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  • FG meets oil and gas sector revenue benchmark for 2025

    FG meets oil and gas sector revenue benchmark for 2025

    The Federal Government has announced that for the first time in many years, it has met the oil and gas sector revenue benchmark for 2025, after several years of struggle.

    The cheering news by the spokesman of the Executive Chairman,  Federal Inland Revenue Services Dr. Dare Adekanmbi was attributed to the sustained peace in the  Niger Delta region, which he credited to the efforts of various security agencies and firms including the PINL, vested with the protection of the government investments.

    Speaking at the August edition of PINL monthly stakeholders review meeting of Trans Niger Pipeline host communities of Rivers,  Abia and Imo states held in Port Harcourt,  the Rivers State capital yesterday, the General Manager Community and Stakeholders Relations for PINL, Dr. Akpos Meze collaborated the assertion confirming that PINL recorded zero infraction in the past month. This, he said contributed to increased national crude oil production.

    Meze noted that the FIRS announcement underscores the strength and effectiveness of the collaboration/partnership that exists among the Stakeholders, “which can be attributed to consistent application of proven strategies viz: Safety measures for surveillance personnel timely salary payments, rapid dispute resolution within communities, amongst others.

    “These combined efforts have resulted in reduced downtime and increased trust,”he said.

    Speaking further, he announced some of the company’s achievements including interventions in an oil spill location in Yorla, Kpean community in Khana Local government area and bursting of illegal bunkering sites in Umubule and Oyigbo communities both in Rivers State.

    Mezeh, used the medium to update the stakeholders on its Corporate Social Responsibility (CSR) packages for youths and women of the host communities.

    He, however, reiterated PINL’s commitment to sustainable energy security in the country, calling for support from all stakeholders.

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    “We reaffirm our unwavering commitment to sustainable energy security, in full alignment with the Renewed Hope Agenda of the Federal Government. We have a shared responsibility to rescue our economy from further bleeding, and achieving this goal requires that all hands remain on deck.

    “We look forward to your honest and constructive feedback on how we can sustain and surpass our outstanding records in combating pipeline vandalism, oil theft, and environmental pollution,” he said.

    Speaking at the stakeholders meeting, Head of Field  Operations, Eastern Corridor of the Project Monitoring Office, Nigerian National Petroleum Corporation Limited, NNPCL, Engr Akponine Omojevwe called for effective collaboration between the host communities and PINL.

    He noted that for the progress already achieved in the sector to be sustained, stakeholders and host communities must synergize with the surveillance company.

    “We want to emphasize that there must be collaboration between PINL and the communities. PINL has gone the extra mile by approving scholarships for the host communities, they have gone out to make sure their areas of operations benefit from their activities, let us make sure that in this task of securing the pipelines, we support them, don’t destroy their equipment,” he urged.

    Meanwhile, the collaborative security is operations between PINL and the Special Prosecution Task Force (SPT) of the Federal Government have led to the busting of two illegal refining sites in Oyigbo Local Government Area of Rivers State.

  • How executive orders will boost oil and gas sector, by legal experts

    How executive orders will boost oil and gas sector, by legal experts

    Will the executive orders signed by President Bola Ahmed Tinubu early this year boost the oil and gas sector? What are their provisions? How will they enhance the contracting processes and drive investments? Legal experts examined these and more at the 2024 Lawyers in Energy Retreat, reports Deputy News Editor JOSEPH JIBUEZE.

    On February 28, President Bola Ahmed Tinubu signed three executive orders as part of the Federal Government’s commitment to improving the investment climate and positioning Nigeria as the preferred investment destination for the petroleum sector in Africa.

    They are the Oil and Gas Companies (Tax Incentives, Exemption, Remission, etc.) Order 2024; the Presidential Directive on Local Content Compliance Requirements, 2024; and the Presidential Directive on Reduction of Petroleum Sector Contracting Costs and Timelines, 2024.

    For two days last week, oil and gas law experts gathered in Lagos to analyse the impact of the orders on the oil and gas sector.

    They backed the directives and called for their strict implementation, believing they would drive investments.

    The experts spoke at the Lawyers in Energy Annual Retreat with the theme: “Analysing the effects of the presidential policy directives on the Nigerian energy industry.”

    It was organised by the Lawyers in Energy Network, a non-governmental organisation working to develop human and institutional capacities, promote research and influence energy policies.

    Aside from its knowledge-sharing goals, the Network aims to develop the legal and regulatory framework of the international energy industry.

    What the orders are about

    Aside from the fiscal incentives, the orders entail a streamlining of contracting processes, procedures, and timelines.

    President Tinubu directed the Ministry of Finance Incorporated (MOFI) and the Ministry of Petroleum Incorporated (MOPI) to take steps to raise the contract approval thresholds for Production Sharing Contracts (PSCs) and Joint Operating Agreements (JOAs) to not less than $10 million or the Naira equivalent.

    The NNPC Limited and the Nigerian Upstream Investment Management Services Limited (NUIMS), in collaboration with the Nigerian Content Development and Monitoring Board (NCDMB) and industry stakeholders, were mandated to simplify the contract approval process.

    The duration period for third-party contracts awarded under a PSC or JOA is increased from three to five years with the option of renewal for an additional two years after the expiration of the initial three years.

    The directives are aimed at compressing the contracting cycle to four to six months, ultimately reducing project schedules, expediting the delivery of oil and gas products to the market, and increasing value to the country.

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    Pending legislative review of certain reform propositions, the President directed the NCDMB in its implementation of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act, otherwise known as the Local Content Act, to consider the practical challenges of insufficient in-country capacity for certain services, and act in a manner that does not hinder investments or the cost competitiveness of oil and gas projects.

    The President believes that by providing flexibility with the application of the Local Content Act, local operators would be encouraged to increase their capacity, thereby creating additional business opportunities, upskilling the workforce, and ultimately creating more jobs and boosting economic growth.

    The incentives were developed in collaboration with the ministries of justice, finance, petroleum, budget and economic planning; Federal Inland Revenue Service (FIRS), NNPCL, Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Nigerian Midstream and Downstream Petroleum Regulatory Commission (NMDPRA), and NCDMB.

    The retreat speakers

    Among the speakers at the retreat were a Partner at Tayo Oyetibo LP, Mr Mofesomo Tayo-Oyetibo (SAN), Senior Legal Counsel, Exploration & Production (Commercial) at Seplat Energy, Ademola Fashiku, and Group Head of Legal and Supply Chain Management at Waltersmith, Oluwadare Agbelese.

    The trio spoke during the first session on the effect of the presidential policy directive on the reduction of petroleum sector contracting costs and timelines on PSC and JOA.

    The second session featured Executive Director of Business Development and Nigerian Content at Dasoniel Energy Services Limited, Dr David Editang; an energy consultant Dr Wisdom Enang and General Counsel at Tetracore Energy Group, Okezi Okah-Avae.

    They examined the presidential order on Nigerian local content compliance and its effect on the energy industry.

    The third session had the Partner in charge of Dispute Resolution and Tax Practice groups at Templars, Sesan Suleiman, and a Partner at Olaniwun Ajayi LP, Folashade Oluyadi as the speakers.

    They analysed the presidential fiscal policy and its effect on tax administration in the energy industry.

    SAN lists benefits

    Tayo-Oyetibo said the PSC and JOA directive has a positive impact as it fosters a more efficient and attractive investment environment.

    Thus, Nigeria, he noted, can bolster its position as a leading oil producer, while addressing the longstanding challenges that have hindered growth.

    “As the sector adapts to these changes, the focus should remain on sustainable practices and long-term economic benefits for the nation,” Tayo-Oyetibo advised.

    The SAN identified the positive impacts.

    He said: “Cost efficiency: By lowering the financial burden on oil companies, the Directive frees up funds to be used by the companies for more productive endeavours.

    “This could lead to increased exploration and production activities, ultimately boosting Nigeria’s oil output.

    “Attracting investment: With reduced costs and improved timelines, Nigeria becomes a more appealing destination for investment.

    “Oil companies are more likely to commit resources to projects in a predictable regulatory environment, fostering a climate of growth and stability within the sector.

    “Improved timelines: The emphasis on faster contract execution is particularly critical for PSCs, where delays can be costly.

    “Streamlined processes will allow companies to bring projects online more quickly, enhancing cash flow and return on investment.

    “This timely execution is crucial in a sector where market conditions can fluctuate rapidly.

    “Enhanced collaboration: The Directive’s focus on efficiency may foster a more collaborative environment among partners in JOAs.

    “With less time spent on negotiations and compliance, companies can focus more on operational efficiency and innovation.”

    The challenges, by Tayo-Oyetibo

    Tayo-Oyetibo also highlighted potential challenges.

    He said: “While the Directive presents numerous opportunities, challenges remain.

    “Implementation will require significant changes within regulatory bodies to ensure compliance and efficiency.

    “External market conditions – such as fluctuating oil prices – will continue to impact the sector’s performance.

    “Moreover, the long-term sustainability of these reforms will depend on consistent political will and the ability to adapt to changing global dynamics.

    “The Directive addresses significant challenges in the industry and aims to foster a competitive petroleum sector.

    “It aligns with parallel processing, which enables various processes to occur simultaneously, thereby enhancing efficiency and positively impacting the economic projections of contracting parties.

    “The ministries, departments, and agencies (MDAs) should be required to provide periodic public notifications regarding these deemed approvals to ensure greater transparency and accountability.”

    ‘Why orders were needed’

    Editang noted that the local content directive was designed to forestall the decline in investments in the oil and gas sector, enhance the investment and operational environment, attract both local and international investors and give predictability to the oil and gas ecosystem.

    He said despite challenges of limited capacity of local firms, corruption and governance issues, and the struggle to balance international standards with local content, the directive is a positive development.

    Editang said: “The issuance of the directive highlights the Federal Government’s deliberate effort and commitment to creating an environment that accelerates investment in the oil and gas sector.

    “It ensures the benefits of such investments contribute positively to the Nigerian economy.

    “This directive is seen to promote a favourable operating and investment climate by streamlining contractor layers.

    “It marks a positive move toward sector reform, with a focus on encouraging meaningful participation of Nigerian indigenous companies in the oil and gas industry.”

    ‘Reforms imperative’

    Okah-Avae noted that investments in the oil and gas sector significantly decreased, with the country having only five per cent of Africa’s total oil and gas investments despite holding 38 per cent of the continent’s hydrocarbon reserves.

    He said the situation makes reforms imperative, stressing the need for compliance.

    Okah-Avae believes the directive on local content compliance will result in greater competition, prevent unqualified contractors and boost long-term economic growth.

    “Industry stakeholders must monitor to ensure they’re complied with, otherwise, the rent-seekers will do what they do,” he said.

    ‘Directives will reduce delays’

    For Suleiman, the executive orders are a good development as they signal to investors, especially those seeking to exploit non-associated gas resources, that their investments will thrive.

    “The contracting directive signals Nigeria’s commitment to ease of doing business, aiming to resolve delays in contract awards and position the country as a preferred petroleum investment hub,” she said.

    According to her, deemed approvals from NNPCL and NCDMB, in line with the Business Facilitation Act, will enhance administrative efficiency and protect businesses from regulatory delays.

    “The directive’s expedited process for expatriate quota approvals is expected to reduce delays, though challenges may arise in the practical implementation of deemed approvals when interfacing with multiple regulators,” Suleiman noted.

    Tax incentives

    Oluyadi was of the view that the presidential fiscal policy provides incentives designed to reduce tax liabilities, help offset high initial capital expenditures, and make investments more attractive to both new and existing oil and gas companies.

    This, she said, might in turn lead to high voluntary compliance rates, thereby reducing the administrative burden on tax authorities.

    According to Oluyadi, the policy presents a significant opportunity for Nigeria’s oil and gas industry, especially in encouraging natural gas production, improving midstream infrastructure, and attracting deepwater investment.

    She said: “It is noteworthy that the issuance of the implementation guidelines was aimed at ensuring a smooth administration of the order vis a vis the existing tax laws, to provide transparency, certainty and ease of compliance by companies.

    “By reducing the tax burden on local and foreign investors in the sector, the Fiscal Incentives Order could help Nigeria achieve its goals of economic diversification, cleaner energy production, and global competitiveness in the oil and gas sector.”

    Way forward

    Fashiku suggested that strong advocacy is required to include the new contract approval threshold in the NOGICD Bill 2023.

    He stressed the need for sustained engagements between relevant stakeholders, and for capacity building for regulatory bodies to meet shortened timelines.

    He added: “Licensees need to increase the efficiency of their internal processes to align with new approval thresholds and timelines.

    “JV non-operators need to establish monitoring mechanisms to ensure compliance with the 15-day approval process.”

    Executive Secretary, Lawyers in Energy Network, Miss. Raqeebah Oloko, said the theme was chosen to analyse the impact of the executive orders given the critical place of the sector and the effects recent energy policies have had on citizens.

    “This prompted the Network, in its bid to help the country chart a path forward, to bring industry experts together to analyse the energy policies being implemented by the presidency and how beneficial they are, and if not, help in proffering solutions towards better implementation strategies and way forward,” she said.

  • Expert emphasises importance of health, safety, environmental management in oil and gas sector

    Expert emphasises importance of health, safety, environmental management in oil and gas sector

    Olawe Tula, a specialist in liquefied natural gas plant operations and competency assurance, has called for mandatory prioritisation of Health, Safety, and Environmental (HSE) management in the oil and gas sector.

    He outlined a roadmap to help industry practitioners anticipate potential safety hazards or near-miss incidents and implement immediate corrective measures through the extensive integration of technological systems into operations.

    Dr. Tula highlighted that the oil and gas sector produces a wide range of frequently purchased and consumed products in the energy market, including lubrication oils, refined petroleum products, and gas production such as LPG, NGL, and LNG.

    He noted that oil and gas companies operate in highly competitive markets with tight profit margins and stringent quality standards.

    He pointed out the unique challenges oil and gas companies face in managing HSE concerns effectively due to the nature of their products and market dynamics.

    Emphasising the paramount importance of HSE principles, Dr. Tula stressed the need to prioritize the well-being of all involved parties, preserve the ecosystem, and ensure environmental sustainability.

    “The health and safety of employees and consumers is essential for maintaining trust and credibility in the market. HSE Practices help companies ensure the wellness of the workforce. It is also a crucial piece in our quest to achieve environmental sustainability, which has become a growing concern for oil and gas companies as they seek to minimize their carbon footprint, reduce waste, and adopt eco-friendly practices to meet customer expectations and regulatory demands,” he said.

    With increasing global awareness of environmental issues, he noted that oil and gas companies are facing growing pressure to adopt sustainable practices throughout their supply chains.

    “It is no longer news that the oil and gas sector is inherently associated with various operational hazards and risks, including machinery accidents, chemical exposures, fire hazards, and ergonomic injuries. Managing these risks requires robust safety protocols, training programs, and preventive measures to minimize the likelihood of accidents and injuries in the workplace.”

    Dr. Tula also noted that oil and gas companies are faced with the dilemma of generating optimal revenue against an increasing myriad of operational and financial challenges. He however urged these companies to never lose sight of the most important priorities.

    “Balancing environmental sustainability with operational efficiency and cost-effectiveness presents a significant challenge for oil and gas companies. There is now a pressing need to find means to reduce carbon emissions, conserve natural resources, minimize waste generation, and promote eco-friendly packaging and product designs. Regardless, for oil and gas companies, ensuring the health and safety of employees should always remain a top priority,” he noted.

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    Dr. Tula suggested that the infusion of big data analytics into oil and gas operations could help companies make better operational decisions that are based on empirical evidence and in full alignment with organizational goals.

    “Big Data analytics can help companies analyze large volumes of data from multiple sources, including production processes, supply chain operations, and external factors such as weather patterns or market trends. By identifying correlations and trends, big data analytics can help predict potential safety risks and inform proactive risk management strategies.

    “By leveraging insights derived from big data analytics, oil and gas companies can make informed decisions regarding HSE management strategies, resource allocation, and process optimization,” he added.

  • ‘Poor regulation stifling growth in oil and gas sector’

    Chichi Emenike, an oil and gas expert who boasts of over 20 years’ experience across the upstream, midstream and downstream of the sector, sits atop as Head of Gas Ventures at Neconde Energy Limited, an independent oil & gas company serving as a special purpose vehicle for the acquisition and development of petroleum assets. In this interview with Charles Okonji, she speaks on the prospects and challenges of managing oil and gas assets in a major oil-producing country like Nigeria. Excerpts:

    Despite the huge gas reserves that we have, just recently, ENI told us that they have made a significant discovery in the Niger Delta, but there are still gas shortages in the domestic market. What are you doing towards it?

    This is no longer new. So for the gas we talk about, most of it are still trapped in the ground. We don’t have sufficient gas infrastructure for the gas master plan which is the nation’s dream. This is project we started running with some years back. We haven’t fully optimised it yet. In fact I don’t think we have gone beyond 10 to 20 percent. The level we are now for all the gas reserves we have is that we have a crisscross of gas pipelines all over the country. We have got some of the big elephants in the room like the PIB. We have got an environment that is not clear to investors, whether you are international, or a local investor.

    We don’t have policies that are completely clear. It does not give a clear line of sight to your investment. That is not acceptable. We have a myriad of other issues. But for gas, you have the power sector that is also caught up in it. It is something else. If we do not unbundle the power sector, which happens to be one of the bigger sectors that uses gas, you can’t develop the gas space. These are some of the issues that we are dealing with, these are some of the things that have held the gas industry hostage for some years now.

    The federal government has announced plans to divest its equity in some of the oil investments. Do you think it’s the way to go?

    Neconde is a product of such bids in the past.  Yes, it is okay for a nation at a place where we are to do so. It should be encouraged if we can get more participation from private investors who can take those assets and run with them. Some of these assets as we realize are assets I referred to as marginal fields. So for some of the IOC’s, those are assets that’s really in their big picture.

    But a lot of individual firms have rather made successes, success stories out of those assets they have maximised. Moreover, by extension they have contributed to the GDP, they have contributed to nation’s employment. They have contributed to technology development. So if the government is looking towards doing another bid licensing round, it is good because once again I go back to the story. You have got other people in Africa; you have got Angola doing licensing rounds. You have got Ghana doing licensing rounds. These countries are putting in place transactional models, clear cut timelines, clear cut dates and they’re running with those schedules and then meeting those schedules.  For us, unfortunately sometimes we start, we stop, we stall. Those are not very good clear cut signals to investors. So yes is it’s encouraging.

    If the government can work with this and then just run and give these assets to Nigerians, there are other investors who are willing to work with it.

    What are the specific actions you wish the government to take to unbundle the sector?

    The first one for me would be the legal vacuum. So, we’ll get right back to where I just finished from which is the bills. This is because we have a history, I am sorry to say this. As a country that that runs on people, we don’t have procedures, we don’t have processes. So for every four years a new person comes in. If you don’t have legal documents, you don’t have bills that back up whatever you are running with. Anyone can come in and change it whenever they feel like and that doesn’t give confidence to any investor.

    We also need sanctity in our contracts. So if we don’t have legal documents to back this, it means you have contracts that can be scuttled at any time. I always say this, if you don’t have your legal documents in place, anyone can change the goalpost at any point in time and you can’t base your economics on that.

    For every investor you sit down, you have an idea when you run your economics, when you’re breaking even; you have an idea how this business is going to function. You have an idea when competition comes in, at what point would begin to do. I mean look at what happened with the GSM industry, that is what we hope can happen in the gas sector. So for me, you will start with the legal document first. Then we have to take a look at the pricing. Like I said, those two would be key. Then of course maybe advocacy.

    How would pricing be a tool for unbundling the sector, as it discourages investment at its present sate?

    Everyone knows that the government has capped the oil price at $1.50 price and the gas producers have had a running battle, OPTS – Oil Producer Trade Section of the business chambers have said the $2 is not working and for those of us at the upstream. So when you do your calculations you do, so it is an entire value chain. So if you do production, you have got transportation, we have a dearth of infrastructure as it is we don’t have too much infrastructure. You’ve got some transmission costs to deal with. Then you have the LDC, the people on the distribution end.

    At the entire value chain, you have a break down along and it has to add value for everyone at the end of the day because what gets to the last mile man has to be a pricing that can work, whether that gas is going to be used for power generation, or being used for industrialisation. It has to be a price that will work, to the degree that will work with Nigerians at the end of the day. The starting point is putting in place an environment also that works for whoever is producing.

    What role is Neconde playing to ensure that we have adequate supply of gas for domestic use?

    One of the first things that we started doing is what I’ve come here to do, which is the company has taken a focus on its reserves. What we are working towards now is a complete zero flare situation. We have taken some of our associated gas for now, currently we’ve already commercialized it and we currently have buyers. The short term plan is to also maximise on that associated gas. So we are putting in place more gas infrastructure. We currently have a central processing facility. We’re adding of course the associated infrastructure that’s required for that, pipelines and so on and so forth. This requires investment. OK. So part of what I’m doing, even in the short term, with the gas that is on ground is to look at the economic models that support you know boosting this gas production. In addition we’re also looking at the non-associated gas because that is where the main focus is, that is where the big business is. That is where you have investors that have to come in and we have to prove to them this is a business. So I want to take you back to the topic, what are some of the issues that we have. We might want to look at the gas pricing situation as it is today in Nigeria. Like I said to someone earlier, this is not the Salvation Army.

    Nobody does business just for it, I mean the typical investor posture is not you’ve come to rip off, what you’ve come to invest; you want to see economic benefits. You want to see social benefits, but it must, there must be a clear line of sight to that money you put on ground. I was also saying to someone, hey if you take a look at Africa, you have other investment destinations, you’ve got Ghana down the road Ghana has, I mean, they don’t have as much reserves as we do but they’ve done a lot of tidying up. You’ve got Mozambique that is talking of LNG today. Not far distance from where we ship our gas. Very soon, they will do first LNG. You’ve got Golar LNG who came to Nigeria some time ago, not too long ago. I mean what Golar is doing is they’ve got an LNG so what you have in Bonny, you have it in Angola. So it is more like plug and play. Now they’ve come here. I don’t know what the issues were, but it didn’t quite work for us and they took it to Cameroun. Cameroun that is in our backyard has delivered the first LNG. So what are we saying? It is time we get our act together. We talk a lot. Also the current government’s also talking of the ERGP – growth recovery plan. Those plans are hinged on moving this economy forward.  What would move the economy forward? Power. What is power hinge on? It is hinged on gas. lf we don’t put in a cost reflective tariff  that will make sense to people investing.  Even if we talk to the guys in the power sector, they would tell you if it’s not making sense, I am not investing. You’ve got people in power sector that are telling you hey, they’ve got inherited contracts that were contracted at the old FX regime and they are financing at the present FX regime. They are doing O &M – operations and maintenance. At FX values that are almost times two of that. They would tell you on a daily basis they’re losing at least anywhere between 30 to 40 percent.

    So we need to unbundle some of these things if we are serious, we need to move the country forward. Other countries worldwide and as we do know the conversation really is the energy space is moving more and more towards a cleaner environment. We’re not doing gas and crude is not exactly your best right now. So if we’re serious as a country, what we need to do is take a focus on gas.

    If you were to advise the Minister of State, what will be your priorities?

    We need to go back to putting in place laws; we need to pass our bills. This is because if someone gives you a framework and no binding laws to make it work, it becomes cumbersome.

  • Local content is essential to oil, gas

    Samsung Heavy Industries Nigeria (SHIN) Limited Managing Director Mr. Jejin Jeon, in this interview with Sunday Oguntola speaks on the importance of local content in the oil and gas sector, among other issues.

    What is your assessment of the local content legislation in oil and gas industry?

    It’s fair to say that ‘local content’ regulations don’t sound like the most interesting topic in the world.  Any manager of any oil or gas project is going to be focused on hitting their targets and rightly so.  Time is money, and in the energy sector this is particularly the case. With this target mindset, it’s easy to dismiss local content regulations as additional bureaucracy or a box to be ticked to win the tender.

    How did you cope with this piece of legislation?

    I think that Samsung Heavy Industries Nigeria could have fallen into this trap too. After all, we were a new arrival in Nigeria, eager to prove ourselves and to win business for our company.Thankfully though, we are new to Nigeria, we are by no means new to shipbuilding in a developing economy. It might seem difficult to remember this today but when our first shipyard was being constructed in 1974, Korea was a very different country.  We too had to deal with the twin challenges of undertaking immense economic growth while improving the standard of living for our citizens. We learnt that you had to be agile and adapt to a fast-changing world, and that you have to keep transformation at the core of what you do.

    You have reputation as a global shipbuilding giant. What gives you competitive edge over your competitors in the Nigerian environment?

    Ship building has two faces like Janus, the Roman god. On the one hand, it is a high-tech, innovative business, which demands the best.  On the other hand, it requires hard work and an intense level of human capital. By understanding this dual nature of shipbuilding, we were able to design a local content programme that delivered opportunities to Nigeria, while delivering cutting-edge technology. This blend of global and local has proven to be perfectly suited to delivering on customer needs, satisfying local content requirements and creating a sustainable platform for long-term growth. And when Samsung says long-term, it means long-term.  Building a welding school means opportunities for our impressive local workforce, skilled welders, such as Chinonye, who are learning skills and sharing knowledge. But it also means looking to the next decade and beyond, understanding the potential of Nigeria to be a focal point for fabrication and integration for the whole of Africa. We have proven that responsible investment, powered by a belief in people, unlocks potential that can drive real change.  Our fabrication and integration yard in Lagos is the start of our journey in Africa, and it’s a journey that will deliver jobs, opportunity and economic prosperity for the country and beyond.

    What is your future vision?

    Our vision is a future of extraordinary growth and opportunity, building on our now-proven model for heavy involvement of local companies and local workforce talent. The combination of Korean efficiency and expertise, fused with Nigerian talent and passion, presents limitless possibilities for a future repairing, maintaining and building high value ships to serve needs in Africa and beyond – just watch this space.

  • APC to critics: Stop playing politics with reform in oil sector

    The All Progressives Congress (APC) has said that Nigerians, especially critics of the President Muhammadu Buhari led government should stop playing politics with the ongoing reform in the nation’s oil and gas sector.

    Deputy National Publicity Secretary of the party, Yekini Nabena told newsmen in an interview on Sunday that the current administration’s efforts to sanitise and reform the oil sector deserve the support of all well-meaning Nigerians.

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    Nabena said it was a courageous move by the current administration to reform the oil and gas sector through the introduction of a new price regime which has led to what he described as the technical liberalization of petrol price.

    He said the move was to reposition the country’s downstream oil sector and in particular ensure that the Nigerian National Petroleum Corporation (NNPC) becomes a fully run commercial entity.

    He said “this administration’s efforts to sanitise and reform the oil sector should be supported by all well-meaning Nigerians. It is important that we don’t succumb to the temptation to play politics with the reforms in view of the strides that have been achieved so far.

    “In a general appraisal of the oil sector reforms undertaken by the President Muhammadu Buhari administration, an often downplayed achievement is the fact that in a long time, Nigerians no longer have to waste valuable man hours queuing for fuel on account of scarcities.

    “The positive effects of the oil sector reforms have been instant and visible. Fuel shortages and resultant queues which were a recurrent issue in the sector due to our limited refining base are now in the past.

    “As the NNPC works to wholly meet the national petrol requirement due to the inability of private sector players to meet their supply quota, the increased private participation in our energy sector, is set to increase our local refining base with the near launch of privately-owned and high-capacity refineries. The resultant effect will be an end to the costly importation of refined petroleum products.”

    Reacting to the $3.5billion Subsidy fund being probed by the Senate, Nabena said: “The achievements of the oil sector reforms brings to fore erroneous insinuations of a $3.5billion Subsidy fund allegedly in the NNPC’s custody which the Senate has reportedly resolved to probe.

    “In NNPC’s bid to stem petroleum product supply hiccups, the corporation initiated a revolving National Fuel Support Fund of $1.05billion, since the corporation is literally the sole importer and supplier of products in the country.

    “The Fund has been domiciled in the Central Bank of Nigeria (CBN) ever since. NNPC has not independently spent a dime of the fund which is to ensure stability in the petroleum products supply in the country.

    “The Fund has been jointly managed by the NNPC, CBN, the Federal Ministry of Finance, the Petroleum Products Pricing Regulatory Agency (PPPRA), Office of the Accountant General of the Federation (OGF), the Department of Petroleum Resources (DPR) and the Petroleum Equalization Fund (PEF).”

     

  • Buhari vows to carry out reforms in oil, gas sector

    Buhari vows to carry out reforms in oil, gas sector

    President Muhammadu Buhari on Tuesday promised that his administration will undertake appropriate reforms and implement fresh policies to boost national income from oil and gas production.

    He made the promise while speaking at separate meetings with delegations from Exxon- Mobil and the Nigeria Liquefied Natural Gas Company (NLNG), at the Presidential Villa, Abuja.

    Buhari, in a statement by Special Adviser on Media and Publicity, Femi Adesina, listed the removal of bureaucratic bottlenecks created by multiple government agencies that currently impede the operations of companies in the oil and gas sector as one of the reforms to be undertaken by his administration.

    He said that his government will also give priority attention to the security of oil and gas installations and maritime security in its bid to boost national earnings from the sector.

    He said: “It is the responsibility of the Federal Government to secure the environment. The vandalism of oil installations and pipelines, piracy, oil theft and the fall in the international price of oil have made our economic situation very disturbing.

    “This government will do all within its powers to secure the environment and encourage more investments in the oil sector,’’ President Buhari said, adding that his administration will  ensure that Nigeria’s oil and gas industry quickly becomes more globally competitive.

    He also assured the NLNG delegation of his administration’s full support for plans to expand the total production capacity of the company.

    The President regretted that political squabbles and interference in the past had prevented the NLNG from attaining its full potentials.

    “Today, we are celebrating six trains. It could have been 12 trains if all had gone according to plan,” President Buhari said.

    The NLNG delegation included the Group Managing Director of NNPC, Dr Joseph Dawha and the Managing Director of NLNG, Mr. Babs Omotowa.

    Mr. Omotowa requested the President’s support for Train 7 of the NLNG, which, he said would create additional 18,000 construction jobs and an additional three billion dollars dividend to government when operational.

    He also asked for the President’s intervention in reducing the number of multiple government agencies around the plant that have made its business globally uncompetitive.

    The Exxon-Mobil delegation was led by its Managing Director, Mr Nolan O’Neal.

  • Why Nigeria’s refining capacity falls below expectation

    Why Nigeria’s refining capacity falls below expectation

    DEFECTIVE policy framework, greed and corruption are key factors that have adversely affected the nation’s booming oil and gas sector, especially in oil refining, experts have said.

    Speaking against the backdrop of the World Oil and Gas Review 2014 released recently, which revealed the dwindling fortunes of the nation’s oil and gas sector, petroleum expert, Mr. Nnamdi Ebube, said it was rather disheartening to note that despite its status as Africa’s top crude oil producer and exporter, Nigeria continues to trail other African countries such as Algeria, Egypt, Libya and South Africa in terms of refining capacity.

    Ebube, a former staff of the Nigerian National Petroleum Corporation (NNPC) said at the centre of the crisis bedevilling the nation’s petroleum sector is the blatant disregard for due process by the authorities, a development, he lamented would continued to work against the progress and growth of the sector.

    According to the survey, which covers refining output for last year, Egypt has the highest primary refining capacity in 2013 among the five countries, followed by Algeria and South Africa.

    Primary capacity in Egypt was put at 840,000 barrels per day, in Algeria 607,000 bpd, South Africa 520,000 bpd and Libya 380,000 bpd.

    In Nigeria, primary capacity was 342,000 bpd last year, as against 345,000 in 2005, according to the report.

    “We need a paradigm shift in the oil and gas industry. As the United States stops buying our crude oil and set to become an exporter of crude oil, I think it is a call to action. We need to start to look at value addition in terms of refining, petrochemicals and others,” the chief executive officer of Dubril Oil, Imo Itsueli, said on at a public presentation of an industry book.

    “Singapore has no crude oil, but they have many refineries. Why can’t we be a refining hub for the rest of Africa? Why can’t we export petroleum products to Europe instead of crude oil. We are still talking about crude oil, not value addition out of crude oil, that is our challenge.”

    The country’s four refineries operated at an average of 10.46 per cent of their combined nameplate capacity of 445,000 barrels per day in June, data from the latest monthly report of the Nigerian National Petroleum Corporation showed.

    According to the data, 244,000 metric tons of dry crude oil, condensate and slop was received by the three refineries, Kaduna Refining and Petrochemical Company, Port Harcourt Refining Company and Warri Refining and Petrochemical Company.

    “With an opening stock of 428,000 mt, total crude oil available for processing was 672,000 mt, out of which 221,000 mt was processed. The respective average capacity utilisation during the month was 0.00 per cent, 17.96 per cent and 13.44 per cent for KRPC, PHRC and WRPC respectively,” the NNPC said.

    Kaduna refinery in the month had total available crude oil of 169,301 mt, but nothing was processed. Out of 289,852 mt, the Port Harcourt refinery processed 152,889 mt, while Warri processed 68,098 mt out of 213,352 mt.

    The country’s refineries have long been operating well below installed capacity as they are in different states of disrepair. They operated at an average of 31.1 per cent capacity in 2012, according to data from the Central Bank of Nigeria.

    “Our domestic refineries must be made to work. Appropriate incentives need to be worked out to attract new investment in refining. While domestic refining by itself is not sufficient to guarantee product price stability, there are clear gains to be derived from domestic refining as opposed to imports,” said the General Secretary of the Nigeria Labour Congress, Dr. Peter Ozo-Eson, in a report entitled ‘Pricing of Petroleum Products in Nigeria’.

    Dangote Industries Limited is building a $9 billion refinery/petrochemical/fertiliser complex in Lagos. The refinery, which is expected to be completed by 2016, will initially have a capacity of 400,000 bpd, doubling the country’s refining capacity as well as cut imports of refined petroleum.

    Nigeria is arguably the biggest importer of refined petroleum products on the continent, creating a lucrative market for refineries particularly in Europe and the United States.

    The country, which is home to over 170 million people, imports more than 80 per cent of its refined petroleum products for the servicing of its economy.

    “Subsidies have also contributed to low capacity utilisation at refineries. In Nigeria, for example, current subsidy schemes lead producers to sell crude overseas rather than to local refineries and therefore add to increasing volumes of refined product imports, which present a large cost to the economy,” said KPMG in its 2014 Africa Oil and Gas Report, while noting that problems in the refining industry on the continent include corruption, poor maintenance, theft, and ggoperational problems.

  • Monopoly in oil, gas service sector inimical, says Jagal chief

    Monopoly in oil, gas service sector inimical, says Jagal chief

    AN operator in the oil and gas sector has decried lack of competition, which he described as ‘coercive monopoly’ that exists in the sector’s logistic services, urging the Federal Government to address the issue to ensure competitive prices for products and services.

    The operator alleged that it is only one company that plays effectively in the oil and gas logistic services sector following government’s support. It is in view of this development that he has urged the government to create equal opportunities for entrepreneurs who want to operate in the sector.

    Chairman, Jagal Group, owners of the Snake Island Integrated Free Zone (SIIFZ), Mr. Anwar Jarmakani, who spoke to The Nation on the issue on the sideline of an event in Lagos, said without competition, the goals of the Nigerian content agenda will not be achieved.

    He said: “Another issue the free zones relates to the coercive monopoly prevailing in the oil and gas logistic services sector. We believe that when there is a level playing field in the economy; competition will be the driving force in the regulation of the market forces.

    “Competition will ensure consumers have competitive products and prices. Without a level playing field, the goals of Nigerian Content in the oil and gas sector will not be achievable. We believe strongly that the free zones will continue to be the engines through which the Nigerian Content Development and Monitoring Board (NCDMB) can effectively promote the achievement of significant local content in oil and gas related activities. All efforts should therefore be geared towards encouraging healthy competition within the Nigerian economy.”

    He also sought the government’s urgent intervention in the Oil and Gas Free Zone’s (OGFZA’s) intention to take over SIIFZ from NEPZA. He said: “It is our view that the principal aim of the OGFZA Act as enacted in 1996, is to provide for the establishment of an Oil and Gas Free Zone in Onne/Ikpokiri. The reference under Section 5 of the Act to OGFZA’s takeover of certain functions being performed by NEPZA is only as they relate to Zones engaged in the export of oil and gas. SIIFZ is not involved in such activities.” He explained that SIIFZ doesn’t engage in activities and functions that OGFZA oversees, therefore, it should be NEPZA that will be overseeing its activities.

    He said: “I wish to state that we at SIIFZ will through our activities continue to give practical expression to Mr. President’s transformation agenda and vision of a greater Nigeria,” adding that SIIFZ was primarily promoted as an integrated deepwater oil and gas service and support location capable of attracting and combining the engineering and component manufacturers, as well as service companies, into one interconnected environment.

  • Oil workers criticise new payroll

    OIL workers have warned the Federal Government to halt the planned implementation of the Integrated Personnel Payroll Information System (IPPIS) in the oil and gas sector, describing it as not conformable.

    Speaking against the backdrop of a deadline by the Office of the Accountant-General of the Federation to some agencies in the industry, the workers said if the government insists on imposing the IPPIS, they would shut it down.

    Speaking in Lagos at the weekend, the President of Petroleum and Natural Gas Senior Staff Association (PENGASSAN), Babatunde Ogun and the National Public Relations Officer, Comrade Seyi Gambo, said the government agencies were operating an International Financial Reporting System (IFRS) and there was no need to introduce a new one.

    Ogun noted that the current system is easy and makes auditing of personnel possible.

    He said: “We, PENGASSAN, have written to the Ministers of Petroleum Resources, and Labour and Productivity, as well as the Accountant-General of the Federation on our reservations about the planned implementation of the IPPIS policy in our industry. We are against our industry being used a guinea pig to try all forms of policies that is not working in other industry,” he said.

    Gambo explained that the new system has some defects. “The IPPIS does not include allowances that are pre-determined because of their technical nature.”