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Tag: Oil

  • More power, oil, gas output

    Available fundamentals have shown that the sector will be robust in 2019. With an expected 2.5million barrels per day, there will be more power supply and more oil and gas production, writes EMEKA UGWUANYI.

    The power industry has, over the years, been replete with excuses, accusations and counter-accusations.  Previously, it was due to more than 16 years of neglect by successive military administrations. It shifted to lack of gas supply to thermal power plants – the major source of electricity supply.

    The inadequate gas supply was attributed to pipelines’ vandalism by Niger Delta militants and low gas pricing, which made gas producers shun supply for domestic consumption.

    However, these problems have been substantially resolved. Militancy and pipeline vandalism have drastically reduce; domestic gas price has improved. Besides, though privatised five years ago, the Federal Government still has 40 per cent equity shares in the distribution companies (DisCos) as well as control over them. Will there be more actions, less excuses and blame game this year?

    As at the last count, available power generation was 7,000megawatts (Mw)  and installed capacity was over 12,000Mw with transmission capacity of 7,000Mw and distribution capacity of 5,222Mw.

    The Minister of Power, Works and Housing, Mr Babatunde Fashola, on assumption of office, introduced the incremental power policy. It is an initiative that seeks to put into use existing megawatts as against building new generation facilities.

    According to the Minister, every megawatt is defined. To him, Nigeria cannot have 12,000Mw installed and be concentrating on new ones without optimising the existing ones – Egbema and Gbarain power plants are not finished. Olorunsogo, Omotosho, and Geregu are not optimising because gas is not enough. In some places there are transmission problems.

    The ministry’s focus was to give gas to power stations that have transmission facilities, and transmission facilities to stations that have access to gas, but no facilities to evacuate the generated power.The policy has helped in increasing output from Egbema, Gbarain and Omoku, among other power plants. These power plants were supposed to be completed last year. There are plans to complete their rehabilitations this year to enable them contribute to the incremental power.

    “We are optimising the capacities of the power plants and other facilities that we have.  We are focusing on taking gas to power plants that are idle because of lack of gas.We are continuously working on how to solve gas supply problems with the Nigerian National Petroleum Corporation (NNPC), gas firms and others. The 7,000Mw we produce now doesn’t come from the sky; we are only making what was not working to work.

    ‘’Sometimes just by completing a transmission line, you get more power on the grid. Sometimes just by doing routine maintenance as we did in Afam IV plant, you get more power. The transformer of Afam IV plant was shut in January 2015 and nobody touched it. By repairing the transformer, we had 100Mw back on to the grid. By completing one section of Ikot-Ekpene switching station, we evacuated some stranded power from Ibom Power and Alaoji plant.

    “Zungeru project will give us 700Mw, but was locked up in court for three years before we came. We have got the parties out of court. It will deliver in 2019. We signed the partial risk guaranty for Azura power plant in Edo State. Azura project is on track and will be finished in 2019. So, we have to quickly build a 14-km 330kv line so we can evacuate power produced there to the grid. We will get 10Mw wind plant in Katsina State into operation this year.

    “The Mambilla power is also ongoing, but will take some time to complete.We are completing Kaduna, Kashimbilla, Guarara, Dandikowa, Katsina windmill, among others. We are also completing transmission lines, using Transmission Company of Nigeria (TCN). We are also trying to complete some rural electrification projects, using Rural Electrification Agency (REA).

    “But it is instructive to note that we are dealing with human beings, the more power we produce every day, the more people that are being born that need power and more people that are getting into business that need power. So, when one takes a stock I can say we have walked our talk and fulfilled our promise. Power is an economic enabler, hence the incremental power, which will lead to stable power and to uninterrupted power. Stable power is to enable businesses to be competitive, efficient, sustain growth and produce jobs. It is for manufacturing, agriculture not just production but processing, packaging and storage, among others, which form part of the fundamental for driving economic growth. That is why this government is not just committed to power as an enabler but to infrastructure as an enabler for business, job creation and economic growth.

    “On reports that work on Mambilla power has been stalled, Mambilla is not just a power project but infrastructure. It is a $5.7 billion project. I cannot recall in recent times when Nigeria dedicated such money to one project. It will take about six years to construct. During construction, it will require 18 million bags of cement, 18 million tons of aggregrates – sand, stones, among others, 42,000 tons of steel. At the moment, not less than 116 Nigerian companies have expressed interests in participating. They include shipping, insurance, logistics, transport and security companies. This is the way to create jobs. Over the six years, they will be shipping, banking and transporting, among others. That is what Mambilla signifies because it will create job opportunities. The power plant will generate 3050mw on completion and will create irrigation opportunities for agriculture in Taraba and other parts of north east.

    “On the 10mw Katsina wind plant, the project delivery date slipped because of the contractor. But I can say that out of the 37 wind turbines, 15 are operational; remaining 22. It was changes to pricing requested by the contractor that made us terminate it. The contractor was using local people to do the work. So, the contract has been re-awarded to a local contractor to complete it. The wind plant is already producing 2mw from which Kano DisCo benefits. We will complete the project this year and also run over 37km of line to connect Musa Yar’ Adua University in Katsina.

    “We are also encouraging private investors to go into generation and have factored coal into the energy mix. We are expecting coal power from a private investor who has coal mining licence and power generation licence. What is remaining is power purchase agreement. But coal power takes longer time to deliver than thermal power that uses gas. It takes longer time because it requires constant mining of coal, accessibility to water for cooling, conveyor belts to take the coal from the mines to the plant and boiler rooms, among others. Let me also say that there is zero import duty for solar parts that are brought in and assembled  in the country, but if you bring fully assembled system, you pay a five per cent duty because you have taken the jobs away.”

     

    Challenges

    To Niger Delta Power Holding Company (NDPHC) Managing Director Mr. Chiedu Ugbo, power generation capacity has risen. So also has population and demand for electricity supply. Merging these has not been easy. But Nigeria’s power distribution system has been enhanced with hundreds of injection sub-stations, 11KV lines and 33KV lines added. Work is also in progress in many transmission and distribution projects. The massive construction of these power projects by the NDPHC has prevented the collapse of electricity supply in Nigeria. Although a 100 per cent supply is yet to be attained, supply is being stabilised while work on incremental power supply is ongoing. Achieving stable electricity supply from almost nothing is not a day’s work. It takes time and huge efforts, especially where economic sabotage of gas pipelines persist and transmission lines are being vandalised. When most of the National Integrated Power Projects (NIPP) are completed and are operational, power supply to Nigerians is expected to be better and drive the economy of Nigeria,’’ he added.

    “One recurring snag with power supply in Nigeria is in the distribution chain. Despite the targeted increase in generation, if there is no efficient distribution to the end users in their homes and businesses, there will still be disappointment with all the efforts made. There has been huge improvement in gas supply to the built thermal power plants, adequate power is being generated and despite some challenges, the transmission network has improved. The most nagging point is power distribution. Power Distribution companies should take more than what the transmission gives out. This is to allow reduction of redundancies at the various levels and reduce losses while transmitting power from one location to another. The farther you travel with power, the more the quality and the efficiency of the power is reduced. Another problem with the distribution network has been poor town and urban planning which has made it difficult to regulate power distribution and downstream activities, thus overloading the grid.

    “Some challenges that the NIPP has had to grapple with include security and community issues; right-of-way challenges for distribution equipment and transmission lines; port clearing coordination hitches and contractor performance-related problems. Even though the three tiers of government own the NIPP, equipment imported for the power projects are often delayed or seized at the ports by the Nigeria Customs Service (NCS) because of non-payment of import tariffs thereby stalling the execution of some power projects. Sadly, some of the equipment at the ports were at one time auctioned by the port authorities after demurrage charges had accrued on them. It took the intervention of an alarmed Senate to recover some of the equipment sold off under questionable circumstance.

    “To fast-track the attainment of stable electricity for Nigerians, the Federal Government should seriously consider waving duties on equipment for power projects. It needs to seriously educate contractors on their patriotic duty to deliver and on time. There is need for a special para-military unit to ruthlessly tackle the activities of vandals, and address the kidnap of the employees of the contractors. Host communities also need to be educated on the recurring problem of right-of-way for the routes for the 330kv and 132kv transmission lines of the NIPP. Once when NDPHC diverted the transmission line to the Ihovonbor station in Edo State at a considerable cost because of the presence of a shrine, a new shrine emerged overnight on the new route and the villagers went on demanding a huge amount to relocate it. These kind of things can be best handed with proper enlightenment of the responsibilities of civic duties. Also, operatives of para-military agencies, especially men of the National Security and Civil Defence Corps (NSCDC), should be adequately motivated and mobilised to protect power installations from vandals across the country. An existing asset protection mechanism for the safety of power generation/distribution equipment like pipelines and plants must be established with technologically advanced means applied.

    With reasonable improvement in generation through incremental power, substantial reduction in militants attacks, improvement in gas supply, expectations are that Nigerians will have more stable power supply in 2019. There is also need to address the issues highlighted by the NDPHC chief.

     

    Oil and gas industry

    The direction of oil price will, to a very large extent, determine how the oil and gas industry will come out in 2019. Oil price had, after rising above $80 per barrel, fell to less than $52 per barrel before rising again to $56 per barrel. Oil price at $50 per barrel is still profitable but because the cost of production per barrel in Nigeria is one of the highest in the world and the fact that windfalls from previous high oil prices were not well managed and invested, periods of low oil prices are difficult ones for the country.

    In most oil producing nations, when oil prices are low, they embark on aggressive exploration to find more oil because cost of carrying out such activities, including labour, is cheap but that is not applicable here. Therefore, there should be increased exploration to find more oil. This can only be achieved by creating investment-friendly environment and incentives to attract investors. The Federal Government, according to industry players, needs to make provision in 2019 budget and subsequent years for offshore and onshore exploration to encourage new discoveries.

  • Oil, gas sector generated $17.05b in 2016—NEITI

    Nigeria generated $17.05 billion from the oil and gas sector in 2016 representing a 31 per cent decline on the $24.79 billion generated in 2015,according to the latest report of the Nigeria Extractive Industries Transparency Initiative (NEITI).

    The sector fetched  $68.44 billion for the country in 2011.

    The report says the 2016 earnings are Nigeria’s lowest in 10 years and the fifth lowest in the 18 years covered by NEITI’s audit reports so far (1999 to 2016).   It attributed the decline in earnings to  the double whammy of low oil prices in the global market and reduced oil production in Nigeria, which in turn was caused by disruption and vandalism of oil assets and spike in crude theft, among others.

    NEITI  Director of  Communications,  Dr. Orji Ogbonnaya Orji, put Nigeria’s annual average price of crude oil per barrel at $43.73 in 2016 as against $52.5 in 2015.

    Total oil production in 2016 was 659 million barrels as against 776 million barrels produced in 2015, a fall of 15%. Losses due to crude oil theft and sabotage rose from 27 million barrels in 2015 to 101 million barrels in 2016, an increase of 274%.

    This was aside losses due to deferment, which in 2016 was put at 144 million barrels which also went up by 65% when compared to the 87.5 million barrels in 2015.

    He said:”The bombing of the under-water 48-inch Forcados Oil Loading/Export Pipeline was one of many major occurrences that befell the industry in the year under review.

    “This incident occurred in February 2016 and the line remained in-operational for seven months. Shell Petroleum Development Company (SPDC) declared force majeure on lifting from Forcados on 21st February 2016. Companies injecting into the Forcados Terminal such as Seplat, Panocean, Midwestern, Energia, Platform, Pillar, Waltersmith and EXCEL shut down production for over 147 days.”

    Read also: FG to NLC: drop ultimatum on minimum wage

    In addition, SPDC declared force majeure on the Bonny Terminal owning  to a leak in Nembe Creek Pipeline between May and July 2016 while NAOC declared force majeure on the Brass Terminal between July and August 2016.

    Similarly, Mobil Producing Nigeria Unlimited declared force majeure twice between May/June and July/October 2016. This was due to a drilling process disruption and damage to the QIT loading system.

    The NEITI report stated that:  “MPN’s total production within the four-month period was 4,616,825bbls, which is less than half of what was produced in each month previously as reflected in DPR reconciled sign-off records.”

    After surviving the slump in the global oil market in 2008 and 2009, Nigeria’s oil sector rebounded in 2010 with a 49% increase in total financial flows to $44.94 billion, followed by the peak of $68.44 billion in 2011.

    However, flows from the sector have been trending downward since that peak year with $62.94 billion generated in 2012, $58.08 billion in 2013, $54.56 billion in 2014, and $24.79 billion in 2015. Similarly, oil production has been on steady decline with 866 million barrels produced in 2012, 800 million barrels in 2013, 798 million barrels in 2014, 776 million barrels in 2015 and 659 million barrels in 2016.

    NEITI’s audit reports independently reconcile payments by companies against receipts by government agencies, and cover key financial flows such as earnings from sale of federation’s crude oil and gas, sector-specific taxes, fees and levies such as royalty, Petroleum Profit Tax (PPT), signature bonus, gas flared penalty, and other flows such as NDDC contribution, NCDMB levy, NESS fees, education tax and others. Breakdown of the payment shows that the major earnings for 2016 came from export and domestic sale of Federation crude oil and gas with $7.97 billion, PPT with $4.21 billion, and royalty oil with $1.57 billion.

    A major highlight of 2016 is  that for the first time in Nigeria’s history, crude oil produced from Production Sharing Contracts (PSCs) overtook output from the Joint Ventures (JVs).

    In 2016, PSCs accounted for 324 million barrels, while the JVs accounted for 289.1 million barrels, (as against the 320 million barrels for PSCs and 375.5 million barrels for JVs in 2015).

  • Financial flow from oil, gas sector reduces to $17.05 in 2016 – NEITI

    The Nigeria Extractive Industries Transparency Initiative (NEITI) says that total financial flows from Nigeria’s oil and gas sector reduced to 17.05 billion dollars in 2016, indicating a 31 per cent decline on the 24.79 billion dollars generated in 2015.

    NEITI disclosed this in its 2016 Oil and Gas Audit Report released in Abuja on Friday.

    The report revealed that the decline was a 75 per cent plunge on the sector’s peak earnings of 68.44 billion dollars generated in 2011.

    It noted that the 2016 figure was the lowest in 10 years and the fifth lowest in the 18 years covered by NEITI’s audit reports from 1999 to 2016.

    The report blamed the plunge in revenue in 2016 on the low oil prices in the global market and reduced oil production in Nigeria, which in turn was caused by disruption and vandalism of oil assets and spike in crude theft, among others.

    It added that the yearly average price of crude oil per barrel stood at 43.73 dollars in 2016 as against 52.5 dollars in 2015.

    It said that a total of oil production in 2016 was 659 million barrels as against 776 million barrels produced in 2015

    This, it noted was a decline of 15 per cent.

    “The Nigerian Liquefied Natural Gas’ NLNG, dividend, loan and interest repayment for 2016 dipped by 63.5 per cent to $390.2 million, as against $1.07 billion recorded in 2015,’’ it added

    On crude oil theft and sabotage, it revealed that the country lost about 101 million barrels of crude oil to theft and sabotage valued at 4.4 billion dollars

    “Of the total loss, Seplat Petroleum Development Company and Shell Petroleum Development Company, SPDC, accounted for 81 million barrels of crude oil lost through sabotage, while 20 other oil companies recorded 19.8 million barrels lost to theft.

    “Losses due to crude oil theft and sabotage rose from 27 million barrels in 2015 to 101 million barrels in 2016, an increase of 274 per cent.

    “This was aside losses due to deferment, which in 2016 was put at 144 million barrels which also went up by 65 per cent when compared to the 87.5 million barrels in 2015,” it said.

    On cash calls and Joint Ventures (JV), the report said that 8.2 billion dollars was budgeted for cash calls in 2016, out of which 5.5 billion dollars was released and 4.9 billion dollars was paid.

    It added that Non-Joint Venture, JV, cash call expenses came to 874 million dollars, representing 17.59 per cent of cash call expenditure.

    It further revealed that the contribution of the oil and gas sector to Nigeria’s Gross Domestic Product (GDP) dropped from 9.5 per cent in 2015 to 8.3 per cent in 2016.

    On gas production, it said that total gas produced in 2016 was 3.051 trillion Standard Cubic Feet (SCF) out of which 288.209 billion SCF was flared, representing 9.45 per cent of production.

    “A total of 126 million barrels, valued at  5.48 billion  dollars or N1.37 trillion, was earmarked for domestic consumption, allocated as follows: 23 million barrels (18%) for refineries, 55.9 million barrels (45%) for Direct Sale Direct Purchase (DSDP), 36.6 million barrels (29%) for PPMC lifting and 10.4 million barrels (8%) for offshore processing.

    “From the money for domestic crude allocation (DCA), NNPC deducted the following upfront: N512 billion for JV cash call; N126.5 billion for pipeline repairs and maintenance; N99 billion for under-recovery and N20 billion for crude losses,” it said. (NAN)

  • Oil falls amid stock market slide, but market eyes OPEC meeting

    Oil prices fell along with weak stock markets on Thursday, but trading was tepid ahead of a meeting by the Organisation of the Petroleum Exporting Countries (OPEC).

    The meeting is expected to result in a supply cut aimed at draining a glut that has pulled down crude prices by 30 per cent since October.

    International Brent crude oil futures LCOc1 were at 61.04 dollars per barrel at 0531 GMT, down 52 cents, or 0.8 per cent from their last close.

    U.S. West Texas Intermediate (WTI) crude futures CLc1 were at 52.38 dollars per barrel, down 51 cents, or 1 per cent.

    Traders said oil prices were being weighed down by weak global financial markets, which saw stock markets tumble on Thursday.
    Since early October, crude oil has lost around 30 per cent of its value amid surging supply and fears that an economic downturn will erode fuel demand.

    Read Also:Nigeria needs over $3b for oil, gas infrastructure

    “A massive liquidation in long positions by money managers has dampened market confidence on oil prices considerably,” said Benjamin Lu of Singaporean brokerage Phillip Futures.

    OPEC is meeting at its headquarters in Vienna, Austria, on Thursday to decide its production policy.
    Led by Saudi Arabia, OPEC’s crude oil production PRODN-TOTAL has risen by 4.1 per cent since mid-2018, to 33.31 million barrels per day (bpd).

    Oil output from the world’s biggest producers – OPEC, Russia and the United States – has increased by a 3.3 million bpd since the end of 2017, to 56.38 million bpd, meeting almost 60 per cent of global consumption.

    The increase alone is equivalent to the output of major OPEC producer United Arab Emirates.

    Russia, a major oil producer but not a member of OPEC, will meet with the producer cartel on Friday to discuss production levels, and it is widely expected that a supply cut will be agreed.

    “Markets…believe the production cut deal will be in range of 1-1.3 million bpd,” ANZ bank said on Thursday.

  • Oil may dip to $40, warns Iran

    A fractured Organisation of Petroleum Exporting Countries (OPEC) is meeting later this week to discuss a deal to cut oil production-yet again-to rebalance the market and lift oil prices that have recently slipped to below most of the cartel members’ budget-balance points.

    OPEC needs a unanimous vote to pass decisions such as curtailing production. Yet, Iran-one of OPEC’s biggest producers but also one of the most sidelined members in recent months-warns that the group is unlikely to reach an agreement on a sizeable cut of around 1.4 million bpd as some are suggesting. Such a failure to act decisively would send oil prices plunging to $40 a barrel, Iran’s OPEC Governor Hossein Kazempour Ardebili told Bloomberg in an interview.

    The cartel and its Russia-led non-OPEC allies may not extend their cooperation pact either, according to Iran’s representative at OPEC-a position typically held by the second most powerful oilman in a cartel member after the oil minister.

    Iran has repeatedly expressed frustration with the Saudi/Russia-led increase in oil production since June to offset what was expected to be a steep decline in Iranian oil supply with the United States (U.S.) sanctions on Tehran’s petroleum and shipping industries.

    Iran’s oil exports indeed dropped by some 1 million bpd, but they are likely still holding onto above 1 million bpd, while U.S. waivers to eight Iranian customers allow buyers to continue purchasing oil at reduced volumes until the end of April next year.

    Oil prices have plunged by around 30 per cent from early October as the market started to fear an oversupply is building up again, due to record high production in Saudi Arabia and Russia, and an all-time high oil output in the United States, coupled with fears of slowing economic and oil demand growth.

    “I doubt, with the failure they had in the last three months, that the declaration of cooperation gets extended,” Kazempour told Bloomberg, referring to the Saudi-Russia alliance.

    “Why institutionalize a failure? And it needs unanimity to be extended,” he noted.

    Iran, for one, will not take part in any cuts while there are U.S. sanctions on its oil, Kazempour said, adding that those who increased production should be the ones to cut, that is the Saudis and Russians and few Arab Gulf states like the United Arab Emirates (UAE) and Kuwait.

    “Now they are asking others to share in the cut. Whoever increased, they should cut,” Kazempour told Reuters.

    “The pilot and co-pilot crashed the plane and all 25 passengers are now in critical condition,” said Iran’s OPEC governor.

    The ‘pilot and co-pilot’, however, agreed this weekend to extend the deal, Russia’s President Vladimir Putin said, although he admitted there isn’t an agreement on specific cuts, yet.

  • ‘ $60b lost to non-implementation of oil, gas laws’

    Nigeria has lost about $60 billion in the last 18 years due to failure of government to implement relevant laws on the payment of royalties from crude oil sale, Lagos lawyer and  Senior Advocate of Nigeria (SAN), Femi Falana, has said

    Falana, who spoke yesyerday at the 40th anniversary celebration of the National Union of Petroleum and Natutal Gas (NUPENG) in Abuja, also said the nation loses over $66 billion annually from unremitted money from the sale of oil by International Oil Companies (IOCs).

    He said the offshore Production Act which has been in existence for the past 18 years, stipulates that anytime the price of crude rises above $20, the government should increase royalties.

    He said: “The Supreme Court has just decided a case and this case has to do with the failure of the government to enforce the offshore oil production act for the past 18 years.  The Federal Government if Nigeria failed or deliberately refused to enforce the provisions of that law.

    “That law says that any time the price of oil goes beyond $20 per barrel, the government must adjust the royalties collected upward.  That was not implemented for 18 years.  What we have lost due to the non-implementation of that law is about $60 billion.

    “I challenge NUPENG and PENGASSAN to ensure that such laws and similar ones for the protection of Nigerians are enforced. That law was subverted by the government that enacted it.

    “This year, the Petroleum Industry Bill that has been awaiting passage since 2007 was rejected by President Muhammadu Buhari. No concrete reasons have been given for that. The IOCs opposed that law because it is going to force them to pay more royalties and ensure participation of the host communities in the running of the oil and gas industry.  That law has been thrown to the dustbin. You must take that bill and look at it again, particularly the areas meant to protect Nigeria workers.”

    He said even though oil was discovered in Nigeria several years ago and since then, it is monopolised and controlled  by the IOCs.

    He said:  “Last year, our country made $104 billion from the sale of oil.  But only about $38 billion was paid to the Federal Government.  Every month, our commissioners of finance and the minister of finance assemble in Abuja to share what I called crumbs from the master’s table because we have never taken control over the resources of our country.”

    He said there was no doubt that the control of the oil and gas industry in the country is part of the foreign domination of the peripheral capitalist economy operated by the government, adding that the foreign control of the oil and gas industry has not been challenged despite the duty imposed on the State by Section 16(1)(c) of the Constitution, to “manage and operate the major sectors of the economy”.

    He said: “Even the national assembly has continued to ignore the provision of Section 16(3) of the Constitution which provides for the setting up of a body “for review, from time to time, the ownership and control of business enterprises operating in Nigeria…

    “The refusal of President Buhari to sign the Petro|eum Industry Bill into law is a major victory for the IOCs which wou|d have to do with new fisscal terms in favour of Nigeria, increasing local ownership of the oil and gas industry, and strict control of industrial waste and pollution of the old producing communities.

     

     

    “Under section 34 of the Act, where a project or contract value exceeds $100 million (USD), it shall contain a labour clause mandating the usage of a minimum percentage of Nigerian labour in specific cadres as may be stipulated by the Board. Section 41(2) also requires that a minimum of 50 per cent of the equipment deployed for execution of work carried out by local subsidiaries of international/multinational companies are owned by the subsidiaries.

    “Nigerian content shall be a major factor in bid evaluation and where bid tenders are within one per cent of each other; priority shall be given to the bid containing the highest level of Nigerian content provided such Nigerian content is at least five per cent higher than that of the closest competitor.

    “Furthermore, full and fair opportunities must be given to Nigerian indigenous contractors and companies and indigenous companies shall be allowed a 10 per cent margin against the lowest bidder provided it has capacity to execute the Specified job. The concept of fun and fair opportunity as required under the Act has not been specifically spelt out and is thus subjective.”

    He said the provisions of the Local Content Act may be deliberately sabotaged by a government that is prepared to sign any agreements in a desperate bid to please foreign investors, adding that “a situation whereby the IOCs are allowed to influence the appointment of the Minister of Petroleum Resources and the management staff of the regulatory bodies in the oil and gas industry must stop.

    “In other words, the operators in the oil and gas industry must not regulate themselves. The law is quite comprehensive in scope. There are 107 Sections of the Act. For proper comprehension of the legislation by workers both the NUPENG AND PENGASSAN should summarize and publish the provisions pertaining to employment of workers in the oil and gas industry.

    “It is pertinent to draw the attention of the workers in the oil and gas industry to the relevant provisions of the Presidential Executive Order No 5 for harnessing domestic talent and development of indigenous capacity across all sectors of the economy. In particular, the Minister of Interior has been prohibited from giving visas to foreign workers whose skills are readily available in Nigeria. “Thus, by the combined effect of the Nigerian Oil and Gas Content Development Act, 2010 and the Presidential Executive Orde No. 5 of 2018 Nigerian employees shall be given hrst consideration in the oil and gas industry.

    “Since the industry requires skilled staff in many areas both the NUPENG and PENGASSAN should invest in the training of their members to acquire the requisite knowledge in petroleum technology. To that extent, both unions should ensure that scholarships are given to deserving Nigerian by the PTDF to acquire requisite knowledge in petroleum technology.”

  • ‘Oil, gas free zones contributing to economy’

    The oil and gas free zones have proven to be veritable vehicles for economic diversification, attraction and retention of Foreign Direct Investments (FDIs).

    They have also become vehicles for job creation,  technology transfer as well as sources of revenue  for government.

    The Managing Director/CEO,  Oil and Gas Free Zones Authority (OGFZA),  Umana Okon Umana, made this known at the “2018 Oil and Gas Forum” hosted by the Institute of Oil & Gas Research and Hydrocarbon Studies, in Lagos.

    Its theme was “Oil and Gas Product Manufacturing: Prospects, Challenges and Progress.”

    Umana in his presentation titled, “Oil & Gas Product Manufacturing: Understanding the Importance of Oil and Gas Free Zones,” said the special operating environment put in place in the free zones was meant to incentivize the use of the zones as manufacturing hub for economic diversification.

    He said some of the bespoke incentives OGFZA offers to businesses that operate in the free zones include exemption from all forms of taxation, including federal, state and local government taxes; exemption from expatriate quota policy applicable in the customs territory.

    He listed others to include exemption from customs duty on imports for value-added production; express processing of entry visas; the most expeditious clearance of cargoes; express processing of entry paperwork through the one-stop-shop policy and a host of other incentives.

    Umana said because of the special operating environment OGFZA put in place in the free zones, they have functioned as a launch pad to the nation’s economic development, especially in attracting FDI. He said, for instance, that the nation has attracted $84 billion in FDIs in the last 18 months.

    The OGFZA boss attributed the feat to policy reforms instituted by President Muhammadu Buhari’s administration, among which was the Ease of Doing Business. This, he said, created a better enabling environment for businesses to make more contributions to the national economy through the oil and gas free zones.

    He added that the reforms also restored confidence among foreign investors in Nigeria as an investment destination. “The renewed confidence in the economy is evident in the report by the Presidential Enabling Business Environment Council (PEBEC) under the Office of the Vice President that the nation attracted $84 billion in Foreign Direct Investments in the last 18 months,” Umana said.

    While reiterating that oil and gas free zones have without doubt, been key drivers of improved confidence in the economy, Umana stated that OGFZA, working within the new policy environment, has instituted a regime of efficiency in the free zones through automation and a review of procedures, leading to significant cost savings and improvements in timelines for operations.

    According to him, the changes in the operating environment in the free zones have seen commitments in new investments valued at more than $8 billion in the coming years.

     

     

    , even as a number of new projects are coming up in free zone development, besides the ones already contributing across the value chain—including manufacturing, skill acquisition, technology transfer and job creation.

    Umana said the most important of the new projects was the Brass Oil and Gas City (BOG City), located on Brass Island, Bayelsa State.  “The BOG City is licensed and will soon start operation. More than $3.5 billion investments are already committed to the project. BOG City is designed to evolve into a world class export-oriented and gas processing hub with the potential to generate up to 20,000 new jobs,” he said.

    He said another important new project was the Notore Industrial City located in the Onne-Ikpokri Oil and Gas Free Zone in Rivers State. According to him, Notore Industrial City, granted a Free Zone Developer Licence by OGFZA in November last year has the potential to make Nigeria a continental hub in gas processing and petrochemicals.

    “The new free zone is to attract $5 billion in new investments and generate 15,000 new jobs, Umana announced, listing other companies contributing across the value chain to include Indorama-Eleme Petrochemicals Company Limited, Tenaris Company Limited, and TechnipFMC Limited, etc.

    Nigeria pioneered free zone development with the 1996 Oil and Gas Free Zones Act number 8, which created OGFZA. However, Umana lamented that unnecessary ambiguity in the law has hampered the optimal development of the oil and gas free zones in the country.

    According to him, this has denied Nigeria the full benefits derivable from optimally-operated oil and gas free zones, run according to global best practices. “This is why the ongoing amendment of the OGFZA principal Act at the National Assembly is very important and deserves expeditious attention,” he said.

    The OGFZA boss, however, said in spite of the challenges, the nation’s oil and gas free zones under the administration of OGFZA have, over the years, made significant contributions to the national economy.

    He said the oil and gas free zones, which form a very important component of the oil and gas industry, provide the logistics support base for the sector.

    “in doing so, they serve as manufacturing, shipping, and services supply hub to the sector, creating jobs, generating revenues for government, helping to protect the environment and promoting transfer of skills and technology. In these roles, they have served as a launch pad to economic diversification,” Umana said.

     

  • ‘Our dependence on oil causing deaths’

    The Environmental Rights Action/Friends of the Earth Nigeria (ERA/FoEN) has blamed Nigeria’s reliance on fossil fuels for unrelenting oil spill-related incidents.

    It cited the recent one involving over 50 persons incinerated when a pipeline belonging to the Pipelines and Product Marketing Company (PPMC) in Umuode Community in Aba, Abia State, exploded.

    The incident occurred at Umuimo and Umuaduru in Osisioma Ngwa council in Abia when a pipeline said to have been abandoned by PPMC for about three years was suddenly used to pump fuel, leading to leakages that residents swooped on to meet their needs.

    Spokesperson of the Nigerian National Petroleum Corporation (NNPC) Ndu Ughuamadu had blamed residents for tampering with oil facilities.

    But ERA/FoEN, in a statement in Lagos, said it was unfortunate NNPC and other oil agencies dodge responsibility, and continue to provide excuses whenever their ill-maintained facilities leak and cause havoc to man and the environment.

    ERA/FoEN’s Executive Director Godwin Uyi Ojo said: “With every oil spill incident and the weighty costs, it is now evident that the lives of our people mean nothing to the Nigerian government in its unsustainable wedlock with a fossil-fuels -dependent economy. This, like previous incidents confirm the assertion”

    Ojo explained that Nigeria’s refusal to transit from fossil fuels had left us behind, as more countries embrace and make inroads into renewables that have proved to be safe, environment-friendly, and readily accessible.

    “Starting with the Jesse fire disaster in Delta, to Abule Egba, Atlas Cove and Ijegun in Lagos, Arepo in Ogun and those happening across the Niger Delta, thousands have lost their lives, and it would seem the government has not learnt any lessons. The waste of the lives of our people is simply unexplainable in the light of evident alternatives”

    He frowned at reports that the PPMC failed to mobilise to Umuimo and Umuaduru villages months after locals cried out about the inherent dangers of the leaking fuel.

    “The time for cheap talk is long past. Every life counts. The spills, explosions and deaths will only stop when Nigeria weans itself of fossils and leapfrog into the renewables regime. The environment will be the better for it, our people will be safe and economic growth will be assured. Unless we explore this path, this unfortunate situation will continue,” Ojo said.

  • Wofai Samuel chairs Oil, Gas & Energy infrastructure summit in Kenya

    The Ministry of Petroleum Kenya, and a host of other African Governments, Multilateral Economic Blocks / International Development Agencies and Energy professionals, assembled in Nairobi, Kenya,  for the 2018 edition of Sub – Saharan Africa Oil, Gas and Energy Infrastructure summit (SSAOGES) to further the conversation on the future of energy infrastructure in Sub -Saharan Africa.
    Held at the Safari Park and Casino Hotel in Nairobi, the summit gathered Africa’s renowned Oil, Gas & Power Industry Professionals , many of them Long Standing Investors , Entrepreneurs and Policy Makers from various countries, including Morocco, Pakistan , Nigeria, Cameroon, Kenya, Ecowas, Rwanda to name a few.
    The Two Day Summit, started with a welcome address by Oladeji Olawale, CEO ; Naphtali & Naphtali PM Limited.
    He emphasized on the need to evaluate barriers to entry into the gas and energy markets of the Sub- Saharan regions of Africa, adding that the oil and gas sectors of several developing countries in Africa, have shown limited impacts on other sectors of the economy, which is largely due to lack of relevant infrastructure to drive the needed growth .
    The Keynote address, was taken by the Executive Secretary of Nigerian Content development and Monitoring Board (NCDMB), Engr. Simbi Wabote.

    Read Also: 19 Nigerians arrested in Kenya for fraud

    He spoke on the need to developing Sub – Sahara Human capacity as the key to resolving Sub- Saharan Africa Energy Infrastructure Deficit.
    There are no thought processes strong enough to drive the infrastructure development we expect and seek in Sub -Sahara Africa.
    He added that; We somewhat Lack focus and resilience needed to deliver gigantic projects thus we focus on short term benefits instead of long term, which makes it hard to measure up with the global communities.
    International Media Personality, Wofai Samuel pointed that there is need for regional integration and cooperation between the regions of sub Saharan Africa.
    She added that the GDP growth will almost be stagnant for countries like Nigeria, if we keep exporting raw products and getting finished products in return.
    We will keep having tremendous economic growth with minimal or no economic  development she added.
    Nawfal Saadi, spoke extensively on the Moroccan Noor  Project saying Morocco is open to Collaborate with other regions of Africa.
    Discussions revolved around the Adoption of a proper gas framework, Usage of Renewable Energy, A proper Taxation framework amongst other subjects.
    Guests were treated to good food, lunch, music, dinner, the safari and theatrical performances by the cultural groups in Nairobi.

  • NEITI to unveil oil, gas, mining register next year

    A comprehensive register of oil, gas and mining companies owners in Nigeria will be unveiled on December 31, 2019, the Nigerian Extractive Industries Transparency Initiative (NEITI), has said.

    Its Executive Secretary, Dr. Waziri Adio, disclosed this in Abuja at a one day stakeholders’ engagement meeting on the implementation of the beneficial ownership roadmap in extractive industries in Nigeria.

    Adio said this move would help to establish transparency and accountability in the extractive sectors, adding that with such information, Nigerians will begin to know the real persons having significant influence directly or indirectly in the nation’s extractive sectors.

    He said: “We are going to have the register of all the companies operating in Nigeria by December 31, 2019. A lot of discussions have been going on both at the level of the EITI and at the level of the Open Government Partnership (OGP) and the Corporate Affairs Commission (CAC). We have had a lot of discussions, we need to stop talking; we need to start acting.”

    According to him, hidden ownership could be used to fuel terrorism financing, money laundering, and drug financing, noting that such act could benefit only the minority elite in the country.

    “We know that hidden ownership can be used as a mask for conflict of interest; it can be used as a mask for abuse of office; it can also be used to facilitate corruption; it can be used to facilitate tax evasion, it can also be used to perpetrate money laundering, drug financing and terrorism financing,” he explained.

    The executive secretary nevertheless expressed concerns on the challenges of adopting beneficial ownership disclosure in the country, noting they ranged from lack of legislation on beneficial ownership disclosure; low level of awareness on the issue, and lack of capacity and readiness to comply with the disclosure of beneficial owners.

    Corporate Affairs Commission (CAC) Director, Legal and Compliance, Garba Abubakar, explained that the fact that Nigeria has no register of beneficiaries did not mean that the laws do not refer to it.

    The CAC boss revealed that there were sections of the Company and Allied Matters Act (CAMA), which compeled businessmen to disclose their shareholders and their capacity of ownership of shares.

    He said the commission was proposing a law that would make it mandatory for companies to disclose their beneficial owners, adding that “already, the beneficial owners’ form register had been designed”.