The Nation Newspaper

Category: Energy

  • Nigerdock graduates 49

    Nigerdock graduates 49

    To promote local content and develop human capacity, the Nigerdock has graduated 49 vocational trainees from its Training and Development Academy.

    The trainees, which comprised 47 men and two women are secondary school graduates. They began on-the-job training  in May 2016. Twenth-four of them acquired skills in welding with (international: 6G and 6GR certifications and Nigerdock Certification of Completion-NDCC). Nineteen of them were trained in fitting and six were trained in machining.

    At the graduation, which held at the Nigerdock facility on Snake Island, Integrated Free Zone (SIIFZ), the Nigerian Content Development and Monitoring Board (NCDMB) Executive Secretary, Simbi Wabote, who was represented by Manager, Capacity Development Division, Iwhiwhu Maurice Kelly, appreciated Nigerdock, Samsung Heavy Industries and Total for further deepening local content and improving Nigeria’s human capacity development through its world class training academy.

    “We commend Nigerdock, Samsung Heavy Industries Limited and Total Upstream Nigeria Limited because we are confident that these vocational trainees have been trained in various skills that empower them to provide the necessary manpower and services for the sector and they can compete with their counterparts in other parts of the world,” he noted.

    Group Corporate Affairs Director, Jagal, Mrs. Joy Okebalama, reaffirmed Nigerdock’s commitment to championing local content development. She lauded Samsung Heavy Industries Nigeria Limited, Total and NCDMB for supporting the programme.

  • Sahara Group hosts Harvard graduates

    Egbin Power Plc, an affiliate of Sahara Group, has flagged off the tour of the power operations of Sahara Group, an indigenous energy conglomerate, by 20 Harvard Kennedy School graduates.

    Led by Toyosi Akerele-Ogunsiji, the graduates from the 2017 Masters in Public Policy Class learned about how continuing investments in technology, human capital, overhauls and upgrades were driving the transformation of the power plant, which is responsible for 25 per cent of power generated in Nigeria.

    An elated Arohi Sharma, the team’s Student Government President 2016-2017 said: “It is quite exciting and amazing to see the remarkable work that is going on at the power plant. This is my first time in a facility like this and I am personally looking forward to the emergence of a vibrant power sector in Africa with institutions like Egbin Power playing important roles in this regard.”

    Following the nation’s privatisation exercise, Sahara, through its power division, Sahara Power Group and sundry affiliations, acquired the 1320MW installed capacity Egbin Power Plant, Ikeja Electric Plc and generation assets at First Independent Power Limited in Rivers State. Sahara Power Group currently operates power generation facilities with a total of approximately 1,750MW of available capacity and working towards deploying a minimum of 5,000MW of electricity generation over the next five years.

  • GUMCO, Genus Power seal meter manufacturing deal

    GLobal Utilities Management Company (GUMCO), a subsidiary of Vigeo Group, has signed a long-term agreement with Genus Power Infrastructure Limited for the manufacturing, assembling and development of power metering solutions for Nigeria and other West African countries.

    Vigeo Group Chairman Mr. Victor Osibodu signed the memorandum of understanding (MoU) for GUMCO, while the Executive Vice President of Genus Power Infrastructures, Mr. R. Viswanathan, signed for his company.

    Other senior executives of Vigeo and GUMCO present at the signing ceremony were Mr. Abu Ejoor, Director of Vigeo Power and Tosin Osibodu, Business Development Manager of GUMCO.

    The MoU signifies the intention to collaborate closely on developing viable solutions to meet Nigeria and West Africa’s power metering needs. It also provides a framework for joint research, setup and deployment to develop innovative features tailored to the challenges of the West African power market. The scope of the collaboration includes the pooling and exchange of ideas, expertise and resources, as well as the joint organisation and participation in the end-to-end process of bringing the products to market.

    Through this new partnership, Nigerian power distribution companies will have opportunity to service their customers with metering solutions suitable to the challenges of the market. This collaborative effort is expected to reap results that will enhance the Discos’ bottom-line and reputation with their customers.

    The Business Development Manager, GUMCO, Tosin Osibodu, said: “GUMCO is excited and honoured to be part of this unique partnership with Genus Power. This forward-looking initiative will be a key driver enabling greater performance and accountability within the power sector while creating local jobs through the lifecycle of meter manufacturing.”

    “Together with Genus Power, we can leverage each other’s expertise and collaborate to manufacture, assemble and provide high-quality metering solutions made in Nigeria to service Nigeria and moving forward to the West African market on country to country basis. We’re looking forward to a rewarding and mutually beneficial partnership. ”Viswanathan said: “As a leading meter manufacturer, with the largest installation base of meters in India, it is imperative that Genus shares its experience with its partner GUMCO to provide a range of highly innovative and sustainable metering products and solutions to mitigate the pain areas of Nigerian DisCos and customers.”

  • Oil & gas fiscal strategy: still a long road

    Oil & gas fiscal strategy: still a long road

    Despite the passage of the Petroleum Industry Governance Bill (PIGB), stakeholders still feel that the main issues in the industry have not be tackled. To them, the real issues in the Petroleum Industry Bill (PIB) and the fiscal reforms remain unaddressed, and unless something is done, the industry will not move forward. EMEKA UGWUANYI reports.

    There was a flicker of hope in the oil and gas industry when the Senate passed the Petroleum Industry Governance Bill (PIGB), part of a larger industry document that has lingered in its chambers for about 17 years.

    The action of the Senate was greeted with mixed reactions by stakeholders. While some welcomed it as a positive sign for the industry, others thought the passage of the PIGB without the PIB was a waste of time and that the National Assembly was not sincere about reforms in the sector.

    To the President of the Nigerian Association of Petroleum Explorationists (NAPE), Mr. Abiodun Adesanya, the passage of the PIGB will refocus the oil and gas industry and boost investor confidence.

    “It is a welcome development. We appreciate them (present members of the National Assembly) for doing what they should be doing for the fact that past Assemblies lacked the courage to do it. The passage of the PIGB will strengthen and refocus the oil and gas industry – the upstream, midstream and downstream value chains. It will make room for better management because governance structure will be in place. We hope that part two and three will also be given speedy passage.

    “It will clarify a lot of issues in terms of investment decision. Investors will take decision based on reliable rules and guidelines. Strict enforcement of the regulations and structures will make the industry vibrant and attractive to investors. The passage of the Bill will create level playing ground for all players, remove ambiguities and bottlenecks that had plagued the industry,” Adesanya said.

    The Head of Energy Desk, Ecobank, Mr. Dolapo Oni,  disagreed with him in some areas. He said as much as the passage of the PIGB was welcome, the knotty part of the PIB that has kept the bill on the table has not been tackled.

    To some other stakeholders, signals from the regulatory landscape have been quite unclear given government’s inability or unwillingness to make bold reforms. Amidst the volatility of oil prices and political uncertainties, the continued delay in straightening out key policy areas in the oil and gas sector has to a large extent delayed foreign direct investment. They believe that government’s desire for growth of the oil and gas sector may remain a dream for a long time considering the delays in passing all the parts of the petroleum industry bill.

    At the fiscal level, recent moves by the government has rekindled hope in the possibility of at least short term sustainability in the oil and gas operations. The renewed effort by the Ministry of Petroleum Resources at reforming the oil and gas industry has included the launching of a roadmap tagged “7 Big Wins” for the petroleum industry last year.

    The roadmap, according to the Minister of Petroleum Resources, Dr. Emmanuel Ibe Kachikwu, is aimed at addressing specific issues of policy and regulation, business environment, investment, security, transparency and efficiency in the oil and gas sector.

    Other initiatives by the government to boost growth in the industry include the renaming of the PIB to Petroleum Industry Reform Bill (PIRB). The PIRB was further broken into two to reduce its bulkiness and enable quick passage.

    The Federal Ministry of Petroleum Resources in its bid to strengthen the fiscal aspects of the industry recently released the draft National Petroleum Fiscal Policy (NPFP) a document many believe if sanctioned and well implemented could spur growth in the sector.

    The Policy, according to energy analysts, covers all sectors of the petroleum industry – upstream, midstream and downstream, and includes oil and gas products.

    Economic and energy experts believe that putting the right policies (regulatory and fiscal) in place for the industry would serve as a catalyst for growth.

    According to Johnson Chukwu, an economic expert, “We have had a long period of low investment in the oil and gas because of the absence of a fiscal legal framework. So, when the government comes up with a fiscal legal framework, it will catalyse the whole system. Good a thing the Senate has passed the PIGB. When the whole bill is passed, it will create a level of certainty for investors,” he said.

    However, those familiar with the PIB believe the NPFP and the PIB are similar in many aspects. According to PricewaterCoopers (PwC), a tax and audit consulting firm, “The previous version of the PIB introduced a resource tax called the Nigerian Hydrocarbon Tax, (NHT), which was to be levied on the chargeable profits of upstream companies at the rate of 50 per cent for onshore and shallow waters, and 25 per cent for bitumen, frontier acreages and deep water areas. While the (NPFP) retains the NHT, it has tweaked the rates by amending it to 40 per cent for onshore areas, 30 per cent for shallow waters and 20 per cnet for deep water areas. Like the PIB, all upstream companies will also be liable to Companies Income Tax (CIT). For both regimes (PIB and NPFP), the Petroleum Profits Tax (PPT) currently in existence will be no more. Meaning from a maximum tax rate of 85 per cnet, the revised maximum tax rate will now be 70 per cent (40 per cent NHT plus 30 per cent CIT) of chargeable profits,” it stated.

    In addition, the proposed new legislation also seeks to increase the capital gains tax (CGT) in respect of asset based transactions from 10 per cent to 30 per cent.

    Analysts have noted that when compared to the Petroleum Profit Tax Act (PPTA), which allows exploration and production companies who have not fully expense their pre-production expenditure to be taxed at 65.75 per cent for the first five years of commencement of commercial sales of crude oil, the NPFP does not provide for such lower or preferential tax rate, suggesting that the tax burden may be relatively higher for upstream companies.

    For the extractive policy, most analysts believe the draft bill is placing too much emphasis on increasing government revenue without paying attention to the interest of investors. According to PwC, the motive of the policy is to increase government revenue especially in deep water. The firm, however, said there was need for government to strike a balance between more revenue for government and attracting or retaining investment in the sector.  Stakeholders believe while the NPFP seeks to remove or reduce incentives, there must be deliberate effort to tackle disincentives in the sector. This balance is paramount given a shrinking economy and growing need for foreign direct investment.

    The multiplicity of taxes and other operational issues have forced players to cut back on their investment. However, despite the unstable policy environment, some IOCs have continued to make significant investments in the sector.

    Last year, ExxonMobil announced a massive oil find in Owowo field, a significant morale booster for the industry, especially as Nigeria’s reserve replacement ratio has been going down. The field, which is projected to hold over onebillion barrels of crude oil reserves, has the capacity to generate over $50 billion revenue for the country, according to the oil firm.

    Also, Erha North Phase II project has delivered additional 165 million barrels per day of crude to Nigeria with a peak production of 65,000 barrels per day. There appears to be a consensus in the industry that if given the right fiscal and regulatory environment oil firms could do more.

    Similarly, Total E&P Nigeria Limited has demonstrated its commitment to developing not only the  economy but also to safeguarding its environment. The completion of the Ofon II gas flare-out project has enhanced gas utilisation. On the other hand, with its zero gas flare, the project has made considerable contribution towards a cleaner environment. These are investments that have significantly improved lives as well as government revenue.

    Analysts believe that heavy taxation of oil companies has its own demerits. It is capable of dissuading potential investors from the sector. On the other hand, existing players who are weighed down by the tax burden would seek for ways to cut cost to stay in business. One of such ways is reduction of the workforce. Alternatively oil firms may also decide to cut corners with severe consequences on lives and the environment.

    However, according to the provisions of the policy, payment of royalties will be on the same basis as taxes.The new policy says payment of royalty based on acreage depth will be replaced with royalty payments based on volume and price of crude oil. In its analysis, Deloitte, a tax consultancy firm, said: “This will nearly eliminate the payment of a minor fraction of revenue as royalty by companies operating deep offshore”.

    The draft policy provides for royalty to be paid in kind or cash. Analysts said the draft policy could be a catalyst to the development of the oil and gas sector if well implemented as it seeks to streamline hitherto contentious issues in the sector. Industry experts believe a quick passage of relevant legislation would enhance the effectiveness of the policy.

     

  • LCCI honours Jagal Group chair

    LCCI honours Jagal Group chair

    Lagos Chamber of Commerce and Industry (LCCI) has bestowed the Business Legacy Award on Mr. Anwar Jarmakani, the Group Executive Chairman of Jagal, in recognition of his contributions to nation-building and socio-economic development.

    The event held in Lagos where  captains of industry and notable personalities converged to celebrate corporate organisations, public institutions and individuals that have contributed meaningfully to the development of commerce and industry in Nigeria.

    LCCI President, Mrs. Nike Akande, while presenting the award to Mr. Anwar Jarmakani, said the recipient through the conglomerate has contributed immensely to nation-building.

    Jagal Group’s Co-CEO, Mr. Manssour Jarmakani, who received the award for Jarmakani said: “The LCCI is highly commended for recognising the significant role Jagal Group has been playing in providing world class products and service to different sectors through its diverse investments in technology, real estate construction, health and hygiene in addition to providing employment for thousands of Nigerians.”

    He said the Jagal Group is dedicated to empowering people and building strategic partnership  aimed at achieving sustainable growth in the host communities.

    Jarmakani, a member of the Nigerian Economic Summit Group,  founded the Jagal Group in March 1978.

    A busniess mogul, entrepreneur, he is one of the first generation of private sector pioneers in the post- independent Nigeria. He has panache for vision, leadership and integrity.

  • CNL gets multiple awards at NAICE SPE

    Chevron Nigeria Limited (CNL), operator of the joint venture between the Nigerian National Petroleum Corporation (NNPC) and CNL, emerged Best Exhibitor at the Nigeria Annual International Conference and Exhibition (NAICE) of the Society of Petroleum Engineers (SPE), which held at the Eko Hotels and Suites, Victoria Island, Lagos.

    At the award night, to round off the conference, CNL’s Frank Ogbuagu, a Reservoir Simulation Engineer, clinched the prize for the Best Technical Paper.

    Frank’s paper titled: “Managing reservoir and operational decline without a Rig: An Okan case study,” was co-written by Femi Afolayan, Femi Esan and Nsitie Obot – all CNL employees.

    CNL was adjudged the best exhibitor based on its excellent performance in the assessment criteria of content/quality of material exhibited, aesthetic of booth, audience engagement and conduct of booth personnel. The assessment of exhibitors was conducted by Price Waterhouse Coopers (PWC), an international Consultancy Service Company engaged by SPE to appraise exhibitors.

    CNL was honoured with a Distinguished Corporate Support Award by the Lagos Section of the SPE at its Annual General Meeting (AGM).

    The award was received by Eddie Agbongiator,the firm’s Onshore Asset Manager.

    Mr. Esimaje Brikinn, the General Manager, Policy, Government and Public Affairs (PGPA) of CNL, expressed the company’s appreciation for the recognition and award. “We are delighted to receive the awards because SPE and members of the adjudication panel thrive on excellence,” Mr. Brikinn said.

  • NIPCO strategic to fuel distribution, says NPMC chief

    NIPCO strategic to fuel distribution, says NPMC chief

    The Nigerian Independent Petroleum  Company (NIPCO) occupies a strategic position in the fuel distribution chain, Nigerian Petroleum Marketing Company (NPMC) Managing Director Mr. Umar Ajiya, has said.

    NPMC is a subsidiary of the Nigerian National Petrleum Corporation (NNPC). NIPCO, he said,  had  the capacity to distribute white products, liquefied petroleum gas (LPG) or cooking gas, and compressed natural gas (CNG) across the country.

    Speaking during a visit to NIPCO Terminal in Apapa, Lagos, Ajiya described it as an homecoming, since he had been part of NIPCO LPG.

    He said  NIPCO and 11Plc (former Mobil Oil Nigeria Plc) have good storage facilities and outlets, which would help in getting products to  consumers fast. The level of the firm’s automation, he added,  puts it in high pedigree in the league of depot operators.

    Ajiya  said: “Massive trucking and hospitality of truck drivers, which is not common in other depots has put NIPCO Plc on a better edge than other companies. The value distribution chain NIPCo plays is a vital role as far as distribution of petroleum products is concerned, which is highly commendable.

    “NIPCO is a world-class facility. We commend the entire management and staff of NIPCO & II Plc for the maintenance of an excellent outfit,”adding that more importantly the company’s management had run the terminal hitch-free since it commenced operations in 2004 and had remained a reliable ally to NPMC in storage of products as well as loading NPMC bulk purchase marketers across the country.

    NIPCO’s Group Managing Director, Mr. Venkataraman Venkatapathy supported by the Managing Director, Mr Sanjay Teotia and Managing Director, II Plc Tunji Oyebanji, praisedAjiya for NPMC ‘s vital role in the  distribution chain.

    He said the enduring relationship between the two organisations had been beneficial to the nation especially the growing clientele that operated filling stations.

    Venkatapathy said with the acquisition of Mobil Oil Nigeria, the Group has over 500 retail outlets in the country with a strong presence in lubes while its Aviation Turbine Kerosene (ATK) business is also coming up.

    Teotia acknowledged the working relationship with NPMC, which was demonstrated again during the  visit.  NNPC, he noted, has been playing a key role in the growth of the company, one of which is the joint venture (JV) with Nigerian Gas Company through Green Gas Limited for the provision of infrastructure to aid use of CNG as auto fuel in the country.

    He assured NPMC of NIPCO’s support in meeting its objectives  as both companies strive to add value to the economy as far as petroleum storage and distribution is concerned.

  • Nigeria needs $40b for oil infrastructure

    No less than $40 billion would be required to fix infrastructural problems in the oil and gas sector, the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, has said

    The Minister, who spoke in the latest bulletin of the Organisation of Petroleum Exporting Countries (OPEC), said the money would be spent on fixing the infrastructural gap in the midstream and upstream segments of the oil and gas sector, adding that with this the industry would return to optimal level.

    He said of the amount, the country would spend $10 billion (N3.05 trillion) in the next three years to increase crude oil production from 2.2 million barrels per day (bpd) to three million bpd.

    Kachikwu said: “Nigeria’s normal production level is about 2.2 million bpd and the government would like to raise it to three million barrels per day. Just to get the fields online and cap them will require an average of about $10 billion per year in investments over the next three to four years.”

    He said international oil companies (IOCs) such as Shell and Agip had made some commitments in this regard to improve activities in the sector.

    He stated that there were also some dedicated projects in the Bonga oil field, noting that Italy’s Agip planned to spend about $10 billion, while Royal Dutch Shell hoped to spend $10 to $11 billion on the field.

    “We are fairly close to identifying dedicated investments upstream. Downstream is a challenge. We need to invest in our refineries. We need to do pipelines,” he added.

  • Wanted: 3m new gas bottles yearly

    Wanted: 3m new gas bottles yearly

    Nigeria needs to produce about three million gas cylinders yearly to meet consumers’ demand and replace obsolete ones, the Nigerian National Petroleum Corporation (NNPC) has said.

    The corporation in a report entitled: “The dynamics of liquefied petroleum gas (LPG) utilisation in Nigeria: Past and present initiatives,” said six companies would have to produce the cylinders at 500,000 units each.

    The report noted that the country uses 2.5million gas cylinders, adding that many of them are due for replacement. It said there are 26 million families in the country, of which a smaller percentage are using LPG also known as cooking gas.

    “Though few Nigerians are using gas for cooking, the rate at which Nigerians use gas for domestic and industrial purposes is growing. That is why there is the need for the country to establish six gas manufacturing plants at 500,000 units each to meet the needs of cooking gas users.

    “Besides, the idea would help in eradicating the use of obsolete cylinders in the country. For six companies to produce 500,000 cylinders each annually, the country would be having three million cylinders in a year. This means that Nigeria would have enough cylinders to give its people as well as reduce health hazards caused by the use of obsolete cylinders.  Gas cylinders have a safe life of five years.  The life span of an average cylinder has been increased to between seven to ten years by Nigerians, due to the bad economy.’’

    NNPC’s Group Managing Director Dr. Maikanti Baru said the corporation is interested in deepening the use of cooking fuel, adding that the development informed the decision of NNPC to launch a campaign on the issue.

    He said the National Oil Company is monitoring the progress report in the sub-sector by writing a report on the use and problems affecting the growth of the product in the market.

    He said the corporation had not lost track of the growth in the oil and gas sector due to its decision to facilitate the growth of petroleum resources.

  • Pan Ocean’s pipeline ‘ll boost crude export by 160,000bpd

    Pan Ocean Oil Corporation (POOC), an indigenous exploration and production company and operator of the Nigerian National Petroleum Corporation (NNPC)/Pan Ocean Joint Venture, has awarded a pipeline contract to a local firm to create an alternative export line to avoid attacks by Niger Delta militants. EMEKA UGWUANYI reports.

    The agitation for resource control by the Niger Delta militants made the creeks of the region dangerous for expatriate oil workers. This led to shutdowns of operations by oil companies.

    Until recently, following several  interventions by the Federal Government, major pipelines, including the Nembe Creek Trunk Line (NCTL) and Trans-Forcados Crude Export Pipeline, have been under attacks. When such blow outs occur, it takes weeks, months or sometimes a year to get the pipelines back on stream.

    The Federal Government, however, has been able to check some of the militants through peace talks. Despite these, there is the need for a safer way of evacuating crude oil.

    Driven by the urgent need to encourage alternate field production potential of exploration and production companies, as well as infrastructure development in Nigeria, Pan Ocean Oil Corporation, operator of the Nigerian National Petroleum Corporation/Pan Ocean Joint Venture, began to seek alternative line to evacuate crude from the fields to export terminals.

    Pan Ocean has awarded a contract for the construction of Amukpe-Escravos Pipelines Project (AEPP) to Fenog Nigeria Limited, an indigenous company in 2011.

    The contract, which involves installation of 20-inch pipeline on the 67-kilometre route, will have the capacity to handle 160,000 barrels of oil per day (bpd) with capacity to accommodate third parties on crude oil evacuation to the Escravos Tank farm.

    The Amukpe-Escravos Pipeline Project (AEPP), a joint venture (JV) of the NNPC and Pan Ocean, The Nation learnt, is scheduled to begin operation before the end of third quarter of the year. It will offer an option to the “much-troubled” Trans Forcados Pipeline (TFP) for crude export from mid-western oil producers in the Niger Delta.

    “The primary objective of AEPP is to ensure that there is no disruption to crude oil export like the scenario we experienced on the TFP over the past 16 months where there was a total collapse of crude export. Nigeria’s experience and history has shown that it is not wise to be highly dependent on a particular source that is why we have AEPP as alternative to TFP which has been our major means of exporting crude oil as a joint venture (JV) partner,” John Okusolubo, senior pipeline engineer and Project Lead, AEPP, said.

    According to him, the construction of the AEPP entails the use of Horizontal Directional Drilling (HDD) to install the pipelines  to secure them from vandalism. The project’s objective is to provide Pan Ocean JV and other Niger Delta mid-western producers, such as Seplat, Nigerian Petroleum Development Company (NPDC), Conoil, Sahara and other oil producers in the area an alternative export pipeline route to the TFP that has been a casualty of many militant attacks.

    Nigeria’s crude export dwindled in the past two years because of the massive vandalism. The TFP has a daily capacity of 240,000 bpd, with average daily flows ranging from 200,000 bpd and 240,000 bpd. Amid its shutdown, Nigeria’s crude oil production fell from two million bpd to as low as 1.27 million bpd, losing its position as Africa’s number one crude oil producer and falling behind Angola several times over the past year.

    The AEPP will be a major export line. It will give opportunity for other injectors who may be stalled by the erratic vandalism of the TFP to join in transporting crude to Escravos. This achievement means Pan Ocean has an alternative line to export its crude and has also created an opportunity for others who have been using TFP to also export their crude without disruption.

    This project will help the country to continue to flow their crude and keep the economy alive. It is also imperative that other indigenous firms individually or collaboratively find ways to make the oil and industry uninhibited to boost the economy.