4 EDITORIAL

INDUSTRY5 Why Oando divested from

Axxela

14 Senate’s Passage of PIGB puts Pressure on PRESIDENCY to Expedite Assent

…As Executive delay stalls allocation, renewal of oil blocks

13 Nigeria, Saudi Arabia to Present MoU on Oil and Gas Infrastructure Development in May

25 Nigeria should Scrap JV Arrangement —Prof. Ibe

36 Nigeria to Beat Global Target on Gas Flaring 10 years Earlier

42 April Short Takes

AVIATION40 The Unbeatable Azman Air

Flying Experience

COLUMN44 THE 4th REPUBLIC Movie Premiere and Review

MOTORING47 Our Vehicles are Reliable, Easy

to Maintain and Provide Value for Money — MD PAN

SPORTS51 All Hail The Woods’ Remarkable

Come Back

CONTENTSAPRIL 2019 VOL. 2 NO. 4

21

7 16

Dr. Rilwanu LukmanPosthumous (1938 – 2014)Former Secretary-General OPEC

Star of the Industry

In Whose Interest?In Whose In Whose

Fuel Subsidy Removal

27

Inside Multibillion Dollar Dangote Petrochemical Complex

NOGOF 2019: Project Cost to Determine Future Approvals — Kachikwu

1

The Nigerian government has been contemplating the withdrawal of fuel subsidy

for some time now. The subsidy, which runs into billions of dollars every year, is being viewed by many as a drain pipe that denies certain sectors of the economy the necessary funds for develop-mental projects.

The push for the removal of fuel subsidy gained traction re-cently when IMF advised Nigeria to stop subsidizing fuel and begin to channel the funds it uses for that non-market purpose into the development of public infrastruc-ture, healthcare, education and other intervention projects with bearing on peoples’ life.

In reaction to the IMF call, some trade unions in Nigeria such as NLC, NUPENG, and PENGASSAN issued press statements con-demning IMF, alleging that the international fi nancial institution has ulterior motives for the call. The big question now on every-one’s lips is ‘In whose interest is the subsidy removal?’

There are increasing calls by different oil and gas stakeholders and some sections of the media, ours inclusive, for the 8th Nation-al Assembly to expedite action on the passage of the Petroleum Industry Bill (PIB), before the end

info@thevaluechainng.com @thevaluechainng.com thevaluechainng.com

MB. UsmanNB. Feel free to send in your views and have your say @ 007mbu@gmail.com

for many of the investments that are marking the time for this legal framework that will secure their investment.

In this edition, we have gist for companies in the country about the huge local content business opportunities available at the site of the new Dangote refi nery, which is currently under con-struction. The refi nery, which is expected to be commissioned by the end of this year, has reached an appreciable level of construc-tion now.

We also have a special report from the recently concluded NO-GOF organized by the NCDMB, in case you missed the event. Have a wonderful time as you flip through.

Thank you and God bless.

of their legislative tenure. We are glad that our calls did not fall on deaf ears.

The Senate has reworked and passed the PIGB and transmit-ted to the Executive for fi nal as-sent. What is left now is for the executive under the leadership of President Muhammadu Buhari to assent to the bill, if possible, be-fore the end of his fi rst term in of-fi ce. This is in order to open doors

Publisher/Editor-in-Chief

Editor

Graphic Consultant

Circulation Manager

Online Editor

Business Dev. Executives

Contributors

Musa Bashir Usman

Yange Ikyaa

Theresa Ogbonna

Danlami Nasir Isah

Saidu Abubakar

Adeniyi Onifade (South)Abdulkarim Sani (North)

Fred OjiegbeGideon Osaka

Ironhand S. ChukwuemekaAisha SamboBenjamin Ike

1-2 Abu-Rayyan Street, New NDC Layout, Kaduna. Tel: 08077201571, Abuja: 07089626420, Lagos: 08036840121. email: 007mbu@gmail.com www.thevaluechainng.com

2

The recent divestment of Oando Plc from its affiliate company, Axxela Limited, to

Helios Investment Partners may have been effected to enable it concentrate on its upstream dollar-based business, Valuechain has learnt.

The sale of Oando’s 25 percent residual interest in Axxela signals the completion of a divestment initiative that began in 2016.  Valuechain gathered that by December 2016, Oando completed the $115.8 million or 75 per cent partial divestment of the then Oando Gas and Power to Helios, which is a leading private equity firm with a focus on investments in Africa.

At that time, Oando had explained that net proceeds from the divestment would be used to partially prepay its Medium Term Loan (MTL), which it took in June 2016 following the downturn in global oil prices.

The decrease in oil price had engendered a debt crisis with companies barely breaking even and struggling to survive. Some of the surviving companies had to evolve their business models, diversify their portfolios, as well as imbibe more financial prudence and discipline to ensure survival in a high or low price era. 

Oando’s divestment of its 25

per cent residual interest in Axxela to Helios was seen as a strategic initiative aimed at maintaining the trajectory of aggressive debt reduction, portfolio optimization and ensuring that the company’s business remained viable.

In 2016, the company started the implementation of its three-dimensional restructuring plan of growth through its upstream business; deleveraging through disposal of $350 million in assets value and a return to profitability.

Valuechain  learnt that through open dialogue with ten leading financial institutions in Nigeria, the company agreed to

a medium term restructuring loan facility of N94.6 billion, about $311 million, as part of its strategic initiatives. Also, in 2018, Oando successfully completed a $210 million recapitalization of its downstream business, with a consortium of Helios and Vitol Group, the world’s largest independent trader of energy commodities.

Speaking on the divestment, Oando PLC’s Group Chief Executive, Wale Tinubu said “the completion of this divestment signifies another win for the company. We pioneered the development of Nigeria’s foremost natural gas distribution network, which has subsequently grown to making us become the largest private sector gas distributor in Nigeria, creating a lasting impact on both the sector and the Nigerian economy.

“The divestment further reinforces Oando’s ability to create value that can be monetized and the company’s status as the indigenous partner of choice for international companies looking to invest in Nigeria. This transaction favourably positions us to significantly reduce our debt profile and remain focused on growth through our dollar denominated businesses.

“We will continue to maintain significant presence in the

Industry 04:19

Why Oando divested from Axxela

–By Gideon Osaka

Wale Tinubu, Group Chief Executive, Oando PLC

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Industry 04:19

midstream, as well as grow our gas aspirations via our upstream gas assets in our NAOC Joint Venture, wherein we have four gas projects within the NNPC’s Seven Critical Gas Development Projects (CGDPs) that are responsible for almost 50 percent of the 42 TCF of gas that will be delivered by the seven CGDPs by 2020.”

Also speaking, the Chief Executive Officer of Axxela Limited, Bolaji Osunsanya, said “as we position to become the preferred and fast-growing gas and power portfolio across sub-Saharan Africa, we pay homage to our origins, legacy, and storied history as an Oando portfolio company.

“We are immensely proud of our impressive track record of building substantial gas and power infrastructure across Nigeria, and implementing essential Corporate Social Responsibility (CSR) initiatives in our host communities. As we commence a new journey, our

audacious growth initiatives across Nigeria and the sub-region will leverage our industry expertise, experience, and longevity; while our affiliation as a full-fledged Helios company will improve our access to capital.

“The continued growth, robustness, and stability of our business enterprise, enables Axxela provide required efficient and environmentally-friendly energy solutions for industrial and commercial clients, leading to positive socio-economic impact in our markets of operation.”

Axxela is a designated natural gas shipper on the West African Gas Pipeline (WAGP). It is also the pioneering private sector-led developer of natural gas distribution in Nigeria, delivering at peak 80 million standard cubic feet per day to over 160 industrial and commercial customers via a vast network of gas infrastructure.

With over 280 kilometers in gas pipeline infrastructure built, Axxela provides unique energy solutions primarily through its subsidiaries, which are Gaslink Nigeria Limited, Gas Network Services Limited, and Central Horizon Gas Company Limited.

Speaking on the divestment, Oando PLC’s Group Chief Executive, Wale Tinubu said “the completion of this divestment signifies another win for the company. We pioneered the development of Nigeria’s foremost natu-ral gas distribution network, which has subsequently grown to making us become the largest private sector gas distributor in Nigeria, creating a lasting impact on both the sector and the Nigerian economy.

Also speaking, the Chief Executive Officer of Axx-ela Limited, Bolaji Osunsanya, said “as we position to become the preferred and fast-growing gas and power portfolio across sub-Saharan Africa, we pay homage to our origins, legacy, and storied history as an Oando portfolio company.

Bolaji Osunsanya, Chief Executive Officer, Axxela Limited

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Industry 04:19

The Dangote Oil Refinery Company is construct-ing an integrated refinery

and petrochemical complex in the Lekki Free Trade Zone near Lagos, Nigeria that is slated to cost $14 billion, or N2.8 trillion, of which Dangote is contribut-ing $7 billion in equity.

The multibillion dollar facili-ty,  which has its allocated land covering an area of approxi-mately 2,635 hectares, is six times the size of Victoria Island and has now become the largest single project ongoing on Nige-rian shores, actively employing many companies and people.

This refinery, which is esti-mated to cost $9 billion to com-plete, will produce Euro-V quality gasoline and diesel, as well as jet fuel and polypropylene.

Nigeria is estimated to hold approximately 37 billion barrels of proven oil reserves, which is the second biggest in Africa, but imports majority of its refined products due to lack of domes-tic refining capacity.

However, Dangote’s new refin-ery, when completed, will double

Nigeria’s refining capacity and help in meeting the increasing demand for fuels, while provid-ing cost savings, particularly forex.

It has been estimated that when this project comes on stream, it will enable Nigeria to save a minimum of $10 billion a year on imports. The plant also has an export value of $6 billion per annum, meaning that Dan-

gote’s efforts will increase the amount of foreign exchange in Nigeria’s foreign reserves by at least 40 percent of current value on a yearly basis.

Situated Southeast of the Lekki Free Trade Zone in the Ni-gerian commercial capital of La-gos,  it houses massive hi-tech projects, such as the largest single train petroleum refinery in the world, with the produc-

Inside Multibillion Dollar Dangote Petrochemical

ComplexUntold Story of the world’s largest refinery in the making, its business and

employment opportunities for people and companies in Nigeria.

–By Yange Ikyaa

Aliko Dangote, President Dangote Group

5

tion capacity of 650,000 bar-rels per day; two of the world’s largest fertilizer trains, with the production capacity of three mil-lion tonnes per annum; as well as the largest sub-sea pipeline infrastructure in any country in the world, with the length of 1,100 kilometres to handle three billion standard cubic feet of gas per day.

Apart from the three gigantic industrial complexes described above, there is also a 400 mega-watt power plant for the refinery alone, which has the capacity to meet the total electricity supply requirements of Ibadan Elec-tricity Distribution Company (IBEDC), which is about 860,316 MWh, used in serving the energy supply needs of the five states of Oyo, Ogun, Osun, Ekiti and

Kwara.“We are buying 300 cranes

to build up equipment installa-tion capacity, since the current capacity in Nigeria is extreme-ly poor,” said Yinka Akande, the Group General Manager (GGM) of Dangote Refinery. 

According to him, “we built the world’s largest granite quar-ry to supply coarse, aggregate, stone column material, stone base, stone dust and materi-al for break water,”  all in a sys-tematic effort to keep pace with work timelines and standards.

Valuechain findings about the current scope and progress of work within the Dangote Indus-tries Free Trade Zone show that the engineering works are 100 percent complete, while pro-curement is 97 percent done.

An official document from Dangote Group seen by  Val-uechain  further indicates that civil works, such as sea dredg-ing and dynamic compaction are 100 percent complete, while the boundary wall and stone col-umns are 95 percent complete.

The foundation works are also in progress and in great speed towards completion, with piling 90 percent complete, and the substructure and super struc-ture works 40 percent complete.

Progress report on the infra-structure within the Dangote in-dustrial facility show that roads, drains, and culverts are 50 per-cent complete, while the Marile: RORO/LOLO Jetty is totally completed.

In the area of structural erec-tion, there has been up to 16,982

6

metric tonnes of structural steel erected, just as the scope of work on the underground pip-ing network shows that 103,733 inches Dia UG has been fabri-cated, with 163,296 inch meter installed.

Crude Oil TanksThere is work in progress on

the fabrication of seven tank pads and six other tank pads have already been completed, and erection commenced in three tanks out of the 16 pro-jected to be installed.

Product TanksFor the product tanks, there

are a total of 54 tanks already completely fabricated and the erection or installation of 48 out of the 54 finished product tanks

is currently in progress. Just one of those product tanks is able to hold 60 million litres of liquids or condensate.

Concrete RequirementThe concrete required for pil-

ing, which is 130,000 piles, for this project amounts to 700,000 cubic meters and the infrastruc-tural works, covering roads, drains and culverts, will require 610,000 cubic meters of con-crete.

Further details  show that, with the thickness of 9 inches and 16 meters wide, the con-crete required for the entire pro-ject will be enough to pave the entire federal roads in Lagos, which cover a total distance of about 720 kilometers.

For the RCC sub-structure, the quantity of concrete re-quired is 600,000 cubic meters, while pavement in industrial plant areas will need 150,000 cubic meters of concrete, just as the RCC superstructure will take 100,000 cubic meters of concrete and buildings in plant and non-plant areas 90,000 cu-bic meters of concrete.

Valuechain  learnt that con-crete roads within the Dangote refinery alone will cover the length of 112 kilometers when fully completed, apart from re-finery’s concrete drains of 200 kilometers and the ODC Road from the jetty to fertilizer plant and refinery, which is of the length of nine kilometers.

PipingThe piping items required for

scope of work of the Dangote Refinery is 6,176,338 of AG Pip-ing ID; 19,091,213 of AG Piping IM; 740,405 of UG Piping ID; and 2,578,400 of UG Piping IM.

This scope of work will be car-ried out across a network of 86 buildings, out of which there will be 22 SRRs/ control rooms, 19

substations, and 45 non-plant buildings.

WorkforceWhen work commences fully

at this massive industrial com-plex, the manpower needs will stand at 60,000 people at peak periods, as well as 300 cranes, facilitating the movement of 2 million cargoes per day.

The sophistication of work tools being deployed here for work construction is unmatched by all standards across the building and construction space within Nigeria.

There is already a 1,500 tonne crane at the jetty within the Dangote Industry Free Trade Zone performing various tasks. Currently, the local manpow-er on site of construction work is above 10,000 people,  yet with the potential for progres-sive addition to the number as construction and maintenance works proceed and keep ex-panding in scope.

Material Unit RequirementsThe  Sulphur Recovery Unit

(SRU) in the complex alone will need a total of 2,810 units of equipment, including 1,055 pumps, 557 heat exchangers, 483 air coolers, 443 vessels, 153 tanks, 68 columns and 51 reac-tors.

Yinka Akande, GGM Dangote Refinery

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Industry 04:19

Other requirements are one million tonnes or 22,300 truck-loads of cement, 200 thousand tonnes of rebars, which are enough to build 20 thousand four bedroom duplexes, 140 thousand tonnes of steel plates and 110 thousand tonnes of structural steel.

Then, the LT and power ca-bles needed for wiring works will cover the length of 6,800 kilometers, equivalent to travel distance from Lagos to Kano six different times.

The pipes needed for work here will reach the length of 2 thousand kilometers and will cover a distance of movement from Lagos to Maiduguri, while the HV and MV cables to be used will reach the length of 575 kilometers and could cover as much as the distance from La-gos to Lokoja.

This will create a huge oppor-tunity for cable manufacturing, supply and installation compa-nies in Nigeria, such as Coleman Wires and Cables.

Today, the value  of Coleman Wires and Cables, a Nigerian cable manufacturing compa-ny, which is worth well in excess of N25 billion and still grow-ing, according to data sourced by Valuechain  from the compa-ny.

In 2009, the company had 120 staff and today it is em-ploying about 400 people and still growing. It runs one shift with 400, with 90 per cent of its funds coming from commercial banks, especially working capi-tal.

The company says it has the ability to employ over 8,500 people if running its factory ful-ly, and if government and large corporations are patronizing lo-cal businesses such as theirs.

“The real sector can devel-op the Nigerian economy if the government decides to focus on those companies that can cre-ate employment and generate more jobs. For the real sector to expand and create more jobs, government needs to reduce cost of borrowing, as commer-cial borrowing cannot sustain manufacturing companies because it is very expensive,” said  George Onafowokan, the CEO of Coleman Cables.

Today, Coleman is the pioneer for a lot of products not only in Nigeria but also in West Afri-ca, especially staying ahead in meeting the local content needs of international oil and gas companies operating in Nige-ria, including 100 percent FPSO topside cabling, and even pro-ducing part of the subsea wiring cables.

Coleman is the first and only producer in West Africa of in-sulated high voltage cable up to 33KV, and is also the pioneer producer of CAT 5 and CAT 6 network cable that are used for local area network produc-tion and telecommunications in West Africa.

The company is the first pro-ducer of TV/video cable which is used for TV antennae connec-tions and cable satellite as well as other products. Those are the three major pioneer products it

has in West Africa. In terms of DC flexible cable, Coleman is the biggest producer in West Africa and it does the biggest sizes.

Considering the high voltage cable, the company is the sixth country in the continent to pro-duce this and in East Africa, Central Africa and West Africa, it is the pioneer of the large ma-jority in this area. Prior to that, you could only get the Insulated High voltage cable in North Afri-ca or South Africa.

Berthing FacilityHandling of cargoes at this

facility, including Over Dimen-sional Cargoes (ODC), is seam-less since it has the flexibility to handle RORO (Roll-On Roll-0ff) or LOLO (Lift-On Lift-Off), de-pending on the size and nature of cargo.

The Dangote Jetty is situated at a distance of 12.3 kilometers from the refinery, thereby reduc-ing the travel time for the Self Propelled Modular Transporter (SPMT) that would move car-goes between the two facilities at the speed of five kilometers per hour.

Valuechain  investigations confirmed from the Dangote Group that the proximity of the company’s refinery from its jet-ty at the Lekki Free Trade Zone will cut travel time to two days as compared to the 21 days it could take to travel from the same refinery to Apapa Jetty.

The situation of the jetty close to this petrochemical industrial facility was necessitated in or-der to forestall the problem of

Then, the LT and power cables needed for wiring works will cover the length of 6,800 kilometers, equiva-lent to travel distance from Lagos to Kano six different times.

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Industry 04:19

gridlock currently experienced at Apapa Jetty due to inordinate delays on account of its low load bearing capacity at existing quays.

A 2018 report by the Lagos Chamber of Commerce and Industry, in collaboration with the Nigerian Economic Summit Group, the Manufacturers As-sociation of Nigeria, and other affiliate business entities, says that Nigeria loses “about N3.06 trillion (or $10 billion) on non-oil export and about N2.5 trillion corporate earnings across the spectrum of its economy on a yearly basis” as a result of the gridlock on access roads con-necting the Apapa Port to the rest of the Nigerian economy.

There are about 27 tank farms situated there, apart from factories, bonded terminals, and service businesses, but the perennial gridlock frustrates im-porters and exporters in their quest to meet supply deadlines.

Static road jam extends from the Apapa Port to as far as Fad-eyi, as trailers, tankers and other trucks, as well as cars and bus-es assume near permanent po-sitions of the roads and bridges on the most important econom-ic corridor in Nigeria.

Government’s decades of ef-forts to resolve this haulage cri-sis on this road have failed and the economic losses continue. This is the negative situation that is being mitigated by the Dangote Group by locating its petrochemical complex along

the same corridor with its own jetty.

Since the commencement of construction work at the refin-ery, over 10,000 Nigerian per-sonnel have been employed on site, but the extent of employ-ment by the various contractors and sub-contractors on the ex-pansive construction site pres-ently stands at 7,500 people.

The current ratio of Nigerians to expatriates that are doing the various jobs is 93 percent Nige-rians to 7 percent expatriates, and about 120 contractors are currently working on the site, even as many more are expect-ed to join in the effort to meet a 2020 deadline of work comple-

tion and commissioning of the refinery to start production.

With a structured and strate-gic plan to train a total of 900 Nigerian engineers in engineer-ing and design of the refinery, the fourth batch of engineers are currently undergoing train-ing in India to make sure that the right set of skills and talents are made available to local per-sonnel to handle the jobs and further entrench Nigerian con-tent and participation, earn the pay, contribute to the local econ-omy, and reduce the severity of capital flight associated with the development of such hi-tech projects in developing countries, including Nigeria.

Valuechain investigations confirmed from the Dan-gote Group that the proximity of the company’s refinery from its jetty at the Lekki Free Trade Zone will cut trav-el time to two days as compared to the 21 days it could take to travel from the same refinery to Apapa Jetty.

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Industry 04:19

In collaboration with the Nige-rian Directorate of Employment (NDE) and the Nigerian Content Development and Monitoring Board (NCDMB), 200 artisans selected from the host commu-nities are currently being trained in the areas of masonry, carpen-try, AC electrical works, plumb-ing, welding, iron bending and auto mechanics.

In addition, 1,026 trucks and tippers have been bought to improve the capacity of local logistic support services as the project steadily progresses towards its 2020 deadline for completion.

In pursuit of this goal, the pro-ject contractors handling the job on behalf of the Dangote Group have set up the world’s largest ready mix concrete capacity at any given location to produce ready mix concrete, including 72 concrete pumps and 141 transit mixers, since the annual concrete manufacturing in the country is inadequate. 

This development has made it such that the procurement, supply, fabrication and main-tenance opportunities in this gigantic industrial project have become abundant for domestic suppliers of construction equip-ment and materials, in line with Nigeria’s agenda for local con-

tent participation in giant pro-jects, especially in the oil and gas sector.

For instance, investigations conducted by  Valuechain  con-firmed that about 16.8 kilograms of perchloroethylene (PERC) is required per day for the reactor generation section alone, while 340 thousand cubic meters of nitrogen is required only for set ups within the petrochemical industrial complex as work pro-gresses. 

Also, 320 thousand kilograms of soda ash, or sodium car-bonate, is required in the Sul-phur Recovery Unit (SRU) of the refinery, just as it is the case in the Crude Distillation (CDU) and mild HYDROCRACKING-MHC process block. 

  Then, for lubricants, engine service will require 50 thousand litres of engine oil every 250 hours, as well as 50 million li-tres of lubricant oil every 1000 to 1500 hours of usage of ma-chines or final drive. 

In terms of transmission needs, 50 million litres of trans-mission fluid will be needed every 2000 hours, and this is apart from the other volumes of lubricants that would be re-quired for static and rotating equipment. 

  Yet, the area of civil con-

struction has a lot more of local content mainstreaming oppor-tunities for Nigerian businesses with the capacity and willing-ness to seize the moment and do business on the Dangote re-finery project. 

On its own, the company has bought over 200 units of equip-ment to enhance the local ca-pacity of site works.

Disclosing the reason behind this to  Valuechain,  a top level official within the company said that even Julius Berger, Dantata and Sawoe, Hi-tech, and many other civil engineering and con-struction giants operating with-in Nigeria have not been able to handle some portions of its con-struction requirements.

A 2018 report by the Lagos Chamber of Commerce and Industry, in collaboration with the Nigerian Eco-nomic Summit Group, the Manufacturers Association of Nigeria, and other affiliate business entities, says that Nigeria loses “about N3.06 trillion (or $10 bil-lion) on non-oil export and about N2.5 trillion corpo-rate earnings across the spectrum of its economy on a yearly basis” as a result of the gridlock on access roads connecting the Apapa Port to the rest of the Nigerian economy.

George Onafowokan, CEO, Coleman Cables

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The Minister of Energy, Industry and Mineral Resources of the Kingdom

of Saudi Arabia, H.E. Khalid bin Abdulaziz Al-Falih has expressed the strong readiness of his country to sign a Memorandum of Understanding (MoU) with Nigeria. The Saudi Energy Minister communicated the blessings of the King of Saudi Arabia, Salman bin Abdulaziz Al Saud and the Crown Prince, H.R.H. Mohammed bin Salman bin Abdulaziz Al Saud for the partnership investment while announcing their readiness to sign the MoU with the Nigerian President, Muhammadu Buhari.

The early draft of the MoU that will solidify the new oil and gas development partnership between Nigeria and Saudi Africa will be ready in the first week of May, 2019.

The Saudi Minister made this known during a high level bilateral meeting with Nigeria’s Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu on Wednesday 24th April, 2019 in Riyadh. He stated that his team will undertake the task of drafting an outline of the MOU in consonance with Nigeria and consequently move through the bureaucratic channels of getting the requisite

approvals and endorsements. The Organisation of Oil Exporting Countries (OPEC) Governors for the two countries, Eng. Adeeb Y. Al-Aama (Saudi Arabia) and Dr. Omar Farouk Ibrahim (Nigeria) have already been nominated to fast track the process for official endorsements and signing.

The agreement will in principle opens the doors for Nigeria to potentially benefit from Saudi Arabia’s and effectively, Saudi Aramco’s recent aggressive oil sector investments across the globe. Areas of interest will cover existing refinery revamp, building of a brand new refinery, LNG investments and product supply

Nigeria, Saudi Arabia to Present MoU on Oil and Gas Infrastructure Development in May

–By Fred Ojiegbe

Continued on page 35

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Industry 04:19

The Senate during plenary on Wednesday, April 17 passed the Petroleum In-

dustry Governance Bill (PIGB), which it had reworked. The Senate passed the bills after its technical committee worked on President Buhari’s observations as reasons for his earlier decline of assent to them and re-drafted the affected clauses.

The PIGB seeks to make the Nigerian Petroleum Regulatory Commission (NPRC) the sole regulator overseeing the licens-ing, monitoring and supervising of petroleum operations. It also gives the NPRC the powers to enforce industry laws, regula-tions, and standards.

President Buhari had initial-ly rejected the bills citing legal, constitutional and drafting is-sues as reasons for rejecting

the bills after which the Senate set up a technical committee to review the bills.

The bill was however passed on Wednesday of April 17 after Ahmad Lawan, who is the Sen-ate leader, moved a motion in that regard, and after the techni-cal committee effected correc-tions. The bill will also have to be passed by the House of Repre-sentatives before they are finally sent by the National Assembly to the President for assent.

The prolonged period it has taken the National Assembly for passage of the PIGB and for it to be signed into law by the President appears to be taking its toll on the petroleum indus-try, which is the cash cow of the Nigerian economy, as more than 211 oil blocks are either idle or yet to be renewed.

Some experts have argued that the failure of the Feder-al Government to conduct the much awaited oil bid round may have robbed the country of reve-nues in the region of about N112 billion in signature bonuses.

Signature bonuses, accord-ing to the Nigerian National Petroleum Corporation (NNPC), are funds paid by oil compa-nies to the Federal Government upon their successful bid for oil blocks. Since the last bid round was conducted in 2017, many investors who had hoped that the fields would be up for grabs are said to have since moved their resources to other coun-tries where they consider the business environment more friendly.

The Founder and Principal Partner, Nextier, Patrick Okigbo,

Senate’s Passage of PIGB puts Pressure on PRESIDENCY to Expedite Assent

…As Executive delay stalls allocation, renewal of oil blocks–By Gideon Osaka

Senate President Bukola Saraki Senate Leader Ahmad Lawan

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Industry 04:19

believes that the failure to secure presidential assent on the PIGB shows that sig-nificant uncertainty remains on the legal framework gov-erning the petroleum sector in the country. Estimates by an industry advocacy group, “Publish What You Pay,” said the uncertainty costs Nige-ria about N3 trillion yearly.

According to Okigbo, stakeholders in the sector must work with the Presi-dency to ensure assent to the bill, adding that the revo-lutionary bill must be signed before the end of the current administration to rekindle in-vestors’ confidence.

“The Federal Ministry of Petroleum Resources and the National Assembly have worked together to address those issues, which the Presi-dency claimed were its reasons for the refusal of assent to the new version of the PIGB,” he added.

For Dada Thomas, former President, Nigerian Gas Associ-ation (NGA), and Chief Executive

Officer, Frontier Oil Limited, it is shameful that Nigeria has not held a bid round since 2007.

“In that time, other African countries have held many bid rounds that people have watched and discovered were transparent. But for 11 years, Ni-geria has not held one,” he said.

According to him, a new bid round is viable under a new legislation, considering that major oil companies are being deterred by the obscu-rity in the sector. He howev-er warned that the country must ensure the passage of the PIGB before the end of the current administration.

“I am worried and sad for Nigeria. We need to res-cue the Nigerian explora-tion and production sector. It’s a big problem and we need to solve it collective-ly as a nation,” he said. On the marginal fields, Thom-as said government had been frustrating growth by not honouring the terms of agreement it signed with the operators.

“For example, the mar-ginal field was supposed to be taxed at a 55 per cent PPT rate not the 67.5 per cent or 85 per cent that other fields are being taxed. That has never been im-plemented. Marginal fields are being taxed just like everybody else,” he added.

I am worried and sad for Nigeria. We need to res-cue the Nigerian exploration and production sector. It’s a big problem and we need to solve it collectively as a nation,” he said. On the marginal fields, Thomas said government had been frustrating growth by not hon-ouring the terms of agreement it signed with the oper-ators.

According to Okigbo, stakeholders in the sector must work with the Presidency to ensure assent to the bill, adding that the revolutionary bill must be signed before the end of the current administration to rekindle investors’ confidence.

President Muhammadu Buhari

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Industry 04:19

At the just concluded Nige-ria Oil and Gas Opportu-nity Fair (NOGOF), Dr. Ibe

Kachikwu, Nigeria’s Minister of State for Petroleum Resources, told the gathering of oil and gas industry that approval for proj-ects in the Nigerian petroleum industry would henceforth be based on the cost of produc-ing oil and gas by participating companies.

He also said that the govern-ment, on its part, had reduced the cost of crude oil production to 23 dollars per barrel from an upward of about 32 dollars per barrel, adding that some com-panies in Joint Ventures (JVs) with NNPC had already driven the cost of crude oil production down to as low as 15 dollars per barrel.

Kachikwu urged oil and gas production, as well as service companies present at the fair that efforts to bring down the cost of production should not be made only by the govern-ment or through policies, but should also be driven by the pri-vate sector.

“Approval for projects in the petroleum industry would be based on the cost of producing oil and gas, and efforts are cur-rently on to further ensure that the cost was brought down to below 15 dollars per barrel,” the Minister assured.

The Ministry, he said, is going to come up with a benchmark to analyse and compare com-panies who do business in Ni-geria and what cost of produc-tion they are running.

This is because any unbeliev-able cost of production basi-cally impacts negatively on the revenue stream of the country.

According to the Minister, “we need to start finding out how companies awarded rec-ognition are doing, and why are the others not going in that direction. However, excuses of the environment being different or absent infrastructure can no longer hold water, because there are a lot of countries with peculiar situation as ours that

are producing oil at relatively lower cost.

“One of the mandates that I am giving the Department of Petroleum Resources (DPR) is that as we begin to look at new projects, the cost at which we are going to produce is going to become critical to our ability to approve those projects for you.”

The NOGOF 2019 from where the minister was speaking held in Yenagoa, Bayelsa State, from April 4 to 5 at the instance of the Nigerian Content Develop-ment and Monitoring Board (NCDMB) and within the prem-ises of the Board’s state of the art multibillion naira headquar-ters, a 17 storey architectural structure.

NOGOF 2019:Project Cost to Determine Future

Approvals — Kachikwu–By Yange Ikyaa

ES, NCDMB, Engr. Simbi Kesiye Wabote presenting an award to one of the recipients

14

Industry 04:19

The projects and opportunities cover the upstream, midstream and downstream sectors of the Nigerian oil and gas economy and were collated from presentations by various oil and gas companies at the first edition of NOGOF in 2017 and updated at workshops organized by NCDMB in October 2018.

Tagged “Maximizing Oil and Gas Industry for the Benefit of Nigerian People,” the NOGOF 2019 event attracted about 1,500 participants to its credit.

Kachikwu seized the oppor-tunity and tasked indigenous operators in the Nigerian oil and gas sector to step up their investments and take over ma-jor operations from internation-al oil companies (IOCs).

The minister said such a call for a new but heightened local investment drive in the nation’s oil and gas assets became ur-gent and important, especially considering the fact that many of the IOCs were considering di-vesting and charting new paths to other places.

According to him, changes in

the global oil and gas industry are presently challenging the current exploration and invest-ment strategies. This, he said, was because, “oil is fast be-coming a degenerating asset, with alternative sources of en-ergy taking over and attracting new investments.”

Kachikwu lamented that, while the world was moving on from fossil fuels, Nigeria has not yet taken advantage of the opportunities in the sector and designed strategies to harness advantages of renewables.

The minister urged indige-nous firms to take over and stop playing safe if they would benefit from the opportunities availed through new trends in the industry.

Speaking further, he said, “this has brought us to another milestone in the industry where the crude oil loading and export can be effectively monitored from my office, and it is becom-ing a major front burner item.”

He assured that government had invested tremendously in the oil and gas sector towards building capacity and investing in human development.

According to the minister, government had also ensured increase in production activ-ities, and completion of Egi-na Project and AKK Pipeline, among others, and was also working towards ensuring zero gas flare by 2020.

While delivering his welcome address, the Executive Secre-

Flavour performing live at the NOGOF 2019 Gala Dinner & Awards Ceremony

15

tary NCDMB, Engr. Simbi Kesi-ye Wabote, said the Board had identified over 80 oil and gas opportunities that would be de-veloped by major international and indigenous operating com-panies in the short and long term.

Wabote put the estimated cumulative value of the proj-ects in excess of $100 billion, even as the 80 projects are con-tained in the Compendium of Nigerian Content Opportunities in the Oil and Gas Industry that was launched at the NOGOF event in Yenagoa.

The projects and opportuni-ties cover the upstream, mid-stream and downstream sec-tors of the Nigerian oil and gas economy and were collated from presentations by various oil and gas companies at the first edition of NOGOF in 2017 and updated at workshops or-ganized by NCDMB in October 2018.

Wabote explained that “the compendium was intended to create a database of Nigerian Content opportunities and help indigenous and potential in-vestors prepare, improve their capacities and capabilities to participate in available and up-coming contracts and projects.”

He added that the com-pendium gives the industry a five-year outlook and enables stakeholders to key into those opportunities.

“Two years ago, when we held this workshop, we talked about ExxonMobil’s Ibot, Total’s Ikike and NLNG Train 7. Today, they are going through the funnel and within the next few weeks, they would take Final Investment Decisions (FIDs) on Ikike and Ibot and, before the end of the year, they would take FID on Train 7. We focus and follow through on those oppor-tunities. Every two years we roll on new opportunities and add

to the compendium.”Shedding more light on the

subject, Kachikwu maintained that the speedy development of the identified $100 billion opportunities would require the roles and contributions of various entities, including the Department of Petroleum Re-sources (DPR) for approvals, Nigerian National Petroleum Corporation (NNPC) for nego-tiations, and the oil compa-nies, that would take the FIDs, among others.

He promised that the Min-istry of Petroleum Resources would midwife a special ar-rangement that would involve every agency of government and the entity that has the role to play in the approval and de-velopment of the identified projects. “We must avoid a sit-uation whereby NCDMB might work very fast and get to the goal post and others will just be taking off. We would create an arrangement that involves everybody and be clear about the deliverables, timelines and opportunities and bring out something which everyone can join in to drive.”

On the government’s support for modular refineries as a strat-egy for ending crude oil theft, vandalism and environmental degradation, Kachikwu hinted that the Ministry of Petroleum Resources would develop a policy that would encourage persons living in oil producing communities to form cooper-atives with which they can set up and own modular refineries.

He said, “We would have some agreements with them to stop the sabotage. We can work with NCDMB to put in a bit of funding. Then we put in technical know-how, the busi-ness structure around it and

Engr. Johnson O. Awoyomi, STA to the Hon. Minster, Petroleum Resources presenting an award to a recipient

16

Industry 04:19

Shedding more light on the subject, Kachikwu maintained that the speedy development of the identified $100 billion opportunities would require the roles and contributions of various entities, including the Depart-ment of Petroleum Resources (DPR) for approvals, Nigerian National Petroleum Corporation (NNPC) for negotiations, and the oil companies, that would take the FIDs, among others.

have a major shareholder who is an entrepreneur. That way the locals get to participate, get jobs, and polish their skills sets. Crude is paid for and not stolen and the environment is better dealt with.”

The hugely successful NO-GOF 2019 event was organized on behalf of NCDMB by Jake Ri-ley, an international consultan-cy that helps leading compa-nies, public sector bodies and social sector organizations in Nigeria and beyond to build and improve their performance, as well as tackle other challenges they face.

NOGOF 2019 also served as an avenue for NCDMB to cele-brate companies with the most impactful local content devel-opment initiatives in the Nigeri-an oil and gas industry.

The NOGOF Gala Dinner and Awards held on the 4th of April, 2019 at the Royal Tulip Castle, Government House, Yenogoa, where stakeholders in the vari-ous subsectors in the industry who have supported Nigerian Content programs of the Nige-rian Content Development and Monitoring Board (NCDMB) were recognized and given awards.

Opportunity Presenters Awardees during the night in-cluded Chevron Nigeria Limit-

ed, ExxonMobil Nigeria, Nigeria Agip Oil Company, Shell Petro-leum Development Company, Nigeria National Petroleum Company, Dangote Group, and First E&P Development Compa-ny Ltd. Others were Midwest-ern Oil and Gas Company Lim-ited, Nigeria Gas Processing and Transportation Company (NGPTC), Frontier Oil and Gas, as well as Pinnacle Oil and Gas.

National Operating Company with the most impactful Local Content Development Initia-tive(s) award was won by the Nigerian National Petroleum Corporation (NNPC), while the Award to International Up-stream Operating Company with the most impactful Local Content Development Initia-tive(s) went to Shell, with Total and Exxon Mobil clinching the first and second runner up po-sitions respectively.

Then, the award to Indepen-dent or Indigenous Upstream Operating Company with the most impactful Local Content Development Initiative(s) exe-cuted was won by Seplat, while the first and second runner up positions went to FIRST E& P and AMNI accordingly.

Dangote won the award for Downstream Operating Com-pany with the most impactful Local Content Development

Initiative(s) executed, Petrolex was first runner up and Pinna-cle was second runner up.

The award to Gas Process-ing Company with the most im-pactful Local Content Develop-ment Initiative(s) went to NLNG, Nigerian Agip Oil Company was first runner up and Nigerian Gas Processing and Transportation Company (NGPTC) was second runner up.

Award to Multinational Ser-vice Provider with the most impactful contribution to Local Content Development (within the period of 2017 to date) was won by Samsung Heavy Indus-tries Nigeria Ltd, while Baker Hughes, A GE Company, took the first runner up position and Nigerstar was the second run-ner up.

Then, Marine Platforms Ltd won the award for Nigerian In-digenous Service Provider with the most impactful contribu-tion to Local Content Develop-ment (within the period of 2017 to date), with Global Process and Pipeline Services Limited being the first runner up and Coleman the second runner up.

Finally, the award for the Most Supportive Financial In-stitution to Local Content was claimed by United Bank of Afri-ca (UBA).

17

Star of the Industry 04:19

Dr. Rilwanu LukmanPosthumous (1938 – 2014)Former Secretary-General OPEC

Star of the Industry 04:19

Rilwanu Lukman was born in the ancient city of Zaria, Kaduna State on 26 August

1938. He trained as a mining engineer at the College of Arts, Science, and Technology, Zaria (now Ahmadu Bello University), and then at Imperial College, London. He earned a higher de-gree in mining engineering from the University of Mining and Met-allurgy in Leoben, Austria (1967–1968). He obtained a degree in

Mineral Economics from McGill University, Montreal in 1978, and an honorary doctorate degree in Chemical Engineering from the University of Bologna in Italy.

His fi rst job in the mining in-dustry was as an Assistant Min-ing Engineer with A B Statsgruvor of Sweden (1962–1964). After returning to Nigeria, Lukman was appointed an Inspector of Mines, later Senior Inspector and then Acting Assistant Chief Inspector

in the Federal Ministry of Mines & Power in Jos, Plateau State (1964–1970). He then became general manager of the Cement Company of Northern Nigeria (1970–1974). By 1979 Lukman had become general manager and chief executive offi cer of the Nigerian Mining Corporation, Jos.

Lukman was appointed Min-ister of Mines, Power and Steel from 1984 to 1985 in the govern-

In his effort to rid the Nigerian Oil and Gas Industry of incompetence and corruption, In 2008 Lukman, then a Petroleum Minister, initiated reforms and presented the first version of the Petroleum Industry Bill which aim is to set a commercially driven structure that will boost invest-ment and production.

–By Danlami Nasir Isah

Dr. Rilwanu LukmanPosthumous (1938 – 2014)

Former Secretary-General OPEC

Rilwanu Lukman with former Venezuelan leader, Hugo Chavez

20

Star of the Industry 04:19

ment of General Muhammadu Buhari. In 1986, General Ibrahim Badamasi Babangida appointed him Minister of Petroleum Re-sources, holding that position until February 1990. In that role, he was also Chairman of the Board of the Nigerian National Petroleum Corporation. He was briefly Minister of Foreign Af-fairs between January and Sep-tember 1990. He was Chairman of the Board of Directors of the National Electric Power Authority (1993–1994).

From 1986 he served eight consecutive terms as OPEC President. Lukman was elect-ed OPEC Secretary General on 22 November 1994, succeeding Dr. Subroto of Indonesia, whose three-year term ended on 30 June 1994. Lukman was a com-promise choice between two competing candidates, Hossein Kazempour Ardebili of Iran and Alirio Parra of Venezuela. He was re-elected to a second term in

1997, holding offi ce until the end of 2000. He was a central fi gure in the agreement between Iran and Saudi Arabia to control oil prices early in 1999, followed by agreements to reduce produc-tion levels, which led to a surge in prices towards the end of the 1990s.

When Olusegun Obasanjo came into offi ce at the start of the Nigerian Fourth Republic, the President retained direct control of the Oil Ministry. Lukman was appointed Special Adviser on Petroleum and Energy Matters to the President in June 1999, replacing Godwin Aret Adams, and Chairman of the Nigerian National Petroleum Corporation (NNPC). In July 1999 his offi ce announced that 47 offshore Ex-ploration and Production licenc-es awarded by the government to local companies had been cancelled, including 11 high-ly attractive deep-water blocks given in March 1999 to compa-

nies with links to the military. He said the blocks would be open to commercial tender from both local and foreign companies. He was in favour of restructur-ing the NNPC to make it a fully commercial enterprise, but did not agree that it should divest its controlling stake in the oil pro-ducing joint ventures, and at that time was not in favour of rapid deregulation of the domestic fu-els market.

Dr. Rilwan Lukman became the Chairman of Afren Nigeria when it was established in May 2005. He was also a member of the Society of Petroleum Engineers (SPE) and served on the SPE Board as Regional Director for Africa. In 2007, Lukman became a member of the Supervisory Board of Dietsmann NV of the The Netherlands, a leading In-ternational Operation & Mainte-nance company in the upstream energy sector.

Lukman was appointed Hon-

Rilwanu Lukman in a group photograph with OPEC governors during one of the OPEC meetings

21

orary (unpaid) Advisor on En-ergy and Strategic Matters to President Umaru Yar’Adua in August 2007. In December 2008 Lukman was appointed Minister of Petroleum Resources, and resigned from his position with Afren, putting his holdings in a blind trust. In February 2010 there were rumours that Lukman had tendered his resignation af-ter a shakeup in the cabinet by the new acting President, Good-luck Jonathan, but that it had not been accepted. In March 2010, he warned that the scarcity of petroleum products in Nigeria would only get worse as long as the government held back on deregulating the industry. He left offi ce on 17 March 2010 when Acting President Goodluck Jona-than dissolved his cabinet.

Lukman was made a Knight Commander of the Order of the British Empire (KBE) in 1989 and Offi cer of the Légion d’honneur

of France in 1990, as well as be-ing conferred with the First class rank of the Order of the Liberator from the Republic of Venezuela. He was the fi rst African ever to be honoured with the Fellowship of the Imperial College, Universi-ty of London.

In his effort to rid the Nigerian Oil and Gas Industry of incom-petence and corruption, In 2008 Lukman, then a Petroleum Minis-ter, initiated reforms and present-ed the fi rst version of the Petro-leum Industry Bill which aim is to set a commercially driven struc-ture that will boost investment and production.

Before his demise on 21 July 2014, Rilwanu Lukman was an accomplished engineer, tech-nocrat, administrator and a role model to many not only in Nigeria but across the globe. His contri-butions to the global Oil and gas industry will remain evergreen in the minds of many.

Star of the Industry 04:19

22

Nigeria should Scrap JV Arrangement —Prof. Ibe

A retired diplomat of the United Nations, Prof. Chidi Ibe, has said that

Nigeria should end the Joint Venture (JV) it goes into with International Oil Companies (IOCs), as the business arrangement, is too expensive for Nigeria to cope with and offers inadequate benefits of profits.

He also advised that the country should rather embrace the Production Sharing Contract (PSC) model which, he thinks, will free Nigeria from contractual monetary contributions that are necessary under JVs in the form of “cash calls” that leave Nigeria perpetually in debt.

Prof. Ibe stated this while delivering his paper during the 2019 Annual Oloibiri Lecture Series and Energy Forum (OLEF) organized by the Society of Petroleum Engineers (SPE),

Nigeria Council, on April 25, 2019 with the theme “Energy Security and Sustainable Development in Nigeria: The Way Forward.”

He said Nigeria must “jump down from the JV cow and mount the horse of PSA,” while also insisting that Nigeria must drill new wells in all of its crude oil basins in all the regions of the country. “Let the country be awash with oil wells,” he said.

Also speaking, Justice Derefaka, who is the Programme Manager of Nigerian Gas Flare Commercialization Programme (NGFCP), said 145 to 150BCM of gas is flared globally, which could otherwise be used to generate about 750 million kWh of electricity, an amount of energy that is enough to carter for electrical power needs of the entire continent of Africa.

UN data indicates there are 1.1 billion people without access

to electricity, while 588 million people are in the dark and still struggling to gain access to electricity in Africa, with 178 million out of that figure living in sub-Saharan Africa.

“In 2017, Nigeria flared 324BCF of gas, which is enough to produce 3000 megawatts of electricity daily, yet 80 percent of gas at flare points in Nigeria could be viably commercialized,” according to Derefaka.

Yet, 600,000 people die annually in Africa as a result of atmospheric air pollution and Nigeria alone contributes 40 percent of the total gas that is flared throughout on the continent, but the use of gas as a major alternative source of energy could drastically reduce such pollution induced killings.

This NGFCP is expected to curb the emission of 13 million tonnes of carbon dioxide each

–By Yange Ikyaa

He said Nigeria must “jump down from the JV cow and mount the horse of PSA,” while also insisting that Nigeria must drill new wells in all of its crude oil basins in all the regions of the country. “Let the country be awash with oil wells,” he said.

23

year in Nigeria.The Nigerian Minister of State

for Petroleum Resources, Dr. Ibe Kachikwu, inaugurated the Proposal Evaluation Committee on April 11, 2017 to screen bids from 825 interested entities in participating in the NGFCP.

It is actively supported either in technical or financial terms by the World Bank, the United Agency for International Development (USAID), and the Facility for Oil Sector Transformation (FOSTER), a non-governmental development agency, funded by the UK Department of International Development (DFID).

Contrary to the thinking that Liquefied Petroleum Gas (LPG), also known as cooking gas, is only for a certain class of people, the Nigerian National Petroleum Corporation (NNPC) has stated that the LPG market in Nigeria has room for everyone to operate.

The Group Managing Director of the NNPC, Dr. Maikanti Baru, made this assertion at the Argus West Africa LPG Conference which held April 25, 2019 in Abuja.

Speaking at the conference, the GMD, who was represented by his Technical Assistant, Downstream, Mr. Abdulkabir Ahmed, contended that the challenges faced in the nation’s LPG sector provide opportunities for people from all strata of the Nigerian society to make a fortune.

According to the GMD, the infrastructural bottlenecks and lack of institutional and commercial regulatory framework which bedeviled the gas sector could be exploited and converted into wealth-creating opportunities.

“We see the need to put in place relevant policies and regulations to stimulate the industry and encourage LPG utilization, while the infrastructure deficits provide opportunities for investments to play critical roles in the industry. From large scale to medium and small scale enterprises, there is a place for everyone in the Nigerian LPG business landscape”, he stated.

Dr. Baru expressed concern that stakeholders were still not forthcoming with solutions to unlock the economic potentials the LPG sector.

“As we speak today, Nigerian energy mix is dominated by biomass-based fuels which account for about 82 per cent while Natural Gas accounts for just 8.8%. This implies a very high potential for explosive growth in the LPG business which will enable more players to come onboard”, he said.

He said the Corporation was currently implementing some key initiatives aimed at consolidating and expanding its footprint across the LPG business value chain, adding that nation’s LPG production would increase to about

5million tons per annum from the current 3million tons upon the completion of the ongoing projects.

He called on other stakeholders to invest in the sector as the corporation was committed to the accelerated development of the domestic gas market to significantly drive the multiplier effect of gas.

Also speaking, the Managing Director and Chief Executive Officer Designate of the NLNG Shipping Management Limited (NSML), Mr. Ahmed Abdulkadir, affirmed that in spite of the numerous challenges facing the LPG sector, NLNG had recorded significant progress in the last 10 years and was committed to the LPG market.

The Executive Secretary, Petroleum Products Pricing Regulatory Agency (PPPRA), who was represented by Mr. Agbaje Olusupo, General Manager, Gas & Renewable Energy, said the agency would keep to its regulatory mandates to ensure fair play in the LPG market, adding that the product had been deregulated.

Earlier in his opening remarks, the Senior Vice President, Argus UK, Mr. Phil Shaw, commended the NNPC for its sound initiatives and critical roles in building a gas-driven economy.

He also appreciated the active support of the corporation towards organizing the first Argus LPG Conference in West Africa.

According to the GMD, the infrastructural bottle-necks and lack of institutional and commercial regulatory framework which bedeviled the gas sector could be exploit-ed and converted into wealth-creating opportunities.

24

Cover Story 04:19

According to the La-gos-based economic research and analysis fi rm, Financial Deriva-

tives Company (FDC), the Nige-rian government could end up spending as much as $5 billion in subsidy payments by the end of the year 2019.

This fi gure is far beyond an

earlier projected amount of $3.5 billion that the Nigerian Minister of State for Petroleum Resourc-es, Emmanuel Ibe Kachikwu, said would be used for subsidy payment within the same peri-od under review.

While many people thought that the subsidy regime would be stooped during the fi rst term

of President Muhammadu Bu-hari’s government because of the “corruption” tag it carries, and rightly so, it was rather re-structured and continued, with some reduction in its cost from the onset of the government but rising with time and trends in the global oil market.

For instance, with global oil

In Whose Interest?In Whose In Whose

Fuel Subsidy Removal

There are speculations making the rounds that the Nigerian government may have reached an advanced level in plans towards 100 percent removal of subsidy it puts on refi ned petroleum products consumed by its citizens. This expensive and non-market scheme is often criticized by the Washington Consensus as opaque, corrupt, unsus-tainable, and a clog in the wheel rider of economic progress in Africa’s largest market, thereby sparking a debate among stakeholders whether putting an end to it will result in full and sustainable market autonomy or total economic chaos. Yange Ikyaa and Gideon Osaka examines the trend.

25

President Muhammadu Buhari Former President Goodluck Jonathan

Cover Story 04:19

prices rising from $37 per barrel since Buhari took office in 2015 to as much as $70 this year, Ni-geria’s subsidy costs have also grown sharply. 

Global oil prices soared over a two-month period, just as Nige-ria’s expenditure on fuel subsidy grew from a daily average cost of N774 million in March 2018 to N2.4 billion per day in May of the same year, as the country grappled with fiscal deficits and rising debt levels.

The Petroleum Products Pric-ing Regulatory Agency (PPPR) said, without government sub-sidy, the price of petrol in Nige-ria could be as high as N205 per litre.

The government agency fur-ther explained that the price of the fuel appreciated by 8.47 per cent from N189 per litre in April 2018 to N205 per litre in May 2018. During that period, it said, oil prices continued to soar such that the average price for Brent crude was $77.92 per barrel and Nigeria’s Bonny Light was $78.08, while West Tex-as Intermediate (WTI) sold at $60.27 per barrel.

In the new subsidy structure under President Buhari’s gov-ernment, instead of paying sub-sidies to independent importers, including some IOCs, as was the case under previous admin-istrations in Nigeria, the govern-

ment’s new policy has made the national oil company,  the Nige-rian National Petroleum Corpo-ration (NNPC),  to become  the sole importer, which is respon-sible for all refined fuel imports into the country.

By so doing, the NNPC swal-lows the difference in payments between its costs and the price at the pump back in the country, bringing home the reality that the government still pays the bill to insulate Nigerians from the full costs or prices of petrol which they consume.

The debate on subsi-dies has heated up due to divid-ed opinions between those who believe in market autonomy and

If the refineries are not working, it is not the fault of Nigerians. Since the government cannot summon the courage to sack or fire those that are not doing their job to keep the refineries working, it should bear the burden of paying for subsidy instead of putting the cost on the mass-es in the name of deregulation, removal of subsidy, and fuel price increase.

26

Cover Story 04:19

those who think that the gov-ernment must continue to in-tervene in the market in order to save the poor from the power of capitalism. As expensive and unprofitable as they are, those who are in government and can decide to end the subsidies be-lieve that such a move will be  politically unpopular,  since it will  force consumers to pay more on essential products, notwithstanding the fact that capitalists and corporations fa-vour  the removal of subsidies and allowing market forces to decide commodity prices with-out government interference.

When  President Good-luck  Jonathan  announced that he  would abolish the fuel subsidy in 2012,  his govern-ment faced massive street pro-tests and he eventually backed down on how much more to cut from fuel subsidy financing.

As the price of oil rose from 2017, there were more calls and increased pressure on the Nigerian government to cut the subsidies or raise fuel prices, but that did not happen prob-ably because either of the two options represented harmful choices to the ruling party’s chances of re-election. Howev-er now that the elections have been won, there may be a possi-bility that subsidies would be re-moved and oil prices may shoot up nationwide.

International financial instit-utions like the World Bank and the International Monetary Fund have been urging governments, including the Nigerian govern-ment, to cut costly national sub-sidies and to provide them in a targeted fashion to poor com-munities. The World Bank says that subsidies “impose a heavy fiscal burden and are likely not sustainable, since they are dis-proportionately beneficial to

high-income households, and are a costly way to protect the poor.”

But one analyst, who asked not to be named, told  Valuec-hain  that “Nigerians shouldn’t pay for the irresponsibility of the country’s refinery managers. If today the refineries are working, the IMF would not be advising Nigeria on removal of subsidy. There won’t be issue of landing cost of petroleum products be-cause we have network of pipe-lines connecting the production zones with our refineries.”

“If the refineries are not work-ing, it is not the fault of Nige-rians. Since the government cannot summon the courage to sack or fire those that are not doing their job to keep the refin-eries working, it should bear the burden of paying for subsidy in-stead of putting the cost on the masses in the name of deregu-lation, removal of subsidy, and fuel price increase.

“Should Nigerians always pay for the failure of the agen-cy called the Nigerian National Petroleum Corporation (NNPC) in effectively discharging its du-ties or always giving excuses for its failure to do its work,” he queried.

He added that “a country that is endowed with crude oil like ours should be able to refine the crude locally, sale to its citizens at affordable prices and export both crude and refined products to foreign market to earn forex”     

It would be recalled that at the just ended World Bank Spring Meeting in Washington DC, United States of America, Managing Director of the Inter-national Monetary Fund (IMF), Christine Lagarde, advised the Nigerian government to end fuel subsidy and instead ex-pend such money it spends annually to finance the scheme

Maikanti Baru, GMD NNPC

Ayuba Wabba, NLC President

Mrs. Zainab Ahmed, Minister of Finance

27

Cover Story 04:19

on health, education and infra-structural development.

Lagarde explained that sub-sidy spending was infringing on other critical areas of capital development, including health, education and infrastructure, hence the need for the govern-ment to refocus.

She further explained that it is the monetary institution’s general principle to discourage fossil fuel subsidies because of its consequences on other ar-eas of life and development.

According to her, “as far as Ni-geria is concerned, with the low revenue mobilisation that exists in the country; in terms of tax to GDP, Nigeria is amongst the lowest. A real effort has to be done in order to maintain a good public finance situation for the country.   And, in order to direct investment towards health, ed-ucation, and infrastructural de-velopment, but if you look at our numbers from 2015, it is no less than about $5.2 trillion that are spent on fuel subsidies and the consequences thereof. And the Fiscal Affairs Department has actually identified how much would have been saved fiscally but also in terms of human life, if there had been the right price on carbon emission as of 2015. Numbers are quite staggering.”

The IMF is not an institution

to be easily ignored based on monetary policy issues and for these reasons and some oth-ers, there are fears in Nigeria currently that the price of petrol may increase notwithstanding the assurance of NNPC that such will not happen anytime soon.

This fear is being reinforced on the heels of bickering be-tween stakeholders in the oil and gas industry over supply of the product, as well as the unre-solved subsidy issue.

Valuechain  authoritatively gathered that there was a meet-ing between NNPC and stake-holders within the circles of MOMAN, or Major Oil Marketers Association of Nigeria, border-ing on possible petrol price hike. It was learnt that the Petroleum Products Marketing Company (PPMC) summoned the meet-ing where top members of MO-MAN attended to discuss with the top management of NNPC, including Dr. Maikanti Baru, the Corporation’s Group Managing Director, who was personally in attendance at the Congress Hall of the Transcorp Hilton Hotel, where concerns about subsidy removal on refined petroleum products, its possible econom-ic benefits, as well as eventual consequences for the masses of Nigeria were discussed.

However, while some groups favour full deregulation and subsidy removal, citing market autonomy and sustainability, others fear that such a move could result in total economic chaos and should not be tried, or should be attempted only with extreme care.

Amid speculations of subsidy removal, consumers have al-ready started engaging in panic buying, with marketers alleged-ly hoarding the product. Both actions can be attributed as the reasons for long queues that are building in virtually all the filling stations in the country.

NNPC had said that landing cost of fuel now stands at N180 per litre,  but industry sources told  Valuechain  that some pri-vate depot owners are selling petrol (PMS) to marketers at between N137.50k and N139 per litre, as against the official ex-depot price of N 133.28.

According to Debo Ahmed, Chairman, Independent Petro-leum Marketers Association of Nigeria (IPMAN) South West chapter, it is incumbent upon the government to intervene and save the citizenry from un-told hardship.

In his words, “government should urgently arrest the situ-ation before it goes out of hand, because they are aware of the

As the price of oil rose from 2017, there were more calls and increased pressure on the Nigerian government to cut the subsidies or raise fuel prices, but that did not hap-pen probably because either of the two options represented harmful choices to the ruling party’s chances of re-elec-tion. However now that the elections have been won, there may be a possibility that subsidies would be removed and oil prices may shoot up nationwide.

28

Cover Story 04:19

hike in price by depot owners.“It is not possible for market-

ers to buy petrol above ex-depot price and still sell it at official pump price of N145.  It will defi-nitely affect our margin.  I urge DPR to stand up to its respon-sibility to sanction any depot owner who increases the price of petrol. “Government gave the depot owners product and they should explain why they are sell-ing above ex-depot price; ours is to buy and sell at official price but if it is sold to us above offi-cial price, we will also sell above the pump price.

“We don’t want to sell above the official pump price and that is why we are urging govern-ment to do something about it and make the product abun-dantly available. “They should monitor private depot owners to make sure they don’t sell above the official ex-depot price of N133.28,’’ he said. 

Sensing that the hullabaloo about depot price increase is a ploy by the government to increase the pump price by re-moving fuel subsidy, the Nigeri-an Labour Congress (NLC) has advised the government to jetti-son the idea.

The General Secretary of the NLC, Peter Ozo-Eson, said the position of the NLC was unam-biguous on the issue of fuel sub-sidy, explaining that the solution to the issue was to make the na-tion’s refineries functioning. He added that the NLC President, Ayuba Wabba, had addressed the issue on numerous occa-sions.

Ozo-Eson said that “on this issue, we are already on the public domain. We are opposed to the removal of fuel subsidy. What needed to be done is for the refineries to be fixed. If Nige-ria stops the continuous impor-tation of fuel, this matter will be addressed. But clearly, we are opposed to the removal of fuel subsidy. NLC President has also made clear statements about this matter.”

Although the speculations about subsidy removal still lin-gers, the timeline about when likely to completely deregulate the downstream sector of the Nigerian petroleum economy is still unknown.

  While the IMF called for ur-gent action on this matter, the federal government and the global financial institution dif-

fered on timelines.The Nigerian Minister of Fi-

nance, Mrs. Zainab Ahmed, re-cently refuted media reports that the Federal Government had agreed with the Internation-al Monetary Fund’s (IMF) advice on the removal of fuel subsidy.

The Minister stated this when she fielded questions from State House correspondents after the meeting of the Federal Executive Council (FEC) which was chaired by President Mu-hammadu Buhari.

She said that the government could only remove subsidy on fuel after having enough buffers to cushion the negative effects of the removal on ordinary citi-zens.

“Let me say that last week when we had the IMF/World Bank meeting, there was just one interactive session with Ni-gerian journalists.

“We didn’t have any session to discuss subsidy. It was in an interview that someone raised a question based on the Article 4 Report of the IMF.

“What they asked was wheth-er we were going to remove fuel subsidy and whether we agreed with the IMF’s conclusion on

Christine Lagarde, International Monetary Fund (IMF)Tony Elumelu

29

Cover Story 04:19

subsidy removal.“So, let me say that every-

where in the world where IMF does its review, it will always give advice because that’s the purpose of the review.

“And their advice is when you give subsidy – whether it is fuel or power, their advice is always ‘look at how you can exit doing that’. And that’s the same ad-vice they gave Nigeria.

“So, when I was asked, I said we agreed with that advice. We need to find how we can exit fuel subsidy. But how do we do that?

“We do that only when we have enough buffers to cushion the effects of the removal for our people.

“It is up to the Executive in support with the legislature to agree on what those buffers are,’’ she added.

The minister maintained that even though the government periodically discussed the issue of subsidy under the Econom-ic Management Team, it never contemplated removing the subsidy.

“We should not be contem-plating removing the subsidy because, indeed when we do, there will be people that will suf-fer. So, we are not yet there.

“We discussed this periodi-cally under the Economic Man-agement Team. But we still hav-en’t found a formula that works

for Nigeria. And you know that Nigeria is unique. What works for Ghana might not work here.

One industry expert, who spoke with  Valuechain  on the condition of anonymity, stat-ed that if fully deregulated, the price of petrol in Nigeria will not be less than N230 per li-tre, although latest figures from PPPRA put the possible fully de-regulated price of petrol in Nige-ria at N205 per litre.

Valuechain  learnt that after the signing of the Minimum Wage bill into law by President Muhammadu Buhari, plans were underway to fully deregu-late the price of petrol or PMS.

But the number of people covered by government work or salaries in Nigeria is far less than 50 percent of the entire population.

According to the Nigerian Bu-reau of Statistics (NBS), the re-tirement savings account (RSA) membership distribution data for Q4 2016, which covers both the public and private sectors, has just over 69 million people.

 The data show that 7,348,028 workers are registered under the pension scheme out of a total working population of 69,470,091 as at Q4 2016, rep-resenting 10.8% of the total working population.  

This is not surprising given the largely informal structure of the Nigerian labor force, with

about 50% of the current work-force  engaged in subsistence agriculture and informal trad-ing. Micro businesses,  for ex-ample, account for over 90% of total Micro, Small and Medium Scale Enterprises in Nigeria. 

According to data available to Valuechain which was sourced from Federal Road Safety Corps, about 60 to 65 percent of vehicles plying the Nigerian roads are for commercial pur-poses. Government has been known to previously intervene in expanding its transport sec-tor’s capacity through mass transit schemes involving the deployment of buses, using public-private partnerships, to ease transportation costs and promote freer movement for business and economic expan-sion.

Through the Federal Urban Mass Transit Agency (FUMTA), SURE-P and other schemes, the government has tried in alleviat-ing the suffering of its masses in the past.

However, it is not clear whether these options are be-ing considered at the moment, as the issue of complete subsi-dy removal on PMS and its full price deregulation progressively gains traction and attention and assumes center stage.

With the speculations of pos-sible fuel price increase upon full price deregulation, fuel sta-

If you do not want Nigeria to take China loan, provide the alternative. Like I keep saying they should also support the development of entrepreneurs, they should look at ways to help us eradicate poverty in a manner that is sustain-able.“For me, one of the surest ways to eradicate poverty is to ensure that our youths are gainfully employed through entrepreneurship.

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tions are being crowded by mo-torists due to long queues often associated with product hoard-ing by filling station owners and panic buying by motorists, thus portending an imminent energy crisis across Nigeria.

Valuechain  learnt from eye-witnesses that the filling sta-tions along the Lagos-Ibadan Expressway are hoarding fuel against the expected removal of fuel subsidy.

In the Nigerian capital city of Abuja, hundreds of motor-ists were found forming long queues in front of filling sta-tions starting from April 7, 2019 to buy petrol, as Premium Motor Spirit (PMS), is popularly called in the country.

IMF’s recent report to deregu-late the nation’s oil market was based on its assumptions that the country needs more mon-ey to put into the development critical infrastructure, such as railways, pipelines, refineries, roads, storage facilities, and many others that serve as the backbone of economic develop-ment.

Nigeria has sought capital from many sources for these projects, including a loan from China, to build the rail system

in the country but the IMF has been known to criticize this deal, describing it as a debt trap.

However, the Chairman of Heir Holdings, Tony Elume-lu has asked the International Monetary Fund (IMF) to provide other alternatives, following its warning to Nigeria to avoid loans from China.

Financial Counsellor and Di-rector of the IMF’s Monetary and Capital Markets Depart-ment, Mr. Tobias Adrian, during the launch of the Global Finan-cial Stability Report for April in this month at the IMF/World Bank meetings in Washington D.C, United states of America warned countries to make sure that when they borrow from abroad the terms are favourable. “In particular, we recommend that loans to countries should conform to Paris Club arrange-ments and that is not always the case of loans from China,” the IMF chief said.

But Elumelu disagreed with IMF advice, saying nature ab-hors vacuum and so the IMF, World Bank and other develop-ment partners to provide alter-natives that will create jobs.

Elumelu, who was on a pri-vate visit to the State House,

said “my position is that nature abhors vacuum.

“If you do not want Nigeria to take China loan, provide the alternative. Like I keep saying they should also support the development of entrepreneurs, they should look at ways to help us eradicate poverty in a man-ner that is sustainable.

“For me, one of the surest ways to eradicate poverty is to ensure that our youths are gain-fully employed through entre-preneurship.

“Also to make sure that devel-opment agencies – IMF, World Bank and co help and support Nigeria to improve on her infra-structure, road transportation, access to electricity.

“These are things that will help us improve on security in Nigeria. These are things that will help us increase prosperity through employment which is the most important thing. So, the advice is good but nature abhors vacuum.”

The leadership of the Nigeria Union of Petroleum and Natu-ral Gas Workers (NUPENG) and the Petroleum and Natural Gas Senior Staff Association (PEN-GASSAN) also said it read with serious concerns and worries

Cover Story 04:19

In the new subsidy structure under President Bu-hari’s government, instead of paying subsidies to indepen-dent importers, including some IOCs, as was the case un-der previous administrations in Nigeria, the government’s new policy has made the national oil company, the Nige-rian National Petroleum Corporation (NNPC), to be-come the sole importer, which is responsible for all refined fuel imports into the country.

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the reported statement made by the International Monetary Fund (IMF) official on the state of the Nigerian economy and the unsolicited poisonous ad-vice on further recovery of the nation’s economy.

In a statement signed by Comrade Afolabi Olawale, Gen-eral Secretary of NUPENG, and Comrade Okungbawa Lumum-ba, General Secretary of PEN-GASSAN, the two unions said the statement of IMF has creat-ed panic in the country with as-sociated hoarding of petroleum products, panic buying, sky-rocketed prices of goods and services in the country.

They claimed that clearly, IMF is speaking from the two sides of its mouth, in one breath, as it praises the significant progress the nation has made in terms of its Gross Domestic Product (GDP) that increased by 1.9% in 2018 from 0.8% in 2017 on the back of improvement in man-ufacturing and other econom-ic policies of the government, while on the other hand, offer-ing poisonous advice on further economic recovery. 

“It is quite bewildering and

baffling that IMF is not con-sidering the pains and agonies Nigerians went through even to achieve the acknowledged gains of 2018, with almost two-thirds of the world’s hungriest people among the Nigerians.

“One wonders why IMF is still callously and wickedly advising the government to inflict more pains and harms on the peo-ple?  Imposing more stringent reforms in domestic revenue mobilization including amongst other increase in VAT and secur-ing more domestic oil revenues through subsidy removal at this time is clearly an attempt to de-stabilize the nation.

“This statement is embel-lished and loaded with poison, considering the antecedents of IMF in our economic challeng-es and struggles over decades of our nationhood. The various devaluation of our currency on the strength of advice of same IMF has been a very big burden on our nation for several years now.

“The leadership of NUPENG and PENGASSAN are aware of what Nigerians are going through, we empathize with

them and will not turn blind eyes to any further attempt to increase their pains and impov-erish them further.

“May we put it clearly here, that we profoundly appreciate the efforts, commitment and determination of the govern-ment of President Muhammadu Buhari to put Nigeria in the right economic stead after several years of economic maladmin-istration and mismanagement? It is really heartwarming that these efforts are being wide-ly acknowledged at home as demonstrated with his re-elec-tion for 2nd term in office and globally, even by the IMF.

“Nevertheless, we earnestly plead with President Muham-madu Buhari to constantly put in mind the current hardship Ni-gerians are going through in our collective journey to economic recovery.

Be it known that any econom-ic policy that is devoid of human feelings could lead to more so-cial dislocations and upheavals which, in the long run, could be-come counterproductive as we are currently experiencing.”

Comrade Afolabi Olawale, General Secretary NUPENG Comrade Okungbawa Lumumba, Gen. Sec. PENGASSAN

Cover Story 04:19

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trading in crude and refined products. H.E Khalid Al Falih also reiterated the possibility of establishing an independent refinery in Nigeria as the country considers Nigeria as the best hub to reach other African countries.

Nigeria and Saudi Arabia has over the decades enjoyed a robust bilateral relationship with the Nigerian delegation to the holy land pilgrimage among the highest globally amidst the common heritage of being abundantly blessed with oil and gas deposits. Nigeria’s Dr. Kachikwu has expressed his expectation that the definite signing of the MoU will further cement the cordial relationship between both Nations. He stated that the visit to Saudi Arabia became necessary due to the common grounds between the two countries and the success of the country in the oil and gas sector. Dr. Kachikwu disclosed that Nigeria aims to leverage on the huge success of the Saudi Government in the sector while namechecking Saudi Aramco’s turnover of over $200 Billion in the last year. He further applauded the cooperation between Nigeria and Saudi Arabia at the highest global level of OPEC while expressing his excitement that the two lead persons for the MoU drafting are seasoned OPEC Governors with the highest levels of competence.

Dr. Kachikwu who led a high powered delegation drawn from the Ministry of Petroleum Resources, Nigerian National Petroleum Corporation (NNPC), Department of Petroleum Resources, Petroleum Products Pricing Regulatory Agency and Petroleum Equalization Fund for an exploratory visit to the Oil rich Nation at the invitation of his Saudi counterpart, H.E. Khalid Al Falih, visited the Saudi Aramco Headquarters in Dhahran where his delegation was met by the President and Chief Executive

Officer of Saudi Aramco, Amin H. Nasser and the top management of the conglomerate. The visit was aimed at crystallizing the ongoing discussions on collaborating with the Federal Government of Nigeria on investments in the oil and gas sector. It also provided an opportunity for a close observation of Saudi Aramco’s Command Center, the Oil Supply, Planning and Scheduling Centre and the Geosteering Operations Center in the Exploration and Petroleum Engineering Center (EXPEC).

Dr. Kachikwu also visited the Jubail Industrial City where the President of the Royal Commission for Jubail and Yanbu (RCJY), Eng. Abdullah bin Ibrahim Al-Saadan and his strategic team took the Minister on a tour of the gigantic project complex. Dr. Kachikwu had expressed his anticipation for a replication of the innovative project in the ongoing Oil and Gas Industrial Park in Nigeria as announced by the Nigerian Content Development and Monitoring Board (NCDMB).

Dr. Kachikwu further visited the Saudi Basic Industries Corporation (SABIC) and was received by the Chief Executive Officer and Vice Chairman, Yousef A. Al-Benyan who was represented by the Executive Vice President of Petrochemicals, Abdulrahman S. Al-Fageeh. The visit presented an opportunity for the Chief Operating Officer, Refineries and Petrochemicals of NNPC, Mr. Anibor Kragha and the Senior Technical Adviser to Nigeria’s Petroleum Minister on Refineries and Downstream Infrastructure, Mr. Rabiu Suleiman to deep dive into issues of shared interest with SABIC.

At the National Industrial Development and Logistics Program (NIDLP) Centre, considered to be the most ambitious, innovative and most impactful program under Saudi’s

Vision 2030, Dr. Kachikwu was intimated that the core objective of the Program is to position Saudi Arabia to become Global leaders in the areas of Mining, Energy, Logistics and Industry. The NIDLP incubated 100 Light House project amongst other high value Saudization schemes keenly reflected the bold ambitions of the #Project100 ideated by Dr. Kachikwu and incubated by the NCDMB was highlighted as a shared interest for both Nations. This further formed the foundation for the NCDMB boss, Engr. Wabote Simbi to firm up plans for a proposed technical working visit to the NIDLP Centre.

Dr. Kachikwu also visited the King Abdullah Petroleum Studies and Research Center (KAPSARC) were he was received by the President, Adam Sieminski who was represented by the Vice President, Finance and Operations, Dr. Mansoor Al-Mansoor and hosted to a networking lunch amidst high powered conversations steeped on the utility of research, innovation and development. The delegation subsequently went on a guided tour of Saudi Aramco’s Riyadh Refinery at the instance of the Minister of Energy, Industry and Mineral Resources of the Kingdom of Saudi Arabia, H.E. Khalid bin Abdulaziz Al-Falih.

The high powered visit had its fair share of offering the Nigerian Delegation an experience of the famed Saudi hospitality and warmth as they were hosted to separate dinner events by both the Energy Minister of Saudi Arabia and the Minister of Finance of Saudi, H.E. Mohammed Al-Jadaan while the Nigerian Ambassador to Saudi Arabia, H.E. Isa Muhammad Dodo ensured that his highest assurances to follow up on all agreements where communicated.

Continued from page 13

Industry 04:19

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Industry 04:19

The Nigerian government has now devised and put in place a market-based in-

strument in the form of a gas flare commercialization programme, with the aim of eliminating gas flaring by oil-producing compa-nies in the oil-producing region of the country.

According to Valuechain find-ings, Nigeria will award contracts for harnessing and commercial-izing its flared gas by the third quarter of 2019, even as the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, has expressed confidence and optimism that the country had already eliminated 75 percent of flared gas and remains on track to eliminating gas flaring entirely by the year 2020.

He said “it was in recognition that flared gas could be har-nessed to stimulate economic growth, drive investments and provide jobs in oil producing communities and indeed for Ni-gerians through the utilization of widely available innovative technologies, that the Federal

Executive Council in June 2016 approved the Nigerian Gas Flare Commercialization Programme (NGFCP).”

With this, the African largest economy may well be just the closest as it has ever been to fi-nally ending the dangerous prac-tice by oil companies which, for years, has devastated the envi-ronment and means of livelihood of local populations.

Gas flaring is the practice of openly burning off associated gas that comes together with crude oil during the drilling and pumping processes of produc-tion.

The World Bank has been ac-tively in the forefront of promot-ing a globally targeted deadline to end gas flare-out by 2030, but Nigeria has a national target that seeks to end the economically unsustainable and environmen-tally damaging practice in 2020, about 10 years earlier.

This will reverse a prolonged negative economic trend of 22 million tonnes of carbon dioxide that Nigeria emits yearly. Accord-

ing to data sourced by Valuec-hain from NGFCP, the country loses approximately $500 million in emission credit value.

This amount of gas, if har-nessed, could power two to three liquefied natural gas trains and if used for power, we could gener-ate around 3,000 megawatts of electricity.

Additionally, the gas could be put to good use and potentially displace other fuels such as coal and diesel that generate high-er carbon emissions per energy unit and are not as clean as gas.

The Nigerian Gas Flare Com-mercialization Programme (NG-FCP) was launched in 2016 for this purpose and to hold oil companies that have been using the uneconomical option for de-cades and, in the process, paying meager penalties to the govern-ment instead of developing a structure to capture the gas and make it commercially useful.

Oil companies in Nigeria pro-duce over 4 billion standard cu-bic feet of gas per day, but gov-ernment figures say nearly 80

Nigeria to Beat Global Target on Gas Flaring 10 years Earlier

–By Yange Ikyaa

34

Industry 04:19

per cent of the associated gas produced by the oil companies is currently utilized, with the rest re-injected into the earth to increase well pressure or sim-ply for disposal. The companies contend that setting up gas har-nessing, processing, storage, transportation and marketing infrastructure would be more ex-pensive than wasting it in flares.

Approximately 700 million standard cubic feet of gas is burnt in the open daily at 178 sites, causing tons of carbon di-oxide to be emitted into the at-mosphere, a gas globally blamed as a key contributor to global warming and climate change.

The government’s deadlines to stop gas flaring have been re-peatedly shifted since the 1960s, but Ibe Kachikwu, the Minister of State for Petroleum, insists the 2020 deadline would be met.

In 2016, Kackikwu launched the Nigeria Gas Flare Commer-cialisation Programme for the first time to involve third-party investors or off-takers, leverag-ing on one of Nigeria’s petroleum laws that empower the Minister of Petroleum Resources to take flared gas and get it profitably commercialized.

Valuechain learnt through data from the Department of Petro-leum Resources (DPR) that over 800 expressions of interest have been received and 226 have been confirmed to have paid the mini-mum required fees of 1000 dol-lars each.

According to the minister, “by 2020, issues of gas flare won’t just be issues of penalty, they

will be license to operate issues, and there is a sudden realization from multinationals operating in Nigeria who previously said it was not profit to commercial-ize gas that we are serious and they quickly put together bids ex-pressing interest to participate in the gas flare commercialization programme.”

In order to qualify for partici-pation in this programme, inter-ested firms must demonstrate the technical capacity for the de-sign, construction, operation and maintenance of gas utilization.

“In addition, each applicant is expected to show demonstrable project development experience; demonstrable previous experi-ence in either owning or operat-ing gas to power, gas to liquids, gas processing and/or transpor-tation, or similar projects, as well as proven technology in com-mercial application.”

It is also expected that, for financial capacity, a willing par-ticipant must show a net worth of $5 million and must not be on the debarred lists of Nigeria’s an-ti-graft agencies, World Bank or the US Treasury Office Control list.

The Federal Government is currently working on a piece of legislation, through the Depart-ment of Petroleum Resources (DPR), to compel petroleum product marketers to set up gas filling plants in all their petrol sta-tions across the country.

This directive is aimed at deep-ening the use of LPG across the country, in addition to promoting the issue of clean energy, as well

creating employment opportuni-ties.

The regulation is expected to increase cooking gas selling points across the country by about 10,000 or about the same number of filling stations in Nige-ria.

Also, the Federal Government, through the Ministry of Petro-leum Resources, is already work-ing with stakeholders across the LPG value chain, and has set a target to build at least one gas fill-ing plant across all the 774 local government areas in the country within the next three years.

In furtherance of this initiative, the ministry has engaged LPG cylinder manufacturers and is encouraging them through spe-cial funding and other incentives to increase their production ca-pacity, especially as this is criti-cal to LPG penetration.

Kachikwu said “we are work-ing with the LPG cylinder man-ufacturers. We are giving them strong presidential backed in-centives to enable them produce LPG cylinders in this country. About four of them are getting fa-cilities from the Nigerian Content Development Monitoring Board (NCMBD), and they are getting import exemption for materials to be assembled for the plants.

“The Federal Government’s Gas Policy is further to ensure that FG takes measures to devel-op flare capture and utilization projects, that collaborations are made with industry, develop-ment partners to provide flare capture technologies and third party investors.”

The World Bank has been actively in the forefront of promoting a globally targeted deadline to end gas flare-out by 2030, but Nigeria has a national target that seeks to end the economically unsustainable and environmentally damaging practice in 2020, about 10 years earlier.

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Industry 04:19

In terms of the Nigerian Gas Flare Commercialization Pro-gramme (NGFCP), the Minister described the enactment and ap-proval of the Flare Gas (Preven-tion of Waste and Pollution) Reg-ulations (2008) and the signing of the Regulations by President Muhammadu Buhari on 5th July, 2018 as a “key accomplishment, which is historic and record breaking.”

The occasion was also used to unveil the NGFCP Ministerial Steering Committee, as well as the Programme Management Office (PMO) as additional stag-es in the evolution of the NGFCP. Furthermore, the minister has approved additional guidelines to support the Regulations underly-ing this initiative.

The Ministerial Steering Com-mittee and the PMO have been directed by the Minister to ac-tivate the NGFCP Community Awareness and Sensitization/Participation Plan (CASP) to en-sure widespread, ongoing and meaningful sensitization and participation of key stakeholders in the Niger Delta Communities.

The Proposal Evaluation Com-mittee (PEC) for the NGFCP has been inaugurated to include

members from the Ministry of Petroleum Resources (MPR), the Department of Petroleum Resources (DPR) and Nigerian National Petroleum Corporation (NNPC).

The PEC membership, the Minister disclosed, includes three nominees of the United States Agency for International Development (USAID) Advisory Team, three from the Nigerian Extractive Industry Transpar-ency Initiative (NEITI), and two member nominees from Oil Pro-ducers Trade Section (OPTS) as Independent observer groups (IOG).

PEC is to evaluate the sub-mission of qualifications and determine which applicants are qualified. The body will also eval-uate the proposals submitted by qualified applicants in line with the criteria of the Request for Proposal package.

The Petroleum Trust Develop-ment Fund (PTDF) is expected to join the Nigerian Gas Flare Com-mercialization Programme in a Joint Implementation Commit-tee, which is to build partnerships and competence development framework for the programme.

According to the minister, “the

Nigerian Gas Flare Commercial-ization Programme, when fully consummated, will lead to signif-icant social and economic ben-efits to host communities in the Niger Delta, to investors, and to the nation’s economy.

“From it, pollutions in the local Niger Delta communities will be curbed; households will be pro-vided with clean energy; partic-ularly Liquefied Petroleum Gas (LPG) for cooking; jobs will be created for small and medium scale business men who are in the value chain for gas; gas-to-power generation for electricity will be enhanced; as well, there will be gas to petrochemicals – fertilizers, poly propylene, poly ethylene, methanol, and others. Perhaps the greatest of the gains will be the alleviation of social unrest in the Niger Delta region.”

Consistent with Nigeria’s com-mitments to the reduction of greenhouse gas under the Par-is Climate Change Agreement, the gas commercialization pro-gramme will reduce Nigeria’s carbon dioxide emissions by approximately 13 million tonnes per year, which could be mone-tized under an emissions credit or carbon sale programme.

President Muhammadu Buhari Ibe Kachikwu

Industry 04:19

“NGFCP is the first mar-ket-driven programme undertak-en on this scale globally, which means bidders will have flexibil-ity of choosing which flare sites to bid for, the gas price, and the end market or gas product as well as the technology to be used,” according to Justice Dere-faka, National Programme Man-ager, NGFCP.

It is expected that NGFCP will attract about $3.5bn worth of in-vestments into the country. As Derefaka said “the benefit from this are huge, ranging from an overall investment of around $3 billion to $3.5 billion, a potential annual revenue and Gross Do-mestic Product impact of around $1 billion.

“Assuming an average project size ranging from $10 million to $40 million, NGFCP has a poten-tial of triggering 70 to 89 proj-ects, and over a one-and-a-half to a two-year period, NGFCP could generate approximately 300,000 direct and indirect jobs.

“Once operational, projects launched under the NCFCP will reduce Nigeria’s emissions by 13 million tonnes of carbon dioxide per year. Don’t forget, the NG-FCP can become an important source of additional gas for the power sector.”

It has been proven that global energy demand will nearly dou-

ble by 2050, and that most of the increase will come from the world’s emerging economies as a result of population growth and improved standards of living.

The NGFCP is expected to play an important role in meeting this energy challenge by harnessing Nigeria’s flare gas for sustain-able value and wealth creation.

This is because Nigeria has the ninth largest gas reserves in the world, with proven reserves of 199 trillion cubic feet, but a significant volume of associated gas is currently being flared, a tremendous waste of a commer-cial natural resource and fuel and a contribution to climate change.

In 2017, Nigeria ranked sev-enth place in the league of gas flaring nations, with approxi-mately 888 million standard cu-bic feet per day from over 178 flare sites out of the more than 16,000 flare sites in 90 countries globally. Lost revenue from the flared associated gas is approx-imately $1 billion annually.

Recent efforts by the Feder-al Government to end gas flar-ing by 2020 show strong policy approach and political will to harness these gas resources. In addition to the ratification of the Paris Climate Change Agree-ment, the Federal Government has also endorsed the World Bank’s Zero Routine Flaring by

2030 Initiative and established the NGFCP.

The gas commercialization programme seeks to provide a framework to eliminate gas flaring through technically and commercially sustainable gas utilization projects developed by competent third-party investors who are being invited to partici-pate in a competitive and trans-parent bid process.

It also examines the recently gazetted Flare Gas (Prevention of Waste and Pollution) Regula-tions 2018, the legal basis for the implementation of the NGFCP and the payment regime (penal-ties) for gas flaring, which adopts the ‘polluter pays’ principle, simi-lar to a carbon tax.

The results of work done to trigger up to 85 projects that will utilize flared gas, generate ap-proximately 300,000 direct and indirect jobs and annual revenue generation/GDP impact estimat-ed at $1 billion/annum are also highlighted.

So, the NGFCP has been de-signed as the contribution of the petroleum sector to Nigeria’s In-tended Nationally Determined Contributions under the Paris Agreement and it is the first mar-ket driven programme undertak-en on this scale globally, making it a high impact programme.

From it, pollutions in the local Niger Delta communi-ties will be curbed; households will be provided with clean energy; particularly Liquefied Petroleum Gas (LPG) for cooking; jobs will be created for small and medium scale business men who are in the value chain for gas; gas-to-power generation for electricity will be enhanced; as well, there will be gas to petrochemicals – fertilizers, poly pro-pylene, poly ethylene, methanol, and others. Perhaps the greatest of the gains will be the alleviation of social unrest in the Niger Delta region.

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Azman Air Services Limited is a Kano, Nigeria, based domestic airline company.

Established in 2010 by business-man Abdulmunaf Yunusa Sarina, the airline operates scheduled domestic passenger services with its main base in Mallam Aminu Kano International Air-port, Kano.

Azman Air began operations in 2014 with its fi rst commercial flight to Nnamdi Azikiwe Inter-national Airport on 15 May 2014 from Kano. The airline began op-erations in Nigeria with 2 Boeing 737-500 aircraft for its domestic services.

In October 2017, Azman Air leased a used Airbus A330 from an Egyptian charter airline (Air Leisure) which was used mainly to fly international route across the Middle East and Asia.

Azman Air is one of the fastest growing privately owned Nigeri-an Airline as at today. The Airline has dominated local and inter-national carriers in providing af-

fordable and comfortable flights to different destinations within and outside Nigeria. Azman Air is focused on offering world class aviation services, good custom-er relations, effective online ser-vices and operational compe-tence in relation to punctuality and Safety.

Also, in her determination to meet the highest global aviation safety standards, Azman Air has commenced an Implementation

Training Initiative as part of the preliminary process to prepare for the IATA Operational Safety Audit (IOSA). The Airline is reso-lute in adhering to globally rec-ognized safety standards and it is consistently reviewing its products and services to offer better solutions aimed at pas-sengers’ comfort, safety as well as striving to build long-lasting relationships. From her various hubs within the Country, Azman Air currently operates return flights domestically from Lagos to Kano, Abuja, Kaduna, Kebbi, Gombe, Yola, Maiduguri and Port Harcourt. Also from Abuja to Kano, Kebbi, Lagos, Maiduguri, Gombe, Yola and Portharcourt. As well as Kano to Kebbi, Lagos, Abuja.

Next time you are travelling any destination that is within their coverage, do fly Azman Air and enjoy a smooth flight full of comfort.

Below is a tweet by a happy customer;

The Unbeatable Azman Air Flying Experience

By Danlami Nasir Isah

Aviation 03:19

Abdulmunaf Y. Sarina, CEO Azman Air

Reposted from @tosinbobo - Appreciate the little things in life. Because there are plenty... Honestly I enjoyed my flight trip with @airazman today. Special thanks to @lucysam0000 @precioussumaj @i_am_beautifulamii Captain Raymond and fi rst offi cer Jubril. The Takeoff, inflight services and landing was very smooth. You all deserve some accolades.

38

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Industry 04:19

Axxela Inaugurates Greater Lagos IV Gas Pipeline Network

Axxela Limited has officially commissioned its Greater La-gos IV (GLIV) gas pipeline net-work and the newly renovated Elegbata Sports Complex.

Stakeholders Call For ‘Co-Location Strategy’ To Unlock Nigeria’s Gas Potentials

Stakeholders in Nigeria’s oil and gas sector have urged the Federal Government to adopt the co-location strategy to un-lock huge potentials in the coun-try’s gas sector.

‘We Won’t Stop Until We Discover Oil In The North’ —GMD NNPC

Group Managing Director of the Nigeria National Petro-leum Corporation, (NNPC), Dr. Maikanti Baru, has said oil ex-ploration in the North would continue until the commodity is found.

Shell Plans $15bn Investment In Nigeria

Shell Petroleum Development Company of Nigeria (SPDC) has said it prepared an investment portfolio of $15 billion in the country over the next 5 years.

Forte Oil: Cost Of Operation Reduces Profits

Forte Oil Plc in its audited fi-nancial statements for the year ended December 31, 2018 to the Nigerian Stock Exchange (NSE) recorded an increase in cost of operations that impacted nega-tively on profitability.

N205bn Worth Of Petroleum Products Lost To Vandals In 10 Years -Report

Between 2008 and 2017, Ni-geria lost a total of N205.4 bil-lion worth of petroleum prod-ucts to vandals who hacked into petroleum products pipelines of the Nigerian National Petroleum Corporation (NNPC), a report from the state-run oil company has disclosed.

Bonny Light Hits $71.74pb…To leap further on Libya, other crises

The price of Bonny Light, Ni-geria’s premium oil grade has risen from $70 to $71.74 per barrel in the international mar-ket, the highest in 2019, as the Organisation of Petroleum Ex-porting Countries, OPEC, con-tinue to eliminate excess supply from the volatile market.

Marketers Warn Against Imminent Petrol Scarcity

The Independent Petroleum Marketers Association of Nige-ria (IPMAN), this month, raised the alarm over the fear of loom-ing fuel scarcity.

FG Revokes Seven Oil Block Licences

The Nigerian government has approved the request to revoke the licences of six Oil Mining Leases (OMLs) and one oil pros-pecting lease (OPL), in the on-shore, shallow water and deep-water Niger Delta basin.

FAAC Disburses N619.86bn In March …As Delta Maintains Top Spot

The Federation Account Allo-cation Committee (FAAC) dis-

bursed the sum of N619.86bn to the three tiers of government in March 2019.

This is revealed in the latest FAAC report released by the National Bureau of Statistics (NBS).

Kachikwu Blames Return Of Fuel Queues On Logistics Gap

The Minister of State for Pe-troleum Resources, Ibe Kachik-wu, recently in Lagos, said queues at filling stations has nothing to do with petrol sup-ply scarcity but as a result of logistics challenges and urged the public to ignore rumours of planned upward review of pump price of Premium Motor Spirit (PMS) also called petrol.

Petrol Landing Cost Now N180 Per Litre, Says Kachikwu

The landing cost of Premium Motor Spirit, also known as pet-rol, is N35 higher than the pump price of N145 per litre, the Min-ister of State for Petroleum Re-sources, Dr Ibe Kachikwu, said on Tuesday. The minister further said attempt to remove subsidy

APRIL SHORT TAKES–Compiled By Saidu Abubakar

Mohammed Bello Adoke

40

Industry 04:19

must be well-being managed.

You Can’t Prosecute Me For Executing Jonathan’s Order – Adoke

The embattled former Attor-ney-General of the Federation (AGF) and Minister of Justice under the administration of President Goodluck Jonathan, Mohammed Bello Adoke has said that he cannot be held re-sponsible for carrying out pres-idential directives while he was a minister.

DPR Warns Marketers Against Fuel Price Hike, Hoarding During Easter

The Department of Petroleum Resources (DPR) Field Office in Enugu says petroleum mar-keters who sell products above government approved prices risk having their stations sealed.

Easter: DPR Sanctions 10 Filling Stations For Selling Petrol Above N145 Per Litre

The Department of Petroleum Resources says it has sanc-tioned 10 filling stations caught dispensing fuel above N145 per litre government approved price in Rivers.

Nigeria Loses N995.2b To Oil Theft Annually

With the country losing over N995.2 billion annually due to oil theft, the economy is doomed, New Nigeria Foundation (NNF), a nongovernmental organisa-tion has said.

Golden Energy Secures New Platform Supplier Contract From Shell Nigeria

Golden Energy Offshore (GEO) said that the Energy Scout PSV had entered into a spot con-tract with Shell Nigeria Explora-tion and Production Company (SNEPCO) on January 19, 2019.

FG Begins Payment Of N112b Subsidy Debt To Marketers

…Opens talk on 2nd tranche with MOMAN, others

The Central Bank of Nigeria (CBN) has begun process for the payment of N112 billion sec-ond tranche of subsidy debts to major oil marketers through a promissory note, New Tele-graph has learnt.

Subsidy Removal Will Raise Inflation By 69% —Experts

Nigerians faced one of their most difficult questions of the future recently when the issue of subsidy removal dominat-ed discussions. Minister of Fi-nance, Mrs. Zainab Ahmed had

said in Washington DC, U.S.A that the country was disposed to removing subsidy on fuel following concerns by the IMF/World Bank against its contin-uation because of the huge re-sources going into it.

Why We Suspended Investment In Refinery In Nigeria – Petrocam

Petrocam Nigeria Limited, an arm of Petroleum International, a South African based oil trad-ing firm, is putting its intend to build refinery in Nigeria on hold because the environment is not profitable enough to guarantee it requisite return on investment.

Buhari woos Qatar over investments in refineries, power, economy

President Muhammadu Bu-hari has asked Qatar to invest in Nigeria’s refineries, power, econ-omy and other sectors as he attempts to improve bilateral re-lations between both countries.

The President played host to the Emir of Qatar, His Highness Sheikh Tamim bin Hamad Al-Thani, at State House, Abuja.

Fuel theft in Nigeria

President Buhari and Emir of Qatar, HH Sheikh Tamim bin Hamad Al-Thani inspecting Guard of Honour parade

41

Column 04:19

The movie premiere for Lola Akindoju’s Political drama, the 4th Repub-

lic was all planned and well thought of, a fantastic evening for movie and politics lovers. The movie premiere took place at the Royal Hall on the 6th floor at Dunes Centre on the 11th of April and the dress code for the event was: ’Your Excellency’ [What would you wear to your inauguration?], which I thought was very cool and creative. The whole set up oozed creativity as the first point of contact ush-ering guests into the hall were dressed in the National Youth Service Corp uniform (NYSC). Before entering the Hall, the Youth coppers asked guests to fill out a survey in format of a ballot paper and insert into a 4th Republic ballot box.

The perimeter had great aes-thetics and on entering the hall, you will immediately sense its special intimate atmosphere. However once you had a seat,

if you were sitting towards the back, you were bound to have someone’s head blocking you. If you were unfortunate to be sitting behind someone who really took the dress code seri-ously by wearing an extravagant head piece or ‘Gogoro’ then I pity you. At some point the seats felt uncomfortable as well. Was the royal hall a lovely space for a premiere? Yes. Was the hall the best place for a movie premiere? Maybe if they had bleacher, those sitting behind wouldn’t have had to struggle to view the screen. There was one pop-corn machine inside the hall where guests queued up for a bit be-fore the movie started. The ma-chine was very slow, wish they had at least 4 machines would have saved viewer from having to wait that long.

All the stars were present for the perimeter Kate Henshaw, who took the lead role playing Mabel King, aspiring to be the first governor in Nigeria but her

character gets caught up heav-ily in election malpractice. Co-stars included Eyinna Nwigwe, Bimbo Manuel, Linda Ejiofor, Yakubu Mohammed and Sani Mu’azu. The film was written by Emil B. Garuba and Zainab Omaki. Garuba co-wrote the Netflix original film, ‘Lionheart’ with C.J. Obasi, Chinny On-wugbenu and Genevieve Nnaji. His 2015 feature film “Road To Yesterday’ won Best Film at the 2016 Best Film (West Africa) at the 2016. He also directed ‘The Royal Hibiscus Hotel’ for Eb-onyLife Films, which premiered at the Toronto International Film Festival in 2017. The film takes you through a female political aspirant Mabel King and her ide-alistic campaign manager, Ike. They and a dedicated team try to discover what went wrong during the elections and seek justice through an election pe-tition tribunal. Their quest soon becomes a race to find and con-vince two young witnesses with

THE 4th REPUBLICMovie Premiere and Review

My rating for this film would be 4 out of 5, for the premier I’ll give it a 3.5. All in all I would watch the film again in a more comfortable environment, worth watching in cinemas? yes! The 4th Republic is now available at Silverbird Cinemas, Genesis Cinemas and Film House Cinemas.

Hanging Out With

By Aisha Sambo

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Column 04:19

evidence of violence at the elec-tions to testify in court; before the opposing candidate finds them first.

As the film starts rolling si-lence echoed the hall. My im-mediate note was a few cheesy lines such as “I like my women black like my coffee”, that made me cringe. The connection be-tween the two youth coppers Amina and Lucky was remark-able, I loved that they used a lot of culture intertwined in the friendships that grew in the film. The quality of the film had a few

inconsistencies, but the drone shots were beautiful. Even the acting was impressive, espe-cially from the elderly actors for example the woman com-munity leader called Patience was exceptional, funny and en-tertaining. The humour was not bad throughout the film and the torture scene was amazing, kudos to the makeup artist for that scene where Lucky and his mother were being tortured.

I hope that wasn’t a spoiler. I’m yet to see a Nigerian film that really hits the nail on the

hammer with action scene, es-pecially shooting scenes. Un-fortunately the scene in 4th re-public didn’t do it for me, great attempt but no extra push from the usual typical gun shot scene from a Nigerian movie.

My rating for this film would be 4 out of 5, for the premier I’ll give it a 3.5. All in all I would watch the film again in a more comfortable environment, worth watching in cinemas? yes! The 4th Republic is now available at Silverbird Cinemas, Genesis Cin-emas and Film House Cinemas.

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Motoring 04:19

You have been well established in the oil and gas industry top management before your cur-rent position in the automobile industry, how are the people in the oil and gas constituency seizing this opportunity to pa-tronize your vehicles for project and other utility uses, since they are among the highest corpo-rate buyers of such products?

Automobile customers, irre-spective of the sector in which they operate, require vehicles that are reliable, easy to operate and maintain and provide over-all value for money. Vehicles, like any other capital equipment, are expected by customers to ren-der returns on their investments. We take this view in developing and sales of Peugeot vehicles or any other brand that we sell.

Since coming on board, PAN has made deeper inroads into the private sector clients, which include a good number of the oil and gas operators. We still plan to secure more oil and gas sec-tor clients.

Our Vehicles are Reliable, Easy to Maintain and Provide Value for Money — MD PAN

Popularly known as PAN around the country, PAN Nigeria Limited has remained an iconic name in Nigeria’s automobile industry. The company was conceived in 1969 by the then Federal Military Gov-ernment under the leadership of General Yakubu Gowon, along other five auto assembly plants and was commissioned in 1972, while full production began in 1975, with about 230 cars per day capacity in three shift.

While other assembly plants that started production within the same period in 70s couldn’t withstand the hash economic environment in the country due to policy inconsistency of the government, mirac-ulously, PAN developed corporate shock-absorbers that made the company stay afloat, even though challenges still remain.

In 2013, Mr. Ibrahim Boyi, a seasoned managerial expert with specialization in corporate strategic management, was appointed the Managing Director of PAN. Before his appointment, he had a success-ful career in the oil and gas industry, culminating in Executive Director of Total Nigeria Limited, one time Managing Director of Eterna Oil & Gas, Gaslink Nigeria Ltd and Chairman/CEO, Lenux Group.

Since his appointment as MD of the Nigerian auto giant, the company has witnessed remarkable changes. In this interview with Benjamin Ike, Boyi highlighted areas where he thinks public and private oil companies, as well as regulatory bodies can synergize with his company in terms of mutual patron-age and others. Excerpts:

Ibrahim Boyi

45

Apart from private corporate en-tities, are government agencies in the oil and gas sector, such as NNPC and the like buying your vehicles?

PAN has recovered a lot of its old customers through the in-troduction of modern, compet-itive and reliable vehicles made for Nigerian roads. We have re-ceived orders from some oil-re-lated government agencies and subsidiaries of NNPC. We have also been accredited by the NNPC group as a contractor/supplier of vehicles.

We are confident that NNPC group and its joint venture part-ners will start to patronize us soon. This will be in compliance with both The Local Content Act and the Executive Order.

We do have a local content support institution under the Federal Ministry of Petroleum Resources called the Nigerian Content Development and Mon-

itoring Board, do you have any partnership with, or any support from them?

The Local Content Develop-ment Policy of the Oil and Gas Industry has not focused sharp-ly in the auto industry. The Auto Industry Plan itself contains el-ements of patronage for local auto plants. Sadly, the imple-mentation by various govern-ment agencies has been weak and porous. We will be glad to see a more rigorous implemen-tation of the Local Content Law, the patronage policy under the NAIDP and even recently the Ex-ecutive Order no 3 for local com-panies and products.

You recently introduced your pick-up van to the Nigerian do-mestic market, a vehicle that runs on diesel, a fully deregu-lated and available fuel, did you consider the factor of PMS being a subsidized and often scarce fuel in deciding to run these ve-

hicles on diesel engines? We introduced the Peugeot

Pick-up in Nigeria, in January 2019. The Peugeot pick-up had occupied a pride of place in Ni-geria and Nigerians. We needed to reconnect that heritage and reclaim our leadership position in the Pick-up segment of the market.

The choice of diesel is by de-sign, to achieve power, rugged-ness and long life of the vehicle. Diesel is the preferred fuel for heavy duty equipment and util-ity trucks globally. It’s also safer and less flammable than petrol. Globally, it is cheaper than petrol and also environmentally clean-er.

However, Nigerians do not appreciate such quality of die-sel due to the subsidy regime of the government on petrol. This aberration will change anytime the government withdraws the subsidy.

But even at that, diesel vehi-cles still offer sizable value in mileage per liter, greater power delivery and longer life of the en-gines.

The oil industry had long em-braced diesel engines for their relative safety in oil and gas en-vironment, such as plants, de-pots, refineries, etc.

Apart from this diesel-powered pick-up van, what other range of products do you have and what do you think makes them competitive over other brands operating in the country?

PAN has identified the key automobile segments and has now placed a competitive vehi-cle in each of those segments. In the lower and mid passenger car segments, we have the Peu-geot 301 (Access, Active and Allure). In the high/luxury sedan segment, we have the Peugeot 508 (Active, Executive and GT

Motoring 04:19

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Motoring 04:19

Line), while in the mid SUV seg-ment, we have the world award winner, Peugeot 3008 SUV. We also have the Peugeot Partner B9 for Multipurpose Van and the Peugeot Pick-up for Utility.

In the commercial vehicle segment, we will be introducing the Higer Buses with configura-tions of 14 to 16 seats and 19-21 seats.

PAN Nigeria is positioning it-self as a one-stop partner for all our customers’ automobile needs.

The issue of after-sales service for safer travel is a major one and we are aware you have auto training institution that trains personnel in such vocations, what is your current level of op-eration in this area and who are your major partners both in the private and public sectors?

PAN and Peugeot have been reputed for their accessible af-ter-sales care in every nook and cranny of Nigeria. This reputa-tion is given a new lease now through our foremost Automo-tive Training Center, the PAN Learning Center. Through the well-equipped training facilities of the center, we constantly up-grade the training of our techni-cal support staff, the technical staff of our dealership and net-work partners in the latest auto-mobile repair technics.

To ensure qualified support of all our customers, we have re-evaluated and re-accredited our

dealerships that are able to pro-vide such support across some major cities in the country. To improve access to support by our customers, we also started the accreditation of Indepen-dent Vehicle Repairers as well as the roll-out of our Shade Tree Quick Service centers across the country.

To reduce the overall cost of ownership and quick repairs turnaround, PAN equips its ware houses with critical service and repair spare-parts at the most affordable prices. PAN restruc-tured its logistics and procure-ments processes for parts to deliver efficiency to our custom-ers.

Your company has never looked back and has always forged ahead in business since it was commissioned in 1972 and commenced production of vehi-cles in 1975, what has been the secret of survival in the same market where many automobile factories have been forced to close shop?

From my own assessment, what accounted for the resil-ience of PAN is its strength of processes (assuring quality of its products and services), in-vestment in training and devel-oping its people and quality of its infrastructure. This should serve as lesson for all firms that want to survive and live for very long.

PAN has evolved and adapted

quickly to the prevalent unsta-ble operating environment and policy flip-flops of government. Such adaptation is not without consequences or set backs to the progress of the Company, operationally and financially. The reason why the call for gov-ernment to focus on ease of do-ing business and policy stability and predictability.

What is your assessment of the Nigerian Auto Industry and ad-vice to government.

The auto industry is the bed-rock of industrialization for any country and Nigeria must pro-mote, protect and ensure its de-velopment. Its impacts on GDP, employment, skills develop-ment, technology transfer and linkages to composite indus-tries is well documented.

Regrettably, the National Auto Industry Development Plan (NAIDP), rolled out in 2013 by Federal Government of Nigeria, has failed to drive the develop-ment of the sector due to poor implementation and enforce-ment by relevant govt agencies.

The policy document itself is well crafted and caters for a holistic development of the sec-tor, but its implementation has undermined its effectiveness to achieve its objectives.

As stakeholders, we call on the government, to thoroughly review the implementation of the NAIDP and address the gaps to ensure its success.

Graduands of PAN Learning Centre Production line of PAN plant

47

Sports 04:19

During his decade in the wil-derness, Tiger Woods ap-peared to give up on golf

several times.“There’s nothing I can look

forward to, nothing I can build towards,” Mr. Woods said as his back problems worsened in 2015.

At the annual Masters champi-ons dinner a couple of years ago, he apparently told colleagues, “I’m done. I won’t play golf again.”

Perhaps the most recogniz-able athlete of this century, Mr. Woods, 43, had become more fa-mous for projecting misery than anything he’d won. It was getting hard to remember when he’d last

looked happy. Until Sunday, 14th April 2019.

In what may be the most un-likely career arc in sports history, Mr. Woods won golf’s most pres-tigious event, the Masters, for the fifth time. It had been 14 years since he’d last won in Augusta, Ga. It’s been 11 years since he’d taken one of golf’s major tourna-ments.

When former champion Pat-rick Reed put the winner’s tradi-tional green jacket on him, Mr. Woods burst out with, “Fits!”

Like the many millions of us who’d been watching, he also seemed surprised by how the day was ending.

Some at-risk pro athletes ride roller coasters. Mr. Woods has spent many years on a burrow-ing machine.

Since last winning a major, his personal life imploded. His back began to disintegrate. He entered rehab for addiction to prescription painkillers. He had surgeries, plural. What he didn’t do a whole lot of was golf.

In middle age, Mr. Woods had become a human branding exer-cise – not good enough to com-pete with the best, but still too successful a product salesman to give up.

On that Sunday we saw flash-es of the old Mr. Woods, but one

–Compiled by Saidu Abubakar

All Hail The Woods’ Remarkable Come Back

49

Sports 04:19

leavened by age. The fist pumps are fewer; the smiles rarer; the highlight moments less awe-some.

This was Mr. Woods playing the Masters like an old gunfight-er, knowing other men would be-gin drawing too quickly and acci-dentally shooting themselves as it went on.

Owing to incoming bad weath-er at Augusta National golf course, organizers kicked off the final round unconscionably early. Mr. Woods got the last tee time, 9:20 a.m. That still meant he had to be in the gym at 5, warming up his back.

If you were up for the prelims, you got a small taste of the tone in the early going. CBS announc-er Jim Nantz did a softball retro-spective with analyst and former Masters champ Nick Faldo. Mr. Nantz is no Barbara Walters, but he got Mr. Faldo tripping down memory lane and Mr. Faldo be-gan to weep.

“You really wanted to do that to me,” Mr. Faldo said, laugh-cry-ing. “You’re rotten.”

It was early and wet. People were tired and emotional. You could already tell this would be a slog.

At the start, Mr. Woods trailed Italian Francesco Molinari – a man as emotionally flat as a carp – by two shots.

The lead group “plodded” for-ward – that was Mr. Woods’s word – hovering at par. Others began to come up behind them. At points, a dozen were within close range of the lead.

Mr. Woods didn’t win the race at the 12th hole, but just about everyone else lost. Four of six golfers in the two leading groups found the creek. All four dou-ble-bogeyed.

Mr. Woods stroked one in to safety, and that was it. He knew it, but showed nothing. The cocky, care-free kid we remem-ber is dead. There’s a beaten-up,

but apparently not beaten-down, man in his place.

Mr. Woods took the sole lead at the 15th. At the par-three 16, he feathered one off the tee to within inches of the hole. That’s when the crowd bought in. From that point on, it was a parade. He won the Masters by a single shot. There was the usual skyward howling and embraces. What was unusual was the reaction of the crowd. The mob around the 18th green was frothing, chant-ing, close to hysteria.

Augusta National is in the United States, but not really part of it. It’s too urbane. But this was a very American moment – the big man brought low and then raised up again, reminding all the little people that, under the Stars and Stripes, that’s still possible.

It’s the Nathaniel Hawthorne quote: “Families are always ris-ing and falling in America.” Few citizens of the republic have lived that line to greater extremes than

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Sports 04:19

Tiger Woods.As he was still finishing off

his day’s work, Mr. Woods was already being welcomed back at the front of the pack. All his op-ponents bent the knee without being asked.

Second-place finisher Dustin Johnson, after a meaningless question about atmosphere: “You can hear the roars. You can definitely tell the difference be-tween a roar for me and a roar for Tiger.”

Another slim-margin al-most-ran, Xander Schauffele, on the subject of his own remark-able weekend: “I feel like I’m get-ting the full Masters experience with Tiger in his red and the mock turtleneck.”

It felt less like your usual tri-umph and more like the Roman sort, in which a whole city came out to celebrate a conquering hero. Top finishers, former win-ners and Augusta National mem-bers lined the path to the Butler Cabin, just as desperate as fans to touch the great man. They didn’t used to do that when Mr. Woods was in ascendancy.

You realized this wasn’t nos-talgia. It’s time travel. We’re in 1997 again. Get ready for Tiger Watch, Tigermania and a whole lot of tiger metaphors where they don’t belong.

At the jacket presentation, Mr. Nantz tried desperately to elicit tears. Mr. Woods thwarted him each time with, “I’m kind of at a loss for words.”

Mr. Woods must have known the sort of catharsis people wanted. Something like, ‘It was so terrible, but it was all worth it’. But he wouldn’t give it to them. He kept insisting on talking about the golf. Everyone still gushed like he was speaking poetry.

For as long as he can keep his body co-operative, Mr. Woods is back. Given the current thirst for stars, he may be bigger than ever.

  And it’s possible this version of Mr. Woods is the perfect sport-ing hero for the age. Brilliant, compromised, fragile, a little bit-ter. A man who has been to the other side, and has come back determined never to return there.

 Global Reactions

US President Donald Trump: “Congratulations to Tiger Woods, a truly Great Champion! Love people who are great under pressure. What a fantastic life comeback for a really great guy!”

Former US President Barack Obama: “Congratulations, Tiger! To come back and win the Mas-ters after all the highs and lows is a testament to excellence, grit, and determination.

Twentythree-time Grand Slam winning tennis player Ser-ena Williams:  “I am literally in tears watching Tiger Woods this is greatness like no other. Know-ing all you have been through physically to come back and do what you just did today? Wow. Congrats a million times! I am so inspired thank you buddy.”

Three-time NBA champion Steph Curry: “Greatest come-back story in sports! Congrats Tiger Woods. Let me hold one of those 5 jackets one time!”

From The Golfing Fraternity:Three-time major winner

Padraig Harrington:  “There is not a golfer in the world that isn’t happy that Tiger Woods won. In the modern era, he’s been a golf and sport superstar. This comeback story will break out from golf into all sports and all the news. It will be everywhere. There will be people who have never looked at golf and will be seeing this and wondering what it’s all about.”

Former Ryder Cup captain Paul Azinger: “I never thought I’d see it. I thought he was done. He whispered to a champion at the Champions Dinner once that he

was done. Since the fused back he has been a living, breathing, walking miracle. To perform at this level, it’s something you be-hold.”

BBC golf correspondent Iain Carter:  “What an extraordinary story and what scenes at Augus-ta. The hug with his mother, his son is leaping into his arms, the chants of Tiger everywhere. It is all about this man who domi-nated golf. I have never seen him celebrate like that.”

Five-time major winner Phil Mickelson: “What a great mo-ment for the game of golf. I’m so impressed by Tiger Woods’ in-credible performance, and I’m so happy for him to capture another Green Jacket. Truly a special day that will go down in history. Con-gratulations, Tiger!”

Eighteen-time major winner Jack Nicklaus: “A big ‘well done’ from me to Tiger Woods! I am so happy for him and for the game of golf. This is just fantastic.”

  …A timeline of Tiger Woods’ fall and rise

When Tiger Woods rolled in the winning putt at the Masters on that fateful Sunday, it was like reliving a bygone era.

It had been 11 years since the American great’s last major tri-umph and 14 since he previously claimed the famous green jacket at Augusta.

There was considerable doubt whether Woods would ever chal-lenge at the highest level again, as he sought to overcome nu-merous setbacks in his life.

Tiger Woods lost over $100 million to his ex wife Elin Norde-gren when she divorced him in 2010. At that time, many peo-ple thought he was finished. He lost his endorsement deals as a result of sex scandals, and had many problems that led to his career grinding to a halt. He lost everything and even had money issues. He took to drugs and al-

51

cohol and was arrested for driv-ing offences, picked up when he had drugs in his system and actually quit Golf. To many of us, he was done and dusted. He was completely finished. It was Re-quiem!

But he found motivation along the line. Intch by intch, he decided to rebuild himself and his career for the sake of his mother, his children, and himself. Tiger kept fighting, and has now achieved one of the greatest comebacks in the history of Sports with his victory at the Masters this month. According to Forbes, he’s now worth about $800 million.

He was in his early thirties when his blossoming life started taking a downward spiral. After being the Number one in Golf, things got so bad that he even slipped out of the top 1000 in the World ranking. But he came back. At 43 years of age. He’s back at the top.

A resurgence in 2018 - which included challenges at The Open and US PGA Championship - raised hopes he could secure a 15th major.

That long-awaited success finally arrived on Sunday. Here, we take a look at the timeline of Woods’ dramatic, albeit largely injury-inflicted, fall and rise to be-coming a major champion again:

September 2013 - Woods was named PGA Tour Player of the Year after winning five titles in 2013. He ended the year as world number one.

March 2014  - Underwent sur-gery to treat a pinched nerve and missed that year’s Masters.

June 2014  - Returned to play the Quicken Loans National in June but missed the cut. He played The Open, WGC-Bridge-stone Invitational and US PGA Championship but struggled at all three and ended the year

ranked 32nd. February 2015  - After with-

drawing from the Farmers Insur-ance Open, Woods announced an “indefinite break” due to poor form, He had recently shot an 11-over-par 82 at the Phoenix Open.

 April 2015  - Returned to play

the Masters and showed signs of promise - finishing tied-17th after going five under par for the tournament.

 September 2015  - Having

missed the cut at the U.S. Open and the Open Championship, the first time he had failed to make the weekend at back-to-back majors, Woods confirmed he had undergone a second major back surgery to correct a pinched nerve.

 October 2015  - A month later,

Woods underwent a follow-up procedure to his previous sur-gery to help relieve discomfort.

 September 2016 - Woods filled

the role of non-playing vice-cap-tain in the United States’ Ryder Cup victory at Hazeltine.

 December 2016  - After a

15-month absence, Woods fi-nally made his comeback at the Hero World Challenge and placed 15th.

 February 2017  - Having failed

to make the cut at the Farmers Insurance Open a week previ-ously, Woods withdrew from the Dubai Desert Classic on the Eu-ropean Tour ahead of the second round, with his agent citing back spasms.

 April 2017 - Woods announced

he would miss the Masters for a second year running, and lat-er that month he underwent a fourth major surgery to help ease

pain in his back and leg. May 2017 - A humiliating mug-

shot of Woods was released af-ter he was arrested on suspicion of driving under the influence. Woods quickly explained the inci-dent was due to “an unexpected reaction to prescribed medica-tions.” He later pleaded guilty to reckless driving at a Palm Beach County courthouse.

 July 2017  - Woods’ inactivity

led to him dropping out of world’s top 1,000.

 December 2017 - Made his lat-

est comeback at the Hero World Challenge and finished tied-ninth, before showing good form at the Valspar Championship and the Arnold Palmer Invitational early in 2018.

 July 2018  - Finished three

shots behind winner Francesco Molinari at The Open, having held the lead midway through the fi-nal round at Carnoustie.

 August 2018  - Carded a 64 -

his lowest final round in a major - on the last day of the US PGA Championship to claim second place, two shots behind winner Brooks Koepka.

 September 2018  - Woods se-

cured the Tour Championship at East Lake, his long-awaited victo-ry coming after he was named by captain Jim Furyk as a wildcard pick for the US team to face Eu-rope in the Ryder Cup at the end of the month.

 April 2019  - Fourteen years

after winning the Masters for a fourth time, Woods claimed a fifth green jacket and celebrat-ed a 15th major victory, coming from behind to win such a title for the first time.

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