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A Review Of The Nigerian Energy Industry May, 2014

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NIGERIA:

A catalogue of stalled upstream oil projects NNPC/IOC’s 2014 spend yet to be approved Govt fails to acknowledge outstanding operations debt

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Oil theft, vandalism compound security concerns Concern mounts over industry’s imminent collapse

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Contents

02

2014 May, SweetcrudeReports

Editor’s note

I

n a nation hardly affluent in positives, it is big news that Nigeria has overtaken South Africa to become the continent's largest economy. In the oil and gas sector, however, such positives are, at present, almost non-existent. Waning investor confidence, the legion of stalled upstream projects and government's lukewarm attitude tell the story.

Our checks as we prepared for the publication of this special edition of SweetcrudeReports for the Offshore Technology Conference in Houston, Texas reveal that, almost halfway into the fiscal year, the 2014 joint venture spend for the Nigeria National Petroleum Corporation/International Oil Companies' operations has still not been approved by the Ministry of Petroleum Resources. To worsen heightened IOCs’ concern over threat to sanctity of contracts, the government, through the Ministry of Petroleum Resources and the NNPC, has reportedly failed to acknowledge portions of a multi-billion dollar debt incurred as a result of the ‘carry’ policy, through which government’s equity contribution had been funded in the past.

Meanwhile, persistent incidence of crude oil theft and pipeline vandalism has practically brought the industry to its knees, with the Anglo-Dutch oil giant, Shell shutting down its operations in the Western Niger Delta and Eni, the operator of the Nigerian Agip Oil Company, still pondering its future following 90% shut in of its output.

And then this dire prediction that the nation might lose its position as Africa's largest oil producer this month. A report, citing oil theft as responsible for the expected development,

says exports could fall to their lowest since records began in 2009. According to the report, exports in May are set to be at around 1.59 million barrels per day, bpd, excluding the Forcados and Ebok grades of crude oil, which had still not emerged.

All these clearly paint a picture of gloom for the nation's oil and gas industry, and it is not surprising, therefore, that industry operators, who spoke to us in the course of putting this edition together, are predicting imminent collapse for the sector, which ironically, is yearning for growth in reserves and production capacity .

To all those suggesting a downward slide for the oil and gas sector, the NNPC Group Managing Director Andrew Yakubu says, "no cause for alarm". Nigeria, he says, is positioned to continue to maintain its place as Africa's leading oil producer, "going by developments in the oil and gas sector". We wait and see.

In the meantime, we will be moving our operations temporarily to Houston, Texas for the annual Offshore Technology Conference, the largest gathering of oil and gas industry experts, operators and stakeholders in the world, holding from May 5 - 8. Last year saw attendance in excess of 100,000 people. This year's figure may be more. As usual, your SweetcrudeReports team will be part of this global gathering. Stay with us for live reports and pictures from the event on all our four platforms: SweetcrudeReports daily newsletter, Sweetcrudereports.com, SweetcrudeReports Monthly Newspaper and SweetcrudeReports in The Guardian Newspapers.

4 12 16

COVER

32

GAS

37 42 47 52

POWER

58 62 68 74

A catalogue of stalled upstream oil projects

OIL

NPDC to invest $5.2bn on acquired IOC assets

FOCUS

Nigeria’s gas revolution train on track - Ige, NNPC Chief

Shell, others working to ensure Nigeria maintains place in gas market

Mobil to contribute 575mw to national power grid

FINANCE

Nigeria needs N11.2tr investment to achieve 40,000MW by 2020

LABOUR Defunct PHCN workers demand probe of unpaid entitlements SOLID MINERAL

Govt seeks support to develop steel infrastructure

FREIGHT

‘New criminal trends real threat to shipping industry’

MOTORING

Top 12 used vehicles most likely to sell for less than $10,000

TECHNOLOGY

New technology for today’s demanding environment

COMMUNITY

Oil spills, impunity and govt weakness in Niger Delta

EDITOR-IN-CHIEF Hector IGBIKIOWUBO EDITOR Chuks ISIWU ASSISTANT EDITORS Yemie ADEOYE Toju VINCENT Eluonye KOYEGWUAEHI

GM, Marketing SNR. CORRESPONDENTS Oscarline ONWUEMENYI Nkem IGBIKIOWUBO Chima UGWUANYI +234 08060249746

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Cover Story

2014 May, SweetcrudeReports

NIGERIA:

A catalogue of stalled upstream oil projects NNPC/IOC’s 2014 spend yet to be approved Govt fails to acknowledge outstanding operations debt

04

Chevron also has stalled upstream oil and gas projects and they include: full development of the Nsiko field valued at $10 billion; the Sonam pipe-lay project, including jacket and topside fabrication, valued at $1 billion; the Funiwa gas project, including platforms fabrication, installation and pipelines valued at $1 billion, and the Escravos Export line which includes 30”x48km pipeline installation, an onshore scope, possible PLEM and buoy installation valued at $500 million.

Similarly, two upstream oil and gas industry projects of Total have also stalled and they include the Ikike project’s EPCI of jackets, deck piles (2,300 tons), valued at $150 million, and the OML 100 firewater system upgrade project which involves detailed engineering and design, deck extension fabrication, hookup and installation valued at $100 million.

Oil theft, vandalism compound security concerns Concern mounts over industry’s imminent collapse

On the gas front, the Nigerian Liquefied Natural Gas, NLNG, train 7 expansion programme valued at $8 billion, designed to create 10,000 jobs and to monetise Nigeria’s flared gas has also stalled indefinitely. The Brass LNG project valued at $20 billion with similar capacity to monetise flared gas and create thousands of jobs has also stalled indefinitely.

Govt/IOC’s 2014 spend yet to be approved IOCs, who spoke with us on condition of anonymity for fear of recrimination, decried the lack of commitment on the part of government to either get projects moving along or approve the operating and capital expenditure for 2014.

Offshore rig HECTOR IGBIKIOWUBO

N

IGERIA may have perfected the art of being in the news for the wrong reasons and the current number of stalled upstream oil industry projects which undermines effort at growing the country’s production capacity adds to the expanding list.

At the time of filing this report, checks revealed that the 2014 joint venture spend for the Nigeria National Petroleum C o r p o r a t i o n , NNPC/International Oil Companies, IOC, operations had still not been approved by the Ministry of Petroleum Resources.

To compound heightened IOCs’ concern over threat to sanctity of contracts, it was gathered that the government through the Ministry of

Petroleum Resources and the NNPC have failed to acknowledge portions of a multibillion dollar debt incurred as a result of the ‘carry’ policy, through which government’s equity contribution had been funded in the past.

SweetcrudeReports investigation reveals that current value of stalled upstream oil and gas industry projects is over $60.15 billion with its attendant impact on the country’s job market and oil output.

Meanwhile, the growing incidence of crude oil theft and pipeline vandalism has practically brought the industry to its knees, with the AngloDutch oil giant, Shell shutting down its operations in the Western Niger Delta and Eni, the operator of the Nigerian Agip Oil Company, NAOC, pondering its next line of action as a result of 90% shut in of its output.

Shell has six outstanding projects that are stalled and they include: SURF – New tie back to new FPSO valued at $2.5 billion; the FPSO valued at $3 billion: SPM and OLL valued at $200 million; and the SPS Package valued at $1.5 billion, all on the Bonga South West project.

Industry operators, who spoke with SweetcrudeReports, insist that given current realities, the oil and gas industry is in dire straits and faces imminent collapse.

Upstream oil projects valued at $60.15bn affected

The other two Shell projects that have stalled are full development of the $10 billion Bonga North project and the pipe lay and hook-up of the Forcados Yokri Integrated Project, FYIP – Phase 2 valued at $250 million.

Exxon on the other hand has seven projects which have stalled indefinitely and they include: Fabrication of 2 jackets and one deck valued at $300

million, T&I of WHP valued at $150 million and T&I of pipelines and HUC valued at $350 million, all for the Satellite Fields Development Project 2.

Four other stalled Exxon upstream oil and gas industry projects include the production uplift pipeline work on Ekpe, Edop, Oso RK-RH, that is, installations of the following risers and pipeline sections: Ekpe 10” riser, Edop 10” riser, Oso RK 12” riser and Oso RH 12” riser, all valued at $150 million.

T

he remaining stalled Exxon upstream projects are the Etim PM: the 16” pipeline, 10km and topside works of various platforms; 5 year pipeline programme, including various pipelay, offshore construction valued at $1.05 billion, and the Oso QIT Gas pipeline project, including 20”, 51km gas pipeline.

All efforts to get a reaction from the Minister of Petroleum Resources, Mrs. Diezani AlisonMadueke, proved abortive at the time of filing this report.

However, while speaking earlier in the year at the 14th Nigeria Oil and Gas international conference and exhibition in Abuja, the petroleum minister noted that the industry suffers from limited institutional capacity and poor funding.

“The industry has also suffered from limited institutional capacity, poor funding of investments, high technical costs, obsolete laws, outdated fiscal regimes and infrastructural constraints with particular respect, of course, to gas commercialisation.”

Govt fails to acknowledge outstanding operations debt The joint venture operating companies have over the years

CONTINUES ON PAGE 5

Cover Story

2014 May, SweetcrudeReports

05

NIGERIA:

A catalogue of stalled upstream oil projects A rig CONTINUED FROM PAGE 4 had to fund a substantial portion of government’s equity contribution at negotiated interest rates owing to what the Minister of Petroleum Resources described as competing fiscal needs by other sectors of the Nigerian economy.

“In terms of funding, the competing fiscal needs by other sectors of the economy have meant that the joint ventures have suffered for a long time and we are aware of this - that it yields much higher benefits to us than the production sharing contract. And as oil prices have risen, so have costs escalated, most of our oil producing facilities are actually in our onshore and shallow waters and they are ageing and would need to be refurbished or replaced; additional funding will be required to enable these facilities meet current fire safety standards.

Lack of financial depth in domestic capital market and non-commercialisation of our national oil company are critical factors limiting access to domestic and international capital financing,” she enthused.

Oil theft, vandalism compounds security concerns “Nigeria has faced unprecedented challenges with regards to losses in production occasioned by incessant vandalism of crude oil export pipelines and domestic crude oil and petroleum product pipelines.

In 2013 Nigeria - Africa’s largest oil producer, suffered severe attacks on its critical export pipeline system leading to the loss and or deferment of about 300, 000 bar r e l s /d a y . T h i s deferred production is equivalent to the total production of Equatorial Guinea and larger than the entire production of Ghana, Congo Brazzaville, Cameroun and Gabon,” Andrew Yakubu, the NNPC group managing director, disclosed recently.

In October 2013, Shell announced plans to offload under-performing assets valued at $15 billion. Although the company didn’t identify these assets, some of its Nigerian oil blocks, along with 23.1 percent stake in the Australian production and exploration company Woodside Petroleum, has been put on the market.

International oil companies operating in Nigeria have all been victims of the atrocious incidence of pipeline vandalism and the government is losing tons of revenue, yet lacks the political will to stem the bleeding.

Egina field development

Ministry to move the project forward. Located about 60 kilometres from Port Harcourt in 40 metres of water, Ofon 2 field development will raise output from the current 30,000 barrels of oil equivalent per day, boe/d, to a total of 90,000 boe/d of oil, gas and condensate.

Ofon Phase 2 will sharply reduce Total’s greenhouse gas emissions by eliminating flaring during routine operations. The project will monetise the associated gas from the field, a major step forward for the environment. By the time Ofon 2 comes on stream, the company would have deployed an array of technical innovations and implemented the most extensive local content programme in the country to date.

The Egina field development project is currently one year behind schedule, with no clarity going forward because the Ministry of Petroleum Resources failed to abide by the principles guiding the conduct of bids for project award and execution.

SweetcrudeReports gathered that owing to delays occasioned by the Petroleum Ministry’s inability to act decisively and meet with representatives of Total in a timely manner, the project has suffered cost overruns.

L a s t y e a r , SweetcrudeReports reported the underhand dealings leading up to the award of the Egina FPSO contract to Samsung Heavy Industries even though Hyundai Heavy Industries had emerged preferred bidder in a process superintended by NAPIMS, Total, DPR and the NCDMB.

Investigations reveals that sometime in February, Mr. Abiye Membere, the erstwhile group executive director in charge of exploration and production at the NNPC sent off the deputy managing director of Total Exploration and Production Limited who had come to discuss the Ofon 2 field development and attendant challenges.

We had reported Samsung’s ill-preparedness to deliver the project owing to its limited incountry capacity, among other short-comings. Ladol, Samsung’s Nigerian partner, has since dragged the later and other parties before a federal high court pleading breach of contract.

Although ranking personnel of Total refused to be quoted for fear of a possible backlash from the Petroleum Ministry, they volunteered that the Ofon 2 project may drag beyond this year if the NNPC and the Ministry do not come alive to their responsibilities.

Ofon 2 Nigeria’s Ofon 2 field development programme is envisaged to come on stream this year, barring any more delays occasioned by the inability of the Petroleum

Usan Total’s announcement, in mid November, 2012, that it sold its 20 per cent stake in Nigeria’s Oil Mining Lease, OML 138, to China Petrochemical Corp, Sinopec, as part of an assetdisposal programme took

In terms of funding, the competing fiscal needs by other sectors of the economy have meant that the joint ventures have suffered for a long time and we are aware of this - that it yields much higher benefits to us than the production sharing contract

industry watchers unawares.

However, what has confounded many is the Ministry of Petroleum’s refusal to endorse the deal.

SweetcrudeReports gathered that there is pressure on Total to spin off 5% equity to a company dictated by the Petroleum Ministry, while giving the rest to Sinopec.

ConocoPhillips/Oando In the late January 2014, Oando announced it had duly completed all financial commitments regarding the acquisition of ConocoPhillips assets in Nigeria, adding that it was awaiting final approval from the Minister of Petroleum Resources. ConocoPhillips, COP, also submitted an application to the minister in this regard.

Owing to this regulatory requirement, Oando Energy Resources, OER, entered into an amendment agreement with ConocoPhillips to extend the outside date for completion of the acquisition from January 31, 2014 to February 28, 2014.

OER also paid an additional deposit of $50 million, bringing the total deposit for the COP

acquisition to $500 million.

However, at the time of filing this report, the Ministry of Petroleum has still not granted regulatory approval to this acquisition.

PIB The Petroleum Industry Bill, PIB, is an omnibus legislation which combines 16 different Nigerian petroleum laws into a single coherent legislation. The PIB which was first submitted to the National Assembly in 2008 has been locked in a rancourous debate with the IOCs opposed to the fiscal terms contained therein, the NNPC concerned about being broken up and forced to do business differently, legislators and other stakeholders disturbed by the enormous powers the bill seeks to grant the Petroleum Minister and northern Nigeria elements agonising over extra derivation packaged for oil bearing communities.

Although the Petroleum Ministry has repeatedly promised to drive passage of this bill, indications are that given the divergent interest working at cross purposes, the bill may not be passed anytime soon.

Oil

06

2014 May, SweetcrudeReports

Onshore oil rig

NPDC to invest $5.2bn on acquired IOC assets ...To grow oil output to 160,000bpd YEMIE ADEOYE

A

s part of plans to significantly raise its oil output, the Nigerian Petroleum Development Company, NPDC, the upstream arm of the Nigerian National Petroleum Corporation, would be investing about US$5.2 billion on its assets acquired from International Oil Companies, IOCs, over the next four years.

The company is also planning to increase its output on Oil Mining Lease, OML, 42 by an additional 30,000 barrels per day, bpd, while also working to grow its overall production to a total of 160,000 bopd. With the additional 30,000 barrels, total output from OML 42 would rise to 60,000 bpd from the current 30,500bpd.

The NPDC took over the operatorship of OML 42 assets from Shell Petroleum Development Company of Nigeria, SPDC, in January 2012 when it was producing 25,500 bpd from 11 strings.

Speaking on the $5.2 billion investment plan, the managing director of the company, Mr. Victor Briggs, said: "The investment plan will kick off with capital expenditure of $1.8 billion this year, which we expect will increase production from 140,000 barrels per day now to 160,000bpd by end of this year, and to deliver 600,000 Mcf/d of gas by year-end".

NPDC has bolstered its production and increased reserves to around 2.1 billion barrels after taking over operatorship of six onshore oil

wells sold off by Shell, Total and Eni, including OML 30, which recorded output of 35,700bpd at the end of last year.

communities in OML 42 for Freedom to Operate, FTO, as well as engagement of operations and maintenance contractor for Batan flowstation.

The company disclosed its latest investment plan and the move to push up production in a recent presentation, where it stated, “Six months after successful takeover of operatorship, NPDC raised the production level to 30,500 bpd (13,800bpd net) from 13 strings.

This milestone production was unprecedented in the history of Batan (flowstation) production even when SPDC was operating".

The firm stated that it also succeeded in putting in place over 40 service contracts for the sustenance of Batan flowstation operations and the SPDC contract for the rehabilitation of oil and gas facilities and installation of power generation facilities at Odidi Node by Lee Engineering and Construction Company.

According to NPDC, other key achievements on OML 42 since the takeover included the accomplishment of a zero lost time incidence and conclusion of engagement with the host

It stated that the repair of Ajuju 1S flowline to secure about 1,200bopd crude oil production, repair of Ajuju 6T flowline to secure about 1500bpd crude oil production

and sustained Batan flowstation production at about 30,500bpd from 13 strings.

The firm also listed the hookup of Batan flowstation houseboat to the flowstation's gas generator to reduce diesel consumption by 500 litres per day as another accomplishment.

It announced that the next phase of work be opportunity maturation through the commencement of Odidi and Jones creek re-entry projects.

“These projects have several modules in phases with Phase 1 geared towards additional 30,000 bpd and 45mmscfd gas from Odidi field and about 48,000bpd production increase from Jones creek,” the company said.

Oil

2014 May, SweetcrudeReports

07

Ogo: Afren, partners to “refine, de-risk" prospects with seismic shoot

Afren workers on duty

CHUKS ISIWU

A

fren Plc and partners are aiming to "refine and de-risk" the other prospects in their Ogo discovery off Nigeria with a seismic shoot that is currently underway.

Afren, alongside partners Lekoil and Optimum Petroleum Development Limited, made the discovery at the Ogo field in the west offshore Lagos in 2013 with reserves of about 750 million barrels of oil equivalent.

The ongoing 3D survey expected to be completed in this second quarter of the year is being carried out by Polarcus’ vessel Polarcus Nadia over about 1,500 square kilometres in Afrenoperated OPL 310 Licence, which hosts the discovery.

Afren and partners will also be drilling an appraisal of the Ogo discovery later in the year after the ongoing 3D seismic shoot to identify f u r t h e r d r i l l i n g opportunities.

Lekan Akinyanmi, chief executive officer of Lekoil the oil and gas exploration and development company with a focus on Nigeria and West Africa, said seismic data from the 3D shoot would supplement older 3D

readings as well as 2D and electromagnetic data acquired last year.

“The survey will provide key data that will enable us to refine and de-risk the other prospects in the block that were identified by dated regional 2D. It will also provide valuable reservoir characterisation and definition information,” he said.

Akinyanmi added that the three partners would drill an appraisal of Ogo in the second half ahead of development planning work.

“We are excited about the potential of the licence and look forward to the results of the data acquisition,” he further stated.

In the concluding part of last year, the partners had announced the suspension of drilling operations at the Ogo field and a significant upgrade to estimated gross mean recoverable resources compared to pre-drill expectations

S

pecifically, OPL310 is located in the Upper Cretaceous fairway that runs along the West African Transform Margin.

Extending from the shallow water continental shelf to deep water, the block represented a wild cat

exploration opportunity in an under-explored basin.

Detailed pre-drill evaluation of the block identified several prospects lying in the same Turonian, Cenomanian and Albian sandstone intervals that have yielded significant discoveries in Ghana and Côte d’Ivoire.

The first exploration well drilled by the partners - Ogo1 - was the Ogo prospect, a four-way dip-closed structure in the Turonian to Albian sandstone reservoirs, which was targeting 78 mmboe of gross P50 prospective resources. The drilling programme included a planned side-track well Ogo-1 ST - testing a new play of stratigraphically trapped sediments that pinch-out onto the basement high targeting 124 mmboe of gross P50 prospective resources. In total, the partners were targeting 202 mmboe of gross P50 prospective resources.

The Ogo-1 well was drilled to a total measured depth of 10,518 feet, and encountered a gross hydrocarbon section of 524 feet, with 216 feet of net stacked pay. The Ogo-1 ST reached a total measured depth of 17,987 feet, encountering hydrocarbon intervals in the same Turonian, Cenomanian and Albian reservoirs that were successfully drilled and

The appraisal well planned by the partners for the second half of this year, ahead of development planning, will also increase 3D coverage on the block, currently covering only 25 per cent. of the block, to define further prospectivity.

logged at the Ogo-1 well. In addition, the syn-rift section encountered a 280 ft true vertical thickness gross hydrocarbon interval.

Based on the well data, the partners estimate the P50 to P10 gross recoverable resources range to be significantly ahead of predrill expectations at 774 to 1,180 mmboe across the Ogo prospect four-way dip-closed and syn-rift structures. In addition, the pressurevolume-temperature, PVT, analysis confirmed excellent reservoir fluid properties with a 40 deg API, 600 GOR, 0.42 cp viscosity oil in the Turonian, a 39 deg API, 870 GOR, 0.40 cp viscosity oil in the Cenomanian and a condensate rich gas in the

Albian of up to 115 bbls/mmscf.

The appraisal well planned by the partners for the second half of this year, ahead of development planning, will also increase 3D coverage on the block, currently covering only 25 per cent. of the block, to define further prospectivity. “We will continue to work with our partners to progress the Ogo discovery while also focusing on examining other opportunities to build our portfolio of assets. Ogo has provided us with a flying start to our strategy to build a substantial, Africa-focused oil and gas business,” the Lekoil boss stated.

Oil

2014 May, SweetcrudeReports

08

Oil workers

Obsolete laws crippling Nigerian oil industry - Operators OSCARLINE ONWUEMENYI

between them and the government.

O

“Most of us on this stage have been in Nigeria for many years and we have not seen things getting better.

And so you wonder why that is the case, because many of the things in place dates back to 1960 when N500,000 used to be a lot of money.

il industry operators led by Chair of Shell companies in Nigeria, Mr. Mutiu Sunmonu, and the Managing Director of ExxonMobil companies in Nigeria, Mr. Mark Ward, say obsolete laws and regulations formulated as far back as the 1960's were the greatest impediment to the growth of the nation's oil and gas sector.

According to them, the sector was still being governed by laws and regulations made in the 1960’s at the inception of oil production in the country, resulting in inefficiency in the system and out-dated process of contract award which, in turn, lead to delay of contact execution.

They listed other factors hampering the growth of the industry to include the bottleneck and bureaucracy associated with doing business in the country and lack of proper funding models for the joint operations

“Every single contract has to go through the process that worked in the 1960’s, it’s very difficult and takes a long time and it's overwhelming the system, so clearly there is a need for reform. Reform is needed to solve some of the fundamental issues associated with the inefficiency we see in the system that dates back to the origin of the industry," Ward said.

Mr. Sunmonu, on his part, harped on the bottleneck and bureaucracy associated with doing business in the country and lack of proper funding models for the joint venture operations as he insisted that difficulty experienced by investors while doing business in the country may

The business will be the loser, investors will lose and our country will lose. I really believe that time has come if we are going to move our industry forward for all parties to have a much more practical cause them to start thinking approach of other alternatives.

He said: “If I just look at the sheer hassle of moving project through in this environment, it’s overwhelming. And when you have to go through some of these hassles, every investor will start to think about alternatives".

He noted that the idea of having parallel evaluation and parallel negotiation of the same contract is a waste of time, stressing that “there must be a common approach whereby you deal with your process on a once and for all basis.

"If we are not cost efficient, this industry will die because there will not be enough money to do as much projects that will enable the government of this country to realize the aspiration it has set."

According to him, “The very first thing for me is practicality. We are running this business with out sufficient sense of

practicality. Both operators, contractors, regulators need to have a much more practical approach to the way we do business here.

“There is absolutely no point where every party in the value chain is sticking to its guns. The business will be the loser, investors will lose and our country will lose. I really believe that time has come if we are going to move our industry forward for all parties to have a much more practical approach”.

While also lamenting the lack of proper funding models for the industry, he warned that failure to conclude one this year would mean no project will be executed leading to low revenue for the government and loses for operators.

“There have been different discussions and models being put forward to enable easier funding we need to bring this to closure. We can’t continue to discuss the same thing yearly. We have to take the view that you either fund projects or there will be no project."

Oil

2014 May, SweetcrudeReports

10

Nigeria may lose position as Africa's largest oil producer this month il theft would likely push Nigeria off its spot as top African crude oil exporter this month and exports could fall to their lowest since records began in 2009.

O

reached in 2011 and the May figure is set to fall beneath the exports of Angola, which is usually the continent's second largest exporter.

string of theft-related outages at major Nigerian grades, with Bonny Light production severely affected for much of last year.

Angolan exports in May were set to be 1.67 million bpd, a provisional shipping list indicated.

Nigeria's exports in May are set to be at around 1.59 million barrels per day, bpd, excluding the Forcados and Ebok grades of crude oil, which had still not emerged, according to Reuters.

Production of the Forcados grade has been hit by under water pipeline leakage due to oil theft which led operator Shell to declare a force majeure on the grade weeks back.

Planned exports in April were initially seen at 1.73 million bpd, but were revised up to 1.86 million bpd after additional Bonny Light cargoes were added.

Exports are far below the highs above 2.2 million bpd

The problems affecting Forcados are the latest in a

Traders said that it was likely that there would be no exports of Forcados for May, although should the pipeline be fixed soon there

could yet be a small volume of this grade, which could

push shipments above Angolan levels.

Nigeria will remain Africa's leading oil producer -NNPC GMD YEMIE ADEOYE

N

igeria is positioned to continue to maintain its place as Africa's leading oil producer, according to group managing director of the Nigerian National Petroleum Corporation, NNPC, Mr. Andrew Yakubu.

Yakubu, who disclosed this in Abuja, said his position is informed by development in the nation's petroleum sector, which are expected to put the nation in good stead to maintain the pre-eminence place in Africa's oil and gas sector.

He stated, for instance, that the deepwater sector in Nigeria was facing rapid development and seeing huge investments, hence it would account for half of the nations output in the next decade.

According to him also, Nigeria could grow from the 2.2 million barrels of oil being produced per day to three million barrels with new initiatives being put in place by the government.

“Nigeria should continue to maintain the leading position in

Africa in view of new oil and gas prospects and reserves.

“Significant production increases is assured with the implementation of these outlined objectives and Nigeria shouldn’t do less than 3 million bopd by 2020 taking into cognisance OPEC quota and funding,” he said.

Further reeling out the country’s rich profile in oil and gas, the NNPC boss stated that the country’s reserves stood at 36 billion barrels of oil and about 182 trillion cubic feet of gas while production averaged 2.2 million barrels of oil per day in 2013. These figures translate to reserve-toproduction ratio of 42 years for oil and 155 years for gas.

“In Africa, only Libya has more oil reserves than Nigeria and despite new discoveries in Sub-Saharan Africa, especially in Mozambique, Nigeria still has undiscovered gas potential of about 600 tcf,” Yakubu further said The NNPC helmsman maintained that even in recent times with the emerging African oil producers, the discovery of the Ogo field in 2013 with reserves of about 750 million barrels of oil equivalent shows that the Niger Delta remains one of the most prospective areas in the world.

He revealed that about 49% of Nigeria’s licensed blocks (397) were still open and active, stressing that the availability of production allowances would also provide a welcome boost for small fields, and profitability would increase in the proposed Petroleum Industry Bill, PIB, currently before the National Assembly.

Oil

2014 May, SweetcrudeReports

NNPC records first oil from Opuama wells ...Producing 2,500 barrels per day

T

he Nigerian National Petroleum Corporation, NNPC, through its subsidiary, the Nigerian Petroleum Development Company Limited, NPDC, has announced production of first oil from Opuama oil wells.

Located in OML 40 in the Niger Delta onshore, which was shut in by Shell Petroleum Development Company of Nigeria in March 2006, NPDC said it successfully re-opened two Opuama oil wells with a combined production of 2,500 barrels of oil equivalent per day, bopd.

It stated that on taking over the operatorship, it focused on the restoration of production by replacement of corroded in-field flowlines, refurbishment of the 30,000 barrels of liquid per day

production flowstation and the repair of the 36kilometre oil export pipeline, including replacement of all corroded and damaged sections.

NPDC made the disclosure in a statement issued by its spokesman Ugo Atugbokoh and made available to SweetcrudeReports via electronic mail. The statement stated that with the successful restart of production, NPDC would now progress its field development plan.

"It is anticipated that production will increase to 8,000 bopd by the end of 2014. The entire development work was carried out by local contractors. This further illustrates the company’s commitment to the Nigerian Content Policy of the Federal Government," the company said.

OML 40 is one of the assets

NIGERIA CONTENT INITIATIVE Dr. Ibilola Amao

Too many hanging projects and unfavourable conditions in the air

W

e are now probably a laughing stock because we went ahead to announce a bid round with a set timetable that seemed rather ambitious, commenced a road show and then went silent on the existence of 31 or 29 marginal fields.

The original programme with timelines provided by DPR indicated that the bid rounds would be concluded by March and the winners of the bids would be announced in April 2014. Today, we are nowhere near any announcement of winners and a visit to the DPR Website would confirm that. A notice to prospective bidder’s states: “The modalities on the impending Marginal Field Bid Round shall soon be uploaded on this site in due course”. Where else in the world can this play out? To think that many credible Nigerians were able to identify serious minded investors, invest time, effort and resources to develop strategies, plans and put agreements in place with the anticipation that a bid round had commenced shows how far from serious we have become as a nation.

In December 2013, I actually thought it made sense to find partners (political, financial, technical and administrative). I met or spoke with the most reputable leaders in Nigeria’s oil and gas industry to assess the seriousness of the pronouncements and to fashion out strategies for marginal field acquisition then commenced with a plan to bid. Hey presto, after holding a Marginal Field workshop on the 27th of January, 2014 it became obvious and clear that some of us were more serious than the drivers of the project and in fact the projects (fields et al) had practically disappeared and there was no available marginal field to be bid..

Apart from the marginal fields programme, there are too many Nigerian projects hanging because Foreign Direct Investment to Nigeria has changed location to more lucrative, serious, stable and promising economies. There are too many variables yet unresolved for Petroleum Economists to make a choice and preference for Nigeria. The delayed passage of the Petroleum Industry Bill, political dynamics and state of security (human and financial) are primary reasons for the decline in Final Investment Decisions being given for major capital projects.

With NLNG Train 7, OKLNG, Brass LNG stalled and Anadarko Petroleum in Mozambique aggressively trying to maximize the return on investments on 65 tcf of natural gas, Nigeria should have huge cause for concern as Mozambique is closer to the Asian market and would probably become a preferred choice for LNG supply in the Far East. After Qatar and Australia, Mozambique is being strategically positioned to become the world’s third major exporter of LNG.

Oil rig YEMIE ADEOYE

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It is anticipated that production will increase to 8,000 bopd by the end of 2014.

The entire development work was carried out by local contractors

that were divested from Shell. NPDC took over the operatorship in January 2013. It is now jointly owned

by NPDC and Elcrest Exploration and Production Nigeria Limited.

In Angola, BP Block 18, ExxonMobil's Block 15. Total's Block 17 provides the LNG supply to the plant which is located in Angola on the Congo River delta and has a capacity to produce 5.2 million metric tons per year of LNG for regasification at a terminal in Mississippi, USA. U.S. oil major Chevron with a 36.4 percent shareholding, Sonangol with 22.8 percent stake and other stakeholders such as Total, BP and ENI are set to reap from their proactive investments where Nigeria lost a huge opportunity. Nigeria is yet to progress from Brass LNG FID’s muted in 2006, 2008, 2010 and 2012. To think that the greatest investor in LNG in Qatar is Shell, the Alma Mata of the Minister of Petroleum Resources and Qatargas 4 a fully integrated liquefied natural gas (LNG) at Train 7 (Operating as a 70:30 Joint Venture between the Qatar Petroleum and Shell), I am shocked that Brass LNG that is located in the same State from which both Mr. President and his Minister of Petroleum hail from is yet to make any significant progress.

The economics of LNG plants in Nigeria has been significantly affected by poor FID timing, the shale gas option in the USA also, so there is an urgent need as a last resort for Nigeria to enter the era of process technology, production of refinery, petrochemical and fertilizer plant products for in-country sufficiency. Whilst our Ministry of Petroleum is in limbo, distracted from its area of core competence or busy coordinating other related matters, Nigerians need to read the hand writing on the wall and focus more on power, the agro-allied industries and utilizing gas to implement local content, create value, jump start the manufacturing industry and enable industrialization.

Dr. Ibilola Amao is the Principal Consultant with Lonadek Oil and Gas Consultants Limited, a firm of technical consultants with their core competence in the area of Local Content and Vendor Development. For more information or to reach Dr. Amao you can email her at lolaamao@lonadek.com or visit www.lonadek.com.

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Deregulation of oil industry, only way to sustain economy – Alison-Madueke OSCARLINE ONWUEMENYI

M

inister of Petroleum Resources, Mrs. Diezani AlisonMadueke, has emphasised the absolute need to deregulate the petroleum industry if Nigeria aims to survive economically.

She said it was only through a deregulated oil and gas industry the country could achieve its aim of stemming the negative impact of on-going divestments by some multi-national companies.

Alison-Madueke, who spoke in Abuja, also called for a repositioning of the nation’s oil and gas industry, noting that the focus of the industry should turn from oil production to gas.

“In terms of downstream deregulation, now that the power sector reforms are well underway, the Nigerian government’s commitment to restructuring the oil and gas sector remains unwavering. In this regard, downstream deregulation remains an important part of the reform framework going forward that seeks to resolve financial sustainability and investor confidence in this vital sector of the national economy now and into the future.

“We are aware that the government has sought to deregulate the downstream sector and continuing regulation, we are aware as well has negative effects; it is fiscally unsustainable, it is resource demanding, it discourages investments and principally, it benefits the rich, not the masses in the society that we intend to reach in the first place,” she said.

The minister added: “It is true that deregulation remains the only way in which capital investment can be encouraged and new employment opportunities created for both foreign and local openings. At the same time, we are aware that been a democratic society, that there has to be a balance among different policies and processes of government and the needs and desires of the people of Nigeria at all times and of course, Nigeria strives to keep that balance at best we can.”

Regarding positioning the gas sector, the minister observed that if the first 50 years of oil production in Nigeria from 1958 to 2008 could be regarded as the oil age, “it is safe to say that the next 50 years would be considered if not now then in retrospect in the future as the age of gas”.

“Government commitment to

gas utilisation is reflected in the gas master plan and gas regulations that were issued in October 2008 which laid the framework for reforms in the gas sector which are basically threepronged; domestic supply obligation, gas pricing framework and gas infrastructure blueprint,” she added.

The minister noted that the oil and gas industry in Nigeria has always been in the centre stage of public discourse and that this should be expected given that it is the mainstay of our economy in terms of export and foreign exchange earnings.

“Recently of course, this public discourse has taken what we might consider unprecedented negative overtones but again, there are pros and cons to everything in the scope of transformation and reformation programmes and the changes that Nigeria is rapidly going through at this time and I think that even in the phase of these negative overtones, there are great possibilities and advantages to be found in the inherent challenges and I think that that is the way we have to look at them and face them as we go forward.”

But, she said the challenges presented "an opportunity for increased transparency, increased accountability and responsiveness in the oil and gas sector of Nigeria today".

Alison-Madueke

She said it was only through a deregulated oil and gas industry the country could achieve its aim of stemming the negative impact of on-going divestments by some multi-national companies Alison-Madueke observed that in terms of challenges, with regards to security in the upstream sector of our industry, the nation had been subjected to the menace of pipeline vandalism and sabotage on an ongoing basis for at least a decade but it has become much more prevalent in the last few years as we have all seen.

“In 2013 alone, all the major crude oil export pipeline systems including the TransForcados line, the Obangwere, Temidaba-Brass line, the Nembe creek line and the Trans-Niger pipeline were severely vandalised and at

different point in time sabotaged,” she said.

She also stated: “The BonnyEscravos line that convey crude oil to NNPC refineries were not spared either, needless to say that pipeline vandalism and sabotage create significant losses for the industry and for our country, these include but

are not restricted to the direct and indirect cost for provision of security, crude oil and petroleum product losses, the loss of production, environmental pollution and degradation and the associate remediation costs to that and of course resulting escalation of project

CONTINUES ON PAGE 15

Local Content still low despite govt's efforts - NCDMB

E

xecutive Secretary, Nigeria Content Development Board, NCDMB, Mr. Ernest Nwapa, says local content was still low in the Nigerian oil and gas sector despite efforts by the Federal Government to improve on the situation.

Nwapa, who estimated real local content in Nigeria at a paltry 18 per cent, said the greatest problem was that the country procures virtually all it needs in its oil and gas sector from abroad.

“The greatest problem we have is that Nigeria procures virtually all it needs from abroad. No matter how we try, if we don’t raise the level of manufacturing, we will not achieve our target,"

he said at the 2014 Nigeria Oil and Gas Conference in Abuja.

“Our partial Nigeria content is at 70 to 87 percent, while our real content, which is based on proportion of contract sums spent on Nigerian made products, is from 12 to 18 per cent. This is considerably very low, and it is a major factor to lack of investment opportunities, underdevelopment and unemployment.

“We have decided to neglect human capacity development, which is essential to the development of the sector, and we have focused on revenue derived. Presently, we still seek foreign partners in re-building our refineries,” Nwapa said.

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‘Deregulation of oil industry, only way to sustain economy’ CONTINUED FROM PAGE 14 implementation cost cycle.

“These losses in turn add pressure on the adequacy of budgetary provision for the oil and gas projects within the sector. In spite of these setbacks, I think the country has managed to maintain an average crude production of approximately 2.3mbpd in 2013, with an estimated 300,000 barrels of deferred production.”

Still, she noted, Nigeria remains Africa’s largest producer with the inherent capacity to boost production to over 3mpd from renewed operations in divested assets and planned deep-water projects.

According to her, while there has been “some concerns over divestments that are going on by the oil majors in our shallow water and some of our onshore assets, it has created an opportunity for much greater entry participation of the indigenous private sector.”

The minister remarked that apart from security challenges, the industry has also suffered from limited institutional capacity, poor funding of investments, high technical costs, obsolete laws, outdated fiscal regimes and infrastructural constraints with particular respect of course to gas commercialisation.

“In terms of institutional incapacity, it is a wellestablished fact that the petroleum laws in the country were mainly designed for oil

production with limited coverage for gas. On the other hand, gas been less fundable compared to oil requires complex commercial and technical regulations designed to ensure its commercialisation.

“As the country moves towards liberalising this sector and encouraging new private investors, new regulations along with guidelines and strong regulator are obviously needed.

Capacity enhancement in areas such as open access routes, network codes, tariff methodology, especially for oil terminals and jetties are urgently required if we are to better manage the interface between technical and commercial regulation which is currently rather poorly understood,” she stated.

She added that in terms of funding, the competing fiscal needs by other sectors of the economy have meant that the joint ventures have suffered for a long time and we are aware of this that despite the fact it yields much higher benefits to us than the production sharing contract. And as oil prices have risen, so have costs escalated, most of our oil producing facilities are actually in our onshore and shallow waters and they are ageing and would need to be refurbished or replaced; additional funding will be required to enable these facilities meet current fire safety standards.

“Lack of financial depth in domestic capital market and non-commercialisation of our

Alison-Madueke

Nigeria remains Africa’s largest producer with the inherent capacity to boost production to over 3mpd from renewed operations in divested assets and planned deep-water projects national oil company are critical factor limiting access to domestic and international capital financing.

“In the downstream, there is also the need to establish a critical oil and gas infrastructure protection squad

NNPC secures judgment in 10-year dispute over $310m contract

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he United Kingdom Commercial Court in London has ruled in favour of the Nigerian National Petroleum Corporation, NNPC, in a suit filed by IPCO Nigeria, a subsidiary of the IPCO Group, a turnkey contractor and investor in energy infrastructure projects, over a dispute that arose from a contract to build an oil terminal in Port Harcourt.

The case which stretched for a decade initially arose from a dispute following IPCO’s claim that NNPC should bear the cost of variations (alterations to the scope of works in the original construction contract), which caused a 22-month delay to the works.

“Following arbitration proceedings in Nigeria, IPCO was awarded $150 million in 2004,

together with annual interest running at 14 per cent, a ruling which was challenged by NNPC in the Nigerian courts.

“However, since then, IPCO repeatedly sought to enforce the award in England before the conclusion of the proceedings in Nigeria resulting in three reported judgments in the case: IPCO (Nigeria) Ltd v Nigerian National Petroleum Corporation [2005] EWHC 726 (Comm); IPCO (Nigeria) Ltd v Nigerian National Petroleum Corporation [2008] EWHC 797(Comm);Nigerian National Petroleum Corporation v IPCO (Nigeria) Ltd [2008] EWCA Civ 1157,’’ the NNPC said in a press statement signed by its group general manager, Group Public Affairs Division, Dr. Omar Farouk Ibrahim.

with the responsibility for dealing with crude and product thefts, vandalism, outright sabotage and general criminality in our sector.

"Additionally, 5000km of product pipeline network that was built in the 1970s are now virtually unusable in certain areas and this affects product distribution as we have all seen," she said.

She noted that the Petroleum Act 1969 as amended and the Petroleum Profit Tax 1959 are the two main laws for the oil and gas sector both of which are mainly for oil and gas export and exploration. The reform agenda of government requires a complete overhaul of these laws to reflect 21st century realities.

According to the minister, the growing importance of gas in the energy mix both globally and locally requires a new focus on creating robustness in the

fiscal and agreements for Mr. President’s particularly in power sector

contractual gas to support agenda for gas relation to the

She maintained that the proposed PIB was meant be a holistic legislation that would replace 16 existing laws in the Nigerian oil and gas industry and should, when promulgated into law, provide the muchneeded clarity, transparency, and optimum revenue potentials for the Nigerian state and a lot more protection for existing investments and investors.

“We have managed to maintain unprecedented stability up till very recently in the supply and distribution of petroleum products across the country. The recent episodes of shortages which are unfortunately in the country is as a result of combination of supply glitches created I think by some false perception, panic buying, hoarding and diversions and also rumours of increases in prices of petroleum products which somehow have refused to go away.

“I think that it is important to state in mitigating crude oil theft and pipeline vandalism, there is of course a dire need at this time to enhance Nigeria’s efforts to stem the scourge thereby increasing government’s revenue,” she stated.

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2014 May, SweetcrudeReports

Nigeria’s gas revolution train on track - Ige, NNPC Chief Capacity of Escravos-Lagos pipeline to hit 2bcf/d East, West of Nigeria to be connected by pipeline Domestic gas price to hit $2.50 by year end

D

r. David Ige, is the Group Executive Director in charge of Gas Development at the NNPC. An exceptional and amiable gentleman, whose soft spoken submission bellies the enormity of his charge, Ige convinced Oscarline Onwuemenyi, SweetcrudeReports’ Abuja Bureau Chief of the Corporation's commitment to ensuring the government's gas revolution agenda gains traction, ongoing projects to expand gas supply infrastructure, etc.

Excerpts:

Implementation of Gas Masterplan We need to remind Nigerians of where we were a couple of years ago, that is number one. Number two is what we have done and, number three, what is our strategic focus going forward and where we are with that.

If you look at our gas consumption, for several years in the country we were literally not consuming gas.

For many years, all the major gas-consuming industries such as NAFCON (National Fertiliser Company of Nigeria) was dead; Ajaokuta Steel was dead; ALSCON (Aluminium Smelting Company of Nigeria) was as good as dead, too. Power was limited mainly to PHCN (Power Holding Company of Nigeria) and Egbin (power station). The truth is our gas consumption as a nation up until about five years ago, apart from exports, was none existent. It is important to state this fact for people to understand how far we have come.

That also meant that at that period of time, the gas infrastructure in the country was essentially zero, or we h a d j u s t e n o u g h infrastructure to support that minimal level of operation. The commercial framework for gas was also not in existence. By this we meant the fact that because the gas consumption was

insignificant, for the gas companies it wasn’t an issue and they didn’t have to make any major investment.

Therefore, the price of gas at that time was also irrelevant.

Also, there was no real contract for supply and almost everything was done on a whim, and companies were not under any pressure or agreement to supply gas.

On the receiving side, too, PHCN could chose to take gas or not given their mood on any particular day. It was this kind of ad-hoc arrangement that persisted at the time.

However, as it became evident to us that there is a major growth coming – as reflected in the Gas Masterplan, which covers gas-to-power, gas-based industrialisation such as fertiliser and petrochemical plants, the West African Gas pipeline and the manufacturing industries we knew for sure that a lot needed to be done to rearrange the market to support the aggressive growth in the industry. And this is what the present administration has been focusing on in the implementation of the Gas Masterplan.

T

o support this kind of growth calls for a major o v e r h a u l o f t h e infrastructure and it calls for

Ige

On the receiving side, too, PHCN could chose to take gas or not given their mood on any particular day. It was this kind of ad-hoc arrangement that persisted at the time. a major overhaul of the commercial framework because to get this amount of gas in the market translates to an investment of about $3 billion annually, which we didn’t have before due to the negligible operations in the gas sector. This amount is incremental on our regular oil activities in order to support the delivery of this strategy. Also, if you needed to spend almost $3 billion a year, you need to be sure that

the pricing is right, and that the agreements in the commercial framework are solid and that the economics work. So, we had to put all of these in place.

At the same time, whilst all of these were going on, we started looking at the strategic positioning of Nigeria; we needed to put Nigeria in the footprint of industrialisation, we needed to increase power consumption, and there are

sectors that we needed to focus on strategically. So, as a result of all of these, we started our journey.

Transition liberalisation

to

full

If you go to advanced markets in the world, these transitions we are talking about takes between 20 to 25 years to achieve. It may interest you to know that countries like the UK took well over 20 years to liberalise their gas market (by breaking the monopoly of British Gas, and unbundling the value chain, among other things). The United States took over 10 years to achieve full liberalisation in its gas pricing (phased price deregulation began in 1979 and was concluded in 1989).

Different countries obviously CONTINUES ON PAGE 17

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Ige

limit. The first one was that we realised that we needed a quick intervention to jumpstart the market. The market was very small but when government started to sell the NIPPs (National Integrated Power Projects) and other projects started coming ahead of us, there needed to be a quick jumpstart to get the market going. We noted that given the way the market is structured (dominated by oil companies such as Shell, ExxonMobil and so on) it was clear that oil would remain the priority of these companies. And so, given the growth that we saw,

17

talk to Chevron. This is because our infrastructure is not connected. That is why before you can get a fully liberalised market the first thing you need to attain is complete liquidity of the market whereby anything can float anywhere and everybody has a choice. This means I can be in Lagos and contract gas with ExxonMobil in Ikot-Abasi or Agip in Port Harcourt; when I have a choice, I can negotiate.

So, what we have tried to do is put in place a transitional pricing arrangement which is in a way similar to what you see in the United States,

So, everything we have been doing in the gas sector in this administration has been in those two directions: getting the engine in place and getting the strategic objectives locked in

‘Gas Revolution train on track’ CONTINUED FROM PAGE 16 have different ways of going about opening up their market. People need to understand, however, that it takes a lot to transition a market. This is because I have been getting a lot of questions asking: when is the price of gas going to change?

You can see from even more established markets how much time it take, talk less of our own here with all the complications it has. We plan to do this in 6 years (2008 to 2014).

Strategic Aspirations of Gas Masterplan It is important to state that like every other market, our journey is towards a fully liberalised market. This is because once you have a fully liberalised market, it now provides the support for your

strategic aspirations. And the three points of our strategic aspirations include: the power sector, gas-based industrialisation and highvalue export. There are two layers we are working on which is like getting the engine ready, because once the engine is ready you can now put that in the car and the car will take you to wherever you want to go. The engine represents our threepoint strategic aspirations which, like the car engine, will fire our power sector, stimulate gas-based industrialisation (gas revolution), and stimulate high-value gas export (Brass LNG, OKLNG, etc.)

We believe that once we have created an engine at the bottom that is basically welltuned, a fully-liberalised market, it will be easy for us to begin to deliver the gas-to-

power, the gas-based industrialisation and quality export because those are the headlines. It is those three interfaces because the consumer outside does not care about your price, he just wants power; he just wants to see the jobs. These are the three strategic initiatives that we are pursuing to improve the economy of Nigeria. But to make that happen, given where we were coming from, we needed to get that engine in place. So, everything we have been doing in the gas sector in this administration has been in those two directions: getting the engine in place and getting the strategic objectives locked in.

Talking about where we are with regards to the engine, we have developed a fourpoint journey towards attaining the engine at its

which was not a gradual growth but a steep growth, if we were waiting for the market to adjust itself, we would never be able to bring in any gas in time enough to meet the 'tsunami' that was coming ahead of gas for power. So we needed a massive intervention, and that was why we introduced the Domestic Supply Obligation, DMO.

T

hen, we introduced a phased pricing arrangement just like those advanced countries did. A fully liberalised market essentially means where you have a willing buyer and a willing seller, you go negotiate your price and get your product. But where we were, where gas was 10 cents, is too far to the point where you can have a willing-buyer-willing seller.

The reason is for you to have a willing buyer-willing seller scenario, the buyer and seller must have choices, otherwise it is not a fair negotiation. In this case, it is not possible for us right now because the infrastructure is not there.

For instance, if you are in Port Harcourt, the only person you can talk to is Agip, if you are in Ikot-Abasi the only person you can talk to is ExxonMobil, and if you are in Lagos, you can only

which is a phased pricing system where we try to move our price step by step in a structured manner to get to a point where we can now let go and let it be fully liberalised.

Another point is that we put in place a commercial structure for the gas agreement, because in the past where it was done at the whim of the supplier and buyer, that cannot support the kind of agenda we want.

We need to have binding commercial bankable agreements. That was one way we intervened. And, of course, we need to redefined our gas infrastructure and development. That is phase one of our intervention.

Our plan was that by stage two, we would have reached full commerciality and gas would have reached export parity pricing. We would have reached a point where from that 10 cents which didn’t make any sense, we would have gotten closer to the $2.30 which is roughly the price the export market is paying for gas. That way you are at export parity, and at that point in time you know now that the price makes sense, you can let it go and negotiations can start to take place. Also at this stage, our infrastructure should have progressed and legislation such as the Petroleum CONTINUES ON PAGE 18

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Gas Industrial Park

Capacity of Escravos-Lagos pipeline to hit 2bcf/d CONTINUED FROM PAGE 17 Industry Bill, PIB, would have been in place.

Another point is that we said we would have attained full liquidity, because by step three our plan is that we would have been able to connect the entire gas network together; we would have moved the price to the appropriate level, we would have put gas agreements in place, and we would have had a very diversified sort of uptake, including power, industries and all. At that point in time, we feel that the market is robust and then we are now ready for step four, which is a fully liberalised market – that the journey towards getting the engine in place.

Resistance to DSO: It is pertinent to note that while we may be getting resistance over certain parts

of this process, particularly the Domestic Supply Obligation, DSO, we feel we are doing the right thing for our country. When we introduced the gas domestic obligation, it was not an unusual thing. Some people (mostly multinational oil and gas companies) will like to tell you it is imposed, but I assure you that everywhere in the world where gas is produced and sold, such obligations exists. Trinidad and Tobago, Western Australia, Argentina, Qatar, Egypt, and several other countries all have this mandatory dedication to supply the domestic gas market as a condition for access and operations. These countries have dedicated specific production of fields for domestic markets. In those countries, the operating companies are required to make tangible investments (15%, usually) in the domestic gas market

before exports can be made.

The key point here is that contrary to all the noise you hear, when we developed the Gas Masterplan, we went around the world to see what best practices obtain. So, there is nothing that we have done that is unusual in anyway.

Since this administration, we basically have been working aggressively on those three-point strategy and policy to create a robust engine that would take us to where we need to be. We focused essentially on domestic supply obligation, the gas infrastructure and the commercial framework.

There is no way you would expect the International Oil Companies, IOCs, to just agree to any measure that will impinge on their profitmaking, even narrowly. All those countries we mentioned had to intervene to enforce that measure. For them to

We focused essentially on domestic supply obligation, the gas infrastructure and the commercial framework

intervene meant there was no willingness on the part if the oil companies. It is the nature of the IOCs anywhere they operate.

That is why these countries has to impose it on them.

There is no where in the world that these IOCs come and voluntarily develop your domestic market.

Gas infrastructure In terms of what we have achieved so far on the above, let’s take the infrastructure first. When we started at the beginning of this

administration, we had only the Escravos-Lagos pipeline with the limited extension to Ajaokuta, with very limited domestic network in the East, no connection between the East and the West, and the capacity of that EscravosLagos pipeline itself was inadequate for the kind of growth there.

Our new blueprint recommends doubling the capacity of the EscravosLagos pipeline to increase the capacity to two billion cubic CONTINUES ON PAGE 29

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‘Gas Revolution train on track -Ige’ CONTINUED FROM PAGE 18 feet per day from one billion.

The effort on the EscravosLagos pipeline has got up to Warri, and from Warri to Oben, Oben to Geregu (190km), all have been completed and are working fully. From Oben to Lagos (PS1 to PS4), all the pipes are on ground and more than 90 percent has been welded. We have prioritised different stretches of the project for completion, such as the one that leads to Olorunsogo Power Plant, which would be completed in another four weeks. Essentially, by the end of this year, we would have completed the doubling of the capacity of the nation’s b i g g e s t p i p e l i n e infrastructure to two billion.

Remember I told you that there is no connection between the East and West.

That popular OB3 pipeline which crosses the River Niger linking the East to the West, we have brought in the pipes into the country, the engineering has been completed and, as we speak, the contractors have started moving the pipes into the right-of-way. So, for the first time, we are going to be connecting the East and West of Nigeria with gas pipelines.

On the other side, from Oso QYT Offshore, ExxonMobil to Oso QYT, the pipes are in the country, engineering completed, and coating of the pipes is being done. That is going to bring gas from ExxonMobil at Oso offshore to shore at Ikot-Abasi at QYT. From there we are now starting two pipeline projects coming to Obigbo, Umuahia, Enugu, Ajaokuta, Kaduna and linked to Kano. As we speak, we currently have a survey going on as to right-ofway and we are doing the Public Private Partnership, PPP, to develop that. We have also secured the Euro bond to jumpstart that project. As you can see, we have basically put in place framework that allows gas to be able to move from one end of the supply to the other end and backwards.

Its gives us the utmost flexibility, too. Presently, we have laid over 400 kilometres of gas pipelines across the country and more are being

Gas revolution industrial park under construction

laid everyday.

On the Domestic Supply Obligation, you can see that we have boosted gas supply from 500mmscf to about 1,000mmscf in the period of time in this administration, and we are still going on. As you can see, the supply of gas to the power sector has grown from less than 600mmscf to

Crude oil terminal

In terms of the strategic directions like gas-to-power, for instance, our aspiration is to be able to supply sufficient gas to the power sector to cover the requirements of PHCN, the NIPPs and even future demand almost 1,000mmscf per day.

People forget that it is not only the power sector that we supply, there is the industries such as cement industry, which has been growing relatively quickly.

In that period of time, we have doubled the supply from 180mmscf to 360mmscf.

In terms of the engine, we have done a lot to get to

where we are today. We have implemented the most aggressive infrastructure implementation in the last three or four years. We have moved significantly on pricing, and we are moving in a very orderly journey towards export parity in pricing beyond which we will now move to a fully liberalized pricing framework.

Pricing is the major element

in any commercial framework, and we have done that. We have also introduced bankable Gas Supply Agreements, GSAs. We spent a long time between the sectors developing agreements that can now be compelling. We have developed the network code for Gas Pipeline Access. These are all the things you need in order to have a robust commercial framework. Another thing we did was to create the Gas Aggregation Company of Nigeria, GACN, as part of the commercial framework.

The role of the GACN is to help us manage all of this transition in pricing, in volumes and so on.

In terms of the strategic directions like gas-topower, for instance, our aspiration is to be able to supply sufficient gas to the

power sector to cover the requirements of PHCN, the NIPPs and even future demand, and we have made good progress in that respect.

There are, however, some enormous challenges we are having in that direction such as the vandalisation of our gas pipelines. We have doubled our supply of gas to power in the last few years from less than 500mmscf to about 1000mmscf, and we would increase to about 2000mmscf within the next 18 months. The hope is that by the end of 2015, we would have completely met all our target for the power sector.

Gas Revolution (Gasbased industrialisation) Our strategy in gas is really to make gas work for the economy, stimulate jobs, stimulate local capacity.

Specifically for the gas-based industrialisation, we are targeting industries that will transform the economy. In any economy that is industrialised, there are a couple of things that they are centred on, mainly petrochemicals and steel production. Almost everything that is manufactured today is linked to petrochemicals. So, if you CONTINUES ON PAGE 30

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parity pricing for gas. So, the journey is ongoing and we are on track for that.

Fertiliser plants

East, west of Nigeria to be connected by pipeline CONTINUED FROM PAGE 29 have petrochemical capabilities at the worldscale, you are fine.

The other components for rapid industrialisation for any economy include steel, aluminium, methanol and fertiliser. These are all primary products that have a b i g , s e c o n d a r y industrialisation impact. All of these things coming together define the industrial capacity of any nation, and we believe that we can begin to cluster them. and you find out that in competing countries they have all managed to do that; they leveraged synergy. You can bring everything together you can have power supply, petrochemicals, fertiliser, methanol. Everything is organised and structured in this location. That is the first stage of government’s gas revolution.

For the last couple of months our contractors have been on site doing all the basic soil investigation, hydrology, geology and the like. So we have finished all of that now. We have now moved on to site preparation.

Julius Berger is on site and has started off with phase one. Our plan is to be able to push to a point whereby by third quarter of next year, phase one will have been sand-filled so that the first

investor, Nagarjuna, who by the way has signed the gas agreement as well as the EPC contract, can come in.

Also, it is expected that the power plant, the gas supply infrastructure, and the residential area will be available by 2017. They will be the first people on site.

And whilst they are on, then you start to have the other ones coming up. This is something that will never end; it is an industrial plan that will keep carrying on and on, even as we keep adding more land and the industries keep developing.

We are building a huge port to be located in the area (Ogidigben, Delta State), which is certainly not going to be developed in one day.

Over the next 18 months, we are going to dredge the river, work on the break water, and we are going to have a construction jetty, which will cover the phase one. That is all that needs to be available for the next four years. By the end of the fourth year, we are going to have a terminal that can allow us to export LPG (liquefied petroleum gas) and urea ammonia from the fertiliser company, among other products. Later on, we will have a full container port that will allow us export petrochemicals – that will be sometime around 2022 or so, because that is when the petrochemical

plant will be completed. But work is going to be going on in parallel and all.

One of the most important thing is the job creation that comes out of all of this. This is going to be perhaps the biggest single construction site in the country, and we expect that at the peak of construction we should have well over 100,000 people on site. For example, if you look at what we did with EGTL (Escravos-Gas-To-Liquid project), there were over 25,000 people working on the construction site. But what we are doing here in Ogidigben, Delta State (covering over 30sq kilometres) is over five times the size of the EGTL. And coupled with the fact that it is a marine location means a lot of logistics will definitely be involved. People and materials will be coming from all over the country and beyond, and we are talking a b o u t s t o r a g e , accommodation, hospitality, construction, security, engineering and so on. We believe that gas can only make a difference if it is able to generate big-bang impact which oil cannot do. We need things that can create hundreds of thousands of jobs, not things that create only a couple of thousand jobs.

Indeed, the issue of insecurity (militancy) in the

Niger Delta and pipeline vandalism across the country is a collective problem for everyone. What we have seen is that the people in the Niger Delta are collectively and completely in support of the project, including all the warring factions. Everybody wants the project in the region; all they want is a slice of the action. We believe that our role must be to create an enabling environment where people who have capacity on the ground are given a role to play, and that they are part of the success story.

Commercial framework Regarding pricing for gas, the Minister (of Petroleum Resources) has approved the gas pricing structure which we have been following gradually. For the power sector, we are to move from the 10 cents of many years and we are supposed to have reached $2. We are still at $1 but in the next three months or so we will get to the $1.50.

By the end of this year, we would have reached $2. For the none power, we are going to $3. We are already at $2, and this year we will move to $2.50 and by the end of the year or early next year we will move to $3. We will be roughly at the kind of place we intended to be, which will take us closer to the export

With fertiliser, our objective is to be able to produce enough fertiliser for domestic consumption and for export. Our strategy is that once we make the fertiliser here, we take it to the hinterland to enable agro-processing industries to grow, because we will increase agricultural yield and you will have no choice but to do agro-processing.

So, although this petrochemical plant is going to be located in the Delta, the impact is going to be felt across the entire country, through all the agricultural b e l t s , c r e a t i n g industrialisation and creating jobs.

Challenges The Nigerian people are not feeling the impact of all this growth in the gas sector because of the vandalisation that is occurring frequently.

This growth in gas that we have laboured to deliver oftentimes is not reaching the people because every day pipelines are being vandalised across the country, which is a frustration for us as well. If all this gas was reaching the market, people will be smiling. Only some months ago, people were happy with the level of power supply and many were saying that they would sell off their generators. To think that our supply has even grown beyond that point, yet power seems to down because of vandalism to our gas pipelines.

The second challenge is related to vandalisation, and that is community relations.

We are in the process of building the trust with the communities and this is an ongoing process.

The other issues is funding.

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Domestic gas price to hit $2.50 by year end

Escravos gas plant CONTINUED FROM PAGE 30 Remember this is not a government project, but government is jumpstarting it.

The private investors need to see that government’s skin is in the game before they come in with their money. And we have seen a lot of private interest in the project already. Its up to us to make sure that we overcome all the initial challenges to a mega project such as this.

There are other operational and logistical challenges due to the nature and geography of the area (it is an island), but they are not insurmountable.

We have done it in Bonny Island and other places and we are going to do it here. It is not a challenge the industry is not used to. The investors are lining up, everybody is doing their bit and they are moving on.

I must point out that this is the most aggressive investment in gas infrastructure that the country has ever seen. Every passing day, we are adding a new pipeline to gas. Whatever anyone says, if everyday we are adding new pipelines it will only be better for the country going forward. Regardless of the short term challenges we are facing, the fundamental is

that those pipelines are there: you cannot uproot them. So one day people will wake up and, wow, its there. But it has been in the working for years.

Non-passage of PIB The Gas Masterplan ultimately dove-tails into the PIB. However, even before the PIB one of the things government has done was to develop the Gas Masterplan, and in the last many years the government has remained consistent in implementing that policy. Everything we have been doing with regards to gas in the country bears from the Gas Masterplan.

Where appropriate, that policy has been introduced to the Petroleum Act through regulation, so the Domestic Supply Obligation is actually a regulation of the Petroleum Act. And the idea is to transition much of the spirit of this regulation into the PIB, on the gas section so there is continuity. But even if the PIB is not passed the Gas Masterplan policy and the regulations are there for us to carry on doing what we are doing.

Future of gas in Nigeria:

We are at the turning point as a nation for unprecedented growth. Up until now, the GDP has been growing at an impressive rate. You can now start to imagine what will happen when the projects we have done for power start to reach the people, the sudden growth in power generation and the impact it will have on the GDP. Then, the industrialisation through gasbased industries will create jobs that will absorb millions of people through dispersed growth and development. This will transform the country from one where you have a lot of unemployment to one where we are begging all our people abroad to come back and take up jobs here.

What we have never done as a nation is create the opportunity for multiple things to be happening, which is what we want to do now. So, the combination of raw materials and raw products, and power availability, means that Nigeria can become the next China in terms of economic growth. We have got the resources, we are hopefully aligning our strategies now, we have the market and the entrepreneurial human beings to make it happen. When all

Everything we have been doing with regards to gas in the country bears from the Gas Masterplan.

Where appropriate, that policy has been introduced to the Petroleum Act through regulation, so the Domestic Supply Obligation is actually a regulation of the Petroleum Act these things come together in the next three years or so, we will take off in a manner nobody has ever thought possible. And gas is going to be the quiet catalyst of that growth and economic expansion. This is something crude oil could never be able to do for the nation, but gas is going to touch people in even more direct fashion.

Crude oil benefits the nation in terms of foreign revenue that comes in, but the gas revolution is all about creating jobs, providing power and more. The source of

China’s economic growth is petrochemicals. The miracle in China is that anybody could just set up with a few thousand dollars, working on a byproduct of petrochemicals.

There are so many secondary, small-scale outfits which energise the small people and give them economic freedom.

That is the journey we are embarking on; it is not an easy journey, but we are clear about our vision, and we are following it step by step. We may be behind, but we are in the right direction and we would get there.

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A gas plant

Shell, others working to ensure Nigeria maintains place in gas market CHUKS ISIWU

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hareholders in the N i g e r i a n Liquefied Natural Gas, NLNG, v e n t u r e , including the multinational Shell, are working hard to ensure the country maintained its strategic position in the global LNG market, a top official of the leading exploration and producing firm has said.

Mr. Markus Droll, the vice president, Nigeria and Gabon Shell Upstream International, disclosed this as he spoke in Abuja on the efforts of the shareholders to drive the proposed $12 billion 7th train of the NLNG project.

Besides Shell, other shareholders in the Nigeria LNG venture are the

Nigerian National Petroleum Corporation, NNPC, with 49 per cent stake; Total LNG Nigeria Limited (15 per cent) and Eni International (10.4 per cent).

Shell Gas BV maintains 25.6 per cent interest in the project.

“We are embarking on a number of large gas projects so that we can keep the NLNG supplied with enough gas, and to make sure Nigeria can maintain its strategic position in the global LNG market.

“Together with the NNPC and the other shareholders in NLNG, we are investigating how we can further expand the NLNG supply and processing capacity. And I should mention that the NLNG is a world-class operation, recognised as such well

We have a very strong team working right now on how we can make the Assa North/Ohaji South project work. This aims to be one of the largest ever domestic gas projects in Nigeria

beyond the borders of Nigeria,” Droll said.

He added: “We have a very strong team working right now on how we can make the Assa North/Ohaji South project work. This aims to be one of the largest ever domestic gas projects in Nigeria.

"And of course, I don’t have

to remind everybody how important domestic gas, electricity and its multiplier effect is on keeping the Nigerian economy as a whole moving forward on its strong growth trajectory.”

The NLNG plant located on Bonny Island, Rivers State, currently has six trains in full operation.

Jointly, they churn out 22

million metric tonnes of LNG yearly, generating in the process, $12 billion annually.

It is expected that with the introduction of 7th train, which has been on hold for four years, the capacity of the NLNG would rise to 30 million metric tonnes per annum, increasing Nigeria’s supply of world LNG to 10 per cent, which would place the country among the leading nations in the LNG global business.

The Nigeria LNG Limited, official managers of the NLNG project, earlier this year announced delivery of its 3,000th cargo to the international market.

The cargo was delivered to Botas Petroleum Pipeline Corporation at Marmara LNG Terminal in Turkey aboard LNG Lokoja, one of the 23 vessels in NLNG’s fleet.

Since 1999 when the NLNG plant began operation, the project has converted over four trillion cubic feet of associated gas to LNG and natural gas liquids for both export and domestic uses.

In doing this, the company has positively impacted on the country’s gas flaring status, helping to improve the environment whilst converting a previously wasted resource into wealth for the nation.

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Nigeria hopes its gas can keep the lights on gas-fired plants.

"A huge amount of the power privatisation has been about creating a domestic industry for gas," said Fola Fagbule, an Africa-focused Nigeria investment banker.

"But there's still a lot of work to be done on infrastructure for transporting gas, which is a key limitation."

Alison-Madueke said Nigeria had begun building 1,860 km of planned pipeline gas infrastructure and designing a 850 million scf gas processing facility to support domestic supply.

Shell, Chevron, Eni and Total all produce natural gas for domestic or other West Africa customers.

Yet the orange flares lighting up the sky over the Niger Delta, burning off the precious resource, show that more could be captured.

Gas-fired Ihovbor power plant in Benin City

TIM COCKS

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he first power cut to hit the luxury hotel venue of the energy conference struck the Nigerian oil minister's speech on gas supply reforms with uncanny accuracy.

"The gas masterplan aims to develop infrastructure delivery for the domestic market ...," Diezani Alison-Madueke was saying - before a blackout took out the auditorium lights and speakers.

Muted laughter followed, then a lone heckle. "Well, this is why we need these major gas infrastructure improvements," her barely audible voice continued, just before the diesel generator kicked in and light returned.

Nigeria's desperate need for power could well be the catalyst that opens up its proven gas reserves of about 180 trillion standard cubic feet, scf, the world's ninth biggest, after Africa's biggest energy producer missed out on the last decade's liquefied natural gas, LNG, boom.

"Most people are still only here for the oil, yet Nigeria is sitting on a gas canister," said an oil industry executive. Industry sources put the real quantity at 500 trillion scf.

For 50 years Nigeria used its petroleum fields almost exclusively as a source of crude oil for export. "Gas was just this

poisonous thing associated with the oil," Abiye Membere, former head of exploration and production at the state-run Nigeria National Petroleum Corporation, NNPC, said, shortly before he was sacked by the Petroleum Minister.

That began to change a decade ago with the completion of one of the world's largest LNG terminals, fed largely by fields owned by leading operator Shell. Shell also has 25.6 percent stake in the plant.

Yet two other planned LNG projects - Brass LNG and OKLNG - have become mired in disputes over fiscal terms that have gone on for years, long enough for Nigeria to miss its opportunity to be a global LNG leader, analysts say, as Qatar and Australia stepped in with giant projects.

"Governments have muddied the waters by increasingly aggressive demands," said independent London-based energy consultant Claudio Steuer. If you add the cost of pipeline vandalism, "the operating environment does not look that great."

The U.S. shale boom, set to further depress gas prices, is making it look even less great.

HUNGER FOR GAS Nigeria may have a second chance - if it can unlock pent up demand for electricity that Africa's most populous country needs massive quantities of gas to produce.

Nigeria is the world's second biggest gas waster after Russia.

Governments have muddied the waters by increasingly aggressive demands," said independent London-based energy consultant Claudio Steuer. If you add the cost of pipeline vandalism, "the operating environment does not look that great.

At 4,000 megawatts, Nigeria's electricity output is a tenth of South Africa's for a population three times the size. It lasts some 4 hours a day in urban centres while many rural areas get

nothing.

President Goodluck Jonathan's government has privatised much of the decrepit state oil firm and a bidding process is underway for 10 new

The minister said flaring was down 20 percent in two years, giving no absolute figure. It was 30 billion cubic feet per month two years ago. Niger Delta activists were sceptical.

"We've mapped out the flare sites and we haven't seen a lot of them go off in the past two years," Inemo Samiama, head of the delta-based Stakeholder Democracy Network told Reuters.

LOW PRICE, POOR LAWS Pipelines are not the only hurdle. Regulated gas prices are a cheap $1.5 per cubic foot, and though Diezani and other officials pledged to bring them to export parity, no time frame was given. Even at that price, power producers often default on obligations.

EHGC Acquisition: Seven Energy consolidates position in gas market

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even Energy Limited, the local Nigerian arm of Seven Energy International Limited, SEIL, has consolidated its position in gas marketing and distribution in the country with its recent acquisition of the issued share capital of East Horizon Gas Company Limited, EHGC, for as much as US$250 million.

Seven Energy is a leading gas marketing and distribution company in the south eastern part of Nigeria while EHGC, a gas distribution and marketing company, operates the 128-kilometre East Horizon gas pipeline through Akwa Ibom State and Cross River State.

With the new deal, Seven Energy has expanded its gas pipeline network in that part of the Nigerian market to over 260 kilometres in addition to diversifying its customer base and increasing long-term contracted gas sales volumes to 200 million cubic feet per day, mmcfpd.

This is so as EHGC maintains a gas sales agreement with an industrial offtaker to supply up to 25 million cubic feet of gas per day (mmcfpd), increasing to 50 mmcfpd upon completion of the planned expansion of the offtaker’s existing plant, under a 20-year gas sales agreement expiring in 2032.

2014 2014 May, SweetcrudeReports

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the emerging African oil producers, the discovery by Afren Plc of the Ogo field in West Offshore Lagos in 2013 with reserves of about 750 million barrels of oil equivalent showed that the Niger Delta remains one of the most prospective areas in the world.

He revealed that about 49% of Nigeria’s licensed blocks (397) were still open and active, stressing that the availability of production allowances would also provide a welcome boost for small fields and profitability would increase in the proposed Petroleum Industry Bill, PIB, currently before the National Assembly.

“Nigeria’s quest to grow its reserves is promoted in the

Nigeria to grow gas consumption to 5.4bcf in 5 years

T

he Nigerian N a t i o n a l Petroleum Corporation, NNPC, says it has put structures in place to grow domestic gas consumption from 1.71 billion cubic feet to 5.4 billion cubic feet per day by 2019.

Group Managing Director of the Nigerian National Petroleum Corporation, NNPC, Mr. Andrew Yakubu, says the prevailing gas

infrastructure component of Nigeria's national gas master plan is designed to increase domestic gas consumption in three folds from 1.7 billion cubic feet per day to 5.4bcf per day by the targeted year.

Yakubu, who made the disclosure at a conference in Abuja, said the country’s reserves currently stood at 36 billion barrels of oil and about 182 trillion cubic feet of gas while production averaged 2.2 million barrels

funding. In the case of Nigerian Petroleum Development Company (NPDC), the onus is now on NPDC to arrange funding for the acquired equity,” the NNPC GMD pointed out.

He emphasised that all the strategies to ensure that Nigeria remained a leading producer of oil are hinged on the passage of the PIB which would remove the uncertainty surrounding the future fiscal framework in the oil and gas sector.

“The passage of the PIB will promote transparency, accountability and good governance and level playing field for players in the Nigerian oil industry. This will doubtless attract the much-needed investment in

Yakubu, who made the disclosure at a conference in Abuja, said the country’s reserves currently stood at 36 billion barrels of oil and about 182 trillion cubic feet of gas while production averaged 2.2 million barrels of oil per day in 2013. These figures translate to reserve-to-production ratio of 42 years for oil and 155 years for gas.

Natural gas pipeline

YEMIE ADEOYE

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of oil per day in 2013. These figures translate to reserveto-production ratio of 42 years for oil and 155 years for gas.

“In Africa, only Libya has more oil reserves than Nigeria and despite new discoveries in Sub-Saharan Africa, especially in Mozambique, Nigeria still has undiscovered gas potential of about 600 tcf,” Engr. Yakubu stated.

The NNPC helmsman maintained that even with

PIB through a robust acreage management system to be superintended by the Upstream Petroleum Inspectorate, involving the release of acreages that have been held without activity,” Engr. Yakubu said.

He informed that with the new shift in exploration, reserves and production decline from existing fields were driving the leading oil and gas companies to formulate new strategies and partnerships as he maintained that rationalisation of asset portfolio by international oil companies, IOCs, and divestment of some Nigerian onshore, have created opportunities for new players to partner with indigenous companies.

“For example, the Shell divested blocks, which were initially being funded from joint venture cash call is now being funded by new investors. This has freed the government from the burden of annual cash call

the Nigerian petroleum sector,” Yakubu said.

But, he added that Nigeria has faced unprecedented challenges with regards to losses in production occasioned by incessant vandalism of crude oil export pipelines and domestic crude oil and petroleum products pipelines.

In 2013, according to him, Nigeria suffered severe attacks on its critical export pipeline system leading to the loss and deferment of about 300,000 barrels of oil per day.

To tackle these challenges and ensure that the country maintained its leading position in oil production in Africa, he said several initiatives have been introduced. These include measures to address pipeline vandalism, improving small field economics, new acreage management systems, new exploration paradigm shift, attracting new capital investment and the launching of new licensing rounds.

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NLNG says it's biggest tax payer in Nigeria

Gas plant YEMIE ADEOYE

T

he Nigerian Liquefied Natural Gas Limited, NLNG, says it is the biggest tax payer in the country after declaring tax profile of N220 billion for 2013.

The company, which commenced operation of its multi-billion dollar LNG plant on Bonny Island, Rivers State, in 1999, has since then driven gas as an income earner for Nigeria.

NLNG managing director, Mr. Babs Omotowa, made the declaration as to the company's tax profile in Abuja, saying the NLNG has also commercialised over four trillion cubic feet of natural gas to lead Nigeria’s aspiration for flare reduction at oil production sites in the country.

Omotowa, who failed to provide details of the company’s financial remittances to the federation account citing requirements of declaring financial reports, said however that over 70 percent of the company’s total revenues flow into the federation account to provide funding support to government’s annual budget.

The NLNG also prides itself as having provided the "biggest single direct intervention in the education sector in Nigeria" with its recently announced N2 billion University Support Programme for development of engineering education in six federal universities.

According to the managing director, the company is to spend N340 million or two million dollars in each of the six universities on the construction of modern engineering laboratories and other equipment needed to drive cutting-edge advances in science and technology.

The beneficiary-institutions are the University of Nigeria, Nsukka, University of Ibadan, University of Ilorin, University of Port Harcourt, University of Maiduguri and Ahmadu Bello University, Zaria.

Omotowa said the University Support Programme, USP, naturally aligned with his company’s running intervention in promotion of advances in science and literature, adding that it followed observation that no Nigerian university ranked among the world’s first 500 or made it into the list of elite universities in peer African countries and that the NLNG adopted the universities following a compelling need to rescue the standard of education in the country.

Nigeria’s aspiration to become a developed nation, he said, could only be realised when the country’s education system is firmly fixed, adding that wellmeaning stakeholders in the country’s future must assist in salvaging the standard of education in the country.

“Well-meaning stakeholders need to urgently join hands to

turn around the poor quality of education in the country for the future of Nigeria to get better,” he said.

He added that NLNG’s corporate social responsibility portfolio spans education, healthcare, infrastructure, enterprise and capacity development across the country.

According to him, the company considered education a special focus area to complement the

various efforts of government to improve the quality of education.

In addition to the University USP, according to him, NLNG has provided equipment to the Rivers State University of Science and Technology and Braithwaite Teaching Hospital in Port Harcourt; and the establishment of the Bonny Vocational Centre to fill skill gaps in various industry

sectors in the country.

Mr. Omotowa said the vocational centre is already certified by the City and Guides of London to churn out worldclass technicians.

The company, he said, also runs a scholarship programme that covers secondary, tertiary and overseas post-graduate and maritime studies. He added that the company has also sustained a science quiz competition.

Obsolete gas cylinders out of system in 6 months - SON

T

he Standard organisation of Nigeria, SON, says obsolete cooking gas cylinders in use across the country would be removed from the system in the next six months under a new policy on cooking gas usage expected to come into effect in June.

The SON boss said the new act was such that it would hold companies responsible for challenges encountered by end users of the product.

Director General of SON, Dr. Joseph Odumodu, disclosed this to journalists in Lagos, hinting that under the new arrangement, individuals would no longer own cylinders. Instead, according to him, cylinders would be owned by companies licensed by the Department of Petroleum Resources, DPR.

“The unveiling of the act will determine its application by Nigerians. We have gone through the technical committee on the use on the best type of gas in the country.

“On April 8, the National Council of SON will approve the policy and it will be made public, ‘’ he said.

With the new policy, he also said, only the licensed dealers would be allowed to market and distribute the product while consumers would have the freedom in switching from one supplier to another without problems.

Odumodu was optimistic that the take off of the policy would help bring about the revival of gas cylinder firms that had shut down operations in the past, thereby creating more jobs in the country.

“It will also boost the consumption of the product as future fuel by Nigerians.

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2014 May, SweetcrudeReports

Govt'll make electricity market conducive for all -Minister

M

inister of Power, Prof. Chinedu Nebo has re-assured new and prospective investors in the power sector of government’s determination in making the emerging electricity market conducive for all players.

Akwa Ibom power plant

Mobil to contribute 575mw to national power grid

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ultinational oil company, ExxonMobil, is to build and operate a 575 megawatts, mw, power plant to be located at Eket in Akwa Ibom State.

Mobil Producing Nigeria Unlimited, MPN, the local Nigerian arm of the US multinational, was recently granted final approval to build and operate the plant by the Nigerian Electricity Regulatory Commission, NERC. According to NERC, the planned power plant was a timely boost to Nigeria’s power sector and with the issuance of licence to MPN to build the 575mw power station, the country’s on-grid power generation capacity will grow in line with projected capacity upgrade to 20,000mw by 2020.

In a statement signed by Head, Public Affairs Department at NERC, Dr. Usman Abba Arabi, the commission said the licence was issued by NERC after all stipulated requirements as regards license issuance were met by the oil company.

“The power sector has just

received a timely boost with the issuance of license to Mobil Producing Nigeria Unlimited to build a 575 megawatt power station in Eket, Akwa Ibom State of Nigeria.

“The license was issued by the Nigerian Electricity Regulatory Commission NERC after all stipulated requirements were met by the company,” the statement said.

The vice chairman, NERC, Muhammed Lawal Bello, spoke of the stride by the oil company in getting the approval, assuring that “NERC’s mandate is to ensure availability and reliability of electricity’’.

The Chairman/Managing Director, Mobil, Mr. Mark Ward, described the granting of approval to his company as a momentous one and thanked NERC for collaborating with his company.

According to NERC, the planned power plant was a timely boost to Nigeria’s power sector and with the issuance of licence to MPN to build the 575mw power station, the country’s on-grid power generation capacity will grow in line with projected capacity upgrade to 20,000mw by 2020 The other two oil companies, Shell and Agip, are already contributing 642mw and

480mw respectively to the national power grid.

Making the appeal in Abuja, Nebo also stressed that government’s target of 75 percent generation by 2020 will reverse the current low access to power, which is put at less than 40 percent with more than 25 million households without access.

The minister disclosed that the 10 National Integrated Power Project, NIPP, plants now up for privatisation will raise national power generation by 150 per cent.

He also disclosed that the power market is at the threshold of the declaration of Transition Electricity Market, TEM, by his office, which automatically kickstarts, contractual obligation of all market operators and participants.

World Bank pledges $1bn to Nigeria's power sector

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he World Bank’s Multilateral Investment Guarantee Agency, MIGA, has pledged to guarantee the Nigerian power sector to the tune of over $1 billion.

precisely identify with the governments and agencies where they would see the highest value from MIGA involvement, given the development priorities of the country”.

“The project provides a unique opportunity in the sense that there is ready fuel supply and connection to the grid,” Ward said.

MIGA's vice president and chief operating officer, Mr. Michel Wormser, disclosed this to journalists in Abuja, saying the move was aimed at raising the profile of Nigeria and making its power sector more attractive to international investors to put money on its power infrastructure.

According to him, MIGA has previously provided investment guarantees in the country totalling $364 million. “Nigeria is a country which has been growing very fast and has become the envy of many countries of the world in terms of the growth.

With this development, the number of major oil companies that are playing major roles in the electricity industry in Nigeria has grown to three.

He said: “Over the next couple of years, I would expect that MIGA would provide guarantees above $1 billion in Nigeria. This is primarily going to be in the energy sector and the discussions that we are going to have today is to

“But there is an understanding that jobs have to be created and competitiveness has to be assured and this can only happen if more investments occur in projects. In the past, we had provided guarantees of about $364 million in Nigeria.

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Power reforms to move Nigeria towards industrialisation -Nebo

Sapele power plant

OSCARLINE ONWUEMENYI

A

fter successfully handing over most parts of the power sector to private investors, the Federal Government says its focus has now shifted to ensuring that Nigerians feel the impact of the sector’s reform.

Minister of Power, Chinedu Nebo, who disclosed this, also said the aim of the reform programme in the power sector is to move the nation towards industrialisation, with the power sector as catalyst for economic growth.

"The major aim of the reform of the power sector is to move the c o u n t r y t o w a r d s industrialisation, create more jobs, result in higher GDP, increase household income and improve standard of living and improve youth development and social security.

signs of improvement have been acknowledged but are not yet evenly felt," the minister stated in Abuja.

Also speaking, Director General, Bureau for Public Enterprises, BPE, Benjamin Dikki, explained that government retained the ownership of the Transmission Company Nigeria, TCN, to reduce the cost of transmission charge on the electricity tariff.

Dikki however stressed that ultimately government would concession TCN when power generation has drastically improved.

Dikki noted that due to the huge investment required for the transmission sub-sector and the long payback period it does not make economic sense to privatise transmission.

He added that the transmission challenge is also compounded by the problem of right of way, pointing out that it is easier for government to acquire right of way transmission lines.

"The privatisation of the PHCN legacy assets is over and that of the NIPP assets is at an advance stage. The main task now is to ensure that the impact of the privatisation is felt in homes and businesses all across the country.

He noted that the wheeling tariff that would cover the transmission cost would raise the cost of electricity tariff and not be economical now.

"Clearly, we have moved aggressively to fully implement the roadmap on power. The early

“The World Bank is supporting and the African Development Bank is also financing, and a lot

The major aim of the reform of the power sector is to move the country towards industrialisation, create more jobs, result in higher GDP, increase household income and improve standard of living of these initiatives are being taken in order to provide the requisite financing to upgrade the standard of transmission facilities TCN has.

“The ultimate objective is that when we increased power supply, maybe 40,000mw, then it will make economic sense to grant a concession for TCN, to concession out TCN, knowing that the wheeling charge on the tariff will be able to sustain it and able to financing for reinvestment.

“In the short term TCN will remain in government hands but ultimately it will go into private hands," he added.

Non-delivery of 3 key projects may derail power target

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igeria's target of generating 6,000 megawatts, mw, of electricity by December this year might be derailed by noncompletion of three key projects under the National Integrated Power Projects, NIPP. Fears are that the development may slash 1,200mw off the targeted figure, thereby further worsening the the poor power supply situation across the country.

Chairman, Presidential Task Force on Power, PTFP, Mr. Beks Dagogo-Jack, recently held a meeting with Rockson Engineering Limited, the contractor handling the generation projects located in the eastern and south-south parts of the country.

The three projects are at Alaoji in Abia State, Omoku in Rivers State, and Gbaran in Bayelsa State.

"Unless these projects are inaugurated and put into commercial operations by the end of quarter three of this year, we shall suffer a serious shortfall in our power supply projections by as much as 1,200mw.

“This will significantly impact our set national on-grid supply target threshold of 6,000mw by December 2014,” Dagogo-Jack said as he emphasised the importance of the projects to government's overall power projections.

According to him, whereas the western axis of the national gas grid is currently bedevilled by acute gas constraints, there were some appreciable gas volumes on the eastern axis awaiting the completion of the projects in the area.

The Federal Government has, meanwhile, ruled out extension of deadline for another project which is behind scheduled. It said it would not be extending the delivery schedule for the 215mw Kaduna thermal power plant beyond the end of the year. #Vice President Namadi Sambo ruled out the possibility at a meeting he held with stakeholders in Abuja, according to a statement by his spokesman, Mr. Umar Sani.

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Bauchi's Yankari Power project to gulp $200m

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auchi State g o v e r n o r , Mallam Isah Yuguda, said s t a t e government's promoted Yankari Power project would gulp $200 million (N32,970 billion), including the cost of expanding the capacity of the plant to 120 megawatts, mw.

The state government recently received an embedded generation licence to establish the 35mw Yankari Power Company from the Nigeria Electricity Regulatory Commission, NERC.

"We believe that in the first three months from the day of the clearing of the site, we will deliver the 35mw; and given that, we have signed an MoU with Jos Electricity Distribution Company (JEDC). Once we have sufficient power, then we can sell the balance to other states and consumers,” Governor Yuguda stated.

He maintained that taking gas supply constraints being experienced in power generation into account, the company was designed to use gas, crude oil and low pour fuel oil, LPFO, as options.

A power plant

But, the government is already looking ahead to expanding the capacity of the project to produce 120mw of power.

The Yankari Power Company, which licence process was initiated in March 2012, is a gas-fired independent power plant, IPP, located in Gudun Industrial Layout, Bauchi.

“Given the agreement that were signed with those who will construct the plant, they have given us 18 months for the delivery of up to 120mw.

Given the agreement that were signed with those who will construct the plant, they have given us 18 months for the delivery of up to 120mw

According to him, the project would be funded from the $1.6 billion China EXIM Bank soft loan payable within 25 years; counterpart funding from the Federal Government’s Electricity Intervention Fund from the Bank of Industry, BOI, and equity contributions from the state government NERC chairman, Dr. Sam Amadi, at the ceremony to

present the licence in Abuja, expressed the commission’s satisfaction with the technical, commercial and environmental issues relating to the project after due process.

He noted that the project should be emulated and executed as a model by other state governments and stakeholders to improve access to power.

Govt working hard to ensure stable power supply, says Sambo V

ice President Namadi Sambo has assured that the Federal Government was working hard to ensure steady power supply across the country.

According to him, companies that emerged successful in the power privatisation exercise were viable companies, and for effective monitoring of postprivatisation activities, government has set up a monitoring and evaluation standing committee that would ensure compliance to the terms of the sales-purchase agreement.

The vice president, who spoke while receiving members of the

Senate Committee on privatisation led by their Chairman, Senator Olugbenga Obadara, admitted that there were challenges in the system, including that of gas supply for power generation.

But, he maintained that the issue of gas was not a component of the Ministry of Power but that of Petroleum Ministry.

Decrying the issue of subsidised gas prices, Vice President Sambo maintained that the multinational oil companies had not been

investing in local gas supply.

He, however, disclosed that the Nigerian National Petroleum Corporation, NNPC, and the multinationals had invested heavily in liquefied natural gas, LNG, through which the nation had been earning much-needed foreign exchange.

The international oil companies, IOCs, according to him, had argued that they could not invest in gas which is sold at less than one dollar per cubic feet because it is less than the cost of their

production. Sambo advocated for the development of a gas master plan which would be executed under a Public Private Partnership, PPP, arrangement due to its viability.

He stated that with the coming on stream of the 10 Niger-Delta Power Holding Company, NDPHC, thermal power plants, more gas would be required in millions of cubic feet.

The vice president informed that government was making efforts in power transmission,

distribution and mixed generation, assuring them all these would combine to give the nation steady power supply.

The vice president also discussed the NITEL and MTEL privatisation and the position of government as regards refineries.

Speaking earlier, chairman of the the Senate Committee expressed concerns over the ability of the new owners of the privatised power assets to deliver the results expected by government and the wider Nigerians.

Finance IKE AMOS

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h e International F i n a n c e Corporation, I F C , a subsidiary of the World Bank Group has stated that Nigeria needs over N11.2 trillion to achieve its target of 40,000 mega watts (40 giga watts) of electricity by the year 2020.

According to a document titled, ‘Nigeria’s Power Sector: Viability, Funding Sources and Liquidity,’ by Femi Akinrebiyo of the Infrastructure Department at the IFC, various segments of the Nigerian power sector will require significant investment while the country’s grid investment needs, specifically, have been estimated to be between US$2.6 (N416 billion) and US$5 billion (N800 billion).

According to him, the Transmission Company of Nigeria, TCN, is currently operating at a loss and has accumulated liabilities estimated at US$1.3 billion, in addition to the fact that its accounts have not been audited since 2005.

“Total support is estimated at US$3.4 billion to $3.7 billion, which is thought to correspond to capital expenditure upgrades needed to reach a grid capacity of 10GW (10,000mw),” he stated.

To achieve the 40,000mw target, Akinrebiyo said ongoing pipeline development will require two to three years, and once completed, an additional 2.15 billion standard cubic feet per day of gas is expected to become available.

He further stated that the aggressive loss reduction programmes together with tariff increases would shore up the sector finances, adding that the Nigerian Electricity Regulatory Commission, NERC's, willingness to review tariffs one year ahead of schedule is positive.

He said: “The TCN would probably need a higher wheeling charge and expected to receive the following support in the interim: US$1.65 billion (N264 billion) from the proceeds of the Nigerian Independent Power Plants, NIPP, sales; US$500 million (N80 billion) of China Exim

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Nigeria needs N11.2tr investment to achieve 40,000MW by 2020

Sanusi

Power plant bank funding; “US$700 million (N112 billion) to US$800 million (N128 billion) International Bank for Reconstruction and Development (IBRD) loan under consideration; US$ 170 million (N27.2 billion) from

donors potentially including Agence Francaise de Development, Islamic Development Bank and AfDB.” Akinrebiyo further stated that the Nigerian Bulk Electricity Trading Plc's

current level of capitalisation corresponds to an estimated nine months of coverage of power purchases assuming no payments from the Distribution Companies, DISCOs, are made whatsoever, noting,

Finally, Seplat launches $500m IPO in London, Lagos

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i g e r i a n independent, pushing for a market capitalisation of nearly $2 billion, has begun trading on the London and domestic bourses.

The company’s offer price in its initial public offering has come in

slightly towards the lower end of its indicative range at £2.10 or 576 Nigerian naira (both $3.51) each. The range given in late March was between £1.95 and £2.55, and between 535 and 700 naira.

Seplat is hoping to raise around £300.9 million from the flotation, which still

equates to its previous estimated target of around $500 million.

The base float is of approximately 143.28 million shares, representing 26.4% of the enlarged share capital, exclusive of any over allotments of up to 10.34 million shares that may be exercised. Over allotments

however, that NBET payment obligations will rapidly increase to approximately US$3 billion (N480 billion) per annum, as generating capacity reaches 10GW.

account for 15% of the offered amount of shares.

The number of shares being sold is at the upper end of the previous indicative range of between 118 million and 154 million.

The company will use proceeds to pay down debt and also chase new onshore and shallow-water offshore assets, either through acquisitions or farm-ins.

Some $48 million will be used to pay off a shareholder loan.

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Power station

Improper valuation, faulty plans marred PHCN assets sale —Owan IKE AMOS

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o r m e r chairman/chief executive o f f i c e r , N i g e r i a n Electricity Regulatory Commission, NERC, Mr. Ransome Owan, has flayed the recent sale of the defunct Power Holding Company of Nigeria, PHCN's, assets,

saying no proper valuation was conducted on the asset, and this was why the sale was based on faulty business turnaround plans.

“The distribution companies (Discos) had fixed and nonnegotiable sale prices, while the transaction was based on government asset valuation not a business valuation,” Owan said in a presentation to both potential local and international investors in the

power sector.

He called for a reexamination of the business turnaround plans tendered during the bid round based on facts uncovered.

According to him, there were no ‘financial bids,’ instead the winners were those that proposed to reduce technical and nontechnical losses by the greatest amount.

“The businesses are full of

problems, including the support systems from within and without. Does the consumer perceive any changes yet? The key challenge is how to turn the business around to profitability, including abundant regulatory, technical and non-technical issues,” he noted.

He identified the problems facing the sector to include meeting loss trajectories,

UBA reports N264.7bn gross earnings for 2013

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he United Bank for Africa, UBA, recorded gross earnings of N264.7 billion for the financial year ended December 31, 2013, according to figures in its audited result released recently by the Nigerian Stock Exchange, NSE. With this result, the company achieved a 20.3 per cent growth over the N220.1 billion recorded in 2012.

According to the bank, the growth in earnings was largely driven by growth of 40.4 per cent in loans and advances and the 25 per cent growth in its total deposits.

In the same vein, the bank’s loan-to-deposit ratio rose from 38.7 per cent to 44.3 per cent.

The bank’s profit before tax also rose by 7.8 per cent to N56.1 billion from the N52 billion posted in 2012.

The bank has proposed a dividend of 50k per share to its shareholders. The bank also

proposed a dividend of 50k to shareholders in 2013.

The bank attributed the growth to prudent cost management policies, enhanced efficiency and the impact of other productive initiatives.

Commenting on the result, Mr Phillips Oduoza, the bank’s Group Managing Director, described the gross earnings for 2013 as impressive “with positive contributions from all our businesses”.

Oduoza said the bank achieved the impressive result in spite of the challenging operating environment.

He said the result demonstrated “the strength and resilience of its people and dedication to implementing our growth plans in 2013.”

UBA is a pan-African Bank with operations in 19 African countries and in New York, London and Paris.

LTs, lack of power, unmet vesting contract supply or quotas, change integration and management, culture wars, fear by retained staff, insider financial manipulations, unknown consumers, poor payment culture and theft.

He predicted mass retrenchment in the power sector, saying that the privatisation exercise will bring about a workforce rebalancing between technical and non-technical staff.

He further stated that dependency on vesting contracts alone would lead to slow progress, noting therefore, that engaging in direct purchase of power from embedded generators at approved competitive rates would accelerate progress to 24 hours, seven days a week power supply.

He disclosed that poor maintenance of existing power systems, network problems, illegal electricity connections, overloaded transformers and over/ under billing and payment are factors that will hinder the growth of the power sector if not properly addressed.

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$1bn Eurobond will support power, gas sectors —VP Sambo According to Sambo, the proceeds will provide the much-needed funds in the areas of power generation, distribution and transmission, as well as in the gas, aviation and agriculture sectors

Sambo SAM IKEOTUONYE

V

ice President Namadi Sambo has informed that Nigeria's 'wellsubscribed' one billion dollars Eurobond issued last

year would be of immense benefit to the nation's power and oil and gas sectors, among others.

According to Sambo, the proceeds will provide the much-needed funds in the areas of power generation, distribution and transmission,

as well as in the gas, aviation and agriculture sectors.

Sambo spoke at the 15th Supervisory Board Meeting of the Debt Management Office, DMO, at the State House, Abuja, expressing optimism that the proceeds would impact positively on the growth of the nation's entire economy.

The vice president, who lauded DMO for effective

utilisation of the proceeds from the Eurobond, urged the agency to sustain the good work it was doing as a key institution in the g o v e r n m e n t ' s transformation agenda.

Director-General of the DMO, Dr. Abraham Nwankwo, had earlier briefed the meeting on the utilisation of the proceeds from the Eurobond, saying they were being disbursed to

targeted sectors of the economy as directed by government.

Nwankwo also narrated the efforts of the DMO in addressing institutional and capacity challenges facing dGhana e b t Stock m a nExchange agement departments in the 36 states of the federation and noted that in order to surmount the challenges, the DMO had organised workshops and special training programmes for top policy makers and debt managers on international best practices.

Nwankwo thanked the president and vice president for their commitment to the success of the activities of the DMO and assured that the office would continue to ensure effective management of the country’s debts.

The board, during the meeting, ratified the appointment of Messrs Sada Idris & Company as the external auditor for the DMO following the expiration of the tenure of its current external auditors.

Nigeria, others losing $60bn yearly to capital flight —Mbeki

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outh Africa's expresident, Thabo Mbeki, has revealed that African nations, including Nigeria, lose between $50 billion and $60 billion yearly through illicit financial flows, IFF. The News Agency of Nigeria, NAN, quoted Mbeki as stating this in Abuja while presenting progress report on the High-Level Panel on IFF at the 7th AU-ECA Conference of Ministers of Economy and Finance.

Mbeki is chairman of the panel set up by the Economic Commission for Africa, ECA, in 2012 to examine the nature of illicit funds in the continent.

He said: “In order to understand the impact of this phenomenon on Africa, we decided that we carry out a number of country case studies in Nigeria, the Democratic Republic of Congo, Kenya, Liberia, Mozambique, Algeria, Mauritius and South Africa”.

According to him, the huge sums did not include capital flight, saying it came from proceeds of commercial transactions through multinational companies, criminal activities and corruption.

The former South African leader lamented that monies which would have been used to provide infrastructure and

social amenities for poor African population were transferred to other countries leaving the continent in poverty. Mbeki said the situation was occasioned by the weakened tax regime of some countries in the continent, adding that proper mechanism needed to be put in place to check the trend.

“In terms of the phenomenon of mis-pricing, the estimates are between $50 billion and $60 billion which the continent loses as illicit financial flows, with capital flight not included.

“From our study, it is quite clear that the continent is losing huge volume of

capital which would have been used for investment and the process of industrialisation,” he said.

Mbeki said the study was conducted to enable the panel draw up a comprehensive report generally on the continent, as it was not possible for it to prepare a country-bycountry report.

He added that the panel’s findings showed the main beneficiaries of IFFs from African countries were developed countries and emerging economies, which were Africa’s major trading partners.

Mbeki

Labour

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Defunct PHCN workers

ELUONYE KONYEGWUAEHI

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orkers of the defunct P o w e r Holding Company of Nigeria, PHCN, who are becoming restive over their unpaid terminal benefits and other entitlements, have called on President Goodluck Jonathan to order a highpowered probe into the where about of the money meant for the payment of their entitlements.

Under the umbrella of the National Union of Electricity Employees, NUEE, the workers claimed government officials have deposited the money in some fixed accounts and have been waiting for the maturity before releasing the money for the payment of their entitlements.

Officials of the union, who spoke on condition of anonymity, argued that the finding of the technical committee set up by government and labour to go round the country and assess the level of payment following complaint by labour that most of the workers were yet to be paid despite claims by government officials, is a pointer that government officials are just economical with the truth.

According to the union officials, the report of the committee jointly set by the government and labour to monitor the level of payment confirmed that most of the workers have not been paid.

It would be recalled that sequel to the threat by NUEE

Defunct PHCN workers demand probe of unpaid entitlements to cripple the power sector over unpaid benefits to the former PHCN workers and victimisation of union leaders as against the agreement reached, among other breaches, the Minister of Labour and Productivity, Chief Emeka Wogu convened a meeting on January 13 between government and labour where a fresh agreement was reached.

The communiqué reached at the end of the meeting stated, among others, that “bonafide staff” to be paid their severance benefits on or before the end of January, 2014; admitted casuals to be paid on/before end of March, 2014, progressive payments to be tracked and all pension should be processed and payments should be effected accordingly. Furthermore,

the 7.5% employer pension contribution of July, 2012 to 31st October, 2013 will be paid by the Federal Government (market operator). Payment of pension deductions from 1st November, 2013 to date will be paid by the new operators into workers’ Retirement Saving Accounts, RSA. “Bureau of Public Enterprise, BPE, and

Labour declares trade dispute with Civil Service Commission ELUONYE KONYEGWUAEHI

T

he Association of Senior Civil Servants of Nigeria, ASCSN, has declared a trade dispute with the Federal Civil Service Commission, FCSC, over alleged increasing antilabour practices at the commission.

Reports have it that unfair and weird policies are being introduced in the civil service by managers to the detriment of public servants. The latest trend is that senior civil servants are being compelled to sit for promotion examinations in ungodly hours from 12 midnight.

Investigation revealed that often time, the civil servants are invited for promotion examination for 8:00 am which is eventually delayed till 12 midnight before the exam will eventually

commence.

Unconfirmed report claimed a female employee lost her life while trying to cross the high way at about 2:00 am after writing the promotion examination held last year in Abuja.

Disturbed by this dangerous trend, ASCSN has declared a trade dispute with the FCSC over the matter, arguing that the fixing of examination at awkward hours would no

Ministry of Power are to fast track approval and payment of death benefits to beneficiaries within one month. The complaint of victimisation of labour leaders to be handled by the Federal Ministry of Power and BPE in accordance with extant regulations within January, 2014.

longer be tolerated.

It contended that the exercise is full of risk to the lives of members, particularly in view of the current security situation in the country and noted t h a t p r o m o t i o n examinations and interview must be conducted under conducive atmosphere and time.

Secretary General of the body, Comrade Bashir Alade Lawal, who c o n f i r m e d t h e development, noted that the union had sought for an audience with the Head of Civil Service Commission, Deaconess Ayo Olafoyosi, over the current practice.

Labour

G

o v e r n o r Theodore Orji of Abia State, the traditional rulers under the South East Council of Traditional Rulers and the beneficiaries of Subsidy Reinvestment and Empowerment Programme, SURE-P, have recounted their gains from the scheme.

They spoke when the Minister of Labour and Productivity, Chief Emeka Wogu, undertook a sensitisation and appraisal tour of the Community Services, Women and Youths Employment, CSWYE, aspect of SURE-P, in the South East zone of the country.

They also commended the minister for ensuring that the impact of the programme was felt by the target beneficiaries, who are women, jobless youths, the less-priveledged and people with disability.

Chief Wogu had led his team to Umuahia, Abia State and other states in the South East zone on a sensitisation and appraisal tour of the projects under the programme.

They were received by Governor Orji, and also held meetings with the traditional rulers, the beneficiaries of SURE-P projects, especially the CSWYE aspect, which is domiciled in the Ministry of Labour.

The minister also commissioned the joint NDE and the Technical Vocational Education and Training Project, TVET, component of SURE-P skills acquisition centre in Aba, Abia State.

Wogu, who held an interactive session with the Ndi-Eze at the Ministry of Local Government and Chieftaincy Affairs auditorium, told them of the genesis of the SURE-P and the need for them to be part of the programme.

He said: "The Federal Government under the leadership of President Goodluck Jonathan, in the year 2012 initiated the SURE-P. The purpose of SURE-P is to invest the savings from the partial removal of oil subsidy on people-oriented and infrastructural development programmes and projects for improved quality of life towards attaining national economic prosperity.

"The CSWYE project was initiated in the Federal Ministry of Labour and Productivity. Since then, we have been implementing series of activities which have positively impacted on the people nationwide.

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Wogu, Gov. Orji, others recount gains of SURE-P South East benefits N1.945bn

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SURE-P says youths training to benefit construction, building industries

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he Subsidy R e Investment a n d Empowerme nt Programme, SURE-P, says 10,000 youths expected to be empowered under its client-based training in 2014 would benefit the building and construction industries across the country.

Mr. Peter Esele, the convener, SURE-P, Technical Vocational Education and Training, T-VET, who disclosed this, said there were two m a i n t r a i n i n g components of the SUREP: the client-based training and citizen based training.

“The client-based training is targeted at training beneficiaries for employment by Federal Government institutions.

“It is also for unskilled training of artisans in

Youth training specific sectors of the Nigerian economy, such as in building construction by agencies of the government mandated to conduct such training,” he said.

Esele said that SURE-P’s partnership with the National Institute of Building, NIOB, was in line with the client-based component, adding that it

would benefit building and construction industries across the country.

He noted that beneficiaries from the trade area would include masons, t i l l e r s , electricians, carpenters, pop and plumbers and that the s e c o n d component which was the citizen-based training, would be provided by evaluated and verified private and public training centres.

According to Esele, the training will take place simultaneously in the 36 States of the Federation and the FCT. “The beneficiaries would be trained in

agriculture, ICT, water transport and maritime, oil and gas, creative art, telecom and building construction," he said.

Esele said that T-VET was domiciled at the Ministry of Labour to ensure the sustainability of the programme, irrespective of the presence of SURE-P. “That is why T-VET is domiciled in the ministry of labour, so that whether SURE-P is there or not, the ministry will continue to work with NIOB to make sure that more Nigerian youths are employed.

“It would also ensure that more Nigerian youths are given the skills to be independent, stand on their feet, and be productive and contribute to the growth of Nigeria," he said.

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Stop 'inflammatory' comments on refineries, NUPENG tells Alison-Madueke Labour chides her over private jet saga

ELUONYE KONYEGWUAEHI

T

he Nigeria U n i o n o f Petroleum and N a t u r a l W o r k e r s , NUPENG, has advised officials of the Federal Government to stop making inflammatory statements about Nigeria’s four public refineries to avoid industrial unrest.

The union is taking exception to recent statement credited to the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, and officials of the Bureau of Public Enterprises, BPE, that the public refineries must be sold, describing the comments as “uncalled for, unnecessary and a mere diversion from the failure of the government to address the perennial problem of scarcity of petroleum products being experienced in the country” NUPENG threatened to shut down the sector should government make any attempt to go back on the agreement signed with the unions on January 7, 2014 in Abuja that the refineries would not be privatised.

In a statement by its president, Igwe Achese, the union urged President Goodluck Jonathan to call officials of the government to order before they throw the nation into unprecedented industrial unrest that the government might not be able to handle. NUPENG argued that billions of naira had been budgeted and purportedly spent on the Turn-Around-Maintenance, TAM, of the refineries with nothing to show for it, stressing that the refineries must be rehabilitated to work optimally which would account for at least seventy percent of domestic fuel production.

According to the statement, “we at NUPENG will resist any attempt by the Federal Government to go back on agreement signed with the unions on January 7, 2014 in Abuja that the nation’s refineries will not be privatised.

In a m e m o r a n d u m o f understanding, MOU, reached at that meeting, the

two trade unions in the oil and gas sector, NUPENG and Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, agreed with the Federal Government to engage in social dialogue to develop viable and workable business models for the refineries.

“We make bold to say that billions of naira had been budgeted and purportedly spent on the Turn-AroundMaintenance of the refineries with nothing to show for it. We state that the refineries must be rehabilitated to work optimally which will account for at least seventy percent of domestic production, instead of selling the nation’s strategic assets.

“We call on the Minister to concentrate more on how the Petroleum Industry Bill, PIB, should be passed so that the oil and gas market will be opened up to enable investors come in and establish more refineries and those already given licenses to come on stream.

NUPENG believes that the quick passage of the PIB will

Alison-Madueke

ensure transparency and accountability and boost investors confidence, rather than allowing the current massive importation of petroleum products, which a few cabal are benefiting from at the expense of the nation.

“We believe that the transparency agenda of Mr. President on job creation should be enhanced by allowing interested investors set up private refineries, like the Alhaji Aliko Dangote example in free trade zone in Ondo/Ogun States, which will generate about 85,000 jobs.

“We warn that the union will not guarantee industrial peace and harmony if the threat by the minister to privatise the refineries is carried out by the government, when it should spear-head the establishment of mini and mega refineries to complement what we already have and make sure the old ones are

We make bold to say that billions of naira had been budgeted and purportedly spent on the Turn-AroundMaintenance of the refineries with nothing to show for it.

We state that the refineries must be rehabilitated to work optimally which will account for at least seventy percent of domestic production, instead of selling the nation’s strategic assets

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rehabilitated.

NUPENG calls on the National Assembly to quickly pass the Petroleum Industry Bill and call the bluff of the multinationals who are trying to stall its passage for their selfish ends, so that the industry can be sanitised.”

It would be recalled that the Nigeria Labour Congress, NLC, through its president, Abdulwaheed Omar, has recently taken a swipe at the Minister of Petroleum Resources, saying: “NLC is alarmed at the reported level of waste by public office holders in Nigeria, particularly high profile public officers such as state governors, ministers and even their aides in the use of hired private jets”.

Referring to the allegation that the Minister of Petroleum, Mrs Diezani Alison-Madueke spent the sum of N3.120 billion in two years maintaining a private jet, he said it was a welcome development that the House of Representatives is probing it.

“This probe is timely as it is coming at a time that other public office holders, including state governors had also been alleged to have squandered as much as N130 million monthly to hire and maintain private jets,” Omar added.

He further stated: “In a country in urgent need of development infrastructure that are capable of lifting up our local industries, create real employment, deliver quality social services; it is not only sad that our public officers are shamelessly enmeshed in financial recklessness, it is equally condemnable that so much public funds are being expended on acquisition and hiring of private jets even to destinations conveniently plied by commercial airlines.

“It is abhoring that state governors, who have always complained of inability to pay the minimum wage to public servants in their states under the pretence of paucity of funds could embark on such wastage at the expense of the sweat and sacrifice of workers and to the detriment of the development of their states.

“The governors, in particular, have collectively made attempts to sponsor bills at the National Assembly to undermine workers interests, particularly on the minimum wage. Each time issues of wages come up, they are the first violators, insisting often times that their states lack the resources to accommodate increase in wages while their tastes and thirsts for high profile life styles go on unabated.

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Pensioners filing documents

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r u s t f u n d Pension Plc has established a mobile office in an effort to make information available to its customers real-time, and solve challenges associated with pension scheme.

Chairman of Trustfund Board of Directors, Mrs. Ngozi Olejeme, who unveiled the buses adapted as mobile offices in Abuja, said the desire to ensure Trustfund customers went through minimum difficulties in accessing their accounts influenced the decision to establish the mobile offices.

According to her, “We are going into mobile operations because we appreciate the desirability of our customers to have their enquiries attended to promptly. So, instead of our customers to start looking for where our offices are, they can just stroll to any of our mobile office buses where they can access their Retirement Saving Account (RSA) realtime.

Trustfund Pension sets up mobile office "The pension administration landscape is growing hence the increased competition that we have witnessed over the last few years and towards that end, Pension Fund Administrators (PFAs) have to be innovative on how to satisfy their customers. This also shows that we care about our customers and want them to reap full benefits of the scheme upon retirement. If contributors are able to sort out every grey area while they are still working, it is most unlikely they will have any serious issues with their account when they retire.”

On his part, a director in the company, Richard Uche, paid glowing tributes to Mrs. Olejeme and the Managing Director of Trustfund, Mrs. Helen Da-Souza, for their

cutting-edge ideas that have propelled the company as a leading PFA in the country.

“Since establishment about seven years ago, Trustfund has grown from strength to strength due to the untiring efforts of the chairman and managing director. These buses are mobile offices that will offer various products that Trustfund has and to ensure our customers reach us easily. We don’t want to sit in the office and expect our customers to come to us, but rather we have chosen to go to our customers because they are the reason we are in business,” he stated.

The independent director of the PFA, Mrs. Osaretin Demuren, who lauded the scheme, noted that the

initiative would help retain Trustfund as the leading PFA in the country.

The executive director, corporate services, Musa Nasir, said the focus of Trustfund since 2010 has been to reach out to customers with a view to satisfying them and resolving any issues they may have.

He said: “We then discovered that the best way of doing this efficiently is to reach them wherever they are. We also found that it is not ideal for our customers to go to our offices any time they have issues they want resolved.”

He explained that there are four sets of staff in the mobile offices that include a marketer, customer

relationship officer, benefit officer and a Nigeria Social Insurance Trust Fund, NSITF, officer who are there to resolve every issue that have to do with the old NSITF scheme.

According to him, the mobile offices are equipped to handle every issue that relates to the new scheme with competent officers manning them.

Musa hinted that the mobile office is still at pilot stage, saying there are two buses in Abuja while there is one in Lagos.

Trustfund plans to extend the services to Port Harcourt, Benin, Kano, Ibadan and Kaduna while extending the coverage in Lagos.

Solid Mineral

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Steel factory

OSCARLINE ONWUEMENYI

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he Federal Government has called for support from both local and foreign investors towards building and upgrading the requisite infrastructure to drive steel production as a fully integrated system to facilitate the creation of local jobs and skill acquisition.

The government's position was made known recently when stakeholders in the steel and industrial sector in Nigeria converged on Lagos for a forum to seek ways to develop the abundant steel and mineral resources in the country, in order to drive investment and economic development.

The event, which was hosted by the Ministry of Mines and Steel Development, and the Ministry of Industry, Trade and Investment, had the theme: “Transformation of Minerals, Iron and Steel Sub-Sector for Industrial Revolution in Nigeria.” A key objective of the forum was to present the sub-sector plan of the Nigeria Industrial Revolution Plan, NIRP, and the efforts of the Ministry of Mines and Steel D e v e l o p m e n t a t repositioning the minerals, iron and steel sub-sectors.

Speaking at the event, the Minister of Mines and Steel Development, Arc. Musa Mohammed Sada, noted that one of the cardinal objectives

Govt seeks support to develop steel infrastructure …Stakeholders demand Intervention Fund for sector of the regime of the government was to transform the steel sector so as to be able to enhance the rapid industrialisation of the nation, "as no nation can become great without the production of steel".

According to him: “It has been made abundantly clearly all over the world that

A key objective of the forum was to present the sub-sector plan of the Nigeria Industrial Revolution Plan, NIRP, and the efforts of the Ministry of Mines and Steel Development at repositioning the minerals, iron and steel sub-sectors

countries that do not take advantage of their steel and mineral resources to further their growth are always left b e h i n d b o t h i n industrialisation and economic growth. Countries like Japan, Russia, America and a host of others are great today because they have been able to achieve this feat.”

Sada extolled the key role of iron and steel in national development and his ministry’s efforts in

dovetailing it into the Nigeria Industrial Revolution Plan piloted by the Federal Ministry of Industry, Trade and Investment. He also provided an insight on how the ministry was transforming the solid minerals and metals sector into a strategic catalyst for domestic growth and to achieve a high level of global relevance.

He disclosed that the ministry was encouraging

backward integration in the sector with a view to increasing the present 2.5 million tonnes per annum local production of iron and steel to about 15 million tonnes as envisaged by the year 2020 through utilisation of local raw materials, adding that a lot was being done towards e s t a b l i s h i n g a n environmentally-friendly, effective and sustainable legal regulatory framework.

Bauchi govt orders closure of Chinese firm over illegal mining

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he Bauchi State government has accused three Chinese of engaging in illegal mining in the state, ordering an immediate closure of their company.

According to state governor, Mallam Isa Yuguda, the activities of the Chinese company have brought health hazards to communities in

Toro Local Government Area of the state.

Issuing the order during a sudden visit to the company, the governor accused the management of failure in complying with laid down mining requirements as set out by the Federal Ministry of Solid Minerals before embarking on mining activities.

“They did not compensate

the communities, neither did they make any attempt to relocate the communities before commencing their mining activities. The mining in the area has caused health hazards to both human beings and animals in the area,” he said.

2014 May, SweetcrudeReports

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2014 May, SweetcrudeReports

Solid Mineral

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fforts are on by the Federal Government to generate power from coal, according to President Goodluck Jonathan.

This is in line with his administration's transformation agenda, the president said at the annual international conference of the Nigerian Mining and Geosciences Society, NMGS, in Benin.

According to him, it is also part of the wider road map for the development of the solid minerals sector launched in 2012, leading to increased Foreign Direct Investments, FDI, inflow in the exploration and extraction of minerals, which include coal, gold, iron ore, among others.

The president also announced at the event the discovery of 44 new mineral deposits in 800 locations across the country.

“We are full of optimism that not only will more mineral types and new locations be discovered, the exploration and exploitation of these valuable endowment will lead to employment generation and increased contributions to the Gross Domestic Product (GDP),” he said.

Last year, President Jonathan had declared the intention of his administration to generate 30 per cent of electricity needed in the country from coal.

At a one-day workshop organised to attract the c o m m i t m e n t s o f stakeholders to the solid minerals sector, which also witnessed the signing of a m e m o r a n d u m o f understanding, MoU, on coal-to-power for the development of Ezinmo Coal

'Efforts on to generate power from coal’

Coal mining Block in Enugu State, the president said: “It is our intention that 30 per cent of our electricity generation should come from coal given the available environmentally friendly technology.

“Nigeria is endowed with abundant coal reserve of the required quality necessary for power generation and there is no reason why we should not

explore the sector".

The MoU is, specifically, on the utilisation of the mining licence granted by the Federal Government for the Ezinmo coal block, a large coal block which ranges from Enugu State to Benue State.

The licence was granted to an indigenous company with a Chinese partner, HTGPacific Energy Consortium,

for the exploitation and mining of the coal block.

But, beyond mining the coal block, the company is also expected to build a 1,000 megawatts power plant, to be cited in the same location with the mine, specifically, Nsukka, thereby saving the cost of transportation.

With the signing of the MOU, a Power Purchase

Coal: Groups advise govt against deal with Indian firm

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nvironmental pressure groups in the country under the auspices of the Environmental Rights Action/Friends of the Earth Nigeria, ERA/FoEN, have expressed opposition against Federal Government's deal with Jindal Power and Steel of India aimed at reinvigorating the nation's coal mining industry.

They are asking the government to restrain from signing the deal with the Indian company on the basis

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that the company was impacting the environment negatively in other parts of Africa with its operations.

Expressing worry that the government appears not to appreciate the magnitude of environmental challenges associated with coal, the groups said it was for this reason that the government should not go ahead with the deal.

According to them, Jindal was involved in a crisis with communities in Mozambique, where it currently maintains

operations, over environmental issues and for taking over community farms unduly.

“Not only is this planned engagement with Jindal disturbing, it clearly indicates that the Nigerian government is yet to get a grasp of the magnitude of environmental challenges that dirty energy ignites.

Our position is that government must stop hobnobbing with so-called investors only interested in promoting dangerous and

outdated extractive operations," ERA/FoEN said in a statement.

ERA/FoEN Executive Director, Godwin Ojo, further stated in the statement: “Will the Nigerian government feign ignorance of Jindal’s tango with communities in Tete province of Mozambique where the company is extracting coal from an open pit mine without an environmental impact study or ensuring the safety of the local communities? Did our government carry out background checks on this company before engaging in this clear misadventure?

Agreement, PPA, that would authorise them to build the coal-fired power plant was expected to follow while the company was to immediately commence exploration.

Nigeria is endowed with abundant coal reserve of the required quality necessary for power generation and there is no reason why we should not explore the sector

2014 May, SweetcrudeReports

Head Office Address (in Nigeria) No 36A Circular Road Elekahia Housing Estate,

Port Harcourt P. O. Box 7199 Port Harcourt, Rivers State.

T: +234 84 848037, +234 84 848036 F: (555) 523 - 4567

Website: wwhttp://ww.enviteltd.com Email: sales@enviteltd.com

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2014 May, SweetcrudeReports

Solid Mineral

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Mining site

South Africa to tap Nigeria's mining potentials Mineral leakages costing Zimbabwe billions of dollars

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imbabwe appears to be a long way from plugging mineral leakages that have cost the economy billions in potential revenue as it emerged the Reserve Bank of Zimbabwe’s wholly owned printing and gold buying subsidiary - Fidelity Printers - has not received gold seized by police for prosecution purposes.

Parliament’s Mines and Energy portfolio committee was stunned to learn Fidelity Printers has been unable to follow up on impounded gold as it has no power even after government declared it the sole buyer and exporter of the precious metal effective January 2014.

Gold that is seized by the police mostly at various ports is supposed to be

declared to Fidelity Printers, but this has not been happening, Fidelity Printers CEO Alen Marimbe said in response to the committee’s inquiry.

Committee members alleged police often stole the exhibits to line their pockets, replacing the valuable metal with cheaper minerals like brass.

“It is an issue we need to closely liaise with the police so that we have a mechanism that links what ZRP is doing and us expecting the gold to be brought to us,” Marimbe said. “What we need to do is to follow up on the gold.”

By the end of the session, the committee was considering inviting Police commissioner general Augustine Chihuri to give a brief on the whereabouts of all the impounded gold.

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f all goes well, South Africa's Industrial Development Corporation, IDC, would be investing in the Nigerian mining and forestry sectors.

Speaking during a courtesy visit to the acting Executive Secretary of Nigeria Investment Promotion Commission NIPC, Mallam Abubarka Hassan, IDC's Senior Business Development Manager, Africa Unit, .Mr Ashely Petersen, said Nigeria’s huge population and natural endowment placed it as a destination for sustainable investment.

“Nigeria is one of African’s huge markets and we are here to invest in mining and forestry. South Africa is also working hard to achieve the inter-Africa trade policy of the African Union (AU). “ The success of trade policy in the continent will promote stronger cohesion and better understanding among countries,’’ Petersen said.

The IDC, founded in 1940 with its headquarters in Sandton, South Africa, offers financial aid focusing

Nigeria is one of African’s huge markets and we are here to invest in mining and forestry. South Africa is also working hard to achieve the inter-Africa trade policy of the African Union

on economic growth and industrial development for start-ups.

Petersen explained that the company was stateowned, but was using private sector principles in its management.

According to him, IDC is also prepared to partner with local investors in the development of project plans, financing and executing of same provided the cost is not less than 10 million dollars.

“Out of this, we expect our would-be partners to have the capacity to pay 50 per cent of the project sum. We are happy to be here because

Nigeria has got a lot of potentials and we expect the NIPC to show us more opportunities,’’ he said.

Earlier, Hassan expressed delight on the visit of IDC team to the commission.

According to him, t h e commission serves as navigating radar to the country’s business opportunities.

The acting executive secretary, represented by Mr James Ebuetse, Director of National Competitiveness and Policy Advocacy, said the planned investment in mining and forestry by IDC would be laudable.

2014 May, SweetcrudeReports

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Freight

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'New criminal trends real threat to shipping industry’

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k’s leading maritime intelligence provider, D r y a d Maritime, has found that 'shock' incidents and evolving criminal trends are on the increase in the shipping industry and remain a very real threat to the sector.

Its recently released Q1 maritime crime figures show an overall downturn in incidents across the Horn of Africa, the Gulf of Guinea and Southeast Asia since the same period last year. But, the intelligence provider caution that ‘shock’ incidents and evolving criminal trends have combined to blight the overall decrease in maritime crime within the period.

According to Dryad, the overall statistics show a 13% reduction in crime, but ‘shock’ incidents such as the kidnap and ransom of seafarers off the Niger Delta still present real and credible threats; six seafarers are still believed to be in captivity in Nigeria.

Similarly, the hijack of MT Kerala from its Angolan anchorage with a subsequent theft of 13,000 tons of gasoil off the Niger Delta, has demonstrated the increasingly significant reach of Nigerian based criminals.

These shock incidents made international headlines but across the Gulf of Guinea the media have failed to report the spate of incidents that has seen crew kidnapped and then released.

“This analysis gives cause for concern and serves as a reminder to all seafarers to remain vigilant and employ appropriate risk reduction measures in all high risk areas. Maritime criminals, from those off Nigeria to Somali pirates and those that operate in the archipelago of Southeast Asia remain very much in business and are capable of inflicting misery on seafarers. The first line of defence is to be aware of their presence and take measures to ensure that their criminal activities are countered,” Ian Millen, Dryad Maritime’s Director of Intelligence, noted.

In the Horn of Africa, reported incidents appear to have risen from 9 in Q1 2013 to 15 in Q1 2014, but Dryad analysts attribute part of this data to a misinterpretation of

events such as the misidentification of regional fishermen in the Southern Red Sea and off the coast of Oman.

However, Dryad cautions against complacency, as a number of the reported incidents occurred are the result of Somali piracy.

“Somali pirates have not been totally eradicated.

Armed attacks against MT Nave Atropos, south of Salalah in January and the Kenyan

vessel, MV Andrea, close to the Somali coast in February have proved that broad containment of the threat does not mean it has been removed. On both occasions, the Somali attackers were only repelled by embarked armed security teams on the vessels concerned” adds Ian. Across the waters of Southeast Asia, again the data highlights a decrease in reported maritime crime,

with incidents dropping from 41 in Q1 2013 to 31 in Q1 2014. However, Dryad analysts note the incidents that have been logged possibly indicate a new modus operandi with criminals demonstrating a trend towards robbery from vessels underway in the Singapore Strait rather than at boarding those anchor.

“The Singapore Strait has attracted attention with a

number of vessels boarded for robbery in the first quarter of the year; a spate of attacks that has coincided with a reduction of incidents in the anchorages off Pulau Nipah, possibly signalling a change of modus operandi for criminal gangs who may have shifted attention to boarding vessels that are underway” continues Ian.

Pirates

The first line of defence is to be aware of their presence and take measures to ensure that their criminal activities are countered, Ian Millen, Dryad Maritime’s Director of Intelligence, noted

Govt committed to promoting investment in maritime sector — Minister

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inister of Transport, Senator Idris Umar, says the Federal Government was committed to promoting investment in the maritime sector through the provision of enabling environment for massive private sector investments.

Speaking at the Intermodal Africa 2014 Conference in Lagos, Senator Umar said the opportunity offered by the conference would serve as a platform for manufacturers, service providers, stakeholders and players in the maritime sector to grow their businesses.

“In Nigeria, the promotion of inter-modalism envisages among others, the connection of all state capitals, seaports, airports and river ports with railway lines to complement the existing road infrastructure.

“There is huge potential for investment in the emerging African market and proven higher rates of returns on investments with Nigeria as the highest investment destination,” the minister said.

He maintained that the conference and exhibition, which is in Nigeria for the

first time, was the reflection of the Federal Government’s efforts and determination to showcase programmes u n d e r t h e transformation agenda.

In his remarks, M a l a m H a b i b Abdullahi, the Managing Director of the Nigerian Ports Authority, NPA, urged local investors to take advantage of the forum to network toward strengthening their capacities.

2014 May, SweetcrudeReports

Freight TOJU VINCENT

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anks in Nigeria are lamenting the near-crisis situation at the n a t i o n ' s seaports following failure by the Nigerian Customs Service, NCS, to promptly deliver processed PreArrival Assessment Report, PAAR, back to banks for onward transmission to importers.

This failure has led to huge backlog of cargo clearance documents, causing high number of uncleared cargoes at the ports.

At a recent meeting organised by the management of the Customs, which was also attended by officials of the Central Bank of Nigeria, CBN, Managing Director of Web Fontaine, Mr. Muktar Ahmed, urged the banks to avail themselves of the training under the new PAARenhanced system with a view to getting out of the current crisis rocking the port industry.

Tagged "CBN-NCS sensitisation meeting, launching of the enhanced P A A R s y s t e m " , representatives of banks at the meeting held at the Civic Centre in Lagos, expressed apprehension over the unpleasant situation.

According to them, the newly-introduced PAAR has put the banks under pressure, forcing them to resort to engagement of additional hands in order to meet the challenges arising from the new development.

One of the bankers, Moses Omotayo of Wema Bank, expressed worry over the advertisement in newspapers and television by the Nigerian Customs,

Mr. Ony Egboma, Deputy Comptroller of Customs in charge of PAAR real time in Abuja, blamed the logjam on the refusal of importers to comply with the new import policy, assuring that Customs would clear the backlog of uncleared cargoes within a month

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Banks under pressure over high volume of uncleared cargoes

Cargo containers claiming that cargoes could be delivered in 48 hours.

He claimed this was misleading as documents required for the release of cargoes are sometimes held up for as long as two to four months.

Still expressing worry over the new development, Michael Onwujika of Citi Bank disclosed that at the point of holding the meeting, he had over 2,000 PAAR documents belonging to various importers, yet to be delivered by the Customs.

Taiwo Egbeyemi of Access, Ogazi Achiko of Diamond Bank, Dickson Simeon (United Bank for Africa), Sherif Adeoyo (Guarantee Trust Bank) and Steve Obasi (Fidelity Bank) also spoke about the development, expressing fears about the process.

They also held that training for the enhanced PAAR system should have been done much earlier as that would have ensured that the current crisis did not arise.

But, Mr. Ony Egboma, Deputy Comptroller of Customs in charge of PAAR real time in Abuja, blamed the logjam on the refusal of importers to comply with the new import policy, assuring that Customs would clear the backlog of uncleared cargoes within a month.

At yet another meeting organised by the Nigerian

Customs Service and the CBN in Lagos to also intimate stakeholders on the enhanced system of the Pre-Arrival Assessment Report, the banks called for an outright ban of the hard copy of ship manifest on the ground that “the nonelectronic copy contributes to the delay of cargo

clearance process and sometimes sharp practices”.

Despite information by the deputy comptroller of Customs in charge of PAAR real time in Abuja, Mr. Ony Egboma, to the effect that issuance of hard copy of ship manifest had long been banned, bankers maintained that about 20 percent of

importers still submit hard copy of ship manifest as against the electronic copy which is meant to ease the cargo clearance process.

According to them, the practice whereby local shipping companies issue manual ship manifest in Nigeria was against the rule regulating shipping.

Orlean Investment supports growth of oil sector logistics

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t is widely accepted that for Nigeria to reach it’s full oil and gas potential, key logistical support and infrastructure must be in place and fully functional. For a quarter of a century one company has not only been helping to make this happen but has ensured that the future development of the sector has a solid base from which it can grow and prosper.

Orlean Invest started operating in 1988 and celebrated its Silver Jubilee in October 2013.

Orlean Invest is Nigeria’s largest Free Zone Oil and Gas logistics provider; they have proved that the partnership of Public and Private Entities can work effectively in Nigeria.

They do this by providing

vital infrastructure and logistical support in a safe working environment. The company has expanded from a small facility under lease in Onne Port in 1988 to turn itself into a one-stop-shop logistic support provider for today’s oil and gas industry in Nigeria, while it also partners with government agencies, clients and host communities.

Following the enactment of Oil and Gas Free Trade Zone Decree 8 in 1996, they developed the existing port infrastructure at Onne into one of the world’s biggest free trade zones. The Onne Oil and Gas Free Zone is now widely regarded as the fastest growing and largest oil and gas dedicated free zones in the world.

“The difference between Onne Free Zone and other

free zones is not just the size but the fact they continually invest in infrastructure to ensure world class service delivery”, says Simone Volpi, Orlean Invest’s Managing Director, adding ‘it is successful because it is an integrated free zone dedicated to the oil and gas industry. Safety, Security and World class infrastructure are among its key attributes and we have 170 companies working efficiently in the Onne Free Zone”.

Not only is the company successful at providing the key logistics the sector needs to thrive, but it is also a prime example of how to work with a local workforce and resident communities.

The company is 100% Nigerian owned and up to 95% of its employees are Nigerians.

2014 May, SweetcrudeReports

Freight TOJU VINCENT

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f the current crisis rocking the ports as it concerns cargoclearance is not urgently attended to, massive port congestion is imminent, the National Council of Managing Director of Licensed Customs Agents, NCMDLCA, has warned.

President of the group, Mr. Lucky Eyis Amiwero, in a letter to President Goodluck Jonathan, said the refusal of the Federal Government to intervene in the crisis caused by the new cargo clearance policy known as PreAssessment Arrival Report, PAAR, has negatively affected all sub-sectors of the industry.

According to him, PAAR is supposed to be issued before the arrival of the goods, as against weeks and months after the arrival of goods.

The letter read in parts: “We hereby bring to the attention of the Federal government of

Massive ports congestion imminent, say freight forwarders Nigeria the challenges associated with the issuance of the Pre-Assessment Arrival Report by the Nigeria Customs Service.

“The attention of government became necessary due to the negative impact the procedure has generated in the clearance process since its inception.

“We felt deeply concerned especially as professionals and Trade procedure expert that has been involved in the setting up Trade Facilitation measures in the economy through our professional involvement over the years as member of the following committees: “The Pre-Arrival

Assessment Report is supposed to be issued before the arrival of the goods, as against the weeks and months that it was issued after the arrival of the goods at the port, which negates the objective of the establishment of PreArrival Assessment Report regime and drastically slow down theactivities of clearance that necessitates the build ups and tension at the ports.

“The process of the issuance of Pre-Arrival Assessment Report is associated with delays that resulted to the payment of huge demurrage to Shipping Companies and rent to

The attention of government became necessary due to the negative impact the procedure has generated in the clearance process since its inception

Terminal Operators by the importers/Agents; it negates the concept of Pre-Arrival Assessment Report as it takes months, weeks as reflected in the schedules attached.

“The economic impact is high cost of clearance and delays, which will eventually lead to possible closure of most factories due to inability to access the available stocks from the Ports.

“Most goods that are in the port has no Pre-Arrival Assessment Report to clear them, a development that has led to huge demurrage and rent being accumulated and no respite in sight from government making importers look for alternative through diversion of cargoes to neighbouring West African ports to reduce delay and cost, which is detrimental to the economy”.

Customs generates N43.74bn in Lagos, Abuja

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in Can Island Command of the Nigeria Customs Service, NCS, collected N43.23 billion revenue in January and February, this year, according to the Customs Area Controller, Comptroller Jibrin Zakari.

In Abuja, the Federal Capital Territory, FCT, Area Command said it generated N513.8 million revenue in the first quarter of 2014.

Zakari, who revealed that the Tin Can Island command was given a target of N264 billion for the year, which translates to N22 billion monthly, said a total N20.55 billion was realised in January and N21.35 billion in February.

A statement by the command revealed that in January, N12.46 billion accrued to the federation account through import duty and fees, and that N3.11 billion went into the nonfederation account, including 7 per cent levy, one per cent from NAC, 1 per cent CSS, ETL, sugar,rice, wheat flour, wheat grain, iron, cigarette and cement.

In FebruaryN13,299billion was raked into Federation Account made up of import duty and fees, also N3,337billion was raked into the Non Federation Account which included 7 per cent levy,NAC,1 per cent, CISS, ETL, sugar, rice, brown rice, wheat flour, wheat grain, iron, cigarette and cement.

According to Jibril, the upsurge in revenue during the period was due to efficiency of men and officers of the command in the discharge of their duties.

The Abuja command, on its part, stated in a document that the sum of N126.3 million was generated as revenue in January, while N169.2million was collected in February and N218.3 million in March.

Congested containers at the port

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2014 May, SweetcrudeReports

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Motoring

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he average new car in the United States commanded a price of about $32,000 last month — a jump of nearly 4 percent from a year earlier, according to market trackers at TrueCar. More than ever, a new car or truck has become a luxury purchase; these days, even the cheapest new cars — say a Nissan Versa Note, Chevy Spark or Mitsubishi Mirage — start around $13,000.

That’s been a boom to the used-car market, where used car prices have risen as well; the median second-hand vehicle now sells for about $16,000. But what if you’re someone who needs a vehicle and has $10,000 or less to spend?

For those of us not lucky enough to stumble onto a cream-puff $100 SUV, the analysts at Iseecars.com decided to answer that question by analysing some 30 million used-car listings to determine which models were the most likely to have a window price of $10,000 or

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2014 May, SweetcrudeReports

Top 12 used vehicles most likely to sell for less than $10,000 only the compact Focus, Civic and Elantra breaking the top 12.

So what gives? For starters, all of these models are wellworn, with an average of more than 100,000 miles on the odometer. Nine of the 12 come from either Ford or Chrysler, with only three imported vehicles (although many of those Civics were made in the United States.)

What I see here isn’t so much a trend as a history lesson of a decde ago; most of these models were the favorite cars of rental fleets and other business buyers, who tend to pay bottom-dollar new and sell cheaply. The flip side of being a fleet favorite is that it was traditionally how Detroit kept

less fuel-efficient models like the old Explorer and older versions of the Ram pickup have only grown less appealing. And some of these models would put a gleam in your mechanic’s eye for their questionable durability, especially beyond six-digit mileage.

The exception to all of this is the Civic, where the law of averages finally starts to kick in. It’s possible with enough searching to find just the right used car under $10,000 — but if you’re willing to consider those models that weren’t all that popular to begin with, the menu’s a whole lot bigger.

Ford Taurus

Ford Expedition

Volkswagen Passat

Jeep Liberty

Ford Explorer

Dodge Grand-Caravan

Jeep Grand Cherokee

Chrysler Town and Country less. The results were not what you might expect: This isn’t a list of sheer popularity; the Jeep Liberty has never been a huge seller, and the perennial national best-sellers (Ford F-Series, Toyota Camry, Honda Accord) were shut out. Nor is it solely about size or the price of the vehicle when it sold new; in fact, the list is dominated by larger and near-luxury vehicles, with

its factories running before the great recession of 2008-09; building far more vehicles than the market demanded, then moving the metal and worrying about losses later.

By the time the sixthgeneration Taurus went out of production in 2006, Ford was selling it solely to fleets.

That bloat depresses the prices of those models not just when new, but throughout their usable lifetimes, and in the years since the SUV boom,

Hyundai Elantra Ford Focus

Dodge Ram 1500 Pickup

Honda Civic

2014 May, SweetcrudeReports

Motoring

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he Boston Red Sox won the 2013 World Series after finishing last in their division in 2012, and the Chevrolet Impala has arguably made a similar “worst-to-first” move in the auto world this year.

“The new Impala is a really, really strong car that replaced a pretty badly outdated one,” says Joe Wiesenfelder of auto-buying site Cars.com , which recently included the sedan on a list of the industry’s Most Improved Cars of the Past 15 Years.

The editor says automakers often make only minor changes to a car from year to year, but sometimes vehicles undergo revolutionary transformations.

Wiesenfelder says that’s b e c a u s e s m a r t manufacturers know they’ve got to make redesigned vehicles really stand out from the crowd, as automakers only heavily revamp a given model every six years or so.

“They can’t just redesign a car and make it competitive with other models,” he says.

“They need to leapfrog it ahead of the competition.”

Still, standouts don’t account for all of the models on Cars.com’s rundown.

Wiesenfelder says that while he and other Cars.com experts called out some models from great redesigns, “some winners were just a case of the older car being terrible and the newer one being good.”

Read on to check out the five vehicles at the top of Cars.com’s rankings.

All price figures for used cars refer to Kelley Blue Book estimates for each vehicle’s various trim lines. Used-car prices also assume you’ll buy the vehicle from a dealer rather than from a private seller, and that the dealership will have “fully reconditioned” the auto before sale.

Price figures for new cars refer to manufacturer’s suggested retail pricing for a range of models from the base version to the top trim line, excluding any extra options.

Fifth-most-improved car: 2011 Hyundai Elantra sedan

Estimated price: $13,450 to $15,400 Wiesenfelder says this

compact sedan has long been a good choice for consumers, but that Hyundai made it even better when the South Korean automaker rolled out the current generation in the 2011 model year.

“The 2010 Elantra was a good affordable car, but the

General Motors can do when it makes the effort,” he says.

A base Impala comes standard with a 195horsepower four-cylinder engine and a six-speed automatic transmission rated at 21 mpg/city and 31

Wiesenfelder says the improved Cruze could hit showrooms later this year as a 2015 model.

Second-mostimproved car: 2011 Jeep Grand Cherokee Estimated price: $24,100

Five most-improved car models for 2014 2011 was definitely a standout,” he says. “It’s got a high-quality interior, good fuel efficiency and good crash-test results. And I personally think it’s one of the best-looking vehicles on the road.”

In fact, Wiesenfelder and his colleagues liked the 2011 Elantra so much that they named the car as that year’s best small sedan.

The Elantra comes standard with a 148-horsepower fourcylinder engine and a sixspeed manual transmission the team up to produce an impressive 28 mpg/city and 38 mpg/highway. Automatictransmission versions are also available.

Fourth-most-improved car: 2014 Chevrolet Impala

Estimated price: $26,860 to $35,905 Completely redesigned for the current model year, the 2014 Impala recently took first place in a combined C a r s . c o m / U S A Today/MotorWeek analysis of 2014’s best full-sized sedan under $38,000.

That’s pretty impressive given that the revamped model replaced a lackluster ninthgeneration Impala known mostly for its ubiquity in car-rental fleets.

Wiesenfeld er says the redesigned Impala — the only 2014 o n Cars.com’s rundown — combines a roomy interior with a quiet ride, impressive build quality and a “really good” multimedia system.

“It’s a great example of what

mpg/highway. GM also makes a hybrid Impala and a 305-horsepower V-6 edition.

Third-most-improved car: 2011 Chevrolet Cruze

to $15,650 Estimated price: $13,100 General Motors killed o f f t h e lackluster Chevy Cobalt after the 2010 model year and replaced it with the 2011 Cruze, a c o m p a c t sedan that

Wiesenfelder calls “possibly the first highly competitive small car ever from GM.” He says the 2011 Cruze offers “a high level of comfort, ride quality, quietness and interior design.”

A base Cruze comes with a 136-horsepower fourcylinder engine and manual transmission that produce 26 mpg/city and 36 mpg/highway. Automatic transmission is also available, as are turbocharged and diesel Cruzes.

And while the 2014 Cruze is similar to the 2011 edition, GM plans to unveil a major upgrade to the line in the next few weeks.

to $32,100 Wiesenfelder always viewed the 2010 G r a n d Cherokee as a pretty good sport utility vehicle, but says the model’s 2011 redesign really took the midsized SUV to a whole new level.

“The Grand Cherokee became a much, much more refined vehicle beginning in 2011,” he says. “The ride became better and the interior quality jumped a lot.”

He particularly likes a fourwheel independent suspension that Chrysler gave the Grand Cherokee beginning in 2011, not to mention an eight-speed automatic transmission that the automaker added more recently. “The Grand Cherokee just keeps getting better and better,” Wiesenfelder says.

The 2011 version comes standard with a 390horsepower V-6 engine, rearwheel drive and a five-speed automatic transmission that offers 16 mpg/city and 23 mpg/highway. Options

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include a 360-horsepower V8 engine and three different four-wheel-drive systems.

Most-improved car: 2013 Dodge Dart

Estimated price: $15,995 to $19,995 (if bought new) The legendary Dodge Dart returned to Chrysler’s lineup in 2013 for the first time in decades, but Wiesenfelder says it took the No. 1 spot in Cars.com’s rundown largely because the Dodge Caliber it replaced stank.

“The Dart is a competitive compact car, but the reason it’s on top of our list is partly because the Caliber was such a weak entry,” he says.

The editor says the Caliber tried — but failed — to offer consumers a good cross between a traditional sedan and a small SUV. “It wasn’t enough like an SUV to make it a success, but it wasn’t really a car, either,” Wiesenfelder says.

By contrast, he says the Dart — the first car Chrysler developed jointly with new parent Fiat — “is definitely worth looking at” if you’re car shopping, although it’s “perhaps not the mostcompetitive compact sedan on the market.”

The 2013 model, which you still might find available on dealers’ lots as a new car,

It’s got a highquality interior, good fuel efficiency and good crash-test results. And I personally think it’s one of the best-looking vehicles on the road

comes standard with a 160horsepower four-cylinder engine and a six-speed manual transmission that produce 25 mpg/city and 36 mpg/highway. Automatic t r a n s m i s s i o n , a turbocharged 160horsepower engine and a 184-horsepower Dart GT edition are also available

2014 May, SweetcrudeReports

Motoring

5 Worst cars ever

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heStreet.com took the 5 worst cars from a list of the 100 worst cars ever that was developed by Edmunds.com. About two dozen Edmunds.com staffers spent a couple of months refining their list of the 100 worst cars ever. They started with individual lists of bad cars, compiled them and put the cars in order, accompanied by lots of discussions, e-mails and meetings.

5. 1971 Chevrolet Vega:

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or me, Vega will always be the worst car ever.

In the late 1970s, I was living in Toledo, Ohio, and working as a reporter for The Toledo Blade. One day, I was preparing to drive a friend’s Vega. I sat down in the driver’s seat and put my foot on the floor in front of me, about to step on the gas. And guess what happened?

It’s not a tough question if you were ever in a Vega. My foot went right through the rusty floor. This, as it turned out, was not an uncommon event.

“My first car was a Vega,” Huffman said. “It was a 1974 Vega, and when I got it, it was only three years old. I lived in Southern California, where nothing gets rusty.

But that car was rusting.”

Huffman told me I sat down in one of the good Vegas, because “the floor gave out before the car did.” He called Vega “the most disastrously built car in history.”

4. 1987 Yugo:

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he Serbian-made Yugo shows up frequently on w o r s t - c a r l i s t s .

Edmunds.com ranks the 1987 Yugo as the fourthworst car ever made, but Oldham said it was a contender for No. 1.

“The Yugo was terrible in every way — terrible quality, terrible performance, and it fell apart around you as it

In defense of the Vega, the 1970s were a tough time for U.S. automakers. Rising gas prices created demand for smaller cars. The automakers struggled with intensified emissions regulation. The balance of power had shifted to the UAW. Imports were establishing a toehold in the U.S. Ford’s Pinto will forever be joined with the Vega as a symbol of the inability to adjust. Many people wrote in after our first story to say that the Pinto should have been among the top 10 worst cars.

But Huffman said, “The Pinto sold extremely well and proved to be a very reliable car, unless you got hit from behind.”

went down the road,” he said.

T h e 1 9 8 7 Y u g o was a Serbianm a d e version of the Fiat 127, under license f r o m Fiat.

For a time, it was sold in the U.S., with 141,511 sold here between 1985 and 1991 — “a Serbian-made version of the Fiat 127 that couldn’t possibly be as awful as its low price suggested,” Edmunds.com said. “But it was!”

Like the Trabant, the Yugo was built in a Communist society where responding to

3. 2014 Mitsubishi Mirage:

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ur original list had the 1955 BMW Isetta in third place, but Huffman said he has a better candidate.

T h e 2 0 1 4 Mitsubishi Mirage belongs in Isetta’s spot, he said. “It drives terribly, rides terribly and it’s noisy. My son is 11 and he hates it too, because it has too little legroom for an 11-yearold. Nobody likes it.”

The car, which is made in Thailand, has a tiny, 1.2-liter three-cylinder engine. That assures good fuel mileage, which

Mitsubishi quantifies at 44 miles per gallon, but it also means that the car is not powerful.

In a January review of the 2 0 1 4 M i r a g e f o r autoblog.com, Steven Ewing reached a conclusion similar

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to Huffman’s. “If there’s one thing Mitsubishi could use here in the States, it’s good, fresh product to bring people back into its showrooms,” Ewing wrote.

“The Mirage’s attractive price point will likely g e t t h e attention of the budget-minded set, but it’s still not the best deal you can get. And while the Mirage did briefly hold the title of being America’s most fuel-efficient non-hybrid, the 1.0-liter Ford Fiesta now bests it.

“It’s a shame the Mirage is such a dud,” Ewing said.

2. 1974 Ford Mustang:

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he Mustang is an iconic car with a rich past, but Ford stumbled in 1974 and created one worthy of being called the second-worst car in history. Certainly in retrospect, the concept of a Pinto-based Mustang does not make a lot of sense.

The car “was a betrayal of everything Mustang was supposed to be,” Huffman said.

Surprisingly, the car sold well. “It was a Pinto that looked stylish” at a time of concern about rising fuel prices. “The market loved it and the Mustang lovers hated it.”

Fortunately, Mustang has since returned to its roots.

c o n s u m e r demand was not considered to be important. Then it was exported to the U.S., where it had one source of appeal: It was cheap, not inappropriately.

After our list was first published, a reader wrote to say: “I was at the parts counter the other day and a guy asked the clerk, ‘Do you have a set of wiper blades for a Yugo?’

The guy thought about it for a minute and said, ‘Well, I guess that’s a fair trade.’”

1. Pontiac Aztek :

D

espite all of the disdain and the association with Walter White, the Aztek does have backers, who generally say the same thing: T was the first crossover.

“You can’t say the idea was a bad idea,” Huffman said. “When GM came up with the idea, Aztek was to have its own platform and

h a v e proportions that were exciting. To save money, they put it on t h e G M minivan platform. It had strange proportions a n d a s t r a n g e windshield a n d everything was awkward.

“If GM had done this right, they could have owned the crossover segment. They were first.

They were ahead of the game. But they put out a product so bad they blew their lead.”

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Technology

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natural gas or liquid hydrocarbons can extend hundreds of miles and comprise thousands of sensors, valves, pumps and controllers. In the United States, the national pipeline system is an extensive mode of transportation with unique infrastructure security characteristics and requirements. Virtually all the critical pipeline infrastructure is owned or operated by private entities.

There are: ?161,189 miles of hazardous liquid pipelines ?309,503 miles of natural gas transmission pipelines ?1.9 million miles of natural gas distribution pipelines According to the U.S. D e p a r t m e n t o f Transportation’s Office of Pipeline Safety (OPS), the majority of pipeline incidents are caused by “damage by outside force.” Property damages alone for more than 300,000 miles of transmission pipe can cost operators millions of dollars annually.

Limitations of existing technologies

Diagram of pipeline security

PIPELINE SECURITY: New technology for today’s demanding environment

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he protection of oil, gas and refined product p i p e l i n e s a g a i n s t sabotage, illegal tapping and terrorist action, combined with the detection of leaks and in-line equipment failure, is a high priority in all countries, but has been notoriously difficult to achieve.

Oil and gas installations are critical infrastructure of high importance and value.

If a pipeline is damaged, significant revenues will be lost, harm may be caused to the environment, and the leakage could be a potential danger to the local population. More importantly, a terrorist attack on an unprotected pipeline could have catastrophic consequences.

This article describes how the latest developments in pipeline monitoring and

security technology m e e t t h e challenges of today’s demanding environment. New sensing solutions provide greater visibility into the pipeline network and buy operators additional time before an event occurs, allowing for r e p a i r s , evacuations or a security response to reduce potential damage or losses.

DSM Ship

A Vulnerable Network of Strategic Assets It has never been more important to ensure the safety and reliability of production and distribution assets for the oil and gas industry. In a fragile economy, threats to pipeline infrastructure can have a significant effect on

both industries and communities, whether they are intentional disruptions or inadvertent damage caused by excavation equipment, land movement or pipeline leaks.

For pipeline operators, the three main types of thirdparty damage are theft, terrorism and construction

work. Pipeline tampering and pilferage are common problems in developing countries. Pipelines are also an easy “soft target” for terrorist organizations whose declared aim is to damage Western economic and political interests.

A typical transportation and distribution system for

Most petroleum producers recognize the importance of deploying an effective pipeline monitoring and surveillance solution, which includes a round-the-clock vigil on key operational parameters in the distribution network, as well as monitoring leakages, electronic surveillance and physical patrolling of the right-of-way.

In a continuing effort to remove the guesswork from pipeline operations and reduce costs, many techniques have been developed to address risks and maintenance needs in a strategic fashion. Common pipeline security measures include aerial surveillance, ground patrolling, installation of pipeline warning boards/markers, deployment of security personnel, and conducting awareness campaigns to educate habitants along the pipeline route. Advanced telecommunication systems and leak detection systems are also widely used to improve the monitoring and remote control of pipelines.

However, armed security guards cannot be everywhere at the same time. Closedcircuit television (CCTV) security cameras are effective for surveillance, but are less useful if not incorporated into a complete CONTINUES ON PAGE 68

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security system. Plus, their infrastructure costs are not economically viable. Radar is proven as a long-range water and surface-based solution, but again, is not economically viable due to the need for power and network connectivity.

Most conventional pipeline security systems rely upon point-sensing technologies to estimate locations of events.

Positioning these systems in the correct and most relevant locations can be a challenge.

They can also be affected by a single large and often harmless event blinding the system to specific activities that can affect the process.

Overall, the majority of existing detection technologies only provide notice that a damaging event has occurred, allowing an operator to put into place reactive countermeasures to stop the associated costs from escalating.

Latest Pipeline Monitoring Solution In recent years, innovative technologies for pipeline surveillance against thirdparty damage or intrusion have become increasingly available. With advances in miniaturized sensors, standardized data processing and reliable communications, oil and gas companies now have access to robust tools for the monitoring of extended and complex pipeline systems.

One of the most effective solutions for pipeline monitoring involves a technique known as Distributed Acoustic Sensing (DAS), which can convert a fiber optic cable into a listening device. A DAS system is designed to prevent pipeline damage from occurring in the first place by providing advance warning of the events leading up to an incident.

Attaching DAS equipment to one end of a standard fiber optic cable, such as those used for telecommunication, creates an acoustic array of virtual microphones every 10 meters along the fiber. Using sonar-processing techniques, the sounds received from the virtual microphones are analyzed and converted into a simple graphical display showing the operator what is happening along individual lengths of the fiber. For example, the sensor system can detect the difference between mechanical digging and a person walking.

It can also pick up the sound of leaks from gas pipelines.

DAS systems are comprised of two key elements: an

Distributed Acoustic Sensing (DAS)

PIPELINE SECURITY: New technology for today’s demanding environment The passive nature and inherent longterm reliability of fiber optics, together with the ability to string together thousands of individual sensing elements in individual optical fibers, make DAS a compelling technology for meeting demanding pipeline monitoring and security requirements optical interrogator unit and an acoustical processing unit. The interrogator unit sends a pulse of light down the fiber optic line with most of the light reaching the other end.

However, a small percentage of light returns to the source — this effect is called “backscatter.”

Sound or vibration near the fiber changes the backscattered light, and these changes are analyzed by the

interrogator unit to re-create the sound or vibration that caused them. The sounds are sent to the acoustical processing unit, which analyzes the sounds using sonar processing algorithms to create specific alarms for a given event or sequence of events.

The passive nature and inherent long-term reliability of fiber optics, together with the ability to string together thousands of individual sensing elements in individual optical fibers, make DAS a compelling technology for meeting demanding pipeline monitoring and security requirements.

The most advanced DASbased solutions are designed to perform acoustic sensing for pipeline condition monitoring and leak detection on the same strand of fiber, making them ideal for retrofit projects with existing cable installations.

These systems can also cover up to 60 miles of cable between power and network connections.

Better Accuracy, Fewer False Alarms As demonstrated at oil and gas pipeline facilities worldwide, DAS technology provides around-the-clock distributed acoustic monitoring over very long distances. Operators can monitor the entire length of

the fiber optic cable continuously and detect, classify and locate any number of simultaneous disturbances anywhere along the fiber with excellent resolution. Most importantly, the signal extracted from each section of fiber is unaffected by the vibration on any other section.

DAS-based pipeline monitoring employs a processing architecture for analyzing acoustic activity that draws upon decades of military sonar research.

This tells the operator what the threat is and eradicates false or nuisance alarms.

The system interrogation unit automatically learns the normal background level of vibration along each section of fiber and then sets appropriate amplitude thresholds for each location.

This enables the operator to locate any threat with a high degree of accuracy.

Detection ranges from the pipeline itself depend on the type of soil surrounding the fiber, but DAS can typically detect a person walking when they are 5-10 meters away from the buried fiber with manual digging 5-15 meters away. The technology can detect vehicles 5-15 meters away from the fiber and identify mechanical digging or other larger machinery at a distance of 20-50 meters.

Some systems even present real-time event data in a manner where classified alerts are shown on a map display with location coordinates. For longdistance applications, this capability is particularly beneficial for threat response and can be used to cue other security platforms such as CCTV or unmanned aerial vehicles (UAVs).

Integration of DAS technology with process automation systems, fire and gas safety equipment, plant security systems, and gas metering and regulation stations allows operators at different facilities to see alarms in parallel — in the same format — to provide additional time for evacuations or to avert a potentially life-threatening event.

Typical Industry Applications DAS technology can be costeffectively deployed on various types of pipeline systems to provide aroundthe-clock monitoring for threatening activity and abnormal operating incidents within the vicinity of the line and surrounding assets. Typical applications include:

Third-party interference With a DAS-based monitoring system, CONTINUES ON PAGE 70

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Distributed Acoustic Sensing (DAS)

New technology for today’s demanding environment CONTINUED FROM PAGE 68

operators have a reliable means of locating potentially hazardous movement within the pipeline corridor.

Human movement can be detected within a few feet of the sensing cable, and mechanical digging identified up to much longer distances. In many cases, this allows intrusion to be detected and alarmed before contact with the pipe is made.

Asset protection The DAS solution can utilize the fiber optic network around remote facilities to detect any unwanted intrusion and protect assets such as block valves and compressor stations. In addition, it can be integrated with existing security systems to activate cameras and personnel. This can be monitored at a central control center overseeing a number of diverse locations.

Event alarming A key feature of DAS is to provide alerts for real threats only. This technique not only picks out the acoustic fingerprint of an

The use of “smart zones” allows for flexible alert settings to protect different regions (i.e., varying terrains such as roads and rivers) at different times of the day event, but also monitors its activity over a short period of time to build up an exact picture of what the event is. In this way, nuisance alarms are effectively minimized.

The use of “smart zones”

allows for flexible alert settings to protect different regions (i.e., varying terrains such as roads and rivers) at different times of the day. For example, traffic on a road during the day may be no issue, but a vehicle arriving late at night, stopping, and unloading several people is quite different.

Leak detection DAS technology is able to detect the low frequencies associated with a gas pipeline burst. Where gas leaks cause a change in the temperature around the fiber, the technology can provide early warning and avoid dangerous and costly delays in detection. The possibility of combining this capability with the detection of leaks that cause an acoustic impact around the fiber enhances the security function.

Pig tracking and profiling DAS can follow the

progress of a pig throughout the pipe network by tracking the acoustic signature.

When a pig passes through a girth weld inline, the resulting pressure pulses propagate through the pipe, which can be picked up a considerable distance away.

This allows the use of cleaning pigs to gain valuable data that help in constructing a picture of the pipeline’s condition over time and will also identify the location of a stalled pig.

Equipment monitoring Various pieces of pipeline equipment (especially those with rotating parts such as pumps, valves or generators) produce strong acoustic fingerprints. DAS technology can detect changes in the underlying acoustic signature of equipment and machinery.

As such, it can be employed to monitor previously unmonitored assets at remote locations and produce an alert when

equipment fails. An example would be the failure on an air conditioning unit cooling essential electronics; the alarm will allow the operator to prevent heat damage to critical or high-value equipment.

Reporting and forensic analysis By recording all activity in the vicinity of a pipeline, before and after analysis of particular activities and events such as earthquakes can be undertaken to make sure the integrity of critical assets has not been compromised. This data also allows engineers to develop further in-depth analysis of activity if required.

Conclusion Challenges to the safety and security of pipeline systems are diverse and ever changing. This situation calls for a well-designed, reliable and intelligent pipeline monitoring system.

Advanced solutions such as DAS technology provide operators with detailed, realtime information about incidents or accidents on the line, thus significantly reducing response time in the event of a natural disaster, equipment failure, thirdparty interference or attack. *Adrian Fielding Honeywell Process Solutions

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Oil spills, impunity and govt weakness in Niger Delta Oil spill-polluted water OSCARLINE ONWUEMENYI, with agency reports

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ecent reports of oil spills in some states in the Niger Delta region have, once again, raised fresh question on the wanton destruction of the environment in the area, even as it has gone ahead to prove the Federal Government’s ineptness at dealing with the situation or, even worse, its culpability with multinational oil and gas companies due to its failure to extract reasonable redress for the calamities that have been meted out to the inhabitants of the lands.

Indeed, for over two years since the release of the U n i t e d N a t i o n s Environment Programme, UNEP's, assessment report on oil spills in the Niger Delta, the people of the region who have lived under some of the worst environmental conditions in record have waited for action from the government and some of the companies

involved, all to naught.

Apart from lukewarm statements, and another excuse to expand the already bloated bureaucracy through the setting up of a HydroCarbon Pollution Restoration Project, HYPREP, nothing, it would seem, has been done proactively by government to stem the leakages, or to bring irresponsible oil companies to book.

And, thus, one could not help making some comparisons about government inaction on spills in Nigeria and what obtains in other countries. For instance, more than four years since the horror leak on a BP oil rig which poured millions of gallons of oil into the Gulf of Mexico, and following the subsequent prosecution by the American government, BP has continued to pay dearly for the environmental degradation, even as it had attempted a complete cleanup of the spill in the region.

More interestingly, the argument has turned into why it is easier to get oil majors to pay compensation for environmental pollution in countries like America, while

the same companies carry on with impunity for worse degradation in the Niger Delta, for example.

Observers of the drama surrounding the Gulf of Mexico oil bust have stressed that the mammoth pollution, so extraordinary in that part of the world, is not so unusual in some parts of the world, especially in Nigeria’s Niger Delta region.

In an article published in The Observer of London, John Vidal, the paper’s environment editor, movingly recalls a trip to the Niger Delta a few years ago, where he literally swam in “pools of light Nigerian crude.” A network of decades-old pipes and oil extraction equipment in the delta has been plagued by serious leaks and spills.

“More oil is spilled from the delta’s network of terminals, pipes, pumping stations and oil platforms every year than has been lost in the Gulf of Mexico,” he writes.

He notes that in the United States, people express outrage at BP’s actions in

the gulf and demand that the oil giant behave responsibly in their waters. But should they also insist that oil companies behave well in the developing countries where their oil comes from?

After all, many people insist on “fair trade” coffee and non-sweatshop clothing. “If this gulf accident had happened in Nigeria, neither the government nor the company would have paid much attention. This kind of spill happens all the time in the delta,” he wrote.

Big oil spills are no longer news in this vast, tropical land. The Niger Delta, where the wealth underground is out of all proportion with the poverty on the surface, has endured the equivalent of the Exxon Valdez spill every year for 50 years by some estimates.

The oil pours out nearly every week, and some swamps are long since lifeless.

Perhaps no place on earth has been as battered by oil, experts say, leaving residents here astonished at the nonstop attention paid to

the gusher half a world away in the Gulf of Mexico. It was only a few weeks ago, they say, that a burst pipe belonging to Shell in the mangroves was finally shut after flowing for two months: now nothing living moves in a black-and-brown world once teeming with shrimp and crab.

The oil spews from rusted and ageing pipes, unchecked by what analysts say is ineffectual or collusive regulation, and abetted by deficient maintenance and sabotage. In the face of this black tide is an infrequent protest — soldiers guarding an Exxon Mobil site resorted to beating women who were demonstrating a few years ago, according to witnesses but mostly resentful resignation.

With new estimates that as many as 2.5 million gallons of oil could be spilling into the Gulf of Mexico each day, the Niger Delta has suddenly become a cautionary tale for the United States. As many CONTINUES ON PAGE 74

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World Bank to spend $140m on community projects in Nigeria

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he World Bank is to spend $140 million in support of community development in 26 states of Nigeria's 36 states.

Targeted at most vulnerable households, the World Bank said in a statement that vulnerable groups that would benefit from grants include internally displaced poor persons, marginalised or chronically poor households, widows and the physically challenged.

The Bank also stated in the statement by its Communication Associate, External Affairs, Africa Region, Mr. Bamidele Oladokun, that it would be funding micro-project such as rehabilitation and construction of school class rooms, skills acquisition, environment, health, rural electrification, transport, water, rural market infrastructure to mention but a few.

“This project will not only help vulnerable people in the short term, including those in conflict-affected areas, but will also help build longlasting partnership between local governments and communities. In addition, it will help integrate communities as well as make smart investments in people for the future,” the World Bank Task Team Leader for the project, Foluso Okunmadewa said.

The first phase of the Community Social Development Project, CSDP, which benefited over 5,600 communities and about two million people in 26 states of the federation is to close in December 2014.

“A recent assessment of the project shows that school enrolment, immunisation, and access to electricity and safe water have all increased in communities that benefited from CSDP,” the World Bank Country Director for Nigeria, Marie Francoise Marie-Nelly, added.

“In this new phase, the project will focus mainly on the most vulnerable people, in line with the World Bank’s mission to end extreme poverty and boost shared prosperity,” she added. The new phase of the CSDP will end on December 31, 2017.

The World Bank’s International Development Association, IDA,

established in 1960, helps the world’s poorest countries by providing loans and grants for projects and programs that boost economic growth, reduce poverty, and improve poor

people’s lives.

IDA is one of the largest sources of assistance for the world’s 81 poorest countries, 39 of which are in Africa.

Resources from IDA bring

positive change for 2.5 billion people living on less than $2 a day. Since 1960, IDA has supported development work in 108 countries. Annual commitments have

increased steadily and averaged about $15 billion over the last three years, with about 50 per cent of commitments going to Africa.

Road construction

Mobil workers provide healthcare centre in Lagos

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s part of 'giving back to the society initiative', employees of Mobil Producing Nigeria Unlimited have provided a modern health care centre for the people of in Local government in Lagos.

The Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, Mobil Producing Nigeria branch, made the formal handover of the centre recently in Lagos.

“We have done series of things even SOS

Woman gets medical attention

village in Isolo, we undertook training of five students for a period of five years. In Eket, we built a one story building hostel for Gosple village, that is a kind of motherless babies homes for them.

“Today what we are doing is donation of a health centre for Ilasan village in Lekki. So it is actually borne out of the desire to reach out to the less privilege,” chairman, PENGASSAN Mobil Producing Nigeria branch, Comrade Jude Nwaogu, said at the handover ceremony.

Nwaogu said the p r o j e c t w a s undertaken as part of their Corporate Social Responsibility, adding: “first of all we are doing it in all the location where Mobil have their presence, we have Lagos, we have Eket, Rivers State and so on.

“For Lagos State, it will not make sense for us to go to areas where people already have these amenities of life, so we decided to look for a community where people will actually appreciate this because they need it.

“It was in that search that we got this Ilasan village. We reached out to them, they were very excited, the Local government chairman was very cooperative, in fact the land was actually donated directly by the local government chairman, then we started the project.”

Nwaogu said of the cost of the project: “We really spent much more than we anticipated, we spend in the neighbourhood of N15 million because the ground itself was waterloo and you know what that means.

“We started with casting, and you can see that we raised it very high even the floor itself is like window level of most houses in around here, so it was an average if N15 million plus".

2014 May, SweetcrudeReports

Community CONTINUED FROM PAGE 72 as 546 million gallons of oil have been spilled into the Niger Delta over the last five decades, or nearly 11 million gallons a year, a team of experts for the Nigerian g o v e r n m e n t a n d international and local environmental groups concluded in a 2006 report.

By comparison, the Exxon Valdez spill in 1989 dumped an estimated 10.8 million gallons of oil into the waters off Alaska.

The spills in the Niger Delta are all the more devastating because this ecologically sensitive wetlands region, the source of 10 percent of American oil imports, has most of Africa’s mangroves and, like the Louisiana coast, has fed the interior for generations with its abundance of fish, shellfish, wildlife and crops.

Local environmentalists have been denouncing the spoliation for years, with little effect. “It’s a dead environment,” said Patrick Naagbanton of the Centre for Environment, Human Rights and Development in Port Harcourt, the leading city of the oil region.

Recently, the Council of Ogoni Traditional Rulers had lamented the apparent neglect by the Federal Government, even as it disclosed that thousands of children in the community were found to be suffering from cancer and other deadly diseases from exposure to contaminated water and food as a result of oil spill from activities of oil companies in the area.

The Gberemene Gokana Kingdom and Vice President, Supreme Council of Ogoni Traditional Rulers, King Barnabas B.P. Bagia stated that for over fifty years of operations by Shell Petroleum Development Company, SPDC, in Ogoniland, the revenue derived from the sales of crude oil are used by the Federal Government to develop major cities in the country while the Ogoni communities remain underdeveloped.

According to him, “Our people are apparently wallowing in abject poverty, with its attendant sicknesses and diseases caused by the oil spilled from Shell Petroleum Development Company’s faulty pipelines in our land, which has destroyed all aquatic lives upon which the livelihood of the poor depend.

Gokana Kingdom, made up of about twenty populated villages on whose land the worst oil spillage from SPDC occurred as contained in the United Nations Environment

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Oil spills, impunity and govt weakness

Oil spill in a Niger Delta community

The spills in the Niger Delta are all the more devastating because this ecologically sensitive wetlands region, the source of 10 percent of American oil imports, has most of Africa’s mangroves and, like the Louisiana coast, has fed the interior for generations with its abundance of fish, shellfish, wildlife and crops Programme (UNEP) report, which shows that every child born in Ogoni in the past twenty years is suffering from cancer.”

The Nigerian National Petroleum Corporation, NNPC, has blamed some of the worst oil spill experienced in the region to acts of illegal oil bunkering, adding that such events could expose the Niger Delta region to the worst environmental disasters ever faced in the history of the country.

Nigeria produced more than two million barrels of oil a day last year, and in over 50 years thousands of miles of pipes have been laid through the swamps. Shell, the major player, has operations on thousands of square miles of territory, according to Amnesty International. Aging

columns of oil-well valves, known as Christmas trees, pop up improbably in clearings among the palm trees. Oil sometimes shoots out of them, even if the wells are defunct.

How much of the spillage is due to oil thieves or to sabotage linked to the militant movement active in the Niger Delta, and how much stems from poorly maintained and aging pipes, is a matter of fierce dispute among communities, environmentalists and the oil companies.

Caroline Wittgen, a spokeswoman for Shell in Lagos, said, “We don’t discuss individual spills,” but argued that the “vast majority” were caused by sabotage or theft, with only 2 percent due to equipment failure or human error.

“We do not believe that we behave irresponsibly, but we do operate in a unique environment where security and lawlessness are major problems,” Ms. Wittgen said.

Oil companies also contend that they clean up much of what is lost. According to a spokesman for Exxon Mobil in Lagos, Nigel A. CookeyGam, said that the company’s recent offshore spill leaked only about 8,400 gallons and that “this was effectively cleaned up.”

But many experts and local officials say the companies attribute too much to sabotage, to lessen their culpability. Richard Steiner, a consultant on oil spills, concluded in a 2008 report that historically “the pipeline failure rate in Nigeria is many times that found elsewhere in the

world,” and he noted that even Shell acknowledged “almost every year” a spill due to a corroded pipeline.

America made the whole world to focus on the spill on the Mexican Gulf and frantic efforts were made to deal with the near-monster problem - all these within a few months! However, American-owned and other foreign oil companies have continued to bastardize the already impoverished communities of the Nigerian Niger Delta with continual oil spills and destructive gas flaring. The Nigerian Government have turned blind eyes to the effects of these environmental devastations thereby encouraging their foreign collaborators to do even worse.

Experts estimate that some 13 million barrels of oil have been spilt in the Niger Delta since oil exploration began in 1958. This is the equivalent

The Greenpeace and Amnesty reports tell of spills that had been continuous for years and many that had never been cleaned up

of one Exxon Valdez every year for 50 years.

Although the Obama administration had come under much criticism for not responding quickly enough, nor adequately, to the BP oil spill, there is no denying that top government officials, including the president himself, had felt compelled to speak about the spill and to insist that BP will be held accountable.

How differently things play out in Nigeria. Not only does the Nigerian government usually not bother to issue statements, it never feels compelled to decry such spills. Even more striking, perhaps, is the very different ways in which the international media deals with oil spills. The Niger Delta, which is home to more than 30 million people and is considered one of the world’s most important ecosystems, produces almost all of Nigeria’s foreign exchange earnings. Dead fish and oily water are part of daily life for Niger Delta residents, as are gas flares. Some middle-aged Niger Delta residents have never had a night of total darkness. There is a law against gas flaring in Nigeria, but it continues to be widely breached.

Oil companies operate in Nigeria with little or no oversight from the government. It must be noted that the government has part ownership in the subsidiaries of all the oil multinationals which operate in Nigeria.

A couple of years ago, Amnesty International published a report, “Petroleum, Pollution and Poverty in the Niger Delta.”

The report focused on Royal Dutch Shell because Shell is by far the largest operator in the Delta. According to the Oil Spill Intelligence Report, a 1 0 - y e a r s t u d y commissioned by Greenpeace, although Shell operates in more than 100 countries, 40 percent of all its oil spills happen in Nigeria.

That’s simply staggering.

The Greenpeace and Amnesty reports tell of spills that had been continuous for years and many that had never been cleaned up (despite claims by Shell to the contrary). According to the Amnesty report, “Oil spills, waste dumping and gas flaring are notorious and endemic in the Niger Delta.”

Residents of the Niger Delta “have to drink, cook with and wash in polluted water, and eat fish contaminated with oil and other toxins.”

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ayelsa State Governor, Henry Seriake Dickson, has decried the "reckless" abuse of the environment by oil companies operating in the Niger Delta, describing the harmful effects of their operations as environmental terrorism.

Governor Dickson, who spoke in Yenagoa as he received members of the National Oil Spill Detection and Response Agency, NOSDRA, led by its chairman, Major Lancelot Anyanya (rtd) in his office, called for strong environmental laws that would protect and preserve the environment against activities occasioned by oil exploration and exploitation in the Niger Delta region.

"I have said it before that what has been going on in Bayelsa State, the Niger Delta and in all oil producing areas concerning the levity with which oil companies treat the issues of the environment and the m a i n t e n a n c e o f environmental and health standards.

“When you look at all of these and particularly listening to chilly statistics, which I believe is only a tip of the iceberg, one is really left with no other conclusion than that, we are actually facing a case of environmental terrorism.

“What has been going on in the Niger Delta since the discovery of oil; a situation where more than one spill takes place in Bayelsa every day, going by what your statistics is telling us and all these sites are treated with reckless abandon and the environment is left to fend for itself, the livelihood and in fact the lives of the people and the ecosystem are not attended to. What then is more of terrorist action than this?" the governor lamented.

Niger Delta facing environmental terrorism

—Seriake Dickson Seriake Dickson

What has been going on in the Niger Delta since the discovery of oil; a situation where more than one spill takes place in Bayelsa every day, going by what statistics is telling us and all these sites are treated with reckless abandon and the environment is left to fend for itself, the livelihood and in fact the lives of the people and the ecosystem are not attended to

Stressing the need for oil companies to protect the environment, he described as unacceptable the situation whereby environmental pollution had continued to devastate the ecosystem for decades since the discovery of oil in 1956.

Earlier, the director general of NOSDRA, Dr. Peter Idabor, had informed that Bayelsa State witnesses about 40 oil spill incidents monthly, stating that with that figure, the rate of oil spills in the state was more

Shell uses trucks to clean up oil spill at Ikarama

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he Shell Petroleum Development Company, SPDC, is using vacuum trucks to convey crude from its oil fields in Ikarama community in Bayelsa State. The company said the move is a measure aimed at cleaningup an earlier spill incident.

An SPDC spokesman, Mr Joseph Obari, stated this in Yenagoa, saying the use of

trucks to lift crude from Ikarama manifold was part of a clean-up process.

Obari, who described as untrue allegations by members of the community that the company had abandoned the use of its vandalised pipelines, said there was no alternative to the use of pipelines to lift crude from oil facilities in Ikarama.

Stressing that pipelines

remained "the best option in every sense," he said: “On January 27, there was an act of sabotage on the Ikarama manifold, resulting in the spill of about 302 barrels of crude oil into SPDC Right-of-Way and beyond.

“Some 0.74 hectare of the environment was affected by the spill, but almost all of the spilled oil was

recovered.

“Oil recovery activity involves collection of spilled oil in tanks for evacuation by vacuum trucks and taken to the nearest flow station for processing.

“That was the process that has been misinterpreted as SPDC resorting to using tankers to transport crude oil because of poor pipeline integrity,’’ he explained.

Obari said the SPDC Oil Spill Response and Remediation team was

than that in Ogoni land, Rivers State, that had been widely reported.

"Travelling to the hinterland of the state through the maze of rivulets for a first time visitor not used to the disgusting stench from the polluted environment along the waterways, could make one to throw up. In some of the routes, yellowish or brownish oil slick could be seen floating," he said.

cleaning up the site, a d d i n g t h a t remediation of the 2013 spill sites that c o u l d n o t b e remediated because of flood in the area was also in progress.

He regretted that some portions of the spill sites where remediation was completed were polluted by another sabotage spill that compounded the problem.

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OSCARLINE ONWUEMENYI

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rior to 2005, Chevron Nigeria had direct dealings with s e v e r a l communities in its areas of operations wherein the development needs of the communities were identified and driven by the company.

This situation led to a dependency syndrome and lacked community ownership. In 2005, the NNPC/Chevron Joint Venture introduced the Global Memorandum of Understanding, GMoU, a new strategy to support communities in its operational areas in the Niger Delta region.

According to the chairman and managing director of Chevron Nigeria Limited, Mr. Andrew Fawthrop, the GMoU is based on the principles of participatory partnership and stakeholder engagement, transparency and accountability, sustainability assurance, peace building, monitoring and evaluation, and most importantly, communitydriven development planning.

Fawthrop said: “In Nigeria where NNPC/Chevron Joint Venture is a major producer of oil and gas, our partnership initiative is anchored on productive engagements with government, communities, non-governmental organisations and other stakeholders.

“Beyond our development of new oil and gas resources with minimal environmental footprint, we have also, through the Global M e m o r a n d u m o f Understanding, been pivotal in promoting ideals and programmes that foster sustainable development throughout the Nigerian society".

He explained that the GMoU was a “determined effort to break away from the past and build a mutually beneficial relationship with communities in the operation areas,” adding that, as a partnership model for engaging communities neighbouring its operations, the GMoU has continued to elicit global acknowledgment as it has led to significant development in many communities where the company operates.

“One important index of success in our quest for sustainable socio-economic development is that the communities are assuming a prominent role in driving their own development thereby empowering the people in the process. The

Rural water supply

Chevron GMoUs: A participatory approach to community development GMoU is now being adopted by others as a preferred community-driven development model,” he stated.

So far, he said, the GMoU has benefitted about 600,000 people in more than 400 communities, villages and chiefdoms. It involves a broad range of stakeholders, including representatives of

state and local governments in all five states where the NNPC/Chevron Joint Venture operates in the Niger Delta.

He further explained that the process involves communities grouped into e i g h t R e g i o n a l Development Committees, RDCs, a parliament-like structure with three years

tenure for representatives who are drawn from all participating communities.

These are homogenous communities who speak the same language, have the same culture and affinity.

The RDCs are in charge of implementing the day-today activities of the GMoU. The committees work with the communities to produce

community development plans that are designed and carried out to improve the livelihoods of the people.

The RDCs are Ilaje RDC (Ondo State); Itshekiri, and Egbema-Gbaramatu RDCs (Delta State); Kula and Idama RDCs (Rivers State); Jisike RDC (Imo State); and Dodo River and KEFFES RDCs (Bayelsa State).

Oil spills: Bayelsa community accuses Agip of double standards SAM IKEOTUONYE

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he Izagara and Agum clans of Okoroba community in Nembe Local Government Area, Bayelsa State, have accused the

Nigerian Agip Oil Company, NAOC, of double standards in its dealings with the community, especially as it concerned oil spills.

The spokesman for the community, Mr. Gift Douglas, who alleged neglect of the host clan by the multinational oil

company, said despite recurring oil spillage in the area and the impact on the people, the oil company had been treating the people with contempt.

“Oil spillage has become a recurrent decimal in the land of Okoroba and the impact of the activities has affected the people

negatively.

“The alleged contempt by the oil company over incessant oil spillage is provocative and a strain to the existing relationship.

"Why are they treating the Okoroba people with such contempt? Will they exhibit this attitude in Milan, London, France or in any of the European Union member’s state” he said.

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o e n s u r e a d e q u a t e compensation for Delta State communities impacted by an oil spill from an Agip-operated facility, the House of Representatives Committee on Environment has empowered an ad hoc committee to work out modalities for compensating the affected communities.

The committee is to determine how much Nigerian Agip Oil Company, NAOC, should pay as compensation for the October 2012 oil spill in Ndokwa East Local Government of Delta State.

According to the National Oil Spill Detection and Response Agency, NOSDRA, the spill occurred on the Nigerian Agip's Kwale/Akiri 10-inch pipeline due to a rupture of the facility, affecting 25 communities.

Idris Musa, director of oil field assessment at NOSDRA’ told the House Committee that over 589 barrels of crude oil were spilled in the incident out of which 180 barrels were recovered.

Eleven of the 25 affected communities are demanding N1 billion from the multinational oil company, and the House Environment Committee have accused Agip of deploying legal tactics in delaying compensation.

“This is a deliberate attempt and this is what Agip has been doing for the past one year; you destroy their land and communities and frustrate them from getting justice,” lamented chairman of the committee, Uche Ekwunife, as advocated autonomy for the Department of Petroleum Resources, DPR, to enable it promptly intervene in such matters.

Accusing DPR of collusion with international oil companies, IOCs, on such matters, she said: “That is what we’re saying, that DPR should not be part of government, this responsibility must be put in private hands.”

During an investigative session on the oil spill, Dorothy Bassey, head, health safety and environment at the DPR, told the committee the agency was not aware of the demands of the communities as she urged communities to always notify the DPR of their petitions on such matters to ensure prompt action on their side.

A representative of the impacted communities, Victor Enoyinje, said the 11 communities that had petitioned the House Environment Committee had

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AGIP OIL SPILL: Reps move to ensure compensation for communities Oil spillage

rejected N500,000 offered by Agip to each of the communities.

According to Enoyinje, who claimed that the ruptured pipeline had lost its integrity as it was over 40 years, expressed displeasure on behalf of the communities that Agip did not consult with them before deciding to offer them the N500,000 compensation.

OSCARLINE ONWUEMENYI

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he Managing Director of Don Hertz Limited, Mr. Donald C. Ugwuegbu, has stressed the importance of training and manpower development, as well as using the most modern tools and technology, in the fight to reduce the impacts of oil spillage and pollution on the environment.

Ugwuegbu, who spoke in an interview with SweetcrudeReports, remarked that the latest systems for combating e n v i r o n m e n t a l degradation resulting from oil spills are presently available in the country, adding that there is no reason for communities to continue to be ravaged by the effects of

This is a deliberate attempt and this is what Agip has been doing for the past one year; you destroy their land and communities and frustrate them from getting justice

How we're restoring land after oil spill in N/Delta —Don Hertz boss oil pouring onto their lands during exploration activities.

He explained that the formation of Don Hertz Limited, a wholly indigenous company, was premeditated to fill the vacuum that existed among service delivery organisations in creating and delivering quality services in areas of spill clean-up and soil remediation, and in house boat, modular buildings.

“We are experts in oil spill clean-up and remediation of degraded soil resulting from oil spill degradation over a long period of time. We also build house boats, modular

buildings and porter cabins in addition to the above mentioned,” he stated.

He explained that his company has been engaged in monitoring of and remediation of past impacted sites, and has applied the latest technology and products such as the HTP Organic Oil Solidifier and Encapsulator on several impacted sites of various oil companies, out of which some have been certified as having been restored to their natural status.

He noted that in exploration activities, oil companies run a high risk of oil spills on a daily basis.

“The possibilities of both a

large spill and a smaller spill are a reality and can have disastrous effects in sensitive environments.

Most often, we hear of oil spil on vast areas of farmlands and in effect cash crops are grossly destroyed and lands in most cases are rendered infertile for a long period of time.

“In seas, the effects are the same. Aquatic lives are threatened, and thus they livelihood of hundreds of thousands who depend on the sea. The source of drinking water for many is made unsafe causing diseases and ill-health,” Ugwuegbu noted.

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Akwa Ibom communities at war over oil discovery

E-mail: johniyene@yahoo.com

The rise of putinism, “the scramble for Europe” & Prospects for Nigerian gas

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n the 18 and 19 centuries, European statesman like Disraeli, Lord Salisbury, Gladstone and Otto Von Bismarck deployed robust diplomacy through the Treaty of Paris 1856, the treaty of San Stefano, also known as the Treaty of Peace 1878, the Treaty of Berlin, 1878 and the treaty of London, 1913 to placate the Eastern Question, a perennial conundrum that Western Europe recognised as having the potential to undermine the gains and civilisation of the European People. In the core of the Eastern Question was the tendency by Russian leaders to spread Russian influence over the Caucasus and indeed all of the Balkan Region and possibly into the reaches of Western Europe.

In the 18 Century Russia invaded Poland, not for the first or second time and carved out two principalities out of it. Following the Communist Revolution of 1917, Russian policy makers brought nearly the whole of the Balkan Region under Russian control through “voluntary” constitutions adopted by the confederate countries in 1924, 1936 and 1977.

The provision that each Republic could secede at its own will was never tested for fear in the Republics of “the Siberian treatment,” the Russian gulags and the loss of Russian protection which portended a vast array of negative developments for an “errant” Republic. Historians record that among a long list of factors, the collapse of the communist style economy and the ascendancy of a liberal to the highest office of the Kremlin, Mikhail Gorbachev brought about the disintegration of the communist behemoth, the USSR as well the whittling of Russian influence, not only in the Balkan, or the Caucasus but also on the world stage. Glasnost and Perestroika, the social and economic programmes deployed by Gorbachev to attenuate the stranglehold of communism on the USSR were hailed in the West but for the Soviet apparatchik, they were on anathema.

With the disintegration of the Soviet Union, Russia became just another country, poor, and disdained by the free world and her former “vassals” as a pretentious world power. It was in this scenario that Vladimir Putin, a former KGB operative stationed in East Germany came to power. Putin’s lodestone, according to Marcel K. Van Herpen, the author of “Putinism, the Slow Rise of a Radical Right Regime in Russia,” is to regain Russia’s lost glory on the world stage and to regain Russia’s “lost territories.”

There is ample evidence that Van Herpen is not exaggerating.

Putin has attached Moldova; in August 2008, Putin attacked Georgia in the famous five day war involving Georgia, Russia and the separatist South Ossetia and Abkhazia. Russian argument for joining the fray, which it has advanced to justify its involvement in other conflicts according to Polish Foreign Minister, Radoslav Sikorski, was protection for ethnic minorities.

Political scientists and historians argue that the political history of the Caucasus and indeed the Balkan region is such that it is impossible not to have ethnic minorities of a nationality in countries that are predominantly populated by another ethnic group. Russia’s most recent annexation of the Crimean Region, a semi-autonomous principality under Ukrainian sovereignty offends Article 2 Paragraph 4 of the United Nations Charter as well as the spirit and letter of Resolution 242 passed by the Security Council of United Nations on November 22, 1967 following the Six-Day war in the Middle East, a Resolution that was supported and voted for by Russia.

The world is outraged by Russia’s invasion of Ukrainian territory. From Washington to Warsaw, from Vancouver to Vienna and from London to Libreville, there is congruence that Russia should be isolated economically and diplomatically.

However, European powers have had to tread cautiously over the Russian Question for the simple reason that from Belfast to Berlin, dependence on Russian gas ranges from 20% to 40% to 60% and as much as to 80% (for Germany).

The whole essence of this discourse is that there is currently a scramble for the European gas market, a scramble which Nigerian authorities have failed to recognise and strategise over for participation. Frustrated and forced into a position of ambivalence over Russia’s breach of international law, European countries met in Brussels, March 20 to discuss how to shore up its energy security, a euphemism for reducing or totally removing its energy dependence on Russia. Already the EU has backed a new link, the Trans Adriatic Pipeline, to import Azeri gas and has already improved infrastructure to pump gas to Ukraine from the EU instead of the current situation, which is the reverse. As ambitious as these plans are, the EU lacks one thing to complete these lofty plans: Gas! Nigeria enjoys an abundance of gas deposits and although Russia enjoys nearness to Western European Markets (the distance between Moscow and London is 2508 km while the distance between Lagos and London is 5, 541.6 km), the possibility of the economic isolation of Russia as well as the fact that Nigeria can establish a Mediterranean hub which can be supplied on a daily basis by ships chugging from the Atlantic into the Mediterranean with gas supplies, is reason enough for Nigeria’s gas marketers to start developing a strategy along the lines of the suggested hub. With the construction of a well supplied gas hub on the coast of the Mediterranean, Nigeria can participate not only in a burgeoning gas market, but by also playing a sensitive role in the politics of the 21 century world by assisting in the efforts to tame the Russian invader. th

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Oil rig TOJU VINCENT

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rson and deaths h a v e characterised t r o u b l e between two communities - Udung Okung and Afaha Eduok - both in Oron, Akwa Ibom State over reported oil discovery in the area.

Members of the Senate, who were on an oversight function, visited the state, where they heard that the Police were overwhelmed in their effort to quell the crisis.

Rector of the Maritime Academy of Nigeria, MAN, Mr. Joshua Okpo, told the senators that during the trouble, Afaha Eduok people over-ran the people of Udung Okung, chasing them out of their community.

According to the rector, his management, in an effort to arrest the situation, had contacted a Police post right in the middle of the community where the proposed oil discovery was located.

Okpo explained that the site of the oil discovery was also demarcated as the boundary of the communities so that none of them would lay claim to the spot.

As at the time of filling this report, there was still no sign of life Udung Okung as houses have been abandoned and weeds and grasses have taken over the entire place.

Chairman of the Senate Committee that visited the area, Hajia Zainab Kure, commended the effort of the

Maritime Academy's management, maintaining that it was when the surrounding communities were peaceful that the safety and security of the cadets in the academy would be guaranteed.

She asked the management

of the institution to ensure indigenes of the communities were carried along by the academy regarding admission and recruitment for the institution.

New security strategy has reduced oil theft, bunkering —NSCDC

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he Nigeria Security and Civil Defence Corps, NSCDC, says new security strategy and intelligence sharing among the nation's security agencies have reduced cases of crude oil theft, illegal bunkering and kidnapping in the Niger Delta.

According to NSCDC deputy commandant (administration), Mr. Sulyman Bello, who disclosed this, the situation had also been helped by increase mobility of the Joint Task Force in the Niger Delta, under the leadership of MajorGeneral Emmanuel Atewe.

Bello, who maintained that crude oil theft, illegal bunkering and kidnapping would be a thing of the past in the Delta region soon, said the new security strategy adopted by the

security agencies, and increased mobility of the components of the JTF were the necessary ingredients required to arrest the criminal activities.

He spoke at the hand over of five new patrol vans to JTF, saying: “We recognise the effort of the current JTF leadership and can conclude that oil theft and other illicit crimes along the Niger Delta waters and environs will soon be a thing of the past”.

He said the donation of the patrol vans to JTF was to further enhance the mobility of its troops and to give a boost to logistics to ensure its overall efficiency in the fight against criminal activities in the region.

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