Sweetcrude november edition by Sweetcrude reports

Finance

2015 November, SweetcrudeReports

Nigeria: How oil revenues got diverted to private pockets —Report

nternational concern is mounting o v e r t h e mismanagement of Nigeria's oil industry funds, with the corruption watchdog, Global Witness, urging the help of the United Kingdom to recover funds lost by Africa's leading oil and gas producer in the famous but controversial Malabu oil deal. A letter cited by Reuters has asked UK’s Crown Prosecution Service, CPS, to freeze the assets of those involved in the Malabu oil deal through which Nigeria lost more than a billion dollars due to lack of transparency. Global Witness revealed in its recent report titled, 'How to Lose $4 billion' that in Nigeria and two other African countries Democratic Republic of Congo and Angola - lucrative oil and mining assets worth $4 billion were awarded to companies with hidden owners, thereby diverting vast resource revenues to unknown private pockets. Under this arrangement, Nigeria lost $1.1 billion in the Malabu oil deal, the loss coming due to lack of beneficial ownership transparency in the oil and gas industry, Global Witness said in its report. Reports have indicated that more than half of the $1.1 billion (N171.32 billion) paid to Malabu Oil and Gas for the procurement of one of Nigeria’s richest oil fields, OPL 245 by Royal Dutch Shell and Italian firm Eni was used to bribe Nigerian p o l i t i c i a n s a n d intermediaries who helped to secure the controversial deal. According to Italian prosecutors, some of the N83 billion ($533 million) slush money was used to buy private jets and armoured vehicles. “We are investigating many money transfers to many people in various countries who received sums that vary from millions of dollars to thousands of dollars,” Reuters quoted the letter to the UK's Crown Prosecution Service as reading. British prosecutors acting on the request to freeze the assets of those involved in the Malabu oil deal, have already frozen two accounts

Oil rig

We are investigating many money transfers to many people in various countries who received sums that vary from millions of dollars to thousands of dollars, Reuters quoted the letter to the UK's Crown Prosecution Service as reading with combined sum of N29.5 billion ($190 million) belonging to the chief intermediary, Emeka Obi. Former oil minister, who was convicted for money laundering in France, Dan Etete, owns Malabu Oil and Gas. The company was incorporated five days before the oil block was awarded to it in 1998 during the regime of

military dictator, Sani Abacha. With regard to how anonymous companies made $1.1 billion disappear in a single deal in Nigeria, Global Witness noted that “in 1998, the then Minister of Petroleum Resources, Dan Etete, awarded a company called Malabu Oil and Gas a huge oil block off

the West African coast called ‘OPL 245’, without publicly declaring that he was the owner of the company. "The OPL 245 block was said to have been purchased in 2011 by European oil companies, Shell and Eni, who paid $1.1 billion into an account set up by the Nigerian government”. The report stated, “The government agreed to transfer the same amount to a Nigerian company called Malabu Oil and Gas, which was secretly owned by a former oil minister, Dan Etete. Malabu eventually passed $800 million of the money to a network of Nigerian companies with anonymous owners, which were apparently vehicles for paying others involved in the deal”. Shell and Eni had always denied paying money to Malabu, however, Global Witness said court evidence

arising from suits brought against Malabu for unpaid fees by the middlemen involved in facilitating the deal showed that they knew that the funds would go to the company. Global Witness noted that the OPL 245 deal had now been investigated by authorities in three countries, saying the Nigerian House of Representatives in a 2014 vote called on the government to cancel the deal, and the Economic and Financial Crimes Commission “is also investigating, and recently questioned Dan Etete.” “With a new government now in power publicly committed to rooting out corruption, there is a risk that Shell and Eni may have their exploration rights revoked because of the way the block was acquired,” it said.

2015 November, SweetcrudeReports

Finance

Refinery

x e c u t i v e Secretary, N i g e r i a n C o n t e n t Development and Monitoring Board, NCDMB, Mr. Denzil Kentebe, says over $10 billion would be invested in the Nigerian economy between 2015 and 2018 in new fabrication yards as well as in floating, production, storage and offloading vessels. The Executive Secretary, who disclosed this while delivering a lecture to the participants of Course 22 of the Nigerian Defence College in Abuja, said over $5 billion had been invested in the Nigerian oil and gas industry between 2010 to date in the establishment and upgrade of fabrication yards, acquisition of marine vessels, rigs and other assets by Nigerians and setting up of manufacturing facilities by original equipment manufacturers. Stressing that the successful implementation of the Nigerian Content Act is fundamental to the sustenance of national security because it engages thousands of citizens in productive activities and contributes significantly to the gross domestic product, GDP, he added that the Nigerian oil and gas industry must depend on Nigerianowned assets and personnel to avoid a scenario where the sector that generates 85 per cent of government revenue is forced to shut down because foreign-owned assets or expatriates have to be withdrawn owing either to insecurity in the Gulf of Guinea Region, diplomatic

Oil sector to witness N10bn investment in 3 years —NCDMB boss tensions or break out of an epidemic in the country. He regretted that the Nigerian oil and gas industry suffered capital flight in the region of $300bn in the first 50 years of operations, while 300,000 Nigerian jobs were exported to the detriment of the local economy. According to him, that era did not record the establishment of any legacy investment from major

industry projects, rather little attention was paid to oil producing communities, forcing some persons to take to militancy, thereby cutting crude production output by one million barrels per day. The NCDMB boss explained that the Nigerian Content Act was introduced in year 2010 to correct such mistakes and it focusses on maximising the utilisation

of Nigerian resources in the operations of the oil and gas industry, integrating oil producing communities into the industry value chain and fostering institutional collaboration. Other areas of interest, he said, include linking the oil and gas industry with other sectors of the economy, m a x i m i z i n g t h e participation of Nigerians in the sector and attracting

investments. Kentebe stressed that Nigerian Content was not about ‘Nigerianisation’ of the oil and gas industry but about adding value incountry. He further explained that the Board’s strategic initiatives had in five years recorded substantial growth in the number of Nigerians trained and employed by the oil and gas industry, increase in the quantum of goods sourced from Nigeria and rise in the number of Nigerian owned assets operating in the industry.

Nigeria spends N4tr on subsidy payments in seven years KUNLE KALEJAYE

he Nigerian Extractive Industries Transparency Initiative, NEITI, says its audit reports show that the Federal Government spent N4 trillion on fuel subsidy payments in seven years, 2006 to 2012. Revealing this at a oneday forum on fuel subsidy in Lagos, NEITI's Director of Communications, Mr.

Orji Ogbonnaya Orji, said the audit reports showed that total subsidy payments between 20062012 stood at N4 trillion. ?According to him, in 2006, N219.72 billion was spent on subsidy while payments for 2007 was N236.64 billion; 2008 (N360.18 billion), 2009 (N198.110 billion), 2010 (N416.45 billion), 2011 (N1.9 trillion) and 2012 (690 billion. "The subsidy payments in 2012, N690 billion when

compare to N1.9 trillion paid in 2011 shows a 29% reduction. This reduction may be due to the January 2012 national protest against oil subsidy", Mr. Orji said. The NEITI communications director stated that the transparency initiative audit also revealed that the Nigerian National Petroleum Corporation, NNPC, had claimed that a total sum of N1.7 trillion was paid as subsidy between 2006-2012.

“NNPC deducted these sum directly from domestic crude oil proceeds before remitting the balance to the Federation account. "Subsidy deductions by NNPC increased by 110% from 198 billion in 2009 to N416 billion in 2010, and 89% in 2011 (N416 billion to N786 billion 89%). "The increase between 2009 and 2011 alone was 186% from N198 billion to N786 billion," he maintained.

2015 November, SweetcrudeReports

Finance

ExxonMobil office SAM IKEOTUONYE

xxon Mobil Corporation has announced estimated third quarter 2015 earnings of $4.2 billion, compared with $8.1 billion a year earlier. This came as Chevron Corporation reported income of $2 billion for the same third quarter 2015, compared with its earnings of $5.6 billion in the 2014 third quarter. ExxonMobil's $4.2 billion income represented a decrease of $3.8 billion, or 47 percent, from the third

ExxonMobil, Chevron see sharp drop in income *ExxonMobil earns $4.2bn in Q3; Chevron, $2bn quarter of 2014. The company also reported capital and exploration expenditures at $7.7 billion, down 22 percent from the third quarter of 2014. Oil-equivalent production increased 2.3 percent from the third quarter of 2014, with liquids up 13 percent and

natural gas down 10 percent, the company said. According to the company, cash flow from operations and asset sales was $9.7 billion, including proceeds associated with asset sales of $491 million while $3.6 billion was distributed to shareholders in the third

quarter of 2015, including $500 million in share purchases to reduce shares outstanding. “We maintain a relentless focus on business fundamentals, including cost management, regardless of commodity prices,” said Rex W.

Nigeria earns N724bn from domestic crude oil sales IKE AMOS

igeria earned N723.82 billion from domestic crude oil and gas sales between January and August 2015, the Nigerian National Petroleum Corporation, NNPC, has revealed. The NNPC in its Financial and Operations Report for the month of August, stated that the country also earned $3.423 billion, about N684.6 billion from the

export of crude oil and gas. The NNPC put domestic crude sales proceed due the country at N1.164 trillion; N723.824 billion was received, while N774.47 billion was remitted to the Federation Account Allocation Committee, FAAC, inclusive of a debt repayment of N50.64 billion. The country spent N231.04 billion on subsidy; N4.17 billion and N41.65 billion was incurred as crude and petroleum product losses respectively, while repairs and management cost gulped N69.41 billion.

In general, the NNPC stated that the country earned $25.105 billion, about N5.021 trillion from the sale of crude oil between January and July 2015. A breakdown of the figure, showed that the Federal Inland Revenue Service, FIRS, and the Department for Petroleum Resources, DPR, earned $1.966 billion, about N393.2 billion and $229.668 million, about N45.93 billion respectively from Production Sharing Contract revenue.

In addition, the NNPC earned $7.156 billion, about N1.43 trillion in the period under review, while the amount accrued to the Federal Government was $9.351 billion, about N1.87 trillion. Oil companies, including the Nigerian Petroleum Development Company, NPDC, earned $15.077 billion, about N3.02 trillion, while Alternative Finance received $676.287 million, about N135.257 billion.

Tillerson, chairman and chief executive officer. “Quarterly results reflect the continued strength of our Downstream and Chemical businesses and underscore the benefits of our integrated business model.” On the other hand, Chevron's chairman and chief executive officer, John Watson, said of his company's performance: “Third quarter earnings were down substantially from a year ago.” “While downstream earnings remained strong, lower overall earnings reflected weaker market prices for both crude oil and natural gas, which depressed upstream profitability. We are focused on improving results by changing outcomes within our control. Operating and administrative expenses are 7 percent lower than last year, and we expect further reductions in the quarters ahead. “We expect capital and exploratory expenditures for 2016 to be $25-28 billion, roughly 25 percent lower than this year’s budget,” he added.

2015 November, SweetcrudeReports

Finance

Govt to create $25bn Infrastructure Fund for power, others Electric bulbs OSCARLINE ONWUEMENYI

he Federal Government is planning to create a $25 billion fund through public and private sector financing to fund investment in energy, including power, and transportation, with the aim o f m o d e r n i s i n g infrastructure and avoiding a recession. A spokesman for Vice President Yemi Osinbajo, who revealed this, noted

that: “The vice president disclosed that other sovereign wealth funds have already indicated an interest in the fund, which would be used to address the nation’s decaying road, rail and power infrastructures." He added that the nation of 170 million people requires rapid infrastructure development to help boost economic growth but the nation’s economy, the biggest on the continent, which relies largely on oil for government revenues has been hammered by the fall in oil prices.

He however did not say when exactly the fund would be set up. The halving of oil prices since last year has forced Nigeria, Africa’s largest producer of crude, to slash its budget and led to a weakening of the Naira. Standard & Poor’s has also downgraded the country’s credit rating, while JP Morgan Chase & Co. removed Nigeria from its local currency emerging market indexes. “We think that the way out of this, what some have

described as an impending recession, is actually to spend rather than to cut back in any way,” Osinbajo, said in a recent interview in Abuja. Economic growth slowed to 2.35 percent in the second quarter of 2015, according to Nigeria’s national statistics agency, National Bureau of Statistics, NBS, the lowest this decade, as falling income from crude exports and foreign exchange shortages hit businesses hard. The nation relies on oil for about two-thirds of government spending and 90 percent of

NPA, NCS strengthen ties on revenue generation KUNLE KALEJAYE

s part of efforts to enhance revenue generation from Nigeria's seaports for the government, the Nigerian Ports Authority, NPA, and the Nigerian Customs Service, NCS, have agreed to strengthen ties and forge a more robust partnership. Managing Director of NPA, Mallam Habib Abdullahi and the Comptroller General of NCS, Colonel Hammed Ali (rtd) agreed it was

imperative for the two agencies to see themselves as “partners in progress", working together for the good of the nation’s economy. To achieved improved revenue generation from the nation's seaports, both agencies said the creation of a conducive working environment that will be of mutual benefit to the management of the two organisations was required. The NPA Managing Director, who commended the Customs Comptroller General for considering it fit to visit the corporate

headquarters of his agency explained that as “Customs direct call ports”, the authority would ensure that there is high level of operational efficiency and effectiveness in service delivery at the nation’s ports. Malam Habib, who revealed that since the commencement of the present concession regime in 2006, activities have increased in the ports with the terminal operators, added that with the greater cooperation between the Authority and

NCS, the performance of the nation’s ports in areas of turnaround time of vessels and cargo delivery time would be substantially reduced with impact on the cost of doing business in the ports. Earlier, the Comptroller General, Col Ali (rtd) had solicited the support and cooperation of the NPA to ensure improved performance of the revenue yielding agency of the Federal Government.

its export income. Osinbajo further explained t h a t t h e B u h a r i administration plans to target investment toward improving a power supply system that leaves tens of millions of households without grid electricity for hours each day, and some for days and weeks, as well as modernizing roads, rail transportation and agriculture. Boosting agricultural output in a fertile nation that has become one of the world’s biggest importers of rice will both save foreign exchange outlays and create jobs. The government is looking to make the West African country self-sufficient in rice production in about 24 months. “A lot of those projects will be bankable projects, because we’re looking at projects that will interest private sector investors as well, but they are strategic for us,” Osinbajo said. In the face of declining oil revenue, Central Bank governor, Godwin Emefiele, has resisted pressure from investors and fellow policy makers to devalue the naira. Instead, he imposed exchange rate controls in February that Osinbajo described as “largely successful” and “inevitable in the short term” in an effort to stem the outflow of reserves.

2015 November, SweetcrudeReports

Finance OSCARLINE ONWUEMENYI

he French government may have taken a renewed interest in helping Nigeria overcome it's power challenges with recent financial efforts to boost electricity grid development and renewable energy in the country. France says it has granted 170 million dollars aimed at increasing the power supply for the Federal Capital Territory, FCT. The French Ambassador to Nigeria, Mr Denys Gauer announced this last week in Abuja in a remark at the Nigeria Alternative Energy Expo 2015. Represented by Mr Georges Vanin, First Counsellor, Political Affairs and Communication, Embassy of France, Abuja, the ambassador said the power sector was one of the three priority sectors identified by the French Development Agency, AFD, in its 2014-2016 strategy in Nigeria. “The AFD is contributing to the development of the

France renews interest in Nigeria’s power sector with $170m grant

Electricity powerlines electricity transportation network by supporting the public company Transmission Company of Nigeria (TCN). “On the occasion of a first project aiming at increasing the power supply for the Federal Capital city, Abuja, the AFD has granted 170 million of dollars to the Federal Government in 2013. “This project is on-going. A second one is being considered for 2016,” he said.

France also last week signed an agreement to build a 35million Euros (N8 billion) 13 megawatts solar plant in Osun state. Stephane Gompertz, France’s Ambassador for Climate Change, said the agreement was signed on Friday by the Osun Governor, Mr Rauf Aregbesola and a French company, Vergnet. He also noted that there

will be other bigger projects going up to 50 or even 100 megawatts that would be financed by the French Agency for Development. According to him, the French energy group, Total, is also willing to develop a solar energy project in Katsina state. He explained that the agreement to build the solar power plant also included a training component to

encourage the transfer of technology. He explained that Nigeria was one of the first African countries targeted by the Sustainable Energy for All initiative. “In September, Nigeria has indeed presented its objectives and plan of action for this initiative. “The federal government has declared the access to power as its first development priority and has asked the AFD to play a role in addressing this challenge, especially in terms of transporting electricity. “The AFD is willing to improve the efficiency of the private supply networks through a 150 million U.S. Dollars soft credit facility granted to two local banks. “The credit facility is under final assessment by AFD for funding Distribution Companies investments.”

Labour

2015 November, SweetcrudeReports

TUC kicks against N2.7bn 'golden parachute' for NERC board OSCARLINE ONWUEMENYI

he Trade Union Congress, TUC, has criticised the proposed payment of about N2.7 billion as severance allowance and gratuity to seven board members of the Nigeria Electricity Regulatory Commission, NERC. Comrades Bobboi Bala Kaigama and Musa Lawal, TUC president and secretary-general, respectively, described the proposed payment as a reflection of the fact that the agency has lost touch with prevailing economic realities. It further warned that paying that huge sum of money at a time the government is suffering from cash crunch would be a disservice to the people. The statement reads: “The attention of the TUC has been drawn to reports of a resolution by the board of the NERC to pay the sum of N2.7billion to just seven of its members whose five-year tenure expires on 22nd of December, 2015. We consider the report as the most expensive jokes in recent times. “The sum of N400 million is said to be projected for the Chairman of the Commission and N380 million for other members of the board. This is happening at a time when both the federal and state governments are crying over financial challenges. This can best be described as the peak of insensitivity and

Dr. Amadi

cruelty.” The workers wondered why only seven government employees should be paid salaries upfront for two years after leaving office during which they would not be eligible to work in the power sector.

TUC said the situation becomes worse as the colossal sum of money, curiously termed “severance and gratuity,” includes the cost of their official cars, phone calls, electricity, rebate allowances, and others for

their ‘part-service years.’ “How much does an average retiring civil servant who has served the country for 35 years get as severance benefits and gratuity? How justifiable is it for board members of a commission that tactfully mid-wived the

Govt owes over 50,000 ex-PHCN workers

he National Union of Electricity Employees, NUEE, says over 50,000 former workers at the defunct Power Holding Company of Nigeria, PHCN, were still being owed by the Federal Government. In a petition to President Muhammadu Buhari over the handling of the Federal Government's

privatisation programme in the power sector, NUEE stated that over 5,000 of the former PHCN employees had not received any entitlement at all. According to the petition signed by NUEE's General Secretary, Mr. Joe Ajaero, the union's agreement with the government that the PHCN should not be liquidated until all labour issues in the privatisation process was concluded had not been

adhered to. The union, therefore, urged President Buhari to prevent the Bureau of Public Enterprises, BPE, which oversaw the privatisation process, from liquidating PHCN's the remaining assets until all the issues were fully addressed. “BPE has refused to release needed fund to the Implementation Committee headed by the

Permanent Secretary, Federal Ministry of Power, Ambassador Godknows Ighali, for conclusion of verifications and payment of staff entitlements, but allegedly paid another government agency, the Office of the Accountant General of the Federation, N500 million as consultancy fee for the same purpose," the union alleged in the petition.

ripping-off of Nigerians be paid such mind boggling sum of money for five-year 'service' to their fatherland? Why must the people at the lower rung of the ladder always be made to subsidise the greedy and insatiable appetites of the privileged few?" the union wondered. The group said the NERC board members premised their claim on their proposed self-aggrandisement on the argument that their predecessors also received the same largesse. “Furthermore, does the recent slump in price of oil in the international market from between $80 and $90 per barrel to between $45 and $50 not suggest the need for more frugal management of our national wealth? "What rationale do these board members who championed crazy policies and bills to validate hike in electricity tariff have for their nauseating craving for such unholy windfall?" the group asked rhetorically.

Labour

2015 November, SweetcrudeReports

Egbin power station

KUNLE KALEJAYE

he National U n i o n o f Electricity Employees, NUEE, has insisted that the controversial housing unit and schools located within Egbin Power Station, belongs to electricity worker and not the new owners of the plant. General Secretary of the union, Comrade Joe Ajaero, in an exclusive interview with SweetcrudeReports, disclosed that the housing unit and the school situated within the power plant were built by electricity workers and that it was not part of what was sold to Sahara Group, the new investors, who bought over the plant. Workers at the power station have recently been at logger-heads with the new management of the power station over ownership of the facilities. Ajaero explained that prior to Federal government's sale of the defunct Power Holding Company assets to private operators under the power sector privatisation programme, levy was deducted from both the power generation and transmission company workers' salaries to construct the housing unit and the school.

Egbin housing unit belongs to electricity workers, NUEE insists Said he: "The school in Egbin was constructed by National Union of Electricity Employees, NUEE, and the Senior Staff Association and I want former Managing Directors of Power Holding Company of Nigeria, PHCN, former ministers to come out and say a word. We constructed the houses and school there.

"We constructed that of even Jebba and Sapele?. Our members' children could not go to school where these power plants are constructed. Then we started deduction of levies from the salaries of workers to construct these buildings. "In the early 90s, the management of these buildings was handed over

to the management of PHCN so that the workers can concentrate on their primary responsibility. The letter of hand over and other document in Egbin are still with us. "Before privatisation, the union told government that they cannot hand over what does not belong to them but the people that bought Egbin

are now laying claims on it". He added that under the Federal government monetisation ?policy, workers living in staff quarters have the right of 'first refusal' and that the workers in the distribution arm of the power sector got theirs. He noted that minimisation was not done in the generation arm as the housing unit was close to where the employees worked.

TUC kicks over planned power tariff hike

he Trade Union Congress of Nigeria, TUC, has vowed to resist reported plans by electricity distribution companies in the country to increase tariff by 49.4 percent. The Nigerian Electricity Regulatory Commission, NERC, has said the new electricity tariffs proposed by the distribution companies for approval by the regulatory agency would be ready for implementation by the end of October. The agency at its recent public consultation where the proposed new retail electricity rates were jointly reviewed by stakeholders, explained that it would first review the figures presented by the Discos, taking into consideration the diverse views of consumer groups,

who were at the consultation before approving any rates. Its chairman, Dr. Sam Amadi however noted that the new rates would be out and subsequently practical in the sector by the end of October. Amadi further stated that from the end of October, the country’s electricity sector is expected to operate with new sets of tariff which is considered cost-reflective and capable of attracting investments in the sector. “The new tariff is expected by the end of the month but we may skip our timeline to be able to do more thorough work. For example, we have to go to Kaduna and find out the numbers but essentially, our target is the end of the month,” Amadi said.

Labour

2015 November, SweetcrudeReports

NNPC reform: Massive redeployment of staff begins, causing anxiety

Oil workers

he Nigerian N a t i o n a l Petroleum Corporation, NNPC, has begun the redeployment of its staff members across the different business units, a situation which has generated great anxiety among affected staff. The ongoing massive redeployment exercise is said to target mostly the mid-level staff of some of the NNPC’s subsidiaries including the Pipelines and Products Marketing Company, PPMC, and the Nigerian Petroleum Development Company, NPDC. However, an official of the Corporation, who confirmed this development, indicated

that it was part of the ongoing reforms initiated by the new Group Managing Director, Dr. Emmanuel Kachikwu to ensure efficiency within the NNPC structure. He noted that, “The redeployment of staff is taking place across all the major units as well as subsidiaries of the Corporation. It’s not just within any particular unit or subsidiary since every decision taken by management invariably affects all the units and subsidiaries. It’s nothing strange, but it’s in line with the ongoing reform objectives of the new leadership in the NNPC.” He added that the redeployment exercise is in line with “the reform agenda

encapsulated in the ’20 Fixes’ action plan of the Dr. Kachikwu-led NNPC management” to transform the Corporation into a lean, efficient, business-focused, transparent and accountable national oil company in keeping with international best practices. Upon resumption in August, Kachikwu had adopted what he described as “20-fixes” with which he hopes to reform NNPC operations, guarantee profitability and run a transparent national oil company. Accordingly, the “20-fixes” make up twenty critical issues that the Corporation’s current

management had identified and would need to address in order to create a more nimble organisation and re-position it on the path of profitability. President Muhammadu Buhari had specifically appointed Kachikwu to drive his reform agenda for the oil and gas behemoth, and had sacked and replaced four directors of the Corporation after just days of his resumption. The NNPC boss explained that through the “20-fixes” which are embedded in five cardinal business objectives that he intends to pursue, are plans to amongst other initiatives, attain zero tolerance for corruption, restructure its major subsidiaries as well as

Curtail Navy excesses at Apapa depots, PTD urges govt

he Petroleum Tanker Drivers, PTD, has appealed to President Muhammadu Buhari to wade in and help check alleged excesses of officers of the Nigerian Navy working at the petroleum products depots in Apapa area of Lagos. PTD, an arm of the National Union of Petroleum and Natural Gas Workers, NUPENG, accused the naval officers of engaging in illegal activities at the depots. Its national chairman, Mr. Salmon Oladiti, explained in a statement that the activities of the naval officers have affected loading of petroleum products at the depots, disturbed free-flow of traffic and led to untimely death of

drivers. Oladiti said in the statement: "Navy's illegal operations are the major problems of tanker drivers. There is so much extortion, harassment and beating of our members who fail to meet their demand. We want the activities of the Navy to be checked, they are not trained to control traffic. Their activities are affecting our operations. "We have recorded two deaths now; we don't want more people to die due to their extortions and illegal operations. We want them to be withdrawn from the road," he said.

enhance probity in its operations across board. Contained in its monthly financial and operational reports for the month of August, the Corporation’s “20-fixes” also include its intentions to restructure Joint Venture funding and reduce cash call demands; improve retail profitability; deploy and attract focused investments; expand crude oil marketing and generate electricity profitably. Also to be done within the initiative are, reduction and audit of running costs; restructuring of corporate centres and staff; renegotiation of existing contracts including Production Sharing C o n t r a c t s , P S C ; streamlining of subsidy management as well as improve security of the country’s critical petroleum pipelines. The new management’s reform agenda, obtained by our correspondent in Abuja, also indicated that three of the corporation’s subsidiaries, the Nigerian Gas Company, NGC; Pipeline and Products Marketing Company, PPMC, and the Nigerian Petroleum Development Company, NPDC, would either be unbundled or re-kitted.

Solid Mineral

2015 November, SweetcrudeReports

Delta Steel to resume operation next year - Gov. Okowa

Delta Steel Company head office complex at Aladja, Delta State.

ll things being equal, the Delta S t a t e Company, DSC, in Aladja, near Warri, Delta State will bounce back to operation next year after years of closure. The plant was originally designed to produce billets as well as rods and wires. Delta State governor, Senator Ifeanyi Okowa, dropped hints of the possible return of the plant as he spoke recently with Delta North senatorial district leaders in Asaba. The plant, according to him, would be up and running within 12 to 14 months. Citing a recent visit to India, he stated that during the visit he met with the new owners of the company, who assured him on their plan to return the plant to full operation. "I met with one of the companies that recently took

over Delta Steel Complex, Aladja, and I thank God because they are seriousminded and committed to reviving the company and I believe that in another 12- 14 months, DSC will come alive again with many other companies in the state. "DSC is our pride and I believe that when that

company is revamped, it will employ people from all parts of Delta State and beyond,â&#x20AC;? the governor said. Premium Steel & Mines, a company owned by Mr. Sunil Vaswani and other institutional investors, earlier this year has acquired Delta Steel Company Limited from the

Asset Management Corporation of Nigeria AMCON, in a multibillion naira deal. AMCON and Premium Steel closed the sale in March this year, paving the way for the new owners to take over the steel plant and all of its non-core assets such as its workersâ&#x20AC;&#x2122; quarters,

schools and hospitals. The deal was struck after Premium Steel offered to pay a sum higher than what was paid by Global Steel Holdings Limited, GSHL, promoted by Mr. Pramod Mittal, to the Federal Government through the Bureau of Public of Enterprises.

Diamond traders meet in Namibia

iamond traders from across the world would be converging on Namibian capital, Windhoek, for an international diamond conference holding November 24 to 27. The conference would present industry leaders at the highest level opportunity to dialogue and build cooperation. The conference has as theme "Challenges facing Diamond Beneficiation in Southern Africa: How can we make this industry viable and sustainable?" Namibian Minister of Mines and Energy Obeth Kandjoze will open the conference. Speakers will include the Zimbabwean Minister of Mines and Mining

Development Walter Chidakwa, president of the Diamond Manufacturers Association of Namibia Burhan Seber, president of the Chamber of Mines of Namibia Kombadayedu Kapwanga, and the chief executive officer of Namibia Diamond Trading Company Shihaleni Ndjaba. During the conference, the Namibian National Earth Science Museum at the Ministry of Mines and Energy will showcase prestigious pieces of the Shining Lights Diamond Design Collection, some crafted by awardwinning Namibian designers.

Freight

2015 November, SweetcrudeReports

Lagos port

Enforce Cabotage Act, expert urges NIMASA MKPOIKANA UDOMA

he Nigerian M a r i t i m e Administration and Safety A g e n c y , NIMASA, has been urged to properly enforce the Cabotage Act in order to optimise the benefits accruable to Nigeria’s maritime sector. A university don and an expert in the maritime industry, Professor Kelvin D. Bob-Manuel, made the call as part of recommendations in his inaugural lecture as the first professor of marine engineering in West Africa and South of the Sahara Delivering the lecture at the Rivers State University of Science and Technology, RSUST, in Port Harcourt, the professor of maritime

NIMASA should properly enforce the Cabotage Act and drastically limit the wavers that are given to foreign vessels to operate in our territorial waters

engineering (Ship power plant) said enforcement of the Cabotage Act would be of advantage to indigenous maritime operators. The Cabotage Act, Professor Bob-Manuel said, spelt out four major condition upon which it’s implementation must be applied.

He listed these to include that cabotage vessels must be wholly-owned by Nigerians; be registered in Nigeria, manned by Nigerian crews; and that Nigerian shipyards must build and repair cabotage vessels. In his words, “NIMASA

should properly enforce the Cabotage Act and drastically limit the wavers that are given to foreign vessels to operate in our territorial waters. “This will enable our indigenous ship-owners and operators reap the benefit of Cabotage and increase replacement of cadets and other graduates on board Nigeria registered vessels to gain sea experience. This measure will minimise the skills gap in the maritime industry”. The lecturer, who spoke on the topic, “Technological Adv ances in Maritime Transportation and Engineering Impact on the Global and Nigerian Economy”, recommended that the current monitoring policy on acquisition should be reviewed to favour

indigenous operators. Beyond this, he also recommended that Nigeria needed to invest in boat building and ship repair dockyards, as well as “vigorously enforce the Nigeria content policy in ship and boat building as well as repairs in the country”. In addition, he called for increased collaboration between maritime training institutions and the industry in research, saying this should be intensified to enable the country meet challenges of current and future technology. He explained that mitigation for maritime safely, prevention and control of environmental pollution in Nigeria’s territorial waters should include frequent safety orientation to boat operators. According to him, "monitoring and strict enforcement of material and domesticated International Maritime Organization by the appropriate government body should also be included.

2015 November, SweetcrudeReports

Freight

Nigerian vessels to get priority in tenders from 2016 窶年CDMB

Cargo ship

KUNLE KALEJAYE

he Nigeria C o n t e n t Development and Monitoring B o a r d , NCDMB, says Nigerianbuilt and owned vessels would as from January 2016 be given first consideration in tenders. ?Executive Secretary of NCDMB, Mr. Denzil Amagbe Kentebe, ?disclosed this at the recent 5th edition of the Practical Nigerian Content event held in Yenagoa, Bayelsa State, saying the intervention would ensure the development of a thriving ship-building industry with all the benefits in job creation, retention of

revenue and technology acquisition. He said ?the board was now well-positioned to galvanise the industry towards local construction, repairs and maintenance of marine vessels and rigs. "In the area of asset ownership, our marine services strategy and offshore rig acquisition Strategy has created a new wave of indigenous owners of marine assets servicing the oil and gas industry. "The growth in number of Nigerian-owned assets has also resulted in significant growth in utilisation of Nigerian financial, legal and insurance services handling marine services and drilling contract transactions. "More Nigerians are now

employed as cadets, engineers, rig managers, drillers etc. on marine vessels and rigs," he said. Commenting on human capital development, the NCDMB Executive Secretary said the board's ?training and attachment scheme has enabled thousands of Nigerians to acquire relevant skills and many of those involved are now gainfully employed in the oil and gas industry. "We have been training and empowering youths to be self-reliant, create wealth, generate income and contribute to overall national development. "The Board is embarking on establishment of Training Centres of Excellence, to provide world

class facilities for oil and gas trainings within Nigeria. "Over the next two years, we expect sustained decrease in number of specialised training done abroad, as we strive to bring those training capabilities in-country," Kentebe also said. ?He explained that five years into the life of the Nigerian Oil and Gas Industry Content Development, NOGICD Act, Nigerian jobs and money are no longer being exported due to the available capacity to execute oil and gas jobs and services in Nigeria. He added: "We have successfully established indigenous oil and gas companies of the future with capacity to deliver high-end

services. "Fabrication of production platforms; testing of Hyperbaric Chamber for Subsea Control Modules & testing of Landing Strings; in-house bending of Hydraulic Tubes for Trees; advance Insulation technology; Wireline PipeRecovery are a few of the services that are now carried out in Nigeria. "After over 50 years of oil discovery and with over 14 Floating, Production, Storage & Offloading, FPSOs built for Nigeria in foreign yards, we are now constructing an FPSO integration yard at Ladol Lagos".

2015 November, SweetcrudeReports

Freight

Apapa port

NPA woos Canadian firms on green field ports KUNLE KALEJAYE

he Nigerian P o r t s Authority, NPA, has ? u r g e d Canadian firms to show more interest in the development of green field ports and capacity building to help bring Nigeria's port system to international

MKPOIKANA UDOMA

he Association of Nigerian Licensed Customs Agents, ANLCA, Onne Chapter in Rivers State, has dismissed allegations that there was widespread fraud and malpractices by the officers of the Nigerian Customs Services, NCS, at the Onne Command of the NCS. Recall that some clearing and forwarding agents at the Onne seaport had reportedly

standard. Making the call before the Canadian Deputy High Commissioner, who visited the NPA corporate headquarters in Marina, Lagos, the NPA managing director, Malam Habi Abdullahi, said more Canadian firms were welcome to take advantage of the numerous investment opportunities presented by the successful reform of the

Nigerian port system. He stated that at present, the NPA has a contract with a Canadian firm handling the proposed 25year port master plan and some ICT projects, but he said more Canadian firms were needed in Nigeria. He added that the NPA was committed to the 25year port master plan and would want the Canadian firm handling it to urgently

conclude its assignment as the master plan would chart a course for the future of the ports. Malam Habib took advantage of the visit to invite both local and foreign investors to the ports as the Nigerian economy was vibrant, attractive and robust. On his part, the Deputy High Commissioner, Mr. Lajos Arendas, expressed

ANLCA denies alleged fraud by Customs officers accused officers and men of the NCS of malicious fraud and corruption while exercising their duties at the port. Onne Chapter Chairman of the association, Mr. Kingsley Offor, who debunked the allegations while speaking with journalists in Onne, denied that the Command especially at the gates of the

Federal Ocean Terminal, FOT, usually delayed documentation procedures from agents deliberately, in order to extort money from them. He called on those peddling the rumours, whom he described as "faceless persons", to desist from such or face the wrath of the association.

â&#x20AC;&#x153;Those allegations are baseless and unfounded, emanating from cowards. He that goes to equity must do so with clean hands. "Agents must do the right thing, pay the correct duty and Customs are bound to comply to smooth cargo or container clearance at the port.â&#x20AC;? The ANLCA boss

delight at the visit having just taken over the responsibility and said that his mission was to further improve the already existing relationship with Nigeria. He said Canada plays host to many Nigerian students and that the visit has challenged to fashion out more ways to attract Canadian firms into the Nigerian port industry.

explained that Onne Port chapter of ANLCA, under his watch as the chairman of the body, had vowed to protect and improve the interest and welfare of its members who are genuinely doing the right thing in cargo documentation and clearance at the Onne Port. He enjoined genuine members of the association to always declare the right items and pay the right duty to the Customs as required by the law.

2015 November, SweetcrudeReports

Freight

Nigeria needs seamless trade in maritime sector, says NIMASA

Container terminal

KUNLE KALEJAYE

he Nigerian Maritime Safety a n d Administrative A g e n c y , NIMASA, says the country needs to facilitate seamless trade in the maritime sector ?due to the dwindling price of

crude oil in the international market. According to the agency, the seamless trade could be realised through effective and healthy collaboration with relevant government ?agencies. NIMASA's Acting Director General, Mr. Haruna Baba Jauro, stated this as reiterated the agencyâ&#x20AC;&#x2122;s commitment to

collaborating with the Nigerian Customs Service to ensure seamless trade facilitation in the country. Jauro spoke when the Comptroller General of Customs, CGC, Col. Hameed Ali (rtd), led members of the Customs management to NIMASA on a familiarisation visit in Lagos.

The NIMASA boss said that the agency has put in place a number of measures, including the satellite surveillance system, and committed itself to a number of strategic partnerships with the military to enhance security on Nigerian waters with the ultimate aim of engendering a friendly business environment.

Jauro counsels crew members on safety

cting Director General of the Nigerian Maritime Administration and Safety Agency, NIMASA, Haruna Baba Jauro, has urged crew members to observe increased caution during navigation in Nigerian waters. According to him, such caution becomes the more necessary around terminals. Jauro disclosed this during an inspection of the scene where two vessels recently collided leading to the death of a crew member. Three crew members were rescued from the collision by the NIMASA search and rescue personnel while rescue operation is still on for eight other crew members.

Two vessels, MT Elixir and MT Tank, had collided midstream about 65 miles from shore, just 10 nautical miles south west of the Bonga FPSO near Warri, Delta State. The acting director general of NIMASA directed comprehensive rescue operation and ordered a thorough investigation into the incident to ascertain the remote and immediate causes. The three rescued crew members are still receiving treatment at a clinic in Warri at the behest of NIMASA while the body of the deceased was deposited at the mortuary

"The country needs to facilitate seamless trade in the maritime sector especially now given the dwindling price of oil. â&#x20AC;&#x153;NIMASA needs to partner with the Nigeria Customs in order to improve trade facilitation and also ensure that various loopholes through which Nigeria is losing revenue in these areas are blocked," he said. Col. Hammed Ali explained that his visit was to strengthen the existing relationship between the Nigeria Customs Service and NIMASA, noting that there were various areas of their functions that needed collaboration. He said that since NIMASA is the major regulator of shipping in the country, there was need to synergise with it in order to ensure that operators in the sector abide strictly by the laws of the country.

2015 November, SweetcrudeReports

Motoring

2015 November, SweetcrudeReports

10 most expensive sports cars ever sold S

hares in the Italian luxury car maker Ferrari closed at $55 on it market debut this week. With an IPO price of $52 a share, the sale raised $893.1 million for parent company Fiat Chrysler. To mark the event, CNBC takes a look at some of the most expensive luxury sports cars ever produced. By Luke Graham, special to CNBC

W Motors Lykan Hypersport: $3.4 million Just seven Lykan Hypersports have been sold. The manufacturer claims it has a top speed of 245 mph and can go from 0-62mph in

2.8 seconds. Part of the hefty price tag is due to the diamondencrusted headlights and taillights with built-in sapphires.

Lamborghini Sesto Elemento: $2.2 million

Maybach Exelero: $8 million The Exelero was designed as a oneoff in 2004 by Maybach for Fulda Tires to test new tires. The car, which has 700 horsepower and a

twin turbo V12 engine, was bought from Maybach in 2011 by rap artist Birdman (real name Bryan Williams) for $8 million. The car can allegedly go from 0-60mph in 4.4 seconds and has a top speed of 218mph.

The Sesto Elementoâ&#x20AC;&#x2122;s 5.2 liter V10 engine creates 570 horsepower and most of the car is made from lightweight carbon fiber. Just 20 cars

were produced between 2011 and 2013 by Italian carmaker Lamborghini and were intended for track use only.

Koenigsegg CCXR: $2.173 million Lamborghini Veneno Roadster: $4.5 million This limited edition version of the Lamborghini Veneno was produced to celebrate the 50th anniversary of the car-

maker. Only nine cars were made in 2014. It boasts a top speed of 221mph and can accelerate from 0-62mph in 2.9 seconds.

The CCXR is an environmentally-friendly variant of Koenigsegg CCX, as it uses ethanol biofuel. The special properties of the fuel also allow the car to produce a huge 1,004 horsepower. CONTINUES ON PAGE 41

2015 November, SweetcrudeReports

Motoring

10 most expensive sports cars ever sold CONTINUED FROM PAGE 40

Ferrari 599XX: $2 million The 720 horsepower 599XX is not road legal, and can only be used on tracks, but Ferrari still sold a limited run of 29 cars in 2010. It’s also exceptionally fast: it completed a lap of the 20.83km

Nordschleife circuit in Germany in six minutes and 58.16 seconds, the second fastest time for a production-derived sports car.

Ferrari LaFerrari: $1.5 million First produced in 2013, the LaFerrari combines a 6.3 liter V12 engine with 120kW electric motor to produce 950 brake horsepower. This technically makes the LaFerrari an environmentally friendly hybrid vehicle; the electric motor reduces the car’s fuel consumption by 40 percent.

Aston Martin One-77: $1.8 million Just 77 units of this car were sold by James Bond’s favorite auto-maker in 2010. Aston Martin claimed the car, with its light-weight carbon fiber chassis and 750 horsepower V12 engine, had an estimated top speed of 200mph.

Porsche 918 Spyder: $929,000.00

Koenigsegg Agera R: $1.6 million Debuting in 2011, the Agera R can accelerate from 0–62mph in 2.8 seconds and has a theoretical top speed of 273 mph. It also set several land speed records for a two-seat production car: it can go from zero to 300 kilometers per hour then back to zero in 21.19 seconds.

This hybrid car produces a total of 887 horsepower using a 4.6 litre V8 engine and two electric engines. Porsche made only 918 cars and sold them all in 2014. However, Porsche issued three separate recall notices due to the faults with the front and rear control arms and the wiring.

Technology

2015 November, SweetcrudeReports

Logging W

ell logging, also known as borehole logging is the practice of making a detailed record (a well log) of the geologic formations penetrated by a borehole. The log may be based either on visual inspection of samples brought to the surface (geological logs) or on physical measurements made by instruments lowered into the hole (geophysical logs). Some types of geophysical well logs can be done during any phase of a well's history: drilling, completing, producing, or abandoning. Well logging is performed in boreholes drilled for the oil and gas, groundwater, mineral and geothermal exploration, as well as part of environmental and geotechnical studies. Wireline logging The oil and gas industry

uses wireline logging to obtain a continuous record of a formation's rock properties. Wireline logging can be defined as being "The acquisition and analysis of geophysical data performed as a function of well bore depth, together with the provision of related services." Note that "wireline logging" and "mud logging" are not the same, yet, are closely linked through the integration of the data sets. The measurements are made referenced to "TAH" - True Along Hole depth: these and the associated analysis can then be used to infer further properties, such as hydrocarbon saturation and formation pressure, and to make further drilling and production decisions. Wireline logging is performed by lowering a 'logging tool' - or a string of one or more instruments - on the end of a wireline into an oil well (or borehole) and

Wire logging recording petrophysical properties using a variety of sensors. Logging tools developed over the years measure the natural gamma ray, electrical, acoustic, stimulated radioactive responses, electromagnetic, nuclear

magnetic resonance, pressure and other properties of the rocks and their contained fluids. For this article, they are broadly broken down by the main property that they respond to. The data itself is recorded

either at surface (real-time mode), or in the hole (memory mode) to an electronic data format and then either a printed record or electronic presentation called a "well log" is provided to the client, along with an electronic copy of the raw data. Well logging operations can either be performed during the drilling process (see Logging While Drilling), to provide real-time information about the formations being penetrated by the borehole, or once the well has reached Total Depth and the whole depth of the borehole can be logged.

eal-time data is recorded directly against measured cable depth. Memory data is recorded against time, and then depth data is simultaneously measured against time. The two data sets are then merged using the common time base to create an instrument response versus depth log. Memory recorded depth can also be corrected in exactly the same way as real-time corrections are made, so there should be no difference in the attainable TAH accuracy. The measured cable depth can be derived from a number of different measurements, but is usually either recorded based on a calibrated wheel counter, or (more accurately) using magnetic marks which provide calibrated increments of cable length. The measurements made must then be corrected for elastic stretch and

Drill logging

CONTINUES ON PAGE 43

2015 November, SweetcrudeReports

Technology

Logging CONTINUED FROM PAGE 42

temperature. There are many types of wireline logs and they can be categorized either by their function or by the technology that they use. "Open hole logs" are run before the oil or gas well is lined with pipe or cased. "Cased hole logs" are run after the well is lined with casing or production pipe. Wireline logs can be divided into broad categories based on the physical properties measured. History Conrad and Marcel Schlumberger, who founded Schlumberger Limited in 1926, are considered the inventors of electric well logging. Conrad developed the Schlumberger array, which was a technique for prospecting for metal ore deposits, and the brothers adapted that surface technique to subsurface applications. On September 5, 1927, a crew working for Schlumberger lowered an electric sonde or tool down a well in Pechelbronn, Alsace, France creating the first well log. In modern terms, the first log was a resistivity log that could be described as 3.5meter upside-down lateral log. In 1931, Henri George Doll and G. Dechatre, working for Schlumberger, discovered that the galvanometer wiggled even when no current was being passed through the logging cables down in the well. This led to the discovery of the spontaneous potential (SP) which was as important as the ability to measure resistivity. The SP effect was produced naturally by the borehole mud at the b o u n d a r i e s o f permeablebeds. By simultaneously recording SP and resistivity, loggers could distinguish between permeable oil-bearing beds and impermeable nonproducing beds. In 1940, Schlumberger invented the spontaneous potential dipmeter; this instrument allowed the calculation of the dip and direction of the dip of a layer. The basic dipmeter was later enhanced by the resistivity dipmeter (1947) and the continuous resistivity dipmeter (1952). Oil-based mud (OBM) was first used in Rangely Field, Colorado in 1948. Normal electric logs require a

conductive or water-based mud, but OBMs are nonconductive. The solution to this problem was the induction log, developed in the late 1940s. The introduction of the transistor and integrated circuits in the 1960s made electric logs vastly more reliable. Computerization allowed much faster log processing, and dramatically expanded log data-gathering capacity. The 1970s brought more logs and computers. These included combo type logs where resistivity logs and porosity logs were recorded in one pass in the borehole. The two types of porosity logs (acoustic logs and nuclear logs) date originally from the 1940s. Sonic logs grew out of technology developed during World War II. Nuclear logging has supplemented acoustic logging, but acoustic or sonic logs are still run on some

combination logging tools. Nuclear logging was initially developed to measure the natural gamma radiation emitted by underground formations. However, the industry quickly moved to logs that actively bombard rocks with nuclear particles. The gamma ray log, measuring the natural radioactivity, was introduced by Well Surveys

Inc. in 1939, and the WSI neutron log came in 1941. The gamma ray log is particularly useful as shale beds which often provide a relatively low permeability cap over hydrocarbon reservoirs usually display a

hole logging to Lane-Wells. Nuclear logs continued to evolve after the war. The nuclear magnetic resonance log was developed in 1958 by Borg Warner. Initially the NMR log was a scientific success but an

higher level of gamma radiation. These logs were important because they can be used in cased wells (wells with production casing). WSI quickly became part of Lane-Wells. During World War II, the US Government gave a near wartime monopoly on open-hole logging to Schlumberger, and a monopoly on cased-

engineering failure. However, the development of a continuous NMR logging tool by Numar (now a subsidiary of Halliburton) is a promising new technology. Many modern oil and gas wells are drilled directionally. At first, loggers had to run their tools somehow attached to the

drill pipe if the well was not vertical. Modern techniques now permit continuous information at the surface. This is known as logging while drilling (LWD) or measurement-while-drilling (MWD). MWD logs use mud pulse technology to transmit

data from the tools on the bottom of the drill string to the processors at the surface. Electrical logs Resistivity Log Resistivity logging measures the subsurface electrical resistivity, which CONTINUES ON PAGE 44

2015 November, SweetcrudeReports

Technology

CONTINUED FROM PAGE 43

is the ability to impede the flow of electric current. This helps to differentiate between formations filled with salty waters (good conductors of electricity) and those filled with hydrocarbons (poor conductors of electricity). Resistivity and porosity measurements are used to calculate water saturation. Resistivity is expressed in ohms or ohms\meter, and is frequently charted on a logarithm scale versus depth because of the large range of resistivity. The distance from the borehole penetrated by the current varies with the tool, from a few centimeters to one meter. Image log Image logs use a rotating transducer to measure acoustic impedance across the entire borehole wall.[6] This can then be used to identify the presence and direction of rock fractures, as well as understanding the dip direction of the stratigraphy. Porosity logs Porosity logs measure the fraction or percentage of pore volume in a volume of rock. Most porosity logs use either acousticor nuclear technology. Acoustic logs measure characteristics of sound waves propagated through the well-bore environment. Nuclear logs utilize nuclear reactions that take place in the down hole logging instrument or in the formation. Nuclear logs include density logs and neutron logs, as well as gamma ray logs which are used for correlation. [7] The

Logging basic principle behind the use of nuclear technology is that a neutron source placed near the formation whose porosity is being measured will result in neutrons being scattered by the hydrogen atoms, largely those present in the formation fluid. Since there is little difference in the neutrons scattered by hydrocarbons or

water, the porosity measured gives a figure close to the true physical porosity whereas the figure obtained from electrical resistivity measurements is that due to the conductive formation fluid. The difference between neutron porosity and electrical porosity

measurements therefore indicates the presence of hydrocarbons in the formation fluid. Density The density log measures the bulk density of a formation by bombarding it with a radioactive source and measuring the resulting gamma ray count after the effects of Compton Scattering and Photoelectric absorption. This bulk density can then be used to determine porosity. Neutron porosity The neutron porosity log works by bombarding a formation with high energy epithermal neutrons that lose energy through elastic scattering to near thermal levels before being absorbed by the nuclei of the formation atoms. Depending on the particular type of neutron logging tool, either the gamma ray of capture, scattered thermal neutrons or scattered, higher energy epithermal neutrons are detected The neutron p o r o s i t y l o g i s predominantly sensitive to the quantity of hydrogen atoms in a particular formation, which generally corresponds to rock porosity. Boron is known to cause anomalously low neutron tool count rates due to it having a high capture cross section for thermal neutron absorption.[9] An increase in hydrogen concentration in

clay minerals has a similar effect on the count rate. Sonic A sonic log provides a formation interval transit time, which typically varies lithology and rock texture but particularly porosity. The logging tool consists of a piezoelectric transmitter and receiver and the time taken to for the sound wave to travel the fixed distance between the two is recorded as an interval transit time. Lithology logs Gamma ray A log of the natural radioactivity of the formation along the borehole, measured in API, particularly useful for distinguishing between sands and shales in a siliclastic environment. This is because sandstones are usually nonradioactive quartz, whereas shales are naturally radioactive due to potassium isotopes in clays, and adsorbed uranium and thorium. Self/spontaneous potential The Spontaneous Potential (SP) log measures the natural or spontaneous potential difference between the borehole and the surface, without any applied current. It was one of the first wireline logs to be developed, found when a single potentialelectrode was lowered into a well and a potential was measured

Community

2015 November, SweetcrudeReports

Oil spill

NOSDRA rolls out new oil spill compensation guideline KUNLE KALEJAYE

he National Oil Spill Detection and Response A g e n c y , NOSDRA, has come out with a new oil spill compensation guideline that would effectively address the needs of affected persons and communities and guide the government in terms actions in the event of an oil spill. A copy of the new compensation guideline o b t a i n e d b y SweetcrudeReports, quoted the Director General of NOSDRA, Peter Idabor, as identifying lack of independent 'third party' observer as one of the main shortcomings of the existing compensation process. Other short comings include inadequate community representation during the investigation process which has impacted negatively on accountability

and bringing about disputes. To address these short comings, NOSDRA in the document said that an extensive field research regarding oil spill compensation mechanism was initiated to enable the planing of an informed and comprehensive approach to problem solving. The core principles of the new oil spill compensation system, according to the document, is that the process will be accessible and accountable at all stages, ensuring that all stakeholders understand the process and their options, in order to avoid grievances arising from wrong assumptions and unrealistic expectations. "The new process will ensure all parties are adequately represented and have access to technological expertise in order to safeguard the interest of all stakeholders. "It will ensured that the new oil spill compensation process

adheres to strict scientific principles and follows best practice at all stages in order to guarantee accountability and transparency, and enhance trust in the process "The new oil spill compensation process will enable the allocation of responsibilities to the appropriate agencies or professional bodies, in order to ensure issues are identified and dealt with as

efficiently as possible, and avoidable obstacles minimised," NOSDRA stated. Recognising that the oil and gas sector in Nigeria is the main driver of the country's economy, NOSDRA said the new compensation process will ensure that the industry operations are not undermined. The new process will ensure an efficient oil spill

The new oil spill compensation process will enable allocation of responsibilities to the appropriate agencies or professional bodies, in order to ensure issues are identified and dealt with as efficiently as possible, and avoidable obstacles minimised

notification mechanism that will allow citizens and oil companies to report spills to NOSDRA within 24 hours of the incident. NOSDRA, in the new process, will review the current Joint Investigation Visit, JIV practices; assembling appropriate professionals and coordinating the facilitation of the JIV procedure?; determine the amount of compensation based on findings of single demand and impact assessment among others. The draft concludes by stating that NOSDRA will commission further research and gather further advice on practical tools deterring bogus claims to ensure that the interests of all parties are balanced and taken into consideration.

2015 November, SweetcrudeReports

Community

he international n o n governmental organisation, A m n e s t y International, has called on the Federal Government to f a s t t r a c k t h e implementation of the U n i t e d N a t i o n s Environment Programme, UNEP, report on Ogoniland. Mr Mark Dummett, Business and Human Rights Researcher, Amnesty International made the call in Abuja, saying the report was mainly on how to clean up oil spills in the land caused by the activities of the S h e l l P e t r o l e u m Development Company. The UNEP report, released on August 4, 2011, showed hydrocarbon pollution in surface water throughout the creeks of Ogoniland and up to eight centimetres in groundwater that fed drinking wells. UNEP said that the environmental restoration of Ogoniland was possible but could take 25 to 30 years because of the wide extent of contamination. One of the main contents of the report was the establishment of a Restoration Fund for Ogoni with an initial one billion dollars by Shell and the Federal Government Dummett said President Muhammadu Buhari should keep to his campaign promise of implementing the report. “This should be a model for the whole of oil producing states of Niger-Delta, we should not be talking about Ogoniland alone but all of them. “I can understand with the government that the cleaning up of Ogoniland is a complicated issue which will take time to implement. “But the government is going ahead to see how it will do the clean up,” he said. The official said that government’s effort should not serve as an excuse for Shell not to do its part by cleaning up polluted sites. He said that Shell, one of the world richest and powerful companies, should be faster on the remediation operations at the oil spill sites, especially the most affected communities. The oil spill sites, according to him, are at the Bomu Manifold, Barabeedom Swamp, Okuluebu and Boobanabe. “Shell should not ignore the pollution in those areas, whatever the government is doing in term of implementation of the UNEP report is part of the government responsibility. “Shell and Federal Government have a clear responsible to clean up oil

Ogoniland: Group urges govt to fast track UNEP report implementation

Ogoni community

Shell, one of the world’s richest and powerful companies, should be faster on the remediation operations at the oil spill sites, especially the most affected communities

MKPOIKANA UDOMA

hairman of Eni Companies in Nigeria, Mr. Ciro Antonio Pagano and the Managing Director of Nigerian Agip Oil Company, NAOC, Mr. Massimo Insulla, says NAOC has so far assisted over 1,256 farmers with inputs and services delivery. They spoke during this year's Farmers Day celebration organised by the NAOC's Green River Project, GRP, at Obie/Obrikom in Ogba/Egbema/Ndoni Local

spills from its pipelines,” he said. President Buhari had on August 5 approved several actions to fast-track the report on the environmental restoration of Ogoniland. Some of actions approved by Buhari included the amendment of the official gazette establishing the Hydrocarbon Pollution Restoration Project, HYPREP, to reflect a new governance framework. The new governance framework now comprises a Governing Council, a Board

of Trustees and Project Management. Buhari also approved that the HYPREP Governing Council should be made up of representatives of the Ministry of Petroleum Resources, Federal Ministry of Environment and impacted states Other members of the council are oil companies, the Nigerian National Petroleum Corporation, representatives from O g o n i l a n d a n d representatives from the United Nations System.

Agip empowers 1,256 farmers in 120 communities Government Area of Rivers State. The GRP is an initiative of NAOC, which seeks to promote agriculture in four states of its operations, namely Imo, Rivers, Bayelsa and Delta states. The duo, in their separate speeches, disclosed that over 550 youths have been trained through various skill acquisition programmes while over 57 cooperative societies have been supported, in about

120 communities within its areas of operation. "It has always been our conviction that a better way of empowering the communities of the Niger Delta states is to intervene and empower them to realise their full economic potential by harnessing and adding value to their Godgiven resources. "That way, more employment opportunities will be generated within the communities, earning

capacities will be increased, and reduce restiveness in the communities. "The objective of the Green River Project is to expose the communities to the techniques of modern farming and provide them with necessary supports and tools that can assist to transform the vast land and swamp resources of the states into good economic value.”

Community

2015 November, SweetcrudeReports

E-mail: johniyene@yahoo.com

PRODUCTION SHARING CONTRACTS:

Septic Sores of A Nation’s Economy

Oil spill on farmland

Attempt to sell OML 11, affront on Ogoni people —MOSOP MKPOIKANA UDOMA

he Movement for the Survival of Ogoni People, MOSOP, says it is gravely disappointed at reports regarding attempts by some faceless Ogoni elements seeking divestment of OML 11, the oil concession covering Ogoniland, to their corporation. President of MOSOP, Mr. Legborsi Saro Pyagbara, stated this in Port Harcourt, claiming that enemies of Ogoni who are averse to the implementation of the Ogoni clean-up project, were at work using some local Ogoni chiefs, elites and politicians to cause crisis that would be unsuitable to carrying out the exercise. Pyagbara said that any attempt regarding oil d i v e s t m e n t , r e commencement of oil exploration and production activity in Ogoniland is an affront on the Ogoni people. According to him, "Coming at a time when the Ogoni people are sustaining efforts at urgent implementation of comprehensive remediation

and restoration of the hydrocarbon-ruined Ogoni environment before any other matter relating thereto may be negotiated, we consider the approach condemnable, provocative and assaulting to the collective interest of our people. "In so far as we are concerned, the attempt at this time is not only insensitive but also betrayal of our people. We insist that the issue of oil, including extraction resumption, cannot be a matter to be approached secretly and of a select few but would genuinely have the full participation of all Ogoni citizens. "We would thus warn this faceless group and similar interests to immediately halt the pursuit as the issue of divestment of OML 11 and resumption of oil production in Ogoniland is not on the Ogoni card for now but clean-up of the degraded Ogoni environment." MOSOP also accused the Shell Petroleum and Development Company, SPDC, of propagating seeds of discord among the Ogoni people. Pyagbara further reiterated that Ogoni will resist all

attempts to sell or buy the Ogoni oil block or resumption of oil extraction through the back door without the involvement of the people. MOSOP warned Shell that "it would be held responsible for whatever crisis that may rock Ogoniland if it further entertains the lures of these elements and their external masterminds". "It is our position that recommencement of oil production in Ogoniland in the face of the UNEP report on the community, which had validated our fears, would undoubtedly compound our woes if the environment is not first restored. "We are of the firm believe that with the acknowledged degree of contamination, the Ogoni environment, we are afraid, would be unable to stand re-start of mining of oil and gas in the area. "Oil production as we all know, cannot be carried out without pollution hence it will be double tragedy if another contamination is inflicted on an earlier one, which is yet to be remedied," it further stated.

n 1999, the Federal Military Government rolled out the Deep Offshore and Inland Basin Production Sharing Contracts Decree No. 9. It was amended by Decree No. 26 of 1999. The Law empowered the NNPC to enter into Production Sharing Contracts (PSCs) with oil producing companies. The features of the PSCs are that the contractor bears all cost of exploration and production without such costs being reimbursable where there are no finds of a commercial quantity in the acreage investigated. Where there are finds, cost becomes recoverable with crude oil with provisions made for: Tax Oil which deals with Petroleum Profit Tax, Royalties, operational licenses, etc; Cost Oil which is the oil taken out by the Contractor to cover capital investment and operational cost and, Profit Oil which is the balance after deducting Tax Oil and Cost Oil. This Profit Oil is what gets shared between the NNPC and the Contractors in predetermined proportions. Without any doubts Nigeria needed the PSCs to develop oil fields such as Erha, $3.5Billion, Agbami, $3.5 Billion, Bonga, $3.6 Billion and Egina, $3.1 Billion, among many others. Again, the 1999 Production Sharing Contracts Act was cloned from the Persian Gulf where it worked for the oil producing countries of that belt. In Nigeria, however, only the Oil Companies and NNPC officials profit from PSCs as the actual cost involved in developing the project is never ascertainable as volumes upon volumes of expense sheets are added by the oil companies in connivance with corrupt officials of the NNPC. Apart from the matter of costs, the volume of crude taken out as tax oil, cost oil and profit oil, is never measured in values of equivalence but in the deep gorges of greed, compromise and corruption. According to a Shell operative who worked on the Bonga project from inception, the Shell Petroleum Development Company of Nigeria, contractor for Bonga as Chevron was for Agbami, Exxon Mobil for Erha and TotalFinaElf is for Egina, recovered its investment in Bonga, nine months after selling Nigeria’s crude at an average $100 per barrel. However, nine years after Nigeria is still bleeding for Shell and greedy self serving elements at the NAPIMS-NNPC from the Bonga sore. How much is Nigeria losing to Chevron on the Agbami project or to Exxon Mobil from Erha? Who takes stock of the performance of these PSCs? Are they working for Nigeria or for some unconscionable public officials? Nigeria’s oil and gas business in general requires an overhaul. For more than eight years, Nigerians and the oil and gas industry worldwide has awaited the enactment of the Petroleum Industry Bill, the one piece of legislation that pundits forecast, would put the industry on track to perform optimally for the benefit of government, the IOCs, stakeholders, such as host communities and state governments as well as the operatives of all the sub-sectors and segments of the industry. And while Nigeria bleeds from the open sores of PSCs, she is starved of the injection of fresh Foreign Direct Investment as investors, unsure of the direction of the fiscal policy and the general course of the oil and gas industry in Nigeria, invest their funds in economies that are stable, predictable and secure. The present managers of the oil and gas industry in Nigeria and indeed the country’s economy, appear not to have come to terms with the reality that the elections have ended and that rhetoric must now be abandoned for the monumental task of giving the Nigerian voters the justification for the trouble they took in effecting the change of guards. What is more ominous for the Nigerian economy is that every time wasted in making sound policy decisions accrues to the benefit of the purveyors of shale gas and the producers and marketers of other alternative sources of energy, bolsters the investment folios of competitor nations like Angola who are adjudged ‘safe and investor friendly’ and fortifies our classification as an unserious nation that cannot even track and take accurate stock of its income streams.

2015 November, SweetcrudeReports