Sweet crude July by Sweetcrude reports

We've provided about $1bn to Nigerian banks since 2006 â&#x20AC;&#x201C; Ed Kostenski, P/13 Nationwide Equipment Founder/President

A Review Of The Nigerian Energy Industry July, 2014

VOL 02 N0. 17

U P DAT E S MONTHLY BASKET PRICE JUL-14 JUN-14 MAY-14 APR-14 MAR-14 FEB-14 JAN-14 DEC-13 NOV-13 OCT-13 SEP-13 AUG-13 JUL-13

108.97 107.89 105.44 104.27 104.15 105.38 104.71 107.67 104.97 106.69 108.73 107.52 104.45

Daily | Weekly | Monthly | Yearly

107.17 U$

109 108 107 106 105 104 103 102 101 100 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14

W/Africaâ&#x20AC;&#x2122;s first offshore simulation centre opens in Lagos YEMIE ADEOYE

he Nigerian Content implementation has recorded another milestone as an indigenous oil servicing company, PEM Offshore Limited, began testing of its Offshore Simulation and Innovation Centre, POSAIC, in Lagos. The company said the first phase of the facility - the first of its kind in West Africa - has been set up and that when other facilities are put in place, the centre would have a full suite of Offshore Anchor Handling Simulation Equipment, Dynamic Positioning, Power Management and Crane Simulation Systems.

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Nigeria:

Election blues impact oil & gas industry negatively

Poor funding, job cuts, cost optimisation plague JV operations

Contents

2014 July, SweetcrudeReports

Editor’s note What has election got to do with oil and gas? Quite a lot, we have learnt since we began the process of gathering materials for this edition of your foremost energy publication. With the 2015 presidential elections just by the corner, the attention of Federal Government political appointees is now focused on achieving victory at the polls. Our investigations show that in the oil and gas sector, such appointees have practically abandoned their primary responsibility of superintending the sector. As a result, ongoing joint venture projects have stalled, with negative implications for time lines, funding and the economy. This is the subject of our cover story for this edition, and to make for more clarity, we bring you the list and the very details of all the stalled projects. Related to this, organised labour in the Nigerian oil and gas sector are worried over dwindling investment in the gas sector three years after the government unveiled the rather ambitious Gas Revolution Master Plan. Acting under the auspices of the Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, labour say the enthusiasm that followed the launch is gradually fading away as investment in the sector dips to an all-time low.

4 6 13 16 21 26 30 34 36 38 41 44

Also in this edition, Ed Kostenski, the smooth-talking founder and president of Nationwide Equipment, tells us the United States-based multinational logistics and finance firm has provided about one billion dollar credit lines to Nigerian banks for execution of projects in the energy sector. In an exclusive interview with our team in Houston, Texas, Kostenski also speaks on a number of factors affecting international businesses in Nigeria, while also proffering suggestions on how to resolve them. For Oando Plc, the good news of the ministerial approval of its proposed acquisition of ConocoPhillips assets in Nigeria must have come as a breathe of fresh air. According to the agreement, Oando was supposed to pay $10 million monthly to ConocoPhillips from January this year as penalty for nonconsummation of the deal that month. The ministerial approval must also have brought welcome relief to the Nigerian company. Now, we hear that the outside date for completing the acquisition has been slated for July 31. We at SweetcrudeReports wish Mr. Wale Tinubu and his team the best of this gamechanging venture. All these and more in your soaring SweetcrudeReports, specially packaged for your information and enjoyment.

COVER

Election blues impact oil & gas industry negatively

OIL

‘How Nigeria can benefit from trillion-dollar global oil & gas investment

FOCUS

We’ve provided about $1bn to Nigerian banks since 2006 - Ed Kostenski

GAS

Russia remains largest gas flarer - World Bank

POWER

Irate electricity consumers attack Ikeja Disco officials

FINANCE

ConocoPhilips’Assets Acquisition Oando posts N6bn first quarter loss

LABOUR PENGASSAN raises alarm over IOCs’withdrawal of investment SOLID MINERAL

Nigeria to acquire mining equipment, expertise from S/Africa

FREIGHT

Maritime stakeholders disagree over waiver clause in Cabotage Act

MOTORING

Toyota tops Consumers Reports’ 2014 car-brand perception survey

TECHNOLOGY

Gas injection technology improves

COMMUNITY

Despite our resources, we are marginalised -Kula People

EDITOR-IN-CHIEF Hector IGBIKIOWUBO EDITOR Chuks ISIWU ASSISTANT EDITORS Yemie ADEOYE Toju VINCENT Eluonye KOYEGWUAEHI

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GM, Marketing Nkem IGBIKIOWUBO

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2014 July, SweetcrudeReports

Cover Story Election blues impact oil & gas industry negatively

2014 July, SweetcrudeReports

Poor funding, job cuts, cost optimisation plague JV operations HECTOR IGBIKIOWUBO

ith the 2015 Presidential Elections around the corner, and the attention of Federal Government political appointees focused on winning, there are indications that ongoing joint venture projects in Nigeria’s oil and gas industry have stalled, with negative implications for time lines, funding and the economy. The country’s joint venture oil and gas industry operation is currently plagued by poor funding of ongoing projects; job cuts; cost optimisation; increasing operating cost; security challenges and complete lack of urgency on the part of the federal government to move projects forward. SweetcrudeReports checks revealed that most of the International Oil Companies, IOCs, already beset with security challenges, had informed their contractors to forget about pending projects till 2015 due to funding challenges.

An industry operator who craved anonymity lamented the ministry of petroleum’s inability to address the funding challenges noting that the current job cuts wasn’t good for the industry and the economy. The operator also lamented the imposition of contractors on ongoing projects by the minister of petroleum resources, Diezani Alison Madueke, adding that when the bid process is jettisoned for discretion, corruption will reign. “Fenog, a local contractor was recently imposed on ongoing Mobil Nigeria Unlimited and Chevron Nigeria Limited joint venture projects,” the operator disclosed. Nigerian oil & gas becoming more complex and unpredictable Chevron When contacted to comment on claims that his company was laying off staff, Mr. Deji Haastrup, the General Manager, Policy, Government

Oil pipeline and Public Affairs of Chevron said “this is not correct”. “As part of a continuous process of business optimization, CNL has been reviewing its service structure and continues to evaluate its business operation to enhance capital efficiency and reduce operating cost. “As a result of these activities, some positions are no longer needed. We now have a leaner organization with fewer positions. Employees, for whom p osit ions a re not available in the new organization, have been offered voluntary separation packages. Other employees have voluntarily elected to take early retirement,” Mr. Haastrup explained. On the NNPC/govt's inability cum refusal to fund JV projects, Mr. Haastrup noted that the competitive business environment where CNL operates is changing rapidly. “The business environment in Nigerian oil and gas sector is

As part of a continuous process of business optimization, CNL has been reviewing its service structure and continues to evaluate its business operation to enhance capital efficiency and reduce operating cost becoming more complex and unpredictable, requiring quick and effective decision making. At the same time, the costs of doing business have increased significantly over the past few years, while production has remained flat. The review of our organizational structure is driven by the need to ensure cost optimization, efficiency in resource deployment and other

CONTINUES ON PAGE 5

Cover

2014 July, SweetcrudeReports

List Of Stalled Projects

Election blues impact oil & gas industry negatively CONTINUED FROM PAGE 4 business considerations. Shell deflects questions over lay off Even though we gathered that Shell has also commenced a right sizing exercise to reflect the realities of operating within Nigeria’s oil and gas industry, the company’s Media Relations Manager, Precious Okolobo deflected questions posed to him regarding the impact of government’s failure to fund outstanding NNPC/SPDC joint venture projects. “Shell has been in Nigeria for the past 50 years contributing significantly to the development of the country. We remain committed to the future of Nigeria and will continue to play our part in its

The business environment in Nigerian oil and gas sector is becoming more complex and unpredictable, requiring quick and effective decision making. At the same time, the costs of doing business have increased significantly over the past few years, while production has remained flat development,” he said. Total says no lay off When contacted, Charles Ogan, the Deputy General Manager in charge of Policy

and Media Coordination at Total Upstream Companies of Nigeria said his company was not laying off employees. “There is no lay off of employees by Total Exploration and Production

Nigeria Limited, TUCN.” Checks however revealed that even thought staff of Total may not be directly affected, contract staff of company may not be so lucky. Management of Total had invited contractors to a meeting where they were put on notice of a decision to defer funding till 2015 owing to government’s inability/refusal to provide counterpart funding for ongoing joint venture projects. Contractors also plan to lay-off Most of the contractors we contacted lamented what they described as the unwholesome effect politics is having on the industry, noting that under the current circumstance, they

would have to follow suite and lay-off staff. Several projects are affected by the delay and these projects include but are not limited to ExxonMobil’s SFDP 2 and Production Uplift Pipeline – Ekpe, Edop & Oso RK-RH; Oso QIT Gas Pipeline project; 5 year Pipelay Programme; Shell’s Bonga South West, and the SPS Package , Forcados Yorkri Integrated Project (FYIP) – Phase 2, Bonga North. Other projects affected by the delay include Chevron’s Escravos Export Line, , the Funiwa Gas project, Sonam pipelay project and the Nsiko project; Total’s Ikike project, OML 100 Firewater System upgrade project and the full development of the Brass LNG project.

Oil

2014 July, SweetcrudeReports

'How Nigeria can benefit from trillion-dollar global oil & gas investment’

An oil facility OSCARLINE ONWUEMENYI, Recently in Moscow, Russia

il and gas experts at the r e c e n t l y concluded WPC in Russia were unequivocal in their submission that Nigeria should exhibit sense of seriousness, create enabling environment and focus on what it wanted for it to be able to share from billions of dollars-worth of investment in the oil and gas industry. The belief is that the nation is already losing out from the investment due to the inability to resolve the fiscal logjam in the proposed Petroleum Industry Bill, PIB, currently in the National Assembly.

money pending when the bill would be passed. An expert on the Nigerian oil and gas industry, Mr. Franklyn Brooks, who spoke to the media on the sideline after a panel discussion on 'Financing Investment in the oil and gas Industry: C h a l l e n g e s a n d Opportunities', said: “We discovered that there are lots of funds that are available which can be invested in the oil and gas sector. The estimation was that in the next 20 years, the industry would require trillions of dollars of investment globally.” According to Mr. Brooks, it has been established that funds are available to support all the projects that have been earmarked to be carried out at different locations around the world. “But the environment must be friendly and attractive for investment for such funds to flow in that direction,” he added.

Executive Director, Commercial and Investment at the Nigerian National Petroleum Corporation, NNPC, Attahir Yusuf, said there has always been money to fund the oil and gas industry. He added that there were so many ways the country could raise money that it needed, adding however that care must be taken to ascertain what was strategically important and viable for the country in the long run. According to him, “This is very important because as a country we need to have a focus and strategies earmarked for raising funds. The conclusion therefore for us as a country, is that yes we have a lot of funding requirements and we all know that we don’t have all the funding, so, we have to look for fund, but the good thing is that the funds are available, so we have to look at our requirements, what is it for, be it exploration, production or infrastructural developments and then call on

Nigeria needs over $60 billion to invest in the oil and gas sector, but, the controversies surrounding the PIB has forced multinational oil companies operating in the country and international financiers to hold on to their money pending when the bill would be passed. those that can assist us.” He added that the discussants looked at a different way on dispensing of funds based on sectors, from explorations, productions development, and also transmitting the ends products to the communities. “Funding the oil and gas industry could be carried out in different ways such as through equity financing, bonds and project financing. On equity financing, the

country can finance it projects through such arrangement because it does not have enough money, and also cannot afford to waste her scarce resources. “There are different ways to assess these funds. We can do so from equity, we don’t have lots of money so, we cannot afford to waste the money. We can go for projects financing, there are criteria for that, and there are peculiar projects for that, so also through bonds,” he said.

Oil

2014 July, SweetcrudeReports

According to him, "only a concerted response by all stakeholders including government, communities and civil society can end it." Lamenting the frustration to gain access to oil spill sites in order to commence clean up, Mshebila said there had been instances where individuals, community groups and armed gangs denied SPDC access to such spill sites. He maintained that the reason for the community groups' actions ranges from intra-communal disputes to demand for clean-up contracts and higher compensation or plain criminal activity.

Helicopter

Shell adopts daily helicopter over-flight to safeguard facilities KUNLE KALEJAYE

h e S h e l l P e t r o l e u m Development Company of Nigeria, SPDC, has adopted daily helicopter over-flight of its facilities in the Niger Delta to safeguard the facilities and help it detect and respond quickly to oil spills resulting from frequent attacks on its pipelines network by vandals. Shell's Country Chair. Mr. Mutiu Sunmonu, disclosed this to newsmen in Lagos, saying the move was one of other safety initiatives adopted by the company to secure its facilities. He stated that as part of other measures to safeguard facilities as well as discover and respond quickly to oil spills, his company had in place pipeline and asset surveillance contracts

from SPDC pipelines and other facilities while it lost production of around 174,000bpd due to shut downs related to theft and other third party interference.

But, despite these measures, Mshelbila said, the menace of crude oil theft and sabotage persists with long term social, economic and environmental implications.

covering its entire area of In 2013, the number of spills operations, which have from its operations caused by primarily benefitted the host sabotage and theft increased communities. to 157 compared to 137 in 2012 whilst production losses These surveillance due to crude oil theft, activities, according to s a b o t age and related Sunmonu, have provided t e m p o rary shut downs employment to about 9,000 increased by around 75 per members of the company's cent, according to data host communities. o b t a i n e d b y Crude oil theft, sabotage of SweetcrudeReports from the facilities and spills resulting company. from the activities of pipeline On the average, the report vandals remain some of the stated, about 32,000 barrels of stiffest challenge to Shell's oil per day, bpd, were stolen operations in Nigeria.

PDC's General M a n a g e r , Communication, Mr. Philips Mshelbila, on his part, revealed that, seeking for new ways to make it difficult for pipeline vandals to gain access to it pipelines, the company has resorted to burying new pipelines deeper and covering them with concrete as well as securing well heads to make them more tamper proof. But, despite these measures, Mshelbila said, the menace of crude oil theft and sabotage persists with long term social, economic and environmental implications.

Irrespective of the challenges presented by the communities to prevent access to oil spill sites, Mshebila said a joint investigation team usually visited the spill sites as quickly as possible in line with government regulation in order to establish the cause and volume of the spill. He further stated: "The team is led by the â&#x20AC;&#x17D; operating company and includes representatives of the regulatory bodies and the Minister of Environment. "Officers of the Nigeria Police Force, the relevant state government personnel and impacted communities also attend. Civil society members are invited to join these joint investigation visit as observers to the process. "In the case of operational spills, SPDC pays compensation to those impacted as stipulated by Nigeria law. "Each clean up begins with the removal of surface oil and affected vegetation. This is followed by the long term process of environmental remediation which is aimed at restoring the site to its previous state â&#x20AC;&#x153;Once clean-up and remediation are â&#x20AC;&#x17D; completed, the work is inspected, approved and certified by government regulators". He disclosed that of the 167 sites in need of remediation at the start of 2013, SPDC had cleaned over 85 per cent by the end of the year.

Houston, Texas,

Nigeria Content Investment Forum

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.

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2014 July, SweetcrudeReports

The Big Ten Plants

Corporate Headqarters: Niger Delta Power Holding Company 17, Nile Street, Maitama, Abuja E-mail: info@ndphc.net Website: www.ndphc.net DL: 2348155888805

Oil

2014 July, SweetcrudeReports

Port Harcourt Refinery gets uninterrupted power from GE mobil turbines

Mobile turbines

o e n s u r e uninterrupted power supply at the Port Harcourt Refinery, three 25-megawatt, mw, trailermounted, aero-derivative gas turbines from the US power giant, GE, are being supplied to the state-owned plant. The installation of the gas turbines at the Port Harcourt Refining Company, PHRC - a subsidiary of the Nigerian National Petroleum Corporation, NNPC, will ensure the country’s largest oil refinery has the power it needs to overcome chronic grid outages and return to full capacity for refining. Up to now, grid outages have reduced PHRC’s output to 30 percent of its total maximum capacity of 210,000 barrels per day. The outages and other factors have forced Nigeria to import large volumes of refined petroleum products to meet its domestic needs. To help address these issues, Genesis Electricity Limited, an independent power producer signed a 20-year power purchase agreement with NNPC in November 2013 for the installation of GE’s TM2500+ units at the 49-year-old refinery. The TM2500+ gas turbines will

provide both the base-load and back-up power to support refinery operations. The agreement also includes the future modernisation of Nigeria’s other two refineries. “We are excited to work with GE to deploy their proven TM2500+ gas turbine technology and help Nigeria successfully return the Port Harcourt refinery to full service as quickly as possible,” said Akinwole Omoboriowo, CEO of Genesis Electricity Limited. “This project was not only important in getting the refinery back into full operation but also to support Nigeria’s long-term economic interests by achieving optimum refining capacity.” The three TM2500+ units will enter commercial operation in August 2014, giving PHRC the power it needs to return to full capacity. As a result, Nigeria will be able to drastically reduce its use of imported refined fuel products. “Our TM2500+ technology’s high-power density and compact footprint make it the perfect solution to address Port Harcourt Refining Company’s fast ramp-up, onsite power requirements while also ensuring the

“Our TM2500+ technology’s highpower density and compact footprint make it the perfect solution to address Port Harcourt Refining Company’s fast ramp-up, on-site power requirements while also ensuring the refinery’s longterm viability,” said Lorraine Bolsinger, president and CEO of GE’s Distributed Power business. refinery’s long-term viability,” said Lorraine Bolsinger, president and CEO of GE’s Distributed Power business.

n support of local content requirements and reflecting GE’s long-term commitment to promoting workforce development opportunities in countries where the company operates, GE is training local engineers to operate and manage the refinery’s TM2500+ units and also has an in-country service and maintenance workshop to service the units. GE, through its Sales & Project Finance, S&PF,

group acted as a catalyst and differentiator to take the project from concept to financial close. GE S&PF worked with GEL Utility Ltd, Genesis, Engro Powergen Limited (one of the equity holders) and other project participants to structure and arrange the project’s equity, senior and sub-debt. It is the first-ever non-recourse project financing for power plants in Nigeria. GE’s TM2500+ gas turbine is capable of providing ISO rated 31 MW of fast and reliable on-site generating capacity. The system can be used to provide utilities with a “baseload bridge” to support

permanent power installations; back-up power to support natural disaster relief efforts; or for plant shutdowns or equipment maintenance. The fuelflexible system can use either natural gas or liquiddistillate. “The PHRC refinery project represents GE’s second TM2500+ order in Nigeria. Both projects have been for oil and gas industry projects, illustrating how GE’s distributed power technologies as well as sales and project financing capabilities can help Nigeria and other countries more effectively utilise their domestic energy resources,” said George Njenga, GE’s Distributed Power country leader for sub-Saharan Africa. GE launched its new Distributed Power business in February 2014, combining t h r e e p r o d u c t lines—aeroderivative gas turbines, Jenbacher gas engines and Waukesha gas engines—to better serve the distributed power space and help meet the world’s growing demand for on-site power systems that are easier to finance, faster to install and more efficient and reliable for customers.

Oil

2014 July, SweetcrudeReports

An offshore oil rig

CAMAC's Oyo-8 to commence production in Q4 KUNLE KALEJAYE

amac Energy Incorporated says its Oyo-8 development well, which was spud last month, will commence production by the fourth quarter of this year. Oyo-8, together with Oyo-7, expected to be completed subsequent to the Oyo-8 well, will significantly raise production from the Oyo Field, one of the first deepwater oil discoveries made in Nigeria. CAMAC Energy announced recently that the Oyo-8 development well was spud on June 15, 2014. The development well lies within the Oyo field, located offshore in Nigeria's OML120, where CAMAC Energy is the operator and owns a 100 per cent working interest. According to a statement by the company posted on its website, the Oyo field is located approximately 75

kilometres offshore Nigeria in water depths of approximately 300 metres. The company said Oyo-8 would be drilled by the Northern Offshore Energy Searcher drillship to a total depth of approximately 1,800 metres in water depths of approximately 310 metres, and will produce from the Pliocene reservoir. CAMAC Energy is an independent oil and gas exploration and production company focused on energy‎ resources in Africa. Its asset portfolio consists of nine licenses across four countries covering an area of 43,000 square kilometres, including existing production ‎ and other exploration projects offshore Nigeria, as well‎ as exploration licenses offshore Ghana, Kenya, and Gambia, and onshore Kenya. T h e c o m p a n y , headquartered is in Houston, Texas, is listed on the New York Stock Exchange under

the ticker symbol CAK, and on the Johannesburg Stock

Exchange under the ticker symbol CME.

Rivers gets Oil and Gas Polytechnic MKPOIKANA UDOMA

he Federal Government has approved the establishment of the Federal Polytechnic of Oil and Gas in Bonny Island, an oil and gas in Rivers State and Nigeria.

polytechnic librarian.

A statement issued by Mr. Simeon Nwakaudu, Special Assistant on Media to the Supervising Minister of Education, Mr. Ezenwo Nyesom Nwike, said the new school also received a N1 billion take-off grant to commence operations.

Wike, who, according to the statement, lauded the establishment of the school, said the Federal Polytechnic of Oil and Gas in Bonny, said it was a practical expression of the president’s commitment to improving access to tertiary education, creation of employment and the empowerment of the youths with the necessary skills to contribute to national development.

The statement disclosed that President Goodluck Jonathan also approved the appointment of Professor Elijah Tamuno Iyagba as rector, and Willabo A. Gilbert as registrar while Akpomeyoma Gabriel was appointed as bursar and Ata John Woke Ajala as

The minister stated that no previous administration in the history of the nation had contributed to educational advancement the way the Jonathanled administration has done since 2011.

Oil

2014 July, SweetcrudeReports

Govt boosts indigenous participation in oil & gas

NIGERIA CONTENT INITIATIVE Dr. Ibilola Amao

Long-term implication of cancelled, suspended/ delayed projects

Oil well YEMIE ADEOYE

he Federal Government a p p e a r s determined to boost indigenous participation in crude oil marketing as shown by the obvious policy shift in a recent award of contracts in that regard to indigenous Nigeria companies.

It was such that 21 indigenous companies were awarded lifting rights against eight international oil traders, two foreign refineries, two subsidiaries of the Nigerian National Petroleum Corporation, NNPC, and three countries, represented by their stateowned national oil companies. The upstream sector of the Nigerian oil and gas industry has also witnessed a series of activities in the last couple of years which, in effect, is reducing the dominance by foreign oil companies in the area. All these are attributed to the enforcement of the federal government’s local content policy as well as the preparedness of indigenous oil players to commence a gradual takeover of upstream activities in the sector. Speaking on the development, a senior official of the Ministry of Petroleum Resources, who spoke on condition anonymity, stated that the 21 indigenous companies favoured in the recent award of lifting rights

for the nation's crude, account for 630,000 barrels per day of crude oil liftings during the one-year period, representing 57 per cent of the 1,179,000 barrels per day awarded to the 38 beneficiaries. A breakdown of the allocations showed that each of the 21 indigenous traders got an allocation of 30,000 barrels per day. These companies include A-Z Petroleum Products Limited, Hyde Energy Nigeria Limited, DK Global Energy Resources Limited, Southfield Petroleum Limited (SPL), Aiteo Energy Resources, Avidor Oil and Gas Company Limited,

Azenith Energy Resource Limited, Barbados Oil and Gas Services Limited, Century Energy Services Limited and Crudex International Limited. Other beneficiaries include Eterna Plc, Bono Energy, Taleveras Limited, Mezcor SA, Sahara Energy Resources Limited, Tridax Energy SA and Tempo Energy SA; and Global Energy Acquisitions MOG Ltd, Ontario Trading SA, Voyage Oil & Gas Limited, Elektron Petroleum Energy and Mining Limited, Ibeto Petrochemical Industries Limited and Emo Oil and Petrochemical Company.

Oando targets July to seal $1.65bn ConocoPhilips acquisition

ando Energy Resources, a company focused on oil and gas exploration and production in Nigeria, has said the outside date for completion of its proposed acquisition of the Nigerian Upstream Oil and Gas Business of ConocoPhillips has been extended to July 31, 2014. This followed agreement with US company to that effect. The parties extended the outside closing date for completion of the acquisition to enable them finalise activities required to complete the transaction, having received the expected consent of the Minister of Petroleum Resources in Nigeria, Mrs. Diezani Alison-

Madueke.

UK's Wood Group takes Ghana’s TEN job

he UK’s Wood Group Kenny has been awarded a subsea engineering services contract on the Tullow-operated Tweneboa, Enyenra and Ntomme, TEN, project, off Ghana. Wood Group did not reveal the value of the contract which will see it supply subsea, umbilical, risers and flowlines engineering services on the project. It will provide Tullow with project engineering resources, specialist technical support and technical assurance services across the Surf implementation work scope through to first oil.

nder normal circumstances, minimal CAPEX and OPEX are expended on land-based hydrocarbon assets whilst assets in water are considered to be considerably more expensive to deploy. Today, in Nigeria, the scales are tipping in favour of mega projects in deepwater for IOCs. Divesting IOCs are now focusing more on green field deepwater projects rather than getting themselves encumbered with the unending problems that plague hydrocarbon assets that are located on land, swamp and shallow water. To be on the conservative side, Nigeria is losing hundreds of thousands of barrels of crude oil a day to pipeline vandalism or theft, so that it makes much sense to invest where losses are minimal, security is less of an issue and uncertainties are low. This is bad news for the leadership of Nigeria and Nigerians because in real terms, land based investments should have a higher return in the short to medium term. We can only hope that marginal field owners deploy the right technologies to optimize their production on land or swamp, secure the pipelines and share facilities to reduce operational costs. We are also hopeful that independents would be able to resolve land based issues amongst operational stakeholders and the host communities. The Federal Government of Nigeria needs to take cognizance of the fact that there are oil and gas discoveries, proposed and on-going projects in Ghana, Angola, Gabon, Equatorial Guinea, Sao Tome & Principe, Mauritania, Cote d’Ivoire and Liberia that are attractive to investors, that could adversely affect the economic viability or profit margin on Nigeria’s hydrocarbon. West African reserves have almost doubled in 16 years. Uganda and Kenya have recorded big finds, and the world is presently excited about discoveries offshore Mozambique (ENI Area 4 Gas Projects), the largest gas find in recent years and which is very likely going to upset Nigeria’s LNG plans. Also, 50 out of 55 countries in Africa have either established hydrocarbon reserves or have begun active prospecting for it. The increasing number of players in sub-Saharan Africa demands that Nigeria focuses on short, medium, and long term plans to reposition Nigeria as a leader of some sort in the global hydrocarbon equation. What exactly will Nigeria be known for in the next five years? Reserves? Deepwater Projects? LNG? Domestic Gas Utilization including Power? Refining? Petrochemicals? Fertilizer Plants? The fact that I do not see any concerted effort and seriousness on Nigeria’s part to lead in many of these areas is worrisome. It is almost obvious that Brass LNG, Train 7 and OK LNG are considered high investment risk assets based on the unknown factor of the current security challenges that face the nation, and hence the inability to compete with other LNG producing nations on pricing, since security, proposed fiscal regime and the delayed passage of the PIB are major risk issues to be considered. However, Bonga SW-APARO, BOSI, NSIKO if made to see the light of day with accelerated FID’s and Contract Awards may become the game changers. The deepwater projects and their economics seem more favourable bearing in mind the fact that technology has improved and the terrains are better understood. Now is the time for IOCs that are more favourably disposed to investing in Nigeria to conduct pre- election activities, such as revisiting feasibility studies and appraisal records, engaging in-house experts to redefine the company’s business model and reposition the business to optimize their assets. One cannot overemphasize the need for intelligent data Change Managers. However, it is noteworthy to remember that the economics of projects post-PIB, where price-based royalty for crude oil and gas are being proposed for sales beyond $70/bbl and $7/mmbtu respectively may stall FID on certain projects. It is becoming impossible to convince the world that Nigeria is an investor’s safe haven. There is a need to focus on security in Nigeria and of hydrocarbon assets, such as pipelines (Warri-Kaduna, PortHarcourt-Aba, Bonny-Port Harcourt, Warri-Benin, Escravos-Warri etc.), Investment in Refinery, Petrochemical and Fertilizer plants and the Gas Master Plan is experiencing delays because the deregulation of the downstream of the oil and gas industry is yet to be fully implemented. What Nigeria’s Oil and Gas industry needs is the collaboration of a credible crop of leaders, professionals, and entrepreneurs who are prepared to sacrifice short-term gain for longterm rewards. If ethical business can be conducted with meritocratic contracts awarded within 2 – 3 months, the best oil and gas stakeholders would deliver innovative hydrocarbon projects and Nigeria would attract FDI. If the Minister is able to feel the pulse of the local and international players, she would understand that now is the time for her to clean up the mess of delayed contracts and take far reaching steps to restore Nigeria’s lost glory. Dr. Ibilola Amao is the Principal Consultant with Lonadek Oil and Gas Consultants Limited, a firm of technical consultants with their core competence in the area of Local Content and Vendor Development. For more information or to reach Dr. Amao you can email her at lolaamao@lonadek.com or visit www.lonadek.com

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2014 July, SweetcrudeReports

1 2

Industrial park

Oil & Gas: NCDMB's new industrial park to revive manufacturing KUNLE KALEJAYE

o boost local manufacturing of quality goods in the Nigerian oil and gas industry, the Nigerian Content Development and Monitoring Board, NCDMB, has set up the Nigerian Oil and Gas Industrial Park Scheme, NOGIPS. NOGIPS became necessary due to the dearth of in-country capacity for the manufacturing of goods in the industry, a major challenge with the implementation of Nigerian local content policy. The absence of the Nigeria local content policy led to heavy reliance on imported goods for project delivery as well as consumption and maintenance requirements during oil and gas operations. In addition, despite nearly $500 billion investment in the industry over the last 50 years, no serious legacy facility or infrastructure could be traced to any generation of major projects in the industry, resulting in thousands of Nigerian job being taken abroad. NCDMB, therefore, aims, through NOGIPS, to attract and stabilise domestic and foreign direct investment in the business of manufacturing goods for the oil and gas industry.

NOGIPS is also aimed to bring local content practice closer to the grass root and to integrate oil and gas-based entrepreneurs into manufacturing for the oil and gas supply chain; and to facilitate new business startups, enterprise incubation and technology acquisition. According to NCDMB, NOGIPS will focus on supporting the growth of small and medium enterprises, SMEs, through mentoring by international Original Equipment Manufacturers, O E M s , a n d o t h e r multinationals.

that one of such models was the establishment of industrial parks. He stated that NOGIPS will address in-country gap in manufacturing through the creation of an enabling environment within oil producing communities for low-cost production of goods, technology acquisition, quality assurance, creation of employment opportunities and structured community participation.

he framework for the implementation of NOGIPS, Ezeobi explained, is anchored on the convergence of aspirations of critical industry stakeholders, community entrepreneurs and governments at different levels.

NCDMB's Public Affairs Officer, Mr. Obinna Ezeobi, in a statement made available to SweetcrudeReports, said through NOGIPS, NCDMB intended to create an enabling environment for productive employment of skilled and semi-skilled workforce, including attracting qualified Nigerians back home, to plug critical skills shortages – ‘brain gain’ and enhance competitiveness of locally made goods and increase utilisation in the oil and gas industry.

“It is also anchored on statutory roles and value drivers for stakeholder groups that will be involved at different stages of the scheme. Small and medium enterprises in Nigeria account for 75 per cent of employment, contributes 10 per cent to GDP and 3 per cent to export.

In pursuit of NCDMB mandate to maximise utilisation of Nigerian made goods where available, Ezeobi said the Board conducted benchmark studies on how other countries developed capacity for local production of critical goods used in their most strategic sectors, noting

"Majority of entrepreneurs in oil communities are SMEs. Therefore, the NOGIPS will focus on developing the local SMEs and to maintain industry standards in terms of quality product output. Local SMEs will partner with international manufacturers or OEMs, to establish

The framework for the implementation of NOGIPS, Ezeobi explained, is anchored on the convergence of aspirations of critical industry stakeholders, community entrepreneurs and governments at different levels. manufacturing facilities within the park,” Ezeobi stated. Highlighting the criteria for the park location, Ezeobi explained that each location shall be based on proximity to oil producing communities, proximity to gas corridor and power plant; adding that closeness to water front will be an advantage Another framework for the implementation of NOGIPS, according to him, is that state governments may provide land to support establishment of parks in their states. Ezeobi said where states are unable to provide land, the Board shall purchase suitable land that meets the set criteria for land selection. He explained further that “in line with section 47 of the NOGICD (Nigerian Oil and Gas Industry Content Development) Act mandating operating companies to

establish facilities in Nigeria, operating companies have indicated support for the scheme and are expected to support the infrastructure development of the parks". The NCDMB spokesman further stated: “To ensure all inclusive participation, the power of the HMPR (Honourable Minister of Petroleum Resources) to direct the operators to set up facilities may be invoked, where necessary, state governments may also support development of basic infrastructure for the park, infrastructure development includes roads, electricity supplies, high-end communications cables, largevolume water supplies, highvolume gas lines etc “The SPV established by the Board that is NCDMB Capacity Development Intervention Co. Ltd/GTE shall be the legal entity for all transactions related to the scheme”.

Focus

2014 July, SweetcrudeReports

We've provided about $1bn to Nigerian banks since 2006 â&#x20AC;&#x201C; Ed Kostenski, Nationwide Equipment Founder/President

d Kostenski is the founding President of Nationwide Equipment, a logistics and finance organisation based in the United States of America but with operations around the world. In Nigeria, his company maintains a considerable presence, providing crucial funding for projects in oil and gas, solid mineral and other sectors. Not surprisingly, Nigeria appears to provide the backbone for the company's worldwide operations. In this interview conducted on the sidelines of the Offshore Technology Conference in Houston, Texas, he opens up on a number of factors affecting international business in Nigeria, while also proffering suggestions on how to get them resolved. Kostenski also asserts before the SweetcrudeReport team, comprising Editor CHUKS ISIWU, Asst. Editor YEMIE ADEOYE and Correspondent KUNLE KALEJAYE, that by virtue of deals brokered, his company could lay claim to being the most successful finance organisation in Nigeria. Excerpts:

Founder and President of Nationwide Group, Ed Kostenski (right), receives the E Star Award from President Barack Obama for excellence in exports.

Tell us about your company, Nationwide, and its scope of operations Nationwide Group started about 31 years ago, in 1983. We are focused on servicing the needs of emerging market participants, mostly to supply financing and infrastructure equipment, oil and gas equipment, with major emphasis on financing. Our major strength is not just to supply equipment because anybody can do that; rather, it is our ability to structure a unique plan that our clients can, in turn, give a general contractor, project development company or service company, which provides our client the ability to buy now and pay later because everybody needs that flexibility in credit terms in their development projects. That is part of the greatest strength Nationwide Group has available for the Nigerian market. What segments or units make up Nationwide Group? In terms of units, we have four divisions and we are active in Nigeria. The group is just the umbrella for our other companies. Nationwide Equipment is the recipient of two prestigious U.S. Presidential Awards. In 2004, on behalf of the Secretary of Commerce, former U.S. President George Bush awarded the President E-Award

Due to our significant experience on the ground in Nigeria, we understand the unique challenges Nigerian companies face across the spectrum of a business operation, from finance to marketing to operations, to technical skills to Nationwide Equipment. The second award was given to Nationwide by President Obama on behalf of the U.S. Department of Commerce, due to our continuous expansion of U.S. services. You can search Nationwide Group on Google and look at the awards given to us by the U.S. Government. Which of your units or services is most active in Nigeria? Nationwide Equipment. We supply quality infrastructure equipment with warranty, including oil and gas equipment and marine equipment. Close

behind is the Nationwide Finance arm, where we finance what Nationwide Equipment sells to the client. In addition, if the client has other equipment to purchase for other projects, we will provide the money for them even if we don't have directly-related supply chain to them. The third division is Nationwide Development where we actually get involved in the projects themselves, bringing in technical support partnership from around the world to Nigerian companies that require skilled management and more sophisticated

investment approach. Are you specifically saying Nigerian indigenous companies with ongoing projects can consult Nationwide for finance or technical manpower? Yes! Due to our significant experience on the ground in Nigeria, we understand the unique challenges Nigerian companies face across the spectrum of a business operation, from finance to marketing to operations to technical skills. Our experience creates an opportunity for us to come in as an extra market to assist Nigerian companies to acquire the right talent. This is a very logical approach, since these companies are already working with us either in financing or supply of marine, oil and gas equipment. All of these options are available for a company, and then they can decide on what they need to grow their enterprise to the next level. Between the areas of financing and supply of equipment, where will you

say you are stronger? That's a very difficult question to answer! Each year, the unique structure of the economy, coupled with constantly changing market developments, leads to an everchanging supply and demand flux between equipment and financing operations. One year it could be financing driving the engine and another year it could be equipment supply. On any given year, however, it typically plays out around 50/50. In Nigeria, which would you say is stronger for you? In Nigeria, there was a time that it equipment was the clear leader. However, the 2008 Global Credit Crisis and ensuing global recession, had a dramatic effect on emerging markets. One last effect weâ&#x20AC;&#x2122;ve seen since 2008 is that the needle has significantly moved to the financing side. Everybody seems to have equipment, but not everybody has the ability to package finance for his client, so that the client can actually win projects and grow. We provide 100 percent financing with equity contribution, which is very rare.

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2014 July, SweetcrudeReports

Ed Kostenski oversees final quality control inspection upon delivery of a Nationwide Equipment swamp buggy amphibious excavator.

‘We've provided about $1bn to Nigerian banks since 2006’ CONTINUED FROM PAGE 13 We work with local banks that are willing to put up a guarantee. From there, we provide all the funding and arrange all the shipment and importation relating to the job. This ranges from site testing to inspection and everything that is needed to make sure that the end user, the general contractor, is successful. We aim to ensure he is effectively implementing all of the equipment to fulfill the job because if he fails in any way it is something we take seriously. We want them to succeed, we want the borrower to repay his obligation. We don't want to see any developments that would put them behind payment schedule. So, we go further than just a lending institution. How do you go about structuring? Give us an example of how you do your structuring Today in Nigeria, we have done over $800 million since late 2006. Access Bank and Ecobank were the first to do transactions with

us. We were one of the first groups to take unconfirmed bank guarantees on the strength of bank balance sheets in Nigeria in 2006 and actually provide credit, which was unheard of in 2004 and 2005. At that time, no one was taking a Nigerian bank’s guarantee. The banking reforms in 2006 under (President) Obasanjo and CBN Governor Charles Soludo were a mark in economic history. These reforms actually paved a way to merge banks, and the reforms forced the banks to strengthen their capital base, thus ensuring that Nigerian Wema Bank, Keystone Bank, Sterling Bank, Enterprise Bank, banks were much stronger. former Afribank, now Mainstreet Nationwide Finance was able to Bank, former Bank PHB, Zenith capitalise on that and assist Bank, GTB and Diamond. Nigerian banks to raise credit offshore, off the bank guarantee and on an unconfirmed basis. How is the Nigerian Nationwide Finance is the most business environment when successful financial organisation compared internationally? in Nigeria. Nigeria is now considered one of the top 10 biggest global Which banks have you economies in the world, and Nigeria is the biggest market in worked with over the years? the whole continent of Africa, We’ve worked with quite a with projections calling for number of Nigerian banks. A population growth to hit 200 small sample: Access Bank,

We were one of the first groups to take unconfirmed bank guarantees on the strength of bank balance sheets in Nigeria in 2006 and actually provide credit, which was unheard of in 2004 and 2005 million in the next 6 or 7 years. That is not something to be taken lightly. Rather, it is something that should be taken seriously, and we recognize the demand in the market place for goods and services. How much of your entire operation does Nigeria account for? It would be conservative to say 85 per cent. Some years, it could drop to 75 percent, but, on average, it is between 75 to 85 per cent. In terms of global operations, it changes. The

winds of trade change over time due to changes in the global economic and political landscape. For example, in some years oil prices could be above 55 per cent and we might not be active in Nigeria, yet we could go above our target that was announced and we might probably be servicing more of the Gulf fields in places where the world emphasizes our money. There are strategic market players in the world that would just balloon the prices in the market, and naturally if oil prices drop there would probably be a shift in our business percentage, based on how much we are doing in Nigeria. Most businessmen complain about government policies and how they are affected by the inconsistencies. What has been your experience in this regard? Yes, we’re affected as well! That has probably been the biggest frustration for us working in Nigeria in the last 13 to 14 years. I would say the operation of the port in Lagos is very frustrating, challenging and can be very depressing at times. You can have all your paper work in the right manner and your importation correct, but sometimes your goods just get delayed. Goods eventually gets cleared, but the delay and the demurrage costs accumulates to your account due to no fault of your own, but you have to pay them or

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2014 June, SweetcrudeReports

‘Nationwide is most successful finance organisation in Nigeria’ CONTINUED FROM PAGE 14 you won't have your goods cleared. That is enough to make you want to go to court or something. It would discourage most businesses if it happens repeatedly, which it does, but it is getting much better in the port. In addition, there are other challenges apart from the port. I think taxes are too high on the people for what is being provided to them. What could be done with the country’s resources is not happening as fast as it should be. There is plenty of room for increased efficiency. The growth of Nigeria is expanding tremendously, and there are projects that need to be done in a timely fashion, but they are not. For example, I drove by road from Lagos to Benin Republic. I have driven from Benin to Lagos before. The drive was not too bad. However, I did it a second time with just a little rainfall, and what should take an hour on a typical African highway may take you a day or 14 hours. That is absolutely ridiculous with a country that has enormous resources. The road construction is not a big project, but you will realize that it is a bottleneck for growth in the country. That is one example. The second challenge is at the airport, but it is much better now than what we used to have several years ago. As a result of the exploding g r o w th , th e e x p a n s i o n o f infrastructure and available services does not keep up with the rate of growth. The infrastructure at the airport is also challenging. The airport seems to function as only a place for people to enter and exit the country; there are no VIP services inside Lagos for average and influential business people. You are just thrown outside, and it is like people pouncing upon you. It’s very difficult to know where to go.

here should be a service for people who want to come into Nigeria and invest. Both small investors, such as small service providers, and those who want to invest billions of dollars in the country should be able to feel secure immediately when they land because a first impression is lasting. That is an area I think deserves attention. From your own point of view, what is good about

doing business in Nigeria? There are a number of good reasons for doing business in Nigeria; I can provide a pretty good list. But the two most important reasons are: one, the ability to grow your business, and two, to do it at a very aggressive rate of growth. You can come into Nigeria and start out a humble and small business and in the next three months, you could have the largest orders in the history of your organization and that is heavily dependent on the quality of your product or service and how comfortable people are working with your company. I have worked in several countries in the world and I have never seen any country where you can accelerate in prosperity and growth as fast as in Nigeria. It is very different with the rest of the world and that is very encouraging to the energy and intellect of business people. I would say that Nigerians are smarter than you think. People may have ideas about Africa or Nigeria, but they are very intelligent. They know how to get things done quickly and in an efficient manner. I have seen things happen in Nigeria much faster than America, and I praise Nigeria for that. The infrastructure wheel is steadily turning and that would make any business grow. What do you think is responsible for the speed of growth in Nigeria compared to other parts of the world?

Kostenski (left) and Jegede A. Paul, CEO of Japaul Oil and Maritime Services, at Nationwide's Headquarters, U.S. What type of equipment have you supplied? Our equipment division supplies mining machines, seagoing vessels to service the oil majors working in offshore platforms. Last year, we financed a drilling rig. Additionally, we make sure to not forget those indigenousbased companies. These are companies that could not get financing without our help. You made mention of supplying equipment fpr mining. What is your assessment of the Nigerian mining sector?

I see the willingness to make business happen and the willingness to serve in the Nigeria people. They are willing, they are able, and if it can be done, they will do it. I am speaking on the private level not government. The private sector is very dynamic, very exciting, very positive, optimistic and full of energy and that would always foster growth. Nigeria has a lot of things that can cause growth of any goods and services pretty rapidly.

There is a great supply of steel in the mining and ore sector of Nigeria. There is zinc and other mineral resources. These are the main minerals. We supply equipment to those companies that are actually doing that type of digging and findings. Further, we assist the granite companies as well, in regards to drilling equipment, warehousing, polishing factories where these minerals are actually taken.

Apart from Nigeria which other African countries do you have operations?

The mining sector is huge, but it is not expanding as rapidly as it should. Running a mine is not like running a shoe store. It is capital intensive, it is time intensive, there is risk related to it, it is very labor intensive, and you must have good management skills, and

We do business in South Africa, Zambia, Ghana, Kenya, Senegal, Angola. They are our biggest trading partners. Elsewhere, we just do business.

Do you see the prospect of that sector expanding?

There are other challenges apart from the port. I think taxes are too high on the people for what is being provided to them. What could be done with the country’s resources is not happening as fast as it should

competent technical servicing of the equipment that is being used on a daily basis. I think those few services are why the mining sector has not blossomed as expected in Nigeria. 30 years down the line, where are you headed with Nationwide? What are your short, medium and long term vision for the company? That's a very big question. On the short term we see that the company's continuous strength in Africa is to continue supporting our customers relating to the project, financing infrastructure, mining, oil field and gas equipment. That is not going to change because we have orders on a weekly, monthly and continuous basis. In the medium term, we are

assembling a facility in Nigeria and other countries, expanding our services in rental and lease in Nigeria, and continuing to service the oil and gas sector of the world. We have ample underground equipment that is needed to take to the field and work. For the long term, we see Nationwide's continuous expansion in and around the African region. Our aim is to duplicate what we are doing in Nigeria. . m runs them through a three to six month course Can you give us a figure of the credit lines you have given to Nigerian banks? Nearly one billion dollars since 2006, when the banking reforms took place. The banking reform was put in place by former CBN governor (Charles) Soludo and former President Obasanjo.

Gas

2014 July, SweetcrudeReports

Russia remains largest gas flarer - World Bank Says 140bcm of gas flared annually globally OSCARLINE ONWUEMENYI, Recently in Moscow, Russia

ussia remains the world's largest gas flarer and has fallen woefully short of its targeted cuts, despite government legislations, according to the World Banks.

The Bank said about 140 billion cubic metres, bcm, of gas is flared or burned annually worldwide, equating to some 350 million tonnes of carbon dioxide emissions. According to the World Bank also, there has been a minimal reduction in gas flaring in many countries, including Nigeria, even as it announced that it will soon propose a target of zero routine gas flaring by 2030 and will be looking to many organisations to support this initiative. The 140 billion cubic metres of gas flared annually worldwide is equivalent to the entire electricity consumption of the African continent, according to Anita George, a director of the World Bank's International Finance Corporation, with a special focus on the energy and extractive industries. “Eliminating this gas flaring would, in emissions terms, be equivalent to removing 70 million cars off the streets and could have a huge visible, significant and relatively short-term impact on climate change,” she told delegates at the recent World Petroleum Congress in Moscow, Russia. Some nations have already made dramatic changes to their gas-flaring practices, said George. “In Mexico, gas flaring has been reduced by 66% in just two years. Mexico's Ministry of Energy, (state oil company) Pemex and the country's regulators deserve credit for this achievement. “In Azerbaijan, (state player) Socar has reduced gas flaring and venting by almost 50% in two years and in Nigeria, with an investment of over $3 billion, gas flaring has been reduced by 4bcm over the past five years,” she said. She stated that “according to satellite data, Russia is by far the largest flarer of gas. Russian regulation required that by 2012 oil companies would have to utilise a minimum 95% of their associated gas or be subject to fines. “Unfortunately, the utilisation rate is far from this required level, but it seems clear that this regulation and other measures have accelerated the utilisation of gas by companies such as Rosneft, Surgutneftegas, TNK BP and

Gas flaring

Gazprom Neft.” The government in Russia's Khanty-Mansiysk region launched “an ambitious” programme on gas utilisation with an investment of $3.4 billion, which included an 1800-kilometre gas pipeline, 34 gas-fired and reciprocating power plants and two gasprocessing plants. “As a result of these investments the KhantyMansiysk government has achieved 85% associated gas utilisation and a 45% reduction in annual gas flaring,”said George. Thirty-two oil companies and

“In Mexico, gas flaring has been reduced by 66% in just two years. Mexico's Ministry of Energy, (state oil company) Pemex and the country's regulators deserve credit for this achievement

producing nations comprise the World Bank-led Global Gas Flaring Reduction Partnership that was launched in 2002. “This partnership promotes the effective regulations and creating government incentives to unlock the opportunities [from the gas] that currently is burnt into thin air,” said George. While gas flaring might be a relatively minor source of black carbon globally, it is particularly important in the Arctic.

“Early stage research shows that flaring contributes close to 40% or more to the black carbon – or soot - deposited on snow and ice in the Arctic. When deposited on snow and ice, the soot absorbs heat and reduces the ability to reflect sunlight which then causes melting as well,” she said. George believes that gas flaring is one “very tangible and relatively short-term way” for the oil and gas industry to show leadership on mitigating the effects of climate change.

2014 July, SweetcrudeReports

Gas

Vehicular traffic

CNG Vehicles: Nigeria to save N65bn on fuel subsidy KUNLE KALEJAYE

igeria will save about N65 billion annually on fuel subsidy if 35 per cent of motor vehicles in the country were to convert to use of compressed natural gas, CNG, as automotive fuel. In addition to the fuel subsidy savings, the government will save about 42 per cent of foreign exchange‎ expended on purchasing 4.7 billion litres of petrol yearly. ‎ Managing Director, NIPCO Plc, Mr. Venkataraman Venkatapathy, who disclosed this, said Nigeria should embrace the use of natural gas as alternative fuel for motor vehicles because of the energy security it offers as well as for its and economic viability. He spoke on the company's efforts on CNG in Nigeria through Green Gas Limited - its joint venture company with the Nigeria Gas Company - at a national conference on 'Deepening Domestic Utilisation of Natural Gas Resources,' in Abuja. According to Venkatapathy, with the adoption of natural gas as alternative fuel in the country, there would be no need to build expensive refineries nor will the country continue to

import fuel from other countries. The NIPCO managing director noted that Nigeria has over 182 trillion cubic feet, tcf, of proven gas reserves placing her as the 7th largest natural gas reserve holder in the world. However, Venkatapathy‎ said Nigeria, one of the leaders in global gas flaring‎ , flaring 40 per cent of its annual production, representing 12.5 per cent of the gas flared in the world. Commenting on the importance of natural gas vehicles, NGVs, Venkatapathy said, provide a lot of prospects and opportunities for countries that have realised the need, created awareness and made appropriate regulations for using natural gas as a vehicular fuel‎ . According to him, "major potential for gas utilisation in Nigeria lies in the vehicular market‎ . Economic situation is mainly driven by fuel pricing and scarcity of petroleum products, while fuel pricing issue is driven by the “excessive subsidy” required by government to maintain availability of refined products." For a successful NGVs in Nigeria, the NIPCO boss called for adequate regulatory requirements and investment

stimulation, urging that a strategic plan to increase the share of natural gas in the Nigerian fuel mix be put in place by the government, so also a liberal licensing regime for setting up CNG dispensing stations. He also called for investments in widespread availability of natural gas through a well

"Beside the environmental benefits from NGVs, developing the Nigerian NGV industry will be a profitable proposition. NGVs in Nigeria has huge potential for creating jobs and a large market for gas, thereby providing alternatives to petrol usage and saving foreign exchange for the Nigerian government.

NGVs, Venkatapathy said, provide a lot of prospects and opportunities for countries that have realised the need, created awareness and made appropriate regulations for using natural gas as a vehicular fuel established pipeline distribution network, ‎ government policies to waive Customs duties on NGVs equipments, ‎ subsidy to vehicle owners to convert their vehicles, ‎ introduction of NGVs in public transportation system – taxi fleet, mass transit buses - and mandate use of NGVs in all departments of local, state and federal governments.

"NGVs will ensure the spectre of fuel scarcity is finally laid to rest, as Nigeria has gas reserves in abundance, of which only a fraction is required to sustain the country’s NGV requirements. "Sustained strategic drive is required from policy makers to generate the initial momentum required to develop the NGV

industry by demonstrating a strong government commitment towards developing of the NGV industry, increasing investments in widespread availability of natural gas via the expansion of eastern and western domestic gas networks, waiving off Customs duties on NGVs and ensuring 50 per cent of the vehicle imported are only NGVs," Venkatapathy said. Venkatapathy recalled that NGVs was first introduced by the Nigerian Gas Company in 1989 with two stations installed in Warri and Lagos. and 25 vehicles converted to run on natural gas. He said the project was a success, the only downside being the unavailability of CNG stations. "In 2007 the Federal Government granted license to NIPCO Plc to implement pilot project in Benin City, Edo State. NIPCO in partnership with Nigeria Gas Company, which led to the formation of a JV company, “Green Gas Ltd” successfully implemented the pilot project in Benin City, with 7 operational CNG stations catering to over 4,000 NGVs. "In 2013, Edo state saved over N256 million on fuel subsidy with 2,000 Natural Gas Vehicles running in the state," he revealed. Venkatapathy projected that Lagos could as much as N25.90 billion annually if 418,156 vehicles begin to run on CNG in the state.

2014 July, SweetcrudeReports

Gas

Shell now accounts for 18% of flared gas in Nigeria Gas flaring by Shell

KUNLE KALEJAYE

he Shell Petroleum Development Company of Nigeria, SPDC, now accounts for 18 per cent of the 1.2 billion cubit feet per day of gas currently being flared in Nigeria, according to Country Chair, Shell Companies in Nigeria and Managing Director Shell Petroleum Development Company of Nigeria, Mutiu Sunmonu. Sunmonu, who disclosed this in Lagos, said Shell was working with the Nigerian government and it’s joint venture partners on achieving the objective of ending flaring of associate gas as soon as possible. According to him, SPDC reduced flaring volume from its facilities by about 75 per cent between 2003 and 2012. The company has also reduced flaring intensity which is the amount of gas flared per barrel of oil produced by around 60 per cent over the same period. Sunmonu ‎ said these reductions were the result of a multi-year programme introduced in 2000 to install equipment to capture

associated gas from its oil producing facilities, adding that when completed, these projects would take SPDC flaring to below current industry average levels. Said the Shell Nigeria boss: “Although there was a reduction of about one-fifth in volume of gas flared, this was largely due to lower than expected oil production caused by sabotage, theft and related deferment where there were reduced volumes of associated gas and also improved operational efficiencies from the functional facilities. “However, frequent pipeline sabotage disrupted our gas processing systems and impacted negatively on performance, contributing to about a five per cent increase in flare intensity compared to 2012. ‎ ”Joint venture funding challenges have resulted in delays to some gas gathering projects, two of these projects which were expected to gather an additional 35 per cent of associated gas by 2014 to 2015 are likely to be delayed.” Despite these challenges, Sunmonu noted that the overall trend in associated gas

gathering and flaring reduction was positive and added that SPDC has a worked plan in place to drive further reductions. The SPDC chair said when the $4 million SPDC JV project at Forcados, near Warri Delta State, was completed, the company’s gas flare reduction

record would be the best in the world. He claimed that SPDC was the first venture to supply gas inside Nigeria and remains a pioneer, developing gas for power with its Afam VI power plant, which uses gas from the company’s Okoloma gas plant with the capacity to increase

the nation’s current electricity power supply by approximately 20 per cent. Demand for gas in Nigeria and other countries has grown in recent years whilst technology to harness, liquefy and export natural gas to distant markets has since become commercial.

World Bank wants end to gas flaring by 2030

he World Bank wants oil and gas producers across the world to bring natural gas flaring to an end by 2030 and has hinted of its move to work with producers to stop flaring the gas by that date.

years to 2017. The gas is pumped from fields when companies drill for oil.

The amount of fuel wasted in this practice would, according to the bank, generate enough power to meet all of Africa’s demand for electricity.

Mexico and Azerbaijan have reduced flaring about 66 per cent and 50 per cent, respectively, in the past two years, George said.

“It will be voluntary but we hope that both companies and countries will see the sense in what we are proposing,” Anita George in the bank’s extractive industry unit was quoted by Bloomberg as saying. “We are planning to propose it in September.”

In Nigeria, Royal Dutch Shell Plc is investing about $4 billion to reduce flaring from local oil fields.

The World Bank is leading 33 companies and nations in the Global Gas Flaring Reduction partnership that seeks to shrink the industry custom by 30 percent in the five

Halting the burning of about 140 billion cubic meters of gas globally every year would reduce carbon-dioxide emissions equivalent to taking about 70 million cars off the roads.

BP Plc’s biggest flaring occurs at its crude production in the Rumaila oilfield in Iraq, the chief executive officer at the London-based company, Bob Dudley said. It’s proposing to pump gas to Kuwait to reduce the country’s liquefied natural gas imports.

2014 July, SweetcrudeReports

Gas

Gas, others frustrate progress on GGOEX’s $1.1bn Nigerian methanol facility

Methanol Plant

ulf of Guinea Oil Exploration L i m i t e d , GGOEX, has blamed the delay witnessed in the financial closure of its $1.1 billion (N176 billion) methanol plant in Nigeria to hindrances in gas supply to the facility as well as delays in concluding land allocation. Mr. Nze Joe Ibeh, Director, GGOEX, also lamented the absence of a clearly defined chemical development policies in the country, saying that this will hinder the realization of a national industrial development and growth for petrochemical products and technology. According to him, the absence of a thriving chemical industry in Nigeria poses a dilemma for the industrial and economic development future of Nigeria. He said in a statement, “There are no defined chemical development policies in place despite the Vision 20:20:20 agenda intending to make Nigeria one of the top 20 developed countries in the world. “The chemical sector is a key factor to realise national industrial development and

growth for petrochemical products and technology. “This industry belongs to the oil and gas sector, which is the cornerstone of a vibrant petro-chemical industry, and there is a need for structural reforms similar to the telecommunications and financial industry to foster domestic growth in the sector". He noted that the methanol facility, which will require an investment of approximately US$1.1 billion and a projected daily production of 5,000 metric tonnes, will be housed in the proposed Gas Industrial Park at Ogidigben in Delta State, an initiative of the government designed to be a one-stop shop for gasbased industries in the country. The methanol plant project sponsor is Gulf of Guinea Oil Exploration Limited while Haldor Topsoe AS, HTAS, of Denmark is its strategic partner and licensor. Ibeh, who is also a former director of the United Kingdom subsidiary of the Nigerian National Petroleum Corporation, NNPC, however, stated that the company has been working closely with the Gas and

Power Directorate of the NNPC for the past two years in order to bring the project to fruition. He said that the project financiers are at advanced stages of discussions with the Nigerian government in reaching agreements for the allocation and supply of natural gas for the life of the project.

While stressing the benefits from the success of the project, he added that methanol would be derived from processing natural gas, which is an optimum feedstock option available and cost efficient in Nigeria During a recent courtesy visit t o the leaders of Ugborodo community, the host community, the

community leaders were excited at the siting of the project in their domain. The community was however cautioned on the need to maintain peace in order to ensure the successful completion of the project, which would lead to massive job creation and boost the economic activities of the area.

US Bill would criminalise frac fluid disclosures

new Bill in the US state of North Carolina could make it a felony for any individual who discloses the ingredients of hydraulic fracturing fluid. The so-called Energy Modernisation Act would make it a Class I felony to disclose proprietary information related to fracking. The legislation also details how the information would be provided to emergency workers, who would be required to fill out confidentiality forms upon receipt.

The propsed Bill is coming amid recent declaration by oil services giant Baker Hughes that it would start disclosing 100% of the ingredients in its frac fluid. North Carolina, which has no significant oil and gas activity currently, has been crafting regulations to attract the oil and gas industry. The state's Deep River basin holds potential unconventional resources,

but it has been little explored. There is a currently a state-wide moratorium on unconventional development in place, pending the creation of regulations. The proposed bill would task the state geologist with maintaining the chemical information of frac fluid. The state's emergency management office would be able to use that information for planning purposes. In the event of an accident, the information could be handed over to medical providers and fire chiefs, as well. The bill would make anyone who discloses the sensitive information subject to criminal penalties. Class I is the lowest grade felony and is punishable by up to a few months in prison.

2014 July, SweetcrudeReports

Gas

Gas and power plant

NSE tasks govt on gas supply to power plants YEMIE ADEOYE

he Nigerian S o c i e t y o f Engineers, NSE, has advised the F e d e r a l Government to ensure adequate gas supply to match high demand for gas by the thermal power stations and bring about stable electricity supply across the country.

electricity supply. He urged the government to expand the existing power grid so that it could be able to evacuate energy generated from all the power plants. "Government should work in the area of national grid expansion. For a long time

now the grid has been very weak, it needs to be expanded so that it will be able to effectively evacuate energy generated by power plants," he advised. Siddiq stated that the Council for Regulation of Engineering, COREN, had

According to him, NSE Egbin Branch was known for its dynamism and was well

represented in national activities. "We promote engineering learning and practice in our environment. "The branch has also made great contributions in developing the technical capabilities of Egbin staff through workshops and seminars," he said.

180 Nigerians benefit from NLNG training in S/Korea

Mr Lanre Siddiq, NSE chairman, Egbin Branch, made the call during the 2014 Engineering Week in Lagos. He said that lack of gas had affected the operations of the power plants, preventing them from generating enough energy, adding that this has resulted in worsened power supply. "Gas supply is causing a great problem for power plant. By now power generated will have increased a lot but due to insufficient gas supply, the power generation is dropping Here in Egbin, for the past two weeks, we have been managing the little we have and that is why there is drop in power generated here," he said. The chairman maintained that if the government could improve on gas supply to all the power plants in the country, there would be a tremendous improvement in

signed a Memorandum of Understanding with the Economic and Financial Crimes Commision, EFCC, to phase out quackery in the system.

three months they would stay in Korea, be trained in ship building, and the best 28 out of the number would fully join in the actual construction of the two planned ships and another four that had been ordered by BGT.

onny Gas Transport Limited, BGT, a subsidiary of the Nigerian Liquefied National Gas Limited. NLNG, is overseeing the training of 180 Nigerian youth technicians at the Hyundai Heavy Industries, HHI, in South Korea. The youths would be

trained by the Korean company in fulfilment of an agreement under the Nigerian Content Law, specifying the training of Nigerians by the Korean company as part of the condition for the award of contract for the construction of two new LNG carriers to HHI by Bonny Gas Transport. The youths would, in the

right technology skills are transferred to help develop our maritime industry and this procurement provides us a good opportunity. "There are other gains but this human capacity development stands out and we are proud to be contributing to capacity development and job creation in Nigeriaâ&#x20AC;?.

â&#x20AC;&#x153;Our commitment to Nigerianisation and Nigerian local content practice is strongly based on professionalism and competence and has enabled us groom Nigerians and companies that today compete on the world stage", Mr Babs Omotowa, NLNG's managing director, said in a message to the selected trainees.

In 2013, the NLNG subsidiary ordered six new vessels at a cost of $1.6 billion from both Hyundai Heavy Industries (two ships) and Samsung Heavy Industries, SHI (four ships), which are expected to boost its capacity in the LNG transportation business.

He added: "Every action we take in Nigeria LNG Limited, we seek to help build a better Nigeria. That is why so many gains are evolving from these contracts with HHI and SHI.

Under the agreement signed with the ship builders, 580 Nigerians would be trained in different aspects of ship building and construction as part of the Nigerian Content Development policy.

"We want to ensure the

Power

20 July, SweetcrudeReports

Irate electricity consumers attack Ikeja Disco officials

Power facilities

KUNLE KALEJAYE

rate electricity consumers in Mafoluku area of Lagos, which falls within the network operation of Ikeja Electricity Distribution Company, IKEDC, have launched an unending attacks on electricity officials. Sweetcrude Reports gathered that these electricity consumers are angered by the huge bills from the power distribution company, despite inadequate power supply to them. It was learnt that some communities have been neglected and denied transformers, electricity poles and other electrical accessories by officials of IKEDC. The management of IKEDC however condemned the incessant attacks of its workers by members of the public. Assistant General Manager, Public Affairs of IKEDC, Mr. Pekun Adeyanju, in a statement, said that in spite of the company’s effort in ensuring effective power supply to most customers some groups in some communities have continuously assaulted

it's staff and causing‎ malicious damage to company’s equipment and installations. "We note with dismay that whilst it continues to enjoy the support of most customers in its quest for improved power supply ‎ despite the considerable shortfall in the power allocation from the grid, ‎ certain groups in some communities have persisted in carrying out assaults on IKEDC staff and maliciously damage the company’s equipment and installations. "The management has taken a painful but inevitable decision to temporarily shut down the Mafoluku Injection‎ Substation to protect the lives of staff," he said.

r. Adeyanju added in the statement that the injection substation was shut down to safeguard the ultramodern equipment in the station from been vandalised by residents of Mafoluku, who besieged the station under the guise of protest. He reiterated that it is on record that the company had severally engaged various representatives of the Mafoluku Community on

improved service delivery. The IKEDC Assistant General Manager, Public Affairs, explained that the management of the company had earlier organised a customer’s forum with Mafoluku Community Residents Association and Oshodi Youth Alliance to address issues facing the community. He also stated that IKEDC had constructed two additional 11kv feeders from the Mafoluku Injection Substation to relieve overloaded ones and which will in turn improved power supply to the community. "It is important to mention that the issue of low power supply to the community is as a result of inadequate power from the grid. IKEDC currently gets an average of 35 per cent to 40 per cent of its maximum demand on daily basis from the grid. "We have remained resolute in our commitment to ensure equitable distribution of this low allocation to all our cust om ers a t a ll t im es, including the Mafoluku community. "We strongly condemn the

Sweetcrude Reports gathered that these electricity consumers are angered by the huge bills from the power distribution company, despite inadequate power supply to them

assaults on the company’s staff and malicious damage to its property. Such acts run contrary to the law and relevant security agencies have been called in to ensure prosecution of defaulters,’’ the statement stated. The management of the company appeals for the understanding of wellmeaning customers in the area, as it disclosed that the station will remain shut until the community could guarantee the safety of the lives of staff and the multimillion naira investments that have been made to drive

improved power supply. Adeyanju said that IKEDC, in its commitment to forging robust partnerships and addressing specific needs, has held series of meetings with the communities within its network. He also pointed out that the company has introduced an interactive contact centre that is equipped to handle customer queries through its customercare@ikedc.com and customers can also reach the company on the dedicated telephone lines: 0700-225545332 and 0800-2255-45332.

2014 July, SweetcrudeReports

Power

Aggreko generating sets

Aggreko partners Nigeria's Bresson Energy on 250mw project OSCARLINE ONWUEMENYI

he world’s largest temporary power g e n e r a t i o n company, Aggreko Plc, has signed an agreement with Bresson AS Nigeria Limited, a pioneer independent energy firm, to reinforce and boost power generation in Nigeria by 250 megawatts, mw. The agreement, in the form of a memorandum of understanding, was signed in Paris, France, by Aggreko regional director, Mr. Christopher Jacquin and Bresson AS chairman and business mogul, Mr. Gbenga Olawepo. Details of the agreement showed that power facilities will be cited in industrial clusters across the country which is expected to enhance power generation capabilities within the next nine months. Explaining the basis of the partnership, Mr. Olawepo said the move was in line with Nigeria’s plan to boost electricity supply, adding that the strategic goal of Bresson AS was to deliver affordable, cleaner and efficient energy. According to him, the company plans to provide

innovative energy services using environmentally friendly technologies tailored to meet the needs of customers and help people become energy sufficient. This marks another milestone in the involvement of the private sector in power supply enhancement. Bresson AS already owns Magboro 90mw power project in Ogun State, Western Nigeria and hopes to commission the plant, configured on 2GE LM 6000, in the coming months. The plant will immediately add

Mr. Olawepo said the move was in line with Nigeria’s plan to boost electricity supply, adding that the strategic goal of Bresson AS was to deliver affordable, cleaner and efficient energy

20mw to the country’s national grid while providing sustainable energy for the

local communities. “Bresson is determined to further add a total of 500mw within the next 12 months to its daily generation capacity through emergency power generation, particularly in strategic centres in order to arrest acute power shortages,” Olawepo added. Nigeria currently produces between 2,000mw to 4,000mw, despite an installed capacity that exceeds 6,000mw. The country is determined to raise output and has set sights on an improved target of 40,000mw by 2020.

Dangote generates 262mw electricity to run factories

he Dangote Group says it has taken advantage of the nation's abundant natural gas reserves of over 180 trillion standard cubic feet and is currently generating about 262megawatts, mw, of electricity for its operations.

‎ The company, which takes natural gas from the Nigerian Gas Company, NGC, a subsidiary of the Nigerian National Petroleum Corporation, to generate its own power, said about 16mw of the generated power is supplied to its sugar refinery,

KUNLE KALEJAYE 135mw to the cement factory at Obajan in Kogi State and 111mw to another of its cement factory at Ibese, Ogun State. Despite the company's success story in private power generation, ‎ Managing Director, Dangote Sugar Refineries, Alhaji Abdulahi Sule, however, called for more private sector participation in gas-to-power projects. He urged fellow private sector organisations to explore and

maximise the vast opportunities that abound in the gas sector, as well as gasto-power projects‎ , adding that huge investments is required for gas project off-take and credit risk management issues for potential investors in the sector Sule, who disclosed this recently in Lagos, said the Federal Government's gas master plan has laid a solid framework for gas infrastructure expansion within the domestic market and that it is a ‎ guide to the

commercial exploitation and management of country's gas sector. He explained that out of the current annual gas production of about 2,000 billion cubic feet, bcf, about 40 per cent is flared, noting that there was now a 70 per cent drop from the proportion flared before the reforms. According to him, investment opportunities abound in the gas sector and there is room for domestic gas market expansion.

2014 July, SweetcrudeReports

Power

Challenge Discos on outrageous bills, NERC urges Nigerians

Abuja at night

lectricity consumers in Nigeria have been encouraged by the Nigerian Electricity Regulatory Commission, NERC, to challenge the various power distribution companies or Discos in their areas when confronted with outrageous power bills by the companies. According to NERC Chairman/Chief Executive Officer, Dr Sam Amadi, when a customer is confronted with 'crazy bills', such customer should contest the validity of the bill “and by regulation, they (Discos) should be able to respond to you within a given time. And if they fail, you can go to the forum office to make your complaint.” He assured that the Discos would respond to the customers complaints because of the sanctions stipulated in the regulation for any Disco that failed in that regard, especially when the customer has a valid case.

Specifically, according to him, there were sanctions against any Disco that failed to comply with the recommendations of the forum office or the regulator if such complaints were just. Amadi made the explanation as he disclosed efforts by the commission to ensure meters reached every power user in the country, to avoid cases of 'crazy bill'. There are indications, however, that electricity consumers, who at moment do not own meters would continue with the problem. Amadi disclosed, for instance, that though his commission was working hard to push the Discos to make meters available to consumers, there still remained a huge gap to fill. “Our expectation is that metering will increase, but let us be very careful. The metering gap in Nigeria is about 50 per cent and we don’t expect that gap to be

closed in a short while. What we expect to see is significant and consistent effort by the distribution companies to keep metering their customers. “Of course the gap can close quickly if increase in capacity results in increase in revenue, and the regulator will benchmark that increase in revenue. But we expect to see continuous and good effort by the Discos to meter their consumers and quickly close down the gap. But the gap will still be there for some time because it is a huge gap,” the NERC boss stated. Speaking on the method employed by the power distribution companies in arriving at the bills for customers in the estimation category, Amadi said NERC educated the companies on how to do that. “We worked them through the methodology and this is because some of them are new in the sector. By this methodology, before the

But we expect to see continuous and good effort by the Discos to meter their consumers and quickly close down the gap. But the gap will still be there for some time because it is a huge gap,” the NERC boss stated

Discos estimate your bill, they would have looked at the energy supply in that cluster.

and take, there will be some margin of error, but it will come close to some level of accuracy".

“They would have looked at the metered customers in that cluster and be able to have a much more accurate estimation. What is going on now in some cases is not estimation, it is just arbitrary way of tariff and we have expressed a very strong disapproval on that. Give

According to him also, “A consumer should also be able to benchmark his bill based on what his metered neighbour is receiving as tariff. So, if, for example, an average customer in your area pays N5,000 or N10,000 and your Disco is giving you N15,000 bill, that is a smoking gun.”

2014 July, SweetcrudeReports

Power

Off-grid rural electrification

IFC, EDF to provide electricity to 500,000 people

he International F i n a n c e Corporation, IFC, a member of the World Bank Group, and EDF, a major player in the power sector, have signed an agreement to cooperate in developing offgrid electrification solutions in emerging markets, with the ultimate goal of serving up to half a million people living in rural areas, mainly in sub-Saharan Africa. The agreement, according to a statement by the IFC, is focused primarily on sub-Saharan Africa, with a pilot project under development in Benin. The IFC said the first phase of this pilot is intended to provide electricity to 25 000 people, using hybrid solar-diesel networks and two biomass-fired power plants. The project, the IFC said, may be replicated in other parts of Benin, as well as other countries such as Mozambique, Tanzania and Myanmar. According to the IFC, in signing the agreement, EDF and IFC expect to combine their expertise in order to develop cutting edge, affordable and sustainable solutions for rural electrification. It maintained that the scope of cooperation between EDF and

IFC includes seeking sources of financing to support potential projects, sharing sector expertise between the two institutions, and where necessary, exploring sustainable co-investment opportunities, for example thorough the creation of a joint investment vehicle to finance eligible projects in the target countries. Bertrand Heysch de la Borde, Senior Manager for Infrastructure in Africa at IFC said, “Almost 1.3 billion people live without access to electricity in the world. Bringing power to these people is a major challenge that we must address. IFC is proud to partner with Groupe EDF, a global leader in energy and a valued partner for IFC in achieving this goal.” “IFC is particularly active in rural electrification through its Lighting Africa initiative, (providing off-grid lighting to almost seven million people); its investments in rural electrification in Senegal; and indirectly, through investments and financings in the power sector globally (about $2 billion in financing has been mobilized in the sub-Saharan Africa power sector over the past three fiscal years alone). Edouard Dahomé, EDF

Director for Africa and access to energy, said, “Electricity is a vital product without which no real development is possible. Access to energy for rural populations, who are more often the most disadvantaged ones, allows poverty reduction by developing income-generating activities, while also promoting education, health, access to water, among others. “The partnership between EDF and the IFC will reinforce and

further develop EDF’s engagement in this area which has been underway for more than 20 years.” The IFC said EDF has solid experience in rural electrification, primarily in Africa, adding that through the Access to Energy programme, EDC has delivered electricity to over 500,000 people in Mali, Morocco, Senegal, Botswana and South Africa.

It noted that EDF has developed an innovative model based on partnering systematically with a local partner and setting up Decentralized Services Companies. “EDF is thus providing lowincome households sustainable energy access solutions that are adapted to local constraints and needs, while integrating itself in the socio-economic fabric of the program’s target region,” the IFC noted.

Senate lauds Schneider over developmental initiatives

chneider Electric, the global specialist in energy management, has been commended by Nigeria’s National Assembly for its efforts towards developing sustainable manpower for the nation’s power sector. The endorsement came on the heels of a successful legislative tour of Schneider Electric’s Isaac Boro Energy Training College at Grenoble, France.

Manager and his House of Representatives counterpart, Hon. Warman Ogoriba, Others include Hon. Kingsley Kuku, Special Adviser to the Nigerian President on Niger Delta Affairs and Chairman of the Presidential Amnesty Programme as well as Marcel Hochet, President and CEO of Schneider Electric English West Africa.

The tour which was organised at the instance of Nigeria's National Assembly, pursuant to the legislature's oversight functions as enshrined in Nigeria's constitution, was aimed at exposing members of the National Assembly to the progress made by the Centre’s Nigerian students as well as the Centre’s world class facilities.

Speaking after the facility tour by members of the Joint Committee of the National Assembly on Niger Delta, Senator James Manager and his House of Representatives counterpart, Hon. Warman Ogoriba commended Schneider Electric on the state of the Centre’s facilities and quality of training received by its Nigerian students, describing it as a huge contribution towards fast tracking the development of Nigeria’s power sector.

In attendance were the Chairman, Senate Committee on Niger Delta, Senator James

2014 July, SweetcrudeReports

Power

Nigeria producing solar panels for renewable energy

Solar panels

h e F e d e r a l Government says it will support one of its parastatals, the National Agency for Science Engineering Infrastructure, NASENI, in the production of solar panels for renewable energy. NASENI is producing solar panels of high quality standard from its Karshi, Abuja solar factory, a demonstration plant, which started as part of the agency's research and development. Minister of Power, Prof. Chinedu Nebo, announced government's plan to support the agency when he inspected the NASENI solar panel manufacturing plant. Nebo said: "With the low level of electricity generation in the country which is mainly through gas fired turbines, the Federal Government is now focusing on solar to compliment it. We want to grow renewable energy resources utilisation and deployment in Nigeria. "With the low level of electricity generation and transmission in the country the only way to reach the rural communities is through renewable technology. This is one of the technologies that are far away from the national grid".

He said that with the launch of the Operation Light-up Rural Nigeria, OLRN, using renewable energy, it had become imperative to develop Nigerian solar manufacturing plants. The minister said the Federal Government was ready to patronise products from the agency, especially for the OLRN. "Patronising them will give them more encouragement to go into mass production and sales of the solar panels across the country. "Solar is the only thing you can deploy to every part of Nigeria and get electricity. We have challenges with wind because the onshore wind velocity is not quite amenable with wind turbines and only select part of the country will use that," he said. He stated that partnering with NASENI was part of government effort to ensure local content development in the power sector and the creation of jobs for Nigerian youths. "I will say this is a learning visit and step to forge a relationship with NASENI solar company. It is also to ensure that we even train most of the technical people that will be going out there to deploy this technology in our rural communities.

"That is why the Ministry of Power will like to collaborate with NASENI in the deployment of solar power technology in the country," he also said. The minister commended the professional and diligent methodology of quality control of the panels, but stressed the need for NASENI to improve on its marketing and to always comply with international standard. "We will be promoting NASENI; we will tell our partners that we prefer NASENI

solar panels because Mr President is so concerned when it comes to local content development. Once the solar panels continue to be of international and best standard why go outside. We will patronise NASENI no doubt about that," the minister said. Earlier, NASENI Executive Vice Chairman, Mr Mohammed Haruna, said the 7.5mw pilot plant was already producing high quality solar panels that could be found in the market.

"The solar factory as you have seen is a demonstration plant and it was started as part of our research and development and we want to prove that it can work in Nigeria. So, it is a 7.5mw pilot plant and it is producing solar panels of high quality standard and the products are available in the market," Haruna said. He explained that the project started in May 2012 and became a Limited Liability Company in 2013 after surmounting so many challenges.

Transcorp to spend $46m on Ughelli Power plant

orking together with its technical partner, General Electric, Nigerianowned conglomerate, Transcorp will be investing $46 million to raise short term capacity of its Ughelli power plant by 700 megawatts, mw. Transcorp, largely controlled by Mr. Tony Elumelu’s Heirs Holding, also has plans on the table to increase the plant's capacity by a further 1,000mw within the next few years. The Nigerian company has been in the investment groove since it completed a $300 million takeover of the Ughelli Power Plant in Delta State. Despite a successful privatisation process, which saw over 18 generation and distribution power assets move hands from government to private investors, Nigeria’s power output has seen marginal or no change. Output has lingered between 2,500 and

4,000mw – at its peak delivery – despite an installed capacity of 6000mw. Analysts largely attribute this stagnation to industry and asset neglect as well as under funding and corruption. Nigeria, Africa’s largest economy, is said to be losing billions of dollars in potential foreign investment as well as driving up operating costs for local businesses, and this is largely owing to insufficient energy provision. According to Power Minister, Prof. Chinedu Nebo, the country needs at least 20,000mw of energy to meet current local consumption requirement, a far cry from the current progress made so far. As part of efforts to grow generation, a Canadian power firm focused on solar energy projects, SkyPower, recently announced plans to invest around $5 billion in developing a 3,000 mega watts solar-powered electricity facility in Delta State.

Finance

2014 July, SweetcrudeReports

ConocoPhilips installation

ConocoPhilips' Assets Acquisition: Oando posts N6bn first quarter loss IKE AMOS

ando Energy Resources, OER's, not-tooimpressive financial performance over the last couple of months continued as the company posted a loss of $39.9 million, about N6.384 billion in its first quarter financial results released to international investors. The financial statement, released to the authorities and investors in the Toronto Stock Exchange, showed that the loss is a continuation of the $40.99 million loss, approximateley N6.56 billion, recorded in its fourth quarter financial performance. Analysts blame the loss on the company's planned acquisition of ConocoPhilips' upstream assets in Nigeria. After months of delay, the Nigerian government, through the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, had recently given Oando the approval to acquire the assets. Thereafter, the

company announced that the acquisition will be completed by July 31, 2014. The loss, analysts said, could also be attributed to the huge borrowing by the company, which apparently, was done to raise funds to finance the ConocoPhilips' assets acquisition. The first quarter financial results show that as at March 31, 2014, the company's borrowing stood at $354.3 million, which is approximately N56.7 billion. The results showed that the borrowing comprises convertible loans and acquisition loans of $233.3 million (approximately N37.328 billion) and operational loans of $121.0 million (N19.36 billion). Indded, the company explained that the loss, which was in spite of an improvement in its revenue to $32.2 million, was primarily as a result of financing expenses relating to the ConocoPhilips’ acquisition. Oando Energy also recorded $10.3 million in cash flow from operating activities in the first quarter of 2014, compared to cash outflow of $18.0 million

from the same period last year, while its cash and cash equivalents stood at $300.6 million. While commenting on the result, the Chief Executive Officer, OER, Mr. Pade

Durotoye, said the company's first quarter was highlighted by positive operational results that saw its year-on-year oil production appreciate by 22 per cent.

“This increase in quarterly production from the Ebendo Field was as a result of a higher production uptime experienced due to reduced shut-in’s on the Agip trunkline evacuation route,” Durotoye noted. The company explained that it is in the final stages of acquiring ConocoPhillips’ Nigerian upstream oil and gas business, adding that the acquisition is expected to position it as one of the leading exploration and production players in Nigeria, as measured by total reserves and production. According to the company, it believes that the ConocoPhilips acquisition represents a game changing opportunity for OER and its shareholders. It said, "The acquisition will add a 20 per cent working interest in the Nigeria Agip Oil Company Joint Venture (NAOC JV), which includes 41 discovered oil and gas fields with remaining oil and gas recovery, approximately 40 identified prospects and leads, 12 production stations. “Approximately 1,490 kilometres of crude oil, natural gas liquids and natural gas pipelines, three gas processing plants, the Brass River Oil Terminal". OER, listed on the Toronto Stock Exchange, has interests in 11 oil mining licenses and is the exploration and production subsidiary of Oando Plc. Following the reverse takeover of exile resources, Oando Plc, holds over 90 per cent stake in OER that is listed on the Toronto Stock Exchange.

Nigeria earns N2.3tr from crude export in 3 months ...Records crude production of 1.9m barrels IKE AMOS

i g e r i a n e a r n e d $14.29 billion (approximately N2.285 trillion), from the export of crude oil in three months, between January and March 2014, data obtained from the Central Bank of Nigeria, CBN, has revealed. Using an average crude oil benchmark price of $109.47 per barrel, CBN in its

economic report for first quarter 2014, estimated Nigeria's crude oil export at 1.45 million barrels per day or 130.5 million barrels for the period under review. This, according to the report, was an increase of 2.1 per cent from an average of 1.42 million barrels per day recorded in the fourth quarter of 2013. The CBN attributed the increase to successes recorded in efforts at curbing the rampant incidences of crude oil theft in the Niger Delta region.

The country also earned N709.28 billion ($4:43 billion) from local sales of crude produced in the country. According to the report, allocation of crude oil for domestic consumption was 0.45 million barrels per day or 40.5 million barrels in the first quarter. In addition, the CBN report indicated that Nigeria earned $ 1 8 . 7 1 9 b i l l i o n , approximately N2.995 trillion, for crude oil produced in the three months.

2014 July, SweetcrudeReports

Finance

Total Nigeria’s indebtedness rises to N16.6bn

Total Petrol Station IKE AMOS

otal Nigeria Plc has recorded significant increase in its indebtedness, as its total borrowings increased to N16.608 billion in its 2013 financial year. According to its annual reports and accounts for the 2013 financial year presented to the Nigerian Stock Exchange, NSE, its total borrowings rose by N1.729 billion or 11.62 per cent, compared to N14.879 billion recorded in the 2012 financial year. This was in spite of a slight improvement in its revenue and profit after tax in the period under review. The company’s revenue grew by 9.33 per cent to N238.16 billion, from N217.84 billion recorded in 2012. Its profit before tax stood at N8.12 billion, up from N7.1 billion recorded in 2012, while its profit after tax stood at N5.33 billion, appreciating by 14.19 per cent from N4.671 billion recorded in 2012. The company paid a total dividend of N3.735 billion to its shareholders, broken down into interim dividend of N2 per share and a final dividend of N9 per share. The company also paid a total dividend of N3.735

billion in 2012, representing interim dividend of N3 per share and final dividend N8 per share. As a result of its increased indebtedness, the company recorded total interest expenses of N1.98 billion, broken down into interest on bank overdrafts and loans N1.964 billion and interest on obligations under finance leases N17.11 million. In the report, the company lamented the late payment of subsidy by the Federal Government, attributing it to the huge financial expenses incurred by the company. Chairman, Total Nigeria

Plc, Mr. Momar Nguer said, “We are also suffering from huge financial expenses as a result of delays in the payment. On average it takes eight months for the government to pay us back the subsidies. In our balance sheet at the end of 2013, we were owed N12 billion. The financial expenses of that debt represent ten per cent of our net operating income. “We are also not getting fair share of allocation of petroleum products. Nigeria is a net importer of refined products as 80 per cent of the fuel is imported. Is it normal that with 12 per cent market

share with 500 stations, three first class storage facilities proven record of compliance, Total Nigeria only get about three percent of the import allocations?” He expressed concern over the unchanged marketing margins in the petroleum industry, saying that the marketing margin, which is generating the cash flows has not been reviewed since 2007. He said, “Margins should be reviewed regularly in order to take care of inflation and other cost of doing business in Nigeria. Frozen

margin for such a long time of seven years is not good for the industry.” Nguer called for transparency in the allocation of products as well as companies’ performance with regard to the actual importation. “Competition is good by nature. It is good for the consumers because it brings down costs as well as brings innovation. So it gives consumers choice to make” he added.

Nigeria may lose $1.5bn over Brass, OK LNG YEMIE ADEOYE

igeria has so far spent US$1.5 billion on the Brass and Olokola Liquefied Natural Gas, LNG, projects without any progress towards getting them off the ground. Latest indications are that the two projects located respectively in Brass, Bayelsa State and Olokola in Ogun State, may no longer have market opportunities for their products. Lack of progress on the projects has also hit

Nigeria’s desire to expand its market share in global gas supply. Prior to commencement of construction, the practice for all LNG projects is that contractual agreements with buyers are first secured so that supply could be sustained for a long term. But, if the expectations of the consumers or buyer are not met, they could switch to other suppliers. Of the $1.5 billion so far spent on the two projects, about $500 million was spent on Olokola and $1 billion on Brass, which have 5.5 million metric ton and 10 million metric ton annual

capacity, respectively. According to Victor Eremosele, a consultant who recently retired from the Nigeria LNG Limited, NLNG, the market windows available for these projects now would soon disappear because "by 2020, it is possible we would find a situation where significant funds have been spent by other countries on their gas projects and these countries would now become new sources of supply of gas to the market". Eromosele said another problem that would likely confront the gas from the

Nigerian plants if they ever take off, would be the increasing drop in the price of gas at the international market due to US progress with shale gas and competition from gas discoveries in other parts of the world. He stated that the price of gas at the international market has started dropping and this couple with major discoveries of gas across Africa and the world may sooner or later impact negatively on the revenue from Nigeria LNGs because of shrinking market.

2014 July, SweetcrudeReports

Finance

Solar panels

new report h a s revealed how donors, investors, technical experts and policy makers can improve support to enterprises providing access to clean energy in the developing world. Some 1.3 billion people live without electricity, while nearly 3 billion people cook on open fires or inefficient cookstoves, damaging health and keeping people trapped in poverty. The report is a joint venture by sustainable energy charity Ashden - which makes annual awards to carbon-cutting energy programmes and enterprises - and international development agency Christian Aid. It is based on in-depth interviews with leading providers of solar lights and improved cookstoves that use less fuel - and crucially minimise health-damaging pollution in the home - as well as makers of energysaving ceramic water filters providing rural families with safe drinking water. Those taking part included d.light, EcoZoom, and SELCO and support providers such as ERM

New report reveals finance gap for clean energy enterprises Foundation's Low Carbon Enterprise Fund and GVEP. The report, 'Lessons on Supporting Energy Access Enterprises', highlights the problems that such enterprises can face both in raising finance, and ensuring a regular cash flow until a market is established. With most clean energy enterprises needing finance, especially those at the small and medium end of the scale, key findings of the report include a need for working capital, with interviewees emphasising that long delays over financing place a huge strain on enterprises. It says finance that can be accessed quickly, with minimal conditions, such as lines of credit, should be more readily available, along with impartial advice on the financing options that exist and guidance on how to attract investors. Support for sales and marketing was also seen as crucial, as well as management support. Ashden Founder Director Sarah Butler-Sloss said:

'Increasing access to energy is the biggest challenge, and also the greatest opportunity for reducing poverty in the developing world. ' T h i s r e s e a r c h demonstrates the catalytic role the right kind of support can play in helping energy access enterprises thrive and grow - so they can transform people's lives and stimulate development.' 'We urge donors, investors, technical experts and policy makers to take note of the recommendations of the report, so that appropriate financial and technical support gets to the enterprises that badly need it.' C h r i s t i a n A i d international director Paul Valentin said: 'Energy provision in many developing countries is poor. New York State consumes as much energy as the 800 million in sub-Saharan Africa. 'People in rural areas are often most affected, even losing out when major electricity generation

With most clean energy enterprises needing finance, especially those at the small and medium end of the scale, key findings of the report include a need for working capital, with interviewees emphasising that long delays over financing place a huge strain on enterprises schemes are built as the power lines go straight to the nearest big city. 'Sustainable clean energy delivers immediate benefits. It minimises the air pollution caused by cooking with solid fuels such as wood, animal dung and crop waste which costs an estimated four million lives a year. Education improves as young people can study at night by electric light. And people's economic prospects improve as local industries

prosper. 'But finance is required. At present, commercial investors may be wary of doing business with clean energy enterprises, regarding them as high risk, while markets are undeveloped, with potential customers unaware that the products exist. Rural customers may also be expensive to reach, and have little purchasing power. But these problems are not insurmountable.'

2014 July, SweetcrudeReports

Finance

N15.55bn Dutch Growth Fund to help Nigeria fast-track growth

igeria is a m o n g countries that would draw from the Netherlands’ N15.55 billion (about 700 million Euro) Growth Fund planned for launch this month. The Netherlands Minister of Foreign Trade and Development Co-operation, Ms. Lilianne Ploumen, who disclosed this during a recent visit to Nigeria, said the Fund would help to fasttrack inclusive economic

Aganga

Within the next three to four years, we will be investing 700million euros into the fund, which is open for all sectors of the Nigerian economy

growth in the country, especially in critical sectors of the economy. According to her, the decision to include Nigeria as one of the benefitting countries was based on Nigeria’s huge economic potentials as the biggest economy in Africa. “The Dutch Fund will promote the Joint Venture and investment of Dutch companies with their Nigerian counterparts. Nigeria has been included as one of the countries that will benefit from the Fund because we see

great investment and growth opportunities in Nigeria. “Within the next three to four years, we will be investing 700million euros into the fund, which is open for all sectors of the Nigerian economy. The objective is for us to enhance inclusive economic growth in Nigeria," Ploumen stated. The Netherlands minister was in Nigeria at the head of a delegation of over 20 Dutch businessmen to tie win-win trade and investment

relationships. The Dutch Growth Fund will enable Nigerian entrepreneurs and SMEs to form Joint Ventures with their Dutch counterparts, expand their businesses and also invest in critical and thriving sectors. Speaking during the Nigeria-Netherlands Business Forum in Lagos, Minister of Industry, Trade and Investment, Mr. Olusegun Aganga, said the inclusion of Nigeria as beneficiary of the Fund followed a discussions

between him and the Dutch Minister on the issue during his visit to that country. He said: “Netherlands is one of Nigeria’s largest trading partners. Within the last five years, the value of trade between Nigeria and Netherlands has grown from about $2.5billion to about $10billion. “In addition to the fact that there are so many Dutch companies operating and doing well in Nigeria, there is Ghana Stock Exchange also the E700m Dutch Growth Fund, which the Government of Netherlands is planning to establish which will be accessed by Nigerians in partnership with Dutch entrepreneurs who can bring in their knowhow and innovation. This will make Joint Ventures easier between the two countries.” He commended the Dutch government, saying: When I went to the Netherlands about two years ago when the Fund was about to be created, I appealed to the Netherlands Minister of Foreign Trade and Development Co-operation, Hon. Ms. Lilianne Ploumen, that Nigeria should be included as one of the countries that will benefit from the Fund. “She promised that she would visit Nigeria and give us an update on the Fund. I am delighted that she has fulfilled her promise of visiting Nigeria but the good news is that she has confirmed that Nigeria is among the countries that will benefit from the Fund.”

Nigeria rules out cutting GDP outlook over insurgency

he Nigerian government has disclosed that it will not lower the country's economic growth forecast for this year even amid security concerns raised by the wave of Islamist militant attacks that have left hundreds dead. “We are sticking to 6.75 percent. We have taken into account already whatever disruptions there might be,” Ngozi Okonjo-Iweala, Minister for Finance and

Coordination Minister for the Economy, said in an interview in the Rwandan capital, Kigali, after the African Development Bank meeting. About 90 people were killed in explosions in the capital, Abuja, on April 14 and May 1 claimed by Boko Haram, the Islamist group that also kidnapped more than 200 schoolgirls about two months ago. Further attacks in various locations over time, which no group has claimed

responsibility for, have killed at least 155 people. The government’s growth projection is lower than the 7.2 percent forecast by the International Monetary Fund, while Moody’s Investors Service “just told us they upgraded their projection to eight per cent,” Okonjo-Iweala said. Nigeria sees other sources of growth in the economy, such as housing, that “we think are going to make up for any losses,” OkonjoIweala said. The Nigeria

Mortgage Refinance Corporation may start a program next month that is scheduled to finance construction of 75,000 homes a year. Investors think the Nigerian economy is resilient, Okonjo-Iweala said, adding that during her visit to Kigali she met with 25 investors, mostly from the US and UK, who were i n q u i r i n g a b o u t opportunities in Africa’s biggest economy.

Labour

2014 July, SweetcrudeReports

Gas pipeline

ELUONYE KONYEGWUAEHI

rganised labour in the N i g e r i a n petroleum industry has raised alarm over dwindling investment in the gas sector three years after Nigeria unveiled the Gas Revolution Master Plan, lamenting that failure of government to meet its obligations has resulted in massive withdrawal of investments by foreign partners. Oil workers under the aegis of the Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, say the enthusiasm that followed the launch is gradually fading away as investment in this sector has dipped to an all-time low. Speaking at its recent 4th triennial National Delegates Conference, immediate-past president of the association, Comrade Babatunde Ogun, claimed the Nigerian Liquefied Natural Gas, NLNG, project has been unable to get its Train Seven off stream or had the muchtalked about Brass Liquefied Natural Gas, BLNG, made any headway. He said: “Just before the general elections of 2011, the

PENGASSAN raises alarm over IOCs' withdrawal of investment …Decries Govt's inaction on PIB present government in Nigeria unveiled the Gas Revolution Master Plan, a move aimed at optimising Nigeria's gas resource potential and to bring gas revenue earnings at level with that of crude oil. As social partners in the sector, we were thrilled by the massive impact this will have on the Nigerian economy if given proper implementation. "As a labour union, we looked forward to the huge job opportunities that this would provide. And confident too, that the gas project would bring to an end gas flaring in Nigeri“Four years on, investment in this sector has dipped to an all-time low as the Nigerian Liquefied Natural Gas cannot get its Train Seven off stream or has the much-talked about Brass Liquefied Natural Gas been

brought to production. Failure of the industry to meet its obligations has resulted in massive withdrawal of investments by foreign partners. PENGASSAN appreciates the efforts of the current regime in improving power supply and stability in the country. "The power sector reforms which has seen government sell off her shares in PHCN to private distribution companies has not yielded the desired promises. Suffice it to say that there has been no significant improvement in power generation and distribution". He added: “All the distribution and generating companies have not shown enough readiness to invest in improving electricity

supply in the country. Instead the dubious regime of billing customers for electricity not consumed continues. Besides, government must ensure that these electricity companies provide light as agreed or have their licenses revoked. This nation can never have any meaningful development without power. Nigerians are getting impatient with excuses; please give us efficient and regular power to drive the economy.” “We have been following with keen interest the transformation in the oil and gas sector promised by the present government in Nigeria since its inception in 2011. But, what we have seen so far does not show that government has the

political will to implement reforms in this sector. A lot of in consistencies in policy and insincerity have beclouded good intentions. Our various engagements with the government have ended up with promises made and promises broken.” Speaking on Petroleum Industry Bill, PIB, Ogun said: “PIB is one reform that is envisaged to improve the oil and gas sector. Our Association has been vociferous on the petroleum sector reforms through our participation in the 22-man Committee of the OGIC (Oil and Gas Implementation Committee), whose recommendations formed a substantial part of the executive bill christened 'Petroleum Industry Bill'.

2014 July, SweetcrudeReports

Labour

Labour accuses BPE of mismanaging funds from PHCN sale ELUONYE KONYEGWUAEHI

lectricity workers under the umbrella of the Senior S t a f f Association of Electricity and Allied Companies, SSAEAC, are accusing the leadership of the Bureau of Public Enterprises, BPE, of having mismanaged funds realised from the privatisation of the assets of the defunct Power Holding Company of Nigeria, PHCN. They claimed the mismanagement of the proceeds was largely responsible for delay in the payment of outstanding liabilities of disengaged members of PHCN. SSAEAC insisted government must investigate the management of BPE for it to account for the proceeds of the PHCN privatisation. President of the association, Mr. Bede Opara, made the disclosure in reaction to BPE’s claim that over 45,300 ex-workers of PHCN had been paid their entitlements. According to him, Director General of BPE, Mr. Benjamin Dikki’s statement “fell short of expectation of a top government officer who should know the need for restraint in commenting on sensitive matters such as unpaid/delayed benefits of laid off staff. The DG is a w a r e t h a t t h e subcommittee in charge of processing the benefits of staff had been starved of funds delayed by his office thereby slowing the work down, and should not have pre-empted the outcome of the work he frustrated its

early conclusion”. He noted that in its last meeting of May 6, 2014, the subcommittee reviewed progress of the assignment and confirmed that 43,342 staff of PHCN were paid their severance benefits out of the 46,308 that were verified. The subcommittee also confirmed that 2,966 staff were yet to be paid their outstanding severance package while 1,605 staff were awaiting verification thereby putting the projected number

of PHCN staff at 47,913. On the payment of pension component to workers, O p a r a s a i d t h e subcommittee had confirmed that 43,228 had been paid while 3,080 represented the number of staff with outstanding pension payment. According to him, the summary of the payment of pension component, further showed that 3,233 verified retired and relatives of dead staff were yet to receive

their benefits and that there are still unverified 1,605 staff and 913 retirees/dead staff next of kins who have waited for upwards of 10 years to be paid their pension benefits. The SSAEAC president said “the above facts provide a background to expose the mischief of the BPE DG in the interview under reference when he left cases of verified and unpaid beneficiaries to dwell on cases of on-going

verifications, which he termed as ghost worker cases prematurely". He lamented what he describes as "the posture of the DG in diverting attention from himself as DG, BPE who failed to conclude this payment matter, starting with withholding of funds to blackmail and campaign of calumny, without engaging the stakeholders, before rushing to the press.” According to him, the BPE DG had evaded meetings with the unions since his appointment and this might be because of his flawed handling of the PHCN transaction. “The DG, BPE dwelt on 2% deduction as if it is his lost money. He even incited worker against their leaders in desperation to achieve yet another personal gain from unfulfilled expectation of benefitting from the same money.

Defunct PHCN office

New investors in power sector, milking consumers, says NUPENG

he National Electricity Regulatory Commission, NERC, has abandoned its regulatory roles while the new investors in the nation's power sector are milking electricity consumers with crazy bills without supplying electricity, according to the Nigeria Union of Petroleum and Natural Gas Workers, NUPENG. The union, in a

statement by its president, Mr. Igwe Achese, lamented that the epileptic power supply nationwide amid crazy bill by the power distribution companies, DISCOs, called for urgent overhaul of the entire system. According to him, “The Nigerian electricity consumers are being shortchanged, cheated and embarrassed with fraudulent bills when there is no electricity. These fraudulent bills are putting more

hardships, especially on the downtrodden masses, who cannot even afford three square meals a day and now have to cough out monies for electricity they don’t get. We note that the exploitative attitude of the new DISCOs is injustice, oppressive, uncalled for and not in tune with the energy reforms of the transformation agenda of Mr. President, Dr. Goodluck Jonathan. Achese maintained that the union was disturbed

that with the huge monies budgeted and expended on power generation and distribution, there was still "nothing to write home about, except perpetual darkness in many communities in the nooks and crannies of the country, only to be faced with huge bills". "NUPENG therefore calls on the National Electricity Regulatory Commission to be alive to its responsibilities by ensuring that the new

electricity distribution companies give our citizens light 24 hours of the day and also ensure that prepaid meters are installed to check arbitrary estimated bills. “It is a shame that the National Electricity Regulatory Commission is concerned with only increase in tariffs," he said.

2014 July, SweetcrudeReports

Labour

Ogun

Indigenous oil firms are slave drivers —Ogun ELUONYE KONYEGWUAEHI

mmediate-past president of the Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, Comrade Babatunde Ogun, has accused indigenous oil companies of engaging in the worst form of unfair labour practices. Ogun, who spoke in Lagos, lamented that the local investors violated Collective Bargaining Agreement, CBA, suppressed unionism and inflicted unfair policies on workers. He said: “Hardly could you find any Nigerian companies where unions operate. What they do is suppress unions and oppress the workers. As I am talking to you, in most Nigerian entities, there are no unions. It is only multinationals that will sit down and engage labour in bargain to resolve contentious issues. Virtually all the banks we have are owned by Nigerians and you can hardly see any effective unionism in the banks. They practise contract staffing to suppress unionism and that is the challenge we have in the industry.” Condemning moves by

government to sell the four public refineries and labelling the Bureau of Public Enterprise, BPE, and government’s pattern of divestments and privatisation as dysfunctional, Ogun said: “What we are saying is, if government must sell the refineries let them sell 40 per cent to states, and 30 per cent to Nigerians. Government must have a stake, and the refineries must be working".

"Government should not give refineries subvention again. Let them go to the Stock Exchange and raise money to run the e s t a b l i s h m e n t s . Government’s money in the entities should be converted to shares and let private investors buy stakes and run them. They will refine and sell to government and the public at government subsidised rates. At the end

of the year, they will declare profits and government will get its share of the profit. “But government must not sell the refineries overnight thinking it is the best. How many enterprises have they sold? Are any of those enterprises that they sold working well? The best option before government is to co-opt private investors who will run the refineries and give them enabling support to raise the muchneeded funds from the capital market to turn around the fortunes of the refineries. We are watching closely all the subterranean attempts by the BPE to go ahead with the sale of these refineries in spite of our engagement and agreement with the government,” he added. Speaking on industrial relations in the oil and gas sector, he said his union had brought intellectual debate and confidence to bear in handling industrial relations both at the branches and in government and that, "that is why you hardly talk of PENGASSAN going on industrial strike throughout this period". He said: "What we normally do is to write and give enough notice and sit down to engage them. Most times, we get what we want; that being the case, there is no need embarking on strike. So, we have been able to change the business of industrial relations to what it is supposed to be. It is logic, superior argument, and that has won it all for us. Today, we have the confidence of both government and our employers. There is serious relationship between branches and their management, and government. It does not mean that they do not quarrel, but when they do, we intervene and find ways

Labour seeks better welfare for Port Harcourt Disco workers MKPOIKANA UDOMA

rganised labour has picketed the Port Harcourt Electricity Distribution Company, PHED, over noncompliance with an agreement reached on staff welfare. Chairman of the Amalgamated Union of Public Corporations, Civil Service, Technical and Recreational Employee

Union in Rivers State, Mr. Henry Jumbo, who spoke with SweetCrudeReports in Port Harcourt, said labour would continue picketing the company until a resolution is reached between them and the company's management on the implementation of the agreement. According to him, “We want an opportunity to dialogue with the management of PHED over

the agreement we had earlier reached with them, for them to help reach the Federal Government on how they will handle the issue of staff welfare in the state”. Mr. Jumbo lamented the increase in the issue of casual staff in the power sector, describing it as a form of underemployment which employers of labour had cashed in, in a bid to exploit desperate job seekers. Decrying the non-payment

of resolving it. And that brings greater confidence. “Now we are talking with government to adopt our proposal that any company seeking to get government contract or working in the oil and gas industry must come with a CBA (Collective Bargaining Agreement) as a condition for getting government contracts or operating in the industry. We expect that government should endorse it, stamp their feet on the ground on this issue. NUPENG, NNPC, others should join the effort of making this message clear to oil companies that they cannot get government contracts unless they have a CBA. "Every organisation should adopt it - NNPC, NUPENG, PENGASSAN, others - in making it clear to companies operating in the country that for them to commit for any job in oil and gas industry, they must have a CBA. If they do, then we will know that everybody working in the oil and gas industry is well protected.” On expectations from his successor, Ogun said he expected the new president to “continue good industrial relations and robust engage of people and organisations, adding that "there should be serious oversight function of companies and agencies and there should be serious contacts with Nigeria Immigration Service and the Ministry of Labour over the Nigerian content law to ensure that expatriate quota is being reduced regularly to meet our desired quota'. Serious training for members should be sustained. We need to work on the kind of leaders we are going to produce in the organisation so that the high standard and morals we have e s t a b l i s h e d i n NUPENGASSAN will be sustained,” he added.

of gratuity for retired workers in the power company, he said, “You know, up till now some staffs are yet to be paid their full pay-off and there is a lot of casualization going on in the Power Ministry and all those that are enshrined in the agreement which Power Holding Company of Nigeria, PHCN, is yet to fulfill. The protest started yesterday and we are intending to stay for as long as when we will have the opportunity to dialogue with the management of PHED” he said.

2014 July, SweetcrudeReports

Labour

Court awards N76m against UBA over employee’s sack proof that the letter of acceptance of resignation was dated 30th March, 2010 as against the applicant ’s letter of resignation dated 31st March, 2010. Consequently, the Court held that the claimant was entitled to three months notice or three months salaries in lieu of notice. [It thus awarded N1,120,221.60 to Mr. Modilim as damages for wrongful termination, saying the N75,535,128.00 is the total sum Modilim ought to have been paid as his emolument as General Manager for the 20 months he worked for the UBA after his confirmation. Justice Kanyip equally held that Modilim was never confirmed as General Manager on the 5th of August, 2008 via the confirmation letter of 27th August, 2008 and declared that “the confirmation letter of 27th August, 2008, although silent as to the position for which the claimant was confirmed, the fact that the claimant was employed as a Deputy General Manager clearly supports the inference that his employment as Deputy

–General Manager was confirmed”. The Defendant’s failure to confirm the appointment of the claimant as a General Manager was a breach of his contract of employment contained in the offer letter and letter of commitment both dated 23rd November, 2007”. He further said: “…The Claimant’s agreement with the Defendant is regulated by the Claimant’s letter of employment, letter of commitment both dated 23rd November, 2007; the Performance Contract and the Defendant’s staff handbook. The Court held that these documents taken together contain the terms of the Claimant’s employment. That the Confirmation letter issued to the Claimant clearly shows that the Claimant had met all the conditions outlined in the Performance Contract and that the Claimant has an expectant interest in the Defendant honouring his part of the contract. On this basis, the Court awarded the sum of N75, 535,128.00 as claimed by the Claimant in his relief...”

Pensioners raise alarm over pension package for Amaechi, deputy MKPOIKANA UDOMA

UBA Corporate Head office, Lagos

h e a p e x industrial court in Nigeria, the N a t i o n a l Industrial Court, NIC, has slammed over N76 million damages against the United Bank for Africa, UBA, for wrongful termination of appointment of one its staffers, Mr. Patrick Modilim. The Lagos Division of NIC in a ruling by Justice B.B Kanyip also ordered the bank to pay the said amount

within 30 days from the date of the judgment, or risk postjudgment interest of 10 percent to run on the judgment sum. The applicant in the suit filed by his counsel, Dr. Charles Mekwunye, against UBA, had claimed that his e m p l o y m e n t w a s constructively terminated after 20 months of service. NIC in its ruling, insisted that there was evidence that Modilim might not have resigned his employment as at

the time he did but was forced to do so by the Executive Director (Human Resources) of the bank, Mr. Kenedy Uzoka. According to the court, this evidence was also corroborated by the second claimant’s witness who testified that he was there at the meeting between the applicant and Uzoka, when the Executive Director asked Modilim to resign. Justice Kanyip equally held that there was also

ensioners in Rivers State have decried the Rivers State Governor and Deputy Governor Pension Law which provides 100 percent basic salaries for governors and deputy governors with choice houses in Port Harcourt and Abuja, amongst others, after their tenure in office. The Rivers State Chairman of the Nigerian Union of Pensioners, Mr. Festus Abibo, in an i n t e r v i e w w i t h SweetCrudeReports, said it was time for Rivers people to refuse that law, adding that Governor Amaechi awarded himself a life pension but refuse to pay pensioners in the state their entitlement after 35yearss of their labour. Mr. Abibo described members of the Rivers State House of Assembly as

“stooges”. “The implication of what they have done is that any governor can come and reintroduce pension to the State House of assembly and the lawmakers will rubber stamp and approve it, and they will earn more than any other predecessor. The lawmakers are responsible for it because the lawmakers are there to protect the interest of citizens of the state,” he said. The lawmakers are also looking for means to approve pension for themselves when they are already on a special fabulous salaries. The chairman of the Nigerian Union of Pensioners, Rivers State Chapter, Mr. Festus Abibo also said the free medical system in Rivers State is a failure.

Solid Mineral

2014 July, SweetcrudeReports

Mining equipment

Nigeria to acquire mining equipment, expertise from S/Africa OSCARLINE ONWUEMENYI

igeria is to acquire both expertise and equipment from South Africa in the area of gold mining under a new collaboration being explored by the two countries. The move is aimed at developing gold mining in the country and improving the capacity of artisanal and small-scale miners towards achieving increased productivity. The partnership with South Africa is part of the overall collaborative ventures being sought by the Nigerian government from mining countries to effectively exploit the mineral resources that abound in the country.

Minister of Mines and Steel Development, Arc. Musa Mohammed Sada, who stated this in Abuja, explained that Nigeria was committed to

improving the capacity of artisanal and small-scale miners towards increasing their productivity. South Africa is the largest gold miner on the continent and the sixth largest miner

of the mineral globally; Nigeria, on the hand, is reported to have gold deposits in relatively commercial quantity, but is not buoyant in mining gold and majority of gold mining that takes place in the country are carried out by artisans. According to the minister, “Our focus is on gold because we have a lot of artisanal and small-scale miners.

“We realised that we are wasting a lot of resources and not getting as much as we should from mining. So, we need to improve on our mining technology and commodity pricing”. Most of the Nigeria’s gold deposits are found in the northern states. Nigeria recently surpassed South Africa as the continent’s biggest economy after a recent economy rebasing. Gold mining presently constitutes less than one percent to the country’s GDP, and government has stressed it's commitment to develop the sector to enable it contribute more to the economy in the face of declining revenue from crude production.

S’Africa: Export taxes could destroy jobs in mining sector

lans by the South African government to introduce taxes on key mining exports like platinum group metals, PGM, and iron ore could have a further destabilising effect on the industry, and will cost more jobs. Shadow Minister for Trade and Industry, Geordin HillLewis, expressed these fears as he challenged the government to clarify whether an impact assessment has

been done to determine what impact export taxes would have on jobs and economic growth in South Africa. "Government's constant policy shifts have left the industry feeling uncertain, which undermines further i n v e s t m e n t a n d compromises the job creation imperative," the shadow minister said. He maintained that the planned policy only add to

the policy uncertainty and undermine investor confidence in the sector, stressing that the government needed to provide clarity on the matter urgently. According to him, "The fact is that South Africa has a large trade deficit, and that if we are to grow our economy and create more jobs, we need to encourage the expansion of exports. "An export tax does precisely the opposite. By making it more expensive to

export South African raw materials, an export tax would lead to less exports, a bigger trade deficit, and ultimately a decline in mining production. This, in turn, means less jobs". Hill-Lewis also pointed out that if the purpose of the export tax was to raise government revenue, it would be counterproductive. "If the intention is to force local beneficiation, then this is a poor way of going about it. Beneficiation should after all create jobs and expand exports, not shrink exports and destroy jobs," he argued.

2014 July, SweetcrudeReports

Solid Mineral

Rivers sets up task force on regulation of scrap metals MKPOIKANA UDOMA

he new task f o r c e inaugurated by the Rivers State government to remove scrap metals from the streets of Port Harcourt and waterways in the state has given operators of scrap metals an ultimatum to register and comply with the relevant authority or face prosecution. Chairman of the task force, Mr. Solomon Chuku, who gave the directive during the visit to some scrap metal dump sites in Port Harcourt, said the display of scrap metals dumpsite was not only endangering the lives of residents in the state but also defaced Port Harcourt. According to Mr. Chuku, “Since we have a metal recycling plant in Rivers State, we want to feed it from the scraps that we get around. So, if we allow all the scraps out without controlling it, in no time we will begin to buy scraps form other states which is not necessary while the companies and industries here produce enough scrap to feed the plant. Basically, while we encourage them, we want them to do it in a decent way, we did not say don’t sell scrap metals, but be licensed and in control”. The chairman also said the task force was also removing abandoned vehicles off the streets of Port Harcourt.

Six coal blocs available to investors, says Minister

Scrap metals

8-member committee to regulate illegal mining in Ghana

n eight-member committee has been raised to streamline and regulate the activities of illegal mining in Ghana's Ashanti Region. Ashanti Regional Minister, Dr. Samuel Sarpong, inaugurated the committee chaired incoming Deputy Ashanti Regional Minister, Joseph Yammin. The committee is expected to conduct periodic inspections on all small scale mining sites, in order to take pre-emptive actions needed to stop illegal mining in the region. According to a press statement from the Regional Coordinating Council, RCC, the committee has also been mandated to scrutinise

mining licenses and any relevant documents on mining concessions, to ascertain the rules of engagement agreed upon by the authorities and small scale firms. The minister, in outlining the scope of operations for the committee, said the committee has no fixed time line, and is mandated to confiscate equipment and vehicles used in illegal mining activities. The committee can also arrest and prosecute illegal miners to serve as a deterrent to potential illegal miners. Sarpong called on all small scale miners in the region to present their licenses to the committee for inspection, and further action as he urged the

committee to live up to expectation, and warned that anyone found to be collaborating with the illegal miners would not be spared. He called on all stakeholders, including civil society, to support the fight against the Galamsey activities, in order to help protect and preserve the river bodies and farmlands in the region. Membership of the committee comprises the Ashanti Regional Police Commander, DCOP Kofi Boakye, Commander of 4BN, Major CT Broni, and representatives from the Minerals Commission and Environmental Protection Agency, with the Chief Director at the Ashanti Regional Coordinating Council, Mr. Kofi Dwomoh Asubonteng, as secretary.

inister of Mines and Steel Development, Mr Musa Sada, says six of the nation's 15 coal blocs were still available to investors. Musa said there were 15 coal blocs in the country out of which nine were allotted to private investors while six were reserved for the coal-topower programme. “The coal blocs are actually those belonging to the Nigeria Coal Corporation. In the last attempt to privatise them, three of them were successfully bought. The remaining 12 are still available out of which six were taken out and dedicated to the coal-topower programme and their development will be supervised by the Ministry of Power," the minister said. S p e a k i n g o n government's plan for idle coal bloc licenses in the country, he said the licenses acquired by nonperforming investors would soon be revoked in view of the nonperformance by the license holders. “We are not going to sit back just because they have been successfully acquired. If you do not operate it, we will still call you for discussion and if you are not ready, you will relinquish it for people that are ready”, the minister said.

Freight

2014 July, SweetcrudeReports

Maritime stakeholders disagree over waiver clause in Cabotage Act

KUNLE KALEJAYE

A cargo ship

he waiver clause in the 2003 Cabotage Act governing the operations of coastal and inland shipping in Nigeria maritime sector is generating mixed reactions a m o n g m a r i t i m e stakeholders. The inclusion of the clause, according to some stakeholders, gave undue advantage to foreign ship owners over indigenous operators, which clearly is against the aim of the Cabotage Act. Others argued that the inclusion of the clause became necessary because indigenous ship operators do not have the operational capacity ?compared to their foreign counterparts. Still, some lamented that waivers are granted to foreign firms without due considerations for Nigerians with capacity, as guaranteed by the Cabotage law. Nigerian ship owners also are of the opinion th?at the inclusion of the waiver clause is a factor militating against the implementation of the Cabotage Act, stressing that it has become the norm rather than the exception. Some members of Nigerian Chamber of Shipping called for the outright removal of

the waiver clause? in the Cabotage law as they noted that foreign firmsâ&#x20AC;&#x2122; impact in Nigerian maritime sector is insignificant. In a recent stakeholders interactive workshop on the Coast and Inland Shipping operations in Nigerian organised by the Nigerian Maritime Administration and

Who is going to engage the services of the thousands of seafarers trained internationally by NIMASA? We cannot continue to have vessels that are manned by Filipinos and other foreigners Safety Agency, NIMASA, in Lagos, some stakeholders suggested that rather than expunged the waiver clause, an agency should be set up that will enforce knowledge

transfers from foreign ship operators to Nigerian operators. Mrs. Ify Anozonwu Akerele, Director General, Nigeria Chamber of Shipping ?who was at the interactive forum said the waiver clause should be expunged from the Cabotage Act as she maintained that foreign ship owners were only doing business in Nigeria coast water without engaging Nigerian seafarers. She argued that many Nigerians have been trained overseas as seafarers by NIMASA but the inclusion of the waiver clause in the Cabotage Act has made it difficult for these seafarers to be gainfully employed in ships owned by foreigners. The Director General also noted that International Oil Companies, IOCs, have left shallow water production to more challenging oil fields offshore with sophisticated vessels own by foreigners without the presence of Nigeria seafarers. "I am very passionate about Nigeria maritime sector and it is my wish that the waiver clause in the Cabotage Act is expunged because we cannot continue to have vessels operating in

our coastal water being manned by foreigners when we have thousands of seafarers with international exposure. "Now the IOCs are leaving marginal fields to more challenging oil fields offshore with high grade vessels owned by foreigners. "Who is going to engage the services of the thousands of seafarers trained internationally by NIMASA? We cannot continue to have vessels that are manned by Filipinos and other foreigners," she said. Meanwhile, some stakeholders at the sensitisation and consultative forum suggested that the Cabotage Act should be suspended for a while because it has failed to enhance the participation of indigenous operators in coastal shipping. They argued that presently, foreigners still dominated the industry, accounting for over 80 per cent while more indigenous shipping companies were folding up in an industry where foreigners are thronging. The maritime watch dog, NIMASA, on its part admitted that the Cabotage law since inception has not

achieved its desired goals. Director General of NIMASA, Mr. Ziakede Patrick Akpobolokemi, however, said the act affords investors ?the opportunity for government to come in and assist them rather than investors presenting their entire problem to government. Akpobolokemi, who was represented by Mr. Callistus Chukwudi Ibe, said the Cabotage act is the finest la?w Nigeria has ever made as it presented investment opportunities that will lead to creation of jobs, wealth and a sustainable economic. He stressed that government was determined to enforce the law for that which it had been created, adding that "the opportunities are there, they are indeed real." It could be recalled that ?the Cabotage law, known as the Coastal and Inland Shipping Act, was passed into law in 2003, to among others, restrict trade along Nigeriaâ&#x20AC;&#x2122;s coastal waters to indigenous operators. Under the Act, foreigners are only to participate in coastal shipping when there is no Nigerian who has capacity for such jobs.

2014 July, SweetcrudeReports

Freight

Ibaka Seaport will benefit Nigeria —Gov Akpabio

Ibaka seaport

o v e r n o r G o d s w i l l Akpabio of Akwa Ibom State says the Ibaka Deep Seaport in the state will not only benefit the state but the entire nation. “For me, port development is not an affair for one year, it is something that we as a nation must resolve to actualise. “Developing Ibaka deep sea port is not something that is beneficial to one state alone, rather the entire nation will benefit from there,’’ he told journalists in Abuja. The governor, who stated that 9,400 hectares of land has already been acquired for the construction of the proposed seaport, said the Minister of Transport, Idris Umar, has assured the state t h a t t h e f i n a l documentations for the development of the port were ready. “Ibaka Deep Seaport project is not dead and we have identified two major harbours that can take the deep seaport. “Once it is presented to the Federal Executive Council and the next approval is given for the next stage, I believe we will now go into getting investors to show interest," he said. Still on the importance of

Governor Akpabio the planned seaport, he said: “We know very well that the port congestion that is happening in Lagos is not good for the Nigerian economy. “It is just like having international airports that are always clustered, you can never have a good air

The governor, however, noted that the economic advantage of the Ibaka seaport when developed were numerous, adding that it would ease congestion and improve the nation’s economy

transport, just the same way that we are not having good sea transport’’. Akpabio said that a lot of sea faring vessels were not coming to Nigeria at present due to the huge demurrage they were paying. H e e x p r e s s e d

dissatisfaction over the delay in clearing containers, saying that some stayed too long on the sea, and the products they carried got expired before they were cleared. The governor, however, noted that the economic advantage of the Ibaka

seaport when developed were numerous, adding that it would ease congestion and improve the nation’s economy. He said it would also create more than 20,000 jobs for the country’s largely unemployed population, among others.

Nigerian National Shipping Line back in six months

lans are afoot for the return of the staterun Nigerian National Shipping Line, NNSL, which was liquidated years back. The Federal Government will partner with private sector players to make this happen. President Goodluck Jonathan has already directed the Nigerian Maritime Administration and Safety Agency, NIMASA, to bring the agency back to life before the end of his tenure in office. According to Director General of NIMASA, Mr. Patrick Akpobolokemi, the government involving the

private sector in the plan for the re-birth of the agency is aimed at avoiding the mistakes that led to the death of the once-thriving organisation. The NIMASA director general stated: ”When the NNSL got liquidated, it was because it was managed by government, so, in the next six months, working with the private sector, we want our shipping line back” ”When this comes on board, it solves the challenge of securing seatime for cadets, right now we are investing so much in seatime training, but perhaps we may just spend little of this money if we train them locally in

addition to wealth creation, it is even a source of capital flight, it is uncalled for, it is a very big setback. “Therefore we are determined by the grace of God that in the next six months, we want to make sure this national carrier comes back and Mr. President has also told us to work on this national carrier issue to come to stay in his regime”. Urging Nigerian shippers to put pressure on his agency over the plan, Akpobolokemi said this was necessary because of his determination not to disappoint Nigerians.

38 Motoring Toyota tops Consumers Reports’ 2014 car-brand perception survey 2014 July, SweetcrudeReports

oyota, Ford, Honda, and Chevrolet continue to top the rankings in Consumer Reports’ annual Car-Brand Perception Survey, standing out as the leading brands in consumers’ minds. These perennial leaders have a significant advantage in overall score, but several other brands—including Tesla—are moving up the rankings. These scores reflect how consumers perceive each brand in seven categories: quality, safety, performance, value, fuel economy, design/style, and technology/innovation. Combining those factors gives us the total brandperception score. While the scores reflect a brand’s image, they do not reflect the actual qualities of any brand’s vehicles. The key word here is “perception,” as influenced by word-ofmouth, marketing, and hands-on experience. For 2014, Toyota has a 25point advantage over secondplace Ford, reflecting a fivepoint gain over the previous year for Toyota and a threepoint improvement for Ford. It could be interpreted that the safety concerns that saw the Toyota score stumble a few years ago have faded, returning the brand to its position as the perceived industry leader. Honda lost 16 points this year, while Chevrolet seemed to find them, increasing its score by 13 points. The brand to watch is Tesla Motors, which jumped from 47 points last year, to fifth position and 88 points this year. That the remainder of the Top 10 all score 73 or higher is notable; last year there was a wider points spread among the high-ranking brands.

Overall brand perception Brand Toyota Ford Honda Chevrolet Tesla Motors Subaru Mercedes-Benz Volvo Cadillac BMW

Best Score 145 120 109 105 88 87 82 80 78 73

Brand Land Rover Maserati Jaguar Rolls-Royce Scion Ram Mini Mitsubishi Infiniti Jeep

Worst Score 4 8 9 11 17 17 21 21 22 23

How the scores were calculated

he Consumer Reports National Research Center conducted a random, nationwide telephone survey from Dec. 6 to 15, 2013, and collected survey data from 1,578 adults in households that had at least one car. Overall brand perception is an index calculated as the total number of times that a particular make was mentioned as exemplar across seven categories, weighted by category importance, and divided by the total unaided awareness of the brand. (Interview subjects were asked what brands exemplified the traits, instead of being read a list of brands.) That approach compensates for awareness level, ensuring

Bottom line

that every brand has an equal chance of leading a category, not just the best-selling or most well-known brands. Category scores reflect the number of times that the particular make was mentioned as a leader for the particular attribute, again corrected for awareness.

Important factors in buying a new car This list ranks the seven key factors by how important they are to consumers when buying a new car. The percentage is based on the number of respondents who said the factor was among their top three priorities. For comparison, we’ve included last year’s figures.

Factor

2014

Quality 90 Safety 88 Performance 83 Value 82 Fuel economy 81 Design/style 70 Technology/innovation68

2013 90 88 82 83 81 65 65

Automakers continue to vie for consumer mindshare and dollars by developing compelling new models engineered to drive sales and profits. As a smart shopper, the key is to look beyond the hype to the virtues that matter most to you and ensure you’re buying a product that truly excels based on real-world tests, rather than merely perceptions or empty marketing slogans.

Motoring

2014 July, SweetcrudeReports

10 safety checks to make before buying a car

ou need to consider several factors when evaluating a vehicle’s overall safety. They range from how it performs in an emergency-handling situation and how it protects its occupants in a collision to how easy it is to secure a child seat. When comparing vehicles, it’s important to look at all the appropriate variables, including safety-related ratings and features. Below, we list 10 safety checks that are worth reviewing before you make your final buying decision.

1. Insurance-industry crash-test ratings The Insurance Institute for Highway Safety (IIHS) is a safety-research group that conducts its own series of crash tests. In its frontal-offset crash, the IIHS runs a vehicle at 40 mph into a deformable barrier. Instead of engaging the whole width of the car’s front end, the barrier covers just the 40 percent of the car in front of the driver. Using a deformable barrier simulates a car-to-car, driver’s-side-todriver’s-side collision, which is a common form of fatal crash. By focusing the crash on only a portion of the car’s front, this test severely stresses the car’s structural integrity and its ability to protect the area around the driver without collapsing. The IIHS scores its frontal-crash results as Good, Acceptable, Marginal, or Poor. You can find ratings for all tested vehicles on the IIHS website.

2. Government crash-test ratings

The National Highway Traffic Safety Administration (NHTSA) conducts two types of crash tests: full frontal and side impact. Each is scored on a fivestar scale, with fewer stars indicating a greater likelihood of serious injury. You can check the scores for all crash-tested vehicles online at www.safercar.gov. Both the NHTSA and IIHS frontal crash-test results are comparable only to vehicles within the same weight class as the tested car. If vehicle weights are very dissimilar, the results could be very different.

3. Electronic stability control (ESC)

Electronic stability control (ESC) is designed to keep the vehicle under control and on its intended path during cornering, and prevent it from sliding or skidding. If a vehicle begins to go out of control, the system selectively applies brakes to one or more wheels and cuts engine power to keep the vehicle on course. On SUVs, stability control can help prevent a rollover. The IIHS estimates that 10,000 lives per year would be saved if all cars had ESC. NHTSA required ESC as standard from the 2012 model year.

4. Rollover resistance

Taller vehicles such as SUVs and pickups have a high center of gravity, which makes them more likely to roll over than passenger cars. (According to the IIHS, SUVs have a rollover rate that is two to three times higher.) We believe that vehicles that tip up in NHTSA’s test have a potential stability problem and CR will not recommend them, regardless of their star rating. In order for an SUV or pickup to be recommended, it must either have been included in NHTSA’s test and have not tipped up or, if it has not been tested, it must offer electronic stability control.

5. Antilock brake system (ABS)

CR’s auto experts highly recommend getting an antilock brake system (ABS), which is available as standard or optional equipment on nearly all vehicles. ABS prevents the wheels from locking up during a hard stop, something that can cause the driver to lose control of the vehicle. ABS almost always provides shorter stops, but, even more importantly, the system helps keep the vehicle straight and allows the driver to maneuver during a panic stop.

6. Accident avoidance

A vehicle’s ability to help you avoid an accident is just as important as its crashworthiness. Key factors to consider are braking and emergency handling, although acceleration, visibility, driving position, and even seat comfort (which affects driver fatigue) also play a role. Consumer Reports evaluates these factors on every vehicle it tests.

CONTINUES ON PAGE 40

Motoring

2014 July, SweetcrudeReports

10 safety checks to make before buying a car CONTINUED FROM PAGE 39

7. Air bags

By law, every new passenger vehicle comes equipped with dual front air bags. But the sophistication of the systems can vary. Most upscale vehicles and many others now have some version of a “smart” air-bag system, which gauges several variables to tailor the deployment of the vehicle’s front and side air bags. Side air bags are now common for front occupants, and Consumer Reports highly recommends head-protection side air bags where they’re available.

8. Safety-belt features

Three-point lap-and-shoulder belts provide the most protection in a crash, and most vehicles now have them in all seating positions. A few, however, still have only a lap belt in the center-rear position, which allows the upper part of the body to move forward in a crash or panic stop. The comfort of the belts is also important, because some people won’t wear them if they’re uncomfortable. Many vehicles also include safety-belt pretensioners and force-limiters. Pretensioners automatically take up the slack in the seat belt during a frontal crash, while force-limiters relax the safety-belt tension following the initial impact to prevent chest and internal injuries caused by the belt itself.

9. Head restraints

Head restraints are vital for guarding against the whiplash neck injuries that often accompany a rear-end collision. Restraints need to be tall enough to cushion the head above the top of the spine. Many cars’ head restraints adjust for height. Look for those that lock in the raised position—a legal requirement for cars made since September, 2009. Those that do not can be forced down in a crash, losing effectiveness. Many cars’ rear restraints are too low to do much good, which Consumer Reports notes in its road test reports. The IIHS website provides head-restraint or rear-crash ratings for many models.

10. Child safety

Child-safety seats save lives and should be used until a child is big enough to use the vehicle’s regular safety belt. Often, incompatibilities between the car’s seat and the child seat make a good, tight fit difficult and sometimes impossible to achieve. For some years all new vehicles had a universal system called LATCH (Lower Anchors and Tethers for Children) that made the attachment easier and more secure. But the system doesn’t work equally well in all vehicles. The key is to try out a new car seat in your existing vehicle, or try out your existing car seat in a new vehicle before you buy either.

Power-window switches:

Children have accidentally activated a power window while leaning out and have been killed or injured by the window closing on them. The easiest types to inadvertently trigger are horizontal rocker and toggle switches on the door’s armrest, which raise the window when pushed down or to the side. Lever-type switches, which are flush with the surrounding trim and only raise the window when pulled up, are a safer design.

Car baby seat from 1962

Technology

2014 July, SweetcrudeReports

Gas reinjection plant

Gas reinjection technology improves DAVID BETTI

ince 1995, new technological f e a t u r e s introduced into very-highpressure gas reinjection compressors have simplified auxiliary systems, reduced operating costs and improved rotor dynamic behavior. Natural gas reinjection is used to maintain wellhead pressure with the gas obtained during extraction of crude oil, allowing the production of crude to be kept practically constant. The pressure required is

normally more than 3,000 psi and up to 10,000 psia. The compressors are barrel-type, but train compositions vary greatly. Typically the driver is a gas turbine, although the number of electric motordriven reinjection trains has increased in recent years. Nuovo Pignone has been involved since the early 1970s in the natural gas reinjection business with centrifugal compressors. The first highpressure machine was a backto-back compressor rated for a 6,100-psi discharge installed in Algeria. In 1975 a train for a North Sea platform was successfully full-load tested up to 10,000 psi.1

More recently, five reinjection trains designed for a discharge of 9,100 psi were installed in Venezuela2, and in May the first of three trains for a Kazakhstan plant was tested up to 9,300 psi. GE Nuovo Pignone has delivered more than 240 trains for reinjection service with a discharge pressure higher than 5,000 psi. From 1970 to 1995, the technology of compressors did not change significantly. Since then, many technological features have been introduced, including dry gas seals, alternative impellers-to-shafts design

assembly, spark-eroded impellers, honeycomb seals and an improved capacity to control rotating stalls.

Dry gas seals Dry gas seals have been used on Nuovo Pignone centrifugal compressors for lowand medium-pressure application since 1988. They eliminated some problems associated with oil seals, leading to: â&#x20AC;˘ simplification of the system through elimination of the overhead tank, oil pumps, traps and gas separators; â&#x20AC;˘ reduction of mechanical losses within the compressor and energy consumption due to pumps; and

â&#x20AC;˘ elimination of oil transfer in the compressed gas. Particularly with highpressure applications, the cost of a seal oil system has a dramatic impact on the total cost of the train. Moreover, oil pumps rated for 3,500 to 5,000 psi can create reliability problems. The gas from the formation normally contains a percentage of hydrogen sulfide, which can contaminate the oil flowing through the high-pressure rings and the oil contained in the overhead tank. This can cause the failure of oil rings and the bearings' antifriction materials and lead to the need for a seal oil CONTINUES ON PAGE 42

2014 July, SweetcrudeReports

Technology

Gas reinjection technology improves CONTINUED FROM PAGE 41

separate from the lube oil, further increasing the system's complexity. Furthermore, the contaminated oil needs to be reconditioned or eliminated, which can impact cost and safety. The application of dry gas seals eliminates these issues. But introduction of dry gas seals also presented engineers with another challenge: the machine's lateral stability. In terms of rotor dynamics, the selection of dry gas seals strongly affects the compressor's behavior. Oil seals, if suitably designed, can provide extra support and stiffening for the shaft. Therefore, the introduction of dry gas seals removes a significant contribution to system stability. Since the dry gas seal system also normally increases the compressor's bearing span, the rotor dynamic design is more critical compared with the design of a compressor equipped with oil seals. Alternative impellersto-shafts design GE Nuovo Pignone reinjection compressors are equipped with standardtested 2D impellers. For a given diameter, the impeller's geometry is fixed for different applications. Each impeller is separated from the others by a spacer shaped to create the needed aerodynamic path at the impeller entrance. To increase the shaft's stiffness, and therefore its insensitivity to external disturbances, the spacers have been eliminated and the hub diameter modified. Two rings - the front one in two pieces, the rear in one piece - maintain the axial position. A lining of hard material protects the shaft. These features ensure the aerodynamic path doesn't change. This configuration is particularly effective in increasing the stiffness of the shaft, but a different technology is required to produce the impellers. T r a d i t i o n a l l y low-flowcoefficient, 2D impellers are slot-welded from the rear of the hub (blades are machined on the shroud) due to the presence of the shroud nose, which is the same diameter as the blade leading edge. Increasing the hub diameter and therefore the seal diameter of the slot welding from the exterior becomes difficult. Different alternatives have been considered, and spark

erosion has been selected. Spark-eroded impellers Starting from a monolithic center-drilled steel disk, impellers for high-pressure reinjection are manufactured by spark-erosion using numerical control machines. The process tool and the impeller have opposite polarity electrodes. The mean is normally oil or a specific fluid with high resistivity. Beginning at the disk's external diameter, different electrodes are used to manufacture the impeller's blades and cavities. These have the same shape as the vane. The machining starts with a roughing erosion, followed by a finishing phase using a specific tool to create an accurate geometry. In addition to the possibility of increasing the hub diameter, the main advantages of sparkerosion are: • n o s t r u c t u r a l discontinuities;

Sour gas reinjection

Natural gas reinjection

• high structural strength; • high dimensional accuracy; and • fine surface quality. These points are particularly important for high-pressure reinjection machines. Due to the high pressure and density involved, pressure pulsation originated by the asymmetry of aerodynamic field, particularly in the discharge scroll, can cause significant periodic forces.3 The absence of any metallurgical discontinuity within the impeller is clearly a step forward. In terms of dimensional accuracy, the compressors under discussion are normally characterized by a low flow coefficient. From a geometrical point of view, this is translated into narrow aerodynamic passages, sometimes on the order of 0.3 to 0.4in. The distortion associated with

slot welding can cause modification of the blade width of 5% and higher for these low-flow impellers. With spark erosion, the accuracy is 1% to 2%, allowing a more accurate matching between the expected and tested performances. Honeycomb seals Research on the influence of honeycomb seals on rotor dynamics is in progress, and the analytical instruments are continuously updated. Nevertheless, the experience of different compressor manufacturers has revealed the honeycomb seals' capability to improve the stability of turbomachines. Test results show honeycomb seals develop larger destabilizing forces than labyrinth seals, but they also develop higher direct stiffness and direct damping values.4 Honeycomb seals on the

balancing drum and the interstage bush of back-toback machines is a standard feature for Nuovo Pignone high-pressure reinjection compressors. Rotating stall control Diffuser rotating stall is associated with low-flowcoefficient compressors and typical of high-pressure reinjection machines. Consequences of diffuser rotating stall are pressure pulsation and low frequency vibrations (10% to 30% of the synchronous frequency), which may limit the operating envelope. Theoretical analysis as well a s e x p e r i m e n t a l investigation on real machines has allowed GE Nuovo Pignone to optimize the diffuser inlet where the rotating stall takes place. A rapid pinch increases the gas velocity at the diffuser inlet, facilitating gas flow toward the outlet without reverse flow. The first high-pressure centrifugal compressor incorporating the above features was full-load-tested in March 1996 and continues to run on a North Sea platform. With a back-toback configuration, it is equipped with tandem dry gas seals designed for 2,400 psi dynamic and 3,000 psi static. During the test the compressor delivered at 7,500 psi. Since 1996, 19 compressors equipped with tandem and triple dry-gas seals with discharge higher than 5,800 psi and up to 9,300 psi have been full-load-tested and put in operation. They have demonstrated excellent stability and an increasing degree of reliability.

2014 July, SweetcrudeReports

Community

2014 July, SweetcrudeReports

Despite our resources, we are marginalised —Kula People Kula women in a canoe MKPOIKANA UDOMA

ula, an oceanic community in Akuku Toru L o c a l Government in Rivers State, is reportedly host to over 200 oil wells, producing more than 150,000 barrels of crude oil and 5,000,000 cubic feet of gas per day. Unfortunately, the story of Kula appears to be that of the proverbial goose that lays the golden eggs but suffers from abject neglect and marginalisation. There is hardly any visible state or federal project in the oceanic town. It is a clear fact that despite the huge oil and gas resources, the government, both federal and state, are only interested in its mineral resources, but not on the huge human resources and its infrastructural development need. Indeed, with the better part of Kula land taken over by oil and gas pipelines, life has become a constant

nightmare for the people due to bad roads, lack of drainage system, oil spills and gas flaring arising from the activities of oil producing companies. Narrating the predicament o f h i s p e o p l e t o SweetCrudeReports in Port Harcourt recently, Chief Anabs Sara-Igbe, a Niger Delta activist, who was Chief Security and Revenue Adviser to former Rivers State Governor Peter Odili, said: ‘‘Kula is a major oil producing community in Rivers State. It is not just one community. Kula has over 50 towns, villages and settlements made up of several communities, but seen as one. It plays host to Shell and Chevron. Kula is even the biggest host of Chevron in the entire Rivers State, but nothing to show (for it)". “Chevron has gas flow stations in Minima, Ekulama 1, Ekulama 2, Offoinama and Robertkiri. We have a lot of oil and gas activities in Kula, yet nothing to show, instead we are being marginalised," he stressed.

Sara-Igbe continued: “When you talk of oil spillage or gas flaring or erosion in the Niger Delta, Kula is the centre. If you see the high level of oil spills, gas flares and degradation in terms of mangrove, sea, forest, land pollution you will be shocked. Some communities in Rivers State have been crying of environmental degradation, but, I tell you Kula's case is the worst. "The international oil companies have totally eroded our traditional occupation of fishing and farming. We are totally disadvantaged by oil and gas production, and despite all these hazards that we suffered, nothing to show for it, absolutely nothing”. He lamented the bad state of the only road that leads to the town while expressing disappointments over the failure of government to put it in order. Sara-Igbe also decried the absence of representation for Kula in government, which would have pushed the Federal

Government to remember the plight of the people. According to him, “All the Federal projects that are suppose to come to Kula, we don’t know what happened

Kula is a major oil producing community in Rivers State. It is not just one community. Kula has over 50 towns, villages and settlements made up of several communities , but seen as one

to them. Even the state road and the NDDC road that have been awarded, we have not seen anything, it is unfortunate. You know what it means for a road to be in the Federal budget? A project may be in the federal budget and state budget, but backing and pushing the budget is another thing altogether because there is no representation of us in the government, We don’t have representative power to push things for us. The project have been budgeted and appropriated for, but no implementation. What can we do when there is no representation”. Also, he complained about the upland/riverine political dichotomy, saying: “If you look at the 2014 Rivers State budget, it is lopsided. There is no meaningful project for the oceanic and riverine coastal communities, all the projects are going to the upland areas despite the huge resources from the riverine areas and that is one of the problems we are having today.

2014 July, SweetcrudeReports

Community

Water pollution

Shell demands access to commence clean up in Ogoniland KUNLE KALEJAYE

The report also identified some emergency measures requiring immediate action particularly relating to the provision of portable water to impacted communities

hell Petroleum Development C o m p a n y Limited, SPDC, ?has requested access to oil spill sites in Ogoniland in order to commence a comprehensive clean up exercise in the area. To make this happen, SPDC said the cooperation of communities in granting safe access has been and still remains a key factor in making progress in the clean up and remediation of impacted areas. SPDC said it has already taken action on the United Nations Environment Programme, UNEP, report as directed specifically to it on oil pollution in Ogoniland. Speaking to newsmen recently in Lagos, SPDC Country Chair Mutiu Sunmonu said all of the 15 sites identified in the report have been remediated and certified by regulators where further remediation was required. He pointed out that there has been instances of recontamination from pipeline sabotage and oil theft in the region but that SPDC has completed an inventory and physical verification of assets in Ogoniland for

decommissioning purposes. To speed up the cleaning exercise in Ogoniland, Sunmonu said the Federal Government of Nigeria has a

key role to play. He explained that the Federal Government Hydrocarbon Pollution Restoration Project,

HYPREP, was set up in July 2012 with a mandate to implement UNEP's recommendation but noted that HYPREP has faced challenges in becoming operational on ground. It could be recalled that sequel to SPDC withdrawer from Ogoniland in 1993 due to rise in violence, threats to staff and contractors and attack on facilities, UNEP published its Environmental Assessment of Ogoniland in August 4, 2011. The report which is a study of oil pollution in the Ogoniland region of Rivers State in the eastern Niger Delta was commissioned by the Federal Government as part of a wider Ogoni

reconciliation process?. The UNEP report highlighted significant environmental impacts from oil pollution in parts of Ogoniland relating to a variety of historic sources and ongoing crude oil theft illegal refraining activity. The report also identified some emergency measures requiring immediate action particularly relating to the provision of portable water to impacted communities. It called on government, industry and communities to take action to put an end to all forms of ongoing oil contamination including crude oil theft and illegal refining and to begin a comprehensive clean up of the region.

JTF to set up unit in Andoni to combat pipeline vandalism MKPOIKANA UDOMA

he Caretaker Committee on Administration of Andoni Local Government Area in Rivers State and the people of Oyorokoto in the local government have agreed for a unit of the Joint Military Task Force, JTF, to be sited in the community to check the menace of pipeline vandalism,

illegal refineries, cultism and other related crimes in the area. A statement by the Director of Press and Public Affairs of Andoni Local Government Area, Mr. Tony Maxwell, said the decision was taken at the meeting between the caretaker committee chairman, Mr. Sampson Egop and the people of Oyorokoto oceanic community.

The Caretaker Committee Chairman of Andoni Local Government, Mr. Sampson Egop, has meanwhile, warned the residents against harbouring illegal oil bunkerers and criminals in their community. In the same vein, the Caretaker Chairman in Emuoha Local Government Area, Mr. Godstime Orlukwu, has constituted a 15-member Council of Elders

in the area. He said the elders forum will advised the council on communal issues, security, peace as well as provide enabling environment for all parties in the governance of the local government area. According to a statement signed by his chief press secretary, the Council of Elders has Chief Billy Alikwa as chairman and Chief John Iliiba as secretary.

2014 July, SweetcrudeReports

Community

Oyigbo, Eleme at loggerheads over oil wells

Oil well MKPOIKANA UDOMA

ndigenes of Oyigbo Local Government Area and the neighbouring Eleme Local Government Area, both in Rivers State, are contesting the rightful ownership of Komkom, an oil-rich community. Komkom, a village with more than 10 oil wells, is among the communities the Shell Petroleum Development Company of Nigeria, SPDC, had signed a Global Memoranda of Understanding, GMoU, with, for the implementation of its Afam Gas and Power Integrated Project. The paramount ruler of Oyigbo, Chief Samuel Azo, had claimed his community's ownership of the village, saying Komkom "has since time immemorial belonged to the Afam people of Oyigbo local government". He said Oyigbo was prepared to go all out in a battle to retain ownership of "one of her villages". Meanwhile, the President General of O’Ela’Bor, the apex Eleme General Assembly, Mr. Jonah Chujor, described the claims by the paramount ruler as provocative and capable of

causing disunity between the Eleme and Oyigbo people. “I think it is important for the elders in Oyigbo and in Eleme local government to have a proper understanding, and call one Chief Samuel Azo to order and make him desist from making provocative and defamatory media utterances. “We (Eleme) are in possession of documents which includes a map drawn by the colonial administrators showing that Eleme land actually terminated on the Imo River. That is the intelligence report written by Mr. J. T. McKenzie, the assistant district officer that was in charge of Ahoada

We (Eleme) are in possession of documents which includes a map drawn by the colonial administrators showing that Eleme land actually terminated on the Imo River. That is the intelligence report written by Mr. J. T. McKenzie, the assistant district officer that was in charge of Ahoada division

division” Chujor said. That document, according to him, shows that Komkom is in Eleme territory. It should be recalled that during the colonial era, Obigbo, now Oyigbo, and Komkom village, which are now in Rivers State, were integral parts of Asa Council, with headquarters at Obehie-Asa in Ukwa Division, now in Abia State. The two were in Ukwa Division until 1976 when Gen. Olusegun Obasanjo-led military government set up the Justice Mamman Nasir Boundary Adjustment Commission, which relocated them to Rivers State.

Shell partners FRSC, Rivers Govt on Child Road Safety Project

he Shell Petroleum Development Company, SPDC, has l a u n c h e d a n enlightenment campaign to create awareness on the safety of pupils while crossing the roads in Rivers State. Managing Director of

SPDC and Country Chairman of Shell Companies in Nigeria, SCIN, Mr. Mutiu Sunmonu, at the launched of the campaign, said the initiative is aimed at making roads safer and reduced casualty on roads in Rivers State. Sunmuno, represented at the event by the SPDC Manager for Safety and

Environment, Dr. Amadi Amadi, called on teachers and parents to educate their children and wards on safety measures on the roads. In his words, “Our child road safety support scheme has included; road safety training for school teaches, supervising government agencies for children, provision of road safety

textbooks for schools, physical road safety signs installations around school areas, enlightenment campaigns, annual road safety competitions for secondary schools and other supplementary projects”.

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2014 July, SweetcrudeReports

Tullow to compensate 6,000 locals in Kenya’s Kisumu County

E-mail: johniyene@yahoo.com

ALISON-MADUEKE and the PETROLEUM MINISTRY:

From commonwealth to personal fief

Tullow Oil facility

bout 6,000 families affected by an oil (seismic) survey in Kenya’s Kisumu county will be compensated, Tullow Oil Company has said. Stakeholder engagement management officer Rosie Birungi said families whose crops were destroyed during the survey will be fully compensated. Speaking at a media briefing in Kisumu town, she said the compensation will start by the end of this month and concluded by the end of July. Birungi said those affected will be paid depending on their crops. The most affected areas are Nyakach, Muhoroni and Nyando constituencies where the company carried out an extensive survey. Some of the crops damaged include sugarcane, maize, sorghum and vegetables. Birungi said the company is conducting damage assessment to ensure nobody is left out in the compensation. The said it will compensate landowners in cases of acquisition or loss

of land, an issue that had been of concern to most elders. MPs Aduma Owuor (Nyakach), James Koyoo (Muhoroni), Fred Outa (Nyando) said residents and leaders must be properly engaged to avoid conflicts. Tullow social investment manager Ben Miranga said the company has allocated Sh5 million for bursaries and Sh15 million for community water projects. He said last year more than 200 children in Kisumu, Kericho, Homa Bay and parts of Nandi counties benefited from Sh3 milliion bursaries. Miranga said four out of 25 students from Nyanza region have benefited from the Tullow group scholarship scheme to undertake oil and gas courses. “Out of the 24 scholarship awarded in 2012 and 2013, four of the students were from Kisumu and other neighbouring counties,” he said. Mirangi said other students were also selected across the country especially in areas Tullow is undertaking exploration.

The company plans to expand oil exploration to Western Kenya following a successful completion of a survey commissioned two years ago. Birungi said the success rates of the exploration are still unknown as the seismic analysis and exploration drilling would be completed in a few months. She added that detailed surveys on the prospect would still continue in various phases in the three constituencies before actual works begin. Birungi said the exploration could take up to 10 years before actual production starts thus calling for patience among the residents. The works on in Nyanza site, under block 12B, were started in February 2012 to add to the Ngamia wells in Turkana among others in parts of Rift valley.

he appointment of Naomi Campbell, forgive me, Diezani Alison-Madueke, to the top job at the Petroleum Ministry was a controversial story and the first indication the Nigerian public had that this president is not a man that would worry about the sensitivities of his people. In the economic politics of Nigeria, at least four major groups present themselves as stakeholders of the oil and gas wells that dot the Niger Delta region: the Northern states that produce no oil but desire to mutate into several more states because of the incongruous arrangement in a federal state of sharing revenue accruing from one region on a monthly basis; the federal government that legislated the resources into its ownership and supervises the sharing; the industry that operates the resources and the states (and communities) that actually produce the resources. Although Ms. Campbell could trace her pedigree to at least two of these groups, her nomination by the president was rejected by all four groups and indeed anyone who had an interest in the continuity of the system. She was fortunate in many respects. Her critics were blackmailed into silence by feminist groups who successfully dragged the issue into the realm of sexual discrimination. She was given a free hand to operate as a substantive minister without a junior minister where her predecessor, Odein Ajumogobia, SAN was only a minister for state with full time supervision from the Rock. By the time she settled into office the production fields had been calmed into tranquillity for her by Umaru Yar ‘Adua’s amnesty programme. Also, the downstream sector had found some rhythm, stability and predictability. She entered upon her duties with unhelpful attitudes such as lateness to meetings, absenteeism, lack of a team spirit and acted as though she had been in the pith of production activities at Shell where she got her “experience” of the industry. Anyone who dared to remind her that public relations and production were two very different kettles of brew got into her bad books. The Petroleum Industry Bill, the promised piece of revolutionary legislation to reorder the ills of the Oil and Gas

Industry and assuage the suffering of oil and gas producing communities, was finally submitted by the Petroleum Ministry to the National Assembly. Before it was submitted however, the Petroleum Minister set up a task force that included men like Senator Tunde Ogbeha, Senator Udo Udoma, Prince Chibudom Nwuche and PENGASSAN’S Peter Esele among others to do a review of the Bill. The task force sat, poring over provisions and making recommendations. Little did they know that their efforts accounted for nothing. Some of them now swear that the document they reviewed is by far different from the copy that was submitted to the National Assembly. The Minister’s PIB, from promising to unite the divergent aspirations of stakeholders into an acceptable position for all, now portends to tear the country apart. The IOCs are drawing up new strategies for divesting of their stakes in Nigeria as they are worried that the fiscal provisions in the PIB would make Nigeria’s investment environment the most expensive in the world. The SPDC has decided to postpone a $30 Billion investment in Nigeria because of the Bill. Industry watchers agree that if the PIB passes legislation as it is, it would convert Nigeria’s Oil and Gas Industry, from the Commonwealth of Nigeria to the personal fief of the Petroleum Minister because of provisions that grant her office more powers than the presidency. The current Minister’s appreciation of history is so little that she has tailored the Bill to serve the ends of an office she thinks she will occupy forever. Last week, Shell complained that they are losing sixty (60) thousand barrels of crude daily to pipeline vandals and crude oil thieves. Their investigations, they claim, revealed that illegal crude refineries are building large tank farms to store stolen products. We see this as the direct consequence of a mishandled amnesty programme and the failure of the Petroleum Ministry to invest in modern technologies that detect and prevent pipelines vandalism and other acts of sabotage and theft. As there is no reason to hope that the Presidency would wake up to its responsibilities by redeploying Ms. Campbell to the Culture Ministry or demanding her resignation, it is now left to Nigerians to march her under the forceful will of twenty (20) thousand or more feet in and around Nigeria’s own Tahir Square, out of the office of the Honourable Minister for Petroleum Resources.

2014 July, SweetcrudeReports