U P D A T E SMONTHLY BASKET PRICE

Feb-12 117.48

Dec-11 107.34

Oct-11 106.29

Aug-11 106.32

May-11 109.04

Mar-11 109.84

Apr-11 118.09

Jun-11 109.04

Jul-11 111.62

Sep-11 107.61

Nov-11 110.08

Jan-12 111.76

Mar-12 123.03

108

106

104

100Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Jan-12 Febr-12Feb-11 Dec-11

Daily | Weekly | Monthly | Yearly 122.57US

102

110

112

114

116

118

120

Continues on page 6

P\31P\12

Uncertainty heightensas SURE wobbles

Electricity consumers to suffer in the short term

Electricity consumers to suffer in the short term

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A Vanguard Monthly Review Of The Energy IndustryAPRIL, 2012VOL 03 N0. 35

Fuel subsidy probe report ready in 2 weeks

BUJA - Chairman of the

Nigerian House of ARepresentatives ad hoc

Alison-Maduekework or resign

COVER

OIL

FOCUS

FEEDBACK

Contents466

88

1111

1414 FINANCE

2

GAS1010

POWER1212

2020

COMMUNITY DEVELOPMENT

1818 INSURANCE

LABOUR

2929

Pirate attack: Nigeria named high risk area

Nigeria targets 3mt/yr. of steel

Electricity consumers to suffer in the short term

Afren expects 46,000b/d from existing assets

NEITI to conclude NNPC, others audit in October

Industrial unrest looms in power sector

2424

2222

Ogoni sues Shell in London over compensation

FREIGHT

2626 TECHNOLOGY

SOLID MINERALS

Sweetcrude is a publication of Vanguard Media Limited

Uncertainty heightens as SURE wobbles

Senate lambasts DPR over delay of gas projects

Salvaging economic risks through insurance

Biofuels: Production benefits and technology

Marine erosion threatens Bayelsa community

EDITORHector IGBIKIOWUBO

CORRESPONDENTS

Printed and Published byVanguard Media Limited.Vanguard Avenue, Kirikiri

Canal, P.M.B. 1007,Apapa.

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

PAGE LAYOUT/DESIGN Francis AYO & Johnbull OMOREGBEE

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Enquiries Call:08051100256

DEPUTY EDITORClara Nwachukwu

THE TEAM

MANAGER, MARKETINGUbong NELSON

Oil exploitation, the environment and crimes againstnature

hree month's after the introdu ion of thect 'Subs dy Reinvestm nt and Em o erm nt i e p w eProgramme' SU E, as result of the

R aTremoval albeit pa tial emoval of subsidy, it would

r rapp ar that he only thing that has underl ned its

e tiimplementation s 'uncertaint ' Government has

i y suddenly one quiet on it and indications are that g

the long queues and p oducts carcity that r scharacterized products supply and distribut on iprior to the partial removal still pre ails.

vIn 'focu ' we spoke with the managin director

sgof Afren, production and exploratio company

an which has shown a lot f romise with ust ined

o p s a growth, recording 173% g owth in profits despite rchallenges in ts Nigeria operations.

iWe have kept faith with verage of oth r

co espectrum of he Nigerian energy ch in including t

aoil, gas, eedback, insurance, power, insurance, f

finance, l bour, solid minerals, freight, technology a

and community d velopment, proving re ortag e

p eo these sub- ect rs o an unparalleled scale.f s o nIn keeping with our traditio o howcasing n f sNigerian companies t he 2012, Offshore

a t Technolog Confere ce, OTC, taking place in

y nHo ston, Texas, we h ve called o companies to

ua ntake due adv ntage f our partici ation to pl ce

a o p aadvertisements on their goods and services. Once ore, the Ni erian Content De elopment a d

m gv nMonitoring Boa d, NCDMB has part ered

rnSweetcr de for the purposes of i entifying and

u dsho ca ing indigenous compan es hich have

w s i wdistinguish themselves as 'Champ on of

edi sNigeri n Content,” at the OTC in Houston, Texa ,

asU S A .

Indeed we look forward to showcasing the

activities of compan es identified by the Board, as i

well as those who wish to be showcased at the event. Ple se note that in a bid to serve you better, we

ahave commenced streaming live reports of energy ews and inform tion. You can follow us on

na

.www.sweetcruder ports. me co

Kaztec Ad

4Cover Story

CONTINUES ON PAGE 5

Uncertainty Heightensas SURE wobblesClara NWACHUKWU

Government argued that it was pertinent to remove subsidy on petrol because it, “poses an unsustainable financial burden on the g o v e r n m e n t , c r e a t e s inefficiency in usage for consumers, disproportionately benefits the rich, and diverts critical resources from much-n e e d e d i n v e s t m e n t s i n infrastructure.”

After three months of i m p l e m e n t a t i o n , C l a r a Nwachukwu, writes that Nigerians are still wondering what the SURE programme is all about, and if they will ever benef i t f rom the ga ins promised by government.

Gains from SURE

The monies “saved” from the difference between the old pump price and the new one, which is N76/L X 35million l i t r e s n a t i o n a l d a i l y requirement makes a total of N2.67billion daily will be deployed to provide basic amenities for Nigerians.

By November 2011, the Federal Government had enunciated the Subsidy Reinvestment and Empowerment Programme, SURE-P, to cushion the effects of the removal of subsidy from premium motor spirit, PMS or petrol. For

this reason, the government gave Nigerians the rudest shock of their life by announcing the removal of subsidy from petrol on January 1 and the price of the product skyrocketed from N65/litre to N141, but was later brought down to N97/L following nationwide protests.

Government had expected to save more than N1.74trillion, being the sum spent to reimburse oil marketers for selling petrol below market p r i c e t h r o u g h f u l l deregulation.

A c c o r d i n g t o t h e Coordinating Minister of the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, ‘This programme ( S U R E ) i s a 3 - 4 y e a r programme designed to mitigate the immediate impact of the removal of fuel subsidy and accelerate economic growth through investments in c r i t i c a l l y - n e e d e d infrastructure.”

And to demonstrate its “seriousness” to actualise the gains of the programme, the government made additional provisions for some critical sectors of the economy such as infrastructure, education and health outside budgetary provis ions in the 2012 Appropriation Act.

Some of the projects and

allocations as announced by the Coordinating Minister of the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, are as follow:

?Works - about N46.5billion to be used to support a number of road projects including the Abuja-Lokoja Road; Benin-Ore-Shagamu Road; Port-Harcourt-O n i t s h a R o a d ; K a n o -Maiduguri Road as well as for the construction of the Second

Niger Bridge and Oweto Bridge.

? P o w e r - a d d i t i o n a l N155billion will go for power projects such as the Mambilla power plant, coal power plant and small hydro power plants between now and 2015.

?Transport - is expected to get about N20.9billion to support the Abuja-Kaduna and the Lagos-Ibadan railway line projects.

?Education - gets additional N24.6billion for vocational training centres.

?Health - to get N73.8billion for maternal and child heath

?Niger Delta - gets about N21.7billion to support the East-West Road, and,

?Water Resources –for a four-year period ending 2015, will get additional N205.5billion for rural water, water supply, and irrigation schemes and other water related projects.

Okonjo-Iweala maintained

that “These projects will not only significantly improve the country’s infrastructure, but will also create millions of jobs for Nigerians. This struggle is not between the government and Nigerians, because government is squarely on the side of the people.”

She argued that the fight on subsidy is “between the government and Nigerians on one side, and persons who are bent on continuing their age-long ‘milking’ of the system for their personal benefits on the other side.”

To be or not to be?

Ironically, no sooner did she beg to “support government’s efforts at defeating these persons, and creating a better country for all Nigerians,” than President Goodluck Jonathan was quoted as saying that the SURE programme was no longer realistic.

According to reports, the President allegedly told the 58th National Executive Committee meeting of the Peoples Democratic Party, PDP that the SURE was hurriedly conceptualised on the heels of the nationwide protest against the removal of the fuel subsidy.

It is uncertain why the president chose to declare the programme as hurriedly packaged, considering that the full policy document was dated November 2011

Accordingly, he said; “We are working on a new document

She argued that the fight on subsidy is “between the government

and Nigerians on one side, and persons who are bent on continuing

their age-long ‘milking’ of the system for their personal benefits on

the other side

Jonathan

5Cover Story

Uncertainty heightensas SURE wobbles

based on the reality, but we don’t want to promise what we will not achieve. Those who have it please withdraw it, we cannot realise the money that is stated therein, but we will still come up with a document based on what we get.”

Since Mr. President is now confused about the workability of the programme, he failed to tell Nigerians what becomes of the Dr. Christopher Kolade-led, Subsidy Reinvestment and Empowerment Programme Committee, charged with the responsibility of monitoring the disbursement of funds accruing from the partial petrol deregulation.

Other members of the committee include Major-General Mamman Kontagora (rtd) as the deputy chairman of the board, two representatives of the National Assembly, two r e p r e s e n t a t i v e s o f t h e o r g a n i s e d l a b o u r, o n e representative of the National Union of Road Transport Workers , one representative of t h e N i g e r i a U n i o n o f Journalists, one representative

CONTINUED FROM PAGE 4 of Nigerian women groups, one representative of Nigerian youths, one representative of civil society organisations, as well as the Coordinating M i n i s t e r o f t h e Economy/Minister of Finance, the Minister of National Planning, the Minister of Petroleum Resources, the Minister of State for Health, the Special Adviser to the Pres ident on Technica l Matters, and six reputable individuals from the six geopolitical zones in the country.

Kolade speaks

Speaking on his committee’s responsibilities, Kolade noted in Lagos that the committee had oversight function for only 47 per cent of the total funds accruable, while the larger portion of 53 per cent goes to t h e s p a c e a n d l o c a l governments.

For efficient and better management of the fund, he urged that the committee should be replicated at all levels of government from Federal to the state and local governments.

He insisted that it was necessary for state and local governments to put systems in place to ensure that the amounts that accrued to them were judiciously spent to win confidence in the programme.

He noted, “The Federal Ministry of Finance published the subsidy savings for January 2012 and how it was shared across the three tiers of government, the Federal Government got N15bn. If we continue at that rate, the m a x i m u m t h e F e d e r a l Government would get this year would be N180bn. So, if the intention is to ensure that the people, including those in the rural areas, feel the impact of the subsidy savings, we should

f ind a way to bui ld a partnership with state and local governments,” he said.

Indeed, the 36 states of the federation, the 776 local government areas and the Federal Capital Territory were e x p e c t e d t o g e t N411.03billion, N203billion, and N98billion respectively from the SURE proceeds, but neither the states nor local gover nments have sa id anything about their portions of the fund, which is meant to more on Nigerians in the rural areas.

He added that he had ordered consultants working for the committee to report any ac t o f co r r up t ion , and promised to resign, “if I find

that it is impossible to stand on probity, transparency and accountability.”

Policy somersault

So far, aside from the launch of the federal mass transit, nothing much has been seen of the SURE programme, a development that make Nigerians to believe that the programme might well be just another of the white elephant projects that was accompanied with so much fan fare, but not enough substance.

At the launch of the mass transit programme, approved t h e d i s b u r s e m e n t o f N15billion as a revolving interest-free loan to boost public transportation in the country. But some states listed in the pilot scheme have complained of lack of access to the fund

However, analysts believe that the SURE can still be salvaged, if only the Federal Government can priotise the execution of the projects.

T h e y a r g u e d t h a t N32.04billion per annum can still achieve a lot if prudently used, saying, “Government would have to priotise the projects in such a way that all the geo-political region would benefit from the programme.

“In the past, we have w i t n e s s e d l o p s i d e d development projects in favour of particular regions, but now to win back the people’s trust, President Jonathan must ensure fair play in the allocation of projects because of the complexity of the Nigerian system.”

For equitable distribution of the SURE resources, they noted that some projects planned for the year may have to be shelved, while some others would have to be restructured.

But they equally expressed concern over “the silence of t h e s t a t e s a n d l o c a l governments on the SURE programme. Knowing the states and local governments they would have cried out if they had not received their own share of the SURE funds, and since they have remained silent means that they have received the money, so they should let their people know what progeammes they have f o r t h e m , r a t h e r t h a n depositing the money into someone’s account to be generating interest.”

In spite of analysts optimism, Nigerians are worried about the turnaround of the policy as promised by Mr President, as they noted tha t po l icy readjustments takes forever in Nigeria, and if a new SURE document is being planned, then they may never be realized in the tenure of this administration.

Jonathan Diezani

For equitable distribution of the SURE resources, they noted that

some projects planned for the year may have to be shelved, while some others would have to be

restructured

Oil 6

igerian CONTENT INITIATIVECONTENT INITIATIVECONTENT INITIATIVECONTENT INITIATIVE

Dr. Ibilola Amao

Ogoni sues Shell in London over compensation

Th e B o d o

community, a f i s h i n g se t t lement in Ogoni, Rivers

State, have sued the Royal Dutch Shell in London court over “unpaid compensation for oil spills”.

This is the first time the multinational oil company is facing claims from the developing world in the UK for environmental damage.

Mr. Martyn Day of the solicitors Leigh Day - lawyers representing the community - sa id the sp i l l s had devastated a once-thriving fishing community of some 50,000 people.

He told the BBC’s Today programme: “I’ve been around Bodo on a number of occasions and you just have to walk round, it looks like a World War I scene, where the oil has totally destroyed m u c h o f t h e l o c a l environment and the fish, which particularly thrive in t h e m a n g r o v e s , h a v e basically disappeared from the area.”

In accepting responsibility for the oil spills, which happened in 2008 and one of which continued into 2009, Shell said they had been caused by operat ional failures

Shell also argued that much more oil has been spilt as a result of illegal activity in the N i g e r D e l t a , s u c h a s sabotage and theft.

It promised it would pay

compensation for the spills according to Nigerian law and would clean up the oil and restore the land.

The company is , however, yet to pay compensation to the affected community for the spillage of about 4,000 barrels.

o d o c o m m u n i t y Brepresentatives say they are resorting to legal action after negotiations for compensation broke down.

The head of Shell Nigeria said that with different l a w y e r s r e p r e s e n t i n g claimants it was difficult to resolve.

M u t i u S u n m o n u , managing director of Shell Petroleum Development Company of Nigeria (SPDC), said it was important to u n d e r s t a n d “ t h e complexities of the Niger Delta” when dealing with t h e s e c o m p e n s a t i o n payments.

“There are a lot of people who ’ve c la imed to be impacted and a lot of intra-

communal strife which is making it difficult for anyone t o h a v e m e a n i n g f u l negotiations with different lawyers claiming to represent them.

“We did do everything possible to make sure that we pay compensation to the affected communities, but we also have to make sure that this compensation is paid to the right people. The trouble is you cannot do that as long as different lawyers are representing them.

“Shell will not give up trying to identify those who should be compensated,” Sunmonu told the BBC.

The Ogoni people have long c o m p l a i n e d a b o u t t h e environmental damage to their communities, but they say they have mostly been ignored.

A U N e n v i r o n m e n t a l assessment of Ogoniland last year said the region would take 30 years to recover fully from the damage caused by years of oil spills.

Ogoni oil spillage

Bodo community representatives say they are resorting to legal action after

negotiations for compensation broke down

The “CAN DO” Spirit was elated by the acknowledgement of the Chairman of Jagal that the NigerDock staff must take a lot of credit for delivering the Abang and Itut platforms which was commissioned by no I

other than the President of Nigeria: His Excellency Dr. Goodluck Ebele Jonathan, GCFR on March 16th 2012.

“Made in Nigeria” Abang and Itut platforms are two platforms that collect the crude oil, water and gas from at least 10 wells, combine these fluids and sends them off for processing at their host platforms. The topsides consist of 3 decks and weigh approximately 800 tonnes each. The construction involved over 2.5 million man-hours without any lost time incidents, and that the impressive performance has earned the indigenous ship builder, a prestigious safety award by Mobil. The well coordinated event must have taken a lot of effort to coordinate and there were no recorded issues or any challenges (logistics, security, confirmation of guests etc. Quite an impressive attendance was recorded with ExxonMobil – the collaborative host, Chevron, TOTAL, SHELL, captains and leaders in the industry in tow.

I kept reminding the former GMD of NNPC, Engr. Funsho Kupolukun of the humble seed he had sown when he picked out Engr. Ernest Nwapa after his Chief Officers course and arising from a laudable presentation, to set up a Nigerian Content unit in NNPC. A journey of a thousand miles began with Engr. Nwapa’s first steps of trying to bring his indomitable and collaborative spirit to bear in ensuring that IOC, multinationals, indigenous players (private sector and public sector alike) come together in a give and take posture to ensure that Nigerian Content marches forward and records success after success. The NCDMB team have proven that a seed sown, if well cultivated can become a beautiful garden even before there appears a forest with time. All stakeholder in the industry have a very important role to play in ensuring that the Nigerian Oil and Gas Industry Content Development (NOGICD) Act is well implemented and we all aspire to achieve goals set in the schedules of the Act. The way forward is surely one of collaboration, coordination and cooperation. This is the fastest way to leapfrog from our agrarian activities and mentality into the ideas age. We must not despise humble beginnings but give our best at any point in time to ensure that we as a nation make progress. One other critical success factor in this regard is the continuity in government policies and pursuant of such to logical conclusion by successors.

We must also give credit to those who before us foresaw the need for knowledge and technology transfer and in 1989 signed the Nigerian National Petroleum Corporation (NNPC) / Bechtel Technology Transfer Agreement which birthed a National Engineering and Technical Company Limited (NETCO), from which many Oil and Gas leaders and professionals have emerged. Over 60% of the NCDMB team, the Group Executive Director (GED) Exploration & Production (E&P), Group Executive Director (GED) Refining & Petrochemical (R&P), Managing Director’s (MD’s) and General Manager’s (GM) of NNPC have at one time passed through NETCO as full-time staff or enrolled in NETCO for training and empowerment. My humble self served in NETCO as a Consultant between 1992 and 2003. Those were the years when we worked hardest and did our utmost best to ensure that technology and knowledge was acquired by Nigerians.

The clear message I took away from the ceremony apart from being “proud to be a Nigerian” was that success is inevitable if we can persevere with a “Can Do” spirit. Also, every little seed that is sown towards a better and greater Nigeria must be nurtured by all as a collective responsibility and that the greatest benefactors of doing things right are the masses who would have greater opportunities for employment and benefit from the creation of wealth that adds to the betterment of our great nation Nigeria.

We should also, look out for NigerStar7, a consortium of three

formidable giants (NigerDock, GlobeStar and Subsea7) who have

decided to collaborate and pull resources together intelligently to

record more successes that are made in Nigeria.

As, I congratulate NigerDock on a successful completion of the

ExxonMobil Abang and Itut platform project and the laying of the

foundation of the Skillsbase, I pray that more good news comes

from the FTZ and it experiences a brighter future, especially for the

well deserving staff.

Oil 7

NNPC, Nigeria Police partner on pipeline vandalism As IGP establishes Police Anti

Pipeline Vandalism SquadOscarline ONWUEMENYI

AB U J A - T h e

Management of

t h e N i g e r i a n

N a t i o n a l

P e t r o l e u m

Corporation, NNPC and the

leadership of the Nigerian

Police have pledged to join

forces in combating the

menace of pipeline vandalism

and security threats to key oil

and gas facilities currently

endangering the smooth

operation of the petroleum

industry.

This resolution was arrived at

after a meeting between the

Group Managing Director of

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

Petroleum Corporation, Engr.

Austen Oniwon and the Acting

Inspector General of Police,

Mr. Mohammed Abubakar at

the Louis Edet House in Abuja.

In his presentation, the

NNPC GMD reeled out the

alarming cases of pipeline

vandalism across the country

as well as the growing

instances of attacks on

operational staff of the

Corporation which is posing a

massive threat to the operation

of the oil and gas industry at

the downstream and upstream

sectors.

Oniwon revealed that the

advent of illegal bunkering,

pipel ine vandal ism and

product theft has massively

impacted on the capacity of

Nigeria’s massive oil and gas

assets to function optimally,

even as he called on the Police

to assist the NNPC in the push

to eradicate the intractable

incidence of encroachment of

pipeline right of way which has

o v e r t i m e a s s u m e d a

frightening dimension.

Oniwon explained that

though the combined working

capacity of all the 21 Pipelines

and Product Market ing

Company (PPMC) depots

nationwide, excluding holding

capacities at the refineries, can

provide products sufficiency of

up to 32 days for petrol, 65 days

for kerosene and 42 days for

diesel, the activities of the

pipeline vandals have made it

impossible for the facilities to

function full blast. acked with data to Bbuttress the point, the

NNPC GMD informed that a

total of 16,083 pipeline breaks

were recorded within the last

10 years adding that while 398

pipeline breaks representing

2.4 per cent were due to

ruptures, the activities of

unpatriotic vandals accounted

for 15,685 breaks which

translates to about 97.5

percent of the total number of

cases.

Ac c o r d i n g t o r e c o r d s

o b t a i n e d b y o u r

correspondent, the System

2E /2EX which conveys

products f rom the Por t

Harcourt refinery to Aba-

E n u g u - M a ku r d i d e p o t s

onwards to Yola-Enugu-Auchi

appears to be the haven of

pipeline vandalism in the

country particularly the Port

Harcourt-Aba/Isiala-Ngwa

axis.

In all, 8,105 breaks were

recorded along the system 2E

within the period representing

about 50.3 percent of the total

number of petroleum products

pipeline breaks in the country.

The attacks left the NNPC with

a cost of N78.15 billion in

product loses and pipeline

repairs.

The System 2A product

pipeline route which conveys

products from Warri-Benin-

Suleja/Ore depots ranks second

on the scale of pipeline break

points with 3,259 cases

representing about 20.2 percent

of the total volume of products

pipeline breaks in Nigeria. The

figure also came with a loss of

over N20.39 billion in products

and pipeline repairs.

The System 2B which carries

products from the Atlas Cove-

Mosimi-Satelite-Ibadan-Ilorin

depots recorded 2,440 breaks

leading to a loss of over N73.6

billion in products and pipeline

repairs.

On gas, Oniwon explained

that the incessant attacks on the

Trans Forcados Pipeline has

rendered the TFP out of service

since May 2009 thus making it

impossible to evacuate crude

oil/ condensate from some

Shell operated facilities.

“Currently over 300,000 bpd

and 140mscfd is deferred and

about 55 vandalized points so

far repaired at a cost of N11

billion,” he said.

he NNPC revealed that Ti t s p e n t o v e r

US$42.952million to execute a

two-phase repair work which

started in September, 2009 on

74 damaged points in System

2C-1. Escravos –Warri Crude

Oil Pipelines to enable the start

up of the Warri and Kaduna

refineries.

The GMD used the occasion

to commiserate with the Acting

IGP and the Police high

command on the demise of his

wife as well as the death of DIG

John Haruna and some Police

officers in the Jos helicopter

crash.

In his remark, the IGP

pledged the readiness of

officers and men of the Force to

work with the NNPC in

achieving its mandate to the

nation.

M r . A b u b a k a r a l s o

announced the formation of a

special Police Anti-Pipeline

vandalism Squad dedicated to

the protection and security of

the nation’s vast outlay of oil

and gas pipelines.

He also declared what he

termed “zero tolerance and no

laxity on the issue of pipeline

vandalism” and pledged to

“deal with any officer who fails

to perform” in this regard.

Mr. Abubakar thanked the

GMD for his show of concern

and solidarity with the Police at

this trying time.

Currently over 300,000 bpd and 140mscfd is deferred and about 55 vandalized

points so far repaired at a cost of N11 billion

MD Abubakar

Fuel subsidy probe report ready in 2 weeks

committee probing the fuel

subsidy regime, Hon. Farouk

Lawan, says the report of the

committee would be ready in

two week’s time.

Lawan told newsmen at the

National Assembly Complex,

Abuja, that since conclusion

of its public hearing on the

s u b s i d y r e g i m e , t h e

committee had been working

round the clock to present the

report on the floor of the

House of Representatives

without further delay.

He appealed to Nigerians

to give the committee time to

do a thorough job before

making the report public,

saying: “We are prepared to

present a report that covers

all the areas we are expected

to cover and also answer all

the ques t i ons we a re

expected to answer in the

cause of the investigation.”

Admitting that there had

been pressure on the

committee to make the report

public, he assured that no

amount of pressure would

make the committee release

an uncoordinated report,

because according to him,

“we do not want to disappoint

Nigerians.”

Lawan stated that apart

from other findings from both

the public hearing and

s u b m i s s i o n s m a d e b y

stakeholders in the subsidy

regime, his committee has

been able to identify the exact

amount of petrol, diesel and

kerosine consumption by

Nigerians per day.

“These are part of our

findings so far and I believe it

wi l l he lp the count r y

determine how the subsidy

will look like in 2012,

especially when the exact

number of liters of petroleum

products on which subsidies

should be paid have been

identified”, he added.

On the companies and

individuals who failed to

appear before the public

hearing organised by the ad

hoc committee, the chairman

said his committee had

information about every

company or individual that is

involved in the subsidy

regime controversy.

CONTINUED FROM PAGE 1

FocusF 8

Afren expects 46,000b/d from existing asset

Afren Nigeria is the local arm of the UK-quoted Afren Plc, an oil and gas company engaged

in various exploration and production activities in Africa, and with increasing assets in Nigeria. In this interview with C l a r a N w a c h u k w u , t h e Managing Direc tor, Mr. Adebayo Ayorinde, te l ls Sweetcrude what attracted the company to Nigeria, at a time when it was a high risk venture in view of militancy and civil unrests in the oil-rich Niger Delta as well as how the company has weathered the storm.

Excerpts:

What attracted Afren to Nigeria in spite of the perceived c h a l l e n g i n g b u s i n e s s environment?

Afren was created in 2004 by a group of five founders, three of whom are Nigerian, so Nigeria has always been a key focus point and at the very heart of the Company.

On the most fundamental level, Nigeria is the most prolific oil and gas producing nation in sub Saharan Africa and accounts for around 80% of proved oil and gas reserves that have been discovered to date across the

region. The sheer scale of the resource base and availability of n u m e r o u s p a r t n e r s h i p opportunities, coupled with our strong ties and Nigerian management , meant that Nigeria held an instant appeal for us as a place to do business. Furthermore, a key early priority of Afren’s was to establish a solid platform of cash generative reserves and production that would enable us to build and grow the bus iness on a sustainable basis. Nigeria lends i t s e l f p e r f e c t l y t o t h e achievement of this objective. In particular, Afren identified that there are a large number of discovered but undeveloped oil fields in Nigeria that have been l i c e n s e d t o i n d i g e n o u s operators, and that opportunities exist for an aligned partner that can assist in the effective development and monetisation o f these a s se t s th rough providing access to capital and the necessary technical and operational capacity. We have successfully forged strong partnerships in Nigeria that have yielded two Greenfield developments to date, the Okoro field in partnership with Amni and the Ebok field in partnership with Oriental, both of which are offshore Akwa Ibom. We have several other partnerships at assets across the exploration and

appraisal stages that will be matured into the development projects of tomorrow and allow us and our partners to continue to realise some of Nigeria’s vast potential that resides in these undeveloped assets. It was a founding vision of the Afren’s to work in close partnership with indigenous companies and host governments. We like to think that we have demonstrated our business model to be a highly e f f e c t i v e a n d p r o d u c t i v e partnership based approach for all concerned.

In 2009, Afren took i ts partnership model to the next l e v e l b y s u p p o r t i n g t h e e s t a b l i s h m e n t o f F i r s t Hyrdocarbon Nigeria Limited, an indigenous company in which Afren holds a 45% interest, inves t ing d i rec t ly in the indigenous sector as well as providing technical and financial support. Afren also acts as Technical Services Provider to FHN, and will provide assistance and support to FHN as it seeks to grow its indigenous platform in Nigeria.

Were there assurances from government and in what ways if any, to convince Afren to come to Nigeria?

Afren’s decision to invest in Nigeria was driven by the

business opportunities we knew to exist, rather than any specific assurance or communication from the government, but the government’s focus over the last ten years on trying to deepen indigenous production has contributed to the success of our business model.

Afren seems to have quite a large portfolio of assets in Africa but what is driving investment decisions in favour of Nigeria?

Our asset base across Africa is at different phases of maturity. Our East African portfolio of assets is largely focused on exploration and we will be drilling several wells in the

region in 2012, investing a considerable amount of money. Our asset base in Nigeria is more mature and commercially advanced. We have existing production at Okoro and Ebok and we have strong technical knowledge of the surrounding areas where we are also investing in exploration and appraisal wells in 2012. We have seen early positive results from this work having recently made a new oil discovery with the Okoro East exploration well in partnership with Amni and look forward to drilling key wells at the Ebok/Okwok/OML 115 area in partnership with Oriental as

Afren’s decision to invest in Nigeria was driven by the

business opportunities we knew to exist, rather than any specific

assurance or communication from the government

CONTINUES ON PAGE 8

Afren is a leading independent exploration and production company

FocusF 9

Afren expects 46,000b/d from existing asset

the year progresses.

Fundamentally, we believe that the opportunity set in Nigeria for Afren remains exceptional. Having proven our partnership model with Amni and Oriental, and expect average daily production of between 42,000 to 46,000 boepd from our existing asset base in 2012 we are positioned as the ‘partner of choice’ for indigenous companies looking to realise value. When you consider that 37% of the oil and gas licences in Nigeria are held by indigenous companies, but only 4% of those are currently producing oil then the opportunity is clear for further growth.

What has been Afren’s experience since investing in Nigeria and what value added apart from funding has it brought into the stable?

Given the success of our operations our experience has generally been very positive. Afren was founded with the objective of supporting the indigenous sector and so the value add that we bring to Nigeria can be quantified in a number of ways.

Firstly, simply by providing the access to finance and technical support required for indigenous c o m p a n i e s t o a c h i e v e production we are supporting the growth of the indigenous sector in the upstream oil and gas sector in Nigeria. Increasing the countries reserves base and developing the indigenous sector both significantly increase the value from the oil and gas sector that remains in Nigeria and enhances long term sustainability.

Secondly, Afren has had a clear policy since it was founded to build capacity in the countries where we operate. We do this in a number of ways. Internally, 95% of our permanent staff in Nigeria, are Nigerian and we are very proud of this. Of the 95% of the Nigerian staff on our facilities, about 40% are local indigenes of those communities.

We provide our partners with the training and exposure they require to grow into strong indigenous producers in their own right. We have deliberately focused on building a strong n e t w o r k o f i n d i g e n o u s contractors in support of our

CONTINUED FROM PAGE 8

operations, and work closely with companies including Century Energy Services, Intels and Amazon. These contractors directly or indirectly provide several thousand jobs to Nigerians within the Nigerian upstream sector. As a result, a substantial portion of our procurement and staffing costs are spent locally and form a core component of our local content policy.

F i n a l l y , E n c o u r a g i n g e n t r e p r e n e u r s h i p a n d developing the capacity of youths in our host communities and the

surrounding areas is at the centre of our approach to community development. We have focused our CSR programmes on capacity development programmes in the Niger Delta, from establishing skills development programmes for youths and building a youth empowerment centre, to working closely with universities in the region to educate and train the next generation of Nigerian oil and gas professionals. The skills acquis i t ion programme is designed to provide youths with intensive training to acquire vocational skills like welding and

fabrication, mechanic and auto repairs, crane operatorship, auto electrical and electronics repairs, computer information and office management, fashion designing and hair dressing. Cash grant and the relevant tools and equipment required to open a workshop or business in their area of specialisation is provided.

The youth empowerment centre will have the capacity to host training classes for youths and includes facilities such as in ternet access , autocad software, a printing press and a photographic studio amongst others, with the hope that youths can gather to learn new and productive skills which can be translated into future careers, allowing them to make a clear a n d p o s i t i v e e c o n o m i c c o n t r i b u t i o n t o t h e i r communities and the state as a whole.

Having been in Nigeria for a while, how would Afren describe its experiences so far in terms of value for money, oil and gas production, the business environment and future prospects?

Since we were established in 2004 Afren has successfully completed two world class

projects in Ebok and Okoro, grown an asset base across the c o u n t r y , e x t e n d e d o u r partnership model into direct investment into the indigenous sector through FHN and are now positioned for strong production and reserves growth from our existing portfolio in 2012. We are already the leading independent upstream oil and gas company operating in Nigeria and Nigeria remains at the centre of our development plans. With the government’s new drive to pass the Petroleum Industry Bill likely to unleash a new wave of investment into the sector and the potential I have already described inherent within the indigenous sector I think the future prospects are extremely bright.

What challenges did Afren face, how was it able to overcome them, and going for ward , what are your expectations from operating in Nigeria’s oil and gas sector?

Nigeria can sometimes be a cha l lenging p lace to do business, but the combination of our local knowledge, access to finance and strong technical team have allowed us to overcome any challenges that we have faced.

Afren, an oil and gas group

The skills acquisition programme is designed to provide youths with

intensive training to acquire vocational skills like welding and fabrication, mechanic and auto

repairs, crane operatorship, auto electrical and electronics repairs, computer information and office

management, fashion designing and hair dressing

10Gas

Senate lambasts DPR over delay of gas projects

The Senate has lambasted the Department of P e t r o l e u m R e s o u r c e s

(DPR) over its inability to fast-track the installation of gas pipelines to facilitate the supply of gas generated in the country.

T h e S e n a t o r N ke c h i Nwoagu-led committee on gas had summoned DPR to explain the continuous inclusion of the construction of gas pipelines across the country in the national budget since 2009 with a poor record of 8.3 per cent progress report.

T h e p r o j e c t f o r t h e installation of the monitoring equipment was contracted to

Inalegwu SHAIBU Riverman by the DPR to provide definite figure on the amount of gas generated as well as revenue accruable to the country.

But the project has been left uncompleted since it was awarded in 2009.

The committee held the DPR responsible for the delay, stressing that it failed to enforce its powers to ensure that the IOCs comply with the installation of the gas monitoring device.

Nwaogu lamented that it was appalling that since 2009 only 10 out of the 116 projected installations across the country were completed.

She said: “We can’t be saying we are seventh largest producer of gas and the records for the gas generation are abysmal. The

commitment by DPR to perform is not there. We are being denied the revenue we are expected to derive from gas.

“You sit back and you are the regu la to r. A re the o i l companies going to tell DPR when to allow them access to use the equipment before you enforce the compliance? For oil companies to tell you what they have and you record it is unacceptable.”

Deputy Director of DPR gas, Mr. Oliver Okaraorjiakor, in his defence explained that the oil companies were hesitant to allow installation on grounds of compatibility of technology.

He also added that the IOCs were afraid that their systems would be hacked if the monitoring system was installed.

Eni hits huge gas in Mozambique

APUTO – Italian oil giant, Eni, announced, M

Monday, another new giant find on its Area 4 block off Mozambique, which has expanded the size of gas discovery so far in the concession.

Eni said its Mamba North East 1 drilled probe in the eastern part of the block has increased resources at the find by at least 10 trillion cubic feet after hitting a total of 240 metres of gas pay in multiple high-quality Oligocene and Eocene sands. Of this, 8 Tcf is located exclusively in Area 4.

“This new discovery further improves the potential of the Mamba complex in Area 4 off Mozambique now estimated at at least 40 Tcf of gas in place,” Eni said in a statement.

The latest well was drilled to a total depth of 4560 metres and in a water depth of 1848 metres at a location 50 kilometres off the Capo Delgado coast, about 15 kilometres north-east of the initial Mamba South discovery and sou th -wes t o f the subsequent Mamba North find.

I t p r o v e d r e s e r v o i r continuity and pressure communication with the earlier Mamba South 1 and Mamba North 1 wel ls , according to the company.

The new find looks set to strengthen the case for a land-based liquefied natural gas development, as well as further fuel prospectivity in the hot East Africa play after r e c e n t d i s c o v e r i e s i n neighbouring Tanzania.

Eni plans to drill at least another four wells in nearby structures this year to assess the upside potential of the Mamba complex.

The company is reported to be seeking farm-in partners for Area 4 to help it bear the hefty costs of development, with BP, Shell and Total said to be among interested players.

The Italian firm holds a 70% interest as operator of Area 4, with partners Galp Energia (10%), Kogas (10%) and state-owned ENH (10%).

Are the oil companies going to tell DPR when

to allow them access to use the equipment before you enforce the compliance? For oil companies to

tell you what they have and you

record it is unacceptable

Law Makers in session

N

S

E W

11FeedbackFeedback

Oil exploitation,

the environment and crimes

against nature

Lagos - SINCE the

first commercial

production of oil in

Nigeria in 1956, it

has signalled the

beginning of a profound

transformation of Nigeria’s

p o l i t i c a l a n d e c o n o m i c

landscape. Since the 1970s, oil

has accounted for over 80 per

c e n t o f t h e N i g e r i a n

government’s revenue and 95

per cent of the country’s export

earnings.

All of Nigeria’s oil and gas

come from its Niger delta region

which sustains the largest

wetland in Africa and one of the

largest wetlands in the world.

Consisting of approximately

20,000 square kilometres of

mangrove forest, fresh water

swamp, coastal ridges and fertile

dry land forest, seasonal

flooding and sediment deposits

over thousands of years have

made the land in the region

fertile.

The immeasurable creeks and

streams have in the past,

p r o v i d e d h a b i t a t f o r a n

abundance of fish and marine

wildlife. Abundant rainfall and

the fertility of the land, rivers and

sea have set the conditions of the

Niger delta to have one of the

h ighest r ura l populat ion

densities in the world.

The Niger delta region is of

tremendous strategic economic

importance to Nigeria. This is

because Nigeria’s main strategic

economic resource – oil and gas –

are concentrated in the region

and since these minerals

cons t i tu te the coun t r y ’ s

economic live-wire, the Niger

delta region could rightly be

regarded as holding the key to

Nigeria’s economic prosperity

and greatness.

While the presence of these

huge reserves of oil and gas has

turned the Niger delta into the

economic “jewel in the Nigerian

crown,” the exploitation of these

resources have been carried out

in such unsustainable manner

that not only are the people

denied the benefits derivable

there from, but their very means

of livelihoods and sustenance

have been threatened thereby.

In spite of the stupendous

wealth that have accrued from

decades of oil activities and

production in Nigeria, there is

surprisingly little good quality

independent scientific data on

the over-all or long term effects

of hydrocarbon on the oil

producing communities. There

is no doubt, however, that oil

pollution and pollution from oil

activities has clearly and

s e r i o u s l y d a m a g e d t h e

environment and the livelihood

of those living in the oil

producing communities.

The moist, damp and humid

forest within the lowland rain

forest environment is home of

such crops like cassava, yam,

banana, pepper which are

grown by the people for their

basic subsistence. As the

incessant spill occurs, it spreads

into farmlands and water bodies.

The toxic crude seeps

into the ground and is

taken up by the

plants’ roots.

Furthermore, as

most of the spills

a r e

accompanied

by fire, most of

the impacted

a r e a i s

c o m p l e t e l y

d e g r a d e d

leaving only

thick encrusted

earth which is

black in colour.

Muddy pools of

weathered crude

The land is baked and

the once fertile soil turned

into a black and hard residue

devoid of nutrients. Muddy pools

of weathered crude are found in

several places at spill sites while

the deforested area are re-

colonised by invasive seedlings of

various species.

Apart from the crops, marine life

also suffers from the toxicity of oil

pollution as most of the oil

pollution spread to the tidal rivers

and streams. When this happens,

the mangrove forest, home to

most types of fishes and seafood,

become heavily contaminated

and the fishes find it difficult to

survive. Sheen of oil can be seen

on the rivers even long after oil

pollution had occurred.

The environment and conflict

Whilst these environmental

devastat ing ef fects of o i l

production are known, very little

time is taken to ascertain their

role in the crisis situation in the

region.

In this respect it would be

appropriate to start with the fact

that like, most indigenous

peoples, the peoples of the region,

have traditions and customs

deeply rooted in nature which

have helped them to protect and

preserve the environment for

generations. The land on which

they lie and the rivers which

surround them are viewed by

them not just as natural

resources for exploitation but

with deep spiritual significance.

Land is viewed as the abode of

our ancestors from where they

oversee our lives, it is also a god

and we revere it as such. Forests

are not a collection of trees and

the abode of animals.

This is why some forests and

trees that we consider sacred

cannot be cut indiscriminately

w i t h o u t r e g a r d t o t h e i r

sacrosanctity. When these are

destroyed or desecrated, the

people do not see the destruction

of some factor of production but

the abode of their ancestors,

their sacred grooves and shrines

which is their bounden duty to

defend and protect otherwise

they suf fer some severe

consequences.

An interesting case is that the

Yorla Oil Field in Ogoni, which

has witnessed some of the worst

scenes of oil spills and blow-

outs. The area occupied by the

oil wells that erupted causing the

pollution, was an ancestral forest

area with deep spir i tual

significance to the community.

Due to the veneration the

community attached to the

forest, it was a conserved area by

the community. But with the

discovery of oil, Shell moved into

the area and destroyed a large

part of the forest, whilst the

remaining part of the forest was

destroyed during the oi l

pollution and the conflagration

that accompanied it. Till today

the people hold on to the view

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

mysterious deaths in the

community are caused by the

anger of their ancestors.

Setting the above dominant

and pervasive African concept of

the environment against the fact

that the resources are being

exploited for the Nigerian state

by fore ign mul t inat ional

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

understanding of, and scorn

regard fo r our sp i r i tua l

attachment to nature and the

environment, an inescapable

fault line immediately emerges.

Since these multinationals

provide the technology for

translating the rich resources of

the Niger delta into wealth and

in fact are operators of the joint

venture arrangement with the

Nigerian state, they practically

control the key to the country’s

economic prosperity.

Th i s g r ip wh ich these

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

c o u n t r y ’ s e c o n o m y i s

occasionally used by them to

prod or even blackmail the

government into acts of violent

oppress ion. One notable

instance was during the height

of the Ogoni campaigns, when

in requesting the Abacha regime

for permission to set up a special

force for its protection, Phil

Watts, the then Managing

Director of Shell wrote: “We

must emphasize that SPDC

produces more than 50 per cent

of Nigeria’s oil which has

consequential major impact on

the country ’s economy. To

ensure a continuation of

operations at the present level

requires the provision of

maximum protection … SPDC

will fully support the cost of

setting up the contingents.”

The Nigerian state, therefore,

are always ready to deploy its

security forces at the disposal of

the oil companies and for the

protection of the oil exploitation

companies who are always

virtually at conflict with local

communities.

This has led local communities

to allege, with justification, that

there is a conspiracy between

the oil companies and the

Nigerian state not only to exploit

them but also to repress and

even kill them. This produces a

burning sense of injustice on

which the various forms of

agi ta t ions in the region

potentially feeds.

It becomes extremely difficult

to counter such arguments in the

face of available evidence.

Although under Nigerian law, a

licencee of an oil mining lease is

precluded from exercising its

mining lease where, inter alia,

the land is a sacred forest, yet

every day dwelling houses,

shrines and sacred grooves are

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

exploitation. Also there does not

appear to have been a single

prosecution of corporations for

environmental pollution despite

the huge oil pollutions with

devastating consequences that

have been recorded in Nigeria.

Ledum MITEE

When these are destroyed or desecrated, the people do not see the destruction of some factor of production but the

abode of their ancestors, their sacred grooves and shrines

which is their bounden duty to defend and protect otherwise

they suffer some severe consequences

12Power

Electricity consumers to suffer in the short term

Electricity Consumer

Clara NWACHUKWU

Despite assurances by the Federal Government that e l e c t r i c i t y consumers will

not suffer unduly on account of the 11 percent tariff increase that will become effective by June 1, data has shown that some classes of customers will actually be paying much more than initially anticipated.

These classes of customers, particularly the high residential and commercial customers who are expected to pay specific fixed monthly charges, will suffer more than any other classes of customers.

In a breakdown of the tariff o b t a i n e d exc l u s i v e l y b y Sweetcrude, the Chairman of the Nigerian Electricity Regulatory Commission, NERC, Dr. Sam Amadi, pleaded for policy understanding in order to attract the much needed investment into the sector.

Aggregated tariff

Under the Multi Year Tariff O r d e r, M Y T O s t r u c t u r e , replicated from the British system, tariffs are aggregated and electricity consumers are grouped into various classes of

R1to R4 for residents; C1-C4 for the commercial and industrial users and special consumers.

But Amadi noted, “Till date, we have not granted any consumer a special status. Approval on this will depend on certain terms and conditions.”

Consumers grouped under R1 will be the least paying, as their tariff is not expected to exceed N 4 / K w h . T h i s c l a s s o f consumers are said to be paying less and include the low income earners, and those in the rural areas, who are benefiting from t h e N 5 0 b i l l i o n R u r a l Electrification Fund.

n order to standardise costs Iacross the country, there will be no fixed charges and maintenance costs, so that consumers in this class will pay between N3.30 to N4/Kwh.

For the R2, which applies to the middle income consumers, tariff will rise by 11% and are expected to pay between N11 and N12/Kwh.

At this rate, the NERC boss insisted that costs are still highly subsidised by government, without which they would have p a i d b e t w e e n N 2 2 a n d N24/Kwh.

However, unlike the R1, this

class of consumers will pay at “a fixed charge of N500 per month to cover investments.”

The R3 and R4 customers will pay the highest among all the residents, as these are the high income earners who live in the big and mega estates across the country such as Maitama, Asokoro in Abuja, and VGC, Banana Island and a host of many others.

The new tariffs for these classes of consumers are cost directly by direct metering and will be d e t e r m i n e d u n d e r t h e agreements with their estate managers.

Like for the residential group of customers, the new tariff also considered the vulnerability of the C1, which comprise the Small and Medium Enterprises, SMEs.

The C1 will pay between N12 and N14/Kwh in addition to a fixed monthly charge of between N500 and N600 depending on size.

This class of customers are also enjoying subsidy because of their disadvantaged position. “They do not enjoy the economies of scale that the big companies enjoy and so they can be run out of business at any given time as we have been seeing happening,” Amadi said.

He explained that the subsidies

being enjoyed by the R1, R2 and C1 customers are derived from the federal allocations.

n the other hand, the OC3and C4 customers will not only pay N26/Kwh but also pay a whopping fixed monthly charge of N160,000.

Defending the rational for the continued subsidy to some classes of customers, the NERC boss said this is so that they are not unnecessarily hurt or run out of business by high tariffs.

“The new tariffs have been put in such a way that variables are considered, as the tariff policy m u s t s u p p o r t e c o n o m i c imperatives as well as support enterprise. So if you punish them with prohibitive costs, the economic purpose will be defeated.”

Amadi further argued that the new tariff, will, among other things, “mitigate risks,” as it is part of the measures to g u a r a n t e e r e t u r n s o n investments, and has taken into considerations inputs from other stakeholders, investors and financiers.

According to him, “The urgency now is to attract investments to the sector, and going forward, ensure there are no distortions in the market so that investors can recover their costs and consumers get value or money through efficient and reliable services.

Short term losses

However, despite assurances of consumers paying less than they are generating power on their own, in the short term, they will actually be paying more,

Like for the residential group of customers, the new tariff also

considered the vulnerability of the C1, which comprise the Small and Medium Enterprises, SMEs

13Power

NCP approves Canadian firm for transmissions

Transmission lines

Oscarline ONWUEMENYI

AB U JA - T h e N a t i o n a l C o u n c i l o n P r i v a t i s a t i o n (NCP) yesterday

approved a Canadian firm, M a n i t o b a H y d r o I n t e r n a t i o n a l f o r simultaneous opening of their f inancia l proposa l and commencement of contract n e g o t i a t i o n s a s t h e management contractor for the Transmission Company of Nigeria (TCN).

Following NCP’s approval at a meeting presided over by Vice President Namadi Sambo, should the financial bid sail through, Manitoba will take over management TCN for three years.

Three firms- Manitoba, Power Grid Corporation of India Limited and ESB International of Ireland were invited to place bids by the NCP.

It would be recalled that the NCP, at its third meeting for 2010 which was held at the

Presidential Villa, Abuja,had invited Grid of India, ESB International of Ireland and Manitoba Hydro of Canada to re-submit technical and financial proposals in line with current system and industry information for the management contract for Transmission Company of Nigeria (TCN.)

TCN is one of the eighteen successor companies carved out of Power Holding C o m p a n y o f N i g e r i a (PHCN.) It combines the functions of a transmission services provider, a system operator and a market operator, all of which are central to the sustainability and development of the electricity sector.

Following unbundling, TCN emerged as one of the successor companies of PHCN and was scheduled for a Management Contract in order to transit the company into a financially sustainable, stable, self-sufficient and market-driven company.

F o r t h e p u r p o s e o f

procuring a management contractor for TCN, the BPE retained the services of British Power International (BPI) who were initially engaged by Power Holding Company of Nigeria (PHCN) to provide advice on the engagement of an Operation & M a i n t e n a n c e ( O M ) contractor and other issues like the development of Management Information Services and Corporate Governance procedures.

he technical proposals Twere evaluated based

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

According to a statement from the Head of Media Relations in the BPE, Mr. Chukwuma Nwokoh, the management contract is designed to achieve the reduction of electricity losses during transmission, and

provide for the achievement of certain predetermined targets that would improve grid security and general performance.

He added, “The contract also has reward and penalty clauses as incentives for success while providing efficient management of government investments. It ensures adequate and e q u i t a b l e g e n e r a t i o n dispatch according to a fair merit order based on sound regulatory principles, ensure fair market settlements between electricity traders; and provide for skills and expertise transfer to Nigerian counterparts who will serve in deputy and other positions on the management staff of t h e M a n a g e m e n t Contractor.”

Manitoba Hydro is the electric power and natural gas utility in the province of Manitoba, Canada. Founded in 1961, it is a provincial C r o w n C o r p o r a t i o n , governed by the Manitoba Hydro-Electric Board and the Manitoba Hydro Act. The company presently operates 1 5 i n t e r c o n n e c t e d generating stations. It has more than 527,000 electric power customers and more than 263,000 natural gas customers. Since most of the electrical energy is provided by hydroelectric power, the utility has low electricity rates.

t the deadline for Asubmission of the technical bid and financial proposals on Feb 29, 2012, two bids were opened. The result of the evaluation of the technical proposals showed that only Manitoba Hydro International of Canada met the benchmark “which led to its being appointed as the management contractor for TCN”, Mr Atedo Peterside who br ie fed newsmen alongside the DG, BPE, Ms Bolanle Onagoruwa said.

NCP also approved the constitution of a six-member team to negotiate with M a n i t o b a H y d r o International, which is the electric power and natural gas utility in the province of Manitoba, Canada. Founded in 1961, it has considerable experience in managing transmission systems via management contract in many parts of the world including African countries.

It combines the functions of a transmission services provider, a

system operator and a market operator, all of which are central

to the sustainability and development of the electricity

sector

14Financing

NEITI to conclude NNPC, others‘audit in October

Oil facilities

ABUJA - The 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) says it will conclude audit of the oil and gas, and solid minerals sectors in October this year. T h e a g e n c y b e g a n a comprehensive auditing of the sectors in February.

N E I T I ’ s D i r e c t o r o f Communications, Dr. Orji Orji, disclosed this to the Europe Correspondent of the News Agency of Nigeria (NAN) in London.

He listed organisations being audited to include the Nigerian National Petroleum C o r p o r a t i o n ( N N P C ) , Department of Petroleum Resources (DPR), Federal I n l a n d R e v e n u e Service(FIRS), Central Bank of Nigeria (CBN) and the Office of the Accountant General of the Federation.

“While the audit of the oil

and gas industry covers the period 2009 to 2011, that of the solid minerals is to cover 2007 to 2010,” Orji said.

H e s a i d N E I T I ’ s comprehensive audit of the es tab l i shments was to sanitise the sectors, enthrone good business ethics and restore investor confidence.

“All companies operating in the oil and gas and solid minerals sectors in the country are compulsorily required by NEITI law to open its books and provide relevant information and

data, on demand for purposes of the audit,” he stressed.

Orji further explained that NEITI had already designed audit templates with detailed questions, information and

data required for the exercise.

e s a i d t h e templates were Hrecently publicly

presented to all companies doing business in the Nigeria’s solid minerals sector.

O r j i d e s c r i b e d a s encouraging, the cooperation of listed companies for the exercise, but warned that companies that failed to respond to audit query risk withdrawal of licence or prosecution.

He explained that the scope of the audit, largely include the determination of the r e v e n u e a c c r u a b l e t o g o v e r n m e n t f r o m t h e companies and how much of it went into the Federation Account.

NEITI was inaugurated in 2004 with the mandate to promote due process and transparency in the extractive industry.

NEITI’s comprehensive audit of the establishments was to sanitise the sectors, enthrone

good business ethics and restore investor confidence

$12.4bn oil windfall: Judgment on Okigbo report for April 27

$12.4bn oil windfall: Judgment on Okigbo report for April 27

Ikechukwu NNOCHIRI

BUJA – A Federal High ACourt in Abuja, has fixed April 27 to deliver judgment in a suit seeking to compel the Central Bank of Nigeria, CBN, and the Attorney General of the Federation, AGF, to disclose how the $12.4 billion oil windfall money that accrued to the Federal Government between 1988 and 1994, was spent.

The suit was filed before the High Court by six civil society groups led by the Socio-E c o n o m i c R i g h t s a n d Accountab i l i ty Pro jec t , S E R A P, u n d e r t h e F u n d a m e n t a l R i g h t s (Enforcement Procedure) Rules 2009.

Though the judgment has been stalled since last year when hearing was concluded on the matter, however, Justice Gabriel Kolawole, today, ordered all the parties to appear on the next adjourned date to re-adopt their processes to enable him to give verdict on the case.

15Financing

Afren boosts profits by 173% despite Nigerian challenges

LAGOS - UK-listed explorer Afren, which maintains a stake in Nigeria’s oil sector, has

reported a 173% rise in after-tax profits on continuing operations.

The company said it has earned an after-tax profits of $125 million in 2011 despite major delays to its operations in Nigeria.

Its shares were hit earlier this year over prolonged delays to the full startup of its key Ebok offshore oil field, which got underway in the second half of the year and added some $272 million to Afren’s turnover.

A 37% rise in realised oil prices to $1.09 also helped hike turnover to a company record of $597 million from 2010’s $319 million.

While net working interest production rose by a third to 1 9 , 1 5 4 b a r r e l s o f o i l equivalent per day over the year, output still came in well short of the original 2011 forecast for 25,000 barrels thanks to the Ebok delays.

Afren says it is now in position to significantly ramp

up output to between 42,000 and 46,000 equivalent barrels this year.

Chief executive Osman Shahenshah said the results reflected the “growing maturity” of the seven-year listed company, pointing out

proven and probable reserves were up 132% during 2011 to 185 million barrels of oil equivalent.

Afren’s acquisition of a 60% interest in two production sharing contracts in Kurdistan were behind much of this

increase.Shahensha sa id tha t

A f r e n ’ s e x p l o r a t i o n programme for this year was already off to a good start with January’s oil find at its Okoro East oil field in Nigeria.

Afren says plan to raise oil output on track

India dedicates 2,200-km GAIL natural gas pipeline

ndian Prime Minister

Manmohan Singh Idedicated GAIL (India) Ltd.’s

2,200 km Dahej-Vijaipur-

Dadri-Bawana-Nangal-

Bhatinda natural gas pipeline,

which extends through

northwestern India. GAIL said

the project will spur industrial

development across 40

industrial hubs, with the

potential to supply 3,500 Mw

of power, 1.8 million

tonnes/year of urea

production, and cities along

the pipeline with natural gas

for industrial and domestic

applications.

Dahej-Vijaipur-Dadri-

Bawana-Nangal-Bhatinda

crosses Gujarat, Madhya

Pradesh, Rajasthan, Uttar

Pradesh, Haryana, Delhi (UT),

Punjab, and Uttarakhand states,

both interconnecting with the

existing network and meeting

unsupplied demand northern

India. Singh

also expressed

his hopes the

pipeline’s

extension

would soon

carry the gas

from the

proposed

Turkmenistan-

Afghanistan-

Pakistan-India pipeline into

rural parts of the country. The

pipeline cost roughly Rs.

13,000 crores.

GAIL has been taking a

multipronged approach to

meeting India’s growing

natural gas demand.

Ghana rakes in $69 million in oil revenue

itifmonline –The Bank of Ghana[BoG]has C

a n n o u n c e d t h a t t h e country’s total savings from oil revenues have reached $69 million dollars.

This is contained in a report published on the central bank’s website.

According to the report, about $14.4 million dollars has accumulated in the heritage fund which is m e a n t f o r f u t u r e generations.

M e a n w h i l e t h e stabilization fund which is meant to cushion the country in times price volatility has accrued $58 million dollars.

These are monies from three crude oil liftings from the jubilee field even though there were a total of four liftings last year worth about $444million dollars.

Obama Power-Plant Rule Signals Demise of ‘Old King Coal’

resident Barack Obama’s proposed carbon-dioxide P

rules for power plants effectively prohibit new coal power plants, buttressing a shift away from a power source that fueled the Industrial Revolution to cheap natural gas.

Obama’s Environmental Protection Agency proposed the first limits on greenhouse-gas emissions from U.S. power plants yesterday, setting a standard natural-gas facilities can meet. A new coal plant would need carbon-capture technology, which industry advocates say isn’t available at competitive rates.

With natural gas at decade-low prices, no new coal plants are being built, with or without the EPA rules, according to the agency’s analysis. For critics, from mining companies and utilities to coal-country lawmakers, the rules are the latest in a string of EPA regulations they say are meant to put the fossil fuel out of business.

CONTINUES ON PAGE 17

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CONTINUES ON PAGE 18

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18Insurance

The actions of the Boko Haram sect h a s l e d t o e c o n o m i c paralysis in some

Northern states of the country, however experts are of the opinion that collaboration between the government and the insurance industry can salvage the situation going forward. Rosemary Onuoha reports

As terrorism daily assumes a widening dimension, international reinsurance companies no longer extend re insurance cove r f o r terrorism to developing economies battling with the menace. The reason for this trend, according to findings, is that these international reinsurance firms are of the opinion that most developing economies cannot afford reinsuring their terrorism risks in the international market due to the huge cost involved.

As worrisome as this may seem, experts are insisting that insurance against terrorism is necessary; therefore, countries affected by this development must either choose to combat the rising threat of terrorism or sink with it as the case may be.

In Nigeria, the fear of Boko H a r a m h a s a d v e r s e l y crippled economic activities in some Northern states even w h e n t h e f e d e r a l government, on daily basis, insists that it is on top of the s i t ua t i on . Eve n wh i l e government claims to be on t o p o f t h e s i t u a t i o n , investigations reveal that t h e r e i s n o c o n c r e t e insurance plan for providing compensat ion fo r loss associated with terrorism. To this end, stakeholders are calling for collaboration between the government and the insurance industry in the fight against terrorism.

Chairman of New India A s s u r a n c e C o m p a n y Limited, Mr. Annur Sekar said that terrorism is a serious cause for concern in Nigeria, as such, the insurance industry must wake up to the challenge with the full support of the government.

Chairman of Nigerian Insurers Association, NIA, Mr. Olusola Ladipo-Ajayi , stated that with collaboration between all stakeholders, terrorism can be defeated.

For the Former Managing D i r e c t o r o f F i n a n c i a l

Salvaging economic risks through insurance

Terrorist attack

Institutions Training Centre, FITC, Mr. Oladimeji Alo, there is no better time for terrorism insurance to be put in place than now.

A l o s a i d “A s o u n d under s tand ing o f the Niger ian envi ronment s h o u l d p r o p e l t h e government to embrace insurance to guard against losses which could emanate from terrorism.”

The collaborationIf only the insurance

industry can get the backing of the government, Sekar said that operators in the sector can come together and create a terrorism pool.

He said “In India we have gone th rough s imi la r situations in the past. Following the 911 incident, t h e o v e r s e a s m a r k e t

withdrew the terrorism cover to the Indian market. And what we did in India is that we came out with our terrorism pool with the backing of the regulator and we have a reinsurance corporation. The r e i n s u r a n c e c o m p a n y became the pool manager and the rest of the market players became participants. So we started operating a terrorism pool in India and over the years it has become bigger and bigger and it has been able to meet the domestic requirement of the insured. But if the risk is very large, what we do is that we go to the overseas market and try to obtain a standard terrorism policy. But the pool is working very satisfactorily and I think in Nigeria, something like this can be taught up by the

regulator here. The local reinsurance company can become a pool manager and the res t insure r s can participate in that pool and we find out that this kind of arrangement works very well and one doesn’t have to look to the outsiders.”

The challengeAs elaborate as the call for

collaboration in the fight against terrorism may sound the biggest challenge to the growth of the Nigerian insurance industry is the government itself.

Managing Director of C u s t o d i a n a n d A l l i e d Insurance Plc, Mr. Wole Oshin stated “In other economies, government picks on insurance for progress. Unfortunately government in Nigeria

d o e s n ’ t e v e n k n o w insurance.”

He stressed that the g o v e r n m e n t n e e d s t o recognise insurance, adding “A situation where budgets are discussed and insurance industry is not even invited means that government does n o t u n d e r s t a n d t h e importance of insurance. O u r p r i m a r y a n d fundamental objective as an industry is to stabilise the economy, produce savings and stabilise the risk of g o v e r n m e n t . B u t government has not looked at insurance because they don’t understand it because if they do, then the will give p r i o r i t y t o i n s u r a n c e because . In advanced countries, the government can’t do anything without the insurance industry. They can’t even make policies without insurance. Here insurance is not in the centre stage yet and I think it is a critical thing,” Oshin stated.

19Insurance

Pr o f . J o e

I r u k w u , a n i n s u r a n c e e x p e r t h a s c a l l e d o n

insurance operators to take advantage of the local content law and participate actively in the oil and gas sector.

Irukwu who said this in Lagos regretted that the level of discipline on the part of insurance operators have dropped drastically despite enabling laws which they can capitalise on.

Irukwu said “Presently there are enabling laws to guide the pract ice of insurance, but it is so sad that the level of discipline has dropped drastically despite these laws.”

Irukwu, who is one time Managing Director of Nigeria Reinsurance Plc noted that the high level of discipline in the insurance industry in the 60s and 70’s spurred the industry to growth and development despite the absence of enabling laws.

Irukwu who decried the dearth of discipline in the insurance industry now, lamented that the sorry state of affairs in the sector presently was not the case when they were still very much active.

Irukwu therefore called on insurance practitioners to ensure that they abide by the laws guiding the profession adding that the popular saying by international oil companies that Nigerian insurance companies lack capacity to underwrite oil and gas risk has been d e s c r i b e d a s a f a l s e statement as they are merely talking for their pockets just to encourage capital flight.

The insurance expert stressed that the country truly have the capacity to do the 70 per cent oil and gas business which the local content law permits her to cover.

According to him, the insurance operators must ensure that they actually underwrite oil and gas

Experts task insurers on local content law

business and not fronting for international underwriters as has been the case all along.

In his words “These people

that keep saying that we don’t have capacity are only talking for their pockets and we the operators in the insurance s e c t o r m u s t a c t u a l l y underwrite and not front for the captive insurers of these oil majors.”

He charged insurance practitioners to desist from a i d i n g o i l c o m p a n i e s operating in the country to defy rules and regulations guiding oil and gas risk underwriting for their selfish gains.

According to him, ordinarily the oil majors want to play by the rules but some insurance practitioners who want to cut corners force them to do otherwise.

In his words “Sometimes

these oil majors operating in the country want to obey the laws guiding oil and gas risk underwriting, but we always find a reason for them not to.”

According to Irukwu, the d e v e l o p m e n t i s n o t encouraging because the oil companies have tended to see the practice as the standard norm in the industry, thereby throwing crumbs to Nigerian insurance companies while taking the huge chunk of oil business abroad.

Irukwu lamented that it is the high rate of indiscipline in the insurance industry that has made the practice to go on unabated for a very long time, calling on practitioners in the sector to imbibe the character of discipline.

Prof. Joe Irukwu

The country truly have the capacity to do the 70 per cent oil and gas business which the local content law permits her to cover

s s w e e p i n g reforms continue Ain the insurance

industry, the Board of Directors of companies in the sector must now be invo lved in the r i sk management process and m u s t s u b m i t a r i s k management declaration to the National Insurance Commission, NAICOM, at the end of every financial year.

The declaration relating to each financial year of the company shall be signed by at least two directors along with the annual returns and accounts of each company.

A c c o r d i n g t o t h e guideline for developing a r i s k m a n a g e m e n t framework for insurers and reinsurers in Nigeria r e c e n t l y i s s u e d b y NAICOM, from 1st July, 2012, any company that does not comply with the guideline will be duly sanctioned by NAICOM.

A r isk management framework is the totality of s y s t e m s , s t r u c t u r e s , policies, processes and people within the company by which the company i d e n t i f i e s , a s s e s s e s , mitigates and monitors all internal and external sources of risk that could have a material impact on the company’s operations. T h e g u i d e l i n e s e t s m i n i m u m s t a n d a r d required from each and every insurer and reinsurer by which they can provide a reasonable assurance to the C o m m i s s i o n , p o l i c y h o l d e r s , shareholders and other stakeholders that the risks to which they are exposed are being soundly and prudently managed.

As a result, the Board of all insurance and reinsurance companies must provide NAICOM with a Risk Management Declaration stating that, to the best of its knowledge and belief, having made appropriate enquiries that the company has systems in place for the purpose o f ensur ing compl iance wi th the guideline.

Board to submit risk management declaration to NAICOM

20Labour

INDICATION of a looming industrial u n r e s t i n t h e n a t i o n ’ s Po w e r sector over claims by

three workers’ unions in the sector that the Federal Government through the Ministry of Power, has breached agreement reached with them.

The unions have already petitioned the Minister of Labour and Productivity, C h i e f E m e k a W o g u , intimating him with the perceived breaches and the impending industrial unrest should their grievances remained unaddressed after March 31st.

Sweet Crude gathered that if urgent steps are not taken to address the grievances of the unions, days ahead could witness industrial action by workers raising fears of further worsening of the

Industrial unrest looms in power sector

…Labour accuses FG of violating agreement

power situation in the country.

The three unions; of E lec t r i c i t y Employees , N U E E , S e n i o r S t a f f Association of Electricity and Allied Companies, SSAEAC, and the Nigeria Union of Pensioners, NUP, Electricity sector, listed not less than areas where they claimed their agreement with the Federal Government was breached.

In the petition, NUEE, SSAEAC and NUP, lamented that it was quite unfortunate that they had subsisting collective agreements with Government on several issues yet they (unions) were still being trivialized, arguing that “ i t i s w o r r i s o m e t h a t Government is running away from abiding with product of social dialogue/ negotiation.”

In the petition by Joe AJaero and Mansur Musa, General Secretary and P r e s i d e n t o f N U E E ,

r e s p e c t i v e l y ; A b i o d u n Ogunsegha and Bede Opara, G e n e r a l S e c r e t a r y a n d President General of SSAEAC, respectively and Olukayode Ogunbiyi and Temple Ubani, Secretary and President of NUP E lec t r i c i t y Sec to r respectively, said “agreed in the last round of negotiation t h a t t h e C o r p o r a t e Headquarters of PHCN shall remain with full complement of staff until the final liquidation of PHCN when all the labour issues would have been resolved. Barely one week after this agreement was reached, the Power Ministry directed t h a t L P C s ( L a s t P a y Certificates) of employees purportedly transferred to new companies be raised and issued. This remains one of the v e r y d i s t u r b i n g i s s u e s discussed at the Negotiation and we maintained that it would be inappropriate to t rans fer s ta f f f rom one company (a holding company)

t o a n o t h e r ( s u c c e s s o r

c o m p a n y ) w i t h o u t

determining the status of

employment of the concerned

employees.”

“Though, Gover nment

agreed that PHCN cannot be

liquidated without complying

with the required legal process

but it amounts to inconsistency

if action is being taken to wind

down its headquarters by

transferring its workers out,

without concluding the

n e g o t i a t i o n s a n d i t s

implementation. Status quo

ante should therefore be

maintained to uphold the

sanctity of PHCN Corporate

Headquarters in line with the

collective agreement reached

in this regard.”

”Though 50% salary increase

was agreed to as f inal

settlement of the balance of

137% negotiated salary

increase, effective 1stJune,

2011, it is distasteful to report

that it is yet to be fully

implemented.

Protesters

ETOLEUM and

Natural Gas Senior PStaff Association of

Nigeria, PENGASSAN, has

implored the Federal

Government to review the

nation’s immigration policy

to check influx of illegal

immigrants into the country.

Speaking on the spate of

g u n m e n a t t a c k s a n d

w o r s e n i n g s e c u r i t y

situation in the country,

President of PENGASSAN,

Comrade Babatunde Ogun,

said that the review of the

immigration policy would

help in reducing crime rate

especially the involvement

of aliens.

According to Ogun, many

people from Nigeria’s

neighbouring countries

come into the Nigeria

without proper papers or

documents and without

purpose, lamenting the

porosity of the nation’s

b o r d e r s a n d l a c k o f

commitment on the part of

the officers and men of the

N i g e r i a I m m i g r a t i o n

Service, NIS.

He said “There have been

several reports of cases of

attacks on the Nigerians in

the Northern part of the

country by herdsmen from

s o m e n e i g h b o u r i n g

countries. More worrisome

is the Al Quada dimension

to the insecurity in the

country. I think the review of

the immigration policy

needs to invo lve re -

orientation, training and

retraining of the officers and

men of the Niger ian

Immigration on protecting

our borders.”

He argued that the laxity

of the policy also allowed

foreigners to take jobs are

meant for Nigerians, all in

the name of expatriates,

stating that whereas “Some

of the foreigners who parade

as expatriates have no

specialization that can

qualify them for being in the

country. With this, they take

our jobs and increase

unemployment in the

country and violate the

Nigerian law on expatriate

quota.”

Victor AHIUMA-YOUNG

INSECURITY: PENGASSAN calls for immigration policy review

Victor AHIUMA-YOUNG

21Labour

ORGANISED Labour has d e s c r i b e d t h e leadership

of the Bureau of Public Enterprises, BPE, as a serial liar that must not be trusted by any right thinking Nigerian.

Speaking against the backdrop of statement credited to BPE that no less than 17,000 ghost workers have been uncovered in the Power Holding Company of Nigeria, PHCN, the National U n i o n o f E l e c t r i c i t y Employees, NUEE, Senior S t a f f A s s o c i a t i o n o f E lec t r ic i ty and Al l ied Companies, SSAEAC, and the Niger ia Union o f Pensioners, NUP, Electricity sector, challenged BPE to

Union challenges BPE on PHCN ghost workers

Victor AHIUMA-YOUNG

publ i sh the names o f purported ghost workers.

Leaders of NUEE, SSAEAC and NUP did not stop at daring BPE to publish the names of the so-called ghost workers in PHCN, but to also to immediately forward the names of the supposed ghost workers to the appropriate agencies for arrest and

prosecution.President of SSAEAC,

Comrade Bede Opara whom spoke on behalf of other leaders, linked the purported ghost workers to the biometric v e r i f i c a t i o n e x e r c i s e conducted by BPE and argued that not even all the regular employees that participated in the exercise were captured and cleared by the consultant s a d d l e d w i t h t h e responsibility of verifying all employees in the power sector.

Opara expressed disgust with the whole process and noted that the affected staff had not been paid their m o n t h l y s a l a r i e s a n d a l l o w a n c e s s i n c e t h e controversial verification exercise because they were been referred as ghost workers.

According to him, “Several of such staff which included chief executive officers,

general managers, national officers of the in-house union etc who are visible in their various work locations during the verification exercise were not captured and have been denied their monthly emoluments for over three months.

“This is a high level of i n s e n s i t i v i t y t h a t a n employer/government could deny its workers their legitimate remunerations and in-turn referred them as ghost workers. This is just an attempt to call a dog a bad name in order to hang it. Definitely it would be an exercise in futility,” he said.

Corroborating Opara, G e n e r a l S e c r e t a r y o f SSAEAC, Mr. Abiodun Ogunsegha, a Lawyer, alleged that many names were imported by the ministry of power during the verification exercise.

This is a high level of insensitivity that an employer/government could deny its workers their legitimate remunerations and in-turn referred them as ghost workers

PHCN Workers outside the office premises

A T I O N A L Association of NNiger Del ta

Students has called on Pr e s i d e n t G o o d l u c k Jonathan to prevail on his M i n i s t e r o f Po w e r, Professor Bath Nnaji, to concentrate on how to address the issues raised by the unions in the power sector or get him sacked.

The s tudents in a statement in Benin by their President, Comrade Grant Gbeloba, also called on the Minister to call his aides to order and stop harassing or intimidating the General Secretary of the National Union of Electricity Employees, NUEE, Comrade Joseph Ajaero, saying that they would no longer fold their hands and watch him being harangued for just no cause.

They said that they had watch with dismay series of newspapers sponsored publications alleging the roles purportedly played by Comrade Ajaero in the ongoing power sector reform.

A c c o r d i n g t o t h e statement, “ We have also noted with dismay the way and manner some job s e e k e r s w h o h a v e b e c o m e s o v e r n i g h t patriots, sudede3nly made the workers’ struggle for labour issues to be fully r e so lved be fo re the privatization of PHCN an Ajaero affair. One thing is clear; Comrade Ajaero is an employee of NUEE and therefore must carr4y out every instruction given to him by the union to the letter. It is therefore, unfortunate for anyone to single him out as an enemy o0f the reform programme of the power sector.”

“When the President forwarded the name of Prof. Bath Nnaji to the National Assembly for consideration as Minister, PHCN workers under the aegis of NUEE protested it. However, the President went ahead to appoint him.

NANDS advise government on labour issues

Gabriel ENOGHOLASE

22Solid Minerals

Abuja – THE F e d e r a l Government says Nigeria w o u l d b e

producing 3 million tons per annum of liquid steel by the y e a r 2 0 1 5 , i n i t s de ter minat ion fo r the minerals and metal sector to contribute meaningfully to t h e g o v e r n m e n t ’ s transformation agenda. Minister of Mines and Steel Development, Arc. Musa Mohammed Sada, disclosed this during the official commissioning of the African Foundries Limited billet mill plant in Ogijo, Ogun state.

T h e m i n i s t e r commissioned the plant, w h i c h i s c a p a b l e o f producing 500,000 tonnes per annum of billet, as part of his official tour of the Southwest part of the country.

Sada pointed out that despite the role played by the

Nigeria targets 3mt/yr of liquid steel

Oscarline Onwuemenyi

Liquid Metal

m e t a l s e c t o r i n a n y industrialised economy, the Nigerian metal and minerals sector was yet to reach its full potential, particularly in the d e v e l o p m e n t a n d

consumption of key metallic products such as iron, steel and aluminum. He said the sector is faced with several challenges such as non-availability of requisite legal and regulatory frame work, non- completion of required infrastructure, roads, rails, waterways, mines, limited raw material sources, in -adequate power supply among others.

Arc. Sada reaffirmed the present administration’s quest for Nigeria to become one of the twenty most industrialized nations by the year 2020.

He sa id the Federa l government would continue to partner with development partners in the sector for a viable option to move the minerals and metal sector forward.

According to him, “In view of the quest of the present administration to become one o f t h e t w e n t y m o s t industrialized nations by the year 2020,it has become compelling to engage all

stakeholders in the sector in search for a viable option to move the sector formed.”

He urged the development partners in the nation’s minerals and metal sector to take advantage and invest in the recently discovered iron ore deposits around the country to enable them integrate their facilities for more sustainable operations.

He said government was determined to “provide necessary infrastructure and industrial service clusters through collaboration with relevant ministries such as ministries of transport, power and works to promote policies aimed at catalyzing i n d i g e n o u s c a p a c i t y e x p a n s i o n o f s t e e l production.”

He added that, “Our current target is to create an i n v e s t m e n t f r i e n d l y environment towards the development of steel raw materials reserves of the nation to ease problem of raw m a t e r i a l s , p r o m o t e competitiveness of value

added product so as to stimulate domestic and export demand of minerals and metal products.”

The minister commended the Af r ican Foundr ies L i m i t e d f o r t h e h u g e investment in the minerals and metal sector of the country, adding that, it was a clear demonstration of their faith and support for policies and programmes of the present administration.

While fielding questions from newsmen , the minister disclosed that President Goodluck Jonathan had approved the establishment of board for the solid minerals deve lopment fund, he explained that the legal and regulatory frameworks in the nation’s minerals and metal sector has provisions for the establishment of the solid minerals development fund.

He added that international donors like the World Bank were also ready to give financial support to solve some of the militating problems facing the sector.

Our current target is to create an investment friendly environment towards the development of steel raw materials reserves of the nation to ease problem of raw materials

23Solid Minerals

Y O - Stakeholders in Nigeria’s U

power sector have asked the government to utilise the nation’s coal deposit as source of power generation.

In a communiqué at the end of their bi-a n n u a l j o i n t generation/operation planning meeting in Uyo, Akwa Ibom State capital, Friday, the stakeholders, who were mainly managers at the various generation and transmission stations across the country, said the na t ion ’ s huge quality coal deposits should be exploited for the benefit of power generation.

T h e y s t a t e d t h a t Nigeria had a lot of energy resources hence the need to harness the unexploited sources of p o w e r g e n e r a t i o n capacity to boost power supply in the country. Specifically,

T h e f o r u m , specifically, harped on t h e n e e d f o r t h e diversification into coal thermal stations in areas of abundant coal deposit like Enugu, Benue, Nassarawa and Kogi States.

T h e c o m m u n i q u e raed: “Also, it has been obse r ved tha t the c o u n t r y h a s t h e potentials for additional hydro plants at various locations.

“These should be harnessed as hydro plants have proved to be highly reliable in our h d r o - t h e r m a l generation mix”.

ABUJA - The F e d e r a lGovernment has said it was w i l l i n g t o

w o r k w i t h p r i v a t e development partners to ensure that the minerals and metal sector contributes significantly to the nation’s economic development.

The Minister of Mines and Steel Development, Arc. Musa Mohammed Sada dropped the hint during his visit to Dangote Cement Group in Ibese, Ogun State as part of his official tour of the South West part of the country.

T h e M i n i s t e r , w h o expressed delight at the progress made so far by the

Nigeria to partner private investors in minerals dev’tOscarline Onwuemenyi

Stakeholders urge utilisation of coal for power

cement company, pointed out that due to the level of involvement of mining operators such as Dangote cement Group, they are not jus t s t akeho lde r s bu t development partners in the sector.

Arc. Sada said government as a regulator in the minerals and metal sector of the country would continue to partner with development partners so as to move the sector forward.According to him, “I believe with partners like Dangote Group, our economy will grow. The Group’s level of involvement in the sector is g r e a t ; i t i s n o t j u s t s t a k e h o l d e r s b u t development partner, we will continue to partner and encourage Dangote Group,

until the country gets to where it is supposed to be by the year 2020.The minister said his official tour of the south west of the country indicated that some of

the mining operators were willing to take up the challenge of growing the minerals and metal sector of the country.

Coal

Solid Mineral

24Freight

OPHER marine s e r v i c e s h a s s u c c e s s f u l T

constructed the first ever made in Nigeria fiber boat that can be compared to any other boat in the world.

Showcasing the newly constructed boat at the on-going Nigerian Maritime Exposition (NIMAREX), Managing Director of Topher Marine, Mr. Chris Ajayi stated that it took the company four months to put the boat together adding that with the experience gathered so far, it will lesser time to build another boat.

He disclosed that the company has about 3 Naval architects working in his boat yard and are currently working on the orders of some of their clients who came to NIMAREX.

Besides the construction of boats, Topher Marine is also into boat trading, boat repairs, water hyacinth clearing, supply of marine equipment and maritime vocational training.

Topher Marine which has technical partners in Sri-Lanka is also into maritime education as the company in collaboration with the University of Lagos to start courses in boat building, while driving marine welding and out-board engine repairs.

He explained that his firm has been able to demystify the science of boat building adding that the technology is open to every Nigerian who wants to make a career of it.

Meanwhile, the Nigerian Maritime Exposition has endorsed the boat built by Topher Marine saying that the construction of the boat is one of the biggest m a r i t i m e p o t e n t i a l s waiting to be exploited.

Speaking to newsmen at the end of the three day e v e n t , N I M A R E X chairman Mr, Collins Egwuagu said that the ingenuity of the owners goes to show vast maritime potentials in the country.

Topher Marine builds first fiber boat

Godwin ORITSE

TH E

International B a r g a i n i n g Forum (IBF) a b o d y o f

seafarers has warned its members to steer clear Nigerian waters as they declare the country ‘high risk area’ following the incessant attacks on vessels and crew members.

The categorization which has a damaging cos t implication on shipment into Nigeria came as result of what the body ca l led increasing number of attacks on vessels and kidnap of crews.

Vanguard gathered last week that the designation will come into effect on April 1, 2012 in order to allow ship operators to make any necessary preparations.

It will afford the same benefits and protections to seafarers in those areas as the High Risk Area in the

Pirate attack: Nigeria named ‘high risk area’Godwin ORITSE

Pirates

Gulf of Aden and around Somalia, including: the need for enhanced secur i ty measures; advance notice of intent to enter the area; the right to refuse to enter it; and a doubling of the daily basic wage and of death and disability compensation while within the area of risk.

The High Risk Area provisions apply to all ships operating under an IBF agreement.

The ITF’s Fair Practices Committee Steering Group will decide on whether to also apply them to all ships under non-IBF ITF agreements.

IBF agreements on high risk areas also provide an indicator of good practice to national flag registers. The provisions are set out in full below.

The IBF provides a forum for discussion between the International Transport Workers’ Federation (ITF) and its member unions, and the maritime employers in the Joint Negotiating Group (JNG).

It covers waters of Benin and Nigeria, including: ports, t e r m i n a l s a n d r o a d s anchorages, the delta of the Niger river, other inland waterways and port facilities, except only when the vessel is attached securely to a berth or SBM facility in a guarded port area.

Under the declaration, all companies operating vessels or installations on the waters around the duo of Nigeria and Benin should have sufficient security arrangements to safeguard their personnel, given the nature of the risk, and should provide adequate pro tec t ion , adv ice and compensations to the crews.

Details of the declaration that were made available to S h i p p i n g P o s i t i o n Dailyindicate that:

Upon the vessel’s entry into and, further, throughout the entire stay in the Area as specified above, seafarers m u s t b e p r o t e c t e d b y increased security measures that will provide adequate levels of safety and security on

board, such as the Best Management Practice.

In the ports of the above listed countries and inland waterways and approaches to these ports, including offshore installations, extra secur i ty measures fo r r educ ing the vesse l ’ s v u l n e r a b i l i t y t o a n unsanctioned approach and boarding should be adopted. Such measures should, inter alia, provide for an enhanced look-out and an emergency alert/action plan securing sufficient safety for the crew and reliable contact with the authorities. The sufficiency of such extra security m e a s u r e s s h o u l d b e determined depending on the vessel’s type, size and freeboard.

Prior to approaching a port, detailed local advice about the security situation should be obtained and arrivals and departures timed to coincide w i t h s e c u r i t y p a t r o l s operated by respective gover nment fo rces , i f available]

25Freight

NI G E R I A has been described a s potentially

endowed to serve as hub station for seaports in the African continent, but experts have warned that such opportunity may sleep away due to a mirage of bottlenecks bordering on infrastructural decay and legislative inadequacies.

Participants who spoke at the on-going Niger ia M a r i t i m e E x p o s i t i o n NIMAREX 2012, noted that just as the energy sector has been in the doldrums due to protracted delay in the passage of the Petroleum Industry Bill (PIB), the ports system is similarly in chains owing to the neglect of the Ports and Habour Bill.

I n a p a p e r t i t l e d “Development of the Hub Port Concept for the African Atlantic Coast: Nigeria as a Focal Point”, Managing Director of the Lagos Deep Offshore Logistics base (LADOL), Dr.

Amy Jadesimi, warned that the time had come for a realistic approach to the situation in the nation’s interest.

According to her, the issue of a hub status for the African states had become a “sink or swim” paradox for now, adding that “Nigeria has no choice” than to act fast in the face of challenges currently posed by South-Africa, Ivory Coast and Ghana.

She noted that with all the advantages enjoyed by the country such as the control of over 25 per-cents of the African population, a 25 per-cents market share of the ECOWAS ports activities as well as being the second highest host of the container traffic in the sub region, the country is no doubt a natural hub station.

The LADOL boss also noted that the need to create a general Maritime plus Oil & Gas Integrated hub for the sub region is further boosted by the realization that 26 major ports in West Africa handled a total of 250 million tons of cargo in 2000 of which 66 percents were oil exports.

“Deep offshore market is a time limited opportunity for Nigeria to overcome the

PORTS DEVELOPMENT:

Nigeria may lose African hub status

Godwin ORITSE

natural resource course. Over 100 billion USD will

be spent on deep offshore projects in West Africa.

“Nigeria risk losing out to its near and far neighbors, and become increasingly s e r v e d b y transshipment…just as well developed ports will receive the larger ships (while) others will be served in transshipment in feeder vessels”, she said.

Dr. Jadesimi however pointed out that despite these arrays of endowments, the country is nonetheless f a c e d w i t h s t r o n g competitors who may grab the opportunity to shine, should Nigeria slack in taking her rightful position in this regard.

To attain the status and keep it, she opined that Nigeria must take steps to surmount “ well known

national challenges” such as “absence of deep water container transshipment terminals, lack of adequate berthing capacity, as well as lack of an integrated land d i s t r i b u t i o n s y s t e m , particularly for transit traffic”.

Other challenges which m u s t b e s u r m o u n t e d , according to her, included the lack of essential supporting infrastructure such as rail system, congested road n e t w o r k , b u r e a u c r a t i c b o t t l e n e c k s a n d h i g h maritime and freight charges.

She however raised the hope noting that the Nigeria Ports Authority (NPA) had commence the dredging and wreck removal to allow the free movement of large container vessels currently calling at the Lagos ports, courtesy of Maersk lines.

She said on its part, LADOL had competed and currently

operating a 100 per-cents indigenous facility with which it provides a fully i n t e g r a t e d r i g r e p a i r p l a t f o r m , j u s t a s t h e organization had taken steps t o a d d r e s s m a n p o w e r shortage by partnering with Samsung of South Korea to e s t a b l i s h a t r a i n i n g institution for the industry.

Speaking in similar vein, Managing Director of NPA, Omar Suleiman, noted that if the country fails to take the bull by the horn, other countries with far less advantages will rule the waves to the detriment of Nigeria.”With a population of just three million people, Togo is trying to establish a deep seaport. If they bring in a 10,000 TEU vessel, where is the content going, if not N i g e r i a ? ” h e a s k e d rhetorically.

The NPA boss who raised

the hope that deep seaports will soon emerge with developments at Akwa-Ibom, Olokola and Lekki, however lauded the establishment of LADOL base in Lagos, saying, “with indigenous organizations such as this springing up in Nigeria, I can say that all hope is not lost”.

Chairman of the Ports Consultative Council (PCC), Otunba Kunle Folarin, warned that for the hub station to be a reality in Nigeria, all hands must be on deck to improve services such as ships turn-around, ports and cargo security and a codified tariff structure.

He called on more investors to take a leap from the L A D O L i n i t i a t i v e b y establishing facilities which would promote local content and development in line with government’s aspirations.

Containers

26Technology

Introh e i d e a o f a l t e r n a t i v e e n e r g y i s nothing new to

society. In fact, humanity T

BIOFUELS: Production, Benefits and Technology

has always grappled with the need to use alternative s o u r c e s o f e n e r g y especially when current resources are running low. During medieval times, people realized that the main source of fuel, which

was wood, was becoming an increasingly scares resource. This led to the use of coal as an alternative source of energy. Likewise, before the 1800s, whale oil was the most favored source o f l amp and lubrication oil. But by mid-

century, the stock was heavily depleted, and fossil fuel became a valuable commodity. Because of these changes in the past, the carbon emission levels in the atmosphere increased to record levels.

What is Alternative Energy?Based on the foregoing, A l t e r n a t i v e e n e r g y Sources could be referred to as any source of energy designed to limit or r e p l a c e a n environmentally harmful form of energy. Today, climate change is the p r i m a r y m o t i v a t i o n behind modifying energy sources. Through science, new means are being developed to harness power from untapped resources and even create cleaner ways of using some of the old resources. Also, an effort to reinvent the power grid has made

the transmission of power more efficient.

Common types of alternative energy

1. Biofuel and ethanol: Biofuel and ethanol are plant-derived substitutes of gasoline for powering vehicles.

2. Solar energy: Solar energy is generating of electricity from the sun. It is split up into two types, thermal and electric e n e r g y. T h e s e t w o subgroups mean that they heat up homes (and water) and generate electricity respectively.

3. Wind energy: Wind energy is generating of electricity from the wind.

4. Geothermal energy: Geothermal energy is using hot water or steam from the Earth’s interior for heating buildings or electricity generation.

5. Hydrogen: Hydrogen is used as clean fuel for airplanes, spaceships, and vehicles.

BIOFUELSBiofuel and Types.Biofuels are fuels made

from recently l iving organisms. They can be d i v i d e d i n t o t h r e e categories:

* F i r s t - g e n e r a t i o n

biofuels - made largely

from edible sugars and

starches,

*Second-generat ion

biofuels - made from

nonedible plant materials,

and

* T h i r d - g e n e r a t i o n

biofuels which are made

from algae and other

microbes.

Biofuel is one of the most p r o m i s i n g t y p e s o f alternative energy source. In fact, there are actually several different types of biofuel. The different types of this fuel also vary partly depending on the d i f f e r e n t t y p e s o f applications that they are intended for. For example,

Diagram showing how Biofuel is produced from Algae. Source: dailytech.com

Neat ethanol on the left (A), gasoline on the right (G) at a filling station in Brazil. Source: Wikipedia CONTINUES ON PAGE 27

Phone: 08027181717, e-mail: jimlaw2004@yahoo.com

Jim Rex-Lawson MOSES

27Technology

t h i s i n c l u d e s t h e distinction made between biodiesel and biogas. These are obviously intended for use with different applications, such as diesel engines versus s tandard car engines.

However, perhaps what proves to be even more of an important distinction as to how these special t y p e s o f f u e l s a r e categorized is based on the type of materials and resources that they are derived from. First, all

BIOFUELS: Production, Benefits and Technology

types of biofuels are derived from some type of biomass. Biomass refers to a wide variety of organic and natural resources that include solid biomass, liquid fuels and different types of biogases.

Biofuels can actually be extracted or derived from both living and nonliving materials. However, all of these materials and original resources must have been organic and not synthesized in order for them to truly be considered as a biofuel. As stated above, some of the more p reva len t origins that are common in regards to biofuel

derivations are algae, decomposed wood and vegetable oil. Another special type of biofuel is bioethanol. It is an alcohol which is produced through the process of fermentation of sugars from plant materials, such as sugar and starch crops.

Benefits

*Does not require any radical changes to switch to the use of biofuels- unlike the difficulties in s w i t c h i n g t o o t h e r renewable energy sources such as solar and wind power.

*Are cheaper than fossil fuels. Many governments

are now offering tax incentives to buy greener cars that run on biofuels ( e t h a n o l b e i n g o n e example).

*Are considered ‘carbon neutral’ by some people. This is because the carbon dioxide they release when burnt is equal to the amount that the plants absorbed out of the atmosphere. Therefore, they don’t contribute to global warming. However, it does require some fuel to power the machinery on the farms where biofuels are produced. Still, they are better than fossil fuels!

Research suggests that they reduce ca rbon emissions by 50-60%.

*Reduce dependence on foreign oils. Oil fluctuates in pr ice rapidly, so changing to biofuels will help buffer against the change.

*Emit less particulate pollution than other fuels, especially diesel.

*Are renewable sources of energy as you can just keep producing more.

* E t h a n o l i s v e r y inexpensive to produce.

*Can he lp prevent engine knocking.

CONTINUED FROM PAGE 26

Diagram showing how biofuel is produced. Source: Google Images Above is an excellent beginner tutorial on producing biodiesel.

Source: Google Images

Phone: 08027181717, e-mail: jimlaw2004@yahoo.com

Topher zang

29

Yenagoa - The a n c i e n t settlement of Sagbama in the Sagbama

local government area of Bayelsa State is facing one of its worst environmental degradation in recent times.

Unl ike several o ther communities in the state being devastated by oil spills including the self inflicted spill by illegal refinery operators in the deep m a n g r o v e s w a m p t h e anc ien t se t t l ement o f Sagbama is being terrorized on large scale by marine erosion.

A b o u t f o u r h u n d r e d families whose homes are located on the bank of the River Forcados may be rendered homeless at the peak of the flood season in September when the velocity of the river would be high.

Also, a private housing estate in the community located a few metres from the troubled river bank is being threatened.

Already, a large portion of t h e c o m m u n i t y l a n d including part of its access road and market has been lost to the surging river with more on the verge of being eroded.

Interestingly, Sagbama is

Marine erosion threatens Bayelsa community

Samuel OYADONGHA

one of the few communities that could be access by road in the predominantly oil and gas rich state.

Some of the natives whose homes are on the throes of being washed away are now living in constant fear especially with the flood

season fast approaching.When Sweetcrude visited

the community it was learnt that a recent attempt by the government to tackle the e r o s i o n m e n a c e b y rehabilitating the troubled spot ended in fiasco when the mass of rock use in protecting the river bank collapsed and further ate into the already narrow road.

It was reliably gathered that the control measure failed b e c a u s e a p r o p e r e n v i r o n m e n t a l i m p a c t a s s e s s m e n t w a s n o t conducted before the job was done.

The troubled area, a source told Sweet Crude used to be the opening to a creek that linked the River Forcados in the Sagbama flank and River Nun in Opokuma several years ago before it was sand filled in the course of the dredging of the river in the eighties by the administration of late Chief Melford Okilo when the Bayelsa was in Rivers State as part of

measures to protect the community against erosion.

Troubled by the renewed erosion threat, the terrified people of Sagbama have expressed concern over the fate of their community.

Chairman of Sagbama Community Development Committee, Chief Simeon Suoyo, who conducted Sweet Crude round the devastated area, warned that unless urgent steps are taken to save his people from the erosion threat, about four hundred families stand the risk of being sacked when the river level rises.

“As you can see, our people are in grave danger and living in constant fear,” he said pointing at the collapsed area w h i c h w a s r e c e n t l y rehabilitated.

“It was a miracle that no life was lost the day the place collapsed,” he noted, adding, “it could have been worse if people or vehicles were passing that fateful night.”

Erosion threatened community

Recent attempt by the government to tackle the erosion menace by rehabilitating the troubled spot ended in fiasco when the mass of rock use in protecting the river bank collapsed

SPDC hands over N10m school block

A R R I - I N furtherance of h e r W

determination to enhance quality education in its areas of operations, the S h e l l P e t r o l e u m Development Company, S P D C , W a r r i h a s c o m m i s s i o n e d a n d handed over a N10m renovated four class room block to the Orugbo community in Warri South council area of Delta State.

At the commissioning ceremony held at the school play ground, SPDC representative, Dr. (mrs) C o k e r c h a r g e d t h e management and the community leaders to ensure that the structure be maintained and the school kept clean, saying that the renovation was part of her desire to enhance quality education in the country.

She noted that education is the best legacy to bequeath to our children who are the future leaders of our country. She charged the pupils of the school to take their studies very seriously, adding that it is only when they are educated that they can be useful to themselves in life and self sustaining.

Earlier, the management committee secretary of the Orugbo community, Mr. Stephen Ejejigbe express apprec ia t ion to and commended SPDC for the gesture but requested that more recreational facilities a n d e m p o w e r m e n t programme be granted to them, assuring that the renovated classroom block would be well guarded.

Emma ARUBI

30

PO R T

HARCOURT - F O R M E R p r e s i d e n t Movement for

the Survival of Ogoni People, MOSOP, Ledum Mitee has called for a more concrete approach towards addressing c h a l l e n g e s o f underdevelopment in the Niger Delta region.

Mitee, Sofiri task FG on N’ Delta issues

Jimitota ONOYUME

Gas flare in the Niger Delta

Mitee who spoke in Port Harcourt at the public presentation of a book “Presentation and Reality: Documenting the amnesty process in the Niger Delta region of Nigeria” said the o n g o i n g a m n e s t y programme of the federal government was yet to address chal lenges of underdevelopment and

poverty in the region. According to him, the programme had only created unhindered oil exploration and operations in the region.

He said to effectively tackle problems of the region the government should go beyond the amnesty and take s t e p s t o a d d r e s s infrastructural and poverty problems in the region.

“Uninterrupted flow of oil seems to be the focus of the federal government in the region. The people of the region are poor government is only getting more revenue with the amnesty programme which has not translated into development for the region”, he said.

He said it was worrisome that the federal government

Emma ARUBI

Petroleum products flood Delta

S A B A - D e l t a S t a t e a n d environs is now A

flooded with petroleum p r o d u c t s f o l l o w i n g massive loading of fuel at Matrix Energy Depot at Ifie near the Warri Refining a n d P e t r o c h e m i c a l Company, WRPC, to curb the incessant fuel scarcity in the Niger Delta region.

Investigations reveal that it took security agents hectic time to control desperate drivers of fuel tankers that thronged Matrix Energy Depot to lift petrol for onward delivery to the consumers.

There had been fuel shortage in some parts of Delta State in the past few weeks with some filling stations that have the c o m m o d i t y s e l l i n g between N110 and N150.

B u t f o l l o w i n g information that Matrix Energy Limited had taken delivery of petroleum products, oil marketers from across the Niger Delta r e g i o n h a v e b e e n thronging the company’s plant at Iffie to load the products.

only picked the amnesty programme from the long l i s t o f o t h e r s t e p s recommended by the Niger Delta Technical Committee that should go with the amnesty towards achieving lasting peace in the region. Mitee said the recent report released by the UNEP on Ogoni was a classical documentation of the threat to live in the region.

Earlier, one of the authors of the book published by Centre for Advanced Social Science, CASS, Dr. Sofiri Peterside said the book was a critical appraisal of the amnesty programme in the region and its implication for the future of the area. He said findings while working on the book showed that even with the amnesty programme the psychology of peace had not been taken care of, the people were still b i t t e r w i t h t h e underdevelopments and poverty in the region.

31The

Questionjohniyene@yahoo.com

hen the debate for the total deregulation of the

upstream sub-sector of the petroleum industry was Wraging, I mentioned to the few who cared to listen

that what the federal government wished to achieve was not the

deregulation of the sub-sector but to divest of the subsidy burden.

We did not have long to wait before the federal government

pegged the price of petrol at N140.00 per litre, not bothering to

explain to Nigerians how a deregulated price regime came by a

fixed pump price for all the grades of a product that was imported

or manufactured under different circumstances. The value of this

recall to our discourse is that the petroleum ministry and indeed

the federal government have by virtue of knocking out a

whopping N32.00 per litre from the old subsidy regime, become

better positioned in every sense to improve on the semi-efficient

system of supplying petrol to the points of demand in the polity.

But that is not what Nigerians are experiencing; it appears that

instead of improving the lot of Nigerians in relation to the supply

of petrol, the long queues of old have returned, the black market is

thriving and darkness has swooped on cities starved of this direct

source of powering homes, offices and the thousands of small

scale industries that sustain the Nigerian economy. What is

responsible for this situation and what can we start to do about it

as civilised folk? If the savings we have made from the subsidy

reduction have worsened our accessibility to the product it simply

means that the folk who are on call to manage the gains for our

mutual benefit are either mismanaging them maliciously or

ignorantly. Either way, we owe ourselves the duty to review the

performance of the sub-sector nearly three months after the

subsidy reduction to re-strategise for a more efficient sub-sector.

The Honourable Minister for Petroleum Resources is a beautiful

lady who has the potential for winning awards for Nigeria in more

fields of human endeavour than I care to enumerate here but I am

emboldened by the findings of my study of her non-achievements

at the Petroleum Ministry, to infer that she is a failure at that

ministry. Alison-Madueke had her work defined for her in the

challenges presented by the ailing refineries, greedy importers,

production sharing contracts which would only benefit Nigerians

when fossil fuels are outdated, a regulator that is so ponderous as

to require fragmenting to allow for efficiency, an oil and gas

industry that has no defined place for the role of the owner

occupier of the explored and exploited land, unsafe and

unhealthy production environments that have attracted the

intervention of the United Nation’s Environmental Protection

organs, etc. These are not the kind of problems you resolve with

the plumes and colours that Alison-Madueke has become famous

for or that are settled by efficient mid-level technocrats, the

whispering hi-five buddies of the minister who pretends to mingle

with subordinates she has successfully emasculated to the

detriment of the whole country.

The Minister for Petroleum Resources is not a bad person and I

have no personal scores to settle with her. I once had tea with her

mother at their GRA Port Harcourt home while waiting for the

very refined and respectable lady prepare a bouquet of roses from

her garden that I had planned to present to a friend. The

Honourable Minister is no doubt a lady as decent and as

respectable as her dear mother but the office she happens to

occupy is responsible for the success or failure of this country’s

fiscal strategies and by implication, the viability of our society.

Pregnant women, accident victims, critically ill compatriots have

lost their lives because they could not be transported

expeditiously to medical facilities. And some medical facilities are

90% dysfunctional because of lack of petroleum products to power

their generators. If we discount the businesses that have closed

down, the losses incurred by the economy for the stagnation of

business activities in the real sector as well as the losses suffered

by the economy in recreational activities suspended for lack of

energy, we cannot afford the loss of human lives that accrue daily

to the country because of the inability of a minister to harness a

bountiful resource for the benefit of the country.

Please join me in calling upon the Hon. Minister for Petroleum

Resources, Mrs. Diezani Alison-Madueke to come alive to her

responsibilities or resign.

ALISON-MADUEKE,

work or resign

PO R T

HARCOURT: C R U D E o i l t h e f t h a s become a major

problem in the Niger Delta region.

According to Shell the daily exportation of about 140,000 barrels of oil is being threatened by this ugly act going on massively on its Nembe creek trunkline in the region.

The oil giant recently led media men in Port Harcourt on an over-fly of the Nembe creek trunkline to see things for themselves. There were over fifty illegal bunkering points around the trunkline. These oil thieves gather the crude into Cotonou boats and then sail into the high sea.

Their actions do not only constitute threat to oil exports but pose a major risk to the environment.

L a m e n t i n g t h e s a d incident, the Managing Director of the multinational o i l g i a n t , M r. M u t i u Sunmonu fielded questions from journalists said illegal bunkering had also made it difficult to do complete clean up of some oil spill impacted areas in the region.

Shell laments rising crude oil theft Jimitota ONOYUME

Crude oil thief

Mr Sunmonu who sounded very wor r ied enjoined government and other stakeholders to take urgent steps to tackle the problem. He said all hands should be on deck to save the country greater loss from the callous activities of the oil thieves.

He also called for increased security around the Nembe creek trunkline.

“I feel extremely saddened by what is happening, display of criminality and lack of care. I am extremely worried. Frankly something has got to be done otherwise our operation in the region will not be sustainable. This is very, very worrisome.”

He said the level of oil theft and illegal refining of c r ude in the reg ion constitutes a major threat to the environment. “I am really worried about the d a n g e r t o t h e environment”.

According to him, there are a lot of international agencies that had indicated interest to develop the agric sector in the region but were reluctant to invest because of the level of crime.

While assuring that as a multinational oil firm, Shell would continue to do its best in the fight against oil theft and other related crimes threatening its operations, Mr. Sunmonu said the crusade should not be left to the oil giant alone.

“This is not a war that Shell alone can win, we need a coalition of efforts.”

The Managing Director fur ther recommended creat ion of jobs and development of the region as steps towards resolving the problems.

He said Shell had been a c t i v e l y i n v o l v e d i n creating empowerment opportunities for people in the region through various s c h e m e s a n d s k i l l s acquisition programmes.

The level of oil theft and illegal refining of crude in the region constitutes a major threat to the environment. “I am really worried about the danger to the environment

Sweetcrude is a Publication of VANGUARD MEDIA LIMITED, Vanguard Avenue, Kirikiri Canal, P.M.B.1007, Apapa. Website: www.vanguardngr.com (ISSN 2251-0001) Editor: HECTOR IGBIKIOWUBO. Phone: 08023145252, All correspondence to P.M.B. 1007, Apapa Lagos.