The Nation Newspaper

Category: Energy

  • Global oil demand may hit 109m bpd by 2040, says OPEC chief

    Global oil demand may hit 109m bpd by 2040, says OPEC chief

    Oraganisation of Petroluem Exporting Countries (OPEC) Secretary-General, MohammadBarkindo has predicted that global oil demand will reach 109 million by 2040.

    He gave the indication at the Nigeria Oil & Gas conference held in Abuja.

    In his keynote address, he said: “There is no doubt that oil will remain a fuel of choice for the foreseeable future.”

    He added that by 2040, oil and gas would still satisfy 53 per cent of the total primary energy demand.

    The OPEC scribe paid a working visit to the country last week. This  was his first since he assumed duties on August 1, last year.

    During the visit, he met Acting President Yemi Osinbajo,  Minister of State for Petroleum Resources, Emmanuel Ibe Kachikwu, as well as senior government and corporate leaders.

    He expressed gratitude to Osinbajo for the country’s support during the recent extensive consultations between OPEC and non-OPEC nations, which led to the three historic decisions: the ‘Algiers Accord, the Vienna Agreement, and the Declaration of Cooperation with 11 non-OPEC nations.

    The secretary-general also briefed the Acting President on the implementation of the decisions, as well as recent oil market developments and prospects.

    He said recent data confirmed that the OPEC-11 achieved a conformity level of 94 per cent last January, while  with participating non-OPEC producing countries, the conformity level stood at 86 per cent.  He added that all 24 countries were committed to the process and were confident of further improvements to reach the full and timely conformity of the decisions taken.

    The decisions, he said, were positively impacting the market as seen by the onset of a more bullish sentiment among oil investors and the global oil industry, as well as a welcome spillover effect to the global economy with improved performance in some key industrialised countries.

    “These positive indicators are leading to better short and medium-term perspectives for the market, in particular for investment,” he said.

    He highlighted the importance of the event and the prestige it has brought to the country over the years.  He said the event was created through the vision and leadership of the late Rilwanu Lukman, then OPEC Secretary-General, and the collaboration between  him and Dr. Alirio Parra, a former Minister of Energy & Mines of Venezuela,  now Honorary Chairman of the conference.

  • Senate panel seeks subsidy removal, price deregulation

    Senate panel seeks subsidy removal, price deregulation

    How can the  domstream oil sector be sanitised? It is by the removal of subsidy and total deregulation of fuel price says the Senate Committee on Petroleum Resources (Downstream).

    According to the committee’s chairman, Senator Marafa Kabir Garba, the refineries are not working because some people are making a killing from subsidy.

    Subsidy retention he said, would lead to job losses and also inhibit the building of indigenous capacity and expertise.

    Garba told The Nation that the sector  would grow when the twin problems of  subsidy and non-passage of the Petroleum Industry Bill (PIB) were solved.

    He said: “What the downstream requires is total deregulation and the passage of the PIB that is under consideration at the moment. We are currently considering the governance aspect of the PIB, which will deal with the regulatory aspect of the oil industry. We intend to make it like a one-stop shop where investors can have  easy access to the industry without the multiplicity of bodies that regulate the sector.

    “We will strengthen the Department of Petroleum Resources (DPR) and make it stronger, such that investors will walk in and go out from there with all they require as far as the petroleum industry is concerned.

    “The laws governing the oil industry are old and archaic. These contributed to the failure of a lot of things that pertain to the industry. That informed the decision of the government to introduce the PIB, but after several Assemblies of the National Assembly, the bill has never seen the light of the day. Discussions, deliberations go on for four years without success. But this National Assembly said it is determined to do it. We are giving it a different approach, we have broken it into parts – the Governance, Fiscals and Community/Socials. The Governance Bill will see the light of  day in the next few weeks, either at end of this month or early next month (April). From there, we will go to the fiscals that relate to monetary aspect of the industry, and from there, we go to the community and social issues.

    “As far as the Senate is concerned, we are doing everything possible under the leadership of Senate President Bukola Saraki, who took it upon himself and promised Nigerians that this time around the bill will be passed. Once that is done, the downstream sector will have a breathe of life.”

    On passage of the three parts of the PIB, Marafa said: “We will be able to pass the three parts of the bill before end of the year God willing. The Fiscal aspect has gone through the first reading, so it is coming up for second reading and if that is done, in the next three to four months, that aspect will be passed. Before we pass the Fiscal aspect of the bill, the community aspect would have gone through the first reading. We will give it all the necessary attention it requires.”

    On the resistance to removal of subsidy and total deregulation of the downstream by labour and civil society groups, Marafa said as a nation, we had to make deliberate and precious decision on what we intend to achieve, adding that just a few days ago, the Senate ordered investigation into the subsidy matter again.

    He said: “The the Nigerian National Petroleum Corporation (NNPC) alone collected over N5 trillion on subsidies from 2006 to 2015. The labour and civil society, among others, should come and let all stakeholders reason together on what fuel subsidy is all about. What value do Nigerians get from the subsidy compared to the amount of money that goes into it? If you combine the subsidy collected by NNPC with that of major and independent marketers, among others, it totals about N9 trillion in a scope 10 years, which is over and above our national budget.’’

    He continued: “Does the common man really get the right value from subsidy? If such huge funds were sunk into other sectors such as health, agriculture, roads, railway systems, would it not have benefitted the common man more? It would be better and with more value addition. The labour will always fight for increased salary for workers but where is the money? Subsidy on diesel aspect of petroleum products was removed and heaven didn’t fall.

    “Also, it is regulation that is keeping our refineries from working because people are feeding fat from subsidy. The same issue applies to the power sector, as long as people continue to import and Nigerians continue to buy generators, it will be difficult for the power sector to work. If you check the cost of the number of generators we buy in Nigeria, it is enough to generate enough electricity for the country. But because we as a people are sentimental about full deregulation of the downstream, we continue to lose by exporting value and jobs through export of our crude oil, import and subsidy of refined petroleum.”

  • PPPRA vows to sanction profiteers

    PPPRA vows to sanction profiteers

    The Petroleum Products Pricing Regulatory Agency (PPPRA) will sanction  marketers who exploit motorists and other consumers, its Acting Executive Secretary, Mr Victor Shidok, has said.

    Shidok, told reporters in Abuja that the agency would not allow long queues at filling stations beacuse of speculations that pump prices may be raised.

    The agency, he said, would ensure effective monitoring of products’ distribution and compliance with pricing template.

    He warned that Nigerians should not be disturbed by speculations on deregulation since the agency would deal with dubious marketers.

    The PPPRA chief lamented the loss of lives resulting from scarcity due to diversion, adulteration and storage of fuel at homes.

    According to him, since the  PPPRA was established 16 years ago, Nigeria has not witnessed the perennial scarcity of petroleum products apart from occasional hiccups from supply challenges. In  distribution, PPPRA has been able to establish stability in the downstream sector, he added.

    Shidok assured Nigerians that what the sector deregulated, they would  buy, particularly petrol, below the pump price adding:  “We can say that we have not fully deregulated, but I am bold to say that we have achieved 75 per cent of downstream deregulation,  making it possible to buy fuel without long queues at filling stations.”

    He noted that countries with deregulated regimes had mechanism to protect consumers from exploitation.

    In a fully deregulated regime,  the PPPRA, he said, would  ensure the effective distribution of petroleum products.

    Shidok explained that in a fully deregulated regime, the agency’s role would be restricted to commercial activities while the Department of Petroleum Resources (DPR) will continue to function as the technical regulator of  downstream activities.

    He explained that PPPRA would not embark on production of biofuel, but  would ensure an integrated approach to production.

    The roles of PPPRA in coordinating biofuels activities through provision of incentives and encouragement will enable Nigeria to replicate Brazil’s achievement in biofuels production. “Our roles via encouraging production by investors will boost production of liquid fuels and eliminate smuggling across the border. This again will boost Nigeria’s foreign exchange earnings,” he said.

  • ‘Why energy mix is vital’

    The Federal Government should use  energy mix, such as solar, biomass, and coal, to generate electricity to meet the  people’s energy needs, a former Special Assistant on Renewable Energy to the former Minister of Power, Dr Albert Okorogu, has said.

    In an interview, he said the government was relying on gas and hydro power, the two major on-grid means of generating electricity, to the detriment of solar, biomass, coal, and others, which could be wheeled on or off-grid.

    He said energy mix is what the country needs to provide sufficient and sustainable electricity for its people.

    Okorogu said: “While stakeholders, including the Federal Government, are providing on-grid  electricity for the people that are living in the urban areas, they should endeavour to make off-grid electricity available to the  rural areas, since they consume less power. Globally, industrial areas consume more energy than those in the rural areas. This is the reason  stakeholders are advocating for increased investment in solar and other renewable energies in the hinterlands.

    “There exists abundant resources for provision of on-grid and off-grid  electricity. Are we to talk of natural gas for domestic consumption and export? Are we to talk of water, solar, biomass, coal, which are natural endowments? They are too many to mention.”

    He said the country has enough gas for power generation and domestic purposes apart from the huge earnings, derived from exporting gas. According to him, countries, such as China and South Africa, generate huge volume of electricity because they combine various sources of providing power together.

    He said South Africa produces 40,000 megawatts (Mw) for its less than 50million population, while power generation is higher than that of China’s. The development, Okorogu said, had resulted in stable electricity in the two countries, urging Nigeria to toe similar path.

    He said the country’s generation has hovered between 3,000Mw and 5,000Mw for more than two decades, stressing that the country would have produced more megawatts if it had adopted energy mix to generate electricity early enough.

  • ‘Poor fiscal regimes disincentive to deepwater gas production ’

    Poor fiscal terms are hindering deepwater blocks owned by international oil companies (IOCs) from optimising gas production, the Chief Operating officer, First Exploration and Production Company Limited, Dr Saka Matemilola, has said.

    According to him, the gas terms are more favourable to those producing onshore than those in the deepwater where oil firms, such as Shell, ExxonMobil, and Chevron, operate.

    He said IOCs moved to deepwater offshore because they thought it would be more profitable to do so, adding that  the IOCs were not finding things easy.

    Matemilola said the issue was making stakeholders in the value chain to ask for more government participation in the sector.

    He said: “For some time, the industry has been clamouring for the provision of better gas terms, especially in the deepwater to ease the burdens of operation on the oil majors.

    “Beyond the issue of provision of better gas terms, is the issue of economics, which stakeholders including the government, must take into consideration to achieve the desired results in the sector.”

    Matemilola, also the Chairman, Society of Petroleum Engineers (SPE) Nigerian Council, urged the government and other stakeholders to adopt a private model when it comes to pricing and sale of gas.

    He said: “A willing buyer and a willing seller agreement must be in place to meet the needs of operators in the nation’s gas industry.”

    According to him, when a gas company is forced by the Federal Government to sell at a particular rate, the firm would not achieve its economic goal, noting that bigger and smaller companies are in the industry and that it would not augur well if all the firms were forced to buy gas at a uniform price.

    He urged the government to handle the agreement on associated gas with caution to avoid  crisis in the industry.

    According to him, the government is planning to jettison the agreement, advising that the government think about it well before taking decision on the issue.

    He said the government needed to consider a likely replacement for the agreement, which is being presented to the stakeholders for discussions.

    The government, he said, must think of the implications of jettisoning the agreement since it would not pay all the stakeholders.

    He added:“I understand that the Federal Government is saying that associated gas agreement would favour companies that have oil and gas but how about the companies that have only gas, which implies that they do not have oil to net off?”

  • ‘Amended NLNG Act barrier to investments’

    Hopes for economic and industrial growth will be dashed if laws, such as the Nigeria LNG Limited (NLNG) Fiscal Incentives, Guarantees and Assurances Act, remain, NLNG Managing Director  Tony Attah has said.

    Attah spoke at the Nigeria Oil and Gas conference in Abuja titled: Nigeria’s gas sector – the catalyst for economic and industrial growth?

    “It is time for gas. We need deliberate decisions and policies to decouple oil from gas and attract investment. We need to do that now. Investments in the gas and LNG industry are declining. It is already difficult as things stand to find Foreign Direct Investment (FDI) and growth in the gas industry has been cautious after the recent down-beat global crude oil price. In addition to this, Nigeria is ranked 167 of 189 countries in the ease of doing business index.

    “Yet, experts maintain that there is the strong likelihood of increased gas demand infuture and that is where the silver lining is. However, if we continue with the self-inflicted barriers in our gas industry, we might miss the opportunity to make this country a major player in the global energy mix,” he said.

    He said the industry has benefited the economy, diversified the country’s revenue and export base as well as channelled FDI into it. It has created jobs and contributed significantly to the local manufacturing capacity in the country. But all that would be laid waste if we continued to shift policies and renege on international agreements that put some framework into the business and generated investor confidence, he added.

    ‘’We need to be creative with incentives that will attract investments and preserve the sanctity of contracts and agreements for all of this to come together in our national interest,’’ he said.

  • OVH Energy ends Teens Can Cook contest

    OVH Energy ends Teens Can Cook contest

    OVH Energy Marketing, a licensee of the Oando retail brand, has ended its cross regional Teens Can Cook competition.

    The contest was part of the oil retailer’s clean cooking initiatives to create awareness on the health, environmental and socio-economic benefits of adopting the use of Liquefied Petroleum Gas (LPG) in  domestic and industrial cooking.

    The grand finale, supported by the Nigerian Bottling Company (NBC), was held at the University of Lagos, where eight schools gathered to witness the results.

    This edition kicked off with 40 schools drawn from Lagos, Abuja, Port Harcourt and Benin City.

    Acting Chief Executive Officer (CEO), OVH Energy Marketing, Mrs Olaposi Willims, said: “Our aim is to enlighten the future generation at an early age on the myriads of health and environmental benefits of LPG, and we wanted to do this by involving the teenagers in activities, which would be educative as well as entertaining.”

    She lauded the schools, noting that the skill, intelligence and zeal displayed by the teenagers were inspiring.

    The contestants were asked to prepare one of Nigeria’s favourite dishes, fried rice and chicken in 45 minutes.

    Participants were judged on preparation, taste, presentation/creativity and cleanliness of the food.

    Among the judges were the founder and head chef of Red Dish Culinary School, Chef Stone; National Account Director, Nigerian Bottling Company, Mrs. Adeyanju Olomola and CEO, Rubs and Sauces, Mrs. Yemi Adeosun, a certified nutritionist.

    At the end, Emmanuella Walison from Niger Delta Science School won. She said: “I never dreamt of the opportunity to show my cooking talent in a big competition like this but OVH Energy Marketing made it possible.

    “Cooking is my passion and winning is the icing on the cake.”

  • Oando Gas & Power divests interest in captive power plants

    Oando Gas & Power divests interest in captive power plants

    Oando Gas and Power (OGP), a subsidiary of Oando Plc, has divested its interests in captive power plants and focused on gas infrastructure expansion.

    Speaking on the sideline of the just-concluded Nigeria Oil and Gas Conference and Exhibition in Abuja, the Managing Director, Mr. Bolaji Osunsanya, said: “As portfolio developers, we’ve divested from our captive power plants and aggressively focused on the expansion of our Gaslink franchise, which serves over 160 industrial and commercial customers across the Greater Lagos Area.

    “Our Joint Venture subsidiary with the Rivers State government, Central Horizon Gas Company, is poised to complete an additional 9km of pipeline infrastructure within the Trans-Amadi area by the end of first quarter of this year.

    “Also, our Compressed Natural Gas (CNG) entity, Gas Network Limited (GNL), which is our pioneering virtual pipeline initiative currently, delivers gas to customers within a 100km radius.”

    In the medium term, Osunsanya said the firm’s five critical flanks are to ensure gas supply security, develop virtual pipelines asset stable and gas processing infrastructure. In the long term, he noted that OGP expects long-term appropriate infrastructure financing, expansion of last mile distribution infrastructure with a particular focus on regional growth.

    The company, Osunsaya said, is set to take the final investment decision (FID) on its planned multi-million dollar 20 million standard cubic feet per day (mmscf/d) mini liquefied natural gas (LNG) plant to be located in Ajaokuta, Kogi State, before end of June.

    He said after taking the FID, construction of the facility would begin in the third quarter of the year. He said the essence of building virtual in the Ajaokuta mini-LNG is to create other ways of bringing natural gas to industrial and commercial concerns because pipeline vandalism is taking a toll on their operations.

    OGP is developing LNG facility via its newly-created Transit Gas Nigeria Limited (TGNL) subsidiary in partnership with Nigerian Gas Company (NGC).

    The facility is aimed at meeting the gas supply requirements for captive power plants, embedded generation, and industrial clusters in the Northern region, as well as stranded customers in the South.

    Osunsanya also said the firm has developed over 260km of gas pipeline distribution network, and pioneered the development of gas infrastructure and solutions across southern Nigeria, adding that the company has divested from its captive power plants.

    “OGP targets to increase gas sales levels from an average volume of 47mmscfd in 2016 to about 70mmscfd in the year. It also expects to complete and inaugurate projects, such as Greater Lagos 4 (GL4), and Central Horizon Gas Company (CHGC) expansion as well as aggressive regional expansion opportunities into Benin, Togo, Ghana, and Senegal,” he said.

  • Reps seek appropriate pricing for petrol

    MEMBERS of the House of Representatives are looking at the pricing of petrol to ensure that marketers get real value for their investment.

    The Chairman, Ad-hoc Committee on the Review of Pump Price of Petrol, House of Representatives, Hon. Raphael Igbokwe, made this known during their tour of facilities of NIPCO Plc in Apapa, Lagos.

    The lawmakers praised NIPCO for making the product available at regulated prices across the country.

    Igbokwe said users of the product  should get good value for their money.

    In a statement by NIPCO’s spokesman, Mr. Taofeek Lawal, Igbokwe said NIPCO was a case study of an indigenous firm in the hydrocarbon industry that started from a humble beginning to become a major player.

    He said: “We have come to see the magic wand that has made you to have this splendid leap in few years of your operations.

    “Yours is an excellent show case of good partnership of indigenous petroleum marketers and a core investor that is fast changing the face of hydrocarbon products storage and marketing in the country.”

    According to Igbokwe, stakeholders support for organisations, such as NIPCO is a veritable way of attracting more Foreign Direct investment (FDI) into the industry, adding that with the rising profile of the company, there is hope for more FDI inflow into the economy.

    Commending the acquisition of majority shares in Mobil Oil Nigeria (MON), Igbokwe said it was good for an indigenous firm to acquire controlling equity in downstream section of an international oil company (IOC).

    He noted with satisfaction the state-of-the-art facilities in the terminal and the services being rendered in the storage and loading of petroleum products, adding that also worthy of mention is the seamless inflow and outflow of trucks at the depot.

    The firm’s Group Managing Director, Mr. Venkataraman Venkatapathy said the visit of the lawmakers would afford them the opportunity to see the firm’s facilities and do an on-the-spot assessment of their efforts in the industry.

    He told the lawmakers that NIPCO had been in the forefront of harnessing the great potential of the nation, especially in natural gas aside from storage and distribution of white products.

    According to him, operations at the terminal are highly automated with little human intervention to guarantee high level of efficiency and accuracy in the storage and dispense of products.

    Its Group Executive Director  Corporate Services, Alhaji Aminu Abdulkadir, said if given the required support to access product, Nigerians would get good value for their money.

    He noted that the company hardly does 30 per cent of its installed capacity, adding that with an improved product access, NIPCO could change fuel supply equation across the country.

    Aminu said NIPCO employed Nigerians as part of growing the local content as enshrined in the Nigerian Content Act.

     

  • NNPC calls for tariff harmonisation of non-oil products

    Chief Operating Officer, Upstream, Nigeria National Petroleum Corporation (NNPC), Dr Bello Rabiu, has called for the harmonisation of tariffs on non-Economic Community of West African States (ECOWAS) goods to promote cooperation on non-oil exports.

    Rabiu spoke during the panel session of West African International Petroleum Exhibition and Conference (WAIPEC) organised by the Petroleum Technology Association of Nigeria (PETAN) in Lagos.

    At the session titled: How Nigerian and West African market can better compete in a weak and disruptive oil market, he noted that the harmonisation would counter the effects of smuggling across  borders in the subregion.

    Rabiu, who was represented by Dr Siky Aliyu, managing director, National Engineering and Technical Company (NETCO), said the harmonisation would spur coastal countries to make their ports preferred import destinations to attract more trade flows and revenue.

    “It will promote trade among West African countries and by extension ECOWAS can forge partnerships with Europe, Asia, among for the export of their agricultural produce. There is need to diversify the West African economy base to be able to handle shocks caused by oil prices.

    “In terms of economic and trade cooperation among ECOWAS countries, the recently-proposed Niger-Kaduna Refinery crude export pipeline offers a panacea for landlocked West-African countries and such should be promoted as it acts as an alternative source of crude supply to an existing ready market.

    “Similar infrastructure running from Chad to Cameroun’s Atlantic coast is in operation,” Rabiu said.

    He also said there was a need for new investment in refining capacity to grow and sustain internal consumption and promote external trade among West African countries, adding that there were plans to increase capacities in Nigeria, Ivory Coast and Niger Republic. With regard to Nigeria, it is private-sector led – Dangote Refinery, which is proposed as a 650,000 barrels of oil per day (bopd) in Lekki, Lagos.

    “Aside this, NNPC’s plan is to rehabilitate, revamp and upgrade all existing refineries to ensure that by 2019 there would be no more product import. Similarly, we are supporting the concept of condensate refineries to refine more condensates in-country,” he added.

    According to him, based on the foregoing, it is imperative that we  balance high crude output with high refining capacities to reduce import costs and charges, export charges, subsidy payments, among others.

    “This will effectively position us to get more value from the crude fraction as opposed to a single price value for the crude alone. It will also ensure that we are less exposed to market fluctuations and then give us control of products marketing and supply. As we reduce reliance on imported refined products, we would be more competitive,’’ Rabiu added.