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Tag: oil firms

  • Tompolo blames oil firms for pipeline attacks

    Tompolo blames oil firms for pipeline attacks

    A former Niger Delta militant leader, Chief Government Ekpemupolo (aka Tompolo), has urged security agencies to investigate activities of oil companies in Niger Delta for the spate of attacks on pipelines and oil facilities in the region.

    Reacting to insinuations that he was behind the Niger Delta Avengers, a group which claimed responsibility for the attacks on key oil facilities, including the Forcados Crude Export line in Burutu, Delta State, Tompolo said oil servicing companies angling for the repair contracts, and not him, were responsible for the attacks.

    In a letter to President Muhammadu Buhari, Tompolo assured that oil multinationals and their service firms had nothing to worry about him because he was reformed.

    He said: “I wish to appeal to the servicing companies to go about their normal operations, particularly the repair of the Forcados 48-inch pipeline, which is key to our economic stability.”

    “I have said I will not resort to violence because of my case with the Economic and Financial Crimes Commission (EFCC) or to wage war against the Federal Government, as my legal team is working towards the resolution of the issue. I pray God should see me through these trying times.

    “It is unfortunate that I am accused of pipeline vandalism, despite my statements to deny involvement in the renewed hostilities in Niger Delta. Since the declaration of the Presidential Amnesty Programme (PAP) by the late President Umaru Musa Yar’Adua in 2009, which I wholeheartedly embraced and accepted, I had sworn not to be part of any arms struggle, either overtly or covertly.

    “Most Nigerians are aware of the role I played in safeguarding and protecting crude oil and gas facilities during the last administration; I am still interested in doing so for the love of country, humanity and out of patriotism. It is worthy of mention that as I was protecting oil facilities, I incurred the wrath of pipeline vandals and illegal refinery operators; till now some of them are still angry with me.

    “Therefore, it is worrisome for security agencies to link me with such people who are still angry with me. It would be recalled that when I founded the defunct Movement for the Emancipation of the Niger Delta (MEND) at the peak of the Niger Delta agitation for a better living for the people, I did not mince words. So, if it was me that is behind the Niger Delta Avengers, I would have come out openly to claim the leadership.

    “I am a man of my word. Therefore, I should be taken as such by security agencies. It is unfair to link me with this new militant group, which I do not agree with, in terms of its philosophy, ideology and mode of operation. I am not a part of the Niger Delta Avengers.

    “Let it be known that I am proud of my achievements through non-violence advocacy since the enthronement of the 2009 Presidential Amnesty Programme for the Niger Delta region, particularly in the coastal areas. For instance, the establishment of the first maritime university and a dock/ship building yard and other good things.

    “I make bold to say that I have attracted more development to the Niger Delta region than my traducers. Therefore, it is unreasonable and unimaginable to associate me with any person(s) or group involved in pipeline vandalism and other criminal activities in Niger Delta.”

    Tompolo urged President Muhammadu Buhari and the Federal Government to look inward in the search for masterminds of recent attacks.

    According to him, his party men in Bayelsa State were getting agitated over lack of political patronage.

    He said: “I am aware of how such persons are chasing the Minister of Petroleum for State, Dr Ibe Kachikwu, around. I advise the Federal Government to investigate some of the servicing companies engaged in repairing damaged pipelines; sabotage on their part is not ruled out. Some of them may not have the capacity to carry out such repairs, but must have worked their way to get the contract in connivance with people in the corridor of powers, and turn around to tender the security situation in the Niger Delta as an excuse, as they are being paid ‘down time’ payment.”

  • Oil firms to provide forex for petrol importation, says NNPC

    Oil firms to provide forex for petrol importation, says NNPC

    The Nigerian National Petroleum Corporation (NNPC) yesterday said that companies  in the upstream oil and gas sector are to provide foreign exchange for the importation of petrol into the country.

    The Group Executive Director/Chief Operations Officer, Downstream, Mr. Henry Ikem-Obih broke the news after inspecting the sale of fuel at some Abuja petrol stations.

    This is coming as the NNPC announced that Nigeria’s three refineries will begin production this month.

    On measures to tackle the scarcity of foreign exchange for marketers in order to enable them import products considering the recent second quarter allocation given to the oil dealers, Ikem-Obih said: “As you know, forex was one of the prime reasons why we didn’t do well in the first quarter. Most marketers who had allocations could not import because they couldn’t access forex.

    “The minister has worked very closely through his own initiatives with the upstream oil companies. So, we have a number of them onboard with us and they will support the local entities and downstream companies.

    “They will help provide forex for the downstream companies to import and meet their PPPRA allocation. So, through the Central Bank of Nigeria, NNPC will support importation of fuel in the second quarter and the oil companies too will work with us. With this combined efforts, we hope we will be able to meet the import allocation for Q2.”

    Ikem-Obih also noted that Nigeria’s three refineries would begin production this month, adding that they would produce locally refined petrol.

    He said:  “Most of the work being done at the refineries are on site, that is, just getting them ready to start cracking crude so that they too can start contributing to the pool of the amount of fuel we have to distribute across Nigeria. We have to ensure that within the month that we have some local refining contributing to the amount of fuel we have to distribute across the country.

    “The work will be across the three locations and they are all at various stages of start-up. And in terms of moving them to their optimal yield, there is a lot of work going on and we are hoping that within this month of April we will also have locally produced fuel as part of what people are buying at the pumps.”

  • Youths demand CSR from oil firms

    Youths demand CSR from oil firms

    Youths, under the aegis of the Ibasa/Ijegun Egba Youth Movement, in Oriade Local Council Development Area, yesterday protested against the alleged degradation of their community by some oil companies which operate their depots there.

    The youth said some of the oil firms which have been operating in the community for nearly a decade have done nothing to improve the community.

    Dressed in white T-shirts, the protesters sang, danced and carried placards with various inscriptions such as “Cooperate Social Responsibility is key”; “GMB, come to our rescue”; “Ibasa/Ijegun cry for justice”; “This is inhumanity”; “Ibasa/Ijegun Egba is one community”, among others.

    The youth condemned the companies’ divide-and-rule game, insisting that it was time for the companies and the host community to sign a Memorandum of Understanding (MoU) for peaceful cohabitation.

    Their spokesman, Semiu Babatunde Akinyanmi, said it was unfortunate that the companies pay taxes to state and federal governments but abandoned their host community.

    Being a coastal community, Akinyanmi said fishing and mat making have been the people’s mainstay. He lamented that the contamination of the ocean through toxic waste discharged by the companies has left their parents, who are mostly fishermen, jobless.

    “The oil companies discharge toxic waste into the lagoon, which kills our fishes. As a result, our fathers can no longer fish. They now serve as non teaching staff in schools.

    “Besides, the daily movement of heavy duty trucks has destroyed our roads and made them non-motorable.”

     

    A youth, Sunday Lawal, said: “We are the youth of this community. All we are saying is that we don’t want money. We want development in our community and employment for us youths. When they initially came, they promised us schools and hospitals but up till today, we have not seen anything yet.”

    A spokesman for one of the oil companies said: “I’m in a tight corner to respond to this.  You can come to the depot and ask for the community relations officer.”

     

     

  • Reps to investigate Agip, other oil firms

    The House of Representatives has resolved to investigate the state and age of the operational equipment of oil- producing companies in the country.

    The resolution, which was passed sequel to the adoption of the prayers of a motion by a member Goodluck Opia (PDP-Imo), is meant to reduce the spate of oil spill and environmental pollution in the Niger Delta region.

    While arguing on the need to investigate oil pollution in Ohaji-Egbema and Oguta Local Government Areas of Imo state, the lawmaker described the affected areas as operational base of Agip Oil Company.

    He pointed out that the areas suffered avoidable oil spillage and fire explosions.

    According to him, there is the need to investigate the state of equipment used by Agip Oil Company in its 50 years of operations in the communities.

    Opia told the House that “virtually all oil companies operating in the Niger-Delta region use substandard and outdated equipment that are unsafe and pollute the environment and they also have little regard for the safety of lives and property of the host communities.”

    While supporting the motion, another member, Aliyu Magaji (APC-Jigawa) said there was need to constantly monitor activities of the oil companies to ensure compliance with the extant laws regulating their operations.

    Magaji said: “There is need to find out if these oil companies are actually doing what they are supposed to do.

    “There is also need to ensure their facilities are monitored to guarantee they are up to standard and this is crucial in averting poor maintenance services.”

    However, Lovette Idisi, (Delta-PDP) cautioned that it would be judgmental to state that the equipment used by Agip Oil Company are obsolete, adding that it would be putting the cart before the horse as the proposed investigation was yet to commence.

    Speaker Yakubu Dogara in his ruling said the investigation into the remote and immediate cause of the incident will be carried out by an ad hoc committee to be set up by the House.

    The committee, he said, will also investigate damages caused to the host communities and determine the state of operational equipment used by Agip Oil Company and other oil producing companies in the affected areas.

    The committee has four weeks to report back to the lower chamber.

  • Wike urges major oil firms to develop host communities

    Wike urges major oil firms to develop host communities

    Rivers State Governor Nyesom Wike has urged major oil companies in the state to give their host communities a sense of belonging.

    The governor enjoined the Management of Shell Petroleum Development Company (SPDC) to include Rivers State indigenes in the sale of its oil wells to investors.

    Wike spoke yesterday in Port Harcourt, the state capital, during an audience with SPDC management. The governor noted that the nonchallant attitude of some oil companies to the development of their host communities bred distrust and conflicts.

    He said records showed that SPDC had not been partnering the state government to develop projects for its host communities.

    Wike advised the company to change its approach to enhance better community relations.

    He said: “It is imperative for oil companies to contribute to the development of their communities. Some people say these companies are not interested in their host communities because they are more concerned about themselves.  Let the communities living around the areas where you operate have a sense of belonging.”

    Wike said he had received unconfirmed reports that SPDC workers paid their taxes to another state.

    The governor said it would be unfortunate if that was true, adding that SPDC should resolve any issue in such areas.

    He assured the management of SPDC and other companies operating in the state of tight security to enable them carry out their legitimate businesses.

    According to him, the state government had concluded plans to ensure the receipt of the two armoured helicopters ordered by the previous administration for aerial surveillance of oil fields to prevent crude theft.

    Wike said it was important that qualified indigenes were  given the opportunity to buy into SPDC, since the company sells its onshore oil wells  to go offshore.

    The governor noted that the involvement of Rivers State indigenes in the ownership of SPDC would strengthen the bond of both parties.

    SPDC’s Managing Director Osagie Okunbor called for the sustenance of the 50-year-old relationship between the company and the state government.

    He urged the governor to enhance the security of the company’s workers and investments across the state.

    Okunbor assured that SPDC would continue to invest in its host communities to promote a better working relationship.

  • Anxiety as Imo moves against oil firms over N40b debt

    AIl companies in Imo State are in jitters  following a bill passed by the House of Assembly asking them to pay N40 billion tenement rate and other statutory revenue owed the state since 1978.

    The people have lauded the bill, accusing the firms of fraud. They said such moves would boost the state’s Internally Generated Revenue (IGR).

    The companies were mandated to offset all outstanding debts for their exploration activities in the last 37 years.

    Reacting to the bill, a senior official with one of the indigenous firms, who pleaded for anonymity said the bill was coming at a time the companies were struggling to remain in business because of the fall in oil prices.

    According to him, “in the last 37 years, the firms have enjoyed a cordial relationship with the state, especially the host communities, and I can say that we have tried to live up to expectations in the area of Corporate Social Responsibility.

    “But this development may throw spanner into the existing relationship. Granted that some companies may have defaulted in their contractual commitments, but the bill is coming at a wrong time when the companies can barely pay salaries”.

    The bill has however continued to receive commendation from indigenes.

    Stanley Onwere described the bill as an indication that the House of Assembly is determined to recover all that the state had lost to investors because of the absence of proper legislation.

    He commended the lawmakers for living up to the people’s expectations. “This is the vibrancy that we expect. The passage of the bill less than three weeks after inauguration shows that the lawmakers are committed to making developmental laws,” Onwere said.

  • Oil firms’ profits hit by crude price

    The drop in big oil companies’ profits in the past eight months isn’t just a function of lower crude prices – it also reflects strategic choices.

    A Reuters examination of corporate filings by some of the biggest players in the industry, including BP (BP.L), Shell (RDSa.L) and France’s Total (TOTF.PA), shows the sensitivity of these companies’ earnings to changes in oil prices has risen in recent years.

    This means that for every dollar the oil price drops, their profits sink more than they might have done five years ago.

    Of course, that wasn’t the plan. Choices made by several oil majors that built more exposure to prices into their portfolio, mainly through the kinds of contracts they opted to sign, was aimed at enjoying prices that were historically high.

    “In simple terms it (oil price sensitivity) has increased and that’s been a deliberate choice,” Simon Henry, Chief Financial Officer at Royal Dutch Shell Plc, Europe’s largest oil group by market value, told Reuters.

    “We took a view that prices were going to go up and that our portfolio was less exposed than it should be in that environment because of the types of contracts we had in place,” he said.

    Shell made the decision in the early 2000s and it took around a decade for that to have a real impact on the company’s bottom line, Henry said.

    In 2009, Shell’s then-CEO Peter Voser said a $1 move in the crude price would shift earnings up or down by around $200 million. In January, Henry estimated the impact of a dollar move on earnings was around $330 million and increasing.

    Brent crude averaged $54 per barrel in the first quarter of 2015 – half of what it was in the same period last year. If the current price holds, the hit to Shell’s pre-tax earnings from the increased sensitivity alone could run to billions of dollars a year compared to what it would have been if the 2009 linkage between profits and oil prices had held steady.

    Filings from Europe’s second and third largest oil groups, London-based BP and Paris-based Total, show a similar trend.

  • $84m compensation opens door for oil firms in Ogoni

    Three months after Shell Petroleun Development Company (SPDC) paid $84million  compensation to Bodo community in Ogoniland, Rivers State for the two operational oil spills that occured in 2008, the community has agreed to open its door to local oil companies intending to carry out production activities.

    The oil company, a subsidiary of Royal Dutch Shell, paid the money within two months starting from December last year to January this year thus puting an end to the issue of compensation to the victims of the.

    The Chairman, Bodo Council of Chiefs, Mene Slyvester Kogbara,  said the community was ready to open its doors to welcome companies with good track records to encourage growth. He said due process shall be followed in selecting companies that will operate in the community. He noted that Shell paid his people in January. The 15,000 indigenes of Bodo community has since received N600,000 each for the loss they suffered as a result of the spills.

    He said companies intending to operate in the area must meet all set down  requirements placed for them by the community. “No company would be allowed to come to the area except we know its directors, management and the history of such company.  We would look at the profiles: where they are coming from, what they set out to achieve, among other vital information that would be of help to them and the indigenes of Bodo community,” he said.

    He said although the compensation had been paid, what is most disturbing is the cleanup of the environment as stipulated in the United Nations Environmental Programme.

    Also, Cerase Environmental Services Limited(aNon-Governmental Organisation) said hydrocarbon pollution and others are attracting global attention because they have social and psychological effects on the people.

    The firm’s Business Development Officer, Gloria Igbaji said stakeholders including Bodo community leaders have attended seminars and workshops organised to sensitise them on the issue. She said the organisation has visited the community to ascertain the level of degradation, and carried out a study to help facilitate cleaning of the area.

    She said: “The clamour by the community for cleaning of the oil polluted areas was borne out of the need to protect their source of livelihood. Cleaning an oil polluted area is not a one-off thing. Cleaning should be systematic and effective to achieve the desired results of making the natural habitats such as land and water useful for socio- economic activities again. Traditionally, the people are farmers and fishermen and inability to recover lands and waters would affect them greatly.

    “Thousands of acres of land have lost their nutrients, making it difficult to grow crops, so also the waters, which have been polluted by oil. This is not without a multiplier effect on the economy of the area.”

    She urged Shell to fast-track the process of cleaning the area, noting that further delay would compound the problems of the people. The condition of the land and water gets messier when wrong chemicals are not applied to treat them, she added.

    “Besides paying damages to the people, the multinational oil companies operating in the area should try and build roads, hospitals, schools, among other infrastructural facilities. The people would waste the money, if there are no socio-economic activities to invest it on. No matter the amount of money Shell has given them, they would remain in poverty if amenities that would improve their lives are not provided, ditto cleaning their land,” she said.

    Shell, in 2010, agreed on an out of court settlement in a case brought against it by the people of Bodo community over the oil spills from the company’s failed facilities, which had caused a damaging effect on the Ogoni environment and its people. This led to the payment of $84 million to the community by Shell as compensation with an agreement to clean the impacted areas.

  • ‘Oil firms must imbibe good governance for efficiency’

    ‘Oil firms must imbibe good governance for efficiency’

    The Executive Director, Corporate & Investment Banking, Access Bank Plc, Elias Igbinakenzua, was a panelist in one of the sessions of the just concluded Nigeria Oil and Gas Conference in Abuja. He spoke to reporters on the sideline at the event on what local oil firms should do to make their projects bankable and have easy access to financing. EMEKA UGWUANYI was there.

    Why is Access Bank interested in oil and gas financing?

    Oil and Gas is our mainstay in Nigeria. It contributes over 90 per cent of foreign exchange to our revenue and it employs the bulk of our people. Any bank that wants to encourage the industry and add value to the economy must support oil and gas. So, as a bank we have been there from inception. We have encouraged players locally as well as the International Oil Companies (IOCs). It cuts across all the chains of oil and gas companies in the downstream, midstream and upstream.

    Access Bank is one of the well capitalised Nigerian banks that have the wherewithal to support the Nigerian oil and gas industry. In terms of governance, we have the right framework to access the risks, dimension them and know the extent to go. We have also been able to help our clients to understand the risks and know how to perch against them. So, we are a core player and we think that as a key Nigerian stakeholder, we must play big in the oil and gas industry.

     You emphasised lack of corporate governance as an impediment to funding of projects. What are you doing to make indigenous firms incorporate this in their system?

    The theme of the panel session was actually to look at the independent oil companies and success recorded so far and then accesses the future. For you to sustain participation for a long term as a going concern, you must imbibe good governance. This will help to determine how to organise your activities, what risks to take and how to mitigate the risks. A player cannot attract the bank’s attention if he does not have a structure that is observed and examined as transparent and operating in line with global best practices. So, we think that for our local players that want to grow big, they must embrace good governance. We have done that for a number of players. We have actually tried to make them understand the need for governance. We have also called external parties to assist them to put the right structure in place and have good governance. This form of assistance by Access Bank has encouraged a good number of indigenous players.  It is not about coming to borrow, but when they come to us, we help to put their companies in the right perspective to follow good steps as a player for the long run.

    What are you doing to collaborate with the Department of Petroleum Resources (DPR), to address  theft  of crude oil from pipelines owned by the international oil companies (IOCs), but used by indigenous players, and the impact on cost per barrel?

    I talked about global best practices and must look at where we are going to operate as firms with the best practice, where is the deal trend that we should all focus on? Today, we have inefficiencies in the system and we can’t live and be okay with that. We want to identify what is making our production less efficient and see how we can team up and reduce the inefficiencies. When we say oil is costing $15 per barrel to produce, we are talking about removing the associated costs responsible for the inefficiency such as the militancy in the Niger-Delta, the issue of down times and all that. After the removal of these undetermined cost elements, we can then say what is the optimum production cost per barrel?

    That is what we are aiming to achieve. If you look at the cost issue, Saudi Arabia is producing for less than $10 per barrel. Even Ghana here, the cost of production per barrel is not as high as the cost production of oil in Nigeria. So, a lot can be done. I am not blaming the oil companies for what we have today but I am saying as a system we are still inefficient and we must work together to minimise inefficiency so that we can have a going concern that is sustainable.

    While speaking at the panel session, you said your bank has a window that will it do more than 10 per cent funding in the oil sector. Please expatiate on this?

    I didn’t say 10 per cent. The Central Bank of Nigeria (CBN) during the last quarter of last year issued a circular that banks total loans to the oil and gas sector should not exceed 20 per cent of their portfolio. Before then, the policy was that a bank could finance 20 per cent downstream, 20 per cent midstream and 20 per cent upstream. And because the circular was issued towards the end of the year, virtually all the banks could not comply with that policy. The CBN had to suspend the policy for now. So, as at today the old policy is still what is applying which means as a bank, you can lend 20 per cent downstream, 20 per cent midstream and 20 per cent upstream. The limiting factor today is the bank’s single obligor limit. That is to say, a bank cannot lend to one obligor, 3 per cent of the shareholders’ fund. And today we have banks that have up to N500 billion of the shareholders’ funds. So, they can lend up to a N100 billion if a particular bank so desire to lend to one obligor. That is why I am saying the banks today have the capacity. The CBN two weeks ago said Nigerian banks are well capitalised, that shows that Nigerian banks are actually strong enough to support the sector. We are ready, provided there is good governance.

    The CBN is worried over banks exposure to the energy sector – the power and the oil and gas sector and that you should reduce your exposure to the industry…

    Yes and rightly so because the oil and gas and the power sectors have issues right now. You are aware of the drop in crude prices and if an oil company is not efficient, then the drop in price of crude can make their loans to start going bad. So, if banks have not gotten their borrowers to hedge their risk, then they are exposed. And once a bank goes down, it affects the entire industry because there is what we call the ‘Contagion effect.’ We have banks that are called all CPs and non-Cps, the ones that are considered to be very important in the system. If anyone of the CPs is brought down because of oil and gas then the whole industry will have a contagion.

     Why then do you think that the current slide in oil prices is an act of God?

    No, what I was trying to say is that sometimes things are allowed to happen by God because they will teach you a lesson that you needed to learn. We are too dependent on oil as a nation. Like I said, the whole of Africa, we have only 8 per cent of the global oil reserves and Nigeria has 2.25 per cent of the reserves. So, why should that 2.5 per cent be our sole focus? It should be one of our resources. We should have a way of having a broadened income base for the economy. It calls for a rethink.  For instance, to say that we are too reliant on oil, let us think of agriculture and other areas where revenue can be earned as a nation.  That way we are better for a long run as a nation.  So, to that respect the slide in oil price is a blessing in disguise.

    Aside the corporate governance, especially in the power sector, what are your observations and what advice do you have for them?

    Power is a different issue. I don’t want to go into power because it involves a lot of issues with government doing their own part.  But I think what banks want to finance are bankable projects. Bankable implies that the risk that they can see is mitigated. In this case, the bank will tell the customer that look I can’t see my way in and out so I won’t lend to you as a customer. But note that the money banks are using to trade is not their equity, they are funds from depositors. The bank is expected to pay customers back as at when required. So, banks can’t risk their deposit so much. They must ensure that they have enough skills to appraise the risks in any sector and know the extent to go such that when depositors come and ask for their deposit they can easily pay them without controversy.

    Concerning banks ability to finance a project worth $500million, can you respond to a request from any indigenous firm asking for this amount to finance a single project today?

    Again let me restate what I said. I said some banks have enough shareholders fund to support lending half a billion dollars to any project. Access bank is one of the top four banks in the country today. The bank has huge capital to raise support for indigenous players. Whether we will lend half a billion to a company is a different ball game. I am not sure I will want to sit down today at Access Bank and lend half a billion to an indigenous company. I have a risk structure that I must comply with. In Access Bank, there is so much of good governance that is entrenched. What I do as Executive Director must be sanctioned by my risk and control team. We have a lending policy that is well entrenched in our governance framework that we must adhere to. So, the extent to which I lend must be in line with the law and in line with what I see as risk that I can take.

    What message has Access Bank  for Indigenous operators?

    There is very bright future for the indigenous producers. Nigerian banks are willing and able to support them, provided they put in place the right structures that will ensure good governance that optimises production and enhances efficiency.

     

  • Oil firms seek increase in gas price

    Oil companies, especially those that supply natural gas for domestic use, have urged the Federal Government to increase the price of gas from $2.50 per 1000 standard cubic feet (scf) to between $4 and $5 per 1000scf, to boost investments in the sector.

    Managing Director, Frontier Oil Limited, Dada Thomas, told The Nation that gas price is too low to stimulate investments in the sector.

    “At that price level, you will generally have an economic gas project that lenders will be willing to lend you money and it will ensure you generate reasonable profit that would ensure you can pay your staff well. You don’t have profitable business at $2-$3 per 1000scf. A typical gas project costs at least thrice the cost of oil project. Gas is a good long-term business but it doesn’t provide you with huge income but a steady annuity,” he added

    Frontier Oil is the owner of the Uquo marginal field located in oil mining lease (OML) 13 in Akwa Ibom State. It is among the 24 marginal fields given out during the Federal Government’s marginal fields bid round in 2003. But eventually, the field turned out to be a gas field with little crude oil.

    Thomas said: “Uquo Field is primarily non-associated gas field. We are hoping that we can grow within Uquo organic golden reserves and demonstrate to the Federal Government that their faith in the marginal field programme was not unjustified because we are increasing Nigeria’s reserves. We don’t know by how much but we are hoping to define the figure in the next few months.

    “We have a plan with our partner, and are capable of doing 200million standard cubic feet per day (mmscf/d) of non-associated gas. In November 2014, we were doing about 25mmscf per day and we are selling it. Right now, we are doing 80-100mmscf per day. By end of March, I’m hoping we will be doing about 135mmmscf per day. Our two current contracts are selling gas through our partners to Ibom Power Plant and Calabar NIPP Power plant.”

    The Managing Director of Seplat Petroleum Development Company Plc, Mr. Austin Avuru, also said that despite the low pricing of gas now, the company saw a future in gas hence it is investing in the sector. He noted that the cement plant alone gets low volume of gas because of inadequate supply. Some companies that supply directly to local industries sell at $5 per 1000scf. So we saw a future in gas and if we will achieve the kind of electricity generation we dream about, we knew that we will be looking for some 3 trillion cubic feet (tcf) of gas in the next 10 years and somebody has to supply that.

    He stated that as operators, they have seen gas price go from 7 cents to 70 cents, $1, $1.5, and now $2.5 for 1000scf. “At least that is the minimum for power plants. In fact, the arms length agreement we negotiated with government on gas against 2017, is actually at $3 per 1000scf and if you manage to supply to industry, you could get $4. For us we see beyond 2017 prices averaging about $3 per 1000 scf, and that is good enough to justify the investment in it,” he added.