Preparing For A Future Without Oil By Kingsley Omoyeni

As the prices of crude oil continue to drop, coupled with glut of oil in the global oil market, the attention of most countries who had in the past depended on oil as their major income are gradually drifting towards agriculture as the only panacea to their sudden economic downturn.

Nigeria, being a major oil producing and exporting nation in the world had also hitherto depended on oil as the largest chunk of its foreign exchange thereby neglecting the agric sector for many years.

During those years of neglect, a lot of rural roads that lead to farmlands which were supposed to be the undisturbing major source of income for the country had been neglected, hence leaving a lot of those roads in a very bad state and leaving a lot of the rural areas where there are large farmlands inaccessible.

The nation is going through recession and it has become very obvious that the only way out of such economic quagmire is for all and sundry to go back to our root and embrace farming in a subsistence, massive and commercial proportion.

If anyone wants to go into farming in any of these proportion, then the only way to go is to settle in the rural areas where one can find large expanse of land to farm in large quantities.

For a nation or state to get into farming in large proportion, rural farmers need to be encouraged in a lot of ways and one of such ways is by making their farms motorable and accessible so as to easily transport their farm produce to various markets around them.

Aregbesola and the Osun Rural Access and Mobility Project, Osun RAMP can then be described as a match from heaven downturn going by the huge impact the activities of Osun RAMP has had on rural communities through the construction and rehabilitation of roads.

The state of Osun being an agrarian state is made up of many rural areas with vast farmland which needs accessible roads to allow the farmers in such communities to transport their farm produce to nearby markets for sale.

It was therefore a huge respite to the government and the people of Osun through the efforts of Ogbeni Rauf Aregbesola when the state was chosen as one of the lucky states to benefit from the RAMP intervention through the World Bank and the French Development Agency in the construction and rehabilitation of rural roads across the state so as to assist farmers in the transportation of their goods to the cities and in return boost the economy of the state through farming.

The project in Osun is being implemented and supervised by the State Project Implementation Unit (SPIU), a body made up of heads of state government agencies and parastatals; chief among them is the Ministry of works and the Ministry of Agriculture and Food Security, and through its activities, the project has had a wider impact on the affected communities by providing accessibility which has brought livelihoods to the poor and at the same time boosted the economy of the state.

The Aregbesola administration and Osun RAMP met a lot of the rural roads in a state of disrepair, but the story of many of these roads have changed significantly today, as lot of the roads are now wearing new looks and farmers and traders alike are now experiencing boom in their marketing activities.

Commercial activities in many of the said communities have now doubled because their markets are now flooded with varieties of farm produce on every market day.

A lot of communities which had formerly been cut off by rivers from major markets now have access to the markets because Osun RAMP have succeeded in constructing bridges that will stand the test of time for them.

Some of the communities in Osun where river crossings or bridges were constructed include: Elewonta in Iwo, Olomu stream in Irewole local government, Iree Polytechnic road in Boripe, Olukesi farm – Oju eri in Boluwaduro local government, Ipon Stream in Odo-Otin, Odo Owere in Ede North local government, Gbalefe road, Modakeke in Ife east, as well as Oke-Aho stream located at Sekona in Ife North local government.

Others are: Faweri river in Ife South local government, Ogbaagba Ogudu, Odo Oroki in Obokun local government, Opa bridge in Odunrin via Ipetumodu, Oyile River in Ilasetown, Oyi Adunni in Oke-Ila among others.

The impact of the RAMP intervention on rural roads in Osun cannot be overemphasised as most of the rural dwellers are now happier going by the fact that they are able to do what they know how to do best with ease.

Gone are the days when they have to trek long distances of bad roads before they get to their farms, as transporting their produce to the market is now much easier and the various rural markets are now much more busy than it used to be simply because a lot of farmers can now bring their goods to the market.

Traders on some rural market days across the state have testified to the fact that they now make brisk business as a result of the accessibility to their various markets, saying that they now get a lot of patronage from people living in urban centres.

Food and beverage vendors in the communities now make more money as more people now visit the rural areas as a result of good roads; urban dwellers are now able to take their cars to rural communities without the fear that bad roads may cause a breakdown of their cars.

Lumbering activities in most of the rural communities have also increased tremendously because their Lorries no longer get stucked in mud during rainy season.

New private schools as well as petrol filling stations are now springing up on a daily basis in most of the rural communities; this is because the roads are now motorable and the volume of cars plying the roads are now more than it used to be. Good roads as they say, truly aid rapid development of an area.

Some of the roads rehabilitated and constructed by the Osun RAMP include: 13.7km Agbowu-Aba onile roads, 13.73km Ogbaagba-Eleru-Bode Osi roads, 3.1km Asa-Dagbolu-Ajagunlase road, the 12.73km Ikonifin-Sade-Ajagunlase road, 11.1km Agoro-Ikonifin road, the 4.38km Pataara-Ileko Oba farm settlement road and the 4.38km Akinyele-Aba ayo-Isero road.

Others are: 3.91km Eeleke-Kanko road, 10.5km Jagun Osi/Onikoko-Osi-Sooko Road, 9.3km Ara Joshua-Yinmi Oja road, 10.9km Gbengbeleku junction-Owode Amu road, 39.164km Shasha road, the 3km Ilesa-Ilo Olomo boundary, 8.8km Ilesa-Odogbo-Igbowiwi road, 6.58km Odogbo-Iwara road.

Also touched by the intervention are roads such as the 1km Isale general township road in Ilesa, the 10.5km Isale General Hospital-Muroko-Okebode road, 10.7km Ira-Ikeji ile-Oligeri-Iragbiji road, Ira-Ibete road, Ikeji Arakeji-Aikulola road, the 10.8km Idiroko/Akinyele farm settlement, the 18.7km Mokore farm settlement road, 30km Orile Owu-Ago Owu-Ogedengbe road, 20km Alaguntan forest reserve road among others.

And just recently, precisely in November, the government of Osun took its drive to opening Osun to the world through road infrastructures which flagged off with the construction of another 1 kilometre access road to Olumirin Water Falls being sponsored by the Government of the State of Osun with the implementation to be carried out by Osun Rural Access and Mobility Project.

The solution to the current economic downturn in the nation is the opening of rural roads that lead to farm settlements and Osun RAMP is doing just that in the state of Osun.

PENGASSAN Threatens Nationwide Strike

One of Nigeria’s two main oil unions has threatened to launch a nationwide strike from December 18 over what it described as a “mass sacking of workers that joined the union.”

If the government fails to force the management of domestic oil and gas companies and marginal field operators to recall laid-off union members, its workers will go on strike, the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) said.

PENGASSAN did not say how many workers were laid off and union officials did not respond to calls and messages.

Oil output from Nigeria, Africa’s largest crude exporter, has been volatile over the past two years due to militant attacks, pipeline theft and sabotage and industrial action.

Strikes by PENGASSAN workers in December last year at ExxonMobil facilities affected production and dented exports from the company’s fields, according to oil traders and Reuters oil export data.

The Minister of State for Petroleum Resources, Emmanuel Ibe Kachikwu said on Thursday that the government would engage with PENGASSAN to resolve the dispute “as soon as possible.”

Hungary Interested In Nigeria’s Oil And Gas Sector

The Hungarian Government has indicated interest to purchase crude oil and Liquefied Natural Gas (LNG) from Nigeria.

This was disclosed by the Hungarian Ambassador to Nigeria, Professor Gabor Ternak, who during a courtesy call on the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru, in Abuja.

Ternak said the decision to import crude oil and LNG from Nigeria was informed by the need to bridge the current supply gap being experienced in Hungary.

“Hungary depends on oil importation to serve its energy needs as the country is non-oil producing. We want to diversify our sources of crude oil and LNG import and we are considering purchasing these products from Nigeria,” Ambassador Ternak stated.

The NNPC’s Group General Manager, Group Public Affairs Division, Mr. Ndu Ughamadu made this known in a statement on Wednesday.

He said the Nigerian crude oil would be of great help to Hungarian Refineries involved in large scale commercial refining.

The Hungarian envoy stated that Nigeria could also leverage on the bi-lateral relationship with his country by engaging the services of Hungarian firms that specialize in repairs, maintenance and building of refineries as well as medical services.

He said that Hungarian universities with many years of oil and gas engineering expertise, could assist Nigeria in the areas of capacity building of oil workers.

In his remarks, the NNPC GMD, Dr. Maikanti Baru, stated that the Corporation had commenced tendering process for the selection of the 2018 crude oil off-takers, adding that Hungarian companies could utilize the opportunity by participating in the exercise to maximize value from direct purchase, rather than going through a third party.

“If you don’t participate in the tendering process, you would have to buy the products from one of the traders. However, if you participate with companies and refineries that meet our requirements, they could be shortlisted as off-takers” the GMD averred.

He explained that Hungary could purchase LNG through “spot cargo,” an arrangement in which excess production is given to registered off-takers with the Nigerian Liquified Natuaral Gas Limited (LNNG).

“Normally, gas business is a long-term business and NLNG is not different, we already have existing 20-year contract that will expire by 2022. Nevertheless, we have what is called “spot cargoes”, when there is excess production, and the current contractors have gotten there share as enshrined in the contract, the excess production will be given to registered off-takers in the system,” Dr. Baru averred.

 

NNPC Finalises $6bn Oil-for-Product Swaps

As part of measures to sustain the supply of petroleum products across the country, the Nigerian National Petroleum Corporation (NNPC) is in the final stage of signing $6 billion worth of deals with local and international traders to exchange about 330,000 barrels per day (bpd) of crude oil for imported petrol and diesel.

The deals, which were previously referred to as offshore crude oil processing agreements (OPAs) and crude-for-products exchange arrangements, are now known as Direct Sale-Direct Purchase Agreements (DSDP).

The Minister of State for Petroleum, Dr. Ibe Kachikwu, had said the DSDP was adopted to replace the oil swaps and the offshore processing contracts so as to entrench transparency into the crude oil-for-product transactions and save the country $1 billion.

The signing of the deals earlier scheduled to take off by April, it was learnt, was delayed for three months to allow the NNPC and the oil traders negotiate the fuel specifications, among other issues.

This year’s beneficiaries also exceeded those of last year by three consortiums, indicating the country’s increased dependence on the NNPC for fuel importation.

Kachikwu had stated in Lagos on Wednesday that with the rise of crude oil price above $52 per barrel, the country finds itself reverting to the position it found itself in, in the first and second quarters of 2016 when NNPC was the sole importer of petrol.

Reuters reported that at least four of the 10 groups of companies have signed product supply contracts with NNPC, which will take effect from July 1, while other companies are expected to sign the deals Friday.

It was gathered that unlike the 2016 contracts, which included only companies with refineries so as to cut out middlemen, this year’s beneficiaries include international trading houses, and not just refineries.
Some of the companies that benefitted in 2016 also made this year’s list, including Varo Energy, Societe Ivorienne de Raffinage (SIR), Total and Cepsa.

However, Italy’s ENI and India’s Essar, which were in the 2016 list did not feature this year, while Socar and Mercuria, which were not in last year’s list, won this year’s contracts.

NNPC had previously said this year’s contracts would exchange up to 800,000 bpd of crude oil, but the figure, representing 40 per cent of Nigeria’s peak production, was seen to be unrealistic in view of production outages.
However, this year’s contracts are worth 330,000 barrels per day, and each of the 10 oil traders/refineries partnered local Nigerian companies to win 33,000 barrels per day allocations.

According to the list, Trafigura partnered AA Rano to clinch 33,000 barrels per day; Petrocam paired with Rainoil and Falcon Crest to win 33,000 bpd; Mocoh partnered Heyden Petroleum to get 33,000 bpd; Cepsa paired with Oando to win 33,000 bpd; while Sahara is partnering Societe Ivorienne de Raffinage (SIR) for 33,000 bpd.

Five other groups that also got 33,000 bpd each include: Mercuria and Matrix/Rahamanniya; Socar and Hyde; Litaso and MRS; Vitol and Varo; and Total, which is partnering its Nigerian subsidiary.

It was also gathered that the 2016 contracts, which were initially planned to begin in April, were delayed as the 2016 deals were extended at least twice, in order to give NNPC more time for negotiations with the traders.
The fuel specifications in the final agreements were not immediately clear, but the July 1 take off date for the importation of higher grade, lower sulfur fuels have been shifted to September 1.

Sulphur levels were said to have been a major sticking point in the negotiations, as the Ministry of Environment and Standards Organisation of Nigeria (SON) have pushed for a reduction in the sulfur content of imported petrol and diesel with effect from July 1.

Tanker Drivers Deny Being Incited By Ifeanyi Ubah

After the Department of State Services (DSS) on Friday arrested Ubah for alleged economic sabotage, including stealing, diversion and illegal sale of petroleum products, belonging to the Nigerian National Petroleum Corporation (NNPC), allegations aroused that this was the reason for the tanker drivers strike.

However, The Petroleum Tanker Drivers (PTD) section of the Nigeria Union of Petroleum and Natural Gas workers (NUPENG) has denied the allegation that the detained Managing Director of Capital Oil and Gas Limited, Mr. Ifeanyi Ubah, incited it to embark on strike and cause economic sabotage.

The agency has also accused Ubah of undermining the country by inciting tanker drivers to stop the lifting of petroleum products with the ulterior motive of arm-twisting the NNPC to abandon the cause of recovering the stolen products.

But PTD’s Media Officer, Mohammed Abdulkadir, said in a statement last night that it was not true that Ubah or any other individual was inciting tanker drivers to cause any economic sabotage. 

“The allegation is baseless, unfounded and totally untrue.  Our responsibility as a trade union is solely to promote, project and protect the job security and welfare of workers most especially the petroleum tanker drivers in Nigeria. We have no further relationship with any capitalist/employer beyond the precinct of promoting, projecting and protecting the security of jobs and welfare of our members,” said Abdulkadir.

200 Operators Commence Enumeration For Modular Refineries

About 200  operators of crude oil distillation camps referred in local parlance in the creeks as ‘kpo Fire’ camps at the weekend turned up for enumeration of local refineries.

They commenced enumeration of artisanal refineries and crude distillation camps ahead of Federal Government’s proposed liberalization of modular refineries. Speaking at the event, Mr. Pat Obiene, a Social Activist who convened the sensitization exercise noted that it was a follow up to federal government’s new policy directive to formalize the artisanal refineries.

The Vice President Prof Yemi Osinbajo had on February 14 during the ongoing tour of oil communities in the Niger Delta region announce the policy of deploying modular refineries to drive economic development of the region. Mr Pat said that, three groups, Masses Congress, Bayelsa Business Roundtable and Modular Refineries Business Association were collaborating on the data collection exercise to determine the total capacity of the local refineries.

“This is a follow up to pronouncement on the federal government’s desire to use modular refineries open up the Niger Delta and fast track development, so we thought it wise to kick start this initiative”.

“It is based on the idea that the society is built by the cumulative efforts of ordinary people, we want to provide reliable and accurate database that the government can rely for decision and planning purposes”.

“We have designed the forms to classify the artisans into Crude Point Owner, Loader, Cooker/ Refiner and Dumpsite Owner to capture data on number of workers, daily crude volume and daily turnover. “The data collected would be processed and analysed andused as a basis to determine to size and capacity of the proposed modular refineries suitable for each location,” Obiene said. Mr Olaitari Ikemike,President of Bayelsa Business Roundtable, an affiliate of African Business Roundtable explained that the initiative was aimed at networking and cross fertilization of ideas amongst stakeholders”.

“This is an effort to bring private sector people together and work for the realization of the modular refinery concept, we need to be a catalyst to bring local refinery operators together and ensure that our peculiarities are factored in. “The pronouncement of the federal government is laudable and we have to support it and make it actualized,” Ikemike said.

 

Also Mrs Faith Wilkingson, a local manufacturer of lubricants urged women involved in local refineries to embrace the emerging opportunity to add value to the crude oil endowments of the region. She noted that women were the backbone successful enterprises as they were naturally endowed entrepreneurs. Mr Roland Kiente, who operates a local refinery in Peremabiri Community in Southern Ijaw Local Government in Bayelsa appealed for further sensitization at the creeks to enable all operators to register.

“The policy to make artisanal refining legal is a dream come true for us and to guard against this laudable gesture being hijacked by political jobbers, there is need for further awareness in the creeks. “Igbomatoru, Peremabiri remain the epicenter of local refineries and some operators are apprehensive thinking that they will be arrested if they come out,”Kiente said. Also speaking, Mr Clever Oyabara, Chairman, Modular Refineries Business Association in Bayelsa noted that modular refineries would lay to rest the youth restiveness in the region.

 

“The policy will be a permanent solution to youth restiveness because a 10,000 barrels per day capacity refinery can create more than 5,000 direct and indirect jobs,”Oyabare said.

Credit: Nigerian Pliot

Militancy Causes Dip in Gas Supply

 

The Nigerian Petroleum Development Company (NPDC) has said that the shortfall in gas supply for power generation is caused by militancy.

In a presentation to the House Committee on Local Content, NPDC Managing Director, Mr Yusuf Matashi, said ”the pulverization of the Forcados trunk line by militants in 2016 gravely impacted gas production by NPDC and its JV partners.”

Matashi’s explanation is contained in a statement released by Mr Ndu Ughamadu, Group General Manager, Group Public Affairs Division of the Nigerian National Petroleum Corporation (NNPC) on Sunday in Abuja.

NPDC, a subsidiary of NNPC, said the shortfall affected both NPDC and Joint Venture (JV) partners.

News Agency of NIgeria (NAN) reports that JV partnership is an arrangement that Nigeria has with international oil companies to ensure steady supply of petroleum products into the country.

“The attack, which primarily led to a loss of about 70 per cent of NPDC’s crude oil production capability, also had an effect on gas production.

“Unfortunately gas production in the region we operate is not non-associated gas but associated with the crude oil we produce so by the time we shut in the oil well, we also shut in most of the gas.

“That is why we now see the level of gas supply shortage for power generation,’’ Matashi said.

He said other operators might have other reasons for the shortfall in gas supply in their domain.

According to him the damage of the Forcados export terminal supply line is the biggest obstacle to the production of gas by the NPDC and its JV Partners.

Matashi, however, said the Company would increase its gas production by as much as 50 per cent whenever the Forcados line was back on stream.

Describing the impact of the attack as immeasurable, Matashi said within the last one year, the company had struggled to mitigate the effects on its production.

On the NPDC local content compliance level, Matashi noted that as an indigenous exploration and production company, the NPDC was in sync with the letters and spirit of the provisions of the Nigerian Content law in the oil and gas industry.

The Chairman of the House Committee on Local Content, Rep. Emmanuel Ekon, said members of the Committee would, in due course, embark on an oversight visit to NPDC facilities.

He said this would enable them have proper appraisal of the company’s compliance level with the extant law on local content.

The Minister of State for Petroleum, Dr Ibe Kachikwu, had set a zero militancy target for 2017.

 

Credit: Today News