The Nation Newspaper

Category: Energy

  • Expert tasks govt on oil spill laws

    Expert tasks govt on oil spill laws

    The Chairman, Port Technology Consultancy Services, ChinedumOnyemechi, has called for replacement of Nigeria’s oil spill laws.

    Onyemechi, who is also a lecturer in the Department of Maritime Management Technology, Federal University of Technology, Owerri, said the new legal framework must meet international standard and include the polluter pays all principle.

    He made this call while delivering a lecture titled: “Oil Spill contingency planning and control techniques” during the Logistics West Africa Strategic Conference and Exhibition in Lagos.

    Acknowledging that it is impossible to determine exactly when an oil spill would take place, he however, said that if preventive measures were put in place, the amount of damage that is likely to be encountered would certainly be reduced.

    In addition, he said there should be a requirement that corporations handling oil design must incorporate an oil contingency and response plan into their daily operation, which he said should be signed by the National Oil Spill and Detection Agency(NOSDRA) and re-evaluated on an annual basis.

    He stressed the need for the government to ensure a sustainable oil spill plan that would foresee training as well as the incorporation of oil spill emergency plan in the daily operational duties of the oil companies and ships operating in the Nigerian waters.

    He said the government control system would only be effective when the oil spill consciousness is properly internalized by corporations working in the oil industry and exclusive economic zone (EEZ).

    The expert added that the atmosphere, marine environment, and the seashore were at risk of pollution in the event of an oil spill. He said all coastal states ought to ensure that a workable emergency/contingency plan is put in place to ensure the containment of an oil spill incidence.

    More so, he noted that a supervising national body whose role it shall be to ensure that all major petroleum-carrying facilities including the oil companies, refineries, and ships develop a facility oil pollution emergency plan that would be acceptable to the body.

    Contingency plan he explained, is a set of instructions that outlined the steps that would be taken before, during and after an emergency.

    In formulating a contingency plan he said there is need to consider all the possibilities of what could go wrong and ways through, which a response or remedial action could be taken to contain the situation.

    He maintained that in carrying out a vulnerability analysis, the contingency (emergency) planner should be able to provide information about resources and communities that would be at harm in the event of an oil spill.

    Through this analysis he said personnel involved in an oil spill cleanup would make reasonable and well informed choices about protecting public health and the environment,t adding that proper monitoring of the industry from the design stage to the operational stage is the only sustainable cure to oil spill prevention.

  • NPDC’s oil production hits 130,000 bpd

    NPDC’s oil production hits 130,000 bpd

    Crude oil production by the Nigerian Petroleum Development Company (NPDC), the exploration and production subsidiary of the Nigerian National Petroleum Corporation (NNPC) has hit 130,000 barrels per day (bpd).

    The Group Managing Director of NNPC, Mr Andy Yakubu, disclosed this through the Managing Director of the National Engineering and Technical Company Limited (NETCO), a subsidiary of NNPC, Mr.IshakuAbdullahi, at the just-concluded Lagos International Trade Fair.

    He identified sustained amnesty programme of the Federal Government and the re-entry into the abandoned fields and facilities by the company as a major factor responsible for the improvement in the production.

    He said: “With the return of peace in the oil-producing Niger Delta due to the amnesty programme, the NPDC re-entered abandoned oil fields and resumed production. This has positively impacted on the NPDC’s growth aspiration with current crude oil production now averaging about 130,000barrels per day.”

    Yakubu said abandoned assets of the NNPC/Shell Joint Venture had also been reactivated and production ramped up on the divested Shell’s assets. He noted that the NNPC was also implementing a robust programme aimed at drastically reducing the development costs of both joint venture and Production Sharing Contract (PSC) projects in order to increase government’s take from oil revenues.

    He said the corporation had acquired three-Dimensional Seismic data gathering equipment as part of efforts of the Federal Government to increase the country’s crude oil reserves through increased exploration in the Inland Basins, especially in the Chad Basin.

    The NPDC has its head office in Benin in Edo State and base offices in Port Harcourt and Warri. It was established in 1988 as a wholly owned subsidiary of the NNPC. Its operations are concentrated mainly in the Niger Delta and span five States – Imo, Edo, Delta, Bayelsa and Rivers.

  • ‘Poaching, others impede local oil firms’ growth’

    Poaching of staff, lack of access to fund and lack of provision of start up leverages for indigenous oil service companies by the Nigerian Content Act are some of the major challenges impeding the growth of oil industry.

    The Managing Director of Engineering Automation Technology Limited, Emmanuel Okon disclosed this at the Fifth Anniversary of the company in Lagos.

    He drew the attention of the government and the Nigerian Content Development and Monitoring Board to the need to support indigenous oil service companies.

    He said: “Where appropriate structures and systems exist as in Engineering Automation Technology Limited, funding presents itself as the major limiting factor facing most indigenous entrepreneurs in running successful business operation.

    “Existing legislations including the recent celebrated Local Content Act do not provide start up leverages for competent and ambitious indigenous companies like ours. This has negatively impacted on our business aspirations giving rise to operational challenges also faced by other local companies.

  • ‘Alison-Madueke hasn’t given discretionary oil block’

    ‘Alison-Madueke hasn’t given discretionary oil block’

    The Association of Good Governance and Probity in Nigeria has absolved the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, of the alleged discretionary award of oil blocks and the missing signature bonuses paid for them.

    The report of Mallam Nuhu Ribadu-led Task Force on Petroleum Revenue that was submitted to President Goodluck Jonathan last week but earlier seen by Reuters, which reported that a total of $183 million realised from signature bonuses paid by oil companies to the federation was missing.

    Reuters’ report accused the Ministers of Petroleum Resources that served between 2008 and 2011 of giving out seven discretionary oil licences and which the $183 million signature bonuses allegedly realised from them got missing, which also led to calls for resignation or sack of Alison-Madueke by some groups.

    The spokesman of Association of Good Governance and Probity in Nigeria, Mr Daniel Agada, however, said the group’s investigation at the Department of Petroleum Resources (DPR), showed no discretionary award of oil blocks has taken place during this administration. It added that the most recent discretionary oil block award took place in 2008, while others are marginal fields.

    The group said the acreage allocation done in 2008 was to Addax and partners, which Addax Petroleum had 40 per cent equity; Express Petroleum 39 per cent; and Petroleum Prospect 21 per cent. The acreage, it noted was originally discretionally awarded in the 1990s but passed through protracted litigation until it was concluded in 2008. It added that the signature bonus paid for the allocation was $10 million.

    They also said it was important to distinguish between the issuing of oil blocks with that of marginal fields.“There were some discretionary award of marginal fields such as Okwok and Ebok which were awarded to Oriental Energy in May 2007 as compensation for losses due to boundary adjustment; Ubima was awarded to All Grace Nigeria Limited in 2010, as encouragement for commitment to small scale gas project; and Otakipko was awarded to Green Energy Limited, also in 2010 for the same reason.

    “It is pertinent to note that this is standard practice and not one that was initiated by the present government. It is clear that there is not enough understanding of the difference between exploration block (OPL) awards and marginal fields awards. The report has resulted in massive confusion. The three (Allgrace, Oriental and Green Energy) are marginal field awardees and they all paid flat signature bonuses of $150,000 per field as per pre- existing marginal fields guidelines,” the group said.

    Marginal fields areacreages considered commercially unviable by the big player such as the international oil companies and are given to small exploration and production indigenous companies.

  • Ogun to boost power supply with alternative energy

    Ogun to boost power supply with alternative energy

    The Ogun State Government has stated its commitment to boost power supply in the state through the exploitation of the abundant resources through which alternative energy could be produced.

    It made this committment at the opening ceremony of a three-day alternative energy expo with the theme Alternative energy for increase capacity and sustainability.

    The confab, which was organised by the Ogun State Government in collaboration with Mathesis Consulting Company (UK), held at the June 12 Cultural Centre in Abeokuta. The Governor of Ogun State, Senator Ibikunle Amosun, identified efficient power supply as fundamental to the growth and development of the economy of any society.

    He said Nigeria has a huge deficit in its power supply framework, which cannot sustain the demand for electricity in the country hence the need for an alternative means of energy supply

    Amosun identified other means of energy supply to include solar, biomass, wind, waste to energy and other renewable sources of energy, which if embraced, could help in reducing Nigeria’s dependence on power generated through fossil fuels.

    He said that Ogun State’s hosting of this year’s Nigeria Alternative Energy Expo is part of his administration’s commitment towards providing the enabling environment for economic development and improving the living standard of the people.

    As part of efforts of his administration to contribute to the socio-economic development of the state, Amosun said the distribution of 500 transformers of different rating has commenced across the state while a solar energy project is being executed at Asore Village aimed at increasing access to electricity in the rural areas.

    The Special Adviser to the Governor on Energy, Mr Taiwo Fagbemi, also said the expo among other things, is aimed at creating a platform for business people, government and non-governmental organisations (NGOs), to brainstorms on policies on alternative energy solutions, climate change initiatives and technologies and also to examine the challenges and barriers hindering the achievement of renewable energy efficiency and conservation and proffer way forward.

    He stressed the efforts of the state government in renewable energy including the energy workshop held early this year to train professionals in the energy sector and also the energy survey, which will commence in December to determine the energy requirement of each household, and local government.

    Explaining reason for the state government, commitment to exploitation of alternative energy sources, Fagbemi said that energy is central to practically all aspects of sustainable development including access to water, agriculture and industrialisation productivity, healthcare, educational attainment, job creation and climate change, among others.

    He said out of the 350-400 megawatts (MW) of power required to run Ogun State, only about 40-50MW is supplied from the national grid, which is seven times less than what it requires to operate efficiently and to serve its purpose of providing the essential needs of the people in the small, medium and large scale industries.

    Some of the foreign exhibitors at the expo that declared their readiness to partner with the state in renewable energy include Anji Dasol Solar Energy (China), Agama Energy (South Africa) Black Lite Energy (South Africa), and Bam Equipment & Technology (France).

  • $191b expected from oil & gas domiciliation

    $191b expected from oil & gas domiciliation

    The Nigerian Content Development and Monitoring Board (NCDMB) is working toward the retention of $191 billion from domiciliation of oil and gas activities, which currently are being exported due to lack of indigenous competence and dearth of locally manufactured equipment.

    The Executive Secretary of Nigerian Content Development and Monitoring Board, Ernest Nwapa, who disclosed this in Lagos, said the retention of the $191 billion value in-country is expected to be achieved by 2020, adding that the board aims to domicile over 65 per cent of oil and gas industry.

    He noted that part of the value creation would be through the creation of about 300,000 new direct jobs opportunities, which will come from engineering, among other areas of operation in the industry as well as engagement of Nigerians as technicians.

    He explained that the undue export of value, which exists in the oil industry, has been as a result of focus on revenue that accrues from oil and gas production as against focus on developing capacity and manufacture of facilities and equipment locally. “We have been focusing on revenue, which has turned the country into buying and importing.”

    He noted that the board is aggressively reversing the trend.

    Nwapa also spoke on delay in the tendering process for oil and gas contracts in Nigeria, poaching of staff and need for Nigerian companies to come together as a group to seek loans from banks.

    He explained that the reason tendering process for contract awards take much longer in Nigeria is to ascertain that jobs are given to genuine and serious-minded entrepreneurs. Tendering process takes between 18 months and 36 months as against six months or less in other oil producing countries.

    But Nwapa said that to ensure that the objectives of the Nigerian Content Act is achieved, the government should be meticulous in the scrutiny of bidders and claims in order not to give jobs to briefcase- carrying business people.

    Industry operators have over the years complained about the delay, which they said make contracts more expensive than they should be. The NCDMB boss said the process is being improved upon on sustainable basis.

    On poaching of staff by the bigger and richer companies or other competitors, Nwapa said that there is nothing the board can do as it doesn’t have the power to stop people from moving on to offers they consider better but noted that the situation indicates need for serious capacity and skills development.

    He also advised indigenous companies to seek funds from banks as a group especially now that the board plans to partner with some banks to ensure that local companies access funds by paying 50 per cent of their interest rates.

    The board is working on phased increase in indigenous equity to meet the Nigerian Content Act’s requirement to ensure Nigerian companies account for 50 per cent industry activities.

    Nwapa said the board through the Nigerian Content Development Fund (NCDF), is assisting with long term funding and equity financing. The fund is built with one per cent of all upstream contract sums.

    He said 30 per cent of the fund would be for direct intervention for Nigerian companies while the board would shoulder 50 per cent of interest rates for money borrowed by Nigerians firms for projects meant to develop capacity.

  • Chevron records $5.3b Q3 income

    Chevron Corporation said it recorded earnings of $5.3 billion ($2.69 per share – diluted) for the third quarter 2012, compared with $7.8 billion ($3.92 per share – diluted) in the 2011 third quarter, indicating a drop of $2.5 billion when compared to the same period last year.

    Commenting on the financial result, the Chairman and Chief Executive Officer of the company, John Watson, said: “This quarter’s earnings were solid, but off from their near record level of a year ago.

    “Crude oil prices were down and we had a heavy period of planned oil field maintenance, which temporarily reduced oil and gas production in several locations. Foreign currency movements also hurt our results this quarter, while they benefited the year-ago period.

    “We continue to progress our upstream projects. Gorgon in Australia and Bigfoot and Jack/St. Malo in the deepwater Gulf of Mexico are all over 50 per cent complete. The Wheatstone Project in Australia is also off to a good start. Each of these projects is expected to deliver significant future value for our shareholders.”

    The company said that its net oil-equivalent production across the world was 2.52 million barrels per day, which Nigeria contributed to.

    “Worldwide net oil-equivalent production was 2.52 million barrels per day in the third quarter 2012, down from 2.60 million barrels per day in the 2011 third quarter. Production increases from project ramp-ups in Thailand, Nigeria and the United States were more than offset by the effects of planned maintenance-related downtime, normal field declines, continued shut-in of the Frade Field in Brazil, dispositions and storm-related shut-ins in the Gulf of Mexico. The company expects increased production in the fourth quarter 2012 compared to the current quarter, reflecting the completion of planned turnarounds and restoration of shut-in production in the Gulf of Mexico,” the company added.

    International upstream earnings of $4.02 billion decreased $676 million from the third quarter 2011. The decline between quarters was primarily due to lower volumes and realisations for crude oil, as well as higher exploration expense. Mostly offsetting these effects was a nearly $600 million gain on sale of an equity interest in the Wheatstone Project, and lower tax items. Foreign currency effects decreased earnings by $252 million, compared with an increase of $304 million a year earlier.

    In the downstream, Watson said: “In the downstream, we continue to reposition the business toward high growth chemical and specialty products and to sell non-core assets. The company’s 50 per cent-owned Chevron Phillips Chemical Company LLC (CPChem) announced that its 35 per cent-owned Saudi Polymers Company began commercial production at its petrochemical project in Al Jubail, Saudi Arabia. Also in the third quarter, the company completed the sale of its idled Perth Amboy, New Jersey, refinery, which had been operating as a terminal, and two of its fuels marketing businesses in the Caribbean.”

    International downstream operations earned $233 million in the third quarter 2012, compared with $1.3 billion a year earlier. Current quarter earnings decreased due to lower gains on asset sales, including the absence of a 2011 gain of approximately $500 million from the sale of the Pembroke Refinery and related marketing assets in the United Kingdom and Ireland. An unfavourable change in effects on derivative instruments also contributed to the lower earnings in the 2012 quarter. Foreign currency effects decreased earnings by $43 million in the 2012 quarter, compared with an increase of $148 million a year earlier, the company said.

  • DPR moves to transform operation

    DPR moves to transform operation

    •Shell, Chevron, Total, Dubri licences for renewal

    The Department of Petroleum Resources (DPR) has begun the deployment of equipment and strategies that will enhance its operation and make it compete effectively with other oil industry regulators in the world.

    The Director, DPR, Mr Osten Olorunsola, said the Department is deploying new approaches and equipment to ease and standardise its operation.

    These include the introduction of gas network code, deployment of remote systems, offshore personal accountability system, trucking policy, and marine locator device.

    The new introductions are part of the Olorunsola’s transformation plan to move the Department to the next level. He said the new ideas and applications have become imperative because the DPR personnel would not be everywhere at the same time to monitor activities.

    He also said the regulator is focusing on renewal of expired licences of shallow offshore assets of some oil companies having done that of ExxonMobil early in the year.

    He said: “One of the core things we are looking at this year was to renew expired licenses, especially in the shallow offshore. We have concluded for ExxonMobil early in the year. We are doing the same for Shell Petroleum Development (SPDC), Chevron, Total as well as Dubri.

    “Gas is becoming a very exciting place both in terms of development and for revenue generation. We are actively working toward what we call – a gas network code – which is purely a protocol that will regulate how the players as well as the molecules interplay within the pipelines. We will also regulate that, and we are just trying to conclude the code tighter with the Nigerian National Petroleum Corporation (NNPC) and the industry.

    “We are increasingly investing in real time monitoring systems because we cannot be everywhere. Facilities are around the whole country and rather than just keep them or keep people there on permanent basis, which is also not the right thing to do, we are investing quite a lot in remote systems where we can actually monitor them right from the office.

    “We have been able to install in five locations along the area to monitor the Escravos-Lagos Pipeline System as far as gas production and transmission is concerned. We have commenced implementation of the offshore personal accountability system, which is a device to make sure we have firm control on all personnel that go offshore. Without data there is no way you can own regulator control. This is our first attempt and it is a global best practice to make sure we have the right equipment and protocol – managing all those who go for offshore activities. We will also introduce the marine locator device – specialised equipment that I can call a departure from manual safety jacket to intelligent jacket because if anything happens, it would be save you.

    “For instance, recently there was a helicopter that dished in the North Sea and the 19 people on board of the craft that were coming from a rig were all saved and it was because of the intelligent jacket they all had. It not just nice to have it, it is the way to go.”

    Olorunsola also said the Department is progressing in the implementation of the trucking policy following a successful pilot last year. He said expressed excitement over the drop in flared gas..

    He said gas flaring as at end of September dropped to 1.4 billion cubic feet per day, which is 18 per cent of total gas produced as against 25 per cent by end of last year. This is a reduction of about 5.7 per cent from volume flared last year. He said gas utilisation has risen in excess of 80 per cent of total production.

  • NAPE confab, exhibition hold next week

    The Nigerian Association of Petroleum Explorationists (NAPE) will hold its 30th international conference and exhibition at the Eko Hotel & Suites, Victoria Island, Lagos from November 11-15 will focus on finding oil to address declining global oil.

    With the theme Nigeria oil and gas exploration: The next frontier, the association said the discussion has become vital in view of escalating global demand for energy, which has made the need to find new hydrocarbon reserves imperative. Forecast from various recognised organisations and institutions have indicated that global demand for energy will continue to rise into the next decade and beyond.

    The group said the global production forecast for oil and gas shows a decline, with the big fields depleting as the industry moves into the next decade. There is, therefore, an ever increasing pressure in identifying new reserves, most of which will come from frontier exploration, unconventional hydrocarbons, tight gas and enhanced secondary amongst others.

    Nigeria ranks 10th in the world, with an estimated reserve of 3.5 billion barrels as of January 2011, and actual annual production of about one billion barrels according to a leading oil and gas Journal.

    Besides, exploration for hydrocarbons has continued to move into more challenging environments including frontier regions and high pressure and temperature regimes.

    Exploitation of oil sands and shale gas are more recent additions to the list of energy sources making waves worldwide, all of which are more demanding in terms of capital input and technology application. Our challenge at NAPE is to ensure continuous, affordable and reliable supply of energy.

    The guest of honour will be the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke. The Governor of Lagos State, Mr Babatunde Raji Fashola will be the chief host while the Governor of Rivers State, Chibuike Rotimi Amaechi, will be the special guest of honour.

    Speakers at the management session include: Dr. Roger Beal, Chairman, Africa Fortesa Corporation, USA; Dr. David Ige, Group Executive Director, Gas & Power NNPC; Mr O. Patrick O’Basuyi, Chairman/ Managing Director, Obsa worldwide limited; and Mr Segun Agbaje, Group Managing Director, GTBank Plc.

    The session discussants include Dr. Layi Fatona, Managing Director, Niger Delta Petroleum Limited; Charles Osezua, CEO , Owei –Linkso Group; Mr. Tonye Cole, Executive Director, Sahara Group; and David Abodunrin, Gas Manager, Pan Ocean Oil Corporation.

  • Firm advocates pipelines jobs for Ogoniland youths

    To end the destruction of the crucial Trans Niger Pipeline (TNP) that serves all onshore production of Shell in the East, Treasure Energy has advocated that stakeholders including the federal and state governments, community leaders, security agencies and the oil companies must come up with measures to contain youth restiveness in Ogoni land.

    Part of the measures it noted, should include the creation of an Ogoni-based and led pipeline security management contract, inclusion of the youths in the area in the amnesty programme by the Federal Government and placing them on monthly stipends as palliative. There is also need for the establishment of petrochemical industries that would use oil and gas produced from the area to create jobs and provide regular income for the affected youths.

    The Managing Director, Treasure Energy Resources Limited, Eddie Wikina, who spoke with The Nation in Port Harcourt, said there was urgent need to put up strong measures that would provide regular income for the affected youths in the area. This he said would divert their attention from what he described as criminal act of pipeline sabotage and bunkering.

    “In addition, the youths in the areas should be given relevant skills development training to enable them work in the industries and provide more meaningful contribution to the economy,” he added.

    He said the effect of bunkering and oil pollution had caused irreparable damage to Ogoni land and the entire ecosystem. Besides the damage done to the environment and the impact on livelihood, oil production through the pipelines had been severely affected with the resultant effect of loss of revenue to both the government and Shell Petroleum Development Company (SPDC), he added.

    Wikina also explained that Treasure Energy Resources a private public company owned by the Rivers State Government. Its primary business is petroleum exploration and production and downstream activities, and it was established to fully utilise the opportunities that existed in the state as a major stakeholder and repository of petroleum resources.

    He called on the Federal Government to declare a state of emergency on the affected oil communities of Ogoni and regretted that in spite of the attention being made to enlighten the public, the unwholesome act of pipeline sabotage, bunkering and poor operations are still on the increase with thousands of barrels of oil spilled into the creeks and farmlands. He said nowhere else in the Niger Delta region had experienced such destruction.

    He said: “If the above is done, the youths involved would be able to leave the creeks and the battle against pipeline sabotage and bunkering would be won. The continued destruction of the Ogoni community, health, economy and environment must be put to a stop.”

    He confirmed that there is high level of unemployment among the youths including graduates in the area, which he said had led to idleness, insecurity, restiveness and depression with resultant militancy.

    He however, added that the Rivers State government had taken a lot of measures to address the issues-one of which is the establishment of the state-owned oil and gas company.