The Shale Oil revolution is having an unprecedented impact on the global energy landscape, economy and geopolitics. Increased production capability from unconventional sources in the United States of America is setting a new global baseline for output. Some long – held narratives of the energy sector are being re-evaluated and re-written, countries are switching roles, importing nations are becoming exporters and exporters are among the major sources of growing demand. A case in point is the plummeting US oil imports due to increasing shale oil supplies and recently adopted policies to improve efficiency of cars and trucks. Long term solutions to these global challenges are scarce and long in coming.

Nigeria currently maintains an economically unstable negative net energy trade balance in which the nation exports virtually all the crude oil produced and imports a substantial part of its refined petroleum products needs while under-utilizing other energy sources such as bitumen, coal, lignite, and shale oil, thereby leading to monoculture economy that is largely dependent on crude oil export.

At the same time, there is the current reality of dwindling and/ or stagnant reserves growth. Arguably, the Niger delta is a maturing basin with declining exploration opportunities and success ratio; however, opportunities are known to abound beneath existing brown fields, which are yet to be explored.

Technology is the heart of all the significant achievements in the oil and gas industry. The way hydrocarbon is discovered, developed and produced, has been impacted by evolutionary technologies that have emerged since the Drake well of 1859.

The perception of declining profitability and competitiveness of the Nigerian operating environment which, has been exacerbated by the anxiety over the fate of the PIB, coupled with the incidents of oil and gas discoveries in other African countries, has afforded investors greater choice of investment location to the detriment of Nigeria.

It is against the backdrop of the foregoing that the Nigerian Association of Petroleum Explorationists (NAPE) will at its 33rd Annual International Conference & Exhibition be deliberating on strategies for balancing Nigeria’s energy trade, examine emerging and revolutionary technologies for hydrocarbon exploration and explore New Play concepts.

The Conference will also throw its searchlight on survival strategies for petroleum Exploration and exploitation in a challenging environment and also examine the effectiveness in the existing policies to drive growth in the oil and gas industry so as to come up with initiatives for the development of road maps and new policy initiatives.

The theme of this year’s event which holds at the Eko Hotel & Suites, Victoria Island, Lagos, Nigeria, from November 8 -12, 2015 is ‘’ Global energy Dynamics and Implications for Nigeria’s Energy and Economic Security’’

The event will have four major formats:

Conference

The conference holding from 8-12^th November, 2015 will host speakers who are high level industry practitioners, key personnel in government and the academia, delivering technical papers on six (6) sub-themes namely:

1. Government Policies and Implications for the Growth of the oil and Gas Industry
2. Strategies for Balancing Nigeria’s Energy Trade
3. Enhanced Oil Recovery and Advances in Reservoir Management: Challenges and Opportunities
4. Exploring New Play Concepts: Deep Plays and Subtle Traps
5. Exploring the Peri-cratonic Basins of west Africa- Establishing a regional Strategic Advantage
6. Technology Application for Cost Efficiency and Operational Competitiveness: Recent Advances 

Special Workshop/ Management Sessions/Presentations

A Pre- Conference workshop on: ‘Survival strategies For Petroleum Exploration and Exploitation in a Challenging Environment ‘’  will hold on Monday 9 November, 2015 from 9.00am-3.00pm with the following

Speakers:

1. Dr. Emmanuel Ibe Kachikwu, Group Managing Director, NNPC
2. Mr. Tony Chukwueke, former Director, DPR; current Managing Director of Tenoil
3. Mr. Osagie Okunbor, Chairman, Shell Group of Companies in Nigeria
4. Al Esher, Director, Europe, Middle East and Africa, Accenture Upstream Strategy Consulting
5. Mr. Uwem Ukpong, President, Software Integrated Solutions (SIS)

The Pre-Conference Workshop is expected to set the tone for the entire conference. It is worthy to note that key pieces of legislation such as the Marginal Fields Act and the Deepwater Act were all based on templates that came out of previous NAPE Pre-Conference Workshop Communiques.

The All Convention Luncheon holds on Tuesday 10^th November and will feature   Ali Moshri, President, Chevron Africa, who will be presenting a paper titled ’’The Global Energy Landscape- Opportunities from the Great Oil Deflation’’. The event will provide a platform to network with key executives in the global oil and gas industry as well as key stakeholders in the Nigerian economy.

Special Management Session I

 This event has the theme “JV Funding Challenges and the Future of the Nigeria Oil Industry- Is Equity Reduction a Lasting Solution?” and will take place on Wednesday, 11 November, 2015

Invited Speakers are; Dr. Victor Adeniran, Group Executive Director, Commercial & Investment NNPC; Mr. Clay Neff; OPTS Chairman and Chairman/Managing Director Chevron; Mr. Austin Avuru, Managing Director/CEO SEPLAT and Mr. Ade Adeola, Managing Director/Head Energy & Chemicals Africa, Standard Charted Bank.

Special Management Session II

This session takes place on Thursday, 12 November and will focus on “Increasing Nigeria Resource Base- How, Challenges and Next Steps”.

Invited Speakers include Dr. M.K. Baru, Group Executive Director E&P NNPC; Mr. Osten Olorunsola, former Director, DPR; Dr. Ebi Omatsola, FNAPE Managing Director Conoil Producing; Mr. Ademola Bero Managing Director/CEO First E&P; and Martin Kelly; Director Research, Woodmac Sub Saharan Africa.

Exhibition

The exhibition will showcase   the latest technologies, products, services and competencies from major IOCs and Indigenous operators in the upstream sector of Nigeria’s oil and gas industry. For the first time, NAPE will be having a dedicated pavilion for banks/financial institutions. 

Industry Awards

The Awards Night, which is the biggest social event of the conference takes place on Thursday 12^th November and will recognize individuals, institutions and corporate entities that have advanced the learning and practice of the geosciences in Nigeria and globally. Other social events include the African Night on Tuesday 10^th November, extending the warmth of African hospitality to all conference attendees.

Of particular note is the NAPE 40^th anniversary celebration that will be taking place during the conference. Please find time to visit NAPE exhibition booth to acquaint yourselves with the history of this great association.

The 33rd Annual International Conference and Exhibition will also provide other learning Opportunities which include the Young Professionals Programme, Short Course International Field Trip Expedition to the Karoo Basin (Deepwater fan sediments in South Africa), and a Field Trip to Southern Nigeria Sedimentary Basin as well as a Post Conference Technical Workshop/Luncheon with the theme, Subsurface Data: Nigerian Industry Standard For Exchange.

The Ghana National Petroleum Corporation, GNPC, has confirmed paying the 100 million dollar guarantee for the deployment of the Kar-Power barges from Singapore on behalf of the ECG.

The amount expected to be put in an escrow account is a requirement for the barges.

Speaking at a press conference, Chief Executive of the GNPC Alex Mould said ECOBANK is currently in discussions with its corresponding banks to confirm receipt of the amount.

He indicated that the GNPC has placed a 100 million dollars in an account with ECOBANK.

“There’s nothing else GNPC can do about it. We have given them the funds required to establish this guarantee” he added.

ECOBANK-Ghana according to him has opened a guarantee and has been finalizing the terms and the conditions with their corresponding bank – Standard Chartered Bank.

The 225 megawatts capacity barge is now expected to leave Turkey on October 25 and is expected in the country on November 10. The dates for the arrival of the barge has been shifted a number of times already, a situation blamed largely on the absence of the guarantee.

There is a second guarantee that GNPC is putting in place to guarantee the capacity.

Mr. Mould stated, “I even met with the ECG Managing Director and the bank, and my understanding is that by next week ECG and the bank would have finalized their terms and conditions and I’m hoping that would be issued.”

About five years ago, the Nigerian Oil and Gas Industry Content, NOGIC Act, came into force with the sole objectives to not only encouraging the participation of more Nigerians in the petroleum industry, but also increasing the contribution of the industry to the nation’s gross domestic product, GDP. Prior to introduction of the Local Content Policy in the oil and gas industry by the administration of former President Olusegun Obasanjo, the  absence of local capacity in the industry had resulted in repatriation of about 90 per cent of the $12billion yearly industry spending abroad, with its adverse effects on job creation and the growth of the economy.

This stemmed from the fact that the wider scope of the industry’s lucrative jobs was performed in foreign fabrication yards; while expatriate workforce dominated local strategic positions in the industry. Paucity of fund, absence of in-country capacity and inadequate manpower were identified as factors that denied the country the full benefits of her petroleum resources as only few indigenous facilities and manpower were involved in the oil and gas industry.

While indigenous facilities and manpower were yearning for oil and gas industry jobs, foreign yards were flooded with jobs that ought to benefit Nigerians and the country’s economy.

Even the attempt by the administration of Obasanjo to halt this trend by introducing the local content policy in 2003 to compel the foreign operators in the industry to domicile certain percentage of their jobs in-country recorded very minimal success because of absence of legislation to drive the policy.

Obasanjo’s administration had positioned the country to attain a local content target of 70 per cent by 2010 but only less than 10 per cent was achieved because mere persuasion adopted under the policy could not influence the International Oil Companies (IOCs) to key into the initiative.

To drive the policy, the then Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mr. Funsho Kupolokun appointed the pioneer Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB) as the pioneer Nigerian Content Coordinator in 2004.

On his appointment, Engr. Ernest Nwapa successfully confronted the enormous challenge of translating volumes of recommendations by the various stakeholders in the industry into a comprehensive, implementable policy document.

This document, which was submitted to the Obasanjo administration in February 2005, provided the framework for the creation of the Nigerian Content Development (NCD) within the NNPC in March 2005 to oversee the implementation of the local content policy.

The implementation of the Nigerian Content remained under the NNPC until the Local Content Bill put together by Obasanjo’s administration through the works of the NCD was signed into law as Nigerian Oil and Gas Industry Content Development (NOGICD) Act by President Goodluck Jonathan on April 22, 2010.

The NOGICD Act of 2010 created the Nigerian Content Development and Monitoring Board (NCDMB), thus relieving the NNPC’s NCD of the task of implementing the Nigerian Content.

Since the Act, popularly referred to as the Nigerian Content Act was signed, the industry has recorded massive inflow of Foreign Direct Investment (FDI) and unprecedented boost in the development of local capacity and capability.

The Act was a bold response to the low participation of indigenous facilities and manpower in the oil and gas industry and since it was enacted with a visionary and dynamic agency, the Nwapa-led NCDMB driving its implementation, there has been a systematic but gradual reversal of this trend.

Today, many indigenous professionals are increasingly building capacity and proving their mettle in the execution of major projects, while an increasing number of multinational players have also been compelled by the legislation to domicile certain scope of their operations in-country.

With Nigerians developing competence in jobs that were the exclusive preserve of expatriates before the legislation was put in place, the scope of oil and gas industry jobs, which were executed outside the shores of Nigeria, are now being performed by Nigerians and in Nigeria.

In the area of exploration and exploitation of hydrocarbons, Nigerian independent exploration and production (E &P) companies, which were restricted to marginal assets before the Act was enacted, now have access to larger acreages, due to the divestment of onshore assets by the IOCs to boost indigenous participation in the industry.

These efforts have led to the retention of a large chunk of the industry expenditure in- country, with the attendant positive impact on employment generation and growth of Gross Domestic Product (GDP). 

Breaking new grounds

The Petroleum Technology Association of Nigeria, PETAN, believes that Nigerian companies have actually derived unique solutions to solve trying problems, especially in the deepwater. According to Engr. Emeka Ene, Chairman, PETAN, “Right now the world’s longest fibre security project is being done by a Nigerian company. It is the longest installation of such a solution.

It is a Nigerian company that is doing it not a multinational, not a foreign company “Nigerians indeed have the capacity to think through, and what is happening is that most of the research and development costs are usually funded from activity. As for that, we will follow and that is already happening.”

The PETAN boss also believes that Nigerians are unique when compared with other oil producing countries. “Nigeria and Nigerians in the oil and gas industry are unique. They are unique in the sense that we’ve had the fastest growth in terms of hands on ability to deliver services. There are local content models across the Middle East, but the local content models are simply an agency-type model. So once you set up an agency you can do business.

“However, in our own situation we have Nigerians who have made and are prepared to make investments to grow technical service companies from ground up. That is a significant difference because what we now see is that some Nigerian companies are already able to export these capability outside Nigeria.

“There is a Nigerian company in Houston providing computer services to clients there. It is a Nigerian company that started from here and evolved over there. We have Nigerian companies who are working in Mauritania offshore FPSO’s. We also have Nigerians who are drilling in Congo.

We have Nigerians who are offering services offshore Angola. We have Nigerians who are doing business in Yemen, in Saudi Arabia, in Oman.

“These are service companies that started in Nigeria and exported their business.  In that respect, Nigeria is unique. In all of Africa, it is difficult to find the kind of momentum of Nigerian entrepreneurs or technocrats in the oil and gas industry. It just does not exist.

Our experience is partly because we have the population, partly because we have the drive, also partly because by unique combination of historical facts we have had a large population of diaspora – Nigerians who have the experience both internal and external and are ready to take the risk involved in setting up their businesses, so in that regard Nigerians are pretty much ahead and I think the industry recognises that,” he said.

Ene also believes that indigenous participation in the nation’s oil and gas industry is evolving. “What we are seeing is that there has been an evolution of indigenous technology in the industry. In terms of breakthroughs we have some of our companies manufacture pegs for pegging pipelines. One of our members builds platforms. One of our members manufactures electronic control panels for deepwater, shallow water control panels for FPSO’s.

“One of our members just built a deepwater theatre for training safety professionals. It is the only one in Africa. This is just a few examples of some of the things you are going to see at the offshore technology conference, OTC, in terms of the technology profile of Nigerian companies that are constantly growing from year to year,” he said. 

Enhancing industrial growth

Mr. Scott Aitken, Chief Executive Officer, CEO, Atlantic Energy, also believes that indigenous participation is critical to the growth of the nation’s oil and gas industry.

He noted that there are yet untapped potential that indigenous companies can take advantage of to push up the country’s production in the petroleum sector.

According to him, indigenous players will not only boost production, they can also provide the much needed gas to boost power generation. He said for a nation that wants to develop its economy, it must pay more attention to the activities of indigenous oil producers by providing them with enabling environment to operate.

The Atlantic Energy boss is of the view that the role of indigenous producers cannot be overemphasized in the nation’s development, and reiterates that there are Nigerian solutions to every challenge that faces the nation. He cites gas flared or compressed as LNG for export as possible areas where indigenous potential could be harnessed, saying that as indigenous producers, they needed to capture the gas, transport it safely and economically to the domestic market for highly effective and reliable power.

On the issue of funding which is one of the major problems facing the industry, Aiken was of the view that fast-tracking solutions to deliver early results will further help provide the funds required for development, thereby reducing the over-reliance on bank loans.

 Domestication of services Sees Growth

Mr. Ayodele Oni, an energy law and policy expert and senior associate, Banwo & Ighodalo, a Lagos based law firm, said that in the last four years, there has been improvement in the participation of indigenous companies in the oil industry due to the implementation of the Nigerian Content Act.

“After four years, there have been modest achievements and an improvement in the overall Nigerian value addition to the oil and gas industry and certain Nigerian engineering and oil service companies have benefitted from it, as there has been an increase in the volume of in-country fabrication,” he said.

He explained that the first deepwater simulation theatre (DST) in Africa located in Port Harcourt, and commissioned in April, which was built by an indigenous oil servicing company, Tolmann Allied Services Company Ltd, lends credence to the evolving indigenous technology in the industry.

 E & P exploits

The Nigerian oil industry, which has been dominated by the IOCs in areas such as exploration and production, has seen Nigerian companies now owning more than 100 blocks across oil-producing regions in the country, and at least 30 marginal fields.

By the end of this year, the major divestments by IOCs since 2010, would have transferred about 5 billion barrels of oil and 20 trillion cubic feet (Tcf) of gas to indigenous players, said Austin Avuru, managing director, Seplat Petroleum Development Company.

“The Nigerian Content Act has done so well in the last four years as many Nigerians now play active roles in the oil industry,” Tunde Adelana, director, monitoring and evaluation, Nigeria Content Development and Monitoring Board (NCDMB) said.

“We are seeing fabrication projects, pressure vessels being built by Nigerian companies,” he said, adding that the NCDMB was working very hard to put in place formidable processes to help detect non-compliance and abuses. 

Effective Competition

For Emeka Okwuosa, Managing Director of Oilserv, indigenous companies have come of age and are competing favourably with their foreign counterparts. “Indigenous companies are now taking control of lucrative pipeline construction projects.

The competition is now between indigenous companies and their foreign counterparts.
For instance, the East-West Gas Pipeline project awarded to Oilserv was made possible because of the steady investment in capacity building, and the insistence of the Minister of Petroleum Resources that indigenous companies must be accorded due recognition in line with the Nigerian Content Act,” he said. 

Developing local technology

On the possibility of Nigerians sustaining indigenous technology that can stand them out in the industry, Mr. Barry Esimone, President of Crusteam, an energy and infrastructure group, believes that Nigerians can adopt a few and indigenise them.

“We can struggle to adopt a few and indigenise them especially in the area of process or drilling material technology. In doing this, we can beneficiate the local material to meet the requirement properties/ characteristics and can then patent such formula if it brings cost or efficiency advantage over imported ones.

The Raw Material Research Institute has been working on this area and may provide our niche in the industry,” he said.

Esimone also believes that technology development starts from Universities and are refined in research institutes. He however said that government should encourage the establishment of low technology based industries to accommodate the participation of the locals in the industry.

African countries had over the years, crafted impressive local content laws that are designed to increase the participation of indigenous companies in key sectors of their economy, especially in the extractive sector.

While a few countries have recorded significant milestones in local participation as a result of the laws, others are yet to achieve any success.

However, it is postulated that the reason the continent is yet to achieve its dreams in the area of local content is due to the lack of enforcement of the laws and the brazen disregard for the laws by international oil companies and their local partners in most cases and the lack of sufficient capacity to handle some key projects.

This write-up, therefore, highlights the efforts African countries have made in formulating local content policies, the successes they have achieved, the challenges hindering the policy and ways the laws can be strengthened, while highlighting the need to raise the bar in building capacities.

 By Godspower Ike

Pita Ochai

Margaret Nongo-Okojokwu

 The risks posed by global economic volatility, especially with the economic slowdown in Asia and Europe, have served a warning signal to African countries and have highlighted the need for countries in the continent to strive towards a self-reliant and sustainable economy.

To achieve this sustainable and self-reliant economy, economic and energy analysts have advocated a strengthening of local content laws across the continent and concerted efforts to dissuade international companies operating in the continent from violating these laws.

According to these analysts, African governments have today, come to the realization that jobless economic growth and strong government revenue is not enough to sustain political power.

Specifically, it is stated with the African population growing exponentially — Nigeria, for example, is expected to have a population of over 200 million by 2020 and with the emergence of a younger, better educated, job-hungry generation, government must create jobs and economic opportunities for all if it is to maintain a popular mandate.

Analysts, in a forum titled, ‘The Africa Sessions’, organized by Africapractice and Pinsent Masons, are however, of the view that drivers for local content development are already in place in Africa, stating that the question remains how to accelerate local economic development; how to develop the local financing structures, workforce and supply chains needed to create diversified local economies among others.

According to them, the return of better educated and trained Diasporas with strong professional experience is building the local human capital, able to fill the jobs and create the businesses needed to meet local content requirements.

They said, “These Diasporas are also returning with robust financial resources and a sophisticated understanding of international finance. At the same time domestic banking sectors are improving, increasing access to local finance while international banks and financiers, frustrated by poor growth rates and returns at home and more confident of investment prospects in Africa, are making more foreign capital available.

“Where local content requirements are clear, for example, on the subject of employment quotas; capacity shortfalls mean that compliance can be extremely difficult. If governments want companies to comply with exacting quotas in technical sectors, they must work hard to bridge the gap by improving standards of secondary and tertiary education, aligning curriculums with the technical requirements of important sectors and creating opportunities for public private partnerships in education.” 

Local content breaches

It is agreed that the problem with local content in Africa, is not in area of the laws, but in ensuring compliance among players in the sector. Local content laws in Africa have been crafted to international standards, with emphasis on increased indigenous participation and economic growth.

Across the African continent, a number of breaches have been recorded in the area of local content implementation. Specifically in Nigeria, international oil companies (IOCs) have been accused of refusing to employ certain categories of Nigerian professionals, while others have blatantly refused to comply with the laws.

In an interview with Orient Energy Review, Peter Esele, former President of the Trade Union Congress, TUC, in Nigeria, disclosed that local content laws in Nigeria and a number of other African countries are not so effective because those who are saddled with the responsibilities of making it work are not living up to their responsibilities.

According to him, until the enforcers of the law ensure compliance and sanction offenders, African countries would not enjoy the benefits of the law. He said, “For instance, we have always had the National Agency for Food and Drug Administration and Control – NAFDAC. But when Dora Akunyili came on board as Director General of the agency that was when we now knew that NAFDAC actually existed.

“Until the people who are saddled with the responsibility of enforcing and making sure that everything is in line with local content do their job, we will not attain the necessary result. Whatever it is the country is benefitting at the moment is still intangible, compared to the huge potentials in the law.

“Taking example from other parts of the world, like in Angola that is trying a bit in that respect. I have some of my friends and colleagues that go there with rigs. No matter how good you are, Angolan authorities will only give you 30 days to pass on the knowledge, and you know that you are going to leave.

“Until we are able to emphasize the fact that certain areas of our economy, especially the oil and gas sector, must be strong on local content, then we will begin to benefit. You can imagine what this will do to our foreign exchange. Instead of having capital flight, we will now have local companies also repatriating these funds, thereby growing our economy.”

However, Raj Kulasingam, a lawyer at the international law firm, Dentons, identified Nigeria as the only country with a little bit of success in local content. According to him, the general consensus is that the local content rules in Nigeria has been successful in achieving its objectives of getting greater local participation in the oil and gas sector and has contributed to the creation of indigenous oil and gas companies such as Seplat, Shoreline, Afren among others.

He lamented the fact that despite the benefits Nigeria has enjoyed from its implementation, the impact on Ghana, Nigeria’s West Africa neighbour, remains to be seen.

Also commenting, Mr. Humphrey Okposo, Managing Director, Atlantic Marine and Oilfield Services, disclosed that while the purpose of the Local Content Act is to promote the indigenisation of Nigeria’s oil and gas industry, the implementation has provided a medium through which companies are taking advantage of the policies and flooding the market despite not possessing the qualifications or capabilities needed to perform the jobs they claim to offer. According to him, the emphasis on local content has led to growth in local participation, but not necessarily participation with substance.

Okposo noted that it has become common practice for contracts to be awarded to local companies that do not have capacity to perform the job. He said, “These companies then turn around and subcontract that contract to a company that does have the capacity, thus adding an extra intermediary and driving up the aggregate costs of the supply chain. “Most of the time, because these jobs are given to the lowest bidders international oil companies receive a good deal. The local companies who end up doing the job accept a lower profit margin, as the initial contracted company maintains a set profit margin for themselves.

“This creates challenges for the companies doing the job. With a lower margin, companies have to find a way to balance the books, invest in maintaining equipment, ensure that the compressors continue to run, keep an ample supply of workers on the payroll, and determine whether to take a loss on the figures and get the job done. In the long run, we take the hit financially for the imperfections in the system.”

He, however, advocated that local content policy directives be reoriented towards incentivising genuine capacity building, which can lay the foundation for future unassisted and organic growth of the local sector.

Also speaking on the issue, Mr. Igwe Achese, National President, Nigerian Union of Petroleum and Natural Gas Workers (NUPENG) stated that the monitoring body for local content in Nigeria, the Nigerian Content Development and Monitoring Board, NCDMB, as well as its counterparts in other parts of Africa, have failed to live up to expectation as a monitoring body for local content.

According to him, most of the international companies currently involved in local content are actually owned by foreigners who use indigenes as fronts.

He said, “Even where we have firms owned by indigenes in the spirit of the local content arrangement, especially in the drilling sub-sector, contracts are awarded to foreign firms or to companies which have no rigs.

“Where local companies are awarded some contracts, their workers are outsourced to service providers and casualised and paid pittance as wages. In most cases, the local companies are averse to unionism.”

He called on the authorities to wake up to their responsibilities to enforce, impose sanctions and do adequate monitoring.

For instance, he said, “The NCDMB must monitor effectively that the key provisions in the Act are adhered to, like Nigerians being given first consideration for employment and training; succession plans for positions not held by Nigerians; maximum of five percent of management positions for expatriates and that Nigerians must constitute a minimum of 60 per cent of the Board.”

Achese further noted that the whole essence of local content is to generate local capacity and utilization of technology and use the products that are domiciled in-country, instead of relying on products and services from abroad, which constitutes a drain on the continent’s foreign exchange.

According to him, this will go a long way to stimulate economic activities in the country, create employment and promote technology transfer; adding that the end result is the use of the continent’s human and material resources which is a chain in the service delivery system.

Sanctions for breaches

Stakeholders are of the view that one of the ways of discouraging breaches is placing heavy sanctions on defaulters. For example, BG Group Plc, the United Kingdom’s third-largest natural-gas producer, paid $71 million in fines in Brazil for breaching local content rules at an offshore project where it did not find commercial volumes of oil.

In Africa, sanctions are hardly meted out to defaulting companies and this has further compounded the problems of the continent in the area of local content implementation, this is in spite of various provisions for sanctions for non-compliance.

Specifically, in Ghana, acting as a ‘front’ to achieve local content status can result in a fine or imprisonment, while the breach of various other local content requirements can result in a fine equal to five per cent of the value of the proceeds from the relevant petroleum activity up to a maximum of  $5 million. Whether these sanctions are implemented on defaulting companies or individuals remain to be seen.

The NCDMB had severally threatened to sanction international oil companies that flout the Nigerian Local Content law, stating that it has the right to sanction erring opera­tors after the issue has been in­vestigated.

However, we are yet to see any sanction in this regard.

In addition to Nigeria, Ghana, Angola, Morocco, South Africa, Uganda, Gabon and Guinea have passed local content laws in recent years, often in the extractive industries, with commendable provisions. However, these laws ended up not enforced properly.

The Africa Report, in a piece titled, Local content: Cultivating homegrown talent,’ pointed out that the Nigerian Oil and Gas Industry Content Development Act has tough requirements on giving local companies priority in oil block licensing rounds and compels oil companies and service providers to hire Nigerians.

Ghana’s local content law likewise gives local companies first preference in bidding rounds for oil blocks and requires a minimum five per cent equity stake for Ghanaian firms – not including the government-owned Ghana National Petroleum Corporation – in every oil licence.

Also, the report stated that in Uganda, a clause in the local content law says that “where the goods and services required by the contractor or licensee are not available in Uganda, they shall be provided by a company which has entered into a joint venture with a Ugandan company provided that the Ugandan company has a share capital of at least 48 per cent in the joint venture.

The report also noted that in 2012, the Moroccan government established a regulation that entitles SMEs to manage 20 per cent of all government contracts, adding that ensuring that these companies actually exist is a challenge, but skills and finance are the main constraints that limit the creation of a fleet of local companies that can seize local content opportunities.

Continuing, the report stated that in Angola’s oil sector, the international non- governmental organisation CDC Development Solutions created an enterprise development agency called the Centro de Apoio Empresarial (CAE) in 2005 in collaboration with the Angolan government, international oil companies and the national oil company Sonangol.

The CAE, according to the report, provides Angolan companies with training that allows them to participate in the supply chains of large oil companies, adding that CAE consultants also help in the development of business plans, a crucial mentoring service that many African SMEs could use.

It added that since its founding, more than 1,500 companies have particip­ated in the scheme, winning more than 300 contracts worth $214 million and creating 2,700 jobs. In 2010, the CAE expanded its mandate to include the provision of finance.

The rationale is clear, according to the report, stating that after decades of natural resource flows out of African countries, economies remain locked into the lowest rung of economic development, with local companies unable to add value to raw commodities.

“The continent’s industrial fabric remains threadbare, and the growing number of young graduates will cause chaos if there are not enough jobs to fill,” it stated.

In spite of these laudable laws, the report, however, highlighted obstacles to local content policies to include the fact that the slippery definitions of local content can often lead to fronting, whereby multinationals structure arrangements so that there is only a semblance of domestic participation.

Another obstacle, according to the report, is the lack of support given to boosting capacity of indigenous players.

In addition, African Development Bank (AfDB) and the Bill and Melinda Gates Foundation (BMGF), in a report titled, ‘Creating local content for human development in Africa’s new natural resource-rich countries,’ written by AFDB’s Steve Kayizzi-Mugerwa and John Anyanwu, identified the constraints facing local suppliers from competing effectively to include lack of capacity,  funding, information, skills, regulatory and institutional, and infrastructure.

The report further stated that in spite of efforts to promote local content, local firms may lack the capabilities to produce goods and services at the required quality and may lack access to credit.

It added that local firms and extractives firms may lack the mutual information to begin relationships, while the regulatory and institutional environment may be inadequate.

“Workers may lack the appropriate skills, in addition to the fact that infrastructure, such as power, water, or transport facilities, may be substandard,” it stated.

Key questions

To strengthen enabling environment for skills generation and boost local content in Africa, the report stated that policy-makers should answer a number of questions, key among which are if the government would offer tax deductions on skills training by companies, or impose compulsory levies?

Other questions are who should take the responsibility for defining a national skills development plan linked to the extractives industry? And if there should be role for regional organizations?

However, the report said, “Our review of policies and of country experiences points to some general conclusions and lessons from experience. Nevertheless, policy-makers should avoid being tempted by easy answers and ‘best practice’ from elsewhere.

“Institutions vary from one country to another, including with respect to the relationship between governments and foreign investors, as does the level of domestic industrial capabilities and skills and the stage of the extractives sector life cycle. The appropriate policy response will therefore depend on the specific country and industry context.”

Strengthening local content in Africa

The AFDB and BMGF report further stated that for local content policies to be successful, government of African countries should promote an enabling environment for local businesses, by removing barriers to entry such as poor infrastructure, promoting the development of skilled labour, strengthening institutional coordination, facilitating coordination of local suppliers, removing regulatory requirements, and supporting increased access to finance.

The report further advised that the government should strengthen and clarify the legal and regulatory framework, ensuring a well-resourced and accountable administrative system with clearly defined functional responsibilities.

It further stated that encouraging collaboration among stakeholders is key to increasing local content and would help enhance productivity and efficiency through knowledge spillovers, synergies, better coordination, and efficient access to public goods.

The report also called for governments at all levels to build capacity of local businesses and invest in human capital; plan ahead to ensure sustainability well before any actual projects have started; engage in information sharing and transparency target the sectors with the smallest ‘gaps’, by  working with industry to identify the parts of the value chain where local firms have capabilities for timely delivery of the required quality at a competitive price or where the potential to build capacity exists.

Conclusion

In line of the above, it is a general consensus that for local content to thrive in Africa, the laws and requirements should be made public, procurement processes should be transparent, standardized, while accountability should be enforced.

Stakeholders are also of the view that local content targets may be more effective if they are implemented in a phased approach while the rules are flexible. They also called for the establishment of a unified method of local content measurement with the policy having the force of law.

In general, it is agreed that effective local content policies need to be implemented by dedicated and independent government authorities staffed with qualified personnel who are knowledgeable regarding industry practices.

Such authorities, it is stated, can be responsible for monitoring local content and ensuring that local suppliers are guaranteed the opportunity to apply and compete for contracts. They should be tasked with establishing a registry of competent and qualified local vendors.

The authorities should also track opportunities in the value chain and on future projects and make the information available to local suppliers.

Contrary to opinions from some quarters that the Nigerian Content Act of 2010 has not impacted positively on Nigerians since inception, the Executive Secretary of Nigerian Content Development and Monitoring Board (NCDMB), Mr Denzi Amagbe Kentebe has disputed the claim, insisting that the Board has lived up to expectation.

Kentebe stated this recently in Port Harcourt while delivering a keynote address at a 3-day workshop of the Nigerian Society of Engineers.

According to him, NCDMB has within its short period of existence asserted its position as tonic to turn around the once foreign dominated oil and gas industry to enable Nigerians participate actively in the oil and gas subsector.

He enumerated some of the achievements of NCDMB as, human capital development, in which the Petroleum Training Institute (PTI), Efurun, Delta State and Maritime Academy of Nigeria (MAN), Oron in Akwa Ibom State, all in Niger Delta have been upgraded to train manpower in line with international standards in the oil and gas industry.

The Executive Secretary also said that about 5500 Nigerians have been trained in special skills and attached to specific projects in the oil and gas sector since 2010, courtesy of the Nigerian Content Act.

Kentebe equally said that over 1000 Nigerians have been trained as Geoscientists, Environmental Remediation Specialists, Machinists, Artisans, Underwater Welders and Cadets within the period under review.

He noted that Niger Delta indigenes constitute about 50 percent of the beneficiaries in these schemes.

In a chat with the Chairman/CEO of Oilserv, Engr Emeka Okwuosa, he expressed reservation that the Nigerian Content Act has achieved enough since the inception of the law four years ago. He attributed the lull to the inability of the FG to create an enabling environment by providing funds for local engineers.

He lamented that the interest rate of obtaining loans from Nigerian banks is still very high, thereby discouraging Nigerian engineers from accessing it.

Okwuosa also took a swipe at the Nigerian engineers whom he said have not been ‘pushful’ to tap from the provisions of the Nigerian Content Act, thereby leaving their foreign counterparts to dominate the oil and gas industry in the country.

Lending his voice to the issue, the Public Relations Officer (PRO) of Oilserv, Engr Innocent Nwokolo said despite the effort of Petroleum Technology Association of Nigeria (PETAN) and Oilserv in creation of the Nigerian Content Act, local operators have not been fairly treated in its implementation.

Admitting that the process is still in its incubating stage, he urged the FG to review the National Gas Masterplan to enable local operators have greater share of the business.

Nwokolo boasted that Oilserv has demonstrated that local operators can compete favourably with their counterparts elsewhere by driving effectively one of the largest gas projects, OB3 in the country. He challenged the Federal Government to provide more support for the Nigerian Content Operators and watch them perform wonders.

Earlier the President of Nigerian Society of Engineers (NSE), Engr Isaac Olorunfemi had asked for partnership with NCDMB to reposition engineering practice in the country and thanked the Executive Secretary, Mr Kentebe for coming.

The Nigeria’s Bank of Industry (BoI) has inaugurated a 24 killo watts (kw) micro-grid solar solution in two Communities in Osun state, South West Nigeria, in a bid to stem the challenge of rural urban migration.

Managing Director of Bol, Mr. Rasheed Olaoluwa, who declared this maintained that the move was in furtherance of the United Nations campaign for eco-friendly sources of energy.

With this initiative, Osun State has become the first State to benefit from Bol’s intervention in the provision of renewable energy in South West Nigeria.

The solar electrification project is located in Idi-Ata and Onibambu communities in Osun State.

Olaoluwa lamented that rural communities are the worst hit in terms of poor access to electricity, especially the off-grid arrears which have always been without power supply and have resigned their fate to the use of kerosene lanterns, oil lamps, and other types of dangerous and unhealthy sources of light to able to live their daily lives.

The development, he said, has hampered the socio-economic development of the nation as it has created an atmosphere that is not conducive for Micro Small and Medium Enterprises (MSMEs) which are the drivers of the nation’s economic growth to thrive.

He argued that the situation remained one of the main factors responsible for the concept of rural-urban migration.

Olaoluwa lamented that the 45000 electricity generated from the national grid was grossly inadequate for a leading African economy like Nigeria with a population of 170 million people, hence the intervention of Bol and the United nations Development Programme (UNDP).

He argued that the situation remained one of the main factors responsible for the concept of rural-urban migration.

The Bol boss disclosed that the bank is starting off with the provision of long-term financing for the installation of off-grid solar home systems in six communities in a pilot phase, as part of its Solar Energy Partnership with UNIDO.

‘‘These communities, with an average of 200 homes each, are located in Anambra, Edo, Gombe, Kaduna, Niger and Osun States. Today, we have come to Osun State in partnership with Arnergy Solar Limited to commission a 24kw micro-grid solar electrification system in Idi-ita/Onibambu, a community which hitherto had no access to electricity,’’ he said.

Also speaking, Governor of the State of Osun, Raufu Aregbesola, urged the leader of the two communities to judiciously protect the installation and ensure that payments are promptly made for energy consumed so that the scheme can be self-sustaining thus encouraging the investor to replicate such in other locations within the State.

Aregbesola who was represented by the Secretary to the State Government, Mr. Moshood Adeoti said ‘‘As a responsible Government, I want the Ministry of Water Resources, Rural Development and Community Affairs to carry out due diligence on the issue of appropriate pricing and adequate supply to each household. This is to ensure consumer protection against exploitation,’’ he stressed.

In his address, Chief Executive Officer of Arnergy, Mr.Femi Adeyemo, said the application of technology for industrialization is key to enthroning sustainable economic growth and development.

He explained that the firms distributed off-grid solar rural electrification is orchestrated to help reduce the wide gap/deficit in the energy sector in the country.

‘‘Therefore, Arnergy’s distributed off-grid solar rural electrification is orchestrated to help reduce the wide gap/deficit in the energy sector of the country. It is heartrending to note that more than 60 percent of Nigerians are not connected to the grid and do not have any access to electricity,’’ he said.

The Ghana Supply Chain Development Programme being managed by Pyxera Global, has signed a memorandum of understanding with TRACE International, a leading anti-bribery and corruption business association, to ensure that SMEs in the oil and gas field industry were certified as doing clean businesses.

The MOU signed between the two partners would also facilitate certification of local SMEs to enable them to be listed on TRACE database as companies that could be contracted by Multinational Companies in the oil and gas sector.

Mr. Kofi Koomson, Technical Team Lead of Pyxera Global, said this at a partnership engagement networking workshop organized by Pyxera Global to bring well established business and multinational companies closer to the doorsteps of SMEs in the region. The partnership engagement would again build synergies and better relationships between operators in the industry. Mr. Koomson mentioned that per the TRACE, local SMEs contracted by member International Oil Companies were compliant with due diligence processes.

Ms. Majorie Janczak, Head of Training and Communication, noted that about 34 training workshops had so far been organized with over 168 SMES and Bulk Service Providers served. Ms Janczak said 92 industry specific certificates had been issued, five trainers certified, whilst 80 companies had already been linked to IOCs with 39 contracts amounting to 13 million dollars, won all in the bid of promoting local content in the industry.

She said building capacities of local operators and linking them to the oil and key industry remained one priority of the Ghana supply chain programme, funded by the United States of America under the USAID.

The Training Manager added that 2, 500 participants had undergone training on Health, Safety and Environment, quality, bids, contracts, strategic planning and financial management.

Almost a decade ago, Ghana discovered crude oil in commercial quantities. Amid the excitement that came with it were those who predicted the possibility of the Dutch Disease infecting the nation, especially to the detriment of the agricultural sector.

Oil discovery by any country is indeed a joyous moment as it is believed that the oil find will propel the country into an exponential economic growth. Though seen as good omen, it comes with its attendant risks that require well-established insurance underwriters to manage.

It also walks hand-in-hand with its huge financial outlays in the area of infrastructural developments such as the construction of rigs, the digging of wells and office complexes which require several forms of insurance.

Oil and gas insurance

This constitutes basically various insurance policies targeted at the oil and gas sector of the economy. Its purpose is to provide adequate insurance coverage for every phase of the oil exploration process from discovery through to the extraction of the oil.

How it works

At the exploration phase, the oil explorer is expected to lease a block for drilling. Such operators will require a Public Liability insurance policy to cover their obligations at law as contained in the lease agreement and any other regulatory permits. They will also require other insurance policies such as group personal accident, fire and allied perils, employers’ liability, motor insurance, and any other policies needed for their operation akin to any other business venture.

Since most oil exploration activities are conducted off-shore (or at high seas), most policies targeted for this sector require special wordings to take cognisance of the delicate nature of operation. Some of the policies required are marine insurance, seepage and pollution insurance, removal of debris, rigs and equipment insurance, erection all-risk insurance, pollution liability insurance, loss of revenue insurance, sabotage and piracy insurance, among others.

Market and underwriting capacity

Indeed most third world countries with oil lack the local market and the capacity to underwrite these huge risks; the reason most of these risks are placed in offshore markets. These placements, which are often done in notable insurance markets, such as the UK and the USA, provide insurance cover for up to 95 per cent of the oil and gas industry, globally.

The case for Ghana

Ghana, having realised the economic challenge that it is likely to face in the area of insurance placement following the oil find, has duly tasked the stakeholders to explore the avenues for developing the local market/ capacity to accommodate the oil and gas insurance. In view of these, the National Insurance Commission (NIC), in collaboration with the National Petroleum Commission of Ghana, has come out with the Ghana Oil and Gas Insurance Pool (GOGIP) to pool their resources together to underwrite oil and gas risks in Ghana.

The NPC and the NIC supported by industry stakeholders have developed this protocol for placing oil and gas insurance in Ghana in line with the Petroleum (Local Content and Local Participation) Regulations 2013, (L.I. 2204) and the Insurance Act 2006, (Act 724).The protocol has created an opportunity for the local insurance companies and intermediaries to actively participate and play a lead role in the oil and gas business in Ghana.

The protocol for upstream oil and gas insurance placement

This Protocol, which sets out the rationale and principles behind placement of insurance in the upstream petroleum sector in accordance with the Insurance Act 2007, Act 724 and the Petroleum (Local Content and Local Participation) Regulations 2013, (L.I. 2204) also has  additional procedures which must be complied with in placing upstream insurance.

It is my conviction that one of these protocols, which stipulate that all insurable risks of petroleum sector contractors, subcontractors, licences or other allied entities shall be insured with the Ghana Oil and Gas Insurance Pool as the representative of all the licensed insurance companies in Ghana, is working effectively.

This would be the surest way to strengthening local capacity

That the GOGIP and the appointed reinsurance brokers shall ensure prompt remittance of the overseas reinsurance levy to the National Insurance Commission (NIC) is one which stakeholders should not lose sight of.

By Gilbert Boyefio

Since the coming into force of the Local Content Law and its regulations in Ghana, many indigenous companies have been under the illusion that the law is just to protect their interest and therefore its compliance is for only foreign companies.

However the Petroleum Commission has emphatically stated that the compliance to the local content law and all its regulations applies to everyone operating in the upstream sector of the country including indigenous companies.

The Commission has stressed that irrespective of one’s status or nationality the requirements of the law must be met and adhered to so far as one is operating in the upstream sector.

Interacting with stakeholders in the oil and gas industry in Ghana on matters relating to Local Content and its compliance, Dr. Twumasi-Anokye, the Coordinator of Local Content at the Petroleum Commission, noted that due to the strange perception held by the indigenous companies concerning the law, when they are awarded contracts and needs to also subcontract they give it out to foreign companies.

“When it comes to procurements and contracts, a number of local companies think that once they get a big contract from ENI or Tullow and they have to sub contract, they can give their contract to whomever they like and do not have to go through the Commission.

But yet these same local companies expect ENI, Tullow and the rest to come through the Commission for them to get contracts. This is totally wrong.

Under the law everybody sub contracting in the upstream sector must come through the Commission. Any sub contracting which is over $100,000.00 the process has to come through the Petroleum Commission.

What we are saying is that when indigenous companies want to subcontract after benefitting from a big subcontract from an IOC they also has to comply with the procedure. It is not only the white guys who comply with this, but Ghanaians too,” she indicated.

According to her, there are smaller Ghanaian companies that can also benefit from the big contract that the other indigenous companies have gotten, adding that, “What has been done to you, you also do it to your fellow Ghanaian company.”

She insisted that local content has to be a key component of all companies operating in the upstream sector.

Joint Venture

Touching on Joint Ventures (JVs), Dr. Twumasi-anokye pointed out that the idea of the joint venture is not to create scenarios where people just take shares in a company, does no work and at the end of the year get paid.

She said for the purpose of the local content law it is very important for the Commission to see that there is technology transfer, capacity building and transfer of knowledge.

According to her, most of the time questionnaires sent to players in the industry, especially indigenous companies, for information on their operations and JVs don’t get filled and returned to the Commission.

“A lot of the indigenous companies have not responded to the questionnaire. We write to you to know the roles and responsibilities of the parties in the joint venture.

As a result of that, we have come to you under regulation 4 (7) asking you to tell us what it is that you are doing under the joint ventures. Some of you have responded but unfortunately majority of the indigenous companies have not responded to us.

We hope that after today that will change”.

She pointed out that even though the indigenous companies do not respond to the letters and questionnaires that the Commission sent them, interestingly when they get into trouble with their joint venture partners the first place they come to is the Petroleum Commission. They come to complain that they have not been paid this or that.

“But the difficulty for us in such situation is that we are not privy to the agreement. So now that there is a dispute how do we help you? Because we do not know what is really going on in that relationship.

Though the law is there to protect you we cannot do so because we do not know what is really going on and also the things that you have agreed to.

If we are here to protect your interest the little thing you can do to help us is to tell us what you are doing,” she advised.

Annually all companies have to send their local content plans to the Commission. These plans are to be submitted in January of every year.  This should also include a company’s procurement plan, employment plan, and so forth.

The regulations also requires that if you are operating goods and services in Ghana you have to get an office established and it has to be done in association with an indigenous company. This is an emphasis on the JV requirement which goes to show that when the law talks about the JV it is not talking about a sleeping partner, or a capital injection partner.

President African Shipowners Association (ASA), Temisan Omatseye has said that there is need to carry out an audit of all cargoes brought into, and taken out of Africa in order to empower Africans to participate in their affreightment.

Speaking at a conference tagged ‘African Cargo for African Shipowners’  in Lagos, Omatseye said the lack of a data base of inbound and outbound cargoes is one of the reasons why foreign shipowners have continue to have an edge over their African counterparts.

“We have a lot of our youths who are unemployed, who are not trained as seafarers. We are trying to bring them back to get jobs. The challenge we have is that we do not have an audit of the number of cargoes leaving Africa; we want to get the audit of the cargoes leaving Africa, the amount of money we are paying on insurance. Once we have that information that will guide us to bring the business back to Africa.

“Once they (youths) finish the seafarers development programme, without a certificate of competence, they have a problem, they cannot work. Maritime Academy Oron is training so many people but no sea time training.  Unless we are able to get the ships to put our youths onboard, the training they get is all useless.

“Let us get the cargoes which will allow us to buy the ships, once we own the ships, we can then put our youths on board the ships to become seafarers,” he said.

Omatseye said the recommendations from the conference including the identified challenges of national, regional and continental Cabotage; issues of maritime security in the Gulf of Guinea and the Gulf of Aden, will be forwarded to the African Unions Head of State meeting in Lome, Togo in March 2016 to form the policies that will drive the African maritime industry

“A lot of cargoes are leaving Africa and coming into Africa and we do not have any ships carrying it. The Heads of government meeting coming up in March is where we are taking proposals from here to tell them how much we are losing in Africa,” he said.

Also speaking, representative of the African Union Commission and Coordinator, 2050 Africa’s Integrated Maritime Strategy Taskforce, Samuel Kame Domguia said the African Development Bank has given assurance to support the private sector in acquiring vessels to fully develop and achieve the Cabotage policy in Africa

“The new President of the African Development Bank is committed to this agenda. There will be a strong support to African private sector in this field.

“It is not just a matter of having ships owned by Africans but these ships should be built by Africans in Africa so this requires some strong financial support,” he said.

Representatives from 10 African countries including Kenya, Cameroun, Ghana, South Africa, Sierra lone and Tanzania were among other maritime stakeholders in Nigeria present at the Conference.

The Global Maritime Energy Efficiency Partnerships Project (GloMEEP), which aims to support increased uptake and implementation of energy-efficiency measures for shipping, was formally launched on Monday in Singapore, at the International Maritime Organization (IMO)-Singapore Future-Ready Shipping 2015 conference.

The Global Environment Facility (GEF)/United Nations Development Programme (UNDP)/IMO project, formally designated “Transforming the Global Maritime Transport Industry towards a Low Carbon Future through Improved Energy Efficiency,” will focus in particular on building capacity to implement technical and operational measures in developing countries, where shipping is increasingly concentrated.

Funding for the two-year project was agreed in July. IMO will execute the project, which marks the beginning of a new blueprint for creating global, regional and national partnerships to build the capacity to address maritime energy efficiency and for countries to mainstream this issue within their own development policies, programmes and dialogues.

Attending the GloMEEP launch were representatives of the lead pilot countries for the project: Argentina, China, Georgia, India, Jamaica, Malaysia, Morocco, Panama, Philippines and South Africa. The lead pilot countries will be supported in taking a fast-track approach to pursuing relevant legal, policy and institutional reforms, driving national and regional government action and industry innovation to support the effective implementation of IMO’s energy efficiency requirements.

The project inception meeting and global project task force meeting will take place in Singapore on September 30 and October 1.

The IMO’s third study on greenhouse gas emissions from ships (2014), estimates that international shipping emitted 796 million tonnes of carbon dioxide (CO2) in 2012, down from 885 million tonnes in 2007. This represented 2.2% of the global emissions of CO2 in 2012, down from 2.8% in 2007.

However, the study’s “business as usual” scenarios forecast a growth in CO2 emissions for international maritime transport of between 50% to 250% in the period to 2050, depending on future economic and energy developments.

By Pita Ochai

Meeting the energy consumption demand in Nigeria has been a major challenge to the country since the last 20 years. The attempt by subsequent governments at alternative sources such as hydro dam, thermal power and use of fossil sources to produce electricity through generators has increased carbon emission and its adverse effects on the environment.

But Olusegun Aderinde, the  General manager of Dolak International Power Limited and also the Group Managing Director of Green Energy Finance PLC, said that a shift from continuous reliance on hydro and fossil power sources to Green energy sources may be of greater relief and benefits to the national economy and environment.

“Renewable energy is about reducing the carbon emission into the atmosphere, proving electrical energy through wind, biomass, wind current, solar panels (sun) and, and inverter systems amongst other. We must build systems to generate power that hardly uses Hydrocarbons, which are expensive and pollute the environment,” he said.

He claims that just as in Germany, most homes in Israel are on solar panels mounted on the rooftop. Thus electrical cables are not visible on poles by the street side as it is here in Nigeria. Whereas Israel is a temperate and desert region, Nigeria with abundance of sunshine   is well positioned to benefit from alternative power deployment from solar.

In his view, Aderinde said that about 80 percent of Nigerians do not have access to decent energy; they are under the risk of cardiac failure because of the use of carbon. “In latest medical report from the UK, a Nigerian was sent to the hospital and they discovered that he had diesel driven cancer to excessive exposure to diesel. To him, the high rate of cancer among Nigerian VIP’s is as a result of excessive exposure to diesel from generating sects. Such exposure causes heart failure, cancer and haemoglobin toxic problems, that are why we want to renew the earth by ‘greenification’, that is the essence of green energy,” he said.

He regretted that the amount the nation spends annually to import hydrocarbon and maintain other sources of energy would have been saved and spent to develop other sector of the economy had the nation developed the green sources of energy.

“Since we are failing to develop our green and other alternative energy sectors, and we will keep spending billions of naira and dollars in importing fuel and other hydrocarbons, whereas our educational sector at the tertiary level and governments are supposed to be paying attention to developing this alternative energy sector,” he noted.

The history of electricity development in Nigeria can be traced back to the end of the 19th century when the first generating power plant was installed in the city of Lagos in 1898 fifteen years after England began public supply of electricity.

From then until 1950, the pattern of electricity development was in the form of individual electricity power undertaking scattered all over the towns.

Some of the few undertaking were Federal Government bodies under the Public Works Dept, some by the Native Authorities and others by the Municipal Authorities.

Despite Nigeria’s early experiment with electricity generation and supply, the country has not met 40 per cent of her electricity consumption requirement for both industrial and domestic uses.

To meet the shortfall in the nation’s electricity demand and supply, other sources of electricity supplies were turned to without much significant success recorded but with much negative impact on the environment. Most of the electricity supply in Nigeria is provided by generators, using fossil oil and gas.

The continued use of this alternative source of power supply has its own inherent dangers such as carbon emission, leading to ozone depletion. Generators make a lot of noise when running, and they run on fossil fuels, which pollute the environment leading to many cases of deaths from inhale of fumes and fire accidents.

While the world population is projected to rise to about 8.321 billion in 2030, world energy demand is expected to move up by 44% in 2030 from 524 quadrillion British thermal units in 2010.

Experts in electricity generations and supply and environmentalists are also of the concerns that with Nigerian population estimated to hit between 257million people by 2030 the demand for energy would continue to rise.

Their fear is not on the ability or otherwise of the nation to meet electricity demands by then, but the immense negative impact electricity generation and distribution either from the hydro dam, thermal stations and generators would have on the nation.

The struggle continues between the nation’s growing demand for energy and the increasingly urgent need for that energy to be clean and renewable.