CORPORATE REPORT Windfall Engineering Projects Limited - Into a New Growth Orbit with strong performance in the oil and gas sector. A testimony to Nigeria’s resourceful talent
DILEMMA FIXING NIGERIA’S DECADES-LONG INFRASTRUCTURE DECAY HAS A NEW SONG AND FRESH DILEMMA
Nigeria’ No. 1 Development Professional Journal
The built Environment Professionalsâ€™ Leadership Series on Sustainable Infrastructure
Unlocking the Potentials of Engineering for Economic Growth Engr. Otis Oliver Anyaeji, FNSE, FAEng, President Nigerian Society of Engineers has been in the saddle and leading the largest professional body for almost two years. His achievements and activities since assumption of office has brought to the fore the importance of engineering in economic development and our national lives. CED Magazine through the ConstructSkills Conversation platform is hosting Engr. Otis Anyaeji to a breakfast conversation where he is expected to unravel the potentials of engineering to economic growth. The event will also see Engr. Otis Anyaeji, FAEng, FNSE
CED Magazineâ€™s Professional Man of the Year Award.
Engr. Otis Oliver Anyaeji, FNSE, FAEng President, Nigerian Society of Engineers
walk away with the prestigious
Date: Thursday October 15, 2017 Venue: NAF Center, Central Business District, Abuja Time: 9am For Details and Seat Reservation Contact: Festus Oseji - 081 370 9831; 0805 976 4839 E-mail:firstname.lastname@example.org; email@example.com www.cedmagazineng.com
PROFESSIONAL INTERVIEW GOOD PLANNING APPROACH Tpl. Adekunle Salami, FNITP Chairman, Lagos State Chapter of NITP speaks on the institute and the contributions of paste leaders and the place of Lagos State in good planning practice in Nigeria
ConstructSkills Conversation 2.7
effective communication to include; information, consultation involvement, mainstreaming begins with the c o l l a b o r a t i o n a n d government and its inclusion in empowerment. He also pointed Infrastructure delivery would out that communication for ensure that policy makers, project diverse audiences must be taken designers and other stakeholders wear the "others" shoes. into account. On his part, Mr. Vince Earlier, the convener of the Onyejeli, Associate Director, initiative, Dr. Olajumoke Akiode, KPMG Nigeria & West Africa, who spoke on Gender and Social who spoke on "Traditional and Inclusion (GESI) in PPIP Procurement Models: Infrastructure Delivery, emphasised that gender "The best method of ensuring the free and social inclusion was flow of execution of projects should be a collaborative and utilised in order to attract FDI. And the inclusive means of second option is to de-risk the country; infrastructure delivery whereby foreign reserves can serve as that caters to the guarantee for PPP projects." concerns and needs of all stakeholders- men, women, the disabled, and other Adaptive and Social Challenges", vulnerable groups. A 360 degree stated that PPP encompasses the way of thinking that leads to participation and collaboration better practice and outcomes of all key players in the society. should foster inclusion and He said funding is a critical issue empowerment of women and which needs to be addressed in its entirety. He also emphasized that other vulnerable groups. Infrastructure delivery is social challenges responsible for essentially about the people, their infrastructure deficit include concerns, issues and needs varied interests that defeat the should be incorporated into the purpose of PPP projects by project design. It is essential that making them more expensive Policy makers, financiers and than traditional procurement, project designers become GESI political interference, improper management of stakeholders aware" Akiode said. both those who will be impacted She added that GESI negatively or positively and those www.cedmagazineng.com April2017 2017 50 || www.cedmagazineng.com August
who will benefit from the projects "Weak legal framework is also a problem. For instance, we have an Environmental Impact Assessment (EIA) which does not include the social sides. The existing laws do not put organisations under any obligation to attend to the social impact assessment of projects. The way forward is to adopt the social side of EIA, SEIA." Onyejei stated. Speaking on "Capital projects financing alternatives and risk manag ement, Mr. Biodun Otunola, MD/CEO Planet Projects Ltd, said it is essential to look inward and develop a PPP model that can be workable for the Nigerian economy. Otunola emphasised that moneys recovered from massive debt can be used to develop infrastructure. "The best method of ensuring the free flow of execution of projects should be utilised in order to attract FDI. And the second option is to de-risk the countr y; whereby foreign reserves can serve as guarantee for PPP projects." he said. Mr. Anayo Nwosu, AGM Corporate Banking, Keystone Bank emphasised the necessity of feasibility studies in determining bankable PPP projects. He identified the steps involved as follows- Project overview, economic feasibility, political and total viability. With the trend of the various discussions and the relevant pointers to the importance of PPP to social and economic development, it will do the country a lot of good during this recession for stakeholders at all levels of government to redefine their commitment to PPP to rebuild the economy.
INFRASTRUCTUREâ€™S NEW DILEMMA
OIL AND GAS REPORT
BATTLE FOR THE SUPPLIES Threat of Venezuelan oil ban pits oil boss Hamm against refiners
28 CORPORATE INTERVIEW BRINGING EXPERIENCE TO BEAR
CORPORATE INTO A NEW GROWTH ORBIT Engr. Oghale Pius Odu, is a mechanical engineer by profession and sits atop the position of the Managing Director and Chief Executive of Windfall Engineering Projects Limited, a top player in the oil and gas sector of the economy
GIONEE A1 PLUS REVIEW The battery is comfortable enough and the phone stays up for more than a day and a half, even on heavy use
Engr. Abraham Osezuah, the managing director of Empee Engineering Consultants Limited came back to the private sector after several experience from the diverse sector of the engineering industry
NEWNOTES 8 Transparency and accountability 9 Ensuring adequate gas supply 10 Searching for oil 11 Incressing the stakes in oil 11 Ending monopoly www.cedmagazineng.com August 2017 | 3
EDITORIAL Arresting infrastructure decay
ecently, the Federal Minister of Power, Works and Housing, Babatunde Fashola SAN announced that the power generation is now over 6000MW and to complement that the trnasmission is also almost the same. The Minister then went on to say that we must encourage distribution companies to distribute power efficiently. I donâ€™t understand. The report that the countryâ€™s electricity grid collapsed fourteen times this year should alarm all of us and serve as a wake-up call to governments because, most times we go from 2000MW to 5000MW and then back to 2000MW. We here thsi all the time and i think its time we rethink and re evaluate our strategies and position as we face the daunting challenge of even producing 5000MW, which incidentally was the same song the late former Governor of Ondo State and former Minister of Power and Steel then, Dr. Olusegun Agagu sang in 2002. Furthermore, the fact that the entire nation can be adversely affected by any one such incident is one more reason the calls for restructuring or true federalism should be treated as urgent. Certainly, restructuring the power sector can no longer be delayed because the National Grid approach to power management has not only serially failed, it has proved irredeemable. Fourteen times in six months or twenty-eight times per annum is an unenviable record. There are also reports of many roads and bridges collapsing around the country. Prominent among them are the Aba to Port Harcourt section of the Port Harcourt â€“ Enugu Federal Highway, an important link bridge between the South-West and NorthWest parts of the country which collapsed at Mokwa in Niger State, the Benin-AuchiOkene road; the Umuahia-Ikot Ekpene Road, among others. These important highways that have collapsed make commerce difficult around the country, especially since the railway system has not been fully resuscitated. This is chiefly responsible for the high cost of food items. The truth is, there is progressive deterioration of our national infrastructure and the lack of adequate maintenance for most of them. In spite of the billions the Federal Government has set aside for Power, Works and Housing as part of a strategy of massive investment in infrastructure to help the economy escape from recession, little impact is being made. Even before this administration, billions had been spent to revamp national power and transport infrastructure with little to show for it. It is time we asked ourselves whether a government sitting in Abuja can actually be expected to maintain facilities stretching across this vast country. Perhaps, we should really start thinking about decentralising the management of our power system, road network and other infrastructure to make it easier to maintain them. The Federal government has already taken a step in that direction by granting Lagos State the approval to re-construct the road leading to the Murtala Mohammed Airport Lagos. There is no reason why it cannot do the same with portions of the East-West Road or the Ilorin-Jebba road where one long-neglected bridge has now collapsed leaving millions of people and tonnes of foodstuff stranded. The Federal Government should hand over its roads to states to maintain, while the National power grid system should abolished to allow people at the localities generate and use their own power. Unless we give up our unfounded fears about restructuring and devolve power to the people, we may never overcome our power and infrastructural deficits. We sincerely hope the report and the series of interviews presented in this edition of CED Magazine will go a long way to stimulate new thinking on the need to take the issue of the infrastructure maintenance and management seriously while working with global partners and professionals on the new initiatives as the 2017 budget proposal, which the Presidency says is critical to transforming the infrastructure sector is been implemented.
DEVELOPMENT Festus Njuwe
ecutive Jane Omontuemhen M
pe Nwaodor Deborah Simeon Admin/Office A
residential condominium complex with the full complement of lifestyleenhancing facilities and complete communities Direction Strategy. In line with this, Lagos State Governor, Mr. Akinwunmi Ambode, recently described the ambitious Eko Atlantic City project as a clear example of successful public private partnership (PPP) to deliver infrastructure in the state. He said this during the unveiling of the 24 storey high-rise structure, Eko Pearl Tower, within Eko Atlantic City, saying the structure, in all ramifications, represented the new standard for property development in the state. The governor said his administration was embarking on many urbanisation projects, which, when completed, will deliver a Lagos that will compete favourably with all the mega city-states of the world.
arguing that most of the existing laws are outdated. Ogala said legislative decisions that prevent development and implementations should be amended in order to achieve sustainable legal framework for infrastructure delivery in Nigeria. The legal practitioner said security, law and order are key items which ensure good delivery of infrastructural projects and a holistic approach to reshaping infrastructure delivery is essential.
PPP Law As governor of Lagos State, Fashola signed two bills on the establishment of the Office of Disability Affairs 2010 and the provision of an Office of Public Private Partnership (PPP) 2011 i n t o l a w, c a l l i n g f o r a collaboration of everyone including the media in making the provisions of the new Disability Affairs law achievable. He explained that what is needed is to ensure that through constant engagement with everyone, the provisions of the new law were imbibed by all segments of the society. But a Lagos based legal practitioner, Mr. Babatunde Ogala, few weeks ago called on government to review laws relating to infrastructural development in the country,
Experts' views For Public-Private Partnership (PPP), to work for infrastructure delivery in Nigeria, experts who gathered recently in Lagos said there is urg ent need for stakeholders to prioritise the review of existing legal framework, address adaptive and social challenges. They also pointed out that effective communication and stakeholder management as well as gender and social inclusion are urgently required. These experts, including Ogala spoke at a two-day colloquium organised by the Center for Ethics and Sustainable Development (CESD), held at the University of Lagos. The theme of the forum was; 'Reshaping the Infrastructure Deliver y Landscape for
"One of the key success points of ensuring effective communication is Consensusbuilding and Stakeholder Engagement. Again, in all PPP initiatives, there must be clear and visible benefits for all stakeholders.
Sustainable Development in Nigeria. Some local and international bodies include; Australia Awards Africa, Access Bank Plc, Globacom Nigeria Limited and Keystone Bank Plc, supported the colloquium. A PPIP expert and Professor at the University of Queensland Business School, Brisbane, Australia, Neil Paulsen, said communication among all parties must be effectively carried out in order to foster easier and faster infrastructure delivery. He also emphasised the need to identify potential stakeholders and involve developmental institutions to facilitate proper delivery. "One of the key success points of ensuring effective communication is Consensusb uildin g a n d Sta keh o lder Engagement. Again, in all PPP initiatives, there must be clear and visible benefits for all stakeholders. That is why effective communication must be a two-way street in which the stakeholders must be kept abreast of information. Above all, infrastructure projects must make good sense to stakeholders," Prof. Paulsen said. While emphasising the importance of feedback mechanisms, the university don singled out tools which provide
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PPPâ€™s to the rescue With the infrastructure deficit hampering business growth in Nigeria, their is the need for governments at all levels to key into public private partnerships to rebuild the economy
he forms public-private partnerships (PPP) in strengthen the economy. Recently in Abuja, the minister developing countries have taken are legion, ranging reiterated the importance of synergy between the federal from the construction of physical infrastructure, to public government and the private administration, to the provision sector in the built industry in the of health and social services. A provision of mass housing to Nigerians. He said the federal frequently quoted example of government must find a way to the latter is foreign-owned exploit the Private Sector companies' partnership with the participation in the industry South African government to especially in the area of local provide treatment of H I V / A I D S. ) P P P s h a v e content manufacturing of provided a principal vehicle for building materials, noting that it foreign direct investment (FDI) would help reduce prices of the i n t o p u b l i c u t i l i t i e s a n d materials and subsequently the infrastructure in developing cost of the houses. He made this known during an countries, with OECD-based mu l t i n a t i o n a l e n t e r p r i s e s inspection visit to some selected participating in most of the s i t e s a n d p o l y s t e r e n e manufacturing company in largest PPPs in this area. Abuja. He said the visit was a Over the years, the World follow up to the claims by some Bank Group has provided support to low and middle sponsors in the built industry income countries in order to develop Over the years, the World Bank Group p u b l i c - p r i v a t e has provided support to low and middle partnerships (PPPs) income countries in order to develop through a number of public-private partnerships (PPPs) different tools and through a number of different tools m e c h a n i s m s . I n and mechanisms. addition to the PPPIRC, the World Bank Group also during the Affordable Housing supports a number of knowledge management tools in Summit held in Abuja earlier in c o l l a b o r a t i o n w i t h o t h e r the year that they had all the machineries to partner with the development partners. In the last few months, many federal government in delivering experts in Nigeria, including the affordable mass housing to Minister for Power, Works and Nigerians. Also, in continuation of the Housing, Mr. Babatunde Fashola Lagos State Government's and Lagos State Governor, c o m m i tment to urban Akinwumi Ambode, have been advocating the need for effective development and expansion of Public-Private Partnership business opportunities in the (PPP), to rebuild Nigeria and state, the state recently expressed 48 || www.cedmagazineng.com www.cedmagazineng.com August April 2017
its intention to partner with suitable entities on a PublicPrivate Partnership basis to undertake the development and delivery of a wide range of facilities in the State. The facilities include residential apartments, shopping/business malls, Recreation parks, Hotels, Theme Parks, Zoos, Car Parks and other facilities that will add to a Modern City Lifestyle. In a statement signed on by the State Commissioner for Information and Strategy, Mr. Steve Ayorinde, the State Government has conceived the idea in order to provide Lagos with world-class residential, business, recreational and other facilities that will measure up to what is obtainable in other mega cities of the world. He added that the initiatives would also help in positioning the State as one of the best cities to live and work in the African continent. The commissioner disclosed that the facilities include former Falomo Shopping Complex, which the state government is seeking proposal under PPP on how the site could be redeveloped into a world-class
Strengthening position Lafarge to merge Nigerian units to simplify ownership structure
afarge Africa is consolidating its businesses on the continent to simplify its ownership structure and operations, its head of strategy told Reuters on Monday. Wole Adeleke said the decision was made three years ago after Lafarge combined its Nigerian business with its South African operations and listed the combined entity, which it renamed Lafarge Africa, on the Lagos stock exchange. Now it's seeking approval from the Securities and Exchange Commission to merge the operations of two other wholly-owned units, in a move engineered to consolidate management of the companies with no operational savings, Adeleke said. In a notice to the stock exchange, Lafarge Africa said its board has asked the company to "undertake a business combination with United Cement Company of Nigeria Limited (Unicem) and Atlas Cement Company Limited (Atlas)." "We needed to simply the ownership structure of Unicem. Because Unicem
has some significant tax attributes it was decided that Unicem should be merged into Lafarge Africa," he told Reuters by phone. Unicem is the third largest cement plant in Nigeria. Lafarge has been consolidating its businesses in Africa to cut costs and accelerate growth, particularly with arch-rival Dangote Cement, owned by Africa's richest man Aliko Dangote, expanding ag g ressively on the continent. Last month Holcim Nigeria, now part of Lafarge Africa, said it will pass a resolution in August to dissolve the company after its Swiss-based parent
In a notice to the stock exchange, Lafarge Africa said its board has asked the company to "undertake a business combination with United Cement Company of Nigeria Limited (Unicem) and Atlas Cement Company Limited (Atlas)."
firm merged with French rival Lafarge in 2015. It also delisted Lagos-listed Ashaka Cement after a buyout of minorities that breached the stock exchange's free float requirement, Adeleke said. The Nigerian-based business of F r a n c o - S w i s s c e m e n t g r o u p, LafargeHolcim, expects to generate cost saving synergies of 9 billion naira by 2018 in Nigeria, it has said, following the global merger two years ago. Shares in Lafarge Africa gained 1.69% on Monday, adding to a 44% rise so far this year, valuing the cement firm at 329.2 billion naira ($902.3 million). LafargeHolcim Chairman Beat Hess has said the company was still adjusting its structures in big markets where both Lafarge and Holcim were present following the merger. Lafarge Africa is raising 140 billion naira in fresh equity and plans to convert some loans into shares as part of a planned rights issue after it reported losses last year. LafargeHolcim has said it will take part in a capital increase of the Nigerian unit to avoid diluting its nearly 71.4% stake, in a move which would also help simplify the ownership structure in Nigeria. www.cedmagazineng.com August y 2017 | 5
Leaving for good!
Uganda, Tanzania start work on construction of $3.5bn oil pipeline
Holcim to wind up Nigerian company next month
he leaders of Tanzania and Uganda laid a foundation stone recently for the construction of a $3.55-billion-crude export pipeline that would pump Ugandan oil for international markets. The 1 445 km-project - set for completion by 2020 - will stretch from landlocked Uganda's western region, where crude reserves were discovered in 2006, to Tanzania's Indian Ocean seaport of Tanga. The project will become "the longest electrically heated crude oil pipeline in the world," said Guy Maurice, Senior Vice President of Africa at Total Exploration and Production. Total is one of the owners of Ugandan oilfields, alongside China's Cnooc and Britain's Tullow Oil. Tanzanian President John Magufuli, flanked by his Ugandan counterpart Yoweri Museveni, urged the three joint ve n t u r e p a r t n e r s t o s p e e d u p construction of the pipeline.
"We don't need to delay the completion of the project for almost three years. They can do it even night and day to ensure the project is completed as quickly as possible," Magufuli said. "Act with big speed and make sure you finish this projectbefore 2020." Uganda estimates overall crude reserves at 6.5-billion barrels, while recoverable reserves are seen at between 1.4-billion and 1.7-billion barrels. Kampala said it picked Tanzania over its other neighbour Kenya as the route for the proposed 24-inch export pipeline because it was a "least cost and least risky" option. "Tanzania offered several concessions to make the pipeline profitable in spite of the falling global crude oil prices," said Museveni. Tanzania agreed to waive taxes, offered to take up shares in the pipeline project and charge a tariff of $12.2 per barrel to make the project feasible, he said.
Landing in Zambia Britain's Tullow launches oil, gas exploration in Zambia
ritish company Tullow Oil on Friday started exploring for oil and gas in Zambia, Africa's No.2 copper producer, as the country pushes to diversify its economy and reduce its reliance on the industrial metal. Copper mining earns Zambia more than 70% of its foreign exchange but the southern African state has been trying to move into other commodities to insulate itself from price shocks. Zambia does not produce oil, but the government says soil samples sent to European laboratories have shown good traces of crude. Tullow Executive Vice President Ian Cloke said in a speech during the launch in northern Zambia that exploration would take between two and ten years, development three to ten years and production 20-50 years. "We are exploring over a large area that includes Nor ther n and Luapula 6 | www.cedmagazineng.com August 2017
provinces," Cloke said, referring to regions in the north of Zambia. "With Tullow's exploration credentials, I can confidently say that if there is any oil to be found in this area of Zambia, Tullow will find it." Zambian President Edgar Lungu said at the ceremony that he was eager to receive the findings of the survey and would closely monitor the exploration work. "Our economy has been dependent on copper and vulnerable to shocks in global copper prices, which lie beyond our control," Lungu said.
olcim Nigeria plans to pass a resolution next month to dissolve the company after its Swiss-based parent firm merged with French rival Lafarge two years ago, the cementmaker said recently. Holcim Nigeria is now part of Lafarge Africa following a megamerger in 2015 to create the world's biggest cem entmaker LafargeHolcim. LafargeHolcim chairperson Beat Hess has said the company was still adjusting its structures in big markets where both Lafarge and Holcim are present following the merger. The cement maker said it will present the final accounts of Holcim Nigeria as part of the voluntary winding up process at a meeting of shareholders on Aug. 21. Lafarge Africa expects to generate cost saving synergies of 9-billion naira ($46 million) by 2018 in Nigeria, following the merger, it has said. The Nigeria-based business of the Franco-Swiss cementgroup is in the market to raise 140-billion naira in fresh equity and convert some loans into shares as part of a planned rights issue after it reported losses last year. LafargeHolcim has said it will take part in a capital increase of the Nigerian unit to avoid diluting its nearly 73% stake, in a move which would also help simplify the ownership structure in Nigeria.
Power Plant at Ikot Nyong, near Calabar, also built by Marubeni Engineering; the 451MW-capacity Sapele II Power Plant built also by Marubeni in Ogorode, Sapele in Delta State; and the 434MW capacity Geregu II Power Station in Ajaokuta, Kogi State built by Siemens Nigeria Limited. Others are the 676MW-capacity O l o r u n s o g o I I Powe r P l a n t i n Olorunsogo in Ogun State built by SEPCO III Electric Power Construction Corporation of China; and the 451MWcapacity Omotosho II Power Plant, built by China Machinery Engineering Corporation (CMEC) in Okitipupa Local Government Area of Ondo State. The remaining two completed power stations, which were all built by Rockson Engineering include: 961MW-capacity Alaoji Power Plant in Abia State; and the 225MW-capacity Gbarain Power Plant in Gbarain Ubie, Bayelsa State. The two uncompleted power stations, which are also being constructed by Rockson Engineering, are the 338MWcapacity Egbema Power Plant located near Owerri in Imo State and the 225MWcapacity Omoku II Power Plant located near Port Harcourt in Rivers State. It was also revealed that Rockson Engineering completed only four units of the gas turbines in Alaoji Power Plant, and is yet to complete the remaining two units of the steam turbines. It was learnt that as a combined cycle power plant that uses both gas and steam, when gas is fed into the four gas turbines to generate electricity, two of the four units of the gas turbines will automatically heat one steam turbine each to generate the steam that will heat the turbines for power generation. Jonathan officially inaugurated Geregu II, Olorunsogo II, Omotosho II and Alaoji Power Plants. The inauguration of Calabar, Sapele II, Ihovbor and Gbarain Power Stations were stalled as the approaching 2015 general election did not allow the former president to perform the opening after the Niger Delta Power Holding Company (NDPHC) Limited, owners of NIPP projects, had fixed tentative dates for the events. However, despite the completion of the eight power stations and the associated gas pipelines, inadequate gas supply has grounded the operations of the new
Engr. Otis Anyaeji, FAEng, FNSE
plants. Meanwhile, Gbarain Power Plant, which is the only NIPP plant that is not supposed to have gas supply issues because of the nearby Shell's GbarainUbie Integrated Oil and Gas Project, is generating zero megawatt out of its 225MW capacity to the national grid. Investigations further revealed that while Alaoji and Sapele also generate zero most of the times, Omotosho, Geregu, Olorunsogo, and Ihovbor contribute only one-quarter of their capacities to the National Grid as a result of the gas shortages. All the 10 power plants were accompanied with gas pipeline projects from the Escravos-Lagos Pipeline System and the gas fields at Addax Petroleum's Adanga offshore facility, Egbema, Izonbe, Shell's Gbarain-Ubie, Oredo and Oben to each power plant. It was learnt that Olorunsogo II was designed to take its gas from Itoki area of Ogun State at the end of Oben-Itoki gas pipeline in the Escravos-Lagos Pipeline System. The $1 billion West African Gas Pipeline that transports Nigerian gas to the Republic of Benin, Togo and Ghana for power generation also starts from Itoki and goes through Agido near Badagry in Lagos, passing through 33 Nigerian communities and thereafter goes offshore. The Nigerian Gas Company (NGC), it was learnt, has also built a new gas pressure reduction and metering system (GPRMS) in Olorunsogo because the old one built for the defunct PHCN-owned
Olorunsogo Power Plant I could not supply the additional gas for the new NIPP plant. But despite the completion of these gas supply projects, there is insufficient gas to feed both Olorunsogo I and II power plants. Meanwhile, for the NIPP's Omotosho Power Plant II, gas feed is also from the Escravos -Lagos Pipeline System, while the GPRMS built for Omotosho Power Plant I is expected to also cater for the additional gas requirements of Omotosho Power Plant II. However, the status of the contract for the modifications of separate metering trains for the gas sale lines for the two power stations, which was being executed by Messrs GC Parsons Limited could not ascertain. But NDPHC, spokesman Mr. Yakubu Lawal, confirmed that all the gas pipeline projects for the supply of gas to the eight completed NIPP power plants, which were under NDPHC had been completed. He explained: "Our own is to build the power plants. We have also built all the pipelines to enable them take the gas to the completed power stations. But our mandate is not to provide the gas. So, gas is a factor and transmission challenge is also there. According to Lawal, "If a power plant has four units available and there is gas, it is only the TCN (Transmission Company of Nigeria) that can guarantee what the plant can generate. If the TCN can only take power from two units, the plant can only generate from two units because if TCN takes from all the four units, the system will collapse." Engr. Anyaeji also confirmed that eight power stations and several transmission and distribution projects had been completed under the NIPP but added that the contractors are still being owed and the need to pay them should be of great concern to the federal government. "Our own scope is design and management consultancy. We started in 2005 and got our completion certificate in 2014. Many other projects have also been completed. Only Omoku and Egbema Power Plants are ongoing. But of course, they still owe us some money. So, the contractors still meet from time to time," he explained. ThisDya, Agency report www.cedmagazineng.com August 2017 | 47
POWER Contact: Tel: 234 805 5243 516 E-mail:firstname.lastname@example.org www.insidebusinessafricang.com
Nigeriaâ€™s unabated power challenge Gas Shortage Grounds NIPP Power Stations
he operations of eight brand new power stations built under the National Integrated Power Project (NIPP) which was started by the former prsident, Olusegun Obasanj and completed by the administration of former President Goodluck Jonathan to supply 4,201 megawatts of electricity have been grounded by inadequate supply of gas to fire their turbines for power generation, investigations have revealed. Also, the President of the Nigerian Society of Engineers (NSE), Engr. Otis Anyaeji who is also the Chairman of the contractors handling the NIPP projects under the aegis of Electric Power Foundation, confirmed that the contractors, some of whom obtained their completion certificates in 2014, were still being owed by the three tiers of government. The spokesman of the Niger Delta Power Holding Company
(NDPHC), Mr. Yakubu Lawal, while reacting to the contractors claim denied that the contractors were being owed for completed projects, stressing that it was the electricity market operators that were indebted to the company to the tune of over N125 billion for the power generated from the completed power stations. He said the contractors that executed the completed projects had been paid, while the foreign ones such as Siemens, Marubeni and the Chinese contractors have returned to their home countries. Lawal clarified that the local contractors being owed are for new distribution and transmission projects, as well as ongoing power projects. NIPP is funded from the Excess Crude Oil Account that belongs to the federal, state and local governments. As at the weekend, power generation still hovered below the
But chronic gas shortages have rendered the new projects idle, while the country suffers in darkness.
p r e - p r i va t i s a t i o n l e ve l s a s 3,923.40MW was the peak generation delivered to the National Grid on Saturday while 3,183.90MW was the lowest generation as a result of the gas supply constraints. It was also gathered that as at 6am Sunday, power generation to the grid was 2,979.90MW. With the massive power projects e xe c u t e d by t h e Jo n a t h a n administration to boost generation and transmission, the Niger Delta Powe r H o l d i n g C o m p a n y (NDPHC) Limited, owners of NIPP, was able to realise its major mandate of building eight out of 10 power plants and gas supply lines, in addition to several transmission and distribution projects. But chronic gas shortages have rendered the new projects idle, while the country suffers in darkness. The eight completed power plants include the 451MW capacity Ihovbor Power Plant built by Marubeni Engineering West Africa Limited in Benin, Edo State; the 561MW-capacity Calabar
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"NNPC should be sincere to tell us why they are reluctant, and if not for interest, why will you not want to have proper measuring equipment on your terminals. How much are the equipment? For me, it is upsetting."
Transparency and accountability Senator Stella Uduah, a former top player in the oil industry has called for transparency and accountability in the oil production value chain which can be made possible by metering systemWe need meters to account for oil production -Senator
en. Stella Oduah, has urged Nigeria National Petroleum Corporation (NNPC) to put adequate metering system in place to enable Nigerians to know the country's exact daily oil production. Oduah, who is the Vice Chairman, Senate Committee on Women Affairs, told Newsmen in Abuja that a metering facility would also ensure leakages in the petroleum industry were blocked. She expressed displeasure over NNPC's inability to procure the device to adequately keep inventory of oil production in the country, many decades after it commenced. According to her, it is shameful that several decades after oil was discovered in the country, it has yet to get a proper metering system. The lawmaker said, "given the fact that crude is the mainstay of the economy, it is important to get adequate metering system to ensure accountability. I think it is a problem we should be ashamed to be discussing because in my view, they are problems that NNPC with all sense of sincerity, can easily resolve." "I was employed in NNPC in 1983 and I was a member of a committee for commercialisation and reconstruction of NNPC at that time. The major issue we discussed, investigated and came up with solution to, was on how to ensure that we have adequate measurement of crude by having metering system in all the terminals." "But, why is that still an issue to be discussed several years after? How do you 8 | www.cedmagazineng.com August 2017
not provide equipment that will give you accurate measurement of your product that forms the basis of our budgeting? This is the crux of everything we do in this nation and every year, for the past 30 years and more, we are still talking about measurement as an issue." "Even if we want to mirror it against any of the oil producing nation like U.S., UAE and others, it is just a simple problem," she said. Oduah said, "NNPC should be sincere to tell us why they are reluctant, and if not for interest, why will you not want to have proper measuring equipment on your terminals. How much are the equipment? For me, it is upsetting." She explained that the equipment would enable Nigerians to know the flow of crude, "the quantity being exported, from which pipeline, where it is being loaded to and the volume loaded''. She added that the equipment would help to determine the back-up stock as well as challenges to be attended to, including the switching off of pipelines in the event of vandalism. The legislator said that everything about tracking daily oil production could be done in NNPC offices by its officials, but that "they have to put in the equipment; they have to have the ICT. "You cannot blindly stay there and wait for the operators to give you feedback. We do not know what we have because the NNPC and the DPR do not know." On whether passage and assent to the Petroleum Industry Bill (PIB) will tackle
the problem, she said that it would go a long way in finding lasting solution not only to the metering problem, but for other challenges. On the role of the National Assembly in ensuring that the right equipment are put in place, Oduah said that several reports that emanated from the assembly on the matter, indicted the NNPC. She, however, assured that the 8th Senate would not rest until the right thing was done. She called on the Federal Government to put the refineries in proper shape for adequate production of finished products in the country. The lawmaker said that Nigeria had all it took to do turnaround maintenance for the refineries while getting value for money rather than exporting crude at cheap rate and importing finished product at exorbitant price. "We do not get value for money. Nobody does what we do. If we put money together and do turnaround maintenance for the refineries, it will help all of us, and that is what we ought to do. The NNPC knows that what they are doing is wrong. We have equipment, we have an experienced workforce. "In the 80s and 90s, the refineries were working. If one refinery is shut down, the others will be working, but now nobody thinks about rehabilitating those refineries. What are you going to do with all the experience that these people have acquired? We were told then, that we had the best refinery technicians, the best refinery engineers," she said. On calls by some experts for establishment of modern refineries with better capacities, Oduah said while that was necessary, old ones should be put to use while plans were on for the new ones.
Bokeh effect. On the front is a 20megapixels selfie-camera with f/2.0 aperture, and selfie flash. The camera clicks good pictures with ‘Night mode’ on in the dark though there is Battery Gionee A1 Plus is backed by a 4550mAh non-removable battery which comes with company’s ultrafast technology that charges the handset in less than 2 hours from zero to full. With this device, you don’t need to worry about battery running out. The battery won’t disappoint you and will easily last for more than a day and half. It also supports Reverse charging, which means you can turn your device into a power bank and charge other devices from it. Verdict Given the features, the phone turns out to be a bit costly. The design is simple generic as was with its brother A1. The battery is comfortable enough and the phone stays up for more than a day and a half, even on heavy use. The device is a bit bulky and not suitable to be used singlehandedly. If you are a layman and don’t like to buy smartphones online, then Gionee A1 Plus is a good choice. In the settings menu you will find an extra column named 'Features' which only includes tutorials of 'Features 'which Gionee thinks is the 'USP' of this smartphone like Fingerprint sensor, Power manager, BokehSelfie, and Virus detection among others. A1 Plus is powered by a 2.5Ghz MediaTek Helio P25 Octa-core processor coupled with 4GB RAM. It has 64GB internal storage which is expandable up to 256GB through a hybrid dual-SIM configuration where second SIM slot doubles as MicroSD card holder. It delivers a smooth experience and merely lags while multitasking.
Nigeria’s Construction Industry Hall of Fame 2017 Date: Friday September 15, 2017 Venue: Sheraton Hotels, Ikeja, Lagos Theme: Local Content and the Economy: Building Capacity for Growth
Nomination is Now Open Send your nomination to the following contact: E-mail: email@example.com; firstname.lastname@example.org Mobile: 234 805 524 3516 Call: 234 805 976 4839 www.cedmagazineng.com www.cedmagazineng.com August , 2017 | 45
Supporting the practice FG Seeks Support of Maritime Lawyers
Ensuring adequate gas supply Group Managing Director of state owned oil company lNNPC, Mr. Maikanti Baru says the agency will complete 1,400km gas pipeline before year end
Gionee A1 Plus Review The battery is comfortable enough and the phone stays up for more than a day and a half, even on heavy use
rying to break into the league of top five Chinese smartphone maker, Gionee has launched its latest offering A1 Plus in India. Priced at Rs 26,999, the phone was able to clock around 74,000 pre-orders worth Rs 150 crore in 10 days, as claimed by the company. The company is ready to take a head-to-head competition with other offline players as the device is available only on offline channels. It is currently offered in mocha gold and black colours. Gionee A1 Plus is the bigger version of its sibling A1 which was launched in March 2017. Both A1 and A1 Plus were featured at Mobile World Congress in February 2017. But why did Gionee wait so long to introduce the A1 Plus in India? Gionee waited to see its competitors coming up with new technology. The device competes with the likes of Honor 8 Pro, OnePlus 3T, Samsung Galaxy C7 Pro, and Moto Z2 Play among others. Display and Design Gionee A1 Plus features a 6-inch full-HD (1920x1080) IPS LCD display which 44 | www.cedmagazineng.com August 2017
delivers a very good picture quality. It is fairly sharp and bright and works perfectly in the sunlight. The display is made for multimedia consumption and you can spend a good time watching videos on this device. You will get Corning Gorilla Glass 3 protection with the display to prevent scratches. The handset has a home button at the bezel of the handset which also doubles as a fingerprint sensor. Gionee claims that the device is unlocked by fingerprint sensor in 0.2 seconds which sometimes don't work accurately; in fact, it didn't work several times and instead displayed the 'draw a pattern to unlock the device'. There is nothing unique to the device's design features as it looks similar to Gionee A1. A1 Plus is positioned by Gionee on the same lines as A1 and features a larger display, bigger battery, a dual-camera setup and more weight than its predecessor. Gionee A1 Plus measures 166.4x83.3x9.1mm and weighs 226 grams. The device is pretty heavy and not suitable for single handed functionality.
Software and Performance Gionee A1 Plus runs on company's Amigo 4 OS based on Android 7.0 Nougat which will annoy you. Some notifications are hidden inside the notification shade and you will have to tap one more time to open it. The Amigo UI on the device is smooth but doesn't make it look premium. In the settings menu you will find an extra column named 'Features' which only includes tutorials of 'Features 'which Gionee thinks is the 'USP' of this smartphone like Fingerprint sensor, Power manager, Bokeh-Selfie, and Virus detection among others. A1 Plus is powered by a 2.5Ghz MediaTek Helio P25 Octa-core processor coupled with 4GB RAM. It has 64GB internal storage which is expandable up to 256GB through a hybrid dual-SIM configuration where second SIM slot doubles as MicroSD card holder. It delivers a smooth experience and merely lags while multitasking. Camera A1 Plus is Gionee’s first smartphone to sport a dual-camera setup. The rear camera has 13-megapixels and 5megapixels sensors with LED flash. The camera shoots with Portrait mode, Timelapse, Night mode, Face beauty mode and
he Nigerian National Petroleum Corporation (NNPC) said it would complete the 1400 kilometre gas pipeline before the end of 2017. Group Managing Director of NNPC, Mr. Maikanti Baru, said the move is a fallout of the recent drive by the Ministry of Petroleum Resources and NNPC to create an enabling environment for growth of the domestic gas market. "So far, over 1000km of major gas p i p e l i n e s h a ve b e e n l a i d a n d commissioned, an additional 470km is currently under construction phase while a further 1400km is intended for construction before the end of 2017," he said. The NNPC GMD explained that along with the development of physical infrastructure, commercial frameworks are being put in place to support the growth of the domestic gas market, adding that progress has also been made in the reduction of flared gas volumes from a peak of 2.5 billion standard cubic feet a day scf/d a couple of years ago to about a current volume of 700 MMscf/d. Baru assured that he envisages a near zero flare in the not too distant future as adequate infrastructure and frameworks are being put in place, stressing that government's intentions to develop the gas market will be made clear to prospective investors. Based on a projected domestic gas supply deficit of three billion scfd, he said NNPC identified seven critical gas development projects, which can be
delivered in the short and medium-term to bridge the impending gas supply shortfall. "I held a stakeholder forum with the seven project owners in Abuja on May 9, 2017, where I made it clear that funding for the identified projects will not be an impediment to their successful completion. In the event that JVs or NPDC as the case may be fail to raise the required funds, opportunities may be extended to third party investors to help finance the projects. Commitments received from various stakeholders who attended the event were quite impressive with target delivery date for these projects being Q4, 2020," he assured. The NNPC boss disclosed that shortly after coming on board as the Group Managing Director of NNPC in 2016, the management team successfully rolled out its vision for the corporation tagged 12 Business Focus Areas (BUFA), which is aimed at "moving NNPC forward…together." Under the vision, he said NNPC has already implemented a number of policies that will place the corporation on the path of growth and profitability. However, NNPC as it is now is a wholly owned Federal Government entity and as such subscribes to the g over nment's perspective of profitability. As a government, strategic projects can be viewed as investments for future profit and dividends for the country.
he Federal Government has urged maritime lawyers in the country to assist the government in tackling corruption by discouraging maritime industry practices which undermine the economy of the country. The Attorney General of the Federation (AGF), Abubakar Malami SAN, made these remarks on the occasion of a courtesy visit by Executive Committee members of the Nigerian Maritime Law Association to his office last Thursday. The Attorney General expressed delight that the efforts of the association towards development of maritime laws and policy are in line with the government’s thinking, and expressed the hope that the mutual efforts will propel industry development. He called on members of the association to make proposals to government that will solve some of the primary problems government is facing including revenue generation in the maritime industry, noting that the government is keen to partner with credible bodies like the association towards growing the industry. Earlier in his remarks the President of the association, Mr. Chidi Ilogu SAN, called on the Attorney General to take advantage of the expertise of members in developing relevant maritime legislation and guiding government in policy formulation for the maritime industry. He highlighted the importance of the association in ratification of international maritime conventions, given its role as the Nigerian branch of the Comite Maritime International (CMI). The Honourary Secretary Mr. Emeka Akabogu thanked the Attorney General for his commitment to the group’s ideals, and used the occasion to invite the Attorney General to be part of the association’s Annual General Meeting and Lecture scheduled to take place from 9th to 12 of November in Uyo. The Nigerian Maritime Law Association is the umbrella association of maritime law practitioners in the country, and is the Nigerian branch of the Comite Maritime International (CMI). www.cedmagazineng.com August 2017 | 9
In association with Strategy + Business
The oil found in commercial quantity in neighbouring Chad Republic had encouraged the NNPC, on the orders of President Muhammadu Buhari, to intensify and focus its exploratory work in the inland basin on the Chad Basin and Benue Trough areas.
Searching for oil The recent kidnaped of oil workers by the Boko Haram sect in Maiduguri during oil exploration has put the search for the commodity in the Nigeria's inland basins area in an uncertain future
he recent ambush on oil exploration team in the North-East Nigeria by Boko Haram has put a damper on the nation's drive to tap its highly underexplored inland basins, industry experts have said. In july 2017, the Frontier Exploration Services/Surface Geochemistry Sampling team comprising the Nigerian National Petroleum Corporation, consultants from the University of Maiduguri, consultants attached to the Integrated Data Services Limited, a subsidiary of the NNPC and civilian escort team, was attacked by the terrorist group. The attack, which led to the killing of at least 48 people, came one year after President Muhammadu Buhari directed the nnpc to resume exploration activities in the inland basins, especially the Chad Basin and the Kolmani River in the Benue Trough. The inland basins of Nigeria comprise the Lower Benue Trough (Anambra basin), the middle Benue trough, upper Benue trough, the south eastern sector of the Chad basin, the Mid-Niger (Bida) basin, and the Sokoto basin. Following the attack, the NNPC suspended oil exploration in the Lake Chad Basin, which is situated in part of Borno State. An energy expert and Technical Director, Drilling Services at Template Design Limited, Mr. Bala Zakka, said, "It came as a big shock and a very big disappointment. It is a big blow to the military, the political governance and to the Nigerian oil industry. It has further threatened anything that has to do with oil activities in Nigeria. 10 | www.cedmagazineng.com August 2017
"Before now, we were seeing threats to investments as far as Niger Delta is concerned. But it is very clear now that even if the quantity discovered in other potential basins, like the Chad Basin, is more than the quantity in the Niger Delta, the threats and the safety concerns in that area are too high and risky to any oil and gas operations in the near future." The Chairman, National PIB Committee, Petroleum and Natural Gas Senior Staff Association of Nigeria and Nigeria Union of Petroleum and Natural Gas Workers, Mr. Chika Onuegbu, said, "When we heard about the story, we thought it was kidnap for ransom. But we were surprised to learn the people were killed. "It is really a rude shock and, honestly speaking, the government has to do something about the level of killings going on in the country. It is going to affect the oil industry; first is that workers will not be willing to go to that part of the country for any oil and gas activities, especially exploration." The Chairman, Society of Petroleum Engineers, Nigeria Council, Dr. Saka Matemilola, who commiserated with the families of the bereaved, said the exploratory activities in that part of the country would have to be put on hold until security could be guaranteed. He said the incident would significantly slow down the country's efforts to expand the frontiers of its basins where oil had been found. The immediate President, Nigerian Association of Petroleum Explorationists,
Mr. Nosa Omorodion, expressed sadness over the incident, saying the issue of security needed to be adequately addressed in the country. "The nation thought it was ready and that adequate security measures had been taken. Now, there is this setback; so we need to learn from it. What has happened is very unfortunate," he added. The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, said last week that the exploration activity in the Lake Chad basin had to be put on hold until the military could give the corporation sufficient clearance to resume oil search in the region. Providing an explanation on how the Tuesday attack happened, he stated that the NNPC Frontier Exploration Services and Surface Geochemistry Sampling crew comprising three consultants attached to the FES and the Integrated Data Services Limited, nine external consultants from the University of Maiduguri, militar y personnel and members of the Civilian Joint Task Force were ambushed by Boko Haram. He said the team was returning to Maiduguri after conducting a survey mapping/geological study of parts of the Lake Chad Basin, in preparation for reentry for seismic activities. The oil found in commercial quantity in neighbouring Chad Republic had encouraged the NNPC, on the orders of President Muhammadu Buhari, to intensify and focus its exploratory work in the inland basin on the Chad Basin and Benue Trough areas. In November 2016, the corporation resumed exploration activities in Gubio, Magumeri, Monguno, Kukawa, Abadam, Guzamala and Mobar, after getting security advice from the military.
Financing Agribusiness in Africa AfDB in $2bn project finance pact
he banks' contribution will finance projects in areas, such as agriculture, food security, renewable energy, small and medium enterprises and human development The African Development Bank (AfDB) and the Islamic Development Bank (IsDB) have signed a landmark agreement to strengthen their partnership at countr y level and jointly contribute $2-billion over the next three years to finance projects in agriculture, food security, renewable energy, small and medium-sized enterprises (SMEs), as well as human development, such as health and education. The IsDB is a multilateral development financing institution based in Jeddah, Saudi
4 | CED Magazine June 2014
Arabia. It is among the largest contributors of cofinancing to the AfDB. The two banks cofinanced projects valued at more than $2.5-billion from 2002 to 2016. The AfDB has a country presence in 21 out of the 27 common member countries with the IsDB. As part of the new agreement, the AfDB and the IsDB will also complement and use each other's staff expertise at country level. To realise the shared objective of the agreement, the AfDB and the IsDB will each contribute $1billion over the period for joint activities that focus on these priority areas and sectors. Speaking at the agreement signing ceremony earlier this month at the AfDB headquarters
in Abidjan, in CĂ´te d'Ivoire, AfDB president Akinwumi Adesina reaffirmed the bank's commitment to and interest in building a stronger partnership with the IsDB. The IsDB will also engage with the AfDB to implement the High 5s - the five priorities on which the AfDB is focusing to help accelerate Africa's economic growth and transformation. "The AfDB and the IsDB share common traits and the agreement we are signing is the highest with any development bank. We are very excited about the range of things we can do together and we are ready to work with you [the IsDB] to [progress] this movement," Adesina said. Stressing the need for job creation for women and youth, Adesina emphasised that the banks would work on a pipeline of projects in Africa.
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Schlumberger Ltd.; GE’s Baker Hughes; Hallibur ton Co., and Weatherford International Plc -- have kept a presence in Venezuela in order to work for some large, integrated oil companies, James West, an analyst at Evercore-ISI, wrote Thursday in an email. None of the companies give specifics for how many wells they are drilling or the size of their crews there. Hamm is advocating that the Trump
administration also cut off Venezuela’s access to light sweet, U.S. oil -- like the kind flowing from Texas and North Dakota, where his Continental Resources is pulling crude from the Bakken formation. Venezuela blends U.S. light oil with its heavy crude before shipping the mixture to foreign refiners. Hamm said his recommendation has been conveyed to the White House, though he did not elaborate on how. Oil companies are still reeling from their last lobbying fight -- a battle to weaken possible sanctions in legislation targeting Russia. The industry scored a partial win, when lawmakers agreed to set a threshold for Russian involvement high enough to remove the threat to some U.S. oil company projects around the world. The threat of more sector-based regional sanctions is a disturbing trend, lobbyists said.
Citgo has made overtures to the Trump administration. It contributed $500,000 in December to the incoming president’s inaugural committee, according to Federal Election Commission records. The company didn’t contribute to inaugurations in 2005, 2009 or 2013. Citgo has hired three lobbying shops, including Avenue Strategies, the firm co-founded by for mer Tr ump campaign manager Corey Lewandowski, paying it $80,000 from April to June. Lewandowski, who was not a registered lobbyist for Citgo, left Avenue Strategies in May. Two other veterans of the Trump campaign, senior adviser Barry Bennett and Arkansas state chair man Bud Cummins, represent the company. They list the potential impact of "energy and foreign policy restrictions" on its client as a specific issue, and are lobbying the Treasury Department and the White House. Neither Bennett nor Cummins returned phone calls seeking comment.
Century 21 Systems Limited 14, Shofidiya Close, Off Ilesanmi Street, Masha, Surulere, Lagos, NIGERIA Tel: 234 1 774 3404; Mobile: 234 805 5243 516; 803 305 0267 2HP 42 | www.cedmagazineng.com August l 2017
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Increasing the stake in oil
Aramco to spend $300 billion as CEO warns about world oil supply
gypt is opening the door to private participation in its natural gas sector, moving to end the state’s monopoly as it pushes ahead with reforms meant to encourage investment and revive the economy. The new law signed by President AbdelFattah El-Sisi sets up a natural gas regulatory authority charged with licensing and devising a plan to open the gas market to competition. It also allows for the eventual import of natural gas by private companies -- a move that could help end supply shortages that have hampered businesses. The measure, which had been more than two years in the making, is the government’s latest push to spur investment in an economy that has struggled to revive since the 2011 uprising against President Hosni Mubarak. Over the past year, authorities have instituted sweeping reforms, backed by the International Monetary Fund, that have included floating the currency, sharp subsidy cuts and enacting legislation aimed at drawing in sorely needed foreign money. The new legislation also advances Egypt’s objective to achieve energy self-sufficiency by 2019, largely through eventual output from the giant Zohr natural gas field. The law would allow the private sector to directly ship, transport, store, market and trade natural gas using the pipeline and network infrastructure. Its executive regulations are to be issued within six months of the legislation’s enactment, according to the Official Gazette. “This law effectively relieves the government from the burden of providing for the rapidly growing natural-gas consumption and turns it into a regulator,” said Radwa El-Swaify, head of research at Cairo-based Pharos Holding. “It’s all part of the same direction of having freer markets in Egypt.” In July, the government said it will stop subsidizing bread flour and raised household electricity prices by as much as 42%, just a week after it increased fuel prices. The move to liberalize the gas market will bring in greater transparency and flexibility, said Haitham Abdul Moneim, investor relations manager at Egypt Kuwait Holding, which partially owns and manages fertilizer producer AlexFert. “This will give us more options for sources of gas and maybe better prices,” he said.
audi Aramco, which plans what could be the world's biggest initial public offering, will invest more than $300 billion over the next decade to maintain its spare oil-production capacity and explore for more natural gas, President and CEO Amin Nasser said. The outlook for oil supplies is "increasingly worrying," with about $1 trillion in investments lost during the current industry downturn and fewer new deposits being discovered, Nasser said at a conference in Istanbul. Some estimates suggest that at least 20 MMbpd of new output is needed over the next five years to offset rising oil demand and the natural decline of developed fields, he said. "There seems to be a growing belief that the world can prematurely disengage from proven and reliable energy sources like oil and gas, on the mistaken assumption that alternatives will be rapidly deployed," Nasser said. The petroleum industry will be at the heart of global energy for years, and the transition to use of alternatives will be "long and complex,' he said. The state-run company known formally as Saudi Arabian Oil Co., the world's biggest oil exporter, boosted production to an annual record last year before the kingdom led OPEC and other global producers to curb output to counter a global glut. Aramco is also at the heart of the nation's long-term strategy to wean its economy off oil. The government plans to sell about 5% of the company in 2018 in what could be a record IPO. Misleading arguments "Financial investors are shying away from making much needed large investments in oil exploration, long-term d e ve l o p m e n t , a n d t h e r e l a t e d infrastructure," Nasser said, putting part of the blame on what he said were "misleading arguments about peak oil demand and stranded resources." The volume of conventional oil discovered around the world over the past four years, for example, is down more than 50% from the previous four
Amin H. Nasser, President and CEO, Aramco
years, he said. "Investments in smaller increments such as shale oil will just not cut it. Yet without those higher investment levels, the energy transition -- and therefore energy security -- may be fatally compromised." Aramco plans to spend $300 billion on projects over the next 10 years to maintain its spare oil production capacity, the biggest by far in OPEC, and boost exploration and production of conventional and unconventional gas, Nasser said. "Three hundred billion dollars over 10 years is a strong statement for Saudi Aramco, especially against the backdrop of the current oil environment which has strained the Saudi budget," said Will Hares, an energy analyst at Bloomberg Intelligence in London. "This may form a response to its concerns of a long-term supply deficit resulting from underinvestment in the industry since 2014." Aramco plans to double its production of gas resources to 23 Bcfgd over the coming decade, Nasser said. The forecast increase will raise the share of gas in the kingdom's utilities to about 70%, the "highest of any G20 nation," he said. Saudi Arabia is also committed to developing solar energy and other renewable sources, and the economic restructuring strategy foresees the nation's becoming "nothing less than a solar powerhouse," he said.
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OIL AND GAS REPORT
Crude's collapse has forced companies to eliminate tens of thousands of jobs, sell billions of dollars of assets and defer or cancel expansion plans. With little prospect in sight of a strong price recovery, oil bosses are keeping a tight grip on budgets.
Supremacy battle and supply chain Oil fields pumping a third of supply die fastest in 24 years
he tussle for supremacy between OPEC and U.S. shale drillers is killing off older oil fields at the fastest pace in almost a quarter century. That could hurt the industry once the current glut has faded. The three-year price slump triggered by the battle for market share choked off funds for aging deposits elsewhere, accelerating their decline. Output at older fields from China to North America -making up a third of world supply -- fell 5.7% last year, the most since 1992, according to Rystad Energy AS. It'll drop about 6% in 2017 if oil stays at current prices, the consultant said. Oil fell from above $100/bbl in 2014 to as low as $26 in 2016 as OPEC opened the taps in an effort to stem the surge in shale production. That set off the worst industry downturn in a generation, forcing cost-cutting companies to focus on higher-margin assets at the expense of older, costlier fields. While OPEC changed course last year and curbed output to boost prices, shale was the main beneficiary and resurgent U.S. output has kept crude below $50. "A lot of the focus is on OPEC and shale and not on the decline at these mature fields, where supply is struggling," said Espen Erlingsen, a partner at Oslobased Rystad. "We're starting to see the long-term impact of lower oil prices." Though new projects mean total global production continues to rise, the slide at aging fields may give OPEC a helping hand by reducing surplus supply today, according to Erlingsen. The danger for major oil companies -- many of which are gathering in Istanbul this week for the World Petroleum Congress -- is that the 12 | www.cedmagazineng.com August 2017
decline may be difficult to reverse, increasing the risk of future supply shortfalls as spending cuts take their toll for years to come. "About $1 trillion in investments has been lost in the current downturn," Saudi Aramco CEO Amin Nasser said Monday at the congress. "Conservative estimates suggest we need about 20 million additional bpd over the next five years." Fields in decline Oil deposits go through a number of phases, with production initially rising before flattening out and eventually waning as the reservoir pressure drops. About a third of global output comes from mature conventional fields -- about 30 MMbpd, or around three times Saudi Arabia's supply -- according to Erlingsen. Their fast-declining supply "is making OPEC's life a little easier," he said. Central to the trend is China, where aging fields provide about half the total production, Rystad said. Volumes from those deposits sank 9.5% last year, three times the rate of 2015. Even in the U.S., where shale has risen to prominence, about a third of output comes from fields that began pumping last century. Their supply fell 8.3% in 2016 and 11% in 2015 compared with an average 4.1% in the previous five years, Rystad data show. Decline rates are picking up because of "lower activity in the mature assets, especially in China," Erlingsen said. "This shows that the low oil prices are having an impact on production from mature fields, and that we see the non-OPEC, non-shale supply coming down." One region bucking this trend is the UK
North Sea. The area has been producing for decades, and is one of the world's costliest oil provinces, yet new fields are coming on stream as a result of investments made before the 2014 downturn. BP Plc started its Quad 204 project in May and EnQuest Plc's Kraken development began output last month. Still, the bulk of mature regions outside OPEC are on the wane. Consultant Wood Mackenzie Ltd. estimates decline rates at older fields at about 5% in 2015 and 2016, compared with "just below" 4% from 2012 to 2014. A decline this year at the pace predicted by Rystad would remove about 1.8 MMbpd from the market. That's the same volume as the voluntary cut agreed to by OPEC and its allies last year -- a significant help in the group's quest to eliminate surplus inventories. In the longer term, the implications for global supply give cause for concern. IEA Executive Director Fatih Birol has said lower spending on new production will probably result in a shortfall in the next few years. Conventional-oil project approvals dropped to a 50-year low in the past two years, Birol said in January. Crude's collapse has forced companies to eliminate tens of thousands of jobs, sell billions of dollars of assets and defer or cancel expansion plans. With little prospect in sight of a strong price recovery, oil bosses are keeping a tight grip on budgets. The IEA will release its latest assessment of energy industry investment on July 11 in Istanbul. For the time being, enough new projects are keeping oil flowing, said Patrick Gibson, research director for global oil supply at Wood Mackenzie. "The key question is how long it will take for the lack of investments to have a greater impact on global oil supply.”
The leading refining trade group, the American Fuel and Petrochemical Manufacturers, sent two letters to Trump last month warning that a blockade would destabilize crude markets, causing an increase in oil prices as refiners scramble to replace Venezuelan supplies with illfitting, higher-cost substitutes and leading to bigger gasoline bills for consumers. Sanctions may not even work as intended, as Venezuela finds other outlets for its crude beyond the U.S., said AFPM President Chet Thompson. "We think that the United States could take this action, and it won’t have the desired effect, but it will have the unintended consequences of hur ting consumers and refiners," Thompson said in an interview. "This is more than just a passing concern." "Folks have spent many billions of dollars over the last several years to really optimize around Venezuelan crude, so any disruption of it could be a really
big deal," Thompson said. Besides Venezuelan-owned Citgo Petroleum Corp., the refiners most dependent on Venezuelan crude are Valero, Phillips 66, Chevron and PBF Energy Inc. They are also the most active in lobbying against a crude import ban, according to accounts by four people familiar with the activity. Last year, Valero took in roughly 54 MMbbl from Venezuela while Phillips 66 and Chevron imported 46 MMbbl and 33 MMbbl, respectively. And while companies are already working to pare their dependence on Venezuelan crude, that is a heavier lift at some r e f i n e r i e s. Fo r i n s t a n c e , Venezuelan oil accounted for 43% of Chevron’s Pascagoula refinery’s capacity last month, according to U.S. Customs data compiled by Bloomberg. It represented 62% at Valero’s St. Charles facility. Refiners have made direct appeals to administration officials and are courting Gulf
"We think that the United States could take this action, and it won’t have the desired effect, but it will have the unintended consequences of hurting consumers and refiners,"
Coast lawmakers, asking them to amplify their concerns with the White House. Those efforts paid off Thursday when the U.S. senators from Texas and Louisiana sent a letter to Trump arguing crude sanctions would be self defeating. Sanctions targeting the oil sector would increase the likelihood of a disorderly default, hastening Russian consolidation of Venezuelan and Citgo oil assets, while diverting Venezuelan crude to China, harming the global c o m p e t i t i ve n e s s o f U. S. businesses and raising costs for consumers, they said. Asked about Chevron’s lobbying on the issue, a spokesman said the company "engages with the administration and Congress to provide our perspectives on complex energy issues to help shape an effective and responsible U.S. energy policy." Phillips 66 declined to comment. Representatives of PBF and Valero didn’t respond to requests for comment. Oilfield service providers also have been discouraging the Trump administration from imposing sanctions that limit their business in the country, including contracts with the state-owned oil company Petróleos de Venezuela SA, or PDVSA. That option had been presented by some refiners as an alternative to throttling down Venezuelan crude imports. Excluding U.S. companies from working in Venezuela doesn’t help further democracy there, the oilfield service firms argue; instead, it blocks their ability to recoup debt and gives competitors a chance to gain a foothold in the market. The world’s four biggest oil service providers --
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OIL AND GAS REPORT
He also praised the cooperative for coming out with the house types. Guest lecturer and Managing Director of Realty Point Limited, Mr. Debo Adejana referred to real estate investment as a gold mine. However, Nigerians are not benefiting from it because of lack of interest.
Battle for supplies Threat of Venezuelan oil ban pits oil boss Hamm against refiners
he prospect of a U.S. blockade of crude oil imports from Venezuela has ignited fierce lobbying in Washington pitting domestic energy producers such as oil tycoon Harold Hamm, who favor a get-tough approach, against refiners that depend on those supplies. Hamm said hitting Venezuelan President Nicolas Maduro where it counts would deter the socialist leader’s moves to undermine democracy and consolidate power. In an interview, the Continental Resources, Inc. chief executive officer urged President Donald Trump to block the oil, a vital source of revenue for Venezuela. "If the president wants to make an immediate impact on Venezuela to stop these human rights abuses and restore the situation, he’s got the ability to," said Hamm, speaking as head of the Domestic Energy Producers Alliance, whose members include producers, oilfield service companies and inde pendent oil and g as associations. Opposing the ban are refiners such as Chevron Corp., Phillips 66, and Valero Energy Corp., which have warned that choking off shipments of Venezuelan crude would starve refineries designed to process the country’s heavy oil, leaving them searching for alternative supplies and driving up gasoline prices. The stakes are high for both countries. Venezuela is the thirdbiggest supplier of oil imports to the U.S. -- more than 270 MMbbl 40 | www.cedmagazineng.com August 2017
Addressing the housing challenge
Harold Hamm, founder and CEO of Continental Resources
worth about $10 billion last year - and that trade is a major source of revenue for the South American country. Hamm was a vocal supporter of Trump’s presidential bid, eventually agreeing to advise him on energy policy. Trump, in turn, repeatedly lavished praise on Hamm, during campaign stops in front of industr y-heavy audiences in North Dakota and Pennsylvania. When it is unified, the oil industry is a lobbying powerhouse in Washington, leaning on allies in the top ranks of the Trump administration as well as on Capitol Hill to advance its policy priorities. Oil and gas interests rank fourth among industry lobbying, with $64 million spent through the first six months of 2017, according to the not-for-profit Center for Responsive Politics, which analyzes lobbying and campaign finance data. Refiners have been pressing their case with the Trump administration since June, as the White House considers ways to pressure Maduro and discourage
Nigeria experts want partnership with cooperatives in housing delivery
"If the president wants to make an immediate impact on Venezuela to stop these human rights abuses and restore the situation, he’s got the ability to," said Hamm
a rewrite of Venezuela’s constitution. On Wednesday, the Trump administration froze the assets of eight Venezuelans, building on previous sanctions against 13 people associated with the Maduro regime. White House officials have prepared a menu of possible additional sanctions against Venezuela but are divided over whether -- and when -- to take actions that could exacerbate the c o u n t r y ’s d e t e r i o r a t i n g humanitarian and economic situation. The progressive approach envisioned by administration officials includes blocking exports of U.S. oil to Venezuela followed by limits on oilfield service firms doing business in the country and, finally, restricting imports of Venezuelan crude to the U.S. Those restrictions could be phased in gradually. The prospect has inspired frantic appeals by companies that spent billions optimizing at least 20 different refineries to process heavy crude from the country.
eal estate experts have called on state governors and other relevant government agencies to address the Nigeria’s housing needs. They are looking to to partner with cooperative societies for the provision of affordable housing. Former publicity secretary of the Nigerian Institution of Estate Surveyors and Valuers (NIESV), Meckson Okoro led the call. This was at the
presentation of housing types f o r Pe r f e c t i o n I nve s t o r s Cooperative Society Limited. The society is an independent membership real estate club in Lagos. Okoro, chairman of the occasion said this was necessary due to lack of mortgage institutions to finance real estate. He urged people to buy into real estate and wait for it to increase in value other than waiting to buy. Meckson Okoro
Real estate investment Adejana said that areas that have developed to become city centres were once remote areas people ran away from. He advised that investments into real estate should not be delayed. This is because according to him experience had shown that assuming took away opportunities for people to either be land or house owners. According to him, Ibeju Lekki in Lagos is the fastest growing construction town in Africa today. That is due to people building in the area and it is expected that by 2020 the hub will create 50,000 jobs. Adejana explained that Ibeju Lekki had easy access because it had airport. The Free Trade Zone and seaport are some ongoing projects that will open the area rapidly CED
Contact: Tel: 234 805 5243 516 E-mail:email@example.com www.insidebusinessafricang.com www.cedmagazineng.com August 2017 | 13
NEWSNOTES mature fields. Labor doesn’t address the issue in its program, and the party’s spokesman for energy matters didn’t reply to a call seeking comment. Schjott-Pedersen was one of the most important members of Prime Minister Jens Stoltenberg’s Labor-led government, which right before being voted out in 2013 actually increased taxes for oil companies, by reducing the so-called uplift, an extra deduction for investments. “Any reduction in the uplift weakens the incentive for increased recovery from mature fields,” Schjott-Pedersen now stopping short of calling the Commissioner forsays, Environment, Dr. Babatunde Adejare 2013 move a mistake. Still, tax breaks for oil companies may not be a vote winner in Norway these Oil giants dangle $19 billion in investments for Norway tax breaks days, amid a growing debate over the role of western Europe’s biggest oil and orway’s oil industry says it has disappear after oil prices plunged in gas producing nation in fighting climate some major investments in store 2014. They could also bring in about change. Polls suggest advances for the if the government can just come 135 billion kroner in taxes, at a time Green Party, which got its first ever through with some tax incentives. when the government’s petroleum lawmaker in 2013. Many of the smaller It’s still hoping for tax breaks to revenue has dropped to the lowest this encourage recovery of oil from older century, forcing it to raid its $970 billion parties in parliament are also arguing for fields. Those failed to materialize over sovereign wealth fund for the first time. scaling back the industry while a continued ban on drilling off the shores the past four years even as the industry None of this persuaded the of the environmentally sensitive went through its worst investment Conservative-led government to offer Lofoten islands seems likely, no matter collapse in a generation. tax breaks, which said after winning who’s in power. As Norway heads into an election elections in 2013 that it would consider One argument goes that investing next month, the oil industry still has s u ch i n c e n t ive s. I n s t e a d , t h e more in oil production is tantamount to “some expectation” that whoever wins administration has insisted oil throwing money into the sea since the will consider those incentives, said Karl companies have an obligation to renewable energy revolution will likely Eirik Schjott-Pedersen, a veteran produce all profitable barrels, putting dry up demand for fossil fuels. A recent politician who leads the Norwegian Oil pressure on state-controlled Statoil poll showed the Norwegian people are and Gas Association. ASA and others to commit to pretty evenly split on whether Norway His main argument: tax breaks could investments. should leave oil in the ground. help trigger investments of about 150 “It’s unwise that they haven’t seized But the industry argues it still enjoys billion kroner ($19 billion) which might the opportunity,” Schjott-Pedersen otherwise not happen, according to a said. “But we still have a hope that the “very broad support” among the study the group commissioned in 2015. parties, regardless of who governs, will population, at least in terms of what it “Raising the recovery rate in fields see the wisdom in creating those jobs means for jobs and welfare, SchjottPedersen said. The biggest parties still would create enormous value,” Schjott- and securing that income for society.” agree to maintain stable framework Pedersen, who has served as finance The Conservative Party repeated in conditions and continue awarding new minister for Labor among other cabinet its election program that it will consider posts, said in a phone interview recently. tax measures to boost recovery, and the exploration acreage. The Conservative“It’s also critical that it’s done now, Progress Party, its government partner, led government has overseen a record given that it depends on either the fields went further saying it wants to provide push into the Arctic Barents Sea, with or the infrastructure still being in stimulus for higher production at the support of Labor. “The big lines in Norway’s oil and gas operation.” policy remain firm,” Schjott-Pedersen These projects would give a welcome “Raising the recovery rate in said. “There’s broad consensus about boost to the supplier industry, which fields would create enormous them.” has seen tens of thousands of jobs value,”
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CORPORATE transparency in bidding process, now NIPEX, well known portal for bidding in Nigeria for oil and gas industry, and then particularly for Total E&P Ltd that Windfall Engineering work for, has www.ariba.com, a website where bids are launched, you are notified about them, everybody is put at a leveled playing ground, nobody is robbed or deprived. What you need do is respond to the bid requirements, then submit before the expiration of the bid, that's all. ICT is very welcomed in the industry and it has really helped to promote transparency. Engineering is the fundamental of the oil and gas project, and one of the very co mmo n so ftwa re used i n th e engineering field is AutoCAD, Microsoft project professional, MS project, which is used for project planning that determines when you can complete the project on time line agreed. Teleconferencing has come as a useful tool whereby you can hold meetings, irrespective of distance; social media has been a very useful platform for promoting the oil and gas business, so ICT is a welcomed development, we hope that the government will actually encourage her citizens to develop their skills in this area because the market is constantly expanding. On return of Investment, the MD of Windfall said every organization that is aimed at profit making wants to recoup their investment within a short time. He said they are in the engineering and construction sector, assets acquisition is one indispensable way to recoup investment; for example, two years ago, we were elsewhere in a rented apartment, but today, we are in our own facility, building, of course this is a great savings. Also, investing in capital equipment, assets, for example, welding machine, compressors, generating power plants are in the heart of our operations. Most of these assets were bought before dollar started sky rocking; imagine how much savings we have gotten from that. Honestly speaking, return of investment is investing on valuable assets for the company and ensuring that you are constantly in the project mainstream, because the more projects you do, helps you recoup great savings. Windfall MD, Engr. Odu said financial management implies, finding the fund for 38 | www.cedmagazineng.com August 2017
We, in Windfall Engineering don't want to grow alone, it's our desire to see that more Nigerian companies participate in the oil and gas a project requires you to set a budget for w h a t e v e r y o u a r e d o i n g . We entrepreneurs are not very sincere about budget line, whether on operational basis or on project basis. He said he is actively involved in bidding and you have to be realistic. Over time, take advantage of the assets you have, when you bid, you should be able to know what your margin is, looking at all contingencies put together, and with that, you should factor in the cost of funds. It takes professionalism to get the right budget that will deliver a project, most time people run aground either they under-quoted or not professionally inclined to quote. Defining a budget is very important, funding a project, the banks are there, only these days have not been friendly with the banks, so they have to trade carefully. There was a recession globally that actually rocked the entire economy, even the well established nations, of course, our banks fell in for it. Today, the banks are much more careful, and honestly it has not been easy with us getting funds from the banks, so what do we do. There are several ways we leverage in getting fund, we have to have integrity in financial management, and by that, you need to maintain a regular supplier or team of suppliers, who can go all the way with you while you are in the project mode, and grant you some credit facility. On the long run you will discover that you actually acted to roll up the project at the backup of your supplier without really having so much liquid cash at hand, this is a strategy, which Windfall is among. We just have to go and source for money, the banks don't usually lend it, but we have to find the source. As you work, you build your reserve because projects are being funded by milestone, hopefully, you hit a milestone, your client is willing to pay, there are reputable client who you can bank on and take a bet that they pay at when due. We have to commend Total E&P Nig Limited, they are reputable, and we are proud to be associated with them, we hope that the relationship will
continue to grow as they are in business in Nigeria. We, in Windfall Engineering don't want to grow alone, it's our desire to see that more Nigerian companies participate in the oil and gas industry. Quite frankly, I'll say this, let's take a cue from the IOCs, when the oil price in the international market start nose-diving, they have to look inward, and it hit on them that some things are indispensable, can be done with, are wants or needs, so they started prioritizing, in fact, some capital projects on queue were either put on hold or completely deleted. What I am saying is that one has to be realistic in business. Every company is unique from inception to its sustenance, everybody has to look inward, it's a business that is technically demanding, so in this turbulent time, right from the management level, it calls for sacrifice. We all know when it was rossy, companies doled out benefits, allowances and all that, but in this hard time for companies in the oil and gas, all the cost work is re-adjustments of lifestyle and operational efficiency. Operational efficiency means trying to use scarce resources to achieve optimum performance, either in your daily operation or in project delivery, and that is to say there is no room for wasteful spending, and management has to be on point in taking decision that will save the company on the long run, that will also build the company assets base. At a time like this, you fall back to what you have acquired, there are many persons that run companies just as a portfolio, it does not work in this time, you need to have a structure on ground, and that is what you fall back on. Eventually at this turbulent time, clients were already slashing down project cost, how do you now cope up, how do you go to the market with a drastically reduced project cost, I mean, if you have to buy like 80% of the resources that you need, materials, equipments and all that to deliver a project then, you are out of business. One very important thing is entrepreneurs; fellow businessmen like me in the oil and gas industry should always keep an eye in building assets base, and promoting productivity among workforce, and not to employ for reasons of sentiment. That is the best I can say for now.
New LNG terminal Eni, Anadarko to build LNG terminals in Mozambique
Maintenance is key M&R says Australia maintenance contract a signal of future strategic intent
he oil and gas unit of Murray & Roberts(M&R) has been awarded a five-year contract to perform maintenance servicesat a liquid ammonia plant and a technical ammonium nitrate (TAN) plant on the Burrup Peninsula, in Western Australia. Norway's Yara International, which owns the facilities, awarded the contract to the Clough AMEC joint venture. Clough forms part of M&R's oil and gas business platform. M&R CEO Henry Laas said the contract was an example of the newly restructured group's repositioning to offer serviceacross the full project life cycle in chosen sectors and regions. M&R is currently focusing on the oil and gas, undergroundmining and power and water markets in Africa, North America, Australasia and Asia. M&R recently sold its Southern African infrastructurebusinesses to a Southern Palace-led consortium for R314-million and transferred its listing from the 'Construction and Materials' sector of the JSE to the 'General Industrials' sector. From March 20, the company has been trading under
the 'Diversified Industrials' subsector, having previously traded under the 'Heavy Construction' subsector. "The Clough AMEC's maintenance contract win is a prime example of what we are working towards achieving across the group," Laas said in a statement. Clough CEO Peter Bennett noted that the contract was Clough AMEC's first onshore p e t r o c h e m i c a l maintenancecontract in Australia and had arisen after a two-years effort to position the group for maintenance activities in the petrochemical sector. The five-year contract, with an option to extend for a further five years, covers the Yara Pilbara Ammonia Plant, which has the capacity to produce 850 000 t of liquid ammonia as well as the associated TAN plant, which in the final commissioning stages and will have a 330 000 t/y capacity. TAN is the main component in explosives used by the mining, quarrying and construction industries. Clough AMEC will perform routine maintenance services and shutdowns at the ammonia plant and the TAN plant.
TAN is the main componen t in explosives used by the mining, quarrying and constructi on industries.
Henry Laas, CEO, M & R
taly's Eni and US oil and gas firm Anadarkosigned agreements with the Mozambiquegovernment on Thursday to build two liquefied natural gas terminals in the southern African country. The terminals will be built in Cabo Delgado province, where Mozambique has made massive gas discoveries that could transform it from a poor African country into a major energysupplier to Asia. The agreements were signed by Mozambique's energyminister LetĂcia Klemens and the regional heads of Eniand Anadarko, a Texas-based oil producer. The two companies will separately build their own terminals, Klemens told a press conference. She declined to give the size of the investments. Eni is spending $8-billion to develop a gas field off the coast of Mozambique while Anadarko is developing Mozambique's first onshore LNG plant consisting of two initial LNG trains with a total capacity of 12-million tonnes per annum. More than $30-billion is expected to be invested in Mozambique's natural gas sector to build capacity to produce 20-million tonnes per year of LNG, with the first exports due to start in 2021. www.cedmagazineng.com August 2017 | 15
Fixing Nigeria's Decades-long Infrastructure Decay has a new song and fresh dilemma
cting President Prof. Yemi Osinbajo signed the well delayed 2017 appropriation bill into law almost half of the year gone. The budget, which was passed into law by the Senate was raised to N7.44 trillion from the N7.28 trillion earlier proposed by President Muhammadu Buhari in December 2016. Osinbajo stated at the signing that the budget would be implemented in line with the recently launched Economic Recovery and Growth Plan (ERGP), aimed at bolstering Nigeria's ailing economy. He emphatically stated that the 2017 budget "will trigger activities in the domestic economy, which will lead to job creation and more opportunities for employment, especially for our youth." Details of the budget as provided by the Minister of Budget and National Planning, Senator Udoma Udo Udoma, showed statutory transfers of N434.41 billion; debt service of N1.66 trillion; sinking fund of N177.46 billion to retire certain maturing bonds; non-debt recurrent expenditure of N2.99 trillion; and capital expenditure N2.36 trillion (inclusive of statutory transfers). He identified some of the major capital allocation sectors as the Power, Works and Housing Ministry, which got N553.7 billion; Transportation - N150 billion, Defence - N104.24 billion, and Interior - N151.91billion. Udoma also disclosed that N40 billion was allocated to defray the electricity debts of the ministries, department and agencies (MDAs). The 2017 Appropriation bill was predicted on a benchmark crude oil price of US$44.5 per barrel and oil production estimate of 2.2mbpd. The overall projected fiscal deficit 16 | www.cedmagazine.com August 2017
where many Nigerians have reasonable equities that are also being supported by ways of construction and maintenance services by, Nigerian companies. In the past, it used to be handled by IOC, now, you have multiple players owning each of these fields and you have construction companies attached to each, that actually, has a multiplying effect, even though the job may not come in such a large chunk as it would have been to the major player owning the field, but with this marginal field arrangement, more local companies are more active in the oil industry, and that for me is a pass mark, and we look forward to such arrangement, not just downstream, middle stream, but upstream participation. According to Engr. Odu, the regulatory standard in the engineering profession by Nigeria Society of Engineers, NSE, COREN, which he said he is a member, usually has a provision for individual, corporate membership, and the guidelines differs for each category. The fact is, each of these bodies run programmes, to fully harness the benefits, you have to be an active member in these bodies. There are also sub-groups where members are specifically categorized, and relationship roles in business exposes you to more persons, more industry players, and by that interaction, it can translate to a meaningful retur ns by way of information, even by way of entering into a business transaction for one corporate entity to the other. In summary, the regulatory bodies, has provided sufficient platform, to expose Nigerian engineers, like COREN, for trainings. Each of these bodies are affiliated to international bodies, and of course, they get up-to-date industry standards which is cascaded down by ways of seminar, so, when you participate more actively, the benefits are obvious and numerous. Engr. Odu encouraged Nigerian engineers to aspire to become members of these associations, because these bodies are enacted by law with some set-up legislation, they will be interfacing with the government to actually institute some regulations by law that give them way directly with industry, corporate entity to be able to put in some regulations. For every major project that is going on in the industry, there are registered engineers
who liaise with COREN and Nigerian Society of Engineers to make sure there is a constant feedback to promote Nigeria participation. In the administration of these professional bodies, particularly in COREN, they give you an identity member, which is your registration number as a certified engineer. Any engineering projects with your endorsement is an authority and so, any, failure of the law of the land, can take its fall on you as a defaulter. What is rampant today is collapse buildings, that is case study for the Civil Engineering practitioners. COREN has come out to say any professional found wanting will be penalized, by withdrawing his certificate, which definitely will affect the person income and all that. The regulatory bodies have monitoring units, so, any engineer to give his approval to an engineering project, so, he or she has to be thorough about it knowing the consequences of the default. The Managing Director, Engr. Pius Odu summarized the mission of Windfall Engineering as give the best of human
the mission of Windfall Engineering as give the best of human resources and technology that will earn the company a reputation of trust among their client as a reliable and dependable partner in their services delivery worldwide.
resources and technology that will earn the company a reputation of trust among their client as a reliable and dependable partner in their services delivery worldwide. We are looking global while contributing to local capacity building for national economic development and promoting social welfare. Windfall has an eye for the international market, because as a local company, we can grow our capacity to the point of International player, headquartered in Nigeria, that is the pride, and very sure that is one of the goals of Nigerian Content Development Act, building Nigeria capacity to competing globally. He also emphasized reputation and trust, that our client is second to none, and that is the goal of every business. We hold our client in a very high esteem, and what we have today is our clients are very satisfied. Then, in summary or at the bottom line of our vision, we have this part of National Economic Development and promoting social welfare, because as a company, we owe the society corporate social responsibility, Windfall believes in giving back. The Managing Director, Engr. Odu said and I quote "our goal for the future, ultimately as a company, we should be able to pile ourselves in a product or in a service that is branded made in Nigeria, nothing can be better celebrated than that, and so, we have an eye for manufacturing, but, what we do today is setting the foundation for it. He said, by our business operation today, we are armed, exposed to organization, human resources management, capital and financial management, which is a baseline to all companies, and so with this experience, we hope God helping us to have a foothold with Nig erian manufacturing set-up, which is a real part of the economy. Engr. Odu frankly spoke on infor mation and communication technology being in the nerve centre of the oil and gas industry, which brings constant change and improvement to making the business more efficient and of course more economical. Before now, tendering process used to be hard copy, now, companies by way of ICT has floated portals in their websites, were Vendors do bidding. There were issues of
www.cedmagazine.com August 2017 | 36
Normally, when we win a job, the first meeting with our client is called "kick off meeting" which is so important. It is a meeting that spells out the time line of activities for the project, it is educative on the expected delivery period, for example, for the project we are handling now, every day is critical, that you must not loose a day. Kick off meeting is a critical arrangement meeting for which you interact with your clients, then have to deliver at set time as the time line has been set-up. On the side of operation, client has ways of improving contractor relationship by instituting per annual meeting, for example, HSE, which holds twice in a year. The last one that was held in June, Windfall was handpicked to do a presentation, honestly, the 35 | www.cedmagazineng.com August 2017
INFRASTRUCTURE NEW DILEMMA management was very impressed, our representative did a good job and was quite very educative. Our relationship with our clients has been very cordial; we normally look forward to meeting our client to be able to satisfy them. T he bottom-line is satisfying our client, and that is the best way you can keep such relationship, and that is the best way to manage the relationship, nothing else than to satisfy them and client first. When it comes to industry peers, the truth is that as a businessman, you don't work in isolation, there is power in synergy and Windfall have identified their peers in the industry. Windfall Engineering is old, matured, experienced and wealthy client, whom you would like to align with in business. Actually, one time or the other, there are exchanges of favour, and then when necessary, we normally can encourage subcontracting, we are peers, it's okay, come do this job for me, probably my hands are full. Like Saipem, that is a far more bigger company, they have a long list of subcontractor, though we are not their sub-contractor, but then we have done something for them and delivered it for them. It's good and encouraging in the oil and gas industry. Another area is the government policies, honestly, to back float in this turbulent times, it is a test of the Nigeria Entrepreneur. It has
We must also applaud the government for the enactment of the Nigerian Content Development Act, which took off 2010. The act has actually brought out the best in Windfall Engineering as a business, and with series of projects to its credit not been rossy with all the government policies that have been rolled out in this period for them to generate more money from all the contractors. There is a particular policy to all contractors, if their personnel has to go offshore, there is Offshore Safety
Permit (OSP) which never has been, suddenly was introduced, anyway, we have not come to term with the government as par what the content is, we have to use this medium to say this, well, it is the government, so, we'll have to comply. That apart, we must also applaud the government for the enactment of the NCD Act, Nigerian Content Development Act, which took off 2010. The act has actually brought out Windfall Engineering into business, and with all the passion, we have come a long way by providing a source of livelihood to many Nigerians, which is the goal of NCD, creating, spending in country, trying to encourage the return of investment in the oil and gas industry. So, in summary, we will give the government a pass mark because laws are being enacted and is constantly evolving, change is bound to happen, like the PIB is been in government in the house of assembly for quite a long time, it will be refined and refined until we get something that is going to be beneficial, yes, NCD a pass mark. DPR, yes, is been there, is also giving us the opportunity to be licensed and do business, is more easier for Nigerian companies to get on stream in the oil and gas industry, so, the government isn't doing badly there. To appraise Windfall Engineering Projects Limited, we need to come down to the basics when you talk of the government policies, for instance, how it benefits us to float along, particularly in the area of funding. Well, it's been a turbulent time, somehow, we just have to forge ahead as a company. The Managing Director of Windfall Engineering, Engr. Pius Odu said that in Nigeria today, the regulation bottom line in the engineering sector is to promote local content participation and more Nigerian companies are active in the oil and gas industry. Interestingly, in the marginal fields
was put at N2.36 trillion, about 2.18 per cent of gross domestic product (GDP). The huge amount allocated for debt service in the 2017 budget proposal has continued to elicit condemnations from economic analysts, who noted that the allocation of 24.73 per cent of the overall budget proposal to debt service was a sign that another debt crisis is brewing in Nigeria. Analysts also picked holes on the dilated overheads, emphasis on spending and huge recurrent expenditure over allocation for capital projects. However, other analysts have argued that it is not a sin for a country to borrow money, but the concerns should be about how the money is utilised. They pointed out that in the past, monies borrowed for capital projects were not utilised for that purpose, but instead, were diverted to private pockets. They reasoned that the government should hit the ground running by making funds available for capital projects. Need for Robust Infrastructure Nigeria's infrastructure across board is in bad shape. Most major roads and bridges are in dilapidated condition and require major repairs; the power sector is still bedevilled by sundry issues, the health and education sectors are equally in poor condition. Fixing these problems could create millions of jobs; curb the rising unemployment, reduce crime rate, and return the recessed economy to a sustainable growth path. The United States drew itself out of the 1930s Great Depression through massive infrastructure investments. In fact, established countries like United Kingdom and Germany invest nonstop huge sums of money to ensure the continuous operation of their creaking old infrastructure networks, while many developing nations are starting from a rather clean slate and are even investing big in latest technologies. At an advocacy roundtable organised last year, by the Nigeria-British Chamber of Commerce in Lagos, experts posited that the desired national economic development will remain a
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mere wish that cannot be achieved unless necessary actions are taken to bridge the infrastructure gap. Managing Director, African Finance Corporation (AFC), said Andrew Alli, who spoke on 'Achieving Sustainable Development through Infrastructure The Role of the AFC.', argued that for a sustainable infrastructure development to happen, policy instability, poor legal and political framework, lack of a holistic view of national planning, lack of coordination between government agencies as well as limited capacity of civil servants must be addressed. He stressed that stakeholders must tackle infrastr ucture challenges creatively, target private sector funding and integrate training and job creation components into projects from conception, adding government must also ensure a favourable environment that would ease cost of doing business. He attributed project failure in Nigeria to overestimate revenue and growth potential, insufficient attention to mitigating and controlling risk at the design phase, lack of confidence between the project stakeholders, ability to monitor project development and predict emerging risks and poor planning of asset operation. Importance of Infrastructure Robust infrastructure could put millions of Nigerians to work in decent paying jobs. Electricity is crucial to fuel the economic growth of a country; a road improves productivity; Schools increase education levels and productivity. And so on. These all have important medium- and long-run implications for an economy. A key benefit of infrastructure, especially transport infrastructure, is the reduction of transport costs, which helps to create new markets, fuels further agglomeration, which in turn fosters competition, spurs innovation, lowers prices and raises productivity, leading to an increase in living standards. Group Executive Vice Chairman, SIFAX Group, Dr. Taiwo Afolabi, cautioned recently that the lack of critical infrastructure could hinder the 18 | www.cedmagazineng.com August 2017
success of the federal government's drive to improving the ease of doing business in the country and urged that the problem of infrastructure deficit should be urgently addressed in order to compliment the executive orders signed recently by the acting President. To spur economic growth and development, the federal government has taken the bull by the horn and has taken steps to bridge the infrastructure deficit. At the third Nigerian Stock Exchange (NSE) & Bloomberg Chief Executive Officer Roundtable in Lagos recently, the Minister of Finance, Mrs. Kemi Adeosun had said the federal government was commitment to infrastructure development and economic diversifying. She said about N200billion was invested on roads in 2016. Adeosun said the N200 billion, which was an increased on the N90 billion Robust infrastructure could put millions of Nigerians to work in decent paying jobs. Electricity is crucial to fuel the economic growth of a country; a road improves productivity; Schools increase education levels and productivity. And so on.
spent in 2015, is out of the N1.2 trillion earmarked for capital projects to ensure ease of doing business. According to the minister, the government will continue to prioritise infrastructure development to unlock growth potential, pointing out that the diversification of the economy would not be achieved without a good transportation system and power supply to improve ease of doing business. The minister said the country was very vast and to actualise her potential, infrastructure development was very crucial for sustainable growth and development. A 'Big Plan' for Infrastructure To this end, Adeosun said last week that her ministry was set to release N350billion, being the first tranche for the capital votes included in the 2017 Appropriation Act. The finance minister, who spoke at the public presentation of the 2017 Appropriation Act, emphatically stated that the government had enough cash available to commence the execution of key projects and initiatives scheduled for the 2017 fiscal year. "We are ready, we are having a cashplan meeting very soon and after that,
In the world of business as an entrepreneur, you must understand the technicalities involved in running a business, you must be well updated in what is called SWOT (Strength, Weakness, Opportunities and Threats) analysis, and what has brought Windfall Engineering Projects Limited thus far in business is our passion for performance. Passion is an underlying word that has no substitute in business growth; it is a key driver in business. Human beings are very creative and also at the same time can be inactive and passive, so as a leader in business, you should be able to turn on that spirit of creativity in your workforce. We are operating a project which is a week old presently, and all the technicalities in drawing a piping project is displayed at the site, though, is a sub-contract job, but were brought in to deliver the project in reck of time. The project cuts across both shutdown and not shutdown window, and which at the production platform, there comes a time of technical term 'hookup', where we bring in our installations and tie-in to the existing structure or facilities, and at that time you may obstruct production, so for safety reason, we need to shutdown to avoid hazard of fire and all that. This is one of our recent accomplishments in project delivery. And very quickly, we have done very critical projects with some big names in the industry, we have worked with DBN and other big names in the same platform side by side. There is no better way to quantify the quality of work you delivered than you have delivered an offshore project during a shutdown time frame, and at that time the nation is losing money, the IOC's losing money for, of course, no production, it is legitimate that they have to do shutdown which is a normal
maintenance culture. After all these, you have to start work as scheduled, your ability to deliver the project by making all arrangements like corporate arrangement, you need to stress all the resources on ground, that there is no failure. We have delivered a lot of projects for Total E&P Nig Limited at shutdown time frame, basically, Total has been our mainstay, which I must emphasize, we appreciate that relationship, which is growing by the day. Most times, we look for an occasion where we sit side by side with our clients.
First of all, I will start by saying fundamentally, clients are business minded, they will not just sit down for a table talk, most meetings are driven by projects, yes, you are a registered vendor, you just can't walk into a client office just to have a tip tap, it must be tangible thing for you and client to have a conversation, either virtually, either through email or physically. T here has been so many opportunities but projects has been mainly the focus in most meetings with our clients.
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INFRASTRUCTURE NEW DILEMMA
Engr. Oghale Pius Odu Managing Director/CEO Windfall Engineering Projects Limited
Into a new growth orbit Engr. Oghale Pius Odu, is a Mechanical Engineer by profession and sits atop position of Windfall Engineering Projects Limited. as the Managing Director/CEO with the renewed strategic growth vision.
medium scale enterprises (MSMEs).
he company, Windfall is a brand name, particularly in the oil and gas industry and more specifically in the engineering and construction sector of the industry. The company was incorporated and registered with the Corporate Affairs Commission registration in 2009, and since then, the company has actually built a positive profile through the delivery of several projects in the oil and gas industry, and the prime client is Total E&P Nigeria Limited. Windfall is using this medium to appreciate its clients, especially TOTAL for actually promoting local content which is a key policy of the Nigeria government. Windfall Engineering as a company offers the following ser vices, they do detailed engineering and design for piping, structural projects; piping and structural construction work, in which they do create what has been designed in paper, they have mechanical support services; manpower supply, which they use directly in their services or they provide for clients when the need arises, they also offer GRA â€Ś.. a composite material that is used basically for transporting fresh water system for domestic use in the industrial set-up, probably for laundry, in residential areas; they 34 | www.cedmagazineng.com August 2017
do insulation outing services; they are also very vast in anti-corrosion work which entails blasting and paintings for industrial installation both in their workshop or off-site, which could be in clients; installation either on-shore or offshore location which are different environment that determines how
Since 2012, 2013 and 2014, we have run shutdown projects for TOTAL consecutively, that is a show of our steady progress, reputation, integrity and performance in the oil and gas industry. the anti-corrosion work is approached. Windfall also do technical procurement, for example, they procure foreign items or products like valves, pipe fittings and all that, which made them to be featured as a way of contract either directly or subcontract. In appraising their performance
in the industry, the Managing Director confessed that it was a team work which involves men and women that sacrificed time at critical hours to deliver a project. He expressed appreciation to all their efforts. Actively, we started business 2010 till date and we have running jobs, we just completed a job majorly for NPDC as a subcontract arrangement with the key company, then we are also doing a Total E&P Nig Limited job for offshore installation, which is a major job on a critical time line, and interestingly we have featured both in what they call industry shutdown or no shutdown project. Shutdown project is when the client specifically hand pick the contractor that must feature. Since 2012, 2013 and 2014, we have run shutdown projects for them consecutively, that is a show of our steady progress, reputation, integrity and performance in the oil and gas industry.
N350 billion will be released as first tranche of capital releases for the 2017 budget,'' the minister said. Speaking in the same vein, Udoma, listed some major capital expenditure allocations as N553.71billion for Po w e r , Wo r k s a n d H o u s i n g ; N241.71billion for Transportation; N150 billion for Special Intervention Programmes; N139.29 billion for Defence; N104.24 billion for Water Resources; N81.73 billion for Industry, Trade and Investment; N63.76 billion for Interior; N151.91 billion for Education (including Universal Basic Education Commission); N55.61 billion for Health; and, N103.79 billion for Agriculture. Some major initiatives in the 2017 Budg et include: N100 billion provisioned for a new Social Housing Programme; N46 billion for Special Economic Zone Projects to be set up in each of the geo-political zones to drive manufacturing / exports; N16 billion voted for the revival of the Export Expansion Grant (EEG) in the form of tax credits; N15 billion to recapitalise Bank of Industry (BoI) and Bank of Agriculture (BOA) to strength their capacities to support micro, small and
Roads and Bridges About 65 road projects are included in the budget. According to Udoma, the over 65 roads and bridges undergoing construction and rehabilitation are located across the six geopolitical zones of the country. The breakdown as captured in the budget are as follows: N 1 0 b i l l i o n f o r t h e rehabilitation/reconstruction and expansion of Lagos-Shagamu-Ibadan dual carriageway Sections I & II in Lagos and Oyo States; N13.19bn for the dualisation of Kano-Maiduguri Road, Sections I-V; N10.63bn for rehabilitation of Enugu-Port Harcourt dual carriageway, Sections I-IV; N7bn for the construction of Second Niger Bridge including access roads phases 2A & 2B; N7.12bn for the dualisation of AbujaAbaji-Lokoja road; N9.25bn for the dualisation of Obajana junction to Benin road Phase 2 Sections I-IV; N7.5bn for the rehabilitation of Onitsha-Enugu dual carriageway; N7bn for the construction of BodoBonny road with a bridge across the Opobo channel; N3.3bn for the rehabilitation of Ilorin-Jebba-MokwaBokani road; N3.5bn for the dualisation of Odukpani-Itu-(SPUR IDIDEP ITAM) - Ikot Ekpene federal highway Lot 1: Odukpani-Itu bridgehead; N1.5bn for the dualisation of KanoKatsina road Phase 1; N2.24bn for the dualisation of Suleja-Minna Road,
Sections I & II; N2.3bn for GombeNuman-Yola Phase II (Gombe Kaltungo); N2.7bn for the construction of Kano Western bypass; and N2.03bn for the construction of the terminal building at Enugu airport. Given the huge amount of money that would be required for actualisation of these laudable projects, there have been growing concerns about the possibility of raising funds for the projects. But Udoma allayed those fears when he stated that there would be prudent management of overhead costs in order to provide adequate funds to execute capital projects. He said strenuous efforts were being made to find the resources required. "We are challenging our revenue generating agencies, particularly the FIRS and Customs, to improve efficiency and broaden their reach so as to achieve the targets set for them in the 2017 budget", he said. The implementation of the 2016 budget was hampered by a combination of massive drop in oil prices and disruptions in crude oil production, which resulted in significant shortfalls in the projected revenue. There are also concerns that the dwindling oil price from the 2017 high of $55 per barrel in February this year, may hinder the attainment of the 2017 target. This development, analysts said, should compel the government to not only strive to boost internally generated revenue, but to strengthen alternative revenue sources to shore up the
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INFRASTRUCTURE NEW DILEMMA country's foreign earnings. Julius Berger abandons Lagos-Ibadan Expressway The Federal Ministry of Power, Works and Housing has announced that Julius Berger Nigeria Plc has finally suspended work on the Lagos-Ibadan Expressway. It sad the development was not unconnected with delays in the payment of agreed contract fees for work already done. Checks have shown that the contractor handling the reconstruction and expansion works on the Section II from the Sagamu interchange to Ibadan, Reynolds Constr uction Company Nigeria Limited, with Contract No. 6205, had suspended further work on the project due to an outstanding debt of N8.94bn. The RCC had in a letter addressed to the Minister of Power, Works and Housing, Babatunde Fashola, and dated June 2, 2017, called his attention to the worsening financial situation of the project and pleaded for his intervention in order to ensure the continuation of work on the site. The Julius Berger letter stated, "It has become evident that the required adequate funding for the continuation of the project is not available. We trust that you will understand that, therefore, and as a consequence of the unacceptable financial risk to Julius Berger Nigeria Plc, we are left with no choice than to immediately commence suspension of the works on the project, as earlier notified." However, Fashola, in a statement issued by his Special Adviser on Communications, Mr. Hakeem Bello, on Sunday, stated that the two contractors working on sections of the Lagos-Ibadan Expressway, Messrs Julius Berger and RCC had given notice of suspension of work on the site. According to Fashola, the letter from the Managing Director, RCC, Mr. M. Nakhla, which was dated June 2, 2017, stated, "In view of the irregular payment and the attendant cash flow problem, we shall be constrained to 20 | www.cedmagazineng.com August 2017
suspend further execution of work unless there is an appreciable improvement in the project's cash flow and adequate funding arrangement is put in place for further works." Fashola said the letter was co-signed by the Division Manager, Julius Berger, Mr. W. Loesser; and the Commercial Division Manager, Mr. T. Meletschus. Afenifer e accused Federal Government of Nigeria for leaving Lagos-Ibadan Expressway project The Yoruba socio-political group, Afenifere, has accused the Nigerian g over nment and the National Assembly for the interruption of work
on the Lagos-Ibadan Expressway. This is following the N8.9bn debt of the project which the Reynolds Constr uction Company Nigeria Limited manages specifically in section II of the Lagos-Ibadan highway. The Nigerian govenment also made public on Sunday the postponement of work of the Julius Berger Nigeria Plc who handles the section I of the LagosIbadan highway. According to Yinka Odumakin, Afenifere's public secretary, it is an embarrassment that the government could not accept to fund the only main project it was starting in the SouthWest. Mr. Odumankin said, "It would count heavily against this administration unless the right thing is done for the contractors to go back to site." "People are dying on that road daily and for the government not to be concerned is clear negligence and it is unpardonable."
engine available in the market. Combining Cummins’ latestgeneration Modular Common Rail Fuel System technology with quad-turbocharging and integral selective catalytic reduction after-treatment, the QSK95 delivers reduced noise, excellent response and ultra-low emissions capability in a smaller footprint than the mediumspeed diesel engines traditionally used in locomotives. Cummins has delivered the first QSK95 engine built to a rail specification to automation company Siemens for installation to its Charger locomotive, a new diesel-electric locomotive designed for the North American passenger rail market. The Charger locomotive was delivered into the market last year. Although it is currently being manufactured for passenger operations, the company notes that its Cummins QSK95 is suited to freight applications in any operating conditions. “Cummins welcomes the opportunity to partner with customers globally to help them succeed,” says Cummins rail sales and business development leader Madelyn Pretorius, adding that the company is pleased that its “ultra-clean” diesel engine technology is helping Siemens locomotives to operate efficiently while significantly reducing emissions and improving the environment. Cummins has 70 years of e x p e r i e n c e, w i t h p r ove n reliability and durability in highspeed diesels in rail. The company currently has over 13 000 engines in railway service globally. Locomotive, railcar, track maintenance and auxiliary power applications are all available in
the Cummins engine product range in the rail segment,
“Cummins welcomes the opportunity to partner with customers globally to help them succeed,” says Cummins rail sales and business development leader Madelyn Pretorius
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The needed boost to the sector TRANSPORTATION
fifth-largest railway system globally by 2019. “According to Statistics South Africa, over 734-million tons of freight was moved in South Africa in 2013. “It is estimated that over 70% of this freight was moved by road, despite the fact that railways make up a substantial portion of Africa’s transport infrastructure – further highlighting the need for rail u p g r a d e s,” t h e c o m p a n y elaborates. Since its announcement in 2012, Cummins notes that the MDS has made significant strides
and, as a result, South Africa will continue to shift its freight from road to rail, cutting both logistical costs and carbon emissions in the process. “According to the MDS overview, rail volumes are projected to increase from approximately 200-million tons to 350-million tons by the end of the programme in 2019.” Cummins notes that, in March 2014, Transnet announced a R50-billion contract with four manufacturers to build a fleet of 1 064 new locomotives to drive forward the MDS. Power, efficiency, and reliability are key in powering these machines, it says, as they are responsible for pulling multiple wagons that carry substantial amounts of precious cargo across vast distances.
Cummins’ QSK95 engine, designed specifically for the rail market, began production at the US-based Seymour Engine Plant in September 2015. At 2 983 kW, the QSK95 is the highest-output 16-cylinder high-speed diesel engine available in the market.
QSK95 for Siemens Cummins’ QSK95 engine, designed specifically for the rail market, began production at the US-based Seymour Engine Plant in September 2015. At 2 983 kW, the QSK95 is the highest-output 16-cylinder high-speed diesel
Rail is the future of Africa’s industrialisation “According to the MDS overview, rail volumes are projected to increase from approximately 200-million tons to 350-million tons by the end of the programme in 2019.”
ail infrastructure upgrades remain a core focus of the ongoing industrialisation of Africa, where the transportation of goods and commodities is often difficult a n d c o s t l y, o w i n g t o underinvestment in rail infrastructure, says multinational power and engine manufacturer and distributor Cummins. “China’s October 2015 announcement to pledge $50billion towards the industrialisation and d e ve l o p m e n t o f A f r i c a n infrastructure – together with State-owned freight utility Transnet’s R300-billion sevenyear Market Development Strategy (MDS) – is a clear indication of the tangible commitment to this lucrative sector,” Cummins explains. The MDS is part of Transnet’s ambition to accommodate the 32 | www.cedmagazineng.com August 2017
Construction of the Atlantic Resort in Nigeria to commence in November
he Atlantic Resort which is a stunning development in Lagos, Nigeria is set to commence construction in November this year. The Grenadines Homes which is a Real estate development company will kickstart its flagship project in the West African country. The company got a boost recently with the selection of building and civil engineering firm, Messrs Cappa & D'Alberto as the main contractor. It will nevertheless cost US$110m for the project to be complete, with the commencement date being November this year. The initiative is a result of the high demand for Grade A office spaces in Lagos. This continues on an upward trajectory due largely to the size of Nigeria's Gross Domestic Product (GDP). Moreover, the g rowing population, emerging middle class and the thriving business
environment in Lagos owes to the mega project. The Atlantic Resort The Chairman of Palton Morgan Holdings, the parent company of Grenadines Homes, Femi Banwo, said that it will be a stateof-the-art project. He said this during the signing of the Memorandum of Understanding (MoU) between Grenadines Homes and Cappa & D'Alberto in Lagos.
"We have selected the best partners that worked on the best projects of the world like Emirates Stadium, to work on the project to inspire hope and pride in the country," Upon completion, the project will deliver a world-class luxury edifice comprising four towers, outstanding hotel, restaurants, shops and retail outlets. "We have selected the best partners that worked on the best projects of the world like Emirates Stadium, to work on the project to inspire hope and pride in the country," he said. However, the first phase which is a 20-storey building might be complete in 18 months but the whole four towers may take up to three years. The Grenadines Homes is a Real estate development company dedicated to reinventing the concept of home ownership in Nigeria. Their homes represent luxury and high class that suit varying tastes and preferences. www.cedmagazineng.com August 2017
Africa-US economic direction Trump administration's Africa policy in focus at Agoa trade talks
Donald Trump ith the Tr ump administration's trade US President agenda focused on reining in China and renegotiating the North American Free Trade (Agoa) has been barely mentioned Agreement, Africa has barely by any Trump officials. appeared on the radar screen. But no moves toward an early That could change in August as renewal or extension of Agoa are President Donald Trump's top e x p e c t e d , s a i d C o n s t a n c e trade negotiator and other senior Hamilton, deputy assistant US US officials head to the West Trade Representative for Africa. African nation of Togo to review a Lighthizer will stress the Clinton-era free trade pact with importance to the administration sub-Saharan Africa, in the of deepening its trade relationship administration's first high-level with Africa, but will also caution delegation to visit the region. that African countries should Looming over the two-day "engage in fair trade, eliminate ministerial is China's growing role barriers to US exports and abide in African trade and Overshadowing the talks will be an "out-of-cycle" i n f l u e n c e, review of Agoa trade benefits to Rwanda, Uganda as Beijing and Tanzania, which have supported a phased f i n a n c e s ban on imports of second-hand clothing. US m a s s i v e groups say the move violates Agoa rules. infrastructu re projects in the region, some by the eligibility criteria of the t h r o u g h i t s n e w A s i a n Agoa program," said Hamilton. Infrastructure and Investment The US trade deficit with the 38 Bank. Agoa countries shrank to about While US exports to sub- $7.9-billion last year from a peak Saharan Africa as a whole have of $64-billion in 2008, as US shale doubled to $21.81-billion from oil production increases have $10.96-billion in 2000, according lessened the need for oil imports to US Commerce Department from major exporters Nigeria and data, they were dwarfed by China's Angola. $102-billion in exports to the Overshadowing the talks will be region in 2015. an "out-of-cycle" review of Agoa Also at issue is whether the trade benefits to Rwanda, Uganda Trump officials, led by US Trade and Tanzania, which have Representative Robert Lighthizer, supported a phased ban on will signal a desire to change the imports of second-hand clothing. trade agreement before it expires US groups say the move violates in 2025. Trump has sought to Agoa rules. bolster his "America First" "The fact that we accepted the campaign by withdrawing from the petition under the Tr ump Tr a n s Pa c i f i c Pa r t n e r s h i p, administration, I won't say that threatening to rip up NAFTA and means we're any harder on any seeking to renegotiate the US- countries, it just says we respect South Korea free trade deal. the criteria," said Hamilton, who Launched in 2000, the African emphasized that the issue was still Growth and Opportunity Act under review by USTR.
Aviation infrastructure Rwanda signs deal for construction of Bugesera International Airport
wanda has signed Concession Agreement with the Engineering, Procurement and Construction (EPC) contractor for the construction and operation of Bugesera International Airport. Kigali is being positioned to become a nerve center for business, travel, and shipping in the sub-region, and the Government of Rwanda has taken a concrete step toward becoming a transportation hub for the East African region. James Musoni, Minister of Infrastr ucture, signed the agreement on behalf of the Government of Rwanda while Manuel Mota, Chief Executive Officer of Monta-Engil signed on behalf of the Engineering, Procurement and Construction (EPC) contractor The US$700mn Bugesera International Airport project is 22 | www.cedmagazineng.com August 2017
designed to be executed across 4 phases. Phase I will involve approximately 27 months of construction - at an estimated cost of US$400mn.the construction work on phase I is expected to be completed by 2019, at which point the airport will be able to accommodate 1.8 million passengers annually. Through the development of Bugesera Airport Rwanda has an ambitious strategic Vision 2020 which aims to transform the country into a knowledge-based, middle-income country by the end of the decade - as well as the country's Economic Development and Pover ty Reduction Strategy (EDPRS). However, the Bugesera International Airport project is designed and is being implemented with an aim of generating socio-economic development in Bugesera, Kigali,
Through the development of Bugesera Airport Rwanda has an ambitious strategic Vision 2020 which aims to transform the country into a knowledgebased, middleincome country by the end of the decade.
and other parts of the Eastern Province. The airport will further sustain the development of the aviation sector by backstopping the growth of RwandAir with new facilities and training opportunities. The project is expected to provide approximately 2,000 jobs for local residents. In the development of the project, ALSF provided assistance to the Government of Rwanda. Additionally, the provisions of legal advisers have also supported the government in its negotiations between project partners in the Concession Agreement for the construction and development of the Airport. The coordination of legal efforts has also been instrumental in ensuring the signing, first of a Project Development Agreement and Joint-Venture Agreement between the Rwandan government and investor, and subsequently of the Concession Agreement. "We have anticipated this project for close to 10 years, all the
The administration has paid little attention to developing a USAfrica policy, said Kim Elliot, a trade expert at the Washingtonbased Center for Global Development. "This administration has just shown almost zero interest in Africa," said Elliot. "It has not been a big focus, there is no sign at all that it has engaged the president's interest." Scott Eisner, president of the US Chamber of Commerce's USAfrica Business Center, said African countries should look at reforms to attract more foreign investment. Agoa, in its current form, will likely become irrelevant for a number of markets by 2025, he said. "Those governments that want to continue to count on the US market need to be prepared to come to the table to have bilateral or regional trade talks - whether they are called a free trade agreement or something different," Eisner said. Peter Barlerin, a senior State Department official, said African nations need to start thinking about what comes after Agoa. "We're not going to see Agoa stretching out to infinity, so eventually we will move into some other kind of arrangement, and that could include bilateral or larger free trade agreements with parts of Africa," he said. www.cedmagazineng.com August 2017 | 31
INTERVIEW designing, we send mails to our clients and they equally get back to us via mail. So Empee Engineering Consultants do a lot with our IT.
INFRASTRUCTURE we can as well go back to our villages so that whatever is required by any clients we
CED Magazine: The ROI innovation culture? Engr. Osezuah: Investment in this industry is vast, for us to talk in areas of consultancy, we need to invest in human resources, we invest in training the personnel, because the personnel that are involved with this designs uses software, they must have to be updated with the latest software that are available in the industry. In the “What make Empee Engineering special is area of construction we need a prompt delivery of projects and to clients lot of equipment, we invest in satisfaction. When a client gives us a project equipment too, and the return to do, whatever it takes us to make sure of investment is that we that project is delivered on time and to operate in an area that is polity specification we do it.” playing in a major role, we are very careful to flow in the political trends of the country, otherwise, once you are tagged, you belong to a particular section, the ones government don't want to deal with, we have to be very careful so that our investment does not go down with any government, we are very careful not to be particular with our practice, so that with time whatever we are investing in human resources, in information technology, in equipment yield the expected dividends. CED Magazine: Do you think Empee Engineering Consultants has an edge over the competitors and can you speak on what make Empee Engineering Consultant standard? Engr. Osezuah: What make Empee Engineering standard is prompt delivery of projects to customers and customers satisfaction, when a client gives us a project to do, whatever it takes us to make sure that project is delivered on time and to specification we do it, we don't play with prompt and project delivery to specification. Secondly, in the Nigeria business environment of today, there are basic requirement for anybody to be able to compete, you must have all the registration that are required, we don't play with those requirements, first month of every year we have them in place. Like I always tell my staff, if we don't have them in place we don't have business in Abuja, 30 | www.cedmagazineng.com August 2017
while relying largely on local expertise," said Emmanuel Rug ambwa, a Strategic Investment Analyst at the Rwanda Development Board. "When we approached the ALSF, they swiftly helped us procure the required expertise to structure the project such that it attracts private capital. Since then, we've had many banks express interest in joining the project. The ALSF grant also includes a capacity building component which ensures that the procured experts will train Rwandans to monitor the project's development, as well as to structure future projects in a similar manner," he added. On completion, the project is designed to ease the air traffic load which is currently being experienced at Kigali International Airport which is the nearest to Kigali's central business district in Kanombe, 10 km east. TPS, a British engineering firm, was in 2009 employed by the Rwandan government to design and carry out a feasibility study to develop a new airport in Nyamata village in Bugesera, 40 km south of Kigali. Phase I of Bugesera Airport is designed to handle one million passengers and 150 million tonnes of cargo annually from 2015 to 2025. However, subsequent phases will follow with higher passenger and cargo capacities. Phase II of the airport project will incorporate building a second runway to approximate the capacity of the largest world airports. The airport is also designed to provide leisure, hotels and conference facilities. It is further hoped a free trade zone will be created in the area which will spur economic development.
Nigeria’s Construction Industry Hall of Fame 2017 Date: Friday September 15, 2017 Venue: Sheraton Hotels, Ikeja, Lagos Theme: Local Content and the Economy: Building Capacity for Growth
Nomination is Now Open Send your nomination to the following contact: E-mail: firstname.lastname@example.org; email@example.com Mobile: 234 805 524 3516 Call: 234 805 976 4839 www.cedmagazineng.com
Engr. Osezua www.cedmagazineng.com August
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OIL AND GAS REPORT
performance Engr. Osezuah: There is a lot of challenges that are facing every sectors in Nigeria and are still facing the industry, one of the major challenge we have in this industry is having done a job getting paid for the job is a very big challenge, the ways of accessing payment take time, we have a job to do, we did but the payment of the job does not come easily, there are some jobs that have been done far back 2013 to 2014 that have not been paid, these are some challenges we had. One major challenge that affect this sector is the budgeting process of the federal government, this is July 2017 the budget of 2017 is not ready and at the end of the day the procurement process will take at least two to three months if not more in some cases so that by the 24
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time the jobs are been awarded we are close to the end of the year, this is the period one would have use to plan for the job, source for fund and eventually execute the job before end of the year, by the time they come, they come towards the end of the year when everybody is in a hurry, this is the major challenge, if there can be a long term plan not every year you come up rush the budget, the project and at the end of the day it is not good for everybody and it does not help anybody. C ED Magazine: Relationship management with clients and industry peers? Engr. Osezuah: My relationship with the clients and industry peers are very cordial, we try as much as possible to be at peace with everybody to play the game,
because it is a team work, we need the clients and the peers. We need the clients to get the job to do, when we have the job to do we have to relate with other people, the peers in the industry from time to time, we meet to discuss issues that are facing everybody, we sit together to chat over the issues and to know the way forward. We need the clients to get the job to do, when we have the job to do we have to relate with other people, the peers in the industry from time to time,
CED Magazine: IT and the industr y integ ration and performance? Engr. Osezuah: Definitely, what we do here there is no way we can do it without the IT, because designing a bridge you need a software, designing a road you need software all these are IT base, these are computer base, you can't do without it, no consultant can do without it, we have a lot of software, internet base, we are www.cedmagazineng.com August 2017 | 29
OIL AND GAS REPORT
Engr. Abraham Osezuah Managing Director, Empee Engineering Consultants ltd.
Bringing experience to bear I came back to Empee to put all the experiences I have gotten in this various sectors into practice; to build a world class engineering consulatancy firm Empee Enginering Consultants Limited.
ED Magazine: Your c o m p a n y ' s performance and core business area in the industry E n g r. Osezuah: Empee Engineering Consultants was registered in 1997 and started actual practice in 2012, the reason is that after registering Empee in 1997, I joined the civil service, and I was in civil service till 2008 when I resigned. I also worked briefly in telecomm and in the oil and gassector. I came back to Empee to put all the experiences I have gotten in this various sectors into practice; I started the consultancy practice in earnest with the synergy of other professionals in 2012. The core business areas in Empee Engineering Consultants are firstly, engineering consultancy, we are into construction, along the line we have done a number of roads, bridges, and dam designs, we have also done building construction and road construction and our clients are federal ministries, federal agency that we work for. CED Magazine: Key driver of the company's growth, innovation and human capital matters Engr. Osezuah: Haven told you the area and background that I have worked, working in all these areas have made it possible for me to come across various 28
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professionals in various areas, working in civil services, federal highways departments, I have come across the best in the industry when it comes to road designs and road constructions, so whatever we have to do, we use the best professionals that are available within the industry. Because of my background I have come across various people that can handle various areas and at the end of the day whatever is coming out of Empee is one of the best you can get in the country. CED Magazine: Pictures of projects / products range and landmark ones Engr. Osezuah: Engineering consultancy which is the main area of Empee Engineering Consultants are not pictures of projects that we can see like building or roads, but we have pictures of designs we have done, pictures that were taken in the course of the designs, we have pictures of projects that we are supervising because we are also supervising projects of federal government, for instance, we are supervising a road project for federal ministry of works in Umana Ndiagu, Ebenebe Amasi road, Enugu State road being constructed by CGC. My company is on ground supervising, we have done a number of road designs for federal ministry of works, we
Because of my background I have come across various people that can handle various areas and at the end of the day whatever is coming out of Empee is one of the best you can get in the country.
designed the Igbagwa road in Enugu state, the Ikeba drive on Oba Okigwe road in Enugu State and also in Kogi State Ajaokuta Okene road, we did a rehabilitation, we designed the rehabilitation for that road for the federal government that is one of the major roads we have done for the ministry of works. CED Magazine: Professional career and impact on the business and leadership style Engr. Osezuah: Like I said, I have developed professionally over time, when I was working with federal ministry of works, then you know you have a lot of engineers to work with, I work there from pupil engineer to senior engineer before I left, I worked briefly with the World Bank, I worked in telecommunication, I also worked with the construction of civil works in the oil and gas, over time I have gain experience along various trainings both in-house, in Nigeria and outside the country. I have undergone various training on this job, all this are experience I have put together to develop me as a professional in this area. CED Magazine: Government policy and the industr y
Frontier of investment Chinese banks commit funds to Nigerian oil and gas projects
n its bid to support the Federal government’s aspiration to increase power generation to 10GW, the Nigerian National Petroleum Corporation (NNPC) has unveiled plans to expand gas generation and distribution nationwide. NNPC Group Managing Director, Dr. Maikanti Baru, disclosed this when a delegation of the Nigerian Gas Association led by its President, Engr. Dada Thomas, paid him a courtesy visit yesterday, in Abuja. The GMD said that the recent debt settlement for the Joint Ventures would have great impact on the Gas Industry as the initiative was capable of freeing some dedicated funds that could be used to develop the sector. “We have the aspiration of government to raise power generation to at least 10 giga watts capacity, not just 10GW in terms of installed capacity, but one that will be steady
in the grid by 2020. All these will drive our activities to ensure that the gas business is expanded and government’s aspiration to earn as much revenue from gas as oil will definitely be realized”, Dr Baru stated. The GMD said the current efforts to connect the eastern part of the country, where there are a lot of gas reserves, with the west, where high consumption demand exists, demonstrated NNPC’s readiness to impact positively on the power sector. Dr. Baru stated that a lot has been achieved in the contracting process of the $2.7billion Ajaokuta-Abuja-Kaduna-Kano pipeline project, dubbed AKK Pipeline Project. “We have gone far with the development of the project using the same paradigm shift of Public Private Partnership (PPP) financing. We have also gone far with the contracting process, part of which is to
ensure that money meant for the project is raised from the private investors,” the GMD stated. He explained that the feat recorded in the project would bring to the fore, a new dimension in gas projects execution in the country, nothing that this would signal a regime of private investors funding for such projects. The GMD recalled recent financing agreements signed in London wherein, for the first time, the Chinese contributed $250m towards the projects. He disclosed that Chinese banks had made commitments to bringing in as much money as might be needed to finance oil and gas investments in Nigeria. “On that occasion, I did challenge the Chinese Banks that since they have now come on board, they should move from the back seat to the driver’s seat and they gave me their commitment that they have plans to bring in as much money as we need to execute our projects. And if the Chinese tell you that they are going do it, definitely they
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OIL AND GAS REPORT
OIL AND GAS REPORT
Becoming global player Growing US LNG dominance "could have been us": Peyto CEO
ntil last year, US LNG was not on the global market, but by 2022 it is expected to challenge Australia and Qatar as one of the world's top exporters. This is a result of "remarkable" production growth and increasing LNG export capacity, according to the International Energy Agency. That market trajectory could have been Canada's, says the CEO of one of the country's leading natural gas producers. Commenting in his monthly president's report, Peyto Exploration &
Development Corp.'s Darren Gee said the recent announcement by Petronas to cancel its LNG project on the West Coast of Canada was a disappointing one that has negative financial ramifications for all Canadians. Identify opportunities and empower your strategic decision making with the Daily Oil Bulletin. "I guess we'll just have to continue to pay the Americans to take our excess gas to foreign markets, since we're not prepared to encourage the capital investment environment that would enable us to do it ourselves," Gee wrote.
"There are those too political or polite to say it, but it's obviously the investment environment that our governments are creating that is to blame, since other LNG facilities are actively being pursued elsewhere on the globe. In fact, when you look at the projected growth of LNG export capacity in the United States, they are clearly creating an attractive place to put capital to work." By the end of the decade, Gee noted, the US is expected to have close to 10 bcf/d of export capacity. Canada currently produces about 15 bcf/d, according to the Canadian Association of Petroleum Producers. "That could just as easily have been us if not for the municipal and regional taxes, provincial taxes, federal taxes, carbon taxes, First Nations benefit agreements, and over four years of hoop jumping. [The Pacific NorthWest LNG approval] list went on and on (190+ conditions), so Petronas's decision should be no big surprise to anyone." What this means, Gee added, "is that the development of one of Canada's largest natural gas resources will be limited to using, and competing for, existing pipeline egress, since the same issues that prevented Petronas from proceeding also exist for any material expansion of other Canadian egress solutions."
Worthy investment US, FG back Eko Petrochem's 20,000bpd oil refinery in Lagos
he construction of a 20,000barrels-per-day crude oil refinery in Lag os by a Nigerian petrochemical and refining company has received a major boost with the signing of a grant by the United States Trade and Development Agency, report says. Similarly, the Federal Government has pledged to provide the necessary support to the company towards the completion of the project aimed at ramping up the nation's oil refining capacity. The USTDA on Friday signed the grant with Eko Petrochem and Refining 26
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Company Limited for a feasibility study supporting technologies and development of an implementation plan for the modular refinery on Tomaro Island in Lagos. Eko Petrochem and Refining
Company said it had selected Texas-based VFuels, LLC to carry out the study, which would provide technical analyses and engineering and design needed to advance the refinery.
will do it and we will give them a run for their money,” Dr. Baru enthused. He said NNPC would make inputs into the National Gas Policy recently adopted by the Federal Executive Council as well as the Fiscal Bills on gas being worked out by the legislature, with the view to ensuring that gas takes its rightful place in Nigeria’s domestic energy mix. While commending the NGA for its efforts to develop the gas sector, Dr. Baru called on the Association to extend its advocacy to the power sector being the major consumer of gas in the country. He said another project that would increase gas consumption in the country was the Ogidigben Gas Industrial City project, on which he said, NNPC was committed to seeing it come to fruition, stressing that what was remaining is getting the developer to bring in the various investors to put their industries in place. Dr. Baru pledged the Corporation’s continuous support to NGA in the execution of its mandate and continuous relevance in the industry. Speaking during the visit, NGA President, Engr. Dada Thomas, applauded the GMD of NNPC for the numerous initiatives that he had taken so far to turn around the fortunes of the Corporation and the country’s economy at large. “We would like to congratulate the NNPC on a number of paradigm shifts, changes and initiatives it had brought to the fore in recent times. I am talking about the new alternative funding which you recently signed with Shell and Chevron to the tune of $1.78Billion, the Clearing of $400million debt in April, the progress being made on the Elf 2loop lines and the OB3 gas project, one of the most critical gas pipelines in the country,” Engr. Thomas stated He declared that this gale of achievements by NNPC informed NGA’s huge confidence in the current Management of the Corporation to transform the country’s Oil and Gas Industry. Other highlight of the visit included the nomination of Dr. Baru as the Chairman, Advisory Council of the NGA by the executive of the Association. In a related development key Chinese Banks to Commit $250m to NNPC’s Ajaokuta-Kano Gas Line The Nigerian National Petroleum Corporation (NNPC), yesterday disclosed that its Ajaokuta-Abuja-Kaduna-Kano gas pipeline project, often called the AKK Pipeline Project, would receive a funding
boost worth $250 million from Chinese banks. The corporation also explained that the gas line which would cost it $2.7 billion to execute had achieved a lot of milestones in its contracting process. NNPC’s Group Managing Director, Dr. Maikanti Baru, stated these in a statement from the Group General Manager Public Affairs Division of the corporation, Mr. Ndu Ughamadu, in Abuja, though he did not disclose the identity of the Chinese banks that are willing to do this. The statement however noted that Baru hosted a delegation of the Nigerian Gas Association (NGA) which was led by its President, Dada Thomas, when he made these disclosures. Baru stated that the corporation got the funding window when it recently signed a $1.78 billion alternative financing agreements with International Oil Companies (IOCS) in London, for oil production, adding that the Chinese banks agreed to contribute $250 million towards the gas line projects. He equally disclosed that the Chinese banks had made commitments to bring in as much money as might be needed to finance oil and gas investments in Nigeria. According to him, the NNPC has opted to use the Public Private Partnership (PPP) financing framework to execute the gas line project, and that the corporation’s recent gradual exit from Joint Venture (JV) Cash Call regime would free up a lot of money for the project under this framework. “We have gone far with the development of the project using the same paradigm shift of Public Private Partnership (PPP) financing. We have also gone far with the contracting process, part of which is to ensure that money meant for the project is raised from the private investors,” Baru, was quoted to have said in the statement. He explained that the feat recorded in the project would bring to the fore, a new dimension in gas projects execution in the country, noting that it would equally signal a “On that occasion, I did challenge the Chinese banks that since they have now come on board, they should move from the back seat to the driver’s seat and they gave me their commitment that they have plans to bring in as much money as we need to execute our projects. And if the Chinese tell you that they are going do it, definitely they will do it and we will give them a run for their money,”
regime of private investors funding for such projects. “On that occasion, I did challenge the Chinese banks that since they have now come on board, they should move from the back seat to the driver’s seat and they gave me their commitment that they have plans to bring in as much money as we need to execute our projects. And if the Chinese tell you that they are going do it, definitely they will do it and we will give them a run for their money,” he added. He explained that the corporation would continue to suppor t the federal government’s aspiration to increase Nigeria’s electricity generation to 10,000 megawatts (MW), with improved gas generation and distribution nationwide. The recent debt settlement for arrears of JV cash call obligations by the corporation, he stated, would have great impact on the gas industry because the initiative was capable of freeing some dedicated funds that could be used to develop the sector. “We have the aspiration of government to raise power generation to at least 10GW capacity, not just 10GW in terms of installed capacity, but one that will be steady in the grid by 2020. All these will drive our activities to ensure that the gas business is expanded and government’s aspiration to earn as much revenue from gas as oil will definitely be realised,” he stated. Baru, said the current efforts to connect the eastern part of the country, where there are lots of gas reserves, with the west, where high consumption demand exists, showed that the NNPC is ready help the country’s power sector grow. He said the NNPC would make inputs into the National Gas Policy recently adopted by the Federal Executive Council (FEC) as well as the fiscal bills on gas being worked out by the legislature, with the view to prioritising gas. The statement equally noted that Thomas, in his remarks applauded Baru for the numerous initiatives he said NNPC has taken, and which had attracted NGA’s attention. “We would like to congratulate the NNPC on a number of paradigm shifts, changes and initiatives it had brought to the fore in recent times. I am talking about the new alternative funding which you recently signed with Shell and Chevron to the tune of $1.78 billion; the clearing of $400 million debt in April; the progress being made on the ELPS – 2 loop lines and the OB3 gas project, one of the most critical gas pipelines in the country,” Thomas stated. www.cedmagazineng.com August 2017 | 27
Published on Aug 21, 2017
CED Magazine's August Edition Features Top Engineering Consultancy Companies and an in depth analysis of Infrastructure Development.