Stolen Nigerian crude trades at $68.84 per barrel

Afam power plant gets buyer for $260m P/22

Egina project: Samsung tosses Nigerian content P/8 Act over-board

SweetCrude A Review Of The Nigerian Energy Industry August, 2013

VOL 01 N0. 06

www.sweetcrudereports.com

UPDATES

MONTHLY BASKET PRICE AUG-13 JUL-13 JUN-13 MAY-13 APR-13 MAR-13 FEB-13 JAN-13 DEC-12 NOV-12

105.68 104.45 101.03 100.65 101.05 106.44 112.75 109.28 106.55 106.86

OCT-12 SEP-12 AUG-12

108.36 110.67 109.52

Daily | Weekly | Monthly | Yearly

104.47 US

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Stolen Nigerian crude trades at $68.84 per barrel

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*540,000 barrels go missing daily *Presidency, Labour trade blame *Russians, Chinese accused of hot-tapping *Shell JV worst hit *Nigeria could lose $12bn yearly

100 98 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13

DPR goes after illegal gas marketers

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he Department of Petroleum Resources, DPR, says it will sanction those engaged in illegal distribution of Liquefied Petroleum Gas, LPG, more popularly known as cooking gas.

It said unlicensed distributors would be severely punished. DPR’s Operations Controller, Lagos Zonal Office, DPR, Mr. Olugbenga Kuku, stated this, as he lamented that many marketers stored and sold LPG without valid licences, a development, he said, was contrary to the law.

Speaking at the annual meeting of the DPR and LPG operators/stakeholders

CONTINUES ON PAGE 15

P/15

NNPC mulls FLNG option to exploit offshore gas

Contents

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2013 August, SweetcrudeReports

Editor’s note

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Mr. Deji Haastrup, GM, Public Affairs of Chevron receiving Sweetcrudereports' Editor-in-Chief, Hector Igbikiowubo in Lagos.

he rate of crude oil theft currently is such that should alarm every well-meaning Nigerian. On a daily basis, the nation is losing a whopping 540,000 barrels of crude oil, this is happening right under the nose of security agencies and before a government that appears helpless in tackling and arresting the problem.

It is sad that the stolen crude is being traded freely on the West African coast at give-away prices. For just $68.84, a willing buyer could procure a barrel of the Nigerian premium crude, the Bonny Light, at a time international market prices are well above $100 per barrels.

This surely indicates clearly the magnitude of loss the nation's economy is incurring from the activities of bandits that have chosen to continue to rape the nation and its God-given resource.

Bearing in mind the magnitude of this menace, we have chosen to bring this national problem into clearer perspective. And that is exactly what we have done with our investigative report which serves as cover for this edition. It is the result of a painstaking investigation traversing the nation's oil terminals onshore and offshore the Niger Delta, into Benin Republic.

From yet another investigative effort, we could report authoritatively that Samsung Heavy Industries, SHI, has tossed the provisions of the Nigerian Content Act over-board in the building of the Floating Production Storage and Offloading vessel for the $15 billion Egina oil project scheduled to deliver first oil in 2017.

The Korean firm is pleading concerns over likely cost overrun and time delay, but this is yet another chapter in the shady arrangement that threw up the firm as the preferred bidder for the project.

With our oil theft and Samsung stories, it will not be totally wrong to describe this edition of your SweetcrudeReports as an explosive one.

We also serve you, as usual, incisive stories in our regular sections – focus, gas, power, financing, freight, labour, solid mineral, community, motoring and technology.

You may have been seeing an insert of SweetcrudeReports in The Guardian Newspapers every fortnight Wednesday, this partnership between Nigeria's foremost energy publication and the country's newspaper flagship was informed by the need to whet your appetite and serve your interest. For the next outing in the Guardian, keep a date with us on Wednesday 14 August 2013. Indeed, what could be better!

COVER 4 Stolen Nigerian crude trades at $68.84 per barrel 6 OIL NNPC faults Shell on divestment, $750m loss 13 FOCUS 15 GAS NNPC mulls FLNG option to exploit offshore gas 20 POWER Siemens hosts forum to boost electricity infrastructure Shale opens up new vistas for the oil and gas industry—SPE Chairman

in Nigeria

26 29 32 34 39 41 44

FINANCE

Western Union launches mobile money service in Nigeria

LABOUR

Fresh industrial unrest looms in Power Sector

SOLID MINERAL

Govt to tap enormous coal resources for power

FREIGHT Dock workers raise alarm over tank farms in Lagos

MOTORING

The 13 safest cars for 2013

TECHNOLOGY Seismic Surveys

COMMUNITY

Shell under threat over sale of assets

SweetCrude REPORTS

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

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

Design/Layout Frontline Concept

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

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

2013 August, SweetcrudeReports

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Cover Story

2013 August, SweetcrudeReports

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Stolen Nigerian crude trades at $68.84 per barrel An oil tanker

HECTOR IGBIKIOWUBO

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IGERIA’S Bonny Light, stolen and traded openly on the West Coast, fetches upward of $68.84 per barrel, investigations have revealed.

SweetcrudeReports went undercover, posing as a prospective buyer and was offered 70,000 metric tons (about 522,900 barrels) of Bonny Light at $36 million (about N5.76 billion) or $68.84 per barrel.

The seller offered to deliver the cargo to us offshore Cotonou, Benin Republic, and will accept either a bank guarantee or a letter of credit as payment.

The seller, who disclosed he was acting on behalf of a cartel, assured that they could deliver same volume on

a monthly basis.

Investigation revealed that although Dr. Ngozi Okonjo Iweala, Nigeria’s minister of finance, claims the country loses over 400,000 barrels of crude oil per day to theft; the figure is actually 540,000 per day.

Presidency, Labour trade blame Ranking personnel of the Nigerian National Petroleum Corporation, NNPC, alleged that the volume involved cannot be lifted without the active connivance of top government officials, from the Presidency to the Ministry of Petroleum Resources.

However, the Presidency has also accused oil workers of being the brains behind the alarming volume of theft recorded each day.

The oil workers alleged that crude oil theft was being perpetrated by highly-placed and influential individuals and politicians, noting that the presidential adviser “is only being economical with the truth and trying to cover up with his allegation against the workers“

A statement credited to Mr. Kingsley Kuku, the Special Adviser to President Goodluck Jonathan on Niger Delta Affairs, published in a national daily on 17th July 2013 titled: “Oil Workers are the Ones Stealing Crude Oil,”

pointedly fingered oil workers.

In its reaction, oil workers under the aegis of the National Union of Petroleum and Natural Gas Workers, NUPENG, and Petroleum and Natural Gas Senior Staff

Association of Nigeria, PENGASSAN, dismissed the accusation, describing it as unimaginable, unguided, m i s c h i e v o u s a n d condemnable.

The oil workers alleged that crude oil theft was being perpetrated by highly-placed and influential individuals and politicians, noting that the presidential adviser “is only being economical with the truth and trying to cover up with his allegation against the workers.”

The oil workers noted that the volume recorded as loss each day (over 400,000 barrels) was too much to go missing without the active connivance and approval of the presidency and the ministry of petroleum resources.

“Has it occurred to you that over 400,000 barrels per day CONTINUES ON PAGE 5

Cover Story

2013 August, SweetcrudeReports

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Nigerian crude trades at $68.84 per barrel

Suspected stolen crude

CONTINUED FROM PAGE 4 amounts to about $40 million per day and that a small barge cannot be used to move such volume? The brains behind this monumental scam must have the active connivance of not just the petroleum ministry but reach as far as the presidency.

“We gathered that the missing crude is being used to raise funds to prosecute the 2015 presidential election.

Please, contact the ministry and the presidency for their reaction".

We sent text messages to both Mr. Kevin Alonzo, a personal assistant of the minister of petroleum resources and Dr. Reuben Abati, the spokesman of President Jonathan, for a reaction to these allegations, but at the time of filing this report, we hadn’t received any feedback.

While reacting to a question on CNN regarding crude oil theft, on Sunday 21st July, President Jonathan had

Voser said the oil theft and disruptions to gas supplies in the country could cost the Nigerian government $12 billion in lost revenues per year. pleaded helplessness, telling the interviewer that Nigeria expected the world to assist.

"If you people don’t buy, they (the thieves) won’t sell," he had said.

Russians, Chinese accused of hottapping Further checks revealed that both Chinese and Russian nationals who have perfected the art of ‘hottapping’ (breaking into flowing pipelines) are actively involved in the ongoing theft, with most volume of the suspected stolen crude finding its way

to both countries and parts of the Far East.

Shell JV worst hit While unveiling its second quarter results, Shell disclosed that higher costs and gas supply disruptions in Nigeria were major factors that made for “clearly disappointing” returns.

The Anglo-Dutch supermajor reported net earnings taking a dive in the quarter, dropping 20% to $4.6 billion (on a current cost of supply basis).

Shell chief executive Peter Voser said exploration charges and adverse

currency exchange rate effects also hit the company’s bottom line.

“These results were undermined by a number of factors – but they were clearly disappointing for Shell,” he said in a statement.

Shell reported an after-tax negative impact of $450 million related to the impact of the weakening Australian dollar on a deferred tax liability and at least a $250 million impact from the deteriorating operating environment in Nigeria.

Voser said the oil theft and disruptions to gas supplies in the country could cost the Nigerian government $12 billion in lost revenues per year.

“We will play our part, but these are problems Shell cannot solve alone,” he said.

Shell to dispose of 4 more assets In 2010 Shell sold some of

its assets and is poised to dispose of four more oil blocks in Nigeria in its latest divestment drive.

“We have recently launched a strategic portfolio review onshore Nigeria and North America resources plays, which will lead to further focus and divestments, and we continue to shape the company for the future,” Voser disclosed.

Reuters reports that the blocks to be disposed, includes OML 13 and 16 onshore Niger Delta and 71 and 72 located in shallow waters.

OML 13 covers a large area with big gas reserves, while OML 16 is a much smaller asset. OML 72 has proven oil reserves estimated at 120 million barrels, while OML 71 has significantly lower reserves.

Shell currently operates these assets in a joint venture with the NNPC 55%, Shell 30%, Total 10% and Eni 5%.

Oil

2013 August, SweetcrudeReports

NNPC building Abuja.

NNPC faults Shell on divestment, $700m loss

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he Nigerian N a t i o n a l Petroleum Corporation, NNPC, has disagreed with claims by the S h e l l P e t r o l e u m Development Company of Nigeria, SPDC, as reason for its divestment of some assets in Nigeria. It also disagreed that Shell lost $700 million to oil theft in the second quarter of the year.

Acting Group General Manager, Public Affairs Division, Ms. Tumini Green, in a statement in Abuja, described Shell’s claim was “defective,” adding that the loss the company claimed to h a v e i n c u r r e d multinational oil firm claimed to have suffered was not only from its Nigerian operations.

“With regard to claims by Shell that it lost $700 million by the second quarter of 2013 to crude oil theft and other

We touch the lives of a broad spectrum of the populace in many ways, by providing kerosene for domestic use, automotive fuel and lubricants for vehicles and solvents for industrial consumption and well-stocked convenience stores for everyday needs disruptions in Nigeria,” NNPC said, “the loss claims are not localised to Nigeria as reported.

“Shell’s acquisition of Shale oil and gas assets in North America has also proven not to be good investments and as such programmed for divestment to minimise risk.

“In order to further buttress the global challenges, Shell’s current tight oil output is 50,000 barrels per day, bpd, as against an estimated 250,000bpd in the United

States. “ F u r t h e r m o r e , ExxonMobil’s Q2 2013 earnings were down substantially by 57 percent year-on-year primarily due to prior year gains, Japanese restructuring and divestment,” the statement further said.

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NPC said of its operations: “Through our expansive distribution network, we aim at delighting many homes and

make life more convenient for a variety of our customers.

“We touch the lives of a broad spectrum of the populace in many ways, by providing kerosene for domestic use, automotive fuel and lubricants for vehicles and solvents for industrial consumption and well-stocked convenience stores for everyday needs.”

According to the company, “We are reputable for setting new standards with ground breaking initiative and world-class facilities. We will always strive to keep our customers happy.”

According to NNPC: “Mergers, acquisition and divestment, MAD, is a global portfolio management strategy employed by mostly big corporations to restructure and reposition companies for better and efficient revenue growth and competition.”

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It wondered anybody “could canvass such position when the multinational oil companies themselves, especially Shell, have repeatedly stated that part of the reasons for divestment of its assets was a deliberate measure to encourage and promote indigenous participation in the upstream oil and gas industry.

NNPC said that Shell’s divestment were a blessing in disguise for the nation as they “have in fact increased indigenous participation which will in turn create new job opportunities, reduce capital flight, encourage capacity building and support gas-based industrialisation aspirations.”

NNPC claimed the nation was winning the war against oil theft and pipeline vandalism, which was being led by the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke and the leadership of the corporation.

According to it, daily crude oil production had increased to an average of 2.4 million barrels per day. “Suffice it to say that some vandalised pipelines and flow stations have been repaired and reopened such that average current national daily production stands at 2.4 m/bpd compared to the average year to date figure of 2.13 m/bpd as at June 2013,” it said.

NNPC blamed the current success to the minister’s directive to NNPC to constitute an industry-wide committee on Security Strategy Against Crude Oil and Product Theft.

That committee’s members include representatives from NNPC, all IOCs, NPDC, security agencies and Oil Producers Trade Section, OPTS, of the Lagos Chambers of Commerce and Industry, LCCI. The corporation restated its determination to work with all stakeholders in the oil and gas industry to ensure effective management of the nation’s vast hydrocarbon resource base.

NNPC expressed gratitude to security agencies that have been collaborating with its team and assured that it was determined to sustain this tempo to free the nation’s oil resources from every form of criminality.

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2013 August, SweetcrudeReports

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Egina project: Samsung tosses Nigerian Content Act over-board

Hot platform HECTOR IGBIKIOWUBO

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o t a l a n d S a m s u n g appear to have tossed the provisions of the Nigerian Content Act over-board in the execution of the $15 billion Egina oil project scheduled to deliver first oil in 2017, pleading concerns over likely cost overrun and time delay.

Indications to this effect was contained in a letter written to the Managing Director of Total Upstream Nigeria Limited by the

Nigerian Content Development Monitoring Board, NCDMB, noting that the work scope for the fabrication and integration package in the Egina field development was not compliant with the Nigerian Content Act. The letter, among other shortcomings, noted that Samsung Heavy Industries, SHI’s, proposal to use Ladol Yard (with no existing fabrication workforce) for fabrication of 10,000 metric tons would lead to flooding the yard with expatriates.

“The Board cannot rely on assumptions and projections

made by SHI (which has no Nigerian experience and local partners with no fabrication or integration track record),” the letter said.

The Board also noted that two years after it highlighted the risk of the Nigerian Ports Authority, NPA, not granting approval and six months after SHI was selected as successful bidder for the EPC contract, NPA approval has still not been obtained for use of Ladol yard for fabrication purposes.

The NCDMB also pointed out that the recommendation to award, RTA, for SHI cannot meet the man-hour

target for fabrication and integration set by the Board to meet the employment provisions in the Act. While noting the preference of SHI and Total’s proposal for awarding the Egina FPSO contract package, the Board said it was unable to support the Total proposal which it considers unrealistic, ‘after noting that three critical statutory approvals have not been obtained from NPA’.

“We cannot rely on projections of parties that have little knowledge of the Nigerian operating environment. Neither Total

nor SHI is in control of these approvals and therefore this proposal is fraught with risks that will lead us to the same outcome from previous exercises,” the Board further noted.

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n a memo from Samsung detailing the way forward in the execution of the Egina project, the company claims that there is the risk of cumulative project delay time of approximately 10 months which will impact on the FPSO delivery, adding that there is the need to reCONTINUES ON PAGE 8

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2013 August, SweetcrudeReports

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UK ready to assist Nigeria fight oil theft

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Offshore buoy

Samsung tosses Nigerian Content Act over-board CONTINUED FROM PAGE 7 evaluate the in-country integration strategy and explore offshore integration.

The company submitted that exploring offshore integration will entail a reduced Nigerian Content requirement from 7 modules to a maximum of 3 modules for in-country fabrication, while the remaining will be fabricated at Samsung Yard in Korea.

Samsung also submitted that reducing the present incountry fabrication and integration scope in favour of offshore integration will provide huge financial gain of about $500 million and delivery of the FPSO on schedule.

It will be recalled that the NNPC approval of the Samsung bid for the Egina FPSO contract was based on 10,000 metric tons work

scope to be carried out at Ladol Yard in Nigeria and even this was not compliant with the Nigerian Content act which stipulated 13,000

metric tons.

Currently, Total and SHI are proposing that the work scope be cannibalised with only 1500 metric tons to be

carried out at Ladol Yard, with some fabrication work given to Ascot and Niger Dock, while the rest is carried out offshore in Korea.

ritish Minister for International Security Strategy, Dr Andrew Murrison, says the United Kingdom is ready to partner Nigeria to combat crude oil theft and terrorism.

Murrison told Minister of State for Defence, Mrs Olusola Obada, in Abuja that his country is concerned by the rising trend of terrorism and oil theft.

“The UK is concerned and is ready to assist Nigeria to secure its territorial integrity. The things that affect your security also affect our security. We are ready to see Nigeria develop as a commercial power house as you have great responsibility in the region as the regional leader.

“We are going to be a part of that and be of assistance to you as you demonstrate and display your regional leadership in this part of the world,” Murrison said.

Dr Andrew Pocock, British High Commissioner, who accompanied his minister to Abuja, expressed confidence that the UK would continue to partner with Nigeria in the area of defence and security.

Obada said Nigeria and the UK had come a very long way and enjoyed cordial relations and that Nigeria’s role in West Africa had placed it in a leadership position, “but it is also very important that there must be stability in the country for the sub-region to be properly secured”.

“Today, Nigeria is facing some challenges which I also discussed with your counterpart when I visited London in the area of oil theft and I sought his opinion on what the UK can do to ameliorate the situation.

Rivers Govt secures DPR approval for Omega-Butler refinery

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he Rivers State Government has secured licence from the Department of Petroleum Resources, DPR, to build and operate a Public Private Partnership modular refinery.

Known as Omega-Butler Refinery, the idea of the project was conceived by the administration of former governor, Dr. Peter Odili.

The plant would be located in Okpokiri, Ogu/Bolo Local Government Area of the state, the state Energy and Natural Resources Commissioner, Mr. Okey

Amadi, has said.

He made this known in Port Harcourt during a meeting with traditional rulers, chiefs and elders of Ikpokiri community.

“Government is committed to the completion of this project because of the benefits of employment and other economic ventures which our people stand to leverage to better their living standards,” the commissioner said.

Urging the community to co-operate with the government to ensure a successful execution and operation of the refinery, he stated there was co-operation was

necessary for early mobilisation by the core investors to site.

“The people of Ikpokiri community are committed to the success of this project and will do everything possible to ensure that it commences without any hitch,” Chief Jonah Tamuno, who spoke on behalf of the community, said.

Going by the schedule for the establishment of the plant, it is expected to be ready in 18 months. It has a 5,000 to 10,000 barrels per day production capacity, with room for possible upgrade to 30,000 barrels per day.

Oil

2013 August, SweetcrudeReports

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Oil theft: NNPC contradicts self *Puts daily production at 2.4mbpd

Oil theft YEMIE ADEOYE

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he management of the Nigerian N a t i o n a l Petroleum Corporation, NNPC, has declared that the effort by the Federal Government to stem the tide of oil theft and pipeline vandalism is yielding positive result contrary to insinuation in some sections of the media that the oil and gas industry is headed for extinction as a result of the development.

This, however, contradicts an earlier statement of NNPC Group Executive Director, Exploration and Production, Mr. Abiye Membere, at Abonema in Rivers state a few weeks ago, where he told newsmen that Nigeria has been struggling to produce between two and 2.1mbpd since the beginning of the year even though there is the capacity to produce 2.5mbpd.

However, in a press release signed by NNPC’s Tumini

Green, the Corporation stated that the combined efforts of the Petroleum Minister, the NNPC and the IOCs to stem the menace have resulted in a significant drop in the level of pipeline vandalism and crude oil theft, resulting in a corresponding increase in daily crude oil production.

“Suffice it to say, some vandalised pipelines and flow stations have been repaired and re-opened such that average current national daily production stands at 2.4mbpd compared to the average year to date figure of 2.13mbopd as at June 2013,” Green sated.

The NNPC spokesperson traced the current success to the directive by the Minister to the NNPC to constitute an industry-wide committee on ‘Security Strategy against Crude Oil and Product Theft’.

She informed that the committee’s members include representatives from NNPC, all IOC’s, NPDC, Security Agencies as well as

In a fortnight, repair works on the Nembe Creek Trunk Line, NCTL which has a daily capacity of 150,000bopd is expected to be fully completed the Oil Producers Trade Section, OPTS, of the Lagos Chambers of Commerce and Industry, LCCI. “In a fortnight, repair works on the Nembe Creek Trunk Line (NCTL) which has a daily capacity of 150,000bopd is expected to be fully completed. On completion, daily average crude oil production is expected to increase to 2.50Mbopd which will exceed the national daily target of 2.48mbpd,” she said.

While thanking the security agencies for a wonderful work done to reduce the menace of vandalism, Green stated that the Corporation was determined to sustain

the tempo.

“Our expectation is to increase production from the 2.48 to 2.55mbpd (both crude and condensate) for the rest of the year. We have the capacity and potential to maintain production above 2.55mbpd in the country. All that is required is to continue the fight against pipeline vandalism and crude oil theft to achieve this target. This will increase our 2013 average production to about 2.34Mbopd if the current fight against pipeline vandalism and crude oil theft is sustained,’’ she stated.

On the claim that the

divestment by some multinational oil firms operating in the Niger Delta is due to harsh operating environment and absence of leadership in the oil industry, NNPC described the argument as defective and rooted on weak syllogism.

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he Corporation informed that Mergers, Acquisition and Divestments, MAD, is a global portfolio management strategy employed by mostly big Corporations to restructure and reposition companies for better and efficient revenue growth and competition, wondering why anybody could canvass such position when the multinational oil companies themselves, especially Shell, have repeatedly stated that part of the reasons for divestment of its assets was a deliberate measure to encourage and promote indigenous participation in the upstream oil and gas industry.

2013 August, SweetcrudeReports

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NIGERIA CONTENT INITIATIVE Dr. Ibilola Amao

The folly of Nigeria’s multiple regulation & taxation policy

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A rig

Camac, Allied Energy announce new delay for Nigeria’s Oyo-7

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he US duo of Allied Energy and Camac Energy will have to wait another two to four weeks to spud their Oyo-7 well off Nigeria due to rig delays, Camac said.

The assignment, due to be completed by Transocean’s semi-submersible Sedneth

701 and already delayed multiple times, will not meet its expected start date of 31 July, the company said.

“The drilling of Oyo-7 has been delayed due to unanticipated drilling problems at its current location and efforts are being made to resolve the problems and release the rig to Allied,” Camac continued.

More details will be provided in a 13 August second-quarter results conference call, the company said.

In January the duo said they had secured a subcontract from Nigerian Petroleum Development Corporation, NPDC, for the semisub for a slot between April and August.

Sonangol to invest in Vietnamese oil, gas projects

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ngolan oil and gas firm, Sociedad Nacional de Combustíveis de Angola or Sonangol, plans to soon commence oil exploration and production activities in Vietnam following agreements signed by the governments of Angola and Vietnam.

According to a report by Angolan Press Agency, Angop, Angolan Oil Minister Botelho de Vasconcelos noted that Angola and Vietnam has been cooperating on oil and gas since 2008 but now conditions have been put in place for oil explorers in both countries to

get the institutional support needed to identify various projects.

Vietnam’s Foreign Minister, Pham Binh Minh, was on a two-day visit to Angola recently to meet oil ministers and other members of the Angolan government.

eadership in developed nations utilize taxation as a tool to develop social infrastructure, create jobs, stimulate investment in manufacturing, promote indigenous asset ownership and to increase exportation of finished products, goods and services. This is not the case in Nigeria. The fact that our taxation policy is very operational with a focus on revenue generation rather than being strategic is tragic. Our poorly synchronized taxation policy provides enough evidence to the strategic investor that the Nigerian leadership as quite unserious about poverty alleviation and job creation.

Clause 2 of the Nigerian Oil and Gas Industry Content Development, NOGICD, Act reads: “All regulatory authorities, operators, contractors, subcontractors, alliance partners and other entities involved in any project, operation, activity or transaction in the Nigerian Oil and Gas industry shall consider Nigerian Content as an important element of their overall project development and management philosophy for project execution”. It gladdened my heart when I imagined the transformational possibilities that the Act and this particular clause could achieve if our taxation equation was rightly pitched to encourage and attract the much needed Foreign Direct Investment, FDI. Alas barely any major project has achieved Final Investment Decision, FID, in the past 3 years.

In many countries tax holidays are granted to investors as an incentive for the much needed investments that will create immediate jobs and reduce unemployment. A tax holiday can be used alongside a Local Content law to stimulate in-country investment, domiciliation of activities and domestication of technology. The enactment of the NOGICD Act should have been implemented simultaneously with a power supply and tax incentivized plan. Rather than jump start our economy, Nigeria is now promoting poor corporate governance and harsh regionally focused taxation regimes in the PIB. The average entrepreneur in our hydrocarbon industry is not only faced with multiple regulation (SON, NIMASA, DPR, MPR, FEPA, NCDMB, NOSDRA, etc) but also multiple taxes paid to the State and Federal Government: Companies income tax; Withholding tax on companies; Petroleum Profit Tax; Value-added tax (VAT); Education tax; Capital gains tax, NSITF Payments, Stamp duties, NDDC levies in some cases etc. Investors who take taxation seriously may not find Nigeria a viable investment destination as there are too many layers of regulation and taxes for an honest business to survive.

As if all these are not enough, we have another internal financial hemorrhage because about 400,000 barrels of oil and approximately $40m of revenue is being lost daily through pipeline vandalism, illegal bunkering and halt in production etc as stated by our Minister of Finance. It would be impossible to achieve such a feat except very highly placed persons above the law are involved in the crude oil sabotage. To think that this high level pilfering is tax free points to the fact that multiple taxation is only for a few law abiding entities or companies. The general masses will continue to suffer as they get the direct brunt of higher cost of living occasioned by multiple taxation if these losses are not addressed urgently.

Why must a country with a population of over 160 million survive on less than 5000MW of public power supply? Why does Nigeria have such poor infrastructure (roads, railways, waterways, airports, ports etc)?

Why is Nigeria’s educational and health system so substandard and inadequate?. If we add up all the collection made from custom duty and the multiple taxation, Nigeria has no excuse to be in the current state of infrastructural shambles that she is in currently. The long awaited gas and industrial revolution has not occurred simply because there is no power to drive it and our fiscal regime is not appealing to most investors.

If Nigeria does not pay attention to the advice of her strategic thinkers and planners, Financial Analysts, Economists and Financial Experts but continues to depend on voodoo economics we may become unable to meet our financial obligations and energy requirements to the detriment of over 160 million people. The long overdue passage of a “win-win” Petroleum Industry Bill should be questioned and appropriate persons sanctioned for the over 5 years lost in transit. The adverse impact of the delay of the PIB passage has resulted in huge divestments and lost FDI. More focused and proactive hydrocarbon producing countries such as Angola, Mozambique, Ghana, Equatorial New Guinea, Democratic Republic of Congo etc are now beneficiaries of Nigeria’s losses.

There is an urgent need to reel in all government agencies for a holistic discussion on taxation, then pass the PIB into law. We cannot afford to kill the goose that lays our golden egg!!!!!.

Dr. Ibilola Amao is the Principal Consultant with Lonadek Oil and Gas Consultants, 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 .

2013 August, SweetcrudeReports

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Tullow moving ahead with Ghana's TEN projects

Tollow oil, facility in Ghana

CHUKS ISIWU

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K's Tullow Oil has come a long way in Ghana since its f i r s t o i l discovery at the offshore Jubilee field in 2007. On the heels of this historic find and the coming on stream of the Jubilee fields came other discoveries.

Tullow is operator (47.17 per cent) of fields in the deepwater Tano contract area, encompassing the Tweneboa, Enyenra, and Ntomme, TEN, fields, alongside Kosmos Energy (17 percent), Anadarko Petroleum (17 percent), Sabre Oil & Gas Holdings Ltd, a wholly owned subsidiary of Petro SA (3.825 percent), and the Ghana National Petroleum Corporation, GNPC (15 percent).

The partners has taken a major step towards successful streaming of the TEN project with choice of the contractor to supply a Floating Production Storage and Offloading, FPSO, vessel to be put to work at the project.

“We are very much there on the FPSO. We just haven’t

announced it. That contract is pretty much ready for signature,” said Tullow’s Paul McDade ahead of the FPSO award.

J a p a n ’ s M o d e c Incorporated is the beneficiary of the contract for the supply, charter and lease, operations and maintenance of the FPSO. Under the arrangement, Modec would be responsible for the engineering, procurement, construction, mobilisation and operation of the FPSO, including topsides processing equipment as well as hull and marine systems.

The Japanese firm will also convert the VLCC (very large crude carrier) Centennial J into an FPSO, which is capable of handling expected plateau production of 80,000 barrels of oil per day, 170 million standard cubic feet of gas per day and has storage of 1.7 million barrels of total fluids.

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cheduled for delivery in 2016, the FPSO will be installed in theTEN field and is designed to remain operational in the field for up to 20 years. It is the second vessel Modec will provide and operate in Ghana

Toshiro Miyazaki, president and chief executive officer of Modec said of the award: “Modec is very proud to have been selected by the TEN field partners and GNPC to provide and operate the FPSO for TEN, a world class facility in a world class field following the FPSO Kwame Nkrumah MV21 for the Jubilee field development, which was awarded in 2008.

The company is currently operating the FPSO Kwame Nkrumah MV21 for Tullow as operator of the Jubilee field.

Toshiro Miyazaki, president and chief executive officer of Modec said of the award: “Modec is very proud to have been selected by the TEN field partners and GNPC to provide and operate the FPSO for TEN, a world class facility in a world class field. We are equally pleased to be a part of the team that will provide a needed energy resource for the benefit of the people of the Republic of Ghana.”

He said the FPSO award represented a significant milestone for his company in assisting Tullow and its partners to develop a world class oil field while also strengthening Modec’s involvement in the development of oil exploration and production infrastructure in West Africa. In West Africa, Modec has operations in Ghana and Cote d’Ivoire with additional facilities operating in Nigeria, Equatorial Guinea, Cameroon, Angola and Gabon.

Tullow signed its first licenses for oil and gas exploration and production in Ghana in 2006 and made its first discovery at the

Jubilee field. The company was able to turn Jubilee into production in only 40 months by the end of 2010.

E

ncouraged by this first success, Tullow expanded exploration in the deepwater Tano licence and made a major light high pressure oil finding in 2009 in the Tweneboa field. In 2010, Tullow hit oil in Owo, which later became Enyenra as testing wells confirmed large oil reserves across the formation. The following year, exploratory drilling campaign was extended to the Ntomme field. The reported results guided Tullow and its partners to choose a development scheme of the three fields through a single FPSO vessel.

The three oil and gas fields are lying by 1,000 to 2,000 metres water depths. They are located 25 kilometres west of Tullow’s Jubilee and approximately 60 kilometres offshore south of Half Assini on the coast of Ghana.

2013 August, SweetcrudeReports

Oil

12

Gas station

Conoil ups stake in fuel retailing, builds 7 new stations

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he petroleum p r o d u c t marketing company, Conoil Plc, said it has consolidated its lead in the local fuel retailing business in Nigeria. It recently announced the construction of seven new mega stations to increase its retail network across the country.

The stations are billed to commence operation in the last quarter of this year, the company said in a statement.

Spread across the country and located in high traffic areas in Onitsha (Anambra), Port Harcourt (Rivers), Makurdi (Benue), Jibia (Katsina), Jebba (Kwara) and two in Lagos, the stations have been built in accordance with global trends in petroleum product retailing.

The buildings are in pace

We touch the lives of a broad spectrum of the populace in many ways, by providing kerosene for domestic use, automotive fuel and lubricants for vehicles and solvents for industrial consumption and well-stocked convenience stores for everyday needs with technological advancement worldwide with special emphasis on delivering convenience to motorists, Conoil said.

According to the statement: “To foster customer loyalty, the new multi-functional

retail outlets leverage technology to deliver improved service efficiency at the forecourts.

“In line with its tradition, the stations are designed to serve as one-stop retail outlets equipped to offer

motorists a wide range of quality services and convenience besides the regular business of selling petroleum products”.

The statement said the company plans to grow sales and revenue by over 65 per cent and will, in line with the company’s objectives, “transform customer’s fuelling experience to an absolute delight”.

“Conoil has always been audacious in its initiatives and has a sterling reputation for reliability and consistency. When completed, the new stations will complement the company’s plan for massive importation of refined petroleum products. The expansion project represents the second phase of the company's comprehensive four-year plan which started two years ago,” the company further said.

It added: “Through our expansive distribution network, we aim at delighting many homes and make life more convenient for a variety of our customers.

“We touch the lives of a broad spectrum of the populace in many ways, by providing kerosene for domestic use, automotive fuel and lubricants for vehicles and solvents for industrial consumption and wellstocked convenience stores for everyday needs.

“We are reputable for setting new standards with ground breaking initiative and world-class facilities. We will always strive to keep our customers happy.”

Conoil raised the standard in fuel retailing about eight years ago as it introduced mega fuel stations in Abuja, Lagos, Port Harcourt, and Yola.

Focus

2013 August, SweetcrudeReports

13

Shale opens up new vistas for the oil and gas industry —SPE Chairman

Oil field

O

sayande Igiehon is Chairman of the Nigeria Council of the Society of Petroleum Engineers. He is also the Regional Discipline Lead Reservoir Engineering at Shell. In this interview, he speaks on a wide range of issues. Excerpts: There is so much anxiety in Nigeria-at least outside the government ranks- about the impact of Shale Gas and other Unconventional fossil fuels in Nigeria. The SPE seems to share these anxieties. What do you think can go wrong?

The emergence of unconventional hydrocarbon resources, especially gas is a significant factor in the global energy demand - supply equation. The potential size of this resource is of the magnitude that requires a deeper consideration of the short, medium and long term impact it could have on Nigeri oil and gas industry. This is of particular importance, given our position as the 6th largest crude oil exporter and 14th largest Natural gas exporter in the

world, on which about 95% of our foreign exchange earnings and about 80% of our budgetary revenues are derived.

In the early release (reference case) of USA’s Energy Intelligence Agency’s 2013 Annual Energy Outlook, a sharp rise in domestic crude oil production from tight oil play over the next decades is forecasted. Further, dry natural gas production are projected to increase, mostly from unconventional plays (tight sand and shales), such that by 2020, domestic production will outpace consumption by 2020, thereby spurring net export of gas. There are other scenarios of this forecast that predict earlier or later cutover from net importer to net exporter.

On 20th February 2013, Platts website (a leading global energy,

petrochemicals and metals information provider) carried a story with headline that “Nigeria's LNG exports to US in steep decline on rise of shale: NNPC”. It quoted an NNPC report that stated that "In 2011, Nigeria exported just 2.3 Tcf, representing 1% of total LNG exports to the US, compared with about 12% in 2007," NNPC said in the report. Nigeria exported 95 Tcf of LNG to the US in 2007, according to the report.

Further, it quoted the report saying that “However, the new NNPC data projects Nigeria's LNG exports to shrink further given the steady increase in shale gas' share of total US gas supply from 8% in 2007 to 32% in 2011 and to the US becoming a net exporter of natural gas this year”.

Further, sizeable unconventional resources are reported in Argentina, Australia, Canada, China, Mexico, South Africa.

These reports go to highlight the growing importance of unconventional hydrocarbons and potential impacts on the global oil and gas supply and demand dynamics. It is

therefore incumbent on Nigeria to reflect on this situation and fashion out strategies to protect its industry, its market and income.

In choosing this topic for the Oloibiri lecture series, SPE Nigeria is providing a robust platform to bring this issue to fore, for the Government and Industry players to get informed and deliberate on the way forward.

Doesn’t the phenomenon have any upside, like new skills for Petroleum Engineers?

Indeed, the emergence and potential of unconventional opens up new vistas for the oil and gas industry, and in fact for the world, as we are likely to be able to tap into resources which were hitherto evaluated to be unproducible . This hydrocarbon source will potentially play a significant role in bridging the future demand – supply gaps forecasted in some global energy scenarios.

Globally, and especially in the countries where there sizeable unconventional resource discovered and/ or in production, new skill sets and work opportunities have opened

up for Petroleum Engineers.

However, noting that the unconventional resource base in Nigeria is not yet been actively developed, these opportunities are not currently available incountry.

Is the Nigerian Petroleum Engineer adequately involved in running the Nigerian Oil and Gas In processing and evacuation facilities solutions. On the economic front, reducing costs is going to be key to increasing recoverable hydrocarbon volumes. Petroleum Engineers is well positioned to address these technical and economic evaluation challenges and are doing so in the government organizations and various companies.

You are a reservoir engineer yourself, and it does look like the reservoir engineer plays a more active role in the running of the SPE, especially in Nigeria.

Ideally, who is qualified as a member?

How broad is your reach?Yes, I am a Reservoir Engineer. I can also confidently say that all

CONTINUES ON PAGE 14

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2013 August, SweetcrudeReports

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Shale opens up new vistas for the oil and gas industry CONTINUED FROM PAGE 13 Petroleum Engineering and related disciplines are well represented in the membership, participation and running the affairs of SPE Nigeria and globally.

The key requirement for professional membership include holding a University degree in basic or applied sciences or engineering ; and/or 6 years of practice in support of petroleum engineering or in the application of science to the petroleum industry. Hence, membership is open to virtually all staff in the oil and gas industry.

Key requirements for student membership include enrolment in a university in petroleum or a related field, pursuing the equivalent to a bachelors or graduate degree and attending a university with an SPE established student chapter.

Also, within SPE, the members can also signify interest in any of six discipline groupings which are Drilling & Completions, HSSE & Social responsibility, Management & Information, Production & Operations, Projects, facilities & Construction, Reservoir Description & Dynamics.

An engineer can work either upstream, midstream or downstream. But your focus, year in year out and in most of your technical sessions, have been largely on the upstream.

Do you think that Nigeria’s poor record in downstream engineering capability: from Refinery Construction to Compressed Natural Gas stems from the lack of vigorous

advocacy from an influential society like SPE? You are right that historically SPE has been focused on Upstream, but that is now expanding to the other oil and gas spectrums. We now have members from Midstream and Downstream in the society and their impact is beginning to be felt. I will give an example. A few weeks ago the Warri Section had at its Monthly Technical Meeting, a presentation by a downstream expert on turnaround maintenance. I can tell you that the turn-out was one of the largest in recent times at that location.

The SPE Nigeria conference theme for 2013 seeks to put a searchlight on the continent, discussing “required policy, funding, technology techniques and capabilities” , to “grow Africa’s Oil and Gas Production”. That’s markedly different from previous themes that are grounded in Nigeria.

Why is it important to have a Pancontinental agenda for a conference that’s essentially local?

As you know SPE is a global organization with mission to disseminate technical knowhow and related technologies in the fields of oil and gas exploration and production. SPE Nigeria being part of this international body, is part of this global mission and whilst it is primarily focused on Nigeria, with its central position as the largest and most established SPE organization in Africa, has a pivotal regional leadership

Shale gas industrial landscape

role, both at the Sub-Saharan and Africa levels.

The 2013 conference will be the 37th edition of SPE Nigeria’s Annual International Conference & Exhibition (NAICE) and this conference has grown since its inception from a Nigeria-only into a Regional event. For example, as far back as 2002, the conference had already began to play in this regional/ pan-African level when it examined the theme “The Technological Challenges in Maximising Exploration and Production in West and Southern Africa Sub- Regions”.

Also, many past conferences have delegates from other African countries eg Ghana, Uganda, and Congo.

It is against this foundation therefore, that the 2013 conference aims to provide a veritable platform for the examination and discussion of what it will take to achieve Africa’s oil and gas production growth ambitions. The topic,

which is taking a holistic view of the key enablers that will ensure success, namely “required policy, funding, technology techniques and capabilities” also has in its frame, the recent new entrants into the club of oil and gas producing nations in Africa.

This way, the 2013 NAICE aim to provide a pan-African platform for professionals and organisations to network and exchange experiences and ideas to help in the attainment of the individual state and regional production growth objectives.

Who are you inviting, apart from the usual ranking officials of the Nigerian government, to make the event live up to this billing of a Pan African platform?

Over the years, we have invited participation from the Government, Companies and Universities in the other oil producing African countries sometimes with encouraging results. For example, at the 2010 conference, the Minister of

This notwithstanding, participation will still be invited from the other oil and gas producing countries in Africa including namely Ghana, Uganda, Congo, Gabon, Ghana, and Angola

Petroleum of the Republic of Congo sent two representatives to attend the conference. I have to be honest that one challenge we have faced is that of language, with a number of countries’ official language being French, Portuguese or other languages.

This notwithstanding, participation will still be invited from the other oil and gas producing countries in Africa including namely Ghana, Uganda, Congo, Gabon, Ghana, and Angola.

It is important for me to highlight that the conference has a technical focus, with capacity building and exchange of ideas as a core objective, so participation is only sought at the level of the highly placed government officials.

Participation from the executives, professionals and student cadre is also a key drive.

Your 2013 Calendar includes the Oloibiri Lecture, the Catch ‘em young “ essay and quiz competition, Nigerian Students Technical Conference, monthly technical sessions by SPE chapters…Still, the perception remains that the three day conference constitutes over 70% of SPE Nigeria’s activity. How do you change that?

Indeed, with the growth, success and visibility recorded by the conference NAICE since inception, it has eclipsed all the other less-visible activities of SPE Nigeria Council and the five SPE Sections in Nigeria.

Benin, Lagos, Port Harcourt and Warri).

Gas

2013 August, SweetcrudReports

NNPC mulls FLNG option to exploit offshore gas

Floating Liquefied Natural Gas, FNLNG, vessel

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he Nigerian N a t i o n a l Petroleum Corporation, NNPC, has announced plans, with six other companies, to exploit 'stranded' natural gas resources offshore the country through a Floating Liquefied Natural Gas, FNLNG, vessel.

Executive Director, Corporate Planning and Strategy of NNPC, Dr. Timothy Okon, disclosed this at a stakeholders' forum organised by the Nigerian LNG Limited which focused on the challenges and prospects of Nigeria’s gasrelated projects, including the LNG, liquefied petroleum gas or cooking gas and natural gas liquids.

Represented by Mohammed Bashir, an NNPC official, Okon said the talks with the six companies, one of which is Omega-Butler Nigeria Limited, was in top gear as he emphasised the advantage of the FLNG option.

According to him, the

Nigeria gas endowment, he said, is up to 600 trillion cubic feet, hence the country is often described as large gas haven with little oil. “Oil production stands at 2.5 mbpd, while gas flared stood at 1.4 billion cubic feet per day FLNG technology would be deployed to extract stranded gas from offshore deposits.

“As at now, discussions are ongoing and NNPC is considering proposals on this, but there are about six companies that have indicated interests to work with the NNPC on this; the technology of cost effective and easy to deploy,” Okon said.

N

igeria is endowed with 182 trillion cubic feet of natural gas, going by 2012 figures disclosed recently by Petroleum

Resources Minister, Mrs Diezani Alison-Madueke.

This is a marginal drop in reserves compared with 2011 figures.

A bulk of this natural endowment is being flared due to unavailability of options to utilise the gas, thus ranking Nigeria second only to Russia in the global gas flaring chart. But, the Federal Government is hoping that this would be a thing of the past with its gas master plan launched last year with fanfare.

Alison-Madueke has been emphatic that the

government was committed to promoting investments in Nigeria’s gas sector with the intention of creating a gasbased industrial revolution within the country’s hydrocarbon industry.

Losing over N735m daily to gas flaring According to Department of Petroleum Resources, DPR, figures, Nigeria is losing over 4.9 million dollars (more than N735 million) daily to gas flaring.

DPR Director, Mr George Osahon, stated this recently in Lagos.

Nigeria gas endowment, he said, is up to 600 trillion cubic feet, hence the country is often described as large gas haven with little oil. “Oil production stands at 2.5 mbpd, while gas flared stood at 1.4 billion cubic feet per day. This means that an average of 4.9 million dollars worth of gas is being flared on daily basis which translates to about 1.4 billion cubic feet of gas flared daily by the international oil companies,’’ he said.

15

DPR goes after illegal gas marketers CONTINUED FROM PAGE 1 in Lagos, Kuku said: “The Department wishes to reiterate its advice to LPG plant owners who continue to sell products to unlicensed distributors and bulk end users despite directives against this practice. Be informed that, henceforth, all violators of this regulation which stipulates selling and distribution of any petroleum product to licensed companies only will be severely sanctioned.

“We want to use this medium to direct all LPG plant operators to ensure that resell points have valid licence. Our inspectors have been directed to ensure compliance.”

He also announced a ban on truck-to-cylinder and cylinder-to-cylinder dispensing of cooking gas, describing them as illegal and dangerous.

“Dispensing of LPG by bobtail trucks is illegal and cylinder-to-cylinder refilling is dangerous and unlawful. Perpetrators, if caught, shall face appropriate sanction,” Kuku warned.

The DPR cxecutive, who also complained that some LPG marketers had the habit of not renewing their operating licences, warned that officials of the DPR would be commencing constant visits to plants to enforce compliance.

“In as much as we encourage the proliferation of LPG plants, prospective plant owners must follow due process to obtain all requisite approvals before the commencement of any upgrade or modification of plant,” Kuku stated.

According to Kuku also, the visit to licenced LPG plants was aimed at ensuring compliance with statutory provisions on operational safety.

He stressed: “The Department will embark on operational facility audit of licensed plants starting from next month to ensure strict compliance to statutory guidelines and standards.

2013 August, SweetcrudeReports

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2013 August, SweetcrudeReports

Gas

17

A Nigerian liquid LNG vessel

NLNG exports $17bn worth of gas

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he Nigeria Liquefied Natural Gas Limited, NLNG, says it has utilised 92 billion cubic metres, bcm, of associated gas in producing liquefied natural gas, LNG, for export in the last 12 years.

In all, this translated to 968 LNG and 145 Natural Gas Liquids, NGL, cargoes, valued at about $17 billion. With this, according to NLNG, it has contributed about four per cent of Nigeria’s Gross Domestic Product, GDP, per year while fulfilling its domestic LPG supply obligations.

Mr. Patrick Olinma, General Manager, Commercial at the NLNG, revealed that the NLNG was currently responsible for about five per cent of global LNG supply.

Olinma outlined the impacts of the United States shale gas revolution, discoveries in Mozambique, some parts of East Africa and Australia, economic recession in Europe, as some of NLNG’s challenges in the global LNG market.

The challenges also included alternative energy on NLNG primary markets and limited market opportunities for renewal of two Gas Supply Agreements, GSAs, which would expire by

How do you explain your vessels placed on blockade by the government agencies of your home country; this is not good for us in the midst of global competition and we hope it does not occur again 2020 and 2021.

Olinma said: “In this year alone, we have had four force majeure, which have placed the integrity of our deliverability in

question; the Japanese have asked questions on our capacity to deliver, of course, we assured them of our capacity but the recent issue with NIMASA did not go

down well.

“How do you explain your vessels placed on blockade by the government agencies of your home country; this is not good for us in the midst of global competition and we hope it does not occur again?

“We had a similar case with the NDDC (Niger Delta Development Commission) sometimes back and the Supreme Court resolved that we were protected by the sanctity of the NLNG Act, which exempts us from paying taxes until after

EIA trims US gas output estimate T he US Energy Information Administration on Tuesday trimmed its estimate for domestic natural gas production in 2013, but expects output this year to be up about 1% from 2012?s record-high levels.

In its August Short-Term Energy Outlook, the EIA said it expected marketed gas production in 2013 to rise 710 million cubic feet per day to 69.89 billion cubic feet per day, down from its July outlook of 69.96 Bcf daily, Reuters reported.

Despite the downward estimate, 2013 would still mark the third straight year of record US production.

Domestic output in 2014 is expected to set another record high, up 570 MMcfpd to 70.46 Bcf daily. The EIA had previously estimated 2014 production at 70.41 Bcfpd.

The agency, noting that the economics remain more favourable for onshore gas development, continues to expect production growth from onshore fields to more than offset declines in federal Gulf of Mexico

10 years but here we have N I M A S A , D P R a n d N PA breathing down on us”.

The Nigeria LNG Limited is a company owned jointly by the Nigerian National Petroleum Corporation, NNPC, representing the Federal Government, with 49 per cent share, Shell-25 per cent, Total LNG Nigeria-15 per cent and Eni-10.4 per cent.

It was incorporated as a limited liability company on May 17, 1989 to harness Nigeria’s vast natural gas resources and produce LNG and NGLs for export.

output.

Imports of LNG are expected to remain at minimal levels of around 400 MMcfpd in both 2013 and 2014, EIA said.

EIA slightly lowered its estimate for 2013 consumption, but still sees usage climbing by 250 MMcfpd, or 0.4%, from 2012 to 69.93 Bcf daily.

It was the fourth straight month that the agency lowered its estimate for consumption growth this year, Reuters said.

2013 August, SweetcrudeReports

Gas

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Trans-Saharan gas project under review

A gas pipeline

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artner nations to the multi-billion dollar TransSaharan gas pipeline project, including Nigeria, are reviewing the prospects of the project, focusing especially on its commercial viability.

This is according to Dr David Ige, Executive Director, Gas and Power, at the Nigerian National Petroleum Corporation, NNPC, who said the need for the review arose out of consideration of changes in the international oil and gas market and the need to reposition the project.

“The Trans-Saharan stakeholders have come together to commission that study because in Europe, a lot has changed and it is so difficult to know whether the market is viable because there is growth and competition. Russia supplies gas and nobody knows what will happen with shale gas supply in Europe. Besides,

the economic growth in Europe has flattened,” he said.

The Trans-Saharan Gas project was conceived over a decade ago by presidents of Nigeria, Niger and Algeria as an avenue to transport natural gas from Nigeria across the Sahara desert to North Africa and ultimately to markets in Europe..

At conception, the cost of the project was estimated at $12 billion, but industry sources said this must have escalated given the influence of market forces.

Ige, who hinted on this, was of the view that new developments in the oil and gas industry have called for re-evaluation of the project to ascertain its commercial viability.

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n the last 10 years, according to him, gas consumption had grown substantially in Nigeria while the emergence of shale gas in many countries have affected market options, and

these needed to be considered before the project could commence.

Nigeria, he said, is the principal shareholder in the project considering the fact that most of the gas supplies will come from the country, as he also announced that the NNPC would soon advertise for expression of interest, EoI, for the Calabar-Kano pipeline, from which the gas would be taken to the Nigerian border.

“Trans-Saharan gas project starts from Calabar to Kano and to Algeria and c r o s s e d t o t h e Mediterranean.

“About 30 per cent of the entire segment of the project is in Nigeria, which is the Calabar to Kano. What we have done is to focus right now on that first leg, which is getting the Nigerian side right.

“Firstly, is that there is no Trans-Saharan without Trans-Nigeria. Secondly, for Trans- Saharan to be viable, we have to make sure we

About 30 per cent of the entire segment of the project is in Nigeria, which is from Calabar to Kano. What we have done is to focus right now on that first leg, which is getting the Nigerian side right

open access to different gas supply sources within Nigeria,” Ige added.

The NNPC executive director maintained that when the project was conceived, the level of domestic gas demand and usage in the Nigeria had not been anticipated, adding that a lot had changed since the domestic market is growing at an alarming rate.

According to him also, for the project to become reality, there was need for different sources of gas supply for transmission to Europe.

“That is what the AjaokutaCalabar pipeline will do. At the moment, we are focused on that and we will deliver that. Soon, you will start to see expression of interest adverts for what we are trying to do in Calabar.

2013 August, SweetcrudeReports

Gas

19

Shale

alters energy market, players face challenges Shale oil field in America

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h e n domestic natural gas output grew l i k e a phoenix from the ashes of an industry projected to be completely dependent on Canadian and liquefied natural gas, LNG, imports to meet future demand, the gas shale revolution was hailed for its role.

Gas executives, analysts and investors were amazed by the volume of gas being unlocked by shale wells as a result of the technical success of marrying horizontal drilling with hydraulic fracturing. The gas industry’s phoenix-like recovery, however, was halted by the global financial crisis in 2008. But prior to that time-out, it appeared the gas industry was going to enjoy an unusual era of high natural gas prices coupled with strong oilfield activity, i.e., substantial production volumes and high drilling rig counts. That view even led some industry participants to begin imagining a world in which gas demand might never be constrained by inadequate supply.

The siren song of unlimited, cheap natural gas unleashed

by the shale revolution created a boom for land leasing and drilling activity.

Demand for drilling and completion services was so strong that it outstripped supply, boosting service prices and attracting huge capital inflows. This boom, which some refer to as the gas shale traveling road show, drove players to scour the landscape in hopes of finding the next most promising shale and swooping in to establish a large land position cheaply before the rest of the industry caught on. What many of these promoters failed to anticipate was how the prolific gas supply being unleashed by this boom would negatively impact gas prices, and in turn the profitability of gas shale plays.

Students of the gas shale revolution are quite familiar with the chart that shows the recent history of US gross natural gas production and US land gas output component compared to the rig count for those targeting natural gas prospects since 2005. From the early 2000s until the summer of 2008 when the financial crisis exploded, there was a steady

increase in gas-oriented drilling along with a steady rise in land gas output.

Overall, US gas output did not climb as steadily as the land gas output component since production trends offshore in the Gulf of Mexico and in Alaska often rose and fell due to local situational events.

The dramatic decline in the rig count as a fallout from the financial crisis can be clearly seen in the chart, but notice also that land gas output declined. Total domestic gas output also fell, but it declined at a faster rate than the land output suggesting that Gulf of Mexico output also suffered from the financial crisis fallout. The important trends to observe are what happened to output and gas-oriented drilling as the nation struggled to extricate itself from the 2009 recession, which undercut economic activity, energy demand in general, and natural gas output in particular.

S

tarting just about a year after the 2008 peak in gas output, production turned up, both for land output and overall US gas supply. That

production rise continued until the fall of last year when it appears that both total gas output and land gas production reached peaks.

Shortly before the gas production upturn in late 2009, gas-oriented drilling began to recover. The rig count upturn lasted just about a year before flattening out and then

2005-2013. In broad terms, the history can be divided into pre- and post-financial crisis periods. With the exception of two significant spikes in natural gas prices between 2005 and 2009, gas prices essentially traded in the $7-$8 per thousand cubic foot, Mcf, range, a very healthy price. As the financial crisis and resulting

Total domestic gas output also fell, but it declined at a faster rate than the land output suggesting that Gulf of Mexico output also suffered from the financial crisis fallout declining until early fall of 2011, at which point the rig count began a steep slide that has only recently moderated.

To understand how the gas industry became convinced it had entered a new era of unprecedented prosperity, one needs only to look at the price of natural gas during

recession trimmed domestic energy and natural gas consumption, while at the same time gas output was growing, gas prices slid until they bottomed in early 2011 in the $3/Mcf range, or less than half what prices had averaged in the pre-crisis era.

Power

2013 August, SweetcrudeReports

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Independent power plant

Siemens hosts power forum to boost electricity infrastructure in Nigeria YEMIE ADEOYE

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n an effort to boost the deplorable state of Nigeria’s electricity infrastructure Siemens, an active player in the Nations power sector and the Nigerian Ministry of Power jointly hosted a power generation forum to discuss typical challenges being faced by Independent Power Plant (IPP) developers in Nigeria’s nascent electricity market and highlight the support and value Siemens can bring to the table.

The duo held the 2nd edition of the IPP Forum which was focused on fostering talks with

Independent Power Plant developers and banks with the aim of highlighting the various roles Siemens can play in Nigeria’s budding power sector.

Nigeria is currently faced with a huge electricity supply gap with between 3000MW and 4000MW of power available for a population of about 170 million people. In 2010, the Federal Government introduced wide ranging reforms to privatise the existing Government owned utility companies and also to set in place commercial and regulatory mechanisms to attract private investments in the sector.

Alongside the successful

The duo held the 2nd edition of the IPP Forum which focused on fostering talks with Independent Power Plant developers and banks with the aim of highlighting the various roles Siemens can play in Nigeria’s budding power sector

completion of the ongoing privatization exercise, it is clear that the future and success of Nigeria’s Power sector lies in the giant strides which green field Independent power

production will deliver in the coming years. According to Mr. Lothar Balling, Executive VP GT Power Plant solutions, “Independent power producers will provide the

much anticipated solution to bridging Nigeria’s huge power generation deficit which has been created over the years”.

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he Federal Ministry of Power & Siemens Power Generation forum was set up to highlight the critical milestones and success factors for a successful IPP development. We will also share our understanding of the typical challenges being faced by IPP developers in Nigeria’s nascent electricity market and highlight the support and value Siemens can bring to the table.

In attendance at the workshop were the CONTINUES ON PAGE 21

2013 August, SweetcrudeReports

Power

Siemens hosts power forum to boost electricity infrastructure in Nigeria

Independent power plant

CONTINUED FROM PAGE 20 Honourable Minister of Power, Prof. Chinedu Nebo, representatives from the Nigerian Electricity Regulatory Commission and the Nigerian Bulk Electricity Trading Company. Also, several prospective IPP developers were in attendance. In total, about 120 participants were in attendance.

According to Prof. Nebo, “Siemens is a committed strategic development partner to the Ministry of Power and this collaborative effort is intended to stimulate project development efforts by the private sector that will impact positively on the development of power sector

infrastructure in Nigeria” Keynote presentations were also delivered by Siemens executives including Mr. Lothar Balling, Mr. Michael Lakota, MD/CEO Siemens Limited Nigeria, Mr. Marcus Weber, Sales Manager Power Plants Africa, Mr. Patrick Thomas, Sales Manager GT Service Africa and Ms. Doris Henrich, Manager, Siemens Financial Services.

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ccording to one of the participants,” This forum was very enlightening and it is very interesting for me to know that Siemens is committed not just to supply the turbines for my project but also willing to handhold me and enable my project

development with its technical, commercial and financial experience gathered from several projects across several other countries” Siemens is deeply committed to the development of the electricity sector in Nigeria and has been delivering sustainable solutions towards Nigeria’s infrastructure development and economic prosperity for over 50 years. Siemens built the 434MW Geregu I power plant and has also worked with several manufacturing companies to build captive power plants across the country. Geregu I Power plant is the best-in-class of the PHCN power plants; delivered on time and on

Siemens built the 434MW Geregu I power plant and has also worked with several manufacturing companies to build captive power plants across the country

budget. The Geregu Phase II project has also been successfully completed and commissioned in May 2013.

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Power

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Jos DISCO decries massive vandalism of PHCN facilities

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Afam power plant

Afam power plant gets buyer for $260m YEMIE ADEOYE

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he privatisation programme in the Nigerian power sector has recorded a boost as the Afam power plant got a US$260.5 million offer from Taleveras Group, a consortium comprising Rivers State Government and three foreign companies.

Acting Director of Electric Power Department of the Bureau of Public Enterprise, BPE, Alhaji Ibrahim Babagana, made the announcement at the financial bid opening for Kaduna Electricity Distribution Company and Afam Power Plc in Abuja.

Taleveras Group and Tes Power Limited were bidders for the Afam Power Plc, with the former emerging as preferred bidder and the later as reserve bidder.

They emerged as the

company with the highest offers, above the reserve price. Also, Northwest Power Ltd, a consortium comprising Dantata Investment and Securities Company emerged as the preferred bidder out of the six companies that bid for the Kaduna Distribution Company.

Babagana declared Northwest Power Ltd as the preferred bidder among the six bidding companies, with the highest Aggregate Technical, Commercial and Collection, ATC&C, loss reduction figure, of 29.26 per cent.

He also announced that LEDA Consortium emerged as reserve bidder with an ATC&C of 26.71 per cent.

ATC&C loss reduction as a basis for selection of preferred bidder instead of highest price offer was also

in the 10 distribution companies that were privatised earlier.

The consortia who lost out on the bids were Axis Power Distribution Ltd, NAHCO

Consortium, INCAR Ltd and Copper Consortium Ltd. Also speaking, Mr. Peterside, Chairman Technical Committee

Power Belt Atedo of the of the

rs. Vera Osuhor, the Managing Director of Jos Electricity Distribution Company, JEDC, has decried the massive vandalism of facilities of Power Holding Company of Nigeria, PHCN. She said the act was frustrating the quest for stable electricity supply to the people.

"We try to put everything in place to ensure stable supply and cover hitherto uncovered areas but vandals keep tampering with our facilities.

They are frustrating all our moves," Osuhor said in Jos. Osuhor, who spoke shortly after opening the PHCN new office complex in Langtang, Plateau State, called for stiff measures against the damage of electricity facilities and appealed to traditional rulers and vigilance groups to step up efforts to end the trend.

Osuhor said the trend had adverse consequences as participants were electrocuted, maimed or imprisoned, while innocent people were left in darkness. She called on security agencies to set up teams to check the sale of stolen PHCN facilities to discourage the thieves and their patrons.

Osuhor warned the people against making illegal electricity connections and refusal to pay bills, saying such activities were major obstacles to electricity supply.

National Council on Privatisation, NCP, said the ATC&C was chosen as criteria instead of they are competing in loss reduction.

BG estimates Tanzania gas reserves at 13Tcf

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he BG Group Plc has raised its estimate for total gross recoverable resources of natural gas from its Tanzania discoveries to around 13 trillion cubic feet.

The company said in a statement that the increase of the estimate from 10 trillion cubic feet underscores the region’s importance as one of the energy industry’s hottest new areas.

Neighbouring Mozambique with its discoveries of giant offshore natural gas fields aims to export its first cargoes of liquefied natural gas by 2018.

Analysts say the region is well placed to serve growing energy demand in Asian markets. The mounting volume of gas discoveries off the coast of East Africa has already stimulated a wave of multi-billion

dollar acquisitions in projects in Mozambique.

BG Group said it had its eighth consecutive gas discovery offshore Tanzania in July, with the Ngisi-1 exploration well located in Block 4.

The Ngisi well is the first to penetrate a reservoir section adjacent to the previously announced Pweza and Chewa discoveries in Block 4, opening up a new play in the tertiary formation of the northern block. BG Group is in the process of selecting a site for an onshore liquefied natural gas plant and said that process was progressing well.

The capacity of the terminal will be determined by further exploration and appraisal results across the company’s three offshore blocks.

2013 August, SweetcrudeReports

Power

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7,000 companies bid for 360 rural power jobs

A Community in the South Western part of Nigeria

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hief Executive Officer of the R u r a l Electrification Agency, Engr Kenneth Achugbu, has warned companies that are bidding for the 360 rural electrification contracts available with the agency to desist from mounting pressure on the organisation in a bid to secure the contracts.

Achugbu, who made this known at the public opening of the bids in Abuja, disclosed that 7,000 companies submitted bids for the 360 contracts.

"Don't put pressures on us for favours related to this procurement exercise because we have none to offer. You don’t need a letter from powers and principalities to get a contract award from REA if you have done the right things in your submissions,” he told the bidders.

Maintaining that the deadline for bids submission was extended twice in order to accommodate wider public

You don’t need a letter from powers and principalities to get a contract award from REA if you have done the right things in your submissions,” he told the bidders

to participation, Achugbu said: “Our agency has had a sordid and unpalatable history of being closed down because of an improperly conducted procurement process. It is only a fool who doesn’t learn from mistakes of his predecessors. We are therefore committed to playing the procurement game strictly in accordance with rules.”

According to him, with the conduct of the bids opening, the bids would be next be evaluated by a committee

after which successful companies, which met the required terms and conditions, would be salected.

The Rural Electrification Agency has the responsibility for providing electricity to rural communities outside the national power grid.

Following a corruption scandal that engulfed the agency in 2009, its operations were temporarily suspended by the F federal Government, but it was brought back to life in 2011.

Eko Disco promises 20-hour power delivery

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ko DISCO has promised to deliver at least 20 hours power supply by December, which will be increased to 22 hours in January, 2014.

The Chief Executive Officer, Mr. Oladele Amoda, made the disclosure at the fourth edition of the company’s Customer Parliament, adding that efforts are ongoing to ensure that customers within the network are served better.

“Customers normally expect that when they get to their houses, there should be power supply and we are ready to provide these services. We are working to give our customers 20 hours of electricity every day on the average by December, and 22 hours by January next year," he said.

Meanwhile efforts are also ongoing to ensure that electricity consumers within the Eko distribution zone are adequately metered.

Two indigenous firms, MOMAS System Nigeria Ltd and MOJEC International, have thrown their weight behind the Credited Advance Payment Implementation, CAPMI Scheme, in collaboration with the Eko Electricity Distribution Company.

The scheme was officially launched by the Eko DISCO of the Power Holding Company of Nigeria, PHCN, last week in Lagos.

The Eko Disco said it agreed to partner with the indigenous firms after many months of consultation with the Nigeria Electricity Regulatory Commission, NERC, and other relevant stakeholders in the power sector.

“CAPMI has come to stay, we will make it work and it is a way to relieve consumers from the constant ‘crazy bill’ and estimated billing, but as a manufacturing company our aim is to key into the policy of the scheme.

2013 August, SweetcrudeReports

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2013 August, SweetcrudeReports

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Finance

2013 August, SweetcrudeReports

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Western Union launches mobile money service in Nigeria

Mobile money service

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estern U n i o n h a s partnere d with an African payment processing specialist, eTranzact, to

launch a mobile money service in Nigeria.

The US-based company believes the facility will help boost financial inclusion and provide a more convenient means of money transfer for

Nigerians, and the entire Africa.

Nigeria mobile phone penetration rate stands at 70.64 percent, as of June 2013, according to figures provided by Informa’s World

Cellular Information Service.

In contrast, just 21 percent of the country’s population has a bank account, according to the World Bank. The financial service

Redressing Naira will curb counterfeiting, says Sanusi

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edesigning the c o u n t r y ’ s currency would curb the activities of counterfeiters, according to Central Bank of Nigeria, CBN, governor, Malam Sanusi Lamido Sanusi.

He said in Abuja during an interactive session with members of the House of Representatives Committee on Banking and Currency. “One of the reasons we wanted to redesign the currency a few months ago was because many of our notes had been in existence for upward of eight or even

ten years.

“New best practice is that within a period of five to eight years, you redesign the currency because after that period counterfeiters tend to catch up”, he said.

Stressing that to redesign the currency was in line with global best practices, he noted that the recent proposal to redesign the currency was rejected.

The CBN boss acknowledged that there were negligible cases of counterfeiting of the naira adding that having counterfeit notes on Automated Teller Machines, ATM, equipped with censors were rare.

On high interest rates, Sanusi said the CBN Act limited its duties to the delivery of price stability; protection of the external value of the currency; managing the country’s reserves and ensuring financial stability.

The apex bank governor stated that the delivery of low interest rates was not feasible due to the harsh business environment in the country. ``How low do you have to bring down interest rates for banks to lend to a manufacturer that does not have power; or for a bank to lend to a company that

operates in an environment that does not have security?

“It is not about moving interest rate down or up; most of the small and medium small scale enterprises do not have access to credits because the environment does not allow businesses to thrive,” he said.

Sanusi held that the likelihood of the interest rates coming down in the current environment was low. He said the apex bank had put several monetary measures in place to ensure stability in the economy.

company hopes to bridge this divide by providing users with a mobile platform to pay bills, purchase merchandises online, top up mobile credit and make third party transfers.

“We are very pleased to launch our new relationship with eTranzact to increase the number of access points for consumers to use our services worldwide, facilitate financial inclusion, and provide convenient mobile solutions for those who want new methods for money transfer transactions,” said Aida Diarra, Vice President for North, Central and West Africa at Western Union.

The global money transfer service embarked on a recent multichannel approach, after being criticized by stakeholders for it’s over reliance on an agent model in providing financial services.

Amongst its recent strategies is the partnership with eTranzact: the collaboration allows customers of the eTranzact Mobile Money platform, PocketMoni, to interact with Western Union on their mobile phones, receiving Western Union mobile money transfer from 23 ‘sender’ countries around the world.

“We are excited to work with Western Union and leverage the power of their global network on behalf of consumers across Nigeria,” said Valentine Obi, chief executive at eTranzact.

PocketMoni is a mobile payment solution designed to allow users conduct financial transactions anytime, anywhere, from your phone.

2013 August, SweetcrudeReports

Finance

Central Bank of Nigeria,head office, Abuja

CBN recovers N9bn excess charges by banks …Urges Abia to end IGR woes with cashless policy

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he Central B a n k o f Nigeria, CBN, h a s s a i d through its newly- created department of consumer protection, it had assisted customers to recover over N9 billion excess charges that were imposed on them by commercial banks.

The Branch Controller, CBN, Abeokuta, Mr. Olumuyiwa Joawo, said this during a sensitisation forum organised by the consumer protection department of the CBN in Ogun State.

J o a w o s a i d t h e sensitisation exercise would ensure a level-playing field for all concerned. He added: “It is worthy of note that within the last one year, in

pursuance of consumer protection mandate, the CBN, through the department was able to assist consumers to recover over N9 billion excess

charges by banks.”

The central bank official also said public confidence and consumer trust was being entrenched in the

economy, arguing that various initiatives of the CBN would help to spur growth in the economy.

On his part, the Deputy

27

Governor, Financial System Stability, CBN, Dr. Kingsley Moghalu, said the central bank was desirous of raising the level of awareness and understanding of financial products and services as well as to enhance efficient use of financial resources.

He further said: “In pursuit of the financial inclusion strategy, we have developed a Financial Literacy Framework, a document which articulates a strategic direction for a multistakeholder approach to the delivery of financial education programs across different target groups of the Nigerian population.”

Meanwhile, the CBN Wednesday also carried out an enlightenment campaign on the cashless policy in Abia state, urging the state government to embrace the policy to shore up its internally generated revenue, IGR, which is presently very low.

The Deputy Governor (Operations), CBN, Mr. Tunde Lemo, who led the CBN team to Umuahia said the CBN was ready to collaborate with the Abia state to enable the state enjoy the full benefits of the cashless policy.

Lemo said Lagos state that adopted the policy earlier now had monthly IGR of about N29 billion as well as Ogun state, where four educational institutions had adopted the policy.

Abia was among the five states where the policy aimed at reducing the dominance of cash in the system was extended to since July 1, 2013. The implementation of charges above the prescribed limited was shifted to October 1, 2013.

Pan Ocean loses $4.96bn to oil theft, pipeline vandalism

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an Ocean O i l Corporation , an indigenous oil exploration and producing company, said its operations were hit by crude oil theft and pipeline vandalism in the last four years, causing it

to lose over $4.96 billion within the period.

“Pan Ocean lost a lot of crude through theft and vandalism in four years. The company lost over 40,000 barrels of daily in the last four days. That is from April 2006 to 2010,” Mr. Toni Ezeukwu, General Manager of the company, said.

He spoke at the recent N i g e r i a A n n u a l International Conference and Exhibition, NAICE, organised by the Society of Petroleum Engineers, SPE, saying his company lost about 40,000 barrels of oil daily to the ugly incidents between April 2006 and 2010.

According to him, Pan Ocean has been managing the problem through the involvement of its host communities. To this end, he said, the company engaged over 22 host communities in dialogue and for them to provide surveillance on the pipelines.

2013 August, SweetcrudeReports

Finance

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Nigeria reaps $143bn from oil, gas in 3yrs - NEITI Audit

Gas plant

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bout $143.5 b i l l i o n accrued to the coffers of the federal and other governments between 2009 to 2011, going by figures by the Nigeria Extractive Industries Transparency Initiative, NEITI. NEITI said in a report reconciling financial movement in the Nigerian oil and gas industry, maintaining that this is against 2006-2008 audit record of $148.8 billion.

The drop in figure, according to NEITI, is due to a 50 percent reduction in average oil price from $100 per barrel in 2008 to $63 in 2009.

A whopping $131.7 billion or 91.8 percent of total funds, went into the Federation Account as against $143.8 billion or 96.6 percent of the 2006-2008 audit. About $1 billion or 1.1 percent of the total funds went into the

coffers of the states as against $552 million or 0.4 percent of the previous audit.

T h e N i g e r D e l t a Development Commission, NDDC, the Tertiary Education Tax, TETFUND, and other Federal Government agencies received $3.2 billion compared to $2.5 billion in 2006-2008.

The NEITI report also stated that flows to NDDC are directly made to the agency and outside the purview of the National Assembly through the Appropriation Act whilst that of the TETFUND is paid to a designated account in the Office of the Accountant General of the Federation, OAGF, as stipulated by the enabling act.

Funds from the sale of the nation’s crude oil and gas amounted to $81.9 billion, about 57 percent of the total funds as against $97.6 billion or 66 percent of the total flows in the previous audit. The amount of export crude oil and gas sales to total sales of crude oil and gas reduced to 53

percent ($52.8 billion) in the period 2009-2011, when compared to 62 percent ($65.7billion) from 20062008.

But, the amount of the domestic crude oil and gas sales increased from 35 percent ($37.2billion) to 42

percent ($41.5 billion). The report also showed that crude oil and gas sales flows to the Federation Account are affected by the alternative funding arrangements such as Modified Carry Agreements adopted to support

production activities in the event of inadequate normal joint venture cash call funding.

Direct entitlements (in kind payments) are made from production to cover production costs as well as for funding repayments, but there are slight increases in the financial flows from gas and feedstock as a result of increased gas processing, reduction of gas flares and the utilization of feedstock

by Nigeria Liquefied Natural Gas. The report noted that no bid rounds were conducted during the period under review, hence the flows reported for signature bonuses arose from the payment of arrears of signature bonuses. Other flows to the Federation Account (such as company income tax and value added tax) showed a consistent relationship in the financial flows increasing from 2 percent to 4 percent.

The drop in company income tax, CIT, receipts between 2010 and 2011 is said to be due to the timing difference in the payment of CIT on gas of $128.7 million

by Mobil Producing Nigeria Unlimited for 2011 in July 2012.

The report said the financial flows from NLNG include dividends and repayment of loans of which an amount of $4.84 billion was received by NNPC.

Fidelity Bank posts N11.2bn profit in six months

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idelity Bank Plc achieved a profit before tax of N11.2 billion for the first half of the year ended June 30, 2013.

According to the bank’s unaudited financial report, the amount represented an increase by 13.3 per cent, compared to the N9.88 billion posted in the comparable period of 2012.

Equally, Fidelity

Bank’s gross earnings increased by 17.4 per cent to N62.90 billion in the period under review, from N53.58 billion last year.

Its operating expenses, however, inched up by 2.3 per cent to N23.72 billion as at June 30, 2013, from N23.18 billion recorded last year despite the additional impact from increase in industry resolution cost to 0.5 per cent from 0.3 per cent of total assets in 2012.

Also, Fidelity Bank’s total assets increased by 5.6 per cent to N965.79 billion as at

June 30, 2013, from N914.36 billion as at December 31, 2012, while total customer deposits dropped by 1.5 per cent from N716.75 billion as at last year, to N706.17 billion as at June 30, 2013.

According to Managing Director and Chief Executive Officer, Fidelity Bank Plc, Mr. Reginald Ihejiahi, the bank built on the success of the last financial year by continuing to expand its tentacles across various markets and customer segments in the economy.

Labour

2013 August, SweetcrudeReports

29

OLUONYE KONYEGWAEHI

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here is mounting tension and apprehension in the Nigerian Power sector that organised labour is mobilising members for a showdown with government over apparent hide and seek game concerning workers’ entitlements and rights ahead of new investors’ takeover of the assets of the Power Holding Company of Nigeria, PHCN. Besides the fact that government seems to be playing games with the terminal benefits of the workers after both parties reached agreement in November 2012, according to labour, the government has continued to undermine industrial peace in the industry.

A 14-day ultimatum issued to the Minister of Power and copied the Minister of Labour and Productivity, over some grievances, has expired with government appearing unperturbed.

Angered by perceived carefree attitude on the part of the government, leaders of the National Union of Electricity Employees, NUEE, investigation revealed, have begun massive mobilisation of workers for a major confrontation with government.

In a petition to the Minister of Power which contains the ultimatum, the General Secretary of NUEE, Comrade Joseph Ajaero, said: “We have been watching with keen interest the issues surrounding staff promotion in the recent time in Power Holding Company of Nigeria ( P H C N ) a n d t h e manipulations associated with it.

“It is quite amazing that some staff especially at the top echelon were promoted without due adherence to Federal Character Policy, Public Service Rules and PHCN Conditions of Service.

We also have it in good authority that by July 2013, the Ministry had commenced the promotion of a selected few, which has witnessed the bribery of union leaders with promotion without recommendation.”

He added: “Going by PHCN’s Conditions of Service, it is expected that by June 2013, promotion of workers in the power sector would have been conducted.

“Therefore, we cannot but request that promotion of all eligible staff in PHCN by two

PHCN workers

Fresh industrial unrest looms in Power Sector …Labour accuses govt of plot to short change workers grade levels be carried out urgently since this has become a norm. Besides, you would recall that the agreement and severance calculations signed between the Unions and Federal Government captured up to June 2012 but due to Government’s delay, another year has passed going by today’s date.

“Consequently, we demand that workers entitlement for the one year not captured by the agreement should be computed pro-rata and paid to staff before full severance payment is effected. But should the Ministry remain evasive in resolving these issues at the end of fourteen (14) days, including the

reversal of illegal reappointment of the Director General of National Power Training Institute of Nigeria (NAPTIN), which had been reported to your office, the Union will not be held responsible for any industrial unrest this may precipitate.”

It was gathered that the ultimatum has since elapsed without government’s positive action and leaders of NUEE are not taking it lightly.

Speaking on the development, Ajaero declared that the workers would confront the government on the issues

any moment from now, citing other disturbing actions by government that clearly show not only insincerity, but also, shady intentions.

He said “Any moment from now, we are going to engage the government in a show down because those that run Power Ministry believe we are inconsequential. We will write them letters, they will not acknowledge it. They feel too big to acknowledge letters. We have written series of letters on some ugly developments in the sector but they have refused to even acknowledge them or address issues raised.

“Part of the disturbing developments, is the issue of the Pension. As part of the agreement reached last year, our members are to open Retirement Saving Accounts, RSAs with P e n s i o n F u n d Administrators, PFAs, for them to key into the Contributory Pension Scheme, CPS. They have done that and our agreement is clear on how the remittances should be made. We have the contribution expected from to commence from 2004, the one Government is to pay and the one that management is to pay with current contribution that has been calculated.

2013 August, SweetcrudeReports

Labour

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NUPENG, PENGASSAN protest exclusion from PIB public hearing

Labour leaders

OLUONYE KONYEGWAEHI

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igeria Union of Petroleum and Natural Gas Workers, NUPENG, and Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, have faulted the manner the Senate Joint Committee on Petroleum Industry Bill,

PIB, held its public hearing without the participation of some critical stakeholders in the oil and gas industry to present their positions.

NUPENG and PENGASSAN are particularly shocked and annoyed, arguing that the action by the Senate Committee to exclude some stakeholders especially the labour unions in the sector was deliberate and not in the

interest of the nation.

They demanded that their request to make their presentation through a properly conducted public hearing be granted in the interest of industrial peace, harmony and to rekindle their confidence as well as those of other Nigerians in the PIB legislative process.

It would be recalled that in a letter sent out by the

Senate Committee of PIB to stakeholders, the two days public hearing was earlier scheduled for July 15 and 16, 2013, but later postponed the event to July 18 and 19, 2013.

The postponement was only communicated to the stakeholders through media reports in some dailies.

In a protest letter by the General Secretaries of

Compensation: PENGASSAN tasks employers on cost of living OLUONYE KONYEGWAEHI

T

he umbrella body for senior worker in the Nigeria’s oil and gas industry, Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, has called on employers of labour in the country to consider cost of living and focus less on cost of labour as a major factor while negotiating compensation with their employees.

The association made the

call during a two- week leadership training in Corona, California, United States of America.

A s t a t e m e n t b y PENGASSAN quoted president of the association, Mr Babatunde Ogun, as making the call in his opening remarks during the training with the theme: “Capacity building on labour management of compensation and benefits competitiveness in the oil and gas industry”.

Calling on employers to be humane during negotiation on

compensation, Ogun argued that looking at the cost of living during negotiation would make both parties to arrive at a ‘win-win’ point, with each party being fulfilled and satisfied.

“Most times during negotiation, employers only look at how much they have been spending and the increase that such negotiation will have on cost of labour. The over-head cost becomes a paramount thing rather than the cost of living that forms one of the determinants of welfare of their employees.

“The cost of living changes every time and it is being

determined by many factors including social, political and economic factors in the country. This impact not only on individual employee’s life but also on their employment life and as well affects their productivity at work.

Employers should consider all factors that contribute to cost of living as paramount during negotiation on compensation and benefits so as to make their workers more productive and at the same time achieve both organisation goals and individual self-realisation,” he said.

PENGASSAN and NUPENG, Comrade Bayo Olowoshile and Comrade Isaac Aberare, respectively, submitted to the Secretariat of the Committee and received by a staff at the secretariat, Mr. Lucas Jonah, the two unions said the letter sent to them indicated that they would be presenting their positions on the second day of the public hearing.

They alleged that the committee ended the public hearing to protect personal interest of some people but denied many individuals and groups, including the unions, who have the national interest at heart, the opportunity to make their presentations.

The letter read in part, “We refer to the letter of invitation dated 3rd July 2013 and the subsequent news and advertorial in the Newspapers for the Senate Public Hearing organised by the Joint Senate Committee on the Petroleum Industry Bill (PIB) which was initially scheduled for Tuesday July 16 2013 and Wednesday July 17, 2013, in which NUPENG-PENGASSAN was scheduled to make presentation on Day 2, that is, Wednesday July 17, 2013.

2013 August, SweetcrudeReports

Labour

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House of Reps in session

NLC commends House of Reps over Minimum wage OLUONYE KONYEGWAEHI

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igeria Labour Congress, NLC, has commended t h e leadership and members of t h e H o u s e o f Representatives for not only retaining the national minimum wage on the exclusive legislative list, but giving its word to ensure it remained so, contrary to the position of members of the Senate.

NLC, in a statement by its President, Abdulwaheed Omar, said the way members of the house concluded the constitution amendment exercise which covered 85 clauses, was a mark of selflessness, courage and patriotism and should be emulated by those elected to serve the public in whatever capacity.

According to NLC, the process leading to the voting on the amendment clauses was painstakingly thorough, deep and enjoyed broad ownership, saying “Congress notes that there was a d e m o n s t r a b l e determination on the part of the House to vote in spite of suspicious glitches, and the process was transparent and devoid of any acrimony or self-recrimination.

Similarly, the decisions of

the House were bold, patriotic and people-oriented as well as send a signal that the House could be independent-minded, and could be relied upon to support the interest of the working people and other poor Nigerians. It is instructive that the House did not only retain the National Minimum Wage on the Exclusive List,

but gave its word to ensure it remains there.”

“The House should also be commended for observing due process by way of stepping down two clause because public hearing had not been conducted on them.

This further illustrates the openness of the House and their determination not only

to do what is right but to lead by example.

“The Congress holds the view that if the example of the House is followed in subsequent amendments, it would be possible to have a people- constitution.”

NLC in the statement added “we seize this opportunity to renew our

call to political combatants in the country to play by the rules, for in the long run, the rule of law and respect for the wishes of the people are what will advance the cause of our nation and not impunity or brigandage.

“Congress also stands ready to defend and protect the constitution amendment as reflected by the House,” he said.

SURE-P creates 21,000 jobs – Minister OLUONYE KONYEGWAEHI

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he Subsidy Reinvestme n t a n d Empowerment Programme, SUREP, has created over 2 1 , 0 0 0 j o b opportunities t h r o u g h i t s Community Services Women and Youth Employment, CSWYE, in the North-West zone of the country, Labour and Productivity Minister, Chief Emeka Wogu, has said.

Nwogu made this known during a visit, together with the Minister of Youth Development, Inuwa Abdukadir, and his Ministry of Environment counterpart, Hajia Hadiza Ibrahim Mailafa, the Special Adviser to Kaduna State governor, Alhaji Mukhtar Yero.

They embarked on the visit as part of sensitisation and appraisal of the CSWYE project.

The minister said in a statement by Olowookere Samuel, Assistant Director (Press), in the Labour Ministry: “The present administration of President Goodluck Ebele Jonathan, is working and putting the

masses first in its development plans.

“In the North-West Geopolitical zone, a total of 21, 000 women, youths and people living with disabilities are benefiting from the Community Services Women and Youths Employment Project”.

Speaking further on the gains of SURE-P in the North-west geo-political zone, he said these include the Kano Maiduguri Road dual-carriage way; construction of bridges, the Abuja-Kaduna Railway modernisation project, the Maternal and Child Health projects as well as over

4 , 1 3 2 k m r o a d maintenance project.

The minister lauded the implementation process of the CSWYE project in Kaduna State, saying: “The state, though not a pilot state has done very w e l l o n t h e implementation process.

The speed of submission of time sheets for the payment of stipends to beneficiaries has been commendable, and payment has been made up to June 2013.”

In his remarks, Governor Yero urged the Federal Government to ensure the sustainability of the project, which, accordinmg to him, would take the youths off the streets.

Solid Mineral

2013 August, SweetcrudeReports

Coal minning site

Govt to tap enormous coal resources for power OSCARLINE ONWUEMENYI

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BUJA - The F e d e r a l Government may have concluded plans to intensify its coal-topower project in order to diversify sources of power generation in the country.

This position is coming at the heels of the report of the Ministerial Committee on Coal to Power Project, set up by the Ministry of Mines and Steel Development, which called for the revitalization of coal industry for wide range of uses particularly for power generation in order to meet the energy requirements of the masses.

According to the report presented by the Chairman

The Minister identified power as one of the critical infrastructural requirements of mining, noting that “Unless we solve the power problem, we can hardly make progress in any other sector of the economy

of Committee on Coal to Power Project and the DirectorGeneral, Mining Cadastre Office, Engr. Mohammed Amate, to the Minister of Mines and Steel Development in Abuja, the coal to power initiative being adopted by the present administration seems

to be the simplest, most economical and sustainable option for the country.

The committee proposed a two-pronged programme aimed at accelerating the exploitation of Nigeria’s coal resource for power generation which includes

committed efforts for the development of the privatized/concessioned coal blocks(Low Hanging Fruits)i.e Ogboyega I and II and Okaba coal blocks, as well as development of other identified coal resource blocks with little or no geosciences data.

The committee further recommended the need to carry out further geosciences work to generate more data on the available coal resource in the country which would make them attractive to prospective investors and enhance the development of the coal resource for power generation and other uses.

Engr. Amate expressed optimism that if the observations and

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recommendations proffered in their report are considered and fully implemented, Nigeria would be able to meet the objective of achieving the security of energy within the shortest period of time.

The Minister of Mines and Steel Development, Arc. Musa Mohammed Sada in his remarks commended the commitment of the Ministerial Committee and their ability to submit a report within the time frame.

The Minister reiterated the Federal Government’s desire to generate up to 30% of electricity from coal fired power plants to meet the power requirements of the country.

He noted that the Ministerial Committee on Coal to power project was set up by the ministry so as to ensure all information relating to all coal locations in the country are harnessed in one place as well as “to know the level of information we have on them and what level of information we require.”

Arc. Sada also noted that the type and quality of coal resource in Nigeria is of power producing type which is widely acknowledged adding that, about two private investors had presently indicated interests in taking up some of the coal locations we have in the country.

He disclosed that Special Mining Retreat which would be chaired by President Goodluck Jonathan would come up in the country this month, noting that, coal to power project will be the focal point of discussion at the retreat.

The Minister identified power as one of the critical i n f r a s t r u c t u r a l requirements of mining, noting that “Unless we solve the power problem, we can hardly make progress in any other sector of the economy.”

He expressed his ministry’s determination to collaborate with other relevant ministries, departments and agencies of government in ensuring that the coal to power project is achieved.

The minister thanked the committee for a job well done and assured them that the report would serve as a springboard for the ministry to move forward.

2013 August, SweetcrudeReports

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LEAD POISONING:

FG, foreign agencies complete remediation in Zamfara OSCARLINE ONWUEMENYI

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ulti-lateral interventio n in the Zamfara l e a d poisoning of year 2010 has attained remarkable achievements particularly i n t h e a r e a s o f e n v i r o n m e n t a l remediation, sensitisation on safer mining practice and treatment of the affected victims, the international agency, Medicins Sans Frontiers (Doctors Without Borders), has said.

Michelle Chouinard, Country Head of Medecins Sans Frontieres, and Simba Tirima, Director of Field Operations, TerraGraphics International Foundation, disclosed this during a visit to the Ministry of Mines and Steel Development in Abuja. They were at the ministry to inform the minister that the remediation exercise at Bagega in Anka Local Government Area of Zamfara State had been completed and to discuss s tra teg ies fo r f urt he r alliances to prevent future occurrence of the poisoning in Zamfara and in any other state of the country.

T e r r a G r a p h i c s International Foundation is a United States-based company that partnered with the Federal Ministry of Environment to handle the remediation programme at Bagega as a result of the lead poison incident while Medecins Sans Frontieres is involved in the treatment of the victims of the lead poison.

Tirima said he and Chouinard were impressed with what the Federal Government was doing on the safer mining programme and reiterated their desire for continuous collaboration with the ministry and other stakeholders involved in the various intervention programmes.

Meanwhile, the Federal Government has

Officials from the Federal Ministry of Water Resources collect water from a pond to test for lead contamination

We are scaling up our programme of sensitisation on safer mining to prevent future occurrence of lead poisoning in Zamfara State and in other states of the country

announced plans to increase its budget to extend the safer mining programme to many states of the federation.

Permanent Secretary in the Ministry of Mines and Steel Development, Mr. Linus Awute, who received the team commended them

for their various roles in stopping the death incidents occasioned by the lead poison.

"We are scaling up our programme of sensitization on safer mining to prevent future occurrence of lead poisoning in Zamfara State

and in other states of the country. Accordingly, we have lined up some ambitious programmes for effective implementation of our work plan on a sustainable basis.

"The Ministry’s 2013 budget has a funding window for use in widening the scope of our mining extension services and inspectorate activities which are on-going," he said.

Mr. Awute also disclosed that the Ministry of Mines and Steel Development had procured safety kits and wears for safer mining for distribution to the artisanal and small scale miners at the critical flash points in Zamfara State w h e r e f i e l d demonstrations on best mining practices are being carried out by field officers

of the Ministry.

He added that the wet milling and igoli machines for the safer mining programme ordered from South Africa would arrive the country soonest. On arrival, the safer alternative equipment for processing of gold ores would be installed at three mineral processing centres in Bagega, Kwali and Maru.

According to the Permanent Secretary, three outposts would be constructed at Bagega, Kwali and Maru in Zamfara State, adding that the outpost at Bagega had already been completed with a mineral buying centre and work was in progress for the completion of the other two outposts.

Freight

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MRS-Oil-tank-farm-fire-explosion

Dockworkers raise alarm over tank farms in Lagos

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ockworkers operating at the Tin Can Island Port in Lagos have raised alarm over what they described as illegal activities at the jetties of some of the tank farms at Ibafon.

The workers told SweetcrudeReports in Lagos that some of the tank farm operators engaged the services of indigenes of the Igbologun, Snake Island and Kirikiri; all neighbouring communities, to carry out

labour activities that are meant for dockworkers.

According to them, the workers employed to do the job meant for the dockworkers are not legally registered with the Nigerian Maritime Administration and Safety Agency, NIMASA. They said the NIMASA Act of 2007 clearly stipulates that all dockworkers should register with the maritime regulatory agency.

The aggrieved dockworkers urged the Federal Government through the

Minister of Transport to contract the private jetties to stevedoring firms because according to them, there would be more jobs for them from the maritime industry, and safety measures would be given priority.

Also, they alleged that the indigenes (non-dockworkers) from Kirikiri community and Snake Island are paid N17,000 a month without any condition of services attached to the terms of employment.

The dockworkers alleged

that apart from Ascon Oil and Gas, Gulf Treasure, Sahara, Aquitane, Total and Zenon which are contracted to Micura Stevedoring Services Limited, the remaining tank farm operators do not engage the services of dockworkers, rather, they employ the services of the community youths.

They noted that the youths from the neighbouring communities had threatened to disrupt operations at the tank farms

last year which eventually led to their being engaged, but affirmed that it is illegal on the part of the operators to engage their services based on the provisions of NIMASA Act 2007.

The dockworkers also alleged that the tank farm operators do not follow standards because of the illegal workers experience involved in jetty operations, alleging further that there is no insurance cover for the workers, no payment of check-up dues and no medical or health.

2013 August, SweetcrudeReports

Freight

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Clearing goods at Nigerian ports requires 79 signatures —Report TOJU VINCENT

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ore facts are emerging as to why the cost of doing business at Nigerian seaports has remained high seven years after the Federal Government’s port reform programme.

A Corruption Risk Assessment, CRA, report released by the Independent Corrupt Practices and other Related Offences Commission, ICPC; the Technical Unit on Governance and AntiCorruption, TUGAR, and the Bureau of Public Procurement, BPP, with the support of United Nations Development Programme, UNDP, on Nigerian ports has revealed that an importer or agent will require a minimum of 79 signatures of government officials to clear his/her goods at the nation’s gateways.

This mind-boggling revelation came to the fore last when the ICPC, TUGAR and BPP met with stakeholders in the maritime industry in Apapa, Lagos, to validate the CRA report.

One of the consultants to the CRA study who presented the report to stakeholders at the validation meeting, Constantine Palicarsky, also identified lack of standard operation procedure by government agencies as a major hindrance to port operations thus giving rise to corruption in the system.

“It takes 79 signatures to process a cargo in some ports, while in other ports it takes up to 100 signatures.

This shows that the process is not harmonised giving rise to corruption,” he observed.

Palicarsky also identified rationalisation as one of the reasons why corruption persists at the ports, saying that people rationalize corrupt practices, giving excuses why they should not be held culpable.

“If we cannot address rationalization, we cannot address corruption,” he told the stakeholders comprising of representatives of Nigeria Customs Service, NCS, Nigerian Shippers’ Council, NSC, Nigeria Immigration Service, NIS, Standards Organization of Nigeria, SON, National Agency for Food & Drug Administration

Tin-can port

Control, NAFDAC, and freight forwarders among others.

He also identified ineffective administrative practices and weak institutions as major causes of corruption in the nation’s ports.

Other causes of corruption in the system, according to the report, include: widespread poverty with over 70 per cent of Nigerians living below poverty line, serious security problems and lack of independent institution where corruption occurring in the ports can be reported.

The report also identified huge discretionary powers enjoyed and exercised by officials of government agencies as a major source of corrupt practices at the ports.

Palicarsky noted that the CRA findings confirmed that government officials in the port not only enjoy huge discretionary powers but are also able to delay indefinitely the required signing of

The validation meeting was aimed at bringing together stakeholders and port operators to make input and validate the findings of the assessment report conducted by the three bodies documents without consequence.

Chairman of the ICPC, Mr. Ekpo Nta, in his address at the event, said that the effort of his commission, aimed at battling corruption at the nation’s seaport, should not be misconstrued for a scheme to join the multitude of government agencies constituting nuisance in the cargo clearance process.

He said the validation

meeting was aimed at bringing together stakeholders and port operators to make input and validate the findings of the assessment report conducted by the three bodies.

The ICPC boss also told stakeholders that the Commission has been empowered to seize property acquired through ill-gotten wealth.

He said such property would be seized by issuing a gazette notice demanding the source of income from the owners.

The CRA, conducted in six major Nigerian ports including the Lagos Port Complex, LPC, Apapa, Tincan Island Port, Port Harcourt Port, Onne Port, Warri Port and Calabar Port is a prevention tool which interrogates processes and procedures in a given system as well as identify areas which are vulnerable to corruption with a view to providing recommendations.

The ICPC boss said that the Maritime AntiCorruption Network, MACN, had identified Nigeria as one of the countries with corruption prone-systems in the port sector.

This, he said, led to the selection of Nigerian ports for a pilot CRA.

2013 August, SweetcrudeReports

Freight

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A scanning machine at the port

Customs confirms inefficient scanning machines at Seme border TOJU VINCENT

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he Seme border C u s t o m s Command of the N i g e r i a C u s t o m s Service, NCS, has confirmed that scanning machines at the Seme border in Lagos are inefficient and that the situation was beginning to affect their operations.

Disclosing this to newsmen in Lagos, the Command’s Comptroller, Othman Abdu Saleh, said the management of Globalscan has been economical with the truth concerning the issue of scanning operations in Seme border.

It would be recalled that the management of Globalscan System Limited had defended the efficiency of its scanner saying that they were manufactured by one of the best detection companies in the world.

The Command stated that, sometimes, for up to four days in a week, the scanner will breakdown and remain nonfunctional.

Saleh maintained that he did not know what to believe as the cause of the inefficiency in the scanning system, whether it is the generator attached to the scanning machine or the scanner itself that is faulty because the owners of the equipment had not been truthful in the situation.

Besides that Customs operations have been hampered, agents are also lamenting the inefficient scanning machines at Seme border.

He disclosed that most times, the Command had to resort to 100 per cent physical examination of cargoes.

He said: “I thought the scanning machine had its own separate generator different from the one that powers the entire premises. My officer at

There was a time we had serious problem because government said all goods coming through the border should be containerised and for this reason operations were suspended for two months the scanning site came and said the scanner has been down for two days.

“At a point we even told importers to come to work on Saturday, but they refused to show up because they are not sure of the scanner. There was a time we had serious problem because government said all goods coming through the border should be containerised and

for this reason operations were suspended for two months.

“By the time, government said that these trucks should be reduced to international standard and for that reason there was a lot of trucks at the border trying to adjust to the new policy. Do not forget the fact that the scanner is a mobile scanner.

“There were times I had to call the Comptroller-General to give me express permission to carry out physical examination of these trucks and containers because the scanners were not working.

“After most of the backlog had been cleared, we even asked them to come to work on Saturday. There is no week that this mobile scanner will not collapse, I remember about two weeks ago, the scanner was don for four days and when I asked what the problem was I was told that it was the generator.

“I actually thought the scanner had its own generator and another one for the premises. As for the fixed scanner, it has been test run but it has not been put to use and when we asked them they said they are waiting for certification”.

2013 August, SweetcrudeReports

Freight

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Agents lament system breakdown in Customs . . . Customs officers test run scanning operation

Control room at the port

TOJU VINCENT

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ustoms licensed agents have d e c r i e d incessant breakdown in the computer server at the Tin-Can Island Port, a development that sometime make cargoes run into unnecessary demurrage. The agents alleged sabotage on the part of the information technology firm contracted to assist in its reform process.

Speaking at the justconcluded colloquium organised by the Maritime Reporters Congress of Nigeria, MARCON, former Chairman of the Association

of Licensed Customs Agents, ANLCA, Mr. Kayode Farinto said the trend of system breakdown is not new.

Farinto stated that the issue of sabotage could not be ruled out as the information technology consultant is wary of the fact that its contract was running out, adding that it would do everything possible to remain relevant.

The former ANLCA boss explained that because of the continuous system failure, duty payments are not reflected in the Customs systems sometimes for days.

He disclosed that sometimes the computer server at TinCan will breakdown and remain down for as much as

three to four days.

Speaking in similar vein, the Secretary General of the National Approved Government Freight Forwarders, NAGAFF, Mr. Increase Uche said that system failure is a daily occurrence..

The Technical Supervisor of the Nigeria Customs Service at the Tin-Can Island Port Command Nasiru Isiyaku said that the breakdown of the server is sabotage adding that the rate at which the frequency system fluctuates is too high.

Mr. Chris Osunkwo, the Command Public Relations officer s a i d t h a t such situation is only experienced

when there is heavy rain fall or strong wind.

Osunkwo also explained that it is at such times that duty payments are not reflected because such payments hang until they drop into Customs system.

He further explained that the situation arise because of the involvement of a third party (inter switch) that facilitate the interconnectivity between the banks and the Automated System for Customs Data, ASYCUDA. “Although, sabotage cannot be ruled out, the rate at the system fluctuates has become something else�.Osunkwo said.

Meanwhile, officers of the Nigeria Customs Service has commenced scanning operations at the Tin-Can Island port ahead of the December deadline for the service providers to hand over the operations.

Disclosing this to newsmen in Lagos, Customs spokesman, Mr. Adewale Adeniyi said that the Command was chosen for strategic reasons.

Adeniyi also disclosed that the pilot project of the transition from Risk Assessment Report, RAR, to Pre- Arrival Assessment Report, PAAR, will also be carried at the Tin-Can Island Command of the service.

2013 August, SweetcrudeReports

Freight

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Trucks

TRADE FAIR TRUCK PARK:

120 vehicles arrive TOJU VINCENT

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n accordance with plans for the replacement of old and dilapidated trucks used for haulage of cargoes from the ports, the first batch of the 2,000 trucks brand new articulated vehicles have arrived and awaiting distribution.

President of the Association of Maritime Truck Owners, AMATO, Emmanuel Aderemi Ogungbemi, disclosed this to newsmen in Lagos at the recent one=day colloquium organised by the maritime journalists in Lagos.

He said that 120 of the 2,000 trucks have arrived the country and waiting to distributed to members of the group. Ogungbemi also said that the vehicles are being given to member on a higher purchase arrangement by both the promoters of the

park and Heritage bank.

The AMATO boss explained that the group is also collaborating with other groups to ensure the success of the scheme adding that in no time the entire maritime sector will be flooded with new trucks.

Ogungbemi noted that although the process of phasing out the trucks is a gradual one, reiterating that it will eventually be for good of the industry.

Although he was silent on what each member will pay for the truck on the long run, but he explained that the repayment period is between the group and the investors.

He further disclosed that discussions are ongoing with the Federal Government to construct an entrance and exit different from the general one at the entrance of the fair.

He said “The major constraint of the park project is the road, and discussion is on with the investor himself and

Federal Government to create an entrance and exit, separate entrance and exit because of the volume of trucks that will coming in and out of the part, it will not be proper for to use the same road with others.

“The investor is currently talking with the authority so that they can give us a separate entrance and exit to the facility” He also explained that haulage business of the group is maritime industry specific as it is only goods that come of the ports that are moved by members of the AMATO. The haulage expert also disclosed that a Committee has been set to work out the modalities for the distribution of the vehicles.

Speaking on the development, consultant to the project Chief Chris Orode said that although the that are currently available were the ones the investors purchased from Lanre Shittu

Motors adding that the original agreement was for Mack truck manufacturing Company to produce these vehicles for AMATO. Orode explained that Mack has commenced production of these vehicles and will be delivering 250

pieces every until the 2,000 is completed.

“Already, the security cameras are currently being fixed and will be ready by end of next week and there are also plans to ensure that the facility comply with the International Ship an Port Facility Security, ISPS, Code.

He disclosed that terminal two and three will be dedicated to trucks while terminal one will be for general cargoes and a large space has also been reserved for export purpose.

95 ships to arrive Lagos ports this month

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inety-five cargo ships would sail into the Lagos ports before the end of August, according to the Nigerian Ports Authority, NPA. The vessels began to arrive the ports on August 7.

The NPA said this in its daily in-house publication, ‘Shipping Position’, made available to newsmen in Lagos. It reported that the expected ships would be

carrying a patrol boat, bulk wheat, petroleum products, bulk fertiliser, new and used vehicles, bulk malt and frozen fish.

The document indicated that some of the ships would also sail in with steel products, general cargo and containers.

According to the NPA, two ships – MV Tai Health and MV Energy Ranger – would discharge steel products and bulk fertiliser, respectively.

Motoring

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The 13 safest cars for 2013

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he Insurance Institute for Highway Safety (IIHS) has released its list of safest vehicles for the 2013 model year. In all, the list includes 117 cars that were awarded a Top Safety Pick. Thirteen cars were given the Top Safety Pick+ award, which is an even higher award for vehicle safety. These vehicles go deeper to bring a safer ride to drivers and passengers, and we’re going to take a quick look at each one.

Honda Accord 2-door Honda’s Accord is almost always given top honors for safety, and this year is no exception. The 2-door model provides a sportier look, but still maintains a high level of safety.

Honda Accord 4-door The 4-door version of the Honda Accord has received the same honors as its sportier 2-door brethren. Families looking for easier access to the rear seats can still expect the high level of safety from this version of Honda’s popular sedan.

Chrysler 200 4-door

Dodge Avenger The Dodge Avenger was reintroduced to the North American market in 2008 after an eight-year hiatus. The front-wheel drive sedan has seen a huge

Chrysler first introduced the 200 sedan during the 2011 model year, and its sales have been slowly improving each year. It is designed to offer a scaled down version of Chrysler’s flagship 300 sedan, but it doesn’t scrimp on safety.

improvement in sales in 2012, and the safety rating of its 2013 model should certainly help that number improve even more going forward.

Ford Fusion built after Dec. 2012

Kia Optima In 2011, Kia gave the Optima a major visual overhaul, and it certainly looks a lot more stylish than previous model years. For 2013, Kia added a few safety improvements, and the IIHS has taken notice, offering the Optima its highest honor for vehicle safety.

The Ford Fusion entered into its second generation for the 2013 model year.

As one of Ford’s more successful vehicles, this will only go on to help it take hold of the U.S. market. After a rocky road for Ford a few years back, it seems the company is back on track, and another award on the shelf is always a good thing.

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Motoring

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The 13 safest cars for 2013 CONTINUED FROM PAGE 39

Nissan Altima 4-door built after Nov. 2012 The Nissan Altima has been a staple of mid-size sedans since the 90s, and it shows no signs of slowing. For the 2013 model, Nissan launched into a new

generation, and besides style and performance, Nissan made some notable safety improvements that the IIHS has clearly noticed.

Suzuki Kizashi While the Suzuki Kizashi may have been killed off in November of 2012 in the U.S., that doesn’t mean it’s still not a safe, well-designed vehicle. Even though it’s not for sale anymore, at least owners of the car know that they are in for a safe ride.

Subaru Legacy built after Aug. 2012 The Legacy has not seen a major redesign in North America since the 2010 model year.

However, small improvements have

come with each year, and for the 2013 model, Subaru revisited the suspensions and CVT transmission and made some small tweaks to the safety features.

Subaru Outback built after Aug. 2012 The Outback is built on the Legacy platform, so it’s no surprise that it made the list as well. For drivers looking for a safe vehicle in wagon form, the Outback might be the way to go.

Acura TL Volvo S60

The Acura TL is one of the few luxury sedans to make the list. It offers top safety features along with much of t h e l u x u r y a n d performance buyers expect for the higher price tag. It’s no surprise that it’s on the list, since it’s built by the same people responsible for the Honda Accord.

The entire basis for Volvo’s marketing campaign in the U.S. is its safety record.

Well, the company has another trophy to hang its hat on, as the IIHF has included it in the exclusive list of 13 cars with a top safety rating.

Volkswagen Passat built after Oct. 2012 Volkswagen is the final company to have a vehicle make the list. The Passat is another midsize sedan, which seems to be the trend for the IIHS Top Safety Pick+ award.

In all, Japan had the most cars given the award with a total of seven vehicles

Technology History

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he environmental engineering industry has used different types of seismic testing to evaluate subsurface geology since the 1960’s. An early form of the technique, called seismic refraction, was used primarily in rippability studies to determine what type of machinery was required to excavate materials at construction sites. The refraction technique is limited in its ability to image complex geologic structure or detailed stratigraphy, but because of the relatively low cost to perform a survey, and the ease with which refraction data can be processed, it is still a popular seismic application.The seismic technique was originally developed by the oil exploration industry. Almost all of the developments of the technique for shallow-depth, environmental problems were adapted from oilfield practices. Seismic reflection surveys have been performed in oil exploration to delineate subsurface structure since the 1930’s.

The early surveys (2D, single fold, continuous coverage profiling) provided largescale structural information about the subsurface, but forced oil exploration teams to drill without a completely accurate image of the reservoir (much as is done in environmental engineering today). As the use of seismic surveys became more accepted and as funds were available for research, the technique evolved until it became an effective way to view and interpret largescale subsurface geologic structural features. The advent of the 2D, multifold,common-depth-point surveying techniques, along with advances in instrumentation, computers, and data processing techniques, greatly increased the resolution of seismic data and the accuracy of the subsurface images. However, the technique still yielded little information on the physical properties of the imaged rocks, or the pore fluids within them.It was not until the introduction of 3D reflection surveying in the 1980’s that seismic images began to resolve the detailed subsurface structural and stratigraphic conditions that were missing or not discernable from previous types of data. Today

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Seismic Surveys

Seismic reflection methodology potential oil reservoirs are imaged in three dimensions, which allows seismic interpreters to view the data in cross-sections along 360° of azimuth, in depth slices parallel to the ground surface, and along planes that cut arbitrarily through the data volume. Information such as faulting and fracturing, bedding plane direction, the presence of pore fluids, complex geologic structure, and detailed stratigraphy are now commonly

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Technology

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Seismic Surveys CONTINUED FROM PAGE 41 interpreted from 3D seismic data sets.In the environmental engineering industry 2D shallow seismic reflection imaging has been performed to map the overburden-bedrock interface at test sites since the 1970’s. In recent years seismic reflection profiling has been applied to other geotechnical and environmental problems as well. In 1994, RRI performed the first high-resolution 3D seismic reflection survey at a hazardous waste site (Naval Air Station North Island, California ).

Since that time, over thirty 3D seismic surveys have been performed by RRI for environmental investigations.2D/3D seismic reflection surveys provide information that can be essential for characterizing and remediating hazardous waste sites. Seismic surveys are proficient at mapping potential contaminant migration pathways, determining the presence of subsurface fracture systems, and imaging structural and s t r a t i g r a p h i c heterogeneities below a site.

Seismic imaging technology provides valuable information to evaluate groundwater management alternatives.

Method

Seismic reflection imaging is based on the principle that acoustic energy (sound waves) will bounce, or “reflect” off the interfaces between layers within the earth’s subsurface. This principle is analogous to the process of a human voice echoing off of a building wall.During a seismic reflection survey acoustic energy is imparted into the earth with a seismic source. RRI typically uses noninvasive sources on our environmental projects, such as a sledgehammer or a power-assisted weight drop source. These sources are impacted upon an aluminum strike plate ground surface to create high frequency seismic energy. After impact of the source the sound waves propagate and spread out along spherical wavefronts in all directions. The usable sound energy travels into the earth (signal), while some energy is lost into the air or along the ground surface (noise). The figure on the right shows a simplified cross-sectional view of a 2D

seismic recording system with some of the signal and noise ray paths associated with a reflection survey.The earth is characterized by many layers, each with different physical

properties. When sound waves traveling through the earth encounter a change in the physical properties of the material in which they are traveling, they will either

reflect back to the surface or penetrate deeper into the earth (where they may again be reflected at another interface). At a geologic interface some seismic

energy is always transmitted while some is reflected. The acoustic impedance is a measure of how seismic energy will react when it encounters a subsurface layer. This physical property is closely associated with the density of a layer. Contrasts in acoustic impedance create seismic reflection interfaces.

Subsurface reflections of seismic energy, therefore, most often occur at the interfaces between lithologic changes (a transition from sediment to rock, for example).

As a result, seismic reflections make it possible to map the stratigraphy below a site.Areas of structural deformation, such as fractures, can also be observed using seismic reflection. A fractured rock surface produces different reflections than a continuous rock surface. A coustic energy is diffracted by fractured rock surfaces in much the same way that a visual image is distorted in a shattered mirror. Identifying diffracted energy patterns is one way in which geologic structures such as faults and fractures can be mapped using seismic reflection surveys.During a seismic reflection survey high-speed CONTINUES ON PAGE 43

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Technology

Seismic Surveys Today new oil reserves are very rarely located without the use of 3D imaging. Attempting to locate contaminant migration pathways or potential DNAPL accumulations are just two examples that present similar 3D problems for the environmental industry.

CONTINUED FROM PAGE 42 digital data recording systems (seismographs) and acoustic sensors (geophones) are used to measure reflected sound waves. Compressional waves (p-waves) are a type of s e i s m i c w a v e s .

Compressional waves are so named because the wavefronts propagate through the earth mechanically; when one particle moves and compresses the next particle.

The figure on the left (A) shows the wavefront of sound waves impinging on a geophone. The particle motion in the earth moves the geophone body, which houses a magnet within a suspended coil inside the geophone. This action produces an analog voltage signal that is proportional to the ground motion (B). The seismograph then digitizes the analog signal by breaking the signal into discrete time samples, and creates a digital level (a numeric value) for the amplitude of the signal during that time sample (C).

The data in RRI surveys are digitized to 21-bit resolution, which means the analog geophone signal is broken into 221 or 2,097,152 levels.

We analyze the final processed wavelet (D), which is the result of the postsurvey data reduction process, and is a high resolution, distortion free representation of the subsurface.

3D Seismic Surveys

Since 2D data collection occurs along a line of receivers, the resultant image represents only a section below the line.

Unfortunately this method does not always produce a clear image of the geology.

2D data can often be distorted with diffractions and events produced from offline geologic structures, making accurate i n t e r p r e t a t i o n s difficult.Because seismic waves travel along expanding spherical wavefronts they have surface area. A truly representative image of the subsurface is only obtained when the entire wave field is sampled. A 3D seismic survey is more capable of accurately imaging reflected waves because it utilizes multiple points of observation. A grid of geophones and seismic

Vertical Seismic Profiles A Vertical Seismic Profile (VSP) is a geophysical field test that measures accurate seismic velocity values for exact depth intervals beneath a site. RRI uses VSPs to aid the processing and interpretation of 2D/3D surface seismic data collected at a site.

S t r a t i g r a p h i c information from boring logs combined with seismic wave travel time information measured during the VSPs provide data to correlate borehole geology with the surface seismic data so accurate geologic interpretations of the seismic images can be made.The figure on the right shows a general

source impact points are deployed along the surface of the site in a 3D survey. The result is a volume, or cube, of seismic data that was sampled from a range of different angles (azimuth) and distances (offset), as shown schematically in the figures below.

RRI uses a data processing technique called 3D migration, which takes advantage of the multiple observation points provided by a 3D survey, to greatly increase the horizontal resolution of 3D seismic data.

The 3D migration process collapses diffraction patterns caused by points and edges found in the subsurface (such as fractures and faults), which can dramatically improve the seismic image. The figure to the left illustrates the improvement of 3D data quality in contrast to 2D data, and was taken from the work of French (1974). French collected seismic data over a model with 2 anticlines and a fault scarp. Thirteen lines of data were collected, the results from Line 6 are shown.

The raw, 2D data shows anomalous effects from neighboring structures.

Diffraction patterns from the fault block (red) and both anticlines (green & yellow) are apparent in the data, making the section confusing and also incorrect. The image is improved with 2D data migration. Anticline #1 is correctly imaged since Line 6 passed over its crest. However, Anticline #2, which is visible on the section, is not actually beneath Line 6. Also, the fault scarp was imaged with the wrong slope. Only the 3D migrated section accurately delineates the true geology. This experiment exhibits a relatively simple geologic system. Sites with fractures, faults, and complex structural geology produce a much more confusing seismic image that only 3D migration can help clarify.Because oil reservoir exploration is a spatial, 3D problem, 3D seismic data collection, processing, and imaging has been advanced by all major oil companies.

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schematic diagram, which identifies the components of the recording system for the VSP.Soil and rock units are inherently heterogeneous and anisotropic, and as such, they differ in their ability to transmit and reflect seismic signals. Physical characteristics such as mineral content, bulk density, degree of cementation, and pore fluid content and properties all impact the rate at which seismic signals travel through any volume of subsurface media, be it soil or rock. Prior to collecting VSP data, the exact depth to features present on a seismic image can only be assumed based on general estimates of seismic velocity values for the types of soils or rocks known or thought to be present beneath the site.

VSPs provide the means to calibrate or “tie� the 2D & 3D surface seismic data to correct physical depths.

Stratigraphic information from boring logs along with seismic travel times measured from the surface down to any soil/rock feature, or other contact of interest, provide data to correlate borehole geology with surface seismic data.

Community

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Implement UNEP report, Ogoni tell FG

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h e Ogoni ethni c nationality in Rivers State has called on the F e d e r a l Government to implement t h e recommendati ons of the U n i t e d N a t i o n s Environment al Programme o n t h e i r community.

T h e y criticized government’s neglect of the report two years after it was released, stressing that nothing had been done to clean up the environmenta l pollution in

Protest against Shell in support of Ogoni

the area.

Mr. Kadilo Kabari, facilitator of Ogoni Generation Next Project, OGNP, an organisation of young professionals from the area, said the government should not neglect the area to the extent that indigenes would be forced to resort to self-help.

Speaking in Abuja when a 22-member delegation of the OGNP paid a courtesy visit to the Catholic Bishop of Sokoto Diocese and Presidential Mediator on Ogoni, Rev. Matthew Kukah, he urged urgent action on the part of the Federal Government.

The team was accompanied during the visit by the Rivers State Council of Traditional Rulers and President, Supreme Council of Ogoni Traditional Rulers, King G.N. K. Gininwa, accompanied the team to Abuja.

Shell under threat over sale of assets

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ndigenes of Ogoniland, an oil rich area in Rivers S t a t e , h a v e threatened to drag S h e l l P e t r o l e u m Development Company, SPDC, over sale of its assets in the area.

They said they will institute court action to stop the oil multinational from selling its assets in the area.

Shell’s operations in Ogoniland had been shut since the 1990s following struggle by Ogoni against the state over the killing of Ken Saro- Wiwa.

At a rally by thousands of Ogonis in Bori, to protest two years of Federal Government’s non-

Nothing is working in Ogoni because of the evil destruction of our land by Shell, which is now secretly selling all its assets to private companies. That is why we are going to court to stop Shell implementation of the United Nations Environmental Programme, UNEP, report on Ogoniland, the people said they would stop Shell from selling any Ogoni assets till all contentious issues were

resolved.

“Nothing is working in Ogoni because of the evil destruction of our land by Shell, which is now secretly selling all its assets to private companies. That is

why we are going to court next week to stop Shell.

Whoever buys anything is buying Shell’s liability,” Celestine Akporbari of the Ogoni Solidarity Forum, who led the protest, said.

According to Akporbari, the people had run out of patience over Federal Government’s continued indifference to the UNEP report, saying that the development was pushing the country towards a violent struggle.

“Today, the report of UNEP has exonerated Ken Saro-Wiwa’s struggle and ours that Ogoni environment has been polluted. Instead of doing something about our plight,

government is playing politics with our lives.

“We have not seen anything relating to the implementation of the report in Ogoni. The people are suffering. Water, crops, air and the environment have been poisoned.

“Ken Saro Wiwa agitated in non violence, our generation has also sustained non violence, but the next generation of Ogoni, whose fate may have been dashed to the mud because of the current damage to our environment may be less tolerant and may want a war,” Akporbari said.

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Oil community in the Niger Delta

Abia, Edo communities seek direct access to derivation funds

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il producing communities in Abia and Edo states have joined the clamour for direct payment of the 13 percent derivation fund to them rather than the state government.

They argued that the fund had already existed before any other revenue formula, adding that the amount due to the fund was to be constitutionally set aside before the commencement of Federation Accounts Allocation Committee, FAAC, meetings to share the remaining balance of 87 per cent of the total oil revenue.

The communities further insisted that the constitution had also provided that the 13 per cent derivation fund be treated as first line charge on the federation account.

It is also clear that 13 per cent derivation fund is not part of the consolidated fund.

The fund is not part of state/local government joint account; the fund as provided in the 1999 Constitution, is on its own and should be treated as such In a memorandum to the Chairman, Revenue Mobilisation Allocation and Fiscal Commission, RMAFC, the communities held that the continued disbursement of the derivation to state governments was illegal.

"Therefore, RMAFC has no right to send the 13 per cent derivation fund through any

state government account who is the third beneficiary of the federation account.

"It is also clear that 13 per cent derivation fund is not part of the consolidated fund.

The fund is not part of state/local government joint account; the fund as provided in the 1999 Constitution, is on its own

and should be treated as such," the communities said.

They further argued that the derivation fund was not ‘manna from heaven’’ because oil and gas producing communities fought for it during the 1994/95 National Constitutional Conference, where Chief Edwin Clark, led the oil and gas producing communities to the conference.

They said: "It was due to the pressure exerted by the oil and gas producing communities that made the 13 per cent derivation fund as one of the main decisions and resolutions of the 1994/95 conference.

“During the 1999 Constitution drafting committee, the oil and gas producing communities were there to pile pressure to ensure that 13 per cent derivation fund is enshrined

in the 1999 Constitution."

The communities lamented that for 13 years, state governors of oil producing communities had received the 13 per cent derivation fund meant for the development of oil and gas producing areas, but used the funds to develop their state capitals and non oil producing communities.

This, they argued, had left the actual oil and gas producing communities in abject poverty.

The memorandum was signed by 10 leaders of the communities which included Chief Jones Udeogu, ChineduElechi, Chief OnyemaOlujie, Prince S a m N w o g u , ObinnaEmemenna, Nwaloziri Ignatius, Emma U k a e g b u , H o n UgochukwuEkpo, Reginald Ezenta and Maduka James.

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Ijaw community decries Shell’s negligence

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he Shell Petroleum Development Company, SPDC, has come under the attack of the Peremabiri community in the Southern Ijaw local government area of Bayelsa state, They threatened to disrupt the operations of the oil firm over alleged failure to meet the community’s requests to extend its corporate social responsibility gestures to them.

In a protest letter to SPDC, dated July 19, 2013 and signed by its spokesperson, Mr. Never Progress, they demanded that Shell provided the community with a 1000KVA generating set.

Oil spill site

The grievance of the community is that whereas they approached Shell since March, 2013 to meet their demand for 1,000kVA generator to enable them pump water from nine boreholes which they sunk purely as a community selfhelp project due to Shell’s The Peremabiri indigenes also informed in the letter that they had written the federal government as well as the Bayelsa State Government to compel the oil giant to extend its community development gestures to them, but that the SPDC had

resorted to “bullying and terrorising the residents with armed military personnel instead of seeking a peaceful fulfillment of their demands”, which they described as genuine.

The coommunity claimed that SPDC operates about

12 functional oil wells within Peremabiri community, adding that it was unfair of the company to consistently rebuff its plea for community development.

“Shell and the government o f C h i e f D . S . P .

Alamieyeseigha separately gave them 500KVA generator each but the one supplied by Shell has broken down due to its age,” the letter said.

They claimed that one earlier donated by Shell broke down and that they have no option than to ration electricity supply to the two sides that make up the community.

“The grievance of the community is that whereas

they approached Shell since March, 2013 to meet their demand for 1,000kVA generator to enable them pump water from nine boreholes which they sunk purely as a community selfhelp project due to Shell’s negligence, the company keeps telling us that they have not got approval from above," the letter added.

It added: “As a peace loving community, we are calling on the Federal Government, the National Assembly, human rights groups and the international community to intervene in the matter before Shell mobilises security forces to maim and kill citizens of the impoverished community.”

Community

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NigerDelta

Question

JOHN IYENE OWUBOKIRI

Official mismanagement, inequities and crude theft

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A boy tampering with a flow line

Don't obstruct oil, gas operations —Delta Govt

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he Delta State government Commissioner for Oil and Gas, Mr. Omamofe Pirah, has urged oil host communities to avoid obstructing the operations of oil and gas companies in the state.

Pirah said in a keynote address at a town hall meeting organised by Pan Ocean Oil Corporation for its seven host communities in Amukpe “The governor is happy with Pan Ocean for toeing the path of peace by holding this town hall meeting. It means well for

the host communities.”

He called for dialogue and patience as way to resolve contentious issues as well as in conflict management as he assured that the state government was rfeady for consultations on all issues.

He also condemned pipeline vandalism and crude oil theft, lamenting that the state government was losing huge revenue as a result of the act.

“The host communities are also losing their lives, environment and aquatic lives,” he said, advising community and opinion leaders to advise and work against pipeline vandalism

and crude oil theft.

Pan Ocean's Assistant General Manager, Special Duties and Operations, Mr. Emmanuel Omo Irabor, who represented the company’s Chairman and Managing Director, recalled the Jesse pipeline fire disaster and condemned the vice.

For him, the town hall meeting was a veritable forum for interaction between his company and its host communities as a way of knowing the challenges on both sides with a view to thrashing them out.

he entry of socialist policies into the very hearts of capitalist domains was the direct fallout of the need to breach inequities for social balancing.

Housing allowances, unemployment benefits, the National Health Care Scheme, (the NHS) in England, paedestrian walks, foot bridges, the special parking spaces for the physically challenged, free primary and secondary education, institutionalised loans for tertiary education, are some of the strategies developed by the civilised world to breach inequities in their societies.

In terms of human and natural resources, Nigeria is adjudged to be potentially richer than both the United Kingdom and France but because this country does not recognise the existence of inequities, she has not developed a template for dealing with it. The result is that in the Northern parts of the country where the people are held captive by religious and social cultures that promote tolerance of the most uncomfortable circumstances and unconditional respect for the privileged class, extremities of the worst forms have now developed and held that part of the country hostage. In the South East, inequities have redefined the demographics of the area such that in every ten males, only three would aspire to acquire education.

The rest are either aspiring to do business or are already in some business. The creative spirit which also grew from the inequities in the region are no fitting statistics to judge it by since the same inequities produced the destructive genius to compromise and undermine the produce of the creative few in the region.

The people of the Niger Delta wasted no time in joining foreign elements to carry on the lucrative oil and gas business within their homes, farmlands, creeks and rivers.

More than 100 “refineries” are carrying on business in the Niger Delta, business that has wiped out the animal population of the region and threatens the existence of the human population. The government has played an active role in the growth of this phenomenon if only for not taking steps to breach inequities in the region. But it does not end there.

The Presidency, the Petroleum Ministry and the NNPC, the monumentally incompetent triumvirate that supervises the oil and gas industry, has actively nourished that environment for the chaos she finds herself in. It has taken the triumvirate forever to produce a Petroleum Industry Bill that would have put youths in that region in classrooms and offices. Hitherto, crude oil theft was conducted officially by privileged officials in the NNPC to the knowledge of locals who have in simulation, given themselves the ‘license to lift.’ Several years ago, I was privileged to learn that the NNPC, given a sound proposal for detecting pipeline vandalism and oil spill within seconds of their occurrence cared more about the loss of the opportunity to award contracts to replace vandalised pipes and structures. It is public knowledge that if the NNPC cared, she could detect the vandalisation of a pipe in Calabar within seconds of its occurrence from Lagos without placing security guards around the pipes for manual surveillance. However the Nigerian culture for gratification through the award of bogus contracts to well connected contractors and penitent militants has stronger roots than the imperatives of technological and consequently, social development.

This stalemate situation continues to exist like a comedy of errors: crude oil theft is multiplying at a phenomenal rate, the environment of the Niger Delta is perishing fast, the fortunes of the petroleum industry is plummeting daily and the Nigerian state which has wrongly depended on the industry, stands first in the queue of casualties to come from this tragic comedy. The bigger tragedy is that it does not appear as though we are even preparing to take stock of our unforced errors in the industry with a view to keeping the final tragedy at bay.

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