The Nation Newspaper

Category: Energy

  • Dialogue may check attacks on oil facilities

    A combination of the instrument of dialogue and force would help in securing the oil facilities in Nigeria, the Managing Director, Exxon Mobil, Mark Ward, has said.

    Ward at an oil and gas conference in Lagos, said it is not good to use force always to protect oil installations in the country, arguing that force could help check attacks on oil facilities.

    He said: ‘’ Some of the challenges in the sector are social in nature. They have to do with the communities where oil is being produced. Dialogue can be embraced to tackle some of the problems. Armed forces personnel would not be everywhere to protect oil facilities; therefore we need to explore the option of dialogue to resolve crisis.

    ‘’ Oil and gas production has given new equation to the development of the sector. The problems are complex, but not insurmountable as many people think”.

    He said Nigeria is a unique place to do business, in spite of the numerous problems it is passing through. The industry’s problems, Ward said, require collaboration among the stakeholders to be solved.

    He said five international oil companies (IOCs) announced divestment of interest in onshore blocks because of insecurity, adding that the time has come to solve the problem to move the industry forward. He said the potentials of the industry is huge and cannot be compared to any other sectors of the economy. This, he said, is evident by the contributions of the sector to the nation’s Gross Domestic Product(GDP).

  • Ogoni community seeks speedy trial of case against Shell

    Ogoni community seeks speedy trial of case against Shell

    Three years after suing Shell in  a London Court for oil spillage, the  Bodo community in Ogoniland in  Rivers State, is seeking speedy hearing of the case. The community has asked its chiefs and London solicitors – Leigh Day & Co – to fast-track the hearing of the case.

    The Chairman of the Council of Chiefs, Mene Slyvester Kogbara, told The Nation that the over 15,000 villagers wanted the matter tried speedily. He listed the group to include farmers, fishermen, artisans and traders.

    The council, he said, also demanded from the lawyers why the case is delayed and what should be done to fast-track the hearing.

    He said: “The community is worried about the delay hence the pressures from different angles to  ensure that the case is fast-tracked.  The pressure is coming from  the Council of Chiefs and the community. Meetings have been held to get the right support on the issue. Our solicitors have promised to fly to Nigeria in the next two weeks to give us the updates vis-a-vis efforts being made to speed up the hearing of the case.‘’

    Mene said the community  believes that  the court would favour it.

    ‘’We are not contemplating failure at the London Court where Leigh Day & Co has been standing as our Solicitors since the case started a few years ago. The last thing on our mind is defeat at the court. We have enough evidence that the oil spills have ravaged our land  and affected socio-economic activities. Shell has accepted responsibility for over two oil spills in 2008 that polluted the waterways of the fishing communities, even though it is  insisting that the volume spilt and the number of those who lost their livelihoods as a result is exaggerated.

    “Though the case has suffered delay, the victory is sure because the court has promised to be fair to all the parties concerned on the issue. Once there is a fair hearing and presentation in a court, victory is assured. Part of the demands is that Shell should come and clean the land since the communities are running short of food supply.’’

    Mene said the community would not disclose the amount of compensation expected from Shell in line with the advice of their lawyers.

    He said other community affected by the oil spills are Bomu, Gbe, K& B, Dere,  and Kpor Gol.

    ‘’For technical reasons, we have agreed individually and collectively not to disclose the worth of the compensation expected on the issue of spillage and its attendant destruction to the environment,‘’ he added.

    Efforts to get Shell’s spokesman, Precious Okolobo,  to speak on the issue proved abortive. Text messages and calls made to him were not replied.

    The battle for compensation began six years ago when the community discovered that  spills  from oil exploration  have affected their land. The spills from Shell wells have ravaged many areas in the Niger Delta. The region has been hit by problems, including sabotage, kidnappings of oil workers, theft of crude, and conflicts between communities over clean-up contracts or compensation deals.

  • ‘Enabling environment ’ll make Nigeria oil, gas leader’

    ‘Enabling environment ’ll make Nigeria oil, gas leader’

    Creation of a stable and investor friendly environment will help Nigeria maintain its position as Africa’s leading oil and gas producer, the Chief Executive Officer, Oando Energy Resources (OER) , Mr Olapade Durotoye, has said.

    He listed short, medium and long term strategies that would keep Nigeria as Africa’s oil and gas leader.

    He said in the short term, the Petroleum Industry Bill (PIB) should be such that it would clarify  both local and foreign investment decision making.

    He explained that the marginal field award round due this year would unlock reserves to the independents oil firms, through the relinquishment clauses in place for proved undeveloped fields and divestments by international oil companies (IOCs).

    He canvassed local legislation that would grant indigenous independents a competitive advantage and reinforced action by the government and other stakeholders to ensure sustained curtailment of militancy and political strife in oil and gas producing areas, as well as crude theft reduction.

    He urged the Federal Government to find alternative  solutions to the Nigerian National Petroleum Corporation (NNPC) Joint Venture (JV) funding problems, which the JV operators complain of unduly delays operations.

    In the medium term, Durotoye said implementation of pro-exploration regulatory reforms is  vital, adding that the continued global economic recovery eases capital markets and improves smaller independent producers’ access to funding.

    He called for support to the power sector reform, which he noted has increased domestic gas demand and has boosted Nigeria’s domestic gas industry.

    On the long term, he urged the government to key into the long term progressive energy policies from producing countries and also support the increasing technology transfer to indigenous independents as a result of partnerships with IOCs.

    He stressed the need for liberalisation and consistency of government policies as enabler for economic and indigenous players’ growth.

    Durotoye said harnessing the opportunities in the sector requires careful management of known risks,adding that on macroeconomic level, the global economy is slowly emerging from the crisis and activities are on the increase giving rise to future growth from emerging and frontier markets to replace demand growth in the developed world.

  • Chevron chief advises on Niger Delta growth

    Chevron chief advises on Niger Delta growth

    The Executive Vice President of Policy and Planning of Chevron Corporation, Rhonda Zygocki has said the only way the Niger Delta region can reach its full potential is when all stakeholders start working together in new collaborative ways to provide an integrated platform for building capacity towards conflict resolution and long term development in the region.

    Speaking during her visit to Nigeria, she said: “The Niger Delta will only reach its full potential when all stakeholders start working together in new collaborative ways to provide an integrated platform for building capacity for conflict resolution and long term development in the region.”

    Zygocki, who was in Warri, Delta State as part of her working visit to Nigeria, took time to assess the progress being made by the Niger Delta Partnership Initiative (NDPI), established by Chevron in 2010 as part of its social investment strategy in collaboration with its Nigerian affiliate.

  • ‘NNPC committed to gas delivery’

    ‘NNPC committed to gas delivery’

    The Nigerian National Petroleum Corporation (NNPC) has said it is committed to the Federal Government’s gas revolution agenda to ensure efficient gas-to-power and gas-to-industry deliveries and sufficient gas supply for domestic consumption.

    NNPC’s Group Managing Director, Andrew Yakubu, spoke during the combined opening ceremony of the batches 073 to 079 capacity building programme of the NNPC tagged Chief Officers Management Development programme (COMDP) in Abuja.

    The Group General Manager, Group Public Affairs Division, NNPC, Ohi Alegbe, said Yakubu noted that the NNPC is saddled with ensuring that the abundant gas value chain is explored maximally, stressing that the corporation must do everything possible to make the gas revolution agenda succeed.

    Yakubu admonished the participants to come up with creative ways of dealing with the target of fully monetising the gas resource endowment of the nation, which remains a crucial deliverable of the Federal Government’s gas revolution Agenda.

    He emphasised that the management was fully committed to supporting the capacity development programme and will continue to provide all resources required to sustain growth of the programme.

    In his lecture titled: “Gas commercialication and economic growth,” Prof Pat Utomi of the Lagos Business School, said the NNPC is required to deliver on the mandate of the gas-to-power strategy execution and effectiveness.

    He noted that there was every need for the NNPC to build human capital focused on the gas knowledge economy that will ensure domestic gas utilisation and provision of strong gas infrastructure to protect the environment and bottle the gas for effective consumption.

    The Group Executive Director, Corporate Services, NNPC, Dr. Dan Efebo, assured the participants of the preparedness of management to expose them to knowledge that will deliver on the various core mandates of the corporation.

    The  COMDP batches 073-079 comprised 375 candidates and they are expected to run a four-module programme, which includes leadership, problem solving research work, oil and gas fundamentals and emerging trends in oil and gas industry.

    The programme, which is mandatory for senior staff, has equipped several members of staff with skills and competences for transition to management cadre in the last 24 years.

  • IPMAN chief harps on productivity

    The National President of Independent Petroleum Marketers Association of Nigeria (IPMAN), Mr Chinedu Okoronkwo,has appealed to  members to be committed to building a stable petroleum sector.

    Okoronkwo, who made the appeal in Lagos, advised members that  through such commitment the association would move the downstream sector forward and  avoid intra-organisation wrangling.

    He urged members to develop a sustainable model that would ensure uninterrupted fuel supply in distribution chain.

    He called on the government to develop fuel haulage by rail through fixing the railways.

    He also called on members to shun corruption and ensure steady distribution of petroleum products across Nigeria to prevent scarcity.

    Okoronkwo, who took over from Aminu Abdulkadir, promised that his leadership would be devoid of selfishness and pursuit of parochial interests adding that accountability and efficiency would be the watchword of his leadership.

    He expressed his readiness to  stop the incessant harassment and victimisation of IPMAN members in some of the association’s units and give priority to their welfare.

    Okoronkwo also commended the stability and growth in the petroleum sector during the tenure of the Minister of Petroleum Resources, Mrs Diezani Alison-Madueke.

    He said a monitoring team would be inaugurated to ensure conformity in all the IPMAN outlets nationwide.

    The IPMAN chief said the association is leading the campaign on use of liquefied petroleum gas (LPG) as against kerosene and noted that many Nigerians had switched from the use of kerosene to gas.

    He assured that IPMAN would continue to work with Products and Pipeline Marketing Company (PPMC), a subsidiary of the Nigerian National Petroleum Corporation (NNPC) in all the PPMC’s depots across the country to ensure seamless product supply to all nooks and crannies of the Nigeria.

    Okonkwo said IPMAN members control over 85 per cent of Nigeria’s petroleum product retail outlets, a development that makes the association a dominant player in the downstream market, he added.

    He also described the Nigerian Content Act as a major enabler for building indigenous capacities for the long term survival of the oil and gas industry.

    “Nigerian Content Act is another achievement that epitomises the depth of the minister’s patriotism. The step is to create opportunities for indigenous participation in the development of the nation’s oil and gas industry.

    “Nigerians require leaders with a clear idea of what is required to attract real development to the society,” he said.

    The IPMAN chief, however, condemned the activities of the pipeline vandals and crude oil thieves, saying the development has been a great challenge to optimising output from the nation’s refineries.

     

  • Shell’s, others’ divestment: Contractors seek bidding review

    Shell’s, others’ divestment: Contractors seek bidding review

    In anticipation of the sale of Shell’s and other international companies’ marginal oil fields, drilling contractors are seeking a review of contract bidding to get more jobs.

    Speaking on the sideline at the second technical session of a conference by the International Association of Drilling Contractors (IADC), Nigerian chapter, in Lagos, its Chairman, Sola Falodun, said this became necessary to enable the contractors operate better as opportunities arise.

    He said the decisions of Shell, Chevron and others to sell their stakes had opened up opportunities for drilling firms, adding that a review of the bidding for contracts was necessary. In Falodun’s view, the period between the bidding and winning of a contract is long.

    He said: “The process of awarding contracts is long. Right now, it takes an average of about two and half years for a contract to be awarded from the bidding stage. This is not sustainable because firms have to wait for long before getting new jobs. It does not make the system effective and robust.

    “Another problem is that the contract is short-lived. It is a two-year plus one contract. The contract should be five-year term to enable the companies re-coup their investments, and to also provide them a window through which they would be able to meet their financial obligations without being choked up.’’

    The industry, Falodun said, has entered an era where drilling contractors, among other operators, would perform better, following the divestments of the multinational oil firms.

    “Though the Nigerian Content Development Monitoring Board (NCDMB) has directed that certain percentage of oil and gas business should be given to local operators to boost their participation in the industry, there is the need for drillers to take advantage of the opportunities unfolding in the sector. We have been able to handle some of the drilling projects undertaken by the foreign-owned companies. In areas where we are constrained, we synergise our operations by partnering with companies abroad,’’ he added.

    He said problems, such as funding and weaker commercial structure, were hindering the operations of drilling contractors, stressing that the development has prevented them from acquiring assets.
    Falodun said drilling contractors pay huge interest rates on facilities obtained from banks, noting that the issue has impacted negatively on their operations.

    “The interest we pay on facilities is higher than what obtains in other climes, as well as putting us in a disadvantage position. Based on this, the association is seeking a review of bidding processes to encourage growth. A lot of companies have rigs, but could not put them to productive use due to failure to get contracts. Political patronage has favoured some oil companies, while it has affected others,‘’ he said

    On oil rigs, he said the process of awarding contracts in the industry is discriminatory, noting that wrong people get most of the contracts, thus resulting in low utilisation of oil rigs and its attendant production hitches. The problem is going to have a cumulative effect on the entire production process, he warned.

    He said rigs oil rigs are multi-billion assets, noting that many of the 42 rigs in Nigeria are idle because there is no job for them.

    Also, the Chairman of Afren Plc, Mr Egbert Imomoh, emphasised the need to train workers in the oil drilling business well.
    Imomoh, who was guest speaker at the event, said the association has done well by inaugurating a study to look into the training gap in the industry.

  • Ogoni community seeks speedy trial of case against Shell

    Three years after suing Shell in a London Court for oil spillage, the Bodo community in Ogoniland in Rivers State, is seeking speedy hearing of the case. The community has asked its chiefs and London solicitors – Leigh Day & Co – to fast-track the hearing of the case. The Chairman of the Council of Chiefs, Mene Slyvester Kogbara, told The Nation that the over 15,000 villagers wanted the matter tried speedily. He listed the group to include farmers, fishermen, artisans and traders. The council, he said, also demanded from the lawyers why the case is delayed and what should be done to fast-track the hearing. He said: “The community is worried about the delay hence the pressures from different angles to ensure that the case is fast-tracked. The pressure is coming from the Council of Chiefs and the community. Meetings have been held to get the right support on the issue. Our solicitors have promised to fly to Nigeria in the next two weeks to give us the updates vis-a-vis efforts being made to speed up the hearing of the case.‘’ Mene said the community believes that the court would favour it. ‘’We are not contemplating failure at the London Court where Leigh Day & Co has been standing as our Solicitors since the case started a few years ago. The last thing on our mind is defeat at the court. We have enough evidence that the oil spills have ravaged our land and affected socio-economic activities. Shell has accepted responsibility for over two oil spills in 2008 that polluted the waterways of the fishing communities, even though it is insisting that the volume spilt and the number of those who lost their livelihoods as a result is exaggerated. “Though the case has suffered delay, the victory is sure because the court has promised to be fair to all the parties concerned on the issue. Once there is a fair hearing and presentation in a court, victory is assured. Part of the demands is that Shell should come and clean the land since the communities are running short of food supply.’’ Mene said the community would not disclose the amount of compensation expected from Shell in line with the advice of their lawyers. He said other community affected by the oil spills are Bomu, Gbe, K& B, Dere, and Kpor Gol. ‘’For technical reasons, we have agreed individually and collectively not to disclose the worth of the compensation expected on the issue of spillage and its attendant destruction to the environment,‘’ he added. Efforts to get Shell’s spokesman, Precious Okolobo, to speak on the issue proved abortive. Text messages and calls made to him were not replied. The battle for compensation began six years ago when the community discovered that spills from oil exploration have affected their land. The spills from Shell wells have ravaged many areas in the Niger Delta. The region has been hit by problems, including sabotage, kidnappings of oil workers, theft of crude, and conflicts between communities over clean-up contracts or compensation deals.

  • ‘Enabling environment’ll make Nigeria oil, gas leader’

    Creation of a stable and investor friendly environment will help Nigeria maintain its position as Africa’s leading oil and gas producer, the Chief Executive Officer, Oando Energy Resources (OER) , Mr Olapade Durotoye, has said.
    He listed short, medium and long term strategies that would keep Nigeria as Africa’s oil and gas leader.
    He said in the short term, the Petroleum Industry Bill (PIB) should be such that it would clarify both local and foreign investment decision making.
    He explained that the marginal field award round due this year would unlock reserves to the independents oil firms, through the relinquishment clauses in place for proved undeveloped fields and divestments by international oil companies (IOCs).
    He canvassed local legislation that would grant indigenous independents a competitive advantage and reinforced action by the government and other stakeholders to ensure sustained curtailment of militancy and political strife in oil and gas producing areas, as well as crude theft reduction.
    He urged the Federal Government to find alternative solutions to the Nigerian National Petroleum Corporation (NNPC) Joint Venture (JV) funding problems, which the JV operators complain of unduly delays operations.
    In the medium term, Durotoye said implementation of pro-exploration regulatory reforms is vital, adding that the continued global economic recovery eases capital markets and improves smaller independent producers’ access to funding.
    He called for support to the power sector reform, which he noted has increased domestic gas demand and has boosted Nigeria’s domestic gas industry.
    On the long term, he urged the government to key into the long term progressive energy policies from producing countries and also support the increasing technology transfer to indigenous independents as a result of partnerships with IOCs.
    He stressed the need for liberalisation and consistency of government policies as enabler for economic and indigenous players’ growth.
    Durotoye said harnessing the opportunities in the sector requires careful management of known risks,adding that on macroeconomic level, the global economy is slowly emerging from the crisis and activities are on the increase giving rise to future growth from emerging and frontier markets to replace demand growth in the developed world.

  • Nigeria, others to depend more on fuel imports

    Nigeria, Ghana, Algeria and other African countries’ dependence on fuel imports is likely to grow as their refining projects struggle to get off the ground, a Director, Origination and Investment, Vitol Energy International, Chris Bake, has said

    Vitol, the world’s top oil trader with over $300 billion in annual revenues, seeks to meet African demand in competition with other traders such as Glencore and Trafigura and with large Asian refiners.

    Speaking to Reuters in Lagos, Bake said dozens of new refining projects have been announced in Nigeria and other countries, but they are unlikely to be built unless they are either gigantic or with guaranteed crude supply in a landlocked location.

    “Micro refineries in waterborne locations are not a viable way to get a return on capital. You have to go big, and today big means a 300,000 to 500,000 barrel per day complex refinery and $5-$15 billion of capital,” Chris Bake, director of origination and investments, told Reuters in a telephone interview.”To deploy that is challenging,” he added.
    Bake added that he expected one large refinery to be built in West Africa but that it could take five to seven years, while new plants in east Africa were less certain given strong competition from the Middle East.

    Vitol estimates that Africa’s fuel demand amounts to 3.71 million barrels per day in 2014, worth about $440 million a day, based on ICE gasoil futures prices. That is close to a 3 percent increase from the 2013 estimate.