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Kerosene subsidy: Removal delayed to avert labour, masses unrest P/08

Divergent reactions trail Sanusi’s suspension from CBN P\14 President Goodluck Jonathan

A Vanguard Monthly Review Of The Energy Industry VOL 04

N0. 58

MARCH, 2014

UPDATES MONTHLY BASKET PRICE

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Heritage Oil: OML 30 producing 15,600bpd ONYEGBADUE AMAMDI

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eritage Oil Plc an independent upstream exploration and production company, has said that year to date production from Oil Mining Lease OML 30, is now producing approximately 15,600 barrels per day about 17% higher than Q4 2013. Heritage Oil said that there have been three lifting to date in 2014, and it is expected that these will take place on a

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Oil drilling rigs

Delay, funding may hamper marginal fields’ sale

…DPR stalling, yet to commence bid process P\24

Tension mounts over breach of agreements with workers


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Contents COVER

4 08

Kerosene subsidy: Removal delayed to avert labour, masses unrest

12

‘Marginal fields should be awarded on merit’

Delay, funding may hamper marginal fields’ sale

OIL FOCUS

14 16 18 19

FINANCE

20 22

POWER

24 24 29

LABOUR

Divergent reactions trail Sanusi’s suspension form CBN

TECHNOLOGY The Solar car

GAS

Over 3,000 vehicles ran on CNG in 2013

SOLID MINERALS Mining Found will fast-track development—Adie

Electricity: Reps urges consumers to utilize complaints offices

INSURANCE

Operators must consolidate on all fronts to grow business—Soladoye

Tension mounts over breach of agreement with workers

MARITIME Senate seeks protection of maritime projects in Delta

COMMUNITY

Total donates clinic equipment to Teaching Hospital

Sweetcrude is a publication of Vanguard Media Limited

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

Francis AYO & Johnbull OMOREGBEE

Enquiries Call: 08098051103

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

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

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NPC accounts and its remittances to the Fe de r a tio n A c co un t ha ve do m i na ted economic discourse since the year began, and it looks like it will continue to do so until the conclusion of the forensic audit and judicial interpretation of subsid y deductions on kerose ne. In this edition, Sweet crude unveils some hidden truths about the kerose ne subsidy, which the former CBN governor, Sanu si Lamido Sanusi dec lared as illegal. Ironically, the former apex ban k boss condoned the “illeg ality ” for almost fiv e years on account of his members hip of the RMAFC. Certainly, more truths will be unveiled, but while we await these, we a ssessed the prepared ness of the DPR to meet the dea dline for conducting another marginal fields licen cing round, and ana l ys t s are of the view that it may no t meet set targets. As is our custom, we bring to our readers a cocktail of developments in o ther sectors of the ec onomy as they unfold. In our last edition, we celebr ated the achievements of the banking sector in funding energy projects, par ticularly the acquis ition of power assets, but for mer chief executive of Access Bank Plc, Mr Aig.Im ogkuede says it is too soon to celebrate as some ba nks may have bitten more than they could chew. From Oil and Gas, to Power, Labour, Fin ance, Technology, Solid Mierals, Insurance , Labour, Maritime, and Com munity, there is som ething for everyone. Although the NOG did not hold as sche duled in February, but it wa s all for a good cou rse; to celebrate our Cente nnial anniversary as nation, which is very impor tant in view of the upcoming National Confab, du ring which we will try to review and tweak our nation hood. Long live Nigeria!


Cover Story

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Delay, funding may hamper marginal fields’ sale …DPR stalling, yet to commence bid process

BY MICHAEL EBOH & SEBASTINE OBASI

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e d e r a l Government’s plan to sell 31 marginal fields to indigenous operators may be threatened by the delay in the takeoff of the process. This has thrown up a number of questions and uncertainties, especially with regard to the ability of the sales to lead to meaningful improvement in the fortunes of the marginal fields segment of the Nigerian petroleum sector. Furthermore, as at the time of this report, industry regulator, the Department of Petroleum Resources, DPR, seems rather unwilling to update Nigerians on developments with the bid round, thus, giving rise to speculations as to its commitment to ensuring transparent sale. Earlier timeline provided by DPR indicated that the bid rounds would commence in December and be concluded by March 2014, while the winners are to be announced April. However, with less than a few days to the end of March, nothing has been heard from the regulator about the process, apart from the series of road

shows which were held December 2013. Several attempts by Sweetcrude through several emails and reminders to get the Department to comment on the subject proved abortive, even as sources within insist that the process is progressing as scheduled, without further details. But DPR’s silence is being misinterpreted in some circles, particularly among those who believe that the delay is an attempt to manipulate the process. Contending issues Other outstanding issues such as the viability of the fields and the financial capability of indigenous operators seem not to be helping matters. True to character, one of the industry’s workers’ unions, the Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, suspects the process is being influenced by the powers that be. PENGASSANGeneral Secretary, Mr. Bayo Olowoshile told Sweetcrude, “The fact that only eight out of the 27 marginal fields allocated since 2003 to indigenous investors are operating and barely contributing about 27,700 barrels of oil per day. This is

An oil rig

Even though bidding is believed to be influenced by the powers that be,the current challenge is funding the bids, paying the signature bonuses and financing the exploration and production processes

about 2.5 per cent of Nigeria’s crude oil production and about 35 million standard cubic feet per day of gas, make the 31 oil fields at stake to be less attractive,” He also noted that a number of the indigenous investors are financially handicapped and may not be able to pool the necessary resources to fund the acquisition. According to him, the financial challenges faced by the indigenous operators have, over the years, made operators to act

as fronts or proxy for foreign investors, who end up buying the assets. He said, “In reality, the indigenous investors are still far from pooling that resources for the oil and gas business, and as such, most of them act as fronts or proxy for the real foreign owners, who truly buy the asset and pay commissions to indigenous owners. “Even though bidding is believed to be influenced by the powers that be,the current challenge is funding the bids,

paying the signature bonuses and financing the exploration and production processes.” Continuing, Olowoshile said, “Oil production is highly technical and capital intensive. And it goes with a lot of risks, especially as it affects the investment layout. More so, access to the colossal amount of funds required for oil and gas business is becoming a big challenge going by the difficult environment that Nigeria poses to investors and financiers from the outside world, who want to partner with the indigenous owners and operators of marginal field. “This status is compounded by the ongoing actions by the International Oil Companies, IOCs, who are now abandoning and/or divesting with wild excuses of supporting government’s efforts at relinquishing more oil fields to indigenous investors. “Some IOCs frankly insist that pipeline sabotage, oil thefts, foggy state of fiscal and nonfiscal provisions of the impending PIB, and security

CONTINUES ON PAGE 5


Cover Story

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CONTINUED FROM PAGE 4 challenges, are deterring them in mobilising needed investment for Nigeria’s oil & gas sector.” Delay is dangerous Also speaking, Mr. Patrick Okigbo, Principal Partner at Nextier Capital Limited, an investment and multicompetency advisory firm, focused primarily on agriculture, power and petroleum, expressed concern over the current delay. He said, “The ad-hoc nature of these rounds could be discouraging to serious investors. Without serious investors, these assets will still be sold but they will probably not produce and will not increase Nigeria’s production base. It is no surprise that 10 years after the sale of 24 marginal fields, only eight of them are operational.” He further maintained that judging from previous licensing rounds and sale of marginal fields, there is much to be desired. “Previous processes were marred by seeming lack of due

Oil platform

Delay, funding may hamper marginal fields’ sale When you put all this into perspective, the impact of indigenous entrepreneurial endeavor in the marginal field space is highly commendable, and thus lends credence to the underlying objectives of the marginal field programme process, transparency and credibility. There are allegations that some companies that did not bid and were not prequalified ended up as cowinners of assets. There are also allegations of companies that were in the lower half of the score sheet ultimately emerging as winners,” he noted. Continuing, he said, “Haven’t the timeline slipped already? The Honorable Minister of Petroleum Resources announced the start of the

process in December 2013, and promised that a timetable would be communicated in two weeks. The lists of fields, maps and application forms which ought to have been available on the website of the DPR since December 14th are not yet there. “A l s o , s u b m i s s i o n o f applications that should have ended on January 3, 2014, is yet to commence even at February ending. We understand that the release of the timetable is anticipated for February;we are

already in March, and there is no likelihood that it will be announced anytime soon.” He, however, expressed optimism in government’s ability to overcome these challenges, based on the recent conclusion of the sale of power companies to private investors. “The recent sale of the power companies increased investor confidence that the sale of public assets can be objective and transparent. This provides hope that the proposed sale of the marginal oil fields may be transparent and fair,” he added. Okigbo further advocated a change in strategy in the sale of the marginal fields, saying that, “The oil licensing rounds and sale of marginal fields should not be on ad-hoc basis, they should be tied to a comprehensive, long-term, economic development strategy. “There should be an overarching strategy for managing Nigeria’s natural resource base for current and future generations. The Nigerian government should tie every licensing round or sale of marginal fields to this development plan.”

Increased awareness On his own part, Mr. Debo Fagbami, Chief Operating Officer, Xenergi Limited, an oil and gas company, argued that the fact that the Federal Government is warming up for another bid round is an encouraging development. This is because in the 10 years since the last bid round, a lot more awareness on the importance of marginal field asset development as a key contributor to indigenous participation in Nigeria’s energy landscape had been created. According to him, “In as much as only eight out of 24 fields (33 percent) that were awarded in 2003 have attained commercial production, we all need to recognise that those that haven’t attained production have equally tried amidst a variety of challenges to achieve first oil. “When you put all this into perspective, the impact of indigenous entrepreneurial endeavor in the marginal field space is highly commendable, and thus lends credence to the underlying objectives of the marginal field programme. Regarding the bidding process, the recent DPR guidelines

provide for level playing field and also demonstrate transparency on the part of the regulator. “On the part of the bidders, it encourages synergy from the point of view of establishing consortia and leveraging on individual strength and value that consortium members bring to the table in tendering formidable bids.” As regards the ability of government to meet the deadline for the award of the licences, Fagbami said it is difficult to determine, especially as the nation is approaching election period. He however argued that given the pedigree of the current DPR under the leadership of Mr. George Osahon, the deadline could be met and if not, it would be due to other factors beyond his control. On what should be done to increase productivity of marginal field operators, Fagbami explained that funding is paramount. “Funding is a key f a c t o r, a s w e l l a s c l o s e r monitoring by the regulators – NAPIMS, DPR etc. It is sad that some multinational service companies demand upfront

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Cover Story

6

Delay, funding may hamper marginal fields’ sale

Oil worker

CONTINUED FROM PAGE 5 payment from marginal field operators before they can render services that would enhance their oil recovery and productivity. “Some of these services run into millions of dollars that marginal field operators can only afford upon sale of their crude.But if these services have to be paid for prior to rendering them, it leaves the operator in a dilemma much like being caught between a rock and a hard place. This is one aspect that the regulators and industry watchdogs can step in to help the marginal field operators achieve their production potential,” he said. Misinterpretation of delay In November 2013, the Minster of Petroleum Resources, Mrs. Diezani Alison-Madueke, announced the planned sale of new marginal fields. She said there were 31 fields in all, with 16 located onshore, while the remaining 15 are in the continental shelf. But since the road shows

following the announcement, nothing has been heard about the process from the DPR three months after. Africa Oil and Gas Report, an energy journal, wrote that the delay has given rise to speculations about the actual list of fields on offer. According to the journal, the DPR’s failure to release any information regarding the process has created room for speculation, with several lists making the rounds, none of which is official. While announcing the commencement of the bid p r o c e s s , A l i s o n - M a d u e ke , reassured of Federal Government’s commitment to transparency in the bid process, in line with its commitment to openness and transparency in the conduct of business activities in the country. She said the process is designed to boost the participation of Nigerian indigenous companies in the upstream, and to generally i n c r e a s e ex p l o r a t i o n a n d production activities in the oil

and gas sector to the benefit of Nigerians and the Nigerian economy. She, however, stated that of the 24 fields that were allocated to 31 indigenous oil companies in the first bid round in 2003, only eight were already producing while the others are at various stages of development. The Federal Government also awarded five marginal fields on a discretionary basis to four companies, while three additional oil fields were awarded to the Nigerian Pe t r o l e u m D e v e l o p m e n t Company, NPDC. Non-producing fields As at December last year, 12 companies out of all the companies awarded the fields since 2003 are yet to commence production. The companies, according to Africa Oil and Gas Report, are: ? G u a r a n t e e Petroleum/Owena, owners of the Ororo field; ? Bicta Energy, owner of the Ogedeh field; ? Sogenal Limited, operator of the Akepo field;

? Bayelsa Oil, operator of the Atala field; ? Movido, operator of the Ekeh field; ? G o l a n d Pe t r o l e u m , operator of Oriri field; ? Eurafric, operator of the Dawes Island field; ? Network Exploration and Production Company, operator of the Qua Iboe field; ? U n i v e r s a l E n e r g y, operator of the Stubb Creek field; ? Associated/ Dansaki, operator of the Tom Shot Bank field; ? Green Energy, operator of the Otakikpo field; and, ? All Grace, operator of the Ubima field. The journal attributed the inability of the operators to commence production to a number of factors, ranging from fraud allegations, and funding challenges to distractions. Producing fields DPR’s Osahon declared midlast year that marginal fields accounted for 2.1 per cent of the country’s total crude production, with a daily production of about 60,000 barrels of oil per day. He noted that within a period

of 10 years, marginal fields’ operators have grown their reserves from 141 million barrels in 2004 to 302.6 million barrels in 2013. Osahon further noted that of the 24 marginal fields awarded in 2003 and the five fields awarded on a discretionary basis, only nine are producing. He listed the active and productive marginal fields as: ? Platform Petroleum, owner of Asuokpu/Umutu field; ? Wa l t e r S m i t h a n d Morris Petroleum owners of the Ibigwe field ? Frontier Oil, owner of the Uquo field; ? Britania-U, owners of Ajapa field; ? Midwestern Oil and Gas and Suntrust, owners of Umusadege field ? Pillar Oil, owner of Obodogwa/Obodeti field. He further stated that of the five marginal fields that were awarded on a discretionary basis, only Oriental Energy, owner of two fields - Okwok and Ebok fields; and Niger Delta Pe t r o l e u m D e v e l o p m e n t Company, owner of Ogbelle field are involved in active production. But in third quarter 2013, the Nigerian National Petroleum Corporation, NNPC, said marginal fields’ operators accounted for only 2.54 per cent of the country’s total crude production, with a total of 5.27 million barrels out of the period’s total crude oil production of 207.71 million barrels. Also speaking, Mr. Victor Briggs, Managing Director, NPDC, noted that the current production capacity of marginal fields’ operators is not adequate, declaring that a lot still needed to be done to change the rules of engagement in the Nigerian oil industry. According to him, if indigenous oil companies are able to produce about one million barrels of crude daily or half of Nigeria’s crude oil, the international oil companies will no longer be able to hold the country to ransom. He said, “There is absolute


I

llegal oil refineries in Nigeria thrive on illegal oil bunkering, stolen crude oil, and vandalism of oil pipelines and other installations. Without a doubt, these illegal oil operations are reprehensible and should not be condoned for a number of reasons. Firstly, it is improper for citizens of this country to destroy oil installations in their bid to steal crude oil as feedstock for illegal refineries. Secondly, it is lawless to set up any kind of refinery without going through the licensing process with the relevant government agency - Department of Petroleum Resources, DPR. Thirdly, it is most inappropriate for anybody, Nigerians or Foreigners, to steal crude oil belonging to the Nigerian State with impunity. Finally, and perhaps the most worrisome is what the illegal oil refiners do with the residue (black oil) from crude oil distillation process. There are serious environmental issues involved regardless of whether they dump the ‘black stuff ’ into the river or simply incinerate it. I recently had a thoughtprovoking discussion on the issue of illegal refineries with Prof. GoddyIgwe, the D i r e c t o r, C e n t r e f o r G a s , Refining & Petrochemicals, University of Port Harcourt. However, on further reflection I realized that there may be a few positive lessons to be learnt from these illegal oil operations. First lesson: there is a significant imbalance between our projected refining capacity and existing capacity, such that it has become very tempting to boil crude oil in drums knowing that there is a guaranteed market

Oil & People Between illegal and modular refineries in Niger Delta

24,000 bpd modular refinery. Most of the spinoff jobs created are of a secondary nature, and based on the location of the site. In summary, modular refineries are simple, efficient and fast to start up. Such refineries usually operate at optimal capacity at all times. The relatively small investment cost allows for private investors to enter the refining business much easier. It also enables government to build the bigger capacity refineries using the modular format, but in incremental stages.However, government- built modular refineries should have full conversion facilities (i.e. catalytic reformers and naphtha hydrotreaters) to enable the refineries produce premium motor spirit, PMS or petrol. National oil refining model

Chijioke Nwaozuzu for the petroleum products (which they usually sell as diesel, AGO). Second lesson: smallscale (modular) refineries could be profitably sited close to oil flow stations and terminals. So, I thought that it may be unwise for government to ‘throw out the baby with the dirty bath water’. Big vs. modular refineries The capital outlay for any 100,000 barrel per day (bpd) refinery is about $1.5 billion, while a 24,000 bpd modular refinery is roughly $250m. Therefore, it is easier to access funds for the modular refining modules (through US Ex-IM Bank). The manufacturing time for plant, equipment and machinery for a plant of 100,000 bpd capacity is within the range of three to four years. Start-up for modular refineries of 24,000 bpd is within 18-20 months. The modular system allows the

plant to be expanded to 100,000 bpd capacity in structured increments. The increments can be funded with the cash flows from Phase 1 and additional phases, and so the refinery will not incur additional debt for the expansion. The expansion of the modular plant capacity can be done without shutting down p r o d u c t i o n f r o m ex i s t i n g equipment and plants. This is not the case with big capacity refineries.

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evenue streams and payback periods are faster with the modular refining format, than with the larger capacity refineries. The major short-coming with modular refineries are that the plants are semi-automated and less laborintensive, i.e. not many jobs can be created directly. For instance, 20 to 30 personnel can operate a

There is a current overreliance on government- owned refineries. Nigeria can also adopt a refining model that relies on modular refineries (built and operated by private investors) that will produce all refined products with the exc e p t i o n o f p e t r o l . T h e implication is that the modular refinery operators will not have to invest in catalytic converters and naphtha hydrotreaters that are required to convert naphtha to petrol. These equipments are capital intensive and complex. Therefore, the exclusion of such facilities in a modular refinery plant will further reduce the cost of set-up. This will enable the modular refiners to focus on producing diesel, marine diesel, dual purpose kerosene (DPK), aviation turbine kerosene (ATK), and low-pour fuel oil (LPFO).

On the other hand, Nigerian National Petroleum Corporation, NNPC refineries can focus on PMS production and become essentially transformed into PMS complexes instead of full conversion refineries. In this case, NNPC refineries will buy all the naphtha feedstock from the modular refinery operators and convert these to PMS. Other products that NNPC refineries can produce will include fuel oil, bitumen, asphalt, and petrochemicals. Based on 60% capacity utilization, NNPC refineries have the capability to process 20.3 million litres of PMS per day. These national refineries can add another 13.8 million litres per day if they are converted into PMS complexes, and thus satisfy the nation’s immediate PMS production needs.


Oil

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Kerosene subsidy: Removal delayed to avert labour, masses unrest

Queue at a filling station

CLARA NWACHUKWU

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vailable evidence has indicated that the Nigerian N a t i o n a l P e t r o l e u m Corporation, NNPC, was advised to stay action on the implementation of the removal of subsidy on kerosene to avert labour and masses unrest. Recall that in the wake of the scandal on NNPC remittances to the Federation accounts, the former Governor, Central Bank of Nigeria, CBN, Mallam Sanusi Lamido Sanusi, had declared kerosene subsidy as illegal. But the stay of action Vanguard gathered was approved by an Inter-ministerial Committee set up by late President Umaru M u s a Ya r ’ A d u a , o n t h e deregulation of the downstream. According to the Committee, “This unanimous decision was a strategic move to win the hearts and minds of the public over the eventual goal of deregulating the downstream sector as a whole.” In a series of memos among the ministries of Petroleum, Finance, and NNPC over a period of five years exclusively obtained by Sweetcrude, this fact was reiterated over and over again.

In one of the memos dated February 15, 2010, the then Group Managing Director, N N P C , M r. M o h a m m e d Barkindo, reminded the then Minister of Finance, Dr. Mansur Muhtar of this decision, when the Corporation was having problems with getting payment for claims for kerosene subsidy. In the memo entitled: “Re: Endorsement of Action Plan on the Deregulation of the Downstream Petroleum Subsector – Subsidy for Kerosene,” Barkindo reminded Muhtar of the directive to NNPC “to delay implementation of the decision to remove subsidy on kerosene.” The stay of action remained even as the NNPC, in subsequent correspondences constantly sought clarification on the implementation of the removal of kerosene subsidy “to avoid misunderstandings”. Removal of kerosene subsidy Unknown to many Nigerians, subsidy on household kerosene was removed on June 15, 2009, albeit, with a caveat that “Public announcement of this measure should be avoided,” as directed by late Yar’Adua. A memo by the Principal Secretary to the President, PSP,

to Yar’Adua, dated June 10, 2009, “kindly invited” the late president to, among others, advise key government officials on the decision to remove subsidy on Kerosene. The memo, with Reference No: SH/PSP/24/A/812, specifically urged Mr President to direct the then Minister of Petroleum Resources, Dr. Rilwanu Lukman, to “Eliminate existing subsidy on the consumption of kerosene taking into account that subsidy payments by Government on kerosene do not reach the intended beneficiaries.” The PSP also added that “Public announcement of this measure should be avoided,” possibly to also avoid public outcry at that period. Furthermore, in a subsequent memo to the Chief Economic Adviser, dated, October 19, 2009, the PSP wrote, “…in my humble opinion the NNPC should not be entitled to claim from the Petroleum Support Fund (PSF) in respect of kerosene with effect from the date of Mr. President approval i.e. 15th June 2009.” The memo signed by David Edevbie, and with the reference: SH/PSP/24/A/1087, also acknowledged that the Presidential directives had been

“conveyed to the Hon. Minister of Petroleum Resources and copied to the relevant state officials.” C o n f u s i o n o v e r implementation However, confusion has trailed the implementation of the kerosene subsidy removal since 2009, mainly because it was to be exe c u t e d w i t h o u t “ p u b l i c announcement” as well as the f a c t t h a t t h e M u h t a r- l e d Presidential Committee, had called for a stay of action on the decision. The confusion became evident in subsequent correspondences on the subject, as contained in the following memos: · M r. O d e i n A j u m o g o b i a (Minister of State), on April 17, 2009 to Muhtar ·Mr. Mohammed Barkindo (GMD), December 16, 2009, to Muhtar ·Mr. Mohammed Barkindo, February 15, 2010, to Muhtar ·Mr. Mohammed Barkindo, March 2, 2010, to Muhtar ·Mallam Shehu Ladan (GMD), April 30, 2010 to Aganga ·Mrs. Diezani Alison-Madueke (Minister), May 24, 2010 to Aganga ·Austin Oniwon (GMD), March

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U.S. moves toward Atlantic oil exploration

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he Interior Department opened the door to the first searches in decades for oil and gas off the Atlantic coast, recommending that undersea seismic surveys proceed, though with a host of safeguards to shield marine life from much of their impact. The recommendation is likely to be adopted after a period of public comment and over objections by environmental activists who say it will be ruinous for the climate and sea life alike. The American Petroleum Institute called the recommendation a critical step toward bolstering the nation’s energy security, predicting that oil and gas production in the region could create 280,000 new jobs and generate $195 billion in private investment. Activists were livid. Allowing exploration “could be a death sentence for many marine mammals, and is needlessly turning the Atlantic Ocean into a blast zone,” Jacqueline Savitz, a vice president at the conservation group Oceana, said in a statement on Thursday. Oceana and other groups have campaigned for months against the Atlantic survey plans, citing Interior Department calculations that the intense noise of seismic exploration could kill and injure thousands of dolphins and whales. But while the assessment released on Thursday repeats those estimates, it also largely dismisses them, stating that they employ multiple worst-case scenarios and ignore measures by humans and the mammals themselves to avoid harm. Many marine scientists say the estimates of death and injury are at best seriously inflated. “There’s no argument that some of these sounds can harm animals, but it’s blown out of proportion,” Arthur N. Popper, who heads the University of Maryland’s laboratory of aquatic bioacoustics , said in an interview. “It’s the Flipper syndrome, or ‘Free Willy.’ ” How the noise affects sea mammals’ behavior in the long term — an issue about which little is known — is a much greater concern, he said.


Oil

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Kerosene queue

Kerosene subsidy: Removal delayed to avert labour, masses unrest CONTINUED FROM PAGE 6 1, 2011 to Alison-Madueke ·Alison-Madueke, March 1, 2011 to Aganga Presidential Committee While expressing full support for the deregulation of the downstream petroleum sector and the removal of subsidy on kerosene, the NNPC constantly noted that it will stop subsidy deductions if specifically directed to do so.” The NNPC’s caveat on the removal of kerosene subsidy was apparently based on the decision of the Presidential Committee to put the implementation on hold in one of its meetings. The meeting, which was held in the office of Lukman, was also a t t e n d e d b y M u h t a r, Ajumogobia, as well as the Chief E c o n o m i c Ad v i s e r t o t h e President, and Barkindo. In the memo by Barkindo to Muhtar on December 16, 2009, he recalled that “After extensive discussions on the issues on the implementation of kerosene subsidy removal, which at that time will translate to an increase in the price of kerosene, NNPC was directed to delay the implementation of the Presidential decision to remove subsidy on kerosene.” He further recalled that the Committee’s decision was based

on “… a strategic move to win the hearts and minds of NLC (Nigeria Labour Congress) and the public over the eventual goal of deregulating the downstream sector as a whole.” He had also complained that: “The Principal Secretary to the President and Commander-inChief of the Federal Republic of Nigeria (PSP), had in a memo to the National Security Adviser, dated October 19, 2009, sought to deny NNPC of the right to claim subsidy on kerosene effective June 15, 2009, on the ground that NNPC did not implement Mr. President’s directive on the issue.” Barkindo further noted that Muhtar, in his capacity as the Chairman of the Presidential Committee had, “the authority of Mr. President to determine the takeoff date for the implementation of the decision to eliminate subsidy on kerosene.” He therefore, sought among others for the minister to continue to approve NNPC’s claims on Kerosene subsidy; and to direct the PPPRA to continue to honour such claims. He also sought that the PSP be advised “of the decisions of the interministerial committee on the deregulation of the downstream sector directing NNPC to delay the implementation of the sale of

DPK (kerosene) at deregulated price and to clear up any misunderstanding on the part of the PSP in this regard.” C B N d e c l a r e s ke r o s e n e subsidy illegal U n f o r t u n a t e l y, t h e misunderstanding has remained till date, as Sanusi insisted at last week’s public hearing that, “We do not accept the legality of the kerosene subsidy deduction.” The former CBN governor at an earlier public hearing at the Senate on NNPC remittances on February 4, had also declared as followed: ·That implementation of kerosene subsidy regime is a violation of the DPK deregulation order by the late President Yar’Adua. ·That the directive was communicated to and received by NNPC. ·That the average supply of DPK vessels by NNPC was between four and six vessels per month with a conversion factor of 1,136 litres equals 1 Metric Ton. ·That NNPC rendered nil returns on kerosene subsidy from April 2012 to December 2013. ·That NNPC delayed in filing subsidy claims to PPPRA. ·That the entire subsidy implementation is a farce/myth.

The CBN’s rejection of the legality of the kerosene subsidy was in spite of the explanations by the Petroleum Minister, Mrs. Diezani Alison-Madueke that the stay of action was advised by the Presidential Committee. According to her, “The reason for staying action is because if we removed the subsidy on kerosene suddenly, obviously kerosene will go up three times the price it is selling today. It will cause a major problem for the economy and the government. There will be untold hardship for the Nigeria masses. “The GMD at that time wrote two memos to the Finance Minister seeking for clarification despite a presidential directive but no clarification came, hence the subsidy remained. The issue of deduction at source happened because the product landed at N150 and was sold at N50. “There is a N100 gap, which must be covered and it is not budgeted for. The NNPC was unable to retrieve the amount. In this case, based on the first line charge in the Appropriation Act, it means that NNPC would have gone under long time ago under the weight of the subsidy, and it would have affected the economy of other countries in West Africa.” Further actions

But Sanusi’s outburst has led to a series of claims and counterclaims between the CBN and the Ministry of Petroleum/NNPC on the one hand as well as between the CBN and Ministry of Finance on the other. The counter claims resulted in the call for a forensic audit of the NNPC accounts and a legal interpretation of the legality of kerosene subsidy. While Nigerians await the outcome of these actions, NNPC’s GMD, Mr. Andrew Yakubu, insisted that “NNPC did not flout any directive. The actual position is that the directive to implement the deregulation of Kerosene was not received by NNPC … ostensibly due to the perceived challenges in implementation process.” He further noted “…the presidential directive contained conflicting provisions that required further clarification to support the implementation. Mr. Chairman, NNPC attempted t h r o u g h s e v e r a l correspondences to seek clarifications on the conflicting provisions in the directive without any positive response.” He also recalled a “House of Representative Resolution on 5 July 2011, supporting the retention of the subsidy on HHK and directed the retention of the sale of HHK at N50 per liter.” But Nigerians are already paying more because kerosene, apart from being a dual purpose fuel and used for both domestic/household kerosene and aviation fuel, is also being used for other industrial purposes.


Oil

10

PIB: Oil companies accused of sabotage Local content

GABRIEL EWEPU

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B U J A FOLLOWING the delay in the passage of the Petroleum Industrial Bill, PIB, into Law, t h e C o o r d i n a t o r, H o s t Communities Network of Nigeria, Prince Preye Pawuru, has accused oil multinationals operating in the Niger Delta of sabotaging the bill. Pawuru told Sweetcrude that Nigeria’s petroleum sector had remained unregulated over the years, and as such was imperative that the PIB is passed into law. This, he said, is to enable proper regulation, accountability and transparency in the industry, to fast-track the development in the oil producing communities and the country as a whole. Pawuru said: “The major stumbling block against the PIB is the oil multinationals. They are busy lobbying the National Assembly because by the time the PIB is passed the profit margin of these oil companies will drop. These companies are only interested in their profit, and as such, will do everything possible to boost their profits. “The revenue accruing from oil exploitation will go directly to Nigeria and

Nigerians, and not to the oil corporations. We want the right thing to be done in the right way, but they do not want it to be done in the right way because they would not be making the profits they use to declare. “The National Assembly should understand the benefits of the PIB, and we voted them in to represent us and not their purses. They should understand that the Nigerian people are watching. They should also understand that this Bill is out to enrich the common Nigerian, and so they should have the common Nigerians at heart by passing this Bill, and it will help them also to have more to share. “The oil companies are the ones sabotaging the PIB in order to protect their profit margin, and that is what we the stakeholders, particularly the host communities are fighting against, and the National Assembly seems not to understand.” Speaking on the challenge before the PIB, particularly the resistance from the North, Pawuru attributed this to lack of understanding of the provisions and benefits the bill also has for the North. “The Northern challenge as far as the PIB is concerned is that the Northern people do not understand what the PIB is all about, and we have tried to enlighten them on this

especially the clause or provision for the host communities. “Their grievance is that so much money is going to the Niger Delta and there was nothing to show for it, and the aspect of 10 per cent of equity fund in the PIB for host communities should be expunged. “But the PIB will also benefit the Northerners because the more revenue from oil the more the allocation will get to the states and the local government councils, because there will be accountability and transparency in the industry.

Their grievance is that so much money is going to the Niger Delta and there was nothing to show for it, and the aspect of 10 per cent of equity fund in the PIB for host communities should be expunged “Right now the petroleum industry is opaque and we do not know what is happening, and we are losing huge revenues as a nation on account of this, which is what the PIB seeks to correct.”

Ofserv to promote innovative technology in drilling GRACE UDOFIA

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fserv Nigeria Limited, and Skangix Development Company, have announced plans to organise a technology conference, aimed at showcasing creative solutions to address specific drilling and formation evaluation challenges experienced by oil and gas operating companies. According to a statement by Mr. Sam Coker, Chief Executive Officer, Skangix, the event with the theme, ‘Nigerian Oil and Gas industry: leveraging innovative technology for cost effective formation evaluation while drilling,’ will focus on national issues that bother on drilling by operators in the industry. He said that various tools and accessories would be on display that would boost production for operating companies, thereby helping them

get an advantageous cost. “FEWD, Directional Drilling tools and accessories on display will be demonstrated to reveal unique features and benefits while highlighting how basic MWD and Mudlog data is integrated to derive reservoir parameters, thereby, saving operators on well delivery and logging cost significantly,” he said. He further noted that he is looking forward to hosting and receiving their invited guests, as the event would afford the delegates the platform to relate, share ideas and explore practical ways in getting solutions which would be relevant in their own operations Coker argued that this epoch event would be the first of its kind in the industry, as operators are constantly compelled to search for means to reduce operational cost, while also being careful not to compromise on the quality of delivery.


F

Focus

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‘Marginal fields should be awarded on merit’

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he Federal Government is set to award 31 marginal fields, the second time since 2003. Engineer Barry Esimone, Chief Executive Officer, Crusteam, an energy and infrastructure group, in this interview with Sebastine Obasi, appraises the last bid round and the expectations of the current one. Excerpts: Ten years after the award of the first round of marginal fields’ licences, only eight of the 24 fields awarded are producing. Would you say the exercise has been successful? To meaningfully assess performance of the awarded field, these fields need to be properly classified to understand the reason for their non-attractiveness. Again, being the first marginal field allocated, applicants might not have appreciated the true state of the fields before acquisition. By all standards, eight out of 24 is about 33 percent success rate, which of course may be considered a failure. But if reclassification is done based on viability analysis, eight out of truly viable fields may mean good success. Production companies’ field performance appraisal processes are usually influenced by both production capacity and operating/production cost. This is why wells drilled and developed with poor contribution factor were “marginalised.” Cost of production depends on various factors amongst which are locations of field, community activities, etc. The decision process results in the abandonment of wells not favoured. Government in its wisdom decided that to increase production, and to encourage local participation, classified

wells based on the following into marginal or nonmarginal: ? Fields owned by major inter national oil companies and state oil company (NNPC), which have remained nonproducing for over 10 years. ? Fields not under development due to marginal economics for major oil

As you rightly noted, one of the objectives of the exercise is to promote indigenous participation in the upstream sector of the petroleum industry. Ten years down the line, has this objective been achieved? Oil and gas exploration and production business is no kiddies’ joint. The business

Production companies’ field performance appraisal processes are usually influenced by both production capacity and operating/production cost

operators and high fiscal terms. ? E x p l o r a t i o n discoveries but no appraisal activities. These may be matured and exploited fields that have been depleted and will require additional investment to improve on their yield. Again, operating cost is a function of overhead and expected return on investment by shareholders.

model required to succeed in the area is not a very familiar tuff for Nigerian businessmen who are used to short term return period based on contract business and political patronage. Exploration and production is usually a medium to longterm business investment model that is subject to international terms. To make a fair assessment of the participation success, the

backgrounds of the awardees need to be known. The few that succeeded to get first oil are being operated by professionals that came out of the IOCs and established businessmen in Oil and Gas with good background. What challenges do you think marginal operators face that made majority of the fields not producing? The problems are a combination of technical, financial and business issues. Technically, some of the fields will require application of modern appraisal technology to improve on the economics to make them attractive to financiers, while ownership structure of the companies can also be responsible for some of the challenges. Most Nigerian businesses are built on glorified sole proprietorship masquerading as corporations. The idiosyncrasies of these men discourage professionals from working with them. These men are not willing to partner with others, but will rather want a king and subjects kind of relationship. This approach of course does not lend itself to financing from well-established international financial institutions used for such deals. Until lately, financing for such projects usually came from the outside, as the local banks were not liquid

enough to undertake such ventures. There are different applicable fees in the current bid round. Does this process not make it exclusive to a few? The fees again may discourage well-meaning professionals whose financial capacity may not be robust enough even in partnership. This will require their reaching out to the moneybags, who, again, may ultimately frustrate the whole exe r c i s e f o r t h e aforementioned reason. The selected applicants are to be sent to the Minister for approval. Would it not call to question the issue of transparency? In principle, this should not be a problem if the evaluation is by objective rather than subjective criteria. Where overwhelming political consideration is used with little consideration on merit, we might end up in the same situation as the 2003 licensing round. Funding appears to be a constraint for the marginal field operators. How best can local banks assist operators to bring their fields into production? The local banks are beginning to brace up to CONTINUES ON PAGE 13


Focus

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Oil tank farm

‘Marginal fields should be awarded on merit’ CONTINUED FROM PAGE 12

energy projects financing, and have created relationships with foreign financial institutions after the power project financing. This time promises to be better as they have gained some experience in packaging such deals. Inadequate technical expertise in the industry means that operators need to invite technical partners from abroad. Is it not a n e g a t i o n o f t h e government’s local content initiative? Oil and gas exploration and production projects will always require technical alliance whether in Nigeria or in the western world. However, the extent of foreign involvement will depend on the background of the team members. If the award again is skewed in favour of politicians who will only respect expatriate workers, then of course, they will need help thereby defeating one of the key objectives. When experienced Nigerian professionals are integrated into the teams, less foreign involvement will be the case. Like I said, a little expatriate injection is not bad as oil and gas exploration is a business without boarders

How best do you think the government should accommodate more indigenous participation in the oil and gas industry? Developing a well thought out model to ameliorate the aforementioned challenges by the responsible government agencies will go a l o n g w a y. C r e a t i n g conditions that will encourage partnerships and joint venturesby controlling equity shareholding may help. Again, liberal fiscal regime for new entrants with performance standard as a condition for continued support can be helpful as well. Government can provide some form of time-

If the award again is skewed in favour of politicians who will only respect expatriate workers, then of course, they will need help thereby defeating one of the key objectives

dependent and performancebased guarantees, which should also be explored. How often do you think the marginal field bid round should be held? In my opinion, three yearly bid round may be more appropriate. In an emerging economy like ours, where entrepreneur and investors emerge frequently, too much gap between bid rounds might cause diversion of investible funds into other areas before the bid rounds are held. However, such gap is important to assess the success of the previous rounds before embarking on another. Awardees who are off schedule may relinquish their

Heritage Oil: OML 30 producing 15,600bpd CONTINUED FROM PAGE 1 monthly basis going forward. Meanwhile installation of gas compressors, refurbishment of equipment, statutory inspection and testing of all pressure vessels, and inspection of all wellheads and pipelines continue to support well optimisation. Believing that this should result in further increases in production, Heritage added that the Commencement of development drilling remains on track for the second half of the year. In November 2013, Heritage announced that Shoreline Natural Resources Limited had been in discussions with relevant government departments in Nigeria about its tax status.

Post period-end these discussions have concluded successfully. Shoreline and Heritage are currently quantifying the impact and expect the benefit of this to be recognised in the 2013 year-end results. As previously announced, Shoreline Power Company Limited exercised its call option to acquire a 30% economic interest in Shoreline. Completion of the transaction is expected imminently, following which Heritage will have an effective working interest in OML 30 of 30.71%. On completion, Heritage will receive cash of $31.5 million and the balance will be provided by way of an interest bearing, secured loan from Heritage to Shoreline Power. Mr. Tony Buckingham, Chief Executive

Officer, commented: “OML 30 operations are progressing in line with expectations, providing significant revenues and cash flow to Heritage which should enable the company to achieve its goal of paying a sustainable dividend stream to shareholders. Our interest in OML 30 will be used as a platform to grow and obtain additional interests in Nigeria and in other core areas.” Heritage Oil is listed on the Main Market of the London Stock Exchange and Heritage Oil has a further listing on the Toronto Stock Exchange. Heritage Oil is an independent upstream exploration and production company engaged in the exploration for, and the development, production and acquisition of, oil and gas internationally.


Finance

14

Divergent reactions trail Sanusi’s suspension from CBN … Allegations against NNPC is misleading, embarrassing — NLC …Suspension, dangerous to economic devt — PENGASSAN MICHAEL EBOH

NNPC building, Abuja

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he decision by the Presidency to suspend Mallam Sanusi Lamido Sanusi, as Governor of the Central Bank of Nigeria, CBN, for official impropriety has been described as a welcome development, and is good for the countr y ’s financial markets and the economy in general. This is the view of some e n e r g y, e c o n o m i c a n d financial experts who spoke to Sweetcrude, even as some others, condemned the suspension, saying it is a pointer to the fact that the Presidency is not sincere in the fight against corruption. The latter ’s opinion is against the backdrop of Sanusi’s comments over the non-remittance of about $20 billion into the Federation Account, by the Nigerian N a t i o n a l Pe t r o l e u m Corporation, NNPC. Specifically, the Nigeria Labour Congress, NLC, said that in saner climes, Sanusi was expected to have turned

in his letter of resignation the next day for getting the figures wrong, thereby misleading the public and for embarrassing the government. The NLC maintained that the activities and utterances of Sanusi, before he was suspended, showed that he did not do his homework well, saying he ought to have resigned earlier. Abdulwaheed Omar, NLC President, said, “By the time the dust had settled, Sanusi had quoted three different figures as the alleged sum not accounted for by NNPC, earning him a quiet rebuke by the Senate which is investigating the alleged fraud. “In saner climes, Sanusi was expected to have turned in his letter of resignation the next day for getting the figures wrong, for misleading the public and for embarrassing the government, his excuse of poor communication between the relevant institutions in question notwithstanding.

The least expected of him was a public apology. We are not sure if he did either of the two until his removal was announced in a typical Nigerian-government style.”

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m a r, h o w e v e r, condemned the sudden removal of the former CBN governor. He said, “While we hold Sanusi accountable for not doing his homework properly before going public on an issue as sensitive as this, especially considering the sum involved, we believe the process of his removal is patently flawed and ridicules due process as well as contemptuous of the Act establishing the CBN. It is capable of discouraging future whistle blowers in government as well as casting a pall on government’s fight against corruption, none of which is good for the image of the government at the moment.” A g r e e i n g , M r. D a v i d Adonri, Chief Executive Officer, Lambeth Trust and

The NLC maintained that the activities and utterances of Sanusi, before he was suspended, showed that he did not do his homework well, saying he ought to have resigned earlier Investment Limited, wondered why no individual in the Ministry of Petroleum has been suspended for proper investigations to be conducted in spite of grievous allegations of kerosene subsidy fraud. He said, “I believe CBN is an institution with a functioning Board. The Financial Reporting Council of Nigeria, FRCN, may need to prove that Sanusi acted beyond his authority and failed to obtain approval of the Board where necessary before undertaking those financial activities over

which he is being accused of recklessness. “If there is evidence that Sanusi stole public funds, his prosecution will be more justified than a suspension geared towards silencing him amidst ongoing investigation of monumental fraud in NNPC. “A central bank whose fate rests in the hands of politicians especially in a corruption-infested economy will certainly under deliver. A Central Bank whose key personnel are prone to harassment by politicians CONTINUES ON PAGE 15


Finance

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Banks at risk over power sector funding — Aig-Imoukhuede

Geregu-Power-plant-414-MW

MICHAEL EBOH Former Managing Director, Access Bank Plc, Mr. Aigbojie Aig-Imoukhuede, has expressed concern over the viability of the recently privatised power sector. He warned that a number of the banks that financed the acquisition of the privatised assets of the Power Holding Company of Nigeria, PHCN, risk losing their funds. Aig-Imoukhuede, who spoke at the KPMG Alumni Forum in Lagos, with the theme: ‘Leadership, growth and succession,’ noted that

the banks failed to take into cognizance the apparent problems in the power sector, while a number of them chose to ignore the issues that appears to be stifling growth in the sector. “There are two things that are very critical to the success, growth and development of the power sector; one of them is the issue of gas and the other is transmission,” he said. According to him, the fact that issues of gas and transmission did not feature at any point in the privatisation process, has put the banks in a dangerous

situation. He specifically noted that the banks that will be affected are those that served as equity loans providers. “In my opinion, there is going to be trouble for the banks, because these things were there for these financiers to know, yet it was ignored,” he added. He, however, noted that despite the fact that a number of the banks will have their fingers burnt, the power sector, will in the long run be a very profitable sector. He said, “Things will get

rough for the banks and the power sector, but it will certainly be a profitable sector, and I must state that it will take the virtue of some people.” Aig-Imoukhuede further stated that it is profitable investing in the Nigerian oil and gas sector, especially in providing financing for indigenous investors going into the oil industry. He noted that during his time in Access Bank, the bank focused on indigenous companies in the oil sector, partnering with the firms in major areas of their operations.

Divergent reactions trail Sanusi’s suspension from CBN CONTINUED FROM PAGE 14

cannot be professionally competent. Lamido Sanusi’s suspension as CBN Governor is a very dangerous precedent for financial sector stability.” Also speaking, Mr. Seyi Gambo, National Public Relations Officer, Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, said the timing of the suspension is wrong and shows sign of frustration and desperation. He said, “Mr. President is not inspiring the populace that voted him to power. He is more loyal to the cabal

around him than the electorate that not only campaigned but voted for him. How will the story have fitted if Sanusi tenure was allowed to finish, then he is persecuted? “The voice of the people is the voice of God. Mr. President should understand that if he performs and fights corruption, no amount of opposition can ridicule him. But this action on Sanusi is like undermining the whistle blower. You can’t explain it away with a Presidential chat.” But Dr. Austin Nweze, an Economist and lecturer at the Lagos Business School, Pan Atlantic University, argued that Sanusi’s suspension was good for the financial markets and the

economy in general. He maintained that Sanusi’s actions amounted to sabotaging the government that he was supposed to work with in good faith. He said, “I have been saying this overtime that the kind of central bank Governor that Nigeria needs should be a person of good character, professional of high repute. “I was in a forum where the Minister of Finance complained and lamented that the CBN Governor never consulted her on the issue of NNPC and Federation Account before going to the press. Such a Governor should not be there. The earlier he goes the better for the nation.”

Iran increases electricity price by 25%

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ran has increased the electricity price by 25 percent since the current Iranian calendar month of Esfand (started on Feb. 20), Iranian energy minister, Hamid Chitchian said, the country’s IRIB news agency reported. Chitchian went on to say that the new price will be applied in the first electric bill in the next Iranian calendar year (to start on March 21), which also includes the current month’s electric consumption. In late September 2013, the managing director of Iran’s Power Generation Tr a n s m i s s i o n a n d Distribution Management C o m p a n y ( TAVA N I R ) , Homayoun Haeri said that electricity production in Iran costs three times more than its income. Iran should increase an electricity price, he said, adding that reviewing the electricity power price is necessary for saving the country’s electricity power industry. Haeri went on to note that generating each kilowatt hour of electricity costs 680 rials (about 0.027 cents based on an official rate of 24,800 rials per each USD), while it is being sold for 430 rials (about 0.017 cents). Some 266 rials (some 0.010 cents) of that amount is being paid to TAVANIR. Iran’s Subsidies Organization receives 166 rials (about 0.006 cents) of the figure, he added. Currently, some 28 million users are connected to Iran’s national electricity power grid. Iran also trades power with Turkey, Azerbaijan, Armenia, Turkmenistan, Pakistan, Afghanistan, Syria, and Iraq. The countr y seeks to become a major regional exporter of electricity and has attracted more than $1.1 billion investments for the construction of three new power plants.

Iran nuclear power plant


Technology

16

The Solar Car JIM REX-LAWSON MOSES

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solar car is a solar vehicle used for land transport.

Solar cars combine technology typically used in the aerospace, bicycle, alter native energy and automotive industries. The design of a solar vehicle is severely limited by the amount of energy input into the car. Most solar cars have been built for the purpose of solar car races. Since 2011 also solar-powered cars for daily use on public roads have been designed. Solar cars are often fitted with gauges as seen in conventional cars. To keep the car running smoothly, the driver must keep an eye on these gauges to spot possible problems. Cars without gauges almost always feature wireless telemetry, which allows the driver’s team to monitor the car ’s energy consumption, solar energy capture and other parameters

and free the driver to concentrate on driving. Solar cars depend on PV cells to convert sunlight into electricity. Unlike solar thermal energy which converts solar energy to heat for either household purposes, industrial purposes or to be converted to electricity, PV cells directly convert sunlight into electricity. When sunlight (photons) strikes PV cells, they excite electrons and allow them to flow, creating an electrical current. PV cells are made of semiconductor materials such as silicon and alloys of indium, gallium and nitrogen. Silicon is the most common material used and has an efficiency rate of 1520%. Solar array The solar array consists of hundreds of photovoltaic solar cells converting sunlight into electricity. In order to construct an array, PV cells are placed together

to form modules which are placed together to form an array. The larger arrays in use can produce over 2 kilowatts (2.6 hp). The solar array can be mounted in several ways: ?Horizontal. This most common arrangement gives most overall power during most of the day in low latitudes or higher latitude summers and offers little interaction with the wind. Horizontal arrays can be integrated or be in the form of a free canopy. ? Ve r t i c a l . T h i s arrangement is sometimes found in free standing or integrated sails to harness wind energy. Useful solar power is limited to mornings, evenings, or winters and when the vehicle is pointing in the right direction. ?Adjustable. Free solar arrays can often be tilted around the axis of travel in order to increase power when the sun is low and well to the side. An alternative is to tilt

the whole vehicle when parked. Two-axis adjustment is only found on marine vehicles, where the aerodynamic resistance is of less importance than with road vehicles. ?Integrated. Some vehicles cover every available surface with solar cells. Some of the cells will be at an optimal angle whereas others will be shaded. ?Trailer. Solar trailers are especially useful for retrofitting existing vehicles with little stability, e.g. bicycles. Some trailers also include the batteries and others also the drive motor. ?Remote. By mounting the solar array at a stationary location instead of the vehicle, power can be maximised and resistance minimized. The virtual gridconnection however involves more electrical losses than with true solar vehicles and the battery must be larger. The choice of solar array geometry involves an optimization between power output, aerodynamic

resistance and vehicle mass, as well as practical considerations. For example, a free horizontal canopy gives 2-3 times the surface area of a vehicle with integrated cells but offers better cooling of the cells and shading of the riders. There are also thin flexible solar arrays in development. Solar arrays on solar cars are mounted and encapsulated very differently from stationary solar arrays. Solar arrays on solar cars are usually mounted using industrial grade doublesided adhesive tape right onto the car ’s body. The arrays are encapsulated using thin layers of Tedlar. Some solar cars use gallium arsenide solar cells, with efficiencies around thirty percent. Other solar cars use silicon solar cells, with efficiencies around twenty percent. Battery The battery pack in a typical solar car is sufficient to allow CONTINUES ON PAGE 17


Technology

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The Solar Car

Solar array

CONTINUED FROM PAGE 16

the car to go 250 miles (400 km) without sun, and allow the car to continuously travel at speeds of 60 mph (97 km/h). Motor The motors used in solar cars typically use less power than a toaster, about 2 or 3 horsepower, yet solar cars can attain the same speed as a typical family car (100 miles per hour (160 km/h)). Races The two most notable solar car races are the World Solar Challenge and the North American Solar Challenge, overland road rally-style competitions contested by a variety of university and corporate teams. The World Solar Challenge features a field of competitors from around the world who race to cross the Australian continent, over a distance of 3,000 kilometres (1,900 mi). Speeds of the vehicles have steadily increased. So, for example, the high speeds of 2005 race participants led to

the rules being changed for solar cars starting in the 2007 race. The North American Solar Challenge , previously known as the ‘American Solar Challenge’ and ‘Sunrayce U S A’ , f e a t u r e s m o s t l y collegiate teams racing in timed intervals in the United States and Canada. This race also changed rules for the most recent race due to teams reaching the regulated speed limits. The Dell-Winston School Solar Car Challenge is an annual solar-powered car race for high school students. The event attracts teams from around the world, but mostly from American high schools. The race was first held in 1995. Each event is the end product of a two -year education cycle launched by the Winston Solar Car Team. In odd-numbered years, the race is a road course that starts at the Dell Diamond in Round Rock, Texas; the end of the course varies from year to year. In even-numbered years, the race is a track race around the Texas Motor

Speedway. Internal error: Invalid file format. In-line.WMF The South African Solar Challenge is an epic, biannual, two-week race of solar-powered cars through the length and breadth of South Africa. Teams will have to build their own cars, design their own engineering systems and race those same machines through the most demanding terrain that solar cars have ever seen. The 2008 race proved that this event can attract the interest of the public, and that it has the necessar y inter national backing from the FIA. Late in September, all entrants will take off from Pretoria and make their way to Cape Town via the N1, then drive along the coast to Durban, before climbing the escarpment on their way back to the finish line in Pretoria 10 days later. In 2008 the event was endorsed by International Solarcar Federation (ISF), Fédération Internationale de l’Automobile (FIA), World Wildlife Fund (WWF) making it the first Solar Race

There are other distance races, such as Suzuka, Phaethon, and the World Solar Rally. Suzuka is a yearly track race in Japan and Phaethon was part of the Cultural Olympiad in Greece right before the 2004 Olympics

to receive endorsement from these 3 organizations. There are other distance races, such as Suzuka, Phaethon, and the World Solar Rally. Suzuka is a yearly track race in Japan and Phaethon was part of the Cultural Olympiad in Greece right before the 2004 Olympics . Speed record Guinness World Records recognize a land speed record for vehicles powered only by solar panels. This record is currently held by the University of New South

Wales with the car Sunswift IV . Its 25-kilogram (55 lb) battery was removed so the vehicle was powered only by its solar panels. The record of 88.8 km/h (55.2 mph) was set on January 7, 2011 at the naval air base HMAS Albatross in Nowra, breaking the record previously held by the General Motors car Sunraycer of 78.3 kilometres per hour (48.7 mph). The record takes place over a flying 500 metres (1,600 ft) stretch, and is the average of two runs in opposite directions. E m a i l : jimlaw2004@gmail.com 08027181717


Gas

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Compressed Natural Gas filling station

Over 3,000 vehicles ran on CNG in 2013 M Kunle KALEJAYE

o r e vehicles i n Nigeria h a v e begun to embrace the use of the compressed natural gas, CNG, to power their engines. About 3,000 vehicles in Benin City, Edo State are said to have switched over to CNG in view of its comparative advantage over premium motor spirit, PMS, also known as petrol. This claim was made by the General Manager of Green G a s L i m i t e d , M r. AnirudhNarula, while reflecting on the growing benefits of CNG. Narula maintained that the efforts of GGL has given motorist a veritable avenue to save money as it has been proved that a shift from petrol to CNG can result in reduction of cost of travel by half. This is premised on the

Giving a simple illustration of a journey from Lagos to Benin City covering 320km, he said the cost of the journey on petrol is about N6,208 against N2,093, on CNG is thus giving a saving of N3,275

current selling price of N97/litre of petrol compared with N55/Standard Cubic Meter (SCM) of gas, the equivalent of a litre being offered by GGL to vehicles running on CNG. Giving a simple illustration of a journey from Lagos to Benin City covering 320km,

he said the cost of the journey on petrol is about N6,208 against N2,093, on CNG, thus giving a saving of N3,275. According to him, motorists in Benin, and its environs have been enjoying the savings following the inauguration of CNG

stations in the ancient town, aside from other ancillary gains of using compressed gas as vehicular fuel. He also explained that GGL has inaugurated scores of stations in Benin City and is now expanding to highways and other cities to provide avenues through which interested motorists can convert their vehicles to use CNG and re- fuel as well. According to him, more CNG stations are being constructed in 10 different locations along the BeninWarri Expressway; BeninAbuja Expressway; BeninLagos Expressway; and in Warri metropolis, all in a bid to make access to CNG better for existing and prospective motorists. Narula further argued that there is a huge potential in the country to convert more vehicles to use CNG despite government subsidies on petrol. He maintained that CNG is a better option as vehicular fuel, considering the huge

gas resources of the country, stressing that it is safer, efficient, cleaner and economical to use as autofuel. He noted that GGL’s initiative in promoting access and use of CNG is a unique feat and in line with the transformation policy of President Jonathan- which harps on the exploitation of abundant natural gas reserves for the benefit of the people. “It is instructive to note that of the three companies given the license to pioneer CNG revolution in 2007, only NIPCO showed enough commitment and this culminated in the joint venture scheme that led to the incorporation of GGL”, he said. He noted that pioneering such a venture is a big challenge, the support of NGC has spurred GGL to double its efforts to enable the citizenry enjoy the benefits of the environmentfriendly auto fuel.


Solid Mineral

19 Kaduna wants pension funds invested in solid minerals Chris OCHAYI

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Mining site

Mining Fund will fast-track development —Adie

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he Chairman, Solid Minerals Development Fund, Mr. Linus Adie, in this interview with GABRIEL EWEPU, explained that the Fund will facilitate the expected development of the mining sector and turn it into a money spinner in no distant time. Excerpts: What are the objectives of the Solid Minerals Development Fund? The federal government in its anxiety to fast-track development in the mining sector decided to create an operational vehicle that will be devoid of the civil service bureaucracy. The Fund in essence is supposed to be the engine of growth of the sector, because if you look at the mandate of the Fund it encompasses all aspects of mining, but basically it is for generation of geosciences information, facilitating policies, that will fast-track development of the sector, to assist the operators, artisanal and small scale

miners by the creation of extension services, like we have in the Agriculture sector, it is to build human capacity within the mining sector. Finally, it is supposed to look at the infrastructure in the mine sites. How much was the takeoff grant for the Fund you received from the government? It was not much, just N100 million, which was to purchase computers, hire an office; and usually the takeoff grant is just for little things, and have an office mainly. The main money for this was dedicated Funds like the Natural Resources Fund, which the Ministries of A g r i c u l t u r e a n d Wa t e r Resources are enjoying now. Since this Fund was established, has it made any meaningful impact in the activities of the sector? It is now that we have just started activities that will lead to the impact expected. In the structure of mining itself, if you start anything you do not expect immediate

impact, because a project can be started today and it will start yielding fruits only after eight years and this is globally and not only in Nigeria. So in mining, you cannot talk of impact immediately. Burkina Faso that is mining today started building their policies and others about 16 years ago, and it took Ghana 12 years. Are you then saying that the mining sector in Nigeria has prospects as a money spinner? Of course, mining has a wonderful characteristic, and if you are talking about artisanal and small scale mining, which is all over Nigeria at the moment, it can be developed to create jobs. Take for example, in this country people imported cement in the past and the whole ports were blocked; but today, we are proud to say that cement from Nigeria is being exported, and these are the gains of mining. But the ministry started looking for limestone all over the country several years ago.

The Dangote Cement Company at Obajana, the limestone was discovered several years ago, it was when one of the administrations brought consultants from Bulgaria to start drilling that Dangote finally took over. Today, it has employed so many people, and making so much money. That is the structure of mining, and it is not an overnight thing. Ta l k i n g a b o u t t h e bottlenecks in the sector, how can these challenges be handled in terms of financing them? It is true, mining is a business, and when you talk of trickle nobody is thinking of giving anybody cash. A group of South Africans living in America decided to collect money to develop a Fund to develop their mining s e c t o r, c a l l e d A f r i c a Development Fund. Today, it is a very big Fund. What was the aim? The aim was just like what we are trying to do, to help operators to grow including artisanal miners. The prospects of mining are very high, and Nigeria has been rated by several international economies that it is going to be a giant, this means there will be lot of construction and business boom.

BUJA: Governor Ramalan Yero of Kaduna State has called for the investment of the pension funds into the solid minerals sector, with a view to reducing Nigeria’s over dependence on oil and gas. Yero made the call in Kaduna while receiving a delegation of the Board and management of the Nigeria Extractive Industries Transparency Initiative, NEITI that paid him a visit in Kaduna. He expressed regrets t h a t Pe n s i o n f u n d s deposited in most commercial banks were largely lying dormant, and should be channeled to long term investments in any sector that could reduce Nigeria’s dependence on oil and gas. This, he argued, will mobilise the economy towards active production and jobs creation. The Governor identified the solid minerals sector as one area where the Pension funds would serve as the engine of investment and tools for long term economic growth. He pledged to share the k n o w l e d g e a n d information on how pension funds could become the pillar of investments drive for the solid minerals industry w i t h s t r a t e g i c stakeholders. He also called on NEITI to give the same attention that it has shown in the oil and gas sector to the solid mineral industry, and embark on similar a d v o c a c y a n d enlightenment towards the development of the sector. In her remarks, the Executive Secretary of NEITI, Hajia Zainab Ahmed, explained that NEITI has been working closely with the Mines and Steel Ministry to develop a legal frame work similar to the Petroleum Industry Bill for the Solid Minerals Industry. The new proposed legislation for the Solid Mi ne ra ls I nd us t r y i s designed to provide clear legal road map required to drive the reforms and investment potentials in the sector.


Power

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Electricity: Reps urges consumers to utilize complaint offices

…As Eko Disco earmarks N42 billion to improve network Chris OCHAYI and Kunle KALEJAYE

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BUJA : The H o u s e Committee on Po w e r h a s u r g e d electricity consumers to seek redress for poor service delivery through effective utilization of the forum offices being commissioned in distribution centres across the country. Mrs. Abike Dabiri-Erewa, who is a member of the Committee, charged N i g e r i a n s , p a r t i c u l a r l y, Lagosians to take advantage of the forum office which it provided to ensure that consumers have a say in what happens with regards to electricity supply. The development comes on the heels of plans by the Eko Distribution Company (EkoDisco) to spend over N42 billion to improve its network over the next five years. The lawmaker, who gave the charge while speaking during the official commissioning of the Eko for um office in L agos, maintained that consumers have the right to complain and seeks redress over poor service. She expressed hope that the newly commissioned edifice, would take care of some consumer issues like billing, metering. According to her, “one thing you should know is that if you have a problem with your meter, they should get it solved within five days. But I do not know whether that is happening, now with the setup of this Eko forum I hope that will happen. And I think one of the major problems of consumers has to do with metering, all of sudden meters have disappeared. “They are supposed to put meters in your houses but they tell you they do not have them, especially in rural areas. So I want you to go to the rural areas and ensure that meters are supplied so that the billing problems will stop.

Electricity powerline

“But most important is the awareness that this service is there, and let everybody take advantage of this service that NERC is providing, because more often than not we just discovered we are not asking questions. And NERC is telling you through Eko Disco that it is your right to seek redress. It is your right to complain. It is your right to be served. And I know that this will be done under this

district” she said. In line with government’s transformation agenda for the power sector, the office is expected to protect vulnerable electricity consumers from exploitation by service providers. In his remarks, the Chairman of NERC, Dr Sam Amadi said the Eko office was the second level of appeal in the chain of consumer complaints, adding that issues beyond the forum were to be handled at the final appeal stage by the NERC. Amadi, who was represented by the Commissioner, Government and Consumer Affairs, of NERC, Dr Abba Ibrahim, stated that the office would significantly reduce the incidence of protracted and expensive litigations. The chairman also congratulated the newly inaugurated forum members

who had been chosen to serve in this national assignment. “ Just a year ago the Ikeja customer ’s forum was commissioned; this shows the commitment of NERC towards effective consumer’s right on electricity supply chain to reform the sector.“ The focus is for the benefit of electricity consumers in Nigeria, there is history of very poor electricity service and high level of inefficiency within the electricity sector. “Which calls for the reform which commenced in 2001, while most of the agenda has been achieved by privatising the power sector,” he added. He said that the commissioning of the customers forum is to ensure that electricity customers had value for their money. Mr Oladele Amoda, the Chief Executive Officer, EKEDC said that the

company was poised to rules and regulations that exhibited customer ’s best practice and satisfaction. Amoda, however, urged customers within the network to avoid contributing money for repairs of transformers, cable, and power installations. According to him, vandalism has been a major challenge of the company and I urge all customers to join us in the fight against vandals. “We have told our customers that henceforth nobody should contribute money for anybody be it staff in the name of buying or repairing of transformers, cable and power installations,” he said. He said that the focus of the company was to have additional 400 megawatts off-grid power in the shortest possible time.


Power

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IKEDC partners security agencies to curb vandalism Kunle KALEJAYE

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Electricity workers

Power generation may exceed 4,000MW in June Kunle KALEJAYE

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h e r e a r e indications that p o w e r generation in Nigeria may exceed 4,000 megawatts by June, sequel to the six-month ultimatum given by President Goodluck Jonathan to the Ministry of Power to ensure efficient generation, transmission and distribution of electricity across the country. As it is, the target may be exceeded because the nation’s four hydro power stations, K ainji, Jebba, Shiroro, and Zamfara are expected to be at peak operation as a result of the rainy season. At that period of the year, the water levels at River Niger, Kaduna River, and Bunsuru River are expected to increase, thereby enabling the plants to work at full capacities. Kainji power station, the biggest hydro station in the country, during the rainy season generates 800

megawatts (MW), Shiroro 600MW, while Jebba and Zamfara generate 540MW and 100MW respectively. As a result, power generation is expected to increase by 2,040MW during this period of the year. Recall that in response to President Jonathan’s ultimatum, the Minister of Power, Prof. Chinedu Nebo, said the current administration is keen on achieving an obvious result from the power sector reform. He had therefore charged”… all the principal players to be committed to ensuring that power supply to our customers is significantly and visibly improved by June this year as already directed by Mr. President. “G o v e r n m e n t w i l l n o longer tolerate any excuse of non-performance from any of the sector players from both the ministry particularly and our new private sector partners.” After the rains But the gains of the rainy

season may be lost again afterwards, except the 10 National Independent Power Projects, NIPPs are completed on schedule. Eight of these projects are open cycle gas turbine plants and the other two are combined cycle gas turbine plants. Below are the states of the plants: The Alaoji Power Station in Abia State, has a combined cycle gas turbine with 1074MWs capacity but currently operating below capacity due to evacuation delays and securitization for Shell, according to Niger D e l t a Po w e r H o l d i n g Company, NDPHC. For Calabar and Egbema Power Stations (Simple cycle gas turbine), the plants are still under construction with 158MW and 138MW respectively. Geregu II Power Station in Kogi state was completed in 2012, but commenced operation in the first quarter of 2013, contributing 434MW to the national grid. For the Ibom Power Station, overall generating capacity

is technically constrained by existing transmission and distribution facilities of PHCN and the Transmission Company of Nigeria (TCN), to only 60MW but has 190MW capacity. Although the Ihovbor Power Station with 450MW capacity was scheduled to be completed between 2012 and 2013, but NDPHC said it can’t be launched due to delays in evacuation capacity. The Olorunsogo II Power Station (675MW), although completed in 2012 is also working below capacity due to gas supply issues. Furthermore, the 225MW Omoku II Power Station is still under construction, indicating that the contractor, Rockson Engineering failed to meet the 2013 completion deadline. Built and operated by China Machiner y Engineering Corporation, the Omotosho II Power Station with 450MW capacity was commissioned in 2013 by President Jonathan, but currently generates 375MW.

he Management of t h e I k e j a E l e c t r i c i t y Distribution Company (IKEDC) has entered into a partnership with security agencies in its quest to stem the rising tide of vandalism of its equipment and installations across the state. During a courtesy visit to the Director of the State Security Services, and the Lagos State Commissioner of Police, the Managing Director/Chief Executive Officer of the Company, Engr. Abiodun Ajifowobaje lamented the spate of vandalism in the zone. Ajifowobaje, who led his management team, said the incidence had become worrisome, as the company recently replaced equipment in 42 vandalised Distribution Substations worth over N11 million in January. The visits were part of IKEDC’s ongoing stakeholder engagement activities designed to galvanise the support of its customers, as the company continues to work towards enhanced power supply through continuing investments, infrastructure upgrade and capacity building. A l r e a d y, a b o u t 1 1 transformers have been reportedly vandalized within the IKEDC network in February. Ajifowobaje explained that investigations had shown that cases of vandalism are prevalent in the highbrow areas of Ikeja. “ We m u s t s a y w e appreciate the support we have been receiving from the SSS, so far. However, we need more assistance from the agency to check the cases of theft and damage to IKEDC’s facilities, as this will further boost our efforts at providing the best service possible to customers on our network,” he said. He also called for prompt prosecution of persons involved in impersonating IKEDC staff or vandalising the company’s equipment. In his response, the Director of SSS, Mr. Achu Ben Olayi, promised to assist the company to stop vandalism in Lagos State. Describing vandals as enemies of the nation, he noted that all hands must be on deck to curb the activity of vandals nationwide.


Insurance

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Operators must consolidate on all fronts to grow business

—Soladoye

Yemi Soladoye

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r. Ye m i Soladoye, Managing Director of RiskGurad Africa, is an insurance expert and consultant. In this interview with ROSEMARY ONUOHA, he states that insurance operators must re-strategise if the business of insurance is to grow. To what extent has oil and gas risks underwriting impacted on the performance of insurers? When insurers talk about oil and gas insurance, the interest of all of them is to grow their premium. You hear them say ‘our premium last year was N10 billion, this year it is N15 billion.’ But the N15 billion is from the same traditional classes and route that we are all used to. So I am saying that insurers should expand their business to for instance, bancassurance, which means using banks to sell insurance to the retail banking public, or appoint franchise marketers which mean entering into strategic alliances with organisations like Shoprite to sell insurance. With such, they will be developing the market. Local content on oil and gas risk will only grow the premium income, but will not expand the market. Retail insurance is the way to go for any insurance company that knows what it is doing. Any society where retail insurance does not take prominence, then insurance in that system has not really

When oil and gas content must have reached its saturation point; when the regulator will continue to be more and more stringent in its regulation, what are we to do?” It is only companies that are strategic and visionary that can toe this line. Everybody is looking at ‘how can I outsmart the other person on Head of Service account, on oil and gas?’ An insurance company that is working to succeed today should also think of tomorrow

developed. Retail insurance enables stable financial account, against volatile wholesale market; cost effective business; as well as direct impact and relationship with your customers. Retail is not only about direct underwriting alone. There are about 14 avenues of distributing insurance at the same time and all these have to be implemented by i n s u r e r s . J u s t l i ke I recommended in the Market Development and Restructuring Initiative, MDRI, in 2009, the issue of agents to brokers is a development which many other countries have embraced. There is nothing stopping an insurance broker from having about

200/300 agents. Brokers traditionally pursue the w h o l e s a l e m a r ke t b u t , imagine a broker on Opebi Street, who goes to Abuja to pursue the Nigerian N a t i o n a l Pe t r o l e u m Corporation, NNPC, or Head of Service insurance, whereas the people residing at Opebi have need for insurance, so agents can take care of them. So looking at the 14 avenues of marketing retail insurance, you will know that as an industry, we are not utilising the opportunities available to us and unless we do that, the system cannot grow. The management and board of any insurance company that is not deep into retail business should go and re-strategise because in the n ex t t h r e e y e a r s , a n y insurance company that is

not in retail will find itself far behind. What are the extraordinary things that insurers must do to develop the market? The major challenge on the part of insurers is that they are all busy focusing on short term business orientation. Retail insurance requires the board and management sitting down to strategise about the long term. They should ask such questions like “When oil and gas content must have reached its saturation point; when the regulator will continue to be more and more stringent in its regulation, what are we to do?” It is only companies that are strategic and visionary that can toe this line. Everybody is looking at ‘how can I outsmart the other person on Head of Service account, on oil and gas?’ An insurance company that is working to succeed today should also think of tomorrow. To what extent will the influx of foreign players into the Nigerian insurance market impact on activities in the sector? Insurance is a universal business; hence there is nothing foreign or local about it. The insurance I am talking about in Lagos is the same they are talking about in Johannesburg, Malawi, and even in USA. The level of success you record in insurance business is a function of the dynamism of the management team, level of customer service you are able to provide, your spread,

and then how you are able to use the competing and complementing benefits of insurance to create strategic alliances with numerous segments of the economy. So if Sanlam or Old Mutual is doing better than any insurance company in Nigeria, it is not because they are foreign companies, it is because we refuse to do the right thing. So if they come with better customer service approach, better products, widespread branch networks, strategic alliances in areas that matter in the system, provide mortgage finance which we are not doing, then they will do better. That takes me to the fact that we have the largest population in Africa, we are the sixth largest country in the world, still when I analyse the 15 largest insurance companies in Africa, no Nigerian company is there. Of a fact, the premium income of the largest insurance company in Nigeria is 50 per cent of the premium of the no 15 in Africa. With countries like Morocco, Algeria, predominantly Muslim countries doing better than Nigeria, then we are to blame for the low level of insurance development in this country. The public all along have shown apathy towards insurance in this country, how can this syndrome be cured? CONTINUES ON PAGE 23


Insurance

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CONTINUED FROM PAGE 22

In fact, the insurance sector is where it is because the public does not have confidence and trust on insurance mechanism in Nigeria. This is historically based on how insurance was presented to them since the promulgation of the Workmen’s Compensation Ordinance of 1942. The first compulsory financial product in the country was from insurance and the second is the motor vehicle third party ordinance of 1945. When all these came and the local underwriters embraced insurance, it was seen as more or less a side business by motor dealers. There was serious abuse and that was why the Insurance Act of 1941 came into effect. When the foreign companies came in the 50s and 60s, the agents that started marketing, especially life insurance products, were selling all-purpose products. If you have headache, they will tell you that you are going to get money. They will tell you that if they steal your car, under a life cover, you are going to get money. Theirs was just to sell their products. So between 1964 and 1974, the image of insurance seriously nose-dived and that was when we had the first pragmatic insurance crash in 1976. So many insurance companies were operating then without being licensed or registered. Because the insurance sector performed woefully, the general public, as typical Nigerians decided to give insurance to God. Instead of appreciating the fact that the message was good and what was probably wrong was the messenger and to come together to say ‘No, we must resist this.’ Nobody did that until very recently, when we have the Insurance Consumers Association of Nigeria put in place. It is still trying to come out and it will definitely come out in big form. On the part of the public, even if your husband or father sells a product and you cannot see the benefit you are going to derive from the product, you are not going to embrace it. I tell people that insurance is a fear product and that fear emanates from this. If the fear of getting compensation from the insurance company is higher than the fear of the risk materializing, then insurance has failed in that direction, and so people will not embrace it which is what we have been experiencing. People go through such fears like ‘anything can happen to my car, anything can happen to my house’ but the fear of

Yemi Soladoye

Operators must consolidate on all fronts to grow business

—Soladoye

They will tell you that if they steal your car, under a life cover, you are going to get money. Theirs was just to sell their products. So between 1964 and 1974, the image of insurance seriously nose-dived and that was when we had the first pragmatic insurance crash in 1976. So many insurance companies were operating then without being licensed or registered getting compensation from the insurance company if they insure is higher than the fear of the risk. Therefore what the insurance companies should have done all these years is to embark on massive insurance education to enlighten the public. Do you know that 60 per cent of educated people

still believe that third party motor insurance is ‘police let me pass.’ So if that is the feeling, then we have failed in a strategic aspect of our job. And unless we can improve, we are not going to get anywhere. However, the public should have come together long ago to say ‘this is what we want. You cannot

be talking of small prints if we the public don’t want small prints. You cannot be giving us what you feel you want to give us. We should be able to say, this is what we deserve as insurance consumers.’ In some countries, when you insure your house and it gets burnt, they give you alternative accommodation until the house is repaired. When you have a car comprehensively insured and the car is stolen or has an accident, they give you a replacement car until the damaged one is repaired. What are some of the avenues of distributing retail insurance? Some of the avenues are the captive agents which is what is being used now, such as insurance companies using their own trained agents. Another one is independent agents, who on their own sell insurance and collect commission. There is also agents-to-

brokers; as well as collaborating with network providers. Also we have mall marketing; as well as the utilities such as using the Power Holding Company of Nigeria, PHCN, o r W a t e r Corporation to market insurance. In using the utilities, as the bills a r e b e i n g distributed, insurance is already built into it. If o r d i n a r i l y, m y PHCN bill in a month is N10,000 a n d I h a v e insurance, the electricity company will give me a bill of N15,000 knowing full well that N5,000 goes into my insurance. These are just to mention a few.


Labour Victor AHIUMA-YOUNG

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ENSION is mounting in the Nigeria’s power sector over the breach of the latest agreement reached between the Federal G o v e r n m e n t a n d organisedlabour on the unpaid benefits of the staff of defunct Power Holding Company of Nigeria, PHCN. This came as a report of the committee jointly set by the government and labour, to monitor the level of payment of terminal and other benefits to the PHCN staff, confirmed labour allegations that most of the workers have not been paid. Following the threat by the National Union of Electricity Employees, NUEE, to shut down the power sector over non-payment of benefits to workers as agreed, victimisation of union leaders contrary to agreement reached among other b r e a c h e s , t h e Fe d e r a l Government through the Minister of Labour and Productivity, Chief Emeka Wogu, summoned a meeting on January 13, 2014, where gover nment and labour reached an agreement. At the end of the meeting it was agreed among others that “bonafide staff are to be paid their severance benefits on or before the end of January2014, admitted casuals to be paid on/before end of March, 2014; progressive payments to be tracked and all pensions should be processed and payments should be effected accordingly. Furthermore, the 7.5% employer pension contributions of July, 2012 to 31st October, 2013, will be paid by the Federal Government (market o p e r a t o r ) . Pa y m e n t o f pension deductions from 1st November, 2013 to date will be paid by the new operators into workers’ Retirement Savings Account, RSA, accounts. “Bureau for Public Enterprise, BPE, and Ministry of Power are to, fasttrack approval and payment of death benefits to beneficiaries within one month. The complaint of victimisation of labour leaders to be handled by the Federal Ministry of Power and BPE in accordance with extant regulations within January, 2014.Workers who are being owed salary arrears and have not been severed, will be paid by the Federal Government and should stay in position until they are paid.”

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Tension mounts over breach of agreement with workers … Defunct PHCN staff still awaiting terminal benefits

Nigerian worker during their day “The allegation of non-payment of entitlement to staff covering July, 2012 should be referred back to the implementation committee for conclusion within January 2014. The implementation committee should set up a verification subcommittee to establish payment of certain entitlements listed in agreement of October 2013, and identify those stations that have paid and those that have not paid. BPE should submit the list of the 483 un-cleared RSA holders to the Technical subcommittee for rectification.” NUEE says no one has been paid However, at the time of this report, the General Secretary of NUEE, Mr. Joe Ajaero, lamented that the content of the agreement was only honoured in breach, saying it was already creating restiveness in the sector. According to him, “Regrettably, since the January 2014 agreement, nobody has been paid a kobo. The only thing that has happened is that the committee that went round the country to monitor and verify payment, has concluded its assignment and confirmed our position that most of the workers have not been paid their benefits. In fact, the members of the committee including BPE were able to confirm that the so-called payment that government officials had been brandishing was only on paper. What they were doing was to sit in the offices and claim that payment has been

made. In everywhere that the committee went to, members were not able to see a state where everybody has been paid. “To worsen the situation, it was also discovered that many people were underpaid in Enugu, Oyo, Yola and others. As we speak, many have their Pension Fund Administrators, PFAs, not credited with a kobo. Even those that would have been paid at the last days of February, we were told that the Director General of BPE was not around to approve the payment. “There is tension everywhere in the industry. The agreement said until people are fully paid, they would not be sacked. Yet, the BPE went ahead to sack them. It is getting to a level where the bubble will burst. Over 1000 labour leaders that were victimised by the BPE and the new owners, as we speak, have not been recalled. It is universal standard that you do not victimize labour leaders over

union activities and we had an agreement to that effect, yet over 1000 of them have been sacked for being union members. All efforts to get their re-instatement, so far have been rebuffed. We have been keeping quiet and exercising patience. But very soon our patience will cease and we will take our destinies in our hands.” Recall that the pending issues as contained in a petition to Minister of Power on December 20, 2013 said “We are constrained to write your office on the flagrant abuse of human and Trade Union rights in the power sector and the criminal silence by those that should have checked these abuses. All the collective agreements entered into by the Union with Government in the power sector have all been violated. As we write, over ten thousand (10,000) workers in the power sector have not been paid a dime as their severance entitlement.


Labour

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Labour leaders Victor AHIUMA-YOUNG

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IGERIA Union of Pe t r o l e u m and Natural Gas Workers, NUPENG, has threatened to cripple Nigeria’s Oil and Gas Sector over increasing unfair labour practices and divestment by International Oil Companies, IOCs, also known as multi-national oil companies. President of NUPENG, Igwe Achese, at the commissioning of Lagos Zonal Office of NUPENG, also accused the IOCs of stalling the passage of the Petroleum Industry Bill, PIB, and called on the National Assembly to put the interest of Nigeria above its members’ interest and ensure the PIB became a reality. According to him, “The casualisation/outsourcing of workers has become a cancer, especially in the oil and gas s e c t o r. T h e U n i o n h a s threatened to call its members on a nation-wide strike without notice, if industrial relations issues on outsourcing and negotiation of Collective Bargaining Agreement, CBA, for our members are not addressed in the multi-national oil companies, especially, Mobil Producing Nigeria, Agip, Chevron and Shell Petroleum Development Company. “The Union re-iterates that the new drive of the oil majors and multi-nationals amount to sabotage and therefore call o n t h e P r e s i d e n t , D r. Goodluck Jonathan to intervene as all efforts by the

NUPENG threatens action over assets divestment, others The Union has threatened to call its members on a nation-wide strike without notice, if industrial relations issues on outsourcing and negotiation of Collective Bargaining Agreement, CBA, for our members are not addressed in the multi-national oil companies, especially, Mobil Producing Nigeria, Agip, Chevron and Shell Petroleum Development Company NNPC and Federal Ministry of Labour had failed. We also kick against the on-going divestment in the oil sector by the multi-nationals, as it often led to job losses and therefore enjoin the government to constitute a team to look into the issue in order to avert industrial unrest. We therefore warn that the Union will go on strike without notice, if the issues are not addressed. Part of the responsibility of governance is to create jobs and protect the jobs that already exist. “It is against this backdrop that we call for the quick passage of the Petroleum Industry Bill that is before the

National Assembly. The quick passage will go a long way to reforming and ensuring transparency in the oil and gas sector. The multinationals are running helterskelter to halt the passage but this must be rebuffed by the National Assembly members because the multinationals are doing it for their selfish interests.” Achese lamented the increasing cases of pipeline vandalism and said “It is a pity that pipelines vandals have refused to change. The recent poor power supply in the nation was attributed to vandalism of the gas pipelines in Escravos area. The nation’s economy still

bleeds with the oil theft from the activities of vandals and we continue to call for the establishment of a Pipeline Protection Agency to be well funded to tackle the problem.” Removing tankers from highways Speaking on the efforts to take tankers off the highways, the NUPENG President appealed to the Lagos State Governor, Mr. Babatunde Fashola, SAN, to give the union land to build a tanker park, promising that once the land is given and the park developed, the issue of petrol tankers parking on the Lagos high way would be a thing of the past. He disclosed that states like Oyo, Cross Rivers, Rivers and others had given the union land to develop Tanker Parks. According to him, “ we wish to again appeal for land for the construction of another park for tankers in order to decongest the roads of tankers going to the depots to load. I want to assure you that once the land is given and developed, there will be no more tankers parked on Lagos highways. Today we have taken the union from rent to land-lordship. The Union within the four years of, (my) leadership moved to acquire and commissioned

the Port Harcourt and Warri zonal offices. “In addition, we have 700 plots or 43 hectares of land in Eleme for the establishment of a Tanker village. The land was given to the Union by the Rt. Hon Rotimi Amaechi, Governor of Rivers State. We have been given the letter of authority to possess the land. The land has been bulldozed and set for work, which will include the provision of the park that can take over 1,000 trucks, a clinic, bank, hotel, fire station, restaurants, and shopping mall. The project is expected to cost 4 billion naira and that is why we are calling on investors to partner with us in this project. The Union is in the process of acquiring a land in Port Harcourt to build ‘a labour college in collaboration with the American Labour Institute which when it comes ‘“to completion will award diplomas and degrees in industrial relations and allied studies.” Continuing, he said “In our first term in office, the Union also made it possible for National Executive Council, NEC members to attend overseas courses in Dubai, United Kingdom and the United States’’.


Maritime

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Senate seeks protection of maritime projects in Delta . . . Commends NIMASA’s foresight

Senates in session

Godwin ORITSE

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HE Senate Committee on Maritime has e n j o i n e d communities in Delta State, where some maritime projects are currently being constructed to ensure the protection of the projects so as achieve the desired result. This was stated during an over sight inspection of the Maritime University and a shipyard in Okerenkoko in Gbaramatu Kingdom in Delta. The Committee’s Chairman, Hajia Zainab Kure, said that the Committee had approved that these projects be sited in the Community for the socioeconomic wellbeing of the riverine area. Kure explained that the Committee had to follow up the approval with inspection of the projects so as to make sure that funds appropriated for them are spent judiciously. “We have come on our oversight function to inspect

We had to come for inspection because we appropriate the funds that are used for these projects and because of that we decided that these communities should enjoy these facilities and in doing that, we again had supported through appropriation what should be used for these projects projects that are being executed by the Federal Government of Nigeria for the benefit of the communities. “We had to come for inspection because we appropriate the funds that are used for these projects and because of that we decided that these communities should enjoy these facilities and in doing that, we again had supported through appropriation what should be used for these projects. “As a responsible committee that we are, we decided to follow it up by coming to see

for ourselves because seeing is believing. “We also came to talk to the communities to as much as possible guard these projects that are their own jealously and to again show them that the communities are the beneficiaries of these projects. “We have come, we have seen what we have seen and by the grace of God, we are going to use what we have seen to further give the push to see that these projects are being built and are being built in good time.” In his response, Chairman

of the Okerenkoko Federated Community, Chief James Tangbewei, commended the President for supporting the projects to be established in the community. Tangbewei however urged the authority to ensure that the people of the community are properly carried along in the award of contracts and employments that will be created as a result of the projects. He said “We want to strongly request that the Federal Government’s Local content Policy (40%/60%) should be strictly applied in the execution of these projects.” He explained that if the community ’s people are patronized in the award of contracts, it will help the people to rebuild their devastated community that was destroyed in 2009 by the Joint Task Force (JTF). He however assured the Committee that both the Okerenkoko and Gbaramatu people are solidly behind these projects and as such will ensure adequate security to allow the project move smoothly.

ISPS: NIMASA verifies, issues certificates Godwin ORITSE

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HE Nigerian M a r i t i m e Administration and Safety Agency (NIMASA), has commenced the Ve r i f i c a t i o n a n d Inspection Exercise of terminals and port facilities with a view to ensuring adherence to the International Ship and Port Facility Security (ISPS) Code. It was gathered that the Agency, which was only a p p o i n t e d t h e Designated Authority (DA) to midwife and implement the ISPS Code is working to ensure that operators of port facilities are in tune with the guidelines of the Code. In an exclusive chat with SWEETCRUDE, the Executive Director in charge of Maritime Safety and Security, Captain Bala Agaba, said that the agency ‘s involvement has brought about some level of sanity to issues relating to security in oil and gas, and maritime industries. Agaba noted that as a result, the Nigerian maritime industry will achieve its goals in the area of security, adding that the agency is working round the clock to make this happen. Also commenting on the development, the Chairman of the Port Facility Security Officers (PFSO) Forum , Mr. Subaru Anataku, said that NIMASA has rolled out its 2014 VIE programme, just as operators of the facilities are also doing everything possible to be on top of the security situations. He disclosed that terminal operators are also getting enlightened whenever these VIEs take place, as many of them ask questions that are security related. It was gathered that the NIMASA has pegged the fees paid to Recognized Security Organisations at N3.5m, while another N1.5million is paid to the Agency by the terminal operators.


Maritime

27

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HE National I n l a n d Wa t e r w a y s Authority (NIWA) a few months ago had a face -off with the Lagos State Government over the right of way on the nation’s coastal waters in Lagos. In this interview with Godwin Oritse, NIWA’s Managing Director, Hajia Inna Ciroma, told Sweetcrude that the Authority is looking for a way round the issue with the State Government. Excerpts: What has NIWA done to checkmate the excesses of the Lagos State Government for encroaching on its right of way on the coastal waters? The issue is not that of checkmating anybody, it is a question of understanding what the NIWA Act says and what is expected of NIWA and what is also expected of any State Government. So the NIWA Act is very clear, we have our own jurisdiction in any state of the Federation, all inland waters belong to the Federal Government. This is in the concurrent list of the constitution and it is under the legislation of the Federal Government. So any state government that says that inland waters belong to the state government is not saying the truth, this is being sorted out. What Lagos Government is claiming is that they are working for the people saying that NIWA cannot stop them, is also something we are looking into. NIWA is also working for the people of Nigeria at all levels of governance, whether at Federal, State or Local levels, we are also serving the people of Nigeria. There should not be any reason to have issue with any State Government since we have our Act. Don’t you think that the Lagos State Government seems to be usurping NIWA’s powers? What the Lagos State Government did was that they enacted a law and said that they will not respect NIWA Act because NIWA Act was set up by a Military Decree. They should know that whether Decree or Act, a law is a law, so the NIWA decree is law, it must be respected. The Nigerian constitution came into being through a decree, Lagos State was created by a decree, so nobody can come and say that because it is a military decree the law cannot be respected, that is what we are saying. Will NIWA take any legal action against Lagos State

Hajia Inna Ciroma (inset), Lagos waterway blocked

We will not join issue with Lagos over water ways —NIWA boss They should know that whether Decree or Act, a law is a law, so the NIWA decree is law, it must be respected. The Nigerian constitution came into being through a decree, Lagos State was created by a decree, so nobody can come and say that because it is a military decree the law cannot be respected, that is what we are saying

Government? It has not come to that, but that is what courts are for, courts are for adjudications to look at issues and take a decision but if it gets to that, then we will have no choice than to go to the court. The Anambra State Government has raised an alarm over the dredging exercise going on right under the River Niger bridge, how is NIWA going to handle this? NIWA will not purposely go and issue license to anybody to go and dredge from under any bridge because that is dangerous. You cannot go and start eroding the bridge and the bridge belongs to Federal

Ministry of Works and not NIWA. Is it not NIWA’s duty to issue licenses for people to dredge? Yes it is NIWA’s duty to issue licenses for people to dredge, but not issue license for people to go and under mine any bridge because we had similar application from people in Lagos State and we did investigate. There is certain area of distance you must give; you cannot dredge at the pillars of any bridge. What will NIWA do in the case of River Niger? We will investigate and if we find out that it is true, then we will take action and if need be, we will withdraw whatever licenses that have been issued because we will not want to endanger the lives of people.


Maritime

28

Freighters call for inclusion in policy formulation

PAAR: Operators despair over delays at the ports Godfrey BIVBERE

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Ship loaded with containers

By Godfrey Bivbere, Olaitan Ayoola & Thelma Ogbu

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he failure of p o l i c y objectives in the m a r i t i m e industry has been attributed to the absence of stakeholders, input in the formulation of such policies. The former Chairman, Council for the Regulation of Fr e i g h t Fo r w a r d i n g i n Nigeria, CRFFN, Mr. Tony Iju Nwabunike, who said this in Lagos, also told Sweetcrude that this has been the practice over the years. He argued that the challenges faced by the industry today, including corruption, could be easily checkmated with suggestions from stakeholders. According to him, “G o v e r n m e n t s h o u l d consider us in the

formulation of policies and try to ask us questions before they begin to develop it into policy. For example, the rice issue, most of us are working at the various ports, so we know the major problems in the ports. We can sit down here and analyse what Customs are doing, what the various government agencies are capable of doing in the ports and even the statutory strength of the Nigerian Ports Authority, NPA and then the concessionaires. “Federal Government feels that we are not important and they should not bother themselves with the freight forwarders. But the more they neglect this group of people, the more they will continue to have problems in the ports.” On the accusation that corrupt practices are initiated by importers and their agents, Nwabunike disagreed, even as he admitted that there are some cases in which some

importers and agents actually initiated such moves. He added that such moves are initiated with the motive to short-change government in the payment of requisite duty and charges. In his words, “I do not want to say that because if I use my office as a test case, I do business with people who do their ‘Form M’ correctly. We bring them on board and educate them on the import guidelines and how to use them correctly. If you have a problem bringing the consignments, we rely strictly on the import guidelines. “ We e n s u r e t h a t t h e importer pay his duty, and extra Demand Note, D/N, if need be, and ensure that we educate our importers and other freight forwarders who are working with us to ensure that they get it right. “But that does not mean that all Customs brokers and Freight Forwarders are doing the same. They might be correct, but the government officials are there in the ports

to checkmate those who do this and not to be part of the game. “Cheaters should not go unpunished when they are caught, but when they now become partners with the government agencies, it becomes collaboration. I think there is much more collaboration than what we see and government is not doing anything about it. “If you call some freight forwarders they will tell you that they are encouraged to bring in goods without paying the relevant duty to government and I think in such cases it becomes sabotage. “You know an average importer wants to maximise profit, an average agent wants to make gain. So if a government agency now decides to say he wants to play ball with them, it is unfortunate; and I do not think it should be so,” he concluded.

ational Council of M a n a g i n g Directors of Licensed Customs Agents (NCMDLCA), has said that the Pre-arrival Assessment Report, PAAR, introduced by the Nigeria Customs Service, NCS, is causing unnecessary delays in the clearance of goods at the ports. The National Secretary of the Council, Mr. Uchu Block, told Sweetcrude in Lagos that the NCS is experiencing some issues with the implementation of the assessment, leading to impediments against ports operations. He noted that although PAAR was introduced to replace Risk Assessment Report, RAR, hitherto used for clearance of goods at the port, it has however failed to meet target objective to fast track clearance. Block disclosed that it now takes about three months to clear consignments at the ports, as a result of the delays associated with the PAAR regime. Furthermore, he alleged that Customs officers do not allow cargoes approved by the Area Controllers to leave the ports through Prerelease applications for ulterior motives, thereby delaying the clearance process. Block noted that the normal thing would have been to allow Pre-release goods to exit the port, after which the Port Audit Unit, PAU, would then reconcile the amount paid by the owner of the consignment with the actual value. C o n s e q u e n t l y, t h e importer would be made to pay for differences discovered after the reconciliation process. He complained that the delays have not only compounded the incidence of congestion at the ports, but also impacted heavily on the demurrage payable on such cargoes. Block further complained that operators are frustrated in their efforts to raise the issue with the Area Controllers, as visitors are made to wait for many hours, which an average agent cannot afford to waste.


29 Total donates N55m e-Library to Rivers varsity Jimitota ONOYUME

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Guests at Total project commission

Total donates clinic equipment to Teaching Hospital Samuel OYADONGHA

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he management and staff of the Niger Delta University Te a c h i n g Hospital, had cause to celebrate last week, when the Total Upstream Companies in Nigeria (TUCN), formally handed over a Special Baby Care Unit (SBCU) edifice built at the cost of N203million to the Bayelsa State owned institution. Works carried out in the state- of-the-art unit, included construction of the building and gas chambers. Supply and installation of medical equipment comprising 34 single hospital beds, with swivel shelf drawer, 14 single baby beds and incubators. O t h e r s i n c l u d e resuscitation tables, blood gas analyzer, electrophoresis automatic analyzer, fetal

pulse contraction monitors, h e m a t o l o g y a n a l y z e r, examination lamps, and dressing trolley. Speaking at the commissioning ceremony at Okolobiri, the Deputy Managing Director, Deep Water District, Mr Charles Ngoka, said the objective of the donation is to help reduce infant mortality in the predominantly riverine state. He said the entire project cost the company about N203 million, stressing that TUCN and its partner expects that the unit would be adequately maintained and put to good use. According to Ngoka, who was represented by Mr. Joseph Ajilore, Executive G e n e r a l M a n a g e r, Deepwater, the project which was completed in 2012, would have been commissioned before now,”but the equipment and installation was delayed due

to the flooding of that year.” While thanking the contractors for an excellent job, he said, “Investment in children is money spent in the right direction.” Also speaking, Mr. Fidel Pepple, the Group General M a n a g e r, N a t i o n a l Pe t r o l e u m I n v e s t m e n t Management Services (NAPIMS), said his firm was in charge of managing Fe d e r a l G o v e r n m e n t ’ s investments in the upstream sector of the oil and gas industry to ensure good returns on invested capital. “We believe that our investments should not be in the nuts and bolts of the industry but also in the people,” he noted. He added that NAPIMS also assists gover nment to provide healthcare delivery, and expressed delight with Total for delivering the project. “This is because it holds very good prospect for the

development of Nigeria’s health sector.” Earlier, the Chief Medical Director of the Niger Delta U n i v e r s i t y Te a c h i n g Hospital, Dr. Onyaye KunleOlowu, thanked Total for the gesture. He said in the past four years, Total had exhibited an “unparalleled commitment to corporate responsibility to the institution by donating two ambulances earlier, and now the construction and equipping of the special care baby unit with a dedicated laboratory and mother ’s room. Commending the efforts of Total, she called on other multinationals to come to the

aid of the young institution in t e r m s o f sponsoring training of staff, r e s e a r c h , equipping as well as infrastructure development, to enable it “deliver excellent medical care to the society.”

ORT HARCOURT: TOTAL has donated an electronic library worth about N55 million to the Rivers State University of Science and Technology. The Deputy Managing Director, Deep Water District, Total Upstream Companies, Mr Charles Ngoka, said the e-Library was funded by Total E & P Nigeria Limited and its OML 138 partners. While urging the University to make good use of the library, he said the oil giant will continue to invest in education, describing it as a worthy investment. “Our company on a yearly basis offers graduate and post graduate scholarships, not only to the indigenes of the areas where we produce oil and gas, but also to people from all over Nigeria. We have and we will continue to contribute meaningfully to the overall development of Nigeria and its people”’ he said. Meanwhile, the Vice Chancellor of the University, Prof.Barinem Fakae, lauded Total for the donation, noting that the library would help in the development of scholarship in the school. “Library is meant for our research. It is heartwarming to see this project in our university. It is the first state university to enjoy this. We thank Total for responding to the call for development of human capacity. Your provision is afulfillment of our dream,” he said He also urged the firm to renew subscription for the e-Library, and appealed for the building of an internet room to be named after Total.


Community

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Traditional rulers caution against projects duplication Jimitota ONOYUME

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Rural water supply

NPDC to create opportunities for host communities Jimitota ONOYUME

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O R T H A R C O U R T: N i g e r i a Petroleum Development C o m p a n y, N P D C , h a s assured that it would continue to be actively involved in resolving primary challenges in its host communities. The firm in a statement,said i t w o u l d c r e a t e empowerment opportunities in the communities, adding that 24 out of the 94 projects so far listed for attention

would be completed at the end of the first quarter of the year. According to NPDC, February 1st made it one year it had been operating in OMLs 34 & 40 and OML 30, stressing that it would continue to support development and capacity building measures in its areas of operations. “One of the cardinal principles of NPDC with regards to its host communities is meeting the primary needs of the communities through improving the wellbeing of members of the community

especially, the family units; decreasing poverty levels; and enhancing the productive and income generating capacities of community members,” the statement read. While urging the various communities to protect its facilities and pipelines, the company said it would establish a trust to assist t h e m i n t h e exe r c i s e , stressing that incident-free communities would also be rewarded with bonuses. “The company expects the communities to protect its facilities including flow lines and export pipelines within

the community domains. A trust will be established into which the money for such protection is paid. As an added incentive, incidentfree communities will be given bonuses, while those with security breakdown will receive fewer trust funds. Thus the community owns both its own development and will take responsibility of the protection of NPDC facilities.” NPDC, a subsidiary of the Nigerian National Petroleum Corporation, NNPC, also promised to award annual scholarship to students in its areas of operations, noting that a scholarship examination was held recently at the Federal Government College, Warri, Delta State for nominated candidates.

ORT HARCOURT: Traditional rulers in the Niger Delta have appealed to the new board of the Niger Delta Development Commission, NDDC, to revive the Partners for Sustainable Development Forum, PSD, saying that it serves as a clearing house for the Commission. T h e C h a i r m a n , Association of Traditional Rulers of Oil Mineral Producing Communities of Nigeria, TROMPCON, Mr. E z e A k u w u e z e Ikegwuruka, made the caution when the association visited the NDDC Managing Director, Mr Dan Bassey Abia, at the headquarters of the C o m m i s s i o n i n Po r t Harcourt, Rivers State. Ikegwuruka said the PSD was a forum where stakeholders in the region meet with a view to avoiding duplications in project construction between government and the NDDC in the region. He said there was a need to revive the forum so that NDDC and government at various levels in the region can compare notes on projects. He added that the forum helps to see that government and NDDC do not make budgetary provisions for the same projects at the end of the day. Continuing, he said the PSD was an important organ that brought stakeholders together to harmonize development related issues in the region, noting that it would help in achieving the Niger Delta Regional Development Master Plan, NDRDMP The royal fathers also lamented the rise in cases of oil theft in the region, adding that urgent steps should be taken to tackle the problem. Responding, Dan-Abia said the new board of the Commission had already taken steps to revive the PSD, stressing its relevance in the development drive of the Commission. According to him, the management saw the significance of the PSD, noting that the Commission would endeavor to address the challenges of under-


Community

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NATIONAL CONFAB: N’ Delta demand environmental justice Jimitota ONOYUME

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O R T HARCOURT: AT the recent panNiger Delta conference held in Port Harcourt, Rivers State, leaders of the region drummed up support for the Fe d e r a l G o v e r n m e n t ’ s National Conference, saying it is an ample opportunity for the region to address issues of environmental pollution, neglect and marginalization. Key speakers at the event included foremost environmentalist, Rev Nnimmo Bassey; former President, Movement for the Survival of Ogoni People, Barr. Ledum Mittee; former Petroleum Minister, Chief M.T. Akobo; former President Ijaw National Congress, Prof. Kimse Okoko; eminent p r o f e s s o r o f H i s t o r y, EbiegberiAlagoa; Prof. Ben Naanen; Ms. Ann Kio Brigss; and Dr. Otive Igbuzor and a host of many others. Bassey, in his presentation lamented the high level of pollution in the region, a situation he blamed on the failure of governance at the center. He accused the federal government of not paying attention to portions of the constitution that demand for protection of the environment in the Niger Delta. He said, “The Nigerian state has relied on the revenue that originates from the Niger Delta over the past five decades and finds it difficult to be weaned off this vampire-like grip on the veins of the territory and peoples. The creed appears to be one that sees those who damage the environment as untouchables because they bake the toxic cake while the people and environment are seen as absolutely dispensable. “The alliance of the State and oil companies works excellently for both parties and to the detriment of the peoples on whom environmental costs are unashamedly cast. This criminal bent continues because the Nigerian Constitution pays scant attention to issues of environmental rights and related injustices. In addition, the laws and regulations that ought to defend the people and the

Water pollution environment are often not enforced or are simply ignored.” He charged the region to harmonize positions contained in various bill of rights, adding that the region should demand an immediate audit of the entire area “using the UNEP process for the assessment of the environment of Ogoni land as a template.” He further called for closure of operations of defaulting firms that fail to comply with international best practices. He added, “There is a need for the replacement of all pipelines that have exceeded their useful life span, creation of a Niger Delta Survival Fund (NDSF), which would have two components: ? A) Immediate actions in terms of environmental remediation detoxification of our water bodies and lands); and, ? B) A separate account kept for future use to help our people adapt to the coming climate change and other catastrophic changes that have already been set in motion by decades of despoliation. Earlier, the Chairman of the

The National Conference would serve as platform on which the different nationalities and social groups in Nigeria would democratically decide on such crucial issues as power-sharing between the various ethnic nationalities in Nigeria

conference organizing committee, and Executive Director, Social Action, Dr Isaac Osuoka, said they chose not to invite government appointees and functionaries in the region for the world to know how serious the event was. Osuoka urged the federal government to ensure that the National conference addressed the defects in the nation’s federalism. He maintained that what the nation paraded as democracy at the moment was a subversion of the peoples wish and aspiration.

According to him, the people wanted a true federal system as a pre-condition for democracy in Nigeria rather than a structure where elections were conducted in line with defective federal frameworks set up by the military class. He further expressed the hope that the national conference would address the weaknesses inherent in the system. “There are primary issues of uncompleted state-building that we cannot sweep under the carpet. Nigeria is in crisis with major social cracks

arising from flawed structural foundations as originally erected by British colonialists and re-modeled by forces of internal domination,who have not succeeded considering the happenings in the country. We must rebuild the Nigerian state on a proper foundation of equity and social justice. To ignore the necessity for restructuring is to deny the reality of several civil wars of which the Boko Haram episode is just one. “The National Conference would serve as platform on which the different nationalities and social groups in Nigeria would democratically decide on such crucial issues as powersharing between the various ethnic nationalities in Nigeria, just and equitable structures for the Nigerian Federation, the control of resources, including land and minerals, the religious question, alternative economic recovery package, a fair electoral system and other such decisions which border on the destiny of the Nigerian state and its peoples.”


WAN JASCON 55


Sweetcrude march 2014  
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