Showing posts with label Petroleum. Show all posts
Showing posts with label Petroleum. Show all posts

Petroleum, the Nigerian Environment and the Petroleum Industry Bill


By Uthman Akinbola
[15/04/13]
The petroleum industry is the backbone of the Nigerian economy, accounting for over 90% of Nigeria’s total foreign exchange revenue. Nigeria is about the seventh largest producer in the world and the largest in Africa. Current daily production of crude oil in Nigeria is over 2 million barrels. However, there is an environmental cost of this economic gain to the Nigerian state. There is always an environmental cost of oil and gas exploration to any oil producing nation!

The world has seen several environmental sustenance efforts driven by the United Nations (through UNEP). From the environmental protection focus of 1972 Stockholm Protocol to the ‘Sustainable Development’ drive of the 1987 Brundtland Report. It was then that sustainable development was said to be about intergenerational equity. We also had. the Rio Earth Conference i.e. ECO-92 Summit in Rio de Janeiro, where debates centred around “Environment and Development” (having Man as the focus of the issue). There was also the Kyoto Protocol of 1997, where reductions of pollutant emissions were proposed.

Just last year (2012) the Nigerian President Goodluck Jonathan attended the summit marking the 20 years of the Rio Earth Conference in Brazil. The focus was still sustainable environmental development.

However, Nigeria has not gained optimally from these efforts and also from the economic benefits derivable from petroleum. (The Gulf states are examples of economies that have gained immensely from the exploration of oil.)

Despite the overwhelming dependence on petroleum for man’s energy needs (and thus the massive exploitation of the oil resourse), over the last couple of decades world’s total reserves have actually gone up rather than down, as revealed in a paper in December, 2012 by Amama Mbabazi, the Ugandan Prime Minister. Also, we have read from several other reports that more oil and gas discoveries have been made on the African continent. This accounts for the increased presence of international economic and political power brokers in our own Gulf of Guinea, and hence offshore Nigeria.      

The August 2011 UNEP Environmental assessment report on Ogoni land (in Rivers State Nigeria – one of the OPAs) states:

Oil exploration and production projects may have impacts on the natural environment long before any oil is actually produced. These are complex, multi-faceted projects, with many different phases, including: land survey, land clearance for seismic lines, establishment of seismic and drilling camps, site preparation, infrastracture construction, drilling for oil (even when the effort is unsuccessful) and development of transportation infrastructure. Once a facility begins operating, others issues have to be dealt with, such as spills caused during oil production and the disposal of water (often salty and known as ‘produced water’) and flaring of gas (‘produced gas’) generated alongside the oil. All of these activities and their effects leave an environmental footprint.

Normally, the dillema of an oil producing state is ‘the exploration and production of oil for economic gains without upsetting the environment’. However, the situation of Nigeria is that this economic benefit ordinarily derivable from oil is frittered away, and no serious effort to protect the environment has been made. So the Nigerian state has no substantial economic gain to show for the environmental devastation from oil exploration. A case of double jeopardy. This is the first issue the Nigerian people must address.

The second issue is the roll-back of the already done damage to the environment. How do we institutionalise the restoration and regenration of the OPAs? How do we achieve the roll-back of the over four-decade long degradation that the OPAs air and water media, land and ecological biodiversity have witnessed? This is a challenge that we must confront.

Three main sources of hydrocarbon pollution in the oil producing areas are – oil spills; gas flares; and effluent and waste discharges. The major causes of the spill incidences include pipelines and flow lines leakage/blowouts, blowouts from well-heads and spills from flowstations. It also includes sabotage of oil facilities. Oil production involves the burning of hydrocarbon gases. The flaring of natural or associated gas is done as a by-product of the drilling of crude oil. Gas flares has negative impact on the local ecology and climate. One of the impacts, aside the raising of surrounding temperature, is light pollution, which subjects the living organism around the vicinity of the flare to 24-hour daylight. This destabilises diurnality and night-time patterns in animals.

The OPAs have experienced many major oil spills since production began in 1958 thereabouts. For instance.. The Niger Delta experienced two major oil spills, the Funiwa oil well blowout in 1980 and the Jones Creek oil spillage in 1998 that resulted in the greatest mangrove forest devastation ever recorded worldwide as stated in United Nations Development Program’s (UNDP) report on Nigeria in 2006.

The World Bank (2005) estimated that Nigeria flares about 75 per cent of the gas it produces due to the lack of a local market and infrastructure. This is an evidence of unsustainable production.

Another important issue is that about human development.

Generally, the communities from which oil is drilled often see the oil companies as vampires exploiting their resources, usually, to the point of exhaustion with little or no benefit to the people.

Addressing oil security and illegal bunkering is also important, for this erodes the revenue acruable to the FG. It also causes a lot of environmental damage. I donot believe that appealing to the international community to help us fight illegal oil bunkering will necessarily solve the problem.

There is no doubt that the oil and gas sector is very crucial in the industrial advances made by man and its importance is aptly described by Amama Mbabazi, the Prime minister of Uganda when he opined that: ‘Oil is a strategic resource that contributes to economic oportunity and energy security for the global market. Oil plays a dominant role in meeting the world’s energy needs, and this situation is expected to continue for decades to come. Even with the investments countries are making in renewable energy, energy efficiency and other measures to support a low-carbon economy, the International Energy Agency’s World Energy Outlook for 2009 still expects world oil demand to grow by one percent per year until 2030.’

He also asserted that ‘oil and gas are absolutely necessary to the world’s industrial economies. Together, they supply two-thirds of the world’s energy consumption. They also form the building blocks of over 30,000 different chemicals.’ This is why we have to take the oil industry with all seriousness and take maximum advantage of it for a robust national development.

Nonetheless, we must be mindful of the environmental impact of petroleum exploration, and strive to undo the mistake of the past, while embarking on measures to protect the environment against future degradation.

Way Forward
The Niger Delta Regional Master Plan is one important solution. The NDDC serving as Niger Delta Policy Council should address the Niger Delta policy issues and work to implement and ensure the success of the initiatives in 25, or so, areas covered in the Master Plan. Thus, many stakeholders must work together to achieve meaningful change. All levels of government and the NDDC, the oil companies, the organized private sector, civil society organizations and development agencies should form partnerships around the Master Plan for sustainable development and the attainment of the Millennium Development Goals (MDGs).

The United Nations Environment Program (UNEP) Environmental Assessment report on Ogoni land (August 2011) has recommended some solutions, and some of these are applicable to the entire oil producing areas.

It is pertinent that Nigerian government study the UNEP report and work to adapt the recommendations therein to the entire OPAs.

Some of the recommendations include:

Due to the wide extent of contamination in Ogoni land and nearby areas, and the varying degrees of degradation, there will not be one single clean-up technique appropriate for the entire area. A combination of approaches will therefore need to be considered, ranging from active intervention for cleaning the top soil and replanting mangrove to passive monitoring of natural regeneration. Practical action at the regulatory, operational and monitoring levels is also proposed.

Comprehensive review of existing Nigerian legislation on contaminated site clean-up considering recent international developments in regulation and incorporating community consultation to determine remediation closure levels, so that decisions on new legislation are seen as both transparent and inclusive.

A Centre of Excellence for Environmental Restoration should be established in Ogoni land to promote learning in other areas impacted by oil contamination, in the Niger Delta and elsewhere in the world. Offering a range of activities and services, the Centre could run training courses in environmental monitoring and restoration and ultimately become a model for environmental restoration, attracting international attention.

Another important solution is that the Federal Government should institutionalize a form of the Community Action for a Renewed Environment (CARE) programme operated in the United States. It is a competitive grant programme that offers an innovative way for a community to organize and take action to reduce toxic pollution in its local environment, such that the kind of relationship and arrangements that allow some supposed elders and leaders, and few privileged youths, benefit from special treatment at the expense of the majority in the Niger Delta would be obliterated. The ‘rugged’ individualism along and within ethnic lines in existence at present does not augur well for environmental sustenance. Through that programme any community within the Niger Delta creates a partnership that implements solutions to reduce releases of toxic pollutants and minimize people's exposure to them. This programme may even be adapted for the whole of Nigeria through the Federal Ministry of Environment. In any case, it helps communities tread the path to a renewed environment.

The Petroleum Industry Bill (PIB) may be a good step in the right direction. Thus, it should be seriously and sincerely addressed. National interest should override personal, regional and all other considerations. I believe that the focus or rallying point should be the maintenance of environmental fairness and justice for all. This the national assembly must take cognisance of in their deliberations towards achieving national development.

The issue of concentrating power or control of oil resource and licenses in the president’s hand through the minister of petroleum resources must be looked into. This is the same approach the Ugandan Oil Exploration Bill has taken and which is not good for the interest of the entire nation. We are aware of the self-styled dictator Museveni had turned himself into in Uganda, so one was not surprised that he pushed for such in the country’s oil bill. Is that the way we want to go?

It is better for a state to have such powers vested on government agencies and institutions rather than individual office holders, since agencies perform statutory functions often outside the direct supervision of the executive arm of government. This prevents subjecting the control of an important national resource like oil to the whims and caprices of one man or woman.

Liberia: Best Contract Ever - Block 13 Nets U.S.$50 Million Upfront, NOCAL Seeks Approval

ALLAFRICA.COM
THE ANALYST [08/03/13]

Oil and gas discovery in Liberia bumped into premature hullabaloo with particular attention clamoring over the manner and form that suspected wells of the coveted natural resource were negotiated and handed over to potential investors. The leadership of the National Oil Company overseeing the budding oil sector took cue from the discontent and has since begun to right previous wrongs with deliberately reformed policies. The turnaround is paying off, not only in the fact that the noise over oil and contracts is receding, but also in the consummation of revenue-bolstering and people-centered agreements that NOCAL and oil barons are reaching. Block 13 which had been in the center of controversy and nearly presumed to have been a giveaway has now turned out to be a product of the most lucrative contract ever, with a colossal sum of upfront US$50m signature fees along with other goodies announced. The Analyst reports 


The National Oil Company is seeking the approval of Oil Block 13 contract by President Sirleaf and its subsequent rectification by the National Legislature. At a MICAT press briefing yesterday, NOCAL Chief Executive Officer, Dr. Randolph McClain, disclosed that renegotiated Block 13 based on various financial provisions of the contract, US$50m is to be received by Government immediately upon ratification and printing into handbills. Components of the amount include $21.25m, which is one of the highest Liberia oil block signature bonus yet.


The amount of $21.25m is also the largest ever upfront payouts to a non-producing country in the world, Dr. McClain boasted, adding: Up until now, it may interest you to know that  the largest signature bonus Liberia has received for a single offshore oil block is US$3.33m.

Nigeria: The North Does Not Control Nigeria's Oil Blocks

ALLAFRICA.COM
PREMIUM TIMES [07/03/13]

Opinion

Senator Ita Enang's spirited claim at the National Assembly Wednesday to the effect that 83% of the country's oil block is in the hands of northerners appears to be inspired from assertions contained in an old article by a newspaper commentator, Mr. Ross Alabo-George whose famous essay was titled Poverty And Deprivation: Why The North Is Poor.

In the excerpted refutation below, Toyin Akinosho, a petroleum geologist with over two decades of work at Chevron and now publisher of the well-regarded Africa Oil and Gas Report, argues angrily that such lines of thought canvassed by the likes of Senator Ita Solomon Enang and indeed Mr. Ross Alabo-George are merely hysterical, and tendentious, designed to mislead the public. Mr. Akinosho characterizes the arguments as crappy and crummy. It is excerpted from the African Oil+Gas Report for the value it brings to the current debate about Nigerians oil resources and the National Question.

Alabo-George's article plays up so well the sentiments that a good number of Nigerians, especially middle class types excluded from the spoils of the petroleum subsidy, and allied deliverables, nurse about the kind of leadership we have suffered since independence.

Nigeria: Ciroma - FG Not Serious About Oil Search in North

ALLAFRICA.COM
DAILY TRUST [08/03/13]

Damaturu — Elder statesman and former minister of finance Malam Adamu Ciroma has observed that five years ago nobody would have believed that Yobe State will be faced with grievous calamity occasioned by the Boko Haram crisis.

Speaking at a town hall meeting with President Goodluck Jonathan in Damaturu yesterday, Ciroma attributed the problem to the neglect of agriculture, health, education as well as the lackluster attitude of the Federal Government towards oil exploration in the Chad Basin.

Speaking later in a BBC Hausa interview, Ciroma insisted that granting amnesty to Boko Haram sect will help end the violence in the North.

Nigeria: Oil Blocs Revelation - Northern Senators Caged as PIB Sails Through

ALLAFRICA.COM
VANGUARD [07/03/13]

Abuja — AFTER three days of intense debates and contributions on the controversial Petroleum Industry Bill, PIB, northern Senators were Thursday caged by their Southern colleagues and the bill unanimously scaled the second reading.


The resolution by the Senators to pass the bill was contrary to fears from some quarters especially with the initial stiff opposition from the lawmakers from the North that it will not see the light of the day.


The passage also came barely twenty four hours after the Chairman, Senate Committee on Rules and Business, Senator Ita Enang, PDP, Akwa Ibom North/East called on President Goodluck Jonathan to revoke and re-allocate oil blocs where he raised alarm that the Northerners control 83 percent of oil blocs in the country, leaving a negligible 27 percent for the South where the oil comes from.

Nigerian Senate vows to limit Jonathan, Alison-Madueke’s powers in petroleum law

PREMIUM TIMES [07/03/13]

[SOURCE: http://premiumtimesng.com]
Senators said the PIB currently allocates too much power to the President and the Minister of Petroleum.

A Senate, polarized by the controversies of a new oil law, closed ranks Thursday to give the Petroleum Industry Bill, PIB, a second reading, but made it clear it will curb the “unprecedented” powers given the president and the petroleum minister, before giving the legislation final approval.

Chavez death brings uncertainty, hope to oil patch

NEW YORK POST
From ASSOCIATED PRESS [06/03/13]

Supporters of Venezuela's President Hugo Chavez 
cry outside the military hospital where Chavez, 58, 
died Tuesday in Caracas.
HOUSTON — Venezuela's oil production is poised to reverse a dramatic decline that has seen exports fall by nearly half during Hugo Chavez's time as president.

Following Chavez's death Tuesday, Venezuela, which is a member of OPEC and sits on the world's second-largest oil reserves, faces near-term political uncertainty that could bring further turmoil to its oil industry. And even under the best circumstances it would take years to increase production and exports, analysts say. But any new government would have a powerful economic incentive to make that a top priority.

Exports fell from 3 million barrels per day in 2000 to 1.7 million barrels per day in 2011. Chavez relied heavily on the country's oil income to fund social programs, but reinvested relatively little of it to exploit new oil fields and replace depleted ones.

OECD says oil prices could reach $150-$270/bbl by 2020

World Oil News Center [06/03/13]

LONDON -- Oil prices could rise to anywhere between $150 and $270/bbl by 2020 as demand growth in emerging markets like India and China out paces expected supply, the OECD said Wednesday.

"I think people have been calmer about oil prices given the new supply, but if you really look at the implications of rising demand, you see this isn't true," said Isabelle Koske, economist at the Organization for Economic Co-Operation and Development and one author of a report on oil prices published Wednesday.

"There is a strong price increase needed despite this new oil production coming on stream," Ms. Koske told Dow Jones Newswires.

Nigeria: Senator Saraki's Debate On the Principles of the Petroleum Industry Bill PIB 2012

ALLAFRICA.COM
Office of Senator Bukola Saraki (Ilorin) [05/03/13]


Press Release


PROTOCOL


PREAMBLE
There is little doubt that the Nigerian petroleum industry is in dire need of reform. On the face of it, having a system running on almost a half a century old law is bad enough. The fact that today we are here debating the PIB is essentially because most of us agree that the industry is performing sub-optimally compared to its counterparts around the globe. Aside international comparison, evidence of sub-optimal performance of the industry is legion.
• The endemic corruption in the industry

• The lack of probity and accountability

• Too much political interference

• Nepotism,

• Lack of transparency

Namibia: N$2,2 Billion Oil Drilling Starts in Nam Waters

ALLAFRICA.COM
THE NAMIBIAN (Windhoek) [06/03/13]


Walvis Bay — IN the next two weeks the Brazilian oil and gas exploration company High Resolution Technology (HRT) will move the 'Transocean Marianas' semi-submersible drilling rig to potential oil wells off the coast of Namibia to begin a N$2,2 billion, eight-month operation.

The operation was announced on Monday during a site visit and briefing onboard the rig currently undergoing maintenance in the Walvis Bay harbour. The briefing was attended by Namibian businessman Knowledge Katti, Prime Minister Hage Geingob, Minister of Mines and Energy Isak Katali, former President Sam Nujoma and Member of Parliament Ben Amadhila.

Ethiopia: Govt and Tullow Oil PLC Dismiss Reports of Oil Discovery

ALLAFRICA.COM
Government of Ethiopia (Addis Ababa) [06/03/13]


The Ethiopian government and Tullow Oil Plc, have dismissed media reports that the UK company has discovered oil in Ethiopia's western South Omo area. The US-based website, Energy and Capital, and a number of news outlets last week reported that Tullow had discovered commercial-grade oil in the rift valley of Ethiopia near the border with Kenya.

Other reports said the Kenya-Ethiopia Tertiary Rift, which stretches from southern Ethiopia to southwestern Kenya, was believed to have as much as 23 billion barrels of oil and gas resources. The ministry said it was wrong and irresponsible for the media to come to its own conclusions while the project was still only in the early stages of exploration.

Nigeria: Fireworks in Senate Over Petroleum Industry Bill

ALLAFRICA.COM
DAILY TRUST [06/03/13]

Photo: Vanguard   [SOURCE: http://allafrica.com]
The Senate's debate on the Petroleum Industry Bill (PIB) yesterday sparked a rift between northern senators and their counterparts from the Niger Delta region.

The second reading of the bill witnessed a technical hitch as all the senators in the chamber first observed that copies of the lead debate given to them were different from what Senate Leader Ndoma-Egba was reading. Senate President David Mark quickly asked Ndoma-Egba to hold on for 10 minutes for the errors to be corrected.

Nigeria: A Bold Bill for Change Opens Up the Debate On Nigeria's Oil Industry

ALLAFRICA.COM
AFRICAN ARGUMENTS [06/03/13]

Analysis


Ever since Nigeria's first oil find at Olobiri in 1956, the question of who should benefit and pay for the costs and consequences of oil production has been a contentious issue; often with little consensus amongst the key players - namely the Nigerian government, the oil companies, and the various communities affected - on who spilled what, where and when. Dealing with such a hornets' nest of interests has often seemed insurmountable, yet a bill before Nigeria's assembly and president seeks to change the situation.


Senator Dr. Bukola Saraki, a former governor of Kwara State, and currently the Chairman of the Senate committee for the environment, has tabled a bill aimed at strengthening the regulatory and institutional power of NOSDRA (National Oil Detection and Response Agency) - one of the agencies responsible for cleaning up oil spills in the country. His proposed bill and the contentious issue of who is responsible for cleaning up oil spills in the Niger Delta was the subject of a meeting held by the Royal African Society on Tuesday, 26th February at the offices of the law firm TLT. The panel included presentations by Senator Dr. Bukola Saraki; Barnaby Briggs, Strategic Relations Manager for Shell International; Nike Olafimihan, Head of Legal at Shell Petroleum Development Company of Nigeria (SPDC), and Joseph Croft, Executive Director of the Stakeholder Democracy Network, a UK based charity with offices in Port Harcourt, Nigeria.

How dependent is the US on foreign oil?

[05/03/13]

http://www.eia.gov/energy_in_brief/images/charts/imports_domestic_petro_shares_demand-large.gifThe United States relied on net imports (imports minus exports) for about 45% of the petroleum (crude oil and petroleum products) that the country consumed in 2011. Just over half of these imports came from the Western Hemisphere. This dependence on foreign petroleum has declined since peaking in 2005.

The United States consumed 18.8 million barrels per day (MMbd) of petroleum products during 2011, making it the world's largest petroleum consumer. The United States was third in crude oil production at 5.7 MMbd. But crude oil alone does not constitute all U.S. petroleum supplies. Significant gains occur, because crude oil expands in the refining process, liquid fuel is captured in the processing of natural gas, and there are other sources of liquid fuel, including biofuels. These additional supplies totaled 4.6 MMbd in 2011.

OPEC crude price at USD 106.79

KUWAIT NEWS AGENCY (KUNA) [04/03/13]

VIENNA, March 4 (KUNA) -- OPEC daily basket price stood at USD 106.79 a barrel Friday, 1 March 2013, compared with USD 108.62 the previous day, according to OPEC's news bulletin on Monday.

Cuba Diversifies – But Energy Focus Still on Oil

INTER PRESS SERVICE - NEWS AGENCY [04/03/13]

The Cienfuegos refinery was revived in 2007. Credit: Jorge Luis Baños/IPS
The Cienfuegos refinery was revived in 2007. Credit: Jorge Luis Baños/IPS
[SOURCE: www.ipsnews.ne]
HAVANA, Mar 4 2013 (IPS) - Cuba continues to focus heavily on oil for its energy needs, through agreements with partners like Venezuela, with the hope of discovering commercially exploitable wells in the Gulf of Mexico.

But it is also starting to take steps to diversify energy sources, as part of the ongoing economic reform process.

Investments in the Camilo Cienfuegos refinery will upgrade the waste treatment plant and create automated systems in the truck loading yard in order to cut losses in handling, the plant’s director, Humberto Padrón, told IPS. He also said the refinery would be expanded, to double its processing capacity.

Shell Threatens to Shut Down Pipeline Over Attacks

VOICE OF AMERICA [04/03/13]

Oil giant Royal Dutch Shell says it may be forced to shut down one of its key pipelines in Nigeria because of "unprecedented" oil thefts.

Shell Nigeria's Managing Director Mutiu Sunmonu says flow stations on the Nembe Creek Trunkline were shut down three times between February 22 and February 25, with each stop cutting production by 150,000 barrels a day.

Shares in TransCanada higher after positive environmental report

REUTERS [04/03/13]
By Alastair Sharp

TORONTO, March 4 (Reuters) - Shares in TransCanada Corp rose 0.3 percent to C$47.95 at the open after a positive U.S. report on its Keystone XL pipeline project was published late on Friday.

Nigeria: Crude Oil Theft Increased Astronomically Under Jonathan That We May Shut Down Our Facilities - Shell

ALLAFRICA.COM
PREMIUM TIMES [04/03/13]

Global oil giant, Shell, the largest producer of Nigerian crude, said on Sunday that it has witnessed a sporadic rise in crude oil theft in the last three weeks than it witnessed in the past three years.

"We have now witnessed a significant upsurge in the activities of crude oil thieves. The situation in the last few weeks is unprecedented.

"The volume (of crude oil) being stolen is the highest in the last three years. Over 60, 000 barrels per day from Shell alone," Mutiu Sunmonu, the Managing Director of Shell Petroleum Development Company of Nigeria Limited, lamented to journalists on Sunday.

Mr. Sunmonu said apart from the astronomical rise in crude oil theft, the perpetrators have also become emboldened and more sophisticated.

"Over time, this whole crime has got a lot more sophisticated and you could see that the perpetrators are now setting up barge building yards; they are setting up storage facilities; they are setting up tank farms for storing the crude oil, prior to shipping out," he said.

Angola: Sonangol Considered Second Major African Company

ALLAFRICA.COM
ANGOLA PRESS [04/03/13]

Paris — The Angolan Oil Company (SONANGOL) was considered the second greatest firm of Africa, according to a study disclosed last weekend in Paris by the Jeune Afrique magazine.

The study evaluated about 500 African companies based in Africa and for the second consecutive year, SONANGOL occupy the same position behind the Algerian Oil Company of Sonatrach.