Majorwaves Energy Report September 2021 edition by majorwavesenergyreport

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SUSTAINABILITY

INFRASTRUCTURE

SEPTEMBER Exploring PaanershipsEDITION to Transform Nigeria’s Hydrocarbon Industry Sylva Commissions NCDMB Research Incubation Centre, Launches $50m R&D Fund Shell Restates Commitment to Research, Development in Nigeria Seplat, Orjiako Win Global Awards for Outstanding Indigenous Peeormance Dubai Eases Travel Restrictions Ahead of Africa Oil Week in November 2021 Cost of East African Oil Pipeline Hits $5b as Risk Averse Banks Step Away from Project EquatoriaI Guinea’s Minister of Mines & Hydrocarbons Issues Oil & Gas Worker Vaccinations Mandate

ENERGY WOMAN

“ Women Make Up Just 1% of CEOs in Oil and Gas Industry…” Patricia Simon-Haa Majorwaves Energy Report MD/CEO of AFTRAC Limited and Co-Founder, SEPTEMBER 2021, Vol 4 No 9 Women in Energy Network (WIEN).

Majorwaves Energy Report SEPTEMBER 2021, Vol 4 No 9

CONTENTS

DPR Plans Additional 14 Billion Barrels, 8TCF of Gas Reserves

Shell MD Advocates for Gas Producing States In Nigeria to Have Industrial Clusters

Dangote Partners NCDMB on Oil Sector Research, Devt

Sylva Commissions NCDMB Research Incubation Centre, Launches $50m R&D Fund

NCDMB, Wabote Win African Local Content Icon Award

TCN Can Evacuate More Bulk Electricity to Distribution Load Centers — MD

NIMASA Boss Emphasizes Synergy as Key to Successful Fight Against Maritime Crimes

EquatoriaI Guinea’s Minister of Mines & Hydrocarbons Issues Oil & Gas Worker Vaccinations Mandate

Exploring Partnerships to Transform Nigeria’s Hydrocarbon Industry

Women Make Up Just 1% of CEOs in Oil and Gas Industry -Patricia Simon-Hart

REA Signs 5th OBF Grant Agreement with Six Solar Homes System Companies

Majorwaves Energy Report SEPTEMBER 2021, Vol 4 No 9

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A Realistic Net-Zero Target Heightened calls have continued unabated regarding the price being paid for energy across Europe. Norwegian Petroleum and Energy Ministry has approved Equinor’s request to increase gas exports from two fields in the North Sea, just to ease current supply constraints in Europe. Output from the Oseberg and Troll fields will increase in each case by 1 bcm for the gas year starting Oct. 1, to 6 bcm and 37 bcm, respectively. The scenario has been a case of steady depletion of hydrocarbon reserves in most of European hydrocarbon-rich countries. As such, most countries are hanging on to renewable sources of energy which haven’t been sufficient, while complementing supplies with imports. North Sea - a prolific hydrocarbon location which peaked in production around 1999 is now known for decommissioning of oil assets. UK’s proven oil reserves cannot sustain domestic consumption for the next 5 years without increased importation. Netherlands has zero barrels of proven reserves left and relies heavily on oil importation. Regardless of the apparent deficiency, a realistic net zero projection is not being discussed. Would Europe reconsider its hard-line stance on energy transition and resume financing of certain oil and gas projects within Europe or across Africa? Time will tell. Read our big story which highlights measures and projects being put in place by some agencies of government. NCDMB, NNPC and a few others are thinking outside the box in their quest to transform the Nigerian hydrocarbon infrastructure lack, a situation which had plagued the energy space for decades. These and several other stories will interest you. Let’s hear from you, please..

Publisher Joshua Bretz Managing Editor Jerome Onoja Editor Margaret Nongo-Okojokwu Senior Correspondents Ikenna Omeje Oluwatoyin Bayagbon Correspondents:Lagos Daniel Terungwa Abisoye Vincent Emeka Enunwah Port Harcourt Stella Odogu Arit Dan US Omaya Joko UK Kunle Kazeem Research Analyst Simon Olanipekun Production Solomon Obande Toma Stephen Business Development Stanley Etim Taiwo Olamilekan Amicable Aluu

Jerome Onoja

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Editor’s Note

Majorwaves Energy Report is published by Majorwaves Communications, 25B, Adebayo Doherty Street, Lekki Phase 1. Lagos Phone: +2349035477966 Email: info@majorwavesenergyreport.com www.majorwavesenergyreport.com

Majorwaves Energy Report SEPTEMBER 2021, Vol 4 No 9

INDUSTRY NEWS

DPR Plans Additional 14 Billion Barrels, 8TCF of Gas Reserves

he Department of Petroleum Resources (DPR) is close to ramping up Nigeria’s 36.9 billion barrels crude oil reserves by 14 billion barrels and the country’s gas reserves by an additional 68 Trillion Cubic Feet (TCF), DPR Director, Sarki Auwalu, has said. Speaking when he received the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari and top management team of the corporation in his office, Auwalu disclosed that the possibility of getting 14 billion barrels out of the 18 billion barrels in the works remains very high. Auwalu disclosed that in addition to the recent increase of Nigeria’s gas reserves to 206 TCF, the DPR’s field analysis has shown that the possibility of proving the new oil and gas finds was becoming higher and gradually moving from P3 to P2. In oil industry reserve classification, Proven (P1) reserve is an estimate of recoverable volume with a

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probability of recovery greater than 90 per cent under present technical and economic conditions, while Probable (P2) reserve is an estimate of recoverable volume with chances of recovery equal to or above 50 per cent and less than 90 per cent. In addition, Possible (P3) reserve is an estimate of recoverable volume with a chance equal to or above 10 per cent and less than 50 per cent of being economically and technically feasible to extract. “Let me take this opportunity to inform the GMD and the entire top management of the NNPC that as of last year we were able to increase the proven gas reserve to 206 TCF. This year, we have looked at the reserves of gas and those reserves are in P3 and migrating to P2. “We realised that over 68 TCF are in P3 and 75 per cent of it exists in P2 area, which is the production area. So there are several possibilities that this volume will be proven and we can increase and hit the 230 TCF before 2030.

“For oil, we have discovered P3 reserves in P2 area of about 18 billion barrels and 75 per cent of this 18 billion barrels exist in the P2 production area. So the potential for us to increase about 14 billion barrels is there, and we’re ready to declare this full increase to our own reserves,” Auwalu stressed. However, he insisted that the nation’s reserves production ratio was still not enough and expressed the hope that with the recent profit declared by the NNPC, it would open the floodgates for investors to come into Nigeria and put their monies in the industry. He commended the GMD for making first profit in 44 years of the corporation’s existence, the commencement of the Train 7 gas project, the OB3 project, the Ajaokuta-Kaduna-Kano (AKK) project, spearheading of the Petroleum Industry Act (PIA) as well as many other endeavours.

INDUSTRY NEWS “The GMD within the time he took over NNPC has created a lot of landmarks and a lot of things which history will not only put them on stone but will never forget it.

permits as well as approvals issued by the department were in recognition of the fact that there was need to grow the oil and gas industry in the country and ensure more volumes are available for drilling.

“I can also say, with ultimate commitment, today, the whole world, after 44 years of our great NNPC it is in the first year that not only is it trying to recover but profit is declared.

He explained that in doing its job, the DPR had been getting a lot of support from the NNPC, whether in its efforts to boost the reservoir, exploration or production efforts.

“We are so proud of it and we put our head very high in the committee of nations that our biggest corporation in Nigeria is no longer the way it was being seen, because of the man that came to say it is not business as usual but business unusual.

In his comments, Kyari who hailed the DPR for its innovative solutions to industry challenges, said the fate of the oil and gas industry and by implication the prosperity of the nation rests on the shoulders of both the NNPC and the DPR.

“And the GMD is here, the man sitting down here do things that are about to eliminate poverty in this nation,” he added.

He noted that the two organisations would not give excuses for nonperformance, to Nigerians because the country deserves to get results.

Auwalu stated that the “Decade of Gas” was also a signature project of the GMD as well as his decision to join the Extractive Industries Transparency Initiative (EITI) to ensure openness in the national oil company.

Kyari stated that gas remains the future of energy, explaining that the DPR rather than being a mere police of the industry has become a business enabler.

He stated that the licences and

On the rising prices of cooking gas, Kyari stated that the major challenge was that demand far outstrips

supply, thereby creating distortions. “Supply and demand is everything. Today, this country is struggling with supply of gas. We are having difficulty filling our network across the country with gas. Everyday, it is trouble to deliver gas. That means that once your supply is weak, it will affect prices. “Same thing with LPG. The supply mechanism is very weak. That’s why we are collaborating extensively to extract value from our gas resources and make it available to the market. “Once supply becomes high, you will definitely know that prices will be captured by the development. Gas is an internationally priced commodity. Despite this , supply and demand affect pricing. What we are doing collectively with the DPR and other agencies of government is to ensure that we deliver more gas into the domestic market,” he explained. He noted that the idea was to take gas very close to Nigerian homes and expand the gas network like what obtains in developed countries where gas cylinders are no longer needed.

Total Appoints Samba Seye as MD The N ews A genc y o f N i g e r ia ( N A N ) reports that the company announced the appointment in a statement issue d by Charle s Ebereonwu, its Country Communications Manager, on Tuesday in Lagos.

otal Nigeria Plc has announced the appointment of Dr. Samba Seye as the Managing Director of the firm. His appointment takes effect from Wednesday, September 1, 2021.

Seye is replacing Imrane Barr y who has been reassigned to Total Energies, SE Headquarters in Paris. Seye holds a doctorate in fluid mechanics from the University of Sciences and Techniques of Lille, France, where he worked as an assistant lecturer from 1990 until 1993.

“He joined Shell, working in various capacities, before joining Total Marketing and Services in 2014 as a Project Manager in the Strategy Department,” the statement is quoted as saying. “In 2015, he was appointed Deputy Executive Vice-President, West Africa, a position he held until his appointment as Vice- President Specialties/General Trade Total MS /Africa, in 2016. “Thereafter, he was appointed Executive Vice-President West Africa, Total MS /Africa, in 2017. He has been a member of the TotalEnergies SE Ethics Committee since 2019.” The statement further added that Seye is a thorough-bred professional with experience across several countries.

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INDUSTRY NEWS

Adeyemi Joins Rainoil as Brand and Communications Manager

NLNG Clarifies Role in Domestic LPG Market By Ikenna Omeje

oluso Ajoje Adeyemi has joined Rainoil Limited (Rainoil), a leading integrated downstream company in Nigeria’s oil and gas industry, as Brand and Communications Manager.

Adeyemi, a seasoned brand, marketing, and communications professional with over 10 years’ experience has worked in various capacities with indigenous and multinational companies across Nigeria including Greenville LNG, Clarke Energy, and Cummins West Africa Limited (Cummins). Among other things Adeyemi is an “expert in technical, conceptual, and content development of sales-driving collateral” with the “proven ability to drive record-high marketing campaigns to effectively reinforce and build brand images” she says. Between 2016 and 2018, she volunteered as site leader for the Women Affinity Group at Cummins with a focus on diversity and inclusion, health and wellness, as well as safety and development. Adeyemi has a Bachelor’s degree in Mass Communication, Public Relations and Advertising as well as a Masters in Public and International Affairs from the University of Lagos and is a member of the National Institute of Marketing of Nigeria with several certifications and training in areas including but not limited to brand and marketing, crisis communication, and digital marketing. Adeyemi appointment became effective in September 2021.

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he Nigeria Liquefied Natural Gas (NLNG) has said that the report by the Punch Newspaper that it produces 22 Million Metric Tonnes Per Annum (MPTA) of Liquefied Petroleum Gas (LPG), popularly known as cooking gas, is inaccurate. The Punch had in an article titled “How high cost of cooking gas leaves Nigerians with deadly alternatives” reported that despite N L N G hav in g t h e capacity to produce 22 MTPA of LPG, it “allocates only 350,000 metric tonnes to the Nigerian dom e s tic market that requires a b o u t 1 . 2 millio n annually, while the rest is exported.”

A statement signed by the General Manager, E x ternal Relations and Sustainable Development, NLNG, Eyono Fatayi-Williams, noted that contrary to the report, the company produces 22 MTPA of Liquefied Natural Gas (LNG) and 5 MTPA of Natural Gas Liquids (NGLs). The statement also stated that it is not correct that NLNG contributes to the supply shortfall of cooking gas, currently being witnessed in the country and consequent price hike, adding that the price of cooking gas in the domestic market is influenced by several market factors, including the forces of demand and supply.

INDUSTRY NEWS According to the statement, NLNG recently increased the volume of its annual commitment to the domestic market from 350,000 to 450,000 metric tons, which is about 100 percent of its Butane production, stressing that the company’s current maximum Butane production meets about 40 percent of domestic demand. “It is grossly inaccurate to state that NLNG produces 22 Million Tonnes Per Annum (MTPA) of Liquified Petroluem Gas, otherwise known as cooking gas. NLNG is primarily an export company that produces 22 MTPA of Liquified Natural Gas (LNG) and 5 MTPA of Natural Gas Liquids (NGLs),” NLNG said in a statement. “It is also erroneous, to say the least, that NLNG contributes to the supply shortfall of cooking gas in Nigeria and consequent price hike. The price of LPG in the domestic market is dependent on several market factors, including the forces of demand and supply. “On the supply side, NLNG plays

a pivotal role in the Nigerian domestic LPG market in line with the commitment it made to help deepen the market. Recently, the Company increased the volume of its annual commitment to the market from 350,000 to 450,000 metric tons, which is about 100 percent of its Butane production. Butane gas is less volatile and is, therefore, suitable for cooking. In 2020 alone, NLNG supplied over 80 percent of its LPG sales (Butane/cooking gas) to the Nigerian market. “By committing 100 percent of its Butane production, NLNG has prioritised the domestic market, thus realising its domestic supply target safely. “NLNG’s current maximum Butane production meets about 40 percent of domestic demand. The balance is supplied by other domestic producers or via imports. Therefore, NLNG’s production alone is not sufficient.

13,000 metric ton vessel, LPG Alfred Temile, delivers the product to the market through Lagos and Port Harcourt terminals. The vessel’s delivery to these terminals are occasionally hampered by challenges at the terminal, including storage capacity, terminal access, draft restrictions and prioritisation of other products over LPG. “NLNG’s domestic LPG pricing is most competitive compared to all other alternatives (imported and domestic supply). However, it is important to note that several factors such as VAT, Forex, etc., impact the pricing of the product which is indexed to the international pricing model. “NLNG’s drive towards deepening the domestic LPG market is pivotal in line with NLNG’s vision of helping to build a better Nigeria. The Company is optimistic that the eventual completion of its Train 7 Project will further will provide deepening the domestic LPG market.”

“In order to achieve its aspiration for the domestic supply, a dedicated

Shell MD Advocates for Gas Producing States In Nigeria to Have Industrial Clusters By Ikenna Omeje

he Managing Director of Shell Nigeria Gas, Ed Ubong, has advocated for gas-producing states in Nigeria to have welldeveloped industrial clusters to stimulate growth and development. Speaking on “Strengthening Nigeria’s Gas Market: The Drivers, Opportunities & Challenges” at the Nigeria Oil & Gas Outlook, held in Lagos recently, Ubong noted that there is a huge market for gas in Nigeria, stressing that the main issue is how to connect the sources to the market. To connect the sources to the market, he said there

should be some incentives for upstream operators to make gas available to the market, adding that willing buyer- willing seller structure needs to be put in place Ubong, however, expressed optimism that the newly assented Petroleum Industry Act (PIA) will help to address most of the current challenges facing the gas subsector of the Nigerian petroleum industry. He emphasized the need for more investment in gas pipeline infrastructure and incentivisation of virtual pipeline operators to ensure that gas gets to areas where pipeline is either being

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INDUSTRY NEWS constructed or does not exist at all. Ubong who is also the President of Nigeria Gas Association (NGA) noted that there is a need to equip engineers/experts in the gas space in the country with new skills to build their capacity, adding that addressing the issue of insecurity will help the country to fully harness its gas resources. “How are industries distributed in Nigeria? We have a lot of industries sitting in places like Nnewi, Aba. Aba has gas. Nnewi does not. Onitsha does not have gas plants. If you then cross over to the west, in Lagos, there is gas distribution going on properly – where there is gas distribution and there are lots of industries. You come to Rivers State, there is gas penetration, it is not where it needs to be. But my view is that every state that sits in the Delta – where we have gas resources, should have a welldeveloped industrial cluster. That is where the pile is being baked. They need to be happy and then you can take it to the other parts of Nigeria,” he said. “If you go to the north there is no single gas line, but we have industries in Kano. We have industries in Kaduna. Even as you drive outside the outskirts of Abuja you see people trying to build things like industries. So the market exists. How then do you connect the sources to the market?” The 2020 Nigeria Oil & Gas Outlook united thought leaders, operators, regulators, and other key stakeholders in Nigeria’s oil and gas value chain. Discussions focused on the gas market, local content, and marginal field development. The event is annually organized by Eventhive Nigeria , West Africa’s leading PR Firm with core competencies in developing key industries via B2B Events and exhibitions.

NNPC Consolidates on Gains, Publishes 2020 Audited Financial Statements

ollowing up on President Muhammadu Buhari’s recent announcement of the declaration of two hundred and eighty seven billion Naira (N287bn) Profit After Tax (PAT) in year 2020 by the Nigerian National Petroleum Corporation (NNPC), the Corporation has consolidated on the remarkable achievement, by publishing the Audited Financial Statements (AFS) on its official website. It would be recalled that while announcing the outstanding feat a little over a fortnight ago, President Muhammadu Buhari, who is also the Minister of Petroleum Resources, had said: “I have further directed the Nigerian National Petroleum Corporation to timely publish the Audited Financial Statements in line with the requirements of the law and as follow up to our commitment to ensuring transparency and accountability by public institutions.” In compliance with the President’s directive, the NNPC has fulfilled this very important statutory requirement by publishing its Audited Financial Statements today. Among the highlights of the 2020 AFS is the Corporation’s group profit which rose from a loss position of N1.7billion in 2019 to a profit of N287bn in 2020, for the first time in

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44 years. The Group Managing Director of the NNPC Mal. Mele Kyari, had at various times since the President’s declaration of profit, attributed the turnaround to aggressive cost cutting, automation of the system and renegotiation of contracts downwards by about 30 per cent, among other tough measures. Further highlights of the AFS revealed that while the Corporation’s group financial position increased in total current assets by 18.7% compared to that of 2019, its total current liabilities increased by 11.4% within the same period. The group’s working capital remained below the line at N4.56trillion in 2020 as against N4.44trillion in 2019, the AFS further revealed. Similarly, the Corporation’s group revenue for the 2020 financial year stood at N3.718trillion as against N4.634trillion in 2019, a decrease that could be attributed to the decline in the production and price of crude oil due to the global impact of the Covid-19 pandemic. This is the third consecutive year that the NNPC is publishing its AFS, having done so for 2018 and 2019.

INDUSTRY NEWS

NNPC N287bn Profit: Kyari Explains Facts Behind the Figures ...As Sylva, Board Members Hail Corporation

ollowing the Presidential applause for the Nigerian National Petroleum Corporation (NNPC) on its posting of ₦287bn profit after tax in the 2020 financial year, the Group Managing Director, Mallam Mele Kyari, has given an insight into the measures adopted by his management to achieve the feat. Speaking at a press conference recently at the NNPC Towers, Abuja, the GMD attributed the turn-around of the Corporation from a loss of ₦803bn in 2018 to profit of ₦287bn in 2020 to the aggressive implementation of cost-cutting measures, improved efficiency through business automation, emphasis on commerciallyfocused investments and noninterference in the management of the Corporation from any quarters.

The GMD also added that the Corporation saved a lot of cost through contract renegotiation by up to 30 percent on the heels of the Covid-19 pandemic, introduction of technology that drastically cut travel cost through reduction in in-person meetings and the general automation of processes that enhanced efficiency across the group’s businesses. He said Management’s focus on the prioritization of investment and staff welfare also helped in boosting the Corporation’s overall productivity and bottom line. Speaking earlier while kickstarting the press conference, the Alternate Chairman of the NNPC Board of Directors and Minister of State for Petroleum Resources, Chief Timipre Sylva, who joined the press conference

virtually, congratulated the GMD, Management and staff of the Corporation on the feat of posting profit for the first time since its incorporation in 1977. He said NNPC’s emergence from loss into profitability, coming shortly after the signing into law of the Petroleum Industry Bill, was a proud moment for him, adding that this was a season of achievements for the nation’s oil and gas sector. Members of the NNPC Board, Chief Pius Akinyelure, Mallam Mohammed Lawal, Dr. Tajudeen Umar and Mrs Lami Onayi Ahmed, who were also present at the event, also echoed the Minister and congratulated the Management and staff of the Corporation on the feat.

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INDUSTRY NEWS

OGFZA Generates N9.41bn Revenue in Five Months

he Oil and Gas Free Zones A u t h o r it y, OGFZA, has announced that it generated pthe sum of N9.41billion revenue through the free trade zones, between January and May 2021. Managing Director of OGFZA, Mr Umana Okon Umana, speaking to newsmen also said N6.1 billion worth of investments are expected to materialise at the proposed Liberty Oil and Gas Free Zone in Ikot Abasi, Akwa Ibom State.

April and May had N1.45 billion, N4.39 billion, N1 billion and N453.98 million respectively. “Efficient services delivery on the operational side of running the free trade zones have greatly improved through dedicated leadership as well as the commitment and exceptional quality of members of our staff. “N6.1 billion worth of investments are expected to materialise in the Liberty Oil and Gas Free Zone in Ikot Abasi.

Umana also disclosed that the Authority has attracted foreign direct investments valued at $16.6 billion, and also N255.33 billion worth of local investments, in the last 20 years.

“To grow investment also means looking at the structures within our zones because as I said, you can only attract FDI if you are globally competitive.”

“The revenue showed that N2.1billion was generated in January, while February, March,

The OGFZA boss also disclosed that it now takes seven days to renew a license with all the requirements met, and 21 days

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to issue a new license and with all the requirements met. He added that between 2005 and 2015, the Authority created 40,508 direct and indirect jobs with an estimate at about 160,000. “We took a number of steps, we reviewed our standard of operation, we came out with timeline for delivery of our services. “For example, in the past we did not have a specific timeline for renewal of license or to reissue new licenses or even to process cargos. “We came up with specific timelines. We say for example that we will take only 48 hours to clear cargos, if the cargos where consigned in Free Zones.”

INDUSTRY NEWS

Dangote Partners NCDMB on Oil Sector Research, Devt

angote Oil Refinery has thrown its weight behind the efforts by Nigerian Content Development and Monitoring Board (NCDMB) to promote the critical issue of Research and Development (R&D) in the oil and gas sector of the country. To underscore its’ readiness to join hands with the Board, Dangote Petroleum Refinery said it decided to sponsor the 2nd Edition of Edition of the NCDMB Research & Development Fair and Conference 2021, which took place in Yenagoa, Bayelsa State recently and would be willing to partner to ensure the Board succeeds. Already, Dangote Oil Refinery management disclosed that it had selected six graduates across the six geopolitical zones in conjunction with NCDMB to take the MSc and/or PhD programmes at the Ahmadu Bello University, Zaria for Research & Development in Zeolites ZM5in.

With the theme : ‘Creating Sustainable Collaboration in Research and Development for the Energy Sector’, Dangote Refinery said the conference c re ate d a c o nve r ge n ce of researchers, industry players, investors, finance enterprises and manufacturing companies to identify patentable or commercially viable products resulting from R&D activities. The R&D fair also afforded Dangote Oil Refinery the opportunity to showcase its 650,000 barrels-perday single largest train refinery project and what the company has done in terms of Research and Development during the construction of the refinery. Speaking during his visit to Dangote Oil Refinery exhibition booth at the fair and conference, Executive Secretar y, Nigerian Content Development and Monitoring Board, Engr. Simbi Wabote, commended the company for showing support to the board by participating in the fair. He expressed the need for companies in the Nigeria oil and

gas sector to start nurturing the growth of the country’s homegrown technology rather just being wholesome consumers of other people’s innovations. In his opening remarks, he stated, “Analysis of global practices of Research and Development revealed that the combined R&D spend of just five countries makes up 63.5% of the entire global R&D spend. These five countries, namely USA, China, Japan, Germany, and India were also observed to have accounted for over 50% of the global Gross Domestic Products (GDP). “Africa, on the other hand, accounted for less than one per cent (1%) of the global R&D spend while its GDP is only 3% of the global GDP. You will agree with me that there is a nexus between the spend on Research and Development, economic prosperity,” the Executive Secretary added. Wabote said, from time immemorial to the current age of global connectivity, R&D always played a crucial role in opening up new chapters of modern life.

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INDUSTRY NEWS

NNPC Debunks Rumor of Tampering with Federation Account to Achieve First Profit

H e lis te d s o m e of th e accomplishments of the board to include the establishment of the Nigerian Content Research and Development Council to advise the Board on matters relating to research and development in the oil and gas industry and the Development of R&D 10 Year Strategic Roadmap. The minister, represented by the Permanent Secretary, Nasir Sani-Gwarzo, also called on industry stakeholders and youths across the country to take advantage of the NCDMB R&D centre to bolster adaptation of existing solutions and also come up with new ones to address major challenges in the industry. The Bayelsa State Governor, Douye Diri, represented by his deputy, Lawrence Ewhrudjakpo, said the theme for the fair captures stakeholders’ collective commitment to aggressively drive innovation and position the oil industry on the path of an integrated energy sector, where field development and production solutions are sourced through local capabilities. He emphasised the need for private sector operators to invest in research and development. “It is important, however, to clear up a certain misconception: The funding of research is not the sole responsibility of National Governments; rather, big spenders on research and development globally come from the private sector,” he added. Beyond financial intervention, he urged the oil and gas industry players to challenge the local academia with its research problems, to ensure the development of homegrown technology and the retention of oil and gas spend in the economy.

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generated.’’ Umar explained that the National Assembly steps in occasionally when the accounts are sent to the Public Accounts Committee to review how much each revenue agency, including NNPC, has brought into the coffers of the government adding that NNPC profit originated from the writeback of N713.4 billion.

he Nigerian National Petroleum Corporation (NNPC) has denied tampering with funds meant for the federation account to declare its first profit of N287 billion in 44 years. This was following doubts expressed by some critics over NNPC’s declaration of profit including allegations that the state-owned oil company dipped its hand into the federation account to declare profit. This was made known by NNPC’s Group Executive Director, Finance and Account, Ajiya Umar, while appearing on a Channels Television programme recently. Umar said, “That is a false statement. It is impossible for NNPC to dip its hands into the federation’s revenues. First of all, there are interagency reconciliations every month as to what revenue accrued to the federation from the joint venture crude sales. “Secondly, we have a resident revenue director from the office of the Accountant General of the Federation in the NNPC Towers who monitors what accrues to the federation on behalf of the Accountant General. “Thirdly, there is the pre-Federation Accounts Allocation Committee post mortem meeting to which reconciliations are done, and finally at FAAC meeting where the Commissioners of Finance of all the 36 states and the FCT meet to review contributions from all revenue

He said, “So, with all these layers of control, it will be impossible for NNPC to dip its hands; NNPC will account for the revenues of the federation and only deduct what is allowed and what has been appropriated by the National Assembly in relation to cost of bringing the barrels out as well as cost of other projects that are being done on behalf of the Federation. “This has to do with an impaired revenue, which was actually reclaimed against the federation and this was subjected to forensic audit and subsequently reviewed by an interministerial agency committee and finally by the National Economic Council. Such revenue was now recognised in 2020.’’ Recall that on August 26, 2021, President Muhammadu Buhari announced a net profit of N287 billion by NNPC for the 2020 financial year from a loss of N1.7 billion for the previous financial year. The corporation in its recently published 2020 Audited Financial Statements revealed that its revenue declined by N916 billion from N4.63tn in 2019 to N3.72tn in 2020. The NNPC had been accused several times by the state governments and even the National Assembly of under remitting its revenue including proceeds from crude oil sales to the federation account.

INDUSTRY NEWS

SHELL RESTATES COMMITMENT TO RESEARCH, DEVELOPMENT IN NIGERIA According to Aiboni, Shell companies in Nigeria have continued to expand their research and development initiatives to reposition the Nigerian oil and gas industry as exporter of innovations. “Thirty Nigerians from the academia joined Shell companies in Nigeria in 2020 for the Sabbatical and Research Internship programme which was the highest number of participants in the programme’s history,” she said. “Since we are a global business organisation,” she said, “we recognise that research thrives in world-class research institutions, intellectually rich and technology enabled environments. Shell Companies in Nigeria, therefore, endowed targeted professorial chairs and two Centres of Excellence in Nigerian universities as key fulcrums in our drive to encourage R&D in Nigeria.” Mrs. Elohor Aiboni Managing Director, Shell Nigeria Exploration and Production Company Limited.

nergy giant, Shell, has said its research and development strategy is aligned with Nigeria’s 10 -year strategic roadmap for local content being implemented by the Nigerian Content Development and Monitoring Board (NCDMB). Managing Direc tor of the deep-water business of Shell in Nigeria, Mrs. Elohor Aiboni, said Shell Nigeria Exploration and Production Company (SNEPCo) would continue to explore opportunities for collaboration with public and private sector stakeholders to enhance incountry capabilities in research and development. Aiboni spoke at the just concluded second edition of the NCDMB Research and Development Opportunity Fair in Yenagoa, Bayelsa State Capital. “Research and Development have always been very important activity in

our industry and, it is a business imperative for SNEPCo both for solving problems – whether technical or operational – and for the potential for import substitution.” S h e s a i d , “C o ll a b o r a t i o n is par ticularly signif ic ant because without an effective and sustainable collaboration framework that keeps all stakeholders well connected, it will be near impossible to deliver results from R&D, particularly sustainable results.” Aiboni noted that for over 40 years, Shell Companies in Nigeria deliberately and strategically established strong relationship and partnership with the academia for building and growing incountry R&D. She listed some of the areas of partnership to include the annual Sabbatical and Research Internship programmes in Shell for Nigeria academics.

Shell companies in Nigeria have Centres of Excellence for postgraduate studies at the University of Benin, for Geoscience and Petroleum Engineering, and at the Rivers State University, for Marine and Offshore Engineering. There are also Shellendowed professorial chairs at the University of Port Harcourt (Petroleum Engineering); the University of Nigeria, Nsukka (Environmental Management and Control); the Obafemi Awolowo University (Geophysics); and the Ahmadu Bello University, Zaria (Mechanical Engineering). She said Shell had commenced research to seek local alternative to the importation of drilling fluids by exploring the development of Synthetic Base Fluids using materials that are available locally in Nigeria. “This is still ongoing and proudly nearing completion by the commissioned two Nigerian universities.” The NCDMB R&D Opportunity Fair featured exhibitions and technical discussions by academics and stakeholders in oil and gas on strategies for generating demand-driven research that would solve practical problems and improve exploration and production activities.

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INDUSTRY EVENT

Sylva Commissions NCDMB Research Incubation Centre, Launches $50m R&D Fund

he Minister of State for Petroleum Resources, Chief Timipre Sylva has commissioned the Nigerian Content Development and Monitoring Board’s Technology Incubation and Innovation Center and formally launched the US$50 million Nigerian Content Research and Development Fund. The Minister performed these tasks at the second edition of the NCDMB R&D Fair and Conference held recently at the 17-storey Nigerian Content Tower in Yenagoa, Bayelsa State, with the theme “Creating Sustainable Collaboration in Research and Development for the Energy Industry and its Linkage Sectors.” Represented by the Permanent Secretary in the Ministry of Petroleum Resources, Mr. Nasir Sani Gwarzo, the Minister stated that the Research and Development Fund would be applied in the 16

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establishment of Research Centers of Excellence, Funding support for Research Commercialization, Funding support for Basic and Applied Research and Endowment of professorial chairs in universities and research institutions.

Sylva encouraged oil and gas operating and service companies and other members of the private sector to embrace investment in R&D as a key component of their business model and complement the Nigerian Content Research and Development Fund.

He noted that Nigeria spends only about 0.2 percent of its Gross Domestic Product (GDP) on Research and Development as compared to developed nations that spend between 2.5 to 4 percent of their annual GDP and developing nations that spend between 0.7 and to 1.2 percent.

Commissioning the Technology Incubation and Innovation Center which is located within the Nigerian Content Tower, the Minister stated that the centre will provide a platform for idea generation, incubation and acceleration of innovative ideas to the marketplace.

He highlighted that the continued underfunding of Research and Development in Nigeria reflects on the country’s overdependence on foreign goods and services, adding that ”this is unsustainable if we are serious about building a national technological capability that will drive economic growth.”

He said that innovations emanate from creating ecosystems where ideas can connect and charged industry stakeholders and youths to take advantage of the Center to foster adaptation of existing solutions and create new solutions that address major industr y challenges.

INDUSTRY EVENT Underscoring the point that Research and Innovation ecosystem thrive better with strong collaboration between Government, Industry and the Academia, the Minister reconstituted the Nigerian Content Research and Development Council (NCRDC) which consists of delegates from the three key groups. The body offers policies that shape the direction of NCDMB’s research interventions and the membership includes representatives of the Petroleum Technology Association of Nigeria (PETAN), Oil Producers Trade Section (OPTS) and the Petroleum Contractors Trade Section (OPTS). Other statutory members include the National Universities Commisison (NUC), National Board for Technology Incubation (NBTI) and the National Office for Technology Acquisition and Promotion (NOTAP). The Minister used the event to launch the publications on the Nigerian Content Research and Development Roadmap and US$50m R&D Fund Operating Protocol. Earlier in his presentation, the Executive Secretary of NCDMB, Engr. Simbi Kesiye Wabote emphasised that Research and Development is pivotal to the growth and development of any nation and play crucial role in opening new chapters of modern life. He expressed regret that African nations accounted for less than one percent of the global R&D spend and the continent’s aggregate GDP is only three percent of the global GDP. He added that “there is a nexus between the spend on Research and Development and economic prosperity. It is time to start to

nurture the growth of our homegrown technology rather just being a wholesome consumer of other people’s innovation.” He noted that another reason NCDMB is focusing energy on Research and Development is because it is one of the six parameters which are essential for sustainable Local Content practice. Other five parameters for sustainable Local Content development include an enabling regulatory framework, periodic gap analysis, structured capacity building and fiscal and monetary incentives to attract new investments and keep existing businesses afloat as well as the creation of access to market to enhance patronage of goods and services generated from established capacities. The third reason the Board is promoting Research and Development in the oil and gas industry is because it is in line with the provisions of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act of 2010. According to Wabote “the authors of the Nigerian Oil and Gas Industry Content Development Act of 2010 recognized the importance of Research and Development and included key provisions in the Act. Specifically, Sections 36, 37, 38, and 39, of the NOGICD Act are dedicated to promoting Research and Development.” He further explained that Research and Development is a major feature of the Board’s 10Year Strategic roadmap which seeks to increase the level of Nigerian Content in the oil and gas industry to 70 percent by the year 2027.

pillars and four enablers. The pillar on Technical Capability Development contains initiatives to further drive the delivery of Research and Development in oil and gas industry. The enabler on research and statistics cover the initiatives required to conduct research in key areas to generate new evidence to address industry knowledge gaps and operational challenges.” Speaking further, Wabote announced that the Board would soon embark on a roadshow to showcase its Research and Development initiatives to the various stakeholder groups, including universities in the country which represent a key constituency. He said the Board was set to move fully into the implementation phase of its initiatives to derive better results from the intellect of Nigerians in the academia, research institutions, and technology hubs. The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari delivered a goodwill message at the event and assured the support of the national oil company and the entire oil industry to the R&D initiatives being promoted by the Board. The Fair featured exhibitions by universities and inventors and technical discussions by academics and stakeholders in oil and gas on strategies for generating demand driven research that would solve practical problems and improve the operations of the oil and gas industry.

According to him “the 10Year Roadmap consists of five

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INDUSTRY EVENT

Dubai Eases Travel Restrictions Ahead of Africa Oil Week in November 2021

ubai is now among only a small proportion of locations in the world for which there are no current travel restrictions. Following a decision by the UAE Government and Dubai Tourism, travellers from all countries are now welcome to enter Dubai. All they need to hold is a negative COVID-19 PCR test certificate, which has become standard travelling procedure in the COVID-19 era. This is good news for the many delegates planning to attend Africa Oil Week (AOW) in Dubai in November 2021. Travellers from most countries will need to show the results of a negative test taken no more than 72 hours before departure. Travellers arriving from Bangladesh, India, Indonesia, Nigeria, Pakistan, South Africa, Sri Lanka, Uganda, Vietnam and Zambia must follow a slightly different procedure. These travellers must hold a valid negative COVID-19 PCR test certificate with a QR code issued within 48 hours of the time the sample was collected from an approved health facility. And they must have a rapid PCR test report with a QR code for a test conducted at the departure airport within six hours of departure. Travellers from selected countries

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will also be required to take a final test on arrival at Dubai. “We welcome the easing of restrictions,” says Chris Hall, AOW’s Group Event Director. “They indicate that Dubai is once again open for business and reassure us of our decision to temporarily relocate AOW to Dubai. “While we look forward to returning to Cape Town in 2022, we believe that this move is in the best interests of our delegates and will help us to run the only safe, in-person energy event for Africa this year.” AOW is gearing up to welcome some 45 ministers and government leaders representing 66% of African governments, including Ghana, Uganda, Senegal, Côte d’Ivoire, Kenya and the Republic of the Congo. The executive teams of the continent’s major oil and gas players, such as TotalEnergies, Eni, Equinor, Tullow Oil, Perenco, Panoro and Seplat, will also be attending. The potential for meaningful engagement, after a pandemicinduced hiatus, has been welcomed by all. The easing of travel restrictions, of course, doesn’t mean that either Dubai or AOW will be relaxing their interventions to keep delegates safe. “Since the start of the pandemic, a

robust strategy was implemented with the key priority being to safeguard the health and well-being of our residents and guests,” says Issam Kazim, the CEO of Dubai Corporation for Tourism and Commerce Marketing. “We continue to implement the highest standards of hygiene and COVID-19 precautionary measures across the city, with inspectors carrying out venue checks at those establishments awarded the ‘Dubai Assured’ stamp, every two weeks, to ensure ongoing compliance. “These efforts, along with the progress being made with the rollout of the country-wide vaccine programme, are key to managing the virus and providing peace of mind for residents and visitors..” “For those travelling from the UK, Dubai remains an easier option than South Africa at this stage, as the latter is still on the UK’s red list,” AOW’s Hall adds. “The UAE is on the UK’s amber list, which means that fully vaccinated travellers will not need to quarantine when they arrive home.” Together with its official partners, including Emirates (airline), AOW looks forward to its next event being the start of the return of safe inperson meetings, the world over.

INDUSTRY EVENT

Seplat, Orjiako Win Global Awards for Outstanding Indigenous Performance By Ikenna Omeje

eplat Energy Plc and its Board Chairman, Dr. ABC Orjiako have emerged winners at the Energy & Corporate Africa Leadership Award Night/Dinner held last week in Houston, Texas, United States for outstanding indigenous performance.

largest indigenous domestic supplier of gas whilst Orjiako won the top indigenous entrepreneur award in the energy sector.

A statement by the company recently said that the award was the climax of the Annual Sub-Saharan Africa Oil/Gas Conference that started from August 12th to 13th August with the theme: The Future of U p s trea m , A d va n cin g Digitalization and Gas Development Options in SubSaharan Africa, in which Orjiako delivered the keynote address.

The Leadership Award Night gave an opportunity to profile and celebrate personalities that have helped to stabilize and grow oil/gas business in Sub-Saharan Africa. Among the recipients of the award were: Chief Timipre Sylva, the Minister of State for Petroleum Resources, who was conferred with the Africa Leadership Award; Mallam Mele Kyari, the Group Managing Director, Nigerian National Petroleum Corporation (NNPC) for transformational leadership award, amongst others.

The statement informed that Seplat was recognized as the

Commenting on the awards, Orjiako, on behalf of the Board,

management, and staff of the Company, thanked Energy & Corporate Africa, the organisers of the events, for the honour and recognition accorded the Company and himself. He expressed the Company ’s appreciation, saying the awards highlight the hard work and resilience consistently displayed over time. “Since inception, Seplat has continued to strive for operational excellence and sustainable value creation for all our stakeholders. The awards will continue to propel us to greater achievements,” he assured.

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LOCAL CONTENT

Create Businesses Around Adverse Situations, Wabote Charges Youths

The Executive Secretary, Nigerian C o n te n t D e ve l o p m e n t a n d Monitoring Board (NCDMB), Engr. Simbi Kesiye Wabote has challenged young Nigerians to create business opportunities around uncomfortable situations rath er than jus t complaining about them. He gave the charge while delivering the keynote address at the Junior Chambers International (JCI) Nigeria Senate Association Leadership Excellence for National Development (LEND) Webinar Series held recently in Lagos. Speaking on the topic “Leadership, Yo uth , Entrep ren e ur ship & Regional Cooperation – A National Perspective,” he charged youths to channel their anger against challenges in the country by innovating solutions and enterprises that would address such problems, adding, “feel free to complain bitterly about any situation you don’t like, but also put on you thinking cap make money out of it in a legitimate way.” Executive Secretary recommended that “whether it is the nuisance of mosquitoes, the disgust you feel when you see heaps of refuse or potholes on our streets or developing a car-pooling app to decongest the road of too many vehicles, I encourage you to see every challenge or problem as an opportunity to wear

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your entrepreneurship cap to help humankind in your own little way and also prosper while solving the problem.” He also charged youths to pursue their passions and avoid the crowds that complain about everything without proffering any solution, adding that such a disposition will only drag one into depression. Speaking further, Wabote canvassed that for any society to avoid falling into decline, the mantle of leadership and entrepreneurship should fall on the youths from time to time. “It is the ideas and energy of the youth that enables us to do some amazing things today such as being able to connect with someone in the other end of the globe within seconds,” he added. Discussing leadership, he advised individuals needed to cultivate leadership qualities to succeed in different endeavors of life, stressing that one did not need to be a political leader or a senior government official to demonstrate leadership qualities. He listed some of the attributes that would position a leader to achieve successful outcomes to include integrity, self-awareness, skilled communication, effective delegation and learning agility. Other qualities include shared vision and empathy.

The NCDMB boss stated that Nigeria’s youth population is estimated to be over 55 percent of the entire 200 million population. He posited that the teeming youth population underscored the need for most Government policies to be centered on youths as they are the largest demographic group among the entire Nigerian population. He charged the government and other groups like the JCI, Boys Scout, the Rotaract, and others to develop new strategies that would keep a large number of Nigerian youths engaged in useful activities and attract them into their fold. Dwelling on entrepreneurship, Wabote indicated that entrepreneurs, especially the small and medium scale enterprises are the backbone of all thriving economies across the world. He noted that 96 percent of all businesses in Nigeria are owned by SMEs, and they are responsible for 84 percent of employment and contribute 48 percent to the national Gross Domestic Product (GDP) of Nigeria. He added that the business environment in Nigeria is free and fertile for entrepreneurs and beckoned on youths to conceptualize business ideas that would thrive in the economy.

LOCAL CONTENT

NCDMB, Wabote Win African Local Content Icon Award and local awards, including a global award conferred by the organizers of African Oil Week (AOW) in November 2018 for his outstanding contributions to sustainable local content development in Nigeria and across Africa’s Oil and Gas Industry. He was also honoured in August 2019 as the Transformational Business Leader in Public Sector in 2019 by the Business Leadership Awards and bagged the Local Content Development Achievement Award from the Oil and Gas Trainers Association (OGTAN) in April 2018 in recognition of the remarkable achievements he led the Board to record in less than two years of his assumption of duty.

he Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Engr. Simbi Kesiye Wabote, has been selected for the African Local Content Icon Award by the 2021 African Business Leadership Awards (ABLA) organized by the African Leadership Magazine. The award has 12 categories and the winners emerged through selection, online voting for nominees and the editorial board’s review of the nominations and votes to decide the winners. Other winners from Nigeria include Mr. Segun Ogunsanya, Chief Executive Officer of Airtel Africa, who emerged African Business Leader of the year; Mr. Babajide Sanwo-Olu, Governor, Lagos State – Business Friendly Governor of the year; Mr. Benedict Peters, Chief Executive Officer, Aiteo Group, who is selected as African Chief Executive Officer of the year and Shell Petroleum Development Company of Nigeria Ltd (SPDC), which was picked for the African CSR & Community Development Impact Award.

Wabote who was first appointed in September 2016 by President Muhammadu Buhari and reappointed in September 2020 has recorded several landmark accomplishments locally and championed the development of Local Content across the continent and provided guidance to a number of African countries on the implementation of Local Content policies in their jurisdictions. Under his watch, NCDMB recently hosted the African Local Content Roundtable in partnership with the African Petroleum Producers A ssociation (APPO) and he canvassed for the establishment of African Local Content Bank that could provide funding for the development of oil and gas projects in Africa. He also led NCDMB to institute the Nigerian Content 10-Year Strategic Roadmap, with one of the pillars being Sectorial and Regional Market Linkage, intended to extend Local Content across the African continent and ensure access to market for capacities that have been developed locally. The Executive Secretary is a recipient of several international

The African Business Leadership Awards attracted over 300, 000 entries on the magazine’s website and across social media platforms, as well as submissions via email and physical posts from Africans across the continent and in Diaspora. All winners and their runners-up shall be presented with an award trophy at the 6th Invest in Africa Summit that will held virtually on September 16 – 17, 2021, with under the theme of Africa 4.0: Redefining Growth, Sustainability, and Innovation. The Publisher of African Leadership Magazine, Dr Ken Giami, while unveiling the list of winners, affirmed that each nominee is worthy of recognition and commendation for their selfless services to nationbuilding. He stated that the 2021 Africa Business Leadership Award (ABLA) celebrates grit, purpose, and impact in Africa’s business environment, especially in what continues to be a difficult period for most people due to the impact of coronavirus. He further added that the leaders who have emerged winners in the various categories have exhibited these celebrated attributes in admirable capacities and are deserving of great accolade.

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LOCAL CONTENT

NCDMB, Airforce to Forge Close Collaboration

he Air Officer Commanding of the Nigerian Air Force Mobility Command in Bayelsa State, Air Vice Marshal (AVM) Aliyu Gaya Bello, recently paid a courtesy visit to Engr. Simbi Kesiye Wabote, the Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB). In his remarks, AVM Bello sought close collaboration with the Board on different areas and offered the support of the Nigerian Air Force in lifting heavy machinery from foreign lands and across location incountry. He also proposed for closer collaboration between the Board and the Command in social activities.

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He also commended the Executive Secretary on the successful completion of the Nigerian Content Tower and other giant strides the Board had recorded in promoting Local Content in the oil and gas industry and industrializing the economy. In his response, the Executive Secretary thanked the Nigerian Air Force and other members of the Armed Forces for their sacrifices in securing Nigerians and the nation at large. He noted that the relative security that is being enjoyed in Bayelsa State could be attributed to the presence of the Nigerian Air Force Mobility Command in Bayelsa State.

He said the Board would take advantage of the airlifting services offered by the Air Force in moving some of the equipment acquired for its major projects in Bayelsa State and elsewhere. He also gave assurance that the Board would continue to collaborate closely with the Nigeria Air Force and support their operations in Bayelsa State. AVM Bello was accompanied by senior officers of the Nigerian Air Force Mobility Command in Bayelsa state while senior management staff of the Board were also present at the meeting.

POWER

NCDMB, Bayelsa Sign Power Purchase Agreement on 10MW IPP

he Nigerian Content Development and Monitoring Board (NCDMB) and the B aye ls a St ate G ove r n m e nt has signed a Power Purchase Agreement (PPA) for the delivery of electricity from the 10 megawatts gas fired independent power plant constructed by the Board in partnership with the Nigerian Agip Oil Company at Elebele, Bayelsa State. The Power Purchase Agreement was signed in Yenagoa by the Executive Secretary of NCDMB, Engr. Simbi Kesiye Wabote and the Attorney General and Commissioner of Justice of Bayelsa State, Mr. Biriyai Dambo and was witnessed by Governor Douye Diri. The power plant alongside the 17 storey Nigerian Content Tower (NCT) were commissioned by President Muhammadu Buhari on August 14 2020. It was conceived to supply uninterrupted electricity to the NCT and the Oil and Gas Park being developed by the Board at Emeyal 1, Ogbia Local Government Area in Bayelsa State. In a bid to maximize the utilisation

of the electricity generated by the plant, the Board entered into an agreement with the Bayelsa State Government to supply uninterrupted electricity to key facilities of the state which would be paid for as specified in the PPA. Speaking at the event, the Executive Secretary noted that the terms of the Power Purchase Agreement would ensure that the plant would operate on a sustainable basis with settlement of obligations to the gas suppliers, operation and maintenance contractors, purchase of spare parts and consumables required for timely maintenance. According to him, “the power supply is not free as all users including NCDMB are expected to make prepayment deposit for their power requirements just as required by our gas suppliers. We were required to make up to six months deposit with the Gas Aggregation Company Nigeria before we got gas supply to the power plant. We believe there will be no default from any party that will trigger unpleasant outcome in the sustainability of the power plant operations.”

Wabote described the occasion as a major milestone in the collaboration between NCDMB and the Bayelsa State Government, adding that the importance of reliable power supply to enhance the efficient operation of government activities cannot be over emphasised. He added that the event also provided inspiration to all Bayelsans that it is possible to provide reliable power supply to the entire state considering the abundant gas resources available in its domain. Governor Douye Diri in his comments noted that the state is blessed with abundant gas resources and other energy resources, which had been largely under-utilised, stressing that his administration was determined to utilize the resources of the state for the benefit of the people. He commended the NCDMB management and other partners that made the agreement possible and charged the private investors to explore the abundant natural gas in the state, assuring that the government was ready to partner with such investors to make power and other amenities available to the people.

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POWER

DisCos to Refund Electricity Customers Who Pay Upfront for Meters By Ikenna Omeje Following the failure of MAP to address the issue of metering gap in the country, the Federal Government approved NMMP – a policy intervention (with the support of the Central Bank of Nigeria) for the provision of long term (10-year tenor) single digit interest loans to DisCos strictly for the provision of electricity meters. Under the programme, only local meter manufacturers/assemblers are qualified to participate, pursuant to the provisions of Executive Order No. 5, to promote job creation. Also, end-use meters are to be installed on customer premises on DisCos’ own account and without payment for the meters by the customers in any form except through end-user tariffs.

he Nigerian Electricity Regulatory Commission (NERC) has said that electricity customers who choose to make upfront payments for meters under the National Mass Metering Program (NMMP) and the Meter Asset Provider (MAP) will be refunded by electricity Distribution Companies (DisCos) through energy credits. This is contained in the Meter Asset Provider (MAP) and National Mass Metering Program (NMMP) – Regulation No: NERC -R- 113 – 2021 signed by the Chairman of NERC, Sanusi Garba, which took effect on August 9, 2021. “Where a customer elects to make upfront payments for meters under these regulations, the cost of the meter shall be refunded through energy credits by the Distribution Licensees. The reimbursement schedule shall be as approved by the Commission, having regard to an evaluation of the financial standing of the Distribution Licensee. This provision also applies to upfront payments already made by customers upon the commencement of the MAP framework in 2018.” NERC 24

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stated. As a regulatory initiative towards closing the metering gap of about 10 million meters in Nigerian Electricity Supply Industry (NESI) over a period of three years, the NERC approved MAP in 2018. The MAP framework sought to provide for the provision of enduse meters as a service by third party investors based on which customers benefitting from such meters pay Metering Service Charge (MSC). This concept was in recognition that electricity meters are fixed assets with a long useful life and may therefore be financed by interested investors, with capital recovery over the life of the asset. Under the programme, DisCos were excluded from the direct purchase of the meters as a way to attract private sector investment in metering. However, MAP recorded limited success mainly because of absence of risk mitigation mechanisms for payment default and the inability of MAP permit holders to secure local medium/long term financing with a tenor longer than five years.

In Section 24 (1) d and e of the Regulations, NERC noted that in accordance with the Metering Code, repair or replacement of faulty meters by DisCos will happen within two days at no extra cost to the customer, adding that where dispute arises the customer is entitled to fair resolution. “The repair or replacement of faulty meters by Distribution Licensees (DisCos) within 2 days in accordance with the Metering Code at no additional cost to the customer. Where it is established that the customer willfully damaged a meter, Distribution Licensee shall replace the meter based on an upfront payment by the customer or other mutually agreed terms of payment,” NERC said. “ W h e re dis p u te a r is e s o n responsibility for destruction of a meter, the customer shall be entitled to a fair resolution of the dispute in compliance with the Metering Code and other regulatory instruments of the Commission; and the Distribution Licensee shall replace the meter pending the resolution of the dispute.”

POWER

TCN Can Evacuate More Bulk Electricity to Distribution Load Centers — MD

he Acting Managing Director of the Transmission Company of Nigeria (TCN), Engr. Sule Abdulaziz, has said the company has substantially upgraded its facilities and can now evacuate more bulk electricity to distribution load centers across the country. A statement by the TCN General Manager (Public Affairs), Ndidi Mbah, said Abdulaziz stated this recently, while addressing Executive Directors, General Managers as well as Regional Heads of TCN at the opening session of the TCN Management retreat in Uyo, Akwa Ibom State, He added that TCN has expanded its capacity, and now has a measure of stability and discipline to the grid. He said, “together, we have expanded TCN’s capacity and also brought a measure of stability and discipline to the grid. We have substantially upgraded our facilities and can evacuate more bulk electricity to distribution load centers nationwide.”

Speaking on the theme, ‘Managing Change in a Renewed Organisation’, Abdulaziz said the retreat was aimed at achieving the strategic objective of giving TCN a new direction to enable it to occupy its pride of place within the context of the electricity market in the Nigerian Electricity Supply Industry (NESI) and the West African sub-region.

synergy towards sustaining the company’s milestones and moving it to a higher level of efficiency.

He said, “You will agree with m e that so much change has occurred both in our organization and the marketplace that requires us to redouble our efforts to ensure that we move TCN to the next level in operational efficiency.” Abdulaziz said that this is more important at a time when President Muhammadu Buhari-led administration is working to reverse the deficit in power supply.

Abdulaziz remarked that the retreat provides a platform for the participants to synergize and improve on teamwork. According to him, “High on my expectations is also the building of a team that will not only appreciate the benefits of teamwork but also embrace high management performance through facilitation, communication, and collaborative relationships.”

W hile co m m e n din g th e Management staff for their colle c tive co ntrib utio n s towards achieving the modest milestones TCN has recorded so far, Abdulaziz tasked them with developing more

He noted that the team most not rest on its oars as there is much more to be done. He charged every participant to continue to work hard as emerging challenges will constantly test staff capacity to innovate.

The opening session had in attendance the Governor of Akwa Ibom state, Mr. Emmanuel Udom, and other top government functionaries.

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SUSTAINABILITY

PwC Wants FG to Float Future Energy Fund, Not Frontier Exploration Account ...Oil contribution to GDP falls from 13% to 7% in seven years

new report by PricewaterhouseCoopers (PwC) has advocated the setting up of a “Future Energy Fund” that would incorporate elements of the transition to cleaner fuel sources, rather than devoting 30 per cent of profit from oil and gas to the Frontier Exploration Fund (FEF) as provided in the Petroleum Industry Act (PIA). THISDAY reports that the global professional services and consulting firm, in a document which analysed the implications of the PIA, noted that based on the World Economic Forum (WEF) data, a country’s energy transition readiness was measured by six factors. It listed the factors as availability of investment and capital; effective regulation and political commitment; stable institutions and governance; supportive infrastructure and innovative business environment; highly skilled human capital and

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consumer participation; and robust energy systems structure. It stated that Nigeria scored 35 per cent in its energy transition readiness. The report, titled, “The Petroleum Industry Act: Redefining the Nigerian Oil and Gas Landscape,” explained that lack of enabling infrastruc ture, regulator y framework and governance of energy transition were the major reasons for the low score. The new PIA stipulates that a frontier exploration fund shall be maintained for the exploration of unassigned frontier acreages financed by 10 per cent of rents on prospecting licences, 10 per cent rent on mining leases, and 30 per cent of NNPC Limited’s oil and gas profit in production sharing, profit sharing, and risk service contracts.

However, PwC, in the document, stated that the country should begin moves to join the global energy transition, stressing that presently, Nigeria’s resources are being devoted almost solely to a fast waning commodity. PwC stated, “Exploration is a high-risk endeavour. In addition, raising the needed finance for the development, production and evacuation from the frontier basins might be a tall order as investors are staying away from high cost emission-intensive assets. “These basins will compete for funds with ambitious and moreenvironment friendly projects like gas, hydrogen, solar and wind. Rather than a frontier exploration fund, Nigeria could consider setting up a future energy fund.

SUSTAINABILITY “The amounts being set aside in the PIA for the frontier exploration fund can be applied towards funding the development of Nigeria’s future energy potential, which will include, but not be limited to, petroleum, in readiness for the energy transition. “The fund can also be deployed for funding the development of abatement technologies that can aid carbon neutrality.” T The firm, which operates in about 157 countries worldwide, maintained that with the projected decline in global demand for hydrocarbons, leading oil and gas production companies were cutting back significantly on their oil and gas business and on further investment in fossil fuels. It recalled that British Petroleum (BP), for example, had announced that it would be suspending oil and gas exploration in new countries from 2021, saying the company aims to make a tenfold increase in its spending on low carbon energy. In the case of Shell, based on its new strategy launched in 2021, the report explained that the company aims to decrease its total oil production by one to two per cent per annum and make no new frontier exploration investment by 2025. According to PwC, Shell, which accounts for about 50 per cent of Nigeria’s oil and gas production, has the broad theme of its strategy for its upstream petroleum business to generate the cash to fund the growth of its low carbon business. The report said, “The PIA by its very essence is hydrocarboncentred. While the PIA is expected to attract investment into the Nigerian oil and gas sector and serve as a catalyst for the development of the sector,

the PIA doesn’t say much on the energy transition and its likely impact on the sector and its outlook. “In recent times, clean energy has accounted for the majority of global investments in the energy sector. According to the International Energy Agency (IEA) investments in new power generation are expected to account for 70 per cent of $530 billion to be spent on all new generation capacity in 2021. “In 2017, the World Bank announced that it would no longer finance upstream oil and gas projects. In exceptional circumstances in the poorest countries where there is a benefit to energy access and this is consistent with the countries commitments. “The foregoing puts to question how much investment Nigeria will be able to attract into the oil and gas sector with the signing of the PIA amidst the energy transition.” It emphasised that conversations on energ y transition had continued to gain ground, accelerated by climate change and the renewed focus on Environmental, Social and Governance (ESG) issues. The PwC report added that the European Union (EU), which includes some of the biggest buyers of Nigeria s crude oil, had pledged to cut carbon emissions by at least 55 per cent by 2030, while the UK had also pledged to cut carbon emissions by 78 per cent in 2035.

These, the report noted, put Nigeria among the countries that must redouble national sustainability efforts along all fronts, pointing out that the low scores indicate the need for greater attention to the spectrum of sustainability requirements. However, the report noted that the silver lining of the PIA on the energy transition was that it appeared to focus on gas as the transition fuel for the country and provided improved regulations and incentives for gas investment with tax holidays of up to 10 years and expansion of incentives to cover midstream gas operations. But while Section 64 of the Act stipulates that NNPC Limited was to engage in the development of renewable resources in competition with private investors, the firm noted that Nigeria needed to do more in providing the enabling infrastruc ture, regulator y framework and the right level of investment for the energy transition. On the lean sum contributed by the oil industry, the report said despite being a major source of revenue, the oil sector lagged behind other sectors in terms of GDP contribution, which declined to seven per cent in the last seven years. “The relative importance of the oil and gas sector in Nigeria appears to be declining, from 13 per cent of Nigeria’s GDP in 2013 to about seven per cent in 2020, while those of other sectors continue to increase,” the report said.

Furthermore, it pointed out that Canada had pledged to cut carbon emissions by 40-45 per cent by 2030, while in June 2019, the UK became the first major economy to set a legally binding commitment to reach Net Zero emissions by 2050, in addition to countries like Ukraine and China that have unveiled plans to achieve net zero emissions by 2060.

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SUSTAINABILITY

Eni, CFS Announce the Accomplishment of an Important Milestone Towards Achieving Magnetic Confinement Fusion

ni announces that CFS (Commonwealth Fusion Systems) has successfully completed the test aiming to demonstrate the operation of the innovative magnet for plasma fusion confinement, for the first time made with HTS (High Temperature Superconductor) technology. CFS is a spin-out company of the Massachusetts Institute of Technology’s Plasma Science and Fusion Center, established in 2018, of which Eni is relevant shareholder. Magnetic confinement fusion, a technology never tested or applied on an industrial scale before, is a safe, sustainable and inexhaustible energy source that reproduces the principles through which the Sun generates its own energy, ensuring an enormous quantity of it with zero emissions and representing a turning point in the path of

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decarbonization. The technology under testing is key in the framework of magnetic fusion research, as it represents a fundamental step to create the conditions for controlled fusion, making possible its use in future demonstration plants. Studying, designing and building machines that can operate in physical reactions similar to those taking place at the core of the stars is the technological goal that the greatest minds in the world of energy research are striving for. Eni’s CEO, Claudio Descalzi, commented: “The development of innovative technologies is one of the pillars of Eni’s strategy, that aims at the complete abatement of emissions from industrial processes and products, and is key to a just and successful energy transition. For Eni, magnetic confinement

fusion holds a pivotal role in the technological research for decarbonization, as it will consent humanity to access large quantities of energy produced in a safe, clean and virtually inexhaustible way, without emissions and changing for good energ y generation standards, while contributing to an epochal breakthrough in the direction of human progress and quality of life. The extraordinary result obtained during the test once again demonstrates the strategic importance of our research partnerships in the energy sector and consolidates our contribution to the development of game changer technologies.” In the context of its strategy of energy transition towards decarbonization, Eni has long started a broad program of fusion that commits on several fronts:

SUSTAINABILITY Eni has been a shareholder of CFS since 2018 and has been cooperating with the Plasma Science and Fusion Center of MIT on a scientific joint research program called LIFT (Laboratory for Innovation in Fusion Technology) aimed at accelerating the identification of solutions in terms of materials, superconducting technologies, physics and plasma control. The test concerned the superconducting technologies and it showed the possibility of maintaining the magnet in the superconducting regime with a high stability of all the fundamental parameters for its use in a fusion power plant. The innovation will contribute to a significant reduction in plant costs, ignition and maintenance energy of the fusion process and in the general system complexity, nearing the time and reducing the effort to build a demonstrative plant that will produce more energy than that required to maintain the fusion process (net energy production plant). This will subsequently allow to construct and conveniently deploy power plants throughout the world, connecting them to the electricity grid without expensive custom-made generation and transport infrastructures. On the basis of this important achievement, CFS confirms its roadmap and intends to build the first experimental device with net energy production named SPARC by 2025, followed by the first demonstration plant, known as ARC , that could start feeding energy into the grid over the next decade, according to schedule. SPARC will be built by assembling a total of 18 identical HTS magnet coils (similar to the one tested), in a toroidal configuration (a doughnut shape named “tokamak”) to generate a magnetic field with the strength and stability necessary to contain a plasma of hydrogen isotopes at temperatures of around 100 million degrees, at which the fusion of atomic nuclei can occur with the release of a very high quantity of energy.

Schneider Electric Ranked World’s Most Sustainable Company by Corporate Knights

eading company in the digital transformation of energy management and automation, Schneider Electric, has been ranked the world’s most sustainable corporation, in a prestigious annual list compiled by Corporate Knights, a media and research company focused on corporate sustainability performance. The recognition which coincides with the Schneider Electric’s announcement of its accelerated sustainability programme marks a big jump from 29th place the previous year and represents a highprofile external acknowledgement of the company’s long-standing commitment to Environmental, Social and Governance (ESG) issues. Chairman and Chief Executive Officer, Schneider Electric JeanPascal Tricoire, while reacting to the achievement in a press statement, said the award was a reflection of the company’s drive towards sustainability and making the world greener and more inclusive. “We are honoured and grateful to be ranked number one by Corporate Knights. It is a major encouragement for our teams and partners, and a

great recognition of more than 15 years of engagement to make our company and the world greener and more inclusive. Sustainability is a journey that we accomplish with our people, partners, suppliers, customers and communities where we operate. This recognition goes also to all of them.” Corporate Knights’ 2021 ranking was based on an assessment of 8,080 companies with more than US$1 billion in revenues. Performance indicators include evaluations of how much renewable energy and waste companies generate The Toronto-based company identified Schneider Electric’s steady shift towards products and services that help customers manage their energy needs more efficiently and safely. According to the CEO of Corporate Knights, Toby Heaps; “In recent decades, Schneider Electric has shifted its focus to data centres; storage and other distributed energy resources; and smart solutions that advance electrification, energy efficiency and renewability.

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SUSTAINABILITY

SOCIAL INVESTMENT

It now earns 70% of its revenue from, and directs 73% of its investments toward, sustainable solutions, Schneider Electric also performs strongly in racial and gender diversity and in resource productivity and safety.”

Shell Donates Multimillion Dollar Projects to Maritime University

In another development, General Manager, Sub-Saharan Africa, Process Automation, Schneider Electric, Ajibola Akindele, has called on stakeholders of Nigeria’s power sector to augment investment in the power sector so as to enable the country achieve her industrialization goal. Akindele who gave the charge recently, in an interview with Arise TV, averred that the country needs to create the necessary framework for private sector investments. “We have had several years of underinvestment in the power sector. If you look back at the last 30 years, particularly between 1989, to 2007, there was no major investment in the power sector. The country was just spending enough to stabilize the grid infrastructure. The sector needs investments in order to accelerate GDP growth and create jobs,” said Akindele. He further noted that based on general consensus by experts in the power sector, the country needs between $3-5 billion annual spend over the next 15 years to achieve industrialization. While these are huge amounts, he expects that some funding could come from Government, International Development Agencies and from the Private sector. All available funding options must be explored and investors should be given the necessary incentives and where necessary guarantees to ensure they can make a decent return on their investments. In conclusion, he highlighted that though there has been some positive developments in the power sector recently; these are not enough and we need to move much faster to improve electrification rates and reliability of the grid.

overnor of Delta State, Dr. Ifeanyi Okowa, has described the phase one of infrastructure projects donated to the Nigerian Maritime University in Okerenkoko, Delta State by The Shell Petroleum Deveopment Company of Nigeria Limited (SPDC) and its joint venture partners as a great enhancer of learning and research. Okowa spoke recently at the opening of a 220-capacity set of auditoriums, eight lecture rooms, one e-classroom and 14 staff offices forming part of the many projects that the SPDC JV planned for the three-year-old specialised institution set up in response to the information and technology revolution in the global maritime industry, an area Nigeria looks at for developing more professionals for its blue economy ambition. Represented by the state Commissioner for Oil and Gas, Prince Emmanuel Amgbaduba, Okowa charged other oil companies and businesses particularly those in the maritime sector to emulate the gesture of the SPDC JV in helping Nigeria develop future talent of maritime professionals. ‘Insfrastructure such as what Shell and its partners have provided and still plan to provide forms the bedrock of meanful learning, teaching and research that can stand our institutions out in global ranking while helping the university to overcome the chronic shortage in infrastructure.” Presenting the projects to the university community on behalf of the SPDC JV, Managing Director of SPDC and Country Chair, Shell Companies in Nigeria, Mr. Osagie Okunbor, said the projects were fully equipped with requisite furniture and equipment and that a solar-powered potable water system had also been provided to support the facilities and the university community at large. Okunbor was represented at the virtual

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project-opening ceremony by SPDC Country Head, Corporate Relations, Mr. Igo Weli. Speaking on the criteria for selecting the SPDC-JV supported projects, Okunbor said: “Our focus is on projects considered as very important to the success of the nascent and premier maritime university in Nigeria.” Okunbor said, “As part of our social investment initiatives, the SPDC JV comprising NNPC, TEPNG and Agip, signed a Memorandum of Understanding (MoU) with the university in 2019 to develop critical facilities needing immediate attention for a smooth takeoff. We are happy with the progress we have made.” Group General Manager of National Petroleum Investment Management Services (NAPIMS), the investment arm of NNPC, Mr Bala Wunti, who was represented by NAPIMS Deputy Manager, Public Affairs, Mrs. Edith Bunmi Lawson, said, “NNPC is an avid believer in investing and touching the lives of all Nigerians and the environment. We will continue to support our JV operating partner, SPDC, to intervene in critical areas in infrastructure, health and education where we can make a difference and spread the benefit of our investments to all Nigerians.” Wunti enjoined the universit y community to put this facility to the best use in a sustainable manner. Vice Chancellor of the university, Professor Adigio, said, “The structures donated will relieve the university of a lot of stress, especially in the Faculty of Engineering where we now have choices of classrooms and even offices. The projects are a real plus to the university and will promote a healthy and comfortable learning environment. We appreciate what SPDC and its partners have done.”

MARITIME

NIMASA Boss Emphasizes Synergy as Key to Successful Fight Against Maritime Crimes used to tackle maritime insecurity. He identified the five clusters of Nigerian maritime collaboration as the Armed Forces/National Security Group (Army, Navy, Air Force, etc); Non-Military Services (Customs, Police, Immigrations, NDLEA etc); Agencies with Incidental Functions (NAFDAC , NNPC , DPR , etc); Regulatory Agencies (NIMASA , NESREA, NOSDRA, NIWA etc); and the Disaster Management Agencies (NEMA).

he Director-General of Nigerian Maritime Administration and Safety Agency (NIMASA), Dr. Bashir Jamoh, has restated the need for enhanced stakeholder collaboration in tackling maritime security challenges in Nigeria and the Gulf of Guinea. Dr. Jamoh made this call in a paper presentation titled, “Enhancing Collaboration amongst Stakeholders for Improved Maritime Security in Nigeria,” at the recently held Chief of the Naval Staff Annual Conference (CONSAC) in Kano State. The NIMASA Director General was also honoured at the event by Chief of the Naval Staff, Vice Admiral Awwal Zubairu Gambo, for ensuring civil military cohesion. Drawing from terrorist attacks of 9-11 on American soil and the report of the 9-11 Commission indicting security agencies for failing to share real-time intelligence, Dr. Jamoh urged Nigerian stakeholders to “learn to share their toys” in a bid to close the gaps and tighten the security ring around the nation’s maritime space against piracy and other maritime crimes. The NIMASA Director General observed that despite the rich potential of the maritime sector in the areas of job creation and revenue generation, and its vital role in facilitating more than 90 per cent of world trade through shipping, the sector was undermined by maritime insecurity.

He stated, “The economic cost of maritime insecurity is very pronounced for Nigeria compared to other countries. While the economic cost of piracy activity in Asia was estimated at $4.5 million (as of 2016), the estimated economic cost of maritime insecurity in the GoG was about $793.7 million.” The NIMASA DG identified sources through which insecurity led to loss of revenue in the maritime sector as ransom payment, insurance premiums, re-routing ships, security equipment, losses to oil and fishing industry, and cost of security escort. Dr. Jamoh said, “Studies have identified the following factors as the drivers of maritime insecurity in the region. They include an increase in ship traffic as a result of globalizsation; the debilitating leadership of many of the states in the region; the proliferation of small arms; poor monitoring and control of the oceans; and criminality, which have been further aggravated by visible youth unemployment. “High level of poverty, and economic hardship were also listed as causative factors. “The impacts of these challenges are far-reaching and requires that all concerned should collaborate to tackle this menace.” Drawing examples from other climes, like the Regional Cooperation Agreement on combating Piracy and Armed Robbery against Ships in Asia (ReCAAP), the NIMASA boss stressed how stakeholder collaboration had been

Dr. Jamoh listed some collaborative efforts by NIMASA to address maritime insecurity to include the implementation of the Deep Blue project; the enactment of the Suppression of Piracy and other Maritime Offences (SPOMO) Act 2019; community engagements; strengthening of the Navies of the Gulf of Guinea (GoG) region; collaboration with CEOs of Maritime Industry Organisations, known as the Joint Maritime Industry Working Group (JMIWG); engagements with security forces (Nigerian Navy, Army, Airforce, Police, Customs, Immigration); and the Gulf of Guinea-Maritime C o lla b o r ati o n Fo r u m / S h a re d Awareness and Deconfliction (GoGMCF/SHADE). He further stated that NIMASA was collaborating with the International Maritime Organisation (IMO), INTERPOL, regional organisations, shipping operators, as well as private security companies, submarine cable operators, and seafarers’ organisations. Dr. Jamoh called for the deployment of more resources for technical assistance to facilitate capacity building and expansion of automation systems for monitoring the maritime sector. He said this would enhance the country’s capacity for cooperation against trans-national maritime crime and terrorism with potentials to adopt a more participatory approach to maritime security. “Working together is, therefore, a most vital approach to defend our seas, enhance maritime security, promote trade, protect the environment, and guarantee the quality of life of our people,” Dr. Jamoh stated.

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MARITIME

NIMASA Seeks Synergy with FDFA on Safety of Fishing Vessels

h e Dire c tor G en eral of the Nigerian Maritime Administration and Safety A gency (NIMASA), Dr. Bashir Jamoh, has called for greater synergy between the Agency and the Federal Department of Fisheries and Aquaculture (FDFA) to ensure safety of fishing vessels and their operators in Nigeria. Dr. Jamoh made the call in Lagos at a strategic meeting with officials of FDFA to discuss issues relating to safety of fishing vessels, Illegal, Unreported and Unregulated (IUU) Fishing, and broader crimes that take place during fishing operations and related matters. Represented by the Head, Special Duties (External Relations and Technical Cooperation), Mr. Isichei Osamgbi, the Director General noted that there should be adequate information sharing between FDFA, which has the mandate to license fishing vessels, and NIMASA that is responsible for registration and survey of the vessels to ensure that unseaworthy vessels are not licensed to operate in Nigerian waters. According to him, “It is important that NIMASA and the Federal Department of Fisheries agree to continuously

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collaborate on modalities for registration, survey and licensing of fishing vessels to ensure that all safety standards are met before they can be allowed to operate. This would drastically reduce incidents involving fishing vessels in our waters.” On maritime security, Jamoh said with the acquisition and training of operators of the Deep Blue assets, the days of criminal elements in Nigeria’s maritime domain were numbered, as the assets had been fully deployed. In his own remarks, Head of Monitoring, Control and Surveillance at the FDFA Lagos Office, Mr. Paul Opuama, thanked NIMASA for hosting the meeting, saying it provides a very useful opportunity to not only clear some grey operational areas but also foster greater collaboration in order to improve safety of fishing vessels. The one day strategic meeting, which held under the auspices of NIMASA’s External Relations and Technical Cooperation programme, was aimed at seeking areas of collaboration between the two agencies for the benefit of the fishing industry in Nigeria.

NPA Partners U.K Border Force on Port Security and Trade Facilitation

he Nigerian Ports Authority, (NPA) is set to partner with the United Kingdom Border Force, on port security and facilitation of legitimate movement of persons and goods at all seaports in the country. The partnership covers security measures, coordination, information sharing and joint operations, to check persons or activities that may cause harm to operations and investments in the nation’s port industry. It seeks to safeguard shipping and cargo traffic, improve intelligence gathering and deepen revenue from maritime trade. NPA’s acting Managing Director, Mohammed Bello-Koko, described the partnership with the UK Border Force as a strategic relations with long term economic benefits to Nigeria and Britain. The ac ting MD who was represented by the Executive Director, Marine and Operations, Hon. Onari Brown,

MARITIME eulogized the UK Agency for the good work it is doing to safeguard the economic and national interests of Britain.

NSC Boss Visits Dala Inland Dry Port

He expressed confidence in the partnership to engender efficiency and value for money in all aspects of port business in Nigeria. The Border Force is a law enforcement agency charged by the UK government to manage immigration and customs checks at all British seaports and airports. The collaboration with the NPA entails the establishment of an Electronic Cargo Targeting System (ECTS), a Joint Port Control Unit (JPU) and a Mobile Task Force (MTF) with the capacity to enhance the work of Nigerian law enforcement agencies operating within the nation’s maritime domain by providing real-time data and business arterial intelligence tools. Furthermore, the partnership wo ul d f o s te r c ritic al a n d sustainable capacity building and manpower development; prioritise the acquisition, deployment and utilisation of resources sensitive to threats and issues related to maritime security. UK Border Force Regional Operations Manager, West Africa, Kris Hawksfield, while commending the Authority for providing a safe environment for port services in the country said he is optimistic that the partnership will enhance Nigeria’s border management capabilities including strengthening the capacity of border law enforcement agencies to protect revenue, to disrupt criminal activities like money laundering, drugs, human trafficking and terrorism. Other benefits he said is decrease in incidences of illicit trade in and out of the country, better compliance to trade laws, culminating in improved performance of Nigerian Ports and increase in the country’s global reputation.

ala Inland Dry Port (IDP) will boost trans-sahara trade developments and indeed AfCFTA, so says the Executive Secretary and Chief Executive Officer of the Nigerian Shipper’s Council (NSC), Hon. Emmanuel Jime who is in Kano participating in the 16th National Council on Transportation. He also declared the Dala Inland Dry Port as a pacesetter for other Dry Ports in the country. The Shippers’ Council boss made these declarations while responding to the Dala IDP Chairman’s welcome address during inspection of the on-going construction at the Dala Inland Dry Port site at Zawachiki in Kano State. In the ES/CEO’s words “Kano leads the way as far as commercial activities are concerned, as all the states in the Northern part of Nigeria regard Kano as the commercial hub”. The NSC boss said that the support and partnership of the Kano State Government with regard to the development of the Dala IDP should be emulated by other State Governments. According to him, “the Dala IDP when completed, will serve to decongest the seaports, reduce the cost of doing business and provide an avenue for shippers in the hinterland and neighboring countries like Niger, Chad, and Benin to have their cargoes transported to their doorsteps”.

The Chairman/CEO of the Dala Inland Dry Port, Abubakar Sahabo Bawuro appreciated the Kano State Government and Nigerian Shippers’ Council for their roles in bringing the IDP project to actualization. He further pleaded for the support of the Council to fast track the conferment of the dry port’s status as a Port of Origin and Port of Destination. He assured that construction at the Dala IDP will be completed by the end of November 2021 and full operation will commence. A s par t of it s continuous Corporate Social Responsibility to the community, the company is constructing a school on the premises for children of the underserved; a project undertaken at the insistence of the Transport Minister, Honorable Rotimi Amaechi. According to the Chairman, the IDP will attract volumes of economic activities to the State, boost the infrastructural development, increase the Internally Generated Revenue (IGR), and also increase employment opportunities. The five-day National Council on Transportation is a triennial event organized by the Federal Ministry of Transportation, had in attendance the Commissioners and Permanent Secretaries of the Ministries of transport in the 36 states of the Federation, multilateral organisations as well as stakeholders in the transport sector.

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INFRASTRUCTURE

Construction of $462m Bonny Deep Seaport Takes Off this Year – NPA

he acting Managing Director, Nigeria Ports Authority, Mohammed Koko, says the construction of the $462m Bonny Deep Seaport will commence within the year. The Punch reports that Koko said this when the Minister of Transportation, Rotimi Amaechi, inspected the proposed site of the seaport recently. He added that construction of the seaport would run concurrently with that of the Port Harcourt-Maiduguri rail line, which also extends to the Bonny Deep Seaport. A statement by the Ministry’s Director, Press and Public Relations, Eric Ojiekwe, titled, “Amaechi inspects proposed site for Bonny Deep Seaport … Construction to commence soon,” said the minister made the visit, alongside the Permanent Secretary, Dr Magdalene Ajani; Koko and experts from the ministry, the NPA and the contractors.

During the inspection, the minister noted that in choosing the site, considerations must be made towards cost reduction and ease of paying compensations. He said while the South-East part of the Island was also viable, the most feasible may be the area to the West in Finima, as it would require less dredging. “The experts have said it will take only 500 metres of dredging at this point to get to 17 metres draught which is our target for the depth of the seaport. “The moment you reclaim 500 metres into the ocean, you get to 17 metres draught. You don’t need further dredging. “While on the other end, you need 1.16kms of dredging to get to the water. It will be more expensive to dredge 1.16km than to build a rail line to this place. We can do the cost analysis and come to a decision.” Amaechi stated that the selection

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of the area when finally decided upon would ensure that pipes that belonged to the Nigerian National Petroleum Corporation would not be tampered with or moved for the rail lines extending to the seaport to be laid. On his part, Koko said that the exercise was done to reconfirm the right location for the port, but final studies will be made before conclusions are reached. “The other location had pipes, so we believe that this one will be perfect. It has a natural draught of about 17 metres. “The Port which will have a capacity of about 500,000 TEUs on completion is a necessary infrastructure for Nigeria. Nigeria has over 823 kilometres of coastline, building deep seaports will bring more economic value to the country and Nigeria will eventually become a maritime hub in Africa or the West African sub-region,” he said.

INFRASTRUCTURE

Energy Transition and the Future of Gas Pipelines

ne research has it that there are about 1,308 operational gas pipelines in the world. These pipelines are used to transport natural gas across cities, countries, and continents. Yet, with the rapid energy transition happening, it is important to rethink the future of gas pipelines. And while that rethinking has been happening amongst business leaders, opting to abandon all natural gas pipelines does not seem like a viable solution, especially considering the critical role gas plays as a transition fuel for many developing economies and even how key it is for heating, transportation, and power supply in more developed economies.

Yet if hydrogen is to be taken seriously, we have to think about transportation infrastructure from now- an important part of the energy value c h a in . W h il e hydrogen can be transported as a liquid in thermoinsulated containers, as g a s in h i g h pressure containers, or as methanol o r a m m o n ia , the most cost-efficient method is via pipelines. Even at that, commencing projects today to construct pipelines solely for hydrogen delivery does not seem economically prudent since the technology for utilising hydrogen large scale is still developing in many parts of the world. Thus, a better approach is to repurpose new natural gas pipelines from the get-go to handle hydrogen transportation. With gas use likely to reduce by 2030 in Europe- a prime destination for export gas- there is a possibility of gas pipelines being empty or running at half capacity soon.

modifications, and of course be more expensive, converting them to carry a blend of natural gas and up to 15% of hydrogen would only require modest modifications to the pipeline. According to Jussi Heikkinen, Director of Global Growth and Development at Wärtsilä , a leading energy solutions company, speaking on the need to modify pipelines to transport hydrogen, “When you go beyond 25 percent hydrogen in the fuel, in most places in the world, you’re no longer able to use the same equipment.” It appears then that constructing natural gas pipelines with a hydrogen future in mind would solve the challenge of having to repurpose these pipelines in the future. The sponsors of the controversial Nordstream 2 pipeline appear to be seeking to set the pace here as its sponsors have revealed that they are considering modifying the pipeline to accommodate the delivery of hydrogen in the future. Another pipeline that has the opportunity to get in the front of the transition infrastructure line is the 5,660 km Nigeria-Morocco Gas Pipeline (NMGP) for which construction began only three months ago.

For instance, one of the arguments by sponsors of the Spire STL natural gas pipeline in the US is that shutting it down will make people die of cold during the winter since it is vital for heating. Thus, while the transition is at play, with efforts to move more away from fossil fuel sources and replace them with renewable energy, we will still see natural gas infrastructure being funded and constructed over the next decade. What we do with this infrastructure, in the long run, is the important question.

The obvious solution is, pass hydrogen through these gas pipelines. However, as the characteristics of hydrogen and natural gas are different, passing hydrogen through a pipe designed specifically for natural gas may destroy the pipeline structure. According to a 2013 study from the U.S. Energy Department’s National Renewable Energy Laboratory (NREL), it could “weaken metal or polyethylene pipes and increase leakage risks, particularly in highpressure pipes”

While it may not be feasible to aim to construct the NMGP as a 100% hydrogen capacity pipeline, as it would involve significant costs that were not originally factored into project costs, constructing the pipeline to accommodate a blend of hydrogen and natural gas is a possibility, and one that will not just reduce greenhouse gas emissions but will also defray the cost of building new dedicated hydrogen pipelines or other costly delivery infrastructure for commercially scaling hydrogen from Africa, thereby keeping energy costs in the future low. Additionally, Nigeria has more potential for green hydrogen- which is sourced from renewable energy- than Russia has with the Nordstream 2 proposal, so it is fitting to make these considerations in the construction of the NMGP.

It is no longer news that hydrogen is the fuel of the future, as it is clean and has the potential to power heavy machinery. While there are various forms of hydrogen – grey, blue, pink, green – the ultimate focus is on harnessing green hydrogen for commercial consumption.

To deliver hydrogen, these pipelines would have to be modified to do so. Research into the conversion of natural gas infrastructure for hydrogen use has revealed that while converting these natural gas pipelines to deliver the only hydrogen would require more significant

To achieve the transition, all natural gas pipelines being constructed should be done to accommodate a blend of hydrogen. This way, a move to 100% hydrogen capacity would cost less and may only require incremental work as opposed to a start from the scratch.

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INFRASTRUCTURE

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.ACROSS AFRICA

Cost of East African Oil Pipeline Hits $5b as Risk Averse Banks Step Away from Project

he withdrawal by risk averse lenders from the East African Crude Oil Pipeline has seen the cost of the project rise by 30 percent to $5 billion, meaning shareholders will be forced to dig deeper into their coffers to fund it. Shareholders of TotalEnergies raised this question during the annual general meeting in May, and company executives confirmed that increase in cost to $5 billion for a fully completed project, of which $2 billion will be financed through shareholders’ equity and $3 billion by external funding. The new cost, however, is a significant jump from the previous $3.5 billion, which required project sponsors and shareholders to raise $2.5 billion in debt financing and $1 billion through equity. The shareholders of the Eacop, also known as the Hoima-Tanga oil pipeline, are TotalEnergies (62 percent), Uganda National Oil Company (15 percent), Tanzania Petroleum Development

Company or TPDC (15 percent) and China National Offshore Oil Corporation (8 percent). At least 10 banks have flagged Eacop as an environmental risk, expected to produce emissions of about 34 tonnes of carbon dioxide at peak production annually, hence not in line with their principle not to lend to projects that do not meet the Paris Agreement goals on climate change. Climate commitments Last month, the project also suffered another setback after global insurers and export credit agencies, including French multinational AXA, withdrew its support. “The underlying project is not compatible with our climate commitments,” AXA wrote in July, while the UK Export Finance also turned down an application for finance, after the UK government ceased financing fossil fuel projects overseas.

The lenders also see Eacop as a project that is fraught with investment risk given the oil price fluctuation while international markets where the oil is to be exported are also embracing clean energy. Despite these fears, the project sponsors say they will secure funding for Eacop as it remains the only component holding back Uganda’s oil project that remains unfunded, and therefore failing first oil production target of 2025. “Following conclusion in April of final agreements with the Uganda and Tanzania governments needed to launch this project, many banks [and] international organisations have confirmed their interest in participating in this funding,” TotalEnegies, the lead investor in Eacop, told shareholders. According to the company’s records, the upstream projects — Tilenga and Kingfisher — are fully funded through equity, to the tune of $6 billion by the two partners TotalEnergies and CNOOC.

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.ACROSS AFRICA Tilenga will take up to $4 billion while investments in the CNOOC operated Kingfisher will take up to $2 billion, both feeding Eacop that is at peak expected to carry 230,000 barrels of oil per day. These projects are part of an estimated $15 billion worth of investments that is expected to flow into Uganda and Tanzania. At least $5 billion of this money is expected to trickle down to local firms that will sign deals to provide services during the pipeline’s construction phase, TotalEnergies CEOPatrick Pouyanné said during the launch in April this year. The company says Eacop is economically robust, will create value for Uganda and Tanzania, with an estimated 10,000 jobs that will be created during the 36-month construction phase. Stranded asset risk However, activists insist that host agreements notwithstanding, risks and impacts keep amounting. In their latest finance risk briefing,

published on August 9, 2021, the ‘Stop Eacop Alliance’ — a coalition of over 260 NGOs — detail significant human rights, biodiversity and climate impacts. They also argue that Eacop carries a “stranded asset risk” and failure to disclose key documents by the project proponent TotalEnergies and the Uganda and Tanzania governments, will have impacts felt across the two countries. “Total may have renamed itself TotalEnergies, but in continuing with its oil projects in East Africa, it demonstrates that it remains committed to new fossil fuels and has zero interest in meeting 1.5 degreealigned climate targets,” says Ryan Brightwell, Human Rights Campaign Co-ordinator at BankTrack. He adds that the French oil major should be working with Uganda and Tanzania on forging a new development path based on renewables, rather than turning a national park into an oil field and locking the country into building the stranded assets of the near future.

affect 14,000 households that will need to be resettled, in addition to over 10,000 other households that will be economically displaced and lose land essential to their livelihoods. TotalEnergies, however, says that Eacop will be executed in an exemplary and transparent manner, taking full account of the environmental and biodiversity issues as well as the rights of local communities, in accordance with environmental and societal standards of the International Finance Corporation. The French company is backed by local shareholders, who include state-owned entities UNOC and TPDC in Uganda and Tanzania respectively, who also argue that Eacop’s value outweighs the negative impacts cited. At 1,445 kilometres long, when completed, Eacop will be the world’s longest heated crude oil pipeline. Source: East African

Apparently, Eacop needs more than 5,300 hectares of land, which will

Angola Sees Oil Exports Hit $6.73bn Gross Revenue in Q2

Gross revenues from the export of oil totaled USD 6.73 billion, with the sale of 97.998 million barrels of crude oil during the second quarter of this year, a rise of 0.11 percent against the first three months of the year.

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The volume exported was around 1.77 million barrels per day, valued at an average weighted price of USD 68.625 per barrel, according to figures published Thursday by the Ministry for Mineral Resources, Oil and Gas.

global Covid-19 vaccination action.

Compared to the first quarter of the same period, export volumes were down 13.89 percent.

Also according to the report, the average export price recorded an increase of 151.85 percent, compared to the period of 2020, which at the time was USD 27.248 per barrel.

The results of oil and gas exports in the period under review were presented by the Secretary of State for Petroleum, José Barroso, who noted the rise in price to around USD 70, which was influenced by the OPEC+ production cuts, the recovery of the global economy, the increase in demand at a world level, as well as the

Leading exports were Dahlia with 11.57 percent, Mustard with 10.77 percent, Nemba with 9.63 percent, Cabinda with 8.60 percent and Sunflower with 8.21 percent, out of a total of 18 branches.

Compared to the first quarter of this year, 2021, there was an increase of 11.25 percent, when the price was set at US$61.683 per barrel. Source: ANGOP

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EquatoriaI Guinea’s Minister of Mines & Hydrocarbons Issues Oil & Gas Worker Vaccinations Mandate

quatorial Guinea (EquatorialOil.com) is leading the way in maintaining prevention measures and ensuring operational safety within the oil and gas sector with the Minister of Mines and Hydrocarbons (MMH), Gabriel Mbaga Obiang Lima, issuing a mandate during a virtual meeting recently for all oil and gas workers to be vaccinated against the coronavirus. The mandate has been enforced in order to drive the country’s vaccination rollout program, ensuring increased operations and production across the hydrocarbons sector while safeguarding workers against the virus. Gabriel Obiang Lima remains committed to expanding the country’s oil and gas sector while at the same time mitigating the spread of the virus. By requiring all oil and gas workers, including both national and expatriate employees to be vaccinated, the MMH is paving the way for other industries to put the safety of

their workers first. “It is forbidden for unvaccinated individuals to work on onshore or offshore facilities. They are public servants and must be protected,” stated Gabriel Obiang Lima in the virtual meeting. Despite experiencing relatively low COVID-19 cases compared to other African countries, Equatorial Guinea’s oil and gas sector suffered significant impacts from the pandemic throughout 2020 and into 2021. With Equatorial Guinea prioritizing its vaccination rollout program – the country has received a shipment of 500,000 Sinopharm vaccines from China at the end of June 2021 with more expected to follow – the oil and gas sector is driving progress. Additionally, in the virtual meeting, the MMH and the Ministry of Health and Social Welfare have requested an increase in the number of weekly flights to Equatorial Guinea, specifically for the oil and gas sector. Requested

through the Political Committee of Surveillance Against COVID-19, the MMH is focused on boosting oil and gas productivity while maintaining the safet y of employees. By working with the Committee, and driving their own vaccination rollout program, the MMH is making significant progress in positioning the country as an African vaccination leader. “Equatorial Guinea has taken the right steps in driving oil and gas productivity by ensuring that the oil and gas sector is both a safe and productive working environment for all oil and gas employees. Africa’s oil and gas sector can lead the way in the continent’s vaccination rollout and we are thankful to the government’s covid committee and other Ministries within Equatorial Guinea,” concluded Gabriel Obiang Lima. Source: Petroleum Africa

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Investors Will Return to Cabo Delgado – Mozambican Energy Minister

he Mozambican Minister of Mineral Resurces and Energy, Max Tonela, speaking to reporters recently, said that the reestablishment of security conditions in the northern province of Cabo Delgado will be determinant for the resumption of the liquefied natural gas (LNG) projects in Palma district. Raids by terrorists linked to the “Islamic State” (ISIS) network forced a halt to the onshore gas operations on the Afungi Peninsula in Palma. Tonela said that the unfolding of the situation on the ground would determine when and how work on the gas project would resume.

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He was speaking in the immediate aftermath of the recapture of the town of Mocimba da Praia by the Mozambican defence and security forces and their Rwandan allies. Much of Palma and Mocimboa da Praia districts are back under government control, though it is feared that the ISIS gangs have split into smaller groups and are still in the bush. “ We are h op ef ul that this performance by the defence and security forces will continue in such a way that not only Mocimboa da Praia, but all the districts affected are retaken, thus ensuring that the

population can resume their normal activities”, said Tonela, cited by the independent television station, STV. The main onshore LNG project is owned by a consortium headed by the French oil and gas comany, Total Energies. Asked about whether Total will resume its work,Tonela said he has been in permanent contact with the French company. Total, and all the country’s other natural resource partners, remain committed to investing in Mozambique, he insisted. Source: All Africa

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Exploring Partnerships to Transform Nigeria’s Hydrocarbon Industry By Ikenna Omeje, Jerome Onoja

eyond the regular oil exploration and production Joint Venture (JV) and Production Sharing Contract (PSC) arrangements that exist between the state-owned company, Nigerian National Petroleum Corporation (NNPC) and a couple of oil majors, the Nigerian Liquefied Natural Gas (NLNG) stands out as the most profitable business enterprise the Nigerian state is credited with. State actors have since been on a search to replicate the successful model and in particular, have the sort of Public Private Partnership which would address the nation’s infrastructural deficit. Some huge traction is being registered in recent times. This write up will highlight the potentials with just a few of such partnerships by Nigerian Content Development and Monitoring Board (NCDMB), the 42

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NNPC and a few others. For Nigeria to achieve industrialisation, experts have been advocating for a financial and business model to be adopted to bring about massive infrastructural development. In this regard, a publicprivate partnership has been found to be the most effective model for doing this, as the model aligns with the economic goals of government, while not jeopardizing the private sector’s pursuit for profit. However, in recent years, indigenous firms and agencies like the NNPC, the NCDMB, Dangote Group, and others, are changing the narrative. Underscoring the importance of Public – Private Partnership in the gas space in developing countries

like Nigeria, the World Bank in its publication titled, “Public and Private Sector Roles in the Supply of Gas Services in Developing Countries” in 2004 said that, built infrastructure will lead to economic growth, and reduce poverty. “Infrastructure services are critical to economic growth, poverty reduction and the achievement of the Bank’s Millennium Development Goals (MDGs). The introduction of gas as an alternative source of energy in developing countries in the recent past is an important development since it often provides a cleaner and cheaper source of energy for industrial and domestic usage than alternative sources of fuels or technologies currently available,” the World Bank said.

COVER STORY will continue to play an important investment role, mainly in those parts of the gas chain where international investors are less willing to provide capital, such as the development of downstream gas networks.”

“To fully benefit from the utilization of natural gas, developing countries will require private and public financing to develop infrastructure and to create domestic and regional gas markets. Developing countries will also require assistance to create efficient gas market structures and legal and regulatory frameworks that encourage private participation and the efficient utilization of gas. The private sector will have to account for a growing share of providing capital for upstream and downstream gas network development. At the same time, the public sector, public-private partnerships and international donor organizations, such as the World Bank Group,

According to John Anyanwu, an energy analyst in a paper titled, “PublicPrivate Partnerships in the Nigerian Energy Sector: Banks’ Roles and Lessons of Experience” governments at various levels in Nigeria had hitherto basically monopolized the energy sector (especially the power sub-sector), playing a two-fold role, they are policy makers and regulators while they simultaneously own the companies that provide infrastructure services. He noted, however, that the weak financial and poor infrastructure situation of the energy sector and an inadequate access to services have shown that governments (Federal, States, and Local) are not able to adequately fulfill these roles. He said that it is therefore imperative that the private sector has to be largely involved through Public-Private Partnerships. For this to be successful, he said that the different levels of government need to: make energy sector policies and regulations PPP-friendly; develop market instruments and capacity to meet long-term equity and debt financing needed by energy projects; develop credible, bankable energy projects, which could be offered for financing to the private sector and the banking system; and develop the capacity in public institutions and officials to efficiently manage the PPP process so as to maximize returns to all shareholders. NCDMB Venture Partnership Programme So far, the Board has committed a total of US$332million under its commercial ventures partnership programme, and targets to attract more project developments in-country valued at US$3.7bn, according to the Executive Secretary of NCDMB, Engr. Simbi Wabote while speaking at the biennial Nigerian Oil & Gas Opportunity Fair (NOGOF) 2021.

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Board has committed a total of US$332million under its commercial ventures partnership programme, and targets to attract more project developments in-country valued at US$3.7bn,

Engr. Simbi Wabote

Some of the partnerships undertaken by the Board include the 5,000 barrels per day Waltersmith Modular Refinery at Ibigwe, Imo State; Azikel Refinery in Bayelsa State; and NEDO Gas Processing Company in Kwale, Delta State for the establishment of 80 million standard cubic feet per day (MMscfd) gas processing plant and a 300MMscfd Kwale Gas Gathering hub. Other investments include the development of 5,000 metric tons LPG Storage and loading terminal facility by Triansel Gas Limited in Koko, Delta State and construction of Energy Park, inclusive of a modular refinery, power plant and 40MMscfd gas processing facility at Egbokor, Edo State by Duport Midstream. Also, the Board, the Nigerian National Petroleum Corporation and ZED Energy Limited recently signed shareholders agreement on the construction of Brass Petroleum Products Terminal Limited (BPPT), to be located at Okpoama, Brass Local Government Area, Bayelsa State.

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COVER STORY The NCDMB and NNPC own 30 percent apiece while ZED Energy – a private firm holds 40 percent. ZED would operate the terminal, which is estimated to cost N10.5 billion upon completion. Some of the benefits of the terminal when it becomes operational, is that it would make refined petroleum products available at riverine communities of the Niger Delta at the standard prices, discourage the operations of illegal refineries and create job opportunities for citizens of the Niger Delta and other Nigerians. Underscoring the economic benefits of co-locating the BPPT with the Energy Infrastructure Park being developed at Okpoama and the Brass Fertiliser and Petrochemical Company Ltd (BFPCL), at Odioma, Brass, the NCDMB boss, Wabote said: “If you go to developed economies, there are parks for manufacturing and industrialization. When you have the Brass Fertilizer, the BPPT and the refinery that is being built in the same area, you get the benefits of being within a Free Trade Zone. It will bring down the costs of developing those products simultaneously because the raw materials are just behind them. There is no reason to take the investments to distant locations where costs would increase.” Other milestones that the Board has made include the partnerships with Eraskon Nigeria Limited 45,000 litres per day Lubricating Blending Plant at Gbarain, Bayelsa State; Ladol Services Limited 24 Megawatts Power Plant at Tarkwa Bay, Lagos State; Bunorr 48,000 litres per day Base Oil Plant, at Imogu – Omagwa, Rivers State; Atlantic Refinery 2,000 Modular Refinery with 20MW Power Plant and 2MW Bi-Fuel Plant at Energy Park Brass FTZ, Bayelsa State; Rungas Alfa FTZ 800,000 unit per year LPG Composite Cylinder at Alaro City, Lagos State; and Rungas Prime Limited 400,000 unit per year LPG Composite Cylinder Manufacturing Plant at Polaku, Bayelsa State. NNPC Partnership Investment

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The NNPC in December 2019, achieved a major milestone in its effort to increase gas production and usage in Nigeria, with the signing of Final Investment Decision (FID) for multi-billion dollar NLNG Train 7 Project between the national oil firm and its partners.

issued by Government for Private Refineries in 2002 and also, the negative consequences of massive importation of petroleum products against the backdrop of low capacity utilization in the existing three (3) state refineries with combined capacity of 445,000 barrels per day.

The FID was followed by the signing of the Engineering, Procurement and Construction (EPC) Contracts in May 2020, for the project with the SCD JV Consortium, comprising affiliates of Saipem, Chiyoda and Daewoo. SCD JV will be constructing one complete train and one common liquefaction unit with a total capacity of approximately 8 MTPA, as well as associated utilities and infrastructure. Train 7 project will be financed partly from NLNG’s balance sheet. It will also be partly financed through the $3 billion multiple-sourced deal which NLNG recently signed with 30 reputable institutions. Sumitomo Mitsui Banking Corp. (SMBC) and Guaranty Trust Bank of Nigeria were the financial advisers on the transaction which involved Export Credit Agencies, development financial institutions, international commercial banks and Nigerian banks Train 7 will increase NLNG production by 35 percent, and it is expected to attract about $10 billion in Foreign Direct Investment (FID). The project upon completion, will support the Federal Government’s drive to diversify its revenue portfolio and generate more revenue from country’s proven gas reserves of about 206 Trillion Cubic Feet (Tcf). Also, in December 2020, the NNPC set up NNPC Greenfield Refinery Limited as a subsidiary, with a mandate to oversee the establishment and operation of new refineries. But before now, there was the NNPC Greenfield Refinery Projects Division (GRPD), which came into existence late 2005 as a strategic response to a lack of visible progress on the 18 Licenses

Male Kyari

The strategy by the NNPC regarding building the Greenfield Refineries is not on a sole risk basis, but to develop investment consortia (in partnership with other prospective local and foreign investors) for these projects while holding reasonable but minority interests. The refineries will be ring-fenced refineries to be operated strictly on a commercial basis; completely market oriented and profit motivated and as such issues of location, configuration and shareholding structure will be determined not solely by NNPC but by the consortia collectively.

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The NCDMB and NNPC own 30 percent apiece while ZED Energy – a private firm holds 40 percent. ZED would operate the terminal, which is estimated to cost N10.5 billion upon completion. Pursuant to this, the Group Managing Director of NNPC, Mele Kyari, in July 2019 announced that the Corporation was set to collaborate with Chevron Nigeria Limited to establish a condensate splinter refinery.

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The refineries will be ringfenced refineries to be operated strictly on a commercial basis; completely market oriented and profit motivated Kyari noted that it was very important to set up such a refinery in order to put an end to the current importation of over 90 percent of petroleum products used in the country, which costs the country huge foreign exchange, adding that proffering a solution to the problem requires a Joint Venture partnership.

COVER STORY our investment and job creation strategy. It will create jobs and provide skills for artisans who will work on the gas pipelines and associated infrastructure. Beyond that, this project will power the industries that have responded with enthusiasm to our investment promotion campaign.” Another significant partnership that the NNPC is engaging in, is the ongoing 614 kilometres AjaokutaKaduna-Kano (AKK) gas pipeline project, which Kyari recently said would be delivered on schedule, to create prosperity through massive job opportunities and guarantee peace for the country.

In a statement recently, the Corporation said that the NNPC Greenfield Refinery Limited is working with third-party investors to establish modular refineries and condensate refineries with combined capacity of 250,000 barrels per day.

The AKK pipeline is being developed on a build-own-operate-transfer (BOOT) basis under public private partnership (PPP) to be supervised by Nigeria’s Infrastructure Concession Regulatory Commission (ICRC).

On gas utilization, the NNPC late August signed a Memorandum of Understanding (MoU) with the Kaduna State Government for utilisation and expansion of gas supply in the state. This is a watershed in the Federal Government’s Decade of Gas initiative which aims at utilising the nation’s abundant gas resources to power the nation’s economy.

Speaking at Gas Sector Stakeholders’ Forum which held in Kano, Kano State, recently, with the theme: “O p t i m iz i n g t h e Ec o n o m i c Development Capacity of AjaokutaKaduna-Kano (AKK) Gas Pipeline Project”, Kyari, stated that the AKK gas project would help revamp about 232 industries creating massive employment opportunities and prosperity for the people.

There is optimism that this new partnership between the NNPC and the Kaduna State Government will help to revitalize moribund industries in the state. Speaking at the signing of the MoU, NNPC GMD Kyari said, “We all know that Kaduna used to be a hub when it comes to industries. It is our hope that this MoU signing will help provide the gas needed for some of those industries to come back to life.” Expressing delight with the prospect of having an additional energy source to power businesses in the state, Governor Nasiru elRufai said, “We wholeheartedly welcome this project. Gas provides a cost-effective option for powering factories, homes and vehicles. For the Kaduna State Government, this project is a welcome boost to

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NNPC Greenfield Refinery Limited is working with thirdparty investors to establish modular refineries and condensate refineries with combined capacity of 250,000 barrels per day. “This project has been on the drawing board for 30 years and the dream was to have gas delivered to Europe across the Trans-Sahara route. What we are seeing today would deliver at least 2billion standard cubic feet of gas to the domestic market at the first instance with the potential to increase it. What this means is that

it will debottleneck the gas supply network in the entire country,” he said. Similarly, the NNPC , China Machinery Engineering Company (CMEC) and General Electric (GE) signed contract for Maiduguri Emergency Power Project. The three firms executed the Engineering, Procurement Construction (EPC) contract and Procurement Equipment contract for the 50MW power project. The project, which aims to combat the perennial power challenge in the Borno State capital and its environs, is an integral part of ongoing efforts to deepen NNPC’s gas utilization for numerous socio-economic benefits across the country. NNPC’s 20 Percent Partnership Stake in Dangote Refinery The ongoing partnership between Dangote Group and the NNPC, which will make the Dangote Group to cede 20 percent stake to the NNPC in its refinery, is one that gladdens the hearts of many Nigerians. The NNPC in May announced its plans to acquire 20 percent stake in the 650,000 barrels per day Dangote refinery, currently under construction in Lekki, Lagos State. The NNPC’s Group Executive D i r e c t o r, R e f i n i n g a n d Petrochemicals, Mustapha Yakubu, had made the disclosure while speaking at the Nigeria Oil and Gas Opportunity Fair (NOGOF), 2021, with the theme: “Leveraging Opportunities and Synergies for Post Pandemic Recovery of the Nigerian Oil and Gas Industry.” Yakubu had said: “We have what we call the Greenfield refinery and the Greenfield Refining Projects Division (GRPD) of the NNPC. What we do, our strategy is to collaborate and seek strategic partnerships with private investors. “At the moment, we have Dangote Refinery, which is the 650,000 barrels per day capacity,

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COVER STORY plus a mini 80,000 tonnes per annum petrochemical plant. “What are we doing there? I can tell you today that we are seeking to have a 20 percent minority stake in Dangote Refinery as part of our collaboration and you know that there’s a huge quantity of crude for that refinery. “That’s 650,000 barrels, going into a single crude distillation unit (CDU). When that comes on board, it will also wet the nation for us.”

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For the Kaduna State Government, this project is a welcome boost to our investment and job creation strategy. It will create jobs and provide skills for artisans who will work on the gas pipelines and associated infrastructure.

business. “No bank will lend money to you to buy equity in a business of this scale if you have not followed the basic valuation process. “The reality is that we have a valuation of this refinery about $19 billion. I don’t have the exact figure. We haven’t closed on this to answer your question straight”. According to Kyari, the NNPC will not spend the Federal Government funds to acquire the equity. “Even for this Dangote Refinery, we are not going to take our (Federal Government) money and buy it. They think we are going to take our money and pay for this refinery,” he said during an interview. “We are going to borrow for the cash flow of this business. We know that this business is viable, it will work, and that it will return dividends. It has a cash flow that is sustainable because it is a refinery business. “In the short term, it will continue to be sustainable. And that is why banks have come up to lend to us so that we can take equity.”

Mustapha Yakubu

Subsequently, the former NNPC’s Group General Manager Group Public Affairs Division, Dr. Kennie Obateru, in a statement noted that the move was in line with Federal Government’s policy. In an interview with Channels Television in June, Kyari said, “We are taking 20 percent equity in the Dangote Refinery. There is a valuation process. This business is very regulated. It is an international

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Speaking in a documentary aired on Arise News Channel recently, the President Dangote Group, Aliko Dangote, informed that the 20 percent stake acquisition by the NNPC will be paid for in tranches split into three. According to him, the first part of the $2.7 billion deal would be paid in cash, the second would be through crude sales and the third would be through profits made by the corporation.

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What we are seeing today would deliver at least 2billion standard cubic feet of gas to the domestic market at the first instance with the potential to increase it.

Dr. Kennie Obateru,

He stated that the refinery is capable of meeting the country’s entire petrol, diesel and jet fuel needs, adding that the country expends about 25 per cent of all its import bills on bringing in petrol products into the country. Dangote who expressed optimism that the newly signed Petroleum Industry Act (PIA) will attract investors into the country, however, noted that the country lost between $50 to $60 billion in investments to the delayed passage of the Bill into law. He said, “So, these are the things that people don’t really understand and I want to really clarify it. When they talk about the $2.7 billion, you know, they (NNPC) are paying one third of the money. “Another one third of the money, again, will actually be paid through supply of crude, with the deduction of maximum of about $2 and some cents. And then the one third of it, which is another $850 to $900 million will be paid from the profit they are going to make from the business. “So it’s not a cash transaction where they are paying all cash. You can see that if we don’t have confidence in what we are doing, we would have asked them to pay all cash.”

COVER STORY According to Dangote, the project currently employs 29,000 Nigerians and 11, 000 foreigners with plans to ramp up the number to 57,000 in the coming months. NNPC Ventures as a Commercial Outfit In mid-August, President Muhammadu Buhari assented to the Petroleum Industry Bill (PIB), which is now known as the Petroleum Industry Act (PIA), thus ending a long wait since early 2000s. Aliko Dangote,

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The NNPC in May announced its plans to acquire 20 percent stake in the 650,000 barrels per day Dangote refinery, currently under construction in Lekki, Lagos State.

On the reason Dangote Group decided to cede 20 percent equity to the NNPC, he said, “People keep talking about the refinery, they didn’t buy only the refinery, they bought refinery with petrochemicals. I could have actually decided to do like some of my my mates here in Nigeria and just keep my money in the bank or keep the money abroad. “But you know I’m very, very passionate about Nigeria and making Nigeria great. If it’s just Dangote group making money, I would have just kept that money and participate in capital markets abroad where my money is in dollars and I am making money, but no. “We know as a country we have challenges, how do we address these issues. The only way for me is not to sit and be criticising, no, I should be part of the problem solvers and part of the change. My prayer is that I will give most of my wealth when I am alive.”

Under the Act, the NNPC Limited is now a profit-making entity without the control of the government. As it stands, the national oil firm can sell shares to the public as a registered public liability company under the Companies and Allied Matters Act (CAMA), just like the Saudi Arabia’s Aramco. Late August, Buhari announced that sequel to the completion of the statutory annual audit exercise for year 2020, the NNPC made a profit after tax of N287 billion in 2020.

“The NNPC losses were reduced from N803 Billion in year 2018 to N1.7 Billion in year 2019 and the eventual declaration of Net Profit in Year 2020 for the first time in its 44-year history. “This development is consistent with this administration’s commitment to ensuring prudent management of resources and maximization of value for the Nigerian people from their natural resources. “I have further directed the NNPC to timely publish the Audited Financial statements in line with the requirements of the law and as follow up to our commitment to ensuring transparency and accountability by public institutions.

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“We are going to borrow for the cash flow of this business. We know that this business is viable, it will work, and that it will return dividends. It has a cash flow that is sustainable because it is a refinery business.

“I congratulate th e B oard , Management and Staff of the Corporation and look forward to greater value creation for the Nigerian people.”

Muhammadu Buhari

The President said, “I am pleased to announce the declaration of Profit after Tax of Two Hundred and Eighty Seven Billion Naira (N287 Billion) in Year 2020 by the Nigerian National Petroleum Corporation. This is sequel to the completion of the statutory Annual Audit exercise for Year 2020.

What this suggests is that with full operationalization of PIA, the NNPC Limited will become more profitable, and have more freedom to engage in fruitful partnerships that will help drive infrastructural development in the country’s energy space, boost the country’s economy and help it achieve industrialization. Conclusion Through the current efforts to deepen Public-Private Partnership, Nigeria is on the right track towards achieving infrastructural development in the energy space, and becoming an industrialised nation. But more needs to be done.

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COVER STORY To enhance gas production and revenue generation in the country, the Minister of State for Petroleum Resources, Chief Timipre Sylva inaugurated a new Nigerian Gas Transportation Network Code (NGTNC) in February 2020, at the Nigeria International Petroleum Summit (NIPS) in Abuja.

“The network code investment areas that the DPR has received proposals on include power generation, ammonia for fertiliser, methanol plant and domestic liquefied natural gas. “Others are virtual pipeline systems, new gas hubs and the establishment of a Nigerian Gas Trading Exchange.”

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According to Dangote, the project currently employs 29,000 Nigerians and 11, 000 foreigners with plans to ramp up the number to 57,000 in the coming months.

According to Auwalu, the strict implementation of the NGTNC has improved investors confidence in the evolving domestic gas market, adding that it has helped to grow Nigeria’s gas market coverage with a pricing regulations now in place. The NGTCN is a specialised set of rules developed by the DPR to guide the implementation of a fair and nondiscriminatory open access for gas transportation in Nigeria. “Confidence of investors across the domestic gas value chain has shown positive trend through specific requests for DPR’s support for gas supply to the tune of over 500 million standard cubic feet per day and for investments of over $500 million,” Auwalu said.

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Going for ward, the Federal Government needs to adopt PublicPrivate Partnership model in the development of frontier basins outside of the Niger Delta. Some of these basins include Anambra Basin, Benue Trough, Bida Basin, Dahomey Basin and so on. Speaking in this regard, the Managing Director/Chief Executive Officer of an indigenous oil and gas firm, ND Western, Eberechukwu Oji, has advocated for more private investment participation in the frontier basin exploration. Oji who stated this in an interview recently with the Punch said that considering the fact that Nigeria has abundant oil and gas reserves, it is important that the country maximizes the known and existing potential whilst making further investments in exploration.

Timipre Sylva

During an interactive session with the media to mark the first year of operationalising the network code in the country recently, the Director of Department of Petroleum Resources (DPR), Engr. Sarki Auwalu, said that the Agency has received about $500 million gas development investment proposals.

co m p etiti ve a cce s s to g a s transportation infrastructure and would help to grow gas infrastructure, expand gas utilisation, curb flaring and provide codes to standardise gas value chain in line with global best practices.

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Engr. Sarki Auwalu

Auwalu also noted that the NGTNC has also improved domestic gas market linkage between downstream demand points and upstream gas supply opportunities, adding that the construction of gas pipelines across the country and the increased investment brought by the NGTNC would create job opportunities for Nigerians.

“The NNPC losses were reduced from N803 Billion in year 2018 to N1.7 Billion in year 2019 and the eventual declaration of Net Profit in Year 2020 for the first time in its 44-year history.

The NGTNC is a contractual framework between the gas transportation network operator and gas shippers that specifies the terms and guidelines for operation and use of the gas network. Eberechukwu Oji

It aims to provide open and

COVER STORY He, however, averred that mandating a percentage for frontier basin exploration as contained in the PIA, is “a mistake and should be corrected.” According to Oji, the country’s focus should be on diversifying its economy by building a strong and well-funded sovereign wealth fund to drive the diversification agenda. The PIB mandates that the NNPC Limited should be spending 30 per cent of its profits on oil exploration in the frontier basins. “In my view, capital allocation is best handled by competent managers of any corporate organisation of the size of the new NNPC. Mandating a percentage for frontier basin exploration is a mistake and should

be corrected,” Oji said. “If anything, we should be seeking to diversify the Nigerian economy by building a strong and wellfunded sovereign wealth fund to drive the diversification agenda. We need to invest more in gas as a transition fuel, invest in renewables to future-proof our economy and channel our available funds to the most important resource that Nigeria has which is her people. “Aggressive human capacity development in the frontier basin is guaranteed to pay more long-term dividend than a certain per cent profit allocation for exploration in the same basin.”

will not only drive investments. It will also help the Federal Government to generate enormous revenue to build infrastructure that will support economic growth and development as well as speedy the industrialisation agenda of the government.

“

“Confidence of investors across the domestic gas value chain has shown positive trend through specific requests for DPR’s support for gas supply to the tune of over 500 million standard cubic feet per day and for investments of over $500 million,” Auwalu said.

A dopting a Private - Public Partnership in the frontier basins

The Waltersmith refinery in Nigeria is the largest commissioned modular refinery in the country. Image courtesy of Nigeria’s Department of Petroleum Resources.

Majorwaves Energy Report SEPTEMBER 2021, Vol 4 No 9

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SPOTLIGHT

The Fourth Industrial Revolution, Disruptive Digital Technologies, and the Need to Regulate ‘Our Common Enemy’ By Engr Justice Derefaka

interwoven into government, society, and the economy, and as society’s reliance on technology grows, there is a growing concern about cyberspace’s resilience and security, especially in light of the growing number of cyberattacks (What I would refer to as – “Our Common Enemy - The Hacktivists”) and the need for stronger cybersecurity.

h e Fo ur th In d us trial Revolutio n (4IR ) ha s generated a lot of buzz because of its disruptive digital technologies that promise to revolutionize our lives, calibrate our decision-making with algorithmic precision, and gratify our every want in real time. But what are the dangers, and how will we police this new cyberspace?

These questions are important to answer as technology, particularly disruptive digital technology, is becoming increasingly important in our modern world. The rise of cyberspace demonstrates the reliance on and increasing relevance of digital technology as there are approximately 1.25 billion websites registered in cyberspace. As cyberspace becomes more

The first Industrial Revolution mechanized manufacturing using water and steam power; the second employed electricity, resulting in a massive industrial sector; and the third saw the beginnings of electronics and information technology to automate production using electricity. We have now reached the fourth Industrial Revolution (“4IR”), which is characterized by a convergence of technology that blurs the distinctions between the physical, digital, and biological realms. That is, as we embark on the 4IR, we see the fusion of OT (operational technology) and IT (information technology) - the fusion of the physical space with digital. The first Industrial Revolution mechanized manufacturing using water and steam power; the second employed electricity, resulting in a massive industrial sector;

Majorwaves Energy Report SEPTEMBER 2021, Vol 4 No 9

SPOTLIGHT and the third saw the beginnings of electronics and information technology to automate production using electricity. We have now reached the fourth Industrial Revolution (“4IR”), which is characterized by a convergence of technology that blurs the distinctions between the physical, digital, and biological realms. That is, as we embark on the 4IR, we see the fusion of OT (operational technology) and IT (information technology) - the fusion of the physical space with digital. With these advancements comes the realization that the way we used to do things is no longer acceptable. To embrace the future, a business, a government, a law enforcement organization, a regulatory agency, an academic institution, or an individual must all have the bravery to modify our past practices. Rising Trend of Cybersecurity Vulnerabilities The upside benefits and adverse concerns of fusing developing technology have recently begun to arise. The benefits can be seen in the increased business and job opportunities created by innovative products and services. On the flip side, technological advancements have birthed hazards including a rise in sophisticated cyberattacks with increased exposure to cybersecurity vulnerabilities. More so, as more devices become connected to the Internet, malicious technological innovations aimed at disrupting and sabotaging the digital and physical environment will remain commonplace. For example, news reports have documented assaults on Internet of Things (IoT) which have targeted critical infrastructure in recent years. One of such reports detailed how a technological firm was targeted by a Distributed Denial of Service (DDoS) attack by “our common enemy” who had taken control of one of its vital control panels. The company was asked to make monetary reward in exchange for regaining control of its operations. Instead of complying with the common enemy,

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the company sought to restore its account by changing passwords. Unfortunately, after our common enemy discovered the company’s actions, they made backup logins to the panel and began destroying files at random. Unfortunately, the scenario forced the company out of business.

as digitally stored assets, could be easily compromised by cyberattacks. Furthermore, the costs of data breach compensation, lawsuits, and recovering from cyberattacks by rehiring and safeguarding networks are exceedingly significant. According to one World Bank estimate, cyberattacks will cost the global economy up to USD 2 trillion in 2019.

As cyberspace becomes more interwoven into government, society, and the economy, and as society’s reliance on technology grows, there is a growing concern about cyberspace’s resilience and security, especially in light of the growing number of cyberattacks (What I would refer to as – “Our Common Enemy The Hacktivists”) and the need for stronger cybersecurity.

H e n ce , w h e n it c o m e s to c y b e r s e c u r i t y, b u s i n e s s e s , governments, organizations, and individuals face a variety of concerns and goals. To define obligations and maintain safety and security in cyberspace, policymakers and legislators must create laws, legislations, rules, regulations, and guidelines. They must, however, comprehend emerging technology, including the dangers and hazards as well as the potential, in order to do so effectively. Policymakers and lawmakers must also be able to strike a balance between safety and security, as well as privacy and freedom of expression, while still adhering to international standards and accords.

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It is especially important to consider these vulnerabilities as the amount of data generated is quickly becoming a valuable asset. Personal information, financial transactions, assets and infrastructure, government records, corporate operations, and accounts and strategies are just a few examples of the types of data collected. The cloud already hosts a large amount of business processes and personal data in developed countries, while the developing world is catching up in terms of constructing crucial physical and security infrastructure to support these new technologies. Cyb erat tacks are therefore becoming more common in countries with poor infrastructure, access, capacity, and resources with the number, intensity, and severity of cyberattacks increasing over time. In 2015, around the world, four out of five organizations employing over 2,500 people were targets of cyber-attacks and the estimated financial impact of all such events exceeded $440 billion. With more than 50 billion connected devices and 1.3 zettabytes of worldwide Internet traffic in 2016, there is a growing concern that key physical infrastruc ture and facilities connected to the Internet, as well

Above all, finding innovative ways to collaborate with governments to address global concerns is in the best interests of businesses. Many threats, from energy security to unemployment, can only be handled if various stakeholders see the need for coordinated action. Identification of important risks and related interests, as well as solid alignment and powerful consensus among business and other stakeholders on the need to address them are all prerequisites for such partnership. But then, this is easier said. Premised on the above, no doubt technology saves the day. Nobody is ever completely safe from dailyevolving cyber-threats, but public and private sector organizations may rest certain that the dangers they face can be lessened if they are aware of the challenges and have this modern technology at their disposal. These technologies are the next generation of cybersecurity, assisting in the defense against a constantly evolving threat scenario.

SPOTLIGHT Despite their complexity, they are remarkably user-friendly, costeffective, flexible, and easy to integrate end-to-end. Mapping Nigeria’s Oil and Gas Industry: Disruptive Digital Technologies and Cybersecurity Challenges Businesses flourishing in the digital era (i.e., Apple, Amazon, Google, etc.) have shown that distinction from competition is achieved through the use of an ecosystem that enables data-driven insights. All disruption (digital or otherwise) takes place on an industry-wide scale, forcing a significant shift in profitability from one prevailing business model to another. This has now shifted the perspective in the oil and gas industry to view digitization as a critical component of core business. The Oil and Gas industry is no stranger to big data, technology, and digital innovation. The industry pioneered the first digital age in the 1980s and 1990s. Long before phrases such as big data, advanced analytics, and the Internet of Things became popular. Nowadays businesses are not just being driven to transform to meet the demands of digital. Oil and gas businesses are looking for new ways to expand production capacity and operating efficiencies, driven by rising exploration and production costs, as well as increased competitive intensity and regulatory challenges. This has resulted in a quick adoption of digital technologies to assist in the management of their businesses. As these technologies are integrated across oil and gas operations, a new phenomenon known as the ‘Digital Oilfield’ is emerging. It is the outcome of a merger of information technology (IT) and operational technology (OT), and it is a new method of doing business that is helping oil and gas businesses cut costs, increase efficiency, and comply with laws. Simultaneously, this shift to the Digital Oilfield exposes corporations to major cyber-threats, jeopardizing production, reputation, and, eventually, earnings. A successful attack today, more than ever before, can have disastrous effects for infrastructure, intellectual property,

and business profitability. Without a doubt, the oil and gas industry has played a significant part in Nigeria’s economic transformation. We also know that disruptive digital transformation technology is gaining traction as a force for change in the world. Just as connectivity has demonstrated the capacity to empower millions of individuals while presenting businesses with unrivalled prospects for value generation and capture, so also connectivity has shown the potential to empower these businesses. One of the major developments reshaping Nigeria’s oil and gas industry is digital. Disruption (Innovation) is a force unlike any other that is transforming the corporate landscape. As significant investment in oil and gas has generated enormous data to alter operations and create new business models, exponential increase in technology, data, and capabilities is enabling unprecedented transformation. Digital disruption is a change in industry value triggered by advances in information and communications technology. Nigeria’s oil and gas industry has the opportunity to redefine its boundaries through digitalization. Digitalization can act as an enabler to tackle climate change issues as well as budget and schedule overruns and provide value to all its stakeholders. Digital Disrupters (Innovators) focus on more than improved access to data, end-to-end process delivery and cost cutting; they create and adjust businesses around concepts such as customer convenience, collaboration, transparency, and connectivity that enable interaction and security. Yet, we know that today’s pace of disruptive digital technological p ro g re s si o n p re s e nt s b ot h opportunities and threats to the landscape for the oil and gas industry, both in Nigeria and globally. We also know that the oil and gas industry faces a wide range of risks that can cause financial loss and reputational damage, from market commotion to cyber threats and associated technology disruptions. With oil and gas firms facing constant changes

in the market, business flexibility is no longer just about the ability to adapt and recover from disruption, (business continuity planning) but about being able to anticipate and prevent any disruption in the first instance. The oil and gas business is one of the world’s most important financial sectors, vital to both global and national economies. As a result, hackers looking to exploit vulnerabilities in Industrial Control Systems (ICS) will target this industry. As evidenced by the current increase in ICS assaults, adversaries with a specific interest in oil and gas firms are still active and improving their tactics. The protection of the global economy from cyber-attacks is therefore critical.

“

Oil and gas businesses are looking for new ways to expand production capacity and operating efficiencies, driven by rising exploration and production costs, as well as increased competitive intensity and regulatory challenges. This has resulted in a quick adoption of digital technologies to assist in the management of their businesses.

The Ponemon Institute, a Michiganbased research center focused on privacy, data protection and information security policy, polled over 370 US oil and gas security specialists, who cited the five risks to the industry’s cyber readiness as follows: “OT technology is more vulnerable than IT; cyber risks, particularly those affecting the supply chain, are difficult to address; many oil and gas companies are unprepared for cyber-attacks and security breaches; organizational challenges affect cyber readiness; and negligent and malicious insiders pose the greatest threat to critical OT. According to the conclusions

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SPOTLIGHT of the poll, the oil and gas industry’s cybersecurity measures are falling behind the rapid digitalization of operations. Only 35% of respondents polled thought their company’s OT cyber readiness was good. In the preceding year, two-thirds of respondents stated that their operations had at least one security breach that resulted in the loss of confidential information or OT disruption. While the sector appears to be ready for cyber-attacks, they must be aware that “our common enemy – The Hacktivists” are heavily investing in the ability to disrupt key infrastructure. In addition, the attackers’ goals and motivations have shifted. The attackers want to cause business disruption and distortion, which will affect equipment and maybe result in death. Infrastructure sabotage, espionage, and data theft are among the other motives of attacks. To effectively combat this threat, it is critical to enhance the cost of cybercrime and the risks that our common enemy’s face. This can only be accomplished through successful public-private partnerships, with businesses collaborating with law enforcement. Although there are a number of notable collaborative initiatives in place, they are fragmented and insufficient to meet current needs. As a result, a paradigm shift in how we collectively approach this problem is essential. Little wonder, in 2020, the Federal Government of Nigeria was urged to protect oil industry data against cyber-attack during the 2020 edition of the Nigerian International Petroleum Summit (NIPS) which took place in the nation’s capital, Abuja.

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today’s pace of disruptive digital technological progression presents both opportunities and threats to the landscape for the oil and gas industry, both in Nigeria and globally. 54

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Digitalization and the Quest for Reduced Oil Production Cost

of Nigeria’s poor oil and gas asset management.

The Nigerian oil sector has long faced difficulties, one of which being the high cost of production. Until now, the country’s unit operating cost has been among the highest in the world. While such a lack of global costcompetitiveness may be overlooked during periods of relatively high crude oil prices, its negative impact is magnified when oil prices fall. This was especially noticeable at the COVID-19 pandemic’s peak.

Unless drastic and realistic steps are made to reverse the rising cost of crude oil production in Nigeria, the revenue generated will end up being the same as the cost of production. Many oil and gas projects in Nigeria are already experiencing investor indifference as a result of the disproportionate impact of production costs on earnings.

As a result of the pandemic’s detrimental effects, the world economy underwent a substantial slowdown. While the effects varied by industry, the oil and gas industry took the brunt of the blow, as oil prices plunged due to a demand and supply imbalance, resulting in a huge drop in oil profits. However, depending on the cost of production, the size and impact of the income decrease varied between exporting countries. Time and time again, it’s been echoed that Nigeria’s oil production costs are not globally competitive, in addition to its poor revenue. Nigeria’s crude oil production costs are still among the highest in the world. The revenue generated from crude oil production in Nigeria could end up being negative net revenue unless drastic and realistic steps are made to offset the rising cost of production. As a result, the profit margin is capped, and economic expansion is constrained. As a result, unless all players in the Nigerian oil and gas industry work together to cut production costs, our oil and gas output may not be globally competitive in the current low oil price environment, and some oil companies may be forced to cease operations entirely. With crude oil production costs as high as $30 per barrel in Nigeria and a low market price, it is worth considering if investing in crude oil production is financially viable. A narrow profit margin is the outcome of high production costs and low oil prices, which is an indictment

The obvious concerns in the oil and gas sector, among others, prompted a Presidential Retreat in 2019 to address these issues. The Presidential Retreat with all Ministers present took place on 5th and 6th of August 2019. President Muhammadu Buhari communicated his aims in the “Next Level” Agenda and his focus on performance against these priorities during the inauguration of his cabinet. “Oil and gas remain vital to the Nigerian economy of today and tomorrow. It will continue to be critical to the successful execution of our budget at all levels of government,” President Buhari stated during the retreat. On assumption of office, H.E. Chief Timipre Sylva, Honorable Minister of State for Petroleum Resources, convened an early meeting with key ministry leaders and heads of agencies to cascade the Presidential Agenda, receive status reports from MDAs, and develop strategic priorities, a roadmap, and a delivery framework for the next four years and beyond. The retreat concluded, among other things, with the development of high-level strategic priorities that focus on increasing Federation Revenue through cost control and increased efficiencies, as well as investment in capital projects, thereby enhancing job creation and poverty eradication opportunities. This resulted in the development of a consolidated roadmap for 2019– 2023, which was captured in the Ministry of Petroleum Resources’ Nine (9) Strategic Priorities at its Ministerial Retreat on September 21st and 22nd, 2019.

SPOTLIGHT

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it is critical to enhance the cost of cybercrime and the risks that our common enemy’s face. This can only be accomplished through successful publicprivate partnerships, with businesses collaborating with law enforcement. To this end, the Honorable Minister of State for Petroleum Resources, H.E. Chief Timipre Sylva, has repeatedly expressed grave concern about the high cost of producing crude oil in Nigeria, and has called for an immediate reduction in the cost to a target of $10 per barrel or less, as well as an increase in crude oil production to 3 million barrels per day. Based on the foregoing, Mallam Mele K, Kyari, the Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC), set in motion and created policy objectives targeted at halting Nigeria’s falling oil income. The two policy objectives that are ultimately aimed at increasing the profit margin for oil and gas production in Nigeria include aggressive reduction of the unit operating cost (UOC) to $10 per barrel or less by the end of 2021, and consistent improvement of the country’s oil production to at least 3 million barrels per day between 2021 and 2022. These policy goals must be met while adhering to strict health, safety, and environmental best practices and without risking the industry’s growth. The anticipated boost in revenue will act as a catalyst for the country’s economic recovery. The achievement of these objectives will necessitate a significant shift in asset management

strategy. The identification of the various contributory elements to unit operating costs, as well as the engagement of relevant stakeholders in devising policies and practices for driving operational excellence and cost optimization in asset management, are critical steps toward realizing the NNPC GMD’s policy objectives. To that end, the NNPC and its subsidiary, Integrated Data Services Limited (IDSL), last year spearheaded a number of strategic moves across the oil industry, all with the goal of meeting the Federal Government’s $10 per barrel production target by the end of 2021. These efforts culminated in a series of webinar sessions led by IDSL , with technical support provided by CypherCrescent, a well-known consultancy firm. The series’ overall goal was to promote asset management operational excellence by inspiring the Nigerian Exploration &Production (E&P) sector to use the important aspects of the technical production value loop data, process, technology, people, and organizational framework – to drive drastic cost reduction. The engagement sessions, which ran from August 13 to December 10, 2020, drew some of the brightest minds in Nigeria’s oil and gas business, as well as key firms in the E&P sector, service providers, and other key stakeholders. Asset management operational excellence reveals a continuous problem-solving approach that enhances oil and gas recovery (technical efficiency) at a reduced p ro d u c tio n co s t (e co n o mic ef ficienc y). This involves implementing an incorporated approach to produce oil & gas

safely, optimally, and economically, thereby maximizing value for the shareholders. Efficient asset management is hinged on proactive and informed decision-making, which is in turn facilitated by having the right people, processes, technologies, and organizational support. Central to an efficient asset management strateg y is the availability of the right data to all stakeholders in a timely way for informed and technology-aided decision making. It is also critical that organization have the skills and technology they need to eliminate redundancies, optimize processes, and improve decision-making in order to get more value out of the assets. Data, people, procedures, technologies, and organizational support are the main ingredients for achieving operational excellence in asset management.

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Asset management operational excellence reveals a continuous problem-solving approach that enhances oil and gas recovery (technical efficiency) at a reduced production cost (economic efficiency). About the Author: Engr. Justice Derefaka is a doctoral research scholar rounding up his doctorate thesis and viva voce at the University of Bradford, UK and is the Technical Adviser (TA) – Gas Business & Policy Implementation to the Honourable Minister of State, Petroleum Resources.

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Majorwaves Energy Report

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ENERGY WOMAN

Women Make Up Just 1% of CEOs in Oil and Gas Industry -Patricia Simon-Hart

espite women making up 22 percent of the oil and gas workforce globally, as well as 27 percent of entry-level and 17 percent of seniorlevel positions, they account for just 1 percent of the Chief Executive Officers’ positions in the industry, the Managing Director/CEO of AFTRAC Limited and Co-Founder, Women in Energy Network (WIEN), Patricia Simon-Hart has said. Making a presentation on “Solutions Towards a Gender Diverse & Inclusive Oil & Gas Industry” at the just-concluded Angola Oil and Gas Service and Technology Conference, Simon-Hart said, “There are fewer women in oil and gas jobs than almost any other major industry, accounting for less than 22 percent of employees in the sector worldwide – and these figures grow smaller the higher up business ladder you go.” Citing the World Bank Gender Data Portal, she said that 1 in 3 businesses globally are owned by women; female

participation is higher among newly registered firms; men are more likely to save or borrow to start, operate and expand businesses than women; and there is difficulty locating data on women-owned oil and gas businesses. Simon- Hart identified lack of data, mindset, lack of awareness, challenges accessing credit, access to opportunities, risk averse, and absence of role models as some of the key barriers affecting women’s participation in the oil and gas business. Also citing the African Development Bank (AfDB), she said that the extractive industry accounts for only 1 percent of Africa’s labour f o r c e . B a s e d o n N i g e r ia’s Extractive Industries Transparency Initiative (NEITI) estimation, she said that women make up only 18 percent of the workforce in the extractive industry in Nigeria, adding that 58 percent of women are self-employed or entrepreneurs in Sub-Saharan

Africa. She noted that Nigeria leads the way with the highest percentage of new female-owned firms. She, however, informed that there is no data on women-owned oil and gas businesses. “While women in Africa make up a considerable percentage of entrepreneurs, the oil & gas sector continues to lag behind. Only a few have managed to transcend the barriers and unconscious biases to participate in the value chain. And those that do, remain as SME’s,” Simon-Hart noted.

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“There are fewer women in oil and gas jobs than almost any other major industry, accounting for less than 22 percent of employees in the sector worldwide – and these figures grow smaller the higher up business ladder you go.” Majorwaves Energy Report SEPTEMBER 2021, Vol 4 No 9

ENERGY WOMAN She suggested creating awareness to confront unconscious bias as the first step to addressing it. According to her, there is a need to include gender in local content policies.

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extractive industry accounts for only 1 percent of Africa’s labour force. “Creating an enabling institutional framework to reduce competition with larger suppliers and contractors; setting mandatory requirements for contractors to employ women; requirement for supply chains to set targets to include women-owned

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business (WOBs) as contractors; creating incentives for subcontracting to WOBs; promoting joint venture allian ce that in clu de WO B; information sharing with a focus on creating opportunities for WOBs,” she said. Acknowledging emerging opportunities in the industry, SimonHart said, “The sector is becoming more mechanized and less reliant on heavy manual labour. Emerging digital technology and the IoT is paving a way for more technical roles for women.” She advocated for the establishment of a baseline on gender diversity and inclusion for Africa; initiation of women in oil and gas programs; and

setting up of goals and targets across the oil and gas supply chain. Others include creating formal mentorship programmes for women in business; creating awareness and training to address unconscious bias; and mapping opportunities with available competence.

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Emerging digital technology and the IoT is paving a way for more technical roles for women.”

gas development:

chevron's success story is

nigeria's success story...

Chevron Nigeria Limited (CNL), has an aggressive gas development strategy that aims to end routine gas flaring and build a profitable gas business through a portfolio of domestic, regional and export supply projects that fulfill the NNPC/CNL Joint Venture Domestic Gas Supply Obligation and support the Nigerian Gas Master Plan We have been the highest supplier of high quality domestic gas in Nigeria since 2015 and will continue to explore opportunities to maintain this position. We have since 2008 also reduced continuous gas flaring in our operations in Nigeria by over 90%. We led the development of the West African Gas Pipeline project through which Nigeria supplies gas to Benin Republic, Togo, and Ghana. All these are proofs that …in the area of natural gas development, Chevron's success story is Nigeria's success story

Majorwaves Energy Report SEPTEMBER 2021, Vol 4 No 9

Majorwaves Energy Report

SEPTEMBER 2021, Vol 4 No 9