Sweetcrude july 2014

There are no price tags on our assets - Shell

NALPGAM urges FG to back gas as cooking fuel P\12

P\10 President Goodluck Jonathan

A Vanguard Monthly Review Of The Energy Industry VOL 04

N0. 62

JULY, 2014

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Petrobras estimates $18bn in savings from Pre-Salt deal

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etroleo Brasileiro SA, the biggest oil producer in ultra-deep waters, estimates it will save $18 billion in discovery costs after buying rights to one of country’s top two finds, the company said.

It would cost $26 billion to acquire, discover and quantify an equivalent amount of oil in other areas from 2015 through 2021, Petrobras estimated in a presentation filed with the market regulator.

The state-controlled company’s management met with sell-side analysts this afternoon to explain the $6.8 billion acquisition it signed with the government in exchange for rights to as much as 15 billion barrels of oil.

Subsidy regime of controversy …Lack of transparency fuelling mistrust among Nigerians P\7

Metering: NAPE seeks transparency in oil sector

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Contents 3 07 10 13 15 17 21 23

COVER

Subsidy regime of controversy

OIL Metering: NAPE seeks transparency in oil sector

FOCUS There are no price tags on our assets - Shell

GAS

NALPGAM urges FG to back gas as cooking fuel

TECHNOLOGY Drilling: using high power laser for oil, gas wells POWER

Nigeria get bulb recycling plant

FINANCE

FG rakes in N26.9bn from solid minerals in 2011

SOLID MINERAL FG boots miners confidence with geosciences lab

24 LABOUR 27 MARITIME 29 COMMUNITY

Labour demands time frame to end fuel importation

Customs, Shippers’ Council partner on trade facilitation

Niger Delta youths laud unemployment reduction initiative

00 Sweetcrude is a publication of Vanguard Media Limited

THE TEAM EDITOR Clara Nwachukwu CORRESPONDENTS Victor AHIUMA-YOUNG Godfrey BIVBERE Jimitota ONOYUME Samuel OYANDOGHA Emma Arubi Michael Eboh Rosemary ONUOHA Sebastine OBASI Ediri EJOH HEAD, SPECIAL REPORT Ubong NELSON PAGE LAYOUT/DESIGN

Francis AYO & Johnbull OMOREGBEE

Enquiries Call: 08098051103

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Vanguard Media Limited.

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

All correspondence: P.M.B 1007, Apapa, Lagos.

T

he first half of the ye ar ended with a lot of a c ti v iti es, i nc lud in g the kic k off of electioneering proces ses that will culmina te in the run off of the Pre sidential elections in 2015.

Yet, the PIB could no t scale through legis lative approval as expected.

Nigeria also success fully participated in this year’s OTC in Hous ton Texas in May, bu t its participation in the WPC in Moscow, Ru ssia, was dampened by the lack of governm ent representation, whic h led to the cancellat ion of some of the Nigeria n programmes durin g the conference. Nonethe less, Nigeria had one of her be st pa vil ion s at an y int ern at ion al oil confer ence , a d ev elopment that got the Nigerian National Co mmittee to the 21st WPC quite some accolades.

Also, Nigeria lost her bid for the OP EC, Secretary General, an d will have to wait fo r the next six months to ren ew its bid for the seat.

Back home, the Bo ko Haram onslaught on Nigerians continued to take its toll, and while this has dealt a big blow on the economy , the petroleum industry still managed to forge ahead, despite the en suing security challe nges.

As such, in this editio n our readers have the benefit to catch up on the developments alo ng the industry ’s value chain, vis-a-viz Oil, Gas, Power, Solid Mine rals, Technology, F inance, Labour, Maritime an d Community.

Wh ile ou r Co ve r t o o k a l oo k a t the controversies surrou nding the retention of the fuel subsidy, our Focu s is on Shell’s opera tions in Nigeria, as detaile d by its Country Cha ir, Mr. Mutiu Sunmonu.

It is a very interestin g read in deed, and our expectation is that the second half of the yea r will hold better prospe cts for the industry and the country.

Enjoy!

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Subsidy regime of controversy

…Lack of transparency fuelling mistrust among Nigerians MICHAEL EBOH

A

couple of years now the Federal Government has mused over the removal of subsidy on some petroleum products, notably, premium motor spirit, PMS or petrol and household kerosene, HHK, simply called kerosene. Datelines have been pushed yearly, and now pegged at 2015.

However, attempts to remove the fuel subsidy, supported through the Petroleum Support Fund, PSF, managed by the Petroleum Products Pricing Regulatory Agency, PPPRA, have been met with stiff oppositions by various groups based on varied interests.

Fuel subsidy is a system through which the government cushions the effects of high oil prices at the international market, whereby the government bears the burden of the difference between the landing cost of the refined products and the pump prices in the local market.

The fuel subsidy regime in Nigeria has since 2012, been fraught with controversy, such that many believe is capable of crippling the Nigerian economy if not properly handled. The issue took a worrisome dimension, when it was realised that between 2006 and 2013, Nigeria had spent over N5.42 trillion subsidising petrol. This does not include the huge amount expended on kerosene subsidy.

Breaking down subsidy costs

To bring home the truth, the amount spent on petrol subsidy alone in eight years is 15.57 per cent higher than the N4.69 trillion 2014 National Budget, and also 10.61 per cent more than the 2013 budget of N4.93 trillion.

Fo r 2 0 1 4 , t h e Fe d e r a l Government budgeted N971.1 billion for payments of subsidy, keeping it at the same level in 2013. At the current rate, subsidy payments over the last three years, including payments made in the last eight years, would have amounted to about N10 trillion.

The amount the country is spending on subsidy is almost

Gas Station and the Tertiary Education Trust Fund, TETFUND. In terms of welfare, subsidy provisions in 2014 can pay the salaries and wages of about half the workforce of Ministries, Departments and Agencies, MDAs, of the federal level given the N1.723 trillion provided for

The fuel subsidy regime in Nigeria has since 2012, been fraught with controversy, such that many believe is capable of crippling the Nigerian economy if not properly handled. twice the amount (196.07 per cent) allocated for education in the 2014 budget , which is N495.28 billion; more than three times (369.6 per cent) the N262.74 billion budgeted for health; and 148 per cent more than the N655.47 billion allocated for the Universal Basic Education Commission, UBEC

personnel cost in the budget.

Based on the foregoing, the colossal cost of subsidy if redeployed in other key sectors of the economy could have boosted the development of these sectors to the benefit of the ordinary Nigerians. This is opposed to the current regime where a new class of few

billionaires has emerged at the expense of the larger populace.

Removal impact assessment Investigation by Sweetcrude revealed that the Federal Government is considering abolishing fuel subsidy in 2015, and is already meeting with key stakeholders over the issue.

A director in the Federal Ministry of Finance, who spoke in confidence with Sweetcrude on the sideline of a forum in L a g o s , s a i d t h e Fe d e r a l Government, through the Ministry of Finance has begun a test run and is trying to envisage the impact of the removal on the economy.

The director said the meeting with stakeholders, including labour unions, oil companies and oil marketing companies, is to prevent a recurrence of the nationwide protests that greeted the hike in fuel prices in 2012.

The director further noted that the Federal Government is optimistic that the removal next year will not spur any protests, as it expects that Nigerians would have come to terms with the reasons for the subsidy removal.

Despite Federal Government’s silence, debates have continued to ensue in the last couple of

months on whether subsidy should be removed or not. Even the members of the ongoing National Conference, have seen the wisdom for its removal.

Subsidy breeds corruption Nigerians are however divided on whether the subsidy regime should stay or not. For most of the academia, subsidy breeds corruption and should be done away with.

For Dr. Fatima Waziri-Azi, Head of Department of Public Law, at the Nigerian Institute of Ad v a n c e d L e g a l S t u d i e s , NIALS, in a presentation titled; “Institutional and Legal Arrangements for Fuel Subsidy Regime,” the subsidy programme has revealed a new trend of corruption in Nigeria.

According to her, it has witnessed situations whereby people collect subsidy payments for not supplying petrol, whilst they collect foreign exchange for the purpose.

Waziri-Azi said corruption in fuel subsidy ensures that the society loses in two ways, “First, some of the subsidies do not reach the intended beneficiaries, and second, the

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Subsidy regime of controversy CONTINUED FROM PAGE 3 misused subsidy feeds the black economy.

Also, the trio of Fatih Birol, Rabia Ferroukhi, and Aleagha, in their paper titled, “The Economic Impact of Subsidy Phase Out in Oil Exporting Developing Countries: A Case Study of Algeria, Iran, and Nigeria,” maintained that subsidy, irrespective of whether it is given to the consumer (at the pump) or to the producer (refineries) adversely affects the economy.

Ac c o r d i n g t o t h e m , t h e subsidised energy markets ultimately work against the goal of promoting economic development, adding that subsidies given to consumers result in excessive domestic demand, which reduces the amount of crude oil for export, thereby decreasing the foreign exchange revenue needed to invest in the economy.

“Subsidies given to the producers (refineries) results in excessive supply and depletion of resources (crude oil, which is often the main revenue earner for the country).

“Subsidies give rise to debt accumulation which results from a depletion on government resources because of lower export earnings and revenue spent on subsidies which lead to fiscal deficits.”

Also speaking, Comrade Babatunde Ogun, President, Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, argued that the payment of subsidy on petroleum products, especially petrol, is not to the advantage of the Nigerian masses, but only favours few individuals who have constituted themselves into a cabal.

He advised other trade unions in Nigeria to change their positions and stop supporting payment of subsidy on petroleum products.

He said, “It is high time labour unions stopped saying no to the removal of subsidy, and look beyond ordinary reasoning to support the government against a policy and process that has been bleeding the country dry as well as stunting the growth of the nation’s downstream sector of the oil and gas industry.

“The money being used in

pay ment o f subsidy to these few individuals who are enriching themselves at the expense of Nigeria can be channelled towards other developmental projects, especially the nation’s ailing and dilapidated infrastructures,” he said.

Furthermore, in an analysis of the fuel subsidy situation in N i g e r i a , M r. E n i w o a r e ke Egbeme, Analyst, Nextier Capital Limited, told Sweetcrude that successive governments in Nigeria starting from 1978 have gradually removed the subsidy on petroleum products. This resulted in an increase in the price of a litre of petrol from eight kobo in 1978 to the current price of N97 which came into effect into 2012.

According to him, the arguments for removing subsidy on petroleum products in Nigeria have remained largely the same irrespective of the government in power; yet, the expected improvement in the

welfare o f Nigerians has not been realised.

He further stated that national poverty rate increased from 28 per cent in 1980 to 67 per cent in 2013, adding that, unemployment rate, in the same vein, increased from 6.4 per cent in 1980 to 27.4 per cent in 2012.

“However, the fact is that the Nigerian economy cannot continue to sustain the subsidy on petroleum products. For instance, in 2013, Nigeria spent N832 billion on petroleum subsidy, which is 16.7 percent of the 2013 budget.

“According to the Central Bank of Nigeria, about US$8.46 billion (or N1.35 trillion) was spent on kerosene subsidy between January 2012 and July 2013; amounting to about 153 per cent of the combined allocation to education, health, and agriculture in the 2013 budget,” he said.

“In spite of the partial removal of subsidies in 2012, Nigeria still battles with fuel scarcity and fuel pump price stability. Data from NOI Polls, an independent polling company, indicate that over 78 percent of Nigerians purchased PMS at above the

Subsidies give rise to debt accumulation which results from a depletion on government resources because of lower export earnings and revenue spent on subsidies which lead to fiscal deficits

official pump price of N97 per litre between Januar y and March 2014. Some filling stations retailed their products between N110 and N160 per litre of PMS. Black market prices were as high as N200 per litre in some parts of the country.”

Also, the Lagos Chamber of Commerce and Industry, LCCI, declared that given the magnitude of resources committed to funding fuel subsidy, it is clear the subsidy regime is not sustainable.

At its quarterly briefing on the economy, President of LCCI, Alhaji Remi Bello, said the Chamber appreciated the enormity and dimensions of the potential short term impacts of subsidy removal on the economy and the citizens.

Bello said a review of the subsidy regime would result in increased private investment in the downstream oil sector with a corresponding impact on the creation of quality jobs, reduction in the pressures on foreign reserves, a huge chunk of which is currently being used to fund fuel importation, and better fiscal space to ensure macroeconomic stability with a resultant positive effect on the economy.

S i m i l a r l y, f i n a n c e commissioners from the 36 states of the federation rose from one of t h e i r m o n t h l y Fe d e r a t i o n Accounts Allocation Committee, FAAC, meeting in Abuja, with a resolution asking President Goodluck Jonathan to withdraw fuel subsidy.

The Ebonyi State Commissioner for Finance, and Chair man of the Finance Commissioners Forum, Mr. Timothy Odaah, who spoke on behalf of the group, stated that fuel subsidy had failed to achieve its objectives and had become a source of massive fraud which

must be discontinued in the interest of the Nigerian public.

He said, “We looked at subsidy on oil and see that it is more or less a solution worse than the problem you intend to solve.

Looking at it, you discover that it is not solving the problem it is meant to solve.

“But you discover now that it is the average poor man that suffers. For example, stand by the street, most of the transporters are not applying any benefit from subsidy in what they charge. We know of course that the Federal Government had a good intention to subsidise transportation so that it will be to the absolute benefit of the poor man and every Nigerian.”

Benefits of subsidy removal As gloomy as the removal of subsidy appears to be, experts have argued that in view of the current situation the system is not sustainable and should be done away with in order to move the economy forward.

Egbeme for instance advocated total removal of subsidy on petroleum products, saying it does not benefit the masses who are the intended beneficiaries; rather, the funds are lost through elite capture.

He said, “Complete removal of subsidy on petroleum products has numerous other benefits including encouraging competition, reduction of inefficiencies in the petroleum product value chain. Others are discouragement of wasteful consumption, elimination of cross-border smuggling, reduction of shortages, and

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Subsidy regime of controversy CONTINUED FROM PAGE 4 reduction of adulterating of lower subsidised fuels with higher subsidised fuels.

“Subsidies deter investments in petroleum product refineries and this situation perpetuates the dependence on imported petroleum products. Subsidy removal opens the petroleum sector to local and foreign investments that will in turn create more direct and indirect jobs for Nigerians.

“In fact, the partial removal of fuel subsidy has resulted in increased interest in the development of refineries in Nigeria. For instance, in September 2013, Dangote Group signed a N9.05 billion deal with a consortium of local banks and international investors for the establishment of a refinery and petrochemicals complex in Nigeria.

“Notwithstanding these obvious benefits, opponents of the removal of fuel subsidy may argue that it is the only direct and generalised benefit that Nigerians obtain from the country’s crude oil endowment.”

Managing subsidy proceeds

Apart from instituting palliatives, part of the mistrust for subsidy removal is how government intends to invest the proceeds realised from the exercise.

Some experts argued that subsidy removal without appropriate investment of the savings will result in further hike in prices of the fuels enjoying subsidy with direct impact on the cost of production, which in turn will lead to higher inflation and national poverty levels.

As it is, the Subsidy Reinvestment and Empowerment Programme, SURE-P, introduced for the partial removal in 2012 has not lived up to expectations.

Again, Egbeme argued that as government contemplates a removal of the remaining subsidy, it is important that it proves to Nigerians that it has effectively and efficiently managed the proceeds of the last subsidy removal.

He maintained that the SURE-P should do a better job of communicating how its programmes and projects will palliate the effects of the rise in

fuel prices, alleviate poverty, stimulate economic growth, and catalyse job creation across the country.

He said, “There is the need for full transparency and to win the buy-in and support of Nigerians that SURE-P is a better outcome than when the subsidy proceeds ended up in few bank accounts.

Nigerians will support the removal of the fuel subsidy if they can verify that tangible results have been achieved with the recent partial removal of subsidy on petroleum products.”

Good or bad, subsidy should stay However, the Academic Staff Union of Universities, ASUU, kicked against the removal, saying that Nigerians would never embrace any attempt by the Federal Government to remove fuel subsidy. The union gave pre-conditions for removal.

Dr Ademola Aremu, National Treasurer, ASUU, said the Federal Government would not curry the favour of the union until knotty issues surrounding the petroleum industry were resolved.

According to him, subsidy

should not be removed from fuel without tackling other policies and socio-economic issues to reignite the faith of Nigerians in their leaders.

He said, “The starting point of this would be the removal of corruption, which has become second nature to oil business in Nigeria, albeit a general characteristic of the business the world over. This could only be achieved through government accountability to its citizens.

“Is it possible for government to give a near estimate of the crude oil being explored in Nigeria on daily, weekly or other such periodic basis? Can Nigerians be made aware of the amount of money invested in refining the crude oil produce? Can the memoranda of understanding between the international oil companies and the Nigerian government be made public with the rules of engagement stated in black and white?”

Where we are Nigeria’s fuel subsidy programme attained controversial heights in 2012, after the announcement the petrol price hike sparked off

country-wide protests. When the protests subsided, Nigerians demanded accountability on the monies expended on subsidy over the years, a situation which led to a number of committees being set up, both by the Federal Government and the National Assembly.

The various committees came up with different reports, which revealed massive fraud and abuse in the subsidy programme. Too many figures were bandied about by different agencies such that even the committees and the rest of Nigerians got more confused as to the purpose of the subsidy regime, even as some committee members got caught up in the corruption they tried to expose.

Specifically, an Ad-Hoc Committee of the House of Representatives was set up to verify and determine the actual subsidy requirements and monitor the implementation of the programme. The Committee’s report alluded to a deliberate understanding among the agencies in the

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Protesters

Subsidy regime of controversy CONTINUED FROM PAGE 5 petroleum sector not to keep reliable information data base.

Accordingly, this lack of record keeping contributed in no small measure to the decadence and rots in the administration of the Petroleum Support Fund.

It stated, “This is evident also in the budget preparatory process by the MDAs where adequate data is not made available to the National Assembly. The Committee had to resort to forensic analysis and examination of varied and external sources (including the Lloyds List Intelligence) to verify simple transactions.

“In this regard, the PPPRA is strongly urged to publish henceforth, the PSF accounts on quarterly basis to ensure transparency and openness of the subsidy Scheme.”

Continuing, the committee said, “We found out that the subsidy regime, as operated between the period under review (2009 and 2011), were fraught with endemic corruption and entrenched inefficiency. Much of the amount claimed to have been paid as subsidy was actually not for consumed PMS. “Government officials made nonsense of the PSF Guidelines due mainly to sleaze and, in some other cases, incompetence.

It is therefore apparent that the

insistence by top Government officials that the subsidy figures was for products consumed was a clear attempt to mislead the Nigerian people.

“Thus, contrary to the earlier official figure of subsidy payment of N1.3 trillion, the Accountant-General of the Federation put forward a figure of N1.6 trillion, the CBN N1.7 trillion, while the Committee established subsidy payment of N2.587 trillion as at 31st December, 2011, amounting to more than 900 per cent over the appropriated sum of N245 Billion.

“This figure of N2.587 trillion is based on the CBN figure of N844.944 billion paid to NNPC, in addition to another figure of N847.942billion reflected as withdrawals by NNPC from the excess crude naira account, as well as the sum of N894.201billion paid as subsidy to the marketers.”

Civil Societies’ alternative To correct the wrongs done, Civil Society Organisations, CSOs, piqued by the huge infractions in the subsidy programme called on the Federal Government to set up a special financial crimes unit for the oil and gas sector to deal with cor r up tion in the sector, especially in the area of fuel subsidy.

The CSOs made the call in a

communiqué issued at the end of a two-day workshop on monitoring and reporting of oil subsidy fraud/corruption cases in Nigeria. Tagged; ‘Advocacy against impunity in oil subsidy regime in Nigeria,’ the workshop was organised by the Africa Network for Environment and Economic Justice (ANEEJ), with support from Justice for All

specialised crimes.

The communiqué was signed

by Mr. Leo Atakpu, Deputy Executive Director, Africa Network for Environment and Economic Justice, ANEEJ; Mr. Kunle Idowu, Nigeria Network of Non-Governmental Organisations (NNNGOs); Mrs. Oyindamola Musa- Oseni, Socio- Economic Rights and

Government officials made nonsense of the PSF Guidelines due mainly to sleaze and, in some other cases, incompetence. It is therefore apparent that the insistence by top Government officials that the subsidy figures was for products consumed was a

(J4A) and the Department for International Development, DfID. The group urged Government to create a Special Oil and Gas Sector Financial Crimes Unit, as recommended by the Nuhu Ribadu-led Committee, as the existing anti-corruption agencies are not sufficiently equipped to deal with these

Accountability Project (SERAP); and Comrade Lawal Ibrahim Adebayo, Labour, Health and Human Rights Development Centre, Lagos.

The group called on the Presidency to demonstrate the political will to prosecute all companies and individuals indicted for subsidy fraud and corruption by the Lawan Farouk

and Nuhu Ribadu committees, adding that there should be no shielding of sacred cows.

The group equally expressed concern over the management of funds running into billions of dollars under the SURE-P saved from fuel subsidy since January 2012 till date.

They also lamented the nonchalant attitude of the Nigerian National Petroleum Corporation (NNPC) and its subsidiaries in the release of information to the general public, even when sought under the Freedom of Information Act, especially as it relates to oil subsidy.

Furthermore the group urged, “The Judiciary should expeditiously adjudicate all pending criminal matters relating to oil subsidy fraud/corruption and bring all erring persons to justice as justice delayed is justice denied.

“The Anti-Corruption Agencies (ACAs) should release and make public information on all cases currently going on relating to oil subsidy fraud and corruption.

“The National Assembly should revisit the issue of oil subsidy fraud/corruption and demand accountability from the executive and judicial arms of government as part of its oversight functions.

“The Economic and Financial Crimes Commission, EFCC, and the Special Fraud Unit, SFU, should be properly financed and resourced to execute their mandates of thoroughly investigating and prosecution of suspects.”

Oil

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Metering: NAPE seeks transparency in oil sector

Metering

Michael Eboh

T

he Nigerian Association of Petroleum Explorationist s, NAPE, has announced plans to contribute to efforts aimed at bringing about a significant improvement in Nigeria's crude oil production through the entrenchment of effective meeting and transparent oil and gas accounting system.

Speaking at a press briefing in Lagos to announce its forthcoming Special Management Workshop, M r s . Ad e d o j a O j e l a b i , President, NAPE, expressed concern at the inability of the country to achieve its target of four million barrels per day, bpd, and 40 billion barrels in r e s e r v e .

She said, "The oil and gas industry in Nigeria is in the throes of declining reserves and production owing to

reduced exploration,” adding that issues on production accounting and metering in the sector has been brought to the fore, especially with the rising cases of pipeline vandalism and production.

To this end, she said NAPE, will at the forthcoming workshop, scheduled to hold in Lagos on July 2, examine the effectiveness in the existing policies to drive growth in the oil and gas industry.

She further stated that NAPE will strive to develop roadmaps and new policy initiatives on production accounting and metering in the Nigerian oil and gas l a n d s c a p e .

She said, "The theme chosen for the workshop; “Fluid accounting and metering issues in the Nigerian oil and gas industry, is especially relevant in the light of recent public discourse on the concerns on accuracy of

reported production volumes due to pipeline sabotage and other causes as well as questions regarding the efficacy of the metering system in our industry, including the nation's hydrocarbon production reporting process and s t e w a r d s h i p . " She expressed optimism that it is possible for the country to achieve the four million bpd and 40 billion crude reserves target in the next couple of months, noting however, that this can only be achieved if the much needed investments are attracted to the sector

A

ccording to her, “if we are going to achieve these target, we need investments; we need to find reserves and to achieve this, we need lots of investment in e x p l o r a t i o n . ” Also speaking, Mr. Goodluck Adagbasa, Chair man,

She expressed optimism that it is possible for the country to achieve the four million bpd and 40 billion crude reserves target in the next couple of months, noting however, that this can only be achieved if the much needed investments are attracted to the sector

Organising Committee of the forthcoming workshop, said the delay in the passage of the Petroleum Industry Bill, PIB, is causing hesitation among investors, while investment decisions are s t a l l e d .

He maintained that if the sector can garner the

necessary investments, the crude production and reserves target will be met.

"With money we can invest in the right kind of people and in the acquisition of the right kind of technology that will bring about an increase in crude oil production," he noted.

Oil

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Auditing sheet

NEITI sets 2015 target for audit automation project SEBASTINE OBASI

T

he Executive Secretary of the Nigerian Extractive Industries Transparency Initiative, NEITI, Mrs. Zainab Ahmed, said the transparency watchdog is set to implement its audit automation in 2015, to achieve reliable and efficient results.

She stated this at the just concluded NEITI Needs Assessment workshop held in L a g o s . she said, “For us, the motivation is to fully meet the requirement of our mandate, which has to do with conducting audit of mining sector which is timely. The essence of this automation is to make the process more useful, reliable and effective.

“When we automate the audit process, we will reduce cost because audit process takes a long time. About 60 per cent to 70 per cent is data collection. We will reduce the burden on the auditors that is

because they will now be provided with more current data instead of data that are four to five years old.”

Explaining the security challenge usually associated with such automation, she said, “To us in NEITI, the major problem is security too.

We need to make sure that the system that is designed and deployed has enough security not because of the entities, but because of NEITI itself.

“These days, automation has advantages but the major disadvantage is that of security. People that do not have access to the data hack into the data. The purpose is to make it more convenient and more reliable. That is the area we have to address collectively. That is why we are here today, to listen to complaints and look for ways to best protect the data,” she s a i d .

The Executive Secretary also said that though she is not satisfied with the implementation of NEITI’s findings, progress has been made since the present

administration reinaugurated NEITI last year.

“NEITI has been coordinating and working closely with the Department of Petroleum Resources (DPR), and the Federal Inland Revenue Service (FIRS) in addressing some of

t h e s e i s s u e s .

“All the agencies that are involved have made specific commitment to what they are supposed to carry out by monitoring the progress of such actions. The Civil Societies that are associated with NEITI have also formed

a steering committee and executed a Memorandum of Understanding (MoU) that will help them push for the realisation of these issues.

They are also pushing with the entities that are supposed to carry out these actions to fasten the mode of the processes,” she said.

Rosneft signs further oil products supply deal with BP

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osneft signed its second major agreement with BP since sanctions were imposed on the Russian oil company’s chief executive, a close ally of President Vladimir Putin, over Russia’s involvement in the Ukraine crisis.

The five-year agreement will supply BP with up to 12 million tonnes of refined oil products and involves a pre-payment of at least $1.5 billion arranged by leading global financial institutions, Rosneft said. Rosneft refined nearly 90 million tonnes of oil last year, according to company figures.

Some Western firms have been wary of investment and business in Russia since sanctions were imposed over the crisis in Ukraine, where Moscow denies accusations of orchestrating a rebellion by pro-Russian separatists.

But the sanctions have had only a limited impact on the Russian energy industry, a cornerstone of the country’s $2-trillion economy, resulting mostly in higher borrowing costs for domestic companies. Since the sanctions were imposed, executives from Total , BP, Statoil and ExxonMobil have visited Russia,

underlining the importance they attach to business with the world’s leading oil producer with current output of around 10.5 million barrels per day (bpd).

Last year, Rosneft announced deals worth more than $15 billion to sell crude oil and other products to BP, which now owns almost a fifth of Rosneft following Rosneft’s acquisition of Anglo-Russian oil firm TNK-BP last year.

Friday’s signing also follows an agreement

by BP and Rosneft in May to jointly explore in Russia for hard-to-recover shale oil. Such deals do not violate sanctions over the Ukraine crisis because Rosneft has not been included on any sanctions list, but Rosneft’s chief executive Igor Sechin had a visa ban and asset freeze slapped on him by the United States after Russia annexed the Black Sea peninsula of Crimea from Ukraine in March.

“I am working here with Rosneft. It’s a business between the companies. I don’t comment on personal sanctions,” BP’s chief executive Bob Dudley told reporters in Khabarovsk in Russia’s far east after attending the signing ceremony with other members of the Rosneft board of directors.

Oil

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FG to commence refineries’ sale after PIB passage MICHAEL EBOH

T

he Federal Government has disclosed that it will commence the privatisation of the country’s refineries and concessioning of pipelines and depots immediately the Petroleum Industry Bill, PIB, is passed into law.

The Director General of the Bureau for Public E n t e r p r i s e s , B P E , M r.

Benjamin Dikki disclosed this when the Thailand Ambassador to Nigeria, Mr. Chailert Limsomboon paid him a courtesy visit at his office in Abuja.

This is a reversal of its earlier decision to go ahead with the sale of the refineries despite the non-passage of the PIB. Considering that the PIB has gone through two legislative sessions without being passed, it is uncertain the bill will survive the current session in view of the controversies surrounding some of its provisions, a situation that would have

kept the bill at the National Assembly for more than 12 years.

But Dikki assured that the BPE is currently concentrating on perfecting the legal and regulatory framework for all the sectors of the economy to create the enabling environment for private sector participation.

According to him, the purpose of the review of the legal and regulatory frameworks was to aggregate the regulatory powers currently dispersed in various agencies in each sector into one sector regulator and separate policy from regulation.

Dikki also highlighted the huge potential in the transport sector, noting that Nigeria has over 193,000 kilometers of federal roads which provides opportunities for potential road concessionaires.

He said that fifteen out of the seventeen successor companies created out of the Power Holding Company of Nigeria, PHCN, are fully in the hands of the private sector while the remaining two are

at the concluding stages for handover to the private sector.

He, however, noted that the Transmission Company of Nigeria, TCN, would continue to reside with the Federal Government.

In his own comment, the Thailand Ambassador to N i g e r i a , M r. C h a i l e r t Limsomboon, disclosed that his country has made economic cooperation with Nigeria the high point of its new Africa Initiative.

Limsomboon noted that in the past, Thailand had not paid enough attention to the economic opportunities in the West Africa sub-region, particularly Nigeria, saying, “Hope we have not missed the train in the Nigeria privatisation programme.”

H

e pointed out that, while in Nigeria, he would make exploration of business opportunities and expansion of economic cooperation with Nigeria a priority.

He said the purpose of the visit was to learn about the reform and privatisation

Limsomboon noted that in the past, Thailand had not paid enough attention to the economic opportunities in the West Africa subregion, particularly Nigeria, saying, “Hope we have not missed the train in the Nigeria privatisation programme

policy in Nigeria and the new growth sectors to properly sensitise the Thai business communities that may be interested in investing in Nigeria.

The BPE had last year announced plans to privatise the four refineries in the country next year, as part of ongoing reforms in oil and gas sector.

Spokesperson for the BPE, Mr. Chigbo Anichebe, had disclosed that the

privatisation would be handled in line with the usual strategy of the BPE, which was to sell a certain percentage of shares and reserve a certain percentage for the workers, host communities and Nigerians.

A n i c h e b e , h o w e v e r, explained that the privatisation plans were currently at the preliminary stage, where the blueprint of the policy would be decided.

F

Focus

10

There are no price tags on our assets - Shell

Mr. Mutiu Sunmonu

L

ast week, the Managing Director, Shell Petroleum Development Company, SPDC, and Country Chair, Shell Companies in Nigeria, Mr. Mutiu Sunmonu, reiterated that the company has not put any price tags on any of the oil blocks it is divesting from. Clara Nwachukwu captured the interactive session with journalists, during which he also spoke on varied issues concerning Shell’s operations in the country.

Excerpts:

CLARA NWACHUKWU Preamble on 2013 operations In the country people do not recognize that we have quite a good mix of portfolio most people talk really about SPDC, which is about onshore and shallow water business.

It is important for me to mention that, that is our biggest company in Nigeria. In 2013, the key points I want to bring out there is that we actually did produce over half a million barrels of oil per day. We could certainly have done more but for the problems of crude oil theft.

It is also very important to talk about offshore business, which many p e op le re fe r t o as SNEPCO. In 2013, we actually produced about 158,000 barrels of oil per day from Bonga.

LNG is another important business of Shell; we have about 35% stake in NLNG, and the capacity there is quite huge from Trains 1 -6, and there is still a potential to do one additional train.

Domestic gas distribution which is our Shell Nigeria Gas, this is 100% Shell company.

Shell is the only company that has this sort of focus, and Shell Nigeria Gas main business is to actually distribute gas locally in the country to businesses and industries as well.

Economic contribution is something which are always very proud of and I will say that in terms of revenue Shell Companies in Nigeria contributed in the last five years between 2009 and 2013, we contributed about $70 billion to the Nigerian coffer - SPDC

$44billion and SINEPCO $26billion.

Contract is a very important aspect of the way we do our business, and I think the few points I want to mention here is our support and encouragement of local contractors. So in 2013, we awarded contracts over $1.5billion to Nigerian companies and that is a very significant proportion of the total number of contracts that we actually award.

Employment, apart from direct employment we continue, again, as part of local content development we continue to make sure that we tap benefits from indigenous contractors. We will also make sure that there is a lot of indirect labor coming from our host community the figure is there over 4000 employees, over 90% of them Nigerians.

NDDC, statutorily we pay about $180million to Niger Delta Development Commission, but on top of that we do spend over $100 million on our social performance development.

Education Fund, statutory contribution the past five years we contributed over

$700million to the country’s Education Fund. But on top of that as you all know we continue to emphasise education throughout Nigeria in terms of scholarships at various levels.

Challenges and progress: One of our greatest challenges as I’ve always mentioned to the media is our footprint. Our footprint is very large compared to the other oil companies in the country, and if you look at the map you will see SPDC with so

many red all over the place at the bottom right.

And then if you look at the other ones, you see that the red is always very concentrated in particular locations, that is why is one of the reasons why SPDC has suffers most in terms of pipeline vandalism.

Phillips (Shell staff) mentioned that our pipeline network is over 6000 close to 7000 kilometers, whereas if you go to other oil companies, it is a much smaller fraction.

One of the things we really want to do with our implementation strategy is to really re-focus our resources on a much smaller footprint. But most importantly to concentrate our efforts in where we can make the greatest value to the economy of Nigeria, and where we can have even the greatest competitive accounting.

That is why we will be focusing m o r e o n s h a l l o w w a t e r, deepwater and gas. Deepwater is a very highly technologically intensive business, and that is a major strength that we have. So we would rather spend our efforts there. Also, domestic gas in particular is so important to the people of Nigeria, so we’ll be focusing our efforts, going forward, on gas but most especially domestic.

We would continue to produce oil mainly in the shallow water area and less onshore. We believe that these three areas would actually allow us to maximise our contributions to the country, and also to the people of Nigeria.

These challenges Phillips has shared with you in terms of illegal refinery, crude oil theft and even flaring.

On flaring, if you look at the

CONTINUES ON PAGE 11

LNG is another important business of Shell; we have about 35% stake in NLNG, and the capacity there is quite huge from Trains 1 -6, and there is still a potential to do one additional train

Focus

11

There are no price tags on our assets -Shell Bonga FPSO

CONTINUED FROM PAGE 10 totality of gas that is being flared in the country, it is significant, and it’s about 1.2 BCF of gas per day, but Shell’s contribution to that is about 18%.

I always like to emphasize this is because when people talk about flaring, everyone is always pointing fingers at Shell. If you really look at this, you will see that Shell’s contribution to the flares that people see when they fly over Niger Delta is less than 20%. I thought it’s important for us to know, and that didn’t just happen by accident, we continue to spend quite a lot of money. We have in the past spent over $3billion, and we still have over $3billion more to spend to actually complete our programme of gas utilisation.

It is our desire and target that by the time we finish some of the on-going projects, which is the Forcados Yokri, and the southern swamp which is going to cost us about $4billion, then flaring from all our operations will be one of the best in the whole world.

We are almost there, but it’s just important for the media to be aware that while we have made a lot of progress, we are not resting on our oars. We will continue to make sure that we can reduce flaring to the barest minimum and that will be achieved when we complete those two projects.

UNEP Report Perhaps I should say one or two things about the UNEP Report; we are all very familiar with the recommendations from UNEP. A ke y a s p e c t o f t h e recommendations is for the government to establish a restoration fund for Ogoni, which is a about $1billion over five year period. We have been

discussing how that whole project will be funded, and we have reached agreements on the sharing of the formula for it.

What is required for now is for us to make sure that government sets up a very strong governance process, which will give everyone, all stakeholders, oil companies, Ogoni people that when the fund is being disbursed it will be judiciously spent.

On our part, we are very clear that we will play our part and we will make our own contribution.

There was some confusion about one or two months ago where some media reports carried the news that Shell has agreed to now underwrite the whole thing and that is far from the truth.

What we said is that we are committed to paying in our own part the $1billion. And the governance process is very important, to be sure that every stakeholder understands how the money is being spent.

The thing about Ogoni land like I’ve always said is that we do believe that we are not going to wipe out Ogoni history, we want to be part of solution in terms of the cleanup of Ogoni land. That is why we are working very seriously with HYREP, which government has set up.

I also want to mention that the UNEP Report did highlight some aspects of our operations where we needed to improve upon, and every action that was given to SPDC in the UNEP Report, we have done. We are happy to say that we are now even contemplating doing some pilot remediation work in Ogoni, as part of our contribution to encouraging HYREP to also follow suit.

In terms of specific recommendations, I am really pleased about the progress we have made, and we want to move

The thing about Ogoni land like I’ve always said is that we do believe that we are not going to wipe out Ogoni history, we want to be part of solution in terms of the cleanup of Ogoni land. That is why we are working very seriously with HYREP, which government has set up forward by making sure that we can also encourage HYREP to start further work on that.

I must say that it is very unfortunate though that we are yet to see an improvement with respect to crude oil theft in Ogoni. It is still happening every day and our pipelines have continued to be shut in because of crude oil theft.

This, in my view is what will make the clean-up of the Ogoni land even more difficult. UNEP in their report did say that unless there is an end to the issue of crude oil theft in Ogoni, it will be a wasted effort trying to do the cleanup.

One of the things we are doing is to sensitise the peope of Ogoni land by going there every now and again to educate the youths in particular. We’re going there to let people know about the dangers of oil spill in their environment, hoping that it would help in bringing reduction in the amount of crude that is being stolen in Ogoni, thereby causing spills.

It’s not all bad news because anytime I talk about Ogoni, I

always feel that I need to also let people know about crude oil theft in particular, that we will continue to do our best for the country.

Many of you know about Gbaran-Ubie, which is a world class project in Bayelsa State.

You also know about the Afam Power Plant, which is the biggest independent power plant in this country, it was developed by Shell and we are also operating it.

We hear about some election wheels and deals, where oil companies are being pressured, for want of a better word to support government’s electioneering processes. How far is Shell deep in these wheels and deals?

Let me start from the electioneering processes, I am not aware of pressure from anybody in government asking Shell to support electioneering.

And just to be very clear about it, I actually sent out a note to all Shell staff today, as if I knew this question will be asked.

In Shell, we do not support, we do not play politics as an organisation, and if any of our staff is going to support electioneering by way of campaign, you have to think very carefully about it, and if you do, you have to come and declare that you did such.

For somebody like me at my level, it is very difficult to differentiate between what I do in my personal capacity, and what I do for Shell. So the answer is, no, no. We will not even get to paying half a million and then going to declare it at all, because it is very difficult for people to understand. So the answer is absolutely no.

OPL 245 is a recurring issue with Shell, so many things have awarded and revoked and resold to Shell. Since 2001, it has remained a challenge between Shell and the contending parties.

What is really happening to OPL 245?

OPL 245, frankly speaking I wouldn’t want to comment on it because it is more or less a subjudiced as it were. There is a ding-dong battle between the National Assembly and the Attorney General of the Federation, and I think that is where the battle is best fought.

As far as we are concerned, it was a transaction that we had done and we have concluded.

From your briefs on how much Shell paid to government, we are still having issues with reconciliation with the NEITI Reports past and present. So the question is, are oil companies, including Shell, not giving the

CONTINUES ON PAGE 6

Focus

12

There are no price tags on our assets -Shell CONTINUED FROM PAGE 11 right figures to NEITI, or why are there these discrepancies?

On NEITI, I am not too clear about what kind of reconciliation issues you are talking about, but I know that if you read NEITI’s Reports year on year, Shell has always gotten a very clean bill.

Everything that we are supposed to pay, we paid, and NEITI has been able to confirm that year on year, except you are referring to other forms of reconciliation.

What concerns me most is to ensure that every any payment that we are supposed to make statutorily, we have always made complete and accurately.

You spoke about refocusing on deepwater and onshore projects, what is the development with your Bonga Southwest and Aparo deepwater projects?

On Bonga Southwest and Aparo, that for me links to the other point by someone else that there has been no development on the deep water: The issue is that the oil business is a very serious business and from the day you said you want to embark on any project, it would take another eight years.

Why people may not be seeing any development on deepwater.

The oil business is a very serious business. From the day you decide you really want to do a project, it may go for another seven to eight years. While you may not be seeing anything or you may not be hearing any news, but there is a lot of work going on in the organisation.

People are busy studying this project; looking at the risk management; checking whether it is profitable or not; looking at what are the technology options to be used; what are the special considerations. So there is a lot of work, and the gestation period is quite long.

So the fact that you are not hearing a lot of announcement does not mean that we are not being faithful to our strategy of doing a lot more in deep water.

So work is going on in Bonga Southwest and Aparo, I can assure you is going to take a quite a while.

In your briefing notes, I expected to see new developments in deepwater and shallow water, and we have Bonga Southwest, Aparo and others, so is it because of the PIB, I know Shell is leading the protest against PIB, especially the fiscal issues. Why are these assets not seeing activity?

I think Precious (Shell staff) was very prompt in saying we are not leading any protests on PIB. We made our submissions on PIB, and we have been able to make our case as clear as we could to every organ of government on where we think improvements should be made.

So the whole bill is now in the hands of the legislators, and we like other entities and Nigerians as a whole are waiting for response.

For two years now, Shell has been trying to renew its acreages and it has not succeeded. Part of the reason, I understand is that there is some kind of compromise, if you like, where oil companies are being asked to give up one or two lesser fields in exchange for the renew. How true is this and how has it affected your operations?

On Shallow water renewal, I think it is important to note that it is not only Shell licenses that have not been renewed; we have Total, we have Chevron. The

Mr. Mutiu Sunmonu

So the fact that you are not hearing a lot of announcement does not mean that we are not being faithful to our strategy of doing a lot more in deep water. So work is going on in Bonga Southwest and Aparo, I can assure you is going to take a quite a while process is going on, and there is no dispute whatsoever.

You are alluding to the fact that we are being asked to relinquish some; otherwise, our licences will not be renewed. There is no such thing at all. It is not a precondition that we must divest before the licenses can be renewed. In fact, you cannot divest unless you renew your licence, because you cannot divest what you don’t have. So the renewal will technically have to come first, then if you decide to divest we will. It cannot be a pre-condition, and it is not a viable precondition if you think about it that way. Also, it has not affected our operations in any way, because we have five shallow water blocks; one of them is operating and continues to operate. Everybody is getting the benefits; we are taking the benefits, and government is also getting their own benefits from it. But we are also not in breach of the law because we have an

injunction, which kind of protects our rights on it.

A recent report by the London-based Chatham House on crude theft, accused international companies operating in Nigeria of collaboration with the JTF and some politicians to ensure that there is no end to crude theft.

The reason for the collaboration is because royalty is not paid for stolen crude, or any financial commitment made on it. How will you react to this?

The Chatham House Report, where you claimed the report said there was collaboration between the international oil companies and cr ude oil thieves, there is no such thing in my view. And the argument being put forward because we don’t pay royalty, I would rather sell my crude and pay royalty on it than just let the crude to be stolen.

I think that particular logic,

unfortunately for me doesn’t work at all. I know that that is why some people have been pushing that we should pay royalty based on the well head, whether it gets to the terminal or not. And we have consistently argued against that because in terms of the production and protection of the oil and gas facilities, it is not our business; it is the business of the government of Nigeria.

I keep using Iraq as an example, Iraq is a war zone, but the government really appreciates the strategic importance of the oil in Iraq, to the economy, and they protect it very religiously. They will not allow anything to tamper with that source of revenue, and that is the kind of aggression and aggressiveness that I am expecting from the government’s security agencies.

Government has deployed security agencies to protect these facilities, they should do their job. If they don’t do their job, I don’t think it is my business to continue to suffer more losses by paying royalty on oil that I don’t get to sell. So it is not about being complicit with crude oil thieves at all.

What is holding up the cleanup of Ogoni land as recommended by the UNEP Report?

The whole issue of Ogoni is that government has set up an organisation that will handle the

cleanup of Ogoni. The clean-up is going to be done by government agency and not by Shell, not by Total, and not by Eni. Our job is to provide as much support as we could, and we are willing to provide that support. But the lead party in all of this is government agencies not Shell.

I did explain that we are also eager to see that the cleanup in Ogoni starts as soon as possible, and that is why we will do our best to collaborate with HYREP, to see how we can help and encourage the cleanup of Ogoni.

I think it will not be wise for us to now take on the role of government, that role has been clearly given to government and I think it is best for government to play that role rather than Shell.

Looking at your presentation on payments to government, you did not mention how much you realised from your business operations in Nigeria. Exactly how much did Shell companies make during the period in review?

Let me note that we are not at an AGM and you are not a shareholder in Shell, so why do you want to know how much I made from my business. But I can tell you that Government makes far more money than Shell in this business.

CONTINUES NEXT WEEK

Gas

13

NALPGAM urges FG to back gas as cooking fuel SEBASTINE OBASI

T

he President of N a t i o n a l Association of L i q u e f i e d Petroleum Gas Marketers NALPGAM, Mr Basil Ogbuanu, has appealed to Federal Government to initiate sustainable polices that will boost the use of gas as cooking fuel in Nigeria.

The appeal is based on the premise that apart from gas being environmental friendly, it is expected to generate more funds for the development of Nigerian e c o n o m y .

Ogbuanu, who spoke to Energy writers in Lagos, also said that government policy and the dearth of cylinders for the storage and usage of gas are some of the challenges confronting the group in the quest for making gas energy for the f u t u r e .

According to him, a situation where only 15 million cylinders are available in Nigeria with a population of over 160 million people is an impediment to the use of domestic gas as cooking fuel i n t h e c o u n t r y.

He however noted that succor is coming the way of the gas marketers, as a cylinder manufacturing firm located at Berger area of Lagos, has commenced the production of cylinder, which has crashed the price of the product from N10,000 to N7000. Speaking on how to harmonise operations and m a ke g a s a v a i l a b l e t o consumers, he said that the group has given its members, one year to upgrade their gas dispensing plants as part of the agenda of bringing gas to the doorsteps of the consumers nationwide.

“Before now, cylinders in different sizes were very

scarce, but now they are readily available in 5 and 6 kg,” he said, while attributing the surge in gas usage to massive investment in gas projects by Nigerians.

“In 2011, we had about 250 gas plants, but today there are about 400 gas plants in the country. In Lagos alone, we had 15 plants, but today there are over 80 gas plants, which serve as both storage facilities and selling points to e n d u s e r s .

“We also have about 4000 metric capacity for Lagos alone. In Enugu, we have 17 plants; in Umuahia, we have four gas plants at various stages of completion. By the end of the year, we will have about five plants in Abia State. In Ebonyi, there are over seven plants as we are expanding and having new entrants to the sector,” H e a d d e d .

The Managing Director of APGAM, the business arm of NALPGAM, Mr Gbenga Folausi, who also spoke, stated that the Nigeria LNG Limited, NLNG, has increased the price of the product to end users.

Speaking further on the challenges confronting the group, he decried the incidence of double taxation, and the incessant harassment of members by the officials of the Federal Inland Revenue Services, FIRS, on payment of tax and value added tax, in spite of the waiver and tax exemption granted them by the Federal government during Obasanjo’s regime.

He argued that government is supposed to be a continuous process that provides goods and services as well as relief to the greatest number of people.

He also pointed out that the deployment of unskilled people to plants that were not given permit by the Department of Petroleum

Cooking gas

By the end of the year, we will have about five plants in Abia State. In Ebonyi, there are over seven plants as we are expanding and having new entrants to the sector

Resource, DPR, to build gas plant is another threat to the sector.

He added that this could cause industrial accident that may have negative impact on both the people and the environment if not addressed by the government.

Gas

14

Gazprom rejects Ukraine gas pipeline proposal

Ukrain gas pipeline

R

u s s i a ’ s Gazprom has shrugged off a Ukrainian proposal to bring in Western companies to invest in the natural gas pipeline which crosses the country, saying other transit routes bypassing Ukraine still promised to make the pipeline redundant.

Gazprom’s comments came as Ukraine and Russia, at odds after Russia annexed Ukraine’s Crimea region in March, remained locked in a multi-billion dollar dispute over unpaid gas bills.

The Ukraine idea on pipeline investment is part of a response to Moscow ’s decision to temporarily cut gas supplies on June 16, following Kiev’s failure to pay some of its gas debts.

Ukraine wants to share necessary investment in the ageing pipelines as it needs the transit fees it generates for

its strained budget. But Gazprom says it has alternatives that mean it won’t be dependent on the Ukraine link.

“It won’t anyhow affect us.

But let’s not forget that its (Ukraine pipeline’s system) age is more than 35 years with no needed investments done,” Gazprom deputy chairman Alexander Medvedev said yesterday.

Future gas talks between Moscow and Kiev could also be complicated after the EU signed a trade pact with Ukraine and warned it could impose more sanctions on Russia.

A couple of years back Gazprom had wanted to get at least partial control over Ukraine’s gas pipeline to oversee its gas flows to Europe, but failed to agree with Kiev. This time, Russia was not invited by the proWestern government to consider joining a possible

investment consortium.

Gazprom chief executive Alexei Miller told a briefing yesterday the company had no interest in the project.

Gazprom earlier said its gas flows to Europe via Ukraine increased yesterday despite the standoff.

Gazprom had cut gas supplies to Ukraine in June after several rounds of fruitless talks between Russia, Ukraine and the European Commission.

Russia subsequently said it would not revise the price until Kiev pays $1.95 billion to cover part of its debts, raising the possibility of gas flow cuts to Europe.

Miller told a briefing Gazprom had started pumping gas into European storages, expecting to pump over 5bn cubic metres. Yet this would not be enough to cover a significant increase in demand if there were stoppages.

Encana to sell Bighorn gas assets for $1.9bn

E

ncana Corp (ECA.TO) (ECA.N) said it would sell its Bighorn gas properties in Alberta to Apollo Global Management LLC (APO.N) for about C$2 billion ($1.9 billion) as it focuses on more-lucrative oil and natural-gas liquids (NGLs).

The sale to Apollo-controlled Jupiter Resources includes about 360,000 net acres comprising Encana's working interests in all pipelines and production facilities as well as service arrangements.

The Bighorn properties produced 319 million cubic feet equivalent of liquids-rich natural gas per day (after royalties) in the first quarter, Jupiter said.

Total net proved reserves of the properties at the end of 2013 were about 1,100 billion cubic feet equivalent (Bcfe), with about three quarters natural gas.

Canada's largest natural gas producer is selling off natural gas properties while adding oil and NGLs assets to boost its earnings after years of weak prices for the fuel.

In March, the company sold its properties in Wyoming's Jonah natural gas field to an arm of private equity firm TPG Capital [TPG.UL] for $1.8 billion. The company also sold about 90,000 net acres in east Texas in April for $530 million to an undisclosed buyer.

Shares of the Calgary, Alberta-based company closed at C$25.58 on the Toronto Stock Exchange on Thursday. They have gained about 33 percent in the last six months.

Technology

15

E-mail: Jimlaw2004@gmail.com, 08027181717

Drilling: Using high power lasers for oil, gas wells

Gas plant

L

oil

or

aser drilling

industry interest in pursuing

may be key to

future research. If drilling

m

with lasers ultimately proves

a

k

e

previously

viable, it could be the most

uneconomic

radical change in drilling

gas

deposits

technology in the last

commercially attractive as

century.

Argonne

It was at the turn of the 20th century when rotary drilling supplanted cable tool drilling as the petroleum industry's standard method for reaching oil and gas formations. While major improvements have occurred since then, the basic mechanical drilling method has remained essentially the same.

National

Laboratory

(Laser

Applications Laboratory) and a group of collaborators are examining the feasibility of adapting high-power laser technology to drilling for gas and oil. The initial phase is designed to establish a scientific

basis

for

developing a commercial laser drilling system and determine the level of gas

Using lasers to bore a hole offers an entirely new approach. The novel drilling

system would transfer light energy from lasers on the surface, down a borehole by a fiber optic bundle, to a series of lenses that would direct the laser light to the rock face.

Drilling Many Times Faster Researchers believe that state-of-the-art lasers have the potential to penetrate rock many times faster than conventional boring technologies - a huge benefit in reducing the high costs of operating a drill rig.

Today, a typical land-based oil or gas well costs around $400,000 to drill, while costs for an offshore well average nearly $4.5 million. But in some deeper or more difficult

Today, a typical land-based oil or gas well costs around $400,000 to drill, while costs for an offshore well average nearly $4.5 million.

drilling terrains, costs can be much higher. Reducing the time a drill rig remains on site can lower costs and make previously uneconomic gas or oil deposits commercially attractive.

The earlier study showed that

CONTINUES ON PAGE 16

Technology

16

Drilling: Using high power lasers for oil, gas wells CONTINUED FROM PAGE 16

laser systems now can provide more than enough power to cut rock. Because the laser head does not contact the rock, there is no need to stop drilling to replace a mechanical bit.

M o r e o v e r, r e s e a r c h e r s believe that lasers have the ability to melt the rock in a way that creates a ceramic sheath in the wellbore, eliminating the expense of buying and setting steel well casing. A laser system could also contain a variety of downhole sensors - including visual imaging systems - that could communicate with the surface through the fiber optic cabling.

will be to determine if sending the laser light in sharp pulses, rather than as a continuous stream, could further increase the rate of rock penetration. Pulsed laser have been used for better performance in cutting steel, for example. It may be likely that the pulsing action will

The technical challenge will be to determine whether too much laser energy is expended to clear away the fluid where the drilling is occurring

Changing Conventional Wisdom While the lure of laser drilling has been its speed, one major drawback has been the large amounts of energy experts assumed would be required. The 199799 Gas Research Institute study indicated, however, that conventional wisdom much of it based on 20-yearold calculations - may have significantly overestimated the energy required to break, melt or vaporize rock.

One of the primary objectives of the new study will be to obtain much more precise measurements of the energy requirements needed to transmit light from surface lasers down a borehole with enough power to bore through rocks as much as 20,000 feet or more below the surface.

Another aspect of the study

Oil rig flex and break the physical bonds between the rock grains, boosting the cutting effectiveness.

A third aspect of the new project will be to determine if lasers can be used in the presence of drilling fluids. In most wells, thick fluids called "drilling muds" - are injected into the borehole to wash out rock cuttings and keep water and other fluids from the underground formations from seeping into the well. The technical challenge will be to determine whether too much laser energy is expended to clear away the fluid where the drilling is occurring.

Later in the project, researchers could examine other ways to use lasers in oil a n d g a s d r i l l i n g . Fo r

example, after a well is drilled, perforations are created into the formation to start the flow of

hydrocarbons. Part of the research effort will study ways lasers could be used to create these perforations.

Statoil signs framework agreement with Kværner E nergy provider Statoil has entered into a major framework agreement with engineering firm Kvaerner for the delivery of steel jackets for the North Sea in the period up to 2020.

The companies have also signed a letter of intent for the delivery of the two planned jackets to the new Johan Sverdrup field.

Statoil says that through this agreement the company has secured critical deliveries at internationally competitive terms.

This framework agreement is also a tool for further industrialisation and standardisation, which will be of significance in securing longterm competitiveness.

The first Statoil development to avail itself of this agreement is Johan Sverdrup, which will

include four installations and jackets.

“The Sverdrup development is historic and the biggest on the Norwegian continental shelf since the 1980s. It is an industrial development with a 50-year perspective. This letter of intent signifies a fresh step forward in planning the first phase of Johan Sverdrup,” adds Lund.

The agreement comprises the riser platform and drilling platform – the two largest and most demanding steel jackets at the field centre. The jacket for the riser platform is due for delivery in summer 2017 and the drilling platform jacket in spring 2018.

Kvaerner is already involved in the development of Johan Sverdrup through its role as subcontractor on the field centre preproject.

Sweetcrude, July 2014

Power Sebastine OBASI

G

o Green Nigeria, Light up Nigeria, in association with the American bulb giant, Te c h n i c a l C o n s u m e r Products, TCP, is set to build West Africa’s first ever compact fluorescent lamp recycling plant in Nigeria.

The National Coordinator, Go Green Nigeria, Light Up Nigeria, Mr Wale Akande, said the recycling plant has been released to the country

by TCP, adding that the plant will ensure that end of life and waste bulbs will no longer litter the Nigerian environment.

Akande stated this in Abuja, during the signing of M e m o r a n d u m o f Understanding (MoU) between Go Green Nigeria and the Association of Illumination Professionals (AIP).

He explained that Go Green Nigeria is the partner of TCP, and the recycling plant would serve the purpose of taking care of the environmental impact of the energy conservation project it is implementing in Nigeria and West Africa, whereby 100 million energy efficient lamps shall be distributed to Nigerians.

According to Akande, the epoch making event, which took place at the headquarters of AIP, Abuja, was the first for both parties and also AIP’s first MoU with a private sector group.

He further explained that Go Green Nigeria sprang out of a research-based concept, designed to complement the Federal Government’s effort at ensuring sustainable electricity in Nigeria.

He said the project is a platform for individuals, families, communities, corporate organisations, nongovernmental organisations (NGOs), and governments at all levels to take action at achieving the goal of power sector reform.

He said: “We are so excited about the progress to be made by this MoU document, which shall ensure that the Go Green Nigeria goals are achieved. This is why we are happy to be working with the Association of Illumination Professionals, a body of true professionals in the sector,

17

Nigeria gets bulb recycling plant

Electric bulbs who love to contribute to nation building with their technical savvy.

“The Go Green Nigeria project seeks to distribute 100 million energy efficient bulbs throughout the nation over a period of four years, so as to catalyze power conservation and energy efficiency culture. Through this, we hope to achieve stable e l e c t r i c i t y, p o v e r t y eradication, job creation, improved security and mitigating the effects of climate change.”

Also speaking, the President of AIP, Mr. Ajadi Abdulwahab, said Nigeria needs a regulatory framework to enable

professionalism in the lighting sub-sector.

He said: “Most of the citizens misunderstood the issue of light. When you say lighting, they think only of electricity, without knowing that it goes beyond that. The truth is that even when there is no electricity, there is light and lighting. For example, there is day lighting, and our task as professionals, is to utilise them effectively for national development.

“We are happy to associate with Go Green Nigeria, Light Up Nigeria. The organisation is focused and is set to help the Nigerian power sector through energy efficiency and conservation. This is the

The Go Green Nigeria project seeks to distribute 100 million energy efficient bulbs throughout the nation over a period of four years, so as to catalyze power conservation and energy efficiency culture first MoU we are signing with any of such private sector based body,” he added.

Go Green also signed agreement with the National Centre for Energy Efficiency and Conservation and plans to sign more MoUs with federal, state and professional bodies such as the Lagos State Waste Management Authority (LAWMA), amongst others, before it will fully commence operations.

Sweetcrude, July 2014

Power

18

Build more IPPs, FG urged Sebastine OBASI

T

Power sub-station

Enugu DISCO critical to Southeast economic growth —Soludo Sebastine OBASI

T

he former Governor of Central Bank of Nigeria (CBN), M r. C h a r l e s Soludo, has said that the reinforcement of the Enugu Electricity Distribution Company (EEDC), is critical to the economic growth of the South-East geopolitical zone.

Soludo who spoke at a stakeholders’ dinner organised by the management of the Enugu DISCO in Enugu, said, “The company is a critical economic game changer for the entire South East and a key infrastructural component for re-building the region.”

In occupying such a position, he said the Enugu DISCO has the onerous

responsibility in the domain of corporate governance, adding that the company inherited an operation in an environment where the cost of doing business is astronomically high and the rate of return is very low, when compared to other parts of the world.

He noted that what the South East needs is something that breaks out of the vicious cycle in which it is locked into. This, he added, is within the context for the business of Enugu Disco.

Under this environment, Soludo said, EEDC has a challenge of maximizing shareholders’ value in the short and medium term and the contest of building the pillars for sustaining business continuity in the long term.

He noted that the two, although seemingly daunting

are mutually reinforcing, and are tied to the growth and transformation of the region.

He emphasized that if the DISCO is successful, the economy of the states in the region would boom as prosperity trickles down to the people of region.

He re calle d t hat t he Southeast was one of the leading economies prior to the discovery of oil, with its abundant export of palm. But when oil became the dominant resource for the country, very little attention was given to the local economy, which led to infrastructural decay.

Soludo recognised that EEDC inherited an enormous burden in addition to what he termed as a classic business problem because as a DISCO, it distributes a product where its generation

and transmission is outside its control.

Also speaking, Chairman of EEDC, Sir Emeka Offor, c h a r g e d t h e management team to understand that the organisation is engaged in serious business.

He admonished the team to always do the right things and avoid laxity in the discharge of their responsibilities.

He implored the management and staff to join hands to ensure that EEDC serves the customers in its business d i s t r i c t s satisfactorily.

he federal government has be e n t old t h a t building of more independent power plants, IPPs, would solve Nigeria’s power challenges as well as provide the much needed support for economic growth, and guarantee returns on investments.

The Group Managing Director of Dangote Sugar Refinery Plc, Mr. Abdullahi Sule, who stated this at the Annual General Meeting of Nigeria Gas Association, NGA, held in Lagos, said that the private sector has a critical role to play in the success of the gas to power projects “To realise the federal government’s goals to increase power generation through gas, government should continue to encourage the use of gas due to its benefits, make it to compete effectively with other refined petroleum products,” he argued.

Giving instances on how the private sector has encouraged the use of gas for industries, he said that Dangote Sugar Refinery consumes about 16 mgawwats, MW of electricity; Dangote Cement, Obajana uses 135MW; while Dangote Cement Factory, Ibese uses 111MW, all generated by the company alone.

He also said that the Sugar Refinery consumes about 9 million standard cubic feet, SCF of gas monthly.

According to him, a conducive climate has been created for power generation and distribution with the independent power plants, IPPs. He however observed that out of the current annual gas production of about 2,000 billion cubic feet, about 40 percent is flared.

Laying emphasis on the investment opportunities that abound in the gas sector, he said that there is more room for domestic gas market expansion; IPPs, liquefied natural gas, LNG projects, the West African Gas pipeline, Tran Saharan Gas Pipeline and Gas to Liquid in Nigeria.

Sweetcrude, July 2014

Power

19

Local content: GE harps on capacity development

A welder

Michael EBOH

G

e n e r a l Electric, GE Nigeria has emphasized the need to improve on the skills and capacity of indigenous workers in the Nigerian oil and gas sector, especially in the area of technology, so as to empower them to tackle the industry challenges.

This was made known at the GE Garages, an interactive session on the role of technology in the Nigerian oil and gas industry.

GE Nigeria Oil & Gas

Leader, Mr. Uzo Nwagwu, said as technology continues to play a key role in the development of the oil and gas industry, there needs to be concerted efforts to build skills and capacity in available local manpower.

He added that as the industry continues to explore new sources of production, operations are increasing in complexity thus driving significant demand for better technology in equipment and services.

He revealed that GE is investing significantly in the training of engineers and technicians in the use of the ever-evolving technology,

adding that it is part of its localisation strategy in the African region.

He explained that GE delivers expertise to Africa by combining a deep understanding of local demands, challenges, and opportunities in the energy sector with GE’s global scale and research and development.

He said, “GE is investing in technology and service sectors that are critically important to the region, such as subsea and Liquefied Natural Gas, LNG. Subsea production is expected to increase by 35 per cent globally by 2018 as growing

demand, along with depletion of current wells, drives production toward much deeper parts of the sea.

“GE is delivering technology and services to develop subsea resources and is developing the technologies that will move processing to the seabed.”

GE Garages is GE’s platform to communicate advanced manufacturing stories, bringing together both internal and external partners to enable creativity and innovation on a global scale.

Participants at the session were taken on a tour of the Garages display and they

interacted directly with the technology on display ranging from 3D printers to laser cutters.

GE said the Garages programme is in partnership with the Dangote Foundation, adding that as a s i g n i f i c a n t s t a ke h o l d e r within the Nigerian private sector, Dangote will produce and maintain the programme and will collaborate on curriculum development for entrepreneurial and nonskilled participants.

“In addition, Dangote will be engaged to source and support the venue which will host Garages in Lagos,” the company said.

Sweetcrude, July 2014

Power

T

he Rivers State Government has announced p l a n s t o p r o m o t e sustainable energy development in Nigeria, and join in global efforts towards e ns uri ng a be t t e r and greener future.

To this end, the State Government is organising a t h r e e - d a y E n e r g y, Environment & Investment Forum (EEIF), which holds in Port Harcourt between July 1 and 3.

According to a statement by the organisers, the event, which has as its theme, “Sustainable Energy - The K e y t o Af r i c a ’ s Wo r l d Integration,” is dedicated to renewable energies, energy e f f i c i e n c y, c l e a n technologies and investment opportunities.

The organisers said the EEIF 2014, which is being hosted by the State, will include a world-class conference, a women’s symposium, a youth forum, as well as a number of corporate meetings and concurrent social events.

The organisers further noted that the forum, which holds at Dr. Obi Wali Convention Centre in Port Harcourt, the state capital will attract world leaders, international policy makers, i n d u s t r y ex p e r t s . A l s o

20

Rivers to promote sustainable energy development expected are investors from the public and private sector and the media, who will gather in Port Harcourt to discuss practical and sustainable solutions to future energy challenges.

They said the Port Harcourt Energy, Environment and Investment Forum 2014, is an Africa-focused international business platform that will connect project owners and solution providers to investors and buyers from the public and private sector in a bid to promote sustainable development of the continent.

They said, “The EEIF 2014 will present energy and

environment sector stakeholders with a unique opportunity to network with their peers, exchange t e c h n o l o g y, s h a r e b e s t practice and form business partnerships that will further promote the global effort for a better and greener future.

“The forum will be m o d e r a t e d b y D r.

Muhammed Ibn Chambass, UN Envoy and for mer ECOWAS President, while the speakers include Mr. L e c h Wa l e s a ( f o r m e r President of Poland); Mr. J o h n K u f o u r, f o r m e r President of Ghana; Mr. Francois Fillion, former Prime Minister of France; and Mr. Jose Luis Zapatero,

two-Term Prime Minister of Spain.

“Others are Ian Bowles, former Massachusetts Secretar y of Energy & Environmental Affairs); Mr. Eric Joyce, former Member of British Parliament; and Mr. James Rubin, and former Assistant Secretary of US Dept. of State.

Also expected to speak are Prof. Edward Ayensu, former Director of African Development Bank, Founder of Global Energy Foundation; and Mr. Liu Kan, ConsularGeneral, Peoples Republic of China, and many other panellists.”

Electric bulb

Senate lauds Schneider Electric’s development initiative

S

chneider Electric, t h e g l o b a l specialist in energy management has been commended by Nigeria’s National Assembly for its efforts towards developing sustainable manpower for the nation’s power sector.

The endorsement came on the heels of a successful legislative tour of Schneider Electric’s Isaac Boro Energy Training College at Grenoble, France.

The facility tour which was organised at the instance of the National Assembly, pursuant to the legislature’s oversight functions as enshrined in Nigeria’s constitution, was aimed at exposing members to the progress made by the Nigerian students as well as the Centre’s world class facilities.

In attendance were the Chairmen, Senate Committee on Niger Delta, Senator James Manager, and his House of Representatives counterpart, Hon. Warman Ogoriba. Others include, Hon. Kingsley Kuku, Special Adviser to the President on Niger Delta Affairs, and Chairman of the Presidential Amnesty Programme as well as Marcel Hochet, President and CEO of Schneider Electric English West Africa.

Speaking after the facility tour Manager and Ogoriba commended Schneider Electric on the state of the Centre’s facilities and quality of training received by its Nigerian students, describing it as a huge contribution towards fast tracking the development of Nigeria’s power sector.

Manager said, “We are very happy and extremely confident with what we have seen here today.

Schneider Electric has taken three unique firsts in the history of the program.

They are the only company to name a training center after a Niger Delta icon; they have committed to employ 15 of the students immediately and have also committed to assist in placing the rest with their strong network of partners.”

Sweetcrude, July 2014

Finance

21

Chris OCHAYI

A

B U JA : T h e N i g e r i a Extractive Industries Transparency Initiative, NEITI, has announced that the Federal Government earned a total of N26.9 billion from solid minerals in 2011.

The Executive Secretary of NEITI, Mrs. Zainab Ahmed, who disclosed this at the public presentation of 2011 Solid Minerals Industry Audit Report in Abuja, said, out of this amount, a total sum of N26.8 billion represents funds paid by companies.

She said the report also shows that the difference between what the companies paid in taxes, levies, and royalty, and what government actually received into its coffers was N33.1 million.

The key findings of the reports according to her, “showed that Nigeria exported a total of 7,115,088.50 metric tonnes of solid minerals valued at N11.9 billion during the p e r i o d u n d e r r e v i e w. ” However, it noted that a review of the Central Bank of Nigeria, CBN, and the Nigeria Customs Service, NCS, records on exported minerals showed that there were discrepancies in the value of exported minerals as well as the associated companies.

From the report, aggregated revenue received by Federal Government increased significantly in 2011, as compared to previous years.

This was attributed to the awareness created from the last audit cycle by NEITI, and the increasing attention paid by government to the solid minerals industry.

The report observed that there is poor synergy between the various government agencies such as Ministry of M i n e s a n d S t e e l Development; CBN; NCS; Nigeria Export Promotion Council, NEPC; and the Mining Cadastral Office in tracking records/revenue on exported solid minerals.

It further noted, “Despite the fact that Gold and Barites were mined across the nation, there were no records of any royalty or similar payments.”

Ahmed added, “As I earlier noted, the conduct and public presentation of this audit is in

Mining site

FG rakes in N26.9bn from solid minerals in 2011 line with the principles of the global Extractive Industries Transparency Initiative, EITI, which Nigeria signed up to since 2003.

“Under the EITI global principle, all member countries including Nigeria, are required to publish on a regular basis, independent audit reports to acquaint the citizens with current information and data on what extractive companies paid to governments and what government and its agencies received in terms of royalties, taxes, levies, signature bonuses, rents etc.

“In the pursuance of this mandate, our independent audits cover financial, physical and process audits.

It seeks to provide reliable information and data on financial flows from companies to government

through its agencies to the Federation Account. It also examines the physical and process issues that characterise business activities in the industry with a view to establishing if companies actually paid what they were expected to pay and if government indeed received what it ought to receive.

“The objective of the audit is to establish and make public the revenue flows through investment among the major players in the solid minerals sector, report on the quantities of solid minerals mined, quarried, processed, exported and imported. The audit is also to track solid minerals sector funds collected by the various Government Agencies to the Federation Account and how they were distributed and

applied.

“Other objectives include the reconciliation of the payments by the major players (companies/entities) in the solid minerals sector in Nigeria and Government receipt of revenues during the period 2011 in the areas of Ro y a l t y, G r o u n d Rents/Annual Surface Rents, Taxation, Levies etc. The Audit is also useful for purposes of planning and economic development of the country.

“In this particular audit, a total number of 87 companies participated in the audit based on the materiality level of N1 million and above defined by NEITI. These companies covered by the audit include construction, manufacturing, artisanal mining and mineral buying centers.

“I wish to state that information and data contained in this are based on information and data mandatorily provided to NEITl’s independent auditors by both relevant government agencies and companies doing business in the solid minerals sector for the period under review.

“It is important to note that all the companies and government agencies covered by the audit were not only actively involved at every stage of the audit process, but signed-off on information and data contained in the report.

“The report therefore contains dependable information and data, outlined salient obser vations, insightful findings,” she noted.

Sweetcrude, July 2014

Solid Minerals

22

Banks cautious over investing in solid minerals —NGSA

Solid minerals Gabriel EWEPU

A

B U J A FOLLOWIN G p o o r interests expressed by investors to invest in the solid minerals sector, banks in Nigeria have been cautious over funding investments in the sector.

This was revealed by the Director-General, Nigeria Geological Survey Agency, NGSA, Mr. Alex Nwegbu, while speaking with Sweetcrude on the slow pace of investment and development in the solid minerals sector.

Nwegbu said: “It is not that banks don’t want to fund the sector because we have had interactions with the banks, and they have said specifically that one, the money in their custody is people’s money. Before they can commit people’s money

One of the major challenges in the sector is that investors don’t have enough geosciences information to make investment decisions. The banks are saying, ‘if we don’t have enough geo-sciences information, how can we invest other people’s money?

into investment, they would be absolutely sure about the investment.

“O n e o f t h e m a j o r challenges in the sector is that investors don’t have enough geo-sciences information to make investment decisions. The banks are saying, ‘if we don’t have enough geo-sciences

information, how can we invest other people’s money?

So we are not comfortable and not sure how we can make returns on investment.’

“I am not comfortable with the emphasis laid on the solid minerals sector. I think the basic problem is lack of understanding of the sector by both the policymakers and

executors. People easily get discouraged when they invest huge amounts of money on a particular solid mineral and nothing comes out of it, and they decide not to continue.

“Somebody might invest $50 million and finds nothing, and even though he does not get up to a commercial quantity or quality he wants.

So people need education about investment in the solid minerals sector, unlike the investment made in real estate, where in a short-while you see structures springing up.”

Nwegbu who was recently appointed the NGSA’s DG, said the huge potential in the sector has largely remained untapped as a result of poor orientation about the sector, which had made it unattractive over the years.

“People are well informed about the oil industry, which is mainly run by expatriates, who understand the sector even though they find

nothing after investing millions of dollars. So, people need enlightenment on the peculiar nature of the solid minerals sector,” he stated.

According to the NGSA boss, government still has a lot to do, even though it was working to provide the enabling environment for private practitioners to come into the business.

“This is where the gover nment in Nigeria should come in at the level of geosciences information and it will do us a lot of good,” he stated.

H o w e v e r, N w e g b u expressed optimism that the sector is capable of attracting direct foreign invest, particularly after the recently held World Economic Forum in Abuja, which further revealed huge investment opportunities in the nation’s solid minerals sector.

Sweetcrude, July 2014

Solid Minerals

23

Geoscience lab

Gabriel EWEPU

A

BUJA- THE f e d e r a l gover nment recently gave a boost to miners’ confidence with the re-launch and sensitisation workshop on the existence of the Nigeria Geosciences Research Laboratory, NGRL, Kaduna.

The Minister of Mines and Steel Development, Mr Musa Sada, in his address said the government had established the laboratory since the colonial era, but had received a boost after installing state of the art facilities to meet the demands of miners.

Sada, represented by the Permanent Secretary, Alhaji Dauda Kigbu, said: “The responsibility of government, at various stages, is to support investors to ensure that standard practices are adopted in realising the full potential of their

FG boosts miners’ confidence with geosciences lab investments.

“Value addition to the operations of miners is key to achieving this objective. The facilities here in the National Geosciences Laboratories, which have been upgraded to world class status, should excite genuine stakeholders whose ambition is to operate at internationally acceptable levels.

“State of the art equipment has been installed at these laboratories to meet the needs of operators at all levels. The facilities in the laboratory include Energy D i s p e r s i o n X R F S p e c t r o m e t e r, X - r a y

Diffractometer, Scanner Electron Microscope, Fume C u p b o a r d , M i n i Wa t e r Laboratory, Mini Geiger Counter.

“A lot of emphasis has been placed on capacity building of staff to ensure that these sophisticated equipment are handled with utmost degree of professionalism.

Currently, the laboratories are at the concluding stages of securing ISO certification and accreditation.

“The benefits of all these being put in place are to, among others, create the enabling environment that will guarantee full value for i n v e s t m e n t . To d a y ’ s

stakeholder workshop is therefore an institutional support for the good of the sector.

“In all of these endeavours, we must acknowledge the critical role played by the World Bank through the Sustainable Management of Mineral Resources Project (SMMRP). They were instrumental to the putting in place some of these facilities that have been adjudged to be, in some cases, the best of its kind in Africa.”

The Minister said the workshop was to sensitise miners and investors as the players in the industry were not aware of the laboratory,

and that miners will no more travel to Britain, Thailand, and Ghana, rather will take mineral samples to Kaduna for analysis, including countries within the subregion.

Also speaking, the DirectorGeneral, Nigeria Geological Survey Agency, NGSA, Mr. Alex Nwegbu, said the essence of the workshop is to bring the laboratory to public focus in order to assist miners, exporters and investors in transacting businesses abroad without being short-changed.

This is so because they will have knowledge about the value of the mineral they want to export.

Nwegbu added that there will be continuous public enlightenment about the laboratory for optimal utilisation and patronage.

Sweetcrude, July 2014

Labour

24

Labour demands time frame to end fuel importation

Oil tanker

Victor AHIUMA-YOUNG

O

RGANISED labour in the nation’s petroleum industry, has c a l l e d o n t h e Fe d e r a l Government to give Nigerians a definite time frame to end fuel importation and gas flaring in the country.

Under the umbrella of the Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, labour said it is aware of the clandestine moves by the Bureau of Public Enterprises, BPE, to sell the public refineries despite the agreement reached between the Federal Government and organised labour. It warned that selling off the refineries

without the consent of labour will throw the industry into unprecedented industrial turmoil.

The association also alerted the Nigerian public that the Federal Government has refused to reconstitute the board of the Petroleum Products Pricing and Regulatory Agency, PPPRA, and has therefore been unilaterally running the agency, preventing other stakeholders from scrutinising its subsidy claims.

Babatunde Ogun, immediate past President of PENGASSAN, told S w e e t c r u d e t h a t “PENGASSAN plays key role in the downstream sector of oil and gas operation, and policy issues. Our inputs to policy formulation have been

of help in the management of emerging and difficult challenges in the sector. The association supported downstream liberalisation to foster private investments, participation and competition in petroleum products refining, storage, marketing and distribution.

“We noted that a lot of work is required to stimulate private sector participation, encourage investment through the promotion of fair and healthy competition. In all these, the consuming public and businesses need protection against the severity and vagaries of market forces and exploitation of consumers through overpricing.

“It is curious to note that, two years ago, the Federal Government dissolved the

Board of the PPPRA and have up till now not reconstituted the board. What this means is that government has decided to run this agency alone without stakeholders input.

Thus, making it impossible to ascertain the amount of subsidy it claims for petroleum products. We call on the government to immediately constitute this board.”

He commended the efforts of the Dangote Group and other private investors who have indicated interest and strong commitments in building refineries to improve local refining in the country. He also called on the gover nment to provide enabling environment as well as a level playing field to ensure their efforts come into reality.

Ogun however said, “We condemn v e h e m e n t l y attempts by government to sell the four stateowned refineries in K a d u n a , Po r t Harcourt and Warri after several failures to do the Tu r n - A r o u n d Maintenance (TAM) on them. We h a v e n o t e d government’s insincerity in implementing the agreement reached with Nigeria Union of Petroleum and Natural Gas W o r k e r s , NUPENG, and PENGASSAN during the January 7, 2014 meeting on t h e s a l e o f refineries.

“We are watching closely all the subterranean attempts by the BPE to go ahead with the sale of these refineries in spite of our engagement and agreement with the government. We earnestly yearn for s t r o n g e r

commitment and push to improve and increase local refining with specific date to end importation of petroleum products and gas flaring.”

Speaking on gender issues, he said “gender issues have in the last three years gained more attention and dominance both in terms of activities and participation in local and inter national programmes. The WIP chairperson’s position has been elevated as a member of t h e C e n t r a l Wo r k i n g Committee (CWC), while the first Annual Women in PENGASSAN Conference was held in Lagos from March 24-25, 2014. We now have more female comrades occupying leadership positions in the Association, although there is more room for improvement in this regard.”

Sweetcrude, July 2014

Labour

25

Victor AHIUMA-YOUNG

P

ETROLEUM and Natural Gas Senior Staff Association of N i g e r i a , PENGASSAN, has put the government and employers in the sector on notice that it will not hesitate to shut down the Petroleum Industry, should the emerging employment policy in the sector be found to be exploitative with the tendency to degrade jobs.At the just-concluded 4th Triennial National Delegates’ Conference of the association in Abuja, outgoing President, Mr. Babatunde Ogun, raised an alarm on the negative consequences of the growing practice of casualisation and contract staffing for otherwise permanent and pensionable jobs, aimed at denying workers of their rights.

According to him, “Casualisation and contract employment for jobs that should be permanent and pensionable continue to plague the oil and gas sector in Nigeria. Several reasons are being advanced as justifications for outsourcing core jobs and preferences for short term employment. But the underlying reason is that businesses want to cut cost by all means possible so that their human capital could be treated as mere robots. Our position is that any employment model or policy that is found to be deceptively exploitative with the tendency to degrade jobs will be resisted. ”Our advocacy is for fair and sufficient benefits and good welfare package for all categories of our members through unrestricted legitimate rights to union activities, collective bargaining and other lawful engagements in resolving issues with social partners.

We have taken up the issues of casualisation and contract staffing with the Ministry of Labour and Productivity, and all stakeholders in our sector.

In collaboration with our sister union, the Nigeria Union of Petroleum and N a t u r a l G a s Wo r k e r s , NUPENG, and other stakeholders, we have been able to agree on guidelines for contract employment in the oil gas industry in Nigeria. It is our hope that these guidelines will be respected by all the parties. ”On gas, he said “Just before the general elections of 2011, the present government in Nigeria unveiled the Gas

Oil workers in the office

PENGASSAN warns against exploitative employment Casualisation and contract employment for jobs that should be permanent and pensionable continue to plague the oil and gas sector in Nigeria

Revolution Master Plan, a move aimed at optimising Nigeria’s gas resource potential and to bring gas revenue earnings at level with that of crude oil. As social partners in the sector, we were thrilled by the massive impact this will have on the Nigerian economy if g i v e n p r o p e r implementation. As a labour union, we looked forward to the huge job opportunities that this would provide. And confident too, that the gas project would bring to an end gas flaring in Nigeria.

“But four years on, investment in this sector has dipped to an all-time low as the Nigerian LNG Limited (NLNG) cannot get its Train Seven on stream, nor has the much talked about Brass Liquefied Natural Gas (Brass LNG) been brought to production. Failure of the industry to meet its obligations has resulted in massive withdrawal of investments by foreign partners. ”Speaking on Power, Ogun noted that “PENGASSAN appreciates the efforts of the

current regime in improving power supply and stability in the country. The power sector reforms which has seen government sell off her shares in Power Holding Company of Nigeria, PHCN, to private distribution companies, has not yielded the desired promises. Suffice it to say that there has been no significant improvement in power generation and distribution.

“All the distribution and generating companies have not shown enough readiness to invest in improving electricity supply in the country. Instead, the dubious regime of billing customers for electricity not consumed continues. Besides, government must ensure that these electricity companies provide light as agreed or have their licenses revoked. This nation can never have any meaningful development without power.

Nigerians are getting impatient with excuses; please give us efficient and

regular power to drive the economy.”

On industrial relations, he said, “Labour Relations have been relatively cordial and when there were frictions, we tried to settle issues through dialogue and constructive engagements. Thus, we have made both Government and employers appreciate the need to proactively integrate labour in the formulation of major policies that may affect her wellbeing and existence.

“We have chosen to explore social dialogue in resolving our problems not because we are unaware of our might and power, but because we reckon that it is better to settle disputes on the table than to go to the trenches. Often times, this position has been misinterpreted to be a weakness, but to the peril of those who undermine us. In our striving to be one of the most respected Trade Unions in Nigeria, we have consciously imbibed respect for due process in our engagements.

Sweetcrude, July 2014

Labour Victor AHIUMA-YOUNG

T

he IMMEDIATE past President of the Petroleum and Natural Gas Senior Staff Association, PENGASSAN, Mr. Babatunde Ogun, last month criticised gover nment’s continued subsidy on Premium Motor Spirit, PMS, otherwise known as Petrol. In this interview, he explains why.

Excerpts Few weeks ago, you issued a statement condemning government’s continued subsidy of petrol, while labour movement which you belong is known to be strongly in support of. What informed your position?

Current subsidy regime favours the rich. That is why I am disposed to a better subsidy programme that will impact on the poor masses such as the railway rebuilding project, for example. I know very well that the railway will go a long way towards solving our problems in Nigeria. With railway, average Nigerian can pay little money and go where he is going; he won’t be bothered much about high transportation fares.

Government should engage labour on what they want to do with subsidy money, how to fund the cost of railway project that can cut across the length and breadth of the country, so that people can move their goods and property with ease. The most interesting thing is that there is provision for express train that can move as fast as vehicles. And if that is available, I will not bother about spending so much money on flight to Abuja. The average Nigerian will just board a train to Abuja and get to his destination quickly without spending so much.

If government wants to finance the rail project, even if it is valued at about N10 trillion, it can borrow the much needed funds, award the contract, and then r e m o v e t h e s u b s i d y.

Nigerians will not trust government’s intention for removal of subsidy without committing to some relevant projects that are masses oriented. In the alternative, government can do the project in partnership with any private investors who will run it and collect the proceeds as long as they may agree with government.

The current subsidy regime is not benefiting the masses,

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My problem with fuel subsidy —Ogun

Babatunde Ogun it is just making some individuals rich. The industry is bogged down; it has not allowed the industry to grow.

That is why you cannot see private investors investing in refineries and things like that. So, let government remove that bottleneck.

Nigerians want to get benefit from oil and gas; they don’t want to continue suffering the way they are now. I know that the cost of living is quite high; and if we have railway that is functional in all parts of the country, Nigerians will

b e h a p p y. W h y c a n ’ t government start from there to redirect the subsidy regime? Government cannot continue the subsidy programme it is currently doing, because it is only benefitting few rich individuals. But if government builds a railway with subsidy money and then stop subsidy, that will be quite good.

What are the high and low points of your struggle as PENGASSAN leader?

The current subsidy regime is not benefiting the masses, it is just making some individuals rich.

The industry is bogged down; it has not allowed the industry to grow

One of the low points of my struggle is my not being able t o c o n c l u d e Pe t r o l e u m Industry Bill, PIB. If we still had time, it would have been a very good thing to pursue it to logical conclusion. The challenges were very enormous. If the bill was concluded, we would have been able to know if all our inputs in the bill will finally be part of the new Act. I just hope, based on the understanding that we have good government, good leadership at the National Assembly, and the NNPC, that by the time the bill is passed some, of the inputs which we gave them will be incorporated.

Could you highlight some of those things?

One of those things we proposed is that under PIB, there must be continuation of conditions of service and other rights. And we proposed that whatever happens as a result of the PIB, the people going to work there will continue to enjoy the same conditions of service which they enjoyed prior to PIB, and whosoever is going to benefit from it is going to take both the benefits and liabilities of the sister organization.

We are afraid that when the PIB is passed and some organizations have to go, or nothing changes, what happens to their Collective Bargain Agreement, CBA? So, there are negotiations going to be done, but that is on labour angle.

Another area is the excessive power conferred on the Minister of Petroleum, and we said no, it must not happen. In fact, we are saying that the minister has no business being the chairman of the NNPC board. Government should appoint a neutral person as the chairman of NNPC board.

We also proposed two regulatory agencies; one for upstream and the other for downstream. The reason why the government and the system cheat oil workers is that there is no agency regulating the downstream sector. If government is paying subsidy on kerosene and petrol and they are still selling it on high price, and there is no agency checkmating them because they are so many. If there can be good agencies that can monitor both upstream and downstream, we can get that done.

Sweetcrude, July 2014

Maritime

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FG should give us better recognition —Seafarers

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Customs officer’s in training

Customs, Shippers’ Council partner on trade facilitation Godfrey BIVBERE

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o further ensure t r a d e facilitation and faster clearance of goods from the ports, the Nigeria Customs Service, NCS, and the Nigerian Shippers’ Council, NSC, are to partner on the establishment of a Single Window programme, an all-inclusive electronic trade platform.

The decision for the partnership was reached during a meeting between the two government agencies in Abuja recently, when the Executive Secretary of the NSC, Alhaji Hassan Bello, paid a courtesy visit to his counterpart in Customs, Alhaji Dikko Abdullahi.

This is part of the

consultation with various stakeholders following government’s appointment of the Council as economic regulator for the ports.

According to Bello, “We have collaborated with Customs before, especially in the era of Single Window, which is an electronic interface capturing various transactions. If we are able to introduce that because that is what we proposed, then the issue of clearance will be simplified.

“We will eliminate a lot of bureaucracy, which means multiplicity of documents, multiplicity of desk and the procedures will be simplified.

It is not going to be cumbersome; the result of this will be efficiency, more goods coming in because Nigerian ports are in competition with her

neighboring ports.

“That is why people clear their goods from Benin Republic, because you have less documentation; and you have fewer desks, this is what we want Nigeria to be.”

Recall that the Customs already has the Nigerian Trade Hub, and whether the proposed Single Window will not be a duplication, Bello said that the Trade Hub “is the beginning of it, the Single Window is comprehensive. It means payments are being m a d e e l e c t r o n i c a l l y, clearance is done electronically, you have electronic manifest sent even before the ship sails so that we get ready for declaration.”

“The Customs will do their profiling even before the ship berths in Nigeria. This will eliminate a lot of red-tape, a lot of bureaucracy. Since it is

electronic; a scientific interface, it makes everything not only transparent but also easier.”

On efforts to enlighten freight forwarders, he said, “It depends on how you look at it. The port is just like the blind people who met the elephant; everyone will say his own version.

“Freight forwarders are an extremely important group and they need to also be professionalised and possibly consolidated. It is not a trade for everybody.

“We need to eliminate touts amongst them and we are working with the genuine freight forwarders through the Council for Regulation of Freight-Forwarders (CRFFN), to achieve this.

Every aspect of the port community needs to be sanitised,” he noted.

he National President of the Nigeria Merchant Navy Officers and Water Transport Senior Staff Association, Mr. Alalade Mathew, has urged the Federal Government to give desirable attention to Nigerian’s sea farers, to enable them compete favourably internationally.

The President disclosed this during the 2014 Seafarer ’s day tagged, “Seafarers Brought Me” organised by the Maritime Reporters Association of Nigeria (MARAN) in Lagos.

According to him, “Government and port authorities should treat seafarers as partners in the fight against terrorism and facilitate their access to ports and shore facilities”.

He stressed that the collaborative efforts of all will give the economy a boost, “Shipping relies heavily on the initiative, cooperation and constant vigilance of seafarers to help prevent breaches of maritime security and without their support and w h o l e h e a r t e d commitment, the system the ISPS code aims to put in place will be severely weakened,” he said.

“It is crucial that seafarers are not made to feel rejected in any way or that their services are not sufficiently recognised,” he appealed.

He however noted that, “Nevertheless every year too many seafarers are either injured or lose their lives in maritime accidents. More often than not, their injuries and deaths go largely unrecorded and are soon forgotten by all but close friends and families,” However, the president of the Maritime reporters Association of Nigeria, Bolaji Akinola said about 6000 cadets of the Maritime Academy of Nigeria (MAN) Oron, are lacking sea time experience which has been a bane to their growth.

Sweetcrude, July 2014

Maritime

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Why passengers are scared of water transportation —NIWA

Water transportation

Godfrey BIVBERE

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he National I n l a n d Wa t e r w a y s Au t h o r i t y, NIWA, has said that passengers are scared of traveling by water because there are not sure of the condition of the boats and ferries plying the nation’s waterways.

Disclosing this at a meeting with operators in Lagos, Mr. Muazu Sambo, the Lagos Area Manager of NIWA, said that the Authority will soon put in place measures to ensure that all safety requirements in the sector are met.

Among the measures to be put in place are compulsory operators’ permits, survey certificate of all water craft to

ply the waterways, use of manifest by all operators and compulsory certificate of competence for all captains driving water craft on the waterways.

Sambo said all operators must their permits, survey certificates as well as stickers in the next three months or face sanctions, which may include stopping such offending firm from operating.

He also noted that the Au t h o r i t y h a s p r i n t e d manifests which were shared to operators for use before any firm would start printing for themselves, adding that the decision to print the manifest is to ensure uniformity in the document used by all operators.

He also said that the advantage of operators insisting on passengers

writing their names on the manifest is that it comes handy for insurance claims in the event of an accident, as well as serving as a source of infor mation on all the passengers on a particular trip.

On the drivers permit from the Nigerian Maritime Administration and Safety Agency, NIMASA, Sambo said that all boat operators are expected to get theirs before the end of the year.

T h e N I WA b o s s a l s o disclosed that they have established a safety compliance team that will be paying unscheduled visits to all the jetties to ensure that they are observing all the laws governing water transportation.

The time frame for the implementation of the measures soon to be enforced

by the Authority, were agreed upon by both the management and representatives of the various firms operating in the sector in the Lagos area.

According to him, “We are worried about boat mishap on our waterways and our responsibility is to find out the human causes and ensure that it does not happen again. When this is done and it still happens, then it is an act of God. “We are worried and we know that you are worried too.”

He stressed the need for partnership to ensure that the incessant boat mishap is curbed or reduced to the barest minimum, he concluded.

Genuine declaration: Customs puts 175 companies on fast track

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he Nigeria Customs Service, N C S , h a s compensated 175 companies for sincerity in the declaration on their imported consignments into the country by putting them in fast track, its Comptroller General, Dikko Inde Abdullahi, said recently in London.

Speaking at a seminar on “Business in Nigeria” organised by the Financial Times of London, Dikko explained that the companies involved were put on fast track (speedy clearing process) because of their integrity in declaration, which helps the Pre-Arrival Assessment Report, PAAR introduced by the Service to function better and build stronger relationship with the business sector.

According to him, “The launch of PAAR has helped to build stronger relationship with the business sector. By its configuration, importers and operators who have demonstrated high level of integrity in their declarations are flagged.

To encourage them, 175 of them have been admitted into a new Fast Track system.

“These companies now enjoy special concessions like blue lane selection, inspection at owners premise and exclusive membership of the Customs Compliance Ambassadors Group,” he posited, stressing that “ with the level of moder nisation so far attained in Customs operation.”

He assured the existing and potential investors in Nigeria, that they indeed find the country absolutely ready for business.

The Customs boss said the Service has developed the Nigerian Trade Portal, and made it accessible worldwide through www.nigeriatradehub.gov. ng, thereby creating an interactive portal that offers online advisory to C u s t o m s t a r i f f classification and valuation, tax base, Nigerian regulatory agencies, Customs brokers, currency conversion tools and lots more.

Sweetcrude, July 2014

29

N’Delta Youths laud unemployment reduction initiative Jimitota ONOYUME

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ort Harcourt: IT was a moment of frank talk in Rivers State, as youths gathered under the aegis of Integrated Yo u t h s E c o n o m i c Empower ment Program, I Y E E P, t o d i s c u s s t h e challenges of unemployment, cultism and other related vices facing them in the Niger Delta and the country at large.

They also condemned the killing of youths, women and children by the dreaded Islamic sect, Boko Haram in some states in the north.

President of the Rivers State chapter of IYEEP, Mr Samuel Uchechukwu, identified unemployment as the greatest pain plaguing youths in the state and the country.

He thanked President Goodluck Jonathan for coming up with, IYEEP, an initiative aimed at providing empowerment programmes for youths at the grassroots levels nationwide.

Uchechukwu also appealed to all levels of government to see job creation and youth empowerment programmes as twin areas they should give priority attention to, noting that it would reduce incidents of crime and other related vices at the end of the days.

“Unemployment among our youths is one of our biggest challenges as a state, but this is a challenge we are willing and ready to address to unlock the vast potential of Rivers State youth and Nigeria at large,” he said.

He added that IYEEP is going to empower about 600 youths across the state, even as he pleaded with Boko Haram members to sheath their swords and pursue the path of peace.

Continuing, he said they should accept offers made to them by the federal government to end hostility

Job seekers

in the north. The youths also hailed effort by security agencies in the country to bring the activities of Boko Haram under control.

“We also use this medium to call on our northern brothers that are engaged in the crises in the north that violence has never been an instrument used by us to end any disagreement. Therefore, we ask them to lay down their arms and embrace all kinds of dialogue instituted by Mr President, and accept whatever offer he gives to them. This is so they can also

benefit from this integrated y o u t h e c o n o m i c empowerment programme of M r P r e s i d e n t ’ s transformation agenda for youths. We in Rivers State disagree with the killing of our fellow youths and children in the north who are the leaders of tomorrow,” he said.

The National Coordinator of IYEEP, Mr Obina Nwoke, said the programme is aimed at developing youths in all parts of the country, and appealed to them to shun violence and acts capable of

Unemployment among our youths is one of our biggest challenges as a state, but this is a challenge we are willing and ready to address to unlock the vast potential of Rivers State youth and Nigeria at large threatening the peace.

Many of the youths who spoke to Sweetcrude enjoined government and the private sector to partner with a view to reducing the high rate of youth unemployment in the country.

Sweetcrude, July 2014

Community

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Poultry farm

Total donates 3,730 birds to Egi farmers Jimitota ONOYUME

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O R T H A R C O U RT: Total E & P Nigeria, has donated about 3,730 locally bred day old chicks known as Shika Brown, to farmers in Egi

communities in Ogba Egbema Ndoni Local Government Area of Rivers State.

The Minister of A g r i c u l t u r e a n d Ru r a l Development, Dr Akinwunmi Adesina, who flagged off the distribution of the Shika Brown layer birds

exercise to farmers lauded the oil giant for the donation.

Adesina advised Nigerians to invest heavily in the agricultural sector, saying it has the capacity to boost economy.

The Minister, who was represented by a Director in his Ministry, Elder Ime

Umoh, said the federal g o v e r n m e n t h a d strengthened farming cooperatives in the state, adding that government has also evolved guidelines for poultry farmers to ensure they met acceptable international standards.

E a r l i e r, t h e D e p u t y

Managing Director, Port Harcourt District, Total E&P, Mr. Nicolas Brunet, charged the farmers to make good use of the opportunity, adding that it will help diversify the economy of Egi area. “It has been a cause of concern that greater part of the economic life within and around the Egi land has been focused on the oil and gas.

On our part, we have worked within the years to e n c o u r a g e t h i s diversification through the establishment of various institutions in the communities,� he said.

Represented by the Deputy G e n e r a l M a n a g e r, Sustainable Development of the firm, Mr Cyprian Ojum, he further commended the federal government’s agriculture transformation agenda, noting that it will reduce dependence on oil and gas in communities in the country.

Sweetcrude, July 2014

Community

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Chevron partners A Bayelsa Govt on HIV/AIDS Samuel OYADONGHA

ttempt by the Bayelsa State Government to curb the spread of HIV/AIDS in the state has received a boost as the Nigerian unit of America’s oil giant, Chevron Nigeria Limited, CNL, has donated about $1.7million to battle the scourge in the predominantly riverine state.

In spite of Bayelsa being listed as the least populated state in the federation, the National HIV zeroprevalence sentinel survey of 2010, placed the oil and gas rich state as the third highest in Nigeria with 9.1 per cent prevalent rate. It follows Benue State (12.7 per cent) and Akwa Ibom State (10.9 per cent).

Prior to Chevron’s inter vention, the State Director of Public Health, Dr. Wakiente Omubo, had hinted that about N8bn was needed to effectively tackle the scourge.

Omubo spoke at a PROMOT project expansion launch held in Yenagoa, the state capital, which also had in attendance persons living with HIV/AIDS in the state.

He said 6,072 pregnant women were living with HIV/AIDS in the state.

Giving a breakdown of the prevalence rate of the infection according to the local government areas, he said Brass has 7.6%; Ekeremor 9.1%; KolokumaOpokuma 9.1%; and Ogbia 9.1%. Others are Nembe 9 . 1 % ; Ye a n g o a 8 . 7 % ; Sagbama 12.7%; and Southern Ijaw, the largest council area in the state 3.5%.

The state was indeed looking for help to tackle the HIV/AIDS pandemic when Chevron presented itself as a friend by investing $1.7million to battle the scourge.

Making the donation known at the launch of the expanded PROMOT project also known as the Prevention of Mother-to -Child Transmission (PMTCT) in Y e n a g o a , t h e Chairman/Managing Director, Chevron Nigeria L i m i t e d , M r. A n d r e w Fawthrop, said the gesture is aimed at reducing the spread of HIV/AIDS virus in the state.

Represented by the Area Manager, Mr. Joe Jakpa, the Chevron boss said prior to the company’s intervention, only a quarter of 98,000 pregnant

women had access to antenatal care.

This, he said, prompted the company to partner with PACT, state government, and other agencies to contribute in eliminating mother-tochild transmission of HIV/AIDS in the state.

According to him, the partnership, which started in 2012, was part of the company ’s $20million United Nations millennium

goal commitment to halt and reverse the spread of HIV/AIDS in 2015.

The collaboration, he further explained, has helped to reach more than 6,500 people with awareness prevention infor mation, tested more than 7000 women during pre-natal and arrange for HIV counseling for nearly 700 people. He said the company was proud to expand its partnership

The collaboration, he further explained, has helped to reach more than 6,500 people with awareness prevention information, tested more than 7000 women during pre-natal and arrange for HIV counseling for nearly 700 people

with PACT by raising its five year investment for the PROMOT project to $5.3million.

The additional funding support of $1.7million, he added, will facilitate the expansion of the PROMOT project to all local government areas in the state.

“Chevron is proud to expand our partnership with PACT to support impactful initiative like PROMOT. This is a proven model that we are motivated to expand as we work together to deliver real, measurable results towards ending mother-to -child transmission,” he said.

However, Omubo while thanking Chevron for the gesture said the war against the spread of the infection was far from over.

He appealed to other interventionist agencies and companies to emulate Chevron by coming to the aid of the state.

He assured that the implementation of the expanded community awareness programme would be phased until the

HIV/AIDS patient

Sweetcrude, July 2014