 360,000 people, which is about 72% of the Cape Verde population. "The project is staffed entirely by skilled Cape Verdean employees and with sustainability at its core; it has avoided an estimated 55,000 tonnes of carbon emissions a year and averted

the need to import 15 million litres of diesel a year. "The additional share purchase will allow further expansion and other uses of wind energy in Cape Verde. We are very proud of our growing work in addressing Cape Verde’s energy needs though sustainable measures, all the while seeking a competitive return on investment for our shareholders.”

2016 March, SweetcrudeReports

Finance

Refinery

IKE AMOS

igeria earned N1.393 trillion f r o m Petroleum Profit Tax, PPT, and royalties in 2015, according to the Central Bank of Nigeria, CBN, report which did not include figures for the month of December. The CBN, in its Economic Report for November 2015, stated that besides PPT and royalties, Nigeria earned N822.2 billion from crude oil and gas exports, N1.24 trillion from domestic crude oil and gas sales and N91.7 billion from other sources in the petroleum sector from January to November 2015.

Nigeria earns N1.4tr from petroleum tax, royalties In general, the CBN noted, Nigeria recorded gross oil revenue of N3.55 trillion in the 11-month period, accounting for 54.73 per cent of total federally-collected revenue of N6.484 trillion for the 11month period, while non-oil revenue of N2.935 trillion accounted for 45.3 per cent of total revenue. A breakdown of gross oil revenue showed that from January to June, the country

earned N486.4 billion, N359.7 billion, N364.6 billion, N286.2 billion, N267.2 and N285.6 billion respectively, while N369.4 billion, N314.9 billion, N265.2 billion, N271.1 and N278.3 billion was recorded in the months of July, August, September, October and November 2015 respectively. Furthermore, gross

federally-collected revenue for January 2015 stood at N692.1 billion; February, March, April, May and June recorded revenues of N554.8 billion, N808.7 billion, N472.2 billion, N462.5 and N462.6 billion respectively, while for the months of July, August, September, October and November, gross federallycollected revenue stood at

Anadarko Petroleum to sell $3bn in assets this year

n a d a r k o P e t r o l e u m Corporation rose after announcing plans to sell $3 billion in assets this year while cutting spending on new wells and other projects by almost 50 per cent as the oil and natural gas producer weathers the crude market collapse. Anadarko’s U.S. onshore activities will be reduced the most, by almost $2.5 billion, The Woodlands, Texas-based Anadarko said in a statement. Anadarko will also lower

its onshore rig count by 80 p e r c e n t t o f i v e . Internationally, the producer expects minimal funding in Mozambique in 2016 as it works toward a final decision on a liquefied natural gas project. "They have a lot of levers to pull, and they’re pulling them all," Subash Chandra, an analyst at Guggenheim Securities with a neutral rating on the stock, said in a phone interview. "The main risk was the risk of equity dilution, and that is now off the table."

Anadarko projects 2016 capital expenditures at $2.6 billion to $2.8 billion, almost 50 percent lower than last year. Nearly half of those investments are slated for onshore U.S. fields. Last month, Anadarko cut its dividend by 81 percent, the first reduction in company history. The change is expected to save about $450 million a year. “We intend this year to continue to improve our credit story and doing it without diluting our equity

story," Chief Executive Officer Al Walker said in a conference call to discuss the guidance. The company will focus more on managing debt than on expansion and acquisitions and doesn’t see a need to issue equity this year, Walker said. Asset sales and lower spending will help Anadarko toward its goal of spending "well within" cash flows and reducing net debt. Shares rose 1.7 percent to $38.61 at 10:27 a.m. in New York after earlier gaining 3.5 percent.

N679.3 billion, N682.6, N543.9, N478.2 billion and N646.6 billion respectively. Specifically, for the month of November, the CBN stated that Nigeria’s crude oil production, including condensates and natural gas liquids, stood at an average of 1.95 million barrels per day, mbd, or 58.50 million barrels in the review month. This, according to the CBN represented a decrease of 0.07 mbd or 3.5 per cent, below the average of 2.02 mbd or 62.62 mb, recorded in the preceding month. It further stated that crude oil export stood at 1.50 mbd or 45.00 mb and represented a decrease of 4.5 per cent, compared with 1.57 mbd or 48.67 mb in the preceding month. The fall in crude oil output, according to the CBN, was due to decreased production from onshore and shallow waters by the major oil companies in the joint venture operations due to current challenges, including cash call funding issues, sabotage and security challenges.

2016 March, SweetcrudeReports

Finance

TSA: Senate recommends termination of CBN, SystemSpec contract

Nigeria’s National Assembly in session

he Senate Joint Committee on F i n a n c e , B a n k i n g , Insurance and other Financial Institutions, and the Committee on Public Accounts on the Abuse and Mismanagement of the Treasury Single Account, TSA, regime recommended that the 2013 renewal contract between the Central Bank of Nigeria, CBN, and SystemSpecs be terminated. The joint committee also wants the transaction fee of one per cent for e-collections

and transfers be disregarded. Senate President, Bukola S a r a k i , s a i d t h e recommendations were contained in the report submitted by the committee to the Senate. “The investigation from the report recommends that the 2013 renewal contract between the Central Bank of Nigeria (CBN) and SystemSpecs be terminated immediately, and the transaction fee of one per cent (1%) for e-collections and transfers be disregarded,” Saraki said.

The Senate President explained that from the report, Nigeria will save over N7 billion, as the

Committee recommended that the Central Bank should pay the approved rate of between N500 and N700 per

The report recommends that the 2013 renewal contract between the Central Bank of Nigeria (CBN) and SystemSpecs be terminated immediately, and the transaction fee of one per cent (1%) for e-collections and transfers be disregarded

Turkey’s state oil firm plans IPO when oil hits $60

urkey’s state oil company will press ahead with plans for an initial public offering as soon as next year, but only if oil prices return to at least $60 a barrel from near $30 now, said chief executive Besim Sisman. Turkiye Petrolleri, TP, will complete preparations, which include securing internationally recognized

accreditation for its reserves, by the middle of next year, Sisman said in an interview in Istanbul. The Ankara-based company has had preliminary talks with Borsa Istanbul and Turkey’s biggest brokerage, Is Yatirim Menkul Degerler, he said. TP hasn’t decided how large a stake it may offer investors, Sisman said. The IPO, originally proposed when oil was trading at over $100 a barrel, is part of a government

privatisation drive to raise cash for the budget as well as to help finance investments in Turkey and abroad. TP plans $3.2 billion of investments this year, including $2.5 billion in projects outside Turkey, Sisman told state-run Anadolu Agency in December. “We are doing our homework and preparing the company for the IPO,” he said Tuesday. “We will

make it ready and then the government will decide whether to sell, but for an IPO we must have oil prices at least at $60 a barrel.” Sisman expects crude oil prices, which have averaged less than $32a barrel in New York during the past two months, to start rising again once the US. depletes stockpiles accrued during the shaleoil boom.

transaction, as opposed to the 1% of each transaction rate. “When added up, the approved rate amounts to N656,504,100 as opposed to the 1% per transaction rate that adds up to N7,650,925,556.40 for the period of March 1st 2015 to November 30th 2015. “With an estimated total transfer of N2.5 Trillion for entire year of 2015, barring the Senate resolution, the Federal Government could have paid upwards of N25 Billion to SystemSpecs,” Saraki stated. He urged his colleagues and Nigerians to applaud the implementation of the TSA by this administration and its value of promoting fiscal and economic discipline. “As we do this, we must continue to work towards blocking the loopholes that bring about leakages in our economy,” Saraki said. He expressed delight that the committee’s report saw the light of the day within a short period of time adding that “I call on other committees to please emulate this speedy delivery of reports in the interest of the country".

2016 March, SweetcrudeReports

Finance IKE AMOS

he Nigerian N a t i o n a l Petroleum Corporation, NNPC, says the government received N28.262 billion from the domestic sale of gas in 2015. Specifically, the NNPC, in its Monthly Financial and Operational report for December 2015, also disclosed that the country earned N987.54 billion from domestic crude oil sales in 2015, N3.635 billion other receipts, bringing total domestic sales proceeds to N1.02 trillion. The NNPC explained that for the month of January, the country received N1.2 billion from the domestic sales of gas; February receipt was put at N5.07 billion; March, N3.12 billion; April, N2.74 billion; May, 962.28 million and June N2.09 billion. From July to December, domestic gas sales proceeds were N2.084 billion, N138.158 million, N2.41 billion, N3.726 billion, N176.21 million and N4.542 billion respectively. For December, the NNPC

A gas city gate

Govt receives N28bn from sale of domestic gas said it transferred N86.34 billion into the Federation Account, stating that to this end, the sum of N1.019 trillion has been paid to the Federation Account, being Domestic crude oil & gas and other receipts from January to December 2015. On the other hand, the NNPC noted that total export

proceeds of $197.15 million were recorded in November, 2015 consisting of crude oil receipt of $161.90 million; Liquefied Petroleum Gas, LPG, and Escravos Gas to Liquid, EGTL, proceed of $34.84 million and miscellaneous receipt amounting to $0.42 million.

The NNPC said, “The current total export receipt dropped by more than 50 per cent following further slide in crude oil prices and additional shut-in of about 35,000 barrels of oil per day (bopd) in Usan and Yoho Terminals. Other factors include none receipt of NLNG Feedstock of about $74.47million following

payment slippage into New Year and 57.08 per cent drop in LPG/NGL lifting. “Total export crude oil and gas receipt for the period of January – December 2015 is $4.74 billion. Of the total receipts, the sum of $0.61billion was remitted to Federation Account while the balance of $4.13 billion was used to fund the JV Cash Call for the period. “Thus Joint Venture (JV) funding has gulped more than 87 per cent of the proceeds. JV cash call is a first line charge to Federation Account and 2015 Approved Budget requires monthly funding of about $615.8m.NNPC is therefore mandated to sweep all the export receipt to JV Cash Call funding implying a zero remittance to Federation Account.” The NNPC identified under-funding as a major constraint to Nigerian upstream sector, which prompted the use of debt to finance essential projects aimed at arresting production decline and grow producible reserves.

Labour

2016 March, SweetcrudeReports

NNPC head-office

PENGASSAN, NUPENG reject planned unbundling of NNPC OSCARLINE ONWUEMENYI

he two major unions in the oil and gas sector, the Nigeria U n i o n o f Petroleum and Natural Gas Workers, NUPENG, and Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, are opposed to Federal Government's plan to unbundle the Nigerian National Petroleum Corporation, NNPC, into 30 companies. The two unions vowed to resist the move to unbundle the corporation, saying it is an attempt to cause industrial crisis in the nation's oil and gas industry. Reacting to the development, the PENGASSAN’s spokesman, Mr. Emmanuel Ojugbana, told reporters that the union was not in support of the split. Ojugbana further stated that the Act establishing the NNPC must be repealed before the company could be

unbundled successfully. He also charged that it was unfortunate that the Federal government would contemplate such move, adding that if such a decision or plan should be taken, the two unions in the sector were supposed to be carried along. He said that the union was

not carried along in the decision to unbundle the company into 30 subsectors, adding that PENGASSAN was holding a meeting to take action on the issue. Similarly, NUPENG’s President, Mr. Igwe Achese, said that the government

needed a law to repeal the existing Act which established the NNPC to institute the changes. Achese said that the union would not accept the decision without knowing how the manpower that would operate in the 30 companies would be managed.

Contract workers protest sack at Indorama-Eleme Petrochemicals MKPOIKANA UDOMA

ecurity operatives yesterday fired tear gas to disperse protesting Sacked workers of a contracting firm, Daewoo Nigeria Limited, at Indorama-Eleme Petrochemical Limited are alleging marginalisation by the company's management. The local staff of the engineering, procurement

and construction company accused the company of retrenching only Nigerian workers and replacing them with foreigners who were handed better incentives. The workers, who recently embarked on a protest, told SweetcrudeReports that their action was aimed at drawing the attention of appropriate authorities to the issue. The protest at the Eleme axis of the East-West Road,

near Port Harcourt, caused traffic gridlock in the area, with scores of commuters, including school children, having to scamper for safety after the military and the police threw tear gas canisters at the protesters. In the meantime, the management of IndoramaEleme Petrochemical Limited says it is working very hard to resolve the lingering industrial dispute between the workers and Daewo. A statement by the Head of

“We will resist the move to unbundle the company because we see it as an attempt to cause industrial crisis. Our fear is that the NNPC can start disengaging workers as a result of this plan,” the union leader said.

Corporate Communications of IEPCL, Mr. Jossy Nkwocha, said the company is committed to the welfare of the workers, appealing for calm to resolve the issues. "The management of Indorama Eleme Petrochemicals Limited is making serious efforts to help in resolving the industrial dispute between one of its contracting firms, Daewoo Nigeria Limited, and its workers over some disengagement issues.

Labour

2016 March, SweetcrudeReports

Minister charges committee to resolve oil sector labour crisis

Ngige

inister of Labour and Employme nt, Dr. C h r i s Ngige, has charged a 21-man committee set up for the purpose of resolving lingering labour-related crisis in the oil and gas industry to handle the task with utmost seriousness. The committee is specifically charged with reviewing existing guidelines on labour administration issues such as contract staffing and outsourcing; upgrade the guidelines to a

ministerial regulation as provided by Section 88 (1)(e) and (g) of the Labour Act, CAP L1, Laws of the Federation of Nigeria, LFN, 2004. It is also to consider modalities for achieving retention of jobs in view of current challenges facing the oil and gas sector as well as look into other important concerns to the sustenance and promotion of industrial peace in the sector. Inaugurating the committee in Abuja, Minister of Labour and Employment, Dr. Chris Ngige, said: “We are all in agreement that the Oil and

Gas Sector is currently facing challenges, the Federal Government is

mindful of the concerns of both the employers and the employees, and is determined

The committee is specifically charged with reviewing existing guidelines on labour administration issues such as contract staffing and outsourcing; upgrade the guidelines to a ministerial regulation as provided by Section 88 (1)(e) and (g) of the Labour Act, CAP L1, Laws of the Federation of Nigeria, LFN, 2004

NUPENG blames DPR for fuel scarcity in Rivers

he National Union of Petroleum and Natural Gas Workers, NUPENG, has blamed the fuel scarcity in Port Harcourt, on the efficiency of the Department of Petroleum Resources, DPR, in the zone. The union said the failure of the agency to monitor activities of fuel station owners, including members of the Independent Petroleum

Marketers Association of Nigeria in Rivers State, is what gave rise to the scarcity in the state. According to the Port Harcourt Zonal Chairman of NUPENG, Mr. Godwin Eruba, the fuel scarcity is an act of sabotage. Eruba, who reiterated that the issue of fuel scarcity was becoming a recurring decimal in Rivers State, challenged the South South Zonal Comptroller of the DPR to step up her game.

"I will call it sabotage, there is no reason for the current queues at the filling stations. As we speak, every other state has products apart from Rivers State. Let the relevant regulatory agencies go and do their jobs, to find out those responsible for the hoarding of the products. "The union is not on strike, we don't have any intention to go on strike. So, I think we need to actually investigate and find out

why it is always a case in Rivers state. "Nigerians do not have any reason to suffer this scarcity; so let the DPR come out of their comfort zone and do their job," Eruba said. The Port Harcourt Zonal NUPENG boss who is in charge of the South South and South East geo-political zones, further stated that he had advised independent petroleum marketers to buy products directly from the NNPC depot so they could sell

to nurture viable employment relationship devoid of strives. “Hence, the need to employ social dialogue m e cha ni sm t o p ro f f e r solution to challenges confronting the sector”. He said the committee, which has eight weeks to conclude its assignment, was determined to prevent further crisis in the oil and gas sector. The committee, which was inaugurated prior to last Sunday's death of Minister of State for Labour, James Ocholi, had him as chairman, and he had in his speech, given assurance that the committee would do its best to ensure sustainable industrial harmony in the oil and gas sector, including uniting all the warring factions in the petroleum industry. Other members of the committee are drawn from the Federal Ministry of Labour and Employment, Federal Ministry of Petroleum Resources, Federal Ministry of Interior, Nigeria National Petroleum Corporation, National Petroleum Investment Management Services and the Department of Petroleum Resources. Others members are drawn from the Nigerian Content Development and Monitoring Board, Nigeria Immigration Services, Oil Producing Trade Sector, Labour Contractor in the Oil and Gas Sector, Petroleum and Natural Gas Senior Staff Association of Nigeria and Nigeria Union of Petroleum and Natural Gas Workers.

the products at approved pump price of N86.50 per litre. "The last fuel scarcity, their complaint was that they don't but products at the rate which they could sell for N86 per litre, so many of them resorted to buying and selling of products only in the night while some did not buy at all. "So my advice is that they should buy at NNPC depot where they can get at the rate where they can sell at N86.50 and still make profit," Eruba stated.

Labour

2016 March, SweetcrudeReports

Fuel station OSCARLINE ONWUEMENYI

he Petroleum and Natural Gas Senior Staff Association of N i g e r i a , PENGASSAN, has accused the Federal Government of gradually killing the Petroleum products Pricing Regulatory Agency, PPPRA, through its disregard for the Act setting up the agency in the appointment of chief executives for the agency. Comrade Victor Ononokpono, Chairman, PENGASSAN, PPPRA Branch, disclosed that the Federal Government’s constant appointment of staff of the Nigerian National Petroleum Corporation, NNPC, to head the agency was unthinkable and has

PENGASSAN says govt killing PPPRA helped in rendering the agency ineffective in the discharge of its duties. According to him, the persistent deployment of NNPC staff to head the PPPRA was a flagrant contravention of certain sections of the PPPRA Act. He said, “Portions of the Act of the PPPRA had remained unattainable under the regime of having operatives of operating company head the regulator. How do you regulate your bosses? How do you query your pay master?

How do we align with global best practices? How do we promote control and checks in corporate governance? These are the questions the protest seeks answers to.” He further explained that the PPPRA was created to, among other things, liberalise the downstream sector, dismantle monopoly, resolve the perennial problem of scarcity of petroleum products and supervise planned deregulation of the oil and gas downstream

Petronas may cut 1,000 jobs as oil slump prompts reorganisation

etroliam Nasional Berhad, Malaysia’s state oil company, announced management changes and plans to cut workers as it seeks to trim operating costs to cope with the worst price slump in a generation. Petronas, as the company is known, said its new business structure

is expected to result in the loss of about 1,000 jobs, according to a statement on its website. It didn’t specify if the positions to be vacated were those of permanent or contract employees. The company had about 51,000 workers as of the end of 2014. "Exhaustive efforts are ongoing to re-deploy affected employees," the company

said. "Petronas will further embark on a separation exercise for these employees as needed, which is expected to be completed over the next six months." The Kuala Lumpurbased company, which reported its third loss in five quarters on Monday, flagged that it may need to raise debt and tap its cash

sector. He said, “It is important to note that, the Act establishing the PPPRA contemplated an autonomous agency to primarily determine the pricing policy of petroleum products and regulate their supply and distribution.” “The above has remained unattainable under the regime of having operatives of operating company head the regulator. How do you regulate your bosses? How do you query your pay master? How do we align with global

reserves to cover capital expenditures and dividend payments to the government. Petronas joins global oil majors including Royal Dutch Shell Plc in cutting spending amid the crude downturn. It’s targeting to lower capital and operating expenditures by as much as 20 billion ringgit ($4.8 billion) in 2016, with a planned reduction of 50 billion ringgit over four years, CEO Wan Zulkiflee Wan Ariffin told reporters.

best practices? How do we promote control and checks in corporate governance? These are the questions the protest seeks answers to.” He registered the displeasure of the union over the appointment of NNPC staff to head PPPRA, while he noted that the appointment had changed the prospect of the PPPRA in an undesirable way. He said, “From that point onward, the independence of the once revered and respected downstream regulator took a continuous slide towards partisanship and collusion. “An agency that had created a niche for thoroughness and professionalism soon became the weakest link in the chain. That trend will later lead to the worst moments in the annals of the oil and gas sector beginning from 2011.” Ononokpono said that it was unfortunate that the act had been ignored and the Ministry of Petroleum Resources continued to impose workers of NNPC to head the regulatory agency.

Solid Mineral

2016 March, SweetcrudeReports

Fayemi says moribund Ajaokuta ‘a collective shame' OSCARLINE ONWUEMENYI

he Minister of Solid Minerals Development, Dr. Kayode Fayemi, has said the administration wants to secure quick wins that will ensure immediate and medium term benefits to the solid minerals sector in the country. Fayemi, who spoke n Abuja, expressed dismay that the sector, despite its immense potentials, was operating at below capacity and with sub-standard mining techniques and processes that must be upgraded in order to reduce incidence of mining site waste, and boost productivity and output. He said, “In all my years in politics and the professions, not many issues have had a sobering effect on me as what I have seen for myself and learnt since I resumed this assignment (as minister). For example, it is a collective shame for us that such a massive project as the Ajaokuta Steel Plant can be allowed to remain moribund in spite of our sovereign resources that have been invested and its immense potentials.” According to the minister, “It is no news that Nigeria has tremendous mining endowments. Today we have at least 44 known mineral assets that include precious minerals, base metals, bulk minerals and what are known as rare earth minerals. More specifically, our more promising mineral assets incude gold, iron ore, barite, lead, zinc, tin and coal.” He added, however, that based on current data, Nigeria’s solid minerals sector makes up about 0.34 percent of gross domestic product, GDP. “That means that based on current official rates, the mining sector contributes N400 billion in value to the economy. While that is a significant role, it is smaller than its true potential as the vast majority of our mining assets have yet to be exploited. “In fact, what has been happening is the sector has more or less been operating sharply below capacity, with many mining operations

Fayemi

manned by small scale artisanal miners as opposed to large scale players.” He noted that the trajectory of the country’s extractive industry has not been without controversy, adding that, “We are all witnesses to the challenges in the oil industry over the past few decades. More recently, we have seen significant challenges in the gold, lead and zinc mines of Zamfara where illegal mining without clear understanding of how to handle poisonous material such as lead has had an incredibly devastating consequences.”

ayemi noted that the Ministry has developed a framework strategy to drive growth in the mining and minerals sector. “Our strategic aspiration is to build a sustainable, globally competitive mining sector, and related supporting sectors that will prudently use the finite resources available to improve the quality of life of Nigerians. “We will focus on supporting and growing Nigeria’s position in mineral assets with commercially prove reserves. Our assets will then be used to

serve two key markets: a domestic industrialisation market that is more beneficiation focused; and an export market that is more focused initially in the export of ores and raw materials. “The mix of investors that will target Nigeria will reflect that preference of serving both the domestic and export markets. We anticipate that as we expand our geosciences database and insights, we will also expand what minerals we compete in,” he added. The Minister further

noted that Nigeria will focus on “going to the market as a quality and cost leader, rather than a scale based operation, pending further understanding of our reserves position. Be that as it may, we are interested in building a profitable solid minerals industry, not the largest in the world, hence we will always make shrewd decisions with our partners, communities and other stakeholders. “For example, we will rather be the most competitive gold producer in the world and serve only a fraction of supply, than be the biggest producer

The mix of investors that will target Nigeria will reflect that preference of serving both the domestic and export markets. We anticipate that as we expand our geosciences database and insights, we will also expand what minerals we compete in

and have equity investors generating losses.” Fayemi noted that given the where to play and how to win choices, the role government would be to invest in activities and levers that reduce cost of doing business, and improve Nigeria’s perception as a high quality mining destination. He pointed out that over the next few months, the ministry would conduct additional analysis to refine its strategies and the policy regimes that would emerge to support and accelerate the execution of the strategy. The road to achieving a leaner, more efficient and more focused mining and minerals sector, Fayemi contended, will start with exploiting some “low hanging fruits” that will accelerate investor confidence in the mining markets, and get the sector growing and jobs created. He said the government was ready to offer support to miners who are close to production but facing one or two administrative issues.

2016 March, SweetcrudeReports

Solid Mineral

Coal miners

he Federal Government has inaugurated a 1 7 - m a n committee to develop a blueprint to guide the transformation of the solid minerals sector in the country. It noted that given the dwindling fortunes of the nation as a result of falling oil prices, the government has hinged the diversification of the economy on the solid minerals and agricultural sectors. A statement issued in Abuja stated that the Minister of Solid Minerals Development, Dr. Kayode Fayemi, inaugurated the committee chaired by Prof.

Govt inaugurates panel on transformation of mining sector Ibrahim Garba and co-chaired by Prof. Siyan Malomo. The committee has three weeks to complete its assignment. Fayemi said the committee was to produce a 25-year action plan for the transformation of the solid minerals sector, broken down into 24-month short-term

plan, 10-year midterm plan and 25-year long-term plan. The terms of reference of the committee include the identification of hindrances to the development of Nigeriaâ&#x20AC;&#x2122;s mineral resources, identification of

pathways to overcome the barriers, prioritisation of activities and provision of time frames for all activities. They also include the creation of models and scenarios for successful implementation and monitoring of activities; and

...To unveil list of dormant minerals licences

he Federal Government says it will soon release a list of dormant mining licences and leases, ahead of their possible revocation. A list of about 1,500 of the dormant mining licences and leases, and their owners have already been compiled by the ministry. The owners have been given up to this week, specifically, March 1, by the Minister of Solid

Minerals Development, Dr. Kayode Fayemi, to use the licences or lose them. A statement from the ministry quoted Fayemi as saying a situation where four of every five mining licences issued in the country remained unused was no longer acceptable. Speaking in Minna, Niger State, the minister said the Federal Government would no longer accept operators who failed to use their licences for the purpose they were issued. He added that such licences

would be revoked and given to genuine mining investors who were ready to make use of them. Fayemi said that most of the land areas that were allocated as mining sites to miners had been acquired illegally. He maintained that it was important to sanitise and reorganise the sector in order to realise the sectorâ&#x20AC;&#x2122;s full potential as a major revenue earner.

Local miners

development of a consensus strategy for buy-in by all stakeholders in the industry, among others. The minister said the committee was at liberty to identify subsectional activities along the minerals value chain that would enhance the rapid development of the industry. He urged the committee members to take the assignment with passion and commitment, adding that the work was critical to the economy of the nation. Garba expressed appreciation to the Federal Government for giving the members an opportunity to serve the nation in that capacity and pledged their determination to take the responsibility very seriously.

Freight

2016 March, SweetcrudeReports

Apapa port

NPA to infuse Japanese technology in port infrastructure KUNLE KALEJAYE

he Nigerian Ports Authority, N P A , h a s revealed it is ready to infuse Japanese technology in critical areas of Infrastructural development in form of Public Private Partnership at the ports. NPA Managing Director, Mallam Habib Abdullahi, gave the hint during the visit of Japanese government delegation to the NPA headquarters. NPA's General Manager, Capital Projects, Engr. Rufai M o h a m m e d , w h o represented the managing director, assured the Japanese that the NPA "will expeditiously list out technical and infrastructural needs of the organisation," where the Japanese government could come in to

assist. Mohammed added that NPA was currently involved in massive infrastructural renewal projects, including quay length rehabilitation in Onne, Warri and Lagos ports. He said the organisation’s 25-year development plan would soon be ready and that

it would be a compendium of these development projects. Mohammed recalled that NPA had benefited from training programmes by the Japanese government in the past. He said he expected the visit of the government

delegation to further unite and improve the collaboration between the two countries, especially now that NPA was embarking on capital intensive port reforms with the desire to be the leading port in Africa. Speaking on behalf of the Japanese government, the

section manager of Urban and Transportation Planning Group of the Yachiyo Engineering Company Limited, Mr. Yasuhiro Yamauchi, said the Japanese government was ready to partner with NPA in particular and Nigeria in general especially in the area of technical abilities that would be useful for different projects in the country.

NIMASA reiterates commitment to safe marine environment

he Nigerian M a r i t i m e Administration and Safety Agency, NIMASA, has reiterated its commitment to ensuring a safe marine environment by tackling the menace of marine litters in the nation’s territorial waters. Acting Director General of the agency, Mr. Haruna

Baba Jauro, made the commitment during a stakeholders' forum on marine litter management organised in Lagos recently by NIMASA and the United Nations Environmental Programme Global Partnership Action, UNEPGPA. The acting director general, who was

represented by the agency’s Director of Maritime Labour Services, Mrs. Juliana Gunwa, said that marine litters have become a menace which must be tackled with all seriousness. He said that this is the reason NIMASA has partnered with UNEP-GPA to tackle the scourge. Jauro stated that the

management of the marine environment remains a critical component of ensuring safe and secure shipping and that NIMASA will continue to implement relevant International Maritime Organisation, IMO, instruments in line with its mandate.

2016 March, SweetcrudeReports

Freight

Dockworkers decry low patronage at Rivers Port

Dock workers MKPOIKANA UDOMA

he Maritime Workers Union of Nigeria, MWUN, Dockworkers Branch, has lamented the drop in cargo vessels calling at the Rivers Port, saying this has brought financial hardship to its

members. The chairman, Dockworker Branch of MWUN in Rivers State, Mr. Tony Wokocha, disclosed this in Port Harcourt, maintaining that since there was a lull in vessels at the Rivers Port, the dockworkers were facing financial challenges due to the nature of their job as it was

based on tonnage handling. “There is anxiety over low vessel arrivals at the Rivers Port, even as dock workers cry out over hardship. "You know no work, no pay. As it stands now, dockworkers will hardly go home with N2,000 in a month. The situation is

Public, private partnership has brought efficient port service —Amaechi

inister of Transportation, Mr Chibuike Amaechi, has praised the good intentions of government in bringing P u b l i c P r i v a t e Partnership, PPP, to the nation's ports, saying the development has bought efficiency to services at the ports.

Amaechi, who spoke at the two-day conference by the Maritime Correspondents Organisation of Nigeria in Lagos, maintained that there has also been a remarkable increase in cargo throughput and reduced cargo dwell time following the development. According to him, the concessioning era has brought improved vessel turnaround

time in addition to raising t h e q u a l i t y o f infrastructure at the ports. But despite these, the minister stressed the need to position the ports to bring more business by making them more costeffective, adding that the Federal Government was determined to ensure improved administration at

precarious. We are afraid because we do not know how long this will last,” he said. The union’s boss further explained that the economic hardship confronting dockworkers in Rivers Port was biting hard as he pointed out that most of the workers were family bread winners.

the ports. Highlighting the importance of the ports, Amaechi said: “As we know, seaports are entrances and exit gates through which the trade needs of transit and landlocked countries are met. “The nation’s ports, therefore, provide the interface between land and sea and the most costeffective mode of transportation’’.

According to him, “some dockworkers have family of three to five, and can no longer put food on the family’s table. They can no longer pay school fees for their children and the children are dropping out of school." Some of the dockworkers, who also spoke with newsmen, said they were facing great challenges due to the drop in cargo visits. They, however, attributed the development to government's policy on importation and preference by most importers to ship their cargoes to the western ports (Lagos) rather than the eastern ports. The dockworkers also said the high foreign exchange rates had also contributed to the poor cargo vessels calling at the port.

Motoring

2016 March, SweetcrudeReports

Behold the Bugatti Chiron: 1,500-HP, 0-125 Mph in 6.5 seconds, $2.6 million

h e m u c h a w a i t e d replacement to the Bugatti Veyron, a longtime record holder of the “world’s fastest car,” is here: This is the Bugatti Chiron, revealed in anticipation of the Geneva motor show. In case you missed the title yes, it’s very fast. It’s also stunning, much like the Vision Gran Turismo concept debuted by the company last year. In fact it’s so like that virtual car, the design on the Chiron shocks little; it was kind of expected. And that’s not a bad thing at all. Take the rear-end, for example. No Vera Wang Oscar dress comes close to

presenting a bottom as fabulous. And the swooping curvature along the side that’s cleverly replicated within the cabin. The whole car screams a level of detail that a €2.4 million ($2.6 million at today’s exchange rate) buyer demands. Of which, one third of the proposed 500 Chirons are already accounted for. The lucky few better be ready, however: Bugatti says the 1,500 horsepower and 1,100 lb.-ft. of torque can effectively “wind” an unprepared driver, such is the savagery of its acceleration; 62 mph arrives in under 2.5 seconds, but the more impressive figure is that in just 6.5 seconds you’ll be CONTINUES ON PAGE 39

2016 March, SweetcrudeReports

Motoring

Zika Virus hits Tata Motors, causes company to rename newest car

he Zika virus is becoming an increasingly big deal, and the World Health Organization has announced that its rapid spread across the Americas qualifies it as a global health emergency. In

lieu of this information, India’s Tata Motors the group that owns Jaguar Land Rover has decided to rename its upcoming “Zica” hatchback, due to the name’s similarities. When it is officially revealed at New Delhi’s Auto Expo 2016, the nameplate on the

car will still read Zica. In the coming weeks, however, a new name will be revealed, with the company saying the rebrand is due to the hardships the virus is causing throughout the world, where a link was discovered in Brazil

between the spread of Zika and the surge in the number of babies born with a birth d e f e c t k n o w n a s microcephaly. For those unfamiliar with Tata Motors, it’s one of some 100 brands owned by India’s Tata Group, including

Behold the Bugatti Chiron: 1,500-HP, 0-125 Mph in 6.5 seconds, $2.6 million Bugatti, while the

CONTINUED FROM PAGE 38

traveling 125 mph—that’s probably faster than a Honda F1 car. Top speed is faster, too: The Chiron is limited to 261 mph in base spec. However, if you tick the “special package” and follow some safety instructions, the Chiron can be let loose, potentially surpassing 275-280 mph. Make no

mistake, Bugatti cares deeply about the title of “world’s fastest car.” As for the engine that’s going to take it there: An 8.0-liter, quad turbo W16. The turbochargers in the Chiron are larger than the ones in the Veyron, which helps make the colossal power that it does. And here it’s a two-stage system, which is said to eliminate turbo lag; two turbocharges are spinning from a start, according to

other two ramp up at 3,800 rpm. This ensure the 1,100+ lb.ft. of torque is on tap between 2,000 and 6,000 rpm, routed through a 7speed dual clutch transmission to all four wheels. Replacing the Bugatti Veyron, this might just be the fastest car in the world right now.

companies like the delightfully wonderful Tetley teabags that British people drink until it pours out of their ears. As for Tata Motors, it’s their investment in Jaguar Land Rover that has brought along the beloved F-Type, and pushed both automaker’s to improve their reliability woes of the past. As for Tata Motors in India, its most famous car is the Nano—an impossibly cheap hatchback that caught plenty of flack from Top Gear’s trio of hosts. In all seriousness, Tata M o t o r s renaming its new Zica i s a smart—and considerate —move. Hopefully it be enough to prevent t h e competition making fun of it in their a d v e r t campaigns.

Technology

2016 March, SweetcrudeReports

Ethanol plant

Ethanol fuel mixtures

everal common ethanol fuel mixtures are in use around the world. The use of pure hydrous or anhydrous ethanol in internal combustion engines (ICEs) is only possible if the engines are designed or modified for that purpose, and used only in automobiles, light-duty trucks andmotorcycles. Anhydrous ethanol can be blended with gasoline (petrol) for use in gasoline engines, but with high ethanol content only after minor engine modifications. Ethanol fuel mixtures have "E" numbers which describe the percentage of ethanol fuel in the mixture by volume, for example, E85 is 85% anhydrous ethanol and 15% gasoline. Low-ethanol blends, from E5 to E25, are also known as gasohol, though internationally the most common use of the term refers to the E10 blend. Blends of E10 or less are used in more than 20 countries around the world, led by the United States, where ethanol represented 10% of the U.S. gasoline fuel supply in 2011. Blends from E20 to E25 have been used in Brazil since the late 1970s. E85 is commonly used in the U.S. and Europe for flexible-

fuel vehicles. Hydrous ethanol or E100 is used in Brazilian neat ethanol vehicles and flexfuel light vehicles and hydrous E15 called hE15 for modern petrol cars in the Netherlands

E10 or Less E10, a fuel mixture of 10% anhydrous ethanol and 90% gasoline sometimes called gasohol, can be used in the internal combustion engines of most modern automobiles and light-duty vehicles without need for any modification on the engine or fuel system. E10 blends are typically rated as being 2 to 3 octane numbers higher than regular gasoline and are approved for use in all new U.S. automobiles, and mandated in some areas for emissions and other reasons. The E10 blend and lower ethanol content mixtures have been used in several countries, and its use has been primarily driven by the several world energy shortages that have taken place since the 1973 oil crisis.

ther common blends include E5 and E7. These concentrations are generally safe for recent engines that should run on pure gasoline. As of 2006, mandates for blending bioethanol into vehicle fuels

had been enacted in at least 36 states/provinces and 17 countries at the national level, with most mandates requiring a blend of 10 to 15% ethanol with gasoline. One measure of alternative fuels in the U.S. is the "gasoline-equivalent gallon" (GEG). In 2002, the U.S. used as motor fuel, ethanol equal to 137,000 terajoules (TJ), the energy equivalent of 1.13 billion U.S. gallons (4.3 billion liters) of gasoline. This was less than 1% of the total fuel used that year.

10 and other blends of ethanol are considered to be useful in decreasing U.S. dependence on foreign oil,

and can reduce carbon monoxide (CO) emissions by 20 to 30% under the right conditions.[6] Although E10 does decrease emissions of CO and greenhouse gases such as CO2by an estimated 2% over regular gasoline, it can cause increases in evaporative emissions and some pollutants depending on factors such as the age of the vehicle and weather conditions. According to the Philippine Department of Energy, the use of not more than a 10% ethanol-gasoline mixture is not harmful to cars' fuel systems. Generally, automobile gasoline containing alcohol (ethanol or methanol) is not allowed to be used in U.S. certificated aircraft.

Blends of E10 or less are used in more than 20 countries around the world, led by the United States, where ethanol represented 10% of the U.S. gasoline fuel supply in 2011

Availability ·—E10 was introduced nationwide in Thailand in 2007, and replaced 91 octane pure gasoline in that country in 2013. —E10 is commonly available in the Midwestern United States. It was also mandated for use in all standard automobile fuel in the state of Florida by the end of 2010. Due to the phasing out of MTBE as a gasoline additive and mainly due to the mandates established in the Energy Policy Act of 2005 and the Energy Independence and Security Act of 2007, ethanol blends have increased throughout the United States, and by 2009, the ethanol market share in the U.S. gasoline supply reached almost 8% by volume. —The Tesco chain of supermarkets in the UK have started selling an E5 brand of gasoline marketed as 99 RON super-unleaded. Its selling price is lower than the other two forms of high-octane unleaded on the market, Shell's V-Power (99 RON) and BP's Ultimate (97 RON). Many petrol stations CONTINUES ON PAGE 41

2016 March, SweetcrudeReports

Technology

Ethanol plant

Ethanol fuel mixtures CONTINUED FROM PAGE 40

throughout Australia now also sell E10, typically at a few cents cheaper per litre than regular unleaded. It is more commonly found throughout the state of Queensland due to its large sugarcane farming regions. The use of E10 is also subsidised by the Queensland government. Many petrol stations no longer offer a "Regular 91" petrol option, instead only offering Regular E10 (91), Premium (95) and Premium (98), although regular unleaded remains commonly available in Victoria. —In Sweden, all 95-octane gasoline is E5, while the status of 98-octane fuel is currently unclear. The product data sheets of the major fuel chains do not clearly state ethanol content of their 98-octane gasoline. In the early-mid-1990s, some fuel chains sold E10. —From January 2011, all 95-octane fuel in Finland is E10, and 98E5 octane fuel is also available. —Mandatory blending of ethanol was approved in Mozambique, but the percentage in the blend has not been specified. —South Africa approved a biofuel strategy in 2007, and mandated an 8% blend of ethanol by 2013. —A 2007 Uruguayan law mandates a minimum of 5% of ethanol blended with

In Sweden, all 95-octane gasoline is E5, while the status of 98-octane fuel is currently unclear. The product data sheets of the major fuel chains do not clearly state ethanol content of their 98octane gasoline gasoline starting in January 2015. The monopolic, stateowned fuel producer ANCAP started blending premium gasoline with 10% of bioethanol in December 2009, which will be available in all the country by early January 2010. The other two gasolines will follow later in 2010. —The Dominican Republic has a mandate for blending 15% of ethanol by 2015. —Chile is considering the introduction of E5, and Panama, Bolivia and Venezuela of E10.

2011 study conducted by VTT Technical Research Centre of Finland found practically no difference in fuel consumption in normal driving conditions between commercial gasoline grades 95E10 and 98E5 sold in Finland, despite the public perception that fuel consumption is significantly higher with 95E10. VTT performed the comparison test under controlled laboratory

conditions and their measurements showed the cars tested used an average of 10.30 liters (2.27 imp gal; 2.72 U.S. gal) of 95E10 per 100 km (62 mi), as opposed to 10.23 liters (2.25 imp gal; 2.70 U.S. gal) of 98E5 per 100 km (62 mi). The difference was 0.07 in favor of 98E5 on average, meaning that using 95E10 gasoline, which has a higher ethanol content, increases consumption by 0.7%. When the measurements are normalized, the difference becomes 1.0%, a result that is highly consistent with an estimation of calorific values based on approximate fuel composition, which came out at 1.1% in favour of E5.

E15 E15 contains 15% ethanol and 85% gasoline. This is generally the highest ratio of ethanol to gasoline that is possible to use in vehicles

recommended by some auto manufacturers to run on E10 in the US. As a result of the Energy Independence and Security Act of 2007, which mandates an increase in renewable fuels for the transport sector, the U.S. Department of Energy began assessments for the feasibility of using intermediate ethanol blends in the existing vehicle fleet as a way to allow higher consumption of ethanol fuel. The National Renewable Energy Laboratory (NREL) conducted tests to evaluate the potential impacts of intermediate ethanol blends on legacy vehicles and other engines. In a preliminary report released in October 2008, the NREL presented the results of the first evaluations of the effects of E10, E15 and E20 gasoline blends on tailpipe and evaporative emissions, catalyst and engine durability, vehicle driveability, engine operability, and vehicle and engine materials. This preliminary report found none of the vehicles displayed a malfunction indicator light as a result of the ethanol blend used; no fuel filter plugging symptoms were observed; no cold start problems were observed at 24 °C (75 °F) and 10 °C (50 °F) laboratory conditions; and as expected, computer technology available in newer model vehicles adapts to the higher octane causing lower

emissions with greater horsepower and in some cases greater fuel economy. In March 2009, a lobbying group from the ethanol industry, Growth Energy, formally requested the U.S. Environmental Protection Agency(EPA) to allow the ethanol content in gasoline to be increased to 15% from 10%. Organizations doing such studies included the Energy Department, the State of Minnesota, the Renewable Fuels Association, the Rochester Institute of Technology, the Minnesota Center for Automotive Research, and Stockholm University in Sweden. In October 2010, the EPA granted a waiver to allow up to 15% of ethanol blended with gasoline to be sold only for cars and light pickup trucks with a model year of 2007 or later, representing about 15% of vehicles on U.S. roads. In January 2011, the waiver was expanded to authorize use of E15 to include model year 2001 through 2006 passenger vehicles. The EPA also decided not to grant any waiver for E15 use in any motorcycles, heavy-duty vehicles, or non-road engines because current testing data do not support such a waiver. According to the Renewable Fuels Association, the E15 waivers now cover 62% of vehicles on the road in the US, and the ethanol group estimates if all 2001 and newer cars and pickups were to use E15, the theoretical blend wall for ethanol use would be approximately 17.5 billion gallons (66.2 billion liters) per year. The EPA was still studying if older cars can withstand a 15% ethanol blend. The EPA waiver authorizes sale of E15 only from Sep 15 to May 31 out of a black hose and a yellow hose to flex fuel vehicles only from June 1 to Sep 14. Retailers have shunned building infrastructure due to the costly regulatory requirements which have created a practical barrier to the commercialization of the higher blend. Most fuel stations do not have enough pumps to offer the new blend, few existing pumps are certified to dispense E15, and no dedicated tanks are readily available to store E15. Also, some state and federal regulations would have to change before E15 can be legally sold. The National Association of CONTINUES ON PAGE 42

2016 March, SweetcrudeReports

Technology

Ethanol dispensing station

Ethanol fuel mixtures CONTINUED FROM PAGE 41

Convenience Stores, which represents most gasoline retailers, considers the potential for actual E15 demand is small, "because the auto industry is not embracing the fuel and is not adjusting their warranties or recommendations for the fuel type." One possible solution to the infrastructure barriers is the introduction of blender pumps that allow consumers to turn a dial to select the level of ethanol, which would also allow owners of flexible-fuel cars to buy E85 fuel. In June 2011 EPA, in cooperation with the Federal Trade Commission, issued its final ruling regarding the E15 warning label required to be displayed in all E15 fuel dispensers in the U.S. to inform consumers about what vehicles can, and what vehicles and equipment cannot, use the E15 blend. Both the Alliance of Automobile Manufacturers and the National Petrochemical and Refiners Associationcomplained that relying solely on this warning label is not enough to protect consumers from misfueling. In July 2012, a fueling station in Lawrence, Kansas became the first in the U.S. to sell the E15 blend. The fuel is sold through a blender pump that allows customers to choose between E10, E15, E30 or E85, with

the latter blends sold only to flexible-fuel vehicles. As of June 2013, there are about 24 fueling stations selling E15 out of 180,000 stations across the U.S.

n December 2010, several groups, including the Alliance of Automobile Manufacturers, the American Petroleum Institute, the Association of International Automobile Manufacturers, the National Marine Manufacturers Association, the Outdoor Power Equipment Institute, and theGrocery Manufacturers Association, filed suit against the EPA in the United States Court of Appeals for the District of Columbia Circuit. The plaintiffs argued the EPA does not have the authority to issue a â&#x20AC;&#x153;partial waiverâ&#x20AC;? that covers some cars and not others. Among other arguments, the groups argued that the higher ethanol blend is not only a problem for cars, but also for

fuel pumps and underground tanks not designed for the E15 mixture. It was also argued that the rise in ethanol has contributed to the big jump in corn prices in recent years. In August 2012, the federal appeals court rejected the suit against the EPA. The case was thrown out on a technical reason, as the court ruled the groups did not have legal standing to challenge EPA's decision to issue the waiver for E15. In June 2013 the U.S. Supreme Court declined to hear an appeal from industry groups opposed to the EPA ruling about E15, and let the 2012 federal appeals court ruling stand. As of November 2012, sales of E15 are not authorized in California, and according to the California Air Resources Board (CARB), the blend is still awaiting approval, and in a public statement the

In November 2013, the Environmental Protection Agency opened for public comment its proposal to reduce the amount of ethanol required in the U.S. gasoline supply as mandated by the Energy Independence and Security Act of 2007

agency said that "it would take several years to complete the vehicle testing and rule development necessary to i n t r o d u c e a n e w transportation fuel into California's market. According to a survey conducted by the American Automobile Association (AAA) in 2012, only about 12 million out of the more than 240 million light-duty vehicles on the U.S. roads in 2012 are approved by manufacturers are fully compliant with E15 gasoline. According with the Association,BMW, Chrysler, Nissan, Toyota, and Volkswagen warned that their warranties will not cover E15-related damage. Despite the controversy, in order to adjust to EPA regulations, 2012 and 2013model year vehicles manufactured by General Motors can use fuel containing up to 15 percent ethanol, as indicated in the vehicle owners' manuals. However, the carmaker warned that for model year 2011 or earlier vehicles, they "strongly recommend that GM customers refer to their owners manuals for the proper fuel designation for their vehicles." Ford Motor C o m p a n y a l s o i s manufacturing all of its 2013 vehicles E15 compatible, including hybrid electrics and vehicles with Ecoboost engines. Also Porsches built since 2001 are approved by its manufacturer to use E15. Volkswagen announced that for the 2014 model year, its

entire lineup will be E15 capable. Fiat Chrysler Automobiles announced in August 2015 that all 2016 model year Chrysler/Fiat, Jeep, Dodge and Ram vehicles will be E15 compatible. In November 2013, the Environmental Protection Agency opened for public comment its proposal to reduce the amount of ethanol required in the U.S. gasoline supply as mandated by the Energy Independence and Security Act of 2007. The agency cited problems with increasing the blend of ethanol above 10%. This limit, known as the "blend wall," refers to the practical difficulty in incorporating increasing amounts of ethanol into the transportation fuel supply at volumes exceeding those achieved by the sale of nearly all gasoline as E10. hE10

15% hydrous ethanol and 85% gasoline blend, hE15, has been introduced at public gas stations in the Netherlands since 2008. Ethanol fuel specifications worldwide traditionally dictate use of anhydrous ethanol (less than 1% water) for gasoline blending. This results in additional costs, energy usage and environmental impacts associated with the extra processing step required to dehydrate the hydrous ethanol produced via distillation (3.5-4.9 vol.% water) to meet the current anhydrous ethanol specifications.

Community

2016 March, SweetcrudeReports

Oil spill clean-up

Ogoni clean-up to commence in few weeks â&#x20AC;&#x201D;Govt MKPOIKANA UDOMA, Port Harcourt

he Federal Government says the process for the clean-up of Ogoniland as recommended by the United Nations Environment Programme, UNEP, will commence in the next few weeks. Minister of Environment, Mrs. Amina Mohammed, announced this during a town hall consultative forum in Bori, Ogoni, as part of the p r o c e s s f o r t h e commencement of the implementation of the exercise. Although Mrs. Mohammed did not give specific date for the commencement of the clean-up, she reiterated that it is not going to be a money sharing venture. The Minister also promised to carry the Ogoni women and youths along in the clean-up exercise.

She said: "This is the beginning of the end of the Ogoni struggle; a new dawn for the people of Ogoniland. This programme would not have been possible today if not for the fallen heroes (Ken SaroWiwa and eight others). So, I am calling for unity and peace among Ogonis in order to achieve the clean up. "The UNEP report on Ogoniland is not just a Nigerian issue, it is an international issue; and I want to assure you that we will begin the implementation of the UNEP report in the next few weeks. "We must protect the land for posterity. The president of MOSOP asked that we should declare the Ogoniland a Ramsaar site, but I am telling you that we cannot do that when we continue to have pollution. So therefore the responsibility is on all sides, you have a responsibility to your environment to ensure that your lands are not re-

contaminated by means of pipeline vandalism and sabotage. "I also want to inform you that the clean-up is not about money sharing, but how you are going to be involved and what will be your responsibility. It's not sharing money but about participating and engaging, and ensuring that you are part of the clean-up

exercise. "We will leave no one behind, I want to extend hand of partnership from the President to you and we will ensure that the clean up of Ogoniland is a reality." Earlier, the President of the Movement for the Survival of Ogoni People, MOSOP, Mr. Legborsi Pyagbara, in his speech, called on the Federal Government to declare a

I also want to inform you that the clean-up is not about money sharing, but how you are going to be involved and what will be your responsibility

state of emergency on the Ogoni environment. Legborsi also urged the government to focus attention on what he d e s c r i b e d a s 'environmental terrorism and environmental insecurity in Ogoniland' so as to pave the way for a sustainable future for the Ogoni people. He also decried the wanton poverty, food shortage and deaths experienced in Ogoniland as a result of the nonimplementation of the UNEP report. "First of all, let me commend President Muhammadu Buhari for his renewed interest and commitment to Ogoniland; as much as we appreciates the President effort, we implore him to declare a state of emergency on the Ogoni environment.

2016 March, SweetcrudeReports

Community

A'Ibom community tackles Mobil over 'paltry' development grant …Demands N1.6bn from company MKPOIKANA UDOMA, Port Harcourt

he people of Eastern Obolo L o c a l Government Area in Akwa Ibom State have appealed to ExxonMobil Nigeria to increase its annual development grant from "the paltry sum of N250 million to N1.6 billion" as obtained in other of its host communities. Chairman, Eastern Obolo Traditional Rulers Council, Chief Job Job, made the appeal while speaking with SweetcrudeReports in Okoroete, the traditional headquarters of the Obolo people. The monarch, flanked by his Chiefs in Council, spoke through the community’s Consultant on Oil Matters, Dr. John Ukpatu. Chief Job, who reiterated that the area had nothing to show for its enormous contributions to the development of Akwa Ibom State and Nigeria, lamented that Mobil has refused to recognise Eastern Obolo as its host community, despite housing her largest oil field (Oso Condesate). In his words: "As you already know, Eastern Obolo is host to the Oso Condensate, the largest oil field in West Africa, belonging to Mobil Producing Nigeria Unlimited. It is on record that Eastern Obolo produces 193,600bpd and ExxonMobil generates more than 40 percent of the barrels of oil that comes from

ExxonMobil office

Eastern Obolo, and yet Mobil has refused to recognised Eastern Obolo as her host community. "Mobil has a Memorandum of Understanding with Ibeno, excluding Eastern Obolo that houses her largest oil field. "The company has neglected Eastern Obolo for the past 40 years in terms of employment, royalty and corporate social responsibility, CSR.

"Recently, Mobil disbursed funds for the development of localities within her area of operations and Eastern Obolo had the least amount; Ibeno received a whopping N1.6 billion, Eket had N1.4 billion, Esit Eket received N1.08 billion, while Eastern Obolo only received a paltry sum of N250million.

"This is indeed unfortunate because a matter that would have been given a true sense of justice had degenerated into court action and counter actions." The people of Eastern Obolo are now appealing to the President Muhammadu Buhari-led Federal Government and the Akwa Ibom State governor, Mr. Udom Emmanuel to press on

Mobil to pay up to N1.2 billion as development grant to the council the same way it is paying to other oil producing councils. Efforts to reach the Manager, Media and Communications at Mobil Producing Nigeria Unlimited, Mr. Ogechukwu Udeagha, proved unsuccessful.

Total donates $500,000 for rehabilitation of IDPs

he NNPC/Total E&P Nigeria Joint Venture has boosted government's rehabilitation efforts for Internally Displaced Persons, IDPs, ravaged by insurgency in the North East with a donation of $500,000. The donation made as part of the NNPC/Total E&P Nigeria Social Corporate Responsibility, CSR, was given to the Nigerian Red Cross. Total, in statement, said the intervention plan was launched on December 1, 2015 in Gombe State, one of the areas affected by the insurgency. “This initiative which is part our social responsibility is in support of efforts to improve conditions in the camps and help the affected persons return to their livelihood,” said Mr. Nicolas Terraz, Managing Director and Chief Executive Officer of Total Nigeria. “The NNPC/Total E&P Nigeria Joint Venture is deploying some resources to assist in this direction and has chosen the Nigerian Red Cross Society as our partner in implementing this initiative,” Mr. Terraz added.

He was represented by the Executive General Manager (Corporate Social Responsibility & Medical Services), Mr. Vincent Nnadi. Representatives of NNPC - National Petroleum Investment Management Services, NAPIMS, the Gombe State Government and the Presidential Initiative for the North East, PINE, witnessed the presentation. The initiative is a 12-month intervention programme designed to achieve ?short term relief through the distribution of food and non-food items to the very vulnerable groups of female-head households, widows, orphans, the infirm and the aged. It will also support livelihood activities of the able-bodied to accelerate their economic recovery and self-reliance. "The initiative will boost psychosocial support activities like provision of safe playing and learning spaces for the children and restoration of family links for families torn apart, among others. "Broaden the scope and reach of community health activities like immunisation, malaria prevention and

treatment of ailments; and “Provide safe and adequate water supply, environmental sanitation and personal hygiene promotion," the statement noted. The Emir of Gombe, Alhaji Abubakar Shehu Abubakar III, who received a delegation of the company at his palace in Gombe the state capital, commended Total’s initiative in supporting efforts to rehabilitate the IDPs.

2016 March, SweetcrudeReports

Community

Mother and child

TEPNG takes safe motherhood campaign to OML 58 communities MKPOIKANA UDOMA, Port Harcourt

s part of its corporate s o c i a l responsibility, T o t a l Exploration and Production Nigeria, TEPNG, has called on young women and mothers to embrace and access safe motherhood services are available in primary health institutions to engender better ante and post-natal care for mother and child. Total's Deputy General Manager, Community Affairs and Development, Mr. James Urho, made the call at the NNPC/TEPNG Joint Venture Safe Motherhood campaign for Olo communities in EleleAlimini, Ikwerre Local Government Area of Rivers State. Urho explained that the health campaign carried out across its various host communities is in line with t h e c o m p a n y â&#x20AC;&#x2122; s determination to promote sustainable public and family health for the communities through support to awareness and access to health care services. "The aim of this programme is to encourage

our young women and mothers to embrace and access safe motherhood services. It is also focused on performances of our midwives and traditional birth attendants with the aim of improving their capacity to assist our young mother who may not have access to primary health institutions or in case of emergencies, to achieve safe delivery, u n d e r s t a n d s t h e complications, possible remedies associated with child birth and ask for help before it is too late. "We encourage you to embrace change from harmful

he Niger Delta Indigenous Movement For Radical Change, NDIMRC, has urged the Federal Government to ignore the call by some stakeholders in the oil and gas industry to cancel the $260 million contracts for ExxonMobil's Usan Field. Recalled that recently, some stakeholders, under the aegis of Nigerian Content Front, NCF, had requested the Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu, to cancel the Usan field contracts.

practices, habits and the rules of the thumb in managing maternal and child care in order to promote the overall wellness and health of mother and child," ?he said. The Total's Community Affairs and Rural Development boss also expressed displeasure over what he described as "inadequate ante-natal care resulting from economic, cultural and religious practices and beliefs", saying these were the leading cause of maternal and child

mortalities in rural communities. "This situation must change and the fatal consequences must stop. In most of our communities, our young women for one or a combination of the factors mentioned above, patronises quacks, local massaging, herbalist and even faithbased centres and healing homes in search of safe delivery. "Against this background, it has become imperative that we draw the attention of our husbands and wives to be aware these unsafe practices

and take proactive actions to forestall being victims". While commending the JV partners, the NNPC and the Rivers State primary healthcare management board, Urho further said the company in its belief in sustainable community health has planned and held other programmes, including healthy living awareness campaign, HIV and Aids screening across its host communities in both Rivers and Akwa Ibom States.

Don't cancel $260m Usan Field contracts, group urges govt NDIMRC, in a press statement signed by its President, Nelly Emma, Secretary, John Sailor and Public Relations Officer, Stanley Mukoro, stated that the contracts followed due process. According to the group; "We want to restate that those seeking for the cancellation of the contracts duly awarded and threatening to drag

NAPIMS (National Petroleum Investment Management Services) before the Economic and Financial Crimes Commission are being economical with the truth. This multi-billion naira deal was managed by Total Upstream Nigeria Limited (TUPNI) for two years before it was taken over by ExxonMobil and it is not true that NAPIMS allegedly

approved the contract illegally." The group also said that; "The NNPC has cleared the air on this issue in a recent advertorial in one of the national dailies and we have expected that those still rooting for the cancellation of the contract would have allowed a sleeping dog to lie.â&#x20AC;?

2016 March, SweetcrudeReports

Community

NLNG collaborates with PHCCIMA to stimulate Rivers' economy

Port Harcourt MKPOIKANA UDOMA

he Nigerian Liquefied Natural Gas C o m p a n y , NLNG, and Port Harcourt Chamber of Commerce Industries, Mines and Agriculture, PHCCIMA, have agreed to synergise in a bid to attract and stimulate

meaningful economic development in Rivers State. The agreement was reached between the two bodies when president of PHCCIMA, Dr. Emi Membere-Otaji, led the chamber’s newly-elected executive council members on a business visit to NLNG office in Port Harcourt. Dr. Membere-Otaji, who explained that the visit was

aimed at seeking ways to jointly re-strategise in the face of the fall in global crude oil prices, emphasised the need for diversification of Nigeria's economy, saying efforts should be strongly geared t o w a r d s i m p o r t substitution and export promotion. Describing NLNG's

decision to move its headquarters to Port Harcourt, he officially invited the company to be a member of PHCCIMA. "PHCCIMA is a veritable platform for strategic collaboration and networking, especially with available trade groups across diverse fields of endeavour active in the chamber.

"We request NLNG to join membership of the chamber so that the company can take advantage to harness the various collaborations with trade groups and members. “We are also here to invite you officially to be partakers of the PHCCIMA quarterly meeting and to request that your company play an active role by assuming the key sponsor of the meeting which is slated to hold in every quarter of the year." Responding, NLNG's Nigerian Content Development Manager, Mr. Charles Okon, who represented the Managing Director, Mr. Babs Omotowa, said the company was open and willing to co-operate with PHCCIMA to attract meaningful development to the economy of Rivers State. The local content manager added that NLNG had been making positive impact in the development of its host communities and the country. Okon said NLNG has added and is still adding value as the highest tax paying company in the country, explaining that the company will continue to add value to the economy with the conversion of flared gas to income. H e c o m m e n d e d PHCCIMA’s idea of ensuring that businesses thrive in the state, and assured that the company is ready to join membership of the chamber.

Rivers council partners marine firm on youth development

ship building company, Stars Marine and Engineering Limited, and Ogu/Bolo Local Government Council of Rivers State are partnering to give career counselling on maritimerelated issues to youths in the area. Managing Director and Chief Executive Officer of the company, Chief Greg Ogbeifun, announced this when the Caretaker Committee Chairman of the local government, Mr. Isaac Ibiberebupakabo, visited the company at Onne/Ikpokiri Wharf,

Rivers State. Ogbeifun, who is also the president of Ship Owners Association of Nigeria said a programme, with the theme, "Catch them young" has been worked out to counsel youths on specific areas of maritime business, including ship building, marine welding and ship repairs, adding that the exercise would help them focus their destiny on maritime-related activities. He noted that with the counselling, some youths could be captains of ships rather than being deckans, stressing that after the peptalk, the participants would

be taken on excursion to the company to see things for themselves. The chief executive officer also noted that the counselling would expose the youths and build their interest to attend the Nigerian Maritime Academy, Oron, Akwa Ibom State to train as maritime professionals. Calling on the local government council to encourage such career, he said: "We are excited to partner with the local government in order to create relationship and rapport. "The maritime sector is a

very lucrative industry; we will ensure to the mental development of these youths in the maritime sector. If you look very well, you will see that not too many Rivers people are into maritime business, so we want to encourage the young minds through the programme to take up a career in the maritime industry. "We commend the council boss for his visit to our office and we believe that this partnership is a step in the right direction". Earlier, the Caretaker Committee Chairman said they were in the company’s

office to ascertain how the company and the council could assist each other. Ibiberebupakabo appealed to the management of the company to make its impact felt in the local government as one of their guest companies, adding that as the chief security officer of the local government, he is assuring companies operating within the council of safe environment a for business and cordial working relationship.

Community

2016 March, SweetcrudeReports

E-mail: johniyene@yahoo.com

Muhammadu Buhari and the subsidy conundrum

Flow station

Communities ask Shell to vacate Apara flow station

u t c h multinational oil company Shell has been asked to stop its operations at Apara Flow Station I in Obio/Akpor Local Government Area of Rivers State. The paramount ruler of Rumuola, His Royal Highness Oziri C. Oziri, gave the warning during a peaceful protest by Rumuokwuta and Rumuola communities at the location of the flow station. The monarch, who is the spokesperson of both communities, said the two host communities (Rumuokwuta and Rumuola) decided to evict the Dutch oil giant since it was done with its exploration and production activities in the area. Oziri lamented that the landlords have never benefited from Shell Petroleum Development Company of Nigeria, SPDC’s, presence since 1958 when the company commenced operations on their soil. The communities are also

asking for remediation and other rights in order to enable them re-possess their land, which Shell has occupied for over 58 years. "The aim of this protest is to inform the government and the entire world how badly the oil company has treated us over the decades. "Apara Location 1 is also one of the first oil wells discovered in this country after that of Oloibiri in Bayelsa State. “All other locations have been relinquished to their landlords which are now under use, except Apara Location 1. Why is ours different?” he queried.

Apara Location 1 is also one of the first oil wells discovered in this country after that of Oloibiri in Bayelsa State

The Nye-Nwe-Eli Rumuola further explained that since Shell’s arrival to their communities, they had never recorded any crisis as it is visible in other areas, saying it would be worthwhile for the oil firm to also vacate their land in the same spirit. According to the royal father, all the communities demand was their fundamental right and not a ransom as no hostage was taken. SweetcrudeReports gathered that Shell had security agents at the facilities to check and monitor the activities of the indigenes so as to prevent any vandalism of its property. Responding, Shell’s spokesperson, Mr. Joseph Obari, in a text message, told SweetcrudeReports that “SPDC is working to conclude handover of the land in question to the owners, in accordance with applicable laws". Incidental issues are also being addressed for final close out, he added.

here were three basic reasons Nigerians wanted Muhammadu Buhari back in the presidential saddle: he had a tonne of experience in statecraft having been involved in governance and policy making from 1975 to 1984; he was reputed to have no patience with corruption and the corrupt; he was an ascetic man, having no hunger for amassing wealth. The lot of Nigerians who desired his return to the presidency was satisfied that these were sufficient credentials to arrest the drift in societal values and the complex puzzle that was the Nigerian economy. The gentleman had waved the wand in the past and gotten unruly Nigerians to queue up in public places, including Oshodi Bus Stop. He had barked and drug peddlers redirected their resources and energies into other ventures. As it was narrated back then, some found coup plotting, letter bombing and “soccer” more profitable ways of avoiding the general’s execution squads. Yes, Muhammadu Buhari is a good man and the Nigerian people voted him back to continue the good deeds he had set upon before the actualisation of his plans were aborted by events. Need is a naked woman; all ages of women want their privates securely covered. Need is a thirst; all men have to quench it. Need is chlorophyll in a plant; if a plant does not synthesise it; it is no longer a plant. Need is the Nigerian masses, PDP, APC, Christians, Imams, Hindus and the ubiquitous asewo at the Bar Beach. Need makes men think, critical, analytical; it is a genuine wager as to who in the context of need drops his zealotry or a hot pot of kettle faster. In the aftermath of the Presidential elections in Nigeria, hope became a Nigerian, building beautiful monuments of change in all aspects of our national life. For the stakeholders and operatives of the oil and gas industry, fear, jitters and trepidation took up temporary residency where they once had hearts while on the other isle, seating the watchmen of the industry and the public, there was elation and restrained celebration. The watchmen hallooed loudly that Muhammadu Buhari had said during the campaign trail that he did not know what subsidy meant. In retrospect, they wish they had been more circumspect, taking him for what he said instead of what they thought he meant. Muhammadu Buhari was contemptuous of the subsidy regime that held sway under the watch of his predecessor and political opponent, Dr. Goodluck Jonathan. He boasted or was taken out of context by the zealots to have boasted that he would deal with the combined maladies of subsidy and the supply of petroleum products in less than three months in the saddle. All, the fanatics, the zealots, the believers, the unbelievers and the critics appear to agree that it was only after the masquerade had been worn his dancing shoes, dressed up adequately for the art that he started to practice for the event, not before as he ought to have for the benefit of all. “I do not know what subsidy means.” Pick up your pen for the briefing, Mr. President sir! Subsidy means vested interests, it is in Nigeria now the “selling point” of competent governance; it is the meeting point between trade unions, stakeholders in the polity as opposed to the industry, and, the crooks in government. These nuggets of wisdom should aid the president come to a decisive resolution that would put to rest the subsidy conundrum and provide the Nigerian masses with a stable supply of petroleum products.

2016 March, SweetcrudeReports