Sweetcrude june 2016 by Sweetcrude reports

Q1 2016: Nigeria's oil trade down N716.7bn - NBSP/08

At last, the realities of appropriation P/47

A Review Of The Nigerian Energy Industry June, 2016

VOL 02 N0. 37

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NCIF bags US Congressional Citation, Houston City Proclamation

Militants

he Nigeria Content Investment Forum, NCIF, an initiative of SweetcrudeReports and the Nigerian Content Development and Management Board, NCDMB, has bagged a United States of America Congressional citation for its efforts to promote business collaboration between entities in SubSaharan Africa and the USA. Similarly, the NCIF received a Proclamation from the Mayor of Houston declaring May 2, 2016 the 'Nigeria Content Investment Forum Day' and commending organisers of the event for their untiring efforts at promoting business collaboration between the city-based original equipment manufacturers, OEMs, and Nigeria-based small and medium

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Oil facility

Nigeria:

Economy takes a hit as militants wreck havoc on oil installations 2016 Budget in dire straits Oil exports may drop further NNPC loses billions

2016 June, SweetcrudeReports

Minister of State for Petroleum Resources, Dr. Ibe Kachikwu (left), with Perry John Calderwood, Canadian High Commissioner to Nigeria during a meeting at the NNPC Towers, Abuja ...Some Canadian Companies are willing to establish firm stakes in Nigeriaâ&#x20AC;&#x2122;s oil and gas industry.

Dr. Kachikwu with James Entwistle, the United States Ambassador to Nigeria during a meeting at the NNPC Tower, Abuja where the US endorsed the ongoing oil sector reforms in Nigeria.

Dr. Kachikwu listening to a presentation by Mr. Uwe Beckmeyer, Vice Minister for Economic Affairs and Energy and member of the German Parliament during a meeting at the NNPC Towers in Abuja, where Germany signified interest in Nigeriaâ&#x20AC;&#x2122;s liquefied natural gas.

Covenant with

Change

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Cover Story

2016 June, SweetcrudeReports

Nigeria:

Economy takes a hit as militants wreck havoc on oil installations 2016 Budget in dire straits Oil exports may drop further NNPC loses billions

Niger Delta militants CHUKS ISIWU & OSCARLINE ONWUEMENYI

ension has boiled over yet again in Nigeria's Niger Delta region as militants returned to the creeks from where they h a v e la u n ch ed fe r o ci ou s attacks on the country's oil and gas installations. The renewed attacks are coming after years of relative peace in the region following the Amnesty programme introduced by the late President Umaru Musa Yar'Adua to disarm and rehabilitate the militants. The attacks have reportedly caused a 30 percent drop in national oil production, putting the country, its 2016 budget and the economy in dire straits. 2016 Budget in dire straits Indeed, President Muhammadu Buhari and his economic team, in producing the 2016 budget late last year,

may only have reckoned with the debilitating effect low crude oil prices would have on the N6.06 trillion budget. They obviously did not anticipate a renewal of attacks by militants, a cut in national oil production resulting from this development and their overall effect on the budget. The 2016 budget, which projected oil-related income at N820 billion, was predicated on crude oil benchmark price of $38 per barrel and a production estimate of 2.2 million barrels per day. Oil prices may have gradually risen above the projected benchmark price, but, the militant attacks in the Niger Delta have ensured the budget, with its inbuilt N2.2 trillion deficit, remains under threat. Unabated attacks In the latest attack on June 10, the new militant group, N i g e r D e l t a Av e n g e r s ,

reportedly bombed yet another crude oil pipeline belonging to Agip, the Nigerian subsidiary of Italy’s Eni, even as the national economy appears to be in a free-fall, occasioned by the unmitigated attacks on the oil and gas facilities. The militant group, which has adopted ingenious and daring ways of communicating its exploits, noted in a tweet on its twitter handle @NDAvengers, that at “3:am on Friday @ NDAvengers blew up the Obi Obi Brass Trunkline belonging to Agip ENI. It is Agip’s major crude oil line in Bayelsa State.” While the attacks continue unabated, the Nigerian military is seemingly stumped on how to deal with the problem. In the meantime, Nigeria’s crude oil export has continued to drop. About 700,000 barrels per day of oil has been lost to recent sabotage by the militants. Besides the volume lost to the recent

bombings by the militants, it is estimated that a further 130,000 b/d is lost as the TransNiger Pipeline, TNP, operated by Shell Nigeria, reportedly shut down after a leak was discovered. At $50/barrel, the country is losing $6.5 million per day in revenue or $45.5 million per week. "A back-of-envelope calculation highlights the scale of the resulting crisis in public (Nigerian) finances. Strip out the approximately 700,000 barrels per day of oil lost to recent sabotage, all of it from onshore joint ventures where the state reaps a much higher proportion of earnings than from offshore production contracts in which oil companies gain the greater rewards. “Then factor in the amount of crude oil that Nigeria uses to secure swaps for fuel imports to meet domestic demand because its own refineries are

b a r e l y f u n c t i o n i n g. T h e combined losses suggest the Nigerian state, which depends on oil typically for around twothirds of revenues, is operating with a quarter or less of what it had two years ago," William Wallis, an FT analyst, said of Nigeria's troubled economy. Oil exports may drop further There are also indications that Nigeria’s crude oil export may drop further in the wake of the renewed attacks on the oil infrastructure as major refineries across the globe have begun to stop the purchase of crude oil from Nigeria due to fears about the country meeting up with deliveries. So, on top of everything else, the price Nigeria commands for its oil has also been hit. Industry watchers say this is

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2016 June, SweetcrudeReports

Militants

Economy takes a hit as militants wreck havoc on oil installations CONTINUED FROM PAGE 4 due to the fact that some oil companies operating in Nigeria had declared force majeure of crude oil export, while a few others had been forced to suspend or cut production as a result of the bombing of oil facilities in the Niger Delta. Data obtained from Reuters indicated that four of Nigeria’s oil grades, including the largest stream, Qua Iboe, have been under force majeure over the last one month. The report stated that despite the fact that ExxonMobil, which declared force majeure on Qua Iboe in May due to an accident, lifted the declaration recently, the unpredictability is too much for some buyers. Pertamina, others abandon Nigeria's crude The report further stated that refineries on the United States’ east coast were beginning to turn away from Nigerian crude oil; and these same refineries

had been on a buying spree for Nigerian crude in recent months that averaged 240,000 barrels per day, b/d, in April and May. Resulting from all these, the report revealed that differentials to dated Brent for Qua Iboe, Bonny Light, and other grades were under downward pressure, adding that there were several unsold cargoes for June loading. According to the report, India’s HPCL was forced last month to cancel a vessel it chartered to carry two million barrels of West African crude due to the Qua Iboe force majeure, while India’s staterun Indian Oil Corporation Limited, a major buyer of Nigerian grades over the past year, had stated in its recent tenders that it would not take grades under force majeure, with Qua Iboe remaining off the list. I n d o n e s i a ’s P e r t a m i n a , another frequent buyer, had also chosen not to buy Nigerian grades in its recent

tenders, favouring Congo's Coco, Angola's Girassol and Saharan Blend from Algeria instead. The report quoted oil traders as saying that Pertamina had shifted its preferences since the violence and uncertainty escalated in Nigeria. A ll these po rt end d ire consequences for the Nigerian economy, especially as it concerns this year's budget and the ability of government to deliver on its promises. NNPC loses billions as output drops The Nigerian National Petroleum Corporation, NNPC, disclosed that it lost more than N19.43 billion in the month of April, as the country’s crude oil production dropped from 59.27 million barrels recorded in February to 57.43 million barrels in March, due to "growing acts of pipeline vandalism in the Niger Delta region". The corporation, in its Monthly Financial Report

released in Abuja, also revealed that over 1,500 megawatts of electricity was cut off as a result of the destruction of oil and gas facilities, adding that the capacity utilisation of the Wa r r i R e f i n i n g a n d Petrochemical Company plummeted from 25.65 percent in March to 6.36 percent in April. “ T h e N N P C ’s m o n t h l y financial and operations report indicate an operational loss of 19.43 billion in April 2016 as against 18.89 billion in the month of March 2016. The deficit increased by 2.83 per cent in the month of April 2016 due to a slight decline in revenue generation, which is attributed to the decrease in petroleum product sales by 7.11 per cent. “The NPDC’s crude sale for the month is still hampered by Forcados pipeline vandalism, which continued to deny the NPDC of monthly crude oil revenue of about N20.0 billion,” the report stated.

Niger Delta crisis spikes prices NNPC noted the effect of the Niger Delta crisis on the international oil market, explaining that global crude oil spot prices increased by $3.41 per barrel in April to a monthly average of $40.75 per barrel, up from $37.34 in March and down from $57.54 in April 2015. This represented an increase of 9.13 percent from March 2016 and -29.18 per cent from April 2015. According to NNPC, the increase in the crude oil spot prices by $3.41 per barrel in April this year to a monthly average of $40.75 per barrel was the highest monthly average so far this year. “Nigerian crude oil production for the month of March 2016 stood at 57.43 million barrels, which is 3.1 percent lower than February 2016 production, and so far, the lowest recorded in the 12month review period. The recent upsurge in vandalism

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2016 June, SweetcrudeReports

Economy takes a hit as militants wreck havoc on oil installations

Pipeline bombed by militants CONTINUED FROM PAGE 5 has negatively impacted on the Nigerian crude oil production output, losing its African top crude oil producer spot to Angola. “About 380,000 barrels per day remained shut-in due to vandalism of the 48-inch subsea export line on 15th of February, 2016. Hence, all March cargoes were deferred until the repair is completed. “Also, the nation has lost over 1,500MW of power supply to the damage as gas supply from Forcados, which is Nigeria’s major artery, accounting for 40 to 50 percent of gas production. Incessant pipeline vandalism poses the greatest threat to the industry,” the report stated. New militant group vows more damage, violence In the midst of all these, a new militant group, the Ultimate Warriors of Niger Delta, has surfaced, vowing more damage and violence against oil and gas installations unless the Nigerian government relinquishes 60 percent of oil and gas revenues to the people native to the Niger Delta region. In a statement signed by its spokesperson, Brig. Sibiri Taiowoh and made available to reporters on June 8, the group

said failure to meet their demands within two weeks will see the continuous attack on oil installations in the Niger Delta region. The militants are also demanding for the completion of the Federal Maritime University which was established by former President Goodluck Jonathan as well as the contract to secure oil pipelines in the region. It stated, “We want to be the ones to be safeguarding oil pipelines in our area so as to create more jobs for our people. We would resist any attempt to give surveillance contracts of pipelines in our backyard to foreigners. We want the pipeline jobs to be given to our indigenous people. “We also want 60 percent of the oil blocs to be allocated to the Niger Deltans just as the Federal Government has also allocated 80 percent to those who are not from the oil producing areas and just as 50 percent of the resource was used to develop the non-oil areas when we were producing cocoa and groundnut as main economic resources, the same 50 percent should be used to develop the Niger Delta region because we are the ones suffering the brunt of oil pollution and degradation in the region.

NCIF bags US Congressional Citation, Houston City Proclamation CONTINUED FROM PAGE 1 enterprises, SMEs. Organised annually, the NCIF held its second edition on Monday, May 2, 2016, at the prestigious Houstonian Hotel in Houston, Texas, which attracted several players in the Nigerian oil and gas industry, including SMEs and OEMs from the United States and globally. Making the presentation, the US Representative for Texas’s 18th Congressional District, Sheila Jackson Lee, said the NCIF provides a platform to network and collaborate in areas that need to be strengthened and developed in order to address investment opportunities in Nigeria’s oil and gas industry now and in the future. She said,“The NCIF was created to serve as a platform to bring Nigerian

oil and gas SMEs who have manufacturing pedigree together with international original equipment manufacturers of components, including but not limited to upstream development, upstream operations and logistics, downstream and mainstream. “The forum will stimulate collaboration between Nigerian SMEs and OEMs towards local manufacture of key inputs of oil and gas production, transportation, and distribution. We believe everyone must be a part of and could benefit tremendously from the continued development and prosperity of Nigeria.” She noted that that countries like Nigeria are blessed with hydrocarbon reserves but has an uphill task utilising their resources as a catalyst for the growth and development of their

economy. The Mayo? r of Houston, Sylvester Turner said oil and gas trade between Nigeria and Houston is a success story because of their close ties between the two, explaining that the existing close ties between Nigeria and Houston has made many oil companies operating in Houston to open office branches or have associates in Nigeria. "330 Houston companies have businesses and trade connection with Nigeria", Turner said noting that Houston ranks as Nigeria largest US gate way for international trade ? and for greater partnership. To further strengthen Houston/Nigeria oil and gas trade, the Houston Mayor said in 2011, United Airlines opened a direct flight in Nigeria from Houston to Lagos, linking two major energy cities.

Oil

2016 June, SweetcrudeReports

Nigerdock delivers Ofon 2 topsides, first fabricated structures for Egina FPSO

The fabricated structures for the Egina FPSO project CHUKS ISIWU

igerdock has successfully c o m p l e t e d fabrication and sail away of the topsides for multinational oil company, Total's Ofon 2 project, a facility that would be deployed for the Ofon 2 project expected to add 40,000 barrels per day, bpd, of oil to Total and Nigeria's output. The company has also completed and loaded out the Flare Tower for the Egina Floating Production Storage and Offloading, FPSO, Project for Total. The FPSO is being developed for deployment in the Egina oil field, located 150 kilometres off the coast of Nigeria. Both the Egina and Ofon 2 projects are currently under development. For Egina, production is scheduled to begin in 2018. Nigerdock was selected by Samsung/Total for critical incountry fabrication works and training services as the provider of choice. The flare tower structure, weighing 732 tonnes, was completed on time, loaded out and sailed away on March 24,

this year, the company said. It is one of a number of structures fabricated by Nigerdock at its fabrication yard on Snake Island Integrated Free Zone for Samsung Heavy Industries for the Egina FPSO project. The remaining works will continue through to the first quarter of 2017 as contracted. According to Emeka Uhara, the P r o j e c t M a n a g e r, “ T h e fabrication for Egina was a big success being delivered on time and budget and to word class s p e c i f i c a t i o n s . We h a v e expended over 1.7 million man hours on the project, and it has helped generate employment for hundreds of Nigerians while also creating the opportunity for the provision of thousands of manhours of specialised training.” The topsides for the Ofon 2 project were also fabricated at the Snake Island Integrated Free Zone in Lagos and are the first full Engineering, Procurement, and Construction, EPC, project to be undertaken by an indigenous Nigerian contractor. Speaking at the event to mark the load-out of the topsides on June 8 at Snake Island, Mr. Esueme Dan Kikile, Director, Monitoring and Evaluation,

Nigerian Content Development and Management Board, NCDMB, said their successful fabrication by Nigerdock incountry was a boost to the Nigerian Content policy aimed at domesticating more oil and gas activities in Nigeria. "This event marks yet another milestone in the Nigerian oil and Gas industry. It is yet another incontrovertible proof that local capacity and capability can be utilised to deliver key projects. "I am particularly excited because the Ofon 2 project is the first full EPC project to be undertaken by an indigenous Nigerian contractor. "With the successful completion of this project, I am indeed convinced that Nigerdock and other Nigerian fabrication yards have what it takes to take up similar projects even those that are much larger than this," Kikile said. Referring to the achievement as a direct result of the enactment and implementation of the Nigerian Oil and Gas Industry Content Development Act of 2010 and the overwhelming support that the government has given and has continued to give to the development of Local Content in the oil and gas industry.

Bonga spill: Shell faults govt over legal action

he Shell Nigeria Exploration and Production Company, SNEPCo, has reiterated that the 2011 Bonga oil spill which allegedly affected 285,000 people in 350 communities in Delta and Bayelsa states was effectively contained and cleaned up. Recall that the Federal Government recently initiated a legal action against S NEPCo over the December 20, 2011 spill. The legal action, filed before a Federal High Court in Abuja, has the consent of President Muhammadu Buhari, the Attorney General of the Federation, A. A. Malami SAN, and the National Oil Spill Detection and Response Agency, NOSDRA. It is demanding a N1.3 trillion compensation from SNEPCo for the affected communities. But, a Shell spokesman, Mr. Joseph Obari, said: “We are aware of this suit and we will respond in accordance with our rights under the law. We reiterate that the Bonga spill was effectively contained and cleaned up as a result of efforts by SNEPCo, regulators and other industry resources from within and outside Nigeria coupled with the effects of natural dispersion and evaporation. “It is important to recall that, as SNEPCo’s work to clean up the Bonga oil spill offshore was coming to a successful end, a suspected third-party oil spill was observed approximately 100 kilometres away from the Bonga facility in areas close to Forcados shore. “Though this spill did not emanate from Bonga, SNEPCo took prompt action to assist with the dispersion and clean-up to minimise any adverse impact on the environment and communities.”

2016 June, SweetcrudeReports

Oil

Oil vessel

Q1 2016: Nigeria's oil trade down N716.7bn - NBS OSCARLINE ONWUEMENYI, Abuja

15, according to a new digeria's crude oil trade declined by N716.7 billion or 46.6% in the first quarter of this year against the level recorded in fourth quarter, 20ata released by the Nigerian Bureau of Statistics, NBS. The report stated that mainly because of this, Nigeria's overall exports during the first quarter recorded a steep decline, which brought the country’s trade balance down to N 184.1 billion, or N 548.7 billion less than in the preceding quarter. According to NBS, the structure of Nigeria’s export trade is still dominated by crude oil exports, with the contribution of crude oil to the value of total domestic export trade amounting to N821.9 billion or 64.7% (estimate figures). The total value of Nigeria’s merchandise trade at the end of Q1, 2016 stood at N2,723.9 billion. From the preceding quarter value of N 3,517.4 billion, this was N793.5billion or 22.6% less. This development arose due to a sharp decline in both

imports and exports, the NBS report indicated. Exports saw a decline of N671.1 billion or 34.6%, while imports declined by N122.4 billion or 7.8%. The value of the export trade, totaled N1,269.9 billion in Q1, 2016 showing a decrease of N671.1 billion or 34.6%, over the value recorded in the preceding quarter. Year-on-year analysis shows that the country’s exports dropped by N1,395.2 billion or 52.3% against the export value recorded in the corresponding quarter of 2015. Exports by section revealed that the highest export product for Nigeria in Q1, 2016 was “mineral products” which accounted for N1,054.1 billion or 83.0%. Other products that contributed the most to Nigeria’s exports include “vehicles, aircraft and parts thereof; vessels etc.” and “prepared foodstuffs; beverages, spir its and vinegar; tobacc o” whose values stood at N72.7 billion or 5.7%, and N 63.6 billion or 5.0% respectively, of the total exports from Nigeria for the quarter. Exports by continent showed

that Nigeria mainly exported goods to Europe and Asia, which accounted for N467.1 billion or 36.8% and N360.6 billion or 28.4% respectively, of the total export value for Q1, 2016. Furthermore, according to the report, Nigeria exported goods valued at N161.3 billion or 12.7% to the continent of Africa

while export to the ECOWAS region totaled N50.4 billion It added that Nigeria’s import trade stood at N1,454.0 billion, at the end of Q1, 2016. This was 7.8% less than the value recorded in the preceding quarter N 1,576.4 billion. Further comparison with the corresponding quarter of last year, showed a decrease of

N273.7 billion or 15.8%. The structure of Nigeria’s import trade according to SITC was dominated by the imports of “machinery and transport equipments”, “mineral fuel”, and “chemicals and related products”, which accounted for 34.7%, 17.4%, and 14.7% respectively in 2016, the report further stated.

Nigeria one of cheapest fuel markets in Africa - Govt

he Federal Government has stated that at the new pump price of N145 per litre, Nigeria remains one of the cheapest fuel markets in the world, even as said the estimated ‘true’ cost of PMS was valued to be N243.05 per litre. In a document obtained by our correspondent in Abuja, the government explained that before arriving at the new price regime, a Fuel dispenser compreh ensive study of the costs of importation was undertaken. It noted that “Even with the new price regime, Nigeria would remain one of the cheapest fuel markets in Africa and this could even be lower once competition takes effect”. According to the document, “The estimated ‘true’ cost of PMS was valued to be N243.05

per litre. This is factoring the estimated average time spent to obtain PMS at the official price (86.50NGN), the estimated hourly wage of the average Nigerian, the average price of PMS on the black market and the estimated average volume bought per visit to the filling stations and also factoring in the frequency Nigerians source PMS from the different markets.” The government noted that unavailability of forex and inability to open letter of credit has forced marketers to stop product importation and imposed over 90% supply on Nigerian National Petroleum Corporation, NNPC, since October 2015 in contrast to the past where NNPC supplies less than 48% of the national requirement. “The NNPC does not have the resources for and is not designed to meet this increase in supply resulted in the current fuel situation across the country. NNPC has continued to utilise crude oil volumes outside the 445,000 barrels/day thereby creating major funding and remittance gaps into the Federation account,” it stated.

Oil

2016 June, SweetcrudeReports

Shell, ExxonMobil most hit by Niger Delta attacks

Niger Delta militants

oyal Dutch Shell and Exxon Mobil Corporation a r e t h e international oil companies most exposed to violence in the Niger River delta that has cut Nigeria’s output and fueled a rally in global crude prices, according to Rystad Energy. Shell and Exxon have the most production in vulnerable parts of the oilrich region -- onshore or near the coast, Bloomberg quoted Per Magnus Nysveen, senior partner and head of analysis at the Oslo-based consultant, as saying. Shell is losing almost all of the 50,000 barrels a day it pumped in the delta last year, he said. That’s about a quarter of its output in the country. Exxon pumped 145,000 barrels a day last year - about half its Nigeria total - from shallow-water fields that could also be targeted, Nysveen said. The Niger Delta has been rocked by attacks since February that have cut Nigeria’s output to the lowest in almost three decades.

A previous outbreak of violence abated in 2009 after the then government offered pardons and monthly stipends to fighters willing to disarm. President Muhammadu Buhari has reduced those payments as part of an anticorruption drive, prompting militants, now calling themselves The Niger Delta Avengers, to retaliate. In February, Shell declared force majeure - a legal clause that allows it to stop shipments without breaching contracts -- after militants blew up a pipeline feeding the Forcados terminal, which typically exports about 200,000 barrels a day from multiple producers. Shell’s deep-water Bonga field hasn’t been affected by the attacks. “We continue to monitor the security situation in our operating areas in the Niger Delta and are taking all possible steps to ensure the safety of staff and contractors,” a Shell spokesman said by e-mail. “We do not wish to go into details. Our operations are

continuing.” Exxon’s Qua Iboe terminal, which handled 342,000 barrels a day last year, may also face disruptions because of its vulnerable onshore location or if fields that

supply it come under attack, Nysveen said. “There is a risk that these Avengers will now start to be more active,” in the shallow waters which is “a little outside the area where

they’re normally operating,” Nysveen said. “Production activities continue,” Exxon said by e-mail, adding that it has “plans in place to assure the security of our personnel and assets.”

Nigeria needs more than 2.4mpd oil output to grow economy - NAEE

he President of the Nigeria Association for Energy Economics, NAEE, Prof. Wumi Iledare, says Nigeria needs to boost its crude oil production to more than 2.4 million barrels per day, bpd, to stabilise and grow the economy. Iledare, who spoke during a pre-conference media briefing in Abuja, said the upcoming 9th NAEE/IAEE international conference holding next week in Abuja, would address how the country could ramp-up its crude oil production and how proceeds from it could be used to energise the economy. He said although the 2.4m bpd is not enough to sustain the economy, or even grow it, resource management is vital because studies have shown that emerging economies often experience economic degression when oil prices are good because they tend to Oil barrels

be lacking in capacity to manage the boom. Iledare, however, noted that, “2.4 million barrels per day of crude oil production is not enough to take this economy to where the government plans it to be.” He added that the situation has become more complex and difficult for the country with the current drop in crude oil prices, and that the country has shown less concern about using her oil resources to develop her economic capacities. Iledare explained that the purpose of the conference is to explore the energy supply options for energising emerging economies like Nigeria, adding that the low oil prices should not be viewed in bad light but as an opportunity to diversify the economy and do away with petroleum subsidy. The NAEE chief charged the federal government to take advantage of the opening that the current dip in prices of crude oil on the international market presents to deregulate the country’s downstream oil sector as well as effectively diversify Nigeria’s economy horizontally.

2016 June, SweetcrudeReports

Oil

Oil facility

Kachikwu invites multinationals, OEMS to set up plants in Nigeria

inister of State for Petroleum Resources and Group Managing Director of the Nigerian National Petroleum Corporation, NNPC, Dr. Ibe Kachikwu, has invited multinational companies and Original Equipment Companies, OEMs, from across the world to set up plants in Nigeria. Kachikwu spoke of a new thinking by the Federal Government at the second edition of the Nigeria Content Investment Forum, NCIF, in Houston, Texas in the United States, which attracted oil industry players, Small and Medium scale Enterprises, SMEs, from Nigeria and the OEMs from the United States and all over the world. “Our emphasis is no longer to generate revenue from petrochemical, power, energy and domestic home needs of our people. “I invite multinationals and OEMs to take advantage of this new thinking to set up hydrocarbon processing

plants in Nigeria,” the minister said. Speaking in a keynote address at the event, Kachikwu disclosed that the government is pushing forth the drive to harness its hydrocarbon resources for industrialisation. He noted that the Nigerian Content policy has shifted the focus of the oil and gas industry from the stance of ‘revenue of government’ towards in-country value addition through the domiciliation and utilisation of Nigerian goods, services and personnel in oil and gas activities”. According to him, in line with government’s drive towards diversification of the economy, it is focused on implementing initiatives that are aimed at creating mutually beneficial partnerships that will contribute towards the achievement of industrial growth and socio-economic wellbeing of Nigerians. He said: “In this trying time of falling crude price, the resilience of Local Content

policy is being put to test. However, I wish to assure our local service providers and prospective investors that the Federal Government remains

committed towards the implementation of the Local Content policy and will continue to provide the enabling environment

required to nurture businesses and investment towards creating a robust supply chain.”

Expert counsels govt on modular refineries

US-based financial expert has suggested that it would cost the Nigerian government between $100 to $350 million to construct a turnkey development model of modular refinery plants that would provide short term solution to fuel scarcity. President of Financialbridge International, Carol Abelleria, who stated this at the African Modular Refinery seminar in Lagos said several units of modular refineries with capacity of 6,000, 12,000 and 20,000 barrels per day could be funded and rapidly deployed in locations within the Niger Delta region as well as at sites along the 370 miles of Warri-

Modular refinery

Kaduna oil pipelines. She said the turnkey development model of modular refinery will take? 18 to over 36 months implementation schedule. In addition to constructing modular refineries to solve refined petroleum products scarcity, Abelleria said there was need for Nigeria to develop Public Private Partnership, PPP, between the Federal Government, State and Private sector in securing funds from US Export Financial Market and Private Equity Funds Managers to finance development of US-manufactured modular refinery projects in the country. Outlining the benefits of funding and developing modular refinery projects led by the private sector within the PPP, Abelleria said it would enable the Federal Government to optimise the economic value of its crude oil assets for sustained long-term economic growth. Other benefits, according her, include "state availability of refined petroleum products in Nigeria at an affordable price to Nigerian citizens and eliminating the costs of importation of refined products by the government.

2016 June, SweetcrudeReports

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2016 June, SweetcrudeReports

Oil

Vandalism: NNPC lost N19.4bn in April - Report Pays N56.22bn into Federation Account

Vandalised oil pipeline OSCARLINE ONWUEMENYI, Abuja

he Nigerian National P e t r o l e u m Corporation, NNPC, has disclosed that it lost more than N19.43 billion in the month of April, as the country’s crude oil production dropped from 59.27 million barrels recorded in February to 57.43 million barrels in March, due to growing acts of pipeline vandalism in the Niger Delta region. The NNPC also said it paid N56.22 billion into the Federation Account in April this year. The corporation stated this in its Monthly Financial Report

released in Abuja where it also revealed that over 1,500 megawatts of electricity were lost as a result of the destruction of oil and gas facilities, adding that the capacity utilisation of t h e Wa r r i R e f i n i n g a n d Petrochemical Company plummeted from 25.65 percent in March to 6.36 percent in April. “The NNPC’s monthly financial and operations report indicate an operational loss of 19.43bn in April 2016 as against 18.89bn in the month of March 2016. The deficit increased by 2.83 per cent in the month of April 2016 due to a slight decline in revenue generation, which is attributed to the decrease in

petroleum product sales by 7.11 per cent. “The NPDC’s crude sale for the month is still hampered by Forcados pipeline vandalism, which continued to deny the NPDC of monthly crude oil revenue of about 20.0bn,” the report stated. The corporation explained that global crude oil spot prices increased by $3.41 per barrel in April to a monthly average of $40.75 per barrel, up from $37.34 in March and down from $57.54 in April 2015. This represented an increase of 9.13 percent from March 2016 and -29.18 per cent from April 2015, adding that the increase in

Why 18 refineries licensed by govt in 2002 failed - DPR

he Department of Petroleum Resources, DPR, says the 18 private refineries granted license by the Federal Government in 2002 failed to materialise due mainly to financing issues. Director of DPR, Mr. Modecai Danteni Baba Ladan, who stated this at the African Modular Refinery seminar in Lagos, explained that the financial options available at the time the 18 refineries were granted licenses were not attractive. According to him, they were strict and inflexible options. "Why did the licensed modular refineries fail? The financial options available were strict and not flexible," he said. Ladan, who was represented at the seminar by the Head Engineering and Standard of the agency,

Mr. Adeleke Olumide, ? stated that flexible and low interest financing options were key ingredients for the establishment of modular refineries. The DPR boss, therefore, called for more flexible and low interest rate financing options for the successful set up of modular refineries in the country. Refinery

the crude oil spot prices by $3.41 per barrel in April this year to a monthly average of $40.75 per barrel was the highest monthly average so far this year. According to the report, “Nigerian crude oil production for the month of March 2016 stood at 57.43 million barrels, which is 3.1 percent lower than February 2016 production, and so far, the lowest recorded in the 12-month review period. The recent upsurge in vandalism has negatively impacted on the Nigerian crude oil production output, losing its African top crude oil producer to Angola. “About 380,000barrels per day remained shut-in due to vandalism of the 48-inch subsea export line on 15th of February, 2016. Hence, all March cargoes were deferred until the repair is completed. "Also, the nation has lost over 1,500MW of power supply to the damage as gas supply from Forcados, which is Nigeria’s major artery, accounts for 40 to 50 percent of gas production. Incessant pipeline vandalism poses the greatest threat to the industry.” The NNPC, however, noted that its leadership was already diligently addressing the corporation’s key business and operational challenges. “For the first time, the NNPC was able to get the buy-in of the upstream companies operating in Nigeria to enhance the domestic supply of refined

petroleum products by indicating readiness to make available additional funding to support import of products,” it said. F u r t h e r mo r e , t h e N N P C disclosed that it paid N56.22 billion into the Federation Account in April this year. According to the report, “NNPC transferred N56.22 billion to the Federation Account for the month of April being proceeds from a local sale of petroleum products. “Thus, the sum of N933.12 billion has been paid to the Federation Account Allocation Committee (FAAC) from March 2015 to April 2016,” the News Agency of Nigeria (NAN) quoted the corporation as saying in the report. On crude oil sale for the month under review, it said that NNPC recorded export sale of 289.36 million dollars, adding that the sales were made in March, while the collection was made in April this year. It added that despite the export sales, NNPC did not make any dollar remittance to the Federation Account in April. It said crude oil export sales during the period amounted to 191.30 million dollars or 66.11 percent of the dollar transactions compared with 57.79 percent contribution in the previous month. It added that export gas sales were 71.81 million dollars during the period.

Oil

2016 June, SweetcrudeReports

Nigeria’s House of Representatives

Fuel price hike: Passage of PIB now urgent – Reps …Blame FG for delay in passage of bill OSCARLINE ONWUEMENYI, Abuja

he House of Representatives has said passage of the Petroleum Industry Bill, PIB, has become more urgent in light of the recent removal of the subsidy on petroleum products, even as it blamed the executive arm of government for the delay in the passage of the bill through its failure to transmit the document to the National Assembly. Chairman, House Committee on Media and Public Affairs, Abdulrasak Namdas, disclosed this in Abuja, saying since the government’s version of the PIB was not forthcoming, the House would look into the bill from a fresh perspective. Praising the Federal Government’s decision on petrol pricing, he said the development would stop the spate of diversion of petroleum products to

neighbouring countries. He added that, “Subsidy in my opinion is funding the rich, therefore l will appeal to the government to come up with some form of palliatives.” He said the palliative measures in the 2016 Appropriations Act would help to cushion the effects of downstream oil sector liberalisation. According to him, rather than have subsidy, “market forces should be allowed to influence price. Based on this premise, the House Committee will continue to engage labour.” In a similar vein, Minority Leader of the House, Hon. Leo Ogor said with the subsidy removal, the PIB will promote transparency in the oil sector. Ogor who spoke with reporters noted that the passage of the PIB by the National Assembly will enhance transparency in the oil sector.

According to him, with the decision to remove petrol s u b s i d y, t h e N a t i o n a l Assembly would need to consult extensively in the new PIB. He regretted that the House of Representatives is yet to

receive the PIB, adding that what is currently before the House is a bill seeking the administrative restructuring of the Nigerian National Petroleum Corporation, NNPC. He said, “There is no way

PIB would have solved the issue of fuel imports and consumption. We have made a lot of mistakes as a nation; we have wasted trillions of naira in subsidising what we shouldn’t have subsidised,”.

IFC says Nigeria worst hit by low oil price

he International Finance Corporation, IFC, has identified Nigeria as the country worst hit by the low oil price in the global market. In a paper presented at an energy conference in Abuja, titled, ‘Africa Oil and Gas: Challenging Road Still Ahead,’ Chief Investment Officer of the IFC, Mr. Olivier Mussat, stated that Nigeria was the worst affected nation as it needed continuous investment in fields which are maturing. Mussat also noted that up to $3 billion of capital expenditure, CAPEX, had been cancelled, while the Nigerian National Petroleum Corporation, NNPC, is IFC headquarters

increasingly struggling to finance its Joint Venture, JV, assets with International Oil Companies, IOCs. Mussat also stated that Nigerian banks were currently overstretched as they aggressively supported the oil sector with high-levered debt facilities on $80 per barrel calculations which are now coming up for redetermination or refinancing. He added that the bond market has also closed for the Africa oil and gas industry, while equity financing is scarce, as most oil and gas funding has concentrated in North America, where opportunities are numerous and country risk low.

Oil

2016 June, SweetcrudeReports

Govt must clean-up oil bloc award process - Kupolokun

Oil platform

former Group M a n a g i n g Director of the N i g e r i a n N a t i o n a l Petroleum Corporation, N N P C , M r. F u n s h o Kupolokun, has called for urgent step by government to clean up the process of awarding Oil Prospecting Licences, OPLs, and Oil Mining Leases, OMLs, in the country. Kupolokun, who described the process of the awards as faulty, said a clean-up of the process was necessary if the country intends to get maximum result from it. Appearing before the House of Representatives Ad hoc Committee investigating the award of the licences and leases in Abuja, Kupolokun, who ran the NNPC during the administration of former President Olusegun Obasanjo, denied involvement in the award of OMLs and OPLs during his tenure. According to him, "The process of 2006 round of bidding was complex, which

made us get less than what we could have gotten, especially on strategic projects. We thought what we did was the right thing but there are areas and issues that we now see went wrong. “Even the competitive bidding where we invited prominent, credible people from all parts of the country, in a bid to make it transparent was still wrong because we see people even in the same room fighting even up till now. “There is a need to clean up the process and make it transparent and better than the past," he added. Kupolokun was NNPC’s head between 2003 and 2007, having joined the corporation in 1972. Born in 1947, Kupolokun graduated with a Mechanical Engineering degree from the University of Lagos as a Shell scholar in 1971. On graduation, he joined Shell BP production department before moving on to Nigeria National Oil Corporation, NNOC, the fore runner of the NNPC.

Nigeria records biggest oil production drop among OPEC members

igeria recorded the biggest drop in crude oil output in April among the members of the Organisation of the Petroleum Exporting Countries, OPEC. It was followed by Venezuela, according to figures from the OPEC Monthly Oil Market Report for the month. According to the report, “Crude oil output increased mostly from Iran, Iraq and Angola, while production decreased in UAE, Libya and Nigeria.” Crude oil production in Nigeria fell by 67,000 barrels per day, bpd, during the month, leading the country to lose Oil rig its status as

Africa’s top oil producer to Angola. The market report released last week put crude oil production from Nigeria at 1.677 million bpd in March based on direct communication, down from 1.744 million bpd in February. Angola saw its oil output rise to 1.782 million bpd last month from 1.767 million bpd in February, based on direct communication, according to the OPEC report. The southern African country had in November 2015 overtaken Nigeria in output level as it produced 1.722 million bpd, compared to 1.607 million bpd produced by Nigeria, OPEC’s December report showed. Exports and production of Nigeria’s popular crude grade Forcados continued to be shut in due to a sabotage-related spill on the subsea Forcados pipeline. The country has recently seen a rise in militant attacks in its main oil-producing region, the Niger Delta, denting oil production. The country’s production figure for March was put at 1.722 million bpd by secondary sources, compared to 1.762 million bpd the previous month. According to secondary sources, total OPEC crude oil production in March averaged 32.25 million bpd, a marginal increase of 15, 000 bpd over the previous month.

Focus

2016 June, SweetcrudeReports

Illegal miners

Illegal mining in focus as lead poisoning ravages Niger State OSCARLINE ONWUEMENYI

he degenerative effects of illegal mining in the country reared its ugly head once again in rural Rafi Local Government Area in Niger State with reports of numerous deaths of children and women from lead poisoning. In Nigeria, the most commonly talked about environmental impacts have been in the oil producing region of the NigerDelta where agricultural, surface and underground water resources have been badly affected. However, artisanal and illegal mining of solid minerals pervades the entire country leaving behind their effects on the environment. Most of these artisanal and illegal miners (men, women and children) are rural and poor and usually work without legal mining title. Their activities include mining of gemstones like tourmaline, beryl, amethyst, aquamarine and garnet and precious minerals like diamond and gold. It also includes mining of other minerals like columbite, tantalite, and cassiterite. Mining of river sands, digging of burrow

pits, removal of topsoil, sand and laterite for building purposes are also carried out. Other activities include removal of vegetation and cleaning of dams to produce dam sands. These array of activities lead to uncoordinated and unregulated mining which usually result in haphazard extraction of the minerals and eventual destruction of the environment. Evidence of such destruction are observed in the form of soil erosion, and, change in topography, and water pollution and dumps of overburden material. The resultant effects of abandoned pits and other mining sites that become flooded during the raining season pose health dangers to the citizens. All these impacts negatively on and degrade the environment. The tragic events a few years ago that led to the death of over 450 children from lead poisoning in Zamfara State, for instance, brings to stark focus, the negative environmental impacts of illegal mining on communities across the country. Till date, more than 2000 children are said to have received treatment for lead poisoning, as a consequence of unregulated gold mining

activities in the state. The exact number of adults affected have not be ascertained. However, it has been confirmed to have led to higher rates of miscarriages among adult women and impaired livelihoods and health challenges for thousands. The human rights violations in mining communities are obvious, including the right to life, to a healthy environment and violations of their socio-economic rights. The less obvious social impacts of mining are often ignored, such as increased migration of skilled miners and related service providers which put pressures on limited amenities, increased social security risks and destruction of culture, are other ways through which the human rights of host communities are potentially abused. Violations occur when the government does not address the strains these incursions put on the communities or does not fulfill its obligations to citizens in host communities. With regards to the Zamfara State saga, many human rights organisations have argued that, while there are regulations for artisanal mining in the country, not much is done

Till date, more than 2000 children are said to have received treatment for lead poisoning, as a consequence of unregulated gold mining activities in the state

by the government to regulate actively these activities. The Nigerian government, they added, was characteristically slow to respond to the Zamfara disaster, coupled with the back and forth trading of blame between the Federal and State governments over whose responsibility it was to respond to the crisis. The Mining Act of 2007, vests mining within the exclusive purview of the Federal government, through the Ministry of Solid Minerals Development. However, state governments have responsibility for the regulation of the environment through the state

Mineral Resources Management Committee, MIREMCO. The MIREMCOs were primarily set up to ensure some level of citizen participation in the governance of natural resources located in their communities. Unfortunately, the various state MIREMCOs have been slow to take up their responsibility and are yet to fulfill the rationale behind their establishment. However, following lessons learnt from the Zamfara debacle, where the Federal and state governmentsâ&#x20AC;&#x2122; response was deemed to be lax and inadequate, the Federal Ministry of Health has been quick to wade into the

CONTINUES ON PAGE 16

Focus

2016 June, SweetcrudeReports

Illegal mining in focus as lead poisoning ravages Niger State

Mining site

CONTINUED FROM PAGE 15 Rafi disaster. Recently, it confirmed an outbreak of lead poisoning in Rafi Local Council of Niger State which has so far claimed 28 lives from about 65 confirmed cases. The outbreak is said to be spreading to other localities in the state and neighbouring Kaduna state. All the deaths were of children under the age of 5 and made up of 17 females and 11 males. High serum of leads levels, 17-22 times higher than the acceptable limits established by the World Health Organisation, WHO, is said to have been responsible for the deaths. Already, mining activities have been suspended in the affected areas. The findings also revealed a serious impact on livestock with cows, goats and chickens most affected. Minister of State for Health, Fidelis Nwankwo, who briefed newsmen on the development, said, “The devastating impact of this outbreak is associated with new mining sites which were found to contain more leaded ores which are often brought home for crushing and processing.” Making reference to how Nigeria tackled the Ebola outbreak, Nwankwo said, “This is another battle that must be won.” He stressed however that

lead poisoning is not contagious and is amenable to effective and sustainable control, provided safer and healthier mining practises are imbibed. The Minister noted that the Nigerian Centre for Disease Control and the Ministry had commenced the process of establishing incident command structures to enhance routine coordination of the outbreak response, adding that health facilities in Niger and Zamfara states had been mobilised to commence treatment of the clinically ill children in collaboration with Medicines Sans Frontiers (Doctors without Borders), WHO and the Federal Medical Centre, Gusau. Meanwhile, in view of the devastating effects of lead poisoning in Angwan Shakira and Angwan Kawo in Madaka district of Rafi local government area of Niger state, the state government has signed a M e m o r a n d u m O f Understanding with Medecin S a n s F r o n t i e r, M S F Operational Centre, Amsterdam to tackle the effect of lead on the people. The MSF representative, Dr. Phillips Haruna, who spoke in an interview with our correspondent after a visit to the area, stated that the lead poisoning was not restricted to Niger state alone but all the

states along the belt saying that the experience was devastating to national development. He disclosed that from preliminary survey conducted by MSF 93 percent of the houses in Angwan Shakira were exposed to the pollution of lead. He said that lead had a longterm devastating effect on the mental health of people especially children as they grow

government, and the Senate president.” He added that the organisation has been working with Zamfara state government that was also experiencing lead poisoning, adding that from the scoping done in the areas affected in Rafi local government area of the state, more children were vulnerable to the lead poisoning. The Minister of Solid Minerals

The devastating impact of this outbreak is associated with new mining sites which were found to contain more leaded ores which are often brought home for crushing and processing old. According to him, “When we got to Rafi Local Government, we noticed that the children were intoxicated by the poison; 93 per cent of all houses in Anguwan Kawu were seriously polluted. And in December last year, the report of the exercise was presented to the Federal Government, Niger State

D e v e l o p m e n t , D r. K a y o d e Fayemi, regretted that the trajectory of the country’s extractive industry has not been without controversy. “We are all witnesses to the challenges in the oil industry over the past few decades. More recently, we have seen significant challenges in the gold, lead and zinc mines of Zamfara where illegal mining

without a clear understanding of how to handle poisonous material such as lead has had incredibly devastating consequences.” Fayemi said the ministry would work to strengthen the institutional support to artisanal and small-scale miners for integrating them into the formal sector. He added that based on the recent update provided by the Bureau for Public Enterprises to the Ministry, an audit of all mining locations will be undertaken to (or “intending to”) streamlining mining practices in the country to enhance health and safety standards in the sector. In the view of Mr. Abiodun Baiyewu, the Country Director of Global Rights in Nigeria, government agencies at both Federal and state levels have not responded appropriately and adequately to the mining disaster, thereby endangering the lives of citizens. “Their failure is not limited to events after the mining disaster; they in the first place allowed the situation to develop by overlooking dangerous practices and failed to take corrective action once they were aware of the danger,” he said. According to her, it is the constitutional duty of the three levels of government to respect, protect and fulfill the human right of the citizens.

Gas

2016 June, SweetcrudeReports

NLNG vessel

NLNG Train 7 Plus progressing toward FID, says MD KUNLE KALEJAYE

he Nigeria Liquefied Natural Gas, NLNG, expansion plan under the Train 7 Plus project continues to make progress toward a final investment decision, FID, the Nigerian LNG Limited has said. The project, which incorporates Train 8, will raise the NLNG liquefaction capacity to over 30 million tons per annum, mtpa. NLNG’s Managing Director and Chief Executive Officer, Mr. Bab Omotowa, made this known in Lagos. “Are we doing Train 7 & 8 together? The answer is true. Previously we were looking at Train 7 as a mega project which is similar to what the Qataris has built which is a 8.7 million tons per annum Train. “The current set of Trains which we have is between 3.8 to 4.3. But this new one would have been 8.7 but after much review, we said that it is much better to replicate what we have rather than complicate our problem.

“So we are building a replica of Train 6. So when we do that (4.3, 4.3 capacity each) we have 8.6 which is the same 8.7. It will be easier to maintain and it is the same technology. So we are working the two Trains (7 & 8) together,” Mr. Omotowa said. Commenting on when the Final Investment Decision, FID, of Train 7 & 8 would be concluded, Omotowa said there is progress toward the FID. He stated that this would be attained during the present administration of President Muhammadu Buhari but noted that there were several other steps that needed to be taken before the FID. The NLNG boss noted that embarking on Train 7&8 projects now was much cheaper because of low oil price, adding that $300 million has already been spent on preparation of the project's site. NLNG currently has 16 longterm LNG sale and purchase agreements, SPAs, for products from its existing trains, executed with 11 buyers on a DES basis. These buyers include Enel, Gas Natural, Botas, Engie, GALP Gas Natural, BG LNG

The NLNG boss noted that embarking on Train 7&8 projects now was much cheaper because of low oil price, adding that $300 million has already been spent on preparation of the project's site

(now part of Shell), Endesa, Eni, Iberdrola, Shell International Trading Middle East Ltd and Total Gas and Power Ltd. The Bonny Island facility currently has six trains in operation with a total capacity of some 22 mtpa of LNG. NLNG is a joint venture compromised of Nigerian National Petroleum Corporation, NNPC (49%), Shell (25.6%), Total (15%) and Eni (10.4%).

US: Regulators grant approval to Elba Island LNG export project

ouston-based Kinder Morgan has said it has received US federal approval for its $2 billion project to export liquefied natural gas, LNG, from Georgia. The Federal Energy Regulatory Commission, FERC, authorised Kinder Morgan’s Elba Liquefaction project that will liquefy natural gas and export the product from Elba Island, which is near Savannah, Georgia. The first of 10 liquefaction units is expected to start operations in the spring of 2018, with the project coming fully online by the end of that year. The project involves converting the existing import terminal at Elba Island. Kinder Morgan already has a 20-year deal

with Royal Dutch Shell to purchase LNG. The terminal is expected to produce about 350 million cubic feet a day of LNG. Construction could begin within 60 days after the final regulatory approvals are granted, said Kinder Morgan spokesman Richard Wheatley. Earlier this year, Kinder Morgan said it hoped to sell a stake in the project to private equity groups to help with the financing. The idea is to cut capital costs amid the ongoing oil bust. Originally, the project was a 51-49 percent joint venture between majority owner Kinder Morgan and Shell. Kinder Morgan bought Shell’s interest in July, but Shell kept the 20year contracts to buy the LNG.

Gas

2016 June, SweetcrudeReports

Marketers accuse PPMC of diverting LPG vessels, triggering price instability

he Nigerian Association of L i q u e f i e d Petroleum Gas Marketers, NALPGAM, has accused the Pipelines and Products Marketing Company, PPMC, of inefficiency in handling berthing of Liquefied Petroleum Gas, LPG, vessels in Lagos, saying this has triggered instability in the price of the product. Executive Secretary of NALPGAM, Mr. Bassey Essien, alleged that the Marine Transport Department - a unit under PPMC in charge of scheduling vessels ? for berthing at various terminals in Lagos - has been diverting LPG vessels meant for other jetties in Lagos to a private company (Navgas) that owns a particular jetty in Lagos, thereby creating a monopoly and causing a hike in the price of the product.

So, this is not an issue of price increase, it is an issue of price instability because if it is price increase, we should know why it is going up and if it is coming down, we should know why it is coming down Essien alleged that the deliberate diversion of LPG vessels to Navgas and the jetty in question by the PPMC has

made the price of the product to increase from N2.4 million per 20 metric tonnes of truck to N3.5 million for the same quantity in less than one week. He maintained that the price instability caused by the development has also affected the price of the 12.5 kilogram cylinder of LPG which has increased from N2,500 to between N3,500 to N4,000. He noted that government's effort to supply major terminals with LPG in Lagos was currently been thwarted by "PPMC conspiracy". "Major terminals are being starved of the product? , but if products are made available to all the terminals, the issue of price instability will not exist. "Now that only one terminal receives product, they will be the one that will determine the market price. "So, this is not an issue of price increase, it is an issue of price instability ? because if it is

price increase, we should know why it is going up and if is coming down, we should know why it is coming down". He urged PPMC to create a schedule that would allow LPG

vessels from Bonny, Rivers State, to berth twice in a month in Lagos, noting that vessels not berthing twice was creating supply gaps.

Egypt to increase gas production to 6bcf/d

gypt will increase its natural gas production to between 5.5 and 6 billion cubic feet per day, BCF/d, by the end of 2019, up from the current 3.9 billion cubic feet per day. Oil Minister Tarek El Molla stated this, saying the country currently has 12 natural gas field development projects underway worth a total of $33 billion in investment. Molla spoke at the inauguration of a fertiliser plant in the port city of Damietta, according to Reuters. Once an energy exporter, Egypt has turned into a net importer because of declining oil and gas production and increasing consumption. It is trying to speed up production at recent discoveries to fill its energy gap as soon as possible. Recent discoveries and increased production may help the country save precious hard currency as it deals with an acute dollar shortage.

Interpipe focuses on quality key part of nterpipe considers quality control as a , exceeding the activities to manufacture products lemented at customer needs. Quality control is imp ing from all stages of production process - start i mill and up to min e continuous casting at the in-hous d pipe ends and nondestructive testing of pipe body an shipping to customers. pliance with The Company has been certified for com andards: nal st requirements of national and internatio

U ISO 9001, Quality Management System acc. to DST ISO 9001, and API Specification Q1; c. to ISO 14001 Environmental Management System ac standard; and ent System Occupational Health and Safety Managem acc. to OHSAS 18001 standard; d for Companyâ&#x20AC;&#x2122;s products have been certifie al and n o compliance with requirements of nati 5L, EN D(IN), international standards: API 5CT, API GOST, and TU; & gas companies. Company is prequalified by major oil

Gas

2016 June, SweetcrudeReports

IEA forecast global gas demand decline despite lower prices

he Inte rna ti ona l Energy Association, EIA, says global gas demand would continue to dip despite lower gas prices. This medium-term report forecasts demand to reach 3.9 trillion cubic metres in 2021, increasing at an average annual rate of 1.5%, equivalent to an incremental 340 bcm between 2015 and 2021. According to a recently released report, weak demand, low prices and a sharp cutback in investments result in slower growth in global gas production over the time horizon of the report. It noted that in the United States, production is expected to remain relatively flat across 2016 and 2017, pressured by a fall in output of associated gas and much slower growth elsewhere. “Given the drastic fall in both oil and gas prices, stagnation in output must be looked at as a remarkable achievement and a testament to the technological and financial resilience of the US shale industry,” the report noted. The IEA said it expects that the oil market will be close to balance in the second half of 2016, and in 2017 it will be in balance. This should help gas production growth resume, as gradually recovering oil prices improve the economics of associated/wet gas. It added that large cost reductions achieved during the downturn will allow drilling activity to come back at lower prices than before. “Overall, between 2015 and 2021, US gas production is forecast to increase by more than 100 billion cubic metres (bcm), accounting for onethird of global incremental production.” Following a stagnation in 2014, global gas demand is estimated to have returned to growth in 2015. Expansion has remained well below the historical average, however: since 2012, global gas demand has increased by just 1.0% a year, much slower than the ten-year average of 2.2%.

“This report forecasts demand to reach 3.9 trillion cubic metres in 2021, increasing at an average annual rate of 1.5%, equivalent to an incremental 340 bcm between 2015 and 2021. Slower primary energy demands growth and the decline in the energy intensity of the world economy are lessening demand growth for all fossil fuels, including gas,” it added. According to the report, the energy transformation in China and subdued economic growth in advanced economies are creating headwinds against energy demand in general. Low fossil fuel prices have so far failed to compensate for them. As the IEA warned in the Medium-Term Gas Market Report 2015, it is difficult for gas to compete in a world of very cheap coal, falling costs and continued policy support of renewables.

Gas facility

In a development that echoes the European experience, US thermal generation is expected to decline over the forecast period as a large increase in generation from lowcarbon sources outpaces modest growth in a total generation It added that in the United States, the extension of federal incentives for solar and the wind in 2015 will ensure their continued strong deployment over the remainder of the decade. In a development that echoes the European experience, US thermal generation is expected to decline over the forecast period as a large increase in generation from lowcarbon sources outpaces modest growth in a total generation. With gas prices unlikely to fall much further from the very low level of 2015 – and thus largely

exhausting coal-to-gas switching potential – increases in gas-fired generation from 2015 levels will be limited to the need to replace some of the coal capacity that retires. As a result, the IEA expects US gas-fired generation to stagnate, with risks skewed to the downside. The report noted that over the past two years, weakening fundamentals and much lower oil prices have resulted not only in lower gas prices but also in strong convergence across regional benchmarks.

Yamal LNG signs $12bn loan deals with Chinese banks

ussia's Novatek-led Yamal LNG has signed loan agreements with Chinese banks worth 9.3 billion euros ($10.6 billion) and 9.8 billion yuan ($1.5 billion), Yamal LNG said it is a major boost for the liquefied natural gas project. The painstaking talks with European and Chinese lenders had dragged on for months and were complicated by Western sanctions against Novatek and its major shareholder Gennady Timchenko, a friend of Russian President Vladimir Putin, over Moscow's role in the Ukraine crisis. The funds will help the $27 billion Yamal LNG to start producing liquefied gas next year. The project envisages three LNG production lines, each with annual capacity of 5.5 million tonnes. About 95 percent of future production has been presold. The gas, frozen at a temperature of around minus 160 Celsius (minus 256 Farenheit), will be shipped to global markets including China. The euro-denominated loan will pay 6-month EURIBOR plus 3.3 percent at the construction stage and plus 3.55 percent thereafter. The renminbi loan is rased at 6-month SHIBOR plus 3.3 percent and 3.55 percent respectively. The 15-year loan deals were signed with Export-Import Bank of China and the China Development Bank. Novatek holds 50.1 percent of Yamal LNG. France's Total and China National Petroleum Corp control 20 percent each while China's Silk Road Fund owns 9.9 percent of the project.

Power

2016 June, SweetcrudeReports

75m Nigerians lack access to electricity – Report

Lagos at night

o fewer than 44% or about 75 million Nigerians lack a c c e s s t o electricity, well below the average of 80% for all three comparison groups, according to a report by the Boston Consulting Group, BCG, a global management consulting firm and the world’s leading advisor on business strategy. The report entitled 'Unlocking Nigeria’s Potential- The Path to Well-Being', noted the potentials of Nigeria and stated that these potentials, if properly harnessed, could bring sustained economic growth and increased well-being for the people of Nigeria. The group also noted that Nigeria’s anaemic infrastructure is in many ways its greatest challenge, impeding progress in multiple areas. The value of Nigeria’s infrastructure stock is about 35% of GDP, compared with an average of about 70% for large economies. “The country has major deficits in its electricity grid, road network, and supply. The state of the country’s infrastructure stems in part from a system with multiple flaws, such as overlapping responsibilities among government ministries and inadequate enforcement of regulations and agreements related to projects.”

Power outages are widespread, and threequarters of companies report that the lack of reliable energy is a major constraint It further observed that a key reason for the shortfall is that Nigeria invested just $664 per capita (adjusted for purchasingpower parity) in infrastructure annually from 2009 to 2013, or 3% of GDP, compared with an average of $3,060, or 5% of GDP, for the countries in the comparison groups for which data was available, adding that without decisive intervention, that gap is likely to widen. The consulting group stated that the Nigerian power system has the capacity to generate

more than 10,000 megawatts, but because of problems such as ageing equipment and an inadequate transmission network, the actual output in this country of 170 million people is only 4,000 to 5,000 megawatts. According to the BCG report, the list of gaping infrastructure holes is long and varied. “Consider basic access to power. Only 56% of Nigerians have access to electricity, well below the average of 80% for all three comparison groups. Power outages are widespread, and three-quarters of companies report that the lack of reliable energy is a major constraint. “The Nigerian power system has the capacity to generate more than 10,000 megawatts, but because of problems such as ageing equipment and an inadequate transmission network, the actual output in this country of 170 million people is only 4,000 to 5,000 megawatts. (Expensive, private diesel generators partially fill the gap, providing about 40% of the electricity consumed in Nigeria). “Compare this with another developing oil-rich country, Trinidad and Tobago, where 1,600 megawatts are generated for a population of just 1.4 million, or South Africa, which generates 50,000 megawatts for a population of about 50 million.”

Mass disconnection by DISCOs is illegal - NERC

he Nigerian Electricity Regulatory Commission, NERC, says mass disconnection being carried out by power distribution companies, DISCOs, is illegal. NERC on it website said any mass disconnection carried out by the DISCOs contravened section 5-11 of the Commission's Connection and Disconnection Procedures for Electricity Services Regulation. Consequently, NERC said any mass disconnection carried out by DISCO should be reported to the commission through its Abuja office address. The post reads: "The attention of the commission has been drawn to incidents of mass disconnection of electricity supply to communities, villages, Local Government Areas and Estates by Distribution Companies premised on purported nonpayment of electricity bills. "Please note that the commission has developed procedures for disconnection of defaulting customers as contained in the Regulation on Connection and Distribution for Electricity Services. The Commission has also banned mass disconnection of electricity customers". "Therefore, any community, village, local government area or

Electricity worker

estate wrongfully disconnected from electricity supply should report to the commission for its further action. "Electricity customers who pay their bills should not be disconnected via a mass disconnection of his/her community, blocks of flats estate etc," NERC further said.

2016 June, SweetcrudeReports

Power

Renewable energy sources

AfDB targets 2025 for universal electricity access in Africa OSCARLINE ONWUEMENYI, Abuja kilowatts per hour, kWh,

h e A f r i c a n Development Bank, AfDB, has again set an ambitious goal to help the continent achieve universal electricity access by 2025, with a strong focus on encouraging clean and renewable energy solutions. To achieve this goal, it is estimated that needed investment in the energy sector will range between $60 billion and $90 billion per year. This will require providing 160 gigawatts, GW, of new energy capacity, 130 million new on-grid connections, 75 million new offgrid connections and providing 150 million households with access to clean cooking solutions. In giving this plan a big leverage, the AfDB Group will be investing $12 billion of its own resources in the energy sector over the next five years; this is in addition to a leverage of about $50 billion. Conservatively, over 640 million Africans have no access to energy, corresponding to an electricity access rate for African countries at just over 40 percent, the lowest in the world. Per capita consumption of energy in sub-Saharan Africa (excluding South Africa) is 180

compared with 13,000kWh per capita in the US and 6,500kWh in Europe. “These annual meetings are not just about us who are here. They are also very much about the people who are not here. It is about the millions of our fellow Africans without electricity, or food, or jobs; the young people on whom Africa’s future will depend. “We will never transform Africa without transforming its energy supply. Energy is like the blood in the body. It has to flow – everywhere,” Akinwunmi Adesina, president, AfDB Group, said at the annual meetings of the group in Lusaka, Zambia, with the theme “Energy and Climate Change.” To light up and power Africa is among the High 5s priorities of the Group. The High 5s agenda – five priority actions for the AfDB and for Africa – is the AfDB’s channel for focusing and scaling up the 2013 -2022, 10-year strategy, to bring about the socioeconomic transformation of Africa. The bank launched a new deal on energy for Africa, which is built on five inter-related and mutually reinforcing principles: raising aspirations to solve

They are also very much about the people who are not here. It is about the millions of our fellow Africans without electricity, or food, or jobs; the young people on whom Africa’s future will depend

Africa’s energy challenges; establishing a transformative partnership on energy for Africa, and mobilising domestic and international capital for innovative financing in Africa’s energy sector. While the bank will prioritise renewable energy, fossil fuels will remain an important part of the overall energy mix, as is the case with several developed economies, with the bank financing state of the art technology to minimise emissions.

Discos vow massive deployment of meters to improve supply

takeholders in the Nigerian electricity supply industry say they would from next month begin massive deployment of procured meters to customers across the country to improve electricity supply. The decision was part of a six-point communiqué released after the fourth monthly meeting of the Minister of Power, Works and Housing, Babatunde Fashola, with operators in the electricity industry at the Calabar Power Generating Plant, Cross River State. According to the communique, Permanent Secretary of the Ministry, Mr. Louis Edozien, who chaired the meeting designed to identify, discuss and find practical solutions to challenges in the sector, observed that the meeting reiterated the need for more aggressive rollout of metering for all customers.

Power

2016 June, SweetcrudeReports

Power sector may collapse from poor investment - ANED

Thermal power plant

he Association of N i g e r i a n Electricity Distributors, ANED, has listed the impediments to investment in the power sector and warned that the sector could collapse if urgent steps are not taken to remedy the situation. Executive Director of R e s e a r c h a n d A d v o c a c y, ANED, Mr. Sunday Oduntan, who briefed the media on the challenges facing the industry, said the industry revenue shortfall is massive and growing to the tune of N300 billion. Oduntan said, “This is a cash liquidity crises that threatens to completely undermine the electricity value chain and its ability to continue to serve its customers. "The revenue shortfalls adversely impact the ability of the distribution companies (Discos) to make capital investments in metering, network expansion, equipment rehabilitation and replacement that are critical for service delivery improvement.” He said that new investors in the distribution sub-sector of the industry have made a

Oduntan stated that in order to sustain the industry, the government should honour the terms of privatisation, generate more electricity and remain consistent in regulation making which is fundamental to the commercial viability of the sector

significant improvement in many areas like metering the consumers and internal restructuring. According to him, 3,283,402 million customers are now metered, bringing the metering gap down to 2.8 million while efforts have been made to carry out internal restructuring and streamlining of operational costs to make the Discos run more efficiently. He further said that the sector has made improved meter roll out strategies at the customer level and the interface/trading points, adding, “we are getting better

at accounting for the energy we receive which will lead to (more) reasonable estimated bills.” Oduntan stated that in order to sustain the industry, the government should honour the terms of privatisation, generate more electricity and remain consistent in regulation making which is fundamental to the commercial viability of the sector. He also noted the lack of access to foreign exchange and the need for partnership among key players to resolve all issues in the sector.

Nigeria adds 49,000 solar homes in 3 months

report released by SolarNigeria has shown that an additional 49,000 homes across Nigeria acquired solar lighting and power systems in just three months this year. SolarNigeria is an innovative programme that helps solar suppliers and financiers scale up and allows households to access this equipment on full commercial terms. These homes now enjoy bright light and reliable power at lower cost than kerosene and generators. More than 14,000 of the

homes benefiting are in Nigeria’s northern states, where grid deficiencies and the need for reliable power are the most acute. All systems were accessed on full commercial terms, with the householder paying cash, taking a loan, or renting the equipment. The boost represents a dramatic increase in Nigeria’s household solar market. In 2015, the estimated total market was around 130,000 units. Between January and March 2016, new homes connected as a result of the

SolarNigeria initiative have already matched over 40% of that total. According to the report, this was achieved despite the significant challenges of limited access to foreign exchange for importing solar, and the overall declining economic conditions in the country. These high quality plug-andplay solar systems include everything from single bright lamps through to Solar Home Systems able to power multiple lights, a television and fan.

Power

2016 June, SweetcrudeReports

Power plant

Fashola laments state of Oji River power plant

inister of P o w e r , Works and Housing, M r . Babatunde Fashola, has lamented the poor state of the Oji River coal power plant in Enugu, expressing displeasure that most of its operating parts had been dismantled. He spoke at the m e m o r a n d u m o f understanding, MoU, signing ceremony for a $9 million per year Power Africa Energy Distribution Initiative, PAEDI, between the ministry and the United States government. The minister, who was represented by the special adviser to the minister on policy and legal matters, Mr. Olanrewaju Akinsola, lamented that some persons had attempted to turn a potential source of growth, development, and shared

He noted that at a time when the world is in serious pursuit of clean energy to mitigate the impact of climate change and global warming, gas fired plants provide a useful source of quick, large capacity electricity which can take the nation faster to its roadmap of incremental power

prosperity into a source of risk, poverty, and pollution. “My recent visit to Oji River coal power plant in Enugu, which used to supply most, if not all, of Eastern Nigeria, showed that not only is the power plant no longer in use, most of its operating parts had been dismantled,” Fashola said. He noted that at a time when the world is in serious pursuit of clean energy to mitigate the impact of climate change and global warming, gas fired plants provide a useful source of quick, large capacity electricity which can take the nation faster to its roadmap of incremental power. I n N i g e r i a , h o w e v e r, incessant vandalism of gas pipelines has persistently cut gas supply to the gas fired plants, rendering the plants inoperative and ensuring poor power generation and supply to homes and industries.

ExxonMobil, FuelCell Energy pursue novel technology in carbon capture

xxon Mobil Corporation and FuelCell Energy Inc. have announced an agreement to pursue novel technology in power plant carbon dioxide capture through a new application of carbonate fuel cells, which could substantially reduce costs and lead to a more economical pathway toward large-scale application globally. “Advancing economic and sustainable technologies to capture carbon dioxide from large emitters such as power plants is an important part of ExxonMobil’s suite of research into loweremissions solutions to mitigate the risk of climate change,” said Vijay Swarup, vice president for research and development at ExxonMobil Research & Engineering Company. “Our scientists saw the potential for this exciting technology for use at natural gas power plants to enhance the viability of carbon capture and sequestration while at the same time generating additional electricity. We sought the industry leaders in carbonate fuel-cell technology to test its application in pilot stages to help confirm what our researchers saw in the lab over the last two years,” he added in a statement. Bottone, President and Chief Executive officer of FuelCell Energy, Inc., said his company is pleased to bring its global leadership in the development of carbonate fuel cells to this project. “Carbon capture with carbonate fuel cells is a potential gamechanger for affordably and efficiently concentrating carbon dioxide for large-scale gas and coal-fired power plants,” Bottone said.

Power

2016 June, SweetcrudeReports

Electricity pylon

Power: PwC report identifies ways to achieve UN 2030 target OSCARLINE ONWUEMENYI, Abuja

lobal auditing firm, PriceWaterhouseC oopers, PwC, has in its latest report identified ways to achieve the United Nations 2030 target of electricity for all. The report titled, ‘Electricity Beyond the Grid: Accelerating Access to Sustainable Power for All’, says a new approach is needed that better recognises the part that off-grid technology can play in the expansion of power to rural communities It stated that new renewable off-grid technologies, in combination with innovative business models and mobile payment systems hold the key to rural electrification. According to the multinational professional services network, energy transformation means the time is right for policymakers to get out of a top-down mindset and support the role that a range of renewable energy off-grid technologies and new business models can play. John Gibbs, Africa Deals Power & Utility Lead, PwC, noted that “For the millions of people who don’t currently have access to electricity, the old assumption that they will have to wait for grid extensions is being turned on its head by new technological

possibilities. 634 million people without electricity are in Africa. “Faster progress is needed, and we believe it can be achieved if national energy policies adopt a more comprehensive approach to energy access, embracing the new starting points for energy provided by standalone renewable technology and minigrids.” According to Georg Baecker, senior manager and energy policy and regulation expert, PwC, “Policymakers need to embrace the new renewable offgrid technologies and innovative business models. “The combination of centralised top-down grid extension with decentralised demand-driven bottom-up strategies, in the form of minigrids and especially standalone solutions, will speed up the increase in electrification levels.” With an energy transformation on the cards, Angeli Hoekstra, Power & Utility Specialist for PwC Africa, pointed out that, “'All or nothing’ approaches that focus primarily on the national grid are increasingly out of step of what is now possible in power t e c h n o l o g y. A d v a n c e s i n technology are rapidly changing the options available beyond the grid.

“Falling solar technology costs have spurred the growth of standalone home systems and are changing the economics of mini-grid systems. Battery storage technology is fast evolving to the point where it is going to play a significant role in utility-scale solar power storage and is beginning to feature in smaller-scale off-grid solutions. "Together with access to mobile technology and mobile payment systems for microloans, a new era has arrived for beyond the grid electrification.” The PwC report sets out five recommendations for accelerating the increase of electrification including develop an integrated energy access plan and map – so that everyone can plan with more certainty for either off-grid or grid extension solutions; create an enabling environment for off-grid development - including clearer criteria for mini-grid development, support for skills and training and more supportive regulation to allow private players to unlock the offgrid market potential. Other recommendations include recognise the value of and promote the growth of mobile infrastructure, microloans and payment solutions in supporting energy

The combination of centralised top-down grid extension with decentralised demand-driven bottom-up strategies, in the form of minigrids and especially standalone solutions, will speed up the increase in electrification levels access - mobile infrastructure is proving crucial in the take-up of standalone home systems, giving providers a low-cost channel for customer relations and an ability to automatically manage nonpayment; establish an off-grid innovation and development fund - a highly visible development and innovation fund can play an important part in spurring off-grid growth in each country; and have a highlevel energy access champion that can drive results – to cut through bottlenecks and monitor results. Based on the technological advances in off-grid systems and

battery storage, a decrease in their prices and an increase in energy efficient appliances, Hoekstra also says that there will be a real future threat for the current established integrated Power Utilities, especially the ones without a reliable supply of electricity, PwC said in a statement. They will need to adapt their business models or due to an increase in embedded generation and subsequent customers going off-grid, they will face a major challenge ahead in their future sustainability.

Finance

2016 June, SweetcrudeReports

Nigeria losing $700m annually to poor record keeping in oil sector

Oil rigs IKE AMOS, Abuja

he Natural R e s o u r c e Governance Institute, NRGI, a n d t h e Nigerian Natural Resource Governance Institute, NNRC, have disclosed that Nigeria is losing $700 million annually due to poor record keeping in the petroleum sector by the various regulatory agencies. The NNRC and the NRGI, in a report presented in Abuja, said there seems to be a deliberate effort put in place for poor recording keeping across agencies. The report, which outlines the high points of the various oil industry audit reports, stated that the processes for storing data were mostly manual and analogue. As a result of the manual and analogue mode of record keeping by the agencies, the NNRC and NRGI disclosed that there are widespread record disparities, unverifiable data and interagencies discrepancies, adding that a one per cent

margin of error equals revenue loss of $700 million annually. To address the issue and curb the losses, the report advocated the automation of the record keeping process, calling for the provision of a centralised portal for collating and disseminating information across agencies. Furthermore, the report noted that there is an absence of coordination amongst the

various government agencies, which has led to double payments of subsidy by the Nigerian National Petroleum Corporation, NNPC, and the Central Bank of Nigeria, CBN. It said, “Various discrepancies on the same information from the governing agencies points to a complete lack of collaboration among the agencies. Also, the agencies

should hold each other accountable to ensure there is an implementation of management procedures and no violation of various laws and guidelines.” The report also disclosed that the various regulatory agencies in the petroleum industry appear weak and have loopholes which both the oil marketers and the NNPC take advantage of to shortchange the country.

“Such lack of proper regulation led to NNPC’s introductiono f practices that are not permitted or recognised by the current Petroleum Stabilisation Fund, PSF, guidelines, that if unchecked by NNPC’s internal control mechanisms may allow for significant leakages. There is violation of the PSF guidelines by marketers and the NNPC,” the report noted.

Govt earns N558bn from royalties, gas flaring penalty, others

igeria earned N558.19 billion in 2015, from royalties, pipeline fees and sanctions meted out to oil and gas companies for flouting the Federal Government’s directives on gas flaring, among others. This is according to the Central Bank of Nigeria, CBN’s Quarterly Statistical Bulletins for 2015, published recently. Giving a breakdown of the earnings, the CBN stated that oil and gas firms operating in the country

paid N2.23 billion as fine for gas flaring in 2015; earnings from royalties totaled N536.51 billion while N19.45 billion came from pipeline fees and miscellaneous items. Further breakdown of the item showed that N670 million was recorded as gas flaring penalty for the first quarter of 2015; N790 million was recorded in the second quarter; N350 million was recorded in the third quarter, while N420 million was recorded in the fourth quarter.

In the area of royalties, N158.13 billion, N110.53 billion, N155.61 billion and N112.24 billion was recorded in the first, second, third and fourth quarters respectively. For pipeline fees and miscellaneous items, N4.57 billion, N10.10 billion, N4.23 billion and N550 million was recorded in the first, second, third and fourth quarters respectively. In addition, the country earned N1.86 trillion from the sale of crude oil in the year under review, dropping

by N1.114 trillion or 37.47 per cent from N2.973 trillion recorded in 2014. Giving a breakdown of the earnings, the CBN stated that in the first quarter, Q1, of 2015, the country earned N557.5 billion from crude sales, earnings was N459.89 billion in Q2, while in Q3 and Q4, oil sales earnings dipped to N426.15 billion and N415.82 billion respectively.

2016 June, SweetcrudeReports

Finance

Barrels of oil

Oil price: Govt loses $45.9m revenue in April OSCARLINE ONWUEMENYI, Abuja

i g e r i a recorded a revenue loss of $45.9 million in April, according to Minister of Finance, Mrs. Kemi Adesun. The revenue loss was as a result of the drop in the average price of crude oil from $39.04 in December 2015 to $29.02 in January this year, the minister said. This revelation came as the Federation Account Allocation Committee, FAAC, recently confirmed a decline of N18.8 billion in the nation's gross statutory revenue from N232.61 billion in March to N213.81 billion last month. Monthly allocations from Nigeria's Federation Account to the three tiers of government for the month of April equally fell by N18.2 billion to N281.5 billion from N299.74 billion in March. â&#x20AC;&#x153;The gross statutory revenue of N213.81 billion received for the month was lower than the N232.61 billion received in the

previous month by N18.8 billion. â&#x20AC;&#x153;There was a revenue loss of $45.9 million as a result of the drop in the average price of crude oil from $39.04 in December 2015 to $29.02 in January 2016.â&#x20AC;? In terms of allocations to the three tiers of government, the minister said the decline in revenue had a negative

impact on the amount shared. She added that a marginal drop in income was recorded from oil and gas royalty as well as import duty. According to Adeosun, while oil production increased slightly between December 2015 and January 2016 despite

explosions at the Escravos export terminal, the force majeure declared at the Brass terminal, shut-ins and shutdown of pipelines at other terminals for repairs and maintenance affected government revenues. Nigeria plans to earn a total N3.86 trillion revenue this year, N820 billion of which is expected to come from oil-

related sources. The oil earnings are based on a crude oil benchmark price of $38 per barrel and a production estimate of 2.2 million barrels per day. With crude oil prices still below $50 a barrel and oil production suffering seriously from resurgence of militancy and attacks on oil and gas installations in the Niger Delta, it would be a tall order for the government to achieve these targets.

Nigeria sees reduction in gas flared penalty as utilisation rises

igeria recorded a reduction of 25 percent in gas flared penalty in 2013, according to the recently-released Nigerian Extractive Industries Transparency Initiative, NEITI, audit report for that year. The report, released in Abuja, said total gas flarED fee collected by the government in the year was $18,475,000 compared to 2012 figure of $24,580,000. The reduction, according to the report, was as a result of increase in gas utilisation and a gradual decline in gas flaring trend in adherence to government's policy of zero gas flaring. NEITI explained that 41 oil and gas companies and 16 government agencies were audited for the 2013 oil and gas audit cycle, noting that they were the producing companies that made material payments of $5 million and above in 2013. The report added that the total crude oil production in 2013 from the Nigerian National Petroleum Corporation, NNPC, records was 800.488 million barrels. "This volume was inclusive of production from joint ventures,

production sharing ontracts, service contracts, sole risk/independent operators and marginal fields operators. "However, the total volume of crude lifted by the different contract arrangements from NNPC records was 800.338 million barrels," the report stated. It added that revenue flow to the federation, other tiers of government and sub-national entities from all sources (crude oil sales, taxes, royalties and other incomes) amounted to $58.07 billion. "The total outstanding revenue from NNPC and its sub-units from the 2013 Oil And Gas Industry Audit stood at $3.8 billion and N358.3 billion. The total losses to the federation due to Offshore Processing Arrangement, OPA, crude swap, crude theft etc, came to about $5.96 billion and N20.4 billion. "Total under-assessment and underpayment by companies due to contested pricing methodology amounted to $599.8m in 2013," NEITI said.

2016 June, SweetcrudeReports

Finance

NNPC frustrating collection of signature bonus, says NEITI

NNPC Towers, Abuja

IKE AMOS

he Nigerian Extractive Industries Transparency Initiative, NEITI, has accused the Nigerian National Petroleum Corporation, NNPC, of frustrating the collection of signature bonus from oil and gas companies by the Department of Petroleum Resources, DPR. NEITI, in the 2013 Oil and Gas Audit Report released on its website, accused the NNPC of hoarding information concerning the date Production Sharing Contracts, PSC, are entered

into, creating a stumbling block for the DPR in collecting signature bonus. The report said, “DPR is responsible for collecting signature bonus. NNPC however, does not inform DPR of the date of signing of each PSC to ensure that all committed signature bonuses are collected. “This created difficulties in obtaining reliable and comprehensive information on the arrears of signature bonus.” However, to address this irregularity, NEITI said the DPR has established adequate accounting system to manage all signature bonus commitments entered into by companies, while it added that

though Signature Bonus was not paid by any Entity in 2013 because there was no bid round, Sigmund Oilfields Limited paid $12.5 million as signature bonus with respect to Oil Mining Lease (OML) 2012. The NEITI also lamented the disparities in production lifting volumes between the NNPC and the DPR, stating that the recurring lack of reconciled positions between the records of NNPC and DPR puts doubt on the integrity of production and lifting figures and raises issues of accountability. The report said, “In the course of carrying out v a l i d a t i o n a n d reconciliation of Production

Five firms account for bulk of govt revenue from solid minerals

he Nigeria Extractive Industries Transparency Initiative, NEITI, has revealed that five companies were providing a bulk of the revenue accruing to the Federal Government from the solid minerals sector. NEITI stated in a report that 93 percent of the total government revenues from the sector was from five companiesn namely Dangote Group, WAPCO, Ashaka Cement, Unicem

and CCNN. According to it, Dangote Industries Limited generates more mineral resource revenue for the government than the rest of the nation put together. It maintained that the group was responsible for 53 per cent of government’s revenue, that is, N15.9 billion of the total N33.86 billion accrued in 2013 to the federal government. “53 percent of the country’s revenue from the solid minerals sector was paid by

Dangote Cement Plc to the federal government,” the agency said. It said Nigeria has about 52 solid mineral resources across all states of the federation, with every state possessing at least two mineral resources. But of all 52, limestone was exploited more in 2013, than 51 others put together. Limestone, which is used for making cement, was responsible for 52 percent of solid mineral

and lifting volumes between the records of NNPC and DPR, it was noted that a difference of 538,000 barrels (bbls) and 589,000 bbls exists in aggregate production and lifting volumes respectively. “This is a serious issue in the sense that: The JV companies signed off all reconciled production figures with DPR and NNPC separately for the same period. Ideally, there ought to be no difference in the production volumes presented by NNPC and DPR as they were duly reconciled with the JVs. However, the volumes presented by NNPC and DPR are different in most cases. “Also, in some instances there were more than one

productions. Granite, Laterite, and sand were responsible for 27.8, 11.3 and 5.8 percent respectively. Forty-eight other minerals were responsible for only 3 percent of the country’s solid mineral productions. Dangote Cement Plc has recently expanded its frontiers to Asia, by constructing a 3 million metric tons per annum, mmtpa, Cement Plant in Nepal, as part of its new investment of $4.34 billion into 10 African countries. It is currently in 15 African countries, excluding Kenya, Niger, and Mali, which are new projects.

reconciled production volume duly signed off by both DPR and the companies for the same period. For example DPR and Chevron jointly signed off 74,228,949 bbls (2nd December, 2014 Operator’s Date and 17th November, 2014 – DPR’s Date ) and 74,879,296 bbls (3rd December, 2014) as production volumes for Escravos crude type as well as 2,638,334 bbls (3rd December, 2014) and 2,638,681 bbls (3rd December, 2014) as production for Pennington crude type in separate documents. “It is worthy of note that the reconciliation of 2012 and 2013 production and lifting volumes between DPR and the companies did not take place until August 2014. The signed off for production volumes was only done by both DPR and the JV companies without NNPC, a partner in the JV.” NEITI said the differences between DPR and NNPC figures also accounted for the differences between audit figures which are based on NNPC records and the companies reconciled figures with DPR. To this end, NEITI called on the stakeholders — NNPC, DPR and the oil companies — to ensure timely, periodic and joint reconciliation of production and lifting volumes and update records accordingly.

2016 June, SweetcrudeReports

Finance

FAAC sees lowest revenue since oil price decline

KUNLE KALEJAYE

igeria's annual t r a d e w i t h Houston, Texas in the United States ?on oil and gas reached $15 billion in 2015. Mayo?r of Houston, Sylvester Turner, who disclosed this, said oil and gas trade between Nigeria and Houston was a success story because of their close ties. Turner stated this in his special message to Nigeria's small and medium enterprises and America's original equipment manufacturers at the 2016 Nigeria Content Investment Forum, NCIF, in Houston, Texas?. He explained that the relationship between Nigeria and Houston has made many oil companies in Houston to open office branches or have associates in Nigeria. "330 Houston companies have businesses and trade connection with Nigeria", Turner said, noting also that Houston ranks as Nigeria's largest US gateway for international trade ?and for greater partnership.

Oil vessels

Nigeria-Houston annual oil and gas trade hits $15bn Further strengthening Houston-Nigeria trade, the Houston mayor sated that in 2011, United Airlines opened a direct flight in Nigeria, from Houston to Lagos, linking two major energy cities. "This flight has already promoted robust connections. Houstonians and Nigerian alike have benefited greatly from this connection," he said. Mayor Turner thanked the organiser of NCIF for the vision of the forum which seeks to continue to grow credible partnership, fostering

industry support and participation, cultivating new and innovative ideas ?and initiatives that will be mutually beneficial for Nigeria and Houston alike. I n a d d i t i o n t o commending organisers of the event for their untiring efforts to promote business collaboration between the city-based original equipment manufacturers and Nigeria-based small and medium enterprises, the mayor issued a proclamation declaring

May 2, 2016 the 'Nigeria Content Investment Forum Day'. NCIF, an initiative of the Nigerian Content Development and Management Board, N C D M B , a n d SweetcrudeReports, also bagged a United States of America Congressional citation for its efforts in promoting business collaboration between entities in Sub-Saharan Africa and the USA.

igeria's Federal Government, the 36 states and the local government councils witnessed the lowest total revenue available for sharing by the three tiers of government since 2014 in March this year. They shared N299.75 billion for the month, representing the lowest total revenue for the three tiers since global oil price began to decline in late 2014. The allocation was N39.12 billion less than the N338.77 billion shared in February. Accountant General of the Federation, Ahmed Idris, said in his secretariat report at the end of the recent Federation Accounts Allocation Committee, FAAC meeting in Abuja that gross statutory revenue received for the month was about N232.62 billion, against N270.5 billion received in the previous month.

Labour

2016 June, SweetcrudeReports

Use modern technologies to check pipelines vandalism, oil theft —PENGASSAN

Vandalised oil pipeline SAM IKEOTUONYE

he Petroleum and Natural Gas Senior Staff Association of N i g e r i a , PENGASSAN, has charged the Federal Government and the multinational oil companies operating in the country to adopt modern technologies in checking pipelines vandalism and crude oil theft in the Niger Delta. President of the association, Mr. Francis Olabode-Johnson, who made the call in Calabar, said the technologies should be used in such a way that vandals could not access the pipelines. "Nigeria is losing a large percentage of its revenue due to the activities of the militants. "I want government and the multinational oil companies to use modern technologies in

checking pipelines vandalism and crude oil theft," he said. "We also expect the

managers of these pipelines to imbibe the culture of regular maintenance while

Nigeria is losing a large percentage of its revenue due to the activities of the militants

government lives up to its responsibility of providing security to these national asset,” Olabode-Johnson added. He appealed to the security agencies protecting the pipelines to be more resolute in carrying out the assignment. Decrying the recent resurgence of militancy and

oil pipelines vandalism in the Niger Delta, the PENGASSAN boss urged the Federal Government to tackle them. According to him, the fight against the scourge has not recorded the desired success and needed to be intensified as the act has continued.

Ajaokuta Steel to employ 15,000 technical staff, provide completed in three years. 500,000 indirect jobs He told the Kogi State Steering Committee on the

hen fully operational, the Ajaokuta Steel plant in Kogi State will employ 15,000 technical staff members and provide 500,000 indirect jobs, the company’s sole administrator, Engr. Joseph Onobere Isah, has said. According to him, the 500,000 jobs will encompass unskilled, semi-skilled and skilled manpower in the mines, transportation, downstream and upstream industries and other services. Isah stated that about $400 million would now be required to complete the steel plant which has been abandoned by successive governments in the country for over 20 years, adding that if this money was available from the Federal Government, the project would be

Revitalisation of Ajaokuta Steel plant set up by the state government that the project and its related projects would immensely benefit Kogi State. On the related projects, he said one of them is the rail line that would link Ajaokuta through Oturkpo to Onne port for bulk materials movement to Ajaokuta while the other would see coal from Okaba and Ogboyega coal deposits being moved to Ajaokuta.. “The direct impact of these gargantuan investments on the socio-economic life of Kogi State can therefore only be imagined as upstream, downstream and spin-off industries will spring up in the entire state and even to over 400-kilometre radius from Ajaokuta” Isah stated.

Labour

2016 June, SweetcrudeReports

Technicians at work

he Director G e n e r a l , National Power T r a i n i n g Institute of Nigeria, NAPTIN, Engr. Reuben Okeke, says the country needs 17,440 technical staff, including 6,000 engineers, to sustain the 40,000megawatts power generation capacity planned by the Federal Government. Okeke, who disclosed this while speaking in Abuja at the graduation of 143 power engineers trained under the NAPTIN Graduate Skills Development Programme, NGSDP, called for more support to expand the institute's capacity. He said, "Since we started NAPTIN in 2012, we have not been able to cross 1,000 graduates, but with more support we can attain that in the next five to 10 years." He also urged the federal

Nigeria needs 17,440 technical staff to sustain 40,000MW Since we started NAPTIN in 2012, we have not been able to cross 1,000 graduates, but with more support we can attain that in the next five to 10 years government to commit more funding to its infrastructure as it seeks to build 20 more schools and structures at its Abuja site to expand its capability, especially in training the over 12,000 craftsmen and artisans (nonengineers) for an advanced sector.

The NAPTIN boss, meanwhile, has disclosed that Nigeria and France will next month sign a €50m (about N11.15 billion) loan for the development and upgrading of the countries power training facilities. Okeke noted that the

loan, when accessed, would support NAPTIN in its Graduate Skill Development Programme, NGSDP, initiative, stressing that the programme was the answer to solving manpower shortage in the technical skills-set in Nigeria’s power equation. He said, “By next month, the President Muhammadu Buhari and Francois Hollande of France will be signing a loan agreement to get NAPTIN completely transformed, up to a tune of €50m. “Mindful of the fact that the success of the recent power sector reform will in part depend on the availability of a

Why Nigeria must grow local refining, stop fuel importation —TUC

he Trade Union Congress, TUC, has stressed the need for growing local refining of petroleum products and ensure an end to fuel importation. TUC's Rivers State chairman, Chika Onuegbu, stated this as he adduced reasons for the unions decision to opted out of the nationwide strike over government's hike of the price of petrol. He called for a better approach to the development of the oil and gas sector, he lamented that previous and current approach has not helped Nigeria in terms of ensuring selfsufficiency in petroleum products production. "If we truly love Nigeria, then we must seek for better alternatives that will grow the local refining capacity and stop the regime of importation and the subsidy with its

associated frauds," he said. Speaking on the recent strike embarked by labour to protest the increase in the pump price of petrol in the country, Onuegbu said TUC opted out of the strike after it had taken an impartial view of the situation and decided back the interest of the people and the survival and growth of the Nigerian oil and gas sector. Onuegbu explained that the petroleum subsidy programme was introduced in 1973 as a short-term measure aimed at assisting the citizens with payment of part of the cost of imported refined petroleum products, adding that rather than a short-term measure, the arrangement has now become a huge burden and a haven for corruption.

qualified workforce to meet the needs of the industry and the corresponding need to structure its operations to reflect the needs of the private sector, NAPTIN is currently working with a leading international consulting outfit through funding support of the Agence Francaise de Developpement (AFD) to evolve a new strategic plan.” According to him, the plan does not only encompass the training needs of the new private entrants, but also their participation in the delivery process. The NAPTIN boss added that with the assistance of AFD, Nigeria would become a hub for power sector professional development across the African continent. Meanwhile, the Permanent Secretary, Ministry of Power, Works and Housing, Engr. Louis Edozien, has said attaining the 10,000mw promised by the president recently required a huge need for skilled capacity. He enjoined the graduates to apply the attitude and the knowledge acquired to contribute their quota to attain the benchmark.

Labour

2016 June, SweetcrudeReports

Labour expresses worry over oil sector problems ...Alleges govt insensitivity

Oil workers MKPOIKANA UDOMA, Port Harcourt

he Trade Union Congress of Nigeria, TUC, has expressed worry over "increasing problems in the nation’s oil and gas sector", warning that the sector was headed for an imminent collapse if the problems were not quickly addressed. The problems, according to the association, has led to the loss of some 150,000 direct and indirect jobs between 2013 and February

2016. Raising the alarm recently in Port Harcourt, chairman of TUC in Rivers State, Mr. Chika Onuegbu, said recent discoveries of oil and gas in the Gulf of Guinea and other regions of the world, the application of new technology making hitherto unreachable reserves reachable and massive investment in alternative forms of energy globally should worry Nigeria and force a sense of urgency on the political class to quickly fix the oil and gas industry, the main source of revenue for the country.

"My members in the oil and gas sector - the Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, has expressed worry over increasing problems in the nation’s oil and gas sector which has led to the loss of some 150,000 direct and indirect jobs between 2013 and February 2016. "Some of these challenges could be categorised into global and local. The global challenges include the steep fall in international

Siemens to sack 2,500 workers

erman industrial group Siemens says it plans to cut about 2,500 jobs related to the oil and gas, metals and mining sectors – mostly in Germany – while pursuing a hiring drive to boost its digital industrial expertise. Siemens said it would realign its two business units Large Drives and Process Solutions, affecting about 2,000 jobs in Germany, mainly in Bavaria. It added that it would keep its current sites. Worldwide, Siemens said it planned to hire at least 25,000 new employees in each of the coming years, thanks to its announced increase of more than 1 billion euros ($1.1 billion) in research and development, productivity and sales. About 3,000 of these would be in Germany, it said.

crude oil price from some $115 in June 2014 to some $40 now. The local challenges include the inability of successive governments since 2000 to conclude the reforms in the oil and gas sector and pass the Petroleum Industry Bill (PIB) into law," Onuegbu stated. He continued: "The nonpassage of the PIB has cost the country some $80billion in lost investments. Even the 8th Senate on April 26th 2016 suspended debate on the new Petroleum Industry Bill as most senators kicked against

its second reading on the grounds that copies of the bill were not made available to them. "Even the PENGASSAN National PIB Committee which is chaired by me was also surprised to learn that the copy of the PIB we just worked on between February and March 2016 is not the copy at the National Assembly. So the PENGASSAN National PIB Committee will have to painfully start all over again".

Maersk Oil to axe 40 jobs

enmark’s Maersk Oil will cut 40 jobs in Copenhagen, Aberdeen and Stavanger in the United Kingdom due to the low oil price, the company has said. Maersk Oil, a unit of conglomerate A.P. Moller-Maersk, said despite significant cost cuts in the past 18 months, the oil price in the first quarter of 2016 continued to put pressure on earnings and led to a small loss in the quarter.

“We must continue to balance the realities of the tough market conditions with the growth agenda for Maersk Oil,” Chief Executive Jakob Thomasen said in a statement. Maersk Oil said the 40 jobs would be cut in its growth division as a result of lower exploration activity and it comes on top of efforts to reduce costs by 20 percent across the business by end of 2016.

Solid Mineral

2016 June, SweetcrudeReports

Ajaokuta Steel complex

US firm Morgan Stanley to provide $1bn lifeline for Ajaokuta Steel CHUKS ISIWU

S multinational financial s e r v i c e s corporation, Morgan Stanley, would be providing $1 billion for the revival of Nigeria’s moribund Ajaokuta Steel plant. This is according to a proposal to the Federal Government by the bank to that effect. Details of the development are still sketchy, but SweetcrudeReports gathered that the Morgan Stanley proposal is part of several initiatives being considered by the Federal Government towards ensuring the multiplant Ajaokuta Steel complex in Kogi State comes back to life after over two decades of abandonment by successive governments in the country. Specifically, the US company’s proposal is with the Bureau of Public Enterprises, BPE, which allegedly is closely reviewing it alongside other proposals on the same issue of Ajaokuta Steel’s revival. If all work well, the US

financial institution would be be providing the funding for Ajaokuta Steel through its steel arm, which has provided leverage for steel industry development across the globe. Through timely, in-depth analysis of companies, industries, markets, and world economies, Morgan Stanley has earned an outstanding reputation in the area of investment research. A recent report by Morgan Stanley analyst, Evan L. Kurt, on the steel sector indicates positive momentum for steel during the year.

Industry watchers believe the positive outcome of the company’s research on the potentials of Ajaokuta Steel and the predicted positive momentum for the steel sector during the year may have informed its readiness to provide funding for the beleaguered project. Only recently, Ukraine announced its readiness to assist in the resuscitation of the Ajaokuta Steel project, with a promise to provide $1 billion for the project. T h e U k r a i n i a n

Ambassador to Nigeria, Valeriy Aleksandruk, who announced this in Abuja, said the Ukrainian company that b u i l t t h e p l a n t , Tiajpromexport, TPE, had already made a proposal to the Federal Government on its willingness to revive the plant. He said the steel complex has a lot of potential which Ukraine wanted to take advantage of, adding that meetings had already been held with relevant stakeholders in Nigeria for the realisation of the planned

takeover of the plant. Aleksandruk said Ukraine has a good relationship with Nigeria, especially in economic and trade investments, noting that there is a big Nigerian community in Ukraine. Confirming the Morgan Stanley proposal, BPE’s acting Director General, Dr. Vincent Akporaire, said it was being reviewed by the Bureau as he also assured that the Ukrainian Government’s request would be reviewed by the agency.

Govt out with master-plan for solid minerals exploration

resident Muhammadu Buhari says the government would soon roll out a master plan for the exploration of the 44 solid minerals identified to be available in commercial quantity in the country. It is part efforts to fully develop the solid minerals sector, which the government has declared the new frontier of the nation’s economic development. According to him, his administration would do everything possible to move Nigeria’s economy away from dependence on crude oil. He acknowledged that the development of the solid minerals sector, particularly the iron ore sub-sector, would help create more jobs, as well as conserve the over $3 million dollars being expended on the importation of

steels into the country. According to him also, in order to achieve the objective, the government will concentrate on the development of the collapsed infrastructures, such as rail and road transportation, among others. “Our regime also intends to embark on industrialization through processing of the available mineral resources, unlike what is happening in the past when only export raw material without value addition. “Current trend in Cement sector is an eye opener, as before now, Nigerian was an importer of Cement, but with deliberate plans put in place, we have moved to become a net exporter of the commodity,” he stated.

2016 June, SweetcrudeReports

Solid Mineral

Nigeria not yet a mining nation —Expert Miners

he President of the Nigerian Mining and Geosciences Society, NMGS, Prof. Gbenga Okunola, asserted during a recent mining conference that the country was not yet in the cadre of what would be regarded as mining countries. He said, “Nigeria is not yet a mining country. It is, however, a potentially huge mining destination with the sector still in its formative form.” According to Okunola, the prospects for the solid minerals sector are huge and attractive. “If one considers the fact that the percentage of exploration expenditure in the West African region ranges from 5-7 percent, the role of Nigeria within this regional context is far below 0.5 percent. From a historical perspective, the exploitation

of some of the minerals occurring in Nigeria contributed over 12 percent to the nation’s GDP between 1965-1975. The NMGS leader noted that despite the current seeming moribund situation, Nigeria has founded over 40 companies involved in mining which can be brought back into production depending on the right market and pricing conditions to justify their viability. The opportunities for the industry are huge. Globally, the recent growth in the mining sector has been unprecedented and has been largely driven by China. The same pattern, Okunola noted, is beginning to occur in other emerging and fast developing nations. “There is no doubt that all countries have gone or will go through a metal intensive stage in their economic development at an

The prospects for the solid minerals sector are huge and attractive, if one considers the fact that the percentage of exploration expenditure in the West African region ranges from 5-7 percent increasing rate of transition than experienced in the past,” he said. Growth in exploration and mining interest in West Africa, in particular, has been encouraged by the depletion of easily accessible mineral deposits in Western Europe and the

United States. Between 2015 and 2020, many new mines are scheduled to commence production in Liberia, Guinea, Sierra Leone and Mauritania. These mines are targeting a combined output of 600 metric tons a year. Experts believe that as

Ministry plans automated device for minerals verification

he Ministry of Solid Minerals Development is planning to install automated device to enable investors to verify minerals available in Nigeria, Dr. Kayode Fayemi, the minister in charge of the ministry, has said. Fayemi announced this at a forum in Abuja, stating that the device would enable both local and foreign mining investor to verify types of minerals, locations and quantity.

"The automated device will help, especially the foreign mining investors, to search and get first hand information of minerals available or if already occupied by another miner," he said. According to him, the ministry is working out modality to establish Mining Cadestre Office in the six geopolitical zones for easy issuance of licence and to verify activities of licensees. "The states are agitating for licence offices, it is our vision to have cadastre offices in the six zones, but all of these

have to do with funding and institutional framework," he disclosed. He, however, said the ministry had also commenced census of informal miners across the country to know their numbers and to encourage them to form cooperatives to enable government to support them. Said the minister: "Enumeration of people that considered themselves as miners without licence is ongoing in all the states to know the numbers of people we

are to assist. "We know that not all of them will register; we are working with all the states to develop database to register artisanal miners." On the establishment of mining desk in all banks, he said the plan would help to move the sector forward and boost the Gross Domestic Products, GDP, adding: "We want to establish mining desk, just the way agriculture has desks in all banks; banks have head of agriculture, oil and gas.”

populous countries like China and India go through their development phase, the effects of mineral and metal demands is drastic. New mines will be needed and will be particularly located in remote developing countries. In recent years, huge investments have been made in Africa and these are likely to escalate in the next ten years. Several notable companies have recently started operations in Africa countries such as Guinea (Rio Tinto, Sumadion project, Sable Mining), Liberia (BHP Billiton, Garmu Mine), Mauritania (Glencore Xstraila, Zanoga, and Guelb El Aony projects), Sierra Leone (Lowdon Mining, Marianga mine). Okunola believes the opportunities for investments in the solid minerals sector in Nigeria are enormous bearing in mind the expansive areas of unexplored mineral potential. “Glaring realities show that less than 25 percent of the 900,000 plus square kilometers of Nigeria has mapped on the minimally acceptable scale of 1:100,000 since 1909. It is to be noted that despite the slow pace with largely haphazard and old methods, still over 44 major mineral types of equal if not more tonnage then coal and tin are known, with not less than 10 of them being of world class status,” he noted.

2016 June, SweetcrudeReports

Solid Mineral

Govt solicits Australia’s support for mining sector Fayemi

OSCARLINE ONWUEMENYI

he Federal Government has solicited the support of the Australian government to help develop the nation's mining and minerals sector towards realising the desire of the present administration to diversify the economy through the mining sector. Minister for Solid Minerals Development, Dr. Kayode Fayemi, made the request, recently, when the Australian High Commissioner to Nigeria, Mr

Paul Lehmann, paid him a courtesy call and discussed how best to assist the Nigerian mining sector. Fayemi, while appreciating the role played by the High Commissioner’s predecessor in

the promotion of NigerianAustralian relations in the mining sector, and the support of almost one million dollars in the area of research, confirmed that a number of ministry officials

We need to rediscover our roots which interestingly is in mining in Jos, Enugu and other places

benefited from exchange programmes, study tours as well as graduate programmes up to the doctorate level. He also mentioned the support of the Geological Surveys, Artisanal and Small Mining Department and the Mining Cadastre Office. On the need to upgrade the mining laboratory in Kaduna, he explained that rather than send raw mined minerals to Europe and South Africa, the quality of such minerals can be enhanced if certified here in Nigeria before being exported. The Minister stressed the

need to learn from Australia, particularly, on mining issues at a time when government is refocusing its attention in line with the downward trend in global commodity prices and in the oil and gas sector. He said, “For us in Nigeria, it’s a much more compelling argument to diversify our focus and revenue base because oil has been the king for so long and we’ve been blinded by it. We need to rediscover our roots which interestingly is in mining in Jos, Enugu and other places.”

Labour decries neglect of solid minerals, others

rganised labour in the country has decried the nation's overdependence on oil to the detriment of the solid minerals sector and other sectors that could contribute appreciably to the nation's economy. The Nigeria Labour Congress, NLC, and the Trade Union Congress, TUC, are united in the condemnation of the situation. "Nigeria is currently a mono-product economy and hence vulnerable to the shocks in international crude oil market. Despite the existence of solid minerals deposits, fertile land, and a population of over 170 million people, the country

continues to ignore agriculture, development of solid minerals, knowledge economy and manufacturing. "The result is that when crude oil price or production falls, the Nigerian economy bleeds. Reducing the vulnerability of the Nigerian economy to commodity prices and strengthening its capacity to absorb and overcome severe shocks while supporting strong growth- that is strengthening Nigeria’s economic resilience, should be the key policy priority of governments at all levels," the labour unions said in a statement in Port Harcourt. Chairman of the TUC in Rivers State, Mr. Chika Onuegbu, maintained that it was important for the government at all levels to

listen to the people and their cries, and take necessary actions needed to revive the Nigerian economy.. Onuegbu warned that failure of government to strengthen the country's economy would spell doom for the nation and may trigger a revolution. According to him, "Except very drastic actions are taken to fix the Nigerian economy, more jobs will be lost. More workers will be owed salaries. More students protests will take place and if nothing is done, then ultimately a revolution may ensue and our democracy will be threatened to its very foundations".

Freight

2016 June, SweetcrudeReports

Peterside welcomes EU £20m investment in Gulf of Guinea … Seeks military-led patrol to curb piracy KUNLE KALEJAYE

he Director General of the N i g e r i a n M a r i t i m e Administration and Safety Agency, NIMASA, Dr. Dakuku Peterside, has welcomed the plan by the European Union, EU, to invest over 20 million euros on maritime security in the Gulf of Guinea. Receiving a delegation of EU consultants led by Mr. Chris Hedley at the NIMASA headquarters in Lagos, Peterside commended the union for the initiative and called on other partners to collaborate with NIMASA and Nigeria to eradicate piracy and other criminal activities in the Gulf of Guinea. “More than ever, Nigeria is better positioned to take ad vantage of strategic partnerships to make the country the hub of maritime activities in West and Central Africa,” he said. The NIMASA director general, who observed that the Gulf of Guinea is very strategic to world trade, also the delegates of the agency’s determination to tackle the menace of crime at sea in collaboration with relevant stakeholders. Earlier in his address, Mr. Hedley said the EU planned to use the funds in d e v e l o p i n g a n d strengthening legislations, building capacity in maritime security and developing the necessary Information Technology for member nations with a view to eradicating piracy and other related crimes in the Gulf of Guinea. In a related development, Peterside, the NIMASA director general, has expressed his desire for a military-led patrol of the Nigerian maritime domain to curb the rising incidence of piracy in the Gulf of Guinea. He said the rising issues of piracy has affected the economic fortunes of the country and called on the military to initiate a joint patrol of the maritime domain with a view to

Peterside curbing this trend. Peterside stated this when he led some members of the agency's management on a working visit to the Chief of the Naval Staff, CNS, Vice Admiral Ibok Ete-Ibas and the Chief of Army Staff, COAS, Lt. General Tukur Buratai at the Defence Head Quarters in Abuja. Addressing the Service Chiefs separately, Peterside acknowledged the gallantry of

officers and men of the Nigerian Armed Forces in the fight against insurgency. He noted that maritime security was a national and international obligation of all stakeholders as he called on the Nigerian Navy to continue with its good job of fighting piracy. He also assured the CNS of NIMASA’s resolve to strengthen the existing

M e m o r a n d u m o f Understanding with the Navy in order to eradicate piracy and other criminal activities on Nigerian waters. Responding, Vice Admiral Ete-Ibas stated that, as a strategy to arrest piracy, the Nigerian Navy had deployed boat houses at the entry points of the creeks and was in the process of inaugurating a surveillance system developed by the Office of the

National Security Adviser to increase its domain awareness. A t t h e A r m y Headquarters, Lt. General Buratai pledged the support of the Amphibious Brigade of the Nigerian Army to collaborate with NIMASA and other stakeholders to maintain security on Nigerian waters.

Rivers govt moves to modernise marine transport

n a bid to develop a modern marine transport sector, the Rivers State Government has commenced the reconstruction of the ATC Jetty in Okrika. The government is also reconstructing the Bille and Bonny Jetties in Port Harcourt. This is in line with the New Rivers Vision

Development Blueprint of Governor Nyesom Wike which seeks to create a safe and secure marine transportation system across the riverine communities of the state. Governor Wike, during an inspection visit to the Bille Jetty in Borikiri, Port Harcourt, directed the Ministry of Transport to work with relevant

technocrats to revive dilapidated jetties across the state. The governor, represented by Mr. Akie Fubara, the commissoner of Transport, noted that his administration remained committed to ensuring that Rivers people travel in safety to their respective communities as they engage in their socio-economic

activities. Mr. Fubara also inspected the ATC jetty reconstruction project at Okrika, expressing satisfaction that the contractor has commenced the reconstruction of the strategic jetty with the deployment of necessary equipment and materials.

2016 June, SweetcrudeReports

Freight

Ship undergoing repairs

Nigeria loses N160bn yearly to foreign ship repairs —Expert MKPOIKANA UDOMA

igeria loses over $500 million (about N160 billion) yearly due to the repair of local Nigerian ships outside the country, according to a maritime expert, Engr. Greg Ogbeifun. Ogbeifun, who is the President of Ship Owners Association of Nigeria, SOAN, stated that in the face of this development, there was need for Nigerian ship owners to begin to patronise Nigerian dockyards rather than taking their ships outside the country for repair works which could be handled by the indigenous dockyards. In a paper titled: "Taking Nigeria’s Economy to its Dream Height; Shipping Sect or in Persp ect iv e” presented at an event in Port Harcourt, Ogbeifun, who is also the Chief Executive Officer of Starz Marine and Engineering Ltd, explained that it was cheaper and safer to repair ships in Nigeria rather than overseas. He called on the Federal

Government to assist and revive the local shipyards to compete favourably with their counterparts abroad and to generate more revenue for the country. Stressing the need for the Federal Government to

support indigenous shipowners to procure ships and train cadets on sea time experience, the SOAN president maintained that if Nigerian shipowners were given the opportunity, they would train more

cadets, thereby creating more job opportunities for the teeming youths of the country. He regretted that instead of the Federal Government providing ships for the training of cadets on sea time

experience, the Nigerian Maritime Administration and Safety Agency, NIMASA, "was busy awarding sea time training contracts to those who did not have anything to do with shipping".

NIMASA to push for review of Cabotage Act

he current management of the Nigerian Maritime Administration and Safety Agency, NIMASA, will not only engender the development of local content in the maritime industry but, also push for the review of the Cabotage Act to make it more beneficial to Nigerians, according to the Director General of the agency. Dr. Dakuku Peterside, who decried the situation whereby all of Nigeria's oil and gas resources are freighted by foreign vessels, urged International Oil Companies to engage eligible Nigerians in the lifting of the country's hydrocarbons and promised to assist in building the capacity of indigenous operators to participate more actively in the business. Presenting a paper titled "Local Content And Cabotage Regime Implementation in the Nigerian Oil And Gas Industry As A Cost Reduction Strategy", he called on

investors to commit more resources to building local content in the maritime industry, maintaining that it was in the interest of operators to build local capacity as an investment in this regard would be mutually beneficial to government and the operators. Peterside, who described the maritime sector as the soul of the country's economy at a workshop organised by the Petroleum Technology Association of Nigeria, PETAN, on the sidelines of the 20i6 Offshore Technology Conference, OTC, in Houston, Texas, observed that the oil and gas sector is often referred to as the heart of the Nigerian economy without considering the fact that the maritime sector remains the soul of the economy without which oil and gas exploration may just be in vain. According to him, "Apart from the fact that most of the oil and gas exploration, which is the major revenue earner of the country is done in the maritime

2016 June, SweetcrudeReports

Freight

Cargo vessel

Nigeria to maintain high standards for vessels …Woos Norwegian govt for 'mutually beneficial partnership’

igeria is committed to continue to set high standards for vessels and oil platforms operating within its territorial waters in line with the Safety of Life at Sea Convention, SOLAS ’74, according to the Director General of the Nigerian Maritime Administration and Safety Agency, Dr. Dakuku Peterside. Peterside stated this during an engagement with officials of the American Bureau of Shipping, ABS, Asia Pacific region, led by the

President and Chief Operating Officer, Mr. Derek Novak from Singapore. The NIMASA boss noted that Nigeria was not a dumping ground for substandard vessels and solicited the support and cooperation of classification societies such as ABS to establish and maintain high technical standards for construction and maintenance of vessels and other maritime structures. He said the maritime sector which is the facilitator of the national economy in Nigeria is growing at a rapid rate and therefore needs all the support

it can get. He advocated for regular ship survey to ensure compliance with set standards and assured the delegation that it is one of the priorities of the new administration in NIMASA. In his remarks, Mr. Derek Novak said ABS has been working with Nigeria for a long time and that the Bureau will continue to maintain the high standards for which the ABS is known. He promised to work with his counterpart in West and Central Africa so that NIMASA can benefit from

some of the training opportunities ABS offers. Novak expressed optimism that Nigeria is properly positioned to emerge as the shipping power house of West and Central Africa if the country puts its house in order and builds on its infrastructural and human capacity. He also identified Singapore as a great maritime nation from which Nigeria should seek closer ties. Thomas Tan, the Vice President of ABS, Asia Pacific region was also at the meeting. In another development,

Lagos assures investors of safe haven in Lekki Free Zone

he Lagos State Government has assured prospective investors at the Lekki Free Zone of its commitment to guaranteeing a safe haven for all investment in the area. The state commissioner for Commerce, Industry and Cooperatives, Rotimi Ogunleye disclosed this in Lagos, saying the government has overhauled the security network in the area in order to guarantee a safe haven for investment. According to him, the government is also engaging the host communities to ensure a sustainable cordial relationship with investors in the zone. Ogunleye noted that N1.6 billion has been released by the state government as part of its equity contribution in the

Lekki Free Zone Development Company, LFZDC, to boost the ongoing infrastructural development as well as encourage investors’ participation in the project. He hinted that the World Bank has recently listed the Lekki Free Zone as the fastest growing Free Zones in the world, adding that the products from the zone would be compliant with international standards as they would go through standardisation laboratories. The commissioner maintained that the LFZ project, which remains the flagship of the state government's industrial development initiative, was conceptualised to provide enabling environment for industries to operate as well as attract both local and foreign direct investments into the state.

NIMASA says it is eager to partner with the Norwegian government for mutual benefit that would propel t h e g r o w t h a n d development of the maritime industry in Nigeria. Peterside stated this as he played host to the Norwegian ambassador to Nigeria, Mr Rolf Ree, at the NIMASA head office in Lagos. Maintaining that the agency required "vertical and horizontal partnership to grow the Nigerian maritime sector," Peterside described Norway as "a great maritime nation which has earned global acclaim as a complete maritime cluster that is driven by technological development". He expressed Nigeria’s readiness to partner with the Norwegian government and its maritime authority, saying: “Norway has a lot to benefit from Nigeria as we are a major player in Africa especially in the hydrocarbon trade. "And the country (Nigeria) has a lot to benefit from Norway in the areas of expertise and technology needed to develop the sector. "To this end, the agency (NIMASA) is prepared to enter into a partnership, provided it protects Nigeria's interest and it is in accordance with our laws”.

Motoring

2016 June, SweetcrudeReports

Ford recalls Ford F-150, Explorer, Mustang, Lincoln Navigator, more

ord Motor C o m p a n y issued five recalls today, with most affected vehicles being Fordmodel trucks and SUVs. Combined, the recalls affect roughly 285,000 vehicles in the U.S., Canada, and Mexico. If you believe that you own one of the vehicles listed below, we encourage you to call Ford Customer Service at 800-392-3673 or Lincoln Customer Service at 800-521-4140 for additional details. Recall notices will be sent to owners of affected vehicles by mail. RECALL #1: 2011-2012 Ford F-150, 2012 Ford Expedition, Ford Mustang, and Lincoln Navigator UNITS AFFECTED: 201,900, including 184,000 in the U.S. and 17,900 in Canada This recall stems from a transmission problem—specifically, an issue with the output speed sensor on the transmission’s lead frame. The underlying problem appears rooted in the software associated with the powertrain control module, which could cause vehicles to downshift suddenly. According to Ford:

“Under certain conditions, the transmission controls could force a temporary downshift into first gear. Depending on the speed of the vehicle at the time of the downshift, the driver could experience an abrupt speed reduction that could cause the rear tires to slide or lock up. This condition could result in loss of vehicle control, increasing the risk of a crash.” CHECK OUT: Jeep Renegade vs-kiasoul-compare-cars” Soul: Compare Cars Three accidents have been potentially linked to the problem, but no injuries. Ford says that dealers will inspect the powertrain control module and upgrade the software if there are no diagnostic trouble codes found. The upgrade will prevent the vehicles from downshifting into first gear if a fault with the output speed sensor takes place. Ford also says that it will replace the lead frame on vehicles that have logged fewer than 150,000 miles. The recall is limited to vehicles equipped with 6R80 transmissions that were manufactured on the following dates: 2011-2012 Ford F-150 vehicles built at Dearborn Assembly Plant and Kansas City Assembly Plant between August 19, 2011 and March 9, 2012·2012 Ford Expedition vehicles built at Kentucky Truck Plant between August 19, 2011 and December 19, 2011·2012 Ford Mustang vehicles built at Flat Rock Assembly Plant between August 19, 2011 and February 21, 2012·2012 Lincoln Navigator vehicles built at Kentucky Truck Plant between August 19, 2011 and December 17, 2011 RECALL #2: 2014-2015 Ford Explorer and Ford Police Interceptor Utility CONTINUES ON PAGE 39

2016 June, SweetcrudeReports

Motoring

Ford recalls Ford F-150, Explorer, Mustang, Lincoln Navigator, more CONTINUED FROM PAGE 38 UNITS AFFECTED: 81,036, including 75,364 in the U.S., 4,615 in Canada, and 1,057 in Mexico This recall is meant to address a problem with the SUVs’ suspension systems. Ford says poor weld quality could cause the left and right rear suspension toe links to crack. Depending on the severity of the fracture, owners might hear noise coming from the rear of the vehicle, have difficulty steering, or experience loss of steering control. READ: Is Minnesota’s alcohol breath test law legal? We’re about to find out Ford has received a report of one accident and one injury related to the problem. The recall affects vehicles built on the following dates: 2014-2015 Ford Explorer vehicles built at Chicago Assembly Plant between January 17, 2014 and May 31, 2014·2014-2015 Ford Police Interceptor Utility vehicles built at Chicago Assembly Plant between January 21, 2014 and May 13, 2014 The repair will involve dealers replacing the left and right rear suspension toe links and aligning the rear suspension. RECALL #3: 2007-2012 Ford Flex, Ford Taurus, Lincoln MKS, and Mercury Sable UNITS AFFECTED: 199, all registered in the U.S. This small recall is meant to repair a problem with the cars’ driver-side airbag. According to Ford, a crucial element of that device may be missing, and as a result, the airbags might not deploy as intended during collisions. Thankfully, Ford knows of no accidents or injuries related to the problem. The recall affects vehicles built at Chicago Assembly Plant and Oakville Assembly between December 13, 2007 and October 6, 2011. Dealers will replace the driver-side airbag module at no cost to owners. RECALL #4: 2016 Ford Fusion UNITS AFFECTED: 39, all registered in the U.S. The vehicles affected by this recall may suffer from a problem with the driver seat track assembly. According to Ford, the bracket that mounts the seat to the track rail might not have been properly welded, which could increase the risk of injury to

drivers. However, Ford says that it’s received no reports of associated accidents or injuries. ALSO SEE: Long-Term Test Drive: Which 2016 Honda Pilot trim level should you buy? The recall is limited to vehicles manufactured at Hermosillo Assembly Plant between March 10, 2016 and March 16, 2016. Dealers will replace the Fusion’s driver seat track assembly at no charge. RECALL #5: 2016 Ford FSeries Super Duty UNITS AFFECTED: 2,596, including 2,288 in the U.S., 271 in Canada, and 37 in Mexico Ford says that the sidewalls of tires on some of these vehicles might have been damaged during the assembly process. If the damage was severe enough, the tires could rupture while the vehicle is in motion, increasing the risk of a crash. However, Ford has no reports of accidents or injuries related to the problem. The recall affects vehicles manufactured at Kentucky Truck Plant between April 5, 2016 and April 10, 2016. Ford says that dealers will inspect the tires on those vehicles for inboard sidewall damage and replace tires, as necessary. Less Ford Motor Company issued five recalls today, with most affected vehicles being Fordmodel trucks and SUVs. Combined, the recalls affect roughly 285,000 vehicles in the U.S., Canada, and Mexico. If you believe that you own one of the vehicles listed below, we encourage you to call Ford Customer Service at 800-3923673 or Lincoln Customer Service at 800-521-4140 for additional details. Recall

notices will be sent to owners of affected vehicles by mail. while the vehicle is in motion, increasing the risk of a crash. However, Ford has no reports of accidents or injuries related to the problem.

The recall affects vehicles manufactured at Kentucky Truck Plant between April 5, 2016 and April 10, 2016. Ford says that dealers will inspect the tires on those vehicles for inboard sidewall damage and replace tires, as necessary.

Technology

2016 June, SweetcrudeReports

Remotely-operated underwater vehicles

remotely operated underwater vehicle (ROV) is a tethered underwater mobile device. This meaning is different from remote control vehicles operating on land or in the air. ROVs are unoccupied, highly maneuverable, and operated by a crew aboard a vessel. They are common in deep water industries such as offshore hydrocarbon extraction. They are linked to a host ship by a neutrally buoyant tether or, often when working in rough conditions or in deeper water, a load-carrying umbilical cable is used along with a tether management system (TMS). The TMS is either a garagelike device which contains the ROV during lowering through the splash zone or, on larger work-class ROVs, a separate assembly which sits on top of the ROV. The purpose of the TMS is to lengthen and shorten the tether so the effect of cable drag where there are underwater currents is minimized. The umbilical cable is an armored cable that contains a group of electrical conductors and fiber optics that carry electric power, video, and data signals between the operator and the TMS. Where used, the TMS then relays the signals and power for the ROV down the tether cable. Once at the ROV, the electric power is distributed between the components of the ROV. However, in highpower applications, most of the electric power drives a high-power electric motor which drives a hydraulic pump. The pump is then used for propulsion and to power equipment such as torque tools and manipulator arms where electric motors would be too difficult to implement subsea. Most ROVs are equipped with at least a video camera and lights. Additional equipment is commonly added to expand the vehicle’s capabilities. These may include sonars, magnetometers, a still camera, a manipulator or cutting arm, water samplers,

Remotely-operated vehicle and instruments that measure water clarity, water temperature, water density, sound velocity, light penetration, and temperature. History In the 1970s and ’80s the Royal Navy used “Cutlet”, a remotely operated submersible, to recover practice torpedoes and mines. RCA (Noise) maintained the

Remotely-operated vehicle

“Cutlet 02” System based at BUTEC ranges, whilst the “03” system was based at the submarine base on the Clyde and was operated and maintained by RN personnel. The U.S. Navy funded most of the early ROV technology development in the 1960s into what was then named a “CableControlled Underwater Recovery Vehicle” (CURV).

This created the capability to perform deep-sea rescue operation and recover objects from the ocean floor, such as a nuclear bomb lost in the Mediterranean Sea after the 1966 Palomare B-52crash” B52 crash. Building on this technology base; the offshore oil & gas industry created the work-class ROVs to assist in the development of offshore oil fields. More than a decade after they were first introduced, ROVs became essential in the 1980s when much of the new offshore development exceeded the reach of human divers. During the mid-1980s the marine ROV industry suffered from serious stagnation in technological development caused in part by a drop in the price of oil and a global economic recession. Since then, technological development in the ROV industry has accelerated and

today ROVs perform numerous tasks in many fields. Their tasks range from simple inspection of subsea structures, pipelines, and platforms, to connecting pipelines and placing underwater manifolds. They are used extensively both in the initial construction of a subsea development and the subsequent repair and maintenance.

ubmersible ROVs have been used to locate many historic shipwrecks, including the RMS Titanic” SS Central America” In some cases, such as the Titanic and the SS Central America, ROVs have been used to recover material from the sea floor and bring it to the surface While the oil and gas CONTINUES ON PAGE 41

2016 June, SweetcrudeReports

Technology CONTINUED FROM PAGE 40

industry uses the majority of ROVs, other applications include science, military, and salvage. The military uses ROV for tasks such as mine clearing and inspection. Science usage is discussed below. Construction Work-class ROVs are built with a large flotation pack on top of an aluminium chassis to provide the necessary buoyancy to perform a variety of tasks. The sophistication of construction of the aluminum frame varies depending on the manufacturer’s design. Syntactic foam is often used for the flotation material. A tooling skid may be fitted at the bottom of the system to accommodate a variety of sensors or tooling packages. By placing the light components on the top and the heavy components on the bottom, the overall system has a large separation between the center of buoyancy and the center of gravity: this provides stability and the stiffness to do work underwater. Thrusters are placed between center of buoyancy and center of gravity to maintain the attitude stability of the robot in maneuvers. Various thruster configurations and control algorithms can be used to give appropriate positional and attitude control during the operations, particularly in high current waters.

hrusters are usually in a balanced vector configuration to provide the most precise control possible. Electrical components can be in oil-filled water tight compartments or oneatmosphere compartments to protect them from corrosion in seawater and being crushed by the extreme pressure exerted on the ROV while working deep. The ROV will be fitted with cameras, lights and manipulators to perform basic work. Additional sensors and tools can be fitted as needed for specific tasks. It is common to find ROVs with two robotic arms; each manipulator may have a different gripping jaw. The cameras may also be guarded for protection against collisions. An ROV may be equipped with Sonar and LiDAR equipment. The majority of the workclass ROVs are built as described above; however, this is not the only style in ROV building method. Smaller ROVs can have very [4]

Remotely-operated underwater vehicles During August 19, 2011, a Boeing-made robotic submarine dubbed Echo Ranger was being tested for possible use by the U.S. military to stalk enemy waters, patrol local harbors for national security threats and scour ocean floors to detect environmental hazards As their abilities grow, smaller ROVs are also increasingly being adopted by navies, coast guards, and port authorities around the globe, including the U.S. Coast Guard and U.S. Navy, Royal Netherlands Navy, the Norwegian Navy, the Royal Navy and the Saudi Border Guard. They have also been widely adopted by police departments and search and recovery teams. Useful for a variety of underwater inspection tasks such as explosive ordnance disposal (EOD), meteorology, port s e c u r i t y , m i n e countermeasures (MCM), and maritime intelligence, s u r v e i l l a n c e , reconnaissance (ISR).

Remotely-operated vehicle different designs, each appropriate to its intended task. Larger ROVs are commonly deployed and operated from vessels, so the ROV may have landing skids for retrieval to the deck. Military Use ROVs have been used by several navies for decades, primarily for minehunting Remotely-operated vehicle moving in the sea and mine breaking. In October 2008 the U.S. PBXN-103 high explosive Undersea Vehicle (UUV) is Navy began to replace its f o r n e u t r a l i z i n g designed for covert mine manned rescue systems, based bottom/ground mines. countermeasure capability on the Mystic DSRV and · and can be launched from support craft, with a modular he MP3 is a moored certain submarines system, the SRDRS based on a mine cable gripper The U.S.Navy’s ROVs are tethered, unmanned ROV and a float with the only on Avenger-class mine called a pressurized rescue MP2 bomblet combination countermeasures ships. After module (PRM). This followed to neutralize moored mines the grounding of USS and years of tests and exercises underwater. decommissioning of USS with submarines from the The charges are Avenger_(MCM-1)”(MCM-1), fleets of several nations detonated by acoustic and USS only 11 US The US Navy also uses an signal from the ship. Minesweepers remain ROV called AN/SLQ-48 Mine The AN/BLQ-11 operating in the coastal Neutralization Vehicle (MNV) autonomous Unmanned waters of Bahrain (USS for mine warfare. It can go 1000 yards away from the ship due to a connecting cable, and can reach 2000 feet deep. The mission packages available for the MNV are known as MP1, MP2, and MP3 The MP1 is a cable cutter to surface the moored mine for recovery exploitation or Explosive Ordinance Disposal (EOD). The MP2 is a bomblet of 75 lb polymer-bonded explosive

The MP3 is a moored mine cable gripper and a float with the MP2 bomblet combination to neutralize moored mines underwater

Science Use ROVs are also used extensively by the scientific community to study the ocean. A number of deep sea animals and plants have been discovered or studied in their natural environment through the use of ROVs: examples include the jellyfish Bumpy and the eel-like halosaurs. In the USA, cutting edge work is done at several public and private oceanographic institutions, including theMonterey Bay Aquarium_Research_Instit ute” Bay Aquarium Research Institute (MBARI), the Woods Hole Oceanographic Institution (WHOI) (with Nereus), and theUniversity of Rhode Island / Institute for Exploration (URI/IFE). The picture to the right shows the behavior and microdistribution of krill under the ice of Antarctica.

cience ROVs take many shapes and sizes. Since good video footage is a core component of most deep-sea scientific research, research ROVs tend to be outfitted with high-output lighting systems and broadcast quality cameras. Depending on the research being conducted, a science CONTINUES ON PAGE 42

2016 June, SweetcrudeReports

Technology CONTINUED FROM PAGE 41

ROV will be equipped with various sampling devices and sensors. Many of these devices are one-of-a-kind, s t a t e - o f - t h e - a r t experimental components that have been configured to work in the extreme environment of the deep ocean. Science ROVs also incorporate a good deal of technology that has been developed for the commercial ROV sector, such as hydraulic manipulators and highly accurate subsea navigation systems. They are also used for underwater archaeology projects such as the Mardi Gras Shipwreck Project in the Gulf of Mexico.

Remotely-operated underwater vehicles

hile there are many interesting and unique science ROVs, there are a few larger high-end systems that are worth taking a look at. MBARI’s Tiburon vehicle cost over $6 million US dollars to develop and is used primarily for midwater and hydrothermal research on the West Coast of the US. WHOI’s Jason system has made many significant contributions to deep-sea oceanographic research and continues to work all over the globe. URI/IFE’s Hercules ROV is one of the first science ROVs to fully incorporate a hydraulic propulsion system and is uniquely outfitted to survey and excavate ancient and modern shipwrecks. The Canadian Scientific Submersible Facility ROPOS system is continually used by several leading ocean sciences institutions and universities for challenging tasks such as deep-sea vents recovery and exploration to the maintenance and deployment of ocean observatories. Educational Outreach The SeaPerch Remotely Operated Underwater Vehicle (ROV) educational program is an educational tool and kit that allows elementary, middle, and high-school students to construct a simple, remotely operated underwater vehicle, from polyvinyl chloride (PVC) pipe and other readily made materials. The SeaPerch program teaches students basic skills in ship and submarine design and encourages students to explore naval architecture and marine and ocean e n g i n e e r i n g concepts.SeaPerch is sponsored by the Office of Naval Research, as part of the National Naval Responsibility for Naval Engineering (NNRNE), and the program is managed by the Society of Naval Architects and Marine Engineers. Another innovative use of ROV

Remotely-operated vehicle working under water technology was during the Mardi Gras Shipwreck Project. The “Mardi Gras Shipwreck” sank some 200 years ago about 35 miles off the coast of Louisiana in the Gulf of Mexico in 4,000 feet (1220 meters) of water. The shipwreck, whose real identity remains a mystery, lay

Florida Public Archaeology Network and Veolia Environmental produced a one-hour HD documentary about the project, short videos for public viewing and provided video updates during the expedition. Video footage from the ROV was an integral part of this outreach and used [21]

about ocean-related careers and help them improve their science, technology, engineering, and math skills. MATE’s annual student ROV competition challenges student teams from all over the world to compete with ROVs that they design and build. The competition uses realistic ROV-based missions

Remotely-operated vehicle in the sea forgotten at the bottom of the sea until it was discovered in 2002 by an oilfield inspection crew working for the Okeanos Gas Gathering Company (OGGC). In May 2007, an expedition, led by Texas A&M University and funded by OGGC under an agreement with the Minerals Management Service (now BOEM), was launched to undertake the deepest scientific archaeological excavation ever attempted at that time to study the site on the seafloor and recover artifacts for eventual public display in the Louisiana State Museum. As part of the educational outreach Nautilus Productions in partnership with BOEM, Texas A&M University, the

extensively in the Mystery Mardi Gras Shipwreck documentary. The Marine Advanced Technology Education (MATE) Center uses ROVs to teach middle school, high school, community college, and university students

that simulate a highperformance workplace environment, focusing on a different theme that exposes students to many different aspects of marine-related technical skills and occupations. The ROV competition is organized by

This new interest in ROVs has led to the formation of many competitions, including MATE (Marine Advanced Technology Education) and NURC (National Underwater Robotics Challenge)

MATE and the Marine Technology Society’s ROV Committee and funded by organizations such as the National Aeronautics and Space Administration (NASA), National Oceanic and Atmospheric Administration (NOAA), and Oceaneering, and many other organizations that recognize the value of highly trained students with technology skills such as ROV designing, engineering, and piloting. MATE was established with funding from the National Science Foundation and is headquartered at Monterey Peninsula College in Monterey, California. Broadcast Use As cameras and sensors have evolved and vehicles have become more agile and simple-to-pilot ROVs have b e c o m e p o p u l a r particularly with documentary filmmakers due to their ability to access deep, dangerous, and c o n f i n e d a r e a s unattainable by divers. There is no limit to how long an ROV can be submerged and capturing footage which allows for previously unseen perspectives to be gained. ROVs have been used in the filming of several documentaries including Nat Geo’s Shark Men and The Dark Secrets of the Lusitania and the BBC Wildlife Special Spy in the Huddle. Due to their extensive use by military, law enforcement, and coastguard services, ROVs have also featured in crime dramas such as popular CBS series CSI. Hobby Use With an increased interest in the ocean by many people, both young and old, and the increased availability of once expensive and noncommercially available equipment, ROVs have become a popular hobby amongst many. This hobby involves the construction of small ROVs that generally are made out of PVC piping and often can dive to depths between 50 and 100 feet but some have managed to get to 300 feet. This new interest in ROVs has led to the formation of many competitions, including MATE (Marine Advanced Technology Education) and NURC (National Underwater Robotics Challenge). These are competitions in which competitors, most commonly schools and other organizations, compete against each other in a series of tasks using ROVs that they have built. Most hobby ROVs are tested in swimming pools and lakes where the water is calm,

Community

2016 June, SweetcrudeReports

Militancy: Govt to train, engage 100 N/Delta youths in oil and gas Militants OSCARLINE ONWUEMENYI, Abuja

he Federal Government has announced plans to train about 100 youths from the Niger Delta region, as part of efforts to engage them in the face of resurgent militancy in the area. The ministries of Niger

Delta Affairs and Youths and Sports would oversee the training programme in partnership with St. Georges UK, which would see about 100 Niger Delta youths sent on scholarships to European countries for a programme tagged 'Train and Engage." The Minister of Niger Delta Affairs, Mr. Usani Usani, made the disclosure in Abuja, saying the ministry is set to address the major problems confronting the region

including poverty and e n v i r o n m e n t a l degradation. He said, “No fewer than 100 Niger Delta youths will be sent abroad for training as we have entered training agreements with various European institutions, including the United Kingdom, for that purpose." The Minister added that the trainees would be readily absorbed and constructively engaged

upon completion of their studies abroad. Usani said that the local content office of the Africa House in the UK had entered into a collaboration with the ministry to train the youths on NV Q Model Design. “NV Q Model Design is to train the youths in oil and gas industry, need basis and youths from the Niger Delta will be given that special training," he said. The Minister further called

on the restive youths of the region to put an end to the destruction of national assets and embrace peace, adding “we can together achieve much in peace than in war.” The Federal Government is already in discussion with relevant stakeholders from the region on how to stop vandalism of oil pipes and other infrastructure in the region.

Why Rivers should be involved in Ogoni clean-up —Wike

ivers State governor, Nyesom Wike, has explained that the state government requested for inclusion in the implementation of the United Nations Environmental Programme's report on Ogoniland because it is interested in a safe environment for the Ogoni people. Also, the Minister of Environment, Hajia Amina Mohammed, said that the implementation of the UNEP Report was above politics, hence the Rivers State Government would be involved in implementation process. Speaking at the Government House, Port Harcourt when he granted audience to the Minister of Environment, Governor Wike said though the UNEP Report was a Federal Government project, it was necessary for the State Government to be included in the processes. He requested the Federal Government to spell out the extent to which the Rivers State Government would be involved and the nature of its involvement. According to the governor, "We are interested in

supporting the Federal Government to achieve the clean-up of Ogoni land. That is why we seek that the state be carried along. "By requesting that we be carried along, we are not asking for contracts. We are only seeking to be involved in the process through information . "We are committed to Ogoni land being cleaned up, that is why we are clamouring to be involved," he said. In her remarks, Hajia Amina Mohammed noted that the concern raised by the governor was being addressed as the implementation of the UNEP Report was beyond politics. She informed that the new committee set up by her ministry to plan the launch of the programme will have two representatives of the state government.

Ogoni clean-up She said the clean up exercise is a long term project that will last 25 years.

2016 June, SweetcrudeReports

Community

Niger Delta community

Fighting unemployment, poverty will curb N'Delta insecurity —Total MKPOIKANA UDOMA, Port Harcourt

otal Exploration and Production N i g e r i a , TEPNG, has identified poverty and unemployment as factors that enhance insecurity and criminality in the Niger Delta region. The company lamented that the incessant vandalism of oil facilities by militants have snowballed into direct negative economic consequences for the people of the state and the nation at large. Deputy Managing Director of TEPNG, Port Harcourt District, Mr. Nicolas Brunet disclosed this in Port Harcourt during a stakeholders' meeting involving the company and its offshore host communities in Rivers State. Mr. Brunet stated that insecurity was forcing businesses and investors out of operations in Rivers State. Brunet, represented at the event by the company's Advisor, Community Affairs and Development, Mr. Charles-Edward Anfray,

noted that insecurity was worsening the issue of unemployment as he urged the people of the state to accept the new business programme that the company would introduce as it would tackle unemployment among youths. According to him, “The security situation in our communities is dire, extraordinarily difficult and very challenging for us as members of the communities and most importantly for businesses. “Each one of us is affected in

one way or the other with t h e u n s a v o u r y consequences of these acts within our communities. For us in Total, we feel the painful impact on daily basis. Our facilities are daily vandalised". He continued: “These include wellheads, pipelines conveying hydrocarbons (gas and oil), other assets and personnel. Most times, fatalities are recorded, even amongst your loved ones in the communities.

“The consequences are glaring to us all. Businesses are packing out of our communities and in Rivers State. No new ones are established due to the daily news of these disturbing events in the state. “These are the main causes of unemployment, because businesses that will generate employment are going out and closing shops. It is now very important for us to directly link the consequences of the restiveness in our communities to the lack of jobs

opportunities for youths.” “The issues highlighted above have snowballed into the direct negative economic consequences, namely poverty and unemployment in our communities”. Anfray further said the company would commence a business programme to address the issue of unemployment in the state, adding that the business programme was in line with the company's quest to diversify in its affairs as oil was no longer lucrative.

Shell endows professorial Chair in automobile position for not less than 10 years, engineering in FUPRE experienced in teaching,

he Federal University of Petroleum Resources, FUPRE, Effurun, Delta State has become host of the latest Professorial Chair established by the Shell Petroleum Development Company of Nigeria, SPDC, operated joint venture in support of learning and research in Nigerian universities. The Shell Professorial

Chair at FUPRE is for lightweight automobile engine development, and will be staffed by a professor who will sit in the Department of Mechanical Engineering, leading studies and research into the field for an initial period of four years. “The establishment of the Chair is an important development for the Nigerian automobile

industry,” said Igo Weli, SPDC’s General Manager, External Relations. “We will have the opportunity of a consistent and focused research on an industry, the outcome of which will be good news for the mobility needs of millions of Nigerians.” The Vice Chancellor of the university, Prof. Akii Ibhadode said: “We are looking for a Professor who should have been in that

research and consulting in mechanical and automobile engineering as well as internal combustion engines. The occupant of the Chair starts work in September 2016. This is a unique Professorial Chair and we are grateful to Shell and its joint venture partners for the confidence reposed in us.”

2016 June, SweetcrudeReports

Community

Wike

Wike blames Agip for cult clashes in Rivers

ivers State Governor, Mr. Nyesom Wike, has blamed the Nigerian Agip Oil Company, NAOC, over the cult-related killings rocking communities in the state. Wike who made the allegation when he received the High Commissioner of United Kingdom to Nigeria,

Mr. Paul Arkwright, at the Government House in Port Harcourt, particularly made reference to cult issues in Ikwerre, Emohua, Ahoada and other local government areas of the state. He informed the High Commissioner that NAOC was responsible for empowering the cult groups, noting that the matter was being addressed.

Alleging that the company engages cult groups to secure its pipelines instead of working with security agencies, the governor such patronage has led to supremacy conflicts between rival cult groups. "What is happening to us in the state has to do with the conflict from cult wars. And what is responsible for the cult wars is dominance

and supremacy. We have told the Vice President that on the issue of security, one problem we have are the multinational companies; because when you have a multinational company patronising a particular cult group, the other group would want to fight back so that they will be the ones in charge," he said. Governor Wike, however, maintained that despite the

Ogoni: Group charges govt on source of clean-up funds

he environmental rights advocacy group, Environmental Rights Action/Friends of the Earth Nigeria, ERA/FoEN, have called on the Federal government to disclose how the clean-up of Ogoni-land would be financed since it was not captured in the 2016 budget. The Federal Government recently launched the official take-off of the cleaning as recommended by the United Nations Environmental Programme, UNEP. Executive Director of ERA/FoEN, Dr. Godwin Ojo, speaking at the Environmental Parliament on the cleanup of Ogoniland in Port Harcourt, urged that victims of environmental degradation orchestrated by crude oil contamination should be included in the clean-up package and that UNEP should be a technical partner as the prime mover of the report. Earlier in their speeches, indigenes of Bodo in Ogoniland had called on the Federal Government to be committed to the cleaning up exercise as it concerns human lives which is the most important factor in the

clean up exercise. The founder of Kpenena Environmental Conservation Monitoring Centre, Bodo City, Mr. Kobah Nyimabari, maintained that the government should take into consideration the potentials of Ogoni people and restore their means of livelihood. According to him, "This has been a very serious issue, we are devastated and suffering, our children are malnourished. My expectations is to see the total commitment of Shell Petroleum Development Company and the Federal Government implementing the UNEP report". Similarly, the Assistant Programme Manager, Excellent Initiative For The Welfare of Nigerian Citizens, EINC, Mr. Young Kigbara, said he hoped for a situation where the entire land that has been devastated in Ogoniland be restored completely. In his words, "I want to see my people do have great harvest again from our farms and rivers that has been destroyed.â&#x20AC;?

security challenges facing the Niger Delta, Rivers State is peaceful for investments. The governor explained that strategies have been put in place for the enhancement of security across the state, pointing out that the Federal and state governments have taken steps to address the challenges posed by militancy in the Niger Delta. He said the meeting between Vice President Yemi Osinbajo, the Niger Delta governors and the military high command mapped out measures, including opening up of dialogue channels with the militants to resolve recent security challenges. "We called on the government of the United Kingdom to partner with the state to generate mass employment and enhance economic growth. In his remarks, the High Commissioner said the relationship between the United Kingdom and Rivers State would be deepened.

2016 June, SweetcrudeReports

Community

Give Ogoni clean-up contracts only to experts, govt told

Ogoni clean-up MKPOIKANA UDOMA, Port Harcourt

s the Niger Delta awaits the actual commencement of the clean-up of hydrocarbon pollution in Ogoniland, an elder statesman and President of Ogoni National Union, Dr. Cyrus Nunieh, has advised the Federal Government to avoid dealing with corrupt persons whose sole intention is to enrich themselves through the exercise. Such people should not be awarded the clean-up contracts, he said, as he spoke ahead of the June 2 official flag-off by the Federal Government of the clean-up as recommended by the U n i t e d N a t i o n s Environment Programme, UNEP, Report on Ogoniland Dr. Nunieh, who was a senator in the Second Republic, warned that the clean-up contracts should be given only to competent and qualified experts with proven track records. He said the clean-up of oilimpacted sites in Ogoniland was a very serious business because the continued existence of the area depended on it. “I am happy that the

government is coming to clean up Ogoniland. I know so many Ogoni people, including my wife, who have died from cancer as a result of the polluted environment. “We should be very careful not to allow what we have in the country called corruption to come near this project. Anybody who is not an expert should not be allowed to come close. "Let no company which

is not qualified be given any contract because this is a very technical and scientific project. Let unqualified persons not come and complicate things for us, we want to clean-up the place. Therefore let the clean up really be a clean up,” Nunieh asserted. He advised that the government should encourage food production

and constant supply of potable water as well as infrastructural development for the people of Ogoni as palliatives. “While the process of cleaning up is there, the Ogoni people need to be alive; therefore, there is need for Ogoni to have food to eat because the clean-up is going to take 20 to 30 years, and so, we need to have opportunity

of farming. "We must have the opportunity of mass food production, we must establish a fishery industry and then a university, because the university will train our young ones to meet up with the required skilled and unskilled labour for the clean up,” he stated.

PHEDC donates education materials to schools in 4 states

he Port Harcourt Electricity Distribution Company, PHED, has donated over 1,200 school bags and other gift items to school children in Akwa Ibom, Bayelsa, Cross River and Rivers states during the celebration of the 2016 National Children’s Day. The donation, which the company said was in fulfilment of its Corporate Social Responsibility, included bags, crayons, pencils and biros. The Chief Executive Officer, PHED, Mr. Jay McCoskey, in a statement signed by the corporate communications manager of the company, Mr. Jonah Iboma, said educational development was the company’s main focus of corporate social responsibility. According to him, “As a mark of our support for children’s education, PHED has deemed it fit to donate over 1200 bags with associated writing materials; pencils, crayons and rulers. This gesture may not seem much, but be rest assured that it is just the beginning as we intend to do more to support education across the four states of our operations, here in Rivers, Bayelsa, Akwa Ibom and Cross River.”

McCoskey added that the company would continue to engage in other projects designed to improve education in its operational region. “We have in our plans to renovate and beautify schools, provide safe drinking water and also provide support in other areas where we can as we believe that proper education foundation will position our children for greater effectiveness in the future. “We hope that you will receive our little gifts as we look forward to offering greater support and better packages for these children as we join them in celebrations next year”, McCoskey said.

Books

2016 June, SweetcrudeReports

At last, the realities of appropriation

ong before oil and gas were discovered in their territories, the ethnic minorities of the Niger Delta Region of Nigeria were unsure of their future in a federation with the three major tribes of Nigeria; worried about the naked competition for dominance by the three major tribes, the people of the Niger Delta evinced a preference, very early in the formative years of the federation, for independence or at least, a semi-federal arrangement (a confederation) whereby they could have and sustain a level of independence required to pursue the simple but peculiar aspirations of their people. To assuage their concerns and to secure a passage from colonialist rule to another form of subjugation, the colonial government constituted the Henry Willinks Commission, setting for that commission the ostensible agenda of soothing the fears of the ethnic minorities of the Niger Delta. Without any need for a debate on the subject, governance and government practice did not commence in Nigeria. All over the world governments are administered by funds realised from taxes, fines, levies; fees paid for the registration of businesses, concessions, patents, copyrights, techniques, technologies, for the entry and exploitation of the deep seas, air space and airwaves, etc. By this method, the Courts, Corporate Affairs Commission, the Department of Customs and Excise, the Nigerian Communications Commission, Civil Aviation Authorities, Department of Petroleum Resources, NAFDAC and the lot of licensing, concessioning, registration, approving and other agencies act as revenue agents for Project Nigeria, the political enterprise of more than a hundred ethnic nationalities that had existed independently before the meddling intervention of colonial rule. Nigeria became the contradiction which went into business; concessionaire, licensor, regulator, taxer, entering into joint venture partnerships, production sharing contracts, prospector, exploiter, inspector, certifier and all other idiotic roles that made her the laughing stock among the civilised peoples of the world! The greedy managers of Nigeria failed to see the parallels between Brunei, Saudi Arabia and Qatar with the Nigerian situation, a federal state which came into existence under the presumption that all the federating units were viable political entities capable of existing and surviving without the assistance of or aid from any external bodies.

igeria became the country where the federating states, local governments and ethnic nationalities queue up month after month for the federal allocation, a revenue ideology wrapped around the fortunes of oil and gas business as conducted by Nigeria Plc; Nigeria became the state that premised its budgets on the predilections, vagaries and fortunes of an industry, yes, a single industry. So that, as it has come to be, the very fortunes of Nigeria, as in the value of its currency, the state of its infrastructure, the moods of its people, its alignments in international fora and others are determined by the health of the industry or more crudely, the price of oil and gas worldwide. I have no understanding or tolerance for violence but what Nigeria forcibly appropriated from the Niger Delta has not only been its bane in the terms discussed here but also the object, excuse and reason for the interruption of our national life by the people of the Niger Delta who have mastered the art of political puppetry knowing when to pull, loosen, strain and stress the bonds that attach us to the commonwealth of the Niger Delta. In 1966, Isaac Adaka Jasper Boro and his Ijaw Volunteer Force carried out a military campaign against Nigeria over oil mineral rights. On the

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23rd of February, 1966 they declared the Niger Delta Republic, seeking the level of control that would assure them independence within their territories. Again, between 1994 and 1995, Kenule Beeson Saro-Wiwa and the Movement for the Survival of the Ogoni People, an ethnic group native to the Niger Delta attracted the attention of the international community with their outcry over the degradation of their environment. During and since after their protests all the lucrative oil wells in Ogoniland did not produce. For his travails for the emancipation of his people and territory from Nigerian exploitation he paid with his life. If the Nigerian state thought the death of Saro-Wiwa would dissuade others from challenging Nigeria’s proprietary rights over the oil and gas deposits in the Niger Delta, they were very wrong. Between 2002 and 2007, another Niger Delta group, the Movement for the Emancipation of the Niger Delta carried out an armed campaign against Nigeria and the oil majors. Apart from that group, several others sprung up, demanding the same thing: Resource Control. Several millions of barrels of crude oil, lives and valuable equipment were lost in the campaign. It took astute political management to secure a temporary cessation of the violent attacks by militant groups and it was within the efforts at palliating the militant elements that the Nigerian government made an expensive error: the militants were bribed with monthly allowances that have

Nigeria became the contradiction which went into business; concessionaire, licensor, regulator, taxer, entering into joint venture partnerships, production sharing contracts, prospector, exploiter, inspector, certifier and all other idiotic roles that made her the laughing stock among the civilised peoples of the world! undermined security, industry and stability in the Niger Delta in just about every way that unearned income operates. Dateline 2016, enter the Niger Delta Avengers. Their signature strategy is bombing oil wells, pipelines and oil platforms. In only about three months they have caused more oil spills than occurred in Alaska in TWENTY YEARS!!! Their strategy is the “scorched earth” popularised by the Russian military when attacked by Bonaparte’s forces in 1812. “He who invades my home and property should never enjoy their comfort.” Would these protests ever stop? I think not for the issue of the appropriation of the mineral rights of the people of the Niger Delta, the mindless rape of their environment and their subjugation to a status rejected by them from the very beginning is an emotive issue that touches on their humanity and survival. Every child in the Niger Delta is raised on poisoned water; their lungs are dark where the lungs of children in Alaska, Tennessee and Texas are pink. In these American states, more oil and gas operations take place than what the Niger Delta has experienced but the difference is that because Alaskans exploit their environment by themselves and for themselves, they apply the best industry standards such that the people and the environment are secured first by deliberate prioritisation. According to the UNEP REPORT on the Niger Delta and Ogoni land in particular, the Niger Delta

environment would not recover its originality even 20 years after the cleanup exercise recommended by the Report!

ow, let us examine the cold statistics. In a period of economic down turn influenced largely by poor oil prices, Nigeria is unable to meet its OPEC production quota; millions of barrels of crude are flowing into the rivers and creeks and farmlands of the Niger Delta as I write. Imagine the damage to the environment and the threat to humanity! Men and women, soldiers and civilians, the infirm and able, natives and strangers are dying in the Niger Delta, all over. Life, living, production, commerce and the traffic of goods and services have all suffered the punctuation of the Avengers’ bombs. Now consider again that ALL these are in the backdrop of an oil and industry that is managed for Nigeria by a monumentally inept and corrupt NNPC. The Petroleum Resources Ministry, the NNPC, its directorates, the Subsidiaries that are in constant reproduction in accordance with the wet dreams of the policy maker of the day, the Refineries, the Group Executive Directors, Group General Managers, Managing Directors and civil servants that are ALL stinking billionaires have constituted drain pipes by which Nigeria famously suffers from one level of operational loss to another. Nobody is fooled; Nigeria’s oil production venture is operated at a loss from one fiscal year to another. What has baffled me is that year after year of losses occasioned by corruption, ineptitude, bureaucracy, negligence, theft and sabotage, the Nigerian state has NOT seen the wisdom in restricting itself to Regulator, Inspector, the Certification of Standards, Legislating Industry Guidelines, Enforcer of Operational Rules and Industry Regulations, Taxation, Licensing Operators, De-Listing Defaulters in the Industry and a motley of other roles that are much more lucrative and beneficial than producing oil and gas operations. Oil and gas business attracts 50% tax in some countries; the South African Government under Pieter Botha boasted that it had the capacity to manage its affairs with earnings from regulating, taxing, licensing, fining and granting concessions in a single industry: diamond mining. Last year the Nigerian government fined a telecoms company billions for non-compliance with government regulations. The Nigerian government could, in my humble view, make more money fining IOCs for flared gas alone than it has, pursuing some ghost investments rolled out by criminal operatives in the system for their personal gain. The beauty and advantage in the Nigerian government adopting the international norm is that apart from wages for personnel which incidentally would be produced by the personnel, government does not need to source funds for investments; it can operate on a lean investment folio and still secure huge returns. Government would not suffer the indignity of production sharing contracts or joint venture partnerships.

he Nigerian government need not fear the loss of control or influence over the oil and gas industry. All over the world, governments, citing strategic reasons, national security, the integrity of the environment or simple market sanity and stabilisation, usually determine the volume of crude (or other minerals) to be extracted, locations to be exploited and those to be reserved. The prudent exercise of these powers can secure concessions from IOCs, producing states and communities. The biggest gains foreseeable where government plays its traditional role, leaving the exploration and exploitation of crude oil for IOCs working with owner communities and individuals, are social security, healthy competition for prudent management of oil and gas assets, a safe environment secured by host communities, government inspectors, government fines and an equitable society where the rules of justice apply to all equally.

2016 June, SweetcrudeReports