The Nation Newspaper

Category: Energy

  • NNPC to depots: don’t sell petrol above N133.28/litre

    The Nigerian National Petroleum Corporation (NNPC) has warned depot owners or terminal operators not to sell Premium Motor Spirit (PMS), otherwise called petrol, above the official ex-depot price of N133.28k per litre.

    The Corporation also cautioned petroleum products marketers not to sell the product above N145 per litre.

    Ex-depot price is the ceiling at which depot owners or terminal operators sell products to marketers, while the pump price of a product is the amount consumers buy it from fuel stations.

    READ ALSO: NNPC pledges commitment to gas development

    A release yesterday in Abuja by the corporation’s Group General Manager, Group Public Affairs Division, Mr. Ndu Ughamadu, said the subsisting ex-depot petrol price of N133.28k per litre was consistent with the Petroleum Products Pricing Regulatory Agency’s (PPPRA) template and should be adhered to.

    Ughamadu stated that NNPC held stock of over 1billion litres, adding that imports of 48 vessels of 50million litres each have been committed for the month of April alone.

    He advised Nigerians to remain vigilant and volunteer information to the Department of Petroleum Resources (DPR), the Industry regulator or to any law enforcement agency around them, on any station which sells petrol beyond N145 per litre.

  • USTDA satisfied with Eko Refinery&Petrochemical

    The United States Trade and Development Agency (USTDA) is impressed with the progress made in the Eko Refinery and Petrochemical Company Limited.

    It commended the management for the level of work done so far, assuring of its continued support.

    USTDA’s Acting Director, Thomas Hardy, made the commendation during the inspection of the 20, 000 barrel per day production capacity modular refinery project at Tomaro Island, Amuwo-Odofin Local Government Area of Lagos.

    Hardy said the agency is impressed with the level of activities done so far on the project, saying “we will continue to help in sourcing for financiers through companies in America that will support the refinery project for speedy completion.

    “We are proud to support this project and this will lead to infrastructure development and economic growth in Nigeria. This project represents an excellent opportunity for U.S. businesses to export technologies and services to support refining goals of Nigeria,” he said.

    He said in 2017, USTDA invested in the engineering design of Eko Refinery and Petrochemical to make the vision of Capt. Emmanuel Ihenacho a reality.

    “The idea, which is expanding the petrochemical industry is bringing jobs into the Nigerian economy. Generally, strengthening the Nigerian economy became paramount by the success of this project,” he added.

    Hardy said the move by the U.S. Government was also to see a closer bilateral cooperation between the United States and Nigeria, saying  “most importantly, investing in private companies and leaders in the business community can move projects to generate jobs and growth in the Nigerian economy.

    “I am impressed with what I saw. When we got involved in the very early stage, we knew that there was going to be hurdles. So, we decided to invest and bring technical experts into Nigeria to help Iheanacho lay forth the plan he needed to move forward to get the finance to move this project for implementation.

    “This is exactly what we intended to do. Our investment is going to be making those connections to finance the project. Anything that can help him achieve his vision for Nigeria and growth of Tomaro Island is our goal right now,” Hardy said.

    USTDA Country Manager, Sub-Saharan Africa, Ms Shannon Roe, said the agency decided to visit the refinery because it was geared toward creating value in Nigeria. Roe said one of the reasons the agency came for inspection was to see the level of activities that have taken place since the last time we came in 2017.

    She also expressed the hope that the proposed 200,000 bpd production refinery would attract more investments to the country and develop the host communities.

    “The grant in 2017 was meant for detailed engineering design and development of the proposed refinery in Tomaro Industrial Park in Lagos. I feel honoured to be part of the success story. I also promise to support the projects to actualisation,” she said.

    Chairman, Eko Refinery and Petrochemical Company, Capt. Emmanuel Ihenacho, lauded the USTDA’s support to the development of the refinery. He said the agency had the mandate to help local companies and trading entities to develop contact with their equivalent counterparts in the US.

    He said the company had completed the planning stage, drawing-up of the feasibility map and detailed work on front end engineering, which met the Department of Petroleum Resources’ and US’s specifications.

    He said DPR had given the approval to construct, adding that “in the scheme of our current national priorities, the requirement to develop indigenous refining capacity on Nigerian soil is very high indeed.

    “Local refining capacity will allow us realise our ambitions with respect to import substitution potential, leading to great savings in scarce foreign exchange (forex) requirements.

    “Local refiners will facilitate the goals of value addition to our oil trade as well as lead to lower costs of consumed refined products in the country. We intend to have recourse to traditional and special funding sources in our search for investment funds for our refinery development project,” Ihenacho said.

    He said $120 million was expected to complete the refinery, adding that they were awaiting some firms that had shown interest in financing the project and handling the Engineering, Procurement and Construction (EPC) work.

    Ihenacho said the company would soon embark on the construction of the crude distillation unit, which will cost about $32 million. This will be followed by civil and other engineering structures construction, which will take about seven months.

    “We appeal to the Federal Government for support the actualisation of the refinery. We want to say to the government that what we are doing is absolutely unique and to tell them to try and understand the sacrifices we are making.

    “This is not about making money but to realise that Nigeria must move away from  being net consumers to  being refiners of the  product; to build people who can refine their crude and export and to generate more jobs for ourselves. It will also ease transfer of technology to our people and reduce the cost of energy consumed in the country.”

    He added that soon the ground breaking ceremony of the refinery would be done.

    The community representative, Chief Lamina Akinsode, said the 24 communities, including the Tomoro Island, supported the siting of the refinery. He said the project will bring development to their communities, adding that many youths in the community will be employed.

    He urged the USTDA to support the project for the growth and betterment of their communities.

    In 2017, the USTDA approved a grant of $1million (N360million) for the engineering design of the refinery.

  • FCDA, firm row over 500Mw power project

    The plan by Jehata Nigeria Limited to build a 500 megawatts (Mw)power generation  plant in Abuja may hit the rock, following objection by  the Federal Council Development Authority(FCDA).

    The firm (owners of Abuja Power Station) was accused of not  following     due diligence practice in its approach to the issue of building  the power plant by the FCDA.

    In a letter dated March 19 and made available to The Nation, Jehata Nigeria Chief Executive Officer/Managing Director, Jameel Jammal, accused the management of FCDA of delaying the siting of the plant.

    According to him, FCDA has refused to provide land for the project, seven and half years after the idea was mooted.

    He said the allegation of non-compliance with due process by FCDA was aimed at discouraging the firm from executing the project.

    Jehata Nigeria, Jammal noted,  wrote the FCDA to express its readiness to build the plant, adding that the letter was not treated.

    The letter read: “We, unequivocally, state that we do not understand what you mean by conducting ‘due diligence’ in our company. Recall that in the last seven years, we have been struggling with your office. The main issue is about FCDA allocating land to us (which we have opted to pay for) for the purpose of building a power plant and in those traumatic years. We, at Jehata Nigeria Limited, have given every conceivable piece of information to help your due diligence.”

    He added that his firm had earlier submitted some documents to FCDA as a proof of due diligence. The documents, he said, include Certificate of Incorporation of Jehata Nigeria Limited, the passport of its Managing Director, Jameel Jammal, his birth certificate, his firm’s tax clearance, letters of recommendation from the Federal Ministry of Power, and the Transmission Company of Nigeria (TCN), site verification by Federal Ministry of Environment and letter from Gas Aggregation Company of Nigeria (GACN).

    Others, he said, are Abuja Power Station Executive Summary and Drawings/Site plans.

    FCDA, however, countered Jehata Nigeria. A letter signed by the FCDA’s Director, Engineering Services, Shehu Hadi Ahmad, stated that the inability of Jehata Nigeria to follow due process slowed the building of the plant.

    He added that the delay in the construction was caused by Jehata Nigeria’s failure to address some administrative procedures. “I wish to express our regrets for the inadvertent delay in the process of your request, which arose due to some administrative procedures necessary to be fulfilled when dealing with such issue of eminent significance,” he said.

    FCDA, Ahmed said, was aware of the passion demonstrated by the firm to build a plant that would generate and inject 500Mw to the national grid and also boost supply of electricity to territory.

    The power sector privatisation in 2013 resulted in the splitting of the assets of the defunct Power Holding Company of Nigeria (PHCN) into the six power generation companies (GenCos) and 11 power distribution companies (DisCos). The development culminated in the application of embedded power plants by the DisCos to improve power supply to some areas.

  • Shell: why we signed contractor support fund with banks

    The Shell Petroleum Development Company of Nigeria Limited (SPDC) has said access to funds is a major challenge to local contractors that work for the oil giant and the establishment of the contractor support fund is to address that problem.

    In statement, the SPDC spokesman, Bamidele Odugbesan, noted that the memorandum of understanding (MoU), signed by SPDC and the United Bank for Africa (UBA) in Abuja, is a testament to the commitment of Shell to helping indigeneous firms offering services to deliver.

    The $200 million contractor support fund will boost the financial capacity of SPDC’s vendors and suppliers. SPDC’s Director and General Manager, Government and Business Relations, Bashir Bello, who signed the MoU with the United Bank for Africa (UBA), described the initiative as a product of the effort by SPDC and its joint venture partners, including NNPC, Total and Agip to enhance local content and local participation in the oil and gas value chain.

    The fund provides support for contractors to finance projects executed for Shell companies in line with the aspirations of the Nigerian Content Act. To access the fund, the contractors must have a purchase order and meet the bank’s risk assessment criteria. Lack of access to capital hinders many firms from competing for and executing contracts effectively,” said Bello, who signed for SPDC.

    “This funding will enable us to achieve our community content ambition of increasing participation of host communities in the SPDC value chain,” he added.

    The General Manager Energy Bank of UBA, Ebele Ogbue, said the bank was committed to providing support to firms through its partnership with SPDC JV. Ogbue, who signed for UBA, commended the national and community content efforts of Shell firms, noting that UBA was ready to provide the needed financial backing that would empower firms to play more active role in the country’s energy sector.

    The Shell Contractor Funding Scheme started in 2011 with the Shell Kobo Fund, which gave rise to the Shell Contractor Support Fund in 2012. The scheme has been redesigned to address the economic exigencies and to align it with stakeholder needs by merging the two initial initiatives.

    In 2016, Shell signed a $2.2 billion MoU with seven banks that have since then disbursed around $1.5 billion loans to about 372 small- and medium-sized Nigerian suppliers and vendors in the oil and gas industry.

  • ‘We are partnering to ensure power supply’

    Zola Electric and Sterling Bank have entered into a partnership to solve power problems.

    According to the two companies,  households and businesses suffer from lack or inadequate power supply and spend huge amounts to enjoy substantial electricity supply.

    Speaking during the signing of a memorandum of understanding (MoU) in Lagos to seal the deal, Zola Electric Chief Executive Officer, Bill Lenihan, explained the edge Zola has over its contemporaries, including the durability and cost-efficiency of the panels and batteries.

    Sterling Bank Managing Director Abubakar Suleiman assured of the bank’s readiness to fund purchase and installation of Zola solutions to Nigerians who cannot afford to pay  for the product so they can pay back in installments.

    Lenihan said: “We have a business model that will solve the energy problem of Nigeria. We have studied market for about a year and everybody wants the power problem in Nigeria solved. Over 2.2 billion people across the globe, including Nigerians, don’t have access to power and many other also don’t have access to reliable power supply and that is the problem we love to solve as an organisation.

    “Our mission is simple, to offer 24-hour clean energy. Today, we use our solution to solve power problems across Africa. In Nigeria, we want to solve the problems of those who have access to grid and unreliable power supply. Average households in Lagos have an average grid power supply of about between four and eight hours.

    “Our solutions are designed and built for purpose to your energy needs and economic situation. Every single home and business is treated in this way. It is autonomous with seamless interoperable integration with solar grid and generations with smart connected technology providing optimisation

    “Only Zola has a product offering that spans the 2.2 billion people that don’t have access to power. It provides power independence at your fingertips, power for purpose and scalable with customer needs. The software synchronises all power sources, controls frequency and ensures consistent, safe and reliable power. Our product offering is not just durable, it is a life-time solution”

    Suleiman said: “Zola is not another service provider that is leveraging solar. It is an energy solutions provider that can solve Nigeria’s energy problems. Nigeria’s energy problem is a crisis of great magnitude. It is important that we have that understanding. It is not a small crisis that a company, state government or ministry of power can deal with. It is something that has massive impact on any single person that does business in Nigeria. If you don’t solve the problem of power, you cannot solve the problem of unemployment, if you don’t solve the problem of unemployment, you don’t have the chances of solving the problem of security. Massive unemployment, this is one big problem of our time.

    “As a bank, this is one of our concerns, to solve unemployment but we cannot solve that without solving the problem of power. You cannot solve the power problems in millions of homes and business but can find a model that can help solve it, hence the partnership with Zola. I will not describe the challenges we face in power sector privatisation or the lack of investment in the grid, among others, those are major challenges. Some smaller countries such as United Kingdom have far more advanced grids because they invest heavily in them. Beside the problems of reliable power supply and unemployment, is the climate change challenge, which increasingly calls for adoption of clean energy.

  • ’90% informal sector operators battle power supply’

    Ninety per cent of the operators in the informal sector is unable to produce optimally, due to the poor power supply in the country, Renewable Energy Association of Nigeria (REAN) President Mr. Femi Adaju has said.

    He said the situation had worsened as generation drops to 4,300 megawatts (Mw) early this month, adding that the issue is affecting the economy, largely dominated by informal sector operators.

    He said operators, such as welders, hairdressers, launders, fashion designers, and mobile phone chargers, spend a bigger chunk of their capital  to provide alternative source of energy.

    Adajau, in a paper entitled: “The implications of power failure on the economy: Effects on the operators in the informal sector,” delivered at a stakeholders’ forum in Eko Hotel and Suites, Victoria Island, Lagos,  said the economy was struggling to survive because the sector were not recording enough growth.

    According to him, the sector is in dire crisis and requires the intervention of the stakeholders, including the Federal Government, to ensure that off-grid electricity is used. He said when solar, biomass and other off-grid methods of generating electricity is used, the effects of poor power supply would be minimal.

    Adaju said: “While it is obvious that the manufacturers and other formal operators are struggling to record growth due to the reduction in capacity utilisation of workers and other issues, operators in the informal sector are not doing well either. Informal operators spend huge amount of money on providing electricity through generators.

    “People who use smaller generators, known in local parlance as “I better pass my neighbour’’, spend between N1,500 and N2,000 to fuel their generators for between 10 hours and 12 hours daily. This is exorbitant in view of the bad economy. When N1,500 or N2,000 is multiplied by 30 days, it amounts to either N45,000 or N60,000 per month.

    ‘’Operators would not have spent such amount if the government and the private investors that bought the power assets of the defunct Power Holding Company of Nigeria (PHCN) five years ago had stabilised the sector.

  • PHRC bags first Africa’s ISO certification

    Port Harcourt Refining Company (PHRC) Limited, a subsidiary of the Nigerian National Petroleum Corporation (NNPC), has attained the International Organisation for Standardization (ISO) 9001:2015 Quality Management System (QMS) certification, the first by any refinery on the continent.

    The Managing Director of 3FM Solutions, Mr. Richard Omale, a Management Consulting Company, whose outfit conducted the QMS assessment, announced the milestone during a town hall meeting of the NNPC Group Managing Director, Dr. Maikanti Baru, with the refinery workers in Port Harcourt.

    Omale, who presented the certification to Baru, said: “PHRC has a lot to gain from sustaining its ISO certification. Apart from belonging to a global movement for improved standards, the certification would provide senior management with an efficient management process and set out areas of responsibility across the organisation, among other benefits.”

    According to Omale, people doing business with the organisation would also have the confidence that they are working with a reputable organisation that does not only have documented processes and procedures but also pays attention to continual improvement.

    The NNPC chief congratulated PHRC workers on the feat. He charged other NNPC subsidiaries to emulate the refinery by ensuring that they are up-to-date in their certifications in line with global standards.

    “ISO certifications don’t last forever. The onus is now on you to redouble your efforts and ensure the sustenance of this certification,” he said.

    The impact of PHRC’s latest certification meant that the company had to keep going through various audits by Bureau Veritas (BV) to ensure that its quality management system was reviewed and standardised based on the streamlined process and improvement plans.

  • Enyo chief praises govt on fuel distribution

    THE Federal Government has been praised for its effective petroleum products distribution in the last two years.

    Enyo Retail and Supplies Limited (ERS) Chief Executive Officer Mr. Abayomi Awobokun gave the commendation at the opening of the firm’s retail outlet, Enyo ‘Olowo Eko’ in Lekki, Lagos.

    According to him, the company commends the government for ensuring that there is no shortage of fuel.

    Enyo Olowo-Eko is designed to cater for over 4,000 customers daily. The station is equipped with both primary and secondary sources of electricity, adequate fire-fighting equipment, conveniences for public use and other amenities.

    Enyo Retail’s signature vehicle diagnostics and maintenance service known as Vehicon is available at this fuel station with state-of-the-art equipment to carry out varying arrays of car maintenance services for vehicles of almost all ages and types. In addition to this, customers will also benefit from the availability of Enyo Retail’s brand of cooking gas known as Superior Liquified Gas “SL-GAS” available in three different sizes to suit the demands of the different categories of customers that visit the station.

    Awobokun said: “We have not experienced any products shortage in the last two years and our affiliated company, Folawiyo Energy Terminals, is one of the biggest in the country. This has been very efficient and also able to cater to the industry demands in the retail market.

    “The government must be commended for how it manages the distribution of the products, while also continuing to explore deregulation. I don’t think deregulation should be rushed. I think it should be a journey that must be embarked upon carefully and intelligently.

    “So, I am very satisfied with the progress so far made. We must continue to move wisely and gradually towards deregulation.’’

    Awobokun said at Enyo Retail and Supplies, the company’s goal is to focus on expanding its distribution capacity to more states in the country and to continue to deploy affordable technology to bring consistent value to its customers.

    “We are investing profoundly in improving the customer experience at all our points of sales. Our primary determination is to deepen the customer services experience in the fuels retailing industry with the assurance to all customers that at our points of sales and filling stations, a litre is a litre.

    “We seek to be the most trusted brand in the Nigerian market. We are consistently investing in capacity development, sales infrastructure and in our supply value chain to achieve this goal.

    “As part of its future plans, Enyo Retail and Supplies aims to increase its footprints with additional ultra-modern filling stations. This will include a lifestyle space ranging from coffee shops and other amenities which will showcase the customer-centric nature of the organisation,’’ he said.

    Awobokun said about N8 billion had been invested in the downstream retail business with the aim of expanding the company’s market share in the downstream sub-sector of the oil and gas sector.He, however, reiterated the company’s commitment to Nigeria and outlined its achievements in less than two years of operation in the country.

    “We are about 18 months old. Our major investor is Folawiyo Energy and we have invested over N8 billion to build 56 retail stations across Nigeria. We have 17 filling stations that are under construction and we are placing due importance on technology-driven innovations because we are in a competitive environment.

    “We also are trying to change the narrative and focus on training and career growth. We are set to be a major player in the near future because right now, nothing much is happening in the sector. Since we are focusing only on retail business, our business model is based on the available margin,’’ he said.

    The Enyo boss said the company’s acquisitions of new retail stations was part of its expansion plans to provide Nigerians with trusted fuel and other quality petroleum products and services.

    “We are entering into contractual agreements with key dealers across the country to fast-track our rapid acquisition of stations. We believe that having stations at strategic locations will help us drive our commitment to the provision of quality fuel and petroleum products,” he said, adding the launch was one of a few planned for 2019 as the company seeks to continue to grow its market share in the fuel distribution space.

    Chairman, Folawiyo Energy, Mr. Tunde Folawiyo, said Enyo was targeting 80 retail outlets before the end of 2019, adding that the company had presence in all the states of the federation.

    Folawiyo, who is also the Chairman of Enyo Retail Company, said efforts were ongoing to hit 120 retail outlets by 2020. He said the essence of the gathering was to appreciate the Oba of Lagos and other stakeholders who had supported the company over the years.

    The Oba of Lagos, Oba Rilwan Akiolu, lauded Enyo’s investment in the downstream sector of the petroleum industry, urging the management to ensure practical objectivity and transparency toward effective customer services.

    Akiolu, however, urged land owners to invest on their land for the future development of their families and the growth of the state. “We are grateful to God that today, we’re among those who are inaugurating Enyo. The Olowo Eko Station has been part of my dream to ensure service to humanity within this area. In years to come, investment made on this axis of Lagos will be of great investment and resourcefulness to the land owners,” he added.

  • NGC to create rapport with 350 host communities

    The Nigerian Gas Company (NGC) on Wednesday said it would continue to develop a robust and sustainable relationship with its over 350 host communities in the country to enhance business growth.

    The Managing Director of NGC, Babatunde Bakare gave the assurance during the official inauguration and hand over of a Basic Health Centre to the Oniparaga community in Odigbo Local Government Area of Ondo State.

    Bakare who was represented by the NGC General Manager, Support Services, Mrs. Mariam Emmanel-Ate said the wellbeing of the community was paramount to the Social Corporate Responsibility thrust of the company.

    According to the MD, the company had a Metering Stations located in 11 states in the country noting that by implication, its pipeline transverses over 350 host communities.

    He said “We present to you this fully equipped Basic Health Centre as a token of our appreciation and our contribution to the development of Oniparaga Community.

    “As a company, we shall continue to solicit for your co-operation and assistance in the maintenance of peace and support for our business growth aspiration in the interest of the community and Nigeria in general.

    READ ALSO: ‘Oil marketers cheat Nigerians by N198,500 per truck of product sold’

    “NGC will always encourage and appreciate communities that promote peace, dialogue and understanding in the resolution of issues. This is the hallmark of our community relations engagement process,” he said.

    Bakare urged the people to make judicious use of the multi-million Naira health facility project.

    The Chairman, Odigbo Local Government, Mr. Tunde Ikumawoyi thanked the NGC and the people of Oniparaga for ensuring that the project materialised.

    He assured that the project would be put into proper used by the primary healthcare department of the Council.

    Also, speaking, Dr Akanbiemu Francis, Executive Secretary, Ondo State Primary Healthcare Board described the facilities as the best in the Local Government.

    While appealing to the NGC and the NNPC for a continuous support Francis promised to deploy qualified staff to man the facilities.

    Oniparaga’s monarch, Oba Adetokumbo Aderopo who described the project as a milestone said the faculty would go a long way in improving on the health of the people, pleading that the facilities should start operation in earnest.

  • Four-million-barrel crude oil target ‘not feasible’

    Nigeria’s aspiration to increase its daily crude production from 2.2 million barrels per day to four million barrels daily by 2025 is in doubt as the production from Joint Ventures (JVs) shrinks further, the Country’s President of Association of International Energy Economists (AIEE), Prof Wunmi Iledare, has said.

    Production from the deepwater through which the country derives substantial part of its daily crude output, he also stated, is not increasing either.

    In a telephone interview with The Nation, Iledare said the fact that production from the Joint Ventures and the deep water operation is falling gradually is an indication that the country would find it difficult to improve its output significantly in future.

    According to him, the four million production target by Nigeria is not realistic in view of the fact the country is presently struggling to produce barely 2.2 million barrels per day.

    He said the downward trend, which production from Joint Venture partners, including Mobil and Shell is witnessing in recent times, coupled with that of deepwater production, is not putting Nigeria in a comfortable zone to increase its output significantly in the next few years.

    He said inability by the Federal Government to sign a new Production Sharing Contract (PSC) is going to affect crude production in the country.

    Iledare said: “There is no Production Sharing Contract (PSC) in recent times. Also the lead time from contract to production takes between 10 years to 15 years, implying that the country must wait for that period, whenever the government is ready for such contract.”

    Read also: Oil reaches $68 on falling supplies

    The former University of Port Harcourt lecturer, said the country is lacking investment in infrastructure, adding that the development has made it difficult for Nigeria to produce either three million or four million barrels of crude per day.

    “Honestly, producing three million bpd or four million bpd is not possible. JV production is declining; no meaningful investment to build capacity; no access to new investment. Also, there is market glut in targeted destinations to Nigeria oil, coupled with the fact that the reform in the sector is elusive,” he added.

    Iledare said Nigeria has enough reserves to sustain either three million or four million daily crude production, but does not have the required infrastructure or market to sustain it.

    He urged stakeholders, including the Federal Government, to come together to build infrastructure for the sector, adding that any attempt by the operators to put in place robust infrastructural mechanism would make the industry compete well globally.

    The Nigerian National Petroleum Corporation (NNPC) in conjunction with some multinational oil firms signed a Joint Venture agreement. The development ensures that the Joint Partners, including Shell and Mobil, contribute 45 per cent to Nigeria’s crude output while NNPC contributes 55 per cent.

    In addition, Shell has almost exited Nigerian market, a development, which would have significant effect on the contributions of the oil firm to Nigeria’s output.