Monday, 22 February 2016

Local Content ll’ not be lowered over low crude oil prices-NCDMB


NCDMB Executive Secretary, Mr. Denzil Kentebe
Nigerian Content scopes for new and ongoing oil and gas projects will not be reduced because of the substantial drop in crude oil prices, the Executive Secretary Nigerian Content Development and Monitoring Board (NCDMB), Mr. Denzil Kentebe has confirmed.
The Nigerian Oil and Gas Industry Content Development (NOGICD) Act spelt out percentages that must be achieved for every activity connected with operations in the upstream sector of the Nigerian oil and gas industry and these benchmarks are enforced by the Board on projects through various mechanisms.
Speaking when he met with the Managing Director of Total Exploration and Production Nigeria Limited, Mr. Nicolas Terraz in Abuja recently, the Executive Secretary regretted the negative effect the fallen oil prices has had on the Nigerian oil and gas industry, which included contracts being reviewed downwards, delays in approving new contracts, drop in drilling campaigns and even attempts to negotiate away Local Content in projects.
He however, affirmed that the Board was convinced that there was no need to cut back on Local Content requirements for projects.
Rejecting the perception that Local Content increases cost of projects, Kentebe called for “a holistic review of every contract scope and realistic and honest efforts to adjust costs across the board.” He stressed that industry stakeholders “have to look at the long term and realize that a strong and viable local supply chain ultimately helps in reducing cost of projects while creating a local conducive atmosphere for business to thrive.”
Speaking further, the Executive Secretary underlined the close collaboration the Board had enjoyed with international operating companies and other key stakeholders, noting that it helped to institutionalize Local Content practice in the oil and gas industry.
He stated that Total E&P’s Egina project was the first deep water project to take off under the Nigerian Content Act, adding that major breakthroughs were being recorded on the project in terms of scope of work given to Nigerian companies in engineering, fabrication, training, procurement of manufactured goods and other areas.  
According to Kentebe, “a legacy project (Floating Production Storage and Offloading Topside Integration Yard) is under construction. This facility will create thousands of job opportunities, domicile major engineering, procurement and construction (EPC) activities in-country and keep future FPSO integration scopes in Nigeria.”
He confirmed the Board’s commitment to ensure that all agreed Nigerian Content scopes on the Egina project are fulfilled, charging Total E&P to work closely with the Board and the EPC contractors in addressing all issues that may impact schedule, quality or pricing on the project.
In his remarks, the Managing Director of Total E&P stated that the company had taken steps to cut costs in view of the fallen oil prices. Some of these strategies according to Terraz include improving efficiency, eliminating waste, reducing expatriate workforce and accelerating succession plans for Nigerian understudies.

While assuring that the company had no intention to downsize its workforce in Nigeria and other locations, the Managing Director called for an industry effort to reduce the long contracting cycle, which he believes contribute to the escalation of project costs.



Discos to dialogue with Senate over electricity tariff


…says no going back on new tariff hike
Executive Director, ANED Mr. Sunday Oduntan
By Oluwagbenga Bankole

The electricity distribution companies in the country under the aegis of Association of Nigerian Electricity Distributors (ANED) have said that they are initiating a move to dialogue with the Senate in order to enlight them and find a lasting solution to the controversy surrounding the new electricity tariff hike.

The Senate on last week directed the immediate reversal of the recent hike in electricity tariff announced by the Nigerian Electricity Regulatory Commission (NERC).

Speaking exclusively with TOTALNEWS247, the Executive Director of ANED Mr. Sunday Oduntan said that they are aware of the fact that the Senate has passed a resolution, saying that the resolution of the senate is not an act of parliament, but an advice.

Oduntan who emphatically stated that there is no going back on the new tariff hike, said the Disocs are in discussion with the Senate to see how they can enlighten them more and find a lasting solution to the issue.

He stated that unless if anybody wants the industry to collapse, there is no way they can run this industry without a cost reflective tariff, adding that “and that is the bitter truth. Anybody who is averting to the bitter truth can let us go back to the dark ages. It is a choice between darkness and light. If we want to continue with the old system so be it.”

On the accusation by the Nigerian Labour Congress (NLC) that there was no consultation between them and the Discos before the hike, Oduntan explained that; “we carried out a wide consultation before the increment. I am not saying all the stakeholders support the tariff increment, but majority of people agreed when they saw the facts and the figures.”

He further stated that; “people are now missing electricity with politics and I think we should separate it. Those who are at the Senate can afford not to take light from the national grid. They have money to buy diesel. I just pity the masses. They said they are fighting for Nigerians, but actually working against Nigerians because at the end of the day if there is no light Nigerians will feel it more than the politicians.

Oduntan urged Nigerians to bear with them and also support their effort to grow the industry, emphasizing that the way out for this country is for us to have an appropriate tariff otherwise known as cost reflective tariff so that they can enough money to pay to the gas supplier, generate more and distribute more.

According to him, they need to carry out this reform and embark on this long journey and they are not pretending that it is going to be well tomorrow morning, urging Nigerians to bear with them.   

Similarly, the NLC has urged the Senate to dialogue with only genuine unions on issues bordering on workers and activities in the nation’s power sector.

The call follows allegations that some individuals were already parading themselves as representatives of workers in the power sector at the National Assembly.

The National President, Nigerian Union of Petroleum and Natural Gas Workers (NUPENG), Comrade Igwe Achese, in a statement at the weekend, warned the Senate and the National Assembly to stop romance with these individuals on issues that clearly have to do with the power sector without involving the leadership of the Unions within the sector.

Achese, who said the National Union of Electricity Employees (NUEE) and the Senior Staff Association of Electricity Companies (SSAEC) remained the two unions within the power sector, said that discussion on issues bordering on the sector that does not involve these unions would be an exercise in futility.

He said: “Perhaps, the Senate may have been misled into this error by the deceitful grandstanding and posturing of these persons and group masquerading as interest parties in the power sector. We know that the Senate may have meant well and is desirous of resolving all public interest issues arising out of all sectors of the nation’s economy of which the power sector is one of them”.



Sunday, 21 February 2016

Oil Depression: How marginal field operators can survive- Stakeholders


By Oluwagbenga Bankole

In the midst of the current global oil depression, marginal field operators in the country have been charged to embrace more collaboration, prudence and operational efficiency.  

Speaking exclusively with TOTALNEWS247, the Managing Director of Energia Limited, a joint venture operator of the Ebendo and Obodeti marginal field, Mr. Felix Amieye-Ofori said that the way forward for marginal field operators in this present situation is for them to renegotiate all existing contracts with service providers and also discuss with banks for better payment terms on existing loans.” 

 Amieye-Ofori also said that marginal field operators need to pay closer attention to HSE and Community Relations as both or either of them can trigger unplanned expenditures.

He added that as marginal fields, government must also begin to look at some incentives for the operators if they are to stay afloat. 

Speaking on the effect oil depression on marginal filed operators, Amieye-Ofori said; “dealing with sub $30/bbl crude price is quiet challenging because their revenue has collapsed from $110/bbl to $28/bbl.”  
He also said that service cost hasn't changed that much, neither has ones bank loan changed, adding that the only way for them is to cut back on operation and they only carry out maintenance activities just to keep afloat.  

He however said that this is the time to have more volume to compensate for falling crude oil prices, saying that though they have stopped new drilling, but they are embarking on work over operations to bring in more crude.

Also speaking with our correspondent, the Managing Director of Platform Petroleum, Mr. Owieadolor Osariemen said that Government must begin to look at the fiscal terms with which most of the marginal field operators are operating, adding that the fiscal terms are no longer realistic.

 “The present situation requires collaboration from everybody. The government, the Banks, service providers etc. It requires all industry stakeholders’ collaboration,” he said.
              

Nigerians bought fuel at N109.59 in January 2015 – NBS


By Oluwagbenga Bankole

Despite the Federal Government directive that a litre of Premium Motor Spirit (PMS) otherwise known as petrol should be sold at N86 per litre by the Nigerian National Petroleum Corporation (NNPC) Retail stations, while other oil marketers would sell at N86.50 per litre, Nigerians bought the petroleum product at the average price of N109.59 per litre in January 2016.

In a report released by the National Bureau of Statistics (NBS), although the price dropped by N10.02 compare to December 2015 which was N119.61, it is N23.59 increase compare to the N86 regulated price by federal government.

The report indicated that averagely no Nigerians bought the product at the regulated price in the month under review.

TOTALNEWS247 analysis showed that Ebonyi was the state with the highest petrol price at N132.14 per litre, while Oyo state was the lowest at N91.47.

Residents of Kano, Lagos and Abuja bought the product at an average of N 99.08, N 91.06 and N 99.60 respectively during the period.

The Department of Petroleum Resources (DPR) who is saddled with responsibilities of ensuring marketers complied with the new price regime had on several occasions vowed to ensure compliance.

Tuesday, 9 February 2016

Group gives NAPIMS clean bill of health over approval of $260m contracts for exxon mobil’s Usan field



THE Niger Delta Indigenous Movement for Radical Change (NDIMRC) has given the National Petroleum Investment Management Services (NAPIMS) a clean bill of health over alleged illegal approval of $260M contacts for ExxonMobil’s Usan Field.

In a press statement signed by its President, Nelly Emma; Secretary, John Sailor and Public Relations Officer, Stanley Mukoro, the group claimed that the said contract for the ExxonMobil’s Usan Field valued at about $260M followed due process, saying that some elements were just out to tarnish the good image of NAPIMS.

According to the group; “Those behind the story are not telling the whole world the truth. This contract was managed by Total Upstream Nigeria Limited (TUPNI) for two years before it was taken over by ExxonMobil and it is not true that NAPIMS allegedly approved the $260M contracts illegally.”

The group added that; “To the best of our knowledge due process was followed by NAPIMS in the award of the contracts.”

“Without NAPIMS, it would have been very difficult for Nigerian local contractors to be awarded contracts. The allegation that NAPIMS approved the $260M contracts illegally for the ExxonMobil’s Usan Field is unacceptable to us and the entire people of the oil-rich Niger Delta region,” the group wrote.

According to the group also, “There are no illegalities in the contract and it is not true that somebody in NAPIMS just sat on his table and nominated four companies to execute the contract without any tendering process and without approval by the NNPC’s Board and Group Executive Committee (GEC). Due process was followed and somebody should not give NAPIMS a bad name and mislead the public.”

“The fraudsters behind the story aimed at rubbishing the good reputation of NAPIMS should be investigated by the NNPC and dealt with, otherwise this will weaken the morale of NNPC that is doing a great job for Nigerian local contractors and also fighting for a better deal for our people by promoting the Nigerian Local Content,” the group stated.

The group added “It is on this note that we want to give NAPIMS a clean bill of health over the approved $260M contracts for the Exxon Mobil’s Usan Field. NAPIMS should be given a pat on the back for the promotion of the Nigerian Local Content and not condemnation, this is not acceptable.”

The contracts involve the provision of DP2-DP3 Construction Platform Vessel; Provision of DP2 4800 DWT Platform Support Vessel (PSV); and Provision of Fast Supply Intervention Vessel (FSIV) for Usan deepwater project.

ESSO took over the operatorship of Usan Field from Total Upstream Nigeria Limited (TUPNI) on February 1, 2014 and inherited all contracts running on the Usan Field