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‘I’ve been very disappointed’ 16

– Senator Abe

Canada, India get BPE nod for due diligence on TCN 24

A Vanguard Monthly Review Of The Energy Industry VOL 03

N0. 33

UPDATES MONTHLY BASKET PRICE

Feb-12 Jan-12 Dec-11 Nov-11 Oct-11 Sep-11 Aug-11 Jul-11 Jun-11

110.72 111.76 107.34 110.08 106.29 107.61 106.32 111.62 1109.04

May-11 Apr-11 Mar-11 Feb-11

109.94 118.09 109.84 100.29

Daily | Weekly | Monthly | Yearly

110.82US

120 116 112 108 104 100 96 92 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12

Oil companies cut jet fuel prices by 3 per cent, reports

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ccording to some reports, the oil companies in India have reduced the price of aviation turbine fuel (ATF) by as much as Rs. 1,974 per kilolitre or 3.02 per cent to the level of Rs 62,908 per kl, bringing some relief to the cash-strapped aviation firms in the country.

FEBRUARY, 2012

NIGERIA’S FUEL SUBSIDY:

A palliative, a burden NO NIGERIAN

TO REMOV AL OF FUE L

S SAY

SUBSIDY


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Contents 4 8 16 21 23 24 27 31 34 38 40 45 49

COVER

Nigeria’s subsidy: A palliative, a burden

OIL Subsidy: EFCC grills petroleum importers, marketers

FOCUS

UNEP report: I’ ve been very disappointed-Senator Abe

GAS

WGC 2012 moves to sustain future global gas growth

FEEDBACK

Drilling of Chevron Nigeria’s relief well to last 100 days

POWER

Canada, India get BPE nod for due diligence on TCN

FINANCE

NEITI backs move to reintroduce PIB in National Assembly

INSURANCE

Fuel subsidy has not benefited Insurers

LABOUR Power sector is too sensitive to be toyed with

SOLID MINERALS

NASS task ministry on development of steel sector

FREIGHT

We represent generations of marine pilots

TECHNOLOGY

Effective oil spill response techniques and prevention

COMMUNITY DEVELOPMENT

Ijaw communities in Delta, Bayelsa lay siege to Shell

Sweetcrude is a publication of Vanguard Media Limited

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Hector IGBIKIOWUBO

DEPUTY EDITOR Clara Nwachukwu CORRESPONDENTS Victor AHIUMA-YOUNG Godwin ORITSE Yemie ADEOYE Jimitota ONOYUME Samuel OYANDOGHA Oscarline Onwuemenyi Emma Arubi Rosemary ONUOHA MANAGER, MARKETING Ubong NELSON PAGE LAYOUT/DESIGN

Francis AYO & Johnbull OMOREGBEE

Printed and Published by Vanguard Media Limited. Vanguard Avenue, Kirikiri Canal, P.M.B. 1007, Apapa.

Enquiries Call: 08051100256 WEB:

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

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IGERIA has just s urvived yet anothe r round of strike ac tion by organized labour to protest gove rnment’s increase in the pump prices of petroleum product s raising qu e s t i on s ov e r th e pa l l iat iv e s pu rpo rt e dl y derivable thereof an d the attendant burd en. Even though the strike act ion has since been called off and government ha s succeeded in ac hieving a price increase, indi cations are that a fra me work is still not in place for the full deregulati on of the downstream petrole um sub sector. Although the minis try of petroleum res ources has invited the EFCC and set up a n umber of committees to drive the reforms in the industry, indications are that the legislati ve arm of government may n ot be satisfied with the ongoing reforms. In ‘Focus’ we present an inter view with Senator Magnus N gei Abbe, the Chairm an , Senate Committee on Petro leum Downstream. He speaks on a number of iss ues including the probe of the subsidy regime in th e downstream, proc esses, and the UNEP Report on oil spill impact in O goniland, noting his profound disappointment. We have kept faith with coverage of al l spectrum of the Nigerian en ergy chain includi ng oil; gas, feedback, insuranc e, power, insurance , finance, labour, solid mine rals, freight, tech nology and community develop ment, proving rep ortage of these sub-sectors on an unparalleled scal e. We have partnered the CWC for the 20 12 Nigeria Oil and Gas confere nce and exhibition scheduled for February as well as other oil and gas conferences and e xhibitions coming up in the course of the year. In a bid to serve you better, we are commenced st reaming live repor t s of energy news and informa tion. You can fol low us on www.sweetcrudere ports.com .


Century Energry Ad


Cover Story NIGERIA’S FUEL SUBSIDY:

A palliative, a burden

corruption tolerated in the PDPled government. A rude shock igerians woke up on New Year day to the reality of a 116 percent increase in the pump price of premium motor spirit, PMS or petrol, from N65 to N141/Litre without any warnings – making it one of the highest ever single pump price increase in Nigeria’s petroleum history. Government had through the Petroleum Products Pricing Regulatory Agency, PPPRA, announced the sudden removal of subsidy on petrol without outlining any framework for the purported deregulation of the downstream sub-sector. Interestingly, the PPPRA melted into the shadows soon after the announcement, leaving many unanswered questions and allowing innuendos and suppositions to run wild. It was a herculean task for organised labour and civil society groups to achieve a reduction in price to N97/L, representing over 49 percent increase on pre-January 1,

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Open Market Price, OMP, for kerosene when you include landing cost and margins is N162.62/L. Petrol on the other hand is N146.12/L. Automotive gas oil, AGO or diesel, which has been fully deregulated since 2003, sells for an average of N160/L. Subsidy is a reimbursement to petroleum marketers for selling below the market price, and in the year under review, the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke told the lawmakers under oath that over N250billion was paid as subsidy for kerosene alone in 2011.

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ut the reality is that apart from the NNPC outlets, there is no other outlet anywhere in Nigeria where ke ros e ne i s s old at t he subsidised price. The product sells for between N100 and N250/L depending on outlet and location. It is only in Lagos, Abuja, some states in the west and Port Harcourt that petrol is sold at the regulated price. Some faceless ‘cabals’ have been condemned for being the beneficiaries of the petrol subsidy, but government is yet to tell Nigerians who the

Some faceless ‘cabals’ have been condemned for being the beneficiaries of the petrol subsidy, but government is yet to tell Nigerians who the beneficiaries of the kerosene subsidy are

Protesters

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he outcome of the ongoing probes of subsidy payments for petrol and kerosene in Nigeria may make or mar Federal Gover nment’s d e r e g u l a t i o n p o l i c y. Indications are that government’s handling of the outcome of the probes would determine the kind of investments flow that will jump start the downstream petroleum sector. Speculations are rife regarding the outcome of the plethora of probes going on in the downstream, as almost every establishment, public or private is caught up in the web of intrigues that trail the

subsidy regime. While the National Assembly strives to unearth what went wrong to shoot up the subsidy payments from the initial N150billion in 2006 to a whopping N1.73trillion five years after, not to mention outstanding subsidy payment claims in excess of N500 billion, the Economic and Financial Crimes Commission, EFCC, has also commenced its investigation of marketers who may have been involved in the subsidy sleaze through various sharp practices. Already, reports indicate that the Lawan Farouk-led House of Representatives Committee, leading the legislative probe is under intense pressure from

the ruling People’s Democratic Party, PDP, and the Presidency over the ongoing investigation into the management of the petroleum subsidy regime.

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f carried to its logical conclusion, analysts are of the view that the subsidy probes will open up a ‘can of worms’ even worse than the one unearthed by the Central Bank of Nigeria, CBN, during the financial industry purge. The mere thought of the fallout is not only giving the Presidency the jitters, as key officials in the industry will be affected, but also making the Peoples Democratic Party, PDP, ver y uncomfortable as it demonstrates the high level of

levels and majority of Nigerians are yet to come to terms with the shock and the aftermath of the increases. About N1trillion was estimated to have been lost to the nationwide strikes that paralyzed economic activities in protest of the price hike. The new pricing Kerosene is technically referred to as House-hold kerosene, HHK and is presumably still under full subsidy at N50/L, unlike petrol, which subsidy level has been reduced. Ironically, kerosene, which is the domestic fuel for the poor Nigerians, is actually more expensive than other petroleum products. According to the PPPRA’s pricing template, and based on exchange rate of N159.76 to $1, the expected

beneficiaries of the kerosene subsidy are. Yet in addition to the subsidy, these products also attract reimbursement from the Petroleum Equalisation Fund, PEF, or bridging for haulage to far flung distances. According to the Petroleum Equalisation Fund (Management) Board, the PEFMB Act of 1973 seeks “to equalise the cost of transporting petroleum products from depots to Marketers sales outlets (filling stations).” “This is to ensure that petroleum products are sold at uniform prices throughout the country. The Fund, which derives its main source from the net surplus revenue recovered from Oil Marketing CONTINUES ON PAGE 5


Cover Story

5

Crude oil prices see mixed fortunes

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BREAKING NEWS BARBING N500 A ROOM N6000 SHOP N15,000 PURE WATER N20 Nigerian protesters

NIGERIA’S FUEL SUBSIDY:

A palliative, a burden CONTINUED FROM PAGE 4

Companies, is utilized for the reimbursement of petroleum products marketing companies for any losses sustained by them solely and exclusively as a result of sale, by them, of petroleum products at uniform prices throughout the country.” Since the January 1, subsidy slash, the PPPRA has constantly changed the pricing template, which was exclusively reported in the Vanguard. Currently, the price regulator has changed the template yet a third time, but this time around it has excluded the contentious benchmark price, which it prescribed for the pumps and the depots. The appellate has changed to regulated retail price. For both kerosene and petrol, about 20 cost elements make up their retail prices. Inflation on the rise Prices of goods and services shut to the roofs, even after the pump price reduction to N97/L, prices of consumer goods especially food items and transportation rose by between 150 and 300 percent. Although the National Bureau of Statistics, NBS, has not released the composite consumer price index, CPI for t h e m o n t h o f J a n u a r y, according to the bureau as at December, inflation rate was

10.3 percent. But the CBN Governor, Sanusi Lamido Sanusi, at the l a s t M o n e t a r y Po l i c y Committee, MPC meeting in January, noted that the removal of fuel subsidies is an upside risk to the CPI outlook. “The MPC stressed the mild rebound in inflation in recent months (10.5 per cent y/y in Oct, from 10.3 per cent y/y in Sep), but suggested that the immediate outlook for the CPI was relatively mixed and would benefit from the lagged effect of the sharp tightening in monetary policy this year. In a related development, we suspect the main risk to the inflation trajectory stems not so much from depreciation, which will be offset by increasingly positive base effects in global food and oil prices in the coming months, but from the likely removal of fuel subsidies in 2012.”

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ome states like Rivers, took the liberty after the January 1 price hike to put in place its brand of subsidy, where petrol would not sell above N137/L in order to keep the cost of transportation within the state low to the chagrin of other marketers. Through some agreements with the state branches of the I n d e p e n d e n t Pe t r o l e u m Marketers Association of Nigeria, IPMAN, and the

Prices of goods and services shut to the roofs, even after the pump price reduction to N97/L, prices of consumer goods especially food items and transportation rose by between 150 and 300 percent N a t i o n a l U n i o n o f Ro a d Transport Workers, NURTW, the State Governor, Chibuike Amaechi, announced that the government would pay for the petrol allocations to the state for IPMAN, to keep the pump prices lower than PPPRA’s prescribed amount to keep transportation costs would not exceed N100 in the Port Harcourt metropolis. It is however, not clear what became of these agreements following the reduction of petrol price to N97/L. Probes take toll on industry The pressure since the subsidy probes began is beginning to take a toll on downstream operations. One of the marketers who spoke with Sweetcrude in confidence noted, “Let the investigators do whatever they

have to do in such a way that it doesn’t weaken the system and trigger another round of acute fuel shortages.” This, he said is because marketers have had to abandon their regular businesses for the probes. “On the one hand, everybody that is somebody in the sector has been invited by the lawmakers, and on the other, the EFCC is hounding us to know who stole what subsidy money. “We no longer have time to pursue credit to run our operations, and even the banks have become more reluctant to give us credit because they no longer believe in what we are doing, since we have all been tagged ‘cabals’ that are fleecing poor Nigerians. “When you put all these together, productivity is fast dropping and pushing the CONTINUES ON PAGE 6

ONDON – Crude oil prices traded mixed on the international market, Thursday, as traders balanced ongoing Iranian tensions with stubborn concerns over the outlook for global energy demand. While New York’s main c o n t r a c t , We s t Te x a s Intermediate (WTI) crude for delivery in March, fell 35 cents to $97.26 a barrel, Brent North Sea crude for March delivery rose 43 cents to $111.99 a barrel in London morning deals. Andrey Kryuchenkov, VTB Capital analyst, said: "Crude futures were mixed over the past week as geopolitics were still underpinning Brent, while WTI remained under pressure from persistent demand concerns." The oil market slid We d n e s d a y a s n e w U S government data showed a slower pace of petroleum consumption. Encouraging economic data especially from China, where manufacturing activity expanded in January, helped the oil price early on Wednesday.

Norway's Aker awarded $4m contract in Ghana

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CCRA - Norway’s Aker Solutions has won a contract to provide well intervention services for Tullow Ghana’s Jubilee and Tano deepwater fields. Aker says the contract will fetch it revenues of about $4 million. Aker has been working with Tullow on Jubilee field since 2008, and will provide slickline and coiled tubing equipment and services under the deal. The company said the contract will last for an initial period of three years, though it also has two additional oneyear options, . Wolfgang Puennel, head of Aker's well inter vention solutions, said the deal would give the company a solid longterm outlook for their operations.


Cover Story

6

NIGERIA’S FUEL SUBSIDY:

A palliative, a burden

Tullow signs new production agreement with Uganda govt

Uganda

REMOVE CORRUPTION

NOT SUBSIDY NIGERIANS HAVE SPOKEN

CONTINUED FROM PAGE 5

industry on the down side. And if care is not taken, products scarcity is looming large.” The Probes The Senate opened the first round of probes to know what went wrong and labeled some petroleum marketers and importers s cabals who benefitted from fuel subsidy payments. Then the EFCC on the invitation of the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, went after who got what. Although the Senate probe is still pending, the House probe is well under way and may have taken the wind out of the sail of that of the Senate. The Senate Committee Chairman, Senator Magnus Abbe, noted: “There are some loose ends arising from the public hearing that members want to tidy up before we can draw conclusions on those issues. He promised that the probe would be brought to a logical conclusion For sure, the House six-day

Group of protesters

Let the investigators do whatever they have to do in such a way that it doesn’t weaken the system and trigger another round of acute fuel shortages probe was the most elucidating even as it was very dramatic. But for the seriousness of the issue, it would have been even comic. However, it was quite pathetic and shameful that all the representatives could not agree on the basic facts of a system they are all involved in.

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he Minister of Finance, D r. N g o z i O k o n j o Iweala, whose ministry is in charge of disbursing the subsidy fund quoted N1.3trillion, her petroleum ministry counterpart, Madueke said it was N1.5trillion, Sanusi the CBN governor later dropped the bomb that the value was actually N1.74trillion. Exactly how much did Nigeria pay for subsidy in 2011? But beyond the amount, the probe revealed the level of executive recklessness exhibited by some government officials in the discharge of their

duties: When did the PPPRA Board meet to decide on January 1 subsidy removal? Who approved the increase in the appropriation for subsidy from N250billion as budgeted to above NN1.7trillion? Who gave NNPC the permission to deduct its subsidy payments at source without reference to the Federation Accounts Allocation Committee, FAAC? Why did the NNPC abandon its storage facilities in favour of throughput arrangements with private depots that cost government a minimum of N3million for the period of discharge? What is the actual national daily consumption level for each of the products under subsidy? If 35 million litres is the daily requirement, how come 59

million litres was being imported? What is the refining capacity of the NNPC refineries for each of these products? There are indications that due process was thrown to the wind as long as certain pecuniary interests were protected, so much that former Finance Minister, Dr. Kalu Idika Kalu, admitted that “impunity has developed within the system and the political class is responsible for the decay.” Official responses ? The urgency of the subsidy removal made Nigerians wonder if the country was broke. But Coordinator of the Economy, Okonjo-Iweala said: “Nigeria is not broke. But if we do not take proper measures now, in the next five years, we will be going down the line. The removal of subsidy will enable the downstream sector to open up and investors will come in because investors won’t have survived and made profit at N65/L. ” ? Giving an insight into when the federal government decided to remove subsidy on petrol, CBN governor, Lamido said: “The decision to remove subsidy on petrol was effectively taken CONTINUES ON PAGE 7

KAMPALA - Tullow Oil of the United Kingdom has signed new production sharing agreements (PSAs) with the Uganda government. It is good news, coming despite the continued stalling of its planned farmout of its stakes in some oil blocks in the East African country. Tullow’s proposes a $2.9 billion sale of stakes in three blocks to China National Offshore Oil Corporation (CNOOC) and France’s Total, which has failed to materialise over disageements on contractual terms. Tullow said in a statement on Friday that it has signed PSAs with the Ugandan government for the EA-1 and Kanywataba licences in the Lake Albert Rift basin, and has also been awarded the Kingfisher production licence. "As a result of this signing, Tullow will now finalise arrangements with CNOOC and Total for completion of the farm-down and the related transfer of monies as soon as possible," the company said. A Tu l l o w s p o k e s m a n confirmed that the signing of the two PSAs for EA-1 and Kanywataba had "resolved all outstanding issues related to the farm-downs in the three blocks and all parties were now happy for the process to go through". Chief executive Aidan H e a v e y s a i d : " To d a y ' s signing is a vital step towards the development of the Lake Albert Rift basin and the oil and gas industry in Uganda and East Africa." The London-listed company’s share price rose on the news by about 55pence, or 3.7%, and was trading at £14.95 ($23.70) at 09:46 GMT.


Cover Story

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Tullow ‘Could Double Production’ in 5 Years after Ugandan Deal

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Group of protesters

NIGERIA’S FUEL SUBSIDY:

A palliative, a burden CONTINUED FROM PAGE 6

even before the elections. All economic system needs to be cleaned out and be above board. The solution is not to keep looking at short term comforts but taking difficult decisions. ” ?Allison-Madueke also confirmed that the N250billion appropriated for subsidy in 2011, was actually meant for just the first quarter, which meant that subsidy was to be removed on April 1, 2011. ?Allison-Madueke, explaining how the subsidy rose to the trillion mark said: “The dramatic change in the level of subsidy was due to increase in national demand to 35million litres/day, sometimes more, as well as increase in the price of crude on the international market, increase in population, and increase in the cost of bridging of products… our borders are very porous, and smuggling will remain a major issue as long as subsidy remains.” ?Honourable Farouk Lawan, Chairman of the House Committee leading the probe disputes the cause for the astronomical rise as he noted: “If you work out the difference between N65 and N141/L, multiply that by 35 million litres/daily, you find that the figure still falls far short of N1.5trillion. Why should Nigerians be made to pay for illegal smuggling when those responsible for manning the borders are not doing their jobs?”

The products are expected to arrive the country on schedule and should conform with products specification based on requirements set by the DPR/Standards Organisation of Nigeria, SON ?Prof Assisi Asobie clarifying why the subsidy figures will never add up said: “Due to the inconsistent data from Pipelines and Products Marketing Company, PPMC, (the commercial arm of the NNPC), we can’t determine the volume of imported products, therefore, and we can’t determine the actual cost of subsidy for the products.” ?Julius Nwagwu, representative of the Comptroller General of Customs, said: “Imported PMS does not come with Form M to Customs (as required by law), vessels importing PMS into the country are referred to as mother vessels, but they never get to port in Nigeria but are anchored offshore. So it can be offshore Cotonou, offshore Lome or wherever it is, and there are smaller vessels that pick these products to the ports, so Customs does not board or rummage these vessels.”

Subsidy regime Subsidy is the brain child of former President Olusegun Obasanjo, which became operational in March 2006. But prior to deregulation, the Obasanjo -led gover nment announced the take off of liberalisation and deregulation by September 30, 2003. The policy followed the findings of the Special Review Committee on Petroleum Supply and Distribution, popularly called Mantu Palliative Committee, set up in 2001, to look into the causes of perennial products scarcity. After a nationwide tour of downstream facilities, the committee, among others, called for the setting up the Petroleum Stabilisation Fund, later tagged the Petroleum Support Fund, PSF, which was finally agreed to by Obasanjo on October 1, 2005, during his

Independence Day broadcast. The then Chairman of PPPRA, Chief Rasheed Gbadamosi, clarifying how the facility will be funded said: “The PSF shall be financed from the following sources, namely: All tiers of Government – Federal, States and Local. “Accruals realised during the period of over recovery (over recovery here refers to the period when the PPPRA recommended price is higher than the market determined price).” He listed the guidelines eligibility to the fund to include: An importer should be an Oil Marketing Company registered with the Corporate Affairs Commission (CAC). A Claimant/Beneficiary is expected to possess the following: Proof of Ownership of storage facilities with a minimum storage capacity of 5,000 metric tonnes for the particular product as well as dispensing facilities (retail outlet network). Department of Petroleum Re s o u r c e s ( D P R ) i m p o r t permits. Ability to finance a minimum cargo size of 5000 MT of products under the Fund. The products are expected to arrive the country on schedule and should conform with products specification based on requirements set by the DPR/Standards Organisation of Nigeria, SON. In view of the revelations from the probes, in many cases, all of these criteria were ignored, and the PSF which was meant to be a palliative, is now a big burden for government and Nigerians.

he news that the Ugandan government has finally awarded the U.K. oil firm three production licenses brings “extra flexibility” to its balance sheet Oil industry analysts welcomed news from U.K. firm Tullow Oil Friday that it had finally been awarded three production licenses by the Ugandan government, with some who follow the company suggesting that Tu l l o w c o u l d d o u b l e production during the next five years. New production sharing agreements (PSAs) cover the EA-1 and Kanywataba licenses in the Lake Albert Rift Basin, while Tullow has also been awarded the Kingfisher production license. Tullow watchers expect the deal to ultimately unlock $10 billion worth of investments, which include Uganda’s first refinery and a pipeline to the Indian Ocean, in the country’s nascent oil sector. Ugandan geologists have indicated that there could be as much as six billion barrels of oil in the country. The deal takes any funding concerns that Tullow might have “off the table”, according to analysts at Bank of America Merrill Lynch. “Cr ucially, closing the Uganda deal is key to [bringing] extra flexibility to the balance sheet, particularly as TLW has embarked on a US $2 billion capex program this year. Concerns over TLW funding position now prove completely overstated and we believe that this news should allow the market to focus on the strong fundamentals that the company offers,” said the investment bank. BoAML added: “We believe that the development of the Tweneboa/Enyenra (TEN) complex along with new phases of the Jubilee field and Uganda could easily double TLW’s production over the next five years.” “This will further ease Tullow’s balance sheet and gives them the go-ahead to finally start producing from the basin,” said Anish Kapadia, an oil analyst at Tudor Pickering Holt.


Oil Subsidy: EFCC grills petroleum importers, marketers

igerian CONTENT INITIATIVE Dr. Ibilola Amao

Empowering a national petroleum regulatory body (NPRB) for value Addition

Oscarline ONWUEMENYI

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BUJA As part of its investigations into management of the petroleum subsidy in the country, the Economic and Financial Crimes Commission, EFCC, has interrogated more than twenty major oil importers and marketers in respect to their transactions with government over the past few years. Representatives of the importers, including most of the inter national oil and gas companies operating in the country, were invited over the past week to report to the Commission's headquarters in Abuja to answer questions over their roles in the importation and distribution of petroleum products. The Acting Head of Media and Publicity in the EFCC, Mr. Wilson Uwujaren, who confirmed the exercise to our correspondent in Abuja, also disclosed plans by the Commission to contact relevant international agencies and banks abroad in an effort properly assess the involvement of shipping agencies, vessels and refineries. According to him, the investigation would cover all companies and agencies involved in importing, refining, shipping and distribution of products. Uwujaren noted, however, that no arrests have been made yet pending the completion of a full investigation and review of the subsidy management over the years. The latest action by the EFCC is in line with the directive by the Federal Government for the immediate review and investigation into all payments made in respect of subsidies on Premium Motor Spirit (PMS) and kerosene. Last week, operatives of the Commission swooped on the Petroleum Products Pricing and Regulatory Agency, PPPRA, and made away with files and documents relating to the subsidy process. PPPRA is the agency saddled with the responsibility of ensuring petroleum products availability, moderating price volatility, as well as regulating activities of operators in the petroleum industry. Uwujaren explained that the EFCC would also visit other government agencies involved

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Mr. Lamorde in the management of the nation's oil and gas resources. Uwujaren noted that EFCC operatives visited the PPPRA “in line with the invitation from the Minister of Petroleum Resources to investigate the process of subsidy payments on petroleum products. This is only the first step in our investigation. “We shall also be visiting other agencies and corporations that manage oil and gas resources on behalf of the country, as well as the marketers of the petroleum products.” He, however, would not confirm if any arrests were made so far by the Commission, stressing that the operation at PPPRA was only the first leg of “a long and rigorous investigation into the activities of these agencies that regulate petroleum products production and distribution in the country.” As part of the outcome of negotiations by the Federal Government and organized labour over the removal of s u b s i d y, t h e g o v e r n m e n t promised to clamp down on alleged acts of corruption within the petroleum industry. This led to approval by President Goodluck Jonathan for the anti-graft agency to review all payments made in respect of subsidies on PMS and kerosene, and to take all necessary steps prosecute any incidence of malfeasance, fraud, overinvoicing, and related illegalities in an open and transparent manner. According to the letter dated January 12, 2012, addressed to the Acting Chairman of EFCC, Mr. Ibrahim Lamorde, and signed by the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, the Commission is to “immediately review and investigate all

payments made in respect of subsidies checked against actual importations and to take all necessary steps to prosecute any persons involved in any incidence of malfeasance, fraud, over-payments and related illegalities.” It noted that the Federal Government has over the years run a subsidy regime in petroleum imports where the difference between the cost of importation and the pump price is paid for by the government to pre-approved oil marketing companies and importers. “Over the years, this bill has grown exponentially to unsustainable levels,” AlisonMadueke observed, adding that as Petroleum Minister, she has been extremely concerned with the figures. She added that, “Following the recent transfer of the PPPRA to my ministry last year, I have moved quickly to change management and inaugurate a comprehensive reform process which include drastic cuts in the list of importers, review of payments and procedures, as well as massive redeployment of staff within the agency.” The Minister further noted that she has set up a unit within her Ministry to be headed by an independent auditor to review the KPMG and other audit reports on the Nigerian National Petroleum Corporation, NNPC, and other parastatals and to immediately begin implementation of their findings. “I am en-paneling another unit in my office to begin a

he rally against the removal of subsidies has not solved the root cause of problems in the Nigerian Oil and Gas Industry which is primarily corruption and the over bloated cost of governance. If an all encompassing National Petroleum Regulator Body (NPRB) is created and empowered as a regulator with a target to achieve a specified % return on investment vis-à-vis the value of our natural resources (oil and gas) through upstream, midstream and downstream activities, Nigeria would move forward. The NPRD would have to tackle the following issues: 1.lack of an auditable regulatory process for the supply of goods and services, especially in the midstream and downstream sectors 2.Violation of the Public Procurement Act in the purchase of goods and services 3.Accountability and transparency, especially in public service. What would this mean to the industry? 1.Adequate funding will be required for the NPRD without recourse to NNPC Management, the Minister and the Presidency 2.Publishing of Annual Audited Accounts would become mandatory 3.Publishing of Work Programmes of Asset Holders 4.Assessment of players, their facilities and activities to ensure value added and Nigerian Content. The NPRD would operate a National Data Repository (NDR) System that would be live, active and accessible from anywhere in the world if investors are to take any meaningful interest in the Nigerian Oil and Gas Industry. Information on assets (Pipelines, Facilities, Concessions, Oil and Gas Wells, Oil and Gas Fields as well as Exploration and Production Data), fiscal and tax regimes must be readily available to investors. Production, sale and refined volumes as well as imported products should be known whilst the purchased, delivered and dispensed volumes at every filling station in Nigeria would be tracked, monitored and published. From the national budget and that of NNPC, the Central banks disbursements to the major and minor marketers through PPPRA, PPMC and NNPC we would be much closer to understanding where there are leakages, what the short falls are and if Nigeria needs more refineries, where they should be strategically located to meet demand realistically. Whilst Clause 2 of the NOGICD Act states that:” All regulatory authorities (DPR & PPRA inclusive), operators, contractors, subcontractors, alliance partners and entities involved in ANY project, operation, activity or transaction (buying of finished products) in the Nigerian oil and gas industry shall consider Nigerian Content as an important element of their overall project development and management philosophy for execution”, this is not the case in the downstream of the Nigerian petroleum industry. The Act has failed to capture the midstream and downstream sectors functionally. PPPRA has failed in delivering Nigerian Content (Value Addition) and many of the goals and objectives captured its original mission

comprehensive review of the management and controls within all parastatals and in the Ministry o f Pe t r o l e u m R e s o u r c e s , including but not limited to NNPC, PPPRA and DPR.

A fully empowered and all encompassing NPRD would through collaboration with NCDMB be the best regulator of the activities of the IOCs, NOCs, Independents and Indigenous contractors through stakeholder evaluation, assessment and monitoring programmes that are tied to license renewal.


Oil SUPPORT LOCAL BUSINESS

These are significant achievements we must continue to build on. In the same vein, Yulong steel, a Chinese steel company recently made firm commitment to establish a 250,000 MT capacity Longitudinal Submerged Arc w e l d e d ( L S AW ) m i l l i n Yenegoa, while Vigeo Steel is also taking similar steps to establish a 200,000MT capacity HSAW mill in Abeokuta. Apart from the potential to create over 10,000 direct and ancillary jobs locally, Nigeria stands to retain $700 million that would otherwise be exported to foreign facilities in the absence of these facilities. It is our strong aspiration to prepare these facilities that will supply a substantial proportion of the pipes to be used in the Gas infrastructure projects from Nigeria. Therefore we must support the efforts of the investors comprehensively and without restraint to ensure that the pipemills are completed by 2014.

Nigerian Oil Workers

Nigeria sees local content prospects at SCC pipe mill Oscarline ONWUEMENYI

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ollowing the signing of the Nigerian Oil and Gas Industry Content Act in 2010, the Federal government issued a set of medium term targets to guide the Nigerian Content Development & Monitoring Board (NCDMB) on implementation priorities. These targets covered incountry spend, capacity building, employment generation, indigenous ownership of marine vessels, community enlightenment and participation, but one of the cardinal mandates is the establishment of 3 to 4 modern pipe mills in Nigeria to service the oil and gas industry. The Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke had explained

that motive for the mandate was the conviction that upcoming industry projects, especially related to field development, Gas Master Plan and Gas Revolution provide adequate pedestals on which investments in new local pipe mills could be based. Beyond this, she added, is the fact that over 10,000 direct and indirect jobs, 3000 training opportunities per annum and hundreds of suppliers the policy will spawn brings immense benefits to all stakeholders. Therefore, at a recent visit to the SCC Pipe Mill at the outskirts of the Federal Capital Territory, Abuja, the Minister could not hide her joy at the hitech pipe-making process going on at the place. She noted that she was “very pleased to be part of this high-level industry team visiting SCC where a cumulative order from Shell,

Local fabrication tonnage has also risen by 40% to 54,000 MT per annum over the same period

Chevron and Agip totaling over 100km of large diameter steel pipe is being manufactured for use in the Nigerian Oil and Gas industry.”

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h e v i g o r o u s implementation National Content and the high level of collaboration with the NCDMB by stakeholders, and general adherence to the guidelines issued by the board has led to success related to Domiciliation of Equipment Component Manufacturing, Expatriate Quota management, Utilization of Indigenous Marine Vessels,

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Indigenous Rig Ownership Scheme and other capacity development interventions of the Board. M o r e r e m a r k a b l y, t h e industry in less than 20 months is witnessing positive results from these NCDMB interventions, growing interest of OEMs and investors to set up facilities in Nigeria, the rising market share of indigenous vessel owners which had risen from less than $200 million in 2009 to $1billion; Local fabrication tonnage has also risen by 40% to 54,000 MT per annum over the same period.

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lison-Madueke ex p l a i n e d t h a t t h e significance of the visit in highlighting this unprecedented order arising from the implementation of the Nigerian Content Act cannot be overemphasized. “In fact, it is important to state that this is the first of a series of facility visits which will take us, as an industr y group, to other locations in L agos, Port Harcourt and Warri where similar breakthroughs are manifesting in the domiciliation of Oil and Gas operations,” she stated. On the Minister’s entourage were the top notch of the industry, including some of the heads of multi-national oil and gas companies operating in the country, which underscores government’s commitment to the full implementation of the Nigerian Content Act and industry support for companies that invest in establishment of targeted facilities locally where the Nigerian Content scope can be performed satisfactorily. One of the main features under the implementation the local content framework is a sufficient provision to protect investments in facilities because the Act does not allow the industry to export work that can be done in Nigeria except it can be clearly demonstrated to the satisfaction of the NCDMB that such capacity has been exhausted.


Oil

Seplat boosts operations with US$ 15M Invests in alternative crude vessel

An Oil Vessle

10 Pacific Scirocco Spins Bit Offshore Nigeria

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acific Drilling S.A. announced Tuesday that its ultra-deepwater drillship the Pacific Scirocco (UDW drillship) commenced operations in Nigeria on December 31, 2011. The drillship is contracted for an initial one-year term to a subsidiary of Total S.A. The contract further provides for options, to be exercised at the client’s discretion, which could result in up to four additional years of contract term. The Pacific Scirocco is capable of operating in water depths of up to 12,000 feet and drilling wells 40,000 feet deep. Wi t h i t s b e s t - i n - c l a s s drillships and highly experienced team, Pacific Drilling is a fast growing company that is committed to becoming the industry ’s preferred ultra-deepwater drilling contractor. Pacific Drilling’s fleet of six ultradeepwater drillships will represent one of the youngest and most technologically advanced fleets in the world.

Yemie ADEOYE

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N furtherance of moves aimed at b o o s t i n g i t s operations and ensuring the prompt evacuation of its hydrocarbon Seplat Petroleum Development Company has concluded plans to invest the sum of 15 million dollars in its operations on OML’s 4, 38 and 41. This is coming on the heels of revelations that the 36,500 barrels production capacity of the 3 wells is expected to grow to 50,000 bpd by year end 2012. In view of this Seplat has signed an agreement with Shebah exploration and Production Ltd and Allenne British Virgin Islands Ltd for the possible leasing or acquisition of the “Trinity Spirit” floating oil production, storage and offloading unit (FPSO). Seplat paid Allenne British Virgin Islands Limited US$15 million refundable deposit.

In Nigeria the group, through Seplat, has only one major relationship which is with Shell trading

This deposit is repayable by Allene to Seplat on demand if Seplat decides not to buy the FPSO or decides not to lease the FPSO or should it decide afterwards not to use the FPSO in transporting, processing or delivering its oil production.

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he lease or acquisition of the Trinity Spirit FPSO would therefore provide support of the Trinity Spirit FPSO would therefore provide Seplat with an alternative means of

transporting its hydrocarbons to the SPDC Nigeria pipeline. The vessel, which can handle 22,000 bpd and store 2 million barrels of oil, is currently located at Shebah’s Ukpokiti field in OML 108.” A representative of Seplat in Nigeria who spoke with Sweetcrude on the condition of anonymity noted that the 15 million dollars deposit made by Seplat to Allenne British virgin Islands Limited is repayable by Allenne to Seplat on demand if Seplat decides not to buy the FPSO,

Seplat decides not to lease the FPSO or Seplat decides not to use the FPSO in transporting, processing or delivering its oil production. The leasing or acquisition of the Trinity Spirit FPSO would therefore provide Seplat with an alternative means of transporting its hydrocarbons to the SPCC Nigeria pipeline. Seplat had entered into an initial agreement with Shell Petroleum Development Company (SPDC) for the purpose of crude carrying from the aforementioned oil wells even as there indications of a Shell possible disengagement from the agreement following stipulations that from January 1, 2013 it will only accept crude that has maximum water content of 0.5 percent.

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eplat’s foreign partners Maurice and Prom however placed stipulations

in a positive light when it said in a prospectus that water separation facilities on its assets will not be ready by that deadline so Shell will have the right to terminate the agreement if it so desires. This, according to some industry sources must have necessitated the MOU signed some few weeks ago by with Shebah which covers an alternative export route via the Trinity Spirit FPSO. However, the Seplat’s representative who spoke with Sweetcrudemade it clear “In Nigeria the group, through Seplat, has only one major relationship which is with Shell trading. GivenShell’s credit rating, the Company considers there is no customer risk. Apart from this contract and others signed in the course of its normal activities, the Company has not entered into any significant agreements” he enthused.


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Kaduna Refinery

Kaduna Refinery is viable NNPC insists

…Explains Crude oil Importation Yemie ADEOYE

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H E Management of the Nigerian N a t i o n a l Pe t r o l e u m Corporation, NNPC, weekend debunked claims that the 32 years old Kaduna refinery was moribund and that government was losing N12 billion annually on idle staff of the company. T h e r e h a s b e e n insinuations among other, that the plant is now a conduit pipe through which the federal government losses over N700 billion annually in projected revenue This came on the heels of an oversight visit to the Kaduna Refinery by the Senate Committee on Petroleum Resources (Downstream) earlier last week which allegedly portrayed the plant as a drain pipe. Group General Manager, Group Public Affairs Division

of the Corporation, Dr. Levi Ajuonuma, in a statement yesterday in Abuja, said Kaduna Refining and Petrochemicals Company, KPRC, was a functional and viable Strategic Business Unit of the Corporation contributing to NNPC’s operations in the oil and gas industry in Nigeria. Dr. Ajuonuma informed that though Kaduna Refinery had undergone a quasi turn around maintenance two years ago by Nigerian engineers which was generally believed to be inadequate for the refinery, credit must be given to the local engineers for running the refinery at 60 percent installed production capacity amid artificially induced challenge of incessant pipeline vandalism. ”Yes KRPC has a lot of challenges owing primarily to the neglect of the past. However in the last several years the fuel plant has operated steadily at 60

percent throughput translating to a daily production of 1.5 million liters of PMS, 1.4 million liters of AGO and 0.65 million liters of kerosene, in addition to other products. The biggest problem however is crude oil supply which has become unreliable due to rampant

Alison Madueke been converted to a container-making factory, Dr Ajuonuma explained: “This is totally misleading. The fact is that Kaduna Refinery is the only plant among the nation’s refineries fitted with a tin and drum manufacturing section designed to package petroleum products for

It is however important to point out that every barrel of crude oil received and processed is accounted for and we all know that the PPMC at various times has provided detailed accounts of how the imported crude to the refinery is handled pipeline breaks which on many occasions necessitated the shutdown of the refinery,” Dr. Ajuonuma stated. On the insinuation that a huge part of the plant has

distribution to the rural areas. In addition, the plant produces drums for packaging lubricating oil for marketing companies like Oando, AP and Total Nigeria

Plc. The point needs to be made, however, that this tin and drum plant has been there right from inception of KRPC in 1980.” Also on the issue of importation of crude, Dr. Ajuonuma stated: “There is really nothing strange about that and this only applies to Kaduna Refinery. By design the plant is configured to receive both local light crude and heavy crude which is usually imported from Venezuela, Russia, Iran and some other countries under a swap arrangement to help KRPC in the production of lubricants and asphalts which cannot be achieved using our local crude”. He stated that the 110 barrels per day Kaduna Refinery has the capacity to receive 60,000 barrels of local crude and 50,000 barrels of heavy crude imported and pumped through the Warri Escravos crude pipeline. Dr. Ajuonuma dismissed reports that KRPC collects crude oil from PPMC “ without proper costing” and stated that the business model KRPC operates is such that it receives crude oil from PPMC, refines it and hands over the products to PPMC for marketing while the refinery is funded based on cost recovery. “It is however important to point out that every barrel of crude oil received and processed is accounted for and we all know that the PPMC at various times has provided detailed accounts of how the imported crude to the refinery is handled,” he said. He appealed to the National Assembly to collaborate with the Corporation in its bid to increase local refining capacity by introducing apt legislation which will deter the incidence of pipeline vandalism, adding that no refinery will work if the pipelines are not secured. “The NNPC has formulated a workable schedule of activities to revamp our traditional refineries and also boost local refining capacity via the construction of three Greenfield refineries in collaboration with some Chinese investors but all that may not yield the desired effect if our vital crude supply and product evacuation pipelines remain insecure” he enthused.


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Local Content: GEMS calls for close look on technical competence

Chevron: Funiwa fire burning at diminished rate

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hevron Corporation has reported that the fire burning at the Funiwa Deep 1A well offshore Nigeria has diminished. The fire, which broke out on January16 , killed two workers and caused substantial damage to the jackup KS Endeavour and liftboat Mako. One hundred and fifty two of the 154 workers were on board the rig and liftboat when the fire started were evacuated. Chevron subsidiary Chevron Nigeria Ltd. will drill two relief wells to control the Funiwa Deep 1A well. Transocean and Noble Drilling Corp. will provide the rigs, which are on loan from ExxonMobil, Eni and the Nigerian National Petroleum Corp. Drilling is expected to begin in the next seven to 10 days.

Weldering

Clara NWACHUKWU

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ndigenous oil and gas s e r v i c e c o m p a n y, GEMS Global Re s o u r c e s N i g e r i a Limited, has called on the Nigerian Content Management Board, NCMB, to thoroughly scrutinise the competence of Nigerian companies bidding for jobs in the industry. The company argued that technical capacity is a major weakness among Nigerian companies, and an area the NCMB should beef up skills. The Business Development Manager, GEMS Global, Mr. Tunde Alabi, in an exclusive c h a t w i t h Va n g u a r d Newspapers during the just concluded Offshore West Africa, OWA 2012, noted that many indigenous companies were still struggling to acquire the requisite technical competence to compete effectively in the industry. The Nigerian Content Act 2010, was enacted to give Nigerian companies more

opportunities to participate in oil and gas projects to add greater value for Nigerians while also increasing the industry’s contributions to the country ’s Gross Domestic Product, GDP. He also cited funding as another major challenge faced by indigenous operators, particularly those engaged in specialised ser vices like GEMS. He elaborated, “GEMS is a survey company, we are into geotechnical and geophysical services, so it has been challenging because we operate in a specialised category that needs a lot of capital investment. “In our kind of job you need vessels to do them; vessels are capital intensive. A good geotechnical vessel will cost between $15 and 20 million, and most Nigerian banks are not ready to invest in an industry that they don’t quite know much about. It’s not that they don’t have the money but they don’t really know about the sector.” Alabi revealed that in such

In our kind of job you need vessels to do them; vessels are capital intensive

instances, the company ’s technical partners, GEMS International Group Companies, came to the rescue, which has made the job worthwhile. In view of its brilliant execution of projects, since 2003, when GEMS came to Nigeria, the global group has seen good returns on their investment to continue to justify greater investments. He said that such confidence from the technical partners is one of the high points for the company, which has since expanded from very humble beginnings to become very big to become the number two

company in its area of specialisation. Furthermore, he said the company now owns a number of facilities including “a cooperate head office in Lagos, got our fabrication yard in Apapa, and we have got a mobilisation site in PortHarcourt.” He argued that GEMS is a truly indigenous company, one of the big advocates of the local content policy, adding that part of the understanding between it and its technical partners is on technology transfer through constant training of Nigerians to take charge and leverage on the local content law.

“This has helped our business because now we know that as a fully Nigerian company, we are now being challenged to be more technically competent, and to really take charge of the industry as it were. Instead of leveraging more on our technical partners, we encourage them to do a technological transfer to Nigeria, so that when we win jobs we don’t have to call upon them, we call on our Nigerian crew to execute the job so that the investment is retained here and help to develop the country,” he added. Going forward, Alabi said he expected more Nigerian companies to also take up the challenge of the local content development and stopped cutting corners. “I want to see companies look more ahead into the future. I don’t want a Nigerian company that will come around do a job and realize a profit of let’s say $500,000 or $ million and they will go all about throwing parties all around.”


Oil

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EMVAL HOLDINGS: YOUR RELIABLE BUSINESS PARTNER

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hen your vision is to be a leading organization in your chosen field, by constantly seeking out opportunities, where your capabilities will create superior value, and you are on a mission to have your employees contribute to the long term health of the institution by living out your values daily, adhering to ethically sound practices in service delivery, you are sure heading to the heights. If your guiding principles over the years include: integrity; teamwork; dedication and, a commitment to the creation of real value, your business partners will continue to patronize you. Consider the fact that, your competition is multiplying daily, but, you are still a market leader in your services. That is the summary of the success story that EMVAL today represents. EMVAL HOLDINGS LIMITED, was incorporated in 2005, to consolidate all the business activities hitherto provided by EMVAL NIGERIA LIMITED, with a focus on building long-term value creation and competitive advantages for the services it provides. The progenitor itself, EMVAL NIGERIA LIMITED, was incorporated in June 1983 as a business organization. It started out with providing Well-Head Maintenance in 1985 for Shell Petroleum Development Company of Nigeria [SPDC], Western Division. Prior to this, EMVAL had been involved in the provision of water utility & borehole drilling services. 28 years after, the company has continued to strengthen its capabilities in the provision of well head services, while also extending its operations to providing Slickline Services; Valve & Instrumentation Services; Downhole Equipment Supply & Installations; Artificial Lift Services and Electric Wireline Services. In all of these, EMVAL employees, bring a disciplined, strategic approach to providing these services, so, they strive for continuous improvement in compliance and performance, not forgetting that management expects that, the EMVAL employee

Today, EMVAL is in alliance with Qatar-based DELTA DOHA, a reputable wellhead manufacturer, to be able to supply and install OEM vavles, wellheads, production trees and accessories to E&P companies in the West African sub-region. The unit that offers Slickline Services, began in 1991, and is currently operated by JD ENERGY SERVICES LTD., a subsidiary of EMVAL HOLDINGS LIMITED. This subsidiary, boasts of over 100 years combined experience as a leading slickline services provider in Nigeria, and is in a strategic partnership with PIONEER PETROTECH SERVICES of Canada and Micro Smart Inc. These companies provide top quality electronic memory pressure gauges that are durable and reliable with simple operational procedures and an industry leading electronic downhole shut-in tool respectively. EMVAL PETROLEUM SERVICES, is the business division in charge of Electric Wireline Line Services. With this additional business offering, EMVAL clients can efficiently acquire critical data and make informed decisions about the production of each formation. It also offers full service cased-hole wireline units complemented by a full range of downhole equipment and can also provide quality data interpretation services. For artificial lift services, EMVAL is in alliance with BST lift of Ventura, California, and markets their variety of Gas Lift Equipment. These equipment are available for use in continuous flow and intermittent flow applications and with tubing retrievable [conventional] and wireline retrievable deployment, as well as offering help to clients to maximize reservoir recovery and optimize field production through the use of specialized softwares. A fully Nigerian-owned company, EMVAL, also provides Well Instrumentation Services like control panel design; emergency shut down systems design; wellhead safety control systems upgrade; installation & commissioning and, flow station process equipment installation and upgrade.

Atlas Copco CMT & CT Nigeria Ltd was incorporated in 2009 and is a Customer Centre within the Atlas Copco Group. Atlas Copco offers compressed air solutions for Oil & Gas Industry, like oil free screw air compressors for instrument air applications, centrifugal air or gas compressors for process application, portable air compressors for piping applications, fuel gas boosters and reciprocating gas compressors for flow stations, skid compressors for offshore. When it comes to Oil & Gas sector, Refineries & Petrochemical industry we offer complete Air/Gas & Gas purification products.

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Atlas Copco CMT & CT Nigeria Ltd. Plot 734A, Idu Industrial Area, Visit Atlas Copco at: atlascopco.com Federal Capital Territory, Abuja, Nigeria E-mail: mastersofair@ng.atlascopco.com Office: +234 (0) 809 8627 194

tlas Copco is an industrial group with world leading positions with innovative products and services. The company was founded in 1873, is based in Stockholm, Sweden, and has a global reach spanning more than 170 countries. In 2010, Atlas Copco had about 33 000 employees and revenues of BSEK 70 (BEUR 7.3).

We offer innovative, state of the art, flexible compressor solution, meeting customerexpectations for optimum energy cost, lowest operating and maintenance costs, with highest reliability, maximum up time, ease-of-use and integration into existing facility. We also offer Rental Air, Gas and Energy solutions for O&G production sites, Refineries. Oil free portable compressors, ZONE 2 compressors and boosters, Rig Safe compressors, Nitrogen Units, refinery generators‌ Count on us for our expertise and experience in your industry‌


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SPECIAL REPORT SECTION

LY NIGERIAN: U R

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i ge r i a n / L o c a l C o n t e n t , a s envisaged, means the development of local skills, technology transfer, the use of local manpower, and local manufacturing. Oil exploration began in the Niger Delta region of Nigeria as far back as 1933, but was commercially exploited in 1956. Over the years, Nigerian oil workers have been learning with the guidance of International Oil Companies [IOCs], and are ready to take over the management of the Nigeria oil & gas industry. As the capacity building continued, little progress was recorded with equipment manufacturing, repairs, maintenance, engineering and design, which were done in foreign countries.

ser vic profits.

is done in-country; expatriates are still doing jobs that local expertise can do better. There are challenges littering the landscape. Most local industry operators do not have kind words for the Government regulatory agencies, whom they accuse of not being sincere in carrying out their responsibilities. Financing has been a major challenge to local operators, who cannot match their foreign counterparts, because of their access to cheap facilities. In fact, a local operator described Nigerian bankers as being naïve. The bankers too, have uncomplimentary words for their Nigerian clients, accusing them of deliberately not employing the es of financial advisors, to be able to make more

There had been agitations from the Nigerian professionals, for them to be given 'their due'. The agitations received a shot in the arm some time in October 1996, when the then Minister of Petroleum Resources, Dan Etete, speakin g at GLOBESTAR fabrication yard in Warri, Delta State declared, “from now, foreign suppliers will have to bid and supply through a local subsidiary or agent”.

There are issues straddling the sub-sector. The OICs decry the number of times contracts have been given to local companies, and they fail to deliver, by either not meeting the deadlines, or completely abandoning the job after being remunerated remember the PH based company, who was paid millions in Dollars, only for them to abandon the contract]. Issues arise, where well-remunerated service companies, do not pay their staff well, thereby leaving the CEO as the only 'winner'.

Nigerian professionals were leaving their international jobs and multi-national employment locally to join the fray of kick-starting, a truly Nigerian company. The Federal Government was drumming it, but, in earnest, there was no law to back the talk. I remember Port Harcourt, in 2006, where a Nigerian who left his employment in the Americas, brought his entire savings, and founded an oil servicing concern, only to realize that, the OICs were not ready for people of his ilk. He described the action of the OICs as being 'clannish.'

Amongst these tales of woes are Nigerian companies who have carved a niche for themselves, over the years. Last October, at an industry meet, a bank official praised a local company who was financially disciplined, the same company finished a contract a month ahead of schedule, and same was acknowledged by the Multi-national principal.

Even though most industry stakeholders will accord Olusegun Obasanjo, [Nigeria's President, 1999-2003], with the breakthrough in Local Content quest, it was Nigeria's current President, Goodluck E. Jonathan, then an Acting President, who on April 22, 2010, formalized this dream, when he signed into law, the Nigerian Content Act. The Bill provides that IOCs operating in Nigeria must domicile at least 10% of its profit in Nigerian banks, so that these banks will have more money to fund investments in the sector. Another major feature is that, all contracts in this sector should cede 1% into a special fund, for the purpose of building capacity. The Nigerian Content law is about promoting value addition to the local economy, increase local participation, build local capacity on the back of on-going projects, and generally, increase linkage to other sectors of the National economy. Sounds good? Yes. But, some Nigerians are still running portfolio business concerns, sitting on the board of foreign companies, whose Nigerianess is being registered in Nigeria, and with a Nigerian name as Chairman. No work

Local companies are working hard to achieve the desired 80%-20% target. Practitioners like Kayode Thomas, CEO of Bell Oil & Gas Limited, whose company is soon to be a decade in practice, is an exponent of technology transfer. Both him and Henry Ojogho, EVC of Broron Group, believe in bringing in expatriates to train the local work force, who will in turn, become trainers. The success stories are increasing daily. A Nigerian company, who has expertise for a particular industry need, confessed that , the company has a deluge of requests that they cannot meet. A professional who lives overseas, but, has a business interest in Nigeria, believes that, in black Africa, Nigeria has an abundance of competent professionals. Local companies are offering specialized services formerly done by multi-nationals. Companies hitherto filled with foreign contents have made concerted efforts to be local, since, this is the way to go. The erstwhile lip service, has given way to real local content-local fabrication yards, capacity building [ it is a known fact that 70% of pilots operating in Nigeria today, are graduates of the BRISTOW flying school, who were trained in the USA], only the financial institutions are being awaited, to blend. Foreign manufacturing companies like Vallourec Mannessman Oil & Gas Nigeria, specialists in oil & gas industry valves, have a local manufacturing facility in Nigeria.

These companies who have made strides towards the full realization of the Local Content dream, are the ones we are celebrating in this edition. Beginning from this February, 2012, SWEETCRUDE SWEETCRUDE,, begins the TRULLY NIGERIAN series, and will cap it up with our May, 2012 edition commemorating the OFFSHORE TECHNOLOGY CONFERENCE [OTC] [OTC],, holding in Houston, Texas, USA in early May, 2012.


Shell Ad


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Focus

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UNEP REPORT ON OGONI:

‘I’ve been very disappointed’ – Senator Abbe

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enator Magnus Ngei Abbe, Chairman of the Senate Committee on Petroleum (downstream) is the erstwhile Secretary to the Rivers state government, a one-time commissioner of information and member of the state house of assembly. To say his wealth of experience can only add value to the 7thSenate will be stating the facts as is. In this interview with Hector Igbikiowubo, Editor, Sweetcrude, he speaks on a wide range of issues including the ongoing probe of the subsidy regime in the downstream petroleum subsector, the PIB and the UNEP Report on Ogoni and the impact of oil spills. He laments the perceived insensitivity of government personnel regarding oil spill in the Niger Delta, noting that ‘I am very, very disappointed’.

Excerpts: Senator Magnus Abbe, we have witnessed some measure of furore regarding the removal of petroleum subsidy or otherwise. Can you bring us up to speed on the work of your committee? The impression out there is that the work of the committee may have been overtaken by events, so we would like to know where you are at this moment and where you intend to go from here.

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irst let me thank you for your interest in the affairs of our country and the work you have been doing with this magazine looking at the oil and gas industry. It is not true that the work of the work of the committee has been overtaken by events. I’ve heard people say that after all the EFCC is already investigating, the subsidy issue has been resolved, whatever, whatever not. But the truth of the matter is that the EFCC looking into the allegations doesn’t in any way affect the work of the committee. At the time we started the investigation we had actually invited the EFCC to be part of the process so that whatever

information that is made available to the committee would also be made available to them because we believed that the Nigerian people would like to see a forensic examination of some of these issues and some people didn’t think that the Senate has capacity to do that. So that doesn’t affect the work of the committee. The resolution between the federal government and organised labour actually means that subsidy is still in place and so any suggestion or contribution that can be made to make the management of the subsidy scheme more transparent, more accountable and more organised or cost realistic would actually be in the interest of the Nigerian people and the Nigerian economy. This actually makes the work of the committee even more relevant than it was at the beginning.

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o where are we at the moment with the probe and how soon do you expect to round up your investigation? Well actually, were we are now is that we still have a few issues we want to resolve

Senator Abbe

Ogoniland

We are aware that the House of representatives is carrying out a concurrent investigation, but the Senate would still go ahead and conclude its own activity

with the PPPRA and then we also want to go on some site visits to see some of the facilities of the PPMC and more importantly, we also want to talk with some of the companies that are involved with the subsidy and this is for two reasons – we want to give them an opportunity to respond to issues in the public domain and the other is to ask some of the questions that have been agitating the minds of members of the committee. We are aware that the house of representatives is carrying out a concurrent investigation, but the Senate

would still go ahead and conclude its own activity. Do we expect at the conclusion of your investigation to see any legislation or resolutions regarding the way and manner the industry is governed especially as it affects subsidy or no subsidy? here are two issues involved in this subsidy or no subsidy and as a person I want to clarify my own position. I am not for subsidy or no subsidy, I am for deregulation of the downstream sector and those are not exactly the same

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thing. Deregulation of course connotes that there will be no subsidy but absence of subsidy does not necessarily mean deregulation. So what I would like to see is a total deregulation of the downstream sector in which case government processes that are involved in the sector are not discretionary and so cannot be subject to abuse and then those participating in the sector would do so in an open and visibly transparent manner. In other words you would not have collusion, price fixing and all the kind of dirty things that can actually make the absence of subsidy a burden on the citizens. So, deregulation is what I would like to see in the downstream sector. If the government actually has funds and they want to use those funds to support the industry or the people within the industry, there are ways that such contributions can be made so that it doesn’t distort the market and does not allow investments and investor participation. Those are my personal views. Talking on the broader corporate and national level, definitely there would be some form of legislation in the oil industry. CONTINUES ON PAGE 17


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CONTINUED FROM PAGE 16

The Petroleum Industry Bill presupposes this and of course would create deregulation by the very nature of what it is intended to do. Whatever activities that are ongoing now in terms of this probe and what it is intended to do would definitely impact on how the PIB would be viewed by the Senate and how it would be worked on. Some of those suggestions and whatever may come out of this may be reflected in the PIB. Or even some of the perspectives that the public has brought to bear since the debate became a raging national inferno would also be reflected in the PIB. So I think everybody is very conscious that there would be an impactful legislation that would come out of this entire exercise. Talking about the PIB, recently, the minister came up with some committees including the one that includes former Senators and members of the House or Representatives. The impression in the public domain is that the committee has been mandated to work hand in glove with serving Senators and those in the House of Representatives. Has there been any overture on the part of the ministry to get your committee to work with whatever committees that have been set up to drive passage of the PIB.

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here is a legislative process and what I think the executive is trying to do is that they are trying to collate their own views and thought and to harmonize though from the industry. think that that’s what the committee is about. When the Bill is submitted to the national assembly, there is a process for legislation and within that process there is also room for public input into whatever law the national assembly is trying to make, there will be public hearings, committee sittings on the PIB and at that point, any member of the public, including any groups or committees that have an interest would of course be allowed to make their contribution. But I think that both the executive and members of the committee know the procedure of how legislation is worked on and I don’t think that there is any kind of committee that is set up to affect the way legislation is made, I don’t think that is the intention and I don’t think that would be

taken seriously here. The PIB would be treated with the seriousness it deserves because it is a fundamental law as far as the oil and gas industry is concerned and everybody understands that the oil and gas industry is the bedrock of the Nigerian economy. In any serious society you use your strength and your base to propel yourself forward. Oil and gas is our strength and anything that has to do with it has to be taken seriously by any Nigerian because that is what we survive on. But having said that, you must understand that this is a very

Abbe

‘I’ve been very disappointed’ – Senator Abbe the outcome. Definitely, whatever work they are doing at the executive level, once it is submitted to the n a t i o n a l a s s e m b l y, t h e procedures and rules of the national assembly would take its course and in the course of that Bill, whatever committee or interest that has something to do with the Bill would have an opportunity to make an input. As former legislators themselves, I am sure they understand that process and ever ybody would respect that process.

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he concern is that the PIB has been in the works (permit the

expression) forever, and like you’ve rightly pointed out, at least I came away with that from your submission, teh PIB is important. I want to believe that the executive is looking for ways and means to expedite passage of the Bill. Do we expect to see a commensurate disposition towards expedience on the part of the legislature towards passage of this Bill? The legislature has always worked conscious of its obligations to the Nigerian people and I am sure as you have seen in the 7thSenate, anything that is important to the people of this country is

controversial law because it affects so much that is ongoing in the industry. But Nigeria in my opinion cannot afford the luxury of dilly dallying on the subject of the PIB because like I was saying this morning, oil is an international business, it’s not a local business and in the oil industry, people plan things, they do not carry on the way we do here – they

when you create so much uncertainty in an international industry like the oil industry by saying you are going to change the rules and people don’t know what the rules would be, it would affect investments in the industry because people don’t know what the rules are, if there would be PIB or not, they want to know how it would affect their investments and how it would not. It is important to the country that we bring some kind of closure to the issue of reform in the petroleum industry, closure in the sense that, if there would be reform what is the reform? It has to be understood and clearly defined. If there is no law and there is no reform, let that also be known and clearly understood that the rules remain as they are so that our international partners can participate in the industry. I believe that on that basis the national assembly should be geared very seriously because it is something that affects how people relate with the oil and gas industry. This is the corner stone of our economy.

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et us look at another critical aspect of the PIB that has generated a lot of concern. You would recall that the communities had asked for inclusion of 10 per cent that should accrue to them. You are from the Niger Delta, a very important part of the are and today you are a d i s t i n g u i s h e d S e n a t o r. I n c i d e n t a l l y, y o u superintend a committee directly related to the sector. Are we to expect any particular disposition towards protection of the communities from you? I don’t think protecting the

But Nigeria in my opinion cannot afford the luxury of dilly dallying on the subject of the PIB because like I was saying this morning, oil is an international business, it’s not a local business love to be clear as to what the rules are, they like to do things in an organised and systemic manner such that the results are predictable. So

communities is a Niger Delta thing. When we had a crisisin the area and people were CONTINUES ON PAGE 18


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‘I’ve been very disappointed’ – Senator Abbe CONTINUED FROM PAGE 17

calling it a Niger Delta thing, I said to them, it is a Nigerian problem and part of the fundamental challenge of this country is that we need to begin to deal with each other on the basis of truth because unless and until we do that it would be very difficult for us to move forward. It would be very difficult for us to generate the kind of passion and the kind of commitment that we need to take this country to where it should be. People keep talking about Nigeria as a very rich country but I have said and I want to say it again, Nigeria is a very poor country, very, very poor country. Nigeria is rich in potential but you can’t eat potential. For potential to become edible you have to translate it by action and part of that process of transforming our potential into wealth that you can actually access is that there must be some clear basis of equity in what we do. Today in our communities, if you go there you would be shocked at what is going on. People don’t see any relations with the oil companies as regards their interest, so they are breaking pipelines, they are pouring oil on the ground, they refine their own oil all in a bid to extract some value. And this is because this whole idea that the fund from oil is being mismanaged has eaten deep into the consciousness of our communities. I think that part of a solution that works for everybody is that like every other person that has a solution in his backyard, you must give them something. There is no argument you would make that can take away from the fact that the communities must be given something. Part of what I think the PIB would achieve is that when it clearly sets out the interests of these communities, it releases the pressure on the Nigerian system and on the

Abbe

Oil spillage

oil companies to actually do their own thing and gives the communities an opportunity to take their destiny in their hands so that if tomorrow, there is no more oil, they don’t look at anybody and say when there was oil you people came here and treated us anyhow. They also are accountable to themselves. I think that that provision was well intentioned, it was well intended; it would actually help the oil industry because it would release a lot of the tension that exists in the industry and enable the industry to actually operate at maximum value.

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an we take a look at the UNEP Report and the way and manner it’s been managed by the Nigerian state. What are your expectations of the Nigerian government especially given the way and manner it’s been handled so far? In fact I must say that I’ve been very disappointed by the way and manner it has been handled. If you read the UNEP Report, there is no responsible government that would see that scientifically

The way we do things in this country sometimes baffles me and it just shows that a lot of times our public officers don’t understand what it means to be a public servant these are the findings and these are the dangers that your people are facing, there is absolutely no visible response from the government. A committee was set up headed by the minister of petroleum resources but as I speak to you, that committee has never gone to Ogoni land, never! As I speak with you, that committee has never spoken with me, never! And I am a Senator representing that senatorial district, they have not seen any of the things mentioned in the UNEP Report, and yet, a report has been submitted on the implementation of the UNEP Report. How do you implement a report without talking to the people? How are you going to deal with the

environment without talking to the people who live in it and explaining to them that this is what we are going to do and how we are going to do it or even seeing what is being talked about. The way we do things in this country sometimes baffles me and it just shows that a lot of times our public officers don’t understand what it means to be a public servant. Because as a public servant, you serve, you can’t be bigger than people you serve and that is part of the tragedy of this country, if not, in what other part of the world can this kind of thing happen? This UNEP Report was submitted how many months ago..., and the other day when we were dealing with the budget I said it in plenary

that in Brazil there has been an oil spillage and the Brazilian government has demanded something. We will still be here pouring over this report and the Brazilian spillage would be settled because their government is serious. To put it mildly I am disappointed with the way and manner this issue is being handled. And the UNEP Report is not just about Ogoni, there are issues in the report that deals with the way we handle spillages, that deal with the way we manage environmental hazards of oil exploration in the Niger delta, that deals with even the capacity of the government agency to respond to the situations that arise out of these activities and I expected that the government would have been stung into taking very, very visible, drastic and positive action to affect not only how the issues of environmental degradation in Ogoni is resolved, but even how this business is conducted so that similar situations brewing all over the place are controlled for CONTINUES ON PAGE 19


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‘I’ve been very disappointed’ – Senator Abbe

Ogoni devastated by oil spill

CONTINUED FROM PAGE 18

the benefit of the future. But I haven’t seen that response yet. I don’t want to talk about it anymore because if I do, I would say things that I should not say. Given the circumstance and your current station, are we to expect the Senate to look at this aspect of operations of the international oil companies to ensure that the kind of spillage that has caused this level of environmental degradation in Ogoniland and parts of the Niger Delta is checked. Are we to expect that legislation would be included in...? The problem of Nigeria is not legislation, the rules are there, the rules are not enforced and teh officers who should enforce the rules have no interest in the rules. How can you be dealing with environmental issues and the person who is in charge of environmental issues is sitting in Abuja. Is his house in the place we are talking about? Has he been there, does he even go there? So when you are dealing with things like this, you just wonder. That’s why we keep talking about restructuring this country into an effective

The power I have is the one I am using now, I have a platform on which I can sell these ideas and I have been selling them and people are buying into it

unit that actually delivers something to the citizens. The state in its present form cannot and I want to say this without fear of contradiction – Nigeria in its present form cannot deliver on the expectations of the citizenry. Look at the issue of security, whatever reform you like, make, except you have state police forces, you have people in the states that are living in these places and living with the people who have their own instruments for dealing with situations

that arises in their local areas, how would you achieve security? Where in a federation does only one government fund security? It’s impossible, how can you have three hundred and sixty something, thousand policemen to a population of over 160 million, what type of reform are you going to make to that? There are basic truths that need to be told in this country, there are basic obvious things that we are doing wrongly. If you have been on a road that is leading

nowhere, why can’t you reassess yourself. If you have tried this form of centralized security and it is clear that it cannot deliver, , it is not delivering and it is not programmed to deliver, why don’t you try something else, why are we afraid of change and tracking new routes? When you talk about it they say no, the governors would use the police to arrest people. If a governor wants to arrest somebody now is there anything stopping him from arresting the person he wants to arrest? Is the governor not subject to laws of the land? If he does something that is illegal, shouldn’t we have a provision in the law that allows him to be dealt with even after he has left office? Should we, because we are afraid of what could happen subject our children and communities to this kind of insecurity? Is that cure not more deadly than the disease that you are afraid of? Sometimes I get very upset with the way we do things around here and I think that except we have enough

courage for Nigerians to come out and say exactly what is wrong and how it can be corrected, we would just be wasting our time. But the point is that like I said earlier on, the Senate, the 7th national assembly is not powerless in view of our current realities. So if the executive is not able to initiate fundamental restructuring, can’t it be initiated by the 7th national assembly? I am not the 7thnational assembly, the views I am expressing here are those of Senator Magnus Abbe. I am one out of 109. I am not the 7thnational assembly and the senate is one arm of a bicameral legislature. The whole concept of making fundamental change to the way we operate is not something that any one person can do, the executive can’t do it alone, the national assembly cannot do it alone. Everybody in Nigeria has to be conscious that there is the need to do something differently and to change the way we look at things and how we deal with them. What I can do as a serving Senator is to use my platform as a Senator to sell that message and to sell that consciousness and I’ve been doing that. Even the Senate on its own cannot restructure Nigeria. Nigerians – governors, Mr. President, Houses of Assembly, Chiefs, market women, everybody must understand that we need to do things differently and that these are some of the things that we are facing and we can change. When you say I am not powerless, what power do I have to restructure Nigeria? The power I have is the one I am using now, I have a platform on which I can sell these ideas and I have been selling them and people are buying into it, the truth cannot hide. In any case, like I say to people, everything has its time and when the time for something has come, it doesn’t need a Goliath to come and do it. We need to focus on the practicalities of what needs to be done and we need to get it done fast before it’s too late.


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HENRY OJOGHO:

Financing, the bane of the oil & gas industry

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his writer is sitting directly opposite this oil & gas industry player, they have not met before, so, the natural thing to do is, ask the subject, where he is coming from, to be where he and the company he oversees is today. “ We started late in the 90s, and struggled a bit, until the Fe d e r a l G o v e r n m e n t o f Nigeria, brought the Local Content law, which we took advantage of. We have worked harder since then.” You will note something that keeps rearing its head, during this interview-FINANCE. Henry Ojogho, believes that, by 2020 [eight years from today], Nigerian companies will be able to take up about 80% of the work available. This, he warned, depends on the availability of cheap/affordable financial facilities, in order to be able to compete with the ever present multi-nationals. “Even if you have contracts, nobody will lend you money to execute same, so, the Federal Government, through its agencies, should set up/organize seminars outside the country, invite Nigerian bankers to attend, so that these naïve bankers, will understand the maritime business.” Personally, I remember listening to a banker last October at an industry forum, accusing local companies of n o t s e e k i n g competent/qualified finance executives to advice them regarding projects, simply because of saving costs. But, Mr. Ojogho will not have any of that. He calls Nigerian bankers “feel right bankers”, insisting that, their business is to advice their clients, work together and succeed. Look at your cash projections and help the local company. “ Local banks should support local companies to acquire vessels. They [banks] have got a lot of work to do. The local companies keep ‘running from pillar to post’, looking for

money”. SWEETCRUDE , then asked whether the Nigerian Content Development Act has served its purpose. Mr. Ojogho thinks that the Government has a lot of work to do, concerning the success of this legislation. He believes that, the International Oil Companies[IOCs], feel the Government is not serious about the Act. He advises that relevant Government agencies should enforce the Act. He accused the Government functionaries of these agencies of not doing their work, but, instead ‘seek favours from Multi-nationals’. He insists that, ‘auditors from Government agencies should s e e t o t h e performance/enforcement of the Local Content Act’.

Henry

achieving four [4] million bpd, from the present 2.6 million bpd, the availability of jobs is assured. SWEETCRUDE wanted to

Locals need to unite, so that, we do not play ourselves into the hands of the multinationals, avoid constant embarrassment from IOCs.

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re there benefits from the passage of the Local Content Law, we asked?” Our company has benefitted from the passage of the Act. It has been different these days. At least, the Multi-nationals, do not push us around like before”. We also wanted to know if there are enough jobs to drive the full success of the Act. His answer was yes. Henry Ojogho became animated assuring that, the jobs available were more than enough. In his company’s area of specialization-Deep sea operation, where there are few owners of vessels with success, there is a lot to tap from, and added that, with the Government’s projection of

know his company’s Nigerian Content accomplishments. “Our company operates 100% Local Content. Very few expatriates,[80% local, 20% expatriate]. We have control totally. Our internal plan is that, by 2014, our expatriate quota will be reduced to about 5%. This is even so, because, we provide services in the upstream sector of the industry, which involves high tech equipment for-sea bed surveys, disengaging pipes underwater, sub-sea construction, etc”. Because of the vision above, Mr. Ojogho’s company plans to basically train the locals to be at par with others, build capacity and take same beyond the Nigerian borders.

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r. Ojogho’s parting words to the industry? “ I acknowledge the President[Goodluck Jonathan] who signed the Local Content Act into law. I also appreciate that, he promised to sign into law, the Petroleum Industry Bill [PIB]. This Government believes in developing Local Content. Mr. President is knowledgeable about the industry”. He is of the view that, Nigerian National Pe t r o l e u m C o r p o r a t i o n [NNPC] needs re-structuring, especially regarding how bids are managed. He adds that, for the industry players to function and succeed, the players need the sincere support of NNPC. This Government agency ‘needs to do more’. To h i s c o l l e a g u e s , h e requests for unity amongst them.” Locals need to unite, so that, we do not play ourselves into the hands of the multinationals, avoid constant embarrassment from IOCs. My sincere and candid advice to the industry-more co operation, work for one common purpose, which will help all. IOCs should cooperate with the local companies”. To Mr. Ojogho, it is time for mergers and acquisitions for local practitioners, since this will mean added capabilities. Lastly, he concluded”

Financing is key. Banks should train their staff to be able to identify opportunities in the upstream. Doing that will solve 92% of the challenges”. POST-SCRIPT : Mr. Henry Ojogho, is the Vice Chairman [read CEO] of BRORON GROUP. Broron Oil & Gas Limited, is a fully Nigerian owned oil & gas company, which has been offering its technical support services successfully to many major production operations across the upstream Niger Delta. It specializes in well hookups and the design, construction and installation of umbilical, flow-lines and risers, diving services, ROV and survey services. BRORON OIL & GAS LIMITED, is a part of BRORON GROUP, which includes, BRORON ENERGY LTD, a company in partnership with AB AXIS Industries with specialty in power plants projects. The technical experience and financial strengths of these sister companies have been complementary to the overall success of the group, which now has a long term objective of shipping domestic gas from the Niger Delta, to various Independent Power Plants [IPP] across Nigeria. As a local company, BOGL has been maintaining oilfields by offering service as listed earlier.


Gas

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A Modern Gas Plant

WGC 2012 moves to sustain future global gas growth Yemie ADEOYE

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HE global gas and energy industry will gather to attend the prestigious 25th World Gas Conference (WGC2012) in Kuala Lumpur, Malaysia from 4-8 June 2012, just as the conference and exhibition has concluded plans to address the seismic shifts and developments in the energy sector, with a prime focus on the global gas industry. Hosted by PETRONAS and organised by the International Gas Union (IGU), the conference with itsTheme “Gas: Sustaining Future Global Growth”, WGC2012 will showcase major achievements and milestones accomplished by the global gas industry. It will also draw on critical inputs from an array of global gas professionals to chart new

strategies for the natural gas industry. “Natural Gas has a key role in achieving a low carbon economy. The credentials of natural gas are indisputable. Supply security is no longer an issue with the abundance of both conventional and unconventional gas and globalisation of the LNG trade. Yet, natural gas faces challenges and obstacles in positioning itself as a key energy source, particularly in the policy arena. As the spokesperson for the gas industry, IGU has initiated efforts towards advocating for natural gas, so that it will regain its appropriate policy voice, consistent with its merits and potential,” said Datuk (Dr) Abdul Rahim Hashim, President, IGU.

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he WGC2012 technical programme has been structured along critical t h e m e s f o r e a c h d a y. Beginning with “Foundation

for growth,” the conference progresses with “Securing G a s S u p p l y, ” t h e n “Enhancing Gas demand,” building up to “A Sustainable Future,” on the final day. Strategic panels will represent topics of current significance to the gas industry including three special projects: “Building Strategic Human Capital”, “Nurturing Future Generations” and “Geopolitics and Natural Gas.” Besides these three special study projects, key t o p i c s s u c h a s unconventional gas, gas advocacy, LNG, natural gas for transport, innovation and research and renewable energy will also play a pivotal role in the WGC2012 conference programme. WGC2012 keynote speakers will comprise the top CEOs and captains of industry associations, International Oil Companies and National Oil Companies. These highly

Strategic panels will represent topics of current significance to the gas industry including three special projects: “Building Strategic Human Capital”, “Nurturing Future Generations

respected individuals from around the world represent a cross-section of the industry from upstream, midstream and downstream.

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h e l a t e s t reconfiguration of exhibition space, up to 10,800 sqm due to overwhelming demand, will bring together major players and suppliers to the gas industry where their latest products, services and area of expertise will be showcased directly to the

most influential gathering of international gas professionals. WGC2012 is sponsored and supported by the likes of Royal Dutch Shell, Qatargas, T O TA L , E x x o n M o b i l , RasGas, GDF Suez, KOGAS and BP, and is set to feature over 5,000 industry professionals, 500 international speakers, 250 local and international media, more than 200 exhibitors and 10,000 trade visitors.


Gas Australia set to become the world's leading gas player

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Australia Gas Plant

Yemie ADEOYE

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here are moves by Australia to emerge as a leader i n t h e international gas industry, as it played host recently to investors, operators and other stakeholders in the global gas community. The conference, first of its kind to be hosted by the Australian government was organized in response to industry demand, with a focus on the markets contribution, particularly to LNG, from both a local and global perspective. President of the International Gas Union (IGU) Dr Abdul Rahim Hashim, provided the keynote speech for the event, describing the transformation of the global gas market and Australia’s importance to the sector. In his address, Dr. Rahim outlined the opportunities and challenges that lie ahead for the industry as Australia continues as a frontrunner in developing new technologies and innovations to meet today’s energy needs.

In order to address the many and varied opportunities and challenges the industry is currently facing, it is vital that we bring the industry’s top minds together to form a collective and informed response

Dr. Rahim said Australia Gas 2011 forms part of the IGU’s wider commitment to promoting and enhancing natural gas as a source of clean, efficient and value added energy to sustain future global growth. “In order to address the many and varied opportunities and challenges the industry is currently facing, it is vital that we bring the industry’s top minds together to form a collective and infor med response. We currently have an exciting chance to direct the course of the global energy markets as we look to protect our environment while meeting increasing global energy needs.”

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r. Rahim praised the commitment of the global gas community and its efforts to date, and emphasised the need for the community to continue its momentum in

steering the world towards a low carbon economy. “Strategic discussion and networking opportunities like Australia Gas 2011 bring together the innovation and critical thinking needed to realise the potential of untapped synergies across the industry. In this way, IGU sets the platform for the global gas community and a sustainable future in energy.” As the spokesperson for the gas industry, IGU continues to play active roles in initiating and leading various efforts to advocate the value and longterm potential of natural gas as the fuel of choice, today and in

the future. In keeping with this theme, Gas: Sustaining Future Global Growth is the focus for the I G U ’ s 2 5 t h Wo r l d G a s Conference 2012, where the global gas community will converge on Kuala Lumpur to address the emerging trends in light of political, sustainable and security issues. Held between the 4th and 8th of J u n e i n Ku a l a Lu m p u r, Malaysia next year, Dr. Rahim, who is also the President of Malaysian Gas Association (MGA), will lead the IGU and Asia to strategically position the industry for international growth.

Power companies seeking clarity on CIL pricing

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he power generating companies and coal traders in the country are seeking clarification on the move by Coal India Limited (CIL) involving withdrawal of the price rise in coal as well as on how the gross calorific value (GCV) mechanism would

prove to be cost neutral to them. Coal India had proposed a new pricing mechanism that involved linking the prices to the quality of coal. According to estimates, the new pricing policy brought in by the coal monopoly would have resulted

in the coal to be become dearer by 12-15 % for the state-owned and private power utilities in the country. CIL announced its decision to move from “useful heat value” (UHV) based pricing to (gross calorific value) GCVbased price mechanism from the beginning of 2012.


Fee dback

Drilling of Chevron Nigeria’s relief well to last 100 days Godson Gbodume (safety officer) ‘I trust Chevron, but more safety officers & much safety devices should be on board, all hazards should be controlled to make sure no life is lost again, company public reputation should be protected.’ Madueke Promise Dennis ‘I love this company and would like to contribute my quota in stopping any further inferno. Thumbs up Chevron Nigeria PLC.’ Osanya B. Osanya ‘What are the plans of chevron to pay for the damages to communities.’ Nigeria’s anti graft body deepens probe into fuel imports

Apostle Steven Nyong ‘l disagree with the minister resigning now, she has not been indicted, if for any thing she has force Jonathan and the anger of the people, for him to act for the first time, and he acted well. I think we should all be patient and watch for more revelations, as the period has come when Nigerians will judge all those looters who perpetuate themselves in Govt. at all cost, to steal our wealth to the detriment of the poor masses. Nigerians should be on a strong vanguard and not to relent on their resolve to know how their wealth is being spent. This will spread to other tiers of Govt. They should demand accountability from these levels. More miracles are coming more hidden things, will come to light. They will never go unpunished, GOD’S HAND IS ON THE ISSUE. So many wicked people and their deeds will be expose. GOD is coming with a Great Anger. The

cries of the poor masses have been heard. NIGERIA needs TOTAL PRAYER/FASTINGS immediately to Seek GOD’S Face. GOD HELP NIGERIA.’

Nigerian govt bows to people pressure Siwele Omoz Guy GEL. From the initial pump price of the premium motor spirit product of N65 per litre, to subsidy removal regime of N140 and now N97 per litre. Guy GEL. I just want you to know that a good name is better than a bad name. Try to lay a foundation of legacy and trust like great Mandela and Prof. Ambrose Alli (former Bendel head of state) did. What u don’t know is that time is very short, in less than 3 years from now. Your administration will come to an end then u will start campaigning again and start begging Nigerians to vote u again for second term in office, remember how much you spend on campaign then as most of you politicians believe that the masses are poor a cup of rice will do them to vote. Get that out of your thick skull and get this straight your antecedent will speak for you then, Ibeg Mr. GEL. Don’t let Nigerians and Niger delta down, will are looking up to you as our mentor. We will survive because we are survival already despite all the suffering the government are inflicting on the masses everywhere, we shall survive. N97. Per litre ok and not too ok but is better than N140 per litre, labour consider it and call of the strike let watch and see if the money from the subsidy will be accountable for. I appeal to the federal government to talk with ASSUU to call of strike we are sick and tired of wasting our time at home.

Nigerian government bows to people pressure

Feedback Osunkunle Joseph With this Mr. President speech, it shows that he was confused and Nigeria reserve have been spent. If not let him prove it. To Nigerians our trust is in God not in man if the senators, house of rep. and ministers are feeding fat and people complained ad no serious action was taken but just to fake us that 25% of their basic salary will be removed what about their allowances which they receive in millions. God is alive; He is going to judge every one of us, if it is good to suffer the whole nation because of one selfish and corruptable ambition. We knew that God put you there and he knows the appointed time to remove you. We are the Israelites; God will surely fight for us, AMEN.

Shell invests $10 billion on community development Meeting Ovie Joshua I am an indigene of Niger Delta, from Isoko north, hard working but ever since the completion of my secondary education, things have been very tough with him due to my inability to secure a well paid job. Am getting frustrated and I don’t want to do something stupid. Please Indeed a job to keep me going.

Nigeria’s Ministry of Petroleum Resources submits to probe Ijeoma May the lord God use men who fear him in the EFCC to expose all who have plundered the Nigerian oil sector. May EFCC itself be devoid of fraudulent individuals too.

Nigeria’s anti graft body deepens probe

into fuel imports Apostle Steven Young l disagree with the minister resigning now, she has not been indicted, if for any thing she has force jonathan and the anger of the people, for him to act for the first time, and he acted well. I think we should all be patient and watch for more revealations, as the period has come when Nigerians will judge all those looters who perpetuate themselves in Govt. at all cost, to steal our wealth to the detriment of the poor masses. Nigerians should be on a strong vanguard and not to relent on their resolve to know how their wealth is being spent. This will spread to other tiers of Govt. They should demand accountability from these levels. More miracles are coming more hidden things, will come to light. They will never go unpunished; GOD’S HAND IS ON THE ISSUE. So many wicked people and their deeds will be expose. GOD is coming with a Great Anger. The cries of the poor masses have been heard. NIGERIA needs TOTAL PRAYER/FASTINGS immediately to seek GOD’S Face. GOD HELP NIGERIA. Zakari Baderi The minister should resign; to allow a transparent & unhindered investigation period!

Ogbunigwe Ndigbo vows to retaliate killing of Igbo in North Jacinta Please my fellow Igbos, as usual let’s hold firm to our God, because is him & him alone will protect us from further killings,,, as 4 those in northern states,, I wonder what u r still doing there. It just fit the saying that, ‘ yams r kept wit goats, I beg u, come back pls. do u value your businesses more than your lives?

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Faithful Okon Ogbunigwe Ndigbo, do you know d only barrier you might face in the struggle to tell Boko Haram that enough is enough from you Igbo people? “Lack of cooperation & unity from all Igbo people. Do you know why Boko Haram have so far are succeeded in their operations? Hausa people all over the nation are very united & have one mind. Before Boko Haram gave Igbo people in the north a 3 days ultimatum to leave d North, how many Igbos or non Hausas have they killed? After d ultimatum last week, they still carried out series of killings directly on d Igbos. I wonder the 2 weeks ultimatum given to northerners in d east for? If you’re serious why not send a signal to d northerners/Boko Haram by killing the Hausas in your locality/state with more than 500 & above casualties as a sign that you’re ready for them. Boko Haram has taken over Nigeria without serious arrest by Federal Government, State Government, security agencies etc with the fear of total war from the north, but if it were in the east even the governor or Igbo security officers will be the 1st to arrest such persons. I suggest there should be state police where all police officers should go back to their state of origin because these Hausa officers in the south & east are destroying us. Could you imagine almost all the Eastern States Governors boycott this nationwide strike on oil subsidy? While their northern counterparts participated actively & still participating till NLC calls it off. Action should speak louder than voice from Ndigbo.


Power

Shiroro dam

Canada, India get BPE nod for due diligence on TCN Clara NWACHUKWU

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he Bureau of P u b l i c Enterprises, BPE has issued Requests for Proposal, RFP, documents to Manitoba Hydro of Canada and Power Grid of India to enable the firms prepare their bidding documents for the management contract for Transmission Company of Nigeria, TCN. In a statement from the BPE, the two investors are presently undertaking due diligence on TCN and its network in order to submit their technical and financial proposals. It would be recalled that the National Council on Privatisation, NCP, at its meeting in August 2010, invited the two companies to re-submit technical and financial proposals in line

with current system and industry information for the management contract for the TCN. The bureau also explained that “the technical proposals will be evaluated based on their transmission-lossreduction, network improvement and capacity transfer strategy. The intent is to have a transmission company that will be capable of containing the anticipated changes in the Nigerian Electricity Supply Industry and Market.” The objective of the management contract is to: • Reduce electricity losses during transmission; • Provide for the achievement of certain predetermined targets that would improve grid security and general performance; • Have reward and penalty clauses as incentives for success;

The bureau also explained that “the technical proposals will be evaluated based on their transmission-lossreduction, network improvement and capacity transfer strategy • Provide efficient management of government investments; • Ensure adequate and equitable generation dispatch according to a fair merit order based on sound regulatory principles; • Ensure fair market settlements between electricity traders; and • Provide for skills and

expertise transfer to Nigerian counterparts who will serve in deputy and other positions on the management staff of the Management Contractor.

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anitoba Hydro is the electric power and natural gas utility in the province of Manitoba,

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Canada. Founded in 1961, it is a provincial Crown Corporation, governed by the Manitoba Hydro-Electric Board and the Manitoba Hydro Act. The company presently operates 15 interconnected generating stations. It has more than 527,000 electric power customers and more than 263,000 natural gas customers. Since most of the electrical energy is provided by hydroelectric power, the utility has low electricity rates. Power Grid Corporation of India Limited (Power Grid), on the other hand, is a Navratna state-owned electric utility company headquartered in Gurgaon, India. Power Grid wheels about 51% of the total power generated in India on its transmission network. Power Grid has a pan-India presence with around 82,045 circuit-km of transmission network and 135 nos. of EHVAC & HVDC substations with a total transformation capacity of 91,945 MVA. The interregional capacity is enhanced to 22400 MW. Power Grid has consistently maintained the transmission system availability over 99.00% which is at par with the international utilities. TCN is one of the 18 successor companies carved o u t o f Po w e r H o l d i n g Company of Nigeria, PHCN, which combines the functions of a transmission services provider, a system operator and a market operator, all of which are central to the sustainability and development of the electricity sector.

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t was scheduled for a Management Contract in order to transit into a financially sustainable, stable, self-sufficient and market-driven company. For the purpose of procuring a management contractor for TCN, the BPE retained the services of British Power International, BPI, who were initially engaged by the PHCN to provide advice on the engagement of an Operation & Maintenance, OM contractor and other issues like the development of management information ser vices and corporate governance procedures.


Power

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Solar power panels

PHCN liabilities hit over N340 billion in 2012 …Pays N10.8bn as pension annually Oscarline Onwuemenyi

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BUJA – Even As the Federal Government w o r k s feverishly to wound up the national electricity behemoth, Power Holding Company of Nigeria, PHCN, debts and liabilities owed by the company to other service providers is said to have accumulated to over N340 billion over the years. The Managing Director of the Nigeria Electricity Liability Management Ltd. (NELMCO), Mr. Samuel

Agbogun, who disclosed this to journalists on Monday in Abuja before an agency oversight visit by members of the House Committee on Power, also noted that the company aims to generate over N4.29 billion from the sale of PHCN properties in 2012, and more than N23.5 billion in 2013. These involve the selling of PHCN’s non-core assets including the company ’s London, United Kingdom properties, and staff quarters across the country.

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e also noted that pensions owed more than 11, 000 retired staff in 2012 has amounted to over

N10.8 billion, and may escalate due to the recent wage increase for electricity staff announced by the Federal government. Agbogun explained that some of the debts owed by the company come from the difference in the cost of producing electricity by power generating companies and the tariff paid by consumers on power. He said, “It is common knowledge that the tariff cost for electricity in the country is not reflective of the price for producing power, and this difference has accumulated over the years and it is borne by PHCN. “Other liabilities or debts

pwed by the company come from creditors who supply cables and other services used by PHCN, as well as liabilities to government agencies such as the Federal Inland Revenue Service, FIRS, among others.”

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ccording to him, NELMCO has invited the various creditors of PHCN to bring proof of their claims from the expired power company, adding that due diligence would be carried out and claims confirmed before payments are made. He said, “We have to do due diligence before these claims are paid; government has to

find a way to pay these debts to ensure they don’t keep increasing. These were transactions entered into by the company prior to its liquidation and devolution into successor companies, and we are trying our best to manage the bad debts that have arisen over the years.” He explained that the company was set up to administer the stranded debts and assets of PHCN pursuant to the provisions of the Electric Power Sector Reform Act 2005. “We were set up to assume and manage pension liabilities of employees of PHCN, and to hold the noncore assets of the company (PHCN), sell or dispose off or deal in any manner for the purpose of financing and the payment of debts or other related matter,” he added. NELMCO, he added, is also mandated to takeover the management and settlement of PHCN’s Power Purchase Agreement (PPA) debts, as may be determined by the National Council on Privatisation (NCP) from time to time.


Power

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Electricity companies to defend performance – NERC Oscarline Onwuemenyi

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ome of the areas e a r m a r ke d t o determine these efficiencies, Amadi stated, are the compliance in the removal of MMF and estimated billing of yet to be metered consumers. He said that the Commission will enforce its order regarding the

Yemie ADEOYE

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he Nigerian Electricity Regulatory Commission, NERC, has insisted that service delivery and compliance with industry regulations and orders will be major indicators for electricity billing by distribution companies under the planned tariff regime expected later in the year. Chairman of the NERC, Dr. Sam Amadi, who said this when members of the House of Representatives Committee on Power visited the Commission as part of their oversight functions, in Abuja, also warned Chief Executive Officers of electricity distribution companies to ensure improved service delivery to their customers. Amadi said, “The new tariff regime will be distribution company-specific and will be based on the level of efficiency each company is able to achieve between now and the take off of the new tariff later in the year.” He added that, “The Commission hereby reminds CEOs of electricity companies of the responsibilities owed to their customers particularly as regards its guidelines on Customer Complaints Handling, Connection and Disconnection Procedures, Customer Service Standards of Performance and Meter Reading. “We will be resolute and uncompromising in ensuring compliance and imposing sanctions on Chief Executive Officers and Managers of companies that fall short of the required standards.”

Siemens secures first wind turbine orders in Africa

Wind power

cancellation of the meter maintenance fee (MMF) by calling on consumers that were charged the fee after the November 2011 billing circle to submit their claims to the Commission. According to Amadi, “We will ensure that defaulting distribution companies refund any customer with genuine claims.” Genuine cases include customers who were charged MMF as from December billing circle, except debts owed the distribution companies.”

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arlier in his comments, the Committee Chairman, Hon. Patrick Ikhariale, said that the Commission had a vital role to play in the power sector reforms. H e a d v i s e d t h e Commission on the need to achieve a favourable public perception, especially with the backdrop of the negative perception of the power sector and the belief by some members of the public that electricity is a public good to be consumed for free. Ikhariale said some of the country ’s socio-economic problems could be traced to

We will ensure that defaulting distribution companies refund any customer with genuine claims the power sector and that the Federal Government was keen on addressing the challenges in the sector with some of the bold steps taken already. NERC recently inaugurated a committee to investigate corrupt, exploitative and illegal practices through inadequate or poor metering by staff of Distribution Companies (DISCOs), as part of the Commission’s public inquiry into the Nigerian Electricity Supply industry.

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he Committee is also charged with the mandate to determine the

extent of metering of electricity customers in the country, as well as factors which delay the procurement and installation of meters in accordance with rules and regulations in the industry. Amadi, who spoke to journalists at the inauguration, stated that the rational for the inquiry is “to arrest the scourge of complaints which centre on the experiences of customers with regards to metering, billing and consumer care.”

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e added that, “The inadequate supply of energy is most important technical issue but is not the priority social or human issue. The corruption of staff of utilities who exploit customers in many ways is the major challenge in the s e c t o r. T h i s a s s e r t i o n , however, needs to be verified and stopped. “This event is therefore very important in the Commission’s data gathering process aimed at addressing the perennial problems of metering in the Nigerian electricity supply industry.”

iemens Energy an operator in the Nigerian power sector has secured its first wind turbine orders in Africa with a total capacity of 100 MW. This was announced via a statement issued by the company in Nigeria and made available to Sweetcrude. Nareva Holding and Siemens signed a contract for the delivery of a total of 44 wind turbines for the Haouma and Foum El Oued Wi nd Po w e r P l a nt s i n Morocco. The scope of supply includes the delivery, installation and commissioning of the wind turbines, as well as a 5-year service contract for each project. Both wind power plants are expected to commence commercial operation by summer 2013.

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frica is an emerging wind market with Morocco cur rently the number two country in terms of installations. “These two orders mark Siemens Wind Power’s entry on the African wind market and clearly s h o w t h a t o u r internationalization strategy is successful,” said Felix Ferlemann, CEO of the S i e m e n s W i n d Po w e r Division. According to the Global Wind Energy Council, wind power is one of the most promising sectors for renewable energy generation in Morocco. The Moroccan government has set the target of raising the contribution of renewable energy to 20% of national electricity consumption by 2020. Internationalization is a key pillar of Siemens’ strategy in the global wind m a r ke t . J u s t r e c e n t l y, Siemens announced that it will establish three regional Wind Power Business Units for EMEA (Europe, Middle East and Africa), Americas and Asia as part of a new Wi n d Po w e r D i v i s i o n . Moreover, the company has sales hubs in several countries around the globe.


Financing Oscarline Onwuemenyi

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BUJA – The N i g e r i a Extractive Industr y Transparency Initiative, NEITI, on Tuesday hailed the plan by the Federal Government to re-introduce the Petroleum Industry Bill to the National Assembly, noting that only the passage of the bill will truly usher the reform and growth expected in the industry. The Executive Secretary of NEITI, Mrs. Zainab Ahmed, who noted this at a press briefing to announce the forthcoming of the National C o n f e r e n c e o n Implementation of Extractive Industries Transparency Initiative (EITI), in Abuja, also defended the methods used by the initiative in the selection of two indigenous firms to carry out audit of the oil and gas industry (20092011) as well as the solid minerals sector (2007-2010). She said, “NEITI has welcomed the renewed e f f o r t s b y t h e Fe d e r a l Government to review and re-introduce the PIB for consideration and passage into law at the National Assembly. the on-going move by government is commendable in view of the strategic importance of the PIB in improving sector governance, transparency and accountability on the oil and gas sector.”

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hmed noted, however, that in reviewing the PIB document, all efforts should be made to guarantee substantial improvement in the fiscal regimes, sector governance and to ensure that the oil and gas industry conform to the tenets of NEITI Act 2007. “NEITI is ready and willing to provide any information and data that will ensure that the PIB meets international best practice. NEITI is delighted that the nation and the National Assembly have been sensitized on the importance of the PIB,” she stated. She stressed that as an agency set up to, among other things, develop a framework for transparency and accountability in the Nigerian extractive industries, and to ensure conformity with the

NEITI backs move to re-introduce PIB —Clears air over selection of auditors

27 Subsidy probe: Oando sets record straight Yemie Adeoye

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President Goodluck Jonathan

principles of EITI, NEITI has a stake and a legitimate interest in the PIB. “NEITI therefore wishes to use this opportunity to strongly advise the National Assembly to ensure that, in its consideration of the Petroleum Industry Bill, nothing but Nigeria’s overriding national interest (optimization of revenue flows to Nigeria, protection of the operational environment, transparency, accountability and intergenerational equity) is held supreme,” she added

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he NEITI boss has also defended the recent selection of two indigenous firms, Sada Idris & Co. and Haruna Yahaya & Co, to carry out audits of the oil and gas industry and the solid minerals sector, stressing that the exercise followed all laid down laws, rules and regulations guiding public procurement. She noted that, “NEITI is proud that two firms owned and managed by Nigerians competed favourably with foreign firms and on the bid

NEITI is ready and willing to provide any information and data that will ensure that the PIB meets international best practice strictly on merit.” The oil and gas industry audit is to be conducted by Sada Idris & Co. for the sum of N226.6 million while Haruna Yahaya & Co. is to conduct the first Nigeria’s solid minerals sector audit at the cost of N137 million. Speaking on the planned National Conference on EITI, the anti-graft agency boss explained that since the

country signed up to the EITI i n 2 0 0 3 a n d t h e establishment of NEITI a year later, the agency is yet to create a national forum to bring together in one room, gover nments all levels, companies in the extractive sector, the legislature, civil society organizations, the media, among others, to dialogue, debate and discuss on implementation of the initiative. “This is precisely what this first NEITI National Conference is all about.

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he conference is coming at a time that issues of transparency, accountability and corporate governance in the extractive sector, especially oil and gas industry, has become a matter of national concern. “The NEITI National Conference is therefore planned to provide a national platform for the extractive sector to dialogue, examine, discuss, debate and share ideas on the EITI implementation in Nigeria,” she stated.

ando PLC, a major operator in Nigeria’s energy sector has said that it is a claimant in the Petrol S u p p o r t Fu n d ( P S F ) scheme and not a beneficiary as widely reported. This clarification was made on Tuesday, January 24, 2012, when its Group Chief Executive, Mr. Jubril Adewale Tinubu personally appeared before the House of Representatives’ Ad-hoc Committee investigating the subsidy scheme to clarify its participation in the controversial scheme. Mr. Tinubu decried the blanket insinuations that all the marketers and importers of petroleum products have constituted themselves into fraudulent beneficiaries of the Petroleum Support Fund (PSF). The Oil boss told the Hon. Lawan Farouk-led ad-hoc committee that far from the insinuations being peddled around, Nigerians are actually the beneficiaries of fuel subsidy, while the scheme only reimburses the marketers for the differential in the landing cost of fuel and the government stipulated pump price. He further averred that the claims are pursuant to enabling laws. On the huge amount Oando has received as subsidy reimbursement, he said that as a leading player in the sector, with over 500 retail outlets across Nigeria, eight strategically located terminals (combined capacity of over 150,000 million litres) and over 1,980 tr ucks through partnership and invariably responsible for fuelling 1 in every 5 cars on Nigerian roads, it should not be surprising that Oando is one of the largest claimants under the PSF scheme. However, he noted that the scheme was not without irregularities.


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NNPC Ad


Financing

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Total filling station

Nigeria Lawmakers say Total got N2.7bn subsidy overpayment

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BUJA - The Nigerian House of Representati ves Ad-hoc Committee probing the management of the nation’s oil subsidy payments said on We d n e s d a y t h a t To t a l Nigeria - one of the major oil marketers operating in the country - received excess subsidy claims of N2.7bn in 2011. It is the latest in the series of discrepancies issuing from the House probe, which earlier uncovered an excess daily fuel import of 24 million litres above the nation’s 35 million litres

daily consumption. Appearing before the committee, Total Nigeria managing director, Mr. Dominique Thiolon, admitted that his company got excess payment, but stated that the overpayment had been returned to the Petroleum Products Pricing and Regulatory Authority (PPPRA).

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e had initially denied the possibility of an over-payment in its dealings with the PPPRA, but admitted when he was confronted with records indicating that Total Nigeria Plc received excess subsidy claims of N2.7bn in 2011.

He told the probe committee that Total received subsidy amounting to N16.1 billion for 211 million litres of petrol it supplied in 2011 but the panel produced a document showing the actual subsidy received by the multinational oil firm for the period was N18.8 billion, a difference of N2.7 billion. The committee also confronted Total on the 2010 subsidy payments, arguing that the payment of N11 billion for 251 million litres of petrol for the year raised some questions. The panel was of the view that the payments appeared to be inversely proportional

to the quantity of petrol imported by the company. Members of the panel queried why the company received more subsidy in a period it imported less petrol and got less subsidy when it imported more fuel into the country.

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n response, Thiolon said the seeming discrepancy was normal as petrol was imported based on the prevailing price at the international market. According to him, the price of refined products changes on a daily basis like the price of crude oil. Executive Secretary (FIRS), Mrs Ifueko Omoigui-

Okauro also appeared before the probe panel, Wednesday, and efforts by the committee to ascertain, from her, the tax-paying status of the 128 companies involved in fuel importation did not yield results. Omoigu-Okauro told the panel that she was not sure if some of the companies were “ registered for tax purposes,” adding: “There is a possibility that some of the companies were not registered for tax purposes, but this is subject to confirmation.” She said her agency was currently conducting an audit on the tax status of the companies and would provide a comprehensive report on completion.


Insurance

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r . Olusola LadipoAjayi is t h e Chairman of Nigerian Insurers Association and the Managing Director of Lasaco Assurance Plc. In this interview with Rosemary Onuoha, the NIA Chairman reveals that the insurance sector did not benefit from the huge figures being bandied about from fuel importation Fuel subsidy There is a lot of information coming out of the fuel subsidy probe now. However, with that amount of fuel importation, if the Nigerian law that makes it compulsory for the importation of goods into Nigeria to be insured has been observed, you would have seen it in our reports. But I don’t think we have anything to show that goods worth that amount have been insured in the Nigerian market. Even the government officials in charge cannot agree on figures. The Central Bank will give one figure, NNPC will give another thing, and the Ministry of Finance will give another figure. Everything is just working at cross purposes but we don’t have any figure to come near anything that anyone of them has said. Terrorism insurance errorism insurance is available in the international market but it doesn’t come very cheap and we have to buy the reinsurance backup to do it before we can start selling it. And it is only now that the issue of terroroism or Boko Haram is taking a new dimension and it appears that it won’t go away. And of course the federal government does not even buy terrorism insurance even in oil and gas. Where they have been offered, the federal government of Nigeria has not bought terrorism insurance. So we haven’t started doing ter rorism insurance because it is very expensive and we just pray that this Boko Haram phase will pass by. If it is persistent and people are looking at that direction, once we start having enquiries from members of the public, the market will respond accordingly. But we don’t want to fish in troubled waters; we don’t want to

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Refinery

Fuel importation has not benefited insurers —Ladipo-Ajayi promote it because when we do, we are saying that this Boko Haram thing will never go away. We don’t want to do that. Oil and gas insurance he NIA is working closely with the National Insurance Commission, NAICOM, to fine tune the Guidelines for the underwriting of oil & gas insurance in year 2012. It is our expectation that more member companies will take advantage of the local content law and participate in the insurance of oil and gas assets. And as you may know we have a number of major claims in that sector now, but I want to assure you that the members of NIA will respond favourable to the admiration of the insuring public.

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It is our expectation that more member companies will take advantage of the local content law and participate in the insurance of oil and gas assets

Nigerian Insurance Industry Database, NIID Issues constituting

leakages in the insurance industry in Nigeria are fraudulent insurances, problem of inadequate pricing, unethical conducts and multiple claims, these are issues that we have to contend with. On the issue of fake insurance operators, the black market in Nigeria is thriving more than the regular market because it has no obligation.

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hey are only collecting money without paying claims and therefore bastardizing the practice of insurance. At the end of the day you will find out that there are more vehicles insured in the black market than we have in the regular market. Another issue is that of inadequate pricing borne out of competition. The need

to capture as much as possible a larger market share have made operators to be at each others throat coupled with every form of unethical practice both from within and outside the industry are things that we seek to eliminate by these industry-wide data base. For multiple claims, we have tried to sort it out manually by saying that if somebody is raising a claim we circulate it among our members but these things don’t work out fine and we have had only very few instances where we have taken the benefits of consultations. In fact in my own experience, I think that there is only one celebrated case that I remember CONTINUES ON PAGE 32


Insurance Expert tasks consumers on insurancing against harsh economy

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n insurance expert has appealed to insurance consumers to continue to embrace insurance covers in the wake of high rises in the prices of goods and services occasioned by the hike in the pump price of fuel saying that insurance is a life saver. The appeal is hinged on the fact that the insuring public is quick to discard insurance when economic situations get tougher. Managing Director of FBN Life Assurance, Mr. Val Ojumah, who spoke to Vanguard noted that the insurance sector is always the weeping baby when people begin to consider factors that they have to cut off from their scale of preferences. To this end, Ojumah called on insurance consumers to go

ahead and renew their policies for the 2012 financial year as they will not regret it. He said, “In the wake of the recent increase in the pump price of fuel which has resulted in the astronomical rise in the prices of goods and services in the country, consumers of insurance products and services should go ahead and renewal their policies for 2012 because the importance of insurance cannot be over emphasised.”

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hile regretting that insurance is the first thing that gets cut off when the economy becomes too hard, Ojumah stated that Nigerians should change that negative perception and see insurance as a basic necessity of life. Ojumah said, “Insurance activities may suffer in 2012 because insurance

The appeal is hinged on the fact that the insuring public is quick to discard insurance when economic situations get tougher consumers heavily burdened by the hike in fuel price are l i ke l y t o c u t o f f t h e i r insurance contract as a tightening measure to beat

the high economic cost being occasioned by the hike in fuel price, but such move will not be the best.” Ojumah cautioned the insuring public to employ sound economic decisions because cutting off insurance from their scale of preference may not be the best of options.

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e said “Removing insurance from ones agenda for the year could turn out to be a bad choice which any insurance consumer can make because insurance is a necessity for everyone.” Lending his voice to the argument, former Managing Director of Nigerian Insurers A s s o c i a t i o n , N I A , M r. Ezekiel Chiejina, said that the hike in fuel price could cause some insurance consumers review their scale

32 of preference, however, insurance should not be the weeping child in such a list. Chiejina was however optimistic that the effect will not be too severe on life insurance business because most life policies are long term in nature. It will be recalled that after a week-long of strike, rallies, street protests and talks with labour, President Goodluck Jonathan announced a new pump price for petrol at N97 per litre. The new price is N44 less than the N141 announced by the Petroleum Products Pricing Regulatory Agency, PPPRA, on January 1st; and N32 higher than the former price of N65, demanded by labour and the civil society. According to the President, PPPRA has been directed to ensure compliance with the new pump price. Jonathan, however, said that his government is working hard to reduce recurrent expenditure in line with current realities and to cut down on the cost of governance.

Fuel importation has not benefited insurers —Ladipo-Ajayi Continued from page 31

required by law to render it by 31st of March. If you go to insurance companies now all the powers that be are always running around trying to get s o m e t h i n g d o n e . We complained to the Commissioner for Insurance that these things are too many coming at the same time. We are carrying out too many reforms at the same time and he said the whole world cannot wait for Nigeria.

involving a number of companies when they were able to apprehend a man for trying to defraud many companies. However, that was almost thirty years ago. So it is not that there are no new challenges as such, it is just that the intensity has been increasing and the need to arrest them cannot be more pressing than now.

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t is not always very easy to have what you call social change on an industrywide or nation-wide basis, to change people from the way they have been doing something for almost of 100 years. And you don’t imagine that you can just change it overnight. And these are always challenges especially in the insurance industry. At this moment there are so many changes that are taking place at the same time. We are gravitating from the normal accounting system to international financial reporting standard, we are doing risked management,

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Ladipo-Ajayi

we are doing anti money laundering issues where we now have to render account and people are now being charged N500,000 for late rendition of account. Now we are also doing NIID which is voluntary based. So many things are happening at the same time that we are stretching ourselves to the limit. Most companies who are used to rendering their account by June 30th are now

e said that it is not the requirement of NAICOM but the requirement of IMF and the Federal Republic of Nigeria is a signatory. If you don’t send your anti-money laundering report now, minimum fine you can pay is N5000,000. They warned that some of us may be paying N500,000 per day if care is not taken because they believe that insurance people don’t render returns. So we have internal challenges. On the NIID we are not working alone, we are integrating with FRSC, as well as the police and it is an internet based

scheme which is supposed to provide real time online verification module. If somebody who is in Badagry, Maiduguri, Akwa-Ibom or even the remotest places is buying an insurance policy; it must be verifiable within a specified period. So it is also a scheme where there must be zero tolerance to failure anything that is captured must be there. So it will take time to take off the ground otherwise we will be shortchanging ourselves and our members who have sold genuine policies will be missing from the data base and it will be counter productive. And we don’t want a system where we will start something and rather than get the result we intend we will now be getting the opposite.

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eanwhile, there is something that the NIA is really working at and this one we will give it the last drop of blood in our veins. There are some people who are not licensed intermediaries. They come

together and get authority of some state governments and create a monopoly for a handful of insurance companies and in those states they are the only ones that can sell insurance documents. We are against that at NIA. Every insurance company licensed by NAICOM to operate must be able to sell her products in any part of Nigeria.

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ll of us are running Nigerian companies. Secondly most of these companies take so much money from the premium that at the best of time the insurance companies at the end of the day from the N5,000 get only N2,500. There are places where they get less than that because these people will say they have incurred all sorts of expenses and at the end of the day, the insurance companies don’t get much. That is the second reason why we don’t want these people to be involved in the distribution of insurance.


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Labour

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Power sector is too sensitive to be toyed with —Ajaero I

sensitive for anybody toy with. They toyed with Daily Times; we have option to read Vanguard and other newspapers. They toyed with Ajaokuta Steel and so on, none of them is working today.

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HE Minister of Power and the two in-house unions in the Po w e r S e c t o r, National Union of Electricity Employees, NUEE, and the Senior Staff Association of Electricity and Allied Companies, SSAEAC, are scheduled to meet on February 18, after what could be regarded as their interface, in Lagos last month. Few days to the meeting in Lagos, the General Secretary of NUEE, Comrade Joe Ajaero, who could not attend the Lagos meeting, spoke to Sweet Crude Correspondent, Victor Ahiuma-Young, on some issue in the sector. Excerpts People have argued that the National Union of Electricity Employees, NUEE, has not shown enough commitment to improve the power sector and power supply in the countr y. What is your response? The union has shown enough interest to ensure that the sector perform and work for the benefit of Nigerians that is why we are at the collusion point with the powers that be and that is why we have been inconvenienced so much, more than any other groups in this country. When I said inconvenienced, I mean every word of it. It was based on this that soldiers were first deployed to all the stations in 2010, it was based on this that police were stationed in our national secretariat even with Armoured carriers and during the protest that followed across the country, many of our members were brutalized, arrested on this same course.

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t was based on this that some people came here (Secretariat) to abduct us and actually abducted the Assistant General Secretary, AGS Administration and my personal Assistant only to take them to EFCC office

Prof. Barth Nnaji

You have also seen the kind of media assassination since late last year on our persons, on our mission and it has continued that way because they do not like dialogue when they realized I was not there. The people came and started breaking doors which is not the way the EFCC we know operates. EFCC would have invited us if we did anything wrong, the commission would have written us letter and they would have even called us to come to their office assuming we have public funds that we

are tempering with or did anything wrong. But these people came here armed to their teeth and were seriously looking for the General Secretary and when they did not see him, they abducted two people. It was because of this conviction that we are even at this process now.

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e have to report to EFCC only for us to hear that some executive directors were diverting union funds or levy. Initially, they said our levy was illegal and we told them that we derived such powers to collect levy from the organs of the union and if they say there is a levy and we impose it, it is a non-governmental agency. We told them that if this was part of the check-off dues on some of the allowances on monetization, what was imposed was even small. Yet, these agencies would still come every time as if they are trying to use them against us or to moderate us. You know

as a union, we will not allow ourselves to be cowed. Again last year, your paper reported it, when they swooped on my vehicle, carried the driver and left. They were looking for me and when they did not get me, they dropped the driver and later abandoned the car. So, these are some of the things we have passed through by insisting that the right thing should be done. You have also seen the kind of media assassination since late last year on our persons, on our mission and it has continued that way because they do not like dialogue. Nobody has said, wait a minute, let us engage these people on how best we can achieve better result. It is the use of raw power of the gun.

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e have shown enough commitment a n d p r o v i d e d incontrovertible evidence that privatization has not and will not work in Nigeria and that the power sector is too

f you traced the history of over 50 countries that tried privatization of the power sector, and we have challenged them to tell us where this has worked. They have not and they are forcing us to accept that Nigerians should swallow this bitter pill that is where we differ. What they are prescribing is not good for the country. Even if we fear the troops now being deployed, there is no way we can leave our work places, having work for 30 years, 10, 20 and so on, without getting our entitlements and we must sit down to look at these issues. Some have alleged that you are fighting a personal agenda with your position as the General Secretary of NUEE, using event that happened in Enugu during the minimum wage struggle as an example. What is your response? Let the people who claim that I am fighting personal agenda tell Nigerians the agenda. I want it to be placed on records that all the Ministers of power that I have worked with, I have not visited any of them in their office and I do not know the colour of their office whether it is yellow or brown. I have not even taken a cup of water from any of them. Assuming I am not visiting the one there now, that is my style and I have been operating that way. Let any of them come out to controvert that and I am comfortable with what I am still doing.

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o say it is a personal fight, it is very mischievous because we are just servants of the union and we are doing its bidding. They should know that where you have a union with over 25,000 members, you cannot impose you will on them if it is possible. There are organs, at the Central Executive Council meeting, National Executive Council meeting and even at the national conference, members give directives and I cannot go contrary to that.


Labour

delivery to the gates of refineries X as the floor and X+Y as the ceiling, where y is the target inflation rate set by government policy in the current year. The adoption of this mechanism will ensure a stable price regime that will allow economic actors make plans. It should be emphasized that the guaranteed price should not be on offer to only NNPC, but to all refiners and to the limit of the crude actually refined for domestic consumption.

Victor AHIUMA-YOUNG

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RGANISE D Labour in Nigeria has said the only reform the nation needs in the downstream sector of the Petroleum industry, is a comprehensive reform that will confer the maximisation of benefits of oil on the national economy and one that will revive domestic refineries, encourage the establishment of new ones across the country and reduce dependence on imports. Under the umbrella of Nigeria Congress, NLC, Labour argued that domestic products pricing must not be based on import price parity to confer on the domestic economy a competitive advantage based on the resource in which the country is richly endowed.In a presentation to the House of Representatives’ Ad-Hoc Committee Hearing on Operation of the Subsidy Scheme in the Petroleum Sector, Congress listed revival of domestic refining through existing refineries and promotion of new r e f i n e r i e s , r e institutionalisation of a policy of differential between the price of crude for domestic consumption and for export and Promotion of Competition as ways to ensure that Nigerians derive maximum benefits from downstream sector. According to NLC “We believe there is a genuine need for a reform of the oil industry. In the upstream today, Nigerians know that crude is being stolen.

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o w e v e r, t o concentrate on the downstream for now, we support a comprehensive reform which will confer the maximisation of benefits of oil on the national economy. There is need to admit that the existing reforms are not working and that a more comprehensive programme of reform needs to be agreed among all stakeholders. We recommend a reform agenda that will seek to revive domestic refineries, e n c o u r a g e t h e establishment of new ones across the country and

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Organised Labour Leaders

How downstream oil sector can benefit Nigeria—NLC reduce dependence on imports. It is also our contention, that domestic products pricing must not be based on import price parity so as to confer on the domestic economy a competitive advantage based on the resource in which the country is richly endowed.” ”We believe that our domestic refineries must be made to work. Appropriate incentives need to be worked out to attract new investment in refining. While domestic refining by itself is not sufficient to guarantee product price stability, there are clear gains to be derived from domestic refining as opposed to imports.

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here are the overall gains in employment and general economic activity. There are also the obvious savings in freight and insurance costs. In addition to these, domestic supply of products will relieve the destabilizing pressure of import dependence on the exchange rate. It is worth

It is also our contention, that domestic products pricing must not be based on import price parity so as to confer on the domestic economy a competitive advantage based on the resource in which the country is richly endowed emphasizing that a reform policy based on importation of refined products is inherently destabilizing for the domestic economy. Importation necessarily puts pressure on the exchange rate of the naira. Since the exchange rate is one of the two major determinants of the domestic price of petroleum products in an import based reform regime,

a destabilizing mechanism becomes automatically a feature of the system.” Continuing, NLC said, “As long as the domestic prices of products continue to be tied to the international price of crude, the crisis will remain.

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t is in recognition of this that we propose a reintroduction of a modified policy of guaranteed crude price for domestic consumption. Rather than returning to the fixed guaranteed price as earlier operated, we propose a price band within which the price of cr ude for domestic consumption can fluctuate. In this regard, we agree with the spirit of the proposal put forward in the Senate Committee on Employment, Labour and Productivity report to the Senate on the 7th of October 2004. This proposal involves setting “a price modulating band for crude to be processed in Nigeria for domestic consumption”. “As for the specific band, we propose the cost of extraction and

iven that in the short run, there are no domestic refiners, tenders should be opened for the domestic crude for potential refiners to bid with clear timelines on domestic refining. In the short term, which should not exceed two years, bid winners will be allowed to arrange off-shore contract refining.” NLC added that “the downstream sector as presently constituted is characterised by industry dominance by NNPC and general monopolistic tendencies. Recommendations need to be made on how to open up the sector to competition. We need to design strategies for opening up monopoly assets and infrastructure (such as import receptacles, storage depots and pipelines) to competitors, who must of course pay economic fees. It needs to be recognised and emphasized that the implicit subsidy implied by the guaranteed crude price scheme need not undermine competition and deregulation. Examples abound the world over where subsidies continue to be provided in deregulated and competitive environments. The agricultural sectors of the economies of the United States and other Organization for Economic Cooperation and Development, OECD, countries are competitive and deregulated.

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et, agricultural subsidies continue to be provided daily. In like manner, a number of drug subsidy schemes exist in various countries of the w o r l d . Ye t , t h e pharmaceutical industry remains deregulated and competitive.”


Labour

36

Victor AHIUMA-YOUNG

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RGANISED labour has advised the 7thNational Assembly to be guided by national interest when considering the Petroleum Industry Bill, PIB, and void all contract confidentiality clauses for information on upstream, downstream, and midstream taxes, royalties, fees , bonus Pa y m e n t s , c o n t r a c t u a l obligations, budgets, projects and so on. Under the aegis of the Trade Union Congress of Nigeria, TUC, said to maximize returns, the PIB must make express provision that will ensure that gover nment allocates oil /gas licences through open and competitive processes to well-qualified companies. In a piece by the Rivers State Chairman of TUC, Comrade Hyginus Chika Onuegbu, who is also the former Port Harcourt Zonal Chairman of the Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, he lamented that ithe past, contracting and licensing had suffered from deep abuses of secrecy and discretion, saying irregularities marred all major bid rounds held in the 2000s, bringing about lawsuits, indictments, sackings, cancelled or revoked awards, and legislative probes.

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e said “The process for awarding lifting licenses and other licenses in the Midstream and downstream sectors should be as open and transparent as that of the upstream. Nothing should be left to discretion and nothing should be done in secret. The PIB should insist on strict rules of accountability and financial reporting in the oil and gas industry; and these must be observed strictly by all parties. The PIB should also include sanctions for any non observance of these rules including punitive fines and prison sentences for the Chief Executive Officers and Board members of the defaulting organisations. It is important that the annual audit of the National Oil Company and all the agencies created by the PIB are prepared and disclosed in accordance with high quality international standards by independent,

National Assembly in section

PIB: Uphold national interest, labour tells National Assembly competent, experienced and qualified auditors as presently done by other national c o m p a n i e s l i k e Pe m e x , KazMunayGas, and Statoil. In addition such audited financial report of the National Oil Company and these agencies should be published in their website.” Comrade Onuegbu, said the existing laws especially the Petroleum Act left so much to the discretion of the Minister and the regulatory agencies, saying “the PIB must ensure that nothing is left to discretion, as discretion encourages abuse and corruption.” “The Chief Executive Officer of the National Oil Company should be appointed /removed from office just like the Governor of the Central Bank of Nigeria and the Chairman of

the Independent National Electoral Commission.

Trade unions have a crucial role to play if the final version of the PIB that will be passed into law will achieve the original objectives of the Oil and Gas Reform Implementatio n Committee (OGIC)

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he present arrangement where the GMD of the NNPC can be appointed or removed from office via radio announcement should be discontinued in the PIB. In addition, the present arrangement where the board of the National Oil company is chaired by the Minister of Petroleum Resources should similarly be discontinued as it essentially subjects the operations of the National Oil company to the murky waters of the Nigerian politics and this is not proper if the national oil company will run as a profitable and transparent company.” Role of trade unions Continuing, the Rivers State TUC Chairman argued that

“Trade unions have a crucial role to play if the final version of the PIB that will be passed into law will achieve the original objectives of the Oil a n d G a s R e f o r m Implementation Committee (OGIC). The Labour Unions especially PENGASSAN and NUPENG whose members work in the Nigerian oil and gas industry should undertake the following: The labour unions should as a matter of urgency request the National Assembly through the office of the Senate President and the Speaker of the House of Representatives to make public in the websites of the Senate and the House of Representatives, the authentic version of the Petroleum Industry Bill to enable Nigerians rebuild confidence in the PIB legislative process and encourage Nigerians participate in the PIB law making process.


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Solid Mineral

38 will regulate the Steel industry in Nigeria, it is only painful that what we have now are mere agreements signed by the Ministry and those companies that benefitted from the purported privatization. “We want your Ministry to come up with legal drafts especially as you already have experts as well as a legal unit, your officers should be able to come up with better drafts on the way forward for the sector after which you take the draft to t h e Fe d e r a l e x e c u t i v e Council for debate and finally the drafts comes to us at the national assembly to make inputs and come up with relevant laws, this is the best way i think all of us can go.”

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Steel Factory

NASS tasks ministry on development of steel sector *Say N120bn required to revamp sector Oscarline Onwuemenyi

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B U J A Worried by the comatose state of the nation’s steel s e c t o r, t h e N a t i o n a l Assembly on Monday charged the Ministry of Mines and Steel Development to do more to develop the nation’s steel industry and make it more viable for investment. The Chairman, House Committee on Steel Development, Hon. Saddique Asema, who noted this during an oversight visit to the Ministry of Mines and Steel Development, also urged the Ministry to come up with relevant draft legal framework that would redefine the sector that could

also be considered by the legislature. He noted that no matter the transformation agenda pursued by the present administration, Nigerians and Nigeria’s economy may not benefit maximally except the Steel sector is fully developed, adding that a viable steel industry makes up for a large part of every development indices of any developed country.

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e stated that, “At times I begin to worry why the Executive cannot and has continued to refuse to put in money to revamp the steel sector especially that of Ajaokuta,

Delta Steel and Aladja. It is on record that no country can be said to have truly developed without a well-developed steel industry, and Nigeria has been playing with this sector for many years. “All we need to bring back these critical industry is not more than N120 billion; it is my hope that this administration finds this money from other sources to bring back our steel industry before we can go ahead to privatize them if necessary.” The legislator decried past administrations for not giving the needed attention to revamp the steel projects in Nigeria, stressing that, “I can assure you that apart from the

government of Alhaji Shehu Shagari who put so much funds to develop the sector, other successive administrations have abandoned the projects and the industry at large.

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ccording to Asema, with the steel sector fully developed, Nigeria would be a true giant of Africa. He also noted that currently, there are no laws that guide or regulate the sector, hence the many failed attempts to privatise some of the steel companies in the country. Asema said, “Presently, there are need for laws that

e equally directed the Minister of Mines and Steel Development, Arch. Musa Mohammed Sada to press it on the Presidency to go back to the resolutions passed by the 6th National Assembly on Steel Development, stressing that if the resolution is revisited by the Executive, it will also go a long way to address the sharp practices in the sector. Earlier, the Minister of Mines and Steel Development Arch. Musa Mohammed Sada told the committee that the ministry has already stated the drafting of such legal frame work to reposition the sector noting that the ministry still needs the Committee to approve its 2012 budget to enable it get sufficient funds to organize local and international fora in view of drawing inputs from inter national and local experts to contribute to such drafts before they are passed to the Federal executive council for considerations. The Minister assured the committee that the present administration was determined to bring back the still projects so that the overall economy could be galvanized, adding that the rot that has taken place over many decades cannot be cleared overnight. Sada promised that the ministry will work with the committee to craft the necessary regulations to guide the activities in the sector the benefit of the country.


Solid Mineral Oscarline Onwuemenyi

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n its bid to expand the solid mineral sector and harness it for sustainable development and growth, the Federal Government has embarked on far-reaching reforms in the sector. These reforms ranged from the creation of technical departments and agencies in the Ministry of Mines and Steel Development to the enactment of Nigeria Minerals and Mining Act 2007, and the development of the new Mining Regulations has ushered in a new regime of transparent mining and mineral titles administration in the country. Over this period, government has invested heavily in the sector through comprehensive geo-scientific information gathering to the creation of enabling environment for investment opportunities in the sector.

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Investing with ease in Nigeria’s mining industry *As FG lays emphasis on security of titles

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peaking last week at a w o r k s h o p o n Investment Opportunities in the Nigeria Mining Sector, in Abuja, the Minister of Mines and Steel Development, Arc. Mohammed Musa Sada, explained that the Federal government has emphasized the development of best practices in the solid mineral sector and has led by example in the area of efficient and proactive regulations to guide activities, as well as ensuring the security of mining titles through the formalization of the Mining Cadastre Office which will serve as the hub of mining licensing and securitization of titles. According to Sada, “We have so far come to a stage where the guidelines, legislations and regulations are well in place. The next stage is for action proper; that is why we have decided to go into partnership with organizations and countries to bring in the kind of technology that we require to work in this sector. We have had extended discussions with the Swedish government through their embassy in Nigeria. Swedish companies are some of the leading manufacturers of heavy mining equipment like drilling rigs, which is the one of the most important machinery needed in this country at this time to do further exploration works at the various mines.

Local Miners

“Currently, we have over 10,000 exploratory licenses out there, and each and every one of these licenses will require one type of rig or exploration machine or the other. Through this workshop, we aim to expose some Nigerian companies and other investors to the machines that they require for their activities.”

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e ex p l a i n e d t h a t during the workshop also there will be discussions over how companies can acquire the heavy machinery and equipment needed for exploration in the sector. “Some of the equipment are very expensive and may be

beyond the reach of some companies. So, we will be looking at ways and means of making these equipment available including contracting, hire-purchase and renting to people who need them, so that we can begin to achieve in more concrete terms some of the exploratory licenses that we issued, and we will now start coming through with data and information that is required for effective mining activities,” Sada stated.

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n the government side, the Minister noted that emphasis is being placed on enforcing the security of mining titles in

order to boost the confidence of i n v e s t o r s i n t h e s e c t o r. According to him, “G o v e r n m e n t i s d o i n g everything it can to ensure that mining titles are secure, and we consider this as one of the most important aspects of the reform with the economy. we make sure that when we give the miner his title, that title is secure and cannot be overturned unless there is excess breach of our r e g u l a t i o n s o r, w h e r e necessary, if we have to enforce our ‘Use it or Lose it’ policy.”

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ada explained some of the incentives being provided by government to

include exemption from customs and import duties in respect of plant, machinery and equipment, and accessories imported exclusively for mining operations. “This administration has also approved an expatriate quota and resident permits in respect of approved expatriate personnel and personal remittance quota for expatriate personnel free from any tax imposed by any enactment for transfer of external currency out of Nigeria,” he said, adding that permission has also been given for remittance of foreign capital in the event of sale or liquidation of mining plant.


Freight

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government but nothing has done about it. Presently, the channel is 6.4 meters, thereby limiting the size of vessels that can come to the ports. If the channel can be dredged to 7 or ten meters then bigger ships can come into the ports and this will make the gover nment generate more revenue and this will g e n e r a t e m o r e employments for us. Secondly, the issue buoys have also become a challenge as the channels are buoyed any more. Before now, the channels were buoyed from the fair way buoy to the harbour. There are long overdue to be changed but they have lost to the waves while other went under.

ndigenous marine pilots under the aegis of Escravos River Pilots Nigeria Limited have been rendering marines pilot services for more than ten generations, in this interview with sweetcrude’s Godwin Oritse, Captain Solomon Perebo stated the people of Gbaramatu kingdom first offered such services to Europeans as far back as 1888. He also spoke about the challenges they are currently facing which to a large extent have put their services in jeopardy. Excerpts: Can we meet you? My names are Captain Solomon Samsom Perebo of the Escravos River Pilots Nigeria Limited, we render marines pilot services to merchants vessels calling at the ports of Warri, Koko, Sapele , Burutu and Aladja. How has the company been in existence? This company has been even before the independence of this c o u n t r y, h o w e v e r, w e inherited this trade from our great grand fathers as far as the late 17th century. This was when the Portuguese first came to this part of the country for their trade.

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uring that our forefathers who were fisher men met these foreigners and offered to guide them through the deep and shallow parts of the channels. However, ,we are have been piloting ships from Forcados channels, the Forcados river used you be channel to the port but b e c a u s e t h e Fo r c a d o s channel is not as deep as the Escravos channel, the Government of Sir Abubakar Tafawa Balewa approved the use of Escravos channel which gave birth to the Delta pilots Union an organisation that was registered in 1958 which was later changed to Escraos ship pilots Nigeria Limited in 2009 currently working in collaboration with the Nigerian Ports Authority (NPA) and Delta is the only place you have private pilots in Nigeria, a trade that was inherited from our forefathers.

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ost of have gone the basic training,

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Captain Solomon Perebo

We represent generations of marine pilots —Captain Perebo If the channel can be dredged to 7 or ten meters then bigger ships can come into the ports and this will make the government generate more revenue and this will generate more employments for us

some were trained at the M a r i t i m e Ac a d e m y o f Nigeria, (MAN) Oron Akwa-Ibom State after

which we moved on to the Maritime Regional University in Accra, Ghana. Some of us were sponsored by the NPA and NPA have also concluded plans to sponsor some of our people to the United Kingdom for training before the end of the first quarter of this year. What are the major constraints you do have? The constraints we have right now is the Escravos channel, that channel needs to dredged .

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he channel has not been dredged since

1997 and there is lot of siltation taking at the channel every now and then and this has affected the number of vessels that calls at the Delta ports. Unfortunately, the bar determines the type of ships that comes in the ports. We use this medium to appeal to the Federal Government, the state government and other stakeholders like Chevron, Shell who use this channel from time to time to help dredge the channel.

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e have complained about this to the

s I speak with you we do not have a single buoy, if we were not use to the channel, to bring in vessels would have been a problem. At a time, local pilots were seen as saboteurs who held vessels to ransom, do we still have such problems here? That problem is stopped, we are saboteurs, I want to correct that impression first and fore most, we want to improve the entire shipping business in the Delta ports we cannot go against the system. What happened before now was that NPA at a point used the Navy to push us out of the system so that we will have access to ships and it is through these piloting services that we make a living. H o w h a s y o u r involvement in the shipping business helped i n p r o t e c t i n g government’s interest in the Delta ports? Since we entered into agreement with NPA, I am personally went to Lagos to sign the agreement on the 22nd of February 2010 and ever since then there has been a healthy working relations with the NPA .

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hat is the staff strength of the company? The staff strength of the company presently is 54at is the staff strength of the company?


Topher Zang Ad


Freight

42 NPA flags off $124.4m port facility in Lagos Godwin ORITSE

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Members of the Escravos Pilots Limited at the visit of the House of Representative Committee's visit to Ekerenkoko in Gbaramatu Kindgom in Delta State last week

NIMASA pushes for maritime university in Ekerenkoko

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HE Nigerian Maritime Administratio n and Safety A g e n c y (NIMASA) has concluded plans to set up a maritime University and a shipyard in Ekerenjojo in Gbaramatu kingdom ofcDelta state. Disclosing this at an inspection ceremony in Ekerenkoko, in Gbaramatu k i n g d o m N I M A S A’ s D i r e c t o r- G e n e r a l M r. Patrick Akpobolokemi said that as soon as the National Assembly approves the proposal work will commence immediately. Akpobolokemi who before the ceremony took members of his entourage which included members of t h e H o u s e o f Representative on Marine transport to pay homage to the king of the Gbaramatu kingdom said it was necessary to get the

At the completion of the project, Nigerians, particularly youths from Gbaramatu will be trained and possibly deployed to service blessing and approval of the king before the commencement of the project.

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lready, over 400 hectares of land has been allocated for the project and Akpobolokemi

is working around the clock to ensure the realisation of the project.. He also said that the purpose of the visit by his team is to see the size of the land and the community’s assurance amongst other things. Akpobolokemi who addressed the king in pingin English said that it was very important that some of these issues are taken of before the commencement of the project.

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lso speaking at the site seeing visit, House Committee on Marine transport Honourable Ifeanyi Ugwuanyi said that with calibre of the king of Gbaramatu, whatever federal presence that located in the community is assumed to be fully protected. Agwuanyi who also expressed concern over the issue of compensation was

further assured that no such thing will be demanded by the community. Giving this assurance, Chairman of the E ke r e n ko ko f e d e r a t e d community Chief James Tangbolasi said “I want to assure that the people of E ke r e n ko ko f e d e r a t e d C o m m u n i t y a n d Gbaramatu in kingdom in general will give you the desired assurance to make this dream a reality”. Vanguard gathered that at the completion of the project, Nigerians, particularly youths from Gbaramatu will be trained and possibly deployed to service the oil and gas industry.

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owever, Vanguard could not ascertain where funds for the project will be gotten as the law only allows NIMASA to spend 5 percent of its ear nings on Maritime Academy of Nigeria in Oron Ajwa-Ibom State.

HE Nigerian Ports Authority (NPA) last weekend officially flagged- off a project for the re-development of the port facilities at the ‘Bull Nose’ area of the Lagos Port Complex. It is to be built and operated by Messrs Eko Support Services Limited. Speaking at the flag- off ceremony last weekend, the Managing Director of t h e N i g e r i a n Po r t s Authority, Engr. Omar Suleiman said that the projectwas recently approved by the Federal Executive Council (FEC) for a whopping $124. 4Million. According to Suleiman who was represented by the Acting Executive Director, Engineering and Technical Services, Engr. Sunny Nwobi, the developer of the project; Eko Support Services Limited is to build and operate the terminal for a lease period of 20 years for oil and gas operations.

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he project entails the construction of; new 400m x 30m quay wall and deck on piles jetty in front of the existing facility, construction of finger jetties to support boat operations, dredging and reclamation, to carry out Environmental Impact Assessment (EIA), report demolition of the four finger jetties among others. Speaking, Engr. Nwobi s a i d t h a t : “ We g i v e appreciation to the President, Dr. Goodluck Jonathan who with the FEC gave approval for all these important projects, it is a project that we ourselves will have done a long time ago, but because of the port reform challenges, by the time its completed, Lagos port will witness a new investment and it will introduce new dimension into the Lagos area”.


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Freight

44 participants/visitors from within and outside Nigeria are expected to grace NIMAREX 2012. A pre-event dinner to unveil the theme of NIMAREX 2012 has been scheduled to hold in Ikoyi, Lagos on Thursday next week.

NIMASA to increase maritime academy funding by one percent Godwin ORITSE

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Mr Patrick Akpobolokemi, Director – General of the Nigerian Maritime Administration and Safety Agency (NIMASA) and Chairman House Committee on Marine Transport Hon. Ifeanyi Ugwuanyi and deputy Chairman of the Committee during a visit to the site of the proposed Maritime University in Ekerenkoko in Delta state.

More speakers announced for NIMAREX 2012 Godwin ORITSE

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NPA’s Acting Executive Director, Engineering And Technical Services, Engr. Sunny Nwobi (Second Left) And The General Manager Of Eko Support Services Limited, Mr Seni Edu ( R) At The Official Flag-Off Ceremony Of The Bull Nose Port Facility Of Eko Support In Apapa, Lagos Last Week.

HE Secretariat of the Nigeria Maritime E x p o (NIMAREX) 2012 Planning Committee has released the names of more Speakers who have confirmed their availability to attend Africa’s biggest maritime event. Executive Secretary of NIMAREX 2012, Bolaji Akinola, in a statement issued in Lagos stated that International Maritime Organisation (IMO) Secretary General, Mr. Koji Sekimizu; Chairman of LADOL, Mr. Ladi Jadesimi and Executive Secretary Nigerian Content Development & monitoring Board (NCDMB), Engr. Ernest Nwapa, have all confirmed their attendance at NIMAREX 2012 as Speakers. Other confirmed Speakers, according to Akinola include Chief Executive Officer of

Nigerian Shippers’ Council, Capt. Adamu Biu ; Managing Director of Nigerian Ports Authority ( N P A ) E n g r. O m a r Sulaiman; Director General of the Nigerian Maritime Administration & Safety Agency (NIMASA) Mr. Patrick Akpobolokemi and Mrs. Monica Mbanefo of the International Maritime Organisation (IMO). He said Nigeria’s President Goodluck Ebele Jonathan is the Chief Host of NIMAREX 2012 while the Host is the Honourable Minister of Transport, Senator Idris Umar.

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he opening session of the expo will be chaired by former Head of State, Retired General Yakubu Gowon. NIMAREX 2012 has been scheduled to hold from 13th to 15th March 2012 at the Expo Centre, Eko Hotel & Suites, Victoria Island Lagos. No fewer than 100 exhibitors and 1,000

HE Nigerian M a r i t i m e Administration and Safety Agency (NIMASA) is increase the funding of the Maritime Academy of Nigeria Oron Akwa-Ibom State by just 1% (one percent) It was gathered that the move to increase the funding of the school by one percent from its initial 5% of NIMASA earning was necessitated by growth of the institution. Vanguard learnt that there has been an increase in the school’s population and this development is beginning to overstretch the facilities in the academy. Besides the DirectorGeneral of the Nigerian Maritime Administration and Safety Agency (NIMASA) Mr. Patrick Akpobolokemi who is pushing for the increase, some legislators it was further gathered are also in support of the increased funding for the institution. Sources close to the National Assembly disclosed that the increment when finally approved, will included in the 2012 budget of NIMASA.

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he law setting up NIMASA with regards to the funding of the Maritime Academy in Oron stated that not less than 5% percent of agency’s earning must be given to the institution an interpretation that means that the funding could be more than 5% percent. Effort to get confirmation from the NIMASA’s Director G e n e r a l M r Pa t r i c k Akpobolokemi was futile as his phone lines were switched off.


Technology

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Jim-Rex Lawson MOSES

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h e importance, uses and o v e r a l l benefits of petroleum otherwise known as rock oil can not be overemphasized. From factories, machineries and transportation to electricity generation, crude oil has become a major source of energy that affects all sectors of any nation and its economy. But important as this natural resource may be, spillages of this product on the environment especially marine, which could be caused through carelessness, natural disasters like weather conditions and earthquake, vandals, terrorists, etc., could be sometimes very disastrous, depending on the volume of the oil spill which could affect the fishing industry, resorts and recreation areas, water supplies for drinking and industry amongst others.

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hat is an oil spill? According to the encyclopedia of Earth, an oil spill is the accidental petroleum release into the environment. On land, oil spills are usually localized and thus their impact can be eliminated relatively easily. In contrast, marine oil spills may result in oil pollution over large areas and present serious environmental hazards. The primary source of accidental oil input into seas is associated with oil transportation by tankers and pipelines (about 70%), whereas the contribution of offshore drilling and production activities is minimal (less than 1%). Wikipedia, the free encyclopedia, an oil spillis defined as the release of a liquid petroleum hydrocarbon into the environment, especially marine areas, due to human activity, and is a form of pollution. Response Techniques oing by history and study of oil spillages, no two oil spills

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Picture showing a containment technique with a workboat

Effective oil spill response techniques and prevention have been found to be the same because of the variation in oil types, locations, and weather conditions involved. But, broadly speaking, there are four main methods of response. Leave the oil alone so that it breaks down by natural means. If there is no possibility of the oil polluting coastal regions or marine industries, the best method is to leave it to disperse by natural means. A combination of wind, sun, current, and wave action will rapidly disperse and evaporate most oils. Light oils will disperse more quickly than heavy oils. Besides the method described above, other CONTINUES ON PAGE 46

Picture showing In-situ burning


Technology

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Picture above showing Weather Modification and Biochemical Decontamination technique, Courtesy of Google images

Effective oil spill response techniques and prevention Continued from page 45 three possible clean-up techniques which must be adopted by response teams… depending on the volume of the spill should include; Dispersant of chemicals, Bioremediation and In-situ burning. Dispersant Chemicals: hey are chemicals which enhance the natural dispersion of oil. It is the most common method employed for oil slicks, especially when mechanical recovery seems impossible. These dispersant chemicals are

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used to reduce the extent of damage that could be caused by the floating oil. However, there are some limitations on these chemicals as they can cause damage themselves if they are not controlled. These chemicals work by increasing the rate of natural dispersion. When the dispersant is sprayed onto the oil slick the oil forms droplets of variable size (thereby dispersing them), the larger droplets float and the smaller droplets remain in suspension. Dispersants

h a v e t w o m a i n components, a solvent and a surfactant.

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ow they are applied: workboats can be used for small spills in confined areas of water, but for the larger, off-shore oil slicks large aeroplanes are used and for small oil slicks near the shore small aeroplanes and helicopters are used. A spray of “rain drop” sized droplets is used in order not to lose too much in wind drift. Limitations: chemical

dispersants have little effect on oil with a high viscosity as the chemicals run off the oil before the solvent can work. Oils that the dispersants have an initial effect on become resistant after a while because the viscosity increases as the more volatile oils evaporate. In-situ burning: he name in-situ burning is the name given to the burning of spilled oil while it is still at sea. Technically this seems like a good method which

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will remove most of the oil, but in reality, there are a number of problems associated with this technique which include: production of a lot of smoke, for mation of residues, ignition of oil, and safety concerns. Smoke: when oil burns, large clouds of thick black smoke are produced which react with the normal clouds and causes oily rain which contaminates farm crops and animals. Residue: the residues formed by in-situ burning CONTINUES ON PAGE 48


Alduco Ad


Technology

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Picture of a blimp and helicopter, being used in tandem to contain an oil spill. Courtesy of Google images

Effective oil spill response techniques and prevention Continued from page 46 are heavily viscous and are very hard to remove from the sea and the shorelines. Residues of this nature affect fishing gear, boats and the shoreline. Some of the residues also sink and can poison the sealife and is almost impossible to recover.

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gnition: the time it takes for the ignition and fire safety devices to be set up many of the lighter fractions of the oil will have already evaporated making ignition more difficult. Ignition can be done by different methods, from simple petrol or diesel soaked cloths to sophisticated devices like a

flamethrower attached to a helicopter otherwise known as a helitorch. Bioremediation: Biodegradation is the name for the two processes used in promoting the natural biodegradation process oil spilled oil. The two processes are bioaugmentation (application of microbes to degrade oil) and biostimulation (addition of nutrients).

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ioaugmentation: this process is used in many waters (both sea and fresh) to degrade waste such as oil as well as raw sewage and industrial discharges. Microbes are added to the water to feed

on these wastes. The species of microbes added will not compete with the naturally occuring species so that degradation is as efficient as possible. Biostimulation: for the microbes to work efficiently there has to be enough phosphorus, nitrogen and carbon available. In the case of an oil spill, the carbon level escalates and the nitrogen and phosphorus levels are too low to allow the microbes to work at optimal efficiency. Fertilisers containing these two elements are added to enable microbes degrade the oil. Limitations: despite how attractive these processes

seem, they cannot be taken at face value. If bioremediation is used on oil floating on the surface, the materials added will quickly dilute and be lost. Oxygen is also required, which is not present in the oil itself, only at the water/oil interface. Bioremediation is therefore not suitable for the removal of large volumes of oil. The processes of bioremediation and bioaugmentation currently available are too slow to prevent the majority of the oil from reaching the shoreline. They can be physically and biologically harmful in some habitats such as salt marshes.

Prevention ince cleanup after an oil spill is so

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ineffective and so difficult, and does not always fully rehabilitate affected areas, prevention is most important. Effective prevention plans should include: *Improved piloting; training of ship and tanker crews *Training of storage and pipeline facility crews *Enforcing pollution rules at sea *Building more spillresistant vessels *Maintaining vessels and pipelines Preparing for spill response through effective training, planning (contingency planning), and practice drills. Oil Spill Containment:


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Ijaw oil communities in Delta, Bayelsa, besiege to Shell Emma AMAIZE and Akpokona OMAFUAIRE

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ARRI – IJAW oil communi ties in Delta and Bayelsa states, Monday morning, stormed the Shell Nigeria Exploration and P r o d u c t i o n C o m p a n y, SNEPC, office, at Edjeba, near Warri, Delta State, protesting alleged “insensitivity and neglect” by the oil firm following the December 21, 2011, Bonga oil spill. The protesters, including men, women and youths, carried placards, bearing inscriptions such as, “Save Our Souls, send us relief materials”, “Stop discrimination/ intimidation on us”, “No small and or big communities treat all equal”, “Imminent violence by Oil spill, victims SPDC is adamant to their obligatory

The protesters, including men, women and youths, carried placards, bearing inscriptions such as, “Save Our Souls, send us relief materials duties”, “SPDC Bonga (EA) Spill has damaged our Rivers”, “SPDC ignore Bonga Oil Spill victims now dying in silence”.

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orporate Media Relations Manager of SNEPC, Mr. Tony Okonedo, who spoke to Vanguard on phone, said he was aware of

the protest by some communities, demanding for relief materials over alleged oil spill. He said the protesters had already dispersed and since the company was not disinclined to dialogue, it was already discussing with them on their grievances. On the Bonga oil spill, Okonedo, said the company was waiting for the result of the scientific investigation into the oil leak, which could be out in the next few days, before making further comments on the claim by some Niger-Delta communities.

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ecretary General of one of the protesting communities, Kuku-gbene in Warri South West Local Government Area of Delta State, Mr. Prus Puopu told newsmen, “Since the oil spillage happened, it affected our community a lot and Shell has not compensated or sent

us relief materials. They should pay attention to our communities. We want them to call us for negotiation; they have been calling other c o m m u n i t i e s f o r negotiations, so we want them to call us also.” His Ebibogbene c o u n t e r p a r t , M r. Etimadimene James said, “The oil spillage ravaged our community. Now, we can’t fish in the river, our water has been polluted, the incident has hampered our economics activities of fishing and farming”. “Oil is still flowing to other communities in the riverine area, so SPDC should look for a way to stop the flow”, he added.

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h a i r m a n o f I d e i k e g b e n e community, John Warenu, asserted that the protesters would occupy the company’s gate until it agreed to negotiate with them.

JTF arrests 7 suspects, confiscates oil bunkering equipment Samuel OYADONGHA

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enagoa - The Joint Task Force in the Niger Delta codenamed Operation Pulo Shield has arrested seven suspected crude oil thieves in Bayelsa State. The suspects were nabbed by men of the Joint Task Force on routine patrol of the creeks of Southern Ijaw local government area of the state. Spokesman of the Joint Ta s k Fo r c e , L t . C o l Timothy Antigha, who disclosed this in Yenagoa, said the suspects were arrested at Onyeregbene, L a s u g b e n e a n d Igbomaturu communities. His words, “in line with its mandate to eradicate the menace of crude oil theft, illegal refining of petroleum products and illegal oil bunkering, the J o i n t Ta s k F o r c e , Operation Pulo Shield have arrested 7 suspected pipeline vandals in Onyeregbene, Lasugbene and Igbomaturu communities, in Southern Ijaw Local Government of Bayelsa. “The ar rests were effected during a routine patrol on 28 January 2012.”

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Ijaw Community

e gave the names of the suspects as Emmanuel Prophet, Patrick Enoch, Douglas Dickson, Goodluck Ala, Foetus Job, Plain Mazellen and Suwoton Aladege.. Items recovered from the suspects, he said, include a generator set, pumping machine, 8hp Outboard engine, a pumping valve, a speed boat, and N42, 010,00 among other personal effect. He added, “the items the suspects were found with are the usual used in vandalising pipelines before crude oil is siphoned.


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Collapsing bridge

Ikoli River bridge may collapse Samuel OYADONGHA

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enagoa U N L E S S urgent steps are taken to salvage the Goodluck Jonathan Bridge across the Ikoli River, a tributary of Nun River, the ailing structure may collapse in no distant time. The condition of the bridge which is an important link in the government effort to connect Ayama, Oporoma, Ukubie communities in the deep swamp of Bayelsa central senatorial district, one of the three senatorial link route to mainland Yenagoa. The structure is not only of strategic importance to the far flung communities in Southern Ijaw council area

but also to residents of the satellite communities in the capital city like Ogu, Akaba, Famgbe and Ogbogoro who use the bridge daily to access the capital city for work, market, school and other social engagements.

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he condition of the structure, the single longest bridge to be constructed across any river in Yenagoa, which was commissioned four years ago for public use has further deteriorated with the head pillars showing signs of crack fueling fear among residents of its imminent collapse. Ironically the structure was not 100 per cent completed by the contractor, Julius Berger before it pulled out of the Niger Delta in the wake

of the security challenges posed by the youth militancy which claimed the life of one of its personnel when a kidnap attempt by armed gunmen went awry. But the Bayelsa government went ahead to commission the bridge for public use about four years ago after hurriedly using an indigenous contractor to complete the work.

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ince the company pulled out of the Niger Delta region, no effort conscious efforts had been made to re-award contract for the completion of the bridge to a competent construction firm. Consequently, the sand dump used for the bridge head is gradually being

washed away making the structure susceptible to collapse due to the inability of the construction firm to reinforce the sides with mixed concrete in line with standard practice before its withdrawal from the region. Though the troubled portion had been rehabilitated in the past by some concerned residents and some two years ago by FERMA the condition of the bridge has further deteriorated when Sweet Crude visited the structure last weekend.

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owever the state of the bridge is now a source of grave concern to residents especially with heavy rainfall already being experienced in the

predominantly riverine state. Sweetcrude observed that a greater portion of the Yenagoa end of the bridge is now on the verge of caving thereby making it a difficult venture for two vehicles to negotiate the narrow passage. To further compound the woes of the collapsing structure, traders at the Swali market have turned the craters on the side of the bridge to dump site a development that is bound to accelerate the erosion menace. Lamenting the deteriorating state of the bridge, a resident of O k a b a c o m m u n i t y, Thompson Ebiotu said, “it is painful to see this imposing edifice in this terrible condition. What started as minor erosion around the bridge head is now threatening to cut off communities across the river from the state capital.”

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e pleaded with t h e s t a t e government not to allow the worst to happen before tackling the erosion menace now threatening the bridge. Another concerned residents lamented, “the situation is getting out of hand. We had hoped that the state government would make good its word to commence work on the bridge this dry season, but nothing has been done. Our only prayer is that this bridge should not collapse one day. We are all endangered, but what can we do?”


52 JTF arrests 7 crude oil thieves, confiscates equipment in Bayelsa Samuel OYADONGHA

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he Joint Task Force in Nigeria’s Niger Delta c o d e n a m e d ‘Operation Pulo Shield’ has arrested seven suspected crude oil thieves in Bayelsa State. The suspects were nabbed by men of the Joint Task Force on routine patrol of the creeks of Southern Ijaw local government area of the state. Spokesman of the Joint Task Force, Lt. Col Timothy Antigha, who disclosed this in Yenagoa, said the suspects were arrested at Onyeregbene, Lasugbene a n d I g b o m a t u r u communities.

Demonstrators

Bayelsa community threatens Shell operation Samuel OYADONGHA

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enagoa - The people of N e m b e Kingdom in the Bayelsa East senatorial district have threatened to disrupt the Anglo-Dutch oil giant, Shell Petroleum Development Company (SPDC) operations over what they described as the refusal of the company to provide their community electricity. The Nembe Kingdom through its Oil and Gas Committee chairman, Chief Nengi James-Eriworio yesterday called on the oil giant to fast track the ongoing power project in the area with a view to connecting the coastal island to the Nembe Creek turbine on or before March, 2012 or risk the shutting down of its operations in the area.

The people of Nembe kingdom will no longer continue to die in silence and be patient over the deliberate denial of power supply by SPDC to its host community

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amenting the plight of his people he said, “ It is appalling that the Nembe Kingdom which contributes over 90,000 barrels of crude oil per day to the Nigerian state and boasts of hundreds of oil wells and four flow stations operated

b y S h e l l Pe t r o l e u m Development Company (SPDC) has continued to live in perpetual darkness. “The people of Nembe kingdom will no longer continue to die in silence and be patient over the deliberate denial of power supply by SPDC to its host community particularly the Nembe City in spite of the fact that the oil multinational has carried out oil exploration for decades with little or no significant contribution to the lives and well being of our people.

It is instructive to note that the power generating plant powering the community has not only broken down but can no longer be maintained because of the increase in the electricity consumption demand occasioned by the ever growing population of the community.”

He warned that if nothing was done to power the Nembe Kingdom, “ we would be compelled to mobilize our women, children and men on a peaceful protest to occupy all SPDC operational areas in the kingdom and force SPDC to suspend its oil exploration activities forthwith.”

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escribing as unacceptable the current casual employment offered their youths the community called for the employment of their people into top management positions as well as providing them on-the-job training opportunities. “As a peace loving people, we implore SPDC not to strain the har monious relationship currently enjoyed by the company by taking our demands for granted,” the community warned he As a multinational company, we expect SPDC to live up to its Corporate Social Responsibility to its host community in line with global best practices.

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is words: “In line with its mandate to eradicate the menace of crude oil theft, illegal refining of petroleum products and illegal oil bunkering, the Joint Task Force, Operation Pulo Shield have arrested 7 suspected pipeline vandals in Onyeregbene, Lasugbene a n d I g b o m a t u r u communities, in Southern Ijaw Local Government of Bayelsa. “The arrests were effected during a routine patrol on 28 January 2012.” He gave the names of the suspects as Emmanuel Prophet, Patrick Enoch, Douglas Dickson, Goodluck Ala, Foetus Job, Plain Mazellen and Suwoton Aladege.. Items recovered from the suspects, he said, include a generator set, pumping machine, 8hp Outboard engine, a pumping valve, a speed boat, and N42,010,00, among others. He added, “the items the suspects were found with are the usual used in vandalising pipelines before crude oil is s Iphoned. In the light of the negative effect of pipeline vandalism on the economy and environment, the JTF implores the general public to continue to cooperate with the agency by promptly reporting suspicious elements.


53 House committee laments under utilization of ports in eastern zone Jimitota ONOYUME

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Illegal refinery

NIGER DELTA: Unrest declines, oil theft, illegal refining climbs Samuel OYADONGHA

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enagoa - While unrest in the Niger Delta has s h a r p l y declined since a 2009 amnesty deal, crude oil theft and illegal refining of petroleum products has increased in the region in spite of the clamp down on the illicit trade by the country’s security forces, the Joint Task Force codenamed Operation Pulo Shield. Interestingly, Pulo an Ijaw word meaning oil. The implication is that the JTF is now all out to stamp out this business which is causing more harm to the region’s already fragile ecosystem. Only last week, the Joint

Task Force nabbed another batch of suspected crude oil thieves in Bayelsa State and items recovered from them include a generator set, pumping machine, 8hp outboard engine, a pumping valve, a speed boat, and N42, 010,00 among other personal effect.

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he suspects were nabbed by men of the Joint Task Force on routine patrol of the creeks of Southern Ijaw local government area of the state. Influential Nigerians and even the military itself have been accused of involvement in the lucrative illegal oil business, which include a relatively sophisticated level of theft and refining. But the military has denied

involvement in the practice. Oil firms blame theft and sabotage for the majority of oil spills in Nigeria, a claim strongly disputed by environmental activists. Nigeria is one of the world’s largest oil producers, but its Niger Delta region remains badly polluted and deeply impoverished.

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t was reliably learnt that last one year alone, the countr y ’s security forces destroyed no fewer than 6000 illegal refineries scattered across the mangrove swamp of the delta. Sadly, only about 30 per cent of the refined oil is recuperated according to report while the remaining 70 per cent is discarded into the

environment. A security source said, the country is losing about losing about $15.8billion annually to oil thieves operating in the mangrove creeks of the Niger Delta who are not only bleeding the economy but also compounding the woes of the already fragile environment.

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ccording to the source, the fact that electricity supply from the national grid to the communities is not reliable has made petrol powered generators the main form of power supply across the Niger Delta making illegal refining a thriving business in the region for the unemployed youths who are not aware of the long term effect on the environment and the health of their people.

ORT HARCOURT: H O U S E o f Representative Committee on Customs and Excise has called for measures to be put in place to ensure optimum utilisation of Ports in the eastern zone. Deputy Chairman of the Committee, Hon Kingsley Chindah who led members of the committee on a visitation to Rivers state expressed worries with what he observed as underutilisation and performance of ports in the zone. The committee further lashed at one of the service providers at the Onne Port, for poor service delivery, noting that it was really disturbing that almost five years after it signed a contract to provide fixed scanner for Area 1 Operations of the Customs in Port Harcourt it was yet to deliver.

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ontinuing, the House Committee said the firm also defaulted in the contract when it provided a mobile scanner at Onne Oil and Gas free zone as against the fixed scanner contained in the contract papers. The scanner according to those on ground that briefed the law makers was not reliable as it was breaking down very often thus affecting smooth operations in the area. The House Committee deputy Chair man, Hon Chinda later directed men of the Customs to come up with detail information on losses suffered so far as a result of the epileptic state of the scanner and other details. “The issue of scanning machines, unfortunately SGS is not here, but let’s have an idea of how much we have been losing due to the inadequacy of the scanning machine we have now or its incessant break down. You said that has affected your revenue profile, we will want to have a clear picture of how much we have been losing as a r e s u l t o f t h a t challenge”,Chinda told men of the Customs.


54

Chevron sends relief materials to Bayelsa communities

and women but we know that what happened was an accident, and because we are good neighbours with NNPC/Chevron, our people volunteered to assist in the rescue and evacuation of the workers on the rig as at the time of the incident,” they stated.

Samuel OYADONGHA

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enagoa Community leaders in Bayelsa State under the a u s p i c e s o f t h e NNPC/Chevron’s Global M e m o r a n d u m o f Understanding (GMoU) have lauded the efforts of the company in providing relief materials tagged “thank you” gift items to the people in appreciation of their assistance during the unfortunate gas rig fire incident that occurred in an offshore location. Trucks load of rice, garri, beans and tubers of yam, were yesterday being loaded in mammy boats for onward transporation to the communities on the Atlantic f r i n g e a t t h e Ye n a g o a Government jetty. Others include cows, several jerry-cans (25 litres) of groundnut oil, palm oil, frozen fish/chicken, cartons of beverages, cartons of tin tomatoes, bags of salt, and sugar worth several millions of naira have been dispatched to communities.

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he Chairmen of “Keffes and Dodo River Regional Development Committees under the GMOU, Messrs Christopher Tuodor and Berry Negresse made the commendation in Ye n a g o a d u r i n g t h e inspection and receipt of food

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Relief packages

items provided by the company for the communities. According to them, the g e s t u r e b y t h e NNPC/Chevron Joint Venture was indicative of the company ’s social responsibility and sensitivity to the needs of the people. The provision of the relief materials they said would go a long way to further strengthen the cordial relationship the company and the communities. “O v e r t h e y e a r s , o u r c o m m u n i t i e s a n d NNPC/Chevron have had mutually-beneficial

The provision of the relief materials they said would go a long way to further strengthen the cordial relationship the company and the communities

relationship. It is unfortunate that a fire incident occurred on the offshore rig undertaking gas drilling operations for the company.

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ur people were naturally agitated due to fear of potential threat to human and aquatic lives,” they said. Stressing that the communities’ occupation was predominantly fishing, they noted that the concern for potential loss of means of livelihood was also paramount. “We are mostly fishermen

he RDC Chairmen t h a n k e d t h e NNPC/Chevron Joint Venture for showing appreciation of the people’s efforts in assisting the company when it needed support and said they would continue to assist in monitoring the situations until the fire is finally off. Meanwhile the government jetty in Yenagoa has been a beehive of activities for some days now as youths are engaged with loading of the food items into the mammy boats for transportation to the riverine communities. While some of the communities have already received their own items as at press time, the ferrying of the food items to some others is ongoing. As at press time, a contingent of Chevron officials are visiting the communities to carry the thank you message to the people, witness the distribution of the food items and undertake medical and environmental assessment of the area.

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n a related development, the Bayelsa State government has confirmed its commitment to continue to play mediatory role between the oil companies and the host communities. The Commissioner for Environment, Chief Robert Enogha regretted the high level of inconsistency in the report of the communities over environmental issues citing the gas rig fire as an example. He hinted that the State Ministry of Environment has developed a website that deals with environment issues, noting that the state government through the Ministry organized the first stakeholders’ summit on environment late last year and the oil companies also attended.


55

The

Question

johniyene@yahoo.com

THE LAMIDO SANUSI INTERVIEW:

Exaggerating the concept of Zakat

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Training session

NDDC steps up manpower training Jimitota ONOYUME

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O R T H A R C O U R T: NIGER Delta Development Commission, NDDC has stepped up manpower for the oil and gas sector with the graduation of forty of its trainees in far away Turkey as Inter national Welding Inspectors. The programme was handled by its t e c h n i c a l p a r t n e r, t h e Nigerian Institute of Welding, NIW. Commenting on the development, President of the NIW, Mr Solomon Edebiri said it would raise local participation in the oil and gas industry. According to him, as international welding inspectors they had been trained in constr uction, testing, formation and design. Adding that they would continue to be relevant to the economy on matters relating to exploration. “As long as we continue the process of extraction of oil and hydrocarbon in the ground we will continue to need international welding inspectors. Because the hydrocarbons would be transported through conduit lines and this is constructed with steel. So they have to be on ground to ensure the jobs

NDDC said they needed people across the nine states and it must be balanced in order with their oil producing quota, but to a certain level

are done to specification”. He said the training process lasted about six months from selection stage to graduation, noting that participants were all drawn from the nine member states of the region. “NDDC said they needed people across the nine states and it must be balanced in order with their oil producing quota, but to a certain level. Another thing we did was to ensure there was selection process which included aptitude test. And all who came top were selected but in all they came from the nine states of the region”. , he said.

pon making a decision to enter a commentary on this discourse I made a decision not to cheapen it by labelling the gentleman, Sanusi Lamido Sanusi as a sponsor, member or sympathiser of Boko Haram or by connecting him with a Northern agenda that may exist only in the imaginations of newspaper columnists! A simple definition of the Islamic principle of Zakat is the payment by the rich, privileged, able and free muslims of parts of their earnings to support specific categories of people. Lamido Sanusi, the CBN governor who drew graphic contrasts between the perceived imbalance in the distribution of federal resources with the upsurge of violence in the North, per Boko Haram is an Islamic scholar who does not only believe in but has given lectures on the subject of zakat. At a Kaduna conference in 2000, Malam Sanusi delivered a lecture on Islamic economics titled “Institutional Framework of Zakat: Dimensions and Implications.” Again at a 2001 seminar in Abuja he spoke on “Basic Needs and Redistributive Justice in Islam – The Panacea to Poverty in Nigeria.” Although the title of the 2001 paper was wider (poverty in Nigeria) the real discussion was unpretentiously narrowed to the Islamic North; in both discussions he espoused the mainstream position that Zakat is an instrument for redistributing income. Again in both papers he made a notable argument that government instead of the emirs of the North should play the role of redistributing Zakat. Sanusi Lamido is not the kind of man you don’t take seriously or whose utterances you spin jokes around. Apart from being the governor of the CBN, the man is heir presumptive to the Kano Emirate and an Islamic scholar of repute who obtained a degree in Sharia from the African International University, Khartoum, Sudan in 1997, sixteen years after graduating from the Ahmadu Bello University with a degree in Economics. From his antecedents, especially on the subject of Zakat (his view that government should assume the role of distributor) and his recent utterances on the distribution of resources, it would not be wrong to suggest that Malam Sanusi would have the federal government dump the principle of derivation and distribute the country’s resources Zakat style, whereby resources derived from the Niger Delta are distributed to the poor states of the North to breach the sharp inequities between states. While the operatives of Boko Haram are demanding the implementation of Sharia in the whole of Nigeria, that a Christian should never rule Nigeria again and a motley of other inanities, Malam Sanusi, the governor of our central bank, is postulating that the emergence of Boko Haram is traceable to the structural imbalance of the country’s economic structures. hose instructions at Ahmadu Bello does the malam rely on to posit that the federal government in a federal state is a distributor of economic resources? Is the learned malam falling into the mistake of the unenlightened who presume that the role of the federal government is to grab the economic assets of the component states for redistribution? Does the Malam not know that the whole essence of adopting federalism is the recognition of the absence of homogeneity, the acceptance that component units have different aspirations, priorities and developmental agenda? In agitating for their own states from old structures, applicants for states creation enumerate the many differences between them and units of the older states. Is it the malam’s idea of economic justice that Christian states in the Niger Delta should pay Zakat or cede their resources to develop muslim states in the North created in response to senseless agitation and the need for competitive multiplication for the coveted federal jobs and slots, instead of on the basis of self-sufficiency and viability? Can the CBN governor tell Nigerians how many times in the year the Accountants General of the 50 states of the United States, or the 28 states of India or the 26 states of Brazil, converge on Washington DC, New Delhi and Brasilia to share the resources of rich states for poor states? The oil companies in the state of Alaska which was bought from the Russians by the American government with federal money pay only tax to the American government. All royalties are retained by the state and not a cent of Alaskan oil money gets redistributed to poor states such as Mississippi to assuage some blackmail that the poverty in that state is engendering crime that could impact Alaska. Should we in the Niger Delta, a people of sound Christian convictions, continue to tolerate the deployment of our resources for the actualisation of agenda that run counter to our beliefs? Should we continue to play along while states are created for participation in the wealth of the Niger Delta? Should states of the Niger Delta underwrite the bills of other states that are not viable enough to provision their bureaucracies and populations? here is the economic sense in that, Mr. CBN Governor? The federal government in a federal state is a legation, a body of representatives who administer those interests that the component units share commonly, like currency, diplomacy, armed forces, etc, all enumerated in the exclusive legislative list and the component states source their own revenue. Federal funds are supposed to be deployed in states for emergencies, relief for disasters, federal infrastructure and federal administrative units within the component states, not doled out on consistent monthly basis to unviable states on the basis of demographic statistics. The moral behind the involvement of Malam Sanusi in the Boko Haram apology train is the inescapable conclusion that sympathy for the agenda of Boko Haram lies deeper than most Nigerians think and that more than a few intellectuals in the North align with their aspirations, if not with their tactics. The honourable concept of Zakat as we know it is practiced between Muslims. To expect Christian populations to endure privations for the benefit of folk whose final ambition is to undermine their religious convictions and supplant them with Islam, is to ask too much.

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Sweetcrude is a Publication of VANGUARD MEDIA LIMITED, Vanguard Avenue, Kirikiri Canal, P.M.B.1007, Apapa. Website: www.vanguardngr.com (ISSN 2251-0001) Editor: HECTOR IGBIKIOWUBO. Phone: 08023145252, All correspondence to P.M.B. 1007, Apapa Lagos.

SweetCrude February 2012  

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