Dredging Contractor blames gods and goddesses for slow pace of work.

Local media reports an interesting case of a N500m (about $4m) contract awarded by the Anambra State Government in Nigeria for the dredging and sweeping of the Nwangene-Otumoye Creek in Onitsha which the contractor claims was being hindered by gods and goddesses. The State Governor, Mr. Peter Obi, awarded the project to an Italian firm, ITAL Construction Limited on April 30. The firm was given 90 days to complete the job, with the target of providing free access for floodwater from Onitsha city into the River Niger.

But, with less than 40 days to the completion date, the firm claimed in late June that gods and goddesses, allegedly inhabiting the creek, had prevented its workers from making progress with the dredge work. ITAL‘s Operations Manager, Mr. Tony Duru, told the Commissioner for Environment, Dr. Ifedi Okwenna, during a surprise visit to the site that in a bid to pacify the spirits, the company had paid about N500,000 (about $4,000) to villagers to offer sacrifices to them.

”It has been terrible; they don‘t allow us to work. The villagers too are not helping matters. In spite of the fact that we paid them between N400,000 and N500,000 to appease their gods and goddesses, they have been coming, saying that the money was not enough for the sacrifice”, Duru told the commissioner. Duru, who described the spirits as “very angry,” also claimed that one worker drowned last week in the creek, forcing the firm to temporarily shut down operations.

“A lot of people came here as a result of the incident; the police were on our neck and were doing investigations. But, in spite of all this, we were able to start clearing the water hyacinth on the river; you can see that the water is now flowing,” he added. However, the commissioner, who could not hide his disappointment over the slow pace of work, was not convinced by Duru’s excuses. He said his complaints bordered on “social but unscientific” issues that should not have affected the dredging of the creek.

Okwenna maintained that “This is the 21st century, my friend, and you are talking about gods and goddesses not allowing a construction firm to work. These things you claimed happened, what stopped you from reporting directly to the ministry? The natives here are our people, there are channels of communication and we can talk to them. These are not excuses; this job has to go on as planned. We want to transform this area into a tourism site. Get your men to work.”

He observed that the firm was not using modern equipment for the work, a reason that could have caused the delay instead of blaming it on gods and goddesses. Asked to explain what informed the choice of ITAL since it was apparent that its output so far on the project was not satisfactory, the commissioner said it emerged as the most qualified among those who bid for the job.

 

N45b River Niger's Dredging Project Drags.

Unconfirmed media reports say that the long-delayed dredging project of the River Niger is still subject to further delays on account of funds scarcity. Late last year, the Federal Government awarded the dredging of the upper Niger waters to Foby Engineering and Construction Company Ltd, including the rehabilitation of the Lokoja river port. By current indications, the projects could not commence as mobilization for the contract is pending.

The first phase of the river Niger dredging was slated to deepen the draught Baro in Niger State to Warri in Delta State. Although the technical details of other phases have not been massively publicized, the total budget is said to be about N45b. According to the former minister of Water Transportation, Alh Habu Aliyu, the first phase was to gulp
N9.6 billion. It ought to have commenced at the time of contract award late last year.

The second phase was projected to cost N15 billion while the third phase which ought to have commenced in 2008 was projected to cost N10 billion. By 2009 the project ought to have been completed at the cost of N8 billion. There are strong indications that the handover of power to new hands in May this year may have affected the momentum of the project coupled with the usual government bureaucracy involved in such an unwieldy project. The project has suffered many postponements starting with the botched attempts by the Petroleum (Special) Trust Fund (PTF) in 1996 to have it dredged. Six foreign contractors got the job from the defunct maximum ruler, late General Sani Abacha’s government, awarded by the PTF at whopping sums of money and equally whopping mobilization fees ranging to the tune of N3.5 billion was paid them. When Chief Olusegun Obasanjo took over power, they were made to refund the fees since they did not do the work. About N600m has so far been repaid by them.


Concessionaires pay $26m to operate at ports

FOUR concessionaires have paid $26.31 million to the Nigerian government to operate at the Tin-Can Island and the Roll On/Roll Off (RORO) ports. A status report on the two ports, which have been merged and now known as the Tin-Can Island Port Complex, showed that the concessionaires still have outstanding $19.79 million to pay.

The Port's Terminal Co-ordinator, Mr. Joshua Asanga, disclosed this in a report to the Managing Director, Western Ports, Malam Abdulsalam Mohammed, during his visit to the Island Ports Complex recently. He said that Josephdam Port Services Limited, one of the concessionaires, would operate berths one & two for 10 years while Tin-Can Island Container Terminal Limited would operate Berths three to five for 15 years.

Asanga said that Ports and Cargo Handling Services Limited would run Berths six to eight for 10 years while and another firm, Five Star Logistics Limited, which won Berths nine and 10 would operate them for 20 years. He pointed out however that inadequate funding had been crippling the port's drive to improve its performance and settle its huge financial liability amounting to N295 million as at September 2006. "Funding of the port tumbled from N36 million in September 2006 to N15 million in January 2007,'' he said.

The co-ordinator said that the quay wall was in need of urgent repairs, adding that operations could not take place in terminal `D' until some interim repair works were carried out. "In line with the human resource rationalisation occasioned by the reform process, personnel strength has also dropped from 1,826 to 876 between August 2006 and now'', Asanga said. He however said that some departments like operations, commercial and engineering were still over-manned, adding that discussions had been initiated with the regional office on the possibility of deploying some of the personnel to areas of need at the Lagos Port Complex (LPC).

 

Lagos Int'l Airport for Privatisation.

Nigeria’s Federal Government may soon privatize the Murtala Mohammed Airport, as a way to encourage its expansion and to ease increasing space constraints The Director General of the Nigeria Civil Aviation Authority (NCAA), Dr. Harold Demuren said in a recent interview that “that our arrival and departure hall is too small and can no longer cope with the market we have and the volume of traffic in the airport.”

The 1970’s era airport is nowadays overcrowded daily during boarding and arrival processes due to limited space. Demuren that this is cumbersome for service providers and for the passengers, noting that “…aviation is meant to be of speedy delivery where passengers are not supposed to stand for two to three hours to collect their baggage and pass through immigration. We have made several proposals to government in order to ensure that these areas are improved`. He said that the biggest and modern aircraft, Airbus A380 which carries up to 600 passengers already are already being used in the European countries and United States, remarking that if the airplane is brought to Nigeria, it would pose a major challenge to the authorities.

Demuren noted that in developed countries where there are modern terminal buildings, they usually have large number of passengers but this is not felt because of the expansive facilities and large car parks, which makes the processing of passengers quicker. He said Nigeria needed to do this also.


Flight Operations Begin At MM 2 Soon.

The Federal Airports Authority of Nigeria and Bi-Courtney Aviation Services Ltd have signed a memorandum of understanding (MoU) to enable flight operations begin at the newly-constructed Murtala Mohammed terminal 2 in Lagos.

At the signing ceremony in Lagos in August, the managing director of FAAN, Muhammad Yusufu declared: "Provisional approval is hereby granted for the commencement of domestic flight operations at MM 2. This signed MoU between FAAN and Bi-Courtney applies to all the areas of responsibilities and cooperation between the parties concerned."

He clarified that the MoU was focused on areas like the provision of security services, rescue operations, fire fighting equipment and personnel, advisory services as well as safety operations. The director general of the Nigerian Civil Aviation Authority (NCAA), Dr. Harold Demuren, at the occasion described the realisation of the terminal facility as a success for public-private partnership.

The chairman of Bi-Courtney, Dr. Wale Babalakin said he was particularly delighted that "the journey has reached a significant milestone…Today is a remarkable one for Nigeria and a day to note with great pride in the aviation industry." he said.

 

Cross River State Re-opens Bebi Airstrip

The Cross River State Government has announced the re-opening of Bebi Airstrip at Obanliku Local Government area. It had been closed down for routine maintenance.

Announcing the re-opening, the commissioner for Information Dr. (Mrs.) Sylvia Atsu said that government was pleased to inform the general public, especially operators in the aviation industry and visitors to the northern senatorial district of the State and the Obudu Ranch Resort in particular, that the Bebi Airstrip in Obanliku Local Government Area of the State has re-opened for normal flight operations after the closure for routine maintenance on some of the facilities. Visitors and tourists, who fear the stress of traveling by road, can once again utilize the comfort and reliability of flying straight to the airstrip from different parts of the country to enjoy the beauty and serenity at the Ranch Resort.

 

Nigerian oil and gas sector news and developments...

Govt raises peace panel for Niger Delta .

To begin to calm the crisis of the Niger Delta, Nigeria’s federal government has set up the Niger Delta Peace and Conflict Resolution Committee. Vice President Goodluck Jonathan inaugurated the committee at Government House, Port Harcourt, Rivers State in early July 2007. The committee is to recommend to the Federal Government how the issues of the Niger Delta would be addressed adequately.

The Vice President said the crisis in the region needed to be addressed because of its negative impact on the economic activities in the region. He noted that the problem had gone beyond hostage-taking and pipeline vandalisation to the distortion in the economy of even the region.

The ceremony was attended by all the six governors in the South-South geo-political zone. The Vice President described the agitation of the region as a genuine one, though, he said that the people of the Niger Delta needed development and the country has reached a point where the government has taken notice of it.

Jonathan disclosed that the various stakeholders in the region would soon have an opportunity of sitting together with President Umaru Musa Yar'Adua at a summit to come up with a holistic programme for the development of the Niger Delta. But to get to this point, he stressed, there must be peace in the area.

To work out the peace process, every state in the region has been mandated to set up its own peace committee. The central committee, which was inaugurated will be co-ordinating cross board conflicts and interstate crisis in the region.

It has as Chairman Senator David Brigidi and secretary, Kingsley Kuku. The committee is made up of 18 members. Two persons representing each state, four from the oil firms, and one each from the Niger Delta Development Commission (NDDC) and the Nigerian National Petroleum Corporation (NNPC).

The committee is to liaise with the groups in the region, security agencies and report to the Federal Government. The Vice President said that the terms of reference of the committee would be reviewed every 12 months based on the progress made.

The Rivers State Governor, Celestine Omehia, said that the respective states had already set up their peace committees based on the directives of the Vice President and pledged that the committees would reach out to the militants in the creeks.

 

DPR’s Perceived Transparency and the 2007 Oil Bid Rounds
The Nigerian oil licensing bid round for 2007 may have come and gone but the final disposal of OPLs 290 and 2007 stood as a benchmark to judge how the Directorate of Petroleum Resources (DPR) was sticking to guiding rules it released for the exercise. Many oil and gas industry chieftains spoke out at the seeming delay in conveying OPL 2007 to Conoil Producing which had been recognized as the reserve bidder.

DPR was expected to secure its touted credibility via an immediate pronouncement that since Dangote Oil and Gas Company Ltd ( a member of the Dangote Group of Companies) had failed to exercise its right of first refusal over the two oil blocks, the blocks should immediately revert to Conoil as the first runner up in the bid.

Conoil had emerged the bona fide winner of continental shelf block 290 and onshore block 2007 at the bidding round held in Abuja on May 11, offering a total signature bonus of $215 million for the two blocks. However, Dangote Oil and Gas had preferential rights on the two blocks and was given the stipulated 48-hour lead time by the DPR to match the winning bonus offered by Conoil. By the close of time on May 16, Dangote was yet to make payment. The following day, it officially announced its withdrawal from the two blocks claiming that their investment in them would be unviable due to the tie-down of such huge sums in a project of comparatively lengthy gestation when their Group had other promising sectors with better prospects. Thereafter, DPR invited Conoil to finalise acquisition of OPL 290 but was silent on the bidder’s right to take up OPL 2007, located at the simmering Niger Delta.

Industry chieftains consequently hinted of possible moves by the petroleum authorities to give the block to another company other than Conoil. However this did not eventually happen as Conoil was given the block at the end.

Other transactions included four blocks which had their bids opened for record purposes but their winners were not announced because of pending litigations. They were OPLs 2001, 2002, 2003 and 2004, all located in the Niger Delta onshore region. DPR Director, Mr. Tony Chukwueke said the winners would be make public after the court judgment and provided the rulings were in favour of the organisation.

The government targeted $1 billion revenue from this year’s exercise but realized a little over $700 million. Successful companies at the bid round which paid 50 per cent signature bonuses were Oranto Petroleum on OPL 293 ($55 million), Yorkshire Energy OPL 295 ($105 million) and Moni Pulo Limited on OPLs 239, 231 and 234 ($11.5 million; $26.5 million and $6.5 million respectively).

Others were Global Energy Company which won OPL 2009 with $11.5 million because Essar Energy Holding, which posted the highest bid could not back it with the 50 per cent down payment and OPL 2010 also went to Global Energy with $11.5 million as Midland Petroleum, which offered $20 million could not meet the 50 per cent down payment.

Essar Energy Holding won OPL 226 with $37 million, Oilwood Limited won OPL 241 with $20.1 and Sahara Energy won OPL 228 with $6,25 million. Pan Ocean Oil Corporation clinched OPL 275 with $10 million signature bonus.

Coscharis Oil and Gas Limited and its consortium won OPL 274 with $50 million as the highest bidder; Sterling Global E&P Limited won OPL 2006 with $7.5 million; Bayelsa Oil Company/JNHP Consortium won OPL 240 with $10.6 million.

Minister of Energy, Dr. Edmund Daukoru had stated that all the PSC would be signed before May 29, 2009 except for those companies that failed to meet their financial obligations. The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mr. Funso Kupolokun had said at the event that frequent offers of oil blocks by the government was aimed at boosting exploration activities to increase the national oil reserve base.

 

Nigeria Overtakes Saudi Arabia in Crude Supply to US

For the month of March 2007, Nigeria overtook Saudi Arabia in the ranking of crude oil exporters to the United States,  a preliminary data from the US Energy Information Administration (EIA) has shown. According to the EIA data on the US crude import rankings in March 2007, Nigeria, Africa's biggest oil producer and the world's eighth, leaped from fifth place in February to third in March, pushing Saudi Arabia, the world's top exporter into fourth place. Canada and Mexico held on to first and second places, with crude exports to the US of 1.776 million barrels per day (b/d) and 1.621 million b/d.

Saudi Arabia, with an average 1.231 million b/d in March, was behind Nigeria with 1.29 million b/d. US crude imports from the kingdom had dipped by 374,000 b/d in February to average 1.185 million b/d over that month, recovering by just 46,000 b/d in March. Volumes from Nigeria were up 229,000 b/d from February's 1.061 million b/d. other suppliers ranked as follows: Venezuela took fifth place with 1.036 million b/d. In sixth place was Angola with 696,000 b/d; Iraq, seventh place, with 523,000 b/d; Algeria, eighth place, with 501,000 b/d; Kuwait, ninth place with 288,000 b/d and Brazil, tenth place, with 209,000 b/d.

 

Niger Delta: FG Mulls Gas Flare-out By 2008

To further progress in resolving Niger Delta environmental protests, Nigeria’s Federal government may have concluded plans to close down oil fields flaring associated natural gas at the expiration of the deadline for gas flare-out in 2008.


Operating firms have been interested in only gathering gas for export from offshore facilities and have abandoned investments in gas gathering projects needed to boost power generation and domestic utilisation on the excuse of unrests. Also, they have found the current paltry penalties for flaring gas more suitable than the cumbersome task of investing in gas gathering ventures.


Some of the oil majors like Shell Petroleum Development Company (SPDC) have called on the federal government to extend the flaring deadline to 2010 due to the inability of the Nigerian National Petroleum Corporation (NNPC) to fund its equity in the Joint Venture (JV) operations.

Ugborodo indigenes threaten to stop Chevron’s $3bn projects

The Escravos Gas-to-Liquid and Escravos Gas Project III initiated by Chevron Nigerian Limited (CNL) to end gas flaring in Nigeria by 2008 may suffer a hitch if the threats of the host community to stop the projects go ahead.

Indigenes of the oil-rich Ugborodo community in Warri South West Local Government Area of Delta State threatened to stop further work on the $3bn gas projects unless the CNL‘s management meets a four-point demand within two weeks.

The Ugborodo Community Trust Management Committee, headed by Mr. Isaac Botosan, has forwarded a petition containing the four-point demand to the General Manager, Government and Public Affairs of CNL, Mr. Femi Odumabo.

Frequent disruptions of the project by the host communities stalled the initial plan by CNL to complete them in October 2007. Hyundai Heavy Industries and America/Italian Company, Southern Gas Company are handling the projects.

 

       

3rd Quarter 2007

   
                     
         
                     

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