A Vanguard Monthly Review Of The Energy Industry Nigeria’s dwindling oil fortune: Angola’s gain CONTINUES ON PAGE 4 UPDATES Page 10 CONTINUES ON PAGE 6 JUNE 2, 2009 VOL 002 …Oil output drops to 1.3m b/d ExxonMobil's financial strength, strategy build value for investors xxon Mobil Corporation's Efinancial strength and industry-leading performance continues to provide shareholders with superior value while delivering energy to fuel economic growth and protecting the environment, the corporation said today at its Annual Meeting of Shareholders. "Despite the volatile economic times, ExxonMobil remains committed to investing in integrated solutions to the energy challenge," said Rex W. Tillerson, chairman and chief executive officer. "Our disciplined and consistent performance enables us to invest through the economic cycle and develop new energy supplies while working to improve efficiency and reduce greenhouse gas emissions." Tillerson said the company's record performance in 2008 has benefited millions of shareholders who hold ExxonMobil shares either directly or indirectly through their pension, insurance and mutual funds. Over the past five years, the corporation's dividends and share-buyback programs have put approximately $150 billion into the hands of millions of shareholders. Nov Dec Jan Feb Mar Apr 100% 90% 80% 70% 60% Drillship Jackup Semisub Shell operated Parker rig Shell shuffles senior management structure hell has announced a series of Schanges to senior management roles and We are committed to projects in Nigeria Page 22 Curse of oil! Gbaramatu people flee as JTF chase militants
Transcript
A Vanguard Monthly Review Of The Energy Industry
Nigeria’s dwindling oil fortune:
Angola’s gain
CONTINUES ON PAGE 4
UPDATES
Page 10
CONTINUES ON PAGE 6
JUNE 2, 2009VOL 002
…Oil output drops to 1.3m b/d
ExxonMob i l ' s f i n anc i a l strength, strategy build value for investors
xxon Mobil Corporation's Ef inanc ia l s t r eng th and industry-leading performance continues to provide shareholders with superior value while delivering energy to fuel economic growth and protecting the environment, the corporation said today at its Annual Meeting of Shareholders.
"Despite the volatile economic times, ExxonMobil remains committed to invest ing in integrated solutions to the energy challenge," said Rex W. Tillerson, chairman and chief executive officer.
"Our disciplined and consistent performance enables us to invest through the economic cycle and develop new energy supplies while working to improve efficiency and reduce greenhouse gas emissions."
Tillerson said the company's record performance in 2008 has benefited millions of shareholders who hold ExxonMobil shares either directly or indirectly through their pension, insurance and mutual funds. Over the past five years, the corporation's dividends and share-buyback programs have put approximately $150 billion into the hands of millions of shareholders.
Nov Dec Jan Feb Mar Apr
100%
90%
80%
70%
60%
Drillship Jackup Semisub
Shell operated Parker rig
Shell shuffles senior management structure
hell has announced a series of Sc h a n g e s t o s e n i o r m a n a g e m e n t r o l e s a n d
We are committed to projects in Nigeria Page 22
Curse of oil! Gbaramatu people flee as JTF chase militants
OIL
FOCUS
LABOUR
FINANCING
POWER
Contents
Sweet Crude is a publication of Vanguard Media Limited
THE TEAMEDITOR
Hector IGBIKIOWUBO
CORRESPONDENTS
Printed and Published byVanguard Media Limited.Vanguard Avenue, Kirikiri
Canal, P.M.B. 1007,Apapa.
Internet:www.vanguardngr.com
All correspondence: P.M.B 1007, Apapa, Lagos.
6
1010
1212
1414
1515
1919
l y myr a ,agued b a iad of ch llenges it o tt e b
was nly a ma er of tim efore the PN n g in ry rt
igeria oil and as dust sta ed m a in nhe orrhaging nd los g pote tial t to d fr inves ments other oil an gas ontiera . t s dn tions In his i sue, Sweet Cru e f t on ia s aocuses a tention Niger ’s los nd ol .Ang a’s gainh ys een m er
T e last 30 da has b a bu py roll co e i enaster rid in the Niger an ergy st - ar ti
indu ry p ticipa on in the just cl T n t con uded O C i Hous on, TX, USAw si nf over
here the per stent co usion in o he ongo g ref rms in t oil and gas u s a ied la e ind stry wa mplif , esca tion of thecu ch es th ig elts rity alleng in e N er D a g o n t- o t,leadin t i creased shu in utpu the ti o t e t cl par cipati n a th jus con uded 153rd x r o d n r o f c nOPEC e t a r i a y c n eren e i V n s i e cien a, Au tr a and th ountry’s o s n p w r e e
w r e i n g o e g n r a t i o n ,a s tr o a tr nsmis ion and dis ibuti n, mongot w rS eet C ude h m n t
hers. as ade a effor co a o h an m mto ver ll f t ese d uch ore.ve l p verWe ha a so ram ed up our co age to n ener u gh di clude gy Ins rance, Frei t an co h o gaincreased verage of t e il and s t m ies in an effhos co munit ort to serve you ett b er. dE itor
GROUP BUSINESS EDITOROmoh GABRIEL
Oil reforms: Operators have been carried along
DESIGN/PAGE LAYOUTFrancis AYO
Johnbull OMOREBEEJide BABATUNDE
We are committed to projects in Nigeria
Labour expresses concern over oil worker’s safety
Fuel: Deregulation only way out saysemployers
NEPA 11, others sabotage PHCN - Labour
COMMUNITY DEVELOPMENTCurse of oil! Gbaramatu people flee asJTF chase militants
2
Editor South-SouthEmma AMAIZE
Victor AHIUMA-YOUNGIfeanyi UGWUADUGodfrey BIVBERE
INSURANCE1313First Energy Insurance Consortium flops
FREIGHT1616Million lost to bunkering operations
GAS1717Gas investment: stakeholders set agendafor govt.
INDICATIONS are that Nigeria 's dwindling oil fortune appear to be Angola's gain with multinational operators and oil service
companies shifting focus from the country to its southern neighbour owing to funding constraints, an u n e n d i n g r e f o r m a g e n d a superintended by government personnel who appear impervious to the concerns of multinational oil partners, the bureaucratic bottleneck between project conception and final award and security challenges.
Meanwhile, crude oil output has dropped to an all time low of 1.3 million barrels per day owing to the military onslaught launched against militant activities in the Niger Delta, after MV Spirit, a petroleum products vessel was hijacked with 15 Philippine nationals on board and the death of a Lieutenant Colonel and some other military personnel.
Sweet Crude checks revealed that funding proposed oil and gas projects have always been a challenge for Nigerian upstream oil and gas industry operators owing to government's inability to meet its funding obligations.
For this fiscal year, the major upstream joint venture partners including Shell, Mobil and Chevron, Total and Agip had to advance government over $5 billion under the Modified Carry Arrangement (MCA), to enable it meet its funding obligations. In one of the MCAs, the Shell Petroleum Development Company signed an MCA that would finance NNPC's joint venture cash call obligation up to the tune of $3.1billion dollars, to cover outstanding shortfall in government's equity contributions in the 2008 o p e r a t i o n s o f t h e NNPC/SPDC/NAOC/EPNL JV.
While commenting on the development in an interview she granted Shell World Nigeria, Ann Pickard, the company's Executive Vice President in charge of Exploration and Production, Africa said the SPDC has been starved of funds for too long. “Shell is the only IOC to have offered a bridge loan to the country but those are only interim measures to provide limited funding.”
Similar arrangements apply to the Chevron and Mobil joint ventures with the state run Nigeria National Petroleum Corporation (NNPC). Although the expectation is that the oil industry reform agenda would address the funding constraints, this remains to be seen. Perhaps the inability of the joint venture operators to meet any of the gas flare-out targets set by government and the authority's obvious impotence to deal with defaults underscores in more e loquent te rms the funding
constraints and government's culpability.
Oil Reform Agenda:Sweet Crude gathered that owing to government's inability to carry the multinational operators along in its reform agenda, discussions are ongoing among them to discontinue investments in the country for the next five years and focus attention on emerging crude oil and gas exploration and production frontiers including Angola, Ghana and other countries where the climate is conducive, while waiting on the Federal Government to explore whatever alternatives are open to it. C h e c k s r e v e a l e d t h a t t h e multinationals are particularly worried that most of what they know of the ongoing reform agenda is limited to that which they glean from newspaper reports.
“I can assure you that there is serious discussion in this regard ongoing at the very topmost level of the industry and the outcome could be very bad for the country.
It would appear our countrymen have a knack for picking on the right fights at the wrong moment. How can you talk about reviewing existing contracts, freely entered into by the country at a time when crude oil prices are so low and you cannot guarantee security in the Niger Delta where kidnapping and vandalism has shut in over one million barrels of oil
per day.?” An industry operator who pleaded anonymity queried.
“Today, Nigeria has become Angola's number one advocate, as we draw comparison from a nation which came to Nigeria to learn how to follow in our footsteps and become an industrial nation with focused objectives and targets.
Angola attracts more investments, have more projects being developed and are giving investors a better environment to operate. They base this on a more stable and firm policy of local content and they work with their partners (Oil companies, contractors, and service providers), they do what they say and don't waste time planning implementation of reforms for 9 years.
Nigeria has become the joke, the pompous and arrogant nation who dictates its terms and has little to show for it. We are on the brink of further going down an unrecoverable slide that will see us loose our jobs, loose our status, and credibility,” the operator said.
He noted that Nigeria was the seventh largest crude oil producer with volumes that could easily be replaced from other sources, noting that it would be foolhardy for government to think the country's output volume was indispensable. The operator also noted that talks about resorting to China to mine oil leases were at best infantile, adding “China's technology is at least 50
years behind that of the West. Nigeria needs countries with muscle and not those who also look up to the West for technological intervention”.
The Oil Producers Trade Section (OPTS) of the Lagos Chamber of Commerce and industry, including multinational and indigenous oil and gas exploration and production companies had raised concerns over the reforms and its implications for the sanctity of existing contracts, incorporation of the Joint Ventures, among other issues.
When confronted with the thconcerns of the OPTS at the 4 OPEC
international seminar in Vienna, Austria Dr. Rilwanu Lukman, Nigeria's minister of Petroleum Resources dismissed it outright, noting that the country was within its rights to review existing contracts. Same sentiments had been expressed by members of the Oil and Gas Industry Committee (OGIC) at different forums.
Ann Pickard, the Executive Vice President of Shell in charge of Exploration and Production, Africa had also alluded to concerns about the ongoing reform exercise at different forum, urging government to clarify the implications of the reforms on the sanctity of existing contracts. Also speaking during an interview session in Houston, Texas,
Project/FieldOML/OPL Companies (*=Operator) Equity% Project Status/Notes water/depth Start up
Nigerian Agip Exploration Ltd (NAF)Nigerian Petroleum Development Co. Ltd.Svenska Petroleum AB
OPL244
60.0010.0030.00
2,500
CHOTA/BOLIA OML131
Conoco Exploration & Production Nigeria LtdEsso Exploration & Production Nigeria (Benue) LtdMedal Oil Nigeria Ltd.
47.5047.505.00
Conoco looking to divestField straddles SNEPCO’s BOLIA OML 135
1,000
OPL257
Chevron Texaco Deepwater “E” LtdHeritage Oil & Gas (Nigeria) Ltd.Sasol Exploration and Production Nigeria Ltd.Total E&P Nigeria Ltd (TEPNG)
48.6010.00
5.4036.00
Exploration. 3D carried out waiting interpretation 1,500
ERHABOSI
OML133
Essp Exploration and Production Nigeria Ltd., (EENL)Shell Nigeria E&P Co. Ltd. (SNEPCO)
56.2543.75
OperationalMainly gas (5 trillion scf) NNPC uncertain at commercially and plans for a FPSO. No Gas Master Plan.Tie back to Erha FPSO. P/Q Feb 2009; ITT June 2009& Commercial 1st Qtr. 2010
Esso E & P Nigeria (Deepwater West) Ltd.Chevron Nigeria Deepwater B LtdPhilips Deepwater Exploration Nigeria Ltd.Sasol Exploration and Production Nigeria LtdSvenska Petroleum AB
20.0020.0015.0020.005.00
20.00
Discussions under way for early development. Delay dueto number of partners involved but progress being made. 1,200
OPL21
KNOC ConsortiumEquator ExplorationTulip Energy Resources
60.0030.0010.00
*FGN rescineded KNOC’s right due to lack of work on promised infrastructure projects. Likely to go to ONGCwho lost out to KNOC in Bid Round 2005 as KNOC hadpreferential rights.
2,0000
NIGERIA DEEP WATER PROJECTS 2009+
It would appear our countrymen have a
knack for picking on the right fights at
the wrong moment. How can you talk about reviewing
existing contracts, freely entered into by the country at a time when crude oil
prices are so low and you cannot
guarantee security in the Niger Delta where kidnapping and vandalism has
shut in over one million barrels of oil
per day.?
CONTINUES FROM PAGE 5
up in Nigeria are flourishing in Angola which has provided them with an environment conducive for sustainable investments, increased employment and developed the economy, firmly establisging Angola as the oil and gas hub in West Africa. Security challenges:'War in the creeks', 'Carnage', 'Thousands flee to Warri', 'JTF pounds Okerenkoko, Opuedebubor', 'Illegal refineries destroyed', 'Government defends military action'. These are some of the headlines that have assailed Nigerians in the last few weeks, underscoring in more eloquent terms the degree of insecurity in the Niger Delta which accounts for over 95 per cent of Nigeria 's crude oi l production. At press time, Sweet Crude checks revealed that shut in volume had risen to over 1.3 million barrels owing to the recent military onslaught against militants' activities in the area.
Last week, the Movement for the Emancipation of Niger Delta said it had sabotaged two oil and gas pipelines near Escravos which supply the Kaduna refinery in northern Nigeria feedstock. MEND said it had sabotaged two oil and gas pipelines near to Escravos which supply the 110,000 barrels per day (bpd) Kaduna refinery in northern Nigeria, shut down for maintenance in November. The group said it had b e g u n n i b b l i n g a t t h e o i l infrastructure, adding that two major trunk pipe and gas lines which were recently repaired have been blown up in retaliation for of unprovoked attacks on hapless civilians. There were also reports of an explosion at a manifold operated by Shel l Petroleum Development Company (SPDC) in Bayelsa state. However, when contacted, Shell said it was checking but had no immediate confirmation.
Further checks revealed that the military's use of helicopter gun-ships in recent days had triggered a "mass evacuation" of villagers and calls for restraint by the security forces. Amnesty International had also a sked bo th s i de s t o a l l ow humanitarian access to those displaced.
"There is no doubt that there are casualties from the current clashes who need urgent medical attention and there are thousands more who have fled their villages," three local rights groups said in a joint statement. Dozens of displaced villagers were sited sheltering in Ogbe-Ijoh hospital, near Warri.
Further checks revealed that Chevron had shut down its operations in the Western Niger delta and evacuated staff. However, a newswire service disclosed the company had resumed oil transport on one of its pipelines in Nigeria, which was damaged in March. The Makaraba-Utonana pipeline in the Niger Delta was attacked on 13 March, which led to a shut in of 11,500 barrels per day of crude oil.
"Pipeline repairs have been completed and the facility resumed production in April," a Chevron spokesman disclosed. Efforts to clarify this information proved abortive at the time of filing this report as no staff of the External Relations department could be reached.
Sonangol (the Angolan state run oil firm) sustainable employment opportunities, reduction in capital flight and develop in-country subsea pipe capacity to serve oil and gas projects 100% run in Angola and by Angolan.
It was further gathered that KBR actually actually set up and engineering office and employed 40 engineers, spent about $3 million on 'IT' infrastructure. Yet! The company was starved of jobs and had to leave the country.Sweet Crude checks revealed that all these prospects that should have set
5Cover Story
USA, Ali Moshiri, Chevron's Vice President in charge of Exploration and Production in Africa and Latin America branded ongoing reforms of the oil sector in Nigeria as very complicated and urged the Federal Government to engage its partners in further dialogue.
He said Chevron supports the overall strategy of the reforms, adding however that the detail of it is so complicated that it requires a lot of dialogue to make sure there is better understanding of what the details are . “But what the federal government of Nigeria is doing in a strategic sense is actually right. The issue of funding my friend, Dr. Lukman keep bringing up has to be addressed. You cannot address it without going through some sort of reform. The IJV, we have no problems with it strategically, the very concept, the details, that is where the complications come in. That is where we require dialogue,” he said.
He urged government to take reforms 'one at a time, make sure we have it all aligned, one on one, as industry, as OPTS is doing', adding that each company has a different objective.
“We have commonality but we have also differences and I think we've got to build on both. The commonality approach to the industry, the differences is got to be one on one. But strategically, the reform has our full support. If we do not do anything, I don't know how we are going to resolve the funding issues. I mean it is not going to go away, it is going to be there,” he said.
He noted that the production sharing contract is a very important part of the reform exercise, adding 'majority of the deepwater prospect in Nigeria is coming on. Therefore if we are going to have more production, more investment in deepwater, you should not really touch the production sharing
contract'. “We would like the federal government of Nigeria to honour and grandfather what has been done. And if you want to do a forward looking review, that is okay. That means any new projects coming in falls under the reforms. We are okay with that because that is our choice. But something that is already there, investment has already been made those have got to be grandfathered. If it was a 1993 PSC, it's got to be honoured, if it is a 2005 PSC it's got to be honoured,” he advised. He said it was important to encourage the development of projects l ike Nsiko, Bonga Southwest and others, explaining that these are very expensive deepwater projects that could gulp anywhere between $7 billion - $8 billion.
Delayed projects:“Nigeria has become Angola's number one advocate, as we draw comparison from a nation who came to learn how to follow in our footsteps and become an industrial nation with focused objectives and targets,” a ministry official who did not want his name in print noted.
Sweet Crude checks revealed that in Angola, between project conception and final award takes about 3 months, while in Nigeria it takes between 18 and 36 months. Figure 1 highlighting ongoing multi-billion Dollars upstream oil and gas projects in Angola and 2 highlighting delayed multi billion Dollars upstream oil and gas projects in Nigeria captures more vividly the realities between both countries. Further checks revealed that most oil servicing companies in Nigeria which were encouraged to improve and increase capacity in preparedness for planned upstream oil industry projects went ahead to do so. Three years down the road, most of these service companies are forced to grapple with the harsh realities foisted upon them by long waiting time between project
conception and award. Under the prevailing circumstances, most service companies and contracting firms have been forced to right size their staff through lay-offs and sundry means, renegotiate bank loans and curtail growth ambitions.
Service companies and contractors in the industry also identified government's policy of awarding contracts to lowest bidders as antithetical to the Nigerian content policy, noting that when contract awards are dictated by lowest bids domiciliation of technological input, staff training, long term planning and growth suffers. Although the National Petroleum Investment Management Services (NAPIM), a subsidiary of the NNPC which superintends the joint venture and the production sharing contract agreements between government and the oil and gas exploration and p r o d u c t i o n c o m p a n i e s h a s consistently claimed it was not responsible for the delays, when contacted, a member of the NNPC Group Executive Council disclosed that the council can only work on approvals for projects brought before it.
Nigerian Content: Sweet Crude checks also revealed that government agencies charged with driving the Nigerian content agenda may have been paying lip service to promoting the policy. It was gathered that after a study was undertaken to establish a pipe manufacturing and reeling facility in Onne, Port Harcourt and Lagos, with the sum of $200 million earmarked for each project, government suddenly abandoned the idea. The idea was to manufacture subsea pipe for deepwater projects and to retain100 per cent Nigerian Content value. While government failed to secure and encourage such an investment, Sweet Crude checks revealed that Angola already owns 2 such facilities and plans are on for a
rd3 . “This development has provided
Large EPIC contract with sizable subsea umbilicals and hadware scope. Over 100km of umbilical major subsea works.High local content due in country capacity.
Status/Info
Total CLOV (Block 17)
Client Project
Over 75km of export pipeline, major works expected and completion towards end of Q3 2010
Multiple Platforms & associated subsea works. Very high local content
Stand alone FPSO with subsea packages and tiebacks.
Stand alone FPSO in Angola Block 14. Subsea construction inclusive of risers and towers inclusive of major subseapackages
Subsea tie back to Daila
Stand alone smaller FPSO development of the Calulu field inclusive of subsea hardware and modules
Long-term charter of DP vessel. Subsea work and general field support off Angola
Mostarda, Louro & Salsa- 2nd Phase to GCG. Maybe to tieback or standalone FPSO desision within 3 months
Tie back to one of the Greater Plutonio clusters. 18k PiP 10” inner pip. Service line and Umbilical likely. 1st Oi 2013
Gimboa Field consist of an FPSO. Additional tiebacks
3 fields development for an FPSO, first oil 2010
BP BP Block 18 Gas Export Line
ChevronTexaco
Block 0
Sonangol Block 4/05 Gimboa
ChevronTexaco
Negage Block 14
Total Block 17 Camelia
ExxonMobil Block 33-Calulu
Total Total DP LOF Vessel
Total Block 32 -South East Hub
BP Block 18-Cesio
Sonangol Block 4/05 Gimboa
Tullow Block 1/06
A N G O L A
Sweet Crude checks revealed that all
these prospects that should have set up
in Nigeria are flourishing in
Angola which has provided them with
an environment conducive for sustainable investments,
increased employment and
developed the economy, firmly
establisging Angola as the oil and gas
hub in West Africa
CONTINUES FROM PAGE 4
6Oil
Baker Hughes Cites Continuous Decline in Rig Count for April
STATISTICS FOR THE PRIMARY SEGMENTS OF THE COMPETITIVE OFFSHORE RIG FLEET.
aker Hughes announced that the international rig count for April 2009 was 986, down 26 B
from the 1,012 counted in March 2009, and down 88 from the 1,074 counted in April 2008. The international offshore rig count for April 2009 was 273, down 8 from the 281 counted in March 2009 and down 24 from the 297 counted in April 2008.
The US rig count for April 2009 was 995, down 110 from the 1,105 counted in March 2009 and down
834 from the 1,829 counted in April 2008. The Canadian rig count for April 2009 was 74, down 122 from the 196 counted in March 2009 and
down 32 from the 106 counted in April 2008.
The worldwide rig count for April 2009 was 2,055, down 258 from the
2,313 counted in March 2009 and down 1,004 from the 3,009 counted in April 2008.
END repeatedly warned of new attacks on the oil industry in response but its M
threats had so far failed to materialise.
Nigeria's main militant group said on Monday it had attacked major oil pipelines in the Niger Delta in order to prevent five flow stations feeding a facility operated by U.S. firm Chevron from functioning.
T h e M o v e m e n t f o r t h e Emancipation of the Niger Delta (MEND) said in an emailed statement the attacks had affected flow stations at Alero Creek, Otunana, Abiteye, Makaraba and Dibi feeding a Chevron facility in Delta state.
C o l o n e l R a b e A b u b a k a r , spokesman for the military taskforce in the Niger Delta, said he could not confirm any such attacks. Nigerian state oil firm NNPC and Chevron also had no immediate confirmation.
"At about 0200 (GMT) today, fighters from MEND destroyed major trunk lines to effectively put ... flow stations that feed the Chevron tank farm located in Delta state out of operation," the statement said.
The military began its biggest offensive for years 10 days ago, bombarding militant camps around Warri in Delta state from the air and sea and sending three battalions of
Nigeria militants claim attack on Chevron pipelines
soldiers to hunt down rebels believed to have fled into surrounding communities.
MEND repeatedly warned of new attacks on the oil industry in response but its threats had so far failed to materialise. Production had continued
and global oil markets had last week largely shrugged off the unrest. The security forces say they destroyed rebel camps in the Chanomi Creek area around Warri and that they are now in control of the ground in the surrounding creeks.
But industry and security sources say it is virtually impossible to fully protect hundreds of kilometres of pipeline running through remote and largely unpopulated areas, leaving the industry exposed to hit-and-run guerrilla attacks.
responsibilities, aimed at sharper focus on operating performance and technology. The changes will be effective as of July 1, 2009.
Peter Voser, who takes over from Jeroen van der Veer as Chief Executive Officer on July 1, 2009 said, "This new structure will increase accountability in the company, and improve Shell's performance on delivering new projects and developing new technologies."
He continued, "These changes will increase our focus, accelerate our plans to reduce complexity, corporate overheads and costs, and result in faster decision-making and delivery."
Shell's Upstream activities are currently managed in three separate organizations -- Exploration & Production, Gas & Power, and Oil Sands. Upstream will now consist of two businesses: Upstream Americas covering North and South America, and Upstream International covering the rest of the world. Marvin Odum, currently Shell's Executive Vice President for EP Americas, will become Director for Upstream Americas. Malcolm Brinded, currently Shell's Executive Director Exploration & Production, will become Executive Director of Upstream International.
There will also be changes in Downstream. In addition to the R e f i n i n g , M a r k e t i n g a n d Chemica ls bus inesses , the Downstream portfolio will be expanded to include Trading and Alternative Energy activities in Shell, excluding Wind, which will be part of Upstream. Downstream will continue to be led by Mark Williams as Director.
BP unlocks 18th oil discovery in ultra-deepwater block 31 Angola
o c i e d a d e N a c i o n a l d e SCombustíveis de Angola (Sonangol) and BP Exploration (Angola) Limited today announced the 'Oberon' oil discovery in ultra-deepwater Block 31, offshore Angola.
This is the eighteenth discovery made by BP in Block 31 and is located in the southern portion of Block 31 about 335 kilometers northwest of Luanda and 4.3 kilometers to the north-east of the Dione discovery.
Oberon-1 was drilled in a water depth of 1624 meters and reached a total depth of 3622 meters TVD below sea level. The well test results confirmed the capacity of the reservoir to flow in excess of 5000 barrels/day under production conditions.
Sonangol is the concessionaire of Block 31. BP Exploration (Angola) Limited as operator holds 26.67 percent. The other interest owners in Block 31 are Esso Exploration and Production Angola (Block 31) Limited (25 percent), Sonangol P&P (20 percent)
CONTINUED FROM PAGE 1UPDATES
Armed militants in the Niger Delta
Oil 7
Operators have been carried along - Lukman
Oil reforms:
DR. Rilwanu Lukman, Minister of Petroleum Resources has been part and parcel of the d e v e l o p m e n t o f
Nigeria's hydrocarbon industry in the last 30 years serving in different capacities. Today, he superintends the industry a very critical juncture especially given the ongoing reforms and the challenges in the Niger Delta. He led Nigeria's delegation to the just
r dconcluded 153 extraordinary conference of the Organisation of Petroleum Exporting Countries (OPEC) in Vienna, Austria where he spoke with Hector Igbikiowubo, Editor, Sweet Crude, a Vanguard monthly review of the oil and gas industry on a wide range of issues including the reforms, the security challenges in the delta, among others.
Excerpts: You just concluded an extra
ordinary OPEC meeting. What was decided and what Nigeria stands to gain?
It has been agreed to go on with the agreement which we are having now until the next meeting in September. Because the market is balanced as far as Nigerians are concerned. We are reasonably satisfied with the way the prices are moving up, although there are indications in the market that the
international market situation has not yet bottomed up. It is important that the regime of forecasts that were instituted in Oran is continued until the market stabilizes.
How is compliance by member nations and did OPEC rate compliance to the prevailing quota of member nations?
The last time we met, compliance was around 81 per cent, now it has gone down slightly to 78 per cent, a little lower than it was before but it is still a reasonably level of compliance but the conference decided to implore members to adhere strictly to the production figures that was set up so that we can mop up the excess supply which is apparent in the market, especially if you look at the stock level that is on the high side.
Since the financial crisis has not bottomed up, what is the massage for Nigerians as it concerned petroleum subsidy?
As far as our revenue is concerned, it is obvious that with the price coming down from the very high level of over
$140 per barrel to now about $60 per barrel which is still better than the lower figure that we experienced earlier in the year, it is obvious that our revenue collection as far as oil is concerned has gone down heavily, so government will have to continue to tighten its belt because we cannot ignore the fact that our revenue has gone down drastically due to the fall in the oil prices and as far as the international economy and situation is concerned, it is improving somewhat but not what we will like it to be and from all indications, even the most knowledgeable observes believe that it will still be a little while yet before we will be completely out of the woods. While we are in this situation, it is important that we continue to exercise restraint and caution as far as expenditure is concerned. Government has decided to eliminate subsidy and it is even more important now that our revenue profile has drastically taken a turn for the worse. We need to garner as much revenue as we can so that we use it to provide better infrastructure for the public. This money we are spending on subsidy can be put to that better use than juts on subsidy.
There is a level of confusion on what Nigeria's actual oil production figure is at the moment, considering the militancy and military action in
the Niger Delta. Can you clear the air?
We are clear, we know what is going on. We have lost about half of our potential production figure not only due to the damages and militancy in the Niger Delta, but also to operational reasons. At the moment, our potential production capacity is about three million barrels per day and we are doing about 1.7 million barrels, which is our current quota. But a lot of our new production is coming from condensate which is not part of the quota because of the way the quota is defined. If you add those together, our total production, including condensate natural gas liquids is about 2 million bpd.
With operators like Chevron saying that they have lost about 100,000 barrels, Agip announcing force majeure and Total also shutting some of its capacity in the area, has this not affected our production capacity?
It has, but for a long time, not immediate. For some time we have not
been able to produce at our full potential because of the challenging situation we have in the Niger Delta. Our hope is that sooner than later, the situation will normalize and the market will be able to support higher production, we should be able to produce more. Right now, everybody is restraining himself. There is no point putting more oil in the market only to drag the price down against ourselves. What is the sense of producing 3 million barrels only to sell at $30 a barrel. It is better to moderate our production so that we can earn better revenue from what we are producing instead of produce more and earn less.
Is there an industry approach to ameliorate that will be married to the security approach that will engender a better atmosphere for production in the Niger Delta?
Obviously, if there is less militancy and attack on production facility, we should be in a better position to produce more. But for the time being, we have to deal with the situation as it is. We urge our people to moderate their approach so that peace can return to the Niger Delta in those areas where oil production has been compromised due to the activities of the militants. Our ultimate target is to have the credibility of producing 4 million bpd, we will not do that today or tomorrow, we should be ready to produce more if the market calls for more. If we wait until the market is better to establish capacity, it will be too late because nobody will wait for you to ramp up your capacity. You should be ready to produce at a higher level. Which means you have to set up your capacity and have idle capacity, all other OPEC countries are doing this right now.
What is current state of the reform in view of the complaints by operators that they are not being carried along?
It is not true to say that operators are not being carried along. Operators have been carried along. We have talked to them in the process of the reforms and there are certain things that we have tried to do and until we get the new law it is not an entirely, absolutely new thing, it is an amalgamation of the laws that existed before over 20 years ago a n d s o m e m o d i f i c a t i o n a n d clarifications in some areas where things have changed from the last time the laws were reviewed. Some of the provisions that we have in the laws now are 20 years old. I mean it is unreasonable for anybody to expect us to continue to operate with some provisions that were designed for the system so long ago given the current realities. So there would be some discussions and when eventually when the draft bill is exposed to public hearing, people would be allowed to make their views known. So it's not that the government is trying to impose the law just like that. We also have to take into account what is happening in other countries because the game today is to attract funds, investments into the country whether this fund is coming from outside or from within the country our indigenous companies that we are
trying to develop, it has to be crafted in such a manner that every participant in the country is reasonable happy with the outcome. If we make the laws such that it is not in line with what is happening in the industry today, we would just be shooting ourselves in the foot. It is unreasonable for anybody to expect the government to put in place laws and regulations that are going to be against the healthy growth of the economy generally, we have to take that into account.
The oil companies have called on government to grandfather the 1993 PSC agreement, while focusing attention on going forward. What is your reaction to this?
I am sure they would be last set of people to say that the conditions in the PSCs should be left forever. Part of the things we are doing is to align these things provisions with current realities and they understand that very well. We are not interested in punishing the oil companies, rather we are interested in making sure that they stay within the industry and that new entrants are attracted and that also the government in the country gets the best returns from the situation. We had to take all these into consideration and then come up with a new approach. We can't please everybody because our problem is to come up with a new a new approach that we think will satisfy we can't please everybody in this regard. We
need to ensure that all the oil companies whether it is foreign or local gets a fair return on their investment. The government itself which is at the apex of the industry gets a reasonable return on its investment. Once you produce oil and gas that's it, you've produced them. There is no way you are going to bring them back. So we must make sure that while these scarce resources are being depleted, the nation is getting a fair return on the assets.
We have also been reliably informed that plans are afoot by the major exploration and production companies to discontinue investment in the country for the next 5years if the petroleum industry bill is implemented in its present form. What is your reaction to this?
I don't believe it, I don't believe it. Right now as we are talking, new entrants are coming and trying to get into the industry. If what you are saying is true, people would be running away and people are not running away. We want to make sure that we keep the people we have in the industry and attract even new entrants with the passage of the bill into law and we can't do that at the expense of the country's longer term interest. It is a question of balance ensuring that the country's happy, the people who are working
I mean it is unreasonable for anybody to expect us to continue to operate with some provisions that were designed for the system so
long ago given the current realities
Dr. Rilwanu Lukman
CONTINUES ON PAGE 8
8Oil
War in the creek: Dearth of supplies hit oil companies
...Starvation, fatigue threaten operations
TH E R E a r e s t r o n g indications that operations in the nation's upstream sector of the petroleum i n d u s t r y c o u l d b e
grounded any moment from now due to declining supplies to sustain the operations of oil companies because of the ongoing military activities in the Niger Delta by the Joint Military Taskforce (JTF) and its confrontation with Movement for the Emancipation of Niger Delta (MEND).Sweet Crude investigations revealed that the military activities have completely cut of supplies to the oil companies operations which before the
escalation of the confrontation between the JTF and MEND, were done by the boats and the supplies available are diminishing by the day.According to Sweet Crude findings, even the use of choppers are now said to be more dangerous than attempting to swim across the red sea and this made crew change and the productivity of those onshore already are said to be declining because of fat igue, uncertainty and anxiety. The workers are said to be putting serious pressures on the leaders of the two unions in the sector, the National Union of Petroleum and Natural Gas (NUPENG) and its Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), to order their pull out as they are finding it increasingly very difficult to cope with the situation in the onshore.Investigations have also revealed that most of the expatriate workers have been evacuated to safety leaving only the Nigerian workers who now work and leave in fear. Confirming the pathetic situation in the area to Sweet Crude, former Lagos Zonal Chairman of PENGASSAN and Chairman of Lagos Council of the Trade Union Congress of Nigeria (TUC), Comrade Abubakar Suilemon, lamented that the present confrontation between the JTF and MEND has made the upstream very unsafe and difficult for both the companies and the
workers. According to him; “The confrontation between JTF and MEND has made the environment unsafe for oil workers. Presently all oil workers are on line of fire. Crew change is difficult if not impossible. The worst part of it is that
feeding is now grossly inadequate as most companies cannot transport food from land to the offshore. I can tell you that there are pressures for workers to be pull-out for safety. In fact, this explains the reason why PENGASSAN and its sister union, NUPENG and other unions whose members are working there are threatening to withdraw their services as the workers to avoid a situation where innocent and harmless workers become the main casualties in a situation like this whenever there are security problems in the area. Similarly, operations of oil companies are also being seriously affected as some of the wells are now shut in. All the producing companies are now producing below their capacity especially those that have wells or onshore and swamp locations. As a result of this, Nigeria is losing close to forty percent of her production capacity.” “It is true that most of the companies in the upstream have moved their
expatriates out as a result of the insecurity in the area. In my opinion, this has little or no impact as most of them have no business being in this country. Up to 1994, less than ten percent of the present number of expatriates were the only available
foreign staff that were part of the crew running the industry. Lack of autonomy of Department of Petroleum Resources (DPR) and the Nigerian National Petroleum Corporation (NNPC) created the present situation.”On the level of crude theft, the former L a g o s Z o n a l C h a i r m a n o f PENGASSAN said: “The level of oil theft in the country is high and increasing daily and as rich and uncontrollable proportion. Even a recent statement from the minister of state of petroleum confirmed this. Bunkering in all oil field locations is almost a norm. Shell Petroleum Development Company (SPDC) with a capacity of 1.3million barrels per day can only effectively produce 400,000 barrels per day and this applies to other companies. Everywhere in the world, illegality like this is perpetrated by cartels. The magnitude of this illegal activity shows clearly the inefficiency on the part of Government agencies and other stakeholders. One thing for
Sweet Crude investigations
revealed that the military activities
have completely cut of supplies to the
oil companies operations
certain is that oil theft and bunkering is not for the common man. It is for those who have the financial muscle, network, and have capacity to run vessels and barges for the activities. As labour, we have always advised Government to look in the areas of
unscrupulous Government officials and agencies that regulate the activities of oil industries and some local collaborators.”“The issue of rapid development of Niger Delta is key to the security problem of the area and secondly, this is the right time to address the issue of resource control and there is urgent need to review upward the issue of derivatives and for government to make sure that all allocations are distributed as planned. Any political official found misappropriating the funds must be prosecuted. There are some agencies that the Government has already put in place for example adequate funding of the Niger Delta Development Commission (NDDC) must be enforced. Nigeria has the capacity to determine and record the actual amount of crude taken away but due to corruption and lack of empowerment of the DPR, which suppose to be the police of the industry, manipulation of production records takes place.
Victor Ahiuma-Young
with us whether foreign or indigenous are also happy. There must be a middle way of achieving this.
What is the current status of the zero gas flare-out policy of government, we noticed there have been several shifts in the deadline? It would appear government lacks the political will to enforce the deadline, is that the case?
It is not a case of the IOCs having an upper hand or otherwise. We have come up with a gas master plan and it has been put in place in order to systematically and profitably flare-out because our gas production is tied up to the oil production. If you want to stop gas production immediately, you have to stop oil production too. But we can't do that because oil production is our life-line. So, we must have a programme that would flare-out in reasonable time and also enable us to continue to produce oil. We cannot accept a situation whereby we are flaring gas forever, it is not possible. The gas master plan is primarily designed to stop the flaring and even if the gas is still being flared, treating it and distributing both for local use and for export. What the government has said is that it is going to give some prominence to local use of gas. Essentially certain percentage of the gas produced now would be devoted to local use, particularly for power generation. We just can't continue to flare, it is too expensive a commodity to flare, not to mention the damage it does to our environment. We have to make sure that the area where we produce this oil is not damaged so that the rivers and land are not laid to waste and the only way we can do this is to stop the flaring by proving for proper use of gas.
I would take you back to the issue of the petroleum reform bill. There is this concern that time is of the essence, especially when one considers that the bill has been in the works for quite a while. Nigeria's partners and contemporaries in the hydrocarbon development industry are not standing still and waiting. Is there anything being done to ensure that the bill is passed expeditiously?
We are happy with the way the National Assembly has responded so far, we've been talking and interacting with them and they understand the importance of this particular bill. It is not an ordinary bill, it is something that concerns the national economy as a whole and our major national industry and we are reforming it from what it used to be. We are trying to put it in a much better footing from what it was before, make it more transparent, make more accountable, change the thinking of the national oil company and make it more commercially oriented to deliver on what it is supposed to, such that our refineries can work better, we can make better use of the gas we are flaring, so that the national oil company would be able to not only produce oil and gas but would also be able to generate substantial revenues for itself and make profit. This has not been the case before.
CONTINUED FROM PAGE 7
Oil reforms:
Operators have been carried along
- Lukman
Aftermath of JTF operation
A bombed Jetty
Focus 10F
ALI Moshiri, Chevron Corporation's Vice President in charge of Africa and Latin America makes his
submissions in a soft, animated but measured tone, never rising above a given decibel no matter the question. He spoke with select journalists from countries within his area of coverage including Hector Igbikiowubo, Editor of Sweet Crude, a Vanguard Newspapers publication on the sidelines of the Offshore Technology Conference (OTC), in Houston, Texas, USA, last month, touching on a wide range of issues including security challenges in Nigeria's Niger Delta, concerns about ongoing oil reforms, plans to ramp up crude oil production from the Agbami oil field among other burning issues.
Excerpts: I notice that the process for
approval for projects have slowed down especially as it concerns those in Nigeria Nsiko, Bonga Southwest and Aparo. How do you see your outlook for 2009 given this scenario?
I am not sure it is a slow down, I think what we are trying to do is determine the cost of goods and services. We have not seen that yet. You know for some of these projects, the cost has to come down. And our expectation is that some of the contractors need to do that to make the cost competit ive in the environment we find ourselves. The two projects that you mentioned, both of them have to go forward. On Nsiko, we are committed, Bonga Southwest, the development plan submitted by our operator was rejected by NAPIMS and now we are back on the drawing board to put things together. But actually we were expecting Bonga Southwest FID last year. We are committed to projects in Nigeria. We are spending over $2 billion in Nigeria on capital expenditure. I encourage you to visit Escravos and see the expenditure we are putting there and the employment we have. We have today closer to 4000 people working in Escravos. We like for the project to move much faster, but sometimes we've got to find the right timing to execute. There are funding and other issues, but those projects are marching ahead.
So you don't have any problems with NNPC's commitment to funding these projects?
In deepwater production contracts, all the costs are carried by us. But JVs are different. Regarding Usan, we are at the stage of construction, Nsiko we are in a FID and Bonga Southwest, we are going to recycle.
What of regarding dropping oil pr ices , doesn' t th is af fect
We are committed to projects in Nigeria Ali Moshiri
commitment to these projects? These projects are long term. You
look at Agbami, we started when price was $20, price went to $40 when we were constructing. You know our business is a long term thing and NNPC business is a long term thing. With lots of people, when you make a decision, you are changing your plans everyday. This is a company spending $18 billion, you got to manage that in the long term. By the way, we look at economic project as a long term as well, most of our contracts is in 20 years. What's going to happen in that time is the price going to be $40 or $140 per barrel?
I understand you are carrying out a re-evaluation of the EGTL project. Where are we now with regard to that?
First of all, Escravos Gas to Liquids (EGTL) is the project that will enable us to put the flares out. We have flares in various locations, we gather them into a central pool and monetise it. We are monetising domestic gas. We are sending close to 300 million cubic
feet of domestic gas per day. This makes money for both NNPC and us. The other we could have done which is much more expensive, is to re-inject it into the ground, which doesn't make sense. Chevron is the only company in Nigeria that has created the EGTL as an enabler and when it is ready, it shall produce 30,000 barrels per day of high quality diesel a product that can be sold in Europe at a premium price. There something like this in Qatar. This type of infrastructure creates tremendous jobs. We are going to ramp up to about 7000 jobs, people working, we provide meals three times a day to about 5000 people. It is a community. You're going to ask why is cost escalating? Cost of everything is escalating. I just presented this at the OTC and I said this is the biggest challenge we have. If I was going to build Agbami in 2008, it would cost us twice this much. Therefore timing is important. That is the biggest concern we have. EGTL acts as an enabler and the cost we have provided to the Senate. We presented to them, we benchmarked
it and it's just the cost of goods and services that escalated. At the end of the day, Nigeria needs more projects like that the infrastructure projects.
With this variation, how much are we looking at for the EGTL?
We are estimating the cost to be about $5.5b - $5.9 billion.
So it's not anywhere around $7 billion as has been speculated?
Absolutely! And I would tell you this, we are committed to meet that costing. We are working on it.
When do you expect the cost element to come substantially lower?
We don't know, we are pushing it, we think the industry is going to react to it. If the prices stay lower enough, you are going to see much faster reaction. But this is the environment we are. You know at the beginning I said fuel is a commodity, price goes up according to the economics of supply and demand. Cost of goods and services are the same, we are concerned. Remember, demand is down, the price is down. We are hoping that it doesn't come to the point where it collapses. Basically, you see service companies, they don't have cash, they cannot afford it, some find themselves in a tough situation. But so far, we see some changes, but that is because we are pushing it.
Can we look at the volume of Chevron's shut-in production in the Niger Delta?
On the east we have no production. That is about 50,000 barrels per day. In the central we are producing and on the rear, which is Escravos and we've got a few barrels shut in because of the pipelines sabotage. But overall we are okay.
There are other variables at play here especially in the Niger Delta. We are talking about not just shut ins, but crude oil theft, the ongoing reform exercise of the oil industry in Nigeria, etc. can we look at what your concerns are regarding both and what your suggestions are?
Our approach is to work closely with the federal government of Nigeria . Reform has happened in other countries before. It recently happened in Venezuela and the approach we are taking is that we are there to listen, we are there to provide input and at the end of the day it is all going to be based on the economics of what impact the reform is going to have. We are driven more by the economic driver more than anything else. So far we have been having good discussions with the ministry, with the committee and providing input. For example, the overall
We have today closer to 4000
people working in Escravos. We like for the project to
move much faster, but sometimes
we've got to find the right timing to
execute
CONTINUES ON PAGE 9
Ali Moshiri
11Focus
strategy of the reforms, we support that and I want to make that very clear. The strategy we support. But the detail of it is so complicated that it requires a lot of dialogue to make sure we have a good understanding of what the detail are. But what the federal government of Nigeria is doing in a strategic sense is actually right. For example, on the issue of funding, my friend, Dr. Lukman keep bringing up has to be addressed. You cannot address it without going through some sort of reform. The IJV, we have not problems with it strategically, the very concept, the d e t a i l s , t h a t i s w h e r e t h e complications come in, that is where we require dialogue. What we encourage is taking it one at a time, make sure we have it all aligned, one on one, as industry, as OPTS is doing. Each company has their own objectives, we have commonality but we have also differences and I think we've got to build on both. The commonality approach to the industry, the differences is got to be one on one. But strategically, the reform has our full support. If we do not do anything, I don't know how we are going to resolve the funding issues. I mean it is not going to go away, it is going to be there. Therefore the question you already asked, we've got to do something. Regarding further development of natural gas, we've got to talk about that. There are certain things I think if we work on it, we are going to get there. I am positive about it, I go to Abuja a lot and most of the time we
talk about it. The production sharing contract is a very important part of this whole thing. Majority of the deepwater prospect in Nigeria is coming on. Therefore if we are going to have more production, more investment in deepwater, you should not really touch the production sharing contract. And we've got to encourage the people to develop Nsikos, Bonga Southwest and others. They are very expensive and if you look at these deepwater projects, they are very expensive $7 billion - $8 billion. It is different from JVs in shallow water, in swamp. With the production sharing contracts, what we would like to suggest we would like the federal government of Nigeria to honour and grandfather what has been done. And if you want to do a forward looking reviews, that is okay. That means any new projects coming in falls under the reforms, we are okay with that because that is our choice. But something that is already there, investment has already been made those have got to be grandfathered. If it was a 1993 PSC, it's got to be honoured, if it is a 2005 PSC it's got to be honoured.
But the issue is that the 1993 PSC is not favourable to Nigeria. it gives a lot of concessions to the multinational operators and that is the major complaint.
You know how business is, there is gain and loses. You know when there are loses, we usually take the loss. But on the balance, it's got to turn out the way it is supposed to be. I've been working in Nigeria since 1987. In 1 9 9 3 t h e g o v e r n m e n t w a s encouraging people to come and
invest in deepwater and we are very proud to say that Nigeria always honoured their contracts if you look at their history. If you go back they had a driver behind them. That's the reason I say grandfathering is very important. You can't take and chose good or bad. Forward looking, we're fully in support. It is a federal government decision, they can put any terms and conditions they deem fit. But what the contract was before is really scheduled on investments. Now we built Agbami with $9 billion and it takes several years to pay that off. We didn't make any profits yet.
You earlier said $7 billion was spent on Agbami?
Remember Agbami has a phase one and two. Phase one was the FPSO and several Wells. We've got to continue to drilling. We are producing about 200,000 barrels per day and we've got to get to 250,000 barrels per day.
You've not talked about the issue of the violence.
No doubt about it, there is some truth to that, there is some headline to it. The way that we try to work around dealing with that issue is working through the community, that's the only solution we have. We've got to work through our people, with the community, convert the community to our presence there, add value and we've got to continue to do that and we've got to do more. We are working on a similar initiative that we have in Angola for Nigeria, work with the community, and work with our partner the NNPC to get and
We are committed to projects in Nigeria Ali Moshiriunderstand issues that they want us to listen to. We do not believe that any other means is going to provide the long time solution we're providing education, medical what are their needs? That's going to be through the community.
The talk lately has been exploring the possibility of granting these communities equity. Are you aware of this and what is the disposition of your company towards such suggestion?
We listen to everybody. I personally believe that the issue would not be resolved by providing equity to the community. I think what we got to do is that we've got to provide facilities. We've got to employ more people, we've got to make people more productive, and we've got to make their lives more comforting by providing the basics, not just in Nigeria. Our community approach around the world is not writing the cheque. We've built orphanages in Venezuela, we are building schools and we are maintaining them, we bring in teachers and that is the only way we've been doing it. The wealth itself, distribution of the wealth, if it doesn't turn into the productive aspect of community, we are going to have a bigger problem on our hands. But we listen to everybody's solution. But honestly the only way we can succeed in this area is to engage with the community, not creating equity or bank account or all that. We've got the largest budget for community in Escravos. We've got a group of people that is what they do.
I am positive about it, I go to Abuja a lot and most of the time we talk about it. The production
sharing contract is a very important part of this whole
thing
CONTINUED FROM PAGE 8
A Gas Plant
12Labour
AS military activities by the Joint Military Task force (JTF) intensifies w i t h u n c e r t a i n t y surrounding the oil
installations located in the creeks, organized labour in the nation’s petroleum sector, has asked the Federal Government to ensure its members get maximum protection as they perform their jobs.
The two unions in the sector, the National Union of Petroleum and Natural Gas Workers (NUPENG) and its Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), declared that their utmost concern is the safety of their members who are working in the upstream.
Sweet Crude investigations revealed that some of the workers and their families are putting pressures on the unions to take definite stance on their continued stay in the upstream because nobody knows the mind of the militants and their next move as the military activities increase there.
An oil worker who spoke on condition of anonymity told
WAR IN THE CREEKs:
Labour expresses concerns over oil workers’ safety
Vanguard that his colleagues are not comfortable with the position and comments f rom government quarters, especially from the Executive and the House of Representatives who appear to have tacitly asked the army to level all Ijaw towns and villages in the creeks.
In a chat with Sweet Crude yesterday, President of NUPENG, Comrade Peter Akpatason who does not want to be drawn into the rational or otherwise of the JTF offensive in the creeks, said that the sole concern to NUPENG is the safety of members.
While advising the military to e x e r c i s e r e s t r a i n , C o m r a d e Akpatson, charged the government and all the security agencies in the country, to ensure that the safety of workers in the area is paramount.
Corroborating the views expressed by Comrade Akpatason, General Sec re t a ry o f PENGASSAN, Comrade Bayo Olowoshile said the association is worried about the
safety of members and other workers and called on government to do everything possible to guarantee their safety .
While explaining that leaders of organised labour in the sector mindful of the delicate situation, they do not want to take a rash action that could send wrong signal and advised the warring parties to be cautious and not put the life of workers in danger.
According to him, “the entire labour movement in the country, not just NUPENG and PENGASSAN, but their umbrella bodies (Nigeria Labour Congress and Trade Union Congress of Nigeria ) are watching the unfolding events with keen interest.
Just last week, PENGASSAN in a statement signed by Comrade Olowoshile, condemned the human carnage from the confrontation between JTF and both the JTF and militants and called on both parties to
exercise caution.The statement read in part: “ While
soliciting understanding on the need to eschew further wastage of lives and properties in the demand for justice, PENGASSAN has reasons to empathize with the Niger Delta People in their legitimate demand for fair and egalitarian society and for socio-economic emancipation of the Region in terms of the resources accruing from the Area. We however differ in the approach of channeling our grievances and mounting pressure, particularly when such approach is directed and targeted on unsuspecting and innocent Oil Workers who are our Kindred sharing in our struggle and c a n v a s s i n g f o r e m e r g e n c y development of the Niger Delta in line with the Master Plan for the human, physical and infrastructural transformation which the region that lays the ‘golden egg’ truly deserves.
“MEND as brothers should not target fellow brothers, as this poses
challenges which may adversely affect our justification for attention and efforts on accelerated action(s). We have cause to believe that if the issues of the agitators are properly channeled, conducive forum will be provided for engagement and consensus bui ld ing towards enduring resolution of all issues.”
“MEND as brothers should not
target fellow brothers, as this poses challenges
which may adversely affect our
justification for attention
By Victor Ahiuma-Young
The fallout of JTF activities in the Niger-Delta
13Insurance
A pronouncement by the Nigerian Insurers Association that First Energy Insurance Consortium floated
in i t i a l ly by s ix ind igenous underwriters is an organisation that is in no way connected to the trade group of insurers in the country may have put paid to speculations about the promoters of the consortium.The consortium is almost dormant and the number shrinking as members withdraw while others are contemplating exit strategy. In addition, the inability of the group to attract the patronage of oil companies and a proportion of energy business has been attributed to high level intrigue both within the s y n d i c a t e d p a c k a g e s o f multinationals and Nigerian National Petroleum Corporation.The consortium seeks to build and sustain adequate local capacity to take on big oil and gas risks. The collaborat ing companies are International Energy Insurance, Niger Insurance, Law Union & Rock Insurance, Equity Assurance, Insurance PHB, and Linkage Assurance. The latest entrants to the consor t ium inc luded Union Assurance among others. Chairman of the trade group who is also the CEO of Custodian, Mr Wole Oshin said NIA was never at any time a promoter of the consortium but
otal losses in the energy sector totalled approximately $11bn globally as a result of a T
particularly damaging Gulf of Mexico hurricane season and some significant man_made incidents.
Experts predict higher losses with increasing uncertainty in the activities of militants in oil rich regions and natural phenomenon in some countries.
“When faced with such a potentially high loss incidence and the current
First Energy Insurance Consortium flops
stated that it was a business group of some members of the association. At best he described the consortium as “like-minded companies” pooling their resources to achieve an objective.But some officials of member-companies of the consortium have accused leading insurers of ensuring that the consortium does not take off. According to them, the idea behind the consortium was to replicate an approach that was already successful in Venezuela and other countries in the country to optimise the participation of underwriters in the country.They criticised the current practice where the insurers with contacts in
government hijack the Nigerian content in energy insurance, share to some and cede others outside without any underwriting.The plan for the energy insurance consortium was anchored on the premise that no Nigerian company had individual capacity to take the Nigerian Content part of the Local Content Policy of the Federal G o v e r n m e n t . T h e F e d e r a l Government policy was also initiated to aid capacity building in oil and gas insurance.Experience around the world suggests the consortium approach is the winning formula. It has been used successfully in Brazil, Venezuela, and Norway to increase local
participation in their respective economies. The Nigerian initiative was inspired by the experiences of these other countries, but more so by the Nigerian Content Policy. The policy seeks to increase the involvement of Nigerians in the national economy, particularly in the oil & gas sector.Managers of the consortium, United African Insurance Company, said each of the participating companies was bringing to the table individual strengths in expertise and experience in oil risk underwriting. Mr Johnnie Wilcox, CEO of UAIB disclosed at the launch of the consortium in Lagos in 2007 that the group is fully backed by the very best
of the London market, which include the Ace European Group, Zurich Insurance, AIG and Catlin Insurance.Training was another big lure for the promoters. “The NNPC sets a great store by training, team work by industry players and planning as requirements if Nigerian insurers are t o t a k e f u l l a d v a n t a g e o f opportunities in the local content policy. gaps; design & implement capacity building measures; develop critical enablers for measurement & monitoring; promote investment in key facilities/ infrastructure," said the then GM of Local Content Division, Ernest Nwapa. Another significant benefit that is expected to f low f rom the consortium approach to risk underwriting in the oil sector is that Nigerian insurers will for the first time be in a position to influence pricing of risks in excess of their capacity ceded to re_insurers abroad. Acting individually, Nigerian insurers lack the capacity that delivers the vantage position to ask for the right premium for risks in excess of their capacity. Mr Allan Murray, chief executive officer of MMM Insurance and Reinsurance Brokers Limited of London, who was at the launch of the consortium in Lagos in November, said without the collective approach Nigerian insurers will continue to take whatever price the offshore market offers for the risks they place abroad.
Energy losses total $11bn in 2008illiquidity in financial markets, superior claims performance is vital for our clients,” says Marsh's Paul O'Keefe.
Paul O'Keefe, is head of the newly created Global Claims Leader for its Global Energy Practice. In his new role O'Keefe will co-ordinate all energy claims globally, while retaining his current position of managing the Energy Practice's Risk Engineering, Consequential Loss and Client
Consulting Services. He has more than 25 years' experience in the insurance and energy industries and has been with the broker since 2007. Before joining Marsh he was an Executive Director at leading energy loss adjusters Steege Kingston, where he focussed on onshore and offshore energy insurance claims management. Andrew George, Leader of Marsh's Energy Practice in Europe, Middle East and Africa, said:
Uncertainty beclouds energy insurance market
The energy insurance market is hardening, but is facing problems related to the
international financial situation, according to broker Willis Group.
"I think there are three main messages," said Robin Somerville, global communications director of Willis Global Energy and author of a Willis report on the energy market. "Firstly, that following Hurricane Ike, the Gulf of Mexico windstorm portfolio for insurers is once again lying in ruins and is becoming poss ib ly the inso lub le r i sk management problem.
We do feel, however, that recent developments in terms of forming new capital market instruments relying on a better parametric trigger for measuring Gulf of Mexico windstorm risks may be the long_term solution to the problem of
the Gulf of Mexico."Insurers are also "conflicted and
apprehensive for various reasons," said Somerville. "The global economic recession is making sure that they're not getting as much premium income into their books at a time when they need to do so. They're also finding that their drive towards harder insurance market conditions is being tempered by the fact that there's about 5% more capacity out there this year than there was last year, which has meant that the hardening market conditions in energy are gradual rather than steep."
There is also "a conflict of trends," said Somerville. Insurers "want to make sure that they underwrite for profit, but to do so they have to generate enough premium income to make their book sustainable. Which way will they go? Will they go too
Ifeanyi Ugwuadu
high and therefore lose out on premium income, or will they go too low and render the i r book unprofitable? It's a conflicted and apprehensive market."
The Willis report said energy companies will resist the concept of a
hardening market as they themselves attempt to hang on to their own levels of profitability as they deal with falling demand for oil as well as the steady drop in crude oil prices over the past year or so.
"The global economic recession is making sure that they're not getting as much premium income into their books at a time when they need to do so. They're also
finding that their drive towards harder insurance market conditions is being tempered by the fact that there's about 5% more capacity out there this year than there was last
year, which has meant that the hardening market conditions in energy are gradual rather than steep.”
Fola Daniel
14Financing
Fuel: Deregulation only way out, says employers
By Victor Ahiuma-Young
UMBRELLA body for employers in the country, under the aeg i s o f Niger ia E m p l o y e r s
Consultative Association (NECA), has appealed to organised labour and all those opposed to the deregulation of the downstream sector of the petroleum industry, to embrace the policy as it is the only sure way to save Nigeria from the perennial petrol supply crisis.
President of NECA, Mazi Sam Ohuabunwa, who spoke in Lagos, blamed the opposition to the deregulation policy to the inability of government officials to explain the full benefits of deregulation to Nigerians especially labour and others opposed to it.
According to him: “One of the views that I have personally is that Nigerians including labour should be routing for deregulation. It is an irony that we are fighting against deregulation. I don't know where the problem is maybe because we have not been able to communicate very appropriately to all of us especially to labour that deregulation is the solution to the problem of fuel scarcity. We talk about fuel scarcity, how do you deal with fuel scarcity when you have limited number of people importing the product. When you create conditions that only allow a few people to import which is regulation. Regulation says this number of people can do this job when they meet this stringent terms, you only have N1 billion, if you don't have N1 billion you cannot go into i m p o r t a t i o n . F o r e x a m p l e , government saying that you must have an ability to lift crude oil, must have 100 tank farms before you can be given license to import. These are conditions that make it limited for people to go into the business and the fewer people are in the business, the more the scarcity, the more the inefficiency, the more we are uncompetitive in pricing any commodity. If you look at diesel which is what we used to run our plant that affects the cost of product is deregulated. We pay according to the market price and is readily available despite the problem of NEPA, we are still running on diesel and producing.”
“Though cost of generating electricity is high and cost of producing is high what about when I don't get diesel and I don't have NEPA, then all of us would be out of work. So, deregulation will do many things, it will allow many people to enter into the business. We saw what happened in the telecommunication sector, where in five years we had 100million working lines and where even taxi drivers, hairdressers are all using mobile phones. Yet we do not see the benefits of deregulation. People are talking about petrol, is petrol more important than rice, who is regulating rice, who is regulating garri, these food are sold by factors of demand and supply and we are still buying them why should it be one commodity that must affect every other commodity. Now labour is saying that our refineries should work. How can our refineries work
when some people are making optimum profit from this situation it is a cartel and everywhere you have cartel, they will support opposition.”
Mazi Ohuabunwa added: “Let us
be wise, the moment we deregulate, many things will happen at the same time, more people will import
Mr Segun Osinowo and Mazi Sam Ohuabunwa (DG and President NECA
petroleum because it would be profitable and immediately more people enter the business, prices will fall. Two, people will then be motivated to set up refineries
because you cannot put your money in any project when you are not sure of recovering you money at the end of the day. So before people can build refinery, government must remove the control and let the forces of demand and supply find its place. Also that is what investors want to use to summit their proposals to banks for funding because nobody builds refinery from his pocket. So our nation would remain under bondage, there will be queues in petrol stations until Jesus comes if we do not deregulate. So there is need for sensitization, people are not understanding it and it is an important issue that affects everybody in the society. We must deregulate the downstream sector, Diesel is deregulated, telecom sector i s de regu la ted , Av ia t ion i s deregulated. In aviation sector, you can pay seven thousand to travel, this is because the price of aviation fuel has dropped think government has to do more working in sensitizing labour on the need for deregulation. I think this should no be an issue that we would be fighting over.”
owever, President of NLC, Comrade Abdu lwaheed Omar, argued that until the H
government deregulates the down stream sector of the economy, local refineries would never be able to operate, saying that “how can refineries work when a cabal is operating it,’’ he asked, adding that the government should sensitise the people for them to allow it to work.”
Speaking through Congress Deputy, Comrade Peters Adeyemi, reiterated Labour’s opposition to deregulation.
According to him: “Nine years ago, the NLC made two fundamental observations on petroleum products. First is that as a country, we have no control over the prices, and secondly, oil is denominated in dollars over
No to deregulation, NLC insist
which we do not have control. So, our solution was that we should have a fixed and subsidized price for domestic oil supply to refineries including the pr ivate ones . The refusal of government to accede to this made the 18 companies that had applied and gotten licenses to put a stop the establishment of private refineries. Our observations and suggestions would have shielded the private companies from the vagaries and uncertainties of the market place. Our position remains constant; that we can run public refineries efficiently like Venezuela which runs 18 public refineries and even retails in the United States. Secondly, that we can provide the
enabling environment that would encourage the private sector to run its own refineries. Rather than address these issues, Government claims that there is a cabal in the petroleum industry which is holding the country to ransom and making fictitious subsidy claims. Then government makes a curious decision; it leaves the cabal in place but decides to de_regulate the sector. This to us will mean more hardship for the populace as prices of fuel products will increase astronomically.”
“The truth is that most component parts of the subsidy including freight, demurrage, NPA, storage and evacuation costs are unnecessary since they are all costs related to fuel importation.
15Power
NEPA II, others sabotage PHCN Labour
It's equally has been introduced in Nigeria. They are
being used in some places in Asokoro
area within the Legislative quarters, some areas in Lagos
Island, Ikeja, and some other areas. It
has a lot of advantages just like any other pre-paid arrangement As it
affects PHCN, there are bottlenecks
It could be high, it could be low but
then it is equally a policy for PHCN to
know the quantity of energy delivered and the amount realised so they have to work hand in hand. That
is why we are making this
comment. It doesn't mean you pay high.
EVER heard the name NEPA11? Do you know that the person carrying ladder or climbing the Power Holding Company
of Nigeria (PHCN) pole in front of house might not be a PHCN worker? Or that person asking you to pay or contribute certain amount of money to get serviced could be part of NEPA II? In this interview, General Secretary of National Union of Electricity Employees (NUEE) explains who the
NEPA II personnel are, how they and others are not only creating bad image for PHCN, but also sabotaging efforts by the organisation to provide electricity for Nigerians. He spoke with Victor Ahiuma-Young & Ebele Orakpo of Sweet Crude, a Vanguard Newspapers monthly review of the N i g e r i a n e n e r g y i n d u s t r y .E x c e r p t :Since the pilot testing of the Pre-paid metering by power holding company of Nigeria (PHCN) begun, there has been a lot of controversies associated with project. Today, there are insinuations that it has been stopped because of allegation that organisation is no making money from it as before. How did it start, what is the position, and how involved are the main workers of P H C N i n t h i s p r o j e c t ?Well, I think the prepaid metering system is not new. It has been in operation in advanced countries based on advancement there and advanced technology.
It's equally has been introduced in Nigeria. They are being used in some places in Asokoro area within the Legislative quarters, some areas in Lagos Island, Ikeja, and some other areas. It has a lot of advantages just like any other pre-paid arrangement As it
affects PHCN, there are bottlenecks. In the first instance, they are contracted out to some companies. Some of their workers are not staff of PHCN because ordinarily, the technology should have waited for sometime for the training, retooling and up-skilling of the staff of PHCN to enable them cope with this new technology. But it was introduced and those companies contracted are installing it. It has been experimented in some places and the argument that PHCN revenue is going down because
of it is in order. I can tell you that the technology is affecting PHCN's revenue. If PHCN generates 20 megawatts and it is calculated based on, may be N6.00 per megawatt instead of per unit, per kilowatt hour or N4 per kilowatt hour, if it is calculated based on that, PHCN knows the amount it's going to make on 20 megawatts but you now see a situation whereby these contractors now go into a separate arrangement with the owners of individual houses to sabotage PHCN. For instance, if you are installing a pre-paid in a particular house, the contractors will agree with you that you only put prepaid on lighting points alone.
The air conditioners, freezers and others should be on direct connection. They will just do what is called shunting on direct connection so that the prepaid metre will be reading on the lighting points which at the end of the month you may not have even N300 or N 4 0 0 . T h e a r e a s w h e r e t h e consumption level is supposed to be high, you are using light direct at no cost to the consumer. So in those areas where this experiment was conducted,
we saw the revenue nosediving and they could not cope. I don't know how they are managing. I know equally that they have not stopped the arrangement. It is still on. But there are equally bottlenecks in terms of what some of these companies were asking for (because it is not only one or two companies) before they start the installation. It has not been a perfect arrangement. I know of a company for instance that was supposed to cover Ikeja and some other places; at a stage
at the union level we said we were not going to allow them in until the con t r ac tua l ag reemen t s were streamlined. You see a company that is supposed to take 3% of the total revenue for installation of prepaid metres of may be Ikeja zone, and the contract now allows him to collect the whole revenue (100%) of Ikeja zone and pay the zone 97% and keep 3%. At that point, we said no, it is the dog that will wag the tail. The job is mine, you are working for me, I should pay you and not you paying me and your money there is just 3%. Why must the whole revenue come into your account before you now pay me? Because it is from that 100% that is coming that you are going to run the industry, that is where salary will come from, that is where everything will come from. We even went to court and the matter dragged and dragged. I'm not sure it has even been sorted out now.
Those are some of the issues, the bottlenecks I mentioned earlier. Some of them are man-made that could be corrected. But you see, this is Nigeria and when the prepaid metre came initially, during the last administration (under
Obasanjo) even in the Legislative Quarters, legislators were seen tampering with it.
So we need absolute re-orientation of Nigerians on how to use this metre to avoid cheating. It's not just with the prepaid metre, even with the normal metre, people still find a way of tampering with it with the help of PHCN staff so that they pay less than they consume. Some people even see this as response to PHCN's so-called crazy b i l l s ?What you have mentioned now is a case of sabotage and we all must be involved in
tackling it because assuming this revenue is not coming in, when your metre goes bad, or the transformer goes bad, nobody will maintain it for you. You see, it has a pay back time. Assuming there is no money coming in to that district and the transformer in that district is bad, where will you even get light first and foremost, not to talk of whether you are paying N1 or not, or you are tampering with metre or not? So if the revenue is not coming in because the metres were tampered with, it then means nobody will serve you and I think that is where we call on Nigerians to please report this calibre of people to appropriate agencies. What about a situation where meters are not read, yet crazy bills are sent to consumers? On the issue of not reading their metres, I think there is a problem there. The issue is that Nigerians are benefiting from this fraud, that is why they are not complaining. It's a two-way thing from what I'm seeing now. People will tell you about crazy bills, when they see it is above what they should pay but when they deliberately collude with some criminals within the system or outside (because most of the people you call staff are not. Some are sacked staff. We
have what we call NEPAII now. Two thirds of those that climb the
poles are not even staff because for sometime now before the coming of civil rule, PHCN has not recruited people and we have been telling them that this has a way of back firing. You see in most cases, even for official jobs, they get people here and there either on casual arrangement or whatever, to climb the ladder so those people are doing a lot of disservice to the system. When people are paying less, there is
no crazy bill because they are benefiting from the fraud in the system; but when you charge them higher, they will begin to shout crazy bill. My own understanding is that an average marketer must read his metre and if you are a good citizen, you must insist; “Gentleman, you must read my metre, whether you are giving me less or more, I may not be willing to pay but a t l e a s t , l e t m e k n o w m y consumption.” But you see, since there is a way out, people prefer to pay less.There is no doubt that the pre-paid metering is reducing revenue capacity of PHCN as people can not only control their level of consumption, but when there is no power, the meter does not read. The recharge cards are sold in PHCN's offices, yet you said it is contractors that are handling it and if there is fraud in it, it must involved PHCN staff? The fraud is not at the card level. It is done at the point of installing the metre. Recharge card has nothing to do with it. But some people either through the landlord or through the people living there collude with the people installing it and they say: “Do this for me.” What I am saying is what we have discovered. But you see, that does not mean that pre-paid is a policy for you to pay high, far from it. In fact,
Nigeria tangled distribution grid
16Freight
Over five years after the Cabotage law meant to assist local ship owners t o b e n e f i t f r o m freighting of goods
within the nation's coastal area (especially petroleum products), Nigeria ship owners are now even worse off, even as the government enforcement agency (Nigeria Maritime Administration and Safety Agency) is alleged to have compromised and are turning the other way to give their foreign counterpart a free hand to operate unhindered.
Sweet crude checks revealed that all petroleum products imported into the country are brought by big mother ships that are not able to berth by the port quay apron to discharge their products because of the shallow nature of the channel and as a result smaller vessels are needed to bring in the products to the various tank farms.
All such operations fall under the Cabotage act and therefore should be carried out by local ship owners but they are denied this privilege. To benefit from the enabling law, indigenous ship owners had come together under the aegis of Indigenous Ship-owners Association of Nigeria (ISAN), led by Chief Isaac Jolapamo as its Chairman.
However, the celebration and joy with which industry operators greeted the supposedly beneficial law, not only to indigenous ship owners but also for the country's economy, gradually waned owing to the reality on ground.
Further checks revealed that the first problem faced by operators was the inclusion of the waiver clause in the law which was not discussed or mentioned during the formulation stages leading to the passage of the bill at the National Assembly. The clause empowers the Minister of Transport to grant waiver to any ship which does not meet the above criteria if indigenous operators do not have the capacity in consideration. There were complaints that the waiver was being abused in favour of foreign ship owners who have capitalised on it to dominate the Cabotage trade in country.
What started gradually with
CABOTAGE:
Millions lost to bunkering operations ... Enforcement officers look the other way
complaints from operators and denial on the part of government, eventually snowballed into an outcry by ISAN and other operators who lamented the fact that they are worse off than they were before the law came into effect.
Chairman of ISAN, Chief Isaac Jolapamo, had told Vanguard in a previous interview that the nation's coastal water was being dominated by foreign flagged vessels whom he described as cowboys.
The ISAN Chairman said these people operated unchallenged by the authorities and have even gone as far as taking over the little businesses that use to come to them before the Cabotage law. The area which is most lucrative in the coastal business trade is the oil lifting which spines billions of Naira annually but until about a year ago was a “no go area” for local ship owners.
The management of the Nigerian National Petroleum Corporation (NNPC) has been accused of ruling out participation of ISAN members in bunkering operations on the grounds that they do not have capacity both in terms of standard vessels and personnel to freight their products.
Jalapamo's response however, is that the allegation is untrue. He said that with a contract from NNPC, local operators could either charter a vessel or get a bank to provide the financial muscle to acquire one.
However, the situation has since changed as indigenous operators are now owners of very good ships that cannot be ignored by the government agency. Despite the intervention of the management of the Nigerian Maritime Administration and Safety Agency (NIMASA), the situation has not improved for indigenous ship owners.
When contacted, Dr. Levi Ajuonuma, the Group General Manager, Group Public Affairs of NNPC said he does
not have the details and asked our correspondent to call back later. However, when contacted later, he told Sweet Crude that there is no policy by NNPC to exclude local operators from lifting petroleum products of even crude oil.
Ajuonuma pointed out that the
Cabotage law was specifically made to protect indigenous operators and that it would be out of place to exclude them. He however noted that they have challenges in the sense that most of the ships owned by local operators are old and not good enough to attract insurance.
He further explained that because of the expensive nature of petroleum products which the ships are supposed to carry, it would not be right to ship them in a ship which cannot be insured. For any vessel to be patronised he said, such ships most be certified and also must be seaworthy.
Reminded that there are some Nigerian operators who have certified and seaworthy vessels that are even sea going, the NNPC spokesman said that the business is a competitive market. Asked to mention any indigenous owned vessel that has enjoyed NNPC patronage, the phone line went dead and efforts to reach him again proved abortive.
Another member of ISAN who spoke with Sweet Crude on the condition of anonymity, however shifted the blame for the failure of the Cabotage law to the door step of the NIMASA whom he said does not know what they are doing. “They go about the implementation in a way that it is against local ship owners.”
Some other indigenous ship owners agreed with him, noting that instead of empowering local ship owners, NIMASA is focusing on revenue collection which places them at a disadvantage. They explained that most of them have gotten letters from the implemen t ing agency o f noncompliance and are slammed with fines ranging from N15m to N40m but stressed that their foreign counterparts easily pay whatever fines that are placed on them for contravening the
Cabotage law because they (foreign ship owners) do not only have the money but also know the financial benefit that is accruable to them.
They noted that as a result, the foreign ship owners have now taken over the Cabotage trade especially as it relates to bunkering petroleum in the country.
Vessel acquisition:Another duty of NIMASA which
they are also neglecting according to the local ship owners is the creation of opportunities for vessel acquisition. They pointed out that after the collapse of the Ship Building and Ship Acquisition Fund (SBSAF) Scheme and the clamour for another because of the important role of ships in any nation, NIMASA again initiated the Cabotage Vessel Financing Fund (CVFF) which is supposed to be managed by commercial banks in the country.
They however regretted that government bureaucracy has slowed down its implementation even after several promises of a commencement date. Members of ISAN have complained about the delay by the Ministry of Transportation, the supervising ministry, even when the commercial banks are ready and waiting for the commencement date.
Captain D. O. Labinjo, Secretary of t he Ind igenous Sh ip owner s Association of Nigeria (ISAN), at a recent function in Lagos said that the foreign ship owners generate all form of obstacles to ensure that they do not lift petroleum products - one of which is the issue of P&I club certification which the foreigners know they cannot get.
Local ship owners have even leveled allegations of financial gratification from foreign ship owners to officials of NIMASA for the purposes of allowing them operate exclusively. But NIMASA has been steadfast in denying this allegation.
However, a Director of NIMASA (names withheld) was recently accused of collecting N500,000.00 from an operator. The Director who was at the time in the United Kingdom on study
By Godfrey Bivbere
The management of the Nigerian
National Petroleum Corporation
(NNPC) has been accused of ruling
out participation of ISAN members in
bunkering operations on the grounds that they
do not have capacity both in
terms of standard vessels and
personnel to freight their products
Bunkering Vessels
17Gas
AS the nation moves towards optimal gas utilisation process, stakeholders in the oil and gas sector have
charted a path to achieving the much desired goal through the 15 firms recently short listed by the Nigerian National Petroleum Corporation (NNPC).
The firms, which are listed as core investors in exploration and production of the nation's abundant natural gas reserves, are expected to submit proposals to the government on how they will work with NNPC to develop the domestic gas sector in the coming weeks.
This development has attracted reactions from the stakeholders in the sector, who believed that the short listed companies should be critically monitored and geared to display their undoubted integrity in implementing gas development projects in the country.
The Minister of State for Petroleum, Odein Ajumogobia has pledged that his administration would work with these firms to help build three major gas gathering plants and pipelines that would provide enough supplies to the nation's ailing power sector.
The dwindling fortune of the nation's power sector has been locked with inadequate gas utilization facilities, as some of the fully or partially completed power stations across the nation are presently lying_fallow owing to shortage of gas supply.
Reacting to this, the Principal Consultant of Lonadek Oil and Gas Consultant, Mrs. Ibilola Amao c o m m e n d e d t h e N N P C f o r eventually short_listing such credible firms with good track record in the industry.
She, however, noted that the Federal Government should do everything possible to ensure a conducive operating environment that would enhance the performance of the energy companies, noting that no slight shortcoming would be welcomed from any of the licensed firms or government officials.
Her words, “I am very encouraged. We have a list of very credible gas focused organisations intending to do business within Nigeria. I demand that a website is opened immediately and a credible prequalification, audit and tendering process begins, so as to restore the credibility of Nigeria's
contracting process so that we can see an increase of Foreign Direct Investment through the promotion of integrity, equity and fair play.
“ W e r e q u i r e t h a t t h e plans/activities with timelines are publ i shed such tha t budget expenditure and performance can be monitored from one government to another as gas plans and projects have tenures that will surpass the
Gas investment: Stakeholders set agenda for Govt
tenure of any government,” she said.G r o a n i n g f r o m t h e p a s t
experiences, Amao warned, “Let it be clear that Nigerians will find it very difficult to forgive any blunder, mis_appropriation of funds or non_performance of the contractors and government officials, because
we are eagerly in need of a vibrant gas_driven power sector to kick_start or jump_start our ailing economy.”
Nigeria is estimated to have natural gas reserves in excess of 180 trillion cubic feet, but has been unable to
f u l l y e x p l o i t i t d u e t o mismanagement, a lack of funds and poor maintenance.
The firms include BG Group, Centrica, Chevron, E.O.N Ruhrgas, Gail, , Gas Natural, Gazprom, Global Energy/Hanover Energy, Kogas, South Korea, Oando, PTT PTT.BK. Others are: Royal Dutch Shell, Sahara Energy, Statoil Hydro, Union Fenosa, Spain.
In his own summation, Shell's General Manager, Nigerian Content Development (NCD) Mr Eddie Wikkina opined that the Federal Government should develop a political will towards the gas master plan and give the investors a chance to operate freely without any political influence.
“How serious is government with this gas master plan? Will this be another lip_service to be mingled with their usual political rhetoric? In Nigeria, every thing is subsumed by politics, and so nothing works. It is
only when the political class stops meddling in technical and industrial issues that we can expect some level of progress to be made.
“Will these 15 core investors be given contracts that will not be tampered with by present and future governments? Will they be given incentives and fiscal enablers to allow them bring in investments, without of course selling the country? Will they be given free hand to operate systems that will ensure success? These are some of the issues that need to be addressed to give investors the comfort needed for them to invest in gas energy and development.
Wikina however said it is high time the government realized the past mistakes and build a solid foundation of sustainable energy (electricity) supply, so that the much needed development would not be a mirage. He noted that it is the energy that powers industries that create employment, provide research opportunities, produce commodities for the markets for use of the common man and grow the Gross Domestic Products (GDP).
Nigeria is estimated to have natural gas reserves in excess of 180 trillion cubic
feet, but has been unable to fully exploit it due to mismanagement, a lack of funds
and poor maintenance.
By Yemie Adeoye
A liquefied petroleum gas tank farm
18Gas
Nipco launches Gas powered vehicle in Nigeria
ANOTHER landmark was recently recorded in the nation's gas industry recently, when the Nigerian
Independent Petroleum Company (NIPCO) championed an initiative that would allow Nigerians power their vehicles with Liquefied Petroleum Gas (LPG) as alternative to petrol.
NIPCO, a major player in the downstream sector of the nation's oil and gas industry, has always being at the forefront of introducing gas powered vehicle in Nigeria, when it pioneered the use of Compressed Natural Gas (CNG), which is at advanced stage.
Eventually, it recorded a break through on the use of LP gas, which is generally known as gas for domestic use, but now could also be used to power vehicles, after a minor conversion.
Affirming this, the company recently organized a public demonstration of LPG as alternative fuel using prototype Peugeot 307 and Honda CRV cars to intimate people
on the use of LPG for powering vehicles and the attendant benefits. Besides, the product is currently being used to power some of the company's fleet of cars.
The new technology, which was also demonstrated at the Nigerian National Petroleum Corporation (NNPC) in Abuja recently, received accolades from the NNPC chiefs, including the minister of state for Petroleum, Mr. Odein Ajumogobia.
Confirming its fuel efficiency, NIPCO said LP gas automotive fuel in a Peugeot 307 car runs 10 km per litres, while in CRV Honda, it runs 80 km per liter.
Apart from the fuel efficiency, LP gas as an automotive fuel has many benefits including lower engine maintenance and running cost, dual fuel liberty, environmental friendly etc.
According to a statement issued by NIPCO's Corporate Affairs Manager, Mr. Taofeek Lawal, and made available to Vanguard in Lagos, the measure is expected to encourage
Confirming its fuel efficiency, NIPCO said LP gas automotive
fuel in a Peugeot 307 car runs 10
km per litres, while in CRV Honda, it runs 80 km per
liter
greater use of the abundant gas resource in the country and assist to reduce the large volume of petrol and diesel imported for domestic consumption.
At the demonstration inside the basement park of the Nigerian National Petroleum Company (NNPC) in Abuja, the minister of state for Petroleum, Mr. Odein Ajumogobia said the initiative is a welcomed development in view of the challenge of fuel crisis across the country.
He noted that the use of LPG to fuel vehicles will reduce the quantity of petroleum products importation by government, thereby saving foreign exchange for the country, apart from being a cleaner energy which other nations are now adopting.
The Minister also pointed out that the successful switch to cleaner fuel like LPG would reduce the pressure on the distribution system of p e t r o l e u m p r o d u c t s i n t h e downstream sector of the nation's oil and gas industry.
Ajumogobia in the course of his demonstration exercise pledged that government would work towards ensuring that LPG automobile fuel is affordable to Nigerians, guarantee its safety and put in place mechanism that will address the availability of LP gas in sufficient quantity for general domestic use.
He commended NIPCO's effort on the noble idea, noting that the demonstration would let Nigerians know the numerous advantages and benefits of using LP gas as an alternative fuel.
NIPCO's effort in the use of LP gas is being actualized with her state of the art LPG plant on Dockyard road, in Apapa area of Lagos backed by enormous transport infrastructure of about 30 bulk tankers to convey the product across the nooks and crannies of the country.
A similar pioneering effort of the company in the area of gas ut i l izat ion is the on going construction of Compressed Natural Gas (CNG) stations in Benin, Edo State , some of which are billed for commissioning in the 3rd quarter of 2009.
A gas station
19Community Development
Robin Yassin-Kassab is young, audacious and the brilliant author of the fictional work,
The Road from Damascus. Born by a Syrian father and an English mother who both raised him in 'decadent' England, the contradictions inherent in a nationality (and religion) defined for him, an upbringing carved out in a morally relaxed environment and an education that is precise and almost intolerant of commodities that are not empirical, are etched graciously on the lovely pages of his book. He dances with insecure atheism, the comforting facility of agnosticism, outright unbelief and the international politics of religious identification. Without offering up the merits of the doubts created by unbelief , agnost ic investigations and the ever multiplying varieties of 'authentic' religious dogma, he does a masterful denouement which adopts the simple course that everyone needs some religion or would ultimately come into the need for a religion.
In 2003 some young indigenes of Nigeria 's Niger Delta region, challenged by the gradual recession of Nigeria's federalism into the likeness of a unitary system and her tender d e m o c r a c y i n t o a n e l e c t i v e totalitarianism, declared a war of attrition against the Nigerian state. They formed the Movement for the Emancipation of the Niger Delta (MEND), demanding a reversion of the federal structure to the old 1963 type and a revision of the legal instruments of ownership that communalised their privately owned property. They claimed, rightly in my humble opinion, tha t the des t ruc t ion of the i r environment, the undermining of their occupations and the threats to their continued existence, all emanating from negligent seismic, excavation and drilling activities, are all collateral damages accruing from the seizure and assumption of their proprietary rights over resources they had owned totally when Nigeria started off as a nation. Consequently, they have stuck with changing the laws of ownership, reasoning that they would roll out better rules for the exploitation of their lands and supervise the application of the rules more closely when they resume ownership and control. As the method of protest they are avowed to is violent confrontation, the enemy being determined and entrenched and as they share commonality more in their many losses (property, occupations, peace, dignity, etc) than in ethnic and linguistic affinity, it was clear they would require a rallying point, a common comforter: a religion.
From the newspaper reports we have read of MEND, its leaders are as educated and as cosmopolitan as a Yassin-Kassab, so that it leaves one to wonder how Egbesu, the Izon god of war was adopted informally as the protector of the rank and file of MEND. Egbesu for the records is believed to play the same basic roles as any other gods. His followers claim Egbesu is first protective but also very aggressive and offensive. He is however unique in many more respects, one being that Egbesu's amulet, the asamwana, makes the soldier invisible and impervious to
Egbesu, the fiery militantinjuries from bullets, bayonets, matchets, daggers, etc. Like many other gods Egbesu can abandon the faithful who flouts the rules of the faith or warfare. It is a measure of their faith in Egbesu that they always blame the loss of a soldier on the battlefield to womanising, treachery to the cause, revealing Egbesu ritual to non-initiates but never tactical error, superior tactics or fire power or the impotence of E g b e s u ! T h e m o r e c a u t i o u s practitioners of the Egbesu faith wear bullet proof vests under their military fatigues so that when they unwittingly flout the many imprecise rules of the faith, rules which multiply as many times as soldiers are lost, they could still enjoy other assurances. And while the soldiers of MEND are killing and being killed for a cause they would serve more effectively alive, the Nigerian state is moving, not necessarily ahead but in a such a manner to suggest that MEND is failing; other 'militants' are selling crude, kidnapping expatriate and local oil workers, children; some other 'smart' militants are 'going clean', accepting political appointments and posturing as 'moderates'; the Niger Delta which is the object of their anger, patriotic zeal and sacrifice has in consequence of their violent activism, lost its identity, its vivacity and several hundreds of corporate tenants with the implications that portends for life and living in the region.
I am naturally inclined to believe that the boys in MEND are acting in good faith, that they were forced into protest by factors they could no longer accept
meekly, that they are truly and indeed the victims of the acquisitive, avaricious and imperialistic tendencies within the power bloc of the Nigerian state and the general lethargy of the corpus of their own leaders and peoples. I would go no further because the mode of protest, the tools of protest and the theatre of protest need be chosen with del iberat ion and consideration for the overriding good of the beneficiaries of the protest, including of course the self- sacrificing soldiers of MEND and her sister bodies. I would not join those who demonise or satirise or put down every credible local protest as a glory hunt; the world remembers the stark ribs and ulcers of Mohandas Ghandi and William Wilberforce without imputing they suffered also for a few pages of history. The arguments of MEND are credible, honourable and proper just as much as the travails of Kongi in the foothills of Ekiti, the latest victim of the Nigerian demon. Being a Nigerian and indeed an indigene of the Niger Delta, I may be acting within the limits of my social obligations if I were to demand it is time MEND abandons the violence and engages the Nigerian state in smarter, more efficacious and more environmentally friendly methods.
As for the worshippers of Egbesu I am very reluctant to deny them the fulfillment they enjoy in their worship and I sympathise with their need for religious identification and spiritual comfort even though the bare statistics show they would sooner require a new spiritual strategy. Men of goodwill all over the world must however stay focused on the bigger evil of the theft and retention of a people's resources for communal use without any form of interface, in peace time, in a multi-ethnic society, in a federalist political structure and in a free market .
Implications of military onslaught on Ijaw
communitiesBy Jimitota Onoyume
some Ijaw communities in Delta state. And suddenly my mind went blank after I raised the thrust of this piece before a colleague who sauntered into my office for any newsy gist in town. Like an outburst, his response to my question was, “why should it always be Ijaw communities that are attacked by soldiers in the region. Are there no other ethnic nationalities in the Niger Delta?”
It then struck me that in 1999, Odi, an Ijaw community with about five thousand residents at the time, was completely razed down by soldiers who stormed the area. The invasion was genocidal in all sense as several innocent lives were consumed. In 2005, Odioma, another Ijaw village suffered a similar fate. It reoccurred again in 2008 at Agge, in Bayelsa state. Although that of Agge may not have been as severe as the other two cases, in less than one year after the Agge saga soldiers again resumed hostilities precisely on May 13 on militant camps in some Ijaw areas of Delta state. According to media reports, they extended to the nineteen kingdoms of Gbaramatu, Oporaza few hours later. Local sources said no fewer than three thousand civilian residents were displaced about three days into the air and ground raid by the soldiers. The sad development coincided with a festive period in the community so there were influx of natives and friends of the community from far and near that came for the event. Media reports had it that no part of the communities was spared as even civilian settlements came under heavy shelling. At the time of this piece ,reports had it that the onslaught was still on so the magnitude of loss in terms of human and properties in these areas could not be aggregated.
It would be recalled that sometime last year soldiers under the aegis of the Joint Task Force also stormed Okrika searching for an alleged militant leader,
PORT HARCOURT: His Royal Highness, the Ovie of Agbon K i n g d o m , O k p a r a I ,
Ogurimeme, has urged the newly established Agbon Progress Union to pursue with vigor the erection of a permanent palace for the traditional ruler of the kingdom in Otorho Agbon (Isiokolo).
The Ovie who spoke at the inauguration of the first executive of the body said he was elated with the formation of the structure as it would bring about the much sought unity among the various clans of the kingdom. Represented by Chief Imo Otite, the Ovie recalled that the first attempt to have an apex body for Agbon people in 1952 failed soon after the idea was mooted. He enjoined the new leadership to ensure the new structure succeeds.
In their separate remarks, Senator Eferakaye, and the Chairman of Ethiope East local government area, Chief Tony Oboroh lauded the formation of the body. Senator Eferakeya specifically charged the body to promote peace and unity in the kingdom. On his part, Chief Tony Oboroh reminded the leadership of
Urhobo move to build palace in Otorho Agbon
the body and the people of the kingdom that the structure should not be mistaken for an alternative political party for the kingdom. He assured that the Council would partner with the new structure to erect a permanent palace in Otoro Agbon (Isiokolo) for any king of the kingdom.
Chief Johnson Barovbe was the chairman of the day. Like others, he also harped on the unity of the area.
Speaking on behalf of the all male executive, the President General of the structure, Chief Dr. P.C. Obakponovwe lamented the disunity he said had existed in the kingdom and promised that the new structure would promote the values of oneness among people of the area.
“The loyalty in Agbon is at sub clan or individual town levels. Divide and rule works perfectly well in Agbon because nobody sees Agbon as his own”“The emergence of Agbon progress union is meant to be a solution to t h e s e v a r i o u s o b s e r v e d shortcomings. The aim is to foster unity of Agbon people who will trust and rely on each other,” he said.
PORT HARCOURT: I PLACED my fingers on the keys of my laptop to begin this piece but the
keys hardly responded. Apparently because of the military onslaught in
Ateke Tom. Curfew was imposed in the area for weeks.But why are Ijaw communities the only ones so far invaded by soldiers since the advent of democratic governance in the country? Like my colleague I am very sure many with similar sentiments
would readily say because they drive the near violent agitation in the region. They say this either due to poor understanding of the level of underdevelopment in most Ijaw communities in the region or they just want to ignore this fact. Ijaw are certainly not the only ethnic group in the region but it is an issue of fact that their areas are the worst underdeveloped in the region owing to g r o s s n e g l e c t b y s u c c e s s i v e administrations in the country. And sadly enough, most of these neglected communities produce what sustains the na t ion ' s economy and crea te development for areas outside the Ijaw communities, what a paradox. I wonder what else can be more provocative. Militancy that has grown into a monster in the region is a product of a failed political leadership in the country that has continually offered the people vain promises. May be it would be necessary to note that in the Niger Delta, Ijaw communities are mostly located in the fridges of waters and mangroves. They probably chose the path of violence after learning from the experience of Movement for the Survival of Ogoni People under the leadership of Kenule Beeson Saro-Wiwa. It would be recalled that MOSOP sensitized and globalised the p l i g h t o f t h e r e g i o n u s i n g environmental devastation arising from oil exploration in Ogoni land as a case study. The protest and agitations were peaceful in all sense. But it ended on what many continually describe as a tragic note since it consumed its best brains, including Africa 's celebrated environmentalist and writer, Ken Saro-Wiwa who was hung after what many termed a bugled judicial process.
It should not be misunderstood that this piece is entirely intended to glorify the sad and evolving culture of militancy in the region.
John Owubokiri
Armed militants
20Community Development
We can overcome militancy - Horsefall
PO R T H A R C O U R T : Rivers state government recently established a Social and Rehabilitation Committee with Chief
Albert Horse fall as chairman. The body among other things is to identify militants in the state and transform them into useful citizens. The body has set up a retraining centre in Okehi in the state and has enlisted about three hundred students for various training programmes.
These students were first sent to an institution in Jos man by the Man O War Bay where people are retrained on citizenship and leadership. After about one month at the institution they are now back in the state.
In this interview, Chief Horsefall tells Jimitota Onoyume of Vanguard Newspapers the plans of his Committee for grandaunts of the institution in Jos. And what other plans they have for reformed militants in the state.
Chief Albert Horse fall was the former head of the defunct Nigerian Security Organization (NSO) and later Chairman of the defunct OMPADEC.
How far has your committee gone sir?
We are at the second phase of our programme that is the aspect of skills development and further reorientation of the youth. We are engaging experts, missionaries, psychologists and moral instructors on one hand and other experts for the various skills. The reformed militants are to be trained on mechanical, civil, electrical, and engineering, tailoring etc. these are all going on now.
We are driving towards self employment and self actualization for the reformed militants. University of Port Harcourt is giving us technical skills in plumbing, welding, electrical, civil etc
The instructors from the university are at present at our Okehi dealing with the theoretical aspects after which they would move the students to the University for the Technical. The third thing we will do this period is to ensure there is a proper functional disciplinary rule to guide what we are doing. We are about to build a demonstration farm at the institute, fisheries, poultry, piggery etc. all these will be in place within the next two weeks.
We have decided to do with support from all and sundry. Rivers state government is funding our operations but we expect that this problem being a national one, it affects all. So i n d i v i d u a l s a n d c o r p o r a t e communities should partner with us to solving this problem. They should donate to us things like workshop, model farms, fisheries etc. They should give workshop on fitting, plumbing etc. I have spoken to the Minister of Niger Delta and given him our blue print; many of the things they came up with recently in their advertorial are part of what we gave them. I expect a concerted effort by states, regional levels and the federal government, we should come together to solve this problem once and for all.
You t a lked abou t t r a in ing programme for your students that are being organized with manpower from the University of Port Harcourt . Will
they be issued certificate by the university at the end of the exercise?
Ours is a crash programme. So there will be no university degrees or certificates. At the end of the day they would be given testimonials to show they participated in a programme. We have also asked the federal ministry of labor that is responsible for testing skills of artisans to come and test our students at the end of their course and then issue cert if icate to our grandaunts. The ministry does for artisans.
How many students do you have for the training now?
We have three hundred students now. And a lot are still waiting in the wings. As soon as we have capacity to take more we will do.
There are several other NGOs in the state in this task of reforming militants. Are you in touch with them?
We are in touch with some of them. I want to say that they can come and use our facilities to promote themselves. The problem is a tragedy so we should face it selflessly. I am inviting them again, all those concern with training of these youths to come and join the programme we have. We will take their students. You can see that no other body has met what we are doing from the beginning to the end. We want to reform these boys so they could lead normal lives. To ensure the grandaunts use the loans successfully we will monitor their development. Some of them could also be employed in other sector. We will follow them through to the end. So the programme we have is comprehensive and will solve the problem of militancy.
Comment on militancy in the region and advice on the situation
Militancy is a very general word. I feel those that started it were nationalist but it has been infiltrated by criminal elements. I don't believe it is the nationalists that are into kidnapping because that has nothing to do with the agenda for the region. I believe that militancy is now been used for all and sundry. The intellectual militants are those who chose nationalistic course because they felt oppression in the region.
Federal government should provide security and defense. They are its job. F e d e r a l g o v e r n m e n t s h o u l d coordinate and fund efforts by the state government to curb the menace. Not many state government knew what we (Rivers state Social and Rehabilitation committee) are doing here until the last economic summit that held in Calabar. I advice they (states) come for support, we can admit their students if they are not set to take off yet. Or they can come for our model to guide them start something along the line.
This problem of militancy, hostage taking etc is a national problem. When we accept it as so, then we are in the process of solving the problem. The problem can be solved so there should be no thoughts like it can't be solved. The country should face the issue with confidence and courage. It is only the federal government and the state governments that can come up with programme to provide jobs. There should be public private partnership in the provision of jobs. Job creation will help the situation a lot.
The instructors from the university
are at present at our Okehi dealing with the theoretical aspects after which
they would move the students to the University for the
Technical
JTF operatives on patrol
GBARAMATU, an Ijaw territory in Warri South-West Local Government Area of Delta State in presumed to be one of
the richest kingdoms in the country because of its huge deposit of crude oil but the people cannot be said to be reaping the bounties of crude oil at the moment. If you take away the first letter c from the five-letter word, crude, what remains is rude; meaning offensive, that has been exactly their take from it for about three weeks now.
September 10, 2008, the Bolowei (Prime Minister) of Gbaramatu kingdom, Chief Wellington Okirika, who is the chairman of the Delta State Oil Producing Areas Development Commission (DESOPADEC) told guests gathered for a chieftaincy ceremony in Oporoza, the traditional headquarters of the kingdom, founded several centuries ago, that its patriarch, Oporozawei, who gave birth to several children that later left to found various kingdoms in far-flung climes, including Gbaran (Bayelsa State ), Kabo, Kabowei (Patani, Delta State ), Kubuwei, Arogbo ( Ondo State ) and the Urhobo Kingdom of Uvwie in Delta State , among others. Today, things are different; it is the Gbaramatu people that have been conquered, they have deserted their homes, seeking refuge in far-flung kingdoms, in the bush and in the cave. Even the prime minister himself is dazed by the unannounced war. His house in Kunukunuma and many others were torched in the offensive.
Gbaramatu boasts of eight flow stations – Abiteye, Makaraba and Otunana, operated by Chevron Nigeria Limited as well as Jones Creeks, Egwa I and II, Odidi I and II operated by Shell Petroleum Development Company (SPDC), an intimidating oil credential indeed, and by all standards, the people should not be complaining of poverty if the resources were well utilized, particularly as the DESOPDEC was set up to serve their needs and those of other riverside oil communities But at a time the kingdom was supposed to be celebrate its Amaseikumo festival, which means good living, peace , unity, prosperity and protection to the people of the communities, things fell apart for the people, peace eluded the kingdom and the chief priest could not wait to consult the deity on what has gone awry. It is no longer news that the people of Gbaramatu kingdom, including Okerenkoko, Oporoza, Kunukunma, Kuritie, Opuedebubor and others have fled in thousands over the Cordon and Search operation embarked upon by the Joint Task Force (JTF) on the Niger-Delta, which had used cannons and rockets to strike houses in the communities. Some of the fleeing pregnant women delivered in the forest and for the intervention of the Delta State Rehabilitation Committee, headed by Chief Kingsley Otuaro, also a Gbaramatu leader and the National Emergency Relief Management Agency (NEMA), a number of them would have died of hunger. Some of them are still trapped in the bush more than two weeks after the trouble started.
CauseThe present crisis that has devastated the kingdom started on Wednesday,
Curse of oil! Gbaramatu people flee as JTF chase militants
May 13, when some militants, which the JTF believes were working to the knowledge of most people in the kingdom attacked some Nigerian soldiers on escort duty in the creeks. Thought, the task force preferred to say that the attacked soldiers are missing in action (MIA), but, the naked information is that 18 of them, a Lieutenant, Major and 16 others had been ki l led. One High Chief Government Ekpemupolo, alias Tompolo, a Gbaramatu leader and also a militant kingpin, who was declared, wanted by the task force is the kingpin of group, whose den is known as Camp 5. The task force in bid to track down Tompolo and his private army pursued them to suspected hideouts within the kingdom, and in the process, razed homes of people, forcing virtually the entire population to flee their homes.
Inside the creeksFor 14 days since the crisis started, nobody could enter the creeks, which has been taken over by the JTF. Only wooden boats were allowed to move on the waterways of the state, but, on May 27, the governor of the state, Dr. Emmanuel Uduaghan ventured into the creeks with the Commander of the JTF,
Major General Sarkin Yarkin-Bello. Journalists became the first to break the rule of only wooden boats to be allowed on waterways, as they had to go speedboats, but not without a military escort. The governor, Major –General Yarkin-Bello and others went with aircraft. We left from the waterside of the Nigeria Ports Authority, Warri at about 11.00 am after some initial hiccup on the movement pertaining to clearance and the three-hour journey to Okerenkoko, there was only five fishermen counted by this reporter across four to five communities. Others have fled.
Armed soldiers were in the creeks with gunboats and nobody could pass without their gaze. Except for the sound of the three engine boats carrying the journalists and soldiers, the soldiers occupied one speed boat while the journalists, including the chief press secretary to the governor, Mr. Sony Ogefere and the press secretary, Warri, Mr. Linus Chima shared themselves in the other two speedboats.
It is only when you venture into the creeks that you will understand the claim by the JTF Commander that the task force has dominated the
Gbaramatu kingdom. Nowhere did it manifest than Okerenkoko community, which from findings so far, is the worst hit among the communities.
Okerenkoko, worst hitAs at the time journalists passed through the community on Wednesday, May 13, some of the buildings were still smouldering two weeks after the raid on the community, where the JTF said the uniform of a Lieutenant and rifle of a soldier, said to be among the 18 MIA soldiers were found in a community shrine. Though, the vice chairman of Okerenkoko community, Mr. Sherack Otuaro debunked the JTF claim, saying the task force was calling a dog a bad name to hang it. Okerenkoko was hit in the true sense of it from what we saw. There is no doubt that the community was bombed and there is practically no way any villager would remain in the community with the intimidating presence of soldiers. They have taken over the town with sentry points everywhere. In fact, the community is like a mini-barrack for now. We could not enter the community because there was no authority to do so, what our military escorts did was to obtain permission from those on ground for us to move on. Even at then, we were stopped and the boat driver asked to pull his shirt by one of the menacingly-looking soldiers to find out whether he was tying anything on his waist like some of the militants. It was after he passed the test that we were asked to go. Before then, the journalists were asked to produce their identity cards and they told us to thank our stars.
Notorious Camp 5Camp 5, the den of Tompolo, which the militants claimed to have reclaimed at a stage after it was captured by the JTF, is effectively under the control of the task force.
It beats the imagination how a group of persons without legal imprimatur could set up such a permanent structure in the creeks with training field for militants, standby diesel generator, living apartments for the commander-in-chief of the camp, his second-in-command and others with an armoury.
Vanguard had visited the camp sometime in the past when some hostages were kidnapped and taken to the den, but, a lot of transformation has happened since then even the roofs of the buildings in the camp bombarded by the JTF.
Behind the camp is a waterway , which Major-General Bello believed the militants used as their escape route when they could not withstand the JTF forces and that area is being closely guarded by soldiers. In fact, the entire camp is heavily manned by soldiers and in the opinion of the commander; it should be turned to a hospital for the good of the people.
He believes that the militant camp represents evil and anybody who is part of it is evil and so, should not be allowed to exist.
The mien of the soldiers on ground in the camp indicate that they are not there to joke with anybody, most of them were stern-looking and they are ready to die than allow militants to take over the camp. Before the militants, who are now on the run, would dare to
The task force in bid to track down Tompolo and his
private army pursued them to
suspected hideouts within the
kingdom, and in the process, razed homes of people, forcing virtually
the entire population to flee
their homes
By Emma Amaize
CONTINUES ON PAGE 23
l-r; Governor Uduaghan of Delta State, Major General Yaki Bello, JTF Commander and the JTF Camp Commandant.
Tompolo’’s House (ASO ROCK)
The entourage Assessing the situation
Securing the area Cover from the Sea as well
22Community Development
23Community Development
YENAGOA - In fulfillment of its community content development initiative the Anglo-Dutch oil giant, Shel l Petroleum Development Company (SPDC) weekend said it had employed over 650 youths from its host communities in Rivers and Bayelsa States.
The company has also awarded more than 130 sub-contracts to community contractors under the scheme.
SPDC General Manager, Social Performance and Community Affairs, Tony Attah disclosed this in Yenagoa in an address at the opening ceremony for the NCTL sponsored Youth Training and Enterprise Programme for Bayelsa youths in Yenagoa.
The SPDC boss attributed the company's gesture to the memorandum of understanding it signed as a result of the NCTL project which cut across 33 communities and settlements in three local government areas across Bayelsa State.
The NCTL pipeline replacement project is a 95km pipeline that runs from Odioma in Bayelsa State to Cawthorne Channel in Rivers State, consisting of 12”, 24'' and 30” oil pipeline network with the communities covered by the project organized into 10 project clusters in line with the GMoU process.
“A GMoU Top-up/FTO agreement had earlier been signed with the 10 project clusters, with sustainable Community Development funding totaling N370m already paid into the GMoU joint accounts for community development projects in Bayelsa and Rivers States.
“Over 650 youths have also been employed from the host communities, while more than 130 sub-contracts have been awarded to community contractors as part of SPDC's community content development initiative,” he said.
According to him, “the new NCTL Replacement Trunk Line project is designed to support Eastern Division oil production growth plan, and incorporate a number of designed and security improvement.”
The NCTL Replacement Trunk Line project he said would have the capacity to evacuate some 350Mbopd at the Western and Central swamp fields of SPDC-E.
On the sixteen month vocational and technical training programme for 78 youths from communities in Bayelsa State which would gulp over N53m he said the programme is aimed at assisting the youths in the state to develop skills as master artisans, set up viable businesses in their local communities and tackle the challenges of stimulating their local economies.
Beneficiaries of the Youth Training and Enterprise Programme (YTEP) he said were drawn from Nembe Ogbolomabiri, Nembe Bassambiri, Odioma and Idema communities all within the Nembe Creek Cluster.
The programme he said would not only help to improve the well being of the youths in the cluster but also prevent them from indulging in destructive lifestyle such as militancy, kidnapping, prostitution and cultism among others.
His words' “the 'out-of-school, 'out-of-work' youth is a major syndrome in
Nigerian content: Shell employs 650 community youths
By Samuel Oyadongha the Niger Delta and many youths now take refuse in violence, militancy, alcohol, gang membership and kidnapping, drugs and prostitution.”
According to him, SPDC would continue to invest substantially in the area of capacity building and empowerment of youths in the Niger Delta region so as to enable them identify and develop their dynamic and realizable potentials to attain and maintain success and also to own their future.
“The SPDC Youth Training and Enterprise Programme is aimed at equipping youths with skills in trades including electrical installation, welding and fabrication, automobile repairs, fashion and design, computer and secretariat studies, catering, printing and lithography and carpentry.
“This 16-month programme begins with a 12-month vocational and training programme run by the Delta State University Consult Services, Abraka. At the end of this practical learning phase, trainees are sent on a four month industrial attachment with master artisans to showcase the craft of the skills they have learnt and the process will be concluded with training o n l e a d e r s h i p a n d b u s i n e s s
development, which comes up at the end of the industrial attachment,” he said.
He further explained that the final certificate for the trainees would be the trade test II & III administered by the Federal Ministry of Labour and Productivity.
The SPDC boss challenged the youths to re-brand themselves and their communities by making something of themselves through the training programme.
He said, “We have had success stories from past graduates from this programme. Some have gone ahead to make a mark in the i r loca l communi t i es , expanded the i r businesses, employed other youths, and gone into fruitful partnerships, which are still growing while others have set up academy for learning and have become instructors in their local communities.” “On the whole, communities where this has happened have seen a boost in the local economies, and we encourage all participants present here to think about that unique effort they can put into making the economies of their local communities better than what it is today.
\PORT HARCOURT : NIGERIANS have been told that the ongoing restructuring in the oil and gas sector is aimed at repositioning the Department of Petroleum Resources (DPR) to meet contemporary challenges.
Acting Director, DPR, and Mr. G.U. Billy Agha who spoke in Port Harcourt during the presentation of long service award to three hundred and seven members of s ta ff sa id some fundamental changes aimed at enhancing productivity were being introduced. “We have moved to a new era of self appraisal/actualization and must develop a new work culture and attitude to work which will enable us deliver on our mandate, as the primary oil and gas regulator in Nigeria . The key to this, is value creation in our various disciplines and this must be accomplished by a good knowledge of the fundamental laws guiding our operations”
DPR honours 307 staff in Port Harcour
By Jimitota Onoyume He continued that to improve service deliver an in house committee on service delivery capacity building and alignment of functions was set up and its recommendation resulted in some restructuring in the organization which finally gave birth to a new organogram
Mr. Bill explained that the long service award was one way the organization rewards deserving staff. “It also complements government's efforts in boosting staff morale by encouraging us all to improve our potentials and give our best”
He said the awardees included some retirees. “ We shall be honoring a total of three hundred and seven recipients in the customary milestones of 10,15,20,25,30 and 35 years, inclusive of retirees who have all qualified for the awards. “
Some of the award recipients who spoke to the Vanguard expressed gratitude to God. “It is not easy to work and be appreciated and rewarded by your place of work. I thank God”, Mrs. C.M. Bello said.
Anglo-Dutch supermajor Shell commenced investigating a leak at a non-producing oil well in the southern Nigerian state of Bayelsa early last month and there is no word yet on the outcome of the investigation.The company gave no details of the amount of crude spilled. “A leak has been reported at Olobiri-2, one of SPDC joint venture's non-producing wells in Bayelsa state," Shell spokeswoman Caroline Wittgen told Reuters.
"We confirmed the leak yesterday and immediately deployed equipment
Shell looks into Olobiri leakto prevent crude spread, pending investigation into the cause and repairs." Pipeline leaks are common in the Niger Delta, the heartland of Africa's biggest oil and gas industry, often caused by people seeking to steal oil or by militants who say they are fighting for a fairer share of the region's natural resources.
The cause of the leak at Olobiri, near where oil was first discovered in commercial quantities in Nigeria in the 1956, was not immediately known.
confront the soldiers on that ground, they must be more than prepared for it is not the medicine you put in the ear that you put in the eye.
The head of the troops stationed Camp 5 told the governor that the militants apparently underestimated the intelligence and capability of the Nigerian Army, as they planted explosives in front of the camp, thinking that the JTF would attack them from the entrance. He said they thought the task force would be foolish enough to walk into such a kindergarten trap, not knowing that there were so many way of catching a rat. He said the JTF instead struck from the air and demobilized them.
Obviously, bomb experts were drafted to the camp to detonate a lot of devices that were put in place to bomb soldiers when they invade the camp but things did not go according to plan for the militants, who fled the camp, leaving behind their armoury. Though, they have denied abandoning their weapons in the camp. The General Purpose Machine Guns (GPMGs) and other weapons recovered from the camp were shown newsmen in Warri by the JTF. Major General Bello showed newsmen on that day the private speedboat of Tompolo and a water bike. Whatever is the case, Camp 5 is a shadow of itself now and things will never be the same again with it with the takeover of the structure by the JTF. Oporoza
Oporoza, the seat of power of Gbaramatu kingdom is also the seat of power of Tompolo from the findings of the JTF. Approaching from the jetty and passing some few houses, one would not know the power of Oporoza or think that it was burnt in any manner by the task force until you walk into the heart of the settlement, where the palace and residence of Tompolo in the town is located. Some village sources maintained the so-called residence of Tompolo by the JTF is the community’s guest house, which several dignitaries that visited the town in the past, but, Major-General Bello told Vanguard when confronted with the claim that he carried out his investigations properly, sent people to the house as spies at different occasions and they met Tompolo there to discuss business and other things, and that the house is his house.
Tompolo’s house, according to the JTF and Oporoza community guest house, according to some sources, which is adjacent the palatial edifice of the Gbaramatu monarch, also on the run, were the two major houses that were burnt in the community contrary to earlier reports fed to the media that the entire community had been set ablaze. Our sources still maintained that other houses were burnt in other sections of the town, but what was visible when we visited were the palace and Tompolo’s house. There was signs of bullet holes in one or two other houses and damage to the roof of one other house inside, not along the main route into the town, which the governor and other members of the entourage took to the palace area. Palace in ruins
The palace of the traditional ruler, His Royal Majesty, Ogeh Gbaran III, Aketekpe (Agedegba), Pere of Gbaramatu kingdom, sitting on a wide expanse of land in the heart of Oporoza , perhaps, the first of its kind in the entire Ijaw land, which represents the struggle and efforts of the Gbaramatu patriots, who believed they have paid the supreme sacrifice for the common good of the region was in ruins on that day.
We were welcomed by the statue of Madam Liberty towering high above
CONTINUES ON PAGE the entrance to the palace. Directly behind the statue are four gigantic columns holding up two sets of wrought-iron gates leading to the first and inner courts of the Pere’s Palace, two other sculptures of Athena, the ancient Greek goddess of wisdom, guard each of the entrances to the palace. Athena is also, in Greek mythology, the goddess of wisdom and warfare reportedly born from the head of Zeus, ruler of Olympian gods and their spiritual father.
The goddess could not, however, guard the palace on the day it was bombed. The royal father had to take to his heels, abandoning the seeming opulence in the creeks. Major-General Bello insisted that there was no accident by the task force in bringing down the palace because it was connected to militancy in the Niger-Delta. He said the palace was built by Tompolo and the Toyota Tundra Jeep, belonging to the monarch, which was also razed was acquired at the sum of N10 million by the militant leader, who practically runs the Gbaramatu kingdom as the defacto leader.
‘Aso Rock’Major-General Yarkin-Bello said Ekpumupolo’s house in Oporoza is called ‘Aso Rock’. The house, which was also razed down was tastefully built, an indication that Tompolo is a man of means. Everything in the house, from the burnt chairs to the television sets are all state of the art gadgets. The house is not fenced but obviously, it is no-go-area to unwanted persons, even though, it is said to be a guest house, owned by the community.
Even last Wednesday that the Governor , the JTF commander and others visi ted, more start l ing revelations were made, a photocopy of the secret report of the JTF by the then B r i g a d i e r - G e n e r a l L a w r e n c e Ngubane, which was leaked was found in one of the rooms, believed to be the communications room of Tompolo. There were other heaps of documents, which Major-General Bello had to abandon sleep to go through on Wednesday night. It was gathered he did not sleep until 4.00 am on Thursday and when he spoke to Vanguard Thursday, he confirmed his night vigil with documents, saying, he has been able to make a lot of sense out of the operations of Tompolo with the documents, and that there were a lot of foreign connections in his activities.
Guest House, Aso Rock or Tompolo House, whichever one it is, the magnificent structure, which is probably the second best building in the community, next to that of the monarch , i s gone . However, independent inves t iga t ion by Vanguard showed that Tompolo was living in the said house before the present debacle. Things found by the JTF relating to him are enormous and a lot of people would be called for questioning soon and in the near future to make some clarifications.
ShrinesThere were a lot of shrines; more than 10 at different locations near the contentious ‘Aso Rock’ and the surrounding bushes, their sight is quite nauseating. In one of the shrines, with the chair of the probably the chief priest burnt, there were evidence of blood on the ground of the shrine, but, Major-General Bello said it would take forensic examination to know whether it was human blood or otherwise.
Clearly, there is something nocturnal about the ‘Aso Villa’, which the JTF has linked to Camp 5 and Tompolo on the grounds that militants were usually posted to guard the house and ostensibly, the palace, which is
