BAYELSA IS THE OIL AND GAS CAPITAL OF AFRICA

             -DICKSON

                                              Governor Sierake Dickson of Bayelsa State

Historically, Nigeria’s crude oil exploration and production emanated from Oloibiri, a community in Bayelsa state, south-south Nigeria. The state is also the host and headquarters of Nigerian Content Development and Monitoring Board (NCDMB), an agency that supervises Local Content practices and development in the country.

Recently, Bayelsa state hosted the 8^th Practical Nigerian Content (PNC) that was held at Yenegoa, capital of the state. Stakeholders, mainly oil majors and service companies attended the event with intent to project and develop Local Content drive in Nigeria.   

Governor of Bayelsa state, Henry Sieriake Dickson, in his opening ceremony speech referred to the state as Jerusalem of Ijaw nation and centre of gravity of the Niger Delta around which the oil rich region revolves. He thanked Executive Secretary (ES) of NCDMB, Engr. Simbi Wabote and his team for returning PNC back to its origin and home. He said the state was concerned when few years ago it received invitation that the event took place in other states. Since the state is the headquarters of Local Content in Nigeria, issues pertinent to it should be addressed in the state.

At present, Local Content annual event has returned to Bayelsa state which it rightly belonged, Dickson added. He commended the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu and Group Managing Director of the Nigerian National Petroleum Resources (NNPC), Dr. Maikanti Baru, including other stakeholders for the support given to Wabote.

Dickson explained further why the event should be held in Bayelsa because “The story of oil and gas in our nation started from here (Oloibiri), whereas we refer to places like Houston as the oil and gas capital of the world, we tell everybody whether they like to hear or not, sometimes, there is what is called an inconvenient truth, the truth nevertheless still has to be told, this state, the glory of all lands, is the oil and gas capital of Nigeria and of Africa.” According to the governor, the state appreciates when major conferences and seminars in oil and gas sector are made to take place in Bayelsa. This is a recognition of the state historic contribution. Dickson was optimistic that better days are ahead for the sector while the state appreciates future outcome. He extolled the GMD of NNPC, Petroleum Ministry and all stakeholders for working with governors of oil producing states including elders, opinion leaders and security agencies. These collaboration and “Concerted efforts we have all made, we have a very stable and very promising operating climate and it is our hope that we continue to improve on it.”

The Bayelsa state governor was of the view that with existing stability in Niger Delta region, the government and oil operators will be able to meet projected targets. This will culminate to more revenues for development of local governments and states concerned. The idea of Local Content is enormous and the vision should not die. Speaking on behalf of the region, Dickson said, Niger Delta is grateful that federal government created the Board. In his words, “And we are further appreciative that it was brought here to the place where the story of oil and gas started and I thank the Executive Secretary and members of his Board because we are hosting them and we know that they are trying their best.”

The ‘Country man’ governor as he is fondly called by his admirers commented on NCDMB permanent site that is also in Bayelsa state. The aesthetic edifice will be the headquarters of NCDMB. He made it known that when the edifice is completed and put to use, “By the time we see more oil and gas deals being completed in the great state of Bayelsa, that will add to our local economy.” Dickson added that oil and gas deals should not be completed in other places other than where oil is found. Local Content means, “We have to be completely local, meaning that producing companies should fly in, stay here and have their offices and interface more directly and robustly with communities, state governments including the NCDMB.”

This gives opportunity for investors to invest in the state. The governor assured PNC participants that the state will soon complete its international airport to thrive economy activities. Bayelsa state government is working assiduously to provide infrastructures and services that will make things easy for operators. This will also prevent a “Situation where oil and gas actions and mega deals take place in faraway cities and states that do not even know the colour or smell of crude oil.” If such activities take place in the state, it gives support for it to have benefit accrue to it as well. Bayelsa is ready for investments that will thrive its economy.   

                  NCDMB: FORGING AHEAD TO A PROGRESSIVE FUTURE

                                         Engr. Simbi Wabote, Executive Secretary, NCDMB

Local Content Act was promulgated in 2010 in order to improve and develop Nigeria’s oil industry by aiding and giving opportunities to indigenous operators. Sequel to the Act was the eventual creation of Nigerian Content Development and Monitoring Board (NCDMB), to oversee and strengthened the Act.

The NCDMB is headed by an Executive Secretary (ES) to manage its affairs. One man that has brought face-lift and re-organization to the Board, is Engr. Simbi Wabote, its current ES, and with tenacity, vision and passion, he has driven Local Content practice in Nigeria to a reasonable height.   

Delivering his keynote address at the 8^th edition of the Practical Nigerian Content (PNC) with the theme “Driving Economic Development and Sustainability” which was held in Yenegoa, Bayelsa state, Wabote highlighted to chief executives of International Oil Companies (IOCs) and their indigenous counterparts of his plans for Local Content drive.  

The 8^th PNC had array of seasoned professionals in the oil and gas industry lined up to share their vast knowledge and experience.

Wabote introduced ten-year strategic roadmap aimed at increasing Nigerian Content from the current level to 70% by 2027. He explained that the Board will utilize forum like PNC to provide update on progress of the strategic roadmap.

The ES itemized promises and plans that were made in previous years. The Board’s ten-year strategic plan is hinged on five pillars and four enablers. The pillars are technical capability development, compliance and enforcement, enabling business environment, organizing capacity and sectorial regional market linkages.

These four enablers are: funding, regulatory environment, collaboration and stakeholder engagement including research and statistics. Each pillar is backed with strategic initiatives with a project management officer or office set up to drive its implementation. Wabote reiterated that “Ten years may appear far off but the first year has been spent on the roadmap and we are left with nine years to deliver on our journey.” First year of the journey has been used to put in place foundations that will enhance the realization of target set up for the Nigerian Content level.

The NCDMB boss made it known that as at the end of 2018, it was reckoned that Nigerian Local Content achieved its 30% objectives. On the technical capability development pillar where it was promised to provide support for the Egina FPSO integration activities to demonstrate that it is possible to integrate FPSOs in-country, it is common knowledge that the Board achieved its objective which represents another dent or claims by nay sayers that such feat could not be performed in Nigeria.

Other feats achieved by NCDMB includes the commencement and infrastructural development of its industrial parks and international certification programme for 20 marine personnel. Another signature achievement is the provision of support to catalyze the establishment of a 5000 per day modular refinery in Ibigwe, Imo state.

Besides, in 2019, plan to support the establishment of two more modular refineries and participate in LPG value chain if the condition precedence are in place. The Board has progressed the infrastructural development of industrial parks, finalize review of offshore rig acquisition strategy and ensure positioning of 20 trained marine personnel for one year international sea time in fulfilment of requirement for certificate of competency. According to Wabote, the second pillar has to do with compliance and enforcement. The Board will put in place third party monitors to enhance compliance monitoring in the upstream, midstream and downstream sectors of the oil industry. The ES said after thorough tendering and selection process, the programme has commenced tailored along section 64 and 65 of the Nigerian Oil and Gas Content Act (NOGIC).

As part of its success, NCDMB has commenced forensic audit of remittances to establish compliance with provision of Nigerian Content Development Fund. In 2019, the Board intends to deepen and widened the role of third party monitoring service providers for effective monitoring of 51 operating companies with 8000 oil and gas service providers registered on the NOGIC JQS.

In addition, the Board will also expand its compliance and enforcement framework to cover marginal field operators, midstream and downstream sectors.

On the pillar for enabling business environment, NCDMB will co-develop and implement service level agreements with key stakeholders. Some these agreements have been signed with Oil Producing Trade Section (OPTS), Nigerian Liquefied Natural Gas (NLNG) and Independent Producers. Part of the content of service level agreement is that there will be application of a 15 day rule, any request for approval of endorsement to NCDMB that operators does not receive approval within 15 days, means the request has been approved. For this, no operator has challenged the Board for not meeting this obligation.

The NCDMB boss explained further that the Board will enhance the provision of constant power to aid manufacturing in industrial park sites. The site construction is ongoing which will be for provision of gas fired power plants for the park in Bayelsa while communication has been opened with the NIPP station in Odukpani, Cross River state for power supply as well.

Wabote commended the Nigerian National Petroleum Corporation (NNPC) and National Petroleum Investment Management Services (NAPIMS), for supporting the project to ensure that the Board establishes within Bayelsa, a 25 MegaWatts power plant that will provide power for NCDMB head office and some critical state infrastructures. The ES appreciated its host Bayelsa State Government for partnering with the Board in setting up an SPV to manage power plant like a private business.

The Board has delivered numerous youths prgrammes which include training of 120 youths under the graduate and agriculture entrepreneurial training programme. Through this initiative, 50 youths were sponsored for training at the Lagos State Power Academy and over 226 youths trained under various initiatives based on the Board’s training programmes. In 2019, the Board plans to firm up power supply engagement for industrial park in Cross River state and carry out youth empowerment programmes to enhance conducive business environment and establish a functional customer service desk.

Under the organizational capability pillar, Wabote said, NCDMB has targeted the completion of its new headquarters in Yenegoa, in 2018, but was unable to deliver it due to late arrival of some of construction materials for the project. The ES assured that as part of its progressive mandate, the project will be delivered in 2019, it is at 92% completion level. Surprisingly, the magnificence edifice is being constructed by an indigenous company paving way for Local Content drive.

In other areas, the Board has also deployed new organizational structure which has been manned. It has completed inter departmental service level agreements as part of efforts aimed at approving internal efficiency. By 2019, NCDMB staff will relocate to its new operational base where cogent issues will be managed.

Wabote emphasized on sectorial regional market linkages, NCDMB has delivered on its promise to provide in-puts into various legislative processes as required to enhance sectorial linkages in Local Content practice. Nigeria will continue to service as resource country for the development of African Local Content policy.

As part of his plan for NCDMB, Wabote added that in 2019, the Board plans to validate by prioritizing opportunity sectors for Local Content development. Regional marketing of some of its infrastructures being developed such as the FPSO integration facility will further be pursued.

On the four enablers: the Board’s has launched a $200 million Nigerian Content Intervention Fund. As at the end of October, $21 million has been lent to beneficiaries while in 2019, the Board intends to develop and launched its investment policy to provide flexibility to funding and investment interventions.

With regards to regulatory environment, the ES said the Board has delivered on judges’ sensitization workshop in the NOGIC Act as a prelude to prosecution of non-compliance cases in courts. There was stakeholders’ workshop on operational guidelines and drafted ministerial regulations. The Board intends to finalize and secure approval of ministerial regulation in 2019.

For collaboration and stakeholder engagement, Wabote was of the view that the Board will sharpened its inter-agency collaboration across board. NCDMB has established collaborations with the Nigerian Customs Service, Economic and Financial Crimes Commission (EFCC), NNPC, NAPIMS, Nigeria Immigration Service, Federal Aviation Authority of Nigeria (FAAN) among others. It plans to consolidate and sustain these collaborative efforts in 2019 through the joint committees put in place to deepen inter-agency collaboration. There is need to strengthened sectorial groups under the Nigerian Consultative Forum as a credible platform to get regular feedback from industry practitioners.

 Research and Statistics cannot be relegated to the background. The Board has inaugurated Research and Development Council and it has commenced the development of ten-year research and development road-map that will guide R&D effort over the next ten years. Wabote said R&D framework has been established and data analysis from marine vessels demand has also been completed with key industry needs on vessel types and manning levels established as well in close collaboration with NAPIMS. R&D roadmap will be launched in 2019 for implementation. These are the future projections of NCDMB for 2019 and going forward. 

AMNI: TWENTY-FIVE YEARS OF UNINTERRUPTED SUCCESSFUL OIL PRODUCTION

                                      Chief Tunde Afolabi, Chairman/CEO AMNI Petroleum

Oil exploration and production have always been prerogative of the International Oil Companies (IOCs) owing to their technical competence including state-of-the-art equipment for exploration. This had been the trend for many years ever since oil was discovered in Oloibiri, south-south of Nigeria by Shell in 1956.

However, the story was different with the advent of indigenous independent operators in Nigeria’s oil exploration space. AMNI International Petroleum Development Company Limited that was founded in 1993 by Chief Tunde J. Afolabi is one of the independent companies that braced up to the challenge. Its Oil Mining License (OML) 112 eastern Obolo, south-south Nigeria has sprouted beyond the founder’s imagination. No doubt, the burgeoning success is attributed to Afolabi’s hard work. Chief Afolabi often remarked, “There is no short cut to success, it is hard work. This is my 45^th year in this industry, I started working for Texaco in 1973, so 45 years is not a leap frog, they are calculated, methodical and determined years of my life to get from point A to where I am today.”

The man behind the vision took bold step to found the company as its twenty-fifth year anniversary was celebrated in Lagos. The twenty-fifth anniversary of AMNI was attended by former Directors and Vice Chairman of the company, oil and gas experts, and eminent personalities among others.

It was a celebration of a vision that a man had not just to place Nigeria on the world map but to put Nigerians who run independent oil and gas companies on the world map as well. It was twenty-five years of good corporate governance, continuous hard work with dedication and proper asset management. Twenty-five years of continuous production, engaging host communities in such a way that the host celebrate AMNI presence in their respective communities.

Astoundingly, neither has AMNI suffered any hostility nor vandalism of its facilities, it remained one of the oil companies that has never had issues with its host. The company has had good relationship with its host communities and to demonstrate that relationship the kings of two host communities graced the twenty-fifth anniversary, their Royal Majesties, Harry John Etetu, from eastern Obolo and Okuruket, Nabiget the 16^th, JP Okonama Ngo of Andoni including other chiefs.

AMNI has also extended its tentacles to Ghana and the country’s president was represented at the event while it also seek possibilities in other countries going forward.

Group Managing Director of AMNI, Wale Olafisan, said the celebration was to give thanks and glory to God for his resources and sustenance of the independent oil company.  

Some members of staff who took their turns to speak expressed gratitude concerning the success of the company which by extension has transformed their social-economic well-being.

It is not a gainsaying that behind every successful man, there is a woman. Oluseyi Afolabi is the wife of AMNI’s Chairman. The woman of substance is believed to be one of the brains behind AMNI owing to her vast knowledge spanning over thirty years in the oil and gas industry. Oluseyi is a retired Executive Director of ExxonMobil, a renowned IOC. In her words, “We can only say thank you Lord! Thank you Lord!” An elated Oluseyi used the occasion to express appreciation to God for his miraculous intervention in 2018, “God Almighty our maker, who is a perfect arranger answered our family twenty-four year old daughter.” Reading Psalm 103, a passage of the Bible to the audience, she revealed God’s mercy and favour to the family. She testified of the gift of love that God gave to the Afolabis. Gbemisola Afolabi had a sickle cell which was a concern to the family after being diagnosed by a doctor. At present, her genotype has changed from sickle cell to AA and will soon graduate as a Geologist from the university. This was a delightful news for the family that also chose the twenty-fifth anniversary to show gratitude to God as it coincide with the occasion.

Giving his remarks at the twenty-fifth anniversary, Chief Afolabi, a Scientist and Geologist with outstanding experience is also a fellow of the Nigerian Association of Petroleum Explorationists (NAPE) and a Member of Federal Republic (MFR). The founder of AMNI worked with Texaco for some years. Chief Afolabi said, “The primary objective of this gathering tonight is to document in your presence all what God has done for us as a company in the last twenty-five years.” The secondary objective is to give platform to those in the audience who may wish to share with the family the miracles God has done for them by “Transforming our child who was an SS to an AA and she is about to get her degree now in Geology.” He submitted that the anniversary is also to recognize some of the people who have worked very hard in the last twenty-five years to take AMNI to where it is today. Some have excelled by contributing immensely to the development of the company. This will encourage others that if they work hard, they will also be rewarded.

As part of the twenty-fifth year celebration, awards were given to five years, ten years and fifteen years of outstanding service to dedicated staff. While twenty-five years of meritorious outstanding, loyal and committed service award was given to Adebayo Dahunsi.  Ecstasy and jubilation filled the hall as Dahunsi came to the podium to receive his award.

Chief Afolabi revealed to the audience that Dahunsi’s loyalty was extra-ordinary as he started with the company when it was operating in a room apartment that was demarcated in four parts at the Western House in 1992. He had a room from where he managed the company as a General Manager.

In his remarks, Dahunsi thanked God who has given “The Chairman, the idea of this company and appreciated him that God will keep AMNI by moving it forward.” The pioneer General Manager went spiritual and said the formation of AMNI is a source of joy to many people and the joy will never cease.   

  

THE CHALLENGE OF SUSTAINING LOCAL CONTENT DRIVE

L-R; Victor Sodje, MD, Newcross, NCDMB Executive Secretary, Simbi Wabote, Former ES, NCDMB, Ernest Nwakpa and Toyin of Shell and Bank Okoroafor

At the 8^th Practical Nigerian Content (PNC), which was hosted by the Nigerian Content Development and Monitoring Board (NCDMB), the Executive Secretary of the Board, Engr. Simbi Wabote, gave an overview of his vision for Local Content. He spoke on some of the challenges in the industry in terms of driving local content to the next level. The Board intends to achieve its objectives and it is at the right path of it. One of the challenges of the Board is continuity of planned projects.

Wabote recalled when the Act was drafted that the NCDMB team travelled to Brazil to have view of how it was driven in the country. The country demonstrated the array of projects that it has for the next ten years in developing local content. The projects were not fictitious ones. The country knew when those projects will be executed such that the drive was sustained. This enables investors and financiers to invest because they saw the opportunity. Wabote noted that “The greatest challenge I think we are facing today in the country, is the continuous stream of projects in the oil and gas sector.” He said, Egina FPSO has been sailed to its destination and production will soon commence, but “The question is all these capacities that we have built, the likes of SAIDEL, EWT, SAIPEM, AVEON, if you visit those yards which I have done personally, you will see that there is indeed a significant change in terms of where they were and where they are today.” He asked, “Where is the next big project to occupy those yards.”

He reiterated on projects like Zabazaba, Bonga west, proposed Train 7, Perewei and Ikike of Total, these projects should have embarked upon to keep the local content drive alive. He decried that the country is still struggling in terms of sanctioning those projects. This is a key challenge for the industry, investors and those who have developed capacity.

The ES also spoke on sectorial challenges in terms of assisting to sensitize the process of other sectors of the economy to key into the local content drive. Most people who intend to set up shop in terms of manufacturing, need incentive which the law provides such as tax holidays and financial incentives. It is always a struggle to get other agency of government to agree to a common drive. This is a big challenge for the Board.

NCDMB still battles with fund. This is a huge one and the Board has endeavoured to create a $200 000 000 fund to help local vendors and finance them as well. A major challenge is that those who could have access to the fund are leverage to banks hence it becomes difficult to get bank guarantees to be able to assess the fund. Fund is a challenge to operators because loan were gotten from the banks when crude oil was more than $100 when it fell to $27 a barrel, they were affected by the unfortunate circumstance. In 2019, NCDMB will re-model the finance structure in order to support local businesses in the country.

Simbi opined that the infrastructures in Nigeria which includes power and road networks pose a serious challenge. Power challenge and poor road network hamper progress of work with additional days. This has potential to escalate cost as well. These challenges hinder local content agenda to progress beyond where it is.

Notwithstanding, there are key opportunities for continuity. Wabote commended his predecessors and laudable projects they left behind were being improved. This is a boost for the Board. He said the Board has been led by professionals who have improved its standard despite challenges.            

Giving his perspective on Local Content, General Manager, Conventional Oil and Gas Projects, Shell Companies in Nigeria, Toyin Olagunju, extolled knowledge transfer and some assets being divested by the IOCs. In-country manufacturing has been a good journey and it is accelerating very fast with Egina achieving over 70% of Local Content in terms of manpower and local production of chemicals and human capacity. The eighty years of Shell in Nigeria has been prolific not just for oil and gas but producing of talents. Shell has trained a lot of talents and build local capacity that have transcended the oil and gas industry in Nigeria with almost 90% of different Shell trained personnel. This is the contribution Shell has brought to the nation. In his submission, “People who have worked and trained in Shell that are outside the company are more than those presently in its employ. Shell will continue to build and improve on this positive gesture. 

One of the groups that has helped in supporting practical content in the industry, is the Petroleum Technology Association of Nigeria (PETAN). Chairman of PETAN and also a governing member of NCDMB Board, Bank Okoroafor, made it known that PETAN viewed the achievements of the NOGIC Act including the definition of the objectives which is to develop Nigerian Content in the Nigerian oil and gas industry.

PETAN bears in mind four ‘Gs’ of Local Content which include the growth in the number of Nigerian owned asset and equipment. For instance, in rigs, at present there are companies like Oando Energy Services owning rigs, also there are UNITA, SVF among others that owned assets. It is an experience that never existed before the NOGIC Act. There are indigenous marine vessels such as PETROLOG, STARZS, MARINE PLATFORMS including other companies that were no where in sight before the Act. The second G is the growth of Nigerian Service companies. Before the NOGIC Act, there were only twenty seven indigenous owned companies operating in Nigeria but now the number has risen to two hundred and eighty-seven companies operating in Nigeria. The belief was that indigenous companies had no technical knowledge to involve in the industry.

The NOGIC Act is strategy formulation with strategic execution hence NCDMB and its management has brought change management. The third G is the growth in the value of goods sourced within the country. Formerly, pipes were coated either in China and elsewhere to Nigeria. According to Okoroafor, because of “The NOGIC Act, we have the pipe coaters and many of the companies in Nigeria coating pipes, this used to done outside the country.” There are pipe mills and the NOGIC Act is working, “If anyone says the NOGIC Act is not working that person does not have the fact.” The fourth G is the growth in the number of trained Nigerians. Before the Act, less than five hundred thousand man hours of training were skeletal. Surprisingly, at present more than six millions man hours of training are done in-country.

Compliance and enforcement have been on positive note. For instance, during the construction of Usan, in-country training was one hundred and fifty thousand man hours but during Egina FPSO, it was four hundred and fifty thousand man hours. Engineering in Usan was four hundred thousand, while that of Egina, one million, one hundred and sixty-seven thousand. The key aspect of the engineering works was that there was collaboration between indigenous companies and their foreign counterparts. Local companies were fully involved in the process which has never happened.

Okoroafor commended Total for working with NCDMB ensuring that the NOGIC Act is enforced and complied. There are new facilities built across the country manned by qualified Nigerians with full yard certification.

Basically, before the NOGIC Act and the Act itself, a lot have been achieved, “But a lot more needs to be done.”            

 

TOTAL: THE DRIVING FORCE FOR LOCAL CONTENT DEVELOPMENT IN NIGERIA

                                                     Nicolas Terraz, Total MD

Total, as an International Oil Company (IOC), did the unusual by projecting Nigerian Content Act through the Egina FPSO that was fully integrated in Nigeria. At present, Egina has become the darling of the oil industry in Nigeria owing to its immense value and creation of job opportunities for indigenous oil companies. The project which startled industry operators including other multinationals, is believed to be a leading light for the Nigerian Oil and Gas Industry Act (NOGIC)

In his industry address at the 8^th Practical Nigerian Content (PNC) Forum. Managing Director of Total, Nicolas Terraz, opined that as a key industry forum, PNC has over the years, provided a very important platform for key government functionaries and stakeholders in the Nigerian oil and gas industry, to brainstorm and proffer practical solutions to drive the attainment of collective and national aspirations for developing local content across the Nigerian oil and gas value chain.

The Total boss said, since its establishment in 2010, the Nigerian Content Development and Monitoring Board (NCDMB) has successfully created the push and motivation needed for business continuity in-country and recorded some impressive and continuous improvements in all facets of oil and gas operations.

For instance, under the leadership of the NCDMB, the industry has evolved a practical framework for the implementation of the NOGICID  Act which has its 8^th anniversary in 2018. According to him “With other stakeholders, we have successfully aggravated a sizeable fund – the Nigerian Content Development Fund (NCDF) – running into several millions of dollars, for collective strategic capacity development interventions.”

Total has long been part of the drive to develop local skills and capacity in the industry. The steady increase of the percentage of total man-hours worked in Nigeria for its deepwater projects like Akpo which recorded 44%; Usan 60% and Egina project took it to a whole new level by achieving 77%

Terraz revealed that when Egina project was launched, there was a bold decision made with regards to the integration of some key components of the FPSO in Nigeria and this has had a very significant impact on the development of local competencies. The arrival of the 330- meter long FPSO in Lagos for integration of the six topside modules at the SHI-MCI Yard, Lagos, before its final sail away to the Egina field has changed the game as far as the execution of deep offshore oil and gas projects in the country is concerned.

The project gave room for a world class facility with a 500-meter FPSO integration quayside that was constructed at the newly built SHI-MCI Yard on LADOL Island, changing the activities possible in-country because, before now, this was not possible in Nigeria. Six topsides of the Egina modules of the FPSO have successfully integrated in Lagos and the company is proud of this achievement.

During the Egina development phase, the project brought in many first-of-its-kind developments to the oil and gas project infrastructure available in the country.

In addition to the integration quay and new yard facilities, several other existing fabrication facilities, such as Aveon Offhore Yard, EWT, SCNL and PCNL, all in Port Harcourt, saw a facelift and expansion in their respective capacities. Other yards like Nigerdock and Dormann Long were assigned significant parts of the local content scope on the project.

There is also the GNI Automation facility in Ikeja Lagos where several components of the Integrated Control and Safety System (ICSS) were fabricated and assembled. These local companies have increased their capacities and expertise, thus ensuring retention of billions of dollars in the Nigerian economy.

Terraz added that over 24 million man-hours would have been spent in-country at the end of the project phase and this translates into direct employment for a large number of skilled and semi-skilled personnel, as well as in-direct employment.

As a matter of fact, in a few weeks, Total’s Egina project will add another 200 000 bopd, which is approximately 10% of Nigeria’s current production. This will significantly increase the income accruing to the Nigerian economy.

Apart from the Egina project, Terraz said Total also has established CSR initiatives in Nigeria with many also geared towards capacity building. The company ventures beyond its immediate areas to operations and its host communities to include other parts of Nigeria.

On the aspect of education, Total scholarships at all levels: primary, post-primary, and post-secondary, and this includes national and international scholarships for some categories with over 50 000 beneficiaries since inception.

The company has also invested in the establishment of world class training facilities, Research and Development centres of Excellence including the Institute of Petroleum Studies (IPS) at the University of Port Harcourt. IPS is sponsored by NNPC/TEPNG Joint Venture and in partnership with the Petroleum school in France, the IFP, it has produced more than 506 world class graduates since inception. Statistics show that employment rate of these graduates is at 96%, testifying to the international standard of education they receive.

Another programme sponsored by Total is the MIT-Empowering The Teachers fellowship to boost capacity of lecturers from local universities in Nigeria. over sixty professors from Nigerian universities have been sponsored to Massachusetts Institute of Technology (MIT) in the US since 2010 to acquire new teaching methods and facilitate the development of new curriculum and approaches to problem solving and entrepreneurial skills.

Other capacity development schemes include training of youths in various skills. Over 1000 youths are trained annually and those trained are supported with starter packs to enable them establish small and medium scale businesses, thereby boosting the local economy while also improving livelihoods.

While these achievements are remarkable, as the company makes progress on its Nigerian Content Development (NCD) journey, the authorities and key players of the Nigerian Oil and Gas industry need to work together to achieve even more significant legacy projects that are consistent with its NCD objectives.

The Memorandum of Understanding (MoU) signed in 2018 between the NCDMB and OPTS on Service Level Agreement (SLA) is a demonstration that the company can sustain existing collaboration between regulators and other government authorities that affect stakeholders on issues of Nigerian Content performance.

It is believed that the Total story will continue to be a foot hold in Nigeria’s history for a long time.

SEPLAT WINS 2018 PEARL OF THE NIGERIAN STOCK MARKET

Seplat Petroleum Development Company emerged the 2018 overall winner of PEARL Awards capital market prize at Nigeria’s leading capital market awards ceremony “The Pearl Awards”. This event well attended by stakeholders in the Nigerian financial and capital market held recently in Lagos.

The company was recognized for its contributions and performance in the Nigerian Capital Market. It was an award galore with the company carting away four awards in the three main competitive award categories. The company won one award in the Sectoral Leadership Awards and two in the Market Excellence Awards becoming the overall highest award winner. As a result, Seplat won the coveted ‘The PEARL of the Nigerian Stock Market 2018’.

According to President and CEO of Pearl Awards, Mr. Tayo Orekoya, the theme for 2018 edition is “Sustaining the Winning Edge”. ‘This is in realization of the need to recognize and reward companies that, despite challenges in operating environment, local and international, have continued winning edge, outperforming others and emerging leaders, deserving of honour in our capital market.’

He affirmed that PEARL Awards instituted in May, 1995  has since inception and to date, been guided by the principles of fairness, transparency and objectivity in its selection process and this scientific approach in determining nominee companies remains unassailable. This attribute earned the Awards endorsement by the apex capital market regulatory authority, the Securities & Exchange Commission 15 years ago.

In receiving the numerous awards, Austin Avuru remarked that while the company celebrates this prestigious honour and recognition as testament to its laudable achievements over the years, the company remains committed to achieving more for its sector and the nation.

MAXIMIZING NIGERIA’S DOMESTIC ENERGY CONSUMPTION DESPITE PRICE VOLATILITY

                                                         Austin Avuru, Seplat, CEO

Oil price volatility means a lot for operators at all levels including the country at large. Stakeholders believe that in 2040 the oil and gas industry will be insignificant but there is sharp rise in renewable and gas production. Assessing combination of oil and gas, it still accounts for about 50% of energy mix hence there is still hope for the industry. Fifteen years ago there have been some changes in terms of production in the industry.

Expressing concerns about price volatility, Chief Executive Officer of Seplat, Austin Avuru, said at present, technology has brought solution into the oil industry. Tight oil and gas is the introduction of technology into energy mix given the right price regime to supplement conventional oil and gas. In his words, “If we didn’t have tight oil and tight gas today, probably oil will be $200 per barrel, so what you see is a supplementary volume coming from the application of technology to curtail prices.”

Avuru was of the view that independent operators in the oil industry, from 2010 to 2015 lent money to buy assets and do same to keep them. Seplat financed its debt with $1 billion to keep its assets in February 2015 when oil price crashed. According to Avuru, “It is a miracle that we were not wiped out from the surface of the earth, all the private operators.” Some independents are still struggling as a result of the ugly situation the industry found itself then. The oil majors survived because they have resilience and could adapt to any challenges in the industry. They used Capital Expenditure (CAPEX), for adjustments.

Oil crash affected Nigeria and the country’s economy went into recession. The cause of recession has nothing to do with fiscal regime but because production was low coupled with crash in oil price. The crash affected exploration and investments. When exploration and CAPEX drop, other circles for the next three years will feel the impact.

The Seplat CEO explained that oil and gas account for about 90% of Nigeria’s foreign earnings, 80% of government revenue and 60% of government tax receipts. When there is crash in prices, 90% of foreign earnings will be reduced by half. In the same vein, when production and oil drop below budget price, it will have adverse effect.

Avuru dissected Nigeria’s economy which picked up by 2.4% negative GDP growth, in July 2017, it improved minimally while the country still struggles with about 2% GDP growth in 2018 and it is expected to improve in 2019 with about 1.9%

He explained further that in price volatility regime, there are key things to consider for survival either as a country or as a company. There is need for financial resilience. Avuru said Seplat has learnt its lessons, “Never again do we get to a point where we can’t pay our vendors, contractors, we have to risk payment and every other thing.” The company managed its balance sheet to key cash position. He advised oil companies to draw a line for a certain cash reserve decision in the balance sheet and tune all CAPEX spend. The Chief Finance Officer takes care of this aspect while there should be time frame for the implementation.

In terms of operational activities, there is need for resilience, a culture which Seplat has imbibed in all its wells. According to Avuru, Sepat portfolio resilience also kept the company at bay. This saw the company throughout its difficult period when for sixteen months, “Seplat could not export oil through trans-Forcados.” However, the company survived through gas production. It produced 200 million scoff of gas, and about 10000 barrels of associated condenses hence “Portfolio resilience is important so that you can tune and make adjustments as to where the revenues will come from.”

The Seplat boss opined that confidence is gradually returning into the oil and gas industry after major upset due to price crash. He said about 32 sanctioned projects have been executed and by the end of 2018, there will also be another 30 FIDs which was down to 7 and it rose to 10 projects from 2015 to 2016. Indeed, there is confidence now in the industry as projects are being sanctioned.

There is a paradigm shift for Nigeria to use its gas resources not as a rental revenue agent, but as an enabler for business and bigger economic growth. Avuru noted that a nation is as large as how many energy it consumed, “When you produce 8.9 billion cubic feet (bcf) a day and only 9% of it is consumed domestically, it says a lot of how our economic looks like.”  He stated further that countries with largest GDP per capita are also the largest energy consumer per capita.

As a country and as an economy “Our aspiration, beyond just increasing our oil and gas production, should actually be to maximize our domestic energy consumption,” Avuru averred. This is the crux of the matter and what will expand the economy of the country, not just receiving 25 to 30 billion dollars yearly as oil revenues through foreign earnings. 

On power generation, Avuru pointed out that Nigeria’s gas production should have gone up from 1 bcf a day where it is currently to 12 bcf in 2020, unfortunately, the country has not been able to attain this feat. The ailing power sector with minimal distribution is responsible for this, by 2020, Nigeria is supposed to be delivering 15 Megawatts (MW) per day, at present, the country distributes and transmits 3700 MW. In fact, in the past four months, due to heavy downpour hydro stations have increased power generation from average of 700 MW to about 2000 MW. This is capable to increase power generation to about 5000 MW, the thermal stations have been mandated to reduce production by half because only 3700 MW can only be distributed.

The power sector is still hovering around where it was four years ago domestic gas consumption has not gone beyond 1 bcf per day. Ultimately, the country needs to get to the point where it will be generating 40 MW because of its teeming population while consuming 12 bcf of gas a day. Avuru said, “That is the aspiration.”

The aspect of refining has remained in retrogressive state. The refining capacity remains low for the past fifteen years. The country will be unable to manage its refinery due to its current ownership structure unless the government takes decisive action and do the needful. The journey may be a little longer and the 2019 vision has been shifted to 2021 for refinery progression. But, ultimately, the additional 650 000 barrels private sector financed built refinery will augment the country’s existing refineries. Hopefully, the government will sell its refineries to private investors in order to boost production domestically with other private driven concerns. The aspiration of refining domestically will definitely be achieved by 2023 to 2025.

Avuru stated thus, “If we then get to that point when we are doing 5 bcf gas to power and supplying gas to heavy industry, cement, agriculture, fertilizers, petrochemicals out of our gas production with of 1.2 million barrels per day and gas distribution network that is functional and effective, what the country needs to do is just pay attention to its transportation particularly rail and water.” This is not rocket science, it is something that can be done by the government. “If it is done in four years, the country’s GDP will be doubled in eight years.”

Speaking optimistically about the progress of Seplat, Avuru said the only competitors that the indigenous company has in its domestic gas processing and distribution business, are other independents like it. Seplat is in one hub in the west of Oben, and between its plants in Oben and Sapele, the company has a processing capacity of about 520 million scf capacity of gas a day up from 16 million scf when it took over the asset in 2010. Seplat supplies one third of gas to power in Nigeria. It was 400 scf but in June, 2018, the company has been producing between 189 to 210 million scf because the thermal plants are not taking gas.

Avuru revealed that the problem of power in Nigeria is not due to non-availability of gas rather gas is not been taken from gas companies. The company produces half of its production. Seplat is proposing a Jiont Venture with NNPC to build another 300 million scf in the Southeast including other satellite plants. The company is part of the gas to power story in Nigeria. Avuru stated that operators can build necessary operational and financial resilience with proper planning, if oil price drops due to fluctuations, companies can still be doing business in the country. For instance, multinationals have been producing oil in Nigeria for the past sixty years and price fluctuations have never kept them out of business. He advised operators that oil price fluctuations should be seen as part of the risk of business, “And your job is to manage that risk and not to be affected it.” 

Indeed, the Seplat story in times of price volatility is a positive one for oil operators either marginal or major to learn from its experience and how it survived from a near collapse.

       BARU LAUDS SAUDI ARABIA FOR CRUDE OIL OUTPUT CUT

L-R, Mr. Pious Akinyelure (NNPC Board Member), GMD NNPC, Dr. Maikanti Baru, Mallam Mohammed Lawal (NNPC Board Member) And Dr. Mahamud Isa-Dutse (NNPC Board Member) at the 2018 ADIPEC in Abu Dhabi.

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he Nigerian National Petroleum Corporation (NNPC) Group Managing Director, Dr. Maikanti Baru, has commended Saudi Arabia its recent decision to announce daily crude oil production cut by one million barrels per day from December this year.

Dr Baru, who disclosed this while speaking at a Global Business Leaders Panel Session on the sidelines of the 21st Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC), held in Abu Dhabi, United Arab Emirates, yesterday, stated that the move would significantly stabilize the energy market.

The Group Managing Director (GMD) of NNPC stated that given Nigeria’s production constraints, it is important that oil price does not fall below $70.

He said: “We need price stability and we want to acknowledge the good gesture by Saudi Arabia.”

Dr. Baru disclosed at the panel discussion that NNPC would deploy cutting-edge technology to enhance its operations and maximize value across its businesses value-chain.

The GMD, who joined other global CEOs on the panel to discuss: “Creating forward-thinking strategies, supporting upstream operations and market diversification,” shared NNPC’s drive to use technology to deliver Nigeria’s future energy needs in line with anticipated global demand and population growth.

According to him, the corporation was working towards utilizing technology for early detection of pipeline vandalized spots and quick response systems which would significantly save cost, reduce potential fatalities and safeguard the environment.

“In terms of refining, digital technology will help us get more out of our crude which will mean getting the highest yield from our plants. We also need to utilize digital technology from the contracting end which will lead to improved designs in constructions thereby reducing cost and time,” the GMD noted.

Baru said the Oil and Gas Industry was mostly driven by technological improvements and environmental concerns, a development which has resulted in the changing dynamics in the global energy mix.

He observed that while crude oil (which is still dominant) is projected to grow at a declining rate by 2040 favouring growth in natural gas, renewable energy in the longer term would account for 40% of increase in total energy demand by the same year.

Dr. Baru said in its efforts to survive in the long run, NNPC would require strong investment and commitment to technological research and development even as he noted that corporation would continue to leverage on intelligent use of big database to expand its businesses.

He said as the industry grows, International Oil Companies (IOCs) and National Oil Companies (NOCs) must be ready to embrace new technological initiatives as a means of offsetting expense escalation and furthering the cost and efficiency improvements they have already achieved.

In a related development, the NNPC Chief Operating Officer Downstream, Mr. Henry Ikem-Obih said the NNPC was ready for business and that Nigeria would keep up with the technological advancements within the global oil and gas industry.

Ikem-Obih who also spoke at the ADIPEC Conference’s separate panel on the various businesses across the downstream value-chain said NNPC’s current approach was to see the Downstream Sector as an integrated part of the Oil and Gas Industry.

He said competition within the Downstream Sector does not scare NNPC as the Corporation boasts of tremendous advantages over its peers.

The ADIPEC is an annual global oil and gas event where latest innovations and technologies in the global industry are showcased. This year’s edition, which was held under the theme “shaping the future of the world’s oil and gas industry,” was attended by a record 110,000 oil and gas professionals from across the world.

GPPS SHOWCASES NIGERIAN INDIGENOUS CAPABILITY, UNVEILS OFFICE COMPLEX, OPERATIONS BASE

                                                              GPPS Workers

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ith local private involvement in the oil and gas sector of the national economy on the rise, Global Process and Pipeline Services (GPPS) Limited, wholly Nigerian Management owned company, is set to unveil its new office complex and operations base in Port Harcourt as it broadens its reputation as a frontline oil services company, showcasing Nigerian indigenous capability on land, swamp and offshore terrains.

The new office complex and operations base due for commissioning on the 30th November 2018  in Port Harcourt  Rivers State South-South Nigeria  according to Engr. Obi Uzu, the company Managing Director, will further enhance GPPS operational efficiency for a superior service quality delivery in line with the highest industry standards and best practices and in accordance with the tenets of ISO 9001:2015 with attestations pouring in for the young and dynamic company from such giants like Exxonmobil; Total, NLNG, Shell Companies in Nigeria just to mention a few.   

“GPPS uses the best of equipment to offer services such as pipeline cleaning, de-oiling, hydro-testing, pipeline de-watering, drying and nitrogen services to the oil, gas and power industry. She is also involved in pressure pumping, nitrogen pumping, fluid pump support, lube oil flushing and high pressure water jetting and blasting services”, said Obi Uzu, who has more than 26 years oil field experience in drilling operation (Sedco Forex), production technology (SPDC) and process and pipeline services (BJ Services) and supervised many successfully projects in Nigeria, America and UK.

“Our new office complex and operations base will further enhance our partnership with our clients to develop and maintain long-term relationships that adds value to their projects. Our dedicated teams are experts in our line of business with a track record of safely and efficiency in executing complex projects in challenging environments. Change is constant and that is why we are sensitive and flexible in responding to our clients’ demand; leveraging on the full strength of our brand, differentiated new equipment fleet and technical know-how”, Uzu added.  

GPPS is the only Nigerian company focused solely on process and pipeline services with major projects completed in the deep-water applications in her product service line and has attracted the best hands in the industry from the multinationals to work for her with an expansion plan into other West Africa and Sub-Saharan Africa countries.

“We use the most fit for purpose equipment on all our projects. Anyone can hire equipment but using GPPS equipment means reliability, efficiency, deliverability based on the best in-class industry preventive maintenance standards.  Our most important asset is our people and we value them and their skills highly. They are central to our success and as such we build our business around a valued and motivated workforce”, said Chamberlin Duruike, Executive Director Operations, GPPS.

“We have an established competency programme which aims to ensure hands on and classroom trainings for improved safety and enhanced efficiency with our personnel,” Duruike added.

GPPS is a success story of indigenous specialists coming together to form an enduring partnership in the oil and gas service sector. The company’s infrastructure comprises of a head office facility in Port Harcourt including workshops, and a sales office in Lagos with a staff strength of over 50 employees and the largest selection of  brand new, high-end pumping capacity that meets the industry pressure and volume pumping requirements. 

POWER-FOR-ALL: RENEWABLE INITIATIVES AS ALTERNATIVE FOR POWER

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he problem of power in Nigeria has become a hard nut to chew for successive governments in the country with billions of dollars spent for the ailing sector to no avail. Experts in the energy sector have advocated for alternative means to nip the lingering issue in the bud so as to solve it amicably. Renewable initiative is seen to put an end to the burgeoning issue.

There are 621 million people in Africa who do not have access to electricity and $89 billion of petroleum is exported by Nigeria in 2013, yet 93 million Nigerians have no access to power. The attendant cost of using kerosene and wood by rural dwellers have killed about 600 000 people in a year.

Addressing journalists recently in a media training, organized by POWER-FOR-ALL in collaboration with ALL ON which is supported by Shell, Ifeoma Malo, explained the role of the organization to assist the country especially in rural areas to have access to electricity. 

Ifeoma who is the Country Director of POWER-FOR-ALL initiative said, the organization is focusing on market development because it is not a problem for government to solve alone including developers and distributors. Others are media and communities of practice which include civil societies, donor communities and trade organizations that are going to work together to get electricity access to everyone.

POWER-FOR-ALL is in five focal countries with twelve partner countries as well. In these countries there are staff and offices while the organization work with other partners in collaboration with companies that are involved in what it does to achieve the same objectives.

It works with NGO, consumers, policy makers, utility companies, Distribution Companies (DisCos) among others in order to ensure that electricity is being accessed. The POWER-FOR-ALL initiative gives attention to women since electricity impacts more on them. They are usually involved in Small Medium Enterprises. Taking electricity to communities and rural areas, those who feel the impact have to be carried along in the process.

As part of its yearning for electricity in Nigeria, the organization embarks on specific project, it sets up Renewable Energy Association of Nigeria (REAN) in 2016. It gave strategic support and governance including working processes of REAN. Ifeoma disclosed that Nigeria Renewable Energy Round Table (NAIRA) was also launched in 2017, by Vice President, Yemi Osinbajo. She said there is need for a round table to define what the private developers in the sector that need specific market data should do. NAIRA will be economic and market focused for the sector.

To ensure that power gets to all, POWER-FOR-ALL embarked on faith-based initiative. “Electricity cannot be taken to rural areas without the involvement of religious institutions across the country. To have access into a community, this can be done easily through a church or a mosque because adherents have respect and regard for the clergy than government, Ifeoma added.” Access was made easy to communities through this process. This helped communities in terms of knowing what energy access means including a productive life.

Astoundingly, on access to energy across the globe, sub-Saharan Africa is the darkest. According to Ifeoma, “In the energy access map, Nigeria is darkest.” The Country Director of POWER-FOR-ALL initiative said, however, there is a part in Nigeria where electricity blinks for twenty-four hours in a day. The American University of Nigeria (AUN) in Adamawa state. It is affiliated with American institutions in Nigeria. The University neither depends on national grid or generator but a private developer known as Protegea took the school off-grid. Power is enhanced through solar distribution panels. Through solar backed-up power source, AUN gets twenty-four hours electricity. This is the vision for POWER-FOR-ALL.

Ifeoma noted that Nigeria is the biggest market for off-grid. Multinationals have seen the potentials in the country and are willing to invest and “There is a third wave of rush for off-grid technology business which has a semblance of the oil and gas industry.”

Therefore, local investors should brace up to the challenge. Eighty-five percent of investment flow in terms of off-grid in Nigeria is from foreign investors.

Nigerian investors are not seeing the potentials in renewable sector which might be too late in the next three years owing to the wave of investments and solutions it proffers. In-country investments will lead to capacity building and creation of job opportunities. Renewable creates avenue for financial enhancement if the potentials are tapped and fully utilized by local investors.

Africa progress report shows that if Nigeria continues with grid-based power, it will take the country up to 2080 to achieve universal access to electricity. For instance, the Nigeria Independent Power Plants (NIPP) project that commenced during Obasanjo’s administration all through to Jonathans, it took the country years after three administrations to launch 11 NIPP plants that were gas powered. At present, not all the NIPPs are working due to shortage of gas. Definitely, grid will not solve the country’s electricity challenges. Depending on the grid, research shows that it will take sub-Saharan Africa up to 2080 to attain power.

Also speaking about the ugly development of non-availability of power, Mark Amaza, Lead Strategic Communication of POWER-FOR-ALL, noted that Nigeria is un-electrified in terms of power across the country with almost two third of the population out of power in rural areas. Even those that are connected to the grid have not experienced regular power supply while only twenty five percent have access to power daily. Some are connected to the grid without power while population rate is high as well.

Amaza was of the view that solar home systems offers solution to the country’s dwindling grid issues. Through solar systems some small scale businesses have been impacted and there are villages that are off-grid from power. People have been involved in self power generation through generators with huge financial implication to fuel generating sets. According to him, “Solar home systems being used by predominantly residential consumers have offered solution and saving Nigerians over N1.5 trillion.”

Recently, World Bank and Rural Electrification Agency (REA) organized a Mini-Grid Summit which is being held biannually by the World Bank. Global stakeholders and investors attended the event in December 2017 and $2.3 billion of which $150 million was set aside specifically for off-grid investment. This fund will be disbursed through the Rural Electrification Fund (REF) for the project. The objective of REA is to target 10 000 mini grid by 2023 which will be private sector driven. The idea behind the fund is to support the Electricity Reform Act which provides subsidy for rural consumers. The Nigerian mini grid is acclaimed to be one of the best in the world because it takes into cognizance where there is no existence of grid.

Mini grid gives strong protection to rural communities since they are involved in the process of a willing-buyer, winning seller approach. There are three off grid solution: mini grid, solar home systems and pico solars. 

Amaze pointed out clearly that financial and lending institutions in Nigeria have not yet come to terms with the country’s electricity system hence there is poor lending structure. Developers are using mix-up fund for the project. 

Although people have wrong perception over solar, but it works perfectly if the standardized ones are in place. For instance, solar system placed in some parts of the country have been working for the past twenty-five years and the solution still works. ALL ON partners with Standard Organisation of Nigeria (SON) to create standard for panels, batteries and solar products that are coming into the country should have a lasting solution. 

Amaze expressed optimism that part of the reasons and advocate for off grid solution is that it gives job opportunities. For every 1 megawatt of solar deployed, it creates about three thousand jobs, from the Technician, to the installer and administrative staff.

Renewable provides jobs for the country. The sector is fast growing with more than 10 watts of power is enough to light up a home rather than a candle or kerosene lamp. It enhances ancillary businesses and industries and it is affordable contrary to insinuations that it is exorbitant. Renewable is an alternative to candle and kerosene with health hazard. It is clean and cost effective.  

There is room for creativity, innovations and local developers control the sector. Investors, lenders local donors including financial institutions have potential business if they put the sector in consideration.