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Nigerian Oil and Gas Mining Report

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Nigeria’s oil reserves have only 43 more years to last according to the General Manager, Nigerian Agip Oil Exploration, Mr. Richard Ogunde. He said this during a lecture at the Tai Solarin University of Education, Ijagun, Ijebu Ode, according to reports by the News Agency of Nigeria.

Quoting from the latest World Oil data, Ogunde said Nigeria’s reserve remained 36.2 billion barrels.

He said in the lecture, titled “Petroleum Exploration, The Economy and Science Education,” that Nigeria had a yearly oil production capacity of 2.3bn barrels and advised government to start looking for other oil reserves. Ogunde urged the Federal Government to seek other means of sustenance after oil might have disappeared, “especially now that we have abandoned agriculture.”

Mr Ogunde, a geophysicist, accused successive governments of conniving with the Nigerian National Petroleum Corporation (NNPC) to misdirect, mismanage and mis-apply the country’s oil revenue without commensurate infrastructure growth and criticized the NNPC for engaging in the direct sale of petroleum products by setting up retail outlets in different parts of the country.

Ogunde said Nigeria had remained “poor despite our being rich in oil dollars simply because some people are just habitual bad managers of the nation’s resources,” and regretted that the country still suffered from poor energy supply after the exploration of oil for over five decades.

“Unfortunately, if there is no electricity, you cannot develop infrastructure. When a nation fails to develop her infrastructure, there is no way her economy can grow.”, he concluded. He also described graduates of oil-related courses from the Nigerian universities as “half-baked and unemployable.”

The NAN report quotes him as saying that many of the job-seeking graduates of Geology and Geophysics with high-class degrees did not even understand simple practical terms in oil exploration and processing. “The situation was so bad that when I interviewed well over 200 of these so-called brilliant geologists and geophysicists, I found less than 10 of them worthy of consideration.”, he said.

Ogunde expressed regrets that his findings had also revealed that more than 99 per cent of the graduates were not ready to meet the difficult challenges existing in the oil industry, warning that “the sector does not have room for layabouts who professed to be super-graduates.”

FG Drops Niger Delta Summit

The controversial Niger Delta Summit which the federal government much wanted to hold under the chairmanship of Prof Ibrahim Gambari was eventually shelved. It will be replaced by a jaw-jaw with Niger Delta stakeholders because of what Vice-President Goodluck Jonathan called “issues…that could not be resolved overnight.”

A presidential committee will now be set up to aggregate and articulate the demands of the region as an alternative resolution mechanism. The committee will be constituted and its comprehensive findings submitted to President Umaru Musa Yar’Adua.

Vice President, Dr. Goodluck Jonathan, and Niger Delta stakeholders met and agreed on this shelving.

Speaking after the meeting, the Vice President noted that discussion was still ongoing and that the word ‘summit’ had been dropped because of the perception of the people about the proposed summit. He said his meeting with Niger Delta elders was able to reach a consensus on the way forward for the region.

According to him, “..even the Federal Government, what we want is a discussion. Let us listen to the issues in the Niger Delta. Different people have different thinking about the Niger Delta. Some people think it is purely a security matter, some think it is purely an infrastructural matter, some think it is a political matter. Some think it is education; if you educate everybody and give skills to everybody. So, it is a complex thing. The committee will raise the fundamental issues, what we believe are the challenges and present it to the Federal Government and make recommendations on the way forward. So when the document is presented to the President, we will look at it and then move from there.”

He said further that “the whole thing is growing like a cancer and it is going to consume everybody if nothing is done. That is why we are holding these various meetings. We must get to a point and move ahead. We cannot solve it overnight. That is what everybody must learn. If it was possible to solve it overnight, probably it would have been solved before some of us entered primary school. We have seen some mileage in terms of consensus on the way forward. That is the most important thing. We have agreed on how to move ahead with the Federal Government.”

Western Goldfields Confirms $1.2bn Investment Drive

Western Goldfields Limited has said it has discovered 62,400,000 metric tonnes of proven reserves of coal deposits that are worth $1.2 billion (about N165 billion) on its Exploration Licence, EL829 situated at Ezimo, Obollor-Afor, in Enugu State.

Mr. Philip Pereira, chairman of the company revealed that Western Goldfields is partnering with United Bank for Africa and China Huadian Corporation in the electricity project, which would see coal converted to power to generate 250 megawatt of electricity in six states of the federation.

Revealing this in Abuja, Pereira said that the pilot scheme was a testing ground for machinery and equipment, as well as personnel that will be involved in the large-scale explorations which will soon commence simultaneously on 12 locations in Anambra, Benue, Delta, Enugu, Imo and Kogi states.

He said a total of 1,500 megawatt of electricity for the next 25 years into the national grid will be generated using coal and lignite deposits on these licences within 24 months if proven reserves are confirmed.

“In September, we shall be able to present accurate timelines to President Umaru Yar’Adua and the people of Nigeria for the solutions we plan for the country’s power problems. Once our coal reserves are proven, it will take about 24 months for one power station of 250 megawatt to become operational in each of the six states, generating a total 1,500 megawatt.” Pereira hinted.

He said the company will apply for a licence from the Nigerian Electricity Regulatory Commission to build independent power plants after it had proven the reserves of coal needed to build the planned power stations.

The Head of Corporate Affairs, UBA, Mr. Rotimi Balogun, while expressing UBA’s willingness to partner in the project observed that the coal-to-power project embarked upon by the company is of both business interest to the UBA as well a patriotic responsibility in view of what improved electricity will do to the socio-economic development of the country.

Oil Firms to Pay NDDC N47bn 

The Niger Delta Development Commission (NDDC) is to receive $405.774 million from oil companies operating in the Niger Delta region this year according to figures released during the presentation of NDDC’s 2008 budget to the National Assembly in June 2008.

Of the amount, the NDCC will receive $229.980 million as the mandatory three per cent contribution, which is based on the total approved joint venture budget of $7.89 billion. The commission will also receive $179.794 million from the 15 companies that operate under production sharing contracts with the federal government through the Nigerian National Petroleum Corporation (NNPC).

Managing Director of NDDC, Mr. Timi Alaibe, while presenting a budget of N79.404 billion for 2008 to the House Committee on the NDDC, said the budget would be 13.66 per cent higher than the N69.86 billion presented last year, if all the stakeholders meet their obligations.

The commission, he said, had proposed a capital expenditure of N71.74 billion against the sum of N61.38 billion for the preceding year and N51 billion for 2006.

FG Sacks Chukwueke

President Umaru Musa Yar’Adua directed the Director of Petroleum Resources (DPR), Mr. Tony Chukwueke, to proceed on compulsory leave to avoid interference with the ongoing investigation into the award of oil blocks by the regulatory body. The Federal Government also constituted an investigation committee to review the 2005 bid round, with a view to ascertaining whether due process was followed or not. Following Chukwueke’s suspension, Mr. Sabonberi Aliyu, Head of Administration, was appointed as the acting Director. The Federal Government had in June last year set up an investigation panel to the review the 2007 bid round, following the wide-spread criticism that trailed the exercise which was conducted in the twilight of former President Olusegun Obasanjo’s regime. Some industry operators and stakeholders had alleged that the DPR did not follow due process in the manner it conducted the bid round

Shell Engages 4000 Locals to Protect Pipeline

Shell Petroleum Devel-opment Company has concluded arrangements to recruit 4000 youths from 600 communities where oil pipelines criss-cross as anti-vandalisation watchmen. The plan is called “Community and Shell Together” or CAST in short form.

Under the Cast scheme, the 4,000 youths blow the whistle on criminals threatening oil pipelines. This is hoped to check the rampant sabotage of oil and gas pipelines in their neighbourhoods, according to SPDC’s Manager for Pipelines Operations, Mr. Godwin Idoko. He said the arrangement would cover all the communities where the 7,500-kilometre pipelines pass.

According to him, the youths would not operate like militias but would only watch and report suspected attempts at the facilities, including pipelines serving refineries and supplying gas to power plants being built across the country.

SPDC spokesman, Mr. Precious Okolobo, said the reasoning behind the scheme was that each community protecting the pipelines in their areas would reduce, if not stop, the spate of vandalisation across the Niger Delta, stressing that the main aim was to elicit the support of communities in protecting the facilities not by bearing guns but as an early warning system for security agencies.

Niger Delta Problem Caused By Faulty CSR

Governor Timipre Silva of Bayelsa State has blamed the Niger Delta impasse on the “faulty and ineffective corporate social responsibility programmes” of the multinational oil companies operating there.

Speaking during the Nigerian session of the 19th World Petroleum Congress (WPC) in Madrid, Spain in July, Silva claimed that hostage-taking, arson and attacks on oil facilities were on the decline in his state.

He said over one million barrels of oil remained shut-in in Bayelsa and called on the international community to wade in and help solve the problem so that the oil can be released to the world market and influence a downward trend in oil prices.

Others who spoke at the Nigerian session include Senator Sanusi Daggash, who represented the Minister of State for Energy, Odein Ajumogobia, the Minister of National Planning, Dr. Rilwanu Lukman, Honourary Adviser to the President on Energy Strategy, and Mrs. Cecilia Ibru, Managing Director of Oceanic International Bank Plc.

The oil companies’ policies according to the Governor resulted in the collapse of the educational sector leading to high unemployment amongst the local people.

“While many people in the Niger Delta argue that justice means a fairer share of oil revenue for the oil producing states, geography simply demands more funds for the Niger Delta”, he said.

Silva noted that infrastructure development cost in the region was 1000 per cent higher than in other parts of Nigeria.

Bayelsa state took a stand at the WPC, according to the Governor, to reach out to prospective foreign investors. It was not clear the success of that aspect of the mission however.

He said that as a way of taking advantage of the huge hydrocarbon resource base of the state, state-owned oil company, Bayelsa Oil Company, acquired two assets, including an Oil Mining Lease OML 46 (marginal field) which has a reserve portfolio of 26 million barrels and Oil Prospecting Lease (OPL 240) with a proven reserve of 243 million barrels. He said plans had reached an advanced stage for re-entry of Atala field (OML 46) before the end of 2008, adding that the state company was ready to partner interested investors.

Shell Sacks 1,300 workers to end re-organisation.

The management of Dutch oil firm, Shell Petroleum Development Company, has sacked 1,300 workers to bring to an end the disputed re-organisation programe of the company in Nigeria. The new organisational structure takes effect from August 1, 2008.

Media reports say that the management dropped the earlier plan to lay off 3,500 workers due to massive protests by the leaders and governments of Niger Delta states against the restructuring exercise. Consequently, some indigenous workers previously listed for disengagement were eventually spared due to the protests by their kinsmen.

Shell, which had previously crossed the one million bpd mark, now reports a production of 330,000 barrels per day.

Shell’s management has announced that 1,300 oil workers were sent on early retirement during interactive sessions held with staff of the company in Lagos, Warri and Port Harcourt in early July.

In another development, SPDC has said that about N59.2 billion is being expected from the European Union for the development of the Niger Delta region. It made this announcement in Warri via Mr Ubaka Emelumadu, Social Performance and Community Affairs Director at SPDC. The occasion was the signing of a sub-contract agreement between Dorman Long Engineering Limited and Decsalfa Limited.

Emelumadu cautioned that the EU wanted to be convinced that the funds would be managed by a credible agency before releasing it. He therefore urged communities in the region to form registered foundations to be eligible to access the funds.

The Shell top staff explained that the contract signing ceremony was aimed at bringing together the Shell contractor and the firm from Amatu 1 Community to restore the mutual trust and confidence that existed between the parties, explaining that Shell had created “Community Content Team,” as an aspect of the Nigerian Content Initiative, aimed at building contracting capacity for big projects in the region.

In another development, Shell has said that contrary to insinuations and press reports, it had no plans to leave Nigeria for Iraq. Rather, the company revealed that it was commissioning new projects in Nigeria as at date.

Chairman of Shell Companies in Nigeria, Basil Omiyi, revealed that the company paid $25 billion as taxes and royalties to Nigerian federal government since 2005. He claimed that Shell was now getting into the power sector with plans to start generating about 640 megawatts of electricity from the Afam plant from September.

Omiyi said that Royal Dutch Shell Chief Executive Officer (CEO) Jeroen van der Veer was misrepresented by some Nigerian media as saying that the company wanted to leave Nigeria for Iraq.

He said: “In spite of the difficulties of the operating environment, we are continuously making new investments and commitments. There is significant new exploration going on and new discoveries emerging like Kolo Creek and Agatha 1x. There is the Forcados Yokri Integrated Project, Oben project, to boost domestic gas supply and our deepwater offshore flagship, the Bonga field, with a production capacity of 225,000 barrels of oil and 150 million standard cubic feet of gas per day. At the end of the day, we are looking at investment totalling billions of dollars.” He said Shell now has about 4,900 employees, along with another estimated 30,000 employed indirectly through its contractors.

Senate Passes N89.2bn NDDC Budget

The Senate has approved a budget of N89.2 billion for the Niger-Delta Development Commission (NDDC), about N10 billion higher that the N79.4 billion proposed for the Commission by President Umaru Musa Yar’Adua.

A breakdown of the budget shows that N3.313 billion is for Personnel Expenditure, while N4.414 billion is for Recurrent Expenditure. Capital expenditure will gulp N1.119 billion, while N80.356 billion will go into Development Projects Expenditure, thus bringing total expenditure to N89,204,000,000.00.

Yar’Adua had proposed N71.471 billion for Project (Development) Expenditure, a sum higher than the N61.825 billion which was allocated to the sub-head in 2007, by the administration of former president Olusegun Obasanjo.

NDDC Begins Repairs On East-West Road

The Niger Delta Development Commission (NDDC) has begun repairs on the Bayelsa end of the East-West road following its deplorable condition.

NAN reports say that the road at Kaima area of Bayelsa, was almost cut off, making it almost impossible for motorists to move freely.

“We noticed that motorists and other road users had difficulty over the weeks because of the very bad sections of the road. We felt it was necessary to relief motorists the burden. You know that Julius Berger, the firm dualising the road pulled out because of insecurity,” said the Managing Director of NDDC, Mr Timi Alaibe while inspecting progress on the repairs.

Alaibe called on youths in the area to allow contractors doing various jobs in the area to execute them. “These are development projects that you are clamouring for, let us allow the contractors to work, scaring them away will not solve the problem,” he said.

Group Moves To Clean Up Oil Spills

A concerned group, Association of Marine Operators (AMO) in Delta State, has volunteered to undertake the clean-up of creeks and settlements polluted by oil spills from both legal and illegal bunkering activities.

This is sequel to comments made by the Commander of the Joint Task Force (JTF) in the Niger Delta, a k a ‘Operation Restore Hope’, Brigadier General Wayep Rimtip, that besides the economic sabotage of illegal bunkering, the lives of the people in the affected areas was being threatened by the pollution of the environment, particularly in the remote areas used as hideout.

The Association of Marine Operators (AMO) in Delta State addressed newsmen in Warri in July and said they were moved by the plight of innocent residents and have decided to commit both human and financial resources to bringing a new lease of life to the people in the affected areas.

Spokesman of the group, Chief Perebowei Bramor, stated that they were moved to embark on the clean-up exercise after a series of visits to the impacted communities where they discovered that the health hazard posed by oil spillage needed to be addressed in the interest of the innocent rural dwellers who are ignorant of the consequences of such pollution in their areas.

He noted that the clean-up, which is slated to commence very soon, will focus more on areas that were mostly identified as loading points/hideouts of illegal bunkering activities, especially in the Ijaw areas, where criminal acts had been rampant in the last five years when the action of the perpetrators was at its peak.

NDDC Takes N’Delta Masterplan to UN

The Niger Delta Development Commission (NDDC) has presented the Niger Delta Regional Development Master Plan to the United Nations in New York . The presentation of the masterplan is part of the Federal Government’s move to show the world that it is committed to the development of the region which is very strategic to global economy.

The master plan was presented to the Nigerian Permanent Mission to the United Nations in New York by the Acting Executive Director, Finance and Administration, Chief Power Aginighan. The NDDC was in New York on the invitation of the International Civil Service Commission of the United Nations.

A senior official of Nigeria Permanent Mission to United Nations, Mr. Olufemi Obisakin, received the team on behalf of Nigerian Permanent Representative in UN, Prof. Joy Ogwu. In a news release, NDDC said it had initiated over 3,000 infrastructural projects in the nine states covered by its mandate and some of the projects have been completed and handed over to the benefiting communities in the nine states of Abia, Akwa- Ibom, Bayelsa, Cross-River, Delta, Edo , Imo, Ondo and Rivers. The projects included roads and bridges as well as shore protection, reclamation, land jetties, water, electricity, school buildings and health centres.