The Nation Newspaper

Tag: oil industry

  • ‘Nigeria’s oil industry issues beyond low crude price’

    To players in the oil and gas industry, aside the slump in the global oil price, there are other issues. They include economic insecurity, funding challenges and renewed insecurity in the Niger Delta, as well as low reserve replacement ratio (RRR), high and uncompetitive production cost.

    The oil industry operators spoke at the January Technical and Business meeting of the Nigerian Association of Petroleum Explorationists (NAPE) in Lagos.

    NAPE’s President-elect Mr. Abiodun Adesanya, who presented a paper titled: Current realties in the upstream sector of the Nigerian oil and gas industry, said discoveries were low when measured against production, adding that gas development is also not at the level that it is supposed to be as production cost is put at $29 per barrel.

    He noted that due to oil price crash, there is a shortfall in foreign exchange (forex) because 95 per cent of Nigeria’s forex earnings come from crude oil. Gross Domestic Product (GDP) from the industry, according to him, dropped from 6.3 per cent in 2014 to 2.8 per cent in 2015, adding that about 120,000 direct and indirect jobs have been lost to the market situation while more layoffs are imminent.

    Adesanya, who is also the Managing Director of Degeconek, an oil service firm and sponsor of the meeting, said there was a 53 per cent drop in Nigerian National Petroleum Corporation (NNPC)’s cash call payment to the Joint Venture (JV) operations between 2005 and 2015.

    The drop in cash call obligations by the NNPC, according to him, led to a 62 per cent drop in JV production that is currently masked by Production Sharing Contracts (PSCs) production. It also played a part in decline of crude oil production from 2.3 million barrels per day to 2.1million barrels per day in over the same period.

    He said the renewed security situation in the Niger Delta should be a source of worry to stakeholders because immediately after the last election violence, insurgency, security threats, pipeline vandalism, illegal oil bunkering, kidnapping and hostage-taking including proliferation of illegal refineries reinforced.

    He urged the Federal Government to address low reserve replacement ratio issue and increase oil reserves to 40 billion barrels and achieve production of three million barrels per day. “Government needs to focus on stabilising production by identifying low hanging fruits that require low cost workover/remedial operations. Reduction in capital expenditure will come from reduced spending on exploration, facility construction.

    “Embrace gas development; identify distressed or underperforming assets by isolating assets, which may be falling short due to investment assumptions that no longer hold true. Focus on high performing assets to maximize production,” he added.

    The former Managing Director, Conoil Upstream Company, Mr. Ebo Omosola, said that the profit currently  is in the petrochemicals, noting that if Nigeria must stop export of its crude, make the refineries work; the country will make more profit from hydrocarbon exploitation than the trending export of crude oil.

    He urged the Federal Government to stop exporting its equity crude and refine it locally because it is more profitable to refine locally than export the crude and import only few products like premium motor spirit (PMS), Automotive Gas Oil (AGO) and Household Kerosene (HHK) and aviation fuel.

    He stated that with the re-entry of Iran into the crude oil market, oil export is becoming less attractive. He said: “If you produce the crude, where is the market to sell it. Iran is back, Saudi Arabia is not relenting, Russia and United States (U.S) are also pumping, so where is the market? The U.S has stopped crude export for over 40 years and they consume all they have been producing all these years and even imported some. Nigeria is not addressing the problem of drop in crude prices as it did in the past.

    “We need improved metering and monitoring of what goes into the pipelines. People announce figures of what was the cost to vandalism, but they have not been factual. The government must do more to meter oil flow from stations.

    “The reality is that crude oil price may not go beyond $45 per barrel. In the last 50 years, crude oil price was highest in the last five years. Now that the reality has set in, companies must reduce operating cost to stay afloat and re-negotiate with contractors. It is obvious that crude swap is the biggest damage to this country, and maybe it is time for the government to stop selling its equity crude but rather refine locally and value.”

    The General Manager, Joint Venture, Seplat Petroleum Development Company, Dr. Mason Oghenejobo, stated that because Nigeria sees crude oil as source of revenue and not energy, that is why the current reality is badly affecting it.

  • Local players and best practices in Nigeria’s oil industry

    The ongoing struggle for Oil Mining Lease (OML) 42 acreages between Neconde Energy Limited and the National Petroleum Development Company (NPDC) has appeared in the media often, lately. The NPDC has in recent time tried to deny Neconde the operatorship of the OML 42 it acquired in 2012. NPDC’s persistent call for the reversal of the award of the operatorship of OML 42 which was acquired by Neconde Limited is indeed suspect. Still, it brings to focus, a need to explicate NPDC’s excesses, as it appears incapable of coping with best practices among local players in the oil industry.

    Neconde, the company being dragged into dispute by NPDC, is a Nigerian Exploration and Production (E &P) firm which started its operations officially in December 2011. Its current joint venture with NPDC on OML 42 is a large license, containing previously discovered oil fields in the Niger Delta area. This lease was acquired from Shell Petroleum Development Company in November 2011. OML 42 is 814 square kilometre lease originally awarded  in 1962. Initial production commenced in 1969 and aggregate production from the five fields discovered within OML 42 reached a peak of approximately 250,000 barrels of oil equivalent per day (bopd) in the 1970’s. Production, which was primarily oil, continued until the first part of 2005 when the producing fields were shut-in due to security issues in the Niger Delta. Production at the time of the shut-in was more than 50,000 barrels of oil per day (bopd) and more than 80 million cubic feet per day (MMcf/d) of natural gas.

    On OML 42, there are five fields and numerous wells. Some of the fields located in OML42 include; Odidi Field, Jones Creek, Batan Field, Egwa Field and associated facilities. The current production from OML 42 is approximately 10,000 bopd, and still growing. Noteworthy is that, output in OML 42 was 15,000BOPD when the Sales Purchase Agreement was concluded between Shell and Neconde in mid-2011. As of April 30, 2013, roughly two years after, the production was 13,241bopd. It is evident that the relationship between companies it entered into partnership has not been smooth.

    Recently, the NPDC branch of the Petroleum and Natural Gas Senior Staff Association (PENGASSAN) embarked on a limited two hour per-day strike between May 4 and May 11. The strike action was supported by arguments through advertorials on the pages of some newspapers on Monday, May 11. It expressed that Neconde was not competent to operate OML 42 which it bought for a purchase price subject to closing adjustments of $585 million from Shell, of which $435 million was paid by consortium partners, with the rest of the $150 million of the total purchase price funded through Neconde debt financing.

    How does anyone compare the commitment of NPDC to that of a private investor, who after scouting around the world to buy acreage with such a huge amount, would not want to perform well?  The truth is, if NPDC potentials were to be optimal, the likes of Neconde, Seplat and others would not opt for operatorship, as it would imply reduced cost on staff overhead. Mindless of the several arguments being propagated by NPDC in the media, even a layman understands the culture of lack of ownership prevalent in the Nigerian public sector. It is only imperative that Neconde and other private investors will invest in the best competent technological advancement, as its business profit has to be won. This contrasts NPDC with nothing at stake, but a management whose major interest is to find contractors that will allot rewards from awarded contracts.

    During the strike action by the NPDC branches of PENGASSAN and NUPENG over the transfer of OML 42 to Neconde Energy, about 100,000 b/d of NPDC’s oil production was shut down. This shows a flippant handling of national assets. The strike even resulted on a near blackout in the nation, because they also shut operations of the very important Trans Forcados Pipeline (TFP), where the vital associated gas, needed for processing and distribution to the nation’s many thermal power plants.

    Evidently, NPDC appears not to have lived up to its responsibility of “development” – which the dictionary explains as, “improving by expanding, enlarging or refining.” Rather the recent fight over easing operatorship is unsettling, and ironic, regarding that its ineptitude was the reason the government had earlier withdrawn operatorship from NPDC and offered Joint Operatorship Model (JOM), based on a recommendation by the DPR to the former Minister of Petroleum Resources, Diezani Alison-Madueke.

    For instance, its underproduction is evident in the Shoreline Natural Resources acquired OML 30, which has nine flow stations with a conglomerate production of capacity of 395, 00 barrels of oil per day (bopd). It include the flow stations Afiesere, 60,000bpd; Eriemu, 30,000bpd; Evwreni, 30,000bpd; Kokori, 90,000 bpd; Olomoro- Oleh, 60,000bpd; Oroni, 30,000 bpd; Osioka, 15,000bpd; Oweh, 30,000bpd and Uzere West, 60,000bpd.  Under NPDC, the current operatorship is around 53, 000bpd, with 342, 000bpd largely unexploited. The entry of indigenous private firms was suggested as a way to bolster production and exploration.

    In 2011, NPDC was assigned 55% equity assets divested by Shell, while it retained operatorship of OMLs 4, 26, 30, 34, 38, 40, 41 and 42—which is most of the assets. Yet, the corporation underutilised all oil fields under its control, which in effect caused a downturn in the nation’s oil and gas industry.  The emergence of local players like Seplat, Neconde, Elcrest, Sapetro, is very vital to the process of injecting new competitive edge in the upstream and increase production.

    As it appears, NPDC prefers to act as a clog in the wheel of this partnership. It is indeed interesting that NPDC which operated OML 42 unproductively until the Neconde takeover would be the candidate to point out underproduction, which is rather incongruous.

    Currently, 10 per cent of Nigeria’s gross production is still local, and this number will increase, with the increasing production of indigenous companies. Seplat for instance, which fortunately was not dragged into the partnership with NPDC has reported about 60, 000bpd of production from OML 4, OML 41 and OML 38, formerly owned by Shell, which include the Oben, Ovhor, Sapele, Okporhuru, Amukpe fields. Before the divestment, these assets produced 30,00bpd. The company continues to increase its production in each operation. Earlier in the year, despite industry downturn, it added 40 percent working interest in OML 53 and an effective 22.5 percent working interest in OML 55 in February. These assets will, in the future, add materially to the company’s production base and provide options for further development.

    To make accusations that Neconde seeks to place national assets in a few private hands is ironic, especially as NPDC is well-known in the industry for its management which benefits from contract awards as operators of OML.  On close study, it appears NPDC’s little impact in the increment of production and efficient management of Nigerian oil wells and facilities makes it dread that its incompetence might become even more glaring, should Neconde take full responsibility of OML 42, hence the recent mudslinging.

    It is imperative to note, that NPDC’s clamour for a reversal of the OML 42 award might not be in the best interest of the nation, and it should be not be allowed to undermine the possibilities and success achievable by private investors. NPDC must not be left to use its position as a “national” auxiliary to intimidate a legal company which underwent a transparent screening for a business deal, so that the continuous rise of best practice local player in the Nigerian oil and Gas industry, can bring about the awaited revolution. Also, this might be the time to examine the rot and inadequacies which is prevalent in NPDC, and review the resulting effect on the economy, from the expansion of indigenous technological expertise to the creation of new and local financing opportunities in Nigeria.

    “Ambode’s entry big-bang may well be the delivery of the light rain mass transit, which Tinubu conceived and Fashola had been working on”

     

    • Olaleye, an Oil and Gas expert writes from Abuja.

     

     

  • How to get results from oil industry via the law

    Indeed, I feel highly honoured by the invitation to review this reference book ‘Nigerian Laws, Cases and materials on Oil and Gas’ written by my friend and colleague Niyi Ayoola-Daniels  Esq.

    Perhaps before I delve into my primary assignment, I will start by sharing with you what motivated the author to embark on the publication of this book. In my discussion with Niyi sometime in 2005, he told me of an indirect challenge thrown at him by two American Investment attorneys whom he met at Columbia University Law Library on a visit to New York. These New York Attorneys requested to know if there was a one-source publication where they could obtain up-to-date information on the complete laws and regulations governing Nigeria’s oil and gas industry (upstream, midstream and downstream).

    They claimed to have contacted the Nigeria Consulate in New York and the Embassy in Washington but without any useful and positive outcome. It was upon his return to Nigeria and after our discussion during which he got to know that I was the author of the book “Petroleum Development Contracts between Nigeria and the Multinational Firms” that he decided to respond to this challenge of producing this unique book that is being  publicly presented to you here  today.

    You will all agree with me that Nigeria’s oil and gas legal regime is a specialised area of law, regulating the exploration, production and transportation of crude oil and natural gas, the supply, distribution, storage and marketing of petroleum products, as well as liquefied natural gas. As diverse as the area of coverage, so diverse is the legal regime governing same in the form of statutes, cases, subsidiary legislations and regulations.

    In other words, there has been no one one-stop compendium containing all these laws and cases until now. This is what makes this book unique. The book is unique in the sense that unlike those written by earlier scholars and experts in the field, it goes one step further. It is a one-stop digest of Nigeria ’s oil and gas laws, regulations, relevant cases, materials and commentary and is therefore a welcome addition to the existing works on the subject. Indeed, the book covers laws governing the entire legal regime regulating the upstream, midstream and downstream operators of Nigeria ’s petroleum and natural gas industry.

    In content and form, the book is broadly divided into two volumes. Volume One is composed of five parts whereas volume 2 comprises 11 parts. The work is published in loose leaf form which covers the 16 parts and gives complete outline, comments and indexes to all the laws, statutory instruments and judicial decisions. Almost all oil and gas cases decided by Nigerian courts are adumbrated in this work and their relevance highlighted. One great advantage of this loose leaf format adopted by the author is that new changes or amendments in the laws or statutory instruments affecting Nigeria ’s oil and gas industry can easily be incorporated into the pertinent sections of this work by the user. I understand the author will periodically publish updates of the new laws, amendments of statutes, cases and other materials and make them available to subscribers. These updates will then be periodically inserted into this work by the user and the old or outdated ones removed.

     

    Legal framework for Fed. Govt ownership of oil and gas resources, including exploration and production rights available to investors

     

    Part 1 deals with laws and regulations governing Federal Government ownership of oil and gas resources in Nigeria . This part also captures the judicial interpretation of Federal ownership of oil and gas resources including the extent and size of such ownership in the well known “Resource Control” case involving the A.G Federation V A.G Abia State (N0. 2) (2002) 6 N.W.L.R Part 764 pages 542-905, ET this case, the Supreme Court interpreted many oil and gas issues including the determination of the seaward boundary of a littoral state within the federation of Nigeria for the purpose of computing the revenue accruing to the Federation Account directly from oil and gas resources in those littoral states

     

    Legal framework for evacuation and transportation of Nigerian crude from oil fields, including shipment (export/domestic)

     

    The focus of this part  is on the laws, regulations, cases and materials governing evacuation, transportation including shipping of crude oil in Nigeria from oil fields to storage tanks via Pipelines and Oil Terminals. Also covered here are the laws and regulations on transportation of crude oil by Ocean Tankers as well as Domestic Coastal and Inland Shipping (Cabotage) of crude oil and other ancillary services. The author is of a strong view that the scope and applicability of the “Cabotage” Act in Nigeria covers both upstream (domestic carriage of crude oil) and downstream (domestic carriage of  petroleum products).

     

     Legal framework for Nigeria – Sao Tome and Principe joint development of petroleum resources including exploration and production rights available to investors in the joint development zone

     

    This part focuses on the laws and regulations governing Joint Development of

    Petroleum and Natural Gas between Nigeria and Sao-Tome and Principe in areas of Exclusive Economic Zones of the two countries. Covered here are the principles of Joint Development Zone (JDZ) including the legal status of JDZ Treaty in Nigeria as well as guidelines for bidding for petroleum blocks in the JDZ and petroleum exploration and production rights available to JDZ investors.

     

    Legal framework for National participation in petroleum operations including the role of NNPC

     

    The focus of this part  is on the law governing Federal Government’s direct participation in Petroleum and Natural Gas operation in Nigeria especially the role of Nigerian National Petroleum Corporation (NNPC). Here the Laws that brought about the acquisition by NNPC of all shares, rights including petroleum exploration rights formerly held by Shell British Petroleum Company Limited

     

     

    Legal framework for petrolem profits taxation and other taxation in Nigeria including royalties and fiscal incentives

     

    This part   covers the law on taxation of companies engaged in upstream petroleum operations (Petroleum Profits Tax Act). This Act contrast sharply with Companies Income Tax Act as amended, which is a law regulating taxation of companies engaged in downstream oil and gas operations (marketing, distribution and sales of petroleum products and natural gas). This part highlights more than 30 headings regarding petroleum profits tax issues including their judicial interpretation. Of special note here are the decisions of the Supreme court of Nigeria in Shell Petroleum Development Company Limited V. Federal Board of Inland Revenue (1996) 8 N.W.L.R Part 466 page 256 on meaning of ‘Petr0leum Profits Tax’ and ‘Petroleum operations’ and Gulf Oil Company Limited V. Federal Board of Inland Revenue (1997) 7 N.W.L.R Part 514 page 535 on

    computation of‘ chargeable tax payable under Petroleum Profits Tax Act. Also discussed in this part is the Court of Appeal decision in Texaco Overseas Nigeria Petroleum Company V. F.B.I.R (1997) 4 N.W.L.R Part 501 pages 511.

     

    Legal framework for natural gas development and utilisation in Nigeria, including the West African gas pipeline project.

     

    The theme of part six is Natural Gas Development and Utilisation (upstream). And since the proposed law on downstream gas operations in Nigeria is still a bill awaiting passage in the National Assembly, downstream gas operations is not discussed in this work. It is in this part that the West African Gas Pipeline Project Act and Regulations are covered including the legal status of West African Gas Pipeline Project.

     

    Legal framework for downstream petroleum sector covering supply, distribution, storage and

    marketing of petroleum products

     

    The focus of part seven is on the laws and regulations governing downstream petroleum sector in Nigeria , (excluding gas). This part covers the legal framework for the supply, distribution, storage, marketing and sales of petroleum products including the laws governing the construction of Refineries, Pipelines as well as importation and exportation of petroleum products. Covered in this part also are the activities of Petroleum Products

    Pricing Regulatory Agency (PPPRA), uniform rate/prices of petroleum products including activities of Petroleum Equalization Fund (PEF) and the Petroleum (Special) Trust Fund (PTF).

     

    Legal framework for managing environmental pollution and

    spillage in Nigeria

     

    The concern of Part Eight is with the laws and regulations affecting environmental pollution and spillage in the oil and gas industry. This part covers the laws on Federal Government’s policy on National Oil Spill Contingency Plan. Also covered in this part are the laws regulating the obligation of holders of OPL and OML to adopt measures to prevent pollution of inland waters, rivers, water courses and the Territorial Waters of Nigeria, the Continental Shelf as well as the Exclusive Economic Zone.

     

    Legal framework for transparency and accountability initiative in the oil and gas industry

     

    The theme of this part is Transparency and Accountability Initiative in Oil and Gas Revenue in Nigeria including the powers of Economic and Financial Crimes Commissions (EFCC) to investigate and punish fraudulent manipulation of statement of accounts resulting in wider payment of oil and gas revenue accruable to the Federal Government.

     

    Legal framework for due process and fundamental a principles of public procurement and contract award in Nigeria ’s oil and gas industry

     

    In this part, the work here centers around the laws governing Due Process and Fundamental Principles of Public Procurement in Nigeria’s Oil and Gas Industry especially the application of Public Procurement Act 2007 to all NNPC’s procurement contracts. Also highlighted here is the applicability of Public Procurement Act of 2007 to non-government owned oil and gas enterprises which derive at least 35 per cent of funds appropriated or proposed to be appropriated for any procurement contract from the Federation share of Consolidated Revenue Fund.

     

    Legal framework for oil and gas export free zone scheme in Nigeria

     

    Here the laws and regulations governing oil and gas export free zone scheme in Nigeria is (the focus including the legal procedure for obtaining oil and gas free zone license. A covered under this part are the laws regulating health, safety and environmental matters within the oil and gas free zones.

     

    Legal framework for investment protection and guarantees

    in Nigeria ’s oil and gas industry

     

    The theme of part 12 is Investment Protection, Assurances and Guarantees for companies engaged in oil and gas activities in Nigeria . Also covered here are the laws regulating the activities and operations of Nigeria LNG. This part examines the recent decision of the Federal High Court ( Port Harcourt ) in a case involving Niger Delta Development Commission (NDDC) V. Nigeria LNG (unreported Suit No. FHC/P/CS/361/2007) over

    whether or not NDDC is entitled to receive from Nigeria LNG, 3% of the latter’s total annual budget for the years 2001, 2002, 2003 & 2004 and thereafter.

     

    Legal framework for oil and gas communities in the Niger Delta

    Part 13 focuses on Niger Delta Development Commission Act, the law regulating oil and gas community issues in the Niger Delta area of Nigeria , including its purpose, funding as well as method of rotation of the office of Chairman of the Commission.

     

      Legal framework for human resources development and capacity development in oil and gas industry

     

    The theme of Part I4 is on Human Resource Development and Capacity Building in the oil and gas industry. Here the law establishing the Petroleum Technology Development Fund (PTDF) as well as the Petroleum Training Institute (PTI) is covered in this part.

     

    Legal framework for strategic planning and survellan of oil and gas policies in Nigeria

     

    The theme on part 15 is on strategic planning, surveillance and co-ordination of National policies in oil and gas and other energy sources in Nigeria . Here the law establishing the Energy Commission of Nigeria is covered.

     

     Legal framework for the control and management of oil and gas development funds in Nigeria

     

    This is the concluding part of this work and it focuses on the Finance (Control and Management) Act which is designed to provide legal framework for the control and management of public finances and funding in Nigeria as it affects the control and management of Petroleum Technology Development Fund (PTDF), especially the mechanism for funding, budgeting and disbursement of PTDF including the oversight constitutional powers of the National Assembly as contained in sections 88 and 89 of the 1999 Constitution over PTDF.

  • Firm plans to manufacture umbilical products for oil industry

    Royal Niger Emerging Technologies, an indigenous company, is planning to set up a plant for the manufacture of umbilical products in Nigeria that will be dedicated to the local market, the company’s Managing Director, Anthony Okolo, has said.

    An umbilical is a cable which supplies fluid, power and data to drilling and production equipment. The umbilicals will be manufactured at the company’s facility in Badagry, Lagos.

    Okolo said that the facility is expected to begin operations in the second quarter of 2015, adding that the facility will be capable of receiving umbilical components from multiple manufacturers in a variety of configurations, lengths and materials.

    He said: “The plant will be a key element in ensuring that leading manufacturers of umbilical products are able to meet their Nigerian Content compliance requirements by producing up to 60 per cent of the  tonnage of the equipment in Nigeria while offering benefits of reduced cost in logistics and operations.  The plant will also support after market services including repairs, reeler management and splicing.”

    According to him, the plant will complement the efforts of the Minister of Petroleum Resources through the Nigerian Content Development and Monitoring Board (NCDMB) to domicile this capacity in Nigeria with the intention to limit capital flight of approximately $400 million, which will occur on projects between 2015 and 2018 without the development of this plant.

    An Executive Director of the company, Mr. Ivan Paoli said: “The company hopes the industry will recognise the value this investment will bring in order to level the playing field for those that will be involved in umbilical projects in the future. We therefore, call upon the NCDMB and industry stakeholders to open up dialogue on industry requirements in order to ensure the facility has the requisite flexibility and capabilities to serve the laudable objectives of its inception.”

  • Swedish firm targets Nigeria’s oil industry

    Swedish firm targets Nigeria’s oil industry

    Nigeria’s oil and gas industry may attract a major investment as Alfa Laval – a leading Swedish equipment manufacturer has concluded arrangement to collaborate with an indigenous firm, Jocam Nigeria Limited, to provide parts and maintenance services for all the former’s equipment with manufacturer’s warranty.

    The collaboration will focus on skills acquisition, equipment maintenance and technology transfer to boost growth in the nation’s economy.

    The Managing Director of Alfa Laval, Mrs. Maryne Lemvik, said the company will participate in the upcoming Nigeria Oil and Gas (NOG) conference and exhibition, which will hold at the International Conference Centre, Abuja, between February 18 and 21.

    Lemvik said that Nigeria is a very fast-growing economy and has become globally relevant to equipment makers such as her company. She said: “We see growth and opportunities in Nigeria and we want to be fully involved. Our ambition is to provide for companies in the oil and gas sector a wide range of key solutions designed for increased efficient performance.”

    Established in 1883 with headquarters in Sweden and regional offices across the world, Alfa Laval is a global manufacturer of equipment specially designed for oil and gas sector. Such equipment include systems for liquid/solid separation, heat transfer and treatment, fluid handling, among others, and operates in Nigeria both directly and through distributors.

    Jocam is a representative company that has wide range of interests in the oil and gas, power and marine support services such as international procurement, coating, and equipment stocking; sales and services of all range of industrial equipment for surface preparation, design, installation and maintenance.

    The Managing Director of Jocam, Mr. Nnamdi Okam, said that the Nigeria Oil Gas conference and exhibition will afford the visiting Swedish team an opportunity to interact with “our clients with a view to understanding the challenges of performance and maintenance of Alfa Laval equipment as well as introduce the latest and most modern solutions for improved productivity and cost-efficiency in the industry because oil and gas industry in Nigeria is yet to attain its full potential as most of the key technologies and expertise needed for optimal operation are still sourced from abroad.”

    The Communications Manager of Alfa Laval, Virginia Nordmann, said the company is a leading global provider of specialized products and engineering solutions based on its key technologies of heat transfer, separation and fluid handling. The company’s equipment, systems and services are dedicated to assisting customers in optimizing the performance of their processes. The solutions help them to heat, cool, separate and transport products in industries that produce food and beverages, chemicals and petrochemicals, pharmaceuticals, starch, sugar and ethanol.

    Alfa Laval’s products are also used in power plants, aboard ships, in the mechanical engineering industry, in the mining industry and for wastewater treatment, as well as for comfort climate and refrigeration applications. It operates in about 100 countries and is listed on Nasdaq OMX. In 2011, the company posted annual sales of about SEK 28.6 billion about (3.2 billion Euros) and has about 16000 employees.

     

  • Group steers oil industry enlightenment campaign

    The Campaign for Growth in the Nigerian Oil and Gas Industry (CGNOGI), a non-governmental organisation has launched a nationwide public enlightenment crusade aimed at providing public education and promote informed discourse on issues affecting the oil and gas industry.

    The group just published its maiden edition of the public enlightenment campaign and said the initiative became imperative in view of the need to ensure that all stakeholders have all the facts and can meaningfully contribute to public debate on issues. The NGO argued that for too long a small group of individuals and corporate bodies have consistently monopolized the discussion of issues for selfish interests, arguing that in this age of information explosion, there is need for citizens to be adequately informed.

    Explaining the rationale for the campaign, the group said the oil and gas sector is strategic to the aggregate economy; pointing out that anything that happens in the industry would easily have multiplier effect on other sectors.

    In view of this, the Executive Secretary of the group, Mallam Abubakar Kalto noted that rather than expedite the reform required moving the industry forward, the current debate over the provisions of the draft PIB, which is before the National Assembly is aggravating the challenges in the sector.

    According to him, the PIB is very important as it aims to overhaul the industry that has not been blessed with such legislation for several years. Contrary to the view of many operators that the PIB would scuttle their operations if allowed to pass into law, Kalto explained that the overhaul will touch on indigenous and foreign operators in the sector.

    The CGNOGI boss stated that the goal of the public enlightenment series is to put the record straight by educating the operators and investors alike about the critical issues that are causing what he called undue delay in the passage of the bill into law by the National Assembly.

    He said Nigeria has an estimated 37.1 billion barrels of oil in reserves and produces an average of over two million barrels per day in compliance with the allocated production quota from the Organisation of Petroleum Exporting Countries (OPEC) while the gas reserves are in excess of 165 trillion cubic feet and like its oil, Nigeria’s gas is rich in liquids and low in sulphur.

    Kalto said the legal framework that has guided the industry to date is the Petroleum Act, which was enacted in 1969. The Act, he stated, vests the entire ownership and control of all petroleum in, under or upon any lands within the territory of Nigeria in the state. The legal framework, he noted, gives the power to grant the minister the exploration, prospecting and production rights. Aside the Petroleum Act, CGNOGI identified the Deep Offshore and Inland Basin Production Sharing Contracts Act No. 9, as another laws that govern the industry.

    Kalto said the modern legislation that is expected to bridge the gap is the draft 2012 PIB that is intended to spell out a new legal framework that would govern the operations and activities of the oil and gas industry.