Sweetcrude febuary edition by Sweetcrude reports

Finance

2016 February, SweetcrudeReports

Global rating agency, Fitch, slams Nigeria's economic policy …Says it can’t stimulate growth

Global finance

OSCARLINE ONWUEMENYI

he Fitch Rating Agency has alleged that President Muhammadu Buhari’s recent economic policy pronouncements that tended to coalesce around state-led development to blunt the effects of declining oil receipts may not generate the stimulus the country needs to sustain growth. In a statement released in London, the agency said it was not convinced government’s current policy measures can promote growth while containing fiscal pressures facing the country at the moment. It, however, expressed concern over a number of downside risks the country faces in the aftermath of reduction in crude oil earnings. It said, “The emerging economic policies under President Muhammadu

Buhari include an increase in public spending, statedirected investment, revenueside reforms, and accommodative monetary policy." The report noted that December’s mildly expansionary 2016 budget envisages spending of N6 trillion ($30bn), up from N4.6 trillion in the 2015 budget, including a 30per cent increase in capital spending. It explained that, "The government aims to finance additional spending through revenue-side reforms, including improved tax

collection and public finance management, and by increasing external financing. "The fall in oil prices below the $38/b level assumed in the 2016 budget has increased the need for external financing, and the government recently announced it is looking to the World Bank and African Development Bank for additional lending and is exploring a Eurobond issuance sometime in 1H16.” Fitch, however, noted that, “We think the drag on

The fall in oil prices below the $38/b level assumed in the 2016 budget has increased the need for external financing, and the government recently announced it is looking to the World Bank and African Development Bank for additional lending

growth from the Nigerian private sector’s inability to access sufficient hard currency will outweigh the benefits of planned fiscal stimulus, and that the CBN will struggle to defend the naira indefinitely.” It recalled also that the erosion of fiscal and external buffers and policy uncertainty drove its revision of the Outlook on Nigeria’s ‘BB-’ sovereign rating to Negative in March 2015, which was affirmed in September. "An economic policy response that contained fiscal pressures, kept debt levels manageable and carried out planned reforms would be positive for the rating. But an inadequate response that failed to carry out growthenhancing reforms and put debt levels on an unsustainable path would have a negative effect on the rating," the agency stated. It said the Central Bank of Nigeria, CBN, had taken a

large role in implementing economic policy during last year’s six-month wait for cabinet appointments. "It introduced exchange controls and restrictions on foreign currency and resisted pressure for further naira devaluation," the report stated. It added that the CBN cut benchmark rates by 200bp in November and reduced the cash reserve ratio for commercial banks, and has continued to restrict access to FX in 2016, limiting dollar sales to Bureau de Change operators. "It has maintained its support of the naira rather than risk the inflationary impact of devaluation. Overall, these policies present downside risks to Nigeria’s sovereign credit profile, although there are various mitigating factors: Increased borrowing and higher interest payments would add to pressure on the fiscal position.

2016 February, SweetcrudeReports

Finance

Buhari

Devaluation will kill Naira, Buhari insists

r e s i d e n t Muhammadu Buhari is yet to be convinced that Nigeria and its people will derive any tangible benefit from an official devaluation

of the Naira. The president told Nigerians living in Kenya, during an interactive meeting, that while export-driven economies could benefit from devaluation of their currencies,

devaluation will only result in further inflation and hardship for the poor and middle class Nigerians because of the country’s import-dependent economy.

He added that he has no intention of bringing further hardship on the country’s poor who have suffered enough already. With decreasing revenue from crude sales brought

ExxonMobil earns $16.2bn in 2015; $2.8bn during Q4

xxon Mobil Corporation has put its 2015 earnings at $16.2 billion, compared with $32.5 billion a year earlier. “While our financial results reflect the challenging environment, we remain focused on the business fundamentals, including project execution and effective cost management,” said Rex W. Tillerson, chairman and chief executive officer. “The

scale and diversity of our cash flows, along with our financial strength, provide us with the confidence to invest through the cycle to create long-term shareholder value.” ExxonMobil according to a statement, completed six major upstream projects during the year and achieved its full-year plan to produce 4.1 million oil-equivalent barrels per day. These new developments in Canada, Indonesia, Norway, the United States and West

Africa added 300,000 oilequivalent barrels per day of working interest production capacity. Fourth quarter earnings were $2.8 billion, down from $6.6 billion in the fourth quarter of 2014. Lower commodity prices in the Upstream were partly offset by higher Downstream earnings. During 2015, the corporation distributed $15.1 billion to shareholders in the form of

dividends and share purchases to reduce shares outstanding. Upstream earnings were $857 million in the fourth quarter of 2015, down $4.6 billion from the fourth quarter of 2014. Lower liquids and gas realisations decreased earnings by $3.7 billion, while volume and mix effects increased earnings by $100 million, benefiting from new developments.

about by a global oil price slump, many have argued that the naira needs to be allowed to depreciate to reflect the market value, given that while it officially sells for N197, the parallel market rate is around N300, but the president believes devaluing the naira would amount to killing it, his spokesman, Garba Shehu said in a press statement. The President added that he had no intention of bringing further hardship on the country’s poor who, he said, have suffered enough already. Likening devaluing the Naira to having it “killed”, President Buhari said that proponents of devaluation will have to work much harder to convince him that ordinary Nigerians will gain anything from it. The President also rejected suggestions that the Central Bank of Nigeria should resume the sale of foreign exchange to Bureaux de Change (BDCs), saying that the Bureau de Change business had become a scam and a drain on the economy. “We had just 74 of the bureaux in 2005, now they have grown to about 2,800,” President Buhari noted.

2016 February, SweetcrudeReports

Finance

Capital Project: NNPC seeks legislative support to access offshore loan KUNLE KALEJAYE

he Nigeria N a t i o n a l Petroleum Corporation, NNPC, has sought the favour of the National Assembly to help source funds from private, local and international investors to execute its capital projects. Minister of State for Petroleum Resources and NNPC's Group Managing Director, Dr. Ibe Kachikwu, stated this during oversight function visit of the House of Representatives Committee on Petroleum, Downstream to the NNPC Towers in Abuja. Kachikwu noted that the corporation needed the fund because the petroleum industry was currently undergoing fundamental changes in the face of dwindling global crude oil prices. "NNPC sued for the support of members of the National Assembly to allow the NNPC solicit for funds from private local and international investors to execute its capital projects," he said. The minister explained to the House Committee members that the NNPC had complied with the Federal Government directive on the Treasury Single Account, TSA, which according to him, promotes probity and accountability in the day-to-day operations of the Corporation. He informed that some of the subsidiaries of the NNPC were being unbundled in order to guarantee energy efficiency and security, stressing that the Pipelines and Products Marketing Company, PPMC, was being restructured into a pipelines company, products marketing company and a storage company. The minister stated that despite the challenging environment especially in the area of pipeline security, the NNPC is mandated to ensure steady supply and distribution of petroleum products such as premium motor spirit (petrol), automative gas oil (diesel) and dual purpose kerosene (kerosene) across the country. Dr. Kachikwu said that the NNPC is going into joint venture partnership with State Governments and private companies to expand

NNPC Towers, Abuja

its retail outlets across the country in order to meet national energy emergency needs. He urged the members of the National Assembly to enact legislations that support the

growth and development of the Petroleum sector in order to make the industry work well. Earlier, the Chairman of t h e H o u s e o f Representatives

Committee on Petroleum Downstream, Honourable Joseph Akinlaja who was accompanied on the visit by members of the Committee assured the Minister of the preparedness of the National

Open your finances for public scrutiny, ActionAid tells IOCs

n the light of the huge amount Nigeria is being fleeced by oil companies under the guise of tax breaks, ActionAid has emphasised the need for oil and gas companies, especially the multinational companies, to open their finances for scrutiny, through the publication of their financial and declaring their top and bottom line figures. ActionAid, in a presentation in Abuja, stated that the companies should report their profits, sales, assets, number of employees and tax payments to governments

in each country where they operate, including taxes not paid due to tax breaks. Ms. Ojobo Atuluku, Country Director of ActionAid Nigeria, disclosed that there are incontrovertible evidences from researches that corporate organizations operating in developing countries especially, as declaring soaring profits, while corporate investments in these countries had more than tripled since the 1980s. Atuluku lamented that developing countries are losing a minimum of $138 billion annually to tax

breaks, with Nigeria losing an estimated $2.9 billion or N577 billion annually as a result of tax incentives. She faulted the assumption that granting tax relief to multinationals and large corporations would promote investments that attract capital and contribute to job creation, stating that instead, multinational developmental financial institutions are now warning countries against excessive tax incentives. She stated that, “The Organisation for Economic Development (OECD) has cautioned that ineffective tax incentives may erode resources for the more

Assembly to support the Federal Government in carrying out its fundamental restructuring of the Oil and Gas Industry for the benefit of Nigerians.

important drivers of investment decisions. Such business enhancing factors such as good infrastructure, security, a stable energy supply and not least a healthy and well-educated workforce which investors attach great value to are invariably absent in many developing countries due to revenue lost to excessive tax incentives. “Tax revenue is a prerequisite for the existence of these public goods, and businesses may make higher profits if they contribute their fair share of taxes and get public goods in return.”

2016 February, SweetcrudeReports

Finance

Saraki OSCARLINE ONWUEMENYI

enate President, Dr. Bukola Saraki, says the only way the 2016 Budget would be successful was for the government to emphasise the non-oil and independent revenue generating sources. Senator Saraki, while answering questions from journalists in Abuja, said the Eighth Senate would focus

Budget 2016 will be successful despite poor oil revenues —Senate President attention on other revenue generating areas and ensure that all leakages were blocked. He stated that though the 2016 budget proposal was ambitious, it could be achieved if all that is

necessary to make it work was put in place. “Some of the things that we will begin to look at and which we are going to advise the executive is that while we are working on the budget now, they too should

begin to start working on how to make a plan for implementation. “What tends to happen is that even after we have passed the budget, the administration bureaucracy sometimes make the budget

NLNG faults group on tax incentives

he Nigeria LNG Limited, NLNG, has faulted claims made by ActionAid that the government lost $3.9 billion as a result of tax break granted to the company. ActionAid, a nongovernmental organisation, recently alleged in it report that the Federal Government lost the sum of $3.9 billion as a result of granting

NLNG tax holiday. But, NLNG, in statement signed by its General Manager, External Relations, Mr. Kudo Eresia-Eke, ?said the reality was that the Federal Government’s initial investment of US$2.5 billion, bolstered by the associated tax incentives, has so far yielded over US$33 billion in the form of dividends, taxes and feedgas purchases for the country over the past 16 years.

This is in addition to US$ 5 billion accruing through corporate spend on local goods and services during the same period, Eresia-Eke said. He stated that the company paid $3.6 billion in Company Income Tax and Education Tax between 2014 and 2015. This is in line with NLNG’s corporate vision to help build a better Nigeria.

Explaining the reason for the tax holiday, Eresia-Eke stated that Nigeria LNG Limited was established at a period when the LNG technology was still very new in Africa. "Indeed, the establishment of NLNG made Nigeria the first country in Sub-Saharan Africa to possess such new technology and the second such country in all of Africa. “ he said.

delay,” he said. He further stated that it was likely that the Senate would come out with an amendment bill as regards certain areas of the procurement bill. “That is something that is likely to come out very soon. Some people are looking at that now to see again how we can help the executive to see that the budget is implementable. “The second areas is the issue of funding the deficit,” he told reporters. He further expressed happiness that the Minister of Finance, Kemi Adeosun, had made some comments about the deficit in the budget and how it would be funded. “That is another area that even though we do our part as regards the passing of the budget, funding the deficit is key to ensure that the ability to raise those funds are there,” he stressed.

2016 February, SweetcrudeReports

Finance

Chevron reports $588m Q4 loss, $4.6bn 2015 earnings SAM IKEOTUONYE

S oil giant Chevron has reported a loss of $588 million for fourth quarter 2015, compared with earnings of $3.5 billion in the 2014 fourth quarter. Foreign currency effects increased earnings in the 2015 quarter by $46 million, compared with an increase of $432 million a year earlier, the company said in a statement. Full-year 2015 earnings were $4.6 billion compared with $19.2 billion in 2014. Sales and other operating revenues in fourth quarter 2015 were $28 billion, compared to $42 billion in the year-ago period, the statement also said. “Our 2015 earnings were down significantly from the previous year, reflecting a

nearly 50 percent year-onyear decline in crude oil prices,” said Chairman and CEO John Watson. “We’re taking significant action to improve earnings and cash flow in this low price environment,” Watson stated. “Operating expenses and capital spending were reduced $9 billion in 2015 from 2014, and I expect similarly large reductions again in 2016. In addition, asset sales proceeds were $6 billion in 2015, with additional sales planned for 2016 and 2017.” He added: “Improved refinery reliability allowed us to capture the benefits of a favorable margin environment and post excellent downstream results for the year. “We continued to reshape the downstream portfolio with well-timed asset sales and good progress on petrochemical investments.

Chevron office We advanced our upstream major capital projects. “We had first production from two deepwater projects in Africa, and ramped up production from Jack/St. Malo in the deepwater Gulf of Mexico and our shale and tight resources in the Permian Basin."

Watson commented that the c o m p a n y a d d e d approximately 1.02 billion barrels of net oil equivalent proved reserves in 2015. These additions, which are subject to final reviews, equate to approximately 107 percent of net oil-equivalent production for the year. The

largest additions were from production entitlement effects in several locations and drilling results for the Permian Basin in the United States and the Wheatstone Project in Australia, he said.

Labour

2016 February, SweetcrudeReports

Fashola

OSCARLINE ONWUEMENYI

rganised labour, under the umbrella of the Nigerian L a b o u r Congress, NLC, has alleged breach of due process in the introduction of the recent 45 per cent hike in electricity tariff in the country. The new tariff took off on February 1 amid public outcry and opposition by organised labour, which called for a national protest against the tariff hike. It is opposed to the increase because "due process in the extant laws for such increment was not followed in consonance with section 76 of the Power Sector Reform Act, 2005". NLC President, Ayuba Wabba, who made the disclosed as he rallied workers for the national protest, said: “There has been no significant improvement in service delivery. Moreover, the fact is that most consumers are not metered in accordance with the signed privatisation Memorandum of Understanding (MOU) of

Why we are against new power tariff —Labour There has been no significant improvement in service delivery. Moreover, the fact is that most consumers are not metered in accordance with the signed privatisation Memorandum of Understanding November 1, 2013, which stipulates that within 18 months gestation period, all consumers are to be metered. “There is a subsisting court order dated May 28, 2015, by Justice Mohammed Idris of the Federal High Court in Lagos, in the case of Toluwani Yemi-Adebiyi versus NERC and others, that there shall be no further increment until the determination of the substantive suit.”

The NLC boss explained further that, “The increment at this time negates the present biting and prevailing economic recession vis-a-vis an attempt to further impoverish the poor masses". He explained that labour decided to protest the increase after all efforts to make NERC shelve the idea of increase failed. "Indeed,

rather than see reason with Nigerians, the Minister of Power, Works and Housing has been advancing spurious argument in justification," Wabba stated. He alleged that “Distribution companies have continued to exploit Nigerians by estimated billing system for the majority of consumers, while deliberately refusing to make available prepaid metres. "We also said the challenges in the economy which have adversely reduced the purchasing power of ordinary Nigerians and slowed down businesses including manufacturing have made this increase unsustainable and unjustifiable. “We reached out to core government constituencies including the Minister of Power, the leadership of the National Assembly and NERC, all in an effort to find

an amicable resolution through the quality of the logic of argument and practical realities on ground which include the incontrovertible fact that even before this increment, Nigeria paid the highest tariff per kilo-watt in Africa and contiguous regions. We pay much higher than Egypt and countries with stronger economies.” The NLC president argued that “with the increment, this disparity will not only be substantial, it will kill Nigerians and businesses". The saddest part of it all is that there is no co-relation between the quality of service delivery and this tariff, he further argued, adding that the implementation of the tariff is an act of lawlessness because there is a subsisting restraining court order on further increases.

Labour

2016 February, SweetcrudeReports

Oando's Oleum Academy graduates 200 auto-mechanics

Oando's Oleum Academy graduants SAM IKEOTUONYE

a n d o Marketing Plc has graduated the second batch of 200 mechanics from its Oleum Academy, as part of efforts to exploit the potentials of a u t o - m e ch a ni c s i n t he country. According to Oando Marketing, which had earlier graduated 100 automechanics in its first batch, the scheme is aimed at providing support to government's effort towards diversification of the nation's economy. It said such support was necessary for any nation desirous of turning out selfreliant and entrepreneurial

The programme is part of Oando’s Corporate Social responsibility to bridge the skills gap in the nation, focusing on the automotive industry whilst improving their social status manpower. The beneficiary mechanics were selected after a rigorous process, and went through a three-month intensive training, inculcating a welldesigned training curriculum developed in partnership with Automedics, a well-known

automobile company with a mechatronics training arm. They were consequently awarded the Oleum Academy certificates accredited by the National Open University of Nigeria, NOUN. The programme is part of

Oando’s Corporate Social responsibility to bridge the skills gap in the nation, focusing on the automotive industry whilst improving their social status and relevance in their communities through training and skills upgrade. It equips participants with internationally-recognised technical and life skills for their benefit and that of the nation as well. As the automobile industry constantly advances, and the demand for efficiency, expertise and customer experience increases, there is a need for mechanics to upgrade their skills and keep abreast of industry trends and the ever-changing consumer market space.

In oder to empower them with the lubricants consumer market and the Oleum brand, a Mechanic Oleum Reseller Enterprise initiative was also inaugurated; designed to e n h a n c e t h e entrepreneurial skills of the mechanics, and deepen product usage and breed proximity with users. Appreciating Oando, a beneficiary, Opeyemi Bello thanked Oando Marketing PLC for the opportunity to be able to improve his skills and expand his technical knowledge. He said “this has opened my eyes to a lot of things, now I can work on different cars and models and give the right solutions to my customers.

Local firm commissions ultra-modern laboratory

espite the significant drop in the price of crude oil, an indigenous welding company, Mudiame International Limited, recently commissioned an ultramodern laboratory, a move that has shown the company’s commitment to the development of Nigerian Content. The new laboratory will enable the company carry out destructive and non-

destructive testing, corrosion and metallurgy testing and calibration services. Other services will include inspection services, comprehensive chemical and material analysis. The company also graduated a batch of welders trained at its institute which is affiliated to the International Institute of Welders, IIW. Speaking at the event, held in Port Harcourt, River State, the Managing Director

of the company, Mr. Sunny Eboh stated that the quality of the instruction imparted to the trainees was comparable to what would be obtained from top welding institutes around the world, adding that the trainees were awarded the International Welding Engineers certificates which are internationally acceptable. In his comments, the Executive Secretary of the Nigerian Content

Development and Monitoring Board, NCDMB, Mr. Denzil Kentebe, commended Mudiame Limited for initiating and completing the training programme, noting that an appreciable number of operating and service companies had begun to organise capacity building programmes for youths in their operations or in areas with significant skill gaps. He stressed that such initiatives affirm that stakeholders in the oil and

gas industry had imbibed the philosophy of the Nigerian Content Act and were determined to imbue young Nigerians with the capacity to execute job scopes which were hitherto considered complex and had to be performed by expatriates or exported abroad.

Labour

2016 February, SweetcrudeReports

Fuel station attendant

he Nigeria L a b o u r Congress, NLC, has blamed the convoluted management of the oil subsidy regime, including for petrol and kerosene, as reasons Nigerians are suffering, and not the subsidy itself. NLC President, Ayuba Wabba, who spoke in an interview with our correspondent in Abuja, denounced the politics around petroleum subsidy as monumental corruption that was put together by government officials. He said, "Frankly speaking, I doubt whether there is still an existing subsidy with the current market price of crude oil, because the price nosedived, as such, our conclusion is that we’re not sure that what they did was even removal of subsidy. "What they did was outright price adjustment because the template which they displayed on their website after 24 hours that template was actually withdrawn. The template would have allowed us to be able to interrogate what parameters were used to do the price adjustment." He added, however, that "the truth is that with the current global price of crude oil, we should even be paying lower than what they have come up with at the moment. So, it’s clear that it is just a

NLC demands oil price template from PPPRA …Says govt colluding with IMF, marketers to punish Nigerians price increase and what we have kept on saying is that there is still a lot of element of corruption in the system even in Pipeline and Products Marketing Company (PPMC) itself. "So what we’re calling subsidy in Nigeria, is actually corruption and why I say so is because if you look at the current price, Nigerians are suppose to pay less but what they did instead is that we’re now paying more due to corrupt practices. They have transferred the burden now to the larger Nigerian citizens."

According to the NLC boss, "So I can say clearly that I’m not sure with the current fall in global oil price, Nigerians are supposed to pay lower. In many countries, people are paying lower, what they are trying to call subsidy now is because of the fact that one we’re basing our argument on importation. "This importation will be in dollars and they have already devalued our currency. So it’s just this element of corruption that they are transferring to all

I believe that if there is a transparent process in place, Nigerians should be paying less under the current dispensation. There is continuous funding of crude oil import

of us and therefore one of the processes of adjusting the price of kerosene is not transparently done because there is no template. "If you go to their website now, you will find out that there is no template, so what basis have they used that we can actually interrogate to see whether there is even any subsidy or not. The one they did for Petroleum Motor Spirit (PMS), where they removed 50 kobo, if you look at the template carefully it’s one of the components that they removed and that is what they call removal of subsidy." Wabba therefore contended that what the Federal Government did with the removal of subsidy for kerosene "is like testing the waters." He said, "I believe the price increase is in agreement with the prescription of the International Monetary Fund which favours price modulation system. So, I won’t be surprised that once the price of product goes

beyond $46 to the barrel, we are sure that what they would do is to adjust the price and transfer the burden to Nigerians. What we’re therefore saying is that instead of transferring this component of corruption to Nigerians why not make the process transparent? "I believe that if there is a transparent process in place, Nigerians should be paying less under the current dispensation. There is continuous funding of crude oil import in many parts of the world. But because of inherent corruption in the system, which we discovered in the aftermath of the 2012 subsidy scam, clearly we now know that both the Nigeria National Petroleum Corporation, NNPC, the PPMC and some oil marketers cannot isolate themselves from the mess we’re in right now. So those are issues that I think should form public opinion in responding to this issue.”

Labour

2016 February, SweetcrudeReports

Oilserv boosts Nigerian Content through technical training scheme

ilserv Limited, an oil and gas s e r v i c e company with expertise in pipelines and flowlines, has given a boost to the Nigerian content development drive through its ethnical training scheme. The company, under the scheme, recently completed the training of 28 Nigerian youths in auto-welding, manual welding and fitting and rigging activities. Other focus areas of the scheme included basic equipment maintenance, assets training, horizontal directional drilling operation and operation of heavy duty equipment. Speaking at the graduation ceremony held in PortHarcourt, Rivers State, Managing Director of the company, Sir Emeka Okwuosa, stated that most of the trainees would be absorbed by the company. He explained that his company was committed to human capital development and was determined to make young Nigerians participate in the development of the Nigerian economy. Okwuosa expressed satisfaction that the training was conducted without any incident, rather the trainees exhibited professionalism and good attitude to work. He noted that a batch of the trainees assigned to the Obiafu/Obrikom to Oben, OB3, gas pipeline project welding crew welded a total of 360 joints without a repair. He promised that more young Nigerians will benefit from the scheme and more awareness will be created about the programme. In his comments, the Executive Secretary of the Nigerian Content Development and Monitoring Board, NCDMB), Mr. Denzil Kentebe commended Oilserv Limited for initiating the technical trainee scheme, which was in line with its strategies for implementing the Nigerian Content Act. The Executive Secretary, who was represented by the Manager, Human Capital Development, Mrs. Michelle Aiyegbusi, explained that part of the Boardâ&#x20AC;&#x2122;s mandate is to empower Nigerian entrepreneurs and imbue young Nigerians with trainings across specialties in the oil and gas sector. Aiyegbusi challenged other companies to initiate similar

Oilserv workers

programmes as the products will contribute to the industrialisation of the country. She urged the trainees to be diligent in in their work, stressing that success in life is not only propelled by technical skills but also the

More young Nigerians will benefit from the scheme and more awareness will be created about the programme

kind of attitude one adopts. In their reaction, the graduands expressed their gratitude to Oilserv Limited for the opportunity given to them and promised to put in their best in all they do.

Mexico to provide new opportunities for oil industry workers

t the beginning of his term, oil exports were responsible for 40 percent of Mexicoâ&#x20AC;&#x2122;s budget, since then the figure has gone down to 8 percent, Nieto said during a Thursday visit to the state of Tabasco. According to Nieto, oil industry workers need to be provided with new job opportunities that are going to be created in such oil producing states as Tabasco and Campeche. Oil and gas production in Campeche accounts for over 35 percent of Mexicoâ&#x20AC;&#x2122;s total. In December, Mexican authorities announced that Mexico oil revenues decreased by 38 percent in the last 10 months compared to the same period in 2014. In mid-January market prices for crude benchmarks dropped to a 12-year low, sliding below the historic level of $30 a barrel.

Oil workers

Solid Mineral

2016 February, SweetcrudeReports

Fayemi OSCARLINE ONWUEMENYI

inister for S o l i d Minerals Developme nt, Kayode Fayemi, has said that the Federal Government would need to clear all legal hurdles surrounding the Ajaokuta Steel Company Limited for it to begin to function. The minister said, while defending the 2016 Budget proposal of the ministry before the Senate Committee on Power and Steel, that it would not be in the national interest to leave the complex the way it is given President

Legal hurdles still impede revitalisation of Ajaokuta, says govt ...Decries 'trillions' spent on importation of steel materials Muhammadu Buhari’s determination to see it up and working in the shortest possible time. Dr. Fayemi decried the trillions of naira spent annually on steel importation into the country and assured that the resolution of the legal issues surrounding the National Steel Industry would

The Federal Government would need to clear all legal hurdles surrounding the Ajaokuta Steel Company Limited for it to begin to function

Nigeria, US to partner on improved minerals data generation

he Nigerian government's plan to fully exploit its mineral resources and thus diversify it's revenue base, has received a boost with plans by the United States Geological Survey, USGS, to assist the country in its bid to generate concrete and reliable geosciences data of solid mineral deposits across the country. US Ambassador to Nigeria, Mr James Entwistle, disclosed this

during a visit to the Minister of Solid Minerals, Dr Kayode Fayemi, at the Ministry’s headquarters in Abuja. Entwistle noted that the US Geological Survey would set the process in motion with the NGSA from next week beginning with strategic engagements aimed at working out suitable technical partnership. The US envoy said it was imperative for both countries’ geological survey agencies to collaborate in a way of fasttracking the development and

harnessing the sector’s potential and to actualise the dream of diversification and huge revenue generation. He said, “The US Geological Survey next week will partner with the Nigerian Geological Survey Agency to begin to see what kind of technical cooperation that might be possible, particularly in the areas of figuring out exactly what Nigeria has on ground, what quality and we want to see what is possible in that regard.”

In his remarks, Dr. Fayemi described the US Government’s readiness to partner with Nigeria as a welcomed development and a good omen for the sector and economy. He told the US envoy that similar partnerships by Nigeria with institutions like the World Bank and other governments with vast experience in mining will help achieve President Muhammadu Buhari’s aspiration to diversify the economy through the Solid Minerals sector.

be accorded top priority in the year. The chairman, Senate Committee on Power and Steel, James Manager, said that the development of any nation is tied to a vibrant steel sector. He urged the minister to tell Nigerians more about Ajaokuta and use publicity to attract interest towards the company. The senators stressed the need to raise the revenue profile of the agencies under the ministry, tackle the legal challenges around the steel industry, and explore the Public Private Partnership option in getting the sector to be up and running. They also urged the ministry to commence any necessary legislative process that would aid its work before the year runs out.

Freight

2016 February, SweetcrudeReports

NIMASA generated N70.8bn in 2015, says DG

Apapa port KUNLE KALEJAYE

he Nigerian ?Maritime Administration and Safety A g e n c y , NIMASA, has revealed that despite its low budget performance in 2015, it generated N70.8 billion revenue for the government during the year. NIMASA's Acting Director General, Mr. Haruna Baba

Jauro, disclosed this during the visit of the chairman, Senate Committee on Marine Transport, Senator Ahmed Rufai Sani, and his team to the agency. Maintaining that the agency was keen improving on ?its revenue stream in 2016, Jauro ?informed the senators that NIMASA earned $207 million ?in charges and tax from the Nigerian Liquefied Natural Gas, NLNG. The acting director general

explained that these revenues came in despite the agency's low budget performance, explaining that the low budget performance was ?as a result of the change in government, management of the agency and restructuring of ministerial committee. But, he said the low budget performance in 2015 would not deter the agency from performing better this

year. On challenges facing NIMASA, Jauro listed these to include inadequate manpower and capacity development, urging the Committee's assistance in having them resolved. Others challenges are noncompliance by shipping companies to regulations, he said as he asked for better platform for effective operation, intervention fund, and equipment for training

and charting. The chairman of the Senate Committee, in his response,? said the purpose of the committee's visit to NIMASA was to ensure that the agency's record books were in order and were made available as at when due when it is called for. Sani also ?said that the visit is part of the committee's oversight function in the maritime sector.

Ban Ki-moon visits IMO, stresses need for sustainability

nited Nations, UN, SecretaryGeneral Ban Kimoon underlined the important role shipping has to play in ensuring sustainability of world trade during a recent visit to the International Maritime Organisation, IMO. Speaking at a specially convened IMO assembly, Ban congratulated fellow

countryman Lim Ki-tack on having assumed the top role at the IMO last month, quipping that there were now two Korean SecretaryGenerals within the UN organisation. But this was not the reason for his visit, he explained, rather it was to emphasise two recent landmark agreements reached by the international community – the 2030 Agenda for

Sustainable Development and the Paris Agreement on climate change. Both these agreements were “important commitments and visions,” representing “a triumph for multilateralism… at a crucial moment for the future of humankind,” he said, and the maritime sector and IMO had a “major role” to play in their implementation.

The goals outlined in the agreements need to be followed in their totality rather than individually in isolation, he added, while greater empowerment of young people and women on a global basis was also needed for the future good. Ban paid tribute to the work already carried out by the IMO in having framed the Energy Efficiency Design Index, EEDI, for

newbuildings, which he said would help achieve to a 30% reduction in emissions by 2025. He also praised the shipping industry for its humanitarian work in assisting migrants and refugees “undertaking perilous journeys in unseaworthy boats,” especially in the Mediterranean.

2016 February, SweetcrudeReports

Freight

Nigerian port

African shippers laud Nigerian Council over law capacity

he Union of A f r i c a n S h i p p e r s Council, UASC, which met recently for its 10th General Assembly in Accra, Ghana, has lauded the Nigerian Shippers Council, NSC, for its efforts at building capacity for judges through its annual maritime law seminars. Speaking at the annual assembly meeting held at Ghana's International Conference Centre, the chairman of UASC, Dr. Nortey Quarshie Omaboe, said he had observed and keenly followed the Nigerian Shippers Council’s consultative fora and stakeholders' engagement, seeking to address bottlenecks in the international trading system. “These are indeed laudable and commendable initiatives. As shippers’ organisations within the sub-region, it would be my expectations that you would utilise the common umbrella that the UASC offers to harmonise your approaches towards the resolution of the

myriad of shippers’ problems and develop common templates for trade facilitation in the sub-region,” Omaboe noted. The need for members to support young and weaker ones as well activate closer ties among African economies was the focus of deliberations of the 10th Assembly of UASC. Omaboe, who called for closer ties amongst West African economies to improve its participation in global value chain, said there was need for effective linkages in economic activities.

Indeed, a recent study has shown that for developing economies to effectively participate in the global value chain, there should be effective linkages in activities such as farming, extraction of natural resources, research and development, manufacturing He said, “Indeed, a recent study has shown that for developing economies to effectively participate in the global value chain,

there should be effective linkages in activities such as farming, extraction of natural resources, research and d e v e l o p m e n t ,

manufacturing, design, management, marketing, distribution and post-sales services across the entire sub-regions value chain". Earlier, executive secretary of the NSC, Hassan Bello, visited the Ghanaian chief justice, Justice Georgina Theodora Wood, where he observed that the admiralty law and the maritime industry remained very critical to the development of national economies and advancement of international trade.

Customs Apapa command earns N23.4bn in January KUNLE KALEJAYE

papa Area command of the Nigeria Customs Service, NCS, generated N23.4 billion as revenue for the month of January 2016. This was disclosed by Comptroller Willy Egbudin during a stakeholders' forum organised by the command. Egbudin expressed the hope that Apapa command would exceed the 2015 revenue, which saw a decline from N301 billion in 2014 to N288

billion in 2015. “We pray that this year, we should exceed N300 billion to N400 billion or N500 billion. That is our expectation. “So far, I don’t think we are doing badly even though we are not meeting the target because for the month of January this year, we had been able to realise N23.4 billion compared to January last year whn we realised N20.7 billion,” he said. Egbudin, however,

admitted that there had been a sharp drop in importation but added that with honest and transparent declaration, the revenue target of N1 trillion set for the NCS this year would be achieved. Meanwhile, ?clearing agents operating at the Apapa port have raised the alarm over fresh moves by sacked government agencies to return to the ports. The agents also accused some agencies presently at the ports of not making themselves available when

examination was being carried out by Customs officers. A representative of the Lagos Chambers of Commerce and Industry, LCCI, Julie Ogboru, stated that because the agencies were not usually on ground when examination was being conducted, they always requested fresh examination, thereby causing delay and making cargo clearance more cumbersome.

Motoring

2016 February, SweetcrudeReports

The best small crossovers, and why you may want one

ittle crossovers make a lot of sense for drivers looking for better gas mileage and more utility. Here are some of our favorites. Small is chic nowadays. Tiny houses have become aspirational homes and more people have forsaken more for less. Big connotes excess at time when excess feels a little wrong. For years, people have spoken about rightsizing their lives and, now, we have a new crop of small but versatile vehicles that just might satisfy America’s Goldilocks Disorder of searching for something that is just right. Tiny crossovers, a segment no one even considered 10 years ago, has become the newest entry to boost sales and provide more models from small car platforms. Last year, Honda introduced its HR-V and Mazda unveiled its CX-3 to join in the fight for buyers. Toyota will join the fray soon and, likely others will try to take on the likes of the Buick Encore, Chevy Trax and Nissan Juke. These little runabouts provide a higher-than-a-car riding position, better clearance than any subcompact or compact car (which is usually the underpinnings of these vehicles) seating for four or five people and typically a hatchback like storage that can easily accommodate a family of four’s groceries for a week. They have carlike performance with typically decent gas mileage and many have below $25,000 price tags. Sales for small sport utilities grew 8.2 percent in 2015, but that number reflects a bigger group than just tiny crossovers, which is a segment that shifts in definition. Last week, I was reminded how much I like these vehicles during a weeklong test drive of the new Jeep Renegade. The higher body gave me that commanding view of the road, and its short body made it easy to squeeze into tiny parking spaces

The interior is nicely appointed and the heated seats were very welcome as the temperature dipped into the teens. It’s exterior is nearly toyish with its hard right angles and straight lines. Its taillights have big X’s in them that serve as the reverse lights. The four-wheel drive system was also handy and allowed for some serious sideways driving on the icy roads. There is no other small crossover half as capable for the price. Though the fully loaded Trailhawk costs more than $31,000, more than $12,000 more than the starting price of the entry Renegade. But there are some tiny crossovers that shed ruggedness for a few more style points. The Buick Encore has always been one of my favorites in this category, perhaps because it was my first. Before the Encore, I had never thought about the tiny crossover. The 2016 Encore Sport features a new 1.4L four-cylinder engine that produces 153 hp and hits 34 mpg on the highway. It starts at $24,000 but a nicely loaded model will run you closer to $30,000 if you want all-wheel drive and other niceties. Perhaps one of the best features of the Encore is that it is simply the quietest riding tiny crossover. Others such as the Honda HR-V and Chevrolet Trax have much nosier rides. (The Chevy is surprising as it uses the same underpinnings as the Encore.)

along Detroit’s snow-covered streets. It may be the smallest Jeep in Jeep’s lineup, but it can quickly become a favorite. The Trailhawk model I drove comes with the bigger 2.4L four-cylinder engine that

creates 180 hp and 175 lb-ft of torque mated to a nine-speed automatic transmission. It was nicely appointed with a large touch screen and all of the bells and whistles of Chrysler’s UConnect system. That includes AM/FM/Satellite radio, Blue Tooth connectivity and crystal clear navigation.

The Encore also offers a much more premium and luxurious interior as it continues to remain one of those few premium brands that offer luxurious amenities at less than luxurious prices. For the money, another great alternative tiny crossover is the Honda HR-V. Entering the segment last year, the HR-V is a nimble little carryall. It’s fun to drive, is amazingly small but feels much larger

CONTINUES ON PAGE 39

Motoring

2016 February, SweetcrudeReports

The best small crossovers CONTINUED FROM PAGE 38 inside. It gets its power from a 1.8L four-cylinder engine that produces 141 hp and 127 lb-ft of torque. While it offers a sixspeed manual transmission, the more popular models will have Honda’s continuously variable transmission that can sometimes whine a little on the highway, but otherwise feels like a traditional automatic transmission. It’s riding position is lower than some of the tiny crossovers, with a roof height of 63.2 inches compared with something like the Renegade, which has a roof height of 66.5 inches. But it still allows you to peek over the tops of other cars. Honda took some of the lessons it learned from the Fit and applied them to the HRV, such as the second row seats that can fold up or down to provide different amounts of space for carrying things. It’s has more sedated looks compared to the competition, something many owners will overlook because of its 35 mpg on the highway rating. There is also an all-wheel drive model available. Mostly, however, the HR-V offers a very attractive price. Its price starts at under $20,000 and a nicely loaded EX-L AWD model prices starts at $26,000. The Chevy Trax arrived after the Buick Encore, in part, because of the success of its Buick brother. (The Trax had been sold in Europe.) I only wish it would have stayed there, though many might disagree and prefer saving $4,000 over the Encore. It has the same driving manners as the Encore, using the same 1.4L turbocharged engine and automatic transmission. It can be fun around town, though it lacks a real feel of power. The $4,000 savings is noticeable inside the open cabin. Surfaces are hard plastic and there’s a feel about it that just isn’t as welcoming as the Encore. Sometimes, it’s worth spending a little extra money. But the Trax starts at $20,000, and that’s attractive to lots of customers. The Mazda CX 3 is the one tiny crossover I have not had a chance to drive yet (the rest of Yahoo Autos liked it so much it won our Savvy Ride of the Year for 2016.) It arrived at dealerships last fall,

making it one of the newest tiny crossovers in the bunch. First, it is powered by Mazda’s 2.0L fourcylinder engine, producing 146 hp and 146 lb-ft of torque. It’s also a product of Mazda’s SkyActiv construction, which is an ingenious effort cut weight in meaningful weighs to improve performance and efficiency. (Mazda claims up to 35 mpg on some models.) Mazda also has a proven track record for fun driving cars, so I expect it will toss itself into corners well and feel nimble on any surface. (The Mazda 3 is one of the most fun hatchbacks around.) Pricing is on par with the HR-V, with a starting price under $20,000 and a loaded up higher end model topping $25,000. There’s also that versatility that all of these vehicles offer with folding second rows and that hatch opening. By no means is this list complete. Fiat offers a 500X and Nissan offers its Juke, which could fall into this category. More are certainly on their way, if for just the reason that tiny crossovers are a big way for carmakers to pull more profits out of their small car platforms. The success of the current crop of tiny crossovers only means that more is sure to come.

Technology

2016 February, SweetcrudeReports

Problem of Boil off in LNG supply chain

wing to the e v e r increasing share of the natural gas in the world consumption of power sources, international maritime traffic with liquefied natural gas is continuously growing, with even greater expectations for the future. A large portion of natural gas is located far from large customers. Most of the international trade in natural gas, depending on the distance, takes place by pipelines and LNG ships in liquid form, and rarely in special heat insulated tanks b y r a i l o r r o a d transportation. Due to lower investment costs, the transportation of gas by pipelines is preferred up to distances of about 2000 km. After that, the costs grow significantly faster than the costs of transportation of gas in liquid form, with a tendency for change if advances in technology are made. The LNG market has greater flexibility because, in general, the capacity of one exported unit may cover the capacity needed for two or three imported units. Furthermore, it is clear from the current worldwide liquefied natural gas market that LNG tends to be exported to regions where gas prices are higher (Asia, USA and Europe), and this flexibility does not exist or exists to a lesser extent in transportation by pipelines. LNG has been steadily increasing its market share in the global gas trade. According to data from the IEA (International Energy Agency) statistical review for 2010, the global LNG market now accounts for about 9% of demand for natural gas or 299 billion m3 . Liquefied natural gas is stored and transported in tanks as a cryogenic liquid, i.e. as a liquid at a temperature below its boiling point. Just like any liquid, LNG evaporates at temperatures above its boiling point and generates BOG. Boil-off is caused by the heat ingress

into the LNG during storage, s h i p p i n g a n d loading/unloading operations. The amount of BOG depends on the design and operating conditions of LNG tanks and ships. The increase in BOG increases the pressure in the LNG tank. In order to maintain the tank pressure within the safe range, BOG should be continuously eliminated. In the LNG supply chain, BOG can be used as fuel, re-liquefied or burned in a gasification unit. Furthermore, the more volatile components (nitrogen and methane) boil-off first, changing LNG composition and quality over time. This phenomenon, known as ageing, is especially important in LNG trade since LNG is sold depending on its energy content, i.e. specification at the port of unloading determined depending on the volume of the LNG transferred, its density and heat value. This paper deals with the problem of boiloff in the LNG supply chain and its main causes. The general methods of handling and utilization of BOG at different points in the LNG supply chain are presented. Furthermore, the paper presents a calculation method used in the LNG industry to determine LNG energy content transferred during loading and unloading of LNG tankers. FEATURES OF LNG AND ITS SUPPLY CHAIN Liquefied natural gas is a liquid substance, a mixture of light hydrocarbons primarily composed of methane (CH4 , 85-98% by volume), with smaller quantities of ethane (C2 H6 ), propane (C3 H8 ), higher hydrocarbons (C4+) and nitrogen as an inert component. The composition of LNG depends on the traits of the natural gas source and the treatment of gas at the liquefaction facility, i.e. the liquefaction pre-treatment and the liquefaction process. It can also vary with storage conditions and customer requirements (Benito, 2009;

British Petrol and International Gas Union, 2011). Namely, LNG producers determine the quality of their LNG based on the composition of field gas and more importantly, market demand. Liquefied natural gas is a colourless, odourless, noncorrosive and non-toxic liquid, lighter than water. Typical thermophysical properties of LNG are presented in Table 1.

Table 1.

The LNG supply chain consists of extraction and production of natural gas, liquefaction, marine transportation of LNG, and LNG storage, re-gasification and delivery of natural gas to consumers. The extraction of natural gas from the earth’s surface is the first step in the supply chain and includes drilling and gas extraction. The gas produced can come from a gas field (nonassociated gas) or be produced along with oil (associated

produced natural gas is transported by pipelines from gas fields to a liquefaction facility, located in large areas along the coast. One of the primary purposes of liquefaction plants is to ensure the consistent composition and combustion characteristics by cooling and condensing natural gas to allow its loading onto tankers as LNG and delivery to the end user. Therefore, their design must include several parallel processing modules (trains) for the preparation and liquefaction of natural gas, LNG storage tanks, and facilities for loading LNG tankers, general purpose facilities, i.e. sea water pumping stations, electricity generation plants, nitrogen production

Thermo-physical properties of LNG Parameter

Value

Boiling point Molecular weight Density Specific heat capacity Viscosity Higher heat value

-160°C do -162°C 16 – 19 g/mol 425 - 485 kg/m3 2,2 – 3,7 kJ/kg/°C 0,11 – 0,18 mPa•s 38 - 44 MJ/m3

LNG may be classified in accordance with several criteria: Density, Heat Value, Wobbe Index, Methane or Nitrogen amount, etc. The parameter most commonly used for its classification is density. Accordingly, we differentiate between heavy, medium or light LNG’s. The typical composition and density of three typical LNG qualities are depicted in Table 2.

Table 2.

gas). The distinction between associated and nonassociated gas is important because associated gas must have liquefied petroleum gas (LPG) components (i.e., propane and butane) extracted to meet the heat value specifications of the LNG product. Natural gas derived directly from the gas field is called “raw” gas. Such gas is associated with a number of other compounds and gases that may have an adverse effect on liquefaction and combustion. The

plants, compressor stations, workshops and system security. The technical processes of purification of gas from harmful components to obtain gas acceptable for use and liquefaction are performed in the preparation trains. Therefore the following need to be removed prior to liquefaction: components that would freeze at cryogenic process temperatures during liquefaction (carbon

Classification of LNG by density (Sedlaczek, 2008) Composition (%)

LNG Light

LNG Medium

LNG Heavy

Methane

98.00

92.00

87.00

Propane

1.40

6.00

9.50

Propane

0.40

1.00

2.50

Butane

0.1

0.00

0.50

Nitrogen

0.10

1.00

0.50

Density (kg/m3 )

427.74

445.69

464.83

CONTINUES ON PAGE 41

2016 February, SweetcrudeReports

Technology CONTINUED FROM PAGE 40

dioxide-CO2 , water and heavy hydrocarbons), components that must be removed to meet the LNG product specifications (hydrogen Sulfide-H2 S), corrosive and erosive components (mercury), inert components (helium and nitrogen) and oil. Typical specifications of gas for liquefaction are less than 1 ppm of water, less than 100 ppm CO2 and less than 4 ppm H2 S. Following the r e m o v a l o f m o s t contaminants and heavy hydrocarbons from the feed gas, the natural gas is subjected to the liquefaction process. Natural gas is converted to its liquefied form by the application of refrigeration technology making it possible to cool the gas down to approximately 162°C when it becomes a liquid. The produced LNG is stored in cryogenic tanks below the boiling point at the pressure of 0.05-0.2 bar until an LNG tanker arrives to transport the product. Upon the arrival of the tanker, LNG from the storage tank is loaded from the loading plant into the LNG tanker, which will transport the gas to the receiving terminal. For safety reasons, storage tanks at loading and receiving terminals in which liquefied gas is stored usually consist of two tanks designed to be fully loaded. The inside of the container in which liquefied gas is stored is usually made of stainless steel resistant to low temperatures. The outer tank is made of pre-stressed concrete and designed to fully contain LNG in case of spillage and be fully loaded in the event of damage to the inner tank. Apart from safety aspects, LNG tanks are also designed to minimise the ingress of heat into the tanks to prevent the boiling (evaporation) of a fraction of the LNG. The usual tank volumes range from 80.000 to 160.000 m3 . Step three in the LNG supply chain is the transportation of liquefied natural gas to the receiving terminal. Liquefied natural gas is carried by specially designed ships, LNG tankers, in specially insulated tanks inside the hull at near atmospheric pressure, at the temperature of -163°C. In these tanks, the cargo is kept fully refrigerated using insulation and the effect of a small amount of evaporated cargo

Problem of Boil off in LNG supply chain generated during the voyage. LNG tankers are a combination of classic ship design, special materials and advanced containment systems for handling cryogenic cargo. Today there are four containment systems in use on these vessels. Two of the designs are of the self supporting type, namely Moss spherical tanks and SPB tanks (Self supporting Prismatic type B tank). The other two are of the membrane type and today their patents are owned by Gaz Transport & Technigaz (GTT). Operating pressure in containment tanks ranges between 0.05 and 0.12 bar, at which LNG cargo reaches the equilibrium temperature corresponding to the operating pressure.

ll LNG tankers have double hulled design, which greatly increases the reliability of cargo containment in the event of grounding and collision. The majority of existing LNG tankers have the cargo capacity ranging between 120,000 m3 and 150,000 m3 , with some ships having the storage capacity of up to 264,000 m3 . Due to the required high-capacity, reliquefaction plants for evaporated cargo are generally not installed into these vessels. Since evaporated cargo provides a source of clean fuel, most LNG tankers have a steam-turbine propulsion system. The reason is high reliability and safe use of evaporated cargo that burned in the boilers. Q-flex type tankers having the capacity of 210,000-216,000 m3 and Q-max tankers having the capacity of 260,000270,000 m3 constructed with re-liquefaction plants are exceptions. These vessels are intended for long distance transportation of liquefied natural gas, for example from Qatar to the United Kingdom or the United States. Loading and unloading rates vary between 12,000 and 14,000 m3 per hour depending on the size of the LNG tanker. During loading, according to IMO (International Maritime Organization) requirements each tank is filled to 98% of its

total volume. The remaining 2% of storage volume is required to prevent any entry of the liquid into ventilation pipeline and from spilling into the surrounding hull structure. Between 98.5 and 99% of the cargo is unloaded. The remaining quantity of LNG remaining on board after unloading, called a “heel”, is used during the ship’s ballast voyage to keep the tanks cold, as well as fuel for the propulsion system and the ship’s energy system. The receiving terminal (sometimes called a re-gasification facility) is the fourth and last component of the LNG supply chain. Its basic task is to receive and unload liquefied natural gas from LNG tankers, store, vaporise LNG and distribute the gas into the distribution n e t w o r k (Dundoviæ et al., 2009). The r e c e i v i n g terminal is designed to deliver the s p e c i f i e d quantity of gas i n t o t h e distribution pipeline and maintain a reserve quantity o f L N G . Therefore, its design must include the following elements: a system for receiving and discharging LNG tankers, storage tanks, a re-gasification plant, a control system to control the LNG boil-off gas, supplying their own consumption (utilities), equipment and facilities support. Since natural gas is odourless, the odourisation of the re-gasified natural gas is required in many regions and countries before its distribution to consumers. An atypical odorant is mercaptan or tetrahydrothiophene (British Petrol and International Gas Union, 2011). BOIL-OFF IN THE LNG SUPPLY CHAIN Liquefied natural gas is stored and transported in tanks as a cryogenic liquid, i.e. liquid

at a temperature below its boiling point. Due to heat leakage into LNG and its cryogenic nature, during storage, shipping and loading/unloading modes LNG continuously evaporates. Inside the tanks, LNG exists in an equilibrium between a thermodynamic liquid and vapour, depending on the given pressure and temperature. Since pressure in the tank is low, the multi-component mixture system acts in keeping with Raoult’s law (Figure 1). In Figure 1, p is the total vapour pressure of the vapour phase, pi sat the saturation pressure of a pure component i in the liquid phase at temperature T, yi and xi the fraction of component i in the vapour phase and the liquid phase and Ki the dimensionless equilibrium ratio. Therefore, any heat ingress causes evaporation of the liquid on its surface without any visible bubbles. Namely, to keep the temperature constant and appropriate for tank pressure, LNG will cool itself (auto-refrigeration) by evaporating a small portion of the LNG and generated BOG (Dimopoulos and Frangopoulos, 2008; British Petrol and International Gas Union, 2011).

Figure 1 General criteria for the vapour-liquid equilibrium for LNG as multi-component mixture.

The quantity of BOG depends on the design and operating conditions of storage tanks and a ship’s cargo tanks. The LNG supply chain with boil-off source is shown in Figure 2.

he increase of BOG in storage and ship’s tanks increases the LNG operating tank pressure. In order to maintain the operating tank pressure within the safe range, BOG should be continuously removed. At the loading terminal, BOG is usually used as fuel in the liquefaction plant production process. At receiving terminals, it is either burned or sent to the regasification plant using BOG compressors. During the journey of an LNG tanker, depending on the type of the propulsion system, BOG can be utilized as fuel, reliquefied or burned in a gasification unit. Since the boiling points of different components of LNG widely vary, from -196ºC to +36ºC, the rates of evaporation of CONTINUES ON PAGE 42

2016 February, SweetcrudeReports

Technology

Problem of Boil off in LNG supply chain

CONTINUED FROM PAGE 41

more volatile components, such as Nitrogen and Methane, are higher than those of heavier components, i.e. ethane, propane and other higher hydrocarbons (Sedlaczek, 2008). Therefore, the quality and properties of LNG steadily change over time. This slow but continuous process is called ageing or weathering of LNG (Faruque, Zheng Minghan and Karimi, 2009; G³omski and Michalski, 2011; Benito, 2009; British Petrol and International Gas Union, 2011). In the LNG supply chain, LNG is sold at the receiving terminal, depending on its energy content typically measured in GJ, GWh or MMBTU. Ship charterers, mostly oil & gas or energy companies, buy LNG cargo at the loading terminal at a certain production cost, i.e. Free On Board (FOB) price and sell LNG at the receiving terminal at a higher CostInsurance-Freight (CIF) price which includes the cost of fuel, insurance, port charges and charter rate. Since BOG reduces the quantity of cargo delivered by LNG tankers and increases the heat value of LNG in storage and ship’s tanks, the quantity of BOG is a key factor for the technical and economic evaluation of the LNG supply chain. 3.1. Boil-off of LNG in storage tanks during holding mode

The holding mode is referred to as the period between loading/unloading of LNG tankers (Sedlaczek, 2008). At loading and receiving terminals, LNG is stored in cryogenic storage tanks at standard operating pressure ranging from 0 to 0.15 bar above atmospheric pressure.

here are two main sources of boil-off gas during storage of LNG in holding mode, namely heat ingress into storage and pipes from the surroundings and changes in the ambient (barometric) pressure. Heat ingress from the surroundings means that BOG is generated continuously in the tanks. In order to reduce boiloff, storage tanks have multi-layered insulation that minimizes heat leakage. The driving force for heat ingress into an LNG tank is the difference between the outside temperature and tank temperature. Due to the large temperature differences between the medium and the environment, the heat ingress into the LNG through floor, walls and roof of storage tanks (Figure 3) may occur in three ways: by conduction, by convection and by radiation. Storage tanks are typically designed to reduce the ingress of heat from the surroundings and solar heating so that vaporisation is less than 0.05 % of the total tank content per day, although this can vary from 0.02 to 0.1% (British Petrol and International Gas

Union, 2011). At loading and receiving terminals, a typical loading/ unloading system c o n s i s t s o f loading/unloading arms, circulation pipelines transferring LNG from ships to storage tanks and vice versa, pumps, etc. During the holding mode, a small portion of LNG circulates through the pipelines to maintain their cryogenic temperature. Circulating through the pipeline, LNG absorbs the heat from the surroundings and the heat generated from pumping, turbulent flow, and line friction. The absorbed heat generates additional BOG in storage tanks. This quantity of BOG depends on the length of the pipeline and the power of the pumps (Faruque et al., 2009; Sedlaczek, 2008; British Petrol and International Gas Union, 2011). In storage tanks, a significant increase in the boil-off rate can cause a drop in atmospheric pressure. As atmospheric pressure drops, tank pressure and bubble point temperature of LNG decrease. To equilibrate with this lower pressure, the temperature of the LNG in the tank has t o d e c r e a s e b y approximately 0.1°C for every 0.01 bar drop (Sedlaczek, 2008). This favours greater boiloff because the only way to

decrease the temperature in the tank is to release some of the liquid into gas. A drop in atmospheric pressure only has effect if it is rapid, because it is only then that it can cause a significant increase in the boil-off rate from the storage tank. BOG produced during holding mode in storage tanks is usually called tankage BOG (Faruque et al., 2009). When heat is added into LNG, the vapour pressure inside the tank increases. In order to maintain the tank pressure within the safe range, tankage BOG should be removed by compressors. At loading terminals, BOG is usually compressed and exported to the plant fuel system.

t r e c e i v i n g terminals, BOG is compressed in a regasification plant where it can be compressed and exported as gas or liquefied and exported as gas. In case of condensation problems, the vapour is burnt. Boil-off during loading/unloading mode The loading/unloading mode is the period when an LNG tanker is moored to the jetty at loading and receiving terminals and connected to onshore storage tanks with loading/unloading arms and insulated pipelines. Modern LNG terminals are designed to accept LNG-tankers having the capacity from 87,000 m3

to 270,000 m3 . Loading or unloading facility is of a size compatible with the standard loading rate of 10,000-12,000 m3 per hour, allowing LNG tankers to load or unload 125,000270,000 m3 within 12-18 hours, depending on the size of the ship (Dundoviæ et al., 2009; Faruque et al., 2009). BOG generated during loading and unloading of an LNG tanker is typically 8-10 times greater than tankage BOG (Benito, 2009). The reason is mainly the return of vapour from the ship’s or storage tanks. The main sources of BOG released during the ship loading/unloading process are presented in Table 3. LNG tanker is loaded by the terminal’s pumps and unloaded by the ship’s pumps. During the loading/unloading operations, large quantities of LNG are pumped from the ship in a short time. This causes rapid change of pressure. During the loading process, the loaded LNG displaces an equivalent quantity of vapour in the ship’s empty cargo tanks. In order to maintain the cargo tanks at their operating pressure, the displaced vapour from the ship’s cargo tanks is returned to the storage tank via the vapour return line. During the cargo unloading process, the vapour pressure of the boiloff gas generated during loading and unloading is of short duration at the high flow rate usually taking 1218 hours, depending on the t e r m i n a l ’ s loading/unloading capacity. This flow rate depends on the pressure and temperature differences between the ship’s tanks and storage tanks. LNG tanker cargo tanks are maintained by returning vapour from the storage tanks (displaced by the terminal’s blowers) to fill the ullage space in tanks. With this balanced system, u n d e r n o r m a l circumstances no BOG will be released to the atmosphere from ship or shore. The energy used by the terminal’s and ship’s pumps greatly influences the boil-off rate. A typical LNG tanker having the capacity of 130,000 m3 requires over 3,000 kW of pumping energy.

Community

2016 February, SweetcrudeReports

NNPC, ExxonMobil spend N4bn on undergraduate scholarship KUNLE KALEJAYE

ver N4 billion has been spent b y t h e N i g e r i a n N a t i o n a l P e t r o l e u m Corporation/Mobil Producing Nigeria joint venture, NNPC/MPN JV, on undergraduate scholarship to Nigerian students, according to ExxonMobil, the parent company of Mobil Producing and operator of the NNPC/MPN JV. The company said in a release that 50 per cent of this amount or N2 billion went to students from Akwa Ibom State. The company also said it has, in the last four years, committed over N57 million to the NNPC/MPN JV secondary school scholarship, targeting indigent students from Akwa Ibom State. According to John Arkely, General Manager, Joint Venture Operations at Mobil Producing Nigeria, ExxonMobil has a long history of partnership with the government and people of Akwa Ibom State in the area of education. Arkely, who spoke of a recent launch of the ExxonMobil Academic Excellence Reward Programme for public primary schools in Akwa Ibom State, said it is aimed at supporting and encouraging academic pursuit by children in government-owned primary schools by identifying those who are performing well and rewarding them.

L-R: Mayen William, Head Teacher, Government Primary School, Idong Iniang, Eket LGA; Mike Attah, Joint Venture Operations Maintenance Manager, Mobil Producing Nigeria; His Majesty, Edidem Abia, Paramount Ruler of Eket LGA and Udeme Udofia, Senior Special Assistant to the Governor of Akwa Ibom State on Education Monitoring during the launch of ExxonMobil Academic Excellence Reward Programme for public primary schools in Akwa Ibom State.

Through this initiative, ExxonMobil has provided school bags with mathematical sets, pencil pouches, water bottles and exercise books to the best 10 academically performing pupils in each class from primary one to six across 85 schools. The selection was transparently done in

conjunction with the State Ministry of Education and Akwa Ibom State Universal Basic Education Board. According to Arkely, “no fewer than 5,100 pupils selected from the 85 public primary schools of the four catchment local government areas of ExxonMobil’s operation Eket, Ibeno, Esit Eket and

Onna - benefited from the scheme”. Arkely said that the “programme is aimed at supporting and encouraging excellence in public primary schools by identifying high performers, recognising and encouraging the achievers." Other achievements of ExxonMobil in the area of education include over N1 billion spent on provision of

NNPC/EEPNL (EEPNL is Esso Exploration and Production Nigeria Limited – an ExxonMobil subsidiary company) international postgraduate scholarship to Nigerian students in the last two d e c a d e s ; 5 0 0 undergraduate scholarship yearly, over 8000 benefitted in the last 2 decades.

Navy uncovers illegal refinery at Macobar jetty in Port Harcourt

he Nigerian Navy says its personnel have uncovered an illegal oil bunkering site located at a ship building yard in Macobar jetty in Port Harcourt metropolis. The Commanding Officer of the NNS Pathfinder, Commodore Sanusi Ibrahim, said one person was arrested at the site which was discovered following a tip-off by a concerned

citizen. Ibrahim, speaking through the base operating officer, Lt. Commander Sunday BabaHaruna, said thousands of litres of illegally refined diesel and other petroleum products were discovered during the raid. “For us to ensure that everything is brought under control, we were able to carry out a thorough search of this yard and in that process we discovered almost seven different storage facilities

belonging to individuals who are at large. "For now, we are yet to pick them up. But we were able to pick one person who I believe when we came was sleeping and didn’t know that we there. While others ran away, we picked him. Presently, he is in our custody and we believe he is going to help us during our investigations to know those involved in these activities.”

He also said the illegal bunkering site, which is located close to Ibeto Cement Company, posed a big risk to the company and the residents of the area.

Illegal refinery

He said the Navy will take over the area to ensure that only those engaged in legal businesses operate there.

2016 February, SweetcrudeReports

Community

Oil spill clean up MKPOIKANA UDOMA

n internal battle for the control of the socio-cultural body, the Movement for the Survival of Ogoni People, MOSOP, has torn the Ogoni community in Rivers State apart, ahead of the expected commencement of the Federal Governmentsupervised $1 billion Ogoni remediation project recommended by the United Nation Environmental Protection Report, UNEP, to restore the environment of the community from the spoilage of oil spills and other negative effects of oil operations in the area. The crisis rocking MOSOP took a new turn recently with the swearing in of one Chief Mike-Lube Nwidobie as its president by the head of the Ogoni Supreme Council of Traditional Rulers, His Royal Highness Godwin Gininwa. Nwidobie, who was second runners-up in the December 30 MOSOP election which saw the re-election of Mr. Legborsi Saro Pyagbara as the president of the group, has since the election continued to lay claims to the office, claiming the election was marred by irregularities and that he was the authentic winner of the election. The battle for the soul of the socio-cultural group, SweetcrudeReports learnt,

$1bn remediation fund tears Ogoni apart is not unconnected with the control of the remediation project and whatever will come to the community from the $1 billion fund. Indeed, oil industry sources said all appears set for the commenceent of the project as the Federal Government would likely set up the governing board for Ogoni Restoration Fund soon, which

will effectively kick-start the project. In his acceptance speech during the swearing-in ceremony conducted by the head of the Ogoni Supreme Council of Traditional Rulers, Chief Nwidobie said he would be "tirelessly committed to the advancement of the course of the Ogoni nation".

But in a swift reaction, the MOSOP led by Legborsi Pyagbara warned all Ogoni against being deceived by the purported swearing-in of Nwidobie by those it described as "a perfidious gang of anti-Ogoni elements," saying the exercise "is absolute nullity". A statement by the Publicity Secretary of MOSOP, Mr.

Fegalo Nsuke, re-stated that "Mike Lube-Nwidobie participated in the December 30, 2015 poll that produced the authentic president of MOSOP, Legborsi Saro Pyagbara, and lost", adding that as far as MOSOP was concerned, “swearing-in” is alien and unlawful as it is not backed by the MOSOP constitution, hence it has never been practised in the organisation".

Akwa-Ibom seeks completion of its tenure in NDDC

bibio ethnic nationality group in Akwa Ibom State has urged President Muhammadu Buhari to appoint an indigene of the state as substantive Managing Director of the Niger Delta Development Commission, NDDC. The apex Ibibio sociocultural group, Mboho Mkparawa Ibibio, argued that the erstwhile Managing Director of the Commission, Barr. Bassey Dan-Abia, spent only two years from his four-year tenure before he was sacked.

The leadership of the group noted that the Act, which set up the NDDC, stipulated that every appointed leadership of the commission would hold office for a tenure of four years, which could be renewed, if necessary. In an appeal letter to President Buhari, the International President of the group, Mr. Monday Etuk-Akpan, and the Secretary, Mr. James Edet, noted that while the president holds the authority to appoint any individual to manage government MDAs,

indigenes from the oilproducing states, which include Abia, Akwa Ibom, Bayelsa, Delta, Edo, Imo, Ondo, and Rivers were legally recognised as being board members to pilot affairs of NDDC. “We hasten to state here that we are not particular about the person of Barr. Bassey Dan-Abia, as we may never know the reasons behind his replacement before completing the four year term for Akwa Ibom State, but we however insist that his replacement should have been an indigene of

Akwa Ibom State to allow the state run its fair and due tenure of four years in keeping with the extant law guiding the establishment and operations of the NDDC which had not been amended". The group emphasised the need for the president to permit an indigene of the state to complete the outstanding two year tenure as it is the due process stands.

2016 February, SweetcrudeReports

Community

Community tackles Amni International over alleged neglect MKPOIKANA UDOMA

astern Obolo, a n I j a w community in Akwa Ibom State, is host to six major oil companies in the country - ExxonMobil; Total E & P; Shell Petroleum Development Company, SPDC; Amni International Petroleum Development Company; Conoil and Addax Petroleum. The community allegedly contributes about 22 percent of the 40 percent contribution of Akwa Ibom State to the nation's overall 2.2 million barrels per day oil production. This contribution comes from 57 oil wells, including Utapette field operated by SPDC. Eastern Obolo is also the host to ExxonMobil's Oso condensates field, though located offshore as well as Okoro field located on OML 112, operated by Amni International. Despite the presence of these oil companies in Eastern Obolo, our correspondent who visited the area, reports that since the creation of the local government council in 1996, it is devoid of basic infrastructure while poverty ravages the area on a large scale. Narrating the predicament of the community to SweetcrudeReports, the head of the Eastern Obolo Council of Chiefs, Chief Job J. Job, lamented that "the evils the community has experienced from oil business are far more than the blessings thereof." According to him, “Our hopes on the oil companies operating within Eastern Obolo waters have been dashed and our people are completely ignored, alienated, neglected and cut off from sustainable development. Thus, we are demanding a change of status quo and a shift in paradigm. R ecent ly , A m ni International has come under the attack of the community for alleged neglect of its area of operation. “Eastern Obolo is host to

Niger Delta community

the Okoro and Situ oil fields OML 112 - belonging to Amni International Petroleum, less than 12 kilometres offshore Eastern Obolo. Amni has a current plateau production rate of 35,000 barrels per day, with a total of 7.5 million barrels per annum production, excluding 26 million standard cubic feet of

gas per day," Chief Job said. He added: “The relationship between Amni International and Eastern Obolo has grown sour and degenerated into refusal by the company to accept and work with the new CRC (Community Relations Committee) constituted inline with the MOU

( M e m o r a n d u m o f Understanding) they entered into with us "Amni refused to review the said MOU that had expired six years ago; they also refused to comply with the provision of the Local Content Bill 2010, which says 40 percent skilled and 60 percent unskilled workers to be taken

from host community "Now they are embarking on Okoro field further development project without consultation with the host community (Eastern Obolo) in accordance with the provisions of EIA Act 1992 and the oil and gas international guidelines.”

Seven Energy joins Security and Human Rights initiative

even Energy International Limited has joined the globally acclaimed ‘Voluntary Principles on Security and Human Rights’ initiative. The company was admitted into the Corporate Pillar category and becomes the first indigenous firm in the Nigerian oil and gas industry to be accorded such recognition. The Voluntary Principles Initiative is a multi-

stakeholder initiative involving governments, companies, and nongovernmental organisations that promote implementation of a set of principles that guide oil, gas and mining companies on providing security for their operations in a manner that respects human rights. Specifically, the Voluntary Principles guide companies in conducting a

comprehensive human rights risk assessment in their engagement with public and private security providers to ensure human rights are respected in the protection of company’s facilities and premises. Commenting on the achievement, Phillip Ihenacho, Chief Executive Officer, Seven Energy, said, “We are excited that the plenary has approved the application of Seven Energy

to join the prestigious Voluntary Principles Initiative after a rigorous selection process. "This recognition underscores how we have conducted our operations across our host communities in a manner that promotes public safety and respect for the rights of the people".

2016 February, SweetcrudeReports

Community

JTF in the creeks

JTF to hold community leaders responsible for oil facilities vandalism

ollowing the r e c e n t resumption of hostility in the Niger Delta by suspected ex-militants, the Joint Military Taskforce, JTF, Operation Pulo Shield in the Delta region has warned that henceforth, community leaders would be held responsible for any attack on the country’s oil and gas facilities in their domains. The JTF Commander, Major General Alani Okunlola, gave the warning while inspecting the site of the gas pipeline explosion at Egwa in Warri South-West Local Government Area of Delta State, belonging to the Nigeria Gas Company, NGC. He warned in a statement that “henceforth, extant laws banning the use of outboard engines with 200 horsepower and above would be enforced in the region.”

The JTF Commander said the warning was coming as a result of the recent multiple attacks on oil facilities and

platforms by suspected militants in the Niger Delta. The statement which described the acts as

economic sabotage, assured that the JTF would apprehend the perpetrators, and advised those involved in

such criminal act to desist from further destruction of the nation’s oil and gas facilities.

IYC blames govt for renewed attacks on oil facilities

he Ijaw Youth Council, IYC, has blamed the Federal Government for the resurgence of attacks on oil installations in the Niger Delta by suspected militants. President of the IYC, Mr. Udengs Eradiri, said President Muhammadu Buhari's alleged selective anti-corruption war against perceived political opponents in the Niger Delta was responsible for the recent destruction of oil installations in Delta State by suspected militants.

Eradiri, who accused the APC-led Federal Government of witch-hunt and double standard in the fight against corruption, warned that resurgence of violence in the Niger Delta region has grave implications for the nation's ailing economy. The National Youth Council of Nigeria, NYCON, on its part, cautioned the government against waging war on exmilitants, saying going after them could create further instability in the region.

Vandalised pipeline Chairman of NYCON in Rivers State, Mr. Sokubo Sara-Igbe, recalled that the military had two weeks ago invaded the homes of two former Niger Delta agitators in Bua-yeghe, Gokana Local

Government of the state, including Mr. Solomon Ndigbara, arrested his wife, siblings and destroying his properties.

Community

2016 February, SweetcrudeReports

E-mail: johniyene@yahoo.com

An energy policy for the future

Road project

Why we committed N1bn to East-West road repairs —Intels MKPOIKANA UDOMA

l e a d i n g l o g i s t i c s s e r v i c e s provider in the oil and gas industry in Nigeria, Integrated Logistic Services Nigeria Limited, popularly known as Intels, has stated that its contribution of N1 billion to the rehabilitation of the Eleme-Onne portion of the East-West Road was in furtherance of its robust c o r p o r a t e s o c i a l responsibility policy. Intels had in July 2015 pledged to contribute N1 billion out of the N3 billion needed for the rehabilitation of the 5-kilometre dilapidated portion of the East-West federal high way, in a move initiated by the Rivers State government. In a statement made available to newsmen in Port Harcourt, the management of Intels asserted that it has consistently identified with projects and activities which have positive impact on the

Intels had in July 2015 pledged to contribute N1 billion out of the N3 billion needed for the rehabilitation of the 5kilometre dilapidated portion of the East-West federal high way, in a move initiated by the Rivers State government development and welfare of the host communities in its area of operations. Such projects, it said, include road construction, building of market stalls, town halls, civic centre, borehole, mobile medical scheme, grant of scholarship up to university levels, skills acquisition programmes, and graduate trainee scheme, among others. The statement also revealed that between 2006 and 2015, Orlean Invest Group of which Intels is a major stakeholder, has spent a total of N12.4 billion on Corporate Social Responsibility. On the case of the Eleme-

Onne Road project, the logistics giant explained that the road leads to its major base at the Onne Oil and Gas Free Trade Zone, and is also the only road being used by its employees and clients,and that made it imperative for the management to identify with the rehabilitation project along with other contributors. The management expressed the hope that the project will be completed soon by the contractor, RCC, in line with the MoU signed for the project.

tephen Onyokia is a retired oil man; well not exactly, as he would always remind you. He was forced out of his job when he lost three fingers in an industrial accident. No insurance payments and no redundancy benefits: according to his employment contract he was engaged as a daily labour hand, only he had worked daily for the company for fifteen years. Stephen Onyokia is not bitter with his former employers. “I got what I bargained for,” he says with philosophical resignation. “This brings me to our discourse for this evening: our plight as a people in relation to the dwindling resources of our waterways and rivers.” The old man is so thin you could pick out his ribs in the poor lighting provided by the moon on the Brass beach, tall and of patrician bearing his nose is bulbous at the tip. He speaks with the rasp that is the product of alcohol and eighty five years of living off the river as its resources progressed towards extinction. His story this evening is a popular one in Brass. The oil majors came and were welcomed without any caution or thoughts for the future. Indeed it was they who decided on the need to implement some safety measures in order not to waste the operational environment. As you know, no industrialist would introduce a set of rules that undermines his operations or profit, so the rules were inchoate and insufficient, with the devastating effect on animal and plant life in our creeks, rivers and waterways. We allowed ourselves to be manipulated into this situation. The folks who negotiated the contracts with the oil majors were Nigerians whose communities would never be impacted by negligent oil and gas operations. So where were we the primary beneficiaries and sufferers of the operations? What did I do when for fifteen years an employer kept me as a daily labour hand contrary to our country’s laws? The story of Stephen Onyokia’s exploitation and the despoliation of the Niger Delta Region by the federal government and the oil majors are applicable to Nigeria as a country. Nigeria is an oil producing country of repute supplying oil and gas to Europe, the Americas and Asia. It belongs to OPEC, a cartel of oil and gas producing countries that, as at the end of 2013, controlled 1,206 Billion Barrels or 81% of the world’s total oil supply. Fossil fuels are non-renewable and the civilised world is engaged in frenetic research efforts to develop renewable and alternative sources of energy. Nigeria’s oil and gas authorities have failed to develop a strategy for the sustenance of the country’s energy needs when fossil fuels dry up or when they would become unprofitable and unreasonable to invest in. Take this scenario; presently a litre of PMS sells for between £1.14 and £1.15 in the United Kingdom, approximately NGN328.9 but sells for NGN97.00 in Nigeria. Nigeria has depleted its onshore resources and is now exploiting its offshore and deep sea resources. Nigeria’s NNPC, its oil and gas interface with the world currently costs Nigeria more than a half of the profits realised from oil and gas operations. What structures are we putting in place to be abreast with a world that is pricing fossil fuels optimally within given borders in preparing financially for the inevitable switch to alternatives? Can we sustain this regime of pricing that appears to benefit the masses but actually benefits only marketing companies and criminal elements in the bureaucracy. Are there policies being put in place to reduce the shock on the economy when Nigerians become only buyers of energy products? Is the country prepared technologically for a change in energy types, units and systems. The march towards change in technology or the general evolution of human society does not indulge the indolent; in fact history tells us that it feeds on the indolent. The world knew ships that were powered by oars, then wind (in well constructed sails), then steam, then coal and now fossil fuels. The change from fossil fuels to the next energy source is as inevitable as the progression of time. Nigerians therefore have choices; we can choose to be tossed out in the energy scheme as by an irresponsible company in denial did to Stephen Onyokia or to be dried out of resources like the creeks, rivers and waterways of the Niger Delta, while the North Sea, where oil and gas operations first started is flourishing with salmon and other aquatic life. We can also choose the path of prudence and honour by putting our heads down to plan our transition from energy producers of a kind to energy producers of another kind or at least to energy procurers, prepared and Able.

2016 February, SweetcrudeReports