Benin Disco’s Headache

Olugbenga Obadara

THE Senate Committee on Commercialisation and Privatisation on Tuesday, August 5, is excited by Benin Electricity Distribution Company, BEDC’s move to inject the sum of $265 million into the firm’s operation. It said that would lead to its monumental growth as well as bring value to its numerous customers. The committee made the remark during its assessment tour of the company’s operations in Benin, Edo State.

It noted that the private investor had increased electricity distribution to the customers since it took over the company on November 1, 2013. Senator Olugbenga Obadara, chairman of the committee, decried the level of electricity theft among consumers, equipment vandalism and the reluctance of some communities to pay their electricity bills, adding that the Senate would encourage the BEDC to make the financial commitment to check some of the challenges.

Obadara, who commended the company for creating a convenient way of relating with its various customers, however, urged it to employ efficient and diplomatic measures for the collection of electricity bills. “I believe that the $265m that the BEDC promises to bring into the company is a monumental development, and it will lead to phenomenal growth. We want to encourage them to do it because there is a lot of power theft and vandalism; it is a big problem,” he said.

The committee chairman stated that the Senate was aware that the challenges facing the electricity company were enormous, but that they were surmountable. He stressed the need for the company’s estimated 200,000 consumers to pay their bills promptly. Obadara stated that Nigerians were expecting great improvement from the new investors that took over the 17 distribution companies in terms of availability of power in the country.

He said the citizens wanted to see huge investments by the buyers, because in the first instance, the government saw that it could not meet up with the investment needed to ensure steady electricity supply. Obadara said the committee’s visit was to encourage the investors to do what was needed and to ascertain the level of conformity with the agreement they signed with the government prior to taking over the companies.

Shell’s Summit for Journalists

SHELL Petroleum Development Company has asked for the support of the media and other critical stakeholders in addressing the menace of oil theft, sabotage, spills and other related crimes with attendant negative effects in the Niger Delta. At a recent summit organised for newsmen and other stakeholders in Yenagoa, Bayelsa State, Shell said the menace has remained unabated in the region. The firm believes that only a concerted response by all stakeholders can end the oil theft and related atrocities in the region.

In his lecture, Wenike Princewill, manager, pipeline right of way management, said crude oil theft and illegal refining were the main sources of pollution in the Niger Delta. He added that the federal government “loses an estimated 300,000 barrels of oil per day to oil theft and deferment of crude oil export to the global market.” He explained that intentional third party interference with pipelines and other infrastructure was responsible for about 75 percent of oil spill incidents and about 92 percent of oil volume spilled from facilities operated by Shell over the last five years.

Mutiu Sunmonu, MD, Shell Petroleum Development Company
Mutiu Sunmonu, MD, Shell Petroleum Development Company

According to Princewill, when the losses were converted into money, the country must be losing approximately $3.2 billion per day at $100 per barrel. “Much greater volumes of oil are discharged into the environment away from the SPDC facilities through illegal refining and transportation of stolen crude oil. In 2013, the number of spills from the SPDC operations caused by sabotage and theft increased to 157, compared to 137 in 2012, while production losses due to crude oil theft, sabotage and related temporary shutdowns increased by around 75 percent. On the average, around 32,000bpd was stolen from the SPDC pipelines and other facilities while the joint venture lost production of around 174,000bpd due to shutdowns related to theft and other third party interference. This equates to several billions of dollars in revenue losses to the Nigerian government and the joint venture,” he said.

Princewill said the ugly development called for collaboration with the media and non-governmental organisations to discourage people from encroaching on pipelines. He said Shell had its huge footprints in Niger Delta, with Rivers and Bayelsa States having high scope of oil exploration. For this reason, he said, there was a high incidence of encroachment on Shell’s right of way.

However, he said Shell, in a bid to make it difficult for oil thieves to operate, had resorted to burying pipelines deeper and covering them with concrete, adding that despite those efforts, the menace of oil theft and sabotage had persisted, with long term social, economic and environmental degradation.

On leakages, he said Shell had a deliberate policy that whenever it confirmed a leak, it usually suspended production in order to stop the flow into the environment. He noted that efforts have been made to contain spills, with access to spill sites usually a critical factor in shaping the response. “There have been instances where individuals, community groups or armed gangs have denied Shell access to spill sites. The reasons for this range from intra-communal disputes to demands for clean-up contracts and/or higher compensation or plain criminal activity.”

Oil Workers Kick Against Enslavement

THE Nigerian Union of Petroleum and Natural Gas Workers, NUPENG, and the Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, have petitioned the federal government over alleged anti-labour activities by Nigerian Agip Oil Company and Plantgeria, accusing both organisations of trying to frustrate their members and undermine Nigeria’s Local Content Act.

The petition to the minister of labour and productivity was signed by Godwin Eruba, chairman, NUPENG, Port Harcourt Zone, and Azubuike Azubuike, chairman, PENGASSAN, Port Harcourt Zone. The two unions said they would resist any attempt by the organisations to enslave its members and also deny them freedom of association. “We are compelled to bring before your exalted office, a situation that is seriously affecting our members working for Arco Petrochemical Limited, a company providing maintenance service contract in the OBOB/Kwale/Ebochasaid location of Nigeria Agip Oil Company Limited, NAOC, operation under a third party arrangement.


“All verifiable information confirms to the Union from our investigations that the National Petroleum Investment Management Services, NAPIMS, as a regulatory government agency saddled with the responsibility of bidding process and awarding contract in the oil and gas, among others, has awarded a Stop-Gap contract to Arco Petrochemical Limited, where our members are working for years in NAOC facilities on the same project while the main bidding process is yet to be concluded. To our greatest surprise, NAOC has rebuffed the award made by NAPIMS and insisted on plantgeria company for replacement of Area petrochemical Nigeria Ltd. even when NAPIMS is yet to favourably consider Plantgeria company commercially and technically proven.

“From our findings, NAPIMS has reaffirmed their stance that NAPIMS will not support any cost expended outside their recommendations by NAOC on the maintenance service contract for gas turbine and related equipment for OB/OB, Ebocha arid Kwale Gas Plants arising from NAOC execution of such contract with Plantgeria. It is important to note that Plantgeria, as a company, is not union-friendly, this company has resisted NUPENG and PENGASSAN hinging on economic activities of providing logistics while executing maintenance contract in the oil and gas sector, contrary to the guidelines on Contract Staffing and Labour Administration and other extant Labour laws in Nigeria.

“Plantgeria has gone ahead, even in the midst of the controversial circumstance to inform our members currently working for Arco Petrochemical, who are expected to be rolled over to Plantgeria based on the NAOC instructions on using competent hands in manning of the plant, that if our members are rolled over they are to sign an undertaking with Plantgeria not to join any union and 60 percent of the workers will be dropped against NAOC directive. It is our utmost belief that based on the antecedents of Plantgeria, they are committed towards enslaving Nigerians and continually deny them of freedom of Association which the Union is ready to resist at all costs.

“Our prayer is that you use your good office and intervene in this matter between NAOC and NAPIMS in order to restore synergy as to save the employment of our members who have worked on NAOC facilities for over twenty years continuously under a third party arrangement. The two Unions – NUPENG and PENGASSAN have resolved that if Plantgeria Company finally scales the hurdle and executes its plan to unleash on our members who have laboured for years working for NAOC, the Union is ready to match words with actions to fight this neocolonialism which Plantgeria is spreading in the oil and gas sector. As an organized labour, we believe that your quick intervention will save our members who have found themselves between the rock and the deep blue sea. It is obvious that by the end of July 2014, the job of our members may not be guaranteed based on NAOC resistance to NAPIMS directives.”

Compiled By Anayo Ezugwu

— Aug. 18, 2014 @ 01:00 GMT


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