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AfrOil PiPElinEs & tRansPoRt AfrOil
Bunkering and the Nigerian army
nigERia
NIGERIA’S armed forces remain involved in large-scale oil the and re ning, according to a discussion paper produced by Transparency International and the Civil Society Legislative Advocacy Centre (CISLAC). The two NGOs carried out research in the rst half of 2018, in Bayelsa, Cross River and Rivers states.
Reports of payments being made to military personnel to secure “tapping points”, where oil is illegally li ed from pipelines, are widespread. In Cross River, for instance, extraction points are less than a kilometre from the Naval Base NNS Victory and an army training school.
This “suggests, at best, awareness of the schemes and at worst, active participation”, the report said. It went on to cite some focus group participants as saying they had seen Joint Task Force (JTF) members “being closely involved in oil the from the [Nigerian National Petroleum Corp.] NNPC pipeline, and receiving a share of oil products in return for providing cover and protection”.
e JTF is charged with securing the Niger Delta and tackling illegality, including artisanal re ning operations. While the force does sporad- ically destroy sites, this is seen by participants in the industry as a show of strength, intended to highlight the military’s ability to dictate terms in oil bunkering.
e report went on to quote a source in Port Harcourt as saying bunkerers moving products through military checkpoints could pre-pay in order to be able to move unhindered. ere appears to be a uniform price – of about 1,000 naira (US$2.8) per drum – suggesting a degree of co-ordination across the states.
A failure to pay o security is seen as highly risky, it continued. It cited one interviewee as say- ing “It is impossible for any person to transport even a drop of product on these rivers without rst getting the understanding of the military. Nobody will expose his investment to that type of risk. ere is no hiding, they will nd you and the punishment for trying to bypass them is that your produce and the boat will be burnt. Even before the boatman agrees to give you his boat to carry product, the rst question is, “have you settled security?””
The CISLAC and Transparency Interna- tional report comes as Shell Nigeria has been complaining of the impact of oil theft on its business. A spokesman for the company, speak- ing at a workshop in Lagos last week, said “the repeated sabotage of recently repaired pipelines exposes the environment and people to renewed and worsening pollution. Oil the is focused on short term scal bene ts, ignoring the long-term e ects of environmental degradation.”™
invEstmEnt
Egypt, Israel settle gas differences
EgyPt
A deal between two Egyptian state-run com- panies and Israel Electric Corp. (IEC) looks set to resolve the two countries’ dispute – and pave the way for gas trade to pick up. A Reuters-re- ported statement from Egyptian General Petro- leum Corp. (EGPC) and Egyptian Natural Gas Holding (EGAS), on June 16, said they would pay US$500 million to IEC over eight and a half years.
Under this agreement, IEC is expected to drop all remaining claims against the Egyptian companies.
e settlement appears to have been amicable and is a major win for Egypt, which had faced a bill of US$1.76 billion, following an Interna- tional Chamber of Commerce (ICC) ruling, in December 2015. IEC had applied for US$3.8 billion.
EGPC and EGAS had opposed the ICC nd- ing, saying the decision demonstrated overreach on the part of the tribunal.
e dispute arose in 2012, when Egypt was
struggling to meet domestic demand and satisfy its foreign obligations. e Egyptian companies terminated the gas sales agreement in April 2012, although shipments had been declining for some time. is came as terrorism was on the increase in the Sinai, with a number of attacks reported on the Arab Gas Pipeline. e pipeline has capacity of around 7 bcm per year, with the potential to increase to 9 bcm.
IEC has been showing signs of taking a so er tack on Egypt for some time. Reports in the Israeli press, in April, said the company had decided to push for a reduced amount, accept- ing US$500 million over the eight and a half year period. IEC approved the deal at the end of Janu- ary and disclosed it in early April, the company’s reports for the rst quarter said.
e deal, IEC said, “is in the best interests of the electricity consumers”.
IEC said US$60 million would be due on completion of the agreement. In its rst quar- ter report, the company said the Companies
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w w w . N E W S B A S E . c o m Week 24 18•June•2019