The Nation Newspaper

Category: Energy

  • Govt urged to improve crude oil production by 70%

    The Federal Government should improve crude output as the price hovers between $68 and $70 per barrel, stakeholders have said.

    The stakeholders, including the Chief Executive Officer, Abuja Power Station, Mr Jameel Jammal, and the former Country President, International Institute of Energy and Law, Prof Adeola Akinnisiju, said this would enable the government to earn enough money for budget implementation and other fiscal responsibilities.

    They urged an increase in production of between 70 and 80 per cent.

    Jammal said a sustained peace initiative in the Niger Delta was necessary for the government to achieve its intention of meaningful economic growth.

    He said it was through the region that the economy derives highest percentage of its earnings from crude oil, adding that the country would stop contending with bad economy once crude oil production improves significantly.

    “Meeting fiscal responsibilities in order to encourage growth in the economy would not be difficult, once the production of crude oil peaks. The country depends on crude oil for about 80 per cent of its export earnings, a development, which suggest that crude oil is the mainstay of the economy. While economy diversification is good, it would take the Federal Government sometime to improve through economy through non-oil sources,” he added.

    Also, Akinnisiju said happenings in the Niger Delta region go a long way in determining the outlook of the economy. He said Nigeria depends on crude oil for sustenance, therefore, there is need to foster growth in the Niger Delta region.

     

  • Senate panel lauds NEITI’s interventions in sector

    Nigerian Extractive Industries Transparency Initiative (NEITI), has been commended for its interventions in the sector.

    Chairman, Senate Committee on Federal Character and Inter-Governmental Affairs, Tijjani Kaura, who gave the commendation in Abuja, when NEITI appeared before the committee to defend its 2018 budget proposal, said the development saved the sector from collapse.

    In a statement by NEITI, Kaura said the monumental corruption that characterised the oil and gas industry since inception resulted to a situation where natural resources became a curse instead of a blessing to citizens.

    He said: “We are aware of the courageous work that NEITI has done and the sanity that its intervention has brought to the sector in spite of mounting challenges. NEITI’s bold and courageous disclosures have drawn attention and beamed the torch light on the sector that is the lifeline of the nation.”

    He expressed satisfaction with the excellent work done by NEITI, especially in the last two years, promising to support the agency to get the required resources to enable it fulfill its mandate.

    “We have very high regards for you and your agency because we know you are transparent, I personally commend the Executive Secretary and his able team in NEITI for walking the talk,” he stated.

    He challenged other agencies to emulate the professionalism and integrity exhibited by NEITI in the discharge of its duties.

    Presenting the budget, NEITI Executive Secretary Waziri Adio appealed to the committee for support in ensuring adequate appropriation so that the agency would continue to deliver on its mandate.

    Adio told the committee the driving philosophy of NEITI remained the promotion of a culture of learning and achieving much with less and commended the government for supporting the operations of the NEITI even when the pronouncements of the agency appear to challenge the status quo.

    He reiterated the commitment of the agency to remain professional, bold and courageous in confronting institutional, governance and man-made obstacles that would frustrate transparency and accountability in the extractive sector, especially the oil and gas industry.

    The NEITI chief identified the “automation of NEITI audit process, timely and regular reporting, and multi-stakeholders’ mobilisation towards using the Extractive Industries Transparency Initiative (EITI) framework for reforms” as key priorities of the agency.

    He, however, urged the National Assembly to appreciate its relationship with NEITI as that of critical partners in the monitoring and oversight functions, adding that one way to achieving this is for the National Assembly to “ensure that NEITI reports were publicly debated at plenary sessions of the Senate and House of Representatives, pay attention to the recommendations contained in the report and ensure that remediation occurred.

    This, he maintained, would guarantee the on-going reforms in the sector championed by the NEITI’s advocacy impact the citizenry. He said: “This is not what we can do all alone by ourselves; we need you and others to play their parts.”

    Also, NEITI has commended the step taken by both chambers of the National Assembly to pass the Petroleum Industry Governance Bill (PIGB). It said the decision to consider the Bill as priority resulting in its eventual passage was bold, courageous and progressive, given the challenges the bill had passed through in its legislative journey for over 10years.

     

     

     

     

  • Eroton explains cause of Buguma 10 Gas Well fire

    Eroton explains cause of Buguma 10 Gas Well fire

    Eroton Exploration and Production Company Limited has explained that illegal third-party activity and sabotage were the likely cause of a gas fire that broke out at  the Buguma 10 Gas Well, a gas well located within Oil Mining Lease 18 (OML18) recently.

    The firm offered this explanation in a statement adding that it is currently working to restore conditions of the well, after which a full joint investigation will be carried out into the cause of the fire.

    It noted that there were no fatalities or spill into the environment resulting from this incident.

    According to the company, “On the 8 January 2018, a gas fire broke out on the Buguma 10 gas well, a gas well located within Oil Mining Lease 18 (OML 18) that is operated by Eroton Exploration and Production Company Limited, operator of the Eroton/NNPC Joint Venture.

    “Eroton had taken over operatorship of this OML from Shell Petroleum Development Company Limited in 2015. Preliminary checks with Eroton reveal that it has promptly reported the incident to the relevant regulatory bodies including the Department of Petroleum Resources and the NOSDRA.

    “Our investigations have further revealed that the well is a non-operational one having been safely secured by SPDC with a downhole plug and a Non-Return Valve before transfer to Eroton,” the company stated.

     

  • Govt wants oil price at $60

    Govt wants oil price at $60

    The Federal Government would be happy to see that the price of petrol stays at  $60 per barrel, and not $70 per barrel, and not $70 per barrel, which the price of crude recorded at the international market earlier.

    The Minister of State for Petroleum Resources, Dr Emmanuel Ibe Kachikwu, said the country is aiming to achieve oil production of 1.8 million barrels daily by March and will prefer oil prices to stay in the $60 range.

    He told an oil and gas newspaper that the government would be glad to see the price moderated at $60 per barrel, to grow oil production above 1.8million barrels per day(bpd)

    “Hopefully the price of oil will help us a bit to get some of the pressure off our back. If the infrastructure comes back, our potential to increase will be there. We have taken the OPEC position  of staying at 1.8 million barrels per day and not allow that sort of squeeze to loosen up. I would  wait till June [to see how] the numbers are looking,” said Kachikwu in Abu Dhabi.

    The production is still below 1.8 million barrels per day and condensates production is 300,000 barrels, he added. When asked whether $70 oil prices are helpful to Nigeria, he said the resolve was to have a reasonable figure.

    “Not $70, somewhere in the sixties. There is a collective resolve to do everything. The philosophy is not to protect the price but the business model,” he said.

     

  • Increased shale production threatens oil price ramp, OPEC cuts

    Increased shale production threatens oil price ramp, OPEC cuts

    The rising oil price has not only brought market stability to the global oil industry but joy to oil producing countries, especially those  whose economies depend on oil proceeds for survival but this joy is being threatened increased output from shale.

    The International Energy Agency (IEA) Executive Director, Fatih Birol, said at an event that oil producers may be enjoying oil prices at $65 and $70 per barrel, but these price levels are likely to encourage even more oversupply from United States (U.S.) shale.

    For most of last year, the resurgence of US crude oil production was capping price gains and offset part of the production cuts that Organisation of Petroleum Exporting Countries (OPEC) and its Russia-led non-OPEC partners have been implementing since January last year, report said.

    The report further noted that this year also started with the OPEC vs. shale tug-of-war, although in the first two weeks of 2018, geopolitical risks and declining inventories overshadowed concerns over the rise in US shale, and supported oil prices and sent Brent briefly breaking above $70 a barrel.

    US shale is expected to continue to counteract OPEC production cuts this year. EIA’s latest Short-Term Energy Outlook from earlier this week estimated that US crude oil production averaged 9.3 million bpd in the whole of 2017, and 9.9 million barrels per day (bpd) in December alone.

    This year, US crude oil production is seen averaging 10.3 million bpd in 2018, beating a record dating back to 1970. For 2019, EIA expects US production to increase to an average of 10.8 million bpd and to surpass 11 million bpd in November next year.

    The Paris-based IEA said in its latest Oil Market Report from December that “On considering the final component in the balance—non-OPEC production—we see that 2018 might not be quite so happy for OPEC producers.”

    The IEA warned that mostly due to US shale, total supply growth could exceed demand growth. Oil prices are currently at levels at which US production could substantially increase. According to the Q4 Dallas Fed Energy Survey published at the end of December, 42 per cent of executives at 132 oil and gas firms expect the US oil rig count to substantially increase if WTI prices are between $61 and $65 a barrel, the Financial Tribune reported

    The IEA report indicates that the United States may be on its way to reclaiming its position as the world’s top crude oil producer, overtaking Russia and Saudi Arabia.

    Russia produced an average of nearly 11million bpd in 2017, while Saudi Arabia produced about 10 million barrels per day. Both countries, though, have been keeping a check on their output in 2017 courtesy the output constraint arrangement between the OPEC and its non-OPEC allies.

    When the US shale output began impacting the global energy scenario, many felt it was phase in passing but not anymore.

    In fact, by 2012, the crude scenario appeared changing as the long-term impact of the shale revolution began to unfold. In its 2012 World Energy Outlook, the International Energy Agency conceded that the global energy map was changing, ‘with potentially far-reaching consequences for energy markets and trade.’ As per the IEA, a new era was being redrawn by the resurgence in oil and gas production in the United States.

    It then emphasised that energy developments in the United States were profound and that their effect was to be felt well beyond North America – and the energy sector. As a consequence, global energy geopolitics also underwent major adjustments over the next few years.

    The IEA then underlined that the US energy market was going through radical upheaval, sparked by the development of new technologies, especially the extraction of shale gas through a controversial process called ‘fracking’ that has been limited or banned in other countries.

    The report projected that by 2020, the United States was set to become the largest global oil producer (overtaking Saudi Arabia until the mid-2020s), and resulting in a continued fall in US oil imports, to the extent that North America would become a net oil exporter around 2030.

    Global headlines began screaming almost immediately: The United States will overtake Saudi Arabia as the world’s leading oil producer around 2017 and will become a net oil exporter by 2030.

    “North America is at the forefront of a sweeping transformation in oil and gas production,” Maria van der Hoeven, the then IEA Executive Director said in London while unveiling the WEO-2012, underlining that the US would overtake Russia in gas production by 2015.

     

     

  • ‘Why marketers insist on selling petrol above N145/litre’

    ‘Why marketers insist on selling petrol above N145/litre’

    FACTS have emerged on why  marketers want a hike in the petrol’s price.

    The Nation learnt that the reason  marketers are reluctant to sell at N145 per litre is because of artificial scarcity; most private depots are empty.

    The few that have are warehousing the product for the Nigerian National Petroleum Corporation (NNPC), which pay a commission for the service to the depot owners.

    Under this arrangement, the NNPC authorises the truck to load at such depots. However, due to the large number of trucks waiting to load, this causes scarcity. Such depots take advantage of the high demand to hike the price.

    The regulated ex-depot price by  NNPC, the sole fuel importer, is N133.28 per litre, but the depots sell at between  N158 and N162.

    Further investigation revealed that such depot operators connive with some NNPC officials to sell over the approved ex-depot price of N133.28 to make quick cash. Trucks from the East and other parts of the country that are far from the Lagos ports – the main source of fuel supply – make higher offer to the depots because petrol sells at such places at over N145 per litre. In some states, petrol sells for N180 and N200.

    Some marketers confirm that  some NNPC officials connive with private depot owners to divert petrol meant for Pipeline and Products Marketing Company (PPMC), an arm of NNPC, to private depots, pay throughput charges, to sell above ex-depot prices.

    The Nation’s investigation revealed that most of the NNPC depots are not working, while those that are functional operate at very sub-optimal levels, putting excess pressure on NNPC and private depots in Lagos and other parts of southwest as well as contribute to gridlock in Apapa.

    The Southwest Zone of the Independent Petroleum Marketers Association Nigeria (IPMAN) Chairman, Alhaji Debo Ahmed, told The Nation that he could only speak on the state of NNPC depots in the zone. According to him, there are five NNPC depots in the southwest.

    He said: “I can only talk about southwest, which is my constituency. In southwest, we have five depots – Ilorin, Ibadan, Ore, Ejigbo and Sagamu and their petrol storage capacities, I will tell you.

    “Of these five depots, the one in Ibadan is working, after almost three years of being out of operation. It started working last October. In Ejigbo, only two smaller tanks are working. They have a million litres capacity each, which can only load 33 or 66 trucks. The two that are not working have five million capacity each, which is 5000metric tons. At Mosimi (Sagamu), the tanks are working. It is the largest depot in the southwest and pumps products to all parts of the region and others. It loads Port Harcourt, Kano and other states.

    Ore has not been working for five years because of pipeline vandalism. Ilorin also has not been working for four years due also to pipeline vandalism. Ore depot is not big with its 10-million litre capacity. Ilorin has about 10 million litres. Of the five depots, three are working.

    The Group General Manager, Group Public Affairs Division, NNPC, Mr. Ndu Ughamadu, told The Nation that the corporation has 21-23 depots on land and two marine. He said the latter were working while some of the land depots were not – no thanks to pipeline vandalism.

    Ughamadu said Calabar, Warri, Port Harcourt, Benin, Mosimi, Ibadan, Ejigbo and Kano depots were  working, adding that Enugu, Aba and other depots would soon be in operation.

    According to him, the NNPC management is working relentlessly to bring the entire depots on stream to make fuel available across the nation.

    On the over-pricing of ex-depot price of petrol, Ughamadu said the NNPC has put measures in place to effectively enforce the N133.28 ex-depot price.

    Quoting the PPMC Managing Director, Umar Ajiya, Ughamadu said the measure became necessary to resolve the price differentials between some of its stakeholders.

    Ajiya said the throughput facilities, along with some of its coastal depots, woukd go a long way in ensuring that marketers access petrol at the approved government price.

  • ‘Why Nigeria must switch from dirty fuels’

    ‘Why Nigeria must switch from dirty fuels’

    Nigerians require cleaner fuel to reduce respiratory infections and other health hazards, the Managing Director, Banner Energy Limited Nuhu Yakubu, has said.

    Speaking during the company’s Corporate Social Responsibility (CSR) free hand-out of cylinders to Lagos residents in Lagos, he saidcleaner fuels would reduce the negative impact of bad cooking fuels on the  environment and the people.

    According to him, cooking with  cleaner fuels, such as Liquefied Petroleum Gas (LPG), will reduce the chances of inhaling dirty fuels, which will in turn, have a ripple effect on the health, finances, and family.

    He said the use of firewoods and other dirty methods of cooking is not good.

    He said: ‘’Statistics from the World Health Organisation (WHO) revealed that smoke inhalation from the use of dirty fuels is responsible  for more deaths than tuberculosis, Human immuno-deficiency vVrus (HIV) and malaria put together. To combat this, the government  is deepening the use of gas with promotional outreach programmes like this and also giving out cylinders for free.’’

    Yakubu said  the LPG clean cook stove/cylinders free hand-out to Lagos residents is a partnership project sponsored by the Lagos State government in collaboration with the LPG sub-group of the Lagos Chamber Commerce Industry (LCCI).

    “It is aimed at educating the public on the importance of switching from the use of dirty fuels, such as kerosene and firewood, to cleaner fuels like (LPG), for cooking, heating, autogas, power generation, and other industrial purposes, to deepen the use of gas in Nigeria, towards the reduction of energy poverty.

  • ‘Why Solid Minerals Fund was restructured’

    The Federal Government has restructured its Solid Minerals Development Fund (SMDF) to accommodate more operators and deepen participation in the sector.

    An aide to the Minister of Solid Minerals, Mr Yinka Oyebode, said the government rjigged access to the fund to enable more operators would benefit from it.

    He said the sector is developing, noting that there are many areas that awaiting exploration.

    In an interview with The Nation, he said the sector will be one of the major revenue earners for the government should the operators and investors show more attention in it.

    He said there are many old and green fields awaiting exploration, urging the operators to firm up the relationship between the Nigerian Mining Geoscience Society (NMGS) sector to deepen activities in the sector.

    He urged stakeholders to pull resources for exploration, adding that the inability of the operators to have a strong forum is affecting geological activities.

    Oyebode said: “If operators  can form a strong and virile body to examine and deliberate on the past, present and future potentials in the nation’s solid minerals sector, they would not find it difficult in assembling funds needed for exploration activities. Besides, they would be able to improve on the export of solid minerals.”

    He said the government is not leaving any stone unturned to harness the potentials in the industry and further make it contribute substantially to the nation’s Gross Domestic Product (GDP).

    According to him, the country depends on crude oil to the detriment of solid minerals and other natural resources.

    Oyebode, the Senior Special Assistant on Media to the Minister of Solid Minerals, Dr Kayode Fayemi, said the sector boasts of over 40 resources, stressing that many are yet to be discovered.

    He said the resources were spread across the six- geopolitical zones, Southwest, Southeast, Southsouth, Northeast and others. He said many areas have geological prospectivities, urging Nigerians to conduct research in those areas and explore them for growth.

    On World Bank grant, Oyebode said the $150 million will be given to qualified operators by the government. He said operators must show a proven track record of activities, operate in line with the best corporate practices, among meeting other requirements.

    He said the development became necessary to meet the World Bank requirements for the disbursement of funds, stressing that the World Bank would like to know how the money would be spent before it is given it out.

  • Oil operators, others urged to train workers

    Operators in the petroleum industry have been advised to train and retrain their workers to enable them compete with their international competitors, the Comptroller-General, Federal Fire Service, Mr Joseph Garba Anebi, has said.

    He said the development became necessary to enable them adopt homegrown solutions to the challenges in the sector.

    Speaking during the facility tour of Falck Prime Atlantic, and indigenous oil service firm, in Ipara-Remo, Ogun State, Anebi said the country boasts of highly equipped training centres such that they can compete with those in developed countries.

    Represented by his Assistant Comptroller-General,Liman Ibrahim, Anebi said the company provides one of the best training services and facilities for operators in oil and gas.

    He said: “For those of us (participants), who go outside Nigeria for training, I believe that we would find it easier to  attest to the fact Falck Prime Atlantic can compete favourably with  any of its counterparts globally. That is why the Federal Government did not hesitate to send a team of Fire Service for training at the centre beginning from this week”.

    He said the centre has three medical personnel who would take care of the trainees during emergencies.

    Also, the Falck Prime Atlantic Business Development Director, Mrs Folake Soyannwo, said the firm started as a training centre for oil and gas operators, adding that it is providing safety services for operators across fields.

    She said the firm is a wholly locally owned training institution, which started operation in 2009, stressing the firm has gained international recognition through its services in and outside the country.

  • Fed Govt to open door for more metering manufacturers, others

    • Erring firms’ licences to be revoked

    THE Federal Government will soon introduce a new metering regulation that will bring more meter manufacturers and suppliers into the sub-sector, the Minister of Power, Works and Housing, Mr Babatunde Fashola, has said.

    Fashola said the regulation would rid the sector of unprofessional practices by revoking the licences of individuals and companies that install meters wrongly.

    He said the Nigerian Electricity Regulation Commission (NERC) will introduce the regulation in the next few months.

    He said despite privatisation,the sector is stll highly regulated, adding that the new regulation will simplify activities, such as manufacturing and supply of meters.

    Speaking on the sidelines of the tour of facilities of the National Meter Test Station in Oshodi, Lagos, Fashola said the decision of the government was informed by the need to bridge the gap between metered and unmetered customers and improve the fortunes of the sector.

    The tour was aimed at examining the qualities of the facilities.

    According to him, the issue will help to solve metering problems.

    Fashola said: “The regulation would enable more people to participate in the metering sub-sector of the power industry, thereby ensuring availability of meters in the sector. More Nigerians would have access to meters by the end of 2018. Metering is a major problem, which the sector has been battle with for years and the government is working hard to remove the bottlenecks inherent in the supply and distribution of meter.”

    He said the regulation will ensure that local manufacturers developed and competed well with their counterparts abroad, adding that the idea would discourage importation of meters in the future.

    The minister said the government does not want the power sub-sector to experience changes similar to that of telecoms.

    The telecom industry, Fashola said, is flooded with over 100million phones from China, adding the Chinese government is happy because it is making more money from Nigeria.

    He regretted that Nigeria is going back to China for aids and loans after failing to develop its economy well.

    “We, the (government), do not want this kind of thing to happen in the metering sub-sector. We are happy that some Nigerians have put their feet down to produce meters and coupled with the new metering regulation that would soon be introduced in the electricity industry, the sky is the limit for the sector,” he added.

    Fashola said more emphasis would be placed on certification of meters by the National Meter Testing Stations, Nigerian Electricity Management Services Agency (NEMSA) and other relevant institutions.

    He said metering is much more complex as it involves accuracy, safety and other tests. He said he inspected meters, such as Maximum Demand Meters (MDM), pre-paid meters, analog meters and others, to determine their functionalities and further ensure that they were tested bearing the health of the users in mind.

    Also, NEMSA’s Managing Director, Mr. Peter Ewesor, said if a meter was mistakenly brought into the country untested, it could affect as many people. He said the development informed the decision of the agency to be thorough in its examinations of meters brought to it by the electricity distribution companies (DisCos).

    He said NEMSA ensures that meters have a seal, which indicates that they have been tested and fit for installations in homes and offices, adding that failure to do that means all kinds of meters are going to flood the industry.