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‘Egina, Pushing Nigerian Content Frontier’

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Being a text of a keynote address by the Deputy Managing Director, Deep Water, Total Upstream Companies in Nigeria, Mr. Ahmadu-Kida Musa, at the Nigeria Oil & Gas Conference & Exhibition (NOG) 2018, held at ICC, Abuja, July 2, 2018.
The theme of this
seminar,  “Nigerian Content: The Next Frontier” is relevant for understanding the need to drive the Nigerian oil and gas industry towards sustainable development and growth. It is also an opportunity to discuss important issues the industry may be grappling with as it tries to assume a more local approach in its activities.
I am, therefore, rather delighted to speak about the modest Nigerian Content efforts at Total and what is seen as the next frontier for the industry in terms of in-country activities. You must, however, forgive me, if you find that, in the course of my speech, I keep returning to my current favourite subject, namely, the Egina Project.
Egina Project was sanctioned in 2013, three years after the Nigerian Oil and Gas Industry Content Development Act was signed into law, but It is important to look back at where the sector was to enable us appreciate achievements recorded.
And today’s achievements will be the second part. I will look at the Industry’s post-NOGICD response and what progress was made in advancing Nigerian Content.
The last part will focus on the next frontier for the industry in this area and, with that, we shall wrap up this conversation on a subject I find very interesting.
PRE-NOGICD ACT 2010
Until a few decades ago, the key players in almost all the key sectors of Nigeria’s oil and gas industry were the international oil companies. From exploration to production, refining and trading, the main actors were foreign multinationals.
Oil blocks and assets were owned by foreign oil majors and oil service contracts for engineering, drilling, wireline logging services, supply of safety equipment, construction & fabrication, etc. were largely awarded to foreign owned companies. All these companies were, of course, managed by foreign personnel especially for technical positions. Many project teams were based abroad and only a few Nigerians were lucky enough to be trained abroad or to work abroad, to acquire the relevant technical knowledge and experience necessary to take up key positions in Nigeria.
But by the 1990s, Nigeria joined other emerging economies who sought to take ownership and control of their natural resources for exploitation and transformation into economic development.
To achieve this, some of these emerging economies began to formulate policies and legislation that would compel economic actors to adopt policies that promoted local over foreign.
In 2005, Nigeria took what many analysts consider the most significant step towards Nigerian Content by introducing what was known as the Local Content Policy. As you well know, the main thrust of this Local Content Policy was to promote a framework for which local competencies in the oil and gas sector will be developed through the active involvement of Nigerians using local resources.
The intention of the government, at the time, was to use the local content Policy as a means of discouraging capital flight in the oil and gas industry.
At that time, the Nigerian Government’s Local Content Policy implementation was administered by guidelines issued by the regulatory agencies such as the Department of Petroleum Resources (DPR) and the Nigerian Content Division of the Nigerian National Petroleum Corporation (NNPC).
With this, the industry started to take some steps to embrace Nigerian Content. Some partnered with local contractors on low-risk projects because of concerns about quality and the availability of local capacity. Others embarked on some capacity building efforts, setting up training schools or supporting the upgrade of local yards to manage certain workscopes. Indeed, it has been said that before the Nigerian Oil and Gas Industry Content Development Act came into effect, many industry players approached Nigerian Content as a matter of Corporate Social Responsibility.
Nigerian content was carried out at the discretion of the individual company and often dependent on availability of funding and previous experience with local contractors and partners. Nigerian Content was not really seen as an obligation by many operators. It was often something that was done as an expression of goodwill.
However, there were of course some companies that realised that developing local competencies was a key to sustainability in the future.
It was during this pre-NOGICD period that Total decided to invest in the establishment of a world class petroleum training institution right here in Nigeria; showing its commitment to capacity building and the development of Nigerian Content.
The Institute of Petroleum Studies (IPS), Port Harcourt, was established in a unique tripartite collaboration with the University of Port Harcourt, Nigeria, the French Petroleum Institute, IFP, France and the NNPC/Total E&P Joint Venture.
The institute has consistently produced highly skilled manpower equipped with both the intellectual and technical competencies required in the oil and gas industry. Since its establishment in 2003, IPS has produced over 400 Master of Science graduates and about the same number of Engineering Diploma degree holders; many of whom have filled key positions in various oil and gas companies in Nigeria!
On Total’s projects, Nigerian Content was already a major component before the NOGICD ACT. The Akpo Project, which was sanctioned in 2005 recorded a cumulative Nigerian Content performance of 44%. In 2008, the FID was taken on the Usan Project and by the time the project was completed, the Nigerian Content record had climbed up to 60%.
The point here is that even before Nigerian Content became a matter of law, some in the industry were already on board
POST-NOGICD ACT 2010
On April 22, 2010, the way the business of oil and gas was done in Nigeria changed. That was the day the Nigerian Oil & Gas Industry Content Development Act was signed into law. And the industry, which had already started to embrace the objectives and ideals of Nigerian Content, needed to double its efforts.
The NOGICD Act ushered in an era where in-country value became the focus. With the government now leading the charge with legislation and efficient monitoring through the NCBMB, things began to change more rapidly.
The underlying philosophy and objectives of Nigerian Content today include a focus on:
In-country competency development,  technology development ,   job creation, revenue retention, research and developmentas well as  industrialisation.
The relationship between the Nigerian Content Monitoring & Development Board (NCDMB) and the Industry is that of partners who understand that their goal is the same: local capacity means more robust bottom lines for the Industry and more value for the country as a whole.
In this context, more Nigerian owned engineering firms as well as construction and fabrication yards became more visible as important players in the industry. Many of them became strengthened to participate in FEED and eventually improved capacity fabrication yards began to compete for major development projects.
I must add though that a lot of oil and gas Companies were sceptical of the final destination of this new found impetus by Nigeria on local content.

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Hedge Funds Turn Bearish On Oil, Bullish On Natural Gas

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Traders have not been this bearish on oil in months or so bullish on United States natural gas in years.
The latest data on money managers’ positioning in the WTI and Brent crude and U.S. natural gas futures showed two contrasting trends—speculators are betting that oil prices would remain low or go even lower while increasing the bets that natural gas prices would continue marching higher.
So far this year, geopolitical and supply and demand factors have been increasingly bearish for the oil price outlook and increasingly bullish for natural gas prices.
In the oil market, hedge funds and other portfolio managers have been slashing their bullish bets since the end of January, when the U.S. sanctions on Russia’s oil trade were the primary bullish driver of managed money to bet on a tightening market.
With U.S. President, Donald Trump, now in office, the sentiment has quickly soured amid the president’s insistence on lower oil prices, his efforts to broker an end to the war in Ukraine, and – most of all – the enormous uncertainty about on-and-off tariffs and tariff threats and their potential impact on the American economy.
As a result, market participants are preparing for lower oil prices, even amid expectations of declining oil supply from Iran and Venezuela due to President Trump’s hawkish policy toward these OPEC producers.
Speaking of OPEC, the wider OPEC+ group has just said it would begin increasing supply as of April, adding further downward pressure on prices.
Faced with all these bearish drivers, money managers have been reducing their bullish bets on crude oil futures, with the U.S. WTI Crude hitting the lowest net long position – the difference between bullish and bearish bets – in 15 years at the end of February.
In the week to March 4, the latest reporting week with data released on March 7, speculators bought WTI amid a major selloff in all other commodities except for U.S. natural gas.
The net long in WTI rebounded from the 15-year low, but it wasn’t because the market suddenly started betting on higher prices going forward. The rise in WTI buying and the net long was the result of short covering in the U.S. crude futures contract.
In Brent, hedge funds cut their bullish-only bets in the week to March 4 for the biggest decline in longs since July 2024.
Unlike in crude oil, money managers have become increasingly bullish on U.S. natural gas after inventories dipped this winter to below the five-year average as demand surged in the coldest winter for six years.
The net long in natural gas further swelled in the week to March 4, as the number of new bullish bets was four times higher than the new short positions.
“Natural gas continues to benefit from rising demand, both domestically in the US and towards exports via LNG,” Ole Hansen, Head of Commodity Strategy at Saxo Bank, said, commenting on the latest Commitment of Traders report.
At the start of the winter heating season in November, U.S. natural gas inventories were higher than average for the time of the year as America entered the season with stocks at their highest level since 2016.
These stocks, however, were quickly depleted during the coldest winter for six years, with demand for space heating and power generation soaring. A month before the end of the winter heating season, U.S. natural gas inventories have now slumped to below the five-year average and well below the levels from the same time in 2024, at the end of a mild winter.
The lower inventories and the higher demand – both for domestic consumption and LNG exports – have pushed prices higher, encouraging producers to boost gas output this year. Traders bet that prices will go even higher as demand from LNG plants is set to accelerate with the ramp-up of new U.S. export plants.
Paraskova writes for Oilprice.com.

By: Tsvetana Paraskova

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Renaissance Finalises Acquisition Of  SPDC

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Renaissance Africa Energy Holdings says it has successfully completed the acquisition of 100 percent equity holding in the Shell Petroleum Development Company of Nigeria (SPDC).
Spokesperson of the company, Tony Okonedo, who disclosed this in a Press Release, Last Thursday, said Renaissance has completed all processes for the full transfer of ownership of SPDC to the consortium, adding that it will now operate as Renaissance Africa Energy Company Limited.
“Renaissance Africa Energy Holdings today announced that it has successfully completed the landmark transaction between itself and Shell for the acquisition of the entire (100%) equity holding in the Shell Petroleum Development Company of Nigeria (SPDC).
“This follows the signing of a sale and purchase agreement with Shell in January 2024 and obtaining all regulatory approvals required for the transaction. Going forward, SPDC will be renamed as ‘Renaissance Africa Energy Company Limited.
“Going forward, SPDC will be renamed as ‘Renaissance Africa Energy Company Limited’.
“Renaissance Africa Energy Holdings is a consortium consisting of four successful Nigerian independent oil and gas companies: ND Western Limited, Aradel Holdings Plc. FIRST Exploration and Petroleum Development Company Limited and the Waltersmith Group, each with considerable operations experience in the Niger Delta, and Petrolin, an international energy company with global trading experience and a pan African outlook”, the statement reads.
Speaking on the acquisition, the Managing Director/CEO, Renaissance Africa Energy Holding,Tony Attah, said Renaissance Africa Energy Company Limited has a vision to be the leading oil and gas producer in Africa and to help the continent achieve energy security.
Attah expressed gratitude to the Federal Government for its support and pledged the company’s commitment to the Petroleum Industry Act.
“We are extremely proud to have completed this strategic acquisition. The Renaissance vision is to be ‘Africa’s leading oil and gas company, enabling energy security and industrialization in a sustainable manner’.
“We and our shareholder companies are therefore pleased that the Federal Government has given the green light for this milestone acquisition in line with the provisions of the Petroleum Industry Act”, he said.
The CEO acknowledged the contributions of Nigeria’s Minister of Petroleum Resources, the Nigeria Upstream Petroleum Regulatory Commission (NUPRC), and the Nigerian National Petroleum Company Limited (NNPCL) in facilitating the deal.
He said, “we extend our appreciation to the Honourable Minister of Petroleum Resources, the CEO of the Nigeria Upstream Petroleum Regulatory Commission (NUPRC), and the CEO of Nigeria National Petroleum Company Limited (NNPCL) for their foresight and belief, paving the way for the rapid development of Nigeria’s vast oil and gas resources as strategic accelerator for the country’s industrial development”.
The Statement further revealed that Renaissance partner companies collectively have an asset base of more than $3 billion and currently safely produce approximately 100,000 barrels of oil per day (bpd) from 12 oil mining leases and operate two functioning modular refineries in Nigeria’s Niger Delta.

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Oil-Rich Communities Must End Infighting To Access Dev Funds – FG

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The Federal Government has cautioned oil-rich communities against infighting and disruption of oil production, saying it could hinder their access to the Host Community Development Fund.
Minister of State for Petroleum (Oil), Heineken Lokpobiri, made the appeal while speaking at the KEFFESO Stakeholders Forum, in Yenagoa, Bayelsa State.
Lokpobiri noted that the Petroleum Industry Act (PIA) was enacted to bring stability to the oil sector and address longstanding grievances about underdevelopment in host communities.
He lamented, however, that internal disputes among stakeholders have made it difficult for these communities to access and utilize the funds meant for their development.
Lokpobiri insisted that host communities must overcome internal conflicts that hinder their access to the funds.
“This KEFFESO Stakeholders Forum is to see how host communities can maximize the benefits from the Host Communities Trust Funds as prescribed by the PIA.
“If oil production is disrupted, everyone loses — the Federal Government, oil companies, and the host communities themselves. That is why host communities must collaborate with the government and oil companies to ensure smooth operations” Lokpobiri stated.
The Minister called on Host Community Development Trusts (HCDTs) in the Niger Delta to effectively utilize the 3%  operational funds allocated to them under the PIA 2021 to drive sustainable development.
He further called that oil-producing communities should take ownership of the oil and gas facilities within their domains and work with relevant stakeholders to ensure sustainable benefits.
“As stakeholders who have their respective stakes in oil and gas operations in the country, we should work together to ensure that we maximize the benefits of oil and gas.”
The minister also emphasized the global push for cleaner energy, warning that the relevance of fossil fuels depends on their extraction and marketability.
“Don’t forget there is a global campaign against the continuation of production of fossil fuel.
“Fossil fuel will never go away. Fossil fuel will not have any value unless you bring it out of the ground or from the sea to the market, that is why we need this collaboration,” he said.
In his remarks, the Executive Secretary,  Nigerian Content Development and Monitoring Board (NCDMB), Engr. Omotsola Ogbe, reaffirmed the board’s commitment to leveraging the provisions of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act.
Represented by the Board’s Director of Legal Services, Naboth Onyesoh, Ogbe noted that the NCDMB’s Community Content Guidelines were designed to ensure sustained community engagement as local content is prioritized throughout the oil and gas value chain.
Ogbe praised the KEFFESO Host Community Development Trust for its efforts in ensuring that oil revenues benefit local communities.
Also speaking, the Managing Director and Chief Executive Officer, First E & P, Ademola Adeyemi-Bero, described the KEFFESO Stakeholders Forum as a crucial platform for discussing and strategizing solutions to the challenges facing marginalized communities in the Niger Delta.
He reiterated the company’s commitment to fostering meaningful and sustainable development in the region.
The forum, themed “Envisioning Sustainable Community Development in Niger Delta Host Communities: Identifying Challenges and Actualising The PIA Paradigm Shift,” brought together key stakeholders to discuss strategies for maximising the benefits of the Petroleum Industry Act(PIA).

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