Sweetcrude December 2011

‘Gas plans will translate to huge economic wealth’

Oando commissions 128 Km gas pipelines

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I

ndia's Mangalore Refinery and Petrochemicals, MRPL, has bought 1.3 million barrels of West African crude oil for loading in January and February via tender, trade sources said on Thursday.

MRPL bought 650,000 barrels of Nigerian Escravos crude oil for January lifting from Chevron at a premium of about $3.00 over dated Brent on an fob basis, they said. The Indian refiner also bought 650,000 barrels of Coco, a crude oil produced in the Democratic Republic of Congo, from Shell for lifting in February at a premium of about $5.00 over dated Brent on a cost plus freight basis, they said.

DECEMBER, 2011

2

Contents 4 10

COVER

14 19

FOCUS

20 21 34 35 38 42 45 48 49

Gas Revolution: Nigeria tackles infrastructure challenges

OIL WPC announces finalists for excellence ward “Gas plans will translate to huge economic wealth

GAS

Oando commissions 128km gas pipeline

FEEDBACK

NPA to sanction vessel owners over explosion

POWER

Abandon project: FG calls for technical viabilities

FINANCE

Ecopetro earmarks $8.48bn for 2012 capex

INSURANCE

“We collaborating with stakeholders to fight fake insurers”

LABOUR “Subsidy removal is diversionary”

SOLID MINERALS

CBN advocates blueprint on mining investments

FREIGHT

Awaiting maritime hub status

TECHNOLOGY

Natural gas: Importance and uses

COMMUNITY DEVELOPMENT

Niger Delta: Shell spends N9bn on development projects

Sweetcrude is a publication of Vanguard Media Limited

THE TEAM EDITOR

Hector IGBIKIOWUBO

DEPUTY EDITOR Clara Nwachukwu CORRESPONDENTS Victor AHIUMA-YOUNG Favour Nnabugwu Godwin ORITSE Yemie ADEOYE Jimitota ONOYUME Samuel OYANDOGHA Oscarline Onwuemenyi Emma Arubi GROUP BUSINESS EDITOR Omoh GABRIEL

PAGE LAYOUT/DESIGN

Francis AYO & Johnbull OMOREGBEE

Printed and Published by Vanguard Media Limited.

Vanguard Avenue, Kirikiri Canal, P.M.B. 1007, Apapa.

Enquiries Call: 08051100256 Internet:

www.vanguardngr.com All correspondence: P.M.B 1007, Apapa, Lagos.

N

igeria’s most authoritativ e Energy Industry magazine, Sw eetcrude, will debut in grand style at the 20th World Petroleum Congres s, WPC. We are in Doha with its 31st edition, which focuses on how far the N igerian government has gone with the realisa tion of programmes in its Gas Revolution in line with our objective, to support gov ernment’s efforts to attract more Foreign Direc t Investment, FDI, to the sector.

The Group Executive Director, Gas and Pow er, Nig e r i an Na tio na l Pet rol e u m Corporation, NNPC, Dr. David Ige, speaks extensively on the break throughs recorded so far, especially in the area of providing backbone infrastructure that will galvanise Nigeria into becoming the regional energy hub.

A par t f rom our det ai l e d an d we llinvestigated reports on Nigeria’s Energy industry, and indeed, the Extractive Industry and the entire value chain, we have also kept faith with our regular rep ortage. Accordingly, we bring you updates an d developments in Finance, Insurance, Freig ht, Technology and Community Developmen t.

A l so, our pa rtn e rsh i p wi t h t h e C WC Associates for the Nigeria Oil and Gas, NOG 201 2 , In ter nat io na l Co nfe r en ce and Exhibition is still in plac e, and we urge all industry players and prosp ective investors to take advantage of the mileage offered in Sweetcrude to advertise their products and services to the global com munity.

Cover Story CLARA NWACHUKWU & OSCARLINE ONWUEMENYI

W

h e n President Goodluck E b e l e Jonathan launched Nigeria’s Gas Revolution in March this year, many may have thought it would be another one of those “ white elephant dreams”. But one year on, the Federal Government has shown its resolve to ensure that the revolution, aided by the Gas Master Plan becomes a reality through the provision of infrastructure.

Taking the infrastructure developments in phases, government aims to fast track the monetisation of the nation’s gas resources, instituting a gas based industrialisation as well as increasing the generation capacity of the power sector, to ensure sustainable electricity delivery for domestic and industrial uses.

Very few nations can boast of the resources the country has, both natural and human.

The countr y ’s resource endowments leave it with no excuse for the relatively high rate of unemployment and under-industrialisation.

The need to diversify revenue sources away from just oil makes it imperative for government to fast track the development of latent resources for the growth of the economy.

Although Nigeria’s commercial oil is over 50 years, the discovery of huge gas resources, estimated at about 187 trillion cubic feet proven gas reserves, coupled with about 600 trillion cubic feet undiscovered potential, make industry watchers describe Nigeria more of a gas province than oil.

This discovery and the need to match words with action spur red gover nment to embark on infrastructure development - through the planned construction of gas pipelines that will supply gas to the thermal power plants in

President Goodluck Jonathan

4 private pubic partnerships, P P P, w i t h a v i e w t o “Repositioning Nigeria as the regional hub for gas based industrialisation, through which the country will add value to its natural gas and create a broad platform for aggressive industrialisation,” according to the Minister of Petroleum, Mrs. Diezani AlisonMadueke.

Implementation of agenda Reiterating the commitment to see the gas revolution to fruition, the Group Executive Director, Gas Development, at the Nigerian National Oil Corporation, NNPC, Dr. David Ige, told Sweetcrude that once government was done with the provision of backbone infrastructure, investments will start springing up across the country. In this regard, he disclosed that a number of contracts have either been approved or undergoing tender in each phase of the development.

Infrastructure development in the area of power include the Itoki-Olorunshogo Pipeline to supply gas to the Olorunshogo Power Plant and the environs; Alaoji Pipeline for the Alaoji Power Plant both to be completed in six months; doubling the capacity of the L agosEscravos Pipeline from one billion standard cubic feet, CONTINUES ON PAGE 5

the Niger Delta and western Nigeria; the approvals for Free Trade Zones, FTZs; and the planned construction of various fertilisers,

petrochemicals and methanol plants in specific locations in the Niger Delta.

These are being implemented mostly through

Construction of a 504M Gas Turbine Power Station in simple cycle configuration

Drilling Rig

Cover Story

5

Nigeria tackles infrastructure challenges CONTINUED FROM PAGE 4

SCF, per day to two billion scf/d, to be completed by end 2012; the Rumuoji-ObigboImo River Pipeline, and a host of many others.

According to Ige, these pipelines are meant “to bridge the gap between excess gas availability in East, shortage in the West, and significantly boost gas availability to the power sector.”

I n t h e a r e a o f industrialization, he said that approval has been given for the construction of the Koko free Trade Zone, which will be supported with a 40kilometer pipeline that will f e e d t h e f e r t i l i z e r, petrochemical and methanol plants to be located there.

He said the objective is to make Koko, “a gas based industrial city, the biggest of its kind south of Sub-Saharan Africa.”

He added that government also plans to set up another industrial hub in Akwa Ibom and Calabar with the location of fertilizer and methanol plants, and in the Rivers axis, “issued the gas purchase order for two fertilizer plants, and methanol plant around the Onne Free Trade Zone area.”

Ige explained that these developments are targeted at “creating an enabling environment that will reduce the risks that the people face, and we phased the activities

in a manner that reduces the risks of the projects and shores investors’ confidence.”

Investment opportunities With all of these infrastructures coming on stream, Ige argued that investment opportunities abound in the areas of: ·Pipelines for gas gathering and distribution ·Central processing facilities to optimize gas resources ·Liquefied Petroleum Gas, LPG for domestic and export ·Civil and ports infrastructures at the FTZs Industry reforms Since the return of democratic r ule in the c o u n t r y, N i g e r i a h a s embarked on a number of fundamental reforms of its energy industry, thus, setting the stage for exponential growth in the economy.

Some of these reforms and policies include efforts to halt

Mrs. Diezani Alison-Madueke

Kanji Dam

militancy in the Niger Delta through the Amnesty Programme, the signing of the Nigerian Content Act in April, the launch of the Gas Master Plan, instituting an incentive-driven gas pricing for manufacturers, approval for the construction of four refineries across the country

by Chinese investors, signaling an end to the wasteful era of exporting crude to other countries and importing the refined petroleum products as well the development of a road map for the development of the power sector.

During this period, a lot of works have been done to reform the legal apparatus of the petroleum industry with the for mulation of the Petroleum Industry Bill, PIB, which seeks to overhaul the management of oil and gas resources in the country.

President Jonathan described the Gas Revolution as the Rebirth of Nigeria’s Industrialisation, and vital for the diversification of the economy and for national development.

“This aspiration to re-

industrialise Nigeria is aggressive and can only be achieved through a revolution. The focus is to catalyse a major industrialisation of the country by seeding in a few anchor investments that have the highest potential to have far reaching secondary multiplier effect on the economy,” he said during the launch.

Jonathan reassured the investors notably, Xenel of Saudi Arabia, Nagarjuna of India and Chevron Nigeria Limited, CNL, of government’s readiness to provide the necessarily support, including the quick passage of the PIB, which serves as an anchor for sustainable and profitable investment in the Nigerian oil and gas industry.

The President hoped that by 2014, Nigeria would have been positioned firmly as the undisputed regional hub for gas based industries. “We would by then, be producing enough fertilizer to create a self sufficient country and a net exporter of fertilizer and food to the world. We would be the leading regional centre for petrochemical production and manufacture of petrochemical related products both for local and export use,” he added.

Indigenous triumph A leading Nigerian indigenous oil company, the Oando Group, recently made history with the successful completion of a 128kilometre gas pipeline system from Akwa Ibom to Cross River State, built by one of its subsidiaries, Oando Gas and Power.

Alison-Madueke, immediately announced that the inauguration of the project marked the successful take-off of the gas revolution programme of the Federal Government.

Speaking during the inauguration, Oando’s Group Chief Executive Officer, Mr. Wale Tinubu, said the pipeline was built under a joint venture arrangement with the Nigerian Gas Company, NGC, a subsidiary of the NNPC. He disclosed that the 18-inch pipeline would accelerate industrialisation in the South-south region by providing cheaper, safer, CONTINUES ON PAGE 6

Cover Story

6

Clusters of gas pipeline

CONTINUED FROM PAGE 5

cleaner and environmentally friendly fuel to industries in the region.

Tinubu said his company pioneered the private sector pipeline and distribution of natural gas to industrial and commercial consumers in Nigeria.

Alison-Madueke said the completion of the project marked the successful takeoff of the gas revolution programme of the Federal Government, which targets a $25 billion worth of investment, and would generate about $10 billion over the next three years.

According to her, over 500,000 direct and indirect jobs are expected to be created from the Oando gas project and other similar projects contained in the gas revolution agenda.

Speaking with Sweetcrude on the sidelines of the launch, the minister disclosed that ongoing pipeline projects are estimated to cost about $2 billion.

According to her, the President has “a strong vision and passion to re-

industrialise Nigeria using the vast natural resources that the country is so richly endowed with. Mr. President is determined to ensure that the efficient and effective utilisation of our natural gas resources will impact positively on the lives of every Nigerian.”

She added that the Federal government’s gas agenda, both domestic and export, clearly paves the way for Nigeria to be a regional leader with all the attendant benefits.

“That agenda will n e c e s s i t a t e a n unprecedented growth in our gas supply, from the current one billion cubic feet per day to over 10 billion cubic feet per day by 2020. Realising this growth calls for a radical review of how the nationwide gas potential is harnessed,” she said.

She further noted that in order to grow the gas industry at the envisioned pace, there must be flexibility in our gas resource development and supply base. “This calls for the strategic development of various inland basins, in

addition to the Niger Delta and offshore basins. Over the next five years, we will be prioritising about $1 billion for further seismic data gathering, aeromagnetic surveys, exploration and appraisal drilling. By enhancing the prospectivity of these basins, we hope to build significant supply bases across the various geopolitical zones that complement the existing gas supply centres in the Niger Delta,” she added.

Economic revival Part of the agenda is to make the petrochemical project alone the largest industrial complex in Africa, producing over 150 containers worth of products.

These products will enable the growth of numerous downstream plastic manufacturing industries.

Wi t h t h e s e , s e c o n d a r y industries such as the high end printed circuit boards, car dashboards etc. can be established here in Nigeria.

The spiral effect of such a huge plant is the redevelopment and ex p a n s i o n o f t h e p o r t facilities near the plant

locations. This will create a hub of economic and commercial activity around the hither-to quiet port towns.

The fertilizer plants and their customized blending plants will result in a radical

transformation of the nation’s agricultural productivity from subsistence farming to full scale industrial farming. The concept of customized blending plants as introduced by this project will ensure that the fertilizer is formulated to suit the type of soil in the zone resulting in enhanced productivity. Also, increased productivity will lead to the establishment of many agro processing industries to cope with the production growth that will emerge.

Beyond the specific projects being launched in the initiative, it is expected that the various gas pipeline projects will revive the many textile industries and numerous other industries in the North, which have hitherto shut down as a result of high energy costs. Natural gas will replace fuel oil as fuel for industrial boilers.

Wealth creation Industry experts estimate that over 100,000 engineering design and construction related jobs would be created from 2012 and beyond to deliver all these plants. Engineers will be required to participate in the design of the petrochemical, fertilizer, central processing facilities and numerous pipeline projects.

Local fabrication yards will need to gear up capacity to provide relevant construction support.

Skilled workers such as welders, fitters etc. will also be required.

The civil construction effort required both onshore and at the ports

Cover Story

7

Polyolefin plant

CONTINUED FROM PAGE 13

will impact on demand for cement.

Government said the strategy adopted for the fertilizer project, for instance, means it would expect a significant increase in employment from the agricultural sector. In total this initiative will result in over 500,000 direct and indirect jobs from construction, logistics, hotel and hospitality service, fabrication, banking and above all agriculture.

As government delivers the LPG agenda, there will be a boost in the disposable income of households as cheaper fuel becomes available.

In particular, women in small scale catering business will benefit significantly from the relative cheapness of LPG. Nigerian Content law This initiative provides a test bed to actualise the intent of the Nigerian Content Act which was signed into law by President Goodluck Jonathan last year. Before

the reforms, previous governments paid lip service to the development of local content, which led to the loss of over 85 percent of incountry jobs to other countries.

However, it is expected that the full application of the Law will stimulate these jobs and opportunities, and a significant portion of the jobs created will be for Nigerians.

The nation’s service sector should benefit significantly from these opportunities.

According to the President, “When we are done we would have created a Nigeria that we all would be proud of.

Our youths can clearly see the roadmap to engagement and self worth as they get gainfully employed. This is not just a plan, this is now in action.”

The PIB nightmare However, observers fear that this economic revolution may be jeopardised by the delay in the passage of the PIB. Indeed, hopes of a quick passage for the bill, which has been delayed for upwards of three years at the

National Assembly, may have been dashed by the inglorious politicking in the legislature, and matters may get worse as the new legislature, in the habit of the last, continue to thumb its nose at the PIB. The impasse in the federal legislature has not been helped by the obtuse racketeering by various stakeholders including the NNPC, the international oil companies, IOCs, and even the organised labour organisations.

Experts believe that the long delay in the passage of the bill has blocked billions of dollars worth of investments in Nigeria’s oil and gas industry. For instance, the Royal Dutch Shell said it put aside $40 billion worth of potential investment in deepwater oil projects on hold as it awaits the outcome of the bill. Other oil majors like Chevron, Exxon Mobil, Texaco, ENI and Total, all consolidated their positions by frowning at some provisions in the PIB. A former Regional

Executive Vice President of Shell Exploration and Production, Africa, Ms. Ann Pickard, had lamented the “failure to recognise that we all benefit from taking a fair share of a growing industry rather than an excessive share of a declining one; an unwillingness by some to stand up and take decisions.”

President Jonathan, obviously bothered by the protracted delay in the passage of the PIB, was effusive with thanks to Saudi Arabia, India, Italy and the USA, noting that, “Your decision to invest in Nigeria is a testament of the confidence you have both in our vision and our resources.

I assure you that as you have taken the bold step to invest, even when many things hinge on passage of the PIB; government will support you every step of the way to ensure that this is delivered s u c c e s s f u l l y. Yo u r commitment will serve as a challenge to other investors elsewhere, letting them know that Nigeria is indeed open for business.”

SHELL

SHELL

Oil

10

igerian CONTENT INITIATIVE Dr. Ibilola Amao

E

very three years t h e Wo r l d Petroleum C o u n c i l recognizes some of the most outstanding projects and innovations in the oil and gas sector with the WPC Excellence Awards, WPCEA, for Technological Development and Social Responsibility.

The theme of this year’s conference is: Energy Solutions for All - Promoting Cooperation, Innovation and Investment, and will hold at the Qatar National Convention Centre, between December 4 and 8, 2011 HE Abdulla Bin Hamad Al A t t i y ah, D e p ut y Pri me Minister and Chief of Amiri

Diwan of Qatar, will be presenting the prestigious awards to the WPC EA winners on Monday, 5th December, the first day of the 20th World Petroleum Congress in Doha, Qatar.

This is the first time the Congress is coming to the Middle East and it is already setting new records with 5000 delegates, 500 CEOs and 50 ministers expected.

Pierce Riemer, Director General, of the World Petroleum Council, was delighted with the high standard of submissions: “We recognize companies engaged in the oil and gas industry for promoting or operating with high

excellence standards with the WPC Excellence Awards and we have been impressed with the high level of the nominated projects. With over 100 submissions the independent judging panel had an extremely difficult task selecting the best projects.”

WPCEA for Social Responsibility – Finalists (alphabetically by company) All the projects selected by the judges will be showcased during the 20th World Petroleum Congress on Monday December 5, 2011 at the Digital Poster Plaza (HALL 8) between 14:30 to 16:00.

T h e Wo r l d P e t r o l e u m Congress consists of a 5-day congress, the largest of its kind in the world with 5000 delegates, 600 media and over 550 presenters. Held alongside the congress and in the same venue is the exhibition of the World Petroleum Congress. It features exhibits from the national committees of the World Petroleum Council where the most prestigious national oil and gas companies and agencies of the world are present. It also features all the most important international oil and gas companies in the world alongside the key

suppliers, service companies and manufacturers. This is the only existing global exhibition dedicated to the oil, gas and energy industry.

About the World Petroleum Council The World Petroleum Council was founded in London in 1933. It is an international, unbiased, non-political organisation that provides a forum for discussing world issues facing the oil and gas i n d u s t r y. T h e W P C i s dedicated to scientific advances in the oil and gas industries, technology transfer and the promotion of the management of the world’s petroleum resources for the benefit of mankind.

Every three years, the World Petroleum Council hosts an international oil and gas congress hosted by one of its member countries. The 20th World Petroleum Congress will take place in Qatar from the 4-8 December 2011 and will be the first time the Congress comes to the Middle East in its 75 year history.

Tr e n d s a n d o u t l o o k s integral to the future success of the industry are the focus of discussions, forums and presentations. Delegates explore international business opportunities, exchange ideas on global issues, network.

I was so busy last year with the enactment of the Nigerian Oil and Gas Industry Content Development Act that I did not see or smell any international airport in 2010. I resorted to conducting all our businesses through email, skype, phone calls and scheduled meetings with international partners and customers that were visiting Nigeria. It made a lot of sense to focus on internal and national issues. This year, I have had to travel by compulsion and I have been subjected to the deplorable state of our airports which is fast becoming a nightmare.

Some of the requirements of Nigerian Content are Capacity building through partnerships, training, research and development etc requires setting up facilities in-country and engaging experts to put things together and commission facilities. In-country human capital development specialist programmes, such as: gas conditioning, gas processing, pipelines and Subsea engineering etc., require foreign facilitators. I feel pained by what we subject ourselves as Nigerians and our foreign guests to at the international airports. Surely, we are not animals. Why should I land at an airport that has no functional airconditioning? Why should casualties be caused by a dysfunctional escalator at MM International Airport? Why should the carousels fail and cause undue hardship for those waiting for their luggage whilst some employees have to manually move suitcases? I worked it out. It is either that the Ministers of Aviation and Transport have been too busy to spring a surprise inspection on the team at the international airports, all the maintenance staff at MMA have been sacked or are on retirement, there is a faulty reporting system, diesel supply is an issue, the generators that can power the air-conditioning are faulty, the air conditioners are faulty and we have not got the foggiest idea of the volume of traffic that use the airport vis-à-vis the design capacity of the airport.

Whilst Nigerians in diaspora lambasted the minister in absentia, moaned and groaned about how bad Nigeria is, I did request that we all shut up our mouths because our talking for the past umpteen years has not yielded much result. I enjoined all the complainers that I managed to speak with to do something no matter how small so that we see the difference that is much required. Hopefully, this piece would be read by someone who can either escalate the problem or do something about the pathetic situation that our international airport has found itself in.

Can our President and his Ministers invest our money in the upgrade of the primary international airports which are no longer fit-for-purpose as well as fix the major roads that transport equipments and supplies?.

When would there be an extension to the airport? Since the amount charged in taxes is astronomical, why can’t the government put this income in to some good use and invest it in providing a better service to its customers (the airline companies and us passengers)?. We can not afford to treat ourselves as animals. How do we expect to be respected by any foreigner who goes through a dysfunctional airport? Our government officials from the presidency to the governors jet out routinely to foreign countries soliciting for investors very un-mindful of what first impression these investors would have of Nigeria passing through our airports: the structure; the equipments; the facilities and most critically the attitude of airport officials?

Now back to Nigerian Content, what infrastructure, conducive environment for investment and logistics must be in place as a minimum requirement for efficient implementation of the Act? Is NCDMB aware of these on-going pains and how it is impacting on the bottom line of the relevant stakeholders? I am proposing that the Minister of aviation and transport respectively read out the riot act to the appropriate personnel and bodies and ensures that rather than return money to the coffers of Government at the end of the year that appropriate and published expenditure be undertaken to alleviate the pain and frustration of all international and local travellers. We can not afford to continue with the lackadaisical manner in which we run facilities that are dilapidated without scheduled maintenance programmes. We can not afford to loose valuable lives on the express and motorways because someone has not done their job or money has been embezzled. Cry my beloved country because we are no longer at ease and I am worried that the centre is no longer able to hold. We really need help. If we can put the time and effort expended in planning parties, awards and conferences into strategic thinking, planning, project execution and implementation we all would be the better for it. Fundamental to Nigerian Content implementation is good, focussed, proactive and functioning leadership.

Oil

11 Stat Marine, International Energy seal deal

F

Queue for kerosene

CLARA NWACHUKWU

F

or a short while, many Nigerians had some reprieve w i t h t h e availability and price of kerosene with the advent of the Nigerian National Petroleum Corporation, NNPC, and Capital Oil and Gas Industries Kero Direct, programme.

Hitherto, not only was the product very scarce leading to high levels of trees felling, price also shot to the roof, selling for as high as between N150 and N250 per litre depending on the outlet and location.

However, the reprieve is now short-lived, as scarcity is gradually creeping back and with price rising again, which many households see as an omen in view of the forthcoming Yuletides.

Sweetcrude learnt that this is because the NNPC/Capital Oil Kero Direct, which was a huge success while it was on, may have been hijacked by industry cabals, who also wanted a piece of the pie.

At the peak of the kerosene s c a r c i t y, t h e F e d e r a l Government had ordered the M i n i s t r y o f Pe t r o l e u m Resources, to crash the price of kerosene and also make the product available to Nigerians

who depend on it for most o their energy needs.

The ministr y with the assistance of the NNPC Retail Limited, in conjunction with Capital Oil, a major downstream player reputed to have the single largest private depot and storage facility in sub-Sahara Africa, devised the direct sales to households.

Through the support of the various local government councils in each state where it was launched, Nigerians were able to buy kerosene at the government approved price of N50/litre. The project kicked off in July, as a pilot scheme to address the lingering kerosene scarcity across the country.

Under the scheme, the Pipelines and Products Marketing Company, PPMC, a subsidiary of the NNPC provided the product to be sold to end users through the use of Capital Oil ultra modern dispensing trucks.

The direct sales scheme, which commenced in Lagos, was extended to other states including Anambra, Kaduna, Imo and the Federal Capital Territory, Abuja, and was billed to go round the country until the cabals came in. it was gathered that some cabals within the NNPC, who were not happy that the scheme was not kept within

the fold began to frustrate the project, and caused the stoppage of supply to Capital Oil depots for onward sales to the public, thereby truncating the scheme.

However, the Managing Director of Capital oil, Mr. Ifeanyi Patrick Ubah, could not be reached to speak on the issue, as a senior management official in his company confirmed to Sweetcrude that he was away on studies abroad.

He said, “My MD (Ubah) is on course abroad, he will soon be back to the country to answer your questions; I am not competent to speak on it.”

It would be recalled that Ubah said he had acquired seven large barges and five tug boats, to ensure the success of the schemes. “Capital Oil has been very concerned about the difficulty in getting kerosene for domestic use. It is in

response to this that the company came up with this innovation of deploying mobile filling stations with standard dispensing pumps to deliver kerosene at official price of N50 per litre to Nigerians. The scheme will afford our people greater access to the product with a view to reducing the use of charcoal and fire woods, which are hazardous to health.”

Furthermore, at the launch of the programme, the NNPC had promised to provide the product to all Nigerians across t h e c o u n t r y. N N P C ’ s spokesman, Dr. Levi Ajuonuma had said: “Our determination to arrest this artificial challenge in the distribution of kerosene to Nigerians is total. What we are doing here today is to guarantee that the product gets to the end user at the right time and correct price of N50 per litre.”

rench multinational, Stat Marine Holding, has signed a partnership agreement with International Energy Services Limited, IESL, as part of the drive to harness local content opportunities in the Nigerian Oil and Gas sector.

Stat Marine, cur rently operating in France, UK, USA, and Angola is a specialist in offshore engineering and t e c h n i c a l c o n s u l t a n c y, embracing subsea inspection and monitoring, flow management operating philosophy and procedures, subsea system design ( s t r u c t u r e a n d hydrodynamics), fabrication and installation supervision, as well as marine renewable energy (foundation design installation and maintenance and inspection).

International Energy Services on its part is a well known indigenous oil and gas services company engaged in oil and gas engineering designs, project management and supervision, technical services and facility maintenance, QHSE, c o n s u l t a n c y a n d environmental/analytical laboratory services, solar and renewable energy design and installation as well as technical recruitment, manpower development and training.

The deal gives both companies the owning of Stat Marine Nigeria Limited, STMNL, and will provide the opportunity to generate new businesses, excite growth, as well as build new client relationships through shared marketing efforts, complemented by Stat Marine’s global reach and worldwide relationships, to be combined with IESL local p r e s e n c e a n d exc e l l e n t capabilities, and ensure excellent technical training of personnel in new products and technologies in the offshore production facilities.

Speaking during the signing of the agreement between Stat Marine and International Energy, Mr. Luc Delclos, President, Stat Marine, said that the company decided to team up with IESL as part of its initiative to work with a proactive Nigerian company to grow their business and transfer technology to a local company.

Delclos further said the agreement demonstrates the company’s support for the local content policy of the Fe d e r a l G o v e r n m e n t o f Nigeria.

Oil

12

YEMIE ADEOYE

A

head of the forthcoming Christmas festivity and the envisaged heavy movement of people for the holidays, the Nigerian National Petroleum Corporation, NNPC, has stepped up fuel supply to the Federal Capital Territory Abuja and across the country to meet emands.

The Group General Manager, Group Public Affairs Division of the NNPC, Dr Levi Ajuonuma, disclosed this while briefing journalists on the news of alleged resurgence of fuel queues around Abuja.

He explained that the observed panic-induced fuel queues in Abuja have nothing to do with shortage in supply of petroleum products and that marketers and private depot owners are being adequately supplied with products.

“As at today, the PPMC has stepped up supply of products to Abuja and

NNPC building, Abuja environs from the normal 150 trucks per day to 224 trucks.

This situation will be sustained from now through the period of Christmas and New Year festivities till January. I can assure you there is no shortage of PMS or any other petroleum product now or in the foreseeable future as the

PPMC has a 54-day fuel sufficiency in strategic reserve,” Ajuonuma stated.

He said the complaints by some marketers that they could not lift products over the weekend because the officials of the Petroleum Equalization Fund, PEF, were not available for inspection as a result of a

… PEFMB moves to enhance products distribution during Yuletide YEMIE ADEOYE

T

h e Pe t r o l e u m Equalisation F u n d Management Board, PEFMB, has evolved measures to enhance the loading and transportation of petroleum products in anticipation of the increased demand during the Christmas holidays and end-of year-travel periods.

To this end, the board has constituted task forces to accelerate the processing and payment of marketers, as contained in a statement

issued by the Agency spokesman, Mr. Goody Nnadi, and made available to Sweetcrude in Lagos.

It reads in part: “Also, the Board is collaborating with the marketing companies and other agencies to mitigate any hindrances to effective service delivery at all distribution facilities. In addition, high level staff are being dispatched to the depots to ensure hitch-free loading of petroleum products by marketers.

“Furthermore, the Board has constituted task forces to

accelerate the processing and payment of marketers’ bridging and equalization claims to enable them move more products. The task forces drawn from the depots will be an addition to other regular staff permanently engaged in the processing of claims.”

Nnadi stated further that these measures are intended to speed up, and guarantee efficient supply and distribution of petroleum products across the nation.

“The Board will like to clarify that its staff have not

embarked on any strike as reported in a section of the media, rather, some members of the union sympathetic to the Branch Chairman who was disciplined for gross misconduct refused to carry out their regular duties. This led to the picketing of our Lagos office by non members of staff of the organisation.”

He also denied the insinuations that the Branch Chairman of PENGASSAN was suspended for any other reason than gross official misconduct, saying that the Board reserved the right.

purported strike by staff of the agency was found not to be the case as the Executive Secretary of PEF has confirmed that the staff of the agency did not at anytime embark on strike.

The NNPC spokesman warned fuel station owners and private depot owners to shun any activity that could breach the effective supply and dispensing of products to members of the public, adding that anyone caught hoarding products or not dispensing products from all its pumps will be appropriately sanctioned.

Ajuonuma said NNPC was working in concert with other relevant agencies to ensure that petroleum products get to the end users at approved prices.

He urged members of the public to desist from panic buying as there are enough products to go round even at the peak of demand as envisaged in the upcoming end of year festive season.

He called on stakeholders to avoid speculating on deregulation as government will make a pronouncement on it in due course.

Oil

Modern oil well used for oil field exploration

NNENNA EZEAH

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fren Nigeria has recorded a significant advancement in its Ebok project where production is ramping up and the Phase 2 development is on track for production by year end.

The update was made following a visit to Lagos and the company’s Ebok project by a delegation of international analysts including those from Morgan Stanley, Merrill Lynch and Alliance Bernstein, who were escorted by Afren Plc Chief Executive Officer, Mr. Osman Shahenshah, and Afren Nigeria Managing

D i r e c t o r, M r. A d e b a y o Ayorinde.

Speaking in Lagos, Afren C h a i r m a n , M r. E g b e r t Imomoh, expressed delight on the visit of the analysts from some of the world’s leading investment houses. He said, “Production at Ebok Phase1 is responding in line with prognosis to water injection’ and is being steadily increased,” adding that “a number of additional production wells will be brought on-stream by year end. The company remains in a strong position financially, with significant cash resources available and a profitable and growing production base underpinning an internally

funded forward work programme.”

He further explained “A total of four out of the five planned development wells have been drilled and completed as part of Ebok development Phase 2, developing the West Fault Block area of the field. The company expects to have completed drilling operations and have the fifth production well available shortly and for all five wells to have been commissioned and bought onstream during December.

Production tests on available wells have yielded rates that exceed expectations and the company expects fully developed production capacity of the five wells to be greater than initially forecast.”

Imomoh also said production at Ebok Phase 1, was steadily increasing towards the upper end of the targeted range.

“Having achieved a strong production test rate from the D1 reservoir in the Central Area of the field during the first half of the year, the company subsequently prioritized full development of the reservoir at this location and is in the process of batch drilling three additional production wells. It is expected that these wells will be commissioned and bought on stream by end 2011.”

Over all, about $312.2 million was generated during the period, reflecting higher price realizations from the Okoro field and increased lifting in the third quarter of the year.

Oil and gas inventory at September 30, 2011 was $49.2 million (December 31, 2010, $14.2 million), representing approximately 600,000 barrels at Ebok and 300,000 barrels at Okoro net to Afren.

Pr o f i t f r o m c o n t i n u i n g activities before tax in the period was $113.0 million (2010: $75.3 million). This reflects an increase in gross profit of $39.3 million compared to the prior period, but also includes the effect of gains on derivative financial instruments of $5.2 million (2010: loss of $3.6 million); finance costs of S$36.8 million (2010: $8.7 million); and a share of gain of an associate of $17.4 million (2010: share of loss of $0.6 million).

Normalized profit in the period was $49.1 million (2010: $58.8 million). Normalised profit excludes the effect of unrealized hedge movements, share related costs, the cost of early debt repayment and the share of gain on an associate.

13 FOI Act a tool for implementing NEITI reports BOLAJI AJALA

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he Nigeria Extractive Industries Transparency Initiative, NEITI, has said that the freedom of Information Act, FOI, is a tool for effective implementation of NEITI, audit report.

According to the agency’s new publication, NEITI Open Audit, the signing of the FOI into law has s t r e n g t h e n e d implementation of EITI processes in Nigeria, whose principle is built on public disclosures of payments and receipts in revenue management and governance process of the extractive sector.

According to NEITI Executive Secretary, Mrs. Zainab Ahmed, “the Freedom of Information Act is t i m e l y, s u p p o r t i v e a n d complimentary to NEITI Act 2007 especially at this time that NEITI is set to expand its operations to the solid minerals sector, resource disbursement and physical allocation of revenues to tiers and level of governments.”

She noted that the basic goal of NEITI/EITI process which the Freedom of Information seeks to promote is to empower citizens with information, to ask informed questions, debate and dialogue on resource use and allocations with a view to making quality contributions on development issues that shape their daily lives.

“Just like the NEITI Act of 2 0 0 7 , t h e Fr e e d o m o f Information Act 2011, will encourage more disclosures by companies and agencies to provide information to NEITI Auditors on who paid or received what in revenue flow sand governance procedures in the oil, gas and solid minerals sector. This information is fundamental for development planning, accountability and transparency,” she added.

Accordingly, she said both laws were important and complimentary, aimed at pulling down “all boundaries of secrecy and enthrone openness, transparency, voluntary disclosures as well as dissemination of public transactions to enable citizens make valuable inputs on issues that affect their future.”

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r David Ige is the Group Executive Director, Gas and Power; in this interview with Clara Nwachukwu, he speaks of Federal Government’s efforts to diversify and industrialise the economy through infrastructure provisions. Excerpts: How would you describe the objectives of the gas revolution, with a view to government’s plans o monetise our gas resources and also attracting foreign direct investments?

I think it is always a very good place to start by reiterating our gas potential. As a country, you know we have proven gas reserves of about 187 trillion cubic feet, and we also have undiscovered potential as high as about 600 trillion cubic feet. If you brought all hose together, you find out that our gas reserves in energy terms is almost about four to five times our oil reserves. So when people rightly describe Nigeria as a gas province with some oil, they are not far from the truth.

The agenda in the gas revolution is to translate that gas potential into true wealth for the country, and according to Mr. President’s plan, we are pursuing that from three distinct anchors. The first is gas to power, the second is gas for gas base industrialisation, and the third is gas for export, which includes regional and export Liquefied Natural gas, LNG. These are the three legs of our entire gas agenda. For the purpose of the gas revolution I’ll focus on the domestic part of the programmes, which are the gas to power and the gas for industrialisation.

For gas to power, the objective is simple; we want to make as much gas available to see a significant increase in power generating capacity. And based on our first phase of activities under the gas revolution, we’re looking to a four-fold increase in gas to power between now and 2015. So we expect that from the

David Ige current level of supply, we are looking to grow gas supply by about 3,200million cubic feet per day over the next four years, specifically to power. So that will translate to a huge growth in generating capacity.

F o r g a s b a s e d industrialisation, we’re preparing in the first phase across the Niger Delta broadly, three major centres for gas processing extraction and gas based industries. The reason we have done that is that we are trying to reposition Nigeria as the preferred destination for gas based industries like fertilizer, petrochemical and

methanol.

When you talk about preferred destination in has to be proximity to the gas, affordability of the gas, and competitiveness of the products you make out of those businesses. You will never be the preferred location if the fertilizer that is made in Nigeria cannot compete internationally.

So, we’ve identified three areas across the Niger Delta, as being areas for potential industrial clusters for petrochemical, fertliser and methanol plants in the proximity of gas processing facilities, and we are gradually implementing those as well. If

you look at all of those, they are huge transformational initiatives in the country.

And how far have you gone with their implementations?

Let me take the gas to power first, we have started to increase gas availability to the power sector and you will notice that there has been a steady increase in gas to power lately, and we expect that progress to continue.

To s u p p o r t t h a t , t h e government has made huge investments in critical infrastructure. For example, as I speak, the Federal Executive Council has approved the contract for the ItokiOlorunshogo Pipeline, which is a permanent gas pipeline that will bring gas to Olorunshogo Power Plant and the environs.

That pipeline project contract has been awarded and work has started and will be completed within the next six months.

We have also awarded the contract for Alaoji Pipeline, a permanent pipeline, which will bring gas also from Imo River to Alaoji Power Plant, and also to be completed within six months, and this will significantly increase gas availability to Alaoji Power Plant, to enable it produce about one Giga watt of electricity. Again, the pipeline is ongoing and is due in another six months as we speak.

Similarly, we have awarded the contract for the expansion of the Lagos-Escravos Pipeline, essentially doubling the capacity from one billion standard cubic feet per day to two billion scf/d. The pipes for that project have started arriving at the ports and construction work will start s h o r t l y. T h e e n g i n e e r i n g designs have been completed and we expect that pipeline to be completed by the end of next year, which will significantly enhance gas availability to all the power plants along the pipeline system to Lagos.

Also, we have awarded the contract for the RumuojiObigbo-Imo River Pipeline, which will bring gas to Obiigbo node, and make gas available in t h a t a x i s . Ye s t e r d a y, w e commissioned the pipeline from the Obiigbo node through Akwa Ibom to Calabar, which will bring gas to the Calabar Power Plant as well as to the industries in Calabar.

And as we speak, we are also finalising engineering studies on the Oso-Qua Ibo Terminal, QIT, which will bring gas from offshore ExxonMobil to shore in CONTINUES ON PAGE 14

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NLNG Ship

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Akwa Ibom QIT. So with all of these major infrastructure works most of which will be completed between six months and 18 months from now, we are very well poised to bridge the gap between excess gas availability in East, shortage in the West, and significantly boost gas availability to the power sector.

And we are making extremely good progress in that direction.

As you know, we are very close now to awarding the contract for the Ob-Ob-Oben Pipeline, which will link the East to the West. The tendering process is going through the commercial phase right now. To accelerate that, we had to modify the contracting challenges – we are now resubmitting tenders for two contractors starting from both

sides, so that we can accelerate delivery. In parallel with that we are also dealing with the procurement of the pipes separately to also accelerate pipes availability for it.

Essentially, the critical backbone infrastructure to support both our gas to power a g e n d a a n d o u r industrialisation agenda are being put in place.

Now coming to the gas industrialisation, the first phase is in the West Delta, which is centred around the Koko free Trade Zone. Part of what we are looking out for is that we are doing additional studies to harness our gas resources.

From Oben node, we are doing a 40-kilometer pipeline that will establish gas presence at Koko, because that is where the fertilizer, petrochemical and methanol plants will be

located, so we are evaluating that right now. We’ve engaged a consulting firm to do that.

Specifically around Koko, we are making good progress, as over the last few days we’ve got technical consultants on ground, who are have gone to check the Benin River and Escravos River, all the way to the Atlantic Ocean, basically to evaluate the river draft, the

navigability of the river and identify specific requirement for dredging to make that work.

This is because, we are trying to create in Koko, a gas based industrial city, the biggest of its kind south of Sub-Saharan Africa, and it is essential for the success of that that we clearly make the river navigable for the kinds of vessels that we’ll be looking over the life cycle of

that project. It is a very critical element, and work is ongoing by a reputable UK firm, is looking at the river issues and also in consultation with Nigerian Ports Authority, looking at the port infrastructure that will be required and all the issues related to it.

Parallel with that, further engineering optimisation work is going on on the central processing facility, which is where the gas will be processed before it goes to the fertilizer, petrochemicals and so on. That is being done by keloggs and is sponsored by the investors themselves.

The fertilizer project is also going on well; the Indians have started the tendering process for the lump sum turnkey contractor that will build the plant, and that process is ongoing. We have also at the Koko Free Trade Zone started the Environmental Impact Assessment, and work has been done on the rainy season part of it and the second season part of it, which is being done by an international reputable firm, Fugurole, because EIA is crucial before we start site works at the FTZ. On the petrochemical side, we CONTINUES ON PAGE 16

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Modern Gas Plant at Night

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are working first of all between the central processing facility and the petrochemical plants, optimising their concurrent technical configurations, because those two must fit together before they are aligned. So we are going to a phase, where there are a lot of engineering alignments, and making sure that the basis are o k a y a n d r e a d y. O u r expectation is that once we finish the EIA, we’ll start with the first phase of activity on ground, which is beginning to clear the site in preparation for major civil works. We hope that we will be able to enter the site

by Q1 next year, after the completion of the EIA and securing all necessary environmental permits from the Ministry of the Environment.

That is where we are on that.

On the flip side of Koko, on the extreme side, with the pipeline commissioned yesterday between Obigbo and Calabar, we have now also got the potential where we have established gas presence in Akwa Ibom and Calabar. And then, we are now trying to

construct another industrial hub there for the next phase of the gas industrialization with fertilizer and methanol plants located in that axis. We have strategically structured it that gas can come from the South ExxonMobil and from the North Obigbo to supply that axis effectively, so as to boost investors confidence that if they have an investment there they can have access to gas from multiple sources.

Finally, in the central area around the Rivers axis, we’ve issued the gas purchase order for two fertilizer plants, and methanol plant around the Onne Free Trade Zone area. So broadly, we are working in force, putting in place the backbone infrastructure that will make the gas available and consolidating the investors and investments to cluster the industrial parks. We believe that once we have got these backbone phase one sorted out, then we can start having investments across the country.

So in a nutshell, that is the status of where we are. If you look at all of these, there is an unprecedented amount of

investment opportunities for investors, we have investment opportunities in pipelines because there is going to be a lot of gas gathering pipelines, gas distribution pipelines, in addition to others.

We are looking for oil and gas investors who may want to participate in the central processing facilities, there is a huge opportunity there. CPFs will produce a lot of LPG, so we are also looking for investors who may want to participate in the LPG value chain, taking advantage of availability around those areas and building a downstream LPG domestic and export opportunities. We are looking for general infrastructure players – civil and ports infrastructure and also infrastructure investors that will play a role in all the FTZs we are working on.

Part of our strategic focus in that regard is to make sure that we create an enabling environment that will reduce the risks that the people face in all these investments, and we phased the activities in a manner that reduces the risks of the projects and shores

investors’ confidence.

Apart from risks reduction, are there other incentives available to investors?

Basically, the objective of the government is to really catalyse the industry for unprecedented economic growth, and I think apart from the numerous incentives that exist in a typical FTZ – as you know the FTZs really have a lot of investment incentives in the country; we would, on a case by case basis look at the requirements of every project as well such that where a project needs help beyond all that are available in the FTZ, we will give. But if you think about it, the FTZ on its own in Nigeria offers quite a lot of general incentives – import duty exemptions, accelerated approvals and low cost access to land and a whole range of tax free incentives, which we believe are about some of the most competitive globally.

It appears government is taking quite a handful with regard to the infrastructure provision, do you think all of these can be delivered within CONTINUES ON PAGE 17

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LPG Tank

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the time frame you have mentioned?

Actually, if you look at the projects I have mentioned, the pipelines have been awarded – the Alaoji Pipeline, the Omotosho Pipeline; these are all funded contractors and works are ongoing. We have a couple of other projects like the one we just finished yesterday, which is not a governmentfunded ar rangement, but actually an Oando Group private funding. When we are looking at pipeline project like the Ob- Ob- Oben, we are looking at a PPP type arrangement in evaluating them. So what we have is a mixture, and all the critical investments like the fertilizer, petrochemical and methanol are not government investments at all.

In the FTZs, we are looking at strategic partnerships with the private sector; actually, the FTZs developments are intended to be private sector led. So, we have a healthy mix of

government-led and PPPs. But of course, as we move forward, we expect that the involvement of the private sector will intensify and that is the whole idea. Government’s investment is to open up and unlock the opportunities, and the private sector should then come up and ride on it.

Looking at the existing investors, in this case the oil and gas companies already operating in Nigeria, how supportive have they being in terms of gas supply?

I think that is a good question.

Broadly, there is now a realisation that gas is a valuable commodity and a lot of potential in monetizing your gas across diverse markets to balance your risks, so that is a realization that everybody has come to very rapidly appreciate in the last couple of years. We have seen a major change in the disposition of the suppliers in the country, based on this realisation. But also based on Federal Government interventions either through the regulations on domestic supply obligation,

but also more positively in the areas like pricing adjustments and making the gas pricing more acceptable, putting in place commercial contracts that are bankable and putting in place all sorts of regulatory frameworks that give people the confidence that the domestic gas market is credible and bankable. As a result, we are seeing a good shift in the behaviours of the suppliers, some more than others; but overall, the direction is positive.

We are in a major phase of transition and we believe that if all the enablers and the policy implementations that we have proposed over the last couple of months progressed, and everybody sees that they work, we believe that the shift would even be more phenomenal than it is now.

So apart from the Indians, how much more interests have the government programmes received from the outside world?

Actually, the interests we have right now are from Indians,

we’ve got Saudi Arabia. Beyond that we have a lot of interests from American companies for gas processing facilities, we’ve got some interests from Korean investors, who want to invest in infrastr ucture, we’ve got interests from diverse sources across the world in interest in pipelines infrastructure. So there’s quite a diverse level of interest from all over the world.

I think what everybody just needs now is for some of these things to line up clearly and we move on to another phase entirely.

Looking at another critical issue affecting investment, which is security, what is government doing reassure investors of the safety of their investments?

I think this is a very crucial issue; take for example the Koko FTZ project where a lot of activities are ongoing at the moment. Initially, you get the apprehension from investors when they come to Koko, the consultants, because everybody is scared. But they’ve been all amazed at the level of reception they got from the communities, the state government and other stakeholders.

Also, I think there is a general realisation across board in the host areas that this will be good for us, and our challenge now is to make sure that we sustain that trust through the process.

The people generally are peace loving people, and hope that their trust is not betrayed. This is important for us, and some of the options we are looking at are participation both in terms of equity, and also in terms of service opportunities that exist there.

Secondly, at some point in time, there will be a road show locally to local investors appraising them of some of the opportunities that will arise for them from hospitality to just name it; ahead of time so they can participate and benefit from the economic boom. Also, from the Amnesty Initiative of Mr. President, which is going so well, and we also hope to identify some talents that can be engaged. When all of these get started, at the peak of construction activities, we are looking at tens of thousands of people being employed on the site, so we believe that there will be sufficient economic activities to drown the urge for criminal tendencies that some people may have. So, I think we are starting off very well and it is essential that we sustain it by not betraying the trust of the people.

You’ve talked about the acceptance of investors as well CONTINUES ON PAGE 18

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as community acceptance of projects, would the communities be involved by way of equity from the onset?

Yes, I think the broad structure in the master plan allows for strategic investment by the state and host communities. We have always emphasized to the investors in CPFs; if you look at the information memorandum, you’ll see that this people have a right to p l a y, and s o we are keeping to that and we make sure that that happens. It is then up to the state governments and host communities to develop the appropriate instruments or vehicles through which they want to participate. So I think the broad frame work is to encourage state and host governments’ participation as much as possible.

Still on the local investors, in terms of Nigeria content development, would the foreign partners carry along the indigenous companies with a view to transfering technology?

You know there is a legislative provision now through the Nigerian Content Act that enforces it and awards the different segments within engineering and so on. It is being made clear to the investors that the national content law must be adhered to in its fullness, and there is a complete recognition of this fact and it is embraced by investors.

That is why one of the things that we have to do is to very early is to very quickly, as soon we are clear with the different engineering issues, to start to appraise our local investors of the opportunities so that they can prepare themselves on these things.

How about the issue of keeping to the ter ms of agreements because that is one of the complaints by

inte rnation a l investors that m i d w a y , government tends to renege on greements?

I am surprise actually because Nigeria does have a record for adherence, and as far as I see here, I do not see any issues because this is Mr. President’s Transformation Agenda, which is anchored on very clear basic business principles; it’s all about the investors’ confidence .

What I mean is that in the event that these plans do not come to fruition within the life time of this administration, will it be carried over by the next administration because in some instances some agreement have had to be discontinued?

Well if you look at the nature of all the agreements that we’re looking at in gas here, most of these are purely commercial agreements between the NNPC and its partners. So far, the federal government’s part of it, are actually things that are

ent renched i n t h e Nigerian Constitution, like the NEPZ law relating to free trade zone incentives. These are laws that have been existing for years, and at the moment, I do not see any particular agreement that we have struck now that is either not commercial or not based on laws that have been in existence for long; so I do not see any threats to any of the agreements.

So what do you foresee as the challenges regarding these gas revolution?

I think we are talking here about multibillion dollar investments; you don’t deliver those kinds of investments without a fair share of serious challenges. I think our critical challenge must be to align all of

these because we are doing quite a lot at the same time, so it is about project management, to make sure that everything works concurrently, because slippage in one can have a major repercaution on the other. o we need to make sure that decisions, budget appropriations that require statutory approvals are done in timely manners in a very coordinated manner that does not lead to failures.

Like I said earlier, we need to continue to maintain the peace and security in the Niger Delta.

A n y s e n s e that we’ve lost that c a n drastically impact on the initiatives. These are areas we need to make sure that that challenge needs to be managed appropriat e l y. O f course, we still have t h e challenge of human capacity and execution capacity at the right level of quality, because, imagine when all of these are happening, we are building three fertilizer plants, a petrochemical plant, the CPfs, the ports and so on; the entire zone is like a construction site and so you ask yourself, we truly have to overcome the challenge of execution, do you have the right contractors, the right equipment, the right people to manage all these things. These are major challenges. Essentially, they are managing projects risks, tow, ensuring peace stability and security, and three making sure we have the right people, which is indeed a challenge in Nigeria in executing the right capacity.

What about funding?

Well funding will always be there, to some extent, but bear in mind that a lot of these projects are private sector led and so once they reach financial level, we expect that they will have the funds, which is our strategy for mitigating against funding challenges.

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ando Plc, Nigeria’s foremost integrated e n e r g y company has successfully built and commissioned a 128 kilometre gas pipeline from Akwa Ibom to Cross River state, south-south Nigeria.

The milestone follows the Fe d e r a l G o v e r n m e n t ’ s commitment towards optimal utilisation of the nation’s enormous gas reserves to boost the industrial and powers sectors of the economy, This historic and massive project conceived by the Nigerian Gas Company, NGC, was developed by Oando and delivered at the stipulated time with zero casualty record.

According the company’s Group Chief Executive Officer, Mr. Wale Tinubu, with about 187 trillion cubic feet of gas reserves and 600 trillion cubic feet of undiscovered potential, Nigeria is well positioned to join countries like Brazil and Indonesia in catalyzing its economy by leveraging its gas assets.

“The role of gas in national transformation and industrialization cannot be over-emphasised. In March this year, the President, in launching the gas revolution, stated that Nigeria will leverage its strength in the abundance of natural gas to transform the lives of present and future generations. This commissioning is a demonstration of our commitment to support the actualisation of that transformation”.

Speaking on the significance of the project, Tinubu said that it exemplifies the importance of public private partnership, PPP, in the infrastructural rebirth of Nigeria, as the synergies of both parties have resulted in the delivery of an economic enabler for businesses in the SouthSouth.

“It is our ideology in Oando that Nigerians are capable of delivering ingenious worldclass solutions to the challenges facing us as a nation. Among us today are many proponents of the Nigerian content and I am sure they are very proud of our achievement. This project was conceived by the Nigerian Gas Company, developed by a Nigerian

Gas pipelines

… Moves to build largest pipeline grid in sub-Saharan Africa YEMIE ADEOYE corporate, Oando’s East Horizon Gas Company, executed by a Nigerian contractor, Oilserv, using indigenous sub-contractors and talents from the two states and financed by a consortium of Nigerian financial institutions i n c l u d i n g : Fi r s t B a n k , Kakawa, FSDH, FCMB, Access bank, Fidelity bank, Ecobank and Sterling bank.”

Tinubu further extolled the virtues of his company in the areas of safety and project excellence. “This 128km natural gas pipeline was built to the highest engineering standards and excellence achievable for a project of this nature anywhere in the world.

“As a safety conscious organisation, we took every reasonable care to build this natural gas pipeline with as little impact on the environment as possible. As you may well imagine, a

pipeline across seven major rivers, swamps and indeed 115 separate communities was fraught with major challenges. It is a testament to the resilience and ingenuity of our project execution team and our subcontractors that we were able

Power subsidiary pioneered the private sector piping and distribution of natural gas to industrial and commercial consumers in the greater Lagos Area. This has enabled industries in the area to access a cleaner, safer and environmentally friendlier

to bring this project to a successful conclusion.

He said further, “In our vision of building the largest pipeline grid in sub-Saharan Africa it is a notable fact that we have a rich history of investing in the development of energy infrastructure in Nigeria. Our Oando Gas and

alternative, when compared to other forms of energy.

“O v e r 1 2 0 i n d u s t r i e s connected to our 100km gas grid in Lagos, have cut their energy costs by as much as 50 percent. This has tremendously improved their profitability and making them globally competitive

brands. We have operated this franchise for more than 11 years now without any incident.

On the back of this pipeline, we built a 12.15MW Power Plant for the Lagos Water Corporation.

This gas fired plant increased the efficiency of the corporation by 300% and is saving Lagos State Government $3.9million annually from the tax payer’s money that would have been spent on buying alternative fuel.”

Fu r t h e r m o r e , Ti n u b u disclosed Oando Gas and Power, in August 2011, assumed the management of an existing gas pipeline in Port Harcourt, following a rigorous tender. The pipeline which has a throughput of about 40 million standard cubic metres per year (mmscm/year), currently serves industries in TransAmadi.

“We are indeed pleased to add this 128km gas pipeline from Akwa Ibom to Cross River State to our growing list of natural gas pipeline systems. With the continued support of the government in the creation of an enabling environment, we are on course to achieve our vision,” he added.

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20 NigerStar 7 JV to create 3,000 jobs

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HE Nigerian Ports Authority, NPA m a y h a v e concluded plans to sanction the owners of vessel ‘M.T. Britaina U, which exploded and killed two persons recently at the Marina in Lagos.

The explosion caused damage to vehicles parked opposite a bank at the Marina Jetty.

Security sources at the authority disclosed that besides the sanctions that will be meted out to the owners of the vessel, management is currently awaiting the security report of the explosion.

It was gathered that the owners of the vessel face sanctions because she was being dr y-docked in an unauthorized area; the area where the ship was berthed is a roadstead for vessels.

It furthered gathered that the Nigerian Maritime Administration and Safety

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he Managing Director of the c o m p a n y, M r.

Thomas G. M e r e d i t h , clarifying the circumstances surrounding the explosions, said it was caused by gas leakages.

In a statement from the chief executive, made available to Sweetcrude, he said, “The explosion which occurred was as a result of gas leakage from the cylinders used for welding jobs on the facility by our contractors. However, the explosion was not a bomb, as being alleged in some quarters.”

At the time of the incident, he said the production facility (Brittania-U 1) Floating Production Storage Unit, FPSU, was undergoing

Ship explosion

A g e n c y, N I MA S A , immediately deployed its officials for a rescue mission at the site of the incident.

Efforts to get reaction from the NPA was futile as the

maintenance/re-engineering of the mooring systems to withstand the challenges of the current climate change.

He also insisted that “The management observed all normal safety checks and processes before commencing any operations, as was the case before the commencement of the welding job.

“Our preliminary investigation revealed that the leakage from one of the gas welding cylinders, which while being opened by the contractors’ employee, ignited a spark, which caused the explosion. This resulted in one fatality of one contractor employee.”

Expressing deep regrets over the incidence Meredith promised that his company “ will continue to strive to

authority’s spokesman, Chief Michael Ajayi, said that he was not aware of the fact NPA was awaiting any security report or intends to sanction the owners of the vessel.

He also said that the NPA’s management was yet to issue any official statement because the incident is still being investigated.

ensure we maintain high safety standards, as we had done in the past to avoid a reoccurrence in future,” and als o ex p re s s e d s i nce re appreciation to the Lagos State Fire Service, for their prompt response by being the first agency to arrive at the location within 15 minutes of the incidence.

Brittania-U Nigeria Limited, one of Nigeria’s indigenous marginal field producers, wish to announce the minor explosion that occurred on our production facility yesterday (Monday November 21) at about 4pm at Marina Jetty, Lagos.

Appreciation also went to the State Security Services, SSS Lagos Zone, NIMASA, NPA and Department of Petroleum Resources, DPR officials who were on hand to offer their assistance.

agal and Subsea 7, two major oil and gas services groups in Nigeria last week announced the creation of a joint venture company, NigerStar 7 that will generate no fewer than 3,000 jobs for Nigerians.

The jobs would be created from a combination of projects in different locations in Lagos, Port Harcourt and Warri to manage oil and gas projects in country.

Other facilities include: • Two fabrication yards, in Lagos and Warri, with capacity to handle Nigeria’s largest offshore projects • The support of Subsea 7’s offshore construction fleet, one of the largest in the industry, The JV partners explained that the purpose of NigerStar7 is to provide a credible solution that allows oil companies them to execute large and complex Engineering, Procurement, Construction, and Installation, EPCI projects locally in Nigeria.

Based in Lagos, NigerStar 7 is majority owned by Nigerian shareholders. The joint venture combines engineering, fabrication, installation and project management expertise of Globestar (Subsea 7’s Nigerian subsidiary) and fabrication capability and capacity of Nigerdock (Jagal’s subsidiary).

This combination allows the new company to meet client needs for subsea and topside construction and maintenance as well as pipe laying.

NigerStar 7 reiterated its commitment to the development of skills in Nigeria, and a major example of the effects of the Nigerian Content Act to build the nation’s industrial capability in the oil and gas industry.

Commenting on the joint venture, NigerStar 7, D i r e c t o r, B u s i n e s s D e v e l o p m e n t , M r.

Valentine Ugbeide, said: “NigerStar 7 is a powerful initiative to create a Nigerian company, to build on Nigerian facilities and capable of tackling the most serious challenges in the nation’s offshore industry.

This is a company that is committed to the growth of Nigeria’s industrial competence.”

Power

Siemens introduces new technology on plant management

Oscarline Onwuemenyi

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BUJA - The F e d e r a l Government has directed Ministries, Departments and Agencies, MDAs, to insist on technical viabilities of contractors before awarding any jobs.

It noted that the alarming number of abandoned and uncompleted projects that litter the landscape was because financial capability has been placed above sound technical knowledge.

The Minister of Power, Prof.

Bart Nnaji, disclosed this when he was reviewing the Gombe Dadin Kowa hydro power station with the project handlers and other stakeholders in his office in Abuja recently.

Nnaji said it was embarrassing that a critical project, which civil work was commissioned in 1988 was yet to take off in 2011. “We don’t want to terminate contracts for projects of this type with its multi-use concepts, but due to lapses in contract awards by past administrations, the present administration places premium more on technical competence of job bidders than on their financial liability.

“When you get the money but possess no sound bankable technical expertise, a project of immense contribution to the economy is stalled or shabbily carried out and the job creation ambition of the project remains completely unrealizable,” he added.

Nnaji, therefore, gave a seven day ultimatum to Mabon Limited to convince the Federal a n d G o m b e S t a t e governments’ that it possesses superior technical knowledge over other companies or get the contract terminated.

He noted that because a contract or Memorandum of Understanding, MoU, was signed by past administrations is not enough for the nation to tolerate unacceptable number of abandoned projects, adding that, “government is a continuum and that this government wants to know what went wrong with all these abandoned projects all over the place.”

T h e Po w e r M i n i s t e r announced that Dadinkowa project is very important to the people of North East geopolitical zone and that Gombe is also blessed with best

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Christian OLISE

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Prof. Bart Nnaji quality coal which made this Administration to approve a coal-to-power station in the state and that with the dam project, Gombe State is likely to be the industrial hub of the zone.

The Gombe State Governor, Alhaji Ibrahim Hassan Dankwambo, who attended the meeting expressed dissatisfaction that more than 30 years after the project conception, Gombe State has been allowed to suffer underdevelopment, deprivation of

amenities and lack of basic infrastructure as a result of visionlessness.

He announced his government’s readiness to undertake a minimum of 15% equity participation in the project if this will make the project move on.

It could be recalled that the Dadinkowa dam built about 37km east of Gombe town is a multipurpose facility with a reservoir capacity of 2.8 billion cubic meters.

Government vision for the

dam included the provision of hydroelectric power generation of 34MW, irrigation amounting to 44,000 hectares of farm land, portable drinking water to the State capital and its environs (19 million gallons daily), fishing and fish farming as well as flood control and flow regulation on the Gongola and Benue Rivers.

The project in addition to Mambilla hydroelectric power station is being supervised by the Minister of State for Power, Mr. Darius Ishaku who also participated in the crucial meeting.

he Siemens I n d u s t r y Au t o m a t i o n i n Nigeria, one of the major players in the energy sector has completed Comos software solution for plant management throughout the entire lifecycle of an industrial plant.

The company said in a statement issued in Lagos and made available to Sweetcrude that it has imported new Comos software solution for FrontEnd Engineering and Design, FEED, “to simulate programmes and support the users to speed up industrial plant planning and make it more reliable.”

The Product Manager, Comos, Mr. Marcus Elo, said, “With the new FEED, plant designers can work more quick and flexible and also improve the quality of their work.

Elo, noted that the Comos software solution is a modular and its integrated data management allows effective, holistic development in a system over the entire lifecycle.

He also said that the data was both consistent and transparent in all planning phases which applied to the early stages of plant design and ensured high quality in the design of the process.

He added that the integrated data and document revision in the mechanisms provided by the Comos FEED software module allow a controlled and efficient design procedure.

“Even at the very early planning stage of an industrial plant project, some 80 percent of the total costs are defined in the FEED phase,” he said.

The data from seven process simulators can be imported and further processed. This underlines the open system architecture of Comos and provides users with even greater flexible and further processing for flowcharts and block diagrams in Comos software.

Power

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Schneider Electric unveils partner programme

Oscarline Onwuemenyi

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he United Kingdom has tasked the N i g e r i a n government to drive through the reform agenda in the electricity power sector, but cautioned that it would be hard to attract good investors (bidders) unless there is a resolution to outstanding labour issues.

Country Representative of the United Kingdom Department for International Development, DIFD, Mr. Richard Montgomery, noted that for years, the Nigerian people had seen their governments talk about fixing the power sector, but nothing was delivered.

Speaking recently at the 2011 Nigeria Energy and Power Summit, NEPS, in Abuja, Montgomery stressed that the power sector reform was the most important of Nigeria’s economic reforms, pointing out that failed reforms of the past had contributed to the growing rate of poverty in the country.

He said, “As we look across the range of economic reforms currently underway: none is more important than those aimed at solving the problem of this country’s chronically p o o r p o w e r s u p p l y.

Consistently, every survey on the barriers to business, and to investment, has identified lack of reliable power supply as the biggest problem holding back development.

“For years the Nigerian people have seen their governments talk about fixing the power system, and then deliver nothing. Too many times, huge sums of money have been spent, with ordinary Nigerians left to wonder where it all went.

“That is why the inter national community welcomes the decision by President Jonathan to take personal responsibility for the reform of this vital sector, as soon as he took the highest office. It is why the British Government, through the Department for International Development- or DFID- has given strong support to this reform process, and will continue to do so. Real progress has been made over the last one-and –a-half years.”

Montgomery further argued that the implementation of the transition market and the

Bolaji AJALA

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Solar Panel

submission of detailed bids for those companies being privatized was the critical phase of the reform that now beckoned. He promised that the DFID would continue to offer technical assistance in building on the progress made by Nigeria through its Nigeria Infrastructure Advisory Facility.

On the role of the private sector, he stressed that the private sector involvement represents the best hope of attracting the very large investments needed if the sector is to meet the demand for power in the country.

“More private sector involvement represents the

best hope for better service delivery. That is not to say that the private sector is best under all circumstances. It is absolutely crucial that the process of privatization is transparent and genuinely competitive. It is vital that companies should only be sold to bidders who are both technically and financially qualified to run them properly.”

And despite the efforts that have been made so far, he stressed that a lot still needs to be done to attract good investors, warning that emphasis must be on the quality of investments not the number of companies.

According to him, “The government must ensure that bidders have both the policy framework and the information they need in order to submit good bids. In both areas, there remains more work to be done. Some issues are well known. There can be no successful reform without the introduction of a realistic tariff for electricity; it will be hard to attract good bidders unless there is a resolution to outstanding labour issues.

“I will ask all those involved to remember every day just how much this refor m matters to Nigerians.

chneider Electric, a global leader in integrated power and cooling services, has launched its Channel Partner Programme, CPP, a plan aimed at driving business growth and profitability for companies.

According to a statement, the Nigeria President, APC by Schneider , Mr. Marcel Hochet, said ‘We are focused on empowering our channel partners to find new, sizeable market opportunities by offering innovative solutions that are easy to sell.’

“We believe that a welltrained, knowledgeable partner will be capable of delivering better value to the customer. Hence the core objective of this programme is to enable the partners differentiate themselves in the market place.”

Hochet called on the channel partners to take full advantage of the programme for the benefit of their business. He further added that APC by Schneider Electric remained committed to offering partners quality, high-impact, and proven sales and marketing tools to help them grow their business.

The Channel Sales Manager, Mr. Kofoworola Ayodele, in his remarks, highlighted the benefits of being a channel partner, saying that the CPP provides financial differentiation to partners, including upfront preferred pricing, an opportunity registration program, back-end incentives and other opportunities to ensure that the partner relationship is profitable to the vendors.

“Our channel partners are significant part of our business.

Power

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Oscarline Onwuemenyi A London based company, Africonomie Group, has expressed support for the Federal government’s drive to reform the power sector, and called on investors from across the world to take advantage of the unique opportunity offered by Nigeria to invest in sector.

The Chairman, Advisory Board of Africonomie Croup, Mr. Ashimawan Adum, who spoke Energy Summit, in Abuja, charged the government to perfect the regulatory framework that will remove all impediments against investors in the power sector.

He noted that the Power Summit redefines the concerns of stakeholders in Nigeria on the most appropriate policy making and decision taking formula for electricity supply and the critical infrastructures network that will accommodate our country in the years to come.

He said, “According to global statistics, Nigeria has a growth potential of grossing 350 million inhabitants by the year 2030, making it one of the five most populated countries in the World. For any democracy or any government, providing energy for such a multitude is a mammoth task not to mention that maintaining a power efficiency that will span the next half century remains a frightening challenge to all here today.

“I enjoin you all to take advantage of all our inland waterways and river basins for Hydropower; I invite you all to fire up clean coal steam plants from the southeast to the northwest, I encourage you to beautify the southern coastline with windmills and our northern borders with solar farms.

“Help us convert our waste to energy and give us clean electricity – CHEAPLY so we can be amongst the leading industrialized nations before our population overwhelms us and consumes the little we have to survive on today.”

Adum further pointed out that the administration of President Goodluck Jonathan has made power reform his highest priority; an indication that he understands that sustainable power supply is key to developing economic and

Investors forum

social infrastructure.

“He knows that stable and reliable access to electricity does not only mean light but it is a major social, economic and environmental change that contributes to the a l l e v i a t i o n o f p o v e r t y, illiteracy, and disease.”

He added that despite the Pr e s i d e n t ’ s u n f a l t e r i n g commitment to privatize six generating companies and 11 distributors; the process has created market inefficiencies and dislocations that require significant capital investment and exceptional management.

“Given the scale of such an objective, and the implications of failure, it is

clear that progressively developing an unbiased private sector led platform for collaborative engagement of the industry has never been more challenging or exciting,” the statement added.

The Power Summit brought together both national and international key players in the power, energy, oil and gas sectors to evaluate the huge potential that abound in Nigeria, and also to discuss any impediments against opening up the market for investors in line with global trends.

According to the Chairman of the Nigeria Energy and Power Summit, Mr. Nat Yaduma, there is a significant and verifiable effort by

government in privatizing the power sector is open for every investor to see.

He noted that, “Government took a major step by unbundling the sector and subsequently set up c o m p a n i e s w i t h responsibilities of simplifying the on-going efforts to attract investors. Some of these efforts are in the areas of setting up the Nigeria Energy Regulator y Commission, NERC, the National Integrated Power Plant (NIPP) and most recently the Nigerian Electricity Bulk Trading Company (NEBT) as special vehicles with specified functions.

“For example the NIPP’s primary function is building some power plants to

generate electricity and the bulk purchasing company’s function is to buy off all electricity generated by the generating companies.

These will give investors the comfort and assurances that they will get money for value.”

According to him, “NEPS is designed to facilitate action towards providing greater clarity on the Nigeria power sector reform, improving investor confidence by reducing policy uncertainty seen as a ke y r i s k , e n c o u r a g i n g investment in renewables energy, facilitate power infrastructure development and bankable power projects.

“The summit is a one-stop shop that provides you with a comprehensive overview of key aspects of the Nigerian energy and power markets: from science and technology to policy reforms and project financing.”

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Electricity Transformers

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Electricity Workers laying power cables

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Financing

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c o p e t r o l reported its a p p r o v e d investment plan for the year 2012 and the update of the strategic plan for the Corporate Group for the 2012-2020 period.

“Our efforts are focused on fulfilling the goals we set forth for the years 2015 and 2020.

2012 is essential to make our vision as a corporate group a reality, which explains the importance of the approved investment plan,” said the president of Ecopetrol, Javier Gutierrez Pemberthy.

Regarding the update of the investment plan, Mr. Gutierrez stated that “the annual revision and update exercise of the main premises of the 2020 strategic plan is key to support the decision-making and to consolidate our value promise that was announced four years ago and on which we have been delivering satisfactory results.”

Investment plan for 2012 The investment plan approved for 2012 amounts to US $8.477 billion of which US $7.452B is expected to be invested directly in Ecopetrol and US $1.025 million in other companies of the Corporate Group.

According to the plan, 94% of the Capex is allocated to projects in Colombia, and the remaining 6% will be allocated to exploration and production projects along the U.S. Gulf Coast and Brazil and Peru, where Ecopetrol holds interests.

The following exhibit summarizes the breakdown of expected investments in 2012: Business Area Capex Exploration $1.419B Production $4.113B Refining & Petrochemicals $601MM Transportation $2.025B Other Investments $318MM Total $8.477B The following are the main projects that Ecopetrol S.A. plans to develop during 2012: Exploration With an investment of US $1,419 million in 2012, Ecopetrol S.A. plans to drill 42 exploratory wells, of which 36 will be located in Colombia.

The Company plans to continue with activities on all blocks it has in Colombia. Most

Dollar bills

of these wells will be in the Llanos Orientales while others will be drilled in the Magdalena valley, Catatumbo, Piedemonte and the Caribbean offshore. Six wells will be drilled internationally in the U.S. Gulf Coast and Brazil. The drilling goal was set according to the strategy of focusing on prospects with higher potential and value for the company.

The company plans also to continue to develop unconventional resources (shale gas) on blocks in the Mid Magdalena.

Production Ecopetrol S.A. allocated US $4,113 million for continued growth of crude oil and gas production with a target of up to 750 thousand barrels of oil equivalent per day (MBOED) in 2012 as an average. This production goal is 10.6% higher than the 2011 goal.

Ecopetrol’s Corporate Group’s production is expected to reach 800 MBOED in 2012.

Most of the investment will be earmarked for projects in the Llanos Orientales. Primary recovery projects will begin at the CPO-9 and Cano Sur fields. Projects will continue at Castilla, Chichimene, Rubiales, Occidente, Quifa, Caracara, Cravo Norte, Guajira, Rio Zulia, Rancho Hermoso, Tisquirama, Sur, Neiva, Provincia, Casabe, Tibu, La Cira Infantas, Apiay,

Nare, Yarigui and Cusiana fields, among others.

Refining, Petrochemicals and Biofuels The estimated total investment in this business segment is US $601 million under the investment plan, used primarily for the industrial services project, operational improvement plan and upgrades at the Barrancabermeja and Cartagena refineries.

Investments in bio-fuels are included through contributions to Bioenergy.

Transportation The US $2,025 million in investments in transport aims to increase crude evacuation capacity by 600 thousand barrels a day (BPD) in 2012.

These projects are expected to help increase heavy crude production. Also included in this investment amounts are contributions to the companies Oleoducto Bicentenario and Oleoducto de Colombia. Oleoducto de los Llanos expansion will be funded autonomously by ODL. Other investments Ecopetrol S.A. plans allocated US$318 million to other investments including, among others, research and development investments at the Instituto Colombiano del Petroleo (Colombian Petroleum Institute –ICP-) and information technology. The

investments are also expected to help fund initiatives in the areas of human talent, the shared services center, quality management and social responsibility.

Corporate Group Investments Corporate Group Investments are expected to amount to US $10.964, including US $8,477 million in Ecopetrol S.A. and US $2,487 million of investments undertaken by the companies part of the Corporate Group with their own resources.

The investment plan includes Capex for Group’s companies amounting to US $4,576 million in 2012, of which Ecopetrol S.A. will contribute US $1,025 million.

The remaining resources are expected to come from cash generation by each company, commercial financing, and the contributions of third parties or partners.

Update of the Strategic Plan for the period 2012-2020 In line with the annual budget and investment exercise, the Strategic Plan of the company was reviewed under which key elements of the strategy were updated.

The main objectives of the Strategic Plan are: Produce 1.3 million barrels by 2020, of which around 50% are expected to be heavy crude.

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Increase average reserve life to approximately 10 years, adding 6,200 million barrels.

Raise the recovery factor to 34% by means of EOR/IOR ( E n h a n c e d O i l Recovery/Improved Oil Recover) technologies.

Expand the transport capacity to 1.7 million barrels per day.

Grow the refining capacity from 300 thousand to 415 thousand processed barrels per day.

Reach production of 450 thousand tons per year of biofuels.

Meet a three-year return on capital employed (ROCE) criteria for the investments included in the plan of: 28% in Exploration and production, 11% in transportation, and 13% in petrochemicals. Refining rates will reach between 9% and 11% by 2025.

The following are the main milestones of the Strategic Plan: Estimated Capex amounts to US $80 billion in order to accomplish the goals set forth in the 2012-2020 Strategic Plan.

Approximately 85% of the total Capex is allocated to exploration and production, and 15% to refining, transport, commercialization, bio-fuels and organizational consolidation.

90% of the investment is ear marked to projects in Colombia. The remaining 10% will be allocated to E&P projects along the U.S. Golf Coast and in Brazil and Peru.

Capex in E&P amounts to US $69.5 billion, of which US $20 billion will be invested in exploration and development of new reserves, US $39 billion in technology to increase the recovery factor, US $4 billion to develop unconventional hydrocarbons and gas, and US $6 billion to develop existing fields (includes subsidiaries production).

The company expects to add in total 6,200 million barrels of new reserves between years 20112020. In order to reach 1.3 million barrels per day of production by year 2020, the production of existing fields is expected to be 840 MBOED; Colombian exploration and subsidiaries 300 MBOED; international exploration and foreign subsidiaries 110 KBOED; and unconventional hydrocarbons 50 MBOED.

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ommissioner for Insurance, M r. Fo l a Daniel said t h a t t h e Commission is not leaving any stone untur ned in reducing the activities of fake insurance operators to the barest minimum. He spoke to Rosemary Onuoha, Excerpts: How successful is NAICOM in the war against fake insurance operators?

T h e p e o p l e w e apprehended were handed over to the Nigerian police as expected. We did some follow ups, the response we got from the police was that they were still investigating even after investigation had closed; they said they were still investigating. We had a rethink over our processes; we discovered that we need to do more ground work.

First of all before we go to arrest anybody, we need to set the stage for what are we going to do. Are we going to allow the Nigerian police to continue to frustrate our efforts or can we call for the private prosecution.

We are looking at the possibility of private prosecution and we are appealing to the attorney general to give us a fiat to enable us carry out prosecution which means our lawyers can charge offender to court. We are doing that without necessarily wanting to annoy the police because definitely they have a role to play and we must not behave in a way that we will have issues with them.

To ensure that we have more effective police collaboration I am making efforts to meet with the IG. The idea to speak with the IG is just to let him know that they are very important in our quest to fight fake insurance operators and we need them to collaborate. We will be expecting that the IG will issue directive to all the Commissioners of police so that when people are

Mr Fola Daniel

apprehended and the police are aware they will know that they are not burying it under the file of ‘ we are investigating’ they know that they have to do something.

We are also reaching out to the Federal Road Safety Corps, FRSC, who are also stakeholders in our fight against fake insurers because the FRSC have some mechanism, which they can deploy to prosecute the fake

insurance operators.

One of the strategies we put in place is get the collaboration of State Governments.

The State Governments are the e m p l o y e r s o f Ve h i c l e Inspection Officers, VIOs and the VIO offices are the biggest market or platform where fake insurance products are sold. I remember that when we raided the VIO office in Lagos, the state government

was a bit embarrassed and they summoned all their VIOs and instructed them not to allow insurance to be sold in their premises. But they confirmed that their activities were given to them by their enabling Act. So we need to go round and talk to state governments so that they can give instructions to their VIOs because VIOs of most states are acting as contractors. Most of them are self funding. I can that

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remember when we first did a raid in Abuja two years ago, the head of VIO in Abuja came to our office to tell us what was going on. And he was practically appealing that we should reverse our decision not to allow insurance to be sold in their office. And I was wondering ‘ what has insurance got to do with registration and licensing of vehicles.’ He said that insurance is one of the side attractions and because we stopped them operating in Abuja, people no longer come to Abuja to license. They were taking their vehicle registration to the out skirt of Abuja just 20 minutes away from Abuja. So we really need to collaborate with the authorities so that our solo effort will no longer be solo but it will be collaborative and it will give better results. If you ask me if what we have done has driven away the entire fake from licensing offices, the answer is no. but Nigerians have a very thick skin, so a few people will still remain there. We have done similar raiding in Lagos, Abuja, and Kano. However, what of the fake operators in Warri, Aba, have we been able to reach all the 710 local governments? The answer is no therefore we need to collaborate with state government so that our efforts will not be entirely in vain.

What is the impact of offshore subsidiaries on insurance companies?

It is difficult for me to really tell because we are not operating a consolidated balance sheet. If the balance sheets of the insurance companies are consolidated it means that their businesses in Rwanda, Ghana, you will find everything in one booklet. Then you can look at the bulk and say yes, this is how much each one is contributing. But that is where we are going. We are going to insist henceforth that you will give us the financials of your activities outside Nigeria so that we can truly see what the impact is. I have a personal opinion about Nigerian companies going to establish abroad.

Insurance

Oil Rig

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s companies in Nigeria have b e e n mandated to adopt the I n t e r n a t i o n a l Fi n a n c i a l Reporting Standard, IFRS, Nigerians will be in a position to understanding the workings of oil majors better.

M r. A b e l A t a l o r, a n accountant who made this assertion, argued that since the oil majors are not quoted on the Nigerian Stock Exchange, NSE, the adoption of IFRS by these companies w i l l t o a l a r g e ex t e n t demystify their operations to the understanding of more Nigerians.

According to Atalor, since

these oil companies are doing business with the Nigerian National Petroleum Corporation, NNPC, which is required to transit to IFRS that means they are compelled impliedly to also confirm.

Atalor stated that the absence of the oil majors on the NSE have been a big problem for the country because their activities to a great extent have influenced the movement of the economy.

Meanwhile, the National Insurance Commission, NAICOM, is set to issue new guidelines and modalities for the insurance sector on IFRS. NAICOM said that the guideline will ensure that there is uniformity in the

financial statements of insurance companies when they eventually transit to IFRS. The Acting Director of Supervision of NAICOM, Mr. Nicholas Opara, who disclosed this at training on IFRS for insurance correspondents in IjebuOde, Ogun State organised

by NAICOM said that the IFRS is principle based and not rule based which means that management of companies are free to make diverse and varied choices but such choices must be explained.

In order to prevent a situation whereby every operator will have a unique financial result based on the freedom which IFRS affords,

Opara said that issuing a guideline to check excesses has become imperative in the insurance sector.

According to Opara, once the guideline is out, insurance companies are expected to open their balance which will read from January 2011.

Meanwhile NAICOM has also charged management teams of insurance companies to take concrete steps to educate themselves on the new IFRS reporting format because most management teams of companies see IFRS as mere accountants’ affair and are depending on consultants to do the entire transition on their behalf which is not in the interest of such

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companies.

Deputy Commissioner Finance & Accounts, N A I C O M , M r. G e o r g e Onekhena, who made this assertion, stressed that accountants or management teams of companies waiting for consultants to handle in entirety their IFRS transition lack direction.

I n h i s w o r d s , “A n y accountant or management team waiting for a consultant to do their IFRS job for them has already failed because you need to understand it first as an operator.”

Onekhena regretted that a lot of leadership of insurance companies are not taking IFRS seriously, stating “Many leadership are not taking the IFRS seriously rather they are taking it as an accountant stuff. When they will be hit, they will then take it seriously.”

On what insurance companies stand to gain in the adoption of IFRS, Onekhena said that IFRS enables insurers to report in a way that reflects reality and substance rather than the shadow.

According to him, with the IFRS there is going to be lots and lots of disclosures from the insurance companies and it is going to revolutionise the insurance industry.

With the dissolution of the Nigeria Accounting Standards Board, and the creation of the Financial Reporting Council, FRC, Onekhena posited that the FRC is going to rope auditors into line and they will not have the kind of powers they initially had.

He, therefore, charged insurance companies to embrace IFRS because foreign investors will be looking at the country with suspicion if they continue to dilly dally, adding that such attitude is doing damage to the country.

He explained that the IFRS is divided into two phases and the first phase, which is the transitory and permissive stage will end in 2012, while the second phase which is the convergence stage is in 2015.

He advised insurers to take up the challenge because with IFRS technologies will c h a n g e a n d p r e s e n t l y, Nigerian insurers don’t have the adequate software.

According to him, they should not wait till the last minute, but should begin in their own individual capacities.

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Labour

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RADE Union Congress of Nigeria, TUC, a c c u s e d President Goodluck Jonathan, of using the controversial planned removal of fuel subsidy in January, to divert Nigerians’ attention from the government’s inability to see through the passage of p r o t r a c t e d Pe t r o l e u m Industry Bill, PIB. This, the union noted is because downstream deregulation is already an integral part of the PIB. “The loss to the Nigerian economy as a result of the delay in the passage of the PIB is colossal and far more than the amount s p e nt on fue l s ubs i d y.

Besides, if the transparency clauses in the PIB are properly articulated there would be drastic reduction in the corruption in the Nigerian oil and gas sector including those associated with the oil subsidy management. In addition, the PIB provides a rare opportunity for the government to undertake a holistic review of the downstream sector including how to grow our local refining capacity and as well as attract serious investments into that sector. The non passage of the PIB is stalling huge investments in the Nigerian oil and gas industry, as prospective investors are not sure of the fiscal regimes and other rules that will govern their investments and the Nigerian oil and gas industry.”

TUC advised the president to focus his energy on harmonising the various versions of the PIB in circulation, and forward an Executive Bill on the PIB to the National Assembly, which should also be made available to the public to guide further debates in the National Assembly.

This was contained in a paper titled: “The Petroleum Industry Bill and the Challenges of Transparency in the Oil and Gas Industry,” delivered at the 2011 NUPENG annual training w o r k s h o p o n Transformational Agenda And Processes in the Oil and Gas Industry: Issues for Trade Union leaders’ consideration, in Calabar, Cross River State.

The Chairman of Rivers

Oil drilling State Council of TUC, Comrade Hyginus Chika Onuegbu, recalled that the PIB, which is based on the report of the Oil and Gas Refor m Implementation Committee, OGIC, set up by the Federal Government in year 2000, to carry out a comprehensive reform of the oil and gas industry, was first presented to the National Assembly in September 2008.

According to him, “the PIB combines 16 different Nigerian petroleum laws into a single and coherent document to provide for the establishment of the legal and regulatory framework, institutions and regulatory authorities for the Nigerian petroleum industry as well as establish guidelines for the operation of the upstream and downstream sectors.

Some of the laws that would be affected by the PIB

include; The Petroleum Profit Tax Act 1959, The Petroleum Act 1969, The Pe t r o l e u m Te c h n o l o g y Development Act 1973, The Associated Gas Re-injection Act 1979, The Petroleum Equalisation Fund Act 1989, The Oil Pipelines Act 1990, The Nigerian National Petroleum Corporation Act 1997; and The Petroleum Products Pricing Regulatory Agency Act 2003.

“The PIB is therefore, a reform legislation that seeks to holistically review the oil and gas industry. It is however, unfortunate that the 6th National Assembly could not pass the PIB into law even after concluding a very elaborate public hearing and after several promises to Nigerians that they will do so. When the 7th National Assembly was inaugurated in June 2011, the general public including

stakeholders in the Nigerian oil and gas industry were quick to draw their attention to the urgent need to fasttrack the passage of the PIB into law. It is therefore not a surprise that new Petroleum Industry Bills are now before each chamber of the National Assembly.”

The PIB has the following fundamental objectives.

Enhance exploration and exploitation of petroleum resources in Nigeria and to promote petroleum production for the benefit of all Nigerians Significantly increase domestic gas supplies for power generation and industrial development Create a peaceful business environment for petroleum operations Establish a progressive fiscal framework that encourages further investment in the petroleum

industry whilst increasing accruable revenues to the Federal Government of Nigeria Create a commercially viable National oil company Deregulate petroleum product prices Create efficient regulatory entities Create transparency Promote Nigeria content Protect health, safety and environment,” Onuegbu further argued that “It is heartening to see that one of the fundamental objectives of the PIB is to c r e a t e t r a n s p a r e n c y.

Unfortunately this seems to be lacking in the way and manner the PIB is being legislated. It is a huge disappointment for Nigerians to learn that there are four versions of PIB, which is supposed to ensure transparency in the Nigerian petroleum industry.”

Labour

39

Victor AHIUMA-YOUNG

J

OINT Action Front, JAF; the pro-labour civil society partner in the Labour and Civil Society Coalition, L A S C O, have begun mobilisation and sensitisation of Nigerians to resist government planned removal of subsidy on fuel and privatisation of the power sector, saying it would destroy Nigeria if allowed to sail through.

At a briefing in Lagos, JAF said the planned policies were anti-Nigeria and Nigerians and must be rejected by all right thinking Nigerians to save Nigeria from the path of destruction, saying Nigerians must rise up to reject the desperation by the Federal Government to impose another round of wicked punitive increases in the prices of petroleum products (petrol, kerosene, diesel, aviation fuel, low pour fuel oil, LPFO, etc.

Speaking on behalf of the g r o u p , i t s S e c r e t a r y, Comrade Abiodun Aremu, warned that the forceful takeover of Power Holding Company of Nigeria, PHCN facilities nationwide and its implication for constitutional rule in Nigeria.

According to him, “As far as we in JAF are concerned, there is nothing like fuel s u b s i d y. T h e r e c y c l e d argument being canvassed

by Government and its rented spoke-persons that only a cabal of profiteers benefit from the subsidy clearly exposed it as irresponsible and anti-poor if, with all the security apparatus at its disposal, the government cannot deal with the profiteers and private sharks that are looting funds in the name of subsidy, then we must protect ourselves.

Another reason the government has given is that the removal of ‘fuel subsidy’ is to block wastage of resources. If we may ask; why has Gover nment never prosecuted anybody involved in the mismanagement of the turn-around-maintenance of the refineries? At least over $231.6 million was wasted by the Obasanjo government on this. The answer is simple.

Those in government and the so-called cabals are the same looters; so they cannot prosecute themselves for

Power sub station

bleeding the country dry through naked looting.

Instead, they want to impose price increases to make life unbearable to the working people and poor masses.

The group argued that if government was sincere about saving leakages in public funds, then it should institute pro-people pgrogrammes and not prescriptions from the Brettonwood institutions like IMF and the World Bank, the European Union, and a host of others.

On the forceful take-over of PHCN facilities, Aremu insisted it was a ploy to allow the Bureau of Public Enterprises, BPE to take prospective investors “to undertake the inventory of the facilities, in view of its plot to illegally transfer these undervalued public assets to their cronies of profiteers, socalled private investors. JAF deplores this unwarranted

military occupation, which has been characterized by the maltreatment of workers and security harassment of its leadership across the c o u n t r y, i n s t e a d o f Government implementing the payment of the 50 per cent salary increment due to the PHCN workers since June.

The JAF therefore, demanded the unconditional and immediate withdrawal of the soldiers, saying, “We totally reject the planned privatisation of PHCN. Our position on the Power Sector is that the PHCN can be efficient if it is democratically run with the involvement of elected representatives of workers and consumers in the management of electricity.

This is the only way that the public resources invested in the sector can translate into qualitative improvement in power generation, adequate

supply and affordability.”

JAF calls for total action The JAF scribe urged Nigerians to prepare for protracted mass actions if government went ahead with the planned subsidy removal and privatisation of the electricity sector. “Join forces with JAF today to “reject deregulation and hike in prices of fuel. Reject and resist the privatisation of the electricity sector. Demand public trial of all public and private profiteers and dealers involved in the looting of oil subsidy, repairs of refineries as well as other corrupt atrocities in the privatisation of public enterprises.

Demand that the books of the oil industry be made open to t h e Tr a d e u n i o n s a n d w o r k i n g p e o p l e organisations for Public Inquisition. Insist on Public Massive investment in the building of refineries and overhauling of the facilities

and infrastr uctures for haulage of fuel. Struggle to end the privatization and deregulation policies.”

The group equally called on the Nigeria Labour Congress, NLC, and Trade Union Congress of Nigeria, TUC, “to disown their membership of the National Council of Privatization (NCP) and Stay out of it now.

We demand that the oil sector and the NNPC should be placed under public ownership and management and democratic control of the working people, consumers and local experts.

Organise and Mobilise for a Working People political party that must put in political power a Government that will end the era of looting and exploitation by the corrupt capitalist ruling cabals and ensure that the wealth of the country is judiciously applied to benefit the majority working population (formal and informal sectors) and the poor.”

Labour

40

Nigeria Army during training

Victor AHIUMA-YOUNG

P

UBLIC Service Inter national, PSI, umbrella body for public service workers worldwide, has petitioned President Goodluck Jonathan over the recent deployment of armed Soldiers to Power Holding Company of Nigeria, PHCN, facilities nationwide and perceived harassment of labour leaders in the sector.

In a petition by Peter Wa l d o r e f, P S I G e n e r a l Secretary, the group urged the Federal Government to restrain itself from the use of agencies such as Economic and Financial Crime Commission, EFCC, State Security Service, SSS, the Police, and militar y to intimidate the union and workers of PHCN. The petition read in part: “It is with alarm that we note the military occupation of power stations throughout the country. This occupation comes under the guise of protecting the facilities and workers against possible

threats from Boko Haram.

However, we see another purpose, which is to intimidate the workers and their union leaders in order to have them cease and divert their opposition to privatization of the energy system. This military occupation was used not less than four months ago to stop an industrial dispute. We are aware of the politicizing of the electricity sector where certain parties, including in your government,?? have personal interests to run down the sector in order to use the opportunity ??to privatize under the guise that the public sector has

failed.

“National Union of Electricity Employees, NUEE’s opposition to privatization is based on the more than 20 years of experience in many countries with energy privatization.

The impact of these privatizations has been almost uniformly negative.

Your policy makers should study these experiences in greater detail, and give you less biased advice on the greatest good for all of Nigeria and Nigerians. The NUEE has not been confrontational to your Government and recently engaged in dialogue as a

partner so that our views can be heard and taken on board.

The continued arrests and intimidation of NUEE members is a negation to civilized ways of resolving conflicts in our modern society which guarantees freedom of association and right to expression of opinion.”

The PSI also said argued that the use of force and aggression would not be in the interest of all Nigerians.

“We support a strengthened PHCN in public hands, with m u c h i m p r o v e d transparency, accountability and participation in decision-making processes.

The country has sufficient funds to provide modern, reliable and affordable electricity to all Nigerians, which will provide key support to job creation and poverty reduction. We have provided policy suggestions to your Government and stand ready to support your decision-making.

Our unions in Nigeria are committed to ongoing open dialogue with all stakeholders to improve the quality public services upon which we all depend. We urge the Government to restrain itself from the use of agencies such as EFCC, SSS, Police, and military to intimidate the union and workers of PHCN.”

Nog aD

Solid Mineral

42

Oscarline Onwuemenyi

A

B U J A Central Bank of Nigeria, C B N G o v e r n o r, Mallam Sanusi L amido Sanusi, has charged governments at Federal and state levels to come up with robust blueprints that would create stable macroeconomic environment.

He also charged them to maintain competitive markets, while ensuring easy access to credits for the nation’s mining industry.

Sanusi, who was speaking in a keynote address at the Business Development Roundtable for Investment in Zamfara State, in Abuja, stated that there was the need for a deliberate policy framework to promote and engender political and economic change to support natural resource management for growth and sustainable development.

He said that, “In order to attract investors, a comprehensive resource database to be supported with relevant information is a prerequisite. Government m u s t i n v e s t i n p o l i c y, legislative and institutional reforms to address environmental issues across different sectors and institutions.”

He added that innovative and comprehensive resource mobilization strategies to increase investments into environment and natural resources as well as invest in new and robust approaches, including those that build stronger synergies between land degradation, climate change, and bio-diversity must be encouraged.

According to him, government must also partner with stakeholders such as NGOs and the private sector to work towards addressing environmental damages at local level where the impacts are most felt.

He stressed that the endowment of mineral resources does not guarantee the development of the state, noting that in order to create and sustain wealth in the long run, “mineral resources have to be transformed into other forms of capital (human, social, financial and manufactured) and more sustainable livelihood opportunities.

“The challenge for us today,

CBN Headquarter at Abuja

is to recognize the potential for the ‘resource curse’ and work effectively to counter it.

Good governance, strong institutions, effective regulations and rigorous environmental and social safeguards are needed to realize the potentials of mineral wealth for economic growth,” he added.

Sanusi noted that natural resources are fundamental to economic activities in many ways, adding that “not only do they contribute to the incomes, employment and fiscal revenues of the citizens and the state, they also form the bedrock upon which the

livelihood of many of the very poor rest.”

He added that, “Natural resources generate a wide range of positive externalities at the local, national and global levels. Thus, the achievement of poverty eradication and the attainment of the Millennium Development Goals have long been closely linked to a sound natural resource and environmental management.”

He explained that the Bank has articulated a blueprint for reforming the Nigerian financial system, in general, and the banking sector in particular, within the next 10

years. These include enhancing the quality of the banks, establishing financial stability, enabling healthy financial sector evolution and ensuring that financial sector contributes to the real economy.

He added that, “In ensuring that the financial sector contributes to the development of the real economy, the Bank would lead in measuring more accurately the relationship between the real economy and financial sector, as well as cooperating with state governments to run pilot programmes in directing the financial sector ’s

contribution to social and economic development within the states.”

According to him, threats to the environment and natural resources, as was recently reported in Zamfara State, pose serious consequences and implications for both poverty reduction and sustainable economic development.

“Since the responsibility to generate and sustain growth rests on the state government, it becomes imperative for the state to improve upon its natural resource management for long-ter m economic development.

Solid Mineral Oscarline Onwuemenyi

A

BUJA – The F e d e r a l Government has stated that t h e availability of bankable geosciences information and data would facilitate discovery, exploitation, value addition as well as the sustainable development of the nation’s minerals and metal sector.

The Minister of Mines and Steel Development, Mr. Musa Mohammed Sada, said recently during the 3rd Stakeholders’ For um organised by Nigerian Geological Survey Agency, NGSA, in Abuja.

The minister said for the sustainable development of the nation’s minerals and metal sector, the Federal Government was ensuring that geosciences data and information are properly acquired, stored and disseminated in order to attract financiers and foreign

investors for the development of the sector.

He said “In mining sector, the value of data is unquantifiable. The quantity and quality of data matter; this is why we attach great importance to the accumulation of data.”

He cited lack of adequate funding as one of the major challenges facing the sector, stressing that, availability of adequate bankable geosciences information and data would go a long way in attracting commercial banks and foreign investors to grow the nation’s minerals and metal sector.

Sada explained that various stakeholders’ fora embarked upon by the ministry and its parastatals

are opportunities for opening up discussions, debates and scrutinizing different aspects of developmental programmes to stakeholders in the sector as well as the general public.

He added that such fora would give room to showcase the work of different departments and agencies of the ministry to users of their products and services, thereby encouraging transparency and improve service delivery in line with the transformation agenda of the present administration.

The minister said the stakeholders’ forum on the Nigerian Geological Survey Agency was part of the strategic efforts of the ministry to promote and

expand the investment frontiers through the dissemination of bankable geosciences information and data.

He added that the forum would provide an opportunity for stakeholders in the nation’s minerals and metal sector to interact and brainstorm with a view to defining future requirements and improving service delivery for the accelerated developmental programme of the sector.

The minister who noted that “Mining sector is a global sector; we must go with global best practices,” also said the nation’s minerals and metal sector has two operational principles of first come ,first

43 serve and use it or lose it in line with international best practices.

Sada told journalists on the sidelines that the Mining Cadastre Office of the ministry, which is for the administration of mining titles is not the major revenue generating office of the sector, but revenue from the nation’s minerals and metal sector comes from royalties and taxes from the exploitation of solid mineral resources.

He noted that mining operations are being handled by private investors globally while the government plays the role of a regulator. He added that government was working towards positioning the nation’s minerals and metal sector to partner with mining companies to build the infrastructural facilities such as roads, rail lines and sea ports, to facilitate their easy access to and from the mines sites as obtained in other mining countries such as Australia and Canada, among others.

Solid Mineral

44

Oscarline Onwuemenyi

E

ven as news that hundreds of children and w o m e n continue to lose their lives to massive lead poisoning, which occurred since March, 2010 in Zamfara state, the Federal government insisted that its handling of the issue was meticulous and proactive.

An annual immunization programme in Northern Nigeria last year led to the discovery of a high number of child deaths in the area. An investigation showed that they had been digging for gold at the times of their deaths, in an area where lead is prevalent. It was thought by the villagers that all the children had contracted malaria but the international medical charity, Médecins S a ns Front i è re s , found unusually high levels of lead in the blood during tests.

Reports suggested the contamination of water may have contributed to the high mortality rate. Blacksmith Institute was called in by the Federal government to assist in the removal of toxic lead.

It is thought that the poisonings were caused by the illegal extraction of ore by villagers, who take crushed rock home with them to extract. This resulted in the soil being contaminated from lead, which in turn poisoned the people through hand-tomouth contamination. Others have been contaminated by contact with contaminated tools and water.

According to officials of the Ministry of Mines and Steel Development, reports in the press about recent loss of lives in the vast mining areas of the state have not taken note of the vast amount of remediation work going on in the state, as well as efforts by the administration to effectively organise the small-time miners into cooperatives to ensure efficient supervision and regulation of their activities.

A statement from the Ministry noted that, “The report was based on the illegal mining and inappropriate mineral ore processing methods adopted by local miners in Abare, Dareta, Unguwar Yargalma and some other villages in Zamfara State that led to lead poisoning emergency in the

Illegal Miners

State. The Ministry and other Government agencies as well as some international agencies have made concerted efforts to have the situation brought under control.”

In this regard, it noted, the Ministry had embarked on vigorous sensitization campaign in the state using both the electronic and print media to enlighten the public, especially the rural people in the mining communities of Zamfara State of the inherent dangers a s s o c i a t e d w i t h inappropriate mineral processing and illegal mining.

“In the same vein, the Ministry issued a suspension order on all manners of mining activities in Zamfara State for sometime which helped in the initial

containment of the emergency. Similarly, in order to assuage the water needs of the people in the affected communities, the Ministry provided 15 water boreholes that spread across the affected areas,” the statement added.

The Minister of Mines and Steel Development, Mr. Mohammed Sada, recently admitted that government was having some challenges curtailing activities of illegal miners across the country, a development that has seen the death of over 300 people, including women and children in Zamfara State last year.

He noted that activities of illegal miners was becoming increasingly rampant, adding that even the entire forces of the Nigeria police would not be able to contain

the menace of illegal miners in the country.

Sada pointed out that investigations carried out by his ministry and other officials revealed that the deaths of the villagers in Zamfara State were entirely the handiwork of illegal miners.

According to him, “The issue of illegal miners has become one that is increasingly difficult to contain. This is because of the very difficult terrains in which mining activities are carried out. Some of the locations of the illegal mines are remote and almost inaccessible. Also, whenever these illegal miners get wind of the presence of the authorities, they easily disappear into thin air leaving the hapless villagers

and other locals to bear the brunt of their nefarious activities.”

He added that, “It is important to note that these illegal miners abound everywhere across the country, and it would be practically impossible to attempt to check them all. We can’t stop them from operating, but we can find ways to harness their efforts and create better value for them and the economy at large.”

The Minister explained that the government was doing its best to enhance the e d u c a t i o n a n d enlightenment of the mining communities, especially on the dangers involved in the improper handling and processing of crushed rocks from the illegal mining sites.

Freight

Container depot

Jones OJIEH

T

hat the issue of N i g e r i a acquiring the Shipping hub status in the West and Central Africa Subregion has come to the centre- stage in numerous maritime discourse in 2011, is not surprising to watchers of maritime trade in Nigeria.

It is also no longer news that Nigeria has since independence been the biggest importer and exporter in the sub-region such that, the cargo throughput (oil and gas inclusive) till date dwarfs those of other seaports in West and Central Africa subregion.

U n f o r t u n a t e l y, t h i s outstanding edge in volume of maritime trade has not translated into appropriate port development with a view

to placing Nigeria in her rightful position in the subregional maritime trade.

The consequence of this seeming shortfall in the maritime port development program has resulted in smaller countries in the subregion developing seaports with better attractive facilities, water ways depth, etc that have apparently placed them higher in the ladder in the league of efficient seaports in the subregion.

The pertinent question that readily comes to mind is- why has the numerous previous managements of Nigerian Ports Authority (NPA) failed to appreciate the fact that deep seaport development is a veritable goldmine and catalyst to acquiring the much talked about maritime hub status in the sub-region?

It becomes more worrisome on the realization that, out of over 100 seaports

development being executed worldwide, about 60% to 75% are deep seaports or terminals whilst the balance 25% or 30% are mostly inland waterways, ports or jetties.

U n f o r t u n a t e l y, t h e template for port development in Nigeria in the past 50years has continually positioned the country in the bracket of inland ports operators.

H o w e v e r, m a r i t i m e watchers have argued that there had been complete lack of political will on the part of government on tackling the issue of deep seaport development which is of public interest.

They further opined that while Nigeria is described as the giant of Africa, that cannot be said of her in the sub-regions maritime trade.

After all, the industry watchers had argued that after 6years of the commencement of port

concession, a deep seaport world have been commissioned so as to accelerate the processes of acquiring the much desired hub status of the West and Central Africa sub-region.

Today, the new song being sung by the Managing Director, Nigerian Ports Au t h o r i t y, E n g r. O m a r Suleiman and the Transport Minister Senator Idris Umar respectively has undoubtedly put smiles on the faces of the industry’s stakeholders.

Firstly, the enthusiasm shown by Engr. Omar Suleiman on the deep seaport project and achieving the hub status since assumption of office has resurrected the hope of Nigerians in this regards.

While defending the authority’s budget before the National Assembly recently, the NPA boss never minced words when he promised to

45 attract more vessels to the Nation’s seaports, develop new infrastructure that would make Nigeria the hub for the sub-region.

That was cheering news to stakeholders. It is therefore little wonder that industry watchers have described the Chief Executive of the NPA as the man that possesses the character and will to deliver the deep seaport and hub status on or before 2015.

Similarly, the emphasis placed on the need for deep seaport in the country by the Minister of Transport, Senator Idris Umar, during his press briefing marking his first 100days in office was another welcome development.

In line with the aspiration of the NPA boss, the transport minister disclosed that the Federal government has approved the establishment of three deep seaports in Lekki (Lagos State), Ibaka in Akwa Ibom and Olokola in Ondo State, stressing that the completion of the project will undoubtedly give the country the much desired hub status for the subregion.

Reacting to the recent drive for the hub status, a maritime player, Mr. Charles Irabor, Managing Director of Maritime Energy Base seems to expect nothing less as he noted that maritime transportation is a key sector that needs to be developed by the Federal Government.

He, however, noted that the country, as the biggest importer and exporter of cargos in the west and central sub-region, needs at least one deep seaport as a hub for the sub-region, noting that the cargo throughput handled by the country’s seaports hiked from 66.98million metric tons in 2009 to 74.9million metric tons in 2010.

He therefore urged the NPA boss “to see the rapid transformation of the subsector so that it will impact positively on cargo handling capacity of the seaport and increase Gross Domestic Product, GDP, during his tenure.

It is now obvious that expectations of stakeholders are high and it behoves on Engr. Suleiman to deliver at least one deep seaport and achieve the hub status for the sub-region.

Freight

46 SON, NAFDAC withdraw operations at ports Godwin ORITSE

S

Ship on the sea

Chris OCHAYI & Caleb AYANSINA

T

HE Council for the Regulation of Freight Forwarding in N i g e r i a , CRFFN, has threatened its three aggrieved members who leveled allegation of misappropriation of fund against the leadership of the council with expulsion, if they failed to rescind their decision.

The embattled members are: the Council’s Vice Chairman, Dr Sama Onyemelukwe, Chief Peter Obih and Mr Teddy Ifezue who were suspended in September this year for violating chapter 2, section 19 (1 and 2), which spells out actions that are deemed as misconduct under the Act. This was the resolution of the 14th National Executive Council Meeting of CRFFN held recently in Abuja. The

It is false to say that we realized N90Million, when we only registered about 3,800 individuals and about 891 corporate members. Each individual paid N5, 000, while the corporate members paid N15, 000; how on earth can this amount to N90million?

council also set up a committee to monitor and see that the resolutions of the meeting are followed to the letter by the affected members.

Speaking on behalf of the c o u n c i l , M r. E u g e n e Nweke, representing South-East Zone, noted that the council will not hesitate to expel the erring members, if they failed to comply with the conditions.

“They leveled allegation of misappropriation of funds against the council before the international body. Since they have made this allegation, the council gives them conditional pardon; it is conditional because they are to retract all the litigation against the Minister of Transport, the CRFFN and its officials.

“They are also ordered to retract all correspondences that they had earlier entered into with the International Federation of Freight Forwarders, FIATA. The council will consider expulsion, if the conditions are not followed”. Nweke said.

He said the council has decided to hold dialogue

with the Minister of Transport, Senator Idris Umar, to chart a new course for the council in line with the transformation agenda o f t h e p r e s e n t administration.

It would be recalled that, the trio alleged that the council did collect N90million for the registration exercise. But, the CFRFFN Chairman, Alhaji Hakeem Olanrewaju, said, “It is false to say that we realized N90Million, when we only registered about 3,800 individuals and about 891 corporate members. Each individual paid N5, 000, while the corporate members paid N15, 000; how on earth can this amount to N90million?”

They also claimed that NIMASA gave the council N100million, but Olarenwaju maintained that it was N50million and the purpose was spelt out clearly; it was for capacity development.

T A N D A R D Organisation of Nigeria, SON, and the National Agency for Food Drug Administration and Control, NAFDAC, have withdrawn all their operations at the nation’s seaports, following an order by the Federal Government for them to vacate the ports.

SON decided to vacate the ports after the management o f t h e N i g e r i a n Po r t s Authority, NPA, issued a 14day ultimatum to the affected agencies to leave the ports.

In a letter to the Managing Director of the NPA, SON’s Director General, Mr. Joseph Odumodu, said that the organization has ceased to operate at the port since the 23rd of October 2011.

In the letter with reference n u m b e r SON/LO/002/VOL111/88, and dated October 20th 2011, Odumodu said that a circular has also been sent to its entire staff and other relevant authorities operating at the ports.

The letter read in parts: “Following the Federal Government directive on the above subject issued on the October 10th 2011 that some Agencies including Standard Organisation of Nigeria should vacate the ports within 14 days.

“Kindly find attached a circular to all staff of the SON operating in the nation’s ports to vacate in compliance with Government order.

“For avoidance of doubt, commencing from Sunday October 23rd 2011, the SON will cease to operate at the Ports until any other contrary directive” It would be recalled that the order by government to the affected agencies created some controversies, as some of the agencies refused to leave the ports saying that they cannot vacate the ports based on newspaper reports.

Some stakeholders saw the development as a welcome idea, saying that it reduced the cost of cargo clearance at the ports.

Ferry Ad

Technology

48

Jim-Rex Lawson MOSES

N

atural gas is a fossil fuel made primarily o f methane, hydrogen and carbon. However, it was not until recently that methods for obtaining this gas, bringing it to the surface, and putting it to use were developed.

In Nigeria, Gas utilization is a primary goal of Nigeria’s petroleum and energy policies. This is because, with a proven reserve of 260 trillion cubic feet of natural gas, Nigeria’s gas reserve is triple the nation’s crude oil resources. Hitherto, a s s o c i a t e d g a s encountered during the normal course of oil production has been largely flared. Nigeria is reputed to be the largest gas-flaring country in the world. By not fully harnessing its gas resources, Nigeria loses an estimated 18.2 million U.S. dollars daily.

Nigeria is the second largest producer of liquefied petroleum gas in Africa, and the sixth largest producer in the world with over 3million metric tones annually. However, current per capita consumption of the gas in Nigeria is about 0.8kg/annum. This is the lowest in Sub-Saharan Africa; lower than those of Nigeria’s West Africa neighbours who do not produce the product.

Annual LPG consumption is in Nigeria for 2010, was put at 120,000MT, whereas, in Lagos alone, there is a potential market for 1,000,000MT annually.

Properties Natural gas is lighter than air, colorless, odorless and tasteless. For this reason, odorant is added to the gas to make it noticeable and objectionable for safety reasons. Natural gas can be compressed and, therefore, transmitted in large quantities through relatively small pipe diameters when under high pressure. Natural gas is primarily composed of methane, although also present are other chemicals such as propane, butane,

Natural Gas plant Source: Courtesy of Pemex

isobutane, pentane and heptane.

An environmentally friendly and efficient energy source, natural gas is the cleanest-burning conventional fuel, producing lower levels of greenhouse gas emissions than heavier hydrocarbon fuels such as coal and oil.

Important Facts About Natural Gas: ?Flammability range 5% to 15% ?No color, odor or taste ?Mercaptan is added for odor ?Nontoxic ?Burns with a blue flame ?Liquefies at - 200 °F ?Heating Value 800 to 1200 BTU’s per cubic foot Uses An environmentally friendly and efficient energy source, natural gas is the cleanest-burning

conventional fuel, producing lower levels of greenhouse gas emissions than heavier hydrocarbon fuels such as coal and oil.

Natural gas fuels electric power generators, heats buildings and is used as a raw material in many consumer products, such as those made of traditional plastics.

The International Energy Agency predicts that the demand for natural gas will grow by approximately 44 percent through 2035.

Domestic use Natural gas dispensed from a simple stovetop can generate heat in excess of 2000°F (1093°C) making it a powerful domestic cooking and heating fuel. In much of the developed world it is supplied to homes via pipes where it is used for many purposes including natural gas-powered ranges and

ovens, natural gas-heated c l o t h e s d r y e r s , heating/cooling and central heating. Home or other building heating may include boilers, furnaces, and water heaters.

Compressed natural gas (CNG) is used in rural homes without connections to piped-in public utility services, or with portable grills.

Power generation Natural gas is a major source of electricity generation through the use of gas turbines and steam turbines. Most grid peaking power plants and some offgrid engine-generators use natural gas. Natural gas burns more cleanly than other Hydrocarbon fuels, such as oil and coal, and produces less carbon dioxide per unit of energy released.

Hydrogen Natural gas can be used to produce hydrogen, with one common method being the h y d r o g e n r e f o r m e r.

Hydrogen has many applications: it is a primary feedstock for the chemical industry, a hydrogenating agent, an important commodity for oil refineries, and the fuel source in hydrogen vehicles.

Transportation Compressed natural gas is a cleaner alternative to other automobile fuels such as petrol and diesel. As of 2008 there were 9.6 million natural gas vehicles worldwide, led by Pakistan (2.0 million), Argentina (1.7 million), Brazil (1.6 million), Iran (1.0 million), and India (650,000).

Aviation Russian aircraft manufacturer Tupolev is currently running a development program to produce LNG- and hydrogen -powered aircraft.

It claims that at current market prices, an LNGpowered aircraft would cost 5,000 roubles (~ $218/ £112) less to operate per ton, roughly equivalent to 60%, with considerable reductions to carbon monoxide , hydrocarbon and nitrogen oxide emissions

Fertilizers Natural gas is a major feedstock for the production of ammonia , via the Haber process , for use in fertilizer production.

Other Natural gas is also used in the manufacture of fabrics , glass , steel , plastics , paint , and other products.

49

Road under construction

T

h e S h e l l Petroleum Development Company of Nigeria Ltd, SPDC, said, it spent about N9billion on community development projects in the Niger Delta in 2010.

The Managing Director of SPDC, Mr. Mutiu Sunmonu, disclosed this at a Sustainable Development exhibition in Abuja recently.

“This is one of the biggest corporate social responsibility portfolios operated by a private company in Sub-Saharan Africa, and it shows that we care for the wellbeing of the communities in which we do business.”

The event was the first Sustainable Development Partnership Opportunity

and Exhibition organised by SPDC in Abuja, and the t h e m e w a s “ Po w e r i n g Progress Together”.

Sunmonu said: “We know from our work in the Niger Delta, that no single actor can meet the scale, complexity and resources required to respond to the challenges of development in communities. That is why we have increasingly partnered with other business entities, government agencies, NGOs and communitybased organisations to plan and deliver on our social performance commitments to achieve the desired impact and sustainability.”

He cited the Global M e m o r a n d u m o f Understanding, GMoU initiative, which the

company introduced in 2006, as a life-changing opportunity for communities who now choose and implement their projects with funding from SPDC. So

far, SPDC has signed and implemented agreements with 26 clusters, covering 271 communities in Rivers, Delta and Bayelsa states. By the end of 2010, a total of 490 projects had been implemented through GMoUs, with more than $65 million provided as funding.

In an address, the Minister of Niger Delta Affairs, Elder Godsday Orubebe, commended SPDC for its GMoU initiative. He said: “No other question preoccupies the minds of the people of the Niger Delta than rapid development.

And peace is the bedrock of all development. Therefore, let this forum mark the beginning of a brighter and more hopeful co-operation and prosperity for the Niger Delta region and Nigeria in general.”

The Amayanabo of Nembe Kingdom, Dr. Edmund Daukoru, who chaired the occasion said: “I’ve come all the way from Bayelsa State to associate with the success of the GMoU and other programmes, which I wish could be standard for all Nigerian communities.”

Beneficiaries who made presentations included Mrs. S h a d e Ad e r o g b a w h o enjoyed all-year round health care including giving birth under the Community Health Insurance Scheme of IA GMoU Cluster, Mercy Chukwudi and Diana Marcus who established businesses with LiveWIRE support as well as Chief I. S. Young-Dede the chairman o f N e m b e C i t y Development Foundation.

Chief Young-Dede, who is also the palace secretary of the Amayanabo of Nembe Kingdom, enthralled the audience with many projects that have been executed including land marine transport, guest house, roads, ICT centre and printing press. He added: “We’ve transformed from being a Cluster to a Foundation capable of attracting support from far and near.”

Precious Njoku, a young man got trained as a welder under the GMoU programme, and is now gainfully employed in a big construction company in Port Harcourt. “My story has changed for good,” he declared to the applause of the audience.

“It is stories like Precious’s that encourage us,” commented Vice President, Health, Safety and Environment, HSE and Corporate Affairs, Mr. Tony Attah. “We will continue to invest in the wellbeing of our people as we do business in the Niger Delta, and ask other stakeholders including communities themselves to be part of this noble effort.”

SPDC had held similar exhibitions in Port Harcourt, Yenagoa, Warri and Lagos.

The Abuja edition brought together government officials, diplomats, NGOs and development organisations who thronged the Shehu Musa Yar’Adua Memorial Centre and heard testimonies by beneficiaries of GMoU, LiveWIRE, community health and other life-building programmes.

50 Oscarline Onwuemenyi

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BUJA – Total Upstream Companies in Nigeria has announced that it is re-branding its a n n u a l To t a l G o l f Tournament to annual Total Charity Golf Tournament, to reflect the re-engineering of the company’s Corporate Social Responsibility, CSR philosophy.

The re-branding effort has therefore led to the donation of the sum of N2 million to an Abuja-based orphanage by the company.

Disclosing this transformation in the widelycelebrated golf event, the Managing Director and Chief Executive of Total Upstream Companies, Mr. Guy Maurice, told journalists in Abuja that the change was to increase the impact of Total’s C SR expenditure on the maximum number of stakeholders.

He said, “Starting this year, t h e a n n u a l To t a l G o l f Tournament, which is in its 16th year, will now be known as the Annual Total Charity Golf Tournament. While we retain golf tournament as the main event on our corporate sporting calendar, the new concept marries it with CSR convictions by turning it into a charity event. “ We h a v e , t h e r e f o r e , identified City of Refuge Orphanage, an Abuja-based charity, to be the first beneficiar y of a token amount that we have raised from this year’s tournament plus Total’s contribution.”

Maurice explained that other characteristics of the re-branded golf tournament are the inclusion of a ProTournament to start some days preceding the main event with reasonable prize money to be shared amongst the five best players within the categor y of young professional golfers. This, he added, will permit the development of professional golfers as alternative employment for some youths.

Another change would be the replacement of prizes with trophies, as the purchase money will now be added to entry fees and donated to one chosen charity organization each

A Golfer year. There will also be a request to guest players to contribute to a token amount as playing fees which will be added to the charity fund each year.

According to Maurice, “Our modest contribution today might not be much, but it represents our desire to give back to the society and we call on other corporate organizations to extend the scope and reach of their CSR initiatives to cover our less-privileged stakeholders.”

He noted that the annual G o l f To u r n a m e n t w a s conceived to bring keen golfers, friends and business associates together for a day of fun and informal interaction, which is usually rounded off with an exciting awards ceremony.

He added that the tournament has provided an opportunity for some participants to network and hone their golfing skills. “For others, the event has further deepened our interest in the exciting world of golf and its limitless possibilities. But most importantly, as true lovers of the sport, we know that the beauty of the tournament is not just in winning but in participating,” he added.

Total Upstream in Nigeria is a subsidiary of the Total Group of Companies. Total is the fourth largest oil and gas company in the world with operations in more than 100 countries. The group’s activities span all aspects of the energy industry, from oil and gas exploration and production to downstream refining and marketing of oil and gas products.

Emma ARUBI

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ARRI - LAND speculators in Osubi community in Okpe council area of Delta State have sold large portions of the land granted to the Delta State Government by the Shell Pe t r o l e u m D e v e l o p m e n t C o m p a n y, S P D C , f o r t h e expansion of the Osubi Airstrip.

Former Special Adviser to Governor Emmanuel Uduaghan on Land Security, Chief Sherrif Oborovwori, disclosed this to Sweetcrude recently, warning those building on the land to desist in their own interest as the government is sure to pull down such buildings at the appropriate time.

He said the community is desirous of assisting the state

government to see the project through and expressed regret that those buying the land and building on it are non–indigenes and they are sure to lose their money and homes as they would never be given any Certificate of Occupancy.

The Osubi community Chair man, Comrade Igho Omatagiren, told Sweetcrude that a large portion of the land has been fraudulently sold to unsuspecting buyers and the sales is still on-going. He further revealed that sand miners are also not giving the government land any breathing space either as they have embarked on aggressive mining of the land for their personal benefits.

51 Samuel OYADONGHA

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he KEFFES h o s t communities, an acronym for Koluama I & II, Ekeni, Fish Town, Foropa, Ezetu I &II and Sangana located on the Atlantic fringe of Southern Ijaw and Brass local government areas of Bayelsa State had cause to celebrate last month, when Chevron Nigeria Limited, CNL, unveiled projects worth N482m in their domain.

The projects sited in these far flung communities which are been taken for granted in the more fortunate urban settlements, could best be described as luxury for the people of the backward settlements.

In spite of their location in the deep mangrove swamp of the delta, and enormous tourism potentials, these oil rich but backward fishing settlements lacks both state and federal presence.

Most of the natives are sea farers whose immediate neighbours are the alluring sea and oil manifold, platform and gas flare furnace.

Though the communities are strategically located in the deep swampy mangrove with enor mous potentials, if properly harnessed could have made them a tourist’s destination and source of income to the state and also boost the economy of the local populace.

But sadly, the communities are yet to be linked by road and could only be accessed by water with the result that the natives, most times, prefer to travel to Gabon for business due to its proximity to Yenagoa.

The cottage hospitals at Ezetu 1, Foropa, Koluama 1, and Sangana communities which were built some ten years ago to serve the natives had remained non -functional till date, with result that they are compelled to journey on the turbulent sea to Yenagoa and neighboring Warri to seek for proper medical attention when the need arises.

It was therefore not surprising when the people of the these pre-dominantly fishing settlements, Thursday abandoned their sole trade to witness the inauguration of projects such as teachers’ quarters building with complete furniture, potable water projects, public toilets,

Medical attention

concrete foot bridges, community rest house, installation of transformers, concrete jetty and renovated primary school buildings executed by the Keffes Rural Development Foundation, one of the Regional Development Committees under the Chevron Global M e m o r a n d u m o f Understanding, GMoU. Speaking at the occasion, the Paramount Ruler of Ezetu Pennington Kingdom, King I. N. Igbousa-Oduo X, described the commissioning as a concrete and significant leap in the history of company’s operations in the KEFFES host communities.

Describing the projects as yet another ‘visible expression of commitment of Chevron to the existing cordial relationship with its host communities, he said, “the GMoU model itself,

which could be seen as a rebirth of the new Community Relations Approach, has yielded yet another visible expression of the commitment of CNL and her KEFFES host communities that we are witnessing here today and by implication, creating a peaceful business environment for the mutual benefit of all stakeholders.”

“We seize this opportunity to convey the warm and appreciative feelings of the people of the KEFFES communities for this great milestone. This milestone is reached as a result of our communities’ commitment to

maintain peace in order to achieve sustainable infrastructural development that is relevant to our peoples’ need.”

He lamented the near absence of government in the communities and

pleaded with the authorities to invest more in the communities given their disadvantaged position in the distribution of development projects.

In his remarks, the chairman of KEFFES Rural Development Foundation, Mr. Christopher Tuduo, commended Chevron for bankrolling the projects even as he called for increase funding to enable the foundation embark on more development projects that would benefit the communities.

He also called for greater state government and Niger Delta Development Commission participation in the funding of development projects in the area.

Inaugurating the projects, Chevron General Manager, Policy, Government and Public Affairs, Mr. Femi

Odumabo, said the successful implementation of the projects reinforces the GMoU Community Engagement model as a vehicle for sustainable s o c i o - e c o n o m i c d e v e l o p m e n t i n communities around its operations.

Represented by Elijah Ebikikoro, GMoU Team Lead for Keffes, Odumabo, said, the successes recorded in the implementation of the GMoU in Keffes and in other clusters communities bordering our operations in the Delta region have shown that with support, the communities can drive their development process.”

He described as immense the socio -economic benefits of the community driven GMoU saying, “as a result of the efforts to date, a value chain is coming together.

52 Traditional rulers decry abandoned projects Emma ARUBI

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Oil Spillage

Samuel OYADONGHA

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h e t i n y settlement of Ikarama, one of the several communities in Okordia clan in Yenagoa local government area of Bayelsa State, may not be known to many people given its location and rustic out look. Yet, Ikarama is one of the several oil and gas rich communities in the state which very existence is being threatened by incessant oil spills and fire outbreak due to exploration activities.

Over the years, the natives of this serene community located on the bank of the Ta y l o r C r e e k , w h o a r e predominantly farmers and fisher men, have had to contend with oil spills and fire

out break leading to the scorching of their farmland as well as the pollution of their creek which not only serve as their source of water, but also their means of livelihood.

S W E E T C R U D E investigations, revealed that the community had suffered no fewer than twelve oil spills and two fire outbreaks in the last four weeks, most of which are believed to have been sabotage and few others blamed on corrosion.

A first time visitor to this rustic community will be taken aback by the several patches of scorched vegetation as against the luxuriant vegetation the rainforest is known for as well as crude oil soaked land when travelling from the Mbiama flank.

Also dead water snails and

fishes could be seen littering the impacted environment and floating in the pond while the spilt crude oil could be seen in large volumes in certain sections of the swamp and pond.

Penultimate week, this rustic agrarian settlement was gripped in fear when an oil spill from a facility owned by the Anglo-Dutch oil giant, Shell Petroleum Development Company, SPDC, resulted in wild fire.

Though no life was lost in the inferno, the oil major was forced to shut in production.

The natives had claimed that they noticed a fresh crude oil spill the previous day along the Okordia/Rumuekpe line, less than 200 metres from the Okrodia Manifold which must have triggered the huge inferno..

The Anglo-Dutch oil giant responded swiftly by deploying fire fighters to the scene of the raging inferno and succeeded in containing it.

While the natives had insisted the cause of spill was not as a result of third party interference and that it was corrosion, an industry source alleged that the spill was caused by illegal third party interference (sabotage).

Just as the people are trying to pick the pieces of their lives and forge ahead, the community was again engulfed by inferno around an impacted swamp from an old spill which had not been cleaned up.

The cause of the latest inferno said to have occurred Wednesday afternoon at about 5.00pm could not be immediately ascertained as according to a native who simply gave his name as John, “ we only heard a loud bang not knowing it was fire out break from a Shell facility.

A R R I TRADITIONAL Rulers in Uvwie, Udu, Ughelli South and Agbarha-Warri kingdom have appealed to the Delta State Oil producing Areas Development Commission (DESOPADEC) to complete all ongoing projects in their domains.

The traditional rulers made the appeal during the visit of the Commissioner representing Uvwie, Udu, Ughelli South and Urhobos in Wa r r i i n t h e b o a r d o f DESOPADEC, evangelist Johnson Boro to their various palaces which was described as historic and encouraging.

At the palace of the Ovie of Uvwie, HRM Emmanuel Sideso (JP) OON, Abe the first, the Monarch lauded the visit of the DESOPADEC Commissioner describing it as the first of its kind.

The Royal Father who spoke t h r o u g h C h i e f Tu e s d a y Onoge, President General, Uvwie General Improvement union (UGIU) highlighted some areas of need of Uvwie people.

Earlier in his speech, the Commissioner in DESOPADEC, Evangelist Johnson Boro told the Uvwie Monarch and his Council of Chiefs (Ogwedion) that he was in the palace of the Ovie of Uvwie to seek for royal blessing, support and to brainstor m on the way forward for oil communities in the area as directed by the State executive governor, Dr. Emmanuel Ewetan Uduaghan.

The story was the same at the Palace of the Ovie of Agbarha Kingdom as the DESOPADEC Commissioner was guest to Orhifi Ememoh II,the traditional ruler of the kingdom.

T h e A g b a r h a - Wa r r i paramount r uler whose address was presented by one of the palace Chiefs, expressed happiness that the visit of Evangelist Johnson Boro will turn the fortunes of the Urhobos in Warri for the better.

53 Court orders prisons to produce suspect Emma ARUBI

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The Legislators in section Emma ARUBI

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ARRIT H E elders a n d leaders of Ugborodo community in Warri South-West council area of Delta State, Sunday dethroned its community head (Eghare-Aja), Pa. Wellington Ojogor and installed Pa. Pender Nene as the new Eghare-Aja at the OdeUgborodo, their ancestral home.

Similarly, the people have appealed to the National Assembly to pay an official working visit to the erosion ravaged oil-rich Ugborodo community, major host to Chevron operations in West Africa to enable them see, first hand, the damages being wrecked on their communities by the vagaries of the Atlantic, saying that the House of Representatives Committee members that visited U g b o r o d o o n F r i d a y, November 11, 2011 did not step out of their boats to meet or see the people and the abandoned shoreline protection job to appreciate

‌ Request legislative intervention the enormity of their plight.

Ugborodo Community Trust Vice-Chairman, Mr. Isaac Botosan, who spoke to Sweetcrude on the installation of Pa. Pender Nene as the new Eghare-Aja, said the elders skillfully played them out of the installation scheme to forestal the leakage of information to the public, because the youths have sometime in September frustrated their plan.

He expressed regret that the for mer Eghare-Aja , Pa. Wellington Ojogor has for some time abandoned the community and ran to Warri while Pa. Pender has been performing his traditional duties.

Pa. Ojogor was alleged to have been whisked away from Ugborodo in a commando-like style by security men in

company of some of his children on August 26 and has since not returned after over 90 days.

Pa. Wyne W. Agba who performed the traditional rites of installation in a brief ceremony according to Mr. Isaac Botosan, stated that Ugborodo customs and traditional duties as assigned to Pa. Ojogor was suffering and the situation needed to be urgently corrected especially as the year runs to an end, saying that the people have elected their head and so it shall be.

Pa. Wyne Agba therefore called on all Ugborodo indigenes, government agencies, security agencies, oil majors and servicing companies operating in Ugborodo land to accord Pa. Wyne Agba all the due

privileges of the his new office.

Speaking to Sweetcrude on why the House of Representative team that visited Ugborodo did not come down to the community to meet the people, see and inspect the abandoned shore protection project in the community, the Member representing the Warri Federal Constituency in the team, Hon. Dan Reyenieju said there was no need for that as they had a very good view of the effects of sea erosion on Ugborodo land from their boats, saying that he was not out to play politics with the assignment.

He stated that he was determined to ensure that the shore protection project enters the 2012 budget by bringing the House members to see things for themselves.

ARRI- A Delta State High Court sitting at Otor-Udu has ordered the Deputy Comptroller of Prisons at the Ogwashi-Uku prisons, to produce before it, the Managing Director of Mustard Seed Micro-Investment Limited, Pastor Glory Abrefera, detained over alleged N42.5million fraud by the Economic and Financial Crimes Commission, EFCC. The court presided over

by Hon. Justice (Mrs) Azinge, also threatened to issue a warrant of arrest on the Deputy Comptroller. if he fails to produce the wonder bank chief on the next adjourned date of November 28, 2011.

This order follows failure by the prison authorities to produce the bank chief on two previous occasions as ordered by the court on September 26 and November 9 respectively in blatant disregard to court orders.

Three aggrieved customers of the investment scheme had petitioned the EFCC that led to his arrest and arraignment and detention since December last year at the Okere prisons from where he was moved to the Ogwashi-Uku prisons.

All his known business outfits and eateries in Delta state has been sealed-up by the EFCC until recently when they were re- opened for operations where payments are made into a special account.

54

Samuel OYADONGHA

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or indigenes of Ezetu I, Foropa, Koluama I and Sangana on the Atlantic fringe of Southern Ijaw and Brass local government areas of Bayelsa State this is certainly not the best of time given the speed at which they are losing their ancestral land.

Unless urgent remedial steps are taken, these serene rural fishing settlements which tourism potentials if properly harnessed could turn out to be money spinner for the state government might be lost to the surging sea.

Sweet Crude gathered from the troubled natives that these oil and gas rich enclave had over the years lost a substantial part of its landmass to the sea.

Sadly, these communities which are oil and gas rich and have contributed significantly to the revenue profile of the country and Bayelsa State are lacking both state and federal government presence except for few Nigerian soldiers manning oil facilities in the deep swamp.

The only vestiges of development in the area are projects put in place by Chevron Nigeria Limited through the Global M e m o r a n d u m o f Understanding (GMoU) it entered into with the host communities.

Sweet Crude investigation revealed that coastal erosion menace is not limited to the above mentioned

communities alone as there are several others along the Atlantic shore facing the same dilemma.

An indigene of Koluama, who simply identified himself as Omie John recalled how the entire community was submerged some decades ago forcing them to migrate to their present abode.

According to him, the site where the offshore Pennington platform is presented located was once on a dry land.

Aside the coastal erosion threatening the very existence of the hapless natives’ investigation further revealed that they are also contending with the absence of health facilities to cater for their health needs.

Surprisingly, Chevron it was learnt had remained the only source of development agent for the natives as witnessed recently when it commissioned projects ranging from teachers quarters building, potable water projects, public toilets, concrete foot bridges, community rest house, installation of transformers, concrete jetty and renovation of primary school buildings in the communities.

The projects estimated at N482m were executed by the Keffes Rural Development Foundation, one of the Re g i o n a l D e v e l o p m e n t Committees under the c o m p a n y G l o b a l M e m o r a n d u m o f Understanding (GMoU).

Corroborating Sweet Crude

finding, the Paramount Ruler o f E z e t u - Pe n n i n g t o n Kingdom, King I.N Igbousa Oduo X described the coastal erosion menace as worrisome and called on the federal/state governments and other relevant agencies such as the Niger Delta Development Commission (NDDC) to come to the aid of the communities.

The royal father noted that apart from putting in place control measures to combat the ocean threat he also called for the construction internal road and drainage network to stem the threat.

His words, “some key challenges confronting our communities include the threat of erosion, lack of health facilities to cater for our health needs.

Peaceful protesters

Emma ARUBI

W

ARRI - AS daredevil robbers continue their onslaught on residents of the oil city of Warri, Delta state, two workers of the Vanguard Media Limited office, escaped death by the whiskers as a stray bullet in a gun duel with policemen pierced through one of the offices and landed at the office of the regional editor.

The robbers, who wore Mobile Police uniforms, engaged the Police from the JJC Ginuwa axis of the road directly facing Vanguard office, thus forcing the workers to lie flat on their stomach to avoid being hit by stray bullet.

The incident which held traffic to a standstill for more than 30minutes along the ever busy Warri /Sapele road brought out the Mobile Po l i c e m e n c l o s e t o Vanguard office on guard duty at a new generation bank into the major road, to scare off the robbers from gaining entrance from their JJC road position.

Vanguard gathered that, when it became obvious to the thieves that they could neither go back or forth in their escape bid due to security cordon, they melted into the Agbarha community area causing residents to scamper for their dear lives.

The security agents later drove into the Ukpokiti outlet of the area in their bid to fish out the runaway robbers without success.

Meanwhile, the Vanguard workers, namely Mirabel and Nelly said they would organize a Thanksgiving service to God to celebrate their being alive to tell the story of the ugly incident.

Incidences of bare-faced daylight robbery has become the in-thing in Warri recently in view of the coming Yuletide festivities, even as the mother of the Delta State Commissioner for oil and gas, Madam Gbubemi who was kidnapped Sunday morning was released Wednesday morning without ransom following the capture of some persons related to the suspected kidnappers.

55

The Question johniyene@yahoo.com

Developing our societies through qualitative democratic culture

I

Water project

Itsekiri, Urhobo task DESOPADEC on projects completion Emma ARUBI

W

ARRIT H E Itsekiri a n d Urhobo ethnic nationalities in Delta State yesterday task the board and management of the state oil intervention agency, DESOPADEC on ensuring that all projects awarded in their mandate areas are executed to the letters.

They also charged the Commission to ensure that only projects whose cash allocation is readily available are awarded to enable the contractors to mobilize to site for job execution, saying that where jobs are awarded to a known community contractor who declines to mobilize to site due to lack of mobilization fees, the communities readily holds that contractors responsible for undue delays in job execution.

Both ethnic nationalities made these remarks at the DESOPADEC Town Hall meetings held for the Urhobos of Delta Central and Itsekiris of Delta South district at the Wellington hotel, Effurun and the Mismate hall at Chief Eyewoma residence, Esisi road, Warri.

Job abandonment is a function of lack of funding from the Agency with banks not willing to finance such project due to DESOPADEC failure to honour their financial obligations to their contractors They stated that job abandonment is a function of lack of funding from the Agency with banks not willing to finance such project due to DESOPADEC failure to honour their financial obligations to their contractors.

One of the women argued that women can be easily empowered with little cash loan to set up their business and even trained through vocational centres while the youths should be trained at skills acquisitions centres for

various trades.

President of Itsekiri Development Association, IDA, Comrade Newuwumi Omolubi, on his part advised the Commission to drop all Engineers monitoring and issuing certificate of job completion for jobs not executed in the Itsekiri areas, even as he charged the Commission to dismiss any staff of the agency deployed to Itsekiris rural areas that declines to resume work.

He said what the Itsekiris needed most was land reclamation in their areas.

President of the Itsekiri Natioanl Youth Congress, INYC, Hon. David Tonwe warned that any contractor that further defaults on project execution in Itsekiri land would have his contract terminated henceforth.

C h a i r m a n o f DESOPADEC, Mr. Kpogho assured the people that all their submission are well taken, noting that commission was desirous of getting their input into the 2012 budget in a bottom –up manner to ensure that only projects requested by the various ethnic groups are awarded to them as legacy projects.

remember how as a young teenager I was caught within the grips of what my friends and I now call the “Kodendiara effect.” It was Camara Laye, the author of “The African Child,” who introduced our young African minds to the delicious mystery of Kodendiara. Although in Ijawland newly born males are circumcised on the eighth day after their birth, we longed to have the more traumatic Guinean version which was performed between the ages of twelve and fourteen, in order for us to experience a real coming into manhood with an inevitable meeting with the legendary Kodendiara. Laye depicted an Africa of rolling hills, lush meadows and unspoilt glades, an Africa far less developed than the Europe of the 1950s but nevertheless a much beloved Africa.

The Africa of Camara Laye was going through a process of changes that appear to have scarred her deeply. Having been weaned of the unwholesome practices (cannibalism, piracy, slavery and schism) that almost destroyed them, European societies had imbibed civilisation but still had needs for expanding their pretentious empires. Upon the invitation of Otto von Bismarck, German Chancellor and statesman, the ‘civilised world’ as it was then constituted (the United States opting out) met up in Berlin and partitioned Africa into spheres of influence for the signatory countries. With a few exceptions such as South Africa and apart from the violence required at the points of entry to quell dissent against occupation, violence by colonialists within the African continent was rare and subtle even when applied. Laye’s Conakry was an idyllic society where Africans and Europeans co-existed in a predictable and mutually acceptable pattern with the available infrastructure sparse but also curiously sufficient for the populace. But that was the turning point, the moment of great changes for Africa; the continent peopled by dark skin natives were about to be liberated by her own.

In form the African people have been liberated but the substance of their existence show they have need for further liberation, this time, from their own kind. Apart from Ghana and South Africa, the societies of Africa are governed by political interest groups that mock and force the will of the people. It is very simple logic that leaders whose performances are not reviewed through the ballot do not pursue or advance the preferences of the ballot and the ballot can only attract obeisance where it is effective. The political activists of Laye’s generation took much for granted; they trusted in the inherent goodness of the African to his fellows. There were hardly any futuristic plans to develop the political structures of the societies created by the colonialists, with the result that new interest groups with intents not different from the conferees at Berlin in 1884, hijacked power for their selfish interests. The direct implication of the logic of a weak ballot is the failure of the society.

The gullies on our roads, our inability to generate sufficient energy for our technological advancement, the insecurity on our streets, the slums and unplanned dwelling places, the unwholesome practices of regulatory agencies and the sharp reduction in life expectancy in our societies are all traceable to weak ballots. In Nigeria’s last elections, eligible voters were accredited and told to queue up again to vote. After the accreditation, no one taking the toll of accredited voters, corrupt electoral officers enter accreditation for voters who did not turn up to vote and cast votes for them. The moral behind the Obasanjo-Bello failure is that even those who design a system of electoral fraud can become victims of the system with time.

We can still do it right and justify Camara Laye’s generation’s trust in the intrinsic goodness of the African to his fellows so that even though we may not bring back those green hills, meadows and glades that was the Africa of yore, we can live in orderly, predictable and safe societies in which Kodendiara will only be invoked to chastise errant behaviour in the young.

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