Tuesday, July 12, 2016

Aliko Dangote plans to end Nigeria's gasoline problem

A plan by Africa's richest man to transform one of the continent's largest oil industries is taking shape on a swampy piece of land outside Nigeria's commercial capital, Lagos.

Nigerian industrialist Aliko Dangote is constructing a refinery that has the capacity to turn 650,000 barrels of oil into gasoline, diesel, kerosene and jet fuel — enough to potentially satisfy all the country's daily needs.

When completed, it could end Nigeria's reliance on imported gasoline and diesel.

A weeks-long shortage of imported fuel that occurred earlier this year is one reason why economists believe Africa's biggest economy is poised to enter a recession.

"By and large, you are looking at the future of the country," Dangote, who made his $14.4 billion fortune from his sugar, flour and cement companies, told journalists during a visit to the construction site of the refinery and adjoining fertilizer plant.

When Nigerians go to the pump, they're usually filling up with imported gasoline and diesel. The country has four refineries, but they barely work, so Nigeria exports its crude and buys back the fuel it needs.

Disputes and strikes have periodically led to disruptions in fuel importation, leading to shortages across the country.

By refining oil at home, Dangote says importation will end.

"I mean, it's simple, you have it here. As you're producing, it's going into the market," he said.

Supply and demand

Nigeria is Africa's largest economy and most populous country. Those aspects may ultimately undermine Dangote's ability to serve the country's fuel needs, said oil and gas analyst Bala Zakka.

Nigeria doesn't produce enough power to keep the lights on all the time, and those who can afford it rely on gasoline or diesel generators.

As the population grows, Zakka says demand may outstrip supply.

"Strategic domestic, strategic commercial and strategic industrial are being run on generators. And those generators will require so much diesel and petrol. And that will mean we will not have even enough for the automobiles," Zakka said.

Another problem Dangote may face is oil supply. Pipelines are targets for oil thieves and, more recently, organized militants. Attacks by a group calling itself the Niger Delta Avengers have cut Nigeria's oil production by as much as half.

Refinery administrators have cited pipeline attacks as one reason they can't produce enough gasoline.

Dangote plans to build the pipeline supplying oil to the refinery underwater, in hopes that will keep saboteurs away. He also plans to build two natural gas pipelines to feed power plants.

If Dangote's refinery pays off, Zakka said it will be a signal to other refiners that Nigeria is ready for investment.

"I wouldn't want to say he's a guinea pig, but Dangote is definitely going to be a pilot test," Zakka said.


Monday, July 11, 2016

Video - Nigeria track and field team beset by funding problems



Nigeria has concluded its Olympics trials in the track and field event and now looks forward to the main event in Rio. That's despite a cloud hanging over the country's participation, over a lack of funding. The trials took place in the town of Sapele in southern Nigeria.

Video - Growth in elderly population raises concerns



Nigeria's population is expected to hit 440 million by 2050, 30 million of that growth would be made up of people of 60 years and above-adding to a growing lot vulnerable groups like children and physically challenged. CCTV's Kelechi Emekalam takes a look at care for the elderly in Africa's most populous nation.

Militants are devastating Nigeria’s oil industry again

There’s a new group attacking Nigeria’s oil industry — or, at least, claiming responsibility for the attacks: the Niger Delta Avengers (NDA). The NDA started threatening attacks at the start of 2016. Since May, pipelines, oil wells and other infrastructure have been exploding regularly, cutting Nigeria’s oil production by nearly one-third, from 2.2 million to 1.5 million barrels per day. President Muhammadu Buhari at first responded with tough talk — but now has resorted to begging the attackers to stop hurting the economy.

But the NDA’s attacks are only the most recent symptoms of the region’s longstanding problems. To understand the resurgence of violence, we need to examine the history and unrest in the Niger Delta.

What is the history of violence in the Niger Delta?

Armed militancy is only one part of the Niger Delta’s complex web of violence, as I found in my research. There’s rebel insurgency against the Nigerian state and multinational oil companies, such as that of the NDA. But there’s also political violence, gang rivalries and violent inter- and intra-communal conflicts. Politicians seeking political power mobilized and armed young men to intimidate opponents during elections when Nigeria returned to democratic rule in 1999. Competition by rival youth gangs led to violent confrontation in such cities as Port Harcourt. Leadership tussles in communities led to violence. When local goverments’ administrative headquarters were relocated, historical rivalries between ethnic communities reignited, leading to violence. My research found that the different forms of violence intersect.

Some groups involved in those internecine skirmishes transformed into groups rebelling against the government’s absolute control of the oil industry — and gained power by doing so. The groups that emerged claimed to represent the grievances of local communities against oil companies and the Nigerian government. These grievances include how local communities were marginalized as oil revenues were distributed; a failure to develop infrastructures in the area; and few or no oil job opportunities for locals.

Notably, in the 2000s, the Movement for the Emancipation of Niger Delta (MEND) and other militant groups organized attacks on oil industry infrastructure. In doing so, the militant leaders gained more regional power and influence. Militant groups targeting oil industry infrastructure made the rebellion the key problem of the Nigerian government and oil companies in the Niger Delta.

The Nigerian government sent in its military to fight the rebels. Oil companies also used government forces to secure some locations. Apart from these military strategies, oil companies contracted with militant leaders or their proxies to protect their facilities — turning militancy into a high-end extortion racket that paid off.

Politicians similarly patronized armed militants during elections. In fact, one governor signed an accord with militants in his state at the peak of the insurgency. To secure their new positions of power in politics and the oil industry, militant leaders got rid of potential challengers in their communities, suppressing other would-be militant groups.

Despite the patronage, the militants occasionally attacked oil installations. They justified those attacks as an expression of the grievances of the Niger Delta people against the oil companies and the state, particularly at the lack of development. By doing so, they stayed relevant in their local communities and stayed visible in the media. My research found that in some cases, militant leaders used cash gained from militancy to help support non-militants in their communities.

How did the first insurgency end?

While president from 2007 to 2010, Umaru Yar’Adua initiated a peace process that was supposed to help the entire Niger Delta. The government promised to build roads, schools, hospitals and other community infrastructure and offered a process involving amnesty, disarmament, demobilization and reintegration for ex-militants.

This Nigerian government peace process became the most expensive such program in the world. Ex-militant fighters received monthly stipends averaging $400 and were enrolled in costly reentry and job training programs, both in Nigeria and overseas. The government also awarded contracts worth millions of dollars to ex-militant leaders to protect oil infrastructure — further amplifying those leaders’ power over both the oil industry and other parts of the economy.

But the peace process focused mainly on armed militants — and ignored the local violence that those militants had been controlling lest it threaten their newfound power. That oversight continued when Goodluck Jonathan replaced Yar’Adua as president in 2011. As a result, Nigerians learned that militant violence would be rewarded — and the only people who would benefit from any peace would be the militants and the politicians involved in distributing the peace process’s largesse. It was a corrupt bargain all around.

Nevertheless, the system did keep the Niger Delta region stable for five years.

What accounts for renewed violence?

But in 2015, Buhari’s government not only called an end to the ex-militants’ security contracts, but also started investigating some prominent militant leaders for alleged corruption. His government has also cut the reintegration plan’s budget — thus reducing payments for ex-militant fighters. He has also canceled one of his predecessor’s few development efforts, the construction of a maritime university that was supposed to create education opportunities and jobs for the local population in the maritime industry. Many locals see the cancellation of this university as an attempt by Buhari to deny the region development and educational opportunities. This is also the opinion of ex-militant leaders who claim to be acting in the interest of the local people.

Buhari disrupted the uneasy balance of patronage and power that sustained peace in the Niger Delta. And so the conflicts have begun flaring up again. And so has the anti-oil insurgency.

The NDA has claimed responsibility for most of the attacks in Delta State, but other new groups, such as the Red Scorpions, have emerged as well — and more may be proliferating

Why?

First, ex-militant leaders displaced by Buhari’s policies may be using violence to renegotiate with the state. Second, those with a history of violence but who hadn’t gotten any of the peace process’s dividends are now competing for the next round of protection money.


Friday, July 8, 2016

Video - Shake up in Nigeria’s petroleum sector to revitalize oil & gas sector



Nigeria's President Muhamudu Buhari recently removed his petroleum minister Ibe Kachikwu as group managing director of state owned NNPC. Kachikwu would now chair a newly reconstituted board that will oversee the management of NNPC. 70% of government revenue comes from oil and gas exports managed by NNPC but the institution has been variously accused of being opaque and inefficient.