The Nation Newspaper

Category: Energy

  • PWC urges govt to implement mining roadmap

    PWC urges govt to implement mining roadmap

    The PricewaterhouseCoopers (PwC) has expressed doubt over the implementation of the mining sector roadmap. According to the audit firm, nothing  has happened since the blueprint was unveiled about a year ago.

    Available records, it said, have  shown that the mining sector’s contribution to the Gross Domestic Product (GDP) had remained far below expectation, accounting for only about 0.33 per cent in 2015, which was before the inauguration of blueprint.

    A multi-stakeholder committee was set up by the government to develop a roadmap for the transformation of the sector to boost its growth. The deliberate outline included building a world class minerals and mining ecosystem designed to serve targeted domestic and export markets for minerals and ores.

    The blueprint was also expected to rebuild the nation’s minerals, mining and related processing industry, rebuild market confidence in minerals and mining sector and win over domestic users of industrial minerals that are currently imported.

    PwC advised that the government should focus on expanding domestic ore and mineral processing industry and make the sector competitive.

    A PwC Director, Cyril Azobu, who spoke with The Nation said for government  to develop the sector, it needs to implement the strategic actions that were contained in the roadmap.

    According to Azobu,  the PwC was in touch with the mining strategic team, assuring the firm’s support  to the Ministry of Solid Minerals to ensure that strategic actions contained in the roadmap were implemented.

    He said: “Execution is a critical thing, that is where we are interested in and we are working with the government and the private sector to see how that works. We are really much interested in getting this to work. However, there are other stakeholders that are involved, everyone needs to be committed to making this work.”

    He said efforts being made are geared towards encouraging development of certain strategic minerals such as bitumen and iron ore as well as legal matters.

    He said: “It is expected that there would be a resumption of activities within the iron ore space such that we could have complete integration from iron ore mines to steel production and other processing companies to develop iron ore.

    “I have not seen much activities, given the great expectations we had.. The truth is that this is one area the government needs to give attention in terms of funding, and very recently the mining development fund was inaugurated, but it is yet to pick up.

    “I think much of the activity had been a bit of institution building, and addressing existing legal matters has slowed down the industry. We are concerned because in a couple of months the year will come to an end without achieving the expected goals of the roadmap.

    “I am aware the mining development fund board has been constituted, but I think they will need to step up efforts in terms of how they stimulate the industry from funding perspective. I hope they will have the cooperation and get to work. I hope the issues around legal matters will be ironed out. I also hope that bitumen, which seems to be one of the strategic minerals will also pick up and there will be activities to bring investments into the country.”

    On funding, the PwC boss said exploration funding was not attractive to funding institutions because its high risk, adding that except those who have the licences are able to get private funding. “If you ask anyone in the mining sector today, the real issue for them is funding,” he said.

    Azobu said part of what the government has done is the provision of minerals data. This, according to him, has helped in carrying out appropriate exploration.  “There is a bit of work going on in respect of funding from the government. Nonetheless, one also needs to be sure of what exactly one is funding and how it will provide the expected outcome in addressing the funding gaps,”he said.

     

  • Sacked workers were economic saboteurs, firm alleges

    • Reinstate them, insists PENGASSAN

    The management of Neconde Energy Limited, an exploration and production (E&P) arm of the Obijackson Group, the operator of the oil mining lease (OML) 42 in Delta State, has  said sacked members of Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN),  who worked with the firm were economic saboteurs.

    PENGASSAN had threatened to shut down Neconde Energy operations  in Lagos and Warri for sacking five of its members who worked in the company without following due process.

    Obijackson Group spokesman,  Olusegun Fafore, in reaction said the sacked members strayed from the company’s operational rules.

    “The individuals in question committed an act of economic sabotage and total disregard for the human lives. This position followed our verification of their involvement in vandalisation of valuable equipment, assault, abduction and hostage taking of person on Thursday, 18th May 2017 at the Jones Creek, Delta State.  These dastardly acts were committed against fellow employees, who reported the matter to the management of the company.

    “As a responsible organisation, conducts like those perpetrated by these individuals are not in alignment with our organisational values and written company policy, which every employee is aware of, and understands.  The allegation that these individuals were victimised because of their involvement is not only baseless, but also unfounded because picketing of our office was on Monday, May 15th 2017 and a meaningful agreement was reached with the union, which resulted in speedy winding down of the picketing exercise,” he said.

    He continued:“So, the unpatriotic development that resulted in disengaging the employees happened days after our resolution of outstanding issues with PENGASSAN. Therefore, it was not just an act of economic sabotage, but a case of premeditated destruction of our facilities, and disruption of our operations and malice against our employees. Keeping them in our employment, without doubt, constitutes a threat to the lives of other employees, whom they abducted and held hostage.

    “Consequently, we were left with no option, after confirming their involvements in the dastardly acts, which contravened our corporate ethos, than to let them go. We are a company working to boost the economic development of Nigeria through our activities, but when employees work against the organisational purpose and national interest, then it is not inappropriate or illegal to disengage such employees.

    “Moreso, Nigerian courts have always upheld the sanctity of the terms freely agreed to by parties as set out in the relevant employment contract and the courts have enforced the same as binding. In the case of Chukwuma .V. Shell Petroleum Development Corporation, the Supreme Court of Nigeria upheld the Common Law principle that an employer has the right to terminate its employee for good reason, bad reason or no reason at all. Therefore, it is inherent in every employment contract that the employer has a right to hire and fire, provided that the procedure stated in the employment agreement is duly complied with.”

    PENGASSAN General Secretary, Comrade Lumumba Okugbawa, had written the firm, demanding immediate reinstatement of their sacked members or face industrial action.

    In the letter copied the Ministers of Labour and Employment and Petroleum Resources (State), as well as Nigerian National Petroleum Corporation (NNPC) Group Managing Director, Group General Manager, National Petroleum Investment Management Services (NAPIMS), Chief Executive Officer, Neconde and relevant officials of PENGASSAN, the association demanded the reversal of the sack by Neconde within 72 hours or face shut down of operation.

  • Eni starts production from Ghana’s offshore project

    Eni has begun production from the integrated oil & gas development project in the Offshore Cape Three Points (OCTP) block, off Ghana’s western coast, two and half years, and three months ahead of schedule.

    According to the Deputy Division Manager, Lagos Liaison Office, Nigerian Agip Oil Company Limited (NAOC), Eni’s arm in Nigeria, Tajudeen Adigun, the OCTP integrated oil & gas development is made up of the Sankofa Main, Sankofa East and Gye-Nyame fields, which are located about 60 kilometres off Ghana’s Western Region coast.

    The fields have about 770 million barrel of oil equivalent (mboe) in place, of which 500 million barrels of oil and 270 mboe of non-associated gas (about 40 billion cubic metres). The project includes the development of gas fields whose production will be utilised entirely by Ghana’s domestic market, he added.

    Production will be carried out via the “John Agyekum Kufuor” floating production, storage and offloading unit (FPSO), which will produce up to 85,000 barrels of oil equivalent per day (boepd) through 18 underwater wells. A 63-kilometre submarine pipeline will transport gas to Sanzule’s Onshore Receiving Facilities (ORF), where it will be processed and transmitted to Ghana’s national grid, supplying approximately 180 million standard cubic feet per day (mmscfd) of gas.

    Eni Chief Executive Officer, Claudio Descalzi, said: “Starting production only two and a half years after the approval of the development plan is an extraordinary result and a reason for great pride. It certifies our exploration skills and knowledge, as well as our field development vision, and it confirms the effectiveness of our new operational model, where Eni has a central role in project management, aimed at improving time-to-market. This is a result we are especially proud of, because it fits perfectly into the joint development vision that we have for Africa: we grow when the countries that host us also grow. The launch of OCTP will provide gas to Ghana for over 15 years and the resulting electricity will give a real boost to the country’s development. All of this has only been possible thanks to the unwavering commitment of Ghanaian authorities and of our partners.”

    Eni is the operator of the OCTP block with a 44.44 per cent stake, while Vitol holds 35.56 per cent and Ghana National Petroleum Corporation (GNPC) 20 per cent.

    Eni has been in Ghana since 2009 through its subsidiary, Eni Ghana, and with the startup of OCTP Integrated Oil & Gas Development Project, the company has become one of Ghana’s main operators.

    In 2016, Eni obtained a new exploration license, Cape Three Points Block 4, adjacent to the OCTP Block. If successful, synergies with OCTP will allow a fast-tracked start-up. The drilling of the first exploration well is expected in 2018, in continuity with the drilling of Block OCTP wells. In addition, Eni Ghana is exploring development opportunities in the renewable energies sector. Eni Foundation also has an important social and health programme in the western region, benefiting a population of over 300,000 people.

  • NEITI alleges ‘fundamental error’ in PIGB

    NEITI alleges ‘fundamental error’ in PIGB

    The Nigeria Extractive Industries Transparency Initiative (NEITI) has alleged fundamental error in the Petroleum Industry Governance Bill (PIGB) passed  by the Senate.

    The bill, the NEITI said, should be specific on operations of the industry as guided by the principles of the Extractive Industry Transparency Initiative (EITI), which Nigeria signed into.

    Its Director of Communications, Ogbonnaya Orji, who spoke with The Nation on telephone, said a quick review of the bill showed there was no specific provision that the NEITI principles are enshrined in the governance process, adding it is a fundamental error that needed to be corrected.

    “We have already seen that the former Petroleum Industry Bill (PIB) specifically provided that all the processes in the oil and gas should be guided by the principle of extractive industry transparency initiative. We have not seen this provided in the PIGB and the House of Representatives needs to correct that,” he stated.

    He maintained that the House of Representatives needed to correct the error, adding there has to be a specific provision since Nigeria is a member of the Global Extractive Transparency Initiative. Therefore, the laws in the industry should be consistent and should guide the principle of the PIGB, which he said NEITI is implementing in Nigeria.

    Orji agreed that the bill will address the governance aspect of the industry, saying that the governance bill will address issues in the process of doing business in the industry.

    He also noted that there was still another fundamental area of the legislation that was still untouched. This, he said, has to do with the fiscal, adding the original PIB that was done in the past was broken into bits and pieces, saying “the senate just concentrated on the governance and policy aspects of the bill.”

    “We still expect another legislation that deals with the fiscals, which will deal with who takes what and how. The fiscal aspect of the bill is still very important.”

    The petroleum industry governance bill is the first part of the modified version of the much awaited Petroleum Industry Bill (PIB), which the Senate passed into law recently.

    The bill, if eventually passed by the House of Representatives and signed into law by the President, will lead to unbundling and restructuring of the Nigeria National Petroleum Corporation (NNPC) and the Department for Petroleum Resources (DPR), and also create new agencies with more responsibilities.

    While commending the Senate on the passage of the governance bill, NEITI noted the process would not be complete until the House of Representatives deems it necessary to summon similar courage to give the bill an accelerated consideration on its merit in overriding public interest.

    Ogbonnaya believed the PIGB will make a very good impact as governance process in the industry is very fundamental even in determining the financials, adding it is a milestone that has been recorded in terms of progress.

    He noted that no investor will want to bring investment into an environment he is not sure what the rule would be. Existence of the law, he said, would make it clear what the rules are and again make the environment more predictable in terms of legal framework.

  • ‘No fuel price hike now’

    ‘No fuel price hike now’

    The Petroleum Products Pricing Regulatory Agency (PPPRA) has dismissed as untrue speculations of planned fuel price increase by the Federal Government.

    According to a statement by the Agency’s spokesman, Lanre Oladele, the Executive Secretary, Abdukadir U. Saidu, said the PPPRA has observed the growing speculation on a purported imminent increase in the pump price of Premium Motor Spirit (PMS) by N5.00 per litre.

    The Agency, he noted, wished to dispel the rumour and assuage the concerns of Nigerians. “As the Agency of government saddled with the responsibility of regulating petroleum products pricing, supply and distribution, we want to assure the Nigerian public that the subsisting pump price cap for PMS remains N145 per litre, across the country and as such, Nigerians should please ignore the speculation on price increase.

    “We again wish to assure all Nigerians that pursuant to its mandate, the PPPRA shall not fail in its efforts geared towards ensuring products availability, and at regulated price, for the benefit of all.”

  • Olushola Odeyemi becomes First Nigerian to Deploy Riserless Light Well Intervention Technology in Nigeria’s Deepwater Subsea Operations

    Olushola Odeyemi becomes First Nigerian to Deploy Riserless Light Well Intervention Technology in Nigeria’s Deepwater Subsea Operations

    In a remarkable achievement that amplifies the exceptionality and expertise of Nigerian engineers, Mr. Olushola Odeyemi has set a new benchmark in Subsea Engineering with his groundbreaking deployment of Riserless Light Well Intervention (RLWI) technology. This innovative approach not only restored production at the Oyo-8 Subsea Well in Nigeria but also showcased Nigerian engineering prowess on a global stage.

    The Oyo-8 Subsea Well, an integral asset in Nigeria’s offshore oil operations, was first brought to limelight on May 3, 2015, after its completion on April 6, 2015. Initially, the well achieved a production rate of 7,000 barrels of oil per day. However, by September 26, 2015, operations were halted due to crude oil nearing the storage tank’s capacity at the Floating Production Storage and Offloading (FPSO) unit. Despite several attempts to resume production after the crude offloading, the well remained inoperative.

    Then comes Mr. Odeyemi, a seasoned Subsea Engineer, whose exceptional problem-solving skills and innovative mindset would soon turn the tide. Recognizing the critical nature of the malfunctioning Oyo-8 TRSCSSV (Tubing Retrievable Subsea Check Valve), Odeyemi undertook a three-day investigation aboard the FPSO. His detailed fault analysis led him to diagnose a crucial issue: a loss of hydraulic transmission from the High-pressure circuit in the Subsea Control Module (SCM) to the operating mechanism of the TRSCSSV. This malfunction had effectively kept the flapper valve in the closed position, stalling any attempts to reopen the well.

    In a bold move that would redefine subsea intervention techniques, Odeyemi decided to deploy a vessel-based Riserless Light Well Intervention (RLWI) operation—an unprecedented approach in Nigerian waters. This methodology involves conducting well interventions without the need for a traditional riser system, thus minimizing operational complexities and costs.

    The RLWI operation, which commenced on May 3, 2016, was meticulously planned and executed under Odeyemi’s supervision. The operation not only adhered to the budgeted time but also achieved a remarkable less than 3% nonproductive time—a testament to Odeyemi’s master-planning and execution. As a result, crude production at the Oyo-8 well resumed, showcasing the effectiveness of this novel approach.

    The significance of Mr. Odeyemi’s achievement is in no small measure. It extends beyond the immediate success of the Oyo-8 intervention. By successfully deploying RLWI technology in Nigeria, he has set a new standard for subsea operations in the region, demonstrating that complex subsea challenges can be addressed with innovative and cost-effective solutions. His work has not only bolstered Nigeria’s position in the global subsea engineering arena but also provided a model for other oil-producing nations worldwide to follow.

    The impact of this innovation was further amplified when Mr. Odeyemi presented his work, titled “Riserless Light Well Intervention Restores Production on Oyo-8 Subsea Well,” at the Offshore Technology Conference (OTC) in Houston, Texas, in May 2017. The presentation garnered significant attention and acclaim from industry experts worldwide, highlighting the potential of RLWI technology and its applications both in Nigeria and beyond.

    It is not surprising that Mr. Odeyemi was recognized in the top 4% of all Nigerian Executives in the Oil and Gas industry in 2015, for his involvement in groundbreaking innovations in the country and his contributions in Drilling, Completions, and Intervention in Subsea Engineering field. He has extended his expertise to revolutionizing subsea engineering globally. 

    Mr. Odeyemi’s work has influenced Subsea Engineering practices, contributing to the adoption of RLWI technology in various offshore operations. Experts have confirmed that the success of this intervention has demonstrated the technology’s viability and efficiency, prompting its application in similar contexts across the Subsea Engineering industry.

    Mr. Odeyemi’s achievement confirms the remarkable potential of Nigerian engineers to lead and innovate on a global scale. His work exemplifies how groundbreaking solutions can emerge from local expertise and creativity, making significant contributions to the global subsea engineering field. Mr. Odeyemi’s exceptional achievements in, and his significant contributions to, the field of Subsea Engineering will undoubtedly be remembered as a turning point in subsea operations, both in Nigeria and globally.

  • Expert to Labour: show understanding to investors

    The Chairman of Obijackson Group, indigenous oil and gas conglomerate, Dr. Ernest Azudialu, has advised labour organisations in Nigeria to show understanding to firms’ owners in theri dealings.

    He spoke at an interaction session with reporters in Lagos when the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Lagos branch, planned to picket the company.

    The Lagos PENGASSAN wanted to picket the firm when its members in Neconde Energy Limited, the exploration and production (E&P) arm of the Obijackson Group, demanded  the transfer of their benefits and review of severance benefits to match those of multinational oil firms, such as Shell and ExxonMobil, following the relocation of the head office of Neconde to Warri from Lagos.

    Neconde is one of the 12 subsidiaries in the Group and is the operator of the Oil Mining Lease (OML) 42 located in Delta State. To make the office and workers to be close to their operational area, the head office of the company was moved to Warri, a development which informed the demands of Neconde workers.

    Azudialu urged the labour to consider firms and the prevailing challenges in the sector and the economy. According to him, the management of Neconde, despite the challenges it faced, ensured that salaries and benefits were paid, therefore, it would be unfair to stifle private firms that borrowed money from banks to create jobs for Nigeria and force them out of business.

    He said: ‘’We battled for the operationship OML 42 with our partner, the Nigerian Petroleum Development Company (NPDC) – an arm of Nigerian National Petroleum Corporation (NNPC). Since we bought Shell’s stakes in the oil field in 2012, the battle for operatorship lasted till this year. We were confirmed the operator of the asset in March.

    “As we were about coming out from operatorship battle, the oil price collapsed. At a point, we sold oil at $29 per barrel. Amid fallen oil price, militants blew up the Forcados pipeline, which is the only means of transporting oil from the fields to the terminal on February 13, 2016. With this, the output from the asset estimated to produce 100,000 barrels per day (bpd) at the time of purchase dropped to 15,000bpd and at a point, production dropped to zero.

    “We were lifting our own share of the production with barges just to be able to pay our workers. Therefore, it is not fair to use a national union to bring down a private company. It is a wrong signal to any investor whether foreign or indigenous. The government is wooing investors to come to Nigeria and invest in order to create jobs, so labour should not frustrate this initiative.

    “As I speak with you, the $558million we borrowed from Nigerian banks and other international finance firms to acquire the asset have not been repaid in its entirety and we took another loan, which is almost the same amount, to repair the facilities and we are paying interests on these loans.

    Neconde Energy Managing Director, Frank Edozie, corroborated Azudialu. He said despite the challenges the firm faced from the time Shell’s stakes in the oil field were bought in 2012, it had placed the welfare of its staff a priority.

    He said at the time of purchase the potential production from the asset was 100,000 bpd but on completion of the acquisition, it fell to about 52,000 bpd. Following the long battle for operatorship, attacks on oil facility, especially the Forcados pipeline, production dropped to zero.

    “We produce only 15,000 bpd and we lift the oil with barges to the export terminal just to ensure that our staff salaries are paid. Our workforce has remained a key factor in the evolution of Neconde, and their well-being remains important to us. We are a people-centred organisation, so the value we place on employees is not just because we know that our continued existence is dependent on them, but mainly because every human being deserves a good life, and should be treated fairly.

    “For instance, a component of our strategic goal for the year is to achieve an estimate of 70,000bpd. This has led us to develop “barged production” as an alternative to crude evacuation using the Trans Forcados Pipeline which has been out of service since February 13, 2016. We have also undertaken some strategic steps, such as rehabilitation of Batan and Odidi Flow Stations, to enable the achievement of our targeted peak gross production rate, revamping of Jones Creek and Egwa Fields for workover of existing wells and development of other infrastructure which includes refurbishing a gas Central Processing Facility (CPF) in Odidi as well as commencement of re-entry of Odidi, Jones Creek fields Egwa 1 & 2,” he added

  • NCDMB, NLNG sign compliance agreement

    NCDMB, NLNG sign compliance agreement

    The Nigerian Content Development and Monitoring Board (NCDMB) and the Nigerian Liquefied Natural Gas Company (NLNG) have signed a service-level agreement (SLA) committing to compliance with the provisions of the Nigerian Content Act and timely approvals of documents.

    NCDMB Executive Secretary, Simbi Wabote and the Managing Director of NLNG, Tony Attah signed the documents on behalf of their organisations in Abuja.

    The SLA, first of its kind in the oil and gas industry, would be adopted as the template for managing documentations, contracting and expatriate quota between the Board and international and local operating companies.

    The agreement obligates NLNG to submit to the NCDMB documents like the quarterly job forecast, Nigerian Content plan, bidders list, Nigerian Content evaluation criteria and Nigerian Content technical bid, among others, while the Board has to respond on specific timelines. Should the Board fail to respond in accordance with the provisions of the SLA, NLNG can proceed with its tendering process after informing the Board in writing or email.

    The Executive Secretary acknowledged that NLNG’s operations were time sensitive, adding that the SLA would ensure that “NLNG is not exposed to violations and NCDMB is not a blocker to the business.”

    He said the SLA was a key strategy of shortening the contracting cycle, cutting the cost of projects and improving compliance with the Nigerian Content Act.

    Wabote explained that activities of the NCDMB impact on the business of the NLNG while the company’s operations also influence how the Nigerian Content Act is viewed by stakeholders.

    He also canvassed greater collaboration between the two organisations, requesting for NLNG’s support towards the development of a drydock facility in the Niger Delta region, to cater for the maintenance of big vessels, including LNG carriers.

    The Managing Director of NLNG praised the Board for the speedy development of the SLA, describing it as an innovative way of addressing the company’s concerns.

    He emphasised that NLNG was bound to comply with provisions of the Nigerian Content Act but was also pressed by the urgency required in making decisions for its business.

    Attah noted that the SLA provided an opportunity for consolidating the company’s collaboration with the Board and delivering on its mission of contributing significantly to the Nigerian economy.

    He recalled that NLNG recorded high Nigerian Content achievements in the construction of its last six ships as goods worth over $10 million were exported from Nigeria to South Korea and utilised on the ships.

    On the development of drydock facilities, Attah promised to work with the Board, adding that the company had previously constituted a consortium to identify and assess possible sites but was yet to make appreciable progress.

  • Challenges, accomplishments

    Challenges, accomplishments

    The two-year-old President Muhammadu Buhari administration has been both challenging and rewarding. It came in when the global oil industry had one of its worst price slumps. At home, it experienced one of the worst attacks by militants in the oil-producing Niger Delta region and insurgency by the Boko Haram sect. These almost grounded the sector, but it has started looking up in the year, report EMEKA UGWUANYI and AKINOLA AJIBADE. 

    The sector witnessed one of its toughest periods in the first two years of President Muhammadu Buhari’s administration.

    It also went through radical transformation. The past years were challenging, especially in the petroleum industry, following the drastic fall in oil price from an average of $100 per barrel to less than $30.

    Unlike the previous price falls that recovered within a year, the one that started around August 2014 has continued. By first quarter of last year, crude price had crashed to below $30 per barrel till the Organisation of Petroleum Exporting Countries (OPEC) and non-OPEC members struck a deal to cut output by 1.8million barrels per day last December. This boosted price and ever since, it has remained at an average $50 per barrel.

    As a country that is dependent on proceeds from oil sales, the two years of Buhari’s administration were hard-hit. Oil price fell below the budget benchmark, where the government hoped to raise the cash to implement the budget. As the government was battling this, militant groups in the Niger Delta region were vandalising crude and gas pipelines stalling production and export and supply of gas to thermal power stations. For example, the Shell’s Forcados pipeline was struck several times and since the last strike on the pipeline on February 13, last year,  it has been out of service.

    According to the Minister of State for Petroleum Resources, Ibe Kachikwu, Nigeria’s crude oil production has declined massively from an average of 2.2 million barrels per day last year to about 1.4 million barrels daily due to increased vandalism of crude oil pipelines.

    Kachikwu told a special session of the House of Representatives in May, last year, following attacks by the militants, Nigeria’s oil production declined by about 800,000 barrels daily.

    He said the incessant attacks on oil installations in the region impacted negatively on last year’s budget, which pegged oil production at 2.2 million barrels daily. Besides , the Minister said the government faced infrastructure decay in the industry.

    He said: “There were still a lot more things government needed to pay attention to, particularly infrastructure development. The country has not been able to invest in over the last 20 years in the oil sector. Its crude oil pipelines had not been replaced for 35 years, while gas infrastructure had not been in place, and refineries were old and next to comatose.’’

    He condemned the downstream segment of the industry where undue regulation of pump price of petrol (premium motor spirit) hindered its growth. He said the increase in pump price from N97 per litre to N145 per litre was to encourage investors in the subsector and redcue government’s fuel subsidy burden.

    With the fall in the value of naira to dollar from about N280 to over N500  at the parallel market in the first quarter of the year, access to foreign exchange (forex) by oil marketing firms became difficult, and as a country that depends on imported petroleum products for national consumption, the entire burden of importation to meet consumption fell on the governmebt through the Nigerian National Petroleum Corporation (NNPC).

    Before the increase of pump price to N145 per litre, the nation witnessed occasional fuel scarcity, which forced price of petrol to between N200 and N300 per litre.

    “No country in the world will expect that the fuel price system in the country will benefit its citizens if it doesn’t invest in infrastructure. So, we need to begin to focus on building massive infrastructure all over the country. I know how much efforts it has taken to pump products from the south to the north, to the east and to the west.

    “It has been one battle after another, but the time has come to invest in pipelines and tracking of the pipelines and begin to move with the world,” Kachikwu said.

    At a point, the import bill of $600 million monthly for petrol by the Central Bank of Nigeria (CBN) to support  PMS import became challenged due to dwindling crude production and earnings.

    In the power industry, the challenges were not different because 70 per cent of the total power generation comes from thermal power plants that run on gas. Therefore, as the pipelines are vandalised, so are power plants denied fuel. As at first half of last year, the gas supply level to power plants was pathetic. The situation was worsened by power infrastructure decay. The transmission facilities were so weak that the wheeling capacity of the network was limited. The transmission network was experiencing regular system collapse.

    There are periods there were zero supplies from the national grid.

    Lack of gas at a point rendered most of the power plants, such as Geregu, Alaoji, Ihovbor and Gbarain, built under the National Integrated Power Project (NIPP) idle. Power output that had risen well above 5000megawatts (Mw) fell to below 3,000Mw.

     

    Achievements

      

    However, the Buhari administration has recorded some outstanding successes in the sector. The partial deregulation of the downstream subsector  and finding sustainable solution to the lingering unpaid huge cash call debts and peace in the oil-rich Niger Delta as well as the recent passage of part of the Petroleum Industry Bill (PIB), are among the great achievements of this administration.

    This administration unveiled a seven- point agenda for the nation’s oil and gas sector, which created a roadmap for the development of the oil and gas industry. It is aimed at turning around the sector’s fortunes. The agenda focused on key areas, such as Niger Delta development with emphasis on securing the security of the oil producing region. With the government’s peace initiative, the region has witnessed substantive peace ensuring stable operations of oil firms in the past few months.

    The peace initiative being driven by  Acting President Yemi Osinbajo has succeeded in reducing militant activities and vandalism of pipelines in the region resulting in increased production of oil and gas. The payment schedule agreed by the international oil companies (IOCs) with the government has renewed interest in exploration and production and is boosting output. The partial deregulation has created an environment where fuel scarcity has become a thing of the past across the country.

    Other areas of agenda to turn around the industry include the creation of new oil and gas policy and regulation; business environment and investment drive, transparency and efficiency including monthly publication of the operations and financials of the NNPC that didn’t exist in the past, stakeholders management and international coordination of events in the industry, gas revolution meant to ensure sufficient and uninterrupted gas supply to power plants and industries, returning the refineries to full  capacities, among others.

    The country’s oil output has been increased to about 2.1 million barrels per day (bpd) from about 1.4million. Also, many fields that were shut in as a result of militancy are being brought back on stream. According to Kachikwu, the government expects to hit comfortably hit 2.2 million bpd production by end of the year.

    Besides, this administration spearheaded the drive for output cut by the OPEC and some non-OPEC countries, such as Russia, to shore up oil price. Since the deal was sealed, average oil price has not fallen below $50 per barrel.This development has helped to boost the government’s earnings from oil and gas.

    Within the period, some oil companies, such as Folawiyo Petroleum started production from Aje Field. Seplat Petroleum Development Company became the first exploration and production oil firm to list on the Nigerian stock market. Also, Lekoil produced its first oil from its Otakikipo Oil Mining Lease (OML) 11 located on the shoreline of south-eastern part of the Niger Delta,  ExxonMobil started production from its Erna North Phase 11 project offshore Nigeria and Universal Energy Resources started production at its Stubb Creek Field in Akwa Ibom State.

    Part of the Petroleum Industry Bill (PIB) – the Petroleum Industry Governance Bill (PIGB) was passed by the Senate. The PIB is a well-researched legal document believed to transform and make operations in the industry more transparent and efficient and had been on the table in the last 17 years.

    The PIGB was passed last week. The Senate also created three new agencies to replace the existing ones.  The National Petroleum Company (NPC) will replace the NNPC, while the Nigeria Petroleum Regulatory Commission (NPRC) will replace the Department of Petroleum Resources (DPR) and the Petroleum Products Pricing Regulatory Agency (PPPRA) and the National Petroleum Assets Management Commission (NPAMC) will be in charge of assets and liabilities of the scrapped NNPC.

    The Minister of Works, Housing and Power, Mr Babatunde Fashola, recently announced the decision  of the government to voted  N710billion for the power sector. The loan  was to address the huge debts in the sector. The debts had stalled gas supplies and generation. The electricity distribution companies (DisCos)  – the central collector of revenue for the entire power value chain – generation, transmission and distribution companies – had cried out over unpaid bills by customers, especially ministries, departments and agencies (MDAs) of the government, which built up to about N1 trillion. The development made gas suppliers to power generating companies to cut supplies. The Federal Government had to intervene by earmarking N710 billion to address the debt. The initiative has led to improved power supply since last week as output has increased to close about 5000Mw.

    According to Green Elec President, Mr. Marcel Hochet, one of the achievements recorded of the Buhari government was the provision of N700billiion loan for the operators in the sector. This would help  DisCos to improve their operations, he added.

    The Buhari government is making efforts to ensure that the solid minerals sector becomes vibrant. The Solid Minerals Minister, Dr Kayode Fayemi has been having consultations with stakeholders in the sector. Just recently, the World Bank provided $150million loan to the sector to encourage its development.

     

  • Nigerdock graduates 48

    Nigerdock Plc has graduated 48 trainees from its Training and Development Academy under Egina Floating Production, Storage and Offloading (FPSO) Project.

    The institution offers quality and competence needs-based training for its workers and clients.

    The Nigerdock Academy, which is globally recognised, has trained tradesmen and professionals for over 6,000  graduates in various skills, including project management, quality assurance, occupational health and safety, welding, fitting, painting and coating, machining, lifting, rigging and scaffolding inse inception.

    According to the Director, Group Corporate Affairs, Jagal, Joy Okebalama, “Just some weeks ago we unveiled the re-branded Nigerdock training and development academy and today we are yet again celebrating and graduating 48 professional trainees.

    ‘’These trainees are university graduates that have trained in several skill sets, including project engineering, project planners, Welding engineering, fabrication engineering, post-weld heat treatment – quality assurance, quality control (QAQC), lifting operations, coating inspection, contract administration, health safety and environment, non-destructive technicians, cost control, procurement specialists, dimension control, welding inspectors, materials control & monitoring and Information Communication Technology.”

    These training were in agreement with Samsung Heavy Industries Nigeria (SHIN) Limited for the delivery of National Human Capacity Development on the job training under the EGINA FPSO Project for 15 months – February 1, last year to April 28.

    “These  trainees received hands-on-training, based on curriculum focused on prescribed international certifications for each skill-set from internationally accredited subject matter experts. They benefited from training in real life environment – from start to finish with nothing simulated, in-depth theoretical and hands-on training and access to pool of internationally accredited subject matter experts in different skillsets.

    ‘’Most of the certifications were obtained  from Oil and Gas Training Association of Nigeria (OGTAN)-member training service providers while some were obtained overseas due to their non-availability in country,” she added.

    One of the graduates praised Nigerdock for empowering them with the quality expertise through the training and development academy. “It has not been an easy 15 months, but itis a transforming experience none of us will ever forget.

    ‘’We have been taught by various experts and on several skills set. Nigerdock Training and Development Academy has empowered us and made us professionals who are qualified for local and international practice. With our t raining we are all internationally certified. We are exceptionally grateful that this training academy is located within the shores of our country and it is one we can boast of.”