Oil & Energy

IOCS And GMOU Implementation

Published

12 years ago

December 10, 2012

A critical component of the operations and activities of international oil companies (IOCS) in Nigeria, is in the area of community relations. There is a symbiotic relationship between (IOCS) and their host communities, and this relationship determines the success or otherwise of the prospecting oil companies in their areas of operation.

However, activities of most of the IOCS in the Niger Delta had been fraught with conflicts, resulting from the absence of an agreeable community engagement concept that will satisfy the yearnings of the host communities, as well as the corporate objectivities of the prospective companies.

Consequently, the evolving crisis had brought untold consequences on the corporate partners, with a negative prospect of devaluation of the core values of sustainable development and corporate social responsibility policies in line with international best practices.

In most communities, such sharp disagreement and lack of consensus had resulted in the wanton destruction of lives and the facilities of the oil companies. The ugly trend stifles the growth and expansion of activities of the affected oil companies and also create disharmony among the host communities.

Analysts had however attributed the perennial conflicts between oil companies and their host communities in the Niger Delta to what is commonly referred to as “conceited development policies”.

Such policies according to analysts, places the host communities in an equal partnership with the oil companies, as they are always at the receiving end and not direct participants in the process of planning, and execution of development projects of which they are direct beneficiaries.

This approach to community development, believed to be lacking in consultation had over the years triggered suspicion and mutual distrust among oil companies and their host communities, thereby negatively affecting the prospect of a thriving partnership and corporate growth among IOCS and their host communities.

However, considering their staggering investment, and also realising the consequences of mutual corporate distrust, arising from the lack of a more acceptable community development model, IOCS are beginning to evolve a new concept aimed at attaining its corporate goals.

One of such measures aimed at responding to the imperatives of corporate social responsibilities, in the area of community relation is through the Global Memorandum of Understanding (GMOU) which companies now sign with communities neighbouring their clusters of operation, on agreeable terms.

The new model which is based on direct participation by the host communities is structurally targeted at addressing past development lapses and consolidate a thriving partnership between companies and their host communities.

Most oil companies have keyed into the GMOU, process through the Nigerian National Petroleum Corporation, NNPC Joint Venture. In the course of gathering confidence in the strategic implementation of the GMOU process, companies are also expanding the frontiers through partnership with Development Agencies such as the Niger Delta Development Agency NDDC, and the various levels of government.

At the drive of the GMOU process, in Rivers, gathers momentum Chevron Nigeria Limited had taken advantage of the community engagement model to promote it corporate objectives within communities neighbouring its clusters of operation in the state.

Recently at the Second Annual General meeting of the Kula Regional Development council, a body elected to manage the GMOU in Kula Community, the management of Chevron, used the opportunity to take stock and rekindle its commitment to the process.

The management of the company, which was represented by, Mr. Ngo Kio at the event, expressed appreciation over the effort of the Kula RDC in the utilisatioin of available fund for the development of the community. He said the GMOU as a successful replacement to the old system of direct contact with individual communities, will continue to receive the attention of the company to promote a harmonious relationship between them and the host community.

He also commended its development partners such as the NDDC, the Rivers State Government and the Akuku Toru LGA, for the support and expressed hope that “the interface will bring lasting peace in the Niger Delta.”

The Chevron management assured that communities will be encouraged through funding and capacity building to take decisions on their development process, while the GMOUS will be periodically reviewed based on terms of agreement.

Chairman of the Kula RDC, Hon Stanley Benibo also commended the management of Chevron for their unflinching support to the GMOU process and assured that all money giving by the company for the GMOU will be judiciously used. Hon Benibo however, cautioned against the erroneous impression by some community members that money voted for the GMOU process should be shared among the people.

According to him “It was disservice to the people for people not to pay back loans collected from the GMOU fund”, and also condemned the attitude of some beneficiaries of the evolving transport scheme who refused to pay back the money based on terms of agreement. Such attitude he pointed out will affect the maximal impact of the fund on the people.

In his remark, the Amanyanabo of Opukula, HRM, Dan Opusinji, cautioned against division among the people and said lasting peace can only return to the embattled Kula community when the people speak in one accord.

Also commenting at the commissioning of Four housing units, at Robertkiri, Boro; Afforiaina, and lucky land, all in Aku LGA, recently, Barr, Charles Opurum who represented the Rivers State Commissioner for chieftaincy Affairs. Mr. Charles Okay, suggested to Chevron, to create and alternative measure of dealing directly with Traditional Rulers, rather than the RDCS. He noted that Traditional rulers as the custodian of the traditional values deserves, such Prime attention. He said RDCS should always ensure that accountability is the watchword to avoid profligacy and mismanagement of available fund.

Similarly, other multinationals, such as total exploration, Mobil Nigeria, Pan Ocean Limited among others has also adopted direct community engagement models as approaches of stemming the pace of disagreement among them and their host communities to avert the drift in sustainable community development .

Another critical aspect of the GMOU process which analysts has canvassed support for is the area of domestication of the local content policy through the empowerment of local contractors. However, analysts are of the view, that while indigenous contractors should benefit from the policy, effective monitoring should be put in place to ensure that projects awarded to them are completed according to specification. This arises from the growing tendency of abuse of projects by indigenous contractors who see projects as means of appeasement rather them platforms for collective economic benefits to the people.

Also in line with the principles of international best practices in the oil and gas sector, the Rivers State government has through its supervisory Ministry canvassed for an effective and appropriate energy policy in the State, especially in the area of community engagement, access to finance, regulatory frame work and indigenous human capacity development through corporate partnership. These were part of the recommendations of the international oil and gas summit in the state.

Oil & Energy

Reps Launches Probe Into N200bn CBN Loan To DISCOs

Published

3 hours ago

May 12, 2025

The Tide

The House of Representatives has launched an investigation into the disbursement and utilisation of the N200billion Central Bank of Nigeria (CBN) loan allocated for the National Mass Metering Programme (NMMP) to Electricity Distribution Companies (DISCOs).
Chairman, House Committee on Public Assets, Rep. Uchenna Okonkwo, disclosed this in a statement in Abuja.
He confirmed that a 19-member sub-committee had been inaugurated to probe the matter thoroughly.
Okonkwo recalled that the NMMP, initiated in 2020, was designed to provide free electricity meters to Nigerian consumers through the Licensed Electricity Distribution Companies (DISCOs).
He said the programme was a joint initiative of the CBN, the Nigerian Electricity Regulatory Commission (NERC), and other stakeholders in the Nigerian Electricity Supply Industry (NESI), aimed at eliminating estimated billing, improve transparency in energy usage, and enhance customer satisfaction.
Speaking on the launch of the NMMP, the Rep said the programme was to be implemented in three phases to ensure the reduction of collection losses and improve market remittances in the industry.
“Under the pilot phase of the programme’s implementation, CBN commenced with the sum of N59.280 billion for procurement and installation of one million meters in 2020 at an interest rate of 9 per cent after a two year moratorium.
“Preliminary research on the NMMP has shown that instead of the pronounced amount of N59.280 billion naira for the phase 0, what was released was N55.4 billion for procurement and installation of 962,832 meters instead of one million meters pronounced by CBN”, he noted.
Okonkwo stated futher that concerns have been raised regarding repayment, with the committee noting discrepancies in the repayment of the funds by the DISCOs.
According to Okonkwo, “Research has also shown that the eleven Electricity Distribution Companies who received the loan have paid back to CBN as refund for the N54.4 billion they received in 2020 without mentioning the 9 per cent interest on the loan.”
The lawmaker, however, said the subsequent phases of the programme, which were expected to significantly expand metering across the country, have stalled, explaining that Phase 1, which was to be funded by the CBN and Deposit Money Banks (DMBs) for 1.5 million meters, and Phase 2, expected to be financed by the World Bank for four million meters, are yet to take off.
He said the House, exercising its constitutional powers under Sections 88(1) and (2) of the 1999 Constitution, resolved to investigate the matter with a view to safeguarding public interest.
According to him, the sub-committee is expected to scrutinise all aspects of the NMMP funding, from disbursement and meter procurement to distribution and repayment mechanisms.
The 19-member committee comprises Reps. Obed Shehu, Ali Shettima, Abel Fuah, Salisu Koko, Ahmed Munir, Sani Umar Bala, Gbefwi Jonathan, Abdulmaleek Danga, Chinedu Obika, and Okunlola Lanre.
Others include Reps. Abass Adekunle, Akinosi Akanni, Obuzor Victor, Peter Akpanke, Ngozi Lawrence, Ogah Amobi Godwin and Ikeagwuonu Onyinye.
It would be noted that the NMMP was expected to be a game-changer in Nigeria’s power sector by reducing estimated billing, enhancing energy accountability, and restoring consumer trust.
However, the current revelations point to implementation failures and possible mismanagement of public funds.
Analysts believe that the outcome of the House probe could lead to reforms in electricity metering policy and strengthen regulatory oversight of loan disbursements to DISCOs.

Oil & Energy

“Renaissance Energy, NNPC JV Donate ICU Equipment To RSUTH

Published

3 hours ago

May 12, 2025

The Tide

Renaissance Africa Energy Company Limited and its joint venture partners, including the Nigerian National Petroleum Company Limited (NNPC), have donated vital medical equipment and essential drugs to the Intensive Care Unit (ICU) of the Rivers State University Teaching Hospital (RSUTH).
Among the equipment are three ventilators, a laser therapy machine, as well as significant supply of seed stock drugs targeted at enhancing the hospital’s capacity to provide critical care and ensuring consistent drug availability.
Speaking at the Handover Ceremony at Renaissance Energy Headquarters, in Port Harcourt, the General Manager, Relations and Sustainable Development, Renaissance Africa Energy, Igo Weli, said, “The gesture by Renaissance and our partners is to enhance the capacity of the hospital to provide critical care to patients in need; improve the training of upcoming healthcare personnel; and provide support to dedicated healthcare professionals in their mission to save lives and improve patient outcomes.”
The Chief Upstream Investment Officer, NNPC, Oluwaseyi Omotowa, noted that the donations were part of a broader social intervention strategy of the Renaissance-operated joint venture.
Omotowa, who was represented by the Lead, Stakeholder Relations, NNPC Upstream Investment Management Services, Mrs. Uzo Ejidoh, further said “the JV has a deliberate corporate social responsibility strategy to serve the people.
“This is an unchanging commitment, hence our steadfast support and investment in social impact projects for the healthcare sector to continue to transform lives”.
Recieving the donations, the Chief Medical Director, RSUTH, Professor Chizindu Alikor, stated that the hospital was committed to the delivery of excellent healthcare along with research and training.
Alikor said, “The teaching hospital is on an upward trajectory. The ICU facilities were over stretched, and we are excited that our request to Renaissance and its partners for assistance was granted.
The CMD expressed the hospital’s confidence in Renaissance’s capacity and people-centric interventions, especially as it concerns Corporate Social Responsibility (CSR) in the health space.

By: Lady Godknows Ogbulu

Oil & Energy

Tight Now, Loose Later: Oil Futures Flash Warning

Published

3 hours ago

May 12, 2025

The Tide

Last week, OPEC+ announced it will once again accelerate the pace of unwinding of production cuts, with output targets for June increasing by 411,000 barrels per day, equivalent to three monthly increments.
This follows a similar move in April, with the organization appearing willing to stay the course amid low oil prices and fears of weakening demand.
We reported that global crude inventories remain low enough, thus giving OPEC+ a window to scale back its voluntary cuts until the market surplus finally arrives.
Saudi Arabia appears intent on “punishing” OPEC+ rascals such as Kazakhstan and Iran for repeatedly violating their quotas.
Commodity analysts at Standard Chartered have reported that the latest OPEC survey of secondary sources reveals that Kazakhstan’s crude oil output clocked in at 1.852 mb/d in March, 384 kb/d above its OPEC+ quota.
Further, the country also failed to keep its promise to cut 38 kb/d in compensation for overproduction in March, bringing its total overproduction to 422 kb/d.
The same scenario is expected to unfold in the coming months. Kazakhstan produced 240 kb/d more y/y in March, a sharp contrast from the other eight OPEC+ members who produced a combined 612 kb/d less.
And now, the oil futures markets are sending a dire warning that oil bulls could find themselves in trouble quite soon due to a combination of the OPEC+ output hike and Trump’s tariffs.
Oil futures curve has formed a rare “smile” shape, a structure Morgan Stanley says was last seen briefly in February 2020 just before the infamous oil price crash.
On Wednesday, Brent futures’ July contract was trading at a premium of 74 cents to the October contract, a market structure known as backwardation, foreshadowing immediate tight supply.
However, prompt prices from November have formed a contango, with forward prices flipping to a discount, indicating oversupply as traders predict Trump’s tariffs will eventually weaken oil demand. Having backwardation and contango together leads to the rare “smile” shaped curve.
According to the latest available data by the International Energy Agency (IEA), global oil inventories stood at 7.647 billion barrels in February, down from 7.709 billion barrels for last year’s corresponding period and close to the bottom of their historical five-year range.
Meanwhile, refiners’ appetite for crude is climbing ahead of the peak driving season in July and August, “Refinery maintenance in the Atlantic basin will start to taper off, increasing oil demand (for refining)… Summer driving should provide some support,” BNP Paribas analyst told Reuters.
Global oil demand is expected to rise by 1.3 million barrels per day in the third quarter of the current year, up from an average of 104.51 million bpd in the second quarter, the IEA has predicted.
The 1 million bpd output increases announced by OPEC+ so far, coupled with another 400 kb/d increase in July, almost matches the predicted demand increase, implying oil markets will not face a surplus till late in the year.
Meanwhile, oil prices jumped in Thursday’s session after the Trump administration announced it has struck a trade deal with the UK. Brent crude for July delivery was up 2.7% to trade at $62.75/bbl at 12.50 pm ET while WTI crude contract for June delivery added 3.0% to change hands at $59.86 per barrel. However, terms of the deal appear to fall well short of the “comprehensive” package Trump earlier touted.
According to Trump, UK Prime Minister, Keir Starmer, will further reduce non-tariff barriers and fast-track U.S. goods into his country.
Meanwhile, another solid week of jobless claims underscored the Federal Reserve’s ongoing unwillingness to cut rates. U.S. jobless claims fell 13,000 to 228,000 for the period ending on May 3.
Continued claims, however, clocked in at just over 1.9 million, near the highest levels since 2021, suggesting workers are still finding it difficult to secure new jobs as the economy stalls.
That said, commodity analysts at Standard Chartered have predicted that path of least resistance for oil prices is lower in the coming months, with oil prices to remain low before beginning a gradual recovery later in the year as U.S. oil output declines.
StanChart, however, says there’s some technical support in the short-term, with fundamentals remaining fairly positive. Recently, StanChart cut its 2025 oil price forecast to $61/bbl from $76 and also lowered its 2026 forecast to USD 78/bbl from $85 citing Trump’s tariffs.