Nigeria Content Online

The Nigerian
content policy is not about allocation of marginal oil blocks to
Nigerians, but the promotion of the Nigerian service companies’
capacity to participate effectively in the development of the country’s
oil and gas industry, a senior official has said.

Ernest Nwapa, the
executive secretary of the Nigerian Content Development and Monitoring
Board (NCDMB), said this in Kaduna, Kaduna State, at the Nigeria Bar
Association (NBA) conference.

Mr. Nwapa noted
that with international oil companies controlling over 80 percent of
the petroleum industry business in Nigeria, government is not satisfied
that indigenous operators are left to be contented with some left over
jobs outsourced from their service arms.

He said the board
has agreed to partner with the NBA towards the effective implementation
of the Nigerian Content Act, recently approved by President Goodluck
Jonathan.

A new mindset is necessary

He added that the
effective implementation of the Act required a change of mindset by
Nigerians, some of who still believe that it is impracticable for
Nigerians to perform on the major jobs in the oil and gas industry,
pointing out that only through collaboration with bodies like the NBA,
Department of Petroleum Resources (DPR), and Nigerian Maritime
Administration and Safety Agency (NIMASA) that the provisions of the
Act would be successfully implemented.

He urged lawyers to
always show national interest when handling briefs for clients,
pointing out that some unpatriotic elements would want to manipulate
documents on their ownership of equipment used for work in the industry
as required by the Act. This, he argued, is capable of impeding the
achievement of the objectives of the law.

The board will also
involve the Federal Inland Revenue Service (FIRS), the Nigerian Customs
Service (NCS) and other relevant government agencies in the
verification of the personnel and assets of all operating and service
companies in the Nigerian oil and gas industry as a way of ensuring
that beneficiaries are up-to-date in their obligations to government.

Nwapa also harped
on the need for the building of standard pipe mills in Nigeria to
service the oil and gas industry, to provide pipes for future projects
like the planned Nigerian Gas Master Plan (NGMP) and the Trans Saharan
Gas Pipeline.

To demonstrate
government’s commitment to support local investors, he said the NCDMB
is insisting that operating and service companies must not be allowed
to import pipes for their projects until the combined capacity of
existing and prospective developers of local pipe mills has been
exhausted.

The Nigerian
Content Act, he emphasised, was not government’s attempt to drive away
the multinationals from the country’s oil and gas industry. Rather, it
is to attract more investments into the industry, adding that the
provisions of the Act expects the multinationals to do the jobs in
Nigeria, which will ultimately be cheaper for their operations and
yield mutual benefit for the companies and the Nigerian economy.

George Etomi, chairman of the section on Business Law of the NBA,
said it was critical for the NBA to support the implementation of the
Nigerian Content Act, saying this was a strategic effort to raise the
capacity and standards of the indigenous operators to compete globally,
citing the examples of countries like Malaysia and Brazil where such
laws have been used to develop their economies in the recent past.

It is sad that the
United Nations Environment Programme (UNEP) that ought to be an arbiter
in cases of environmental and human rights abuses has become a partisan
at a price tag of $10 million at the behest of Shell. Just imagine what
that amount of money could have done if it had been deployed towards a
serious environmental audit and remediation.

UNEP is preparing a
report claiming that 90 percent of the oil spills in Ogoni are caused
by the locals in the process of stealing crude from the pipes and that
Shell’s aged pipelines and ill maintained installations account for a
mere 10 percent of the spills.

What period was
covered by this study? Does it include the spills over which the
Movement for the Survival of Ogoni People (MOSOP) complained and
resisted further degradation? Does it include the degradation that
pitched Ken Saro-Wiwa and MOSOP against oppressive dictators and Shell?

This attempt to
rewrite the history of environmental violence visited on the Niger
Delta by transnational oil corporations sounds like a story from outer
space. UNEP has simply lent itself to become Shell’s pet parrot. What
they are saying is in line with what Shell used to claim in the 1980s
and at any given opportunity.

Then, they claimed
that about 80 percent of the oil spills were caused by vandalism or
sabotage. The claim of sabotage is particularly attractive to oil
corporations because they are exempted from payment of compensations.
In order to maximise profits, it makes sense for oil to spill into the
creeks, swamps, and farmlands, destroy the means of livelihood of the
locals; and then turn around and blame the victims.

Anyone who wishes
to gain more insight into the story of Shell in Nigeria, the book,
‘Where Vultures Feast – Forty Years of Shell in Nigeria’ written by
Oronto Douglas and Ike Okonta is worth reading. It clearly shows that
the story of Shell and its records of oil spills are not new.

Expert assessment

Another specialist
who has done significant work on the Ogoni and the Niger Delta
environment is Richard Steiner. An international expert on oil spills,
Steiner, a professor, participated in two studies on oil damage in the
Niger Delta, and was contracted to write the manual on oil damage
assessment and restoration by UNEP in 2004.

When Shell hired
UNEP to carry out the present study, Steiner offered to provide
scientific advice and guidance to the UNEP Ogoni study, but his offer
was declined. When asked what he thought of the UNEP report, Steiner
said,

“The conclusions
from the Shell-financed UNEP study on oil damage in Ogoniland are
simply incorrect. Our earlier results suggest that much of the oil
spilled there was due to poor practice by Shell, rather than bunkering
and sabotage. I will need to review their methodology and expertise,
but it is entirely implausible that 90 percent of the oil spilled was
due to bunkering.

I suspect this was
not peer reviewed. This is not an independent, credible assessment, and
is a real disservice to the environment, the people of the Niger Delta,
and environmental justice globally. I suggest that the study be
recalled by UNEP, a credible independent peer review process be
implemented, and then reissued, if there is anything left to report.”

Environmental field
monitors have compiled a catalogue of spills by oil companies operating
in Nigeria. The National Oil Spill Detection and Response Agency
(NOSDRA) reports a total of 3,203 oil spills in the Niger Delta region
in the last four years, while the records of the Directorate of
Petroleum Resources’ show that 4,835 incidents resulted in the spillage
of at least 2,446,322 barrels of crude oil between 1976 and 1996.
Seventy seven percent of that quantity was not recovered and was lost
to the environment. The list continues to lengthen everyday.

Some notable past
spills include the Escravos spill of 1978 in which 300,000 barrels of
crude oil was spilled into the coastal waters and another 1978 spill
caused by tank failure at Forcados Terminal in which 580,000 barrels
were spewed into the environment. Their spill in 2008 at Ikot Ada Udoh
went unattended to for months before it was stopped.

The matter of their 2004 spill at Goi, Ogoni, is in the courts in The Netherlands.

A victim testimony

On June 6, 2001,
Shell oil pipeline, which passes through the Baraale community,
ruptured and started spilling crude oil into nearby forests, farmlands,
and houses. Aseme Mbani, chief of the community, was in his farm when
the pipeline ruptured, he told environmental field monitors.

Mr. Mbani said he took steps to ensure that Shell repaired the ruptured pipeline.

“I reported the
matter to the Shell contractors in charge of the pipeline and also to
the police that the pipeline is leaking. After that, we wrote Shell a
‘Save Our Soul’ letter. When there was no response, I went to Shell to
report at a section they call ‘Ogoni Re-entry.’ They told me they have
seen the letter I wrote. They said we should suffer the spillage
because we caused it. They said we have been cutting pipelines and we
should reap what we sow. Disaster struck on October 1, 2001, when the
leaking oil caught fire.”

Detection of causes
of oil spills does not require rocket science. One of the first steps
is the conduct of the Joint Inspection Visits (JIVs) by teams having
oil company representatives, relevant government agencies such as the
DPR and community representatives. There are allegations that these
visits have been used to bribe and divide communities. It will be
interesting for UNEP to produce the JIV reports, with identifiable
signatures of community representatives to back up the claims of a
clean bill of health for Shell in the matter of oil spills.

Bassey is Chair, Friends of the Earth International

The crisis rocking
African Petroleum continued yesterday with some shareholders and staff
staging a protest at the head office of the Securities and Exchange
Commission (SEC) in Abuja.

The protest was in
support of the petition written by the company’s former executive
director, finance and IT, Clement Aviomoh, against the chairman, Femi
Otedola. Otedola’s company, Zenon Petroleum and Gas limited, is the
major investor in AP.

A press release
signed by Lanre Oloyi, the head of corporate affairs of SEC, said “some
persons claiming to be shareholders and staff of the African Petroleum
Plc (AP) staged a peaceful demonstration in front of the commission
head office in Abuja this morning (yesterday).”

Mr. Oloyi also said
in the statement that the commission is in receipt of Mr. Aviomoh’s
allegations against Mr. Otedola. “The commission has launched a formal
investigation into these allegations,” the statement added. The
Nigerian Stock Exchange has also said it will make public its findings.

Mr. Aviomoh, in the
petition, insisted that he has facts and data which show that Otedola
has been milking AP for his private gain for the past two years.

“AP made a loss of
N15 billion in 2009 due to the fact that Otedola’s companies started
selling products to AP at higher prices than normal, at times higher
than the retail pump price at gas station.”

Mr. Aviomoh also
alleged that for daring to challenge his style of administration, Mr.
Otedola forced Tunde Falasinnu, the managing director of AP, to resign
his office, and suspended the company secretary, Elizabeth Idigbe, and
himself.

No knowledge

However, Mr.
Aviomoh denied knowledge of yesterday’s protest. When NEXT contacted
him on the phone, he said. “I have sent my petition and SEC is
investigating. The last I heard from them was they asked for some
clarifications and I have replied concerning an annexure to the
petition.”

When NEXT contacted
Tajudeen Adeyemi, the spokesperson for AP, he insisted members of staff
at AP were not involved in the protest. “How can our staff be involved.
Yes, some shareholders hired by the sacked director (Aviomoh) staged a
protest. We did our investigation and found out that he is in Abuja. He
is based in Lagos, so what was he doing in Abuja?”

Mr. Adeyemi said
the company is not bothered about the development as it is awaiting the
conclusion of SEC investigation of the petition.

Lately, AP has been
in the eye of the storm in the aftermath of the allegation s and
counter allegations between the sacked former Executive Director, Mr.
Aviomoh and the Management of AP. .

A statement
released by AP, a fortnight ago, said that Mr. Aviomoh’s petition is
unfounded and was triggered by an earlier petition written by Mr.
Otedola in June to SEC about how N24.5 billion, which was due to be
paid to AP, is still outstanding. Mr. Otedola himself is on self exile
apparently because according to sources close to him, he fears for his
life.

At
the Nigerian Stock Exchange on Wednesday, Access Bank posted
significant improvement in its audited financial result for the second
quarter ended June 30.

The
bank, which recorded a loss after tax of about N11.952 billion in the
period in view, 2009, posted a profit after tax of N6.666 billion this
year, reflecting a 155.77 percent increase. Access Bank also recorded a
3.61 percent growth in its total net asset during the quarter, from
N168.346 billion to N174.429 billion.

However, the bank’s gross earnings for the period declined by 19.47 percent, from N61.351 billion to N49.408 billion.

Meanwhile,
the company’s board of directors has proposed an interim dividend of 20
kobo per share for its shareholders. The bank’s share will be marked
for payment on September 3 while the cash will be disbursed on
September 14. The stock price of Access Bank went up yesterday by 4.12
percent, “most probably on the back of the dividend declared,” some
analysts said.

Also
on Wednesday, Royal Exchange, an insurance company, released its
audited accounts for the period ended 31st December, 2009. The result
shows a 9.60 percent increase in turnover, from N3.314 billion to
N3.632 billion. The profit after tax inched up by 106.57 percent from a
loss of N2.435 billion to N160.07 billion, just as net asset for the
period went up by 29.27 percent from N6.084 billion to N7.865 billion.

Decline continues

The decline in the value of equities at the nation’s capital market on Wednesday cuts across all sectors of the bourse.

The
resilient nature seen in sectors like the breweries, conglomerates,
food and beverages, since the current downturn started last week, could
not be sustained after yesterday’s trading session.

The
All-Share Index declined by 1.60percent to close at 24,111.51 basis
points, from the previous day’s figures of 24,503.61. Market
capitalisation also followed with N96 billion losses, to close at
N5.896 trillion from Tuesday’s N5.992 billion.

The
number of gainers at the close of trading session closed at 20,
compared with the 16 gainers recorded on Tuesday, while losers closed
lower at 50, compared with the 57 losers recorded the previous trading
day.

Egbo
Amaechi, an executive member of the Shareholders Association of
Nigeria, attributed the current poor performance at the Exchange to
“profit taking by institutional investors.” Mr. Amaechi, however,
expressed satisfaction with efforts by some companies to give their
shareholders returns on investment.

The
NSE, yesterday, marked down the share price of Honeywell Flourmills for
a dividend of 11 kobo per share, declared by the board of the company.

The
banking subsector led the market transaction volume on Wednesday with
115.437 million units, valued at N909.02 million exchanged in 3,387
deals. Transactions in the shares of First Bank, Access Bank, Diamond
Bank, Guaranty Trust Bank, and Zenith Bank, boosted the volume traded
in the sector.

The
total volume of 62.346 million units, valued at N677.413 million,
traded in the shares of the five banks, accounted for 54.01 percent of
the entire sector volume.

Nigeria’s central
bank said on Wednesday it was ready to release 300 billion naira ($2
billion) from a fund set aside to stimulate credit to the domestic
power sector and the troubled airline industry.

The central bank
announced several months ago it was establishing the fund to help
finance badly needed power projects and to allow banks to refinance
loans to the heavily-indebted airline industry.

The move is part of
efforts to stimulate lending and boost growth in sub-Saharan Africa’s
second biggest economy in the wake of a $4 billion bailout of the
banking sector last year, which has left banks reluctant to lend.

President Goodluck Jonathan has made improving Nigeria’s electricity
supply one of his main priorities and has announced plans to privatise
electricity generation and distribution next year.

Access Bank
yesterday said it had swung to a 9.81 billion naira pre-tax profit in
the half year to June, from a loss of 14.33 billion naira a year ago.

Gross earnings
dropped to 49.41 billion naira in the period from 61.35 billion naira
in the same period of last year, it said in a filing with the Nigerian
Stock Exchange.

Access Bank directors are proposing an interim dividend of 0.20 naira per share payable on September 3, 2010.

Nigeria’s naira
currency weakened at both the interbank market and official window on
Wednesday after demand for the U.S. dollar unexpectedly hit a
five-month high, traders said.

The central bank
sold $250 million at its bi-weekly foreign exchange auction on
Wednesday against the $517 million demanded, prompting the naira to
fall, traders said.

The local currency
eased to 151.05 to the dollar on the interbank market from 150.95 at
Tuesday’s close. The central bank sold at 149.06 to the dollar at
Wednesday’s auction, compared to 148.88 on Monday.

“The sudden
increase in demand for the greenback at the bi-weekly auction forced
many forex users to seek alternative sources … This created frenzy in
the interbank market, forcing down the naira,” one dealer said.

But traders said the central bank was quick to respond with an
additional offer to sell dollars to lenders to cover the shortfall in
supply.

Namibia’s central
bank left interest rates unchanged on Wednesday, saying the economic
recovery would continue to gain momentum while rising domestic demand
and commodity prices posed upside risks for inflation.

The Bank of Namibia
kept the repo rate steady at 7 percent, having trimmed it by 350 basis
points between December 2008 and June last year, to boost flagging
growth after the global downturn hit demand for exports from its key
mining sector.

The bank’s
executive “is of the view that in line with the improved global
economic outlook, the Namibian economy would continue to gain
momentum,” Governor Ipumbu Shiimi said in a statement.

A Reuters poll of economists last month saw growth in the world’s
largest uranium producer at 3.5 percent this year, quickening to 4.0
percent in 2011.

Egyptian property
developer, SODIC, said on Wednesday it returned to profit in the first
half of 2010, after it recognised revenue from some of its 4 billion
Egyptian pounds of contracted sales.

The firm, also
known as Sixth of October Development and Investment Company, made a
net profit of 51 million pounds in the first six months of 2010,
compared to a previously-stated loss of 20.8 million a year earlier.

SODIC, Egypt’s fourth biggest developer by market value, said it made about 1.5 billion pounds worth of sales so far this year.

Shares in SODIC closed down 1.3 percent before the results were released, while the main index fell 1.6 percent.

Sierra Leone
exported $51.4 million worth of diamonds in the first six months of
2010, up 43 percent on the first half of last year, according to a
government document seen by Reuters on Wednesday.

A global rebound in
diamond prices, augmented by government measures to encourage
production, accounts for the increase in value, said deputy minister of
mineral resources, Ignosis Koroma.

The West African
country shipped stones valued at $35.9 million in the first six months
of 2009, ending the year at exports worth $78 million.

Diamonds are a key
export for Sierra Leone, which is trying to rebuild its infrastructure
and economy after emerging in 2002 from a decade of civil war.

In July, Chinese
firm, Shandong Iron & Steel, bought 25 percent of African Minerals’
Tonkolili iron ore project in the country, a deal Sierra Leone’s mines
minister said had the potential to transform its economy by creating
thousands of jobs and boosting export revenues for the government.