The Nation Newspaper

Category: Business

  • Pan Ocean, bank seal gas funding deal

    Pan Ocean Oil Corporation Nigeria Limited has reached an agreement with Skye Bank Plc to fund the Ovade-Ogharefe Gas Processing Plant located in oil mining lease (OML) 98.

    Pan Ocean, according to a statement, is the operator of the Nigerian National Petroleum Corporation (NNPC)/ Pan Ocean Joint Venture, owners of the OML 98 asset located in Ovade-Ogharefe Delta State, Nigeria.

    The company holds 40 per cent interest in the OML 98 while the NNPC holds 60 per cent. Skye Bank is financing the 40 per cent equity of Pan Ocean under the Joint Venture.

    The plant processes liquefied petroleum gas (LPG), Propane and other similar products. The project boosts government’s efforts to ensure zero routine flaring in exploitation of oil.

    The construction of Ovade-Ogharefe Gas Processing Plant started in 2007 and was designed as a carbon emission reduction project with the capacity of delivering 200 million standard cubic feet per day (mmscf/d) of dry gas to the domestic gas market especially for power generation and industrial development.

    The gas plant, according to the statement, is reputed as the largest in West Africa. It earns carbon credits for its operations under the Clean Development Mechanism (CDM) of the Kyoto Protocol where its operations were reported and established.

    Pan Ocean had initiated a CDM certification for its gas utilisation project as part of its contributions to improving Nigeria’s image as a green-oriented country in line with the United Nation’s Kyoto protocol.

    With the CDM, reductions in greenhouse gas emission from projects in developing countries are registered and monitored under the United Nations Framework Convention on Climate change (UNFCC) and sold to developed countries that have limits for their emissions.

    It is in view of the highly capital intensive nature of the oil and gas sector that Skye Bank, according to the statement, chose to provide finance to support Pan Ocean in the realisation of the project.

    Speaking on the development, the Executive Director, Corporate and Investment Banking, Skye Bank Plc, Mr Timothy Oguntayo, said the funding to Pan Ocean was another demonstration of the active supports of the bank towards actualising the Federal Government’s local capacity and content development in the oil and gas industry.

    He noted that the gas plant would not only benefit all stakeholders but also improve Nigeria’s environment rating. According to him, among other things, the plant would ensure zero routine flaring in all areas of its operation due to the adopted modularised plant concept, which makes the plant expandable for additional gas finds in the concession area.

    He said Skye Bank’s partnership with Pan Ocean Oil Corporation Nigeria Limited has been credited with the company’s success in processing gas, which could have been flared. But rather than flare the gas from its operation, Pan Ocean processes for meaning utlilisation and in compliance with the carbon credit scheme of the United Nations Framework Convention on Climate Change (UNFCC), which the company qualified for in February 2009.

    Some of the hindrances to the development of the oil and gas industry in Nigeria include high capital requirement, dearth of critical trading infrastructure and inadequate manpower, he added.

    Oguntayo reiterated that despite the challenges associated with oil and gas finances, Skye Bank would continue to support indigeneous investors who have defied the odds by making substantial investments in the subsector in order to raise the Nigerian flag high.

    Known for its very tough and stringent entry requirements, which are difficult for the indigenous investors to meet, the oil and gas industry has been dominated by foreign corporations, which control at least 60 per cent of the industry occupying senior management positions, while highly skilled technical managers are expatriates.

    The Nigerian Content Act is addressing the anomaly, but finance has been major impediment to the quick realisation of the gains of the Act.

    Pan Ocean is the first oil and gas exploration and Production Company to sign the Gas Sales Aggregation Agreement (GSAA) with the Power Holding Company of Nigeria (PHCN) and Egbin Power Station two years ago and the agreement is for a period of 10 years.

  • Why compensation is delayed, by Dana Air chief

    Why compensation is delayed, by Dana Air chief

    The inability of family members to get relevant documents, including letters of administration from the probate registry of the Lagos High Court, has been identified as the main reason delaying the payment of the 70 per cent compensation to families of victims of the June 3, 2012 Dana Air plane crash .

    The airline’s Director, Mr Francis Ogboro, said once they get the documents required by the insurers, the balance of $70,000 each would be paid to the victim’s families.

    He spoke during the inaugural flight of the airline, after the crash, on the Lagos/A buja route last weekend.

    Ogboro said, so far, the airline had paid $70,000 to eight families of victims who had completed the documentation.

    Dana Air has put the crash of June 3, 2012 behind, and is forging ahead to comply with the requirements of the Nigeria Civil Aviation Authority (NCAA), he said.

    Ogboro said some investors have approached the airline to invest in it, adding that discussions were going on.

    He also spoke of an insurance scheme for the airline, which would take care of families that need to be paid.

    Ogboro said: “We have paid up to 90 per cent of the 30 per cent initial compensation, and we are working on the outstanding 70 per cent. The people, we have not paid, are the families that have not turned up.

    “For the second stage of payment, we have had a few people turn up, if they satisfy the requirement for payment, they will be paid. They will not have to wait for the two months to elapse. If they meet the requirement anyway, they will be paid.

    “If after two months, the families have not been paid, it is not because Dana Air does not have the money to pay, it is not because Dana Air insurers do not have the money to pay, it is because the claimants have probably not fulfilled the requirement for the claims available,” Ogboro said.

    He said the conditions of payment for the initial claims of 30 per cent was to assist the families of the victims, unlike the outstanding which requires more detailed processes.

    “We had a few issues with the DNA tests; a few had issues with double claims, in the case of those with many wives. But, in the case of the 70 per cent outstanding, we have started payment to a few families, about nine of them.

    “We have insurance that covers all the passengers that were on board.”

    He said Dana Air would continue to meet the conditions spelt out for compensation to families of victims of the crash.

    On those whose properties were destroyed on the ground, Ogboro said the insurers would resolve the technicalities of the value of what was damaged.

    He said: “We will make sure we take care of everybody. We are praying not to be involved in an accident, and, by the grace of God, it will not happen again. I want to say that Dana Air management spares no effort in the training and re-training of our crew, spending a lot of money to get the right training, which NCAA can attest to.”

    Ogboro said the plan to acquire the Boeing 737 aircraft was not an indication that something was wrong with the airline’s homogenous fleet of Mc Donnel Douglas 83, but a strategy to meet the needs of customers.

    He said abroad, there were over 900 MD 83 aircraft still flying, with over 400 flying in the American airspace.

    This contradicts the position of the National Assembly Committee on Aviation, which released a report that Dana Air is the only airline in Africa still flying MD 83.

    MD 83 aircraft still fly in Afghanistan; Argentina, Bangladesh, Democratic Republic of Congo, Denmark, Egypt, Greece, Indonesia, Iran, Italy, Kenya, Mali, Romania, South Africa and Spain.

    Other countries where the MD 83 still fly include: Taiwan, Ukraine, United States and Venezuela.

  • ‘Interline agreement good for airlines’

    The implementation of interline agreement among domestic carriers will facilitate air travel, Managing Director, Medview Airlines, Alhaji Muneer Bankole, has said.

    According to him, cooperation among carriers is the only way to make air transport seamless and cost effective.

    He said if airlines cooperate, the plan by the Nigeria Civil Aviation Authority (NCAA) to facilitate interine agreement would not only reduce costs for airlines, but also make air travel less cumbersome.

    Bankole said it was time Nigerian carriers embraced global practices.

    He said the rationale for interline pact may not be unconnected with lack of cooperation and other operational factors that led to the collapse of over 10 airlines in the country.

    The implementation of interline agreement, he said would give airlines the leverage to tap from the benefits of economies of scale, which in turn would reduce cost for the operators.

    He cited a situation where Medview Airlines had some operational challenges with one of its aircraft, and had to transfer its passengers to another airline under an arrangement between the two carriers.

    Bankole said: ”If the cooperation and understanding did not exist between Medview Airlines and Aero Airlines, how would we have handled such passengers, who have already paid for the flight. With such arrangement, as tidy as it was, the passengers will always come back to fly with us. Our counsel is that more airlines should come together and forge cooperation, which is good for the survival of the business.”

    Last year, plans by the NCAA to effect interline agreement among active domestic operators, such that passengers could use one ticket to board any flight within the country suffered some challenges as the terms and conditions attached to the pack provoked a fresh row among carriers over which organisations hold the ace as the clearing house for all transactions.

    NCAA Director-General, Dr Harold Demuren, who confirmed readiness of the authority to effect the new operational regime said domestic carriers and other parties are meeting on how to achieve seamless operations.

    According to industry sources, though some operators have expressed their readiness to imbibe the new business model, some carriers are worried that if clearance matters are not properly sorted out, some of the airlines may back out of the new arrangement.

  • NIMASA chief indicts influential Nigerians, foreigners over piracy

    The Director-General, Nigerian Maritime Administration and Safety Agency (NIMASA) Patrick Akpobolokemi has said illegalities on the waterways are perpetrated by some highly placed Nigerians and foreigners.

    He alleged that they provide arms for hoodlums and sea pirates.

    The agency, he said, would intensify its fight against pirates and oil thieves this year to stem criminality on the teritorial waters.

    Speaking with The Nation in Lagos, he said the country lost over N445 million between February 2010 and February 2011 to sea robbery.

    Investigations showed that ships on illegal trade litter the territorial waters in violation of the Cabotage Act 2003.

    Some of these ships engage in illegal transshipment, bunkering, illegal transfer from mother vessels and dumping of harmful substances and ballast water.

    It was learnt that NIMASA and the Navy are reviewing their memorandum of understanding (MoU) to step up their anti-piracy war this year.

    According to the International Maritime Bureau (IMB), 56 piracy attacks occurred on Nigeria’s territorial waters in 2010, 119 in 2011 and about 70 last year.

    Akpobolokemi said the decline in piracy attacks indicated that NIMASA’s and Navy’s aggressive anti-piracy campaigns were yielding fruits.

    To tackle the menace, Akpobolokemi said the Federal Government has adopted 12 regulatory frameworks to ensure that the territorial waters are safe in line with the International Maritime Organisation Safety of Life At Sea (SOLAS) Convention and International Convention for the Prevention of Pollution at Sea (MARPOL).

    The regulation borders on sewage, garbage dumps, ships registration and dangerous/obnoxious wastes, among others, he said.

    Asked whether the additional responsibility would not be too much for the agency, knowing that it had difficulties in enforcing the NIMASA Act and the Cabotage Act, Akpobolokemi said the major problem before now was the absence of operational platforms (patrol boats) for effective policing, which the contract with Messrs Global West Vessel Specialist Nigeria Limited (GWVSNL) has resolved.

  • Showing off aviation’s strides

    What should the public expect from aviation this year? With what was seen in the sector last year, those at the helm are expected to consolidate on their gains in 2013. For starters, new airport terminals will be built in Abuja, Lagos, Kano and Port Harcourt. The Aerotropolis project will also take off. Aerotropolis is a concept that involves building cities around airports and thus connecting businesses, suppliers and goods to the aviation world.

    The competiveness of any economic base is linked to the quality and quantity of the infrastructure available to it. There is a link between the state of a nation’s infrastructure and the height attained in its pursuit of economic emancipation. Thus, no modern economic growth model designed for implementation is worth it if basic and necessary infrastructure are not in place.

    Most of the airports and terminals were built in the 70’s and by 2011, they were in a state of disrepair. Airport users complain that the infrastructure are a disgrace to the country’s standing in the comity of nations.

    It is estimated that the country will need to invest about $100 billion over the next 10 years in just four basic infrastructure areas; power, rail-track, road, and aviation. According to the Central Bank of Nigeria, N300 billion will be required to turn aviation round.

    On resumption, the Minister of Aviation, Princess Stella Oduah, left no one in doubt that she will “walk her talk”. Worried by the scale of infrastructure deficit at the airports, she initiated the reconstruction of 22 of them. Within two months of being in office, 11 airports earmarked in the first phase were undergoing reconstruction simultaneously.

    This is without interrupting operations at these airports. The Lagos Terminal 1, popularly known as GAT, was inaugurated within 300 days after the start of work. The project costs N648 million. The remaining 10 airports are at different stages of completion, with the world class facilities at Abuja, Kano, Benin and Owerri already being used by travellers.

    Agencies in the Ministry are being transformed and appropriate laws initiated to make them more accountable. Questionable concession agreements skewed against the public interest are being reviewed.

    In the area of safety and security, modern security equipment have been procured following a comprehensive security threat and vulnerability assessment.

    Deliberate strategies are being deployed to change the orientation of aviation employees through capacity development. For instance, the Managing Director of Federal Airports Authority of Nigeria (FAAN), Mr George Uriesi, is changing the orientation of the Authority’s employees towards service delivery, accountability, and self-sustenance of the agency.

    Some airports have been designated agro-allied and cargo terminals to promote investment and make them self-sustaining. This will lead to reduction in rural-urban immigration, massive rural development, provision of employment and reduction in crime. The Port Harcourt International Airport, for instance, has been designated a Free Trade Zone (FTZ) and Export Processing Zone (EPZ) to maximise its strategic location, with special incentives to stimulate economic development and foreign direct investments.

    Towards the end of last year, the airfield lighting on Runway 18L at the Domestic Terminal of Murtala Muhammed Airport, Ikeja, Lagos, was restored, making it possible for night landing. This will ease pressure on Runway 18R, the international runway that accommodated domestic flights operating into Lagos after 6pm.

    The expanded “E” Arrival Wing of the international terminal of the airport also began operations on Christmas Eve to handle the unprecedented passenger flow that reached its zenith that day.

    •Yakubu Dati General ManagerCorporate Communications

  • 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.

  • Importers decry extension of destination inspectors’ contracts

    Importers decry extension of destination inspectors’ contracts

    The Federal Government has drawn the ire of port operators for extending by six months the contracts of Destination Inspectors (DIs).

    They are annoyed by the payment of one per cent Freight on Board (FoB) to the DIs despite what they describe as the “irrelevance” of Risk Assessment Report (RAR) to cargo clearance.

    According to the Association of Nigerian Licensed Customs Agents (ANLCA), the Customs had since found that RAR was not sacrosanct and proposed to replace it with Pre-Arrival Assessment Report (PAAR).

    The government had approved PAAR to take effect from January 1 before it returned to RAR and extended the DIs contracts by six months.

    ANLCA, it was learnt, may shut seaports across the country next week in protest.

    Over 100 importers and clearing agents who met in Lagos last weekend were said to be annoyed over the extension of the DIs contracts, despite the planned introduction of PAAR.

    Sources at the meeting said the importers and agents were also concerned about the poor image generated by scanning machines provided by the DIs. A source alleged that the DIs failed to ensure that the right machines are provided for scanning cargoes, such that actual contents/images are generated without recourse to physical examination. This, it was said, always leads to physical examination of about 75 per cent of the cargoes thereby leading to delays.

    Condeming the reintroduction of RAR, ANLCA President Olayiwola Shittu said attachment of RAR to importer’s document “is merely to inform the Customs that this is the minimum amount you can pay.”

    “Although Customs has no right to reduce the duty payable under RAR, it has the right to review it upward and that has been giving us problem because there is evidence to show that importers have outsmarted them, by influencing RAR. A lot of RARs end up with additional debit note being issued on them.

    “So, if the RAR is just advisory, and Customs will still perform their function, why should we still continue issuing the RAR and, at the same time, paying the service providers one per cent fee for service that is not relevant again? That is our annoyance.

    “It would be of interest to Customs licensed agents that they have RAR in another form because what we are talking about is risk management system, but this time the document would be issued by Customs under the proposed PAAR and that would save us a lot of troubles.”

    Shittu went on: “What Customs is doing under RAR is check and balance. Even when the cargo is released, you see officers from the Customs Intelligent Unit (CIU), the valuation and examination units coming forward to say the amount you paid was not correct. But with the introduction of PAAR, they are trying to turn it to a one-stop-shop where PAAR will be the final documentation of assessment of your cargo by Customs to pay your duty, which is in line with the single window and one-stop-shop, which the Minister of Transport is working on. This is to allow importers to pay shipping companies and terminal operators once and carry their cargoes. That will save us a lot of problems and it will enable us to achieve the 48-hour cargo clearance policy.”

  • Rehabilitation of Calabar road to be completed

    The Federal Controller of Works in Cross River State, Mr Chinwuba Agbara, has assured that the contractors handling the rehabilitation of the bad sections of Odukpani-Itu Road would complete the project this year.

    Speaking with reporters in Calabar, Agbara said the contractors were working daily to deliver it on schedule.

    He said President Goodluck Jonathan had directed the Minister of Works to carry out urgent repairs on all bad federal roads across the country before the year ends.

    He also said the maintenance work was intense at Kilometre 18 “where the road failure is so bad’’ on the 35-kilometre road.

    He said the maintenance work was codenamed Operation Safe Passage.

  • ‘Why we want 13% oil fund’

    The leader of Ijaw oil producing communities in the Niger Delta, Chief Favour Izoukumor, has described on-going agitation for direct payment of the 13 per cent oil derivation fund to communities as a no confidence vote on Governors of the Niger Delta region.

    Izoukumor, National President of Izon-Ebe Oil Producing Communities Forum (IOPCF), joined prominent Ijaw leader and former Minister of Information, Chief Edwin Clark, on the call to remove control of the fund from the region’s Governors.

    He told The Nation yesterday in Warri, that the people of the host communities want to be the deciders of their destinies. “We no longer have confidence in the state governors. So we want to manage our fund and be in charge of our development since they have failed us.”

    He suggested that the role of state governments should merely be supervisory and overseeing of how the fund is utilised, stressing that “We intend to consistently agitate until we get what we want.”

    Besides, he clarified that the agitation is not to deprive non-oil bearing communities, but to ensure that public officers who feed fat to the detriment of owners of the wealth are checked.

    Meanwhile, the IjawLeader said there is nothing wrong with the position of northern leaders who are opposed to the Petroleum Industry Bill. He said as elected leaders of their people, they are only doing what they think is right for the north.

    “The North is not our problem; our problem is our elected officials who are only interested in what they can benefit and not in the interest of our people. If the northern leaders see what they think will benefit the South/South to their own detriment, they have a right to oppose it.

    “Unfortunately, our own leaders are not interested in issues that will affect us; they are interested in their own interest. What I expected them (South/south politicians) to do is to engage in the politics of give and take, lobbying to get lawmakers from other zones on their side but they have not done this.

    “So, we should stop blaming the north for what is going on now because they (north) have accused our governors of not using the funds they have gotten so far to the benefit of their states. Instead they are amassing wealth for themselves and this is not in the interest of national security. You cannot have individuals richer than their states like we presently have, it is just not ideal,” he stated.

  • UACN unveils 44-unit estate in Abuja

    UACN unveils 44-unit estate in Abuja

    The UACN Property Development Company (UPDC) has unveiled a 44-unit Emerald Court in Gudu, Abuja. The estate sits on a 1.9 hectares of land.

    The estate comprises 14 units of four-bedroom semi-detached houses with boy’s quarters; 22 units of four-bedroom terrace houses, and eight units of three-bedroom flats with maid’s room.

    At the unveiling, Federal Capital Territory (FCT) Minister Senator  Bala Mohammed, who was represented by a Permanent Secretary in the FCT, Mr Anthony Ozodinobi, praised the developer.

    He said with over 2.5 million inhabitants, the FCT has a housing deficit that  places investors in a vantage position to offload units at a premium. He expressed his administration’s commitment to housing, saying it will assist social transformation.

    He urged stakeholders, especially in the finance sector, to collaborate with the government to provide shelter for the masses.

    Responding, UPDC’s Managing Director Mr Hakeem Oguniran reiterated the desire of his company to partner with the government to provide quality housing. He assured that the estate would be completed on schedule and within budget. The stipulated delivery date is 14 months. He said every facility needed to make living interesting has been provided in the medium- sized estate.

    His words: “To ensure the comfort of residents we endeavoured to  put in place a state-of-the–art facility including swimming pool, lawn tennis court, club houses, children’s playground, sewage treatment plant.

    “Others are borehole with treatment plant, running 8,000 litres per hour, fire alarm system, burglar alarm system, standby generators, and ample parking space for residents and visitors.”

    To make the estate self-sustaining, he said facilities and services, such as  a pharmacy shop and sewage treatment linked to the FCDA central sewage; underground water storage tank of 32,000 litres, and a water tank of 45,000 litres capacity, plus an elevated tank of 192,000 litres capacity will be provided.

    On challenges faced by developers in providing houses in  towns and cities, Oguniran said the government had not done enough to encourage them in terms of liberalising land acquisition, titles and cutting down the time it takes to get approvals for buildings. The UPDC boss lamented the cost of sourcing land for housing projects in the FCT, noting that it would deter genuine investors from investing in the federal capital.  He urged the FCT administration to  take time and identify genuine investors such as his firm and consider allocating sizeable expanse of land to  them  to close the ever widening housing gap in the city. He promised that UPDC will always keep to their side of the bargain because “we are in this business to stay.”

    At inception, UPDC got the mandate of its promoters to acquire, develop, sell, lease and manage choice residential and commercial real estate in carefully selected cities of  the country such as Lagos, Abuja and Port Harcourt. This, source said, explained their recent construction of Vintage Gardens, a 90-unit premium housing estate strategically located in the heart of Port Harcourt dubbed the Garden City.

    The owners say the garden promises delightful living to its prospective residents and premium rental income to savvy investors. The target completion period for the estate is 18 months, while delivery of some of the houses has been planned for next month.

    The 90-housing unit at the estate comprise four-bedroom semi-detached houses; four-bedroom terraces; three-bedroom flats; three-bedroom terrace apartments, and one-bedroom studio flats.