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Oil investment: Shell squeezing Nigeria, wants us to set aside our laws – NCDMB boss
Shell has, reportedly, withdrawn from the Memorandum of Understanding (MoU) Nigerian Content Development and Monitoring Board (NCDMB) and the Nigerian National Petroleum Company Limited (NNPC) signed with the international oil companies (IOCs), introducing a hiccup in Nigeria to reduce upstream projects’ contracting cycle and enable quick development of major oil and gas assets have hit a brick wall.
THISDAY reports that Shell might have pulled out of the deal to force the Nigerian government to suspend the country’s laws and grant it more waivers, after some waivers were granted it as an incentive to quicken development of some of its offshore projects that had been lying fallow for decades.
Simbi Wabote, Executive Secretary of NCDMB, who hinted at Shell’s withdrawal from the September 2023 tripartite pact, during his intervention at the just-ended 41st Annual International Conference and Exhibition of the Nigerian Association of Petroleum Explorationists (NAPE), held in Lagos, said the IOCs, especially Shell, were no longer interested in investing in Nigeria.
The assertion came as NNPC lamented the return of portfolio managers into the Nigerian oil and gas industry due to the advent of the Nigerian Local Content Act.
As part of the steps to address the waning investment in the upstream oil sector, continued production decline, and infrastructure deficit, NNPC and NCDMB had in September signed the landmark MoU with the IOCs to reduce the contracting cycle by 81.6 per cent.
The move was expected to cut down the current contracting cycle to an optimal level of not more than 180 working days from the current 327 days.
NNPC, in a statement at the time, said the deal was expected to improve the ease of doing business, reduce cost and drive efficiency, which would eventually translate to production growth, increased revenues, and, ultimately, improved profitability.
The statement said: “The MoU is also expected to contribute significantly to the double-digit economic growth rate agenda of the federal government and generate tremendous value for all the stakeholders, which include investors, companies, host communities and the nation at large.
“Key benefits of the framework in the MoU include a reduction of the contracting cycle for open competitive tender, selective tender, and single sourcing tender to 180, 178, and 128 working days, respectively, compared with the current best effort performance of 327, 333, and 185 working days, respectively.”
But contributing during a panel session at the NAPE conference, Wabote stated that the reliance on the IOCs would not help Nigeria make progress in the development of its assets, stressing that Shell no longer wants to invest in the country.
Referring to Shell’s attitude in the September MoU between the IOCs, and NNPC and NCDMB, Wabote argued that the company had continued to demand more waivers after some had been granted it, adding the company wanted Nigeria to set aside every of its laws and allow it to develop the prolonged prolific Bonga Southwest project and some of its shallow offshore projects on its terms.
Wabote stated: “I don’t think Shell wants to invest in this country again. I’m sorry to say it, because I give you an example. Bonga Southwest started before I was even recruited in Shell and that is 26 years before I left Shell.
“Today, Shell wants Nigeria to set aside every law and do Bonga Southwest on their terms. Same thing with some of the shallow offshore projects. They want you to set all your laws aside and they want to create an emergency situation to tell you it is now very critical.
“But we started HI development almost 20 years ago, now it is very critical for Shell. HA development is now becoming critical for Shell. That’s how they leave their projects, such that it becomes critical, they write all the justifications, set aside your PIA, set aside your Local Content Act for them to do those projects. I personally don’t think they want to invest in those projects, they will prove me wrong, but time will tell.
“We in local content sat down with all the IOCs (myself and Mele Kyari) and we said, what are the issues to enable us increase production. They listed those issues. We agreed on waivers that we would give. Later, I wrote a letter and submitted back to Shell to say, three months ago, we agreed to all the waivers you requested, where is the progress? The next response was that they were looking for further waivers.”
The NCDMB boss encouraged the local exploration and production companies that are now taking over assets divested by the IOCs to apply strict corporate governance so that they could create a joint venture that would help the country to develop its assets. He said Nigeria needed to be deliberate and realise that some of the multinationals were not prepared to help the country move forward, adding, “Let’s take our destiny in our hands and progress accordingly.”
In her intervention at the panel, Executive Vice President (Upstream), NNPC, Oritsemeyiwa Eyesan, who listed the challenges confronting the country’s oil and gas industry, revealed that despite its gains, the Nigerian Content Act had encouraged the return of portfolio managers in the industry.
Eyesan said, “I must at this point just also introduce the challenges we have with local content. When the Local Content Act was passed, we were all excited and looking forward to the growth of local capacity.
“Indeed, there had been some gains in the past in this regard. But you will also agree with me that it has brought with it a lot of challenges, to the extent that we have more or less encouraged portfolio managers rather than build competences and capabilities that the local content law was supposed to achieve.”
Eyesan explained that the return of portfolio managers made projects’ financing more difficult, “because when you have middlemen, sometimes, you have several layers in these middlemen that it becomes almost impossible to complete projects profitably”.
She said another challenge facing the oil and gas industry in Nigeria, which was causing the exit of the IOCs and discouraging new entrants into the sector, was the difficult and lengthy contracting process. She described it as an operational challenge, which NNPC Limited was not insulated from.
Eyesan lamented as dismal a situation where a contracting process would linger for 24 months, instead of two to three months obtainable in other climes.
Citing political and regulatory risks as one other challenge in the industry, Eyesan said the Petroleum Industry Act (PIA) was supposed to be an enabler for investment, explaining that if well implemented, it would enable and attract investment into the industry.
She said financial risk was another major encumbrance in the sector, explaining that currency and exchange rates instability make it difficult to structure financing deals that would deliver on the expected return. She added that investors were leaving the shores of Nigeria partly because of the financial risk.
The NNPC EVP further said, “First of all, we all agreed that virtually all the IOCs are leaving onshore, not to say they are leaving Nigeria completely, and we’ve articulated some of the reasons why they are leaving. Security is a major one, because if I’m not assured that I would get my money at the end of the day, then there is no reason why I would continue.
“The other risk that confronts participants in the sector is operational risk. We talk about insecurity in the Niger Delta and in the entire country as a whole. Again, I want to invest, I’m not assured my investment will be realised. That definitely will not make it possible for me to come.
“Technology deployment as well: when we are not able to deploy cutting-edge technology because we cannot afford it, it becomes even more difficult for us.
“There are other in-country reasons: stability in our regulations, stability in the fiscal environment. Until you solve those problems, it will be difficult for you to start saying you want to attract foreign investment.”
Sheriff Oborevwori, Governor of Delta State, Ifeanyi Okowa, his predecessor and all members of the Peoples Democratic Party in the state, on Wednesday emptied into the All Progressives Congress (APC), ending months of speculations about the political development in the oil-rich state.
James Manager, Senator formerly representing Delta South at the National Assembly, who announced the move in Asaba, the state capital, shortly after a meeting that lasted over six hours at Government House, Asaba, said the state could not afford to allow itself drift away.
“All PDP members in the state, including the governor, former Governor Okowa, the Speaker, the state party chairman, all the local government chairmen and others, have agreed to move to the APC. We cannot continue to be in a sinking boat,” he said.
Aniagwu Charles, Delta State Commissioner for Information, who confirmed the development, said the defection, was a collective decision of Delta PDP leaders and stakeholders, adding: “There is a need for us to adjust our drinking patterns. And in adjusting that drinking pattern, we needed to make a decision that would further help to cement the development in our state, to build the court of law that has existed in our state, to further advance the cause of security and the welfare of our people, and, to a large extent, ensure that development in Delta is not truncated.
“In taking that decision, we concluded that leaving the PDP was very necessary for us to be able to collaborate and build a state that every Deltan will be proud of. We believe that what is happening, and the state of the PDP, is akin to that palm wine whose taste has changed — and there was a need for us to change the drinking party. By the grace of God, on Monday next week, we will be able to make a very big statement confirming that we are moving into the APC.”
Agbede community in Etsako West local government area of Edo State, rose in protests on Wednesday, complaining of continued kidnapping and killing by Fulani herdsmen, who they say have taken over their bushes and those of the surrounding neighbours.
Accusing the alleged marauders of killing and maiming those who could not pay ransom, as well as raping women and dislodging farmers from their farmlands, the community, who took to the streets in demonstrations, lamented that help had refused to come from anywhere including security agencies.
Agbede, and surrounding villages, including Odighie, Egono and Awain, they said, had been under siege in the past two months while efforts to get the assistance of the police in the area had ended in futilities, accusing them of complicity, with senior police officers from the northern part of the country covering up the criminals.
“Farm destruction, killings, rapes, and kidnappings for ransom have become disturbingly common and the police, instead of protecting the communities, they seem to be aiding and abetting the Fulani herders against the aborigines.
“The DPO at the Agbede Police Station, the Police Area Command in Auchi, and the Zone Five Office in Benin are not helping matters as we are suspecting them to be backing the herders with lining orders which is now creating fear amongst the people over their genuine protection and safety.”
Vanguard quoted a member of the community who did not want his name on the print as accusing the police of using blackmail, harassment, and detention to intimidate vigilantes and hunters who dare to challenge the Fulani invaders, while forcing the locals to sign undertakings not to confront the herders.
Still maintaining the allegation, he also claimed that those arrested in connection with the atrocities were usually promptly released within a few hours of arrest, adding: “Mamudu Momoh was attacked on his farm after he met some herdsmen taking over the farms, uprooting his cassava to feed their cows and in the process, he was attacked and injured.
“He went to the Agbede Police Division to report the case. The case was later turned against him, he was arrested and taken to Zone 5, where he was detained, and the community spent a lot of money to secure his release.
“There is another farmer in the community, Idris, who has been kidnapped by the herdsmen for over a month now and ransom has been paid, the man is yet to be released up till today. We are asking the inspector general of police to withdraw the DPO of the Agbede Police division who is a Northerner without which the Agbede community will never know peace in the hands of the herdsmen who are everywhere in our bush claiming to be hunters.
However Moses Yamu, Chief Superintendent of Police, and spokesman of the Edo State Police Command, was quoted as debunking the allegations, saying that the officers and men of Agbede Police division have been working round the clock to deal with the herdsmen situation in the area.
Narrating how the police from the division, with a backup from Auchi Area command, had already arrested over 10 suspected kidnappers in that axis who were currently being investigated, he said the community were not fair to the police in their protest, especially to the zone 5 Command.
He was quoted as saying particularly that the protest coming less than two weeks after the Inspector General (AIG) in charge of the zone had just assumed duties, was not a good welcome package by the community for him, especially with the allegation of abetting the said crimes.
What Benue State needs now is to secure its boarders with its neighbours and to assist it in flush out Fulani herdsmen and bandits from the land they have taken over after chasing away the original owners, who are now in various Internally Displaced Persons (IDP’s) camps.
Hyacinth Alia, Governor of the state, declared this stance on Wednesday, while appearing as a guest on The Morning Show, the breakfast programme on ARISE NEWS Network.
The governor, who spoke on a range of issues regarding the attacks with close to 100 persons slaughtered by invading armed groups, he identified as Fulanis from foreign lands, Alia, a Reverend Father of the Catholic Church faith, rejected the idea of imposing state of emergency in the state, saying what the people of needed at the moment was help from the Federal Government.
Stating how he was able to contain the activities of the killers in the state from 17 to just six local government areas, he said his administration had the capability to end the killings, if only it could get the needed support to further deal with the situation.
He said: “What we need is emergency help for now. We need absolute support. The federal government is supported. They sent two armoured tanks that came in. Our situation had changed. We had a better narrative, but what we need to do is to get our people back home, to drive out the invaders, the armed invaders who have brought in people who do not even speak the Nigerian languages we speak. Let them move back to wherever they came from and allow us farmers to go back to our ancestral land. Calling for any emergency does not occur here.”
Dismissing the contention that the situation had overwhelmed him, he said his ability to scale down the spread of the attacks, was indicative that he had the capacity to tackle the incessant killings and destruction of properties in the state by killer herders, some of whom he believes are not Nigerians.
“We couldn’t have trimmed it from 17 local governments in the front lines of the attacks to nine and then now to six, which means we have the capability to do this, but we need help. And that is a fact,” he added.
BREAKING: Entire PDP structure in Delta empties into APC
Edo community in protest: Fulanis still killing, raping, destroying our farms
Benue: Alia wants Fulani chased out from seized land, rejects emergency rule
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