The Nation Newspaper

Tag: IOCs

  • Importers to lose monopoly on quality barite

    Importers to lose monopoly on quality barite

    Miners of barites in Nigeria have been at the edge in recent times. The situation got worsened last year when the International Oil Companies (IOCs) applied for a lift of the ban on the importation of the product into the country. The oil giants’ excuses for seeking to import barite into Nigeria, was simply that the quality of the Nigerian-made barite was a far cry from international standard.

    Perhaps Federal Government granted the waiver because the local processors could not counter the stand of the oil companies with an evidence of quality barite.

    But the monopoly that foreigners enjoy in the industry is now under threat. The looming threat is not that of litigation or application for policy reversal that would favour the local industry. It is a threat from a consortium that has an insight of the sources of quality barite across the country.

    The emerging player in the industry, (A-Z Petroleum Products Limited) is diversifying from the manufacturing, oil, lubricants and plastic industries into mainstream processing of barite.

    The Managing Director, Engr. Linus Ilozue, who made this disclosure to journalists in Nnewi, Anambra State added that the firm has procured the right technology that can produce the acceptable Specific Gravity (SG), remove the grits and produce the pure white colour in line with international best practice.

    While fielding questions from journalists recently, Ilozue said that most barites produced in Nigeria are rejected because of the artisanal and small miners involved in the business who lack the wherewithal for the production of the quality product required in the oil, pharmaceutical, and paint industries.

    “Our market is the oil industry. Barite is heavy chemical that is used for drilling mud in the oil industry to avoid explosion. It is also used by the paint industry, pharmaceuticals for drugs. We have gone through all this and we have collected the quality they want. In the oil industry, they are interested in the one that should not have grits so that it does not start breaking the drilling beats .Number two, it should have a certain specific gravity (SG ) if it is lower than that they will not accept it. In paint industry, it has to be pure and some of them want it pure white. So, we know. We have got the technology that can transform the raw material to these qualities: the right SG, the right colour, the right size, grit free and as pure as possible. “

  • Bayelsa, oil firms to collaborate on safety

    The Bayelsa State Government is planning to collaborate with international oil companies (IOCs) and other oil producing states to find ways of ensuring safe operating environment for oil firms and other business.

    Bayelsa State Governor Dickson Seriake made this known while fielding questions from reporters during an oil and gas forum in Abuja.

    He stressed the need for such collaboration, noting that it would benefit the oil firms and the people of Bayelsa by createing the platform to empower the people, contribute to overall development and generate revenues for the state.

    He said: “This is a time to talk of collaboration and cooperation to see that we have a safe operating environment for the IOCS and to also see that we have a safe and protected environment. We are also concerned about the issues of empowerment of our people. We know that is critical. We are concerned about the environment. We are concerned about how the oil industry can respond and work with us and other states to ensure that we make life more meaningful for our people.”

    On how to involve other states in the collaboration, he said: “We have a platform at the regional level, the regional cooperation framework, so at our meeting, I’m going to discuss the need for us (governors of oil producing states) to deploy our resources for the security of the environment. So, I’m going to discuss model with other governors of the region.”

    On what the state government is doing specifically to tackle insecurity, he said: “We have a robust security framework in Bayelsa and as a matter of fact, that is what we recommend to all states that have similar problems. That is why I keep on talking about collaboration and partnership because that is the key.

    “The security system we have devised in Bayelsa works a lot better when keyed into the communities, so we have communities working on that, young people and leaders of communities working on that, and we have a system we key the information that we have and make it available to the security operatives.

    “We gave 15 patrol boats to the joint taskforce (JTF), the marine and the navy. We need to do that because that is part of collaboration.”

    He also commended President Goodluck Jonathan’s efforts in exploring Nigeria’s diplomatic relations to fight oil theft. “The President is right and I wish him luck. He said he will use the full weight of our diplomatic resources to ensure that it makes it easier to track and identify stolen crude in order to discourage the activities of oil thieves. But you must know that there is a lot of international conspiracy in what is going on.

    “Those who buy crude are from outside this country, they don’t reside here in the Niger Delta. Those who get involved in big time bunkering activities are from outside the Niger Delta. But we the states in the Niger Delta and we the people who live and do business there, suffer the effects because we are left with degraded and fragile environment and ecosystem and above all most criminal activities originate from bunkering activities because that is how live ammunitions and small weapons get smuggled into this country and generate violence.”

    He also spoke on the Nigerian Content Act saying: “The local content is one framework by which the Niger Delta region can benefit from the various legal, legitimate opportunities, so we have to further expand the frontiers of the local content law not only in theory as it is but we need to continuously examine how it is working and to the extent to which that has impacted on the wellbeing of the people of the producing communities.”

  • Local content: Firm calls for more patronage from multinationals

    Engineering Automation Technology Limited (EATECH), a local engineering firm, has called for an increase in patronage from International Oil Companies (IOCs) on products and services offered by indigenous firms as that would boost the capacity of local firms in the oil industry.

    Managing Director of the company, Mr Emmanuel Okon, Okon spoke at the company’s fifth anniversary in Lagos.

    He noted that poaching doesn’t encourage growth of human capital base of local firms.

    He said low patronage of products and services introduced into the industry by local firms, impedes the development of some local firms.

    Okon also called for urgent intervention of the Federal Government in the act of poaching in the services sector of the industry. He said that it is vital for the government to help stop poaching of skilled Nigerian workers from indigenous firms by foreign oil and gas companies.

    He said with poaching and the ever-present problem of difficulty in sourcing for funds, the survival of most local contracting firms is slim.

    Okon noted that his company had lost a substantial number of trained staff to multinational oil and gas companies.

    He therefore demanded that payments for projects executed by local firms executing projects for major oil companies to be at par with what foreign contracting firms obtained.

    Okon said despite the poaching constraint, it was imperative for local firms to increase funding to train more future human capital in our tertiary institutions as part of their Corporate Social Responsibility.

    “Funding presents itself as the major factor facing most indigenous entrepreneurs in running successful businesses in the oil and gas industry,” said Okon.

    “Indigenous companies providing similar services like their foreign counterparts are paid less thereby affecting negatively their ability to sustain competent and certified personnel especially those trained by them.

    “The twin evil of poaching trained personnel by multinational companies and sustaining these trained personnel by local companies is a challenge which requires the intervention of regulators,” he added.

    Okon, who identified the high remuneration of staff by multinational firms, noted that they were able to pay higher salaries because they usually got more income earnings from even similar contracts or jobs performed by local firms.

    He said to improve the manpower base for local firms, despite the poaching by foreign firm, EATECH had to inaugurate an award (that goes with N100,000 gift) for the best graduating student of the Electrical and Electronic Department of the Akwa Ibom State Polytechnic, in Ikot Ekpene.

    Okon lauded the local content policy of the government, saying it had enabled his company established five years ago, to undertake projects in an industry hitherto reserved for foreign multinational.

    The industry is regulated mainly by the National Petroleum Investment Management Services (NAPIMS), the Local Content Monitoring and Development Board and the Department of Petroleum Resources (DPR).

    Okon said it was important for these regulators to “implement radical but careful tripartite relationship in providing guarantees for access to project specific finances especially to indigenous companies whose services are listed on NIPEX.”

    He said this option would provide alternative or additional comfort to banks where genuine indigenous companies cannot provide additional collateral in addition to domiciliation.

    Engineering Automation Technology started operations in November 2007 with seven staff and Saipem Contracting Nigeria Limited as pioneer customer.

    At present, the local firm provides services to other multinationals. They include ExxonMobil Group; Total Upstream; Delattre Bezons Limited; Aveon Offshore Nigeria; and ZB Joint venture Limited.

    The company holds the ISO: 9001:2008 Certification.

  • Seplat boss expresses concern over passage of PIB

    The Managing Director, Seplat Petroleum Development Company Limited, Mr Austin Avuru, has expressed concern over the passage of the Petroleum Industry Bill (PIB) into law.

    He said the bill would either not be passed into law after all or what would be passed would not be functional, which may lead to call for amendments from the day one.

    The development according to analysts, would not only further deepen investment diversion from the country to other countries but would at the same time jeopardize the entire country’s economy.

    Speaking with The Nation during the Petroleum Club Forum, which focused on the PIB, held in Lagos, Avuru regretted that the piece of draft legislation was rather widening the gap between the government and the industry rather than narrowing it, noting that in the end if no concrete consensus was reached on what is acceptable to both parties, it is the industry and the country that would suffer

    He said the discrepancies that existed between the international oil companies (IOCs) and what the government was trying to do have been the major challenge in all of the versions of the PIB. It doesn’t represent what we think it should be, he added.

    He said: “Right from the beginning when we decided for whatever good reason, that we have to go through this complex process of rewriting all existing legislation in the industry and put it into one piece of document, some of us knew from the beginning that it was going to produce more complications than solutions.”

    He said the objectives of both parties were completely different. According to him, while the government wanted more revenue the stakeholders were saying that too many complications had crept into the industry, which the Seplat chief agreed had increased the cost of doing business.

    “The business environment is much less stable than it was 15-17 years ago and that under this circumstance what we are getting out of the industry is just about enough and the government doesn’t want to listen to that. Government wants more, the industry is saying if you want more you are chasing us out of business,” he said.

    On whether the National Assembly would reach a compromise on the issue, Avuru said the government and the industry had failed to narrow their differences before taking a compromise document to the National Assembly adding that most of them took their very divergent views to the National Assembly and by judication what would come out of the house would be difficult to predict.

    “Where the industry and the government agencies including the Nigerian National Petroleum Corporation (NNPC) could not close their gap and reach some compromise at this point what would come out of the National Assembly would be difficult to predict,” adding that the lawmakers may not have the broad training and experience to understand the intricacies of the issues in the industry.

    The Executive Director, Pillar Oil Limited, operator of Umuseti/Igbuku oilfield, Seye Fadahunsi, said that the PIB must put in place the opportunity for small companies to grow from small to midsize companies

    He agreed there was nothing in the draft that said any category of acreage would be reserved for indigenous players. He said there must be some form of encouragement that ensures that what the international oil companies don’t use, the local companies are able to use them to increase the size of the pile.

    He said the IOCs have given out over 100 acreages of twenty nine marginal fields in the history of indigenous operations in Nigeria and had only produced about five percent of total production.

    According to him, most of the licenses that were given to indigenous companies were licenses that the majors didn’t want, adding that the potential of those licenses were not necessarily that grade.