A Rash of Committees for Nigeria's Oil Industry

Petroleum task force: Diezani is on her own

Solid mineral’s contribution to GDP rises to 11%

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A Vanguard Monthly Review Of The Energy Industry VOL 03

MARCH, 2012

N0. 34

Why we can’t build refinery in Nigeria – Shell

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r Malcolm Brinded, the outgoing Executive Director of Shell Petroleum Development Company (SPDC), says the Continues on page 6

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A rash of committees forCriticsNigeria’s oil industry task petroleum minister Identifies conflict

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Contents 4 7 13 18 22 23 27 30 32 38 40 44 46

COVER

A rash of committees for Nigeria’s oil industry

OIL Ribadu says game over for unscrupulous oil industry operators

FOCUS

Kaztec will soon move into deep offshore projects

GAS

CGL steps up campaign on atuo gas

FEEDBACK

Bonga oil spill: RA\FOE findings

POWER

NCP approves states ownership of electricity structure

FINANCE

Vallourec Manessmane

INSURANCE

Nigerian government should commit health insurance commto

LABOUR

My role in PIB committee

SOLID MINERALS

Solid minerals contribution to GDP rises to 11%

FREIGHT

Kaztec acquires $500m vessels

TECHNOLOGY The fuel dispenser

COMMUNITY DEVELOPMENT

Ijaw group threatens to cripple Chevron operation

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or the first time in Nigeria’s history, the oil and gas industry has four special tas k forces and committe es, established by Di ez an i Al i s on -M ad ue ke , th e pe tro leu m minister in an effort to inspire confidenc e in the ind us try, es pe cia lly as it rel ate s t o the management of oil revenues. Past gove rnment’s have a well establis hed reputation for setting up committees, usually composed of cronie s – with little or no effect.

In a sharp reacti on to this development critic s of the petroleum minister have taken her to task, while pointing out that establishment of the task force on petroleum revenue was in direc t conflict with the pro visions of the NEITI Act. To shed more lig ht on the develop ment we spoke with Dakuku Peterside, Chairma n, House of Representative s committee on do wnstream petroleum and he simply said Diezan i Alison Madueke is on he r own.. He also sp oke on a number of other iss ues affecting the ind ustry.

We have kept fait h with coverage of all other spectrum of the Ni gerian energy chain including oil, gas, feedback, insurance, power, insurance, fin an ce , l ab ou r, so lid mi ne ra ls, fre ig ht , tec hn olo gy an d co mm un ity de ve l o pm en t, proving reportage of these sub-sect ors on an unparalleled scale.

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Cover Story

A rash of committees for Nigeria’s oil industry Critics task petroleum minister Identifies conflict Oscarline ONWUEMENYI

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h e r a s h o f committees and special task forces r e c e n t l y announced by the M i n i s t e r o f Pe t r o l e u m Resources, Mrs. Diezani AlisonMadueke may be a grand effort to inspire confidence in Nigeria’s oil and gas industry, especially as it relates to the management of oil revenues, but past government’s have a well established reputation for setting up committees, usually composed of cronies – with little or no effect; more like the Shakespearean maxim: all sound and fury, signifying nothing.

Many industry experts who spoke to Sweetcrudeagainst the background of the rash of committees and task forces view the creation of the ad-hoc bodies as papering over burgeoning cracks on the very pillars sustaining the industry.

One of the major critics of the committees and task forces, ANEEJ, a non-governmental organisation noted that the terms of reference of the Petroleum revenue Task Force is in conflict with provisions of the NEITI Act. The main problem, they say, is the wanton discretionary powers that rest with politicians in the country, whether elected or appointed. In this case, particularly, observers point to the increasingly growing powers of cabinet ministers to conveniently appropriate agencies and departments that play vital roles in ensuring accountability, transparency and equity in the industry.

They note, for instance, how in the last one year the Minister of Pe t r o l e u m Re s o u r c e s h a s

annexed various agencies and departments in the industry that were formerly under the supervision of the Presidency and directly overseen by the Office of the Secretary to the Government of the Federation.

Until the coming of this government last year, agencies that are very vital to the smooth running of the industry i n c l u d i n g t h e Pe t r o l e u m Products Pricing Regulatory Agency (PPPRA), the Petroleum Equalisation Fund (Management) Board and the

Diezani Alison-Madueke P e t r o l e u m Te c h n o l o g y Development Fund (PTDF), were under the supervision of the presidency.

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he movement of these agencies to the ministerial supervision has been criticized as over-reaching, and an effort to expand the frontiers of cronyism.

Some observers have therefore argued that too much discretionary power given to government officials has been the source of favouritism and nepotism, which remains at the heart of the corruption morass the industry wallows in.

But government officials have explained that the decision to move supervisory reins of the agencies to the ministry is a necessary step to enhance their efficiency and performance as well as check acts of malfeasance, fraud, overpayments and related illegalities.

With regard to the PPPRA,

The main problem, they say, is the wanton discretionary powers that rest with politicians in the country, whether elected or appointed

particularly, they noted that the government has over the years run a subsidy regime in petroleum imports where the difference between the cost of importation and the pump price is paid for by the government to pre-approved oil marketing companies and importers. “Over the years, this bill has grown exponentially to unsustainable levels,” Alison-Madueke observed, adding that as

Petroleum Minister, she has been extremely concerned with the figures.

She added that, “Following the recent transfer of the PPPRA to my ministry last year, I have moved quickly to change management and inaugurate a comprehensive reform process which include drastic cuts in the list of importers, review of payments and procedures, as well as massive redeployment of

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staff within the agency.”

Plethora of committees

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n the last two months following the violent protests that rocked the entire country over government’s withdrawal of petroleum subsidies, the Minister of Petroleum Resources has announced the creation of about four committees and special task forces, among other actions aimed at rebuilding confidence of Nigerians and the international community in the management oil resources.

Oil industry observers were confounded when, following the outcry over claims of corruption and malfeasance in the management of the fuel subsidy regime, the minister of petroleum resources invited the Economic and Financial Crimes Commission (EFCC) to “immediately review and investigate all transactions made in relation to petroleum products importation and subsidy payments” over a period of time.

The action by government was in line with its promise to organized labour during negotiations over the removal of subsidy, when it promised to clamp down on alleged acts of corruption within the petroleum industry, critics claim that the minister of petroleum superintended the PPPRA in the last 12 months and should not be the one inviting the EFCC to probe her activities.

Even though the minister claims that the move has presidential approval for the anti-graft agency to review all payments made in respect of subsidies on PMS and kerosene, and “to take all necessary steps to prosecute any incidence of malfeasance, fraud, overinvoicing, and related illegalities in an open and transparent manner,” critics say they don’t expect anything to come out of the exercise.

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eanwhile, the minister of petroleum resources also set up a unit within her ministry to be headed by an independent auditor to review the KPMG and other audit reports on the Nigerian National Petroleum Corporation, NNPC, and other parastatals and to immediately begin implementation of their findings.

“I am en-paneling another unit in my office to begin a comprehensive review of the management and controls

CONTINUES ON PAGE 5

Cover Story

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CONTINUED FROM PAGE 4 within all parastatals and in the M i n i s t r y o f Pe t r o l e u m Resources, including but not limited to NNPC, PPPRA and DPR. Accordingly, I expect a report in 30 days to enable us take further action reforming management, personnel, and other practices and procedures in parastatals within the Ministry,” Alison-Madueke explained.

While inaugurating the Special Petroleum Industry Bill (PIB) Task Force a few weeks later, the Minister said it was a result of ‘listening to the voices of the people of Nigeria when, over the last few weeks, they spoke in unison’ for accelerated reforms in the oil and gas industry, adding that, ‘these reforms will anchor in the on the new Petroleum Industry Bill (PIB)’.

She noted that the committee will work to hasten the passage of the ubiquitous oil and gas bill to replace all past industry legislations, stressing that despite the challenges faced in passing the bill during the previous National Assembly, the government has renewed its determination to work with the present legislature.

Right on the heels of the Special PIB Task Force, the petroleum minister created the National Refineries Special Task Force (NRSTF) to ‘ensure selfsufficiency of petroleum products in Nigeria within a strong framework in the shortest possible time’. The NRSTF, the terms of reference notes, is

Kosmos Ups Stake Offshore Ghana

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A rash of committees for Nigeria’s oil industry This special task force is charged with the review of ‘all management controls within NNPC and other parastatals; design a new corporate governance code for ensuring

He argued that government in recent times, had lost a lot of revenue from the petroleum industry, and needed to block all avenues of waste further mandated to conduct a high-level assessment of the Port Harcourt, Warri and Kaduna Refineries, review all past reports and assessments and produce a diagnostic report complete with a ‘Change Journey Map’. It is also to review the operations of the four national refineries with a view to improving efficiency and commercial viability, among other issues.

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he Minster of Petroleum Resources went a step further to appoint a Special Task Force on Governance and Controls in the Nigerian National Petroleum Corporation, NNPC, and other parastatals within her ministry.

Agbakoba

Ribadu

f u l l t r a n s p a r e n c y, g o o d governance and global best practices in the oil and gas behemoth, as well as design a blueprint for separating policy from operations, and set key performance indices for the corporation and the parastatals, among other functions.

One outstanding point about the many task forces, it must be noted, is that they are populated by very eminent citizens with great knowledge and experience in the private sector, governance and politics, anti-corruption, economy, law, labour and other activities, which proponents of the committees believe will be brought to bear in achieving the various mandates. Notable among the membership of the

committees are a former anticorruption czar, Mallam Nuhu Ribadu, top political economist, Dr. Kalu Idika Kalu, Senators Udoma Udo Udoma and Tunde Ogbeha, among other prominent Nigerians.

Interestingly, the setting up of these ‘special’ task forces have been received with mixed feelings among operators and o t h e r s t a ke h o l d e r s i n t h e i n d u s t r y. T h e M a n a g i n g Director/Chief Executive, International Energy Services, Dr. Diran Fawibe, in a telephone interview, told Sweetcrudethat the task forces are Federal government’s way of “monitoring what is happening with oil and gas revenues, and to ensure that government is not losing money.”

He argued that government in recent times, had lost a lot of revenue from the petroleum industry, and needed to block all avenues of waste.

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ut a non-governmental organization, the Africa Network for Environment and Economic Justice (ANEEJ) has argued that the plethora of committees that have been set up by the minister are mere duplication of functions that are hitherto undertaken by government agencies, and may have rendered those agencies redundant or irrelevant. The Executive Director, ANEEJ, Rev.

David Ugolor said that while the appointment of the task force may enhance probity and accountability in the operation of the petroleum industry, ‘it also underscores the mass protests that swept across the country calling for reforms in the nation’s oil and gas sector’. He added that the committees set up by the minister are ‘more like desperation for a big cover up’.

According to the NGO, “The number of committees and Task Forces set up by the Minister since President Goodluck Jonathan’s national broadcast, which saw to the end of the mass action, including inviting the Economic and Financial Crimes Commission (EFCC) to investigate the activities of the ministry, while she still presides, even as the National Assembly is probing the affairs of the ministry with startling revelations tumbling in from her principal staff, is indicative of a rudderless system and national malaise.

“The multiplicity of committees and Task Forces reinforce the fear Nigerians have in the sector and point to the fact that the passage of the Petroleum Industry Bill (PIB) devoid of sector encumbrances remains the panacea to the deep rooted corruption in the oil and gas sector in Nigeria.”

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osmos Energy has exercised a right under the existing Joint Operating Agreement to acquire the participating interest of Sabre Oil & Gas Holdings Limited in the Deepwater Tano Block, offshore Ghana.

The purchase price is e s t i m a t e d t o b e approximately $365 million, with up to an additional $45 million contingent upon achieving certain performance milestones.

Following closing of the acquisition, Kosmos’ interest in the Deepwater Tano Block will increase from 18 percent to 22.05 percent. Kosmos’ interest in the Jubilee Field will increase from 24.1 percent to 25.8 percent.

Brian F. Maxted, President and Chief Executive Officer, s t a t e d , “ We f e e l v e r y fortunate to have an opportunity to grow our interest in what we believe are some of the most valuable assets in West Africa at a compelling price. This transaction adds existing production at Jubilee, enhances our stake in the next oil development offshore Ghana, and increases our exposure to the significant Deepwater Tano exploration program in 2012.

We have great belief and confidence in the quality, value, and upside of our discoveries and the further potential of the Tano basin petroleum system.”

Closing of the transaction should occur in the second quarter of 2012, subject to a definitive transaction agreement, customary closing conditions and necessary government approvals. The Company anticipates funding the purchase price through a combination of cash on hand and borrowings. The effective date of the acquisition is January 1, 2012.

Kosmos offshore rig

Cover Story

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A rash of committees for Nigeria’s oil industry CONTINUED FROM PAGE 5

Revenue taskforce otwithstanding the parade of stars in the revenue taskforce including Ribadu and Olisa Agbakoba, the NGO expressed concern about the absence of the Nigeria Extractive Industries Transparency Initiative, NEITI, which is statutorily saddled with the responsibility of managing revenue transparency in the extractive sector. “In other words, the terms of reference of the Task Force conflicts with the NEITI Act,” it added.

It said further, said, “The objective of the committee summarizes the five (5) objectives of NEITI as stated in section 2(a-e) of NEITI Act 2007.

Section 3(f) of the NEITI Act 2007 empowers NEITI to monitor and ensure that all payments due to the Federal Government from all extractive industry companies including taxes, royalties, dividends, bonuses, penalties, levels and such like are duly made. This is also reproduced in the terms of reference of the Ribadu-led task force, which is mandated to take all necessary steps to collect all debts due and owing: to obtain agreements and enforce payment terms by all oil industry operations.”

Besides, the NGO noted, “NEITI being established by an Act of the National Assembly and the taskforce being established by the Minister of Petroleum raises the question of who will be accountable to Nigerians in the case of corruption and absence of transparency in the sector.”

But again, Fawibe argued that there is no conflict of responsibilities with NEITI, but rather complementary, saying, “The specific duties of NEITI have been taken care of by the law. But when you have specific objectives, government has the responsibility to set up a taskforce to complement the existing system and not to have overlap of functions.”

Besides he added that NEITI is backed by the law, its functions are superior to those of the task force.

Also, “The terms of reference of the Task Force is silent on their tenure, it only requests them to

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President Goodluck Jonathan

make monthly reports to the Minister. Will the Task Force last forever or what is the time frame for their operation?” ANEEJ wondered.

Meanwhile, a member of the Special PIB Task Force and President of the Trade Union Congress, TUC, Mr. Peter Esele has explained the reason for his non-participation in the meetings of the Special Task Force, so far, calling the formation of various task forces and committees to tackle the rot in the petroleum industry a sign that the authorities had failed.

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ccording to Esele, “I do not think that we need all of these task forces and committees that are popping up all over the place, especially since the protest by Nigerians against the removal of subsidy.

Most of these committees are simply duplicating certain roles and duties of agencies and organizations that have been in existence.

“Particularly, the one on Petroleum Revenue Special Task Force, which is charged to do what the Nigerian Extractive

Why we can’t build refinery in Nigeria – Shell CONTINUED FROM PAGE 1

because I was not convinced that it was the right thing to do; I felt the creation of the task force was unnecessary in the first place. I also had to make certain what PIB document we would be discussing, given that we know there have been different PIB documents flying all over the place.

“Also, I felt I needed to consult with my constituency (labour and civil society) before I make myself available for the Task Force. It is vital that before I sit in that committee that I have a position I represent, and that is the position of organized labour and the civil society.”

Perhaps, the most virulent critique of government’s disposition to special task forces is the former Chairman of NEITI, Prof. Assisi Asobie.

Asobie who took a swipe at the Federal Government for paying lip service to the quest for t r a n s p a r e n c y a n d accountability, saying “the gap between rhetoric and practice is gargantuan.”

Prof. Asobie, who spoke on “EITI Implementation and the Federal Gover nment of N i g e r i a ’ s Tr a n s f o r m a t i o n Agenda” at the NEITI national

The multiplicity of committees and Task Forces reinforce the fear Nigerians have in the sector and point to the fact that the passage of the Petroleum Industry Bill (PIB) devoid of sector encumbrances remains the panacea to the deep rooted corruption in the oil and gas sector in Nigeria I n d u s t r i e s Tr a n s p a r e n c y Initiative (NEITI) has been doing. All the government needed to do was to go back to several audit reports produced by NEITI to see the missing revenues, and gaps in the management of the oil and gas resources in the country.”

According to Esele, “One of the reasons I am yet to attend any of the three meetings held by the Special PIB Task Force so far, is

conference in Abuja, said full implementation of the provisions of the NEITI Act 2007 remains the most veritable means of combating corruption in the nation’s oil and gas industry.

“Transparency is not about setting up committees and task forces to verify revenue payments and receipts. It is the actual disclosure of receipts by government and payments by

company cannot build a refinery in Nigeria because there are surplus refineries across the world.

Brinded, who is in-charge of the Upstream International unit of the c o m p a n y, m a d e t h e statement in an interview with Nigeria State House correspondents, after a farewell visit to President Goodluck Jonathan at the State House.

The out-going Shell chief in Nigeria, who led a delegation to the State House, Abuja, said rather than build new refineries, the company was divesting from those it had interest in around the world.

“With respect to downstream, two comments there. Shell is divesting from refineries all over the world because there is a surplus of refineries; we no longer own any refineries even in the United Kingdom.

“I will also say because of the surplus of refineries available in a way, one has to look very closely whether building new refineries is a good investment for anyone not just for Shell but for countries involved.

“In today’s world, not looking at the past but where we are today, there is surplus of refinery capacity which essentially means many refineries in the world run at a loss.

“Which also means one can get refined products back again and pay very little for it to be refined,’’ he said.

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rinded said that building refineries was no longer profitable and that informed the company ’s decision to invest in the gas sector.

According to him, Shell would continue to invest in the development of the gas sector, adding: “I do believe that investment in the d o w n s t r e a m s e c t o r, especially gas sector in Nigeria, as I touched on, is very important.

“Nigeria has huge resources of gas that have yet to be unlocked and the potential to add to that gas not only in power but in other ways in the country.

“I think there are a lot of opportunities for Nigeria and for Shell in Nigeria and the potential much more than to consider refining.’’

Oil Ribadu promises game over for unscrupulous operators in oil industry

igerian CONTENT INITIATIVE Dr. Ibilola Amao

Can we update NOGICD Act and pass the PIB simultaneously

Oscarline ONWUEMENYI

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BUJA – The former Chairman of the Economic and Financial Crimes Commission, Mallam Nuhu Ribadu has said he was prepared to do his best to flush out unscrupulous operators in the nation’s oil and gas industry.

He made the statement on Tuesday during the inauguration of the Petroleum Revenue Special Task Force by the M i n i s t e r o f Pe t r o l e u m Resources, Mrs. Diezani AlisonMadueke, in Abuja.

Ribadu, who chairs the newlyformed task force to ensure transparency and accountability in the management of oil and gas revenues in the country, noted that so many Nigerians had suffered needlessly due to the corruption in the industry.

According to him, “Nigeria is today at a crossroad, we are at a junction. We understand the constitution of this task force as part of the effort to connect the public and the administration to newer levels of accountability.

“If you ask the average Nigerian to assess the conduct of operations in the oil and gas industry, many will intuitively put it down to between poor and appalling.”

He pointed out that the moral terrain of the extractive industry has always been defined by the issues of value and appraisal, adding that the concept of ‘ resource curse’ was not invented in abstraction.

“The task, however, is that in the effort to re-invent our country, we must reach to the elevated moral standards of public conduct that brings value to our people and the broader Nigerian people of citizens who seek nothing other than a desire for a country defined by higher ethics and noble norms.

“Let me assure the Minister, President Jonathan, and all Nigerians that we shall work diligently to meet the expectations of Nigerians. We shall seek to promote a new ethics by promoting values that support a new dawn of business conduct in the sector, so that those who play by the rules will enjoy all the best support, and the unscrupulous players will get the red card.”

Ribadu further warned operators that do not play by the rules that “the game is over.”

He acknowledge that part of

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Ribadu the work of the task force as “helping to design a national memorandum for promoting norms of fairness in the business of an important industry in the life of our national economy, which can only be a win-win scenario for the Nigerian oil and gas industry, the operators and the international community.”

He added, “Part of the challenge of moving forward and breaking new grounds is to understand the imperatives of constantly renewing faith with our fellow citizens by empowering them with values of public accountability and

Our purpose is to enhance the commercial and technical viability of the sector, inculcating full transparency and accountability, thereby ensuring value for money for the people of Nigeria responsibility.

“It is also by laying down communication platforms that strengthen their decision making processes in a bid to make governance more transparent and certainly more accountable. I must say how honoured we are by this national call, and how prepared we are to do our best to make a success of this assignment.”

The former anti-graft czar appealed to Nigerians with information that will make the

work of the task force successful to see it as a moral duty to provide such information, adding that, “ we want Nigerians to participate throughout this process. It is going to be an open and transparent process and we encourage Nigerians to participate.”

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he Minister of Petroleum Resources, Mrs. Diezani Alsion-Madueke, in her remarks earlier stressed the “various competences and moral texture that members of the task force bring to the table in this immensely important national assignment.

“I must reinforce the enormous professional qualities of the men and women that have signed up to do this job and bring value and balance to the nation in this lifeline sector of our economy, that has been the basis of so much contention and needless grief for many Nigerians.

The Minister noted that the establishment of the task force was a major step in government’s efforts to reform and restructure the oil and gas industry by creating more accountability and judicious management of resources from the industry.

According to her, “Our journey to transformation is irreversible.

Our mission is to transform the Nigerian petroleum industry, and in doing so to change the way that business is currently done within the sector. Our purpose is to enhance the commercial and technical viability of the sector, inculcating full transparency and accountability, thereby ensuring value for money for the people of Nigeria.”

The minister thanked the members for accepting to serve on the committee, pointing out that some of them have sacrificed so much to be part of the process.

he delayed passage of the PIB has a grievous impact on the psyche of all players in the Nigerian Oil and Gas industry. The passage of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act, almost two years ago, heralded a gust of activities, plans and pronouncements most of which can not be actualised without the appropriate projects. With Fiscal Terms set to change with the PIB, most investors have shied away from Nigeria and turned their Foreign Direct Investment to more stable and predictable countries such as Ghana and Angola.

As we begin to look at clause 102, that states: “subject to the approval of the Minister, the Board shall conduct a review of the Schedule to this Act at such intervals as it may determine but not later than every two years with a view to ensuring a measurable and continuous growth in Nigerian content in all projects, operations, activities and transactions in the Nigerian Oil and gas industry for onward transmission to the National assembly” This implies that we should expect some positive changes that would not only correct the gaps in the schedule but also correct the anomalies in the letter of the Act by the time that the Ministers amendment has passed through the legislature.

Indeed these are exciting times for the Oil and Gas industry.

We should as a minimum expect: 1.

The schedule to capture: man-hour, tonnage, volume, area, liters, length, numbers, usage, contract, numbers as secondary to spend. All the independent units of measurement save spend must be secondary to and tracked alongside spend. Spend must be maintained as the primary yard stick for measuring Nigerian Content as “in-country” spend is critical to value addition. All other units can be slashed and measures as secondary values for historical and analytical references.

2.

Harmonisation of the line items in the schedules of the Act with that on the NIPEX portal and the DPR activity categorization is critical for performance tracking in license re-issue and vendor development.

3.

Inclusion of areas that critical to the general wellbeing of Nigeria and Nigerians Products Transportation, Marketing and Trading is necessary.

A good question that we should be asking ourselves is when would Nigeria begin to trade finished products in its own spot market? Neither has Nigeria so much as exported barrels of finished products nor traded crude on the spot market for the maximum value and return on investment possible?

The Act must go beyond first consideration to auditing the usefulness of first consideration. What have been achieved by those that were awarded blocks in the past to alleviate poverty and create jobs through effective and efficient optimisation of our natural and human resources? We would like to see more of Iinvestment opportunities and asset ownership (factories, industries, machines, equipments etc.), marine vessels, Rail, waterway that are privately owned with the ownership tied to the execution and successful completion of Oil and Gas projects and contracts. The need to track spend, “in-country” investment, visible assets etc can not be over-emphasised in the implementation of Nigerian Content.

The long awaited PIB must provide tax incentives and fiscal terms that would encourage expenditure on infrastructure (Fabrication Yard, roads, bridges, water, electricity, residential estate, schools, hospital), Education and employment of youths, linkages to critical sectors of the economy such as IPP (Gas utilization), Downstream (Refining, Petrochemical, Chemical, fertilizer), LNG, LPG. We need to tie Schedule of the Act to the development of the iron & steel (Ajaokuta & Aladja) industries in Nigeria or we have not started expanding the envelope of growth and development for the application of any strategic thrust. We are yet to determine the role that would be left for Nigeria and Nigerians to play in the scheme of things in the Gulf of Guinea?

Oil

8 No multiple copies of PIB – NNPC Yemie ADEOYE

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Support Local Business Oil drillers

Operators score content implementation high Clara NWACHUKWU

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indigenous operators have scored

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implementatio

n of the implementation of the Nigerian Content Act 2010, high.

The operators, who took turns to give their assessment of the implementation provisions of the law, said many indigenous companies have recorded significant growth since the Act came into effect.

At the recent NOG 2012 conference in Abuja, while the international oil companies, IOCs, spoke about their Nigerian content development programmes, citing specific projects with high level content, the indigenous operators looked at the implementation based on the growth of the indigenous sector.

IOCs content development Underscoring the success of Shell companies in local content development, its General Manager, Local

Content, Mr. Igo Weli, said the Anglo-Dutch company is constantly engaged in a number of activities to p r o m o t e c o n t e n t development.

He said that such activities are based on the premise that “Nigerian Content development is the pivot for industrial and economic growth and stability.”

Others present at the Local Content Measurement: C h a l l e n g e s a n d S u s t a i n a b i l i t y s e m i n a r, which was chaired by the Executive Director, Total E&P Nigeria, Dr. Kingsley Ojoh, also included, the General Manager, Nigerian Content Development, Chevron N i g e r i a , M r. Ra y m o n d Wi l c o x ; a n d t h e Sustainability Coordinator, Saipem Contracting Nigeria, Ms. Joy Oserohwovo, who said her company had spent up to $9.2billion training local employees.

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ach of them took turns to say how much of content development and value addition their respective companies have brought into the industry for overall economic growth.

Some of the indigenous operators who debated on the subject agreed that the Content Act is the pivot for their recent growth in the industry Indigenous operator ’s perspective Some of the indigenous operators who debated on the subject agreed that the Content Act is the pivot for their recent growth in the industry.

The Technical Director, ERHC Energy, Mr. Adebanji Babarinde, said, “ERHC attained its current levels of success because of the Nigerian Content Act. The law gave local entrepreneurs the confidence to go into areas hitherto monopolised by multinationals.”

On his part, the Development Manager, Delta Afrik, noted that over 700 Nigerians are engaged in

various industry projects being handled by the company. “This is due to functional partnership among government agencies, the IOCs and service companies.”

But looking at the challenges impeding indigenous growth in the sector, the Sales/Marketing Manager Aker Solutions, Mr. A n t h o n y O ko l o , u r g e d government to reduce the contract approving cycle for projects.

“If a company takes about two to five years to utilise a local content programme, the company will die off before the next contract comes in.”

8 February 2012, Sweetcrude, LAGOS THE Nigerian National Pe t r o l e u m C o r p o r a t i o n (NNPC) has denied the assertion of most Nigerians and stakeholders in government and oil sector that the Petroleum Industry Bill (PIB) currently before the country’s parliament has been serially multiplied.

The Group Managing Director, NNPC, Mr. Austen Oniwon, made the assertion in response to questions from delegates and journalists at the just-concluded Nigeria Oil and Gas (NOG) 2012 conference in Abuja.

According to him, there is just one document submitted

by President Goodluck Jonathan to the National Assembly for deliberations prior to approval.

"It is however important to note that the submission of this bill generated a lot of controversy that brought about a public hearing which resulted in every interest group coming up with s u g g e s t i o n s a n d modifications, that is probably what is been seen by the public as multiplicity," he said, adding : "The PIB is just one and it is the same one submitted to the National Assembly by Mr. President.”

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owever, it would be recalled that only recently the Senate President, Senator David Mark, claimed that he had about three versions of the bill on his desk and that left him at a loss on how to proceed.

The GMD, who insisted that there is only one version of the all-important bill, however, used the opportunity to disclose that other IOCs will benefit from the federal government renewal of old oil licenses, which it started with Exxonmobil.

Specifically, the NNPC boss said that all licenses awaiting renewal would be dealt with expeditiously within the next couple of months.

Speaking on the contracting cycle that has been a serious factor affecting the oil sector in Nigeria, Oniwon said the current system is a big improvement on what it used to be, but that the government is doing everything possible to ensure it reduced the bureaucracy involved in contract processing in order to achieve a 45-day processing period.

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9

Local content will impact other sectors – NCDMB boss Wins man of the year award

CSOs caution against politicising NEITI working group Kunle KALEJAYE

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Oil refinery

Oscarline ONWUEMENYI

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BUJA - The E x e c u t i v e Secretary of the Nigerian Content Development and Monitoring Board, NCDMB, Mr. Ernest Nwapa, said that the effects of the Federal government’s local content mandate was already being felt in other sectors of the economy.

Nwapa, who said this last week in Abuja, when he was honoured with the Man of the Year award by an international energy publication, The Oil and Gas Year, TOGY, added that the Board was prepared to notch up its activities in the coming year.

According to him, “The Nigerian Content law is designed for the oil and gas industry, but as a concept and philosophy, it covers the entire country such that even without our doing much in that regard, the effects are already being felt across other sectors of the nation’s economy, including the financial sector among others.

“What we are doing is to change people’s behavior and attitude; once people begin to see that we are focusing on the right things and that we are getting results, we believe that on its own the other industries

will begin to adopt the local content philosophy.”

He noted, for instance, that in the marine industry, the Board has made a lot of progress with operators of the ser vice vessels.

“However, we are still working on the big vessels that carry crude to make sure they adopt fully the nation’s local content policy. We are also looking at the area of component manufacturing, towards making sure that we manufacture components in Nigeria, so that even when local contractors get jobs they don’t rush off abroad to get the components they need,” he noted.

According to Nwapa, the journey to spread the philosophy of local content development in the nation’s oil and gas industry over the past few years has been relatively successful, as it has been challenging.

“Local content is a positive concept, and even people who don’t agree with it initially would begin to see it is indeed valuable. Having a good knowledge of the industry and having the support of the Federal government makes the work so much easier. But there is still a lot of work to be done, a lot of people that we need to convert, and areas we need to get to. What matters, however,

Nwapa further pointed out That the Board has no intention of resorting to punitive measures to whip oil and gas companies into line, stressing that the policy of engagement was still the best

is that the ship has set sail and once we start cruising, we believe a lot of people will come on board.”

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wapa further pointed out that the Board has no intention of resorting to punitive measures to whip oil and gas companies into line, stressing that the policy of engagement was still the best.

“The model we have used, which has proved to be quite successful, is one of persuasion, collaboration and advocacy. We also place a high premium on demonstrating value and teaching people, which has worked effectively to bring some of these companies around to our viewpoint.

“There are certain aspects of the Local content law that cannot be implemented in the present environment; some things in the Act cannot be achieved under the present circumstance. When you have a failure and you try to correct it and the people get on board, you don’t quarrel with it. We are not interested in raising money for wrong behavior, but we are interesting in correcting the failure.

“Our success at the NCDMB is measured by the work other people do. We recognise that no matter how much we do, if we don’t convince the stakeholders that what we seek to promote would create value for them we won’t achieve

igeria Civil Society Groups, CSOs, have warned the Federal Government against politicizing the appointment of membership into the National Stakeholder Working Group, NSWG, of the Nigeria Extractive Industries Transparency Initiative, NEITI. They argued that depoliticising appointment into the group will lead to effective implementation of initiatives and policies in the extractive industr y, EI, notably the oil and gas and solid minerals sectors.

The CSOs, who gave the warning during a strategic meeting on effective engagement with NEITI/NSWG held in Abuja last week, also noted that the NEITI Act spells out the criteria for the appointment of members into the NWSG, but that these are not being strictly followed.

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he Chairman Editorial Board, Thisday Newspapers, Mr. Olusegun Adeniyi, noted that by law, NEITI/NSWG is not meant for politicians, but for professionals.

“We don’t want people who are affiliated to one political group or the other to occupy these positions; this will allow professionals to carry out their job effectively.”

Accordingly, he said the essence of the meeting is to work out modalities for engagement and setting agenda for taking the whole process forward.

The Executive Director, Civil Society Legislative Advocacy Center, CISLAC, Mr. Ibrahim Musa, in his opening remarks, said the CSOs have been working closely with NEITI to ensure that Nigerians are aware of the provisions of the NEITI Act. “In the recent past we have seen that so much corruption occurred in the sector. We, therefore, dim it absolutely necessary that the Nigerian government become more seriously concerned about the Nigerian people who have been devastated by abuses by oil companies, coupled with the enormous funds that have been

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10 Group alleges lack of transparency in lease renewals

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Exxonmobil building

Exxonmobil advocates partnership for strategic oil sector growth Nigeria would play a key role in world energy demand Yemie ADEOYE

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XXONMOBIL , a major operator in the Nigeria oil and gas industry has urged the federal Government to urgently consider its strategic cooperation with operators of the oil and gas sector if the growth required in the sector is to be achieved.

This is coming on the heels of assertion by the world’s largest publicly traded hydrocarbon company that with Nigeria’s rich hydrocarbon it would play a key role in global energy demand between now and 2030.

Chairman/Managing Director of the company Mr. Mark Ward who dropped this hint recently at the just concluded Nigerian oil and gas (NOG) in Abuja stated that this was in view of the International Energy Agency’s postulation that global energy industry needs to invest more than 200 billion dollars annually between now and 2030 to meet future oil and gas needs.

The oil boss specifically

One reality we face in industry is the long timeline involved in discovering, developing and deploying new sources of energy to meet growing worldwide stated that with the right combination of technology application, investment attracted by globally competitive fiscal terms and public policy support of free trade, transparency, and efficient bureaucracy the sector would increase in growth and opportunities for both investors and regulators.

“It is within our collective power to resolve the issues limiting reserves and production growth in upstream Nigeria, and my perspective is that now is the time for industry and government to partner together to address these challenges.

Since its founding, the Nigeria Oil and Gas (NOG) Conference has engaged businesses , government and civic leaders in the search for

solutions to Nigeria’s most pressing energy challenges. I would therefore like to commend CWC Group for putting this session together and in particular opening up the question of “What’s next” for Nigeria’s Exploration and Production.

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his subject is very vital not only to the future of a resource rich country such as Nigeria, but to the very sustenance of global energy supplies.

So I will attempt to convey thoughts on what ExxonMobil considers as vital ingredients of a successful long term exploration and production program for Nigeria and indeed anywhere in the world.

We as a company have been in Nigeria for over 100 years and

have been exploring and producing for the last 50 years. We also have had operations in just about all the major hydrocarbon basins in the world, so I believe we can bring some perspectives to the question.

One reality we face in industry is the long timeline involved in discovering, developing and deploying new sources of energy to meet growing worldwide demand at a scale that has impact and with an acceptable cost.

Indeed, all of us who have made energy our life’s work understand that the industry moves in long cycles, longterm trends that occur over many years and often up to decades, not days or weeks or months. As an industry, we need to encourage others to look beyond today ’s headlines to recognize and understand and attempt to influence today’s policies that will impact the next decade’s success. while we’re planning our business towards the years 2015, 2020 or even 2030, we must be aware of and participate in the broader public debate that is taking place today”.

eanwhile, a NonGovernmental Organisation, NGO, the Africa Network for Environment and Economic Justice, ANEEJ, has frowned at the recent renewal of expired Oil Mining Leases, OMLs, saying that the move is ill-timed, in view of ongoing probes of the oil and gas industry.

The Federal Government recently renewed the licences for OMLs 67, 68 and 70 held by Mobil Producing Nigeria, MPN, in joint venture with the Nigerian National Petroleum Corporation, NNPC, for another 20 years.

Government also said that effort is in top gear to expedite action on other outstanding oil licences that are due for renewal, belonging to Shell Pe t r o l e u m D e v e l o p m e n t Company, SPDC, and Chevron Nigeria Limited, CNL. Executive Director of ANEEJ, Mr. David Ugolor, argued that the renewal of the expired leases for the International Oil Companies, IOCs, at a period of uncertainty and corruption in the oil Industry was most unfortunate.

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golor noted that it is not in the best interest of Nigerians especially as the Joint Venture agreement terms are shredded in secrecy, which made President Goodluck Jonathan since February 2011, to suspend the renewal of the leases for the IOCs operating in Nigeria, pending the passage of the Petroleum Industry Bill, PIB. The ANEEJ boss queried the w i s d o m t h e Pe t r o l e u m Minister in concealing the terms of the new agreements, seeing as smaller neighbouring oil producing countries like Ghana, post such agreements on its official website before they are endorsed.

According to him, “The secrecy that has shrouded the oil and gas sector is still being perpetrated even in the light of all the efforts and promises of transforming the sector.

He further noted that recent developments in the country as regards the oil subsidy management have exposed the irregularity and huge corruption that has characterised the operations of Nigeria’s Petroleum Industry for many years.

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ExxonMobil expresses confidence in Nigeria’s petroleum Industry

Of oil thieves and a clueless governance

Yemie ADEOYE

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his report takes a critical look at Nigeria’s crude oil production and how a whopping 150,000 bpd remains the exclusive preserve of organised oil thieves while the government seems to be at a loss with strategic ways of nipping this nefarious act of economic sabotage in the bud.…

Yemie ADEOYE SOMETIMES in the year 2011, a major operator in Nigeria’s upstream oil sector raised an alarm over the activities of oil thieves on some of its flow lines running through the creeks of the Niger-Delta and the dent it brings to its operations and the economy in general.

In an effort for this not to be a wolf cry, this operator decides to take both Nigerian and foreign jour nalists on a helicopter over-fly across these danger zones.

Destination was the Cawthorne channel and environs, flight time was about 25 to 30 minutes and all through the flight journalists had the opportunity to visualize first-hand, the daylight rape on Nigeria’s economy by organized criminals whose negative activities currently costs the Nigerian state a whopping 150,000 barrels of crude oil daily.

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gain, on the 6thof February, 2012, the concerned multinational conducted another Helicopter over-fly with some selected journalists out of worry from dwindling production and it confirmed thriving crude theft activities at Tora Manifold, Santa Barbara River, SEGO Manfiold, Awoba, Krakrama, Bille, Cawthorne Channel and Alakiri all in Rivers and Bayelsa states, even as some other connections were made directly to wellheads.

The situation which dealt a deep blow on its operations brought this reaction from the

operator of the line “It is difficult to sustain production in the circumstance as we have to shut down when a facility trips and fix the cause before restarting.

Diezani Alison-Madueke government has neither made any pronouncement or move on this gross anomaly.

Nigeria’s crude oil production is about 2.4 million barrels of oil daily, this is away from condensate which is over 400,000 barrels with potentials of an increase, and inspite of these the country is still facing

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his happened three times just between the 26thand 30thof January. We have increased surveillance of the route so we can detect crude theft activities and respond early to spills, but what is urgently needed is robust intervention at federal, state and local government levels.

We need increased patrols of creeks and waterways, removal of illegal off-take points and dismantling of illegal refineries.”

The shocker in this development is that since it came to the fore that the economy of the nation is being immensely sabotaged by faceless criminals the federal

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the pressing issues of infrastructural development currently affecting the growth of its economy it must urgently take action against massive organised oil theft business, which has been the bane of economic development in the country.

Ian craig, Shells Executive

This leaves so much to be desired especially in the light that neighbouring Ghana has advanced its oil production to about 120,000 barrels of oil daily and the West-African infrastructural decadence and severe economic set-backs, most of which has been traced to clueless leadership that is bereft of the basic ideas required to move the economy forward. It is however sad to note that from these proceeds oil thieves are milking 150,000 barrels every single day.

At the just concluded Nigerian Oil Gas conference in Abuja, Nigeria’s largest upstream operator, Shell told the nation that if it must address

Vice President, sub-saharan Africa who dropped the hint during a technical session at the conference told his listeners that this incidence is currently causing Nigeria about 150,000 barrels of crude oil daily.

This leaves so much to be desired especially in the light that neighbouring Ghana has advanced its oil production to about 120,000 barrels of oil daily and the West-African nation is basking in the

xxonMobil has expressed confidence in the Nigerian petroleum industry, and announced its determination to continue to contribute to the growth of the country ’s hydrocarbon resources for the benefit of the economy.

The Chairman and Managing Director of ExxonMobil Nigeria, Mr. M a r k Wa r d , m a d e t h e assertion recently in Abuja during the signing ceremony of the contract renewal on Oil Mining Leases 67, 68 and 70.

After a painstaking lease renewal negotiation, the Nigerian Government earlier today renewed the oil mining lease 67, 68 and 70 of the Nigerian National Petroleum Corporation and Mobil Producing Nigeria joint venture spanning the next 20 years.

Speaking during the lease signing ceremony recently in Abuja, Nigeria’s Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, expressed commitment to the growth and development of the oil and gas industry.

She averred that the lease renewal marks another milestone in the country’s hydrocarbon industry in accordance to the criticality of the Federal Government’s statutory right in holding oil and gas assets in particular with the implication in investment decisions and on major project delivery.

“I am particularly delighted to welcome you all as we formally renew shallow onshore oil mining leases 67, 68 and 70 for the NNPC, Mobil Producing Nigeria joint venture. I am delighted that after a somewhat lengthy process both parties that is, the government and people of Nigeria and the NNPC/MPN joint venture have arrived at what they consider a mutually fair agreement in which to work together for another 20 years,” Madueke noted.

The minister posited that renewal of leases is in accordance with paragraph 10 and 13 of the first schedule of the Petroleum Act of 1969 cap V 10.

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Content development: Shell sponsors India- Nigeria summit

Of oil thieves and a clueless governance

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Oil thieves

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euphoria of this capacity, making plans towards national development and here in Nigeria the government is not perturbed that well over Ghana’s oil production levels goes to criminals on a daily basis.

This development according to some of the delegates who spoke with Sweetcrude at the conference is sadly the greatest challenge facing the country economically today, even as some noted that there are also other challenges facing the sector like the non passage of the Petroleum Industry bill which is expected to address very serious issues like the tax/fiscal regime amidst other cogent issues currently affecting the sector in Nigeria.

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an Craig had earlier on explained that a typical land-based well costs about $20 million to drill in Nigeria.

But in deep water costs can be well over $100 million, and one well is of course never enough to prove a prospect, you normally need several appraisal wells to be sure that a discovery is viable.

“When you are lucky enough to have a commercial discovery, the development costs and timescales are daunting; perhaps 10 billion dollars for a large integrated oil and gas project. The execution of the project may take 5 years or so and many years beyond that before the initial outlay can be recouped.

There are also political risks.

We have also heard about how the government’s aspirations to significantly grow production have not been realized in the short term In recent years for instance we have witnessed nationalisation in Venezuela, where the government took control of various assets operated by foreign oil and service companies, and in Middle East and North Africa unrest has forced most oil companies to temporarily withdraw from several countries in the region.

In the past week we have seen South Sudan suspend all its oil production and Iran preempting a European ban on importing Iranian oil.

So companies like Shell are n o t r i s k a v e r s e . We acknowledge all of the above risks, and many more and we make every effort to minimize the potential impact. So before we drill in new frontiers we use every available technology and international expertise to improve our chances of success, and before we sink billions of dollars into projects that may take a decade to return the capital, we try to ensure that the necessary fiscal, legal and political structures are in place” he said.

The Oil boss averred further that Nigeria can be regarded

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as a mature province in some regards because fifty years of onshore oil production must surely classify the sector as mature. “ Substantial oil reserves remain onshore but there are non technical challenges to deal with. The militancy which crippled onshore production from 2005 to 2009 has abated but staggering levels of theft and criminality prevail.”

Mr. Craig noted that despite the fact that Nigeria is referred to as a gas province with some oil, the lack of effective market mechanisms and infrastructure in both gas pipelines and the power generation and distribution network has greatly curtailed the development of Nigeria’s gas reserves for domestic use. According to him much more could be done to develop this under used resource for both export and domestic consumption.

The Shell boss stated that contrary to some views making the rounds there is no shortage of investment opportunities in Nigeria, from mature onshore to maturing shallow water to still developing deepwater or gas opportunities abound for

willing investors in the country.

He urged the federal Gover nment to urgently consider its strategic cooperation with operators of the oil and gas sector if the growth required in the sector is to be achieved.

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n a similar vein, Mark Wa r d , C h a i r m a n o f Exxonmobil companies in Nigeria said that it is highly imperative for the federal government to strategically partner with oil operators in the upstream sub-sector if the much required economic growth is to be achieved.

According to him with Nigeria’s rich hydrocarbon it would play a key role in global energy demand between now and 2030.

According to Ward the importance of stable energy policies that support longrange thinking, encourage long-term investment and allow the oil and gas industry to maintain the required momentum therefore cannot be over-emphasized. “We have heard in sessions about the significant position that Nigeria holds in terms of oil and gas resources. We have also heard about how the government’s aspirations to significantly grow production have not been realized in the short term. There have been many reasons brought forward ranging from militancy to lack of funding, time consuming bureaucracy, lack of local capacity, no clarity on PIB. But finding the answers to these questions is Key to

s part of efforts to encourage Nigerian content development, the Shell Petroleum Development Company, SPDC, brought together more than 50 Indian and Nigerian companies to explore areas of collaboration and partnership at a business summit recently held in Abuja bringing together.

About 10 Indian business firms took part in the business summit, thus setting the stage for joint ventures that would create more opportunities in the volume of trade between India and Nigeria estimated at about $9billion yearly.

“The business summit is a welcome opportunity to help drive new partnerships,” said the Executive Secretary, Nigerian Content Development and Monitoring Board, NCDMB, Mr. Ernest Nwapa.

“The growth recorded in the Nigerian economy has not resulted in employment opportunities, so we’re looking for partners to set up manufacturing bases in Nigeria, thereby creating jobs and developing talent and technology. SPDC has done well in providing the connection; last year, it was China, now it is India.”

Agreeing, the General Manager, Materials, National Pe t r o l e u m I n v e s t m e n t Management Services, NAPIMS, Mr. Hussaini Tahir, who outlined the opportunities in the oil and gas sector in Nigeria, said, “The fundamentals are right at this time because, in addition to the huge resource base of oil and gas, investors can expect to benefit from ambitious reform programmes and tax incentives and the presence of a large workforce.”

The General Manager, Nigerian Content Development, Shell Group, Mr. Igo Weli, said, “India and Nigeria have a lot in common and we believe both countries will benefit from increased

Local content

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Nigerdock takes Nigerian Content to the next level

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Total Brings Usan Well Online Offshore Nigeria

Completes platforms, jackets, piles, boat landings, etc

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Mobil Production platform

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igerdock N i g e r i a PLC-FZE, the country’s premier offshore fabrication facility for the oil and gas industry has taken Nigerian Content development a notch higher with the completion of the SFDP1 project comprising the construction and load out of two Offshore Wellhead Platforms complete with Jackets, Piles, Boat Landing platforms and subsea templates.

Each of the completed t o p s i d e s w e i g h s approximately 1,200 Tons.

They are the first fully Integrated Decks (including e l e c t r i c a l a n d instrumentation scopes), to

be fabricated, precommissioned, onshore commissioned and Leak Tested entirely in Nigeria.

It was gathered that the SFDP1 has achieved a world class safety record of over 2.3Million man-hours to date having been executed without a Lost Time Incident.

Nigerdock has been recognised by Exxon Mobil for this performance with a prestigious award.

The execution of the SFDP1 in-country engendered an unprecedented number of skills development and technology transfer. Not only has Nigerdock, as a local fabrication yard, gained immensely from the integrated project management style used,

It was gathered that the SFDP1 has achieved a world class safety record of over 2.3Million man-hours to date having been executed without a Lost Time Incident. Nigerdock has been recognised by Exxon Mobil for this performance with a prestigious award individual tradesmen and engineers were given the opportunity to gain experience and develop further their various skillsets.

Also a total of 60 NCD Management Board trainees gained unprecedented training under the

requirements of the Act. While speaking on the development, Anwar Jamakani, Chairman of the company said these platforms are designed, fabricated and tested to international standards and they attest to the ability of

otal, operator of Block OML138, announced the start-up of production of the offshore Usan field in Nigeria, in line with the planned schedule. Usan is the second deep offshore development operated by Total in Nigeria, coming on stream less than three years after Akpo.

Discovered in 2002, the Usan field lies around 62 miles (100 kilometers) off the South East Nigerian coast in water depths ranging from 2,461 to 2,789 feet (750 to 850 meters). The Usan development comprises a spread moored Floating Production, Storage and Offloading (FPSO) vessel designed to process 180,000 barrels per day and with a crude storage capacity of 2 million barrels. Its size of 1,050 feet (320 meters) long and 200 feet (61 meters) wide makes it one of the largest vessels of this type in the world.

Development involves 42 wells that are connected to the FPSO by a 43 miles (70 kilometers) long subsea network.

Yves-Louis Darricarrère, President ExplorationProduction at Total, stated: “I’m particularly proud to announce start-up of this major project together with the concession holder NNPC.

indigenous fabrication companies to deliver to those standards.

“The project was a culmination of efficient p r o j e c t exe c u t i o n a n d communication between Nigerdock, NMPN and NAPIMS resulting in world class quality product with a world class safety record. It is our hope that the success achieved by the delivery of these platforms will engender greater confidence and trust in the utilisation of local content and with a continual flow of work to our yard we will embrace all the lessons learned and improve performance over all metrics for the next job.”

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Kaztec will soon move into deep offshore projects -Sir Emeka Offor

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he Executive Chairman of Kaztec Nigeria Limited, Sir Emeka Offor, in this interview told Sweetcrude that in view of the company ’s successes in onshore oil and gas projects, the company plans to go into the deepwater terrain, to demonstrate indigenous capacity in the region, still largely dominated by the multinationals. Excerpts: Since Kaztec Engineering was incorporated what has been its milestone accomplishments in Nigeria’s oil and gas industry?

Kaztec was incorporated in Nigeria, in June 2005, and y the special Grace of God, it has grown to become a leading Engineering, Procurement, Installation and Construction, EPIC contractor in Nigeria. It is a subsidiary of the Chrome Group, and the company has performed creditably over the years in terms of quality of delivery and meeting project deadlines to the satisfaction of our clients, and will continue to improve on these.

Haven said that we have handled a number of oil and gas projects in Nigeria. In the 2nd quarter of 2007, Kaztec was awarded a 24 inch, 107 kilometer, Calabar to Adanga Pipeline EPC contract. Again, in the 3rd quarter of 2009, we got another contract – Pipeline Integrity Assessment and M e t e r i n g S t a t i o n Rehabilitation and Upgrade/Expansion of Metering Facilities. In the 1st quarter of 2010, Kaztec won another contract – TB: 1921 Call Off contract for the Installation of Subsea Pipelines and Topsides for A d d a x Pe t r o l e u m Development Company Ltd. These projects are all on-going, and are in advanced stages of completion.

Deep offshore facility

We believe that it is time to share these successes with the global petroleum industry, and broaden our horizons with new contracts and capabilities going forward As a matter of fact, the Pipeline Integrity Assessment and Metering Station Rehabilitation will be completed by April 2012, while we are in third phase of the three-year subsea pipeline installation/topsides setting for Addax, and tie-in programme.

As an indigenous EPC service provider, what would you consider to be Kaztec’s strongest selling point as far as engineering procurement and

construction is concerned?

Kaztec has been able to put together a first class Engineering Procurement and Construction organisation. We have procurement offices in Lagos and Dubai. Our procurement staff are highly experienced and are tasked with providing equipment and materials for construction operations, barge supplies for pipe-lay and lifting operations.

Kaztec has acquired assets that

are fit-for-purpose such as DLB Ekulo Cheyenne with 800tonnes fixed Manitowoc Crane, capable of meeting a good percentage of lifting needs and pipe laying in the West African sub-region. We also believe that we have had a modest but successful offshore pipe lay and hook-up experience in the last one year.

Kaztec also provides a turnkey EPC capability with emphasis on project management and engineering installation solutions. It provides all the components of EPC contracting, but the value is often defined by engineering to reduce the time and cost of the offshore construction.

How compliant is Kaztec to Nigerian ownership In terms of shareholding, management and staff expertise?

Kaztec is 100 percent Nigerian owned. The management is also fully Nigerian. In terms of Staff

expertise, less than 20 percent expatriate staff are engaged in the offshore installation jobs. It may interest you to note that all our onshore installations are handled entirely by Nigerians.

Which project do you consider as the most challenging in terms of conception and execution?

The Addax TB: 1921 contract is the most challenging in terms of coverage, variety and duration. It is a multi-year contract and covers the installation (including commissioning support) of numerous subsea facilities including pipelines, risers, spool pieces and other seabed equipment. It also involves the installation of platforms, structures and topside CONTINUES ON PAGE 14

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Focus Kaztec will soon move into deep offshore projects -Sir Emeka Offor

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CONTINUED FROM PAGE 13 facilities and the hookup of above water facilities in various locations offshore Nigeria.

There will be many campaigns during the life of this contract, which is expected to last at least three years. It is challenging because it involves five separate and different offshore construction spreads, and many ancillary support vessels to complete the work, in a variety of water depths that require remotely operated vehicle, ROV, air and saturation diving in the current campaign.

Kaztec, like most EPC service providers operates in the Niger Delta terrain where issues of host community agitations have remained intractable for so long. What has been your experience in this regard?

We regard and treat our host communities as partners in progress, and therefore, take them along in whatever projects we are involved in the community. This way, we are close to our host communities and carry them along too.

However, community agitation is still prevalent in the Niger Delta region, and indeed widespread in certain areas of the region. To mitigate the adverse effects of community restiveness, we developed a Community Relations Policy aimed at truly treating host communities as key stakeholders and engaging them on a continuous basis. Kaztec enters into Global Memorandum of Understanding, GMoU, with them which are aimed at improving or providing infrastructure, engagement of community members into the workforce, direct financial payments to key community projects or groups. These are done in addition to contractor’s responsibility to preserve the environment.

So far, Kaztec has only experienced minor issues with its host communities. Even so, we are proud to report that 100 percent of those issues have been resolved. Kaztec has a full time Community Relations Staff focused on continuous engagement, mediation, prevention and resolution of crises, if, and when they occur.

From its incorporation, Kaztec set out to achieve indigenous participation in the oil and gas

From left; Chairman Kaztec, Sir Emeka Offor, Genrral Manager, Kaztec, Mr. Dan Nicholson, Chief Operations Officer, Mr. Ike Okpala and Logistics Manager, Mr. Gene Williams as Kaztec takes delivery of two anchor handling tugs Ekulo Explorer and Ekulo Spirit at the Calabar Port Cross State on Friday

So far, Kaztec has only experienced minor issues with its host communities. Even so, we are proud to report that 100 percent of those issues have been resolved sector at a period when the issue of Nigerian Content was not on the table, what propelled the company to follow such path?

Kaztec believes that the secret to success in the oil and gas sector is ones’ ability to deliver products in a safe, suitable, cost efficient and timely manner.

These factors are universally prefer red. We created an indigenous company specialising in oil and gas services in Nigeria at a time when Nigerian Content was in its infancy. Our vision was to create an indigenous EPC c a p a b i l i t y, c o v e r i n g b o t h onshore and offshore where few other indigenous companies ventured. This vision I believe is dynamic, and will continue to grow to encompass new capabilities leading the company to become a major player in the West African Oil and Gas industry.

In your opinion, what are the limitations confronting local oil service companies like Kaztec under the current local content regime?

The single largest limitation is non- availability of funds in terms and conditions that will ensure we remained in business.

Despite these obstacles, Kaztec has been able to establish a level of trust with our customers and subcontractors that allow us to function in a profitable manner.

Companies like Kaztec have many challenges under the local content regime. These include the necessity to employ local staff in senior positions when there is a dearth of qualified manpower in the Nigerian oil and gas industry that have the requisite expertise and skills set.

This is not unique to Nigeria; it is a common challenge that can be found in many countries around

the world. But flexibility in enforcement in the early years and extensive training of staff will enable more Nigerians to gain the necessary level of experience and expertise that is needed to sustain effective operations.

Our vision is to develop a highly motivated team of suitably trained and expert indigenous workforce, with a business-focused mindset. We strongly believe that our people are the key to developing our vision, and working effectively in a team-oriented and focused environment, will significantly enhance their productivity.

CONTINUES ON PAGE 15

Nigeria domestic gas supply drops by 300,000Mcf/d

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igeria’s domestic gas supply to power plants has dropped by 300,000 Mcf/d over the past one week due to repairs of leaking distribution pipelines, according to a statement Thursday by the country’s ministry of power.

Repairs to the Ughelli-Sapele pipeline and the Escravos-Lagos pipeline, both located in the Niger Delta, cut gas supplies to five gasfired power plants, resulting in a drop electricity supply in the oil-rich country by 625 MW, the ministry said.

“The total loss of natural gas supply in the wake of both the routine maintenance and the leakage repair has meant a loss of 625

megawatts,” the statement said.

The Escravos-Lagos pipeline transports 180,000 Mcf/d of gas from the Shell and Chevron oil fields, while the Ughelli-Sapele pipeline, which transport 120,000 Mcf/d of gas is operated by Shell.

A Shell spokesman said he could not immediately confirm the closure of the pipeline.

Oil firms operating in the Niger Delta including Shell has raised alarm over rising wave of sabotage attacks on oil pipelines by thieves tapping into pipelines.

Shell said last month that Nigeria could be losing 150,000 b/d of oil production to the attacks.

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Kaztec will soon move into deep offshore projects -Sir Emeka Offor CONTINUED FROM PAGE 14 Kaztec participated at the justconcluded NOG 2012, in Abuja, and also plans to participate at t h e O f f s h o re Te c h n o l o g y Conference, OTC 2012, in Houston Texas, billed for late April, what does Kaztec intend to achieve in these exhibitions, and what is the central message in this regard?

Kaztec expects to be able to present concrete proof of its ability to on deliver offshore oil and gas projects. We will bring hand bills, posters, and audiovisuals with our key personnel on ground to share our story with attendees.

Kaztec participated in the NOG in Abuja for the first time, and there, we showed proof of our successfully completed projects and sub projects in recent years, through which and we developed a track record for onshore and offshore

construction project delivery.

We believe that it is time to share these successes with the global petroleum industry, and broaden our horizons with new contracts and capabilities going forward. The central theme is that Kaztec is a full-fledged EPIC contractor with onshore and offshore capabilities second to none in Nigeria. Kaztec's offshore fleet include: the Ekulo Cheyenne DLB, the Ekulo To r n a d o D S V a n d o t h e r associated support vessels. We will continue to expand the fleet as the need arises to meet the growing needs of our clients. We also subcontract specific specialist services as required.

Going forward, how far is Kaztec willing to go to achieve its local content dreams and global vision?

Our current capabilities include onshore pipelines and stations, EPIC and offshore subsea

Group of protesters pipelines and platforms. Going forward, we will extend these capacities to larger projects with enhanced EPC capabilities. We expect to move into deep waters offshore Nigeria and then other West African countries.

In addition to these, we will expand into new areas covering onshore pipe corrosion and concrete weight coating, onshore platform fabrication, onshore supply base (for the offshore fleet), a free zone port

and a host of others in the coming years.

We strongly believe that Nigeria will soon be exporting technology and services to other African countries and regions, in the near future.

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: E C R O F K S A T M U E PETROL

have to wait until we see the content of the new PIB.

n o s i i n Dieza her own

What can strengthen investment between government and private sector?

There is a provision in the earlier version of the PIB that says if you produce certain quantity of crude oil, it is mandatory that you must refine a certain quantity in country to meet national demand. The new bill is expected to address that in order encourage refining of fuel in Nigeria.

-Peterside

What is the House of Representative Committee on Downstream Sector doing to address all the issues meant to revamp the petroleum industry?

D

akuku Peterside is the Chairman House of representative committee on Pe t r o l e u m ( D o w n s t r e a m ) , t h e committee saddled with the responsibility of overseeing the downstream petroleum sector in the country and initiating appropriate laws to help develop the sector. In this Interview with select energy correspondents in Abuja, he bared his mind on some of the issues currently affecting the Nigerian energy sector. He spoke on the long-awaited and controversial Petroleum Industry Bill (PIB), transparency in the oil sector, attracting foreign investment and the multiple task force and committees inaugurated by the petroleum minister in the wake of agitations by Nigerians over the removal of fuel subsidy. Sweetcrude’s Yemie Adeoye was there.

Peterside

Excerpts:

There has been much talk of this Petroleum Industry Bill ( P I B ) , w i t h t h e Fe d e r a l Government saying it would represent the bill to the National Assembly. As a member of the House of Re p re s e n t a t i v e s , w h a t particularly do you think are the benefits of this PIB? Nigeria stands to benefit a lot if the PIB is passed into law and there are reasons for that because the bill has the capacity to attract investments and generate employment, which means that it will keep idol hands busy and significantly reduce crime. The passage of the bill also has the capacity to reduce violence, riots and demonstrations in the region where oil is being produced. It is likely going to lead to increase in the of crude oil production. The nation will have more funds for infrastructure, industry and other things. It is likely to bring

transparency in the industry.

There are strong provisions in the bill, which will enhance transparency in the conducts of the affairs of the industry. It has the potentials of making the Nigeria to benefit more in the signing of joint venture deals

empower the President and other officials of government to do more our people.

There were insinuation in some quarters that the sixth National Assembly could not pass the bill into law because a

The passage of the bill also has the capacity to reduce violence, riots and demonstrations in the region where oil is being produced between the nation and the multinationals. Now another part of what the PIB can do, which will be of interest to Nigerians, is the tackling of environmental concerns, raking more revenue for government for the development. More funds at government’s disposal will

section of the country felt the PIB would benefit other sections of the country, particularly the oil producing region, and therefore that section of the vehemently opposed the bill.

How would you react to this?

I don’t know why anybody will

be against such a bill because it will put power back in the hands of Nigerians. Nigerians will own strategic national asset in the oil and gas industry. I don’t know why anyone or any true Nigeria will oppose such a bill, and so I don’t think the PIB will be serving the interest of any particular region. Far from it, I know that there is no iota of truth in that. The PIB will serve the interest of all Nigerians. If you talk about making provision for the people where oil is found, as a part of the process to reduce destructions of their environment and develop the area, I don’t see how that will hurt any other person outside that area. What they get will not hurt what you get. So I don’t see how it will serve any ethnic programme or any regional programme at all, except people choose to allow ethnicity or other consideration to becloud their sense of reason. Of course, that is the time any person will go and oppose the PIB, but again we

Basically, the role of the National Assembly is to make laws for the good governance of the country; making laws that will affect all the aspects of the economy and national life of all Nigerians. This is based on the fact the petroleum industry is the life wire of the Nigerian economy. It is understandable that our role is critical in the economic equation of the country. We at the House of Representatives are about to commence the process of passing the bill now that the Federal Government has set up a committee to draft a new PIB and e ventually s ubmit to the National Assembly a unified version of the PIB. There are many laws governing the petroleum industry that are under review. All of that are suspended now because we believed that the new PIB will unify and harmonise all existing laws governing the oil and gas industry, and so why do you seek the review of the existing law when you can assemble all of them together under a refined PIB and all-encompassing law.

Another thing we are doing is to strengthen oversight functions over the oil and gas industry.

That is why we are where we are right now. Unlike in the recent past, oversight function meant something different from what it is right now. Now if you tell any of the subsidiary of the Nigerian National Petroleum Corporation

CONTINUES ON PAGE 17

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Diezani is on her own CONTINUED FROM PAGE 16 (NNPC) that the house committee is coming for oversight, they will take it seriously because they know that we ask critical question and not only asking questions, we are ready to bring those issues to public domain.

How ready is the House to tackle the issue of transparency in the oil sector?

We are beginning to pursue transparency in a dimension that was not witness in the recent past. So if you consider the fact that we have just been six months and we have done legislative business for less than five months, you will agree with me that we started well, that we are in the right direction. We may not have accomplished that but nobody expect us to accomplish much in a period of four to five months. The legislative process is usually tedious. It requires a lot of diligent; laws are meant to last all times.

What caused the initial delay and how is the House going to ensure that the bill is eventually passed into law without further hiccups?

I’m sure you understand exactly what happened to the initial PIB. The PIB is a product of the oil and gas study group that was set up by former President Olusegun Obasanjo.

It was only brought the House in 2008. The last National Assembly did not move as fast as they should until the some people came up with politics of transition and man’s instinct to self-survival. People became more concerned about getting re-elected than addressing any s e r i o u s m a t e r. S o , i t i s technically not our fault, not anybody’s fault that the bill was not passed before the end of the life span of that Assembly. Right now we are about to reintroduce. As I said, it was an

business will be known by every player and will be respected by everybody.

executive bill and we are coming with another executive bill and because of the fact that we have various versions we thought it wise to tackle all the issues raised by all the stakeholders.

One thing I can assure, which is strategic in the PIB deal, is that the moment the executive submits the new version of PIB, in six months, unless there is any other thing we can’t foresee for now, we shall be able to achieve substantial progress

What is the role of the committee set up by the House of Representative to review the operations in the downstream sector?

ExxonMobil has just renewed its oil lease agreement with the Federal Government. Shell and Chevron are likely to do theirs in a matter of months. What will be the fate of these oil lease agreements when PIB is passed into law?

Three issues are involved.

Firstly, nobody can predict the content of the new PIB coming to the House. Secondly, on oil lease renewal, every agreement has clauses and contents. No agreement is so sacrosanct that it cannot be reviewed and amended. If there is a provision that says at any point in time, as the law changes, it will affect already sealed deal, that has already taken cognisance of any new law that may come into force. Agreement always has rules for either reversing the agreement or re-examining the agreement. It is a general principle. The third issue is that nobody either corporate or individual is above the laws of this country. Anytime the law is passed it takes effect from that day. If you put these three things together, the renewed of the oil leases can be reviewed. Again, I will like to draw your mind back to the fact that for very many years in this country nobody was making investment in the upstream sector of the oil and gas industry and you know we cannot wait forever. We have to be sensitive to the fact that we need to balance our national interest with the economic reality. The economic reality is

Diezani Alison-Madueke

that Nigeria must keep going, we must get money to run the government, we must source money to services, to build infrastructure. At no point in time can we say we should shut down government until we pass PIB first and then ome back and start making money to run government, to pay teachers’ salaries or to send our children to school. We have no excuse of not providing health care for our community, if we are to be realistic.

The delay has caused a lot of held-back investment in the industry. What are the strategies on the ground for the House to ensure that the bill will not affect national interest?

Some investments have been withheld because international

oil and gas companies would prefer a situation where things are done transparently in the industry, a situation that will them the opportunity to predict that, if they drill an oil block and that if they make the best offer, they will get it. They want a situation where, if they get into agreement, the agreement will be respected. Everywhere in the world, people will prefer a transparent system, a system that is accountable and a system that regulates itself. Obviously that is a preferred option but that is not what we have right now. So what we are saying is that PIB will guarantee transparency in the industry, the PIB will guarantee fair treatment and just treatment for everybody whether you are a Nigerian company or IOC, it does not really matter. The rules of this

Everybody will admit that there is significant difference between the last House and the current House even in public perception. I won’t comment on the probe itself or the investigation because, as lawyers will say, I will be judgemental on my part, which might influence the outcome of the final report. But one thing I need to point out is that the fact that the Senate is investigating the administration of subsidy and the Economic and Financial Crimes Commission (EFCC) is also investigating the administration of subsidy tends to one piece of fact, which is the fact that there is a moral question to be answered. It tries to point out that there is perception of corruption and that is not good for us as a people, it is not good to the image of the country, it is not good for the oil and gas industry and it is not even good for direct foreign investment.

What is the guarantee that this report will not be swept under the carpet like the report of the previous investigations?

I don’t sincerely think the report of the committee can be swept under the carpet, if you look at the calibres of members of the current National Assembly. They too are men who will not put their image at stake for anything. I can’t speak for the Ad-hoc Committee of the House of Representative and I cannot speak for the Senate Committee.

They can speak for themselves.

But one thing is sure and that is the fact that report will certainly come before the House.

Gas

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A gas station

GGL steps up campaign on auto gas

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reen Grass Limited, GGL, has stepped up efforts to encourage more motorists embrace the use of Compressed Natural Gas as vehicular fuel, with the construction of additional six CNG stations in the country.

GGL, a Joint Venture company of the Nigerian Gas C o m p a n y, N G C , i s a subsidiary of Nigerian National Petroleum Company, NNPC, and Nipco Plc, noted that the CNG auto gas will lead to the effective utilisation of the abundant gas resources in the country.

CNG which is fast becoming the preferred auto fuel in developed and developing countries in view of its environmental friendliness through the reduction of carbon emissions, is currently being promoted as the preferred auto fuel undertaken in Nigeria by GGL. The gas company has already built six CNG stations in Benin, Edo State and two kits fitment workshop.

Speaking at the justconcluded NOG 2012 conference in Abuja, the

Managing Director, Nipco, who is also a director of GGL M r. Ve n k a t a r a m a n Venkatapathy, said the Hilux pick-up gas demo vehicle attracted a lot of interests and enthusiasm at the conference.

Already, in anticipation of more motorists converting to the use gas, GGL said it has also embarked on the building of more outlets to meet the ex p e c t e d h i g h d e m a n d , promising that some of the stations will soon commence operations.

Venkatapathy noted that with over 14 million vehicles running on CNG worldwide, with a projection of additional 20 million by 2020, Nigeria can key into this anticipated growth by developing its existing natural gas resources.

According to him, the CNG programme offers dual fuel option to users through operational flexibility by running the vehicle either on gas or on petrol simply by flicking a switch installed on the dashboard.

Furthermore, he noted that there are experienced fitment workers at the workshops that will ensure a seamless conversion of liquid fuels vehicles to gas powered ones.

As part of the campaign, he said GGL gave taxi operators in Benin the opportunity to convert their cars free so they

Venkatapathy noted that with over 14 million vehicles running on CNG worldwide, with a projection of additional 20 million by 2020, Nigeria can key into this anticipated growth by developing its existing natural gas resources could experience the benefits of running their vehicles on gas, while also participating in a number of exhibitions to promote the use gas as auto fuel. “Our CNG team has also successfully converted Edo state government busses to run on CNG and diesel on a hybrid

saving 50 percent of the fuel cost for the state run company,� Venkatapathy disclosed.

Aside from constructing CNG stations in some select states, he said GGL has also completed laying of over 40 kilometers of gas pipeline to supply piped natural gas

(PNG) to commercial and industrial companies along the Benin-Warri Highway.

He noted that apart from being a cleaner fuel, gas is also much cheaper than petrol by over 60 percent and by over 70 percent in the case of diesel, based on the prevailing pump price of petrol at N97 and N165 per litre compared with gas at N55 per standard cubic meter.

Besides, gas powered vehicles have lower maintenance costs due to the absence of lead in the product, thus eliminating the need for frequent cleaning of spark plugs.

With regard to refueling, he said the process is very safe, as the cylinder is made from a special steel alloy with no welded joints, adding that at the workshop every cylinder is tested according to international standards before being installed.

Lagos set to commence gas supply project

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agos State Government has concluded plans to commence the first phase of its Landfill Gas Recovery and Utilisation project. This will ensure the supply of electricity to residents in the next few months.

The government said the Phase 1 of the project, which comprises pre-engineering design, would be completed within the next 18 months

Olasunkanmi Akoni under a Consultancy Contract arrangement.

The Managing Director of the Lagos State Waste Management Authority, LAWMA, Mr. Oladimeji Oresanya, made this known at a one day stakeholders meeting on: Landfill Gas Recovery and Utilisation Project, Abule-Egba, Solous and Olusosun Landfills

(Clean Development Mechanism) at Simpson Transfer Loading Station, Lagos Island.

The meeting was organised by the Ministry of Environment, LAWMA with support from the United Environmental Programme, UNEP; African Carbon Asset Development, ACAD, and Standard Bank.

Gas Gas supply disruptions affect power availability

20

Yemie ADEOYE

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as supply to t h e Escravos—La gos Pipeline S y s t e m (ELPS) which provides natural gas to key thermal power stations in the country has declined by over 180 million standard cubic feet in the last few days, leading to a considerable loss of electricity and power rationing nationwide.

The Oben gas facility in Delta State supplying gas to the Western axis was shut down at the instance of the S h e l l Pe t r o l e u m Development Company (SPDC) so as to carry out a leakage repair on the Ughelli—Sapele line.

Consequently, 1200mscf of gas from Seplat, an indigenous upstream operator, is now stranded.

This development came on the heels of the ongoing maintenance work on the Chevron compressor in Escravos, Delta State, which began last week and has caused a loss of 30mscf.

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ccording to the Minister of Power, Professor Bart Nnaji, “the total loss of natural gas supply in the wake of both the routine maintenance and the leakage repair has meant a loss of 625Megawatts, an awful loss, indeed, for a nation which used to generate 3,800 MW by last May and now produces 4,400MW”.

He named the power plants affected by the gas cutback as Egbin (the nation’s largest power facility located in Lagos State), Sapele (operated under the National Independent Power Project) and Ughelli in Delta State, Geregu in Kogi State, Omotosho in Ondo State and Olorunsogo (Phase2) in Ogun State.

Apologizing to Nigerians for the decline in electricity, Professor Nnaji has assured

Gas pipeline the nation that normal power supply will be restored within five days.

He said that some concrete steps have been taken to minimize the impact on electricity supply when routine maintenance work is carried out on gas pipelines, saying that henceforth all International Oil Companies (IOCs) must inform the Ministry of Power and the M i n i s t r y o f Pe t r o l e u m Resources at least 90 days ahead of schedule.

The Minister also disclosed that both ministries and their agencies now meet every month with relevant agencies under them to do a prognosis of gas supply to electric power stations in Nigeria.

Oil rig

Rig explosion: Chevron drills relief well … Says no threat to human health

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hevron Nigeria Limited, CNL, has begun the process of drilling a relief well to seal the shallow water Funiwa 1A natural gas well. The relief well is being drilled to extinguish a fire that began since January 16, at the original well approximately six miles (10 km) off the coast of Nigeria.

Chevron said the drilling plans will enable the

cementing and abandonment of the Funiwa 1A well. The relief well is being drilled by the Transocean Baltic rig with approvals from Nigerian authorities.

“CNL shares the concerns of the people of Nigeria about this incident. We have engaged with residents of the shoreline communities to listen to their concerns, explain what has happened and demonstrate our extensive response,” said Andrew Fawthrop, chairman and managing director of Chevron’s Nigeria/MidAfrica business unit.

The company also said it will continue to conduct regular monitoring flights over the incident site and beaches, adding that the water and shorelines have been extensively videotaped and photographed, showing evidence that they have not been affected. Besides, Chevron employs 30 area residents to conduct daily

walking inspections of 88 kilometers of shoreline.

“Sampling and testing of air, sea/river water, sediment, soil, fisheries and vegetation is being conducted to determine any impacts on the environment. This analysis is performed by independent environmental consultant, Fugro Nigeria Limited,” the company said.

According to Chevron, there is evidence of muddiness in the seawater close to the incident site due to agitation of the seafloor from escaping natural gas.

However, it said, “The gas is being burned at the surface by a fire which has reduced substantially since the start of the incident. The company affirms that no oil was spilled or has flowed from this natural gas well.”

The company also claimed that to date, onshore air testing has not found any detectable levels of pollutants from the natural gas fire.

Gas

Oil Rig

The Koluama disaster Oscarline ONWUEMENYI

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ven from the oil company-owned helicopter which circled over the village of Koluama nestling by the Atlantic Ocean, the desolation of the entire land was palpable.

And from the air one could see what might appear like a miracle of Biblical proportions: a burning sea. There on the farflung ocean, by a collapsed Chevron oil rig, is the K.S. Endeavor (Panama) rig gas blow-out which continues to flame after more than a month of the accident which reportedly claimed two lives, a British and an Indian.

On the ground, the picture gets clearer. The hollow eyes and bloated bellies of the school children who lined up to welcome the dignitaries tell a story of a wretched people who continue to survive against natural and man-made odds, such as the pollution from the latest gas explosion which has adversely impacted the aquatic life and eco-system in the region.

As with many of such incidents in the region, the Chevron rig blow-out was hugely under-reported in the national press partly because of the inadequate resources of

the media organizations – like most communities where the crude is mined in the Niger Delta, there are no roads leading to Koluama Kingdom – and a boat ride from the state capital Yenogoa costs about N7000, which is not surprising given that a litre of fuel within the capital goes for upwards of N350 per litre, against the N97 per litre sold in many other cities. Government officials visiting the area ride in helicopters provided by oil companies, and are often in a hurry to get away from the scorching heat and swampy neglect.

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ut, this is not the first time the people of Koluama have suffered blatant neglect and deprivation by government and oil and gas companies operating within the Kingdom. The communities suffered a worse fate during the Funiwa (Well 5) blow-out on January 17, 1980.

The villagers who remembered the incident claim that much like the present incident, the government and Texaco which was operating the Funiwa oil field then responded very late.

The consequence was severe pollution to the environment and poor remediation, the effects of which they still suffer

But, this is not the first time the people of Koluama have suffered blatant neglect and deprivation by government and oil and gas companies operating within the Kingdom till date.

According to the villagers, the latest explosion was heard from the K.S. Endeavor (Panama) Rig during the early hours of Monday, January 16, 2012.

Fode Drilling Limited, a company contracted by Chevron Nigeria Limited was drilling gas at the North Apoi Field, west of the Funiwa Field, in Koluama clan about five nautical miles from the Koluama communities of Southern Ijaw Local Government Area of Bayelsa State. The explosion resulted in a huge gas fire and a massive spill. The fire is still burning.

From the Koluama River, the huge flames can be sighted deep in the Atlantic Ocean, and the gas is still burning, emitting dangerous gases and other toxic chemicals into the environment.

The Koluama River directly empties into the Atlantic Ocean

and as such the polluted water is carried into the Koluama River and creeks and other neighbouring communites in the coastline.

The villagers report that the massive explosions from the blow-out shook the foundations of the houses at Koluama 1, Koluama 2. K alaweiama, O p u a m a , Ta m a z o , Kiriseighegbene, Abiakiawei, and Olobia among other communities in the Koluama clan. “We were worried about this development because it was explosions in the course of seismic activities by Shell D’Archy while exploring for oil and gas in this same area that led to the wiping away of the Ancient Koluama in 1953,” a village leader noted.

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he people of Koluama clan have even bigger worries from the encroaching

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ocean. According to them, in the 1970s and the early 1980s, it took about an hour’s walk from the bank of the river at Koluama to the sea shore. However, this entire land has been eaten up by the sea. They demand protection from the Federal government from the rampaging sea. “We plead with the Federal Government to come to our aid by carrying out a shore protection and embankment project to stop the menace of the ravaging sea,” said a former Commissioner representing the area.

He notes that despite the huge revenues the Federal and Bayelsa state governments are deriving from the resources located in the area, “there is no tangible government presence in Koluama.”

Koluama vs Chevron The relationship between Koluama communities and Chevron has been described as one of master and slave: Chevron operates as master and the communities as slaves.

“Chevron has not done any reasonable community development in our communities since it took over the Funiwa and North Apoi Oil fields from Texaco (TOPCON),” said Chief Tiwei Leghemo, another community leader.

He points out that Chevron has not employed any member of the communities since its merger with Texaco in 2001.

According to him the last time any member of the communities was employed was twelve years ago. “Instead, Chevron has decided to terminate the employments of three out of the eight employees from our communities. Many of our youths have remained unemployed. Chevron has not been treating our people as humans,” he adds.

Chief Leghemo says his people do not ask for much than the basic necessities like good, portable water, electricity, schools, and functional health facilities. Add the odd employment or two for their sometimes volatile youth. He points out that the only standard cottage hospital in Koluama 1 was built by Texaco in the early 1990s, while the structure for the health centre in Koluama 2 is yet to be completed.

However, the cottage hospital which was inherited by Chevron is not equipped neither has it any medical personnel except for a community extension health officer.

Fee dback

Feedback

22

Bonga oil spill: RA/FoE findings

Oil spill at the Nigerdelta

L o c a t i o n : testimonies Odioama Community, Lucky Tema Brass Local Government Area of Bayelsa State Following an alert from fisher folks in Odioma community on the discovery of oil slick suspected to be from Shell’s Bonga Field, ERA/FoEN monitors visited the Atlantic shoreline in the company of some of the fishermen where spreading spill was sighted.

Odioama, a Nembespeaking Ijaw community is on the fringes of the Atlantic Ocean in Brass Local Government Area of Bayelsa State and its people have a large number of fisher folks who derive their livelihood from the Atlantic Ocean.

Areas visited by ERA/FoEN monitors in the company of three community folks - Elder James Sampson aka Ovie Kokori, Danyo Ogoniba and Ayeomane Ayela, included Fish Camp 2 opposite the Var nish Island and St. Nicholas. In the course of the visit, spreading slick was observed close to the coastline of Odioama and along St. Nicholas. More quantity was observed spread out at the Varnish Island.

Fishermen

I have been in this fishing camp here in Odioama for about 12 years now. I am an Ilaje man and fishing is my main occupation; that’s what I do here. As you can see I am just returning from the ocean. If you go into the ocean you will find the thick slick of crude oil floating, tossed here and there by the waves. It is spreading according to the direction of the current. That is what we are seeing even right here at the waterside on St. Nicholas.

As a fisherman, one of the things I know about this crude oil is that, apart from killing aquatic life, it chases away the fishes that used to be around. If our nets get in contact with the crude oil it will stain the nets and, because of the smell and colour, fish will notice and avoid such nets in the water.

You can see the little catch that I returned with. This is not how it used to be. Our efforts are yielding far below expectation these days.

Ayeomane Ayela Actually we started noticing this crude oil on the Atlantic a week ago. But it came ashore about two days ago. Oil spills affect our fishing and, this one is not an exception. We

used to catch enough fish before but it is difficult now. I go into the ocean almost every day and, since we began experiencing this spill we have been unhappy. If you had come when we had full tide, you would have noticed the crude oil slick all around the waterside. Now the water has ebbed, though you can still see signs of crude oil at the water front. We are not happy because it takes extra effort to avoid the slick from contaminating our fishing nets. Once your net has stains of crude oil fishes will run away from the net because they will see it. As you can see we are powerless; we cannot order the government on what to do.

But I think a responsible government should be able to appreciate our plight and assist us. Because of this kind of situation we are becoming debtors as we hardly even meet up the payment of the fuel we use for our oceangoing boats. We want Shell to clean up the spill and compensate us for loss of livelihood. Our business has been impacted. Bonga fish that used to come to the surface are no more. The company should not deny us of our Bonga with their Bonga Facility.

Observation/Conclusion In the course of the field

visit, ERA/FoEN noticed the spread of the spill continued to Fish Camp 2, behind the community and by the entrance of St. Nicholas. St. Nicholas joins the Atlantic Ocean from this point.

However, even before visiting Fish Camp 2, the surface of the river showed signs of the slick sheen everywhere. Apart from what was observed in the Ocean, crude oil slick was noticed coming into St. Nicholas.

Daily Updates December 26 Our field monitors have confirmed that the Shell Bonga Field oil spill is presently in the waters of Odioma Kingdom and it has also reached River Ramos near Warri, Delta State. There also appears to be another Shell unreported oil spill that has been on for about two weeks now at Otumara in Escravos in Ugborodo area of Delta State. As we investigate, we will update you once we get more details.

December 24 Through our contacts we received information that the deep sea fishing folks from Odioma Kingdom. A Nembe speaking Ijaw settlements on the fringes of the Atlantic Ocean in Brass Local Government Area, Bayelsa State sensed a pungent smell of crude of crude yesterday.

New information(today 24, Dec. 2011)to ERA indicates that some of the fishing folks have seen thick crude oil slick, about 2km to the shores/coastline this evening. These folks also have reported that some of their fishing nets are clogged with crude.

December 23 The reported spotting of crude oil by fishermen in Inanga location within Qua Iboe oil field, believed to have leaked from Shell's Bonga Oil Field, opens a new chapter in the c a t a l o g u e s o f environmental impacts wrought by the oil industry in the Niger Delta.

Shell had on Wednesday (21 December 2011) announced that some 40,000 barrels of crude had leaked into the Atlantic Ocean from its Bonga Deep Offshore Oil Fields and subsequently shut down the facility. The spill is said to have occurred while a vessel was being loaded with crude oil.

While the fishermen in the Qua Iboe area were pondering over their findings on Friday 23 December 2011, at a meeting it hastily organized for community folks in Warri, Delta State, same day, Shell was peddling new figures.

Power Oscarline Onwuemenyi

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he National Council on Privatisation (NCP) has approved that State Governments should have the ability to provide for increased access to electricity to their citizens by reaching an agreement with the relevant distribution company whereby the state will make a contribution to the capital expenditure required to rehabilitate and/or expand the network within that state.

This capital contribution will be secured and repaid on terms agreed with the distribution company. The assets thus acquired will become the property of the distribution company but will be wholly utilised within and for the benefit of the citizens of the relevant state.

Furthermore, the state will receive compensation within the ambit of the extant tariff methodology. Excess capital costs, if any, will be borne by the State Government. Any investment by the state will not attract any interest payments by the distribution companies.

At its first meeting for 2012 which was held at the Presidential Villa, Abuja, the NCP also endorsed that the percentage of equity that State Governments hold in a distribution company will be determined through independent valuation of actual investments by the respective states in the distribution network.

The valuation will be determined by an independent agency jointly appointed by the State Governments and the Nigerian Electricity Re g u l a t o r y C o m m i s s i o n (NERC.) iven the economic un-viability of redelineating the distribution companies along state boundaries, the NCP approved that the present privatisation framework of eleven distribution companies created from the unbundling o f t h e Po w e r H o l d i n g Company of Nigeria (PHCN) should be maintained.

NCP approved that 60% of the shares of a distribution company be sold to core investors to allow state governments to participate in the bidding consortia but limit

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POWER: NCP approves states’ ownership of

electricity structure

Transformer

the overall federal and state government shares to 49%.

Nonetheless, the NCP approved the Federal and State Governments would not play any role in the management of the privatised successor companies.

It also endorsed that the workers’ allotment would not exceed a maximum of 2% of the overall shares or 10% of the Federal Government shares in each distribution company; whichever is lower.

NCP also approved that shareholders’ agreements will be signed between the Governments and core investors in each distribution company that will explicitly provide for automatic dilution of any Government shareholding where there is a

failure to meet payment deadlines.

It also approved that the states may provide counterguarantees to the distribution companies to cover shortfalls in payments due from the distribution companies for energy supplied to customers within the territorial boundaries of the respective States.

The NCP, which is chaired

by Vice President Namadi Sambo, also approved that Governments through reaching an agreement with the relevant distribution company should be allowed to increase access to electricity to their citizens.

In accordance with the Independent Electricity Distribution Network (IEDN)

regulation to be enacted by the Nigerian Electricity Regulator y Commission (NERC), a State that desires to build independent electricity distribution networks within areas of its State not currently served within each distribution franchise area could do so.

This would be subject to such a State being licensed to do so by NERC without unnecessary delay. t would be recalled that the NCP had at its meeting of October 31, 2011 deferred decisions on post-privatization shareholding structure of distribution companies pending when an agreement is reached with the state governments. NCP had also

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directed and NERC to make presentations to the meeting of the National Economic Council (NEC) that followed the NCP meeting.

On the basis of the presentations and the attendant discussions, the Vice-President and Chair man of NEC had c o n s t i t u t e d a n Ad - h o c Committee on power sector reform to further deliberate on the issues raised and make necessary recommendations to NEC. Subsequently, the Ad-hoc Committee chaired by the Governor of Cross River State had met on January 25, 2012 and agreed on the issues in dispute which were eventually approved by NEC on January 26, 2012.

Power

24 NERC warns power distributors against unapproved charges

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Broken electric poles

Lagos residents still in darkness Kunle KALEJAYE

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hree weeks a f t e r a devastating rain storm which struck Lagos in the second week of February, many residents in Okota, parts of Surulere, Idimu, Ikeja are still counting their loses – having to effect repairs to their damaged properties. Their situation is however compounded by the lack of electricity supply The dangerous storm wrecked- havoc in different parts of the city killing over 15 people among whom were 10 children who were being conveyed to school in a ferry.

Power Holding Company of Nigeria (PHCN) installations were not spared either as scores of High Tension poles were felled, leaving most parts of the state in darkness.

Mr. Pekun Adeyanju, a

principal manager in charge of public affairs at the PHCN, Ikeja said the most affected part of the state was Okota area which falls under Ikeja Distribution Company Zone.

Shedding more light on the development, he said work has already commenced in the affected areas, adding that in an effort to speed up repairs and re-installation of broken poles, the services of private firms was contracted.

He noted that due to the scale of the damage done by the storm, PHCN workers could not manage the affected areas; hence the job was contracted out.

He expressed confidence that the work being carried out by the contractors would be done satisfactorily. “ We a r e s e r i o u s l y monitoring the contractors and they are cur rently working hard to ensure that power supply is restored in

Okota area. Hopefully by this weekend the entire job will have been completed.

It was also gathered that about 80 per cent of repairs have been done In Agbara area, the storm also wreaked havoc - leaving about 50 high tension poles damaged and in need of replacement. t was gathered that the 50 high tension poles carries about three (3) Feeders and these Feeders can supply electricity to about five to six streets.

While speaking on the development, the Public Af f a i r s M a n a g e r, P H C N Agbara District, Mr. Adeleke Ibrahim said service to over 70 per cent of the affected areas have been restored but admitted that work is still going on in other areas.

He added the magnitude of the damage done by the rain storm necessitated the PHCN

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team of engineers to swing into action to work round the clock to restore power supply to the affected areas.

The affected areas include O p i c E s t a t e , Ay e t o r o , Igborosun and some part of Badagry.

Adeleke noted that the cost of repair of the damaged installations runs into millions of naira adding that customers should be patient as power will soon be restored.

Festac Business district also had its fair share of destruction from the storm.

The Public Affairs Manager of the district, Mrs. Amah disclosed that the storm affected some high tension poles. She noted that between when the rain storm struck and now, close to 90 per cent of the havoc done had been fixed within the district, but appealed to customers in areas where electricity supply had not been restored to be patient. She said efforts are being made to restore power supply to those areas.

he Nigerian Electricity Regulator y Commission, NERC, last week warned electricity distribution companies against asking for unapproved charges from their customers.

He power industry regulator last year released a set of rates payable by electricity consumers to the distribution companies in the country.

The warning is coming on the heels of increasing number of petitions and complaints received by the Commission that some of the Distribution Companies are cashing in on the recent media reports over planned increase in the electricity tariff and charging their customers rates other than those approved by the Commission.

Reacting to the development, the Chairman, Dr. Sam Amadi said, “No tariff increase has been announced. Chief E xe c u t i v e O f f i c e r s o f distribution companies who collect tariffs beyond what was approved last year are operating in disobedience of the industry’s regulations.”

“It is an offence to charge rates outside the approved tariff regime. Any erring distribution company will be made to refund its customers money collected in excess of the approved tariffs,” Amadi said.

He said that the commission will not spare any chief executive officer of erring electricity distribution company, as applicable sanctions will be meted in accordance with the Electric Power Sector Reform Act 2005.

Amadi said that the Commission was harmonising submissions made in the course of stakeholders consultations held towards the planned tariff regime, and that the final figures will be announced through the media, to put both the customers and operators on notice.

Power

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ATM withdrawal

Nnenna EZEAH

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n order to provide a cashless and comfortable customer services that are technology driven, the PHCN Eko Distribution Company, has entered into partnership with Etranzact on epayment channels.

Speaking at the occasion, the Chief Executive Officer of Eko Distribution Company, Mr. Oladele Amuda, said the PHCN Utility card is designed to offer seamless epayment services for customers to pay their electricity bills from the comfort of their homes and offices, without going to the bank or any PHCN office.

“PHCN Eko Distribution Company is known to be innovative and to serve our

PHCN partners with Etranzact on epayment customers better by with providing comfortable customer services that is technology driven.”

Amuda explained that the purpose of the partnership is to make the payment of electricity bills easier, saying, “The main aim of this card is to make life much easier for our customers.”

Also speaking, the Managing Director Etranzact, Mr. Valentine Obi, said the PHCN utility card will provide for PHCN payment and also other

payments.

“Customers can get further benefits using their prepaid card to perform other transaction services such as; airtime purchase, funds transfer to any bank account, purchase airline tickets, pay other utility bills and receive discount benefits from partner merchants,” he said. bi said the prepaid card will enhance the cashless economy policy of the Central Bank of Nigeria, CBN, and ease the stress of paying their

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bills.

“The PHCN Utility prepaid card is multi-purpose and multi-dimensional.

Customers can now pay their electricity bills seamlessly with or without a bank a c c o u n t , o n t h e We b , automated teller machines, ATM, point of sales, POS and on their mobile phones through PocketMoni and mobile banking services.

He explained that the card is not restricted to the payment of electricity bills alone, but also can be used to purchase anything as well as to cash money at any POS

and ATM machines.

He concluded by calling on business managers to embrace this by publicizing it to their customers and the PCHN/Utility card is available at all PHCN offices and partner banks.

“The prepaid card will serve every Eko customer both the bankers account owner and non-bankers account owner.

Most banks have provided etranzact mobile platform to enable 24/7 pay point that makes payment of bills comfortable and creating Eko portal in your mobile where you can recharge and check bills through your mobile phones and get reports.”

NIGERIA OIL & GAS

International Conference and Exhibition 2012 Cross section of people at the NOG

Cross section of people at the NOG

Nigeria oil industry leadership waiting for Diezani

Austen Oniwon, NNPC, GMD welcoming Diezani Alsion Madueke to the NOG

L-R, Austen Oniwon, Diezani Alison-Madueke, Dr. Alirio Para, Ian Craig & Andy Yakubu

Cross section of people at the NOG

R-L, Dr. Levi Ajuonuma, John Owubokiri, Tony Attah, Rep of the minister of environment, Goni Shiek, Pirrah and a rep of NOSDRA

Diezani Alison Maduele (m), Ian Craig & Austen Oniwon Nigeria oil industry leadership waiting for Diezani

L-R, Mr. Pagano, Sunmonu & Prince Momoh

Diezani being briefed at the Chevron stand by Femi Odumabo

Wale Tinubu, CEO of Oando Plc. NOG

Nigeria oil industry leadership waiting for Diezani

Financing Vallorec Mannesmanne invests N4bn in pipe making in Nigeria 27

Oscarline Onwuemenyi

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ith the aggressi ve drive by the Fe d e r a l government to stimulate investment and local participation in the oil and g a s i n d u s t r y, a n international oil and gas services company, Vallorec Mannemann Oil and Gas company has disclosed that it spent over N4 billion to invest in the manufacture of seamless high-end casing and tubing steel grades and connections for the oil and gas industry.

Chairman of the company, Mr. Charles Osezua, told journalists in Abuja that the company was dedicated towards enriching the Nigerian content in the oil and gas industry, adding that in the past the industry had to import billions of naira worth of threaded pipes used in the industry.

He stated that, “As the world’s only manufacturer of proven gas-tight solid expandable tubulars, we have honed our ability to thread the most complex of connection designs, through maintaining high standards of quality, safety and regard for the environment. This is the quality we are bringing to Nigeria.”

VMOG, which operates the VAM Manufacturing Plant in the Onne Oil and Gas Free Zone, also announced that it has recently trained 25 Nigerians on various aspects of oil and gas industry pipe making processes in United K i n g d o m , Fr a n c e a n d Germany. ccording to Osezua, plans are underway to transfer majority shares to Nigerian shareholders to further reiterate the company’s compliance with the Federal Government local content initiative.

He said, “We are pleased to state that VMOG is in the final process of transferring majority shares to Nigerian shareholders. Since the commissioning of the VAM ONNE threading plant, with an investment of about N4 billion in 2009, V&M have embarked on an aggressive technology transfer and in this regard, have trained about 25 Nigerians abroad

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*Says labour may endanger Nigerian content growth

Iron pipes

and more than 50 Nigerians on specialised plant operations and technology applications in the country.

Consequently, over 95 per cent of our staffers are Nigerians.”

Meanwhile, the Managing Director of VMOG, Mr. Eugene Fogli has said current efforts by organized labour, especially members of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Port Harcourt Zone, to forcefully unionise workers in the Onne Oil and Gas Free Zone, may not augur well for the local content drive in the country.

He noted that, “Since we started about two years ago, we have invested billions in

building our site and training Nigerians to run such sophisticated, high-end connection pipe making, and we have worked to transfer this unique technology that hitherto does not exist in the country. But the labour people are threatening to turn everything upside down.” e said VMOG was c u r r e n t l y embroiled in legal battles with the association over plans by the association to effect the forceful unionization of its staff, stating that the company was covered by the moratorium it signed to operate for ten years unencumbered by such matter.

He noted that the union has resorted to threats of violence

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against some companies located within the Free Zone, stressing that the Federal government should intervene to protect the rights of workers and investors in the zone.

According to Fogli, however, the company is focused on training Nigerian technicians as well as highlevel managers that are ex p e c t e d t o t a ke o v e r sensitive operational aspects from foreign experts in the nearest future.

“We cannot afford not to train our staff very well because the technology we are using is world class where there is no margin for errors.

Simple error will easily result in death and we will not want to lose our Nigerian experts.

Nigeria does not have the facilities to train these experts and that is why we commit huge resources into training of our workers in France, Germany or the United Kingdom, which have the best facilities for this type of technical job,” he said. ommenting on the market factors, the company ’s Sales G e n e r a l M a n a g e r, Christophe Huot said: “The company currently produces 15,000 metric tonnes of pipes but has the capacity to produce more if some of the market factors are resolved.

Part of the market forces is the slow level of contracts awards and the demands of the oil companies.

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Insurance

M Nigerian government

r. Annur Sekar is t h e Chairma n and Managing Director of New India Assurance Co Ltd. in this interview with Vanguard, he opines that the Nigerian g o v e r n m e n t m u s t t a ke concrete steps to enhance the welfare of people below poverty line. He spoke to ROSEMARY ONUOHA Excerpts: Government and insurance We can compare India with Nigeria. In India in the last few years it is the health insurance products which are actually making waves and selling very fast. Just about six years back health insurance was about six per cent of domestic market today it is about 24 per cent and going good. We are estimating that in four years time the health insurance premium would be like 30 per cent of the total insurance market premium.

It is only about nine per cent of the Indian population who have one or another kind of health insurance and am sure that here there may not be many people who have health insurance. So that is one area we should be looking at. There are many Middle Eastern markets where in the last five years the health insurance has become very popular and they are selling at a very fast pace. So here also the same thing can be done. In fact in our own country the government of India has come out with a mass product. Under that scheme the below poverty line families are given free insurance policy by the government of India. So the Central Government put in 75 per cent of the premium while 25 per cent is being put by the state governments.

The policy holder has to pay something like 30 rupees to make an identity card which the policy holder can use to get to the designated medical centres both in the private and public sectors. o the policy holder goes to the hospital with the ID card, which is swiped then the balance is known and the hospital gives the treatment and it is stored in the card. So the policy holder doesn’t have to pay anything for the

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should commit to health insurance

President Goodluck Jonathan medical services that they get. This scheme is being implemented by the insurance companies throughout India. So something like that can be part of this market also. Some countries have come up with compulsory health insurance schemes aside from the insurance regulator there is health regulator separately.

In Saudi Arabia and Dubai there is a compulsory health insurance scheme especially for the people of lower level below a particular level of income. Going forward, I think that will be a big market in Nigeria. Health insurance really needs to be given priority. It is one of the social

We take the ownership responsibility of running this company in proper line. I don’t see any reason for our investment to be reduced because of any changes in the market responsibilities of the government along with the

insurance companies.

Challenges The market penetration is still very small. The biggest challenge for us is how to cover more people at less cost and at a cost which can be affordable by the market. o the biggest challenge for us is ‘how do we cover the bigger population at an economic cost.’ We have to develop new products and it is a very competitive market.

The non life insurance market by nature is a very competitive market and very short term in nature because the policies generally exist for only twelve months. So sustaining the trust of the

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people especially those people who pay their premium, but don’t get any claim is a challenge. How do we get them to renew their policies again in large number? These are our biggest challenge. In the Indian market we have competition and it is this competition that is helping us develop more products, reate better delivery systems, as well as utilising the electronic mode of dealing with the customers.

Non life insurance is a low ticket business. The products are priced low. So the challenges are there.

First of all you need distribution channel which is sustainable to reach the masses. So that is a big challenge in India and it could be a challenge here in this country.

Investment New India came into Nigeria 60 years back and it was operating as a branch of New India Mumbai, and sometime when there were regulatory changes and foreign companies were not allowed in Nigeria we had to form a local company. In 1970 Prestige Assurance was formed with the help of local investors and New India took up 40 per cent of the total capital declared and Prestige Assurance took up the job of New India.

Subsequently, in 2003, New India’s commitment to this market was again proved when we increased our stake from 40 to 51 per cent which in itself is indicative of the commitment of the New India Assurance and also the attractiveness of this market. So over this period there could have been short term losses and gains but our commitment to Nigeria is forever. We take t h e o w n e r s h i p responsibility of running this company in proper line.

I don’t see any reason for our investment to be reduced because of any changes in the market. We do feel that we can do better than what we have done in the recent past and we will try to i m p r o v e o n o u r performance maybe expand our branch network, recruit more people, improve on Prestige products in the market to make it almost at par with New India that is s e e n t h e w o r l d o v e r.

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Financing

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Financing

NNPC Ad

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Labour

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Victor AHIUMA-YOUNG

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R E S I D E N TGENERAL of Tr a d e U n i o n Congress of Nigeria, TUC, Comrade Peter Esele, has said he is in the Special Task Committee set up by the Federal Gover nment through the Ministry of Petroleum on the Petroleum Industry Bill, PIB, to among others, be a whistle blower to ensure that the interest of Nigeria is not undermined.

Comrade Esele told Sweet crude that he did not accept the offer for personal reasons and he consulted with his constituency in labour and the civil society organization, before accepting the work in the committee and that he was given the green light to accept.

He dismissed insinuations that the membership of the committee was meant to compensate him for perceived pro-government role the January anti-petrol price hike national strike. ccording to him, “If we have decided to be puritans and we complain about the system, if every one of us is out of the system, how then can we change the system? When they made the announcement, I never accepted the offer. I told myself I was not going to accept the offer until I discussed with some of groups like labour, civil society, media and so on. It was some of these people that later called. Some people from the oil and gas called and asked why should I not take it? Their argument was that all this while we were talking about certain changes, we all know certain things are wrong, before it becomes law, make it public and let all of us know. So, if we do not have any responsibility there, what are we going to do? For your information I only accepted the offer last week (about two weeks ago) that was after about 15 to 20 civil society organizations, CSOs met in Abuja. They invited me to come to Abuja and I met with them, they told me reasons why they want me to accept the offer and I told them point blank that if they say I should reject the offer, I will. It was after I got their endorsement that I accepted the offer. I

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Comrade Peter Esele

My role in PIB special committee—Esele attended the first meeting of the committee on Tuesday February, 14 where we now had to adjoin for another two weeks to get a draft.”

“I have pledged that as soon as I get the draft, I will send it to the CSOs to let them know what may likely be coming to the public domain. I know there is a lot of suspicion in the country.

No matter what your intentions are, we suspect everything. My only appeal is that, we should encourage good people to come out. But if every one of us start saying, Nigeria is so bad, Nigeria is so bad and we are complaining in our bedroom, and if we have an opportunity to change one or two things, we should do it. The first meeting I attended they did not give us any allowance. If

they had given me any sitting allowance, I would have told you publicly. I can tell you that they did not even pay my flight ticket. My flight ticket to that meeting was paid by TUC and my hotel accommodation was also paid by TUC. So, if actually we are looking for where to make money, I can assure you that I have served in several committees, you will be shocked if told you what they paid as sitting a l l o w a n c e s o r accommodation.” peaking on whether as a lone voice he has capacity to push his view on PIB through, the PresidentGeneral said “I am fully aware of this that is why I have also requested that we need representatives from labour and the civil society organizations. I said it my last

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presentation to the House of Representatives. I need some more people who would also understand my language, and know where I am going.

One other thing I have told the civil society organizations is that if they call and I don’t pick, they should send texts, if they send texts and I don’t reply, they should come and knock on my door, if I don’t open the door they should break down the door. Once I get my hands on the drafts, I will let them know immediately.”

“I am not sure we coming with a fresh Bill. There are also issues that have arisen as a result of global practice.

We are going to put the Oil and Gas Industry Committee, OGIC, and the PIB bill together and compare and contrast. So if

we find out that whatever they are adding will short change Nigerians, we will say no. But if we find out that it’s in the best interest of Nigerians, then we will take it.” omrade Esele expressed doubt whether a deregulated downstream could actually bring about the needed investment, he said though the argument could be completely faulted and said fine, government has an argument, but diesel is deregulated. How many people have come in to say that they want to set up refineries for diesel? Aviation fuel is deregulated, how many people have come in to say that they want to make it their primary assignment? You can also say you want to concentrate on these other products.

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Labour Victor AHIUMA-YOUNG

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POWER:

O FG, labour to resolve

rganised L abour in the power sector and the Federal Government have fixed April as deadline to resolve all pending labour issues to pave way to a seamless privatization of the Power Holding Company of Nigeria, PHCN. Already, both parties are said to have resolved less than 10 percent of their differences after the fourth round of meeting between both parties in Abuja.

Under the umbrella of the National Union of Electricity Employees, NUEE, Senior Staff Association of Electricity and Allied Companies, SSAEAC and the pensioners body, labour and government agreed that not until all the pending issues were resolved, the winding down of corporate headquarters of PHCN should be put on hold.

Part of the statement reached at the end of the m e e t i n g r e a d “A n implementing monitoring Committee to be set up to ensure that the 50% salary increase shall be fully implemented across board by the end of February 2012; Bureau of Public Enterprises, BPE, shall conclude all issues relating to biometric exercise and the verification of all workers, both casuals and permanent

by March 12, 2012; All casual workers who have been verified and cleared shall be issued letters of employment and regularized in conformity with earlier agreement; The BPE shall commence and conclude biometric verification exercise for pensions on, or before July 31, 2012” abour leaders said a committee comprising two members each from the Ministry of Power, SSAEAC, NUEE, BPE and PHCN had been set up to meet on March 14, 2012 to review the final report of the biometric exercise with a view to ensuring that all genuine PHCN workers, whether permanent or casual were captured, verified and cleared The labour leaders noted that “there was no

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issues soon

Nigerian Labour leaders agreement reached for now “on the existence of 120% arrears for pensioners, implementation of 53.375% wage increase for workers, expired collective agreement reached with the w o r k e r s b y t h e Government, and as well as no agreement reached on the demand of the union for across the board implementation of the National Minimum Wage Act as the Government team maintained that the Act applies to only workers who earn less than N18, 000 per month” “The issue of 4000 workers retired in the 2000 could not be negotiated as it is subject

The issue of 4000 workers retired in the 2000 could not be negotiated as it is subject of an ongoing litigation of an ongoing litigation. It was therefore suggested that the two parties should

consult and consider settling the matter out of court.” hey however said “It was agreed that parties shall refrain from taking any action that could jeopardize the on-going negotiations and the next meeting will hold between April 16, 2012 and April 19, 2012 subject to confirmation and the agreement was signed by Comrade Joe Ajaero, NUEE G e n e r a l S e c r e t a r y, Comrade Mansur Musa, NUEE President, comrade Abiodun Ogunsegha , General Secretary of SSAEAC and Comrade Bede Opara, President of

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SSAEAC, Comrade Olukayode Ogunbiyi, Secretary NUP, Comrade Temple Ubani, Preseident, NUP, Mrs. Cinedu Dike, Acting Director, Federal Ministry of Labour and P r o d u c t i v i t y, M a l l a m Mohammed Abbas, Director, Federal Ministry of Power, Mr. P. Apuye, signed for the Managing Director/Chief Executive officer of PHCN, Dr. Timiebi Koripamo Agary (OON), Federal Gover nment spokesperson and the Chief Negotiator y/conciliator witness, Comrade Hassan Sunmonu (OON), Secretary General, OATUU.

Labour Victor AHIUMA-YOUNG

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RGANISED L abour in the nation’s P o w e r s e c t o r, Nigerians will be the ultimate loser in the long run if the sector is eventually privatized and handed over to the private sector.

Under the umbrella of the National Union of Electricity Employees, NUEE, workers in the sector, against the patriotic counsel by organized labour some privileged individuals are bent on appropriating public assets through their fronts.

Speaking through the General Secretary of the union, Comrade Joe Ajaero, lamented that at the time Nigerians would come to terms with the position being canvassed by the workers, it would have been too late.

He said, “The power situation that have today is what has been given by the state. If they generate more than what is presently generated and the environment is right, we are capable, we are willing and ready to do more to ensure that Nigerians see the benefits. We are not trying to convince anybody, it is not about convincing people of what is happening, it is all about telling them the situation. I am saying that it will be too late, if after we are have said do not privatise, then government privatized, few years later the expected stable power did not materialize. Instead of stable power supply, the power situation becomes worse, Nigerians would say, Ah! the union warned against it.

Unfortunately, then, it will be too late. So, now is the time to rise against it. Let me tell you this, even Nigerians, know that they have used soldiers against us, used the police against us, used Economic and Financial Crimes Commission, EFCC, against us, even the press are being against us. They only organization they have not used against us is the customs. So, it is not that this issue is not on the public domain, it is on the public domain for everybody to see.”

“Till today nobody has equally defeated us in our argument that in South

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POWER PRIVATIZATION:

Nigerians will be ultimate loser

Protesters Africa for instance, it is a private sector or in country A or B, it is a private sector. We have given Nigerians the conservative position of things that private sector can’t run this sector vibrantly. hey have been saying the public can no longer and the government can no longer. We have equally cited the case of the United State of America, where the Federal Government generates 250,000 mega watts, then; the states and the private sector generate to compliment the 250,000 because they are targeting not less than one million mega watts in the US. This is a capitalist economy and here, they are telling us it is private sector and market forces.

South African Government is neck deep in the generation and

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distribution of power in that country, I don’t know if we are better than all these examples we are mentioning, including Egypt. The private sector is only plays complimentary role. We are providing useful information for Nigerians and if those driving this privatization agenda trust themselves and their facts and if they are not hiding anything, why are they not calling for national debate.

Why can’t even the senate, summon the parties so that we put this our argument across on how best to run this sector? “ According to Ajaero, “We have been making our points and these points are hitting them. The points we have been making have not changed. We have not gone beyond telling what we believe to be the truth and the best for Nigeria in the long

run. We don’t want to say, but we told you, that would leave Nigeria in perpetual lamentation. At that time, they will tell us that electricity is not for the poor.

Because if we turn it to the private sector, the private sector who is driven by profit maximization will not bother to take power to your village and mine as well, because those in the villages will even not pay the private sector price.” n if they there has been any attempt to compromise him, Comrade Ajaero declared, “it depends on what you mean by compromise. It is not hidden that I have not agreed with their own line of thought and there is a general notion that everybody has a price. Well, I am saying that my own price is zero tag. So, it is no price tag. I want to say this, if we

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had succumbed to maybe the monetization of 50billion being killed, maybe I would have gotten something from it. Let us talk about the arrears, even the issue of 12.5 percent, if we had succumbed, maybe I would have had something from it and the workers would have suffered. I am using this as a general notion. If I have collected kola, like some people would say, maybe, we would be somewhere and Nigeria would have suffered for it.”

“I am not saying I am a saint, I am not. This issue is clear. You must hear from us if we must hear from you and we all agree, then we move into it. If you are able to convince us, we will even give you more support and canvass it.

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Solid Mineral Oscarline Onwuemenyi

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BUJA – The F e d e r a l Gover nment has noted that contribution by the solid mineral industry to the nation’s economy may have risen to about 11 percent in the past one year.

The drastic rise from less than three percent over the years has been attributed to the recent reforms in the sector, which has enhanced operations within the sector as well as paved way for private investment by foreign and local companies.

The Minister of Mines and Steel Development, Arc. Mohammed Sada, stated this in an interview with our correspondent in Abuja, in the background of the Public Presentation of the Interpretation Products of the Airborne Geophysical Survey of Nigeria Phase 2 and Geological Survey by the Nigerian Geological Survey Agency, NGSA. Sada noted that, “Nigerians are already benefitting from the reforms in the mining and minerals sector. The reports we are getting now is that the contribution of the sector has risen to about 11 percent.

“Go out there and see: people are making a lot of money from mining in the country. This is why despite the supposed dangers that are associated with the activity, many more people are going into the sector and making a lot of money.

“The benefits to individual operators are apparent, but what we need to do is to streamline the process properly, and to find ways to make it contribute more to the coffers of government.”

He added that, “We also know that there is a lot of revenue coming from the sector that is not declared nor accounted for by the operators. Our work is to ensure more effective regulation that will ultimately improve efficiency and accountability as well as reduce or eliminate corruption.”

He explained that most of the small and artisanal mining activities still remain informal and therefore does not remit much to the Federal government in forms of tax and royalties, adding that his

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Solid mineral’s contribution to GDP rises to 11% —Minister backs NEITI audit of sector

Copper Ore

ministry ’s focus was to improve regulations that would make it easy for small and artisanal miners to be formalized.

According to the Minister, the solid minerals sector remains one of the fastest growing sector in the economy, with the potential of replacing oil as the major source of revenue to the government.

He noted that, “Nigeria we all know is richly endowed with a wide range of solid minerals which, if properly managed and exploited, has the potential of becoming the springboard of our non-oil economic growth. Of remarkable importance is the fact that ere is no state in the country without the presence

As of today, more than thirty-eight foreign companies holding 421 exploration licenses have commenced exploration activities in the country, adding that the first major gold mining company was already operating in Osun State of at least one type of solid mineral deposit.”

He added that by its nature,

the mining industry has a capacity for both backward and forward value chains that can sustain wealth creation, employment generation, poverty reduction, development of rural communities, and production of feedstock for local industries.

Sada explained that as of today, more than thirty-eight foreign companies holding 421 exploration licenses have commenced exploration activities in the country, adding that the first major gold mining company was already operating in Osun State, Messrs Retel Mining Limited, where the occurrence of over 620,000 ounces of gold has been established by the firm.

T h e M i n i s t e r acknowledged that a lot of revenue coming from the sector is lost due to poor monitoring and ineffective structure, noting that most of the discrepancies within the would be corrected with the proposed audit of the industry to be conducted by the Nigeria Extractive Industries Transparency Initiative (NEITI).

“On the Ministry, we have also inaugurated a committee on revenues to help the government focus o n ex p a n d i n g r e v e n u e collection from the sector to enable government provide those infrastructural services that are needed to build a more vibrant economy,” Sada added.

Solid Mineral

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Oscarline Onwuemenyi

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few weeks ago, while hosting the Canadian Deputy High Commissioner to Nigeria, Mr. Jean Gauthier, in preparation for Nigeria’s attendance in the Prospectors and Developers Association of Canada, PDAC, Convention holding in Toronto Canada, the Nigerian Minister of Mines and Steel Development, Arc. Musa Mohammed Sada wondered aloud what was wrong with the nation’s mining sector that it was yet to attract the biggest and most beautiful brides – namely major international players in the mining industry – into the country.

His wonderment stems from his position that the country, and the government, has done everything possible “to create the right regulatory environment for private investors to come and do business in Nigeria.”

Speaking about Nigeria’s proposed participation at the PDAC, Sada noted, “We have been going and coming back for many years – many Ministers before me have attended - and when we look around we don’t see anybody. This time we want to go and meet with the right people, so that when we come back we shall expect a trail of the right kind of investors behind us.” He therefore craved the advice of Mr. Gauthier, noting that, “We want to meet with you for advice so that we make sure that when we go to such international fora, we will do the right thing and attract the right investors.” ndeed, as the Minister pointedly noted, many a delegation from the country to a mining conference – usually a large retinue of gover nment officials and their aides, some of which have little or no business with mining – have almost, always missed the mark when it comes to attracting the right kind of investment into the sector.

He joked that, oftentimes, due to the large gathering of people from all over the world to such conventions, government officials are left bewildered and have been wont to pitching to the

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Miners at work

The trouble with Nigeria’s mining sector wrong crowd.

He remarked that reports of insecurity in some parts of the country were hardly to blame for the poor turn-out of investors. “For many years, in spite of negative reporting about some events in the international media, we are yet to hear reports of any investor that has packed up and left due to insecurity. So we know the challenge is deeper that what many perceive it to be within the sector. We intend to go and tell the story, and we will be very glad to answer any question that might come up about our industry,” Sada stated.

It should be noted that the drastic decline of mining prominence and contribution

to the economy started with the discovery of oil in the late 1950s. The country has gone from being one of the world’s largest producer of Columbite and the sixth largest producer of Cassiterite (tin), to a net importer of solid raw materials for our industries, often with serious consequences.

During the period of neglect, for instance, the mining sector was beset with illegal mining, smuggling of gemstones and other high value minerals.

Also, the country suffered from the loss of local and international expertise, loss of r e v e n u e s i n t a xe s a n d royalties and the degradation of the environment.

O v e r t h e y e a r s , gover nment’s policy on mining has fluctuated from

encouraging private sector participation to direct government participation (hence the establishment of the Nigerian Mining Corporation) and numerous other government agencies to regulate the sector. fficials have ex p l a i n e d t h a t government’s direct participation was principally driven by a need to fill the vacuum created by the exit of the foreign companies engaged in mining with the breakout of the Nigerian Civil war.

However, what cannot be debated is that the once viable sector has been bogged down due to inefficient systems and practices and the immense

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opportunities missed to capitalize on the upswing of commodity prices.

However, over the past few years, gover nment has shown its desire to revamp the sector and re-launch development of mineral resources as a viable option for the diversification of the e c o n o m y. T h e Fe d e r a l government has argued that due to its reform within the s e c t o r, t h e c o u n t r y i s currently on the path to market-led or private sector orientation. “As a result of the government’s recognition of the critical role of mining, the good days in the mining sector are coming. This recognition is even more so, given the direct link between solid mineral development and the Vision 20:2020 framework,” the Minister stated.

Freight

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Anchor Tug Vessels

Kaztec acquires $500m anchor vessels Clara NWACHUKWU

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a z t e c Engineering Limited, a subsidiary of the Chrome Group, has acquired the new anchor vessels for onshore, offshore and deep water oil and gas services.

The anchor vessels are valued at about $500million, and will complement the existing of vessels in the kitty of Kaztec, an indigenous oil and gas service company.

The anchor vessels, christened, Ekulo Explorer and Ekulo Spirit, the Chairman, Chrome Group, Sir Emeka Offor said, are utility vessels that will be used for various purposes and were delivered to the company at the Calabar Port at the weekend.

He explained, “They can be used to store materials, pipes and other drilling materials for both onshore and offshore services.”

The Explorer is the bigger of

the two with a capacity of 6,000 horsepower, while the Spirit is about 4,4000HP. He disclosed that the group also planned to acquire additional three vessels that will cover the whole value chain of services in Nigeria’s oil and gas sector.

“The vessels can move barges as well as other materials like pipes and it made a lot of business sense to have them, to move the Ekulo Cheyenne around, run anchors and move around the fields,” he said. he chairman added that the group has a base and a warehouse for the parking of the vessels in Calabar, Cross River State.

The Chief Technical Officer, Mr. Dan Nicholson, disclosed that to consolidate on the huge investments in vessels, the group planned to construct its own base in Akwa Ibom State, which “ will be used to manage our fleet of vessels.

“At the base, we plan to have line pipe manufacturing, coating, fabrication and all the utility systems that go with

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them. It will be a complete base that will coordinate all of our offshore projects.”

Since the company is planning to extend its services to the deep water arena, Nicholson, noted that all the vessels will complement the move to the deepwater.

With regard to maintenance, he said that all the crew for the vessels has been trained on what to do at every particular point in time, in terms of what is required for their maintenance and amount of fuel required for specific distances.

Although, Kaztec will use the vessels for other oil and gas services, Nichiolson, however, this will be under contract with the oil service firm.

With regard to local content, he said that the company is 100 percent dedicated to the Nigerian content policy, as 67 percent of the workers are Nigerians, while all the suppliers and foods eaten aboard the vessels are also Nigerian.

He said that given Kaztec’s capacity in terms of material, people and equipment, all that

was needed now is more support from the international oil companies, IOCs, as the company will soon be done with the Addax Petroleum projects.

The offshore project, which is being executed under a three year contract, involve a number of projects including pipe laying of various sizes as well as the installation of at least five topsides and a host of other jobs will be completed before mid year. n this regard, “The Nigerian National Petroleum Corporation, NNPC, is assisting us in arranging a meeting with the IOCs, to give us the privilege of presenting the company to them and show them what we can do.”

The Safety Manager of the company, Mr. Kingsley Eke, on his part noted that the two anchor tugs have a boiler capacity of about 60,000.

“This enables them to pull heavy weight items, carry barges of up to 800,000 tonnes, and we are the only company with such a capacity

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in the country.”

Apart from their ability to supply water and fuel, and tug services, the safety manager said the vessels also offer accommodation services for up 20 people, in highly comfortable and fully airconditioned rooms in line with international maritime standards and another 20 on board.

According to him, “These vessels are multi-purpose vessels that can work in shallow water of below 5 meters and deep water of up to 40 meters.”

Furthermore, he said the vessels are equipped with the latest marine technology, such that effluents from the engine cannot pollute the environment, which he rated at almost zero.

“The system is so mechanized that it recycles waste, using biological system, such that once discharged, will not have any effect on the aquatic life,” Eke added.

Nigerdock

Freight

42 NIMASA rakes in N247m from Cabotage levy in Delta ports

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Coast Patrol team

Coast guard creation is not my priority —NIMASA’s Director General Godwin ORITSE

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H E management o f t h e Nigerian Maritime Administration and Safety Agency (NIMASA) has said that the creation of a Coast Guard to secure the nation’s maritime domain is not its priority.

Speaking with Sweetcrude in Warri, N I M A S A’ s D i r e c t o r G e n e r a l M r. Pa t r i c k Akpobolokemi stated that the Act setting up the agency is very explicit on the matter of the protection of the maritime

environment.

Akpobolokemi also stated that NIMASA can interface with any organisation as long as due processes are followed.

He stated that if the Government deems fit to set up a Coast Guard let the government do that.

He said: “That is not our priority right now, you know our Act is very explicit, we can interface with anybody, with any organization, following due process.

“The Nigerian Navy and other security agencies are there; let us not rush into Coast Guard issue “If it is the interest of the Federal Government to set

up a Coast Guard, that should be the decision for the government, it is not NIMASA. “For now the civilian operation in the maritime sector is what we are interested in, the limitations we have is that we cannot carry arms and ammunition so we bring in the Navy to do that aspect for us and that is essentially what we are doing..

“The Navy will come and board these platforms that we are acquiring, in a way we are helping the Navy to secure our maritime domain.

“That gap that has been created for ten to twenty

years is being closed and our relationship with the Navy is going to be reenforced” It would recalled that the Nigerian Association of Master Mariners along with other stakeholders kicked against the concession of the Nigerian Maritime domain to a private firm Messrs Global West Vessels Specialist Limited purportedly owned by an ex-militant.

The mariners rather called for the creation of Coast Guard which they described as international best practice in the maritime trade.

HE Central zone of the Nigerian M a r i t i m e Administration and Safety Agency (NIMASA) last year raked in over N247,927, 904 from Cabotage levy, waivers and other charges Disclosing this in Warri r e c e n t l y, t h e Z o n a l Coordinator of the Central zone of NIMASA, Mr Akin Akinyosoye said that besides the large number of Cabotage vessels that called at the Delta ports, 4 of them were detained for failing to meet set standards.

Akinyosoye who made this presentation during the visit of NIMASA’s Director – G e n e r a l M r. P a t r i c k Akpobolokemi also noted that while 501 vessels passed the flag state control, 40 of such vessels went through the port state control.

He further disclosed that three different examinations were conducted for 399 seafarers at the zonal level adding that out of the number, 265 were successful He explained that the youth restiveness in the zone was responsible for the low patronage of Cabotage vessels.

Akinyosoye however noted that shipping activities in the is gradually gathering momentum, adding that at the end of this, the revenue generation of the zone will surpass that of last year.

Akinyosoye commended the efforts of the Commanding Officer of the NNS Delta in collaborating with the zone, in the enforcement of Cabotage law and detention of unseaworthy vessels.

Assuring staff of the zone of headquarters’ support to enhance their operations, Akpobolokemi stated that all necessary platforms needed to meet the challenges will be provided to them soon.

The Delta ports consist of the ports in Warri, Koko and Sapele while terminals under the zonal operations includes Forcados, Pennington, Escravos, Erah, Abo, Okono and Okworie.

Freight

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Pirated CDs

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OLLOWING the successful hosting of an international conference on piracy in London this week, U K Prime Minister David Cameron yesterday pledged a crackdown on Somali pirates and their “kingpins” who demand ransom for cargo vessels and their crew.

Cameron at the end of the conference announced the creation of an international taskforce on pirate ransoms.

A F o r e i g n a n d Commonwealth Office (FCO) statement said: “This will bring together experts from across the world to better understand the ransom business cycle and how to break it. We will be working with international partners over the coming weeks to set out the structure

UK Prime Minister announces piracy task-force and approach of the taskforce.”

The conference was attended by 55 delegates from Somalia and the international community, including Ban Ki-moon, Secretary-General of the United Nations and US Secretary of State Hilary C l i n t o n .

Other action from the conference included British Foreign Secretary, William H a g u e a n d Ta n z a n i a n Foreign Minister Bernard Membe signing a M e m o r a n d u m o f

Understanding allowing the UK Royal Navy to transfer suspected pirates to Tanzania to be prosecuted. he UK served notice it will continue to work with other states in the region to secure similar agreements.

Somaliland also signed a ground breaking agreement with the Seychelles yesterday to transfer convicted pirates to prisons in Somaliland – the first transfer of 19 convicted pirates is likely to take place by the end of March.

And on Tuesday, Foreign Secretary William Hague

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announced that the UK was to provide the Director and £550,000 for the construction of a new Regional AntiPiracy Prosecutions Intelligence Co-ordination Centre, based in the Seychelles.

The FCO said: “That centre will co-ordinate and analyse intelligence to inform law enforcement operations, ensuring we hold to account not just individual pirates, but those who finance and enable huge pirate operations.”

It added: “We want to see a seamless cycle of justice where pirates are caught at sea by the Royal Navy,

prosecuted in regional states and imprisoned in Somalia.”

However, the conference failed to mention the plight of seafarers, according to a spokesperson for the c a m p a i g n g r o u p SaveOurSeafers.

“We’re concerned by some of the comments Hilary Clinton and David Cameron made about creating an international task force to discourage the payment of ransom to pirates and other groups to eliminate the profit motive.

“This is deeply alarming, as it may hinder the payment of ransom for ships and seafarers, which is currently the only way shipowners can ensure the ultimate safety of hijacked seafarers.”

Technology

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Fuel dispensers

Jim-Rex Lawson MOSES INTRO

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fuel dispenser is a machine at a filling station that is used to pump gasoline, diesel, ethanol fuel, kerosene, or other types of fuel into vehicles.

The first gasoline pump otherwise known as fuel dispenser was invented and sold by Sylvanus F. Bowser in Fort Wayne, Indiana on September 5, 1885. But this pump was not used for automobiles, as they had not been invented yet. Instead, it was used for some kerosene lamps and stoves. He later improved upon the pump by adding safety measures, and also by adding a hose to directly dispense fuel into automobiles. For a while, the term bowser was used to refer to a vertical gasoline pump.

The term is still used in Australia and New Zealand, Pe t r o l p u m p s i n Commonwealth countries, and gas pumps in North America. Many early gasoline pumps had a

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hotter countries, where suction pumps may have problems overcoming cavitation with warm fuels or when the distance from tank to pump is longer than a suction pump can manage.

In modern pumps, the major variations are in the number of hoses or grades they can dispense, the physical shape, and the addition of extra devices such as pay at the pump devices and attendant “tag” readers.

Nozzles are attached to the pump via flexible hoses, allowing them to be placed into the vehicle’s filling inlet.

The hoses are robust to survive hardships such as being driven over, and are often attached using heavy spring or coil arrangements to provide additional strength. The nozzles are usually color coded to indicate which grade of fuel they dispense, however the color coding differs between countries or even retailers.

One of the most important functions for the pump is to accurately measure the amount of fuel pumped.

Flow measurement is almost always done by a 4 stroke piston meter connected to an electronic encoder. In older gas pumps, the meter is physically coupled to reeled meters, while newer pumps turn the meters movement into electrical pulses using a rotary encoder. he technology for communicating with gas pumps from a point of sale or other controller varies widely, involving a variety of hardware and proprietary software protocols.

Traditionally these variations gave pump manufacturers a natural tie-in for their own point-of-sale systems, since only they understood the protocols. An effort to standardize this in the 1990s resulted in the International Forecourt Standards Forum, which has had considerable success in Europe.

The Fuel Dispenser T calibrated glass cylinder on top. The desired quantity of fuel was pumped up into the cylinder as indicated by the calibration. Then the pumping was stopped and the gasoline was let out into the customer ’s tank by gravity. When metering pumps came into use, a small glass globe with a turbine inside replaced the measuring cylinder but assured the customer that gasoline really was flowing into the tank. modern fuel dispenser is logically divided into two main parts — an electronic “head” containing an embedded computer to control the action of the pump, drive the pump’s displays, and communicate to an indoor sales system; and secondly, the mechanical section which in a ‘self contained’ unit has an

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Early designs: Two types of Shell gas pumps at Soulsby Service Station in Mount Olive, Illinois, USA. Courtesy of Wikipedia

electric motor, pumping unit, meters, pulsars and valves to physically pump and control t h e f u e l f l o w .

In some cases the actual pump may be sealed and

immersed inside the fuel tanks on a site, in which case it is known as a submersible pump. In general submersible solutions in Europe are installed in

U n d e rs ta n d i n g th e M o d e r n F u e l Dispensing Machine Since their origin, pumps have been artfully streamlined into designs aesthetically appealing and crafted with mechanical precision, controlled by rapidly advancing computer technology, giving drivers CONTINUES ON PAGE 45

Technology

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The Fuel Dispenser

sale and the maximum sale that can be recorded vary between different models of the gasoline pump converter, for e.g.: in case of VR-10 gasoline pump converter provides N97.00 per revolution. This entire unit is a microprocessor based device, where the per unit price is maintained in the microprocessor registers and based on the logic incorporated and the quantity of fuel consumed it increases the counter of the register and displays the price on the analog or digital billing screens of the dispensing machine.

External devices quite often make use of asynchronous serial communication protocol to communicate with the billing unit.

Continued from page 44 alternative ways of paying for their purchases. Today ’s dispensers make it easy to pay and pump at the same time, relieving the need to deal with an attendant.

Dispensers used today have much higher flow rates, which means customers, can get on their way quickly.

Flow rate means the time it takes a mechanism located in an underground tank to pump a certain quantity of gasoline or diesel through a dispenser. In present day world the pump lies deep in a tank and is hooked to every d i s p e n s e r, m a k i n g t h e dispenser very smooth and quiet.”

S Understanding the Modern Fuel Dispensing Machine omponents of a Fu e l D i s p e n s e r A typical fuel dispensing station has a complicated system of tanks, pipes and computer technology. A meter underground sits large tanks that hold between 25,000 and 50,000 liters of various grades and types of fuel. When the customer selects a grade, fuel begins to travel from the tank to his or her vehicle. There are two prominent types of pumps which are used for pumping this fuel namely suction pumps or submersible pumps. The fuel hurtles up through the system, emptying into a flow meter - a chamber that could be made out of cast iron or aluminum, depending on the machine. s it flows through the metering chamber into the hose connected to the vehicle, a complex gear system tells the computer exactly how much fuel is being dispensed. This gear system consists of the Positive Displacement (PD) meter and the counter which have been explained in further detail in the subsequent paragraph. A fuel dispensing pump has three main components. The first is a pump that actually pumps the gasoline out of the tank. The second is the PD m e t e r, o r a p o s i t i v e Displacement Meter that the gasoline flows through. It

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Modern design: Hydrogen station pump. Courtesy of Wikipedia

works a bit like a revolving door in a way that every revolution of the revolving door a fixed very accurate volume of gasoline goes through it. The speed of the pump may vary but the PD meter will always measure an exact quantity of gasoline.

The gas gets pushed through the meter, and there are going to be pistons or a simple rotor that is going to turn. For every turn of the rotor, there is a certain measurement depending on t h e m e t e r, a n d t h a t measurement is going to then signal to the register in front of you how many Naira and how much volume have gone through. This is the third part which is a counter that takes the information from the PD meter and converts it into litters and Naira and Kobo.

Capacity Detector There is a system which works to detect as to when the tank is full. It works by sending small pulses of gasoline through the line. If there is still air in the tank, the pulses are dissipated in

the tank, if the tank is full; the pulse is returned through the hose and detected. When the return pulse is detected it stops the pump. One of the major difference between the fuel dispensers used today and the earlier ones is the mode used to pump in the fuel, though the motors used and the billing system has not undergone any significant changes but the earlier dispensing machines were more manual it terms that the lever needs to be released once the tank is full else the oil spills over. But today ’s dispensers automatically stop the fuel outflow once the tank is full. illing Mechanism in Fu e l D i s p e n s e r s The billing mechanism in fuel dispensing systems is controlled by Mechanical or Electronic meter registers.

These registers make up the gasoline pump computer which is responsible for the functioning of the entire billing mechanism of a fuel dispensing systems. The minimum price increments that can be made for each unit

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ypes of Fuel Dispensing y s t e m

There are different parameters based on which fuel dispensing machines are classified right from the type of fuel pump used say suction pumps or submersible pumps, as multi fuel or single fuel dispensing machine, based on the technical specification of the pumps.

Pertaining to our reference the most prominent way to classify would be as a touch screen machine where in the dispensing machine acts as a POS terminal to be self operated by the consumer and a normal fuel dispensing machine.

Back End Servers and Dispensing Machines There are different modes which are used to communicate between the

fuel dispensing system and the back end servers which would be used to store and process the data; this could be through secure IP network, through LAN or telephone line connection to communicate between the unit placed on the dispensing machine and the back end servers. In certain instances the overhead device on the fuel dispensing machine would transmit the messages to a host computer through a serial communications port.

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Fuel Dispenser’s of u t u r e

The fuel dispenser’s of the future are expectedly supposed to be much more user friendly than the ones a v a i l a b l e t o d a y. T h e y supposedly would provide enhanced multimedia services by using features like touch screen monitors (some of which are already in the market). These would be innovative POS solutions, not only would it be easy for the consumers to buy fuel, but would also give an opportunity to the vendors to promote additional offers and services. Motorists can also gain extra value by accessing information such as traffic news and weather while refueling at the Multimedia Dispensing Solution. These innovative dispensers would use touch screen technology to help users access the extensive functionality of the dispensers, and navigate the many options and functions quickly while refueling.

These laminated sensors senses touch by d e t e c t i n g capacitance changes in an array of micro gauge c a p a c i t o r s embedded within the body of the laminate. Hence in time to come though the internal mechanism of fuel d i s p e n s i n g machines are not expected to change, but revolutionary changes are expected in the way end customers interacts and uses these machines.

Modern design: A pump, manufactured by Dresser Wayne, in Greece. Courtesy of Wikipedia

46 Scholar blames traditional institutions for community conflicts Jimitota ONOYUME

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Protesters

Ijaw group threatens to cripple Chevron’s operations Festus AHON

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ARRI T H E I j a w, under t h e a u s p i c e s o f Gbaramatu/Egbema Host Communities Welders and Fitters, Escravos, have vowed to cripple the operations of Chevron Nigeria Limited (CNL) over alleged failure of the company to convert Ijaw welders and fitters to permanent staff.

The group, in a letter addressed to the Chairman/Managing Director of CNL, said unless their demands were met in the shortest possible time, they would shut down the operations of the CNL at Abiteye, Otunana, Makaraba, Dibi, Olero and Opukeba flow stations.

In the letter signed by its chairman, Mr George Timiyan, and two others, the people expressed dissatisfaction with the delay in converting Ijaw welders and fitters in the employment of CNL to permanent staff in the

Ecravos Gas-to -liquid (EGTL) project.

They also complained that none of the host communities’ contractors was retained in respect of the in-house welders and fitters. lleging that some contracting companies outside the host communities were being retained by the company, they said: “We are not expressing tribal sentimental, but addressing injustice. We want an end to this neglect of Ijaw welders and fitters in fabrication jobs.”

“We are also aware that right now ED-OF Nig. Ltd. is embarking on a test to employ persons in the Escravos Tank Farm and the Ijaw welders and fitters or all other Ijaw persons have been excluded from this employment test.

“At present, none of the ijaw welders and fitters is included in the Chevron fabrication job presently handled by Gramem Nig. Ltd. We hold the view that the Escravos Tank Farm cannot stand on its own without the oil wells and flow stations from the Ijaw

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areas that are connected to it.

“It is therefore tantamount to injustice and oppression that we the Ijaws are excluded from any benefit that arises from the Escravos Tank Farm.”

“We are saying for the umpteenth time that these issues of neglect and injustice be redressed right now for fair play and peace to strive.

“We make bold to say that if nothing is done now, we will have no option than to resort to any possible means to achieve justice which is our ultimate goal and we are warning that this is a matte of urgent attention likely to cause public disturbance, breach of peace and threat to Chevron operations in Abiteye, Otunana, Makaraba, Dibi, Alero and Opukeba flow stations. “ We , t h e e n t i r e Gbaramatu/Egbema Host Communities Welders and Fitters (Escravos and Environs), wish to quickly establish the fact that we have become worn out with the inordinate delay in effecting this conversion. “ We h a v e b e g u n t o appreciate that this delay

At present, none of the ijaw welders and fitters is included in the Chevron fabrication job presently handled by Gramem Nig. Ltd.

smacks of dishonesty and delay tactic adopted by some persons in the management of Chevron Nigeria Limited to wilfully perpetuate our sufferings as youths of the Niger Delta and make us appear more like second class citizen right in the heart of our land. This also remains unacceptable.”

Contacted on phone, a top official of CNL, who p l e a d e d a n o n y m i t y, described the allegations as untrue.

O R T H A R C O U R T: T h e combination of the monarchical and presidential systems of gover nment in the country has been identified as one of the challenges before the nation. A former university don Emmanuel Ifeta who made the observation during a chat with the Sweetcrudesaid it was improper for the country to run the two systems side by side.

According to him, the monarchical system is like a feudal system, which cannot run smoothly with a capitalist system. “We are combining the capitalist, presidential, feudal and monarchical systems all at once. I don’t see how we can run the monarchical system in a presidential system because it is largely a feudal system.”

“Each of the systems has its own challenges and when we combine them we run into contradictions. Nigeria should be serious about w h a t k i n d o f government it wants to run. Combining traditional institutions with presidential system would create more problems for the setting” Continuing, he said the traditional institutions should be allowed to naturally fizzle out rather than assign constitutional functions to them.

Blaming the traditional institutions for some of the frictions and crisis in some communities he said more often they confused the system.

47 S-South youths urge oil firms to relocate headquarters to N-Delta Etop EKANEM

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Military Patrol

Community donates vehicles to JTF, Police *Navy arrests four for diesel bunkering

Jimitota ONOYUME

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O R T H A R C O U R T: TO enhance the operations of the Police and the Joint Task Force, JTF, in the Niger Delta region, the Ndoni community in Ogba/Egbema/Ndoni local government area of Rivers State has donated two patrol vehicles to the security agencies.

Chief Opene Anoblili, who spoke on behalf of the community, said the vehicles were to assist the operations of the Police and JTF in the area.

Anoblili, who is the Ugwueze of Ndoni, recalled that the Onwa of Ndoni, Chief Victor Odili, who bought the vehicles and donated them in the name of the community had earlier promised to support security operations in

the area with the vehicles.

“Chief Odili had promised on behalf of the community to assist security operatives in the area with operational vehicles. May I therefore, on behalf of the Onwa and Ndoni community formally present these patrol vehicles to you for your operational use to enable you keep security in Ndoni and ONELGA as a whole,” he said.

Adding, the President General, Ndoni community, Elder Raphael Odili, enjoined the security operatives to help curb rising crimes in the area, noting that pirates had been going round the community to steal their boats that were anchored at the waterside.

He added these pirates would shoot sporadically to wade of any resistance.

The Divisional Police

O f f i c e r, O m o k u Po l i c e Headquarters, Mr Aminu Umar, who received the vehicles for the JTF and the Police, expressed gratitude to the people for their support. e gave the assurance that they would be put to proper use just as he called for information from residents in the area to enable the security bodies completely wipe out crime and brigandage from the area.

Navy arrests 4 In a related development, four p e rs ons have be e n arrested by the Nigerian Navy for illegally conveying 80,000 litres of a substance suspected to be Automated Gas Oil, AGO or diesel.

While handing over the suspects to the Economic and Financial Crimes Commission, EFCC, Commanding Officer, Nigerian Navy Ship, NNS

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Pa t h f i n d e r, C o m m o d o r e Oyetunji Vinci Fadeyi, said they were arrested in the Okrika channel.

A barge and tug boat were among items seized from the crew that were handed over to the anti- graft agency.

Fadeyi said that at the point of arrest the crew alleged that the product belonged to the JTF Commander, but during interrogation they admitted that it belonged to them and not the JTF Commander.

Continuing, the Navy boss said the security outfit would f i g h t i l l e g a l b u n ke r i n g activities on the high sea to a standstill, adding that any one arrested would be handed over to the appropriate authority for security.

He also appealed for information from the public that would aide operations of the security outfit to tackle crime and illegal bunkering on the waterways.

A G O S —President of the South-South Youth Council, Lagos State, Mr. Tomzine Benedict, has called on oil multinationals operating in the Niger Delta region to relocate their corporate headquarters to their areas of operation.

Speaking to newsmen in Lagos, Benedict said that with their offices in Lagos and Abuja, Niger Delta youths had not benefited in terms of employment.

He contended that if there were no infrastructure on ground to absorb youths being trained in different skills through the amnesty training programme, the essence of the training would be defeated.

Benedict said: “Are they being trained to become useful citizens in the society or they are trained to go back to the creeks to resume hostage-taking and vandalisation of oil facilities?

“If there are no infrastructure to absorb them after their training, they will definitely go back to the creeks.”

He also called on President Goodluck Jonathan to ensure that the benefits of the amnesty training programme go round all the ethnic nationalities in the Niger Delta region.

Benedict, who made the call against the backdrop of protest by s o m e e t h n i c nationalities over alleged exclusion from the programme, said all youths from the region participated actively in the struggle and so none should be excluded from the amnesty training scheme for the exfreedom fighters.

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graduates in welding, which we supply to various IOCs that may wish to use their services. We also expose them to consultants involved in labour supply. The idea is to get them exposed to the labour market.”

Asked if there was any relationship between the training programme funded by the NDDC and the one being handled by the Kingsley Kuku-led Amnesty Committee in the Niger Delta, Edebiri said there was no link in any way. e further advised the amnesty committee to re-shape its training programme in welding to enjoy international acceptance, saying, “The Amnesty Committee is training people for training sake. I am not sure what standard they are using. I have tried to speak with the amnesty group to ensure they follow international standard to meet the IIW standard but for whatever reason, they have been undergoing the training their own way. We don’t know the standard they are following.”

He further noted that “it is only the NIW that is an affiliate of the Institute of International Welding, IIW that is authorised in the country to certify welders in for international acceptance.”

He added, “They are not issuing any International I n s t i t u t e o f We l d i n g certificates. I think they are just training people and issuing certificates from the training centres, which are not supposed to be. The certificate we issue is internationally recognised and tenable in the world because IIW is an umbrella body of all the welding institutes of the world of which Nigeria is a member through the NIW. So I don’t know what the amnesty committee is doing with its welders.” n efforts by the Federal Government to revitalise the nation’s refineries, he lauded the move just as he called on the government to set up a monitoring team to ensure those handling the job work to specification.

He further called on the government to use the opportunity to promote its local content drive.

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Welder

NDDC train Niger Delta youths on welding Jimitota ONOYUME

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O R T H A R C O U R T: NIGER Delta Development Commission, NDDC said it has trained 40 youths as Inter national We l d i n g I n s p e c t o r s , i n Turkey, to enhance manpower and skills development in the nation’s oil and gas industry.

The programme, was handled by its technical p a r t n e r, t h e N i g e r i a n Institute of Welding, NIW. Commenting on the development, President of the NIW, Mr. Solomon Edebiri, said the move will enhance indigenous participation in the industry.

Ac c o r d i n g t o h i m , a s international welding

inspectors, they have been trained in construction, testing, formation and design, adding that they would continue to be relevant to the economy on matters relating to exploration.

“As long as we continue the process of extraction of oil and hydrocarbon in the ground, we will continue to need international welding inspectors. Because the hydrocarbons would be transported through conduit lines and this is constructed with steel. So they have to be on ground to ensure the jobs are done to specification.”

He said the training process lasted about six months from selection stage to graduation, noting that participants were

drawn from the nine member states of the NDDC. “NDDC said they needed people across the nine states and it must be balanced with their oil producing quota, but to a certain level. Another thing we did was to ensure there was a selection process, which included aptitude test.

And all who came tops were selected, but in all, they came from the nine states of the region,” he said. hen asked if the Commission or its technical partner, NIW would secure jobs for the graduates, he explained that the new graduates would always be economically useful to themselves before the jobs would come, adding the partners are liaising with the Nigerian Local Content Development Board,

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NCDMB and other stakeholders in the region to create employment opportunities for them. “ We t r y t o i n v o l v e stakeholders in this regard.

We a r e a l s o w o r k i n g extensively with the Nigerian Content Development Board.

Some of them have also been engaged in Escravos and the United Kingdom.

International welding inspection is a very lucrative area; I don’t see how they can’t be economically productive whether employed or not,” he said. ontinuing, he said the NDDC has set up a data bank for its trainees and occasionally push them to the international oil companies, IOCs, and consultants involved in labour supply.

“We have a data bank of our

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Unilag Consult FP

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Oil Exploration

Speaker decries negative impact of oil exploration Samuel OYADONGHA

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enagoaSPEAKER of the Bayelsa State House of Assembly, Konbowei Benson, has blamed the fast degrading environment in the Niger Delta region, on unwholesome oil and gas exploration activities of multi-national oil companies.

He said the operations of the companies have negative implications for the marine life and coastal vegetation.

Benson made the observation when he accompanied the State Governor, Seriake Dickson,

The Speaker who said the affected communities have no choice than to consume contaminated fishes, expressed fears of possible health problems, which may further compound the economic damages in company of President Goodluck Ebele Jonathan, to Koluama communities to

assess the level of damage, resulting from the January 16, gas rig explosion at Chevron’s Funiwa field.

He noted with sadness that the Niger Delta region has suffered too many pains, as a result of oil exploration and exploitation activities. hile lamenting the high rate of gas flaring in the region, he expressed fears that the recent gas explosion at Koluama and neighbouring communities in Southern Ijaw local government area of the state, could affect livelihood and expose the affected communities to increase risk of premature deaths, child respiratory illnesses, asthma and cancer.

He regretted that the

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people of the region have also had to contend with oil spillage, noting that leaking pipelines, running through villages, farms, creeks and rivers in the Niger Delta have become a major source of pollution, causing sicknesses and economic ruin in its wake.

The Speaker who said the affected communities have no choice than to consume contaminated fishes, expressed fears of possible health problems, which may further compound the economic damages.

He argued that the vast majority of Nigeria’s oil and gas was produced in the Niger Delta, generating billions of dollars for the N i g e r i a n e c o n o m y,

reiterating that the environmental problems in the region have not been attended to by the oil companies and the relevant authorities. e noted that the environmental degradation caused by the depletion of natural resources, such as air, water, and soil leading to the destruction of the ecosystem and the extinction of wildlife, has become a global concern.

He re-iterated that oil facilities and operations were being located around key ecological areas, including important fishing grounds, mangroves and tropical rainforest in Bayelsa state.

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their resolve to collaborate with the governor the boss said, “ you have shown us your direction already. You have shown us your action plan. And from your inaugural speech, you have shown also. On the part of the Local Government, we want to assure you of our unalloyed support and loyalty. “On our part, may be to some of us, we have not been this close, that is political any way. If you want us to serve, we can serve. We are loyal and committed. We believe you are here to serve the people and you have demonstrated this several times. On behalf of the Local Government Chairmen, we are here to support this government and to the best of our abilities and we will support you the way you wanted it. We will at all time you call us, any time you call, we will come because we have no option than to serve our people.� runimighe said they would join hands with the security forces to confront the problem of illegal refining which is further d e v a s t a t i n g t h e environment.

Other Local Government Chairmen in attendance include the reinstated Kolokuma-Opokuma Council boss, Ebikitin Diongoli, Waribugo Sylva of Nembe and Peres Peretu of Sagbama.

Governor Dickson assured that a task force would be set up in the state to tackle cases of pipeline vandalism and illegal refining activities in the state.

The governor noted that illegal oil bunkering not only constitutes economic sabotage but is also causing widespread environmental degradation of the area.

Governor Seriake Dickson informed the Council Chairmen that the illegal activities were again confirmed recently during an over flight of the area with refining activities going on.

The Governor who said the task force will set up machineries to enlighten the people of the area on the inherent danger associated with pipeline vandalism, stated that illegal bunkering was not doing any good to the environment.

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Illegal refinery

Bayelsa Council Chairmen to tackle illegal refinery operators Samuel OYADONGHA

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enagoa TROUBLED by the ongoing large-scale environmental despoliation being unleashed on the already fragile Niger Delta ecosystem, the chairmen of the eight local government councils in Bayelsa State have promised to assist the state government to tackle illegal bunkering and illegal refinery business in the riverine enclave of the state.

Southern Ijaw in the heart of Bayelsa which is one of the largest local government areas in the federation and Ekeremor council area in the West Senatorial district are the hot bed of illegal bunkering and illegal

refinery business in the predominantly riverine state.

The labyrinth of creeks in the deep mangrove swamp of Southern Ijaw and Ekeremor council areas are facing some of the worst environmental challenges inflicted by crude oil thieves and illegal refinery operators.

Though the Joint Task Force in the Niger Delta, Operation Pulo Shield have repeatedly raided and destroyed the illegal refinery sites in the creek, it is still business as usual for the crude oil thieves and illegal refineries operators, many of whom are operating and living side by side with the natives. t an inaugural interactive meeting between the Local Government Chairmen and

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the Governor held in Government House, Yenagoa, the Chairman of Southern Ijaw Local Government and Chairman, Association of Local Government of Nigeria, ALGON, in the state, Tiwei Orunimighe reiterated the readiness of the councils to collaborate with the state government to curb the thriving, but environmentally unfriendly illicit trade.

The meeting was held at the instance of the Governor to address certain issues bothering on Local Government Administration and activities of illegal oil bunkerers and illegal refinery in Southern Ijaw and Ekeremor council areas. he state ALGON boss, Orunimighe, assured that the Local Government

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It is still business as usual for the crude oil thieves and illegal refineries operators, many of whom are operating and living side by side with the natives Chairmen, were ready to sustain the security level in their respective council areas.

Assuring the governor of

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Samuel OYADONGHA

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enagoa WHEN the contract for the Ye n a g o a OporomaUkubie road project was awarded to construction giant, Julius Berger by the Chief Timipre Sylva administration in 2008, expectations were high that it would transform the fortunes of the oil and gas rich but neglected communities of Southern Ijaw local government area of Bayelsa State, but today the project hangs in a balance.

Southern Ijaw which can only be accessed by water, is one of the biggest local government areas in Nigeria, has some of the biggest crude oil clusters in the Delta and is home to oil majors like Shell Petroleum Development Company [SPDC], Nigerian Agip Oil Company [NAOC] and Chevron Nigeria Limited [CNL].

Many Bayelsans, especially indigenes of the area had hailed the road project as a bold step by Government that would boost efforts to diversify the state’s mono product economy.

The project, they argued would not only trigger massive infrastructural development in the hinterland, improve the security situation in the far flung communities currently being exploited by pipeline vandals and crude oil thieves, but also boost commerce as the peasant farmers could easily convey their produce to the big market in Yenagoa and neighbouring Warri and Port Harcourt as against the cur rent practice where wealthy traders come down to buy their harvest at ridiculous price only to return to the cities to make huge profit. n t e r e s t i n g l y, t h e Ye n a g o a - O p o r o m a Ukubie road is one of the three senatorial roads designed to open up the hinterland of the state said to have been on the Federal Government drawing board since the sixties,but nothing tangible was done until the first civilian governor of old Rivers State, Melford Okilo now deceased, mustered the political will and began the sand filling of the road before the Second Republic was

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Yenagoa-Oporoma-Ukubie road project hangs in a balance

Road under construction

terminated by a coup in 1983. he other two roads are, the SagbamaEkeremor-Agge road, designed to open the far flung communities in the West Senatorial district and the Ogbia-Nembe road, to accelerate development in the East Senatorial district.

It was only after the establishment of the Niger Delta Development Commission (NDDC), that work began on the construction of the SagbamaEkeremor-Agge Road.

Though the project has since been abandoned due to allege lack of funding by the Federal Government, that of the Ogbia-Nembe being handled by NDDC and the Anglo-Dutch oil giant, Shell Petroleum Development Company is ongoing, but at snail speed while, the 42km

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The project has since been abandoned due to allege lack of funding by the Federal Government, that of the OgbiaNembe being handled by NDDC and the Anglo-Dutch oil giant Nembe-Brass which was awarded at N42bn, though cleared, had been abandoned.

It was therefore a thing of joy

for the people of this rich oil and gas, but undeveloped council, when the Goodluck Jonathan administration revived the project by starting the construction of a bridge across the Ekoli Creek as a first step towards the actualization of the road project linking the Central Senatorial district to mainland Yenagoa. he hope of the people of having to drive to their communities in a record short time, received a boost, when the Timipre Sylva administration awarded a N38 billion contract for the construction of the YenagoaOporoma-Ukubie road to Julius Berger.

Chief Sylva had while awarding the contract reiterated the determination of his administration to leave behind a legacy ever y

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Bayelsan and the entire Ijaw nation would be proud of.

He assured that greater attention would be accorded road construction in the state, stressing that when the multi billion naira project was completed, it would impact positively on the socio-economic well-being of people in the hinterland and improve the security situation in the area.

But four years after, the project has turned out to be a “tall dream. The construction company, Julius Berger was forced to pull out of the Niger Delta and by extension the state at the height of youth militancy and death of their expatriate staff.

The sand filled portion of the road to Ayama is already giving way due to erosion and the swampy nature of the terrain.

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Emma ARUBI

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ARRI—THE Presidency has o r d e r e d Chevron Nigeria Limited to provide stable and sustainable power supply from the Escravos Tank Farm to oil-rich Ugborodo a n d G b a r a m a t u communities in War ri S o u t h -We s t L o c a l Government Area of Delta State as part of its corporate social responsibility.

The directive was given in Abuja, after a marathon meeting with stakeholders at the Presidency. The meeting was presided over

by Vice-President Namadi Sambo.

Present at the meeting were Governor Emmanuel Uduaghan and some Gbaramatu youth leaders as well as representatives of Chevron.

The Ijaw/Itsekiri youth leadership also agreed that with this, work on the multimillion naira Escravos-GaS

Presidency orders Chevron to provide electricity to Delta oil communities pipeline project being executed by Fenog Nigeria Limited, which was stopped by the a g g r i e v e d communities, would resume immediately. t was gathered that Chevron has over 90 megawatts of power output of which only 40 megawatts is currently in use and the balance is kept in reserve while her immediate host communities of Ugborodo and Gbaramatu wallow in darkness.

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Electricity transformer

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Oil spillage

Oil spill devastates 100 Gbarmatu communities —Monarch Emma AMAIZE & Akpokona OMAFUAIRE

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ARRI T H E monarch o f Gbarama tu kingdom in Warri South – West Local Government Area of Delta State, HRM, Godwin Bebenimibo, Ogeh Gbaruan

II, has petitioned the National Oil Spill Detection and Response Agency, NOSDRA, over the December 20, 2011, Shell Nigeria Exploration and P r o d u c t i o n C o m p a n y, SNPECo, Bonga FSPO oil leak, alleging that over 100 communities in his kingdom were devastated by the spill.

In a petition, signed by

Chief Alfred Bubor, Chief J.G.B. Ari and Sir Clark Gbenewei on behalf of the monarch and the Gbaramatu Council of Chiefs alleged that the oil spill not only polluted their river, but grounded fishing, which is the primary occupation of the people.

“We, the undersigned for ourselves and on behalf of HRM, Godwin K.

Bebenimibo, Ogeh Gbaruan III, Pere of Gbaramatu Kingdom and the good people of Gbaramatu Kingdom communities, wish to inform you that the recent SPDC Bonga oil spill has spread to over one hundred (100) communities in our kingdom,” the petition read. hairman and managing director of

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SNEPCo, Mutiu Sumonu, in an interactive session with newsmen during a recent over flight of some creek communities in Delta and Bayelsa states, where the company carried out clean-up exercise, said the spill being complained of by the communities was a third party oil spill, and not the December 20, 2011 Bonga FSPO oil leak.

“We first sighted the oil on 24 December , last year, as we are finalizing the clean-up of the leak from our Bonga offshore f a c i l i t y. T h e t r a i l o f approximately 100 km from the Bonga FSPO was obviously different from what had leaked from our facility due to the age, shape and colour,” he claimed.

But the people vehemently disagreed with the company over the source of the spill, saying, “The spill has been so devastating that the primary occupation (fishing) of the people have been grounded as the river have been severely polluted.

“There is severe health hazard and no water/food for survival as their source of drinking water is also polluted and their source of food supply through their primary occupation (fishing) has been depleted. The people are helpless and frustrated and are aggrieved over the nonchalant attitude of the company in addressing the plight of the affected communities”, they stated.

“In other to avoid any crisis situation, it is important that Shell is directed to make arrangement to supply food and relief materials including drugs to the affected communities.

“It is also very necessary and important that a joint investigation is put in place to visit the kingdom for on the spot assessment to determine the extent of effect and damage on the kingdom communities by the spill.

“Shell should be directed to organize and make arrangement to undertake a clean-up of the spill in the kingdom immediately. It is hoped that our plight will be looked into on its merit and arrangement put in place to address them immediately”, they added. unmonu, whose company had carried out clean up operations in many affected communities, however, said, “We believe any responsible operator would clean up the spill as part of their social and environmental responsibilities.

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The Question johniyene@yahoo.com

Demand by northern govs for review of revenue allocation formula: right on cue

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Power plant

Jonathan urges Shell to invest in power *Warns against increasing oil spill in the Niger Delta Oscarline Onwuemenyi

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B U J A President Goodluck E b e l e Jonathan has challenged Shell Petroleum Development Company, SPDC, to actively participate in the Federal Government’s efforts at i n f r a s t r u c t u r a l development, especially power supply.

President Jonathan was speaking to a delegation of Shell, led by Mr. Malcolm Brinded, out-going E x e c u t i v e D i r e c t o r, Upstream International, who came on a farewell visit to State House, on Thursday.

He said, “Shell is the leading oil company in Nigeria, and we expect you to join our effort to build more power plants, so that the economy can grow, and provide more jobs for our youth”, adding that the amnesty programme had provided a platform for training of more youths,

Shell is the leading oil company in Nigeria, and we expect you to join our effort to build more power plants, so that the economy can grow, and provide more jobs for our youth

and they will need jobs.

The President said the Nigerian Local Content law had enabled increased utilization of local products and manpower, but said there was room for improvement.

He expressed concern at the level of environmental pollution in the Niger Delta, and urged the incoming Executive Director, Mr. Andy Brown to take up the challenge of maintaining

the integrity of the pipelines and checking oil spills.

President Jonathan expressed Nigeria’s appreciation to Mr. Malcolm Brinded for his immense contributions to the Honorary International Investors Council in the past eight years.

Earlier, Mr. Malcolm Brinded, out-going Executive Director of Shell, said the company was very concerned about the oil spills in its operations and would do everything possible to check them, but added that they had no control over spills arising from theft of oil along their pipelines.

He expressed appreciation to President Jonathan for the cooperation and assistance he received from the government and people of Nigeria and said he enjoyed the warm friendship extended to him.

t was commentators from the South of Nigeria who served the Northern political elite their first helping of hubris: they were told in commentary after commentary that they were far more nimble than their Southern counterparts and that they had perfected a sophisticated strategy to retain and control political power at the national level. Events have shown that while the observations were a clarion call for some, to others it was a concession made and accepted. The difference in attitude to the political situation notable essayists commented upon have seen some break through a political stranglehold and others stagnated in self-deceit, frustration and desperation.

The events that foreshadowed the swearing in of President Jonathan and later acts of violence unleashed on the country by a religious sect from the North, Boko Haram, can now be seen as chips placed on the table to sway negotiations for secretly desired political concessions. For sure, even the most ardent supporters of Boko Haram know that to concede the presidency perpetually to Muslims is an idiotic demand which would, in the very unlikely event of its implementation break up the pretentious bonds of federalism that many in the federation have borne with disdain from the very beginning. To be fair to the ascetic field operatives of Boko Haram, a review of the Revenue Allocation formula was not on their cards but it is one of a few political concessions desired by the faceless puppeteers of Boko Haram. From Maiduguri, Kano, Abuja, Damaturu to Jos Boko Haram has been trailed by its special brand of preachment: bombs and death! They have threatened and carried out threats to violate the peace of target locations and thereby planted fear in the hearts of the citizenry.

With the political leaders of our country freezing with the fear of having their opulent existence shattered into horrific dimensions, the powerful Northern establishment began to enter the planned denouement to this simplistic political drama that was lifted from a disused Machiavelli script. First was the revelation in an interview granted to a London newspaper by Mallam Lamido Sanusi, that the violence in Northern Nigeria had its roots in the imbalance of the Revenue Allocation Formula. Even before the dust had settled down upon his dangerous and baseless theorising, Malllam Sanusi, governor of Nigeria’s Central Bank, donated a whopping N100m of Nigerian money to victims of Boko Haram’s bombing campaigns in his home state of Kano! This event, greeted by the customary silence of a retiring presidency, has emboldened Northern governors to show their hands at last by their recent demand for a review of the Revenue Allocation formula that is the ingenious creation of Nigeria’s brand of federalism. On page 7 of The Punch of Friday, February 24, chairman of the forum and governor of Niger State, Dr. Babangida Aliyu called for a review of the Revenue Allocation formula, hinting that “...there are other issues that would come. For example, there were oil wells that were over 200 kilometres away of the shore of the country...supposed to be oil wells for the whole country.”

It is obvious that the Northern governors are not grateful for the fact that they have enjoyed the bounty of the oil wells of Southern Nigeria only upon the charitable allowance of the oil producing states of this country. The history of the Revenue Allocation Formula they seek to review commenced with the appropriation in 1969 of the oil rights of owner communities and states by the Gen. Gowon administration on temporary basis to enable it prosecute the civil war. Before then, derivation had been 100%. After the civil war, military administrations were reluctant to give back what they all now saw as a ‘national’ resource. While the people of the Niger Delta are demanding a return to the status quo entrenched by the Richard’s Constitution of 1946 (reflected in the 1960 Independence Constitution) which gave assurances of independence to all the ethnic nationalities of the country before they agreed to be joined in a federation, Dr. Babangida Aliyu and his cohorts are decrying the huge sums they are getting from the scorched fields of the Niger Delta by virtue of rogue provisions in Nigerian law.

Yes, the Revenue Allocation formula would eventually be reviewed but not to reflect the unholy aspirations of the Northern governors but the true ownership of the Resources and it would not matter then how many bombs are strewn around this beautiful land or how many threats issue from the quarters of a greed-propelled establishment.•

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