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Contents 4 7 13 28 30 32 34 37 40 43 46 49 51
COVER
Nigeria’s flirtation with deregulation
OIL Why Senate has not passed PIB
FOCUS
Diezani harps on imperatives for deregulation
GAS
Pan Ocean leads war against gas flaring in Nigeria
FEEDBACK
Uncertainty looms over Shell Nigerian oil sales
POWER
Inadequate training has negatively impacted power sector
INSURANCE
Entry of Multinationals holds prospect for Insurance sector
LABOUR
Don’t test our will over deregulation
FINANCE Boosting petroleum education research, the PTDF way
SOLID MINERALS
Setting Nigeria’s mining on a sound technological footing
FREIGHT
But for concession, Nigeria’s port system would have collapsed
TECHNOLOGY
Modular petroleum refineries
COMMUNITY DEVELOPMENT JTF attack sparks tension in Peremabiri
Sweetcrude is a publication of Vanguard Media Limited
THE TEAM EDITOR
Hector IGBIKIOWUBO
DEPUTY EDITOR Clara Nwachukwu CORRESPONDENTS Victor AHIUMA-YOUNG Favour Nnabugwu Godwin ORITSE Yemie ADEOYE Jimitota ONOYUME Samuel OYANDOGHA Oscarline Onwuemenyi Emma Arubi GROUP BUSINESS EDITOR Omoh GABRIEL
PAGE LAYOUT/DESIGN
Francis AYO & Johnbull OMOREGBEE
Printed and Published by Vanguard Media Limited. Vanguard Avenue, Kirikiri Canal, P.M.B. 1007, Apapa.
Enquiries Call: 08051100256 Internet:
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D
eregulation has been part of the Nigerian lexicon for as lon g as most of us can remember, unf ortunately, it spark reminisces of pro posed increase in petroleum pump prices, threats of strike action and a glaring lack of political will by the government. Typical of its history in the last 10 years, Nigeria has onc e more resumed its flirtation with deregulati on of the downstream oil sector, with the govern ment pleading rising cost of subsidy payment s and plans to replace the current subsidy regime with a social safety net, while organized Lab our threatens strike a c t i o n t o r e s i s t i t . In ‘Focus’, we spoke with Diezani AlisonMadueke, Nigeria’s Pet roleum Minister who underscored the impera tives for deregulation of the downstream pet roleum sector. She explains answers questio ns on a number of concerns raised by org anized Labour. As a counter balance, we h ave provided ample coverage of the labour lea ders’ perspective on d e r e g u l a t i o n . We have kept faith wi th coverage of other spectrum of the Nigeria energy chain: oil, gas, feedback, insurance, lab our, finance, power, sol i d m i ner als , fre igh t, tec hn olo gy and community development , providing reportage of these sectors on an unparalleled scale. May we implore you to take advantage of the forthcoming 20th World Petroleum Congress, WPC scheduled for Decem ber, 2011 in Doha, Qatar, to get your compan ies and businesses pro file d in the D e c em ber ed itio n of Sweetcrude, which will be printed in Dubai, U A E . Similarly, we have partne red CWC for promotion of the Practic al Nigerian Content Forum scheduled to take place in Port Harcourt between the 25 and 27 October,
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Cover Story
4
Diezani Alison-Madueke
Queque for fuel at a filling station
Nigeria’s unending flirtation with deregulation HECTOR IGBIKIOWUBO
N
igeria has once again resumed its unending flirtation with deregulation while the dramatis personae – representatives of the federal government and that of organised labour rev up rhetoric around the subject. This round of rhetoric over deregulation of the downstream oil industry was sparked in June when the Governor’s Forum led by their chairman, Governor Rotimi Amaechi of Rivers State visited President Goodluck Jonathan to plead their inability to pay the proposed N18, 000 minimum wage. The governors suggested the removal of fuel subsidy to guarantee more revenue receipt into the federation account which would subsequently be split among the three tiers of
government. In August, as though on cue, Dr. Ngozi Okonjo Iweala, the minister of finance and head of the federal government’s economic management team followed through with the suggestion of the Governor’s Forum when she pleaded government’s inability to sustain payments of petroleum subsidy anymore. “There has been a lot of debate on fuel subsidies and we have all resolved that (removing it) is a good direction to go on. You have to leave it to us to decide when it is prudent to do so,” she told reporters. In its reaction to the minister’s comments, the Nigeria Labour Congress, NLC restated its opposition to any attempt to remove fuel subsidy noting that the proposition was provocative, especially considering the struggles the average Nigerian had to go through daily. “In the midst of mass suffering in spite of our huge natural resources and income, it is
There has been a lot of debate on fuel subsidies and we have all resolved that (removing it) is a good direction to go on. You have to leave it to us to decide when it is prudent to do so,” she told reporters
provocative for government to want to further increase the price of fuel. In fact, this is as good as cruel injustice against the Nigerian people,” a statement quoted Abdulwaheed Omar, the NLC president saying. Nigeria’s flirtation with deregulation actually started in the early 1990’s with Mr. Funsho Kupolokun, then Group Executive Director in charge of Corporate Investment at the Nigeria National Petroleum Corporation, NNPC, traversing the country to plead understanding over government’s plans to increase the pump price of petrol by a slim margin to meet rising refining costs. Thereafter, government’s inability to manage the four refineries and persistent smuggling of petroleum products across the border birthed massive importation and the element of subsidy as we know it today. Even though all manner of public commentators including Professor Tam David West, a former minister of petroleum resources who described
government’s subsidy payment claims as a fraud and Sam Aluko a renowned economist who also took exception to subsidy payment claims advancing arguments underscored by low refining costs, have successfully fed the unending cycle of arguments for and against subsidy removal, it would appear the worst culprit in this unending saga is the government. President Obasanjo’s pursuit of deregulation & 13 pump price hikes While the military administrations of the past could be excused for not being duly elected representatives of the people, same cannot be said of the democratically elected g o v e r n m e n t o f Pr e s i d e n t Olusegun Obasanjo whose administration on the 14th August 2000 set up a 34 member Special Committee on the Review of Petroleum Products Supply and Distribution
CONTINUES ON PAGE 5
Cover Story CONTINUED FROM PAGE 4 (SCRPPSD) drawn from various stakeholders and other interest groups to look into the problems of the downstream petroleum sector. Chief Obasanjo’s 8 year rule would subsequently witness 13 increases in the pump price of f u e l , a w h i m s i c a l implementation of the recommendations of the SCRPPSD and a glaring lack of political will to implement full blown deregulation. Prior to the setting up of the Committee, the downstream sector was characterized by the following problems: Scarcity of petroleum products leading to long queues at the service stations; Low capacity utilisation and refining activities at the nation’s refineries (poor state of the refineries); Rampant fire accidents as a result of mishandling of productsproducts adulteration; Pipelines vandalism; Large scale smuggling due to unfavourable economic products borders’ prices with the neighbouring countries; and Low investment opportunities in the sector. In October 2000, the Committee submitted its reports and some of the far-reaching recommendations of the committee accepted by the Government in its white paper includes: Stakeholders (marketers, transporters, dealers, industrial converters and others) are unhappy because of the shortages and the prevailing cost and price structure which lead to low returns on capital investment and encourage malpractices, which in turn hamper an efficient supply and distribution system; operational facilities at the depots and the pipelines should immediately be repaired; to prevent further malpractices, all coastal supplies of AGO through nominated company vessels should be stopped as subsidies to the target group (NEPA, Rigs operators) were not justified; restructuring of the NNPC and its subsidiaries with the setting up of the committee on that in the first quarter of 2001; dualisation of all roads leading to the refineries and depots to allow easy access and improve efficiency of operations; current efforts to resuscitate the Nigeria Railway system by Government should be sustained. Other recommendations adopted in the white paper are that: Government should deregulate and liberalise the import of petroleum products by other parties and that prices of products should be based on import parity to enhance and encourage the participation of other players other than the NNPC; privatisation of all four government refineries and
5
Nigeria’s unending flirtation with deregulation
Oil rig
Chief Obasanjo’s 8 year rule would subsequently witness 13 increases in the pump price of fuel, a whimsical implementation of the recommendations of the SCRPPSD and a glaring lack of political will to implement full blown deregulation
encouragement of the establishment of private refineries; expansion of loading capability of all marined-fed
depots; establishment of a pipeline management authority for the management of pipelines and depots, which will charge
both private and public users a tariff per throughput litre of products; downward review of N PA p o r t s c h a r g e s t o a comparable level with other ports in the world; immediate setting up of a Petroleum Products Pricing Regulatory Agency with sufficient autonomy to superintend the various phases of the proposal embodied in the report (SCRPPSD) especially the liberalisation of the downstream sector of the petroleum industry. In line with the government white paper, a Presidential Technical Campaign Committee on liberalisation of the downstream sector of the petroleum industry, headed by the then Special Assistant to the President on Petroleum and
E n e r g y m a t t e r s , Fu n s h o . Kupolokun went into action to sensitise the Nigerian public on the need for deregulation and liberalisation of the downstream sector. The result of that campaign which cost the state billions of naira, saw the Committee visiting State Gover nors, traditional rulers, various interest groups including labour, was that deregulation and liberalisation were the only viable options the Government could adopt to attract investments into the sector and to remove the recurrent and endemic problem plaguing the s e c t o r . On march 8th 2001, the Government set up the Petroleum Products Pricing Regulatory Committee (PPPRC) as an interim measure to carry out the functions of the PPPRA as recommended by the SCRPPSD while waiting for the enactment of the Act by the National Assembly for the setting up of the Petroleum Products Pricing Regulatory A g e n c y ( P P P R A ) . After series of meetings with the stakeholders and the interest groups, the PPPRC recognised that pricing is a condition precedent for deregulation and liberalisation. It therefore, commenced a phased liberalisation of the downstream sector by announcing the selling prices for PMS, AGO and HHK at N 26, N26 and N 24 per litre respectively on January 1st 2001. The consumption tax N 3.00 per litre of product was abolished while the import duty of N 1.50 per litre was introduced. The sale of crude to NNPC at $9.50 per barrel was raised to $18.00 per barrel. On 2nd July 2003, the import tax of N 1.50 per litre of products was removed to stabilise the selling prices earlier announced to encourage importation of products by other marketers. In June, 2003, the board of the PPPRA was inaugurated after the Act had been passed by the National Assembly and accented by Mr. President With the law establishing the PPPRA, the road to full deregulation and liberalisation of the downstream sector became open for all the stakeholders in the sector to play their parts according to the rules and guidelines as would be unfolded by PPPRA based on its functions.
CONTINUES ON PAGE 6
Cover Story
6
Oil refinery at night
Nigeria’s unending flirtation with deregulation CONTINUED FROM PAGE 5 Mounting cost of subsidy Sweetcrude checks revealed that FUEL subsidy cost the Nigerian state N1.3 trillion (about $8.38 billion) in the 2010 fiscal year alone, about 25 per cent of the entire budget expenditure for the year under review. Last year, the approved amended and supplementary budget amounted to N5.159 trillion (about $33.2 billion). Investigations have revealed that fuel subsidy incurred by the federal government may have exceeded the N1 trillion mark by the end of the third quarter, with indications that payments to petroleum products marketers may surpass 2010 levels at the end of the year. Government regulates the sale of Premium Motor Spirit, PMS and House Hold Kerosene, HHK, selling both at N55 and N40.90k per litre, ex-depot price respectively at the depots of the Petroleum Products Marketing Company, PPMC, a subsidiary of the state owned Nigerian National Petroleum Corporation, NNPC. The government, through the instrumentality of the Petroleum Products Pricing and Regulatory Agency, PPPRA allots quarterly imports quotas to the NNPC and petroleum products marketers and pay both parties the
differential between the landed cost and the approved pump prices under a subsidy regime. Checks however revealed that the petroleum products marketers have turned the subsidy payment regime into a huge racketeering and profiteering enterprise ripping the state off hundreds of billions each year under bogus subsidy claims for petroleum products they neither imported nor delivered to the pumps. Three quarters through 2011, independent checks revealed that outstanding subsidy payments amounts about N1 trillion, while ongoing r a c ke t e e r i n g s u r r o u n d i n g Kerosene supply and distribution appears set to raise subsidy payment claims to an all-time high by the end of the year. According to the PPPRA pricing template, even though petrol is sold at N55.90k and N65 per litre, ex-depot and pump price respectively, if deregulated, consumers would have to pay N143.63k per litre. Essentially, the subsidy element on current petrol price is N78.63k per litre. Similarly, although ex-depot and pump prices of House Hold Kerosene, HHK is N40.90k and N50 per litre respectively, if deregulated. Consumers would have to pay N155.27k per litre. Essentially, the subsidy element on current kerosene price is N105.27k per litre.
Three quarters through 2011, independent checks revealed that outstanding subsidy payments amounts about N1 trillion, while ongoing racketeering surrounding Kerosene supply and distribution appears set to raise subsidy payment claims to an all-time high by the end of the year.
Social safety net: In an exclusive interview with Sweetcrude, Diezani AlisonMadueke, the minister of petroleum resources disclosed that government was working on palliative measures to replace petroleum subsidy which she emphasised does not serve the purpose for which it was intended. She said the government designed an effective social safety net system to ensure that the massive volume of resources expended on subsidy payments annually is ploughed back to the provision of essential social/health amenities and services to the common man.
“The package would help guarantee improved maternal and child health services while also providing conditional cash transfer scheme to pregnant women in the country, a package which as you know is unprecedented our history. There is also provision for primary school feeding programme, youth employment package which also entails what we call active labour market and public works programs for youth. “The novel scheme also allows for electricity rebate, fuel voucher, equipment voucher among other items. Though details of the overall cost
implications are being finalised by the Ministry of Finance, suffice it to say that experience from abroad suggests that to establish an effective national safety net system in a country as large as Nigeria would require capital outlay of $100-$200 million annually for 3-4 years window depending on the envisaged design. As a first step, focus would be placed on designing the outlines and establishing a national registry to allow beneficiary identification. And later the focus would shift to the erection of other relevant building blocks which would spell out the c o n d i t i o n s f o r e l i g i b i l i t y, enrolment etc.” She enthused. Labour threats: Organised Labour has refused to enter discussions with the government over issues related to deregulation of the downstream, threatening to embark a nationwide strike action to resist attempts to deregulate the downstream. Leaders of Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN pointed out that the minimum conditions agreed with labour before total deregulation could be contemplated have not been met. In a communiqué released at the end of a 4-day Strategic Planning Synergy workshop in Ijebu-Ode, Ogun State, P E N G A S S A N s a i d government’s position that the deregulation of the downstream sector would foster private investments, participation and competition for petroleum products refining.
Oil Why Senate has not passed PIB – Mark
S
enate President David Mark Wednesday said the existence of d i f f e r e n t versions of the controversial Petroleum Industry Bill (PIB) has been the major hitch to the passage of the bill by the two arms of the National Assembly. The bill, which has generated a lot of interests among Nigerians, did not go beyond the first stage of clause-by-clause consideration in the two chambers before the Sixth Assembly wound up in June. Mark said while inaugurating the Senate Committee on Petroleum (Downstream): “The problem with the PIB was that when it showed up, there were so many versions”, adding that “as many as three or four versions were in the hands of senators and members of the House of Representatives.” He, however, described the PIB as “the Bible for the petroleum industry”, saying it was “necessary to get it off the ground if we are to build the sector and that is why it is necessary for cooperation between the legislature and
He, however, described the PIB as “the Bible for the petroleum industry”, saying it was “necessary to get it off the ground if we are to build the sector and that is why it is necessary for cooperation between the legislature and executive”.
executive”. He said since the entire economy of the country depends on the petroleum industry, the much talked about Vision 2020 would be a pipe dream “if we don’t get it right in the sector”. Mark, however, asked the committee to ensure that the PIB is worked upon as soon as possible to resolve all problems associated with it so that it could be passed into law by the seventh National Assembly without further delay. Chairman of the committee, Senator Magnus Abbe (PDP, Rivers), said he was aware of the circumstances surrounding the PIB and assured Nigerians that the committee would reach out to all stakeholders to ensure that the copy that would be presented would be only one version that would tackle all the problems in the sector. Other committees inaugurated Wednesday were those of Employment and L a b o u r , Environment and E c o l o g y ; Privatisation; Establishment; and Drugs and Narcotics.
7
igerian CONTENT INITIATIVE Dr. Ibilola Amao
Government Appointments, Human Resource Optimisation & Nigerian Content
A
young Nigerian graduate is offered a job by two organisations in Nigeria, government and a multinational; he makes a very easy choice in favour of the multinational. I would have thought that the youth will have had a struggle deciding which to choose but I am wrong. The young professional resolves to pursue his career with a multinational because he is guaranteed (an exciting career path, attractive compensation, meritous promotion and medium to long-term job security and satisfaction). As a Recruitment Consultant, involved in interviewing, Career Guidance and Counselling, as well as Youth Empowerment, it bothers me that our youths are no longer happy to consider a job with government as an opportunity to serve ones nation for so many reasons. I am asked, why work hard, slug it out and give your utmost best to a corporation that kicks out, flushes out or frustrates out its best? Where in this world do people give over 15 years of continuous service let alone 25 or 30+ years and rather than get rewarded by a meritous or long service award you get kicked out, humiliated and have your name splashed on the front pages of the dailies and then published on the internet for being fired or retired “ with immediate effect”? The Federal Government of Nigeria is going to have to take merit and long service as well as commensurate reward very seriously if our state owned organisations and Parastatals do not want to end up with a bunch of crooked-mediocre providing service because sensible and reasonable professionals are no longer convinced that Government is worth working for. There is a need to respect and appreciate experience, capabilities and competencies, employ and retain the best, promote merit and treat talent with honour and dignity. It is only then that our first eleven, best graduates and competent professionals will show preference for serving government without having any ulterior motive. The Nigerian government has been accused both locally and internationally of its many vices which include a lack of transparency and accountability in many of its most strategic businesses and operations. Allegations of non- meritous contract award, inflation of contract sums, misappropriation of funds and a lack of evidence of transparency and integrity in the sale of Nigerian crude oil on the spot market, refining of crude locally and the importation of finished products has plagued government in various accusations in the public domain. The excuse for corruption may lie in the fact that the best hands have not been groomed as patriotic citizens. Public officers have not been empowered enough, given the assurance of a glorious and worthwhile future with adequate compensation for judiciously managing the huge budget and account of the nations petroleum resources, guaranteed long service award and a celebrated retirement with a handsome retirement package. It is hoped that decision makers in Government will take time to ponder on the fact that a ministry such as National Petroleum Assets Management Agency (NAPAMA), National Petroleum Company of Nigeria (NPCN or NAPCON) or a corporation is as good as its human resources and no manner or quantity of restructuring can transform a Nation with frustrated, demoralised and disenchanted work force. Government needs to rethink its human resource strategies to ensure that the best professionals and graduates see choosing to serve in the public sector. Our best graduates and Nigerian professionals both local and in diaspora must be attracted to serve government if we must move forward as a nation. There is absolute need to draw a line no matter how thin between political appointees and career employees who are professionals in their respective fields. Career technocrats/professionals should not be cowed down by political appointees and frustrated out prematurely. They should be given leading roles to play in the strategic thinking, conceptualization, planning and execution of infrastructures needed for the industrial and economic transformation of the nation.
Oil
Shell’s Alaska Oil Plan Contested by Inupiat Village, Groups
M
ajor upstream development projects in Nigeria accruing to billions of naira may have been stalled as a result of the lingering delay in the passage of the Petroleum Industry Bill (PIB). The situation has become a growing concern as most service providers who incidentally are responsible for most oil industry workforce have confirmed the lull in contract awards owing to the refusal of International Oil Companies (IOC’s) from investing in key upstream development projects in the country. The IOC’s on their part have continually stated that they cannot afford to invest without a clear fiscal and regulatory terms to work with. That according to them can only be made available if the PIB is passed. Some Oil service providers, who spoke with Sweetcrude at the just concluded Africa Energy Week (AEW) in Accra, Ghana, said that the situation is threatening to wipe off the gains recorded so far in the implementation of the Nigerian content policy as most of the service firms have started massive staff lay off due to long period of redundancy. They also argued that the situation may have put the key targets and objectives of the Nigerian Content law on reverse course. Managing Director of DeltaAfrik, an indigenous Engineering Company Akin Odumakinde, while speaking on the evolution of local content policies among African governments, noted that the delay in the passage of the PIB has stalled key development projects expected to yield significant patronage for the local firms. He emphasised that local firms providing ser vices in the Oilindustry have been constrained to lay off over 80 per cent of their staff to cut overhead and keep afloat in a period of acute business lull. His words`` bids and proposals from the service providers that positioned to participate in the development major deepwater fields in Nigeria have also stalled with the projects as investors halted activities and wait for fiscal terms to be certain.`` Odumakinde said that following long period of inactivity, Nigerian petroleum industry has remained stagnant in the past five years when the crisis about the contents of the bill raged. He pointed at stalled development of Shell operated
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R
oyal Dutch Shell Plc (RDSA)’s U.S. approval for oil exploration in Alaska’s Beaufort Sea is being contested by groups including the Natural Resources Defense Council and an Inupiat village worried about the risk of spills. T h e N a t u r a l Re s o u r c e s Defense Council, based in New York, and Point Hope, a settlement on Alaska’s North Slope, were among a team that sued the Interior Department for deciding to allow the drilling, Holly Harris, an attorney for the environmental law firm Earth justice, said today on a conference call with reporters.
Nigeria Oil Industry
PIB: Nigerian upstream oil projects stalled ...Indigenous firms to lay off 80% workforce YEMIE ADEOYE Bonga Southwest field and Total operated Egina field as two key deepwater projects that should have engaged the industry service providers if they were not caught in the crisis surrounding disputes over the PIB. He said while the final investment decision on the Egina deepwater field was waiting for fiscal terms in the PIB to be resolved, Shell has also put
development of its Bonga Southwest on hold following its sharp disagreement with government over the fiscal changes in the PIB. However, reports that the PIB which prescribed a comprehensive fiscal overhaul of Nigerian petroleum laws has been the subject of heated debate in the industry since its introduction to the National Assembly last five years. The disputes have led to innumerable reviews and
inter ventions in the law, resulting in protracted delays that have become difficult resolve given the new composition of the national Assembly. Also speaking, Barrister Soji Awobade, from AELEX legal services, said the indices of performance in the implementation of the Nigerian Content Law were not yet visible in the industry, faulting figures on percentage progress in the policy realization.
President Osama’s administration failed to ensure the environment will be protected during drilling, as required by a law regulating offshore development, Harris said. Earth justice filed the petition in the U.S. 9th Circuit Court of Appeals for 12 environmental organizations and Point Hope. “Approving this kind of risky behavior without an adequate environmental review, and without public input is unlawful,” Harris told reporters. “We are going to do everything we can to bring this to the” court’s attention. The Hague-based company was cleared by the Bureau of Ocean Energy Management, Regulation and Enforcement on Aug. 4 to begin exploring in July 2012 and tap Arctic leases it bought in 2005 and later years, in which it has invested about $4 billion.
Shell Alaska
Oil
Shell says no plans for downstream investment in Nigeria Gas flaring in the Niger Delta
A
FTER series of appeals to oil majors and o t h e r stakeholders in the oil sector including policy incentives to encourage the rebuilding of the Nigerian domestic refining capacity, Shell Petroleum Development Company (SPDC) has announced that it does not have any such investment plan for the country. According to the company low returns on downstream investments and peculiar
situation in some African countries where government regulates prices of petroleum products are parts of the constraints which have necessitated the company’s decision. The hint was dropped by Mr. Mike Mullier, Shell’s G l o b a l L e a d e r, C r u d e Trading, during a chat with newsmen on the sidelines of the just ended Africa Energy Week in Accra, Ghana after delivering the company’s presentation. He opined that Shell no longer considers downstream crude processing a growth area,
adding that the company has already saturated its downstream portfolio. Some of the fears, he said, had made Shell shut down its downstream operations long ago. He said the company has no intention of expanding it downstream portfolio in Africa where, he said, Shell still retained some refining businesses in few countries. According to him, the company ’s investment direction is currently focused in high profit areas that offer growth opportunities and make adequate returns on investors’ funds. The statement by Mr.
The law is Expected to facilitate deregulation of the downstream sector to dismantle state sponsored subsidy and guarantee commercial viability of investments in refining of Crude oil
9
Mullier may have sealed off hopes of visible private investment in domestic refining, given that Shell is Nigeria’s biggest petroleum industry operator and produces nearly half of the country’s 2.5 million barrels per day. Shell also operates Nigeria’s biggest petroleum assets under joint venture and production sharing agreements with the Nigerian National Petroleum Corporation (NNPC). The company is always seen as the strategic factor in re a l i z i ng g o ve r n m e n t ’ s objectives and its performance spell either failure or success of official policy programmes in the industry given the size and spread of its operations. The statement also came a week after Akwa Ibom State government declared withdrawal from the highly advertised Amakpe Refinery sited in the state which has been highly rated ahead of over 18 refinery licencees who have not scratched the ground since securing their project approvals. The chain of investment failures and apathy in the downstream petroleum industry came despite a presidential directive on producers in the country to refine 50 percent of their output in-country. It has been said that part of the ongoing reforms in the industry and the consequent formulation of the controversial Petroleum Industry Bill (PIB) is to liberalize the downstream sector of the industry to encourage private investment in local refining. The law is expected to facilitate deregulation of the downstream sector to dismantle state sponsored subsidy and guarantee commercial viability of investments in refining of crude oil.
Get your company profiled in the September to December, 2011 editions of and reach an estimated 100,000 visitors to this year's WPC, and a monthly average 3.72 million visitors to our website http:www.vanguardngr.com. Call: Hector on +234 805 1100 256, Ubong on +234 705 656 5800 or Email: heckie4real@yahoo.com, iubong@yahoo.com
Oil
10
‘Oil is curse to
Nigeria’
An Oil rig
M
r. Richard Dowden, Director of African S o c i e t y, London, undertook a cursory assessment of the state of affairs in Nigeria Tuesday, insisting that oil is a curse to Nigeria. Dowden, who was guest speaker at Independent Anniversar y Lecture in Abuja, told a gathering of top government functionaries, including members of Federal Executive Council, led by President Goodluck Jonathan, Speaker of House of Representatives, governors and others, that the discovery of oil was a curse to Nigeria, as it had led to widespread corruption and looting of resources by corrupt government officials. He stated that along with over-dependence on oil, such factors as endemic corruption, bad politics, failed economic policies, favoritism for appointments and the countr y ’s bad reputation have combined to continue to slow down the pace of development. The lecturer, who added that Nigeria’s economic woes began with the advent of oil which, according him, led to a lack of initiative by
Because there are lots of linkages, things are not done well, goods have to be cleared from other countries and transfered to Nigeria
Victoria Ojeme successive governments, noted that major players in the private sector also contributed to the country’s poor economic indices, with the frequent use of underhand tactics such as tax evasion. In his paper entitled, “Nigeria in Transformation”
delivered at Tafawa Balewa House headquarters of the Foreign Affairs Ministry, Dowden said that for Nigeria to retur n to the postindependence era in which it recorded trade surplus, investments must be made with a view to exporting cash crops. Singling out members of the National Assembly, who he criticised for earning the highest pay in the world as congressmen, Dowden warned that the country could not continue with the socio-economic disparity between the rich and poor. “I believe oil is a curse, it is like “King Midas.” When
King Midas was king, he wanted everything he touched to turn to gold. Ever ything he touched turned to gold but he starved to death. When he touched food and drinks, it turned to gold. Did oil make this country rich? No, to the contrary.” T h e Pr e s i d e n t , w h i l e pledging improved power supply, insisted that he could instigate change by building institutions and convincing the best brains in Diaspora to return home to contribute to national development. He declared that on completion of his reform agenda, Nigeria will end its run with budget deficits and return to a path of stability, completely changing its oil dependent status. Jonathan said: “When I see people in my office, I always say that only a few people needed to see me if the system is working. Ministers don’t need to see me if the system works. “Ministers have a budget approved by the National Assembly to run their ministries, their recurrent and their capital project. If they are competent, they can run the ministry in a way that Nigerians will know that they are working,” he added.
“A lot of things have not been done properly, we have a lot of negative issues, because of this probably because a lot of things need the intervention of the president, you probably want to alter something that is not good enough. Now we are in the process of carrying out such corrections, once we are through which such restructuring, Nigeria, will get to where we are going. I have no fears about that. “The problem of oil which Dowden raised is true. Any country that is blessed with minerals tends to breed corruption. The extractive industry tends to breed corruption. I made the statement somewhere before, that in ten years or thereabout, we should be able to run our government without oil. And we can do it. “If you look at the size of Nigeria, all the general imports that come into Africa, 20 percent of it come to this country. If we have well managed ports alone, the income we will make as a government will be enough. “Because there are lot of linkages, things are not done well, goods have to be cleared from other countries and transfers to Nigeria. And if we fix a number of the things we must fix, people may comp lai n t hat i t s politics, but we must do these things, we have no choice. By the time all these institutions are fixed in ten years we will run government without oil. “For us as a people, we must look at others to learn from where they did well and forget where they didn’t do well. He wrote in his book and he made the statement here that everybody thought that the country is going to collapse, that Nigeria is going to be a failed state. But Nigeria is moving. “He said it that we have very good people, some in the academics, he asked that why is it that we cannot fixe our own country and that is the kernel. We have fantastic people all over the world, for us to have 25 thousand doctors working in America, the questions is how can we use these talents and brains we have to move this country forward? “I promise Nigerians that surely, we will move this country forward. We will employ all we have and build strong institutions to move this country forward.”
Submar Ad BOLAJI AJALA
Oil
12 Disaster looms in Jesse over illegal oil bunkering, crude refineries
T
he traditional ruler of Jesse Kingdom has
raised alarm over the threat posed to the community by oil spills caused by illegal oil bunkering
and
crude
refineries in Jesse and other oil producing communities in Delta State. Fo l l o w i n g r e p o r t s t h a t farmlands had been polluted along River Ethiope, the t r a d i t i o n a l r u l e r, H R M , Erhiekevwe I, Ovie of Idjerhe Kingdom,
alerted
the
Divisional Police Officer, DPO, Jesse Police Station, Jesse and the Joint Task Force, JTF/Oil Pipeline Surveillance Unit,
Nigeria Oil Facilities
whose officials and along with men from the palace went on inspection
Shell Nigeria assets sale head for messy conclusion
A
buja- Shell’s oil block sales in Nigeria are heading for a m e s s y conclusion due to a tussle over who operates the fields, a Reuters report has revealed. Shell along with foreign oil major partners, Total and Agip, have agreed to sell their share in four onshore oil blocks which Shell operates in the Niger Delta wetlands but they need ministerial approval. Deals for the blocks, one of which attracted a bid of over $1 billion, have already been agreed and a 10 per cent deposit paid. These payments triggered a 180-day window for the deals to be completed, the first of which expires at the end of this month, according to sources involved. The Nigerian
N a t i o n a l Pe t r o l e u m Corporation, NNPC, which owns the majority stake in the blocks is however at loggerheads with the buyers because it says its subsidiary will take over from Shell as operator of the fields once the deals are completed. But some buyers of the blocks are not willing to complete the deals if NNPC is the operator. A consortium led by Poland’s Kulczk Oil Ventures agreed a deal for Shell’s block OML 42, while independent energy firm Eland Oil, in partnership with Nigeria’s Starcrest, has agreed to buy OML 40. Niger Delta E&P and Petrolin won OML 34 and Conoil, owned by Nigerian billionaire Mike Adenugu, picked up the biggest block OML 30. According to Reuters,
Deals for the blocks, one of which attracted a bid of over $1 billion, have already been agreed and a 10 per cent deposit paid financial backers will not want to lose their initial funding, in one case topping $100 million, while NNPC and Shell will want deals to go through to realise financial returns, so a compromise has to be found. “The likely scenario is that NNPC becomes the ‘operator’ of the blocks and then farms out the development of the fields to another firm. This could be
of
coastal
communities. A statement by the Iyasere of Jesse kingdom, Chief Uzzi Gabriel-Emeje, said the findings showed that pollution observed in Jesse could have flowed from vandalised oil pipelines in neighbouring communities.
the buyer of Shell’s share or another contractor and potentially a host of other companies in between,” sources close to the deals told Reuters.
“Just because you’re the ‘operator’ doesn’t mean the guys on the ground will have your logo on their shirt,” a source with one oil company involved in the bidding process also said. “It would be a disaster for some of these companies if these deals don’t go through and I’m sure a compromise will be made. There might be a few more layers and a bit less money at the end of the line but it will still be nicely profitable,” he added. It would be recalled that the Minister of Petroleum, Diezani Allison-Madueke, earlier this year signed off operating rights on three other onshore blocks OML 4, 38 and 41.
Jesse community Niger Delta
He directed chiefs, village heads, youth bodies/vigilante outfits in his kingdom to be more vigilant and promptly report perpetrators of any criminal act to the security agencies.The monarch said security of government property and interest anywhere was the responsibility of everybody, while security agencies, particularly those concerned with oil pipelines surveillance, should be more proactive in monitoring pipelines and other related crimes in the country.
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Focus
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Diezani harps on the imperatives for deregulation
D
IEZANI Alison Madueke, Nigeria’s Petroleum Minister represents different things to different people within the oil and gas industry. Noted for many firsts, her eloquence and capacity to wow her audience makes her an interviewers’ delight. In this interview with Hector Igbikiowubo, Editor, Sweetcrude, she harps on the imperatives for deregulation of the downstream petroleum sector, among other issues. Excerpts:
system in a country as large as Nigeria would require capital outlay of $100-$200 million annually for 3-4 years window depending on the envisaged design. Thus as a first step, focus would be placed on designing the outlines and establishing a national registry to allow beneficiary identification. And later the focus would shift to the erection of other relevant building blocks which would spell out the conditions for eligibility, enrolment etc. So as you can imagine, this is an entirely new song which requires a new dance step and that exactly is what we are doing. There is no doubting the fact that we have gotten to a critical juncture in our national life where the imperatives for the total deregulation of the downstream sector of the petroleum industry cannot be over-emphasised.
As you are aware this is not the first time that government would be coming up with plans to deregulate. What is different this time around? That is a poignant observation, especially in the face of the debilitating cost payment of subsidy has inflicted on the economy. Last year subsidy payments gulped over N1.3 trillion, about 24 per cent of the entire budget. You can imagine how much subsidy payment has cost the government for the length of time the downstream subsector has remained regulated. The benefits of deregulation of the downstream are well known and no responsible government can afford to shirk its responsibilities to the people on the altar of political expedience. What is different this time around? The difference my dear is that we have gotten to a point where we can no longer afford to incur the cost associated with subsidy payments to the detriment of other developmental needs of the economy. So to tackle this challenge, the Federal Government under the able leadership of Mr. President has designed an effective social safety net system in Nigeria designed to ensure that the massive volume of resources expended on subsidy payments annually is ploughed back to the provision of essential social/health amenities and services to the common man. The package would help guarantee improved maternal and child health services while also providing conditional cash transfer scheme to pregnant women in the country, a package which as you know is unprecedented our history.
There is also provision for Primary school feeding program, youth employment package which also entails what we call active labour market and public works programs for youth
Diezani There is also provision for primary school feeding program, youth employment package which also entails what we call active labour market and public works programs for youth. The novel scheme also allows for electricity rebate, fuel voucher, equipment voucher among other items. Though details of the overall cost implications are being finalised by the Ministry of Finance, suffice it to say that experience from abroad suggests that to establish an effective national safety net
Aviation Turbine Kerosene, Diesel, LPFO, HPFO are fully deregulated. How successful has this programme been? Interesting question! You are the journalist and I was hoping that you would be able to educate me on your findings in this regard. Well, first off is the fact that government has been spared the debilitating impact of bearing the cost of subsidy payments on the petroleum products you have identified. Petroleum marketers have been at liberty to import and export some of these products, as well distribute in-country without let or hindrance. Following the withdrawal of the NNPC from the importation and distribution of these products, especially diesel, you can imagine the multiplier effect increased participation of the private sector has had in job creation, skills acquisition and ex p a n s i o n i n i n s t a l l e d CONTINUES ON PAGE 13
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Diezani
Diezani harps on the imperatives for deregulation CONTINUED FROM PAGE 13
private sector capacity. What are the imperatives for deregulation of petrol and kerosene? The imperatives for deregulation of petrol and kerosene are quite obvious. Like I said earlier, last year alone, the government incurred over N1.3 trillion in subsidy payments on both products. Complete deregulation of the pump price of both products will save government this huge cost and afford same more money to apply to the developmental needs of other areas of the economy. But m o r e i m p o r t a n t l y, deregulation of the pump prices of both products would unleash the entrepreneurial acumen of the private sector on the petroleum products refining sub-sector of the economy. You would recall that sometime in 2001 or thereabout, the government through the Department of Petroleum Resources issued 18 refinery licenses to private
entities, but 10 years down the road, none of them have been able to set up a refinery and the reason is obvious – financiers and investors always cite the continued regulation of the downstream as reasons for their inability to go forward. We want to believe that once the downstream sub-sector is deregulated, these financiers and prospective investors will have the added impetus to go ahead and invest. Ni g e ri a re p re s e nt s t he largest single market in subSaharan Africa; we are geographically located to act as a hub for the refining of petroleum and petrochemical products in the West African sub-region, among other benefits including job creation and possible domiciliation of capacity incountry. If the current PPPRA pricing template is anything to go by, indications are that there will be a 110% increase in the pump prices of petrol and kerosene if government goes ahead with
Can you imagine how much impact N1.3 trillion to N1.5 trillion can have when deployed to accelerate the creation of the National Safety Net System which I spoke about earlier
implementation of deregulation. How does gover nment expect to mitigate the impact on pricing? That is an observation critical to this discourse; however you must permit my attempt at drawing a parallel between petroleum products and cost of telephone call incountry. You would recall that before the advent of GSM telephony, the average cost of telephone calls was about N1 per minute, but all of this changed with the introduction of GSM lines. Prices of GSM telephone sets went up at inception, ranging from N28,000 to N35,000 or more depending on the hand-
set. I dare say that following deregulation of the pump prices of petroleum products, it is inevitable that prices would go up initially. H o w e v e r, g i v e n t h e inevitability of competition w h i c h w o u l d f o l l o w, indications are that prices will come down marginally and when refineries start coming on stream between 24 and 36 months down the road, prices would fall sharply. Nigerians must understand that we cannot achieve greatness without sacrifice – there is no victory, without a battle and there is no greatness without perseverance and tenacity of purpose. We stand at the
precipice of greatness and must have the presence of mind to take the plunge. Talking about mitigation, we are working out a package of incentives with the active connivance and input of industry stakeholders who appreciate the need for us to move b e y o n d r h e t o r i c . We appreciate the efforts steadfastness of organised Labour in looking out for the interest of the people and we appreciate the feelers we have gotten so far from them regarding the need to move the nation forward. We believe that the current realities affords government and organised Labour a unique opportunity to chart a new course on the way forward regarding job creation, industrialisation, development of in-country c a p a c i t y, a m o n g o t h e r benefits. We understand that the cost incurred in subsidy payments last year was in excess of N1.3 trillion. How much has subsidy payments cost the government this year? It is early days yet – the end of the third quarter of the year. But if current trend is anything to go by, indications are that we may yet surpass last year’s figure put at about N1.3 trillion. Indeed this is more than enough imperative for the complete deregulation of the downstream sector of the petroleum industry. Can you imagine how much impact N1.3 trillion to N1.5 trillion can have when deployed to accelerate the creation of the National Safety Net System which I spoke about earlier? We must understand that no country can afford to have recur rent expenditure outstripping capital expenditure and expect to grow. If we save the huge cost associated with payment of subsidy, we can in one fell swoop raise capital expenditure over recurrent expenditure and set our dear country on the irreversible part of growth and development. While your submission on savings sound laudable, it is important to note that we have a law which demands that all monies coming into the federation account must be shared amongst all three tiers of government. The federal government has no control over this, and may have to contend with only the share that accrues to it CONTINUES ON PAGE 15
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Diezani harps on the imperatives for deregulation CONTINUED FROM PAGE 13
under the sharing formula. What is your reaction to this? I agree with you. But you must note that even at that, about 55 per cent of N1.3 trillion to N1.5 trillion amounts to something substantial which can be applied to other areas in dire need of intervention. Besides, just as the federal government requires funding to execute capital projects, so does the states and local government require funding too. I want to believe that we cannot afford to be held back by arguments against the deregulation of the downstream anymore than we have permitted in the last few years. We have set targets including but not limited to Vision 20:20:20 by which t i m e w e ex p e c t t o b e catapulted to the 20th largest economy in the world. We cannot achieve this by sitting idly by and doing nothing, we have to initiate actions to propel the nation in this direction and the full blown deregulation of the downstream is one such action. There have been allegations that the subsidy claims put out by government may be inflated, what is your reaction to this claim? That is the most ludicrous claim I have heard in discussions surrounding the deregulation or otherwise of the sector. There are rigorous checks put in place to forestall any attempts at compromising the system. Between the PPPRA and the NNPC, the accounting processes are subjected to rigorous auditing. Like I said earlier we are at a critical juncture in our nation’s development and cannot afford to miss opportunities as they are presented. Claims regarding the propriety of subsidy claims are at best a distraction from the issues at hand. Indeed assuming subsidy claims are inflated, an indication that the system is corrupted, is accepted as a given, isn’t that enough reason to jettison the process in its entirety to be rid of the very instrument of corruption
that has bedevilled the system? Why must we continue with a system that exposes the country to so much loss, so much cost and permit your implied reference – corruption? In the event government goes ahead with implementation of full –blown deregulation, Nigerians may be curious to know what use the savings made will be put to? I had earlier stated that working in concert with various industry stakeholders, government was working out a package of palliatives cum incentives to mitigate the impact of removal of subsidy. It is however interesting to note that most commuters who travel in-country already pay deregulated transportation costs. Commuters who travel intra and inter-state lines use diesel powered vehicles for their movement. The big buses that travel between
There are rigorous checks put in place to forestall any attempts at compromising the system. Between the PPPRA and the NNPC, the accounting processes are subjected to rigorous auditing inter-state lines use diesel, even the big buses that convey commuters within city limits use diesel and diesel prices are deregulated. We will unveil the package of incentives and the uses to which savings on nonpayment of subsidy will be applied as we are working as soon as we conclude our work. I can also assure you that this would be ready before the end of November, 2011. Is it true that the NNPC is largely dependent on
sovereign guarantees of the federal government to meet its fiscal obligations to third parties owing to the cost of subsidy incurred in the last 4 years? Yes, this is true. It is sad to note that a corporation as big and vibrant as the NNPC has to go cap in hand asking the federal government for funds when it has no business doing so given the prospects and opportunities at its disposal. The NNPC ought to be at par
with contemporary national oil companies such as Petronas, PDVSA, Petrobras and Saudi Aramco, just to mention a few, but this is not the case because of the debilitating impact of petroleum subsidy payments, among other negatives. We have initiated a robust programme to turn the fortunes of the NNPC around and the removal of subsidy is one of such efforts. Indeed the monies incurred in payment of subsidy in the last 4 years is more than enough to tar over 2,000 kilometres of highways, build several hospitals, upgrade facilities at our universities, fund research and development, among several other development needs. What is the status update on the existing refineries and how far has the ministry gone with efforts to develop the 3 Greenfield refineries? There is sustained effort at increasing refining capacity through: revamping existing refineries to increase their contribution to national demand of petroleum products. There is an ongoing engagement with the original EPC contractors to ensure effective implementation of the turn-around-maintenance. An NNPC team is currently in Japan to conclude the engagement of the original EPC contractors which will be the first to be rehabilitated. Regarding the three Greenfield refineries to be sited in Lagos, Kogi and Bayelsa states, the initial feasibility study have been concluded and the preliminary report reviewed. We are awaiting the final report scheduled for end of September, 2011. Is there any plan by government to divest from the existing refineries in the near future, especially in the face of recur ring down time recorded at these facilities? There is no plan by the government to divest from existing refineries, but we are open to collaborations with world class companies with proven integrity and track record in the refining and petrochemicals sub-sector. Regarding down-time recorded at these facilities, I agree that we have a peculiar problem and that is part of the imperative for the total deregulation of the downstream sub-sector.
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Electricity Transformers
NNPC Ad
Electricity Workers laying power cables
Gas
SIMEON EBEGBULEM
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OLLOWING reports that Nigeria still flares over a billion scf of gas and the f e d e r a l government’s intention to end gas flare by year-end 2011, Pan Ocean oil corporation has commenced a campaign against gas flaring by processing gas from its gas processing plant in Delta state, south-south Nigeria. Rather than flare the gas emanating from its operation, the company processes its gas in compliance with the carbon credit scheme of the United Nations Framework Convention on Climate Change (UNFCC), for which the company was qualified in February 2009. The Ovade-Ogharefe, Gas processing plant said to be the largest in west Africa earns carbon credits for its operations under the Clean Development Mechanism (CDM) of the Kyoto Protocol where its operations registered was established. With the CDM, reductions in greenhouse gas emission from projects in developing countries are registered and monitored under the United Nations Frame work Convention on Climate change (UNFCC) and sold to developed countries that have limits for their emissions. Construction of the OvadeOgharefe gas plant started in 2007. The gas plant is currently the largest carbon emission reduction project in West Africa. The Ovade- Ogharefe gas processing plant comprises of two phases, Phase one is a 130mmscfd gas compression plant and phase two of the gas processing plant will produce Liquified Petroleum Gas (LPG), propane and other related gas products. The gas processing plant among other things will ensure zero routine flaring in all areas of its operation due to the adopted modularized plant concept which makes the plant expandable for additional gas finds in her concession areas. Pan Ocean, an indigenous company in joint venture with the NNPC started production in 1976, at the Ogharefe field of OML 98. In 2009, Pan Ocean signed a production Sharing Contract (PSC) with the NNPC on Oil Prospecting License (OPL) 275. A l ex a n d e r Fo r s y t h , G a s
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Pan Ocean leads war against gas flaring in Nigeria
compressors, for the liquid we have hydro carbon reducer unit where the dry gas will knock down heavy hydro carbons like pentene. The liquid as it is recovered is calculated and sent back to lighten up our crude at the flow station. So this is calculated by how much percentage of liquid is recovered and how much gas is being taken in as inlet. “How much did you send in as sales gas, how much did you utilize for running your equipment. So far we have 98-99 per cent. We only have one per cent flare and it is so low less than the requirement for the environment”. Explaining further, he said: “ when we process the gas so we reduce the amount of carbon that is going into the atmosphere. And basically we reduce the carbon emissions. So we measure the carbon going in we measure the carbon going out, and we sell the reductions. We are selling the gas and we get the credit for the carbon emissions. And it is not cheap to run a gas plant so the profit we get when we sell helps us in running the plant. We measure every cubic of gas going out. We must measure all the condensate that goes out. The United Nations comes here to audit our figures just to make sure we are doing the right thing. The figures needs to be correct. Once the UN audits the gas figures we get the figures from the UN saying okay this is how much carbon credit we are awarding you for what you have done. Then we will know the quantity of carbon credit that will be sold, then when we sale the carbon credit, we will get money and that is how we run the plant”. Asked what he feels about the refusal of some oil companies to stop gas flaring in the country, Forsyth asserted that “For me, if I was the Nigerian government I will make oil companies pay seriously for the gas they flare. Every company here should try and do what we are doing by putting the gas in a pipeline and use it for something good. Currently a contract has been awarded for the next phase of this plant. The next phase will be a small plant and some additional compressors to pump the gas for sales. The plant is capable of pumping 200million cubic of gas per day. NNPC assisted us immensely when we started building the plant and we owe our success today to them”
…builds West Africa’s largest gas processing plant
Gas flaring in Nigeria
Processing Manager at the plant, explained to newsmen that the plant “ have three strings of compressors, the LP compressor and the IP seal gas. The gas from LP, is compressed to IP, IP is compressed to HP. So we dry our gas and we make sure we meet the specification required by the Nigerian government. And here we don’t only dry the gas to meet specification we make sure we don’t flare our gas. We make sure we get our recovery up to 98-99 per cent. The compressor will recompress the dry gas and send it for export. Our export basically for now is for independent power plant projects. We are very friendly to the environment; you can see the flare is very small. The plant availability has been
For me, if I was the Nigerian government I will make oil companies pay seriously for the gas they flare
so good; we have about 98 per cent. The plant has been very stable and available. The quantity of gas processed, the quantity used as fuel gas to run the engine, to run the
Gas
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LPG: Forte Oil launches domestic gas refill stations
Gas refilling stationl
YEMIE ADEOYE
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orte Oil PLC, (formerly known as African Petroleum PLC) one of Nigeria’s foremost indigenous oil marketers has introduced its Liquefied Petroleum Gas (LPG) filling stations in major cities in the Country as part of its commitment towards ensuring availability of the product to all Nigerians. The stations were built to exclusively dispense LPG (domestic) gas and are all situated at strategic locations in the cities of Lagos, Abuja, Port Harcourt and Kano. The company also confirmed that the Lagos station at the Shomolu area of the ever busy Ikorodu Road is already operational. Speaking on how this operates, The Managing Director of Forte Oil, Mr. Michael Ahme, said that the operations is automated and takes less than two minutes to fill a standard 12.5 kg cylinder. The cylinders are filled in the presence of the customer and because the quantity is programmed into the machine, the risk of the
customer being short changed is over ruled. The 3 kg cylinders (popularly called the Camping Gas) can also be refilled in these stations. Speaking further, Ahme said refill process can be likened to what consumers popularly call ;’pay as you go’ for in his words, “Even if a customer brings in a bigger cylinder and isn’t keen to fill it up, the quantity the customer requires would be dispensed accordingly”. He said the plants are open on Mondays thru Saturdays from the hours of 8 AM to 6 PM in the evening. Brand new cylinders are also on sale at all the plants. It will be recalled that, two years ago; Forte Oil PLC launched its Transparent Gas Cylinders to enable customers monitor the level of their gas and also ensure they get value for money when filling the Gas even at non AP gas stations. In other to also ensure that customers who do not have the transparent cylinders can monitor their gas level usage, Forte Oil is making gas Level Indicators available for sale
Even if a customer brings in a bigger cylinder and isn’t keen to fill it up, the quantity the customer requires would be dispensed accordingly at its Gas Filling plants. The introduction of transparent cylinder and refill stations is part of strategic redirection of
the gas the the
growth trajectory of the company aimed at boosting its revenue streams while at the same time maximising customer satisfaction.
The Nigerian Content Act explained at PNC 2011
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he Nigerian Content Act has been set up to ensure the petroleum industry creates local value and offers maximum benefit to Nigerians. The impact will be felt nationally as increased job creation encourages youth a n d c o m m u n i t y engagement. The CWC Group recognise the importance of Local Content in the oil & gas industry therefore we are proud to announce the launch of our new Conference Practical Nigerian Content on 25-27th October 2011 to be held in Port Harcourt. The Forum is supported by the Nigerian Content Development and Monitoring Board, Rivers State Government, Bayelsa State Government and Delta State Government and will include a one day conference, a site visit to the heart of the industry and a one day training seminar. The Practical Nigerian Content Conference will discuss how the State Governments can support Nigerian Content initiatives, the strategies and expectations on NNPC, its subsidiaries and the government. Speakers will feature RT Honourable Rotimi Amaechi, Executive Governor, Rivers State, Engr Ernest C Nwapa, E x e c u t i v e S e c r e t a r y, Nigerian Content Development & Monitoring Board, Hon Emmanuel Uduaghan Executive Governor, Delta State, Hon Timipre Sylva, Executive Governor, Bayelsa State, Dr Kingsley Ojoh, Executive Director, Total E&P Nigeria Ltd.
Conoil promotes greener environment in Nigeria with Congas
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N line with the global trend for a greener and cleaner environment, Conoil has outlined its determination to popularize the use of Liquefied Petroleum Gas (LPG) in Nigeria as the preferred energy source for industrial and domestic applications.
Lamenting the degradation caused the environment through the use of firewood and the out-of-reach price and irregularity in supply of Household Kerosene (HHK) popularly called kerosene, the company promised to make its brand of LPG, known as Congas available to the generality of
Nigerians at affordable price in correct quantity and quality. LPG is a cleaner and safer form of energy suitable for industrial and domestic use. It also promotes the Kyoto Protocol on green gas reduction, of which Nigeria is a signatory.
Feedback
Fee dback
NCDMB outlines imperatives of NOGIC Act
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he Nigerian C o n t e n t Development and Monitoring Board, NCDMB, has stated the imperatives of the Nigeria Oil and Gas Industry Content, NOGIC, Act and the problems faced in capacity development of Nigerians. The board also noted that the enactment of the NOGIC Act and the establishment of the NCDMB are major milestones in the Nigeria Content initiative. The Executive Secretary, N C D M B , M r. E a r n e s t Nwapa, who disclosed this at a media forum in Lagos recently, said that the Act provides for minimum thresholds on Nigeria Content across ending speculations about the policy
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ollowing the F e d e r a l Government’s aspiration to grow the power sector through alternate power sources away from the conventional hydro and thermal systems, Schneider Electric has launched a new solar enabled power project called Villasol in Asore area of Ogun state. Speaking ahead of the launch and project commissioning, the Country President of Schneider Electric Nigeria, Mr. Marcel Hochet, said Villasol is part of the company’s innovative approach towards addressing the huge energy deficit of Nigerians and other people in less developed countries of the world. According to Mr. Hochet, ‘Schneider Electric is waging war on darkness with the power of the sun. Villasol brings with it, the hope and possibility that rural communities can now have access to electricity without depending on the national grid. The product will help drive improvement in the living conditions of people at the base of the pyramid who do not have access to
intentions in this regard. Elaborating on the imperatives, Nwapa, who was represented by a General Manager of the Board, Mr. Wole Akinyosoye, said that “The Act institutes clear reporting process and procedures on tenders, contracting and operations as regards Nigeria content. Generally the Law is a clear attestation to the intention of government to promote Nigerian interests and local participation in all facets of the industry.” He stated that “the Act mandates that first consideration should be given to Nigeria independent operators on block awards, oil field licenses, oil-lifting licenses and other industry projects,” adding that the Act grants
exclusive consideration in traditional areas to indigenous service providers that can demonstrate ownership of equipment, Nigeria personnel base and capacity to work in the area. Nwapa enthused that the Act further provides framework to harness incountry capabilities and build new capacities to attain the maximum thresholds specified by the schedules within the shortest time possible.” Speaking further at the forum, Nwapa asserted that the main challenge of implementation in the face of set targets of the law is to effectively regulate activities to ensure that available skills and facilities for capacity building are harness efficiently. Adding that the
The Act institutes clear reporting process and procedures on tenders, contracting and operations as regards Nigeria content
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responsibility of the board is to ensure that new capacities are built as soon as possible where expectations of the law cannot be met immediately. He however noted that NCDMB must always manage projects opportunities to bridge capacity gaps through encouraging ownership of equipment and facilities and building the local skill competency base. Nwapa therefore explained that Government was guided by the global best practices in fashioning out the NOGIC Act in 2010, adding that “the experiences of Malaysia, Norway and Brazil had thought a nation not to wait till all required skills and facilities are ready before making a local content policy. Oftentimes, the realities are that shortages of capacities are reasons for low national participation; a policy therefore is a vital tool to foster capacity development and stimulate growth in the right direction.”
Schneider electric blaze the trail in renewable energy
KUNLE KALEJAYE
electricity in Nigeria and the rest of the world’. Ogun State governor Senator Ibukun Amosu said the Asore power project will bring about more private and public partnership such as in rural road construction and electricity project that will propel rural development in the state. Senator Amosu who was ably represented by the deputy governor of the state Alhaja Salmot Badru said the Ogun State government is poised to provide rural infrastr ucture that will gradually slow down rural urban migration and he urged the youths to stay in the rural communities so that they can contribute their quota to the development of rural areas. According to Badru the solar energy project was
Ogun State governor Senator Ibukun Amosu said the Asore power project will bring about more private and public partnership such as in rural road construction and electricity project that will propel rural development in the state
Schneider Electric initiative that will attract economic and social development in the community and improve the well being of the people. The government of Ogun State is therefore determined to encourage private sector participation in the development of the state. “This kind of project will be carried out in 150 rural communities of the state” Speaking at the unveiling of the project, senior Vice Pr e s i d e n t o f S c h n e i d e r Electric Africa region Mr Guillauwa Schoebel referred to community approval, financial assistance and technical solution as the three pillars needed to accomplish this project in other rural communities that have no access to regular power supply. He noted that the Asore Villasol Power Project is the first in Nigeria territory and
Africa as a whole. Director General Energy Commission of Nigeria Professor Abubakar Sani Sambo said the model Schneider Electric brought is one the Federal government has been looking at which has led to the approval of the National Energy Counsel in 2003 and in 2005 there was a renewal of the Energy Master Plan. “The renewal energy is always there and it is never exhausted unlike the conventional energy of oil, coal and gas. We can also tap from the wind to generate power. The training of our people in the technical area of solar energy is very important”. Professor Sambo used the occasion to urge the Ogun state government to invest more resources in solar energy in the state.
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Inadequate training has negatively impacted power sector – NAPTIN boss
PHCN workers on strike
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nterview by Oscarline Onwuemenyi with the pioneer DirectorGeneral and CEO of the National Power Training Institute of Nigeria ( N A P T I N ) , E n g r. Re u b e n Okeke. Tell us about NAPTIN NAPTIN was established in March, 2009, following Federal Gover nment’s decision to address power challenge which is the bedrock of development of any nation. There are critical issues that must be addressed before the light we have can stand, there is the physical infrastructure, fuel, which comprise of water and gas and most important is the workforce. If any of them is lacking, it will be very difficult to achieve generating electricity and distributing it. The FG decided to make the training unit from PHCN to become a stand-alone agency under ministry of power in oder to address the most critical input in ensuring that electricity is guaranteed for all. The organ responsible to bring up those that will ensure physical infrastructure is NAPTIN there are no two of such institutions now in Nigeria. So NAPTIN was created in March 2003 and we have our mandate, vision and mission, but the most
important thing is to actualise the mandate which government has given us. We are to ensure that every body, both technical and non-technical, working in the power sector, that their skill and knowledge is upgraded to meet modern technology so that when government achieves 25,000MW in the year 2020, we can have enough capable hands to sustain it. We have ensured that we have a very good environment for learning and to create some intervention courses because for the last 2025 years there have not been any structured training, until 2009 when NAPTIN was created. As at the time NAPTIN was created we had very well neglected seven regional training centers. How critical was the gap that was created as a result of lack of training and to what extent has it impacted on the efficiency of the power sector workers? Because the huge gap existed, right from 1989-90 that training went down, it has had a huge effect on the sector, but it is not very obvious to a lame man. But to a large extent it is what was responsible for the dismal performance of the power sector. that electricity is not there, we have very low voltage, 50 per cent of what was responsible was not just because we did not have
We have ensured that we have a very good environment for learning and to create some intervention courses because for the last 2025 years there have not been any structured training, until 2009 when NAPTIN was created
the generating capacity, but the human capital. Because have to well informed to know how to manage the little that you have, and if you don’t have that knowledge it will be difficult for you to manage. If somebody who does not know when switch on and off, and he does it wrongly, once you have mar operation, its going to cause outage. So those
of us that has been in the power sector, especially in distribution can tell you that 50 per cent of why the efficiency of power sector went down was because of lack of training. Because if people are very well trained, the little you have you will know how to manage it. You will know what will be the effect of not maintaining a distribution transformer along the street as at when due. I started from scratch and rose to become the CEO of the biggest distribution company in the country and the longest serving on, so I should be able to tell you authoritatively that lack of training has resulted in the poor power sector, and this huge gap has to be breached if we can get the power sector to be on the right track to perform How many people has NAPTIN so far trained? We started in 2009 and so far we have trained 3, 998 people, as at last week. Apart from our intervention courses, we have to do profiling for the facilitators and instructors, and we take them out for train the trainers programme. Before we can deliver credible training, we have to retrain, because our instructors are ageing, we are training both the workers and facilitators as well. Our training covers all categor y, most
especially the lines men, cable joint men. Also the district sub station operators and electrical system operators who work 24 hours, so when they carry out wrong operations it can collapse the system, when they carry out wrong operation somebody can die. They are very important to the system and we don’t joke with them, they form majority of the people we have trained. Even the CEOs of discos, we trained them on leadership to improve on what they do. What is your take on casualisation in the power sector that is supposed to be highly professional? Nigerians would always try to survive; electricians will always try to do this. Right now across the country, we will always hear of what is called NEPA two. I am not trying to absolve the PHCN worker that they don’t get involved in illegal activities. But majority of illegal jobs that are being done by these NEPA two who are not trained at all. You see a lot of them hanging around PHCN offices, these people are responsible for illegal jobs. You see them hang around, and when people are coming to PHCN office to report fault they discourage them and tell them they can help them get their jobs done faster. They try to do jobs they are not trained to do and try to work in the night and get electrocute, there is nothing we can do about it. You used the word casualistaion, yes, I will agree, because there’s not being any structured employment since governments embargo on employment, so some of our CEOs have an adhoc arrangement because the lines men are not much, so they hire some labourers to help them move ladders around. But along the line, these people from carrying ladder start to do the jobs themselves and get electrocuted. You cant afford to make a mistake with electricity, once you make a mistake you pay with your life. What NAPTIN is doing about it, first of all, is to encourage the CEOs to train all those, because as people are retiring you need to replace them. We have very aged working staff right now, and I think that between now and 2015, most of the people that received real structured training would have retired. so NAPTIN have been established at the right time, and the CEOs can give training to those they can regularize.
Power
33
Nuclear power plant
This is a 12.5 MW gas fired reciprocating Independent Power Plant providing electricity to Lafarg WAPCO Nigeria Plc\'s factory in Ewekoro, Ogun State, Nigeria
Taking Nigeria’s power bull by the horn OSCARLINE ONWUEMENYI
T
he nation’s limp power sector may just be on its way to life if the body language of the present administration is anything to go by. What with the recent announcement that by the Minister of Power, Professor Bart Nnaji of the attainment of about 4,005 megawatts of electricity, so far the highest quantum of electric power ever generated in the history of the country. More definitive are the actions of the Prof. Nnaji, who has only been on the hot seat for only about two months. The distinguished Professor of Mechanical Engineering has since taken up his gauntlet with equal determination and zest, and has since embarked on a tour of all the nation’s power plants to physically ascertain their true conditions prior to further government investment and/or concessioning. Over the past two months, the Minister has visited and observed forehand some of the rot in the nation’s ageing power
plants, as well as the surging hope in the new Independent Power Plants, some of which are expected to roar into life in a matter of months. Speaking recently during the 4thNigeria International Power Expo and Conference, in Abuja, the Minister asked for support from the private sector to effectively drive the nation’s power reform, adding that the private sector stood to benefit more in the quest to improve power supply to about 40,000MW in the next ten years. He noted that the government was ready to support the development of local content in the manufacturing of equipment and components for the growth of the power sector. He pointed out that the private sector and private suppliers of various components needed for the sector to move forward will be the main beneficiaries of the power sector reform. He said, “Local content is going to be very important in our reform agenda; we want to encourage local manufacturers and support those who are making their equipment locally in Nigeria. Right now the
countr y has slightly over 4,000MW of electricity and government’s plan is to have ten times that amount in the next ten years. 40,000MW of electricity in ten years time would mean huge investment; it would require huge equipment input to efforts in generation, transmission, distribution and supply. “The importance of the private sector in this nation’s power revolution cannot be overemphasised,” Nnaji added. He said to underline the administration’s commitment to improving power supply in the country, the President holds biweekly meetings on power with select members of his cabinet to assess developments and issues in the sector. He added that, “We have all come to the agreement that our commitment should not merely be in terms of finance, because the problem of power in Nigeria is mainly that of structure. This is why one of the key programmes to revolutionise the power sector is privatization of major assets in order to get them working to full capacity.” According to Nnaji, “There is a growing understanding on the part of government that
Local content is going to be very important in our reform agenda; we want to encourage local manufacturers and support those who are making their equipment locally in Nigeria
distribution companies must be credit worthy so that they will be able to purchase power from generating companies and pay their bills. Generating companies cannot have confidence to generate power unless they see that they can get paid for the power the produce. The same applies to suppliers who supply the fuel or gas for the running of the thermal plants.
“Unless that chain is totally incentivized to perform, meaning if the distribution companies are credit-worthy and are able to pay bills to generating companies who in turn are able to pay their bills to gas suppliers, the system cannot work. My job is to ensure that the entire value chain is fully aligned and performing effectively to provide adequate power to Nigerian homes and industries.” He further explained that the privatization effort of the government does not mean completely abandonment of the vital sector, but it would ensure minimal government involvement in the business of producing and distributing electricity in the country. “It means that the 11 distribution companies would be privatized, the transmission company will be private-sector managed; the hydro stations will be concessioned and the thermal plants will be privatised During the visit to Kainji Hydro Electric Plc, one of the oldest and most important hydro power plants in the country, the Minister had expressed outrage that such a critical power station built with enormous resources had been allowed to rot, with little or no effort made to ensure regular statutory overhaul and other maintenance. Nnaji stressed the government’s determination to go ahead with the planned privatization or concessioning of power stations across the country to ensure that they are more efficiently run in the quest to rapidly improve the nation’s power generation capacity. This, he explained with the Power Sector Roadmap, which the President launched in August, 2010.
Insurance Entry of multinationals hold good prospects for insurance sector —Ajayi
M
r. D e b o Ajayi is the Managing Director & Actuary serving Middle East Africa & South Asia of Milliman Actuaries & Consultants. Ajayi is of the view that the entry of multinational players into the Nigerian insurance market is a positive development which carries with it expectations of a better future. He spoke with Rosemary Onuoha of Sweetcrude. Excerpts: Growth of the insurance sector There is no insurance industry that has ever attained a respectable penetration without life insurance being the dominant line of business. Anywhere in the world, if insurance is going to have a meaningful penetration, the life business must be more than the non-life. Wherever you see the reverse the penetration is also low. So in the case of Nigeria, penetration is low and likewise the life insurance result. In South Africa, penetration is very high and life insurance business premium is in multiples of nonlife. It is the life business that promotes insurance not the nonlife. You cannot have life insurance without Actuaries. The reason life is smaller than non-life is that the core experts that you need to give life are not available. Right now insurance is like an appendage to the Nigeria budget. How can we move from this appendage to a force to be reckoned with by the federal government? We have to build the necessary technical base to make that happen. One wonders if many of the MD’s of Life insurance companies are experts in life insurance. May be they are there mainly because of their management skill not because of their expertise in life business. This has to change and when they change they are going to see life insurance become a major sector of Nigeria economy and that is part of the agenda of TAF Consulting Group. Being an actuary is a global credential. A qualified Actuary can work anywhere in the world. In other professions there are road blocks to face. There are countries with special visas for Actuaries. It is a global borderless credential. This is the story we are going to tell young Nigerians that ‘see how
Mr. Debo Ajayi
It is the life business that promotes insurance not the non-life. You cannot have life insurance without Actuaries. The reason life is smaller than non-life is that the core experts that you need to give life are not available much you can earn, see where you can work, and see what you c a n d o . ’ H o p e f u l l y, w i t h resource on ground to help train them to achieve that they would buy that story. Reasons for low insurance
penetration There are several reasons why the penetration rate in Kenya is in multiples to that of Nigeria. One, in Kenya you have a lot of multinational players. Such trend is beginning to come into Nigeria so we expect the future in Nigeria to be better than the past. Another reason is the regulatory environment. The regulator in Kenya is more proactive, it engages in industry issues and Insurance Association is very active in promoting insurance and insurance companies. For example Kenya now has a mortality study, while statistics here (Nigeria) is not assembled. There is better statistics in Kenya. The due process may not be perfect but it is there. So the environment in Kenya is far better. The emphasis in retail business is much better in Kenya. The Nigeria market concentrates more on the corporate business. In corporate
business there is a lot of stiff competition. In fact, the winner of corporate business is often the loser, may be from under pricing and he would find that out later, and then, the business moves to another insurance company. Proposed training For the training that is coming up in Ghana between October 23 and 26, I and another expert who has helped banks and insurance companies for many years are going to talk on product strategy. How do you graduate in your relationship with banks knowing that the banks are not experts in insurance? How do you introduce them to insurance and the type of products to use? And then the same process applies to the banks. How can insurance companies tailor their process to match that of the banks rather than telling the banks what to do? They need to understand the banks and come up with the right solution that fits their situation. There is also the motivational model. How do you motivate them to make sure that the results are acceptable? Banks executives are used to waiting for people to come. How do you give them orientation that fits? The second part of the training is on mobile phone technology, which is the use of mobile phones in the financial services sector. An average Nigerian has two mobile phones. So the mobile phone has become a very common thing, even in the rural areas. How can the insurance industry take advantage of the mobile phones to be able to impact lives even in the rural areas where they may not have branch offices and where it may be too expensive to operate an agency. So, we want to use the experience of Kenya as an example. Experts from Kenya will tell us how they have done it in Kenya. The penetration rate of insurance in Kenya is more than double that of Nigeria. They will also tell us how they use mobile phones in premium collection, paying claims, p a y i n g c o m m i s s i o n . Fo r instance in Kenya when you are starting a journey, through your mobile phone, you can buy travel insurance, you transmit the request and you get your confirmation and you are covered. We want to talk on how to make it happen, the
CONTINUES ON PAGE 36
34 Loss adjusters hail local content policy Rosemary ONUOHA
L
oss adjusters in the insurance industry have hailed the Local Content Policy of the federal government, saying that the initiative has the potential to boost their earnings. Immediate past president of Institute of Loss Adjusters of Nigeria (ILAN) and president of the International Federation of Adjusting Association, Mr. Darlington Mgbojikwe who made this assertion noted that the Local Content Act has the capacity to bring more funds into the industry which will trickle down to loss adjusters. In his word “I believe that with the new Local Content Po l i c y o f t h e F e d e r a l Government of Nigeria, it is now going to bring a lot of fund for insurance underwriters. In the near future they will start to handle big claims and big claims translate to big fees for the adjuster, maybe then things will get better.” Mgbojikwe stressed that he is happy that the Local Content Law is working, adding “I can see that a lot of risks are now being domiciled in Nigeria and the fact that many adjusters are coming to work with local firms.” Meanwhile, Managing Director of Law Union & Rock Insurance Plc, Mr. Yinka Bolarinwa has said that underwriters have not been very proactive in capitalising on the benefits of the Local Content Policy. According to Bolarinwa, the Local Content Policy is a key infrastructure of growth for the insurance sector which the government provided on a platter of gold, but it is yet to be put in good use. In his words “There is a guideline on this Local Content Act which stipulates that 70 per cent of non-life risks in the oil and gas sector must be domiciled in Nigeria while 100 per cent of life business must be done in Nigeria. To me that is the infrastructure we need but we are still groping in the dark.” On what operators need to do, Bolarinwa stated that underwriters should collaborate and work together as one team to develop capacity, human capital as well as skills that will be able to match the demand from local insurers.
Nigerdock Ad
Insurance
I
n the face of changing climatic conditions, insurers in the country should brace u p f o r a n y eventualities because Nigeria is part of the global environment where disaster can happen anytime. Former president of the Chartered Insurance Institute of Nigeria and immediate past Managing Director of Continental Reinsurance Plc, Mr. Adeyemo Adejumo who gave the warning noted that Nigeria has been relatively spared by the massive natural disasters that have enveloped some parts of the globe, however, it may not always be the case. Because disasters can happen anytime, insurers should brace up for any eventuality to be able to militate against huge loss of lives and property, Adejumo warned. Adejumo called on insurers to collaborate with government to build infrastructure and also task them to create the necessary awareness to the general public on the benefits of having insurance covers. Meanwhile, Nigerians have been charged to imbibe the culture of insurance now more than ever before. This advice is coming at the heels of the various incessant cases of road accidents across the country,
36
Climate change: insurers should brace up for eventualities
collapse of buildings especially those under construction, fire outbreak and in recent time; the ravaging floods in some parts of the country which
have destroyed properties worth millions of Naira. The Head of Technical Division in Sovereign Trust Insurance Plc, Tajudeen
policy. He said there are various insurance products that the insuring public can take in protecting their lives and properties but that the most important thing is for the customers out there to willingly open their minds in accepting the fact that insurance is a very important aspect of their lives. In his words, “Nigerians have waited too long in willingly accepting and recognizing the fact that without insurance, one is like building a house without a foundation and in no time, it could come crashing; and when that happens, you will have to start from the scratch again with even more funds than you initially spent”. He said insurance gives one the promise of a safe and comfortable future. The earlier we disabuse our minds of the old notion that insurance doesn’t work, the better it will be for all of us, he noted. “The recent flood experience in Lagos is an eye-opener to what Flooded Street insurance could have taken care of in terms of compensation. The flood Rufai said this is the time destroyed properties and Nigerians need to consciously vehicles worth millions of educate themselves on the Naira in Lagos State and benefits they are bound to some parts of the country in derive in taking up an insurance the month of July,” he noted.
Entry of multinationals hold good prospects for insurance sector CONTINUED FROM PAGE 34
challenges and issues that it poses, the IT infrastructure that is required to support such system and the kind of product you can sell through that facility. The promoters of the training programme are the West African Insurance Companies Association (WAICA) and TAF Consulting Group. Milliman Actuaries & Consultants is the sponsor of the event. TAF is a UAE based consulting firm that is focused on helping the insurance and financial services sector to develop technical manpower and IT solutions. They are focused on designing financial security strategy that fits the environment where they are required. Milliman is one of the largest actuarial firms in the world with over 54 offices globally. Milliman is also based in Dubai and serves Middle East, Africa and South Asia. Nigeria motivational model The motivational model for insurance in Nigeria is not robust enough. It does not actually give the proper incentive to the
distributor. Also what may be considered as bribe in Nigeria is actually not bribe in other places. It becomes bribe because it is not stated as part of the compensation on paper. So when you speak of motivational models in the case of bancassurance you want to make sure that you identify the role that you want each bank staff to play right from the front desk person all the way to their Manager. What role do you want them to play and concentrate so that they are all working as a team? When I was with AIG, I actually helped to design model for Citibank, Standard Chartered Bank in the Middle East. Everybody gets compensated and the energy and the motivation and the commitment that it creates become a win-win situation. They also have to believe in the product we are selling. It is not just any product. So your motivation model, product, promises, all have to work together for a pleasant outcome. Becoming an Actuary I finished from University of Lagos back in 1985 and by the
time I was leaving the country for studies in Canada I already had about six actuarial exams and of course I was the only one with that type of achievement. You would have expected for things to get better and better over the years but unfortunately it is actually going the other way. There are a number of reasons for that and one of which really is insurance industry has not invested enough in actuarial manpower development. Also the environment in Nigeria has not provided enough exposure to these people trying to become Actuaries. Particularly also with the nationalisation of a lot of insurance companies, the Actuarial profession has not been appreciated as they should be. But in terms of the future this is one of the reasons why TAF Consulting Group is coming into West Africa. It is here to develop, train and mentor Actuaries. To help them pass professional exams, give them necessary exposure and to develop the manpower resources that the insurance
c o m p a n i e s r e q u i r e . TA F Consulting Group is going to be conducting researches, surveys, studies that would enhance professionalism of the insurance industry. I know Nigerians have the intellectual capacity to succeed as Actuaries. In Pakistan where I have employed Actuaries from, many there don’t even have first degree. From A levels they went directly to write and pass professional exams. In fact it is after becoming qualified Actuaries they go back to do in service programme to get their bachelors and their masters. So, can it be done in Nigeria, it can be done. However, we will need the insurance companies to support this type of effort. When TAF Consulting Group comes in for example, it’s going to really require the cooperation of insurance companies in sponsoring students to the programme. We are going to n e e d t h e r e g u l a t o r. T h e regulator is actually key to the success of the industry. We are going to need the support of the regulator in sponsoring people
to the programme as well. We are going to require the insurance participation whether NIA or CIIN or WAICA. We are going to need them to support this type of initiative.
Mr. Debo Ajayi
Labour
37
Some of the requirements before the total deregulation of the downstream sector by the Federal Government included; socio-economic relief measures to assuage the impact of import driven deregulation with affirmative enabling policy to stimulate local production and efficiency within a defined timeframe, affirmative arrangement for the provision of affordable mass transit buses, rail systems and water transportation, and effective maintenance and repair of roads for affordable alternative means of transportation of people and goods.” The conditions also include, “dredging and expansion of products loading and receiving terminals /jetties and fixing of other related facilities to overcome delays and demurrage, stronger commitment to increased local refining with specific date to end importation of petroleum products.”
Oil Workers
Don’t test our will over deregulation —Oil workers
…Say conditions for regulation subsist Victor AHIUMA-YOUNG
W
ORKERS in the nation’s Pe t r o l e u m i n d u s t r y, have advised the Federal Government and others clamouring for total deregulation of the downstream sector of the nation’s oil industry, not to test the will of Nigerians including the organized labour in the sector. Under the umbrella of the Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, the oil workers rejected planned pump price increase in the name of subsidy removal, warning that Nigerians would resist any attempt at further impoverishing them in the guise of subsidy removal. Leaders of PENGASSAN r e m i n d e d t h e Fe d e r a l government that the minimum conditions agreed with labour before total deregulation could be contemplated had not been
met, urging government to concentrate on meeting the minimum conditions before dissipating energy on subsidy removal. Leaders of PENGASSAN in a communiqué at the end of a 4-day Strategic Planning Synergy workshop in Ijebu-Ode, Ogun State, said government’s position that the deregulation of the downstream sector would foster private investments, participation and competition for petroleum products refining, storage, marketing and distribution was not doubt if the appropriate environment was provided, arguing that such environment was lacking presently in Nigeria. The communiqué insisted that the Federal Government’s subtle campaign for a total deregulation of the downstream petroleum sector would not to be accepted without government first meeting the minimum conditions, “The Workshop noted the Federal Government’s subtle campaign for a full deregulation of the downstream petroleum sector. It, however, reiterated a standing NUPENGASSAN, a fusion of National Union of Petroleum and Natural Gas Workers, NUPENG and PENGASSAN, resolution that certain irreducible minimums must be put in place before a total deregulation of the downstream petroleum sector will be acceptable to PENGASSAN and the Nigerian masses.”
Labour
38 TUC warns against hike in electricity tariff, fuel pump price Victor AHIUMA-YOUNG
T
Labour Leaders
PENGASSAN accuses committee on expatriate quota of compromise …Demands sack of Chairman, reconstitution of committee
Victor AHIUMA-YOUNG
P
ETROLEUM and Natural Gas Senior Staff Association of N i g e r i a , PENGASSAN, has accused theleadership of Department of Petroleum Resources, DPR, Committee on Expatriate Quota of compromise. The umbrella body for senior staff in the nation’s petroleum industry demanded for the immediate sack of the Chairman of the committee and reconstitution of the committee. Increasingly, the issue of expatriate quota abuse has become dominant in the p e t r o l e u m i n d u s t r y, manufacturing, servicing and other sectors pitching organizing labour against management. The oil workers called on all relevant government agencies, especially the Nigeria Immigration Service,
NIS, to be alive to their responsibilities in checking expatriate quota abuse in the industry. They lamented that despite the enactment of the Nigeria Oil and Gas Industry Content Development Act, there had been increases in the influx of expatriates into the industry. In a communiqué at the end of by the Association for its newly elected leaders and national officers, the workers called on NIS to check the abuses and only issue expatriate quotas based on the technical recommendation of the Nigerian Content Development and Monitoring Board (NCDMB) and the Department of Petroleum Resources (DPR). According to the communiqué, “Government’s agencies should be alive to their responsibilities in checking expatriate quota abuse. Government should review Nigeria’s educational cur riculum to meet the demands of the oil and gas industry as well as encourage
technical (including marine) education. Nigeria Immigration Service (NIS) should only issue expatriate quotas based on the technical recommendation of the Nigerian Content Development and Monitoring Board (NCDMB) and the Department of Petroleum resources (DPR). The National Data Repository (NDR) domiciled in DPR should be well funded to carry out its mandate effectively. PENGASSAN should be represented on the Board of NCDMB. The present c h a i r m a n o f D P R’ s Committee on Expatriate Quota, Dr. Walker having compromised himself should be sacked and the committee reconstituted.” The Association asked its branches across the country to forward data on expatriates in their respective companies to the National Secretariat. Speaking, PENGASSAN President, Comrade Babatunde Ogun, saidsome of these expatriates come to
Nigeria through tourist visas and work for many years with Temporary Work Permits (TWPs). According to him, the government should review Nigeria’s educational curriculum to meet the demands of the oil and gas industry as well as encourage technical education, including marine education in the country. Ogun noted that the National Data Repository (NDR) domiciled in DPR should be well funded to carry out its mandate effectively. For effective monitoring of implementation of the Nigerian Content Act, Ogun said PENGASSAN should be represented on the Board of NCDMB, and urged the Association’s branches not toy with the directives to forward data on expatriates in their respective companies to its National Secretariat to enable the national office tackle effectively the menace of expatriate quota abuse.
RADE Union Congress of Nigeria, TUC, has warned the Federal Government against any increase in the Electricity Tariff or increase in the pump price of fuel in the name of subsidy removal. In a statement to mark the nation’s 51 s t independence anniversary, the umbrella body for senior staff association in the country, said emphatically, said it stood by the position of its affiliate union in sector the Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, over the re- occurring issue of petroleum subsidy removal and shall go all out to support the association. The statement by TUC’s President- General and Secretary-General, Comrade Peter Esele and Chief John Kolawole respectively, said “We have watched times without number the rush by the Power Holding Company of Nigeria (PHCN) to increase electricity tariffs when there is a drop in power generation even at this period of heavy rains and abundant water in our dams. We insist that there should be no increase in the tariff without a corresponding increase in power supply and total elimination from an era of estimated billings that have resulted in consumers paying more than their actual consumptions. Also, there is the issue of PHCN staff deliberately frustrating attempt by consumers to acquire the prepaid electric meter in order to still engage in the old practices that encourages frauds.” “However having been a close watcher of investment boom trend in Nigeria, then it would be no mystery or out of place to predict that the next biggest investment break worth tapping into is in the Nigerian energy sector. This is simply going by the law of demand and supply which states that the more of a product or service that is needed, is supplied, it will be paid for, by the buyer(s). But after the unbundling of the Power Holding Company of Nigeria (PHCN), Nigerians are yet to fill the impact of the legions of companies created out of it.” According to the statement, “Oil, gas and power are inextricably linked, but many serious reform efforts have always hits a wall of vested i n t e r e s t s . T h e Pe t r o l e u m Industry Bill (PIB) which was presented to the National Assembly in 2008 and is still stuck in the system. We demand for a quick passage into law this year and a tougher measure to end gas flaring.”
Labour
39
Victor AHIUMA-YOUNG
N
IGERIA Labour Congress, NLC, has said if the revelations at the Senate Hearing on Privatisation especially energy, are anything to go by, a people-oriented reforms in the nation’s Power sector, is a mirage. At a Power Sector Workshop in Abuja, President of NLC, Comrade Abdulwaheed Omar, lamented how former President Olusegun Obasanjo administration allegedly wasted over $16billion into “reforming” the sector and achieved nothing substantial. Comrade Omar argued that labour had been in the forefront of progressive reforms in the Power sector and recalled that under General Ibrahim Babangida’s regime, electricity workers made a comprehensive study of the sector and came up with recommendations. H e s a i d t h e s e recommendations were ignored, and when the senior staff decided to go on strike to press for needed reforms in order to save the system from collapse, the General Ibrahim Babangida regime rounded up their leaders and jailed them. According to him, “There is no doubt that we have a serious problem in the sector. On this, all Nigerians are agreed, but the issue is what type of reforms is needed, for what purpose and in whose interests? Back in the 80s, electricity workers made a comprehensive study of the sector and came up with recommendations. These were ignored, and when the senior staff decided to go on strike to press for needed reforms in order to save the system from collapse, the General Ibrahim Babangida regime rounded up their leaders. These electricity Labour Leaders were arraigned before a tribunal where the Federal Government asked for the death penalty. Eventually, eleven of the Labour Leaders were sentenced to life imprisonment. “We have stated this to show that workers have been at the fore front of energy reforms in the country decades before the country’s political leadership woke up to this realization. The reform path being pursued by the political class is the normal gambit of privatization. But if the revelations at the Senate Hearing on energy are anything to go by, this may not be viable. Our position is that as it was done in the telecommunication industry and private electronic media, more players should be brought in. The emphasis should be availability and affordability of electricity. This is not new, since 1929, the Nigeria Electricity Supply company has been operating in Jos and supplying electricity efficiently to consumers. We need to study this and re-enact it on a national scale. Added “We should not go the
Power Station
Our quarrel with FG’s reform in power sector— NLC same way the President Obasanjo administration did which threw over $16billion into “reforming” the sector and achieved nothing substantial. We appeal to the Federal Government not to compound the problems of Nigerians and indeed the country by increasing the electricity tariff in the country. We r e i t e r a t e t h a t t h e submission by the Electricity Regulatory Commission to increase tariff by between 50 to 100 percent is an invitation to chaos. This unpatriotic submission must be rejected.” It will be recalled that the leaders of the two labour centres, NLC and Trade Union Congress of Nigeria, TUC, led thousands of workers on the streets of Abuja against the antipeople’s privatization programme of government and planned hike in electricity tariff.
The protest which ended at the National Assembly paralysed activities at the Assembly. The worker who were in their hundreds marched the streets of Abuja and came to the front gate of the Assembly Complex with a call for the of former President Chief Olusegun over what they termed his ‘dirty roles ‘ in the entire privatization and commercialization process which is presently under probe by the Senator Ahmad Lawan led Ad-hoc Committee. The protesting workers were led by the President of NLC, Mr Abdulwahab Omar and the TUC President, Peter Esele who arrived the Complex at about 9.30am with over 300 buses. The protesters displayed placards condemning the privatization of federal gover nment investments
since 1999. Some of the placards read, “No to privatization,” “Privatization is Evil,” ”No to increment in the fuel price”, “Goodluck we voted for you, Act now.” The protesting workers and their leaders in a protest letter tagged, ‘Save our Nation Rally ” detailed some of grievances including increase in electricity tariff and privatization. Addressing the crowd, NLC P r e s i d e n t , O m a r Abdulwaheed said, “ we made a vow to come to NASS on behalf of the Nigerian people and we are here particularly on the issue of sales of public utilities, the Nigerian workers in their wisdom has decided to support the Nigerian senate on the probe. We do not want the report to be swept under the carpet like that of the Godwin Elumelu led panel
on Power that we gathered that over $16billion was misappropriated and the report died, “We cannot afford to let this probe be swept under the carpet like the power probe Ndidi Elumelu conducted in the previous session of the National Assembly. It is unacceptable to us. So we are here basically to support the Senators.” Also speaking, NLC Head of Administration/Industrial Relations, Comrade Emma Ugbuaja, “the former President, Obasanjo must face the probe panel and give account as to how the sales were made and those that are the beneficiaries of our national wealth because we know they all went into the pockets of rich individuals. Similarly, Deputy Secretary of National Union of Air Transport Employees, Peter Ogaba, the protest became imperative because it would help checkmate the Federal Government from further “sales of our commonwealth and a proper account must be given to us as to how the sales were conducted.”
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Boosting petroleum education, research the PTDF way …Our target is to flood oil and gas industry with experts – Darma Oscarline Onwuemenyi
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t is a common belief that more than fifty years of petroleum exploration in the country has seen very little impact in the sub-text of petroleum and technological education, and therefore the development of local expertise in the sector. Over the years, stakeholders in Nigeria’s oil and gas industry have decried the continuous reliance on the deployment of foreign technology and expertise in the industry, saying it portends grave danger to the economy. The Federal government, to whom most of the petroleum resources accrue, has recently found itself under immense pressure to address this huge imbalance in the application of both human and capital resources vis a vis local content in the sector. And until recently, government’s response to crass marginalization of local operators and technology in the oil and gas industry has been tepid and nonchalant, to say the least. The authorities appeared to be more concerned in spending the massive revenues amassed from the sale of crude than the what and how the crude is produced. Even operators in the system who have benefited from the status quo would be quick to remind anyone that the ‘technology’ used in the exploration of oil and gas resources were as far-fetched as they were foreign. Education and training of local technologists and other petroleum engineers was equally considered expensive and only children of the well-heeled could even dream of getting such education, which is often got in foreign lands. At a recent conference organized by the Society of Petroleum Engineers (SPE) in Calabar, Cross Rivers State, many stakeholders lamented that after over 50 years of crude oil exploration and exploitation activities, it was sad that the country could not boast of any technology developed in-country to facilitate jobs in the industry, as everything was imported at exorbitant cost to the operators. Managing Director of Shell Nigeria, Mr Mutiu Sunmonu, laid the blame on the poor state of the nation’s education sector, saying priority was not given to technological based research and development. It was a trend replicated all over sub-saharan Africa, the Shell boss said. “I am so worried that we continue to be an import dependent nation. We
Research Lab
always look at the short term. We over depend on foreign technolgy from the onshore to the deepwater to unlock our potentials in the industry,” Sunmonu lamented. According to him, the resolution of the problem would best be found in a public/private sector partnership where grants would be given to boost research and development in tertiary institutions.
“The government and private sector should think of how to get into the government must partner with private sector to attract the right technology into the country. ‘The government has to take the lead. We must stop relying on foreign technology but, rather, through self effort and partnership, start developing technology to get the b e s t f r o m t h e i n d u s t r y, ” S u n m o n u a d v i s e d .
Prof. D. Appah of the Petroleum Technology Development Fund (PTDF) noted that the universities lacked the right infrastructure for indigenous manpower development and urged that more funds be deployed to improve infractructure in tertiary institutions. “We need to do more to provide the facilities because we have the people to train others but no facilities in
our universities,” he said. Mr. Alex Neyin, a former manager with Chevron and SPE African Regional Director said government must provide the right environment for research by ensuring stable power supply. Governmment, he said, should also provide rebates and tax incentives to private firms involved in oil and gas research and development projects, while the school system in the country has to be more technology d r i v e n . President of the SPE, Mr. Tony Abolarin, said since most of the projects in the industry was jointly funded by the government and operators, the funding of research should also be jointly undertaken by the two partners in the industr y. “Every dollar spent in the industry is contributed from the Nigerian gover nment and operators; both should also jointly fund research and development because we need to have our technology especially as we are moving more into the offshore,” Abolarin said. The establishment of the P e t r o l e u m Te c h n o l o g y Development Fund, PTDF, has however destroyed some of the myth associated with the oil and gas production in the country. Indeed, over the past decade, the Fund has been leading the way in the training and creation of research and development projects that would produce ‘home-made’ expertise and technology for the oil and gas industry. The PTDF Journey has indeed been an interesting one since its establishment in 1973, then as a desk or unit of the Department of Petroleum Resources (DPR), until it was given full autonomy after the nation attained democracy in 1999. For mer President, Chief Olusegun Obasanjo, has explained that the reason he granted full autonomy to the PTDF was because of his belief that the organisation had immense benefit for the development of Nigeria’s oil and gas potentials. O b a s a n j o , w h o s e administration in the year 2000 liberated the Fund from the DPR where the Fund was domiciled only as a desk for 27 years with little activity, was recently given an award for making PTDF a fully functional agency of government, with the mandate of developing indigenous capacity for the oil and gas
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Financing
Illegal refinery
RMAFC boss charges NNPC, others to stamp out oil theft Oscarline Onwuemenyi
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he Chairman of R e v e n u e Mobilization Allocation and Fiscal Commission (RMAFC), Engr. Elias Mbam has charged the Nigerian National Petroleum Corporation (NNPC) and other stakeholders to stamp
out oil theft and pipeline vandalism in order to boost oil revenue generation. Engr. Mbam who led members of the Commission on an inspection tour of facilities at the Port-Harcourt Refinery and Petrochemical, a subsidiary of the NNPC, urged management and staff of the Company to collaborate with security agencies, revenue generating
agencies, civil society, mass media and host communities to check pipeline vandalism and oil bunkering for increased revenue generation. The RMAFC boss noted that that the country has lost billions of naira due to illegal bunkering and oil theft, adding that proactive and effective steps should be taken to check the loss. He further expressed disgust at
the manner in which economic saboteurs siphon Nigeria’s oil resources which would have been channeled for development adding that such ignoble act destroy our economy, undermine national security, defile our environment, damage our image and deprive our youths of a brighter future. According to him, “The activities of unscrupulous elements who steal the oil that could be sold for the benefit of the entire nation are causing so much stress to the government of the day. Government is faced with huge costs and other infrastructural needs that must be met, and therefore requires all the resources it can get from the proper and legal exploitation
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of the crude resources of the country. “A situation where a few criminal elements appropriate these resources to themselves is unfortunate and should be checked. The NNPC and other agencies responsible for these oil wells should do better to stop the activities of these oil thieves.” Mbam noted that given the transformation agenda of the current administration, it has become expedient for all revenue generating agencies to support the agenda through transparent, accountable and timely collections and remittances of revenue to enable government carry out its development agenda. The members of the Commission had earlier visited oil facilities at Brass Terminal, Obrikom Gas Plant, Bonny LNG, Amenam Floating Pr o d u c t i o n , S t o r a g e a n d Uploading plant operated by Agip, Shell and Total Elf respectively. In his remarks earlier, the Managing Director of PHRC, Engr. Anthony Ogbuigwe expressed his Company ’s readiness to partner with the Revenue Mobilization Commission on effective revenue generation in the oil industry which remains the biggest foreign exchange earner for Nigeria.
Boosting petroleum education, research the PTDF way CONTINUED FROM PAGE 40 industry. According to Obasanjo, the PTDF and the Local Content initiative remain two of the best instruments of government that will make Nigeria not just nominally an oil and gas country, but capable of propelling the n a t i o n t o t e c h n o l o g i c a l l y, professionally and managerially self sufficient in the industry, and stand side by side with any other oil and gas country in the world. “If we can achieve content and capacity building in the oil and gas sector, we can also do it in other areas of economic activity,” he said. He added that the intention for establishing the Fund in 1973 was right, as Nigeria was then emerging as oil and gas country, and needed to train local expertise, and manpower to operate and manage the sector. Meanwhile, the Executive S e c r e t a r y o f P T D F, E n g r. Muttaqha Rabe Darma has announced the ambitious plans by the Fund to train over 20,000 Nigerians in its Overseas Scholarship Scheme (OSS), over the next few years. According to him, it was necessary for the
country to produce the m a n p o w e r, s y s t e m s a n d institutions that will facilitate the takeover of operations and management in the nation’s oil and gas industry. He said, “PTDF plans to train over 20,000 Nigerians in the next five years to occupy various positions in the oil and gas i n d u s t r y a s Pe t r o l e u m Engineers, Geo -Scientists, Geo -physicists, chemical engineers, process engineers, among other specialized fields required to meet our desire to grow local skills in the industry.” He pointed out that over 90 percent of all goods and services used in the industry, valued at over $18 billion annually, are imported from overseas. “The consequence is that Nigeria cannot be said to be deriving maximum benefits from its oil and gas industry in terms of employment, technology transfer and other socio economic milieu that would have impacted on the nation in general. The PTDF, of course, is determined to bridge the manpower and technology gap in the industry,” he added. Darma noted that in spite of
the many challenges and controversies that the Fund faced over the years, it had also succeeded in a vital aspect of its mandate, which is populating the oil and gas industry with well-trained and internationally certified Nigerians as well as equipping and upgrading local institutions to train students in various aspects of the industry. He noted that as at September, 2011 the Fund has trained over 4,000 Nigerian scholars at both Masters and Doctoral levels in critical disciplines in the oil and gas sector at top ranked universities in the United Kingdom under the OSS. “We have also completed the training abroad of select Nigerians to become internationally certified international welding practitioners, welding technologists and engineers to form the core of Nigerian Specialist welders to train welders in-country for the oil and gas industry. “So far, 500 Nigerians have been trained in-country in fillet welding as the first stage of welding and certification programme, while plans have been completed to commence the training of 300 underwater
welders,” Darma said. The PTDF boss also announced that the Fund has completed the training of 2,700 local engineers in Engineering Design Software relevant to the i n d u s t r y. “ T h e s e i n c l u d e Process Simulation, Plant Design Management System, Structural Analysis, Project Management Software, among others.” He explained that more than 35 percent of its scholars are actually working in the Nigerian oil and gas industry, even as he noted that it was beyond the mandate of the Fund to enforce the absorption of its scholars into the industry at the end of their overseas training. “However, we are working with the Nigerian Content Development and Monitoring Board (NCDMB) to ensure an immediate increase in the number of Nigerians operating in the industry in the next couple of years,” he stated. Darma has also announced plans by the Fund to end its popular Overseas Scholarship Scheme (OSS) by the year 2013, explained that the decision was prompted by the Fund’s desire to harness potentials of local universities for training of
students in petroleum technology-related courses. He said, “Our desire is to look inwards and rejuvenate our local universities and other technological institutions to be able to give our students what they go overseas to get. Therefore, in the next three years, we plan to limit some of the programmes our students travel abroad for, at least from the MSc programmes downward.” He noted that, “The PTDF is also upgrading local universities and technology institutions in a wholesome manner, so they can provide these skills and proficiencies that are required for the petroleum industry. “The idea is to bring our local universities at par with the international institutions like Imperial College in London, by upgrading their facilities, their faculties and even the teaching skills. This we will do by taking the professors abroad to shadow-learn at top universities in the world and improve their knowledge about the latest and most modern technologies and developments in the sector.
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Miners at work
Oscarline Onwuemenyi
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ven as President G o o d l u c k Jonathan prepares to headline the forthcoming Conference of Heads of G o v e r n m e n t o f t h e Commonwealth (CHOGM), which takes place in Australia in October, 2011, where he is expected to speak on developments in the nation’s mining and minerals industry, excitement is already building over some remarkable gains marked by the nation in its quest to become a mining hub for the globe. Indeed, the nation’s mining authorities have declared their preparedness to expand the nation’s mining potentials and make the country a destination for mining activities, and this they have announced in grand style with the acquisition of state-ofthe-art mining laboratory for analysis of samples from mining operations. The palpable enthusiasm running across the mining sector over the commissioning of the newly-acquired equipment at the National Geosciences Research Laboratories Centres (NGRL), in K aduna, K aduna State, is especially justified when one considers that in over a century of
Setting Nigeria’s mining on a sound technological footing Nigeria’s mining industry has come of age, and we feel it is only proper to let the world know of developments especially with regards to the enactment of investmentfriendly laws mining activities in the country, operations have mainly taken place at a rudimentary level. Even with the advent of ‘major’ miners in the country, the country has never really benefitted much as most of their samples are readily taken out of the countr y for technical analysis due to the absence of efficient laboratories in the country. This has in turn cost the
country millions of dollars of funds that could have been used within the industry. The NGRL laboratory consisting some of the most modern analytical equipment in the industry, including the Epsilon 5 Energy Dispersive Xray Flourescence Spectrometer, the Empyrean X-ray Diffractions Spectrometer and the Scanning Electron Microscope (SEM) Inspects, was procured with the assistance of the World Bank through the Sustainable Management of Mineral Resources Project (SMMRP) in the country. Speaking during a recent tour of the centre, the Minister of Mines and Steel Development, Arc. Musa Mohammed Sada noted that in the past the challenge for the sector had always been the lack of vibrant regulation and the almost nonexistent infrastructure including modern equipment, laboratories and even accessible roads, among others.
He noted, however, that, “All of that is changing today as working with relevant agencies, we are drastically bringing about a revolution in the minerals industry, and these state-of-theart equipment procured with the support of the World Bank goes to show our readiness to do what is needful to bring the mining sector to the position of relevance in the nation’s economy. “This centre will serve as a springboard and nerve-centre for mineral analysis and other researches in the region. Plan is underway to inaugurate a dimension stone laboratory within the centre to have a more integrated system for mineral sample analysis,” Sada stated. According to Sada, “Nigeria’s mining industry has come of age, and we feel it is only proper to let the world know of developments especially with regards to the enactment of investmentfriendly laws, privatization of the sector, creation of a robust
regulatory environment and the improvements in infrastructure for the sector.” The Minister pointed that more than 10,000 licences have been issued by the Mining Cadastre Office, adding that soon many of the operators would bring in samples for testing and it was only important to have such a centre of the nation will stake its claim as a mining destination for the world. He noted that, “It is thereof important that we have a centre such as this that is adequate and modern to assist promote mining operations in the country. The Ministry is currently in talks with internationally acclaimed mining scientists and agencies such as the Western Australian gover nment for technical support in the development of local skills for the sector. “Our aim is to ensure that this laboratory becomes a Centre of Excellence for the region, in that other countries within the region would come here for their analysis. We are also determined to do things differently using the private sector for the improvement of infrastructure required for the industry.
Solid Mineral
Indian workers down tool at Delta Steel
Oscarline Onwuemenyi
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uring the past 10 years, Nigeria’s mining industry has experienced a boom in both mineral exploration and mining activities. Notable developments include the enhancement of regulatory standards, the proposed development of a Road Map for the reform of the sector, and the commissioning of state-of –the-art mining laboratory in Kaduna, Kaduna State. During this period, several mineral prospects for dimension stones, gold, bitumen and uranium have also been developed to various stages of exploration. This has resulted in an increase of the country’s annual gold production from less than one ton per annum in 1998 to about 50 tons in 2008, making Nigeria one of largest producers of metals in Africa, and increasing the potential for making the mining industry the second fastest growing sector of the economy after oil and gas. Despite the increase in mining production, its share in both GDP and government revenue has remained relatively small. The share of minerals in GDP averaged about 3 percent over 2000-2008 while its contribution to government revenue is 1.5 percent. Nevertheless, mining export accounts for up to 28 percent of merchandize export, and up to 14 percent of total ex p o r t s . Fu r t h e r m o r e , t h e cumulative total FDI in the mining industry during the past 10 years has exceeded US$ 2.5 billion and employed around 1 percent of wage earners. Factors that led to the rapid growth of the mineral sector in Nigeria include a conducive geological environment; political stability; increase in mining activities which have spurred reforms that are aimed at transforming the sector from state-directed to market- oriented. Refor ms included the enactment of a new mining and mineral policy, establishment of a cadastre office, followed by the enactment of inter nationally competitive sector fiscal and legal regimes. While Nigeria has been successful in attracting investments, the mineral sector has continued to face challenges. The sector ’s rapid growth, particularly in small-scale and artisanal mining, swiftly overstretched the Government’s institutional capacity. Existing institutions lack adequate tools, expertise, and the organizational setup required to oversee and support a modern, market-driven mineral sector. Other challenges of the sector include low integration with other sectors of the economy; low contribution to the GDP compared to the sector growth; slow development of small scale mining; low capacity
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Emma AMAIZE
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Digging for Minerals
SMMRP spearheads institutional capacity building for Nigeria’s mining sector of the Government to administer the sector; low level of value addition of minerals; and environmental degradation; lack of diversification of minerals from gold and gemstones into base metals and other minerals Sustainable Management of Mineral Resources Project The World Bank’s Sustainable Management of Mineral Resources Project (SMMRP) has been designed to help the Government meet these challenges and take advantage of opportunities within the sector. The SMMRP is built on a strong analytical foundation, following on an IDA-supported Mineral Sector Development Technical Assistance Project. Analytical work and activities under this Project have helped to attract investments for mineral exploration and mine development through a first generation of improvements to the mineral sector framework, including improvements of institutions and agencies administering the sector. The Project seeks to enhance principles of good governance
and transparency in the sector. To that end, it will support transparency of the mining sector legal and regulatory framework, to support the Government’s objective of ensuring that mining sector development and investment conforms to international good practice, adjusted to the particular conditions of Nigeria. The Project focuses on spurring local economic development through mineral sector development, reducing conflict and improving management of environmental and social issues related to mineral sector development, and increasing growth and enhancing competitiveness in the mining sector The SMMRP, under the auspices of the Ministry of Mines and Steel Development, has in the past two years embarked on capacity building through bi-annual train-thetrainers programmes, aimed at engendering quick realization of the economic diversification objectives of government. At the last session which rounded off last week in Abuja,
participants as usual were drawn from reputable Federal universities, polytechnics, the Federal Inland Revenue Service (FIRS), National Universities Commission, the Lagos Business School, the Office of the Accountant General of the Federation, Nigerian Institute of Mining and Geo-sciences, and the Ministry of Mines and Steel Development. Facilitators were drawn from acclaimed universities from globallyrecognised mining countries including Australia, Canada and New Zealand. Topics covered during the three-week workshop include Gover nance, Accounting Taxation, Finance, Environment and Mining. Speaking to Sweetcrude at the workshop, one of the facilitators, Prof. David Dunbar noted that the current tempo of endeavours by the government through the Ministry of Mines and Steel Development should be intensified. He said, “There is a need for more government commitment towards the development of the extractive industry, thus liberating the country from its monoeconomic status.”
ARRI- THE entire Indian workforce of the troubled Delta Steel Company, DSC, Delta State, yesterday downed tools over hitches in payment of their salaries by management. The workers marched to the administrative block of the company yesterday morning to make know their grievances and compelled their compatriots who did not initially want to join the protest to join the bandwagon. However, their Nigerian counterparts did not join the protest, as in the words of one of them, “An average Indian here earns five times what his Nigerian counterpart earns and so, there is practically no need for us to join them in their strike action. It is like we are working in the same company but different rules of engagement for the workers”. Vanguard learnt that some of protesting Indian workers were being owed between three months to six months, while others are owed for upwards one year and more. Yesterday’s action by DSC Indian workers is different from the hunger strike embarked upon by 16 of them who had voluntarily resigned and asked management to pay their entitlements to enable them return back to their country. Efforts to get the response from the management, yesterday, proved abortive, but the Acting Public Affairs Manager of the company, Mr. Kes Agbosa, who spoke to Vanguard, Tuesday, on on the total hunger strike by Indian wokers disclosed that some of the workers had been paid their entitlements. He said the action of the Indian workers was embarrassing to the company, pointing out that M r. A s h o k B h u t e w h o declared a total hunger strike till death on Monday, was paid his entitlements, last Saturday, two days before his latest action. According to him, “Those who have not been settled will be paid their entitlements in the shortest possible time, the number is decreasing and I don’t see why they should embark on this kind of action against the company”.
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Freight
M But for concession,
r Gerald Chidi, the l a s t Managing Director of the defunct Nigerian National Shipping Lines spoke with Sweetcrude’s Godwin Oritse recently on a number of issues r e c e n t l y, n o t i n g t h a t i f government had not concessioned the ports, the port system would have collapsed. Excerpts: The story of the Nigerian National Shipping Line could be said to be a success, but it failed to sustain the training of Nigerian seafarers as the people that were trained but the shipping line could train younger Nigerians how would react to this? I want to say that in 1973, coming to Nigerian ports was a herculean task You know you cannot manage a sea port with out marine pilots who bring in the vessels to the quay side. As at that time all the pilots we had in country were either Egyptians, Pakistanis and Indians but with the Nigerian National Shipping Line in Place, they provided the platform for the training of Cadet officers and deck officers who became Master Mariners and during this process, the local pilots were produced, Marine engineers were also produced There is no way anybody can train sailors without ships because their training involved class room work and sea time experience Without sea time experience you can never pass the exam and nobody will issue you a certificate. Throughout the life time of NNSL, it was able to fulfill that part of its objective. At a point, Nigerian seafarers were being exported to other parts of the world. And if by now NNSL was still in place, we probably be competing with the Philippines whose major business seafaring What in your opinion led to the death of NNSL? There are so many factors responsible for the demise of NNSL, first of all, the structure of the company was not too good. There was a time NNSL Incorporated a subsidiar y company in the United Kingdom called Niger Line U K Limited. That company provided fleet management services along with other technical services but at point in 1980 to 1981 the company became moribund and because that company had a lot of British shipping technocrats who helped the operations of the NNSL so by the closure of that company, we lost that a bunch of experienced hands at the closure of the company. And the most important problem of the company was in the area of ship maintenance and
Nigeria’s port system would have collapsed —Gerald Chidi
Mr Gerald Chidi repairs. When ship repairs are not done according to the right ethics, the bills or cost of such repairs w ere inflated, we were not paying the dockyards who do these repairs as at when due and people started ar resting Nigerian vessels all over the world and the shipping community particularly Europe began to lose confidence in Nigeria. Another problem was that when NNSL was really functioning, it was used as an instrument for the stabilization of North bound freight rates that is in the carriage of cocoa and export commodities and that was at the time the government was controlling it.
You cannot run a liner service with one ship, so this was exactly one of the problem NUL had apart from the fact that some of the problems of NNSL were transferred to them because they did not ask for the right from the people that had an intimate knowledge of what happened in NNSL
The idea was to make these commodities competitive in the world market by making that the freight rates were low because these goods were sold on the basis of C I F (Cost Insurance and Freight) which that the seller or who ever carry the cargo will have to pay NNSL in local currency . So we were getting the freight in local currency, we also had the opportunity of carrying all the project materials for Aladja Steel Company, Ajaokuta Steel Company and the Aluminium Smelting Company in Ikot Abasi and many other government project. While the freight rate was all paid locally, the operational expenses were paid in foreign currency so therefore we are owing in Europe while we earned income in Naira. The cost of operation like bunkering the repairs, the spare parts the salaries of our European partners were paid in hard currency but we were earning most of the in come in Naira. So these were the problem that led to the problem of the company apart from the repair expenses because some people were not exactly as honest as they should be. After the demise of NNSL, the Nigerian Unity Line was floated and that again died a natural death what went wrong with NUL? Yes you cannot run a liner service with one vessel, you that if you are in shipping business unless you are going to give your ship on charter basis. Let say your route is West Africa to United Kingdom , you must have a regular service schedule that importers or shippers will always a vessel to ship their goods on a regular basis not one in say tow or three months You cannot run a liner service with one ship, so this was exactly one of the problem NUL had apart from the fact that some of the problems of NNSL were transferred to them because they did not ask for the right from the
46 people that had an intimate knowledge of what happened in NNSL. How many vessels did NNSL start with? NNSL started with four vessels in 1959, by 1961 they had 15 vessels but unfortunately, these vessels were second hand vessels and they were all general cargoe vessels. So by end of the civil war, the government felt that these vessels were getting very old so there was this need to retonnage, to bring in new vessels but like everything government, they decided to get 19 vessels and they were all the same type of vessels. Combo vessels, they carried general cargo mixed with containers. Bt this time, the concept of containerization had started, if it were a private organization, that would have been to time to buy container vessels, Vehicles carrying vessels and possibly tanker vessels, you diversify, you do not stick to one line of vessels but because it is government once they set their five year development plan they have to follow it up not that it was deliberate to make a mistake but it was because of the rigid government policy of following their plans. So the problem was that by the time those ship started coming in the scene, they had become obsolete compared with what their competitors were using so we were a mis-match in competitive world of shipping.. The operational cost of our vessels was also high when compared to the containerized vessels, we burnt more fuel, paid more salaries and all that. Is it possible for Nigeria to float a new shipping line, is it possible for Nigeria to start again considering the state of the economy? If I am asked to set up a new national line, my approach will be quite different, I will not say what my approach will be but it definitely will not be 100% ownership by government. What do you think is the biggest problem of the Nigerian maritime industry such that if we get it right everything will fall into place? You cannot solve the problem of the maritime industry with just one or two solutions, first of all I said that you cannot produce seafarers when you do not have vessels and I do not which country will accept your trainees for sea time without considering its own citizens. For us to develop indigenous capacity we must have vessels, however they structure it will also go a long way to its success. You know that what happened to NNSL also happened to some
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Freight 4,189 seafarers attacked in 2010
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Godwin ORITSE
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HE International M a r i t i m e Organisation , IMO, has said that over 4,180 seafarers was violently attacked in 2010 following a renewed onslaught on sailors by pirates. Speaking at the recently concluded World Maritime day celebration in Port-Harcourt River State, IMO’s Secretary General Captain Efthimios Mitropoulos stated that while the innocent seafarers bear the brunt of these attacks, the world’s economy also suffers. Mitropoulos who was represented by Mr Willy Azuh IMO’s Head of Africa Anglophone section out of the 4,185 seafarers that suffered attacked last year, 1,090 were taken hostage as no fewer than 515 were reportedly used as human shield. A total of 488 seafarers attacked by pirates last year are currently suffering significant psychological or physical abuse while several hundreds of sailors are also being held hostage. He explained that these disconcerting and worrying developments have only strengthen IMO’s determination to meet the challenge of the menace of pirates. “We believe that we can use the experience gained and the successes achieved in reducing piracy else where in the world to good effect.
“ To a l l e v i a t e t h i s unacceptable situation,no effort should be spared, shipping companies must ensure that their ships rigorously apply the IMO guidance and industrydeveloped best management practices, so that when venturing into the Western Indian Ocean region, they comply with all the recommended measures and that way no ship vulnerable. “While IMO has positioned itself in the epicentre of the concerted efforts being made, it cannot alone supply an instant solution to the issue – particularly since, although piracy manifests itself i at sea, the roots of the problem are to
be found ashore. ‘Nevertheless, though our action plan and other initiatives, and in collaboration with other interested parties equally determined and committed as ourselves, we feel confident we will be able to make a diffedrence where the problem is being most acutely felt at sea. He added. He was of the opinion that more need to be done particularly in the area of capturing, prosecuting and punishment of all those involved in piracy. His words “the tracing of r a n s o m m o n e y, a n d t h e confiscation of proceeds of crime derived from hijacked ships, if the ultimate goal of consigning piracy to the realms of history is
But for concession, Nigeria’s port system would have collapsed CONTINUED FROM PAGE 46 other shipping lines in the West African sub-region and Central Africa like Black Star line because in the 1970s there was this UNCTAD code of 40-40-20 which led to the establishment of the defunct National Maritime Authority , NMA. At that time, 40% of the cargo Nigerians, 40% for the originating country and 20% for cross traders but when NNSL and other African lines were stabilizing, European lines became uncomfortable about it and they started campaigning about the freedom of the sea saying that the sea be left opened and that they should be no cargo reservation. And they went further when the European Union said that Anticompetition is against their law and they started withdrawing Europeans lines that were
maritime conferences and the 40-40-20 cargo sharing formula collapsed and with the collapse of cargo sharing most of the African shipping line also went under. But in places like United States, there certain businesses a foreigner dare go into because they are exclusively reserved for Americans. These are things we should look into if we really want to grow we know that now we cannot share cargo and that was the main objective NMA was established and this is the reason why it appears they have not been able to do much. I remember that some years I did a study for NMA , on how to train seafarers and we recommended what they should do .
Mr Gerald Chidi Do you support the idea of port reforms? If there is anything that Obasanjo regime did that was right, it is port concession.
If there was no port concession, by now there will be terrible congestion in our ports , there would be an increase in freight rates because there would have been imposition of sur-charge and I am sure that the Nigerian Ports Authority would not have been able to provide the equipment needed to for the situation. If there was no concession the Nigerian ports would have collapsed, so the I support the idea of port concession 100%. About the increased cost of cargo. Nobody would have able to say what the cost of cargo would been. If you add delay to ships, you add surcharge, it would have been much more than what we are having now and the issue of labour would have overwhelmed the authorities but the
concession exercise has revolutionize the dock labour industry. It is said we do not a seaport in Nigeria, that what we have are River port how would you react to this? There are so many opportunities for the construction of deep sea ports in Nigeria, in Benin, Lagos Onne in River State we natural harbours that can accommodate the establishment of deep sea ports. We have not planned for the future, in another five years if we do not improve on port facilities we have now, we are going to run to into a lot of problems. And that is because cargo throughput is increasing and if you do plan accordingly then you are bound to run into problems. In this country, we do census but we do not plan with the figures of such exercise
Technology
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A modular refinery, courtesy of Chemex
Modular petroleum refineries Jim-Rex Lawson MOSES
F
rom crayons to jet fuel, refined petroleum has myriad uses in the modern
economy. The challenge therefore for the refining industry is to manufacture more products with lower environmental impact and to diversify the feedstocks so consumers can have greater security of energy supply. These new feedstocks can be difficult to process, sometimes requiring new technologies and processes. The refining industry is faced with the need to enhance and update its technology portfolio at the right time to be flexible to changing feedstocks and qualities, and to produce better and more efficient products while addressing environmental legislation and changes in vehicles. An oil refinery is considered an essential part of the downstream side of the petroleum industry. Oil refining is therefore the process that takes us from crude oil to refined or finished products such as high-octane motor fuel (gasoline/petrol), diesel oil, liquefied petroleum gases (LPG), jet aircraft fuel, kerosene, heating fuel oils, lubricating oils, asphalt and petroleum coke.
And a petroleum refinery is a factory where crude oil is transformed into petrol and hundreds of other useful products or a factory where crude oil is broken down into its various components, which then are selectively changed into new products. Refineries come in various sizes. They range from small topping and reforming refineries to sophisticated complex refineries, but perform three basic steps which are Separation (fractional distillation), Conversion (cracking and rearranging the molecules), and Treatment. A typical large refinery costs billions of pounds to build and millions more to run and upgrade. It runs around the clock 365 days a year, employs hundreds of people and occupies as much land as several hundred football pitches. That Nigeria’s oil refineries are obsolete, very expensive to fix and maintain, and most of the time not operating at maximum installed capacities is no longer news. The need to have a secured and affordable energy supply that will fuel the much desired economic transformation and propel Nigeria’s quest of becoming one of the 20 most industrialized nations by the year 2020 if deemed imperative must be approached from various angles.
Pictures of a modular refinery, courtesy of TechModular
One of such ways is to focus less attention on the erection of giant refineries that require huge funds to set up and begin to lay more emphasis on the construction of Modular or Mini refineries to encourage private and public sector participation in the refining industry because they are
cost effective to install, train staff, and start-up. This means even State Governments can afford to build and operate as much as 3 of these refineries which will in turn generate employment opportunities. WHAT IS A MODULAR REFINERY?
As the name implies, it is a refinery whose parts or equipment are constructed in modules designed to be transported quickly and easily anywhere in the world. It is also commonly referred to as a crude oil topping plant and comes in a variety of CONTINUES ON PAGE 50
Technology
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Picture of a modular refinery at night CONTINUED FROM PAGE 49
sizes. A modular process unit is designed specifically for the crude oil feedstock to be refined, with capacities that range from 500 to 20,000 barrels per day. Depending on t h e r e f i n i n g c a p a c i t y, Modular Refineries can be designed and constructed with the major part of the work accomplished in a confined and controlled atmosphere which greatly improves efficiency and keeps costs low. Modular construction shortens on-site installation time. Operating revenue is achieved sooner with modular equipment because shop construction is more efficient than traditional foundationmounted (stick-built) construction. The refining capacity of a modular refinery can be upgraded to higher one. Modular refineries are ideally suited for remote locations and are viable for investments by private and public sector groups as a source of rapid production of primary fuel products and raw
Modular petroleum refineries materials for petrochemical downstream industries. MAJOR PROCESS UNITS O F A M O D U L A R REFINERY: Hydrodesulfurization Unit (HDS) : Removes sulfur compounds from distillate products. Desalter : Performs the removal of salt from crude oil prior to distillation to prevent fouling and corrosion. Catalytic Reformer Unit (CRU) : This is a unit for producing high-octane motor gasoline from naphtha. Hydrocracker Unit (HCU) : Increases diesel production from heavier products. Splitter/Stabilizer : Here a feedstock is separated into two products. Atmospheric Distillation unit (ADU) : The atmospheric distillation unit separates the different fractions of the crude oil according to boiling range into naphtha, kerosene, diesel, and residuum products. It operates at less than fifteen psig.
Layout of a typical modular refinery, courtesy of Google
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JTF activities spark tension in Peremabiri Samuel OYADONGHA
Y
enagoa - Tension is again brewing in the r i v e r s i d e community of Peremabiri in the Southern Ijaw local government area of Bayelsa State in the wake of the deployment of gunboats and the alleged cases of harassment of the natives by men of the Joint Task Force. The riverine oil and gas rich settlement is not only host to the moribund multibillion naira Peremabiri Rice Farm which according to the World Bank has the potential of feeding the entire sub Sahara Africa but was also host to one of the many militant camps in the mangrove swamp at the height youth militancy in the troubled Niger Delta which almost crippled the nation oil industry before federal government came up with the amnesty programme which brought about peace in the delta and reprieve to the oil companies. Sweetcrude gathered that the deployment of the soldiers along the Diebu Creek flow station to assist two dredging companies operating in the area was at the instance Anglo Dutch oil giant, Shell Petroleum Development Company (SPDC) with several oil facilities along the creek. The elders of the aggrieved riverside community had penultimate week accused the oil giant of instigating tension in the area with the deployment of gun boats and soldiers to protect the two dredging companies with alleged cases of extortion, destruction of business activities, illegal bunkering and harassment of the natives of the community. The leaders of the community including the former member of the Upper Senate of the Movement for the Emancipation of the Niger Delta (MEND), Eris Paul also known as General Ogunboss and the Chairman of the Community Development Committee (CDC), Dickson Perebode accused the oil giant of neglecting the Memorandum of Understanding (MoU) signed with the community. The community in a petition to the President, Dr. Goodluck Jonathan, the National Security Adviser, the Chief of Defence Staff and the Inspector General of Police warned of the of the deteriorating security situation in
Army in training
the area. In the petition written through i t s c o u n s e l , M r. C h u k s Egbulonu the community said the SPDC and the JTF should be held responsible for any crisis in the area. The community said though the existing peace in the area was achieved with the efforts of the people, the leaders and the state government, the action of the oil giant and the soldiers may destroy it in a few days if not called to order. “Since 1959, the company signed an agreement with us
and pulled out when crisis entered the area. But now that we have achieved peace and a new agreement that brought them back for work, they are repaying us with attacks, beating, and intimidation and near rape. We want a complete implementation of the agreement with the community,” they stated. The community in the petition claimed that its molested natives have decided to file a court action against the SPDC and its officials for their role in the documented cases of attacks against them.
“The people are ready to secure justice and plead with the President and the military authority to investigate and give the people justice. “The SPDC will learn from Peremabiri that the love for true justice is a reality that cannot do away with men. Those who can kill and destroy young men and women, who have lost hope in their activities, will learn that we will leave a message for the world to know that the evil done cannot go unpunished,” the community declared.
Total charges secondary school students Jimitota ONOYUME
P
O RT H A R C O U RT: Total E and P has enjoined students in post primary schools in its host communities and the country to develop good character, noting that it is a relevant quality in human and capital development. Speaking at the opening of this year’s Open Day Forum in Port Harcourt with the them: Character and Learning “ Deputy Managing Director, Port Harcourt District of the multinational oil firm, Mr Denis
Berthelot enjoined students participating at the programme to embrace honesty, integrity and hard work, stressing that these qualities would make them achievers at the end of the day. Open Day Forum, is a part of the company ’s corporate social responsibility programmes to post primary schools in its host communities. It is designed to adequately prepare the post primary school students for challenges along the lines of their education. The programme which started eight years ago draw participants from select schools in Akwa Ibom and Rivers state where the company does it
operations. This year’s theme according to the Deputy Managing Director was apt since it dwelled on character and learning. Continuing, the deputy MD, Mr Berthelot said the firm had awarded scholarship to students at the post primary, tertiary and graduate levels in its host communities and also built classroom and donated books for secondary school libraries in Rivers state. He said the firm also constructed a lecture theatre at the University of Uyo and also set up the Institute of Petroleum Studies (IPS) at the University of Port Harcourt.
Boko-Haram: Edo Immigration beams search light on foreigners Gabriel ENOGHALASE
B
ENIN – EDO State Comptroller of Nigeria Immigration Services, Mr. David Akwo yesterday in Benin disclosed that the command has beamed its search light on foreigners in the State with a view of checking the infiltration into the state by members of the dreaded Islamic sect, Boko Haram. Mr. Akwo who made the disclosure during a courtesy visit to the Benin Monarch, Omo N’ Oba Erediauwa in his Palace, therefore called on citizens of the State to be alert at all times to avoid being caught unaware by the Islamic Sect who would want to make life uncomfortable for fellow Nigerians. The Comptroller also appealed to the Benin Monarch to educate his subjects on the need to be security conscious especially at this point in time. He listed some of the achievements of the Edo State Command of the Immigration Service to include, arresting of some non – Nigerians who attempted to vote during the last general elections in the country and the arresting of those involved in human trafficking. On the issuance of epassport, he warned those who are fond of providing fake documents to secure International Passports to desist from doing so or prepared to face the long arm of the law. Responding, Omo N’ Oba Erediauwa wished him the best of luck in his assignment and assured him of the preparedness of the Palace to assist him in his duties.
Bayelsa government reacts to labour ultimatum
B
ayelsa State g o v e r n m e n t yesterday reacted to labour seven days ultimatum threatening industrial action over its failure to implement the new minimum wage blaming the delay in the implementation of the new minimum wage on the late conclusion and submission of the committee’s report set up to work out the modalities for the payment.
52 Kidnapped Bayelsa monarch regains freedom Samuel OYADONGHA
E
Community oil spilage
Samuel OYADONGHA
Y
enagoa - No community in Bayelsa State has experienced more oil spills than the rustic sleepy settlement of Ikarama community in the Okordia clan of Yenagoa local government area along the Taylor Creek. The community may not known to most Nigerians but it is host to the Anglo-Dutch giant, Shell Petroleum Development Company (SPDC) OkordiaRumuekpe Trunkline. Within four weeks, no fewer than nine oil spill were recorded in the community with large volume of crude oil spewed into its already dying ecosystem and the ver y existence of the traumatized natives. The once luxuriant and alluring green forest of this serene settlement bifurcated by the snaky Taylor Creek has since given way to patches of scorched wasteland due to the incessant oil spills in the area which some of the natives blamed on equipment failure. But others also blamed saboteurs for the unfortunate pain being inflicted on their community. Sadly after recording six spills within three weeks with the last resulting in fire outbreak, the
Indiscriminate oil spills define Shell operations in Ikarama community community again experienced three additional spills within a space of two days making it one of the endangered enclaves in the delta which unfortunately little is known about. The volume of spills is a source of grave concern not only to the poor natives whose existence depend on the land but also to environmentalists who have been following the trend of events in the blighted region. Though the company succeeded in clamping five of the spills but an inferno believed to have been ignited by suspected saboteurs engulfed the area destroying farmland and aquatic lives. Indication that the incessant spills ravaging the area might have been the handiwork of saboteurs was fueled by the unwholesome activities of
illegal refinery operators around the Mbiama flank of the Orashi River known as the hub of the illegal bunkering business off the East West road. In spite of the repeated raid of the Joint Task Force on the sprawling illegal refinery sites tuck away from prying eyes along the river bank business has been booming for the illegal bunkerers as several haulage trucks could be seen waiting to load their consignment some distance away from the Mbiama bridge which is not far from Ikarama. Lamenting the incessant spills one of which resulted in a mid night inferno the natives said the intensity of the heat and orange flame that lit up the night forced many of them to evacuate their families for fear of the inferno spreading to their homes.
The distance between some huts/houses and fire caused by the spills, according to Environment Rights Action Field Coordinator in the state, Comrade Alagoa Morris who visited the troubled community to assess the extent of the despoliation on the environment, was less than 20 meters in some cases. The natives, young and old (including children) he said watched helplessly from safe distances. “From the very thick column of smoke rising from the inferno, the flames cold be seen rising up to about 25 meters or so above the ground,” he recalled and pleaded with the authorities to take steps to properly investigate the incessant spills in the community and outbreak of fire. Also speaking on the inferno, a resident Mr. Tamunokomie E. Oba said “the fire outbreak caused a lot of panic because crude oil is all around our dwelling and we fear the fire might spread to burn down the house.”
xactly twenty six days after he was forcefully whisked away from his palace by some gun totting youths, the Ebeni Ibe of Atissa Kingdom in the Yenagoa local government area of Bayelsa State, King Godwin Igodo has regained his freedom. The monarch in his seventies sources told Vanguard reunite with his family Tuesday night at his riverside Obogoro community some distance away from the Bayelsa State Police Command. He was reportedly taken away to Opobo in Rivers State several miles from his domain after his abduction from his bed where he had retired for day on September 1, 2011 between 9.30 and 10pm. His kidnappers it would be recalled came through the Ye n a g o a r i v e r a n d disappeared through same source into the labyrinth of creek that fateful night. The kidnappers had seventy two hours after the abduction of the monarch established contact with his family and even demanded N25m ransom before they cut off further communication with them ostensibly to keep them in suspense and compel them to raise the ransom. Though it could not be ascertained if any ransom was paid before the septuagenarian said to be suffering from arthritis was released but a source close to the family told Vanguard that the traumatized monarch was released in far away Opobo in Rivers State. According to him, the kidnappers may have had a change of heart and set free their victim due to his old age and poor health. “He (monarch) no doubt suffered so much discomfort in the hands of his captors and this may have informed their letting him go especially as nobody was prepared to meet their demand. It might interest you note that he was released in far away Opobo in Rivers State,” the source said. Contacted, the State Police Public Relations Officer, Mr. Eguavoen Emokpae (ASP) said he was yet to get the official report on the monarch’s release.
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Jimitota ONOYUME
P
ORT HARCOURT: T H E r e c e n t dissolution of the third board of the Niger Delta Development Commission, NDDC by President Goodluck Jonathan did not come to many as a surprise. This probably was because the board since it came into existence on August 5th 2009 has been engulfed in all kinds of conflict including personality clash among most of its members. In the judgment of many, members of the board spent more time fighting themselves than they gave to issues of development in the region. Close observers of events in the Commission traced more of the problems and controversies that trailed the board to some of the alleged actions of the former Managing Director, Chibuzor Ugwoha; they said he was always jumping from one controversy to the other. They recalled that barely three months he came on board as Managing Director of the Commission; he was enmeshed in a two hundred million naira controversy, money reportedly used to renovate his office. The issue lingered on for some time; it pitched his office against that of a former Chairman of the House of Representatives Committee on Air Force, Hon Halims Agoda.
Race for MD of NDDC board heats up in Rivers state The dust generated by the 200 million had hardly settled when the Independent Cor r upt Practices and other related offences Commission; ICPC summoned the Managing Director, the executive director Finance and Administration, Power Aginighan, Executive Director Project, Arch Esoetek Etteh to appear before it over alleged unilateral award of contracts worth N61 billion Naira by the Managing Director. This issue was still on when another petition came up that the Managing Director allegedly transfer red the Commission’s fund from Union Bank to First bank without input from the board. Accusations and counter accusations lingered on on this issue for several months until President Goodluck Jonathan, acting on t h e f i n d i n g s a n d recommendations of the Steve
They recalled that barely three months he came on board as Managing Director of the Commission; he was enmeshed in a two hundred million naira controversy, money reportedly used to renovate his office Orosanya presidential committee on NDDC dissolved the board. Some observers of events in the Commission largely blamed aides of the MD for some of the controversies he found himself.
Unconfirmed reports also alleged that some aides of some of the ‘ogas’ in the commission were involved in sale of contracts Meantime mixed reactions have continued to trail dissolution of the board. While some hailed the action of the President there are those who saw it as a violation of the constitution. A statement issued by activists in the Niger Delta under the aegis of C a m p a i g n f o r Pe a c e a n d Development in the region said the President should have removed the bad eggs in the board rather than the outright dissolution. Their statement signed by Comrades Philip Agadema and Charles Effiong recalled that former Presidents Olusegun Obasanjo and Musa Yar Adua in the face of similar challenges only acted on the provisions of the NDDC act to deal with the situation. “We have had similar situations in the past and former Presidents relied on the only legal instrument or authority in the NDDC to act. The President can only act on the NDDC establishment etc act 2000 which under section 5 sub sections 3 empowers the President to remove any member of the governing board for misconduct. It was in exercise of this power that President Obasanjo removed Engr Godwin Omene and Engr Udo Nbossoh, Executive Director Project under Omene and replaced them from the state that produced them. “
An Executive Office
NNPC/CHEVRON Announces 2011 Arts Competition/ Exhibition
L
agos, September 2 8 , 2 0 1 1 : Chevron Nigeria Limited, CNL, Operator of the NNPC/Chevron Joint Venture, has announced that the two-week activities marking the 2011 National Arts Competition for Children will commence on Thursday October 6, 2011 with Exhibition and Prizegiving ceremony at the Muson Centre, Onikan Lagos. A statement signed by Femi Odumabo, general manager in charge of policy, government and public affairs of Chevron Nigeria, said this will be followed by an art exhibition at the Chevrond o n a t e d L e k k i Conser vation Centre, Lekki. He explained that the theme of the 2011 edition of the Arts Competition is, Partnership for National Progress. According to him, it has been specially packaged as part of the company ’s 50th Anniversary celebration to commemorate the success of the NNPC/Chevron’s partnership over the years, in supporting national growth and development. In his words, “the sponsorship of Arts Competition is in line with NNPC/Chevron’s vision of helping Nigeria lay a foundation of creative and productive youths who, by virtue of their education and creativity, can stand tall amongst their peers in any part of the world.” Guests expected at the occasion include: Ministers for Education and Youth Development, Representatives of the National Assembly, Lagos State Government, U N I C E F, U S A I D , NNPC/NAPIMS, Permanent Secretaries, the adjudication panel members and members of the Press. The NNPC/Chevron Joint Ve n t u r e i n v i t e s t h e general public to the twoweek arts exhibition which follows at the Lekki Conservation Center. This exhibition will feature the display of the various artistic works by the participating children from all over the country.
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Gov. Amaechi and some of his projects
Changing the face of oil rich Rivers state Jimitota ONOYUME
P
ORT HARCOURT: “NIGERIA is working in Rivers s t a t e ” . T h e foregoing were the words of Governor Isa Yuguda of Bauchi state while on facility tour with members of the Nigerian Bar Association, NBA of some projects of Governor Chibuike Rotimi Amaechi in Rivers state. Also speaking, a former president of the association, Lanke Odogyon, SAN who led the NBA team on the inspection said “our prayer is that a Pharaoh that does not know Joseph should not come one day to ruin the legacy projects of this a d m i n i s t r a t i o n ” .
It would be recalled that the NBA had its annual conference in the state recently and Governor Amaechi used the opportunity of the event to take them round some of his projects. At the model primary school and Health Centre in Elekahia, the first project visited, most of them could not hold back their admiration as they were conducted round facilities in the school. They asked the Governor if the place was a university. Some even had to call camera men to take shots of the place promising that they were going to take the pictures back to the governors of their states for such project to be replicated in their states. One of the lawyers told Sweetcrudethat any child that
It is not just resources that determine what we are seeing but the will to perform is part of it. We want to recommend this for our leaders in all stage
does not measure up in this school would certainly not do well in any other place he or she is taken to even it if it’s overseas.
While talking about the project Governor Amaechi first gave credit to his Commissioner for Education, Dame Alice Lawrence Nimi, saying she was behind the concept. He said it was one of the 750 model primary schools being built by his administration. He said when he came on board as Governor he saw the decay in primary education in the state and had to take the burden of funding it from the local government. And so far according to him, several of these model schools have been built all over the state. The Governor became uncomfortable when at a point most of the lawyers were heard comparing his performance with that of some of his colleagues in other states. He had to appeal to them not do so, noting that allocation to each state varies. According to him,
Rivers was among two other states with appreciable allocations in the country. He said it would be unfair to want to match development programmes in any of these states with what obtains in other places. In spite of the foregoing argument most of the lawyers still insisted in their comments to the Sweetcrudethat Governors of some states in the country should show visible account of stewardship with legacy projects. Each of the model schools have a sick bay, staff quarters, an E a n d h a r d c o p y l i b r a r y, auditorium for about five hundred students and sizeable play field. Amaechi conducted the lawyers through the various facilities in the place and later led them to one of the Model Secondary schools at Ebubu, Eleme. He said it was one of the twenty four new model secondary schools being constructed by his administration. All of them marveled at the sight of the school with over eight edifices. Former president of the NBA, Lanke Odogyon, SAN enjoined governors in several parts of the country to emulate the effort of Governor Amaechi. “We should commend the Governor and the government. It is not just resources that determine what we are seeing but the will to perform is part of it. We want to recommend this for our leaders in all stage. Even if you don’t have the money Amaechi has you should do things on a small scale. Our prayer is that a Pharaoh who does not know Joseph will not come tomorrow and these things being built will be ruined. It is quite commendable.” He also called for more allocation to come to the federating units in the country. “I think more resources should be shared to the state. But I don’t think we can import wholesale America’s federalism because of our peculiarity. Not all the governors are like that of Rivers state, some are drunk by 10am in the morning “ Also a frontline right activist and Senior Advocate of Nigeria, Mike Ozekhome put other governors in the country to task. “Any governor from Nigeria should borrow a leaf from Governor Amaechi. Twenty five persons in a class, two in a hostel as he said is the structure of the school, is great. Some governors are criminals; they are not performing at all. It boils down to competence. In terms of governorship, Amaechi has shown that you can have good allocation which he has acknowledged and us it generously for the people “.
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The Question johniyene@yahoo.com
A Theatre of Auguries
A
s the story teller told us, the Niger Delta is the theatre of auguries; the oil and gas wealth which redefined the Persian gulf from desert land to destination of choice, destroyed the land, the people and the potential of the Niger Delta. The story teller is a retired wood carver and boat builder. Before then he was a fisherman and deep sea diver. According to him, diving lost its feasibility as the sea bed lost its clarity and tranquility. The fish went away and fiber optic boats replaced the wooden canoes they carved out of the fat bodied trees of the Niger Delta. And that was how he adapted himself into retirement, telling stories on the sandy beach to young men, engineers, kidnappers, illegal oil refiners, bankers and all the folk who traverse his community for booty and its bounty. The man is tall, gaunt and sinewy. His language is noble, his voice clear and his diction, enlightened. Although he looks 70 years old, he is not one day older
Dancers
Bayelsa CDBs celebrate SPDC GMoU Samuel OYADONGHA
Y
enagoa - Although the oil producing communities in the Niger Delta are known to have vent their anger on the oil multinationals at the slightest provocation but it was a different scenario yesterday at the Banquet Hall of the Bayelsa State Government House as natives of the oil producing communities in the state in their thousands including royal fathers such as the respected former Minister of Pe t r o l e u m , a n d n o w t h e Amayanabo of Nembe Kingdom, HRM Dr. Edmund Daukoru, Mingi the XIIAmanayabo of Nembe Kingdom, all spoke in support of the implementation of the Anglo Dutch oil giant, Shell Pe t r o l e u m D e v e l o p m e n t Company (SPDC) GMoU in the state. It was a sort of carnival as the various clusters, Tarakiri CDB, Iduwini CDF, Oporomor CDB Nembe City Development Foundation, Bassan West CDB, K o u c l u s t e r C D F, N e m b e Bassambiri CDF and Bilagorogbene Mein CD came up with their respective stand to exhibit what their communities had benefited from the oil
company through the GMoU in the last couple of years. The large number of people that converged at the banquet hall is understandable as they have come to see the company as their only neighbour giving the latter ’s commitment to the provision of some of their basic needs coupled with the near absence of both state and local government in their communities. To the natives, the GMoU success stories, are many and cut across health, education, electricity, water, economic empower ment and human capital development. In one of the GMoU agreements signed in the state, the Okordia-Zarama cluster provided electricity to the nine communities in the area which has helped to boost economic activities in the communities. Also in the state, the Nembe cluster set up printing press in Nembe and a transport company which has improved transportation in the area. In addition, the Nembe cluster operates a well furnished guest house and a well equipped cyber café in Nembe town and the cluster is currently renovating the state owned Nembe General Hospital with GMoU funds and also ready to kick start the community health insurance
scheme. In the EA field, some of the clusters such as Kou have successfully implemented their community insurance scheme which is the only means to health security in the area. The six communities in the cluster also enjoy solar powered water scheme, while the women are empowered with micro credit facilities to boost their economic activities. Another cluster, Iduwini in Ekeremor council area has embarked on different infrastructural projects and trained 25 seamen at the Ghana Maritime University, Ghana. Recently, 60 youths from their cluster were trained in various agro-based enterprises at the SonghaiAmukpe Centre and they were also provided with starter packs to establish them in their trades. In the Tarakiri cluster\, education was a key priority in their needs assessment, which made the CDB to partner with the Bayelsa State National Youth Service Corps (NYSC). As a result of this partnership, 24 NYSC members were posted to schools in EgbemoAngalabiri and Agbidiama to boost educational standard in the cluster. This yielded result and for the first time in many years, pupils according to report observed Children’s Day in the community while the cluster also awarded scholarships to 130 beneficiaries of tertiary and secondary school students.
The luxury and misfortune in hearing of a people’s debasement from the lips of a romanticist is that you sooner lose the biting edge of the story
than 48 years. He is not given to self pity and does not indulge in the superlative dialect of the oppressed and victimised, what my friend, Dr. Austin TamGeorge refers to as minority discourse. “Our story is not unique in any way”, he tells his audience, an admixture of Niger Delta indigenes, Nigerians and European journeymen, “but it is assuming ramifications which would make it classical in its genre.” He is the consummate story t e l l e r, r e e l i n g o u t shoddy statistics that are beyond argument. He draws his analogies from drought in
Northern Nigeria, the political stalemate in America, the intemperate politics of conservative Britain and the excruciating poverty of India. He drifts from the Niger Delta with the ease of a skater on an ice rink and glides into a depressed world society: he avoids the catch phrases and clichés of universal economists, dwelling more on the societies battered by the incompetence, avarice and desperation of the men in power. The luxury and misfortune in hearing of a people’s debasement from the lips of a romanticist is that you sooner lose the biting edge of the story. This man is no fool, no American or Indian sympathiser; he is without any doubt an activist of the Niger Delta. The thrust of the story he tells is about his loss (of home, peace and the dignity of setting his own table). In the telling of the story, he lost his audience to universality or his audience lost him because he assumed the role of curator instead of staying on cue as a simple narrator. The Niger Delta is a theatre of auguries; we started to protest our living conditions which were brought on us by unpretentious thieves and political interest groups. Among these species were those more subtle, possessed with vast talents at manipulation so that when our protests were appearing to succeed by virtue of their legitimacy, genuineness and correctness, they were scuttled, undermined and neutralised by a spate of ‘natural’ events which saw us in the embellishments of the leader and policy maker unable to enter a protest against ourselves. And now gagged and muffled, we hear rumbling drums as of protests from the sand dunes of the Sahara while the rape against our patrimony by the designers of this ‘acceptable arrangement’ continue unabated.
Bristow Ad