Why PETROLEUM

EQUALIZATION FUND

Must Stay

EDItORIAL

iNdUSTRYNigeria’s Rig Count depletes by Five as OPEC Slides by 11

Real Reason Behind Surge in Crude Oil Prices

NOCs Set to Reduce Exploration Budgets by 25% in 2020

To Finance its Energy Transition and industrialization, Africa Needs to Think Local

Oil Glut on Tankers Shows Signs of Shrinking

NLNG Export Revenue Threatened as Global demand Slides

NCdMB Celebrates 10 Years with a 10 Year Road Map

Concerns as Nigeria Misses Zero Gas Flare Out Target

African Energy Companies Join Equal by 30 Campaign and Commit to Equal Opportunities for Women in Energy

is Niger delta Uproar over NNPC Appointments Justifi ed?

COvid-19: Energy Revenues to Fall in Excess of $1 Trillion in 2020 - iEA

MAY SHORt tAKES

LiFESTYLEBlessed is the day, Eid el Fitr

ENTERTAiNMENTWhy Sex for Roles still Exist in Nollywood

AviATiONdanger over Plans to Close 17 Airports due to Revenue Shortfalls

PROPERTYCovid-19: Why Property Owners Should Consider Rent Relief for Tenants

SPORTOboabona disagrees with Obasi’s Claim of Bribe for Shirt ControversyBoxing:Mayweather ‘Attacks’ Highest-earning Sportsman after Signing $365m deal

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MAY 2020 VOL. 3 NO. 05

Patricia Simon-HartFounder and Managing director, Aftrac Limited

Star of the industry

42

23

COLUMNCan China Recolonise Africa?

26CONTENTS

The horrible drop in oil pric-es experienced by nations especially those of them

that rely heavily on the commod-ity as a source of income in the last three months should not be viewed only as a negative event, it has a positive side too.

The event has raised our col-lective national awareness of not only patriotism but on the dan-ger associated with a nation that depends on a single commodity as a source of foreign exchange. At a point when media reported that certain grade of oil price had dropped to negative, that is be-low zero, Nigerian social media space was dominated with the discussions.

Some of the discussions bor-dered around what could be the likely impact of the drop in rev-enue on the salaries and wages especially of public servants. There were insinuations that the government may not afford to pay salaries months to come, which sends panic among the of workers.

The consciousness of the con-sequences made many people to personally pray on the rebound of oil prices. I my self could not re-count how many times I received enquiry text messages about the current oil price on daily basis.

The good thing is that many people now monitor prices dai-ly, and very soon they will start to ask questions such as; How many barrels of crude was ex-tracted daily, How many was sold, How much was spent on

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

ed to pick, thanks to OPEC + un-relenting interventions. But our hope is that the government will pursue the economic diversifi ca-tion project with vigour, and they will make the best use of oil pro-ceeds to fi nance infrastructure especially power which is one of the catalysts that will spur the di-versifi cation.

Your favourite Valuechain of May is loaded with various In-dustry reports. Our cover story revolves around why any govern-ment should make the mistake of scrapping Petroleum Equaliza-tion Fund.

We have reports on the Nige-rian Content Development Man-agement Board, NCDMB past and future achievements. We also have reports from our Avi-ation, Property, Sport, Entertain-ment desks coupled with other interesting reports.

Thank you for your time and we hope you will continue to keep a date with us.

the rehabilitation of Refi neries. Was the rehabilitation work done or not. How many litres of crude went into Refi neries, How much products came out of the refi n-ing process, who and who owns oil fi elds or wells etc.

These and many more ques-tions should not be left for media or civil society organizations, ev-ery citizen must ask these ques-tions because oil is a common-wealth.

We are glad as a nation that the global oil prices have start-

Publisher/Editor-in-Chief

Deputy Editor

Acting Editor

Graphic Consultant

Circulation Manager

Online Editor

Photo Editor

Legal Adviser

Business Dev. Executives

Contributors

Musa Bashir Usman

Fred Ojiegbe

Benjamin ike

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danlami Nasir isah

Saidu Abubakar

Bashir Bello dollars

Lamir Kasim idris (Esq.)

Adeniyi Onifade (South)Abdulkarim Sani (North)

Gideon Osakaironhand S. ChukwuemekaHauwa Muhammad Lawal

Aisha Sambo

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4

The coronavirus pandem-ic, otherwise known as Covid-19, which has rav-

aged the world economy has continued to take its toll on oil production in Nigeria, as the country’s rig count dipped by five, having recorded 16 in April as against 21 recorded in March, data from the Organisation of Petroleum Exporting Countries, OPEC, shows.

This is happening at a time OPEC rig count showed mi-nus 11, having recorded 561 in April as against 572 recorded in March, while world rig count showed a dismal minus 448, after presenting 1,674 figure in April, as against 2,122 shown the previous month. Among OPEC members, Venezuela led the losers pack with 11, as it re-corded 14 in April as against 25 recorded in March. Iraq came third in the losers block with mi-nus four, having recorded 70 in April as against 74 recorded the previous month. This was fol-lowed by the United Arab Emir-ates (UAE), which had minus three, having recorded 65 as against 68 recorded within the period under review. Gabon’s rig count decreased by two, as it had six in April, as against eight recorded in March, while Libya had a decrease of one, as its rig count showed 10 as against 11 posted within the period under review.

On the gainers side, Alge-ria led by an impressive eight, as its rig count showed 42 as against 34 within the period un-der review, Kuwait came second with four, having recorded 54 as

against 50 recorded within the period under review. Saudi Ara-bia had a decrease of two as its rig count showed 116 in April as against 114 in March. An-gola had its rig count increase by one as it recoded seven in April as against six recorded the previous month. Three OPEC members had their rig count un-changed within the period under review. They are Congo, Equato-rial Guinea and Iran whose rig count remained at two, two and 157 respectively.

OPEC Crude Oil ProductionTotal OPEC-13 preliminary

crude oil production was said to have averaged 30.41 mil-lion barrels daily, mb/d in April, higher by 1.80 mb/d month-on month (m-o-m). Crude oil output increased mainly in Saudi Ara-bia, the UAE, and Kuwait, while production decreased primarily in Angola, Nigeria, IR Iran, and Iraq. In addition to the agreed production adjustments that should take effect as of 1 May 2020, on 12 May, Saudi Arabia, the UAE and Kuwait announced that they would voluntarily deep-en oil output adjustments from June, by 1 mb/d, 100 thousand barrels daily, tb/d and 80 tb/d, respectively, in an effort to expe-dite draining a global supply glut and rebalancing the oil market.

Non-OPEC liquids produc-tion growth in 2020 (including processing gains) has been re-vised down by a huge 2.0 mb/d from the previous assessment and is now forecast to decline by 3.5 mb/d to average 61.50 mb/d in 2020. The revision is

based on production shut-ins or curtailment plans announced by companies, including the majors, particularly in North America. Globally, not including the production adjustments of the countries participating in the Declaration of Cooperation (DoC), and as of 6 May 2020, around 3.6 mb/d of production adjustments have so far been announced. The 2020 oil sup-ply growth forecast for the US was revised down by 1.3 mb/d to show a decline of 1.4 mb/d year-on-year (y-o-y). Of the total revision, 0.9 mb/d was attribut-ed to production shut-ins for the year. Other large downward revisions were made for Canada and Brazil by 0.3 mb/d and 0.1 mb/d, respectively. Oil supply in 2020 is now forecast to grow only in Norway, Brazil, Guyana and Australia.

Industry 05:20

Nigeria’s Rig Count Depletes by Five as OPEC Slides by 11

–By Gideon Osaka

5

Industry 05:20

–By Fred Ojiegbe

As different countries of the world begin to ease lock-down, the global oil market

is responding to the develop-ment with positive rise in prices of crude oil.

In recent times, there was a recent drop in supply glut and improvement in oil demand, as rebound in the global oil market is gradually emerging.

Oil prices have been on the rise based on the assurances for a recovery in oil demand and eco-nomic activities, as Brent crude now sells above $30.

According to information ob-tained from oilprice.com, the

Brent crude shot up to $34.29 as on Friday, 22 May.

Also, the American headline crude, West Texas Intermediate (WTI) sells $31.92 per barrel.

Locally, the Nigerian headline crude, Bonny Light, also moved up to sell at $34.46 per barrel.

The expectation for fuel de-mand has gone up, as some U.S states and several countries in Europe, Asia, Africa and others are gradually easing the lock-down.

Crude oil prices are also surg-ing higher, Brent crude nears $30 per barrel with the slowdown in supply glut and improvement in

oil demand due to easing of lock-down in economies across Eu-rope, Asia, Africa, as well as the middle East.

Also, the federal government has gradually eased the first phase of lockdown where ma-jor essential services providers and manufacturers have been allowed to resume work in order to avoid complete economic col-lapse.

Consequently, it appears that the storage capacity crisis is easing off, as the price rally that is being experienced is likely to extend further in May or even be-yond.

Real Reason Behind Surge in Crude Oil Prices

6

Industry 05:20

Crude oil prices are also surging higher, Brent crude nears $30 per barrel with the slowdown in supply glut and improvement in oil demand due to easing of lock-down in economies across Europe, Asia, Africa, as well as the middle East.

Statistics shows that inven-tories rose by only 1.8 million barrels per day recently, which if confirmed, would represent the smallest increase compared to March, when the Coronavirus be-gan ravaging the entire world.

This shows that the supply glut is gradually easing. It also demonstrates just how sensi-tive the market has become to any change from the prevailing narrative in which global storage space could potentially fill as soon as late May, early June.

According to some analysts and the International Energy Agency (IEA), the global oil de-mand plunged by almost 30% in the month of April, but recovery is expected to be slow, especially with the continued shutdown of airports and flight operations.

With the output cut by OPEC+ and top oil producers being ef-fective from May 1, the oil market crisis is expected to be gradually easing off.

In another development, there seems to be a silver lining at the end of the cloud as global com-mercial activities which were ravaged by coronavirus pandem-ic thereby forcing closures and massive supply glut in the oil market are gradually picking up.

Group Managing Director of Nigerian National Petroleum Cor-poration (NNPC), Mallam. Mele Kyari, corroborated the assertion recently in a interview with news-men.

Kyari announced that the glut in the international crude oil mar-ket in the last few weeks was gradually easing off, causing

prices to pick up slowly, as trad-ers are beginning to find shelter for the commodity in their coun-tries.

It was reported in April that thousands of ships filled with crude were stranded at sea with nowhere to go as market was ex-periencing severe glut.

He stated, “At this point, we have seen a gradual easing of the situation. Those numbers of the uncommitted cargoes have gone down drastically and that’s why we see a gradual rise in pric-es in the last three to four days. It means that those uncleared transactions are now easing off.”

The GMD, also debunked re-ports making rounds in some quarters that Nigeria’s crude oil vessels were floating on the high seas because buyers were not available, stating that currently, no physical vessel offshore wait-ing for customers.

There were insinuations re-cently that an estimated 84 mil-lion barrels of Nigerian crude oil were stranded at sea as the country was short of storage due to low global demand and falling prices.

Some of the reports said car-go ships filled with Nigerian crude had “nowhere to go” while “a tanker was turned back from the US Gulf Coast, returning to the Canary Islands, where other Nigerian-hired ships are idle”.

But Kyari, who spoke with the media at the NNPC headquarters in Abuja, explained that the prod-uct was usually sold two months ahead, stressing that all crude oil transactions in the international

market are done on paper ahead of time.

He said, “When you hear stranded cargo, it doesn’t mean crude oil that’s floating some-where. Crude oil is always sold two months ahead and it’s on paper. Once you have that alloca-tion or you have purchased the paper, it is now the business of the trader where to take it. They either take it to a refinery or to storage.

“So, anytime you hear there are stranded cargoes it means they have not decided whether to take it to storage or they have not found the refinery at that point in time. So, it’s not any cargo float-ing at anytime that everybody can see.

“And when you hear strand-ed cargoes now, we are actually talking about June. We are now in May. This crude oil has not even gone out of the ground. So, there are many decisions cus-tomers can make. They can de-cide now to ask for a shutdown so that the crude does not even come to the surface.

Consequently, the Nigerian government is already adapting to the current economic realities in relation to dip in crude oil pric-es.

The Federal Executive Council (FEC) approved the revised 2020 appropriation act and placed oil prices benchmark at $25 per bar-rel and crude oil production at 1.7mbpd.

This is against the earlier benchmark of $57 per barrel ear-lier proposed and approved by the National assembly.

7

Industry 05:20

National oil companies (NOCs) globally are esti-mated to cut exploration

budgets by 25 percent on aver-age in 2020, says Wood Macken-zie, a Scotland, United Kingdom – based energy research and consultancy firm.

The analysis is based on an-nouncements and tracking well plans of 11 top spending NOC explorers, including three Chi-nese NOCs, PTTEP, Petronas, ONGC, Qatar Petroleum, Rosneft, Gazprom, Petrobras, and Pemex. Collectively, their combined orig-inal budgets may potentially be reduced by about 26 percent or $5 billion to around $14 bil-lion this year. Wood Mackenzie senior analyst Huong Tra Ho said: “While the range of explo-ration budget cuts for the NOCs is slightly more diversified than that of the Majors, conventional exploration remains important for them. “Most NOCs consis-tently spent between 12 percent and 35 percent of their upstream budgets on exploration, an aver-age of about 17 percent over the 2015-2019 period. This is signifi-

cantly higher than the majors’ average spending of 8 percent of upstream budgets on explo-ration.” NOCs with substantial international presence will prior-itise domestic activity, with deep-er cuts to overseas budget.

“Most NOCs on the list carry strong government mandates. Many NOCs prioritize current revenue and contribution to gov-ernment budgets at the expense of capital investments for the future. A dollar invested at home remains at home in the form of local employment, local services, taxes and government take,” Ho said. NOCs with constrained do-mestic resources could place more strategic importance on exploration compared to those with resource abundance. As organically added resources contribute 50-70 percent of their production in the next decade, Petronas and CNOOC are striv-ing to protect their exploration plans as much as possible. By contrast, Gazprom and Rosneft have long reserve lives and feel less pressure to rush their explo-ration plans. Wood Mackenzie

observed that another key factor to supporting exploration plans is financial strength. With strong balance sheets, Petronas, PTTEP and CNOOC are more able to continue with most of their high-impact exploration ambi-tions. “Some NOCs can achieve meaningful absolute savings from exploration cuts, especially if it originally makes up a big por-tion of the company’s upstream budget. An example is Sinopec, whose exploration spend con-sistently accounts for a quarter or more of upstream budget; in which case cutting back explo-ration significantly contributes to necessary savings,” Ho said. “Exploration budget cuts while necessary today, will impact companies’ future growth and sustainability. Given how import-ant exploration is for the NOCs and their growing share of global new discoveries, these budget cuts are likely short-term mea-sures rather than long-term. We expect NOCs to revitalize their exploration programs as the sec-tor recovers,” he added.

Exploration budget cuts while necessary today, will impact companies’ future growth and sustainabili-ty. Given how important exploration is for the NOCs and their growing share of global new discoveries, these budget cuts are likely short-term measures rather than long-term. We expect NOCs to revitalize their explora-tion programs as the sector recovers.”

NOCs Set to Reduce Exploration Budgets by 25% in 2020

–By Gideon Osaka

9

Industry 05:20

As global markets think of the post-Covid-19 world and how the pandemic

will reshape business models worldwide, African countries are coming to terms with a bit-ter reality: the continent has still not entered the Fourth Indus-trial Revolution and is heading towards its first recession in 25 years.

While the impact of the pan-demic on African economies is expected to be lesser than in Europe or North America, it still puts to the forefront the conti-nent’s overdependence on key commodities for its economies to function, and under-invest-ment into social infrastructure. For Africa, the COVID-19 pan-demic is turning into a wake-up call to find better ways to in-dustrialize, chief amongst them being access to reliable, cheap, and clean energy. Given global

liquidity constraints however, financing Africa’s energy tran-sition and supporting industri-alization will require becoming more competitive and finding new ways to mobilize capital across key industries and proj-ects.

The topic was at the centre of a leading webinar discussion between Kola Karim, Managing Director and CEO of Shoreline Energy International, Vitol Se-nior Investment Manager Ste-ven Brann, and Bambili Group Managing Director Nyonga Fofang. The webinar was or-ganized by the African Energy Chamber and hosted by Africa Oil & Power.

The key to industrialization in Africa is access to power, which heavily relies on Africa’s ability to get its natural resources right, especially natural gas. Up until now, most of Africa’s gas has

been produced for the benefits of foreign markets in Asia, the Americas, Europe, and the Mid-dle East, where it is shipped as LNG. LNG prices have dropped to historic lows and are cur-rently below the $2 threshold in Europe and Asia, while African power producers still pay above that price to get natural gas in their turbines. Current market prices for natural gas are ex-pected to remain depressed for a while, and should be a strong incentive for African power pro-ducers to use LNG as a feed-stock and switch their fuel oil or coal plants to LNG which can be easily procured on the conti-nent.

However, proper manage-ment of Africa’s natural resourc-es does not stop at switching existing power plants to gas in order to benefit from a cheap and locally-available resource.

To Finance its Energy Transition and Industrialization,

Africa Needs to Think Local

Africa needs to use the solid base of its natural re-sources to create opportunities and change the narra-tive around its industrialization by making a difference in its own energy space. For such a paradigm shift to happen, African sovereigns need to take the lead. Only at the sovereign level can a country raise several bil-lion dollars from multilateral agencies and invest in the necessary projects and infrastructure that will support private sector investment and growth.

–By Fred Ojiegbe (with APO Group)

10

Industry 05:20

It rather requires a profound transformation of how African countries see energy and how they plan to power up their economies moving forward.

In doing so, financing will be-come an even greater challenge as capital becomes scarce and investors look for only very resil-ient assets to invest in. In that regard, participants noted that it is currently challenging to mon-etize Africa’s LNG across indus-tries because industrial custom-ers are reluctant to signing the kind of multi-year commitments required by gas producers to raise debt. Because potential industrial users do not know what the future holds and do not get a clear vision on what their country’s energy mix will look like, their reluctance to switch to gas is directly impacting the attractiveness of the sector and has them keep paying expen-sive energy instead. Similarly, the imports of fuel oil and coal to power industries has become such a habit that making a long-term commitment to developing LNG receiving and processing infrastructure is now a matter of debate.

Participants highlighted the

responsibility of both African sovereigns and the private sec-tor in maintaining the continent in that energy status quo. In a post Covid-19 world, a situation in which Africa exports its en-ergy while its people are in the dark, and imports finished prod-ucts while its youth is unem-ployed is no longer viable. The industry is calling for a strong sovereign participation in estab-lishing a connection with the pri-vate sector and thinking holisti-cally about the development of the continent. While foreign ex-change and international capital will continue to be needed, there is an urgent need to energize African communities and neigh-bours first. Nigeria cannot think of its gas development with-out keeping in mind the energy needs of its immediate neigh-bours for example. Similarly, South Africa cannot plan for its energy future without taking into consideration the vast gas reserves of its neighbours. The list of examples goes on.

Africa needs to use the sol-id base of its natural resourc-es to create opportunities and change the narrative around its industrialization by making a dif-

ference in its own energy space. For such a paradigm shift to happen, African sovereigns need to take the lead. Only at the sovereign level can a country raise several billion dollars from multilateral agencies and invest in the necessary projects and infrastructure that will support private sector investment and growth. Only political will can truly unlock the value of African cross-border energy coopera-tion and open up the doors for a wider African private sector co-operation across industries and within a prosperous free trade continent.

Meanwhile, additional efforts need to be done to mobilize local and patient capital from domestic funds and African family fortunes. Participants concluded on the fact that there is a lot of do-good capital sitting all across the continent, but its mobilization requires the pre-sentation of above-standards bankable projects run by out-standing leadership teams. It is up to African leaders and Afri-can private sector executives to put the continent on a new path to prosperity.

Steven Brann Nyonga FofangKola Karim

11

Industry 05:20

It has emerged that one of the oil market’s most obvious signs of oversupply, millions of barrels

being stored on tankers all over the world, is showing very tentative signs of shrinking.

According to S&P Global Platts, North Sea oil traders offered al-most 8 million barrels of crude for sale on a pricing window. Some of the 13 cargoes being sold were pre-viously being stored at sea. The of-fers, most didn’t end in deals were the fi rst of their kind since a global surplus began overflowing onto tankers early last month.

The offers provide an insight into how physical crude traders view the all-important North Sea oil market, where prices serve as benchmark for millions of barrels all over the world. The amount stored on ships globally is tentatively showing signs of falling too. It stood at 155 million barrels on Thursday 21st, down from 176 million barrels last week, according to Vortexa Limited, a tanker analytics fi rm. Though vol-umes have fallen, the amount float-ing is still more than double what it was two months ago.

“Crude in floating storage is likely to fall fi rst and fastest upon any de-mand strength, as it’s typically the most expensive form of storage available.

“It’s too soon to say if the shrink-ing floating hoard will mark the start of a trend, or whether it’s just

the ebb and flow of trading. Most estimates indicate that oil produc-tion continues to exceed demand by millions of barrels a day, im-plying there’s an excess that still needs to be stored.

“Nevertheless, the drop in stock-piles at sea mirrors a sharp reduc-tion in the fi nancial rewards that the oil market offers those who’re storing.

“A so-called supercontango, where more-immediate prices are deeply discounted relative to later months, has fallen sharply in recent weeks. At one stage, the gap be-tween fi rst-month Brent crude and supplies six months later stood at $14 a barrel. That equated to $28 million for a standard supertanker cargo. Now the gap is just $3.43 and wouldn’t cover the cost of hir-ing the ship,” said Jay Maroo, a Se-nior Analyst at Vortexa.

Many vessels were booked with options to store several weeks ago are only now starting to do so. Many of those will keep storing be-cause they were booked for a fi xed period of several months, accord-ing to Eugene Lindell, an oil market analyst at consultant JBC Energy GmbH.

He explained that some of the storage that’s being discontinued had been happening for logistical reasons a ship might have been running late unloading because the receiving terminal wasn’t ready, al-

lowing the vessel’s owner to charge an expensive waiting fee known in the shipping industry as demur-rage.

“Every day you are stuck you are paying demurrage, so there’s a vested interest to solve the prob-lem.,” Lindell said. “If you look at the current contango rates, it’s diffi cult to work now.”

It was observed that the signs of unwinding or at least a slowing in growth rate of floating storage come amid growing signs that oil demand is recovering. There’s more oil on supertankers en route to China than at any time in the last three years, and consumption of fuels is slowly picking up in Europe and the U.S. That has helped pull differentials for key North Sea oil grads like Brent and Forties higher in recent days, even if the risk of a second wave of Covid-19 cases looms large over the market. Even so, consistent selling of previous-ly-stored cargoes could stifle future oil-price rallies since floating stor-age is normally viewed as the sign of an oversupplied market.

“There are still a lot of unsold car-goes waiting to offload in the North Sea, so the shift in contango might address this fi rst,” said Kit Haines, an analyst at Energy Aspects. “We’ve seen a return to lockdowns in some parts of Asia so it’s not all guaranteed that we race back to normal.”

Oil glut on tankers Shows Signs of Shrinking

–By Gideon Osaka

12

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E� ective from February 2020

Industry 05:20

The crash in global demand for liquefi ed natural gas appears to pose a threat

to Nigeria’s revenue from the ex-port of the commodity.

Nigeria, which is among the top 10 largest exporters of the LNG in the world, has a capac-ity of 22 million tonnes annual-ly. The country, which is one of Europe’s key LNG suppliers, is said to have seen demand for its cargoes in Europe tumble in the coronavirus pandemic as buyers defer deliveries. Europe’s comparatively transparent pric-ing has long made it a favoured destination for cargoes. Now, with demand there slumping, more gas is going into storage facilities, and those are fi lling up fast, according to WorldOil.

Over the past two months, Nigeria continued to send the LNG cargoes to one of its main markets, Europe, but with many major European economies in lockdown, demand has plunged, and customers with options to defer have been postponing the offloading of the cargoes, according to oilprice.com. This has created a fleet of tankers

carrying the LNG that are now just floating storage, accord-ing to commodity tracking fi rm Kpler. The report said the LNG prices at their lowest in years had forced traders to keep LNG on the tankers, waiting for de-mand to improve. “The worst is yet to come, we will likely see su-per low prices in late June, July, August,” the Managing Director for Energy at Accenture, Manas Satapathy, has said.

The collapse in crude oil price has no doubt added to pres-sure on the LNG prices, some of which are linked to oil. The Group Managing Director, Nige-rian National Petroleum Corpo-ration, Mele Kyari, said in March that over 12 LNG cargoes were stranded in the market globally, for the fi rst time ever. “The LNG cargoes that are stranded with no hope of being purchased be-cause there is abrupt collapse in demand associated with the outbreak of coronavirus,” he had said.

Rystad Energy said in a re-port that the crash in the LNG demand in Europe during the pandemic and the high storage

levels would likely mean that the continent would struggle to act as a sponge to absorb excess LNG supply this year as it did in 2019. Last year, Europe became the “de facto global LNG sink,” when milder winter in Northeast Asia slowed down LNG demand growth there, the energy re-search fi rm said.

In 2019, Europe’s total LNG imports surged by 80 per cent compared to 2018, while in Jan-uary and February 2020 before the European lockdowns and when the coronavirus hit Asia Europe’s LNG imports jumped 35 per cent, thanks to the UK, Spain, and Belgium. Rystad En-ergy said, “We still don’t have an end date for when Europe will completely re-emerge from lockdown, and the impact will probably be deeper coming into the summer months. “With gas storage tanks already almost fi lled to the brim, Europe’s ca-pacity to import and actually use the same amount of the LNG as in 2019 seems like a tall order, especially if we see anoth-er mild winter.”

NLNG Export Revenue Threatened as Global demand Slides

–By Gideon Osaka

14

Industry 05:20

The local content aspects of the Nigerian oil and gas industry came under the

spotlight recently as the enact-ment of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act clocked 10 years.

The NOGICD Act which was signed into law on April 22, 2010 and gave birth to the Nigerian Content Development Board (NCDMB), has been instrumental to the promotion of the develop-ment and utilization of indige-nous capacities in Nigeria.

Following the signing of the Act into law, the NCDMB was es-tablished to create and utilize in-digenous capacity in Nigeria’s oil and gas industry which hitherto had been dominated by foreign entities.

The NCDMB’s unique strate-gies in overseeing the implemen-tation of the NOGICD Act has

resulted in an ever-growing suc-cess story of improved local con-tent in the Nigerian oil and gas industry, and this has continued to attract a deluge of accolades

to the Board and its leadership.Participation of local organi-

sations in the development of a country’s resources is very crit-ical as it is an essential ingredi-ent for any nation that wants to create a thriving economy for its population.

Such participation and atten-dant development can only be-come a reality if it is hinged on the adoption of local content phi-losophy.

Between 2010 and 2017, the Board was able to spearhead the growth of Nigerian Content level from 5 per cent to 26 per cent and now 30 per cent through systematic increase in capaci-ty utilisation of the local supply chain providing services in man-ufacturing, fabrication and con-struction, engineering, marine operations and logistics, well drilling, inspection testing, cer-

NCdMB Celebrates 10 Years with a

10 Year Road Map

To consolidate on the gains going forward, the mon-itoring board, two years ago launched its 10-year Stra-tegic Roadmap to move Nigerian content in the oil and gas to 70 per cent by the year 2027. The Nigerian Con-tent 10-Year Roadmap would enable the nation to start reaping the full benefits of its oil and gas resources, with clear linkage to other sectors of the economy.

–By Fred Ojiegbe

Engr. Simbi Wabote

15

tification, and project manage-ment. Growth was also achieved through utilisation of indigenous manpower in oil and gas opera-tions.

To consolidate on the gains going forward, the monitoring board, two years ago launched its 10-year Strategic Roadmap to move Nigerian content in the oil and gas to 70 per cent by the year 2027. The Nigerian Content 10-Year Roadmap would enable the nation to start reaping the full benefits of its oil and gas resources, with clear linkage to other sectors of the economy.

According to the Executive Secretary of the NCDMB, Engr. Simbi Kesiye Wabote the road-map documents the short, me-dium, and long-term targets to increase Nigerian Content per-formance to 70 per cent by 2027.

The key rewards from the im-plementation of the 10-year road-map are the creation of 300,000 jobs from industry activities and the retention of $14bn in-country

out of the $20bn annual industry spend.

The execution of these initia-tives will go a long way towards the attainment of the objectives of the Board’s 10-year strate-gic roadmap, one of which is to achieve70% local content by 2027.

Relying on published expert outlook, news reports and indus-try data obtained from the Board, Valuechain analyzed how the current leadership of the NCDBM has fared so far in transforming these initiatives into reality.

A deep dive analysis of the 10-year-roadmap show that the Board hinged its plans on five strategic pillars and four en-ablers, each of which address key focus areas for development of Nigerian content: The five pil-lars are namely: Technical Capa-bility Development, Compliance and Enforcement, Enabling Busi-ness Environment, Organisation Capability and Sectorial and Re-gional Market Linkage.

The four enablers are Fund-ing, Regulatory Environment, Collaboration and Stakeholders Engagement and Research and Development.

On the Technical Capability pillar, available statistics show that the Board has moved the Ni-gerian Oil and Gas Park Scheme (NOGAPS) from mere plans on paper to actual construction in two pilot locations – Odukpani in Cross River and Emeyal 1 in Ogbia Local Government of Bayelsa State. Each of the parks will create employment for 2000 persons when fully operational and will spur manufacturing of critical oil and gas equipment, tools and spare parts close to oil fields.

The NCDMB is spearheading the Project 100 Initiative and 60 oil and gas start-ups have been identified. The Board is also sponsoring the deployment of special interventions for their in-cubation, maturation and growth into world class service compa-

Industry 05:20

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Industry 05:20

nies. This intervention would in-clude capacity building, funding and access to market.

Findings further show that the Board has also commenced International Certification pro-gram for marine personnel. The cadets are already on board for-eign vessels and would stay for 12 months, which would qualify them to be awarded the Certifi-cate of Competence (COC), with which they can work in the Nige-rian waters and overseas. The program will address the deficit of trained cadets in the maritime and oil and gas industries and re-duce the dependence on foreign personnel in the marine opera-tions.

The Board has also reported-ly provided equity investment to catalyse the establishment of 5,000 barrels per day modular refinery by Waltersmith Refining & Petrochemical Company Lim-ited in Ibigwe, Imo State and in the 12,000barrels per day Hydro-skimming Modular refinery by Azikel Petroleum Limited at Obu-nagha, Gbarain, Bayelsa State.

Available data show that the Waltersmith refinery is on track for completion later this year while the Azikel Refinery would be completed in 2021. About 300,000 liters of diesel per day are expected from the Waltersmith

refinery in addition to various volumes of naphtha, kerosene and fuel oil while Azikel refinery will produce about 1.5million li-tres or 50 trucks of petrol daily, including 170,000liters of diesel, and other products. Both mod-ular refinery projects have huge prospects for jobs creation, val-ue retention, petroleum products availability and the development of in-country capability and they fit perfectly with the Board’s vi-sion to serve as a catalyst for the development of Nigeria’s oil and gas sector.

On the second pillar, Compli-ance and Enforcement, it was gathered that the NCDMB had put in place seven companies to assist in carrying out specif-ic and specialized monitoring and compliance functions in the upstream, midstream, and downstream sectors of the in-dustry. The Board also deployed chartered accounting firms to carry out forensic audit of Ni-gerian Content Development Fund (NCDF) remittances. The Forensic Audit started in No-vember 2018 and has revealed huge amounts of non-remit-tances from operating and ser-vice companies. At the moment, some companies have owned up to their indebtedness and have started addressing their

infractions while a few compa-nies have remained recalcitrant. The Board has concluded plans to hand over such companies to the Economic and Financial Crimes Commission (EFCC) for prosecution.

On the pillar for Enabling Business Environment, the Ser-vice Level Agreements (SLAs) NCDMB signed with the Nigeria LNG, International Oil Companies (IOCs) under the aegis of the Oil Producers Trade Section (OPTS) and Independent Petroleum Producers Group (IPPG) have helped to shorten the NCDMB interface on the tendering cycle in the Oil and Gas Industry from 36 months to nine months. This has also enhanced broad com-pliance with the requirements of the Nigerian Content Act and led to significant reduction in the unit cost of oil production in Nigeria. During the last review, major operating companies, in-cluding SPDC/SNEPCo, Chevron, Total E&P and First E&P all rated NCDMB very high on the imple-mentation of the SLA.

Highlights of other aspects of roadmap pillar are: Sectoral and Regional Market Linkages (ex-tending collaboration with other sister agencies and MDAs with a view to improving patronage of local companies); Organisation-

Findings further show that the Board has also com-menced International Certification program for marine personnel. The cadets are already on board foreign ves-sels and would stay for 12 months, which would qualify them to be awarded the Certificate of Competence (COC), with which they can work in the Nigerian waters and overseas. The program will address the deficit of trained cadets in the maritime and oil and gas industries and reduce the dependence on foreign personnel in the ma-rine operations.

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Industry 05:20

The Executive Secretary recently confirmed that the Board would collaborate closely with the 9th National Assembly to complete the amendment of the NOGICD Act, so as to extend it to key sectors like Power, Con-struction and Information Communication Technology.

al Capability (further developing the capacity and capability of staff members); Regulatory envi-ronment (working with the Office of the Minister of State for Petro-leum Resources for sign-off of the Ministerial Regulations, and the Nigerian Content Commit-tees in the Senate and the House of Representatives for extension of coverage of the NOGICD Act); Collaboration and stakeholder engagement; and-Research and development initiative leading to the launch of a $50m inter-vention fund as part of efforts to deepen domestic research and development (R&D) activities in the oil and gas industry in Nige-ria.

On Funding, the NCDMB have so far disbursed a total of $160m out of the $200m Nige-rian Content Intervention Fund (NCI Fund) to qualified firms, as part of efforts to provide acces-sible credit for Nigerian oil and

gas service companies and com-munity contractors with single digit interest rate and one year moratorium.

The Executive Secretary re-cently confirmed that the Board would collaborate closely with the 9th National Assembly to complete the amendment of the NOGICD Act, so as to extend it to key sectors like Power, Construc-tion and Information Communi-cation Technology.

It is noteworthy to mention recent strides through partner-ship by the Board that has seen the establishment of the Polaku cooking gas cylinders manu-facturing facility. The NCDMB is partnering with a gas production and manufacturing company for the establishment of 400,000 per annum Type 3 LPG compos-ite cylinder manufacturing plant in Polaku, Bayelsa State. This is in line with its resolve to develop facilities that will improve Nige-

ria’s ability to meet domestic gas demand.

NCDMB and the Oil Produc-ers Trade Section (OPTS) have also mapped out plans to de-velop marine vessels standards for the oil and gas industry. The standards, which will be applied in marine tenders, will state uni-form technical specifications that the marine vessels must meet to be eligible to operate in the industry.

The impact of Nigerian Con-tent in the oil industry has no doubt stimulated other sectors like Information & Communica-tion, Automobile, Construction and Power to adopt some of the templates in their policy formula-tions.

Some African countries like Kenya, Congo Brazzaville and Uganda as well as Gabon and Angola have come to Nigeria in the past for mentorship on Local Content initiatives.

18

Industry 05:20

Concerns as Nigeria Misses Zero Gas Flare Out Target

The loss of billions of dollars through gas flaring has continued despite the tar-

get by the Federal Government to end the practice this year and at a time the government reve-nues are stretched by the impact of the decline in oil price caused by the COVID-19 pandemic.

Former Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, had during a mid-term review of the activities of the ministry between August 2015 and August 2017 an-nounced government’s commit-ment to end gas flaring by 2020, ten years ahead of the 2030 tar-get set by the United Nations, to stop gas flaring.

Gas flaring is the practice of burning natural gas associated with crude oil extraction by oil

companies.Nigeria has the largest prov-

en gas reserves in Africa and the 9th largest in the world (as at 2018) with about 201 trillion cubic feet of natural gas that is 900 times the country’s total oil reserves.

Despite the large proven and unproven gas reserves the coun-try holds, daily gas production remains low and even some of the meagre volume that is pro-duced are still flared.

Data from the Department of Petroleum Resources (DPR) show that the percentage of gas flared in Nigeria has been reduc-ing since 2002 and stood at 10 per cent in 2018. However, in terms of volume of gas flared, the country still ranks in the top 10 gas flaring countries in the

world with 7.4 billion cubic feet of gas flared in 2018. Total gas flared in Nigeria accounted for 6.9 per cent of the top 10 gas flaring countries in 2018.

Economic Cost of FlaringAccording to a report by lead-

ing audit firm, PwC Nigeria, the Nigerian economy lost a whoop-ing N233 billion to gas flaring in 2018. This represented 3.8 per cent of the total global flare same year.

The report launched recently and titled, “Assessing the Impact of Gas Flaring on the Nigerian Economy: Part 1,” showed that while the total economic cost of the flaring in 2018 stood at N233 billion, the total cost of the envi-ronmental effect was N28.76 billion.

–By Fred Ojiegbe

19

The report further revealed that the N233 billion lost could have been used to finance some priority developmental projects in the country, such as health-care, capital expenditure, hous-ing, electricity, roads, rehabilita-tion of airports and aerodrome, among others.

According to the report, the monetary economic value addi-tion that could have been recov-ered from the derivatives of nat-ural gas flared in 2018 totaled $2.73bn.

Shifting the goal PostNigeria has been making

frantic efforts, setting and shift-ing deadlines towards ending gas flaring. The country’s un-successful attempts could be traced back to 1969 when the military government led by Gen-eral Yakubu Gowon directed

oil companies to end gas flar-ing within five years. The 1974 phase-out plan fell through fol-lowing forcing the government to extend the deadline to 1979 with the enactment of the Asso-ciated Gas Reinjection Act 1979. But the multinational oil firms also failed to meet the 1979 dateline, thus pushing the civil-ian administration led by Alhaji Shehu Shagari to defer the ze-ro-gas flaring deadline to 1984. Although, routine gas flaring was outlawed since 1984, ac-cording to Section 3 of Nigeria’s Associated Gas Reinjection Act 1979, the practice has continued unabated till date as the oil com-panies choose to pay fine.

According to energy experts, one of the reasons the mile-stones set by the government to reduce gas flare have not been achieved is because oil and gas

companies had, before the pas-sage of a new gas flare regula-tion of 2018, found it cheaper to pay the pittance as gas flare penalties- amounting to no more than a few cents per thousand standard cubic feet of gas flared per day, rather than to invest in the expensive infrastructure, re-quired to reduce the gas flares.

President Muhammadu Bu-hari in his capacity as the Min-ister of Petroleum Resources signed the Flare Gas (Prevention of Waste and Pollution) Regula-tions, 2018 (“the Regulations”) into law, a regulation which sought to minimize the envi-ronmental and social impact caused by flaring natural gas, protect the environment, prevent waste of natural resources and create social and economic ben-efits from gas flare capture. The effective commencement date

Industry 05:20

Despite the large proven and unproven gas reserves the country holds, daily gas production remains low and even some of the meagre volume that is produced are still flared.

President Muhammadu Buhari Mallam Mele Kyari

20

of the Regulations was 5 July 2018.

The key highlights of the law showed that the regulations prohibit producers from flaring gas from any facility operated by such producer, except pursu-ant to a certificate issued by the

Minister based on the provisions of the Associated Gas Reinjection Act. This prohibition also applies to routine flaring or venting of nat-ural gas, except flaring for safety reasons, by Permit Holders.

The regulations also estab-lished a new gas flaring payment regime for gas flared within an OML area or a Marginal Field. According to the law, “Com-panies that produce at least 10,000 barrels of oil per day shall be liable to a flare payment of $2 per 28.317 standard cubic meters (1,000 standard cubic feet (scf)) of gas flared. Howev-er, companies which produce less than 10,000 barrels per day shall be liable to a flare payment of $0.5 per 28.317 standard cu-bic meters (1,000 standard cu-bic feet (scf)) of gas flared. This is a significant increase from the erstwhile flat penalty of N10

per 1,000 scf of gas flared that has been in force since January 1998.”

in the new regulation, the Min-ister reserves the right to revoke any issued Gas Flare Certificate for failure by the Producer to comply with the regulations. In addition, Permit to Access Gas Flare can be withdrawn under certain circumstances.

The Regulations further stipu-lated a penalty of N50,000 or an imprisonment term of not more six months “where an authorized agent of a Producer supplies in-accurate or incomplete Flare Gas Data to the Department of Petroleum Resources. The Reg-ulations also imposed an addi-tional daily penalty of $2.50 per 1,000 scf of gas flared or vented within the OML, where a Produc-er fails to meet the several re-quirements including supplying accurate Flare Gas Data.”

The Regulations was issued to govern and implement the Nigeria Gas Flare Commercial-ization Programme (NGFCP), which is aimed at harnessing Ni-geria’s flare gas for sustainable value and wealth creation.

However, there are some con-cerns as to whether government can realize its desired objectives, given the claim by some Produc-ers that a significant amount of the gas currently being flared is due to safety reasons, which the Regulations allow. There is also the claim that some of the flare out projects are already part of a Field Development Program that the National Petroleum In-vestment Management Services (NAPIMS) has approved.

Prior to 2018, it made more sense to flare and pay a penal-ty of several cents per MSCF, because there was no stringent enforcement. However, with the increase in the penalty to $2.00 (per MSCF/D) for companies producing more than 10,000

bpd, and $0.50 for companies producing less, the new regula-tion and the increase in penal-ties might be responsible for the discrepancies.

Why targets FailedSpeaking recently on why the

2020 zero gas flare target might not be feasible, the Programme Manager, Nigerian Gas Flare Commercialisation Programme (NGFCP), Justice Derefaka, ad-mitted that the government was experiencing slips hence a slight adjustment of the timeline.

“We have gone back to the drawing board to come up with a robust timeline, where we will actualize some of it. The Feder-al Government has said it would end gas flaring by 2020, but the United Nations’ deadline is 2030. Not all the flare sites will go by 2020. Some will go and the rest after,” he said.

“The reason is that we are not looking to construct long pipelines. But we are looking at scalable technology that can be used to harness flare”

Derefaka said that the govern-ment’s gas commercialization plan would sustainably create value around gas flaring to save lives, the environment and en-able the government to generate revenue.

The PwC report, while high-lighting some challenges in meeting the 2020 deadline to achieve zero gas flaring listed delay in passing other compo-nents of the Petroleum Industry Bill (PIB); absence of infrastruc-tural support; and below optimal punitive measures, as some of those challenges.

Experts suggest that to re-duce gas flaring, Nigeria needs to plant 7.5 million hectares of trees; which will absorb 638 mil-lion cubic tons of carbon from flaring and other sources of car-bon emission.

Industry 05:20

Mr. Ibe Kachikwu

21

For e

nqui

ries,

call:

070

5 50

0 10

00

Star of the Industry 05:20

Patricia Simon-HartFounder and Managing Director, Aftrac Limited

23

Star of the Industry 05:20

Patricia Simon-Hart is the founder and Managing Di-rector of Aftrac Limited,

an oil and gas service company that has been in operation for over 20 years. She is also the current Secretary to the Exec-utive Board of PETAN (Petro-leum Technology Association

of Nigeria), and Vice President Upstream to Women In Energy Network (WIEN), an Association she co-founded to foster gen-der balance and development of women in the Energy space. She has over 30 years of experi-ence in Business Management, Public Policy and Public Admin-

istration.Patricia started her career in

the Information and Communi-cations Technology (ICT) sector, which includes offering technol-ogy solutions to the oil and gas Sector. From there she set out to establish her own Oil Service company.

In 2009, she was appointed Commissioner for Water Resources and Rural Development to the Government of Rivers State, where she carried out the most aggressive Water Sector reforms in the state, that attracted invest-ment from numerous International Development Agen-cies and succeeded in securing a US$ 280 million loan from the World Bank and AfDB to revamp water supply to Port Harcourt City.

–By Danlami Nasir Isah

Patricia Simon-HartFounder and Managing Director, Aftrac Limited

24

Star of the Industry 05:20

AFTRAC began operations in 1998 offering a range of tech-nology driven solutions to the Nigerian Oil & Gas Sector, in-cluding Sand Management, Pro-cess Diagnostics & Testing, and Interwell Studies. In 2007 Aftrac extended their operations to in-clude Surface Well Testing, EPF and Flowback Services.

In 2009 she took a six year break from the Private Sector to serve her State; called into public service she was appoint-ed Commissioner for Water Re-

sources and Rural Development to the Government of Rivers State, where she carried out the most aggressive Water Sector reforms in the state, that at-tracted investment from numer-ous International Development Agencies and succeeded in se-curing a US$ 280 million loan from the World Bank and AfDB to revamp water supply to Port Harcourt City.

She returned to her business in the private sector in 2009 but she continues to work in the de-

velopment sector on an ad-hoc basis.

Patricia Simon-Hart has a Masters in Public Administra-tion from Harvard, Kennedy School of Government, a Bach-elors Degree in Mathematics/Computer Science & Statistics, from the University of Port Har-court, and is also an alumnus of London Business School.

She has two daughters, en-joys playing golf, and is commit-ted to a variety of Christian char-ity projects and programs.

25

Why PETROLEUM

EQUALIZATION FUNDMust Stay

There is a popular saying that, ‘a cow does not know the value of its tail until it

is cut-off’. For the consequenc-es it may expose itself to, the ‘cow’ needs to be alerted about the value of its tail in order to prevent it from being cut-off.

The piercing effect of the Coronavirus pandemic on the nation’s economy has attract-ed media attention, specifi cally regarding what it represents in possibly destabilizing the na-tion’s revenue expectations for the 2020 fi scal year.

Part of this attention is the re-cent report that, Nigeria’s Presi-dent has set up a panel to con-sider the implementation of the famous Steve Oronsaye report

on public sector rationalization and restructuring which rec-ommended the merging, and in some cases, scrapping of some government agencies in order to save the huge cost of gover-nance in the country.

Government has every jus-tifi cation to embark on this cost-saving mechanism at this crucial moment, considering the fact that most of the govern-ment agencies and parastatals that are earmarked for this ex-ercise are mere duplications, only adding little or no value to the country. Almost all of them rely heavily on the monthly sub-vention from the federal govern-ment which greater part of the inflow is spent on payment of

salaries and overhead costs.One amazing revelation is

that, it is not all the agencies of the federal government initial-ly marked for rationalization or restructuring that are still a bur-den on the federal government. One of such agencies is the Petroleum Equalization Fund (Management) Board, PEF (M) B.

The dominant factor in the realities of the existence of the Petroleum Equalization Fund (Management) Board, PEF (M) B is not in its independence on government funding but in its representation of the interest of the generality of Nigerian end-users of fuel, who, collec-tively, are key components of

–By Saidu Abubakar

Cover Story 05:20

26

the economy. PEF (M) B, as it’s usually re-

ferred to, is a statutory agency of the Federal Ministry of Pe-troleum Resources, established by Decree No. 9 of 1975 [as amended by Decree No. 32 of 1989, mainly to administer uni-form prices of petroleum prod-ucts throughout the country. This is achieved by reimbursing a marketer’s transportation dif-ferentials for petroleum prod-ucts’ movement from depots to their retail outlets fi lling station in order to ensure that, products are sold at uniform pump price throughout the country.

In a nation with Nigeria’s landmass, equalization is very important in order to keep eco-nomic activities alive in all the communities across the coun-try. The impact of any slight variation in fuel price in any lo-cation in the country could bring about an unimaginable effect in costs of output.

Equalization is a common practice in South Africa, UK, and California-USA, arguably the largest capitalist economy in the world. It is not an idea that should be surrendered to the forces of demand and sup-ply. Equalization is a deliberate government policy which is car-ried out through a systematic absorption of any additional cost of moving products from advantaged areas like depots or coastal locations to less-ad-vantaged areas, including hin-

terlands. Through such inter-vention, consumers from both advantaged and disadvantaged areas purchase at the same cost. Hence, the logic that, the cost for those at disadvantaged locations benefi t from a subsidy regime for parity with those in advantaged areas, through the fund.

Importantly the source of the PEF funds is not from govern-ment treasury, but principally from the net surplus revenue recovered from oil marketing companies. Operating under a well structured and coordinated system, the fund has its opera-tional offi ce in Lagos, fi ve Zon-al Offi ces as well as 22 depot offi ces located at the 21 NNPC depots and marketers’ storage facilities at Apapa and Ibadan.

Three basic steps are in-volved in the equalization pro-cesses, namely, the Nation-al Transportation Average, Inter-District, and Bridging. It operates in such a manner that, the contribution zone is clas-sifi ed within a radius of 50 and 100 kilometers from the source of lifting. However, marketers may forward verifi able claims, if the distance is up to 150 kilome-ters and beyond, in these areas, with the maximum being 450 kilometers which is nine zones. In other words, based on NNPC depot guidelines, between 150 kilometers and 450 kilometers will attract claims from the ac-cumulated fund.

The next classifi cation is bridging, where a distance range covers 450 kilometers and above, and attracts enhanced claim, as claims go higher com-mensurate with distance. It is equally signifi cant to note that, the rates paid are not arbitrary but system-driven and immune from manipulation. It is calcu-lated by a committee compris-ing PPPRA, NNPC, PPMC, NAR-TO, PEF, IPMAN and the unions. Estimations are comprehensive up to the least decimal of the cost variables, including wear and tear of the vehicles. On this basis, a tabular analysis is evolved, defi ning the distances and the rate per litre being cal-culated through Google map.

With a number of depots in Suleja, Minna, Kaduna, Yola, Gusau, and Gombe, yet, far lo-cations such as Dutse to Dama-turu and Sokoto to Birnin Kebbi are not linked with pipelines. As such, products need to be transported to those areas by road, including to almost all bor-der towns. For example, from Dutse, Jigawa state to Bab-ban-Mutum, a boundary loca-tion between Nigeria and Niger Republic, there is no depot. It is the same with Suleja to New Bussa in Niger state, a journey of about nine hours, with mostly bad roads. This constraints of-fer a good case for the setting up of PEF, consequently.

Among other things, the fund handles the transportation dif-

In a nation with Nigeria’s landmass, equalization is very important in order to keep economic activities alive in all the communities across the country. The impact of any slight variation in fuel price in any location in the country could bring about an unimaginable effect in costs of output.

Cover Story 05:20

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ferentials arising from the in-ability of the government to link all the 774 local government ar-eas with pipelines. If the agency is removed today, consumers close to the seaports or depot may likely not feel the pain, but people who are far away from the source of loading such as Kamba, Ilaila and Abaden and the rest, will certainly bear the brunt. If this is allowed, then the price of fuel in those far lo-cations may go up to N400 per litre in addition to cost elements and ex-depot price. The conse-quent hardship is only better imagined.

Let’s take an instance of a location such as New Bussa in Niger State. According to find-ings, there are about 14 federal establishments located there. If the equalization is removed, the cost of running on energy and fuelling of cars and generators for the federal establishments will multiply at least four-folds. If N50 million is being expended in a year it would become N250 million in a year and that would adversely affect their budget and operations. The overall

cost of running businesses will increase, extending to host or linked communities, where small businesses be impacted severely or will likely close down. In addition, transportation of ag-ricultural produce and livestock to the cities will be affected, and this may escalate rural-urban migration.

Petroleum Equalization has come to stay, and should be left in the hands of the agency which, over the years, has mas-tered the management of this arduous task. Petroleum Mar-keters should concentrate on how to grow their businesses and offer world-class services to their customers. Today, the country is proud of the notice-able growth of some indigenous downstream companies that are increasing their visibility in all the states of the federation, through setting up of various state-of-the-art retail stations where white products and oth-er auto essential services are being accessed by consumers. The present reality is that, we are living in an era where some few entities that used to domi-

nate downstream activities in the last five decades can no longer dictate to the industry on how things should be run. These key petroleum marketers, some having gone through sev-eral transitions and ownership are notably in the lead agitating for this shift. It is clear that, they are calling for the abolishment of government equalization, as part of measures to expand their net for further catch, since government has decided to stop the under-recovery payment; a situation that led to a horrible decrease in cash flow for major players.

This new approach being advanced is to railroad gov-ernment into adopting means to enable access to Forex at a government-regulated rate, and also allow them to handle what they call internal equalization under the supervision of the nation’s consumer protection body. This calls to question how effective the consumer protec-tion body fared in respect of numerous complaints of trans-actional shortchange within the nation’s service-oriented sector,

President Muhammadu Buhari Mallam Mele Kyari, NNPC GMD

28

Importantly the source of the PEF funds is not from government treasury, but principally from the net surplus revenue recovered from oil marketing companies. Operat-ing under a well structured and coordinated system, the fund has its operational office in Lagos, five Zonal Offices as well as 22 depot offices located at the 21 NNPC depots and marketers’ storage facilities at Apapa and Ibadan.

Cover Story 05:20

prominent of which is the bar-rage of consumer outrage over poor service delivery in the na-tion’s telecommunication sec-tor.

As it is today, PEF is the only agency with the capacity of tracking movement of prod-ucts-laden trucks ferrying pe-troleum products to scheduled destinations across the country. Agencies such as NNPC, DPR and others rely on technological facilities of PEF for information. PEF’s tracking system is so so-phisticated that even if all load-ed trucks are being hoarded, it can effectively verify. The agen-cy has the capacity to monitor real-time information about the

movement of petroleum prod-ucts in the country.

A truck loaded in Mosimi heading to Gusau could be mon-itored by PEF from their head of-fice in Abuja with full details of the truck’s content and move-ment, with real-time interactive access to the driver, where nec-essary, including the capacity to know filling stations that hoard products and the estimates of quantity being hoarded.

Reliable and competent in-quiry also shows that, PEF com-mences monitoring right from the birthing of discharging ves-sels. They also track ships that stop on the high seas to offload, because most of the marketing

companies, with exception of one, cannot berth their ships at their dockyards, but will rely on smaller vessels that can con-vey the products from the high seas. PEF monitors quantity brought as well as the quantity taken out per truck, even if it is by pipeline.

Checks on the expenditure processes at PEF reveal that, the agency does not operate any commercial bank account. Funds are collected on behalf of PEF by NNPC and domiciled in the Central Bank. Thereaf-ter PEF performs its financial obligation using treasury sin-gle account as directed by the government. Perhaps the more

Godwin Emefiele, CBN Governor Ahmed Bobboi, PEF(M)B Executive Secretary

29

Cover Story 05:20

reason there is prudence in PEF as an organization because its Executive Secretary, who is the agency’s highest accounting of-ficer, cannot approve anything above N2.4 million, while the entire tenders board of PEF can-not approve spending beyond a N50 million limit, because any-thing above N50 million must be referred to the ministry.

In addition, sources have con-firmed that, the fund’s procure-ment process must go through bidding. Summarily, there are only three ways money can be taken out of PEF – one, through paying marketers, two, payment of salaries to staff and three, contracts; and even that has to be through bidding because the procurement process must be strictly adhered to. PEF pays salary in line with other public

oil sector agencies and they op-erate about over 140 facilities including tank farms and de-pots in Nigeria, with a combined staff strength of only about 330 altogether.

Indeed, it is evidently ac-knowledged that, COVID-19 has no doubt wreaked havoc on government’s plans especially as it relates to fiscal responsi-bility. However, it is important as well for government to un-derstand that the pandemic has also slammed untold hardship on citizens’ incomes and liv-ing standards as imposed by a lockdown regime to curtail the spread of the virus. Even before the pandemic, the rate of pover-ty in Nigeria in the last five years has been alarming and has only been compounded.

Coincidently, states that are

on top of the poverty table, such as Sokoto, Zamfara, Katsi-na, Yobe and Borno are mostly those benefiting from the equal-ization due to their distance from the source of loading or depots. Scrapping of PEF at this moment will add to the hardship people are going through. Be-sides, why will the government scrap an autonomously funded agency which imposes no bur-den on government but relief on the people?

Anybody who is talking about the removal of any sort of palli-atives such as the equalization of petroleum products now, is an enemy of President Buhari. Scrapping PEF will definitely have some negative implica-tions on Nigerians. In fact, this is not the time to even think about it.

Checks on the expenditure processes at PEF reveal that, the agency does not operate any commercial bank account. Funds are collected on behalf of PEF by NNPC and do-miciled in the Central Bank. Thereafter PEF performs its financial obligation using treasury single account as di-rected by the government. Perhaps the more reason there is prudence in PEF as an organization because its Exec-utive Secretary, who is the agency’s highest accounting officer, cannot approve anything above N2.4 million, while the entire tenders board of PEF cannot approve spending beyond a N50 million limit, because anything above N50 million must be referred to the ministry.

Anybody who is talking about the removal of any sort of palliatives such as the equalization of petroleum prod-ucts now, is an enemy of President Buhari. Scrapping PEF will definitely have some negative implications on Ni-gerians. In fact, this is not the time to even think about it.

30

The African Energy Chamber has become a signatory to the Equal by 30 Campaign

which calls for equal pay, equal leadership, and equal opportuni-ties for women in the clean ener-gy sector by 2030. The Chamber has been joined in this initiative by a series of its partners, includ-ing Centurion Law Group, Tsavo Oilfield Services, Apex Industries, DMWA Resources, the Germany Africa Business Forum, and Africa Oil & Power.

The Equal by 30 Campaign is being rolled out with the aim to ad-vance gender equality and ensure women are firmly at the centre of the energy industry. As signato-ries, the Chamber and its partners have endorsed principles and tak-en concrete action to accelerate the participation of women in the energy sector and close the gen-der gap in Africa.

The Equal by 30 campaign is a joint initiative of the Clean Energy, Education and Empowerment Ini-tiative (C3E), which works to ad-vance the participation of women in the clean energy transition and close the gender gap, and the In-ternational Energy Agency (IEA). The Equal by 30 campaign aims to have public and private sector commitments to work towards equal pay, equal leadership, and equal opportunities for women in the clean energy sector by 2030.

There is more urgency than ever to align political, financial, econom-ic, and social resources to create a more equitable energy sector in Africa for all, and we firmly believe, as a coalition, that this cannot be

done without involving women.“It is not a question that women

add incredible value to the busi-nesses they run and operate in the energy sector. The African energy industry must move beyond words and platitudes and must ensure women are included in all facets of our energy sector” stated NJ Ayuk, Executive Chairman at the African Energy Chamber. The Chamber and its partners who have joined the call all have multi-pronged and complementary spheres of op-eration, making them a powerful group to promote the campaign’s agenda far and wide across the Af-rican continent.

“We are proud to fully support this campaign as the Chamber and to bring a lot of companies operating in the energy sector on board as well. There is a whole lot of change going on at the moment, therefore there is no better time to ensure we build a bright future that includes women, looking ahead at 2030 and beyond.” added Ayuk.

The transformation of the glob-al energy sector will only succeed if we harness all available talents,

which means removing barriers to women’s participation, empower-ing women, and creating a more inclusive energy sector overall. The energy sector remains one of the most gender imbalanced in the world. In response, world leaders pledged, in 2015, to achieve gen-der equality and empower women and girls by 2030.

To that end, the African Ener-gy Chamber is proud to commit to creating positive change in the African energy industry and foster-ing a sustainable future for all. We encourage the rest of our partners to join the campaign, and look for-ward to working together with gov-ernments, industry and civil soci-ety to tackle the challenges of the energy transition with a diverse and inclusive energy workforce.

As of today, with the seven orga-nizations signing on, we are now at 144 signatories total, including 118 organizations, 13 partners, and 13 governments. Equal by 30 is led and based at Natural Re-sources Canada, a division of the Government of Canada.

–By Fred Ojiegbe (with APO Group)

African Energy Companies Join Equal by 30 Campaign and Commit to Equal Opportunities for Women in Energy

Industry 05:20

31

Agitations over perceived marginalisation of the South-South region in the

distribution of national oil wealth and resources was freshly reig-nited recently when a group from the region issued strong con-demnation over supposed lop-sidedness in the appointments into top management positions at the Nigerian National Petro-leum Corporation (NNPC) and its subsidiaries and departments.

The Pan Niger Delta Forum (PANDEF), a non-political organ-isation of the Niger Delta people, warned that it would not hesi-tate to drag the government of President Muhammadu Buhari to the International Court of Jus-tice (ICJ) and the United Nations (UN) over what it described as “an affront to national character.”

The Forum threatened to carry

out the action after it said it had exhausted all known democratic avenues to ex tract a commit-ment from the federal govern-ment to consider the wellbeing of the Niger Delta region which produces about 96 per cent of crude that is the nation’s eco-nomic mainstay.

According to the National Pub-licity Secretary of PANDEF, Ken Robinson, in a media interview, the Forum has since 2016 been making entreaties to the Buhari government to consider the Ni-ger Delta an important region in terms of its huge economic con-tribution, but to no avail.

The main displeasure of the group is the perceived injus tice in the appointments into the top management positions of the NNPC, in which according to them, only one slot out of nine

was allotted to the Niger Delta region.

“Top management posi tions of the NNPC and its subsidiaries, departments, and ventures are held by people from the north, a re gion that does not produce an ounce of oil,” he said.

Further analysis of the situa-tion by Valuechain reveal that the threat to approach the ICJ by the PANDEF came a week, after the lead ership of the group wrote another open letter to Pres ident Buhari, listing the lop sided ap-pointments in the NNPC and its subsidiaries to the chagrin of the ‘Niger Delta people’.

PANDEF, in the letter signed by Robinson, said the re gion’s mar-ginalisation at the national oil corpora tion became even more pronounced in the March 2020 promotions and reor ganisation,

Industry 05:20

Is Niger Delta Uproar over NNPC Appointments Justified?

–By Gideon Osaka

President Muhammadu Buhari Chief Edwin Clark

32

which further isolated the Niger Delta from its mainstream man-agement structure.

PANDEF stated, that “virtually all top management positions of NNPC and its subsidiaries, departments, and ventures are held by persons from the north-ern zones of the country that do not produce an ounce of oil, to the exclusion of indigenes of oil-producing communities of Ni-ger Del ta region.

Going further, the group said the uncouth discriminative bias against the Niger Delta region is even being perpetuated in the current efforts to stem the spread of COVID-19 in the coun-try, and in the dispensation of palliatives to vulnerable citizens by Ministries, Departments, and Agencies of the federal govern-ment.

The group claimed that of the $311 million Abacha loot recently returned from the United States which the Buhari administration said has been allocated to proj-ects; including the second Niger Bridge, Lagos-Ibadan and Abu-ja-Kaduna-Kano expressways, as well as the Mambilla Power Project in North-East zone; no project in the South-South zone is listed.

“These situations further bol-ster the Niger Delta peoples’ de-mand for not only adequate par-ticipation in the management, administration, and dispensation of the resources nature has rich-

ly endowed our lands but also for the restructuring of the country.”

PANDEF concluded that rath-er than addressing the genuine demands of the region as encap-sulated in the 16-Point Demand that was presented to the pres-ident on 1st November 2016, “what we see is further alienation and distancing by the Federal Government and its agencies.”

Further findings show that since the advent of the current administration allegations of lop-sided appointments in the NNPC board and its subsidiaries by in-dividuals or groups from Niger Delta has not been persistent.

In 2017, leader of PANDEF, Chief Edwin Clark, had asked President Buhari to, in the inter-est of peace, reverse all the ap-pointments made at the NNPC describing the appointments and redeployments made by the president at that time as lopsid-ed and favouring a particular part of the country and detrimental to the people of the South-South, whose areas host oil exploration activities.

Reading a list of those who according to him benefited from the appointments, Clark said: “The list shows that the whole of the South has 19 positions out the 55 positions and the North, a non-oil producing zone, has 36 positions, which include the very senior positions.

“Top management positions in other subsidiaries such as the

PPMC, PTDF, PEF, and the DPR, one of the Departments in the Ministry of Petroleum, are also majorly held by Northerners.”

At that time, an avalanche of condemnations from the Niger Delta/South-South greeted the vexatious composition of the NNPC Board where out of the 9 members of the Board only one person was from the South-South in the person of Dr. Thom-as M. A. John from Cross River State, apart from the Minister of State, Petroleum, and one per-son from the South-West.

According to the group, the rest were all from the Northern zones of the country and “the lopsided NNPC Management later effected a re-organization in September 2017 that left the Region more estranged,”

Are Agitations Justified?Reactions from stakeholders

that have trailed PANDEF’s out-burst over the alleged marginal-isation against the region, have been mixed as most describe the group’s leaders’ threats as handiwork of mischief makers who want to further polarise Ni-gerians to achieve their political goals.

According to them only a few names and positions out of a long list are being presented as the whole.

Some are of the opinion that if time is taken to examine the staff list of the NNPC, one will

Industry 05:20

The group claimed that of the $311 million Abacha loot recently returned from the United States which the Buhari administration said has been allocated to projects; including the second Niger Bridge, Lagos-Ibadan and Abuja-Kaduna-Kano expressways, as well as the Mam-billa Power Project in North-East zone; no project in the South-South zone is listed.

33

see that every part of the coun-try is adequately represented at all levels, be it management or down the ladder.

An independent evaluation by Valuechain of the composition of the NNPC Board show that the Board of the NNPC, which is the highest decision making arm of the corporation aside the President, is headed by a former NNPC GMD, Dr. Thom-as M. A. John from Cross River State (South-South/Niger Delta State) as Acting Alternate Chair-man. He maintains a dual role as a Board Member also. This is in addition to the fact that the Minister of State for Petroleum Resources Chief Timipre Sylva from Bayelsa State (Niger Delta region) oversees the NNPC on behalf his principal the President and Minister of Petroleum. The headship of the Board of the cor-poration had been enjoyed pre-viously by Ibe Kachikwu (Delta State) formerly as GMD NNPC and Minister of State, Petroleum.

the Facts vs. FictionFurther investigation into

the Executive Management of the NNPC group headed by the

Group Managing Director, shows that the corporation’s executive management comprises of the Corporate Headquarters, five Autonomous Business Units (ABUs) and two Directorates.

The five ABUs and the Cor-porate Services Directorate are all headed by Chief Operating Officers (COOs); while the Fi-nance and Accounts Directorate is headed by the Chief Finance Officer. The positions of the COO are distributed in such a way that each geo-political zone is represented including the South-South.

The representative of the South-South is in the person of Mr. Roland Ewubare the erst-while Chief Operating Officer (COO), Upstream who was made a sort of ‘Super COO’ by giving him more responsibility to over-see at the newly formed NNPC Ventures and Business Devel-opment Directorate as COO. His elevation topped the list of the changes.

Under the arrangement, Ewubare, in the new order got an additional responsibility of busi-ness development, besides man-aging the group’s ventures. He

is expected to bring his compe-tence to bear in the onerous task of laying the groundwork for the corporation to take up new busi-ness opportunities and challeng-es thrown up by the COVID-19 impasse, and the new position would also see Ewubare travers-ing downstream, midstream and upstream sectors to develop new ventures.

Clarifying the recent appoint-ments in the corporation, NN-PC’s spokesman Dr. Kennie Obateru further explained that the principle of federal character was a factor in the progression of the new appointees.

Throwing more light, Obateru stated that many top manage-ment officers of the corporation were moved to new positions while some were promoted based on their verifiable track records of performance, saying some COOs, Group General Man-agers and Managing Directors of subsidiaries were affected in what some industry analysts described as the most objective placement exercise in the recent history of the National Oil Com-pany.

Obateru stated that the ex-

Industry 05:20

Dr. Thomas M. A. John Chief Timipre Sylva Mr. Roland Ewubare

34

Industry 05:20

So far, six modular refineries are currently at dif-ferent stages of completion in the Niger Delta region. The refineries are located in six states in the Niger Del-ta: Rivers, Delta, Akwa Ibom, Imo, Bayelsa and Cross River.

ercise kept in place Mr. Adokiye Tombomieye, from the South-South, as Group General Manag-er, Crude Oil Marketing, a highly strategic position in the corpo-ration which current GMD held before his appointment.

The NNPC spokesperson ex-plained that the beauty of the new wave of appointments in NNPC depicted a leadership of the corporation determined and bent on ensuring placement of square pegs in square holes, while not losing sight of geo-graphical spread, in respect of staffing.

In terms of distribution of ap-pointive positions in the para-statals under the Ministry of Petroleum Resources, available data shows that two out of the six parastatals (excluding NNPC) are manned by competent indi-genes of the Niger Delta region

of South-South: Simbi Wabote (Bayelsa state) for the Nigeria Content Development and Mon-itoring Board (NCDMB) and Prof. Sunny Iyuke (Delta state) of the Petroleum Training Institute (PTI).

Some achievements accord-ing to the presidency of the Bu-hari government for the Niger Delta region include the Ogoni cleanup which commenced in January 2019, with 16 contrac-tors moving to 21 sites across 4 Local Government Areas in Ogo-niland- Eleme, Tai, Khana and Gokana LGAs after a handover by the Hydrocarbon Pollution Remediation Project (HYPREP).

The Maritime University in Del-ta State which took off in 2018, is now on full steam with over 1,000 students spread across 13 undergraduate courses in three faculties.

Peaceful resolution of the OML-25 dispute between Shell Petroleum Development Com-pany (SPDC) and its Host Com-munities by the GMD of NNPC at the instance of the Federal Government which paved way for Belemaoil to be responsible for Operation and Maintenance of the Asset. Belemaoil is now in charge of employment of per-sonnel in the entire field, a devel-opment that will create opportu-nities for all sons and daughters of Belema, Offoin-Ama Commu-nities, and the entire Kula King-dom.

The government’s Presiden-tial Amnesty Programme (PAP) continues to engage ex-militants and youths in the Niger Delta informal education, vocational skills acquisition, and empow-erment schemes while creating jobs for beneficiaries.

The government’s efforts in infrastructure also includes the 34km Bonny-Bodo road and bridges project, the Itakpe-Warri standard gauge rail line project and refineries.

So far, six modular refineries are currently at different stages of completion in the Niger Delta region. The refineries are located in six states in the Niger Delta: Rivers, Delta, Akwa Ibom, Imo, Bayelsa and Cross River.

The refineries include the Ni-ger Delta Petroleum Resources Refinery (NDPR), in Ogbele, Riv-ers State, which was refining at 1,000 barrels per day (BPD), and was recently upgraded to 6,000 BPD.

Simbi Wabote Prof. Sunny Iyuke

35

The Covid-19 pandemic has set in motion the largest drop in global energy invest-

ment in history, with spending expected to plunge in every ma-jor sector this year – from fossil fuels to renewables and efficiency – the International Energy Agen-cy said in a new report released on children’s Day. May 27.

The unparalleled decline is staggering in both its scale and swiftness, with serious potential implications for energy security and clean energy transitions. At the start of 2020, global energy in-vestment was on track for growth of around 2%, which would have been the largest annual rise in spending in six years. But after the Covid-19 crisis brought large swathes of the world economy to a standstill in a matter of months, global investment is now expect-

ed to plummet by 20%, or almost $400 billion, compared to last year, according to the IEA’s World Energy Investment 2020 report.

“The historic plunge in glob-al energy investment is deeply troubling for many reasons,” said Dr Fatih Birol, the IEA’s Executive Director. “It means lost jobs and economic opportunities today, as well as lost energy supply that we might well need tomorrow once the economy recovers. The slow-down in spending on key clean energy technologies also risks undermining the much-needed transition to more resilient and sustainable energy systems.”

The World Energy Investment 2020 report’s assessment of trends so far this year is based on the latest available investment data and announcements by gov-ernments and companies as of

mid-May, tracking of progress on individual projects, interviews with leading industry figures and investors, and the most recent analysis from across the IEA. The estimates for 2020 then quanti-fy the possible implications for full-year spending, based on as-sumptions about the duration of lockdowns and the shape of the eventual recovery.

A combination of falling de-mand, lower prices and a rise in cases of non-payment of bills means that energy revenues go-ing to governments and industry are set to fall by well over $1 tril-lion in 2020, according to the re-port. Oil accounts for most of this decline as, for the first time, global consumer spending on oil is set to fall below the amount spent on electricity.

Companies with weakened

Industry 05:20

COvid-19: Energy Revenues to Fall in Excess

of $1 Trillion in 2020 - iEA–By Benjamin Ike

36

balance sheets and more uncer-tain demand outlooks are cutting back on investment while proj-ects are also being hampered by lockdowns and disrupted sup-ply chains. In the long-term, a post-crisis legacy of higher debt will present lasting risks to in-vestment. This could be particu-larly detrimental to the outlook in some developing countries, where financing options and the range of investors can be more limited. New analysis in this year’s report highlights that state-owned enter-prises account for well over half of energy investments in develop-ing economies.

Global investment in oil and gas is expected to fall by almost one-third in 2020. The shale in-dustry was already under pres-sure, and investor confidence and access to capital has now dried up: investment in shale is antic-ipated to fall by 50% in 2020. At the same time, many national oil companies are now desperately short of funding. For oil markets, if investment stays at 2020 levels then this would reduce the previ-ously-expected level of supply in 2025 by almost 9 million barrels a day, creating a clear risk of tighter markets if demand starts to move back towards its pre-crisis trajec-tory.

Power sector spending is on course to decrease by 10% in 2020, with worrying signals for the development of more secure and sustainable power systems. Renewables investment has been more resilient during the crisis than fossil fuels, but spending

on rooftop solar installations by households and businesses has been strongly affected and final investment decisions in the first quarter of 2020 for new utili-ty-scale wind and solar projects fell back to the levels of three years ago. An expected 9% de-cline in investment in electricity networks this year compounds a large fall in 2019, and spending on important sources of power system flexibility has also stalled, with investment in natural gas plants stagnating and spending on battery storage levelling off.

“Electricity grids have been a vital underpinning of the emer-gency response to the health cri-sis – and of economic and social activities that have been able to continue under lockdown,” Dr Bi-rol said. “These networks have to be resilient and smart to ward against future shocks but also to accommodate rising shares of wind and solar power. Today’s investment trends are clear warn-ing signs for future electricity se-curity.”

Energy efficiency, another cen-tral pillar of clean energy transi-tions, is suffering too. Estimated investment in efficiency and end-use applications is set to fall by an estimated 10-15% as vehicle sales and construction activity weakens and spending on more efficient appliances and equip-ment is dialled back.

The overall share of global en-ergy spending that goes to clean energy technologies – including renewables, efficiency, nuclear and carbon capture, utilisation

and storage – has been stuck at around one-third in recent years. In 2020, it will jump towards 40%, but only because fossil fuels are taking such a heavy hit. In abso-lute terms, it remains far below the levels that would be required to accelerate energy transitions.

“The crisis has brought lower emissions but for all the wrong reasons. If we are to achieve a last-ing reduction in global emissions, then we will need to see a rapid increase in clean energy invest-ment,” said Dr Birol. “The response of policy makers – and the extent to which energy and sustainabil-ity concerns are integrated into their recovery strategies – will be critical. The IEA’s upcoming World Energy Outlook Special Report on Sustainable Recovery will provide clear recommendations for how governments can quickly create jobs and spur economic activity by building cleaner and more resil-ient energy systems that will ben-efit their countries for decades to come.”

The Covid-19 crisis is hurting the coal industry – with invest-ment in coal supply set to fall by one-quarter this year – but does not pose an existential threat. Although decisions to go ahead with new coal-fired plants have come down by more than 80% since 2015, the global coal fleet continues to grow. Based on available data and announced projects, approvals of new coal plants in the first quarter of 2020, mainly in China, were running at twice the rate observed over 2019 as a whole.

The historic plunge in global energy investment is deeply troubling for many reasons,” said Dr Fatih Bi-rol, the IEA’s Executive Director. It means lost jobs and economic opportunities today, as well as lost ener-gy supply that we might well need tomorrow once the economy recovers.”

Industry 05:20

37

For more information, contact the Coordinator, 0803 081 1892

Lifestyle 05:20

–By Aisha Sambo

For Muslims all around the world, fasting in the month of Ramadan has been a sa-

cred tradition for years, however this year has been mute due to lockdowns and movement re-strictions all over the world as the risk of coronavirus remains high. Eid was just a few days away and many were getting used to the idea that this year’s celebra-tion will be unlike any other.

There are two kinds of Eid in Islam, Eid el Fitr meaning “the Festival of Breaking the Fast” also referred to as the ‘smaller Eid’, and Eid el Adha or ‘Festi-val of the Sacrifice’. Eid el Fitr is celebrated at the end of the holy month of Ramadan, and the sighting of the moon is import-ant for announcing the start of a new lunar month. Muslims cele-brate Eid to show thankfulness to Allah for allowing them to complete their spiritual obliga-tion by fasting, carrying out good deeds and being kind. There is the presence of a special night in Ramadan, called the ‘night of majesty’ which is considered to be better that 1,000 months. Eid is also an opportunity to be thankful to God in hopes of Him forgiving past sins and starting on a clean slate. This year, to mitigate the impact of the virus, many countries have cancelled communal events, such as the Eid prayer.

Regardless of social distanc-ing measures enforced, Mus-lims can still mark the festivity and can do this through video calls, voice calls or messages. Even though most tailors may not be working fulltime, children should get a chance to wear new

clothes as this will go a long way in making them happy. There is still a looming compromise on food, most families would have the tradition of getting to-gether for a grand barbecue on Eid with friends and family, but the fowl that was meant to be roasted this year may be called off. Unlike previous years, most families this year may not be gifting dishes to loved ones ei-ther because no one can be sure of the whole process being safe. Nevertheless, some adults still take responsibility to distribute food for people who need them around their communities.

Though these are difficult

times, and although not all may have the means to celebrate how they have been used to I wish for all Muslims to remem-ber that Allah does not burden a soul with what he cannot bear, we need to trust God and His afflictions on humanity, praying that there will be light at the end of the tunnel. So to all Muslims around the world I hope this Ramadan has led you closer to God and you have forgiven those who may have wronged you as you sought forgiveness from God as well. Wishing all Muslims a blessed Eid el Fitr, may Allah accept all our prayers and fast.

Stay safe.

Blessed is the day, Eid el Fitr

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Industry 05:20

COVID-19: Society Of Petroleum Engineers Distributes Palliatives to Abuja Communities

The Society of Petroleum En-gineers (SPE), Abuja Section has distributed food items and other consumables worth over a million Naira to communities as pallia-tives to cushion the effects of the lockdown due to COVID-19 pan-demic

Oil Price Collapse Wipes Out to-tal’s Profits

Total said its quarterly profit fell by 99 percent because of dropping oil prices and announced it would slash investments in response to the ongoing turmoil in crude mar-kets.

The French oil major reported a net profit of $34 million for the first quarter, against $3.1 billion a year earlier.

Kyari Says Nigeria Has No Shut-In Oil Production

Group Managing Director of the Nigerian National Petroleum Cor-poration, NNPC, Mele Kyari, has debunked reports that Nigeria has shut in its oil production as a result of the current market situation.

Analysts Forecast When Nigeria’s Bonny Light Could Hits $50pb

Economies are opening up, however, the recovery is gradual and will take some time for oil pric-es to hit pre-COVID-19 levels.

IPMAN Decries Proposed Merger Of PtDF, PPPRA, PEF

The Independent Petroleum Marketers Association of Nige-ria (IPMAN), has decried the pro-posed merger of three agencies in the petroleum industry.

NNPC: Nigeria Consume 1.2bn Litres of Petrol in 30 Days

Nigerians consumed about 1. 2 billion litres of petrol in January, with a daily utilisation rate of 38.6 million, a report by the Nigerian National Petroleum Corporation (NNPC), has shown.

Nigeria’s Bonny Light Rises Above $25 As Saudi Arabia Further Cuts Supply

This is in addition to a 9.7 mil-lion barrels cuts agreed on by the Organisation of Petroleum Export-ing Countries (OPEC) and its allies.

Fg Exports 78% Crude Oil Cargo Via Ports –NPA Boss

•Calls for non-oil export diversi-fication economy

The Managing Director of Ni-gerian Ports Authority (NPA), Ms Hadiza Usman, has disclosed that the Federal Government export-ed 78 per cent of crude oil cargo, while the remaining 22 per cent was non-oil export being the 191 million metric tons of export cargo which passed through the ports in 2019.

Wabote Hails NLNg, Sylva As train 7 Contract Is Signed

…Says 7 years FID jinx has been broken

The Executive Secretary Nige-rian Content Development and

Monitoring Board (NCDMB) Engr. Simbi Kesiye Wabote has hailed the outstanding roles played by the Minister of State for Petroleum Resources, Chief Timipre Sylva and the Management of Nigeria LNG in accomplishing the signing of the Equipment Procurement and Construction (EPC) contract for the LNG Train 7 project.

Bonny Light Hits $26.13 As Oil Prices Climb Further Amid Bleak Outlook

Nigeria’s chief oil grade, Bon-ny Light, sustained its steady rise in 3rd week of May, adding up 46 cents or 1.79% to close at $26.13.

Fg Deregulates Downstream Pe-troleum Sector

…Says policy came into effect, March 19

…Says intervention in pricing would continue due to marketers’ exploitative tendencies

…Laments rise in food prices, despite fuel price slash

The Federal Government has clarified that it has deregulated the downstream petroleum indus-try, adding, however, that it would continue to intervene in determin-ing the pump price of the Premium Motor Spirit (PMS), also known as petrol, to safeguard consumers of the commodity from being exploit-ed by oil marketers.

Oil: Nigeria Commends Saudi Arabia Over Cuts

The Honourable Minister of State for Petroleum Resourc-es, Timipre Marlin Sylva has ex-pressed appreciation to the Gov-ernment of Saudi Arabia over its recent voluntary reduction in its crude oil production.

NCDMB to Spur O&g Innovation With Brent+

The Nigerian Content Devel-opment and Monitoring Board

MAY SHORT TAKES–Compiled By Saidu Abubakar

The Society of Petroleum Engineers (SPE), Abuja Section making donation

40

Industry 05:20

(NCDMB) has announced the launch of BrentPlus, a series of ini-tiatives under its Nigerian Oil and Gas Technology (NOGTECH) pro-gramme that will stimulate inno-vations in the oil and gas industry and ancillary sectors and create a platform for local creation of digi-tal technologies.

OPEC’s Ultimate Fighter: Iran’s Ar-debili Is Dead

*Envoy dies of brain hemor-rhage

Hossein Kazempour Ardebili, who died recently was one of the ultimate OPEC negotiators. He was first named Iran’s OPEC gov-ernor in 1985.

Kyari Implores graduate trainees to Join In Building NNPC

…As New Employees Com-mend Corporation for Transparent Recruitment Process

The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari, has urged the newly recruit-ed Graduate Trainees (GTs) to join hands with other staff in building the corporation to become the National Oil Company (NOC) of choice, urging them to go the ex-tra mile to achieving extraordinary results.

SgF Applauds NNPC Over COVID-19 Intervention Initiatives

…As Corporation Promises to Construct 14 Permanent Medical

Facilities Across 14 StatesThe Secretary to the Govern-

ment of the Federation and Chair-man of the Presidential Taskforce on Covid-19, Boss Mustapha, has applauded the Nigerian National Petroleum Corporation (NNPC) for her unwavering support and several medical interventions, geared towards providing a lasting solution to the novel coronavirus pandemic in Nigeria, saying the gesture showed the corporation as the hallmark of a National Oil Company.

this Oil Nation Sees Production Drop As COVID-19 Cases Spike

Kazakhstan’s crude oil produc-tion has fallen below 1.7 million bpd of crude and condensates, oil analytics firm OilX told Oilprice.com, noting that the giant Tengiz field has seen a jump in Covid-19 cases among workers, at 935.

Oil Marketers turn Down Fg’s Re-quest to Import Fuel

Oil marketers under the um-brella of Oil Marketers Association of Nigeria (MOMAN) has turned down Federal Government’s invita-tion to resume petroleum products importation into the country.

Oil theft: Navy Destroys 2,287 Il-legal Refineries

In its avowed commitment to eliminate crude oil theft and illegal oil bunkering, the Nigerian Navy said it has destroyed a total of

2,287 illegal refineries in the last five years.

Under-Reported gas Flaring Leads to Over $1bn Losses In Nigeria

Nigeria is believed to be declar-ing about half of what the oil ex-plorers were actually flaring, thus paying far less than they should pay to the government as fines, an amount that may have hit $1bn as loss.

Nigeria Records $8.25 Per Barrel Excess Revenue As Bonny Light Price Hovers At $33.25

Barely a week after it had risen to $34.11, the price of Bonny Light, Nigeria’s premium oil grade, has dropped slightly to $33.25 in the international market.

NNPC Explains Its Employment, Career Progression Parameters

The Nigerian National Corpo-ration (NNPC) has explained the parameters for employment as well as career progression in the corporation, using the recently concluded Graduate Trainee em-ployment process as well as top Management promotion exercise executed by the corporation as an illustration.

Less than 30% Fuel Depots Oper-ating

Most fuel depot operators have been forced out of business as the Nigerian National Petroleum Com-pany emerged the sole supplier of imported fuel in recent years, the Depot and Petroleum Products Marketers Association of Nigeria has said.

NNPC, Subsidiaries Have 6,621 Staff Nationwide -Report

In response to speculations about its staff strength, the Nige-rian National Petroleum Corpora-tion (NNPC) has disclosed that it currently has 6,621 staff, both at its headquarters and across all its subsidiaries, divisions and offices nationwide.

Boss Mustapha

41

Column 05:20

Can China Recolonise Africa?

Step into SHUBOX where you will unbox Aisha’s journey to discovering the stories behind people in Africa and interesting places all over the world. Expect an eclectic dive into history and current events on the intriguing developments in media and entertainment. I am here to give you a piece of myself through my writing by reporting and reviewing all things educative, entertaining and engaging.

– By Aisha Sambo

The relationship between China and Africa has al-ways been complicated.

From the 21st century, China had increasingly built strong economic ties with Africa and today China is Africa’s largest trading partner in the world. This is most likely to continue to increase as in 2017 trade be-tween Africa-China accounted for $170 billion, it’s no wonder Chinese President Xi Jinping vis-ited four Africa countries himself in 2018, these countries includ-ed Senegal, South Africa, Rwan-da, and Mauritius. What does this all mean for Africa when the Chinese government has loaned African countries $86 billion for over 3,000 projects over a decade. Some of these investments include a highway construction link between the

capital city of Senegal, Dakar to Touba, and Ethiopia’s light rail-way which cost $75 million of which 85% was funded by China.

China and Africa are benefi t-ing fi nancially in the short term, but in the long term, the Chinese may win Africa over, according to fi gures from China’s General Ad-ministration of Customs, trade between China and Africa fell by 14% to $41 billion in the fi rst three months of 2020 compared to the same period in 2019. With factories closed and manufac-turing output reduced signifi -cantly in February across China due to Covid-19, decreasing Af-rica-bound exports from China fell by 10.5% and China-bound exports from Africa also slowed down by 17.5%. Contrary to what the West believes, Africans do not see themselves as victims of

Chinese economic exploitation. The projects in Africa funded by China makes far great headlines, so the short term agenda for China in Africa is frankly a public relations exercise. Smaller coun-tries in East Africa are heavily being funded by China, promis-ing to bring infrastructure and improve interconnectivity, but the devil is in the detail as these projects are not grants, they are all loans. In addition, these proj-ects are not benefi ting the local communities as much as you may assume, for some reasons part of the deals involve Chinese people being flown to building in-frastructure for Africa, and I am yet to view a scenario where Afri-cans are being trained by the Chi-nese to carry out these projects.

Does China really care about Africans? yes but not in the

42

Column 05:20

same way it cares about the Chinese. It was disheartening to realise the level of racism the Chinese have towards Black people living in China. I wonder if they are aware of how much they need us as Africans. Videos online emerged showing the re-cent mistreatment of Africans living in Guangzhou. African mi-grants were being evicted from their apartments in the middle of the night and forced into quaran-tine in Guangzhou, the third-larg-est city in China. To add, hotels, restaurants and even parks are not allowing Africans in, leaving many on the street.

Guangzhou providence is closely linked to Hong Kong and Macau, which has the largest African community in Asia, ma-jority of whom are from West Af-rican countries such as Nigeria, Ghana, and Mali. Guangzhou is a hub for the export-driven man-ufacturing sector, an industry which has always been consid-ered open, tolerant and progres-sive. However, due to the fear of imported coronavirus cases and a second wave of the pandemic in China, the local government implemented surveillance and mandatory testing and an addi-tional 14-day quarantine for all African nationals in the city, re-gardless of whether they tested positive for COVID-19 or not.

Like I said China will always care about its people more than they will ever care about us, it’s

natural. A recent report shows how Beijing is now using infra-structure to expand its surveil-lance network in Africa. Some of the findings of the report from the Heritage Foundation shows that over 186 government build-ings were either renovated or constructed by Chinese compa-nies, out of which over 40 African countries have had government buildings constructed by China. 35 African governments have been gifted batches of comput-ers from China and 70% of 4G networks in Africa have been de-veloped by Chinese telecommu-nications giant Huawei. This el-ement of the Huawei’s presence in Africa is a counterintelligence problem for the U.S. in Africa.

It is also possible for China to hold surveillance on the buildings they developed in Africa, collect-ing damaging or embarrassing information about a country’s senior leadership. That materi-al could be used as leverage to ensure African leaders are held hostage. African countries are yet to develop cutting-edge sur-veillance technologies, yet there is a dynamic emerging technol-ogy industry in Africa. If Africa produces useful technology, Chinese eavesdropping could gain valuable information on it or African governments’ nego-tiating strategies, competitors’ bids, and other relevant informa-tion. Chinese companies have already done this in West Africa,

enabling them to dominate the region’s wax-print fabric industry and forcing out indigenous com-petitors and there have been more reports globally of Chinese hackers stealing information in other parts of the world.

The biggest economic risk for African governments is that they frequently negotiate with the Chinese government, its banks, and its companies making China by far the largest bilateral lender to the continent.

Nevertheless there are obvi-ous reasons that make China a preferred partner for Africa. For Africans, China has four major attractions;1. Access to capital and uncon-

ditional soft loans2. Cheap goods and quick deliv-

ery of services3. Funding of peacekeeping;4. and an alternative develop-

ment model. For these investments in Afri-

ca to succeed, our governments need to be accountable to its people and care about its people the way the Chinese do. Right now any big project in an Afri-can city that is higher than three floors or roads that are longer than three kilometres are most likely being engineered and built by the Chinese. So dear African leaders please negotiate the best deals for us so that one, we can actually pay back our loans and two, China doesn’t end up recolonising us.

It is also possible for China to hold surveillance on the buildings they developed in Africa, collecting dam-aging or embarrassing information about a country’s senior leadership. That material could be used as lever-age to ensure African leaders are held hostage. African countries are yet to develop cutting-edge surveillance technologies, yet there is a dynamic emerging technol-ogy industry in Africa.

43

Entertainment 05:20

Sex for roles has become a phenomenon in the en-tertainment sector espe-

cially the Nigerian movie space popularly known as Nollywood.

The idea of sex for roles aris-es when competing roles are being given to individuals who don’t deserve possibly because they yielded to sexual gratifica-tions of the producers.

There are many reasons at-tributed to sex for roles in Nol-lywood.

While some stakeholders be-lieve that there is no justifica-tion fot actors/actresses being subjected to submitting their bodies before being assigned roles, others believe that some willingly offer their bodies to get prominent roles in Movies especially the female folk.

Speaking recently in an inter-view, Nollywood producer, Mi-chael Kalu, confirmed that sex for roles exists in Nollywood for a couple of reasons and the female folks are majorly the victims.

He revealed that many pro-ducers and directors in the Ni-gerian movie industry demand to sleep with female actresses in exchange for a role in their movies.

Kalu said this during an in-terview at a recent red carpet event. “I can’t tell you that the sex for role syndrome doesn’t exist in Nollywood,” said Kalu who has worked as either a production manager or produc-

tion assistant on more than 40 films.

“That will be a lie, some girls don’t want to work hard, attend auditions, castings and wait for their time to blow.

“They just want an instant rise to stardom and so believe they can get there with what they have as they use to say, and also some producers use their office to intimidate some of these girls too.

“So I will ad-vise the ladies thespians to work hard and stop having that mentali-ty,” he said.

He, how-ever, cau-tioned pro-ducers on using their a u t h o r i -ties and positions to intimi-date ac-tors with r o l e s , a d d i n g t h a t p r o -ducers a l s o

should try to give roles to ac-tors on merit”

He however said cases have reduced in the last five years be-cause some well-meaning Ni-gerians have created platforms like Obylisious Empire Film, Academy and Tresurewells Academy that will not only train and equip the actors but also guarantee their breakthrough in Nollywood by creating jobs for them after their internship

and shooting their

Why Sex for Roles still Exist in Nollywood

–By Adeniyi Onifade

44

Entertainment 05:20

He however said cases have reduced in the last five years because some well-meaning Nigerians have cre-ated platforms like Obylisious Empire Film, Academy and Tresurewells Academy that will not only train and equip the actors but also guarantee their breakthrough in Nollywood by creating jobs for them after their in-ternship and shooting their movies with these trained actors.

movies with these trained ac-tors.

“So I will advise our intend-ing or upcoming actors to look for these film academies and enroll.

“This way, the sex for role syndrome will keep reducing since these academies also guarantee roles.

“As the third largest film in-dustry in the world, Nollywood has been notorious for its sex scandals and not too long ago, Paul Obazele had asserted that gay persons have taken over the movie sector,” he added.

In recent times, there have been several sex for roles scan-dals in the Nollywood.

For instance, a Nollywood producer disclosed that a big producer/marketer once ha-rassed her by caressing her breasts in 2015.

Also, Kannywood actress once went on Instagram to ac-cuse a producer of denying her a role because she refused his sexual advances. However, the actress apologized the follow-ing day, describing her post as ‘childish.’

It has been projected that if Sex for roles scandals contin-ue in the industry, it may lose its place in the league of major film industries as merit would be sacrificed for mere ‘Sexual

advances’, hence not bringing out the necessary impact of the movie.

Currently, statistics from the National Bureau of Statistics indicates that Nollywood, one

of the largest film industries in the world in terms of number of films produced, contributes about N853.9 billion to Nige-ria’s GDP.

45

Transport companies whose ‘luxury’ and minibuses have been off the road since the

advent of COVID-19 may not be able to recover from the ban on in-ter-state transportation if the Fed-eral Government does not quickly intervene with fi nancial support to save them from collapse.

This was the view expressed by the President of Association of Luxury Bus Owners (ALBON) and the 1st Vice Chairman, Public Transport Owners of Nigeria As-sociation (PTONA), Prince Emeka Mamah, while lamenting the crip-pling effects of inter-state move-ments on long-distance passen-ger transportation.

“In fact, it will be very diffi cult, if not impossible, for inter-state transporters, whose thousands of buses have been ‘locked down’ for two months, to recover without in-centives, even after the COVID-19

measures have been relaxed,” Mamah stated in an interview.

He recalled that members’ bus-es have been parked at the own-ers’ stations since the restriction on inter-state movements was announced in March, stating that apart from losing daily returns, the vehicles, which are procured on loans from banks are accumu-lating arrears of re-payment and interests.

The transport owners com-mended the concerted efforts by the Federal Government, the Presidential Task Force on COVID-19, and the various state governments towards combating the pandemic.

He, however, argued that road transportation which is the na-tion’s most popular means of movement, should not be allowed to be one of the casualties of the global scourge, even as he ex-

pressed the fear that it would take the sector more than a year to re-cover.

Mamah, who is also the Chair-man of Ifesinachi Industries Ltd, argued that to ground thousands of buses for many weeks without palliative measures have social implications because every bus has at least a driver and other people directly or indirectly de-pend on its operation for their livelihood.

“Having been parked for weeks, these buses not only attract ar-rears of unpaid loans and inter-ests, they are also incurring main-tenance costs. And by the time they are to resume operations – and nobody knows when – we will need to spend heavily on re-placing tyres and other items, be-fore returning them to the road.

“Britain, which is one of the countries worst hit by coronavi-

Motoring 05:20

Inter-state transporters Seek Fg’s Incentives to Survive Lockdown Pains

–By Ironhand S. Chukwuemeka

46

rus, depends a lot on-road trans-portation, and they didn’t starve the transporters and the drivers of palliatives. The country has provided about a million pounds for the transporters to maintain their vehicles, including washing and disinfecting them before they are back on the road. This does not include palliatives to the driv-ers and their families.

“Government should consid-er the fact that when the prohi-bition on inter-state passenger transportation is lifted, we are still going to face the challenge of ob-serving social distancing, which means carrying fewer passen-gers and its effect on the recovery of our businesses.”

According to him, a situation where 15-seater minibuses will admit only seven or eight travel-lers and luxury buses reduce their passengers from 59 to 25 or 30 to ensure distancing, will hamper recovery from the effects of the present ban, unless government extends considerable incentives to the owners.

Last month, PTONA, an umbrel-la body of inter-state road trans-porters across the country, had in a letter to the Vice President and Chairman of the Presidential Economic Sustainability Com-mittee on COVID-19 Pandemic, Prof. Yemi Osinbajo, appealed for urgent government fi nancial sup-port to pull the transport owners back from the brink.

Signed by the National Presi-dent, Isaac Uhunmwagho and the Secretary, Frank Nneji, the associ-ation’s letter specifi cally implored government to set up a N20 Bil-lion COVID-19 intervention fund with the Bank of Industry (BOI) to assist inter-state passenger oper-ators nationwide.

PTONA also appealed to the Vice President to grant its mem-bers special concession on im-port duties payable on buses from 35 percent to 10 per cent; as well as direct the Central Bank of Nigeria to prevail on all com-

mercial banks to restructure all term loans for businesses like inter-state passenger transport affected by the pandemic.

The association gave more in-sight into its members’ predica-ment: “Following the outbreak of COVID-19 pandemic in the coun-try, inter-state passenger trans-port in Nigeria today is in dire straits. The COVID-19 pandemic has inflicted severe economic hardship on our businesses such that virtually all movement of pas-sengers across the country are at a standstill. The situation is fur-ther exacerbated by the current complete lockdown of the coun-try either by the federal or the var-ious state governments.”

The result, the transporters stated, is that members can no longer service the various credit facilities they obtained from com-mercial banks to procure the bus-es because of zero income arising from the lockdown.

They also argued that even when the lockdown is lifted in future, members’ operating ca-pacity and income will equally be impacted negatively because of the need to comply with the guidelines issued by the Presi-dential Task Force on COVID-19 on social distancing, which now implies spacing of passengers in on board.

“Clearly, the above economic catastrophe unleashed on our members by COVID-19 pandemic is devastating and frankly beyond the capacity of our members to shoulder; hence our humble ap-peal to your committee for the Federal Government intervention to cushion the adverse impact of the pandemic on our members.

“Similarly, as your committee ponders the various incentives to stimulate the economy, we urge you to look into escalating cost of procurement of fully-built import-ed buses into the country. Sir, as you may be aware, the operators of Inter-State passengers trans-port in Nigeria have in the last

three decades depended upon the importation of fully-built buses to sustain and replenish their fleet.

“And the Federal Government in recognising that inter-state pas-sengers transport is for the mess-es of this country had in 2005, reduced import duties payable on such buses from 30 percent to 10 percent. However, this laudable policy that had helped operators to provide cheap and affordable transport service to the mass-es of this country was abruptly changed in 2014, when the Feder-al Government increased import duty on fully built buses from 10 percent to 35 percent.”

Motoring 05:20

Dr. Emeka Mamah, President of ALBON and 1st Vice President, PTONA

Frank Nneji, CEO, ABC Transport Plc and PTONA Secretary

47

Aviation 05:20

A total number of 17 out of the 20 airports owned and managed by the Federal

Government are now regarded as ‘unviable’, due to their inability to generate revenue.

Reports have shown that these 17 airports have been operating at a loss for the past three years.

Also, with the exception of Mur-tala Muhammed International Air-port (MMIA), Lagos; Nnamdi Aziki-we International Airport (NAIA), Abuja; and Port Harcourt Interna-tional Airport (PHIA), Rivers State, no other airport owned by the fed-eral government has enough reve-nue to cover the cost of operations alone.

Flight operations have been grounded in the country for the past 2 months due to the lock-down occasioned by the coronavi-rus pandemic.

In Nigeria, the Federal Airports Authority of Nigeria (FAAN) man-ages and supervises all govern-ment airports in the country on be-half of the Federal Government, of

which 20 are owned by the Federal Government, with an additional four owned by state governments.

Reports recently revealed that extra funding frequently patron-ized airports of Lagos and Abu-ja which had excess revenue of about N26.1 billion was used to cushion the operational cost defi-cits incurred by the unviable air-ports in 2017, 2018 and 2019.

A fact-sheet of revenue and ex-penditure of the 20 federal airports and FAAN headquarters in the last three years, revealed significant revenue gaps and deficits across these airports.

Among them include the Kadu-na International Airport which was upgraded during the 2017 closure of Abuja airport.

In the last three years, it gar-nered a total of N1.027 billion in generated revenue, out of which N716.7 million was collected. However, the expenditure was in excess of N4.41 billion, leaving a deficit of N3.69 billion.

Infact, due to the banditry and

kidnapping that has surged along the road leading to the airport, the airport has been temporarily shut due to fear of safety of travellers.

Same goes for Mallam Aminu Kano International Airport, Kano as in 2017, 2018 and 2019 pooled a total of N8.28 billion in generated revenue and collected N7.16 billion but its expenditure totalled N9.6 billion, leaving a deficit of N2.44 billion.

In the same vein, Katsina Air-port made a paltry sum of N250.8 million generated revenue in three years, out of which only N42.1 mil-lion was collected. Its cost of op-erations was put at N1.58 billion, leaving a deficit balance of N1.54 billion.

Same case with Sokoto Airport which had a total of N725.7 million generated revenue, out of which N400.1 million was collected. The cost of operation was in excess of N2.71 billion, which resulted in a shortage of N2.31 billion.

Down south, Ibadan airport in three years made a total of N349.2 million in generated revenue and collected N244.9 million. The ex-penditure amounted to N1.39 bil-lion with a deficit of N1.14 billion.

Also, Ilorin International Airport had a total accrued revenue of N437.1 million revenue in three years and collected N264.2 million. The expenditure was in excess of N2.453 billion, giving a shortfall of N2.19 billion.

Similarly, in Akure airport, Ondo state, it pooled a total of N175.8 million in generated revenue and collected N168.7 million. But the expenditure was N1.06 billion, leaving a difference of N893.7 mil-lion.

The Benin airport in Edo State is also considered ‘Unviable’. The

danger over Plans to Close 17 Airports due to Revenue Shortfalls

–By Adeniyi Onifade

Murtala Mohammed International Airport, Lagos

48

Aviation 05:20

airport generated a total of N993.2 million in three years and collected N930.1 million. The total cost of operations was put N2.02 billion, leaving a shortfall of N1.09 billion.

The Margaret Ekpo Interna-tional Airport, Calabar, had a total of N540.8 million generated rev-enue, though collected more put at N559.6 million, the expenditure was as much as N2.50 billion, giv-ing a deficit of N1.94 billion.

Similarly, Sam Mbakwe Inter-national Cargo Airport, Owerri, gathered a total of N1.25 billion in generated revenue and col-lected N1.08 billion. Expenditure was, however, N2.50 billion, with a shortage of N1.42 billion.

Analysts say the zero profit re-corded in these airports were not unconnected with the long term low passenger traffic in and out of the airports.

The International Air Transport Association (IATA) sets a param-eter for viability of airports across the globe saying that for an airport to be viable and self-sustaining, it must have at least five million pas-sengers annually.

As it stands, only Lagos, Abuja, Port Harcourt airports can boast of at least five million passengers annually.

Apparently without consider-ation for viability, some state gov-ernments, like Abia, Nasarawa, and Ekiti, are still nursing plans on building new airports.

It is understood that the 2016 plan to concession airports is still on by the federal government, yet sustenance could be a problem as all the airports managed by FAAN usually gulp a whopping N4 billion monthly overhead cost.

Consequently, the plan by the federal government to privatise some airports in the country has been greeted with mixed feelings among concerned stakeholders.

While some industry watchers commended the bold step after years of toying with the idea, oth-ers said that the plan was ill-timed, particularly with the privatization plan focusing on four airports.

Critics though reckon that the proposal is a global practice, but are concerned that such at this time would lead to several job loss-es given past antecedent with the old Nigerian Airways.

An aviation stakeholder and publisher of Aviation Safety and Security magazine, Abdulhakeem Umar, has advised the government to drop the idea of privatisation.

According to him, “It is totally wrong to concession airports be-cause only four viable ones in Abu-ja, Lagos, Port Harcourt and Kano have been selected. What happens to the 17 other non-viable ones that depend largely on these four airports. Anybody taking the four airports should go with the liabili-ties of the 17 non-viable ones.”

Umar advised government to improve on Yola, Jos, Akure and Makurdi airports by designating them as agro-airports to boost the evacuation of farm produce.

He added that the privatisation plan was “aimed at killing the Fed-eral Airports Authority of Nigeria (FAAN) and sending workers into unemployment market as it was in the case of the liquidated Nigeria Airways.”

Umar called on Minister of State for Aviation, Hadi Sirika, as an avi-ator, to take far-reaching decisions

aimed at developing the aviation sector in the country.

Former Managing Director of the Nigerian Airspace Man-agement Agency (NAMA), Capt. Roland Iyayi and a former Direc-tor-General of the Nigeria Civil Avi-ation Authority (NCAA), Dr. Harold Demuren, however, lauded the idea.

Iyayi blamed the aviation regula-tory authorities for the non-viabili-ty of most of the airports, except three. Iyayi, who is also the current Managing Director of Topbrass Aviation, said: “Today, we have 26 airports in the country owned by the Federal Government and of all, only three – Lagos, Abuja and Port Harcourt – accounting for 80.2 per cent of the total public traveling by air. And somebody in the regulato-ry authority cannot ask the ques-tion why this aberration.

“Is it normal that you will have airports built and well equipped, yet there is no service? Their usual answer is that Lagos is the com-mercial capital, Port Harcourt the oil and gas capital and Abuja is the seat of government, but they are all wrong. That is hogwash.

“Are you saying that someone in Kebbi with an airport will not want to fly to Abuja rather than drive 10 hours? Or someone in Jalingo does not want to come into Abuja by air? Are you saying that people in Benue do not want to avoid all the road traffic problems and fly into Abuja? These are the issues.” He added that the current crises in the aviation sector is “a price we are paying for not doing the right things years back.”

It is totally wrong to concession airports because only four viable ones in Abuja, Lagos, Port Harcourt and Kano have been selected. What happens to the 17 other non-viable ones that depend largely on these four airports. Anybody taking the four airports should go with the liabilities of the 17 non-viable ones.”

49

Property 05:20

With the excruciating im-pact of the Coronavirus pandemic on every sec-

tor of the economy, Landlords and property firms have been urged to consider rent relief for tenants.

In fact, as a way of cushioning the impact of COVID-19 on their citizens, some governments in the advanced countries of the world have suspended rent payment while the crisis lasts. France is one such country.

In Nigeria, there are indica-tions that many tenants whose house rents are due from April up to September when experts are estimating a vaccine for COVID-19 will be available, will struggle to pay considering that junior civil servants and non-es-sential traders alike are now staying at home due to partial lockdown imposed by govern-ment.

It is predicted that what will happen after the pandemic in terms of income and job losses is better left to the imagination as tougher times have been pre-dicted ahead.

Nigeria already has close to 7,000 cases of COVID-19 as re-ported by the Nigeria Center for Disease Control, NCDC, and gov-ernment is taking stringent and far-reaching decisions aimed at containing and preventing the spread of the virus.

All social gatherings have also been banned, leading to the cancellation of many con-

ferences and social events, inter state travel, ban on all passen-ger flights as well as non-essen-tial businesses ban is still fully in place.

A tenant in Abuja, the capital city of Nigeria, Musa Abdul says it will be difficult for landlords to get their rents as and when due owing to the current situation on ground.

Abdul believes that the land-lords must be considerate in this trying times.

“If we look at, or think about all that, there is huge loss of in-come. Many companies may not be able to pay salaries im-mediately after all this crisis. The traders’ income comes from what they sell in a day. So, you don’t expect somebody who has no income to be thinking of paying house rents,” he said.

But an estate surveyor and valuer, who did not want his name mentioned, believes that, “what is paramount in the mind of everyone now is survival. There is no economic activity anywhere now; even those pay-ing rent will have to generate economic activity to have the capacity to pay.”

He noted that the present sit-uation was going to affect the ability of some tenants to pay and would pose a further chal-lenge of rent collection as and when due. “Some people may even lose their jobs as things are going. But they’ll still live in a house,” he noted.

The estate surveyor pointed out that it was going to be “wide landlord lamentations” because both the residential and com-mercial property office space, retail malls, sundry shops, and warehouses will be affected.

Already, events centre oper-ators are counting their losses arising from the ban on social gatherings. The social distanc-ing rule is also affecting offices where most workers have been asked by their employers to work from home. “So, it is go-ing to be really tough when this storm is over,” the estate survey-or stressed

In another development, to cushion the effect of COVID-19 lockdown across the country, Pertinence Group, a real estate firm with penchant for people empowerment, has declared three months free rent for all her tenants nationwide.

The rent relief, according to the General Manager, Mr. Jef-frey Ehikioya, in a statement, will cost Pertinence several millions of Naira.

Ehikioya explained that the gesture was the company’s thoughtful economic relief initiative, as the world faces COVID-19 pandemic.

The General Manager, Jeffrey Ehikioya noted that this became necessary to cushion the effect of the global fight against the Pandemic, which has affected Nigerians’ means of livelihood by forcing major economies to a

COvid-19: Why Property Owners Should Consider Rent Relief for Tenants

–By Danlami Nasir Isah

• Pertinence Group lead by waving 3 months rent for its tenants

50

Property 05:20

lockdown.He said, “This is a corporate

social responsibility to see our people through this hard season of the fight against the coronavi-rus scourge.

Subsequently, stakeholders in the real estate industries are calling on property owners to also replicate the same gesture offered by Pertinence Group.

However, they call on land-lords to carefully take into cog-nizance some factors before they give rent deferral or relief to tenants.

A property expert, Chibuzor Nwankwo says that there is a need for landlords to make some considerations first be-fore taking any decision.

“Landlords should careful-ly consider the type of relief they may offer a tenant. Is it in the form of a rent deferral or is it an abatement? If the rent is deferred, how quickly must the tenant repay and over what pe-riod of time? Forcing a tenant to repay rent too early could have a detrimental impact on the tenant’s post-COVID-19 re-covery, jeopardizing its ability to perform under the lease for the remainder of the term.

Is it better for a landlord to col-lect partial rent (e.g., an amount sufficient to pay monthly debt service) or is it more advanta-geous to defer all base rent for

several months and extend the term of the lease proportionately? A property owner should analyze the financial im-pact each pro-posal has on the landlord’s cash flow, and should not hes-itate to offer alternatives to the tenant that are more viable from the land-lord’s perspec-tive,” he further explained.

S p e a k -ing further, N w a n k w o says “When analyzing rent relief proposals, landlords should un-derstand the financial viability of each tenant and ask for sup-porting financial information to verify each tenant’s claims.

“Understanding whether the tenant’s business is likely to re-cover is integral in determining the rental arrangement mov-ing forward. For example, while many restaurants are complete-ly closed due to government or-der, others have been able to re-coup some of their lost revenue by offering take-out and delivery options.

“ L a n d -lords should also consider whether a tenant has applied for any other forms of relief. Has the tenant sought to recover un-der its business interruption in-surance? Has the tenant applied for any of the loan programs in the CARES Act? Landlords may consider conditioning any rent relief provided to a tenant on that tenant first exhausting oth-er, non-lease-related options,”

He added that understanding each specific tenant’s situation can help determine what type of relief a landlord should consider.

Landlords should carefully consider the type of relief they may offer a tenant. Is it in the form of a rent de-ferral or is it an abatement? If the rent is deferred, how quickly must the tenant repay and over what period of time? Forcing a tenant to repay rent too early could have a detrimental impact on the tenant’s post-COVID-19 re-covery, jeopardizing its ability to perform under the lease for the remainder of the term.”

51

Oboabona Disagrees with Obasi’s Claim of Bribe for Shirt

Controversy–By Saidu Abubakar

Sports 05:20

Former Super Eagles cen-tre-back, Godfrey Oboabo-na, has rubbished claims

of former Schalke 04 forward, Chinedu Obasi, that players were told to pay a certain amount of money in exchange for making the 2014 FIFA World Cup squad in Brazil.

Recall that Obasi had a few days ago claimed that he was dropped from the late Stephen Keshi’s team for the 2014 FIFA World Cup in Brazil because he refused to pay a bribe.

Oboabona, who was then a player at Nigeria Professional Football League (NPFL) club, Sunshine stars, disclosed that players were selected based on merit by the late Keshi.

According to the 29-year-old defender, the late Keshi was only very keen on selecting disciplined and well-dedicated players. “I don’t know why such accusations are coming out,” Oboabona, who now plays for Dinamo Batumi in Georgia, was quoted by AOIFootball as say-ing.

“I was a Sunshine Stars play-er then and would not have had that kind of money to pay, so how will he say we paid money to be a part of the World Cup.

“I, Azubuike Egwueke, Ejike Uzoenyi, Kunle Odunlami, and Chigozie Agbim were all playing in the NPFL, and the coach told us that we merited the team be-cause we worked hard and de-served to play at the World Cup.”

Meanwhile, former Keshi’s assistant, Daniel Amokachi, has since reacted to Obasi’s claim.

Amokachi said: “Why come

forward with such now when the man in charge is no longer alive to answer it?”

Godfrey Oboabona

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Floyd Mayweather has taken a dig at WBO light heavy-weight champion Canelo

Alvarez over his five-year con-tract worth $365million with DAZN.

The Mexican fighter became the highest paid sportsman in

2018 shortly after signing an 11-fight deal with the sports streaming promoters.

However, Mayweather who inflicted Canelo’s only career defeat in 2013 said he made al-most double the amount in his last two career fights with Man-

ny Pacquiao and Conor McGre-gor.

“If I’m not mistaken, Canelo got something like eleven fights right, for 300 something million. I got that in one night,” May-weather told FightHype.com, via World Boxing News.

BOxing:Mayweather ‘Attacks’ Highest-earning Sportsman after Signing $365m deal

–Saidu Abubakar with Agency Reports

Sports 05:20

Boxer Mayweather

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Sports 05:20

“I got that (what Canelo signed for over five years) in 28 minutes. You know, I got Cane-lo’s entire contract in 28 min-utes. “I made over $300 million twice. And it only took me like, 36 minutes and 28 minutes.

We can round it up and say one hour. In one hour I made $650 million.

“It takes me 36 mins or less to make $300 million plus. It literal-ly takes me 1 night and 1 fight to make what you might make in

5 years and 11 fights! So really, who’s still winning? You do the maths!”

Canelo claims it would be a “different fight” if he locked horns with Mayweather for a second time.

But the Money Man has in-sisted he has no desire to step back in the ring.

Mayweather added: “You got-ta love my story, The American Dream. I took the hard route, but I made it look easy.

“I’m very, very happy with how my career went. I don’t have to fight anymore. “To those fight-ers who want to call me out, ‘I’m happy and I’m retired, “ May-weather concluded.

“I’m retired. I’m through with boxing.”

Meanwhile, it had earlier been reported that Evander Holyfield has opened up about renewing his feud with his former rival Mike Tyson in a charity boxing match.

The pair went to battle into 1996 and 1997 and Holyfield wants a trilogy to happen includ-ing clash with former champion Riddick Bowe.

The Real Deal is set to get back into the ring for an exhibi-tion fight nine years after his last fight with Danish Brian Nielsen but this time he wants to come face-to-face with the Baddest man on the Planet.

I got that (what Canelo signed for over five years) in 28 minutes. You know, I got Canelo’s entire con-tract in 28 minutes. I made over $300 million twice. And it only took me like, 36 minutes and 28 minutes. We can round it up and say one hour. In one hour I made $650 million.

Boxer Canelo

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