The Nation Newspaper

Category: Energy

  • NLNG unveils 25-year plan for Bonny’s transformation

    IN fulfilment of its corporate social responsibility (CSR), the Nigeria Liquefied Natural Gas Limited (NLNG)is to transform its host community, Bonny in Rivers State into Nigeria’s Dubai or Singapore, within 25 years.

    NLNG’s immediate past Managing Director and now the Vice President, Safety and Environment (S&E), Shell Upstream International Leadership Team, Babs Omotowa, said the company  has started taking action to achieve the objective.

    Omotowa, who spoke to The Nation, before he left office on September 1,  said: “I’m happy about the work we have done in Bonny to be able to clear a lot of legacy projects that we had and the promises we made in the past.

    “Now, we have agreed to a new 25-year marshal plan, which hopefully will turn Bonny into a Dubai or a Singapore in about 25 years time. We have developed the 25-year marshal plan. We have mapped out the terms, residential area with high rise, areas that will be for tourism, agriculture, industries development.

    “Bonny has been mapped out for that, so to achieve this dream, we contribute N3 billion to a foundation every year to be able to make this dream become a reality. The memorandum of understanding (MoU) was signed last year with the community and we are working with the community to achieve that.

    “Our dream is that in about 25 years time everybody will look at Bonny and use it as a model for how community development can be actualized.”

    Barring unforeseen circumstances by the end of 25 years, the NLNG could have invested about N75 billion in the project. Besides the 25-year development plan, the gas company has shown commitment to connecting Bonny by road. Bonny, an island, is accessed only by water.

    It was learnt that the Federal Government in the 1970s an initiative to build road into Bonny but since then the project has remained in the drawing board. The NLNG, however, has offered to bear 50 per cent of constructing the road and is waiting for the government to take the step forward.

    “Road into Bonny is a Federal Government’s project. It has been in the drawing board since the 1970s. What we have done now is to offer to partner with the government to provide them (the government) with 50 per cent of the cost of the project, which is a total of about N60 billion. When the government is ready with their own fund, they can come for our counterpart fund,” he said.

    Omotowa also said stakeholders, including the government, should come together to tackle militancy in the Niger Delta region.

    He said: “The whole issues around militancy affect the entire oil and gas industry. Since 2008 when we started to see this insurgency in the Niger Delta, it has affected oil and gas generally, so I wouldn’t go to any specifics on NLNG but I will say for us as a country, this is a major issue that the country needs to tackle.

    “All the stakeholders must work together to try and find lasting solution to it for the betterment of the country. So it is an issue that we all need to pay attention to and find ways to resolve, bring all the gladiators together. I think the key thing at the end of the day is that the Niger Delta where oil and gas is produced has to be developed.”

  • Nigerdock’s facilities are ideal, says NPA chief

    Nigerian Ports Authority (NPA) Managing Director, Hadiza Bala Usman has   hailed  Nigerdock’s  management for its commitment to indigenous capacity building.

    She spoke when she toured the facilities of Nigerdock on the Snake Island Free Trade Zone in Lagos.

    Usman said: “We appreciate the need for local content development and we would push for its success in Nigeria. We will ensure enabling environment and the necessary legislation to block any form of monopoly in the logistics sub-sector.”

    “We are keen to proper regulation that will promote transparency in the sector because no monopoly will be helpful to the development of the Nigerian economy. We are working to ensure there is adherence to local content policy within the environment. We will also ensure there is adherence to the employment of Nigerians in all operations,” she stated.

    Nigerdock Plc Chairman, Mr. Anwar Jarmakani, told the NPA chief that it was only a committed indigenous company that would have invested over $500million in-country as Nigerdock had done, assuring the company will continue to invest to create jobs for Nigerians.

    Jarmakani urged Hadiza Usman to use her offices to create a level- playing field for stakeholders in the shipyard, ship-building and logistics business.

    ”We need consistency in government policy.

  • ‘Vandalism, lack of fund major ills of power sector’

    Pipeline vandalism and illiquidity are the biggest problems confronting the power sector, the Managing Director and Chief Executive Officer, Frontier Oil Limited, an indigenous oil and gas firm, Thomas Dada, has said.

    In an interview, he said though   pipeline vandalism had  taken the sector many steps backwards,  lack of fund due to huge indebtedness to operators had become worrisome, adding that the government was the biggest debtor.

    He blamed the electricity distribution companies (DisCos) for the paucity of fund.

    According to him, the DisCos neither meter customers properly nor collect bills from them. ‘’Operators of the DisCos didn’t do what they promised when they took over those distribution companies. The reality is that many electricity consumers don’t pay for the power they consume, he said.

    To him, the transmission segment of the power sector value chain is the weakest. He said the NBET sat on millions of dollars, yet the sector was collapsing. He questioned the reason NBET would not use that fund to rescue the sector, noting that channelling that money into the sector would be fine.

    He advised the government to support the power system for at least 10 years, subsidise it to enable power supply become stable. When consumers get used to stable power supply, the sector could then come up with a tariff hike, he added.

    ‘’There is resistance to electricity tariff increase because consumers are getting little supply but paying more. He urged the Federal Government to use the money saved from oil subsidy removal to positively ensure that the power sector is improved meaningfully.

    Dada said: “Gas equals power and equals economic growth,” noting that in a country where there is no gas and no power, the economy would break down.

    He warned that until gas is adequately produced for domestic use and power generated and distributed properly, the diversification of the economy which is the yearning of the people may be far from being attained.

    Thomas said: “We are not going anywhere with state of the power sector. We have to do something far-reaching. NBET can’t be sitting on that kind of money and the sector is crumpling before our very eyes.”

    Dada said the government got it wrong through wrong policies, even those wrong policies were inconsistently applied. Since independence, he said, the country had generated only maximum of five gigawatts of electricity.

    “The government has no business running business. The power sector is not a social service, it is a business and it has to be allowed to run as a business. We have to respect sanctity of contracts. We have to keep our words, and not when an investor puts in his money today, tomorrow the rule is changed.”

    According to him, when gas production for domestic use is reduced, the power available for the economy is also reduced. ‘’We need to solve the problem of vandalism and lack of liquidity in the sector. The pricing of gas is just not adequate to earn the returns and attract investment we yearn for as producers,’’ he added.

    He urged the government to summon the political will and do something constructive to arrest the situation, adding that the government needs to do something sustainable to ensure that the gas-to-power value chain was rescued from total failure.

  • ‘Why meters are manipulated by customers’

    Customers and meter  installers are conniving to manipulate the equipment, The Nation  has learnt.

    The installers were hired by electricity distribution  companies( DisCos) because of shortage of skilled workers.

    It was gathered that some of those hired by the DisCos to install meters connive with corrupt customers to manipulate the meters for selfish reasons.

    The Nation’s findings reveal that the firms oftentimes use adhoc staff to instal meters, an issue, which is having undesirable effect on their operation.

    This issue made the firms to contend with several cases of meter bypass and the associated loss of revenue.

    A source close to one of the DisCos, who spoke on condition of anonymity, said many of the energy distributors are contending with several cases of meter bypass and loss of revenue occasioned by the use of unqualified workers to install meters.

    The source said the firms, as a result of these untoward practices, spend several months to install between 20,000 and 30,000 meters, which prevent customers from getting meters on time. This situation makes many customers to continue to pay estimated bills, and lose money.

    The source said: “There is no denying the fact that the firms were grappling with problems, such as finance, shortage of manpower, lack of skilled workers to carry out metering activities, estimated billings and others. While some of the DisCos have taken delivery of imported meters while others are yet to but distribution and installation of the meters continue to be a problem. The managements of the power firms were working hard to overcome the problem.”

    Ikeja Electric (IE) spokesman, Mr. Felix Ofulue, confirmed that there were not enough skilled workers to install smart meters, which the DisCos were deploying.

    He said the DisCos were deploying a technology known as Advanced Metering Infrastructure (AMI) to improve their operation, adding that the technology ensures that consumers use smart meters and interface with their DisCos.

    The meters, Ofolue said, are intelligent, interactive and provide a two-way communication between the DisCos and their customers, adding that the industry lack skilled workers that can install the meters

    National Power Training Institute of Nigeria (NAPTIN) Chief Executive Officer, Reuben Okeke said the sector lacked the capacity to install meters. He said many meters were by-passed because they are not well installed.

    He said the bypassing started from when the meters were installed, arguing that meters that were not properly installed were prone to manipulation.

    He said unscrupulous people tamper with meters during installation to prevent them from registering the actual amount of energy   consumed.

    Okeke said the development made NAPTIN to partner the United States Energy Association (USEA) to train people on how to install meters, among carrying out other technical responsibilities in the sector.

  • LPG use will save Nigeria trees from destruction

    Nigeria will save millions of trees from destruction if many Nigerians switch over to use of liquefied petroleum gas (LPG), a report hass said.

    The report titled: “The socio-economic benefits of using liquefied petroleum gas (LPG) in Nigeria and produced by ‘Concerned Liquefied Petroleum Gas Development Association of Nigeria(CLPDGAS)’’, said the Federal Government will  save millions of trees from destruction, once it provides LPG for cooking for its teeming population.

    It said the climatic impact of using millions of trees for cooking would be huge, urging stakeholders to fast-track the use of LPG for domestic and industrial purposes.

    He said deforestation causes exposure to the ozone layer, outbreak of diseases and others.

    The report said: “To save Nigeria from ecological problems caused by cutting down of trees, the Federal Government must try and do something to increase the usage of LPG in the country. When LPG use is increased, the desire to cut trees and use them as firewood would not be there.

    Also, the Chief Executive Officer, Nigeria Association of Liquefied Petroleum Gas Marketers (NALPGAM), Mr. Bassey Essien, said the increase in use of LPG would reduce the menace of tree cutting for cooking.

    He said the use of firewood for cooking was harmful, because it produces smokes, adding that the smoke causes respiratory problems  when inhaled over time.

    According to him, the financial and health implications of using charcoal and firewood for cooking are huge, arguing that the issue has resulted in the death of many people.

    “Based on this, the association is advocating for increase in the use of LPG in the country. We have organised many advocacy programmes in order to sensitize Nigerians on the use of LPG. LPG is a clean energy, friendly to the environment and cheaper when compared to use of kerosene, firewood and charcoal for cooking,” he added.

  • Sahara Group pledges to support young Nigerian innovators

    Sahara Group has pledged its support for the 30 young Nigerian innovators who emerged from the maiden Aso Villa Demo Day entrepreneurship development project to grow their business ventures.

     

    Executive director of group, Mr. Tonye Cole commended the Nigerian government for the Aso Villa Demo Day (AVDD) initiative, adding that it would boost the Information Communication Technology sector and unleash the creativity of youths in the nation.

     

    The AVDD was designed to discover and celebrate creativity, innovation and entrepreneurship with focus on economic diversification as well as inclusive enterprise by young Nigerians. The event produced 30 start-up innovators whom Sahara Group intends to further enhance their development through ‘Extrapreneurship’, its entrepreneurship platform.

     

    The Sahara Group “Extrapreneurship” framework is an integrated development and management programme designed to grow and sustain entrepreneurial ventures by linking them with strategic partnerships and networks.

     

    In addition to bringing the innovators on board the extrapreneurship platform, the top three winners from the AVDD project will receive financial support from Sahara. They include: Tracology, a patented smart payment systems for utility companies; RecyclePoints, a waste recycling and social benefit venture for sustainable development, and Shuttlers, a multi-staff bus service to assist commuters resolve daily challenges moving around big cities.

     

    “Sahara is indeed proud to be associated with the project which will inspire, challenge and empower young Nigerians to be part of the solutions to socio-economic challenges in their immediate environment. Through Sahara Foundation’s Academic Hub, business development experts and professionals from other disciplines will provide mentorship to the top 30 innovators,” Cole said.

     

    According to Cole, Sahara Group would always support initiatives geared towards investing in a future that guarantees sustained growth and development across the globe.

     

    “If we are going to become sustainable, and move from this generation to the next, we must understand what the next generation is all about. The future is digital and technology. A lot of Nigeria’s problems today can be solved through technical solutions sourced locally from young and creative talents. Sahara will continue to align with governments and organisations that share our passion for providing platforms to help young entrepreneurs succeed,” he noted.

     

    Nigeria’s Vice-President, Prof. Yemi Osinbajo said the AVDD project has created a level playing field and connectivity for everyone to participate in wealth creation across the world.

     

    “It’s a new day. There’s so much hope and so much the young generation is going to do. I am looking forward to working with young Nigerians as part of government to ensure that all our plans, talents and abilities are put to the best possible use. We will support you all the way,” Osinbajo told the young innovators.

     

    Facebook founder, Mark Zuckerberg, who was a one of the special guests at the AVDD, said he was inspired by what ideas the competition has produced.

     

    “I am really blown away by the talent of the entrepreneurs and young developers in this country, particularly the focus to build something that’s going to make a difference and bring change”, Zuckerberg said.

     

     

     

  • OPEC, others for oil freeze forum

    OPEC, others for oil freeze forum

    Members of the Organisation of Petroleum Exporting Countries (OPEC) and other oil producing countries are discussing an output-freeze deal next month in Algiers, Algeria as OPEC’s biggest producers are pumping flat-out, the group’s former president said.

    While a similar initiative failed in April, an agreement can be reached as Saudi Arabia, Iran, Iraq and non-member Russia are producing at, or close to, maximum capacity, Chakib Khelil said in a Bloomberg Television interview.

    Khelil steered OPEC in 2008, the last time it implemented an output cut, which was announced in Algeria in December of that year. In an interview, former Qatari Energy Minister Abdullah bin Hamad al-Attiyah was convinced there is a need for an accord.

    “All the conditions are set for an agreement,” Khelil said from Washington. “Probably this is the time because most of the big countries like Russia, Iran, Iraq and Saudi Arabia are reaching their top production level. They have gained the entire market share they could gain.”

    While oil prices have advanced since OPEC announced it would hold informal talks in the Algerian capital next month, analysts from UBS Group AG to Commerzbank AG doubt any freeze deal will be completed, and comments from Saudi Arabia and Nigeria have kept expectations low. Talks collapsed in April as Saudi Arabia insisted Iran would have to limit its production, a condition the country rejected as it ramped up exports previously curbed by sanctions.

    As producers are almost pumping at full-tilt, the impact of any accord to prevent further increases would essentially be “psychological,” Khelil said. That would nonetheless have a benefit for the market, according to the Algerian, who was also the country’s energy minister from 1999 to 2010. The global crude oversupply is already diminishing, and markets will probably reach “complete equilibrium” next year, Khelil said.

    Qatar’s Al-Attiyah, speaking by phone, said the re-balancing is proceeding slowly and there is a need for global producers to act together and speed up the process. He said it’s “really hard to say” whether anything will be agreed in Algiers.

    “OPEC and other producers need to do something because for the market to rebalance on its own that will take a lot of time,” Al-Attiyah said. “Even next year, we have to be cautious and not expect that the market will rebalance quickly.”

    Still, both former ministers agreed that a freeze, even if it’s only symbolic, would revive the bullish mood among oil investors and traders.

    “The freeze deal will not have a huge impact on fundamentals but it will help improve the market sentiments,” Al-Attiyah said. “At the end, a step taken is better than doing nothing.”

    Russia’s output hovers near an all-time high of 10.85 million barrel per day. With Russian output touching new heights, its Energy Minister Alexander Novak said his country was consulting with Saudi Arabia and other producers to jointly cap production “if necessary,” Arabic newspaper Asharq al-Awsat reported.

  • ‘African countries need reforms in oil industry to attract investors’

    PricewaterhouseCoopers (PwC) has urged African governments to reform their oil and gas industries to attract investors.

    In the PwC’s 2016 Africa oil & Gas Review, the international advisory firm stated that in the face of declining global oil prices, the continent still offers significant opportunities in the oil and gas industry.

    It noted that regardless of the  bleak landscape of the industry, there is still hope for the sector to attract investors’confidence.

    According to ESI Africa, PwC Africa Oil & Gas advisory leader, Chris Bredenhann, said: “It is an opportune time for local governments that want to attract oil and gas investors to reform their regulatory, fiscal and licensing systems.”

    The report highlighted that uncertain regulatory frameworks are one of the main issues that organisations in the oil and gas industry are struggling with. For instance, in South Africa, the study noted that there have been commitments to address concerns since last year, and the intention of government to separate regulations for oil and gas from the mining industry was communicated.

    However, South Africa’s Minerals and Petroleum Resources Development Act (MPRDA) has not yet been changed and approved to reflect such modifications.

    The report stated that in Tanzania the regulatory environment remains uncertain despite the promulgation of the Petroleum Act in 2015 while on the other hand, in Nigeria, the government has failed to pass the Petroleum Industry Bill (PIB) into law.

    The research found that by the end of last year, Africa had a proven natural gas base of 496.7 trillion cubic feet (Tcf), down marginally from 2014, with 90 per cent of the continent’s natural gas production still coming from Nigeria, Libya, Algeria and Egypt.

    PwC’s analysis suggests that is the ideal time for the industry to consider introducing training programmes to upskill levels and company standards in order to give local players a chance to enter the sector when activity picks up again.

    “The oil and gas industry is faced with a higher entry barrier because technology and jobs tend to be more complex, highly specialised and costly,” Bredenhann noted.

    Another point made by the research was that basic as well as technological infrastructure is essential for the oil and gas sector to thrive.

    “Furthermore, players must look at the state of the industry as an opportunity to reinvent themselves. Given the state of the industry, we think that stakeholders must also consider making changes to their business models.

    “Change is the way to survive in the ‘new energy future.’ We need to see new business models, new products, new energy sources and new strategies to meet the new reality,” Bredenhann added.

  • Omotowa to National Assembly: don’t amend NLNG Act

    Omotowa to National Assembly: don’t amend NLNG Act

    Nigeria Liquefied Natural Gas Limited (NLNG) Managing Director Babs Omotowa has cautioned against the amendment of the NLNG Act by the National Assembly.

    He said the amendment would jeopardise the take-off of the Train 7 & 8 plants of NLNG.

    He sought support for the construction of the  Trains 7 and 8 aimed at boosting gas production.

    He noted that the NLNG Act was key in enabling a project that had been in the drawer for over 35 years to be delivered; and has helped to reduce flaring by over 50 per cent, as well as delivered over $33billion to Nigeria from an investment of $2.5billion.

    Omotowa urged Nigeria to fast- tract the take-off of final investment decision (FID) on these additional trains, especially now that commodity prices are low, and that this could lower the cost of engineering, procurement and construction (EPC) as the major input, such as steel and iron ore prices, are at their lowest ebb.

    He noted that Nigeria is not rated well in the ease of doing business, citing the World Bank.The World Bank, he said, ranked Nigeria at 169th out of 189 countries in ease of doing business index 2016.

    This is a ranking we must improve on; and the executive arm of government has identified this as a priority, and it is important that our legislators understand this and support the Executive efforts in this direction, and not undermine the country as a bride in terms of attracting investments.

    The NLNG chief said: “One area to highlight, however, is that despite the need for all the reforms and to diversify the economy, we must ensure a conducive business environment.The private sector plays a key role in the development of any country, hence the Executive and Legislature must do everything to ensure we continue to attract investments (local and foreign) to help in accelerating our development as government funding alone will not be adequate.

    “An example of this is where NLNG ability to attract future investments to maintain and grow the plant is being put in jeopardy by attempts to renege on promises that Nigeria gave to foreign investors that has enabled us attract $15billion in foreign investment, and grown LNG capacity from a two-Train complex to a six-Train plant. In the construction phase alone, we employed up to 18,000 people. Future investment would even enable us and our gas suppliers employ over 30,000 people, especially in this period of high unemployment. ‘’

    Omotowa continued: “While we have received support from the Executive on the need to keep the sanctity of the NLNG Act, the periodic attempts by the Legislature to amend the clear promises made to investors will cost the country quite a lot.

    ‘’Apart from the immediate relocation of investments in excess of $25billion to other countries, Nigeria will also be opened to fines running into billions of dollars in international courts. For instance, Venezuela and Ecuador were fined over $1.8billion each for reneging on similar agreements. Financial incentives of the nature contained in the NLNG Act are not uncommon in the global LNG industry. Countries such as Qatar, Oman, Malaysia, Angola, etc have similar incentives in place.

    “Indeed, even within Nigeria, more generous incentives are contained in legislation, such as the Oil & Gas Free Trade Zone Act, as enterprises in those zones, with a view to attracting foreign investment and stimulating exports, do not pay any taxes whatsoever to the Federal, state, local governments or the Niger Delta Development Commission (NDDC) levy.”

    ‘’This is not the time to jeopardise Nigeria’s best interest by showing it as one with a people not to be trusted, and thus create a climate of unconducive business environment,’’ he added.

  • Sahara Group turns 20

    Sahara Group turns 20

    To inspire youths to achieve  their dreams and provide platforms to facilitate the socio-economic development worldwide is Sahara Group’s major goal, Mr Tonye Cole, its Executive Director and Co-founder has said.

    Sahara Group, an energy conglomerate with operations in eight countries across four continents, turned 20 years on Tuesday.

    On the milestone achieved by Sahara, Cole said while the company had witnessed significant successes in its core operations, it places more premium on its corporate responsibility achievements.

    He said Sahara recorded several sustainable interventions in the areas of education and capacity building, health, sustainable community development and the environment through the Sahara Foundation.

    “We are humbled by the impact we have made and remain committed to doing much more through collaboration with local, regional and global organisations that share our passion for bringing energy to life,” he said.

    Cole said Sahara was looking to upscale the reach and impact of its interventions in the countries where it has operations as well as other locations to enhance efforts aimed at achieving the Sustainable Development Goals (SDG’s).

    “Sahara is, indeed, proud of the milestones we have recorded these past 20 years. We are blessed with unique staff and are excited about the future as we continue to spearhead innovation in the entire energy value chain. However, beyond the numbers, we will continue to cherish the privilege God has given us to be a blessing to millions of people across the globe. We celebrate all our friends and stakeholders who have made the Sahara story a phenomenal success and look forward to the future with excitement.”