The Nation Newspaper

Category: Energy

  • Oil and gas experts meet in private drinks reception

    Oil and gas experts meet in private drinks reception

    The Private Drinks Reception, for 2017, organised by the Oil and Gas Council, took place in Lagos – Nigeria.

    The gathering which was held for three (3) hours was attended by senior executives from across Nigeria’s oil and gas, and finance and investment communities. The senior executives came together to facilitate new investment, encourage business development, share best practice, guarantee peer-to-peer networking, offer new industry insight.

    Officials from the upstream, LNG/midstream, downstream and oilfield services leaders, as well as recognised energy experts and business leaders from investment banks, law firms, management consultancies, commodity trading firms, were present.

    Lagos VIP Drinks Reception by the Oil and Gas Council was sponsored by Streamsowers & Köhn and was indeed a great night of networking and meeting up with old friends.

    Present at the event, included; Simon Hoare – M.D EMEA – Oil and Gas Council, Martin Traschel – M.D PetroAfrique, Adeyemi Akinsanya Associates,  Casper Kaars-Sijpesteijn – First Exploration & Petroleum,  Chief Sastry Karra – CEO Karra Oil and Gas Limited,  Babafemi Onasanya – G.M Sub Surface Oando, Chigozie Hilary – Streamsowers and Kohn, Wofai Samuel – Media Personality, Isi Omenai – Commercial Lead – South Atlantic Petroleum, Ulf Jungclaussen – M.D ILF Consulting Engineers, Giorgio Macchiavello – M.d DormanLong Engineering, Ade Adekola – CEO Leidenschaft,  Uche Nwamara – General Councel – First Hydrocarbon Nigeria, Tunde Elesin – DeltaAfrik, Olumide Adeosun – PWC ltd, Paul Ehimen – Commercial Advisor- PetroAfrique, Victor Aniche, Jason Birtwistle, Imebong Etuk – Gastech Group, Ayokanmi Aderibigbe – Templars, Anu Bello, Hedo Chinyeaka – Century Energy Group, to name a few.

    Veteran Nigerian Broadcaster, Wofai Samuel who enjoys a valued relationship between herself and the oil and gas council, was well presented at the event in a pink vintage dress.

  • OPEC members support output cut extension

    OPEC members support output cut extension

    Ecuador Oil Minister José Icaza Romero has said the Organisation of Petroleum Exporting Countries (OPEC) and other oil-producing countries would discuss a six or nine months extension to output cuts when the Organisation meets today.

    According to Reuters’ report, Icaza Romero told reporters that “Six and nine months are both proposals on the table. We will support the majority, probably the nine months.”

    Asked whether deeper cuts would be discussed, he said: “Not at this point, I don’t think so.”

    OPEC member countries meet today in Vienna, Austria to consider whether to prolong the deal reached in December in which OPEC and 11 non-members, including Russia, agreed to cut output by about 1.8 million barrels per day in the first half of 2017.

    Also the United Arab Emirates supports extending oil output cuts for another term, the Energy Minister Suhail bin Mohammed al-Mazroui said, saying ahead of an OPEC meeting he was optimistic about meetings held between Saudi Arabia and Russia.

    “We are optimistic about the statements and the meetings held between the Saudi-Russian sides,” he stated, adding that the previous extension had helped to balance the market and maintain average prices.

    The UAE supports “the extension of the agreement for another term,” he said.

    Mexico also threw its weight behind extension of production cut. According to the Mexican deputy secretary for hydrocarbons, Aldo Flores-Quiroga, Mexico supports an extension of OPEC’s supply cuts as a way to stabilise oil markets and bring fresh investment into the country’s growing energy sector.

    Aldo Flores-Quiroga said he believed members of OPEC should and would continue plans to coordinate oil production cuts into at least 2018. He did not say whether he preferred a six- or nine-month extension, which OPEC members are debating.

    “Stable markets help provide a stable framework for investment, and that helps Mexico,” said Flores-Quiroga, who assumed his post last summer.

    Mexico, which is not in OPEC, has seen its oil industry atrophy in the past 50 years due to underinvestment and hostile regulation of foreign partners.

    Constitutional changes in 2013 have slowly begun to attract capital to the second-largest Latin American economy, but low oil prices have hindered Mexico City’s efforts.

  • Why Nigeria’s power need is peculiar, by lawyer

    • ‘It’s the only privatised sector in Africa’

    Legal adviser to the Federal Government’s Advisory Power Team (APT) Mr Dapo Akinosun, has called for a homegrown solution to Africa’s energy problems and needs. Using Nigeria as a case study, Akinosun said despite its huge challenges, Africa’s energy sector provides good business opportunities for investors. He advocated an African solution to the power problems of the continent. “My vision for Africa in the energy sector is one that is independent and interdependent, Independent by national design and perspective; and interdependent by international choice and focus”, he said.

    Akinosun spoke at the African Utility Week conference in Cape Town, South Africa. The theme of the conference is “What is the best-cost and optimal mix in Africa?”

    APT is made up of experts in various areas of the power sector, including: Gas to Power; Solar Power; Transmission; and Generation among others. The mandate of the team is to provide technical support to the Federal Government on power and to harmonize the direction of all MDAs (Ministries, Departments & Agencies) involved in the power sector.

    The team also reviews proposals from investors and foreign governments interested in participating in the power sector, with a view to advising the government. The team’s mandate makes it interface with participants in all areas of the power sector. The team  conducts physical assessment of power facilities across the country.  It is the office of the Vice President who supervises many of the Ministries Departments and Agencies (MDAs) in the power sector.

    Akinosun, the principal partner of Simmon Coopers Partners, is responsible for energy and infrastructure practice at the chambers. He has advised governments and organisations who are participants at all levels of the energy sector, in ensuring optimum effectiveness in their activities, investments, and regulatory compliance.

    Akinosun believes that the power sector is on a peculiar learning curve, the realities of which are better appreciated when put in perspective. “It should be understood that Nigeria’s power sector is the only privatised power system in the continent.

    “That in itself poses management challenges as there are no Africa specific benchmarks to use in comparison.  This becomes important when we realise that all development is achieved based on comparative models which in our case we do not have. It is therefore axiomatic that for every major achievement we need to dig within to find a solution”, he said.

    He acknowledged at privatisation was not perfect, pointing out that this has lengthened the learning curve. Akinosun noted the fluctuation of the  naira vis-à-vis the major currencies of the world. “Given that most of the components of the Nigerian power sector are imported, fluctuation in the value of the Naira makes business planning a nightmare.”

    Despite all the challenges, Akinosun believes that the industry has potential for those who are ready to invest in its energy sector. “It’s not all gloom and doom. ‘The challenges in and of themselves are business opportunities. Equally important is that the liberation of the sector has shed light into a previously opaque sector;

    “The light that has come helps to itemise in verifiable terms the opportunities in the sectors. This becomes good news to entrepreneurial interests and the investor community. In  summary, the power sector is a case of half empty and half full. The way you choose to look at it will determine if you can benefit from the sector or not, he said adding: “My message will revolve around developing home grown solutions to the energy challenges. Yes, we talk about the financial demands of the industry but it is key to break these demands into piecemeal tasks  such that the financial needs can be solved with home grown remedies rather than imported ‘medications’. To this extent, what Nigeria currently obtains from Europe and the US should be obtained from countries like Kenya, Egypt, South Africa, etc;

    “Energy is the most important commodity. Period! Energy can be measured for empirical purposes in per capita terms. Nigeria and indeed the continent have some of the great potential for demand for energy. We should not misuse this opportunity. An African that is both independent and interdependent is in the enlightened self-interest of all”.

  • Content Act to cover power, other sectors, say Reps

    The House of Representatives has said it’s work on the bill that would extend the Nigerian Content Act to other key sectors of the economy such as power, construction, information communication technology and telecommunications is to enable Nigerians enjoy the sectors.

    Members of the House of Representatives Committee on Local Content led by its Chairman, Hon. Emmanuel Ekon, stated this when the committee paid  an oversight visit to the Nigerian Content Development and Monitoring Board’s (NCDMB) premises and project sites in Yenagoa, Bayelsa State.

    The Committee chairman said the first reading on the bill to extend the Nigerian Content Act to other key sectors has been passed, adding that the House members currently are fine tuning it. “I believe the bill will be passed this year,” Ekon added. He noted that violation of Local Content Act was more prevalent in the construction sector than the oil and gas sector.

    The committee commended the NCDMB for its diligent implementation of the Nigerian Content Act,  speedy execution of its headquarters building and the Polaku pipemill projects located in Bayelsa State.

    Speaking at the Polaku pipemill site, Ekon stated that the location met all requirements for citing such a facility including proximity to natural gas needed to generate electricity for the plant’s operations, access to road, which is a driver for transporting raw materials and finished products.

    He dismissed insinuations that the Board was acting beyond its mandate by promoting the pipemill, insisting that the Nigerian Oil and Gas Industry Content Development (NOGICD) Act empowered the Board to woo investors and prepare locations especially difficult terrains so that prospective investors would be convinced to commit their funds.

    After tour of the projects, Ekon promised that the House of Representatives would pass the bill extending the Nigerian Content Act to other key sectors of the economy so that Nigerians will enjoy the benefits. He also hailed the Board and its main contractor, MegaStar, for the speedy execution of the building project.

    “I was here when this land was acquired in 2015. Then, this place was bare ground. It’s not even up to two years and eight floors are already standing. We need to sell construction companies like this because it is 100 per cent indigenous. This company has invested resources in machines, personnel and construction equipment. Nigerians, multinationals and the Federal Government should patronise these kinds of companies,” he said

    NCDMB Executive Secretary, Simbi Wabote, in his welcome address, explained to the Committee that the Board’s mandate hinged on promoting, monitoring and evaluating Nigerian Content compliance in the oil and gas industry and serving as a catalyst to attract and drive needed investments so as to grow the economy and create jobs.

    Wabote restated the Board’s preparedness to assist any local or foreign investor seeking to develop facilities, stressing that the Nigerian Content Act provided that goods manufactured in-country would always get patronised by the industry ahead of foreign alternatives.

    On the Polaku pipemill, he stated that the Board had completed the sand filling of the site, conducted environmental impact assessment (EIA) and embarked on the construction of the access road, adding that the Board entered into a Memorandum of Understanding (MoU) with Titan Steel of China, who are expected to commence construction and complete the project by 2019.

    On the modular refineries in oil producing states – being encouraged by the Federal Government,  Wabote stated that the Board’s initiatives seek to ensure that the refineries get fabricated and assembled in Nigeria as against being imported from overseas. He also solicited support from the legislature to ensure that indigenous operating companies and the Nigerian National Petroleum Corporation (NNPC) comply fully with the provisions of the Nigerian Content Act.

  • ‘No plan to ban exporters of unprocessed minerals’

    The Federal Government will not ban individuals or companies that export unprocessed solid minerals until it grows the sector to its full potential, an aide to the Mines and Steel Minister, Mr. Yinka Oyebode, has said.

    He said the Ministry had neither penciled any institution for proscription nor used any of its agencies to stop people from exporting unprocessed mineral resources Europe or other continents as claimed in some quarters.

    He said instead, the government was focusing on how to develop the sector by providing incentives to local and foreign investors, who want to build plants for processing solid minerals into other products in the country.

    In an interview with The Nation in Lagos, he said the Ministry and the Federal Government were interested in making the sector a major contributor to the nation’s Gross Domestic Product (GDP) by welcoming investors into the industry.

    Oyebode said such incentives include equipment leasing, funding, expertise, less stringent import requirements, access to funding, and tax holiday.

    He said investors might enjoy tax holiday, a development, that would exclude them from paying taxes over  time. According to him, investors will be provided with information that would aid excavation.

    He added that the idea would enable investors to know where, how and why the plants should be sited at a location.

    He said mining equipment were expensive, adding that the incentives would help investors to mitigate their costs.

    Oyebode, a Senior Special Assistant(SSA) Media, Dr Kayode Fayemi, said a conducive environment was vital to the sector’s growth, adding that the idea would enable the Federal Government to achieve its goals of diversifying the economy by not depending only on crude oil.

    He said: “Though the government is not happy that its people are exporting unprocessed minerals, it is not interested in banning the firms that engage in such activities. Rather, the government is concentrating on how to grow the sector by providing incentives to investors that intend to build processing plants in the country. By so doing, Nigeria would be enjoying some value additions where the solid minerals are taken for processing and not countries abroad.

    “Venezula extracts petrochemical materials from Nigerian crude oil, among deriving other value additions. To prevent this in solid minerals, the Federal Government wants investors to build plants for processing of minerals such as gold and other minerals into finished products.

    “For instance, if a mining processing plant is cited in Ibadan (South west) or Kaduna in the North and it creates 1,000 jobs or more, it will have a multiplier effect on the economy as many people will benefit from it.’’

  • Labour needs to encourage investment, says Azudialu

    The Chairman of Obijackson Group, indigenous oil and gas conglomerate, Dr. Ernest Azudialu, has advised labour organisations in Nigeria to encourage attraction and protection of investments by local and international investors.

    He spoke during an interaction with reporters in Lagos when the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Lagos branch, planned to picket the company. 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 for transfer benefits and upward 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 and to make the office and workers to be close to the operational area, the head office of the company was moved to Warri, which generated 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 myriad of challenges it faced, ensured the workers’ 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.

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

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

    “Currently, 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 wellbeing 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 13th February, 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

  • 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, in just two and a 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 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 present 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 for 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.

  • ‘Planned 20,000 Mw of power is inadequate’

    ‘Planned 20,000 Mw of power is inadequate’

    The Federal Government‘s  20,000 megawatts (Mw) of electricity target is too small for the country, Green Elec Chief Executive Officer,  Mr. Marcel Hochet, has  said.

    He said the government should rather focus on achieving 40,000Mw to meet its energy need.

    Green Elec is a solar energy solution firm with offices in Nigeria and France.

    In an interview in Lagos, he urged the government to address the problems in the sector.

    He said gas, hydro and renewable energy are the most feasible sources of power generation, asking the government to leverage them for growth.

    According to him, poor infrastructure had hindered past administrations’ plan to provide regular power supply. He added that the government should solve the problems in the sector to encourage growth.

    Hochet said: “The country’s population is growing at a geometrical progression of 3,6, 10 and 14. By this, the population is growing faster than the available resources in Nigeria. Because of this problem, the government needs to harness potential in the country to stabilise power supply.”

    According to him, countries, which boast of huge megawatts of electricity, combine gas, hydro, sun, wind and other sources of generating power to achieve growth.

    “France was able to generate its  65,000 mw by combining different methods of power generation. The same applies to South Africa, which generates 40,000Mw of power for its population of 45 million. But in Nigeria, we are finding it difficult to deliver 10,000Mw. The highest megawatts of electricity so far generated were 5,000 Mw. That was achieved in the first quarter of 2016.  Nigeria should follow the footsteps of developed economies to achieve that goal,” he added.

    He said though solar and other renewable energy sources generate fewer megawatts of electricity, they help in boosting power supply.  He said if the government was desirous of meeting energy needs of its people, it should  explore opportunities at its disposal to achieve it.

    He urged the Federal Government to improve its efforts of providing stable power, noting that the government has started well by privatising the sector.

  • LSE lists three Obijackson Group firms in maiden report

    LSE lists three Obijackson Group firms in maiden report

    About 343 firms in Africa were listed in the maiden edition of the Companies to Inspire Africa Report unveiled in Lagos. Fifty-nine were Nigerian companies, with three from the Obijackson Group, EMEKA UGWUANYI reports.

    The London Stock Exchange (LSE) has unveiled the maiden edition of its “Companies to Inspire Africa Report.”

    The unveiling of the report which covers 343 African firms of which 59 are nigerian companies took place in Lagos during the week.

    At the event, LSE Group Chief Executive Officer, Xavier Rolet, said: “The motivation behind researching and publishing this report was to demonstrate what we instinctively believe – that these companies are fundamental to the successful future of the African economy, with enormous potential for growth and high quality job creation. High growth private companies are fast becoming the driving force behind African economies: and are developing skills, creating high quality jobs and driving economic growth.”

    He said three of the 12 companies under the Obijackson Group, an integrated oil and gas conglomerate, made the list, which was compiled by LSE, African Development Bank (AfDB), PricewaterhouseCoopers (PwC), CDC Group, Citi, FTI Consulting and Diamond Bank.

    The companies are Nestoil, Energy Works Technology (EWT) and B&Q Dredging. Nestoil Limited is the Group’s oil and gas pipeline construction arm.

    EWT is a specialist in pressure vessels, process plant equipment, and oil and gas steel structures manufacturing. It is also an ISO 9001:2008 and UKAS-certified manufacturer. B&Q Dredging has the largest fleet of dredgers in Nigeria.

    “The report showcases Africa’s success stories to investors, policy makers and other stakeholders in the global space.

    According to Rolet, the rigorous evaluation, which resulted in the identification of the nominated firms included an analysis of the company status, growth capacity over the past three years in terms of revenues, staff strength and operational output. Revenue analysis was based on audited financial accounts, undertaken and accredited by one of the “Big Four”audit firms.

    Highlighting the efficiency of the companies in the report, Rolex said: “The companies listed and profiled in the report boast an impressive average compound annual growth rate of 16 per cent.”

    The World Bank Treasurer, Ms. Arumah Oteh, who was at the event, said:“The companies profiled in the report, not only generate vital employment opportunities and contribute to sustainable economic growth, but are also the bastions of Best Practices and Good Corporate Governance. They have also had to weather the challenges that African private entities often have to contend with, notably a difficult operating environment, weak infrastructure and inadequate access to finance.”

    Obijackson Group Group Managing Director  Dr. Ernest Azudialu-Obiejesi, who expressed delight over three of his firms making the list, said: “This recognition has joined the list of factors propelling our Group forward to the achievement of greater level of best practices, good governance, quality and efficiency, in our effort to help lift a huge number of people out of poverty on the continent. We happily accept the recognition and interpret it as a call for us in the Obijackson Group to remain focused in our mission of contributing substantially to economic growth, further creation of quality jobs, training and sustaining some of the best talents in Africa, generation of tax revenues and helping to drive forward our continent of Africa that is home to more than one billion people.”

    Also, President, Council of the European Union (EU), Prof Edward Scicluna, who also attended the unveiling of the report,  said: “The companies showcased in the “Companies to Inspire Africa  Report” will generate productive jobs and sustainable livelihoods, and this is an admirable milestone in the rise of Africa’s entrepreneurs – sharing theirs success with the global community.”

    Another guest, the Rt. Hon. Priti Patel, a member of the British Parliament and the British Secretary of State, Department for International Development, said: “Companies to Inspire Africa showcases some of the outstanding stories of innovation, bravery and growth across the continent. It brings Africa’s entrepreneurial spirit to an international audience, and I would like to congratulate all the companies featured, for their vision, ambition and tenacity. It is their success that will drive Africa forward to a future of prosperity and away from reliance on international aid.”

    The Obijackson Group of Companies, with exceptional technical capabilities and proven expertise in every sphere of its operations, has been acknowledged as one of the fastest-growing conglomerates in sub-Saharan Africa.

    The Group has over 2,000 employees. Its other subsidiaries are Shipside Dry-dock, Hammakopp Construction, Impac Oil and Gas Engineering, Nesthak Limited, Century Power Generation, Nesto Aviation Services and Neconde Energy Limited.

  • Punish legal fees payment defaulters, don says

    Punish legal fees payment defaulters, don says

    The Federal Government should sanction any International Oil Company (IOC) that fails to spend 100 per cent of its legal fees in Nigeria, the Head of Department, Energy Law, University of Lagos, Dr Adedayo Ayoade, has said.

    He said this had become necessary to ensure compliance with the rules guiding the operation of the sector. Cases abound where firms don’t execute the judgments they receive abroad in Nigeria, he added.

    According to him, the constitution requires that when cases are executed in a place, judgment should also be delivered and executed in the same area.

    In an interview in Lagos, Ayoade urged the government to monitor  such firms and sanction them appropriately by using the Nigerian Content Act.

    He said the IOCs in Nigeria failed to comply with the law on spending 100 per cent of their legal fees in-country as contained in the Act.

    Adedayo said: “Many foreign oil conglomerates are not complying with the Local Content Act as regards spending all their legal fees in the country. To curb the excesses of firms, which flout the rules, the Federal Government should sanction firms that are culpable of the offence. By so doing, the government is putting the firms on their toes by preventing them from taking cases abroad.”

    He urged the Board to compel oil firms to domesticate their activities to strengthen local content policy. For instance, if company ‘A’ made $20million profit yearly in Nigeria, and company ‘B’ realises $50million profit in year, they should be able to plough part of their profits into the economy. ‘’What is the percentage of profits do the firms spend in the country? This is the more reason the government must compel foreign oil firms that are operate in the country to spend the money they set aside for legal issues in Nigeria and not abroad,’’ he added.

    On expatriate quota, Ayoade said the quota has been abused by foreign oil firms, an issue that prevents Nigerians from getting jobs in the oil and gas sector and other sectors that are considered as strategic to the economy.

    He urged the Ministry of Internal Affairs to implement laws that would check the abuse of expatriate quota, stressing that such a step would help to promote local skills. He said a review of the Act, which set up the Nigerian Content Development and Monitoring Board, was necessary to address the problems in the industry.

    According to him, the review would enable the Board to provide regular reports of their activities, monitor operators, and sanction the errant. He said the Board had not been able to publicise some of its programmes, stressing that public disclosures bring about transparency and growth in a company.

    Shell’s spokesman, Precious Okolobo, said Shell Petroleum Development Company (SPDC) has neither exceeded the expatriate quota, which the Federal Government has given foreign oil firms, nor spends its legal fees abroad.

    “SPDC and other Shell companies in Nigeria are promoting Local Content in their operations. The firms have won awards for promoting Local Content initiatives,” Okolobo added.

    The Chairman House of Representatives Committee on Local Content, Hon. Emmanuel Ekon, warned the IOCs, including Samsung Heavy Industries of South Korea against flouting Local Content Laws.

    During a visit to Lagos, the Committee said it was opposed to  where IOCs exceed the expatriate quota, among other rules in the Nigerian Content Act, adding that the legislature would take drastic measures against any firm that violates the rules. Adherence to the policy is important to encourage the growth of indigenous oil operators, he asaid.

    Lagos Oil and Gas Base (LADOL)Managing Director, Ms Army Jadesinmi, said the sector would grow, if the relevant agencies comply with the provisions of the Local Content Act, adding that such would lead to job creation. She said job creation would stimulate growth, noting that some operators had assisted in providing growth.

    Jadesinmi said LADOL has created jobs at its fabrication yards, and other technical areas, adding that oil and gas zones are veritable means of providing jobs. ‘’LADOL is working towards becoming an industrial hub in West Africa. The feat is achievable with the right operating environment,’’ she added.