The Nation Newspaper

Category: Energy

  • Govt to take over ‘illegal’ oil and gas free zones

    The Federal Government may next week take over Oil and Gas Free Zones that have failed to register with the regulatory Oil and Gas Free Zones Authority (OGFZA), The Nation has learnt.

    It was learnt that the government decided to take this step after its use of moral suasion to make the oil and gas free zones comply to its regulations failed.

    An official of Lagos Deep Offshore Limited (LADOL), who pleaded not to be named, said the decision of the government  to force operators to register with the regulator was borne out of the need to provide standards.

    OGFZA’s Head of Operation/Technical, Mr Adekunle Ajayi, said the government had written  and visited Snake Island Integrated Free Zone(SHIFZ), Lagos Deep Offshore Limited, Lagos, and other oil and gas free zones across the country on the matter.

    He said the letter for the take-off of the operation was dated November 17,  this year, adding that the deadline is 30 days from that date.

    Ajayi said: ”Operators of Oil and Gas Free Zones can be said to have been operating unilaterally, when they refused to register as members with the Oil and Gas Free Zones Authority. Such actions are contrary to the Article No 8 of the 1996 constitution that established the Oil and Gas Free Zones Authority (OGFZA).

    He added that the body, in line with section 5, sub-sections 2 of the 1996 Constitution and other extant laws operating in Nigeria, is empowered to regulate the oil and gas free zones.

    “The Oil and Gas Free Zones Authority will not hesitate to apply sanctions in order to instill discipline in the sector. Nigeria has over 100 oil and gas free zones. While many of the zones are doing well, others are not. The body wants to ensure that the zones generate huge revenues for the government and also help in promoting the economy”.

    Ajayi said oil and gas free zones, have generated N76billion yearly and created over 200,000 jobs, adding that the zones have a the multiplier effects of on the economy.

    Also, OGFZA’s Head of Trade and Investment Department, Mr Adamu Knotogora, said the agency was not duplicating the roles of the Nigerian Export Promotion Council (NEPZA), adding that the two organisations perform different roles.

    NEPZA regulates the non-oil sectors, while OGFZA supervises  the oil and gas free zones.

    LADOL Nigeria Limited, Chief Executive Officer,  Dr Amy Jayesinmi, said the oil and gas free zones can provide huge earnings for the country, urging the Federal Government to provide enabling environment for their operators.

    She advised stakeholders, including the government, to ensure that LADOL and other oil and gas free zones become industrial hubs in West Africa.

    The issue,  Jaiyesimi said, would make Nigeria play dominant roles in oil and gas servicing in the region.

  • Board to issue rules for accessing $600m fund

    The Nigerian Content Development and Monitoring Board (NCDMB) is to roll out new guidelines for accessing the $600 million Nigerian Content Development Fund (NCDF), its Executive Secretary,  Simbi Wabote, has said.

    He spoke at the Sixth Practical Nigerian Content Conference in Abuja.

    Noting that operators had been complaining about problems in accessing the fund, Wabote said the guidelines would remove barriers.

    He said the fund had grown over the years, adding that six companies had accessed it. He did not list them.

    Wabote said: “I must say that it is not directly giving money to those six Nigerian contractors; it is about guaranteeing some of the loans that they got from the banks because we are not a funding institution.

    “Not much has been expended from that fund for capacity development. Part of the strategy of this new board is to come out with a very transparent process through which genuine Nigerian contractors involved in the oil and gas sector will have access to the fund.’’

    The Board pledged to expand its operations to the midstream and downstream sectors of the oil and gas industry in line with Section 106 of the Nigerian Content Act.

    Wabote listed the Floating Production Storage Offloading (FPSO) integration yard of LADOL in Lagos, which carries part of Total’s Egina FPSO, as one of the great achievements of the Nigerian Content. The project will begin operation between next year and 2019.

    Besides, Wabote said the Board would unveil a five-year roadmap that would chart a new Nigerian Content implementation path to increase value addition in the industry.

    He confirmed that the Board was rejiging the Nigerian Oil and Gas Parks Scheme (NOGAPS) to domicile oil and gas components manufacturing close to oil fields and involve local businesses in operations.

    According to him, the sites for the parks have been acquired while designs will soon begin. “We have set a timeline for every milestone we intend to achieve in the next couple of months; at least we should have one up and running to test the benefits before we replicate,” he said.

    The NCDMB chief said the major focus of the Nigerian Content Law was not “Nigerianisation” of the  sector, but “domiciliation” of value-adding activities.

    He said there were investment opportunities in fabrication and construction; manufacturing of component parts, equipment,  spare parts, accessories, drilling fluid, sub-sea production systems, line pipes, and personal protective equipment (PPE), among others.

    “While some people are worrying about the money they have contributed, many are not making their contributions as enshrined in the Act. This board will look at strategies to make them comply with the provisions of the Act,” Wabote said.

  • DisCos ‘probing corrupt officials’

    DisCos ‘probing corrupt officials’

    Electricity distribution companies (DisCos) are investigating their employees  suspected to be corrupt, The Nation has learnt.

    The exercise will help in checking workers who extort money from consumers before attending to their electricity needs. It will also fish out those who collect bribes under the pretext of providing meters, transformers, poles, cables and other equipment to customers. Those who connive with consumers to by-pass meters and tamper with their meters, among other untoward practices, will also be flushed out of the system.

    Any official found guilty will be sanctioned.

    The DisCos have been urging customers to provide information on workers who demand bribe from them.

    An official of Ikeja Electric (IE), who pleaded not to be named, said the DisCos were requesting for coded information to shield their customers from attacks.

    Executive Director of Research and Advocacy of the Association of Nigerian Electricity Distributors (ANED), Mr Sunday Oduntan,  told The Nation that the power firms were battling corruption. Besides, he said they were meeting the Ministers of Power,  Finance, Senate Committee on Power and its counterpart in the House of Representatives on how to recover N100 billion debt.

    He said the sack of corrupt officials would enhance their operations.

    According to him, the 11 DisCos were relying on ANED to deal with corruption.

    Oduntan said: “Members of the team have been travelling from one part of the country to another to investigate officials with questionable conducts. They were  in Abuja in August, and were planning to go to Bauchi, Gombe, Jos, Yola and other areas in the North on issues that border on corruption this December.

    ‘’Besides, the association and the power companies are relying on members of the public to furnish them with information that would help them in detecting corrupt officials in the sector.’

    “ANED and the DisCos are not trying to blackmail customers; they are helping to sanitise the industry. Bribery revolves round two sets of people – the giver and taker of bribe. The body is adopting an all inclusive approach to solve problems such as corruption, illiquidity, poor power supply, estimated billings, metering, and others in the industry,” he said.

    Oduntan said corruption was widespread in the sector, because people did not follow due process. He stressed that the average consumer of electricity offers bribe to DisCos’officials for services they had paid for.

    IE’s Acting Chief Executive Officer Mr Anthony Youdeowei said the firm would deal with workers found guilty of criminalities.

    Youdeowei, who spoke to The Nation, on the sideline of a stakeholders’ forum in Lagos, said the IE would sack workers with  questionabe characters.

    He said the stealing of cables and other equipment was affecting the firm’s  operation.

  • Experts: inadequate funding inhibiting reneweable energy

    Inadequate funding, poor maintenance, prohibitive cost of installation and training are  affecting renewable energy programmes in Nigeria, experts have said.

    Head of Energy and Environmental Desk, German Industry and Commerce, Mrs. Barbel Freyer and other experts, spoke at a seminar tagged: “Startups in renewable energy”, organised by the Federal Foreign Office of the Federal Republic of Germany.

    She said because of paucity of funds, operators could not access renewable energy materials, adding that banks too were not ready to fund those who want to generate solar, wind, biomass and other renewable energy.

    Mrs Freyer urged banks to provide funds for the development of renewable energy system in Nigeria. She said there was a huge market in the country, stressing that the sector’s contributions to the Gross Domestic Product (GDP) would increase soon.

    The Council for Renewable Energy (CREN), Projects Implementation Committee’s Chairman Idowu Andrew said consumers were not giving renewable energy enough attention, due to the high cost of maintaining  accessories.

    “Some consumers don’t care about maintenance, they don’t care to call on the technicians to carry out periodical or monthly clean-up on their renewable energy devices,” he added.

    According to him, if routine checks and clean-up are not carried out on the devices, the radiation level will reduce and this will lead to defects in the main device.

    Idowu said the body conducted a research on renewable energy eight years ago, adding that findings showed that many individiuals cannot afford the cost of owning a renewable energy plant.

    “Now, why should I invest about N 7 million in a renewable project, when 20 or 30 people can come together to invest the same amount of money on the project?

    ‘’Failure to make renewable energy private sector-driven, means that many people will find it difficult to invest in it. So, private investors should be allowed to invest more in renewable energy,‘’ he added.

  • Ghanaian power firm coming to Lagos

    A Ghanian company plans to establish a wiring and transmission equipment factory in Lagos this month to improve power supply in the country.

    The Chief Operating Officer, Reroy Group, Roy Quartey Papafio, told The Nation, during an energy forum in Lagos, that Nigeria was chosen because of its large market.

    He said: “We are already doing business in Nigeria. We have clients in the country, but we are looking at a situation whereby we would operate fully in the country. We have done market survey to know our clients and what they need. The aim is to satisfy the needs of our customers.’’

    Papafio said the company would support contractors in the power distibution chain, the same way it did for contractors in Ghana.

    He said this would improve power supply, create jobs and boost the economy.

    According to him, the plant will, at the onset, create direct jobs for 100 persons and provide thousands of indirect jobs.

    ‘’We want to invest in Nigeria, share competencies in such a way that we would contribute our quota to the development of the country. Often times, we look for skills abroad.

    ‘’Unknown to many of us, there are enough skills in Nigeria and other African countries. We have capacities that are under-utilised in Nigeria and other countries. Once Africans start investing in their continent, they would build skills and create jobs,’’ he added.

    Nigeria and other countries, he said, needed regional cooperation to develop.

  • Senate Committee scores power firms low

    Senate Committee scores power firms low

    The Senate Committee on Privatisation has scored some  privatised electricity companies low, saying they lack good service delivery.

    It, however  praised  the Benin Electricity Distribution PLC (BEDC) for doing well, stating that, it has introduced “innovative measures” to meet customers’ obligations.

    Speaking when the committee and a team from the Bureau of Public Enterprises visited BEDC, the panel chairman, Senator Ben Murray-Bruce, said: “Some of the privatised companies are well-run, some average, while some are badly run, but with what we’ve seen so far, about BEDC, I congratulate your management for being one of the well-run companies.”

    Murray-Bruce said the Mrs Funke Osibodu-led BEDC management had done well in community relations, payment platforms and customer services, despite the sector’s challenges.

    “We have seen the excitement of staff at the training programmes of BEDC, an enabling environment and air of camaraderie among management staff, which we have not seen in other places. This shows that the company is well-run, and we do not expect anything less than this, given the pedigree and antecedent of Mrs Osibodu,’’ he added.

    Bruce said the sector was battling with a N900billion debt, high foreign exchange and recession.

    He said he was concerned with how to solve the problems, adding that the committee would organise a public hearing on privatisation of the power sector, to address the problems.

    Mrs. Osibodu  urged the committee to persuade the Federal Government to dollarise the naira price for gas; which is the raw material for electricity production. The government should also take a cue from its Indian counterpart by subsidising  tariff for lower class residential customers.

  • Nigeria may lose fuel market to Ghana, says DPR

    Nigeria risks losing its fuel market in West Africa to Ghana, if it does not revive its four refineries and build new ones, Department of Petroleum Resources (DPR) Director Mordecai Danteni Ladan has said.

    At the Worldstage Economic Summit in Lagos, he said it was high time Nigeria refurbished its refineries and built more to reduce imports.

    Ladan represented by DPR’s Manager for Planning Kanmi Ayodeji, said Nigeria might lose a segment of the oil market following Ghana’s decision to build refineries and export petroleum products to Niger, Burkina Faso and Mali, among others in the subregion.

    He lamented that Nigeria was  losing in West Africa, and also not making money from crude oil sales in South and North America.

    Delivering a paper entitled: ‘’Achieving oil and gas reforms to boost indigenous participation, energy security,’’ Ladan said the country would make $500 on a barrel of crude if it stopped crude export and focused on refining  and selling crude oil derivatives, such as diesel, kerosene, petrol, rubber and other petrochemical products.

    This, he said, would help Nigeria to refine enough fuel for local consumption and for export to other countries in the sub-region.

    Ladan said: “Ghana will soon control the fuel market in West Africa if it continues exportation of fuel to countries in the sub-region. Ghana is deepening activities in the downstream sub-sector of its petroleum industry, and by extension West Africa, by refining and exporting fuel to neighbouring countries.

    “This means that the more fuel that is produced by Ghana, the more it exports the product and the more it dominates that segment of the oil industry in West Africa.”

    He described the development as a wake-up call for Nigeria to develop its refineries and build more.

    He noted that the Eleme Petrochemical Company in Port Harcourt, the Rivers State capital, returned to productivity months after it was sold to private investors.

    Refineries, he said, hold prospects for Nigeria because of its huge population, stressing that the Federal Government would realise more money from petroleum by-products.

    The DPR boss said the plastic, pharmaceutical, tyre, transportation industries and others would receive a boost when refineries work optimally.

    Ghana last month began fuel export from its Bolgatanga Petroleum Depot in Accra to Niger and Mali.

    Its Petroleum Minister, Emmanuel Armah-Kofi Buah, said at a forum in Lagos, that Ghana has another depot in Tema, which supplies products to Benin, Cameroun, Ivory Coast and others, adding that the country planned to export to Liberia.

    He said, barring any hitches, Ghana would dominate the fuel segment in the sub-region.

  • Shell wins SERAs’ CSR innovations awards

    Shell wins SERAs’ CSR innovations awards

    Shell Companies in Nigeria (SCiN) has won two trophies at the 10th Sustainability, Enterprise and Responsibility Awards (SERAs) in Lagos.

    Known as the Corporate Social Responsibility Awards, SERAs instituted the awards to celebrate companies that have impacted positively in their environments.

    At this edition, Shell Nigeria’s kinetic pitch won in the Innovation Award category, beating seven other nominees. It also won the Best Company in the  Climate Action category, beating five other competitors.

    Shell Nigeria Exploration and Production Company’s (SNEPCo’s) General Manager, Deepwater Production, Effy Okon, led its team which comprised General Manager, External Relations, Igo Weli; External Relations Communications Manager Sola Abulu; Head, Business Relations, Alan Udi; and Social Performance Discipline Adviser Hope Nuka, to receive the awards.

    Twenty-six awards were won by corporate organisations and individuals in recognition of their sustainable development and social investment efforts in Africa, including the President of Botswana, Ian Khama.

    Country Chair, Shell Companies in Nigeria and Managing Director of The Shell Petroleum Development Company of Nigeria Ltd (SPDC), Osagie Okunbor, said: “We are pleased at the recognition of our contributions to the development of Nigeria. Corporate Social Responsibility is an idea, which Shell has given priority, and the company is working to improve its partnership with non-governmental organisations (NGOs), governments and communities to deliver on its promise of developing human and material resources.”

  • ‘Why access to power remains poor’

    Nigerians are not getting enough electricity because of the few investors in the sector, Vice President, Green Electric, a France-based Renewable Energy firm, Dr Albert Okorogu, has said.

    In a telephone interview, he listed other reasons as low level of confidence by investors in the sector, huge interest rates imposed by banks on loans and frictions between the investors and the community, where the project will be sited.

    He said: “Many power projects are abandoned across the country because there is no money to finance them.The banks are not ready to provide loans to investors in the sector. Often times, banks made investors to repay the loans at double-digit rates of between 25 and 28 per cent, and short tenor. Cases abound where the Chief Executive officers (CEOs) of banks prefer to lend to bigger investors, and not smaller ones who are in the sector.

    He said generation, transmission and distribution of electricity have suffered neglect in recent times, adding that no government could provide electricity for its people once there are problems in the three areas.

    He said the grid needs repair to provide power to the 11 electricity distribution companies (DisCos) for supply to their customers.

    He urged the government to invest in renewable energies, such as solar, coal and wind to reduce burdens on the grid, arguing that renewable energy is key to the growth of the sector.

    “Access to power by people living in the urban and rural areas in Nigeria is very low. In the rural areas, access to power is very bad.The rural dwellers neither enjoy power from the grid nor electricity from solar and other forms of renewable energies. This is the reason behind poor living conditions of people in the rural areas,” he said.

    Okorogu said many investors would have invested in 100 kilowatts, 200 kilowatts and 300 kilowatts of electricity in rural areas, if they have the money.

    He said when a company either through solar or wind generates, for instance 100 kilowatts of electricity in rural areas, such firm has helped in boosting the socio-economic activities of the people.

    He urged the Federal Government to provide an enabling environment for investors in both grid and off-grid electricity generation, noting that only holistic and well implemented policies would revive the nation’s power sector.

    Okorogu, also a former Executive Director, Niger Delta Power Holding Company (NDPHC) Limited that oversees National Integrated Power Projects (NIPP), said besides communal clashes, stable power would not be realistic if the government and stakeholders fail to develop the sector well.

    The sector generates about 3,500 megawatts of electricity, which implies that Nigeria has a long way to go to meet its targets of 20,000 megawatts of electricity by 2020.

  • Total ends gas flaring from OMLs 102, 58

    Total Exploration and Production Nigeria Limited (TEPNL)  has completed gas flare down projects in two of its fields, its Managing Director, Nicholas Terraz, has said.

    At the Nigerian Gas Association’s Conference in Abuja, he said the flare out feats were achieved in Total’s offshore field in oil mining lease (OML) 102 and onshore acreage in OML 58.

    He said: “At Total, we are committed to better energy and have had a flare-out policy for producing fields and a no-flaring policy on all new developments since year 2000. The Amenam-Kpono and Akpo developments are examples of this in new projects whilst brown fields flare down projects have been completed in our OML 102 offshore and OML 58, onshore Nigeria.

    “In  a presentation entitled ‘’Harnessing natural gas: New opportunities for Nigeria’s energy agenda,’’ Terraz stated that with about 180 trillion cubic feet (TCF) of proved gas reserves and a potential for 600 TCF of which only 47 TCF is currently developed, natural gas is obviously a key resource for Nigeria, which apart from generating much needed export revenue, will also be a catalyst for rapid economic development especially in the areas of power generation and gas based industry growth.

    Total has been an active partner of the Federal Government and the Nigerian National Petroleum Corporation (NNPC) in the development of Nigerian gas sector. “We are a shareholder in Nigeria Liquefied Natural Gas (NLNG) and have been supplying gas to NLNG plant in Bonny since production started in 1999 contributing to significant reduction of gas flaring in Nigeria,’’he said.

    Total, with its Joint Venture partner NNPC, has built the Northern Option Pipeline (NOPL), a strategic 50 km gas pipeline with a capacity of 300 million standard cubic feet per day (MMSCF/D) designed to supply gas to the Alaoji power plant and other gas based industries in the Eastern domestic market. This is a major contribution to the efforts of the Nigerian government to develop the domestic gas market.  Gas supply to Alaoji plant through NOPL started on October 18, he added.

    He noted some achievements accomplished by the Nigerian Gas Master Plan such as growing domestic gas supply to about 1.3 billion cubic feet per day (bcf/d) from less than 1bcf/d, and export gas to over 3bcf/d.  Gas flaring has reduced from a high of 2.5bcf/d 10 years ago to about 0.8bcf/d today. Some major pipeline projects are either ongoing or have been completed. Escravos Lagos Pipeline 2 (ELPS 2) which will double the ELPS capacity and the Obiafu, Obrikom, Oben gas pipeline (OB3) East-West Interconnector are under construction while the NOPL from Rumuji to Imo River has been completed, he added.

    Terraz also noted some significant challenges in the gas subsector such as inadequate infrastructure along the value chain, insufficient pipeline work and increasing vandalism of existing ones, constrained power generation capacity due to inability to dispatch power to the grid even where sometimes gas is available, and upstream joint venture funding shortfalls, which delay projects including gas development and production projects, but this is being addressed in a creative manner by NNPC and JV partners.

    He also said lack of bankable commercial, fiscal and strong regulatory frameworks that stimulate new developments, including absence of PSC gas terms, were major challenge.

    Terraz said that Nigeria was important for Total. We have made major investments in the oil and gas industry over the past decades and this would continue. It is one of the countries we foresee long-term growth.