Page 1

Carter Center appreciates SEOF’s $250,000 donation


Our target is to ensure more jobs domiciliation —NCDMB P\14


A Vanguard Monthly Review Of The Energy Industry VOL 03

JUNE, 2013

N0. 49


May-13 Apr-13 Mar-13 Feb-13 Jan-13 Dec-12 Nov-12 Oct-12 Sep-12

100.74 101.05 106.44 112.75 109.28 106.55 106.86 108.36 110.67

Aug-12 Jul-12 Jun-12 May-12

109.52 99.55 93.98 108.07

Daily | Weekly | Monthly | Yearly

99.89 US

124 120 116 112 108 104 100 98 92 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov--12 Dec-12 Jan-12 Feb-12 Mar-13 Apr-13 May-13

OPEC’s high output, high price days dwindle


PEC’s halcyon days of high prices and high production may be drawing to a close as soaring U.S. output opens a new era for world oil markets. After a comfortable ride since the 2008 price crash and record revenue of $1 trillion last year, it may have to be more pro-active on output policy. The rise of U.S. shale oil and slack demand will eventually force OPEC either to support oil at $100 a barrel by cutting output -


Local content gives succour to indigenous players SEBASTINE OBASI


he golden era of easy oil is over...Today the rules of the game have changed:

Developing local economies, stimulating industrial development, increasing local capability, building a skilled workforce and creating a competitive supplier base – also referred to as local content – are

minimum requirements for doing business with host countries and national oil companies,” a recent Accenture report stated. Accenture, a global management consulting, technology services and

outsourcing company in its report also said that International Oil Companies (IOCs), now have to develop new models and redefine their business approaches with National Oil Companies (NOCs)



Contents 4 8 12 13 18 19 20 22 24 24 26 27 29

COVER Local content give succor to endogenous players

OIL Carter Center appreciates SEOF’s $250,000 donation


PIB: Panacea to efficient petroleum industry


Our target is to ensure more jobs domiciation -NCDMB


Mainland Oil plans N2b investment in operation expansion


Drilling types and techniques

POWER Minister promises 10,000 MW from solar


Shun independent approach to petroleum risks, insurers told

LABOUR Power risk: concern grows on local capacity


Epileptic power, a major challenge facing Nigeria -TUC


Cadastre office has boosted investors confidence in mining


MAN to spend N2bn on sea training for cadets


Bayelsa community to get deep sea port

Sweetcrude is a publication of Vanguard Media Limited


Francis AYO & Johnbull OMOREGBEE

Enquiries Call: 08098051103

Printed and Published by


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

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

It’s now 14 years into our renascen t democracy, and Nigerians hav e come to accept that military rule is no longer the fad. But som etimes, it still seems we have n ot completely got over militarism judging from the brutality that has pervaded the system for years n ow. But that is a top ic for another! In this edition , we bring yo u a holistic assessment of ou r performance in the Energy sector across the va lue chain. But it is not our cover, as our cover weigh s the gains and pa ins of three years of Nigerian Content impleme ntation. While the journey has b een largely saluta ry, indigenous operators insist tha t it could still be mu ch better. The Executive S ecretary, NCDM B, Mr. Ernest Nwapa, defends the role of his agency in domiciling more industry jobs, the reby stemming more capital fligh t from the econom y. Of course, until th e PIB is passed, we cannot help but keep tabs on d evelopments with the bill. To this end, the Directo r, DPR, Mr. Osten Olorunsola, speaks on the im portance of proper regulation to foster investment s as well as bo ost investors’ confidence in the industry. As is our custom each year, Sweet crude was at the 2013 OTC in Houston Texas, US A. We use this opportunity to than k our numerous ad vertisers for a successful outin g. For those who co uld not attend for one reason or an other, we bring to you images of what happened. In the various segments – Oil, Finannce, Fe ed be ac k, Tec h n ol og y, S ol id M i ne ra ls, Insurance, Labo ur, Maritime, an d Community, there is something new. We also remem ber NNPC’s lat e Dr. Levi Ajuonuma, and pr ay God to continu e to console his family. Happy new month!

CWC Nog Tech Ad


Cover Story


Local content gives scour to indigenous players CONTINUED FROM PAGE 1 to include equity-building programmes that provide an opportunity to improve the IOC’s “license to operate” in developing countries. The report was based on the growing concern by NOCs and emerging oil producing countries to have bigger stake in the management of their natural resources, which have been in the hands of foreign multinationals over time. According to the Accenture, developing countries and NOCs with maturing mineral sectors, particularly oil and gas, have placed a renewed emphasis on increased local content participation by IOCs in recent years. The report also said that host nations and NOCs are emphasizing that the desire for an increased contribution to the local economy and society and a strategic intent to pursue local content go beyond philanthropy and are beginning to expand their perspectives and mind-sets regarding how local content should be implemented.

Economic drain Their reason is quite understandable. In Nigeria, for example, the control of oil and gas resources by the IOCs has led to a lot of capital flight, resulting in a drain on the economy of the country. According to Ernest Nwapa, Executive Secretary, Nigerian Content Development and Monitoring Board, NCDMB, Nigeria recorded an estimated

capital flight of about $380 billion between 1956 when oil was discovered and 2006, when the Nigerian content policy was initiated. He also said that the country’s oil and gas industry has exported approximately two million jobs to other countries outside Nigeria within the 50 year period of operations by various operators in the sector.

According to the Accenture, developing countries and NOCs with maturing mineral sectors, particularly oil and gas, have placed a renewed emphasis on increased local content participation by IOCs in recent years

Content Act comes to the rescue However, the situation has changed since the signing into law of the Nigerian Content Bill, in April 2010, by President Goodluck Jonathan. Nwapa told the inaugural members of the local content committee of the House of Representatives that before now, more than 95 percent of the jobs in the industry were done abroad. Specifically, he stated that $214 billion worth of procurement and $9 billion worth of research and development were done in North America, while $78 billion worth of technical services and $39 billion worth of engineering work were done in Europe. Asia dominated the fabrication aspect to the tune of $39 billion. The NCDMB boss also said that with the coming into place o f t h e Ac t , $ 1 0 7 b i l l i o n procurement, $20 billion

fabrication, $14 billion technical services, $20 billion engineering and $7 billion research and development are domiciled in Nigeria. Nwapa also explained that $191 billion could be retained, while 300,000 new direct job opportunities are expected in such areas as engineering, sciences, technical services and manufacturing. In a similar vein, Nwapa said that 90 percent local content has been achieved in engineering, while 50 percent has been achieved in fabrication. On the one percent of the contract sum for any project, which must be deducted at source and paid into the NCD Fund, he said that $150 million has accrued as at January, 2013. He maintained that strong stakeholder collaboration and local value addition framework

would be required to achieve real Nigerian content.

Allied sectors Apart from the oil and gas sector, Nwapa identified maritime as one other area with high impact on employment, technology transfer and value added ser vices where NCDMB’s implementation strategies have been visible. He noted that the sector used to be dominated by foreign owned and crew vessels and rig operators, resulting in about three billion dollars capital flight, but with the Board’s marine vessel and rigs ownership strategy, the situation is changing with remarkable indigenous participation. He said, “Indigenous players are currently participating fully in the smaller vessel category,

thereby retaining about one billion dollars annual spend in Nigeria, while a structured intervention for more Nigerian ownership of the larger offshore vessels has been put in place with a potential for retaining a further $1.5 billion in the next two years. “There is optimism, however, that the current drive by the Board will ensure that by 2020, the ownership profile in the marine sector would be more indigene driven with a retention in excess of $4 billion per annum, 250,000 employment and training opportunities.” Three years of Content Act On his assessment of the three years of Nigerian content, Nwapa resisted making a self assessment, saying that it is left for the public to judge him. According to him, “I do not believe in talking about my own performance as a board, but the feedback we get …all the oil companies, the service companies advertised for the three-year anniversary. I said to myself, we should not over celebrate it this year. Let other people give their own testimonies. The testimonies are clear. If you look at expatriate utilization, we are controlling it. We are telling them to go and find Nigerians to partner with.


Cover Story


Local content gives scour to indigenous players

CONTINUED FROM PAGE 4 That is very fundamental. The contracts that are being awarded, you will see that mostly all the contracts have Nigerian participation if not complete, but 80 to 90 percent Nigerian participation,” he said. Nwapa may have been self-effacing in assessing the performance of his Board in the three years of its existence.

Oil majors’ support General Manager, Nigerian Content Development, Shell Pe t r o l e u m D e v e l o p m e n t Company Limited, Igo Weli, said the NCDMB has done well in the last three years. According to him, “The Nigerian Content Development Monitoring Board has done a great job in terms of leading this effort. They have set out clear framework for implementation… If I read that Act, I see a lot of opportunities to create values, to create jobs in this country and to use it as a lever to manage some of the issues we have as a nation.” He however pointed out some challenges facing the content law such as dearth of research and development, fallen educational standards, capacity and capability gaps in key areas, Petroleum Industry Bill, PIB uncertainties, and the content act waiver and moratorium.

Acknowledgments and concerns Dimeji Bassir, Vice President O p e r a t i o n s , O f s e r v, a n integrated energy company, said the Local Content Act is work in progress which has so f a r, b e i n g a b l e t o e l i c i t compliance from the international oil companies. “The implementation of the Nigerian content act, in my opinion, is work in progress. It is a marathon and not a sprint…It is giving priorities at par with safety which is a very important element of upstream oil and gas development activities. Because of the mandate vested on the NCDMB, it has been able to drive some level of compliance within the IOCs and their numerous projects. The IOCs today know that if they are found wanting in any areas relating to their commitment to fostering Nigerian content development on projects and related operations, it is tantamount to breaking a law which has consequences. This fact has facilitated effective implementation of the law and wide adoption by key industry stakeholders,” he said. Bassir however explained that the NCDMB is resource (financial and human) challenged, which limits its effectiveness in following through with monitoring

compliance. “Although most IOCs and major service companies today have fullfledged role of NCD officer or manager, there is not a clear-cut, coordinated direction and focus of efforts which makes for several disconnected, duplicated, disjointed activities which again make it difficult, if not impossible to consistently track and report Nigerian content development progress,” he said. Emeka Ene, Managing D i r e c t o r, O i l d a t a / Xe n e r g y Group and Chairman, Petroleum Technology Association of Nigeria, PETAN, said the content law has made remarkable impact on indigenous participation in the nation’s oil and gas industry. “It’s been very impactful. It’s been a significant increase not just in the quantum of local content, but also in the intensity of it, in the structure of it. Nigerian service companies have gone into areas that before now, they were completely locked up. We have seen gradual increase, where we had a linear growth right up to 2010; we have an exponential growth in local content, particularly in knowhow and in ownership of equipment and processes. We have seen right across the industry, significant change in the right direction.

Ene further explained that some of the areas hitherto not populated by Nigerians include, deepwater sub-sea installations and maintenance, fabrication of jackets, remotely operated vehicles, (ROVs), sub-sea vehicles, mini sub-marines that are controlled remotely from surface to perform installation jobs at the bottom of the sea. Ene also said that the content law has been properly implemented within the short time it came into being.

policy makers – the Ministry of Petroleum Resources, NNPC, National Oil Companies, and the Independents. “Service company umbrella organizations like PETAN have actually worked together in spite of the flaws in the industry, in spite of the challenges of s e c u r i t y, i n s p i t e o f t h e upheavals in the global economic market, all we have seen is a steady commitment to make it work. That for me, is a very positive take from this third

The Nigerian Content Development Monitoring Board has done a great job in terms of leading this effort. They have set out clear framework for implementation… “In three years, the expectations have been largely met and in some cases, exceeded. Three years in the life of an industry or in the life of a law is nothing. In three years, we have seen a step change. There has been exemplary leadership from the NCDMB. There has been visionary leadership from

anniversary,” he said. He however said that one of the challenges facing the law is finding the balance in the waiver window so as to encourage capacity building in the industry. Apart from that, Ene stated that there should be effective monitoring by the Board to eradicate the tendency to circumvent the law.

Cover Story



Mixed fortunes for energy sector …Improvement in production, reserves …Rising cases of crude theft, vandalism, controversial payments MICHAEL EBOH


t has been mixed fortunes for the Nigerian energy sector since the current democratic dispensation began May 29, 1999. Since the return to democracy, the sector has recorded significant improvement in key parameters such as in reserves and production while it also recorded an increase in other neg at i ve p arame t e rs , li ke increase in pipeline vandalism, crisis in the area of subsidy payment, increased corruption, and divestments by oil majors among others.

Oil production Nigeria’s crude oil production increased from about 2.153 million barrels per day, bpd, in 1998 to 2.52 million bpd in 2012, representing an appreciation of 17.05 per cent over the last 14 years. Crude oil production was about 2.055 million bpd as at 1980, peaking at 2.627 million bpd in 2005. Conversely, the nation’s crude oil reserves rose from 27.5 billion barrels as at 1998 to about 35 billion barrels at present, rising to a peak of 36.22 billion in 2006 and 2007, before dropping to

31.9 billion barrels in 2009, then rising to its current levels. A breakdown of Nigeria’s crude oil production since 1999, according to data obtained from the Nigerian National Petroleum Corporation, NNPC, put Nigeria’s crude production over the years as follows:

Vandalism unlimited On the flip side, pipeline vandalism and crude oil theft attained a worrisome dimension since the return to democracy in May 1999, with the Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, saying the country loses about N954 billion ($6 billion) to crude oil theft annually. Similarly, the Pipeline Product Marketing Company (PPMC), a subsidiary of the NNPC, said Nigeria lost a total of N162.6 billion from crude oil and petroleum products theft between 2009 and 2012. Last year, the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, said Nigeria lost about N1.908 trillion ($12 billion) to pipeline vandalism and oil theft in 2011, adding that of the total amount, $5 billion was spent on pipeline repairs, while the amount lost to crude theft was valued at $7 billion. Confirming this, the Minister of Finance and Coordinator of the Economy, Mrs. Ngozi Okonjo-Iweala, said Nigeria is

losing an estimated 400,000 bpd of crude oil, resulting in about 17 per cent reduction in export sales. This cost the nation’s treasury about $14 billion in 2011 alone.

More gas up in flames Another major issue that came to reckoning during the return to democracy in 1999 is the issue of gas flaring, which the NNPC estimated at N159 billion ($1 billion) losses annually. According to the NNPC, the country currently flares about 15 per cent of its 7.8 billion cubic feet gas wells production per day, amounting to 1.2bcf per day. However, end seems not to be in site to the issue of gas flaring, as oil majors disclosed recently that their inability to stop gas flaring is due to absence of the necessary infrastructure among other challenges.

Scandalous subsidy regime Furthermore, subsidy payment generated a lot of controversies


Cover Story



Mixed fortunes for energy sector …Improvement in production, reserves …Rising cases of crude theft, vandalism, controversial payments

Oil workers


Export down the years Furthermore, Nigeria’s crude oil export rose from 706.265 million barrels in 1998 to 822.08 million barrels in 2011. A breakdown of the export profile is shown below:

in Nigeria, with large scale fraud and irregularities recorded in the system. It was alleged that in 2006, Nigeria spent N261.1 billion on fuel subsidy; in 2007 - N278.9 billion; in 2008 - N633.2 billion. A report by the National Assembly revealed monumental corruption in the fuel subsidy scheme, disclosing that the country paid out about N2.587 trillion between 2009 and 2011 against N384 billion budgeted for the period. A number of individuals and firms were asked to refund certain amounts of money to the coffers of the federal government, while some of them are currently being prosecuted.

Controversial lease sales There are also the controversies surrounding the award of Oil Mining Leases, OMLs, Oil Prospecting Leases, OPLs, and Marginal Oil fields among others.

Darkness pervade the land The misfortune of the country ’s power sector continued with the return to democracy in 1999, as power

supply declined to alarming levels over the years. However, despite the fact that a significant increase had been witnessed in power generating capacity since the return to democracy in 1999, the increase is yet to translate into steady power supply to Nigerians. Prior to May 29, 1999, Nigeria’s power generating capacity was as low as 1,500 mega watts, MW, a factor, Prof Rahamon Bello, Vice Chancellor, University of Lagos, attributed to lack of investment in maintenance and expansion programs on existing power plants. From about 1,500MW, power supply rose to about 5,500MW in 2010, before dropping to below 4,000MW currently. Reforms in the power sector were kick-started in 1999, when the Federal Government, led by President Olusegun Obasanjo, set up the Electric Power Sector Implementation Committee, EPIC, through the National Council on Privatisation, NCP. The Committee set up to undertake a comprehensive study of the electricity power industry, came up with the National Policy on Electric Power and a draft Electric Power Sector Reform Bill which formed

the formed the basis of a draft bill sent to the National Assembly by the NCP in 2002 and subsequently passed in 2005. The Electric Power Sector Reform Act which led to the creation of the Power Holding Company of Nigeria, PHCN, and the Nigeria Electricity Regulatory Commission, NERC, has as its major components, the restructuring of existing utility, liberalisation and privatisation, as well as reinforcement of existing infrastructure through National Integrated Power Projects (NIPPs) and other government interventions. The Act empowers the PHCN to assume the assets, liabilities and employees of National Electric Power Authority, NEPA, unbundling of PHCN into successor companies and ensuring greater operational autonomy, development of an efficient electricity market, privatisation of successor companies. On ascent to power, the Goodluck Jonathan administration jumpstarted the power sector reforms programme which was stalled. He launched the Roadmap for Power Sector Reform in August 2010, followed with the reinstatement of the NERC and the inauguration of the board of the Nigerian Bulk Electricity Trading Plc, which was created to encourage investment in the p o w e r s e c t o r, e s p e c i a l l y investors in the power generating sector. The Jonathan administration also embarked on the privatisation of thermal generation stations and power distribution companies across the country, with the aim of creating an electricity market that would lead to a more efficient electricity supply industry and a more vibrant power sector. The administration also entered into agreements with different companies and investors with the aim of increasing the country’s power sector. It also embarked on the commissioning of power projects across the country and has signed agreements with gas companies to boost gas supply to gas-powered generating facilities in the country.



Carter Center appreciates Oil & SEOF’s $250,000 donation


Boost transparency, accountability in Nigeria’s petroleum industry now


he Carter Center, founded by a former United Sates President Jimmy Carter, has expressed appreciation to the Sir Emeka Offor Foundation, SEOF, for its generous donation of $250,000 to the Center. In a letter to SEOF Founder and Chairman of Chrome Group, Sir Emeka Offor, dated May 23, the Carter Center thanked its donor for the “generous contribution of $250,000 to aid the fight against blindness in Southeast Nigeria.” The letter signed by Jimmy Carter himself, expressed a desire to meet with Offor either in Atlanta Georgiabased Center, or in London, saying, “Your commitment to improve Nigeria will prove invaluable for the prospect of a better future for million,” while expressing gratitude for his investment. Carter’s letter had earlier


been preceded by another letter signed by the C o u n t r y Representative/Ni geria of the Carter C e n t r e , D r. Emmanuel Miri, also expressing appreciation for t h e S E O F g e n e r o u s donations. Dated May 15, Miri expressed the “hope that this generous and humane gesture will signal the beginning of a long and fruitful collaboration/partnership between the Carter Centerand SEOF/Chrome Group for the benefit of the good people of the South East states in particular and Nigeria in general.” He noted that although the fund will be administered

from Atlanta, he gave the assurance that the Nigerian unit’s commitment to the programme and to the “judicious and maximal utilization of the funds in the states in accordance with SEOF/Chrome Group instructions

… Books for Africa acknowledges receipt of $600,000


n another development, the Sir Emeka Offor Foundation, had fulfilled its pledge of $600,000 to US-based, education-focused, Books For Africa, BFA, in line with the foundation’s mission to promote education in Nigeria and the rest of Africa. Confirming the receipt of the fund in a letter dated May 20, to SEOF Founder, Sir Emeka Offor, the BFA Executive Director, Dr. Patrick Plonski, expressed his organisation’s appreciation for the generous donation. Plonski said the donation, “ will fund the delivery of well over one million books to Nigeria and other

locations in Africa,” adding that “This donation represents the single largest donation we have ever received in Books For Africa history, so we are naturally quite excited.” He noted that the generosity of Offor in promoting education across Africa is not only outstanding but quite commendable. The Founder, BFA, Mr. Tom Warth, was quoted as saying that “the benefits that will accrue to the young people of Africa through this generous donation are immeasurable.” He added that “We at Books For Africa struggle every day to convince folks of the wisdom of education in the advancement of African

nations. Over our 25 years, many have agreed with us but 6to have your generous as an example in the future will make our task easier.” The international nong o v e r n m e n t a l organisation, NGO, further noted that the donation will make a huge difference in the lives of children in Nigeria and across Africa that will benefit from largess. The organisation also said that it will be working with SEOF to confirm the final list of countries to be served and the number of containers of books to be delivered to the respective countries.

ecently, the Honourable Minister of Petroleum Resources, Mrs Diezani Alison-Madueke ordered an immediate investigation into the management of 445,000 BPD domestic crude purchase by the Nigeria National Petroleum Corporation (NNPC) and remittance to the Federation Account. This is a welcome development; however, the government should act now rather than wait for the report of the investigation or the passage of the Petroleum Industry Bill – since the country is losing billions of naira daily. Albeit, the recent oil subsidy scandal, Nigeria’s oil and gas resources management are still shrouded in secrecy and corruption. This development shows how a few conspire against economic development and hinders the lives of over 160 million citizens from economic transformation. It is aphoristic (and supported by the empirical evidence) that corruption was and is still inherent in the oil and gas industry and allegedly occurs in all sectors of the industry. Although the President Jonathan’s administration has not executed any licensing round, but it can occur in the licensing stage – where government officials might be tempted to ask for kickbacks in the issuance and renewal of upstream petroleum licenses and leases. Also, as was widely reported, it has its deep roots in the downstream sector – oil subsidy scandal were serious graft was alleged to have occurred in fuel importation among others. The Nigerian Extractive Industry Transparency Initiative (NEITI) expressed concern over the country’s poor rating in the recent global report issued by Revenue Watch Institute (RWI). The institutes Resource Governance Index (RGI) measures the transparency and accountability in the oil, gas and mining sector of 58 countries worldwide and finds that Nigeria fail to meet satisfactory standards on how its oil and gas resources are governed. The report went on to state that opacity, corruption and weak processes are the major problems of the industry. The report ranked Nigeria 40th position out of 58 resource-rich countries across the world. Furthermore, in the group of 17 sub-Saharan African countries ranked in the RGI report, Nigeria lagged behind 10 countries, which included Ghana, Liberia, Zambia, South Africa and Morocco among others. The Africa Progress Panel (APP), an organization that portrays itself as possessing cutting edge policy analysis skills and advocate for equitable and sustainable development in Africa in its recent report “Equity in Extractives” also decried the lack of accountability and transparency in the nation’s national oil company. The report cited the numerous examples of shortcomings in the revenue administration of the NNPC that have been identified. The report further stated that, a task force set up by the government concluded that around US$6.8 billion had been lost between 2010 and 2012, as a result of corruption and mismanagement involving transfers of fuel subsidies. And that another government investigative body identified losses of US$29 billion resulting from natural gas pricing, along with missing payments connected to concessions and production-sharing arrangements. It is no accident that at every stage of the petroleum industry reform process, including reports, findings and recommendations since the late 1990’s the common denominator has always been corruption and mismanagement. From the foregoing, the leadership and the very entities charged with policy implementation may have collectively failed to recognize - or just as likely, abdicated responsibility for this endemic and corrosive social problem. The NNPC has refused to issue its annual reports and provides limited information on its balance sheet; it only reports to its Board of Directors. The lack of transparency and accountability may have a pernicious effect on public financing. I humbly call on the honorable minister to immediately demand a full financial disclosure of all transactions entered into by NNPC after the fuel subsidy scandal and request a quarterly mandatory published financial report of its activities.




W Ofserve projects

h e n Ofserve Nigeria Limited, an integrated oil and gas technical services company began operations in 2010, it was in response to the clarion call by the federal government for indigenous companies to participate in the nation’s oil and gas sector, in order to reduce the dominance of the international oil companies, IOCs. It was also meant to develop local capacity and provide employment to Nigerians. In the last three years, Ofserv, a wholly indigenous company, has proven its mettle as a company that promotes local expertise. The company provides technical and consulting services across two broadbased functional areas, namely, drilling and offshore facilities maintenance. In the oil and gas sector, drilling is the most expensive component of the exploration and production field development cycle. As a result, the industry pays a lot of attention to improving drilling efficiency and

local expertise

A welder

100 companies attend Shell, UKTI investment summit …Nigerian companies win $2.4bn contracts in 2012


ome 100 Nigerian and British companies attended an investment summit in Lagos on 23 May, jointly hosted by Shell and the United Kingdom Trade & Investment (UKTI), as part of efforts to forge partnerships among businesses in the two countries. Some 45 British companies met w i t h t h e i r N i g e r i a n counterparts to discuss potential areas of collaboration in Engineering Procurement Installation Commissioning ( EPIC) contracts, manufacturing, fabrication and general oil and gas services. It is expected that the partnerships resulting from the summit will help grow the capacity of Nigerian companies in provision of goods and services in the oil and gas industry. Welcoming participants, the Managing Director, Shell Nigeria Exploration and Production Company, SNEPCo, Mr. Chike Onyejekwe, said Shell is committed to further

developing local content in Nigeria. He said that last year, Shell companies in Nigeria awarded contracts worth $2.4 billion to Nigerian companies, one billion dollar more than the amount in 2011. “Local content is good for Nigeria and for the business and we’re determined to raise the game,” he added. In a keynote address, the Executive Secretary of the Nigeria Content Development and Monitoring Board, Mr. Ernest Nwapa, commended Shell for the “sustained interest in the Nigeria/UKTI investment forum. “Since the first summit, we’ve seen a significant number of companies participating at the event and we hope they will focus on areas that will improve their capability. It is good to see that other IOCs are beginning to follow Shell’s example by organising similar engagements.” The British High Commissioner to Nigeria,

Since the first summit, we’ve seen a significant number of companies participating at the event and we hope they will focus on areas that will improve their capability represented by Mike Purves, said, “I am overwhelmed by the quality of attendees at this event, it shows that the symbiotic commercial interest between Nigeria and Britain is profitable.” The Group General Manager NAPIMS represented by General Manager, MMD Luke Anele, said supply chain transactions account for 65% of the total business value in the oil and gas industry and promised to support IOCs to develop local

content in the sector. Chairman of the House of Representatives Committee on Local Content, Honourable Asita in his remarks promised that the law-making chamber would strengthen the Nigeria Oil and Gas Industry Content Development Act, and help to create a conducive environment for value-driven partnerships and businesses to thrive.

reduced non productive time in order to control well cost. Ofserv’s drilling support services are aligned to every producer ’s objectives of drilling the most fit-forpurpose well in the safest manner and at the lowest cost per foot. The company ’s directional services include; conventional mud motor drilling, measurement while drilling and ultra short radius drilling. Its drilling optimization services include; artificial intelligence support drilling problem avoidance and drilling optimization staff support. As part of its facilities support services, Ofserv caters for the needs of operators and oil and gas facilities owners focused on improving production performance, while maintaining the highest safety standards. In the area of inspection and maintenance services, the company provides multidisciplined rope access crews, permanent corrosion monitoring solutions, surface prep and offshore painting, bolt tongue and dropped item surveys. It also undertakes third party rotating equipment maintenance, such as inspection, refurbishment and overhaul. The company is positioned to meet its growth objectives through a combination of organic and inorganic growth strategies. Its relationship with its carefully selected global partners ensures that the company is uniquely positioned to offer game changer technologies in such areas as directional drilling/measurement while drilling, wireless enabled corrosion monitoring devices, artificial intelligence-enabled drilling optimization services. Other areas include; advanced formation evaluation services with the adobel predictive tool (APT), facilities inspection and maintenance services and laser – enabled pipe tally measurements. Recently, Ofserv partnered with the Nigerian Content Development Monitoring Board (NCDMB) and SNEPCO to organize and facilitate a month long offshore skills acquisition training program, as part of the NCDMB human capacity building initiative, where 20 Nigerians were trained and certified in various skills required to keep offshore facilities operating efficiently.



Corruption still constitutes 10% of operating costs

Banks credit squeeze tightens fuel supply Kunle KALEJAYE




anaging Director/C h i e f Executive, Internatio nal Energy Services Limited, I E S L , D r. D i r a n Fa w i b e , arguCorruption still constitutes 10% of operating costs … Only two major projects worth over $20bn Managing Director/Chief Executive, International Energy Services Limited, IESL, Dr. Diran Fawibe, argued high level corruption still constitute about 10 percent of production costs, which is compounded by the dearth of infrastructure, particularly power shortages. According to him, Nigerians do not feel the President is committed to the fight against corruption because in spite of all that are being said, corruption is on the increase. “We see an inverse relation because in spite of the ‘fight’ corruption is still on the increase, which implies that corruption is fighting back. But if we are very proactive about the fight, there will be a reduction, which means that we haven’t yet proffered a solution to fighting corruption

effectively. “Note that the corruption we are talking about here is not the one at the lower levels, but corruption at the highest level among people in government and positions of leadership. This is why the incidence is not reducing.” Fawibe further argued that the insecurity in the system is a big disincentive to foreign direct investment, FDI, saying, “At the just-concluded OTC in Houston Texas, all the foreigners who spoke, cited insecurity as a limiting factor to investment. “The shortage of power is still a very great impediment to development, and Nigeria will not witness much jobs creation due to lack of power. The cost of direct generation of electricity by homes and businesses is very huge. “So if power and corruption can be tackled effectively operating costs will be reduced significantly. Mind you we have identified these problems over and over again, but it is how they are being tackled that will indicate whether we are making progress or not.” Oil and gas sector Specifically, while he agreed that there may be some growth in

Note that the corruption we are talking about here is not the one at the lower levels, but corruption at the highest level among people in government and positions of leadership. This is why the incidence is not reducing some sectors of the economy, but with regard to the oil and gas sector, he said not much had changed basically because of the uncertainties over the nonpassage of the Petroleum Industry Bill, PIB. The big difference he noted in the sector are two major projects worth over $20billion from France’s oil giant’s Egina project constituting about $18billion, and America’s ExxonMobil’s Erha North project. “So this is a pass mark for the government in getting two of the international oil companies, IOCs to start two major oil projects in the country worth over $20 billion. “Also, I know that some others are equally considering some investments, but is the PIB is

passed early enough will put their anxieties to rest.” He noted that while the Total and ExxonMobil’s projects are a huge spend in the industry, there may not be much job creation because the industry is more technology-driven than peopledriven. As such, he added that this is where the Nigerian Content Development Management Board, NCDMB, comes to the rescues in ensuring that more jobs are domiciled incountry from the $20billion, in order for more Nigerians to get some of the industry jobs.high level corruption still constitute about 10 percent of production costs, which is compounded by the dearth of infrastructure, particularly power shortages.

he Federal Government’s recent squeeze on banks credit has tightened supply of Premium Motor Spirit, (PMS) also known as petrol, as fuel importers are not able to raise finance to bring in products. The move became necessary sequel to January 2012 subsidy protests to sanitize the downstream sector of the country’s petroleum industry. As a result, several probe panels were instituted by various arms and agencies of Government to scrutinize the fuel subsidy scheme. Chairman/Managing Director Mobil Oil Nigeria Plc, Mr. Adetunji Oyebanji said several probe panels that were set up, have created some uncertainties and delays in refunding subsidy claims under the Petroleum Support Fund, (PSF) leading to the squeeze on bank credits and sporadic shortages in fuel supply. Oyebanji disclosed this to shareholders at the35 Annual General Meeting and the presentation of the Annual Report and Financial Statement of the company in Lagos last week. He argued that the controlled margins on PMS sales are barely sufficient to cover operating costs, adding that “Until we get appropriate returns and the industry is fully de-regulated, the entire fuels sector will continue to lack the level of investments required to realize the enormous potential inherent in the sector for meeting the country’s energy demands and stimulating economic growth. “A s p r e v i o u s l y s t a t e d , Government undertook a number of reviews into the operations of the PSF in the year conducted by its agencies. MAN co-operated fully with these agencies, providing requested documentation and appearing before the various panels investigating the scheme. This was a time-consuming task and involved the provision of extensive and detailed documentation to support and explain the various transactions. Presenting the company ’s financial records to shareholders, Oyebanji admitted that the company did not perform well as in 2011.



Growing indigenous participation in oil industry


he signing of the Nigerian Content Act on April 22, 2010 by President Goodluck Jonathan marked the beginning of the turnaround in the activities of indigenous contractors in the Nigerian Oil and Gas industry. Indeed, the immediate result of the implementation by the Nigerian Content Development and Monitoring Board (NCDMB) through the effective supervision of the Hon Minister of Petroleum, Mrs Diezani Alison-Madueke is the increase in the number of technology driven workspaces and capacity building by indigenous contractors who formerly found it difficult to compete with foreign contractors before the signing of the Act. As at 2013, the Petroleum Technology Association of Nigeria (PETAN) said its membership had doubled! Members are now specialized in more than 200 areas of professional competence in the Oil and Gas industry. There is no gainsaying the success recorded in the Oil and Gas industry under AlisonMadueke’s administration as manifested in the effects of her policies. According to the Chairman of PETAN, Mr. Emeka Ene, the Nigerian Content Act and policies of the Petroleum ministry have boosted support for indigenous companies by foreign companies and financial institutions. “This is the reason that at this year’s edition of O f f s h o r e Te c h n o l o g y Conference, OTC, we have 60 PETAN members, and due to lack of space we were not able to accommodate all our members who signified interest in taking part in this year’s conference. Right now, we have 50 of our members in attendance. Beyond PETAN members, we have at least another 50 exhibitors. So, in all, there are over 100 Nigerian companies exhibiting in this year’s OTC.” Policy initiatives In the upstream sub-sector, Shell Petroleum Development Company (SPDC) recently sold its interests in four oil blocks to

indigenous companies including SEPLAT, Neconde Consortium led by Nestoil Plc, Shoreline Natural Resources, and 45 per cent interest in OML 40 to Eland Oil & Gas Ltd and Starcrest Nigeria Energy Ltd. Another beneficiary of the divestment by upstream foreign players is Atlantic Energy Concept Limited which acquired (OMLs) 26, 30, 34 and 42. Similarly, the opportunities presented to indigenous companies to become owners of upstream assets, in turn, resulted in the engagement of indigenous contractors. A case in question is the engagement of Century Energy Services by Amni Petroleum Development Company Limited, Nigeria Pe t r o l e u m D e v e l o p m e n t Company and Afren Plc. Also today, International Energy Services (IESL) is currently engaged in the designing of facilities for the deepwater projects of Chevron and Total Upstream Companies. The logistic base of LADOL is now busy with projects from Shell, Chevron and other

unskilled staff has helped to reduce the rate unemployment and restiveness in the Niger Delta.

Equally, indigenous companies are now taking control of lucrative pipeline construction projects. The Managing Director of OilServ, Mr Emeka Okwuosa, argued that the competition is now between indigenous companies and their foreign counterparts multinational oil companies. E q u a l l y, i n d i g e n o u s companies are now taking control of lucrative pipeline construction projects. The Managing Director of OilServ, Mr Emeka Okwuosa, argued that the competition is now between indigenous companies and their foreign counterparts. For instance, he said the EastWest Gas Pipeline project awarded to his company over other foreign contenders was made possible because of the

steady investment in capacity building, and insistence of the Pe t r o l e u m M i n i s t e r t h a t indigenous companies must be accorded due recognition in line with the Nigerian Content Act. He said the Engineering Procurement and Construction project according commenced from the last quarter of 2012 and would be completed by early 2015. M o r e i m p o r t a n t l y, t h e engagement of several Nigerians as skilled and

Impact on Niger Delta communities According to Joseph Evah, the National Coordinator of Ijaw Monitoring Group, Mrs. AlisonMadueke’s exposures while working for Shell as well as other i n t e r n a t i o n a l ex p e r i e n c e s thereafter, prepared her for the job of the minister, even at the expence of pitching her against her former employers. He noted that although Niger Deltans were initially afraid when she was appointed as the Petroleum Minister, but her performance in terms of making jobs available for the youths of the Niger Delta through the engagement of indigenous contractors made them have a change of heart. Financial institutions The need to ensure that indigenous contractors had access to funds to execute its projects made Shell to enter into an understanding with a select group of Nigerian banks in 2012. Under the terms, Shell will act as guarantor for its indigenous contractors without having to go offshore to access funds.

Furthermore, the Central Bank of Nigeria, CBN, in a recent statement indicated that increased activities by indigenous companies contributed to the appreciation of the Naira against the Dollar and other currencies. To underscore the importance of funding, the Executive Director (Risks) Mr Kehinde Lawson, said that First Bank has participated actively in excess of $3billion in both upstream and downstream transactions in the petroleum industry. The general impact of financial institution’s involvement is largely seen to be responsible for 11 Nigerian banks being listed among the top 200 banks in Africa. The list was published in The Banker, a publication of the Financial Times of London. According to the Banker, African banks have grown rapidly in the past few years. Based on 2010 results, 19 of them have Tier 1 capital of more than $1 billion, a level that roughly marks the cut-off point for the world’s biggest 500 banks. Nigerian banks on the list included Zenith, First Bank, Guaranty Trust, Access, UBA a n d F i d e l i t y, F i r s t C i t y Monument, Diamond, Skye, Stanbic IBTC, and Eco Bank.

Fee dback

PIB: Panacea to efficient

petroleum industry By Olaiwola Alao


any Nigerians snorted when the oil subsidy was removed on the New Year day last year. With hindsight, many more will say, in retrospect, that the nationwide protests which greeted the removal of subsidy on petrol were a blessing in disguise. Put more directly, the protests served as a sort of public opinion tool which triggered the muchneeded reforms going on in the p e t r o l e u m i n d u s t r y. T h e January 2012 protests therefore


t is becoming the fad for Nigerian companies to go funds shopping in offshore exchanges; Lekoil recently jumped the band wagon. Chief Executive Officer, Mr. Lekan Akinyemi explains: Tell us more about Lekoil Lekoil was founded in December 2010 and is an Africafocused company with assets in Nigeria and Namibia with a strong technical and commercial team. We recently listed on the AIM exchange in London. What is the market focus of Lekoil? It is a Pan-African company with a balanced portfolio of producing and exploration assets. Near-term focus is in subSaharan Africa. What difference does Lekoil bring to the table? Access to capital markets, strong technical team, disciplined approach to building an asset portfolio and strong local partnerships. Why Africa? H i s t o r i c a l l y, c a p i t a l expenditure relative to resource

became an important factor in President Goodluck Jonathan’s government’s understanding of what the people wanted and where his government needed to focus its attention regarding the energy sector. While the most strongly-held opinion may not necessarily be the most accurate, it was realized, for instance, that Nigerians were not absolutely against the removal of subsidy on petrol, but needed to be better oriented on the advantages of the policy. After the Farouk Lawan-led ad-hoc committee set up by the

availability has shown that Africa is under explored. In the context of Africa, Nigeria is also under explored – we haven’t really had to do much in terms of enhanced oil recovery in Nigeria and there are some areas where we think that if you bring new technology to bear, there’s a lot that can be done. You get such a fantastic return from what is already in place that sometimes people don’t push too hard on the exploration side. But there’s a lot of room for exploration in Nigeria and many parts of Africa. What is your perspective on Nigerian oil & gas industry reform? We l i k e t h e i d e a t h a t indigenous companies should be allowed to grow, to flourish and to attract capital. Over the decades the majors and large service companies have done a fantastic job in terms of knowledge transfer to Nigerians. However, reforms like this are significant and should be given time, we have to keep going at it to get it done.

Feedback House of Representatives to probe the subsidy regime lost its c r e d i b i l i t y, t h e f e d e r a l government set up committees and task forces to investigate, ascertain and recommend the way forward in various subsectors of the petroleum industry. The Aig-Imoukhuede’s Technical Committee, chaired by the MD/CEO of Access Bank, Aigboje Aig-Imoukhuede, was set up by the minister of finance, Dr Ngozi Okonjo-Iweala in May 2012 to scrutinise the fuel subsidy payments handed oil marketers during the 2011 fiscal year. In its report submitted to President Jonathan, the committee uncovered illegitimate transactions involving 50 oil marketing companies. Out of 857 transactions valued at 1,112,836,823,380.43 examined by the committee, 661 (valued at N880,644,248,166.23) were classified as legitimate, while 196 transactions worth N232,192,575,214.20 (involving the 50 companies) were illegitimate. The committee recommended further investigation and prosecution by law enforcement agencies. Other committees/taskforces set up to look into issues in the petroleum sector include: the

Many African countries are discovering their hydrocarbon assets. What does it mean for Lekoil in terms of investment options? Good question. We have a couple of assets in Namibia. They are in a different phase of the assets life cycle; in terms of differentiation, a lot of the assets in Nigeria fall into either producing or near production assets, except for the ones in the Dahomey Basin. In the rest of Africa, there is a tendency to take more risks on the geological and technological side, but sometimes, a little bit less risk, in terms of just the working environment. In other words there are opportunities to balance risk in our portfolio of assets. How do you think Nigeria can improve indigenous participation in the industry? Improvements can be made with better access to capital, by improving structures and transparency. What is Lekoil’s growth aspiration in the coming years?

S p e c i a l Ta s k F o r c e o n Governance and Controls, set up by the minister of petroleum resources and headed by Dotun Sulaiman, to clean up the NNPC and its subsidiaries; the Petroleum Revenue Special Task Force, a 16-man team also set up by Mrs Diezani AlisonMadueke and led by Mallam Nuhu Ribadu to determine and verify all upstream and downstream petroleum revenue taxes and royalties due and payable to the federal government; the National Refineries’ Special Task Force, headed by Dr Kalu Idika Kalu to ensure self-sufficiency of petroleum products in Nigeria. Two other bodies directly concern the biggest issue in the petroleum sector today: the Petroleum Information Bill (PIB). They are: the Osten Olorunsola Committee and the Udo Udoma Task Force. After it was discovered that two separate bills were sent to the National Assembly, there was the need to re-draft a standard document to prevent the fate suffered by the bill in the past. Hence, the setting up of the committee headed by Mr Osten Olorunsola, director of the Department of Petroleum Resources (DPR). To ensure a speedy passage of the bill this time around, the executive arm

12 of government realised that a better synergy with the legislative arm was necessary, thereby leading to the creation of the Udo Udoma Task Force to act as a liaison between the two arms. It is common knowledge that previous administrations have avoided the legislation of a single document which would effectively regulate the structural and financial management of the petroleum industry. Even when, towards the end of the 6th Assembly, the president promised to accent the bill if sent to him by the legislature, those of us who understand the potency of the PIB to revolutionalise the oil and gas industry were surprised that one way or the other the bill did not make it out of the National Assembly. Considering the push by the Jonathan administration for the prompt passage of the PIB, and despite the clout pulled by those hell-bent on preventing its passage and the ethnic coloration given it to elicit unfavourable public opinion, it is clear that it holds the key to the success of any meaningful reform in the industry. It could as well define this administration as that which sought and delivered a permanent answer to the perennial crisis in the industry.

‘Indigenous participation key to petroleum development’ Lekoil intends to use its access to capital and strong local partnerships to build a multi-asset exploration, development and production business in Africa. Does Lekoil have the capacity of to take over assets being d i s p o s e d b y s o m e multinationals in Nigeria like Shell, Petrobras? From a disciplined portfolio

perspective, we are well positioned to acquire divestment assets because of our access to the capital markets. We do intend to participate in divestments where we believe we are able to unlock value through a combination of smart financing, technical expertise and partnerships.


Focus that as the PIB is being passed and investments are coming, we will then have jobs arising from the investments. Where we are today, if Petroleum Technology Association of Nigeria, PETAN companies, if service companies, our multi-national companies do not establish yards where they do things in Nigeria, when the investments from the International Oil Companies, IOCs come, if they are investing $50 billion and $45 billion goes back to their countries, we have only touched the surface of the water. We need to go deep and that is the responsibility of the Nigerian Content Development and Monitoring Board, NCDMB, working with the industry to create these facilities, to expand these shortfalls. That is why the Honourable Minister for Petroleum Resources is pushing that we launch the industrial parks project, what we call the Nigerian oil and gas industrial parks scheme, NOGIPS. This will create the opportunity where we use the Nigerian Content Fund to create some satellites close to the oil fields and get local entrepreneurs to bring the OEMs, the big manufacturers such as GE, which we all saw t o d a y. I f t e l l t h e b i g

A welder

Our target is to ensure more jobs domiciliation —NCDMB A

t the recently c o n l u d e d , O f f s h o r e Te c h n o l o g y Conference, OTC, in Houston Texas, USA, the Executive Secretary, Nigerian Content Management Board, NCDMB, Mr. Ernest Nwapa, spoke on three years enactment of the Nigerian Content Act and other industry-related issues, as captured by Clara Nwachukwu and Sebastine Obasi. Excerpts: A lot have been said about the PIB, what is your opinion of the bill in relation to the Content Act? I have the firm belief that the

PIB will make investments flow. It is a very good assumption. We believe that once the PIB is passed, there would be a lot investment inflow. That is conventional wisdom. As I said in my short remarks (during the panel discussion), if the PIB is passed and investments flow and those investments produce revenues for Nigeria that is expected. But what we have been looking for is the kind of impact that can give us employment on top of the revenue. That type of impact will not come from investments that do not result in domiciliation. It is a good thing that we have

So, it is one thing to get investments in, because we need to sustain our revenue from oil production. But the real end game for us is when as we are getting the revenue, we are getting our people working

had a three-year head start from local content. The three–year start that we have had from local content has enabled us to create some capacity in Nigeria such

manufacturers to come and manufacture in Nigeria, they ask you how do we get power? How do we get land? How do we deal with community issues? We want


to take away all those problems from them by setting up industrial parks. In those parks we will have electricity, we will have infrastructure. They come in. the communities are friendly with us. They know we mean well. We have experimented in Kpolaku, Bayelsa State. We have moved in there. We have bought land, which we have cleared. We are welcome by the community. We are going to expand that. By the time we finish it, it will be a mini estate. The responsibility of the manufacturers will be to come there and select the local partners that would manufacture their local components. They will just plug and play. That is the facility we are trying to introduce now. That is the area we want to go because this whole issue of bringing in investments. So, it is one thing to get investments in, because we need to sustain our revenue from oil production. But the real end game for us is when as we are getting the revenue, we are getting our people working. Our people cannot work in NNPC, Shell and Chevron. You know what it takes to employ. You can only employ about 150 people. If you have 10 or 20 government agencies, they cannot employ more than 50,000 people. The projects that would employ multi tiers is when we start having these people that are working ever y day, manufacturing components, manufacturing consumables. That is the focus and that is the strong linkage between the Nigerian content law and the PIB. How then would you describe t h re e y e a r s o f N i g e r i a n Content? Can you say it has been successful, and what have been the challenges?Your guess is as good as mine. I do not believe in talking about my own performance as a Board, but the feedback we get like all the oil companies, the service companies advertised for the three-year anniversary. I said to my Board that we should not over celebrate it this year. Let other people give their own testimonies. The testimonies are clear. If you look at expatriate utilisation, we are controlling it. We are telling them to go and find Nigerians to partner with. That is very fundamental. The contracts that are being awarded, you will see that mostly all the contracts have Nigerian participation if not completely, but up to 80 – 90 percent Nigerian participation.



egulation has been identified as key to futur e industry growth and development, the Director, Department of Petroleum Resources, DPR, Mr. Osten Olorunsola in this interview with Clara Nwachukwu and Sebastine Obasi, in Houston Texas, USA, speaks on the role of the regulator under a new PIB. Excerpts: A lot of opportunities have been identified even in spite of the criticisms against some of the fiscal provisions in the Petroleum Industry Bill, PIB. In the light of all the views that have been expressed, how do you think these opportunities and prospects can be realised? My view is that you cannot take away the importance of dialogue. The more we discuss and the more we share, the more the chances that we will get to a common ground at some point. In my view, I am quite happy with what has happened this morning. It shows there is still a lot of an interest. Two, the mere fact that people are speaking their minds is even the more important thing. If people keep quiet over their views, it does not help. It is nice that people came up with their views. And the key areas of gaps are narrowing down. If I take the words of the honourable gentleman, Honourable Osagie (House of Representatives, Deputy Chair on PIB), we will soon see the end of the PIB. In view of the divergence of views, do you really think we will have a convergence such that the National Assembly will come up with a bill that protects the national interest even as it ensures returns on investments? The bill has several hundreds of pages. The areas of divergence you are talking of are less than 10 pages. People have been repeatedly talking about these 10 pages, and completely undermining the 200 pages that are the areas of convergence. We should focus more around where we have actually agreed. People can choose to look at a cup as half empty. I personally like to look at a cup as half full. Let us give attention to the 200 pages that we have convergence, and then address these little areas that are remaining. In my view, there are three or four things people are still


‘There's more convergence than divergence in PIB’

here today was that rather than reducing or streamlining regulations, we are having multiple regulations instead? It is true. It is an area that still has to be looked at, not from the point of what can be resolved in Nigeria alone, but actually looking at the benchmarks across the whole world. Apart from fiscals, one thing international investors look at is the robustness, simplicity and transparency of your regulation. The National Assembly is aware of that. I think they will look at it very well. However, in looking at it, we also have to take our local environment into consideration. The mere fact that there is only one

In that case, are you not worried that with these streams of regulations, that the DPR and some of its functions are being whittled down? It is not just the DPR; even the PIB itself has addressed it to some extent. Even some of the extant regulators that have been around, they have been somehow addressed in the PIB. However, we have to wait until it becomes an Act. If it does not become an Act, all of them will still continue to parade themselves as regulators. We have made our views known very well. In any case, we were part of the team that put the bill together as an executive arm. We have to wait and see the wisdom of the outcome from the National Assembly. Coming down to specifics, we have been going on and on about new acreage allocation especially for the marginal fields operations. Is it fair to say that it is not materialising? If it is, what are those areas that you see as threats? It is not proper to say that it is not materialising. We are working through it. It does take time to press go. Those are the things we are basically looking at. One of the major challenges is the fact that most of the fields that probably will come out as the next round, they are in assets that we are still trying to renew for the licence holders. If you don’t renew the licences, there is no point going ahead with fields people don’t even have titles

Mr. Osten Olorunsola

talking about. If they don’t talk about fiscal gaps, they talk about host communities, or institutional authorities. But there are several other parts of the PIB that we can actually run with today. We should not stop talking about these little areas that are remaining. In any case, after going through these for 12 years, if it is only three or four areas that are remaining, we can try and resolve them. My personal view is that we should not spend another 12 years trying to fix these three or four items. Where we are today, we are ready to go. I think half PIB is better than none . One of the worries raised

regulations, it is a recipe for disaster. I think the National will look at that angle.

The bill has several hundreds of pages. The areas of divergence you are talking of are less than 10 pages. People have been repeatedly talking about these 10 pages, and completely undermining the 200 pages that are the areas of convergence regulator does not mean that we cannot have another two or three. The only thing is that it has to work, and it does not have to become a bureaucracy to the industry. That is really the point. Any institution you have too many

to. Some of those fields are within leases that are going through renewal right now. You need to renew the leases first before you give out the fields within the leases to other people as marginal CONTINUES ON PAGE 15



‘There's more convergence than divergence in PIB’ CONTINUED FROM PAGE 14

fields. That’s what we are doing basically. The leases have expired. It is like building a house without putting a foundation. You do the foundation first before you start raising the walls. Would it be correct then to say that some of these lease holders are hanging on to them deliberately? It is not their baby, it is our baby and it is left for government to renew. They have applied for renewal, and government is going through the process of renewing them. Looking at marginal fields operations, we have been told that they contributed only 12 percent of total production. And here we are, trying to give them more acreages as they have demanded. Yet there are still so many of them that are not into production yet. Is it then wise to give more to people who are not utilising these assets? Let us correct it first and foremost. The 12 percent you heard is not from marginal fields. It is from all indigenous producers including Nigerian Petroleum Development C o m p a n y, N P D C . T h e marginal fields are far below that. The marginal fields are doing only 50,000 barrels per day out of 2.5 million barrels. Their cry for more is legitimate. It is their right to do so. After 50 years of production in Nigeria, we cannot be going about to say that the indigenous production accounts for only 12 percent. It should be far more than that. Even the gover nment policy of encouraging indigenous participation is in that direction. They should all be supported. If you look at the marginal fields specifically, nine out of 24 are already producing today. Another four or five will soon be producing. They are doing pretty well. Don’t forget that the first four or five

years, they all had issues because it was a new law that came up. So, you don’t expect them to start from day one. They had all sorts of issues like funding. Most of the banks in Nigeria did not know how to fund long term projects like oil and gas. It is not an ATM where you put in your card and get money immediately. They needed time to understand the industry before putting in their money to support any

investment in that direction. The second was that they also needed to build capacity. They needed to get the right people to help them to move those huge capitals in the right direction. The third thing was that quite a few of them had some litigation among themselves as regards partnership issues. Some of them went to court. Now they are all coming out of court gradually, we will see a lot of

actions going forward. In all of these, do you think they are adequately able to overcome these challenges you mentioned? That is the point I am making; they are already in that direction. If you go to some of the marginal fields in Nigeria, you will be shocked by what you see. What some of them have put on ground will rival any international company in the world. I have

been there myself. I am not talking of pictures. You said about four or five marginal fields will come on stream very soon. Could you please tell us their names? I cannot give their names now. I know that Sogenal is one of the marginal fields companies; they are almost coming on stream very soon. Frontier has just come on stream, they are producing. There are three others.

OPEC’s high output, high price days dwindle CONTINUED FROM PAGE 1

offering higher price support to rival producers - or protect market share by keeping the taps open and allowing prices to fall. The Organization of the Pe t r o l e u m E x p o r t i n g Countries’ Friday meeting was content to simply agree, as expected, to retain the group’s 30 million barrels per day (bpd) output target through the rest of the year. It will meet again on December 4. Ministers also agreed to set up a committee to investigate the impact of shale. Oil is just above the $100 level favored by the group that pumps a third of the world’s oil. OPEC’s leading producer Saudi Arabia says the world oil market is in “good shape”. For now, maybe. But OPEC has little room to pump more due to the U.S. oil boom that has shifted the existing competition for marketshare once and for all to Asia and intensified a rivalry between OPEC’s top two producers Saudi Arabia and Iraq there. Core Gulf producers think OPEC will still be able to pump at least 30 million bpd, provided U.S. shale grows at a moderate pace. While that does not leave much room for growth, it implies that OPEC will not need to scale back significantly. “This is not the first time

new sources of oil are discovered, don’t forget history,” said the influential Saudi Oil Minister Ali al-Naimi. “There was oil from the North Sea and Brazil, so why is there so much talk about shale oil now?” There has not been such a surge in flows from outside OPEC in decades and that has rung the alarm with some members - particularly Nigeria and Algeria - that feel squeezed. “The rapid ramp up in U.S. shale bears a striking resemblance to the situation in the early 1980s when North Sea oil production from the UK and Norway was rising very quickly,” said Neil Atkinson, director of energy research at Datamonitor. “This presented OPEC with an enormous challenge because at the time demand growth was very weak. Nobody’s saying that will happen again, but all the ingredients in that brew are starting to come into place.” Oil above $100 has freed vast quantities of U.S. shale oil in North Dakota and Texas that helped boost U.S. output by 850,000 bpd by the end of 2012. That is more than each of OPEC’s two smallest producers, Qatar and Ecuador pump in total. Light, low sulfur shale poses no threat to OPEC’s Gulf members that sell heavier crude - but is a headache for Nigeria and Algeria, which produce oil of similar quality. The surge may even push the United States closer to the Saudi

mindset, thinking more like a producer than a consumer keen to keep oil cheap. Last year’s surge in U.S. output came with a hefty price tag as the rush to produce drove the cost of pumping marginal crude to $114 a barrel, according to a Bernstein Research report. While Riyadh welcomes the rise of U.S. shale, the Saudi oil minister himself has said the kingdom would be lucky to go beyond current production rates of about 9 million bpd by 2020 due to new global supplies.


ut during that period, Iraq’s production will have doubled from current rates of around 3 million bpd, if all goes to plan - a concern for Riyadh. At some stage, Saudi Arabia may decide to open the taps to shut in the marginal barrel and make Iraq feel some pain, said analysts. The kingdom has done this before - early last decade it let the price fall to punish nonOPEC producers. There are no signs of that now. Oil at $70-$80 could start to impact the economics of some shale oil plays. Iraq’s breakeven budget price is well above $100 a barrel. With no pressure on its budget, analysts say Saudi Arabia could easily pump 8 million bpd at $80 without breaking sweat. After pumping 10 million bpd with oil at $110 last year and 9 million bpd with oil at $110 this year, it has built up formidable financial

reserves. Analysts’ estimates for Saudi Arabia’s break-even oil price this year vary from around $65 a barrel to $85, depending on projections for its spending. “For Saudi Arabia, there’s plenty of room on the downside in terms of price and quantity before they start to panic,” said Yasser Elguindi of Medley Global Advisors. “North Dakota will cut before anyone in OPEC if oil falls to $70.”

Others in OPEC - including Iran, whose revenue has been sunk by Western sanctions directed against its nuclear program, Iraq and Algeria - need oil well into triple digits to balance budgets. This may lead them to call on Saudi Arabia to cut supply in order to support prices. But Riyadh may be thinking counterintuitively. “Saudi Arabia’s challenge will be to convince Nigeria and Algeria that higher prices will encourage the economics (of U.S. shale) that are their undoing,” said Elguindi. The group will choose its next secretary general when it meets again in December, said the Saudi oil minister. The issue has stalled on competing candidates from Iran, Iraq and Saudi Arabia. Friday’s meeting continued to adjust the criteria for prospective candidates to come forward.





Recently, the Chief Executive Officer of Chinak Group, Mr C h r i s I g w e s p o ke a b o u t expansion plans by a subsidiary of the Group, Mainland Oil and other industry issues as captured by Clara Nwachukwu. Excerpts:


e hear you want to expand y o u r operations, how much specifically do you want to invest in the expansion of your downstream operations? In the first phase we are going to spend about N2 billion. How do you intend to source for the funds? We source our funds locally and it is quite challenging. And this is the area I appeal to the media to drum hard on. The Central bank Governor should come to our aid because our interest rate in Nigeria is about the highest in the world. In US here interest rate is about four percent. How do we compete with foreign companies that get funding at four percent interest rate while we in Nigeria get funds at over 20 percent? That is a major challenge. So, I want to use this opportunity to appeal to the Central Bank Governor to set up a special intervention fund for the downstream oil and gas industry. This has become important to bail out some operators that have made the mistake of taking short term loans for long term investments. That is why some of them are not finding their feet. But in Mainland we have a good structure peopled by professionals. But then funding at current interest rate has remained a major challenge. Apart from finance what other challenges weigh against your business? Finance is the key. The second one is infrastructure. Government has to develop infrastructure to enable businesses in the country. For us in the logistics business it is difficult to move equipment when there is no infrastructure. We do a lot of work to maintain the logistics business because of poor infrastructure. So government should come up with more infrastructures to aid our operations. Why can’t we have effective rail transportation system to move

Mr Chris Igwe

Mainland Oil plans N2bn investments in operation expansion In the short term our group has the ambition to grow the business so rapidly as to create new opportunities for employment products? In Europe the fuel haulage system depends on the rail transportation system. Why can’t we have such things in Nigeria? These are the things that would promote the provisions in the PIB. It is not enough to pass a law; but do you have what it takes to effectively implement the law? So infrastructure is very important.

And then there is the issue of finance. Finance is the key! Given your growth projections in the short term, may we have an idea of your budget profile? Well, in the short term our group has the ambition to grow the business so rapidly as to create new opportunities for employment. In fact whenever I see Dangote employing Nigerians in their thousands, I nurse this strong feeling that our group should tie the same line; even if we do not employ the same number, we want to at least do half of that. We are concerned as a group to take out more Nigerians from the labour market. So in the next two years, we want to employ 10,000 Nigerians. So when we do that we would feel confident that we are smarting up. So that is our starting point. When we create high volume

employment, then we know that we have started. Mainland Oil and Gas has become a popular brand in the downstream sector of the domestic petroleum industry. May we have an idea of the enablers that drive your growth? Mainland is a subsidiary of the Chrisnak Group of companies of which I am the Group Managing Director. We effectively started in 2008, and we were touched by what Nigerians go through especially in the rural areas before they get petroleum products, So we stared with our first fuel service station at Umuoji Road in Onitsha Anambra State. Today we have over 14 stations carefully and consciously located in the rural areas because of our belief in and passion for the welfare of the rural dwellers. However we have some of our stations in urban areas. So, we are driven by our passion to make fuel

available to the ordinary Nigerians. That is the vision behind Mainland Oil, a vision that drives our business strategies. So, we started from there and the rest is history. Given the challenges in pushing products to the rural areas, how have you been able to break even in marketing products in such remote locations? In our group, we have a strong logistics arm. And because we are also in logistics business it has been easy for us to optimize internal synergy in bulk transshipment of products. We have a robust fleet of haulage trucks which we readily deploy in products bridging. We also have our tank farm which happens to be one of the biggest storage facilities in Calabar, Cross River State. With our wheeling and storage capacity we are licensed by the Department of Petroleum Resources to get products allocation from Nigerian National Pe t r o l e u m C o r p o r a t i o n (NNPC) for direct distribution in the market. We also import directly to meet demand on our facilities in addition to holding strategic reserves to ensure that that all our storage facilities are wet with products to continuously and promptly respond to fuel demand from individuals and businesses. Given the level of your participation in the domestic fuel market, what is your view of the fuel subsidy controversy that rocked the market in recent times? The subsidy probe is a step in the right direction but there appears to be little will to drive the implementation o f t h e p r o b e recommendations. The spirit with the probe was pursued appears to be going down. From where we are sitting, it is obvious that Nigerians want to see the outcome of the probes so that it would serve as deterrent to those who come to the market to reap from where they did not sow. People should know that there is law in the land and all operators in the business must operate within the ambits of the laws that govern the state.




Drilling Types and Techniques Jim-Rex Lawson MOSES

offshore drilling platforms, the movable drilling rig and the permanent drilling rig. The former is typically used for exploration purposes, while the latter is used for the extraction and production of oil and/or gas. A variety of movable rigs are used for offshore drilling. Drilling barges are used in shallow (<20 ft [<6 m] water depth), quiet waters such as lakes, wetlands, and large rivers. As implied by the name, drilling barges consist of a floating barge that must be towed from location to location, with the working platform floating on the water surface. In very shallow waters, these may be sunk to rest on the bottom. They are not suitable for locations with strong currents or winds and strong wave action. Like barges, jack-up rigs are also towed, but once on location three or four legs are extended to the lake bottom while the working platform is raised above the water surface; thus, they are much less affected by wind and water current than drilling barges. Submersible rigs are also employed in shallow waters and, like jack-up rigs, are in contact with the lake bottom. These rigs include platforms with two hulls positioned above one another, with the lower hull acting like a submarine. When being towed to a new location, the lower hull is filled with air and serves to float the entire platform. Once on location, the lower hull is filled with water, and the rig sinks until the legs make contact with the lake bottom. As with the previous movable rigs, use of this type is limited to shallow water areas.

Offshore Drilling


m a j o r difference b e t w e e n onshore and o f f s h o r e drilling is the type of the drilling platform. Also, in offshore drilling the drill pipe must pass through the water column before entering the seafloor or lake. These type (offshore) of wells have been drilled in waters as deep as 10,000 ft (305 m). Below is an over view of drilling in offshore environments.

Drilling Template Offshore oil drilling is an oil extraction technique which allows oil companies to access deposits of oil buried under the ocean floor. Most typically, offshore oil drilling sites are situated over the continental shelf, although advancements in drilling technology have made platforms even further out to sea economically and physically feasible. Offshore drilling requires the constr uction of an artificial drilling platform, the form of which depends on the characteristics of the well to be drilled. This drilling also involves the use of a drilling template that helps to connect the underwater drilling site to the drilling platform located at the water â&#x20AC;&#x2122;s surface. This template typically consists of an open steel box with multiple holes, depending on the number of wells to be drilled. The template is installed in the floor of the water body by first excavating a shallow hole and then cementing the template into the hole. The template provides a stable guide for accurate drilling while allowing for movement in the overhead platform due to wave and wind action.

Drilling Platforms There are two types of basic

[PART 2]

Offshore Drilling Platforms

A Floating Production System Source: Minerals Management Service

The most common movable offshore drilling rig is the semi-submersible rig. It functions in a similar manner to the submersible rig, with a lower hull that can be filled or emptied of water. However, this type of rig does not contact the lake floor but floats partially submerged and is held in place through a number of anchors. This type of rig provides a stable and safe working platform in deeper and more turbulent offshore environments, and when high reservoir pressures are expected. The final type of movable drilling rig is the drillship. These are ships designed to carry drilling platforms great distances offshore and in very deep waters. A drilling platform and derrick are located in the middle of a large, open area of the ship, and the drill is extended through the ship to the drilling template. When exploratory drilling locates commercially viable oil or gas deposits, a more permanent drilling platform is required to support well completion and oil and/or gas extraction. A variety of such production platforms are used for offshore drilling. Fixed platforms are typically used in areas with water depths less than 1,500 ft (457 m).These platforms contact the bottom using concrete or steel legs and are either directly attached to, or simply rest on, the bottom. A variety of other production platforms are available for deeper water conditions.



PHCN: Investors await takeover amid epileptic supply

Power plant



uccessful bidders in the o n g o i n g privatisation in the power s e c t o r h a v e ex p r e s s e d eagerness to take over operations from the Power Holding Company of Nigeria, PHCN Distribution Companies (DISCOs) after the successful payment of 25 per cent of their investment. However, the Federal Government through Bureau of Public Enterprises, (BPE) and the Secretariat of National Council on Privatisation, (NCP), stated that successful bidders for the DISCOs will commence

full operations only after 75 per cent down payment for their investments have been completed. NCP in a statement stated that core investors are only allowed to take over the companies they have purchased on completion of 100 percent payment of their bid consideration and PHCN successor companies will not be different. The council reiterated that successor companies would be formally handed over to the bidders after full payment in a ceremony that will herald the takeover of the power sector by the private sector. NCP also plan to allow purchasers access to the companies in order to p r e p a r e f o r t h e

implementation of their business plans laid out in their proposals submitted to the Bureau of Public Enterprises; H o w e v e r , o u r correspondent reliably gathered that preferred bidders of some DISCOs are eager to proffer solutions to the erratic power supply in the country. The winner of one of the DISCOs in Lagos told our correspondent in confidence that in the next three to four months, investors will commence complete take over. “We have invested 25 per cent and as businessmen, we need to have a return on investment. We cannot allow our money to be tied down. “In the next three to four

months, we would have taken over, but labour issues must be settled before we can come in. Don’t forget that there is difference between hand over and taken over,” the source said. Our correspondent also gathered that investors plan to target corporate business companies, large firms and industrial companies to recoup their investments in the next six months to one year on assumption of operations before shifting attention to residential areas. Aside from return on investment, one of the major drives by investors to commence operations in the power sector according to findings is to put an end to d erratic power supply in the c o u n t r y. Electricity

consumers in recent time have complained about poor power supply in the country. It would be recalled that the Transmission Company of Nigeria, TCN, had earlier revealed that, power generation has improved significantly to over 4,000 megawatts. Meanwhile consumers across the country have complained about the constant darkness that their homes and industries have been plunged into since February, about the time President Goodluck Jonathan, in an interview with Christiane Amanpour, said Nigeria’s power supply had tremendously improved. The Chairman, House of Representatives Committee on Power, Patrick Ikhariale, also alleged that apart from Egbin Power Plc, all the power generating companies in the country were functioning at less than 40 per cent capacity. But a minor relief might have come with the TCN announcement of an increase of about 1,160 megawatts. The Assistant General Manager of the TCN, Mr. Dave Ifabiyi, said that power generation would reach its peak in Nigeria when all the National Integrated Power Projects (NIPPs) were fully integrated into the national grid. He attributed the recent increase in the generation capacity to the privatisation of the sector by the Federal Government, and appealed to energy consumers to continue to partner with TCN in protecting electricity installations and forestalling vandalism. He said that vandalism constituted a major setback to efforts to improve power supply. Nigeria currently needs over 10,000 megawatts of electricity to guarantee stable electricity supply in the country.



BP supervisors challenge manslaughter charges


Solar panels

Minister promises 10,000MW from Solar Noel ONOJA


he Minister of Po w e r, P r o f Chinedu Nebo has announced the planned streaming of additional 1,000 Mega watts, MW of solar power yearly to boost energy needs in the country over the next 10 years, to be boosted by the coming on board of a Korean firm set to inject funds into the process. Speaking in Abuja at the signing ceremony of a M e m o r a n d u m o f Understanding (MoU) with the HQMC, Korea Company Limited, a Korean firm that is ready to inject $30 billion for

the next 10 years, the Minister said that this addition, no doubt is a laudable effort, describing it as truly visionary, which is in line with the President Goodluck Jonathan led Transformation Agenda. He said that the addition of 1,000MW of solar power yearly for the next ten years will give the nation the required energy mix needed f o r s u s t a i n a b l e development, adding that this scenario will also enable spread of power across the country. He added that Nigerians even in the rural areas would benefit immensely from the proposed project. Korea, according to the

Minister is a top ranking technologically advanced economy; noting that undertaking projects of this magnitude will provide Nigerians with job opportunities and skill acquisition that will positively impact on our youths. So, Nigeria as an emerging economy is set to provide the best market for direct foreign investment, especially in the power sector he said. Pr o f. N e b o ex p r e s s e d optimism that his Ministry will continue to create more avenues for foreign investment and participation, so as to ensure the desired turn- around in the fortunes of the power sector.

Earlier, the Permanent Secretary, in the ministry, Dr Godknows Igali, said that the agreement signing was part of efforts geared towards the realization of the sector ’s desire for more foreign investment. Also, speaking at the event, the Managing Director of HQMC Korea, Mr. Moon Sang Kim harped on the determination of the company to make a success of the project.

wo BP rig supervisors charged in the deaths of 11 workers in the Deepwater Horizon disaster claim the manslaughter counts in their indictment must be dismissed because they don’t apply to conduct on a foreign-owned vessel operating outside U.S. Territory. Court filings Thursday by Robert Kaluza and Donald Vidrine’s attorneys also argue that 11 of the 22 manslaughter counts don’t extend to their clients because they weren’t responsible for marine operations, maintenance or navigation of the rig that exploded in the Gulf of Mexico in April 2010. U.S. District Judge Stanwood Duval Jr. is tentatively scheduled to hear arguments on the motions to dismiss on Aug. 7. Justice Department spokesman Peter Carr declined to comment but said prosecutors would respond in court at the appropriate time. Kaluza and Vidrine pleaded not guilty last year to the charges in their 23-count indictment, which accuses them of botching a key safety test and disregarding abnormally high pressure readings that were glaring signs of trouble before the blowout of BP’s Macondo well. They also face one count of violating the Clean Water Act. Thursday ’s court filings don’t seek the dismissal of that charge. The Deepwater Horizon, a rig that BP leased from Transocean Ltd., was about 48 miles from the Louisiana coast and operating under the flag of the Marshall Islands at the time of the deadly blast. Kaluza and Vidrine’s attorneys argue that 11 counts of involuntary manslaughter should be dismissed because the charges only apply to U.S.- owned vessels, whereas their clients were on a rig owned by a Swissbased company.

Insurance Shun independent approach to petroleum risks, insurers told

Expert urges NAICOM to liberalise microinsurance


Rosemary ONUOHA


n s u r a n c e practitioners have been advised to shun independent approach to doing things and align more effectively to the fundamentals of insurance practice globally which is pooling and sharing of risks. Mr. Wole Adetimehin, President of the Chartered Insurance Institute of Nigeria, CIIN, said the move is necessary for insurers to tackle the challenge of human capacity and maximise opportunities provided by the local content policy. Adetimehin said that the concept of pool formation and working together are the only way operators can grow their c a p a c i t y, a d d i n g t h a t available facts show that operators have not begun to scratch the surface of opportunities provided by the local content policy. He said, “I would say inadequate human capacity has remained a re-occurring challenge facing our industry. It is more prominent with the underwriters. Nobody can fault the underlining reason of the local content policy initiative and it is meant to cut across all the sectors of the Nigerian economy. But in appraising the benefits so derived from the insurance sector, we are all having the fears as to what conclusion or report card we would give at this time. “This is because, from all facts available, we are yet to begin. Yes, there has been some participation here and there, but it is still far from the real intention and I think the industry should be addressing these challenges in a more pragmatic manner and one of such strategies, would be to really come together, sit down and evolve practical solution. “The whole idea or approach of everybody going


Oil rig on fire

about it alone can hardly resolve this challenge. At our level as an institute, the challenge to us is to promote training modules and curriculums that would open or widen the mind-set of practitioners as to what to do. Capital base of companies have grown

considerably, in fact, beyond imaginable scope.” Adetimehin noted that beyond capital, there is a lot more that is expected from operators, stressing that operators ought not to underwrite or shoulder risks with their capital. He said capital is meant to provide infrastructure that would propel them to underwrite risks effectively. He said operators need to develop the capacity to absolve risks, adding that the experience has been fairly

good in the oil and gas business. He noted that if stakeholders can come together under pool formations, as being canvassed at many levels, capacity would grow. Adetimehin said that when operators build adequate capacity; they would even go beyond the shore of Nigeria to absolve risks. He urged operators to shun independent approach to doing things and align with globally practices of pooling and sharing of risks.

he Managing Director of Riskguard-Africa Nigeria Limited, Mr. Yemi Soladoye, has suggested that experienced individuals with little capital should be allowed to participate in the proposed micro-insurance business. According to Soladoye, there is an urgent need for the nation to have three tiers of insurance practice - underwriters, brokers and micro -insurance operators, adding that the system would really help take insurance to the grassroots. He said, “If NAICOM opens the doors for retail business, what it gets from the over N200 billion that is generated now by operators will be multiplied by five. For example, let NAICOM urge all insurance journalists that have been on ground for the past three years, to bring their application to run a microinsurance company with statutory capital of a car, rent a room and parlour, have a fan not an airconditioner and the total cost must not be beyond N1 million, including application fee of N25,000 and renewal fee of N5,000. That will open up the industry. “In countries like the Philippines, they have three tiers of insurance system, just like what we have in the banking sector. The national level, which is the first tier operation, has its capital base, state has its own and the local government, has its capital base too. If we do this, insurance will get to everywhere in Nigeria.” Soladoye noted that the insurance industry needs a treat from within, stressing that the treat would come when the National Insurance Commission, NAICOM, appreciates the fact that insurance should not be distributed only through the traditional distribution channel.



Stakeholders endorse consultative committee


L-R: Senior President of Alternative Risk Solutions Practice, Willis, Canada, Mr. William Chan; President of the Nigerian Council of Registered Insurance Brokers, Barrister Laide Osijo and Mr. Joe Beesack, Senior Vice President of Willis Canada, during the 2013 International Business Visit of NCRIB members to Canada , recently

Operators lose N150bn to fake insurers T Rosemary ONUOHA

he Nigerian I n s u r e r s Association, NIA, has said t h a t t h e insurance sector loses over N150 billion yearly to fake vehicle policies racketeers. Director General of the NIA, Mr. Sunday Thomas, who revealed this, said that of the over 12.5 million vehicles on the nation’s roads, only I.5 million have genuine insurance particulars, which are either comprehensive and are sold at 10 per cent of the worth of the vehicle or third party which are sold at N5,000.

Thomas said that about 1.5 million vehicle policies have so far been uploaded on the Nigerian Insurance Industry Database, NIID, which was designed to capture the data of all insured vehicles in the country. He said, “So far, close to 1.5 million vehicles have been uploaded, which is still a far cry from our expectations. Our target is to upload all the vehicles in the country. “O n e o f t h e m a j o r objectives of the NIID, is to be able to capture the data of transactions within the market. In the past, this has been very difficult to get. We had people bouncing

different figures all around, we want to put an end to that, and we need some time to do that. “We will continue to update the record. There has not been any structured policy in the past to get figures of numbers of vehicles. We only transact in terms of the financial reports not the physical presence of number of vehicles. We are looking to a situation where we would be able to say this is the number of lives and vehicles insured in Nigeria. “If you ask me today about the number of insured vehicles in the country, I would tell you that they are about 1.5 million, because that is what I can account for

and have on my system.” Meanwhile, the Group Managing Director of Mutual Benefits Assurance Plc, Mr. Akin Ogunbiyi, also said that of all the vehicles plying Nigerian roads, 90 per cent of the third party are fake papers. Ogunbiyi said “We have 12.5 million vehicles on Nigerian roads according to statistics outside Okadas and tricycles. If you want to achieve the objective of Market Development and Restructuring Initiative, MDRI, increasing insurance contribution to the Gross Domestic Product (GDP), this aspect of insurance that is compulsory is in the hands of touts and we are losing income on daily basis.

takeholders in the i n s u r a n c e industry have all embraced the proposed consultative committee, which is aimed at uniting and promoting common interest of the industry. President of the Chartered Insurance Institute of Nigeria, CIIN, Mr. Wole Adetimehin, who disclosed this in Lagos, said that the committee w o u l d s o o n b e commissioned, adding that the Commissioner for Insurance, Mr. Fola Daniel has endorsed the initiative. Adetimehin said that the name, Insurance Industry Consultative Committee (IICC), has been adopted by all stakeholders, stressing that the committee would stem the present independent ways of sorting issues in the industry. He said the committee would be made up of executives of the various arms, which would before coming to meetings, meet with their members and table issues bothering on their operations and practice, and present same to the committee to be c h a i r e d b y t h e Commissioner for Insurance. He said, “The executives of the various arms have met to re-appraise the modalities, objectives, constitution of membership, frequency of meetings, chairmanship of the body, administration of the body, as well as who qualifies to be a member of the committee. All these have been peacefully resolved and conveyed to the Commissioner who endorsed the initiative. “If we have this kind of bonding, the situation whereby the various arms of the industry approach and sort out issues with our regulator one-on-one will be a thing of the past. Such attitudes have always affected the interest of one arm of the industry or the other. As such, at the end of the day, we often have conflict of interest at the end of the day.

Labour Victor AHIUMA-YOUNG


RADE Union Congress of Nigeria, TUC, has said besides inept leadership at most levels, the epileptic and inconsistent electricity supply is the greatest problem facing the Nigerian nation. The body equally condemned the prolonged importation of petroleum products into the country and the huge loss of foreign exchange that follows it and calls on government to immediately refurbish all the old refineries to ensure they operate optimally. Speaking in Abuja, President of TUC, Comrade Peter Esele, said, “The power sector has continued to be a source of worry to all of us despite reforms, yet the importance of electricity to e m p l o y m e n t a n d development cannot be overemphasized. Believing that the government’s recent attempts at liberalising the sector will bring succour to the country, we may well say that there could be a silverlining in the dark cloud. Although the labour issues connected to liberalisation have not been fully resolved, it is salutary that government is at least concerned as it appears that effort is being made not to short-change labour this time around. We hope this turns out to be true, and soonest too. “It is common knowledge that, virtually every household in Nigeria now owns a generator. Several persons even have inverters and battery backups installed in their homes because the government has consistently proven itself incapable of making adequate supply of electricity available to the masses. Where it is available, t h e c h a r g e s a r e indiscriminate and unpredictable, irrespective of wh ether the particular consumer actually used it or not. Electricity is an absolute necessity to the industrialisation that we all seek. Apart from inept leadership at most levels, the epileptic and inconsistent supply of electricity is perhaps the greatest problem that we face as a nation today. Going by our last count, there are just 16 power plants in the country, with the Power Holding Company of Nigeria owning 10 of them while the remaining 6 are owned by independent producers. Despite presidential


Epileptic power, a major challenge facing Nigeria —TUC

Electricity Transformer

assurances that the country’s total electricity supply will hit the 6000 MW mark by the end of 2009, the level of production is still less than 4000 MW three years later. And this is a country with a population of over 160 million people.” According to him, “We obviously need to have more players in this power and energy field. Meanwhile Brazil with a population of 192 million people, produces over 100,000 MW of power, while South Africa – whom we helped to attain independence and which has a population of about 50 million people – generates over 40,000 MW of power.

The difference is clear and painful. We understand that the causes of this appalling situation include incompetent management, poor maintenance culture, inadequate funding, corruption, facilities vandalism, etc. But these are all issues that the government can and must tackle decisively and promptly if we are to venture into the group of twenty most developed nations by the year 2020. Indeed, there is no gainsaying that there is urgent need for substantial improvement in the generation and distribution of power nationwide.” “The government should

even explore alternative sources of energy (e.g. the large-scale use of solar power and gas turbines). We also advise that the power sector be fully deregulated to allow for competition and greater efficiency. For starters, the federal government should immediately initiate and facilitate the amendment of relevant statutes to give states that are ready to distribute power for their needs the leeway to do so. The government should also increase funding for the sector and ensure effective security against vandalism and theft of electrical equipment, etc. Please let there be light.”

On Oil and Gas sector, Esele said, “We strongly condemn the prolonged importation of petroleum products into this country and the huge loss of foreign exchange that it occasions. This ugly situation also means that we are indirectly stimulating massive creation of jobs in those countries from whom we buy the petroleum products, while our own people seek for jobs here at home. As a panacea to this, the government should immediately refurbish all the old refineries to ensure that they operate optimally.



NUPENG worries over abandoned NDDC projects Victor AHIUMA-YOUNG


Nigerian workers pressing for demand

PIB: Workers want merger of PEF with downstream regulator Victor AHIUMA-YOUNG


ETROLEUM and Natural Gas Senior Staff Association of N i g e r i a , PENGASSAN, has said the Pe t r o l e u m E q u a l i s a t i o n Fund, PEF, should be merged with the regulatory agency post-Petroleum Industry Bill, PIB. The association condemned the provision in the PIB, whereby PEF will be left to the discretion of the Minister of Petroleum Resources after the passage of the bill into law. It argued that since the functions of the PEF are related with the Downstream Pe t r o l e u m R e g u l a t o r y Agency, DPRA, one of the regulatory agencies provided for in the PIB, the fund should be merged with the agency. The current PIB has, in Section 100 Sub-section 4, provided that “Where the Government decides that Petroleum Products markets

have been effectively deregulated, the Minister shall take the required action to ensure that the Equalisation Fund ceases to exist and its assets and liabilities transferred to the Government to be controlled and managed by the Ministry and at such time the provision of the sections of this Act relating to the Equalisation Fund shall stand repealed. “ Speaking on the fate of PEF post-PIB, PENG ASSAN President, Comrade Babatunde Ogun, said the bill did not stipulate the time frame for PEF to be repealed and neither did it stipulate the fate of the workers of the PEF when it was repealed. According to him, “This should be clarified to ensure that the fate of the current workers, especially members of PENGASSAN and the National Union of Petroleum and Natural Gas Workers (NUPENG) in that agency is adequately catered for. As a result of this observation, we have proposed in our

position on the PIB that the agency should be merged with the Downstream Pe t r o l e u m R e g u l a t o r y Agency as their current functions can still align with functions of the Agency.” “We have presented this our position on the status of the PEF to the NNPC in one of our meetings with NNPC, where the Group Executive Director, Exploration and Pr o d u c t i o n , M r. A b i y e Membere agreed with us that provision should be made in the PIB to move staff of PEF to the Downstream Regulatory Agency post-PIB instead of leaving their fate hanging while the PEF dies a natural death. NNPC also agreed that since their functions will be transferred to the Downstream Regulator Agency, the workers should also be transferred to DPRA where they will be more relevant instead of moving them to the ministry where they may not be relevant.” The PENGASSAN President also said that appointment into the board

of PEF post PIB before it fizzle out should not be based on the recommendations of the Minister of Petroleum Resources but, should follow the process of appointment for other regulatory agencies such as the National Electricity Regulator y Commission (NERC) or Nigerian Communications Commission (NCC) and such appointments and removal should be ratified by the Senate, adding that such appointments should be for a specific term of four years and renewable for another term. Such appointment, he stated should be through competitive process of selection and open to all qualified Nigerians either home or abroad. Comrade Ogun noted that the omission of PEF in the staff transfer in the PIB may be intentional, saying, “In the interest of industrial peace and harmony in the oil and gas industry, workers in the current PEF should be captured under staff transfer in the bill.

igeria Union of Petroleum and Natural Gas Workers, NUPENG, has expressed concern over the abandonment of projects by the Niger Delta Development Commission, NDDC, in many parts of the country. President of NUPENG, Igwe Achese, in a statement decried the complaints by various communities in the Niger Delta of complete neglect and abandonment of projects by the NDDC, saying, “It is sad to state that despite the huge funds allotted the NDDC from oil revenue to develop Niger Delta, there is nothing really on ground to show for its existence. We have had many cases of NDDC contractors collecting mobilisation fees and abandoning the projects. The objective of setting the NDDC has not really been met, as the roads in the Niger Delta are still in deplorable state. The NDDC is just another avenue for its officials and government cronies to enrich themselves. The NDDC has failed to transform lives in the Niger Delta.” “It is only its signboards that are seen, with no noticeable progress in the contracts awarded. A case in point is the reclamation project in Gbaramatu area where the contractor was reported to have removed its equipments even when the project has not been completed. The Union calls on the federal government to review the mandate of the NDDC to make its impact felt by the people whos e s oi l h as be e n destroyed by the activities of oil multi-nationals. It is a pity that the NDDC has not lived up to expectations despite the huge billions of naira voted for its activities every year.” Achese added that “The federal government must therefore set up a special task force to monitor all its activities, projects and make sure that they are commissioned on time.

Solid Mineral


‘Cadastre Office has boosted investors confidence in mining’ In this brief interview with NOEL ONOJA, the DirectorGeneral of the Mining C a d a s t r e O f f i c e , M r. Mohammed Amate, opened up on how much investment the sector has been able to amass since the setting up of the office and how its operation has put on the Wo r l d ’ s m i n i n g m a p . Excerpts: What does your office do? he Mining C a d a s t r e Office was set up primarily to manage and administer mining titles all over the country. This came about as a result of a reform programme that was carried out by the ministry in the sector. If you recall, we had a World Bank intervention and it was in collaboration with the World Bank that this agency was setup. It is to serve mineral title holders on certain basic principles. One is first come, first served basis. If you submit an application to us, the first who submits first will be considered first. The second criterion is nondiscretionary. Irrespective of who you are, where you come from, you are all treated on the same pedestal. Neither the minister nor myself can exercise any discretionary power on mining titles, it is purely on the basis of your fulfillment of the requirements of the Minerals and Mining Act, and the last one is transparency. Our system is very transparent and we follow the rule of law. What are the prerequisites to get the titles? Before you become qualified to obtain a title, first of all, we want to know whether you are financially and technically competent to carry out mining business. Then, we will also want to know whether you are a good citizen, and that is to say, you have not been convicted by


Mr. Mohammed Amate

Mining Lease is usually for largescale mining and where the capital is substantial. If you don’t have substantial capital, and you still want to mine, we’ve created another licence for you called smallscale mining licence any court of law. And in your previous businesses, you have been paying tax as at when due and also you have

identified an area that you want to obtain a licence on. There are about [5] five categories of licences we issue in the Mining Cadastre Office. The first one is Reconnaissance Permit, which enables you just to walk around and see the topography, the geological settings, to find out whether the area is mineralised or not. But it does not give you the powers to dig holes, trenches or even drill holes. It is only for you to walk on the surface. The second category of licence is that, if the course of your Reconnaissance license, you are able to identify an area that you think is mineralised, then you go for what we call Exploration Licence. Exploration Licence is given

over a specific area and it is given in the first instance for a period of three years. Within the three years, you are allowed to go to the area, carry samples, dig trenches, dig holes and whatever for the purposes of taking geological samples only. Then, after three years, you are convinced that zero down to whether the mineral is of commercial quantity, then we can now give you what we called a Mining Lease. But if after that, three years, you are still not satisfied with what you have carried out, we can renew that licence for you for another two years, making it five years. After that, there is still another chance for you to renew it for another two years, making it a total of seven. After the

seventh year, it cannot be renewed again. Mining Lease is only licence that enables you and gives you the power to mine, and it is a mining lease because you have reached an advanced stage of your developmental programme which is given for a period of 25 years. And for as long as you have not exhausted the deposit, you still have another chance of renewing it until you are satisfied that the deposit you have has been exhausted. Mining Lease is usually for large-scale mining and where the capital is substantial. If you don’t have substantial capital, and you still want to mine, we’ve created another licence for you - called smallscale mining licence. It is usually for five years for a much smaller area and there are certain things that you cannot do if you have a smallscale mining licence. For small-scale, you cannot dig tunnels, you cannot go deep underground; you are limited to a certain level because of your level of finance. There is another licence we call Quarry Lease. It is usually for quarriable minerals like granite, limestone, clay and the rest. But for minerals like precious stones, metals and the rest, it has to be carried out under a mining lease. How many titles have you given out since the establishment of this Cadastre Office? I was appointed as DirectorGeneral in 2011. In 2011, we issued about 1,500 mining titles. In 2012, we issued about 1,600 mining titles. Of course, when I say mining title, it consists of Exploration Licence, Mining Lease, Quarry Lease and the rest. And from the beginning of this year to the present time, we have issued close to 400 mining titles. When we issued these titles, we don’t just issue titles and go back to sleep; we also monitor what you are doing.



Cadets in sea training

MAN to spend N2bn on sea training for cadets F Godwin ORITSE

OLLOWING the set back y o u n g N i g e r i a n marine cadets have suffered in getting job placement, occasioned by their inability to get sea time training, the Maritime Academy of Nigeria, has concluded plans to send 250 cadets abroad for their compulsory training. The move to embark on this training programme for cadets, was borne out of an experiment the management of the Academy is currently considering by sending these cadets abroad for eighteen months.. The Academy is currently experimenting with the idea of sending about 250 cadets abroad for the purpose of sea time

The money is meant to pay for their upkeep of the cadets, part of the money will also be spent on the maintenance of their working tools and equipment. ‘We want government to fund the project, but government has to be convinced

training so as to ensure that these category of Nigerians get quality training needed

to flourish in the profession.. In an interactive session with members of the Maritime Reporters Congress of Nigeria (MARCON), the Academy’s Rector Dr. Joshua Okpo, said that the first twenty cadets are being used as a pilot programme for the entire project. Okpo also said that the Ministry of Transport has been intimated of the plan, adding that a proposal has also been sent to the Minister, Senator Idris Umar. The Academy’s boss explained that, while about one of the cadet are from the nautical science department, 150 of the cadets are from marine engineering department. He further explained that it was the desire of the Academy to make Government fund the project, but the government needed to be convinced before we

approach them. According to the Rector, about N8million has been budgeted for each of the cadets and the amount will cover their living expenses, general upkeep of the cadets. “The money is meant to pay for their upkeep of the cadets, part of the money will also be spent on the maintenance of their working tools and e q u i p m e n t . ‘ We w a n t government to fund the project, but government has to be convinced, we must first of all do a pilot project by spending our money”. He stated. Speaking further Okpo stated that the academy is also is also looking forward to its partnership with both the Nigerian Ports Authority (NPA) and the Nigerian Maritime Administration and Safety Agency

(NIMASA) in provision of boats for the training needs of its cadets. The maritime academy is also partnering with both the Inter national Maritime Organisation (IMO) and the World Maritime University (WMU) for the purpose of affiliation. Okpo also commended the support the academy has been receiving from the Nigerian Maritime Administration and Safety Agency, a development that has assisted in completing most of the major projects in the campus. “The academy has never had it so good, NIMASA has been very supportive and I want you all to help me say a big thank you to the Director G e n e r a l , M r. Pa t r i c k Akpobolokemi for his support” he stated.



M Remembering Levi Ajuonuma SEBASTINE OBASI

emories of Levi Ajuonu ma, the former Group General Manager, Public Affairs, Nigerian National Petroleum Corporation, NNPC, resonated at the recently concluded Offshore Te c h n o l o g y C o n f e r e n c e (OTC) in Houston, Texas, USA, when he was given a post-humous award, by the Pe t r o l e u m Te c h n o l o g y Association of Nigeria, P E TA N . T h e P E TA N Outstanding Leadership Aw a r d w a s g i v e n i n recognition of his distinguished and outstanding contributions to the development of the Oil and Gas Industry in Nigeria. The award which was presented by Andrew Yakubu, Group Managing Director, NNPC, was received by Michael Ajuonuma, first son of the deceased, on behalf of the family. Yakubu said that for eight years, Ajuonuma was in charge of organizing NNPC’s participation at the OTC. According to him, ”the passion and exceptional enthusiasm he brought on the job would be missed. Ajuonuma died in the ill-fated Dana Airline crash that

occurred on the third of June, 2012, at Agege, Lagos, which claimed the lives of about 153 passengers on board. With his foray into full time public relations practice as the chief image maker of the NNPC, Ajuonuma was able to deploy relevant communication tools to get Nigerians to understand the workings of the oil and gas industry and the NNPC to dispel the wrong impressions most Nigerians used to have about the Corporation and the entire industry Before his appointment as the Group General Manager, Public Affairs Division of the NNPC in November 2003, he was a broadcaster and public relations consultant with a string of radio and television talk/entertainment shows such as Levi Ajuonuma Live, The Sunday Show and Showtime on NTA Network, as well as The Nation Today

Live on NTA Channel 10 and Open House Party on Raypower 100FM, a programme that ran from the late 80’s through the 90’s. Between producing and presenting the series of talk and entertainment shows, Ajuonuma, as Managing Director/Chief Executive Officer of Lasom Communications Ltd (a consortium of media and public relations consultants), engaged in marketing and public relations consultancy for a number of organisations ranging from the United States Information Service, Federal Road Safety Commission to the Nigerian Institute of Structural Engineers. He also designed and produced corporate marketing and brand promotional TV programmes for corporate giants like Nigerian Breweries Plc,

For eight years, Ajuonuma was in charge of organizing NNPC’s participation at the OTC. According to him, the passion and exceptional enthusiasm he brought on the job would be missed C a d b u r y P l c , Intercontinental Bank Plc and a host of others.

Ajuonuma started his working career in 1977 as an announcer/newscaster with the Imo Broadcasting Service, IBS, in Owerri, Imo State. He left IBS in 1979 and proceeded to the United States of America for further studies at Huntington College, Indiana, where he bagged a Bachelor of Arts in Communications. He later got a Master of Arts and P h . D i n M a s s Communication from the University of Minnesota in 1 9 8 3 a n d 1 9 8 7 respectively. He topped these qualifications with an MBA from Plymouth State College of the University System of New Hampshire in 1989. He had a stint in the academia as Assistant Professor at the Department of Journalism, Keene State College of the University System of the State of New Hampshire, USA, before returning to Nigeria to his first love – broadcasting and public relations. One of his legacies in television broadcasting is t h e N TA N e t w o r k programme, Network Nightline which metamorphosed into Tuesday Live, which runs till date. He was the pioneer producer and presenter of the programme. He is also credited with innovations such as the first simulcast of TV and radio program achieved on the second anniversary of The Sunday Show Live in 1995 by NTA channel 10 and Raypower FM.


Bayelsa community to get deep sea port

JTF nabs security personnel, others for oil theft Emma ARUBI




he hope of the people of Agge community seeing their community transform into an economic hub received a boost last week, following the presentation of the survey report for the proposed deep sea port in the area by the Nigerian Army Engineers Corps to the Bayelsa State Government. Agge is a predominantly fishing community on the Atlantic fringe of Bayelsa State in Ekeremor Local Government Area of Bayelsa State. The Deep Seaport SweetCrude learnt, is to occupy an area of about eight thousand hectares, which is an increase from the initial seven thousand proposed for the facility which will not launch the community on the fast lane of development but the entire Ekeremor council area. Presenting the survey report in Yenagoa, the state governor, Seriake Dickson said the plan by the administration to build a word class Deep Seaport in the state was now on course. ”Today, my dear people of Bayelsa State, you are now seeing in real terms, our plans to transform our economy beyond oil and gas. And I have always said that, we are going to spare no effort in utilizing the maritime endowments of the state. “Our decision to build a world class deep seaport is now on course. What you are seeing today is the beginning of a long journey. I know we still have a long way to go before we have a deep seaport, but then we have started,” Dickson said. The governor, who noted that the surveyed area, extended over fifteen

Deep sea port

thousand hectares of land, directed the Commissioner for Lands and Survey, to begin the process of enumeration, as well as computation of the claims and entitlements of the owners of the affected areas, to enable government commence the payment of adequate, fair and prompt compensations as required by law. He commended the Nigerian Army Engineering Corps for the professional manner it undertook the assignment and expressed delight with the partnership,

noting that it was the beginning of what will become a mutually beneficial relationship. ”This is just the beginning of what will be a mutually beneficial long term relationship,” he assured the Nigerian Army. The governor used the occasion to commend the Chief of Army Staff for diligently carrying out his duties at such a critical stage in the nations’ nascent democracy, describing him as a loyal and hardworking officer. Earlier, the Commander,

Engineers Corps, Nigerian Army, Major Gen. Funso Owonibi, noted that, the assignment has been rewarding adding that the hydrographic survey of the proposed deep seaport will be completed and presented to government. Gen Owonibi expressed appreciation to the state government for the confidence reposed in the Nigerian Army Corps of Engineers, stating that he Army Engineers were carrying out other engineering related assignments in Abia, Anambra and Delta States.

A R R I T H R E E young men allegedly working as oil pipeline sur veillance workers and two women dealing in illegally refined diesel have been arrested by officers and men of the 3 Battalion Army, Warri, Delta State. About 15 mammy boats, used for conveying illegally refined petroleum products were also destroyed during an operation to wipe out illegal refineries in the state. Commanding officer of the 3 Battalion, Lt. Col. Ifeayin Otu, made these disclosures while parading the suspects before newsmen, describing the early hours operations around the Opumami, Bennet Island and Macaraba areas of Warri South and SouthWest as very successful. The names of the surveillance workers are: Olotoye Rufus, Emotoghan Akpos while the third, alleged to be a worker in one of the illegal refineries is Victor Tene. The suspected female oil thieves caught along with them at a camp include Tokere Lucky, 22 and Ebibare Ayas, 36 years. Commander Otu said they would be thoroughly investigated and then handed over to the appropriate prosecuting authorities for further action. The surveillance workers were allegedly caught at the entrance of a creek where illegal bunkering is conducted while the women were caught busy transferring refined products from jerry-cans.



CSR: Total Nigeria kicks off safety programme for schools Kunle KALEJAYE


Lawmakers in section

Lawmakers urge FG to release N500bn owed NDDC Jimitota ONOYUME


O R T H A R C O U R T: APPEAL on the f e d e r a l government to release about N500 billion owed the Niger Delta Development Commission, NDDC, re-echoed again when the House of Representatives Committee on the Niger Delta toured some states in the region inspecting projects being executed by the Commission. By the Act establishing the Commission, the federal government is to contribute an equivalent of 15 percent of the total sum accruable to the nine oil producing state from the Federation Account for its operations. But the government had defaulted on this on several occasions. As at 2009, what had been denied the Commission was put at about N500billion approximately. Chairman of the House Committee on NDCC, Hon Nicholas Mutu, who led members of his team round some member states in the region stressed on the urgent need for the federal

… Tour projects in Niger Delta

We now appreciate the need to commit more funds for the rapid development of the oil-rich region. What we have seen convinces us that the NDDC is making tremendous impact on the lives of the people government to clear up the backlog for the effectiveness of the commission. For four days the lawmakers went through Rivers, Imo, Edo, Delta and Bayelsa states inspecting projects of the commission. During the inspection, the committee observed the

challenges posed by the terrain and the rain for construction related jobs. Mutu at a point voiced it again that the funds owed the Commission should be urgently released for it to achieve it targets expectations in the region “We now appreciate the need to commit more funds for the rapid development of the oil-rich region. What we have seen convinces us that the NDDC is making tremendous impact on the lives of the people. We will, therefore, urge the Federal Government to give the commission the financial muscle to be able to handle more big ticket projects. “We commend the NDDC for working against these odds and still delivering on its mandate of fast-tracking the development of the Niger Delta. In the light of this, we call on the Federal Government to encourage the commission by releasing the over N500 billion it is owing on outstanding statutory allocations to it,” he

said. Adding, Mr Barry Mpigi, r e p r e s e n t i n g Ta i / E l e m e Federal Constituency who also sought greater funding for the commission, expressed the hope that the Petroleum Industry Bill when passed into law, would create avenue for additional fund to address challenges of under development in the region. The lawmakers went round nine ongoing road projects. In Rivers state they inspected the 23.7 kilometer OwazaEtche-Igwuruta road, the 18.9 kilometre Erema Ring road in Ogba/Egbema Ndoni Local Government Area. In Delta and Bayelsa they also visited the Koko-UgheayeEscrovos Road, which would link Delta to Ondo State, with 6 bridges; the 28-kilometer Patani-Angoloma Road in Delta State and the SampouOdoni Road in Bayelsa State. In Imo State, they inspected the 17-kilometre IshinwekeOnicha River Road in Ihite Ubuma LGA and the 18kilometre Obokofia internal roads in Ohaji/Egbema LGA.

eports revealed that over 85 per cent of Nigerian school age children use public transportation on daily basis and are susceptible to road accident. As a result, Total Nigeria Plc has commenced a safety programme for primary and secondary school children in the country as part of its Corporate Social Responsibility initiative. This year’s programme tagged, “Road Safety Cubes Campaign for Children,” which was launched in Lagos and will cut across all the states in the country, is aimed at protecting and educating Nigerian children between the age of 6 to 12 on road signs and proper behavior on the road while going to school. Managing Director, Total Nigeria Plc, Mr. Fr a n c o i s B o u s s a g o l , explained that thousands of lives including school age children are lost every year to avoidable road accident. He commended the Federal and States government for their concerted effort to stem the tide of road accident among Nigerian children. Boussagol stressed that little efforts have been put in place by government to protect the lives of children who form part of the society from road accident. Explaining the drive b e h i n d Ro a d S a f e t y programme, Boussagol s a i d To t a l i s f u l l y committed to reducing road accidents and its associated risks. “Over 85 per cent of Nigerian school age children use public transportation on a daily basis and are seen attempting to cross major roads in a bid to avoid traffic. “Its commendable that at Federal and State levels, concerted efforts have been made to stem the tide of this colossal waste.





keremor is one of the many oil rich local government council areas in Bayelsa State that cannot be accessed by road. Though t he Federal Government through its interventionist agency, the Niger Delta Development Commission (NDDC), embarked on what many described as ‘cosmetic road project’ from the Sagbama flank to link the isolated oil rich Ekeremor enclave to mainland Yenogoa and the few upland communities in the state. The project was starved of funds causing it to go at snail speed for many years, a development that prompted the administration of Seriake Dickson to ask the commission to hands off the road and took over the project. Interestingly, the B a y e l s a We s t senatorial district like the central and east senatorial districts is host to the Anglo-Dutch oil giant, Shell Petroleum Development Company and the Nigerian Agip Oil Company, NAOC, while the natives are predominantly farmers and fishermen. While the oil companies and the Nigerian state are making mega fortunes from the exploration and exploitation of crude oil, the natives are wallowing in penury and are at the receiving end of the environmental despoliation associated with the industry in the Niger Delta. With the rivers and land polluted leading to poor harvest, most of the natives have been forced to abandon their traditional farming and fishing occupation. This development, coupled with the absence of manufacturing industry in the area to absorbed the displaced fishing and farming population among others have brought about widespread poverty among the natives. it was against the backdrop of this scenario that the Senator representing Bayelsa West Senatorial District, Senator Heineken Lokpobiri, initiated an

Some of the empowered indigenes carrying their gifts (inset) Senator Heineken Lokpobiri arriving the occasion

Ekeremor indigenes receive empowerment tools empowerment scheme designed to assist indigenes of the area in setting up small-scale businesses to boost the crusade against poverty in the area.. The scheme, which is a collaborative effort with the National Poverty Eradication Programme, NAPEP, has succeeded in rekindling the hope of many of the natives. It was therefore not surprising that Ekeremor community came alive last weekend, when indigenes of the senatorial district, converged on the serene riverside settlement to receive yet another set of empowerment tools from Senator Lokpobiri. Over 500 persons from the area, especially women and the youths went home with

m o u t h w a t e r i n g empowerment tools to start their own businesses, a gesture initially seen as the exclusive preserve of the trans-national oil firms. A similar exercise it would be recalled was held last year at Sagbama where over 1000 indigenes of the senatorial district were given empowerment packages to kick start and also boost ex i s t i n g b u s i n e s s e s o f beneficiaries in the area. Speaking at the presentation ceremony, the initiator of the scheme, Senator Lokpobiri said it was part of his contributions to assist in improving the fortunes of his people whose means of livelihood have been negatively affected as a result of the activities of the

multi-national oil companies operating in the area. “As you are aware, our people are mainly farmers and fishermen, but the advent of the oil companies and the attendant pollution of the environment have impacted negatively on farming and fishing activities. What we are doing is to empower them so that they will be in a position to cater for themselves and take care of their families,” Lokpobiri said. He, however, expressed displeasure at the attitude of some of the beneficiaries of the scheme, who sold equipment meant for poverty eradication at give-away prices. The senator recalled that some of those that benefitted

from last year ’s empowerment scheme held at Sagbama in Sagbama council area sold the equipment given to them at the venue of the ceremony. According to him, some of the beneficiaries sold equipment that cost over N100,000 to interested buyers at a paltry sum of N20, 000. He described their action as discouraging and not in tandem with effort aimed at eradicating poverty at the grassroots. His words, “last year a similar exercise was held at S a g b a m a w h e r e empowerment packages were given out to beneficiaries.

Sweetcrude June 2013 Edition  
Sweetcrude June 2013 Edition  

Local content gives succour to indigenous players