The Nation Newspaper

Category: Energy

  • NCDMB warns operators to remit contributions to Fund

    NCDMB warns operators to remit contributions to Fund

    •$100m NCIF ready for use soon

    The Nigerian Content Development and Monitoring Board (NCDMB) has warned  contractors in the upstream segment of the petroleum industry to remit their contributions to the Nigerian Content Intervention Fund (NCIF).

    Its Executive Secretary, Simbi Wabote, at a stakeholders meeting on NCIF remittances in Lagos, reminded stakeholders that the Nigerian Content Act provides that one per cent of every contract in the upstream sector of the oil and gas industry should be deducted at source and paid into the Fund.

    Many upstream companies, perhaps out of ignorance of the process of remittance, have not been remitting their contributions, hence, the stakeholders meeting. The forum was to recreate awareness on the need and how to remit contributions to the Fund.

    Wabote noted that the Act also gives the Board the mandate to manage the Fund and deploy it for projects, programmes and activities directed at increasing content in the oil and gas industry.

    He said: “NCDMB focused the early years of the Act in collections, putting in place an operating model for the utilisation of the Fund, establishing the Nigerian Content Development Fund (NCDF) Advisory Committee for efficient governance of the Fund; and creating confidence and trust of Industry stakeholders.

    “The Board opened up the Fund for utilisation from 2013, based on the approved operating model that segmented 70 per cent of the Fund to financing commercial interventions and 30 per cent for developmental initiatives and activities carried out by the Board on behalf of the industry.

    “Therefore, this forum is convened to engage stakeholders on the channels for remittance of Funds into NCDF account with the Central Bank of Nigeria (CBN). As most of you are aware, the NCDF was established by Section 104 of the Nigerian Oil & Gas Industry Content Development (NOGICD) Act of 2010. The Act provides that one per cent of every contract in the upstream sector of the Nigeria oil & gas industry shall be deducted at source and paid into the Fund.

    “Under commercial interventions, the Fund was leveraged to provide 30 per cent partial guarantee to commercial banks for loans granted to oil and gas service companies towards financing project execution, asset acquisition or facility upgrade. It also provided 50 per cent interest rebate on performing loans. Beneficiaries of the Fund include Ladol, Starz and Vandrezzer.”

    According to the NCDMB chief, developmental intervention covered Capacity Development Initiatives (CDIs) including training programmes, NCCF administration, establishment of NOGICJQS, establishment of oil and gas parks, direct equity participation by the Board in high impact projects as well as compliance monitoring activities carried out by the Board on behalf of the industry.

    He stated that the introduction of the Treasury Single Account (TSA) policy by the Federal Government and the need to deepen accessibility of the Fund for critical activities informed the need to re-engineer the Operating Model of NCDF.

    The Board has fully complied with TSA policy by opening Naira and foreign currency accounts in CBN, into which all NCDF remittances are to be made, stressing that NCDMB does not operate account in any commercial bank, contributors are therefore expected to pay all remittances into the NCDF accounts in CBN, he added.

    To enhance accessibility to the Fund, the Board in July 2016 signed a Memorandum of Understanding (MOU) with Bank of Industry (BoI) to establish the Nigerian Content Intervention Fund (NCIF). NCIF provides long term facilities to contributors to NCDF on the basis of all, in eight per cent interest rate.

    “As soon as we finalise the process for release of the initial $100 Million (N31 Billion) to BoI for the pilot phase, contributors to the Fund with manufacturing proposals in the oil and gas industry can approach BoI for the NCIF facility, which has a single obligor limit of$10 million and tenor of up to 5-10 years,” he said.

  • ‘How Trump’s presidency ‘ll benefit oil market’

    Nigeria may be on the verge of regaining its crude oil market share in the United States (U.S.) following President Donald Trump’s plan to build more infrastructural projects, The Nation has learnt.

    Nigeria’s exports to the U.S. fell from 950,000 barrels per day (bpd)  in 2010 to 57,000 bpd in 2015.

    Also, Angola suffered a decline in oil exports to U.S. as its exports fell from 484,000 bpd in 2009 to 124,000 bpd in 2015.

    However, all that has been confined to past as Trump plans to build more infrastructure for oil and gas.

    The former President, Association of International Energy Economist, Prof Adeola Akinnisiju, said if the plans materialise, it would open the door for production increase for Nigeria.

    He said Nigeria, which once had the U.S. as the main customer for exports, may find new opportunities to reignite its upstream sector as past oil selling agreements between the two countries become attractive once again.

    Akinnisiju said Nigeria was more likely to benefit from hypothetical unmet growing oil demand in the U.S. than Angola, adding that Angola had built stronger ties with China which is its main crude oil buyer in the recent years.

    He said the past two years witnessed low oil prices for U.S. and other countries, noting that the development created room for a considerable stocking of oil.

    Akinnisiju said: “For sometime now, members and non members of Organisation of Petroleum Exporting Countries (OPEC) have  had difficult times, getting enough earnings from the sales of crude oil. The development made U.S. and other countries to stock their oil, with the hope of selling it when the price goes up. The time has come for such countries to sell their crude and mak more money from it.’’

  • Fed Govt inaugurates committee for fuel supply

    The  Federal Government has set up a committee to provide a framework for the importation and supply of petroleum products, the National President, Independent Petroleum Marketers Association of Nigeria (IPMAN), Mr. Chinedu Okoronkwo, has said.

    He said the committee comprised officials of the Ministry of Petroleum Resources, Nigerian National Petroleum Corporation (NNPC) and its depots, privately-owned depots, Major Marketers Association of Nigeria (MOMAN), Independent Petroleum Marketers Association of Nigeria (IPMAN), Depot and Petroleum Products Marketers Association (DAPPMA) and relevant stakeholders.

    He told The Nation, that  the committee was to  provide modalities for fuel distribution nationwide.

    Others are: ensuring that marketers comply with the fuel pump price of N145 per litre, obedience to the laws guiding the importation of fuel, and hoarding of fuel, among others.

    According to him, the government is aware of the problems any attempt to increase the price of fuel will cause, and decided to step in to nip them in the bud.

    Okoronkwo said: “The government is keenly interested in ensuring uninterrupted supply of fuel in the country. This is the reason behind the decision of the government to set up a committee that would oversee the supply of fuel in the country. As things are, the government wants to keep to the rules guiding the supply of fuel, and also expected stakeholders including the marketers to do the same thing.”

    On the Direct Sale and Direct Purchase (DSDP) import model, Okoronkwo said the government did not make reference to the model, while setting up the committee.

    “The government did not state categorically whether the committee will be involved in the DSDP import model introduced to enable crude oil refiners abroad process the country’s crude oil into petrol and other petroleum products and further bring them to Nigeria. We are watching the events as they unfold by the government. Let us wait and see, whether there will be alternative to the model or not,” he added.

    He said IPMAN was ready to support any policy capable of improving the supply of fuel nationwide.

    The IPMAN chief said marketers were in between the government and the masses on issues relating to fuel importation and supply and had no reason other than to comply with the directives of the government on such matters.

  • NDPHC to inaugurate 20,000 solar units, 1,073 boreholes

    The Niger Delta Power Holding Company (NDPHC) is set to inaugurate 20,000 units of Solar Home System (SHS) and 1,073 solar powered boreholes across communities in the North.

    At the launch of SHS Project in Abuja, the Managing Director/Chief Executive Officer, NDPHC, Mr. Chiedu Ugbo, said: “With the Solar-Home-System initiative, NDPHC will be actively involved in the process of bringing power to rural communities, thereby stimulating social and economic activities in the rural communities located off the grid.”

    According to him, under the first phase of the programme, NDPHC will deploy about 20,000 units of the systems to the under-served rural communities with no access to grid electricity supply. It has deployed 200 in it pilot programme in Wuna.

    He said: “The beneficiaries of the 20,000 units are among the already identified communities of the nineteen (19) Northern States of the federation. The units will be deployed within a period of 12 months.

    “To vigorously drive this initiative, NDPHC engaged Azuri Technologies Group/Azuri Solar Power Nigeria Limited in July 2016. They are to ensure that the first phase of the initiative is achieved within 12 months.”

    Ugbo stated that the solar project was directed at auditing and re-activating 1,073 solar powered boreholes. “Already two of these boreholes are in Wuna Community are the first to be repaired and have provided access to clean water for the community. Villagers in Wuna can now make more efficient use of their time rather than spending hours operating manual pumps,” he said.

    Wuna community, with an estimated population of 800 people, predominantly hosts farmers without access to electricity grid. Before now, they spent money on torchlights, candles, kerosene lamps and generators.

    The NDPHC boss highlighted the achievements of the company, which include the expansion of 36 Transmission Company of Nigeria’s 330kV and 132kV substations across the country and the construction of 1,635Km of 330kv Double Circuit lines; 720km of 132kV Double Circuit lines; 10 new 330kV substations, seven new 132Kv substations,  6,150MVA of 330/132kv transformation capacity, 2,800MVA of 132/33kV transformation capacity; and the provision of over 25,000 complete self protection (CSP) transformers.

    He said in November last year, the Minister of Power, Works and Housing, Mr. Babatunde Fashola, inaugurated the 12-circuit Ikot-Ekpene 330KVA Switching Station and the associated transmissions lines with about 285km completed by the new management.

    “These projects are now assisting in evacuating into the national grid, electricity hitherto stranded in the Eastern Delta,” he added.

    The NDPHC was set up as a fast- track power sector infrastructure development. The 12-circuit Ikot-Ekpene 330KVA Switching Station and associated transmissions lines  and other projects are assisting in evacuating into the national grid, electricity hitherto stranded in the Eastern Delta.

  • PwC: Nigerian firms lack capacity for oil, gas exploration

    PwC: Nigerian firms lack capacity for oil, gas exploration

    •More assets divestments coming

    PricewaterhouseCoopers (PwC), an auditing firm, has said Nigerian indigenous oil firms still lack capacity to carry out oiland gas exploration despite the push by the Content Act passed into law in 2010.

    Its Director, Tax and Regulatory Services, Kenneth Erikume, said since the passage of the Act, aside funding challenges, indigenous operators still lacked  sufficient capacity to explore for oil and gas.

    Given these challenges, the Federal Government needs to focus more on building capacity at the local level and getting the Nigerian Content Development and Monitoring Board (NCDMB) to drive the acquisition of technical know-how requisite for the industry.

    He said with necessary expertise, the country would be able to create entities that could help other African countries in their oil and gas sector. This is the direction a country such as Nigeria, that started oil and gas operations in the 1950s, should be taking, he added.

    Erikume told The Nation that the government needed to address uncertainty of investments in the petroleum industry, respect some of the agreements and concessions it has with operators. When this is sorted out, investors would be more comfortable to invest, he added.

    He also urged the government to ensure that the Petroleum Industry Bill (PIB) is passed into law as quickly as possible.

    According to him, when an investor puts his money into a system, he will be interested in making progress.

    Since oil prices have started rebounding, he expressed optimism that investors would returm to the oil fields abandoned in the wake of the slump in prices.

    Erikume said the worst was over, adding that things could only get better. He said if oil price gets to about $60 per barrel, the country would begin to see more investments in the industry.

    “From the national perspective, what most investors are looking forward to is the final decision on the PIB, which has taken too much time to complete. It has implications on the fiscal quality which will impact on how much dollar an investor would be able to recover if he embarked on crude oil exploration and production,” he explained.

    Erikume said there would be more divestments by traditional international oil companies (IOCs). According to him, the multinationals will be focusing more on offshore and deepwater exploration where there are fewer issues of vandalisation and militancy.

    IOCs will continue to seek for divestment from onshore and shallow water assets and indigenous companies can pick up the assets.

    Erikume agreed that the challenge in passing the PIB was around balancing the interest of various stakeholders, including payment to the communities.

    In addition, there are conflicting issues around the fiscal provisions, which also have to be balanced in the interest of all.

    But, to address the issue, he said,  the National Assembly, in consultation with stakeholders, has to expunge the portion of the bill that is related to corporate governance and administration from the fiscal and commercial aspects of the bill.

    He noted that the oil and gas industry governance bill was being proposed. “So the industry governance bill is being considered now, I think it has passed second reading, I am hopeful because it is not carrying the baggage of the fiscal provisions of the full bill, it will be easier to pass into law,” he added.

  • Experts to govt: increase oil production

    With ongoing peace talks between the Federal Government and Niger Delta indigenes, experts have urged the Federal Government to increase oil production.

    The experts, including the President, International Institute of Energy and Law, Prof Wunmi Iledare, and the former Executive Director, National Integrated Power Project (NIPP), Dr Albert Okorogu, said  once government was able to substantially increase output, revenues accruing to the government would shoot up considerably.

    If government’s crude oil revenue  goes up by about 70 per cent, the foreign reserves will be expected to hit $35 billion in the next few years, they added.

    With increased revenue inflow, the government will be able to finance its budget, and meet other fiscal responsibilities, they noted.

    Speaking with The Nation on phone, against the backdrop of the rise in crude oil price to $56 per barrel, and ongoing peace moves of  Acting President Prof Yemi Osinbajo and his team in the region, they said growth in the oil industry, was dependent on the twin issues of peace in the Niger-Delta region and increased oil production.

    Iledare said the rise in the price of crude oil was a welcome development, urging inhabitants of the region to play a complementary role by allowing peace to reign. He said with this, the Federal Government would achieve its goal of having an improved and steady revenue from the sale of crude oil.

    He said: “No doubt, the industry is facing the twin problems of reduction in the production of crude oil and violence in the Niger-Delta region.  The issues have impacted negatively on the industry and the country, which relies on oil for sustenance. Now that the  price of crude oil is appreciating, residents of the Niger-Delta region must allow peace to reign in order to achieve optimal production of crude oil.”

    Iledare, who is the president, Association of International Energy Economists (AIEE), lamented that  breaking of oil pipelines, oil theft, departure of firms from onshore to offshore province, dwindling oil production and exploration activities, among others, had been hitting the industry.

    “For years now, the global price of crude oil has fallen steeply, resulting in the inability of the Federal Government to implement its fiscal policy. Now that the price of oil is rebounding, the problems that are associated with budget benchmark and implementation would become a thing of the past,” he added.

    Okorogu said the country was blessed with oil fields, which contained associated gas, adding that increase in production of oil would lead to a corresponding increase in production of gas.

    Okorogu said gas was the bane of the nation’s electricity industry, noting that the turbines would get gas for operation if activities in the petroleum industry improved.

    The six power generation companies (GenCos) and 10 power plants being managed by the Niger Delta Power Holding Company (NDPHC), under the National Integrated Power Project (NIPP) and others, would get gas and increase power generation. This means improvement in electricity supply and the economy, he said.

    They noted that Nigeria’s realisation of its 2.2 million bpd oil production budget benchmark was hinged on a peaceful Niger Delta and minimal or zero militancy. Therefore, government needed to improve ongoing dialogue with the region’s stakeholders to avoid the risk of being held to ransom due to delays.

  • UAE firms to produce 30mw from municipal waste

    With abundant  wastes in Nigeria, the Federal Government can borrow a leaf from United Arab Emirate, (UAE) where municipal wastes are being turned to energy. Masdar, Abu Dhabi’s renewable energy company, is to develop a cutting-edge waste-to-energy plant in Sharjah, in partnership with Bee’ah, the Middle East’s leading and award-winning environmental management company.

    This is contained in statement issued by the Account Co-ordinator, Sahara Communications, Amira Gamal.  According to Gamal, the feat was announced at Abu Dhabi Sustainability Week (ADSW) 2017, adding that diverting as much as 300,000 tonnes of solid waste from landfill each year, the project will help Sharjah reach its “zero waste-to-landfill” target by 2020 – and the UAE deliver on its 2021 goal of diverting 75 per cent of solid waste from landfills.

    Masdar and Bee’ah signed a Memorandum of Understanding (MoU) to collaborate in the development of new energy projects at ADSW 2016. The facility will incinerate up to 37.5tonnes of solid waste per hour to create 30 megawatts (Mw) of energy. This will add more power to what is produced by Bee’ah’s auxiliary waste-to-energy project, which will eventually produce a total of 90Mw and will be supplied to the Sharjah electricity grid.

    Khaled Al Huraimel, Group Chief Executive Officer (CEO) of Bee’ah, said: “Today marks the first venture in the realisation of the partnership that we announced with Masdar last year. The cutting-edge Waste-to-Energy plant in Sharjah is a concrete example of what this strategic partnership will deliver to the UAE and the communities that we serve. We, at Bee’ah, have always been driven by our mission to make the UAE an icon of environmental best practices, and this plant will help us achieve our ambitious environmental goals for the Emirate.

    “The agreement signed today will lead to more projects and bold initiatives that will help the partnership to ensure a sustainable and green future for the UAE.”

    Established in 2007, Bee’ah collects approximately 2.3 million tonnes of waste from nearly one million households in Sharjah each year, diverting around 70 per cent of its collected waste to its recycling waste management facilities from landfill.

    “As one of the leading renewable energy developers in the Middle East & North Africa, we are proud to enter into a partnership with Bee’ah that will both diversify our clean energy portfolio and help commercialise sustainable solutions to Sharjah’s and the UAE’s waste management challenges,” said Mohamed Jameel Al Ramahi, Chief Executive Officer of Masdar.

    He added: “With GCC countries having among the highest rates of per-capita waste production in the world, sustainable waste management solutions are both critically important and a clear business opportunity. Masdar will combine its proven expertise in renewable energy project development over the last ten years with Bee’ah’s track record in environmentally responsible waste management, to deliver a project that will catalyse further investment in waste-to-energy infrastructure in the UAE and beyond.”

    Masdar’s Clean Energy division is a leading developer and owner of utility-scale, grid-connected projects; remote applications providing energy access to communities away from the electricity grid; and carbon abatement projects. Since 2006, Masdar has invested in renewable energy projects with a combined value of US$8.5 billion; Masdar’s share of these projects is US$2.7 billion.

    Masdar’s renewable energy projects span the UAE, Jordan, Mauritania, Egypt, Morocco, the United Kingdom (UK), Serbia and Spain. The electricity generating capacity of these projects, which are either fully developed or under development, is 2.7 gigawatts (GW) gross.

    Elsewhere in the UAE, Masdar is adopting waste management best practices in the development of Masdar City in Abu Dhabi, one of the world’s most sustainable urban developments. Its on-site construction waste management demonstration project reuses and recycles waste building materials from the City’s construction, including metal, plastic, wood and construction aggregate.

  • ‘Nigeria has large market for renewable energy’

    Nigeria offers a large market for renewable energy and has greater opportunity than most of other African countries for investment in the renewable energy sector because of its population, the Country Director, Power for All Nigerians, Ify Malo, has said.

    Malo urged investors to take advantage of the huge renewable energy sources and market in Nigeria by investing in the sector. She noted that Power for All Nigerians is a globally decentralised renewable energy advocacy and campaign organisation, adding that the group came to Nigeria to drive the awareness and behavioural changes around renewable energy and to encourage more investments in the sector.

    She noted that renewable energy would help entrepreneurs and business owners who are actually to move their businesses to market and also allow new people who want to come into the sector to understand how they can do so.

    According to her, Nigeria being the largest country in the African continent represents a greater number of people that do not have access to electricity, adding that about 60 per cent of the Nigerian population representing over 95 million people does not have access to electricity supply.

    She told The Nation in Lagos that Power for all Nigerians was committed to increasing renewable energy access in the country through the centralised renewable wind and mini-hydro. “We want to see everybody including the least community completely electrified, they don’t have to wait for the grid to get to them,” she stated, adding that 2025 has been set aside as target period to achieve power for every single Nigerian.

    “Our goal is to see that everybody has electricity by the year 2025, and we believe that can be achieved with renewable energy,” she added.

    Malo said a number of programmes had already been initiated to drive the project including capacity building and training programmes. It would be working with the women for awareness building, and supporting industry stakeholders and entrepreneurs, adding that the group is also supporting end-users and creating a platform where people can actually learn more about renewable energy technology.

    Grassroots advocacy campaign, she said, had been scheduled between 2017 and 2019, and the group would be working with the youths, students on campuses as well as the rural women.

    Malo confirmed that renewable energy had been working in the country but noted that in the past contracts were given to people who were not certified in renewable energy installation or energy business , and months after those installations, the projects park up and it was mainly prevalent for solar street light system.

    “Renewable energy could be a way to having 24 hours sustainable electricity and that is why we are seeing more people getting into renewable energy business.

  • Firms blame forex scarcity for power problems

    The power sector is hard-hit by the rising cost of foreign exchange (forex). This has resulted in its inability to fulfil customer’s obligations, The Nation has learnt.

    The sector, it learnt,  was finding it difficult to get meters, transformers, transmission sub-stations, gas and other facilities, because of the forex shortage.

    The Nation further learnt that many of the firms were unable to get enough forex for importation while many others were scared of buying forex at N305 per dollar. The situation is impacting on their capacity to meet the needs of customers, who crave for improved electricity supply.

    The implementation of flexible exchange rate mechanism by the Federal Government last year to enable the firms source for dollars from multiple windows could not help as the companies struggle to get dollars.

    Group Leader, Generation, Sahara Power, Mike Uzoigwe, said power generation companies (GenCos) were finding it difficult to break even due to cost of dollar. Sahara Group owns Egbin Power Plant.

    Uzoigwe said the price of gas was denominated in dollars, stressing that firms, which hitherto paid N165 per unit of gas, now pay N430 for the same quantity of gas.

    Uzoigwe said: “From all indications, it is difficult for the firms to break even, considering the rising cost of dollars. You can imagine million of dollars, which a generation company (GenCo), would pay to buy gas. The astronomical rise in the value of dollar has resulted in a corresponding rise in the cost of spare parts used for our machineries.”

    Also, the Chief Executive Officer, Eko Electricity Distribution Company (EKEDC), Oladele Amoda, said forex scarcity was having debilitating effects on the activities of the sector. He said a transformer, which was N2.5million, currently costs N4million due to huge exchange rate.

  • Ikeja Electric alarmed over attacks on staff

    Ikeja Electric alarmed over attacks on staff

    Ikeja Electric has decried the increasing spate of violent attacks on its members of staff by some hostile customers.

    The company’s Head, Corporate Communications, Felix Ofulue, expressed shock at the level of violence towards members of staff of electricity distribution companies, citing a recent malicious incident at Akowonjo, Lagos, where an aggrieved woman allegedly stabbed a staffer of Ikeja Electric while discharging his official duties.

    He said: “It is quite disheartening that a customer will resort to such level of violence under any circumstance, to express her grievance without even considering the enormity of the action, which could have easily resulted in murder if the member of staff had died. This is appalling and totally unacceptable.”

    Ofulue stated that on a frequent basis, the field staff are attacked by aggrieved customers on matters, which are completely beyond the control of the distribution company (DisCo), such as the worsening power situation in the country.