Sweetcrude august 2014 by Sweetcrude reports

New gas price may lead to increased electricity tariff

Nissan Assembly in Nigeria: A fraud P/38

P/20

A Review Of The Nigerian Energy Industry August, 2014

VOL 02 N0. 17

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

102.40 105.61 107.89 105.44 104.27 104.15 105.38 104.71 107.67 104.97 106.69 108.73 107.52

Daily | Weekly | Monthly | Yearly

102.23 U$

110 109 108 107 106 105 104 103 102 101 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14

Chad to drag CNPC before Paris court

had plans to take China National Petroleum Corporation, CNPC, to an arbitration court in Paris after talks stalled over its claim for $1.2 billion from the state-owned company in compensation for breaking environmental rules, according to reports. The dispute erupted in July last year after Chad said it discovered large quantities of crude had been dumped into pits dug in the Koudalwa region, where CNPC has held licenses to several oil blocks since 2009.

Snubbed by US, Nigeria turns to Russia, Asia India becomes number one oil purchaser US export plan brings fresh pressure on Nigerian crude

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2014 August, SweetcrudeReports

Editor’s note

aving virtually lost the American market, it was only natural that Nigeria sought fresh outlets for its crude oil in other parts of the world. This the country has done as indicated in a recent report by the Nigerian National Petroleum Corporation, NNPC, which shows a re-alignment in the list of countries and regions buying the export from Nigeria. India now tops that list, while US, until this year, Nigeria's biggest oil trading partner, has slid to the 10th position on account of its own self-sufficiency in oil supply. Also, Asia now accounts for more than half of the nation's current export. This information may have brought fresh hope following initial fears that Nigeria could be in dire straits in the face of US' declining orders for the Nigerian crude. But, it is yet too early for celebration given US anticipated commencement of oil exports from this month. As has been strongly hinted by observers, US' entry into the international market with its ultra-light crude oil will reduce Nigeria’s market share because the US exports would be aiming for the same markets Nigeria's crude currently services. The big question is whether Nigeria is prepared to confront this latest challenge and whether it will be able to find a way around the situation. Minister of Petroleum Resources Minister, Mrs, Diezani Alison-Madueke has cast herself in the mould of a super minister. At no time in the nation's history had a minister overseen the going and coming of five group managing directors at the NNPC

4 6 13 17 20 25 28 32 35 38 41 44

in three years. This is the feat the minister has achieved for herself with the recent sack of the Mr. Andrew Yakubu and the appointment of Mr. Joseph Dawha in his stead. Obviously, there are implications for investor confidence. As we welcome the new NNPC helmsman, our advice is that he girds his loins because he is on a very slippery slope. We hear Nigeria and Britain are losing as much as N3.578 trillion yearly to pirates’ activities and oil bunkering in Nigeria’s territorial waters and off the coast of West Africa. This is sad, but we are happy that the Nigerian Maritime Administration and Safety Agency, NIMASA, says it is now up to the task of effectively combating the two ills with its recent launch of a multi-million satellite surveillance centre based in Lagos. We are of the belief that the new centre would assist in arresting rampant criminal attacks on oil facilities and stealing of the nation's crude. The multinational, Shell, for instance, reported fresh vandalism of a section of its Nembe Creek Trunkline just as we prepared to go to press while our investigations have revealed that the international oil company witnesses about five line breaks per week. This number is certainly much. On a happy note, we say congratulations to the management of Addax Petroleum and the Petroleum and Natural Gas Senior Association of Nigeria, PENGASSAN, for finally reaching and signing a collective bargaining agreement that has restored peace and harmony in their relationship.

COVER

Snubbed by US, Nigeria turns to Russia, Asia

OIL

‘Shell Nigeria suffers six line breaks per week

FOCUS War against piracy, oil theft: NIMASA backed by Airforce, others

GAS Nigeria targets 500mcf gas expansion for power

POWER

New gas price may lead to increased electricity tariff

FINANCE

Nigeria targets N2.24tr investment to boost power supply

LABOUR Why we insist on passage of PIB -NUPENG SOLID MINERAL

Govt vows to shut illegal mining, quarry operations

FREIGHT Nigeria, UK lose N3.58tr annually to piracy

MOTORING Nissan Assembly in Nigeria: A fraud

TECHNOLOGY Hydraulic fracturing

COMMUNITY

Ogoni berate govt for aiding ‘environmental terrorism’ in Ogoniland

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2014 August, SweetcrudeReports

Cover Story

2014 August, SweetcrudeReports

Snubbed by US, Nigeria turns to Russia, Asia India becomes number one oil purchaser US export plan brings fresh pressure on Nigerian crude

CHUKS ISIWU, OSCARLINE ONWUEMENYI & IKE AMOS

igeria has s o u g h t investment f r o m t h e R u s s i a n business community to take advantage of its enormous human and natural resources, and invest in its petroleum value chain – upstream, downstream, and gas. It has also turned to the East European country as well as Asia and South America for markets for its crude oil. The latest foray by the government comes in the wake of declining importation of petroleum products by the United States of America which, hitherto, had been the biggest buyer of Nigerian crude.

NNPC, justified the country’s new strategic foray towards Asia and South America in the light of the snub by the United States, even as it notes that Nigeria would not ignore any market in its quest to remain competitive in the global oil and gas industry.

“India is now the largest importer of Nigeria’s oil replacing the US. The US merely imports about 250,000bpd, they usually imported over a million. So that market has moved to Asia, and we are placing With American imports from more and more of our cargos Nigeria declining to less than in Asia. three percent of its global “Asia is an important imports over the past few months, Asian countries like market to us at the moment, India, China and Malaysia and in that respect we have become the major respect all markets. The importers of Nigerian crude, important thing is to make accounting for more than half sure that you are selling the of the nation's current export. products that you have and South America's giant, Brazil you do not ignore any has also entered the equation, market," explained Dr. Tim snapping up sizeable volume Okon, the Co-ordinator, of crude oil from Nigeria. C o r p o r a t e P l a n n i n g & European countries - the Strategy, as well as Director Netherlands and Spain - also of Transformation, NNPC, remain major oil trading allies on the sidelines of 21st World Petroleum Congress, WPC, of the country. in Moscow, Russia. The Nigerian National Nigeria's stated ambition in Petroleum Corporation,

participating at the World Petroleum Congress was to assess the global business and opportunities available in the petroleum industry to

Crude oil vessel translating them to the wider economy. Along that line, Nigeria

With American imports from Nigeria declining to less than three percent of its global imports over the past few months, Asian countries like India, China and Malaysia have become the major importers of Nigerian crude, accounting for more than half of the nation's current export enable it position itself as a major competitor in the hydrocarbon market. According to Okon, as a natural resources rich country, Nigeria needed to do a better job in developing these resources and

had, at the Petroleum Congress, wooed Russia not just as market for its crude but for investments in other aspects of the oil and gas sector. But, the Nigerian government's outreach to the oil-rich nation came with a

warning from the Nigerian ambassador to the Russian Federation, Chief Asang E. Asang, who observed that it would be fraught with challenges because economic relations between both countries is historically low compared with other nations. This is due to the fact that there were no trade routes between the two countries before now. “We literally had no serious trade relations between Nigeria and Russia because we had no relationship, no cultural bond, and no trade," Ambassador Enag said. Besides, he noted that Nigeria had almost similar natural resources with Russia and would appear to be in direct competition, saying, “Everything Nigeria has, Russia too has, including hydro-carbons. Nigeria has a population of 160 million, Russia has 150 million. While Nigeria has low technology, CONTINUES ON PAGE 5

Cover

2014 August, SweetcrudeReports

Crude oil vessel

Snubbed by US, Nigeria turns to Russia, Asia CONTINUED FROM PAGE 4 Russia has high technology.” While still concerned with the challenges of wooing Russia, latest figures from the NNPC on the marketing of Nigeria's crude showed that India, Netherlands and Brazil are top on the list of buyers of the Nigerian product. Nigeria exported 65.7 million barrels of crude oil in February this year, netting N1.125 trillion revenue according to data for that month released by the NNPC. Of this volume, India purchased 10.44 million barrels, followed by the Netherlands, with 9.385 million barrels.

million barrels; the United States — 3.048 million barrels; Indonesia — 2.85 million barrels and Italy — 2.75 million barrels. There was a slight difference in the export figures for January, which revealed that India, Netherlands and Spain were the highest buyers of Nigeria’s crude oil, accounting for 45.01 per cent of the total crude export in the month.

Nigeria exported 6.922 million barrels of crude to Brazil; 6.18 million barrels was exported to France; 4.0 million barrels was exported to South Africa, while Spain accounted for 3.971 million barrels of Nigerian crude.

In January, Nigeria’s total crude export was 65.305 million barrels, up by 1.19 per cent from 64.537 million barrels in December 2013. As in February, India was the highest recipient of Nigeria’s crude oil in January, accounting for 18.09 per cent of total crude export with 11.811 million barrels of crude oil. The Netherlands followed with the purchase of 8.889 million barrels of crude, while Spain received 8.695 million barrels.

Others purchases, according to the NNPC, are the United Kingdom —3.351

Having obviously found new markets after exports to the US market had dwindled by

91 per cent this year and the US had dropped from the first to 10th position in the list of buyers of Nigerian crude, observers warn that US plan to enter the international market with its oil portends greater challenge for Nigeria and threat to revenue receipts. They maintain that with this development, Nigeria and other oil exporting countries are bound to lose considerable shares of their current markets.

The US Commerce Department had three months ago given the green light for the export of ultralight crude oil or condensates to two Texas-based companies, Pioneer Natural Resources and Enterprise Products Partners, from August this month. Experts say this marks an end to the ban on export of unrefined oil introduced by the US to arrest rising fuel prices following the 1973 Arab oil embargo. Energy analyst at Ecobank,

Dolapo Oni, says the decline in US imports of Nigerian crude has increased the amount of crude oil for which the country is seeking new markets, but stressed that by the time the US enters the

international market with its crude, it would reduce Nigeria’s market share because the US exports would be aiming for the same markets Nigeria's crude currently services.

Oil

2014 August, SweetcrudeReports

Shell Nigeria suffers six line breaks per week Lines set ablaze, oil losses mounts

biggest loser in financial terms is the Nigerian government, for which oil and gas account for 90% of export revenues and 75% of overall revenue. Shell has been campaigning actively on the issue because we see the current levels of theft as unsustainable for Nigeria and for the industry. We believe that urgent, coordinated action is required by all stakeholders in the Nigerian oil and gas industry, with the government playing a leading role,” he enthused. Further checks revealed that the company may have sold the Nembe Creek Trunk Line, NCTL, owing to repeated and sustained acts of vandalism. However, the company said it will not comment on the divestment programme, adding that the process was transparent. Sale of the 97-kilometre Nembe Creek Trunkline, NCTL, comes a few years after the Anglo/Dutch multinational replaced it with a new line which gulped $1.1 billion.

Shell building

HECTOR IGBKIOWUBO

he eastern operations of the Shell P e t r o l e u m Development Company of Nigeria, SPDC, suffers an average of six line breaks per week and the vandals have resorted to setting t h e l i n e s a b l a z e , SweetcrudeReports investigations have revealed. Indications are that the volume lost to the incidence of crude oil theft and shut-ins suffered by the company’s operations in the area now exceeds 300,000 barrels per day and continues to mount. However, when contacted Mr Precious Okolobo, Shell Nigeria’s Corporate Media Relations Manager said crude oil theft continues to be a challenge in the Niger Delta, adding that estimates of the volumes being lost to theft vary widely. “But the Nigerian government estimated crude oil theft and associated deferred production at over 300,000 barrels of oil per day (bopd) in 2013. On average, around 32,000 bopd were stolen from SPDC JV pipelines and

other facilities, whilst the joint venture lost production of around 174,000 bopd due to shutdowns related to theft and other third-party interference,” he said. He disclosed that in 2013, the number of spills from SPDC operations caused by theft and sabotage increased to 157, compared to 137 in 2012, whilst production losses due to crude oil theft, sabotage and related temporary shut-downs increased by around 75%. The company admitted that there were fires on the 28-inch Trans-Niger Pipeline, TNP, at K-Dere and on July 23 at B-Dere all in Ogoniland. “JIV (Joint Investigation Visit) established the cause of the two incidents as hacksaw cuts. There was also a leak on the 28inch TNP at Mogho on July 28, caused by a drilled hole. The fires have been extinguished and the leaks repaired. The 28-inch TNP resumed production July 30,” the Shell spokesman volunteered. Checks also revealed that after Shell's broken lines are repaired

He disclosed that in 2013, the number of spills from SPDC operations caused by theft and sabotage increased to 157, compared to 137 in 2012, whilst production losses due to crude oil theft, sabotage and related temporary shut-downs increased by around 75%. and remediation conducted to restore the land, the same lines are always vandalised few weeks after, especially in the company’s eastern area operations.

r. Okolobo noted that as the international oil company with the most extensive footprint in the Niger Delta, SPDC has been hit hardest. “However, all operators and ventures are affected and the

he NCTL and the TransNiger Pipeline are the company’s major pipelines in the Eastern Niger Delta that transport some 400,000 barrels of crude oil per day from Shell’s fields as well as from third parties' in its Eastern operations to the Bonny Export Terminal in Rivers State. The NCTL transports crude oil from 14 oil pumping stations located in the Nembe Creek, Krakama, Awoba, Ekulama and San Bartholomew oil fields all the way to Cawthorne Channel field and Shell’s Bonny Export Terminal. The company disclosed that the new NCTL consists of five kilometres of a 12-inch diameter pipeline from the Nembe Creek III manifold to the Nembe Creek tie-in manifold; 44 kilometres of a 24-inch diameter pipeline from Nembe Creek to San Bartholomew; and 46 kilometres of a 30-inch diameter pipeline from San Bartholomew to Cawthorne Channel. The new NCTL goes through 100 communities in Bayelsa and Rivers States and was constructed by Nestoil and Saipem in for Shell in 2010. Since then the new line has been targeted by crude oil thieves repeatedly, resulting in frequent shutdown to remove hot tap points and repair leaks.

2014 August, SweetcrudeReports

Oil

Refinery

Refineries' revival goes burst OSCARLINE ONWUEMENYI

xactly two years ago, in July 2012, the Minister of P e t r o l e u m Resources, Mrs. Diezani Alison-Madueke had, with much fanfare, inaugurated the National Refineries Special Task Force, and tasked members with the job of reviving the four comatose refineries in the country. The Task Force headed by Chief Kalu Idika Kalu was given 60 days to literally turn water into petroleum. The Minister stressed that government was determined to revamp the existing refineries for maximum output towards meeting local demand for products. Chairman of the Task Force, Dr. Idika Kalu Idika and his team jumped into the task rather too enthusiastically: "I am of the firm opinion that based on our proven and potential reserves in the medium term, Nigerians will like to see at least ten medium to large scale refineries, and smaller modular refineries that could be spread to all the zones of the federations," he had stated. He added, "We are fully aware of the nationâ&#x20AC;&#x2122;s expectations from this process. Our assurance to Nigerians is that we will put in

our best in unraveling the issues that have bedevilled the functionality of the existing refineries. We shall also to the best of our abilities proffer ideas and solutions in line with our terms of reference to ensure that our country goes back to selfsufficiency in the supply of locally refined petroleum products." The task force, according to its terms of reference, was meant to conduct a thorough technical, financial and manpower review of all the refineries, audit the finances and determine the operating capacities as a basis for recommending the financial and technical framework that would raise the existing capacities to an acceptable rate, which by global standards is usually between 80 and 90 percent of installed capacity. The terms of reference for the Special Task Force also included conducting a high level assessment of the Port Harcourt, Warri and Kaduna refineries, reviewing all past reports and assessing and producing a diagnostic report complete with a Change Journey Map. The task force was also expected to review the operations of the three refineries with a view to improving their efficiency and commercial

viability, as well as work with a world-class firm to audit the finances of the three refineries, and produce audited accounts over the past two years ending December 31, 2011.

ther functions included the design of a template for key Production/ManagementCritical Performance Indicators to be tracked on a periodic basis for ministerial review, as well as to design an automated information work bench to monitor the performance of Port Harcourt, Warri and Kaduna refineries on an online basis. The special task force was also expected to review all licenses issued for new refineries in Nigeria and assess their operational, technical, and financial readiness; seek new ideas and design financial models across the value chain for the building of adequate capacity for meeting local demand for petroleum products. Also, it was expected to design a blueprint for public and private partnerships to build small, medium to large-scale Greenfield refineries across Nigeria, as well as design investment models and a road map to self-sufficiency in local production of petroleum products in Nigeria; and to produce a report complete with

We shall also, to the best of our abilities, proffer ideas and solutions in line with our terms of reference to ensure that our country goes back to selfsufficiency in the supply of locally refined petroleum products timelines and milestones within the next 60 working days. Idika noted that beyond this, the task force is also "committed to the development of a framework that would not only turn around Nigeriaâ&#x20AC;&#x2122;s dependence on importation, but would go further to present a platform for the export of products to the regional market and beyond. "We will review existing licenses granted for establishment of private refineries in a bid to assess the readiness of the operators to utilise the licenses. We are also fully aware of the contribution of the petrochemicals subs-sector to the development of a robust production driven economy as well as provide jobs for our teeming youth population, and

would work hard to resuscitate existing petrochemical industries to utilise the byproducts of the refineries," he had stated. Given the expansive function of the task force and the critical importance of the sector to the economic development of the country, it is shocking to note that more than two years down the line, no word has been heard from the Ministry on the subject, nor has the recommendations of the special task force been released to the public. Nigerians would have loved to see how the committee went about its onerous task of turning around the behemoth of waste and corruption in the nation's chequered oil industry, and if it succeeded or failed in this singular task.

2014 August, SweetcrudeReports

Oil

Nigeria’s oil output rises to 1.98mb/d

Oil tank farm

igeria’s oil production rose to 1.98 million barrels per day, mb/d, in July, the highest since March this year. But, the outlook remains uncertain as spills largely due to crude oil theft and unrest continue in the Niger Delta. The country’s production stood at 1.87mb/d in March. All together, oil production from the Organisation of the Petroleum Exporting Countries, OPEC, dipped by 30,000 barrels per day in June to 29.94 million b/d, according to the latest Platts survey of OPEC and oil industry officials and analysts. The survey showed Iraq’s output plunge of 160,000 b/d was largely offset by production increases from several other OPEC member countries. ?”Small though it may be, a dip in OPEC output is the last thing the consuming world wants to see,” said John Kingston, Platts global director of news. “ OPEC itself sees the call on its crude averaging 30.4 million b/d in the second half of this year, so any drop in production from the organisation – even an involuntary one – could be viewed as a move in the wrong direction.” The 40,000 b/d boost from Libya in June marks the first increase since the beginning of the year, when output was estimated to

have risen to 530,000 b/d in January from 250,000 b/d in December. Libyan production declined steadily in recent months as the stalemate between the authorities in Tripoli and the protesters occupying oil facilities and blockading ports continued. Production in the beleaguered country has begun to climb again after agreements between the government and the protesters that resulted in the Sharara oil field restarting production on Tuesday and the lifting of force majeure at ports Es Sider and Ras Lanuf on Sunday. But, given the continuing political turmoil and the likely constraints on production as a result of fields having been shut in for long periods, industry sources and analysts are far from optimistic that Libya will be able to restore output to the 1.4 million b/d level achieved during the early part of 2013 any time soon. Iraq’s southern production and export facilities have not been affected by the jihadist onslaught across the northern part of the country in June that has put paid to any hopes Baghdad might have had of resuming exports of Kirkuk crude via the Iraq- Turkey pipeline to Ceyhan. Northern exports, which

averaged 293,000 b/d in February, have been suspended since sabotage closed the pipeline in early March. Baghdad is now entirely reliant on the southern system, which has been blighted by a number of technological problems, not least of which are pumping constraints that are limiting the

volume of crude available for export to around 2.5 million b/d. Saudi Arabia’s output of 9.78 million b/d was highest the kingdom has produced so far this year. OPEC issued its first forecasts for 2015, saying that increased world oil demand would be met

entirely by non-OPEC producers and that the call on OPEC oil would drop by 300,000 b/d to 29.4 million b/d from 29.7 million b/d in the current year. During the second half of this year, however, OPEC expects demand for its crude to average around 30.4 million b/d.

Govt proud of Nigerian Content achievements –Alison-Madueke

he Federal Government has commended the achievements of the Nigerian Content Development and Monitoring Board, NCDMB, within its four years of existence, describing the agency as a major contributor to the transformation agenda of President Goodluck Ebele Jonathan. Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, gave the commendation while fielding questions from journalists after visiting the headquarters of the Board in Yenagoa, Bayelsa State.

According to her, “we are all extremely pleased at the Federal level with the various achievements this Board has recorded within this period of time. It is quite clear from our various movements particularly when we go to international fora and see the numbers of Nigerians that are now exhibiting the services they deliver to the industry. It is progressing robustly every year and going from strength to strength. Within Nigeria, the success of Nigerian Content is incredible.” The Minister also underscored the adoption of the Nigerian Content philosophy by other

sectors of the economy like the Ministry of Communications Technology and Ministry of Power as further proof that that the implementation of the Act has been effective. She said, “the fact that Nigerian Content policies are about to be deployed in various parts of the economy and ministries as well want to copy and learn from the Ministry of Petroleum is one of the things we can be actually proud of. It is one of the strengths of the oil and gas sector in the President Jonathan’s administration and we are very pleased with it.”

Oil

2014 August, SweetcrudeReports

Oil theft, piracy threaten nation’s crude revenue ...Nigeria overtakes Somalia in piracy ...Bunkering blamed on inability to build and maintain refineries

Military personnel oversee security in the Niger Delta OSCARLINE ONWUEMENYI

iracy off the coast of West Africa has now overtaken Somali piracy, a report by the International Maritime Bureau, IMB, and other seafarers' groups say in a report. According to the report, maritime piracy was now more prevalent off the coast of West Africa than around Somalia. This, IMB, said is partly because an international naval task force had been patrolling the coast off Somalia. According to the report, 966 sailors were attacked in West Africa in 2012, compared with 851 off the Somali coast. West African pirates mostly attack fuel cargoes and the crews' possessions, often resorting to extreme violence. Five of the 206 hostages seized last year off West Africa were killed, the document says. The piracy problem off the coast of West Africa highlighted by the IMB report is, overwhelmingly, a Nigerian problem. But it is also partly because of the peculiarities of the Nigerian economy and widespread corruption in the country. The report further notes that maritime piracy off West Africa differ from that off Somalia and may eventually prove harder to deal with.

“In the Somali Basin there is a large concentration of patrolling warships - from the US Navy 5th Fleet, Nato, the EU and others - as well as reconnaissance aircraft, all acting in coordination. But in the Gulf of Guinea, there is not one but several national coastlines to patrol with no single unified policing body. “Somali pirates generally aim to capture a ship with minimum casualties then hold the vessel, its crew and cargo to ransom for millions of dollars, sometimes for as long as two years. West African pirates tend to be land-based criminals, mostly from Nigeria, who look to steal the cargo and any valuables they can find in a quick grab-anddash operation, often staying onboard for less than a week. International efforts to tackle piracy off West Africa have been slow to take effect,” the report states.

he report, entitled, 'The Human Cost of Maritime Piracy 2012', was released by the International Maritime Bureau, the Oceans Beyond Piracy, OBP, project and the M a r i t i m e P i r a c y Humanitarian Response Programme, MPHRP. It says that despite the growing number of pirate attacks in West Africa's Gulf of Guinea region, "the area has

not received the attention that was brought to Somalia". Pirates typically target fuel cargo, selling it on the lucrative black market. "In Nigeria, money moves quite quickly, unlike in Somalia," one seafarer is quoted as saying in the document. "In Somalia, it would take months. In Nigeria, the pirates take our (oil) cargo and the money of the (shipping) company. It would take only weeks, it is quite fast." The highest risk area for pirate activity in West Africa is off the coast of Nigeria, by far the biggest country, and oil producer, in the region. “Because successive governments there have failed to develop sufficient domestic oil refining capacity, Nigerian waters are full of tankers exporting crude oil and importing refined petroleum that are vulnerable to attack,” says a BBC report on the matter. Corruption and, until recently, armed rebellion in the oil producing areas, have led to the development of an entire, well-organised industry for stealing - or "bunkering", as it is known in Nigeria - oil products, he says. Meanwhile, the Federal Government has expressed its resolve to effectively fight the growing activities of these pirates and oil thieves

Because successive governments have failed to develop sufficient domestic oil refining capacity, Nigerian waters are full of tankers exporting crude oil and importing refined petroleum that are vulnerable to attack,” says a BBC report on the matter operating around its coastlines. The country losses millions of dollars every month due to piracy and oil bunkering.

ormer Group Managing Director of the Nigerian National Petroleum Corporation, NNPC, Mr. Andrew Yakubu recently disclosed that President Goodluck Jonathan has granted approval to the Corporation to engage in legal oil bunkering as a way to effectively checkmate activities of crude thieves on the nation’s international waters. Yakubu said the nation was in dire need of reputable and legitimate bunkerers if the incidence of illegal bunkering and oil theft is to be reduced to its barest minimum.

“There is a legal type of fuel bunkering, permitted by law and done within the ambits of industry-sanctioned processes. Unfortunately, this legal bunkering has been overshadowed by the many illegal bunkering activities that are carried out across our waters, causing untold harm to our economy and environment,” he stated. The process of crude oil theft includes bursting of oil pipelines, tapping into flow lines, tapping from abandoned well heads and theft at export terminals. The aim of the oil thieves is to exert maximum destruction of pipelines well heads and other installations from which crude is extracted illegally and transported through tankers, vessels of jerry cans to locations where it is either refined into diesel, petrol or exported.

Oil

2014 August, SweetcrudeReports

Oil: Swiss traders short-changing Nigeria, other African nations -Report

Oil workers OSCARLINE ONWUEMENYI

wiss traders are shortchanging Nigeria and other African oil producers through shadowy oil deals, according to indications by a recent study of the top ten African oil producers. National Oil Companies, NOCs, in sub-Saharan Africa are selling their oil to international traders in shadowy deals, a report by Natural Resource Governance Institute, NRGI, the Berne Declaration and SWISSAID, said. The top ten sub-Saharan African countries covered in the report included Nigeria, Ghana, Cameroon, and Angola. Sw i s s t r a d e r s , i n c l u d i n g Glencore, Arcadia, Mercuria, Gunvor, Trafigura, Vitol and Socar Trading, bought oil worth approximately $55 billion from NOCs in the top ten sub-Saharan oil-producing countries from 2011 to 2013. The sum, according to the report, is equal to over 10 percent of the combined government revenues of the countries considered, and double what they received in foreign aid. Oil worth $37 billion was bought from Nigeria by Swiss companies over the three years considered

in the report. The amount is equal to over 18 percent of the country’s revenues. “A handful of companies are buying public oil that’s worth 10, 15 or 20 percent of government revenue and only a very small circle of insiders know about the transactions,” said Alexandra Gillies, head of governance programmes at NRGI and one of the authors of Big Spenders: Swiss Traders, African Oil and the Risks of Opacity.

One of the Swiss companies, Gunvor, is currently being investigated for money laundering in relation to its purchase of crude worth $2 billion from the Republic of Congo’s NOC at a discounted price of $4 per barrel

he report further noted that the Swiss traders are involved in broader poor governance and corruption. One of the Swiss companies, Gunvor, is currently being investigated for money laundering in relation to its purchase of crude worth $2 billion from the Republic of Congo’s NOC at a discounted price of $4 per barrel.

referred to as “briefcase traders,” some of which are controlled by politically exposed individuals. Other Swiss traders listed in the research have also been indicted in one ‘shady’ deal or the other.

In Nigeria, Africa’s largest economy, government and independent reports suggest that the Nigeria National Petroleum Corporation, NNPC, the state-run operator, has sold crude below market value to its subsidiary based in Bermuda, Calson, where Swiss firm Vitol holds 49 percent stake.

Stressing “Africa’s producers’ lack of many of the checks and balances needed to safeguard the public interest", the authors of the research cited the 2013 Resource Governance Index, which ranks Nigeria, Cameroon, Angola, Equatorial Guinea and South Sudan in the bottom third of the 58 resource-rich countries assessed.

According to the report, NNPC also sells to some entities

While the report recommends that oil-producing governments

and NOCs should shun favouritism in the selection of buyers and determination of the selling price, and also disclose how the state’s share of production is allocated and sold, it maintains that the transactions between African governments and Swiss companies deserve attention “because they are vulnerable to governance risks.”

development that however cast a shadow of doubt on a stop to the opaque deals anytime soon is that the Swiss government last month indicated that trading activities

that dominate the Swiss commodities sector would be exempted in its forthcoming legislation on transparency. “The Swiss government has acknowledged the risks that the sector poses for Switzerland’s reputation and the importance of transparency,” said co-author of the report, Marc Guéniat, Berne Declaration senior researcher. Guéniat laments that instead of working to stop the opaque dealings, Switzerland is proposing a bill that does little to guard against its trading companies’ contribution to the ‘resource curse’. The researcher stressed that Africans need to know about how much of their resources is being sold by the government and how much the government earns in return. Another co-author of the report, Lorenz Kummer, who is a policy advisor with SWISSAID, therefore urged Switzerland to as a matter of urgency take steps to ensure all trading-related payments to governments by Swiss traders are disclosed. “This should include, among other aspects, the volume, grade, date and amount paid for each individual purchase. Otherwise, huge revenue flows like the ones discussed in our report will remain secret,” said Kummer.

Oil

2014 August, SweetcrudeReports

Rejuvenated oil output drives Nigeria's GDP growth

NIGERIA CONTENT INITIATIVE Dr. Ibilola Amao

OSCARLINE ONWUEMENYI

igeria’s crude oil production in the first quarter of the year rose to an average of 2.26 million barrels per day, bpd 20.8 percent higher than the 1.87 million bpd of the last quarter of 2013, according to data released by the Nigerian Bureau of Statistics in Abuja. The upturn in crude oil production bolstered the country’s economy, with the growth rate of real GDP in the first quarter of 2014 rising to 6.21 percent as against the 4.45 percent recorded in the corresponding quarter of 2013. The statistics bureau gave Nigeria’s economic growth expectation as 6.19 percent in 2014, up from 5.5 percent last year, thanks to the rising oil output. However, oil output of 2014 Q1 still falls short (by 1.3 percent) when compared to the average production of 2.29 million bpd in the corresponding period of 2013. Nigeria continues to suffer large scale theft with a recent United Kingdom report putting the country’s losses from such at £7.2 billion ($12.27 billion) annually. Security challenges, vandalism and poor infrastructure, among other factors, also join to prevent the country from reaching its optimum estimated production capacity of 3.2 million bpd. In a recent statement, former Group Managing Director of the Nigerian National Petroleum Corporation, NNPC, Mr. Andrew Yakubu, is optimistic on the improvement of the country’s oil production levels. He stated that the Crude output barrel per day (bpd) is expected to rise further as the government clamps down on oil theft and sabotage attacks on production facilities Yakubu said incessant vandalism of crude oil export pipelines and domestic crude oil and petroleum product pipelines impacted negatively on the economy. According to him, what Nigeria lost in 2013 was equivalent to the total output of Equatorial Guinea and larger than the entire production of Ghana, Congo Brazzaville, Cameroun and Gabon. Yakubu said the shut-ins of such significant production had prompted the federal government to take some drastic actions to tackle the situation due to the negative impact on government’s revenue. “The initiatives included setting aside N15 billion for the purchase of security equipment to checkmate the scourge of oil theft in the Niger Delta, which was approved by the National Economic Council (NEC). “Utilisation of new technology and radar surveillance to boost maritime security and increase sea patrol by the Nigerian Navy. “Inauguration of an Inter-Agency Maritime Operations Coordination Committee to provide synergy among agencies operating in the industry to ensure safety and security in the Nigerian maritime industry. “Provision of air surveillance of Nigeria’s pipelines with modern aircraft manned by Nigerian pilots trained under the Petroleum Technology Development Fund (PTDF) programme. However, these initiatives are in themselves not sufficient to maintain our leading position in oil production in Africa,” he

said. Yakubu said government’s commitment to evolving new strategies to checkmate pipeline vandalism stemmed from the need to improve small field economics, new acreage management systems and a new exploration paradigm shift. Many analyst, however, have expressed worry that there are actually no agreement on the total number of loses in these criminal acts. The Attorney General and Minister of Justice, Mr. Mohammed Adoke noted recently that in the petroleum industry, “reliable statistics are painfully scarce. Actual loss may be more, as these figures make no distinction between stolen or spilled oil. Also, sometimes when an operator talks of loss, one is not often certain that this is in terms of potential production loss in consequence of a shut down.” He noted that, “These losses are primarily attributable to theft, vandalism, bunkering and piracy. The volume and intensity of these activities coupled with the sophistication of their equipment and arsenal lead to the inescapable conclusion that the perpetrators are not only well organised but aided by insiders in the oil industry.

e noted that the recent political history of the Niger Delta region, opaque reporting standards, insincerity on the part of some operators and an obviously out-dated regulatory framework has no doubt worsened the vicious cycle of criminality. In 2013, crude oil losses caused by theft were estimated at about 55, 210 barrels per day or monthly average of 1,656,281 barrels. The losses imply inability to meet planned oil production forecasts. For example, last year, the budgeted projected oil production target was 2.53 million barrels per day (mbpd). But actual output was less than 2.3 mbpd. This has ensured deficit budgeting which has been prevalent in Nigeria as the country has depended mainly on oil revenues to finance its expenditure. For example, in 1970, oil contributed only 26.28 per cent to total revenue while non-oil proceeds was 73.72 per cent. By 2013, the share of oil in total revenue was 75.33 per cent while non-oil was 24.67 per cent. Oil theft has also had impact on the nation’s fiscal buffers as the Excess Crude Account (ECA)) balances dropped from US$9.6 billion in 2012 to US$3.2 billion at end 2013. Its impact on Nigeria’s external buffers (Foreign reserves balances) has been negative. It has moved up from foreign reserve balance of US$43.83bn in 2012 to US$44.45bn at end 2013. As at last month, it has dropped by 15.7 per cent to US$37.45 billion. According to Director General, Budget Office, Federal Ministry of Finance, Dr. Bright Okogu, “If we assume a loss of 300,000 bpd, over a year, net revenue loss to the federation amounts to about N1.4 trillion. This is the budget of at least three key sectors including the entire security, education and works sectors. If shared as statutorily approved, it would have meant a surplus budget for the Federal Government of Nigeria and many states. It would have meant zero government borrowing.”

An OPEC President & Secretary General who was also Minister of Petroleum Resources

t some point in the history of Nigeria, perhaps the height of Nigeria’s glory in the global hydrocarbon industry, a Nigerian with an admirable professional pedigree was nominated as the President of OPEC, served two terms as Secretary General of OPEC and left the highly esteemed position without blemish. That was Dr. Rilwanu Lukman, a cerebral man who accepted our Vision 2020 Eminent Persons Award in 2007 and always made Nigeria very proud. Dr. Lukman was indeed a seasoned technocrat who focused on optimizing Nigeria and Africa’s hydrocarbon assets whilst avoiding undue publicity. He always kept things simple, was neither known for frivolity nor living an exorbitant lifestyle. OPEC is quoted as noting: "He was widely recognized and highly regarded in the global petroleum industry; as a loyal and dedicated man, who had the best interests of Nigeria and OPEC at heart" How did Dr. Lukman manage to maintain his continued relevance with OPEC in Vienna whilst playing a pivotal role in Nigeria for almost 5 decades? Lessons to be learnt is that when simplicity and humility is combined with education, enlightenment, empowerment, engagement and exposure Africans can achieve expertise, mastery and continue to be relevant in their sphere of influence. Prof. Wole Soyinka and Prof. Chinua Achebe are examples we have in the sphere of Literature. Why was Diezanni Alison-Madueke’s nomination for the highly coveted seat of OPEC Secretary General, by President of Nigeria Goodluck Ebele Jonathan, rejected by the OPEC Board who insisted on retaining incumbent Abdullah al-Badri? Obviously, there is little or no correlation between Dr. Rilwan Lukman and Mrs. Alison-Madueke. Whilst her on-going probe in the House and antecedents in the industry over the past few years leaves much to be desired she is the first Nigerian Minister of Petroleum Resources that would work with five Group General Managers of NNPC in four years. Commencing with Dr Mohammed Sanusi Barkindo - Jan 2009; Mallam Shehu Ladan- April 2010; Engr. Austen Oniwon -May 2010; Engr. Andrew Yakubu -June 2012 she is now going to work with Dr Joseph Thlama Dawha - August 2014 who would soon be due for retirement. Mrs. Alison-Madueke is also being accused of fraud, involvement in a fuel subsidy scandal, referenced in deals with the unscrupulous etc. Furthermore, she cannot so easily be forgotten for her role in the 2013/2014 abandoned Marginal Field Bid Round. This brings me to the mess we currently have with the nonimplementation of the OGIC report recommendations as put together by eminent committee members under the leadership of Dr. Lukman. To move Nigeria forward, and if we must save the hydrocarbon industry from gross inefficiency, misconduct, fraud and blatant corruption, we must go back to Dr. Rilwanu’s recommendations of running NNPC as a profitable business rather than a cost centre. Extant laws should be reviewed to reduce the discretionary powers of the President of Nigeria and the Minister of Petroleum Resources, If the Minister of Petroleum and the President of Nigeria can sack the GMD of NNPC and MD of NPDC, just like she did to the former Director of DPR without following due process, then Nigeria’s Oil and gas industry is truly in a spiraling state of decline and there is an urgent need for a bill to be passed into law to stop this sacrilege. It is necessary that new appointment must be subject to key stakeholder vote of confidence. Representatives of: NAPE, SPE, PETAN, LCCI/OPTS, COREN and a nominated representative per host states (wherein oil and gas assets reside) should nominate potential candidates from which members of the upper and lower house can make a selection. To move Nigeria’s hydrocarbon industry forward, a law is required that would ensure that the GMD and Director of DPR enjoy a fixed tenure of service just like the President does. Potential candidates should be identified from middle management level, groomed to have a broad overview of the industry and exposed to the various parastatals that the make up the MPR. At least 3 – 5 candidates should be put forward for consideration. The most competent, widely accepted to industry and known to have the relevant experience, required exposure, pedigree and grooming should be subjected to a meritocratic process that is managed by Human Resources. Persons of unquestionable character and integrity must be chosen to manage Nigeria’s hydrocarbon asset. The process of removal or selecting the GMD or Director, DPR should never again be left to the discretion of the President and the Minister of Petroleum.

Oil

2014 August, SweetcrudeReports

An industrial park

Nigerian oil and gas industrial park scheme (NOGIPS)

o v i n g towards sustainab l e developm ent presents tremendous challenges. Important structural changes are needed to the ways countries manage their economic affairs. For any country to have a sustainable economic growth, development of infrastructure and participation of indigenous companies must be encouraged. Therefore, Infrastructural development should be a key priority in Nigeria’s journey towards development of the Oil and Gas industry and there should be a more strategic approach to tackling its dearth to meet the demands of the industry. In April 2010, President Goodluck Jonathan (GCFR) signed the Nigerian Oil and Gas Industry Content Bill into law to mark a new beginning to support Oil & Gas operations, create the p l a t f o r m f o r industrialization through the development of critical f a c i l i t i e s a n d

infrastructure and accelerate development of indigenous capabilities supporting the Oil and Gas industry. As is synonymous with NCDMB’s innovative spirit and ability to adapt to the latest trends of the manufacturing world, the Board has conducted benchmark studies on how other countries developed capacity for local production of critical goods used in their most strategic sectors. One of such models is establishment of Industrial Parks. NCDMB plans to establish world class industrial parks in strategic communities bearing oil communities. The aim of these industrial parks is to bring economic gains to the door step of oil producing communities. The Nigerian Oil and Gas Industrial Parks Scheme (NOGIPS) is a capacity development initiative to establish physical infrastructure and create enabling environment for low cost production of goods, domiciliation of capacity, technology acquisition, training, creation of

The Industrial Parks when established would be a significant milestone in the continued quest for achieving effective participation of the local supply chain in the Oil and gas sector.

employment opportunities and structured community participation. The Industrial Parks when established would be a significant milestone in the continued quest for achieving effective participation of the local supply chain in the Oil and gas sector. The beneficiaries of the scheme would be Operating Companies, Multinationals, Small and Medium Enterprises (SMEs), Original Equipment Manufacturers

(OEMs) and Oil producing States. The Board is determined through NOGIPS to elevate local SMEs to OEMs that produce industry standard high tech equipments for the oil and gas industry under a shared service and resource optimisation model. The Industrial Parks would thus provide a direct platform for collaboration with the original equipment manufacturers that are now required to manufacture/assemble components in Nigeria, enhance competitiveness of

locally made goods and increase utilization in the Oil and Gas industry. Looking at the current process of transformation of the Chinese economy, the Chinese Government has dramatically changed their country for the better through the establishment of Industrial Parks in different special economic zones. China’s industrial Parks are engines of the country’s booming economy. Initially 15 Industrial parks were established and subsequently authorities expanded the parks. Today, China has about 7,000 Industrial Parks. The primary objective was to attract direct foreign investments and to jump-start an export-led national growth strategy. This has proved to be immensely successful because china has become one of the fastest growing developing zones in the world and the third most developed economy in 2012 by GDP after USA and combined economies of EU (source: CIA world Factbook 2013). The Board continues to receive tremendous encouragement from the HMPR in the implementation of this scheme and we have already received offers for land from states that have keyed into the scheme. In the next few weeks we shall hold an SME fair to select SMEs with strong manufacturing pedigree. They will be supported to form Joint ventures with international OEMs that are currently supplying equipments to the oil and gas industry. These JVs will form the core of business enterprises operating (manufacturing) within the park under a shared services and resource optimisation model. The Industrial Parks when operational, shall bring forth the following benefits; a) create at least 3,000 job opportunities per location, b) attract international vendors with full complements of know-how and technology to the doorstep of oil producing communities c) enhance cost and schedule efficiency of the local supply chain without compromising standards d) attract social and infrastructure amenities to oil producing communities e) meet government’s local content aspirations especially in the areas of in-country value addition, employment generation, technology acquisition and foreign direct investment f) deepen frontiers of Research, development and innovation within Nigeria g) Boost manufacturing an utilisation of made in Nigeria equipments in the oil and gas industry.

Focus

2014 August, SweetcrudeReports

War against piracy, oil theft: NIMASA backed by Airforce, others - Enisuoh

say that we are out there to watch. No, at the same time, we have also placed security personnels in case anything goes wrong, we can respond from our point of location. How many security personnel and locations do you have? That is a security question which we are not going to let go but we have quite a lot, and very good fire power security personnel because we are backed up by the Air Force, we are also back up by the Nigerian Navy, we also have the Nigerian Army with us, we have the Police Force. So, it is a joint operation.

aptain Warredi Enisuoh, Director of Shipping Development at the Nigerian Maritime Administration and Safety Agency, NIMASA, is a man of two worlds. He is both a ship captain and an air pilot. In this interview with KUNLE KALEJAYE, Enisuoh speaks, among other issues, about the recent launch of the Satellite Surveillance Centre by NIMASA to combat piracy and check oil theft in the Nigerian territorial waters.

According to your presentation recently, crude oil theft was pegged between 150,000 and 200,000 barrels per day. Could this figure be correct or are there more unaccounted cases of crude oil theft?

Excerpt: Please, tell us the success story of the recent successful launch of the Satellite Surveillance Centre and its challenges. I think the biggest success story is not the launch of the centre itself. The fact that we can put the (NIMASA) Director General’s idea into reality was the major success story. The DG (Director General) was concerned about having to r u n a m a r i t i m e administration with little or no maritime domain awareness. When you run a maritime administration without a domain awareness, it would mean that you wouldn’t have a clue of what is going on out there in the ocean. So, it was an idea the DG brought up during a social activity and he said that the President (Goodluck Jonathan) agenda is to ensure that we protect this country’s natural resources. How are we going to achieve this? That is where the concept started and he did agree that the first thing to do is that we need to know the perimeter of our territory. Once an individual can know the perimeter of his farm, then he can account for the crops in the farm. He (DG) then tasked us that we must make sure our domain awareness is achieved at all cost in the shortest possible time. In fact, the dream started in 2011 and that was the year I commenced research. That research gave me something to think about everyday outside the work, and it also gave the DG something to look forward to achieve and one good thing about it is that we

Enisuoh were a team here in Nigeria; we dreamt of the idea here in Nigeria, we partnered with some of our friends outside Nigeria and that was how we were able to achieve it. With this particular achievement, we can spur Nigerians here, that research is here to stay. So NIMASA at some point will become a hub of research in terms of the

know, Nigeria has been noted for a lot of pirate attacks, sea robbery and so on, some were real, and some were just possibly flying out there. Then it was very difficult for us to differentiate what was real and what was not real because we did not know what was really going on out there. So, this was one of the reasons the centre was established.

Piracy is a crime always committed in international waters but that which is committed in our waters is called sea robbery. For anything to be considered piracy, it has to be committed in international waters but if it is done within Nigerian waters, then it has to be considered as sea robbery maritime sector. With this satellite that we have put in place as we speak, there are other component to it. The first component is the security component. As you

Therefore, the first reason for setting up this centre was for security reason. The second reason is for safety for all ships doing business in Nigeria waters and then the third reason is for commerce because now we can see how many ships that is in our region; we can now project the direction of our maritime business. Since the surveillance centre was launched, has the rate of sea pirate attacks reduced in our waters? Piracy is a crime always committed in international waters but that which is committed in our waters is called sea robbery. For anything to be considered piracy, it has to be committed in international waters but if it is done within Nigerian waters, then it has to be considered as sea robbery. I can clearly tell you that, yes it has reduced because in June we had literally zero attack; July has just ended, we also had a zero attack. As you can see from the screen out there, we are watching and by watching we are seeing everything in the region, but that is not just to

These figures are just analysis that is coming on ground. I cannot comfortably tell you that as at the time the statistics were taken we really had much cases of crude oil theft because these were presatellite data. But, now we are in the post-satellite data era. Now we can carefully see what is going on, on ground. I can tell you it will reduce because we are not going to use the system to find out how much oil is being stolen but we will use the system to stop people from doing it. How do you intend to crack down on top cartels running this business of crude oil theft? Well, there is a legal aspect to this and what I mean by legal aspect is that anyone caught will bear the arm of the law and that is now left with the legal section to deal with. There is definitely no mercy from the legal angle. We can’t be the person to apprehend and persecute, and the person to judge. That is why our major job is prevention, because it is always better than cure and that is why we always use medium like this to educate the public that this is not the best way to go. Prevention is all part of the way to debar them from going into this business. We are also coming up with other measures of

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2014 August, SweetcrudeReports

Focus

2014 August, SweetcrudeReports

CONTINUED FROM PAGE 13

to keep unemployment rate low and the only way we can keep unemployment low is to maximise the use of our natural resources by reducing the misused or abuse of these natural resources.

encouraging the smaller people in the game to covert their intelligence and ideas towards helping us to solve the problem so that every Nigerian can benefits from the God-given resources that we have.

It is not at if Nigerians are wicked people' It is just that we don’t know and we are never ever worried about what we don’t know and that is the fact of life but it is what you know that enhances your curiosity. We are now at the curiosity stage and with time we will get there and when we get to where we are meant to be then the centre will serve as deterrent to others because they are now aware that NIMASA is watching.

With this surveillance satellite centre in place, will you go into partnership with the IOCs? We are defiantly exploring all the options at the moment. If you look at Shell’s concern at the moment which is pipeline vandalism, this probably occurs on land, but if you look at the word 'NIMASA,' it is Nigerian Maritime Administration Safety Agency. So, we will definitely partner with anybody on the maritime side of it as there are other bodies that take care of the land pipelines protection. In fact as we speak, let me just point out a scenario for you from the satellite. (Pointing at the screen) As you can see here, we can monitor activities going on in this area that belongs to Shell. So, even without any documental partnership, we are watching over their safety. This is the Bonga oil facility and I can tell the vessels surrounding it out there. As you can see from the screen, there are smaller vessels, support vessels, and you see the size (320m), but do you know the stupid thing the fellow has done? He is in a Shell facility and he has switched off his Automatic Identification System, AIS. Despite that the satellite was able to pick him up, so these are the things we don’t want and it is very bad. Therefore, even without formal partnership with anybody, we can still watch over their safety. Is there going to be any formal partnership with DPR in the future? Of course. Like I said, this is just the beginning and a new thing. That is why we are actually at the awareness stage at the moment. Okay, let me send a text message to NNPC telling them that there is vessel within Shell’s facility but the AIS is switched off. (Minutes later some one from NNPC called back while the interview was going on to say he/she will draw the attention of Shell to the development). What is your agency's manpower capacity to response to cases like this? NIMASA is a civil administration and we are not meant to bear arms, so we have to bring on board those that are

I will give you a classical example; two days ago, the Nigerian Navy in partnership with us identified unauthorised vessel lifting crude from our water. We passed it on to NNPC to verify, it was also picked up on the satellite that the ship has switched off its AIS. In fact, since this system was installed, we have interrogated three very large ships, we have impounded little vessels we suspected and those ships have not been able to come up with what they were doing in our waters. This was why I said the rate at which we are going, at some point we are going to need more man power but it is going to be fun.

Enisuoh

NIMASA backed by Airforce, others - Enisuoh authorised to bear arms like the Navy; Police; Army and what have you. They have an allocation to us. At the time we were looking at the current situation on ground, we did not have this capacity, but these forces have never denied us help and they are willing to help us any time as we speak. Does the satellite centre oversee activities in Bakassi, even though it has been handed over to Cameroon? It sees beyond Bakassi. Let me show from the screen here. This is where Bakassi is and we can see what goes on there. Apart from this, we are

It is not as if Nigerians are wicked people' It is just that we don’t know and we are never ever worried about what we don’t know and that is the fact of life but it is what you know that enhances your curiosity. watching over the safety of our territorial waters. We want a situation where our unemployment rate is negative so that the Nigerian child yet unborn is guarantee job like what we have in developed countries. We have

Can the surveillance system see pipelines in the creeks and land? Let us search the satellite together, as you can see these are small roads inside the creeks. You can see some small vessels inside the creeks there which means the satellite can see inside the creeks. What we intend to is to go after larger vessels than smaller ones because a good strategist will need to size up his prey. But the question is, should I go for the 20m size vessels or the 320m size vessel? I would rather go for the big one but we will go after all of them because we have intelligence reports that they are there. But our problem is; who do they steal for? They don’t steal for themselves; they steal for the bigger ones. So if the smaller vessels steal and there is no big vessel to receive, they will abandon their vessels. Are you also working in partnership with Global West Vessel Specialist Limited? Now, I know where this question is taking us to. We have been in partnership with Global West Vessels Specialist Limited since early 2011

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2014 August, SweetcrudeReports

CONTINUED FROM PAGE 15 although I was not here at that time, but it is a Federal Government approved partnership and I will tell you the reasons for the partnership. You need to see the statistic of attacks in our waters, a lot of ships were being attacked even at anchorage, that is to say the attackers had no fear of coming into the anchorage here, so close to West

‘NIMASA backed by Airforce, Navy, Army, Police’

Africa’s largest naval base, which is Western Naval Command. That is to tell you how daring they were. As at that point in time, NIMASA had no single boat working, all the boats NIMASA had were grounded due to bureaucracy or other factors. If you need one boat to work, you have to go and type a memo and by the time the memo gets here, it is either the DG is not around to approve it and so on. This was before the current DG, but meanwhile, the criminals were operating in freedom with out any trace. By the time the approval for the memo gets out, there will be no budget for it and all of NIMASA’s boats were grounded. So, how do you go out there and fight?

Private partnership is the best way now to go. This partnership also plays on the basis of performance, if they don’t perform, then no deal for them. I remember one day when four engines of their boat was bad, within one hour they fixed all four engines and their boat was back in service. In one hour, that is the average time it takes to type a memo reporting what has happened to the boat

looking for data from us and that is why we are asking local institutions to participate. It has also open the skies to us, although Nigeria has been to space before in terms of satellite but they are not as widely publicised and widely opportuned the way this has done. Now, even if you want to invest in Nigerian waters, from this satellite image that we have, you now know what is on ground and then invest in. If it is investing in 25m boat that will be servicing oil companies, you can now count how many 25m boats are around oil rigs now and talk to them if they need more. With this system, you can find out what type of boats are popularly in use in the sector. The investor will now know how to tailor his money to those particular facilities and when those facilities come, they will create jobs for Nigerians. So, you can imagine the scope of job this will create. The next phase is that we want to go out there and encourage people to come and pick statistics and see how they can use those statistics to plan their business in the maritime sector.

Therefore, this DG felt the best thing to do was to get somebody that is outside this bureaucracy that is going to provide the platform to deal with the problem. But what he did was the most intelligent thing anybody can do which is; don’t just call anybody to start doing this and paying him, rather tell the person to provide his service almost for free and see if it will work. That was how Global West came into the scene; they were the only willing person that was ready to do this job for free. The DG tasked them and said, 'if this project works, they will get the praise and the job'. They spent their resources and brought down the illegal activities going on in Lagos anchorage to near nil. The criminals were driven out to the Republic of Benin. But the president of the Republic of Benin came to the President of Nigeria for assistance and the same project Nigeria carried out was replicated there and that was how their harbour was freed in joint operation with their forces called 'Operation Prosperity'.

Is the inefficiency of the Cabotage Act hindering your performance and why has it been difficult to implement? I want to explain something which a lot of people don’t know. The Cabotage Act is supposed to enhance business in our waters. It is not meant to hinder our performance, but to enhance business. A lot of people view NIMASA as the body holding on to the Act but NIMASA is an income generator for the Act. We do not have the authority to disburse the money, but we have the responsibility to account for the money. There are different sides to it, but it is an area you need to see the Executive Director of the Cabotage Act on because he has an enormous view about it.

Enisuoh

The reason why NIMASA trains personnel is to lower the cost of indigenous operators because if you engage a Nigerian seafarer, you don’t have to pay for flight ticket, you don’t have to pay hotel bills. So, it is another way of NIMASA not just creating jobs but also helping the local or indigenous players to lower their operating cost

engines in government. With this beautiful project on ground, what are the prospects for Nigerians? The prospects are quite enormous, but I cannot sit down here and tell you everything, that is the reason why we are looking at the research arm. The research arm is going to tell us the enormous possibilities of what can come out of this. This place will be open to universities' research analysts both home and away, in fact we are already getting calls from international institutions

When is our seafarers going to take over from the Phillipinos? It is NIMASA's vision to continue to train seafarers because if we do not train as you can see, the vessels are there; if we do not train them, how can we take over from the Phillipinos. The reason why NIMASA trains personnel is to lower the cost of indigenous operators because if you engage a Nigerian seafarer, you don’t have to pay for flight ticket, you don’t have to pay for hotel bills. So, it is another way of NIMASA not just creating jobs but also helping the local or indigenous players to lower their operating costs.

Gas

2014 August, SweetcrudeReports

Nigeria targets 500mcf gas expansion for power

Power plant KUNLE KALEJAYE

ne of Nigeria's oil and gas industry strategic focus is to consolidate on the g a s s u p p l y expansion with an additional 500 million cubic feet per day, SweetcrudeReports has learnt. The additional 500 million cubic feet gas expansion is expected to support about 2,000 ?megawatt of power generation. SweetcrudeReports also gathered that Nigeria's gas production at the end of 2013 stood at 7.6 billion cubic feet per day, but this is expected to rise to 8 billion cubic feet per day this year. Minister of Petroleum Resources, Mrs. Diezani AlisonMadueke, said at the recent 38th Nigerian Annual International Conference and Exhibition of the Society of Petroleum Engineers Nigeria Council in Lagos, that besides the increase in gas production, the industry also aims to sustain crude oil and condensate production at 2.388 million barrels per day. She also hinted that the industry will focus on gas flare reduction to about 7 percent with the help of key gas monetisation projects. She stated that gas supply to the domestic market grew to an

all-time high of 1,500mmcf/d, of which 70 percent was deployed to the power sector and 30 per cent to support the manufacturing sector. "The strategic focus of the industry towards achieving the next of its development includes to continue with the Phase VII and VIII 3D seismic acquisition programme in the Chad Basin, complete the processing of the acquired aeromagnetic data that covers the entire frontier basins," the minister said. On other aspects of the industry strategic focus, she said these included: "To complete the critical expansion of the Escravos-Lagos pipeline to two billion cubic feet per day capacity. To complete and commission the 100 mmscf/d Oredo-Pan Ocean gas supply project designed to utilise spare capacity in the Ovade gas plant. "To continue the extension to the North and East gas pipeline via the Akwa Ibom-EnuguAjaokuta-Kano bone gas pipeline project utilising the international Finance Corporation, IFC, loan, Eurobonds and Private funds. ?"Continue with the Ogidigbe Industrial Park project which is expected to start initial construction phase in 2014 that will create over 150,000 jobs at the peak of the construction

activities. And to expand the compressed natural gas project initiative by replicating the Benin success strategy to cover the other geopolitical zones".

negatively impacted the nation's ability to meet its crude oil production target in addition to causing revenue loss, environmental degradation and sometimes loss of lives.

ommenting on crude oil theft, the minister said in 2013, the average figure for crude oil theft and deferment was 215, 000 barrels per day.

"Due to theft-related vandalism, crude oil supply to our refineries remain contained thus affecting our refining uptime and volume.

But, Alison-Madueke lamented that a plethora challenges have

"In other to miligate this anomaly, the option of crude

transportation by marine vessel has been deployed thereby increasing the operating cost of refining by an additional sum of $7.52bbl. "NNPC, in collaboration with relevant stakeholders, organised a security workshop to discuss and proffer str?ategies for improving the security of crude supply and evacuation of refined products to and from the refineries," the minister said.

Gas supply to domestic market rises to 1.5bcf daily

s part of efforts at achieving industrialisation, Nigeria has increased gas supply to the local market from 300 million to 1.5 billion standard cubic feet per day. This, according to the government, is also aimed at increasing electricity generation and domestic cooking gas usage in the country. Former Group Managing Director of the Nigerian National Petroleum Corporation, NNPC, Engr. Andrew Yakubu stated this at a media capacity development workshop in Uyo, Akwa-Ibom State, shortly before his sack by President Goodluck

YEMIE ADEOYE & OSCARLINE ONWUEMENYI

Gas flaring Jonathan. According to him, the gas sector has witnessed significant growth in line with the government’s initiative to further monetise the gas resources of the country. “We are focused on the development and installation of new infrastructures for gas processing, transmission and distribution nationwide. Also

as a result of the intervention gas supply to the Nigerian market has grown from 300 million cubic feet to 1.5 billion cubic feet per day of which almost 70 percent is dedicated to support the power sector. "We have also embarked on the most aggressive expansion of the nation’s gas pipeline infrastructure for effective transmission and distribution of natural gas, “ he said. Engr. Yakubu stated that work was in progress on the gas industrial park complex being constructed at Ogidigben in Delta State and that the ground breaking ceremony to commence the construction work was currently being arranged.

2014 August, SweetcrudeReports

Gas

A gas facility

How BG, ConocoPhillips withdrawal affects LNG projects - NNPC YEMIE ADEOYE & OSCARLINE ONWUEMENYI

technological components of the project in order before it could enter into such agreements.

h e F e d e r a l Government has admitted for the first time the negative impact of the divestment and withdrawal of multinational oil and gas companies from two major liquefied natural gas, LNG, projects in the country.

“So many decisions precede the signing of FIDs. Nobody takes a major decision like this when there is even one iota of doubt. That is how projects are done all over the world. So, you continue to develop the project but if one of your major players pulls out, that may jeopardise everything,” he said.

Ex-Group Managing Director of the Nigerian National Petroleum Corporation, NNPC, Mr. Andrew Yakubu, made this admission days before he was relieved of his post on Friday, August 1, 2014.

Yakubu explained that the government had reached the point of signing the final investment decision on the Brass LNG last year when ConocoPhillips bailed on the project, taking along its technology partners for the project.

“The new LNG projects have suffered significant disruption following the withdrawal of Conoco-Phillips and British Gas (BG) from Brass LNG and OK LNG respectively. We have restructured the projects to ensure the attainment of final investment decision within the available global market window available,” Yakubu said as he spoke on the status of the proposed Brass LNG and Olokola LNG projects.at a workshop for energy journalists in Uyo, Akwa Ibom State. He maintained that the delay in the signing of final investment decisions, FID, for the two projects was also as a result of government’s insistence on getting all the technical and

He further explained: “As shareholders and investors, you cannot just continue with such a humongous project. Where are you going to get the money from – over $20 billion? If you take 70 percent of that out, you know what it means. Of course, you also have to be sure that you know who the new player is before you can go in. if you are a player in that sector, you have to be certain that the technology you are going to get is guaranteed with full support. Those discussions have been delayed because we cannot procure this technology” Conoco-Phillips was the

technology provider and the licensor for the Brass LNG until it withdrew its license last year over unresolved issues with the Federal Government. According to Yakubu, government had been forced to restructure and re-strategise its operation in the LNG business to enable it achieve its objectives for the industry. “At the end of the day, everything has turned out to be a blessing in disguise for us. This is because we are aware that another African country, Angola, is using Conoco-Phillips technology to develop its LNG, and we are learning from their

experience. “So, we set up a team to review that technology so that we do not make a mistake. We won’t like to get the country to make billiondollar investments only to have hitches along the way or go into litigation. So it’s better to take our time to do the right thing. We want to make sure that all the parameters are right before we take that decision,” he stated. He further noted that the nation’s gas sector has also witnessed commendable improvements in line with the government’s initiative to further monetise the gas resources of the country.

“We are focused on the development and installation of new infrastructure for gas processing, transmission and distribution nationwide. As a result of the interventions, gas supply to the Nigerian market has grown from 300 million cubic feet per day a few years ago to an all-time high of 1500 million cubic feet per day, of which almost 70 percent is dedicated to support the power sector. “In the same period, we have embarked on the most aggressive expansion of the nation’s gas pipeline infrastructure for effective transmission and distribution of natural gas,” he said.

'Power generation to put gas at rightful place'

he Nigerian Gas Association, NGA, is optimistic that the current private sector-driven power industry in the country will propel the utilisation of the nation's abundant natural gas and ensure its place as the core factor in resolving Nigeria's perennial power problem. President of the association, Mr. Saidu Mohammed, who made this known recently in Lagos, was of the view that gas has received increased interest in Nigeria in the last few years as a result of the development of the power sector. “With at least 70 per cent of Nigeria’s power generation facilities built to be gas-fired, the demand for gas for this new market is set to put gas in its

rightful place as the core driver in the efforts to bridge the power supply deficit in Nigeria,” Mohammed said. According to him, “The obvious challenge that faces the Nigerian gas industry is to ensure greater penetration of gas into other parts of Nigerian regional locations and to sustain gas use in such a way that gas viably displaces other fuels in the energy mix”. In the coming years, he said, the challenge would centre around how to find, develop, process, transport and distribute sufficient gas for the to power sector as well as industries and homes, in such a way that gas is accepted by the average Nigerian as the energy source and feedstock of first choice.

FeedBack

2014 August, SweetcrudeReports

A tale of two nations While Nigeria dithers, Mexico makes progress with petroleum industry reforms, ONOAKPOMA OHIMOR writes

Nigeria

i g e r i a ’ s Petroleum Industry Bill, PIB, appears set to achieve a feat – the longest pending bill in Nigeria’s legislative history. While it is true that landmark and popular legislations take time, they do not take forever or remain pending from one legislative assembly to another. A similar legislation, the Electricity Sector Reform Act of 2005, which birthed the slow and steady change in the electricity industry, took several years in the works before it was passed. The PlB, which equally promises to transform the petroleum industry, has been in the works for over six years and appears set to survive two consecutive legislative houses (2007 to 2011 and 2011 to 2015). With the 2015 electioneering approaching, prospect of its enactment by the present administration is dim, to say the least. Between Mexico

Nigeria

While our esteemed National Assembly grapples with the bill and continues to offer promises of passing the bill sooner than later, it is

instructive to know that Mexico, another oil producing country and soon to be a major competitor for international oil companies, IOCs' investment funds with Nigeria, has within the last few months passed a number of legislations aimed at opening up her petroleum industry to private companies. Despite opposition from leftist parties, Mexico’s Congress have swiftly passed a series of legislations that will end over seven decades of government ownership, and exploration and production monopoly enjoyed by state owned Petroleos Mexicanos, PEMEX. The bills just like in the case of Nigeria seeks to transform Mexico’s petroleum industry into a competitive one and spur production and reserves which have been on a downward run for many years in the later In addition to the similarities in the goals and objectives of the bills, a number of other similarities exist between the two nations as far as the petroleum industry is concerned. Chief among which are the heavy dependence on the petroleum sector for government revenue; largely opaque

M ex

national oil companies which straddles every aspect of the industry with sub-optimal performances. While Mexico’s congress has passed the reform bills in less than six months, Nigeria’s national assembly has dithered for years. With Mexican bills specifically designed to attract investments, it won’t be surprising if a good chunk of the funds realised from divestments by the IOCs from Nigeria’s onshore blocks flows into the North American country’s petroleum industry in the coming months as the IOCs are expected to play in the country’s prolific offshore basins.

ico

With Mexican bills specifically designed to attract investments, it won’t be surprising if a good chunk of the funds realised from divestments by the IOCs from Nigeria’s onshore blocks flows into the North American country’s petroleum industry in the coming months as the IOCs are expected to play in the country’s prolific offshore basins.

Who or what is holding legislative arms of the PIB? government, the This is the million dollar administration’s lethargic question well-meaning complacency defies any sane Nigerians are asking. If the rationalisation. Equally PIB, which has been touted as blameworthy is the cohort of the elixir that will deliver the conniving industry industry from the strangleoperatives who benefits from hold of wastage and the status quo. inefficiencies and ensure Beyond the blame, however, Nigeria gets optimal value from its natural resources, the non-passage of the PIB why has it remained in the after so many years does not pending tray of our legislators reflect positively on us as a nation. If Nigeria is to be for over six years. taken seriously by would-be The blame rest squarely on investors and if Nigerians both the executive and

are to get the most of their naturally endowed resources, there is need to move with speed on the PIB. To all parties concerned, Nigerians deserve a better deal. IF THE PIB IS GOOD, LET IT PASS. Onoakpoma Ohimor is a financial consultant based in Lagos and can be reached at oohimor@gmail.com

Power

2014 August, SweetcrudeReports

New gas price may lead to increased electricity tariff

Gas facility OSCARLINE ONWUEMENYI

here are fears that the projected new increase in the price of gas supplied to power generating companies may ultimately lead to an increase in electricity tariff paid by consumers, with the ongoing review of the Multi-Year Tariff Order, MYTO, by the National Electricity Regulatory Commission, NERC. NERC recently announced its approval of a new benchmark price of $2.50/mcf for gas supply, and $0.80/mcf as transportation cost for new capacity, from 2014. The new benchmark is expected to rise with US inflation annually. The increase in gas prices was disclosed by the Chairman of NERC, Dr. Sam Amadi, during a recent briefing in Abuja, where he noted that the price review was done to reflect the current cost of gas production. Amadi noted that the new gas price and the Central Bank of Nigeria, CBN, expected intervention in gas supply in

the power sector are contingent on and have been captured in the Multi-Year Tariff Order. The MYTO is a five-year tariff recovery plan, which is based on capturing the real cost of power production. He said that, “Part of the agreement with the new owners (power generating companies, GENCOs, and distribution companies, DISCOs) is that when they come and take over the assets, they will verify and conduct their losses studies, and NERC will equally verify to ensure that our loss projection is the same as their own, and what follows from that study is a review of the MYTO. “That process is ongoing, therefore both the new price for gas and the CBN support are part of the cost in the industry that the new review of the existing MYTO model will address. Essentially, it is part of the plan to review the losses and get to a more cost-reflective tariff,” Amadi explained. He argued that the $2.50/mcf for gas was based on the real cost of production of gas or

other sources of power, which is benchmarked against the prevailing global market rate. “The price of $2.50/mcf is deemed to be a reasonable price when you consider the cost of gas processing and what other industries pay for gas. The price was arrived at through consultation with both the gas producers and the generators, and the power people are prepared to pay a cost that will ensure a much more sustainable supply of gas,” Amadi stated.

he NERC boss further stressed that the projected clearance of the legacy debts owed by power generating companies to gas suppliers by the Central Bank would not be another form of subsidy or windfall for the companies. He said: “The money supplied by the CBN is not going to be a windfall at all. Those gas costs are stranded costs most of which didn’t necessarily happen under new owners’ watch. Secondly, the interim rule which we were running

That process is ongoing, therefore both the new price for gas and the CBN support are part of the cost in the industry that the new review of the existing MYTO model will address. has provided for shortfalls in revenue, and part of the provision is that those will be recycled back in the new tariff. “It means that the N25 billion, or whatever is finally agreed as the actual debt, will still be paid by the distribution companies through the tariff process. So, it is like an intervention to secure for us confidence in the gas market, then the ultimate responsibility will be on distribution companies. Essentially, no one is being letoff here and there is no windfall for any successor company.” Speaking earlier at a press

briefing, the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, had revealed a strategic multiagency collaboration to fasttrack a sustainable supply of gas supply power generation companies and ensure improved power supply in the economy. According to the minister, a review of gas pricing is now implemented to further reflect the market value. “The Ministry of Petroleum Resources and NERC are in ongoing deliberations to finalise work to ensure that the pricing mechanism of gas-topower will reflect market value.

2014 August, SweetcrudeReports

Power

Abuja at night

Govt sees improvement in power generation by year end OSCARLINE ONWUEMENYI

he Federal Government expects an improvement in power generation in the country resulting from its recently-announced integrated and inter-agencydriven measures to revamp its gas-to-power initiative and ensure adequate and sustainable supply of gas to power stations. The new measures, on which the Ministry of Petroleum Resources, Ministry of Power, the Central Bank of Nigeria, CBN, the National Electricity Regulatory Commission, NERC, and the Nigerian National Petroleum Corporation, NNPC, are collaborating is aimed at addressing outstanding issues around gas pricing, legacy debts to gas suppliers and fasttrack additional gas supply, particularly in the short term. At a press conference in Abuja, the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, stated that working together, the two ministries and agencies of government had "developed additional interventions that will address outstanding issues around gas pricing, including

fast-tracking additional gas supply development, particularly in the short term". “It is expected that barring unforeseen developments these interventions will add at least 370mmcf per day of gas and assure a generation capacity of at least 5,000MW within four to five months,” she added. The minister further disclosed that NERC has approved a new benchmark price of $2.50/mcf for gas supply, and $0.80/mcf as transportation cost for new capacity, from 2014. She added that the benchmark will rise with US inflation annually. “In addition to the new price, NERC will require firm commitments from gas suppliers that they will supply the agreed quantities of gas to generation companies as long as payment terms are met. “NERC is presently concluding the review of the Aggregate Technical Commercial and Collection (ATC&C) losses studies submitted by the distribution companies. This will be followed up by a review of the revenue requirement for the power sector that is to be covered by the revised MultiYear Tariff Order (MYTO)

path. “While the detailed tariff is being worked out, NERC reaffirms its commitment to ensure cost recovery for all prudent and efficient operators,” the Minister added. Furthermore, she noted, to give confidence to stakeholders in the gas sector regarding the willingness of the power sector to settle its outstanding debts for gas, the Central Bank of Nigeria (CBN) will support initiatives to clear up the most recent gas-related debts of the power sector. “Specifically, the CBN is looking at banking sector-led measures to pay off N25bn of debts owed to gas suppliers. This will be subject to reconciliation efforts and adequate provision for this support in a revised MYTO that ensures repayment within five years. “The Central bank will also play a key role in financial arrangements that guarantee payment for gas supply by the power sector,” she revealed. Alison-Madueke stated that in addition to the review in pricing and debt payment, the Ministry of Petroleum Resources is focusing in a targeted manner on a number of gas supply projects that will

In addition to the new price, NERC will require firm commitments from gas suppliers that they will supply the agreed quantities of gas to generation companies as long as payment terms are met. help cushion the effect of supply shortage. “These projects which are at various stages of maturation, but which will be concluded before the end of the year, should unlock additional 370mmcf/d assuring us of a total of 5000MW (inclusive of hydro) within the next five months,” she said. In order to minimize disruptions to supply, she said the NNPC has also concluded a harmonization plan of the maintenance schedule of all gas plants from various suppliers, adding that all planned maintenance will be carried out between August and September this year. She observed that currently,

about 750mmscf of gas is supplied to the power sector, resulting in an aggregate generating capacity of 4000MW. “However, various outages reduce the actual availability of power,” she added. The Minister noted that the “problem of inadequate gas supply is one that has been ongoing for almost 20 years, and was inherited by this administration. Since then, various interventions have been put in place to bridge the supply challenge.” She added that gas supply has grown significantly in the last two years to about 1500mmcf per day.

2014 August, SweetcrudeReports

Power

Power essential to unlock economic potentials –CBN Governor

CBN head office in Abuja

OSCARLINE ONWUEMENYI

he Central Bank of Nigeria, CBN, would be paying off about N25 billion owed by power generating companies to gas producers in the country in order to remove the air of uncertainty in the sector and ensure gas is supplied to keep the economy thriving, the CBN's new governor, Mr. Godwin Emefiele, has promised. He said the Bank had always sought ways of supporting the power sector, describing the sector as “very essential to unlocking the economic potentials of the country”. Emefiele, who said CBN's payment of the outstanding debts will serve as a guarantee to suppliers and give the ailing sector a needed boost, described the action of the Bank as “sowing some seed” and “providing a form of intervention at concessionary prices to support the endeavour to provide power to Nigerians and help in growing the economy.” Speaking at a press briefing organised by the apex bank in collaboration with the Ministry of Petroleum Resources,

Ministry of Power, the Nigerian National Petroleum Corporation, NNPC, and the Nigerian Electricity Regulatory Commission, NERC, in Abuja, Emefiele noted that to give confidence to stakeholders in the gas sector regarding the willingness of the power sector to settle its outstanding debts for gas, the Central Bank will support initiatives to clear up the most recent gas-related debts of the power sector. “Specifically, the CBN is looking at banking sector-led measures to pay off N25 billion of debts owed to gas suppliers. This will be subject to reconciliation efforts and adequate provision for this support in a revised MYTO (Multi-Year Tariff Order) that ensures repayment within five years. “The Central Bank will also play a key role in financial arrangements that guarantee payment for gas supply by the power sector,” he revealed. Emefiele maintained that the Bankers’ Committee, BC, has called for more actions towards the sector at its recent meetings, and that this led to the CBN governor being asked to continue engagement with the Ministries of Petroleum

The Central Bank will also play a key role in financial arrangements that guarantee payment for gas supply by the power sector, he revealed

Resources and Power. “Our interactions with stakeholders revealed that there are some outstanding legacy debts of about N25 billion, and we thought that as a financial catalyst in this process, we should give support by ensuring that the existing gas suppliers are given confidence by paying off these outstanding debts” he added. According to him, the CBN as well as the deposit money banks will “seek ways to set up an SPV through which this debt of N25 billion will be paid to gas suppliers, and thereby give them the confidence to continue to produce gas which is badly needed to power the generating plants. The CBN governor further

stated: “Power is very essential to unlock the potentials of the Nigerian economy, and to do so we felt that it is important for us to begin to learn about the issues that are militating against the adequate supply of power for the economy to thrive. “This is why we are engaging in this collaboration with the two ministries of government directly responsible, as well as with NERC and the NNPC, to ascertain areas we can come in to ease the bottlenecks and give the sector a shot in the arm”. He further noted: “We have found out that investors that would have liked to come into the sector have been queasy about the gas pricing

modalities; many of them believe that the price of gas is not competitive enough as per what obtains elsewhere in the world. This is the reason we have decided to intervene in such a manner. “We are hoping that with the adjustment in the gas pricing, it will make the sector more competitive for existing and potential producers, and of course, the banks will be more than ready to come in and act as financial catalysts, which is part of their obligation to growing the national economy". The Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke recently stated that in addition to the review in the price of gas and debts payment by the CBN, the Federal Government is focusing on a number of gas supply projects that would cushion the effect of supply shortage. “These projects which are at various stages of maturation, but which will be concluded before the end of the year, should unlock additional 370mmcf/d assuring us of a total of 5,000MW (inclusive of hydro) within the next five months,” she said.

2014 August, SweetcrudeReports

Power

Cost-reflective power tariff not possible in Nigeria now -BPE

Ihovbor power station

t is currently not possible to have a costeffective tariff structure in the power sector, the Director General of the Bureau of Pubic Enterprises, BPE, Mr. Benjamin Dikki, has said. Dikki made this disclosure in response to clamour by the new investors in the nation's power sector for a hike in tariff that would give them increased earnings to compensate for the high cost of doing business in the sector. The BPE boss, who stated this in Lagos while on postprivatisation visit to the Eko Electricity Distribution Company, maintained that a cost-reflective tariff might not be possible until a significant improvement in power supply had been attained. He stressed that as much as the BPE and the Nigerian Electricity Regulatory Commission, NERC, would be willing to look into the possibility of having a costreflective tariff in the industry, the present power supply situation in the country would not make this possible for now. But, he revealed that the Federal Government was currently preparing a bill aimed at providing a legal framework for the new

companies in the power sector to operate and collect their due revenue without hindrance. The bill, which is undergoing scrutiny in the office of the Attorney General of the Federation? also aims to provide stiffer sanction for perpetrators of energy theft, bill defaulters and vandalism of electricity equipment, Dikki said. According to him, those who engage in these acts were saboteurs of the development of the privatised power sector. He stated that it was the responsibility of the Federal Government to provide an enabling environment for the new electricity companies to carry out their business activities without any disturbance or distraction, adding that development in the new Power Holding Company of Nigeria, PHCN, successor companies since the takeover by private investors pointed to a bright future for the industry. He noted that initiatives such as the technical partnership with a global brands like the TATA Group of India and KPMG, exploration of alternative sources of power supply through embedded generation and novel metering plans, among other innovations by Eko Electricity

Distribution Company, could not have been achieved under the old monolithic structure of

PHCN within a time frame of less than a year.

Renewable Energy: Lagos ready to partner investors

he Lagos State Government has expressed readiness to partner with investors in implementing a framework that would harness its renewable energy resources. The framework is expected to encourage and guide the development of renewable energy projects by both the public and private sectors. The Permanent Secretary, Ministry of Energy and Mineral Resources, Mrs. Regina Obasa, dropped the hints at a Community Enterprise Development Conference in Ikeja, Lagos. Mrs. Obasa, who represented the governor of the state, Mr. Babatunde Fashola, at the event said Lagos, being the commercial and economic capital of Nigeria and a mega-city, required a lot of energy to thrive. â&#x20AC;&#x153;Lagos requires adequate

KUNLE KALEJAYE access to energy for economic transformation. It is one of the fastest ways to cut rural poverty, boost productivity and accelerate education and health outcomes, both in urban and rural areas,â&#x20AC;? she said. According to the permanent secretary, Lagos required a minimum of 10,0000 megawatts of electricity daily but hardly get 700 megawatts from the national grid. To address the inadequacy, she said, the state government was investing in independent power projects, IPPs, to take care of government offices and establishments, thereby releasing more power to Lagosians. While decrying Federal Government's ineffective policies in the area of electricity generation, she called for a legislation that would allow each state of the federation to

generate and transmit its own electricity for its citizenry. She also called on investors to take advantage of abundant renewable resources like solar, biomass, wind, hydro and tidal waves, given their low greenhouse gas emission coefficients and primary energy factors to ensure availability, accessibility and affordability to modern energy for economic and commercial activities. Permanent Secretary, Ministry of Local Government Establishment and Pension Office, Mr Ashimi Jamiu Adewole, who declared the event open, called on the Federal Government to put in place policies that would protect the intellectual property of Nigerians so as to encourage others to develop and build up infrastructures in the renewable energy sector of the economy.

Finance

2014 August, SweetcrudeReports

Electric transformer

Nigeria targets N2.24tr investment to boost power supply IKE AMOS

he Federal Government says the country needs an annual investment of US$14 billion (about N2.24 trillion) on energy and related infrastructure to address the epileptic power situation in the country. Speaking on the sidelines of the recent US-Africa summit in the United States, Minister of Finance and Coordinating Minister of the Economy, Mrs. Ngozi OkonjoIweala, said the government was concerned about making the energy sector more transparent and attracting the much-needed foreign investment. Also speaking, Minister of Power, Professor Chinedu Nebo, advocated increased investments in gas and solar panels as a means of improving the access of rural

communities to electricity. According to Nebo, the falling costs of solar have made it increasingly attractive to African policymakers. He said, “Solar is gaining parity with other generation sources and it can meet the gap for communities far from the national grid. “There is no doubt that the potential is there. Clean coal technology can give us good electricity and minimum pollution at the same time. It is important we let Africa be. Nuclear power is also something Africa can latch onto.” Nebo, however noted that the Federal Government would rely heavily on gas and coal for on-grid power in the coming decades. Sospeter Muhongo, Tanzania’s Minister of Power, emphasised the need for the exploitation of gas resources, estimated at 14.5 trillion cubic metres.

Muhongo added that Tanzania had scrapped plans for more hydroelectric dams, as climate change is set to make water flows unpredictable. Muhongo further stated that coal is expected to take a greater share, along with geothermal and solar in the country. Data from the World Bank revealed that Sub-Saharan Africa has around 80 giga watts of installed power capacity, comparable to Vietnam, adding that the whole of Africa has about as much installed capacity as Belgium. World Bank President, Jim Yong Kim, who was also speaking at the US-Africa s u m m i t , s a i d , “ I t ’s a situation I have referred to as energy apartheid. Right now we have to be serious about what we are going to do to boost energy supply. “And if we find ourselves in

Solar is gaining parity with other generation sources and it can meet the gap for communities far from the national grid a situation where some say ‘no coal, no nuclear, no hydro,’ then we are not serious. The growth of solar and wind is a fantastic development and I think it’s going to grow even more, and we have to make sure the financing is available,” he said.

To this end, the US Agency for International Development, USAID, and the Rockefeller Foundation announced a $100 million global resilience partnership, designed to help African countries cope with the effects of climate change, poverty and food insecurity. Commenting on the partnership, USAID administrator, Rajiv Shah, said, “Disasters and shocks pose an unparalleled threat to the world’s most vulnerable communities and hamstring global humanitarian response. “This new bold partnership will help the global community pivot from being reactive in the wake of disaster to driving evidencebased investments that enable cities, communities, and households to better manage and adapt to inevitable shocks.”

2014 August, SweetcrudeReports

Finance

eplat Petroleum Development C o m p a n y, t h e N i g e r i a n upstream oil operator, saw a 26 per cent drop in profits in the first half of the year owing to lower revenue. According to the company, its half-year pretax profit fell to $156 million, down 26 per cent from $210 million a year earlier. In its first interim report following a debut $500 million IPO in April, the Nigerian firm reported that its gross revenue also dropped 7 per cent to $388 million during the period to June 30. This is as against $419.4 million for the comparative period in 2013. Seplat achieved first-half average oil production of 27,375 barrels per day, against 27,183 barrels per day in 2013 and plans to invest around $250 million in 2014. Earlier this year, director general of the Nigerian Stock Exchange, NSE, Mr. Oscar Onyema, had predicted that a stock market debut by Seplat would most likely be followed by a rash of initial public offerings, IPOs, in Nigeria after they stalled in the wake of a 2008 financial crisis. Onyema spoke on the sideline of Africa Investment Summit, saying more oil and gas listings were to follow Seplat’s, and that the development would help solve the sector’s underrepresentation on the

Seplat sees lower revenue, 26% drop in profit Exchange. According to him, the sector currently makes up just 2.6 per cent of market capitalisation versus 14 per cent of Nigeria’s newly rebased Gross Domestic Product, GDP. After Seplat, the sector will make up 5.9 per cent of the bourse, Onyema told Reuters.

Seplat had raised $500 million in its IPO and listed its shares in Lagos and London on April 14. The offering gave Seplat a market capitalisation of $1.9 billion. While none of the foreign oil majors such as Shell and ExxonMobil that have been operating in

Nigeria for decades is listed, only local firms - Oando, Forte Oil, Conoil and now Seplat - have listings coming from the oil and gas sector. Giant cement producer, Dangote Cement accounts for a third of the NSE, followed by the banking sector, which together accounts for 15 per

cent. Seplat’s IPO was the first major one in the market since the 2008 burst. IPOs dried up after a 2008 crash wiped over 60 per cent off the NSE stock market’s capitalisation. This has, however, since recovered, gaining 35 per cent in 2012 and 47 per cent in 2013, but IPOs are yet to resume.

Seplat worker

OPEC slashes oil demand forecast

rganisation of the P e t r o l e u m E x p o r t i n g Countries, OPEC, trimmed its 2014 global oil demand growth forecast for a second consecutive month and said the group managed to increase output in July despite violence in Iraq and Libya, pointing to more comfortable global supplies. In a monthly report, the Organisation of the Petroleum Exporting Countries trimmed its projection for growth in global demand this year to 1.10 million barrels per day (bpd), down 30,000 bpd, citing weaker-than-expected US demand. 'The slow and uneven global recovery continues,' Opec said in the report. In

2014, 'US oil demand remains strongly dependent on the development of the US economy, however the risk is skewed to the downside compared to the previous month.' Opec's report points to even less pressure on supplies in 2015 as partly due to the US shale boom the need for Opec crude will fall, despite faster growth in global demand. The report made no change to 2015's global demand forecast. This year, the lower demand forecast and a higher expectation for non-Opec supply will reduce the forecast global demand for Opec crude to 29.61m bpd, down 70,000 bpd from the previous estimate, Opec said. It left next year's forecast unchanged

at 29.36m bpd. The report also showed Opec's crude output in July rose. According to secondary sources cited by the report, output increased by 170,000 bpd to 29.91m bpd, led by higher supply in Libya and Saudi Arabia. That puts Opec output close to the group's target of 30m bpd. Protests and unrest in Libya, Western sanctions on Iran and fighting in Iraq took their toll on production in earlier months, keeping Opec output sometimes below the target. Although Iraq's northern exports have been disrupted since March, southern exports which are its main outlet to world markets have not been affected by fighting in other parts of the country. The prospect of a further rise in Libya looks uncertain given worsening fighting, say analysts. World oil demand will rise by 1.21 million bpd in 2015, Opec said, unchanged from July.

Opec's report points to even less pressure on supplies in 2015 as partly due to the US shale boom the need for Opec crude will fall, despite faster growth in global demand. The report made no change to 2015's global demand forecast

2014 August, SweetcrudeReports

Finance

Ghana Stock Exchange

Oil refinery

Nigeria earns N62bn from crude refining in one month IKE AMOS

espite the inability of the country’s refineries to produce at optimal capacity, Nigeria earned $388.838 million (approximately N62.214 billion) from local refining of crude oil in the month of February this year. According to the Nigerian National Petroleum Corporation, NNPC, in the month of February, the four refineries in the country were able to process 497,000 metric tonnes of crude oil. In a report covering the month, the NNPC said, “443,000 metric tonnes of dry crude oil, condensate and slop was received by the refineries in the month. With an opening stock of 460,000 metric tonnes, total crude oil available for processing was 903,000 metric tonnes, out of which 497,000 metric tonnes was processed.” The refineries are the Kaduna Refinery and Petrochemical Company, KRPC; Port Harcourt Refining Company, PHRC; and Warri Refining and Petrochemical Company, WRPC. The NNPC put the combined average capacity of the refineries in the month under review at 35.55 per cent, saying their respective

average capacity utilisation during the month was 33.57 per cent, 12.75 per cent and 50.39 per cent for KRPC, P H R C a n d W R P C respectively. A metric tonne of crude oil equals 7.312 barrels of crude, while the average price of crude in the international market is $107 per barrel. In the area of production returns, the NNPC said the refineries turned out a total 415,000 metric tonnes of finished and intermediate products. The NNPC noted that the Pipelines and Products Marketing Company, PPMC, which lifts products from the

A metric tonne of crude oil equals 7.312 barrels of crude, while the average price of crude in the international market is $107 per barrel refineries, evacuated 244,000 metric tonnes of products.

Altogether, the NNPC noted that 35.27 metric tonnes of products were used by the three refineries as fuel while some volume out of this was lost. Consumption as fuel amounted to 6.15 per cent while loss and flare accounted for 0.94 per cent of production. Giving details on domestic petroleum products distribution in the country, the data revealed that NNPC Retail Limited and independent petroleum products marketing companies distributed about 577.13 million litres of various petroleum products in the 36 states and the Federal Capital Territory in February 2014. This, according to the NNPC, showed an increase of

Petrobras net profit dips by 20%

razilian statecontrolled oil company, Petroleo Brasileiro SA, said its profit fell for a fourth consecutive quarter as it continues to grapple with the high cost of subsidizing fuel imports for the domestic market. Second-quarter net profit declined 20% from a year earlier to 4.96 billion Brazilian reais ($2.17 billion), the company known as Petrobras said. Weighing on the company's bottom line was its refining division, which imports

gasoline and diesel fuels and then sells them at below cost to help the Brazilian government battle inflation, a program the government started in 2011 and which has cost Petrobras billions of dollars. Petrobras' imports of oil and derivatives surged 33% in the second quarter from a year earlier to 941,000 barrels a day. The refining division's quarterly loss ballooned to 3.88 billion reais, up 54% from the second quarter of 2013. The fuel subsidy, combined

with a massive investment budget, has turned Petrobras into the world's most indebted oil major. Net debt as of June 30 stood at $109.58 billion, up 16% from the end of 2013. Petrobras said higher interest expenses and a weaker Brazilian real further ate away at its profits in the second quarter. Earnings before interest, taxes, depreciation and amortization, or Ebitda, fell 10% on the year to 16.26 billion reais. Revenues, on the other

83.89 million litres or 17.01 per cent when compared with the total volume of 493.24 million litres distributed in January. The data revealed that NNPC Retail Limited distributed 152.17 million litres, representing 26.37 per cent of the total sales of petroleum products, while the independent marketing companies distributed 424.96 million litres, representing 73.63 per cent. The NNPC stated further, “Distribution by product shows Premium Motor Spirit (PMS) had the highest figure of 390.50 million litres, representing 67.66 per cent of the total, reflecting average daily sales of 13.47 million litres.

hand, rose 12% to 82.3 billion reais, Petrobras said, bolstered by rising production of crude oil. Second-quarter oil output reached 2.05 million barrels a day in July, up 6.4% from March. Brazil aims to be among the world's top five global oil producers by 2020, when it expects to be producing four million barrels of oil a day. Petrobras reiterated its target of increasing oil production by 7.5%, plus or minus one percentage point, in 2014.

Labour

2014 August, SweetcrudeReports

Oil workers

ELUONYE KONYEGWUAEHI

he National U n i o n o f Petroleum and Natural Gas W o r k e r s , NUPENG, has called for a total restructuring of the nation’s petroleum industry as soon as possible to move the sector forward. The union said the starting point for the restructure would be the passage of the Petroleum Industry Bill, PIB, into law by the National Assembly. President of NUPENG, Comrade Achese Igwe, in an i n t e r v i e w w i t h SweetcrudeReports, insisted, however, that before the passage of the PIB, excessive powers given to the Minister of Petroleum, must be expunged, contending that even for a minister, there should be checks and balances to avoid dictatorial tendencies that could

Why we insist on passage of PIB - NUPENG

hamper the growth and progress of the industry. He said: “The PIB will address the issue of divestment. The issue of PIB will address corruption. Another issue we are looking at in terms of divestment processes is the labour issues where Nigerians and their jobs must be protected by virtue of their God-given right as citizens of this country. I want

to say that the PIB must be passed. The PIB should also be able to create a forum where Nigerian investors today, by virtue of the local content act, give power for Nigerians to invest in the oil and gas sector. “We fought for it as a union both NUPENG and Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN). It is now negatively being implemented in the sector, where people want to take over investment, the next thing is that they are sending Nigerians working there back into the labour market even though they know that there is high rate of unemployment in the

c o u n t r y. W h e n w e a r e passing the PIB, and to ensure necessary corrections, these are areas that we have to look at and see how we can create an enabling environment for all stakeholders - workers, investors, government - to be meeting. Stakeholders must have a platform for dialogue to discuss the way forward. He noted that since the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, assumed office the labour unions had been calling for a stakeholders meeting, but that, instead of this, she would hold meetings with "major investors". Igwe queried: "Who are major

investors? What do they have to do with issues facing Nigerians? Our way of living is different from that of the Americans or British or other parts of the world. We have chiefs, have extended family relations and you cannot run away from them. In the UK or America, it is not so. We must begin to look at our peculiarity as a people, and how we can protect our cultures, just like the British are protecting theirs. We are somehow myopic in looking at these issues. We must begin to trace back our existence and look at our environment. Surely, we will pass away, but what are we leaving behind?"

2014 August, SweetcrudeReports

Labour ELUONYE KONYEGWUAEHI

he management o f A d d a x Petroleum Development Nigeria Limited and the Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, have reached agreement on collected bargaining in the company. They have, therefore, signed a new Collective Bargaining Agreement, CBA, ending over eight months of disagreement. The disagreement reached a boiling point when PENGASSAN, on July 30, shut the headquarters of the oil company in Lagos, crippling all activities. To halt continued picketing o f t h e c o m p a n y, i t s management promised accelerated and productive d i s c u s s i o n w i t h PENGASSAN leaders. Following series of meetings, both parties were able to reached agreement on a new CBA. A communiqué from the meeting highlighted part of the agreement: "On Replacement of zodiac boats with surfer boats: Contract for the provision of the surfer boats are in place: Two boats are required, one already mobilised and the second boat is expected to be mobilised in December 2014: A total of eight boat landing are required, three already installed and the balance of five to be installed by December 31st 2014: Replacement of bell 412 helicopter with Sk-76d helicopters: Management and union align with upgrading helicopters from bell 412 helicopter to Sk-76d helicopter: First Sk-76d helicopter was delivered in May 2014: Second Sk-76d helicopter to be delivered in August 2014: The third Sk76d helicopter is to be delivered in October 2014: Eventually all will be replaced gradually.” It added: “Izombe flow station (IFS) canteen, office and living quarters: The project is divided into two phases: Phases 1 involves the refurbishment of the canteen and the office facilities which is on-going and expected to be completed mid-September, 2014: Phase 2 involves renovation of the living quarters for which the job scoping has been completed and expected to commence fourth quarter of 2014.

Addax, PENGASSAN sign new Collective Bargaining Agreement "On Payment of lunch subsidy arrears to Izombe commuters: Management to immediately pay arrears of the lunch allowance from 1st of May, 2014 to 31st of July, 2014: To further continue to pay the lunch allowance within the period that employees do not eat from the canteen: To

discontinue the payment of the lunch allowance when the canteen facilities and the quality of food issues are addressed. "Recall of Health and Safety (HSE) personnel recently sacked: HSE contractors personnel were returned to their employers

due to changes in the company’s HSE strategy and poor performance which now takes the HSE roles to the lines: In line with this new strategy, focal points have been designated; Management would recirculate the list of HSE focal points".

O n p e r f o r m a n c e management system, the communiqué said both the management and union agreed that some legacy issues had arisen over the years and that it would take a little while for this to be addressed.

Addax Petroleum office

Nigeria can't achieve 10,000mw generation by December - Labour

abour leaders under the auspices of Nigerian Union of Electricity Employees, NUEE, and the Senior Staff Association of Electricity and Allied Companies, SSAEAC, there is no way the Federal Government could achieve 10,000 megawatts, MW, capacity of electricity generation by December this year. They were reacting to a report quoting Minister of Power, Prof. Chinedu Nebo as having made the pronouncement, though the minister came out to promptly debunk the report.

NUEE Secretary-General, M r. J o e A j a e r o , w h o maintained that the problem of gas supply to the generation companies has not been resolved, stated that achieving that figure would also be impossible considering other factors. "Is it (the generation of 10,000MW) based on the availability of gas? Is it based on the enhanced transmission network? Is it based on the refurbished distribution network? Where is he (Minister) basing his analysis of giving Nigerians 10,000MW on? Is he talking of sustainable

10,000MW?," he queried as he stressed that the Federal Government has not done enough work to guarantee the target. President, Senior Staff Association of Electricity and Allied Companies, Mr. Bede Opara, on his part, stated that Nigeria could only achieve that through the inauguration of new power stations as he maintained that, for the old ones taken over last year by private investors, "I am yet to know of any that has been rehabilitated to produce that kind of power". The Minister of Power was

also widely quoted in the media to have told a delegation from India that the government would organise a forum for all electricity distribution and generation companies, the Nigerian Electricity R e g u l a t o r y Commission, NERC; Nigerian Electricity Management Liability Company, NEMLC; and Nigerian Bulk Electricity Trading Company, NBET, work out modalities for the achievement of the 10,000MW target.

2014 August, SweetcrudeReports

Labour

ELUONYE KONYEGWUAEHI

s a result of the threat by the Maritime Workers Union of Nigeria, MWUN, to shut the nation’s ports over the menace of petroleum tankers and other articulated vehicles on the access roads to the Lagos ports, especially the ApapaOshodi Expressway, the Federal Government is to step up a standing committee for the evacuation of the tankers and others from the ever-busy road. MWUN had on July 9, issued a 14-day ultimatum to the Federal Government to, among others, evacuate all petrol tankers and other heavy duty vehicles along the access roads to the sea ports, or all ports operations nationwide will be shut. The union in a petition to the Federal Government through the Minister of Transport also demanded the relocation of all the tank farms along the access roads to the sea ports and rehabilitation of all the access roads to the sea ports within the next 14 days for industrial peace to reign in the ports. At a meeting in Abuja called by the Minister of Labour and Productivity, Chief Emeka Wogu, and attended by Minister of Transport, Senator Idris Umaru; Minister of State for Works, Prince Adedayo Adeyeye; Managing Director of Nigeria Ports Authority, Alhaji Habib Abdulahi; representative of the Inspector General of Police, CSP Olusegun Omojuwa, Force Marine Officer and leaders of the union, led by its president-general, Comrade Emmanuel Anthony Nted, it was resolved that a standing Task Force Committee to tackle the matter be set up while palliative measures should be in place within 60 days. “In consideration of the demand by MWUN for immediate palliative measures/works while awaiting the execution of the main contracts, the meeting concluded as follows that sixty (60) days is slated for the completion of the palliative works; the meeting would reconvene in thirty (30) days time to re-assess progress made, and a s t a n d i n g Ta s k F o r c e Committee would be put in place to ensure clearing of

Gridlock on Apapa-Oshodi Expressway

Govt raises Committee to evacuate tankers from Apapa Expressway …Palliative measures on ports access roads to end in two months MWUN agreed to suspend the proposed industrial action and allow the Federal Government time to address and resolve the issues in dispute tankers and trucks from Port Access roads; the Standing Task Force Committee will have MWUN and other relevant stakeholders as members,” a statement from the meeting said. The statement noted that some of the trucks on the road have been moving out of the area gradually and that the Federal Government was already addressing the issues of concern to the trade union by the award of contracts to Julius Berger to do preliminary assessment,

palliative measures, rehabilitation and reconstruction of the roads. 'The issues of removal of tank farms and petrol tankers would involve the input of the Minister of Petroleum Resources, who was unavoidably absent due to some equally important

official meeting, and also, the input and cooperation/action of other stakeholders would be needed. It was therefore concluded that the issues pertaining to the tank farms should be stepped down to allow the Federal Government time to address the issues,” it stated.

The communiqué added that “based on the above understanding and conclusions, MWUN agreed to suspend the proposed industrial action and allow the Federal Government time to address and resolve the issues in dispute.”

SURE-P urges beneficiaries to go for entitlements

h e S u b s i d y Reinvestment and Empowerment Programme, SURE-P, has advised participants in its Community Service, Women and Youth Empowerment Project, CSWYE, to confirm lodgement of their entitlements in their banks. SURE-P's Project Implementation Unit, PIU, domiciled in the Ministry of Labour and Productivity, which made the disclosure in a statement, regretted the delay that led to the piling up of the

entitlements. The PIU said the funds for the payments reached it two weeks ago and that within two days, the disbursements commenced in the spirit of transparency and in consideration of the circumstances of the beneficiaries. “All those who have not received bank confirmation should go to the banks to confirm the circumstances surrounding their entitlements as all necessary documentation was passed on to the banks within two

days of the receipt of the funds. “Participants are also urged to as usual position and portray themselves as ambassadors of the Federal G o v e r n m e n t ’ s transformation agenda and not allow themselves to be used by agents of destabilisation,” the statement said. The PIU further assured that disbursement to beneficiaries would be regularly made for every month as the funds come in.

2014 August, SweetcrudeReports

MKPOIKANA UDOMA

Solid Mineral

2014 August, SweetcrudeReports

Illegal mining OSCARLINE ONWUEMENYI

o ensure strict compliance with r u l e s a n d regulations guiding mining operations in the country, the Federal Government has vowed to shut any mining and quarry firms that is not operating in accordance with the Nigerian Minerals and Metals Act of 2007, Mining Regulations and any other extant mining laws in the country. The Minister of Mines and Steel Development, Arc, Musa Mohammed Sada, disclosed this while receiving the 2013 Annual Report and Audited Accounts of the Council of Nigeria Mining Engineers and Geoscientists, COMEG, from the Chairman of the council, Chief Chambers Oyibo, who led other council members to the Ministry in Abuja. Arc. Sada revealed that the government had recently revoked about six hundred mining licenses due to noncompliance with the relevant laws guiding mining operations in the country. The Minister expressed his pleasure to receive the reports from COMEG, which he described as a strong

Govt vows to shut illegal mining, quarry operations …Revokes 600 mining licences institution that gives strength to the nation’s extractive industries. Arc. Sada lauded the council for fulfilling the requirements of the law that established COMEG as he urged other agencies of government to emulate the Council as this would go a long way in

The council had also commenced the issuance of practicing licenses to financial members in order to ensure compliance with the provisions of relevant laws and regulations of COMEG

monitoring their activities in order to move forward. While lauding the initiative of COMEG in relation to the issuance of practicing licenses to its financial members as well as capacity training, the Minister said the present administration had seen the need for human capital development as one of the requirements of Nigeria’s extractive industries. The Minister noted that, “No matter how much mineral resources a country has, if it doesn’t have the right human skills, the country will not develop”, adding that the country needed the right knowledge and ideas for the minerals and metals sector to develop optimally. He noted the level of preparedness of the present administration towards the development of regulatory bodies, noting that various activities of COMEG were

clear indications of a responsible regulatory body in the country. The Minister assured the council of the Ministry’s support and assistance for it to move to the next level. Earlier in his presentation, the Chairman of COMEG, Chief Oyibo said the presentation of the year 2013 Annual Report and Audited Accounts was in compliance with the provision of COMEG Act part (11) Financial Provision, section 7(3), which required that COMEG prepared and submitted to the Minister, its annual report and audited accounts. H e e n u m e r a t e d achievements recorded by the council during the year 2013 to include conducting a stakeholders’ workshop on mapping of fresh water aquifers in coastal Nigeria, and carrying out monitoring and evaluation of professionals and operators

in mining and quarrying firms in North West, SouthWest and North-Central Zones of the country. He added, "COMEG has introduced pre-registration examination for various categories of members seeking registration in order to set and maintain standards of education and practice. We have also carried out the Induction and Public Registration of three hundred and ninety four (394) members." Chief Oyibo explained that the monitoring and evaluation of mining professionals and operators in some geopolitical zones of the country was carried out to sensitise them on the need to register with COMEG, adding that the exercise revealed that most mining companies have not registered with COMEG as a corporate body and do not have COMEG registered mining professionals in their employment to undertake mining operations.

2014 August, SweetcrudeReports

Solid Mineral

Without steel industry, unemployment'll persist in Nigeria - ISSSAN

he Iron and Steel Senior Staff Association of N i g e r i a , ISSSAN, says unless the nation's steel industry is revived, unemployment problem would persist in the country. According to DeputyGeneral Secretary of the association, Mr Adewale Okesola, who stated this in Lagos, the “death” of the steel industry in the country aggravated the nation’s unemployment rate. This is due to the potential of the industry to create massive employment, Okesola said as he urged the Federal Government to ensure the revival of the various government-owned steel plants across the country. Citing the Ajaokuta Steel Company, ASCON, as an example, he revealed that the plant, if revived, could employ no fewer than 140,000 Nigerians. “If Ajaokuta alone can absorb so much unemployed Nigerians, then we can be sure that the other steel firms, if also revived, would employ much more. “So, let the government ensure the revival of the steel companies scattered around the country. By the time Ajaokuta, Delta, Osogbo, Jos and Kastina steel firms are revived, we will not be talking of unemployment in the country,’’ he said. Okesola added that apart from creating direct employment, the revival of the steel sector would also create indirect employment for millions of Nigerians. Their revival, according to him, would definitely aid the growth of the country’s new automobile industry and the transformation of the epileptic Nigerian Railway Corporation. He said: “Government knows the genesis of the nation’s calamity in terms of unemployment, except if they do not want to be sincere. “If the government can be sincere and focused; if they can pump money such that the steel industry will pick up, we will forget some of our current plagues”. The union’s secretary

stated that lack of commitment, corruption and politicisation of the steel sector, were responsible for its ruin. He added that the problems had also hindered all efforts to

transform the industry. The Federal Governmentowned steel plants located in Ajaokuta, Jos, Delta, and Oshogbo have been comatose following the government's inability to

maintain them and failure of privatisation to sustain them. Nigeria possesses over 2 billion tonnes of iron ore deposits, but the lack of operation of these plants has

seen Nigeria importing about 17 million tonnes of steel and allied products yearly with local steel production, estimated at 2.5 million tonnes, being only from 100 per cent melting of scrap metals.

Iron rods

Nigeria earns N11.9bn from solid minerals export

igeria earned a total N11.9 billion from the export of 7.1 million metric tonnes of solid minerals in 2011, according to the Nigeria Extractive Industries Transparency Initiative, NEITI. NEITI findings showed that "Nigeria exported a total of 7,115,088.50 metric tonnes of solid minerals valued at N11.9 billion during the period under review,” Executive Secretary of NEITI, Mrs. Zainab Ahmed, said at the public presentation of the 2011 Solid Minerals Industry Audit Report in Abuja. Mrs Ahmed, however, spoke of the existence of a disparity between the Central Bank of Nigeria and the Nigeria

Customs as to the value of solid minerals exported and the companies involved. An additional N26.8 billion came into government's purse from companies during the period as taxes, levies and royalty, the NEITI executive secretary stated. The audit report, according to her, indicated that besides the revenue from exports and what the companies paid in taxes, l e v i e s , a n d r o y a l t y, government's actual receipt from solid minerals during the period amounted to N33.1 million. She said the revenue for 2011 represented a major increase over the figures for

the previous years, ascribing the significant increase in earnings to government's growing attention to the sector and increased awareness resulting from the activities of NEITI, especially following its last audit cycle. Explore solid minerals to reap from multiplier effects, govt told The Federal Government has been urged to intensify efforts at exploring more solid minerals to enhance t h e n a t i o n ’s e c o n o m i c growth. President of the Nigerian Institute of Management, NIM, Mr Nelson Uwaga, made the call in Abuja, saying such effort would also

help to create jobs and curtail insecurity. “Government should intensify efforts to diversify the economy by exploiting solid minerals that can be found in every part of this country. “If adequate attention is given to developing the solid minerals, the multiplier effects cannot be quantified. It will enhance job creation for the youths, promote economic growth and curb insecurity,” he said. He maintained that there are "a larger percentage of Nigerians who are youths and they need to be gainfully employed when they graduate from school so that their energies can be channeled to positive engagements”.

2014 August, SweetcrudeReports

Solid Mineral

KUNLE KALEJAYE

he Lagos State Government, through its Ministry of Energy and Mineral Resources, is planning a 'clinical review' of mining methods and its impacts in the state, with a view to ensuring sustainable development. Permanent Secretary, Ministry of Energy and Mineral Resources, Mrs Iyabode Obasa, revealed this recently in Lagos as she restated the government's commitment to ensuring adherence to internationally accepted standards in the mining industry. Lagos is endowed with such mineral resources as clay and silica, which are useful, respectively, for production of ceramics and glass. “In furtherance of the M i n i s t r y ’s m a n d a t e t o ensuring a sustainable mining operation, a clinical review of mining methods and its impacts, taking stock of degraded area as well as putting in place a restoration plan is being put in place by the Ministry,” Obasa stated. The permanent secretary, who spoke while receiving the Environmental Impact Assessment Report and Evaluation of mining sites and document of intending mining companies across the three mining zones in the state, disclosed that the Ministry was poised to ensure that miners in the state operated according to laid down regulations that will ensure sustainable development in the state. She added that to obtain this mining standard, the

Mining site

Lagos plans 'clinical review' of mining operations Ministry has to conduct Environmental Impact Assessment, access proposed mining sites and evaluate document submitted by mining companies in the three sites - Ikorodu, Epe-ibeju lekki-Ajah and Badagry. Mrs. Obasa stated that the objectives of the mining site

assessment and evaluation was also to locate and delineate the extent of land degradation at mining sites, develop a sustainable and specific restoration plan for the identified areas. Other objectives of the mining site assessment and evaluation, according to the

p e r m a n e n t s e c r e t a r y, included to initiate and develop a land use programme for the identified area such as fish farming, agricultural cultivation, coconut plantation and landscaping. She also noted that the assessment was also meant

to identify the derivable impact of the exercise on affected communities as well as develop mining methods and proper documentation that would ensure sustainable development.

…Considers ceramic business to enhance revenue KUNLE KALEJAYE

he Lagos State government says it is considering the utilisation of clay and local raw materials to produce ceramics and glass as a booster to employment and revenue generation in the state. Permanent Secretary in the Ministry of Energy and Mineral Resources, Mrs. Regina Obasa, disclosed this during a capacity building workshop on ceramic manufacturing in Lagos. Mrs. Obasa, in her remarks at the workshop, noted that the ceramic

Industry had huge potential for job creation, natural resources utilisation, poverty reduction and revenue generation. She lamented, however, that its potentials were yet to be fully harnessed in the state despite the huge availability of raw materials for the Industry. She said that the workshop is to jumpstart and awake interest in ceramic production in the state as well as provide a roadmap to the setting up of a Ceramic Production Skill Acquisition Centre in the state. The permanent secretary noted that the ceramic i n d u s t r y, b e i n g a h u g e

manufacturing operation that touches every facet of major industrial processes such as in paint, pharmaceuticals, foods, computers, building construction, motor vehicles, electricity, power supply, electronic, iron and steel production, aeronautics among others, needed to be harnessed by the Ministry to create jobs and wealth for the citizens of Lagos State. The workshop paper on ceramic production, delivered by Engr. E.P. Oaikhenan, was designed to equip people with skills and knowledge in the ceramic

manufacturing business as well as assist to develop capacities, increase assets and enhance revenue generation for individuals and the state. Engr. Oaikhenan said there was currently low investment in ceramic manufacturing, attributing this to lack of clear understanding of the industry as well as absence of avenue for people interested in the business to pursue their ambition and acquire necessary skills as obtained in developed countries. He indicated his readiness to partner with the state government in the

development of a world class ceramic skill acquisition centre to train personnel and provide the needed skills for the ceramics industry. He listed the advantages that would derive from the Ceramics skill acquisition centre to include establishment of ceramics manufacturing business clusters in key areas that would drive the industry productivity and competitiveness, training of youth and unemployed people in the business of ceramic production and awareness of the exciting and challenging career opportunity that are available in the ceramics industry.

Freight

2014 August, SweetcrudeReports

Pirates attack IKE AMOS

igeria and the U n i t e d Kingdom are losing £13.5 billion (about N3.578 trillion) a year to pirates’ activities in Nigeria’s territorial waters and off the coast of West Africa. The UK Chamber of Shipping, in a report on trade activities, said piracy in Nigeria’s territorial waters and off the coast of West Africa is negatively affecting the economy of countries in the region, stating that the countries will remain poor until their waterways are secured. The report said pirates and lawlessness off the coast of Nigeria and the Gulf of Guinea is costing Nigeria about £7.2 billion (about N1.51 trillion) yearly. It also said insecurity in waterways in the territory is putting at risk £6.3 billion of UK’s trade, including 12 per cent of the country’s oil imports. According to the UK Chamber of Shipping, there is at least one attack per week on a ship operating in the region, but up to two-thirds of attacks are believed to go unreported. The chamber's report noted

Nigeria, UK lose N3.58tr annually to piracy The report called on the British government to step up efforts towards building maritime governance in the region, using UK-based expertise to help train local law enforcement judicial services and making sure criminals are brought to justice that in 2013, 60 per cent of attacks on shipping in the area took place in Nigerian territorial waters, adding that there is a trend for increasing violence within attacks.

The UK Chamber of Shipping is the trade association for the UK shipping industry. With around 140 members from across the maritime sector, the chamber represents over 925 ships of about 30 million gross tons. Chief Executive Officer, UK Chamber of Shipping, Guy Platten, also warned that the UK economy is heavily exposed to lawlessness off the coast of Nigeria. He said, “Most people are aware of pirate activity off Somalia, but lawlessness in the Gulf of Guinea is a major threat to our seafarers, the UK’s energy and trade security, and to the economic development of the region. “Nigeria and other states in the region have known for 30 years that piracy was a problem, but too little has been done and enough is enough.” “Around 12 per cent of the UK’s crude oil is imported from Nigeria, and by 2050

the region will hold 25 per cent of the world’s oil production. Around 5,000 vessels, of all nationalities, call at Nigerian ports every year. Nigeria’s own statistics show that 300,000 barrels of oil are stolen every day,” he further stated. The report called on the British government to step up efforts towards building maritime governance in the region, using UK-based expertise to help train local law enforcement judicial services and making sure criminals are brought to justice. This, the Chamber said, has become necessary, especially after the country had identified and linked activities in the region to its economic development. Continuing, Platten said, “The lack of security in the region costs Nigeria £7.2 billion a year in oil theft alone, which shows criminal activity is severely

hampering the region’s potential for prosperity. “Put simply, these countries will remain poor until their maritime security issues are tackled. “Ghana and Togo have recently acknowledged the economic benefits of improved maritime security, and have seen additional economic activity result from improvements they have put in place. “Their maritime security has improved by investing in additional security patrols, and is now seen as more secure economies for maritime trade. Nigeria, however, lags behind and has done very little – and it is costing them and us dearly. “This report highlights the UK’s global leadership in combating poor maritime security, but it is clear that if our seafarers, and the cargo they help move, are to be protected, more needs to be done at a global level.”

2014 June, SweetcrudeReports

Freight KUNLE KALEJAYE

he Nigerian M a r i t i m e Administration and Safety A g e n c y , NIMASA, has said its recently-launched Satellite Surveillance Centre in Lagos will effectively monitor vessels in Nigeria's maritime domain and curb the activities of crude oil thieves and sea pirates. The facility will also cover eight countries under the Regional Maritime Search and Rescue Centre. SweetcrudeReports gathered that the surveillance centre was born following approval to NIMASA from relevant Federal Government authorities to set up a maritime domain awareness. To make this happen, NIMASA‎ entered into a m e m o r a n d u m o f understanding, MoU, with the Nigeria Navy and the Nigeria Air Force to enhance water patrol and aerial surveillance in the country's territorial waters. According to Director General of NIMASA, Mr. P a t r i c k Z i a k e d e Akpobolokemi, the centre, which was launched on June 1 this year, would enable NIMASA respond to any distress call on Nigerian waters, thereby providing a safe net for all those doing business within the Nigerian maritime dormain. "The new 24-hours Satellite Surveillance equipment has the capability to detect boats, ships and objects of predefined cross-section

NIMASA says new satellite centre 'll check oil theft, piracy

Illegal local refinery floating on water. This includes any aircraft that ditches and remains on the surface. "Its ‎ abilities further include setting range rings in restricted areas which when penetrated by an intruder triggers an alarm, thereby alerting the operator and watch keeper," the NIMASA boss said.

Akpobolokemi explained that the facility was instrumental to the recent rescue of a Ghanaian flagged vessel hijacked by pirates off the coast of Ghana. Other features of the facility, according to him, include the ability to see beyond the territorial waters of Nigeria‎ , Identify ship positions in real time, which

will greatly enhance search and rescue. He further stated that the surveillance equipment could plot search and rescue patterns, detect vessels that switch off their Automatic Identification System, AIS, and interrogate the satellite image for more information. Akpobolokemi revealed that NIMASA was currently

Maritime operators task govt on Cabotage implementation …Urge NIMASA to address foreign conspiracy in the sector

perators in Nigeria's maritime sector have ‎ called on the Federal Government to develop a structured action plan that would ensure effective implementation of the technical aspect of the nation's Cabotage regime. According to the operators, this could be accomplished through the establishment of Cabotage technical development initiative. The technical development initiative, they said, would

develop short, medium and long-term plans on national cabotage vessels requirement through collaboration with vessels users. They also urged the Nigeria Maritime Administration and Safety Agency, NIMASA, to address foreign conspiracy in the maritime sector by ensuring that jobs on vessels are done by Nigerians in Nigeria. Managing Director of Ocean P e a r l M a r i t i m e , E n g r. Emanuel Ilori, said the nation's 876km coastline was

huge for cabotage as he emphasised that Nigeria, as a major oil producing nation, has added advantage in implementing its Cabotage regime. Ilori, who spoke at a recent stakeholder interactive workshop on the Coast and Inland Shipping operations in Nigerian organised by the Nigerian Maritime Administration and Safety Agency, NIMASA, in Lagos, complained that lack of continuity, consistency and commitment to agree on policy formation has

h i n d e r e d t o t a l implementation of Cabotage. He pointed out that the N 4 . 4 6 5 b i l l i o n transportation agenda which covers road, rail, inland, waterway, and airport development ‎ between 2011 to 2015, did not include Cabotage. The Ocean Pearl Maritime boss lamented that though Nigerian national flag vessels were old, the maritime sector still lacked the necessary technical base.

upgrading it's Global Maritime Distress Safety System, GMDSS, in Lagos, Bonny, Rivers State, and Oron in Akwa Ibom State as well as the radar installation in Escravos, Delta State, Bonny and Tarkwa Bay in Lagos to complement the satellite facility and further boost awareness response capability. ‎ When SweetcrudeReports visited the Satellite Surveillance Centre at NIMASA head office in Apapa, Lagos, Director, Shipping Development, Captain Warede Enisuoh, demonstrated how the facility works with the aid of space satellite. Through the aid of three wide monitor screens placed on the wall at the centre, Enisuoh showed all vessels within Nigerian territorial waters and the western coast. He also showed the number of vessels that have switched of their Automatic Identification System, AIS. Enisuoh, who also developed the software for the facility, explained that vessels that switched off their ‎ AIS did it to perpetrate illegal acts like crude oil theft or piracy.

2014 August, SweetcrudeReports

Freight

KUNLE KALEJAYE

eventeen states in ‎ the country are c u r r e n t l y working with the N i g e r i a n Maritime Administration a n d S a f e t y A g e n c y, NIMASA, to sponsor some youths for the Nigerian Seafarers Development Programme, NSDP. Other states yet to key into the programme are being wooed by NIMASA to embrace it and help promote youth development and job creation in the maritime sector. NIMASA said since its inception‎ five years ago, over 2,500 young Nigerians have benefited or are currently enjoying various levels of sponsorship in schools in the United Kingdom, Egypt, Romania, India and Philippines under the programme. Director General of N I M A S A , M r. P a t r i c k Akpobolokemi, said the first 23 qualified seafarers under the scheme have already emerged from the Arab Academy for Science Technology and Maritime Transport in Egypt, having completed their sea time training and earned the Certificate of Competencies, CoC. The director general, who stated this during a press conference in Lagos, added that 14 of them graduated with first class honours while one of them emerged the best overall graduating student from the institution this year. "We are not relenting in our quest to ensure that all beneficiaries of this programme acquire sea time training, which was a challenge in the past. "At the moment, 51 of our students are at sea acquiring their sea time‎ experience on various ocean-going vessels. Another set of 33 are also ready to join their colleagues at sea before the end of August, 2014‎ ," Akpobolokemi stated. He described the NSDP as a medium-term gain, but noted that NIMASA has been concerned about a long term solution to the dearth of qualified professional in the maritime sector. According to him, it was as a result of this that NIMASA had conceived the Nigerian Maritime University, NMU. "The university will produce high level manpower for Nigeria's maritime/shipping

Seafarers

17 states to sponsor young Nigerians under Seafarers' Programme sector on sustainable basis. "It will provide training for seafarers, master mariners, marine engineers, naval architects, nautical and other s p e c i a l i s e d maritime/shipping trade skills. "The NMU is envisage to become a centre for excellence in innovative research for the maritime sector in the West and Central Africa sub-region

when it fully evolves," he said. It would be recalled that President Goodluck Jonathan performed the ground breaking ceremony of the university at Okerenkoko and also flagged off activities at the university's temporary site in Kurutie, both in Warri South-West Local Government Area of Delta

state. The NIMASA boss further explained that efforts are currently on by the agency to source for technical collaboration with foreign maritime ‎ institution. "This partnership will assist NMU to develop a structural academic programme, which is essential to strengthening the quality of the university's

training programmes. "Academic activities are e x p e c t e dAkpabio to commence Governor shortly at the institution, and we would continue to discharge our statutory obligations to the Maritime Academy of Nigeria, Oron, in order to further grow human capacity in the maritime s e c t o r, " A k p o b o l o k e m i stated.

MAN laments 'milking of importers' at ports

he Manufacturing Association of Nigeria, MAN, has lamented what it described as the 'milking of importers' at the nation's sea ports, saying the high cost of doing business at the ports resulting from this, was responsible for the congestions at the ports. MAN president, Dr. Kola Jamodu, made the accusation recently, urging Federal Government agencies operating at the ports to avoid inflating

charges and operating multiple taxation at the ports. Represented by Mr. Remi Ogunmefun, director general, MAN, at the business luncheon of the MAN, Ogun State chapter, Jamodu said: “Government should ensure that cargo fares are relatively stable over time, while multiple taxation on imports should be looked into as a matter of urgency to avoid further congestion at the Ports. “Problem of efficient cargo identification, fast clearing

process, arbitrary increase in cargo duties and continuous deduction keep reoccurring even at the ports, and I believe the Nigeria Customs Service will overturn this deficit in the nearest future”, he added. Accusing the Nigeria Customs Service of partly being responsible for the perennial congestion at the ports, he said this the agency had done by way of arbitrary increase of import duties. The MAN boss also criticised the existing single window

system and preassessment used by the Customs, saying these also contribute to d e l a y s i n clearing of goods a s t h e y specifically delay data generation and verification.

Motoring

2014 August, SweetcrudeReports

NKEM IGBIKIOWUBO

ndications are that claims by the Vaswani brothers operated Stallion Group that it has commenced assembly of Nissan vehicles in Nigeria may be fraudulent. On May 29th 2014, the President of the Federal Republic of N i g e r i a D r. G o o d l u c k Jonathan was presented with three models of made in Nigeria Nissan vehicles in commemoration of the nation’s democracy day. The Chairman of Stallion Group, Mr. Sunil Vaswani, presented the three vehicles to the President at the International Conference Centre where a special event organised to mark the nation's Democracy Day was held. After all the pomp and pageantry that heralded the p r e s e n t a t i o n , SweetcrudeReports sought to visit the “ultra modern” assembly line to do a follow up on the development. However, upon arrival at the assembly line located along the Lagos/Badagry express way our correspondent was refused entry into the premises and told to book an appointment with the relevant authorities before such a visit. A request to visit the assembly line was turned down and this sparked our curiosity. Our surveillance revealed a stream of several other vehicle brands being driven out of the complex. A staff met of the company who choose to speak on condition of anonymity revealed that there was no form of vehicle assembly taking place in the complex, but rather, what they constantly witness is a steady flow of containers carrying various brands of vehicles streaming into the complex late in the night, offloading its contents and the vehicles being driven out in the day time to Stallion group’s show rooms across the country. Further checks revealed that these Nissan vehicles purported to have been assembled in Nigeria are actually imported into the country as finished products, taken to their “assembly line” and later driven out as assembled in Nigeria. T h e r e b y, d e n y i n g t h e government of badly needed revenue. Government Reaction: When contacted, the Minister of Trade and

Nissan Assembly in Nigeria: A Fraud Investment, Dr. Olusegun Aganga defended the Stallion Group noting that it wasn’t true the company had not commenced assembly of Nissan vehicles in the country and adding that the director general of the National Automative Council will get in touch to clarify the issues. The Director General of the National Automotive Council Aminu Jalal said “what was brought into the country by the Vaswani’s was semi knock down (SKD) Nissan cars and that the cars were assembled at VON”. He however became ambiguous when he added that the assembly line was not yet fully operational until sometime in July and August when VON will roll out both Hyundai and Nissan cars respectively. He also stated that VON projects to move from importation of semi knocked down vehicles to complete knock down (CKD) in no distant future in order to create more job opportunities for the economy and grow local content. However, further checks with the PRO of the Nigeria Customs Service, Apapa, Tin Can port revealed that there is no provision in the import tariff for SKD, rather, there is provision for only finished products (cars) or complete knock down (CKD) vehicles. The Vaswani brothers The Stallion group, promoted by the Vaswani family remains a major distributor of Nissan vehicles

in Africa. Although Nigeria may not agree with India on certain norms in religion, marriage, or politics, there is, however, a language they both speak and understand in business and politics Bakshish. The Vaswani brothers, the Indian owners of the Stallion Group for the past three decades, have effectively navigated the murky waters of the business environment that they are now a force to reckon with in Nigeria and India. The Vaswani brothers have faced myriads of investigation into their business activities by several institutions, including a National Assembly Committee, the Police, at the Special Fraud Unit, SFU, of the Force Criminal Investigation Department, FCID, States Security Services, SSS, and the Presidency under the Gen. Olusegun Obasanjo administration. Previous probes had

severally indicted and resulted in the deportation of the Vaswani brothers. But like the proverbial cat with nine lives the Vaswani’s have always found their way around the murky waters of the Nigerian operating environment. In the event they are indicted yet again or deported, it will be the third time in eight years. Their alleged crime cum infraction has not changed; its dimension has only gotten wider. Maybe the deluge of petitions the seven-man Senate Committee on Privatisation received on the alleged economic crimes of the Vaswani brothers will be heavy enough to confirm that the brothers have Nigeria by the jugular. Economic analysts have always argued that it will take some doing for the country to really get industrialized with its current expansionist import

policy. The Stallion Group particularly appears more obsessed with dumping goods on the economy. With its 15 subsidiaries and a conglomerate of fronts in Nigeria, the group imports practically anything from cars to rice. That is one way of keeping Nigeria a perpetual consumer economy, unlike India that is, to a large extent, known for its booming technology, health tourism, exports and manufacturing. The Vaswani design for the country’s economic landscape may have led to their latest scam in the acquisition of the Vo l k s w a g e n N i g e r i a Limited, VON. The Senate is already convinced Nigeria has been short-changed in the sale of the company. Very revealing are the video clips of the Senate Committee’s factfinding visit to the VON office in Apapa, Lagos, almost six years after sale. The vast premises of the former German-Nigerian auto plant are now a bonded terminal, one of the three bonded terminals the group owns in Lagos. That conversion of a key driver of an economy into a storage facility is illegal, going by section 1 of the Memorandum of Association of the automobile company. What further throws more light on the questionable transaction is the account of a 24-year old business romance gone sour between Kashim Bukar Shettima, owner of the Barbedos Group. Shettima, in 2006, bought Nigeria’s 35 per cent equity in Volkswagen for N612 million, shortly after, the brothers who also bid, were deported. Although both parties were poles apart after that, the bond remained fairly strong between the Vaswanis and Shettima. “I made every effort to facilitate their return,” he asserted. The Vaswani brothers had won the bid for Nigeria’s 35 per cent equity in VON for N400 million in 2003, but a rice importation fraud pitted them against former President Olusegun Obasanjo who had to toss them out of the country.

2014 August, SweetcrudeReports

Motoring

onsumers often agonize about what vehicle should be their next car. When it comes to older used cars in particular, I have always offered buyers three ironclad pieces of advice: • Your footwear is going to have a greater impact on your life than the car you drive. • The driving and maintenance habits of the prior owner will have a far greater effect on a used car's longevity than the brand. So whatever you choose, make sure you have it inspected before you buy. The first gets people to laugh. The second gets them to think. But it's my third tip that's most important for those looking to buy an older used car: • Don't believe the hype. Cars from prestige brands (especially European ones) don't necessarily last longer or work better. In fact, they now represent many of the most costly and least reliable vehicles in the used-car marketplace. The exact opposite is true for certain unpopular brands and models. Defunct automakers such as Saturn, Saab, and Pontiac have certain specific models that can equal — or exceed — the quality of the so-called market leaders. For well over a year now, myself and a statistician named Nick Larivere have developed a long-term reliability study that you can find here. We now have nearly 300,000 vehicles from across the entire United States, and recently, we highlighted those low quality vehicles that were found to be most defective at trade-in time. You can read about those findings here. Now, that same data also reveals the most durable cars and trucks over several years, and with results that defy popular wisdom. To give you a grasp of how divergent our findings have become versus the usual stereotypes, the Chevrolet Cavalier, a car not generally associated with quality, has registered more trade-ins with over 180,000 miles, and fewer defect issues, than the entire Volkswagen line-up. Other models that are no longer sold as new cars, such as the Buick Park Avenue and Saturn L200, are apparently capable of matching the overall quality of their classes' top-tier

10 best used vehicles: A car dealer’s scientific guide vehicles for thousands of dollars less. There are plenty of good used vehicles out there that are capable of offering the highest levels of long-term quality and owner satisfaction. However, since manufacturers often sell multiple vehicles over the same platform, to increase reliability and lower cost, for this study we have decided to broaden the field a bit and highlight the ten most successful platforms. This way those less popular models in our study don't get overlooked.

than the Lexus LS series.

4. Chevy/GMC full-sized trucks and SUV's

Lexus LX470/Toyota Land Cruiser

1. Lexus LX470/Toyota Land Cruiser These vehicles are the automotive version of granite. They are heavy as hell, don’t age and will most assuredly squash whatever vehicular bugs and cockroaches are on the road should the Zombie Apocalypse ever take place. The Land Cruiser and LX470 are the best on our list.

Ford E-Series

2. Ford E-Series While GM only offered a mild redesign of their fullsized vans back in 1995, and Dodge left the segment entirely, Ford decided to double down by improving the vehicle's interior design several times over, and then sticking with three engines that Ford has collectively put into over 10 million vehicles (the 4.6-liter V-8, the Trition 5.4-liter V-8, and the 6.8-liter V-10). The end result is the bestselling full-sized van in today's market, and one whose durability has been earned t h e h a r d w a y. A t r u e workhorse that is kept instead of curbed.

Lexus LS

Chevy/GMC full-sized trucks and SUV's

5. Ford full-sized trucks (V-8 and V-10 models) While Dodge remains a distant third, and Toyota and Nissan have barely made a dent in the full-size truck business, Ford has become Chevy's equal in the segment, and in certain cases, now the superior choice. The now defunct Ford Excursion holds the title as the third most reliable full-sized SUV in our study (the Land Cruiser and LX are first and second). Meanwhile the Ford FSeries is based on the Pplatform which regularly yields that V-8, rear-wheel drive, body-on-frame combination that has made the F-150 the best selling vehicle in America for 32 years running.

6. Toyota Camry / Lexus ES / Toyota Avalon

3. Lexus LS The LS400, LS430 and LS460 are among the only ultra high-end luxury models that buck the trend of having dubious reliability and maintenance issues upon trade-in. No luxury car in our study, on average, is driven longer with more miles on the odometer, and fewer defects,

Toyota and Lexus finished first and second in the Manufacturer Quality Index Rating. But guess who finished third? GMC. With GMC only selling trucks and SUVs, all of which are also sold by Chevrolet, the two have combined to offer outstanding quality and durability that few others can match, which is one of the main reasons why GM trucks have remained so dominant. Suburbans, Silverados, Tahoes, Yukons and a long list of other makes and models are all part of the GMT platform which has remained at the forefront of vehicle longevity.

We found in our year-long study that the Honda Accord has experienced a rash of transmission issues with V-6 models, and the Nissan Altima had severe oil Ford full-sized trucks (V-8 and V-10 models)

CONTINUES ON PAGE 40

2014 August, SweetcrudeReports

Motoring

10 best used vehicles: A car dealer’s scientific guide CONTINUED FROM PAGE 39 consumption issues with the 2.5-liter four-cylinder engine. The Toyota Camry is the only midsized vehicle to remain consistently well above average for the last twenty years (click the chart here.) The mid-'90s to mid2000s Lexus ES and Toyota Avalons are based on the Camry XV platform which laid the foundation for other standouts from this era, including the Toyota Solara and Sienna. The Avalon is the second-highest ranked car in our study.

7. Toyota 4Runner / Lexus Gx470 We should mention that there have been two major platforms for older 4Runners. The older 4Runner was based on the Toyota truck and then later, an overseas model known as the Toyota Land Cruiser Prado. In 2003, Toyota decided to offer the North American only 4Runner with it's very own platform and added a Lexus variant. Both 4Runners are a cut above in terms of long-term reliability. The 4Runner and GX470 are ranked 5th and 8th respectfully while the older Toyota truck rounds off the top ten.

8. Honda S2000 Only 65,000 S2000s were built over a ten year period, and yet they remain neckand-neck with the Mazda MX-5 Miata as the most popular roadster of the past decade. The S2000 has the distinct honor of being among the few on our list that are exceptionally reliable and fun to drive.

includes problems with the hybrid battery. While the older Honda Civic Hybrid and Accord hybrid have all experienced substantial battery wear, the Prius remains among the most reliable vehicles in the marketplace by any standard.

10. Lexus GS It was our hope to make this list a bit more diverse by incorporating platforms instead of single models, since Toyota has so far managed to nail down eight of the top ten slots in our long-term reliability study. The good news is that this platform based list offers over 40 distinct models to choose from, both imports and domestic, and certain popular media favorites such as the Honda Accord and Toyota RAV4 can no longer obscure major mechanical defects that don't take hold until after most first owners sell their vehicles. The bad news for Toyota haters, however, is that yet another Toyota product —the Lexus GS — rounds off the list. The GS was based on the Japan-only Toyota Crown and Toyota Aristo for most of it's life, and it's the seventh rearwheel-drive platform to land in the top ten in our list of best long-term reliability. These rankings will gradually change over time as we are scheduled to get over 600,000 vehicles into our reliability study by the end of 2014, and well over a million by 2015. So feel free to click here for a model by model breakdown. But as it stands today, if you're looking to buy a used car, a Toyota will likely have the most life left.

Toyota Camry / Lexus ES / Toyota Avalon

Toyota 4Runner / Lexus Gx470

Honda S2000

9. Toyota Prius While the S2000 has served as a fun car for the enthusiast, the Prius has become the car of choice for planet-lovers and hipsters. Fewer than 4 percent of Prii that are traded-in exhibit any type of serious mechanical issue, and that

Toyota Prius

Lexus GS

Technology

2014 August, SweetcrudeReports

Hydraulic fracturing

ydraulic fracturing is t h e fracturing of rock by a pressurized liquid. Some hydraulic fractures form naturallyâ&#x20AC;&#x201D;certain veins or dikes are examples. Induced hydraulic fracturing (also hydrofracturing, fracking, and fraccing) is a wellstimulation technique in which a high-pressure fluid (usually water mixed with sand and chemicals) is injected into a wellbore in order to create small fractures (usually less than 1.0 mm wide) in the deeprock formations in order to allow natural gas, petroleum, and brine to migrate to the well. When the hydraulic pressure is removed from the well, small grains of hydraulic fracturing proppants (either sand or aluminium oxide) hold open the small fractures once the deep rock achieves geologic equilibrium. The hydraulic fracturing technique is commonly applied to wells for shale gas, tight gas, tight oil, and coal seam gas. Such wellstimulation usually is done once during the productive life of the well, and greatly assists in removing fluids (gas, petroleum), and thus

Hydraulic fracturing increases the productivity of the well; often, multiple application of induced hydraulic fracturing (and/or other well-stimulation techniques) are used as the field's production declines. The first experimental use of hydraulic fracturing was in 1947, and the first commercially successful applications of hydraulic fracturing were in 1949. Worldwide, as of 2012, 2.5 million hydraulic fracturing jobs have been performed on oil and gas wells; more than one million jobs were performed in the U.S. Proponents of hydraulic fracturing advocate the economic benefits to be derived from the vast amounts of formerly inaccessible hydrocarbons that can be extracted with hydraulic fracturing. Opponents to hydraulic fracturing point to the environmental impact of hydraulic fracturing, such as potential contamination of ground water, the depletion of f r e s h w a t e r, p o s s i b l e degradation of the air quality, the possibility of the process triggering earthquakes, local noise pollution, the migration

of gases and hydraulicfracturing chemicals to the surface, the contamination of the surface lands with spills and flow-back, and the possible health effects of these environmental risks upon people. Increases in seismic activity following hydraulic fracturing are usually caused by the deep-injection disposal of flowback and produced brine from hydraulically fractured wells. For such reasons, induced hydraulic fracturing is under international scrutiny, with some countries protecting hydraulic fracturing, and other countries banning hydraulic fracturing. Some of those countries, notably the U.K., have lifted their bans of hydraulic fracturing, in favour of regulation rather than prohibition. The European Union is working on regulations that would permit controlled application of hydraulic fracturing.

Mechanics Fracturing in rocks at

depth tends to be suppressed by the confining pressure, due to the immense load caused by the overlying rock strata and the cementation of the formation. This is particularly so in the case of "tensile" (Mode 1) fractures, which require the walls of the fracture to move apart, working against this confining pressure. Hydraulic fracturing occurs when the effective stress is overcome sufficiently by an increase in the pressure of fluids within the rock, such that the minimum principal stress becomes tensile and exceeds the tensile strength of the material. Fractures

formed in this way will in the main be oriented in the plane perpendicular to the minimum principal stress and for this reason induced hydraulic fractures in well bores are sometimes used to determine the orientation of stresses. In natural examples, such as dikes or vein-filled fractures, the orientations can be used to infer past states of stress.

Veins Most mineral vein systems are a result of repeated hydraulic fracturing of the rock during periods of CONTINUES ON PAGE 42

2014 August, SweetcrudeReports

Technology CONTINUED FROM PAGE 41

relatively high pore fluid pressure. This is particularly noticeable in the case of "crack-seal" veins, where the vein material can be seen to have been added in a series of discrete fracturing events, with extra vein material deposited on each occasion. One mechanism to demonstrate such examples of long-lasting repeated fracturing is the effect of seismic activity, in which the stress levels rise and fall episodically and large volumes of connate water may be expelled from fluidfilled fractures during earthquakes. This process is referred to as "seismic pumping".

Dikes Low-level minor intrusions such as dikes propagate through the crust in the form of fluid-filled cracks, although in this case the fluid is magma. In sedimentary rocks with a significant water content, the fluid at the propagating fracture tip will be steam.

History Precursors Fracturing as a method to stimulate shallow, hard rock oil wells dates back to the 1860s. Soon after the first commercial U.S. oil well in 1859, dynamite or nitroglycerin detonations increased an oil or natural gas wellâ&#x20AC;&#x2122;s production from petroleum bearing formations. On April 25, 1865, Civil War veteran Col. Edward A. L. Roberts received the first of his many patents for an â&#x20AC;&#x153;exploding torpedo.â&#x20AC;? It was applied by oil producers in the US states of Pennsylvania, New York, Kentucky, and West Virginia by using liquid and later also solidified nitroglycerin. Later, the same method was applied to water and gas wells. The idea to use acid as a nonexplosive fluid for well stimulation was introduced in the 1930s. Due to acid etching, fractures would not close completely and therefore productivity was increased.

Oil and gas wells The relationship between well performance and treatment pressures was studied by Floyd Farris of Stanolind Oil and Gas Corporation. This study became a basis of the first

Hydraulic fracturing

hydraulic fracturing experiment, which was conducted in 1947 at the Hugoton gas field in Grant County of southwestern Kansas by Stanolind. For the well treatment 1,000 US gallons (3,800 l; 830 imp gal) of gelled gasoline (essentially napalm) and sand from the Arkansas River was injected into the gas-producing limestone formation at 2,400 feet (730 m). The experiment was not very successful as deliverability of the well did not change appreciably. The process was further described by J.B. Clark of Stanolind in his paper published in 1948. A patent on this process was issued in 1949 and an exclusive license was granted to the Halliburton Oil Well Cementing Company. On March 17, 1949, Halliburton performed the first two commercial hydraulic fracturing treatments in Stephens County, Oklahoma, and Archer County, Texas. Since then, hydraulic fracturing has been used to stimulate approximately a million oil and gas wells in various geologic regimes with good success. In contrast with the largescale hydraulic fracturing used in low-permeability formations, small hydraulic fracturing treatments are commonly used in highpermeability formations to remedy skin damage at the rock-borehole interface. In such cases the fracturing may extend only a few feet from the borehole. In the Soviet Union, the first hydraulic proppant fracturing was carried out in 1952. Other countries in Europe and Northern Africa to use hydraulic fracturing include Norway, Poland, Czechoslovakia, Yugoslavia, Hungary, Austria, France, Italy, Bulgaria, Romania, Turkey, Tunisia, and Algeria.

Massive Fracturing Pan American Petroleum applied the first massive hydraulic fracturing (also known as high-volume hydraulic fracturing) treatment in Stephens County, Oklahoma, USA in 1968. The definition of massive hydraulic fracturing varies somewhat, but is generally used for treatments injecting greater than about 150 short tons, or approximately 300,000 pounds (136 metric tonnes), of proppant. American geologists

Massive hydraulic fracturing quickly spread in the late 1970s to western Canada, Rotliegend and Carboniferous gas-bearing sandstones in Germany, Netherlands onshore and offshore gas fields, and the United Kingdom sector of the North Sea. Horizontal oil or gas wells were unusual until the 1980s. Then in the late 1980s, operators in Texas began completing thousands of oil wells by drilling horizontally in the Austin Chalk, and giving massive

commercially applied to shale gas deposits. In 1976 the United States government started the Eastern Gas Shales Project, a set of dozens of publicprivate hydraulic fracturing pilot demonstration projects. During the same period, the Gas Research Institute, a gas industry research consortium, received approval for research and funding from the Federal Energy Regulatory Commission. In 1997, taking the slickwater fracturing technique used in East Texas

became increasingly aware that there were huge volumes of gas-saturated sandstones with permeability too low (generally less than 0.1 millidarcy) to recover the gas economically. Starting in 1973, massive hydraulic fracturing was used in thousands of gas wells in the San Juan Basin, Denver Basin, the Piceance Basin, and the Green River Basin, and in other hard rock formations of the western US. Other tight sandstones in the US made economic by massive hydraulic fracturing were the ClintonMedina Sandstone, and Cotton Valley Sandstone.

slickwater hydraulic fracturing treatments to the wellbores. Horizontal wells proved much more effective than vertical wells in producing oil from the tight chalk; the shale runs horizontally so a horizontal well reached much more of the resource. In 1991, the first horizontal well was drilled in the Barnett Shale and in 1996 slickwater fluids were introduced.

by Union Pacific Resources, now part of Anadarko Petroleum Corporation, Mitchell Energy, now part of Devon Energy, learned how to use the technique in the Barnett Shale of north Texas, which made shale gas extraction widely e c o n o m i c a l . G e o r g e P. Mitchell has been called the "father of fracking" because of his role in applying it in shales. As of 2013, massive hydraulic fracturing is being applied on a commercial scale to shales in the United States, Canada, and China. Several countries are planning to use hydraulic f r a c t u r i n g f o r unconventional oil and gas production.

Shales Due to shale's high porosity a n d l o w p e r m e a b i l i t y, technological research, development and demonstration were necessary before hydraulic fracturing could be

2014 August, SweetcrudeReports

Community

2014 August, SweetcrudeReports

Environmental pollution in Ogoniland

MKPOIKANA UDOMA

he Movement f o r t h e Survival of Ogoni People, MOSOP, has accused the Federal Government of aiding environmental terrorism for its refusal to implement the environmental assessment report by United Nations Environmental Programme, UNEP, on Ogoniland. President of MOSOP, Comrade Legborsi Pyagbara, stated this in Bori, Rivers State at a one-day seminar marking the 3rd Anniversary of UNEP report on Ogoniland tagged: Ogoni, UNEP Report and the Search for Social Justice” said: “further delay by the government to implement the report renders it obsolete”. The MOSOP leader denied that the agitation for the implementation of the UNEP report was politically motivated, while restating their determination to march to Abuja, the Federal Capital Territory in protest against

Ogoni berate govt for aiding 'environmental terrorism' in Ogoniland …Declare August 4 as 'Ogoni Environment Day’ the failure of the government to heed to the plight of the people of Ogoni. According to him, “we are appealing to the President to use his political will power to ensure the report is implemented. We have vowed that MOSOP will resist any attempt by anybody to blackmail them in the course of the struggle”. Guest lecturer at the seminar, Prof. Lucky Akarose, and other participants however expressed anger over the failure of the government to implement the report, while lashing out at the government for "paying more attention to Boko Haram insurgents, but neglects the plights of

thousands of Ogonis s u f f e r i n g f r o m e n v i r o n m e n t a l degradation". In the meantime,

MOSOP has declared 4th of August every year as ‘Ogoni Environment Day’. Pyagbara disclosed this at the anniversary of UNEP report, saying the

declaration became necessary to raise awareness of the special needs of the fragile ecosystem of Ogoniland

No end still to Anambra, Kogi oil war SAM IKEOTUONYE

he war between Anambra and Kogi States communities over oil wells in their boundaries has refused to go away. Four people from Aguleri, Anambra East Local Government area were killed and seven others seriously injured in the latest clash between the

people of Aguleri and Echeno/Odeke in Ibaji Local Government Area of Kogi State. At the root of the interstate crisis is the oil deposits on the Omambala River basin. Clashes between the two communities began last year after President Goodluck Jonathan commissioned the Orient Petroleum Refinery at

Aguleri Otu in Anambra State and declared the state "the latest entrant to the nation's league of oil producing states". The clashes usually involved use of sophisticated weapons, even in the face of security operatives at the buffer zone carved out in the area by the National Boundary Commission in an effort to curb the crisis.

2014 August, SweetcrudeReports

Community

NDDC announces consolidation phase of development master plan MKPOIKANA UDOMA

he Niger Delta Development Commission, NDDC, has announced that its 2014 budget is geared towards addressing the goals of the consolidation phase of the Niger Delta Regional Development Master Plan, which is now in its seventh year. The NDDC, in a statement issued in Port Harcourt by its Head of Corporate Affairs, Mr. Ibitoye Abosede, said the announcement was part of the highlights of the presentation made by the commission’s managing director, Sir Bassey Dan-Abia, to members of the House of Representatives' Committee on NDDC at the National Assembly complex in Abuja. According to the statement, “The thrust of the 2014 budget would be to consolidate the c o m m i s s i o n ’s e f f o r t s i n “employment generation, wealth creation and poverty alleviation” which were the focus of previous budgets. The budget, tagged “Budget of Recovery and Restoration”, would leverage on human capital development, job creation and partnerships in line with Mr. President’s transformation agenda”. “The NDDC boss reviewed the achievements of the commission in the 2013

Skills acquisition training budget year. In the year under review, he said that skills acquisition programme empowered 500 youths in welding and fabrication, as w e l l a s d r i v i n g entrepreneurship development. "He further said that 500 farmers received subsidised inputs while over 2,000 young men and women across the region were trained in agricultural methods and provided with starter kits for

fishery, snail keeping and animal rearing,” the statement said. It stated that the commission under Dan-Abia had already introduced some human capital development programmes that would have great impact on the Niger Delta in the years ahead. According to the NDDC boss, “some of them include the entrepreneurship development and

empowerment programme; NDDC post-graduate scholarship scheme, women training etc. The strategic aim is to create necessary interface with the industry that will engender effective engagement of these youths and women after their training. "Our belief is that we need to continuously build the capacity of our people in line with the recommendations of the Niger Delta Regional

50 graduates benefit from Sure-P training in Rivers MKPOIKANA UDOMA

bout 50 graduates in Rivers State are c u r r e n t l y undergoing training under a scheme organised by the Subsidy Re-investment and Empowerment Programme, SURE-P, in conjunction with the Federal Ministry of Health. The facilitator of the t r a i n i n g , M r. A n d r e w Obooforibo, told SweetCrudeReports that the training is aimed at exposing participants to the potentials and prospects of the labour market. He said about 20 percent of 5,000 graduates who have

been pencilled down for training across the country have already benefitted from the exercise. According to him, “What we are here for is to give young graduates and school leavers an opportunity for employment. The internship places them with private companies for the duration of 12 months and it allows them to gain valuable working experience with an opportunity to be retained by those companies if they perform well during that 12 months. It also gives them opportunities to improve their curriculum vitae that might help them get jobs or start their own businesses. We want

to make sure that Rivers State sees the dividends of democracy and SURE-P” Representative of the c o n v e n e r, M r. E m e k a Ekpunobi disclosed that the graduates, who are already attached to various companies in the state for a period of 12 months as part of their internship, are being paid monthly stipends. “These graduates are being paid N30,000 every month by the Federal Government through SURE-P. We have placed them in different firms and we are hoping to continue with that. We are hoping that the firms they are working with today will

employ them and if that doesn’t happen, we also hope that with the skills they must have learnt, they would be able to gainfully engaged themselves”. Some of the graduates who s p o k e t o SweetCrudeReport s, commended the F e d e r a l Government for the programme, adding that it has developed their abilities and competence in the labour market.

Development Master Plan.” The statement added that the NDDC has also constructed about 550 kilometres of roads, delivered four new 500-bed hostels to four universities in the region, undertaken the construction and repairs of specialist hospitals and cardiovascular hospital in partnership with private sector service providers, completed over 50 water schemes in addition to providing electricity to about 70 communities in the region.

NDDC has also constructed about 550 kilometres of roads, delivered four new 500bed hostels to four universities in the region, undertaken the construction and repairs of specialist hospitals and cardiovascular hospital in partnership with private sector service providers, completed over 50 water schemes in addition to providing electricity to about 70 communities in the region

2014 August, SweetcrudeReports

Community

ExxonMobil workers

Redefining Social Responsibility: ExxonMobil trains community youths on aviation YEMIE ADEOYE

onny Kingdom is a remote island in the Niger Delta r e g i o n , accessible only by air and w a t e r. T h e r e n o w n e d community has held its peace even in the heights of insurgency in the region some years back. Bonny plays host to several oil and gas companies and operations, including the NLNG, Shell, Agip, Chevron and ExxonMobil. This is the important nature of the island of Bonny. In an effort to give back to this peaceful community which has played host over the years to its operations, Mobil Producing Nigeria Unlimited, MPNU, an affiliate of ExxonMobil, embarked on a youth development programme that is unprecedented in the kingdom. The company, in fulfilling its Corporate Social R e s p o n s i b i l i t y, C S R , obligations worked with the palace and the community leaders to send 41 indigenes of the ancient Bonny Kingdom to the Nigerian C o l l e g e o f Av i a t i o n Technology in Zaria, Kaduna State. This very laudable idea was

initiated following the recent construction of a new airstrip in Finima area of Bonny and aimed at bringing the indigenes of the area up to the task of operating their own airstrip rather than outsiders coming to take over the available opportunities the new airstrip provides. Indigenes of Bonny are elated at this method of empowerment, which obviously is better than

building structures that have no meaning to the youth population of the community in whose hands the future of the kingdom lies. For Jennifer Banigo, Mobil Producing Nigeria has touched the heart of its host community via direct intervention and should be emulated by other IOCs in their various host communities.

Jennifer, one of the 41 indigenes sent to study aviation courses at the Nigeria College of Aviation Technology, Zaria, said after the training in an interview with Sweetcrudereports via telephone: “It all started with a call received from our different houses to inform us of the development and that the forms are available. I participated in the screening and was selected.

Irate youths protest outrageous electricity bills in Port Harcourt

bout 40 youths from Ogbunabali Community in Port Harcourt City Local Government Council recently stormed and barricaded the Amadi Flats office of the Port Harcourt Electricity Distribution C o m p a n y, P H E D , over poor electricity distribution in the area. The placard-

carrying youths accused the PHED of deliberately denying them power for over a month. Leaders of the protest, Mr. Gentle O w h o n d a a n d M r. Chima Chinwo, told SweetCrudeReports that all efforts to meet with the management of the PHED on the matter has been rebuffed. “There has been total

blackout for the past one month, the bills are outrageous, in one bedroom flat apartment, they (PHED) will give us a N15,000 monthly bill. Someone like me whose income is N30,000 a month, they will give me N15,000 monthly bill. How do I eat? How do I save? How do I do other things?.

“The training which held in Zaria centered on planning aviation as well as basic factors of the aviation sector. We had 19 different courses and after this exposure I have decided to study advanced basic operation management. “But for ExxonMobil I would not have been able to participate in such training on my own due to the cost of such exercise, hence they have made it easier for me to chart my career path and I would like to use this medium to say a big thank you even as I do hope they will not just stop there but assist us in getting a place in the labour market so we don’t just flock the market without a way out.” MPNU and its joint venture partner, Nigeria National Petroleum Corporation, NNPC, also made it clear that they are helping to develop the community through programmes such as this, which aim to build capacity amongst the Bonny indigenes, and would equip the beneficiaries with skill sets necessary for them to access job opportunities such as the aviation services required at the Finima Airstrip – a new airstrip which was recently constructed in Bonny Island.

Community

2014 August, SweetcrudeReports

E-mail: johniyene@yahoo.com

Alison-Madueke: A game of Seance at the NNPC Towers

hen the presidency deputised Diezani AlisonMadueke to the Petroleum Ministry, there was a loud buzz of disapproval. It was argued at the time that the young woman did not have the requisite credentials to manage Nigeria’s most important industry; at the time I humbly contributed that she would serve the country better as the Minister of Tourism and Culture. Well, the presidency thought otherwise and she became a negative reality in our lives. Mrs. Alison-Madueke’s leadership of the Petroleum Ministry has been marked with monumental corruption if the CBN is to be believed but beyond the corruption, she has run the ministry as a personal property, with secrecy, highhandedness and impunity.

Eleme Petrochemicals workers

Community, Eleme Petrochemicals at war over plan to sack indigenes …Sack allegation false, says IEPCL

’Ela’Bor, the apex general assembly of Eleme indigenes in Rivers State, has raised alarm over impending sack of Eleme indigenes working in the Indorama-Eleme Petrochemicals Company Limited, IEPCL. The indigenes, according to the community, have been listed for sack for their actions during the controversial elections in the local branch of the Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, in the company earlier in May this year. Taking a swipe at the management of IEPCL, the president general of the Eleme General Assembly, Mr. Jonah Chujor, said the planned sack was another form of victimisation of indigenes working in the company. Expressing fears that the action could trigger fresh crisis in the area, he said: “This action of the management of Indorama is capable of causing crisis of unimaginable magnitude. The crisis that resulted from the elections has been settled, and expectedly peace and normalcy has returned. Turning around now to select a few staff of Eleme origin in the crisis, after the settlement, for reprimanding action is unacceptable. I see these as selective victimisation and this will be

resisted. I view this as an invitation to crisis”. The President General of O’Ela’Bor, Mr. Jonah Chujor also called on the Rivers State Government to execute the injustices to prevail on the m a n a g e m e n t o f Indorama/EPCL to rescind its decision against the workers in the interest of peace between the company and the host community. “It is absolutely wrong for the management of Indorama to attempt at exhuming a settled matter. May I use this medium to call on the Rivers State Government, Security Agencies and all well meaning individuals in the society to prevail on the Management of I/EPCL to rescind the decision to avert any further crisis” he said. It would be recalled that the crisis in Indorama-Eleme Petrochemicals Company Limited began with the alleged interference by the traditional ruler of Eleme Kingdom (Oneh Eh Eleme), His Royal Majesty Samuel Ejiri, in the affairs of the company's branch of PENGASSAN in the run up to its elections on May 10 this year. The management of IEPCL, through its head of corporate communications, Dr. Jossy Nkwocha, has, however, described the allegation of planned sack as false. Nkwocha, who made the clarifications in an interview with SweetCrudeReports,

said the company only issued a query to some staff following their alleged involvement in the PENGASSAN crisis. According to him, “Let me t e l l y o u r i g h t a w a y, I n d o r a m a - E l e m e Petrochemicals has not penciled down any body for sack. The company has not sacked any indigene of Eleme for involving in the May 10 attack on PENGASSAN officials. "What Indorama has done was to issue query to some staff who breached our security and brought in thugs and hoodlums to attack members of PENGASSAN, including top officials of PENGASSAN, including Comrade Chika Onuegbu, who came here to conduct the elections. And that query is just for us to know the role played by such persons. So, it is based on that, that the company will be able to know what disciplinary measures to take. For now, nobody has been penciled down for sack”. Nkwocha faulted claims that the company had agreed with the host community and some stakeholders not to discipline the erring workers, saying the company had a reputation as a world class organisation and must take disciplinary actions where there are infringements on rules and regulations.

About 48 hours after she assumed office as Petroleum Minister, she fired the Group Managing Director of the NNPC, Barkindo Sanusi, a gentleman with a rich tapestry of industry experience that commenced years before the minister graduated from the university. The minister sacked Barkindo Sanusi and like the empress she was poised to become, refused to proffer any reasons for her action. At the exit of Barkindo Sanusi, the minister brought in Shehu Ladan and sacked him one month after. Again she offered no reasons to the industry or the public for sacking the Group Managing Director of the NNPC she had recruited herself. Mrs. Alison-Madueke appointed Austin Oninwo to replace Shehu Ladan as Group MD of the NNPC. Oninwo served for a year and one month and got the boot from the minister; again no reasons. Oninwo was succeeded by Andy Yakubu. Last week the Petroleum Minister fired Yakubu and brought in Dawha Thlama, a gentleman who had served at the NNPC, served as managing director of the IDSL brought back to the NNPC as Executive Director of Exploration and Production. What is worrisome about this latest appointment is not so much that the appointee lacks the requisite experience to manage the NNPC but more in the motive and functionality of his appointment: the gentleman has only 3 months to serve as public servant before his mandatory retirement. The NNPC is the official interface of Nigeria in oil and gas matters. By law and convention she negotiates and consummates oil and gas transactions with corporations, countries and regional blocs. An establishment that has the responsibilities of the NNPC ought to have stability both in policy and leadership. What happened to all the transactions that were commenced by Dawha Thlama’s predecessors? Is this game of séance at the NNPC Towers not a disincentive for the much sought after Foreign Direct Investment? Why would any corporation enter into any profitable negotiations with Mr. Thlama, knowing his batteries at the NNPC would run out in less than four months? What would this gentleman achieve in four months beyond paying salaries and pushing dead memos to the Petroleum Ministry? Contemporary wisdom instructs me that it would be futile to call for the sack, resignation or dilution of “Naomi Campbell.” For reasons best known to the presidency, that body believes in “Miss Campbell” more than monkeys believe in the nutritional value of bananas. The point must be made that the Petroleum Ministry answers ultimately to Nigeria and Nigerians and not just the presidency which is a trustee of Nigerians. The Petroleum Minister must stop her personal misadventure with the fortunes of our country, sit with experienced stakeholders in the industry and select a fitting successor for Dawha Thlama who leaves in three months. Of course, statutorily it is the minister’s prerogative but this minister has displayed monumental incompetence in the business and since we must endure her as monkeys retain bananas in their menu, we must aid and guide her to manage our common patrimony the way it deserves.

2014 August, SweetcrudeReports