The Nation Newspaper

Tag: IOCs

  • ‘Nigeria to undertake over 50% fabrication, integration in IOCs’ projects’

    About 50 per cent of the fabrication and integration of topsides of the floating, production, storage and offloading (FPSO) vessels of Nigerian Agip Exploration Limited (NAE)’s and Shell Nigeria Exploration and Production Company (SNEPCO)’s Zabazaba deepwater project and the Bonga South West Aparo (BSWA) deepwater project will be done by Nigerians. The Nigerian Content Development and Monitoring Board (NCDMB), has confirmed.

    The Board noted that with the development, the oil and gas sector is set to make a huge impact on the economy as the two multinational companies involved will substantially use local personnel and materials.

    The projects are the Zabazaba deepwater project being executed by NAE, in partnership with SNEPCO, on Oil Prospecting Licence (OPL) 245, and the Bonga South West Aparo (BSWA) deepwater project being developed by SNEPCO.

    It noted that major contractors bidding for Zabazaba submitted competitive costs and concrete plans to fabricate and integrate over 50 per cent of the FPSO topsides in-country. The technical and commercial evaluations of bids for the Zabazaba main packages have been finalised by NCDMB and NAE and the submissions met the aspiration of maximizing local content at the most competitive cost. The packages included the FPSO units, subsea, installation and rigs.

    NCDMB Executive Secretary, Simbi Wabote, confirmed the positive development, expressing optimism that the execution of Zabazaba would grow Nigerian content and impact the economy, much more than previous deepwater projects. He said the Board carried out detailed scoping of the project to ensure that the targets exceed the accomplishments achieved on Total’s Egina project.

    “For Egina, six FPSO topside modules were fabricated in-country across some yards and will be integrated when the FPSO arrives at the SHI-MCI yard in Lagos later this year. This will be the first time in the history of Nigeria,”he said.

    Wabote also said the approvals and evaluations for Zabazaba were completed in 14 months, setting a cheering record in the industry as against the 24/36 months project cycle time that bedeviled the sector for many years and contributed to the high cost of projects.

    “It has taken just 14 months since NAE approached the Board with their Nigerian Content Plan. NAE and NCDMB worked closely and went through the standard contracting process, including invitation to tender, clarifications, technical and commercial bid evaluations and facility audits. We completed the process and issued our final report on August 30.

    “This is confirmation that NCDMB does not delay projects and we can achieve the six-month contract cycle target if operators comply with set directives,” he added.

    Similarly, (SNEPCO) is set to issue bid documents this September for the supply of the FPSO vessel for the Bonga South West Aparo (BSWA) deepwater project. The bid documents will set out the company’s plans for in-country fabrication of half of the topsides of the FPSO and their integration.

    These indications emerged in the September edition of Upstream, an international medium on the oil and gas industry. The report was titled: “Shell set to launch FPSO bid battle.”

    SPDC’s plan was informed by “the strict local content demands imposed by the Abuja-based government. All oversea bidders are expected to partner with Nigerian companies,” it added.

    Shell’s contracting strategy was described as complex and demanding, according to a source, saying that “they have some terms and conditions that are quite different from traditional T&Cs. These are thought to focus on local content and are all about asking the yards to take more risks”.

    Wabote said earlier in the year that more modules would be fabricated locally for future deepwater projects. He said the Board would not rest on its oars with regards to the implementation of the Nigerian Content Act and “new projects must look at doing FPSO integration and more.” Increased domiciliation of future FPSO projects is estimated to create jobs in the economy, estimated to reach 30,000.

  • Senate tackles banks for $63b capital flight by IOCs

    •Lawmakers accuse banks of colluding with IOCs to defraud Nigeria

    The Senate is investigating some banks for alleged collusion with some international oil companies (IOCs) to defraud the country.

    Over $62,909,716,417 is said to have been taken out of the country under suspicious circumstances between August 2009 and December 2014.

    The “Investigation of the pre-shipment inspection of export activities in Nigeria” is being conducted by the Senate joint committee on Finance, Trade and Investment, Gas, Petroleum Upstream, Banking, insurance and other Financial Institutions, Judiciary, Human Rights and Legal Matters, and Customs and Excise.

    A document obtained by The Nation showed  the affected banks were asked to submit copies of certified Nigeria Export Proceed (NXP) issued/or processed by them in respect of all crude oil and gas exported by Nigeria Agip Company ltd, Chevron Nigerian Limited, Shell Petroleum Dev. Co. Nig. Ltd and their affiliates between April 1996 to December, 2016.

    The affected banks were also asked to submit all domiciliary accounts opened and /or closed within the period specified for crude oil and gas exported.

    Two banks – Citibank and Standard Chartered Bank – appeared at the investigative joint committee on Thursday while other banks said to be associated with the export of oil and gas will also appear.

    A member of the committee, Senator Yusuf Yusuf (Taraba State), queried why funds brought into the country as oil export proceeds were wholly withdrawn a day after such proceeds were brought.

    He said the probe became necessary because the banks should have ensure petroleum products exporters do the right thing by obeying the guidelines and laws of the country.

    Yusuf said: “It is worrisome that money comes in today, tomorrow the same amount goes out of the country. The practice runs through statement of account submitted by the banks. The oil companies bring in $20 billion today and tomorrow $20 billion is taken out from the account.

    “The banks are colluding with multi-national oil companies to defraud the country. The government relies on the banks; the banks are now colluding with the multi-national oil companies.”

    He noted that it was obvious the country is not getting the correct export proceeds from oil and gas exports.

    The lawmaker, who insisted that banks have the responsibility to abide by the law, said it was worrisome no indications were made about who pays for oil exports.

    He noted that the committee is interested in why same company exports and pays for products without an indication of who actually buys the products and the corresponding bank.

    Chairman of the joint committee, Senator John Enoh, said the committee was interested to ensure that banks are not colluding with IOCs to flout the laws of the country.

    Enoh said the committee would take a critical look at the submissions made by the banks to come to terms with the true position of oil and gas exports proceeds processes.

    A document submitted to the committee, which was obtained by The Nation, showed that Citibank Nigeria operates domiciliary export proceed accounts for ENI Group (three accounts), Chevron Group (six accounts) and Shell Group (two accounts).

    The document also showed that Nigerian Agip Oil Company recorded a total export inflow valued at $15,372, 882,703.36

    Chevron Group recorded a total inflow valued at $44,020,596,289.99. Shell group made a total inflow valued at $3,516,237,425.79 giving total of $62,909,716,417 billion.

    The committee resolved to go through documents submitted by the banks before coming up with its recommendations.

    The committee expressed its determination to get to the root of  pre-shipment inspection of export activities.

     

  • IYC condemns Reps’ rejection of IOCs HQ relocation to Niger Delta

    The umbrella organisation of Ijaw youths, the Ijaw Youth Council (IYC) Worldwide, has condemned the rejection by the House of Representatives of a motion to relocate the administrative headquarters of international oil companies (IOCs) to the Niger Delta region.

    In a statement yesterday in Port Harcourt, the Rivers State capital, by its spokesman Daniel Dasimaka, IYC expressed displeasure about the alleged insensitivity of the Federal lawmakers.

    It said: “IYC is deeply saddened by the callousness and insensitivity of the members of the House of Representatives to the plight of the people of the Niger Delta, as amply demonstrated on May 2 by their rejection of the motion sponsored by Goodluck Opiah, praying the House to direct the multinational oil and gas companies to relocate their administrative head offices to the Niger Delta region.

    “We strongly believe that this action of the members of the House of Representatives has the potential of derailing the seeming calm in the Niger Delta, which resulted from positive steps, like the presidential directive made earlier this year by the then Acting President, Prof Yemi Osinbajo, mandating all IOCs to relocate their administrative headquarters to their host communities in the Niger Delta.

    “The siting of the administrative headquarters of the IOCs outside their areas of operations has contributed to their adoption of policies and taking of decisions that are inconsiderate of the externalities of oil and gas exploration and exploitation in the Niger Delta, such as pollution, environmental hazards and degradation, leading to the dislocation of our local economy.

    “We, therefore, condemn the antagonists of Opiah’s motion, titled: Calling Oil Companies to Establish Operational and Administrative Offices in the Niger Delta Region, Where they Engage in Exploration and Exploitation.

    “We categorically and unequivocally condemn Speaker Yakubu Dogara’s unfortunate comments that ‘as a businessman, I cannot be forced toý site my business where I know it is not safe.’ If the region is not safe for the IOCs to site their administrative headquarters, as the Speaker has insinuated, how come it has been safe for them to carry out their main business of oil exploration and exploitation for close to 60 years?”

    The organisation also said the alleged short-sightedness of the Federal lawmakers had needlessly delayed the passage of the Petroleum Industry Bill (PIB) and retarded the viability of seaports outside Lagos.

    It said this had denied Nigeria of huge investments, revenues and employment opportunities.

    IYC said the earlier Nigerians realised that the Niger Delta crisis was a national and global problem, thereby acting accordingly, the better for the citizens.

    The organisation hailed the lawmakers from the Southsouth, Southeast and some of theirý Northeast and Northwest counterparts, who walked out of the House to show their displeasure to the alleged injustice.

    It said: “We find it disturbing that since the then Acting President voluntarily made the commitment on behalf of the Federal Government, he has failed to match his words with adequate action to fulfil it. We are, therefore, tempted to construe Prof OsInbajo’s statement as mere political declaration, aimed at currying plaudits.

    “We have not forgotten that in March, Prof Osinbajo directed the Minister of State for Petroleum Resources, Dr Ibe Kachikwu, to engage with the IOCs on the way forward over repeated calls for the relocation of their head offices to the states where they produce crude oil from. Nothing seems to have been done to make it a reality. We are calling on the Presidency to expedite action to implement the Presidential directive.

    “We are also calling on the oil and gas companies to comply with the presidential directive by immediately relocating their headquarters to the communities of their operations. This is in their strategic interest, because when oil facilities are attacked in the Niger Delta communities, it is not the parochial lawmakers that are affected most.”

    The Ijaw youths’ umbrella body expressed the readiness of its members to work with relevant authorities to kick-start the implementation of Federal Government’s policy on modular refineries.

     

  • Cash Call debts: FG pays $400m to IOCs

    The Federal Government said it had released $400 million to settle outstanding Joint Venture cash call debts owed International Oil Companies (IOCs).

    The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, made this known in Houston, United States, while speaking to journalists on the sidelines of ongoing 2017 Offshore Technology Conference (OTC) on Tuesday.

    Kachikwu said the money was paid to the IOCs last week, adding that the balance would be defrayed within a year.

    He explained that the payment was part of a $1.2 billion cash call debt owed the IOCs in 2016.

    The minister said it was different from the discounted $5.1 billion cash call arrears it negotiated in December 2016 with the IOCs.

    “At the time that we did the joint venture review that we came up with, we had two components to it. The first was the $6.8 billion arrears covering about six years which were owed the oil companies.

    “In our negotiations, we were able to trim that down to about $5.1 billion; so, we knocked off $1.7 billion out of it and then spread the $5.1 billion over the next five years.

    “This is to be paid from incremental production, not from existing production.

    “In other words, they will have to go and find new oil and from that new oil, we pay that money because we didn’t want to imperil the 2.2 million barrel that everybody was already used to,” he said.

    NAN

     

  • ‘Offshore gas shortage cripples IOCs’

    ‘Offshore gas shortage cripples IOCs’

    International Oil Companies (IOCs) are battling shortage of offshore gas due to dwindling capacity of pipelines, the Chief Operating Officer, First Exploration and Petroleum Development Company Limited, Dr Saka Matemilola, has said.

    He said infrastructural bottlenecks, especially poor output of pipelines, are affecting the capacity of oil companies that are operating in the offshore segment of the petroleum industry.

    He said there are fewer pipelines in the country, adding that the development is making accessibility to gas difficult for offshore oil operators.

    Matemilola said: ‘’There is a lot of gas offshore, but operators cannot get enough of the product for operation. There is a pipeline that takes gas from Bonga area to the Nigerian Liquified Natural Gas(NLNG) in Bonny. But the capacity of the pipeline is not enough to take care of operators offshore, a development, which suggests that the operation of players offshore are being hindered. As long as the problem remains, it would be difficult for operators to attain their highest potential in the industry.’’

    He said problems, such as low investment in pipeline and other infrastructure and subsequent delivery of gas to where it is needed, is the bane of the industry, adding that there unimplemented projects in the sector.

    According to him, there is lot of gas in the Eastern part of the country which cannot be transported to the West for the use of power plants due to problems relating to pipeline efficiency.

    He noted that Obeng 3 pipeline, popularly called OB3 pipeline project, which would take gas from the East to the West, is yet to be completed despite the clamour for the completion of the project by stakeholders.

    He said the Lekki-Bonny project, when completed in two years’ time, would help in improving domestic usage of gas, by ensuring that power plants get the product for the generation and supply of electricity.

    The project, he said, would deliver three billion cubit of gas per day, adding that the idea would help in providing gas to power plants in the West and the East, that are unable to access the product for operation.

  • Kachikwu seeks partnership with IOCs

    Kachikwu seeks partnership with IOCs

    The Minister of State, Petroleum Resources, Dr.  Ibe Kachikwu has sought partnership with International Oil Companies (IOCs) operating in Nigeria to put an end to importation of petroleum products.

    According to the statement endorsed by the Director, Press, Petroleum Resources Minsitry  Mr. Idang Alibi,  yesterday in Abuja, the minister spoke during a meeting with the executives of Exxonmobil.

    He urged the oil giants to invest in building signature refineries to be run on joint venture basis with the Federal Government providing the necessary incentives, adding that it will bring an end to fuel importation.

    This meeting is part of the ongoing investment drive initiative embarked upon by by minister to IOCs. The first of this was with the Italian, Eni in January this year, where the company pledged to work with Nigeria to revamp the PortHarcourt refineries. Other IOCs scheduled to be visited include Shell, Chevron and Total.

    Kachikwu urged the oil firm  to invest in more practical deliveries in the area of human capital development and investment in local growth of skill sets required in the Oil and Gas sector .

    According to the statement, Exxonmobil which commended the minister for his efforts at ensuring growth in the oil and gas sector said, it is committed to working with Nigeria by delivering power to the country and support the gas commercialisation programme of the Ministry of Petroleum Resources.

    Mentioning the gains that have been made in the sector through the signing of the repayment agreement for the Joint Venture Cash Call in 2016, Kachikwu said the initial payments to the IOCs would be made by the end of this month.

  • NCDMB, IOCs pledge to fast-track projects execution

    NCDMB, IOCs pledge to fast-track projects execution

    The Nigerian Content Development and Monitoring Board (NCDMB) and international oil companies (IOCs) operating in the country have made commitment to fast-track execution of oil and gas projects. This will lead to an increase  crude production and create opportunities for the growth and development of Nigerian Content.

    The IOCs gave the assurance when the Executive Secretary of NCDMB, Simbi Kesiye Wabote visited some IOCs in Lagos to seek collaboration and get their commitment to support upcoming projects.

    Wabote visited Chevron, Total Upstream and Shell with top management of the Board and confirmed that NCDMB had adopted mechanisms that accelerate processing time for Nigerian Content plans, technical and commercial evaluation and issuance of Nigerian Content certificates.

    He urged other entities involved in the contracting cycle to adopt similar strategies for the sector to achieve the six-month contract processing target set by the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu. He also expressed the Board’s readiness to partner various stakeholders in resolving challenges they have in executing their projects.

    According to him, the visits were conceived to engage stakeholders, and explain strategies adopted by the NCDMB to foster projects and ensure domiciliation of work scopes and maximisation of in-country capacities.

    One of those strategies is the categorisation of service companies by their capacities, which he said, will be used in the contracting process.

    He stressed that all new projects must comply with the provisions of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act 2010 and urged the operating companies to ensure that their contractors and sub-contractors remit one per cent of their contract value to the Nigerian Content Development Fund (NCDF) as required by law.

    The NCDMB chief praised the establishment of pipe coating facilities and steel pipe mills in-country and directed operators to patronise the facilities. He said the Board would sanction operators that award contracts without approved Nigerian Content Compliance Certificates (NCCC).

  • NCDMB, IOCs pledge to fast-track projects implementation

    The Nigerian Content Development and Monitoring Board (NCDMB) and some international oil companies (IOCs) have promised to fast-track oil and gas projects implementation to increase Nigeria’s crude oil production and create opportunities for the growth and development of Nigerian Content.

    The IOCs gave the assurance when the Executive Secretary of NCDMB, Simbi Kesiye Wabote, visited them in Lagos to seek collaboration and make firm commitment to support upcoming projects.

    The Executive Secretary visited Chevron, Total Upstream and Shell with top management of the Board.  He said NCDMB had adopted mechanisms that accelerate processing time for Nigerian Content plans, technical and commercial evaluation and issuance of Nigerian Content certificates.

    Wabote charged other entities involved in the contracting cycle to adopt similar strategies so the sector can achieve the six months contract processing target set by the Minister of State for Petroleum Resources, Dr. Ibe Emmanuel Kachikwu.

    He expressed the Board’s readiness to partner  various stakeholders in resolving challenges they have in executing their projects.

    According to him, the visits to operating and service companies around the country were conceived to engage stakeholders, and explain strategies adopted by the NCDMB to foster projects and ensure domiciliation of work scopes and maximisation of in-country capacities.

    One of those strategies is the categorisation of service firms by their capacities, which he said, would be used in the contracting process. He stressed that all new projects must comply with the provisions of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act 2010 and urged the operating companies to ensure that their contractors and sub-contractors remit one per cent of their contract value to the Nigerian Content Development Fund (NCDF) as required by law.

    The NCDMB chief praised the establishment of pipe coating facilities and steel pipe mills in-country and directed operators to patronise the facilities. He said the Board would sanction operators that award contracts without approved Nigerian Content Compliance Certificates (NCCC).

    He informed the companies that the Board was developing a five-year road map for Nigerian Content development.The final document would be shared with stakeholders for their inputs and identification of the roles they will play in the actualisation of the initiative.

    At Chevron, Wabote canvassed the participation of operating companies in the Nigerian Content Opportunities Fair planned for March 29 and 30 at Uyo, the Akwa Ibom State capital, noting that the goal is to showcase opportunities in upstream, midstream and downstream sectors and provide multinationals the opportunity to link up and utilise in-country capabilities.

    “Most of Nigerian companies do not know when projects will come through so they do not prepare themselves adequately. The fair will provide a platform where we can share information that is not confidential.

    At Shell, the Vice-President, Nigeria and Gabon, Mr. Peter Costello, who led the Shell team, discussed the company’s projects, including the Bonga Southwest/Aparo (BSWA).

  • Peterside: IOCs must obey cabotage, other laws

    Peterside: IOCs must obey cabotage, other laws

    The Director-General, Nigerian Maritime Administration and Safety Agency (NIMASA) Dr. Dakuku Peterside, has warned that violation of cabotage and environmental laws by the International Oil Companies (IOCs) operating in the country will attract sanctions.

    Peterside who spoke when he engaged representatives of the IOCs in Lagos on ways of fostering a closer synergy to develop the economy,  urged the IOCs to be mindful of all existing laws and regulations in the discharge of their duties as applicable sanctions will be meted out to erring operators.

    He warned that actions such as flouting of Cabotage Act, negative impact to the environment from oil exploration activities, non payment of statutory levies due to the government and inadequate information sharing shall attract strict sanctions.

  • CBN may reopen banks’, IOCs’ dollar windows to BDCs

    CBN may reopen banks’, IOCs’ dollar windows to BDCs

    The Central Bank of Nigeria (CBN) is likely to reopen the dollar sales by banks and International Oil Companies (IOCs) to bureau de change (BDC) operators, The Nation learnt yesterday.

    The policy shift is part of the modalities to be unveiled by the apex bank on the newly introduced flexible exchange rate policy, President, Association of Bureau De Change Operators of Nigeria (ABCON), Alhaji Aminu said.

    He said with the liberalisation of the foreign exchange market, foreign investors are expected to pump in nearly $12 billion to the economy, and such funds should be accessed by the BDCs.

    “We’re waiting for CBN’s modalities on the new foreign exchange window. We would want to see a circular authorising banks and IOCs to sell dollar to BDCs. We would also want the CBN to set limit on how much dollar a BDC can access from the banks or IOCs,” he said.

    Gwadabe said the BDC operators are no longer interested in getting dollar from the official forex window, because of the challenges being faced by the country in terms of foreign exchange scarcity.

    The CBN had in February, stopped, with immediate effect, sale of dollars (forex) through the Retail Dutch Auction System (RDAS) and interbank to BDC operators.

    A circular to authorised dealers signed by CBN Director, Trade & Exchange, Olakanmi Gbadamosi, however said the weekly sales of forex to BDCs will be sustained by the CBN based on the liquidity needs of the market.

    He explained that the regulator took the decision based on ongoing review of developments in the foreign exchange market and the need to check speculative demand in the market.

    Both the interbank and RDAS funds, he said, should be used for strictly funding of Letters of Credits, Bills for Collection and other invisible transactions. However, this is subject to appropriate documentation as provided by extant regulations.

    The RDAS and interbank funds, he said, should no longer be sold to BDCs and other authorised dealers. “In continuation of the review of developments in the foreign exchange market and to curb speculative demand in the market, both the RDAS and interbank funds should henceforth be used, strictly for funding of Letters of Credits, Bills for Collection and other invisible transactions. It is also subject to appropriate documentation as provided by extant regulations,” Gbadamosi said.