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Tag: IOCs

  • IOCs not exiting Nigeria, says Presidency

    IOCs not exiting Nigeria, says Presidency

    The Presidency has said contrary to views in certain quarters, the International Oil Companies (IOCs) are not leaving the country.

    It said the oil companies are rather rebalancing and refocusing on deep water.

    The Special Adviser to President Bola Tinubu on Energy, Mrs. Olu Verheijen, said this in an interview with the News Agency of Nigeria (NAN) yesterday in Abuja.

    Mrs. Verheijen, who was speaking on the second-year anniversary of the Tinubu administration, noted that while the IOCs are rebalancing, the Nigerian independents (local players) are taking the lead in the onshore subsector.

    “Indigenous firms are gaining capacity. They have community credibility. In the long term, we expect them to scale regionally and globally,” she said.

    Verheijen said the growing capacity of indigenous firms is evident in their ability to acquire divested assets from IOC.

    The presidential aide said the country attained an increase in indigenous equity in gas, from 69 per cent to 83 per cent.

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    She urged African investors, DFIs, banks, pension funds, and sovereigns, to be strategic in focus, and strive to fill the vacuum left by international oil.

    Verheijen also urged industry leaders across Africa to take a cue from Nigeria by ensuring that the continent moves beyond appeals for support and becomes an investment destination.

    Commenting on the legacy she would leave behind, Verheijen said she would like to see more Nigerians have energy, high-paying jobs and the capacity not only to diversify and grow the economy but compete favourably globally.

    “I am committed to institutional reforms that endure, that ensure that we remain and continue to grow as an investment-grade country,

    “I am also committed to transparency, demonstrable results, life-transforming results, that we’re not going to be just energy-rich but that we’re going to be energy-secured and globally competitive,” she said.

  • IOCs charged on best global practices in exploration

    IOCs charged on best global practices in exploration

    • By Nduka Chiejina and Collins Nweze, Marrakech, Morocco

    International Oil Companies (IOCs) are expected to follow global best practices in drilling oil and other natural resources not only in advanced economies but also in developing countries, The Senate Minority Whip, Senator Darlington Nwokocha, has said.

    Speaking yesterday on the sidelines of the ongoing World Bank International Monetary Fund (IMF) Annual Meetings in Marrakech, Morocco, he said the position would be canvassed at the Global Prime Ministerial Forum at the meetings.

    He said such practice is essential to guarantee safety of the environment everywhere they operate.

    Senator Nwokocha of Abia Central Senatorial District kicked against any practice that sets different rules for different economies while dealing with issues of oil exploration and other activities that affect the environment.

    He said the global Prime Ministerial forum held at the annual meetings presents an opportunity for economies to compare notes and review all practices in their environment.

    “Now we are rounding up the Sustainable Development Goals. So, I think the issue I am raising is a situation where we have gas flaring in Nigeria and some other factors that are man made. What efforts are we making to eliminate all those factors, that are man made, which at the end of the day affect the environment? It is better to stop such issues, than coming to compensate Africans when the damages have been done to the environment,” he stated.

    Nwokocha said there was a need to work hard, and forestall every action that will lead to devastation of the environment because there is no other place we can call home.

    He said that many advanced economies that explore natural resources in Africa do not follow the global best practices.

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    “These advanced economies do not follow the Best Global practices of harvesting those natural resources. And over time, after a little while, the devastation will come and when it comes they now think of how to compensate us. Is there any compensation that can equate whatever effect that any devastation could have caused? No is the answer. So, I think all we need to do as far as this kind of gathering is concerned from the parliament is to make sure that we Institute the proper legislative instrumentality, to forestall everything that has to do with devastation that is manmade and at the end of the day, mostly in Africa”.

    He said the issues around protecting the environment would continue to be raised at major gatherings until the best results are achieved.

    “There is no limit to measure how loud your voice is, in this kind of a gathering because what you have here is a high number of people from everywhere. So, we are here for the cross pollination of ideas.

    And not only that, the environment has revolved today and what used to be this digital digital transformation has generated a platform for people to ventilate clearly and loudly at the end of the day,” he said.

    He said anything that would cause a massive death as compared with the instrumentality to having a smaller economic interest should be eschewed.

    “I am not saying that harvesting natural resources is not good but there are ways they  can be harvested with improved socio economic  development and following the best practices is key.  Some advanced countries are talking about fossil fuel, gas flaring. Let them bring the best equipment in harvesting natural resources. But they are maximising profit to make sure they have all the  resources and economic advantage to themselves,” he said.

    The Senator said there would be improved legislation to improve the environment, including a new bill on Climate Change.

    “We are comparing  notes and at the end of the day we are coming up with something stronger that can lift us from where we are to greater heights,” he said.

  • NNPC, NCDMB, IOCs sign pact to reduce contracting circle

    NNPC, NCDMB, IOCs sign pact to reduce contracting circle

    In a major boost for the nation’s oil and gas industry, the NNPC Limited and the Nigerian Content Development & Monitoring Board (NCDMB) have signed a Memorandum of Understanding with the International Oil Companies (IOCs) to reduce contracting cycle to an optimal level of not more than 180 working days.

    The MoU, which was executed yesterday at the NNPC Towers in Abuja, was a demonstration of NNPCL’s commitment to the efficiency mandate as enshrined in the Petroleum Industry Act (PIA), which is hinged on developing an industry framework for an optimised contracting cycle.

    This was contained in a  statement the NNPCL management in Abuja.

    According to the statement, an optimised contracting cycle is expected to improve the ease of doing business, reduce cost and drive efficiency which will eventually translate to production growth, increased revenues, and ultimately improved profitability.

    The management explained that the  “MoU is also expected to contribute significantly to the double-digit economic growth rate agenda of the Federal Government and generate tremendous value for all the stakeholders which include investors, companies, host communities and the nation at large.

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    “Key benefits of the framework in the MoU include a reduction of the contracting cycle for open competitive tender, selective tender, and single sourcing tender to 180, 178, and 128 working days compared with the current best effort performance of 327, 333, and 185 working days.”

    Speaking at the MoU signing, the GCEO NNPC Ltd., Mr. Mele Kyari said signing the agreement heralds exciting times for the nation’s oil and gas industry and stands as a bold testimony that the Company is plunging into the future of hope, productivity and success.

    Kyari, who was represented at the occasion by NNPC Ltd’s Executive Vice President, Upstream, Mrs. Oritsemeyiwa Eyesan, added that with oil and gas as the bedrock of Nigeria’s economy, there is the need to get the contracting process in the Industry right so as to get the economy back on track.

    In his remarks, the Executive Secretary, NCDMB, Engr. Simbi Wabote, described the MoU signing as a way forward and a critical step towards enhancing the nation’s crude oil production.

    In their various remarks, the IOCs, represented by the MDs/Country Chairs of Shell, ExxonMobil, Chevron, TotalEnergies and ENI all pledged their commitment and support towards the implementation of the MoU for the benefit of all parties.

    The framework is in line with the Nigerian Upstream Cost Optimization Program (NUCOP) and in consonance with Mr. President’s directive for NNPC Ltd. and NCDMB to engage the industry with the objective of improving the performance of the petroleum industry.

    The development is also in line with the key mandates of NNPC Ltd under the PIA’s Article 53 (7) which empowers it to operate as a commercial entity in a profitable and efficient manner, as the National Energy Company.

    The mandate for efficiency requires that NNPC Ltd. is committed to working with its partners in ensuring key processes, procedures, and timelines that drive major business activities such as contracting, are structured in a manner that engenders efficiency and drives profitability.

  • Content defaulters: IOCs, others to face EFCC for prosecution

    In the next few days, the International Oil Companies (IOCs) and their local counterparts are facing prosecution for not remitting their Nigerian Content Fund to the Nigerian Content Development and Monitoring Board (NCDMB), the Board’s Executive Secretary, Mr Simbi Wabote, has said.

    The NCDF is one percent of every contract awarded to any contractor, sub-contractor, alliance partner or any other entity involved in any project, operation activity or transaction in the upstream sector of the oil and gas industry, which shall be deducted at source and paid into the NCDF account.

    Speaking during a lecture titled: ‘’Promoting investment and collaboration in Nigeria’s oil and gas industry which opened in Abuja recently, he said the Board has complied the list of defaulting firms, with a view to handing them over to the Economic and Financial Crimes Commission(EFCC) for prosecution in few days time.

    He said it is worrisome that some oil and gas firms have consistently defaulted in the remittance of the one per cent deduction, warning that such companies should be ready to face the full wrath of the law.

    He said it is  worrisome that some oil and gas firms have consistently defaulted in the remittance of the one per cent deduction, warning that such companies should be ready to face the full wrath of the law.

    According to him, the Board is carrying out a forensic audit to determine the actual number of defaulters, how much they owed and subsequently hand them over to EFCC for prosecution.

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    He said the development would enable the board to recover its debts, as  well as serve as a deterrent to others.

    Wabote said:  ‘‘You cannot believe it that some companies including International Oil Companies (IOCs), indigenous firms and contractors and operators are not paying these funds. We are getting close to where we will hand them over to the relevant prosecuting agencies.’’

    To enhance accessibility to the fund, the Board in July 2016, had signed a Memorandum of Understanding (MOU) with Bank of Industry (Bol) to establish the NCIF.’’

    Companies,Wabote said, have so far accessed $160 million out of the $200 million Nigerian Content Development Fund (NCDF) that is domiciled with the Bank of Industry (BoI).

    He said local firms had spend  $160million to build capacity, a development, which has left  $40million in the custody of the Nigerian Bank of Industry (BoI).

    He also  said the fund was also spent on building modular refineries, adding that the development has helped the Board to exit appropriation and further become a self-funding agency.

  • Dickson takes campaign against degradation to IOCs, regulatory bodies

    Bayelsa State Governor Seriake Dickson has urged international oil companies and regulatory bodies in the oil industry to embrace the campaigns against environmental degradation in the Niger Delta

    The governor said the oil firms should prioritise the imperative of meeting international best practice in carrying out their operations in the Niger Delta. Dickosn, who spoke at the ongoing two-day Nigeria Oil and Gas Opportunity Fair in Yenagoa, lamented the level of environmental degradation and the attendant challenges facing oil producing areas in the country.

    His media aide, Fidelis Soriwei, said Dickson stressed the need for stakeholders to take the environment and economic inclusion seriously to ensure sustainable peace and stability.

    According to him, demand for environmental justice and preservation should be the concern of not only the Bayelsa and South South people, but the entire country because the environment was the common heritage of everybody.

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    He said: “I will continue to raise those issues and concerns that are germane to our people, especially as it concerns the environment. Just last week, I inaugurated a fact-finding Commission of Enquiry on our environment.

    “The concern of Bayelsa on the environment should be the concern for all of us because the environment is the collective heritage of all mankind. There is no Bayelsa environment and there is no Sokoto environment. Yes, we may feel it more today, but with time, it gets to everybody.

    “We need to collaborate more on issues of the environment. On our part as a state government, we assure you that we will continue to discharge our duties and obligations, working together with security agencies and community leaders to promote and maintain a conducive operating environment.”

    Dickson, however, thanked the Federal Government, Ministry of Petroleum Resources and other partners for building a state-of-the-art headquarters for the Nigerian Content Development and Monitoring Board in Yenagoa.

    He also praised the Executive Secretary of the Board, Simbi Wabote, and Management and Staff of MegaStar Construction company, for expediting work on the project.

    The governor reiterated his call on oil companies to relocate their operation headquarters to Bayelsa, which he described as the cradle of oil and gas business in Nigeria, even as he restated his administration’s commitment to continue to provide the enabling environment for investments.

    According to him, the Bayelsa International Cargo/Passenger Airport and other investments in education, health and tourism were purposefully made to attract investors.

    Minister of State for Petroleum Resources Ibe Kachikwu identified the celebration of mediocrity as reason why the country has not made appreciable progress in the oil and gas industry.

    According to him, the country should be producing four million barrels of crude oil and not the current two million barrels. He called on the participants to see the conference as a time for a sober reflection on why the industry was still underdeveloped and dominated by expatriates, and take bold steps in exploring opportunities in the sector.

     

     

  • Fed Govt asks IOCs, others to pay $20b tax arrears

    The Federal Government has ordered foreign oil and gas companies to pay nearly $20 billion in taxes it said are owed to local states, industry and government sources said, in a move that could deter investment in Africa’s largest economy.

    In a letter to the companies earlier this year through the Nigerian National Petroleum Corp (NNPC), the government cited what it called outstanding royalties and taxes for oil and gas production.

    Royal Dutch Shell, Chevron, Exxon Mobil, Eni, Total and Equinor were each asked to pay the central government between $2.5 billion and $5 billion, said the sources, who saw or were briefed on the letters.

    Norway’s Equinor, which produced around 45,000 barrels per day (bpd) of oil in 2017, confirmed the request.

    “Several operators have received similar claims in a case between the authorities in Nigeria and local authorities in parts of the country,” an Equinor spokesman said.

    Exxon “is currently reviewing the matter”, a spokeswoman for the U.S. company said.

    Shell, Total, Eni and Chevron declined to comment, as did the Presidency, petroleum ministry and NNPC.

    The charge came after the Federal Government and local states settled a dispute over the distribution of revenue from hydrocarbon production. The sides agreed last year that Abuja would pay the states several billion dollars, three company and government sources said.

    The companies were expected to dispute their respective payment claims.

    “Equinor sees no merit to the case,” the company’s spokesman said.

    “This looks like an internal dispute between the federal and local governments. The central government is simply trying to shift to the IOCs (international oil companies) money it owes,” A source at another company said.

    The tax demand adds a fresh challenge to energy companies investing in Nigeria, Africa’s biggest oil and gas producer, which have been negotiating production-sharing agreements with the government to develop and operate giant offshore fields.

    Oil theft, massive oil spills and corruption further complicate operations in the country.

    Nigeria, a member of the Organisation of the Petroleum Exporting Countries (OPEC), produced around 2.1 million bpd of oil last year, compared with 1.86 million bpd in 2017, NNPC says.

    Nigeria uses several types of contract with energy companies including the establishment of joint ventures and production sharing, the two most common partnerships for international oil companies in the country.

    The companies pay the government in the form of royalties and tax as well as providing the state with oil and gas.

  • Ogoni cleanup: FG, IOCs, Ogoni leaders sign trust fund agreement

    The Ogoni Trust Fund escrow agreement was signed yesterday at the Presidential Villa, Abuja. The agreement was signed by the Federal Government, the international oil companies, IOCs and representatives of the Ogoni people at a meeting presided over by Vice President Yemi Osinbajo. The agreement signing signalled a major landmark in the Ogoni clean-up exercise.

    It puts in place all the financial arrangements to start drawdown of the first tranche of the funding for the Ogoni Trust Fund. The total sum expected to be paid by the Nigerian government and IOCs into the fund in the next five years is one billion dollars. Speaking during the short ceremony, Vice President Osinbajo, said that the signing of the escrow agreement “is one that shows clearly that not only are we committed to ensuring that the clean-up is done, but also that we are committed to ensuring that it is done transparently.”

    He said the presence of representatives of the international oil companies and the Ogoni leaders at the signing of the agreement “shows that the government wants everyone to be carried along in the process as well as to ensure that the process is one that can be audited”. The Vice President said there had been expressions of interest by companies to be involved in the clean-up of Ogoniland, noting that some of them had been identified as likely parties.

    “We are certainly looking forward to doing something quickly and seeing that this exercise not only begins but is concluded as expeditiously as possible,” he said. He explained that the clean-up exercise would be expensive while the complete clean-up would take between 25 and 30 years, adding that it showed the “extent of the damage that has been done over decades in Ogoniland.” He spoke on consultations between the government and Pan Niger Delta Forum, PANDEF, which began in 2017 and had seen him visit oil-producing communities in line with President Muhammadu Buhari’s new vision for the Niger Delta.

    He said the new vision “is one that we intend to stick with and one that we intend to execute as faithfully as is humanly possible, and had resulted in the establishment of the Maritime University in Okorinkoko, Delta State”. He said the clean-up of Ogoniland is part of the new vision. Also speaking, Minister of State for Environment, Ibrahim Jubril, said a complete list of activities had been lined up from now to the end of the year for the actual remediation exercise in Ogoniland to begin. The Chairman of the Board of Trustees of the Ogoni Trust Fund, Olawale Edun, had earlier in his address, said they were “set for the full roll out of the Ogoniland clean-up project.” He said the sum of US$170 million had already been put in process as the first tranche to begin the drawdown of money into the Ogoni Trust Fund.

  • Govt eyes 50% tariff cut for IOCs, others

    The federal Government is targeting between 40 per cent and 50 per cent reduction in non-statutory tariffs paid by International Oil Companies (IOCs) and other investors in the oil and gas free trade zones, it was learnt.

    The government plans to achieve this by next month, to mitigate the cost of operation of investors in the zones.

    The zones are Onne Oil and Gas Free Zone, Port Harcourt, Rivers State; Ibaka Oil and Gas Free Zone, Ibaka, Akwa-Ibom State; Warri Oil and Gas Free Zone, Delta State; Lagos Oil and Gas Free Zone and others.

    The Oil and Gas Free Trade Zones Authority (OGFTZA) Head, Legal Department, Mr.Wasiu Sule, in an interview with The Nation, said the non-statutory tariffs are levies and other charges, which operators are paying in the zones.

    He said the government frowned at the charges because they are exorbitant, adding that the development informed its decision to reduce them to 40 per cent and 50 per cent to foster growth.

    Sule said: “OGFTZA, in line with its goal of regulating the zones, has taken some steps to review the tariffs downward. For instance, the tariffs that are currently being implemented by Intels Nigeria Limited are non-statutory and are therefore, illegal. The agency, on behalf of the Federal Government, began the process of reviewing the tariffs around May and June this year. The government is planning to conclude the exercise by December.

    “To achieve results, the government is consulting with relevant stakeholders in the industry, as well as proposing between 40 per cent to 50 per cent reduction in the tariffs for investors operating in the zones.”

    Sule, whose department is charged with the responsibility of handling the exercise, said the consultation is in line with the government’s goal of ensuring transparency and further achieve its goal of developing the oil and gas and allied sectors of the economy.

    According to him, the government is reducing the tariffs in order to make the zones more business friendly to local and foreign investors.

    Also, the OGFTA’s Managing Director, Dr.Umana Okon Umana, said multinational oil companies, the OGFTZA, National Petroleum Investment Management Services (NAPIMS), among others, are going back to the drawing board with a view to provide new tariff structure that would take care of operators.

    Umana, who spoke during an interaction with investors in Onne, Port Harcourt, Rivers State, said the need to cushion the effects of the harsh economy on the investors and further make them improve their productivity, informed the decision to review the tariffs.

    He said the plans followed protests by some licensees on the issue, adding that the licensees have kicked against the implementation of the current tarrifs regime in the industry, known as Industry Wide Standard Tariffs (IWST).

    Federal Government, early this year, expressed its desire to reposition operations of the agency for quality service delivery. It also launched its roadmap, marketing brochure and website at Onne, Rivers State. The roadmap seeks to measure economic and social progress in the oil and gas free trade zones.

    Others are enhancing service delivery, improvement on the ease of doing business and automation of its operation in order to create an enabling environment for operators and further sustain their investments.

  • Fed Govt mulls tariffs review for IOCs, others

    The Federal Government is planning a downward review of the tariffs International Oil Companies (IOCs) and other investors operating in the oil and gas zones pay to its coffers.

    The idea is to ensure that oil majors such as Exxonmobil, Shell, Adax, Nigerian Agip Oil Company (NOAC), Total, Chevron and their local counterparts, get some respite and further operate well.

    It was gathered that the plan to review the tariffs paid by the local and foreign investors in the zones, have reached an advanced  stage and may come to an end as soon as other stakeholders provide their inputs on the issue.

    A source, who does not want to be mentioned, said the review would be holistic because it would mark a clear departure from the past, where some investors were involved in the process of providing the tariffs for the zones, while many were left out.

    The source said investors would pay less in importing oil and gas machineries/ equipment when the exercise is completed.

    Oil and Gas Free Trade Zones (OGFTA)’s Managing Director, Dr Umana Okon Umana, gave credence to this assertion when he said multinational oil companies, the OGFA, National Petroleum Investments Management Services (NAPIMS) and other licencees are going back to the drawing board, with a view to provide a new tariffs structure that would take care of operators’ interest in the zones.

    Umana, who spoke during interaction with investors in Onne,  Port Harcourt, Rivers State, said the need to cushion the effects of the harsh economy on the investors and further make them improve their productivity, informed the decision to reduce the tariffs.

    He said the plans to review the tariffs downward followed protests by some licensees on the issue, adding that the licensees have kicked against the implementation of the current tariffs regime in the Industry, known as Wide Standard Tariffs (IWST).

    However, efforts to speak to the Head, Legal Department OGFTA, Mr Wasiu Sule, whose department is charged with the responsibility of handling the exercise proved abortive as text message sent to him was not replied.

  • Rep urges IOCs to establish R&D centres in Nigeria

    House of Representatives Committee on Local Content Development Chairman Emmanuel Ekon has asked the International Oil Companies (IOCs) to establish Research and Development Centres (R&D) in Nigeria.

    Speaking in Lagos, Ekon expressed disappointment that after many decades of operation in the country, the research-based international oil companies, including Halli-burton and Schlumberger, have only a piece of land in Port Harcourt, describing the development as a mockery.

    The IOCs have research and development centres in countries, such as India, and Malaysia that don’t have the volume of oil Nigeria has.

    “Does it make any sense for the IOCs to tell us that after 52 years of being in Nigeria, they only have a piece of land in the University of Port Harcourt, while they have built  R&D centres in India and Malaysia that do not have the quantum of oil Nigeria has?

    “So, they need to also help us develop one here, that will also take care of Sub-Sahara need. We should stop talking. We should practise what we are talking about,”Ekon said.

    Ekon said the Local Content Board is in the mission of collaborating with the IOCs and other services’ providers to get research and development centre built in the country. ‘’We are going into a private discussion with them and, hopefully, we will come out with an idea.’’

    “I told them that they need to establish themselves as regulators, not somebody that will go beggarly to the majors. We don’t beg; as regulators, there are certain things that they can do, and people will respect you and do your bidding. There are a lot of things that could be done to cause this to happen, so I believe that we are going to work together,’’ he stated.

    He was confident that with the leadership of the present local content board, in the next one year efforts towards realising this objective would have had visible implementation.

    “By next year, I want to see something concrete. I want us to translate all those visions,  ideas, into reality and I believe that with the people in the content board we are going to see something tangible in the next one year.”