Sweetcrude January 2014 by Vanguard Media Limited

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NPDC grosses about 200,000 BOPD, as year ends

Niger state under siege by illegal miners P\14 President Goodluck Jonathan

A Vanguard Monthly Review Of The Energy Industry VOL 04

N0. 56

UPDATES MONTHLY BASKET PRICE

JAN-14 DEC-13 NOV-13 OCT-13 SEP-13 AUG-13 JUL-13 JUN-13

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MAY-13 APR-13 MAR-13 FEB-13 JAN-13 DEC-12

100.65 101.05

Daily | Weekly | Monthly | Yearly

106.44 112.75 109.28

JANUARY, 2014

PIB: Legacy legislation begging for passage CLARA NWACHUKWU

ast year ’s admission by Senator Magnus Abe that the continued delay in passing the Petroleum Industry Bill, PIB, is on account of extraneous factors beyond the control of Nigeria’s upper legislative c h a m b e r, g a v e m a n y Nigerians quite a scare. Abe told journalists at a conference in Lagos that “the Senate experienced some

107.34 US

114 112 110 108 106 104 102 100 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14

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LNG Deal Ushers in Tighter Shell Spending Regime

oyal Dutch Shell’s new boss Ben van Beurden will be able to point to a clear downward trend in spending this year, thanks in part to the way the oil company is accounting for an acquisition completed this week. In a deal announced on Thursday just 24 hours after the former head of refining and marketing took over officially as chief executive,

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National Assembly and the passage of the PIB

Contents 4 11

COVER

FEEDBACK

PIB: Legacy legislation begging for passage

OIL Indoramaâ&#x20AC;&#x2122;s $1.2bn fertilizer project on course

National Assembly and the passage of the PIB

FOCUS

FINANCE

TECHNOLOGY

25 28 30

POWER

33 35

SOLID MINERALS

COMMUNITY

Nigeriaâ&#x20AC;&#x2122;s petroleum future in post-PIB

FG grants energy firms N23billion

Electric cars

NERC should set benchmark for new investors

INSURANCE

Insurers strategise on capacity

LABOUR

NLC demands urgent passage

Niger State under siege by illegal mines

MARITIME

Nigeria should learn from content development fund

Shells Nembe City road

Sweetcrude is a publication of Vanguard Media Limited

THE TEAM Ag. EDITOR Clara Nwachukwu CORRESPONDENTS Victor AHIUMA-YOUNG Godwin ORITSE Jimitota ONOYUME Samuel OYANDOGHA Emma Arubi Michael Eboh Rosemary ONUOHA Sebastine OBASI Kunle KALEJAYE MANAGER, MARKETING Ubong NELSON PAGE LAYOUT/DESIGN

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he N ew Ye a r op en ed wi th m o re c on fu si o n f or an al re ad y c h a o tic Petroleum sect or, following Fe Government's wi deral thdrawal of the decision to privatise the refi neries. Apart fro m labour and a few others, the decision had alre ady received widespread comm endation as lon g as the process was open and transparent. Unfortunately, p olicy somersault is one of the biggest challenge s impeding inves tment drive in the industry, as governance in Nigeria appears to be run on a day to day ba sis. Unfortunately, th e Petroleum Ind ustry Bill, PIB, which would have brought som e order, in a seemingly orderle ss industry is be ing tossed around at the N ational Assembl y, instead of given accelerated hearing. The legislators seem to forget that since petroleum brings the petro -dollar s politicians use in runnin g the governme nt and the economy, if the spate of dwindli ng resources continues as it has been for som e years now, even they will be gin to feel the p inch. As such they will be force d to cut down ev en more on their lavish expe nditures. To reiterate the importance of the PIB, this edition focuses o n the need to gi ve bill, which would go down in history as the most debated bill in Nigeria, and possibly glob ally, urgent passage. There i s nothing more lef t to be said on the bill. Of course, we did not fail to unfold other developments in the economy inc luding Oil, Gas, Finance, T echnology, Pow er, Insurance, La bo u r, S ol id M i n er al s , M a rit im e , an d Community. Notwithstanding that the year is tak ing off on a turbulent note, we will help yo u plan your business by brea king the news as issues unfold.

Cover Story

National Assembly

PIB: Legacy legislation begging for passage CONTINUED FROM PAGE 1

delays in dealing with the bill because of events outside the control of the lawmakers.” This sounded more like echoes of what happened to the PIB during the sixth legislative session, and ended up not being passed. Since its advent, the bill has generated a lot of interests both locally and internationally, because the PIB, largely regarded as a piece of legacy legislation, is one that has been carefully formulated to bring about radical changes in the nation’s petroleum sector. But change, no matter how desirable or beneficial is often

resisted, mostly because of the uncertainties in the future. The crux of the matter with regard to the anticipated change is whose interest is being protected by these changes – Nigerians or multinational operators. PIB date line The journey of the PIB 2012, actually started during the sixth legislative session, when on April 24, the former President Olusegun Obasanjo’s administration inaugurated the Oil and Gas Sector Reform Implementation Committee, OGIC. The Committee’s Report formed the basis of the PIB 2008, which was submitted to

the National Assembly. But the bill was never passed into law mainly because of these same extraneous factors, which led to the production of multiple versions of the bill. The bill took off again on another journey in January 2012, in the aftermath of the crises over fuel price hike, and subsequent revelations on the management of the Petroleum Subsidy Fund, PSF. The Minister of Petroleum Re s o u r c e s , M r s D i e z a n i Alison-Madueke, thereafter, set up a Technical Committee, headed by the then Director, Department of Petroleum Resources, DPR, Mr. Osten Olorunsola, to harmonise the

various versions of the draft bill. Below is a progression of the new bill: ? July 18, 2012 - President Goodluck Jonathan presents new version of the bill, PIB 2012 to the Seventh Session of the National. ? Dec 14, 2012 - House of Reps commences debate on PIB. ? Dec 16, 2012 - PIB passes second reading in the House of Reps. House constitutes 23m e m b e r S p e c i a l Ad - h o c Committee for further legislative work on the Bill. ? Mar 5 – 2013 - Senate commences second reading of the PIB.

? Mar 6, 2013 - PIB passes second reading in the Senate, and hands over to joint committees on Petroleum, Gas, Judiciary, Human Rights and Legal matters on a six-week mandate. ? Mar 13, 2013 - House of Reps inaugurates PIB Ad-hoc Committee, although Committee was set up in November 2012. ? May 22/23, 2013 - Public Hearings begin on the PIB by House of Reps. ? July 9/10, 2013 - House of Reps to hold final public hearing on PIB. But failed to hold, and no reasons given. July 16/17, 2013 - Senate fixes dates for public hearings. Stakeholders were to submit memoranda on or before the 11th, but were postponed to the 18/19th. July 18/19, 2013 - Senate holds PIB public hearing. Oct 9, 2013 - Senate to hold CONTINUES ON PAGE 5

Cover Story

PIB: Legacy legislation begging for passage

Oil worker CONTINUED FROM PAGE 4

another round of hearing based on allegations of exclusion of some key stakeholders in previous deliberations by the senate, but postponed because of the Hajj. From the chronology above, one would have expected that all that was needed to be said regarding the bill must have been said. All the arguments for and against, submissions by various stakeholders, government, operators, and labour were heard. PIB objectives All through the proceedings, the objectives of the bill were reinforced over and over again, the essence of which is, to fast track the socio -economic development of Nigeria. By so doing, putting more money in the hands of government and Nigerians as well as paving the way for more Nigerians to

participate in the industry dominated by foreigners. For the benefit of emphasis, other objectives, as contained in the bill include: ? Creation of a conducive business environment for petroleum operations; ?Establishment of a progressive fiscal framework that encourages further investment in the petroleum industry while optimising revenues accruing to the Government; ? Creation of efficient and effective regulatory agencies; and; ? Promotion of transparency and openness in the administration of the petroleum resources of Nigeria. And while Abe’s admission may have sound ominous, he still gave reasons for hope that the PIB will be passed in the near future, when he said,

“Our commitment to the passage of the PIB is unshakeable.” The hope was reinforced by his lower chamber colleague, Hon. Dakuku Peterside, who revealed that in view of how critical the bill is to the Nigerian economy, it went through the first and second reading in the House of Representatives “ without any dissenting voice from any member of the House.” What then is holding back the passing of the bill into law? The PIB is an amalgam of the over 80 existing laws and ordinances in the country, aimed at making the petroleum industry more transparent, accountable, and competitive, in line with international best practices. Every aspect of the industry was tweaked in terms of policy, regulations, supervision and operational bottlenecks to enhance efficiency and

All through the proceedings, the objectives of the bill were reinforced over and over again, the essence of which is, to fast track the socioeconomic development of Nigeria eliminate duplications. Even the Nigerian National Pe t r o l e u m C o r p o r a t i o n , NNPC, presently seen as the “sacred cow” was not spared, as it is being proposed to run a profitable venture like its peers in other oil producing countries. Below is a proposal to divest up to 30 per cent of

government’s stake in NNPC: In view of all the salutary points identified above, expectations are that national interest would super cede personal or sectional interest for the benefit of all. It became apparent that at almost every turn, other CONTINUES ON PAGE 6

Cover Story

Tour of SCC Nigeria limited pipe-mill based in Abuja. One of the companies benefiting from the Nigerian Local Content Act.

PIB: Legacy legislation begging for passage CONTINUED FROM PAGE 5

extraneous interests would be raised above the national interest so much that at the end of the public hearing, AlisonMadueke pleaded that issues should not be politicised or personalised in order to move forward. Citing one of the knotty areas in the bill with regard to the powers of the minister, she

argued that the bill, first and foremost will outlive the current administration. Furthermore, she noted that the powers vested on the Minister in the Bill are not different from those vested on other ministers in the petroleum laws of countries like the United kingdom, Malaysia and Norway, and should not take away the essence of the bill.

According to AlisonMadueke, the PIB seeks to establish a legal, fiscal and regulatory framework that will revolutionise the nation’s Petroleum industry. She said this is because the bill intends to create a standard business practice, protect health, safety and environment in the course of petroleum exploration and enhance exploration and exploitation of petroleum in Nigeria. But, as one of the dailies commentary noted, “the bill may not be perfect as it is but one thing is already certain: it offends the vested interests of many powerful operators, notably the multinational oil companies and their home governments. These powerful interests have poke-nosed overtly and covertly into every step and process of the bill all along the way. “With a combination of

threats, cajoles and inducements they have succeeded thus far in halting the bill in its tracks after many years’ effort to get it passed.” Benefits of PIB Against this backdrop, various government representatives, and in particular the PIB Lead Team, have taken turns to explain the benefits of the PIB, saying it’s a win-win for all – government, Nigerians and operators. In one of such fora, the Lead Te a m , E n g i n e e r A b i y e Membere, reiterated that with the new PIB, “there is no victor and no vanquished,” even in the most contentious provisions of the bill, such as the fiscal terms. He listed some of the benefits of the bill to include: •Creating a robust economic environment to attract investments. •Growth of revenue beyond the short term.

•Create strong and independent regulators to develop and enforce open, fair and transparent rules in the oil and gas sector. •Liberalise and regulate the downstream and midstream sub sectors of the oil and gas industry. •Create a commerciallyoriented national oil company that will compete effectively with its peers. •Foster progress on government transformation agenda especially in the areas of growth, employment creation, power and industrial development. •Sustain the gains of Nigerian content development and in-country capacity and capability. Membere, who is also the Group Executive Director, Exploration and Production, NNPC, also argued that the CONTINUES ON PAGE 7

Cover Story

PIB: Legacy legislation begging for passage

A welder at work CONTINUED FROM PAGE 6

PIB represents the largest overhaul of the government petroleum revenue system in the last four decades. According to him, the reform is meant to simplify the collection of revenues and cream off windfall profits in case of high oil prices. But not all stakeholders, particularly the International Oil Companies, IOCs, are convinced about these benefits. They have continued to speak against the fiscal provisions at every given opportunity. In their opinion, the fiscal terms will stifle future investments, leading to decline in oil and gas production and reserves addition. A game of numbers The Chairman, Oil Producers Trade Section, OPTS of the Lagos Chamber of Commerce and Industry, LCCI, Mr. Mark

Ward, predicted a sharp decline in current oil and gas production from 63 percent to about 25 percent. Ward, also the Managing Director, Mobil Producing Nigeria Unlimited, said current fiscal proposals in the PIB could translate to loss of investments of about $185 billion in new projects. He also argued that the PIB will create one of the worldâ&#x20AC;&#x2122;s harshest production sharing contract, PSC regime, as Nigerian governmentâ&#x20AC;&#x2122;s take (royalties, taxes and NOC profit oil) at 96 percent, is the highest in the world. He cited other oil producing countries where government take is lower, such as Trinidad and Tobago (58 percent), Angola (62 percent), Nigeria, pre-PIB (70 percent), Equatorial Guinea (75 percent), Egypt (79 percent), Malaysia (85 percent), and

Indonesia (89 percent). From the foregoing, one is easily tempted to believe the

PIB is a game of numbers rather than a piece of legislation that seeks to

streamline all the figures that are being bandied about by different stakeholders.

CONTINUES ON PAGE 8

Cover Story

Nigerdock has fabricated and completed the load-out of 7,500 tons of structural components for Total’s USAN FPSO

PIB: Legacy legislation begging for passage CONTINUED FROM PAGE 7

But when the IOCs figures are countered with government’s it becomes obvious that the operators merely want to retain their huge profits at the expence of the larger Nigerians, which is why government is proposing a higher take in the PIB. Also, to bring home the truth about the numbers government tried to show what was at stake in one of the production regions. From the example of the deep water take, the Federal Government would have earned lower profit, lower tax, but higher royalties from oil and gas production based on the 2012 Budget, if the PIB had been passed as projected, as shown

below:

Pro-PIB views Despite widespread criticisms against the bill by the IOCs, the bill remains beautiful not just because

fiscal terms by the World Bank, and this was re-echoed by the two oil workers unions, NUPENG and PENGASSAN. The unions called for independent fiscal experts to review the fiscal regimes to determine its competitiveness. It was therefore, quite a huge shock, when the investment arm of the Bank, the International Monetary Fund, IMF, gave the PIB a clean bill. In the IMF’s estimation, “The Bill is one of Nigeria’s most important pieces of legislation, because it proposes massive industry reform. Right now, it is at risk of being picked apart by government said so; other opponents. For the critics and independent parties have also the supporters of the IMF, this expressed their opinions on the statement is important.” bill. The Fund went further to T h e I O C s c a l l e d f o r a n state that it “looked forward to independent valuation of the an early passage of the

Petroleum Industry Bill which would boost investment, government revenue, and fiscal transparency.” Apart from the IMF, an industry expert, Dr. Pedro van Meurs, in his report for international consultants, Ernst and Young, argued that the transparency provisions in the PIB, “are now among the most advanced in the world, and will make Nigeria a leader in Africa in this respect.” van Meurs, who also criticised the high rate of gas flaring endorsed provisions designed to reduce wasteful gas flaring – Nigeria in 2011 wasted through flaring nearly onethird of what is used. Back in Nigeria, President of CONTINUES ON PAGE 9

Cover Story

PIB: Legacy legislation begging for passage

Nigerdock delivers on Total’s Usan FPSO

CONTINUED FROM PAGE 7

LCCI, Mr Goodie Ibru, while expressing concern on the possibility of sudden shock on gover nment finances on account of the vagaries of the international oil market said called for the quick passage of the PIB. According to him, “While we note that the passage and implementation of the PIB will not entirely eliminate the problem, it would expand investment in the sector. Curbing corruption and other forms of fiscal leakages would further stabilise the economy.” Major highlights Despite all that have been said and done on the PIB, analysts argue that certain highlights should be kept in view while the debates on the

In the IMF’s estimation, “The Bill is one of Nigeria’s most important pieces of legislation, because it proposes massive industry reform. Right now, it is at risk of being picked apart by opponents. For the critics and the supporters of the IMF, this statement is important.” bill progress in this new year. These are: ? That the 223-page document has taken into account years of research about the problems in and

around the petroleum industry. ? The IOCs were instrumental in writing previous legislations are not too happy to have them all rewritten, as this will translate to

loss of control of the industry. ? This, notwithstanding, the PIB seeks a fair deal for all, while also increasing the amount of oil revenue given to communities ? The bill seeks greater transparency measures – publishing the Government’s contracts with oil companies, making data about production for public scrutiny. ? The drill or drop policy seeks to make the industry more competitive by releasing dormant acreages to new entrants, thereby creating space for smaller Nigerian companies. ? The environment has suffered the most in oil and gas activities, as such the bill seek to have cleaner and friendlier environment by enforcing

more responsible operations that will reduce oil spills and gas flaring. ? Bill is not meant to drive away present partners, but to make them thrive and prosper based on fair partnership, mutual respect and social responsibility. ? The Petroleum Host Community Fund will institute fairness in revenue distribution between coastal and inland states, while for the first time giving both local upstream and downstream communities a decent share of the revenues. ? To g u a r a n t e e t h e future of Nigeria’s hydrocarbon supply, the bill also establishes a Frontier CONTINUES ON PAGE 10

Cover Story

Fabrication of of an oil rig by Nigerdock

PIB: Legacy legislation begging for passage CONTINUED FROM PAGE 7

Exploration Service to search for and analyse Nigeria’s extensive deposits whether in the North or South for even national development. ? The privatisation of the power sector makes natural gas a very important commodity, and the PIB makes a powerful and justified effort to persuade oil companies to domesticate some of the gas as opposed to exporting all. ? Above all, the PIB also recognises the importance of deregulating some areas, particularly the downstream sector to make it more competitive to attract further investments. Against this backdrop, Nigerians expect that the PIB will no longer be unduly delayed, as the advantages far outweigh the disadvantages, and since government is a

continuum, disagreements on provisions can be resolved in the future. This is why some analysts disagree with the Deputy Chairman of the Senate Joint Committees, Senator Kabiru Marafa, when he attributed the delay in the passage of the bill to the need to do a good job of ensuring transparency in oil and gas exploration and all related activities. According to the lawmaker, “… we want to come up with a document that will make everybody happy. We want to accommodate everybody in this bill and the delay in passing the bill is to ensure that a good work is done.” But analysts insist that no one legislation can solve all the problems, saying, “Policies are made on a need basis, and this will become obvious during the process of implementation. Whatever is not working will

be reviewed because in a democracy, no decision is cast on stone.” The passage of the PIB is long overdue before we start to loose the benefits. Nigerians deserve a better life through a fair share of our natural resources, and the time to make it happen is now. Therefore, the National Assembly should stop toying with the the development and improvement of our citizenry under the guise of politics. As it were, speedy audit of far less issues affecting the country is taken more seriously than the PIB, which is a game changer for Nigerian people. Enough is Enough. Other jurisdictions have passed their laws long time ago. The legislators should wake up to their responsibility, as they owe Nigerians this single activity that will significantly impact their lives you don’t

The drill or drop policy seeks to make the industry more competitive by releasing dormant acreages to new entrants, thereby creating space for smaller Nigerian companies

have any excuse not to do it. Nigerians expectation is for the PIB to be passed in first quarter of 2014.

Oil

Indorama’s $1.2bn fertilizer project on course

Fertilizer plant

ONYEGBADUE AMAMDI

he Managing Director of Indorama Eleme Pe t r o c h e m i c a l Limited Mr Manish Mundra has said that the companies US$1.2 billion dollars Fertilizer Project is on course. According to the latest edition of the companies inhouse magazine IndoramaNigeria IMPACT Magazine, Mr Mundra said; “ we were able to put together a massive US$1.2 billion dollars for our fertilizer project and our Chairman, Mr. S.P. Lohia was here in April to perform the ground-breaking. Since then, the construction of the plant has been going on as planned.” The ground-breaking took place on the 11th of April 2013 and the project is expected to be ready in the fourth quarter of 2015 with production starting in the first quarter of 2016.

Indorama Eleme Fertilizer and Chemicals Limited Nigeria (IEFCL), which is West Africa’s largest polyolefins producer, is providing equity of $400 million dollars for the project Mr Mundra disclosed that indorama is already constructing an 83 kilometre gas pipeline to fetch gas to the fertilizer plant while an export jetty is also being constructed at the Onne port to facilitate evacuation of the products. Mr Mundra also stated that the fertilizers would be of high quality, yet cheaper for farmers thereby helping them to improve their agricultural yields and that the project would help to revolutionalise agriculture and help to fight food security

in the country. According to the magazine, the M.D. also stated that the fertilizer plant would help the government stop importation of the product which gulps huge foreign exchange every year and also enhance food security and create employment opportunities for teeming Nigerian graduates who need jobs.

he companies website revealed that $800million dollars of the $1.2 billion dollars would be financed by lenders while

$400 million dollars was in equity. Financial partners involved in the $800 million loan are the International Finance Corporation (IFC), Standard Chartered, African Development Bank (AfDB), Africa Export Import Bank, Bank of India, KFW and DEG of Germany, Commonwealth Development Corporation, FMO Entrepreneurial Development Bank, E m e r g i n g Af r i c a Infrastructure Fund, United Bank for Africa, Stanbic IBTC Bank, Guaranty Trust Bank and Access Bank. Indorama Eleme Fertilizer and Chemicals Limited Nigeria (IEFCL), which is We s t A f r i c a ’ s l a r g e s t polyolefins producer, is providing equity of $400 million dollars for the project. The companies website also revealed that Global TOYO Engineering of Japan would be handling the construction work, and the project would be the world’s largest singlestream gas-to-urea plant which has capacity for 1.4

million metric tons of urea serving both domestic and export market. The Singaporeheadquartered Indorama Corporation, the holding company of the Indorama group, has 45 manufacturing sites across 20 countries around the world. It is also the second largest producer of nitrile rubber gloves. The $10 billion dollars Indorama Corporation is owned by an I n d i a n f a m i l y, w i t h industrialist S.P. Lohia as its chairman. Indorama Corporation, which has over 20,000 employees, started with the establishment of a spun yarn manufacturing plant in Indonesia by S.P. Lohia in 1976. The group is a global m a n u f a c t u r e r o f polyethylene, polypropylene, polyester fibre, filament and spun yarns, fabrics, and medical gloves. Its products are shipped to over 90 countries across four continents.

Oil

Barrels of oil

NPDC grosses about 200,000 BOPD, as year ends

he operating arm of Nigeria’s state hydrocarbon c o m p a n y delivered gross production of 191,025Barrels of Oil per Day (BOPD) in midDecember 2013, a higher figure than the November 2013 production which averaged 173,000BOPD. The increase of 18,000BOPD came from one field: Kokori field in Oil Mining Lease (OML) 30, which increased from 2 6 , 0 0 0 B O P D t o 44,000BOPD. Nigeria Petroleum Development Company (NPDC) holds equity in 10 producing fields in the western onshore and south eastern offshore parts of the Niger Delta, most of them recent divestments from Shell Nigeria. NPDC is operator in seven out of those fields, and its overall net p r o d u c t i o n w a s 130,319BOPD for the period. The company also had a gross production of 598Million cubic feet of gas per day (MMscf/d), of which 123MMscf/d was flared. It’s instructive that the flares happen in none of the fields

divested by Shell. All the 123MMscf/d of gas flared were in Oredo and Okono fields, which have been held and operated by NPDC, long before it “annexed” equity in the former Shell operated

fields. The data shows that the biggest crude oil production in NPDC portfolio come from Okono, which delivered 45,704BOPD and Kokori field, in Oil Mining Lease

(OML 30), which produced 44,853BOPD in the same period. NPDC’s biggest gas field is Utorogu, in OML 34. It produced 315MMscf/d, all of it delivered to the Escravos Lagos Pipeline System.

CSR: Nipco reaffirms human capital development KUNLE KALEJAYE

n line with its core belief in corporate social responsibility initiatives, downstream operator in the nation’s oil and gas industry, Nipco plc, has reaffirmed its commitment to education and human capital development in the country. The company’s Managing Director, Mr Venkataraman Venkatapathy restated the firm determination in a reaction to the recognition and appreciation of the First Lady of Lagos, Her Excellency, Dame Abimbola Fashola while inspecting the furniture and other instructional materials donated by Nipco to Ijora Oloye Nursery & Primary School in the centre of excellence. The First Lady applauded the CSR initiatives of the company

which she noted is putting Nursery education in Lagos on same plank with other top rated institution in the across the country stressing that private sector support is very germane in the overall development of the state Dame Fashola who inaugurated the facilities alongside the Apapa LGA Chairman, Hon. Ayodeji Joseph and the Ojora of Ijora Kingdom, His Royal Majesty, Oba Fatai Aromire, had noted with satisfaction the quality of the infrastructure and the positive impact it will have on the children in the learning process The MD explained that the company views investment in education as a veritable avenue through which human capital can be developed for the overall development of the individual and the country at large. According to him, the company is

investing huge sums of money in the education sector especially at the foundation levels to prepare the pupils adequately for secondary and tertiary grades. He recalled that Nipco CSR projects in education realm began three years ago with the refurbishing of blocks of classrooms and provision of instructional materials to Apapa Primary School, Oniru in Apapa LGA, a feat that has since changed the landscape of the institution. The MD pointed out that the company intervened in Ijora Oloye Nursery & Primary School in 2013 to further improve the bedrock of education in the state with its attendant positive effect on the learning process . He listed the infrastructures provided for the school to include: full set of furniture’s worth millions of naira for the entire nursery section

of three classrooms, recreational facilities and a modern borehole with treatment plant and storage tank that can also serve the school and its fgneighbours. The MD asserted that all the interventions were geared at offering the children the best opportunity in life to nurture themselves to greater heights and off course giving the nation better hope for socio economic development. Earlier in his remarks, Executive Chairman, Apapa Local Government, Hon. Ayodeji Joseph appreciated the contributions of the company towards creating a new Apapa Local Government through its invaluable support over the years. He noted that even though other companies too are contributing their bits, Nipco stands out and needs to be recognized accordingly.

Oil

LPG: ‘We need constructive engagement with FG in 2014’-NLPGA boss

to find out. Truly, if we are making the entry into this market, a lot more difficult, then you will give in room for smuggling, people would by-pass the legal way when things becomes too difficult for them, then they will begin to smuggle things through the borders.

013 has been described as a year that lots of attention was g i v e n t o Liquefied Petroleum Gas, LPG also known as cooking gas, and the country’s preferred energy of choice. However, the attention is yet to hit national scale despite the comparative advantages LPG have over traditional fuel. In this interview, President of Nigeria Liquefied P e t r o l e u m G a s Association, NLPGA, Mr. Dayo Adeshina, outlined the successes, challenges in 2013 and projections in2014. KUNLE KALEJAYE 2013 Overview In 2013, I took over as President in May. The market that we recorded last year was 150,000 tons and by the time you look at the other spare capacity that came, we would have inched towards something much higher than that, but some of the data from that segment was sketchy. But in all, we did about 150,000 tons in 2012 and we were competing with the figures in 2013, and we are hoping that we will surpass 2012. Now, part of the impediment that we faced in 2013 was the short fall of NLNG/NIMASA face-off, which essentially cut supply for a couple of weeks. But after the resolution, it took about another month before normalcy could get back essential because we have just one supply vessel that has to shuttle back and front between Lagos and Bonny. As you know, all the LPG comes to Lagos first before it is distributed to other parts of the country. So in terms of the production figures, hopefully ,that shouldn’t have affected so much of the supply in 2013. But, again the demand has really reduced significantly and in response to that, NLNG has increased from 150,000 tons to 250,000 tons in August, 2013.

ith that, we started looking at ways of being prepared for the expansion in the market. We

Dayo Adeshina

We have also looked internally to see what we can do, so that we can help out from this wooden part. We are going to be talking to financial institutions on how we can get soft loans and potentials interest rates to support this market. are tackling regulatory issues. We have had series of meeting with Department of Petroleum Resources, DPR to establish a more robust working relationship so that a lot of the players who are not adhering to the standards, enforcement should be carried out on them. We h a v e a l s o l o o k e d internally to see what we can do, so that we can help out from this wooden part. We are going

to be talking to financial institutions on how we can get soft loans and potentials interest rates to support this market. We are also engaging the Standard Organization of Nigeria, SON. Because, a few of our members have been complaining of late that there are some charges that are arbitrary in the sense that for

every LPG equipment ,you need to have a certification and the process is such that you have send two people from SON to go and do inspection at the factory. The cost of the ticket, the accommodation, the estacode , is borne by the company that wants the certification. If the product passes the inspection, then you are issued with a certification/license to import. Prior to now, once you have that, then you will import the product mainly. Then we need to let them have samples of any shipment from that company, so that they continue to monitor the goods in order for them to meet set standard. But they now turn that to you now paying what you called “Service Charge” and then even before you import, if you are going to open an LC, they need to see the proforma invoice, an invoice value and they charge a certain percentage of that which we have had about two to three complaints from our members and we are now engaging SON

o the regulators are really important to us when it comes to any expansion of this market, and we want a working relationship such that it would be easier for our members, it would go a long way in making sure that the market is deepened. During the year 2013, internally as an association, we also got the safety standard committee to interact lot more with safety as seen from the conference that we had, because that is the first things f o r a n y p l a y e r. We a r e concerned that a lot of players have ways of doing things and some are not in line with what we expect in the international safety standards. Therefore, our own focus for 2013, was to start regulating ourselves. We are going to be led by example for others to follow in the industry. We need to set high standards and follow them to the international levels. That is a key focus for us. We want to interact with financial institutions, enlightening gover nment agencies, state government as you can see from our interaction with Lagos state government since they took it upon themselves in 2013 as a state policy to use LPG as a cooking fuel of choice rather than fire wood or kerosene. That expansion with the scheme project that they are doing right now will lead to massive awareness and influx of people into the industry. Now we need to set the standard for whoever it is that is going to participate in this kind of scheme for them to know that for them to participate in the LPG space, there is a minimum standard that is expected of them and certain level of education that they need to have because they are going to be handling certain equipment and products, therefore, safety plays a key part in that. In doing that, we are actually CONTINUES ON PAGE 14

Oil

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first set of enlightenment campaign that the LPGA Chamber of Commerce and Lagos state did was to have a road show to sensitize market men and women, Land Lords association, artisan telling them that LPG is the product they should be cooking with, with practical demonstrations. If you go to Surulere and Ikorodu today because that was where the campaign started from, those selling Bean Cake (Akara) are using LPG to cook. And part of what they tell is that all the time they were using kerosene and sweating, LPG cooks faster than they expected. So there is quick turn-around.

involved with the state government and the Lagos Chamber of Commerce and Industry, LCCI in making sure that all those who participate in the Lagos State scheme adhered to a minimum safety standard. Market situation before May 2013 Thanks to my predecessor, Alhaji Ibu, because as his deputy, I have been part of the executive for some time. The changes did not just start today, it has been work in progress and we still have not achieved our set goals. Like I said at the conference, if I come back in 2014 to say that the market is still at 250,000 tons, then I will have failed. Personally, if you don’t set high standards and goals for yourself, then you will continue to feel that you have achieved a lot and you won’t get out of that zone, you will continue to be in that zone. Now, our bench mark is to achieve what Indonesia did because we have similar problem. They were able to surmount theirs so I see no reason why we can’t because, we have the man power, we have bulk of the gas locally, and that is over 4 million tons. By the time you begin to explore marginal field operators into producing LPG, then in terms of supply, there should not be any issues. Our biggest problem is twofold. One is logistics and the second is infrastr ucture. Infrastructure in the sense that like I said earlier on is that all the products comes into Logos and that put lots of pressure on Lagos. LPG does not go by rail or pipe, in Lagos, it goes by truck. If somebody needs LPG t o d a y e i t h e r i n S o ko t o , Maiduguri or anywhere in the north , it will have to leave one terminal or the other by truck and you know the conditions of our roads. Somebody in Maiduguri shouldn’t expect to get that product in the next four days or five days if they are lucky. We need to have a lot more storage in certain areas, that’s number one. Logistics like I said is a big problem, then the quality of some of the trucks you find around. Because of the nature of the price of LPG truck, not everybody can afford brand new ones. So the bulk of what you see out there is mostly second hand trucks. I’m particularly worried and concerned because, if you don’t know the status, anybody can sell anything to you. It is up to you to make sure that those things are re-certified and qualify before they are brought into the country, but that does not happen. People just go to dealers and bargain for some of these equipment at a reduced prices. But the question is: How old is that equipment? Have the required test been done on it? A lot of people don’t bother to carry out some of these tests on the trucks. So that is a big concern for us. For a country of a population size of 175 million people,

Dayo Adeshina

LPG: ‘We need constructive engagement with FG in 2014’ -NLPGA boss should we really be having 400 trucks? We should be having between 2,000 to 5,000 trucks. Now the other concern is that a lot of people that operate these trucks are not well qualified. How qualified are they? Do they know that they need to be extra careful?

art of what would happen in 2014, is to train our truck drivers. We have made arrangement with one of our member who has a training center in conjunction

especially when foreign exchange rate increase, the duty is big factor. So that is major challenge. Other achievements in 2013 There are still work in progress and when you say achievement, I don’t want to look at some of those things as achievement because they are our day to day responsibilities. We have not achieved as much as we expect to achieve because essentially there are work in progress like I said earlier.

I’m particularly worried and concerned because, if you don’t know the status, anybody can sell anything to you

with World LPG Association to set up training programs for LPG truck drivers. That is one program lined up for 2014. Another problem is that, a lot of the equipment needs to be imported and the tariffs that we are paying make it expensive to be in the LPG space. If you want to buy a cylinder now, you would be paying N15, 000

You only achieve when you have finished. When you are still doing the work, then you can’t say that is an achievement. You can say certain things had happened, mile stones have been achieved. I will not say there has been achievement, I would rather say that there is better co - ordination within the

association. My predecessor was able to steer us in the right direction, which is the reason behind the co - ordination within the association and setting up certain frame works to improve and explore other areas that has not been explored before. I believe that the quickest and shortest way to get a message out is through the press. Create that awareness because people need to know, if people don’t know then, they will forever sit back and say kerosene is the best. The mind set of everybody is that kerosene is for the poor people. Now the poor people are they not human beings? Aren’t they supposed to get what is best? Because they are poor people , you will continue to kill them with dirty fuel. Kerosene is not for human consumption, it is for aviation market and that is why kerosene does not get to them. It naturally goes to where it should go, which is aviation, but somebody is paying the price because it is being subsidized and somebody else is profiteering from that because they know it is not for this market, they get it at subsidized price and take it to another market. So awareness is critical not just in letting them know that this is actually the fuel for you, but the other aspect is that it is safe. Forget about the negative comments that it is unsafe. The

efore that it was taking forever for them to cook now LPG is cooking faster for them and they are not smelling of sweat and smoke. The difference between an LPG kitchen and kerosene is clear. Just look up at the wall it is black with kerosene. It is part of the things that you would see a lot more because of the cooking for life campaign. 2014 projections We want better engagement with the government because the awareness we are talking about needs to be on a national scale. There is fundamental problem with desertification at the moment in 19 states of the country. Part of the solution is LPG. People are cutting down trees for fire wood, we need to stop that, we need to let people have a sense of belonging. We know we can do that. Lagos is not Nigeria, it is just one state in all the 36 states. So people in Abuja, Sokoto, Kano, Gombe, Yola and all other states need to use LPG. The good thing is that, people are reading about it, people are asking questions about it from other states, saying how this kind of scheme in Lagos can be replicated. So it needs greater co-ordination from the federal government because they have wider coverage and having a federal policy which is our aim, then we know that the industry would truly evolve, then we would have solved some problems for the federal government. More people would be employed because it is going to be a multiplier effect, more tax revenue for them, less people would suffer from respiratory problem, less places suffering from desertification, cleaner environment but more importantly it can also clean for carbon credit. It’s more of constructive engagement with the federal government. Our major target is engagement with the federal government in 2014 and a lot more campaigns.

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National Assembly, Abuja

National Assembly and the passage of the PIB CHIJIOKE NWAOZUZU

t could be argued that the government’s transformation agenda would succeed only to the extent that the petroleum sector is transformed. The reason is that oil exports and proceeds from domestic sales account for nearly 80% of all federally- generated revenues and 95% of foreign exchange earnings. This statistics demonstrate that Nigeria operate largely a mono- product economy. Therefore, one wonders why too much politics gets in the way of the passage of crucial bills such as the PIB, and the Gas Master Plan. Sometimes, one is tempted to doubt the patriotic credentials of those public officers who are responsible for ensuring the passage of such bills. On the other hand, it could be that the relevant public servants are merely interested in pursuing parochial regional interests, or are not conversant

On the other hand, it could be that the relevant public servants are merely interested in pursuing parochial regional interests, or are not conversant with the dynamics of the petroleum industry and the size and gamut of stakeholder interests involved with the dynamics of the petroleum industry and the size and gamut of stakeholder interests involved. Judging by the caliber of some of the public officers involved in the PIB passage process one would prefer to ere on the side of caution, and so assume that they are patriots who are not out to pursue narrow and sectional agenda. Therefore, this contribution is based on the premise that there is a

knowledge deficit (and not moral deficit) as regards the stakeholder interests involved and how to balance these interests and so achieve a speedy passage of the Bill. Now let us turn our attention to sections of the PIB that spells out the objectives of the Bill. Section (1) (j) states “to protect health, safety, and the environment in the course of petroleum operations, while section 1 (k) states, “to attain such other

objectives to promote a viable and sustainable petroleum industry in Nigeria”. Sections (2) and (3) under the objectives stipulate as follows: (2) O w n e r s h i p o f Pe t r o l e u m Resources: “the entire property and control of all petroleum in, under or upon any lands within Nigeria, its territorial waters, or which forms part of its Continental Shelf and the Exclusive Economic Zone, is vested in the Government of the Federation”. (3) “The management and allocation of petroleum resources and their derivatives in Nigeria shall be conducted strictly in accordance with the principles of good governance, transparency and sustainable development of Nigeria by providing for – (a) an orderly, fair and competitive system; (b) clear and effective legal and institutional frameworks for organizing petroleum operations; and (c) a fiscal regime that offers fair returns on investments while optimizing benefits to the

Nigerian people.”

ased on these objectives, we can identify four major stakeholders: the Host Country, the Host Communities, the Multinational Oil Companies (MNOCs), and the National Oil Company (NNPC) which protect t h e Fe d e r a l G o v e r n m e n t interests in oil activities. Nevertheless, there are other minor stakeholders too numerous to mention. Some of these include: a wide variety of government agencies; private companies; trade unions; environmental groups; nongovernmental organizations (NGOs); international organizations, agencies and institutions which are involved in natural resource development. For example, exploration & production (E&P) rights must be obtained from the D e p a r t m e n t o f Pe t r o l e u m Resources (DPR) a state agency granting such rights, which in

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National Assembly and the passage of the PIB

Nigerian Senate

CONTINUED FROM PAGE 16 turn produces periodic reports to be submitted to another supervising government agency. The financing that is needed for oil and gas projects may take the for m of loans, direct investment or some other c o m p l ex f i n a n c i a l arrangements. These are obtained from diverse sources such as foreign direct investment (FDI) by the MNOCs, private institutions, individual private investors, corporate financing devices and inter national financial organizations. Other stakeholders would include agencies that oversee and administer the bilateral, regional and global trade agreements on monetary policies, trade and investment, and those established by treaties and conventions aimed at environmental protection. There are also other stakeholders that play less obvious roles. For instance, the International Energy Agency (IEA), and their stabilizing role in the international petroleum industry. When the OPEC countries imposed their 1973 oil embargo as a political weapon, IEA mobilized 16 industrialized

nations who joined in the execution of an agreement for the International Energy Program (IEP). The aim of the agreement was to promote a secured supply of petroleum at reasonable prices; to take cooperative action in the event of future oil emergencies; to improve relations with oil producing countries; to gather reliable data on oil supply and demand; and to reduce reliance on imported oil through conservation, research and development. The program required that participating countries maintain a 90- day reserve of crude oil. Thus, IEP has forestalled oil embargos so far. The foregoing illustrates the complex nature and variety of participants in the petroleum resource development, and the international nature of the oil industry. Next, let us focus on the major stakeholders, what their interests are, and the need to factor these interests into a successfully negotiated PIB. Let us commence with the Host Countryâ&#x20AC;&#x2122;s interests. Nigeria is characterized by high population growth, excessive unemployment, low

per capital income, a low level of economic development (reflected in a lack of social services and resources), a low quality of education, and short life expectancies). Given this setting, the critical concern of government should be economic growth. As a major oil exporter, oil E & P activities should secure a reasonable tax base for the government, revenue from the world oil market, capital for economic expansion, and employment and income for individual workers. There are other economic, social, and political factors of interest to the Host Country. These include acquisition of technology and expertise from foreign oil companies, increasing local content in supplies and other forms of contracting, access to foreign markets, infrastructure development in the course of E & P activities, such as roads, communications, port facilities, etc.

ew developing countries have the capital, technology and trained personnel necessary to develop

As a major oil exporter, oil E & P activities should secure a reasonable tax base for the government, revenue from the world oil market, capital for economic expansion, and employment and income for individual workers oil reserves, and so must rely to varying degrees on foreign investment by the MNOCs. The FDI offered by the MNOCs provide the Host Country with technology, managerial and technical expertise, and a reduced vulnerability to downtur ns in the worldâ&#x20AC;&#x2122;s economy, and with capital. FDI also provides the opportunity to shift the responsibility of building and maintaining the requisite support services and infrastructure facilities to the MNOCs. Therefore, it is in the interest of Host Countries to maintain this historical interdependence with the MNOCs.

The MNOCs interests are principally driven by the characteristics of petroleum E & P operations. There is a considerable lag between an investment in a petroleum prospect and the realization of any profit from the enterprise. E & P operations are capitalintensive and frequently entail the creation of a robust infrastructure before actual extraction can take place. These operations are also high- risk in nature (the existence, extent and quality of oil reserves; production costs; and world crude oil prices are all difficult to determine well in advance).

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Petroluem Refining

Nigeria’s petroleum future in post-PIB

a s t y e a r, t h e Minister of P e t r o l e u m Resources, Mrs. Diezani AlisonMadueke delivered a paper on the future of Nigeria’s petroleum industry in the next five years. Below is an extract from the presentation: … As you are aware, the Government has embarked on reforms within the petroleum sector in order to make the industry attractive to both local and inter national investors. Some of these refor ms include; the National Content Act, the Amnesty Programme and an omnibus legislation called the Petroleum Industry Bill (PIB). The PIB currently undergoing legislative processes at the National Assembly establishes the legal and regulatory framework, institutions and regulatory authorities for the Nigerian petroleum industry. It also stipulates guidelines for operations in the upstream and downstream sectors. The objectives of the PIB are

The PIB currently undergoing legislative processes at the National Assembly establishes the legal and regulatory framework, institutions and regulatory authorities for the Nigerian petroleum industry

therefore as follows: •To enhance exploration and exploitation of petroleum resources •To significantly increase domestic gas supplies especially for power and industry •To create competitive business environment for the exploitation of oil and gas • To e s t a b l i s h f i s c a l framework that is flexible, stable and competitively attractive •To create commercially viable national oil company •To create strong and

effective regulatory institutions •To promote Nigerian content and • To promote and protect health safety and environment The proposed reforms in the PIB can broadly be divided into two; non-fiscal and fiscal reforms. Nonfiscal reforms relate to institutional and policy reorientation. Institutional & Policy Reforms At the heart of the PIB is the separation between policy,

regulation and monitoring and commercial operations. Based on this model idea, the PIB seeks to build institutions around these core principles. Under this, the Ministry of Petroleum Resources has responsibility for the evolution of policy in the oil and gas sector. Under the Ministry are the Regulatory Institutions charged with regulation and monitoring and thirdly, the National Oil Company with responsibility for commercial operations. The building blocks of these institutional and policy reforms are as follows: • The Unbundling of NNPC as presently constituted through the creation of a National Oil Company that promotes indigenous operational capacity development • The Creation of an Asset Management Limited Liability Company to manage the JV assets on behalf of the federation • The excision of Nigerian Gas Company (NGC) from NNPC as a separate partially privatised

entity to cater for domestic gas marketing and gas infrastructure development. The intention here is to accelerate national gas infrastructure development for effective gas supply to power and industrial sectors of the economy. This will be realised through private equity participation of up to 49%. The proposed PIB will change the role of NNPC. Currently all NNPC’s revenues arising from the management of federal government assets flow directly to the Federation Account and its funding for the JVs is then provided by the government. This role will now be taken over by the Asset Management Company which will be capitalized with a two year loan in place of the annual cash calls and would later be expected to be self-financing through the retention of its earnings. All royalty and taxes would however be paid to the government as and when due. CONTINUES ON PAGE 19

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Nigeria’s petroleum future in post-PIB

Oil field workers

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The new National Oil Company will broadly consist of the PSC assets which shall be used to capitalize the National Oil Company, the National Petroleum Development Company (NPDC), the current three domestic refineries (WRPC, KRPC and PHRC) and the Pipelines and Products Marketing Company (PPMC). The new National Oil Company will also be partially privatised. It is expected that up to 30% equity shall be divested to provide private participation as done in other NOCs such as Petrobras, Petronas etc. Government expects the partial privatization to provide a culture change to a fully accountable and commercial company. Along with the unbundling of NNPC, two new regulatory institutions; upstream petroleum and downstream petroleum inspectorates are to be created to promote effective regulation and monitoring in

line with operational best practices. These regulatory entities are expected to perform both commercial and technical regulation in the upstream and downstream petroleum sectors respectively. Nigeria’s quest to grow its reserves will be engendered in the proposed new PIB through a robust acreage management system to be superintended by the Upstream Petroleum Inspectorate. Similarly, the PIB proposes the establishment of a Technical Bureau in the Ministry of Petroleum Resources charged with the responsibility for frontier exploration services. Over the years, Nigeria has underexploited its bitumen r e s o u r c e s . T h e Fr o n t i e r Exploration Services will provide necessary coordination and preliminary work for the Upstream Petroleum Inspectorate, which will through its acreage management system offer opportunities for investors. In order to underpin this, the PIB incorporates a fiscal regime for

these frontier areas and specifically incorporates bitumen under the upstream fiscal framework. Additionally, a Petroleum Host Community Fund is proposed in the PIB. The Fund is a mechanism to formally recognize host communities as important stakeholders by assigning oil and gas infrastructure security to the Host Communities and minimizing environmental degradation due to vandalism and crude oil theft. As a freedom to operate tool, it incorporates penalties to host communities in the event of vandalism in their localities. The proposed legislation includes modalities for using regulations to increase flexibility in managing host community issues. Fiscal Reforms The PIB represents the largest overhaul of the government petroleum revenue system in the last four decades. This overhaul has four central objectives:To simplify the collection of

Nigeria’s quest to grow its reserves will be engendered in the proposed new PIB through a robust acreage management system to be superintended by the Upstream Petroleum Inspectorate government revenues, • To cream off windfall profits in case of high oil prices • To collect more revenues from large profitable fields in the deep offshore waters, and • To c r e a t e N i g e r i a n employment and business opportunities, by encouraging investment in small oil and gas fields. Simplification of the collection of government revenues is accomplished through extensive revision of allowable deductions for the purposes of tax. Only direct costs wholly and necessarily

incurred in petroleum operations are eligible for deductions. Given the recent upward oil price movements, the PIB introduces price based royalty for crude prices beyond $70/bbl and gas prices beyond $7/mmbtu. Thirdly all cost based incentives have now been replaced with production based incentives because government revenues are impacted by oil production and efficient cost

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Local content in progress

Nigeria’s petroleum future in post-PIB CONTINUED FROM PAGE 19

management. This therefore imposes strict discipline on cost escalations and deincentivizes gold plating. The proposed new fiscal regime also seeks to harmonize oil and gas fiscal systems. Gas fiscal terms are fully integrated into oil fiscal systems for the first time in Nigeria. In line with our National Content objectives and the provision of employment opportunities for Nigerians, there is a distinct preference for Nigerian goods and services through a cap on deductions on foreign based capital expenditure, thus creating incentives for domestication of capital spending. Of course, with fiscal changes there may be concerns by investors as to project profitability and long term sustainability of production in Nigeria. From our models of profitability, the proposed fiscal terms in the case of onshore/offshore JV projects delivers comparable value to investors to the current system, but additionally improves the economics of small fields significantly through generous production allowances and smaller royalty rates. With respect to the deep offshore production sharing contracts (PSCs) the 1993 fiscal terms were designed for oil prices of $20 per barrel and below. Section 16 of the Deep Offshore Act prescribes that changes be made to this fiscal

regime to restore benefits to t h e g o v e r n m e n t commensurate with the increased oil prices once oil prices have exceeded $20 per barrel in real terms or 15 years after the commencement of the PSC (2008). I wish to state that Nigeria is not alone in “tightening” of fiscal terms during successive bid rounds or ad-hoc awards. The goal has always been to achieve a fair balance between government and contractor share. This is to ensure that Nigeria remains competitive when compared to other countries with similar petroleum resource base. Nigeria remains one of the most attractive countries in ter ms of fiscal regimes (Government Take). As an indicator of competitiveness, the latest Angola rounds shows Government Take (GT) at the level of Nigeria’s 2005 PSC terms which is less favorable to contractors than the current terms proposed in PIB 2012. Interestingly, these terms will also apply to the National Oil Company as it is not intended to be discriminatory. Conclusion Based on the foregoing, Nigeria’s strategy is therefore to address the challenges highlighted above and transform the oil & gas industry in line with the proposed PIB. This will ensure the realisation of the national objectives of four million barrels per day oil production and 40 billion barrels crude oil reserves by in the next seven years.

Extract from: “Nigeria’s Oil & Gas Strategy in the Next Five Years” By Mrs Diezani Alison-

Madueke Minister of Petroleum Resource, at the Nigerian Oil & Gas Conference (NOG13)

2013: JTF killed 82 suspected pirates, nabbed 1,857 crude oil thieves in N-Delta, says Commander

he Joint Task Force in the Niger Delta, codenamed Operation Pulo Shield, said yesterday it killed 82 suspected sea pirates and robbers, lost three of its operatives in active service in 2013 to the pirates, while three others got drowned. The task force also said its operatives killed 23 kidnappers and conducted 1,025 antiillegal oil bunkering patrols leading to the destruction of 1,951 illegal refinery camps in the region and arrest of 1,857 crude oil thieves. Also, over 1,117 Contonu boats, 82 tanker trucks, 81 barges and 1,873 surface tanks were destroyed during the 2013 operational year. Commander of JTF, Major-General Bata Debiro, stated this in Yenagoa while briefing newsmen on the activities of the command in the last one year in the region. Major-General Debiro said the mandate of the task force was to stop illegal bunkering activities in the upstream sector, protect oil and gas facilities and installations, secure the environment and other lawful activities in the region. According to the JTF commander, three of its soldiers were killed by pirates at Andoni, Rivers State, while three others drowned in a river near Akassa in Bayelsa State. His words: “In the year under review, JTF successfully conducted several land, maritime and air operations against illegal oil bunkering and refining activities, pipeline vandalism, armed robbery and sea robbery. The task force also conducted antikidnapping operations, cordon and search, destruction of re-emerging militant camps and provided security to oil and gas companies in the past twelve months. “Over 42 armed robbers were killed and a total of 183 suspects were arrested, 40 sea pirates were also killed, 41 arrested and all

manners of assorted arms and ammunition recovered from January to date.” On acts of kidnapping, the JTF Commander said though the menace seems to be on the increase, its operatives command killed over 23 kidnappers, arrested 236 suspects and recovered several weapons from the hoodlums.

Suspected Sea Pirate

LNG Deal Ushers in Tighter Shell Spending Regime CONTINUED FROM PAGE 1 Shell completed the acquisition of liquefied natural gas (LNG) assets from Spain’s Repsol. Shell will burden its 2013 accounts with most of the cost, helping van Buerden commit to significantly lower spending from this year something Shell’s shareholders are very keen to see happen given that any budget strains can only dim the outlook for dividends. Shell and its peers in the industry are facing increasing investor pressure to keep a lid on spending as costs rise and prospects for oil prices wane. Shell said it would pay a net $3.8 billion to buy Repsol’s LNG portfolio outside North America and take on $1.6 billion of associated debt.

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Finance

Michael EBOH

he Federal Government granted a total of N23.493 billion as waivers and exemptions to energy firms and for energyrelated activities in the year 2013. The amount, according to documents obtained from the Budget Office, is mainly for import duty exemption and waivers for importation o f p l a n t s , m a c h i n e r y, equipment, spare parts, gas generators and turbines, supply of captive power g e n e r a t o r, d r e d g i n g machiner y and quar r y equipment among others. Specifically, a total of N18.495 billion was granted as waivers and exemptions for companies in the gas sector and for gas-related activities; N4.403 billion was granted to firms in the power sector and for power related imports, while the mining sector enjoyed waivers and exemptions valued at N595.43 million. The documents showed that three firms — Shell Petroleum Development Company, SPDC, Total Exploration and Production Nigeria Limited and the Ministry of Power and Energy — enjoyed total waivers and exemptions of N18.27 billion, representing 77.77 per cent of the total. Specifically, SPDC enjoyed the highest exemption of N8.5531 billion, for the importation of plants, machinery and spare parts. Total E&P Nigeria followed with total exemptions of N5.568 billion, for the importation of machinery and equipment for Ofon Phase II; machinery and equipment for gas utilization, development, turbine and gas pipelines. The documents from the Budget Office showed that To t a l E & P e n j o y e d exemptions on five different occasions, as the company carried out the importation of the items five times. Thirdly, the Minister of Power and Energy enjoyed total exemptions of N4.173 billion for the importation of machinery and equipment. Other firms who enjoyed significant waiver and exemption in the energy sector are: Ossiomo

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FG grants energy firms N23bn waivers in 2013 …Shell, two others account for 78% of total Investment Limited, Abuja — N671.28 million, for the importation of machinery and equipment spare parts for Nitrogen fertilizer and the Nigerian National Petroleum Corporation, NNPC, who got a waiver of N569.84 million for the importation of plants, machinery, equipment and spare parts. Gas and Power Limited enjoyed an import duty exemption of N547.414 million for the importation of plant, machinery and spare parts for gas utilization, while the Federal Government granted Gel Utility Limited, Abuja, import duty exemption valued at N542.53 million for the importation of gas turbine, plants and machinery spare parts. Indorama Eleme

Petrochemicals Limited, Port Harcourt enjoyed an import duty exemption of N494.35 million for the importation of machinery equipments and spare parts, while Netco Dietsmann Corporate Limited, Abuja, got an exe m p t i o n o f N 3 7 8 . 4 4 million for the importation of machinery equipment and spare parts for natural gas utilization. Other beneficiaries of the waivers and exemptions in 2013 are Shoreline Power Company Limited, Procter and Gamble Nigeria, Ondo State Government, Flour Mills Nigeria Limited, Agip Oil, Frontier Oil, Notore Chemical Industries, Rivers State, among others. The Nigerian Customs Service, NCS, had a couple of weeks ago, raised an alarm

The Minister of Power and Energy enjoyed total exemptions of N4.173 billion for the importation of machinery and equipment

that import waivers and duty exemptions granted by the federal government, put at N603 billion between January and September 2013,

has made it impossible for it to attain its revenue target for the year. Abdullahi Dikko Inde, Comptroller General of the NCS, gave the breakdown as waivers granted on importation of petroleum products — N263.8 billion, import duty credit certificate — N86.4 billion; NDCC instrument —N59.5 billion; import substitution — N96.9 billion. Others are revenue loss to manufacturers and assemblers put at N76.1 billion, revenue held in indemnities January to March 2013 on rice and sugar, drop in excise duty revenue due to close of some excise factories and deexcising of some excisable goods, and revenue loss to E C O W A S T r a d e Liberalisation Scheme for transaction entered in the economic sub-region.

Technology

Jimlaw2004@gmail.com

Jim Rex-Lawson Moses

lectric cars are a variety of e l e c t r i c vehicle (EV). The term “electric vehicle” refers to any vehicle that uses electric motors for propulsion, while “electric car ” generally refers to highway- limit, which capable automobiles powered by electricity.Lowspeed vehicles electric vehicles, classified asneighborhood electric vehicles (NEVs) in the United States, and as motorised quadricycles in Europe, are plug-in electricpowered microcars or city cars with limitations in terms of weight, power and maximum speed that are allowed to travel on public roads and city streets up to a certain posted speed varies by country. While an electric car ’s power source is not explicitly an on-board battery, electric cars with motors powered by other energy sources are generally referred to by a different name: an electric car powered by sunlight is a solar car, and an electric car powered by a gasoline generator is a form of hybrid car. Thus, an electric car that derives its power from an onboard battery pack is a form of battery electric vehicle (BEV). Most often, the term “electric car” is used to refer to battery electric vehicles. The Ger man Flocken Elektrowagen, built in 1888, was the world’s first electric car. Electric cars were popular in the late 19th century and early 20th century, until advances internal combustion engine technology and mass production of cheaper gasoline vehicles led to a decline in the use of electric drive vehicles. The energy crises of the 1970s and 1980s brought a short-lived interest in electric cars; although, those cars did not reach the mass marketing stage, as is the case in the 21st century. Since 2008, a renaissance in e l e c t r i c v e h i c l e manufacturing has occurred due to advances in battery and power management technologies, concerns about increasing oil prices, and the need to reduce greenhouse gas emissions.

ELECTRIC CARS As of December 2013, series production highwaycapable passenger cars and utility vans available in some countries include the Mitsubishi i MiEV, Chery QQ3 EV, JAC J3 EV, Tazzari Zero, Nissan Leaf, Smart electric drive, Wheego Whip LiFe, Mia electric, Volvo C30 Electric, BYD e6, Bolloré Bluecar, Renault Kangoo Z.E. Renault Fluence Z.E., Mitsubishi Minicab MiEV, Ford Focus Electric, BMW ActiveE, Tesla Model S, Honda Fit EV, RAV4 EV second generation, Renault Zoe, Roewe E50, Mahindra e2o, Chevrolet Spark EV, Fiat 500e, Volkswagen e-Up! and BMW i3. The world’s top-selling highway-capable all-electric cars are the Nissan Leaf, with global sales of over 92,000 units through early December 2013; the Mitsubishi i-MiEV, with global sales of more than 30,000 vehicles by June 2013, including more than 4,000 Minicab MiEVs sold in Japan, and over 10,000 units rebadged as Peugeot iOn and Citroën C-Zero and sold in the European market; and the Tesla Model S, with 18,200 units delivered through September 2013. Pure electric car sales in 2012 were led by Japan with a 28% market share of global sales, followed by the United States with a 26% share, China with 16%, France with 11%, and Norway with 7%. Benefits of electric cars over conventional internal combustion engine aut omobi le s i nclud e a significant reduction of local air pollution, as they do not emit tailpipe pollutants, in many cases, a large reduction in total greenhouse gas and other emissions (dependent on the fuel and technology used for electricity generation), and less dependence on foreign oil, which in several countries is cause for concern about vulnerability to oil price volatility and supply disruption. Widespread adoption of electric cars faces several

hurdles and limitations, however, including the higher cost of electric vehicles, the lack of recharging infrastructure (other than home charging) and the driver’s fear of the batteries running out of energy before reaching their destination (range anxiety) due to the limited range of most existing electric cars. History Electric cars enjoyed popularity between the late 19th century and early 20th century, when electricity was among the preferred methods for automobile propulsion, providing a level of comfort and ease of operation that could not be achieved by the gasoline cars of the time. Advances in internal c o m b u s t i o n t e c h n o l o g y, especially the electric starter, soon rendered this advantage moot; the greater range of gasoline cars, quicker refueling times, and growing petroleum infrastructure, along with the mass production of gasoline vehicles by companies such as the Ford Motor Company, which reduced prices of gasoline cars to less than half that of equivalent electric cars, led to a decline in the use of electric propulsion, effectively removing it from important markets such as the United States by the 1930s. However, in recent years, increased concerns over the environmental impact of gasoline cars, higher gasoline prices, improvements in battery technology, and the prospect of peak oil, have brought about renewed interest in electric cars, which are perceived to be more environmentally friendly and cheaper to maintain and run, despite high initial costs, after a failed reappearance in the late-1990s. Early history Before the pre-eminence of internal combustion engines, electric automobiles held many speed and distance records. Among the most notable of these records was

Thomas Edison and a Detroit Electric car in 1913. Source; wikipedia the breaking of the 100 km/h (62 mph) speed barrier, by Camille Jenatzy on April 29, 1899 in his ‘rocket-shaped’ vehicle Jamais Contente, which reached a top speed of 106 km/h (66 mph). Before the 1920s, electric automobiles were competing with petroleum-fueled cars for urban use of a quality service car. Proposed as early as 1896 in order to overcome the lack of recharging infrastructure, an exchangeable battery service was first put into practice by Hartford Electric Light Company for electric trucks. The vehicle owner purchased

the vehicle from General Electric Company (GVC) without a battery and the electricity was purchased from Hartford Electric through an exchangeable battery. The owner paid a variable per-mile charge and a monthly service fee to cover maintenance and storage of the truck. The service was provided from 1910 to 1924 and during that period covered more than 6 million miles. Beginning in 1917 a similar service was operated in batterieChicago for owners of the Milburn Light Electric cars who were facing the same challenge. In 1897, electric vehicles

1911 Ideal Electric Car ad, source; wikipedia CONTINUES ON PAGE 24

Technology

ELECTRIC CARS CONTINUED FROM PAGE 23

found their first commercial application in the U.S. as a fleet of electrical New York City taxis, built by the Electric Carriage and Wagon Company of Philadelphia. Electric cars were produced in the US by Anthony Electric, Automatic, Baker, Columbia, Anderson, Fritchle, Studebaker, Riker, and others during the early 20th century. Despite their relatively slow speed, electric vehicles had a number of advantages over their early-1900s competitors. They did not have the vibration, smell, and noise associated with gasoline cars. They did not require gear changes, which for gasoline cars was the most difficult part of driving. Electric cars found popularity among wellheeled customers who used them as city cars,where their limited range was less of a disadvantage. The cars were also preferred because they did not require a manual effort to start, as did gasoline cars which featured a hand crank to start the engine. Electric cars were often marketed as suitable vehicles for women drivers due to this ease of operation. In 1911, the New York Times stated that the electric car has long been recognized as “ideal” because it was cleaner, quieter and much more economical than gasoline-powered cars. Reporting this in 2010, the Washingotn Post commented that “the same unreliability of electric car batteries that flummoxed Thomas Edison persists today.

Revival of interest The global economic recession in the late 2000s led to increased calls for automakers to abandon fuelinefficient SUVs, which were seen as a symbol of the excess that caused the recession, in favor of small cars, hybrid cars, and electric cars. California electric car maker T e s l a M o t o r s begandevelopment in 2004development on the Tesla Roadster, which was

first delivered to customers in 2008. As of March 2012, Tesla had sold more than 2,250 Roadsters in at least 31 countries. The Mitsubishi i MiEV was launched for fleet customers in Japan in July 2009, and for individual customers in April 2010, followed by sales to the public in Hong Kong in May 2010, and Australia in July 2010 via leasing. Retail customer deliveries of the Nissan Leaf in Japan and the United States began in December 2010, followed in 2011 by The global economic recession in the late 2000s led to increased calls for automakers to abandon fuelinefficient SUVs, which were seen as a symbol of the excess that caused the recession, in favor of small cars, hybrid cars, and electric cars. California electric car maker Tesla Motorsseveral European countries and Canada.

Shenzhen, China in October, 2011. The Bolloré Bluecar was released in December 2011 and deployed for use in the Autolib’ carsharing service in Paris. Leasing to individual and corporate customers began in October 2012 and is limited to the Îlede-France area. In February 2011, the Mitsubishi i MiEV became the first electric car to sell more than 10,000 units, including the models badged in Europe as Citroën C-Zero and Peugeot. The record was registered by Guinness World Records. Several months later, the Nissan Leaf overtook the i MiEV as the best selling all-electric car ever. Models released to the market in 2012 include the BMW ActiveE, Coda, Renault Fluence Z.E., Tesla Model S, Honda Fit EV,

The BMW ActiveE is part of a field testing program aimed that contributed to the development of the BMW i3. ; wikipedia In the 2011 State of the Union address, U.S. President Barack Obama expressed an ambitious goal of putting 1 million plug-in electric vehicles on the roads in the U.S. by 2015. The objectives include “reducing dependence on oil and ensuring that America leads in the growing electric vehicle manufacturing industry.” The Smart electric drive, Wheego Whip LiFe, Mia electric, Volvo C30 Electric, and the Ford Focus Electric were launched for retail customers during 2011. The BYD e6, released initially for fleet customers in 2010, began retail sales in

To y o t a R AV 4 E V, a n d Renault Zoe. The Nissan Leaf passed the milestone of 50,000 units sold worldwide in February 2013.

Advantages and Disadvantages of EVs The most obvious advantage of electric car batteries is that they don’t produce the pollution associated with internal combustion engines. However, they still have environmental costs. The electricity used to recharge EV batteries has to come from somewhere, and right now, most electricity is generated by burning fossil fuels. Of course, this produces pollution. But how does the pollution produced by bur ning fossil fuels to recharge electric car batteries compare to the pollution produced by internal combustion engines? According to the Electric Vehicle Association of Canada, or EVAC, even EVs recharged from coalpowered electric generators cut carbon emission roughly in half. EVs recharged from cleaner forms of electrical power generation, such as hydropower and nuclear plants, can reduce carbon emissions to less than one percent of those currently produced by internal combustion engines. So, even in the worst case scenario, cars operated by EV batteries are cleaner than gas-powered cars. Another important advantage of batter ypowered motors over gaspowered engines is the lower cost of the fuel — that is, electricity for EVs and gas for the internal combustion engines. The United States Department of Energy has calculated that a typical EV can run for 43 miles on a dollar’s worth of electricity. Only a substantial drop in the

Electric car charging in Amsterdam. Source; wikipedia

cost of gasoline couldgive gas-powered cars anywhere near such a low cost per mile. Yet another advantage of these rechargeable batteries is that they recycle well. Almost 100 percent of these batteries can be recycled, which keeps old batteries from becoming a disposal problem. The major disadvantage of battery-powered cars is the time required to recharge the batteries. With lithium-ion battery technology, a fully charged EV can travel a distance comparable to an internal combustion engine vehicle with a full tank of gas, but it still needs to be placed on a recharger at the end of that time. At present, this means a drained EV will be out of service for several hours before it’s fully recharged. Of course, this is a serious disadvantage. In the future, faster recharging technology may become available, but in the near term, electric cars won’t be the vehicles of choice for long trips. Even so, most driving is done relatively close to home and for this reason, battery power will serve as well as gasoline power. A possible solution to the recharging situation may be batteryreplacement stations, where instead of recharging your EV you can simply swap your drained battery for a fully charged one. This system would allow batteries to be recharged outside of vehicles and would greatly reduce the amount of time required to get an EV up and running again after its battery is fully discharged. Another disadvantage of electric car batteries is their weight. Because they need to do more than traditional car batteries, electric car batteries need to be linked together into arrays, or battery packs, to provide additional power. These collections of batteries are h e a v y. T h e lithium-ion battery pack in a Tesla Roadster weighs about 1,000 pounds (453.6 kg). That’s a lot of weight to carry and it can greatly reduce the car’s range.

Power Kunle KALEJAYE

or over 14 years, the federal government pursued the privatization of Power Holding Company of Nigeria, PHCN assets. 2013 witnessed the end of this rigorous exercise marking a historical change in the nation’s power sector. In this interview, the Chief Executive Officer of MOMAS System Nigeria, Engr. Kola Balogun, projects 2014 expectations in the sector 2013 in retrospect 2013 has been a year that witnessed what has been pending for a very long period of time, that is the conclusion of privatizing the power sector. So its no longer news and we have to thank the federal government for the imitative. However, for every good policy anywhere in the world it is humans that can make that policy not to be good and for very bad policy it is humans that can make that policy to be good. The initiative of privatizing the power sector can become something regrettable if care is not taken because some of the investors have not been properly informed, they have not properly investigated the peculiarity surrounding the distribution companies that they have bought and that would go a long way in slowing down the process of witnessing the dividends of privatizing each of those distribution companies. It is a common knowledge that we have three segments in the power sector. The generation, transmission and distribution but where most people are familiar with is the distribution. Every electricity consumer wants to see power in their house and that would determine if the sector is doing well or not. However, if everybody wants to see electricity, everybody wants to equally pay and ensure that they are not cheated. Also government expects that nobody should cheat them in this era. In order words what we need to do first of all is to address our collection platform where everybody would find it easy to pay for their electricity, where everybody would find it easy to buy their credit if they are using prepaid. We should try as much as possible to discourage estimated billing, it is an abuse of consumer right, it

‘NERC should set bench mark for new investors’ —Engr. Kola

Engr. Kola Balogun

It is a common knowledge that we have three segment in the power sector. The generation, transmission and distribution but where most people are familiar with is the distribution. Every electricity consumers wants to see power in their house and that would determine if the sector is doing well or not should be disregarded in all our billing system. What would help us to discourage that is proper metering. So what all investors need to do irrespective of which country

they come from is to harmonized our billing platform, where we can have higher collection efficiency. This collection platform would be done in such a way that it will interlink with all

the banking infrastructure that we have and as such it would be easier for every consumer to go to every ATM point or POS and make electronic payment. It would be easier to go to the street, buy a recharge card and recharge their meters. Once we have these issues well addressed and it is error free, whatever metering plan you have on it would have a soft landing because your landing point is your collection efficiency. So no matter the amount of power we have generated, if we are not able to collect them efficiently, it means that the transaction is still flawed because we need to guarantee all the GENCO in the sense that if we don’t have enough money we cannot pay them. Therefore, we need to

harmonise our collection and billing platform to merge with the banking sector for easy means of collecting revenue. Having done that, we need to ensure that we enact a very solid law or regulation that punishes energy theft. If I know that this is the consequences on cheating on electricity, then I would be made to face the law or I will discourage myself from doing that and as such anybody who wants to do policing of energy theft would then create another channel of job because it means somebody would have to be doing the monitoring all over the country. So you can imagine the number of people that would be employed along that line. They will monitor improper installations, energy theft and lots more. This has to be the job of regulator or the new electricity company called EMS, they have to bring out module of planning or guidelines to guide these new investor because many of them don’t know the terrain very well and they need to be guided. The success of the telecommunication sector was through the efficiency of NCC. They were at their top form so to speak in the entire affair and monitoring every activity in the telecom sector. This is the reason why we our regulator in the power sector to be up and doing at this point in time. They need to come out more than what they are doing now. This is their era than what we use to have in the past. They should come out, roll out plans and tell the new investors what they need to do and they should set a bench mark or task to achieve at every quarters. These are things that we need to do quickly, then we would see the goodness in the power sector. Even if we are generating enough electricity and there CONTINUES ON PAGE 26

Power

‘NERC should set bench mark for new investors’—Engr. Kola CONTINUED FROM PAGE 25

is means to distribute the energy, then it would be a waste. So as soon as we guarantee the payment structure then we can now do network upgrading. The transformers need to be upgraded, the cable lines needs to be upgraded then we would have a good network, power will be distributed evenly and people that don’t have power supply will begin to have. The major task ahead of us is that we need to set a bench mark that will be roll out by NERC. They need to set a very good standard and template by which the new investors are going to operate because most of them don’t seems to understand the terrain very well. Power supply dropped after complete privatization Power supply dropped mainly because of the staff disengagement. The process in which the staff were disengaged was not too proportionate. The time they send in the list and the time they actually did the disengagement process was not too proper. You should not disengage technical staff because once you disengage technical staff there is no body to replace him. That approach was not too go enough. What they would have done was to retain all the staff for a minimum of six months then in the process they can now start in doing the cleaning exercise. Immediately they took over, they started to disengage them and that was what affected the whole process. They should have left all of them and start to look at those that are not really relevant to the success of energy distribution. Notwithstanding, the fact that the gas issue is still there, am not to conversant with the gas position to the GENCO so I cannot state authoritative what happen at that time but I know that the power generation went down. Sur vival of CAPMI scheme, how visible is it? Your question is ver y important because it is one of those things that is draining people like us who have actually invested heavily in the sector, expecting a very good return which we have not gotten up to till date. CAPMI is a leverage for consumers who will come and

Engr. Kola Balogun purchase a pre paid meter for a fix mount which will be refunded after a period of time. But when the new investor came in they taught that it was a particular agenda that is not going to favor them but if you look at the entire meter process, you would see that it is actually a relief on their part. Because once a consumer pay, it is not part of their investment plan to install meter to that consumer. I think what they have in mind is that they want to understudy the entire process, they want to examine it and see what its look like before they can continue scheme and that is why they actually slowed it down, hence it is affecting us who have invested so much in it because we have produced a lot of meter for this scheme and we were excepted to have a minimum stock before we were accredited for the scheme, those things are actually biting us. We have over prepared for

the privatization of the sector and for the CAPMI scheme and for us not to be put in line is actually slowing us down and it is affecting our finances both in the banking

sector and to those we have expose ourselves to. But we are happy that NERC has come out to say that the scheme is still in place but not all the DISCOs are actually implementing the scheme today but we are hoping that by next year they would come out with their various plan to roll out the CAPMI scheme and bring out their own metering plan so that electricity consumers can have meter. More meter importers, less domestic manufacturers For a regulator to appoint so many importers of pre paid meters does not seems to go down well with the local content policy that we have because if you are asking a lot of them to import, what will happen to those who are manufacturing locally? We still need to reduce the number of importers, we need to encourage more industrialization. Even the number of manufactures that were accredited they don’t have existing factory but only a few of us does. But NERC is going to come out with another set of list for manufacturers because they are going around ascertaining those that have existing factory and those that are qualify to be importer in the entire sector. The fact that they want to import, there are certain category of meters that can be imported that we cannot produce locally like the industrial meter still needs to be imported but we are efficient enough to produce

The fact that they want to import, there are certain category of meters that can be imported that we cannot produce locally like the industrial meter still needs to be imported but we are efficient enough to produce domestic meter and meet local demand

domestic meter and meet local demand. We can produce 100, 000 a month. Metering is something you don’t do in a rush, it has to be in phases like the smart metering, it has to be taken in steps to follow up the infrastructure in place. It requires a lot of telecommunication infrastructure and with that not all consumers are eligible to it, not all areas are suitable for smart metering. So we need to take it in phases and do the network placing and do the consumer metering process in phases. 2014 projections There should be a round table discussion with both the stakeholders and the players in the industry. The regulator needs to call all the players in the industry and come out with a communiqué that will the sector forward. We need to hear from all stakeholders. What do they have in mind? What is the way forward? That is very essential for us to have a guideline for the next phase and we have to do it on time so that in the first quarter of 2014 we would have already have a guideline in taking a decision for the way forward. Also the need to reemphasis the continuous growth of our country, we need to develop our country by ensuring that most of the materials that will be require for a long period of time should be produced locally, the market is there and the product is there, so why can’t we do it right? The whole onions lies with the regulator and all those monitoring the sector. The earlier we seat down and discuss, the better to get a direction because we need somebody set up the direction and say this is the template everybody should key into. The template in t e r m s o f D I S C O performance, template of protecting the local content in the sector, and the flexibility in ensuring that consumers have the simplest way to pay their electricity bill, a system that would not allow them to pass through any stress and to discourage estimated billing system. We can achieve these things in the first quarter of next 2014 and by the second quarter we are already seeing a precise work out power sector. It is not as if this things will not have little teething problem but we can now start to address them and before the year runs out we would have a clean slate in the power sector.

Power

FG blames poor power supply on vandalism of the Escravos

Michael EBOH

he Federal Government is to spend N20.6 billion to ensure steady supply of power across the country in 2014. The amount contained in the 2014 Federal Government’s 2014 budget proposal is 7.87 per cent less than the N22.36 billion budgeted for the same purpose in the 2013 budget. Major projects to be undertaken with the fund as proposed in the budget include the construction of a 215 mega watts Low Pour Fuel Oil (LPFO)/Gas power plant valued at N3.7 billion and a 10 mega watts wind farm worth N1 billion. The Federal Government is also proposing an expenditure of N2.3 billion for the construction of small and medium hydro power plants; while N461 million is proposed for renewable energy for electricity generation. The government also planned to spend N700 million and N1.8 billion to connect Gurara and Bayelsa, respectively to the national grid in 2014. The FG budgeted N1.4 billion for the Electrifying Nigeria (Light Up Nigeria) project; N150 million for advocacy and awareness for successor companies and N1.7 billion to conduct feasibility studies for coalfired plants at Enugu, Gombe, Benue and Kogi. Other capital projects to be undertaken in 2014 are: consultancy ser vice for detailed engineering design a n d p r o j e c t management/super vision valued at N300 million; N250 million was projected as takeoff grant for the HydroElectric Power Producing Areas Development Commission, HYPADEC, Act, while N300 million was set aside for Environment Impact Assessment and resettlement study for the 700 mega watt Zunger u Hydro -Electric Power project. The National Load Demand study is to gulp N250 million; sustenance of power sector administrative support structure — N150 million, while N1.75 billion was set aside for the purchase of administrative buildings for the Nigerian Electricity Regulatory Commission, NERC. Despite the ongoing

Chris OCHAYI

President Goodluck Jonathan

FG to spend N21bn for stable electricity in 2014 reforms in the energy sector, which has led to the sale of the Power Holding Company of Nigeria’s successor companies among other far reaching initiatives, the Federal Government is to spend N136.99 billion on the energy sector — Power, Petroleum Resources and Mines and Steel Development — in 2014. The amount represents 2.95 per cent of the total projected expenditure in the 2014 budget and is 7.79 per cent less than the N148.56 billion allocated to the sector in the 2013 budget. This is irrespective of the

f a c t t h a t t h e Fe d e r a l Government is anticipating a N7.16 trillion Gross Federally Collectible Oil and Gas Revenue in the budget, which represents 20.92 per cent of the projected Gross Federally Collectible Revenue of N10.88 trillion. Specifically, the Federal Government is proposing an expenditure of N61.928 b i l l i o n i n Pe t r o l e u m Resources sector in the 2014 budget; N62.45 billion for power and N12.607 billion for mines and steel development. The allocation was broken

down further into N3.4 billion recurrent and N59.05 billion capital expenditure for power; N55.71 billion recurrent and N6.22 billion capital expenditure for petroleum resources and N10.58 billion recurrent and N2.03 billion capital expenditure for mines and steel development. In the Petroleum sector, the Federal Gover nment is planning to spend N800 million on the Hydrocarbon Pollution Restoration Project; N162.678 million for surveillance and monitoring of environmental restoration programme and N150 million for the cleanup of oil and gas sediments.

BUJA: The F e d e r a l Government has blamed the power shortage experienced in some parts of Lagos State during the Christmas celebrations on compounded gas shortage resulting from the recent extensive vandalism of the Escravos-Lagos, western axis, gas pipeline. The Minister of Power Prof. Chinedu Nebo, who disclosed this in Abuja, however assured that everything necessary is being done to normalise electricity supply to parts of the country where shortages have been experienced in the past few weeks. Nebo, who expressed deep regret over the situation in parts of Lagos and other areas that have suffered reduced supply due to the gas supply challenges, said the problem was already being squarely addressed by the Federal Government. He said repair work on the pipeline completed last week was now taking a few more days due to the discovery by engineers, of at least two more leaks in the process of pressurising, prior to re-streaming the pipeline. Completion of repairs and re-commissioning of the pipeline, earlier planned for this week, is now expected to hold before the end of January. The minister said that although there was an increase in generation last week despite the unfavourable gas situation, but Lagos received a maximum load of 816MW on Sunday 29th December, less than the required minimum of 1,000MW, describing this as inadequate and unacceptable for the nation’s commercial nerve centre.

Insurance Rosemary ONUOHA

vailable data i n t h e insurance i n d u s t r y shows that the volume of business written by the industry in the last financial year was estimated at about N240 billion, as against N217.7 billion made in 2011. With such a paltry figure recorded as Gross Premium Income, GPI, stakeholders continue to worry how the sector can play big in the energy sector. It is in light of this that insurance operators, in 2013, made series of efforts to edge up capacity in oil and gas risks underwriting. Accordingly, there were moves to revive oil and gas insurance pools to enable operators play big in the energy business. Specifically, the Nigerian Insurers Association, NIA, worked hard to revive the Nigeria Oil and Energy Insurance Pool, NOEIP, to enable underwriters maximise the nation’s comparative advantage in oil and gas production. With the belief that the pool initiative will assist the industry improve on its oil and gas underwriting, there were modalities being put in place by operators to take advantage of the opportunity offered by the initiative to build capacity in the area of energy underwriting. Following the report of the committee set up by the Commissioner for Insurance, Fola Daniel, for the industry to look into how it can explore the provisions of the Nigerian Content Act 2010 to increase the local retention capacity in oil and gas business in Nigeria, NIA’s Governing Council, through its committee, reviewed the report and recommended the resuscitation of the existing insurance pool. According to Director General of the NIA, Mr. Sunday Thomas, the committee made progress in fine-tuning other details required for the effective takeoff of the pool to enable it achieve its goals in increasing local capacity. In going forward, Former Head of State and Head of Interim Government, Chief Ernest Shonekan, said that

2013 in retrospect: Insurers strategise on capacity there is need for insurance companies to move out of the b ox a n d ex p a n d t h e i r businesses to be able to underwrite bigger businesses stressing that when Nigerian companies are given some special risk in oil and gas, they run abroad. Shonekan said that all stakeholders in the industry must join forces to formulate creative policies in oil and gas business. Appointment brokers In the course of 2013, the Nigerian National Petroleum Corporation, NNPC, appointed 42 insurance brokers for it’s over N50 billion insurance risks. The corporation paid part of

Insurance cover the premium, while negotiation continued for payment of the outstanding. The appointed brokers successfully placed the risks with reliable local underwriters and collected their commissions as specified in the new premium collection and remittance law. Immediate past President of the Nigerian Council of Registered Insurance Brokers, Mrs. Laide Osijo said “I want to commend the NNPC for prompt payment of premium. Immediately the business was given, they complied with the ‘No

The Nigerian Insurers Association, NIA, worked hard to revive the Nigeria Oil and Energy Insurance Pool, NOEIP, to enable underwriters maximise the nation’s comparative advantage in oil and gas production

premium no cover’ rule, and paid the premium. All the brokers that were approved for the business have taken their commission, which is highly commendable. With the payment, when claims occur, definitely underwriters will pay their claims. Brokers will help the NNPC in ensuring that the claims are paid promptly too.” “I appeal to other ministries, departments and agencies of government to follow suit,” Osijo said. Improved capacity Meanwhile, in the course of

the year, the National Insurance Commission, NAICOM, said that local capacity in the underwriting of oil and gas business improved. Commissioner for Insurance, Mr. Fola Daniel, said local capacity moved from less than 10 per cent to 48 per cent and the commencement of implementation of Section 50 of the insurance Act 2003 improved financial assets of operators.

Interview

We are committed to curbing crude oil theft in Niger Delta —JTF Commander Samuel OYADONGHA

he year 2013 was an eventful one for the Joint Ta s k F o r c e codenamed Operation Pulo Shield, a special security outfit saddled with the responsibility of stemming crude oil theft, pipeline vandalism and other crimes against the vast economic interests in the Niger Delta in the troubled region. The out going Commander of the JTF, Major General Bata Debiro in an interview in Yenagoa, relieved the successes of the outfit in the out gone year as well as its challenges. Excerpts : How would you describe the performance of the JTF in 2013? The mandate of the JTF as you are aware, is to stop illegal oil bunkering activities in the upstream sector, protect the oil and gas facilities and installations and ensure a secure environment for these and other lawful activities. To achieve this mandate, the JTF conducted series of operations on land, waterways and air against illegal activities of oil thieves bedevilling the oil and gas industry. In the period under review, the JTF successfully conducted several land, maritime and air operations against illegal oil bunkering and refining activities, pipeline vandalism, armed banditry and sea robbery. The Task Force also conducted anti-kidnapping operations, cordon, search and destruction of re-emerging militant camps. It equally, provided security to oil and gas facilities in the region to sustain their production. Consequently, the general security situation within JTF’s Area of Responsibility, has been relatively calm. Although operating in an extremely challenging terrain, the JTF has remained determined and committed to achieving its mandate. B u t i l l e g a l

Major General Bata Debiro bunkering/illegal refinery activities have remained unabated in the region The JTF anti-illegal oil bunkering/refining operations in the year, led to the arrest of numerous suspects, the impounding of several barges, vessels, trucks and other tools used to perpetrate the crime and the outright destruction of illegal refineries. These operations like many others were achieved through constant patrols based on credible intelligence obtained from various sources particularly higher Headquarters, other components of the JTF, informants and other good citizens. During the period under review, the JTF conducted a total of 1,025 anti-illegal oil bunkering patrols, while over 1,951 illegal refineries have been destroyed. Also

The Task Force also conducted anti-kidnapping operations, cordon and search and destruction of reemerging militant camps. It equally, provided security to oil and gas facilities in the region to sustain their production scuttled were 81 barges, 1,117 Cotonou boats, 82 tanker trucks, 1,873 Surface tanks and 1,857 suspects were arrested. Additionally, 39, 760 drums of illegally refined products, 570 pumping machines and 75 outboard motor engines used

as apparatus to facilitate oil t h e ft we re s e i z e d a nd destroyed. Forty six vessels of various sizes and capacities were also arrested during the period under review. Although limited incidents of pipeline vandalism still

occur in the region, JTF operations has drastically reduced their occurrence. Those that still occur are mostly in remote areas of the creeks carried out at night between 2300hrs – 0300hrs by criminal gangs who take advantage of the JTF’s limited accessibility of the difficult terrain. The JTF provides full security on Port Harcourt–Aba pipeline, which has succeeded in reducing the incidents of vandalism on that axis. The JTF operations therefore enabled the PPMC to re-open the Port Harcourt - Aba Pipeline which had been closed for years. Similarly, the presence of the JTF had encouraged the PPMC to consider the re-opening of the Aba - Enugu Pipeline to be extended later from Enugu to Makurdi. The JTF has in addition to physical protection of the oil facilities, intensified patrols of the pipelines in order to forestall acts of pipeline vandalism. The JTF provides physical security to oil facilities. Critical oil platforms have troops deployed on them round the clock to ensure their protection. These efforts have assisted in sustaining the operations of these companies and lowering of total deferred production of the crude oil. However, the situation can be improved upon, if the oil companies are encouraged to adopt international best practices by installing ICT based sensors within their pipelines to provide early warning of acts of sabotage. Aside the call within the security circle for the oil companies to install ICT based facilities as first line of defence against acts of sabotage, what other strategy is being deployed to contain the situation… Yes, Ground trotting patrols, is an inch-by-inch foot patrol along the pipelines in the creeks and swamps. This was used to check the activities of vandals on the Nembe Creek Trunk Line (NCTL) pipeline.

Labour Victor AHIUMA-YOUNG

IGERIA L a b o u r Congress, NLC, has declared as unacceptable the fact that the Nigeria’s petroleum sector is still regulated by the old Petroleum Act of 1969, calling on the National Assembly to immediately pass the p r o t r a c t e d Pe t r o l e u m Industry Bill, PIB. NLC in a New Year message to Nigerian workers by its President and Acting General Secretar y, Abdulwaheed Omar and Chris Uyot, said the body threw its weight behind the demand by the oil sector unions (Nigeria Union of Petroleum and Natural Gas Workers, NUPENG and its Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN) for the urgent passing of the Bill this year. According to NLC, a major feature of the Nigerian economy, which emerged in 2013, was the dwindling and unstable public finances of the country, saying “2013 had been characterized by government earnings’ underperformance. In particular, earnings from oil fell below budgetary expectations resulting in budgetary under financing in both the federal and state governments. Recent disagreements between government officials and inconclusive Federation Account Allocation Committee (FAAC) meetings highlight this emerging threat to the national economy.” “The major underlying factor is the fall in official figures of oil production. This figure has fallen to approximately half of the projected figures in the 2013 budget and even below the production levels in the worst days of militancy in the Niger Delta. Daily production figures have hovered between 1.3 and 1.5 million barrels. This situation has arisen largely due to increase in oil theft. Official figures on production are only a small fraction of actual production as huge amounts of crude are stolen. According to government itself, the value of stolen crude oil is estimated at over six billion dollars per annum.”

NLC demands urgent passage of PIB We support the demand by the oil sector unions for the urgent passing of the Petroleum Industry Bill PIB this year. It is unacceptable that the petroleum sector is still regulated by the old Petroleum Act of 1969. The PIB with all the proposed inputs by all stakeholders will undoubtedly promote transparency and accountability and national benefits

“The continuance of this iniquity holds dire consequences for this country. Accordingly, in spite of vested interests, government must be seen to commit itself to stemming this ignominious act. This process should include the harnessing of the crude refining process by local individuals instead of the futile boot tactics by the task force. To compound the matter, NNPC has not been transparent and up to date in making remittances to the Fe d e r a t i o n Ac c o u n t i n respect of crude oil sales and

the allocation to it for domestic consumption. The recent embarrassing altercation between the Central Bank of Nigeria (CBN) and the NNPC over shortfalls in remittances has further left a sour taste in the mouth. When the Central Bank comes public with figures, Nigerians expect such figures to be accurate, verifiable and incontestable. The flip flop on the amount owed the Federation account by the NNPC has further c o m p o u n d e d t h e opaqueness which characterizes the

Abdulwaheed Omar

management of oil revenues and resources in our country.” “We support the demand by the oil sector unions for the urgent passing of the Petroleum Industry Bill PIB this year. It is unacceptable that the petroleum sector is still regulated by the old Petroleum Act of 1969. The PIB with all the proposed inputs by all stakeholders will undoubtedly promote transparency and accountability and national benefits.” The body added that “looking into the future, there is the need to recognize that

the international market for Nigerian crude is likely to shrink as alternative sources come on stream. Investment in s h a l e g a s development in the US and other countries are beginning to yield results. Congress will continue to articulate f o r g r e a t e r transparency in the management of the oil s e c t o r a n d diversification of the economy.”

Labour

Why Nigeria should not treat oil theft with kid gloves—Ogbeifun

n this interview, an industrial relations practitioner, former President of Pe t r o l e u m a n d Natural Gas Senior Staff Association of Nigeria, PENGASSAN, and former Deputy President-General of Trade Union Congress of Nigeria, TUC, Dr. Brown Ogbeifun, spoke to Sweet crude on the alarming rate of crude oil theft, pipeline vandalism, planned privatization of the four public refineries, and the p r o t r a c t e d Pe t r o l e u m Industry Bill, PIB. Excerpts. What is your impression on the state of oil industry in Nigeria as at today? The state of the industry as today, specifically in 2013, is a mixed grill of gains and losses. The refineries’ capacity utilization was enhanced though still not where they should be and this meant that Nigerians were able to fuel their cars without tears for another whole year. On the other side of the coin are the sad issues of massive vandalism of petroleum products pipelines, crude oil theft and further divestments by some of the Oil Majors. Overall, as a nation, we should have done better in the repositioning of Nigeria’s Oil and Gas sector that would have enabled it take the central role of being the central focus in global oil and gas affairs. What is your take on the unabated theft of the nation’s crude and pipeline vandalism that you spoke about? Vandalism and crude oil theft are whirlwinds that shall do no good to the nation. I do not know of any other nation, where vandalism of petroleum products’ pipelines in order to steal crude is as rampant as we have in Nigeria. Figures ranging from 200,000 to 350,000 have been touted as daily crude oil stolen from the lines between 2010 and 2013. Apart from other leakages, this is a very serious economic hemorrhaging condition that should be stopped by all means. What analysts usually focus on in

Dr. Brown Ogbeifun

The illegal refineries use crude as its feedstock and such refineries are within communities in the Niger Delta. The products are sold in towns and villages in this country. The unused crude finds its way to the international market and paid for in dollars calculating the losses is the amount of crude stolen without putting into consideration the cost of cleaning the spills and fixing the pipelines by the companies. What of the damage to our national image and the untoward effect of discouraging foreign investments? This is an

incalculable damage that cannot be accounted for in naira and kobo. But it seems security agencies are finding it tough to deal with because of the enlarged circle of the powerful cabals and conspirators. The international community, financial institutions within and outside Nigeria, possible

connivance of some security operatives and Nigerians are also culpable because we seem to be looking the other way while these nefarious activities take place. The vandals operate in communities inhabited by Nigerians and the barges used are not submarines that cannot be detected or match boxes that can be stuffed in the pocket. The illegal refineries use crude as its feedstock and such refineries are within communities in the Niger Delta. The products are sold in towns and villages in this country. The unused crude finds its way to the international market and paid for in dollars. The cabals do not have underwater banking institutions where these proceeds are kept. They use conventional banks within and outside Nigeria. The negative impacts of vandalism and crude oil theft include the destruction of aquatic and far mlands, economic sabotage which explains the shortfall of Nigeria’s 2014 budget from $29.3 billion in 2013 to $23.3 billion in 2014 and divestments by some International Oil Companies, IOCs, with attendant job losses thereby compounding the unemployment situation in Nigeria. Compounding the situation is the security challenges facing us as a people. Under these circumstances, apart from corrupt investors, no transparent investor will be ready to make any meaningful investments in this critical sector. The effects of vandalism and crude theft are so colossal that no nation can progress with such a negative societal value. It is for this reasons that the United States of America (USA) c a l l e d o n t h e Fe d e r a l Government of Nigeria to do everything possible to address the issue of largescale oil theft in the Niger Delta, and the House of representatives has also set up a 17 man committee to look into the same issue. So, what is the way forward? The

international community should stop playing the ostrich by blaming us for corruption and at the other end accepting to keep proceeds of corruption in their vaults. They should adopt a don’t see and don’t touch stolen crude oil from Nigeria approach and seriously sanction or blacklist any marketer found guilty of trading in stolen crude oil. Once there are no buyers, illegal bunkering shall become less attractive and at the end gradually fizzle out. As citizens, the communities where these illicit activities take place should report all clandestine and illegal bunkering activities to security agencies because they suffer or shall suffer the negative impacts of the nefarious activities of these vandals. Their environments are being destroyed with reckless abandon while the illegal bunkers smile to the banks with their loots in foreign currencies. The community farmlands and water are destroyed and some of the crude ways of managing the stolen crude by the vandals have severe health consequences for this and the next generation. So, it is in the interest of the communities to assist government in eradicating the menace of vandalism and crude theft. Our security agencies must up their strides against these criminals and consistently work to identify and flush out the enemies within that may be sabotaging their efforts. They seem to be the last hope of this rescue mission because we as helpless civilians cannot confront these menacing vandals with our bare hands. Failure to do this may lead to a collapse of the entire oil and Gas Sector with not enough money to service salaries and other critical sectors. Tackling them with kids’ gloves may lead to a more fairy and deadlier wars as drug war rages in some parts of Latin America. We may think it is impossible. But when one looks at the body languages of the Governors who come to Abuja for monthly FAAC rituals, one can say that continued puncturing of our economic jugular by vandals and stealing the crude meant for the development of the country portends serious danger for Nigeria.

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Solid Mineral

Niger State under siege N by illegal miners Gabriel EWEPU

iger State is one of the states in the NorthCentral region of the countr y, endowed with amazing solid mineral resources that have great potentials to turn the economy of the state and favourably compete with oil producing states in the South-south region. The rich commercial deposits of various types of industrial minerals of high quality are also available in the State, and can be used both for domestic and export markets. Therefore, making the State a potential hub for investors as a lot of investment opportunities in the solid minerals sector exist in the State. The State is blessed with Gold, Talc, Kyanite, Kaolin, Ball clays, Graphite, Feldspar, Marble & Dolomite, Manganese; Mica, Lead & Copper, Quartzite, Asbestos, Iron, Silica sand, Granite, Gemstones (varieties). The State government according to sources was making frantic effort to harness these solid mineral resources through a public private partnership agreement, and the federal government was also wooing investors into the State to tap these resources lying fallow for decades. The worrisome trend right now in the State is the challenge of illegal mining by some people within the State and others from different parts of the country including foreigners believed to be sponsored by money-bags who were into the illicit trade. Gold is one of the most precious stones that have been illegally mined by these economic saboteurs, and they were making brisk business and profit out of the trade as some merchants do patronise them. Recently, the Ministry of Mines and Steel Development, MMSD, discovered a haven of illegal gold miners in MailumbaGarin Gabas, Rafi Local Government of the State. The illegal miners were discovered by a Special Ministerial Taskforce Team led by Engr. Frank Odoom of

Illegal mining site

The miners were using crude implements, which include mattocks, diggers, head-pans, mortars, pestles and others, for the exploitation of gold deposits at the site, and they were confident to state that the site had large deposits of Gold the Department of Mines Inspectorate in the ministry. The illegal mining site had been a beehive of social and

economic activities as over 1, 000 artisanal miners were neck deep in the business. The young men in this site

had dug over 50 pits in search of the precious stone, and told the team of the Special Ministerial Taskforce of Ministry Mines and Steel Development that they had to engage in the trade after the farming season, and also to make ends meet. One of the illegal miners who had been in the â&#x20AC;&#x2DC;businessâ&#x20AC;&#x2122; for over 20 years, Mr. Mohammed Sani, who spoke in Hausa language said he had been engaged in the business from his youth and had made substantial amount of money as he was able to feed his family and take care of others. Sani said they were not

ready to go into robbery, but decided to engage themselves with the dangerous business for survival. The miners were using crude implements, which include mattocks, diggers, head-pans, mortars, pestles and others, for the exploitation of gold deposits at the site, and they were confident to state that the site had large deposits of Gold. He further revealed that Nigeriens come to the Mailumba- Garin Gabas mining site for the illegal exploitation of the precious stone. He revealed that there CONTINUES ON PAGE 34

Solid Mineral

Illegal mining site

Niger State under siege by illegal miners CONTINUED FROM PAGE 33

was a black market, which served as a point of contact between them and smugglers of the commodity to any part of the world. He also said the level of refining of the Gold at the site produces quality 19 carats, but it was not really ascertained on the claim of the quality, which a gram was sold for N5, 000 on daily basis. They also carry out trade by barter for chemicals, particularly Mercury chemical needed for processing of gold. One of the miners, Mr. Haruna Dankano , who demonstrated the processing of mined Gold and it was discovered that they had already endangered their health after a long period of engaging in the trade, because they used the dry method of processing the Gold with the aid of Mercury chemical.

Others who could be possibly affected, include those who sell goods and services to them at the site, the hamlets around the environment, and the animals living in the area. Mr. Odoom raised an alarm that this was exactly the process the Zamfara miners were doing before the eventual outbreak of lead poisoning in the area. He said Mercury was a dangerous and harmful chemical to human and animal health. Odoom said: “These are illegal gold miners, who are doing the wrong thing as you can see, and are contravening the Minerals and Mining Act of 2007 and Mining Regulations 2011. “It is a success story of the Department of Mines Inspectorate. We are here to sensitise them about the hazards they are posing to the environment and to their own

health. And to let them know that it was criminal to carry out such activity. “They are to stop mining immediately until they form a co-operative and are registered with the Department of Artisanal and Small-scale Miners. Security officials will be drafted to effect the closure. “We cannot allow them to continue because we do not want the re-occurrence of what happened in Zamfara State here. The method of processing the gold is very crude, as they are using the dry processing method, which was the same with the Zamfara illegal miners that caused the death of many people.” One of the team members, Engr. Gabriel Yakubu, told the miners whose age ranged between 17-40 years, about the use of Mercury for processing coupled with the

dry processing method could cause cancer and other ter minal ailments, and advised them to stop the operation. The Mines Inspectorate Department disclosed that there were over 30 illegal mining sites scattered across Niger State. And it has become a serious concern as the illicit business was growing unabatedly, and was booming seriously as sponsors of the nefarious act supports and sustains the business. According to the Mines Inspectorate Department, these merchants of death had also silent the local chiefs whose communities were put on ‘death-row’ with huge sums of money for the deadly operation to go on uninterruptedly, and the chiefs had always claimed ignorance about such activities in their domain. From the discoveries of

illegal mine sites in Niger State people, especially rural dwellers, majority of them were sitting on a keg of gunpowder that could consume thousands of lives, following the serious degradation of the environment caused by these desperate money seekers, in the guise of being hardworking and self-reliant. It is high time Niger State and federal government to frontally and pragmatically address this growing malady and invasion on the common wealth of Nigerians by some elements at the expense of the health of the people and the environment, including revenue generation. Already the State is under siege by illegal miners who migrate in large numbers to different parts of the state to ply their criminal trade, and this could be disastrous for the people, particularly communities around those illegal mining sites.

Maritime

‘NIMASA should learn from content development fund’ W Godfrey BIVBERE

h i l e shipping operators in the maritime sector are battling with high interest rate for loans collected from banks and failed promises for assistance in that regards from the Nigerian Maritime Administration and Safety Agency (NIMASA), their counterparts in the oil and gas sector are benefiting from a scheme by the Nigerian Content Development Monitoring Board (NCDMB), to aid them to easily acquire vessels. The Nigerian Content Development Fund (NCDF model adopted by the NCDMB, according to Ernest Nwapa, its Executive Secretary, takes on about 50 percent of the interest on loans collected from Nigerian banks that charge very high interest rates. Nwapa who disclosed that the fund has risen up to about $200 million, explained that they do not only guaranty the loan taken by Nigerians in the sector who want to acquire tankers, but also take up 50 percent of the interest rate. The NCDMB boss said that the desire of the Board, is to see Nigerians involved in the lifting of the nation’s petroleum products and to this end, some operators in the sector have already taken advantage of the fund to acquire new tanker vessels. He explained that they also control the number of foreigners working in the sector by limiting it to only those with skills that are not available in the country. He noted that they provide such expatriate with identification card to enable them work in the petroleum industry in the country.

Port harbour at night

Despite the Cabotage law which restricts shipment of all cargoes within the nation’s waterways to vessels owned, crewed and built in Nigeria, foreigners are still having a field day

This he noted has worked well with the provision of identification cards to 250 such personnel. On the contrary, operators

in the shipping industry are lamenting their plight as most of their operation has been grounded owing to lack of jobs.

Any encounter with operators in the shipping subs e c t or of t he m a ri t i me industry is followed by lamentation of their plight in getting loans for acquisition of ship to enable them participate in an industry dominated by foreigners. Those who are lucky to still have one or two ships in operation, are also not spared from such lamentations, as they would readily tell you of their difficulty in getting shipment even with the Cabotage law in place in the last seven years. Despite the Cabotage law which restricts shipment of all cargoes within the nation’s

waterways to vessels owned, crewed and built in Nigeria, foreigners are still having a field day. A group of local ship owners, the Indigenous Ship Owners Association of Nigeria (ISAN), never stopped complaining about the state of their businesses that have gradually died. Following the frustration of not getting jobs, some of them resorted to making their vessels available for illegal jobs to keep them afloat, but the apex maritime regulatory body, Nigerian Maritime Administration and Safety Agency (NIMASA) which is supposed to protect them, turned away from them.

Road construction

Samuel OYADONGHA

fter waiting for over four decades to get t h e i r community linked to the rest of the country by road, the people of the coast city of Nembe in Nembe local government area of Bayelsa State a week ago, had cause to celebrate when the state Deputy Governor, Rear Admiral John Jonah made history as the first public office holder to visit the ancient kingdom in a four wheel vehicle. The trip marked an important milestone in the construction of the key highway in the Niger Delta. The Nembe Kingdom alone, which produces over two hundred thousand (200,000) barrels of oil per day, is not linked to any part of the country by road; a development that had forced the natives to stage series of protest over the years on the noticeable neglect of their area by the federal government.

Shellâ&#x20AC;&#x2122;s Nembe city road nears completion Phase 1 of the project linking Imiringi and Ogbia, involved a 38-kilometre stretch with two major bridges and was completed in 2005, funded solely by the SPDC Joint Venture. Phase 2 links Ogbia and Nembe, measuring a distance of over 27 kilometres with six bridges and more than 50 culverts across very difficult swamp terrain. Sweet Cr ude findings revealed that, the contract for the phase 2 was awarded in December 2005 and work commenced in February the following year, but has been disrupted several times by security challenges.

Phase 2 it was further learnt costs N24.4 billion of which the SPDC JV is funding 70 per cent with the Niger Delta Development Commission (NDDC) responsible for the remaining 30 per cent. However work on the road was abandoned due to lack of funding by the intervention partners, especially from the NDDC, until the administration of Governor Seriake Dickson intervened with a support funding of N3billion. The financial instrument was handed a fortnight ago to the construction company by the state government. The Bayelsa State Deputy Governor, Rear Admiral

Gboribiogha John Jonah (rtd), while on inspection tour of the Ogbia-Nembe road, drove in a four-wheel vehicle to get to Nembe City for the first time to the admiration of the people of the kingdom, who over the years have had to contend with travelling on the turbulent waters with the attendant loss of lives to boat mishaps and piratesâ&#x20AC;&#x2122; attacks. Rear Admiral Gboribiogha John Jonah (rtd), had attributed the feat to the sincere commitment of Governor Seriake Dickson, towards delivering the project in terms of pushing the funding partners that include Shell Petroleum

Development Company and the Niger Delta Development Commission. According to him, the commitment of the state government to the completion of the OgbiaNembe road project was as a result of its proximity to Brass, the emerging business hub of Bayelsa State, which play host to the Nigerian Agip Oil Company, the Liquefied Natural Gas Project, the Nigerian Navy and other maritime activities. He urged the people of Nembe Kingdom to continue to support the Restoration Government of Governor Dickson by maintaining the existing peace in the area as there can be no meaningful development without peace.

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Community Jimitota ONOYUME

O R T H A R C O U R T: THIRTEEN years after it came into being as an interventionist agency to help tackle challenges of under development in the Niger Delta region, the Niger Delta Development Commission, NDDC is yet to meet this set goal. Managing Director of the new board, Mr Bassey DanAbia, acknowledged the task before his board when he said that staff and members of the management team of the Commission should be honest enough to admit that the commission had not met the expectation of the region. â&#x20AC;&#x153;When we convince ourselves that we have not done well, then we can take off from this pointâ&#x20AC;?, he said. For many, the Commission is a failure. And the major challenge before the new board is how to turn things around. The new board must work to win back confidence of people of the Niger Delta on the commission. In 2012 alone, the federal government approved seventy five mega projects for execution by the commission in the region. Shockingly in 2013 not up to 70 percent of the contractors that secured the jobs mobilised to site. Most of the communities where the jobs were to be executed apparently are not aware of such projects. Before the new board came on stream, the former acting Managing Director, Dr Chris Atako, had a meeting with contractors where she lamented their poor attitude to job execution. She said some of the contractors were part of the problem of the commission. According to Dr Atako, some of the contractors instead of being at their job sites chose to hang around the commission

Challenges before NDDC new board

Boardroom

doing nothing. She even threatened during the meeting that the Commission would not hesitate to engage security agencies to assist get contractors on their toes. This shows how bad the situation is. SWEETCRUDE gathered that work took off on only five out of the seventy five mega projects the federal government

approved in 2012 for the region. Contractors were largely blamed for the failure of contractors to go to site. The new board has to take a hard stand on the negative attitude of contractors if it wants to make significant impact in the region. The board should also avoid acts that could breed personality clash among its members. It would be

recalled that a board with Mr Chibuzor Ugwoha was sacked because of the foregoing problem. Some of the executive members left their lines of duty to be neck deep into p e r s o n a l i t y r i v a l r y, a development that disrupted the smooth operations of the Commission. The federal government had no other choice but to dissolve the

board when it became clear that executive members were not ready to work together. The board that came after the dissolution, could only be rated a pass mark for the harmony that existed among the executive members. They had team spirit, but did not m a ke a n y a p p r e c i a b l e impact. Most of its activities w e r e d o g g e d i n controversies. There were times contractors accused some executive members of the board of using fronts to harass them for kick backs. For some that board was another minus for the region. Expectations are already high. And the new board seem to be aware of this. This perhaps was why the MD, Mr Abia said his board was fully conscious of the expectations of the region and the nation when he addressed staff and management team of the commission in Port Harcourt.

Community

Iduwumi Community commissions N334m projects Samuel OYADONGHA

Militants

Ex-militants pledge support for NDDC board members Gabriel EWEPU

B U J A FOLLOWING the recent appointments m a d e b y President Goodluck Jonathan of new members into the board of Niger Delta Development Commission, NDDC, ex-militants in the third phase of the federal government amnesty programme had pledged their support to work with them. The National Secretary, of the ex-agitators, Comr. Tam Odogwu, who spoke with Sweetcrude in Abuja, lauded

President Jonathan for the appointments made and described members of the board as credible personalities who had distinguished themselves in their chosen fields of endeavour. Odogwu said: “We are very happy with the appointments made by President Goodluck Jonathan of persons with proven integrity, credibility and selflessness. We see in them the commitment and seriousness to change the plight of Niger Deltans through their good office. We also congratulate them for their appointment.” “These are persons who

had distinguished themselves in their various fields of endeavour and have track records of positive achievements. They were carefully scrutinised and assessed before Mr. President made their appointments after the approval of the National Assembly. “We also pledge our support to the new NDDC board members as far as they will improve the standard of ling of the people in the region. Therefore call on Niger Deltans, particularly youths in the region to cooperate with NDDC as they execute laudable projects in the region. ”We also enjoin members of

the board to come up with programmes and projects that have direct bearing with the lives of the ordinary Niger Deltan. Also should endeavour to implement all policies meant for the betterment of the region in order to actualise the aspiration of Mr. President for the region’s development.” M e a n w h i l e , Pr e s i d e n t Goodluck Jonathan had charged new members of the board to ensure the completion of ongoing projects before awarding new contracts during their swearing in ceremony.

d u w i n i Development Foundation is made up communities in Iduwini Kingdom on the Atlantic fringe in Ekeremor council area of Bayelsa State and in Delta State. Specifically, the Bayelsa State Commissioner for Energy, Barrister Francis Ikio who represented Governor Seriake Dickson was compelled to laud the leadership of the foundation for the judicious of use of fund at its disposal in executing projects that would impact positively on the people of the Iduwini kingdom. The occasion was the commissioning of twelve projects bankrolled by the Anglo-Dutch oil giant, Shell Petroleum Development Company (SPDC) and executed by the IDF worth N334m under the Global Memorandum of Understanding (GMoU). Speaking during the commissioning exercise in Ye n a g o a p e n u l t i m a t e week, the General Manager, Sustainable Development and Community Relations, SPDC, Nedo Osayande said the projects were executed by Iduwini Development Foundation in partnership with SPDC. Osayande said SPDC joint Venture has provided a total of N1.526 billion since the Iduwini Cluster Development board was inaugurated six years ago, noting that the company will stand by the clusters to deliver real and valued drive benefits to its people. He noted that the company is pleased that money meant for the clusters was judiciously utilized for the benefits of the six communities in the clusters. Osayande said the commissioned projects are income generating, while others are empowerment and skills development centres for rural women. His words, “this complex is expected to generate income for cluster and will help it to undertake more projects for the benefit of the communities.”

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