Sweet Crude July

A Vanguard Monthly Review Of The Energy IndustryJULY, 2010 VOL 02 N0. 15

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th A year long series of activities and special publications have been planned to mark OPEC's 50 anniversary and in Vienna, a special exhibition

from September 18 -30, 2010, will showcase the rich culture and history of each OPEC member country including Nigeria.

Join us in marking the anniversary celebration and Nigeria’s membership by getting your company profiled in the September edition of

and reach thousands of visitors to the exhibition and an estimated 1.5 million visitors to our website:

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NTIR GO SP TP AU BS ILIT

Y

YTI

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PSOF RU PE L GLIN

NTIR GO SP TP AU BS ILIT

Y

YTI

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PSOF RU PE L GLIN

AnniversaryAnniversaryAnniversaryAnniversary

Nipex slashes oilcontracting cycle to 9 months

FG bares its fangs over Korean firm's sabotage

Nigeria'sNigeria's9 million barrels spilled in 50 years

Government agencies ill equipped

9 million barrels spilled in 50 years






ienna, 30 June 2010-Luis Vde la Hoz, a 17 year-old s t u d e n t r e p r e s e n t i n g Venezuela, swept to victory in OPEC's first ever international quiz, held in the OPEC Secretariat today. The quiz forms part of the Organization's 50th anniversary celebrations.

L u i s h e l d o f f t o u g h competition from nine other students, all under 18 years of age, to emerge victorious after a t r i c k y t h r e e r o u n d s o f questioning about OPEC's history, its Member Countries and the international oil industry.

Venezuela wins OPEC quiz

horrifying oil spill response managementhorrifying oil spill response managementhorrifying oil spill response management

COVER

OIL

FOCUS

INSURANCE

Contents

THE TEAMEDITOR

Hector IGBIKIOWUBO

CORRESPONDENTS

Printed and Published byVanguard Media Limited.Vanguard Avenue, Kirikiri

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Internet:www.vanguardngr.com

All correspondence: P.M.B 1007, Apapa, Lagos.

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GROUP BUSINESS EDITOROmoh GABRIEL

PAGE LAYOUT/DESIGN Francis AYO, Johnbull OMOREGBEE,

Babajide BABATUNDE & Remi OGUNTEGBE

POWER

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Editor South-SouthEmma AMAIZE

Victor AHIUMA-YOUNGPatience SaghanaGodwin ORITSE

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Agip gas pipeline leak cause panic in Yenagoa

Global Union move against abuse of workers right

COMMUNITY DEVELOPMENT5050 Total commissions projects in host communities

Niger Delta is child's play to Gulf of Mexico-Shell

NNPC hunts for global oil and gas insurance companies

Power generation gets a boost

FG bares its fangs over Korean firm’s sabotage

Nigerian miners form association: wants solid minerals dev. bank

4444 Terminal operators are exploitative

PPMC Oil Spill ravages Escravos river, Gbaramatu Community

GAS

Sweet Crude is a publication of Vanguard Media Limited

Nigeria's horrifying oil spill response management

Local content and its implication for Nigeria

DEPUTY EDITORClara Nwachukwu

NL KE at any other tim in t e history of oil and I e hUga explorat on and production, the BP oil spill in

s ithe Gulf of Mexi o (Go ) have d awn at ention to oil

c M r tspill re ponse ma agement around the orl , s n

w dreve ling a or ifying cen rio within he ig riana h r s a t N e op rating en ironment years of wanton environmental

e vpollution and degra ation, as we l as govern ent's

d l minability to art culate and implem nt an effective i e respon e mec anism.s h

In an effort to focus atte tion on ige ia's oil spill n N rresp nse man gem nt, we spoke with Mr. Mutui-

o a e Sunmonu, the he l Country Ch ir f r Nigeria s well

S l a o aas the Executive ir ctor of the Nigeria Oil S ill D e

petection and Response Age cy (NOSDR ). We have D n Aalso t ken the liberty to call atte tion to local oil spill

anscenar os to sat ate your reading p easure and afford

i i lstake olders an o portunity to review in country oil h p

-spill response management.W also sp ke with Dr. Ihe nyi Ohae i, th Gen ral

e o a r e eManager of the N gerian Petroleum xc ang ( ipex) i E h e Nwho grac ously el cida ed on the ac i ities of his i u t t v organization, r vea i g that the con racting cycle in the

e l n tNigerian oil and gas indust y have shrunk from th r eembarra sing 3 months to 9 mo ths under his watch.

s 6 nIn his edi i n als , we have cal ed attention to t t o o la tivities of some or ign oil industr cont acting firms

c f e y rhat could prove in mical to the uccess f the Ni eri n t i s o g aContent Ac .t

e have main ained the expande sc pe of coverag W t d o efor 'Fe dback' t atisfy the yearn ngs o ur d scerning

e o s i f o i pu lic hungry t cont ibute We have a so kept faith b o r . lwith coverage of a l othe spectrum of the Nigerian

l rnergy chain in luding Labour, Pow r, Finance, Solid

e c eMinera s, Gas, Freight a d Commun t Dev lopm nt, l n i y e ep oviding r por age on a cale hithert np ralleled in

r e t s o u at ese p rts.h aW ile we sei e his opportu ity o ong atulate

h z t n t c rhtOPEC on t 5 ann versary celebrations, may e i s 0 i

wequally invite you to collaborate ith s in a ef ort o w u n f tdo Nig ria proud at n exhibition for m mbe cou tries e a e r nth t ,h

sc edu ed f r Septe ber 18 to 30 20 0 in Vienn , h l o m 1 aAustria.

SNEPCo Deep-water Projects organisation, which opened in 2007, continues to play a Spreading wealth and developing talent key role in developing deep-water skills and capacity of Nigerian contractors. The Shell-run companies in Nigeria have had a positive impact on the economy. As far Opportunity Delivery and Studies Centre,located within Nigeria, has been handling the as possible, we give specific type of work to local contractors and hire workers majority of SPDC and SNEPCo’s exploration studies since 2005. This work was from the local communities where we operate. Our Nigerian content strategy also previously done overseas.promotes the use of locally manufactured goods and Nigerian service companies in production operations, projects and well engineering.

In 2009, Shell-run companies in the country awarded contracts worth nearly $892 million to Nigerian companies. This represented more than 88% of the overall number of contracts and amounted to 85% of the total amount we spent on contracts. Although our overall spend was lower in 2009mainly as a result of funding issues and the security crisis in the Niger Delta, the proportion of the spend going to Nigerian companies increased substantially. As of December 2009 SPDC and SNEPCo employed around 6000 direct employees and contractors – about 90% of them Nigerian. Our projects help create tens of thousands more jobs for contractors and supporting industries.

Nigerian content developmentTransferring skills and technology to Nigerians is a big part of what Shell companies in Nigeria do. Our focus is on helping to increase the capacity of Nigerians and Nigerian companies in a range of oil and gas industry activities,

Contracts awardedIn 2009 SNEPCo awarded a $52.5 million contract to Nigerian-owned Business International Limited to provide international airline services and a $12 million contract to Arik Nigeria Limited for domestic travel services. An Operational Insurance Policy contract worth $9 million was awarded to Sovereign Trust Insurance for the Bonga deep-water production vessel (FPSO) while WELTEK Limited a Nigerian company was awarded a contract of $11 million for sub-sea tieback fabrication.

In 2009, SPDC awarded NETCO—a Nigerian company, inpartnership with Dietsmann Limited (a Dutch company) acontract worth $11.9 million for operation and maintenance of the Afam VI power plant. In the area of supplies, SPDC awarded a $54 million contract for stocking & supply of pipes for the domestic gas project to another Nigerian company, De-light Nigeria Limited.

Training and supportIn the same year, SPDC trained 270 Nigerian entrepreneurs and 60 engineers in project management. Also, 39 scaffolders received the level II CITB certification and 100 Nigerian welders received International Standards Organisation (ISO) certification. Another 2,000 individuals received SPDCorganised general vendor development training. SPDC and SNEPCo collaborated with United Kingdom Trade andInvestment group to organise a trade mission in London, during which over 20 Nigerian companies met with 150 British companies in an effort to help foster partnerships.

To date, over six partnerships have emerged from this effort. In 2009 we also facilitated the participation of UK companies at the Nigerian Content Consultative Forum in Abuja to take advantage of various investment opportunities available in Nigeria. Sixty-one Nigerian companies and over 1000 people participated in a Nigerian Content Day event organised by SPDC in October 2009. The event gave local companies an opportunity to showcase their products and services. Shell companies in Nigeria continue to nurture talented youths by sponsoring research programmes in five Nigerianuniversities for core technical skills in geosciences. We offer sabbaticals and student internships at our offices in Port Harcourt to introduce new concepts in underground

from design and engineering, to exploration and drilling. This supports the Federal evaluationGovernment’s drive to increase Nigerian participation in the oil and gas industry. techniques, using the latest technologies. In addition to several thousand scholarships Also it makes business sense for Shell companies in Nigeria—by developing a and bursaries that SPDC awards to students every year, we run the Shell Intensive skilled Nigerian workforce we can lower operating costs over the long term while Training Programme (SITP) for graduate employees. This one-year course prepares new contributing to a more prosperous Nigeria, which is good for the country and good employees for the type of work they will perform when they join projects later. In 2009, for business. 98 students graduated from this programme.

More information on the operations of Shell companies in Nigeria can be found at Our deep-water operations offshore are a good example. Take Bonga – Nigeria’s shellnigeria.comfirst offshore deep-water project, which is operated by SNEPCo. It has helped create the country’s first generation of engineers with deep-water experience who will help expand this sector of the industry. There are only a handful of locations around the world with expertise in this technically challenging environment.

SNEPCo continues to build Nigerian deep-water capability through partnerships.

SHELL IN NIGERIA

NIGERIANCONTENT

Published by Shell Companies in Nigeria: Shell Petroleum Development Company of Nigeria Limited, Shell Nigeria Exploration and Production Company Limited and Shell Nigeria Gas Limited.Royal Dutch Shell plc. and the companies in which it directly or indirectly owns investments are separate and distinct entities. But in this publication, the collective expression ‘Shell’ may be used for convenience where reference is made in general to these companies.

Nigerian workers at a rig.

Bonga FPSO 120km offshore Nigeria.

May 2010

horrifying oil spill response managementhorrifying oil spill response management

Nigeria's9 million barrels spilled in 50 years








4Cover Story

CONTINUES ON PAGE 5

THE BP oil spill at Prudhoe Bay in the Gulf of Mexico (GoM) has drawn attention to oil spill

response management around the world, revealing a horrifying scenario within the Nigerian operating environment. Whereas official figures indicate that upwards of 3 million barrels may have been spilled in the last 3 3 y e a r s , T r a n s p a r e n c y International estimates that about 9 million barrels may have been spilled in the last five decades. Similarly, the World Bank notes that because estimates do not capture 'minor spills', the true quant i ty sp i l led in to the environment could be as high as 10 times the official figure. M e a n w h i l e S w e e t C r u d e investigations have also revealed that the government agencies charged with superintending spill response management in the country remain ill equipped to respond accordingly. Independent reports claim that "Oil spills in Nigeria occur due to a number of causes, including: corrosion of pipelines and tankers

Clara Nwachukwu (accounting for 50% of all spills), sabotage (28%), and o i l production operations (21%), with 1% of the spills being accounted for by inadequate or non_functional production e q u i p m e n t . T h e l a r g e s t contributor to the oil spill total, corrosion of pipes and tanks, is the rupturing or leaking of production infrastructures that are described as, "very old and lack regular inspection and maintenance." Cost: The impact of the oil spills to the ecosystem over the years can not be quantified in monetary terms; neither can the loss of revenue to farmers and fishermen be easily captured given the paucity of data in this regard. However, even though oil prices have gone through highs and lows over the years, but under current prices of above $76 per barrel, Nigeria would have lost about $242,900,219.52 million in revenue according to the Department of Petroleum Resources, DPR, data of 3,196,055.52 barrels of oil spilled between 1976 and 2008. The volume resulted from 740 incidents of oil spill recorded during the 33_year band. But the

DPR, the oil and gas industry regulator refused to breakdown the statistics further according to companies and volume of spill

The impact of the oil spills to the ecosystem over

the years can not be quantified in monetary terms; neither can the

loss of revenue to farmers and fishermen be

easily captured given the paucity

of data in this regard

recorded in their areas of operation. The estimated 9 million barrels oil spill in the last five decades also translates to about $684m under current oil prices. No sanctions: Although the United States government has set a new benchmark with its prompt intervention and the $20 billion penalty imposed on BP as compensation for the spill victims as well as the freezing of further offshore oil exploration, the international oil companies operating in Nigeria continue to enjoy a free reign at the expense o f t h e p e o p l e a n d t h e environment. Notwithstanding the significant volume of spill, no severe sanction has ever been imposed on any oil company operating in the country, which environment activists believe has contributed to the pollution of the ecosystem. Even though Mrs. Dorothy Bassey, DPR's Assistant Director, Environment and Technical Services, told our correspondent exclusively that penalty on oil spill ranges from "the imposition of fines and withdrawal of

BOS continues Africa '10 seismic campaign

he BOS Arctic will Tacquire a number of 3D programs in Cameroon, for E u r o i l ( A B o w l e v e n Company), using a six streamer configuration.

The BOS Arctic has recently completed two major 3D s u r v e y s O f f s h o r e Mozamibque and Tanzania.

Roar Iversen VP QHSE stated, "BOS are pleased to note that following close planning & cooperation with the client, and the Tanzanian & Mozambique security interests, the surveys have been completed without distraction from outside forces and I congratulate the B O S A r c t i c c r e w f o r exemplary QHSE diligence. Much as been learned from operating in these waters and we look forward to returning next season."

EW ORLEANS (AP) - B P ' s c o s t s f o r N

responding to the massive oil spill in the Gulf of Mexico have risen to $1.6 billion.

According to a company news release, that includes new $25 million grants the British oil giant has given to F lo r ida , A labama and Mississippi. It also includes the first $60 million for a project to build barrier islands off the Louisiana coast. The estimate does not include future costs for scores of lawsuits already filed for damages.

BP is now siphoning off significant amounts of oil from its runaway well 5,000 feet underwater, but the next best chance for ending the spill won't come until relief wells are completed in August. Already potentially more than 100 million gallons of crude have been expelled into the Gulf, far outstripping the Exxon Valdez disaster.

$1.6 billion is cost of BP oil spill so far

Sea-bird-killed-by-cosco-busan-oil-spill

An Amnesty International mission delegate's fingers covered in oil from an oil spill at Ikarama, Bayelsa State. This photograph was taken eight months after the spill by Amnesty International researchers. There are often long delays in clearing up after oil spills in the Niger Delta.

5Cover Story

Nigeria's horrifying oil spill response management

operating license," but she could not cite any immediate examples. Environmentalists react

A c c u s i n g t h e f e d e r a l government and respective agencies of double speak and del iberate ly shie lding oi l companies from taking full responsibility for spills in their a r e a s o f o p e r a t i o n s , environmental rights activists declare that the country has witnessed over 7,000 cases of spill in the over 50 years of commercial crude oil exploration.

This, they allege, not only polluted and damaged the ecosystem as well as contributes to climatic change, but also gave rise to the incidence of militancy and unrest in the Niger Delta where majority of the spill had occurred, partly on account of the disruption of their major means of livelihood.

A blowout on a Unocal rig six miles off the coast of California spilled 3 million gallons of oil into the waters off Santa Barbara.

Oil activities Over the years, the people of the

Niger Delta and the environs have borne the consequences of oil commercialisation leading to further impoverishment and huge national economic losses.

The delta covers 20,000 km² within wetlands of 70,000 km² formed primarily by sediment deposition. The region is home to above 20 million people and 40 different ethnic groups, and makes up 7.5 percent of Nigeria's total land mass. It is reputed as the largest wetland and maintains the third-largest drainage basin in Africa.

Independent reports on oil spills in the region allege that spills have "destroyed crops and a q u a c u l t u r e s t h r o u g h contamination of the groundwater and soils. The consumption of dissolved oxygen by bacteria f e e d i n g o n t h e s p i l l e d hydrocarbons also contributes to

the death of fish." They also add, "In agricultural

communities, often a year's supply of food can be destroyed instantaneously. Because of the careless nature of oil operations in the Delta, the environment is g r o w i n g i n c r e a s i n g l y uninhabitable."

In spite of these hazards, Bassey argues that spills are unavoidable in oil exploration and production activities, adding that when they occur, lack of information and communication and the inability of the communities and oil companies to agree on the volume spilled, aggravate damages as intervention with regard to clean ups and remediation are delayed.

Besides, she notes, "Not every company has the capacity to intervene effectively as shown in the BP's case," an assertion corroborated by ExxonMobil's Chief Executive, Rex Tilerson, who was quoted in the wake of the BP oil spill as saying that even the American company, the biggest in the world by market value, "is not well equipped to handle" major oil spills.

The role of government's agencies

While arguments go back and forth on the role of government's agencies in protecting the ecosystem, environmentalists insist that responsible agencies need to be firmer with the operations of oil companies in Nigeria.

S p o k e s m a n f o r t h e E n v i r o n m e n t a l R i g h t s A g e n c y / F r i e n d s o f t h e

Environment, Mr Phillip Jakpor, in a telephone interview argues that most of the international oil companies operating in Nigeria operate double standards, as opposed to their home countries.

In his opinion, whereas in their home countries, the companies take full responsibility for spills through prompt clean ups, remediation of the environment and compensation for victims, the case is different in the Niger Delta.

"In contrast, what is happening in the Niger Delta where pipeline ruptures are caused by poor integrity checks by oil companies is that they always blamed the innocent community people by claiming sabotage."

He says Nigeria needs to learn from the Gulf of Mexico incident, as currently "government cannot hold oil companies accountable like the US Government did with BP."

Mr Jakpor notes that if appropriate steps are not taken, Nigeria is at higher risk of worsen ing env i ronmenta l conditions, saying, "The US Government put a freeze on future offshore drilling, even as America 's demand for oil has not diminished and will never diminish. The alternative is to look for new sources of oil and the honey pot is Africa's Gulf of Guinea , in which Nigeria is a dominant player."

Nigeria, which vies with Angola for Africa's top oil producer in the region, is America 's fifth-biggest source of oil imports.

In his opinion, whereas in their home countries, the companies

take full responsibility for spills through prompt clean ups,

remediation of the environment and compensation for victims, the case is

different in the Niger Delta

igerian energy company Sunrise has offered $4.8 N

billion to buy a stake in ExxonMobil's joint venture in the country.

The company is aiming at a 29% stake in the venture -- with estimated reserves of 1.6 billion to 2 billion barrels and potential for more -- in which ExxonMobil holds a 40% stake and the rest by the Nigerian government, the Financial Times said, citing people familiar with the matter.

While the government is willing to part with a 19% stake in the venture, Sunrise is said to be attempting to gain an additional 10% from ExxonMobil.

ExxonMobil

gets $4.8bn

Nigerian offer

orwegian-based helicopter group Blueway has landed N

its largest contract ever in the offshore sector - a five-year job in Nigeria, worth $80 million a year.

Blueway said the five-year contract, which has two one-year options to extend, is with the Nigerian National Petroleum Corporation and Shell.

DanCopter, a fully owned subsidiary of Blueway, will carry out offshore crew changes and shuttle services for Shell from next month.

Initially a combination of DanCopter and Shell-owned helicopters will be used while Blueway takes delivery of seven new medium-sized helicopters.

Blueway chief executive Leif Salomonsen said in a statement the contract was a very important milestone for the company.

“It is also a strong message to t h e m a r k e t a b o u t o u r international growth ambitions,” he said.

Blueway currently operate a fleet of 26 helicopters in Norway, Sweden, Denmark, Finland, the Netherlands and Nigeria.

Blueway

takes off in

Nigeria

Offshore Helicoper Service

CONTINUED FROM PAGE 4

Oil 6

CONTENT INITIATIVECONTENT INITIATIVE

igerian CONTENT INITIATIVECONTENT INITIATIVE

Dr. Ibilola AMAO

Today, Nigeria is confronted with a huge energy crisis and a requirement to optimize its natural resources, primarily for the benefit of Nigerians. Complex issues and challenges that have plagued its industry over the past 50 years have now been placed on the front burner as a national security issue.

Bearing in mind that the aims, goals, and objectives of government, the IOC's, and the communities are understandably at variance; the need to harmonize the terrain for business and community development in a way that societal transformation and national development is achieved, should be the focus of the Nigerian Content Development and Monitoring Board (NCDMB) and a challenge to all stakeholders and the legislative arm of government today. The hope and aspiration NNPC when it was setup was to ensure:1.The sovereignty of Nigeria, Nigerians and it natural resources remain in the control of Nigerians.2.Participation of international players occurs in a value adding manner.3.That natural resources are optimized to stimulate:?National Development?Societal Transformation?Economic Well being 4.Gas and oil are processed, domesticated and optimized to meet in-country energy requirements for power supply, transportation and fuel supply.5.Human capital and infrastructure is developed and enhanced to form the back bone of a developed nation.6.The environment, especially the flora and fauna in the Niger Delta wetlands are well protected, managed, and in cases of degradation, remediated by the joint efforts of all stakeholders.7.Promotion of sales of finished products rather than crude resources.We must work the Local Content Act alongside the NNPC Decree No 33 of 1977, Chapter 320, Laws of the Federal Republic of Nigeria 1990 so that NCDMB is seen not only to be implementing the Act for the future but to also be revisiting the failure of the poor implementation of the decree which established NNPC. At inception, NNPC was charged with the following responsibilities:5.1 (a) exploring and prospecting for, working, winning or otherwise acquiring, possessing and disposing of petroleum;5.1(b) Refining, treating, processing and generally engaging in the handling of petroleum for the manufacture and production of petroleum products and its derivatives. 5.1 (c) purchasing and marketing petroleum, its products and by products;5.1 (d) providing and operating pipelines, tanker_ships or other facilities for the carriage or conveyance of crude oil, natural gas and their products and derivatives, water and any other liquids or other commodities related to the Corporation's operations;5.1 (e) constructing, equipping and maintaining tank farms and other facilities for the handling and treatment of petroleum and its products and derivatives;5.1 (f)) carrying out research in connection with petroleum or anything derived from it and promoting activities for the purpose of turning to account the results of such research;5.1 (g) doing anything required for the purpose of giving effect to agreements entered into by the Federal Government with a view to securing participation by the Government or the Corporation in activities connected with petroleum; 5.1 (h) generally engaging in activities that would enhance the petroleum industry in the overall interest of Nigeria;5.1 (i) Undertaking such other activities as are necessary or expedient for giving full effect to the provisions of this Decree.

There is a price to pay for technological acquisition, a process to undergo and an investment to make. Above all, mutual trust must exist and the willingness to collaborate, cooperate, and coordinate resources in a holistic manner. The establishment of the Nigerian

National Content Implementation Making the Best of What we Have

Oil Spillage

WARRI-AN oil spill from the Pipeline and P r o d u c t M a r k e t i n g

Company, PPMC, a subsidiary of the NNPC has been reported in the Chanomi creek in the Escravos River, spreading to neighbouring communities in Gbaramatu Kingdom, Warri South-West Council area of Delta State.

The oil spill that was first noticed around the Month of M a r c h t r a v e r s e d s e v e r a l communities but impacted most s e r i o u s l y o n I n i k o r o g h a community according to the community sources since no measure was taken to contain it.

Unspecified quantity of crude is being discharged into the rivers and ponds in the neighbourhood within and outside the company's facilities in the area the source said.

Vanguard gathered that the National Oil Spill Detection and Response Agency (NOSDRA) has been intimated of the spillage and has already conducted a Joint Inves t iga t ion Vis i t ( J IV) inspection of the spill which has spread to Inikorogha, Azama, Ubefan and Ikangbene

Source said that NOSDRA may l ikely vis i t the impacted communities tomorrow to

PPMC oil spill ravages Escravos river, Gbaramatu communities

Emma Arubi monitor and ascertain the level of damage and quantity of crude lost spilled so far.

The pipelines were first ruptured by suspected militants who attack Chevron and PPMC line in the Chanomi creek of the Escravos River.

In iko roghan communi ty yesterday alleged that some of shoddily repaired pipeline spilled crude in the communities causing collateral damage to the only source of livelihood of the locals.

Community chairman, Captain Kingsley Binama yesterday told newsmen that the spilled had leaked from incompetently repaired pipeline by a contractor with strong links to some militants saying that the pipelines was attack sometime ago by restive armed youths.

In an earlier letter signed by community chairman, Captain Binama, Secretary, Christopher Ejoh, PRO,Arther Ayeibo and Chief Felix Uluse which was made available to newsmen yesterday, notifying PPMC of the spillage, the people said that the spill occurred in swampy areas of the communi ty, where i t impacted on their fish ponds, vegetations, fluora and fauna.

According to the letter, since the spill was reported, the PPMC has not done anything to salvage the situation to ameliorating the suffering of the people neither has it sent any of its team to the area to

ascertain the amount of damage done.

When contacted, the Warri zonal director of the NOSDRA, Mr Akindele Olubunmi confirmed receipt of the latter notifying the agency of the spill adding that they have already conducted a JVI investigation on the spill and still monitoring the area.

He said that the agency has directed that the spill be contained and recovered in preparatory for the pipeline excavation.

The pipelines were first ruptured by

suspected militants who attack Chevron and PPMC line in the Chanomi creek

of the Escravos River

Oil 7

Just 38 days after the last oil spill that contaminated Ibeno shoreline in Akwa Ibom, another spill has been reported at the Qua

Iboe oil fields.The fresh oil spill sparked off a protest as hundreds of Ibeno residents staged a peaceful demonstration against incessant oil spills from the operations of M o b i l i n I b e n o . O u r correspondent reliably gathered that soldiers deployed to guard Mobil facilities were involved in a skirmish with the protesting women in which one woman s u f f e r e d a b r o k e n l e g .The victim, Mrs. Grace Joshua Etia, told Saharareporters she was b e a t e n u p b y s o l d i e r s .“Though our protests were peaceful the soldiers came hard on defenseless women and beat us up for protesting that the frequency of spills is too much. We had one on December 4, last year; another one happened in March this year and then this one again. We can no longer catch any fish as a result of this.“And instead of looking into our

Another oil spill hits Mobil's Qua Iboe facility

Spill / vessel

Location DatesEstimated flow rate (tonnes/day)

Spilled (min tonnes)

Spilled (max tonnes) Notes

Deepwater Horizon

United States, Gulf of Mexico

April 20,

2010 to June 5,

2010

June 6, 2010 to presen

t (8 days)

2,700 13,600

1,400 12,000

126,900

11,200(total 139,100)

640,000

96,000(total 736,000)

Following an explosion on the drilling rig, an underwater well is gushing oil into the Gulf. Flow rate estimates vary widely due to difficulty in obtaining an exact analysis of an oil spill in deep waters. As of June 6th, a containment cap is capturing 10,000 bbl/day, so a different flow rate is used thenceforward.

Taylor Energy wells

United States, Gulf of Mexico

September 16, 2004 to present (2097 days

0.03 0.05 61 95

An oil platform was destroyed by Hurricane Ivan in 2004, resulting in leaks from 26 wells near Louisiana. They were capped, but a small amount of oil continues to escape the containment domes. Ocean Saratoga is drilling a relief well to permanently seal the leaks.

Soldiers brutalise protesters

complaints and finding solutions to them, they resorted to beating us up and they broke my leg,” she s a i d .

It will be recalled that Mobil reported that a pipeline leak on December 4, 2009 caused the discharge of crude at Idoho oil well in the Atlantic; another spill incident which contaminated Ibeno shoreline was denied by all oil operators in Akwa Ibom.Chief Samingo Etukakpan, an oil industry labour activist, said that the spill had impacted the creeks and estuaries in Eket and beyond. “Findings from Esit Eket, Onna have shown that the spill has impacted other communities in the neighbourhood, yet Mobil chose to only invite Ibeno for a meeting on the current spill, we will make sure that all impacted communities are carried along”.H e f u r t h e r t o l d o u r correspondent: “We noticed the oil on Monday at the coastline and it has contaminated the land with r e s u l t a n t i m p a c t o n t h e environment and marine life and this is sad news for the fishing c o m m u n i t y b e c a u s e o u r fishermen cannot go to sea until the cleanup is carried out.”It was gathered that the mass protest spread to Eket and

environs as youths from the area marched in the streets displaying placards and chanting war songs.Some of the placards read:“Rita Umoren Must Go!” “ExxonMobil, learn from BP r e s p o n s e i n U S . ” “Pay us adequate compensation!”The Clan Head of Afah Eket in Eket local government, Obong Nathanie l Oduneyie , to ld Saharareporters that the frequent spills have contaminated fishes and exposed the public to health d a n g e r .“I bought some fresh fish from the market and it was contaminated, the whole pot of soup has been contaminated and I can show you.He said he was informed that there was an oil spill on Saturday, and he went out to see things for himself and found the area badly stained with crude oil. By the time he returned the youths of Eket were out protesting.“I have just asked them to embrace dialogue because I am an advocate of peace and I hope the company would not take my peaceful disposition for granted,” he said.

We noticed the oil on Monday at the

coastline and it has contaminated the

land with resultant impact on the

environment and marine life and this is sad news for the fishing community

because our fishermen cannot go to sea until the cleanup is carried

ibya wants assurances Lfrom BP after its handling of the Gulf of Mexico oil spill but will allow it to start deep-w a t e r d r i l l i n g i n t h e Mediterranean, the country's top oil official said Monday.

"At this point we're not suspending anything and we're going to drill pretty soon and some of the work will be in deep water," Shokri Ghanem, the head of Libya's National Oil, or NOC, told Zawya Dow Jones in a phone interview. " B u t t h e y a r e t a k i n g p r e c a u t i o n s a n d w h a t happened in the Gulf of Mexico will be a learning process."

BP and its Libyan partner, the Libya Investment, or LIC, in May 2007 signed an exploration and production deal with NOC worth at least $900 million for the onshore Ghadames and offshore Sirt areas.

A spokeswoman in London for the British oil major didn't respond to questions from Zawya Dow Jones about its Libyan deep-water drilling plans.

The agreement in Libya involves the exploration of a r o u n d 5 4 , 0 0 0 s q u a r e kilometers--the equivalent to more than 10 of BP's operated deep-water blocks in Angola.

"Our technical people had a number of meetings with the BP people. BP are studying the reasons for what went wrong and we sat down together and they have assured us," Ghanem said.

Deep-water drilling is coming under greater scrutiny worldwide in light of BP's Gulf of Mexico oil spill, with several countries taking a closer look at environmental r e g u l a t i o n s . H o w e v e r , analysts say Libya and other members of the Organization of Petroleum Exporting Countries, or OPEC, won't let the catastrophe affect their own oil field development plans.

"It would be catastrophic if we saw this happen in Libya but controls are better in the North Sea than in the Gulf of Mexico and for now any news from the Gulf of Mexico is good for OPEC as demand for OPEC oil will be greater," said John Hall, Chairman at Energy Quote, an oi l and gas consultant.

Libya pressures

BP on deepwater

drilling in

Mediterranean

Oil 8

May we know exactly what you do for the N i g e r i a N a t i o n a l

Petroleum Corporation (NNPC)? I am a doctor of chemical

eng inee r ing , the Genera l Manager of the Niger ian Petroleum Exchange (Nipex), I have been there at the helm of affairs for the past 2 years, I came in February, 2008. Before that I was the head of business development for the NNPC and I was in that position for 4 years, before that I was head of strategic planning in the planning division of the NNPC and prior to that I was at the Nigerian Liquefied Natural Gas where I was technical assistant to the chairman, Dr. Pius Okigbo. Before that, I was also in the gas division of the NNPC; I was also a depot manager in the PPMC. I have downstream, mid-stream, upstream and corporate planning experiences in the NNPC.

There have been a lot of questions about the activities of Nipex, may we know what it is all about?

Well Nipex is one of the deliverables of the NNPC Project PACE. The aim is to streamline the activities of the oil and gas industry especially with respect to contracting. The problem with the contracting cycle and the attendant delays have led to large cos t impl ica t ions on the

Nipex slashes oilcontracting cycle to 9 months

DR. Iheanyi Nwa Ohaeri is the general manager of the Nigerian Petroleum Exchange (Nipex), the body charged with the uphill task of transforming the oil and gas industry contracting landscape. In this

interview with Hector Igbikiowubo, Editor of Sweetcrude, he sheds more light on the activities of his organisation, challenges and future plans. He also discloses that his organisation has successfully reduced the embarrassing contracting cycle within the industry from 3 years to 9 months with plans afoot to achieve 4 months.Excerpts:

operations of the industry. Prior to the introduction of Nipex, contracting cycle in the oil and gas industry was about 3 years from start to finish, 36 months and if you are very conversant with the oil and gas activities world-wide, you would realise that in 3 years cost can go up 100 per cent. So if you take 3 years to start a project and award a contract for that project, then by the time the project comes up or it is awarded, the cost could have gone up by 4 or 5 times and that was why we decided to set up an electronic system to handle the contracting process which would allow all stakeholders to handle the system electronically and reduce the time line. The objective of Nipex is initially to reduce that time line from 36 to 24 months, to 9 months and finally to 4 months. Right now we are going towards 9 months for some contracts. However we still have some challenges from some contracts, challenges from some contractors the suppliers and the Joint venture companies and NAPIMS. One of the major issues in this regard is the slow uptake of technology from the participating companies who do not know how to use computers. But we have gone ahead to hold several workshops to educate the stakeholders, the NNPC, the IOCs and the suppliers on the use of Nipex. Usually it is the suppliers who are the most challenged. We help them to

source the right cyber cafes with the right bandwidth because usually that is the problem they have uploading documents and those documents require a lot of bandwidth and most of these cyber cafes do not have the required bandwidth. And some people also in the rural areas do not have access. We are working together with a company called Chams to set up cyber cafes in all the oil producing areas mostly: Yenagoa, Benin, Warri, Enugu, Aba, Owerri, Uyo, Eket and other parts of Nigeria so that the suppliers would have access to the Nipex portal and therefore help them to benefit from the operations and facilities available in Nipex.

There are concerns about directives emanating from NAPIMS regarding the activities of Nipex. As a matter of fact about 2 months ago, we were made to understand that a directive was issued by NAPIMS instructing t he IOCs t o d i s con t i nue placement of advertisement on pre-qualification tenders in Nigerian newspapers. Even though efforts had been made to clarify this, some confusion persists. Can you throw more light on what the current position is?

W h a t h a p p e n e d w a s a misunderstanding. We have a new process in Nipex which we are using and prior to this all pre_qualifications were done manually. Right now all pre-

qualifications in Nipex are done electronically. When it was done manually, the oil companies had to advertise using the newspapers and then the suppliers would respond to those adverts. But right now, with the new system, the Nipex joint Qualification System (JQS), Nipex and its consultants Achilles will capture the suppliers in the data base. Therefore there is no need for the oil companies to actually on their own do a pre qualification of contractors. The contractors are pre qualified by Nipex with the input of the contractors, the IOCs

and then the pre qualified c o n t r a c t o r s a r e l o a d e d automatically to our data base. However, the public procurement Act mandates all contractors, all operators in the Nigerian market to advertise in at least 2 or 3 national newspapers for all contract opportunities. So, with this provision, the oil companies still have to do that. All contract opportunities are still to be adve r t i s ed in 3 na t iona l newspapers. However, in truth, those adverts are actually used to comply with the demands of the procurement Act. All pre qualifications are done online through Nipex.

Talking about the use of Nipex, what is the compliance rate at the moment? Are people within the industry really taking to Nipex?

Yes! From 1st of January, 2010 all contracting processes have been done electronically, mostly through Nipex. So, you don't have a choice of whether or not you want to comply. If you do not comply, you cannot do work in the Nigerian oil and gas industry.

We also understand that foreign firms operating outside the shores of the country are precluded from participating in Nipex. Is this true?

No they are not. So firms from any part of the

world can participate? Firms from whatever part of the

world can participate so long as they have certain aspect of information required from them: they have to register with the DPR, they would need to have a relationship with a Nigerian

One of the major issues in this

regard is the slow uptake of

technology from the participating companies who

do not know how to use computers

CONTINUES ON PAGE 9

Dr. Iheanyi Nwa Ohaeri

9Oil

Nipex slashes oil contracting cycle to 9 months group that would help them meet those conditions but nothing p r e c l u d e s t h e m f r o m participating in Nipex.

Let us look at the Nigerian Content Act. How can Nipex help in its implementation?

That is a very good question because Nipex is actually a tool that can be used to assist to realise the intent of the Nigerian Content Act which is to develop capacity in the Nigerian oil and gas industry and also the general business environment. The oil and gas industry is not the only industry in Nigeria; it may be the major industry. We have a Nigerian content module in the Nipex system where the Nigerian Content Monitoring Board could use to monitor because that is what the NCMB is supposed to do, to build and monitor the development of Nigerian content. We have a module in our system that they can use to do and Nigerian content being a regula tor cannot opera te , therefore they need the assistance in dealing with an operator to achieve one of their aims and we have that module in Nipex. We have been working with the Nigerian Content division of the NNPC when it was there, before the Nigerian Content Monitoring Board was set up, we worked with them to monitor the development of Nigerian content and to monitor the compliance before it was now passed into law.

Talking about compliance, let's take the Domestic Gas supply Obligation for instance, that's been delayed perpetually. We understand that HHI (Hyundai Heavy Industries) has perpetually delayed the execution of a Memorandum of Understanding to progress the execution of the p r o j e c t . U n d e r s u c h circumstance, what can Nipex do?

Nipex is actually not involved in contracting in that sense, we provide the platform for the process but we do not participate in the process per se. there is nothing that Nipex can do because this is basically a contracting issue and we are not directly in the process, it is NAPIMS and Chevron that can work together to solve that problem. But if I may make a comment on that, I think this is where the NCMB can bare its teeth because a foreign contractor cannot come here and flout our laws especially now that Nigerian Content Act has been passed into law. What is required by HHI and chevron with respect to the Domestic Gas Supply Obligation is clear, but obviously the contractor would want to

CONTINUED FROM PAGE 8 maximise utilisation of their own country's capacity but it is up to us to checkmate them. I believe that the NCMB is up to the task to ensure that they obey Nigerian law.

I asked that question against the backdrop of the possibility that if the foreign contracting firm succeeds in delaying the project indefinitely and NAPIMS is forced to call for a re_tender, it falls back to Nipex to repeat or superintend the process all over again and Nipex was set up to avoid undue delays. At this rate, you find the contracting cycle stretched as a result of such delays. Is there anything in place to ensure that if such a contract comes back for re_tender, the party so determined to have caused the undue delay is barred from the process?

It is not the responsibility of Nipex to impose any such penalties; it is the responsibility of NAPIMS and the NCMB to impose penalties on erring contractors. What we do is that we provide a platform. We are like a post office, if you want to post a letter to another party, the post office helps you to carry your letter. If there are any issues between the two parties, the post office doesn't even know what the issues are. If you want to use Nipex to do a contract in 3 days we are available, we would provide the timeline but if you have delays in that timeline, it is not the problem of Nipex. If you want to do a contract today in the industry it would be done through Nipex. We can also do a reverse auction wherein we conclude a contract in one hour. Once you determine that there is a contract

you want to award within an hour and you use Nipex, within that period they would bid online with our system and you would get the lowest bidder within an hour. That same activity could be stretched for 3 years.

Let's go back to the time line, you said it used to be 3 years and now it's been reduced to 9 months. Is this 9 months on paper or is it for real given the activities of firms like HHI?

Exactly, that's why I would like to add that caveat. Like I said, we

are in a position to achieve this given what the IOCs and NAPIMS have determined to be the optimum time line in the contract cycle which is now 9 months, actually 200 working days. However, the internal processes of NAPIMS and the IOCs are beyond the control of Nipex. We are just there, whenever they are ready to use us, they use us. But if they have internal delays, we are not in a position to impact on that.

Doesn't that undermine your overall objective?

It does! It undermines the process but like I said there is nothing we can do about this, we are not involved in the process; we are a facilitator in the process. They use us when they are ready to use the process. If there is an argument with HHI and it takes months to resolve, there is nothing that Nipex can do. Whenever they resolve it and they come back to Nipex we would continue with them but if from the optimum time line determined by the operators and NAPIMS, that is, the contracting cycle would not take more than 200 working days, we think we can bring it down especially if all the parties try to optimise their internal processes. Because their internal processes sometimes time. I'll give you an example, sometimes somebody in NAPIMS may be out of the country and cannot access Nipex from there and that delays the approval and if he doesn't approve, that contract cannot go any further. For example with what is happening with HHI, if Chevron and NAPIMS don't resolve those issues, they cannot come back into the Nipex process.

But if they could conclude their processes the way it is supposed to be done, the optimum contracting cycle now is 9 months or 200 working days.

It then means we are still caught up in a vicious cycle of sorts because I think the whole essence of setting up Nipex was to make the Nigerian oil and gas industry as competitive as what obtains in A n g o l a w h e r e c o n t r a c t conception to award takes about 3 months or even in Ghana or Brazil. If this is the case, how can Nipex surmount this challenge?

I am not holding forth for the inefficiencies of the Nigerian oil and gas industry system. For instance in Ghana the oil and gas industry has limited government impact because most of the operators there have Production Sharing Contracts (PSC). The oil companies don't need any approvals. They only need internal approvals not external approvals. Here in Nigeria you have to have NAPIMS approvals for every process and then approvals within the oil and gas companies. Like when they have this kind of problem with HHI, that is the example you are using, they have to resolve it with HHI, and then pass the resolution to NAPIMS before they can come back to Nipex. The emphasis should be put on trying to manage the internal processes of the IOCs and NAPIMS. Once they solve their internal problems, Nipex is available and can be used at their own discretion.

Can you give us a fair idea of what is required of operators to register and use Nipex?

You need to have DPR registration, then you come to Nipex and of course you need to have regis te red wi th the

Corporate Affairs Commission (CAC). Then you come to Nipex and we require the registration f r o m t h e s e a g e n c i e s a s background documents before we register you, then you pass through the Nipex processes _ you download a form from the portal: www.nipex.com.ng, then you download the template, you fill the form online and send it back to us, then you pay $200 registration fee to Nipex, then you are given a pass word to enter the s y s t e m a n d t h e n f i l l a questionnaire that gives Nipex a fair idea of what you really and that you are in a position to what you claim you really do and then Nipex will publish you. Initially that was enough for you to start working in the Nigerian oil and gas industry. However, after being published in Nipex you have to be audited, that is the pre qualification process. We have a consultant called Achilles In fo rma t ion Sys t ems , an international audit company that is also used by all the IOCs to audit suppliers. So Achilles and NAPIMS, IOCs and Nipex personnel will jointly go to the premises of the supplier and audit the contractor to show that the contractor is qualified to offer the peculiar services that he claims he can provide. Once the audit process has been completed and the supplier is compliant, he is then automatically uploaded unto the data base of the Nipex Joint Qualification System (JQS). Right now we have about 600n suppliers that are in that category and we are bringing new suppliers at the rate of 100 a month and by the end of the year we should just under 200 suppliers which should form a critical mass of those to work in the industry.

It is not the responsibility of Nipex to impose any such

penalties; it is the responsibility of NAPIMS and the NCMB to impose

penalties on erring contractors

Dr. Iheanyi Nwa Ohaeri

Focus 10F

As the controversy rages over the e n v i r o n m e n t a l implications of the BP oil spill in the

Gulf of Mexico, the Chairman of Shell Companies in Nigeria, Mr. Mutiu Sunmonu, argues that spill situation in the Niger Delta is nowhere near the experience in the Gulf.

He also spoke on other industry issues and the place of Shell operations in the scheme of things a s c a p t u r e d b y H e c t o r I g b i k i o w u b o a n d C l a r a Nwachukwu.

Excerpts: Oil spill No responsible operator wants a

spill in its area of operations, so we take necessary steps to ensure operations are done in a manner devoid of spill. Also, companies have the responsibility to ensure that flowlines and pipelines are replaced before their integrity fail.

Let me say that vandalism and violence in the Niger Delta have contributed immensely to the amount of oil spill.

In 2009 about 98% of oil spill arose from vandalism from attempts by crude oil thieves to steal oil from the pipelines or wellheads and only two percent

Niger Delta is child's play to Gulf of Mexico

came from equipment failure. But we do take the issue of oil

spill very seriously regardless of what caused it. As I mentioned, only two percent of our spill last year came from equipment failure and the rest 98 percent f r o m s a b o t a g e , b u t notwithstanding, we move in to the site if access is allowed due to the security situation to quickly contain the spill, clean up and remedy.

I must say that in the last four years because of difficulties of getting access to spill sites because of the violence in the Niger Delta has actually meant that access to spills have not been as fast as it should be. But I am happy to say that given the success we are recording now from the Federal Government's Amnesty Initiative we are now able to move in quickly to attend to the spill that we have in various sites.

Clean up and remedy _ This year alone, we have been able clean up and remedy about 36 sites, and when I said lean up and remedy, I mean certified by the regulatory authorities to ensure that the exercise was done in accordance with set standard industry practice. So this has

brought about a good measure of hope and one of the reasons why we are totally committed to this whole issue of Amnesty, because I think peace in the Niger Delta will allow us to do a lot more work than ever done in the past.

I also note that there have been a lot of misrepresentation in the media trying to draw a parallel between what is happening in the Gulf of Mexico, GoM and what is happening in the Niger Delta. I want to make it very clear to you gentlemen of the press that there is actually no parallel between the two. I have even sent some really gross misrepresentation in the media suggesting that what we are seeing in the Gulf of Mexico is probably even less than what is happening in the Niger Delta

I can tell you on my honour based on the facts at my disposal that at Shell for instance, the total amount of spill that have happened in Shell in the last 10 years is far, far short of what is happening in the GoM, it is far, far short than the famous ExxonMobil spill, which a lot of the media has been harping about, I really just want to debunk that

The second point you also need

to be aware of is that when you're in deep water explorations, you're dealing with a completely different operating environment in terms of pressure from the well heads. When you're in the GoM where one well is capable of 60,000 barrels, it is different from when you're in the Niger Delta on land, where you have about between 1000 and 5000 barrels, so the situations are very, very different. In fact, I cannot recall any of our wells that is doing up to 10000, so it is a lower sector coverage.

Secondly, when you're in the deep water, the ability to control is hard and a lot higher than when you're working 3,000 feet below the sea level, so i thought it is important for you to realise that the situations in the Niger Delta, is different to the situation that is happening in the GoM. Be that as it may, we do what we can to address oil spill whenever it occurs. In all our operations, whenever we notice that there is a loss of containment through the pipelines or suddenly, there is a loss of containment, we will see the pressure drop because if a pipel ine is compromised, certainly there will be a pressure drop and part of our operating

procedure is that whenever there is pressure drop or containment of the pipeline, we shut in. In some cases it is a leak but in many cases the pressure drop is coming because some people have tampered with the pipeline and they are sucking the oil. But we still take the precaution of shutting our operation until we investigate to confirm whether it is by any loss of containment.

So we have a lot of these preventive measures to ensure that we prevent spill. I did mention earlier that in 2009, 98 percent of our spill was as a result of sabotage, but we are not just throwing up our arms, or saying because this is as a result of sabotage, there is nothing we can do. Absolutely not, we're taking steps to make it more difficult for people engaged in illegal oil bunkering and for vandals to break our pipelines. We did observe that a lot of our wells in remote location are being used by people engaged in illegal oil bunkering, especially where they know that we don't have aces to it, they take it over and in the cause of stealing oil from the well, things do go wrong and a spill may occur.

But what we are doing now, we are going back to those wells to make them tamper proof.

All the oil wells in Ogoni today, we have been able to secure and make them taper proof because we see a continuous cycle of people going to those well heads to steal oil and in the process damage the environment.

We have spent millions of dollars going back to these wells to fortify them in such a way of making it difficult for vandals to tamper with them. Since last year, I have set up a dedicated remediation team, whose job is to make sure that wherever spill occurs, they are able to move in faster to deal with the spills.

Total spill _ In terms of spill numbers, the

Oil spillage in the Niger Delta

CONTINUES ON PAGE 11

11Focus

Niger Delta is child's play to Gulf of Mexico

average between 2000 and 2007 and the average is less than 10,000, when you look at the Exxon spill, you're talking about 250,000. So I want you to be aware that the Exxon or BP spill is of several order of magnitude more than what we are talking about here.

Going back to Ogoni -It is important for me to clarify on our going back to Ogoni. What we are doing in Ogoni by going there to make the wells tamper-proof, is again, a demonstration of our stewardship. It is a demonstration of commitment to being a responsible company. But we not back in Ogoni, but we didn't think we should just fold our arms and let a few people in the community to continue to pollute the environment and that is why even though we are not back in Ogoni, we will continue to make sure that t h e e n v i r o n m e n t a l s p i l l happening in Ogoni is curtailed.

From experience, generally, every oil spill in Ogoni ia an act of sabotage, and we have a responsibility to clean up and restore the environment.

The UN Env i ronmen ta l P r o t e c t i o n A g e n c y w a s commissioned under the auspices of the Federal Government to go into Ogoni land complete the environmental survey of the area.

We have committed millions of dollars into the project and we are using the UNEP to give it the right level of independence and objectivity it deserves and afterwards, we will go in and do the remediation.

However, avai lable data suggests that crude oil theft is increasing, and this is not surprising in view of the recent violence in the Niger Delta. But government is tackling the situation, especially in Rivers State, where the governor has put his foot down on oil theft and read the riot act in Ogoni. Also, some government officials are wading into the matter and Mr. President has promised to invite companies on combating the menace of crude oil theft because of the massive pollution created by the illegal refineries located in the Niger Delta.

Shell operations -When I took over the leadership of the company, my vision is to make Shell become the No.1 company in the country and mould the public image and perception of the company.

With our annual operations report, Shell is the only operator that has voluntarily reported on all areas of its operations and we generated about $35bn revenues from our operations between 2005 and 2009, in addition to

several jobs and t raining programmes for Nigerians in the area of healthcare, education, water roads and SMEs.

Our social investment _ between 2005 and 2009, we scaled up our investment budget by 50 percent from $50m in 2005 to $250m in 2009, and we are looking forward to peace in the Niger Delta and Nigeria in order to do more.

Setbacks -from 2006 and early 2009, we experienced militancy and unrest in our areas of operations, to this end, the Federal Government amnesty initiative is working well so far and the oil and gas industry is committed to supporting the success of the programme.

To consolidate on the gains of t h e a m n e s t y p r o g r a m m e ,

government set up the Oil and Gas Forum on Amnesty chaired by the senior Presidential adviser on Energy, Dr. Emmanuel Egboga and myself as the vice chairman.

Let me say that the success amnesty will bring about a lot more opportunities and generate more revenue for government.

PIB -I must say that we are still not out of the woods yet with the PIB, but it is clear for me to acknowledge the commitment Mr. President had expressed to the oil and gas industry that he wants to see an investment friendly PIB. At every meeting with Mr. President, he expressed that commitment to us. Last week, when I also met with the minister of petroleum, she said exactly the same thing that they

will not want a PIB that will not attract investment in the oil and gas industry in Nigeria.

What remains for us is to work out an arrangement to ensure that this commitment is translated into modified provisions in the PIB that is before the Senate. My understanding is that there will be further engagements with the oil and gas industry to work out an acceptable provision, especially in the areas

where we are most concerned. Those areas are, the fiscal for deepwater, the concept of incorporated joint venture, IJV, the provisions for acreage license requirements and also gas fiscal. These four areas are our main contentious areas, and we will c o n t i n u e t o w o r k w i t h government on how to mitigate our concerns in these areas. For me, we want a situation where we can continue to operate, which I talked about in my opening remarks.

As to whether there is a plan B on the PIB if concerns in these areas are not resolved, I think it is in the best interest of everybody to ensure that we have a PIB that will satisfy all the needs and I do believe that both Mr. President and the minister are committed to ensuring that we do have an acceptable document.


Oil Spillage

With our annual operations report, Shell is the only operator that has

voluntarily reported on all areas of its operations and we generated about

$35bn revenues from our operations between 2005 and 2009

Focus 12F

The issue of oil spill and its subsequent e n v i r o n m e n t a l degradation has taken the front

burner in most national and global discuss in the last few months. From the ongoing massive spills in the gulf of Mexico where Pres ident Obama has secured a $20 billion compensation from the defaulting company BP, to the minimal spills at Ibeno, South_South Nigeria, where nothing has been heard from the Government it has become highly imperative that we take a closer look on the issue and the e f for t s o f the N iger ian Government in curbing this emerging menace in the upstream sector of our nation's oil industry. In this exclusive interview Sweetcrude's Yemie Adeoye spoke with the Director of the National Oil Spill Detection and Response Agency (NOSDRA) Mr. Idris Musa at the Agency's Headquarters in Abuja. He spoke on a number of issues all centering on the e f f o r t s o f t h e f e d e r a l government in ensuring that

FG is poised to combat oil spill-NOSDRAFG is poised to combat oil spill-NOSDRAFG is poised to combat oil spill-NOSDRA

issues of oil spills in the country are adequately dealt with as well as some of his Agency's challenges in carrying out this seemingly onerous task.

Excerpts: H o w w e l l e q u i p p e d i s

NOSDRA in dealing with issues of oil spill within the shores and

offshore Nigeria, especially in the Niger-Delta regions.

Let me start by saying that NOSDRA is an acronym for National Oil Spill Detection and Response Agency. It is a parastatal of the federal ministry of environment, established by law in October 2006 to carry out certain environmental functions. This includes receiving all reports of oil spills in Nigeria, to be in charge of surveillance and ensure compliance of all industry operators with all existing environmental legislation in the oil sector. There are other special functions which relate to regional cooperation amongst the West, Central and Southern African states since we now operate more offshore. In Nigeria we have operations onshore and offshore.

In te rms of NOSDRA's capability to tackle oil spill incidences in the Country, we need to first of all look at the human resources. We have professionals across board, Scientists, Chemists, as well as people in the Social sciences as some of the issues borders on Socio-economic and mediation between host communities and

the oil companies. We have all of these, but you can never say that we have enough.

In terms of constitutional c a p a b i l i t i e s , t h i s i s t h e Headquarters, we have offices now in Uyo which takes care of the Southern part, or the Southeastern par t of our coastline, that is Akwa Ibom and Cross River.

We also have another office in Harcourt, which takes care of Port-Harcourt and Bayelsa, We also have in Warri, which takes care of Edo, Delta and Ondo states. We also have an office in Kaduna, this office is aimed at taking care of the Kaduna refinery as well as all the inland network of pipelines that carry petroleum products to the northern parts of the country including the federal capital territory. Only recently we had a spill at a village near Abaji, where some vandals interfered with the pipelines carrying crude to Kaduna refinery, that was quickly stopped and the necessary clean_up exercise has started. So we also have here at the Headquarters, the Nation Spill Control and Response Center

which we are bringing up, government has awarded a center for the establishment of a GIS center here which would be a very useful tool for us to link up with our various zonal offices as well as the oil companies. Issues of reporting will just go straight into our system, and in order to avoid delays or the use of GSM we have ordered for instruments that are compatible with what the oil companies have so that synergy is going to be there. We are currently at about 60 to 65 percent completion of a very standard laboratory and warehouse in Port-Harcourt, Government has also awarded a contract of 150 million naira to make sure that we have adequate equipment which we need to analyze samples of any sediments or sand or water that we may take from the field.

Government has also enabled us to procure a 19 meter work boat; this will assist us in monitoring as well as in oil recovery in the case of any oil spill. We are in the process of acquiring a smaller version of it which would be able to maneuver

Oil Spillage

We have professionals across

board, Scientists, Chemists, as well as people in the Social sciences as some of

the issues borders on Socio-economic and mediation between host communities

and the oil companies

CONTINUES ON PAGE 13

13Focus

FG is poised to combat oil spill-NOSDRAFG is poised to combat oil spill-NOSDRAFG is poised to combat oil spill-NOSDRA

within the creeks and its environs. These are some of the institutional build up that we are already having. In the Warehouse mentioned earlier, we have some oil response equipment like schemers, vacuum pumps and so on, all of this we want to keep as stocks to assist or complement whatever the oil companies have within their first tier response equipment.

Also to complement what the Clean Nigeria Associate has. This Associate is a cooperative of the oil companies which enables them to pull their resources together in order to acquire equipments that a single oil company may not necessarily be able to procure without eating too deep into its operation costs. Thus when there is a major impact beyond an individual capability, you call on the CNA to clean, and all of these we also monitor.

As a matter of fact, last year in an effort for us to ensure that our collaboration with oil industry operators and their cooperative is effective, we have been granted an observer status in the CNA board, and the Chief Executive of NOSDRA is the one that attends.

From all you've said now, it still appears NOSDRA is still on the verge of getting its acts together to combat issues of oil spill in the country?

NOSDRA is not just gathering its acts together, NOSDRA plays a dual role. One is that it is a co-coordinating agency when it comes to the National Oil Spill C o n t i n g e n c y p l a n

implementation. In which case, if we have the type of incident currently playing out at the Gulf of Mexico, which is a major spill, then the country would need to activate the National plan because the issue at hand would then be regarded as a national disaster. It would no longer be a matter of one company or the other, the nation wades in to protect its assets, lives and properties of its citizens.

NOSDRA is positioned to coordinate how resources would be pulled together from the different arms and agencies of government. This includes all stakeholders involved in curbing such huge disasters, the Ministry of Health, Transport, the Military, NAMA, of course you know the army has its marine commandos, all of these people would pull in all their resources to face this national calamity, but then its not going to be a free for all, somebody has to coordinate, and that is where NOSDRA comes into play, that si, on the coordination of the activation of t h e N a t i o n a l O i l s p i l l Contingency plan.

Also we are also saddled with the role of a regulator. That is ensuring compliance with all e x i s t i n g e n v i r o n m e n t a l leg is la t ion in wi th in the petroleum sector in Nigeria that is regulatory.

I've mentioned to you about spillages from the oil companies, how they have their first tier, their second t ier which is the cooperative. Mandatorily, all spills in Nigeria are reported to

the Agency even if it's one gallon of oil that drops on the environment, it must be reported, we have those reports and we do coordinate and keep statistics of this since the establishment of this Agency. So we ensure that all of these issues are properly coordinated. Where you see any oil company not towing this line that is where you see us coming out to call for meetings. For instance recently, we had discussions with ExxonMobil, with the primary aim of express the concern of Agency to the multinational, for them to know that we are not happy that it has not cleaned up to all practical extent the way we want it to be done, not the way they want it done. That is a regulatory role. So from all of these, you can see that we rea not getting our acts together, we are already in it, but that is not to say that we would not need support, especially in the area of human resources.

So what are the core challenges you are faced with in your effort to ensure a spill_free operating environment for the country.

The core challenges we are faced with has to do with not been adequately kited to do the job that we consider onerous but quite possible to carry out with adequate support from the federal government. The support needs to be further strengthened even if Government has given us support by ensuring that we acquire a work boat as well as a monitoring boat, a GIS, which would be in our oil spill control and response center. We also need adequate

personal protection equipment for safety purpose. These are things that we use frequently and you need to be properly kited at all times to perform your functions adequately.

What are your sources of Funding? I understand your Agency operates under the Ministry of Environment. Do you get funding from other sources like the IOC's., or is it strictly government funding that drives NOSDRA?

We do not receive support from either the IOC's or any other body. Government is the sole source of funding for now, because it's a federal government Agency. However, there are other ways of generating revenues as we go on; of course I forgot to mention to you that we have just launched the Environmental Sensitivity Index (ESI) map of the Nigerian coastline which also veers into the hinterland by 50 kilometers. That is to demarcate and delineate appropriately areas that are very sensitive, they are vulnerable and highly sensitive and needs to be protected if there should be any oil spill, for instance the mangrove swamp or forest, this is an area that has to be protected adequately because when there is a spill and it gets into the mangrove it becomes very difficult to clean, so the best thing to do is to ensure that contain and do more bar in such areas to ensure that you do not loose the natural habitat there as well as the flora.

There are other areas that are sensitive such as the habitat of some aquatic species, all these areas are protected. This is what ESI is all about, indicating to you areas that are sensitive, and must be protected, that's part of what we've achieved within a short time of establishment.


Mandatorily, all spills in Nigeria are reported to

the Agency even if it's one gallon of oil that drops

on the environment, it

must be reported, we have those

reports and we do coordinate and

keep statistics of this since the

establishment of this Agency

Oil Spillage in the Niger Delta

14FeedbackFeedback

Local content policy and its implication for Nigeria

Innocent I. Edemhanria

To assuage the strong conce rns o f o i l p r o d u c i n g c o m m u n i t i e s i n Nigeria's oil rich

Niger Delta, the administration of former President Olusegun Obasanjo initiated the Local Content Policy for Nigeria to increase local capacity and participation in the petroleum i n d u s t r y. T h e O b a s a n j o government needed to achieve the objective by ensuring that a substantial portion of the activities in the oil and gas sector, which is the mainstay of Nigerian economy, were carried out in the country by Nigerian companies and Nigerian workers.

As it is currently, more than 70 percent of the jobs in the oil and gas sector are still carried out by foreigners, an action, which is contrary to the local content p o l i c y o f t h e N i g e r i a n g o v e r n m e n t . A t a t i m e , stakeholders in the industry argued that government was not serious in attempting to stop this act of 'cheating', as it could not lobby the National Assembly to sign the Local Content Bill into law. Many described it as an aberration that such a bill that is geared towards improving indigenous participation in the oil and gas industry, after many years that it was initiated, has not been passed into law.

Even the Nigerian National Petroleum Corporation (NNPC) at a point warned that it will no longer be acceptable for oil companies that operate in Nigeria and derive enormous revenue from the country to hide under convenient excuses to export Rig Shipyard/Shut_down Repairs & Maintenance to other countries, a threat which the oil companies did not take seriously as they continued to take the bulk of their works to foreign countries, because they have no confident in the ability of Nigerian companies to handle such jobs. Experts in the industry estimate that Nigerian content in the oil and gas sector is around 40%, which indicate that most white_collar jobs such as engineering, material and maintenance work are provided by foreign workers and overseas suppliers. The trust of the Nigerian Content Policy is to promote value addition to the local economy, increase local participation, build local capacity on the back of ongoing projects and generally increase linkage to

other sectors of the National economy to grow local content by 70%.

Unfortunately, this noble dream of having the local content bill signed into law and implemented could not be achieved during Obasanjo's administration. The administration of Goodluck Jonathan saw the eventual passage of the bill which was then signed into law on Thursday April 22nd 2010 while in acting capacity. President Jonathan, hoped that this new law will help provide domestic job growth to Nigeria's 140 million citizens who have seen little tangible benefit in their daily lives in the five decades since oil was first discovered. Stakeholders in the oil and gas sector immediately hailed the development as a great day for the industry as it would create many jobs among other forms of empowerment for indigenous personnel and operators. In fact, the Minister of Petroleum Resources Mrs. D i e z a n i A l i s o n _ M a d u e k e reportedly said the bill has the potential of generating over 30,000 jobs in the next five years. If this is achieved, then the unemployment situation in N i g e r i a w o u l d i m p r o v e marginally.

Beyond the issue of job creation, the law also has far reaching implicat ions for technological advancement, long term cost effectiveness, post amnesty programme in the Niger Delta and the improved impact of oil and gas industry on Nigeria's Gross Domestic Product. The bill which was sponsored by Senator L e e M a e b e , m a d e c l e a r p rov i s i ons fo r exc lu s ive consideration of Nigerian indigenous service companies which demonstrate ownership of equipment, Nigerian personnel and capacity to execute jobs. And as such, all regulatory authorities, o p e r a t o r s , c o n t r a c t o r s , sub_contractors, alliance partners and other entities involved in the project, operation, activity or transaction in the industry shall consider Nigerian content as an important element of their overall p ro jec t deve lopment and management philosophy for project execution.

The bill also provides that every multinational oil company operating in Nigeria must domicile a minimum of 10% of its annual profit in Nigerian banks, which means that Nigerian banks

will have more money to fund investment in the country. Nigerian insurance companies must do all aspect of insurance in the oil and gas sector except in the opinion of the Nigerian Insurance Commission, the capacity of Nigerian companies have been exhausted. Nigerian companies must also do all issues of legal services and every company doing project in a community must establish in that community.

The Act will also create special fund into, which one percent of every contract awarded in Nigeria's oil and gas sector shall be paid for the purpose of building capacity and capability in the sector. This provision is meant to take care of funding local capacity building to ensure that greater percentage of the projects in the industry are done in Nigeria by Nigerians. Also at least 50% of the asset of any company seeking to execute oil and gas contract in

Nigeria must be domicile in Nigeria. This is to ensure that a large chunk of the payment for the contract is domicile in Nigeria.

Under the Act as well, Nigerians shall be given first consideration in the award of oil blocks, oil field licenses, oil lifting license and shipping service and all project for which contracts are to be awarded in the industry; subject to the fulfillment of such conditions as may be specified by the Petroleum Minister; and there shall be exclusive consideration for Nigerian indigenous services. It will also check a situation where jobs are g iven to unqualified personnel just because they are Nigerians, it will be appropriate to give such jobs to qualified foreigner who can satisfactorily execute the jobs.

At this point, let me be quick to note that it was difficult to enforce the Nigerian Local Content Policy as defaulters could not be sanctioned without the law in place, for this reason, Nigerian government has taken the right step in putting in place a law and measures that will compel multinationals and the Nigerian people to obey in its totality the content of the Act.

A critical challenge to the realization of the objectives of the local content law is the absence of a functional steel mill and

sustainable power to support the fabrication. Today, Nigeria does not have a functional steel mill; the Delta Steel Company, Aladja, and Adjaokuta Steel Rolling Mill are both in comatose conditions. As 85% of the oil industry project activities revolve around the steel industry, it may be difficult to realize government's target in the local content policy, if the issue of local production of steel and electricity are not urgently addressed. Thank God, now that President Goodluck Jonathan has decided to double as Minister for power, in order to personally handle the necessary issues in the sector. He must ensure that all necessary arrangements are put in place to restore the lost glory of the power sector in Nigeria.

Besides, for such an important policy to succeed, government s h o u l d p a r t n e r w i t h k e y stakeholders including civil s o c i e t y t o m o n i t o r i t s implementation. Nigerians are in a hurry to see the enforcement of Local Content Act so that the Niger Delta people and Nigerians in general will reap the attendant benefits.

" M r . I n n o c e n t Edemhanria is a Programme Officer with Africa Network for Environment and Economic Justice (ANEEJ).

A bold step at reversing the resource curse phenomenon in the Niger Delta By Innocent I Edemhanria

In 2008, Africa Network for Environment and E c o n o m i c J u s t i c e ( A N E E J ) , a n o n _ g o v e r n m e n t a l

organisation based in Benin City, Edo State, commenced a n o v e l p r o j e c t e n t i t l e d Strengthening Oil Revenue Management in Niger Delta. The project cover five states in the region, namely Edo, Delta, Bayelsa, Rivers and Cross River and is been supported by the Norwegian Government, EED Germany. Recently, the Government of Switzerland, through their embassy in Nigeria, joined the list of donors to the project.

The entire three years project is reacting to the lack of progress in the sustainable d e v e l o p m e n t o f l o c a l communities in the nine Niger Delta States, and in particular to the management of the 13% derivation of Federal oil revenues. This derivation has been in place since 1999 and although figures are not freely

available, 13% of petroleum exports can be estimated to total approximately US$22 billion (1999 _ 2005) and US$6 billion in 2006, (extrapolating figures in t h e 2 0 0 6 O P E C A n n u a l Statistical Bulletin).

It is quite clear that this finance has not had significant impact on development in the region or in improving the socioeconomic opportunities of the people. Majority of Niger Delta people still live in abject poverty with little amenities at their disposal to enjoy. This can be attributed to mismanagement of these oil revenues and a mismatch between policy imperatives and the ability to deliver on the ground.

ANEEJ is engaging with State Assemblies and the Executive, Local Authorities, the Niger Delta Development Commission ( N D D C ) , t h e N i g e r i a n E x t r a c t i v e I n d u s t r i e s Transparency Initiative (NEITI), Oil & Gas Commissions, Media, Civil Society Organisations and other non state actors (including t h e p r i v a t e s e c t o r ) i n transparency, accountability and

good governance through a strategic capacity building programme.

Working with five groups within five Niger Delta States _ the Oil & Gas Commissions, S t a t e m i n i s t r i e s & Legislatures, local authorities and local communities/civil s o c i e t y o r g a n i s a t i o n s (including the private sector) and the media _ the project seeks to encourage actors in Commissions, State ministries a n d t h e N i g e r D e l t a Development Commission (NDDC) to collaborate in the delivery of revenue and e x p e n d i t u r e p l a n s , i n consul ta t ion wi th local authorities, communities and civil society organisations (including the private sector). S p e c i f i c t r a i n i n g o n strengthening the oversight role of the State Assembly Legislators in holding the Executives and Oil & Gas Commissions to account will underpin the work conducted with the other groups (stepping down the NEITI to the sub-region: EITI++).

15FeedbackFeedback

I have observed how over the years the general attitude of Nigerians towards corruption or perceived corruption has

transformed from repulsion and revulsion to attraction. Or how else can one explain the rise in the number of corruption cases that are reported daily in the media in spite of the much talked about war against corruption that the various administrations often dec l a r e on the menace? Bothersome as this trend has become already, it has begun to progress from mere attraction to outright celebration.

We saw this celebration of corruption element in the case of the former Speaker of the House of Representatives, Mrs Patricia Etteh. The corruption case against her was so celebrated that in the frenzy Nigerians lost touch with the facts of the case, overwhelmed by the cries of

FAAC and the N450b NNPC Debt: Lest we celebrate in vain

Ben EKORI

"crucify her, crucify her!" Etteh was, in a manner of speaking, crucified. But barely a year later after the dust of the celebration had settled down, the facts began to emerge and it became clear that she had been "crucified" for a corrupt act she intended to commit, but did not actually commit.

A curious form of celebration of corruption came to the fore last year at the height of the Sanusi Lamido Sanusi_led banking sector reform. After the sack of the Managing Directors of the "sick" banks, it came to light that some of the loans that were drowning the banks were insider a b u s e _ r e l a t e d . T h e n t h e celebration started. In the heat of the celebration, every debt owed to a bank became a crime and every loan obtained from a bank became corruption. Both fake and genuine businessmen were hounded for 'non-performing

loans' which at that time became another name for corruption. But several months later after the tide of celebration had begun to ebb and people had begun to feel the n e g a t i v e i m p a c t o f t h e criminalization of loans in businesses and the economy, Nigerians began to raise questions as to when it became a crime for one to take a loan or owe a bank.

Now, what do all of these have to do with N450 billion debt the Nigerian National Petroleum Corporation (NNPC) is said to be

i n d e b t e d t o t h e F e d e r a l Government or the Federation Account Allocation Committee? Though none has directly accused NNPC of committing a crime by owing the Federal Government, a similar trend of celebrating corruption is discernible in the way newspapers have been celebrating the news in their editorials. Since the Minister of State for Finance, Mr. Remi Babalola, disclosed the decision of FAAC to get NNPC to commit to a payment plan for the N450b

debt some weeks ago, the media has been agog with reports, editorials and commentaries on the issue, celebrating what they perceive to be another case of c o r r u p t i o n . S o m e e v e n interpreted it as a confirmation of "the rot in NNPC", since President Goodluck Jonathan had earlier ordered a probe of the Corporation's books. For most people, the simple arithmetic is that Mr President's directive to the Minister of Finance to appoint a world class audit firm to audit NNPC's accounts plus Babalola's call on NNPC to present to FAAC a work plan on how it intends to pay the N450b debt equals monumental corruption in the Corporation. For them, this calls for celebration.

And as the celebration gathers momentum, reason is thrown to the winds in the frenzy. No one wan t s to d raw f rom the experience of the recent past that has shown clearly that a debt is not a crime, neither is it an act of corruption. No one wants to know how the debt came about. Not even the explanation of the Minister of State for Finance that NNPC has been saddled with so much responsibility with regard to the payment of petroleum subsidy to such a level that it is hemorrhaging to death has made any difference. Babalola's explanation that the Federal Government is owing NNPC much more that the Corporation is owing FAAC was deliberately ignored. Some even went to the ludicrous level of insinuating that the Minister of State has been 'settled' by NNPC to hold brief for it.

But before we get carried away by the celebration, it is fair to get an understanding of the issues involved in the N450b debt, lest we be found to have celebrated in vain. The N450b was part of the money realized from the sales of Crude oil that NNPC was supposed to have paid into the Federation Account. But it could not pay the money into the Federation Account because at that time, more money was needed above what was budgeted for to sustain crude oil production activities to ensure that cash flow into the Federation Account does not dry up as a result of the attacks on oil production facilities by militants in the Niger Delta.

nfortunately economic destruction in the name of politics did not end U

with George W. Bush. 'Nook-u-lure' and 'fuzzy-math' issues w h i c h s e e m e d s o v e r y confusing to him are no match for the mindlessness practiced by American journalists today.

It became clear to me in the wake of the tragic BP oil spill that, like here in Nigeria, the days of the US empire are numbered if Americans can't ascertain between truth and the incessant 'spin' of special interests working through powerful media outlets. Year after year Americans remain stuck in this 'event spin-cycle' on every issue that hits them, and Americans don't seem to have the ability or even the inclination to differentiate truth from fabrication. In fact, at times it seems they even revel in it as they laughed, joked and 'har-hared' their way through the last 20 years of party politics.

As we are all aware by now, B P h a s b e e n v a l i a n t l y struggling to squelch lost control of a deepwater well in the Gulf of Mexico. Sadly, this event has taken human life and h a s h a d c a t a s t r o p h i c environmental consequences.

I was back home in Houston, Texas for the Offshore Technology Conference (OTC) in April along with hundreds of Nigerians intent on developing business opportunities (and maybe a bit of fun and shopping). Ironically, this

BP oil spill: Discerning facts from fictionconference aimed at showcasing intellectual property and hard technology to enable the oil industry to perform more effectively, was taking place as oil spewed from the seafloor a short distance away. By participation in such events as the OTC, the oil industry has endeavoured to keep pace with safety in engineering and operations as it moves into more difficult environs like ultra-deep waters.

During OTC week, I paid special attention to what the US national media were reporting about the unfortunate event. By tuning in to a variety of both TV and radio sources, I was able to get a holistic viewpoint.

While there were some sources reporting balanced and insightful i n f o r m a t i o n , t h e r e w e r e shockingly numerous media sources of sensationalized news and spin journalism.

It was the spin journalism that was particularly disturbing because of the knock-on effect amongst those that will believe it, and believe me there are a lot. Albeit, while this industry is not simple to comprehend, this does not give media carte-blanche to contort the facts or story in a calculated strategy to mislead the viewing/listening audience at least in terms of journalism the way it was meant to be practiced.

So why do the spin doctors do this? Their objective is to effect a certain view contrary to the reality of the situation or facts. Ultimately, this leads to a political position…and a vote.

Of the oil spill reports I heard, the one most disturbing was from a nationally syndicated radio talkshow host who stated flatly that it was, 'Obama's fault'. This twisted logic somehow being that Obama's lift of the offshore drilling moratorium was the rootcause. This limpbrain shock jock, as well as the others, completely ignored the fact that no previous President has completed a comprehensive domestic energy policy and/or climate policy to leave as a legacy of accompl ishment . They completely ignore the fact that the US is addicted to oil and that a sustainable energy policy would wean their economy off oil dependency. They completely ignore that the oil industry has been transparent in that there are inherent risks in going to the extreme efforts to meet the US energy demands. And they completely ignore the fact that the oil industry has drilled and successfully produced thousands of offshore wells in the Gulf of Mexico in the last 50 years with increasingly good safety and environmental records.

Some commentators made such preposterous claims such as; 'terrorists likely caused it'. They went on to state that this was according to the residents of Louisiana (the state adjacent to the spill), as if these folks would know.

Considering that the people of Louisiana constitute one of the lowest educated states in the USA, why would people from there have any more idea than a box of rocks how the oil spill was

caused? While it would not be too surprising that people from Louisiana might be totally sucked in to the whole terrorist mindset, it is surprising that enough Americans actually believe such rubbish to justify a national market broadcast.

The sources of the above d e s c r i b e d b l a t h e r a n d disparaging remarks shall go unnamed here in refusal to give them additional 'air-time' as a result of being so mindlessly pathet ic . But what is particularly disturbing is the fact that Americans follow these broadcasters enmasse. And it affects their views of not just current events, but of those in positions of leadership. And therein is the rub. The long and short of it is that Obama has been working tirelessly on all fronts since taking office. He has put forth more effort in m o r e a r e a s w i t h m o r e professional zeal in his short time there than Bush did in 8 years. He inherited a financial mess from George Bush and has taken it head on. But he has been fought every inch of the way no matter what he has done by media groups run with R e p u b l i c a n i n t e r e s t s regardless of the consequences on the country as a whole. It has become so bad that they have even condemned him for working too hard!

Mark Fitzgerald is the Chief Risk Engineer of a major international oil company with s ign i f ican t p resence in Nigeria's upstream oil industry.

Mark FITZGERALD

ETP R O L EL UA MN OI T CA ON R P ON RAI ATRE IOG NI N


SweetCrude 16

NipeNigerian Petroleum Exchange

Overview of the Contracting Process

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Dictate Regulations; Monitor & ensure Registered Suppliers

SweetCrude 17





Funsho Kupolokun at an outing in 2005 stated the objectives again when he informed his audience that “‘.....bids for

contracts and most of other businesses in the Nigerian Oil and Gas industry will be done through the digital marketplace”.

Engineer Kupolokun explained that the digital marketplace was part of the reforms to be undertaken to ensure

transparency, efficiency and to improve on value procurement in the industry. He further stated that “it is the auction

system, but in a reverse direction. It would be transparent, open and there would be no delay for approval. If we do this, at

least you would save 10 to 15 percent of the procurement cost that we have currently”.

Nigerian content function

Planning

Intervention

Collaboration and facilitation

Research and Development

uremsa ee nM t t Pn ee rt fn oo rmC an no ci t ea Mcif oil na itu oQ r- iner gP

no Pit rc oa cs en sa sr inT g. o Afn nI at lc ye sj isor &P Rg eni pr oot ri tin no gM

NipeX Function:

Transaction Processing & Execution

Monitoring & Reporting

Repository for Project Information

Receive inputs to planningMonitor impact of intervention

Post RFX and Receive ResponsesCollaborates with NAPIMS andObtain Approvals

Receive inputs to planningMonitor impact of intervention

Get Pre-Qualified

Respond to RFXs and View Results

Registration of Suppliers

Regulatory Oversight

Compliance Monitoring

Ministry for

Petroleum

Resources

NNPC

View Results & Give approvals

oSe t n

Plicy

t i g

DPR

MonitorCompliance

Other Regulatory Bodies and Public(s)e.g FIRS, Schools, Specialist trainers

Suppliers

SweetCrude 18





consequently the volume of business.

Also, the Petroleum Marketplace, TradeJango, which is

a subsidiary of Sonangol (Angola’s oil company)

became operational in 2005. It is primarily aimed at

optimizing the procurement of goods and services

thereby supporting the development of the upstream oil

industry in Angola.

The acronym NipeX from Nigerian Petroleum

Exchange describes our new online contracting

platform that links buyers with suppliers, and

establishes industry-wide standards for transacting

business. The NipeX system is composed of two web-

based solutions which facilitate supplier selection,

procurement and contract approval process - JQS and

eMarketplace.

The Joint Qualification System (JQS) is designed with

the primary objective of providing an industry-standard

supplier sourcing tool that will streamline, increase

efficiency and instill integrity in the pre-qualification

process of Nigerian-based contractors and service

providers. The eMarketplace is deployed using mySAP

Supplier Relationship Management (SRM) technology,

which delivers a comprehensive suite of capabilities

including a platform for executing, monitoring and

measuring all contracting activities in N igeria.

The NipeX system has been designed to deliver

process efficiency through digitization and

standardization of the contracting and procurement

process. It will bring about a reduction in contract

cycle times and institute world class supply chain

services that will radically impact the entire value

chain of the oil and gas sector in Nigeria.

OBJECTIVES OF NipeX

The main objective of NipeX Marketplace is to allow

multiple companies use digital, Internet-based

connectivity to coordinate their activities.

Also, NipeX delivers an electronic marketplace with

integration to JQS database that facilitates supplier

selection, contract approval processes and ultimately

procurement processes, between the Oil Companies

and NNPC.

The Group General Managing Director, Engineer

5.2 UPSTREAM SERVICES

Services in the upstream segment of the oil and gas industry

include exploration support services such as seismic data

acquisition, processing and interpretation; drilling services such

as well drilling, cementing, logging; and production support

services.

NipeX: A NEW TOOL TO FACILITATING INDUSTRY PROCUREMENT AND CONTRACTING PROCESSINTRODUCTION

Background:

In 2002, NNPC initiated a transformation effort (Project

PACE) to help it achieve its vision of being a world class

integrated oil and gas company. One of the processes

identified for transformation was the contracting and

procurement process. This is a key function where

NNPC collaborates with its JV and PSC Partners. The

process was essentially manual resulting in lengthy

contract cycle times, with associated high administrative

costs and low participation of indigenous suppliers. The

direct impact of these challenges was significant

escalation of cost for NNPC, its Partners, and by

extension, the Nigerian economy as well as lack of

Nigerian Content input.

The Nigerian Petroleum Exchange (NipeX) is a result of

painstaking research into the best technology platform

that would deliver on NNPC’s objectives and satisfy

Stakeholders’ expectations in the contracting process.The Petroleum Marketplace concept has been used by some national governments through

their state oil companies in supporting the development

of the national oil industry. This technological application

tool is currently being used to reduce the purchasing

cycle times, optimize the biding processes, develop and

track an efficient communication channel with the supply

industry. The Brazilian oil company, Petrobras has an

established e-Market - PETRONECT that became

operational in August 2003. PETRONECT acts as an

industry integrator, with all supply chain members doing

business through the business-to-business (b2b) Portal.

This was achieved by establishing an electronic

business solution that improves the liquidity, agility, and

SweetCrude 19





Notification Pack containing Certification

Email Files &Fax Declaration

CD Pack

Process Registration

Evaluation of Data

234 098456 314419 678

Database

The Supplier Registration Process

Suppliers NipeX

Registration Form& Payments


SUBJECT MATTERHOW NipeX WORKS

The NipeX system is a web-based

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

emarketplace solution with the Joint

Qualification system (JQS). In this

business model, JQS handles supplier

registration and pre-qualification, while

the eMarketplace facilitates the

execution of the contracting process.

A. Supplier Registration and Pre-qualification

Registration with DPR is the first step

towards becoming an industry supplier.

Once registered, each supplier

completes a pre-qualification form

providing information about their

company on the online database.

Suppliers will then pre-qualified and

where applicable, sites and office visits

will be conducted to assess their

capabilities and categorize them

accordingly. For specific contracts

templates may be attached to the

advert to be completed by Suppliers as

a basis for additional filtration.Both Buyers and Suppliers operate under standard terms and conditions, and will be requiredto pay an annual registration fee. Some companies may wish to register as both Buyer andSupplier. If this is the case, then they would be required to sign a confidentiality agreementwith NipeX.

Stage 1

Once NipeX receives the Supplier’s application and payment, log-in details and instructions on how to fill in the pre-qualification questionnaire are sent to the Supplier.

Registration form & Payment

CompleteQuestionaire

d oSen N X

SweetCrude 20





Stage 2

All the information in the questionnaire will go through a quality check, and the Supplier will be notified if any amendments are required.

Stage 3

The information provided by the Supplier is registered on the JQS database. The Suppliers will be evaluated on their capabilities in the various product categories and where applicable sites and office visits by a joint team of NNPC (NCD & NAPIMS) and Operators, Suppliers will receive confirmation that registration has been successful, and the information is made accessible to Operators and NNPC.

Stage 4

One month before a Supplier’s annual registration expires, a reminder would be sent to update and renew registration.

B. Bid Submission and Evaluation Process

The eMarketplace system handles the different phases of

the contracting process. These are Opportunity,

Technical and Commercial Phases.

Opportunity Phase: The contracting process begins with

the Opportunity Phase where the contract strategy and

Opportunity (Advert) developed by the Buyer are

reviewed and approved by NAPIMS. The approved

opportunity is then published on the NipeX portal for

interested suppliers and the public to view.

Technical Phase: This is the second phase in the

contracting process. The Tender documents and Supplier

Response Templates are developed by the Buyer and

uB yer

Quotation and reports are available to the Operator and NAPIMS/NNPC for evaluation

SweetCrude 21





approved by NAPIMS. The Request for Proposal (RFP)

containing these documents is published electronically

for pre-qualified suppliers who have been identified for the

category of goods or services required to access. The

suppliers respond electronically with their technical bids,

while the technical evaluation criteria document is being

approved. The bids are evaluated by NNPC and their

partners upon receipt, and technically-qualified bidders

are selected.

Commercial Phase: The diagram below describes how

the Commercial Phase is carried out using the NipeX

system.

1. The Buyer sends a Request for Quotation (RFQ) for

the supply of materials or services via the NipeX portal

to technically qualified Suppliers. These Suppliers can

access the NipeX Portal and view the published

request from the Buyer.

2. The Suppliers send in their bid responses to the

Request for Quotation (RFQ). Commercial bids could

be received via RFQ or reverse auction if the suppliers

have been invited to participate in the reverse auction

NipeXServiceOffering

Supplier Pre-qualification

Collaboration

Online Approvals

Rfx/Reverse Auctions

Reporting/Analytical Service

Reporting and other information based service

A more efficient SupplierPre-qualification process

Service that facilitate information and data interchange between stakeholders

Online approvals of contract documents and bids

Transparent commercial evaluationsCompetitive pricing and contract award

published by the Buyer.

3. The Bids come into the NipeX System and are

available as quotations. The results of the bids are

processed using the BW reporting system, and can

also be exported to MS Excel for further analysis.

4. On conclusion of the Commercial Evaluation, the

quotations and bid reports are available to the

Operator and NAP1MS/NNPC for evaluation and

approval. All NNPC (NAPIMS, CRC, GEC and Board)

approvals are carried out online. Relevant 1OC and

NNPC personnel involved in the contract are able to

monitor the status of the approvals.\.

NipeX SERVICE OFFERINGS

The NipeX system is developed to provide first class

contracting and procurement services to all

stakeholders within the upstream oil and gas industry.

These services as illustrated below include:

D Supplier Pre-qualification: The NipeX system

provides a standard supplier sourcing tool for the

Nipe

NNPC

SweetCrude 22





industry. The JQS provides a database of

registered and pre-qualified suppliers in the

industry. Suppliers are categorized based on their

capabilities and areas of specialization. The

process provides the industry with a more efficient

supplier pre-qualification and categorization

system.

D Collaboration: NipeX offers functionalities for efficient communication and interactions between parties involved in a contract. The Collaboration Room functionality enables interactions between the Operator and Approvers, while the cFolder enables interactions

between Operators and Suppliers involved in a

contract. Users can communicate through discussion forums and assign tasks to other users in the system. Users can also upload and download documents relevant to each phase of the contracting process.

D Online Approvals: The NipeX system enables the

approval of both contract documents and bids to

be executed online. The Operators submit the

documents and bids for approval through the

NipeX system and NNPC carries out the approvals

online. Both Operator and NNPC are able to

monitor the document and bid approval status

online. The approval process can also be

monitored by all stakeholders at different Stages of

Buyers

Process optimization

and costs reduction

Transparency

Accelerate first oil

Efficient purchasing

process

Facilitate the Nigerian

Content programme

NNPC Minimized processing

costs

Access to more

business opportunities

Process simplification

through a single

system

Suppliers

NipeXBenefit

Process optimization

Administrative costs

reduction

Better collaboration

with Partners

faster decisions and

approvals from NNPC

Competitive pricing

Pre-qualified Suppliers

in a central database

NipeXBenefit

SweetCrude 23





the contract.

D RFx/ Online Auctions: NipeX provides tools for

carrying out ful ly-transparent commercial

evaluations, based on clearly defined requirements,

using the electronic Request for Quotation (eRFQ) or

Reverse Auction tools available within the system.

The Technical phase is carried out using the Request

for Proposal (RFP) functionality. These tools allow the

Operator to obtain a competitive price for materials

and services, and award the contract to the lowest or

best bid.

D Reporting & Analytical Services: NipeX provides

different management reports from data generated

by transactions running in the system. This helps to

improve transparency, monitoring and control in the

industry. The following are some of the reports that

the NipeX system can generate:

• Invitations Per Supplier

• Single Event Reports (RFQ/Auction)

• Process Approval Time

• Commercial Phase Value Transaction.

Taking the initiative by acting rather than reacting to events

Inspiring trust by taking responsibility, acting ethically, and encouraging honest and open debate

Proactive

Working together to deliver consistently exceptional service to our customers

Professionalism

Conferring to the standards of skills, competence, and character in the work environments Teamwork

Respectfor the

individual

Valuing diversity, ensuring and interesting and inclusive environment, and treating people as we would like to be treated

Taking responsibility for performance in light of agreed expectations

Accountability

CustomerService

Excellence

Integrity

NipeXCore Values

Patriotism

Contributing towards the development of skills and competence building in Nigeria

Core Values

Achieving client satisfaction by providing prompt, efficient and quantity service delivery for all stakeholders

SweetCrude 24





• Effective Contracting Tool: NipeX provides NNPC

and the industry with a powerful and effective

technology tool to professionally control and

manage the commercial aspects of the oil and gas

industry.

• Process Integrity: Transparency, auditability and

best procurement practices will boost the image

of Nigeria’s oil and gas industry globally.

• Nigerian Content Development: The quantum

leap in savings achieved through NipeX can be

tracked and employed to finance human capital

and local capacity development

THE NipeX BRAND

Vision

To provide an industry platform for fast, efficient and

transparent supply chain transactions between buyers

of goods and services and their suppliers.

• Commercial Phase Savings Transaction

• Price Comparison for RFQs

BENEFITS

NipeX promises to deliver significant, value-added

improvements to the management of contracting and

procurement processes in the Nigerian oil and gas

industry.

Technology and Information Inflow: As the NipeX

solution matures; it marks the beginning of an oil

and gas technology hub in the West African sub-

region, thereby leading to the transformation of

procurement beyond the upstream oil industry to

other sectors of the economy.

SweetCrude 25





Eff ic ient and effect ive pre-

qualification process

(JQS)

* A more efficient and effective

Contract management and

approval process

“ Establish an

enviroTiWeRmr^FaWation

and exchange of information

between the industry

stakeholders

* Web Portal Delivery Access for

Third Party Stakeholders e.g.

Suppliers, lOCs. Regulators,

Public

Nigerian Content growth in the oil and gas industry

Collaborative planning

Increased benefits for all our stakeholders

Mission

To build transaction confidence

in the supply of goods and

services in Nigeria’s oil and gas

indust ry by cont inuous ly

adapting to the needs of

c u s t o m e r s a n d o t h e r

stakeholders.

Brand Attributes

In all our activities, we seek to

display some unchanging,

fundamental qualities. These

qualities - integrity, continuous

innovation, and exceptional

service delivery contributes

towards the development of

efficient, transparent, and

reliable contract management

and procurement processes for

the oil and gas industry in

Nigeria.

26InsuranceA

gainst the backdrop o f i n s u ff i c i en t capacity of the Nigerian insurance i n d u s t r y t o

participate 100 percent in the Nigerian National Petroleum Corporation's Consolidated Insurance Policy (NNPC-CIP), the corporation sought its insurance protection from top oil and gas underwriters from around the globe.

The wor ld ' s top energy insurance companies which are rated by Standard & Poor's and A.M Best accordingly, submitted theirs indications to either lead, nor be a co-insurer neither not to be part of it all and they did made their intentions known in writing with their companies' seals and signatures.

The coordination of the foreign insurance companies was done by JLT, a foreign reinsurance broker which the local market had retained its services for close to a decade now, a choice of the local m a r k e t ' s l e a d i n s u r a n c e companies on the NNPC-CIP.

Sweet crude investigations revealed that close to 70 top energy insurance companies responded to the to the NNPC-CIP. And of the 70 international insurance companies, 10 percent marked their intention to lead, 70 percent indicated their interest to participate without being the leader and 20 percent outrightly stuck out their participation.

NNPC, Sweet crude findings showed that the Nigeria's oil corporation prefers to deal with companies that are rated by Standard & Poor's or A.M. Best and would not negotiate for anything less then the lowest premium for its insurances no matter the pressure.

The multinational company also appoints domestic insurance companies to participate in its juicy oil and gas insurance business in accordance with Section 72 of the Insurance Act 2003 toppled with federal Government's local content policy which encourages participation of domestic underwriting companies in spite of NNPC's puny confidence in the Nigerian insurance industry.

NNPC said that the exposures of the Nigerian insurance industry to the nation's oil and gas sector hit $101.14 billion (N11 trillion). The implication, according to the oil major, is that should all the available risks be taken, the local insurance industry with its foreign counterparts at the London Market would indemnify the said amount.

Mr. Odunayo Bammeke, General Manager, in charge of Insurance of the Corporation had said that out of the available risk in the oil and gas sector, with a corresponding premium income of $224 million, Nigerian underwriters had been able to retain about 33 per cent; about

NNPC hunts for top global oil & gas insurance companies...Prefers S & P's, A. M. Best rating…Goes for lowest bidder

Patience Saghana

N33 billion of the total risks exposures.

However, the amount is at the exclusion of other risks in the Nigerian National Petroleum Corporation which currently stand at $32 billion. The Nigerian underwriters had been able to absorb 42.5 per cent as at 2007 and 52.5 per cent as the end of the 2008 financial year and 48 percent in 2009.

"There has been significant growth in opportunity and corresponding advances in indigenous capacity, arising from guidelines issued to the industry on the specific work scope to be performed in Nigeria and this cuts across all sectors of the industry.

It was always a breakthrough after series of negotiations for a consortium bidding for oil and energy insurance in line with government's local content policy

may have been reached for the insurance sub-sector.

In line with the federal government local content, NNPC throws i ts doors open to participation of local insurance companies. NICON Insurance Corporation, then a wholly own government organisation lead the accounts for years before IGI, Leadway Assurance and now Custodian & Allied Insurance tasted the account. Vanguard's Sweet Crude had exclusively reported. Custodian and Allied Insurance Company NNPC_CIP for 2010/2011

N a t i o n a l I n s u r a n c e Commission (NAICOM) ensures that local insurance companies participated substantially in oil and gas business as specified in the Insurance Act 2003. The commission also makes sure that insurance companies not only partake in the plum business but demonstrate capacity to write the

business by ensuring that insurers have the minimum capital for the business.

Apart from that, NAICOM rolled out guidelines in respect of consortium bidding in the insurance of oil and energy risks in Nigeria.

To participate for instance consortium, leaders must have minimum net asset of not less than N7 billion. Also, member of any consortium must have a minimum net asset of N6 billion. According to the guidelines, each consortium must submit to NAICOM, profile of the international brokers and reinsurers to be used.

All that had engender growing confidence of NNPC and other multinationals on the domestic insurance companies which had helped tremendously in reducing the huge capital flight in the insurance sector as well as boost the premium generation in the industry.

Mr. Odunayo Bammeke, General Manager, in charge of Insurance of the

Corporation had said that out of the available risk in the oil and gas sector,

with a corresponding

premium income of $224 million,

Nigerian underwriters had

been able to retain about 33 per cent

NNPC headquarter, Abuja

27Insurance

Nigerian insurance industry seems to have escape huge c l a i m s a s 2 0 i n s u r a n c e

companies led by three insurers r a k e d $ 3 . 5 5 6 m i l l i o n (N533.85million) from insurance coverage of Transocean Ltd fleet.

Vanguard can authoritatively revealed that the nation's insurance companies are not in the rig of the Gulf of Mexico that spilled on April 20, 2010.

The fleet of Transocean which the 20 underwriters insured are: GSF Jack Ryan, Deepwater Pathfinder, Sedco Energy, Sedco 700, Sedco 702, Sedco 709, MG Hulme JR, GSF Baltic, GSF Adriatic VIII and GSF High Island IX.. The local market insured the Excess Fleet Package of Transocean rigs and covered Hull and Machinery of the company for 2009/ 2010

Hull and machinery insurance is a type of ocean marine insurance, which protects the insured vessel or fleet against physical damage caused by a peril of the sea or other covered perils while the vessel is in transit over water.

Leading the 20 insurance companies on the fleet of Transocean a re Leadway A s s u r a n c e C o m p a n y , International Energy Insurance and Aiico Insurance.

Other co_insurance companies in the account are Crusdaer Insurance Plc, Law Union & Rock Insurance, Industrial & General Insurance, Sovereign Tr u s t I n s u r a n c e , L a s a c o

20 underwriters insure

Transocean fleet

for N533.85m

As Leadway, Aiico, IEI lead

Nigerian insurance industry escapes Gulf of Mexico oil spill claims

Patience SAGHANA

On Saturday, June 19, 2010, oil spread northeast from the leaking Deepwater Horizon well in the Gulf of Mexico

A s s u r a n c e , C o n s o l i d a t e d Hallmark Insurance, Cornerstone Insurance, Goldlink Insurance and Mutual Benefit Assurance.

Others include: Nem Insurance, Prestige Assurance, Royal Exchange Assurance of Nigeria, Custodian & Allied Insurance, E q u i t y A s s u r a n c e , Intercontinental Wapic, Linkage Assurance and Zenith Insurance.

T r a n s o c e a n e x e c u t i v e s previously said their insurers had declared the rig a total loss and reimbursed the company $481 million of the $560 million insured value. Transocean also carried $950 million in excess liability coverage, according to filings with the Securities and Exchange Commission

Lloyd's of London Chief Executive Officer Richard Ward, Lloyd's estimates its insurers will pay $300 million to $600 million in claims related to the Deepwater Horizon rig. Lloyd's underwriters insured the rig, owned by Transocean Ltd., and has caps on the coverage it provided for environmental damage caused by the spill. BP, which didn't buy insurance, will cover the majority of the costs, forecast to be at least $20 b i l l i on by the U .S . government.

Lloyd's, the three_century_old insurance market, is composed of more than 80 syndicates that underwrite risks on commercial property, marine risks and celebrity assets. The syndicates that insured Transocean have already contributed about half of a $570 million payment tied to the rig's destruction, Ward said.

Lloyd's, the three_century_old insurance market, is composed of more than 80 syndicates that

underwrite risks on commercial property, marine risks and celebrity assets. The syndicates that insured Transocean have a total of $570 million payment tied to the rig's destruction to pay.

BP P.L.C. had given notice that it will file a claim of about $708 million against the insurers of Transocean Ltd., the owner of the ill_fated Deepwater Horizon oil rig,

BP planned to claim £470 million ($707.9 million) from Transocean's insurers, but the insurers have filed suit asking a court to declare that they have no obligation to pay BP.

Almost half of the syndicates in the Lloyd's of London insurance market launched a legal action against the BP arguing that they are not obligated to settle BP on Transocean's Deepwater Horizon rig disaster.

The Deepwater Horizon oil rig owned by Transocean Ltd. and

operated by BP Exploration & Production Inc. exploded and then sank. Transocean said the rig had a total insured value of $560 million. The drilling contractor said it is insured for total loss coverage and for wreck removal

Lloyd's underwriters have sued BP in U.S. district court, asking the judge to declare that they have n o o b l i g a t i o n t o c o v e r pollution_related liability claims resulting from the spill because contracts between BP and Transocean stipulated that the rig owner wouldn't be responsible for contamination that originates below the surface. BP made an attempt to provide the insurers with a notice of claims in Hannover Re said the sinking of an oil drilling rig in the Gulf of Mexico will result in a loss for the reinsurer of about 40 million euros (US$53 million), an equivalent of N7.95billion.

Three lead insurance companies on NNPC-CIP retain JLT

Lloyd's of London Chief

Executive Officer Richard Ward,

Lloyd's estimates its insurers will

pay $300 million to $600 million in claims related to the Deepwater

Horizon rig

30Labour

THERE are strong indications that c o n - m e n w h o s p e c i a l i s e i n c a j o l i n g

unsuspecting customers to pay huge sums of money into the con-men’s accounts on the pretext of supplying them non-available kerosene now pervade Ibafon Kerosene depots.

At least no fewer than 100 members of Surface Tank Kerosene Dealers, SUTAKED, branch of the National Union of Petroleum and Natural Gas Workers, NUPENG, have fallen victims and have lost hundreds of Millions of naira to these con-men.

Sweet Crude investigation revealed that since the beginning of the credit squeeze occasioned by the Central Bank of Nigeria, CBN’s reforms in the banking sector, some unscrupulous Kerosene importers and depot owners, who are unable to get credit from the banks, now take advantage of the scarcity of Kerosene to feed fat on desperate dealers.

Sweet Crude investigation discovered that most of these unscrupulous importers and depot owners engage the services of middlemen or scouters who go about searching for customers to deceive.

According to Sweet Crude’s finding, once an unsuspecting customer is “hypnotized” or cajoled, such a customer would be asked to pay money into account of principal( importer or depot owner) promising that within a few days, the product would be delivered.

Contrary to such promises, investigation revealed that the moment the customer pays the agreed amount, the importer or depot owner would start giving one excuse or the other to explain why the product can no longer be delivered as agreed.

Sweet Crude findings revealed that some of the victims have their money trapped since the past six months or even more.

Many of the victims who spoke to Sweet Crude on condition of anonymity claimed that not only their money had been trapped for over six months, but those who cajoled them to pay for the non-available product had either disappeared or had been avoiding them.

According to one of them, “ I borrowed N10 million and invested it in the Kerosene business. I have paid for the product since January. As we speak, I have not seen any product. It is one story after another. Before I paid, I was assured that within a week, I will get my product. But here we are in June, I am yet to received a drop of Kerosene. Those I borrowed money from have running after me and my family have been

Con-men take over Kerosene supplies at Ibafon

Victor AHIUMA-YOUNG

...Labour invites EFCC

going through hectic times because of this.”

Confirming the plight of members, National Chairman of SUTAKED, Comrade Benjamin Rotimi, called on government to use the Economic and Financial Crimes Commission, EFCC and Independent Corrupt Practices

and Other Related Offences Commission, ICPC to retrieve members’ funds from these con-men or unscrupulous kerosene importers and depot owners.

According to him: “ Our problem is that since the credit squeeze in financial sector which followed the reform by CBN

commenced, it has given raise to fraudulent practices where some depot owners collect money from our unsuspecting members without supplying them product. This is the greatest problem my members are facing today. We want to use this medium to call on government through the EFCC

and ICPC to help us out. The fraudulent depot owners and impor te rs go everywhere deceiving people to pay money into their system. They know they do not have product, yet they deceive dealers to pay money into their systems. When they get the money paid into their systems, product would not be delivered. The money is tied down. Many of our members who in one way or the other were able to borrowed money at high interest rate are being frustrated. The money is tied down and the interest is accumulating. As we speak, those that have fallen victims to these criminals cannot be less 100 within Lagos. Though some of the dealers from outside Lagos who come to Lagos to buy Kerosene have equally fallen victims, but I do not have their statistics now. What we talking

Kerosene filling into jerry can

Most of these unscrupulous importers and depot owners

engage the services of

middlemen or scouters who go about searching for customers to

deceive

Comrade Rotimi Benjamin and other officials of SUTAKED

here is not a small money. It involves hundreds of million of naira.”

He added that there are few depot owners who operate decently and do not involve in the fraudulent practices, saying “Obat, Jones, AZ , Techno are among the few that operate decently.

31LabourPENGASSAN brands Free trade zones haven for criminal activitiesVictor AHIUMA-YOUNG

P

ETROLEUM and Natural Gas Senior Staff Association of N i g e r i a , PENGASSAN, has

said free trade zones in the country, have become safe haven for ant i - labour pract ices , corporate tax evaders and economic saboteurs, among others, lamenting operators have deviated from the set objectives.

Umbrella body for senior workers in the nation’s Petroleum Industry, argued that unlike the free trade zones in countries such a s M a l a y s i a , S i n g a p o r e , Moldova, UAE and the United States of America (USA), Free Trade Zones in Nigeria have failed to deliver on their mandate of accelerating trade and commerce.

In an in inputs into the amendment of the new free trade zones’ bill, undertaken by House of Representatives, the oil workers commended members of the House of Representatives for the proposed amendment to the Nigerian Export Processing Zones Authority Act 1992, which w a s t h e b a s i s f o r t h e establishment of the Free Trade Zones in the country.

Presenting the position of PENGASSAN, its President, Comrade Babatunde Ogun, said the association was aware that many countries had commenced the amendment of the laws on free trade zones to reposition and check illegal activities of operators in the zones.

According to PENGASSAN: “Unlike the Free Trade Zones in countries such as Malaysia, Singapore, Moldova, UAE and

the United States of America (USA), Free Trade Zones in Nigeria have failed to deliver on their mandate of accelerating trade and commerce. We observed that Free Trade Zones in Nigeria have deviated from the objectives of attracting domestic and foreign i n v e s t m e n t s ; c r e a t i n g opportunities for technology t r a n s f e r a n d e m p l o y m e n t generation to becoming safe haven for anti-labour practices, corporate tax evaders and economic saboteurs, among others. Aside from the obnoxious trade being carried out by unpatriotic Nigerians and their foreign collaborators at the zones, managements of companies operating in these zones have denied their workers the right of belonging to Trade Unions of their choice. This action is contrary to the 1999 Const i tut ion, in particular, Section 40, on the right to “belong to any trade union or and other association for the protection of interests and core

I n t e r n a t i o n a l L a b o u r O r g a n i z a t i o n ’ s ( I L O ) Conventions on Freedom of Association.”

“We also want to call the attention of the honourable members of the House of Representatives to the fact that many companies are now relocating to the Free Trade Zones in order to enable them evade tax, deny their workers the right to belong to Unions and involve themselves in various illegal activities that can stunt Nigeria’s trade and commerce. We are also aware that the moratorium given to companies operating in the zones by the current law was 10 years, which means that it has expired since 2002 (1992-2002). Since the aim of the amendment is to bring the laws guiding the Free Trade Zones to be in conformity with the 1999 Constitution, we therefore demand that workers in the zones be given the right to unionization in the proposed new Bill currently before the House.”

Babatunde Ogun, President PENGASSAN

MBRELLA body for senior oil workers, the P e t r o l e u m a n d U

Natural Gas Senior Staff A s s o c i a t i o n o f N i g e r i a , PENGASSAN, has appealed President Goodluck Jonathan and members of the National Assembly, to ensure that the concerns of all stakeholders are adequately addressed before the Petroleum Industry Bill, PIB is passed into law.

Por t Harcour t zone o f

Oil workers appeal to Jonathan, lawmakers over PIBPENGASSAN in a communiqué at the end of a 3-day Workshop with the theme “Nigeria Oil and Gas Industry Reforms: Key Challenges and Prospects from all stakeholders’ perspectives” in Calabar, Cross River State, also called on the two labour centres in the country, Nigeria Labour Congress, NLC and its Trade Union Congress of Nigeria, TUC’s counterpart, to pursue and influence the expeditious review of all outdated labour laws and other l a b o u r r e l a t e d p o l i c i e s o f Government.

The communiqué read in part: “The workshop reviewed the ongoing reform in the Oil and Gas Industry especially the Petroleum Industry Bill (PIB) and observed as follows: The workshop welcomes the ongoing review of the PIB especially against the backdrop that the existing legislation in the Oil and Gas Industry are outdated and scattered here and there. The workshop appeals again to the President and Commander-in-Chief of the Armed Forces of the Federal Republic of Nigeria and the National

Assembly to ensure that the concerns of all stakeholders are adequately addressed before the PIB is passed into law. The w o r k s h o p r e c a l l s t h a t PENGASSAN had forwarded labour concerns of employees in the Oil and Gas Industry to the National Assembly and the Honourable Minister of Petroleum Resources and therefore further appeals that those concerns be adequately addressed in the Petroleum Industry Bill (PIB) in the interest of industrial peace and harmony.”

Aside from the obnoxious trade being carried out

by unpatriotic Nigerians and their foreign

collaborators at the zones,

managements of companies

operating in these zones have denied their workers the right of belonging to Trade Unions of their choice

TRADE unions across the globe, “Global Unions”, have begun a move to checkmate increasing abuse of workers’ rights in the Chemical, Energy, Mine and other sectors, with the release of a set of principles to protect the rights of workers by focusing on the impact of temporary employment agencies on employment.

Essentially, the principles address both the exploitation and abuse o f workers provided by temporary work agencies as well as the d a m a g e t o r e g u l a r employment relationships caused by the misuse of these agencies.

“Global Unions” is a term for Global Union Federations, GUFs, which represent national trade unions by sector and occupation, together with the International Trade Union Confederation , ITUC, which Nigeria Labour Congress, NLC and Trade Union Congress of Nigeria, TUC, are affiliates, and the Trade Union Advisory Committee, TUAC to the Organisation for Economic Co-operation and Development, OECD, which represent national trade union centres (multi-sectoral).

Though there are varying approaches taken by trade unions in different countries and sectors to deal with t emporary employment agencies, ranging from total bans to partial bans to strict regulation, Global Unions’ set of principles to fight against abuse of workers’ rights include; “that the primary form of employment should be permanent, open-ended and direct. Agency workers should be covered under the same collective bargaining agreement as other workers in the user enterprise and temporary agency workers s h o u l d r e c e i v e e q u a l treatment in all respects. The use of temporary agencies should not increase the gender g a p o n w a g e s , s o c i a l protections, and conditions. Temporary work agencies must not be used to eliminate p e r m a n e n t a n d d i r e c t employment relationships; and the use of agency workers should never be used to weaken trade unions or to undermine organising or collective bargaining rights.

Global unions move against abuse of workers’ rights

Victor AHIUMA-YOUNG

32Power

IN an effort to bolster the c o m m i t m e n t o f a l l e l e c t r i c i t y w o r k e r s

nationwide, President Goodluck Jonathan has approved an enhanced welfare package for electricity workers in the country.The President granted his

approval to the workers in an effort also aimed at achieving his administration's ambition in the power sector. Minister of State for Power, Arc.

Nuhu Somo Wya who dropped this hint at recently while addressing the workers during his tour of Shiroro Hydro Electric Power Station in Shiroro, Niger State, said the package is to encourage and motivate the

Federal Government's e ffor t s to boos t power generation a n d e n h a n c e electricity supply to

Nigerians will soon get a lift, as it is set to sign another Gas Supply Purchase Agreement, GPSA, with Addax Petroleum Development Corporation, Vanguard has gathered.Ministry of Petroleum sources

revealed that the GSPA would soon be signed with Addax for the supply of 100million standard cubic feet of gas per day for the firing of one the power plants under the National Integrated Power Plant, NIPP.The gas is meant to fast track the

completion and powering of the LOT3 Project Adanga-Calabar Gas Transmission Pipeline and now to be made available by 2011 contrary to the earlier scheduled June 2012. The GPSA will be the second of

such agreements to be signed by g o v e r n m e n t w i t h p o w e r producers, the first being with Pan Ocean Oil and Gas Ltd, which was signed in May. EPC contractorConfirming the Addax deal, the

Eng inee r ing P rocu remen t Con t r ac to r, EPC, Kaz t ec Engineering Ltd, an indigenous oil service firm said the move will fast track the completion of the 24-inch 107km Gas Transmission Pipeline and Metering Station valued at over $158m being built for the Adanga Power Plant a w a r d e d t o M a r u b e n i Engineering (W.A) Ltd. Speaking on the GPSA, the

Executive Director, Kaztec, Mr Adebanji Babarinde, commended President Goodluck Jonathan and the Minister of Petroleum Resources, Mrs Diezani Alison-Madueke, for the success recorded with the initiative, saying that “it has successfully sorted out the issue of gas pricing and gas supply to enhance generation and distribution of electricity in the country.” Conducting journalists on a tour

of the metering station now over 83 percent completed in Calabar, Cross River State, Kaztec's Project Manager, Mr Joseph Egona, said, “To this end, we shall commence Offshore Pipeline Construction works by end of September 2010 in order to make the best use of the dry season window from October 2010 to February 2011 as earlier planned by us in our schedule.” He further disclosed, “KAZTEC

has also been awarded a contract by Addax for the TB-1921 Installation works which include

Power generation gets a boost Hector IGBIKIOWUBO & Clara NWACHUKWU

the Adanga Gas Platform where the offshore pipeline would hook up.” Egona also said that, KAZTEC

h a s a c q u i r e d a P i p e Lay/Construction Barge for the offshore installation to boost technical capacity; in line with its bid to become the company of choice in EPC services in the country. “The Pipe Lay Barge would be

utilized for the construction of the

offshore pipeline segment. Efforts would now be geared towards fast t racking the installation of the sensitive works related to the delivery of the gas for the LOT3 project,” he said.Furthermore, he said the project

also involves the construction of a 45km offshore pipeline Execution challengesEarlier, Mr Babarinde had listed

the challenges facing the timely completion of the power plant to

i n c l u d e “ p a y m e n t o f c o m p e n s a t i o n t o h o s t communi t i es and ge t t ing payments for the work done; getting the Central Bank of Nigeria and the Ministry of Finance to issue Letters of Credit for the execution of the projects as at when due, as well as the adverse inflation often resulting to variations and avoidable and unnecessary delays over approval for these variations.”

Power Plant

FG approves enhanced welfare package for electricity workers

Yemie ADEOYE

workers so as to double their efforts in the current drive to resolve once and for all, the perennial power crisis plaguing the nation. Wya however, pointed out that

verification and audit exercise which will soon commence would be carried out before effecting the payment stressing that government will through the process ensure that all workers receive their full entitlements. The minister told the workers

that he visited the power station on the instruction of Mr. President to assess the challenges on ground and to assure them of Federal Government appreciation over the good work they have been

doing. He expressed delight that the

Shiroro Hydro Power complex has been generating at 75 percent installed capacity since inception and described the achievement as no mean fit. “The nation is proud of you," he

told the workers and observed that their achievement would not have been made possible without the managerial skill of the Chief Executive Officer of the station, Engr. Dauda Abdul Aziz. Wya who visited every crane of

t h e c o m p l e x e x p r e s s e d satisfaction at the devotion of all the staff that spent 24 hours at their duty post to ensure that the country has electricity. As a result of the unique value of

electricity to national economy and security, Wya stated that the Nigerian government has made it number one on its agenda, and therefore, would not leave anything to chance to ensure that the sector runs smoothly.

L O N D O N - N i g e r i a desperately needs private investment to help it plug a gap of developing at least 30,000 MW to achieve its vision of b e c o m i n g a l e a d i n g international economy by 2020, a senior government advisor has urged.

Prof Bart Nnaji, chairman of the power committee for the Presidential Advisory Council, told potential investors in London that an adequate electricity network was pivotal to driving Nigeria's economy forward. “Nigeria's situation is terrible when compared with other countries such as South Africa and the US. We are generating 3,500 MW for a population of 150 million.”

The government needs to see a growth of 6%/year in the distribution network to be fully served by 2020 and achieve generation of 40,000 MW. This i s cha l l eng ing t o mee t considering there is an increase of less than 1%/year in the size of Nigeria's network. During the early 90's under the military regime there was no investment and only 40% of the nation has access to power supplies. “Our 2020 vision says that we should have 14,000 MW of capacity but we say it should be double that amount in line with other countries,” Nnaji said. “By 2013 we should have installed capacity of 5300 MW and an additional 4,700 MW from integrated power projects to bring us nearer to our 10,000 MW. However, there is still a gap of 30,000 MW.”

Dr Ini Urua, head of heavy industries at the Africa Finance Corporation, warned that it would be difficult to secure private cooperation if there was no clear policy for distribution networks. “If there is no strong structure in the transmission n e t w o r k t h e r e w i l l b e availability issues.”

Potential sources for power generation are natural gas, coal, and hydro, but Urua stressed that the government appeared to be banking on gas. Nigeria has launched an aggressive gas development program for its domestic market where demand is expected to rise to over 15 bcfd, but the key problem for operators is an attractive tariff to encourage investment. Developing gas infrastructure is estimated to cost $20-25 billion. The tariff was 10 cents/MMBtu but gas can't be produced at this rate.

Nigeria's power committee chairman looks for private investment

Uchenna IZUNDU

CONTINUES ON PAGE 5

34Power

Th e N i g e r i a n

Government has entered discussions with the World Bank a n d o t h e r

international financing agencies over modalities for immediate intervention to fast track the construction of additional turbines to the Kainji hydro power project to augment productive capacity.

The Minister of State for Power, Arc. Nuhu Wya, who revealed this in Kainji, Niger state while on inspection of the facilities at the Hydro Electric power station at the weekend, noted that after 25 years of uninterrupted performance, the project was due not only for overhaul but needed additional turbines to promote additional output.

Wy a t o l d t h e s t a f f a n d management of the station that the President had sent him to access the challenges on ground in line with his promise to Nigerians to give them steady power supply.

The Minister called for frugality in the management of the Nation's resources pointing up that if Nigeria had been transparently frugal in the management of its resources, the Nation's energy crisis would have not caught us unawares.

He enjoined workers to pull

World Bank to intervene on Kainji expansionOscarline ONWUEMENYI themselves together as partners in

the holistic battle against the underdevelopment in the major sectors of the economic life of the country and advised them to come up with their own suggestion on how to uplift the sector.

On the workers demand for pay r i s e , Wy a s a i d w h i l e t h e government appreciates their c o n t r i b u t i o n s t o N a t i o n a l development, he asked them to weigh their request against their output and confront the government with statistics wherever it has gone wrong.

He said, “Get involved in the overhaul of the system if there are people who are cogs in the wheel of progress in the sector, come up with facts because we are determined to exorcise the demons plaguing the system and the time is now.”

He added, “Nobody knows this system more than you, so be involved, recommend quality and knowledgeable minds that can move this sector forward.”

The Minister noted that with plans to fully privatize the power sector, “the consultants who are going to operate the sector can only succeed if they make use of your experience and knowledge, why can't you do something right for this nation.”

Wya added that after a long period, and huge investment of the tax payers' fund, PHCN has never made any profit. “What is wrong with us

that we cannot handle government enterprises as ours and justify the huge confidence the nation has placed in our electric engineers?” the Minister queried.

He enjoined the management to balance the lopsidedness in the sector. “We must get fresh blood, sound fresh

engineers with fresh ideas and get rid of the tired minds.

“I will be back soon to this station

and I want to see improvement and

not negligence and carelessness that

cost us fortunes to redress”. Wya

stated.

Kainji dam

ndigenous energy firm, Shoreline Power has opened ta lks with the Niger ia I

Breweries Plc with a view to building a power and carbon dioxide (Co2) plant for the brewery giant.Shoreline's Chief Operating

Officer, Mr Marc Hasenclever, who confirmed this recently said the carbon dioxide being emitted from the power plant will be recycled.According to him, “The plant can

generate up to 36 tons of carbon per day and with the market price of Co2 at N200/ kilogram, this is a big business. The Co2 is used in bottling processes and that coming from gas is very clean and has no health or environment hazards.”The ongoing talks is sequel to

Shoreline's successful completion

Shoreline, Nigeria Breweries parley on power

Clara NWACHUKWUof the 16.5 mega watts (MW) captive power plant for Lafarge Cement (WAPCO) Plc, which he said is a fall out from the liberalisation of power generation in the country.

Speaking further, Mr Hasenclever argued that total liberalisation of Nigeria's power sector is key to ending the nation's seemingly intractable power challenges, as this will attract more private sector participation and investments to the sector.

He argued that the mini off-the-shelf modular independent power plant, IPP, is a demonstration of how private investment can bring about a rapid solution to electricity supply issues.

He said, “With the realisation of the WAPCO project, the procurement of the first rental fleet was concluded. The rental plant and equipment are mobile and transferable from one ite to the other during the life time of the equipment.”

BUJA - President Goodluck Jonathan h a s d i r e c t e d t h e A

Ministry of Power to commence full implementation of the Power sector Reform Act in order to create room for private sector participation and efficient service delivery to Nigerians.

Minister of state for Power, Arc.Nuhu somo Wya, who dropped this hint in Abuja at the weekend while receiving a group of foreign investors from the United Arab Emirate(UAE) who made presentation on their planned participation in the sector said President Jonathan has given mandate to commence the reform process and break all barriers that would prevent private sector players coming to invest in the sector.

“I have clear mandate of Mr.President to break all bottlenecks to private investor's participation in the power sector .We are ready to encourage you and we will create the enabling environment for you to actively invest in the sector. Our doors are open to al l genuine investors” he said.

To this effect the Minister said, "Based on Mr.P re s iden t directives, we are commencing full reform of the sector in order to encourage the inflow of the much needed investment for the sector."

Specifically, the mandate is to the effect that the Electric Power Sector Reform (EPSR) Act of 2005 be fully implemented. The partial implementation of this Act before had led to the establishment of Nigerian E l e c t r i c i t y R e g u l a t o r y Commission (NERC) and unbundling of Power Holding Company of Nigeria (PHCN) into 18 successor companies as f o l l o w s , G e n e r a t i o n - 6 , T r a n s m i s s i o n - 1 a n d Distribution-11 respectively

According to the Minister, it has become obvious that government alone cannot provide the required investment that would drive the sector for the benefit of all Nigerians, stressing that government is open to anybody who has the resources and ready to invest in the sector to come on board.

Wya explained that though most of the power stations in the country are thermal or gas fired based, Nigeria still needs more thermal or gas powered plants adding that investors could easily diversify into other alternative power generation opportunities that exist in the country.

President Jonathan orders full implementation of Power sector reform

Oscarline ONWUEMENYI

36Financing

Oil rig

THE Nigerian Content Monitoring Board (NCMB) and the National Investment M a n a g e m e n t

Services (NAPIMS) company, a subsidiary of the NNPC, both agencies of the federal government have bared their fangs over perceived sabotage perpetrated by Hyundai Heavy Industries (HHI), a South Korean firm handling Chevron Nigeria Limited's (CNL) implementation of the Domestic Gas Supply Obligation (DSO) as well as the company's Gas Supply Expansion Project modularization (GSEP).

FG bares its fangs over Korean firm's sabotage

…Gives Chevron matching orders

Hector IGBIKIOWUBOSweetcrude also gathered that

the NAPIMS has given Chevron 30 days to check the perceived delays orchestrated by HHI and ensure that the letters of the law regarding Nigerian Content are implemented to the letter.

Checks revealed that the NCMB had written a letter to Chevron demanding explanations regarding the delay in implementation of the DSO and the GSEP, while registering its disappointment at the turn of events.

When contacted, Mr. Ernest Nwapa, the Acting Executive Secretary of the NCMB admitted he was aware of the situation and that the Board had written to Chevron registering its displeasure at the turn of events.

However, he declined to divulge

contents of the letter, noting that it was not for media consumption.

Sweetcrude gathered that N A P I M S h a d i n i t s communications to Chevron demanded that HHI comes up with a revised proposal within 30 days

rdfrom the 3 week of last month, adding that at the expiration of the 30 days, failure to come up with a revised proposal would result in a re-tender of the DSO and the GSEP.

NAPIMS also indicated that it may resort to black-listing HHI for sabotaging implantation of the Nigerian Content Act.

It was also gathered that Chevron has formally applied for waiver of the penalty on default, noting that the delay in the execution of the contract is no fault of theirs.

However, industry operator have

blamed NAPIMS for its inability to superintend the process indicat ing that the NNPC subsidiary should have instructed HHI to do a roll-over based on a project it had executed in the pat rather than leave the company to carry on the orchestration of intrigues that only serves to undermine the objectives of the Nigerian Content Act.

Sweetcrude gathered that the South Korean firm may have del iberately sabotaged the Nigerian Content Act in a bid to ensure most if not all the scope of work to be done is carried out in Korea.

Korean intrigues:Following the delay, with each

passing day Chevron Nigeria Limited risks payment of upwards of $400 million to the Federal Government owing to its inability to execute its domestic gas supply obligation.

An official of the National P e t r o l e u m I n v e s t m e n t Management Services (NAPIMS) Company noted that this is not the first time HHI would be deploying the tactics of indefinite delay for good effect.

“They push the delay of the project until it compromises the schedule and project delivery for Nigeria. In the last 9 months, nothing has happened regarding this project. The next thing you would witness is that Chevron would start asking for waivers to avoid being held liable for the penalty and Nigerian Content would suffer because scope of work to be done in-country would be drastically reduced,” a management staff of NAPIMS who did not want his name in print disclosed.

It was gathered that the original scope of work to be executed under the domestic gas supply obligation as at 2006 would have involved 6900 metric tons of fabrication.

However, owing to concerns about in-country capacity, the scope of work was reduced to 4000 metric tons.

“But it would appear everybody has forgotten about this because right now chances are that only 400

metric tons or thereabout may be done in-country as a result of the intrigues and delays orchestrated by HHI,” the NAPIMS staff disclosed.

The NAPIMS staff lamented HHI's approach to doing business in Nigeria, noting that the proposition of the Korean firm would see less than 5 per cent of the entire fabrication work carried out in Nigeria.

“The way HHI has handled this matter, chances are that thousands of jobs would be created in Korea to the detriment of the Nigerian Content Act, while many Nigerian fabrication yards will become redundant and workers forced to leave. Although on paper, HHI had proposed 10 per cent local content for engineering under (EPCI), 15 per cent for production, 25 per cent for procurement and 40 per cent for Installation, what they really want to do is push the delay until a sense of urgency sets in, then they can demand that for the purpose of timeliness, most, if not all of the fabrication work be done in Korea,” the NAPIMS staff revealed.”

It would be recalled that last year, the Federal Government introduced the Gas Master Plan for natural gas utilization and this placed emphasis on the domestic gas market as opposed to exports.

To ensure the success of the initiative, government gave the multinational oil companies a directive to make available to the domestic market, 50 per cent of their total gas production towards realization of the 6000 Megawatts e l e c t r i c i t y t a r g e t o f t h e government, among others.

Chevron took advantage of this provision for single-source award of the GSEP, Domestic Supply Obligation (DSO) and the Escravos Export System Project (EESP) and contracted HHI. Investigations revealed that within Chevron's contracting system, the only other company which could deliver within this category was Ascot Engineering, but even they didn't have the pedigree for the scope of work required.

HHI had in its bid identified and partnered Nigerdock Nigeria, an indigenous fabrication yard as part of efforts to fulfill the statutory Nigerian Content requirements and this provided Chevron the basis of award of the projects.

It was gathered that having used Nigerdock to meet the Nigerian Content requirements, HHI has in the last 9 months failed to advance a memorandum of understanding and has refused to execute the necessary work scope in-country.

The DSO and GSEP valued at $2

billion includes engineering,

p r o c u r e m e n t , f a b r i c a t i o n

/construction and installation

works and these include major

works to be executed by

Nigerdock in-country, while HHI

have certain scope expected to be

done in-country and the rest in

Korea.

In the last 9 months, nothing has happened regarding

this project. The next thing you

would witness is that Chevron would

start asking for waivers to avoid

being held liable for the penalty

38Financing

NASS, stakeholders move to rescue Nigeria from debt trap

Yemie ADEOYE & Tordue SALEM

TH E N a t i o n a l A s s e m b l y h a s concluded plans to s t r e a m l i n e guidelines on how

States, Local Governments and the Federal Government can obtain foreign and local loans.

This was gathered after the two days workshop seminar organised by the House of Representative to address the issue and other burning national issues in the country.

The House of Representatives after a resolution on Tuesday, December 15, 2009 set up an ad hoc Committee on the issue. A report detailing the abuses in loan access procedure by the different tiers of Government was laid on the floor on March 4, 2010.

After a thorough deliberation on the way out of frivolous borrowings by all tiers of government, the Committee released a six-point communiqué that seeks a new deal between the borrower and the lender.

The occasion was opened by the Speaker, Dimeji Bankole, while first session was chaired by the Deputy Speaker, Usman B. Nafada. The lead paper was delivered by Finance Minister, Oluwasegun Aganga, with Deputy Chairman, Finance Committee, Leo Dilkon and the Direc tor-Genera l , Niger ia Economic Summit Group.

ndThe 2 session was chaired by Rep. Ihedioha, with the lead paper from CBN Governor, Sanusi Lamido Sanusi , titled: Debt Management in Nigeria : The Role of the Central Bank of Nigeria . The Debt Management in Nigeria: Role of the Capital Market was delivered by Nigeria Stock Exchange, DG, Ms. Arunma Oteh, and “Perspectives on the Nigerian Stock Exchange”, delivered by the DG NSE, Prof. Ndidi Okereke-Onyuike, Rep. Aliyu Wadada, Chairman, House Committee on Information as discussant.

Other participants at the w o r k s h o p , w e r e L a g o s Commissioner of Finance, Chief Rotimi Oyekan, Dg National Planning Commission, Prof. Sylvester Muonye, Rep. C.I.D Maduabum, Dr. Abraham N w a n k w o o f t h e D e b t Management Office, DG Budget Office, Dr. Bright Okogwu, and the Country Director, World Bank, Mr. Onno Ruhl, who suggested that the “Essence of s o u n d d e b t M a n a g e m e n t practices, is that it helps Countries reduce their borrowing cost. Contain financial risk, develop their domestic market”.

The underlying concern of the Committee, the CBN and other s t akeho lde r s i s t o avo id borrowings that are not geared t o w a r d s i n f r a s t r u c t u r e

development in Nigeria.

“In view of the foregoing, the workshop recommends as follows: That in order to ensure that we do not create a situation that puts future generations of Nige r i ans in to pe rpe tua l servitude, all borrowings by all tiers of governments and their agencies must adhere strictly to e x i s t i n g g u i d e l i n e s a n d conditions in keeping with the D M O A c t , t h e F i s c a l Responsibility Act, and the Investments and Securities Act and the inves tments and Securities Act and other Extant laws and regulations.

“That the National Assembly should take steps to amend the relevant sections of Fiscal Responsibility Act, 2007, the DMO Act, 2003, the Investments and Securities Act, 2007, and o t h e r e x t a n t l a w s a n d regulations”, the communiqué reads in part.

The stakeholders also proposed that, “The National Assembly should take steps to amend the relevant sections of Fiscal Responsibility Act, 2007, the DMO Act, 2003, the investments and Securities Act, 2007, identified by workshop, in order to streamline, harmonize and strengthen the procedure and processes of obtaining local as well as foreign loans.

The workshop “enjoined states of the Federation which are yet to set up their Debt Management Departments and to enact laws s e t t i n g u p t h e i r F i s c a l Responsibilities Agencies to do so without further delay”.

T h e C o m m i t t e e i n i t s communiqué also recommended for approval to “Prescribe more stringent sanctions for failure to adhere to the provisions of the

Acts , namely, the Fisca l Responsibility Act, 2007, DMO Act 2003, Investment and Securities Act, 2007 and other extant laws”.

T h e C o m m i t t e e a l s o recommended that “the Federal and State Governments and their agencies should involve the appropriate legislative arms of Government in developing Borrowing Plans and Concept notes for obtaining new loans before submission to the Federal Min i s t r y o f F inance fo r approval”.

The underl

y i n g concern

o f t h e Committe

e, the CBN and o the r

stakeholders is to avoid borrowings that are not geared t o w a r d s i n f r a s t r u c t u r e development.

The minister of Finance, Dr. Oluwasegun Aganga warned the Federal, State and Local tiers of government on frivolous external and local borrowings.

Dr. Aganga, a former Chief Executive Officer at Goldman Sachs, in his contribution at the workshop, stated that “”The current Government policy on Public Debt is guided by the f o l l o w i n g : o v e r a l l d e b t sustainability; effective controls; reliance on mainly concessional sources for external funding; maximum value for money, and p r e f e r e n c e f o r c r i t i c a l infrastructure in the application of borrowed funds.

He said this “Government is committed to ensuring Debt sustainability and avoiding a relapse into the pre-Paris Club debt exit situation. It could be recalled that after Nigeria ’s exit from the Paris Club debt in 2005/2006, the external debt stock dropped dramatically and substantially.

The minister disclosed that, “By end-December 2004, the external debt stock was about USD35.94billion. The Debt stack figure by end-December, 2007 was USD3.65billion; by end-December, 2008 , i t was USD3.72, and by March, 2009 it was USD3.62billion”.

He stated that “Nigeria’s

Debt/GDP ratio is less than 14% and is, therefore, comfortably below the 40% internationally accepted threshold for Countries in our debt sustainability group”

According to Aganga, “The greatest area of focus for us, being a developing Country, is for us to get value for the money borrowed. You cannot just borrow and spend on anything you like, without properly investing to reap profit on your investments. All Government m u s t c o m p l y w i t h D e b t Management Office Act and the Fiscal Responsibility Act”.

According to him, “Section 41c of the Fiscal Responsibility Act, says the foreign loan component of the Gross Domestic Product (GDP) must be determined from time to time by the National Assembly on the advice of the Ministry of Finance, while the DMO Act says every loan must be approved by the National Assembly”.

The CBN Governor, Sanusi Lamido Sanusi said Nigeria’s foreign debt now stands at about $4billion, demanded an outright removal of subsidy for all imports of petroleum products, as he attacked Petroleum products marketers whom, he said were holding the economy down by o u t s o u r c i n g j o b s a n d empowering citizens in other Countries who midwife the refining process of crude oil.

“If you look at what is happening in Europe and the United States today, you will see that deficits don’t come from the so-called stimulus. The increase in deficits (in Nigeria ) did not come from stimulus. Normally, if there is a gap financing, it translates to debt. You have got to give people their salaries, invest in basic needs of the people, invest in roads, infrastructure.

“What we need to focus on is how to increase the level of r e v e n u e g e n e r a t i o n o f government. What we are borrowing on now should not be o n p e t r o l e u m s u b s i d i e s . Petroleum subsidies must be removed. I will continue to talk about them, until they are removed.

“In the last few months, we have spent N520billion on petroleum subsidies alone, last year we spent over N1trillion. Many of these oil marketers obtain tones of crude oil and go off to offload in Ivory Coast , and the citizens of that Country are employed and paid in the process, and the subsidies being paid for those products, do not come to Nigeria .

“It is only in Nigeria that you have that kind of thing. In Bahrain , they have not increased the price of petrol since 1982. So the issue is why are we borrowing and what are we doing with it.”

Essence of sound debt

Management practices, is that it helps Countries

reduce their borrowing

cost. Contain financial risk, develop their

domestic market

40Solid Mineral

Nigerian miners have formed a new association , known as the t h e M i n e r s

Association of Nigeria.The new executive of the body

which was inaugurated last Friday in Abuja, want the Fede ra l Gove rnmen t t o e n c o u r a g e m i n i n g b y establishing a Solid Mineral Development Bank.Members of the newly

inaugurated executive of the new body are: Alhaji Shehu Sani Mailale (Chairman), O y e d o k u n O y e d e l e (Secretary), Edward Danladi (Ist Vice Chairman), Fidelis Ogili (2nd Vice Chairman), Gerald Muoeboh (Assistant Secretary), Benjamin Ezekwe (Treasurer), Egorton Oritis Woli (PRO) and Muhammed Danyaro (Financial Secretary)B u t , t h e c a l l f o r t h e

establishment of the Bank came from former Secretary of Government of the Federation (SGF), Alhaji Aminu Saleh, now into mining, when observed that Nigeria imports about 90% of its industrial

…Wants Solid Mineral Development BankNigerian miners form new association

Luka BINNIYAT

Miners

minerals. Also, the newly elected

National Chairman of the association, Alhaji Sani Shehu Mailale, appealed to federal government to ensure that 50% of the annual budgetary allocation meant for the development natural resources.“We want the Government to

give mining a very special attention here”, he said. Mailale who also supported

the establsimehmt of the Bank, said the Bank would greatly help in establishing sustainable growth of the sector, and protecting against capital fligh from Nigeria“ one of the ways to achieve

progress in the sector is for government to allow continuity in regulatory policies”, he moted.He also commented on the

incident of lead poisoning in Zamfara state, describing the incident “sad and a matter of great national concern”“The appropriate authorities at

all levels should take preventive measures to avoid future occurrence”, he said.According to h im, the

association has resolved to organise series of seminars and training for the artisanal miners on basic mining safety in the six geo-political zones of the country.Speaking on behalf of the the

Permanent Secretary of the

Ministry of Mines and Steel Development, Engr, Shiek Goni, the Director in Charge of Artisinal and Small Scale Mining, Mr. Obiorah Azibuike, urged members of the mining association to join hands with federal government in the effort to transforming the solid mineral industry and to make

the sector a major contributor to national economy.“Government wants to see the

mining sector take its rightful place in the economy of the country by serving as alternative source of revenue”, he said"Miners have a very vital role

to play in the effort of government to diversify our economy", he said.The former SGF and the patron

of the mining body, Alhaji Aminu Saleh, regretted that not much progress has been recorded in the effort to develop the country's mining sector despite the huge resource potentials."With over 34 solid minerals at

different locations of the country such as gold, tantalite, lead, zinc and bitumen, the solid mineral industgry offers significant opportunities to exploit".

"In addition, 42 other different

mineral resources have been

discovered and are being

captured on the mineral

c o m m o d i t y m a p s .

Unfortunately this has not

attracted the attention of the few

rich Nigerians", he said.

Government wants to see the mining

sector take its rightful place

in the economy of the country by serving as alternative source of revenue

i b y a w a n t s assurances from BP after its handling of L

the Gulf of Mexico oil spill but will allow it to start deep-w a t e r d r i l l i n g i n t h e Mediterranean, the country's top oil official said Monday.

"At this point we're not suspending anything and we're going to drill pretty soon and some of the work will be in deep water," Shokri Ghanem, the head of Libya's National Oil, or NOC, told Zawya Dow Jones in a phone interview. "But they are taking p r e c a u t i o n s a n d w h a t happened in the Gulf of Mexico will be a learning process."

BP and its Libyan partner, the Libya Investment, or LIC, in May 2007 signed an exploration and production deal with NOC worth at least $900 million for the onshore Ghadames and offshore Sirt areas.

A spokeswoman in London for the British oil major didn't respond to questions from Zawya Dow Jones about its Libyan deep-water drilling plans.

The agreement in Libya involves the exploration of a r o u n d 5 4 , 0 0 0 s q u a r e kilometers--the equivalent to more than 10 of BP's operated deep-water blocks in Angola.

"Our technical people had a number of meetings with the BP people. BP are studying the reasons for what went wrong and we sat down together and they have assured us," Ghanem said.

Deep-water drilling is coming under greater scrutiny worldwide in light of BP's Gulf of Mexico oil spill, with several countries taking a closer look at environmental r e g u l a t i o n s . H o w e v e r, analysts say Libya and other members of the Organization of Petroleum Exporting Countries, or OPEC, won't let the catastrophe affect their own oil field development plans.

"It would be catastrophic if we saw this happen in Libya but controls are better in the North Sea than in the Gulf of Mexico and for now any news from the Gulf of Mexico is good for OPEC as demand for OPEC oil will be greater," said John Hall, Chairman at Energy Quote, an oil and gas consultant.

Libya pressures BP on deepwater drilling in Mediterranean

42Solid Mineral

oves by the Federal G o v e r n m e n t t o build up the nations M

proven oil reserve through exploration of new frontiers for oil and gas production received a fresh thrust yesterday with the news that the Nigerian National Petroleum Corporation, NNPC, is putting finishing touches to a comprehensive framework d e s i g n e d t o h e r a l d t h e intensification of exploration activities in the Chad Basin.

Also determined to ensure that the latest quest for a sustainable oil find in the Chad Basin is met with success, the Minister of Petroleum Resources Mrs. Diezani Alison- Madueke has directed the Corporation to leave no stone unturned in its push to strike `black gold' in the prospective Chad Basin.

A statement made available by Dr. Levi Ajuonuma, Group General Manager, Group Public Affairs of the NNPC quoted Mrs. Alison Madueke as saying that ``Though it is too early to be categorical, there is a possibility that we may find oil in commercial quantity in the Chad Basin because of the discoveries of commercial hydrocarbon d e p o s i t s i n n e i g h b o r i n g countries of Chad, Niger and Sudan which have similar structural settings with the Chad Basin. Therefore it is prudent to aggressively explore the Chad Basin for possible hydrocarbon deposits, '' the Minister stated.

D i s c o v e r i e s m a d e i n neighbouring countries in basins with similar structural settings are: Doba, Doseo and Bongor all in Chad amounts to over 2 Billion barrels (Bbbls); Logone Birni in Southern Chad and Northern Cameroun, over 100 Bbbls; and Termit-Agadem Basin in Niger totals over 1Bbbls.

Already the NNPC New Frontier Exploration Services Division which is leading the charge for crude oil find in the entire Inland Basins is acquiring 3,550 sq km of 3- D seismic data for processing and interpretation in addition to the already acquired 6000km of 2-D data t h a t i s c u r r e n t l y b e i n g reprocessed.

Dr. Ajuonuma stated that currently over 600,000 seismic section and 30,000 well logs are being scanned and vectorised in good time for the eventual drilling. Before now, 23 wells have been drilled with two of the wells, Wadi-1 and Kinasar encountering non- commercial gas.

NNPC intensifies exploration activities in Chad Basin...To acquire 33, 550 sq km of 3-D seismic data

Ni g e r i a h a s

established that at least 500,000 p e o p l e a r e e n g a g e d i n

informal forms of mining, even as the Federal Government has come out with an enticing package from the World Bank to formalise their activities.

This was made known last week by the Project Coordinator of the Sustainable Management of Mineral Resources Project (SMMRSP), Mr. Linus Adie, and the Director, Artisanal and Small Scale Miners (ASM), of the Ministry of Mines and Steel Development, Mr. Obiora Azubuike in Gusau last week

The Permanent Sectary of the Ministry of Mines and Steel Development, Engr. Sheik Musa Goni, also announced at the venue, that the much awaited Nigerian Mining Regulation would be out around September after it had suffered several hitches since 2008.

According Azubuike, the 500,000 informal miner have applied for formalisation of their a c t i v i t i e s t h r o u g h 9 0 0 Cooperatives, in which 320 have succeeded in getting registered.

“But, the real number of these artisanal miners could be far, far more than 500,000”, he said, “since most of them don't do it as full time vocation, but only seasonally, when they are free during the dry season”, he said.

Azubuike, who was speaking after inspecting communities affected with the recent outbreak of Lead poisoning, said that his department is out to ensure that every a r t i sana l miner i s registered in Nigeria.

On his part, Mr. Adie, informed the Press that there is $50,000 grant for each registered Cooperative to assist miners.

“There is an effort by the World Bank to resurrect the Nigerian Mining Industry”, he said.

“Nigerian has received a grant from the World Bank (($120 million), to reform the mining industry and this had commenced around 2005”, he said.

“The Grant has been very, very successful”, he said.

“We are certainly changing the face of mining in Nigeria because bigger investors are coming in, but we are also looking into the artisanal and small scale miners”, he went on.

“The artisanal miners are certainly not illegal miners.”, he insisted.

“They can be modeled to form huge source of jobs, and revenue both themselves and for government, especially for the rural communities”, he said.

According to him, the essence of the grant is on reforming mining saying that mining has to be done responsibly, if not so, it result to cause disaster, like it

Nigeria has 500,000 informal miners —Mines Ministry…Govt woos them with World Bank grant

Luka BINNIYAT

happened in part of Zamfara State.

“We have the grant, and we have the structure to administer this grant”, he said.

“The basic principle is that we want to help the artisan miners”, he said.

But, he observed that miners in Zanfara State have been shying away from subscribing to the grant, ostensibly thinking that if the registered, government would prosecute them for their illegal mining

“It appear that we have to change the strategy of our sensitisation”, he said.

“Because we are out to help them, and we mean it”, he said.

“Very soon we are going to

have technical partners who are going to teach them how to mine and process their mineral safely and profitably”, he said.

“The maximum that each mining community can have is about $50,000 (N7 million). He said that the grant has been very successfully in some places, like in Ebonyi State where mining of both granite and Lead is going on, in Plateau State and many other places.

“It is your right to access this grant, and you must come for it”, he insist.

“We have a mines officer here in Zanfara who will assist you. Please, assist yourselves, by forming cooperatives, and apply to the Ministry”, he pleaded.

“We want you to make money, we also want government to make money”, he said.

On his part, Engr. Goni told the Press that Nigerian Mining Regulation would be out around September this year,

“The Mining Act was passed in 2007 and the Mining Regulation was sent to the Ministry of Federal Ministry Justice for authentication about one and half years ago” he said

He said by the end of last April, he was told that there were so many problems with it. “We're told that it

has so many legal impediments. That it has several contradictions with existing mining law”, he said.

Engr. Goni confirmed that two weeks ago on the request of the Mines Ministry, requested from the Ministry of Justice it was retuned. Meanwhile most of the stakeholders in the sector have been requesting that they also want to make impute into the Regulation.

“We have already set up a new commit tee made up of a l l stakeholders to look into the Regulation”, he said.

“And we actually saw a lot of contradiction that it bears with the 2007 Mining Act. “There are certain provision in the regulations that are not even in the Act, and there are certain provision in the Regulation that are already in the Act”, he said.

“It was complete a confusing document that is why it has to pass through this review”, he explained.

“We have given the committee a one-week time line to finish its work and submit to us”, he said

He said that he had been assured by the Ministry of Justice that once they get it right, the Regulation will be approved in no time in September

“But the absence of the regulation

does not prevent mining activities.

In the absence of the regulation, we

have the 2007 Mining Act. That has

taken care of a lot issues”, he said.

There are certain provision in the

regulations that are not even in the Act,

and there are certain provision in the

Regulation that are already in the Act

Minister of mines

44Gas

YE N A G O A - Fear panic has g r i p p e d t h e p e o p l e o f K a l a b a

community in the old Yenagoa local government area of Bayelsa State following the leakage of a substance suspected to be gas from a ruptured pipeline owned by Nigerian Agip Oil Company.

Though Kalaba community, one of the six communities that made up the oil and gas rich Okordia clan it was learnt had in the past suffered series of oil spillages occasioned by alleged equipment failure as well as sabotage, the sound of the leaking gas it was gathered is not only causing the natives discomfort but also fear of possible fire outbreak.

It was gathered that the latest leakage was noticed by the natives on May 18, 2010 from one of the pipelines recently laid in the community by the oil company.

Lamenting incident, the p a r a m o u n t r u l e r o f t h e community, Chief Idoniboye Nwalia said the pipeline from which the gas is leaking was laid about three months ago, parallel to the others laid over the years.

“We were surprised when we heard the sound from the pipeline on May 18, 2010. Though the sound was familiar, having experienced similar incidents in our environment in the past, we investigated and discovered that the sound was emanating from the pipeline that was laid recently by Agip. Apart from the noise from the leakage that is disturbing us, we know that it is very dangerous to have such a thing close to our community; anything can happen from that leakage,” the concerned royal father lamented.

He noted that the incident had been reported to the oil company and the council chairman stressing that this may have informed the visit of the former to the troubled spot on two occasions.

Agip gas pipeline leak causes panic in Yenagoa

Samuel OYADONGHA

“After our report, Agip have visited the site twice. The police and State Security Service (SSS) have also visited the site. In this wise, I guess the community has done the right thing; for Agip to react immediately and stop the gas from continue leaking in to the environment and posing grave danger to us. We don't know the cause of this gas leakage yet, we shall know after a JIV and report. But it is important that Agip come and stop this gas leakage before it cause harm to lives and property here. My people are very apprehensive,” he said.

Also speaking, the Project Officer and head of Yenagoa office of Environment Rights Action (ERA) Alagoa Morris, who visited the scene of the leakage called on Agip to mobilize to immediately mobilize to the site and put off the gas leakage.

According to him, a Joint Investigation Visit (JIV) should be made to ascertain the actual cause of gas leakage, with a comprehensive report adding that all the stakeholders should be represented in the JIV, i n c l u d i n g c o m m u n i t y representatives.

Continuing he said, “The

silence and inaction of the

a u t h o r i t i e s i s v e r y

unacceptable. Hence the

relevant organs of the local,

state and federal government

should ensure that Agip acts

responsibly in this matter to

save the environment and

people o f Kalaba f rom

impending danger because, the

Kalaba environment is now

under zone zero; meaning

anything can happen, to the

disadvantage of the people.”Gas Pipeline

enago - The Anglo Dutch oil giant Shell P e t r o l e u m Y

D e v e l o p m e n t C o m p a n y (SPDC) may have commenced the testing of its new wells with the ignition of a new gas flare furnace at Opolo-Epie in the outskirts of Yenagoa the

SPDC ignites new gas flare furnace at Opolo —EpieSamuel OYADONGHA Bayelsa State capital.

The new furnace site is located along the Tombia/Amassoma road, approximately less than 200 meters from the massive refuse dump site along the road linking the Niger Delta University and the state School of Nursing. The roaring gas flare which could

best be describe as the 'newest monster' in the environment was ignited on June 13, 2010 and drew

the attention commuters and other passersby on the route. But an industry source allayed

the fear of Opolo community and the general public describing the ignited gas flare furnace as temporary. The source explained hinted that

as part of the Gbaran Ubie Integrated Oil and Gas project new wells are being drilled and tests may require controlled

temporary flares. This is common practice in the industry. “There is no ongoing gas flaring

related to the new Gbaran Ubie project facilities,” the source said adding “what you see is routine controlled flare to test recently drilled well.” H o w e v e r, e n v i r o n m e n t a l

advocacy group, Environment Right Action/Friends of the Earth (ERA/FoEN), condemned the

action stressing that the ignition of the flare when stopping gas flare talks were in vogue means that the company does not mean well for the people of the Niger Delta and Nigeria in general. The skylines of Opolo-Epie

community and environment, the group lamented, will not be the same again, especially at night.

46Gas

Nigeria's economic target is to become one of the top 20 economies of the world by 2020, but

only a handful has confidence in the Federal Government's ability to achieve this target in view of the current plethora of infrastructure challenges particularly, power, which is regarded as key to development.

Economic analysts and operators in various sectors of the economy constantly argue, “Get power right and every other economic problem will become powerless,” but so far, combined electricity generation capacity of all the existing power plants in the country can barely power the whole of Lagos State, often regarded as Nigeria's economic capital.

In appreciation of this fact, President Goodluck Ebele Jonathan constituted the Presidential Action Committee on Power by Mid-June, to provide leadership and guidance for the development of the power sector and the overall steering of the current power reform, with membership cutting across relevant agencies and parastatal.

Gas to power issuesAll along, the Power Holding

Company of Nigeria (PHCN) has constantly raised the alarm of inadequate gas supply to power the plants, leading to epileptic electricity supply to Nigerians.

The Nigerian Gas Company, a subsidiary of the Nigerian National Petroleum Corporation, NNPC and the PHCN constantly trade blames on the cause of the almost daily capacity drop in power, even gas producers, made up mostly of the international oil companies continue to shy away from their domestic gas obligations on account of the very low domestic gas price.

Against this backdrop, and to d e m o n s t r a t e g o v e r n m e n t ' s commitment to ending the seemingly intractable power problem, the Ministry of Petroleum Resources effected a new gas pricing regime that will see an increase in gas supply to power plants in the country.

The new price regime led to the signing of a Gas Supply and Purchase Agreement (GSPA) between the Nigerian National Petroleum Corporation, NNPC/Pan Ocean Joint Venture and the Power Holding Company of Nigeria (PHCN) that will see more gas supply to Egbin Power Plant, Ikorodu, Lagos to boost power generation from the facility.

The Minister of Petroleum Resources, Mrs. Diezani Allision-Madueke, who mid-wived the deal a fortnight ago, said, “The template stipulates all the terms and conditions for effective and bankable supply for gas to power in

New Gas pricing boosts power developmentHector IGBIKIOWUBO & Clara NWACHUKWU

Wind Power

Nigeria.” The success of the agreement is

fostering a similar deal with the NNPC joint venture with Addax P e t r o l e u m D e v e l o p m e n t Corporation to fast track the completion of the Calabar Power Station, Cross River State Gas transmission pipeline

To support the 510 Mega watts (MW) Calabar Power Station, government also awarded the Adanga-Calabar Gas Transmission Pipeline, where the gas from Addax Petroleum will be received, treated and fed to the plant.

He project was awarded on March 28, 2008 to Kaztec Engineering Ltd, an indigenous Engineering Procurement and construction company. The contractor said it commenced work on June 7, of the same year after the signing of the contract, while the letter of credit (LC) for the project was established on August 27, 2008.

The contract, which client is the Niger Delta Power Holding Company, was originally awarded at the cost of $156m but Mr. Joseph Egona, the Project manager for Kaztec, explained that it had to go through a variation, which brought it to $191m, “due to additional e q u i p m e n t p u r c h a s e f o r hydrocarbon liquid removal, introduction of a pigging station and line break valves and others.”

The variation affected the original scope such that the project

which was originally expected to be completed by December 2009, will now be completed in phases. Accordingly, “the new anticipated completion date for the Metering Station and Onshore Pipeline segment is October 2010, while the Offshore Pipeline segment is expected to be completed by February 2011 in line with government directives to fast track all gas apply.” apply.”

While the Metering Station

involves civil works as well as building and construction, piping fabrication, electrical works and instrumentation, the onshore piping involves the construction of a 24-inch 60kilometre pipeline, and offshore 45km pipeline.

The new gas price regime has fast track the delivery of the gas transmission station, which was scheduled for 2012 because of gas supply challenges from Addax and brought forward the delivery to 2011. Gas producers like say this is the best price bargain the industry has ever witnessed, adding that it will attract more investment in the gas sub-sector, particular the NIPP power plants.

NIPP programmeIn 2005 the Federal Government,

under the leadership of former President Olusegun Obasanjo initiated the National Integrated Power Project (NIPP)

The NIPP was planned as a 'Fast Track' Project with seven power stations to address the twin issues of low power generation and gas flaring from oil exploration in the Niger Delta region.

Power plants planned include:* Ihovbor Power Station Benin,

Edo State with the capacity of 4 x 125MW

* Calabar Power Station, Cross River State with the capacity of 5 x 125MW

* Egbema Power Station, Imo State with the capacity of 3 x 125MW

* Gbarain Power Station, Yenagoa, Bayelsa State with the capacity of 2 x 125MW

* Sapele Power Station, Delta State with the capacity of 4 x 125MW

H o w e v e r, f o l l o w i n g t h e controversies that trailed the execution of power projects for which over $10billion went down the drain, the Federal Government suspended further action on the projects pending the conclusion of how the funds were spent.

But seeing that the suspension was causing more harm than good, with attendant high costs both for productive services and domestic front, as almost every Nigerian began to generate own power through generators imported into the country under huge capital f l i gh t f rom the economy, government rescinded its decision.

Thereafter, federal government decided to resusci ta te the abandoned NIPPs following the agreement reached with state governments to re-finance it as part of the efforts to attain electricity generating capacity of 6,000 megawatts by the end 2009.

Power and refiningThe importance of power to

e c o n o m i c d e v e l o p m e n t i s underscored by the fact that its inadequate supply is affecting the smooth operations of the nation's refineries.

The importance of power to economic

development is underscored by the fact that its

inadequate supply is affecting the

smooth operations of the nation's

refineries

48Freight

Recently, the Minister of Transport Yusuf S u l e i m a n inaugurated a Task Force to look into

the problems of the ports, as well as make and enforce necessary action that will make the ports more user-friendly. In this interview with Godwin Oritse, the National President of the Association of Nigerian Licensed Customs Agents (ANLCA), Prince Olayiwola Shittu blamed terminal operators for putting the ports in its current state.

Excerpts:When you set out to down tools

at the ports did you ever anticipate that it would get to this point?

Let me tell you sincerely when I came on board we tried to change our direction by instituting a policy o f d i a l o g u e , a p o l i c y o f collaboration with all stakeholders and we set out by listing those stakeholders we need to get in touch with.

We know that there had always been problems at the ports, along the line there was this hue and cry about services in APMT and APMT was singled out by complaints from our people.

I then called on their media consultant who came here and we had a chat and he said his people (APMT) will like to meet with us t h a t w a s t h e p r e l i m i n a r y consultation we had with him.

There after I got a letter from APMT congratulating us and inviting me as the President with not more than two persons amongst our officials

As at the time we were still collating complaints from our members and it occur to me that if APMT want me to come it cannot determine the number of people I should come with

In respective of what they think of us they should respect our office, we kept it at ambiance because the invitation date was still about three weeks ahead.

Then there was this cry about why it should take us three weeks to even get booking and after which before you get your container positioned for examination and this process is taking almost thirty days and all that and I said no .

That will not work and since we had planned to have a meeting with them we can wait and confront them about that.

What led to the attack on your Apapa chapter Chairman?

Our chairman in Apapa went to point road due to the hue and cry from members and then the City office of APMT he was pelted with pure water sachet and was physically assaulted and he reported back to us and I felt that we were losing grip of the situation and I personally visited the same city office of APMT. I visited without prior notice and what I saw there was unbearable and very pathetic and I complained to the media consultant, he down played as if it was nothing as if to say that these people are investing money, they need to recoup their money and all that and.

Coupled with other complaints

Terminal operators are exploitative —Olayiwola, ANLCA President

Containers at the Port

from other chapters because APMT has become a reference point for all other terminal operators and we said no, it will not work.

So it took me a while to decide on the best way to approach this matter, we decided that the first thing to do is to withdraw services from APMT

But because I do know that people will see it as a vendetta against APMT so we generalise the statement of strike because we discovered that the terminal operators are not working according to their concession agreement and they are collecting money for services not rendered

And their media consultant was always the one talking with me.

He said that these issues of complain are treated on a personal basis, that if somebody feels bad

because within the period that your container is positioned for examination there is a delay and you are being charged for that delay caused by them.

about any issue and he presents the issue something could be waived for that person.

And I believe that that should not be the case, it should not be a one off thing for individual, it should be

a generalise thing if they agree to do that then we can talk but I thought that the only thing the media consultant was doing was to persuade us to bear whatever rubbish APMT was melting out to us saying that they (APMT) are doing some construction work and all that.

And we had an experience from West Africa Container Terminal that was also doing some expansion process but what they did within that period was not use the as an excuse not to deliver containers

And there was this revelation that even the equipment they brought w h i c h t h e l a t e P r e s i d e n t commissioned with so much fun fare was discovered to have been a used and re fu rb i shed por t equipment.

At what point did you discover this?

We also discovered that it was the Nigerian Maritime Administration

and Safety Agency (NIMASA) that uncovered this fraud. and we also found out that NPA was aware of the misnomer but nobody had the po l i t i c a l w i l l t o con f ron t management of APMT and we said no enough is enough and what we did was to write letters to the Federal Ministry of Transport, the Nigerian Ports Authority, and the Nigeria Customs Service and we requested that if within the next three days APMT do not revert the new charges they are introducing and revert their policy of no pay for services not rendered then we were going to go on strike seven days later.

So we gave three days, after which we gave another seven days.

It was at this stage that the Minister invited us to Abuja and we responded by telling that we are not coming Abuja to because we have had similar things before.

You are aware that there was a strike action in 2008 and it did not succeed because the approach was quite different from what we intend to do.

So what happened? So when we told the Minister that

we were not coming to Abuja, he then decided to come to Lagos.

As soon as he arrived Lagos, the first thing he did was to have a private meeting with m but before then we have sensitised the other groups of freight forwarders b telling that we have written letters to stakeholders I earlier mentioned and asked for their opinion and interestingly they said that they were very impressed by what we have done and they were ready to collaborate.

So their collaboration with us was voluntary and that was led to the

The only thing the media consultant was doing was to

persuade us to bear whatever rubbish

APMT was melting out to us saying

that they (APMT) are doing some

construction work and all that

49Freight

AHEAD of next year's elections a n d N i g e r i a ' s

t hf i f t i e t h ( 5 0 ) i n d e p e n d e n c e

c e l e b r a t i o n , t h e F e d e r a l Government has directed the Minister of Transport to clear the seaports of all over time cargo currently congesting the ports.

In a report, the Sub- Committee of the Ministerial Task Force on Port Charges and Efficiency in the Nigerian Ports has disclosed that there are over three (3,000) over time containers currently trapped in the various ports in Lagos that will lead to a port congestion situation.

The Committee Headed by Mrs. Chinwe Ezenwa said that the over time cargoes are scattered across various terminal and blamed the Nigeria Customs Service (NCS) and other stakeholders for concentrating on high revenue targets to the detriment of trade facilitation

The Committee observed that the absence of Customs at the ports on Saturdays and public holidays to provide the much needed services has also contributed to back log of containers at the terminals

Parts of the reports read: “It was g e n e r a l l y o b s e r v e d t h a t punctuali ty has become a challenge to some government agencies and freight forwarders operating at the ports thus impeding efficiency”.

The Committee also observed that there is a general reluctance for the transfer of containers to ICDs on the port of the terminal operators and the Nigeria Customs Service because it results to the loss of revenue.

To this end, the Committee recommended that a dedicated fund for the transfer of overtime cargoes be created and review the long protocol for disposal.

In the report, over 932 over time cargoes are currently taking space at the A .P. Moller terminal, while 500 Tin Can Island Container Terminal (TICT).

For Port and Cargo Handling

FG warns Transport Minister against port congestion

Godwin ORITSE

Company, there are 300 over time cargo as against 122 recorded for Port and Terminal Multi-purpose Services Limited (PTML), while Five Star logistics has 48 unit of over time cargoes and 44 vehicles.

Speaking in similar vein, the

National President of the Association Nigerian Licensed Customs Agents (ANLCA) Prince Olayiwola Shittu told Vanguard that terminals of the ports should be made a transit point.

He explained that the terminal

operators do not want their terminals to be used as transit point, adding that they (terminal operators) will want to store containers in their terminal because they make more money from container storage.

The Commi t t ee however

recommended that all over time cargoes be moved to the Ikorodu lighter terminal with a view to de-congesting the port within the next two months.

Ship at the Port

thHEAD of its 25 a n n i v e r s a r y celebration, the A

Nigerian Association of Master Mariners has decried the state of insecurity in the na t ion ' s s eapo r t s and waterways and warned against a repetition of the Somalia situation in Nigeria.Speaking to newsmen in

Master Mariners warn against the Somali situation in Nigeria

Lagos recently, Chairman of the Organising Committee of the

t h25 ann iversa ry o f the association Captain Emmanuel Omotayo said that the current state of insecurity of the marine environment in Nigeria leaves much to be desired.Omotayo noted that the

situation in Nigeria is tilting towards the Somalia situation

and called for urgent steps taken to address the abnormally before it gets out of control.He explained that the group is

holding no body responsible for the deplorable rate of insecurity in the port, adding that it is only trying to create awareness on the problem so that the relevant authority can react accordingly and take control of the situation.

The safety of lives and property in Nigerian waters has resulted to the high premium in marine insurance, a development that will impact negatively on the na t ion ' s economy i f l e f t unchecked.“We are all aware of the state of

security and safety in our ports today, the situation we have in Nigeria is very close to what we have in Somalia.“Ships have been hijacked in

Somalia and crew killed, our aim is to ensure that our ports and marine environment is secured.“We are blaming no body, we are

only trying to bring awareness to the appropriate authorities, ship owners have raised insurance

premium that means we are going to be paying more for goods and services.The 200 member strong

association according to another retired ship Captain Abiodun Omotesho said that the group has been quietly working to oil the economy of the country by ensuring that vessels sail safely in and out of the ports.The group, Omotesho stated

has been instrumental to policies to have shaped the Nigerian maritime industry and advises government against policies that are inimical to the well being of the industry.

50

PORT HARCOURT: T O T A L h a s c o m m i s s i o n e d three projects in its host community in

Ogba/Egbema/Ndoni local government area. They are the Egi Women Development Centre in Akabuka, 1.2 km in te rna l road for Obi te community and the renovated Health centre in Akabuka and Obite areas of the local government. In his address , Deputy

Managing Director, Port Harcourt District of Total, Mr Roger Poirier urged the communities to make good use of the projects. He specifically called on the local government to effectively run the hospital. “We ca l l on the loca l

government to ensure the smooth running of these facilities in order to merit our continuous support . Our experience on the running of the Egi hospital at Obagi which we recently commissioned and handed over is not at all palatable. Issues bordering on staff discipline continues to be of concern. We call on the local government administration to take urgent steps to redress this situation”, he pleaded. Continuing, Mr Poirier said the

Total commissions projects in host community

Patient in Hospital bed

Jimitota ONOYUME

projects commissioned were nominated and constructed by the people.” It is worthy to note that these projects being commissioned today were nominated by the people, constructed by the people and for the use of the people themselves. It is therefore a reflection of their needs”E a r l i e r , t h e s t a t e

Commissioner for Women Affairs and Chairman of the occasion, Mrs Emmanuelle Izuwo lauded the oil giant for the project; describing it as "giving back to a community you take from". She urged the community to make good use of the projects

In their address, Akabuka

Community Development

Committee (CDC) pledged to

continue to make Total's

project go on smoothly in the

area just as they enjoined the

oil firm to ignore rumour that

there was division in the

leadership rank of Akabuka

Community Development

Commit tee (CDC). The

address circulated by the

Chairman of the CDC , Mr

Iweka Abajie also pleaded with

the oil firm to implement other

pending MoUs it signed with

the area.

ORT HARCOURT: MOBIL Producing Nigeria has donated P

fifteen Dell computers and three laser jet printers to G o v e r n m e n t Te c h n i c a l College, Ogu, and Ogu/Bolo local government area of Rivers state. Superintendent, Shore Base Protection, of the oil giant at their Onne office, Captain Adejeni Adu said they also set up an ICT centre with fifteen tables and chairs for the school.

Urging the school to ensure they secure the facilities which he said cost the firm N2.2 million Adejeni charged the students to make good use of the computers to enhance their knowledge. According to him, computer literacy had become very relevant in today's world. “ A n d a s a r e s p o n s i v e corporate citizen we cannot allow our young minds stay computer illiterate. We are happy to bring this exciting moment to s tudents of G o v e r n m e n t Te c h n i c a l College, Ogu”, he said.

He also pleaded with the school management to allow the students unfettered access to the computer, adding that the computers should not be treated as piece of furniture to gather dust in the ICT centre

One of the Principals of the school, Mr. Edori Simeon who spoke for the school, thanked Mobil for the donations, describing the firm as a true friend of the institution. According to him, the firm had e a r l i e r d o n a t e d ” f o u r classroom block which is serving as administrative b l o c k , s u n d r y s p o r t s equipment, 40 kva generator, diesel storage tank etc to the school.”

The Pr inc ipa l fu r the r requested the oil giant to assist the school with a bus and erection of a security post at the gate.

Chairman of the local government Ogu/Bolo local government area who was represented by Secretary to the Council, Mr. Ibiboyi Iyaye also lauded the initiative of Mobil and assured that the Council would assist in security the facilities donated. He urged the students to make good use of the opportunities created by the donation to learn how to use the computer.

Mobil donates computers to schools in Rivers

Jimitota ONOYUME

We call on the local

government to ensure the

smooth running of these facilities in order to merit our continuous

support

52

Yenagoa - The recent BP oil spill in the Gulf of Mexico is now believed to be the

worst environmental disaster in United States history and has again b r o u g h t t o t h e f o r e t h e disadvantaged position of oil bearing communities in the Niger Delta where dwellers have been forced to contend with the worst form of despoliation in the last 50years.

Experts estimate that some 13 million barrels of oil have been spilt in the Niger Delta since oil exploration began in 1958.

The Niger Delta, which is home to more than 30 million people and is the third largest wetland in the world, produces almost all of Nigeria's foreign exchange earnings.

Dead fish and oily water are part of daily life for the natives, as are gas flares.

Some of its communities have never had a night of total darkness as gas is continuously flared even when they do not have electricity.

Despite decades of community protest, the government of Nigeria has shown utmost indifference, lack of political will and limited respect to its citizenry by aiding

BP oil spill refocuses attention on Niger Delta environment

Samuel OYADONGHA

Oil spilage

and abetting oil companies like Shell, Chevron, Total and Agip, whose activities result in constant environmental pollution of land, air and waters.

Troubled by the plight of people of the region, environment right advocacy groups in the country have called on the Federal Government to consider the environmental and social disaster from the BP's Deepwater Horizon platform as wake up call to keep close watch on the oil companies operating in the already fragile Niger Delta region.

Specifically, Environment Right Action (ERA) and Friends of the Ea r th , u rged t he Fede ra l

Government to study the strategy being adopted by the United States of America and in the handling of crises created by the massive spill from the underwater crude oil pipes of the British Petroleum (BP), saying such quick response will resolve incidences of oil spillage in the Niger Delta region.

The ERA/FoEN said though some of the issues affecting the environment are being responded to by the relevant agencies of the Federal Government, the Federal Government should adopt a similar strategy like the United States and halt the allocation of new oil blocs in the Niger Delta and compelling the oil corporations to do a comprehensive cleanup.

In a statement issued by the Media Officer of ERA, Philip Jakpor made available to Sweet Crude and signed by the Executive Director of ERA/FoEN, Nnimmo Bassey, the group argued that it is surprising that the Nigerian government is not taking note of the underlying meaning of the US government's chill on new deepwater oil drilling at a time it is indicating more interest in the oil-rich Gulf of Guinea for its future energy needs.

Nnimmo Bassey said “Again, we want to state that the Gulf of Mexico disaster has reinforced our demand that we keep the oil in the soil, tar in the sand and coal in the

hole. It is the reasonable way to go in order to assure a green energy future.”

Bassey pointed out that the scenario playing out in the Gulf of Mexico and the Amer ican government's demonstrated actions to save its environment and people which has cost BP an estimated $1.25 billion necessitated the question: “Why is the Nigerian government complacent in making the oil multinationals bear the full cost of the millions of barrels of oil that have spilled into the Niger Delta in over five decades of oil extraction?”

“No other time in this nation's history is the need to put a rein on new oil finds more desirable than now. After decades of lack of transparency and downplaying of the volume of oil spills in the Niger Delta, oil corporations seem set to continue to spew more crude in the region, more drilling in the entire Gulf of Guinea and more conflicts all in a bid to satisfy the addiction of the rich countries to oil.”

Bassey reiterated ERA's argument t ha t f l ag ran t d i s r ega rd o f international standards in the oil industry particularly the non-observance of Environmental Impact Assessments (EIA) on projects with far-reaching impacts o n l o c a l c o m m u n i t i e s i s unacceptable.

No other time in this nation's history is the need to put a

rein on new oil finds more

desirable than now

ORT HARCOURT: Lack of political will on the part of P

the political class to execute policies and programmes of government has been identified as the bane of the nation's failures in several sectors. Speaking in an exclusive interview with the Vanguard an Ijaw elder, Prof Abiye Obuoforibo urged P r e s i d e n t G o o d l u c k Jonathan to exercise the necessary political will to get things going in the country.

“What has bedevilled all sectors of our national life is the will to do the correct thing. The laws are there but enforcement is the issue. If we start enforcing them it will do our nation better.”

He said what was needed most at the moment in the country was fairness and justice. He said the Niger Delta region which has suffered long years of neglect needed urgent f e d e r a l g o v e r n m e n t attention. According to him, it was sad that fifty years i n t o t h e n a t i o n ' s independence the area that su s t a in s t he na t i on ' s economy was still grossly underdeveloped.

The scholar enjoined the federal government to give special attention to the region as the people were tired of excuses like,” it is difficult terrain”, etc that were thrown up in the past to d e n y t h e r e g i o n o f development.

“Niger delta people have been marginalised and subjected for a long time. 50 years of independence, you can hardly see impact of development in the region. Government i s about impact, our people still live in a polluted environment, our land is completely despoiled because there have not been fairness to the region. We will like our President to address the problems so that the region can get all they have lost. We want to be like other Nigerians. We want to see bridges over water; we want to see the buildings in the region. We are tired of difficult terrain “

Obuoforibo tasks Jonathan on Niger Delta

Jimitota ONOYUME

53

WA R R I -

T H E R E i s disquiet in the fold of ex-m i l i t a n t

leaders in the Niger-Delta over a claim that the Niger-Delta D e v e l o p m e n t C o m m i s s i o n (NDDC) had withdrawn the contracts given to the ex-fighters, as a way of empowering them.

Also, some of the ex-militant leaders are fuming that a number of their privileged colleagues have abandoned them and using their connection at the federal level to lobby the Presidency for oil blocs.

Vanguard learnt yesterday that the rank of the ex-militant leaders in the region have been broken as a result of the development and a group of nine ex-generals of the

Ex-militant leaders feud over contracts, oil blocs Emma AMAIZE Movement for the Emancipation of

Niger-Delta (MEND) , allegedly led by John Togo is spitting fire over the matter.

Spokesman for the group, Captain Mark Anthony said in an online press statement that the post-amnesty programme of the federal government has failed, warning that a fresh oil war should not be ruled out if the grievances were not addressed.

On the NDDC contracts for ex-militant leaders, he stated, “Last year December, the government deceived us, the government gave us empowerment contracts through N i g e r D e l t a D e v e l o p m e n t Commission (NDDC). But the same government withdrew the contracts awarded to us for reasons not yet made known to us”.

Independent investigation by Vanguard showed that the ex-

militant leaders were actually asked to submit the names of some companies to the NDDC, last year, for award of road contracts in their areas.

One of them, Government Ekpemupolo, alias Tompolo reportedly refused to submit any name, saying he did not want his name to be scandalized later over the matter, but, some of them complied.

While a source said the contracts were given out, Mark Anthony insisted the nine ex-generals were deceived, as nothing came to them. Our source, however, said, “I know nothing about oil blocs they are talking about”.

According to him, “It is saddening to state that only a handful of ex-generals among us that are enjoying government and oil companies' patronage, while the

rest of us are wallowing in abject poverty, begging for survival, we will not accept and allow this to happen for any reason”.

He continued, “It has come to our knowledge that the few ex-generals who are beneficiaries have betrayed others before the government that they alone can guarantee sustainable peace in Niger Delta and, therefore, the rest ex-generals should not be carried along in post-amnesty welfare / empowerment package. I want to say that this is going to be the dawn of fresh oil war in Niger Delta”.

“The few ex-generals should be made to understand that we have known their secret deal in using our heads to negotiate and lobby for oil blocs with the Federal Government of Nigeria. They should also be made understand the fact that we came to a struggle our fathers have selflessly fought for over 50 years against injustice. Also, they should be told in unmistakable terms that Niger Delta struggle is larger than an individual or group of individuals who mortgage it for selfish aggrandizement and family empowerment”.

“I am categorically saying that the few ex-generals are not sincere with the truth. They are deceiving the federal government, and one day, the truth shall be exposed, if government fails to act fast.

“The few ex-generals who are parading themselves as alpha and omega should also understand the fact that they have initiated and poisoned the mind of thousands of Niger Delta youths who are ready to lay down their lives for the struggle, as they did before after late Major Jasper Isaac Boro”, he added..

The ex-generals of MEND a s s e r t e d , “ L e t t h e f e d e r a l government know that the reign and fall of a leader gives birth to another leader. Presently, with the look of th ings , Pres ident Goodluck Jonathan is pre-occupied with stable government and 2011 re-election campaigns”.

“We are aware that the President is a product of our struggle in which hundreds of lives were lost to federal troops during the dark days in the creeks. Posterity shall judge Mr .President if he fails the Niger Delta people. God installed him to wipe our tears and regain our lost glory. The President is our man and he should do everything a avoid re-occurrence of fresh oil war, which his predecessors, Obasanjo and late Yar' Adua experienced.

“Mr. President should act immediately and fast-track policies tha t cou ld br ing proac t ive development to Niger- Delta region whose oil have been stolen to develop other parts in the country unjustly, leaving the owners of the oil in abject poverty over 50 years.

ARRI- SHELL P e t r o l e u m D e v e l o p m e n t W

Company (SPDC), Western Division has spent N18 million in the last 10 years on capacity training of over 2,500 youths in the Niger-Delta to make them self-employed.The training programmes were

in different areas, including welding and fabrication, electrical installation, fashion design, catering, automobile repairs, computer repairs and secretariat studies.General Manager, SPDC,

Western division, Mr. Cor Zegelaar disclosed this at Effurun, near Warri at the commissioning of the first ever SPDC/JV sponsored Industrial Tailoring Programme for youths in Delta state.He said he was delighted

b e c a u s e t h e t r a i n i n g programme would promote business partnership amongst youths in the Niger- Delta region. According to him, “The

fashion industry is an evolving one with opportunities for growth. Recent studies have shown that there are great employment prospects in this area. The Industrial Tailoring Programme brought together some fash ion des igners together to form a cooperative in order to grow their business; the best 10 fashion designers were selected and they went through a three-month capacity b u i l d i n g t r a i n i n g w i t h experienced designers in the fashion industry”. Zegelaar said the Joint Venture

partners believed the over N18 m i l l i o n v o t e d f o r t h e programme was a worthy investment because the youths who have been trained would become relevant members of their communities, contributing m e a n i n g f u l l y t o t h e development of their areas, as well as become ambassadors of peace that would join hands with others to encourage the younger ones to shun violence and societal vices. H e c h a l l e n g e d t h e

beneficiaries to re-brand t h e m s e l v e s a n d t h e i r communities, while urging them to go with determination to succeed in business and to always work as a team because working together is a key to success. “We also want to encourage

you to give back to the community and the society by duplicating the chance you were given and adopting a youth apprentice”, he added.

Shell trains 2,500 youths

Emma AMAIZE

Niger Delta Militants

54

ARRI-CHEVRON Nigeria Limited (CNL) has donated W

the sum of N75Million towards the building of a Women Development Centre in Ekpan in Uvwie Local Government Area of oil-rich Delta State .

M a k i n g a d o n a t i o n o f N25million to the community as first installment for the execution of the project to take off the company said the project would be executed by the people themselves.

General Manager, Policy, Government and Public Affairs (PGPA) of CNL, Engr. Femi Odumabo, speaking at the signing of Project Specific A g r e e m e n t w i t h E k p a n Development Committee (EDC) and hand over of #25 Million Cheque to the EDC for the construction of Ekpan Women Centre, noted that one of CNL core values is long term commitment to relationship building.

Engr. Odumabo, who spoke through Mr. Chima Nwogu, PGDA Manager, West said that; “Today, in keeping with this commitment, we are here to sign a project specific agreement with Ekpan Development Committee (EDC) for the building of Ekpan Women Development Centre”.

According to him; “The project will be funded by Chevron Nigeria Limited the operator of NNPC/Chevron Joint Venture with the tune of #75 Million. We will be handing over a cheque for #25 Million which is the first installment to the representative of EDC later in the ceremony”.

For Chevron and its venture partner, the NNPC, he said, the occas ion i nd i ca t e s t he i r dedication to contribute to the development of communities close to its operation.

Engr. Odumabo revealed that few weeks ago, CNL provided some facilities at Ekpan Primary School to assist in high grading teaching and learning in the school as well as in empowering the pupils for the challenges of the future.

He said; “Today's event has also underlined the benefit of ensuring cordial and mutually fruitful relationship between the E k p a n C o m m u n i t y a n d N N P C / C h e v r o n . T h e relationship and partnership have yielded many good fruits for all the parties over the years. However, for these aspirations to continue to be met, we must continue to have the cooperation of people in areas where we operate, an environment of peace must exist”.

Chevron donates N75m to women development centre

Emma ARUBI

The Anglo-Dutch oil g i a n t , S h e l l P e t r o l e u m D e v e l o p m e n t Company (SPDC)

says it has spent over N118million on the training of Bayelsa youths in v a r i ou s s k i l l s a cqu i s i t i on programme.

Aside the training of over 100 youths drawn from the host communities to the Gbaran- Ubie Integrated Oil and Gas Project in ICT, catering, wielding and fabrication, they were also given starter pack kits and a take off grant

SPDC spend N118m on youths development in Bayelsa communities Samuel OYADONGHA

of N200,000 each to assist them in their businesses.

Speaking at the graduation ceremony of the SPDC sponsored Youth Training and Enterprise Programme for communities in Gba ran -Ub ie ye s t e rday i n Yenagoa, the company General M a n a g e r , S u s t a i n a b l e Development and Community Relations, Mr. Tony Attah, described the gesture as part of the company's commitment to the development of the youths in its area of operation.

Represented by Chris Idogun, the General Manager, Sustainable Development and Community Relations, described as “worthy

investment the more than N118m s p e n t o n y o u t h t r a i n i n g programme.”

He said, “We believe in teaching our youths skills which will help them face future challenges. With this skills acquired through this training programme, the youths wil l make meaningful and sustainable contributions to the development of Gbara Ubie prject communities and hopefully, the Niger Delta region as a whole.”

According to him, “the ceremony concludes an 18 month training programme, which consists of vocational and technical training, industrial attachment, business development and leadership t r a i n i n g w o r k s h o p s a n d certification examinations.”

He noted that the end of the training programme, the trainees

took the trade test II & III examinations administered by the Federal Ministry of Labour and Product ivi ty and came out successful.

“They are no longer trainees but professionals, who are equipped with the skills needed to set up small businesses in their communities and succeed in their chosen trades.

H e h o w e v e r c h a rg e d t h e beneficiaries to make good use of the opportunity accorded them saying, “the training you have received and the starter packs you will leave here with will enable you to become small business owners and we expect you to leave here determined to succeed in your chosen trades as your success will surely contribute towards the development of your communities and Nigerian society at large.”

Rev. David Ugolor, Executive Director ANEEJ (m) and his development partners

55

WARRI AN attempt by the policemen to evict a top official of the

Delta State Oil Producing Areas Deve lopmen t Commiss ion (DESOPADEC) from a building at Ogbebor Street, Off Aladja Avenue, Enerhen, Delta state following an order by the Ebrumede Customary Court ended in fracas, yesterday.

Sweetcrude learnt that aides to the DESAPODEC Commissioner and the policemen attached to engaged the policemen brought by Mrs. Ehizogie Falegon, the p l a i n t i f f , i n s u i t N O : UACC/01/2010 from the Enerhen Police Station, Effurun in a combat and at the end of the battle, several persons were injured.

The Presiding Judge, Emiakpor Emiaso while delivering his judgment June 17, 2010 ordered the court's bailiff to execute the court order to evict the defendant who had stayed in Ogbebor's house for 33 years.

The legal tussle which began in 2005 was decided in favour of the plaintiff who inherited the property from her late father, Chief Ogbebor, a former Vehicle

Court eviction of DESOPADEC official ends up in fracas

Emma AMAIZE and Akpokona OMAFUAIRE

Inspection Officer (VIO) An eyewitness and in-law to the

plaintiff, Mr. Fidelis Isibor said trouble started shortly after the DESOPADEC official refused to be evicted by the bailiff, who arrived the residence with the court papers at about at about 7.00am with about six policemen.

He said the mobile policemen deployed to the DESOPADEC official started to make mockery of their colleagues from the court efforts by the team leader, Inspector Ifeanyi Igbinedion to calm his men failed when one of the mobile policemen brought out his riffle and threatened to shoot his colleagues from the station.

"The drama continued as another fight broke out shortly , which resulted to the seizure of two digital cameras belonging to Mr. Nelson Polo, a photographer brought by the plaintiff, who was thoroughly beaten up by aides of the official that outnumbered the aides of Mrs. Falegon, as he tried to take photographs of the incident", he said.

When a Vanguard correspondent met with the DESOPADEC official, who wore a singlet and short, yesterday, he said the address in the paper brought by the bailiff is No 1 Ogbebor Street instead of No 2 Ogbebor Street, and he asked him to go back and correct the mistake before coming

to execute any order. The official, according to

information available to Vanguard has built his personal bungalow near the property in contention but refused to quit the house, which he had been staying in since 1977, as demanded by Mrs. Falegon.

However, some officials of

DESOPADEC insisted they would

persuade him to quit the property,

yesterday, but at 12.47 pm when our

correspondent left the house, the

official was negotiating for more

time with the bailiff.

he point is beyond debate that the bulk of commanders and soldiers who formed the unofficial army of the Niger Delta, were uneducated. There is T

peace in the Niger Delta, a peace we all crave and while many an optimist would say for the sake of all, “this is lasting peace,” a more pragmatic person would rather venture that it is peace that could be built upon for the final resolution of the Niger Delta situation.

A tour of the educational facilities of the rural Niger Delta would shock you; leaky classrooms, classrooms without furniture, schools that have been abandoned for goats and fowls by pupils and teachers. The picture is not so dismal everywhere. The Universal Basic Education Board (UBEB) has maintained some structures in the Region that any well managed educational system should use effectually. Apart from the efforts of the UBEB, Mr. Amaechi, governor of Rivers State, is putting together a comprehensive educational program, the first physical signs of which are staid, elaborate and carefully constructed school buildings. The buildings look magnificent but a school is much more than beautiful classrooms. However, as some argue, a government that was inspired to erect such schools would have laid down a sound policy for school administrators, teachers, teaching assistants and aids as well as books.

The problem with education in the rural Niger Delta has not always been the lack of schools and teaching aids. Teachers posted to the rural Niger Delta act with impunity, refusing their posting, or accepting and only putting up ceremonial appearances or not giving quality time to their teaching jobs. When they manage to stay on their jobs, they become distributors of laboratory equipment and other educational aids to urban retailers. This is a major factor that sets back education. From the Head teacher to the gateman, nobody

takes responsibility for school property procured with tax payers' money for the benefit of generations of learners. A system that harbours such teachers is as unworkable as that which p e r m i t s t h e g r a d u a l depletion of the very tools of its trade.

We invite the federal government to partner with states in formulating an educational policy which would ensure the safety of libraries, books, laboratory equ ipmen t and o the r teaching aids. But beyond the safety of teaching aids, the policy should include the engagement of teaching personnel who are prepared to ply their trade wherever they are posted. And then like the Rivers example, schools should be staid, attractive to learners, teachers and tourists while not repetitively costly to tax payers. The Niger Delta is not a special case. It is only the lopsided oil exploitation policy maintained by the federal government that has made it a special case. The violence and madness that was experienced recently in the Niger Delta would not have occurred if the original perpetrators did not find ready, illiterate and hungry youths to execute their plans with them.

That is why the federal government must step in as a matter of urgency to reduce the level of educational inequities in the Region. At the moment most states offer free but little education. In private schools at the primary level tuition fees ranging from N60, 000.00 to as much as N150, 000.00 per term are demanded of parents. With militancy and the chaotic situation it provided for illegal oil business, militants were able to enjoy the momentary pretensions of private school education for their children. I think the implication of nothing doing something on this score is clear for all to see.

John Iyene Owubokiri is a Port Harcourt based lawyer and legal practitioner who writes compellingly on issues affecting the peoples and interests of the Niger Delta. He is also the national coordinator of the Initiative for Non-Violent Change (INVC) in the Niger delta.

Educational inequities in the Niger Delta

TheQuestion

A tour of the educational facilities

of the rural Niger Delta would shock

you; leaky classrooms,

classrooms without furniture, schools that have been abandoned for goats and fowls by

pupils and teachers

Another fight broke out shortly , which

resulted to the seizure of two

digital cameras belonging to Mr. Nelson Polo, a photographer brought by the

plaintiff, who was thoroughly beaten up by aides of the

official

Judge with gavel

Documents

Sweet Crude July