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Oil Workers Shut Down Production Over Transfer of OML 042 Operatorship

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… As APC Dialogues on Policy Direction for new Government

Worried about the larger labour implication, the oil workers in the employ of the Nigerian Petroleum Development Company (NPDC) have shut down oil production over the transfer of operatorship of one of the country’s valued oil fields, OML 42, to Neconde Energy Ltd.

The workers under the aegis of Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) and the National Union of Petroleum and Natural Gas Workers (NUPENG) are calling for the reversal of the award of the operatorship to NPDC.

Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, had given approval for the transfer of operatorship of the oil block sold by Shell Petroleum Development Company (SPDC) on the ground that the NPDC, a subsidiary of the Nigerian National Petroleum Corporation (NNPC), lacked the capacity to operate the oil block.

But the workers are insisting that the NPDC, contrary to reports, has the capacity and competence to operate the said field.

Besides, the workers are aggrieved that they were not carried along by management of the NPDC in the entire process, adding that the management’s decision would not only threaten their jobs, but would jeopardise the future of the oil industry.

The production shut in has affected all NPDC-operated assets that are in a joint venture with indigenous companies that have applied for operatorship, except for Neconde, who, prior to the crisis, had been awarded the operatorship of OML 42.
The company’s assets are being guarded by the Joint Task Force (JTF).

The Elcrest’s OML 40, Shoreline’s OML 30 and FHN/Afren’s OML 26 have now been shut in, according to sources.
It was gathered that evacuation is hampered from OML 34, which relies on the OML 30 pumping station.

Oil industry experts stated yesterday that the development would have a devastating effect on Nigeria’s already dwindling  economy.
Governor of Central Bank of Nigeria, Mr. Godwin Emefiele, noted recently that “Nigeria has faced continued pressure from spiraling debts, in the face of dwindling revenues resulting from falling global crude oil prices.”

Many of the 36 states of the federation are barely able to meet their obligations to contractors and workers from their monthly allocations from the federation account.

Also, Nigeria’s foreign reserves has slumped to about $29.9 billion as at March ending.
Oil industry experts have expressed fears that if the industrial action is allowed to persist, it will also affect the power sector as the NPDC currently supplies at least 30 per cent of gas required to generate electricity.

The NPDC has been under constant attack for lacking the requisite technical competence and financial muscle to operate the assets in contention effectively and efficiently.

Under NPDC’s operatorship, all the oil fields have taken a nosedive in production volumes; obligations to communities have not been met and there has been a sharp drop in oil revenue.

All the indigenous companies that are in a Joint Venture with NPDC have suffered setbacks owing to the poor performance of NPDC since acquiring the licences.

The firms have lamented NPDC’s lack of capacity to continue to operate the acreages they purchased from the Shell-led consortium.
They argued that they could have done better than the NPDC was doing as operator.

“The government appears to have finally agreed with them and the perception in the industry is that the remaining three companies will soon have their prayers for operatorship answered,” said a source close to one of the companies.

A management staff of NPDC, who pleaded anonymity, explained that the strike had resulted from “a breakdown in communication” between the management of the company and the union members. He further stated that under the new arrangement, the workers stand to benefit more.

The source stated that both the NPDC and the indigenous companies are all understaffed, and would require more workers.
According to him, with operatorship rights transferred to the indigenous companies, “there is bound to be a sharp increase in oil production; an increase in revenue stream; increased gas supply to domestic markets to improve power generation; community development.”

In July 2010, Seplat acquired a 45 per cent participating interest in, and was appointed operator of a portfolio of three onshore producing oil & gas leases in the Niger Delta (OMLs 4, 38 and 41) with NPDC holding 55 per cent.

The company has become one of the leading indigenous Nigerian oil and gas exploration and production companies.
With Seplat’s operatorship status, it is averaging 70,000 bpd more than all the SPDC’s divested assets operated by NPDC.
Meanwhile, negotiations are in progress to put an end to the strike.

In another development, the Nigeria Extractive Industries Transparency Initiative (NEITI) has explained how efforts to push forward the frontiers of accountability in activities within Nigeria’s hydrocarbon industry is suffering setback because of government-inspired checks on access to critical industry information.

NEITI stated this yesterday at a pre-validation workshop in Abuja to educate stakeholders in Nigeria’s extractive industry on the upcoming re-validation exercise by the global Extractive Industries Transparency Initiative (EITI) in the country.

The remark of NEITI appears to be confirmed by the staff of Nigerian Petroleum Development Company (NPDC) who yesterday, shut down oil production to protest the arbitrary transfer of operatorship of one of the country’s priced oil fields, OML 42, to Neconde Energy Ltd.
NEITI noted that the seeming refusal of the federal government to mandate its relevant agencies to open up to the public, registers of licensed entities and contractual engagements in the oil and gas sector is undermining the drive to shine more light on the industry which pundits say operates opaquely.

NEITI’s Executive Secretary, Mrs. Zainab Ahmed, told reporters that this singular act of indecision by the government pushes NEITI to regularly manoeuvre, albeit the hard way, to get information from operators in the process of preparing its audit reports on the sector.
She explained that countries with fewer experience and capacities in managing extractive industry activities like Ghana, Liberia and The Gambia were ahead of Nigeria in opening up licence registers and contracts to the public.

She said: “The major challenge we have in Nigeria in implementing EITI is our inability to open up the licensing registers of the oil and gas companies; it is our inability to open up and put in the public domain operating contracts for the oil and gas sector.

“Those are our major challenges but what we have done in NEITI with the guidance of the National Stakeholders’ Working Group (NSWG) is that we have looked at the standards and said OK, standards are not really in the public but what did the requirements ask for?”

Ahmed added: “So, we extracted the requirements from the standard and designed a special template to be able to capture key information from those contracts and we send these requests to the companies and to Department of Petroleum Resources (DPR).

“So, we got those key information we thought were vital from the contracts and from the licences from both the DPR and the companies.
“In that regards, we have been able to meet the requirements by the standard albeit in this round about manner.”

She however explained that such means of gleaning the needed information for use were not sustainable, adding that: “It cannot continue to be like that and they will accept it because everybody knows the contracts are not in the public domain.

“Everybody knows the licence register is not something you can sign up to our website and access. Subsequently, we must as a country make sure that these things happen. In Ghana, Liberia, Gambia and a lot other very small countries you can actually click on a website and see these information but it is not so in Nigeria.”

Notwithstanding these challenges, Ahmed stated that Nigeria was on course to be re-validated as an EITI-compliant country, having done well in domesticating and implementing EITI’s principles of transparency and accountability in her oil, gas and mining sectors.

“I am very positive that Nigeria will scale through validation. We have done a very extensive amount of work beyond any other EITI implementing country. Yes, it is not perfect but where we see shortcoming, we have tried the best possible way we can to partly meet the requirements.

“The new standards itself is actually fashioned towards the NEITI audit works, so I am sure that with this effort we started today, getting the cooperation and inputs of stakeholders, listening to ourselves and trying to fashion out how we can make corrections before January 2016 we will scale through validation,” she said.

On the failure of the National Assembly to debate on NEITI’s audit reports, as well as its impacts on Nigeria’s standing, Ahmed said: “It is disturbing for NEITI board and management. It is also not what the EITI expects. The EITI requires you to report, disseminate the report and then to remedy the lapses observed by the report.

“We have been able to carry it through a very extensive remediation programme that is planned but the positive outcomes are few.  There are positive outcomes but they are few. And that is because we do not have the full commitments of the relevant government agencies to this remedial process.

“So, we are seeing an opportunity in validation of flagging up these issues for people to understand the implications of not pushing and realising the results of the remedial process.”

Nigeria, which signed up to implement EITI in the oil, gas and mining industries in 2003, began implementation in 2004 and became the first country out of 46 nations in the world body to support the process with a specific Law, the NEITI Act of 2007.

The country was designated EITI-compliant in 2013. EITI-compliant countries are however required to undertake validation every three years. NEITI is to face the validation examination team in January 2016.

Tony-Blair

Tony-Blair

Meanwhile, ahead of the May 29 inauguration of the All Progressives Congress (APC)-led government in the country, the party will wednesday unfold a policy  roadmap that will guide the Muhammadu Buhari –led administration.

The unveiling of the policy direction will feature former British Prime Minister, Mr. Tony Blair as guest speaker  during a two-day policy dialogue scheduled for Wednesday and Thursday.

The policy dialogue themed: ‘Implementing Change: From Vision to Reality,’ is being organised by the Policy, Research and Strategy Directorate of the APC Presidential Campaign Council.

In a statement in Abuja yesterday, the Deputy Head of the Directorate and former Minister of Youth and Sports, Mallam Bolaji Abdullahi, said the president-elect, Muhammadu Buhari would declare open the dialogue, which would be chaired by  the vice president-elect, Prof. Yemi Osibajo (SAN).

Blair is the keynote speaker at the dialogue where input to the roadmap for the actualisation of the policies of the incoming administration would be made by experts drawn from different fields and members of the public.

Abdullahi identified the core areas of focus in the two-day dialogue to include the economy, governance, job creation and security in line with the APC manifestoes for change.

He added that topics for discussion include: “improving the national economy for shared prosperity; repositioning agriculture for job creation and economic prosperity;  developing infrastructure for national development; achieving sustainable reforms on oil/gas sector; reducing inequality and achieving sustainable human development; achieving holistic and sustainable reforms in the education sector; developing and education system relevant to Nigeria’s developmental aspiration; chieving qualitative and affordable healthcare.

Others include: “Achieving diversity and inclusion in public life; exploring sports, tourism and creative industry for job creation; governance and improved efficiency in public service; tackling corruption in public sector and foreign policy and agenda for change.”

Some of the speakers and discussants expected at the dialogue include Ms Ifueko Omogui-Okauru, former chairperson of the FIRS; Dr. Rilwan Babalola, former Minister of Power; Dr. Tajudeen Umar, former Country Chair, Nigeria –Sao Tome and Principe Joint Development Authority; Prof Niyi Ayoola Daniels, President, International Institute for Petroleum Energy Law and Policy; Mr. Tunde Ahonsi, Resident Representative UNFPA, Ghana; Major-General Ishola Williamsn (rtd).

Others include : Prof Pai Obanya, Chairman WAEC; Dr. Ayo Teriba, CEO, Economic Associates; Prof. Bolaji Aluko, Vice-Chancellor, Federal University, Otuoke; Prof Mohammed Tabia of the Department of Islamic Law, Bayero University, Kano; General Abdulrahman Dambazzau, former Chief of Army Staff; Prof. Ibrahim Gambari, former Nigerian Permanent Representative, United Nations; Mr. Fola Arthur- Worrey, former Solicitor-General, Lagos State;  Ms. Bolanle Onagoruwa, former Director-General Bureau of Public Enterprises (BPE); Mr. Wale Fapounda, of Legal Resources Consortium; and Prof Etannibi Alemika, Chairman CLEEN Foundation.

The programme will also mark the winding down of activities of the Policy, Research and Strategy Directorate of the APC Campaign Council, Abdullahi added.

Meanwhile, ahead of the May 29 hand-over date, there were indications yesterday that the leadership of the APC are being pressured to step in and resolve the issue of zoning of principal office positions in the incoming National Assembly.

The concern over the delays in deciding on zoning came just as the party’s transition committee has sought and got extension of deadline for the submission of its report to the president-elect, Buhari.

THISDAY gathered that though both the  president-elect and the leadership of the  party had preferred not to intervene directly on the matter, at least for now, some of the leaders are getting worried that if the party did not act now and swiftly too, the controversy the issue is generating might get out of hand.

At the on set of the tussle for the leadership of the eighth National Assembly, the APC set up an advisory committee headed by the National Chairman of the party, Chief John Odigie-Oyegun, to handle consultations with the stakeholders with a view to reaching an understanding on the zoning formula. Because of the sensitive nature of the issue, the party was initially reluctant to summon the National Executive Committee (NEC) meeting without exhausting all avenue for agreement on the contentious areas.

Since the initial speculation broke out on the zoning of principal offices of the National Assembly by the party, many of the interested senators and House of Representatives members have been criss-crossing the country lobbying for support from their colleagues.
A source told THISDAY that the party’s effort to resolve the matter had been frustrated by some vested interests who are bent on stretching the matter to its limit.

It was learnt that the patience of some of the party leaders are running out, especially those of them who believe that the party should have summoned courage to deal with the issue promptly before it gets out of hand.

“Some party members are complaining that the party leadership should have convened a meeting to deal with issue once and for all, rather than allowing it to linger. It is not in our best interest. The party needs to meet tackle a number of issues relating to take-off on the incoming administration before the May 29th hand-over date,’’ the source said.

Meanwhile, the APC Transition Committee has continued its sitting even as the two weeks timeline given for it submit recommendations expired monday.

A member of the committee who spoke to THISDAY  on the condition of anonymity because he was not authorised to speaking to the media, said the chairman and members of the committee are continuing their work.

According to him, due to the volume of work they are doing the committee has been asked to disregard the deadline and go on with its assignment.

He however said that the committee had to break into subcommittees covering various sectors in order to hasten the conclusion of its mandate.

It said one of the subcommittees is dealing with the petroleum sector whike another one is handling issues affecting the power sector with a view to making appropriate recommendation.

He said the receipt of sector study reports from the Obasanjo Research team is part of the goodwill that the transition committee has been getting from patriotic Nigerians to help the incoming administration to take off smoothly.He insisted that the chairman of the committee was being charitable when he told state house journalists that there no issue of non-cooperation with the FG transition team.
“We even asked them (Federal Government) whether we can interface with the Ministers while we are waiting for the hand-over report but they said categorically no. That we should wait the until the report is ready.

“I think we at the committee have gone beyond that now if not that the PDP Spokesman, Metu had opened the matter to score cheap political points, we would not have talked about it.  We have continued working assiduously in line with our terms of reference having factored their non- cooperation on the matter,” he said.

ThisDay

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WAIVER CESSATION: Igbokwe urges NIMASA to evolve stronger collaboration with Ships owners

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…Stresses the need for timely disbursement of N44.6billion CVFF***

Highly revered Nigerian Maritime Lawyer, and Senior Advocate of Nigeria (SAN), Mike Igbokwe has urged the Nigeria Maritime Administration and safety Agency (NIMASA) to partner with ship owners and relevant association in the industry to evolving a more vibrant merchant shipping and cabotage trade regime.

Igbokwe gave the counsel during his paper presentation at the just concluded two-day stakeholders’ meeting on Cabotage waiver restrictions, organized by NIMASA.

“NIMASA and shipowners should develop merchant shipping including cabotage trade. A good start is to partner with the relevant associations in this field, such as the Nigeria Indigenous Shipowners Association (NISA), Shipowners Association of Nigeria (SOAN), Oil Trade Group & Maritime Trade Group of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA).

“A cursory look at their vision, mission and objectives, show that they are willing to improve the maritime sector, not just for their members but for stakeholders in the maritime economy and the country”.

Adding that it is of utmost importance for NIMASA to have a through briefing and regular consultation with ships owners, in other to have insight on the challenges facing the ship owners.

“It is of utmost importance for NIMASA to have a thorough briefing and regular consultations with shipowners, to receive insight on the challenges they face, and how the Agency can assist in solving them and encouraging them to invest and participate in the maritime sector, for its development. 

“NIMASA should see them as partners in progress because, if they do not invest in buying ships and registering them in Nigeria, there would be no Nigerian-owned ships in its Register and NIMASA would be unable to discharge its main objective.

The Maritime lawyer also urged NIMASA  to disburse the Cabotage Vessel Financing Fund (CVFF)that currently stands at about N44.6 billion.

“Lest it be forgotten, what is on the lips of almost every shipowner, is the need to disburse the Cabotage Vessel Financing Fund (the CVFF’), which was established by the Coastal and Inland Shipping Act, 2003. It was established to promote the development of indigenous ship acquisition capacity, by providing financial assistance to Nigerian citizens and shipping companies wholly owned by Nigerian operating in the domestic coastal shipping, to purchase and maintain vessels and build shipping capacity. 

“Research shows that this fund has grown to about N44.6billion; and that due to its non-disbursement, financial institutions have repossessed some vessels, resulting in a 43% reduction of the number of operational indigenous shipping companies in Nigeria, in the past few years. 

“Without beating around the bush, to promote indigenous maritime development, prompt action must be taken by NIMASA to commence the disbursement of this Fund to qualified shipowners pursuant to the extant Cabotage Vessel Financing Fund (“CVFF”) Regulations.

Mike Igbokwe (SAN)

“Indeed, as part of its statutory functions, NIMASA is to enforce and administer the provisions of the Cabotage Act 2003 and develop and implement policies and programmes which will facilitate the growth of local capacity in ownership, manning and construction of ships and other maritime infrastructure. Disbursing the CVFF is one of the ways NIMASA can fulfill this mandate.

“To assist in this task, there must be collaboration between NIMASA, financial institutions, the Minister of Transportation, as contained in the CVFF Regulations that are yet to be implemented”, the legal guru highlighted further. 

He urged the agency to create the right environment for its stakeholders to build on and engender the needed capacities to fill the gaps; and ensure that steps are being taken to solve the challenges being faced by stakeholders.

“Lastly, which is the main reason why we are all here, cessation of ministerial waivers on some cabotage requirements, which I believe is worth applause in favour of NIMASA. 

“This is because it appears that the readiness to obtain/grant waivers had made some of the vessels and their owners engaged in cabotage trade, to become complacent and indifferent in quickly ensuring that they updated their capacities, so as not to require the waivers. 

“The cessation of waivers is a way of forcing the relevant stakeholders of the maritime sector, to find workable solutions within, for maritime development and fill the gaps in the local capacities in 100% Nigerian crewing, ship ownership, and ship building, that had necessitated the existence of the waivers since about 15 years ago, when the Cabotage Act came into being. 

“However, NIMASA must ensure that the right environment is provided for its stakeholders to build and possess the needed capacities to fill the gaps; and ensure that steps are being taken to solve the challenges being faced by stakeholders. Or better still, that they are solved within the next 5 years of its intention to stop granting waivers”, he further explained. 

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Breaking News: The Funeral Rites of Matriarch C. Ogbeifun is Live

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The Burial Ceremony of Engr. Greg Ogbeifun’s mother is live. Watch on the website: www.maritimefirstnewspaper.com and on Youtube: Maritimefirst Newspaper.

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Wind Farm Vessel Collision Leaves 15 Injured

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…As Valles Steamship Orders 112,000 dwt Tanker from South Korea***

A wind farm supply vessel and a cargo ship collided in the Baltic Sea on Tuesday leaving 15 injured.

The Cyprus-flagged 80-meter general cargo ship Raba collided with Denmark-flagged 31-meter wind farm supply vessel World Bora near Rügen Island, about three nautical miles off the coast of Hamburg. 

Many of those injured were service engineers on the wind farm vessel, and 10 were seriously hurt. 

They were headed to Iberdrola’s 350MW Wikinger wind farm. Nine of the people on board the World Bora were employees of Siemens Gamesa, two were employees of Iberdrola and four were crew.

The cause of the incident is not yet known, and no pollution has been reported.

After the collision, the two ships were able to proceed to Rügen under their own power, and the injured were then taken to hospital. 

Lifeboat crews from the German Maritime Search and Rescue Service tended to them prior to their transport to hospital via ambulance and helicopter.

“Iberdrola wishes to thank the rescue services for their diligence and professionalism,” the company said in a statement.

In the meantime, the Hong Kong-based shipowner Valles Steamship has ordered a new 112,000 dwt crude oil tanker from South Korea’s Sumitomo Heavy Industries Marine & Engineering.

Sumitomo is to deliver the Aframax to Valles Steamship by the end of 2020, according to data provided by Asiasis.

The newbuild Aframax will join seven other Aframaxes in Valles Steamship’s fleet. Other ships operated by the company include Panamax bulkers and medium and long range product tankers.

The company’s most-recently delivered unit is the 114,426 dwt Aframax tanker Seagalaxy. The naming and delivery of the tanker took place in February 2019, at Namura Shipbuilding’s yard in Japan.

Maritime Executive with additional report from World Maritime News

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