The Nation Newspaper

Category: Energy

  • Why we launched N1b MSMEs’ solar energy fund, by BoI

    Why we launched N1b MSMEs’ solar energy fund, by BoI

    The Bank of Industry (BoI)  launched the N1billion solar energy fund for the Micro, Small and Medium Enterprises (MSMEs) because of the power challenge in the sector, its Acting Managing Director, Mr. Waheed Olagunju, has said.

    Speaking at the launch in Lagos, Olagunju said solar energy had become alternative for the MSME operators in view of the poor supply in the country.

    The cost of electricity accounts for about 40 per cent of operational expenses for most MSMEs, resulting in reduced profit margins and unsustainable ventures.

    Olagunju said: “Many Nigerians and Nigerian businesses that can afford other alternative energy sources have resorted to the use of electric generators at exorbitant costs. It was estimated that in 2015, manufacturers spent as much as N3.5trillion to generate alternative power due to the challenges in the supply of public electricity.

    “MSMEs play a major role as the engine through which most countries in the world thrive. Their growth and development are crucial to the level of industrialisation, modernisation, income per capita, equitable distribution of income, welfare and quality of life enjoyed by the citizenry.

    “Consequently, the performance of the MSME sub-sector is closely associated with the development of a nation. In Nigeria, the growth of this sector has been hampered over the years by a combination of factors, one of which is access to reliable electricity.

    “For Nigeria to, therefore, achieve sustainable and inclusive development, there is an urgent need to substantially increase the supply of modern and affordable energy services from sources that are affordable, accessible and environmentally friendly,” he added.

    Olagunju said renewable energy provides healthy and sustainable alternative to the continuous use of fossil fuels, with long-term cost saving advantages, especially in the absence of reliable power supply which is an essential ingredient for growth.

    “It is, therefore, important to support the provision of sustainable and reliable energy for MSMEs, which is why the Bank of Industry has decided to provide the solar energy fund to MSMEs.

    “The bank is already playing an active role in lighting up and powering Nigeria through the provision of solar energy solutions for rural communities, having successfully deployed solar solutions worth N240million to six off-grid communities, one each in Niger, Osun, Gombe, Anambra, Edo and Kaduna states, under its pilot scheme. These communities with an average of 200 homes each previously had no access to electricity, but since the provision of clean, reliable and sustainable solar electricity, the lives of the indigenes of these communities have changed significantly.”

    The bank’s General Manager, Large Enterprises, Mr. Joseph Babatunde, who gave a breakdown of how the Fund would be deployed, told The Nation that the projects would be implemented by select development partners to support agriculture, solid minerals, cottage industries, artisans, and service industry, and clusters to improve their operations.

    According to him, what will be due each applicant is N50 million,  adding that the allocation is scalable depending on the project.

    He noted that the initiative would not only boost employment generation, but it would also improve the standard of living of the beneficiaries, revamp the economy, and enhance poverty alleviation.

    Some of BoI’s development partners are Arnegy Solar Limited, GVE Projects Limited, GreenPower Overseas Limited, The Solar Shop Limited, Wayo Tropical Technical Limited, Blue Carmel Energy Limited, Novel Integrated Services Limited  and Solar Force Nigeria Limited.

    They will implement the projects from design to execution.

  • Optimism over rising oil price

    Firms in the upstream and downstream sector will bounce back if the price of crude oil continues to rise, stakeholders have said.

    Former Executive Director of the National Integrated Power Projects (NIPPs) Dr Albert Okorogu and  former Country President of the Association of International Energy Economists (AIEE) Prof Adeola Akinnisiju said operators would  raise their investments if the crude price hits $56 per barrel.

    Okorogu said momentum was gradually returning to the industry, adding that the sector would witness new investments soon.

    He said the decline in prices was affecting the sector, adding that operators, such as the international oil companies (IOCs) and their local counterparts, power generation companies (GenCos), gas producers and suppliers, among others, were hard hit.

    “The recovery of oil price is a good omen for operators in the nation’s oil and gas and electricity  industry. Once oil companies return to profitability, they would increase oil and gas exploration and the better for fertiliser and power companies,’’ he said.

    Okorogu said there would be enough gas for domestic consumption when oil companies increase the commodity. He said many power firms relied on Forcados pipeline owned by Shell for gas supply, adding that many power firms were stranded when militants broke the gas pipeline.

    Also, Adeola said operators would benefit when crude price appreciates further. He said activities in the sector had gone down, following the fall in the global price of crude.

    ‘’If the price of crude oil can increase from below $20 per barrel in 2014 to$56 per barrel in 2017, it means that the global oil market can record a price of $100 per barrel in the next few years,” Adeola said.

    He said the price of crude could pick up as the Federal Government  looks for money to finance critical infrastructure in the country, adding that the government relies on revenue from petroleum to finance budgets.

    The global oil crisis began mid- 2014, a development that has resulted in price crash and forced oil operators to prune their operations and workforce.

  • Saudi pledges commitment to oil output cut

    Saudi Arabia has said it will adhere to its commitment to cut output under the global agreement among oil producers, its energy minister Khalid al-Falih has said, expressing confidence that the Organisation of Petroleum Exporting Countries’(OPEC’s) plan to prop up prices would work.

    Khalid al-Falih, according to Reuters, spoke at an industry event in Abu Dhabi. al-Falih said he was encouraged by signs of commitments by other participants in the deal since it took effect on January 1.

    “Many countries are actually going the extra mile and cutting beyond what they’ve committed. I am confident about the impact and I am very encouraged about those first two weeks,” al-Falih said.

    The comments are the latest in a series of assurances from officials that participants will follow through on the agreement intended to help get rid of oil supply glut. Compliance with the deal will be a key influence in early 2017 on oil prices, which at $56 a barrel are about half their level of mid-2014.

    Under the accord, the OPEC and Russia and other non-members will curtail oil output by nearly 1.8 million barrels per day (bpd), initially for six months.

    Last week, Falih said Saudi output had fallen below 10 million bpd, meaning Saudi Arabia had cut production by more than the 486,000 bpd which it agreed to late last year under the producers’ agreement.

    Al-Falih said: “We will strictly adhere to our commitment,” adding that during the six-month agreement, Saudi output would either be at the kingdom’s target under the deal or “as is the case now, slightly below.”

    Producers were unlikely to extend the deal beyond six months and would allow market forces to prevail once the supply glut is eradicated. “My expectations are that the rebalancing that started slowly in 2016 will have its full impact by the first half,” he said.

    “Once we get close to the five-year average of global stocks and inventories we will basically let our foot off the brakes and let the market do its thing.”

    OPEC complied with up to 80 per cent of its last output cut in 2009, according to International Energy Agency data. A committee of OPEC and non-OPEC ministers to monitor the issue is meeting on Sunday.

    Kuwait also said last week it had cut production by more than it committed to and OPEC’s secretary general told Reuters he was confident of the level of commitment and enthusiasm among producers who agreed to the deal.

  • Why kerosene, diesel are scarce, by DAPPMA

    Why kerosene, diesel are scarce, by DAPPMA

    Why  is kerosene and diesel scarce?They are scarce because of the high exchange rate, the Depot and Petroleum Products Marketers Association (DAPPMA) has said.

    In an interview, DAPPMA Executive Secretary  Mr. Olufemi Adewole said: ‘’There is shortage of foreign exchange (forex)for marketers to import petroleum products, including kerosene hence the product is scarce and expensive. The winter period also contributed to the challenge because prices of petroleum products usually rise during this period.

    “There is higher demand for petroleum products outside the country during winter. It is well known in the international oil industry that during winter there is more concentration on some particular products and it is usually very expensive to import such products.”

    He urged the Federal Government to provide adequate foreign exchange to marketers to enable them import and increase supply.

    Independent Petroleum Marketers of Nigeria (IPMAN) National Operations Controller Mr. Mike Osatuyi said IPMAN members also did n’t have access to forex to import kerosene and diesel.

    He said his colleagues relied  on the Nigeria National Petroleum Corporation (NNPC) for their supplies.

    He called on the Central Bank of Nigeria (CBN) to take a second look at its forex policy, urging the government to fully deregulate petroleum products.

    “The issue is that it is not available, and secondly, most of our refineries are not loading. Even if they load, they will be selling it at exorbitant rates to marketers. Members cannot import because of forex and besides, kerosene is not fully deregulated. Unlike diesel, kerosene and petrol are not fully deregulated,” he added.

    A litre of kerosene sells for as much as N300 per litre across the country.

    NNPC Group General Manager, Public Affairs  Mr. Ndu Ughamadu said the corporation had begun production of kerosene and diesel at Kaduna, Port Harcourt and Warri refineries.

    He said the refineries would balance the disequilibrium in demand and supply of the products being experienced in some parts of the country.

    Warri Refining and Petrochemical Company (WRPC) Managing Director Mr. Solomon Ladenegan said the plant had been doing well since its Crude Distillation Unit (CDU) was revved up few days ago.

    He said the Warri Refinery refines two million litres of kerosene and three million litres of diesel daily. ‘’We pump the products to Pipelines and Products Marketing Company (PPMC) and they have started loading out the products to depots,’’ he said.

    Port Harcourt Refining Company (PHRC) Managing Director Dr Bafred Enjugu said refinery produces three million litres of kerosene and diesel daily.

  • Court adjourns Chevron’s appeal against Brittania-U on oil blocks sale

    Court adjourns Chevron’s appeal against Brittania-U on oil blocks sale

    The Court of Appeal in Lagos has adjourned hearing on the divestment of oil mining leases (OMLs) 52, 53 and 55 by Chevron.

    Two and half years after Chevron U.S.A Inc. and others appealed the judgment of a Federal High Court in Lagos, which assumed jurisdiction to hear a suit brought against them by Brittania-U Nigeria Limited over the divestment of Chevron interests in OMLs 52, 53 and 55.

    The court has fixed a date for hearing.

    The three-man panel led by Justice J. S. Ikyegh, after listening to the lawyers representing all the parties, fixed June 5, 2017 for hearing of the substantive suit.

    The appellants are Chevron U. S.A. Inc, BNP Paribas Securities Corp., Mr. Hermant Patel and Seplat Petroleum Development Company Limited.

    When the matter came up at the Appeal Court, counsel to the respondent Mr. Abiodun Owonikoko (SAN) told the court of a pending application, praying the court to dismiss the appellants’ appeal for lack of diligent prosecution.

    He said the appellants had filed a motion for extension of time to enable it transmit its records of appeal despite that Chevron was the one who filed the appeal.

    Owonikoko said his client had an applied for the dismissal of the appeal.

    But the appellants counsel, Mr. Etuwewe said the court did not oppose the application.

    The court granted the appellants’ counsel’s request. It awarded N20, 000 in favour of Brittania-U Nigeria.

    Brittania-U Nigeria had approached the Federal High Court, Ikoyi, Lagos, asking it to declare that by the final binding offer made by the plaintiff to the first defendant on November 14, 2013 at the invitation of the first defendant for US$1, 015, 000, 000, to acquire 40 per cent of Chevron Nigeria’s interest in Oil Mining Leases 52, 53 and 56, has been accepted by the first defendant by its conducts, representations on which the plaintiff relied and acted to its detriment, and that by provision of the Irrevocable Standby Letter of Credit for $250million opened in favour of the first defendant, to remain in force until September 14, 2014 as part payment; and further provision of firm letter of commitment by the plaintiff’s bankers for payment of the balance of $765million demanded for and duly furnished to the first defendant on November 15, 2013 the parties have entered into binding contract for the acquisition of the OMLs 52, 53 and 55 by the plaintiff from the first defendant for valuable consideration.

    Besides, the plaintiff prayed the court to declare that the demand by the first defendant on November 14, 2013 that the plaintiff asked its bankers to furnish firm commitment for payment of its final binding offer for about $1.15 million, for the acquisition of the 40 per cent  interest of Chevron Nigeria in Oil Mining Leases 52, 53 and 55 amounted to a counter offer to plaintiff’s final binding offer, which the plaintiff accepted on November 15, 2013, when it provided same to the first defendant for payment of the balance of $765 million in addition to the Irrevocable Standby Letter of Credit for  $250million opened in the favour of the first defendant, to remain in force until September 14, 2014 by reason  the parties have entered into binding contract for the acquisition of the OMLs 52, 53 and 55 by the plaintiff from the first defendant for valuable consideration.

    • An order in the alternative to the relief above granting special damages against the first and second defendants in $10,935,100 or as the court may adjudge fair and equitable as the enterprise value lost by the plaintiff for failure or breach of the contract of acquisition of the 40 per cent participating interest of the first defendant in OMLs 52, 53 and 55 in Nigeria stipulated in the Irrevocable Standby Letter of Credit and the Bid Process Document pursuant to which the parties conducted the sale.
    • Exemplary damages in $1billion for the wrongful interference by the second to fifth defendants acting in connivance or collusion with first defendant to unjustly prejudice and frustrate the contractual relationship between the plaintiff and the first defendant by making illegitimate and unauthorised use of sensitive business and proprietary information disclosed by the plaintiff in support of its bid to acquire the first defendant’s OMLs 52, 53 and 55 and which information were known by the second to fifth defendants to have been so disclosed in strict confidence and solely for the purpose of supporting the plaintiff’s bid but which were divulged to third party leading to huge business losses and reputational damage to the plaintiff.
    • An order of perpetual injunction restraining the defendants, their servants, agents, privies, proxies, fronts, staff hirelings howsoever called from proceeding to invite bids, offering or accepting, negotiating or engage in any transaction or contract calculated or purporting to transfer, sell, farm out, or otherwise charge, encumber deal in, dispose of or divest the 40 per cent participating interest of Chevron Nigeria in Oil Mining Leases 52, 53 and 55 in Nigeria in favour of any person or entity in derogation from or in disregard of the agreement entered into between the plaintiff and the first defendant on November 14 and 15, 2013, whereby the parties entered into binding contract for the acquisition of the OMLs 52, 53 and 55 by the plaintiff from the first defendant for $1.15 billion.
  • Power sector liquidity gap hits N1.1tr

    Power sector liquidity gap hits N1.1tr

    In  two months, the power sector’s liquidity gap has risen from N1trillion to N1.1 trillion, the Association of Nigerian Electricity Distributors (ANED) has said.

    Last November, Eko Electricity Distribution Company (EKEDC) Managing Director, Dr. Oladele Amoda put the liquidity gap at N1 trillion.

    Aned spokesman Sunday Oduntan told The Nation that the liquidity gap went up by N100billion at the beginning of this year.

    The development, he said, suggested a 10 per cent increase in the funding gap in the industry.

    He said the increase followed the operators inability to fund their businesses. Oduntan said the power distribution companies (DisCos) were the “worse hit”  because they contend with huge debts caused by non-payment of bills.

    Oduntan said: ‘’The liquidity gap was around N900billion in the third quarter of 2016, but it is now over N1trillion. The gap occurs because the Ministries, Departments and Agencies (MDAs) owe the DisCos over N600billion. The failure of the MDAs to pay their debts has affected the capacity of the DisCos to create new investments.”

    He said the power firms were not getting support from banks. “The sector is facing problems, such as liquidity squeeze, shortage of gas, poor generation and distribution, and weak metering system. The problems are financial and technical in nature,” he added.

    According to Oduntan, other issues confronting the sector include meter bypassing, stealing and vandalism of cables and other power equipment.

    Gas shortage, he said, is having a debilitating effect on the power sector, adding that there won’t be  “appreciable growth” unless the issue is resolved.

    Oduntan said the DisCos have adopted moral suasion in debt  recovery. He said the firms could not use the Economic and Financial Crimes Commission (EFCC) to recover debts because such approach is not in the country’s best interests.

    Amoda said the DisCos had made some progress despite their limited resources.

    He said the DisCos were having problems meeting the customers need because of  lack of funds.

    The  sector, he said, needed “proper funding” to achieve its goal of improving electricity supply.

    For year after the sector privatisation, there has been no improvement in power supply.

    Last week at the power sector stakeholders’meeting in Lagos, the Minister of Power, Works and Housing, Babatunde Fashola,  said the government with some development agencies were working out how to make funds available for the sector.

  • Sector’ll do well in 2017, say reports

    There are better days ahead in the oil and gas industry in the year, the Principal Analyst, Upstream Oil and Gas, Malcolm Dickson, has said.

    In a report on the industry, he said: “Companies will get more bang for their buck as development incremental internal rates of return (IRR) will jump from nine per cent to 16 per cent, comparing 2014 to 2017.

    “This is in part a result of a shift in capital allocation away from complex mega projects towards smaller, incremental projects in the Canadian oil sands and deepwater.”

    Also, Dickson said deepwater will revive this year, but over the long term, more cost cuts will be needed. Of the 40 larger pre-FID deepwater projects in the planning stage, about half failed to hit a 15- per cent IRR at $60/bbl.

    “The industry has selected the best projects to optimise and take forward. In 2017, it will have to turn its attention towards optimising the next wave of developments to get them sanction-ready,” Dickson said.

    Wood Mackenzie’s global upstream outlook for the year also predicts that the overall exploration and production spend will rise by three per cent to $450 billion, which is still 40 per cent below the total in 2014.

    At the same time, costs will continue to fall in the year, though only marginally, with a leaner industry emerging, it added.

    In the past two years, capital expenditure (capex) deflation has averaged 20 per cent, the analyst adds, but there is room only for small further reductions with capital costs set to fall by an average of three to seven per cent.

    Wood Mackenzie predicts the number of final investment decisions (FIDs) for new projects will exceed 20 this year, up from nine last year, but still some way below the 40/year average of 2010-2014.

    Typically, the new projects will be smaller in size, more efficient, and with capex/boe (per barrel oil equivalent) averaging $7/bbl (barrel), against $17/bbl for the 2014 projects.

    Senior Vice President, Global fiscal research,  Wood Mackenzie, Graham Kellas, added: “Some governments will be tempted to increase tax rates, but those with uncompetitive fiscal regimes will have to make changes to ensure they can attract still-scarce new capital.

    “Getting the risk-reward balance right will be a critical factor in attracting scarce investment capture in 2017, even for resource-rich hotspots such as Iran and Mexico.”

  • The unending metering crisis

    The unending metering crisis

    Metering customers remains a challenge for distribution companies (Dis Cos). Will this be addressed in 2017? AKINOLA AJIBADE asks.

    When in November 2013 the Federal Government privatised the Power Holding Company (PHCN), the buyers did not envisage problems.

    The problems include gas shortage, low power generation, irregular supply and metering.

    The 11 distribution companies (Dis Cos) are struggling to meet the metering deadline of five years, as contained in their Purchasing Agreements (PAs) with the Bureau of Public Enterprises (BPE).

    The Dis Cos, Nigerian Electricity Regulatory Commission (NERC), local manufacturers of meters and others have been trading words over metering.

    Penultimate week, NERC absolved itself of blame, saying it has done all it could to make the power firms supply their customers enough meters.

    Its Acting Chief Executive Officer, Dr Anthony Akan, said NERC should not be blamed for the problem since it has directed the DisCos to provide their customers meters.

    In a statement, Akan advised DisCos to invest more in metering, by partnering institutions, which can either produce or provide meters.

    Akan said: ‘’NERC, in line with the provisions of the constitution, made the power firms understand the necessity of reducing the burdens of paying estimated bills on consumers, by providing meters as at when due. The Commission has directed DisCos to issue meters to customers, and also threaten to sanction firms, which fail obey its directives on the issue.

    ‘’NERC introduced and implemented a scheme known as Credit Advanced Metering Implementation Initiative (CAPMI) to hasten the process of providing meters to consumers by the DisCos. We, at NERC, believed that CAPMI would assist in providing meters to consumers, who cannot wait for long to get meters from the power firms.”

    According to Akan, many customers got their meters easily through this means, while others went through the hog of waiting for  their service providers.

    Also, NERC’s Head of Consumer Unit Mr Blue Jack said the commission never shirked its responsibilities of ensuring that consumers get meters.

    He attributed the success recorded in metering to NERC’s oversight functions, adding that the agency has been monitoring the firms approved to distribute electricity.

    NERC, he said, visited the distribution firms in Port Harcourt, Benin, Ibadan, Eko and Ikeja, adding that the commission is satisfied with their performance, especially in meters provision.

    Jack said: ‘’To protect the interest of customers, NERC has started compiling the list of subscribers of the outlawed scheme known as Credit Advance Metering Implementation Initiative. We know that many subscribers were unable to get meters before the idea was scrapped by the Federal Government on November 1, 2015, for not being well implemented by the DisCos.”

    But, the Discos cited weak capital as the major reason for not metering their customers. They said illiquidity, caused by banks’ failure  to provide them credits and customers to pay their bills, are affecting their operation.

    The Association of Nigerian Electricity Distributors (ANED) Executive Director, Mr Sunday Oduntan, said the liquidity gap of over N900 billion and the N100 billion debt of the Ministries Departments and Agencies (MDAs) were inhibiting the  sector’s growth.

    He said the government should also be blamed for the low output recorded in the sector.

    Oduntan said: “If the DisCos are unable to meter their customers and, in return, generate revenue through them, Whose fault is that? The answer is simple: It is the fault of the consumers, who refused to pay their bills, and others. I’m telling you, once the firms are able to recover their debts, they would, without doubt, have enough money for their operation. When this happens, the issue of shortage of meters would no longer be there.”

    He said the metering gap would be closed, when power firms get funds to improve their operation.

    Eko Electricity Distribution Company (EKEDC) Chief Executive Officer Ademola Amoda said the DisCos were doing their best to procure meters for their customers, despite financial constraints.

    He said the liquidity gap was widening, arguing that it is affecting the firms’ capacity  to meet their obligations to customers.

    ‘’If consumers are paying their bills and banks  are providing loans to the DisCos, it would be easier to provide meters to consumers. By so doing, power firms would be able to recoup money on investment. Estimated billing does not pay. The DisCos made more money from metering their customers, because they are able to monitor their consumption and also charge them accordingly,” he added.

    But the Electricity Manufacturers Association of Nigeria (EMMAN) blamed the metering problems on the power firms.

    The umbrella body for manufacturers of meters in the country said the DisCos were not procuring enough meters.

    Its Secretary, Muhideen Ibrahim, said meters were in short supply because the DisCos were not buying the product from local manufacturers.

    He said the firms would meet the metering needs of their customers, if they were buying meters from the indigenous manufacturers.

    Ibrahim said: “There is no way the DisCos can absolve themselves of the blame on shortage of meters. The meters, which the DisCos are importing into the country, cannot meet the needs of their customers, yet they refused to patronise the local producers of the product.’’

    The DisCos, Muhideen said, know that when they buy meters from local manufacturers, they would have enough to supply. This, he added, will end.

    According to him, the Federal Government approved five firms to produce meters, adding that they have the capacity to produce enough meters.

    He said the firms would help close the metering gap by supplying an average of 50,000 meters monthly.

    MEMCOL Nigeria Limited Chairman Mr Kola Balogun said each firm could manufacture 50,000 meters, while some can produce more.

    MEMCOL, he said, could produce 200,000 meters, arguing that the Dis Cos’ allegation that local meter’manufacturers do not have enough stocks is unfounded.

    “Local companies are producing smart meters and pre-paid meters, which in all ramifications, are comparable to those that are  produced abroad. The allegation by the DisCos that local firms are producing sub-standard meters, the DisCos is not plausible. It is just a way of giving a dog a bad name to hang it,’’ he said.

    In a related development, the Technical Adviser to South African Revenue Protection Association (SARPA), Rene Bindeman, urged  the DisCos to find a way of providing their customers meters.

    He said lack of meters was affecting revenues in the market.

    Speaking at a workshop on data management and revenue recovery, organised by Abuja ElectricityDistribution Company (AEDC), Bindeman urged the DisCos to  install and protect their meters, because it is the only way they could boost their revenue.

    Explaining that meters are expensive to procure and install, he called for the manufacturing of meters in the country in order to make it cheaper for the Discos. He said: “If you do not have the money, there is no way you can meter customers because what will happen is that you need to be able to have meters in the field but meters cost a lot of money.’’

  • ‘How to fix power sector’

    ‘How to fix power sector’

    To fix the problems of the power sector, the Federal Government should strengthen its regulatory frameworks, assist the power distribution companies (DisCos) to recover the N100billion debts owed them by the Ministries, Departments and Agencies (MDAs), and criminalise electricity theft and vandalism, a former Assistant General Manager, Power Holding Company of Nigeria (PHCN), Toba Adebayo, has said.

    Other measures, he said, include monitoring of investors, who bought the assets of the (PHCN, investing in transmission to wheel power to the consumers, partnering the power firms to provide cost-effective tarrif and building a strong electricity market in the country.

    He said the sector was facing problems that required urgent attention from the government and other stakeholders in the value chain.

    Adebayo, in a paper titled: Post privatisation issues and the need for urgent solution and made available to The Nation, said the sector has since 2013 when it was privatised, been battling problems such as funding, obsolete networks, transformer lines and cables, among others.

    He said the government and investors were responsible for the problems in the sector, and should proffer solutions to them.

    He urged the government to  roll out policies that would make the Nigerian Electricity Regulatory Commission (NERC) to be alive to its responsibilities, and provide sanction for infractions

    He said the DisCos were unable to recover their debts, because they lacked the support of the government.

    Adebayo said: “Federal Government must put in place measures that would make the Ministries Departments and Agencies (MDAs) pay the debts owed the DisCos. The military and para-military agencies must pay for electricity services rendered to them, coupled with the fact that the government must be willing to discipline erring ones among them.’’

    On tarrif, he said the government needed to partner with the power generation companies (GenCos), power distribution companies (DisCos), gas suppliers, customers and other parties in order to arrive at a cost reflective tarrifs.

    He said the idea would enable the parties involved to review the tarrifs for the growth of the sector, when the needs arise.

    The power firms, he said, must meet deadlines on metering, adding that the development would enable them to measure consumption and get recover their debts.

    Adebayo, who is the Managing Director, Union Electrical Nigeria Limited, chided the government for the laxity in the sector, arguing that the issue was making investors to exercise unnecessary control.

    ‘’ The government sold 60 per cent equity to the investors, who bought PHCN, and retains 40 per cent shareholdings. But it appears as if the investors bought the sector 100 per cent from the Federal Government. The investors are enjoying too much liberty. The government must appoint desk officers in the offices that are owned by the investors, who bought PHCN, in order to get report on their operation.’’ he said.

    According to him, the government needed to invest in transmission to  satisfy the distribution firms.

    He advised the government to make stealing and destruction of electricity equipment a criminal offence to deter others from indulging in it.

  • Job recovery depends on 2017 oil outlook, says expert

    The ability of the country’s oil and gas sector to regain its outsourced jobs depends on the  global oil outlook next year, the President, Association of Outsourcing Professionals of Nigeria (AOPN), Dr Austin Nweze, has said.

    The country lost a a lot of its outsourced  workers to the global oil market crisis, which started few years ago.

    Speaking during a telephone interview, Nweze said many of the outsourced workers could get jobs, when there is increase in crude oil price.

    He said once this happens, activities would peak and people would be employed to fill the vacant positions.

    He said there was an increase in oil price from $33 per barrel to  $43 per barrel  recently, adding that the country would enjoy, if the increase  was sustained.

    Nweze said: “What Nigeria needs to do to bring back the lost jobs, especially the outsourced ones, is to pray that  oil price increase, in tandem with the market forces next year. When this happens, both the local and International Oil Companies(IOCS) that have stopped production, would resume operation. Besides, the companies would revive their operation, by employing qualified personnel.’’

    He explained that the industry relies on allied sectors for people that can add value to it, arguing that many of its workers would be picked from the various fields.

    He said workers in the sector are sourced from within and outside the country to ensure that it gets the best.

    He said the industry represents a larger section of the economy, arguing that all the sectors are found in oil and gas.

    Nweze said the sector employs engineers, statisticians, accountants, geologists, marine engineers, architects, surveyors and other professionals for growth.

    He said these professionals, most times, are outsourced because of their competences.

    He said many of the workers are employed by the operating firms in  industry.

    He observed that operators in both the upstream and downstream segment of the industry are losing jobs daily, adding that the sector would continue to either downsize or right size, in tandem with the economic realities.

    Nweze said: “There is a general lure of activities in the industry. Aside  the attendant loss of business in the upstream sector that greeted the sales of assets by Chevron, Conoco phillips and other oil majors, the downstream sector is battling problems.There are virtually no new exploration activities in the industry. This is affecting the capacity of the sector to perform optimally.’’

    He said multinational and local oil firms have lost a lot to crude oil theft, pipeline vandalism, and other untoward practices and are not ready to incur more losses, according to a research carried out by the association.

    ‘’From the research, oil and gas firms are ready to keep few, but not highly remunerated workers, such as security and maintenance officers who supervise and watch over their equipment. To oil and gas firms, their services are much needed in view of the unstable socio-economic environment in Nigeria. It is expensive to maintain expatriate workers. Their salaries are in foreign currencies, and it would affect the operational costs of the companies if such workers are kept for long. Now, the industry’s problems have rendered them redundant,’’ he added.