The Nation Newspaper

Category: Energy

  • How Nigeria can remain competitive,by oil chief

    How Nigeria can remain competitive,by oil chief

    As the advanced countries of the world continue to seek ways to be energy independent or significantly reduce their energy imports, Nigeria should optimise value of its hydrocarbon resources by creating very competitive policies and incentives that it a haven for investors.

    Chairman and Managing Director, Mobil Producing Nigeria Unlimited, Mark Ward, made this call at the Aret Adams Lecture series in Lagos.

    In his paper entitled: ‘World energy outlook and potential impact on Nigeria’s petroleum industry,’ Ward, who was who was the guest speaker, gave highlights on breakthroughs made by advance countries including the United States in terms of extraction of oil and gas from shale formations. He believes this would position the U.S. from a consumer to a net exporter of oil and gas by 2030.

    To be relevant and competitive in the global oil market at all times despite advancement and achievements expected to be recorded from shale formations, Ward said the Federal Government’s focus on restructuring the industry through the Petroleum Industry Bill (PIB) is timely, but the bill must be designed and implemented correctly.

    He said that the government should ensure that the bill provides globally competitive fiscal terms to attract capital. It must also be stable and there should be a fair business investment climate with appropriate protections to ensure that fundamental issues such as funding limitations and operations inefficiencies are addressed. Besides, he said the government must develop a completely thought-through transition to avoid major disruptions.

    He saidNigeria should maintain what has attracted investors to its oil and gas industry. He said: “It would be worthwhile examining a number of factors that have contributed to what could possibly be a global game changer in our industry: First, there was availability of a huge prime resource base. Second, there was expanded access to this resource, with clear resource rights to investors. This allowed for investment in, and application of appropriate technology. Third, you had a system that tried to avoid arbitrary and punitive tax policies. Fourth, clear regulatory system that not only supported safe development and production, but responded to industry push to expedite the permitting and construction of pipelines and other infrastructure necessary to get these new energy supplies to market.

    “These conditions, mostly absent in other places, came together at the right time and created what we are witnessing today. With Nigeria’s proven natural gas reserves put at an estimated 180 trillion cubic feet as of end 2011 – the ninth largest in the world – the country needs to open up her market and focus on being a competitive, low-cost, high-reliability supplier to the global market.”

    With what is happening, he said that Nigeria must recognise that a significant resource shift has turned a key trade region into possibly a direct competitor, (referring to the U.S.). Nigeria he said should avoid creating barriers with potential to make her industry uncompetitive for investments. Noting the emergence of other resource basins in East, Central and South African countries, he said Nigeria must work to maintain her place as a key contributor to global energy supply.

    He shared some views from the ExxonMobil’s outlook. He said the “ExxonMobil’s outlook is a comprehensive and detailed assessment of the energy landscape over decades. It is part of the foundation on which we have built our business. The Outlook to 2040, as with past analyses, is based upon a combination of public and proprietary data covering more than 100 countries.

    “We look at world demand, the types of energy needed to meet that demand and other factors that might impact energy supply and demand on a global, regional and national level. These include things like expanding prosperity among a growing world population, the cost and availability of various forms of energy, the development and use of new technologies, and government policies and regulations.

    “More recently, we have shared it beyond our board room to public audiences around the world to broaden understanding of the energy challenges and opportunities all of us face in the years ahead. This is even more important for an energy rich, and energy dependent nation such as Nigeria.”

    He said it is important to understand the links between population growth, economic progress and the amount and type of energy used around the world, adding that growing populations advance economically over time and seek better living standards, which in general leads to increased energy use.

    He said: “We expect that by 2040, global population will reach 8.7 billion, and the non OECD will make up 85 per cent while Global GDP is expected to increase at about 2.9 per cent a year from 2010 to 2040, led by the rapidly expanding economies of the non OECD.”

    Ward also noted that forecast for global energy demand will be in quadrillion British Thermal Units, BTUs (quads), stating that energy demand is projected to grow significantly through 2040, and will be driven mainly by population and economic growth in the non OECD.

    The outlook also showed that the world is moving into a more multilateral, energy demand era, an era in which countries such as China, India, Africa and Latin America command a larger share of global energy demand.

    It added: “By 2040, we expect Asia Pacific market will account for close to 45 per cent of demand, up from just 20 per cent in 1980.”

  • Kaztec Engineering builds fabrication yard in Lagos

    Kaztec Engineering builds fabrication yard in Lagos

    Kaztec Engineering Limited, an oil service company and a subsidiary of the Chrome Group owned by business mogul Sir Emeka Offor is building a fabrication yard at the Snake Island in Lagos.

    The Technical Director, Chrome Group, Adebanji Babarinde, told our correspondent at a the oil and gas conference and exhibition in Abuja, that the project is at advanced stage.

    The fabrication yard in which the company would be fabricating jackets, topsides, equipment and skills development, is being handled with its technical partners, Addax Petroleum Limited. Barring unforeseen occurrences, the first phase of the fabrication yard would be completed by end of this year while the subsequent phases will be completed by middle and end of next year.

    Babarinde spoke on the benefits of the Nigerian Content Act to local companies, poaching of skilled manpower in the industry and what Kaztec Engineering is doing to remain the leading indigenous oil service company in Nigeria.

    He said: “We (Kaztec Engineering) see Nigeria oil and gas conference as an avenue to showcase our potential, capabilities and to also encourage others, particularly indigenous people that we have a lot of possibilities in Nigeria.

    “On our plans for 2013 and going forward, we want to do what we have been doing better and also to expand. Right now we are putting up a fabrication yard at the Snake Island in Lagos and with that facility we should be able to fabricate jackets, topsides, and develop a lot of talents in the process all within Nigeria. We have some projects we are still doing with our clients and our plan is that we complete those projects on schedule and within cost.

    “Some of the ongoing projects include field development for Addax, which involves installation of subsea pipes, topsides, decks, risers platforms and commissioning of facilities. Some may be replacement of pipes, which involves removing old pipes and putting new ones there. The field development is to contribute towards production of more crude oil by Addax.”

    On the Nigerian Content Act, he said: “The Act is the best thing that has happened to Nigeria particularly indigenous participation in the oil and gas industry. It has just encouraged local participation. It has helped us really. It is because of the encouragement we received from the Act and the people that are driving the Act that enabled us local people to acquire assets that are very expensive. And we are rest assured that once we have these assets, we have the law backing us up to get jobs from the international oil companies (IOCs) and that is helping. We have been engaged in the Addax job for three years.

    “If not for the Local Content Act, this job could have gone to foreigners. We couldn’t have had the courage to put our money in these expensive assets. I think it is one of the best things that have happened and it is something that should be encouraged. We need the right people there, the leadership is good and committed and they need to continue.

    “For the fabrication yard, it should be completed in stages. The first phase should be completed by this year, the second stage by middle of next and some end of next year. We are working with Addax as our technical partners to develop the facility.”

    On poaching of skilled manpower, he said: “There is nothing you can do about it. The only thing you can do about it is to treat your staff well. It is a free market economy. If you don’t treat your staff well and he gets a better offer, you cannot hold him. There is no law that says you should hold him. So poaching will continue. You must put up a procedure to keep your good staff and it is not a matter of whether you like it or not, just put a procedure to keep your good staff and be able to throw away the bad staff.

    “We subject our workforce to regular development through regular managerial, technical and specific training. We also have training that is related to specific job, for instance, if there is any job a member of staff is doing and we found out that there is a gap, we organise training for the staff to close the gap.

    “We organise training on safety, which is continuous and very important. We take them through safety training from time to time. If staff’s certificate on particular safety training expires, the person undergoes another training to renew it. We have expatriates and our plan is not to keep expatriates forever because that will be against the Local Content Act. What we do is that for every expatriate we have, one or two Nigerians work with him to understudy him and their progress is monitored.”

    The Consultant to Kaztec, Dr. Njideka Kelley, said: “The company is absolutely excellent in terms of compliance with international best practices and standards. What Kaztec is doing to encourage skills development and safety consciousness among staff boils down to our Chairman, Sir Emeka Offor’s aspiration in encouraging and building people and ensuring the best minds are our first assets and secondly safety. Poaching doesn’t happen in our company because of the way we treat our people.”

     

  • NAPE emphasises training of geosciences students

    NAPE emphasises training of geosciences students

    The Nigerian Association of Petroleum Explorationists (NAPE) has stressed the need for training and retraining of geosciences students to enhance oil and gas exploration in the country and also increase revenue for the government.

    Meanwhile, the University Assistance Programme (UAP) leadership forum has been scheduled to take place between March 15 and 17, this year. It is entitled: “Enhancing skill-based learning and professionalism in geosciences education in Nigeria-industry to academic support and collaboration.”

    Speaking during a briefing in Lagos, the President of the association, George Osahon, said the training would, among other things, improve contact and increase interaction between the oil and gas industry and geosciences departments of universities and polytechnics.

    He said such interaction would provide the assistance that would augment the teaching of earth science in the tertiary institutions.

    Osahon said that as part of efforts to create the needed interaction between the industry operators and geosciences students, NAPE through its UAP, is organising a leadership forum themed ‘Enhancing skill-based learning and professionalism in geosciences education in Nigeria – Industry to academic support and collaboration,’ which will hold this month.

    Osahon said that the association would continue to support the oil and gas industry professionals to offer teaching services to the universities at no cost, adding that the forum has been a major contributor of basic teaching and research equipment and grants to geosciences departments in over 26 universities and four polytechnics offering geosciences programmes in the country.

    The leadership forum, he noted, has in the past years achieved success in identifying and assessing the root causes of the falling standard of education in Nigeria’s tertiary institutions. He also said that the association has intensified efforts in complementing the universities in the teaching of specialized courses. Some of NAPE’s corporate members, he said, have responded positively to the objective by offering their staff on full time basis to universities to be part of the academic staff at no cost to the recipient universities.

    He said that NAPE has also put in place a grant-in aid programme that offers financial assistance to promising undergraduates requiring such support adding that the sponsorship which is covered by the grant-in-aid programme is funded by individual members of the group and the American Association of Petroleum Geologists (AAPG).

    This motivation, he noted, would give students the confidence to compete and strive for excellence adding that the mini conference organised by the association is an additional student-oriented programme that would provide the opportunity for building professionals who would showcase their technical skills by presenting papers on petroleum and related subjects.

    Osahon expressed satisfaction with the performance of the students, which has continued to impress prospective employers and called on members of the public to make their own contributions to supporting the students in need of financial assistance.

    The Head, Exploration Assets, Addax Petroleum and the UAP Chairman, Akinrinlola Olafioye, said that the association would not relent in its efforts to exposing the Nigerian geosciences students to compete favourably with their foreign counterparts. “Why we are doing this therefore is to assist in our own little way under the umbrella of NAPE to reach and breach that gap that has been identified. They have not been able to measure up with their colleagues elsewhere in the world,” he added.

     

  • Stemming vandalism theft in downstream sector

    Stemming vandalism theft in downstream sector

    It is incontrovertible that the downstream sector of the petroleum industry has been on the brinks of collapse for some years. The Federal Government, through the Nigerian National Petroleum Corporation (NNPC) and the Ministry of Petroleum Resources, had been able to significantly sustain the supply of petroleum products to the populace, but at a very huge cost, which by all reckoning is unsustainable.

    Until now, it seems the government has been fighting vandalism with child’s gloves despite the enormous loss of lives, properties and revenues recorded over the years through the activities of pipeline vandals.

    Besides, the pains Nigerians go through searching or waiting for fuel at filling stations whenever the commodity is scarce, is unquantifiable. Therefore, application of technology and some complex systems toward guarding the pipelines and making them difficult for vandals to access should be fully supported and funded by the Federal Government, even though the funds might look so huge in the short term. But this would be good economic decision in the long term.

    Losses to vandalism

    The Managing Director of Pipelines and Products Marketing Company (PPMC), a subsidiary of NNPC, Prince Haruna Momoh, made startling revelations during recently during a visit of the NNPC’s Group Managing Director, Andy Yakubu to Arepo – a community in Ogun State, which lately became a haven for oil thieves and pipeline vandals. The visit was centred on finding a lasting solution to pipeline vandalism and continued loss of products to vandals, which has led to loss of lives, properties and degradation of the environment in the event of explosion.

    Momoh said the PPMC has a total of 258 storage tanks of various sizes spread nationwide with a total holding capacity of 2.6 billion litres and 5120-kilometre pipeline network across the country. These he said, are more than enough for Nigerians not to experience fuel scarcity. But he noted that these facilities were to a very large extent rendered useless by the activities of vandals and oil thieves, hence the occurrence and reoccurrence of fuel scarcity with the attendant suffering caused Nigerians.

    Products

    Momoh also noted that between 2009 and end of December 2012, the NNPC alone lost about N165 billion to products theft and repairs of vandalised pipes For instance, while data from the Department of Petroleum Resources (DPR) showed the PPMC lost 20 metric tonnes of products between 1999 and March 2006 to activities of vandals, records show that in 2005, the cost of petroleum products lost to vandalism was put at N12 billion, while between January and May 2006, the loss was put at N7.07 billion.

    The NNPC boss also said the corporation loses about N600 million worth of fuel monthly to vandals through the Arepo axis (System 2B pipeline) alone.

    Casualities

    Besides loss of products, over 2500 lives have been lost to explosions from vandalised pipes in last 15 years. Sometimes, the exact figures of casualties were not got in the event of fire outbreaks while some incidents were not reported. In 2000, over 1000 lives were lost to fire outbreak from vandalised pipeline in Jesse, Delta State. In 2004, over 250 deaths were recorded in Abia State pipeline incident while over 250 lives were also lost in Ilado-Lagos pipeline explosion in 2005. A couple of other lives were lost in Ijeododo in Lagos, an area also known for its notoriety as vandals’ haven. The area has recorded several incidents of explosions, in the past few years even in December last year it had an explosion which recorded no casualty. In December 2006 at Abule-Egba, Lagos, over 240 lives were lost to pipeline explosion.

    Arepo had three explosions between August last year and January this year recording more than 10 deaths excluding members of staff of PPMC killed when they came to fix the vandalised pipe. There are many other explosions and each time it occurs, it is followed by fuel scarcity and loss of revenue to the government.

    Sustained government support

    The January 2013 attack at Arepo seemed like a turning point in the fight against vandalism and vandals. For the first time, the Ministry of Petroleum and the NNPC decided to apply horizontal directional drilling (HDD) system, which would enable the pipes be buried very deep below the surface. This would make the pipes inaccessible. This is in addition to clearing bushes along the pipeline’s right of way and continuous surveillance of the areas by joint team of armed security personnel.

    This technology should be applied in the right of ways of the pipeline network across the country. It is imperative to do this especially with the unbundling of the NNPC and privatisation of some successor companies.

    Besides, since the beginning of last year, the burden of importation of products has solely fallen on the NNPC following the refusal of marketers to import. Therefore, with the development, operations in the downstream sector would be safer and more reliable by creating the needed investors’ confidence in the industry.

    As the government funds the anti-vandalism techniques, the National Assembly ought to listen to the calls of the Minister of Petroleum Resources, Mrs. Diezani Alison, Andrew Yakubu and other top stakeholders for the legislation and passage into law of appropriate punishment for vandals.

    Haruna Momoh had said: “We are talking to legislators at the National Assembly on proper sanction and prosecution of people that engage in oil theft and pipeline vandalism. We have also lost lives in the cost of repairing the vandalised pipelines in Arepo. We have lost about five members of staff who were killed while on duty repairing the vandalised pipelines. We, however, call on Nigerians and stakeholders to come together to fight this menace head-on.”

    The Petroleum Ministry and NNPC have also begun to revamp moribund fuel depots across the country. The NNPC boss, Andrew Yakubu, had assured that he is committed to sanitising the downstream subsector adding that all dysfunctional PPMC, depots would be rehabilitated to bring stability to fuel supply and distribution nationwide.

    Yakubu also noted that the corporation had embarked on aggressive expansion of its retail outlets across the country to enable it respond appropriately and adequately to motorist whenever there is problem of artificially induced fuel scarcity.

  • Lagos, UK trade agency partner on power, others

    The Lagos State Ministry of Energy and Mineral Resources is partnering the United Kingdom Trade and Investment (UKTI) to develop capacity in power and other vital infrastructure.

    The partnership primarily is to initiate a relationship between the United Kingdom companies and the state government.

    The Commissioner for Energy and Mineral Resources, Mr Taofeek Ajibade Tijani, commended the initiative and the delegation led by Mr Beverley Okoye and Idowu Babalola when they visited him in his office in Lagos.

    The UCTI is a government department that acts as middleman to bridge the gap between UK companies interested in partnering with Nigerian companies and also ensures that UK businesses succeed overseas.

    The UKTI is present in three locations in Nigeria, which Lagos is the focal point for being the economic back-bone of the country. The partnership has achieved some success in Lagos, in building of captive power stations.

    Tijani said the collaboration has resulted in building a 10-megawatt captive power plant in Marina, Lagos, which serves vital state institutions such as the State House in Marina, hospitals, the high court, magistrate court, and street lights powered for 24 hours.

    He said his ministry is working hard on completing a power plant that would ensure stable power supply to key government establishments. He noted that Lagos State stands as the only state with a dedicated Ministry of Energy and Mineral Resources.

    This, he said, underscored the belief of the government that sustaining efficient power supply remains germane to achieving a mega city plan. He assured the delegation of the cooperation of government and urged them to explore other innovative ways to contribute to the development of competitive infrastructure in the state.

     

  • Petroleum minister, others for NOG intelligence launch

    Petroleum minister, others for NOG intelligence launch

    The Minister of Petroleum Resources, Mrs. Diezanni Alison-Madueke is among the personalities that would grace the launch on Thursday of the Nigeria Oil and Gas Intelligence (NOGintelligence) – a weekly electronic newsletter that will focus on oil and gas industry.

    Alison-Madueke, according to a statement, will be the special guest of honour while the guest speaker will be the Director, Department of Petroleum Resources (DPR), Mr Osten Olorunsola. She will speak on marginal fields. The Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Ernest Nwapa, an engineer, will also speak on the local content.

    The board of NOGintelligence Limited said the company will provide the oil and gas community with actionable data and intelligence on the industry, which will be officially launched on March 14 at the Metropolitan Club in Lagos.

    Other guests of honour that will be at the event include the Group Managing Director, Nigerian National Petroleum Corporation (NNPC), Andrew Yakubu, the Minister of Trade and Investment, Olusegun Aganga, the Foreign Affairs Minister, Olugbenga Ashiru and the Director General, Nigerian Investment Promotion Commission (NIPC) as well as top officials of the oil and gas and the financial industries.

    The Editor-in-Chief and Publisher of NOGintelligence, Remi Aiyela, said: “The official launch of NOGintelligence comes at a time when investors from around the world have their eyes firmly on Nigeria and are thirsty for knowledge and information about our industry. We are very excited to be at the crest of this wave.

    “Each issue of NOGintelligence carries quality information on new projects, what is happening, who is doing what, contracts that are being awarded, new cases, new laws and regulations, new fields coming on stream, new technology and much more.

    “Our main intention is to ensure that people from all sectors of the industry – from the drilling engineer to the energy lawyer to the environmental campaigner – find something relevant and of interest to them in every issue. There is something for everyone from every sector of the oil and gas industry.”

  • Construction of LADOL’s floating vessel, technology institute underway

    Construction of LADOL’s floating vessel, technology institute underway

    After due technical and commercial examination, the management of the Lagos Deep Offshore Logistics Base (LADOL) is set to start the construction of the company’s planned floating production, storage and offloading vessel (FPSO).

    The firm’s technology institute is also billed for take-off in Lagos.

    Its Executive Chairman, Oladipo Jadesimi, told The Nation on the sideline of the Nigeria Oil and Gas conference in Abuja, that the company has begun to invest in requisite facilities for the integration of the FSPO, while the construction of the technology institute would start very soon.

    He said LADOL is partnering Samsung Heavy Industries for the development of the FPSO and the construction of the technology institute, to be called Samsung Nigeria Technology Academy (SaNTA). The institute is expected to impart the requisit technology and skills in various aspects of the oil and gas operations on Nigerians.

    Jadesimi said: “On the construction of the FPSO. We have gone far. We are now preparing to invest in the facilities that will be required for the integration of the FPSO.” He also dismissed fears over the draft of the LADOL free zone considering the massive size of an FPSO. He said the water depth of zone is deep enough.

    “As you know, the FPSO is a very large vessel and the channel is deep enough to accommodate the safe inward and outward passage. Before you embark on any project, you will do thorough investigation into all technical aspects that have to do with safe operation.”

    He said the projects have a lot of prospects, contrary to what some stakeholders believe. He explained that when the promoters of LADOL embarked on the project some 10 years ago, their target market was not just Nigerian waters. It is clear that the whole of the West African sub-region was and still highly prospective in oil and gas, which means that there is very high likelihood of discoveries, he said, adding that the assumed prospects have been proved right with the discoveries in Ghana, Sierra-Leone and Liberia.

    “These are all offshore discoveries and all of them will require facilities that we are preparing to execute for the whole region because the discoveries are all offshore and as you know, our specialty and focus is solely on the offshore.

    “Expenses on the onshore are all taken care of and our focus is in the offshore part of the project,” he added.

    Jadesimi said Nigeria still has dearth of technical capability, especially for complex technology based oil and gas infrastructure, such as FPSO.

    “It is not just in oil and gas. We are not there yet. We need to build capacity in all sectors and in all industries, but with respect to the deep offshore, I agree that it is very complex, however, we need to make a start. Making a start initially means combining with world class operators that will feature in the venture, but the most important factor is to commence immediately on training Nigerians and increasing capacity and capability.

    “One of the things that we are starting very soon is the construction of technology institute in LADOL, in conjunction with Samsung that will train Nigerians in various aspects in deep offshore operations. That is the way to do it. We have to build indigenous capacity by training and giving opportunity of workplace experience, among others.

    “This hasn’t happened before, but it is happening now. For that we have to thank our President for the Local Content Act, because this Act now mandates increasing percentage of contracts to locals, which is essential because it means increase in investments, not just from sale of oil and gas, but from investment in the assets that will produce this oil and gas.

    “We have trained Nigerians and many of them are active all over the world, but they didn’t have the opportunity in Nigeria. So this will create the opportunity.

    “Whether it is FPSO or any other technology, the critical factor is clearly the extent to which we have indigenous capability. If we have institute of technology to train people, it doesn’t have to be any particular technology.

    “When Norway first discovered deep offshore oil and gas, at that time they didn’t have any experience or technology in deep offshore, but because they are highly industrialised economically with highly experienced populace, within a space of 20 years, they had developed indigenous technology of the highest order in deep water oil and exploration and production. So the key is to acquire the technology.

    “I am sure that we will find brilliant Nigerian scientists that would themselves evolve new technologies and that is the only way to go. People are the most important resource anywhere.

    “Another example is Singapore that doesn’t produce a barrel of oil or gas and yet, they probably have the largest refining capacity in the world, which means they are adding tremendous value locally to oil and gas industry.

    “We need to invest in people, technology acquisition and once we have these, we have everything. The only way is conscious effort in the direction of training people and increasing local capacity,” he stated.

  • NAPE to govt: Execute policies to boost oil and gas

    NAPE to govt: Execute policies to boost oil and gas

    The Federal Government has been urged to implement meaningful policies that would boost oil and gas operations in the country Speaking during the monthly technical meeting of the Nigerian Association of Petroleum Explorationists (NAPE), in Lagos, the Managing Director, Seplat Petroleum Development Company Limited, Austin Avuru, said the biggest problem facing the industry is that the government had treated policies as events, when policy formulation should rather be a process.

    He said if industry policies are effectively implemented, the oil and gas industry would remain active and useful to the entire economy, harness infrastructural development, open up avenues for job creation as well as streamline sources of revenue for the government.

    Some industry players noted that there are good policies in place but blamed the government for not doing enough to ensure effective implementation of these policies.

    Avuru, who delivered a lecture entitled: Policy and activity in the Nigerian petroleum sector, said: “We treat policies as an event, where as there are departments of the government whose jobs everyday is to look at these policies and their application on a continuous basis and their relevance. Any one that is not relevant it is their daily job to look at how changes would be made to those ones.

    “It is not how much complicated the policies are, it is the fact that we are not engaging policies with the attendant result of those policies and then the application of those policies when changes ought to occur. These are the things that should be a continuous business of the government and policy makers.”

    Avuru said that the government has not done a good job of managing the nature-given wealth over the past 50 years. “We have laboured to share rather than create, and even in sharing we have been found wanting. The parlous state of our economy today only summarises the fact that we have, so far squandered our riches,” he added.

    He said efficient management of a rent economy such as Nigeria requires a consistency of disciplined and visionary leaderships, capable of applying the ample rent so collected to fund a long-term programme of massive education of the citizenry, provision of quality healthcare and a solid infrastructure backbone as well as guaranteeing security of lives and property.

    He noted that a healthy, well educated citizenry operating under a conducive environment would re-generate a secondary economy that would gainfully engage the rest of the population.

    The President of NAPE, George Osahon agreed that policy drives the oil and gas industry. He said without laws, there would be no operations. “It is the law that drives what we are doing, so it is very technical,” he said.

    He however, said there was nothing wrong with what the government has done. The government, he said, had good intentions but some of the policies that were put in place had not advanced the course they had set for themselves.

    He recalled that the government had established the indigenous proprietorship programme and had also changed some aspects of the laws with the policy of the current time. Moreso, the government had given out marginal fields to some companies as independent operators in the industry many years ago.

    On potentials for shale gas, Osahon said that Nigeria has shale gas that can be exploited but the cost of exploiting one barrel of shale oil is so high compared with one barrel of conventional oil.

    According to him, conventional oil is much cheaper than shale oil. He said: “We have to explore the cheaper one first before we go to the more expensive one.”

    He said that the discovery of shale gas is all over the world, adding the US is the one that is actively producing its shale gas but not the only one that has it. He said that anything that happens in any part of the world relating to energy would affect the global energy sector.

    “There is nothing worrisome about what is happening. What we need to do is to look at what is happening and change style if so required, if we must continue to be relevant in the energy sector,” he said.

     

  • Govt frustrates private refineries take-off, says APRON

    Govt frustrates private refineries take-off, says APRON

    The Federal Government has been accused of frustrating the take-off of private refineries by introducing policies that are not favourable to the project.

    Chairman of the Association of Private Refinery Owners of Nigeria (APRON), Justice Samuel Ilori, who made this known in an interview with our correspondent, said the government keeps putting obstacles in the ways of private refiners to ensure none of them takes off.

    Ilori, a retired Chief Judge of Lagos State, said those in power are keen in ensuring that no new refinery springs up in the country because they are benefitting from fuel subsidy.

    He said: “For the past five years, the association has been lobbying the Federal Government to guarantee the investment of our foreign partners as demanded by them but to no avail.

    “Each licensee has gone abroad to look for creditors and are spent a lot of money in searching for foreign partners, which we eventually found. But they are not willing to release money to us because we failed to obtain government’s guarantee as a condition for investing.”

    Eight years ago, the government granted licences to 18 private firms to build and operate refineries. They paid $18 million to the government being the mandatory $1 million deposit each as stipulated in the guidelines. Besides, each of them had spent between two to three million dollars on site development. Their licensees have been revoked by the Department of Petroleum Resources (DPR) for failing to meet the 18-month deadline to build the refineries.

    Ilori described the fiscal incentives rolled out by the DPR as half measures. For instance, the DPR stated that international market price shall be maintained for Nigerian crude that may be procured by a refiner – meaning that crude oil price discount shall not apply to the local refiners. The APRON leader considers this policy as discriminatory because, according to him, those who buy crude oil in Nigeria get discount, therefore, why must local refiners buy at international price, he asked.

    He also criticised the crude oil allocation formula, which stipulates that “government will guarantee crude oil requirement of refineries up to the maximum turn down ratio, that is, 60 per cent processing capacity of the plant to the extent that crude is available.” He argued that it should be 100 per cent to serve as incentive to private refiners. To ask them to source for 40 per cent of their crude needs may be problematic, he said.

    The APRON Chairman said because of the state of insecurity in the country, the foreign investors are asking for sovereign guarantee from the government and a guarantee that their investments would not be nationalised.

    Ilori, who is also the chairman of Atlantic Petroleum Limited, one of the licensed private refineries, disclosed that his company has spent $3.8 million on the project. In spite of the obstacles in the ways of private refineries, he assured Atlantic is still pursuing the project.

    He said: “We have foreign investors who are prepared to give us $500-600 million. But the state of insecurity in Nigeria is drawing them back. The last time they (investors) came to Nigeria, they were worried about the problem of kidnapping. One of them told me his wife warned him against travelling to Nigeria for security reasons. Unfortunately, after two days of their arrival, there was a news break on television that two foreign oil workers were kidnapped in the East. On hearing this, they immediately packed their things and left the country. All pleas that kidnapping is alien in Lagos could not persuade them to stay on.

    “Our refinery, which is to be located in Badagry will on completion have capacity to refine 100,000 barrels per day. We have attained the kick off stage. The report on preliminaries before the building starts is ready. What we are waiting for is offshore survey of the ocean to know the behaviour of the ocean. It is quite expensive but we have got a company to do it for us.

    “Because guarantee from government is not forthcoming that is why the investors are not willing to release their money. We have arranged for a bridging loan of about $130 million to kick-start the project hoping that would encourage the foreign investors to come and participate.”

    On frustration by the government, he said: “Government does its own thing without really considering our association or taking cognisance of the individuals involved. Recently, a government panel invited us to Abuja, which we honoured. We were in Abuja a day before the meeting. We were responsible for our transportation, accommodation and feeding. On the day of the meeting we waited for the panel at the venue for more than five hours only for one young man to come and tell us that the panel cannot attend to us again.

    “The panel wrote us again for a meeting in Lagos. It seems to me that members of the panel did not understand the nature of their assignment. They asked if we have renewed our licences. I told them we will do so when we are ready to take off. The panel just dismissed us without asking what we have on ground. The panel displayed arrogance of power. Nevertheless, I dropped our files with them so as to let them know the progress we have made on the project. That is almost four months and we are yet to hear from them. People in government and civil servants in the country have created a culture of impunity, which is not good for the nation.

    “In the past eight years, the government has announced to the whole world that it was going to build three Greenfield refineries in different locations and not a single one has taken off. Is it that the government lacks fund or technical facility?

    “To build Greenfield refinery of 100,000 barrel per day, you need at least $3 billion. How many Nigerian entrepreneurs can stick out their necks and go into it without foreign partners. Once the government agrees to guarantee foreign investment, foreign investors will come.”

     

  • SON endorses Conoil’s lubricants

    SON endorses Conoil’s lubricants

    The Standards Organisation of Nigeria (SON) has certified four of Conoil’s lubricant brands as high performance engine oils that provide maximum benefits to the users of modern vehicles and machinery.

    A statement from Conoil said the correct use of these lubricants ensures prolonged and trouble-free vehicle and machine operation.

    The lubricants – Golden Super Motor Oil SAE 40, Tro Tro Golden Super Motor Oil SAE 40, Golden Super Diesel SAE 40 and Quatro Heavy Duty Generator Oil 15W40 – met the specific requirement of relevant Nigerian industrial standards after series of rigorous and extensive tests of their content and production procedures.

    Golden Super Motor Oil gives adequate engine protection to older petrol engines, with good detergent and adequate viscosity retention with temperature. Golden Super Diesel engine oil is top quality diesel engine oil specially formulated to give reliable all-year-round service in light and medium duty, naturally aspirated engines.

    Infused with a comprehensive additive package and good anti-wear properties, Quatro Heavy Duty Generator Oil is the ideal choice for generating sets.

    Tro-Tro Golden Super Motor Oil is a quality multi-grade lubricant suitable for major light and medium duty vehicles that are fuelled by petrol or Compressed Natural Gas (CNG).

    Conoil described the latest SON certification as an attestation to its relentless effort to adhere to global best practices, produce high quality lubricants comparable to international standards and to provide excellent service that meet consumer satisfaction, in line with its objective of becoming the preferred marketer of lubricants in Nigeria and the West Coast.

    SON had previously certified Conoil’s lubricants, Quatro HDX, Okada Golden Super 20w50w and Quatro Ultra 20w50, confirming their status as world-class quality lubricant brands.

    Conoil boasts of highly skilled and experienced engineers capable of developing high quality lubricant products, innovatively, using modern technology.

    The company’s major lubricant plant in Apapa, Lagos is equipped with state-of-the-art facilities for testing lubricants, greases as well as upgrading existing products on continuous basis.