U P D A T E SMONTHLY BASKET PRICE

Jan-12 111.76

Nov-11 110.08

Sep-11 107.61

Jul-11 111.62

Apr-11 118.09

Feb-11 100.29

Mar-11 109.84

May-11 109.94

Jun-11 1109.04

Aug-11 106.32

Oct-11 106.29

Dec-11 107.34

Feb-12 110.72

A Vanguard Monthly Review Of The Energy IndustryFEBRUARY, 2012VOL 03 N0. 33

24

108

104

100

92Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Jan-12 Feb-12Feb-11 Dec-11

Daily | Weekly | Monthly | Yearly 110.82US

96

112

116

120

16

A palliative, a burden

NIGERIA’S FUEL SUBSIDY:

N R S SAYIGE IAN

NO REMO A F F E S B Y

TO V L O U L U SID

Oil companies cut jet fuel prices by 3 per cent, reports

ccording to some reports, the Aoil companies in India have reduced the price of aviation turbine fuel (ATF) by as much as Rs. 1,974 per kilolitre or 3.02 per cent to the level of Rs 62,908 per kl, bringing some relief to the cash-strapped aviation firms in the country.

‘I’ve been very disappointed’ – Senator Abe

Canada, India get BPE nod for due diligence on TCN

COVER

OIL

FOCUS

FEEDBACK

Contents488

1616

2323

2727 FINANCE

2

GAS2121

POWER2424

3434

COMMUNITY DEVELOPMENT

3131 INSURANCE

LABOUR

4949

We represent generations of marine pilots

NASS task ministry on development of steel sector

Canada, India get BPE nod for due diligence on TCN

UNEP report: I’ ve been very disappointed-Senator Abe

NEITI backs move to reintroduce PIB in National Assembly

Power sector is too sensitive to be toyed with

4040

3838

Subsidy: EFCC grills petroleum importers, marketers

FREIGHT

4545 TECHNOLOGY

SOLID MINERALS

Sweetcrude is a publication of Vanguard Media Limited

Nigeria’s subsidy: A palliative, a burden

WGC 2012 moves to sustain future global gas growth

Fuel subsidy has not benefited Insurers

Effective oil spill response techniques and prevention

Ijaw communities in Delta, Bayelsa lay siege to Shell

R j s u vi e ye oth r IGE IA has u t s r v d t an e

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e d nfo mat on ou foll us oe r d re ortswww.swe tc u e p .com .

EDITORHector IGBIKIOWUBO

CORRESPONDENTS

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THE TEAM

MANAGER, MARKETINGUbong NELSON

Drilling of Chevron Nigeria’s relief well to last 100 days

Century EnergryAd

4Cover Story

CONTINUES ON PAGE 5

A palliative, a burden

NIGERIA’S FUEL SUBSIDY:

Protesters

The outcome of the ongoing probes of subsidy payments f o r p e t r o l a n d k e r o s e n e i n

Nigeria may make or mar F e d e r a l G o v e r n m e n t ’ s d e r e g u l a t i o n p o l i c y . I n d i c a t i o n s a r e t h a t government’s handling of the outcome of the probes would d e t e r m i n e t h e k i n d o f investments flow that will jump s t a r t t h e d o w n s t r e a m petroleum sector.

S p e c u l a t i o n s a r e r i f e regarding the outcome of the plethora of probes going on in the downstream, as almost every establishment, public or private is caught up in the web of intrigues that trail the

subsidy regime.While the National Assembly

strives to unearth what went wrong to shoot up the subsidy payments from the initial N150billion in 2006 to a whopping N1.73trillion five years after, not to mention outstanding subsidy payment claims in excess of N500 billion, the Economic and Financial Crimes Commission, EFCC, has also commenced its investigation of marketers who may have been involved in the subsidy sleaze through various sharp practices.

Already, reports indicate that the Lawan Farouk-led House of Representatives Committee, leading the legislative probe is under intense pressure from

the ruling People’s Democratic Party, PDP, and the Presidency over the ongoing investigation into the management of the petroleum subsidy regime.

f carried to its logical Iconclusion, analysts are of the view that the subsidy probes will open up a ‘can of worms’ even worse than the one unearthed by the Central Bank of Nigeria, CBN, during the financial industry purge.

The mere thought of the fallout is not only giving the Presidency the jitters, as key officials in the industry will be affected, but also making the Peoples Democratic Party, PDP, very uncomfortable as it demonstrates the high level of

corruption tolerated in the PDP-led government.

A rude shock

igerians woke up on NNew Year day to the

reality of a 116 percent increase

in the pump price of premium

motor spirit, PMS or petrol,

from N65 to N141/Litre without

any warnings – making it one of

the highest ever single pump

price increase in Nigeria’s

petroleum history. Government

had through the Petroleum

Products Pricing Regulatory

Agency, PPPRA, announced the

sudden removal of subsidy on

petrol without outlining any

framework for the purported

deregulation of the downstream

sub-sector. Interestingly, the

PPPRA melted into the shadows

soon after the announcement,

leaving many unanswered

ques t i ons and a l l owing

innuendos and suppositions to

run wild.It was a herculean task for

organised labour and civil society groups to achieve a reduction in price to N97/L, representing over 49 percent increase on pre-January 1,

levels and majority of Nigerians are yet to come to terms with the shock and the aftermath of the increases. About N1trillion was estimated to have been lost to the nationwide strikes that paralyzed economic activities in protest of the price hike.

The new pricing

Kerosene is technically

referred to as House-hold

ke r o s e n e , H H K a n d i s

presumably still under full

subsidy at N50/L, unlike petrol,

which subsidy level has been

reduced.Ironically, kerosene, which is

the domestic fuel for the poor Nigerians, is actually more expensive than other petroleum products. According to the PPPRA’s pricing template, and based on exchange rate of N159.76 to $1, the expected

Open Market Price, OMP, for kerosene when you include landing cost and margins is N162.62/L. Petrol on the other hand is N146.12/L. Automotive gas oil, AGO or diesel, which has been fully deregulated since 2003, sells for an average of N160/L.

Subsidy is a reimbursement to petroleum marketers for selling below the market price, and in the year under review, the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke told the lawmakers under oath that over N250billion was paid as subsidy for kerosene alone in 2011.

ut the reality is that apart Bfrom the NNPC outlets, there is no other outlet anywhere in Nigeria where kerosene is sold at the subsidised price. The product sells for between N100 and N250/L depending on outlet and location. It is only in Lagos, Abuja, some states in the west and Port Harcourt that petrol is sold at the regulated price.

Some faceless ‘cabals’ have

been condemned for being the

beneficiaries of the petrol

subsidy, but government is yet

to tell Nigerians who the

beneficiaries of the kerosene

subsidy are.

Yet in addition to the subsidy,

these products also attract

reimbursement from the

Petroleum Equalisation Fund,

PEF, or bridging for haulage to

far flung distances.According to the Petroleum

E q u a l i s a t i o n F u n d (Management) Board, the PEFMB Act of 1973 seeks “to e q u a l i s e t h e c o s t o f t r a n s p o r t i n g p e t r o l e u m products from depots to Marketers sales outlets (filling stations).”

“This is to ensure that petroleum products are sold at uniform prices throughout the country. The Fund, which derives its main source from the net surplus revenue recovered f r o m O i l M a r k e t i n g

Some faceless ‘cabals’ have been condemned for being the

beneficiaries of the petrol subsidy, but government is yet to

tell Nigerians who the beneficiaries of the kerosene

subsidy are

5Cover Story

CONTINUES ON PAGE 6

A palliative, a burdenNIGERIA’S FUEL SUBSIDY:

Nigerian protesters

CONTINUED FROM PAGE 4

Companies, is utilized for the reimbursement of petroleum products marketing companies for any losses sustained by them solely and exclusively as a result of sale, by them, of petroleum products at uniform prices throughout the country.”

Since the January 1, subsidy slash, the PPPRA has constantly changed the pricing template, which was exclusively reported in the Vanguard. Currently, the price regulator has changed the template yet a third time, but this time around it has excluded the contentious benchmark price, which it prescribed for the pumps and the depots. The appellate has changed to regulated retail price.

For both kerosene and petrol, about 20 cost elements make up their retail prices.

Inflation on the rise

Prices of goods and services

shut to the roofs, even after the

pump price reduction to N97/L,

prices of consumer goods

especially food items and

transportation rose by between

150 and 300 percent.Al though the Nat ional

Bureau of Statistics, NBS, has not released the composite consumer price index, CPI for t h e m o n t h o f J a n u a r y, according to the bureau as at December, inflation rate was

10.3 percent.But the CBN Governor,

Sanusi Lamido Sanusi, at the l a s t M o n e t a r y P o l i c y Committee, MPC meeting in January, noted that the removal of fuel subsidies is an upside risk to the CPI outlook.

“The MPC stressed the mild rebound in inflation in recent months (10.5 per cent y/y in Oct, from 10.3 per cent y/y in Sep), but suggested that the immediate outlook for the CPI was relatively mixed and would benefit from the lagged effect of the sharp t ightening in monetary policy this year.

In a related development, we suspect the main risk to the inflation trajectory stems not so much from depreciation, which will be offset by increasingly positive base effects in global food and oil prices in the coming months, but from the likely removal of fuel subsidies in 2012.”

ome states like Rivers, Stook the liberty after the January 1 price hike to put in place its brand of subsidy, where petrol would not sell above N137/L in order to keep the cost of transportation within the state low to the chagrin of other marketers.

Through some agreements with the state branches of the I n d e p e n d e n t Pe t r o l e u m Marketers Association of Nigeria, IPMAN, and the

National Union of Road Transport Workers, NURTW, the State Governor, Chibuike Amaechi, announced that the government would pay for the petrol allocations to the state for IPMAN, to keep the pump prices lower than PPPRA’s prescribed amount to keep transportation costs would not exceed N100 in the Port Harcourt metropolis.

It is however, not clear what

became of these agreements

following the reduction of petrol

price to N97/L.

Probes take toll on industry

The pressure since the

subsidy probes began is

beginning to take a toll on

downstream operations.

One of the marketers who

spoke with Sweetcrude in

confidence noted, “Let the

investigators do whatever they

have to do in such a way that it

doesn’t weaken the system and

trigger another round of acute

fuel shortages.”This, he said is because

marketers have had to abandon their regular businesses for the probes. “On the one hand, everybody that is somebody in the sector has been invited by the lawmakers, and on the other, the EFCC is hounding us to know who stole what subsidy money.

“We no longer have time to pursue credit to run our operations, and even the banks have become more reluctant to give us credit because they no longer believe in what we are doing, since we have all been tagged ‘cabals’ that are fleecing poor Nigerians.

“When you put all these

together, productivity is fast

dropping and pushing the

Prices of goods and services shut to the roofs, even after the pump

price reduction to N97/L, prices of consumer goods especially food items and transportation rose by

between 150 and 300 percent

Crude oil prices see mixed fortunes

ONDON – Crude oil prices traded mixed on L

the international market, Thursday, as traders balanced ongoing Iranian tensions with stubborn concerns over the outlook for global energy demand.

While New York’s main c o n t r a c t , We s t Te x a s Intermediate (WTI) crude for delivery in March, fell 35 cents to $97.26 a barrel, Brent North Sea crude for March delivery rose 43 cents to $111.99 a barrel in London morning deals.

Andrey Kryuchenkov, VTB Capital analyst, said: "Crude futures were mixed over the past week as geopolitics were still underpinning Brent, while WTI remained under pressure from persistent demand concerns."

T h e o i l m a r k e t s l i d Wednesday as new US government data showed a slower pace of petroleum consumption.

Encouraging economic data especially from China, where manufac tur ing ac t iv i t y expanded in January, helped the oi l pr ice ear ly on Wednesday.

Norway's Aker awarded $4m contract in Ghana

CCRA - Norway’s Aker ASolutions has won a contract to provide well intervention services for Tullow Ghana’s Jubilee and Tano deepwater fields.

Aker says the contract will fetch it revenues of about $4 million.

Aker has been working with Tullow on Jubilee field since 2008, and wil l provide slickline and coiled tubing equipment and services under the deal.

The company said the contract will last for an initial period of three years, though it also has two additional one-year options, .

Wolfgang Puennel, head of Aker's well intervention solutions, said the deal would give the company a solid long-te r m out look fo r the i r operations.

BREAKING NEWSBARBING N500A ROOM N6000SHOP N15,000

PURE WATER N20

6Cover Story

CONTINUED FROM PAGE 5

CONTINUES ON PAGE 7

A palliative, a burdenNIGERIA’S FUEL SUBSIDY:

Group of protesters

REMOVE CORRUPTION

NOTSUBSIDY

NIGERIANS HAVE SPOKEN

industry on the down side. And

if care is not taken, products

scarcity is looming large.”

The Probes

The Senate opened the first

round of probes to know what

went wrong and labeled some

petroleum marketers and

impor ters s cabals who

benefitted from fuel subsidy

payments. Then the EFCC on

the invitation of the Minister of

Petroleum Resources, Mrs.

Diezani Alison-Madueke, went

after who got what. Although

the Senate probe is still

pending, the House probe is

well under way and may have

taken the wind out of the sail of

that of the Senate.The Senate Committee

Chairman, Senator Magnus Abbe, noted: “There are some loose ends arising from the public hearing that members want to tidy up before we can draw conclusions on those issues. He promised that the probe would be brought to a logical conclusion

For sure, the House six-day

probe was the most elucidating even as it was very dramatic. But for the seriousness of the issue, it would have been even comic.

However, it was quite pathetic and shameful that all the representatives could not agree on the basic facts of a system they are all involved in.

he Minister of Finance, TD r. N g o z i O ko n j o -Iweala, whose ministry is in charge of disbursing the s u b s i d y f u n d q u o t e d N1.3trillion, her petroleum ministry counterpart, Madueke said it was N1.5trillion, Sanusi the CBN governor later dropped the bomb that the v a l u e w a s a c t u a l l y N1.74trillion. Exactly how much did Nigeria pay for subsidy in 2011?

But beyond the amount, the probe revealed the level of e x e c u t i v e r e c k l e s s n e s s exhibited by some government officials in the discharge of their

duties:

When did the PPPRA Board

meet to decide on January 1

subsidy removal?Who approved the increase in

the appropriation for subsidy from N250billion as budgeted to above NN1.7trillion?

W h o g a v e N N P C t h e permission to deduct its subsidy payments at source without reference to the Federation A c c o u n t s A l l o c a t i o n Committee, FAAC?

Why did the NNPC abandon

its storage facilities in favour of

throughput arrangements with

private depots that cost

government a minimum of

N3million for the period of

discharge?

What is the actual national

daily consumption level for

each of the products under

subsidy?

If 35 million litres is the daily

requirement, how come 59

million litres was being

imported?

What is the refining capacity

of the NNPC refineries for each

of these products?

There are indications that due

process was thrown to the wind

as long as certain pecuniary

interests were protected, so

much that former Finance

Minister, Dr. Kalu Idika Kalu,

admitted that “impunity has

developed within the system

and the political class is

responsible for the decay.”

Official responses? The urgency of the subsidy

removal made Nigerians wonder if the country was broke. But Coordinator of the Economy, Okonjo-Iweala said: “Nigeria is not broke. But if we do not take proper measures now, in the next five years, we will be going down the line. The removal of subsidy will enable the downstream sector to open up and investors will come in because investors won’t have survived and made profit at N65/L. ”

? Giving an insight i n t o w h e n t h e f e d e r a l government decided to remove subsidy on petrol , CBN governor, Lamido said: “The decision to remove subsidy on petrol was effectively taken

Let the investigators do whatever they have to do in such a way that it doesn’t

weaken the system and trigger another round of acute fuel

shortages

KAMPALA - Tullow Oil of

the United Kingdom has

signed new production

sharing agreements (PSAs)

w i t h t h e U g a n d a

government.It is good news, coming

despi te the cont inued stalling of its planned farm-out of its stakes in some oil blocks in the East African country.

Tullow’s proposes a $2.9 billion sale of stakes in three blocks to China National Offshore Oil Corporation (CNOOC) and France’s Total, which has failed to m a t e r i a l i s e o v e r disageements on contractual terms.

Tullow said in a statement on Friday that it has signed PSAs with the Ugandan government for the EA-1 and Kanywataba licences in the Lake Albert Rift basin, and has also been awarded the K ing f i she r p roduc t ion licence.

"As a result of this signing, Tullow will now finalise arrangements with CNOOC and Total for completion of the farm-down and the related transfer of monies as soon as possible," the company said.

A Tul low spokesman confirmed that the signing of the two PSAs for EA-1 and Kanywataba had "resolved all outstanding issues related to the farm-downs in the three blocks and all parties were now happy for the process to go through".

Chief executive Aidan Heavey sa id : "Today ' s signing is a vital step towards the development of the Lake Albert Rift basin and the oil and gas industry in Uganda and East Africa."

T h e L o n d o n - l i s t e d company’s share price rose on the news by about 55pence, or 3.7%, and was trading at £14.95 ($23.70) at 09:46 GMT.

Uganda

Tullow signs new production agreement with Uganda govt

7Cover Story

CONTINUED FROM PAGE 6

Group of protesters

A palliative, a burdenNIGERIA’S FUEL SUBSIDY:

even before the elections. All economic system needs to be cleaned out and be above board. The solution is not to keep looking at short term comforts but taking difficult decisions. ”

?A l l i son-Madueke a l so confirmed that the N250billion appropriated for subsidy in 2011, was actually meant for just the first quarter, which meant that subsidy was to be removed on April 1, 2011.

? A l l i s o n - M a d u e k e , explaining how the subsidy rose to the trillion mark said: “The dramatic change in the level of subsidy was due to increase in national demand to 35million litres/day, sometimes more, as well as increase in the price of crude on the international market, increase in population, and increase in the cost of bridging of products… our borders are very porous, and smuggling will remain a major issue as long as subsidy remains.”

?Honourable Farouk Lawan, Chairman of the House Committee leading the probe disputes the cause for the astronomical rise as he noted: “If you work out the difference between N65 and N141/L, multiply that by 35 million litres/daily, you find that the figure still falls far short of N1.5trillion. Why should Nigerians be made to pay for illegal smuggling when those responsible for manning the borders are not doing their jobs?”

?Prof Assisi Asobie clarifying why the subsidy figures will never add up said: “Due to the i n c o n s i s t e n t d a t a f r o m P i p e l i n e s a n d Pr o d u c t s Marketing Company, PPMC, (the commercial arm of the NNPC), we can’t determine the volume of imported products, therefore, and we can’ t determine the actual cost of subsidy for the products.”

? J u l i u s N w a g w u , r e p r e s e n t a t i v e o f t h e Compt ro l l e r Genera l o f Customs, said: “Imported PMS does not come with Form M to Customs (as required by law), vessels importing PMS into the country are referred to as mother vessels, but they never get to port in Nigeria but are anchored offshore. So it can be offshore Cotonou, offshore Lome or wherever it is, and there are smaller vessels that pick these products to the ports, so Customs does not board or rummage these vessels.”

Subsidy regime

Subsidy is the brain child of

former President Olusegun

Obasanjo, which became

operational in March 2006. But

prior to deregulation, the

Obasanjo-led government

announced the take off of

liberalisation and deregulation

by September 30, 2003.The policy followed the

findings of the Special Review Committee on Petroleum Supply and Distribution, popular ly ca l led Mantu Palliative Committee, set up in 2001, to look into the causes of perennial products scarcity.

After a nationwide tour of downstream facilities, the committee, among others, called for the setting up the Petroleum Stabilisation Fund, later tagged the Petroleum Support Fund, PSF, which was finally agreed to by Obasanjo on October 1, 2005, during his

Independence Day broadcast. The then Chairman of

P P P R A , C h i e f Ra s h e e d Gbadamosi, clarifying how the facility will be funded said: “The PSF shall be financed from the following sources, n a m e l y : A l l t i e r s o f Government – Federal, States and Local.

“Accruals realised during the

period of over recovery (over

recovery here refers to the

period when the PPPRA

recommended price is higher

than the market determined

price).”He listed the guidelines

eligibility to the fund to include:

An importer should be an Oil

M a r k e t i n g C o m p a n y

registered with the Corporate

Affairs Commission (CAC).A Claimant/Beneficiary is

expected to possess the following:

Proof of Ownership of storage

facilities with a minimum

storage capacity of 5,000 metric

tonnes for the particular

product as well as dispensing

facilities (retail outlet network).Department of Petroleum

Resources (DPR) import permits.

Ability to finance a minimum cargo size of 5000 MT of products under the Fund.

The products are expected to arrive the country on schedule and should conform with products specification based on requirements set by the DPR/Standards Organisation of Nigeria, SON.

In view of the revelations from the probes, in many cases, all of these criteria were ignored, and the PSF which was meant to be a palliative, is n o w a b i g b u r d e n f o r government and Nigerians.

The products are expected to arrive the country on schedule and should conform with products specification

based on requirements set by the DPR/Standards Organisation of

Nigeria, SON

Tullow ‘Could Double Production’ in 5 Years after Ugandan Deal

h e n e w s t h a t t h e

Ugandan government Thas finally awarded the U.K.

oil firm three production

l i c e n s e s b r i n g s “ ex t r a

flexibility” to its balance sheet

Oi l indus t r y ana lys t s

welcomed news from U.K.

firm Tullow Oil Friday that it

had finally been awarded

three production licenses by

the Ugandan government,

with some who follow the

company suggesting that

Tu l l o w c o u l d d o u b l e

production during the next

five years.

New production sharing

agreements (PSAs) cover the

E A - 1 a n d K a n y w a t a b a

licenses in the Lake Albert Rift

Basin, while Tullow has also

been awarded the Kingfisher

production license.

Tullow watchers expect the

deal to ultimately unlock $10

billion worth of investments,

which include Uganda’s first

refinery and a pipeline to the

Indian Ocean, in the country’s

nascent oil sector. Ugandan

geologists have indicated that

there could be as much as six

billion barrels of oil in the

country.

The deal takes any funding

concerns that Tullow might

have “off the table”, according

to analysts at Bank of America

Merrill Lynch.

“Crucially, closing the

Uganda deal is key to

[bringing] extra flexibility to

the balance sheet, particularly

as TLW has embarked on a US

$2 billion capex program this

year. Concerns over TLW

funding position now prove

completely overstated and we

believe that this news should

allow the market to focus on

the strong fundamentals that

the company offers,” said the

investment bank.

BoAML added: “We believe

that the development of the

Tweneboa/Enyenra (TEN)

complex along with new

phases of the Jubilee field and

Uganda could easily double

TLW’s production over the

next five years.”

“This will further ease

Tullow’s balance sheet and

gives them the go-ahead to

finally start producing from

the basin,” said Anish

Kapadia, an oil analyst at

Tudor Pickering Holt.

Oil 8

igerian CONTENT INITIATIVECONTENT INITIATIVECONTENT INITIATIVECONTENT INITIATIVE

Dr. Ibilola Amao

Subsidy: EFCC grills petroleum importers, marketersOscarline ONWUEMENYI

Mr. Lamorde

The rally against the removal of subsidies has not solved the root cause of problems in the Nigerian Oil and Gas Industry which is primarily corruption and the over

bloated cost of governance. If an all encompassing National Petroleum Regulator Body (NPRB) is created and empowered as a regulator with a target to achieve a specified % return on investment vis-à-vis the value of our natural resources (oil and gas) through upstream, midstream and downstream activities, Nigeria would move forward.

The NPRD would have to tackle the following issues:1.lack of an auditable regulatory process for the supply of goods and services, especially in the midstream and downstream sectors2.Violation of the Public Procurement Act in the purchase of goods and services3.Accountability and transparency, especially in public service.

What would this mean to the industry?1.Adequate funding will be required for the NPRD without recourse to NNPC Management, the Minister and the Presidency2.Publishing of Annual Audited Accounts would become mandatory3.Publishing of Work Programmes of Asset Holders4.Assessment of players, their facilities and activities to ensure value added and Nigerian Content.

The NPRD would operate a National Data Repository (NDR) System that would be live, active and accessible from anywhere in the world if investors are to take any meaningful interest in the Nigerian Oil and Gas Industry. Information on assets (Pipelines, Facilities, Concessions, Oil and Gas Wells, Oil and Gas Fields as well as Exploration and Production Data), fiscal and tax regimes must be readily available to investors. Production, sale and refined volumes as well as imported products should be known whilst the purchased, delivered and dispensed volumes at every filling station in Nigeria would be tracked, monitored and published. From the national budget and that of NNPC, the Central banks disbursements to the major and minor marketers through PPPRA, PPMC and NNPC we would be much closer to understanding where there are leakages, what the short falls are and if Nigeria needs more refineries, where they should be strategically located to meet demand realistically.

Whilst Clause 2 of the NOGICD Act states that:” All regulatory authorities (DPR & PPRA inclusive), operators, contractors, subcontractors, alliance partners and entities involved in ANY project, operation, activity or transaction (buying of finished products) in the Nigerian oil and gas industry shall consider Nigerian Content as an important element of their overall project development and management philosophy for execution”, this is not the case in the downstream of the Nigerian petroleum industry. The Act has failed to capture the midstream and downstream sectors functionally. PPPRA has failed in delivering Nigerian Content (Value Addition) and many of the goals and objectives captured its original mission

A fully empowered and all encompassing NPRD would through collaboration with NCDMB be the best regulator of the activities of the IOCs, NOCs, Independents and Indigenous contractors through stakeholder evaluation, assessment and monitoring programmes that are tied to license renewal.

Empowering a national petroleum regulatory body (NPRB) for value AdditionA

BUJA As part of its investigations into management of the petroleum subsidy in the country, the

Economic and Financial Crimes C om m i s s i on , EF C C , h a s interrogated more than twenty major o i l impor te rs and marketers in respect to their transactions with government over the past few years.

Re p r e s e n t a t i v e s o f t h e importers, including most of the international oil and gas companies operating in the country, were invited over the past week to report to the Commission's headquarters in Abuja to answer questions over their roles in the importation and distr ibution of petroleum products.

The Acting Head of Media and Publicity in the EFCC, Mr. W i l s o n U w u j a r e n , w h o confirmed the exercise to our correspondent in Abuja, also d i s c l o s e d p l a n s b y t h e Commission to contact relevant international agencies and banks abroad in an effort properly assess the involvement of shipping agencies, vessels and refineries.

Ac c o r d i n g t o h i m , t h e investigation would cover all companies and agenc ies involved in importing, refining, shipping and distribution of products.

Uwujaren noted, however, that no arrests have been made yet pending the completion of a full investigation and review of the subsidy management over the years.

The latest action by the EFCC is in line with the directive by the Federal Government for the i m m e d i a t e r e v i e w a n d investigation into all payments made in respect of subsidies on Premium Motor Spirit (PMS) and kerosene.

Last week, operatives of the Commission swooped on the Petroleum Products Pricing and Regulatory Agency, PPPRA, and made away with files and documents relating to the subsidy process.

PPPRA is the agency saddled with the responsibility of ensuring petroleum products availability, moderating price volatility, as well as regulating activities of operators in the petroleum industry.

Uwujaren explained that the EFCC would also visit other government agencies involved

in the management of the nation's oil and gas resources.

Uwujaren noted that EFCC operatives visited the PPPRA “in line with the invitation from the Minister of Petroleum Resources to investigate the process of subsidy payments on petroleum products. This is only the first step in our investigation.

“We shall also be visiting other agencies and corporations that manage oil and gas resources on behalf of the country, as well as the marketers of the petroleum products.”

He, however, would not confirm if any arrests were made so far by the Commission, stressing that the operation at PPPRA was only the first leg of “a long and rigorous investigation into the activities of these a g e n c i e s t h a t r e g u l a t e petroleum products production and distribution in the country.”

As part of the outcome of negotiations by the Federal Government and organized labour over the removal of subs idy, the gover nment promised to clamp down on alleged acts of corruption within the petroleum industry.

This led to approval by President Goodluck Jonathan for the anti-graft agency to review all payments made in respect of subsidies on PMS and kerosene, and to take all necessary steps prosecute any incidence of malfeasance, fraud, over-i n v o i c i n g , a n d r e l a t e d illegalities in an open and transparent manner.

According to the letter dated January 12, 2012, addressed to the Acting Chairman of EFCC, Mr. Ibrahim Lamorde, and signed by the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, the Commission is to “immediately review and investigate all

payments made in respect of subsidies checked against actual importations and to take all necessary steps to prosecute any persons invo lved in any incidence of malfeasance, fraud, over-payments and related illegalities.”

It noted that the Federal Government has over the years run a subsidy regime in petroleum imports where the difference between the cost of importation and the pump price is paid for by the government to pre-approved oil marketing companies and importers.

“Over the years, this bill has g r o w n e x p o n e n t i a l l y t o unsustainable levels,” Alison-Madueke observed, adding that as Petroleum Minister, she has been extremely concerned with the figures.

She added that, “Following the recent transfer of the PPPRA to my ministry last year, I have moved quickly to change management and inaugurate a comprehensive reform process which include drastic cuts in the list of importers, review of payments and procedures, as well as massive redeployment of staff within the agency.”

The Minister further noted that she has set up a unit within her Ministry to be headed by an independent auditor to review the KPMG and other audit reports on the Nigerian National Petroleum Corporation, NNPC, and other parastatals and to i m m e d i a t e l y b e g i n implementation of their findings.

“I am en-paneling another unit

in my o f f ice to begin a

comprehensive review of the

management and controls within

all parastatals and in the Ministry

o f Pe t r o l e u m Re s o u r c e s ,

including but not limited to

NNPC, PPPRA and DPR.

Oil 9

Nigerian Oil Workers

SU PP ORTLOC LA

B S NEU I SSB S NEU I SSB S NEU I SS

Nigeria sees local content prospects at SCC pipe millOscarline ONWUEMENYI

Fo l l o w i n g t h e

signing of the

Nigerian Oil and

G a s I n d u s t r y

Content Act in

2010, the Federal government

issued a set of medium term

targets to guide the Nigerian

Content Development &

Monitoring Board (NCDMB)

on implementation priorities.

These targets covered in-

country spend, capaci ty

b u i l d i n g , e m p l o y m e n t

g e n e r a t i o n , i n d i g e n o u s

ownership of marine vessels,

community enlightenment and

participation, but one of the

cardinal mandates is the

establishment of 3 to 4 modern

pipe mills in Nigeria to service

the oil and gas industry.

The Minister of Petroleum

Resources, Mrs. Diezani

Alison-Madueke had explained

that motive for the mandate was

the conviction that upcoming

industry projects, especially

related to field development,

Gas Master Plan and Gas

Revolution provide adequate

p e d e s t a l s o n w h i c h

investments in new local pipe

mills could be based. Beyond

this, she added, is the fact that

over 10,000 direct and indirect

j o b s , 3 0 0 0 t r a i n i n g

opportunities per annum and

hundreds of suppliers the

policy will spawn brings

immense benefi ts to al l

stakeholders.

Therefore, at a recent visit to

the SCC Pipe Mill at the

outskirts of the Federal Capital

Territory, Abuja, the Minister

could not hide her joy at the hi-

tech pipe-making process

going on at the place. She noted

that she was “very pleased to be

part of this high-level industry

team visiting SCC where a

cumulative order from Shell,

Chevron and Agip totaling over

100km of large diameter steel

pipe is being manufactured for

use in the Nigerian Oil and Gas

industry.”

h e v i g o r o u s Timplementation National

Content and the high level of

collaboration with the NCDMB

by stakeholders, and general

adherence to the guidelines

issued by the board has led to

success related to Domiciliation

of Equipment Component

Manufacturing, Expatriate

Quota management, Utilization

of Indigenous Marine Vessels,

Indigenous Rig Ownership

Scheme and other capacity

development interventions of

the Board.

M o r e r e m a r k a b l y, t h e

industry in less than 20 months

is witnessing positive results

f r o m t h e s e N C D M B

interventions, growing interest

of OEMs and investors to set up

facilities in Nigeria, the rising

market share of indigenous

vessel owners which had risen

from less than $200 million in

2009 to $1bill ion; Local

fabrication tonnage has also

risen by 40% to 54,000 MT per

annum over the same period.

T h e s e a r e s i g n i f i c a n t

a c h i e v e m e n t s w e m u s t

continue to build on.

In the same vein, Yulong

steel, a Chinese steel company

r e c e n t l y m a d e f i r m

commitment to establish a

2 5 0 , 0 0 0 M T c a p a c i t y

Longitudinal Submerged Arc

welded (LSAW) mi l l in

Yenegoa, while Vigeo Steel is

also taking similar steps to

establish a 200,000MT capacity

HSAW mill in Abeokuta.

Apart from the potential to

create over 10,000 direct and

ancillary jobs locally, Nigeria

stands to retain $700 million

that would otherwise be

exported to foreign facilities in

the absence of these facilities. It

is our strong aspiration to

prepare these facilities that will

supply a substantial proportion

of the pipes to be used in the

Gas infrastructure projects

from Nigeria. Therefore we

must support the efforts of the

investors comprehensively and

without restraint to ensure that

the pipemills are completed by

2014.

l i s o n - M a d u e k e Aexplained that the

significance of the visit in

h i g h l i g h t i n g t h i s

unprecedented order arising

from the implementation of the

Nigerian Content Act cannot be

overemphasized. “In fact, it is

important to state that this is

the first of a series of facility

visits which will take us, as an

industry group, to other

locations in Lagos, Port

Harcourt and Warri where

similar breakthroughs are

m a n i f e s t i n g i n t h e

domiciliation of Oil and Gas

operations,” she stated.

On the Minister’s entourage

were the top notch of the

industry, including some of the

heads of multi-national oil and

gas companies operating in the

country, which underscores

government’s commitment to

the full implementation of the

Nigerian Content Act and

industry support for companies

that invest in establishment of

targeted facilities locally where

the Nigerian Content scope can

be performed satisfactorily.

One of the main features

under the implementation the

local content framework is a

sufficient provision to protect

investments in facil i t ies

because the Act does not allow

the industry to export work that

can be done in Nigeria except it

can be clearly demonstrated to

the satisfaction of the NCDMB

that such capacity has been

exhausted.

Local fabrication tonnage has also risen by 40% to

54,000 MT per annum over the same period

Oil 10

Seplat boosts operations with US$ 15M

Invests in alternative crude vessel

Yemie ADEOYE

An Oil Vessle

IN furtherance of m o v e s a i m e d a t b o o s t i n g i t s o p e r a t i o n s a n d ensuring the prompt

evacuation of its hydrocarbon S e p l a t P e t r o l e u m Development Company has concluded plans to invest the sum of 15 million dollars in its operations on OML’s 4, 38 and 41.

This is coming on the heels of revelations that the 36,500 barrels production capacity of the 3 wells is expected to grow to 50,000 bpd by year end 2012.

In view of this Seplat has signed an agreement with Shebah exploration and Production Ltd and Allenne British Virgin Islands Ltd for the possible leasing or acquisition of the “Trinity S p i r i t ” f l o a t i n g o i l production, storage and offloading unit (FPSO). Seplat paid Allenne British Virgin Islands Limited US$15 million refundable deposit.

This deposit is repayable by Allene to Seplat on demand if Seplat decides not to buy the FPSO or decides not to lease the FPSO or should it decide afterwards not to use the FPSO in t ranspor t ing, processing or delivering its oil production.

he lease or acquisition Tof the Trinity Spirit FPSO would therefore provide support of the Trinity Spirit FPSO would therefore provide Seplat with an a l t e r n a t i v e m e a n s o f

transporting its hydrocarbons to the SPDC Nigeria pipeline.

The vessel, which can handle 22,000 bpd and store 2 million barrels of oil, is currently located at Shebah’s Ukpokiti field in OML 108.”

A representative of Seplat in Nigeria who spoke with Sweetcrude on the condition of anonymity noted that the 15 million dollars deposit made by Seplat to Allenne British virgin Islands Limited is repayable by Allenne to Seplat on demand if Seplat decides not to buy the FPSO,

Seplat decides not to lease the FPSO or Seplat decides not to use the FPSO in transporting, processing or delivering its oil production.

The leasing or acquisition of the Trinity Spirit FPSO would therefore provide Seplat with an alternative means of transporting its hydrocarbons to the SPCC Nigeria pipeline.

Seplat had entered into an initial agreement with Shell Petroleum Development Company (SPDC) for the purpose of crude carrying from the aforementioned oil w e l l s e v e n a s t h e r e indications of a Shell possible disengagement f r o m t h e a g r e e m e n t following stipulations that from January 1, 2013 it will only accept crude that has maximum water content of 0.5 percent.

eplat’s foreign partners SMaurice and Prom however placed stipulations

in a positive light when it said in a prospectus that water separation facilities on its assets will not be ready by that deadline so Shell will have the right to terminate the agreement if it so desires.

This, according to some industry sources must have necessitated the MOU signed some few weeks ago by with Shebah which covers an alternative export route via the Trinity Spirit FPSO.

However, the Seplat’s representative who spoke with Sweetcrudemade it clear “In Nigeria the group, through Seplat, has only one major relationship which is with Shell trading.

GivenShell’s credit rating, the Company considers there is no customer risk. Apart from this contract and others signed in the course of its nor mal ac t iv i t i es , the Company has not entered i n t o a n y s i g n i f i c a n t agreements” he enthused.

In Nigeria the group, through Seplat, has only one major

relationship which is with Shell trading

Pacific Scirocco Spins Bit Offshore Nigeria

acific Drilling S.A.

announced Tuesday that Pits ultra-deepwater drillship

the Pacific Scirocco (UDW

dril lship) commenced

operations in Nigeria on

December 31, 2011. The

drillship is contracted for an

initial one-year term to a

subsidiary of Total S.A. The

contract further provides for

options, to be exercised at the

client’s discretion, which

could result in up to four

additional years of contract

term.

The Pacific Scirocco is

capable of operating in water

depths of up to 12,000 feet

and drilling wells 40,000 feet

deep.

With i ts best-in-class

d r i l l s h i p s a n d h i g h l y

experienced team, Pacific

Drilling is a fast growing

company that is committed to

becoming the industry ’s

preferred ultra-deepwater

drilling contractor. Pacific

Drilling’s fleet of six ultra-

deepwater drillships will

represent one of the youngest

and most technologically

advanced fleets in the world.

Oil 11

Yemie ADEOYE

Kaduna Refinery

Kaduna Refinery is viable NNPC insists…Explains Crude oil Importation

TH E

Management of t h e N i g e r i a n N a t i o n a l P e t r o l e u m

C o r p o r a t i o n , N N P C , weekend debunked claims that the 32 years old Kaduna refinery was moribund and that government was losing N12 billion annually on idle staff of the company.

T h e r e h a s b e e n insinuations among other, that the plant is now a conduit pipe through which the federal government losses over N700 billion annua l ly in p ro jec ted revenue

This came on the heels of an oversight visit to the Kaduna Refinery by the Senate Committee on Petroleum Resources (Downstream) earlier last week which allegedly portrayed the plant as a drain pipe.

Group General Manager, Group Public Affairs Division

of the Corporation, Dr. Levi Ajuonuma, in a statement yesterday in Abuja, said K a d u n a Re f i n i n g a n d Petrochemicals Company, KPRC, was a functional and viable Strategic Business Unit of the Corporation contributing to NNPC’s operations in the oil and gas industry in Nigeria.

Dr. Ajuonuma informed that though Kaduna Refinery had undergone a quasi turn around maintenance two years ago by Nigerian e n g i n e e r s w h i c h w a s generally believed to be inadequate for the refinery, credit must be given to the local engineers for running the refinery at 60 percent installed production capacity amid artificially induced challenge of incessant pipeline vandalism.

”Yes KRPC has a lot of challenges owing primarily to the neglect of the past. However in the last several years the fuel plant has operated steadily at 60

p e r c e n t t h r o u g h p u t t rans la t ing to a da i ly production of 1.5 million liters of PMS, 1.4 million liters of AGO and 0.65 million liters of kerosene, in addition to other products. The biggest problem however is crude oil supply which has become unreliable due to rampant

pipeline breaks which on many occasions necessitated the shutdown of the refinery,” Dr. Ajuonuma stated.

On the insinuation that a huge part of the plant has

b e e n c o n v e r t e d t o a container-making factory, Dr Ajuonuma explained: “This is totally misleading. The fact is that Kaduna Refinery is the only plant among the nation’s refineries fitted with a tin and drum manufacturing section d e s i g n e d t o p a c k a g e petroleum products for

distribution to the rural areas. In addition, the plant p r o d u c e s d r u m s f o r packaging lubricating oil for marketing companies like Oando, AP and Total Nigeria

Plc. The point needs to be made, however, that this tin and drum plant has been there right from inception of KRPC in 1980.”

Also on the issue of importation of crude, Dr. Ajuonuma stated: “There is really nothing strange about that and this only applies to Kaduna Refinery. By design the plant is configured to receive both local light crude and heavy crude which is usual ly imported from Venezuela, Russia, Iran and some other countries under a swap arrangement to help KRPC in the production of lubricants and asphalts which cannot be achieved using our local crude”.

He stated that the 110 barrels per day Kaduna Refinery has the capacity to receive 60,000 barrels of local crude and 50,000 barrels of heavy crude imported and pumped through the Warri Escravos crude pipeline.

Dr. Ajuonuma dismissed reports that KRPC collects crude o i l f rom PPMC “without proper costing” and stated that the business model KRPC operates is such that it receives crude oil from PPMC, refines it and hands over the products to PPMC for marketing while the refinery is funded based on cost recovery.

“It is however important to point out that every barrel of crude oil received and processed is accounted for and we all know that the PPMC at various times has provided detailed accounts of how the imported crude to the refinery is handled,” he said.

H e a p p e a l e d t o t h e Nat iona l Assembly to c o l l a b o r a t e w i t h t h e Corporation in its bid to increase local refining capacity by introducing apt legislation which will deter the incidence of pipeline vandalism, adding that no refinery will work if the pipelines are not secured.

“The NNPC has formulated a workable schedule of activities to revamp our traditional refineries and also boost local refining capacity via the construction of three Greenfield refineries in collaboration with some Chinese investors but all that may not yield the desired effect if our vital crude supply and product evacuation pipelines remain insecure” he enthused.

Alison Madueke

It is however important to point out that every barrel of crude oil

received and processed is accounted for and we all know that the PPMC

at various times has provided detailed accounts of how the

imported crude to the refinery is handled

Oil 12

Local Content: GEMS calls for close look on technical competence

Clara NWACHUKWU

Indigenous oil and gas

s e r v i c e c o m p a n y,

G E M S G l o b a l

Resources Nigeria

Limited, has called on

t h e N i g e r i a n C o n t e n t

Management Board, NCMB,

to thoroughly scrutinise the

competence of Nigerian

companies bidding for jobs in

the industry.

The company argued that

technical capacity is a major

weakness among Nigerian

companies, and an area the

NCMB should beef up skills.

The Business Development

Manager, GEMS Global, Mr.

Tunde Alabi, in an exclusive

c h a t w i t h V a n g u a r d

Newspapers during the just

concluded Offshore West

Africa, OWA 2012, noted that

many indigenous companies

were still struggling to acquire

the requ i s i t e t echn ica l

competence to compete

effectively in the industry.

The Nigerian Content Act

2010, was enacted to give

Nigerian companies more

Weldering

opportunities to participate in

oil and gas projects to add

greater value for Nigerians

while also increasing the

industry’s contributions to the

country ’s Gross Domestic

Product, GDP.

He also cited funding as

another major challenge faced

by indigenous operators,

particularly those engaged in

specialised services like

GEMS.

He elaborated, “GEMS is a

survey company, we are into

geotechnical and geophysical

services, so it has been

challenging because we

operate in a specialised

category that needs a lot of

capital investment.

“In our kind of job you need

vessels to do them; vessels are

capital intensive. A good

geotechnical vessel will cost

between $15 and 20 million,

and most Nigerian banks are

not ready to invest in an

industry that they don’t quite

know much about. It’s not that

they don’t have the money but

they don’t really know about

the sector.”

Alabi revealed that in such

instances, the company ’s

technical partners, GEMS

I n t e r n a t i o n a l G r o u p

Companies, came to the

rescue, which has made the job

worthwhile.

In view of its brilliant

execution of projects, since

2003, when GEMS came to

Nigeria, the global group has

seen good returns on their

investment to continue to

justify greater investments.

He said that such confidence

from the technical partners is

one of the high points for the

company, which has since

expanded from very humble

beginnings to become very big

to become the number two

company in its area of

specialisation.

Furthermore, he said the

company now owns a number

of facilities including “a

cooperate head office in Lagos,

got our fabrication yard in

Apapa, and we have got a

mobilisation site in Port-

Harcourt.”

He argued that GEMS is a

truly indigenous company, one

of the big advocates of the local

content policy, adding that part

of the understanding between

it and its technical partners is

on technology transfer through

constant training of Nigerians

to take charge and leverage on

the local content law.

“This has helped our

business because now we

know that as a fully Nigerian

company, we are now being

chal lenged to be more

technically competent, and to

really take charge of the

industry as it were. Instead of

leveraging more on our

t e c h n i c a l p a r t n e r s , w e

encourage them to do a

technological transfer to

Nigeria, so that when we win

jobs we don’t have to call upon

them, we call on our Nigerian

crew to execute the job so that

the investment is retained here

and help to develop the

country,” he added.

Going forward, Alabi said he

expected more Nigerian

companies to also take up the

challenge of the local content

development and stopped

cutting corners. “I want to see

companies look more ahead

into the future. I don’t want a

Nigerian company that will

come around do a job and

realize a profit of let’s say

$500,000 or $ million and they

will go all about throwing

parties all around.”

In our kind of job you need vessels

to do them; vessels are capital intensive

Chevron: Funiwa fire burning at diminished rate

hevron Corporation has reported that the C

fire burning at the Funiwa Deep 1A well offshore Nigeria has diminished.

The fire, which broke out on January16 , killed two workers and caused substantial damage to the jackup KS Endeavour and liftboat Mako. One hundred and fifty two of the 154 workers were on board the rig and liftboat when the fire started were evacuated.

Chevron subsidiary Chevron Nigeria Ltd. will drill two relief wells to control the Funiwa Deep 1A well. Transocean and Noble Drilling Corp. will provide the rigs, which are on loan from ExxonMobil, Eni and the Nigerian National Petroleum Corp.

Drilling is expected to begin in the next seven to 10 days.

Oil 13

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If your guiding principles over the years include: integrity; teamwork; dedication and, a commitment to the creation of real value, your business partners will continue to patronize you.

Today, EMVAL is in alliance with Qatar-based DELTA DOHA, a reputable wellhead manufacturer, to be able to supply and install OEM vavles, wellheads, production trees and accessories to E&P companies in the West African sub-region.

The unit that offers Slickline Services, began in 1991, and is currently operated by JD ENERGY SERVICES LTD., a subsidiary of EMVAL HOLDINGS LIMITED. This subsidiary, boasts of over 100 years combined experience as a leading slickline services provider in Nigeria, and is in a strategic partnership with PIONEER PETROTECH SERVICES of Canada and Micro Smart Inc. These companies provide top quality electronic memory pressure gauges that are durable and reliable with simple operational procedures and an industry leading electronic downhole shut-in tool respectively.

EMVAL PETROLEUM SERVICES, is the business division in charge of Electric Wireline Line Services. With this additional business offering, EMVAL clients can efficiently acquire critical data and make informed decisions about the production of each formation. It also offers full service cased-hole wireline units complemented by a full range of downhole equipment and can also provide quality data interpretation services.

For artificial lift services, EMVAL is in alliance with BST lift of Ventura, California, and markets their variety of Gas Lift Equipment. These equipment are available for use in continuous flow and intermittent flow applications and with tubing retrievable [conventional] and wireline retrievable deployment, as well as offering help to clients to maximize reservoir recovery and optimize field production through the use of specialized softwares.

A fully Nigerian-owned company, EMVAL, also provides Well Instrumentation Services like control panel design; emergency shut down systems design; wellhead safety control systems upgrade; installation & commissioning and, flow station process equipment installation and upgrade.

EMVAL HOLDINGS: YOUR RELIABLE BUSINESS PARTNEREMVAL HOLDINGS: YOUR RELIABLE BUSINESS PARTNER

Oil 14

iger ian/Loca l Con ten t , a s envisaged, means the development Nof local skills, technology transfer,

the use of local manpower, and local manufacturing.

Oil exploration began in the Niger Delta region of Nigeria as far back as 1933, but was commercially exploited in 1956. Over the years, Nigerian oil workers have been learning with the guidance of International Oil Companies [IOCs], and are ready to take over the management of the Nigeria oil & gas industry.

As the capacity building continued, little progress was recorded with equipment manufacturing, repairs, maintenance, engineering and design, which were done in foreign countries.

There had been agitations from the Nigerian professionals, for them to be given 'their due'. The agitations received a shot in the arm some time in October 1996, when the then Minister of Petroleum Resources, Dan Etete, speaking at GLOBESTAR fabrication yard in Warri, Delta State declared, “from now, foreign suppliers will have to bid and supply through a local subsidiary or agent”.

Nigerian professionals were leaving their international jobs and multi-national employment locally to join the fray of kick-starting, a truly Nigerian company. The Federal Government was drumming it, but, in earnest, there was no law to back the talk. I remember Port Harcourt, in 2006, where a Nigerian who left his employment in the Americas, brought his entire savings, and founded an oil servicing concern, only to realize that, the OICs were not ready for people of his ilk. He described the action of the OICs as being 'clannish.'

Even though most industry stakeholders will accord Olusegun Obasanjo, [Nigeria's President, 1999-2003], with the breakthrough in Local Content quest, it was Nigeria's current President, Goodluck E. Jonathan, then an Acting President, who on April 22, 2010, formalized this dream, when he signed into law, the Nigerian Content Act.

The Bill provides that IOCs operating in Nigeria must domicile at least 10% of its profit in Nigerian banks, so that these banks will have more money to fund investments in the sector. Another major feature is that, all contracts in this sector should cede 1% into a special fund, for the purpose of building capacity.

The Nigerian Content law is about promoting value addition to the local economy, increase local participation, build local capacity on the back of on-going projects, and generally, increase linkage to other sectors of the National economy.

Sounds good? Yes. But, some Nigerians are still running portfolio business concerns, sitting on the board of foreign companies, whose Nigerianess is being registered in Nigeria, and with a Nigerian name as Chairman. No work

i s d o n e i n - c o u n t r y ; expatriates are still doing jobs that local expertise can do better. There are challenges littering the

landscape. Most local industry operators do not have

kind words for the Government regulatory agencies, whom they accuse of not being sincere in carrying out their responsibilities. Financing has been a major challenge to local operators, who cannot match their

foreign counterparts, because of their access to cheap facilities. In fact, a local

operator described Nigerian bankers as being naïve. The bankers too, have

uncomplimentary words for their Nigerian clients, accusing them of deliberately not employing the

servic es of financial advisors, to be able to make more profits.

There are issues straddling the sub-sector. The OICs decry the number of times contracts have been given to local companies, and they fail to

deliver, by either not meeting the deadlines, or completely abandoning the job after being remunerated remember the PH based company, who was paid

millions in Dollars, only for them to abandon the contract]. Issues arise, where well-remunerated service companies, do not pay their staff well, thereby leaving the CEO as the only 'winner'.

Amongst these tales of woes are Nigerian companies who have carved a niche for themselves, over the years. Last October, at an industry meet, a bank official praised a local company who was financially disciplined, the same company finished a contract a month ahead of schedule, and same was acknowledged by the Multi-national principal.

Local companies are working hard to achieve the desired 80%-20% target. Practitioners like Kayode Thomas, CEO of Bell Oil & Gas Limited, whose company is soon to be a decade in practice, is an exponent of technology transfer. Both him and Henry Ojogho, EVC of Broron Group, believe in bringing in expatriates to train the local work force, who will in turn, become trainers.

The success stories are increasing daily. A Nigerian company, who has expertise for a particular industry need, confessed that , the company has a deluge of requests that they cannot meet. A professional who lives overseas, but, has a business interest in Nigeria, believes that, in black Africa, Nigeria has an abundance of competent professionals. Local companies are offering specialized services formerly done by multi-nationals.

Companies hitherto filled with foreign contents have made concerted efforts to be local, since, this is the way to go. The erstwhile lip service, has given way to real local content-local fabrication yards, capacity building [ it is a known fact that 70% of pilots operating in Nigeria today, are graduates of the BRISTOW flying school, who were trained in the USA], only the financial institutions are being awaited, to blend. Foreign manufacturing companies like Vallourec Mannessman Oil & Gas Nigeria, specialists in oil & gas industry valves, have a local manufacturing facility in Nigeria.

YL N :U IG NER AIRT

SPECIAL REPORT SECTION

These companies who have made strides towards the full realization of the Local Content dream, are the ones we are celebrating in this edition. Beginning from this February, 2012, SWEETCRUDE, begins the

TRULLY NIGERIAN series, and will cap it up with our May, 2012 edition commemorating the OFFSHORE TECHNOLOGY CONFERENCE [OTC], holding in Houston, Texas, USA in early May, 2012.

These companies who have made strides towards the full realization of the Local Content dream, are the ones we are celebrating in this edition. Beginning from this February, 2012, , begins the

series, and will cap it up with our May, 2012 edition commemorating the , holding in Houston, Texas, USA in early May, 2012.

SWEETCRUDETRULLY NIGERIAN OFFSHORE

TECHNOLOGY CONFERENCE [OTC]

Shell Ad

FocusF 16

UNEP REPORT ON OGONI: UNEP REPORT ON OGONI:

‘I’ve been very disappointed’ – Senator Abbe

Senator Magnus Ngei Abbe, Chairman of the Senate Committee on Petroleum (downstream) is the erstwhile Secretary to the Rivers state government, a one-time commissioner of information and member of the state house of assembly. To say his wealth of experience can only add value to the 7thSenate will be stating the facts as is. In this

interview with Hector Igbikiowubo, Editor, Sweetcrude, he speaks on a wide range of issues including the ongoing probe of the subsidy regime in the downstream petroleum subsector, the PIB and the UNEP Report on Ogoni and the impact of oil spills. He laments the perceived insensitivity of government personnel regarding oil spill in the Niger Delta, noting that ‘I am very, very disappointed’.

Senator Abbe

Excerpts: Senator Magnus Abbe, we

have wi tnessed some measure of furore regarding the removal of petroleum subsidy or otherwise. Can you bring us up to speed on the work of your committee? The impression out there is that the work of the committee may have been overtaken by events, so we would like to know where you are at this moment and where you intend to go from here.

irst let me thank you for Fyour interest in the affairs of our country and the work you have been doing with this magazine looking at the oil and gas industry. It is not true that the work of the work of the committee has been overtaken by events. I’ve heard people say that after all the EFCC is already investigating, the subsidy issue has been resolved, whatever, whatever not. But the truth of the matter is that the EFCC looking into the allegations doesn’t in any way affect the work of the committee. At the time we started the investigation we had actually invited the EFCC to be part of the process so that whatever

information that is made available to the committee would also be made available to them because we believed that the Nigerian people would like to see a forensic examination of some of these issues and some people didn’t think that the Senate has capacity to do that. So that doesn’t affect the work of t h e c o m m i t t e e . T h e resolution between the federal government and organised labour actually means that subsidy is still in place and so any suggestion or contribution that can be m a d e t o m a k e t h e management of the subsidy scheme more transparent, more accountable and more organised or cost realistic would actually be in the interest of the Nigerian people and the Nigerian economy. This actually makes the work of the c o m m i t t e e e v e n m o r e relevant than it was at the beginning.

o where are we at the Smoment with the probe and how soon do you expect t o r o u n d u p y o u r investigation?

Well actually, were we are now is that we still have a few issues we want to resolve

with the PPPRA and then we also want to go on some site visits to see some of the facilities of the PPMC and more importantly, we also want to talk with some of the companies that are involved with the subsidy and this is for two reasons – we want to give them an opportunity to respond to issues in the public domain and the other is to ask some of the questions that have been agitating the minds of members of the committee. We are aware that the house of representatives is carrying out a concurrent investigation, but the Senate

would still go ahead and conclude its own activity.

Do we expect at the c o n c l u s i o n o f y o u r investigation to see any legislation or resolutions regarding the way and manner the industry is governed especially as it affects subsidy or no subsidy?

here are two issues Tinvolved in this subsidy or no subsidy and as a person I want to clarify my own position. I am not for subsidy or no subsidy, I am for d e r e g u l a t i o n o f t h e downstream sector and those are not exactly the same

thing. Deregulation of course connotes that there will be no subsidy but absence of subsidy does not necessarily mean deregulation. So what I would like to see is a total d e r e g u l a t i o n o f t h e downstream sector in which case government processes that are involved in the sector are not discretionary and so cannot be subject to abuse and then those participating in the sector would do so in a n o p e n a n d v i s i b l y transparent manner. In other words you would not have collusion, price fixing and all the kind of dirty things that can actually make the absence of subsidy a burden o n t h e c i t i z e n s . S o , deregulation is what I would like to see in the downstream sector. If the government actually has funds and they want to use those funds to support the industry or the people within the industry, there are ways that such contributions can be made so that it doesn’t distort the market and does not allow investments and investor participation. Those are my personal views. Talking on the broader corporate and national level, definitely there would be some form of legislation in the oil industry.

CONTINUES ON PAGE 17

We are aware that the House of representatives is carrying out a concurrent

investigation, but the Senate would still go ahead and conclude its own activity

Ogoniland

Focus 17

‘I’ve been very disappointed’ – Senator Abbe

The Petroleum Industry Bill presupposes this and of c o u r s e w o u l d c r e a t e deregulation by the very nature of what it is intended to do. Whatever activities that are ongoing now in terms of this probe and what it is intended to do would definitely impact on how the PIB would be viewed by the Senate and how it would be worked on. Some of those suggestions and whatever may come out of this may be reflected in the PIB. Or even some of the perspectives that the public has brought to bear since the debate became a raging national inferno would also be reflected in the PIB. So I think everybody is very conscious that there would be an impactful legislation that would come out of this entire exercise.

Talking about the PIB, recently, the minister came up with some committees including the one that includes former Senators and members of the House or R e p r e s e n t a t i v e s . T h e impression in the public domain is that the committee has been mandated to work hand in glove with serving Senators and those in the House of Representatives. Has there been any overture on the part of the ministry to get your committee to work with whatever committees that have been set up to drive passage of the PIB.

here is a legislative Tprocess and what I think the executive is trying to do is that they are trying to collate their own views and thought and to harmonize though from the industry. think that that’s what the committee is about. When the Bill is submitted to the national assembly, there is a process for legislation and within that process there is also room for public input into whatever law the national assembly is trying to make, there will be public hearings, committee sittings on the PIB and at that point, any member of the public, including any groups or committees that have an interest would of course be allowed to make their contribution. But I think that both the executive and members of the committee know the procedure of how legislation is worked on and I don’t think that there is any kind of committee that is set up to a f f ec t the way legislation is made, I don’t think that is the intention and I don’t think that would be

CONTINUED FROM PAGE 16

the outcome. Definitely, whatever work they are doing at the executive level, once it is submitted to the national assembly, the procedures and rules of the national assembly would take its course and in the course of that Bill, whatever committee or interest that has something to do with the Bill would have an opportunity to make an input. As former legislators themselves, I am sure they understand that process and everybody would respect that process.

he concern is that the TPIB has been in the w o r k s ( p e r m i t t h e

expression) forever, and like you’ve rightly pointed out, at least I came away with that from your submission, teh PIB is important. I want to believe that the executive is looking for ways and means to expedite passage of the Bill.

Do we expect to see a commensurate disposition towards expedience on the part of the legislature towards passage of this Bill?

The legislature has always worked conscious of its obligations to the Nigerian people and I am sure as you have seen in the 7thSenate, anything that is important to the people of this country is

taken seriously here. The PIB would be treated with the seriousness it deserves because it is a fundamental law as far as the oil and gas industry is concerned and everybody understands that the oil and gas industry is the bedrock of the Nigerian economy. In any serious society you use your strength and your base to propel yourself forward. Oil and gas is our strength and anything that has to do with it has to be taken seriously by any Nigerian because that is what we survive on. But having said that, you must understand that this is a very

Abbe

controversial law because it affects so much that is ongoing in the industry. But Nigeria in my opinion cannot afford the luxury of dilly dallying on the subject of the PIB because like I was saying this morning, oil is an international business, it’s not a local business and in the oil industry, people plan things, they do not carry on the way we do here – they

love to be clear as to what the rules are, they like to do things in an organised and systemic manner such that the results are predictable. So

when you create so much u n c e r t a i n t y i n a n international industry like the oil industry by saying you are going to change the rules and people don’t know what the rules would be, it would affect investments in the industry because people don’t know what the rules are, if there would be PIB or not, they want to know how it w o u l d a f f e c t t h e i r investments and how it would not. It is important to the country that we bring some kind of closure to the issue of reform in the petroleum industry, closure in the sense that, if there would be reform what is the r e f o r m ? I t h a s t o b e understood and clearly defined. If there is no law and there is no reform, let that

also be known and clearly understood that the rules

remain as they are so that our international p a r t n e r s c a n participate in the industry. I believe that on that basis the national assembly should be geared very

seriously because it is something that affects

how people relate with the oil and gas industry. This is the corner stone of our economy.

et us look at another Lcritical aspect of the PIB that has generated a lot of concern. You would recall that the communities had asked for inclusion of 10 per cent that should accrue to them. You are from the Niger Delta, a very important part of the are and today you are a d is t inguished Senator. I n c i d e n t a l l y , y o u superintend a committee directly related to the sector.

Are we to expect any par t icular d ispos i t ion towards protection of the communities from you?

I don’t think protecting the

communities is a Niger Delta thing. When we had a crisisin the area and people were

But Nigeria in my opinion cannot afford the luxury of

dilly dallying on the subject of the PIB because like I was

saying this morning, oil is an international business, it’s not

a local business

CONTINUES ON PAGE 18

Focus 18

‘I’ve been very disappointed’ – Senator Abbe

Oil spillage

Abbe

calling it a Niger Delta thing, I said to them, it is a Nigerian problem and part of the fundamental challenge of this country is that we need to begin to deal with each other on the basis of truth because unless and until we do that it would be very difficult for us to move forward. It would be very difficult for us to generate the kind of passion and the kind of commitment that we need to take this country to where it should be. People keep talking about Nigeria as a very rich country but I have said and I want to say it again, Nigeria is a very poor country, very, very poor country. Nigeria is rich in potential but you can’t eat potential. For potential to become edible you have to translate it by action and part o f t h a t p r o c e s s o f transforming our potential into wealth that you can actually access is that there must be some clear basis of equity in what we do. Today in our communities, if you go there you would be shocked at what is going on. People don’t see any relations with the oil companies as regards their interest, so they are breaking pipelines, they are pouring oil on the ground, they refine their own oil all in a bid to extract some value. And this is because this whole idea that the fund from oil is being mismanaged has eaten deep into the consciousness of our communities. I think that part of a solution that works for everybody is that like every other person that has a solution in his backyard, y o u m u s t g i v e t h e m something. There is no argument you would make that can take away from the fact that the communities must be given something. Part of what I think the PIB would achieve is that when it clearly sets out the interests of these communi t i e s , i t releases the pressure on the Nigerian system and on the

CONTINUED FROM PAGE 17

oil companies to actually do their own thing and gives the communities an opportunity to take their destiny in their hands so that if tomorrow, there is no more oil, they don’t look at anybody and say when there was oil you people came here and treated us anyhow. They also a r e a c c o u n t a b l e t o themselves. I think that that p r o v i s i o n w a s w e l l intentioned, it was well intended; it would actually help the oil industry because it would release a lot of the tension that exists in the industry and enable the industry to actually operate at maximum value.

an we take a look at Cthe UNEP Report and the way and manner it’s been managed by the Nigerian s t a t e . W h a t a r e y o u r expectations of the Nigerian government especially given the way and manner it’s been handled so far?

In fact I must say that I’ve been very disappointed by the way and manner it has been handled. If you read the UNEP Report, there is no responsible government that would see that scientifically

these are the findings and these are the dangers that your people are facing, there is absolutely no visible r e s p o n s e f r o m t h e government. A committee was set up headed by the minis te r o f pe t ro leum resources but as I speak to you, that committee has never gone to Ogoni land, never! As I speak with you, that committee has never spoken with me, never! And I am a Senator representing that senatorial district, they have not seen any of the things mentioned in the UNEP Report, and yet, a report has been submitted on the implementation of the UNEP Report. How do you implement a report without talking to the people? How are you going to deal with the

environment without talking to the people who live in it and explaining to them that this is what we are going to do and how we are going to do it or even seeing what is being talked about. The way we do things in this country sometimes baffles me and it just shows that a lot of times our public officers don’t understand what it means to be a public servant. Because as a public servant, you serve, you can’t be bigger than people you serve and that is part of the tragedy of this country, if not, in what other part of the world can this kind of thing happen? This UNEP Report was submitted how many months ago..., and the other day when we were dealing with the budget I said it in plenary

that in Brazil there has been an oil spillage and the Brazilian government has demanded something. We will still be here pouring over this report and the Brazilian spillage would be settled because their government is serious. To put it mildly I am disappointed with the way and manner this issue is being handled. And the UNEP Report is not just about Ogoni, there are issues in the report that deals with the way we handle spillages, that deal with the way we manage environmental hazards of oil exploration in the Niger delta, that deals with even the capacity of the government agency to respond to the situations that arise out of these activities and I expected that the government would have been stung into taking very, very visible, drastic and positive action to affect not only how the issues of environmental degradation in Ogoni is resolved, but even how this business is conducted so that similar situations brewing all over the place are controlled for

The way we do things in this country sometimes baffles me and it just shows that a lot of times our public officers don’t

understand what it means to be a public servant

CONTINUES ON PAGE 19

Focus 19

‘I’ve been very disappointed’ – Senator Abbe

the benefit of the future. But I haven’t seen that response yet. I don’t want to talk about it anymore because if I do, I would say things that I should not say.

Given the circumstance and your current station, are we to expect the Senate to look at this aspect of operations of t h e i n t e r n a t i o n a l o i l companies to ensure that the kind of spillage that has c a u s e d t h i s l e v e l o f environmental degradation in Ogoniland and parts of the Niger Delta is checked.

Are we to expect that l e g i s l a t i o n w o u l d b e included in...?

The problem of Nigeria is not legislation, the rules are there, the rules are not enforced and teh officers who should enforce the rules have no interest in the rules. How can you be dealing with environmental issues and the person who is in charge of environmental issues is sitting in Abuja. Is his house in the place we are talking about? Has he been there, does he even go there? So when you are dealing with things like this, you just wonder. That’s why we keep talking about restructuring this country into an effective

unit that actually delivers something to the citizens. The state in its present form cannot and I want to say this without fear of contradiction – Nigeria in its present form cannot deliver on the expectations of the citizenry. Look at the issue of security, whatever reform you like, make, except you have state police forces, you have people in the states that are living in these places and living with the people who have their own instruments for dealing with situations

that arises in their local areas, how would you achieve s e c u r i t y ? W h e r e i n a federation does only one government fund security? It’s impossible, how can you have three hundred and sixty s o m e t h i n g , t h o u s a n d policemen to a population of over 160 million, what type of reform are you going to make to that? There are basic truths that need to be told in this country, there are basic obvious things that we are doing wrongly. If you have been on a road that is leading

nowhere, why can’t you re-assess yourself. If you have tried this form of centralized security and it is clear that it cannot deliver, , it is not delivering and it is not programmed to deliver, why don’t you try something else, why are we afraid of change and tracking new routes? When you talk about it they say no, the governors would use the police to arrest people. If a governor wants to arrest somebody now is there anything stopping him from arresting the person he wants to arrest? Is the governor not subject to laws of the land? If he does something that is illegal, shouldn’t we have a provision in the law that allows him to be dealt with even after he has left office? Should we, because we are afraid of what could happen subject our children and communities to this kind of insecurity? Is that cure not more deadly than the disease that you are afraid of? Sometimes I get very upset with the way we do things around here and I think that except we have enough

CONTINUED FROM PAGE 18

courage for Nigerians to come out and say exactly what is wrong and how it can be corrected, we would just be wasting our time.

But the point is that like I said earlier on, the Senate, the 7th national assembly is not powerless in view of our current realities. So if the executive is not able to i n i t i a t e f u n d a m e n t a l restructuring, can’t it be initiated by the 7th national assembly?

I am not the 7thnational assembly, the views I am expressing here are those of Senator Magnus Abbe. I am one out of 109. I am not the 7thnational assembly and the senate is one arm of a bi-cameral legislature. The whole concept of making fundamental change to the way we operate is not something that any one person can do, the executive can’t do it alone, the national assembly cannot do it alone. Everybody in Nigeria has to be conscious that there is the need to do something differently and to change the way we look at things and how we deal with them. What I can do as a serving Senator is to use my platform as a Senator to sell that message a n d t o s e l l t h a t consciousness and I’ve been doing that. Even the Senate on its own cannot restructure N i g e r i a . N i g e r i a n s – governors, Mr. President, Houses of Assembly, Chiefs, market women, everybody must understand that we need to do things differently and that these are some of the things that we are facing and we can change. When you say I am not powerless, what p o w e r d o I h a v e t o restructure Nigeria? The power I have is the one I am using now, I have a platform on which I can sell these ideas and I have been selling them and people are buying into it, the truth cannot hide. In any case, like I say to people, everything has its time and when the time for something has come, it doesn’t need a Goliath to come and do it. We need to focus on the practicalities of what needs to be done and we need to get it done fast before it’s too late.

Ogoni devastated by oil spill

The power I have is the one I am using now, I have a

platform on which I can sell these ideas and I have been selling them and people are

buying into it

Focus 20

HENRY OJOGHO:

Financing, the bane of the oil & gas industry

Henry

This writer is sitting

directly opposite

this oil & gas

industry player,

they have not met

before, so, the natural thing to

do is, ask the subject, where he

is coming from, to be where he

and the company he oversees

is today.

“ We started late in the 90s,

and struggled a bit, until the

Federa l Gover nment o f

Nigeria, brought the Local

Content law, which we took

advantage of. We have worked

harder since then.”

You will note something that

keeps rearing its head, during

this interview-FINANCE.

Henry Ojogho, believes that,

by 2020 [eight years from

today], Nigerian companies

will be able to take up about

80% of the work available.

This, he warned, depends on

t h e a v a i l a b i l i t y o f

cheap/affordable financial

facilities, in order to be able to

compete with the ever present

multi-nationals.

“Even if you have contracts,

nobody will lend you money to

execute same, so, the Federal

Government, through its

a g e n c i e s , s h o u l d s e t

up/organize seminars outside

the country, invite Nigerian

bankers to attend, so that these

naïve bankers, will understand

the maritime business.”

Personally, I remember

listening to a banker last

October at an industry forum,

accusing local companies of

n o t s e e k i n g

competent/qualified finance

executives to advice them

regarding projects, simply

because of saving costs. But,

Mr. Ojogho will not have any of

that. He calls Nigerian bankers

“feel right bankers”, insisting

that, their business is to advice

their clients, work together and

succeed. Look at your cash

projections and help the local

company. “ Local banks should

support local companies to

acquire vessels. They [banks]

have got a lot of work to do. The

local companies keep ‘running

from pillar to post’, looking for

money”.

SWEETCRUDE , then asked

whether the Nigerian Content

Development Act has served

its purpose. Mr. Ojogho thinks

that the Government has a lot

of work to do, concerning the

success of this legislation. He

believes that, the International

Oil Companies[IOCs], feel the

Government is not serious

about the Act. He advises that

relevant Government agencies

should enforce the Act. He

accused the Government

functionaries of these agencies

of not doing their work, but,

instead ‘seek favours from

Multi-nationals’. He insists

t h a t , ‘ a u d i t o r s f r o m

Government agencies should

s e e t o t h e

performance/enforcement of

the Local Content Act’.

re there benefits from

the passage of the Local AContent Law, we asked?” Our

company has benefitted from

the passage of the Act. It has

been different these days. At

least, the Multi-nationals, do

not push us around like

before”. We also wanted to

know if there are enough jobs

to drive the full success of the

Act. His answer was yes.

H e n r y O j o g h o b e c a m e

animated assuring that, the

jobs available were more than

enough. In his company’s area

of specialization-Deep sea

operation, where there are few

owners of vessels with success,

there is a lot to tap from, and

a d d e d t h a t , w i t h t h e

Government’s projection of

achieving four [4] million bpd,

from the present 2.6 million

bpd, the availability of jobs is

assured.

SWEETCRUDE wanted to

know his company’s Nigerian

Content accomplishments.

“Our company operates 100%

Local Content. Very few

expatriates,[80% local, 20%

expatriate]. We have control

totally. Our internal plan is

that, by 2014, our expatriate

quota will be reduced to about

5%. This is even so, because,

we provide services in the

upstream sector of the industry,

which involves high tech

equipment for-sea bed surveys,

disengaging pipes underwater,

sub-sea construction, etc”.

Because of the vision above,

Mr. Ojogho’s company plans to

basically train the locals to be

at par with others, build

capacity and take same beyond

the Nigerian borders.

r. Ojogho’s parting

w o r d s t o t h e Mindustry? “ I acknowledge the

President[Goodluck Jonathan]

who signed the Local Content

Act into law. I also appreciate

that, he promised to sign into

law, the Petroleum Industry

Bill [PIB]. This Government

believes in developing Local

Content. Mr. President is

knowledgeable about the

industry”. He is of the view

that, Nigerian National

Pe t ro leum Corpora t ion

[NNPC] needs re-structuring,

especially regarding how bids

are managed. He adds that,

for the industry players to

function and succeed, the

players need the sincere

support of NNPC. This

Government agency ‘needs to

do more’.

To his co l leagues , he

requests for unity amongst

them.” Locals need to unite, so

that, we do not play ourselves

into the hands of the multi-

nationals, avoid constant

embarrassment from IOCs. My

sincere and candid advice to

t h e i n d u s t r y - m o r e c o -

operation, work for one

common purpose, which will

help all. IOCs should co-

opera te wi th the loca l

companies”.

To Mr. Ojogho, it is time for

mergers and acquisitions for

local practitioners, since this

will mean added capabilities.

Lastly, he concluded”

Financing is key. Banks

should train their staff to be

able to identify opportunities

in the upstream. Doing that

wi l l so lve 92% of the

challenges”.

POST-SCRIPT : Mr. Henry

Ojogho, is the Vice Chairman

[read CEO] of BRORON

GROUP. Broron Oil & Gas

Limited, is a fully Nigerian

owned oil & gas company,

which has been offering its

technical support services

successfully to many major

production operations across

the upstream Niger Delta.

It specializes in well hook-

u p s a n d t h e d e s i g n ,

construction and installation

of umbilical, flow-lines and

risers, diving services, ROV

and survey services. BRORON

OIL & GAS LIMITED, is a part

of BRORON GROUP, which

includes, BRORON ENERGY

LTD, a company in partnership

with AB AXIS Industries with

specialty in power plants

pro jec ts . The technica l

experience and financial

strengths of these sister

c o m p a n i e s h a v e b e e n

complementary to the overall

success of the group, which

now has a long term objective

of shipping domestic gas from

the Niger Delta, to various

Independent Power Plants

[IPP] across Nigeria.

As a local company, BOGL

has been maintaining oilfields

by offering service as listed

earlier.

Locals need to unite, so that, we do not play ourselves into

the hands of the multi-nationals, avoid constant

embarrassment from IOCs.

21Gas

A Modern Gas Plant

WGC 2012 moves to sustain future global gas growth

Yemie ADEOYE

THE global gas a n d e n e r g y i n d u s t r y w i l l gather to attend the prestigious

25th World Gas Conference ( W G C 2 0 1 2 ) i n K u a l a Lumpur, Malaysia from 4-8 June 2012, just as the conference and exhibition has concluded plans to address the seismic shifts and developments in the energy sector, with a prime focus on the global gas industry.

Hosted by PETRONAS and o r g a n i s e d b y t h e International Gas Union (IGU), the conference with itsTheme “Gas: Sustaining Future Global Growth”, WGC2012 will showcase major achievements and milestones accomplished by the global gas industry. It will also draw on critical inputs from an array of global gas professionals to chart new

strategies for the natural gas industry.

“Natural Gas has a key role in achieving a low carbon economy. The credentials of natural gas are indisputable. Supply security is no longer an issue with the abundance of both conventional and unconventional gas and globalisation of the LNG trade. Yet, natural gas faces challenges and obstacles in positioning itself as a key energy source, particularly in the policy arena. As the spokesperson for the gas industry, IGU has initiated efforts towards advocating for natural gas, so that it will regain its appropriate policy voice, consistent with its merits and potential,” said Datuk (Dr) Abdul Rahim Hashim, President, IGU.

he WGC2012 technical Tprogramme has been structured along critical t h e m e s f o r e a c h d a y. Beginning with “Foundation

for growth,” the conference progresses with “Securing G a s S u p p l y , ” t h e n “Enhancing Gas demand,” building up to “A Sustainable Future,” on the final day.

St ra tegic panels wi l l represent topics of current significance to the gas industry including three special projects: “Building Strategic Human Capital”, “ N u r t u r i n g F u t u r e G e n e r a t i o n s ” a n d “Geopolitics and Natural Gas.” Besides these three special study projects, key t o p i c s s u c h a s unconventional gas, gas advocacy, LNG, natural gas for transport, innovation and research and renewable energy will also play a pivotal r o l e i n t h e W G C 2 0 1 2 conference programme.

WGC2012 keynote speakers will comprise the top CEOs and captains of industry associations, International Oil Companies and National Oil Companies. These highly

respected individuals from around the world represent a cross-section of the industry from upstream, midstream and downstream.

h e l a t e s t Treconfiguration of exhibition space, up to 1 0 , 8 0 0 s q m d u e t o overwhelming demand, will bring together major players and suppliers to the gas industry where their latest products, services and area o f e x p e r t i s e w i l l b e showcased directly to the

most influential gathering of i n t e r n a t i o n a l g a s professionals.

WGC2012 is sponsored and supported by the likes of Royal Dutch Shell, Qatargas, T O TA L , E x x o n M o b i l , RasGas, GDF Suez, KOGAS and BP, and is set to feature o v e r 5 , 0 0 0 i n d u s t r y p r o f e s s i o n a l s , 5 0 0 international speakers, 250 local and international media, more than 200 exhibitors and 10,000 trade visitors.

Strategic panels will represent topics of current significance to the gas industry including three

special projects: “Building Strategic Human Capital”,

“Nurturing Future Generations

22Gas

Australia set to become the world's leading gas player

Yemie ADEOYE

There are moves by

A u s t r a l i a t o

emerge as a leader

i n t h e

international gas

industry, as it played host

recently to investors, operators

and other stakeholders in the

global gas community.

The conference, first of its

kind to be hosted by the

Australian government was

organized in response to

industry demand, with a focus

on the markets contribution,

particularly to LNG, from both

a local and global perspective.

President of the International

Gas Union (IGU) Dr Abdul

Rahim Hashim, provided the

keynote speech for the event,

describing the transformation

of the global gas market and

Australia’s importance to the

sector. In his address, Dr.

R a h i m o u t l i n e d t h e

opportunities and challenges

that lie ahead for the industry

as Australia continues as a

frontrunner in developing new

technologies and innovations

to meet today’s energy needs.

Dr. Rahim said Australia Gas

2011 forms part of the IGU’s

w i d e r c o m m i t m e n t t o

promoting and enhancing

natural gas as a source of

clean, efficient and value

added energy to sustain future

global growth.

“In order to address the

many and varied opportunities

and challenges the industry is

currently facing, it is vital that

we bring the industry’s top

minds together to form a

collective and informed

response. We currently have

an exciting chance to direct

the course of the global energy

markets as we look to protect

our env i ronment whi le

meeting increasing global

energy needs.”

r. Rahim praised the

commitment of the Dglobal gas community and its

efforts to date, and emphasised

the need for the community to

continue its momentum in

steering the world towards a

low carbon economy.

“Strategic discussion and

networking opportunities like

Australia Gas 2011 bring

together the innovation and

critical thinking needed to

real ise the potential of

untapped synergies across the

industry. In this way, IGU sets

the platform for the global gas

community and a sustainable

future in energy.”

As the spokesperson for the

gas industry, IGU continues to

play active roles in initiating

and leading various efforts to

advocate the value and long-

term potential of natural gas as

the fuel of choice, today and in

Australia Gas Plant

In order to address the many and varied opportunities and challenges the

industry is currently facing, it is vital that we bring the industry’s top minds

together to form a collective and informed response

the future.

In keeping with this theme,

Gas: Sustaining Future Global

Growth is the focus for the

IGU’s 25 th Wor ld Gas

Conference 2012, where the

global gas community will

converge on Kuala Lumpur to

address the emerging trends in

light of political, sustainable

and security issues. Held

between the 4th and 8th of

June in Kuala Lumpur,

Malaysia next year, Dr. Rahim,

who is also the President of

Malaysian Gas Association

(MGA), will lead the IGU and

Asia to strategically position

the industry for international

growth.

Power companies seeking clarity on CIL pricingPower companies seeking clarity on CIL pricinghe power generating companies and coal T

traders in the country are seeking clarification on the move by Coal India Limited (CIL) involving withdrawal of the price rise in coal as well as on how the gross calorific value (GCV) mechanism would

prove to be cost neutral to them.

Coal India had proposed a new pricing mechanism that involved linking the prices to the quality of coal. According to estimates, the new pricing policy brought in by the coal monopoly would have resulted

in the coal to be become dearer by 12-15 % for the state-owned and private power utilities in the country.

CIL announced its decision to move from “useful heat value” (UHV) based pricing to (gross calorific value) GCV-based price mechanism from the beginning of 2012.

23FeedbackFeedback

Drilling of Chevron Nigeria’s relief well to last 100 days

Godson Gbodume (safety officer)‘I trust Chevron, but more safety officers & much safety devices should be on board, all hazards should be controlled to make sure no life is lost again, company public reputation should be protected.’

Madueke Promise Dennis‘I love this company and would like to contribute my quota in stopping any further inferno. Thumbs up Chevron Nigeria PLC.’

Osanya B. Osanya‘What are the plans of chevron to pay for the damages to communities.’Nigeria’s anti graft body deepens probe into fuel imports

Apostle Steven Nyong‘l disagree with the minister resigning now, she has not been indicted, if for any thing she has force Jonathan and the anger of the people, for him to act for the first time, and he acted well. I think we should all be patient and watch for more revelations, as the period has come when Nigerians will judge all those looters who perpetuate themselves in Govt. at all cost, to steal our wealth to the detriment of the poor masses. Nigerians should be on a strong vanguard and not to relent on their resolve to know how their wealth is being spent. This will spread to other tiers of Govt. They should demand accountability from these levels. More miracles are coming more hidden things, will come to light. They will never go unpunished, GOD’S HAND IS ON THE ISSUE. So many wicked people and their deeds will be expose. GOD is coming with a Great Anger. The

cries of the poor masses have been heard. NIGERIA needs TOTAL PRAYER/FASTINGS immediately to Seek GOD’S Face. GOD HELP NIGERIA.’

Nigerian govt bows to people pressureSiwele OmozGuy GEL. From the initial pump price of the premium motor spirit product of N65 per litre, to subsidy removal regime of N140 and now N97 per litre. Guy GEL. I just want you to know that a good name is better than a bad name. Try to lay a foundation of legacy and trust like great Mandela and Prof. Ambrose Alli (former Bendel head of state) did. What u don’t know is that time is very short, in less than 3 years from now. Your administration will come to an end then u will start campaigning again and start begging Nigerians to vote u again for second term in office, remember how much you spend on campaign then as most of you politicians believe that the masses are poor a cup of rice will do them to vote. Get that out of your thick skull and get this straight your antecedent will speak for you then, Ibeg Mr. GEL. Don’t let Nigerians and Niger delta down, will are looking up to you as our mentor. We will survive because we are survival already despite all the suffering the government are inflicting on the masses everywhere, we shall survive. N97. Per litre ok and not too ok but is better than N140 per litre, labour consider it and call of the strike let watch and see if the money from the subsidy will be accountable for. I appeal to the federal government to talk with ASSUU to call of strike we are sick and tired of wasting our time at home.

Nigerian government bows to people pressure

Osunkunle JosephWith this Mr. President speech, it shows that he was confused and Nigeria reserve have been spent. If not let him prove it. To Nigerians our trust is in God not in man if the senators, house of rep. and ministers are feeding fat and people complained ad no serious action was taken but just to fake us that 25% of their basic salary will be removed what about their allowances which they receive in millions. God is alive; He is going to judge every one of us, if it is good to suffer the whole nation because of one selfish and corruptable ambition. We knew that God put you there and he knows the appointed time to remove you. We are the Israelites; God will surely fight for us, AMEN.

Shell invests $10 billion on community development

Meeting Ovie JoshuaI am an indigene of Niger Delta, from Isoko north, hard working but ever since the completion of my secondary education, things have been very tough with him due to my inability to secure a well paid job. Am getting frustrated and I don’t want to do something stupid. Please Indeed a job to keep me going.

Nigeria’s Ministry of Petroleum Resources submits to probe

IjeomaMay the lord God use men who fear him in the EFCC to expose all who have plundered the Nigerian oil sector. May EFCC itself be devoid of fraudulent individuals too.

Nigeria’s anti graft body deepens probe

into fuel imports

Apostle Steven Youngl disagree with the minister resigning now, she has not been indicted, if for any thing she has force jonathan and the anger of the people, for him to act for the first time, and he acted well. I think we should all be patient and watch for more revealations, as the period has come when Nigerians will judge all those looters who perpetuate themselves in Govt. at all cost, to steal our wealth to the detriment of the poor masses. Nigerians should be on a strong vanguard and not to relent on their resolve to know how their wealth is being spent. This will spread to other tiers of Govt. They should demand accountability from these levels. More miracles are coming more hidden things, will come to light. They will never go unpunished; GOD’S HAND IS ON THE ISSUE. So many wicked people and their deeds will be expose. GOD is coming with a Great Anger. The cries of the poor masses have been heard. NIGERIA needs TOTAL PRAYER/FASTINGS immediately to seek GOD’S Face. GOD HELP NIGERIA.

Zakari Baderi

The minister should resign; to allow a transparent & unhindered investigation period!

Ogbunigwe Ndigbo vows to retaliate killing of Igbo in North

JacintaPlease my fellow Igbos, as usual let’s hold firm to our God, because is him & him alone will protect us from further killings,,, as 4 those in northern states,, I wonder what u r still doing there. It just fit the saying that, ‘yams r kept wit goats, I beg u, come back pls. do u value your businesses more than your lives?

Faithful OkonOgbunigwe Ndigbo, do you know d only barrier you might face in the struggle to tell Boko Haram that enough is enough from you Igbo people? “Lack of cooperation & unity from all Igbo people. Do you know why Boko Haram have so far are succeeded in their operations? Hausa people all over the nation are very united & have one mind. Before Boko Haram gave Igbo people in the north a 3 days ultimatum to leave d North, how many Igbos or non Hausas have they killed? After d ultimatum last week, they still carried out series of killings directly on d Igbos. I wonder the 2 weeks ultimatum given to northerners in d east for? If you’re serious why not send a signal to d northerners/Boko Haram by killing the Hausas in your locality/state with more than 500 & above casualties as a sign that you’re ready for them. Boko Haram has taken over Nigeria without serious arrest by Federal Government, State Government, security agencies etc with the fear of total war from the north, but if it were in the east even the governor or Igbo security officers will be the 1st to arrest such persons. I suggest there should be state police where all police officers should go back to their state of origin because these Hausa officers in the south & east are destroying us. Could you imagine almost all the Eastern States Governors boycott this nationwide strike on oil subsidy? While their northern counterparts participated actively & still participating till NLC calls it off. Action should speak louder than voice from Ndigbo.

24Power

Canada, India get BPE nod for due diligence on TCN

Clara NWACHUKWU

The Bureau of P u b l i c Enterprises, BPE h a s i s s u e d R e q u e s t s f o r

Proposal, RFP, documents to Manitoba Hydro of Canada and Power Grid of India to enable the firms prepare their bidding documents for the management contract for Transmission Company of Nigeria, TCN.

In a statement from the BPE, the two investors are presently undertaking due diligence on TCN and its network in order to submit their technical and financial proposals.

It would be recalled that the N a t i o n a l C o u n c i l o n Privatisation, NCP, at its meeting in August 2010, invited the two companies to re-submit technical and financial proposals in line

with current system and industry information for the management contract for the TCN.

The bureau also explained that “the technical proposals will be evaluated based on their transmission-loss-r e d u c t i o n , n e t w o r k improvement and capacity transfer strategy. The intent is to have a transmission company that will be capable of containing the anticipated changes in the Nigerian Electricity Supply Industry and Market.”

T h e o b j e c t i v e o f t h e management contract is to: • Reduce electricity losses during transmission;• P r o v i d e f o r t h e achievement of certain predetermined targets that would improve grid security and general performance;• Have reward and penalty clauses as incentives for success;

• P r o v i d e e f f i c i e n t management of government investments;• Ensure adequate and e q u i t a b l e g e n e r a t i o n dispatch according to a fair merit order based on sound regulatory principles;• E n s u r e f a i r m a r ke t s e t t l e m e n t s b e t w e e n electricity traders; and • Provide for skills and

e x p e r t i s e t r a n s f e r t o Nigerian counterparts who will serve in deputy and other positions on the management staff of the Management Contractor.

anitoba Hydro is Mthe electric power

and natural gas utility in the province of Manitoba,

Canada. Founded in 1961, it is a provincial Crown Corporation, governed by the Manitoba Hydro-Electric Board and the Manitoba Hydro Act.

The company presently operates 15 interconnected generating stations. It has more than 527,000 electric power customers and more than 263,000 natural gas customers. Since most of the electrical energy is provided by hydroelectric power, the utility has low electricity rates.

Power Grid Corporation of India Limited (Power Grid), on the other hand, is a Navra tna s t a te - owned electric utility company headquartered in Gurgaon, India. Power Grid wheels about 51% of the total power generated in India on its transmission network.

Power Grid has a pan-India presence with around 82,045 circuit-km of transmission network and 135 nos. of EHVAC & HVDC sub-s t a t i o n s w i t h a t o t a l transformation capacity of 91,945 MVA. The inter-r e g i o n a l c a p a c i t y i s enhanced to 22400 MW. Power Grid has consistently maintained the transmission system availability over 99.00% which is at par with the international utilities.

TCN is one of the 18 successor companies carved out of Power Holding Company of Nigeria, PHCN, w h i c h c o m b i n e s t h e functions of a transmission services provider, a system operator and a market operator, all of which are central to the sustainability and development of the electricity sector.

t was scheduled for a IManagement Contract in order to transit into a financially sustainable, stable, self-sufficient and market-driven company.

F o r t h e p u r p o s e o f procuring a management contractor for TCN, the BPE retained the services of British Power International, BPI, who were initially engaged by the PHCN to provide advice on the engagement of an Operation & M a i n t e n a n c e , O M contractor and other issues like the development of management information services and corporate governance procedures.

Shiroro dam

The bureau also explained that “the technical proposals will be evaluated based on

their transmission-loss-reduction, network

improvement and capacity transfer strategy

25Power

ABUJA – Even As the Federal Government w o r k s feverishly to

wound up the national electricity behemoth, Power H o l d i n g C o m p a n y o f Nigeria, PHCN, debts and liabilities owed by the company to other service providers is said to have accumulated to over N340 billion over the years.

The Managing Director of the Nigeria Electricity Liability Management Ltd. (NELMCO), Mr. Samuel

PHCN liabilities hit over N340 billion in 2012…Pays N10.8bn as pension annually

Oscarline Onwuemenyi

Solar power panels

Agbogun, who disclosed this to journalists on Monday in Abuja before an agency oversight visit by members of the House Committee on Power, also noted that the company aims to generate over N4.29 billion from the sale of PHCN properties in 2012, and more than N23.5 billion in 2013.

These involve the selling of PHCN’s non-core assets including the company’s London, United Kingdom properties, and staff quarters across the country.

e also noted that Hpensions owed more than 11, 000 retired staff in 2012 has amounted to over

N10.8 billion, and may escalate due to the recent wage increase for electricity staff announced by the Federal government.

Agbogun explained that some of the debts owed by the company come from the difference in the cost of producing electricity by power generating companies and the tariff paid by consumers on power.

He said, “It is common knowledge that the tariff cost for electricity in the country is not reflective of the price for producing power, and this difference has accumulated over the years and it is borne by PHCN.

“Other liabilities or debts

pwed by the company come from creditors who supply cables and other services used by PHCN, as well as liabilities to government agencies such as the Federal Inland Revenue Service, FIRS, among others.”

ccording to h im, ANELMCO has invited the various creditors of PHCN to bring proof of their claims from the expired power company, adding that due diligence would be carried out and claims confirmed before payments are made.

He said, “We have to do due diligence before these claims are paid; government has to

find a way to pay these debts to ensure they don’t keep increasing. These were transactions entered into by the company prior to its liquidation and devolution into successor companies, and we are trying our best to manage the bad debts that have arisen over the years.”

He explained that the company was set up to administer the stranded debts and assets of PHCN pursuant to the provisions of the Electric Power Sector Reform Act 2005.

“We were set up to assume a n d m a n a g e p e n s i o n liabilities of employees of PHCN, and to hold the non-core assets of the company (PHCN), sell or dispose off or deal in any manner for the purpose of financing and the payment of debts or other related matter,” he added.

NELMCO, he added, is also mandated to takeover the management and settlement of PHCN’s Power Purchase Agreement (PPA) debts, as may be determined by the N a t i o n a l C o u n c i l o n Privatisation (NCP) from time to time.

26Power

The Niger ian E l e c t r i c i t y R e g u l a t o r y Commiss ion , N E R C , h a s

insisted that service delivery and compliance with industry regulations and orders will be m a j o r i n d i c a t o r s f o r e l e c t r i c i t y b i l l i n g b y distribution companies under the planned tariff regime expected later in the year.

Chairman of the NERC, Dr. Sam Amadi, who said this when members of the House o f R e p r e s e n t a t i v e s Committee on Power visited the Commission as part of their oversight functions, in Abuja, also warned Chief E xe c u t i v e O f f i c e r s o f e lec t r ic i ty d is t r ibut ion c o m p a n i e s t o e n s u r e improved service delivery to their customers.

Amadi said, “The new tariff regime will be distribution company-specific and will be based on the level of efficiency each company is able to achieve between now and the take off of the new tariff later in the year.”

He added that , “The Commission hereby reminds C E O s o f e l e c t r i c i t y c o m p a n i e s o f t h e responsibilities owed to their customers particularly as regards its guidelines on C u s t o m e r C o m p l a i n t s Handling, Connection and Disconnection Procedures, Customer Service Standards of Performance and Meter Reading.

“We will be resolute and uncompromising in ensuring compliance and imposing sanctions on Chief Executive Officers and Managers of companies that fall short of the required standards.”

ome of the areas Se a r m a r k e d t o determine these efficiencies, Amadi stated, are the compliance in the removal of MMF and estimated billing o f y e t t o b e m e t e r e d consumers.

H e s a i d t h a t t h e Commission will enforce its o r d e r r e g a r d i n g t h e

Electricity companies to defend performance – NERCOscarline Onwuemenyi

cancellation of the meter maintenance fee (MMF) by calling on consumers that were charged the fee after the November 2011 billing circle to submit their claims to the Commission.

According to Amadi, “We will ensure that defaulting distr ibution companies refund any customer with genuine claims.” Genuine cases include customers who were charged MMF as from December billing circle, except debts owed the distribution companies.”

arlier in his comments, Et h e C o m m i t t e e Chairman, Hon. Patrick Ikhariale, said that the Commission had a vital role to play in the power sector reforms.

H e a d v i s e d t h e Commission on the need to achieve a favourable public perception, especially with the backdrop of the negative perception of the power sector and the belief by some members of the public that electricity is a public good to be consumed for free.

Ikhariale said some of the country ’s socio-economic problems could be traced to

the power sector and that the Federal Government was keen on addressing the challenges in the sector with some of the bold steps taken already.

NERC recently inaugurated a committee to investigate corrupt, exploitative and illegal practices through inadequate or poor metering by staff of Distribution Companies (DISCOs), as part of the Commission’s public inquiry into the Nigerian Electricity Supply industry.

he Committee is also Tcharged w i th the mandate to determine the

extent o f meter ing o f electricity customers in the country, as well as factors which delay the procurement and installation of meters in accordance with rules and regulations in the industry.

Amadi, who spoke to j o u r n a l i s t s a t t h e inauguration, stated that the rational for the inquiry is “to a r res t the scourge o f complaints which centre on the experiences of customers with regards to metering, billing and consumer care.”

e added that, “The Hinadequate supply of energy is most important technical issue but is not the priority social or human issue. The corruption of staff of utilities who exploit customers in many ways is the major challenge in the sector. This assert ion, however, needs to be verified and stopped.

“This event is therefore very important in the C o m m i s s i o n ’ s d a t a gathering process aimed at addressing the perennial problems of metering in the Nigerian electricity supply industry.”

Wind power

iemens Energy an

operator in the

Nigerian power Ssector has secured its first

wind turbine orders in Africa

with a total capacity of 100

MW.

This was announced via a

statement issued by the

company in Nigeria and

m a d e a v a i l a b l e t o

Sweetcrude.

Nareva Holding and

Siemens signed a contract

for the delivery of a total of 44

wind turbines for the

Haouma and Foum El Oued

Wind Power Plants in

Morocco. The scope of

supply includes the delivery,

i n s t a l l a t i o n a n d

commissioning of the wind

turbines, as well as a 5-year

service contract for each

project. Both wind power

plants are expected to

commence commercial

operation by summer 2013.

frica is an emerging Awind market with

Morocco currently the

number two country in terms

of installations. “These two

orders mark Siemens Wind

Power’s entry on the African

wind market and clearly

s h o w t h a t o u r

internationalization strategy

is successful,” said Felix

Ferlemann, CEO of the

S i e m e n s Wi n d Po w e r

Division. According to the

G l o b a l Wi n d E n e r g y

Council, wind power is one

of the most promising sectors

fo r renewable energy

generation in Morocco. The

Moroccan government has

set the target of raising the

contribution of renewable

energy to 20% of national

electricity consumption by

2020. Internationalization is

a key pillar of Siemens’

strategy in the global wind

market . Just recent ly,

Siemens announced that it

will establish three regional

Wind Power Business Units

for EMEA (Europe, Middle

East and Africa), Americas

and Asia as part of a new

Wind Power Div is ion .

Moreover, the company has

sales hubs in several

countries around the globe.

Siemens secures first wind turbine orders in Africa

Yemie ADEOYE

We will ensure that defaulting distribution companies refund any

customer with genuine claims

27Financing

ABUJA – The N i g e r i a E x t r a c t i v e I n d u s t r y Transparency

Initiative, NEITI, on Tuesday hailed the plan by the Federal Government to re-introduce the Petroleum Industry Bill to the National Assembly, noting that only the passage of the bill will truly usher the reform and growth expected in the industry.

The Executive Secretary of NEITI, Mrs. Zainab Ahmed, who noted this at a press briefing to announce the forthcoming of the National C o n f e r e n c e o n Implementation of Extractive Industries Transparency Initiative (EITI), in Abuja, also defended the methods used by the initiative in the selection of two indigenous firms to carry out audit of the oil and gas industry (2009-2011) as well as the solid minerals sector (2007-2010).

She said, “NEITI has welcomed the renewed efforts by the Federal Government to review and re-introduce the PIB for consideration and passage into law at the National Assembly. the on-going move b y g o v e r n m e n t i s commendable in view of the strategic importance of the PIB in improving sector governance, transparency and accountability on the oil and gas sector.”

hmed noted, however, Athat in reviewing the PIB document, all efforts should be made to guarantee substantial improvement in the fiscal regimes, sector governance and to ensure that the oil and gas industry conform to the tenets of NEITI Act 2007.

“NEITI is ready and willing to provide any information and data that will ensure that the PIB meets international best practice. NEITI is delighted that the nation and the National Assembly have been sensitized on the importance of the PIB,” she stated.

She stressed that as an agency set up to, among other things, develop a framework for transparency and accountability in the N i g e r i a n e x t r a c t i v e industries, and to ensure c o n f o r m i t y w i t h t h e

NEITI backs move to re-introduce PIB —Clears air over selection of auditors

Oscarline Onwuemenyi

principles of EITI, NEITI has a stake and a legitimate interest in the PIB.

“NEITI therefore wishes to use this opportunity to strongly advise the National Assembly to ensure that, in its consideration of the Petroleum Industry Bill, nothing but Niger ia ’s overriding national interest (optimization of revenue flows to Nigeria, protection o f t h e o p e r a t i o n a l environment, transparency, accountability and inter-generational equity) is held supreme,” she added

he NEITI boss has also Tdefended the recent selection of two indigenous firms, Sada Idris & Co. and Haruna Yahaya & Co, to carry out audits of the oil and gas industry and the solid minerals sector, stressing that the exercise followed all laid down laws, rules and regulations guiding public procurement.

She noted that, “NEITI is proud that two firms owned and managed by Nigerians competed favourably with foreign firms and on the bid

strictly on merit.”The oil and gas industry

audit is to be conducted by Sada Idris & Co. for the sum of N226.6 million while Haruna Yahaya & Co. is to conduct the first Nigeria’s solid minerals sector audit at the cost of N137 million.

Speaking on the planned National Conference on EITI, the anti-graft agency boss explained that since the

country signed up to the EITI i n 2 0 0 3 a n d t h e establishment of NEITI a year later, the agency is yet to create a national forum to bring together in one room, governments all levels, companies in the extractive sector, the legislature, civil society organizations, the media, among others, to dialogue, debate and discuss on implementation of the initiative.

“This is precisely what this f i r s t N E I T I N a t i o n a l Conference is all about.

h e c o n f e r e n c e i s Tcoming at a time that issues of transparency, accountability and corporate governance in the extractive sector, especially oil and gas industry, has become a matter of national concern.

“The NEITI National Conference is therefore planned to provide a national platform for the extractive sector to dialogue, examine, discuss, debate and share i d e a s o n t h e E I T I implementation in Nigeria,” she stated.

President Goodluck Jonathan

NEITI is ready and willing to

provide any information

and data that will ensure that the PIB

meets international best practice

ando PLC, a major operator i n N i g e r i a ’ s O

energy sector has said that it is a claimant in the Petrol Suppor t Fund (PSF) s c h e m e a n d n o t a beneficiary as widely reported.

This clarification was made on Tuesday, January 24, 2012, when its Group Chief Executive, Mr. Jubril A d e w a l e T i n u b u persona l ly appeared before the House of Representatives’ Ad-hoc Committee investigating the subsidy scheme to clarify its participation in the controversial scheme.

Mr. Tinubu decried the blanket insinuations that all the marketers and importers of petroleum products have constituted themselves into fraudulent bene f i c i a r i e s o f the Petroleum Support Fund (PSF).

The Oil boss told the Hon. Lawan Farouk-led ad-hoc committee that far from the insinuations being peddled around, Nigerians are actually the benef ic iar ies of fuel subsidy, while the scheme only re imburses the m a r k e t e r s f o r t h e differential in the landing cost of fuel and the government stipulated pump price. He further averred that the claims are pursuant to enabling laws. On the huge amount Oando has received as subsidy reimbursement, he said that as a leading player in the sector, with over 500 retail outlets across Nigeria, eight s t ra teg ica l ly loca ted te r minals (combined capacity of over 150,000 million litres) and over 1,980 trucks through partnership and invariably responsible for fuelling 1 in every 5 cars on Nigerian roads, it should not be surprising that Oando is o n e o f t h e l a r g e s t claimants under the PSF scheme.

However, he noted that the scheme was not without irregularities.

Subsidy probe: Oando sets record straight

Yemie Adeoye

NNPC Ad

NNPC Ad

30Financing

ABUJA - The N i g e r i a n H o u s e o f Representatives Ad-hoc

Committee probing the management of the nation’s oil subsidy payments said on Wednesday that Total Nigeria - one of the major oil marketers operating in the country - received excess subsidy claims of N2.7bn in 2011.

It is the latest in the series of discrepancies issuing from the House probe, which earlier uncovered an excess daily fuel import of 24 million litres above the nation’s 35 million litres

Nigeria Lawmakers say Total got N2.7bn subsidy overpayment

daily consumption.Appearing before the

committee, Total Nigeria managing director, Mr. D o m i n i q u e T h i o l o n , admitted that his company got excess payment, but stated that the overpayment had been returned to the Petroleum Products Pricing and Regulatory Authority (PPPRA).

e had initially denied Hthe possibility of an over-payment in its dealings w i t h t h e P P P R A , b u t admitted when he was confronted with records indicating that Total Nigeria Plc received excess subsidy claims of N2.7bn in 2011.

H e t o l d t h e p r o b e committee that Total received subsidy amounting to N16.1 billion for 211 million litres of petrol it supplied in 2011 but the panel produced a document showing the actual subsidy received by the multinational oil firm for the period was N18.8 billion, a difference of N2.7 billion.

T h e c o m m i t t e e a l s o confronted Total on the 2010 subsidy payments, arguing that the payment of N11 billion for 251 million litres of petrol for the year raised some questions.

The panel was of the view that the payments appeared to be inversely proportional

to the quantity of petrol imported by the company.

Members of the panel queried why the company received more subsidy in a period it imported less petrol and got less subsidy when it imported more fuel into the country.

n response, Thiolon said Ithe seeming discrepancy was normal as petrol was imported based on the prevailing price at the i n t e r n a t i o n a l m a r k e t . According to him, the price of refined products changes on a daily basis like the price of crude oil.

E x e c u t i v e S e c r e t a r y (FIRS), Mrs Ifueko Omoigui-

Okauro also appeared before the probe panel, Wednesday, and efforts by the committee to ascertain, from her, the tax-paying status of the 128 companies involved in fuel importation did not yield results.

Omoigu-Okauro told the panel that she was not sure if some of the companies were “ r e g i s t e r e d f o r t a x purposes,” adding: “There is a possibility that some of the c o m p a n i e s w e r e n o t registered for tax purposes, but this is subject to confirmation.”

She said her agency was currently conducting an audit on the tax status of the companies and would provide a comprehensive report on completion.

Total filling station

31Insurance

Mr .

Olusola Ladipo-Ajayi is t h e

Cha i r man o f N ige r ian Insurers Association and the Managing Director of Lasaco Assurance Plc . In this interview with Rosemary Onuoha, the NIA Chairman reveals that the insurance sector did not benefit from the huge figures being bandied about from fuel importation

Fuel subsidyThere is a lot of information

coming out of the fuel subsidy probe now. However, with t h a t a m o u n t o f f u e l importation, if the Nigerian law that makes it compulsory for the importation of goods into Nigeria to be insured has been observed, you would have seen it in our reports. But I don’t think we have anything to show that goods worth that amount have been insured in the Nigerian market. Even the government officials in charge cannot agree on figures. The Central Bank will give one figure, NNPC will give another thing, and the Ministry of Finance will give another figure. Everything is just working at cross purposes but we don’t have any figure to come near anything that anyone of them has said.

Terrorism insuranceerrorism insurance is Ta v a i l a b l e i n t h e

international market but it doesn’t come very cheap and w e h a v e t o b u y t h e reinsurance backup to do it before we can start selling it. And it is only now that the issue of terroroism or Boko Haram is taking a new dimension and it appears that it won’t go away. And of c o u r s e t h e f e d e r a l government does not even buy terrorism insurance even in oil and gas. Where they have been offered, the federal government of Nigeria has n o t b o u g h t t e r r o r i s m insurance. So we haven’t started doing terrorism insurance because it is very expensive and we just pray that this Boko Haram phase will pass by. If it is persistent and people are looking at that direction, once we start having enquir ies f rom members of the public, the m a r k e t w i l l r e s p o n d accordingly. But we don’t want to fish in troubled waters; we don’t want to

Fuel importation has not benefited insurers —Ladipo-Ajayi

Refinery

promote it because when we do, we are saying that this Boko Haram thing will never go away. We don’t want to do that.

Oil and gas insurancehe NIA is working Tc l o s e l y w i t h t h e

N a t i o n a l I n s u r a n c e Commission, NAICOM, to fine tune the Guidelines for the underwriting of oil & gas insurance in year 2012. It is our expectation that more member companies will take advantage of the local content law and participate in the insurance of oil and gas assets. And as you may know we have a number of major claims in that sector now, but I want to assure you that the members of NIA will respond favourable to the admiration of the insuring public.

N i g e r i a n I n s u r a n c e Industry Database, NIID

I s s u e s c o n s t i t u t i n g

leakages in the insurance industry in Nigeria are f raudulent insurances , problem of inadequate pricing, unethical conducts and multiple claims, these are issues that we have to contend with. On the issue of fake insurance operators, the black market in Nigeria is thriving more than the regular market because it has no obligation.

hey are only collecting Tmoney without paying c l a i m s a n d t h e r e f o r e bastardizing the practice of insurance. At the end of the day you will find out that there are more vehicles insured in the black market than we have in the regular market. Another issue is that of inadequate pricing borne out of competition. The need

to capture as much as possible a larger market share have made operators to be at each others throat coupled with every form of unethical practice both from within and outside the industry are things that we seek to eliminate by these industry-wide data base.

For multiple claims, we have tried to sort it out manually by saying that if somebody is raising a claim we circulate it among our members but these things don’t work out fine and we have had only very few instances where we have taken the benef i t s o f consultations. In fact in my own experience, I think that there is only one celebrated case that I remember

CONTINUES ON PAGE 32

It is our expectation that more member

companies will take

advantage of the local

content law and

participate in the insurance of oil and gas

assets

32Insurance

involving a number of companies when they were able to apprehend a man for trying to defraud many companies. However, that was almost thirty years ago. So it is not that there are no new challenges as such, it is just that the intensity has been increasing and the need to arrest them cannot be more pressing than now.

t is not always very easy Ito have what you call social change on an industry-wide or nation-wide basis, to change people from the way they have been doing something for almost of 100 years. And you don’t imagine that you can just change it overnight. And these are always challenges especially in the insurance industry. At this moment there are so many changes that are taking place at the same time. We are gravitating from the normal a c c o u n t i n g s y s t e m t o in ter nat ional f inancia l reporting standard, we are doing risked management,

Fuel importation has not benefited insurers —Ladipo-AjayiContinued from page 31

we are doing anti money laundering issues where we now have to render account and people are now being charged N500,000 for late rendition of account. Now we are also doing NIID which is voluntary based. So many things are happening at the same time that we are stretching ourselves to the limit. Most companies who are used to rendering their account by June 30th are now

required by law to render it by 31st of March. If you go to insurance companies now all the powers that be are always running around trying to get s o m e t h i n g d o n e . We c o m p l a i n e d t o t h e Commissioner for Insurance that these things are too many coming at the same time. We are carrying out too many reforms at the same time and he said the whole world cannot wait for Nigeria.

e said that it is not the Hr e q u i r e m e n t o f N A I C O M b u t t h e requirement of IMF and the Federal Republic of Nigeria is a signatory. If you don’t send your anti-money laundering report now, minimum fine you can pay is N5000,000. They warned that some of us may be paying N500,000 per day if care is not taken because they believe that insurance people don’t render returns. So we have internal challenges. On the NIID we are not working alone, we are integrating with FRSC, as well as the police and it is an internet based

scheme which is supposed to provide real time online verif ication module. If somebody who is in Badagry, Maiduguri, Akwa-Ibom or even the remotest places is buying an insurance policy; it must be verifiable within a specified period. So it is also a scheme where there must be zero tolerance to failure anything that is captured must be there. So it will take time to take off the ground o t h e r w i s e w e w i l l b e shortchanging ourselves and our members who have sold genuine policies will be missing from the data base and it will be counter productive. And we don’t want a system where we will start something and rather than get the result we intend we will now be getting the opposite.

eanwhile, there is Msomething that the NIA is really working at and this one we will give it the last drop of blood in our veins. There are some people who a r e n o t l i c e n s e d intermediaries. They come

together and get authority of some state governments and create a monopoly for a h a n d f u l o f i n s u r a n c e companies and in those states they are the only ones that can sell insurance documents. We are against that at NIA. Every insurance c o m p a n y l i c e n s e d b y NAICOM to operate must be able to sell her products in any part of Nigeria.

ll of us are running ANigerian companies. Secondly most of these companies take so much money from the premium that at the best of time the insurance companies at the end of the day from the N5,000 get only N2,500. There are places where they get less than that because these people will say they have incurred all sorts of expenses and at the end of the day, the insurance companies don’t get much. That is the second reason why we don’t want these people to be involved in the distribution of insurance.

Ladipo-Ajayi

An insurance e x p e r t h a s appealed to i n s u r a n c e consumers to

c o n t i n u e t o e m b r a c e insurance covers in the wake of high rises in the prices of g o o d s a n d s e r v i c e s occasioned by the hike in the pump price of fuel saying that insurance is a life saver.

The appeal is hinged on the fact that the insuring public is quick to discard insurance when economic situations get tougher.

Managing Director of FBN Life Assurance, Mr. Val Ojumah, who spoke to Vanguard noted that the insurance sector is always the weeping baby when people begin to consider factors that they have to cut off from their scale of preferences.

To this end, Ojumah called on insurance consumers to go

Expert tasks consumers on insurancing against harsh economy

ahead and renew their policies for the 2012 financial year as they will not regret it.

He said, “In the wake of the recent increase in the pump price of fuel which has resulted in the astronomical rise in the prices of goods and services in the country, consumers of insurance products and services should go ahead and renewal their policies for 2012 because the importance of insurance cannot be over emphasised.”

hile regretting that Winsurance is the first thing that gets cut off when the economy becomes too hard, Ojumah stated that Nigerians should change that negative perception and see insurance as a basic necessity of life.

Ojumah said, “Insurance activities may suffer in 2012 b e c a u s e i n s u r a n c e

consumers heavily burdened by the hike in fuel price are l ikely to cut of f their insurance contract as a tightening measure to beat

the high economic cost being occasioned by the hike in fuel price, but such move will not be the best.”

Ojumah cautioned the insuring public to employ sound economic decisions because cutting off insurance from their scale of preference may not be the best of options.

e said “Removing Hinsurance from ones agenda for the year could turn out to be a bad choice w h i c h a n y i n s u r a n c e consumer can make because insurance is a necessity for everyone.”

Lending his voice to the argument, former Managing Director of Nigerian Insurers Assoc ia t ion , NIA, Mr. Ezekiel Chiejina, said that the hike in fuel price could cause some insurance consumers review their scale

of preference, however, insurance should not be the weeping child in such a list.

Chiejina was however optimistic that the effect will not be too severe on life insurance business because most life policies are long term in nature.

It will be recalled that after a week-long of strike, rallies, street protests and talks with labour, President Goodluck Jonathan announced a new pump price for petrol at N97 per litre.

The new price is N44 less than the N141 announced by the Petroleum Products Pricing Regulatory Agency, PPPRA, on January 1st; and N32 higher than the former price of N65, demanded by labour and the civil society.

According to the President, PPPRA has been directed to ensure compliance with the new pump price.

Jonathan, however, said that his government is working hard to reduce recurrent expenditure in line with current realities and to cut down on the cost of governance.

The appeal is hinged on the fact that the insuring

public is quick to discard

insurance when

economic situations get

tougher

NigerDockad

34Labour

THE Minister of Power and the two in -house unions in the Power Sector,

National Union of Electricity Employees, NUEE, and the Senior Staff Association of E l e c t r i c i t y a n d A l l i e d Companies, SSAEAC, are scheduled to meet on February 18, after what could be regarded as their interface, in Lagos last month. Few days to the meeting in Lagos, the General Secretary of NUEE, Comrade Joe Ajaero, who could not attend the Lagos meeting, spoke to Sweet Crude Correspondent, Victor Ahiuma-Young, on some issue in the sector.

Excerpts People have argued that

the National Union of Electricity Employees, NUEE, has not shown enough commitment to improve the power sector and power supply in the country. What is your response?

The union has shown enough interest to ensure that the sector perform and work for the benefit of Nigerians that is why we are at the collusion point with the powers that be and that is w h y w e h a v e b e e n inconvenienced so much, more than any other groups in this country. When I said inconvenienced, I mean every word of it. It was based on this that soldiers were first deployed to all the stations in 2010, it was based on this that police were stationed in our national secretariat even with Armoured carriers and during the protest that followed across the country, many of our members were brutalized, arrested on this same course.

t was based on this that Isome people came here (Secretariat) to abduct us and actually abducted the Assistant General Secretary, AGS Administration and my personal Assistant only to take them to EFCC office

Power sector is too sensitive to be toyed with —Ajaero

when they realized I was not there. The people came and started breaking doors which is not the way the EFCC we know operates. EFCC would have invited us if we did a n y t h i n g w r o n g , t h e commission would have written us letter and they would have even called us to come to their office assuming we have public funds that we

are tempering with or did anything wrong. But these people came here armed to their teeth and were seriously looking for the General Secretary and when they did not see him, they abducted two people. It was because of this conviction that we are even at this process now.

e have to report to WEFCC only for us to hear that some executive directors were diverting union funds or levy. Initially, they said our levy was illegal and we told them that we derived such powers to collect levy from the organs of the union and if they say there is a levy and we impose it, it is a non-governmental agency. We told them that if this was part of the check-off dues on some of the allowances on monetization, what was imposed was even small. Yet, these agencies would still come every time as if they are trying to use them against us or to moderate us. You know

as a union, we will not allow ourselves to be cowed. Again last year, your paper reported it, when they swooped on my vehicle, carried the driver and left. They were looking for me and when they did not get me, they dropped the driver and later abandoned the car. So, these are some of the things we have passed through by insisting that the right thing should be done.

You have also seen the kind of media assassination since late last year on our persons, on our mission and it has continued that way because they do not like dialogue. Nobody has said, wait a minute, let us engage these people on how best we can achieve better result. It is the use of raw power of the gun.

e h a v e s h o w n Wenough commitment a n d p r o v i d e d incontrovertible evidence that privatization has not and will not work in Nigeria and that the power sector is too

sensitive for anybody toy with. They toyed with Daily Times; we have option to read Vanguard and other newspapers. They toyed with Ajaokuta Steel and so on, none of them is working today.

f you traced the history of Iover 50 countries that tried privatization of the power sector, and we have challenged them to tell us where this has worked. They have not and they are forcing us to accept that Nigerians should swallow this bitter pill that is where we differ. What they are prescribing is not good for the country. Even if we fear the troops now being deployed, there is no way we can leave our work places, having work for 30 years, 10, 20 and so on, without getting our entitlements and we must sit down to look at these issues.

Some have alleged that you are fighting a personal agenda with your position as the General Secretary of NUEE, using event that happened in Enugu during the minimum wage struggle as an example. What is your response?

Let the people who claim that I am fighting personal agenda tell Nigerians the agenda. I want it to be placed on records that all the Ministers of power that I have worked with, I have not visited any of them in their office and I do not know the colour of their office whether it is yellow or brown. I have not even taken a cup of water from any of them. Assuming I am not visiting the one there now, that is my style and I have been operating that way. Let any of them come out to controvert that and I am comfortable with what I am still doing.

o say it is a personal Tf i g h t , i t i s v e r y mischievous because we are just servants of the union and we are doing its bidding. They should know that where you have a union with over 25,000 members, you cannot impose you will on them if it is possible. There are organs, at the Central Executive Council meeting, National Executive Council meeting and even at the national conference, members give directives and I cannot go contrary to that.

Prof. Barth Nnaji

You have also seen the kind of

media assassination since late last year on our

persons, on our mission and it has continued

that way because they do

not like dialogue

35Labour

ORGANISED Labour in Nigeria has s a i d t h e only reform

the nation needs in the downstream sector of the Petroleum industry, is a comprehensive reform that will confer the maximisation of benefits of oil on the national economy and one that will revive domestic refineries, encourage the establishment of new ones across the country and reduce dependence on imports. Under the umbrella of Nigeria Congress, NLC, L a b o u r a r g u e d t h a t domestic products pricing must not be based on import price parity to confer on the d o m e s t i c e c o n o m y a competitive advantage based on the resource in which the country is richly endowed.In a presentation t o t h e H o u s e o f Representatives’ Ad-Hoc Committee Hearing on Operation of the Subsidy Scheme in the Petroleum Sector, Congress listed revival of domestic refining through existing refineries and promotion of new r e f i n e r i e s , r e -institutionalisation of a po l i cy o f d i f f e ren t ia l between the price of crude for domestic consumption a n d f o r e x p o r t a n d Promotion of Competition as w a y s t o e n s u r e t h a t Nigerians derive maximum benefits from downstream sector. According to NLC “We believe there is a genuine need for a reform of the oil industry. In the upstream today, Nigerians know that crude is being stolen.

o w e v e r , t o Hconcentrate on the downstream for now, we support a comprehensive reform which will confer the maximisation of benefits of oil on the national economy. There is need to admit that the existing reforms are not working and that a more comprehensive programme of reform needs to be agreed among all stakeholders. We r e c o m m e n d a r e f o r m agenda that will seek to revive domestic refineries, e n c o u r a g e t h e establishment of new ones across the country and

How downstream oil sector can benefit Nigeria—NLC

Victor AHIUMA-YOUNG

Organised Labour Leaders

reduce dependence on imports. It is also our contention, that domestic products pricing must not be based on import price parity so as to confer on the d o m e s t i c e c o n o m y a competitive advantage based on the resource in which the country is richly endowed.” ”We believe that our domestic refineries must be made to work. Appropriate incentives need to be worked out to attract new investment in refining. While domestic refining by itself is not sufficient to guarantee product price stability, there are clear gains to be derived from domestic refining as opposed to imports.

here are the overall Tgains in employment and general economic activity. There are also the obvious savings in freight and insurance costs. In addition to these, domestic supply of products will relieve the destabilizing p r e s s u r e o f i m p o r t d e p e n d e n c e o n t h e exchange rate. It is worth

emphasizing that a reform policy based on importation of refined products is inherently destabilizing for the domestic economy. Importation necessarily puts pressure on the exchange rate of the naira. Since the exchange rate is one of the two major determinants of the domestic price of petroleum products in an import based reform regime,

a destabilizing mechanism becomes automatically a feature of the system.” Continuing, NLC said, “As long as the domestic prices of products continue to be tied to the international price of crude, the crisis will remain.

t is in recognition of this Ithat we propose a re-introduction of a modified policy of guaranteed crude p r i c e f o r d o m e s t i c consumption. Rather than returning to the fixed guaranteed price as earlier operated, we propose a price band within which the price of crude for domestic consumption can fluctuate. In this regard, we agree with the spirit of the proposal put forward in the Senate Committee on Employment, Labour and Productivity report to the Senate on the 7th of October 2004. This proposal involves setting “a price modulating band for crude to be processed in N i g e r i a f o r d o m e s t i c consumption”. “As for the specific band, we propose the cost of extraction and

delivery to the gates of refineries X as the floor and X+Y as the ceiling, where y is the target inflation rate set by government policy in the current year. The adoption of this mechanism will ensure a stable price regime that will allow economic actors make plans. It should be e m p h a s i z e d t h a t t h e guaranteed price should not be on offer to only NNPC, but to all refiners and to the limit of the crude actually r e f i n e d f o r d o m e s t i c consumption.

iven that in the short Grun, there are no domestic refiners, tenders should be opened for the domestic crude for potential refiners to bid with clear timelines on domestic refining. In the short term, which should not exceed two years, bid winners will be allowed to arrange off-shore contract refining.” NLC added that “the downstream s e c t o r a s p r e s e n t l y constituted is characterised by industry dominance by N N P C a n d g e n e r a l monopolistic tendencies. Recommendations need to be made on how to open up the sector to competition. We need to design strategies for opening up monopoly assets and infrastructure (such as import receptacles, storage depots and pipelines) to competitors, who must of course pay economic fees. It needs to be recognised and emphasized that the implicit subsidy implied by the guaranteed crude price scheme need not undermine c o m p e t i t i o n a n d deregulation. Examples abound the world over where subsidies continue to be provided in deregulated a n d c o m p e t i t i v e e n v i r o n m e n t s . T h e agricultural sectors of the economies of the United S t a t e s a n d o t h e r Organization for Economic C o o p e r a t i o n a n d D e v e l o p m e n t , O E C D , countries are competitive and deregulated.

e t , a g r i c u l t u r a l Ysubsidies continue to be provided daily. In like manner, a number of drug subsidy schemes exist in various countries of the w o r l d . Y e t , t h e pharmaceutical industry remains deregulated and competitive.”

It is also our contention, that

domestic products pricing

must not be based on import price parity so as to confer on the domestic economy a competitive advantage

based on the resource in which the

country is richly endowed

National Assembly in section

36Labour

ORGANISED

labour has

advised the

7thNational

Assembly to

be guided by national interest

w h e n c o n s i d e r i n g t h e

Petroleum Industry Bill, PIB,

a n d v o i d a l l c o n t r a c t

confidentiality clauses for

information on upstream,

downstream, and midstream

taxes, royalties, fees , bonus

Pa y m e n t s , c o n t r a c t u a l

obligations, budgets, projects

and so on.

Under the aegis of the Trade

Union Congress of Nigeria,

TUC, said to maximize

returns, the PIB must make

express provision that will

ensure that government

allocates oil /gas licences

through open and competitive

processes to well-qualified

companies.

In a piece by the Rivers State

Chairman of TUC, Comrade

Hyginus Chika Onuegbu, who

is also the former Port Harcourt

Zonal Chairman of the

Petroleum and Natural Gas

Senior Staff Association of

Nigeria, PENGASSAN, he

lamented that ithe past,

contracting and licensing had

suffered from deep abuses of

secrecy and discretion, saying

irregularities marred all major

bid rounds held in the 2000s,

bringing about lawsuits,

i n d i c t m e n t s , s a c k i n g s ,

cancelled or revoked awards,

and legislative probes.

e said “The process for Ha w a r d i n g l i f t i n g

licenses and other licenses in

t h e M i d s t r e a m a n d

downstream sectors should be

as open and transparent as that

of the upstream. Nothing

should be left to discretion and

nothing should be done in

secret. The PIB should insist

on strict rules of accountability

and financial reporting in the

oil and gas industry; and these

must be observed strictly by all

parties. The PIB should also

include sanctions for any non

observance of these rules

including punitive fines and

prison sentences for the Chief

Executive Officers and Board

members of the defaulting

organisations. It is important

that the annual audit of the

National Oil Company and all

the agencies created by the

P I B a r e p r e p a r e d a n d

disclosed in accordance with

high quality international

standards by independent,

PIB: Uphold national interest, labour tells National Assembly

Victor AHIUMA-YOUNG

competent, experienced and

qualified auditors as presently

done by other national

companies l i ke Pemex ,

KazMunayGas, and Statoil. In

addition such audited financial

report of the National Oil

Company and these agencies

should be published in their

website.”

Comrade Onuegbu, said the

existing laws especially the

Petroleum Act left so much to

the discretion of the Minister

and the regulatory agencies,

saying “the PIB must ensure

that noth ing i s le f t to

discretion, as discretion

e n c o u r a g e s a b u s e a n d

corruption.”

“The Chief Executive Officer

of the National Oil Company

should be appointed /removed

from office just like the

Governor of the Central Bank

of Nigeria and the Chairman of

the Independent National

Electoral Commission.

he present arrangement Twhere the GMD of the

NNPC can be appointed or

removed from office via radio

announcement should be

discontinued in the PIB. In

a d d i t i o n , t h e p r e s e n t

arrangement where the board

of the National Oil company is

chaired by the Minister of

Petroleum Resources should

similarly be discontinued as it

essent ia l ly subjects the

operations of the National Oil

company to the murky waters

of the Nigerian politics and this

is not proper if the national oil

company wil l run as a

profitable and transparent

company.”

Role of trade unions

Continuing, the Rivers State

TUC Chairman argued that

“Trade unions have a crucial

role to play if the final version

of the PIB that will be passed

into law will achieve the

original objectives of the Oil

a n d G a s R e f o r m

Implementation Committee

(OGIC). The Labour Unions

especially PENGASSAN and

NUPENG whose members

work in the Nigerian oil and

gas industry should undertake

the following: The labour

unions should as a matter of

urgency request the National

Assembly through the office of

the Senate President and the

Speaker of the House of

Representatives to make

public in the websites of the

Senate and the House of

Representatives, the authentic

version of the Petroleum

Industry Bil l to enable

Nigerians rebuild confidence

in the PIB legislative process

and encourage Nigerians

participate in the PIB law

making process.

Trade unions have a crucial role to play if

the final version of the PIB that will

be passed into law will

achieve the original

objectives of the Oil and Gas Reform

Implementation Committee

(OGIC)

KaztecAd N

Steel Factory

38Solid Mineral

AB U J A -

Worried by the c o m a t o s e state of the nation’s steel

s e c t o r, t h e N a t i o n a l A s s e m b l y o n M o n d a y charged the Ministry of M i n e s a n d S t e e l Development to do more to develop the nation’s steel industry and make it more viable for investment.

The Chairman, House C o m m i t t e e o n S t e e l D e v e l o p m e n t , H o n . Saddique Asema, who noted this during an oversight visit to the Ministry of Mines and Steel Development, also urged the Ministry to come up with relevant draft legal f ramework that would redefine the sector that could

Oscarline Onwuemenyi

NASS tasks ministry on development of steel sector*Say N120bn required to revamp sector

also be considered by the legislature.

He noted that no matter the t ransformation agenda pursued by the present administration, Nigerians and Nigeria’s economy may not benefit maximally except the Steel sector is fully developed, adding that a viable steel industry makes up for a large part of every development indices of any developed country.

e stated that, “At Htimes I begin to worry why the Executive cannot and has continued to refuse to put in money to revamp the steel sector especially that of Ajaokuta,

Delta Steel and Aladja. It is on record that no country can be said to have truly developed without a well-developed steel industry, and Nigeria has been playing with this sector for many years.

“All we need to bring back these critical industry is not more than N120 billion; it is m y h o p e t h a t t h i s administration finds this money from other sources to bring back our steel industry before we can go ahead to privatize them if necessary.”

The legislator decried past administrations for not giving the needed attention to revamp the steel projects in Nigeria, stressing that, “I can assure you that apart from the

government of Alhaji Shehu Shagari who put so much funds to develop the sector, o t h e r s u c c e s s i v e a d m i n i s t r a t i o n s h a v e abandoned the projects and the industry at large.

ccording to Asema, Awith the steel sector fully developed, Nigeria would be a true giant of Africa.

H e a l s o n o t e d t h a t currently, there are no laws that guide or regulate the sector, hence the many failed attempts to privatise some of the steel companies in the country.

Asema said, “Presently, there are need for laws that

will regulate the Steel industry in Nigeria, it is only painful that what we have now are mere agreements signed by the Ministry and those companies tha t b e n e f i t t e d f r o m t h e purported privatization.

“We want your Ministry to come up with legal drafts especially as you already have experts as well as a legal unit, your officers should be able to come up with better drafts on the way forward for the sector after which you take the draft to the Federa l execut ive Council for debate and finally the drafts comes to us at the national assembly to make inputs and come up with relevant laws, this is the best way i think all of us can go.”

e equally directed Ht h e M i n i s t e r o f M i n e s a n d S t e e l Development, Arch. Musa Mohammed Sada to press it on the Presidency to go back to the resolutions passed by the 6th National Assembly on Steel Development, s t r e s s i n g t h a t i f t h e resolution is revisited by the Executive, it will also go a long way to address the sharp practices in the sector.

Earlier, the Minister of M i n e s a n d S t e e l Development Arch. Musa Mohammed Sada told the committee that the ministry has already stated the drafting of such legal frame work to reposition the sector noting that the ministry still needs the Committee to approve its 2012 budget to enable it get sufficient funds to organize local and international fora in view of d r a w i n g i n p u t s f r o m international and local experts to contribute to such drafts before they are passed to the Federal executive council for considerations.

The Minister assured the committee that the present a d m i n i s t r a t i o n w a s determined to bring back the still projects so that the overall economy could be galvanized, adding that the rot that has taken place over many decades cannot be cleared overnight.

Sada promised that the ministry will work with the committee to craft the necessary regulations to guide the activities in the sector the benefit of the country.

39Solid Mineral

In its bid to expand the solid mineral sector and harness it f o r s u s t a i n a b l e development and

g r o w t h , t h e F e d e r a l Government has embarked on far-reaching reforms in the sector. These reforms ranged from the creation of technical departments and agencies in the Ministry of Mines and Steel Development to the e n a c t m e n t o f N i g e r i a Minerals and Mining Act 2007, and the development of the new Mining Regulations has ushered in a new regime of transparent mining and mineral titles administration in the country.

O v e r t h i s p e r i o d , government has invested heavily in the sector through comprehensive geo-scientific information gathering to the c r e a t i o n o f e n a b l i n g environment for investment opportunities in the sector.

peaking last week at a Sw o r k s h o p o n Investment Opportunities in the Nigeria Mining Sector, in Abuja, the Minister of Mines and Steel Development, Arc. Mohammed Musa Sada, explained that the Federal government has emphasized the development of best practices in the solid mineral sector and has led by example in the area of efficient and proactive regulations to guide activities, as well as ensuring the security of mining titles through the formalization of the Mining Cadastre Office which will serve as the hub of m i n i n g l i c e n s i n g a n d securitization of titles.

According to Sada, “We have so far come to a stage where the guidelines, legislations and regulations are well in place. The next stage is for action proper; that is why we have decided to go into p a r t n e r s h i p w i t h organizations and countries to bring in the kind of technology that we require to work in this sector. We have had extended discussions with the Swedish government through their embassy in Nigeria. Swedish companies are some of the leading manufacturers of heavy mining equipment like drilling rigs, which is the one o f the mos t impor tant machinery needed in this country at this time to do further exploration works at the various mines.

Investing with ease in Nigeria’s mining industry*As FG lays emphasis on security of titles

Oscarline Onwuemenyi

“Currently, we have over 10,000 exploratory licenses out there, and each and every one of these licenses will require one type of rig or exploration machine or the other. Through this workshop, we aim to expose some Nigerian companies and o ther inves tors to the machines that they require for their activities.”

e explained that Hduring the workshop also there will be discussions over how companies can acquire the heavy machinery and equipment needed for exploration in the sector. “Some of the equipment are very expensive and may be

beyond the reach of some companies. So, we will be looking at ways and means of making these equipment a v a i l a b l e i n c l u d i n g contracting, hire-purchase and renting to people who need them, so that we can begin to achieve in more concrete terms some of the exploratory licenses that we issued, and we will now start coming through with data and information that is required for effective mining activities,” Sada stated.

n the government Oside, the Minister noted that emphasis is being placed on enforcing the security of mining titles in

order to boost the confidence of

investors in the sector.

A c c o r d i n g t o h i m ,

“G o v e r n m e n t i s d o i n g

everything it can to ensure that

mining titles are secure, and

we consider this as one of the

most important aspects of the

reform with the economy. we

make sure that when we give

the miner his title, that title is

s e c u r e a n d c a n n o t b e

overturned unless there is

e x c e s s b r e a c h o f o u r

r e g u l a t i o n s o r, w h e r e

necessary, if we have to

enforce our ‘Use it or Lose it’

policy.”

ada explained some of Sthe incentives being

provided by government to

include exemption from

customs and import duties in

respect of plant, machinery

a n d e q u i p m e n t , a n d

a c c e s s o r i e s i m p o r t e d

exc l u s i v e l y f o r m i n i n g

o p e r a t i o n s . “ T h i s

administrat ion has also

approved an expatriate quota

and resident permits in respect

o f approved expa t r ia te

personnel and personal

remittance quota for expatriate

personnel free from any tax

imposed by any enactment for

transfer of external currency

out of Nigeria,” he said,

adding that permission has

also been given for remittance

of foreign capital in the event

of sale or liquidation of mining

plant.

Local Miners

40Freight

We represent generations of marine pilots —Captain Perebo

Indigenous marine pilots under the aegis of Escravos River Pilots Nigeria Limited have been

rendering marines pilot services for more than ten g e n e r a t i o n s , i n t h i s interview with sweetcrude’s Godwin Oritse, Captain Solomon Perebo stated the peop le o f Gbaramatu kingdom first offered such services to Europeans as far back as 1888. He also spoke about the challenges they are currently facing which to a large extent have put their services in jeopardy.

Excerpts: Can we meet you?My names are Captain

Solomon Samsom Perebo of the Escravos River Pilots Nigeria Limited, we render marines pilot services to merchants vessels calling at the ports of Warri, Koko, Sapele , Burutu and Aladja.

How has the company been in existence?

This company has been e v e n b e f o r e t h e independence of this country, however, we inherited this trade from our great grand fathers as far as the late 17th century.

Th i s was when the Portuguese first came to this part of the country for their trade.

u r i n g t h a t o u r Dforefathers who were fisher men met these foreigners and offered to guide them through the deep and shallow parts of the channels.

However, ,we are have been piloting ships from Forcados channels, the Forcados river used you be channel to the port but because the Forcados channel is not as deep as the Escravos channel, the G o v e r n m e n t o f S i r Abubakar Tafawa Balewa approved the use o f Escravos channel which gave birth to the Delta pilots Union an organisation that was registered in 1958 which was later changed to Escraos ship pilots Nigeria Limited in 2009 currently working in collaboration with the Nigerian Ports Authority (NPA) and Delta is the only place you have private pilots in Nigeria, a trade that was inherited from our forefathers.

ost of have gone Mthe basic training,

some were trained at the Maritime Academy of Nigeria, (MAN) Oron Akwa-Ibom State after

which we moved on to the M a r i t i m e R e g i o n a l University in Accra, Ghana.

S o m e o f u s w e r e sponsored by the NPA and NPA have also concluded plans to sponsor some of our people to the United Kingdom for training before the end of the first quarter of this year.

What are the major constraints you do have?

The constraints we have right now is the Escravos channel, that channel needs to dredged .

he channel has not Tbeen dredged since

1997 and there is lot of siltation taking at the channel every now and then and this has affected the number of vessels that calls at the Delta ports.

Unfortunately, the bar determines the type of ships that comes in the ports.

We use this medium to appeal to the Federal Government, the state government and other stakeholders like Chevron, Shell who use this channel from time to time to help dredge the channel.

e have complained Wabout this to the

government but nothing has done about it.

Presently, the channel is 6 .4 meters , thereby limiting the size of vessels that can come to the ports.

If the channel can be dredged to 7 or ten meters then bigger ships can come into the ports and t h i s w i l l m a ke t h e government generate more revenue and this will g e n e r a t e m o r e employments for us.

Secondly, the issue buoys have also become a challenge as the channels are buoyed any more.

Before now, the channels were buoyed from the fairway buoy to the harbour.

There are long overdue to be changed but they have lost to the waves while other went under.

s I speak with you Awe do not have a single buoy, if we were not use to the channel, to bring in vessels would have been a problem.

At a time, local pilots were seen as saboteurs who held vessels to ransom, do we still have such problems here?

That problem is stopped, we are saboteurs, I want to correct that impression first and fore most, we want to improve the entire shipping business in the Delta ports we cannot go against the system.

What happened before now was that NPA at a point used the Navy to push us out of the system so that we will have access to ships and it is through these piloting services that we make a living.

H o w h a s y o u r invo lvement in the shipping business helped i n p r o t e c t i n g government’s interest in the Delta ports?

Since we entered into agreement with NPA, I am personally went to Lagos to sign the agreement on the 22nd of February 2010 and ever since then there has been a heal thy working relations with the NPA .

hat is the staff Wstrength of the company?

The staff strength of the company presently is 54at is the staff strength of the company?

Captain Solomon Perebo

If the channel can be dredged to 7 or

ten meters then bigger ships can

come into the ports and this will make

the government generate more

revenue and this will generate more employments for us

Topher ZangAd

42Freight

Members of the Escravos Pilots Limited at the visit of the House of Representative Committee's visit to Ekerenkoko in Gbaramatu Kindgom in Delta State last week

THE Nigerian M a r i t i m e Administration and Safety A g e n c y

(NIMASA) has concluded plans to set up a maritime University and a shipyard in Ekerenjojo in Gbaramatu kingdom ofcDelta state.

Disclosing this at an inspection ceremony in Ekerenkoko, in Gbaramatu k i n g d o m N I M A S A’ s Di rec to r- Genera l Mr. Patrick Akpobolokemi said that as soon as the National Assembly approves the p r o p o s a l w o r k w i l l commence immediately.

Akpobolokemi who before t h e c e r e m o n y t o o k members of his entourage which included members of t h e H o u s e o f Representative on Marine transport to pay homage to the king of the Gbaramatu kingdom said it was necessary to get the

NIMASA pushes for maritime university in Ekerenkoko

blessing and approval of the k i n g b e f o r e t h e commencement of the project.

lready, over 400 Ahectares of land has been allocated for the project and Akpobolokemi

is working around the clock to ensure the realisation of the project..

He also said that the purpose of the visit by his team is to see the size of the land and the community’s assurance amongst other things.

A k p o b o l o k e m i w h o addressed the king in pingin English said that it was very important that some of these issues are t a k e n o f b e f o r e t h e commencement of the project.

lso speaking at the Asite seeing visit , House Commit tee on M a r i n e t r a n s p o r t H o n o u r a b l e I f e a n y i Ugwuanyi said that with calibre of the king of Gbaramatu , wha tever federal presence that located in the community is a s s u m e d t o b e f u l l y protected.

A g w u a n y i w h o a l s o expressed concern over the issue of compensation was

further assured that no such thing will be demanded by the community.

Giving this assurance, C h a i r m a n o f t h e Ekerenkoko federated community Chief James Tangbolasi said “I want to assure that the people of Ekerenkoko federated C o m m u n i t y a n d Gbaramatu in kingdom in general will give you the desired assurance to make this dream a reality”.

Vanguard gathered that at the completion of the p r o j e c t , N i g e r i a n s , particularly youths from Gbaramatu will be trained and possibly deployed to service the oil and gas industry.

owever, Vanguard Hcould not ascertain where funds for the project will be gotten as the law only allows NIMASA to spend 5 percent of its earnings on Maritime Academy of Nigeria in Oron Ajwa-Ibom State.

At the completion of

the project, Nigerians, particularly youths from Gbaramatu

will be trained and possibly deployed to

service

H E N i g e r i a n Ports Authority ( N P A ) l a s t T

w e e k e n d o f f i c i a l l y flagged- off a project for the re-development of the port facilities at the ‘Bull Nose’ area of the Lagos Port Complex.

It is to be built and operated by Messrs Eko Support Services Limited.

Speaking at the flag- off ceremony last weekend, the Managing Director of t h e N i g e r i a n Po r t s Authority, Engr. Omar Suleiman said that the p r o j e c t w a s r e c e n t l y approved by the Federal Executive Council (FEC) for a whopping $124. 4Million.

According to Suleiman who was represented by the Acting Executive Director, Engineering and Technical Services, Engr. S u n n y N w o b i , t h e developer of the project; Eko Support Services Limited is to build and operate the terminal for a lease period of 20 years for oil and gas operations.

he project entails Tthe construction of; new 400m x 30m quay wall and deck on piles jetty in front of the existing facility, construction of finger jetties to support boat operations, dredging and reclamation, to carry out Environmental Impact Assessment (EIA), report demolition of the four finger jetties among others.

Speaking, Engr. Nwobi said that: “We give apprec ia t ion to the President, Dr. Goodluck Jonathan who with the FEC gave approval for all these important projects, it is a project that we ourselves will have done a long t ime ago , bu t because of the port reform challenges, by the time its completed, Lagos port will witness a new investment and it will introduce new dimension into the Lagos area”.

NPA flags off $124.4m port facility in Lagos

Godwin ORITSE

Emval Ad

44Freight

THE Secretariat of the Nigeria M a r i t i m e E x p o (NIMAREX)

2012 Planning Committee has released the names of more Speakers who have confirmed their availability to attend Africa’s biggest maritime event.

Executive Secretary of NIMAREX 2012, Bolaji Akinola, in a statement issued in Lagos stated that International Maritime O r g a n i s a t i o n ( I M O ) Secretary General, Mr. Koji Sekimizu; Chairman of LADOL, Mr. Ladi Jadesimi and Executive Secretary N i g e r i a n C o n t e n t Development & monitoring Board (NCDMB), Engr. Ernest Nwapa, have all confirmed their attendance at NIMAREX 2012 as Speakers.

O t h e r c o n f i r m e d Speakers, according to Akinola include Chief E xe c u t i v e O f f i c e r o f

More speakers announced for NIMAREX 2012 Godwin ORITSE N i g e r i a n S h i p p e r s ’

Council, Capt. Adamu Biu ; Managing Director of Nigerian Ports Authority ( N P A ) E n g r . O m a r Sulaiman; Director General of the Nigerian Maritime Administration & Safety Agency (NIMASA) Mr. Patrick Akpobolokemi and Mrs. Monica Mbanefo of the International Maritime

Organisation (IMO).H e s a i d N i g e r i a ’ s

President Goodluck Ebele Jonathan is the Chief Host of NIMAREX 2012 while the Host is the Honourable Minister of Transport, Senator Idris Umar.

he opening session of Tthe expo will be chaired by former Head of State, Retired General Yakubu Gowon.

NIMAREX 2012 has been scheduled to hold from 13th to 15th March 2012 at the Expo Centre, Eko Hotel & Suites, Victoria Island Lagos.

No fewer than 100 exhib i tors and 1 ,000

participants/visitors from within and outside Nigeria are expected to grace NIMAREX 2012.

A pre-event dinner to unvei l the theme of NIMAREX 2012 has been scheduled to hold in Ikoyi, Lagos on Thursday next week.

H E N i g e r i a n

M a r i t i m e

Administration and TSafety Agency (NIMASA) is

increase the funding of the

Mar i t ime Academy o f

Nigeria Oron Akwa-Ibom

State by just 1% (one

percent)

It was gathered that the

move to increase the funding

of the school by one percent

from its initial 5% of NIMASA

earning was necessitated by

growth of the institution.

Vanguard learnt that there

has been an increase in the

school’s population and this

development is beginning to

overstretch the facilities in

the academy.

Besides the Director-

General of the Nigerian

Maritime Administration and

Safety Agency (NIMASA)

Mr. Patrick Akpobolokemi

who is pushing for the

increase, some legislators it

was further gathered are also

in support of the increased

funding for the institution.

Sources close to the

National Assembly disclosed

that the increment when

f ina l ly approved , wi l l

included in the 2012 budget

of NIMASA.

he law setting up TNIMASA with regards

to the funding of the

Maritime Academy in Oron

stated that not less than 5%

percent of agency’s earning

must be given to the

institution an interpretation

that means that the funding

could be more than 5%

percent.

Effort to get confirmation

from the NIMASA’s Director

G e n e r a l M r P a t r i c k

Akpobolokemi was futile as

h i s phone l ines were

switched off.

NIMASA to increase maritime academy funding by one percent

Godwin ORITSE

NPA’s Acting Executive Director, Engineering And Technical Services, Engr. Sunny Nwobi (Second Left) And The General Manager Of Eko Support Services Limited, Mr Seni Edu ( R) At The Official Flag-Off Ceremony Of The Bull Nose Port Facility Of Eko Support In Apapa, Lagos Last Week.

Mr Patrick Akpobolokemi, Director – General of the Nigerian Maritime Administration and Safety Agency (NIMASA) and Chairman House Committee on Marine Transport Hon. Ifeanyi Ugwuanyi and deputy Chairman of the Committee during a visit to the site of the proposed Maritime University in Ekerenkoko in Delta state.

45Technology

Th e

importance, u s e s a n d o v e r a l l benef i t s o f

p e t r o l e u m o t h e r w i s e known as rock oil can not be overemphasized. From factories, machineries and transportation to electricity generation, crude oil has become a major source of energy that affects all sectors of any nation and its economy. But important as this natural resource may be, spillages of this product o n t h e e n v i r o n m e n t especially marine, which could be caused through care lessness , natura l disasters like weather conditions and earthquake, vandals, terrorists, etc., could be sometimes very disastrous, depending on the volume of the oil spill which could affect the fishing industry, resorts and recreation areas, water supplies for drinking and industry amongst others.

hat is an oil spill? WAccording to the encyclopedia of Earth, an oil spill is the accidental petroleum release into the environment. On land, oil spills are usually localized and thus their impact can be eliminated relatively easily. In contrast, marine oil spills may result in oil pollution over large areas a n d p r e s e n t s e r i o u s environmental hazards. The primary source of accidental oil input into seas is associated with oil transportation by tankers and pipelines (about 70%), whereas the contribution of of fshore dri l l ing and production activities is minimal (less than 1%). Wi k i p e d i a , t h e f r e e encyclopedia, an oil spillis defined as the release of a l i q u i d p e t r o l e u m hydrocarbon into the environment, especially marine areas, due to human activity, and is a form of pollution.

Response Techniquesoing by history and Gs t u d y o f o i l

spillages, no two oil spills

Effective oil spill response techniques and prevention

Jim-Rex Lawson MOSES

have been found to be the same because of the variation in oil types, locations, and weather conditions involved. But, broadly speaking, there are four main methods of response.

Leave the oil alone so that it breaks down by natural means. If there is no possibil i ty of the oil polluting coastal regions or marine industries, the best method is to leave it to disperse by natural means. A combination of wind, sun, current, and wave action will rapidly disperse and evaporate most oils. Light oils will disperse more quickly than heavy oils.

Besides the method described above, other

Picture showing a containment technique with a workboat

Picture showing In-situ burningCONTINUES ON PAGE 46

46Technology

three possible clean-up techniques which must be adopted by response teams… depending on the volume of the spill should include; Dispersant of chemicals, Bioremediation and In-situ burning.

Dispersant Chemicals:hey are chemicals Twhich enhance the

natural dispersion of oil. It is the most common method employed for oil slicks, e s p e c i a l l y w h e n mechanical recovery seems i m p o s s i b l e . T h e s e dispersant chemicals are

Effective oil spill response techniques and preventionused to reduce the extent of damage that could be caused by the floating oil. However, there are some l imi ta t i ons on these chemicals as they can cause damage themselves if they are not controlled.

These chemicals work by increasing the rate of natural dispersion. When the dispersant is sprayed onto the oil slick the oil forms droplets of variable size (thereby dispersing them), the larger droplets float and the smaller d r o p l e t s r e m a i n i n suspension. Dispersants

h a v e t w o m a i n components, a solvent and a surfactant.

o w t h e y a r e appliedH : workboats

can be used for small spills in confined areas of water, but for the larger, off-shore oil slicks large aeroplanes are used and for small oil slicks near the shore small aeroplanes and helicopters are used. A spray of “rain drop” sized droplets is used in order not to lose too much in wind drift.

Limitations: chemical

dispersants have little effect on oil with a high viscosity as the chemicals run off the oil before the solvent can work. Oils that the dispersants have an initial effect on become resistant after a while because the viscosity increases as the more volatile oils evaporate.

In-situ burning:he name in-situ Tburning is the name

given to the burning of spilled oil while it is still at sea. Technically this seems like a good method which

will remove most of the oil, but in reality, there are a number o f p rob lems assoc ia ted wi th th is technique which include: production of a lot of smoke , fo r mat ion o f residues, ignition of oil, and safety concerns.

Smoke: when oil burns, large clouds of thick black smoke are produced which react with the normal clouds and causes oily rain which contaminates farm crops and animals.

Residue: the residues formed by in-situ burning

Picture above showing Weather Modification and Biochemical Decontamination technique, Courtesy of Google images

Continued from page 45

CONTINUES ON PAGE 48

Alduco Ad

48Technology

are heavily viscous and are very hard to remove from the sea and the shorelines. Residues of this nature affect fishing gear, boats and the shoreline. Some of the residues also sink and can poison the sealife and is almost impossible to recover.

gnition: the time it Itakes for the ignition and fire safety devices to be set up many of the lighter fractions of the oil will have already evaporated making ignition more difficult. Ignition can be done by different methods, from simple petrol or diesel s o a k e d c l o t h s t o sophisticated devices like a

flamethrower attached to a h e l i c o p t e r o t h e r w i s e known as a helitorch.

Bioremediation:Biodegradation is the

name for the two processes used in promoting the natural biodegradation process oil spilled oil. The t w o p r o c e s s e s a r e b i o a u g m e n t a t i o n (application of microbes to d e g r a d e o i l ) a n d biostimulation (addition of nutrients).

ioaugmentation: this Bprocess is used in many waters (both sea and fresh) to degrade waste such as oil as well as raw sewage and industrial discharges. Microbes are added to the water to feed

on these wastes. The species of microbes added will not compete with the naturally occuring species so that degradation is as efficient as possible.

Biostimulation: for the microbes to work efficiently there has to be enough phosphorus, nitrogen and carbon available. In the case of an oil spill, the carbon level escalates and t h e n i t r o g e n a n d phosphorus levels are too low to allow the microbes to work at optimal efficiency. Fertilisers containing these two elements are added to enable microbes degrade the oil.

Limitations: despite how attractive these processes

seem, they cannot be taken a t f a c e v a l u e . I f bioremediation is used on oil floating on the surface, the materials added will quickly dilute and be lost. Oxygen is also required, which is not present in the oil itself, only at the w a t e r / o i l i n t e r f a c e . Bioremediation is therefore not suitable for the removal of large volumes of oil. The processes of bioremediation and b ioaugmenta t ion currently available are too slow to prevent the majority of the oil from reaching the shoreline. They can be physically and biologically harmful in some habitats such as salt marshes.

Preventionince cleanup after an So i l s p i l l i s s o

Picture of a blimp and helicopter, being used in tandem to contain an oil spill. Courtesy of Google images

Effective oil spill response techniques and preventionineffective and so difficult, and does not always fully rehabilitate affected areas, p r e v e n t i o n i s m o s t i m p o r t a n t . E f f e c t i v e prevention plans should include:

* Improved p i lo t ing ; training of ship and tanker crews

*Training of storage and pipeline facility crews

*Enforcing pollution rules at sea

*Building more spill-resistant vessels

*Maintaining vessels and pipelines

P r e p a r i n g f o r s p i l l response through effective t r a i n i n g , p l a n n i n g (contingency planning), and practice drills.

Oil Spill Containment:

Continued from page 46

Samuel OYADONGHA

49

WA R R I – IJAW oil communit i e s i n Delta and

Bayelsa states, Monday morning, stormed the Shell Nigeria Exploration and P r o d u c t i o n C o m p a n y, SNEPC, office, at Edjeba, near Warri, Delta State, p r o t e s t i n g a l l e g e d “insensitivity and neglect” by the oil firm following the December 21, 2011, Bonga oil spill.

The protesters, including men, women and youths, carried placards, bearing inscriptions such as, “Save Our Souls, send us relief m a t e r i a l s ” , “ S t o p discrimination/ intimidation on us”, “No small and or big communities treat all equal”, “Imminent violence by Oil spil l , victims SPDC is adamant to their obligatory

enagoa - The Joint Task Force in the Niger Delta Y

codenamed Operation Pulo Shield has arrested seven suspected crude oil thieves in Bayelsa State.

The suspects were nabbed by men of the Joint Task Force on routine patrol of the creeks of Souther n I jaw loca l government area of the state.

Spokesman of the Joint Task Force , L t . Co l Timothy Antigha, who disclosed this in Yenagoa, said the suspects were arrested at Onyeregbene, L a s u g b e n e a n d Igbomaturu communities.

His words, “in line with its mandate to eradicate the menace of crude oil theft, illegal refining of petroleum products and illegal oil bunkering, the J o i n t Ta s k F o r c e , Operation Pulo Shield have arrested 7 suspected p ipe l ine vanda l s in Onyeregbene, Lasugbene a n d I g b o m a t u r u communities, in Southern Ijaw Local Government of Bayelsa.

“The arrests were effected during a routine patrol on 28 January 2012.”

e gave the names Hof the suspects as E m m a n u e l P r o p h e t , Patrick Enoch, Douglas Dickson, Goodluck Ala, F o e t u s J o b , P l a i n Mazellen and Suwoton Aladege..

Items recovered from the suspects, he said, include a generator set, pumping machine, 8hp Outboard eng ine , a pumping valve, a speed boat, and N42, 010,00 among other personal effect.

He added, “the items the suspects were found with are the usual used in vandalising pipelines b e f o r e c r u d e o i l i s siphoned.

Ijaw oil communities in Delta, Bayelsa, besiege to Shell

Emma AMAIZE and Akpokona OMAFUAIRE

duties”, “SPDC Bonga (EA) Spill has damaged our Rivers”, “SPDC ignore Bonga Oil Spill victims now dying in silence”.

o r p o r a t e M e d i a CRelations Manager of SNEPC, Mr. Tony Okonedo, who spoke to Vanguard on phone, said he was aware of

t h e p r o t e s t b y s o m e communities, demanding for relief materials over alleged oil spill.

He said the protesters had already dispersed and since the company was no t disinclined to dialogue, it was already discussing with them on their grievances.

On the Bonga oil spill, Okonedo, said the company was waiting for the result of the scientific investigation into the oil leak, which could be out in the next few days, be fore making fur ther comments on the claim by s o m e N i g e r - D e l t a communities.

ecretary General of one So f t h e p r o t e s t i n g communities, Kuku-gbene in Warri South West Local Government Area of Delta State, Mr. Prus Puopu told newsmen, “Since the oil spillage happened, it affected our community a lot and Shell has not compensated or sent

us relief materials. They should pay attention to our communities. We want them to call us for negotiation; they have been calling other c o m m u n i t i e s f o r negotiations, so we want them to call us also.”

H i s E b i b o g b e n e c o u n t e r p a r t , M r . Etimadimene James said, “The oil spillage ravaged our community. Now, we can’t fish in the river, our water has been polluted, the incident has hampered our economics activities of fishing and farming”.

“Oil is still flowing to other communities in the riverine area, so SPDC should look for a way to stop the flow”, he added.

h a i r m a n o f CI d e i k e g b e n e community, John Warenu, asserted that the protesters would occupy the company’s gate until it agreed to negotiate with them.

The protesters, including

men, women and youths,

carried placards, bearing

inscriptions such as,

“Save Our Souls, send us

relief materials

JTF arrests 7 suspects, confiscates oil bunkering equipment

Ijaw Community

50

Ye n a g o a -

U N L E S S urgent steps are taken to sa lvage the

Goodluck Jonathan Bridge across the Ikoli River, a tributary of Nun River, the ailing structure may collapse in no distant time.

The condition of the bridge which is an important link in the government effort to connect Ayama, Oporoma, Ukubie communities in the deep swamp of Bayelsa central senatorial district, one of the three senatorial link route to mainland Yenagoa.

The structure is not only of strategic importance to the far flung communities in Southern Ijaw council area

Samuel OYADONGHA

Ikoli River bridge may collapsebut also to residents of the satellite communities in the capital city like Ogu, Akaba, Famgbe and Ogbogoro who use the bridge daily to access the capital city for work, market, school and other social engagements.

he condition of the Tstructure, the single

l o n g e s t b r i d g e t o b e constructed across any river in Yenagoa, which was commissioned four years ago for public use has further deteriorated with the head pillars showing signs of crack fueling fear among residents of its imminent collapse.

Ironically the structure was not 100 per cent completed by the contractor, Julius Berger before it pulled out of the Niger Delta in the wake

of the security challenges p o s e d b y t h e y o u t h militancy which claimed the life of one of its personnel when a kidnap attempt by armed gunmen went awry.

B u t t h e B a y e l s a government went ahead to commission the bridge for public use about four years ago after hurriedly using an indigenous contractor to complete the work.

ince the company Spulled out of the Niger Delta region, no effort conscious efforts had been made to re-award contract for the completion of the bridge to a competent construction firm.

Consequently, the sand dump used for the bridge head is gradually being

washed away making the structure susceptible to collapse due to the inability of the construction firm to reinforce the sides with mixed concrete in line with standard practice before its withdrawal from the region.

Though the troubled por t i on had been rehabilitated in the past by some concerned residents and some two years ago by FERMA the condition of the b r i d g e h a s f u r t h e r deteriorated when Sweet Crude visited the structure last weekend.

owever the state of Hthe bridge is now a source of grave concern to residents especially with heavy rainfall already being e x p e r i e n c e d i n t h e

predominantly riverine state.

Sweetcrude observed that a greater portion of the Yenagoa end of the bridge is now on the verge of caving thereby making it a difficult venture for two vehicles to negotiate the narrow passage.

To further compound t h e w o e s o f t h e collapsing structure, traders at the Swali market have turned the craters on the side of the bridge to dump site a development that is bound to accelerate the erosion menace.

L a m e n t i n g t h e deteriorating state of the bridge, a resident of Okaba communi ty, Thompson Ebiotu said, “it is painful to see this imposing edifice in this terrible condition. What started as minor erosion around the bridge head is now threatening to cut off communities across the river from the state capital.”

e pleaded with Ht h e s t a t e government not to allow the worst to happen before tackling the erosion menace now threatening the bridge.

Another concerned residents lamented, “the situation is getting out of hand. We had hoped that the state gover nment would make good its word to commence work on the bridge this dry season, but nothing has been done. Our only prayer is that this bridge should not collapse one day. We are all endangered, but what can we do?”

Collapsing bridge

52

Yenagoa - The p e o p l e o f N e m b e Kingdom in the Bayelsa East

senatorial district have threatened to disrupt the Anglo-Dutch oil giant, S h e l l P e t r o l e u m Development Company (SPDC) operations over what they described as the refusal of the company to provide their community electricity.

The Nembe Kingdom through its Oil and Gas Committee chairman, Chief Nengi James-Eriworio yesterday called on the oil giant to fast track the ongoing power project in the area with a view to connecting the coastal island to the Nembe Creek turbine on or before March, 2012 or risk the shutting down of its operations in the area.

Bayelsa community threatens Shell operation

Samuel OYADONGHA

Demonstrators

amenting the plight of Lhis people he said, “ It is appalling that the Nembe Kingdom which contributes over 90,000 barrels of crude oil per day to the Nigerian s t a t e a n d b o a s t s o f hundreds of oil wells and four flow stations operated

b y S h e l l P e t r o l e u m Development Company (SPDC) has continued to live in perpetual darkness.“The people of Nembe kingdom will no longer continue to die in silence and be patient over the deliberate denial of power supply by SPDC to its host community particularly the Nembe City in spite of the f a c t t h a t t h e o i l multinational has carried out oil exploration for decades with little or no significant contribution to the lives and well being of our people.

It is instructive to note t h a t t h e p o w e r “g e n e r a t i n g p l a n t

powering the community has not only broken down but can no longer be maintained because of the increase in the electricity consumpt ion demand occasioned by the ever growing population of the community.”

He warned that if nothing was done to power the Nembe Kingdom, “ we would be compelled to mobi l ize our women, children and men on a peaceful protest to occupy all SPDC operational areas in the kingdom and force SPDC to suspend its oil exp lora t ion ac t iv i t i es forthwith.”

e s c r i b i n g a s Dunacceptab le the current casual employment offered their youths the community called for the employment of their people into top management p o s i t i o n s a s w e l l a s providing them on-the-job training opportunities.“As a peace loving people, we implore SPDC not to strain the harmonious relat ionship cur rent ly enjoyed by the company by taking our demands for granted,” the community warned he As a multinational company, we expect SPDC to live up to its Corporate Social Responsibility to its host community in line with global best practices.

The people of Nembe

kingdom will no longer

continue to die in silence and be patient over the deliberate

denial of power supply by SPDC to its

host community

he Joint Task Force in

Nigeria’s Niger Delta

c o d e n a m e d T‘Operation Pulo Shield’ has

arrested seven suspected

crude oil thieves in Bayelsa

State.

The suspects were nabbed by

men of the Joint Task Force

on routine patrol of the

creeks of Southern Ijaw local

government area of the state.

Spokesman of the Joint Task

Force, Lt. Col Timothy

Antigha, who disclosed this

in Yenagoa, said the suspects

w e r e a r r e s t e d a t

Onyeregbene, Lasugbene

a n d I g b o m a t u r u

communities.

is words: “In line with Hi t s m a n d a t e t o

eradicate the menace of

crude oil theft, illegal

re f in ing o f pe t ro leum

products and illegal oil

bunkering, the Joint Task

Force, Operation Pulo Shield

have arrested 7 suspected

p i p e l i n e v a n d a l s i n

Onyeregbene, Lasugbene

a n d I g b o m a t u r u

communities, in Southern

Ijaw Local Government of

Bayelsa.

“The arrests were effected

during a routine patrol on 28

January 2012.”

He gave the names of the

suspects as Emmanuel

Prophet, Patrick Enoch,

Douglas Dickson, Goodluck

Ala, Foetus Job, Plain

Mazellen and Suwoton

Aladege..

Items recovered from the

suspects, he said, include a

generator set, pumping

machine, 8hp Outboard

engine, a pumping valve, a

speed boat, and N42,010,00,

among others.

He added, “the items the

suspects were found with are

the usual used in vandalising

pipelines before crude oil is s

Iphoned.

In the light of the

negative effect of “pipeline vandalism on

t h e e c o n o m y a n d

envi ronment , the JTF

implores the general public

to continue to cooperate with

the agency by promptly

r e p o r t i n g s u s p i c i o u s

elements.

JTF arrests 7 crude oil thieves, confiscates equipment in Bayelsa

Samuel OYADONGHA

53

Yenagoa - While unrest in the Niger Delta has s h a r p l y declined since a

2009 amnesty deal, crude oil theft and illegal refining of petroleum products has increased in the region in spite of the clamp down on the illicit trade by the country’s security forces, the Joint Task Force codenamed Operation Pulo Shield.

Interestingly, Pulo an Ijaw word meaning oil. The implication is that the JTF is now all out to stamp out this business which is causing more harm to the region’s already fragile ecosystem.

Only last week, the Joint

NIGER DELTA: Unrest declines, oil theft, illegal refining climbsSamuel OYADONGHA

Illegal refinery

Task Force nabbed another

batch of suspected crude oil

thieves in Bayelsa State and

items recovered from them

include a generator set,

pumping machine , 8hp

outboard engine, a pumping

valve, a speed boat, and N42,

010,00 among other personal

effect.

he suspects were nabbed Tby men of the Joint Task

Force on routine patrol of the

creeks of Southern Ijaw local

government area of the state.

Influential Nigerians and

even the military itself have

been accused of involvement

in the lucrative illegal oil

business, which include a

relatively sophisticated level of

theft and refining. But the

m i l i t a r y h a s d e n i e d

involvement in the practice.

Oil firms blame theft and

sabotage for the majority of oil

spills in Nigeria, a claim

s t r o n g l y d i s p u t e d b y

environmental activists.

Nigeria is one of the world’s

largest oil producers, but its

Niger Delta region remains

badly polluted and deeply

impoverished.

t was reliably learnt that Ilast one year alone, the

country ’s security forces

destroyed no fewer than 6000

illegal refineries scattered

across the mangrove swamp of

the delta.

Sadly, only about 30 per cent

of the refined oil is recuperated

according to report while the

remaining 70 per cent is

d i s c a r d e d i n t o t h e

environment.

A security source said, the

country is losing about losing

about $15.8billion annually to

oil thieves operating in the

mangrove creeks of the Niger

Delta who are not only

bleeding the economy but also

compounding the woes of the

already fragile environment.

ccording to the source, Athe fact that electricity

supply from the national grid to

the communities is not reliable

has made petrol powered

generators the main form of

power supply across the Niger

Delta making illegal refining a

thriving business in the region

for the unemployed youths who

are not aware of the long term

effect on the environment and

the health of their people.

ORT HARCOURT:

H O U S E o f

R e p r e s e n t a t i v e PCommittee on Customs and

Exc i se has ca l led fo r

measures to be put in place to

ensure optimum utilisation of

Ports in the eastern zone.

Deputy Chairman of the

Committee, Hon Kingsley

Chindah who led members of

the committee on a visitation

to Rivers state expressed

wor r ies wi th what he

observed as underutilisation

and performance of ports in

the zone.

The committee further

lashed at one of the service

providers at the Onne Port,

for poor service delivery,

noting that it was really

disturbing that almost five

years after it signed a

contract to provide fixed

s c a n n e r f o r A r e a 1

Operations of the Customs in

Port Harcourt it was yet to

deliver.

ontinuing, the House CCommittee said the firm

also defaulted in the contract

when it provided a mobile

scanner at Onne Oil and Gas

free zone as against the fixed

scanner contained in the

contract papers. The scanner

according to those on ground

that briefed the law makers

was not reliable as it was

breaking down very often

thus a f fec t ing smooth

operations in the area.

The House Committee

deputy Chairman, Hon

Chinda later directed men of

the Customs to come up with

detail information on losses

suffered so far as a result of

the epileptic state of the

scanner and other details.

“The issue of scanning

machines, unfortunately

SGS is not here, but let’s have

an idea of how much we have

been losing due to the

inadequacy of the scanning

machine we have now or its

incessant break down. You

said that has affected your

revenue profile, we will want

to have a clear picture of how

much we have been losing as

a r e s u l t o f t h a t

challenge”,Chinda told men

of the Customs.

House committee laments under utilization of ports in eastern zone

Jimitota ONOYUME

54

Ye n a g o a -

C o m m u n i t y l e a d e r s i n Bayelsa State u n d e r t h e

a u s p i c e s o f t h e NNPC/Chevron’s Global M e m o r a n d u m o f Understanding (GMoU) have lauded the efforts of the company in providing relief materials tagged “thank you” gift items to the people in a p p r e c i a t i o n o f t h e i r ass i s tance dur ing the unfortunate gas rig fire incident that occurred in an offshore location. Trucks load of rice, garri, beans and tubers of yam, were yesterday being loaded in mammy b o a t s f o r o n w a r d t r a n s p o r a t i o n t o t h e communities on the Atlantic fr inge at the Yenagoa Government jetty.

Others include cows, several jerry-cans (25 litres) of groundnut oil, palm oil, frozen fish/chicken, cartons of beverages, cartons of tin tomatoes, bags of salt, and sugar worth several millions o f n a i r a h a v e b e e n dispatched to communities.

he Chairmen of “Keffes Ta n d D o d o R i v e r Regional Development Committees under the GMOU, Messrs Christopher Tuodor and Berry Negresse made the commendation in Ye n a g o a d u r i n g t h e inspection and receipt of food

Chevron sends relief materials to Bayelsa communities Samuel OYADONGHA

Relief packages

i tems provided by the company for the communities.According to them, the

g e s t u r e b y t h e NNPC/Chevron Joint Venture w a s i n d i c a t i v e o f t h e c o m p a n y ’ s s o c i a l responsibility and sensitivity to the needs of the people.The provision of the relief

materials they said would go a long way to further strengthen the cordial relationship the c o m p a n y a n d t h e communities.“O v e r t h e y e a r s , o u r

c o m m u n i t i e s a n d NNPC/Chevron have had m u t u a l l y - b e n e f i c i a l

relationship. It is unfortunate that a fire incident occurred on the offshore rig undertaking gas drilling operations for the company.

u r p e o p l e w e r e Onaturally agitated due to fear of potential threat to human and aquatic lives,” they said.S t r e s s i n g t h a t t h e

communities’ occupation was predominantly fishing, they noted that the concern for potential loss of means of l i v e l i h o o d w a s a l s o paramount.“We are mostly fishermen

and women but we know that what happened was an accident, and because we are g o o d n e i g h b o u r s w i t h NNPC/Chevron, our people volunteered to assist in the rescue and evacuation of the workers on the rig as at the time of the incident,” they stated.

he RDC Chairmen Tt h a n k e d t h e NNPC/Chevron Joint Venture for showing appreciation of the people’s efforts in assisting the company when it needed support and said they would continue to assist in monitoring the situations until the fire is finally off.Meanwhile the government

jetty in Yenagoa has been a beehive of activities for some days now as youths are engaged with loading of the food items into the mammy boats for transportation to the riverine communities.W h i l e s o m e o f t h e

communities have already received their own items as at press time, the ferrying of the food items to some others is ongoing.As at press time, a contingent

of Chevron officials are visiting the communities to carry the thank you message to the people, witness the distribution of the food items and undertake medical and environmental assessment of the area.

n a related development, It h e B a y e l s a S t a t e government has confirmed its commitment to continue to play mediatory role between the oil companies and the host communities.The Commissioner for

Environment, Chief Robert Enogha regretted the high level of inconsistency in the report of the communities over environmental issues citing the gas rig fire as an example.He hinted that the State

Ministry of Environment has developed a website that deals with environment issues, noting that the state government through the Ministry organized the first stakeholders’ summit on environment late last year and the oil companies also attended.

The provision of the relief

materials they said would go a long way to

further strengthen the

cordial relationship the company

and the communities

Jimitota ONOYUME

55 TheQuestion

johniyene@yahoo.com

PO R T

H A R C O U R T: NIGER Del ta D e v e l o p m e n t C o m m i s s i o n ,

NDDC has stepped up manpower for the oil and gas sector with the graduation of forty of its trainees in far away Turkey as International Welding Inspectors. The programme was handled by its t e c h n i c a l p a r t n e r, t h e Nigerian Institute of Welding, NIW. C o m m e n t i n g o n t h e

development, President of the NIW, Mr Solomon Edebiri said it would raise local participation in the oil and gas industry. According to him, as i n t e r n a t i o n a l w e l d i n g inspectors they had been trained in construction, testing, formation and design. Adding that they would continue to be relevant to the economy on matters relating to exploration.

“As long as we continue the process of extraction of oil and hydrocarbon in the ground we w i l l c on t i nue t o ne e d i n t e r n a t i o n a l w e l d i n g inspectors. Because the hydrocarbons would be transported through conduit lines and this is constructed with steel. So they have to be on ground to ensure the jobs

NDDC steps up manpower training

are done to specification”. He said the training process

lasted about six months from selection stage to graduation, noting that participants were all drawn from the nine member states of the region. “NDDC said they needed

people across the nine states and it must be balanced in order with their oil producing quota, but to a certain level. Another thing we did was to ensure there was selection process which included aptitude test. And all who came top were selected but in all they came from the nine states of the region”. , he said.

Training session

NDDC said they needed

people across the nine states and it must be

balanced in order with their oil producing

quota, but to a certain level

pon making a decision to enter a commentary on this discourse I made a decision

not to cheapen it by labelling the gentleman, Sanusi Lamido Sanusi as a sponsor,

member or sympathiser of Boko Haram or by connecting him with a Northern Uagenda that may exist only in the imaginations of newspaper columnists!

A simple definition of the Islamic principle of Zakat is the payment by the rich, privileged,

able and free muslims of parts of their earnings to support specific categories of people.

Lamido Sanusi, the CBN governor who drew graphic contrasts between the perceived

imbalance in the distribution of federal resources with the upsurge of violence in the North,

per Boko Haram is an Islamic scholar who does not only believe in but has given lectures on

the subject of zakat. At a Kaduna conference in 2000, Malam Sanusi delivered a lecture on

Islamic economics titled “Institutional Framework of Zakat: Dimensions and Implications.”

Again at a 2001 seminar in Abuja he spoke on “Basic Needs and Redistributive Justice in Islam

– The Panacea to Poverty in Nigeria.” Although the title of the 2001 paper was wider (poverty

in Nigeria) the real discussion was unpretentiously narrowed to the Islamic North; in both

discussions he espoused the mainstream position that Zakat is an instrument for

redistributing income. Again in both papers he made a notable argument that government

instead of the emirs of the North should play the role of redistributing Zakat.

Sanusi Lamido is not the kind of man you don’t take seriously or whose utterances you spin

jokes around. Apart from being the governor of the CBN, the man is heir presumptive to the

Kano Emirate and an Islamic scholar of repute who obtained a degree in Sharia from the

African International University, Khartoum, Sudan in 1997, sixteen years after graduating

from the Ahmadu Bello University with a degree in Economics. From his antecedents,

especially on the subject of Zakat (his view that government should assume the role of

distributor) and his recent utterances on the distribution of resources, it would not be wrong to

suggest that Malam Sanusi would have the federal government dump the principle of

derivation and distribute the country’s resources Zakat style, whereby resources derived from

the Niger Delta are distributed to the poor states of the North to breach the sharp inequities

between states. While the operatives of Boko Haram are demanding the implementation of

Sharia in the whole of Nigeria, that a Christian should never rule Nigeria again and a motley

of other inanities, Malam Sanusi, the governor of our central bank, is postulating that the

emergence of Boko Haram is traceable to the structural imbalance of the country’s economic

structures.

hose instructions at Ahmadu Bello does the malam rely on to posit that the federal Wgovernment in a federal state is a distributor of economic resources? Is the learned

malam falling into the mistake of the unenlightened who presume that the role of the federal

government is to grab the economic assets of the component states for redistribution? Does the

Malam not know that the whole essence of adopting federalism is the recognition of the

absence of homogeneity, the acceptance that component units have different aspirations,

priorities and developmental agenda? In agitating for their own states from old structures,

applicants for states creation enumerate the many differences between them and units of the

older states. Is it the malam’s idea of economic justice that Christian states in the Niger Delta

should pay Zakat or cede their resources to develop muslim states in the North created in

response to senseless agitation and the need for competitive multiplication for the coveted

federal jobs and slots, instead of on the basis of self-sufficiency and viability? Can the CBN

governor tell Nigerians how many times in the year the Accountants General of the 50 states of

the United States, or the 28 states of India or the 26 states of Brazil, converge on Washington

DC, New Delhi and Brasilia to share the resources of rich states for poor states? The oil

companies in the state of Alaska which was bought from the Russians by the American

government with federal money pay only tax to the American government. All royalties are

retained by the state and not a cent of Alaskan oil money gets redistributed to poor states such

as Mississippi to assuage some blackmail that the poverty in that state is engendering crime

that could impact Alaska. Should we in the Niger Delta, a people of sound Christian

convictions, continue to tolerate the deployment of our resources for the actualisation of

agenda that run counter to our beliefs? Should we continue to play along while states are

created for participation in the wealth of the Niger Delta? Should states of the Niger Delta

underwrite the bills of other states that are not viable enough to provision their bureaucracies

and populations?

here is the economic sense in that, Mr. CBN Governor? The federal government in a Wfederal state is a legation, a body of representatives who administer those interests

that the component units share commonly, like currency, diplomacy, armed forces, etc, all

enumerated in the exclusive legislative list and the component states source their own

revenue. Federal funds are supposed to be deployed in states for emergencies, relief for

disasters, federal infrastructure and federal administrative units within the component states,

not doled out on consistent monthly basis to unviable states on the basis of demographic

statistics.

The moral behind the involvement of Malam Sanusi in the Boko Haram apology train is the

inescapable conclusion that sympathy for the agenda of Boko Haram lies deeper than most

Nigerians think and that more than a few intellectuals in the North align with their

aspirations, if not with their tactics. The honourable concept of Zakat as we know it is practiced

between Muslims. To expect Christian populations to endure privations for the benefit of folk

whose final ambition is to undermine their religious convictions and supplant them with

Islam, is to ask too much.

THE LAMIDO SANUSI INTERVIEW: Exaggerating the concept of Zakat

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