orient energy review

Vol. 5 No. 04 April, 2016Covering Local Content * Oil & Gas N500 7.0Ghc US $3.00 2.5

‘Local Content is Africa’s Plan to Fight Unstable Oil Price’ – APPA Boss

Ghana’s Deregulation

Agenda: Hit or Miss?

APPA Summit: Buhari Charges Member Countries on Sustainable

Policies in Local Content

Solving Ghana’s Energy Challenges - Is LNG The Solution?

‘NNPC Opens Bids For Co-Location Of Refineries’ – Garba-Deen Muhammad

PUBLISHER/EDITOR-IN-CHIEF: Nneka Ezeemo

EDITOR: Margaret Nongo-OkojokwuPRODUCTION: Pita Ochai

CORRESPONDENTS:Shola Akingboye (Abuja Bureau Chief) Vivian Osuji Isreal(Head, South-South Bureau, Port Harcourt)Pita Ochai (Lagos)Gilbert Boyefio (Ghana Correspondent)

Business Development Executive:Uche EzeaRuth Muo (South Africa)

CREATIVE: EtimSkill

CIRCULATION MANAGER: Ajayi Kayode

LONDON OFFICE:Charity Place, Unit 1 Thurrock Park WayThurrock Park Ind. EstateTilbury, Essex Rm 18 7Hz.+447974199137

GHANA OFFICE:[email protected]@gmail.com

ORIENT ENERGY REVIEW has emerged to be theplatform and voice for the growing local content policy across the world. It is a monthly publication of Orient Magazine, Newspaper and Communications Limited5, Dipo Dina Drive, Abule Oshun, Badagry Express Way - Lagos. www.orientenergyreview.comemail: [email protected]

The deregulation of Ghana’s petroleum downstream sector, which has been widely accepted by players of the industry, was as a result of the difficulties faced by government when it

failed to respond appropriately to market forces when necessary. Deregulation was therefore introduced to free government of

budgetary resources allowing it to cut down on borrowing and to in-crease allocations to vital social services. It will also allow the private sector to assume the role of a service provider within a well and very competitive environment.

The deregulation therefore triggered a rise in the price of pe-troleum products across the country, starting with a four percent increase on June 16 and a further 15 percent leap on the 2nd of July 2015.

Today, Deregulation agenda still seats as a burning issue in the Ghanaian Petroleum sector as Ghanaians are yet to reap of its bene-fits. Gilbert Boyefio, the head of our Ghana Bureau takes us through the Deregulation journey so far in Ghana.

In this edition also we bring you reports from the recently held 6th African Petroleum Congress, CAPE VI, which held in Abuja, March 14th -17th, 2016.

There are lots of other exciting articles in this edition, do seat back and have a great read.

We’d love to hear from you as always, please send your feed back to the [email protected]

Cheers!

Margaret Nongo-OkojokwuEditor, Mobile +234-8136329948

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INDUSTRY NEWS

LOCAL CONTENT

COVER

POWER

PHOTO GALLERY

TALKING POINT

INTERVIEW

FROM THE NIGER-DELTA

GHANA REPORT

EXPLORATION / DRILLING

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EDITOR’S NOTE

Orient Energy Review April, 2016 3

34

The Nigerian National Petroleum Corporation {NNPC} says it is

committed to boosting the nation’s refining capacity which in turn would put an end to perennial fuel scarcity in the country.

NNPC Chief Operating Officer {COO} Refineries Mr. Anibo Kragha made the remark at the opening of the technical bid for the location of new refineries within the existing refineries in the country today in Abuja.

He said the open bidding exercise was a demonstration of the determi-nation of the federal government and the NNPC to increase the nation’s

INDUSTRY NEWS


refining capacity from 445,000 barrels per day to 650,000.

“The aim is to leverage on the existing facilities to fast track the take-off of the refineries as soon as possible,’’ the COO noted.

According to him, a technical evaluation committee has been set up to study the bids and announce winners as soon as possible.

Speaking earlier, the corporation’s Gen-eral Manager, Supply Chain Management, Sophia Mbakwe enjoined all the companies to accept the outcome as the exercise would be transparent.

She stressed that all the rules of public procurement as spelt out in the Bureau for

Public Procurement Act would be strictly adhered to.

The exercise was witnessed by representatives of the Nigerian Extractive Industry Transparency Initiative {NEITI} and the Bureau for Public Procurement (BPP}.

A total of nine companies submit-ted bids.

‘NNPC Opens Bids For Co-Location Of Refineries’ – GarbaDeen Muhammad

The Nigerian Government has on Saturday (April 2nd) recom-

menced the payment of subsidy on petrol as it subsidised the com-modity by N5.84 for every litre of premium motor spirit consumed in Nigeria, The Punch reports.

Subsidy on petrol was stopped in January after the review of the pricing template of the product by the government. Figures from the latest pricing templates of the Petroleum Products Pricing Regulatory Agency released on Saturday showed that the Federal Government was paying N5.84 as subsidy on every litre of petrol sold at non-NNPC filling stations.

According to the PPPRA, the Expected Open Market Price of petrol for non-NNPC stations as at April 2, 2016, was N92.34 per litre, against an official pump price of N86.5 per litre, leaving an under-recovery or subsidy of N5.84 per litre. Similarly, the template for NNPC-run stations showed that the government was paying N5.80 per litre as subsidy, as the EOMP for outlets in this category was N91.80 per litre as against an official rate of N86 per litre.

San Leon Energy and a Nigerian firm, Midwestern Oil and Gas are at the

final stages of their agreement over the ac-quisition and financing of Mark Resources. Under the terms of agreement, San Leon would assist Midwestern Oil & Gas to finance the C$89.2mln takeover of Mart Resources.

As a result of the transaction, San Leon will be own just less than 10% of the Nige-rian oil field that currently produces more than 30,000 barrels per day.

The Toronto based oil firm told inves-tors that funds for the deal have now been received by the lawyer for the acquisition vehicle – 1038821 B.C. Ltd. (Acquireco), though Mart said it expects the funds will be paid into the depositary before the deadline for the deal March 24, 2016. The company agreed last month to support a takeover of Toronto Mart Resources by the Nigerian oil firm, Midwestern Oil and Gas.

MidWestern also agreed in January to acquire all of the issued share capital of Mart by way of a plan of arrangement. Mart shareholders are set to receive 25 Canadian cents per share, valuing Mart at C$89.2mln.

Under the terms of the deal, San Leon will initially receive a 4.05% indirect economic interest in OML 18, which hosts the operating oil fields. Its interest in the project can increase to 9.72%, subject to securing further funds as part of a larger overall deal.

San Leon would also benefit from a minimum of 65% ‘enhanced cash sweep’, which would see expeditious repayment of the debt financing. The company also secured the right to provide oil field services, such as work over and drill rigs, to the opera-tor of OML 18.

San Leon Edges Close To Deal Com-pletion with Midwestern Oil &Gas

Nigeria Returns petrol subsidy

INDUSTRY NEWS

The Nigerian Association Of Petro-leum Explorationists (NAPE) has

called for papers ahead of its forth-coming 34th Annual International Conference & Exhibition (AICE), with the theme: ‘Nigeria Oil and Gas Industry: Tackling the realities’, scheduled to hold November 13th – 17th, 2016.

According to a statement by the group, the technology area of focus are: exploration and production (E&P) geoscience challenges, advances in geophysics, unconventional re-sources & marginal field development, drilling and smart drilling, geology, reservoir geoscience and manage-ment, health safety and Environment (HSE); people and policies among others.

Giving a timeline of the submission, NAPE said the completed abstracts are expected to be received May 15th, 2016; while by June 1, 2016, notice of acceptance is expected to be sent out.

It further stated that the full paper submission and deadline for submis-sion for exhibitors profiles is expected to end by August 31, 2016.

According to NAPE, all abstract submission, evaluation and notifica-tion for the NAPE 2016 AICE shall

be online, while all abstracts that do not conform to the prescribed specification for abstract formatting may be rejected.

In the area of E&P geosciences challeng-es, NAPE said the emphasis would be on deep basin plays, deep water exploration, redevelopment of mature fields, and over-pressures among others.

In area of advances in geophysics, NAPE explained that the emphasis would be on seismic noise and multiple attenuation advances in imaging, multi-component seis-mic, advances in seismic acquisition, time-lapse seismic acquisition and processing, broadband seismic acquisition and process-ing, advances in non-seismic geophysics and permanent reservoir monitoring.

Others are in geophysical reservoir characterization; emphasis would be on AVO and seismic attributes, geostatistics applications, fluid prediction, rock physics & modelling, reservoir geomechanics, seis-mic inversion, 3D time-lapse and 4D seismic interpretations.

Areas of concentration in HSE, people & policies include: attracting and retaining talent, career development, HSE leadership, culture & people, asset integrity, HSE man-agement systems, government & regulatory policies and incentives, waste management, data & information security, training and competency management.

Vitol SA and Seplat Petroleum Dev. Co. are among nine compa-

nies that submitted bids to construct new oil refineries in Nigeria as Africa’s top crude producer seeks to boost output of refined fuel and end its dependence on imports, the Nigerian National Petroleum Corporation, NNPC, has said

The successful companies will build near existing state-owned plants and add at least 250,000 barrels per day of refining capacity to the current 445,000 barrels, the Group Gener-al Manager, Group Public Affairs Division of the NNPC, Garba Deen Muhammad, said in an interview.

The government’s refineries are lo-cated in the northern city of Kaduna and the southern cities of Warri and Port Harcourt.

According to the NNPC, the new, smaller refineries will become opera-tional within 12 to 24 months while the existing plants will be rehabil-itated to operate at a minimum 70

percent of their capacity within the next six to eight months.

Fuel shortages and long queues have become a constant feature across the Nigeria, which imports about 70 percent of its refined fuel needs, straining the nation’s finances and foreign-currency reserves. Decades of poor maintenance and misman-agement left Nigeria’s four state-owned refineries working at a fraction of their capacity.

Emmanuel Otokhine, a spokesman for Se-plat, said he couldn’t immediately comment when contacted by reporters. Vitol didn’t immediately respond to an e-mail seeking comment.

In a statement by Mr. Garba Deen Mu-hammad, in Abuja, the NNPC said it was committed to boosting the nation’s refining capacity which in turn would put an end to perennial fuel scarcity in the country.

It quoted the NNPC Chief Operating Officer, Refineries, Mr. Anibo Kragha as saying that the open bidding exercise was a demonstration of the determination of the federal government to increase the nation’s

refining capacity from 445,000 barrels per day to 650,000.

“The aim is to leverage on the exist-ing facilities to fast track the take-off of the refineries as soon as possible,” he said

According to him, a technical eval-uation committee has been set up to study the bids and announce winners as soon as possible.


NAPE Calls for Abstracts for Forthcoming Conference

Nigeria: Vitol SA, Seplat among Nine Compa-nies Bidding For Co-Location of Refineries

For unconventional resources and marginal field development, the areas are shale gas/oil, leveraging and reuse of existing facilities; for geology, it is: building and updating subsurface 3D models, exploration–plays, prospects and evaluation, fault seal analysis and compartmentalization, sedimentol-ogy and structural regional geology, source rocks and petroleum systems, stratigraphic interpretation.

For Reservoir Geosciences & man-agement, it is conditioning reservoir models to dynamic data (histo-ry-matching), improved oil recovery strategies and integrated basin/reser-voir geology.

In Petroleum exploration case-studies, the areas are integration of multidisciplinary skills, explo-ration and fields –case histories, integrated field development models –upscaling and operations reserves estimation and classification and seismic imaging -case histories.

While for drilling and smart drill-ing, the areas are: drilling operations geology, pore pressure prediction & overpressures, shallow hazard analy-sis and interpretation, smart drilling & field development.

Refinery.

President Muhammadu Buhari, at the recently held 6th African

Petroleum Congress and Exhibition (CAPE VI) in Abuja, has asked mem-ber countries of the African Petroleum Producers Association (APPA) to develop ingenious ways of promot-ing value addition and investment through sustainable policies in local content.

According to him, a common approach to local content will ensure that the whole of Africa benefits from economies of scale associated with her vast resources. He also invited mem-ber countries to partner with Nigeria to derive more benefits from ongoing mega projects like the General Electric Service Centre for Manufacturing Rotating Equipment in Calabar; the Ladol Industrial Free Zone in Lagos – wholly indigenous, privately devel-oped and the hosting of the largest shipyard in West Africa; the 650,000

LOCAL CONTENT

APPA Summit: Buhari Charges Member Countries on Sustainable Policies in Local Content


Bpd Dangote Indigenous Refinery in Lagos and the Samsung FPSO Integration Yard in Lagos.

He said “Africa must substantially achieve value addition in the exploita-tion of its natural resources; APPA must recognise that the development of domestic refining capacity in oil and gas is critical to sustainable economic growth. I challenge African Ministers of Energy to further explore cooperation mechanisms to expand regional refining capacities in an efficient and cost effective manner.”

Recalling that APPA was inaugurated as a regional economic Association in January, 1987 and that it has grown from the initial eight (8) member countries to eighteen (18); the President, who was represented by the Vice President, Mr. Yemi Osinbajo, noted that the ongoing summit presents Africa with a very unique opportunity to look beyond the exploitation of oil and chart a new course in the use of other natural resources to upscale national revenues.

Adding that the current volatility in the oil sector allows lessons to be learnt, synergies to be built and new approaches to be adopted to enable Africa expand her economy.

On the use of Gas in Africa’s fu-ture energy mix, the President said it has become imperative, if Africa must meet her future energy needs.

He further promised to expedite action on the development of a ro-bust Gas infrastructure which must be jointly addressed. He observed that currently Nigeria has the 7th largest gas deposit in the world; rich in liquids and low in Sulfur and that with reserves put at over 185 Trillion Cubic Feet (TCF) and undiscovered reserves estimated at 400 TCF, Nigeria at sub-regional level, is actively involved in the West African Gas Pipeline Project that will deliver clean and safe natural gas from Nigeria to many West African countries.

The President finally assured the global community that Nigeria will continue to pursue focused re-newable energy initiatives through prudent management of resources under a Bio-fuel programme for the production of fuel-ethanol and bio-diesel.

The Federal Government says that foreign technology com-

panies have nothing to fear under its ongoing local content drive to promote indigenous technologies across Nigeria.

National Information Technology Development Agency (NITDA), the nation’s IT agency says the ICT local content policy is not intended to discourage multinationals from doing business in Nigeria “but to encourage favourable competi-tion among the local and foreign brands.”

Dr. Vincent Olatunji, Acting Director-General at NITDA who

Local Content: Nigerian Govt Says Foreign Tech Companies ‘Have Nothing To Fear’ In Nigeriadropped the hint at a stakeholders’ forum on National Content Bye Laws in Kano State gave a rationale for the current local content drive in the Nigerian information and communication technology (ICT) industry.

Olatunji, represented by Barrister Lazarus Ikoti, Acting Director, Standard, Guidelines and Regulations said that, “the National Content Policy of the Federal Government is not in any way intended to stop or prevent multinationals from doing business in Nigeria; rather it is aimed at as-sisting the local IT products and services to compete favorably with the multinationals operating in Nigeria.”

According to the NITDA chief, the Feder-al Government Policy under the Buhari-led administration is to create jobs and provide alternative means of generating revenue and that is what prompted the government is insisting on local content in ICT.

“By insisting on local content, we are trying to assist the Federal Government in creating jobs for the unemployed. It is also aimed at finding alternative income for the Federal Government in view of the dwin-

dling revenue from oil”, Olatunji says.He urged the Local IT entrepreneurs

to brace up to the new challenge, adding that they could not afford to be complacent as they should “ensure that your products meet international and acceptable standards and quality.”

He however gave his assurance that the agency would rejuvenate its Monitoring and Compliance Unit to monitor all the IT firms to ensure that their products meet generally-accept-able standards.

The stakeholders’ who agreed unan-imously agreed that it is high time the Agency began the enforcement of the bye law to create jobs in the country, underscores the need for the IT imple-menting agency to make reference to the sections of the NITDA Act, 2007 which empowers it to enforce the local content policy and come with penalties for violations thereto.

Mr. Inye Kembonta, National Coordinator, Office for Nigeria Content in ICT reviewed the Bye Law stating that the Bye law became imperative

Dr Vincent Olatunji, Acting Director-General of NITDA

LOCAL CONTENT

An indigenous oil service compa-ny, Ofserv Nigeria Limited has

dragged Weatherford International PLC, to court over alleged breach of contract and flouting the Nige-rian Oil and Gas Industry Content Development (NOGICD) Act. Al-ready the matter has been fixed for March 28 for hearing in the Court

It would be recalled that in 2010, the Nigerian government passed into law the NOGICD Act with a view to increase local participation in the oil and gas industry, to facili-tate job creation, and promote local enterprise development through increased investments in local supply chains. Compliance with the NOGICD Act was to be a major criterion for award of contracts to bidders, as a step towards growing the oil & gas sector’s contribution to the nation’s GDP.

The plaintiff, Ofserv, in the suit before a Lagos High Court however alleged that the defendants, Weatherford Interna-tional and Weatherford Nigeria Limited obtained proprietary market information and contacts from it, while excluding it from execution of contracts that came out from its efforts and resources.

Meanwhile in its notice of preliminary objection, the first defendant, Weath-erford International PLC has urged the court to strike out the suit for lack of jurisdiction and that its of no effect whatsoever. The company also requested for an order striking out its name from the suit for non-disclosure of a reasonable cause of action. Business intelligence

The plaintiff has alleged that Weath-erford engaged it to enter into a part-nership with Weatherford based on the NOGICD requirements. Based on that according to the plaintiff, it shared its market data and other business intelli-gence, introduced Weatherford to drilling services decision-makers and operators in the Nigerian market, and ultimately expended significant resources to facil-itate Weatherford’s market entry and secure a drilling services contract for joint execution.

However it alleged that soon as Weath-erford had reached a level of familiarity with players in the market, and was on the verge of securing a contract, it made it clear that it had no intention to follow the parties’ agreement or complying with Nigerian content requirements. Spe-cifically it submitted that Weatherford insisted that it will only pay Ofserv Nig. a commission and would not allow it to use its own tools or personnel.

The plaintiff further alleged that Weatherford’s actions made it lost approximately 200,000 Nigerian man-hours and over $25million potential lost

in-country revenue for the oil & gas sector. It therefore prayed the court for an injunction restraining Weath-erford from executing the Sterling contract to the exclusion of Ofserv; equitable compensation to Ofserv on the basis of equity generated by the induced partnership and/or damages incurred by Ofserv as a consequence of Weatherford’s actions.

It argued that a key requirement of the Act is for foreign companies to deliberately impart skills to local firms and personnel through pre-implementation training and on-the-job learning (i.e. inclusion of local personnel in project implemen-tation), wondering why Weatherford is acting to the contrary.

In its motion requesting to dismiss the plaintiff ’s suit, Weatherford International argued that Ofserv Nigeria Ltd did not seek the leave of court, which is precedent before issuing the court process meant to be served on the defendant outside jurisdiction. It stated that the writ of summons by the plaintiff is “void ab-initio having been issued without the leave of court first sought and obtained for the issuance and service of the writ of summons on the de-fendants outside the jurisdiction of this honourable court.”

It further submitted that the plaintiff, “being neither a law en-forcement agency nor a regulatory authority in the oil and gas industry, lacks the locus standi to institute this action and has no right under the Act capable of being protected or enforced by private litigation as sought in this suit,” it added. To this end, it urged the court to discounte-nance the suit filed by the plaintiff.


Ofserv Nigeria, Weatherford International In Court Over Local Content Act

Local Content: Nigerian Govt Says Foreign Tech Companies ‘Have Nothing To Fear’ In Nigeria

because of the legislative bottleneck in amending the NITDA Act of 2007.

He urged Nigerians not to see patronizing ICT locally made products as acts of patriotism alone, but as acts which reduce capital flight, increase human capital and infrastructure.

According to him, “any system you buy from abroad, you have created jobs abroad, put pressure on the Naira and deny people of acquiring skills in the country.”

Kemabonta says NITDA’s regula-tory power has a force of law, which makes the review of expedient issues become necessary, adding that by the time NITDA begins to enforce its pol-icy, “it would be as though they were made by the National Assembly.”

He said by the time the bye law takes effect, the Nigerian ICT com-panies would be able to compete with the big ICT companies anywhere in the world. He also encouraged merg-ing among the players “in order to increase capacity and improve quality of products.

• Technologytimes.ng

The Niger State Governor, Alhaji Abubakar Sani Bello

literally rose in defense of mil-lions Nigerians as he argued that the recent increases in electricity tariff by the regulatory agencies was wrong.

Bello also charged that the electricity bills that are given to customers including govern-ment agencies regularly were not commensurate with the power delivered by the distribution companies.

The governor, who stated this in Minna when he received the man-agement of the Abuja Electricity Development Company (AEDC) led by its Chairman, Alhaji Shehu Malami, further observed that the timing of the recent increase in tariff was wrong because most Nigerians were grappling with a serious economic predicament.

The Niger state Governor de-cried the poor supply of electrici-ty to the state, even as he assured the electricity firm that the state government will pay what it owes the company if they can increase the 10 megawatts currently


POWER

allocated to the state by another 10 megawatts.

He said aside from this, the electric-ity distribution agencies across the country have not been able to serve the people to their satisfaction that would entice them to pay the new tariff.

“The issue of tariff is a national issue. It is not peculiar to Niger State alone, and I think it came at the wrong time because the state is a place where people depend on the government, unfortunately, that government has no money which now has a negative impact on everyone. So payment of the new tariff made it worse because people cannot pay for what they didn’t consume,” he stated.

The Governor, therefore, expressed the hope that the concerned agencies would take a second look at the policy in the interest of the ordinary Nigeri-ans.

On the claim by the Abuja Electricity Distribution Company AEDC that it is being owed N1.4 billion in Niger state alone, Bello said that if the company increase the megawatts allocated to the state, he will offset parts of the debts owed the company.

“If you give us more megawatts of

N1.4bn Electricity Debt: Increase Supply, Get Your Debts Paid, Gov. Tells Disco

* Electricity distribution sub-station.

electricity today, I will pay your bills immediately, and my commis-sioner for finance is here he should take this as an approval,” Bello said.

However, the governor said once verification was completed, the government was prepared to settle its bills as long as AEDC would improve on its power supply to the state.

AEDC Managing Director Neil Croucher had announced that the Niger area of the company was owing the company N1.4 billion, a development he stated was not good for business.

He explained that the distribu-tion company only retain 30 per-cent of the proceed while about 70 percent of the funds generated is remitted to the generating compa-nies and that without the payment of the money owed the company was running at lost in the state.

Recently, the National Elec-tricity Regulatory Commission (NERC) unveiled a 45 per cent hike in an average of N9 jerk up electricity tariff for all classes of electricity consumers even as the commission abolished the continu-ous fixed charges for all electricity consumers in the country.

The new policy which took effect on February 1 this year had already attracted wide condem-nation from major stakeholders across the country.

Speaking earlier, the Chairman of the AEDC, Shehu Malami, said over N3billion had been injected into the network with almost equal amount currently being spent on the improvement of infrastructure inherited from the defunct Pow-er Holding Company of Nigeria (PHCN) which had resulted in the provision of modern busi-ness systems and acquisition and distribution of over 700 electricity transformers.

Malami said arrangements had commenced for the enumeration of all the company’s customers with the sole aim of installing more than 5,000 meters.

POWER

Europe, US increase demand for Nigerian crude

The premium of Nigeria’s Brass River crude to Dated Brent has

jumped to its highest in almost a year as a result of increased demand due to recent tenders and the upcoming peak gasoline season in Europe and the US.

Brass River was assessed Wednes-day at Dated Brent plus 30 cents/b, its highest since April 4, 2015, when it was assessed at Dated Brent plus $0.40/b, Platts Market Data showed.

Brass River’s differential to Dated Brent tends to react strongly to seasonal trends, hitting peaks around March and April, according to Platts Market Data. Although Brass River, like the rest of the Nigerian complex, saw its differentials slide over the course of 2015 due to a continued glut of sweet crude in the Atlantic Basin, the seasonal trend has continued to be seen in 2016.

Grades like Brass River, as well other gasoline-rich grades like Qua Iboe, have been supported throughout March by strong demand from trading houses for selling into tenders or on expectations of improving gasoline cracks, with the move from winter to summer specifications and the upcom-ing summer driving season.

Some Brass River cargoes were also heard to be placed in the recent tender by Venezuela’s PDVSA.

Additionally, traders said resurgent demand for Nigerian crudes in the US East Coast in recent months has lent particular support to grades with high gasoline yields, such as Brass River.

Weekly US imports of Nigerian crude rose to their highest level in almost three years, data from the US Energy Informa-tion Administration showed Wednesday, as US refiners increased their appetite for light, sweet crudes in recent months and as domestic grades have seen their arb close to the US East Coast on sliding margins and

higher rail costs.The US imported 559,000 b/d of Ni-

gerian crude in the week ending March 18, the largest weekly amount seen since the week ending April 26, 2013, when the US imported 698,000 b/d of Nigerian crude, EIA data showed.

According to Angolan Minister for Energy and Water, João

Baptista Borges, a new thermal power plant with capacity to pro-duce 150 megawatts of electrical energy is being built to alleviate the

energy demand in Luanda, the capital and largest city in Angola.

Power cuts in Luanda is the product of increased of consumption that contrib-utes to the increase of deficits, since the supply capacity is not constant”, Borges told Reporters during a visit to the substations as part of the Soyo combined cycle power project. The Energy minister however said the new project was not ac-tually a response to the huge demand for power, but stressed that the answer will be given by structural projects including Cambambe, Lauca dams, and the com-bined cycle power plant in Soyo

Angola is Africa’s second largest pro-ducer of crude oil and it had announced plans to build hydroelectric plants to boost power generation fivefold in 2013

Angola to Build New Power Plant in a bid to attract investment to other industries to the country

The nation’s Ministry of Energy and Water signed a Memorandum of Understanding with GE Oil and Gas Company to achieve the country’s 2000 MW of electric power gener-ation capacity target by 2016. In addition, GE helped complete instal-lations at three power plants in the country.

The Government of Angola had awarded a 66- month contract to environmental and engineering consultancy Coba in June 2013 to provide services and equipment for Laúca hydropower plant currently under construction by state-owned power utility Empresa Nacional de Electricidade de Angola (ENE).

*Crude oil vessel


“Deregulation of the petroleum sector has come to stay in Ghana.” This emphatic statement made by stakeholders in the country’s downstream petroleum sector indicates the total acceptance of the deregulation policy introduced in July 1, 2015.

The deregulation of Ghana’s petro-leum downstream sector, which has been widely accepted by players of the industry, was as a result of the difficul-ties faced by government when it failed to respond appropriately to market forces when necessary. Deregulation was therefore introduced to free government of budgetary re-

sources allowing it to cut down on borrowing and to increase alloca-tions to vital social services. It will also allow the private sector to as-sume the role of a service provider within a well and very competitive environment.The unsustainability of debt owed by government to Bulk Distribu-

COVER


By Gilbert Boyefio

The deregulation of Ghana’s petroleum downstream sector has been on the drawing board of various governments in Ghana for decades but the fear of implementa-

tion has hampered its execution until recently. This is the story so far...

Ghana’s Deregula-tion Agenda: Hit or Miss?

tion Companies (BDCs) is also clear indication of the need to deregulate the petroleum sector.The debt owed to BDCs posed liquidity challenges for the BDCs resulting in supply constraints and thereby creating shortages and smuggling of petroleum products. To this end, the deregulation is important not only to clear the outstanding debt of government to the BDCs but also to ensure that government no longer sub-sidizes the cost of fuel to pile up additional domestic debt.Government’s decision to deregu-

late the petroleum sector was to enable petroleum importers and dealers to fix their own prices which are expect-ed to drive competition in the sector and ensure cheaper and best prices for the consumer. Deregulation also frees the government from supporting the sector through subsidies as was the case before.

Ghana’s Petroleum Minister, Mr. Emmauel Armah Kofi-Buah, has

said Government’s decision to deregu-late the petroleum sector was to allow petroleum importers and marketers to reduce their price, as well as pull in more private players into the sector.“Government’s decision to deregulate the petroleum sector will compel oil importers and dealers to fix their own prices at cheaper rates as buyers would want to buy from importers, whose prices are cheaper compared to others”, he said.Mr. Armah Kofi–Buah spoke in Kumasi during an inspection of the Bulk Oil Storage and Transport (BOST) facil-ities in Kumasi recently to ascertain progress made since Government handed over the management of BOST to TSL Logistics, a Nigerian company, a year ago. The Petroleum Minister said deregu-lation would mean that the National Petroleum Authority (NPA) would no longer be in charge of determining the prices of petroleum products, but would only be in charge of ensuring that the products sold were up to standard.

He noted that although the Dereg-ulation Act was passed in 2005

and had made a lot of progress, such as allowing private oil players, Bulk Dis-tribution Companies and Oil Marketing Companies to come on board in the im-portation and sale of oil in the country, price liberation which was one of the core mandate of the Act had not been achieved hence Government’s decision to do it now.He added that, the deregulation of the sector would also help end the perenni-al fuel shortages that hit the country, adding that, private players would no

longer be able to cheat Ghanaians. So far the deregulation exercise (liberalization of the price of petroleum products) only affects products such as diesel, kerosene, LPG and petrol. However, the rest of the products are still being regulated and some are still heavily subsidized such as premix and Residual Fuel Oil (RFO). “So far it has been okay. The mar-ket has responded positively to the policy. Bulk Distribution Compa-nies (BDC) fix the prices for the ones that are deregulated and then you have the Oil Marketing Com-panies (OMC) also competing out openly,” confirmed Senyo Horsi, Chief Executive Officer, Chamber for Bulk Oil Distributors.Supporting this stand, Duncan Amoah, Executive Secretary,

COVER STORY


John Dramani Mahama, the President of the Republic of Ghana.

Government’s deci-sion to deregulate the petroleum sector will compel oil importers

and dealers to fix their own prices at cheaper rates as buyers would want to buy from im-porters, whose prices are cheaper compared

to others

Chamber of Petroleum Consum-ers, emphasized that, “Deregula-tion is going to free government of the needed resources to develop other sectors of the economy; and also enhance a congenial environ-ment for the petroleum service providers to be able to bargain and negotiate well to deliver effi-cient prices to the consumer down there.”

Both Mr. Horsi and Mr. Amoah discounted the fear of car-

telization by players of the sector as a result of the deregulation exercise.According to Mr. Amoah, de-regulation serves the Ghanaian infrastructure very well because the challenges that we envisaged with deregulation has been taken care of by the nature of our infra-structure. “One will talk about cartelization where you expect the players go to a certain room and agree that lets sell petrol for GH30.00 per a gallon. Unfortunately, that sort of hegemony was broken from birth because the government still had a lot of players within the chain who were also deliver-ing petroleum. If you look at the BDCs there is GO Energy, which is owned by GOIL (fully state owned). So if government will sit through the bigger BDC and allow the small ones to do a cartel business, then that is the govern-ment’s problem.Mr. Horsi also added that, “Cartel is when you sit down and agree on a fix pricing, but under the present situation you look at cost, you look at competition and you set your price. The product is a commodity there is only so much you can add to it in value terms and in service terms to help you demand premium pricing. Even Ghana as a trading body does that; when we want to sell our cocoa we want to look at what Ivory Coast is doing. If you over-price yours people will go and buy

more of the Ivory Coast cocoa. As a matter of fact, people are chang-ing their pricing on a daily basis. If you fix your price and you are not sell-ing you have to go below your normal pricing”.

Deregulation and Taxes

Perhaps the bump in the success story of the deregulation policy

implementation in Ghana is the intro-duction of the Energy Sector Levy. Stakeholders hold divergent views on the impact of this on the market.“As much as we endorsed deregulation some unfair practices that we are see-ing must be curtailed and nib immedi-ately; because there is a potential for deregulation to be thrown out of sync completely. You saw one instance when the gov-ernment went back to parliament to say it needed more taxes on petroleum. Now if the same government comes to tell us through deregulation that it is going to allow market forces to deter-mined prices and yet government forces through taxes are determining prices, then you throw away the essence of deregulation,” Mr. Amoah pointed out.But Mr. Horsi thinks otherwise, argu-ing that, “Not necessarily, that opinion may be so to the extent of miscom-munication. If people understand the policy and events I am not too sure it will threaten deregulation.

Deregulation has never been a promise to make sure prices are always low, no. It is a promise to make sure you have competitive pricing. Pricing which is more reflecting of the market, with no liability to government whatsoev-er. But government is going to be the net revenue generator from the industry through taxes. So dereg-ulation cannot be faulted for taxes increasing. Even if you have reg-ulated price, government will still introduce it taxes and prices would have changed. To that extent, I am not too sure that deregulation may necessarily been threatened by the change in taxes.”

Shadow pricing: Another bane of contention to deregulations.

The consumer watchdog is ac-cusing players in the industry

of looking at the Ghana Oil Mar-keting Company Limited, known as GOIL, the bigger players, to set prices for them to copy. They noted that apart from Total that has a variant price from GOIL; the others do not even vary or deviate by a pesewa. “Just a week ago, we found out that GOIL had a bigger challenge even determining how much to sell. And because of that most of the OMCs could not set their

COVER STORY


Horsi, Chief Executive Officer, Chamber for Bulk Oil Distributors.

prices, though the market was to go up. That challenge, shadow pricing, is not allowing for the competition that we want to see. If GOIL becomes the benchmark and the key indicator as to how much fuel should be sold then we are losing out on one of the core grounds of deregulation which is market competition. The moment we lose the compe-tition and come to a certain cross price regime, where GOIL is the benchmark to all other OMCs then there is a problem.

The chamber is not sleeping on it. In fact the very last pub-

lication that we did we highlight-ed these things and I am quite sure the players themselves are now not going to be happy that Ghanaians are going to see them as shadow operators who only de-pend on GOIL to determined how much they sell their oil.”But the BDC Boss strongly dis-agreed to that assertion. “I don’t think the market is look-ing at GOIL, they are looking at everybody. If you have a station that is next to you and your price is such that everybody is going to that station, you have to check your pricing.

GOIL for the record is not the lowest price on the market. There are others who also have low prices on the mar-ket. So they are not actually looking at GOIL but rather the competition; be-cause the activities of your competitors are also reflective of the market. And that is what deregulation is all about; to make sure that competition will shape pricing and services to consum-ers to make them benefit the more. The margins of the OMCs are much lower than they would have been under a regulated pricing regime; because people have given up margins to be able to compete to command the volumes,” he explained.

Way forward

Mr. Senyo Horsi recommends the deepening of the deregulation

process. He said deregulation must stay and be maintained because the alter-native is not viable and sustainable for fiscal interest of the country; but it also has to be well structured in a way that customers and consumers will always benefit.He also called for the transportation bit of the sector to be liberalized be-cause it is currently still being regulat-ed.Considering the success rate of the implementation of the deregulation

policy in Ghana, perhaps it is about time other West African countries emulate this policy to free their governments from pump-ing national resources or budget into petroleum consumptions.

COVER STORY


Buah: Deregulation will compel oil importers and dealers to fix their own prices at cheaper rates

I don’t think the market is looking at GOIL, they are look-ing at everybody. If you have a station that is next to you

and your price is such that everybody is

going to that station, you have to check

your pricing.

COVER STORY


By Gilbert Boyefio

The current energy situation in Ghana seems to have largely improved from the “Dumsor”

era. The country has been experienc-ing frequent power outages for close to four years now , a situation which has led to the collapse of numerous companies, the loss of thousands of jobs, and the eventual resignation of a Power Minister, Kwabena Donkor, for his failure to fulfill his promise of ending the power crisis. “To tell you the truth, the situation has improved drastically from where we were last year when we had only two days power supply in a week, to almost a regular power since January this year. And for most of us it is very good; one for business, two for security and three it also even helps in planning your office hours. Productive man hours have been improved by the stable power situation,” says Duncan Amoah, Executive secretary, Chamber of Petroleum Consumers (COPEC) . However, despite the improvement in the power situation, Ghana-ians still live in a state of anxiety since they are not sure whether the measures put in place to arrest the situation is permanent or just temporarily. According to data from the Volta River Authority (VRA), Ghana’s total installed capacity is 2831mega-watts which is mainly from hydro, thermal and solar. Yet the country’s electricity demand is said to be increasing at the rate of 12% which calls for urgent measures to address the shortfall.Therefore there is need to diversify the country’s energy mix in order to have secured, affordable and reliable electricity.

The LNG Potential

Solving Ghana’s Energy Challenges -Is LNG The Solution?

Many experts in the energy sector be-lieve that investment in the Liquified

Natural Gas (LNG) holds the key to the country’s energy solutions. LNG for one thing is not as expensive as crude Oil. Obviously the Atuabo Gas Processing plant promises to provide a lot of it to compliment the country’s power generation efforts and also support its industrialization process. The LNG can be used to power most of the thermal plants that the country is setting up.Exciting news for Ghana is the TEN projects that is projected to generate about 150million standard cubic metric per day, which can give the country about 2000megawatts of power in production. So clearly the future with LNG in Ghana is strong so far as the TEN project still remain strongly and it looks like it would come up on screen anytime soon.“There is everything to gain if Ghana makes up its mind to expand upon the existing gas infrastructure, said Amoah.

The situation has improved drastically from where we

were last year when we had only two days power supply in a week, to almost a reg-ular power since January this year. And for most of us it is very good; one for business, two for security

and three it also even helps in planning your office hours. Productive man

hours have been improved by the stable power situa-

tion,

COVER STORY


‘The country could even start LNG transmission unto the thermal plants before the TEN project is ready for oil production. “If you look at what happened with Jubilee Fields, we waited for pro-duction to start before we actually commenced Ghana Gas, so a time came that some form of flaring has to be done. Before the TEN project commences production, if we plan ahead we should be able to expand the Ghana Gas infrastructure to be able to accommodate the additional supplies that would be coming from it. We should not wait till it gets there,” the COPEC executive secre-tary asserted.

But again, the country has been warned not to be over reliant on

LNG so that the moment the FPSO or whatever storage facility that keeps the gas system has a challenge, the country wouldn’t be plunged into darkness. The key word now is diversification of the energy sector. Ghana has been urged to diversify its energy sources so that in any given year if the hydro system does not work, the country may be able to have enough coal, or thermal, or solar or biogas, to feed these plants. In addition, the country should generate twice what it needs as an insurance package against any even-

tualities, and also can still export some to its neigh-bouring countries and get some hard currencies as revenue. The National Development Planning Com-mission (NDPC) has also been appealed to incul-cate some of these recommendations concerning the country’s power demands and

needs in its forty year development plan to ensure that at each point in time the country’s generation mix are maintained to capacity.

Other measures

Moving away from LNG, there is an urgent need for Ghana to overhaul

or enhance its power infrastructure. Most of the country’s power cables that were laid for about fifty years now had not seen any repairs or replacements. Some huge investment is therefore needed to overhaul the system.“I quite think Ghanaians are not looking for just supply from VRA or ECG, said Executive Secretary Amoah. Government should find a way to subsidize importa-tion of solar panels for individual homes and SMEs so that as many people as pos-sible could be taken off the national grid,“And then also we are looking at the situ-ation were the free zones board together with the trade ministry and the foreign

ministry will treat every Foreign Direct Investment (FDI) separately from how it has been treated so far. If people come to invest in buildings companies, the next thing you should be looking at is the consumption of power because they would neutrally fall on the national grid. Is there a possibility that the free zone board itself could also be challenged to go into thermal energy generation agreement with the com-panies that operate within it enclaves. If these are done I am quite sure that fifteen to twenty companies could be taken off the national grid, you can understand the power that will be off the grid. “But if we only go for FDIs to build large factories only to feed back on the national grid, technically a time will come when domestic consumers would also be challenged and it would not be funny anymore. We think going forward there should not be only special plan but there should be a policy in place to ensure that when FDIs come whatever energy needs they have are comprehensively dealt with even before these factories com-menced working,” COPEC advised.

Exporting Power

According to energy experts, if Ghana does her work well and

have the different mix to be expand-ed to whatever proportions that the country needs, the surplus can easily be supplied to the sub region for for-eign revenues such that even the local tariffs could be subverted or forced down.

Former Power Minister, Kwabena Donkor, resigned due to failure to

fulfill his promise of ending Ghana’s power crisis


TALKING POINT

Now that the CAPE VI event has come and gone, as a key speak-er at the forum how would

you rate the event in terms of current realities in the oil and gas sector?

The CAPE VI event is a forum for the African leaders, especially for

countries who have been in the oil and gas production over the years. The forum ensures that African countries collaborate beyond their borders with-in the scope of the African Petroleum Congress goals and objectives. The practice has been that most African countries export crude oil rather than finished products. The fact that oil is less than $40pb is a wake-up call for everybody to look at the value chain and focus on the downstream and the midstream which are yet to be exploited. This fundamental change

signals going into Refining, Petrochemicals, Gas and Power. Only then can we power up industries and stimulate an industrial revo-lution by various countries and then become exporters of finished products.

How feasible is this considering the emergen-cy economic hardship oil price has brought among member countries?

I think the major problem faced, particu-larly in Nigeria, is our inability to iden-

tify with our history, that is why I made it clear in my presentation that before 1952, there were main sources of wealth attached to specific tribes in Nigeria; the Hausas, the Igbos, the Yorubas, the Tivs, the Jukuns, the Efiks and other specific tribes within the six geopolitical zones. In that era, there were areas of specialization; we have cash crops and mineral resources that they were exploiting and processing at the same time.

I think it is high time we begin to review our strategies and processing technologies, so that we process all our raw materials and begin to export them to outside world, thereby creat-ing jobs and wealth for Nigerians.

Can you say the present administration is doing enough to make this a reality?

In fact, I admire the present admin-istration, they have initiative, not

dolling out cash irrelevantly without any tangible return-on-investment visible to them, and they are telling all Nigerians that are ready to listen to look inward; buy Nigeria, create jobs, create value. The message is clear, real-istic and very apt especially because of the current budget deficit that we’ve found ourselves due to low pricing of oil. I believe the current government

Crude Oil Is Next To Nothing

Except….. – Dr. Amao

Dr. Ibilola Amao, a renowned career tutor and Principal Consultant at Lonadek Oil and Gas, at

the recently held CAPE VI African Petroleum Congress, has called on member communi-

ties among oil producing African states to grease their Local content policies and

take advantage of the global oil down-turn in re-annexing their neglected

God given resources. The alumni of Manchester Business School in this one-on-one encounter with our Abuja

Bureau chief, SOLA AKINGBOYE may have unequivocally hit the nail

on the head, while describing crude oil economy as next to nothing in the face of

the current realities on ground,as she high-lighted the untapped sectors of the Nigerian

economy as a panacea to the lingering economic downturn in the land. Excerpt:


TALKING POINT

will be instrumental in fixing and shaping things up.

Does that mean the down-turn in the global oil price is a blessing in disguise?

Absolutely! I can tell you that we cannot believe our luck because

this is an opportunity of a lifetime which would compel us to stop wast-ing our resources selling crude which is next to nothing. We need to put our heads together, re-strategize, plan and identify within the entire nation, primary and secondary resources from all the six geopolitical zones, therefore ensuring that we make oil and gas a tertiary wealth generation resource. It is possible that some of these states are not economically viable; we should therefore reduce the number of states. We do not need to maintain thirty six states that are not viable. We can then start ploughing back the oil revenue generated from the oil and gas into a sovereign wealth fund, so that we can ensure that every state generate enough revenue to sustain itself and stop depending on the center for resource sharing. Every state must be viable, we must all look inward to revive the economy through other nat-ural resources and the available cash crop we have in states.

But how would you advise Nigerians since cocoa or palm trees don’t grow in one year?

I need to stress the importance of patience to every single Nigerian.

Impatience or the short term quick-fix orientation will make us remain at operational level. If we are to play at tactical and strategic level, we must then think medium term and long term. The developed world are strate-gic, they plan for long periods of up to thirty, fifty and hundred years and benefit from returns on their invest-ments while Africa is more or less rele-gated to the position of providing raw materials for their industries to grow at the detriment of ours. Further-more, we import virtually everything from them. This is the time for us to seat down, patiently re-access our situation and begin to start thinking and rethinking like business minded people; we have no choice right now.

Many have accused President Buhari of junketing around the world rather

than seat back and think over the situation on ground, what is your view?

First and foremost I am a business woman; I travel where the money is.

Leadership of Nigeria in the past eight-twelve years of our democracy has been depriving 170 million Nigerians of our common wealth; stashing cash that belongs to all into individual and offshore accounts. I think the President should do more trav-elling to get to the bottom of where these wealth are kept and to repatriate those he could at a time like this. He is also trying to understand the apprehension of other world leaders Nigeria had done business with in the past, those who have invested in Nigeria in the past or tried to invest in Nigeria and those with investment plan for Nigeria. So he is travelling to these countries trying to get these leaders and potential partners to align as well as understand how best they can create value for us so that at the end of the day we can collaborate with them when the investment climate is right.

Do you think there is enabling environment for investors to come in, in terms of infra-structure?

As mentioned previously, we have 25 Free Trade Zones (FTZs) that have

not been fully optimized. This is a very good time for us to create hubs; trade park, industrial park and investment opportuni-ties to attract Foreign Direct Investment. Apart from Power, Energy, Infrastructure, Agriculture need to be processed, it needs to be harnessed so that we reduce wastage. I also think we need to get the equation of the infrastructure right, especially Power so that we can begin to process that which we are endowed with for onward transfer to the

international market.

On Local content, do you share the insinuation that the IOC’s are taking Nigeria for granted?

The IOC’s are doing what they are supposed to do. On our own part,

we simply have to be very strategic and clear. If we can actually design our own master plan; if we are lacking strategic master plan we cannot optimize the goodwill and the resources that the IOC’s are supposed to use for their corporate social responsibilities, com-mitments and compliance activities. If you do not have the master plan, how do you then get investors (willing or unwilling) to plug in, then synergize and synchronize the resources to create the maximum value for us? Every IOC is doing the little and the much they want to do, but it is to our disadvan-tage because if we have the master plan, we can tell all the IOC where we want them to plug into, so that they can create maximum momentum. At the moment, I have not seen the master plan.

Would the PIB justify the master plan for Local content when it is passed into law?

PIB for me is just a white elephant project, it is a long story. I have al-

ways believed that we do not need more than two laws for petroleum industry that will harmonies and optimize other laws that needed to be updated. I think the PIB was basically to compensate the communities that pose a threat to oil access and to ensure that Nigeria gets maximum return on investment from her hydrocarbon asset. PIB has so many conflicting interests in it, but fortunately, we have a minister of Petroleum Industry who is a seasoned Lawyer. I believe he knows what needs to be done; the shakeup in the NNPC is one step forward, and he has already created an economically viable organ out of the NNPC.

What is your view on the recent unbun-dling of the NNPC and its likely job loss effects?

I am in support of the commercializa-tion, unbundling or restructuring of

various divisions of NNPC to ensure that the NNPC is a profitable organi-zation and accountable to one hundred

Dr. Ibilola Amao


HOTO GALLERYP

CAPE IV, THE 6TH AFRICAN PETROLEUM CONGRESS, ABUJA 2016

Honorable Minister of State, Federal Min-istry of Petroleum Resourcces and Group Managing Director, NNPC, Dr. Emmanuel Ibe Kachikwu, delivering his poetic speech at the opening ceremony.

Vice President, Prof. Yemi Osinbajo in a chat with Minister of State for Petroleum, Dr. Ibe Kachikwu

Cross section of participants at the opening ceremony

Vice President ‘Yemi Osinbajo visits the exhibition stand of Shell Companies at the 6th congress of the African Petroleum Producers Association

The Vice President, delivering the opening

remarks on behalf of the president.

VP Prof. Yemi Osinbajo rep-resents President Buhari at the 6th African Petro-leum Congress & Exhibition, Abuja.


HOTO GALLERYP

L-R; Managing Director, Arco Main-tenance and Engineering Ltd, Mr. Jan Baan explaining to SGF, Babachir David Lawal and GMD, Arco Group, Alfred Okoigun the functions of Main-tenance Engineering in Oil industry

Shell boothVP at the NCDMB Booth

The Total Team, looking gorgeous

SNAPSHOTS FROM OFF-SHORE WEST AFRICA 2016

Century GroupLekoil ably represented

I N T E R V I E W


TALKING POINT

and seventy million of us Nigerians.

What about the job loss phobia?

If every arm of the NNPC is profitable and generating revenue,

I think they will even employ more staff, what they have to do is to stop wastage, then shake up the lazy ones. As soon as any activity they are running create more value, the need to employ more staff would be inev-itable. In the long run, this can only bring positive results.

Unemployment is biting hard on able-Nigerian youths, as a carrier counselor and motivational speaker, what are your suggestions on the way out?

First and foremost, we need career counseling; every Nigerian youth

must identify their potential, talent and passion. If you know all these, you will be very useful for the society, and you will create maximum value and become an entrepreneur. The Entrepreneur needs to meet the needs of people in their immediate envi-ronment and can then get paid for it. Nigerian youths operate in a won-

derful environment that if you think hard; look around you and identify multi-faceted and multi-dimensional problems in Nigeria, and you try to resolve the problems, the challenges and issues with your potentials, talent and passion, you will definitely become a successful entrepreneur as long as you have proper guidance and support. That is why our establishment focus on Youth Empowerment; Women Initiative, SME development and supplier develop-ment. We are looking at entrepreneurship as a way out for the teaming youths.

Is that all your organization, Lonadek does?

Lonadek vision is to identify, develop and engage Nigerian professionals, youths,

locals in engineering and enterprise and also to become a preferred local content advisory firm; building capacity, capability and competence in engineering and enterprise. What we do is actually solving problems in emerging economies, training local to meet gaps; we mentor, we coach, we expose young people including women in the areas of Science, Technology, Engineering and Mathematics (STEM) and what have you. We help them harness their ideas into tan-gible business plan. We also work with them to access funding from financial institutions such as Bank of Industry, commercial banks and SME approved banks, so that

they can turn their ideas into viable businesses through the development of bankable business plans and grow their enterprise into multinational or trans-generational businesses. Our fo-cus is Energy, Power, Oil and Gas, and infrastructure. We are also doing a bit of agriculture through the deployment of process technology.

What is the reach in terms of aware-ness creation to get the youths’ atten-tion by Lonadek?

We have impacted the lives of over 50,000 Nigerian youths

through the Vision 2020: Youth Em-powerment and Restoration Initiative. The initiative is a fifteen year career counseling, industry awareness and youth empowerment initiative which commenced in May 2006 and would end on the 31st of December 2020. We hope to have impacted at least 100,000 youths in STEM by then. We do a lot of awareness creation and advocacy on the Youth being the future of Nigeria at our corporate level and we have also established a STEM hub in Jibowu Yaba, Lagos state where collaborations with African leaders in STEM and cap-tains of industry including the Energy Institute UK, are taking place.

Crude Oil Is Next To Nothing Except….. – Dr. Amao Cont. from pg19

‘Local Content is Africa’s Plan to Fight Unstable Oil Price’ – APPA Boss His Excellency, Mahaman Laouan Gaya is the incumbent Execu-

tive Secretary of the African Petroleum Producers Association (APPA), in this special encounter with our Abuja Bureau, SOLA AKINGBOYE, at the recently held CAPE VI Summit in Abuja, he reveals his master plan for the apex African Oil and Gas governing council, particularly in the face of crashed crude oil price. While emphasizing his reform agenda on local content for economic diversi-fication, Gaya also identified renewable energy sources as alternative measures to confront energy shortage in Africa. Excerpt:

The APPA council of petroleum producing ministers met yes-

terday, here in Abuja, what was the deliberation all about?

During the meeting of the com-mittee of the experts as well as

the session of the council of ministers that were held here in Abuja, very important decisions were taken. For more than 29 years that APPA has been in existence, it was the first time in the life of APPA that the ministers came to term with the fact that APPA impact has not been felt among the people of the continent, and that there is need to take a firm decision on that. They also deliber-

INTERVIEW


ated on the issue of security as very vital for African development, same way the issue of energy security must be very important for Africans.

The Nigerian Vice President Prof. Yemi Osinbajo has said these are crucial times for APPA, what are the measures being taken by your associa-tion to ameliorate the consequence of global oil downturn on your member countries?

When the signs of the global oil down-turn began to manifest,

the highest body of our association, the Council of Ministers took some far reaching decisions that the association will undergo an institutional reform to strengthen it and re-dynamite it and make it possible to face chal-lenges. Fortunately, these decisions concededly with the end of the tenure of my predecessor, former executive secretary of APPA, and in the process of recruitment of the new executive secretary, who I finally ended up to be. The strict condition that we really put on ground was to make sure that the candidate that would emerge as the executive secretary would be somebody that can be trusted with the challenges of the community.

As the man at the helm of affairs, what are your plans for the associa-tion?

When I came in, I had my vision; I also had my strategies be-

cause when APPA was created about

twenty nine years ago, the major preoccu-pation and concerns of APPA has always been how to turn the petroleum industry around. But I had a vision of what is called Energy Transition, which means not only to transform the petroleum industry but the transition from dependency on oil into another form or sources of energy. The energy concentration of the developing world or Africa is such that Africa consume 0.23 tonnes of energy, Europe consume 4 tonnes while America consume 8 tonnes. You can see the gap discrepancy, meanwhile in Africa; we have other renewable source of energy. For instance, you discovered that the sun rises in the morning and still shining towards the evening because of the abundant solar energy at our disposal; we have abundant water and all other source of renewable energy that we can tap into and of course reduce our over-dependency on oil.

Among which are other plans?

We have other sources of renewable energy, rather than going into the

forest to exploit our resources, we can make do with other resources so that we can be able to conserve the available crude oil and consume same on the continent while tap into other sources of renewable energy. So in our match towards the institutional reform, it has become priority for us to go into other sources of energy and at an affordable price.

Any plan for local content?

We would also blend towards develop-ment of Local content. In Africa,

we shall ensure that our people and companies are so well equipped that our manpower is capable of developing its oil, gas and energy sector for the benefit of our people. Rather than putting all our hope on foreigners such as the Chi-nese, Britain and American companies; we

have big investment companies such as Nigerian NNPC, Sonatrac in Algeria, Sonangol in Angola and many more that can do similar things and even better than most of the these foreign companies.

How would APPA ensure implementa-tion of such a local content initiative among member states?

That is why part of the reforms we are trying to bring on board will be

to have the highest organs of our orga-nization like summit of head of states and governments; with that, we are determined that we would be able to raise those issues directly before them and ask them to take firm decision and immediate action on it.

FROM THE NIGER DELTA


The coastal communities along the Ogboinbiri River in Southern Ijaw

Local Government Area of Bayelsa have urged oil firms operating in the area to provide them with potable water.

Chief Columbus John-Bull, Chairman, Community Development Committee (CDC), Keme-Ebiama, one of the affected communities, made the call in an interview with the News Agency of Nigeria (NAN) in Ogoinbiri recently.

John-Bull told NAN that an oil leak recently occurred in the area and polluted the Ogboinbiri River, a major source of water to Keme-Ebiama, Apoi, Kokologbene, Gbaruan, Ukubie and Lobia communities.

He said that the oil leak from Sei-bou Deep facility, operated by Shell Petroleum Development Company (SPDC), discharged crude into the river and had yet to be remediated. According to him, the people could no longer source drinking water from the river because of the pollution. He said

that the communities depended on the river for drinking water and domestic use.

John-Bull said the operations of Shell and Agip, another oil firm in the area, frequently polluted the river and made the water unsafe for drinking and domestic use. According to the community leader, oil exploitation in the area had caused untold hardships to the communities.

He said that the communities deserved a reliable alternative source of water as

the people had endured the adverse effects of oil exploitation. “We are host communities to the oil firms that pollute our only source of water and this is regrettable. Whenever a spill occurs, the oil spreads along the rivers, right from the Ogboinbiri axis to our

own river and makes the water undrinkable.

“It is so devastating that our people can no longer go to the river and take their bath or fetch drinking water. The river is our main source of drinking water and water for every other domestic use. The cost of sachet water in the community rises from N10 to N30 when-ever a spill occurs and this happens very often.

“Most of our people cannot afford the sachet water at that price. We are very much worried of what the situation may lead to. Recently there was an outbreak of cholera in some communities in the local government area because of such pollution,” John-Bull said.

*NAN

Bayelsa Communities Seek Po-table Water from Oil Firms

By Jolly Adjuwe – Port arcourt

The president of the Movement Of The Survival Of The Ogoni

People (MOSOP) Mr. Legborsi Prag-bara have called on politicians and well meaning Nigerians against the politicization of the process leading to the implementation of the united nations environment programme (UNEP) report for positive results to be achieved. According to him, I just want to advise the federal government to beware of politicians parading them-selves as friends of the Ogonis and trying to masquerade as the person facilitating the process of the UNEP report. Federal Govt Should consult widely the stakeholders before taking any action because environmental issues are beyond politics” Mr Legborsi Piagbara, MOSAP president made this redecoration in an Exclusive interview with Orient Energy reviews magazine correspon-

dent in Port Harcourt on the backdrop of the recent visit of the minister of environ-ment, Mrs Amina Mohammed recently to Ogoniland said that most of the environ-mental degradation in Ogoniland follows the failure of multinationals to take urgent remedial measures after oil pollution which have resulted into accumulation of oil spillage in the area, I his words, rather than tackle environmental challenges in their areas of operation, especially in Ogoniland, the multinationals engage in needless divide and rule tactic, thereby causing crisis among communities in the oil producing areas such as Ogoni land and also deny the communities of their direct benefit from any of the spillage that occurs”. Mr Piaghara was of the new that because of the negative impact of the environmental challenges on Ogoni land any attempt to politicize the process would affect the eventual outcome of the final im-plementation of the UNEP report, and that the federal Government should guard its steps in every process in the implementa-tion of the report and not allow sycophants

to intrude into the process. He said further that the Ogonis would support the federal government to ensure the full implementation of the UNEP report and other pro-grammes to address the environmental challenges.In his woods, “I call on my people to give full support to the federal government as regards the implemen-tation of the UNEP report as they have shown the willingness to clean up the ogoniland.it is welcome development we look forward for the accualization of the UNEP report.” It could be recalled that the Minister of Environment Mrs Amina Mohammed accompanied by the ministers of state environment Mr Us-man Jibril and chief executives of key parastals linked sto the implementation of the UNEP report visited Rivers State and the Ogoni leaders stakeholders recently so as to facilitate the full im-plementation of the report

UNEP Report: MOSOP Warns Against Politicization

In light of last year’s approval of the work programme for work to

commence on the inland Voltaian Basin by the Ministry of Petroleum, the Chief Executive of Terra Energy and Technology, Mr. Dmitry Vilbaum met with personnel from the Ministry of Petroleum, Petroleum Commission and Ghana National Petroleum Cor-poration at the Ministry’s conference room annex to introduce and demon-strate Terra’s satellite-based Sub-Ter-rain Prospecting (STeP) technology.

In his presentation, Mr. Dmitry Vilbaum explained that the Sub-Ter-rain Prospecting (STeP) Technology is a proprietary, remote sensing and analytical technology which inter-prets and quantifies various natural phenomena which manifest at the surface using sophisticated algorithms and models.

According to him, such phenomena are directly linked to subsurface hy-drocarbon/mineral bearing geological features. Mr. Dmitry Vilbaum further explained that, “most of the data is acquired via satellite” he said. “STeP integrates tectonic, morphological,

structural, and spectral models which assess and determine the presence of structures/anomalies, on or offshore” he added.

According to Mr. Dmitry Vilbaum, Ter-ra’s methods are applied in early explora-tion stages, in uncharted areas, in difficult settings, in the face of complex geologi-cal conditions and/or after conventional methods fail to produce results. “The Terra Technology and services suite is a power-ful set of tools that increase exploration success rates, save time and cut costs” he emphasized.

The objective of any exploration venture

GHANA REPORT

is to find new volumes of hydrocar-bons at a low cost and in a short period of time. In line with this, Mr. Dmitry Vilbaum believes that the STeP study will answer most of the questions associated with the history of the basin’s geological development and oil & gas deposition mechanisms. “In addition, our survey will be able to delineate most, if not all, struc-tures and/or zones of hydrocarbon accumulation” he added.

Just after 5 years of oil produc-tion, Ghana has recorded significant achievements in the oil and gas industry. The Government is working assiduously to sustain exploration, development and production of the country’s endowed resources as well as ensuring increased national access to petroleum products. One major project which is undoubtedly the big-gest gas investment in the sub region is the USD 7 Billion OCTP Sankofa gas project. The Petroleum Minister, Hon. Emmanuel Armah-Kofi Buah, in his 2015 Meet-The-Press speech stated that, Government will contin-ue to make the industry vibrant and create jobs for the good people of Ghana. The Voltain Basin represents 40% of the country’s land mass.

The meeting was chaired by the Ministry’s Director of Petroleum, Mr. Lawrence Apaalse and the Deputy Director Upstream, Mr. George Men-sah Okley. The Terra Technology and services suite includes: STeP, NAGS, SVSL and SLEC. In the last 10 years, the technologies have been applied in over 100 oil and gas exploration areas ranging in size from 10 to 14,000 sq. km all around the world.


Terra Energy Introduces Satellite-Based STeP Technology in GhanaBy Gilbert Boyefio

Imagine that Nigeria’s oil wells dry up. Imagine that the tens of

thousands of litres of Gas supply from Nigeria to her West African neighbor, Ghana on daily basis ceases to work. Sure, that will have a huge ripple ef-fect on Ghana’s electricity supply and by extension its economy.

That is about what is happening already. Ghana’s Minister of Power (state), John Jinapor, heads of Volta River Authority (VRA) and Ghana Grid Company (GRIDCo) were in Ivo-ry Coast last week to negotiate with the country to begin to supply extra power to her to meet national demand. The reason is understandable. Ghana is currently experiencing electricity deficit created by the reduction in gas supply from Nigeria and shut down of FPSO Kwame Nkrumah.

While Nigeria is still battling with incessant or epileptic power supply, the situation is slightly different for Gha-

na. The good thing is that the trip is already yielding result for Ghana. Engineer Isaac Kirk Koffi, the Chief Executive Officer of VRA, said Ivory Coast expressed willing-ness to help Ghana at least for the next two weeks after the talks, according to Ghana’s TV3. “Over the weekend, they were able to give us enough and weekdays [during off peak hours] but reduce it at peak hours,” Koff said.

However, there were fears that the coun-try may soon be plunged into serious black out after GRIDCo announced the shutdown of the floating production storage and offloading (FPSO) at the Jubilee Fields and the damage to the West African gas pipe-lines in Nigeria. “We have made adequate preparations to buy crude oil.

We got almost a million barrels. We have discharged 300,000 barrels for our plants in Tema and we are on our way to discharge 400,000 barrels for our plants in Takoradi [and] the extra 200,000 will be discharged again in Tema,” Koffi said while dismissing fears.

Nigeria’s Fuel Crisis Creates Hardship for Ghana

The two countries had agreed on a daily gas supply of 120 million metric standard cubic feet (mmscf) of gas from N-Gas but the company is currently sup-plying an average of 30 mmscf.

The inability of Nigeria to supply agreed volume of gas to Ghana

via the West African Gas Pipeline prompted renewed calls for Ghana to seek alternative gas supply from suppliers in that country.

The two countries had agreed on a daily gas supply of 120 million metric standard cubic feet (mmscf) of gas from N-Gas but the company is currently supplying an average of 30 mmscf.

Ghana Grid Company (GRIDCo) announced that power supply to Ghanaian consumers will be affected for a few days following the vandalism of some pipelines of the West African Gas Pipeline Company (WAPCo) in Nigeria. As a result, gas supply from WAPCo has tumbled from 120 mmscf to 30 mmscf.

“If N-Gas is not giving us much of the gas, we should be able to negotiate with other suppliers in Nigeria and the agreement on the West African Gas Pipeline allows for third party access to the pipeline,” executive di-rector of the Africa Centre for Energy Policy (ACEP), Dr Mohammed Amin Adam, told Daily Graphic.

“So you can negotiate with other suppliers in Nigeria who can supply you through the same West African Gas Pipeline without breaking the law or breaching the contract, so Ghana should be looking at that option as

GHANA REPORT

Gas Supply from Nigeria Unreliable, Alternative Urgedwell.” He added.

The Chief Executive Officer of the VRA, Kirk Coffie, said Ivory Coast is willing to help and that over the weekend, they gave Ghana enough pow-er. He added that they will also supply power to Ghana weekdays during off peak periods.

“I was in Ivory Coast with the Deputy Minister of Power, Jinapor and the Chief Executive Of-ficer of GRIDCo to talk to them for some extra

supply. They were willing and over the weekend they are able to give us enough and weekdays off peak they are able to also give us, he said on Citi FM.

Touching on thermal plants, Mr. Coffie said adequate preparations have been made to buy crude oil, adding that the country has a million barrels of oil to be discharged to the various thermal plants to power it.

“We have made the adequate prepa-rations to buy crude oil…We got al-most a million barrels…We discharged 300,000 barrels for our plants in Tema and we are on our way to discharge 400,000 barrels in Takoradi. The extra 200 will be discharged again in Tema,” he said.


By Gilbert Boyefio

The Ghana Gas Company Limited (Gha-na Gas) has embarked on an operation

to secure its entire oil and gas infrastructure in the country against any terrorist attacks.The operation “If you see something, say something”, is expected to involved mem-bers of the host communities that houses Ghana Gas projects infrastructures to be actively involved in the security of the facil-ities by being vigilant, cautious, curious and report any unusual circumstances to the law enforcement agencies.In an address before closed door meeting with heads of security agencies at the At-uabo Gas Processing Plant, Dr. George Sipa Yankey, Chief Executive Officer, Ghana Gas, said he has directed the Community Relations Department and Community Liaison Officers in the project affected com-munities to draw up a plan of engagement with the 60 communities along the Right Of Way (ROW).“We should inculcate the culture of if you see something, say something into members of the community. I entreat staff and com-munity members to be security conscious since the security of the state is everyone’s business, he noted.As part of the security arrangement, a Ghana Gas management team led by the

CEO is to meet with the Ghana Air Force to outline measures on how to further strengthen the aerial surveil-lance of the gas infrastructure with the Z9 helicopters. The West African sub region has seen a number of terrorist attacks in recent times, with major attacks in Nigeria, Niger and Mali. Burkina Faso, Ghana’s neighbor to the north, suffered an attack in January this year, which left thirty people dead and several injured.In line with these concerns and enhance the protection of the nation’s premier gas infrastructure, the Ghana Gas met with key heads of security to assess threat levels and map out plans and strategies to enhance security. The meeting was also expected to dis-cuss plans to enhance coordination and sharing of security information and strategies among the various security institutions within the project affected districts.This will create a platform for sharing information on potential and reported disturbances to the gas infrastructure, including the 111km right of way from Ellembele to the Shama Takoradi Metropolitan Assembly and the 58km offshore pipelines.

Ghana Gas Embarks On Operation “If You See Something, Say Something” -To Protect Gas Infrastructure

DRILLING/ PRODUCTION/ EXPLORATION

Solo Oil has announced that further to the agreements previously

announced with Aminex to acquire a further interest in the Kiliwani North Development Licence (‘KNDL’) Solo has now executed a Sale and Purchase Agreement (‘SPA’) for the acquisi-tion of a 3.825% interest in Kiliwani North Development Licence (‘KNDL’) to Solo Oil for a total cash consider-ation of US$2.16 million.

Under the terms of the SPA Solo’s interest will increase through three payment tranches to Aminex, linked to project milestone, for the total agreed cash consideration:

Initial investment of US$566,802 for an additional 1% interest on signa-ture of the SPA, increasing Solo’s total interest from 6.175% to 7.175%

A second investment of US$708,502 for a further 1.25% interest within 15 days of the first US dollar payment being received for gas from Kiliwani North-1 (‘KN-1’). Solo’s total interest will increase to 8.425%

A third investment for the balance of US$892,712 for an additional and final 1.575% interest within 15 days of the commercial operations date being declared, taking Solo’s total and final interest to 10%.

If any payment is missed then that payment option and only that option will be automatically cancelled. Payment of the second and third investments will require further funding from cash flow or otherwise to be arranged by Solo.

Following full payment of the consider-ation, Solo’s interest will increase from its current 6.175% to a 10% interest in KNDL. As announced on 11 February 2016, the transaction represents the part exercise of its pre-existing option to acquire a further 6.175% interest. The remaining entitle-ment under the option agreement has now expired.

The KN-1 well, which is now ready to begin production, has been ascribed gross contingent resources (2C) of gross 28 billion cubic feet by LR Senergy and the Company expects to book reserves from this well by the year-end. Gas from KN-1 will be sold to the Tanzania Petroleum Development Corporation (‘TPDC’) under a gas sales agreement (‘GSA’) at the wellhead for an agreed price of US$3.00 mmBTU (approx. US$3.07 per mscf), payable in US dollars. The gas price is not linked to any com-modity price so is unaffected by current commodity market conditions.

Gas will be processed at the new Songo Songo Island gas plant and will ultimate-ly be transported by pipeline to Dar es

Salaam, where it will be sold into the local Tanzanian market.

Neil Ritson, Solo’s Chairman, commented saying: ‘Solo is delighted to increase its exposure to the KNDL project with commencement of pro-duction imminent. The project offers a revenue stream that will increase through the commissioning process and into commercial production under the GSA which has take-or-pay provisions and is paid in US Dollars guaranteed by a consortium of banks. By linking the acquisition of our additional inter-est to project milestones we have been able to further de-risk the investment.’

Current participants in the Kiliwani North Development Licence, following TPDC back in, are: Ndovu Resources Ltd (Aminex) 55.575% (operator), RAK Gas LLC 23.75%, Solo Oil plc 6.175%, Bounty Oil & Gas NL 9.5% and TPDC 5%. On completion of the payments envisaged by the SPA Aminex will hold 51.75% and Solo will hold 10%.


Solo Oil Signs SPA for Kiliwani North, Tanzania

MX Oil updated its divestment of its investment in the Aje field

offshore Nigeria. As reported earlier in the month, GEC Petroleum Develop-ment Co. (GPDC) is in the process of finalizing its funding to cover both the payments to secure its option and the initial payment due on exercise of the option to acquire MX’s investment in

NIGERIA: MX Oil Allows More Aje Financing Time

field.While this funding is taking longer

than expected, GPDC has informed the company that it is committed to this transaction and expects to have funds available in the coming days. Despite the delay, MX continues to believe that selling the asset to GPDC is an attractive option for its shareholders as the level of pro-

ceeds envisaged equates to a significant premium over the company’s current market capitalization.

Due to the company’s belief that sell-ing the asset is the most attractive op-tion, it is prepared to give GPDC some additional time to put its financing in place. Notwithstanding this delay, the company believes that its invest-ment continues to become increasingly more attractive now that development funding up to first oil has been com-pleted and expected oil production is imminent.

Mr Bello Rabiu-Babura, Upstream Chief Operating Officer, Nigeri-

an National Petroleum Corporation (NNPC), says the Kaduna Refining and Petrochemical Company (KRPC) will resume production in two weeks’ time.

Rabiu-Babura gave the indication while fielding questions from Ener-gy Correspondents, shortly after he inspected facilities at the Kaduna Refining and Petrochemical Company (KRPC) on Saturday in Kaduna.

He said that all the three Refineries, Warri, Port Harcourt and Kaduna would resume refining crude oil for local consumption by the end of April to address the current scarcity.

“The Kaduna Refinery will resume in two weeks’ time as part of efforts to end the lingering fuel scarcity being experienced in the country,“ he said. According to him, local crude refining at the KRPC would address the scarci-ty being experienced, especially in the Northern region.

“With what I have seen and the current effort of the Minister of State for Petroleum and the NNPC, all necessary arrangements are being put in place to ensure that the company resumes production.

“We are optimistic that in the next two weeks the refinery will resume production, and by the end of April all the other three refineries in the country will resume full production,“ he added.

Rabiu-Babura, who doubles as the Group Executive Director (GED) Up-

stream, said that the Federal Government and the NNPC in particular were working round the clock to end the fuel scarcity.

The official expressed satisfaction with

the various ongoing facility upgrades at the KRPC capable of producing 110 barrels of fuel per day at full capacity. The official commended the company’s management for the work being executed at the site.

He said the NNPC was also col-laborating with security agencies to address pipelines vandalism. “The cor-poration is working hand in hand with the Defence Headquarters and other agencies to ensure adequate security is provided at all pipelines.

“For the past 10 years our refineries have not been operating near opti-mum level. We can only put the entire operation at 22 per cent,“ he said. Rabiu-Babura, however, assured of the present administration’s deter-mination to provide security at the facilities to boost crude refining for local consumption.

*Vanguard


Kaduna Refinery to Resume Fuel Production within 2 Weeks, Says Official

Swiss African Oil Company (a subsidiary of Swiss African

Petroleum AG) and PET Volta Investments have been awarded a new exploration and production licence for the Keta Delta block, located in the Volta Region of Ghana.

The acquisition makes Swiss Af-rican Oil and PET Volta the first to explore for oil onshore Ghana.

The Keta Delta block licence was awarded following ratification by the Parliament of the Repub-lic of Ghana of a joint venture between the Government of Ghana, the Ghana National Petroleum Corporation, Swiss African Oil Company and PET Volta Investments.

The new block covers an area of 3,000

sq kms and it is envisaged that the commencement of operations will pro-vide employment and stimulate local development of the region.

• GhanaWeb

Swiss African Oil & Pet Volta Awarded Exploration Licence for Keta Delta Block, In the Volta Region of Ghana

DRILLING/ PRODUCTION/ EXPLORATION

* Kaduna refinery.

By Jolly Adjuwe – Port arcourt

The chairman, Association Of Nigerian Licensed Customs

Agents (ANLCA) River State Branch, Mr Knigsley Offor has said that any clearing agent also does not do comply with the rules and regulation guard-ing the clearing of goods at the port would risk seizure of his goods.

According to him “Agents must do the right thing, pay the correct custom and not to cut conners by this customs are bound to comply with agents so that their goods will be for-warded to their owners without delay or seizure”

Mr kingsley offor, Rivers State ANLCA chairman made these obser-vations in an exclusive interview with orients energy review magazine co re-spondent in port Harcourt command-er the war against corrupt practices at the port in which the controller at the ONNE port is waging saying that, the controller has strategized for effective service delivery and will not spare any person caught in the act of cutting conners”;

He urged all stakeholders to desist from any act likely to run foul of the federal government stance to achieve zero tolerance on corruption at the ports in his word, “ I reaffirmed my unalloyed support to the onne sea port command under the vibrant present controller in his quest to get rid of unwholesome practices at the ports”.

Be PAAR Compliant, Shun Sharp Practices – Shipping Agents Urged

Reacting on how to help his members when they are in trouble, Mr Kingsley Offor said “ My administration is poised to do everything that will be benefitted to the agents but will never be part to any wrong doing. I will always protect and improve their welfare and the disinterest of members who genuinely do the right thing needed in cargo documentation and clearance of goods at the port.

Any agent who circumvent or falsifies smooth cargo documentation and clearance will not be covered by the association speak-ing on the reasons why some good are usual-ly delayed or seized? Mr Kingsley Offor was of the view that ANLCA members must be prearrival assessment report (PAAR) compliance and to the needful pointing out “ I appeal to all stakeholders, especially the customs brokers to avoid malpractices. The wind of change is blowing virtually in all sectors of the economy and it requires every right thinking human being to avoid corruption of the system.

In a related development the federal Gov-ernment has been called upon to take deci-sive action on some operational challenges being experienced at the Port.

Chief Alex Anuobi the managing Direc-tor Zenife (NIG) LTD made these assertion in exclusive interview with orient review magazine in port Harcourt said that, “there is a lot of difficulties being experienced by clearing agents the federal government should try and helped us to stop this painful operational challenges”

Chief Alex faulted the decision of the federal government on restrictions of trans-fer of money to abroad for business transac-

LOGISTICS/ MARITIME


tion as it affects importation of goods in to the country according to him “I want the federal govt to reconsider its decision and encourage importers on their international transactions the central bank should role out policies that would encourage business men to do their transactions with little or no interferance”.

He condemned the standard orga-nization of Nigeria (SON) on the way it issues debit notes thereby causing much taxes and delays. in his words, “SON is not a revenue generating agency, SON is giving us too much problem. Even when your goods are captured in PAAR, SON will still give you D/N to pay. The taxes are too much, SON collects money for each container, and it is bad.”

He stressed, “I urge SON to make the clearance of goods easy by avoiding unnecessary delays in docu-mentation and payments. The delay has caused a great financial upset, in terms of paying unbudgeted demur-rage. SON should have a platform, where one can get this debit note and pay immediately and it should be done in one day insisted of four days that is being used now.”

Operatives of the Eastern Marine Command, Nigerian Customs

Service (NCS) have impounded an oil tanker, MT AFRICAN BEAUTY, for allegedly operating illegally in the nation’s waters.The ship was impounded while operating at the Nigerian National Petroleum Corporation (NNPC) jetty in Warri, Delta State.

The Custom Area Controller, Eastern Marine Command, Comptroller Usman Kankara Bello, said that the vessel was found operating with expired Temporary Importation (TI) Permit at the time it was impounded. He noted that it was illegal for any shipping company to allow its vessel to

operate in Nigerian waters without a valid import permit, adding that the permit is given to ship owners by NCS to operate in Nigeria within a specific period of time.According to him, the permit is given under bond granted by Nigerian banks and that upon expiration, the vessel is expected to return to its country of origin. “However, a window period is given to the owners to allow it renew its document if it intends to continue operating within the nation’s

water. In this case a fresh TI is issued for extension. “But what we found out is that some vessel owners keep their operations running without recourse to the rules. In such instance, such vessel is viewed as operating illegally and we will no longer condone such act. “In the case of MT AFRICAN BEAUTY, we dis-covered that there was no conscious effort by its management towards re-newing the document. We therefore, impounded the vessel,” Bello said.He also warned ship owners and tankers operating within Nigerian waters to comply with the extant laws and guidelines of the NCS.

Customs Impounds Ship over Illegal Operation

LOGISTICS/ MARITIME

Managing Director of the Nigerian Ports Authority

(NPA) Mallam Habib Abdullahi has officially flagged off enforcement of the implementation of minimum standard for haulage trucks doing business at the ports in Lagos.

No fewer than 2,000 trucks have complied with the minimum stan-dards.

Speaking at the flag off ceremony, at the Lagos Port Complex, Apapa gate, Abdullahi stated that the pri-mary objective of the exercise was to ensure safety and security of port users, entrench accountability and public safety.

Each truck was asked to pay the sum of N10, 000 as vehicle entry permit registration fee. Speaking on the protest against the N10, 000 vehicle entry permit fee by a section of truck owners, Abdullahi urged them to fall in line, saying that the money should have been more.

He said that the standardisa-tion of trucks is part of the core responsibilities of NPA by ensuring that trucks accessing the ports meet acceptable international standards.

“For a very long time we have been experiencing containers falling down and killing innocent citizens, this is of great concerns to us and we feel that to go along with international standard, it is our responsibility to ensure that all trucks getting into the port are maintained and secured as done in other countries. The fact that people are paying N10,000 per annum is to ensure the administrative cost and we are even subsidising it,” Abdul-lahi said.

He urged truck operators to report cases of extortion by any security official at port gates to his office. “Get the person that ever extort you and get the name tags of the personnel and come to me,” he said.

Earlier in his welcome address, General Manager, Western Ports of NPA, Chief Michael Ajayi noted that so far, over 2,000 trucks includ-ing those belonging to fleet owners, terminal operators, such as GDNL, a subsidiary of Dangote Group, ENL and flour Mills of Nigeria and

others have keyed into the exercise.He said despite the resistance to the

payment of N10,000 by some truck as-sociations, NPA has received tremendous encouragement from corporate indepen-dent fleet owners who have done their certification and paid the required fee.

‎ President of Corporate Indepen-dent Fleet Truck Owners Association, Mrs. Folake George pledged the cooper-ation of the group to NPA even as she appealed to other associations who were yet to embrace the exercise to do so. “We are collaborating with NPA, we believe in their dream for minimum standard, we are in support of the N10, 000 levy per annum, we are in alliance with them, we have registered our trucks that have met the minimum standard. We are appeal-


NPA Registers 2,000 Trucks As Abdullahi Flags Off Minimum Standards Enforcement

The new Director General of Nigerian Maritime Administration and Safety

Agency (NIMASA), Dr. Dakuku Peterside has reiterated the agency’s commitment to ensuring that Nigeria becomes the hub of maritime activities in Africa, thereby mak-ing it a reference point in the continent.

Speaking when he officially took over from the former Acting Director General, Haruna Jauro at the headquarters of the Agency in Lagos, Peterside observed that NIMASA had competent personnel to drive the mandate of the agency.

He also called on Jauro to always avail

Peterside Vows to Make Nigeria Hub of Maritime Activities in Africa

the agency of his experience and expertise whenever the need arises. He said, “We will harness the vast poten-tials available in the agency in order to make Nigeria a maritime hub in the West and Central Africa sub-region by implementing all international laws and conventions, increased enforce-ment of our mandate and build the necessary capacity for indigenous operators leveraging on the Cabotage Act.”

He described the former acting Director General as an ambassador of NIMASA. In his comments, Jauro expressed gratitude to God and the Federal Government for giving him the opportunity to serve the nation in the last three and half years and that he is ready to work for the success of the present management anytime his services are required.

Jauro enjoined him to study the NIMASA Act to guide him. He also noted that the Cabotage Act should be reviewed with a view to impacting positively on the indigenous operators.

It will be recalled that President Muhammadu Buhari appointed Peter-side as the Director General NIMASA on March 10.

ing to the other associations to fall in line, they are kicking against the N10, 000, but the fact is that we don’t want a porous gate,” she said.

She said that her members who have complied have all been given the NPA stickers, with their trucks are going in and out of the ports undisturbed.


Customs Impounds Ship over Illegal Operation

The Nigerian Navy has revealed that it is readiness to open up its dockyard for use by stakeholders in the maritime industry for maximum utilisation.

The Director of Naval Infor-mation, Commodore Chris Ezeko-be, made the disclosure during a courtesy visit to the News Agency of Nigeria (NAN) in Lagos. “There are certain things the dockyard has that are yet to be keyed into by the Nigerian public because the capacity of the dockyard is beyond the Navy itself,” he said.

Ezekobe said it was based on this thrust that the Chief of Naval Staff, Vice Adm. Ibok-Ete Ibas, expressed the Navy’s determination to ensure maximum utilisation of the facility.

“We have a foundry plant, the gal-vanizing plant and various precision workshops within the naval dock-yard. We have a carpentry workshop so the dockyard is a big concept.

“It’s good that our founding fathers thought about it but we must engage beyond the navy as well as other maritime stakeholders to key

into the dockyard so that it can be fully utilised,” the naval spokesman said.

According to him, the dockyard has built a seaward defense boat, Nigerian Navy Ship (NNS) Andoni, while the second seaward defense boat, a 39-metre boat, is under construction.

“Various levels of repairs are ongoing at the dockyard including NNS Yola and NNS Brass, which are being refitted,” he said.

Ezekobe said that the dockyard was con-tributing its quota to enhancing the Navy’s operational efficiency and had the capacity to create jobs for young Nigerians as well as

Navy to Open Up Dockyard for Maximum Utilisation

LOGISTICS/ MARITIME

Operatives of the Eastern Marine Command, Nigerian

Customs Service (NCS) have im-pounded an oil tanker, MT AFRICAN BEAUTY, for allegedly operating illegally in the nation’s waters.

The ship was impounded while operating at the Nigerian National Petroleum Corporation (NNPC) jetty in Warri, Delta State.

The Custom Area Controller, Eastern Marine Command, Comptrol-ler Usman Kankara Bello, said that the vessel was found operating with expired Temporary Importation (TI) Permit at the time it was impounded. He noted that it was illegal for any shipping company to allow its vessel

to operate in Nigerian waters without a valid import permit, adding that the permit is given to ship owners by NCS to operate in Nigeria within a specific period of time.

According to him, the permit is given under bond granted by Nigerian banks and that upon expiration, the vessel is expected to return to its country of origin. “Howev-er, a window period is given to the owners to allow it renew its document if it intends to continue operating within the nation’s water. In this case a fresh TI is issued for extension.

“But what we found out is that some vessel owners keep their operations running without recourse to the rules. In such instance, such vessel is viewed as operating illegally and we will no longer condone such

act. “In the case of MT AFRICAN BEAUTY, we discovered that there was no conscious effort by its manage-ment towards renewing the document. We therefore, impounded the vessel,” Bello said.

He also warned ship owners and tankers operating within Nigerian waters to comply with the extant laws and guidelines of the NCS.

generate revenue.“The only thing is that the capacity

of the dockyard itself is, so to speak, underutilised because the dockyard is a state-of-the-art dockyard,” he said.

He also disclosed that President Muhammadu Buhari has approved the establishment of a naval command post in the Lake Chad region in a bid to strengthen the fight against insur-gency in the Northeast.

“There is a presidential directive to set up a command post in the Lake Chad Region and that is ongoing,” he said.

According to him, naval personnel for the command post are currently undergoing training in the North East and will be deployed once it becomes operational.

Ezekobe said that the navy had three categories of forces working in the Northeast.

He said that the Navy had acquired 30 repellent boats and was expecting 50 more by the end of May to enhance security in the Niger Delta Region. According to him, this will make it difficult for the criminals to operate in that domain.

GAS

The Shell Petroleum Development Company of Nigeria Limited

Joint Venture on Monday announced an increase in its gas production from the Agbada field in the eastern Niger Delta.

The company, in a statement signed by its Corporate Media Relations Manager, Precious Okolobo, said the increased production was in support of the Federal Government’s aspira-tion of raising domestic gas produc-tion for manufacturing and power generation.

The SPDC said some 10 million standard cubic feet of non-associat-ed gas per day was produced from the Agbada Early Gas Production Facility into the eastern domestic gas network on March 8, 2016, and had already ramped up to 20MMscf/d of gas, with 1,500 barrels per day of oil.

The company explained that the additional gas would further boost

the availability of the product on the eastern domestic gas network and would be available to enhance power generation by over 150MW.

According to the statement, a peak production of 40MMscf/d is expected to be achieved in addition to oil production of about 2,500 b/d. The milestone comes as SPDC JV’s Afam VI, with 650 megawatts capacity, continues to deliver power to the national grid.

The General Manager Projects, SPDC, Toyin Olagunju, was quoted to have said, “We’re pleased to support efforts towards increasing gas supply for manufacturers and power plants. We’re also pleased that the project was delivered in record time – 14 months from initiation to first gas – within budget and most importantly, safely.

“We acknowledge the support of NAPIMS and other JV partners, without which the milestone would not have been possible.”

It said the early gas project was initiated


in January 2015 pending the comple-tion of the main Agbada non-associat-ed gas plant.

According to the statement, SPDC pioneered the production and delivery of gas to domestic consumers and export markets. Early this year, SPDC signed a gas sale agreement with the Bayelsa State Government under which it will sell gas to the Bayelsa Development and Investment Corpo-ration for the purpose of power supply to the Kolo Creek Gas Turbine.

Shell is the only international oil and gas company to have set up a gas distribution business in the country through the Shell Nigeria Gas, the statement said.

Shell Increases Gas Production to Boost Power Generation

Managing Director of Nigeria LNG Limited, NLNG, Mr. Babs

Omotowa, says the rapid oil price decline should not deter strategic multi-billion dollar investments in oil and gas projects in Nigeria and

Africa, maintaining that there could be no better time for such investments.

Citing the example of the NLNG, he said final investment decision for the project was taken on an oil price level of $20.

He said: “It is on record for my company,

NLNG, that final investment decision was taken on an oil price level of $20 and the cost of steel is now at the same level it was 13 years ago when Train 3 FID was taken.

“The same applies to the cost of iron. Indeed, with the cyclic move-ment of oil prices, there is no better time to invest in oil and gas projects as construction periods take the best part of 4-5 years and it is the forecast oil price during production phase that goes into the economics, but the lower prices for input materials and lower construction costs now means that now is the better time to attract needed foreign and local investments and build the oil and gas projects that will enable us solve Africa’s energy crisis and bring Africa from darkness to light”.

Omotowa, in a keynote address at the recent sixth African Petroleum Producers Association Conference and Exhibition in Abuja, said Africa had huge human and natural resourc-es which have remained unutilised.

NLNG’s FID taken on $20/b oil price –Omotowa

*Shell operated Kolo Creek gas plant.

* Babs Omotowa, Managing Director NLNG.

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