The Nation Newspaper

Tag: Oil

  • Despite difficulties, oil giants sink more money into the economy

    Despite difficulties, oil giants sink more money into the economy

    For some time now, oil giants, such as Shell, Total, ENI and Chevron, have been complaining about the difficulties of working in the Niger Delta, but as the Associated Press reports, they are sinking more money into the country

     

    Nigeria is something of a trouble spot for the oil industry. Though Africa’s largest oil producer, blessed with ample hydrocarbon resources and a large infrastructure network, security problems in the country’s oil-rich Niger Delta plague companies operating in the region, causing frequent supply disruptions.

    The earnings reports of Europe’s oil majors this quarter were littered with references to the difficult operating environment in the country and the impact oil theft and sabotage has had on companies’ production.

    However, a quick run-down of the figures suggest things aren’t actually that bad.

    Italian oil major Eni SPA (E) lost just 30,000 barrels a day of oil equivalent in the first half of the year as a result of oil theft and flooding in Nigeria, that’s equivalent to 2% of the company’s overall production in the period. France’s Total SA (TOT) said increased incidences of theft and sabotage in Nigeria had offset an increase in production as a result of better security in Yemen in the second quarter of the year, but at the same time, the restart of the country’s Ibewa field helped boost output by 2%.

    Even Royal Dutch Shell PLC (RDSB.LN), which said it lost 100,000 barrels of oil equivalent a day in the second quarter due to the deteriorating security situation in Nigeria, only took a $250 million hit to its earnings as a result of the disruptions. That’s peanuts when compared with the $2 billion write-down it took on the value of its shale assets in North America.

    Royal Dutch Shell posted a drop in its 2013 second quarter profit to $4.6bn, compared to $6bn in the same period of 2012, primarily due to oil thefts and gas supply disruptions in Nigeria and the weak Australian dollar.

    Shell CEO, Peter Voser, said oil theft and disruptions to gas supplies in Nigeria are causing widespread environmental damage, and could cost the Nigerian Government $12bn in lost revenues per year.

    “Higher costs, exploration charges, adverse currency exchange rate effects and challenges in Nigeria have hit our bottom line. These results were undermined by a number of factors – but they were clearly disappointing for Shell,” Voser added.

    In June, the company said it was considering the further sale of assets in the eastern Niger Delta, where it has security problems.

    “On a current cost of supplies (CCS) basis, the company’s earnings were $2.4bn for the second quarter of 2013.”

    Voser further said Shell could not solve its problems in Nigeria by itself and needs the support of the government.

    The company recently launched strategic portfolio reviews in both Nigeria onshore and North America resources plays.

    Cash flow from operating activities for the quarter was $12.4bn, compared with $13.3bn in the same quarter of 2012, while capital investment for the second quarter of 2013 was $11.3bn.

    The company has completed divestments worth $21bn in the last three years and some $4bn in the last year alone.

    Meanwhile, even as companies loudly publicise the difficulties of operating in Nigeria, they’re sinking more money into the country.

    In June, Total said it had got final approval to develop Egina, an oil field in deep water offshore Nigeria that the company predicts will produce 200,000 barrels a day.

    Shell, which has sold off several of its assets onshore Nigeria in recent years, has also made fresh commitments to the country. The company’s planning on spending $1.5 billion to build a new and more secure loopline for a major pipeline in the Niger Delta and a further $2.4 billion on five new gas projects in the country. It has also expressed interest in buying several oil licenses Chevron Corp. (CVX) has put up for sale.

    So despite the various difficulties, the European oil majors aren’t jumping ship. But they are looking to move their money into assets less easily targeted by oil thieves and saboteurs.

     

  • Oil theft ; N7.35bn loss recorded daily- FG

    Due to oil theft and shortfalls in oil production in the country, the Federal Government says  it is losing 400,000 barrels per day.

    Delta State Governor, Emmanuel Uduaghan disclosed this to State House correspondents at the end of the National Economic Council (NEC) meeting chaired by Vice President Namadi Sambo.
    The NEC, which comprises the 36 state governors, ministers of National Planning, Finance, FCT, CBN governor, also took steps on Thursday  to curtail the rising incidences of oil theft in the country including immediate prosecution of oil vandals and thieves.
    The daily loss of 400,000 barrels of oil per day at an international price of $117 per barrel, converted to naira at the exchange rate of N157 to a dollar gives N7.35 billion total loss per day.
    Uduaghan, who was appointed to head the Oil Theft Committee at last month NEC meeting, said that the Committee was working on providing both long and short term strategies.
    On the interim measures being taken, he said: “A technical level meeting involving key stakeholders has been held, where concerned agencies including security outfits have made useful submissions, with more submissions expected from other stakeholders, especially from the oil producing states.”
    “The Committee has moved to address the issue of the 400, 000 barrels per day production shortfall. The Governors of Bayelsa and Delta have been mandated to meet with the concerned oil majors and the JTF to work out modalities for the effective repair of the Nembe and Trans Niger pipelines which are currently shut.”
    “The Committee also mandated Akwa Ibom Governor, Obong Godswill Akpabio, CON, Secretary to National Planning Commission, the NEITI chief executive and a representative of the Inspector-General of Police to meet with the Attorney-General of the federation towards strengthening the extant deterrence policy by ensuring more arrests and convictions of the oil thieves.”
    “In this regard, a meeting of the Governor Akpabio-led Committee with the AGF this morning, agreed on the following resolutions: A legal task force, headed by the AGF to be set up immediately to commence prosecution of proven cases, using relevant laws; particularly the miscellaneous offences Act which carries a sentence of 21 years without option of fine.”
    According to him, the legal task force, which is to be in force for one year with effect from July, 2013, is to be made up of representatives from the NNPC, the Armed Forces, Civil Defence, Police, SSS and other related agencies.
    While prosecution of established cases will continue and all convictions to be given wide publicity, he said that the members of the task force would be announced by the AGF on Monday 22 July, 2013.
    “The Council commended the efforts of the Committee and further urged it to ensure that the bid to repair the shut pipelines is achieved within the targeted period of six to eight weeks.” He stated

     

  • Company signs oil deal

    African Independent oil and gas company, Taleveras, has signed a Farm-Out Agreement with a subsidiary of LUKOIL, Russia’s largest private oil company, for Block CI-504 in Ivory Coast. PETROCI, the national oil company of Ivory Coast, also holds interest in the Block.

    Block CI-504 is located in close proximity to the producing Baobab field.

    The area of the block is 399 square kilometers, water depth ranges from 800 to 2100 meters. In the south CI-504 borders on block CI-205 which is already operated by LUKOIL.

    The committed work programme includes three periods, the first exploration period calls for the interpretation of historical 2D and 3D seismic data as well as additional 3D seismic acquisition by January 2014. Two other periods covering five years in total provide for the drilling of two exploration wells.

    Taleveras signed an MOU with PETROCI for collaboration in upstream activities in Ivory Coast in July 2011. Since then Taleveras has signed Production Sharing Contracts with PETROCI for 3 exploration blocks offshore Ivory Coast.

    Taleveras is a diversified energy and infrastructure conglomerate concentrating on oil & gas exploration, production, trading and supply, with further activities in power and construction. Active across the globe, Taleveras’ offices are located in London, Geneva, Abuja, Lagos, Abidjan, Cape Town and Dubai. The company is privately owned.

    LUKOIL is Russian major international vertically-integrated oil & gas company. PETROCI has been the national oil company of Ivory Coast since 1975.

  • ‘Oil decline spells bleak future for Nigeria’

    A combination of continuous decline in global crude oil prices and domestic crude oil production could bring Nigerians back into austerity as the resultant gloomy macroeconomic condition reverberates across all sectors of the economy.

    This is the assessment of a group of independent analysts led by Mr Bismarck Rewane.

    In its latest bi-monthly economic and business update, Rewane’s Financial Derivatives, Company (FDC) Limited, noted that a further decline in global oil prices for as much as 17.5 basis points could further depress Nigeria’s declining economic performance.

    Recent report by the Nigerian Bureau of Statistics (NBS) showed that Nigeria’s economic output in the first quarter slipped by 0.43 per cent to 6.56 per cent in the first quarter of this year as against 6.99 per cent recorded in the previous quarter-fourth quarter of 2012. The decline was largely due to poor output in the oil sector, which led to a 1.05 per cent decline in the sector’s contribution to Gross Domestic Products (GDP) to 14.75 per cent.

    Global oil prices had declined considerably in recent period. Nigeria’s bonny light crude trades at $107.5pb, 7.2 per cent lower than $115.3 per barrel (pb) in first quarter of the year just as Nigeria’s oil output fell to 1.94 million barrel per day (mbpd) in April. The decline in global oil prices was largely due to demand concerns and the continuous uncertainty in Europe while domestic oil output has been negatively affected by several disruptions such as pipeline vandalism, bunkering and force majeure.

    FDC noted that the declining price and output imply a shortfall in federal government revenue as a result of Nigeria’s ultra dependence on oil, estimating that Nigeria might have since lost some 6.8 per cent of its oil revenue of $1.85 trillion in first quarter of the year.

    According to analysts, a further decline in global oil prices to $90pb will be devastating for the Nigerian economy, as the reverberations of the shocks will hamper any form of growth across all sectors of the economy.

    They outlined that the negative developments in the oil sector due to declining oil production could result in depletion of external reserves, exchange rate instability and increased debt and higher fiscal deficit.

    All these would be compounded by possible increase in the government spending in view of the military action in some Northern states, which poses potential risks to inflation and exchange rate.

    “Given that oil prices, notably bonny light crude, decline to $90pb, Nigeria could see a further decline in its growth rate by 1.5per cent. Also, oil revenue would immediately decline by 30 per cent or $2.4 billion per month in nominal terms. This will cause a rapid increase in government borrowing, adding to the current total government debt of N8.7 trillion and increase the nation’s fiscal deficit beyond the current target of 2.85 per cent of GDP,” analysts noted.

    They pointed out that as the value of the naira falls towards N165/$ at the parallel market and the likelihood for capital flight increases, external reserves would be depleted by about $10 billion to $15 billion from the current level of $48.5 billion. The resultant $33.5 billion to $38.5 billion will only cover an average of eight months of exports, which may lead to increase in Nigeria’s borrowing.

    “The implications of a further decline in oil prices paint a bleak picture for the Nigerian economy,” FDC stated.

    Analysts, however, the stated that there was possibility of an upturn in global economy, which may also positively impact on Nigeria’s economic outlook and stave the economy from austere future.

     

  • ‘We’ll reduce Nigeria’s dependence on oil’

    THe Nigeria Export Promotion Council (NEPC) will assist in reducing the country’s dependence on oil, its Chairman, Mrs Grace Clark, has said.

    She said since Independence, Nigeria has been depending on oil, adding that it was high time the country began diversifying to the non-oil areas.

    “ We are a wealthy country with mineral resources everywhere, and for the new market that is emerging, we hope to be partners and participants in the global economy. We cannot do this without money; we cannot go into the global market without money. We cannot carry our manufacturers, commodity agents and farmers to the global market where they are not competitive,” she said.

    On provision of incentives to manufacturers, she said though there are incentives, the council would look for more ways to support them.

    Her words: “We have the Export Expression Grant which is under review. We are hoping that it will be reviewed in favour of the manufacturers. I know their challenges, it is very important in order for them to meet the requirement that is expected of them. So, there are incentives and as the new board gets working, we are going to look at other avenues and other challenges and barriers to make sure that they are able to compete favourably with their counterparts in the developed countries.”

    Mrs. Clark said the agency has not received its funding as yet, explaiming that the Nigeria Maritime Administration and Safety Agency (NIMASA) is supposed to be contributing 10 per cent of its resources to NEPC, but said that hasn’t been done yet.

    “Up till now, we have not received it and is a constraint to us. We want to be part of the Presidential transformation agenda, and you cannot do that with words. We have a lot of things that we need to promote with funds. We need exhibitions, we need to support manufacturers, exporters and we encourage and advise them and provide them with technical and logistical support on how to promote their products so that it can compete favourably in the global market.

    “But if we don’t have these resources, how can we carry out these things? We cannot do it with words. We are also trying to make sure we look into the manufacturers’ problems. I have had opportunity to visit some of them and they have legitimate complaints that are universal and we cannot do without funds,” she said.

  • NAPE to govt: Execute policies to boost oil and gas

    NAPE to govt: Execute policies to boost oil and gas

    The Federal Government has been urged to implement meaningful policies that would boost oil and gas operations in the country Speaking during the monthly technical meeting of the Nigerian Association of Petroleum Explorationists (NAPE), in Lagos, the Managing Director, Seplat Petroleum Development Company Limited, Austin Avuru, said the biggest problem facing the industry is that the government had treated policies as events, when policy formulation should rather be a process.

    He said if industry policies are effectively implemented, the oil and gas industry would remain active and useful to the entire economy, harness infrastructural development, open up avenues for job creation as well as streamline sources of revenue for the government.

    Some industry players noted that there are good policies in place but blamed the government for not doing enough to ensure effective implementation of these policies.

    Avuru, who delivered a lecture entitled: Policy and activity in the Nigerian petroleum sector, said: “We treat policies as an event, where as there are departments of the government whose jobs everyday is to look at these policies and their application on a continuous basis and their relevance. Any one that is not relevant it is their daily job to look at how changes would be made to those ones.

    “It is not how much complicated the policies are, it is the fact that we are not engaging policies with the attendant result of those policies and then the application of those policies when changes ought to occur. These are the things that should be a continuous business of the government and policy makers.”

    Avuru said that the government has not done a good job of managing the nature-given wealth over the past 50 years. “We have laboured to share rather than create, and even in sharing we have been found wanting. The parlous state of our economy today only summarises the fact that we have, so far squandered our riches,” he added.

    He said efficient management of a rent economy such as Nigeria requires a consistency of disciplined and visionary leaderships, capable of applying the ample rent so collected to fund a long-term programme of massive education of the citizenry, provision of quality healthcare and a solid infrastructure backbone as well as guaranteeing security of lives and property.

    He noted that a healthy, well educated citizenry operating under a conducive environment would re-generate a secondary economy that would gainfully engage the rest of the population.

    The President of NAPE, George Osahon agreed that policy drives the oil and gas industry. He said without laws, there would be no operations. “It is the law that drives what we are doing, so it is very technical,” he said.

    He however, said there was nothing wrong with what the government has done. The government, he said, had good intentions but some of the policies that were put in place had not advanced the course they had set for themselves.

    He recalled that the government had established the indigenous proprietorship programme and had also changed some aspects of the laws with the policy of the current time. Moreso, the government had given out marginal fields to some companies as independent operators in the industry many years ago.

    On potentials for shale gas, Osahon said that Nigeria has shale gas that can be exploited but the cost of exploiting one barrel of shale oil is so high compared with one barrel of conventional oil.

    According to him, conventional oil is much cheaper than shale oil. He said: “We have to explore the cheaper one first before we go to the more expensive one.”

    He said that the discovery of shale gas is all over the world, adding the US is the one that is actively producing its shale gas but not the only one that has it. He said that anything that happens in any part of the world relating to energy would affect the global energy sector.

    “There is nothing worrisome about what is happening. What we need to do is to look at what is happening and change style if so required, if we must continue to be relevant in the energy sector,” he said.

     

  • Oil sector leads forex utilisation

    Oil sector leads forex utilisation

    The oil sector was the highest user of foreign exchange (Forex) in the first half of the year, despite the fact that the Federal Government reduced subsidy claims on petroleum imports.

    According to a report released last week by FBN Capital, the oil sector used $5 billion, which fell sharply from $6.4 billion recorded in the first half of 2011. This, it said, was due to fuel subsidy cut in January and the ensuing audits.

    The substantial imports of food products, most of which could be grown locally, accounted for 13.5 per cent of the total. Nigeria’s insatiable appetite for imports, which is a function of the limited productive capacity of its economy has assisted in raising the ceiling for forex use.

    The report showed that $22.2 billion forex inflows were recorded from the Central Bank of Nigeria (CBN) while autonomous sources consistently provided the greater forex supply worth $33.5 billion, adding that imports of goods and services hit $28 billion and $10.9 billion respectively.

    Nigeria’s Eurobond yields fell for the seventh day to a record after CBN Governor, Sanusi Lamido Sanusi, said the nation’s financial system was not under threat from the withdrawal of speculative investments.

    Borrowing costs on the $500 million debt due January 2021 slid four basis points, or 0.04 percentage point, to 4.162 per cent in Lagos, the lowest since it was issued in January 2011. The yields have dropped 213 basis points from a high of 6.29 per cent on December 21, 2011.

     

    Inter-bank

    The inter-bank rate fell 104 basis points to 11.1 per cent on December 6, due to liquidity injection through matured treasury bills. Although, the CBN auctioned N177.61 billion on December 5, the net withdrawal on December 6 was N49.6 billion.

    Olukunle Ezun, a Fixed Income and Currencies Analyst at Ecobank Nigeria Plc, said CBN’s liquidity management remains active and supported by the circular issued on August 1, tightening currency and the Monetary Policy Committee’s decision to leave the Monetary Policy Rate unchanged at 12 per cent.

    The naira weakened 0.2 per cent against the dollar in the Inter-bank on 6 December, despite CBN’s liquidity management efforts. It closed the week at N157.35 to a dollar.

    According to Ezun, although the CBN has supplied sufficient dollar at the twice-weekly Wholesale Dutch Auction System (WDAS) auctions, the auction process is devoid of the required competition needed to generate significant secondary market activity.

     

    Oil export/ corruption

    Oil exporting countries are more corrupt than they ‘should be’ than non-exporters, Renaissance Capital (RenCap), an investment and finance firm, said.

    A report from the firm said oil exporters constitute 18 of the 25 countries that are measurably more corrupt in the Transparency International (TI) survey than per capita Gross Domestic Product (GDP) measures suggest they should be.

    The worst performers, it said, include Equatorial Guinea and Kuwait, with scores at least 30 points lower on the 100-point scale than their peers.The next worst include Turkmenistan and Venezuela, while Greece, Italy and Afghanistan, were each 20 to 29 points lower than their peers.

    The remaining countries include Iraq, Kazakhstan, Russia, Kazakhstan and Ukraine. “These are countries in which debt investors may feel more comfortable, as they can bypass corruption problems by dealing in international courts when things go wrong. But there has been improvements. Russia, which was on the verge of being in Italy and Venezuela’s group, but in the past year, has clearly moved into the middle of the “slightly more corrupt” group,” the report said.

     

    IMF

    The International Monetary Fund (IMF) has developed a balanced view on the management of global capital flows to help give countries clear and consistent policy advice.

    In a statement, IMF said global capital flows have increased dramatically in the last decade, from an average of less than five per cent of global Gross Domestic Product (GDP) during 1980 to 1999 to a peak of about 20 per cent by 2007. In the past, countries’ capital accounts have ranged from almost completely closed to completely open and, while most countries have moved in the direction of greater openness, wide differences remain.

    It said the financial account in a country’s balance of payments covers a variety of financial flows, mainly foreign direct investment (FDI), portfolio flows including investment in bonds and equities, and bank borrowing which have in common the acquisition of assets in one country by residents of another.

     

    Financial inclusion

    The number of adults excluded from the financial system would drop to 20 per cent by 2020, Chief Executive Officer, Enhancing Financial Innovation & Access (EFInA), Ms. Modupe Ladipo, said. At the moment, no fewer than 34.9million Nigerians, representing 39.7 per cent are excluded from financial services.

    Unveiling the results of the EFInA Access to Financial Services in Nigeria’s survey, she said between 2008 and 2012, the number of adults that are financially excluded decreased by 10.5 million. She explained that the report was meant to measure trends in access and use of financial services in the country and establish credible benchmarks and indicators of financial penetration in the country.

     

    Recurrent expenditure for states

    The recurrent expenditure of the 36 states was 58 per cent of last year’s budget, FBN Capital, an investment and research firm, said.

    In a report obtained by The Nation, the firm said on the surface, states have a better mix of expenditure but recurrent items accounted for 58 per cent of their aggregate spending in 2011, capital items 38.9 per cent and extra-budgetary costs 3.1 per cent.

    It said personnel consumed 19.2 per cent of the total and overheads, a further 13.7 per cent, even as Federal Government’s minimum wage legislation pushed up the cost of salaries this year.

    At the Federal Government level, the firm said the rise in recurrent expenditure was affecting real sector funding and growth. It said personnel costs amounted to 36.5 per cent of total spending in 2011, and related overheads, an additional 14.3 per cent. Statutory payments to bodies, such as the National Judicial Council and the National Assembly, have accounted for 5.9 per cent of government expenditure year to date.

     

    Offshore Banking

    Banks with foreign subsidiaries have been advised to use resources in their host-countries to boost their operations rather than ship funds from home.

    In a statement, the Central Bank of Nigeria (CBN) urged them to raise funds from the offshore capital market through private placements or public offerings.

    CBN’s advice followed its earlier directive stopping banks from using local resources to fund their offshore subsidiaries. It also stopped quarantee of deposits for foreign subsidiaries.

    CBN Director, Banking Supervisions, Agnes Martins, advised that the banks could also pursue a merger or acquisition; or if external capital raisings fail, submit a strategy for exiting the relevant foreign jurisdictions to the regulator.

    The directive also barred Nigerian banks from guaranteeing the deposits of their foreign subsidiaries and mandates banks with foreign subsidiaries to submit plans showing that their subsidiaries are fully capitalised in line with Basel II and III accords.

     

    Cheque transactions

    The value of cheque transaction declined by 13.5 per cent to N10 trillion during the first half of the year over increasing use of electronic payment. In a Central Bank of Nigeria (CBN) report on the first half of the year released last week, it said the value of electronic card (e-card) transactions rose by 32.8 per cent to N1 trilion from N764.14 billion in the first half of 2011.

    Data on various e-payment channels for the period under review indicated that Automated Teller Machine (ATM) remained the most patronised, accounting for 96.4 per cent, followed by mobile payments with 1.3 per cent and Point of Sale (PoS) terminals, 1.2 per cent. The web (internet) was the least patronised, accounting for only 1.1 per cent of total e-payment transactions.

     

    Financial Inclusion

    The number of adults excluded from the financially system would drop to 20 per cent by 2020, Chief Executive Officer, Enhancing Financial Innovation & Access (EFInA), Ms. Modupe Ladipo, has said.

    At the moment, no fewer than 34.9million Nigerians, representing 39.7 per cent are excluded from financial services.

    Unveiling the results from the EFInA Access to Financial Services in Nigeria’s survey, he said between 2008 and 2012, the number of adults that are financially excluded decreased by 10.5 million.

     

    NDIC

    Microfinance banks (MfBs) that fail to live up to the legal requirement will be closed next year, the Managing Director, Nigeria Deposit Insurance Corporation (NDIC), Umaru Ibrahim, has said.

    Speaking at a briefing in Lagos, he said that some MfBs have not lived up to expectations and have refused to pay their premiums to the corporation.

    He said as at September 30, 2012, 698 MfBs and Primary Mortgage Institutions (PMIs) paid N980.79 million as premium to the corporation as against N1,06 million collected from 765 MfBs in the same period in 2011, representing a decline of 8.02 per cent.

    As at September 30, 2012, 130 MfBs and 20 PMIs could not be assessed for premium collection as they failed to submit their certified deposit statements as well as call reports since December 31, 2011.

    He said the corporation is still prevailing on the banks to ensure that it obtains their certified deposit liabilities statements or call reports. Ibrahim also said the Central Bank of Nigeria (CBN) is also considering issuing new licences to MfBs that want to enter the market.

     

    Bank to bank report

    Ecobank Capital, the investment banking division of the leading pan-African bank, Ecobank, has announced that it has successfully raised a $202 million syndicated credit facility on behalf of IHS Holding Limited, Africa’s largest independent mobile infrastructure provider.

    In a statement, the firm said the proceeds will be used as part of IHS’s acquisition of MTN Group Limited’s 1,757 mobile network towers in Cameroon and Côte d’Ivoire with the continuation of IHS’s solar energy and build-to-suit programmes for other wireless operators.

    IHS Holding’s Chief Executive Officer, Issam Darwish, said he is happy with Ecobank, the co-arrangers and participating banks. “The facility was oversubscribed and securing this credit facility reaffirms our excellent reputation on the local and international credit markets. We are delighted the consortium shares our long-term vision of creating an indigenous force in mobile network infrastructure and collectively has the financial capacity to support our pan-African expansion,” he said.

    The Fidelity Helping Hand Programme (FHHP) instituted by staff of Fidelity Bank Plc to assist to support communities has donated some educational materials to Ikoyi Primary School. The group has also renovated the nursery section of the school to enable the pupils to have a more conducive environment for learning.

    The bank’s Assistant General Manager, Public Sector Richard Madiebo said the THE Programme is the staff’s way of supporting the society.

    He said the initiative has helped many people, schools and community to live better lives and achieve success in their different endeavours.

     

  • Oil workers threaten to shut down Onne FTZ

    Oil workers, under the aegis of the National Union of Petroleum and Natural Gas Workers (NUPENG) and the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) have threatened to shut down oil and gas operations in the Port Harcourt zone if anti-labour practices in Onne Free Trade Zone do not stop in three weeks.

    The zone comprises Rivers, Bayelsa, Akwa Ibom, Cross River, Imo, Enugu, Abia, Ebonyi, Anambra and Benue states.

    In a communique at the end of a joint NUPENG and PENGASSAN (NUPENGASSAN) National Executive Council (NEC) meeting in Calabar, Cross River State, the groups expressed worry about the alleged continuing anti-labour practyices by companies in the zone, saying its authorities and the firms have refused to heed the advice by the Labour Minister to respect the rights of workers to join trade unions.

    They accused the firms and FTZE management of maltreating their workers.

    ”We observe that managements of the various companies in the Free Trade Zone continue to harass, intimidate and victimise workers. Consequently, NEC-in-session hereby directs the Port Harcourt Zone of NUPENG and PENGASSAN to shut down all oil and gas operations in Rivers, Bayelsa, Akwa-Ibom, Cross River, Imo, Enugu, Abia, Ebonyi, Anambra and Benue States if these matters are not resolved within three weeks.”

    The workers also reminded Rivers State Governor, Rotimi Chibuike Amaechi, of the agreement reached at the joint meeting of NUPENGASSAN on September 20, 2010, at Aldgate Congress Hotel, Port Harcourt, on the state social levy.

    The agreement, they added, was a review of the levy for those that earn below N100, 000 to be treated as workers in the public sector; inclusion of two representatives of NUPENG and PENGASSAN on the Board of Governors of the new schools; commitment that the rate of the social services levy would not be subject to further review; and the inclusion of the TUC on the Board of Trustees of the Social Service Contributory Trust Fund.

    The workers reminded the government of the commencement date of the law.

    They called on Governor Amaechi to honour the state government‘s side of the bargain.

  • JTF arrests two Shell officials for oil theft in Rivers

    The Joint Task Force (JTF) has arrested two officials of the Shell Petroleum Development Company of Nigeria Limited (SPDC) in Rivers State for oil theft.

    Operatives of the JTF, codenamed Operation Pulo Shield, on Monday night arrested Bori Friday and Young Apahia at Kporgho-Ogoni in Gokana Local Government Area and handed them over to the Nigerian Security and Civil Defence Corps (NSCDC).

    The suspects are Shell’s surveillance workers.

    Spokesman of the 2 Brigade, Nigerian Army, Bori Camp, Port Harcourt, Maj. Michael Etete, who doubles as JTF Sector 2 spokesman said the suspects were arrested at about 9:30pm.

    Etete said: “Troops of Sector 2, JTF Pulo Shield on patrol discovered an illegal connection on SPDC’s pipeline in Kporgho.

    “Two SPDC surveillance staff were found on the scene and were suspected to be responsible for the vandalism. The two suspects were arrested and transferred to NSCDC, Rivers State Command, for prosecution.

    “All oil companies are advised to weed out persons of questionable character in their employ.”

    He said JTF is committed to ending crude oil theft and illegal bunkering.

    Shell spokesman Mr. Precious Okolobo refused to comment on the arrest

     

  • Season of oil well disputes

    It will not be out of place to posit that the country is currently entangled in fierce disputes for rights to oil wells among its constituents. From Cross River to Akwa Ibom, Rivers to Bayelsa and Anambra to Kogi, the story is the same. Not unexpectedly, these have pitched the disputant communities against themselves with fears that the smouldering controversy may lead to the break down of law and order. Though the dust of the 76 oil wells which Cross Rivers state was made to cede to its sister state of Akwa Ibom is yet to fully settle, the federal government has in its hands two new serious agitations to grapple with. The first is that between Rivers and Bayelsa states over alleged attempts to annex ancestral lands, communities and oil facilities located in Kalabari land in Rivers to Bayelsa state.

    The matter came to a head last week when elders and chiefs under the aegis of the Kalabari National Forum staged protests in Abuja and Port Harcourt to underscore their seriousness on the issue. President Goodluck Jonathan was fingered as the brain behind the attempt to forcefully cede five Rivers oil communities to Bayelsa.

    As should be expected, the presidency has denied the allegation accusing its sponsors of nursing a hidden agenda of instigating conflict between the Ijaw people of Nembe and Kalabari in Rivers and Bayelsa states.

    Equally, the dispute between Anambra and Kogi states also hinges on the right to oil fields in the just commissioned Orient Oil Refinery built by the Anambra State government. Kogi and Enugu states had soon after the declaration of Anambra as the 10th oil producing state made claims to oil wells servicing the refinery. But the dispute has largely narrowed down to Anambra and Kogi states.

    In its reaction, Bayelsa state government came out very strongly laying claims to the oil wells.

    While denying the allegation of any attempt to forcefully annex any territory or people into Bayelsa State, it claimed that the 11th edition of the administrative map of Nigeria published in 2000 placed the said communities within the territorial boundaries of state. According to them, “it is very common in the Niger Delta given the manner states were created for communities or clans to be in one state while part of their ancestral land is in another. The family, clan or community does not cease to be traditional owners of such lands, while the state in which the land forms a part exercise administrative control over such land and therefore entitled to derivation”.

    But the Rivers state government has countered querying the intention of the Bayelsa State government in singling out the 11th edition of that map while remaining curiously silent on the 1st to the 10th. It accused Bayelsa of concealing vital information in the case as the oil wells had been part and parcel of Rivers state. According to governor Amaechi, even the federal government had admitted in court that the 11th edition being bandied by the Bayelsa State government was an error which is evident from the first to the 10th editions. They said it was wrong to have released monies to Bayelsa State instead of paying them into an escrow account pending the resolution of the boundary dispute as directed by the Supreme Court.

    In its own case, Kogi State Governor Idris Wada claimed that the oil wells servicing Orient refinery are located in his state. For that, he said Kogi is major stakeholder in the refinery. But Governor Peter Obi of Anambra disputes this arguing that the land and the wells are within the territorial boundaries of his state. He gave a history of the refinery and the huge investments made on it with the monies of the Anambra people and wondered why the claimants waited for the refinery to come on stream before coming up.

    The simmering crises between these states have once again drawn attention to some salient issues that are central to the peace, progress and development of this country. First, they have exposed the inherent weaknesses in our sole reliance on oil as the only source of revenue. Because of this mono-cultural economy and the advantages that accrue to oil bearing states, people are prepared to go to any length to lay claim to lands suspected to have oil deposits. Secondly, they also brought to the fore, the inherent flaws in the way states were created in this country by the military. That is why the Kalabari people have their communities and ancestral lands in Bayelsa even when they are in Rivers State.

    It meant that such crucial variables as contiguity, cultural affinity and the need to respect the culture and living patterns of a people were not given due consideration. The right thing would have been for the Kalabari people together with their communities, lands and villages to form part and parcel of Rivers State where they rightly belong. Had it been so, the current fierce dispute between the two states would have not arisen in the first instance. There is definitely something anomalous in having a people belong to one state while their villages and lands are in another.

    There is also every thing wrong in allowing such an untidy situation linger for several years after Bayelsa State had been created. What this implies is that the exercise separated the Kalabaris’ from the relics of their identity as a people. Instead of properly delineating boundaries such that they coincide with that of the state in which they form part of, they are split between two states. Its result is now the situation in which they are denied the benefits of what nature has bountifully placed at their back yard. It is inconceivable how the derivation money paid to Bayelsa will be used for the benefit of the Kalabari people who own the land but live in Rivers.

    Had there been proper delineation of boundaries, the current recrimination between the two states would not have arisen.

    This point can be gleaned from the contention of the Bayelsa State government that by the manner states were created, communities that found themselves in some states had ancestral lands, communities and villages in another. This is anomalous and at the root of the current disputations. It is also a huge puzzle that relevant federal agencies are relying on the so-called 11th edition of the map without reference to the 1st to 10th editions. The interpretation is that by being silent over the position of these editions, they have something to hide. It will be very interesting to know the position of these editions; at what point the map changed and the reasons for it, more so as the President has been fingered in the current imbroglio.

    In all therefore, Jonathan has a serious burden to discharge given the consistent accusing fingers being pointed at him by the Rivers people. It is not enough to say that the statutory bodies handling the matter are independent. The Rivers people have been unequivocal in their claim that those bodies are under undue pressure from the presidency. And this should not be a surprise given the way things are handled in this country. Nobody will be surprised that politics may take the centre stage in resolving these issues. But nothing should be done to scuttle the visionary initiative and huge investments of the Anambra people in Orient Refinery, the ambitions of later day claimants notwithstanding.