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IOCS And GMOU Implementation

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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.

 

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Oil & Energy

TotalEnergies, Conoil Sign Deal To Boost Oil Production

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TotalEnergies has signed agreements with Conoil Producing Limited under which to acquire from Conoil a 50 per cent interest in Oil Processing Licence (OPL) 257, a deep-water offshore oil block in Nigeria.
The deal entails Conoil also acquiring a 40 per cent participating interest held by TotalEnergies in Oil Minining Lease (OML) 136, both located offshore Nigeria.
Upon completion of this transaction, TotalEnergies’ interest in OPL257 would be increased from 40 per cent to 90 per cent, while Conoil will retain a 10% interest in this block.
Covering an area of around 370 square kilometres, OPL 257 is located 150 kilometers offshore from the coast of Nigeria. “This block is adjacent to PPL 261, where TotalEnergies (24%) and its partners discovered in 2005 the Egina South field, which extends into OPL257.
Senior Vice-President Africa, Exploration & Production at TotalEnergies, Mike Sangster, said “An appraisal well of Egina South is planned to be drilled in 2026 on OPL257 side, and the field is expected to be developed as a tie-back to the Egina FPSO, located approximately 30 km away.
“This transaction, built on our longstanding partnership with Conoil, will enable TotalEnergies to proceed with the appraisal of the Egina South discovery, an attractive tie-back opportunity for Egina FPSO.
“This fits perfectly with our strategy to leverage existing production facilities to profitably develop additional resources and to focus on our operated gas and offshore oil assets in Nigeria”.
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Oil & Energy

“COP30: FG, Brazil Partner On Carbon Emissions Reduction

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The Federal Government and Brazil have deepened collaboration on climate action, focusing on sustainable agriculture, renewable energy, and the reduction of black carbon emissions.
The partnership is anchored in South-South cooperation through the Brazil-Nigeria Strategic Dialogue Mechanism, which facilitates the exchange of ideas, technology, and policy alignment within the global climate framework, particularly the Paris Agreement.
The Executive Secretary, Amazon Interstates Consortium, Marcello Brito, made the disclosure during an interview with newsmen, in Abuja, on the sidelines of the 2025 COP30 United Nations Climate Change Conference, held in Belem, Brazil.
Brito emphasized that both nations are committed to global efforts aimed at curbing black carbon emissions, a critical component of climate mitigation strategies.
“Nigeria and Brazil are collaborating on climate change remedies primarily through the Green Imperative Project (GIP) for sustainable agriculture, and by working together on renewable energy transition and climate finance mobilisation,” Brito said.
“These efforts are part of a broader strategic partnership aimed at fostering sustainable development and inclusive growth between the two Global South nations,” Brito added.
TheTide gathered that President Bola Ahmed Tinubu announced an ambitious plan to mobilize up to $3 billion annually in climate finance, through its National Carbon Market Framework and Climate Change Fund, positioning itself as a leader in nature-positive investment across the Global South.
Represented by the Vice President, Senator Kashim Shettima, Tinubu made the announcement during a high-level thematic session of the conference titled ‘Climate and Nature: Forests and Oceans’
Tinubu stressed that Nigeria’s climate strategy is rooted in restoring balance between nature, development, and economic resilience.
Hosted in the heart of the Amazon, on November 10—21, the 30th COP30 conference brought together the international community to discuss key climate issues, focusing on implementing the Paris Agreement, reviewing nationally determined contributions (NDCs), and advancing goals for energy transition, climate finance, forest conservation, and adaptation.
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Oil & Energy

DisCo Debts, Major Barrier To New Grid Projects In Nigeria ……. Stakeholders 

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Energy industry leaders and lenders have raised concerns that the high-risk legacy debts of Distribution Companies (DisCos) and unclear regulatory frameworks are significant barriers to the financing and development of new grid-connected power projects in Nigeria.
The consensus among financiers and power sector executives is that addressing legacy DisCo debt, improving contractual transparency, and streamlining regulatory frameworks are critical to unlocking private investment in Nigeria’s power infrastructure.
Speaking in the context of new grid-connected power plants, during panel sessions at the just concluded Lagos Chamber of Commerce and Industry (LCCI) Power Conference, Senior Vice President at Stanbic IBTC Infrastructure Fund, Jumoke Ayo-Famisa, explained the cautious approach lenders take when evaluating embedded or grid-scale power projects.
Ayo-Famisa who emphasized the critical importance of clarity around off-takers and contract structures said “If someone approaches us today with an embedded power project, the first question is always: Who is the off-taker? Who are you signing the contract with?” . “In Lagos State, for example, there is Eko Electricity and Excel Distribution Company Limited. Knowing this is important,” she said.
She highlighted the nuances in contract types, whether the developer is responsible just for generation or for the full chain, including distribution and collection.
“Collection is very important because you would be wondering, ‘is the cash going to be commingled with whatever is happening at the major DISCO level, is it ring-fenced, what is the cash flow waterfall,” she stated.
Ayo-Famisa pointed out that the major stumbling block remains the “high leverage in the books of the legacy DisCos.” Incoming project financiers want to be confident that their cash flows won’t be exposed to the financial risks of these indebted entities. This makes clarity on contractual relationships and cash flow mechanisms a top priority.
Noting that tariff clarity also remains a challenge, Ayo-Famisa said “Some states have come out to clearly say that there is no subsidy; some are saying they are exploring solutions for the lower income segments. So, the clarity would be on who is responsible for the tariff, is this sponsored?, Can they change tariffs?, In terms of if their cost rises, they can pass it on, or they have to wait for the regulator.
“Unlike, what you find in the willing seller-willing buyer, where they negotiate and agree on their prices. Now they are going into grid, there is Band A, Band B, if my power goes into, say, Ikeja Electric, or I have a contract with them, “am I commingled with whatever is happening across their multiple bands?”
Also speaking, Group Managing Director and CEO of West Power & Gas Limited, Wola Joseph Condotti, stressed the dual-edged nature of decentralization in the power sector.
“Of course, decentralization brings us closer to the people as the jurisdiction is now clear. You also know that your tariff would be reflective of the type of people living in that environment. You cannot take the Lagos tariff to Zamfara, and this is what has been happening before now in the power sector. So, decentralization brings about a more customized solution to issues you find on the ground.
“Some of the issues I see are those that bother on capacity. It was a centrally run system that had 11 DISCOs. Of the 11 DISCOs, I think there are 3 or 4 of us today that are surviving or alive, if I may put it that way. If you go to electricity generation companies, they are doing much better,” she said.
Condotti highlighted regulatory overlaps as another complication, especially when power generation or distribution crosses state lines.
She said, “Investors would definitely have a problem. Say if you have a plant in Ogun State supplying power to another state, say Lagos State; you are automatically regulated by NERC. But the truth is that the state regulator of Ogun State and Lagos State wants you to comply with certain regulatory standards.”
With the growing demand for reliable electricity and an urgent need for infrastructure expansion, the ability to navigate these complex financial and regulatory landscapes would determine the pace at which new grid-connected power projects can be developed.
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