The Nation Newspaper

Category: Energy

  • Challenges in developing marginal fields

    Challenges in developing marginal fields

    Ibigwe oil field, an onshore asset in oil mining lease (OML) 16 located in Ohaji-Egbema Local Government Area of Imo State, is one of the 24 marginal fields given out by the government in 2003 marginal fields bid round. It was awarded to Waltersmith Petroman Oil Limited, an indigenous company.

    Marginal fields programme instituted by the Federal Government was targeted at developing indigenous capacity in exploration and production, but 10 years on, only seven of the licensees have been able to produce from the assets.

    The Chairman/ Chief Executive Officer of Waltersmith Petroman Oil Limited, Mr Abdulrazaq Isa, who spoke with reporters in Lagos, highlighted the challenges the management went through before hitting first oil from the asset, which produces 4,000 barrels of oil per day (bopd).

    The challenges are not far from what has been keeping other licensees away from coming on stream after 10 years. Isa confirmed what the Director of Petroleum Resources, Osten Olorunsola identified as the major problems of marginal fields players. These include dearth of funds and litigations.

    Isa said although the intention of the government as regards marginal fields, is excellent but frankly, it is difficult for local players to develop the fields without the involvement of foreign multinational oil firms. This, he said, is because even though it is called marginal fields, the fund required to develop the fields is not easy to access by small players such as Waltersmith Petroleum.

    He said it took determination, courage and resilience for Waltersmith Petroleum to read where it is today because to secure the initial finance was extremely difficult.

    He said:“The company was awarded a marginal field licence to operate Ibigwe field in 2003 and signed a farm-in-agreement with the Shell Petroleum Development Company in April 2004. The first oil from the field was attained in March 2008 after initially putting in place an early production facility including a 20,000 barrels crude storage tank.

    “In the course of development, we had a dry hole, which cost about $27 million, and which went down the drain like that, and we had to write it off, and we also had a blowout. These are some of the experiences but because we are a small company such an amount is very significant, but for the big international oil companies (IOCs) drilling a dry hole is a normal thing that you do encounter because you are looking for oil.

    “It was a big issue but somehow we persevered, remained focused and determined that we will do this work and we were able to be where we are today. It took us 10 years to achieve the 4000 barrels per day production we are doing currently, drill five wells, one work-over campaign and 15,000 barrels per day flow station. But I know some of my colleagues that have not started. It took the determination of my colleagues and I and the entrepreneurial spirit to make it work.

    “The marginal filed programme was designed to develop capacity but because of the complex nature of the exploration and production (E&P) business, we truly cannot do it with indigenous capacity alone. It is impossible and that is why we said that we used the services of international oil companies. In as much as we try to get Nigerians involved in some of the activities, there are still segments of it that Nigerians have not developed capacities to handle. That is why we continue to use companies such as Halliburton and Schlumberger because they have the technology.”

    He, however, noted that from the point of view of the company’s internal capacity, there are a number of Nigerians that are trained around the world that are in the company. He said such Nigerians have worked in the United States and Venezuela and other parts of the world for big companies such as Shell and Mobil.

    “But we are using these kind of projects to bring them back home and they are building capacity locally and that has helped us essentially to get to where we are and to the best of our ability. We use the services of international oil companies and the training facilities of these international oil companies and institutions because we ensure that our people are trained overseas and in one of the best institutions that offer training in oil and gas, engineering, management and all other technically associated aspects of our business,’’ he said.

    “For us building capacity is critical and we will continue to focus and invest in that because we are positioning ourselves for the future as indigenous E&P company that will focus on Nigeria and seek opportunities coming from the African continent,’’ he added.

  • IEA, IEF, OPEC hold talks on energy markets

    The International Energy Agency (IEA), International Energy Forum (IEF) and the Organisation of the Petroleum Exporting Countries (OPEC) held the third joint workshop on “Interactions between physical and financial energy markets” in Vienna, Austria.

    The high-level technical event, according to a statement by OPEC, brought together variuous experts from industry, governments, and the financial and regulatory sectors of the developed and emerging economies to discuss the interactions between physical and financial energy markets.

    The statement noted that the workshop built on insights gained from the previous two meetings held in London in 2010 and Vienna the following year, and discussions were held under the Chatham House Rule.

    The workshop is part of a wider joint programme of work agreed by the three organisations and endorsed by Energy Ministers at the 12th International Energy Forum (Cancun, Mexico, March 2010) as part of the Cancun Declaration.

    The discussions considered the following issues: the evolving interactions between energy derivatives and the broader financial markets over the last 10 years; an update on the implementation of regulation in the energy derivatives markets; expected future developments in energy derivatives trading; and a focus on Asia.

    The IEA, IEF and OPEC will produce a summary report of the workshop for their member countries, which will also be made available on their respective websites, the statement added.

  • Oil theft: Endless search for solution

    Oil theft: Endless search for solution

    Oil theft is almost becoming a norm in Nigeria as nobody raises eyebrow whenever it is mentioned. Though very strange when talked about in other oil producing countries, the nefarious act also called illegal bunkering, has remained a booming business for decades and has defied all solutions by both the military and civilian governments. EMEKA UGWUANYI Assistant Editor (Energy) reports

     

    Oil theft, also known as illegal bunkering, is the act of hacking into pipelines to steal crude, which is later refined or sold abroad. Today, it has become an organised crime with international connections. Illegal bunkering is a booming business in the Niger Delta, costing Nigeria about a tenth of its crude production daily.

    However, the amazing aspect of this crime is that despite the involvement of the security personnel – army, navy, air force, police, civil defence corps and lately the ex-militant chiefs, in monitoring of the waterways, oil theft has continued unabated. All the joint task forces (JTFs) comprising the armed forces and the police, which have been created over the years, have been unable to unravel the mystery behind the oil theft. A couple of times there have been reports of arrest of suspected oil thieves (both foreigners and Nigerians) caught with vessels loaded with stolen crude, yet none has prosecuted and jailed. Nigerians only hear of their arrests.

    Over the years, it has been reportedly said that powerful Nigerians are behind oil theft. Many Nigerians have asked whether these Nigerians are so powerful and invincible that they cannot be identified, arrested and prosecuted. Could it also be that these security operatives saddled with the duty of fighting oil theft are not telling Nigerians the truth? Nigeria is the only oil producing country that thieves continue to steal over 60,000 barrels of crude oil every day for years uncaught. Nigeria is the only oil producing country that depends on imported refined petroleum products for domestic consumption and the only oil producing country where 50 per cent of refined products meant for domestic consumption are illegally and freely diverted to neighbouring countries by marketers.

     

    Consequences

     

    Apart from the bad image it gives Nigeria abroad, oil theft results in loss of huge revenues to the federal government and oil firms that own the assets from which the oil is stolen, and also devastates the environment. Last year, the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, after several hours of closed door meeting in Lagos with service chiefs of the armed forces and the police, told reporters that Nigeria was losing 180,000 barrels of oil per day (bopd) to crude thieves, which translated to $7 billion yearly.

    Besides, she noted that apart from the $7 billion lost to oil thieves, another $5 billion was lost yearly to repair vandalised pipelines through which the thieves siphon crude.

    The meeting with service chiefs was held in May last year and the objective was to enable the security chiefs to fashion out new ways to battle the oil thieves through collaboration and forming new joint task forces that would check the escalating oil theft in the country. But 11 months after, no tangible result has come out of the meeting.

    Speaking at the Nigeria Oil and Gas conference in Abuja, Mrs Alison-Maduke said that oil theft is hurting the economy. She added that it has become a multi-million dollar business, which is run by international crime syndicates. She said the products from bunkering are not sold in West Africa, neither is the financial output laundered in West African banks, but they end up in far-flung international fiscal institutions.

    The Country Chair, Shell Companies in Nigeria and Managing Director, Shell Petroleum Development Company of Nigeria Limited (SPDC), Mutiu Sunmonu, at a forum in Abuja said if Nigeria wants to maintain its competitive edge in oil production in Africa, it should contain security issues in onshore province.

    “Onshore, there are a multitude of security related issues that have to be dealt with on a daily basis. For instance, oil theft and sabotage, which lead to loss of production and resources makes Nigeria to lose an estimated $6 billion annually,” he said. Sunmonu also lamented the level of devastation the activities of oil thieves cause the environment.

    The Shell Petroleum Development Company Limited (SPDC) is also planning to shut the 150,000 barrel per day Nembe Creek Trunk Line next month for nine days to fundamentally look for more crude theft points on the pipeline. If the pipeline is shut, the government would be losing revenues in excess of $15.75 million daily at the current crude price of $105.65 per barrel.

     

    Renewed efforts

     

    The Federal Government is collaborating with other countries such as the United States, European countries and some other emerging economies to fight oil theft in Nigeria. President Goodluck Jonathan, according to Petroleum Minister, is utilising Nigeria’s diplomatic ties by reaching out to his colleagues around the world on the issue. The President she said, held a discussion with the Prime Minister of Great Britain in February, adding that the government was getting positive responses from these countries, which would come on board to help Nigeria fight this menace.

    Reuters also said it learnt that the Royal Dutch Shell, whose arm is Nigeria’s biggest oil producer, has been lobbying the British Government to help Nigeria to end illegal bunkering.

    The Group Executive Director, Exploration and Production, Nigerian National Petroleum Corporation (NNPC), Abiye Membere, who chaired a special session comprising managing directors of oil companies during at a forum in Abuja, said the country loses between 50,000 and 80,000 barrels of oil per day to crude oil thieves.

    He said apart from President Jonathan’s plan to collaborate with other countries’ leaders, the Federal Government is exploring other areas to fight oil theft and bring it to a sustainable end. Some of the options include use of fibre optic survey and satellite imaging. These will help the government capture images of the oil thieves while carrying out the act.

    Others include use of advanced technology and declaring proceeds from stolen Nigerian crude as blood money and the speedy passage of the Petroleum Industry Bill (PIB).

    Membere said the volume of oil lost to illegal bunkering is equivalent to discovering two new oil fields, adding that some of the countries that parade themselves as oil producing countries don’t produce as much as 50,000 barrels per day.

    He said stakeholders in the industry must find a way of breaking the unit of people driving the dastardly act of oil theft.

    The Chairman/Managing Director, ExxonMobil Companies in Nigeria, Mark Ward, said giving back to the oil producing communities would substantially help achieve success. He said if the community people are given a sense of belonging as owners of the assets and are incorporated into the fight against oil theft as stakeholders, more success would be recorded.

    Sunmonu also suggested that the government should find a way of tracing where the money from oil theft goes. He likened it to drug pushing where little boys and girls are mere carriers while the barons are backstage. He was of the view that if the money is traced, the carriers and the barons would easily be found.

    He said because of what Shell has suffered from oil theft, the company currently lays pipeline at 4.5 metres depth as a measure to check undue easy access to the pipelines. He also advised the NNPC and other oil companies not to magnify their differences but bring common issues to amicable resolution.

    The Deputy Managing Director (Deepwater), Total Upstream Nigeria Limited, Charles Ngoka, said policies should be such that would support and encourage the development of the industry and unlock undeveloped projects to generate revenues for the country and incentives for the operators to create massive employment. He said most of the international oil companies have deepwater projects in waiting.

  • ‘Use of bio-fuels’ll save climate’

    Lagos State Deputy Governor, Mrs Adejoke Orelope-Adefulire, has said a new bio-fuel product which uses neither kerosene nor gas for domestic cooking would help in the fight against climate change.

    She made the call at the launch of Kike Green Cook Stove in Lagos.

    The Kike Green Cook Stove produces fire by a bio-fuel gel, which is environment-friendly and supports the global campaign against climate change. She also said that the distribution strategy of the product would help reduce poverty, especially among women.

    Described as ‘green technology,’ is the product is distributed by the United Nations-supported Carbon Credit Network (CCN), and coordinated by the SME funds.

    Represented by Mrs. Oluwakemi Sanni, Mrs. Orelope-Adefulire, said: “Lagos State has always been exploring different strategies to reduce poverty of any kind and empower our women. We are therefore, impressed by initiatives like this one. We share the passion; we share the commitment.

    “I do hope you will remain committed to ensuring that by 2030, more women and people would have access to clean and green energy to support households and increase youth economy in the green sector in Nigeria.

    “It is our hope and determination that in Lagos State, many people would find accessible cheap energy for use in their homes to make life worthwhile.”

    SME Fund Chairman, Dr Christopher Kolade, said the reality of climate change makes it important to explore the use of renewable energy and clean technology, streesing that the world must either cut down on carbon or lose lives.

    He said: “Businesses must invest in clean technologies. The community must embrace the use of these new technologies. Millions of people die every year from indoor air pollution and I commend the work of Carbon Credit Network to help fight this in 2013, as the stage being set.

    “More children will have the opportunity to grow and read under a clean, safe lighting. Respiratory problem will decrease and we shall be able to give hope to many women currently cooking under very dangrous conditions using kerosene and firewood filled with soot.

    “The time is now to join this action. We all have a role to play to create the future we want to see.”

    SME-Funds/CCN Chief Executive Officer, Mr Femi Oye, said CCN makes the Green Carbon Fund available in Africa, using the social network marketing model to distribute wealth for the active poor at the base of the pyramid, especially in developing nations.

    “Our growth in membership has been phenomenal – increasing from few green ambassadors to over 8,000 members in less than a year. CCN has paid over $100,000 in credit bonuses in its first year with a turnover of $2million.

    “CCN continues to strengthen partnerships, broker relationship and enhance cooperation between local and international organisations to bring energy loans, education grants and green technology solutions to the people that need them most,” Oye added.

  • NNPC co-operative declares N157.3m dividends for shareholders

    The Staff Co-operative Multi-purpose society Limited of the Nigerian National Petroleum Corporation (NNPC) has declared N157.3 million as dividends for shareholders of the company for the 2012 financial year.

    The President of the co-operative, Mr Ojeyemi Adeleke, declared this to shareholders during the co-operative’s Annual General Meeting (AGM) in Lagos. He called for prompt remittance of deductions from staff emoluments, saying irregular remittance of deductions is one of the main challenges facing the cooperative society.

    He said: “This is our greatest challenge. It is hampering our operations and delivery of service to our members. It also puts enormous financial pressure on us. Just as blood is to life, so is prompt remittances of our deductions from our members’ salaries to the society. We, therefore, on behalf of our society and sister societies in the NNPC Group, appeal to the NNPC management to regularly remit our deductions together with the payment of salaries.”

    He listed the projects carried out by the society as construction of office complex in Lagos comprising a new secretariat, multi-purpose hall, consumer shop and a new parking lot. He said the co-operative is partnering Aqua Production Technology of Israel on agricultural scheme, import replacement with export.

    He said the cooperative society’s financial statement showed that year 2011 was better when compared with the dividends of 2012. He said N201,332,568 dividends was declared in 2011 as against N157,317,832 in 2012.

    A member of the co-operative, Mr Ignatius Christopher, blamed the decline in 2012 dividend on capital projects embarked upon by the society. “The management has many projects at hand when compared with previous year and these projects are being financed with mainly bank loans.

  • ‘Oil blocks not awarded on geo-political divide’

    ‘Oil blocks not awarded on geo-political divide’

    There are no records to indicate that Nigerians of northern extraction own 83 per cent of Nigeria’s oil blocks, Director of Department of Petroleum Resources (DPR), Osten Olorunsola, has said.

    The chief regulator of Nigeria’s oil and gas industry told The Nation at the launch of NOG intelligence in Lagos, an oil and gas publication, that the DPR doesn’t have such records and besides, oil blocks are not awarded based on whether the bidder is from the north or from the south.

    “We don’t give out blocks, or marginal fields based on where you come from. It is purely based on competitive process and the winner basically takes it. At the point of applying for the blocks and marginal fields, we don’t ask whether you are a northerner or a southerner. So we don’t have records of 83 per cent anywhere. I don’t know where they pulled out that from, but it is not in our records,” he said.

    Olorunsola noted that what the Federal Government is doing currently is making policies that would make Nigerians own and control substantial part of Nigeria’s petroleum industry, because presently, contribution from indigenous players is below expectation.

    He said that the creation of marginal fields’ policy by the government is to encourage increased indigenous participation.

    He said: “We have 388 oil blocks and out the number, 173 blocks have been awarded out to people. Out of the 173 blocks awarded, 90 blocks are held by indigenous companies, while 83 are held by multinational oil companies.

    “However, the 90 blocks held by indigenous companies, contribute only six per cent to Nigeria’s production, while the 83 blocks held by the multinational firms, account for 94 per cent of Nigeria’s oil production,” adding that the volume of oil production by indigenous firms is about 150,000 barrels per day.

    He explained that what is responsible for the poor contribution to national oil production by indigenous oil firms, is not much different from the challenges faced by marginal fields’ operators. He said out of the 23 marginal fields given to indigenous firms, only a few licensees have been able to begin operation.

    Olorunsola said: “Quite a lot of several reasons have been responsible for the poor contribution. If you look at marginal fields players, they all had problems initially, such as litigations and funding issues, among others, but now they are all maturing and are doing well.

    “For those that have blocks in the frontier areas, they have also tried because they have to go through exploration stages, after which comes the appraisal stage, followed by development stage and then to production,” he said, adding that many of them are still going through those stages.

    “It is not easy because from exploration to first oil, it could take 15-20 years. Many of them are still trying and hopefully, they will come on stream soon,” he stated.

    Olorunsola, said if one looks at all the policies around oil and gas in this country since oil and gas exploitation, the government has been making efforts to enable Nigerians own and manage substantial part of the industry.

    He explained that in the 1950s and 60s, the International Oil Companies (IOCs) were basically dictating the rules and the government was basically collecting rents, saying at that stage, there was nothing like indigenous participation.

    He said Nigeria became an active player in the oil industry when it joined the Organisation of Petroleum Exporting Countries (OPEC). It was at that point that Nigeria introduced the policies that led to the acquisition of 60 percent stake in the Joint Ventures, which signaled the first time indigenous firms started to participate in the nation’s oil sector.

  • NLNG generates $60b revenue, says CEO

    •Accounts for 7% of global LNG market

    The Nigeria Liquefied Natural Gas Limited(NLNG) generated $60 billion in revenues for the Federal Government in the last 13 years, the Managing Director/CEO, Babs Omotowa, has said.

    The CEO, who stated this in Lagos at the Annual Oloibiri Lecture Series and Energy Forum organised by the Society of Petroleum Engineers (SPE) Nigeria, also said NLNG accounts for seven per cent of the global liquefied natural gas (LNG) market.

    In a paper, entitled: Emerging Unconventional Hydrocarbon Sources: Implication for Nigerian LNG export, Omotowa highlighted the value additions of the company to Nigeria and its stakeholders. He, however, expressed fears that natural gas production from unconventional sources will certainly impact negatively on the company.

    He said apart from the revenues generated for the government, NLNG has placed Nigeria on the global map as LNG exporter, and also accounts for four percent of the Gross Domestic Product (GDP).

    He said NLNG is responsible for 50 per cent reduction of flared gas and contributes 65 per cent of the total liquefied petroleum gas (LPG) supply to the market, adding that the company has revitalised the shipping industry. He added that it supplies uninterrupted power in its catchment area, Bonny, Rivers State. It also supplies pipe-borne water across its operational ares.

    He said the company has paid over $15 billion to companies on feed gas purchase in upstream joint ventures, and paid paid over $23 billion dividends to its shareholders, while $180 million was paid as Value Added Tax (VAT), among others payments.

    He said: “As at today, NLNG is producing seven per cent of global liquefied natural gas and currently contributes four per cent of Nigeria’s GDP. The company had supplied about 150,000 metric tonnes of liquefied petroleum gas, (cooking gas) into the domestic market, representing about 65 per cent of LPG that has been distributed to the local market.

    “Out of the 23 million tonnes of LNG produced annually, 63 per cent goes to Europe, while 32 per cent goes to Asia,” he stated.

    He said that reports by United States Energy Information Administration (EIA), showed that there are several trillions of cubic meters of technically recoverable gas from shale gas resources spread across the countries of the world, such as the United States, Russia, China, Australia, South Africa, Argentina, Qatar, Canada and South Africa.

    He disclosed that the production of natural gas from shale formations may lead to United States emerging as a net exporter of gas by 2030 as against a net importer of oil and gas.

    He said US market demand is no longer sacrosant as long term (25years) sales and purchase agreements are being challenged due to liquidity and indexation of LNG prices to crude.

  • Content Board harps on infrastructure, skills devt

    To meet the challenges confronting the oil and gas industry, the Nigerian Content Development and Monitoring Board (NCDMB) has stressed the need for adequate infrastructure and entrepreneurial skills development in the country.

    Speaking during the Nigerian-British Chamber of Commerce Breakfast Meeting in Lagos, the Executive Secretary of the board, Ernest Nwapa, emphasised the need to build infrastructure and empower entrepreneurs who have the capability but lack the resources to build facilities to key into existing opportunities and use their entrepreneurial skills to create value.

    He said: “We are focusing on two critical factors of production after which they would now use their skills to leap into the next phase of job creation.”

    He said the board is collaborating with international oil companies to educate the contractors and subcontractors on entrepreneurial skills, adding that some of them were already in partnership with the Lagos State Business School.

    “We will continue to encourage the entire industry on the need to use what is made in Nigeria. We believe it would now turn some of these people who have been agitating for opportunities into being employers of labour, because we are not only going to give them that environment, we will use the policy to drive the demand for their products. We will say to the industry that these people can make components of the equipment you are using, get them to do it,” he noted.

    Nwapa expressed dissatisfaction with the performance of the Nigerian content measurement. He said the current statistics had shown that Nigeria measures 90 per cent in engineering, 50 per cent in fabrication and seven per cent in manufacturing, adding that the ratio was not encouraging to implant legacy for the future generation, which according to him, entails skills acquisition and creation of jobs in the sector to advance the economy.

    To this end, he said henceforth building of vessels shall be done by local engineers so as to reinforce the internal man craft of the country. “Every contract awarded to foreign companies, there must be 10 per cent mandatory position for jobs that will train engineers within the country in order to develop indigenous skills and grow local supply chain,” he said.

    On industrial parks, Nwapa said though the Nigerian oil and gas industry has the distinctiveness that can drive it speedily and purposefully, he however noted that the board would not hesitate to bring in any state that has an industrial park programme to make sure it is focused and result oriented

    “We believe there is a link between the industry and other sectors, so we are very interested in matching on to what other agencies, including the government are doing. We are going to rally the industry to start using Nigerian services and goods,” he added.

    The President of the Chambers, Thomas Awagu, lamented that the laws guiding the operations of the petroleum industry have been generally inadequate and inconsistent with modern international tendency.

    He said a lot of education is needed to broaden the mind of the populace on matters relating to prospects and challenges of the petroleum industry bill in order to harness sustainable economic development of the sector and the nation in general.

    H said the chamber is committed to ensuring the enhancement of trade and investment between Nigeria and British private sector operators, adding that this would in turn increase business and commerce in the country.

  • Pipeline rehabilitation: Tanker drivers praise NNPC chief

    The Petroleum Tanker Drivers(PTD) – an arm of the National Union of Petroleum and Natural Gas Workers (NUPENG) – has commended the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Andrew Yakubu, on the rehabilitation and protection of the country’s pipelines.

    The union expressed its appreciation during a courtesy visit by a delegation of the national executive of the union led by its National Chairman, Dr. Timothy Ogbu, to the NNPC’s headquarters in Abuja.

    Ogbu said the union was very impressed with Yakubu’s effort in rehabilitating the pipelines and depots, which had been giving all operators in the downstream sub-sector of the petroleum industry nightmares over the years.

    Ogbu said: “We want to thank the Group Managing Director for the successes recorded in this area and hope that the tempo will not only be sustained, but also be improved upon in other areas that have been bedevilled in the industry such as the Aba-Makurdi-Yola line, the Ibadan-Ilorin line, and that of Warri-Kaduna-Jos- Gombe –Maiduguri.”

    He said his union cherishes the cordial relationship it has with NNPC and promised to ensure that the harmonious relationship is sustained for the good of all Nigerians.

    Yakubu thanked the union leaders for recognising the effort of his management in aggressively addressing the downstream infrastructure challenge, adding that the commendation means a call to do more the corporation and him.

    He explained that the rehabilitation of the pipelines and depots is only a part of the mandate given to him by the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, which includes the rehabilitation of the refineries for optimum capacity utilisation.

    “We can’t achieve optimum capacity utilisation in the refineries without having the pipelines and depots in good shape for effective product evacuation and distribution, that is why we are fixing them so that by the time we complete the rehabilitation of the refineries we won’t have any problem with distribution and storage,” he said.

    Yakubu said the corporation was deploying the horizontal directional drilling technology at all the trouble spots where pipeline sabotage and products theft are rife across the country, adding that the process has already been flagged off at Arepo.

  • Ogun, firm to assess impact of oil spill in Arepo

    The Ogun State Government and the Hydrocarbon Pollution Restoration Project (HYPREP) will start assessment of level of environmental damage caused by oil spills in Arepo, a community in the state. This stemmed from persistent activities of vandals in the area.

    HYPREP is an agency of the government established last year to handle restoration of degraded environment arising from oil spillage and activities of oil exploration and production companies.

    Arepo has lately become notorious as a haven for petroleum products thieves and pipeline vandals, recording three major incidents in less than two months.

    A delegation from the HYPREP led by its National Coordinator, Mrs. Joy Nunieh-Okunnu, visited Arepo following an invitation from the Ogun State Commissioner for Environment, Prince Lanre Tejuosho, to start an assessment of the concerns of oil spillage and air pollution in the area.

    The commissioner confirmed that the state government would provide HYPREP with offices from where its operations could commence.

    During the visit, concerns were raised about the ease with which vandals had access to oil pipelines and the impact their activities were having in the community. A resident of the Journalists’ Estate in Arepo, Mr Gbayode Somuyiwa, and other officials and colleagues in the estate relived their experiences.

    Somuyiwa relayed his experience. He said: “On the first night I experienced this, it was as if my fuel tank was left open overnight and by the morning the smell was gone … we were just inhaling impure air and it has gone on unabated.”

    He expressed his concern about the surrounding villages where as a result of the explosion from vandalised pipes, corpses had been left in the water and this combined with oil spillage had polluted the water. “Some people have diarrhoea and they are not aware of the causes. Those who used to fish can’t fish,” he said. He also pointed out that some Ijaw communities who are active fishermen in the area have disappeared, adding that the oil spillage had destroyed the environment.

    Nunieh-Okunnu said the visit of HYPREP, which was on the invitation of the Ogun State Government, was to carry out an environmental assessment of the oil spillage. She said that for the first time in the over 50 years history of oil exploration in Nigeria, the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke has set up a specialist unit within the Ministry of Petroleum Resources to ensure that section 8 and 9 of the Petroleum Act was implemented. She noted that the minister was particularly interested in what was happening in Arepo.

    She confirmed that once the office space was available, HYPREP would conduct an air analysis and perform tests on the water in collaboration with the state government. She urged stakeholders to carry out continuous campaign against crude oil theft “as people can’t keep stealing whilst we (HYPREP) keep cleaning.”

    She said the boys involved in ‘put fire’ (artisanal refining) activities must understand the impact of crude oil theft on their health and the environment. She also expressed concern about the exchange of crude oil for drugs and arms.

    On the question of compensation, Mrs Nunieh-Okunnu clarified that her agency was liable for addressing issues of environmental restoration and exploring alternative livelihoods through HYPREP’s socio-economic unit programme in impacted communities.

    Tejuosho said the state government will pursue compensation with the Federal Government where there have been negative effects of oil spillage in the community. He reassured the community that all areas that needed compensation will be pursued.

    The HYPREP delegation also went on to the Diamond Estate in Lagos State, where concerns about oil spillage and pollution had been reported. In a meeting with the President of the Estate, Mr Kolapo Abiodun, Nunieh-Okunnu listened to concerns of the community about pollution of the water around the houses in Phase Two of the estate. This, Kolapo said, raised concerns about health. He felt that effective remediation had not been put in place.

    He assured him that HYPREP would carry out an assessment and make necessary recommendations to address the issue at Arepo.