The Nation Newspaper

Category: Energy

  • Chevron begins Meren, Sonam platforms construction

    Chevron begins Meren, Sonam platforms construction

    Chevron Nigeria Limited (CNL), operator of the Nigerian National Petroleum Corporation (NNPC/CNL) Joint Venture, has taken a major leap toward using natural gas mined from its operations. It also eliminating gas flaring from its assets.

    The company has begun the construction of two new platforms – Meren field Gas Gathering and Compression Platform (GGCP) and the Sonam field Non-associated Gas Wellhead Projects (NWP) – meant for the development of Meren and Sonam fields. The construction of the platforms is ongoing in Nigeria and South Korea.

    According to sources, on completion, the GGCP and NWP are expected to deliver 120 million cubic feet per day (mmcf/d) and 300mmcf/d to the Escravos Gas Project (EGP).

    The fabrication phase of the platforms has started. The Nigerdock Nigeria Plc located at the Snake Island Integrated Free Zone in Lagos is doing the fabrication for the Meren GGCP jacket, piles and bridges and will also handle the entire Sonam NWP and associated structures as a sub-contractor to Hyundai Heavy Industries (HHI) of South Korea.

    The topsides of the Meren GGCP, are being handled by HHI and will be fabricated at HHI fabrication yard in Ulsan, Korea.

    Chevron’s General Manager, Facilities Engineering and Major Capital Projects, Mr Augustine Emelobe, who spoke on the projects, on behalf of the Director, NNPC/CNL Joint Venture, Mr Supo Shadiya, described the project as another success story, which showcases Chevron Nigeria’s commitment to and compliance with the Nigerian Oil and Gas Industry Contnet Development (NOGICD) Act. He noted that the company is proud to be associated with Nigerdock and HHI.

    He said: “We are pleased to be partnering with an indigenous company on this significant project, as this would build local content.”

    Managing Director, Nigerdock, Mr Chris Bennet, appreciated the opportunity to work on the project, saying it has brought about huge expansion to Nigerdock, including the building of a new paint shop, new quayside and upgrade of assembly area, steel rolling equipment, construction of new accommodation facilities, and purchase of new cranes, among others.

    On the project, the Executive Vice President of Hyundai Heavy Industries Mr D. Y. Kim said, Meren and Sonam are offshore assets located off Delta State. The cost of the platforms were not disclosed, but it was gathered that the two platforms may cost about $1.5 billion.

    In late 2011, a final investment decision was made for the $1.7 billion development of the Sonam Field. The 40 percent-owned and operated project is designed to use the EGP facilities to deliver natural gas to the domestic gas market and produce a total of 30,000 barrels of liquids per day. First production is expected in 2016.

    Also, with a 36.7 per cent interest, Chevron is the largest shareholder in the West African Gas Pipeline Company Limited, which owns and operates the 421-mile (678-km) West African Gas Pipeline.

    The pipeline supplies Nigerian natural gas to customers in Benin, Ghana and Togo for industrial applications and power generation and has the capacity to transport 170 million cubic feet of natural gas per daily.

  • Operators meet to enhance Nigeria’s LPG consumption

    Operators and other stakeholders in the gas sector of the petroleum industry met in Abuja to brainstorm on how to boost consumption of liquefied petroleum gas (LPG) also called cooking gas.

    The stakeholders, according to a statement, made efforts to fashion out strategic policies that will aid rapid growth in domestic LPG consumption in the country. The policies include forms of awareness creation on the benefit of LPG usage and best way Nigeria can rapidly develop the market.

    The meeting, which was co-sponsored by NIPCO, an indigenous downstream operator in the oil and gas, articulated a policy paper on domestic LPG usage, which would be submitted to the Federal Government for consideration in order to develop a viable and thriving LPG market.

    Managing Director, Nipco, Mr Venkataraman Venkatapathy, who spoke at the summit, said his company supported the meeting as part of its conscious initiative of deepening the LPG market through a well articulated policy for the benefit of all stakeholders.

    The company, he noted, had over the years put in place a massive 4,500 MT LPG storage facility and supported plethora of events for stakeholders to deepen the domestic gas market.

    The Managing Director recalled scores of joint sponsorships and sole campaigns undertaken by the company aimed at boosting LPG use as cooking gas and vehicular fuel, citing the LPG summit organised by the Senate, Federal Ministry of Environment auto gas fuel exhibition, Cooking gas Awareness programme organised by Lagos Chamber of Commerce and Industry (LCCI), among others.

    According to him, these initiatives are primarily to provide veritable platforms for a sustained campaign on the economic and environmental benefits of LP gas against the backdrop of the abundant gas resources in the country.

    He reiterated that Nipco is not in the LPG business as an investor alone but as a corporate entity desirous of availing the populace the benefits of using gas with the introduction of its three and six kilogramme cylinder with single burner stove.

    Venkatapathy explained that as part of the company’s conscious resolve to improve access to gas, LPG skid are being deployed to major cities across the nation using some of the company’s branded outlets.

    The skid, which is akin to a mini- gas station, he noted, offers dual purposes. He said it can be used to refill for domestic gas cylinders and refuel vehicles using LPG as auto fuel with its attendant economic and environmental benefits.

    He assured stakeholders of the company’s interest in increasing gas infrastructure in the country as epitomised in its investment running into billions of naira in the sector.

    The NIPCO chief commended the Ministry of Petroleum Resources for its vision for the sector and its assertion that LPG remains one of the veritable engines for economic growth of the nation in line with the gas master plan.

    He also commended the efforts of the leadership of the Nigerian LP Gas Association (NLPGA) for its various advocacy initiatives, which largely brought about the strategic policy discussed at the two-day conference.

    The summit was declared open by the Minister of Petroleum Resources, Mrs. Diezani Alison- Madueke and handed over 100 participants, who agreed that even though LPG use is a critical component of the gas master plan, there is still need for a policy document to harness gas resource and deepen its domestic use, especially as cooking fuel.

    Executive Secretary, Petroleum Products Pricing Regulatory Agency (PPPRA) Mr Reginald Stanley, who also facilitated the conference, urged all stakeholders to take keen interest in the policy document with a view to finalising it before the end of January 2013 preparatory to its submission to the Federal Government for approval.

  • Will Petroleum Minister meet stakeholders’ expectations?

    Will Petroleum Minister meet stakeholders’ expectations?

    Expectations from the Minister of Petroleum Resources Mrs. Diezani Alison-Madueke are high this year. EMEKA UGWUANYI reports

    Last year was chaotic for the petroleum industry. It began on a stormy note with protests over the withdrawal of fuel subsidy by the Federal Government and resultant increase in fuel price. The protests led to calls from Nigerians and interest groups for increased transparency and probity in the petroleum sector.

    There were calls from several quarters and groups for the sack of the minister for her alleged inability to meet the expectations of Nigerians, especially with the unveiling of the rot in the downstream sector through the probe of petroleum subsidy regime. The probe uncovered billions of naira corruptly frittered away by unscrupulous marketers who claimed subsidy refunds without actually importing fuel.

    The public outrage and calls for transparency in all transactions in the downstream sector compelled the minister to set up four task forces to cater for different areas of public complaints. The terms of reference for all the task forces were geared toward promoting efficiency and transparency in the petroleum industry and other parastatals under the ministry. The committees include the Special Taskforce on Petroleum Industry Bill (PIB), which was headed by Senator Udoma Udo Udoma, Special Task Force on Governance and Control headed by Dotun Suleiman, Special Task Force on Petroleum Revenue chaired by Mallam Nuhu Ribadu and Task Force on National Refineries headed by Dr. Kalu Idika Kalu.

    The taskforces have submitted their reports. Some of which revealed some uncomplimentary findings and recommendations. For instance, the Mallam Nuhu Ribadu-led taskforce revealed undue loss of public revenue through unwholesome practices by some parastatals under the ministry and allocation of oil blocks without recourse to due process and at give away prices.

    The Kalu Idika Kalu-led taskforce wrote off the refineries as mere scraps, noting that they operate below 20 per cent capacity, which led to fresh calls for privatisation of the refineries. But operators noted that if the refineries would be sold at this stage, it are complete loss to the country. They said that the potential investors that would bid for the refineries would so much under-price them that it would add no meaningful contribution to the country’s revenue base.

    Besides, they noted that some unpatriotic Nigerians would use fronts to buy them (refineries) at give away prices and later begin to make enormous profits from them. What the Federal Government has decided to do, is bring the refineries and some oil and gas national assets as well as the National Petroleum Development Company (NPDC) to form the national oil company post-PIB, which will be private-sector run and also listed on the Nigerian Stock Exchange (NSE).

     

    Downstream

    The downstream sector witnessed some hiccups especially in distribution of products resulting in fuel scarcity which was caused primarily by refusal of marketers to import fuel as expression of discontentment for the over N200 billion owed them by the Federal Government in subsidy refunds. The fuel scarcity was worsened by vandalisation of major distribution pipelines.

     

    Upstream

    The non-passage of the Petroleum Industry Bill (PIB) has continued to shut out fresh investments into the exploration and production segment of the oil industry. The undue rise in crude oil theft has continued to dampen investment prospects and oil companies especially Shell is adversely affected.

     

    Expectations

    Stakeholders in the industry expect the Minister of Petroleum Resources to explore avenues and reasons to convince the National Assembly to see the need to pass the PIB. It is the belief of the stakeholders that the passage of the bill would drastically reduce the corruption in the downstream through the enthronement of transparent business process and global best practices. The bill is expected to make the multinationals and other exploration and production companies to take definite stand on commitment to fresh investments.

    The minister is also expected to explore other models that would entrench stability in fuel supply that will enable motorists to drive into a retail outlet at any time across the country and buy fuel without queuing.

    “Other expectations include tangible value creation in the industry, which will result in increased employment of Nigerians in the industry, increased skills acquisition by Nigerians, sustainable technology transfer and transparent practices that would ensure safety and health of Nigerians especially those in producing communities and safe environment.”

     

    Scorecard

    The minister had commented on provisions of the PIB. She said the new PIB was drafted with equity in mind and that the concerns of the international oil companies were taken into consideration so as to engender a win-win situation for Nigeria as well as stakeholders in the oil and gas industry.

    Besides, to guard against reoccurrence of what happened in the past when the PIB was bogged down by allegations of forgery and different versions said to be in circulation, Alison-Madueke said the new PIB was imbued with security features and tamper proof attributes. She said apart from having watermarks bearing her own handwriting on every page, the draft bill is locked in a code such that no one can add to or remove anything from it without the code. “All these features are designed to secure the document to avoid the type of duplication that led to the emergence of fake versions of the old PIB, which created confusion in the National Assembly.

    She said her ministry last year took extra-ordinary measures to achieve sufficiency in gas supply to power stations to meet the Federal Government’s desire to ensuring improved electricity supply. Within the period, she declared a 12-month gas supply emergency plan designed to address the challenges of gas to power.

    “Delivery of gas to assure sufficient, uninterrupted supply to existing, as well as new thermal generating plants has been a special focus area of mine and the Ministry of Petroleum Resources. Up to recent times, gas supply to power plants outstripped demand to the extent that significant volumes of available gas remained unutilised on a daily basis. However a close analysis of the supply chain has revealed that over the last 10 years or so, there has been significant misalignment between power projects and gas supply sources,” she said.

    The efforts to strengthen the capacity and roles of the Gas Aggregation Company of Nigeria Limited (GACN), which is a DPR-regulated company of the Ministry of Petroleum Resources with responsibility for gas sourcing and allocation, as well as operator of the commercial framework of the Gas Master Plan, is also a milestone.

    In addition to its traditional gas demand management role which includes processing requests from gas buyers, managing gas supply/demand allocation, as well as facilitating Gas Supply Aggregation Agreement (GSAA) negotiations, the GACN was mandated to achieve the following: identifying gas sources/suppliers and designing incentives for accelerated domestic gas delivery; driving the implementation of the findings of the Emergency Gas Committee, which focused on short and medium term gas supply but on a sustained basis; and ensuring integration as well as alignment between gas demand and supply to ensure robustness of longer term gas supply to power. It is also geared towards providing implicit data to enable the DPR to be more proactive in compelling suppliers to meet domestic gas supply obligations, among others.

    The completion of critical pipelines, such as the 27kmX24 inch gas supply pipeline from Itoki to Olorunshogo via Ewekoro in Ogun State, the 56kmX24inch Escravos-Warri gas pipeline, which doubled the pipeline capacity and enhanced gas evacuation from Escravos as well as the 130kmX36inch Oben to Geregu pipeline, improved electricity supply as a result of steady gas supply.

  • ‘How to achieve stable power through reduced system collapse’

    ‘How to achieve stable power through reduced system collapse’

    System collapses have been responsible for some of the power outages experienced and once it occurs, it affects a substantial number of areas and customers across the country. What are the causes and way forward? EMEKA UGWUANYI, Assistant Editor (Energy) examines the development.

    Background

    The power supply chain consists of generation, transmission and distribution but customers of the Power Holding Company of Nigeria (PHCN) oftentimes blame power outage on the distribution companies, which however, is the nearest of the chain to them but a chunk of the outages were as a result of system collapse from the transmission division.

    The transmission arm of the power supply chain is very vital because it is responsible for taking electricity to various parts of the country, homes and offices. Unlike the generation and distribution segments, which alternatives can easily be provided when they develop faults, the transmission is not so in view of the grid system Nigeria runs. Therefore, whenever there is partial or total system collapse, substantial number of customers and areas are affected.

    To buttress how strategic the transmission division is to the power supply value chain, the former Minister of Power, Prof. Barth Nnaji, had in April last year, sacked three top officers of PHCN including the former Managing Director, Transmission Company of Nigeria (TCN), Akinwumi Bada; alongside Head, Operator of the Nigerian Electricity Market, Uzoma Achinanya; and Executive Director, Human Resources, PHCN, Olushoga Muyiwa.

    The TCN was sacked on accusation that there were several and consecutive system collapses within the period, which regularly threw the country into darkness. It was believed that there was connivance among the top officers in sabotaging government’s efforts to fix the power sector.

     

    Causes of system collapse

    The Executive Director (System Operator), Transmission Company of Nigeria (TCN), Mr Jonathan Ndiagwalukwe, an engineer, who spoke at a power summit in Lagos highlighted the importance of transmission arm of the electricity supply chain.

    In his paper entitled: Frequency control and grid stability, he said transmission originated disturbances like the tripping of critical tie-lines, wiping out of distribution loads during rainstorm, which result in high system frequency, inadequate transmission network redundancies for parallel and alternate power flows, major equipment failure that sometimes result in loss of part or the entire system, inadequate available generation for scheduling, sudden shutdown of generating units on fault or fuel (gas) supply problem, and inadequate or total absence of Spinning Reserve (unused capacity of generating units, which can be delivered without manual intervention) can cause system collpase.

    Others include absence or insufficient number of machines with functional Automatic Governor Control, poor SCADA/IED coverage of the grid, absence of protective earth wire on major load lines owing to vandalism and little maintenance coordination between generation, transmission and Nigeria Gas Company

    He maintained that supply of power at the right quantity helps maintain stable frequency while otherwise would cause system collapse. He also noted that a well maintained distribution network which ensure that the facilities are not overgrown by vegetation which can lead to snapping of wires if branches of trees fall on them (lines) and poles not destroyed by the slightest rainstorm, among others would ensure stable frequency.

    He said: “The quality of electric power supply is defined within the permissible variation in the statutory requirements of frequency and voltage. System stability is a subject of great interest to the system operator because it affects electricity supply quality and reliability.

    “Frequency is a measure of the speed of the generating unit’s shaft (rotor). It is measure in cycles per second. A 2-pole generator, for example, producing an output frequency of 50Hz, has an engine speed of 3,000 revolutions per minute (rpm). For a generating unit the revolution per minute (N) of the prime mover for a given system frequency f is given by N=120f/P where P is the number of poles.

    “An electric power grid is a system of electric power generation and transmission equipment/devices, including the lines – interconnected in a mesh (network) for efficient delivery of electricity. Power systems are often interconnected to: improve reliability and quality of power supply, reduce the spinning reserve requirement of individual systems and utilize the synergy offered by grid control and optimization devices.

    “In power systems, generation, transmission and distribution are interconnected at their interface points and frequency is common throughout the interconnection. If load and generation are matched, frequency is 50Hz. If load exceeds generation, frequency is below 50Hz and if generation exceeds load, frequency is above 50Hz and any large interconnected power system is composed of several generators synchronously connected.

    “Therefore, a perfect real or active power balance: is active generation equals active demand including losses. This ensures constant speed and frequency of operation but unfortunately, the load impressed on the system does fluctuate, more so, in a random fashion. It is, therefore, virtually impossible to accomplish equilibrium of active generation and active demand.

    “An excess or deficiency in active power generation will always manifest. This mismatch normally results in frequency fluctuation which could culminate in system instability.

    “In practice, we seek to achieve this balance through manual load shedding, generation scheduling or by the appropriate application of frequency relays. At steady state system, frequency is 50Hz in Nigeria and most countries of Africa and it is 60Hz in some countries, for example, the United States of America. Frequency control objective revolves around maintenance of the equilibrium between generation and load. This, in system operation parlance, is termed power balance.”

    On frequency operating limits, he said that the Grid Code stipulates the following: Nominal Frequency: 50Hz and Steady State: 50Hz +/- 0.5% [49.75Hz – 50.25Hz] and Under System Stress: 50Hz +/- 2.5% (48.75 – 51.25 Hz).

    He said that if there high frequency, it damages apparatus and customer equipment, causes generator over speed hazard and also injurious to transformer because (volt/Hz ratio exceeded).

    He said that a power system operates in normal state when system frequency and voltages are close to their nominal values, while maintaining scheduled load flow profile. “In this mode of operation, control is required to: maintain scheduled voltages and frequency, maintain scheduled tie line flows and obtain economic generation. He also explained the alert mode, emergency mode, and restorative mode

     

    System stability

    He said that a system that is able to develop restoring forces sufficient to overcome the disturbing forces – and restore equilibrium – is said to be stable. A system is termed insecure when this capability does not exist. Power system stability problems are commonly classified into two categories: Steady state and Transient.

    Steady state frequency controls take care of minor disturbances (variations) in the generation-demand equilibrium. System is in a steady state when all the required parameters impacting on System Operations exist like adequate generation, operating reserves and healthy transmission network.

    Transient stability problems deal with the effects of large, sudden system disturbances such as: Line faults, sudden switching of lines or the sudden application or removal of loads, loss of a major generating unit at a power station.

    Spinning reserve, he reiterated, is one key tool for managing system frequency and keeping the system stable. Experience from the operation of the Nigerian Grid between 15th January 2011 and February 2012 when there was reasonably sufficient Spinning Reserve clearly showed that. He said that Spinning Reserve should be taken seriously as a tool in managing system frequency for the attainment of a more stable grid.

     

    Solution

    Ndiagwalukwe said that although the Nigeria power system is without doubt problematic but there are ways to ensure more stable and secure grid. These include reduction in tripping of critical tie lines by having a well maintained transmission line trace as well as properly coordinated and discriminative line protection schemes.

    Others are replacement of vandalized sky wires that expose the lines to lightning strikes and replacement of obsolete transmission equipment to reduce the incidence of equipment failure to the barest minimum.

    He said well maintained distribution network with properly tensioned lines, free from over grown vegetation, broken wooden cross arms replaced and lean poles stood erect would forestall sudden large scale loss of distribution loads at the slightest rainstorm with its attendant high system frequency.

    He added that sudden shutdown of generating units on loss of gas pressure can be checked by developing robust and well maintained gas supply system

    According to him, deployment of spinning reserve on units that have been identified to have functional automatic Governor Controls are vital adding that power stations capable of doing this are those at Egbin, Ughelli, Olorunsogo NIPP and Kainji.

    He noted that the on-going SCADA reactivation, which would be completed soonest, would help to avail the System Operator the benefits of Energy Management System (EMS) and effective use of Automatic Generation Control (AGC), which can only be offered by a fully working SCADA system.

    He said also vital is a coordinated maintenance programme involving the Nigerian Gas Company (NGC), generation and transmission divisions as well as construction of additional relief/redundancy lines to the critical 330Kv Onitsha – Benin and Alaoji – Onitsha single circuit lines.

    The creation of more loops in the grid, such as Alaoji – Ikot Ekpene – Ugwuaji – New Heaven 330kV loop, are important, he said, adding that these projects, which are on-going, will, on completion, make the grid more robust, flexible and resilient to system instability.

    He noted that building power stations in the North would improve both voltage stability in the area, especially the Northeast.

  • ConocoPhillips continues assets divestment in Africa

    Barely one week the American oil giant, Conoco Phillips, sealed deal with Oando Energy Resources (OER), an affiliate of Oando Plc, to ConocoPhillips to acquire its entire business interests in Nigeria for a total cash consideration of $1.79 billion plus customary adjustments the company has also agreed to sell its Algerian business unit to Indonesian state energy company PT Pertamina for $1.75 billion, plus customary adjustments, as part of its ongoing asset-disposition programme in Africa.

    ConocoPhillips Algeria Limited, according to Dow Jones Newswires, holds interests in three major onshore oil fields that averaged 11,000 barrels of oil equivalent per day through October. ConocoPhillips said the net carrying value of its Algerian assets was roughly $850 million as of October 31, 2012.

    The report said that ConocoPhillips expects to close the transaction by mid-2013 adding that the Houston-based energy company is in the midst of a three-year repositioning aimed at improving its balance sheet and focusing on more profitable, less risky unconventional fields in North America. ConocoPhillips has sold or plans to sell more than $7 billion in assets in 2012, including a $5 billion sale of its stake in Kazakhstan’s Kashagan field in the Caspian Sea announced last month. The company also spun off its refining arm earlier this year to Phillips 66.

    Oando, during the transaction said, in a statement by its spokesman of Oando, Mr Meka Olowola, that the transaction includes the intended purchase of Phillips Oil Company Nigeria Limited, which holds a 20 per cent non-operating interest in Oil Mining Leases (OMLs) 60, 61, 62, and 63 as well as related infrastructure and facilities in the Nigerian Agip Oil Company Limited (NAOC) Joint Venture.

    He also said the other partners are the Nigerian National Petroleum Corporation (NNPC) with a 60 per cent interest and NAOC (20 per cent and operator); and Phillips Brass Limited, which holds a 17 per cent shareholding interest in Brass Liquefied Natural Gas (LNG) Limited, which is developing the Brass LNG project, a Greenfield project to develop a two-train, 10 million ton per year liquefied natural gas facility in Bayelsa State, Nigeria. The other partners in this project are NNPC (49 per cent); Eni (17 per cent) and Total (17 per cent).

    In the offshore business arm of the deal, Oando said it would also acquire ConocoPhillip’s’s 95 percent interest in OML 131 in which Medal Oil owns five per cent; and ConocoPhillip’s 20 per cent non-operating interest in oil prospecting licence (OPL) 214.

    The other partners in OPL 214 are ExxonMobil (20 per cent and operator), Chevron (20 per cent), Svenska (20 per cent), Nigerian Petroleum Development Company (15 per cent) and Sasol (five per cent).

    Pursuant to the proposed acquisition, Oando will purchase all of the issued share capital of ConocoPhillips’ onshore and offshore affiliates in Nigeria. Upon closing, the effective date of the proposed acquisition will be today.

    According to Olowola, in connection with the proposed acquisition, Oando has retained The Petroleum and Renewable Energy Company Limited (Petrenel), OER’s independent reserves evaluator, to prepare a report on the reserves and resources of OMLs 60, 61, 62 and 63, which are onshore and OML 131 and OPL 214, which are offshore assets, proposed to be acquired under the proposed acquisition.

    Oando has got approval from Security and Exchange Commission (SEC) to raise N54.6 billion through right issue, which opened on December 28 and would close on February 6, 2013.

  • ‘Govt must implement policies to encourage new refineries’

    ‘Govt must implement policies to encourage new refineries’

    For sustainable growth of the petroleum industry, the Federal Government must not only put in place policies but ensure they are effectively implemented to bring efficiency and profitability in the refining industry, Prof Yinka Omoregbe has said.

    Omoregbe, who spoke in Lagos, said to achieve this, the government should also shun every interest that is politically motivated, ensure the continuity and reliability in the operation of the present refineries to make them reach the expected life span as stipulated by international standard.

    Prof Omoregbe , a lawyer and consulting lecturer at the University of Ibadan, said though enabling statutes were well spelt out in the various legislations, but effective implementation of the policies had been the major problem confronting the industry.

    According to her, government policies and their implementation are the most important factors in the refining industry, because government policies shape the demand and distribution of petroleum products, price and other economic indices of the country.

    Omoregbe said the status of the four government refineries, compared to the rapid growth in consumption of petroleum products have necessitated the establishment of more refineries by the government, local and foreign investors.

    She said: “The ever increasing consumption of petroleum products and inability of the existing four government refineries to meet the local demand necessitate the need for new refineries to be established.”

    She said the deregulation of the downstream petroleum industry with the attendant investment opportunities, business potential and incentives therein, has made private initiatives an inevitable option to meet the local demand and also open up avenue for export of refined petroleum products in a foreseeable future.

    The establishment of new refineries, she noted, would further boost the export potential for refined petroleum products to the international market including the Economic Communities of West Africa (ECOWAS) and the sub-Saharan Africa.

    The development, she added, would in addition create opportunities for employment, technology transfer, human capital development and capacity building, local utilisation of the crude oil endowment with backward integration for value chain investment opportunities and rapid transformation of the operating environment.

    She noted that the business opportunities for investment in the oil and gas industry in Nigeria are diverse adding that the appropriate laws stipulating the conditions and guidelines for the establishment of a refinery by any person or company in any part of the country are quite open.

    She, however, noted that the government had encouraged the establishment of export-oriented refineries in the export-processing zone (EPZ) through the enactment of the oil and gas export free zone decree.

    The free trade zones, she said, offer a lot of incentives to both local and foreign entrepreneurs including the exemption from taxes, levies, surcharges, import and export, duties, repatriation of foreign capital investment, and technology transfer among others.

    Omoregbe also said the benefits of the passage of the petroleum industry bill would far outweigh the challenges to be encountered by the organised private sector adding the implementation of the harmonised bill would rather bring about equity, fairness and overall development of the oil producing communities.

  • ‘Why PIB must address community interests’

    The inclusion of interests of oil producing communities has been identified as one the best provisions in the Petroleum Industry Bill (PIB), now before the National Assembly.

    An industry stakeholder said part of the problems oil companies face in the oil producing areas is the weakness of laws defining rights to property by the oil and gas producing communities.

    President/Chief Executive, Swamp Blue Pearl, Kuromiema Amiabiye, who spoke at a forum in Lagos, said the communities are underserved in capacity building opportunities by the industry and governments including the Petroleum Technology Development Fund (PTDF) and the international oil companies (IOCs) especially in the areas of corporate social responsibility (CSR), job training and education scholarship programmes.

    He added that host communities witness a lot of discriminations by government’s agencies and business operators at all levels.

    He said the PIB when passed into law should be able to address all the community concerns and associated discontentment for smooth and profitable business operating environment in the industry. This development will ensure sustainable social and economic stability and integration of the nation.

    He also said communities are constantly at war with management and authorities over access to information and orchestrated impediments in recruitment, contracts and business opportunities in view of the fact that the oil and gas resources are derived from their land.

    He said: “Preference for beneficiaries are induced by ethnic/sectional considerations and political patronage that favour migrants into the communities and region; and political protégés whose benefactors are ‘outside operator’ of the industry and/or political godfathers, who control the levers of power and decision processes with respect to recruitment, contracting, business opportunities, among others.”

    He expressed disappointment that after 50 years of oil and gas exploitation, social infrastructure and amenities are still absent in the Niger Delta region.

    Government and corporate instruments for management of the benefits in the region face serious abuses, corruption and run on sponsorship.

    He said operators use all sorts of schemes to evade corporate governance rules to ensure that management of benefits goes their way.

    He said: “Within governments however, patronage and fraud remain the norm. Huge resource such as funds designated for community development through Niger Delta Development Corporation (NDDC), Ministry of the Niger Delta Area and the statutory 13 per cent derivation revenue, states/local government allocation targeted at communities, all show no visible impact on the physical and social landscape, or human development conditions of communities,” adding that even when provided, they are carted away with impunity.

  • Local content: Firm calls for more patronage from multinationals

    Engineering Automation Technology Limited (EATECH), a local engineering firm, has called for an increase in patronage from International Oil Companies (IOCs) on products and services offered by indigenous firms as that would boost the capacity of local firms in the oil industry.

    Managing Director of the company, Mr Emmanuel Okon, Okon spoke at the company’s fifth anniversary in Lagos.

    He noted that poaching doesn’t encourage growth of human capital base of local firms.

    He said low patronage of products and services introduced into the industry by local firms, impedes the development of some local firms.

    Okon also called for urgent intervention of the Federal Government in the act of poaching in the services sector of the industry. He said that it is vital for the government to help stop poaching of skilled Nigerian workers from indigenous firms by foreign oil and gas companies.

    He said with poaching and the ever-present problem of difficulty in sourcing for funds, the survival of most local contracting firms is slim.

    Okon noted that his company had lost a substantial number of trained staff to multinational oil and gas companies.

    He therefore demanded that payments for projects executed by local firms executing projects for major oil companies to be at par with what foreign contracting firms obtained.

    Okon said despite the poaching constraint, it was imperative for local firms to increase funding to train more future human capital in our tertiary institutions as part of their Corporate Social Responsibility.

    “Funding presents itself as the major factor facing most indigenous entrepreneurs in running successful businesses in the oil and gas industry,” said Okon.

    “Indigenous companies providing similar services like their foreign counterparts are paid less thereby affecting negatively their ability to sustain competent and certified personnel especially those trained by them.

    “The twin evil of poaching trained personnel by multinational companies and sustaining these trained personnel by local companies is a challenge which requires the intervention of regulators,” he added.

    Okon, who identified the high remuneration of staff by multinational firms, noted that they were able to pay higher salaries because they usually got more income earnings from even similar contracts or jobs performed by local firms.

    He said to improve the manpower base for local firms, despite the poaching by foreign firm, EATECH had to inaugurate an award (that goes with N100,000 gift) for the best graduating student of the Electrical and Electronic Department of the Akwa Ibom State Polytechnic, in Ikot Ekpene.

    Okon lauded the local content policy of the government, saying it had enabled his company established five years ago, to undertake projects in an industry hitherto reserved for foreign multinational.

    The industry is regulated mainly by the National Petroleum Investment Management Services (NAPIMS), the Local Content Monitoring and Development Board and the Department of Petroleum Resources (DPR).

    Okon said it was important for these regulators to “implement radical but careful tripartite relationship in providing guarantees for access to project specific finances especially to indigenous companies whose services are listed on NIPEX.”

    He said this option would provide alternative or additional comfort to banks where genuine indigenous companies cannot provide additional collateral in addition to domiciliation.

    Engineering Automation Technology started operations in November 2007 with seven staff and Saipem Contracting Nigeria Limited as pioneer customer.

    At present, the local firm provides services to other multinationals. They include ExxonMobil Group; Total Upstream; Delattre Bezons Limited; Aveon Offshore Nigeria; and ZB Joint venture Limited.

    The company holds the ISO: 9001:2008 Certification.

  • Ghana’s oil production exceeds 105,000 bpd

    Oil production from Ghana’s Jubilee Oil Field is now in excess of 105,000 barrels per day (bpd), one of the partners, Kosmos Energy, has announced.

    According to Daily Graphic reports, the lead operator on the Jubilee Field, Tullow Oil, in a report last week, said production had reached 90,000 bpd because the much anticipated Jubilee Phase 1A project had finally come on stream.

    It said production on the Phase 1A was now at a rate of 16,500 bpd boosting total output on the field to 90,000 bpd.

    In its update on the company’s global operations, Kosmos Energy said production was in excess of 105,000 bpd.

    The two figures from Kosmos Energy and Tullow Oil are indicative that production levels on the field seem to have improved again.

    When Ghana begun the commercial production of oil in December 2010, it was expected to produce 120,000 bpd but that could not materialize as a result of some technical challenges in the oil-producing wells.

  • Total, French Embassy partner on human capital devt

    Total, French Embassy partner on human capital devt

    A joint scholarship scheme (TQJS) entitled: TEPNG/ Quai d’Orsay, has been established between Total and the Embassy of France in Nigeria.

    Under the new programme, five Nigerians are to benefit from a yearly scholarship sponsored by Total and the French Embassy in Nigeria with effect from the 2012/2013 academic year.

    According to a statement by the company’s Manager, External Communication, Charles Ebereonwu, the agreement to formalise the programme was signed at the French Embassy in Abuja between Total Exploration and Production Nigeria Limited (TEPNG) and the embassy. The Managing Director/Chief Executive of TEPNG, Mr Guy Maurice signed for Total while the Ambassador of France, Jacques Champagne de Labriolle signed for the Embassy of France in Nigeria.

    The programme started with a pilot scheme this year when a candidate was selected and sponsored to study International Law in France. The agreement makes provision for a four-man steering committee to manage the scheme on behalf of the parties.

    The cost of each of the international scholarship is about 54,000 euro. Benefits to be enjoyed by the selected beneficiaries include a sum to cover travel expenses, academic fees if in a private university or institution in France, living expenses for 10 months, including food, housing costs and academic text or materials, logistics support in obtaining necessary permits or visas for the selected students, health insurance for each beneficiary (bourse de couverture sociale) such as will give the beneficiaries the status of French government scholarship’s beneficiaries and the health care benefits associated with this status.

    Others include 60 hours minimum language training in Nigeria for the selected students and school fees for beneficiaries selected into public universities in France.

    “Understanding changes in your environment is not a matter of specialisation but a matter of personal balance and culture,” said Ambassador Champagne de Labriolle as he explained that the programme was borne out the need to contribute to the training of Nigerians in different fields. He thanked Total for its contributions to the development of the Nigerian society.

    Also speaking, Mr Guy Maurice, noted that such initiative on the part of the company was a reflection of its confidence in the country and continuation of what it did in the past.

    The Quai d‘ Orsay educational cooperation between them started in 2011 and operates in other subsidiaries.

    Total’s delegation to the event included the Executive General Manager, Corporate Services, Mr. Vincent Nnadi; Executive General Manager Public Affairs and Communication, Mr. Chidi Momah; Training & Development Manager, Mr Sam Nkwo and Senior Legal Counsel Mr Adesina Salawu.

    The Ambassador’s team included the Counsellor for Co-operation and Culture, Mr Patrick Perez.

    Total has been collaborating with top rated institutions around the world as part of its contribution towards human capacity development in its host communities.

    It is the main sponsor of the Institute of Petroleum Studies (IPS), a postgraduate institution, at the University of Port Harcourt it run with the prestigious Institute France du Petrole (IFP) France.