The Nation Newspaper

Category: Energy

  • Navy opens school hostel built by NLNG

    The Nigerian Navy Secondary School, Akpabuyo, Calabar has been opened.

    It was built by LNG Limited (NLNG) as part of the company’s contribution to the development of education.

    The 320-capacity boys hostel, taken over by NLNG for completion last year at the cost of N45 million, was inaugurated by the Chief of Naval Staff, Vice Admiral Ibok-Ete Ekwe Ibas.

    Vice Admiral Ibas said: ‘’Our officers and the students thank NLNG for this kind gesture. I want to acknowledge that NLNG has been a great partner to the Navy in ensuring the provision of security in the maritime sector. This gesture further strengthens that partnership because there is no way the Navy and, indeed, the Federal Government can provide these infrastructure. Partners that care and think about Nigeria, especially our children, such as NLNG, deserve our commendation. The Navy will continue to appreciate NLNG’s contributions towards capacity building and assures you that this building will be utilised to create positive impact on students of this school.’’

    The General Manager, External Relations at NLNG, Kudo Eresia-Eke, said NLNG through this and other corporate social responsibility CSR) initiatives across the country has demonstrated its commitment to the advancement of education, which is the bedrock of any sustainable development in the society.

  • ‘Power sector revenue loss may hit N809b’

    ‘Power sector revenue loss may hit N809b’

    Should the lull in power supply persist, the sector’s revenue loss will be about N809.8 billion by next January, the Executive Secretary, Association of Nigerian Electricity Distributors (ANED),  Sunday Oduntan, has said.

    Besides, payment for electricity bills has fallen substantially as only 35 per cent of consumers pay   yearly.

    The loss in revenue was caused by problems, such as non-payment of bills by consumers and failure of the power distribution companies (DisCos) to pay the power generation companies (GenCos) in time,  among others.

    The Nation gathered that the sector loses between N10 billion and N15 billion to a wide range of   industry problems, such as pipeline vandalism, low level of water at the hydro power plants, erratic power supply, and inability of the consumers to pay their bills, among others.These problems have contributed to the erratic power supply in the country.

    Oduntan in a telephone interview with The Nation said the sector would be losing N809.8 billion by January, next year, if there is no improvement in the operation of the industry.

    He said the sector had recorded a shortfall in liquidity of N383.2 billion between 2013 and 2015, adding that the figure would increase as Nigeria’s economy continues its abysmal performance.

    Oduntan said: “Between November 1, 2013, when the new investors took over the unbundled assets of the Power Holding Company of Nigeria (PHCN) and December 2015, the sector lost revenues of about N383.2billion. This is the loss recorded by the sector in two years. This is lower than the total loss of N809.8 billion, which the industry will incur between December 2015 January 2017 if the industry continues to grapple with its problems.

    He said losses accruing  to the sector were substantial, adding that it would be difficult for the industry to recover the loss soon going by the numerous challenges facing it.

    According to him, the power generation companies, the electricity distribution, and others at the value chain, have suffered losses. He stated that the loss in revenue would continue if urgent steps are not taken by the Federal Government to improve the operating environment.

    Oduntan also said 30 per cent of the electricity consumers pay their bills yearly, stressing that the issue has impacted negatively on the operation of the sector.

    He said: “Consumers on average pay N2,000 out of N5,000 monthly bills DisCos have charged them. Cases abound where many consumers do not pay anything.  A research conducted by the association shows that less than 40 per cent of consumers in Nigeria pay their energy bills. The issue has further compounded the woes of the power firms and the economy in particular.”

    The industry, Oduntan said, is battling liquidity problems following the loss in revenue recorded in the past five years. He explained that the problems in the sector are in stages because they do not come once, stressing that the operators are badly affected.

    Also, the Chief Executive Officer, Frontiers Oil Limited, Mr. Thomas Dada, said the loss cuts across every aspect of the sector. He said gas suppliers are counting their losses too due to problems in the industry.

    He explained that pipeline vandalism has ripple effects on the sector because every operator in the value chain is affected by the development. “Both the producers and suppliers of gas used in generating electricity have lost huge revenues to pipeline vandalism. Whenever pipelines are vandalised in the Niger Delta region, producers and suppliers of gas count their losses. On several occasions, they incur double losses while trying to stay in business,” he said.

  • Forex threatens power production

    •Equipment cost soars by 90 per cent

    The imbalance in the foreign exchange (forex) market has hindered smooth operation by the nation’s power sector as dollar exchanged for about N470 at the parallel market, The Nation has learnt.

    Despite the implementation of the flexible exchange rate mechanism that allowed for sourcing of forex from multiple sources, operators in the sector are battling scarcity of dollars.

    It was gathered that firms, on account of high exchange rates, are unable to repay the loans they took to buy the assets of the Power Holding Company of Nigeria (PHCN) in 2013.

    Also, it is difficult for the firms to get enough dollars to import meters, transformers, and other materials needed to meet their obligations to customers.

    Industry sources said operators may be forced to further prune down the cost of operation if naira continues its free fall amid the recession in the economy, by downsizing the workforce and reducing output.

    The Group Leader Generation, Sahara Power Group, Micheal Uzoigwe, said the lopsidedness in the exchange rate was affecting activities in the industry.

    According to him, the high cost of foreign exchange has resulted in price increase of spare parts by 90 per cent. He  added  that the issue was having ripple effects on the sector and the economy,  explaining that output in the value chain has reduced to an abysmal level due to high cost of obtaining dollar in Nigeria.

    Uzoigwe said: “Getting enough dollars for transactions and achieving optimal capacity is a problem to electricity generation companies (GenCos). The reason is because the price of gas is denominated in dollar and that power generation companies are unable to get enough money to buy the product. He said firms were paying N165 per unit of gas two years and they are now paying between N460 to N470 for the same unit of gas in 2016, then there is a problem.

    “Two things are likely to happen. First, the GenCos would not be able to get enough millions of cubit of gas for generation. Secondly, the firms would find it extremely difficult to break even in the industry.”

    Uzoigwe said Sahara Power Group, bought Egbin power plant for $400million in 2013 when dollar exchanged for N165, adding that the Group now pays a lot to service the debt.

    “We at (Sahara Group) bought Egbin Power Plant for $400million few years ago. The Group took loans from the banks to buy the plant. Now we are repaying the loan. Given the fact that the value of dollar has increased greatly, the Group is paying more money to service the debt. The additional money that is being paid on the debt would have been channelled to a more productive usage,” he added.

    Also, the Chief Executive officer, MOMAS Nigeria Limited, Mr. Kola Balogun said operators across the value chain are struggling to survive in the face of bad economy.

    He said the woes of the operators have been compounded by the rise in the value of dollar in recent times, adding that companies are not recording growth because Nigeria runs an import-dependent economy.

    He said many operators in the sector rely on accessories imported from abroad for production, stressing that they spend a lot of money on production when cost of importation is factored in.

    Balogun asked: “Are we to talk of gas that its price is denominated in dollar? Are we to talk of pre-paid meters, sub-station equipment and other tools that are imported? Are we to talk of money spent on seeking partners abroad by power firms?”

    Balogun, whose firm manufactures meters said indigenous meter producers are having problems despite the fact that they are sourcing 60 per cent of their materials locally.

  • Deregulation will attract more investments, says MOMAN

    Deregulation of the downstream sub-sector of the petroleum industry would attract more investments and enhance efficient operation of the industry, the Executive Secretary, Major Oil Marketers Association of Nigeria (MOMAN), Obafemi Olawore has said.

    Olawore also noted that for a quick realisation of such investments,  the National Assembly has to speed up the processes of passage of the Petroleum Industry Bill (PIB) into law, adding that a lot of investments have been diverted to other countries due to non-passage of the bill.

    He stated that Ghana, a neighbouring country, studied  Nigeria’s  PIB and copied some aspects of the bill,  adding that  Ghana has  deregulated its oil and gas industry, while Nigeria is yet to deregulate its own.

    Nigeria is still  debating the bill, years after its conception, he added.

    The MOMAN chief who spoke with The Nation in Lagos dismissed insinuations in some quarters,  that deregulation would increase the pump price of fuel.

    The removal of subsidy,  by the Federal Government, Olawore said,  has made it possible for fuel to be sold at different prices.

    He said there were fears that subsidy removal would bring about astronomical increase in fuel price, but the contrary is the case as some sell even below the officially approved price.

    Olawore maintained that deregulation would have a positive multiplier effect, adding that there would be healthy competition among marketers while also attracting more investment from wealthy individuals, which would in turn create the needed job opportunities for many Nigerians.

    The Chairman/Chief Executive Officer, Enfrasco Energy and Infrastructure Services Limited, Chukwuma Okolo, corroborated Olawore saying what Nigeria needed was a gradual series of changes where we would transit from a controlled petroleum price to a price that at least reflects the cost of production. He added that this is achievable.

    According to him, we have raised refining and petrochemical to almost a level that is not supported by business or economic reality. “We are just postponing the difficult times, in whose interest is petrol price regulated? Diesel is already deregulated, petrol is essentially for cars and smaller buses, which is mainly for city dwellers, so who are we protecting with regulation of petrol price?”

    Okolo, however, expressed hope that by the time the refineries are fully functional and Dangote refinery comes on stream, the country would be able to have over a million barrels daily refining capacity. But we don’t need to wait for that long, he said, adding the process to ensure that we fully deregulate should probably be a two or three years phase process.

  • EU, OPEC back stable global oil market

    EU, OPEC back stable global oil market

    The European Union (EU) and the Organisation of Petroleum Exporting Countries (OPEC) have pledged their support to ensure a stable global oil market.

    After a joint roundtable tagged: “Prospective for Future Production of Non-Crude Liquids”, held in Brussels, Belgium, the two groups agreed that in the light of  current challenges in the energy markets, ongoing dialogues of this nature would continue to be of great importance. Both parties agreed that a stable and orderly energy market is essential for both producers and consumers, and a pre-requisite for achieving sustained world economic growth.

    The roundtable provided an outlook of the production levels of non-crude liquids around the world from 2000 to 2015. It outlined projected long-term supply estimates to 2040, using three different scenarios to enable a more detailed assessment of the potential outcomes.

    It also focused on non-crude liquids, which include natural gas liquids, biofuels and fuels derived from gas-to-liquids and coal-to-liquids processes. Based on the findings of the study, natural gas liquids (NGLs) and biofuels are expected to make up the majority of non-crude liquids supply in the long term, while gas-to-liquids and coal-to-liquids will most likely play a lesser role.

    It evaluated how these liquids might impact conventional fuel production, including bioethanol’s impact on gasoline supply, biodiesel production on diesel’s share of the market and NGLs’ market position in relation to liquefied petroleum gas.

    Other topics discussed included environmental impacts as well as regulatory issues and governmental policies, especially in relation to biofuels. It was agreed by both parties that the study was informative and useful in assessing the future outlook for non-crude liquids and any potential impacts they may have on their constituencies, either directly or indirectly.

    The parties concluded that continued dialogue and exchanges of views between the EU and OPEC were essential for improving understanding and supporting their mutual interests of promoting oil market stability and predictability.

    It was also agreed that the Roundtable’s deliberations and outcomes would provide valuable input to the next event held under the EU-OPEC Energy Dialogue, which would be the 13th high-level meeting to be held in Vienna, Austria in the first half of 2017.

    The event was co-chaired by Erlendas Grigorovic, Acting Head of Unit for the European Commission’s Directorate General for Energy and Oswaldo Tapia, Head of OPEC’s Energy Studies Department and Officer-in-Charge of the Research Division.

    The roundtable was part of the formal EU-OPEC Energy Dialogue, which was established in 2005 to promote the exchange of views on energy issues of common interest, including oil market developments, and the potential this has for contributing to stability, transparency and predictability in the market.

  • ‘Why NNPC is major importer of fuel’

    ‘Why NNPC is major importer of fuel’

    Why have marketers left the Nigerian National Petroleum Corporation (NNPC) to import the bulk of the fuel locally consumed?

    Marketers do not have access to foreign exchange (forex), the Chief Executive Officer, OVH Energy Marketing Limited (formerly Oando Marketing Limited), Yomi Awobokun, has said.

    Awobukun said OVH has the capacity to distribute two billion litres, which was the maximum the firm did when there were no supply issues.

    He noted that at the height of importation, the firm was importing on its own 1.2 billion litres through self-raised letters of credit, which was the reason Oando was owed substantial amount of subsidy when the government was paying subsidy reimbursement to marketers.

    He noted that as a result of the current economic realities caused by oil price slump and forex access challenges, marketers found it difficult to import. “The downstream has been going through significant challenges including the unavailability of forex, drop in crude price and as a result of the entire externalities the economy is going through; therefore the NNPC should live up to its responsibility of ensuring energy security,” he said.

    According to him, the government through the NNPC has the responsibility to ensure energy security and provide fuel for vehicle owners. “This is apt because NNPC has the responsibility to generate income from Nigeria’s assets. But as marketers, our primary role is to meet the needs of the stakeholders, either the shareholder or customer.

    “Therefore, we only import where the capacity to import exists. As a marketer, I need to provide product at my retail outlets and also make profit, but to import I need forex. Currently, I cannot generate forex to import. So, in the last one and half years because of what the country is going through, NNPC has played a bigger role in fuel importation. We (marketers) are importing, but only to augment what NNPC imports as against in the past when NNPC imports to augments us.

    “But the fact that NNPC imports more now is vital. It helps to significantly reduce what marketers are owed and ensures that there is fuel at the stations. Besides, it makes reconciliation of transactions between the corporation and marketers easier.

    Awobokun, who spoke in Lagos during an interaction with reporters to formerly unveil name change of Oando Marketing Limited to OVH Energy Marketing Limited said all the shareholders agreed that a name change will boost the capacity of the company. He said the new name reflects current shareholders of the company. The OVH represents Oando, Vitol and Helios. Vitol and Helios recently bought into the company. The deal was sealed on June 30 this year.

    He said although the corporate name has changed, the products of the firm are licensed to be marketed as Oando in order to sustain the Oando heritage and market share. “All the shareholders agreed that a name change will boost the capacity of the company, but to sustain the Oando heritage and entrepreneur, OVH is licensed to market its products as Oando. Our intention is grow our reach, stabilise prices and supplies and add value to our shareholders.

    “The major value of this partnership is that it enabled access to capital by Oando. The downstream has been going through significant challenges including the unavailability of forex, drop in crude price and as a result of the entire externalities the economy is going through. The future leaders of this industry are those that are able to access capital. So the best of the deal is that it puts Oando to access capital and ensure supply. The partnership puts us in good stead to dominate the market.”

  • Shell JV funds Ogoni entrepreneurs

    The Shell Petroleum Development Company (SPDC) Joint Venture has trained another 60 youths in entrepreneurship skills, business planning, management and pitching. This is to consolidate its employment generation initiatives in Ogoniland.

    Fifty of the trainees who succeeded in the final assessment received start-up funds for their business ideas under the Shell’s LiveWIRE Nigeria programme. The youths were from the four Ogoni local governments of Gokana, Tai, Eleme and Khana, in Rivers State.

    At the graduation ceremony held in Port Harcourt, six beneficiaries of a similar programme in 2015 received ‘The Young Business Leaders’ award for being outstanding in their businesses said Shell’s spokesman, Bamidele Odugbesan.

    “We’re pleased that the LiveWIRE programme has continued to make positive impact not only on the lives of the latest beneficiaries but also on youths in the Niger Delta,” said Igo Weli, General Manager External Relations, in a speech at the ceremony.

    “Like in previous sets, these beneficiaries went through the entrepreneurship training, wrote business plans, pitched their business ideas and in the end, the 50 best performing candidates were selected. With the start-up grants we’re handing out, the stage is set for a new army of business owners and potential employers of labour to emerge in Ogoniland,” Weli added.

    His comments echoed a scenario where more than 70 per cent of the 105 youths that benefited from a similar programme in 2015 are already successful business owners and employers of labour, Odugbesan said.

    The Director, Enterprise and Promotion in the Rivers State Ministry of Youth Development, Christian Bogba said: “I pray that other companies borrow a leaf from what the SPDC Joint Venture have done today by contributing to the improvement of the economic wellbeing of the people and promote peace.”

    Chairman of the Supreme Council of Ogoni Traditional Rulers, Godwin Giniwa, and the representative of King of Gokana, Aagba Kpee, thanked SPDC and its joint venture partners for providing the young entrepreneurs mentorship to see them through the critical take-off period of their businesses and encouraged youths to seize opportunities of programmes such as LiveWIRE to improve their quality of life.

    A total of 6,350 youths from the Niger Delta have been trained since SPDC introduced the LiveWIRE Nigeria programme in 2003, with 50 per cent of them assisted to become business owners and employers of labour. The programme has earned international and local recognitions.

    The Ogoni-specific programme was driven by the aspiration to address one of the recommendations of the UNEP Report on the restoration of the Ogoni environment, as the LiveWIRE initiative aims to encourage youths in the area to shun illegitimate sources of income such as illegal refining of crude oil.

  • Ikeja Electric appeals to customers

    Ikeja Electric appeals to customers

    Ikeja Electric has appealed to customers in Ejigbo, Oke Afa, Ikotun Egbe, Egan, Igando, Arepo, Warewa and Channels Television axis on  power outage.

    Head, Corporate Communications Officer of the company, Felix Ofulue, said the management regretted the prolonged outage witnessed by its customers in and around the affected areas, adding that the outages were due to a faulty 100MVA transformer at Ejigbo Transmission Station, coupled with  other multiple faults along the network of that area.

    The Transmission company, Ayeni said, has commenced repairs on the faulty transformer. However, in the interim, customers will be temporarily back fed through alternative sources to mitigate the current blackout pending the completion of the repair.

    In a related development, the recent damage of the 33KV Electric Towers along Abeokuta Expressway, by a truck has resulted in power outage at Millennium Estate, LSDPC Estate Ojokoro, Agbado, Aboru, Jankara and other parts of Abeokuta environs.

    Technical teams have started effecting repairs, though restoration of power to affected areas, the company said, may take about a week.

    “Ikeja Electric deeply regrets all inconveniences caused our esteemed customers,” he added.

  • Osinbajo to declare NGA confab open

    The 10th International Gas Conference and Exhibition will hold between October 30 and November 2,  2016 at the Transcorp Hilton Hotel, Abuja.

    Vice President Yemi Osinbajo will declare it open, the Nigerian Gas Association(NGA) said.

    Osinbajo will also deliver the Keynote address and lead government delegation. The vice president’s presence will reinforce the NGA’s desire to see the commitment of government towards ensuring that gas takes its pride of place in the country, the Association added.

    “Nigeria is slowly turning to gas as primary driver of the nation’s development, which is a further indication that the government has a prominent role to play,” said Bolaji Osunsanya, NGA President.

    The theme of the conference: “Nigerian Gas Roadmap: Potential for Domestic, Regional and Global influence”,  according to industry stakeholders, is apt in view of  the  country’s interests in the West Africa Gas Pipeline, Nigerian Liquefied Natural Gas Limited and the challenges in the power sector both in Nigeria and beyond.

    In a statement by the association’s Publicity Secretary, Debo Fagbami, NGA said “the conference will stimulate the much-needed conversation on a range of important and diverse perspectives regarding natural gas development and its economic benefits to Nigeria”.

    The conference will also provide opportunity for  dialogue between the association and all the stakeholders, who play in the gas value chain, in order to ensure that  Nigeria’s huge natural gas resources is used as a viable option to crude oil

    Experts, who have indicated interest to speak at the event, include Group Managing Director of NNPC Maikanti Baru, Clay Neff; Chairman of OPTS/Chairman of Chevron Nigeria, Tony Attah; Managing Director of NLNG, Demola Adeyemi-Bero; Managing Director of First E & P, Osagie Okunbor; Managing Director of SPDC and Chief Executive of Seven Energy, Jeff Corey, among  others.

    The conference and the exhibition will attract over 500  top officials from 43 energy, gas, power, natural gas distribution, and transmission companies, including diversified ones.

  • IFC, others plan solar power for SMEs

    Thousands of Small and Medium Enterprises (SMEs) in Nigeria would benefit from solar energy programme being put together by the International Finance Corporation (IFC), the Department for International Development (DFID) and local financial institutions.

    The Country Manager, IFC, Eme Essien Lore, in an interview with The Nation in Lagos, said the IFC was partnering DFID and banks in Nigeria to achieve this goal.

    She said IFC through its off-grid and embedded solar market development and finance programme, would provide solar power to willing SME owners.

    She added that the programme ensures that IFC, the Department for International Department (DFID), and banks in Nigeria partnered to provide technical and financial support for owners of SMEs that are interested in accessing solar power for operation.

    According to her, the banks, through their Energy or Oil and Gas units, would disburse loans to SMEs, in order that they could  access solar electricity for their operation.

    She told The Nation that some selected local financial institutions would be used by the IFC to provide technical and monetary supports to owners of small and medium scale enterprises in the country, adding that the Corporation was undertaking the programme for SMEs owners because it was cheaper and easy to install when compared with coal, biomass, wind and other renewable energy sources.

    Lore said IFC was working with the Department for International Development to improve access to electricity and further contribute to the growth of the Nigerian economy.

    “IFC plans are to provide thousands of SMEs with solar energy, improve economies and create employment opportunities in Nigeria and Africa in the next 10 years. We intend to make use of the abundant Sun light in Africa to achieve our goal of providing off-grid electricity through solar energy. IFC has provided about $3.5billion for renewable energy projects such as biomass, hydro, solar and wind, globally and wants to do more.

    “Through solar energy, people produce electricity they need and reduce transmission losses to a great extent. In the grid method of power generation electricity there are huge transmission losses due to weak facilities and to avert the losses, a lot of money and expertise are required.”

    Also, the DFID’s representative in Nigeria, Ben Mellor, said the government of United Kingdom (UK) was interested in improving off-grid electricity in Nigeria to promote growth. He said off-grid electricity serves as a viable option to meet the needs of people in the low income segment of the economy, stressing that solar and other off-grid electricity would help in improving businesses in such areas when deployed.

    “Access to energy is one of the most critical needs in Africa and particularly Nigeria. Based on this, the UK Department for International Development is determined to assist in bringing solar technology financing solutions to smaller businesses and corporates and we are working with IFC to achieve this goal,” he said.