The Nation Newspaper

Tag: Exploration

  • FG concludes process of spending N20b on exploration – Fayemi

    FG concludes process of spending N20b on exploration – Fayemi

    The Minister of Mines and Steel Development Dr Kayode Fayemi has said that the Federal Government has concluded plans to spend another N20b on data exploration.

    Fayemi stated that the government the money will lead to further information being generated in the aspect of exploration which has been a major challenge in the sector.

    He also revealed that the government has paid for and retrieved arial survey that was conducted years ago but was not paid for by previous governments, that can now be used by mining investors.

    Speaking yesterday in Abuja at the Mineral Sector Support for Economic Diversification Project (MINDIVER) project presentation, which was in collaboration with the World Bank.

    Fayemi added that Nigeria now takes the lead in regional efforts to develop mining, especially within the framework of the Africa Mining Vision. 

    His words, “It is noteworthy that in addition to funding support from multilateral agencies, partnerships on technical cooperation have also been brokered or re-activated with several foreign governments. Existing technical partnerships have been operationalised with the governments of South Africa, China, Australia, Canada, the United Kingdom and the United States of America. Nigeria now takes the lead in regional efforts to develop mining, especially within the framework of the Africa Mining Vision. 

    “The ministry is finalizing plans to spend another N20b on exploration and the process has just been concluded, many of our expert institutions applied and we believe it will lead to further information being generated and further data being provided in thus area of exploration which has been a challenge. We gave also finally retrieved the Arial survey that was conducted years ago which was not paid for by government, we finally paud for ut and retrieved the data for the use of mining investors.

    “Only this week on Monday, i met with my counterpart from the Niger Republic to agree and finalize plans on exploration on minerals that  straddle both our countries, particularly uranium, limesrone and lead zinc and these are things that we will continue to do with partners from across the African continent.

    “Distinguished ladies and gentlemen, our regime of change in the mining sector has already begun yielding the desired results. For instance, our core mandate is to increase the share of our GDP generated from mining and deliver shared prosperity to all stakeholders through maximization of all aspects of the industry value chain namely exploration, mining, beneficiation and trade. Our strategy for building the mining sector is to initially focus on using its industrial mineral endowment to support its industrialization. It is now a government policy directive to support private industry by building overall competitiveness (e.g. quality, price, loss ratios) and improving the ease-of-doing-business, in collaboration with other government agencies.

    “Our aim is to create domestic demand by competing to replace ores and minerals currently being imported. In due course, as domestic processing expands, Nigeria will build a cost-led sector and foster production expertise in select non-industrial minerals. We are committed to continue in this spirit of partnership by investing in a range of enablers including bulk handling terminals, railroad and rolling stock capacity, technical and engineering capacity, regulatory reform, reorganization of the Ministry itself, and expansion of access to financing to drive sector transformation. Working with all stakeholders, we are determined to address the huge internal demand for our resources. Our inward focus is driven by the desire to ensure that the exploitation of our resources generates jobs locally and broadens the range of economic opportunities available to young Nigerians in the Mining sector.”

  • Minister: communities should be involved in oil exploration

    Minister: communities should be involved in oil exploration

    The Minister of State for Petroleum Resources, Ibe Kachukwu, has recommended that oil-producing communities be involved in exploration to stop threats to the country’s oil resources.

    He spoke at the closing of the second National Council on Hydrocarbons summit in Uyo, Akwa Ibom State.

    Kachikwu said restiveness in the region had adversely affected oil production, noting that the peak production of 2.35 million barrels per day last year dropped to 1.1 million barrels due to vandalism.

    He, however, said production has ramped up to about 2.1 mbpd from the 1.85 mbpd average of 2016 due to peace moves in Niger Delta.

    Kachikwu added that local content witnessed a steady increase in participation from Nigerians in oil and gas contracts by over 180 per cent.

    According to him, the challenges in the sector include security and environment, institutional capacity, funding, high industry technical costs, obsolete legislation and fiscal regimes, downstream sector issues and infrastructure constraints.

    The minister said the seven Big Win Roadmap, as launched by President Muhammadu Buhari last year, remained peculiar as it has the support and commitment of political leadership, industry and stakeholders.

    Issues in the sector, he said, would be addressed by a National Oil and Gas Policy,  in the next few months.

    The new policy, according to him, will create a market-driven oil and gas industry, maximise production and the processing of hydrocarbons, minimise the environmental impact of oil exploitation and exploration, extend gas penetration in the domestic market and gain a presence for Nigerian gas in the international market.

    He added that the policy will also enable Nigeria to operate a gas industry with a clear division of roles between private and public sectors, end and commercialise gas flaring and environmental issues, and clarify rules guiding investment in the gas sector.

    “The roadmap has very specific time-focused targets, and like the many bold steps we have taken in this sector since inception of the administration, we remain focused to making dramatic policy shifts to grow, deepen and open up the business and opportunities in Nigeria’s oil and gas sector”, he added.

    Governor Udom Emmanuel said the establishment of the National Council on Hydrocarbons will address the crisis and agitation in the oil and gas sector.

    His words: “I believe that if we had a platform of this nature before now, where key players and stakeholders converge to develop policy thrust to drive the industry, the crisis and agitation we have experienced in the sector would have long been addressed.”

    The governor, who was represented by his deputy Moses Ekpo, urged the implementation of resolutions reached at the meeting to resolve some problems in the oil and gas territory.

  • Fed Govt votes N15b for minerals exploration

    The Federal Government is to spend N15 billion ($42 million) over the next one year to explore minerals and attract investors into mining, to reduce its dependence on oil, Solid Minerals Development Minister Kayode Fayemi has said.

    “Because we are starting from a low base, we want to have a portfolio of exploration activities in place that could whet the appetite of the average investor who wants to come in,”Fayemi was quoted to have said by Reuters at the weekend in interview in Abuja.

    They will be able to “drill down when they have that baseline information”, he said.

    The government plans to support investments in the exploration of its priority minerals, including gold, bitumen, iron, barite, limestone, lead and zinc, Fayemi said. The government is hoping to attract as much as N60 billion of private investment into mining, he said.

    Tapping resources other than oil, Nigeria’s main export, is part of the government’s economic recovery and growth plan after the country went through its worst economic slump in 25 years as oil output and prices fell. Nigeria is Africa’s biggest oil producer, the sixth contributor to the Organisation of Petroleum Exporting Countries (OPEC) daily oil production. The contribution of solid minerals to gross domestic product is expected to increase to more than eight per cent by 2020 from less than one per cent year, according to the government.

    To further encourage investors, incentives including tax holidays of as much as five years for new companies entering the market, duty free imports on mining equipment and mining licenses for 25 years have been put in place, the minister said.

    Executive Secretary, Solid Minerals Development Fund, Haiha Fatima Shinkafi, said additional support for the industry is expected through a $600 million bond to be sold by the end of the year to raise more funds to provide required infrastructure and help accumulate data on minerals.

    “Nigeria is one of the lowest spenders on exploration as far as mining activity is concerned. This government is determined to turn the tide on that, because we’re quite convinced of the opportunities,” Fayemi said.

    Nigeria has at least 44 minerals that can be extracted in commercial quantities, according to the solid minerals ministry. Mining in the country is currently dominated by artisans, who produce gold, tin and others in small amounts.

     

     

  • PwC: Nigerian firms lack capacity for oil, gas exploration

    PwC: Nigerian firms lack capacity for oil, gas exploration

    •More assets divestments coming

    PricewaterhouseCoopers (PwC), an auditing firm, has said Nigerian indigenous oil firms still lack capacity to carry out oiland gas exploration despite the push by the Content Act passed into law in 2010.

    Its Director, Tax and Regulatory Services, Kenneth Erikume, said since the passage of the Act, aside funding challenges, indigenous operators still lacked  sufficient capacity to explore for oil and gas.

    Given these challenges, the Federal Government needs to focus more on building capacity at the local level and getting the Nigerian Content Development and Monitoring Board (NCDMB) to drive the acquisition of technical know-how requisite for the industry.

    He said with necessary expertise, the country would be able to create entities that could help other African countries in their oil and gas sector. This is the direction a country such as Nigeria, that started oil and gas operations in the 1950s, should be taking, he added.

    Erikume told The Nation that the government needed to address uncertainty of investments in the petroleum industry, respect some of the agreements and concessions it has with operators. When this is sorted out, investors would be more comfortable to invest, he added.

    He also urged the government to ensure that the Petroleum Industry Bill (PIB) is passed into law as quickly as possible.

    According to him, when an investor puts his money into a system, he will be interested in making progress.

    Since oil prices have started rebounding, he expressed optimism that investors would returm to the oil fields abandoned in the wake of the slump in prices.

    Erikume said the worst was over, adding that things could only get better. He said if oil price gets to about $60 per barrel, the country would begin to see more investments in the industry.

    “From the national perspective, what most investors are looking forward to is the final decision on the PIB, which has taken too much time to complete. It has implications on the fiscal quality which will impact on how much dollar an investor would be able to recover if he embarked on crude oil exploration and production,” he explained.

    Erikume said there would be more divestments by traditional international oil companies (IOCs). According to him, the multinationals will be focusing more on offshore and deepwater exploration where there are fewer issues of vandalisation and militancy.

    IOCs will continue to seek for divestment from onshore and shallow water assets and indigenous companies can pick up the assets.

    Erikume agreed that the challenge in passing the PIB was around balancing the interest of various stakeholders, including payment to the communities.

    In addition, there are conflicting issues around the fiscal provisions, which also have to be balanced in the interest of all.

    But, to address the issue, he said,  the National Assembly, in consultation with stakeholders, has to expunge the portion of the bill that is related to corporate governance and administration from the fiscal and commercial aspects of the bill.

    He noted that the oil and gas industry governance bill was being proposed. “So the industry governance bill is being considered now, I think it has passed second reading, I am hopeful because it is not carrying the baggage of the fiscal provisions of the full bill, it will be easier to pass into law,” he added.

  • Govt, NAPE push for exploration in frontier basins

    The Federal Government and the Nigerian Association of Petroleum Explorationists (NAPE) are in discussion to woo investors into exploring for oil and gas in the frontier basins in Nigeria.

    NAPE President, Nosa Omorodion, said this in Lagos when the association outlined activities for its 34th yearly international conference and exhibition scheduled for November 13 to 17 in Lagos.

    The theme of the conference is “Stimulating upstream investments in Nigeria’s frontier basins.”

    Omorodion said it was imperative to look for oil and gas in other sedimentary basins outside the Niger Delta region to grow the nation’s reserves, which is fast being depleted. He said the association’s desire was to open up exploration, adding that it is economic realities that are preventing people from exploration, not fiscal terms as most people think.

    According to him, some years ago, when exploration was low, the government came up with some incentives, and signed memoranda of understanding  (MoUs), geared towards boosting oil and gas finds.

    ‘’It was at that time when we (Nigeria) attained astronomical growth in terms of reserves because people were incentivised to go and drill exploration wells.’’

    “The easy way out in a time like this is to open up our taps and produce but it is a big concern to us as explorationists because the replenishment rate doesn’t match our depletion rate which is a big concern. If we continue like this in the next 35 years we will completely run out of oil. The big chance discoveries especially the deep water, takes between eight and 10 years to bring them on stream. If you are depleting and not replacing, it is a big concern. If you make a discovery today, it will take an average of five or six years to produce it, so it is a huge gap,” he said, urging the government to give incentives that would attract investors into drilling new wells.

    On the need for the government to conduct a new licensing round, the NAPE chief said a new licensing round would be one of the topics to be discussed but that would be a subtle advocacy as a new licensing round is one way to stimulate the industry. However, he argued that even the oil wells we have as a country are not optimally explored. He said people are not drilling the wells they have because of low oil price.

    The President-elect and Chairman Conference Planning Committee, Abiodun Adesanya, noted that several issues confront the upstream section of the industry.

    He said: “We have issues such as Petroleum Industry Bill (PIB) that has remained a lingering problem, shortfall in Joint Venture (JV) funding that has affected production, issues of job losses.

    ‘’Our members have lost jobs here and there, issues of vandalisation and security, which is currently waning following governments discussions with militants in the region. All these have affected us. There are times we were prevented from working, we have passion to do our jobs but with scenarios where workers are kidnapped, people are scared. As professionals we need to work, we don’t want job losses.”

  • Fed Govt shops for $500m exploration fund

    Fed Govt shops for $500m exploration fund

    The Federal Government is in talks with the Sovereign Wealth Fund (SWF) and Nigeria Stock Exchange (NSE) to create a $500 million exploration fund and corporate mining bonds to attract investment, Solid Minerals Development Minister, Dr Kayode Fayemi has said.

    He also said the country had made a “promising” nickel discovery and was looking for investors for a moribund steel plant, part of efforts to reduce reliance on oil exports.

    The country has made boosting the mining sector a priority as a slump in crude sales, which provide 70 per cent of government revenues, has pushed economy into recession.

    “We are looking at a $500 million fund from their side which would primarily focus on exploration,” Fayemi told Reuters yesterday.

    The ministry was also discussing with the stock market selling “corporate mining bonds” in partnership with mining and other investors, he added.

    Nigeria has been trying to attract foreign mining firms. Currently, the only significant foreign investor in the sector, where 80 per cent of mining is carried out on an artisanal basis, is Australia’s Kogi Iron.

    The country has largely untapped deposits of 44 minerals, which include gold, iron ore, coal, tin and zinc, in more than 500 locations spread across the nation.

    Fayemi wants to increase mining’s contribution to gross domestic product (GDP) to 10 per cent, from just 0.3 per cent now, within a decade.

    He said a geologically “strange” discovery of nickel in the northern state of Kaduna seemed promising.

    The discovery of some 40 million tonnes of nickel with a depth of five meters over a 13 kilometer area, around the town of Dangoma, was announced in August by an Australian team registered as Comet Nigeria Limited.

    “It could also be that what they are telling us is an under-estimation of what it ought to be by the time we do core drilling,” he said.

    Fayemi also said there was need to get a grip on the informal gold rush which he said is dominated by smugglers.

    “Clearly a lot is being taken out illegally,” he said, adding that gold was being smuggled to neighboring Cameroon and Niger, as well as Togo and registered in those countries.

    Fayemi said his ministry did not have figures for gold production but the Central Bank of Nigeria (CBN) had provided figures the minsitry was trying to validate.

    “They have given figures in the region of about 100kg of gold leaving the country on a daily basis.

    “None of this gets accredited as gold from Nigeria,” added Fayemi.

  • Nsukka residents seek exploration of gas, crude deposits

    Nsukka residents seek exploration of gas, crude deposits

    A natural gas and oil well discovered about 50 years ago at Ehalumona in Nsukka Local Government Area of Enugu State has remained untapped since its discovery.

    The residents have expressed the desire to see exploration activities at the site.

    The natural gas and oil deposit in the area is said to be in large commercial quantity and estimated to last for over 50 years.

    An indigenous oil and gas company, Seveen Energy was said to have acquired the site for exploration but abandoned it for what insiders called political interference.

    The vast gas site was first discovered by CGG Company prior to the Nigerian Civil War in 1966. It has been overgrown with weeds and left in a deplorable state.

    The untapped crude deposit found in abundance in the area has traces of the same deposits in other communities in Nsukka and also cut across local governments in the area.

    The areas that have traces of the crude deposits include Obollo Ekeh, Ezebinagu, Isi Uzo, amomg others.

    The major base of the oil is in Ehalumona and it has about 30% petrol and 70% natural gas deposits.

    The residents of the oil rich communities   have expressed worry over the inability of the indigenous company, Seveen Energy to carry on further explorative activities since the Federal Government awarded it since 2013.

    The residents dislosed that the Seveen Energy company had carried out a siesmic operation they termed environmental impact assessment in February 2014 at the abandoned oil zone.

    In  2008 the huge natural gas deposit attracted Geokinetic Gas and Oil Plc, for further exploration of the site but failed to continue.

    A community leader, Cletus Akor disclosed that prior to the Nigerian civil war in 1966, the oil and gas deposits had earlier attracted CGG company where they carried it’s first seismic exploration but couldn’t continue as a result of the severity of the civil war.

    The community youth leader, Oji Uzo expressed his dissatisfaction over the abandoned oil-rich zone, describing it as a waste of both human and capital resources.

    He said: “This type of thing should not be joked with. Look at an endowment being overlooked, something that would have been a source of employment opportunities for jobless Nigerian youths is overgrown by grasses. When this company first came here, our youth were employed as labourers and some worked in other lucrative positions, but look at how delapidated it is, a treasure of a nation.

    “They told us that they would test the natural gas which they did and carried a half tanker of the crude gas for test, but we have not heard from them again.”

    Also, Mr. Jonathan Ugwuanyi disclosed that apart from the Natural gas located in the area that there are untapped natural resources like Gold, Coal, among other resources located in the area.

    The traditional ruler of Ezebinagu /Ehandiagu communities,  Igwe Daniel Ugwuanyi expressed his belief that the company may begin exploration of the natural gas soon.

    He said: “If this gas deposit is explored, it will create job opportunities for the people as well as a source of revenue for the Federal and State government.”

    He said that the gas deposit would likely foster the construction of the much neglected Nsukka, Ehalumona, Ehandiagu, Mbu-Ikem road,” he said.

    He therefore apealed to the State and Federal government to react positively to the abandoned huge gas deposit located in Ezebinagu/ Ehandiagu communities.

     

  • Niger Delta Exploration plans $450m stock sale for fields

    Niger Delta Exploration plans $450m stock sale for fields

    Niger Delta Exploration & Production Plc plans to raise $450 million to acquire and develop crude fields in the country.

    The Lagos based firm is planning a “public offer, or special placement of shares. The first tranche of $200 million will be raised before the end of 2014,” Chief Executive Officer, Layi Fatona told Bloomberg.

    Smaller Nigerian oil producers are expanding operations as international companies, including Royal Dutch Shell Plc and Chevron Corporation scale back operations amid unrest, violence and crude theft in the Niger River Delta.

    Exxon Mobil Corporation, Shell, Chevron, Total and Eni SpA, pump about 90 per cent of Nigeria’s oil through ventures with state-owned Nigerian National Petroleum Corporation.

    FBN Capital Plc and Chapel Hill Denham, have been appointed financial advisers for the fundraising, which will happen on local or international markets, Fatona said.

    He didn’t say when the rest of the cash will be sought, but said NDEP also plans to expand in South Sudan and Zambia.