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Equatorial Guinea Grants Relief to Oilfield Service Companies

The country has acted to support its services industry and is engaging on an industry-wide dialogue to study other measures for upstream operators and ongoing midstream projects

The Ministry of Mines and Hydrocarbons (MMH) of the Republic of Equatorial Guinea decided on the waiving of its fees for service companies in the country.

The country says it is the first action to be taken to support oil & gas service companies in Equatorial Guinea in the wake of the oil price drop caused by the coronavirus pandemic. Oil prices currently remain at around $20 a barrel, a historically low level since prices broke the magic $25 in the early 2000s

“The Ministry of Mines and Hydrocarbons took the unanimous decision to waive its fees for services companies for a duration of three months,” declared Gabriel Mbaga Obiang Lima, the Minister of Mines and Hydrocarbons. “We recognize that the oil sector continues to be the largest private sector employer in the country and want to give our local service companies the means to weather the storm and avoid any jobs being lost. While it is important to let market forces determine the future, the government does have a role to play in stimulating the market and creating an environment for these companies to stay strong, continue investing and create opportunities for our citizens,” he added.

Jobs security and the safety of Equatorial Guinea’s citizens have been put at the top of priorities for the MMH, which has further pledged to keep engaging with local and international companies to create the right kind of enabling environment for the sector to operate and grow despite current circumstances.

International operators will need to keep complying with local content requirements in Equatorial Guinea throughout the downturn, and make sure to work with the local services industry to adapt to new market dynamics. This is the first such measure to be taken in Equatorial Guinea, which will consider additional action to bring relief to its oil & gas sector.

The statement added: “The ongoing coronavirus pandemic has brought the world economy to a halt and critically affected oil demand. As a result, prices have been brought to one of their lowest levels in a long time, which brings considerable instability to African oil producers in the Gulf of Guinea.


GMoU Is Widely Praised in Nigeria’s Oil Communities, but It’s Not the Cure All

Among oil rich local communities in Nigeria’s Niger Delta region, the GMoU is widely perceived as the most effective strategy for benefit transfer.

The arrangement is, however, burdened with too many expectations and its provisions are non-legally binding, with reported violations in several cases, according to a new report.

“This Global Memorandum of Understanding is a participatory development planning process initiated by oil companies and this exists for a lot of communities in the Niger Delta” , says Ken Henshaw, author of Local Impacts, one of the 12 sub reports in the latest Benchmarking Exercise Report (BER 2019), of the Nigeria Natural Resource Charter. “The communities consider this a very key process for delivering development”.

The BER is a biennial exercise which reviews the entire Nigerian petroleum sector and its linkages to the wider economy through a set of principles framed around how best the government and the citizenry have harnessed the opportunities created by the country’s petroleum endowment.

The audience at the launch of the BER 2019 in Abuja

“You cannot sue an oil company for violating a GMoU and in the course of our research, we did see a lot of cases where GMoUs were violated”, Henshaw argues.

Ken Henshaw serves as Executive Director of the Centre for Social Studies and Development (CSSD), one of the several Civil Society organisations engaged by the NNRC to research and write up the report. “Agreements were violated and oil communities took to the streets to protest”. He is concerned that the expectations which communities have of oil companies are far, far higher than what “the real mandates” of oil companies are. “When you go into a community, they expect the oil companies to build primary schools, build secondary schools, even build Churches. In Eket, Ibeno specifically, it is expected that Mobil should renovate the Qua Iboe Church. The community has queued behind that expectation and it’s currently causing friction. There’re unrealistic expectations being placed on oil companies”.

The government hasn’t done much in managing these expectations, in the opinion of the researcher.

Henshaw gives two examples of what he calls ‘unrealistic expectations’.

Ken Henshaw: Government has not managed expectations

“The first is construction of Modular Refineries. When in 2016, the government first went to the market with that idea, in the Niger Delta, artisanal refiners, oil thieves basically came together and formed unions. They started forming clusters to establish modular refineries. The government didn’t do well in managing those expectations because people in the region thought that modular refineries would be like installing boreholes to overhead tanks and every family would own one. That was the expectation, the government didn’t do much to manage this expectation. The next one is the re-allocation of oil blocks. The government said that it will take communities into consideration for the reallocation of oil blocks. It says so in the National Petroleum Policy Document. That is an expectation that was not properly managed because the perception in the minds of the communities simply means that every family where a pipeline passes through should have some kind of block. When expectations aren’t properly fulfilled, it fuels anger, it leads to suspicion which leads to crisis”.

Henshaw says that the communities have largely not benefitted from the utilization of the state sponsored intervention schemes, including 13% Derivation, Statutory Allocation, Ministry of Niger Delta Affairs, NNDC (Niger Delta Development Commission).

“The community is totally not involved in how this 13% Derivation Fund is utilised, so the only thing that gets the community involved or the community feels a sense of belonging to, as we speak, is still the GMoU”.

“So, either way we look at it, it’s still the only mechanism that has a situation where some people in the community would come to give actual contribution as regards to needs within the community. I think it has worked to a large extent. How we can develop it further should be what we should be looking into”.


Nigeria’s EIAs Are Toothless, With Focus on Compensation than Deterrence, Report Says

By Foluso Ogunsan

Regulations on Environmental Impact Assessments (EIAs) in  Nigeria  look good in the books, but the extent to which the government integrates this process into decision making on resource projects is extremely limited, a new report has shown.

“There are several gaps in governments’ monitoring and control of the EIA process to the extent that it is possible for it to be circumvented by resource companies that desire to do so”, according to the report, which looked at environmental social and economic effects of hydrocarbon extraction on communities  at all stages of a project cycle. “Government agencies responsible for approving oil and gas sector projects lack the technical and financial capacity to monitor and enforce compliance”, the report argues.

One substantial claim in the report is the contention that the Nigerian government does not use environmental and socioeconomic impact assessments (SIAs) before deciding to open an area to exploration and production activities.

But the government, it says, actually makes some attempt to use  these assessments at other stages of resource extraction.This focus on environment and social impacts of natural resource projects is one of the 12 sub reports in the latest, (ie 2019 version) Benchmarking Exercise Report (BER)  of the Nigeria Natural Resource Charter

The biennial Benchmarking Exercise Report (BER) of the Nigerian Natural Resource Charter (NNRC) looks at the entire Nigerian petroleum sector and its linkages to the wider economy through a set of principles framed around how best the government and the citizenry have harnessed the opportunities created by the country’s petroleum endowment.

The charter identifies 12 broad precepts, covering the main decisions required to transform assets under the ground into development above ground.

“There are no defined, deliberate, and enforceable frameworks created by any tier of government with the goal of ensuring that affected communities participate meaningfully in decision making on resource projects”, contends the report, specifically titled Local Impacts. “This has meant that the free, prior, and informed consent of communities is not sought or obtained. Where efforts are made in this regard, they are discretionary and ‘after the fact’.

“EIA requirements and the Land Use Act do not reasonably prioritise consultation with communities. The Host Communities component of Petroleum Industry Governance Bill (PIGB), which could have addressed these gaps and increased trust, did not make much progress in the period under review. Similarly, the National Petroleum Policy (NPP), which articulates the government’s vision in the petroleum sector and promises to increase the participation of affected communities, did not take widespread effect in the period.

At the two different launches of the Benchmarking Exercise Report, in Lags and Abuja, Ken Henshaw, Executive Director of the  Centre for Social Studies and Development (CSSD), which authored the Precept 5, focused on  Local Impacts, harped on two issues: the seeming cluelessness of regulatory authorities which encourages lax accountability of licence holders to world class environmental  housekeeping  and (2), the sheer alienation in Host Communities created by break down of trust.

“In the requirement for EIA, communities are not specifically mentioned”, Henshaw told the packed halls at the launch of the report, in late February and early Mach 2020. “It talks about a broader perspectives of citizens in general, people, consultations, but not with the communities specifically mentioned. If communities were mentioned, I believe they would have created a nexus that requires that EIA documents be interpreted in a such a way that communities understand it and can make useful inputs. In the course of my research, I saw EIA reports clearly plagiarised from other places. In the course of my research, I saw EIA reports that were conducted in faraway regions as Brazil. EIA reports that talked about plant species that according to National Geographic exists only in South America. They were EIA reports for projects in the Niger Delta region. Also we noticed in the course of the report, projects that had started and gone halfway before EIA reports were released. Our conclusion in this regards is that there’s no requirement that EIA reports are integrated into serious decision-making on resource development.”

The report itself declares:

  • In the period under review, two critical pieces of legislation that could have strengthened the ability of government agencies to enforce regulations were denied assent by the President of Nigeria—PIGB and the National Oil Spill Detection and Response Agency (NOSDRA) Amendment Bill. PIGB recommended the establishment of a new regulator, the NPRC, charged with regulating the entire industry, effectively replacing the current Depatment of Paetroleum Resources (DPR); while the NOSDRA Amendment Bill emphasised increased enforcement of fines and penalties for polluters, as well as giving NOSDRA the power to enforce these penalties and fines and to inspect and monitor the decommissioning of oil facilities.

Henshaw said there was an opportunity created in the year 2017 when the Federal Executive Council developed the National Petroleum Policy. “That policy actually creates very far-reaching frameworks that ensures participation of local communities, unfortunately we haven’t seen it in the period under review take off”.

Mitigation

“While Nigeria’s EIA Act requires that project proponents present plans for mitigating adverse impacts of their proposed projects, there is no strong evidence indicating that, in taking decisions over resource projects, the government prefers the option of preventing costs over compensation and minimisation of such negative costs.

“In at least one instance (that of routine gas flaring), the government seems more inclined to impose fines and extend flare-out targets than to enforce its own flare-out dates. The capacity of government regulatory agencies to enforce sanctions and carry out their functions appropriately is grossly limited, principally on account of capacity and funding constraints.


OTC 2020 Postponed, May Take Place in August

The 2020 edition of Offshore Technology Conference has been postponed.
A key industrial conference that takes tens of thousands of attendees to Houston, in Texas State, United States, it was set to take place May 4-7, 2020.
But in a statement, organisers say they are trying to move the event to either August or September, largely due to the rapidly changing circumstances of coronavirus.
“Considering the rapidly changing guidance from governments and companies, OTC has chosen to postpone the conference,” a statement explains.
“In the coming weeks, OTC will be communicating with authors, speakers, exhibitors, and partners to develop the new plans and ensure the conference continues to provide a platform for energy professionals to meet and exchange ideas”, the organisers declare.
“Since 1969, OTC has been a reliable source of technology and knowledge sharing to propel the offshore industry forward. The conference has also been a key economic driver for the city of Houston and neighboring communities.

“By postponing rather than canceling OTC, we aim to preserve the significant work of the program committee and authors to prepare for this conference, as well as minimize the economic impact this decision has on businesses in Houston and throughout the industry”, the statement concludes.


LEKOIL Should Have Detected Fraud, Report Says

An independent committee established by the board of LEKOI, has concluded, among other things, that the Fraud perpetrated against the company “should have been capable of being detected by internal or external parties engaged to advise” on the transaction that led to the company being misled about a loan purportedly granted by the Qatar Investment Authority (QIA).

LEKOIL’s shares on the AIM section of the London Stock Exchange went on a nose dive when the company disclosed that a “loan agreement with the Qatar Investment Authority (QIA)” announced by the Company on 2, January 2020 was indeed false.

Following the discovery that the Facility Agreement had not been entered into with the QIA, but instead with certain individuals falsely purporting to represent the QIA, the Board established an independent committee of the Board to investigate the origination and execution of the Facility Agreement and steps which might reasonably be taken to retrieve monies paid in association with the Transaction.

LEKOIL will review her internal corporate governance guidelines following the results of the investigation into the origination and execution of the loan agreement earlier announced by the Company on 2, January 2020, purportedly with the Qatar Investment Authority (QIA).The Committee was supported in its review by Kroll Associates UK Limited (“Kroll”) acting as third-party forensic investigators. Advice was taken from Herbert Smith Freehills LLP, legal counsel engaged at the time of the Investigation, on discreet issues arising from Kroll’s work.

The results of the Committee’s Investigation:

  • The Facility Agreement was a part of a fraud perpetrated against the Company. The Facility Agreement, and the sums to be received by LEKOIL pursuant to it, are not legally binding.
  • There is no evidence of any complicity of any Lekoil Director or employee in the fraud.
  • The Chief Executive Officer (“CEO”) led the interaction and negotiations with the individuals falsely purporting to represent the QIA, on behalf of the Company, prior to ultimate approval being given by the Board to enter into the Facility Agreement.
  • The Company has a legal claim to recover the $450,000 paid to Seawave Invest Ltd and its principals, in its capacity as introducer of those falsely purporting to represent the QIA.
  • The Board only approved the execution of the Facility Agreement after a third-party global risk consultant engaged to undertake the due diligence investigation on Seawave, provided a report, based on public record search, that did not identify any “red flags” on Seawave or its principals.
  • The fraud, whilst relatively elaborate and sophisticated, should have been capable of being detected by parties engaged to advise on the Facility Agreement, internally or externally, prior to its execution.
  • The due diligence undertaken by the Company, including the above mentioned third-party due diligence report, prior to the signature of the Facility Agreement proved to be inadequate.

 


Lossmaking Tullow Changes its Executive Management

Centralisation of technical and non-technical expertise in London

Tullow Oil, reeling from a $1.7 Billion loss after tax, the largest since the 2014 crude oil price crash, announced several changes in its executive committee, with the Chief Executive the only position not yet filled.

Mark MacFarlane’s

Mark MacFarlane, (until now Executive Vice President) who fielded the difficult technical questions during the company’s emergency in December 2019, has been appointed as Chief Operating Officer with responsibility for the operated and non-operated businesses, including production operations and forecasting, with direct control of development, exploration and technical excellence across the Group

The company also hired Wissam Al-Monthiry, formerly of BP, as Ghana Asset Director, to manage integrated operations and commercial planning.

The new Head of Exploration is Amalia Olivera-Riley, formerly of Repsol and Exxon Mobil. She was Director of Technical Services and Director of Geosicence Specialists, E&P at Repsol, but, perhaps more crucially, she was Caribbean Basins Exploration Manager at the same company, just about three years ago.

In the new organisation, production of Ghana’s resources and sub-surface management will be centralised in London. MacFarlane, reservoir engineer by training and career trajectory, apparently ants to keep a close tab on the company’s most important asset.

“Executive Management of the Company changed; focused management structure put in place”, the company says in its 2019 Annual Report released March 12, 2020. “The recruitment of a new CEO is well under way with a final short-list being considered by the Board”

 

 

 


Resource Backed Loans Cripple African Economies

Severely impacted: Angola, Chad, Republic of Congo and South Sudan 

Several African countries suffer crippling debt levels, with resource-backed loans a contributing factor.

And yet many of these loans to governments, collateralized with oil or minerals, are shrouded in secrecy, according to a new report.

A resource-backed loan is a borrowing mechanism by which a country accesses finance in exchange for, or collateralized by, future streams of income from its natural resources, such as oil or minerals. Researchers from the Natural Resource Governance Institute (NRGI) considered 52 resource-backed loans made between 2004 and 2018, with a total value of more than $164Billion; 30 of them, with a combined value of $66Billion, were made to sub-Saharan African countries.

Of the loans to sub-Saharan African countries considered by the researchers, 53 percent of the amount borrowed came from two Chinese policy banks: China Development Bank (CDB) and the China Eximbank. Most of the remainder was provided by international commodity traders, mainly to Chad, Republic of Congo and South Sudan.

The reportResource-Backed Loans: Pitfalls and Potential, explores both the risks and opportunities the loans represent and offers policy recommendations that borrowers and lenders can implement to improve the practice, with a greater focus on borrowers.

“African leaders have often taken out these loans to help with their own short-term political ambitions, but their countries have ended up severely indebted and with the risk of losing collateral worth more than the value of the loan itself,” said Evelyne Tsague, an NRGI Africa co-director. “They should stop agreeing to such perilous deals, which are often negotiated by poorly managed state-owned enterprises that often bypass parliaments and national budgets.”

The report shows how loans from commercial oil trading companies are particularly problematic, with specific regard to loan terms and repayment difficulties. David Mihalyi, co-author of the report and senior economic analyst with NRGI, said: “These deals, sometimes labeled as oil advances, often resemble pay-day loans: they have short maturities, high interest rates and fees, and no commitments on how the money will be used. Countries should stay away from oil advances containing such harmful terms.”

Hidden from scrutiny

The Democratic Republic of Congo (DRC) was the only country covered by the report to have published a resource-backed loan contract, which it agreed with Sicomines (a joint venture with state-owned mining company Gécamines and a consortium of Chinese companies) in 2008. However, 12 years after it was signed, and five years since the related copper and cobalt mining started, there is no comprehensive, publicly available information about the resulting funding for infrastructure or the repayment plan.

The 2008 contract exempted Sicomines from tax payments until full repayment of the loan, a situation which violated the mining law at the time. The DRC’s parliament then approved a special law for the exemption. The revised mining code of 2018 increased royalties and taxes for mining companies with an aim to increase revenues, but officials have stated that companies with a special “convention de collaboration” like Sicomines do not have to comply with the code.

“There is so much at stake for African economies and communities with resource-backed loans, but there is very little accountability and transparency and that has to change,” said Silas Olan’g, NRGI Africa co-director. “Borrowers and lenders must allow for greater scrutiny to ensure that these loans are sustainable and serve the interests of the people and the countries they are supposed to benefit.”

Crippling levels of debt

The report details how excessive debt has landed many African countries in economic crisis.

It follows a warning by the World Bank about crisis-level debt in emerging and developing nations, and identifies four African countries where resource-backed loans have contributed significantly to severe debt problems: Angola, Chad, Republic of Congo and South Sudan.

As oil prices dropped in 2014, Congo’s debt spiraled from 70 percent to 120 percent of GDP. The government only revealed to the public that it had taken these loans once it had difficulties servicing them. The country now owes more than $9.5 billion in public debt and the IMF is withholding loans while the Republic of Congo is in dispute with commodity traders over the repayment.

The latest IMF report for the DRC stated that the liabilities from the Sicomines project represented almost 40 percent of the country’s total external debt.

Corruption risks and poor governance

Of the eleven sub-Saharan African countries that took out resource-backed loans, eight received poor or failing scores on the Resource Governance Index, which includes among its assessments measures of transparency and accountability of countries’ resource sectors.

Angola, which took out the largest amounts of resource-backed loans in Africa, is currently mired in a large-scale corruption case involving its state-owned oil company, Sonangol. And the Republic of Congo was embroiled in a major scandal involving representatives of a commodities trading giant bribing public officials to gain access to its oil markets.

Potential for improvement

The report is not wholly critical of resource-backed loans. The authors highlight how borrowing countries obtain cheaper financing through the loans and can use them to generate economic returns that in the long term exceed their financing costs. The report also finds that countries have successfully renegotiated for improved loan terms.

However, given the largely negative experiences documented in the report, NRGI advises government officials to be cautious in agreeing to resource-backed loans and to institute safeguarding measures. These are outlined in the report as policy recommendations and include: ensuring that key loan terms are vetted by ministries of finance and available to the public; obtaining flexibility of repayments; “shopping around” with a variety of lenders to optimize terms; and employing legal experts for contract negotiations.

Authors also note that there have been positive developments in the global loan landscape. China has issued debt sustainability guidelines for borrowers. Recent steps taken by the Extractive Industries Transparency Initiative, the IMF and others have improved the transparency norms applicable to resource-backed loans.

Mihalyi concluded: “There have been improvements but there is a long way to go, especially as these commitments are yet to become standard practice. Both borrowers and lenders share a common interest in avoiding bad loans. We must learn from the mistakes made in the past. All parties to resource-backed loans should be transparent and accountable and push forward together to find more sustainable solutions.”

The analysis in the report relies on data collected by NRGI as well as the Inter-American Dialogue at the Boston University Global Development Policy Center and the Johns Hopkins SAIS China-Africa Research Initiative (CARI). 

 


Chinese Virus Stops A Pipeline Construction in West Africa.

Plans for construction of the crude evacuation pipeline from Niger Republic to the Seme Port in Benin Republic has been halted on account of the Coronavirus, which has killed close to 3,000people and infected over 80,000 around the world.

The Chinese CNODC (a JV of China National Petroleum Corporation CNPC and Petrochina, was forced to stop the construction of the 2,000kilometre pipeline, barely a month after it received the required construction permit from Niger’s government.

The instruction to hold up construction came from the contractor itself, for fear of coronavirus spreading amongst the staff as it could not guarantee that newly-arriving specialists from China would not be carrying the virus into Western Africa.

The line was expected to be commissioned in early 2022, and was planned to evacuate crude oil from the CNPC. operated Agadem field to the Atlantic coast.

 


What Should A Good Petroleum Industry Bill Look Like for Nigeria?

Adeoye Adefulu of the NBA’s Section on Business Law

 

 

 

 

 

 

 

Timipre Sylva, Nigeria’s Minister of State for Petroleum recently announced that the National Assembly will pass the Petroleum Industry Bill (PIB) by the middle of 2020.

He is the 7th Minister/Minister of State for Petroleum, since the first version of the Bill was placed before the National Assembly in December 2007, who has announced the imminent passage of the PIB.

Given the close working relationship between the Executive and the National Assembly in this dispensation, the omens look good for a speedy passage of the Bill.

That is why it is important at this point to consider what kind of PIB needs to be passed. In this brief paper, we contemplate this question using the framework of the Nigeria Natural Resources Charter (NNRC).

 A-The NNRC Precepts & Regulatory Reform

The NNRC implements the Natural Resource Charter (“NRC”). The NRC “is a set of principles intended for use by governments, societies, and the international community to determine how best to manage natural resource wealth for the benefit of current and future generations of citizens.” The Charter has 12 precepts which address different policy issues and areas to govern the petroleum industry of a country successfully.

  1. Strategy, Legal Framework& Institutions
  2. Transparency & Accountability
  3. Exploration, Licensing, and Monitoring Operations
  4. Taxation and other Company Payments
  5. Local Impacts
  6. State-owned Enterprises
  7. Investing for Growth
  8. Expenditure Volatility
  9. Public Spending
  10. Private Sector Development
  11. Role of Extractive Companies
  12. Role of International Community

Five of the twelve precepts lend themselves to the exercise of considering the elements of a good PIB:

Precept 1 – Strategy, Legal Framework & Institutions;

Precept 3 – Exploration, Licensing and Monitoring Operations;

Precept 4 – Taxation and Other Company Payments;

Precept 5 – Local Impacts &

Precept 6 – State-owned Enterprises.

  1. What Should A Good PIB Look Like, Using the NNRC Framework as A Guide to Reform?
  2. Clear Legal Framework, Strong Regulator (Precept 1)

The institutional framework of Nigeria’s oil and gas industry is a central plank of the proposed PIB reforms. NNRC’s Precept 1 seeks to link Nigeria’s overall national strategy for the oil and gas industry to the legal and institutional frameworks which underpin them. The Precept states that “resource management should secure the greatest benefit for citizens through an inclusive and comprehensive national strategy, clear legal framework and competent institutions. A good PIB must ensure that:

  • The rights and obligations of the stakeholders in the oil and gas industry are clear and fair;
  • It clarifies the mandate of the regulator;
  • Provides for qualifications for staff and members of the regulatory commission;
  • Designs proper governance mechanisms;
  • Provides the regulator with the tools required to achieve its objectives; and
  • Mandates mechanisms to enhance transparency in the operations of the regulator.

2. Transparent Licensing System (Precept 3)

One of the important elements of the anticipated PIB is the licensing system for the oil and gas industry. The NNRC presents a useful framework to assess a good licensing system. The new licensing system must address the process for awarding oil and gas licences in the first place. A good PIB would:

  • Clarify who is responsible for awarding licences.
  • Provide a framework for the transparent award of licences.
  • Limit discretionary powers in the award of licences.
  • Outline the process for screening license applicants; and
  • Provide legal backing for periodic license rounds.

Beyond the award of licenses, a good PIB also needs to address how the licences awarded are monitored. In this regard, the PIB should:

  • Provide for clear legal rights and obligations for the licensee.
  • Empower the regulator to monitor the licensee’s performance under its licence through, amongst others-

– Appropriate funding.

– Capable personnel.

Finally, the PIB must also ensure that the rigours applicable to the award of licensees are also extended in its regulation of the transfer of licences to fresh licensees.

 

3. Commercial NOC With Clear Objectives (Precept 6) 

The National Oil Company plays an important role in the development of the oil and gas industry. Historically, the Nigerian National Petroleum Corporation (NNPC) has statutorily exercised both regulatory and commercial functions in the Nigerian oil and gas industry.

Over time, its formal regulatory roles have receded. The Corporation however remains very influential in the regulatory and policy space but has faced challenges in its commercial role in relation to governance, funding, transparency and accountability. The PIB offers an opportunity to reform the NOC and ensure that it provides more value for Nigerians. A good PIB will:

  • Streamline and clarify the objectives of the NOC;
  • Put in place a robust governance framework;
  • Ensure the NOC is able to appropriately fund its activities;
  • Subject the NOC to independent financial audits which are published; and
  • Allow for private sector investment in the Corporation.

4. Fiscal Framework Which Provides an Appropriate Balance for Development (Precept 4)

Precept 4 of the NNRC focuses on how to secure government revenue in a sustainable manner. It states that “Tax regimes and contractual terms should enable the government to realise the full value of its resources consistent with attracting necessary investment and should be robust to changing circumstances”. Under this framework, critical issues for PIB reform considerations include;

  • The mix between royalty and tax in the fiscal framework;
  • Whether royalties should apply to gas;
  • What are the most effective incentives to ensure sustainable investment;
  • Sunset provisions for incentive programmes;

5. Sustainable Development… for The Environment & The People (Precept 5) 

The NNRC recognises that the development of natural resources may have both positive and negative effects on the country and its people. It promotes the explicit recognition of the potential adverse effects of oil and gas development and their mitigation. A good PIB will:

  • Provide for social impact assessments before the commencement of oil and gas projects;
  • Strengthen the capacity of regulators to monitor environmental aspects of the oil and gas industry; and
  • Provide a framework for sustainable local community benefits.

6. Concluding Remarks

The passage of the PIB offers the opportunity for a fresh lease of life for Nigeria’s oil and gas industry. It is not however enough to pass a PIB, the National Assembly must pass a good PIB. The points highlighted above offer some ideas from the NNRC, which should be incorporated into the Bill. There are several other issues which must be addressed.

Text of an address by Adeoye Adefulu (Ph.D), on behalf of the Section on Business Law(SBL), Nigerian Bar Association, at the launch of the 2019 Benchmarking Exercise Report (BER) of the Nigerian Natural Resource Charter.


CGG Ends An 88 Year Journey in the Mahgreb

The company’s history started as an acquisition company in Africa…its acquisition business ended on the continent

Africa was the last staging post for CGG, once the world’s largest geophysical company, to deploy its seismic acquisition technology.

After completing the land seismic acquisition in Tunisia, the Paris headquartered firm wound down its entire seismic acquisition business.

CGG had much earlier announced the winding down of the seabed and marine data acquisition.

“The exit from our seismic data acquisition business, one of CGG’s long-standing historic areas of expertise, marks the end of an era”, says Sophie Zurquiyah, CEO of CGG

Founded in France in 1931, the company’s first work opportunity was in the wetlands of West Africa, in 1932.

Between then and 1940, Africa was CGG’s main site of activity. It could be said that the continent provided the pilot grounds for its earliest technologies, in acquisition.

For a considerable number of years, this French founded company was the market leader in everything geophysics, outside of the wellbore.

But the times are a-changing. Since 2012 the company had been in the red.

Indeed, it is the full 2019 results, coming up at the end of this quarter, that are expected to announce the company’s first return to black in eight years.The company anticipates a positive Net Cash Flow around $185Million and year-end 2019 Net Debt to be around $584Million. The Group’s Liquidity is expected to be at $611 million at the end of December 2019

“CGG 2021 strategic vision to transition to an asset-light people, data and technology company. It secures the future sustainability of our business and provides a strong platform for organic growth,”says Sophie Zurquiyah, CEO of CGG

 

 

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