Category: Energy

  • Why Ogoniland clean-up must continue

    The cleaning of Ogoniland and other oil pollutted areas in the Niger-Delta region  must not stop with the government of President Muhammad Buhari,  the  Country Representative, Natural Resource Governance Institute (NRGI), Dauda Garuba has said,

    He said to achieve this, the Federal Government must develop a blueprint that would made successive adminstrations to continue cleaning oil-pollutted areas.

    He said oil exploration is an on-going activity in Nigeria, and as a result,it would be difficult to rule out  pollution.

    According to him, there must be a time-table that specify areas that would be cleaned in the next 5, 10 or 15 years, the modalities required to achieve this goal, the amount of moneu needed for the porject, among others.

    Garuba told The Nation, that when when these measures are put in place, successive governments would know what to do on the issue of celaning oil-polluted sites and how to go about it.

    He said: ‘’A well-defined programme on cleaning of oil-polluted areas must be provided by Mr Buhari’s government. The programme would guide contractors hired, by the Federal Government, to clean up the sites to know what and where to start. Based on this, the clean-up exercise would be sustained.

    The polluted communities, he said, must be carried along by the government that is cleaning the land, to achieve the desired results.

    “ The clean-up exercise must be sustainable. The government must put in place measures that would help in achieving it. Failure to do this means that successive governments would be doing the same thing and, in the process waste money that would have been used for other developmental projects.’’ he added.

    He said the report provided by the  United Nation Environmental Programme(UNEP) on cleaning of oil-polluted sites must be followed, urging the government to involve more international agencies on the issue to record growth.

    Garuba noted that internal wranglings among  residents of oil producigng  communities had delayed the clean-up exercise, advising the people to unite for the progress of the region.

  • NCDMB, others agree on crude lifting

    Contracts for lifting Nigerian crude oil will begin to yield benefits for the Nigerian economy going by the renewed commitment by the Nigerian Content Development and Monitoring Board (NCDMB), the Nigerian National Petroleum Corporation (NNPC), the Nigerian Maritime Administration and Safety Agency (NIMASA) and other stakeholders in the oil and gas industry.

    The Board estimated in 2013 that the Nigerian economy lost over $100 billon in five decades by allowing its crude oil to be carried exclusively by foreign owned tankers. But rising from a meeting entitled: “Crude Oil Off-takers Nigerian Content Deliverables”,  convened by the Board in Lagos , the agencies and other stakeholders pledged to grow the quantum of Nigerian content in the lifting of Nigerian crude oil by working with Nigerian shipping stakeholders to develop in-country assets capacity that meets international standards.

    They also agreed to ensure that companies that have invested in ownership of crude oil lifting vessels are given first consideration in line with the provisions of the Nigerian Oil Industry Content Development (NOGICD) Act.

    NCDMB, NNPC and NIMASA also committed to explore the possibility of a joint fund as part of waiver mechanism, which can be used to purchase or finance the building of a Nigerian owned crude oil lifting tankers.

    Another decision taken at the workshop was to properly define what constitutes “spend” in crude oil lifting contracts for the purpose of complying with the target of 90 per cent industry spend within the Nigerian economy set for Very Large Crude Carriers (VLCCs) by the NOGICD Act.

    The Acting Executive Secretary of the NCDMB, Mr. Patrick Daziba Obah described crude oil lifting and marketing as a major activity in the oil and gas value chain, despite the fact that Very Large Crude Carriers were highly capital intensive to acquire. He however, stressed that Nigeria will remain a major oil producer and not a major oil business value adding nation if the citizens do not own VLCCs.

    While identifying opportunities for growing Nigerian Content in crude lifting, Obah noted that VLCCs require manning by certified crew while crude oil lifting attracts opportunities for financial, insurance, inspection and other services. Other spend points in the value chain include the use of lubes and maintenance of VLCCs.

    Obah, who was represented by the Director, Monitoring and Evaluation, Mr. Tunde Adelana explained that the Board introduced Nigerian Content requirements for crude oil lifting in 2013 so as to maximise the value retention opportunities.

    According to him, Nigerian Content requirements for crude lifting contracts required that tankers/vessels that are selected to lift Nigerian crude would grow Nigerian Equity Ownership, create sea time attachment for five Nigerian cadets and create employment and training opportunities and utilisation of Nigerian service providers such as financial, insurance, legal and inspection services.

    He underscored the collaboration of NNPC in introducing the Nigerian Content requirements for crude lifting, assuring that the Board would intensify its monitoring of companies that secured Crude Oil Term Lifting Contracts to ensure their compliance with the requirements.

    Speaking further, Adelana explained that the workshop was convened to harness the views of stakeholders and secure their collaboration towards deepening Nigerian content implementation in crude oil lifting.

    The General Manager, Crude Oil Marketing Division (COMD) of the NNPC, Mr. Adokiye Tombomieye pledged the determination of NNPC to enhance Nigerian participation and maximise Nigerian Content in the lifting of Nigerian crude oil and charged Nigerian firms desirous of participating in the business to comply with the requisite standards with regards to the vessels they put forward in the tenders.

    He confirmed that the utilisation of Nigerian service providers by firms selected to lift Nigerian crude had increased from 50 per cent in 2010 to 75 per cent in 2015 and has helped to reduce capital flight, increased in-country spend and created job opportunities for Nigerians.

    On the requirement to attach at least five Nigerian cadets per cargo for the purpose of obtaining requisite sea time experience and international certification, Tombomieye noted that Nigerian crude was sold Free on Board (FOB) hence,  marketers do not own the vessels and are often unable to secure slots for the cadets.

    An Assistant Director at NIMASA, Mr. Victor Egejuru also confirmed that the agency was collaborating with the Board and NNPC to grow local participation in the marine sector of the oil and gas industry.

    While noting that inadequate sea time experience and certification were hindering locally trained seafarers from getting hired by sea going vessels, Egejuru said NIMASA was now addressing the challenges by making it mandatory for vessels operating in Nigerian waters to give a specified number of Nigerians opportunity for sea time experience. He noted that this new requirement was now a condition for obtaining waiver renewals from NIMASA.

  • Hong Kong firm to build 200,000 barrels refinery in Nigeria

    A Hong kong based firm,  Blooming Faith Petroleum Ltd, is partnering the Federal Government to build  and operate a 200,000 barrels per day ( bpd) capacity in Nigeria.

    The company, a subsidiary of Blooming Faith Global Holdings, plans to build the refinery in Akwa-Ibom state.

    Its chairman, Dr. Robert Yeung during his visit to Nigeria, said  the firm was planning to build the refinery in order to help Nigeria reduce the importation of petroleum products.

    He said:’’ Two major reaons informed the decision of the firm ro build a refniery in Nigeria. First, is the need to fill a vacuum created by the failure of the four government-owned refneries to perform to optimal capacity in the country. Secondly, is the realisation that Nigeria is an investment destination, which must be explored to the fullest.’’

    He said his company is not interested in exporting fuel, but to produce it for the domestic market, adding that discussions are on-going with the Nigerian National Petroleum Corporation(NNPC) and the Departmnt of Petroleum Resources(DPRP.

    Also, the firm’s Director in charge of International Operations, Mr. John Erigwe, said   the company has the financial capability and technical expertise to see the project through.

    According to him, Blooming  is interested in investing in Nigeria’s economy, stressing that this is main reason why the firm is planning to dicuss with the Honourable Minister of Ststae for Petroleum resources Dr. Ibe Kachikwu, how to acheive this goal.

    He said the refinery, if approved by the Federal Government, would follow Dangore Petrochemcial Refinery in terms of size and output.

    .Still on the issue, Chief Executive officer of ‘D’Alphaxristi Ltd and consultants to the firm, said  it is pertinent that the Government eases the pathway to investments as a way of encouraging investors to commit funds to projects.

    “This is one of those investments that will have direct impact on the ordinary Nigerian people and the government should give such project immense priority. Investors must be encouraged with incentives and access to government support when required.

    It would be recalled that Nigeria’s Minister of State for Petroleum, Dr. Kachikwu was in China recently on a Road Show that aimed at creating awareness for the nation’s economy.

    The show is expected to provide  $100 billion worth of investments for Nigeian oil and gas industry.

  • ‘How to tackle power problems’

    The Federal Government has been urged to adopt a holistic approach in fixing power problems.

    Stakeholders, including Electricity Meters Manufacturing Association of Nigeria (EMMAN)Executive Secretary, Muhideen Ibrahim and Kola Balogun,  Managing Director of MEMCOL Nigeria Limited, a meter manufacturing firm, urged the government to tackle power challenges from a broader perspective.

    Ibrahim  told The Nation that all sectors of the economy should  depend on each other for growth, arguing that the government’s attempt  to address the problems only in one sector, would not help the power industry.

    He said the power challenges were from other sectors, such as oil and gas and manufacturing. “This is the reason I said stakeholders, including governments must adopt a holistic approach to solving the nation’s problems of which power is the most critical one. Based on this, one can say that the complexities in the power sector are a reflection of a near failed system,  Ibrahim said.

    Balogun said the power sector would not grow if government  fails to solves generation problems by tackling the firms providing components, such as transformers, cables and meter, among others.

    According to him, when personal interest overrides that of the public in a country, the consequence for the economy is bad.

    “Why should somebody vandalise the gas pipelines, steal  armoured cables or underground cables?” he queried. He wondered why vandals should remove wires from the poles, destroy oil fields and wells, tamper with the transformers and meters.

    ‘The destruction of gas pipelines and  other national assets is injurious to the nation’ Balogun said.

  • Agitation for fuel attendants’ welfare ongoing, says NUPENG

    Agitation for fuel attendants’ welfare ongoing, says NUPENG

    The agitation for improved welfare package for over 300,000 petrol attendants in the country is ongoing, the Chairman, Southwest branch of the National Union of Petroleum and Natural Gas Workers (NUPENG), Mr. Tokunboh Korodo, has  said.

    He said the body is not resting on its oars in ensuring that fuel attendants get improved welfare package and live a good life, saying N18, 000 is being considered as the minimum salary for petrol attendants nationwide. He said the workers will be better for it if everything goes according to plans.

    He said inability of stakeholders to reach a compromise has slowed down discussions on the issue,  adding that efforts to get the dealers to understand the predicament of petrol attendants and further increase their salaries have proved difficult, but it is accomplishable.

    Korodo said: “Discussions are ongoing on the issue of increasing the emoluments of petrol attendants and others working at fuel retail outlets across the country. Several meetings have been held on the issue because we believe that the workers’ welfare must be improved.”

    The National Chairman, Petrol Tanker Drivers arm of NUPENG, Mr. Akanni Oladiti said efforts are being made to reposition the downstream sector of the oil and gas for growth. He said petrol tanker drivers are being trained to be more professional in their conduct, stressing that the training would be nationwide.

  • Solar power is cheap, says firm

    Solar power is cheap, says firm

    Petrocam Nigeria Limited has introduced solar-powered filling stations in the country to reduce dependence on the national grid for electricity, its Managing Director, Mr. Patrick Ilo, has said.

    He said Nigeria is close to the equator and, should  obtain sun directly from it, adding that his firm leverages the renewable energy source to power its filling stations for growth.

    He said the country generates about 70 per cent of its electricity from gas and 30 per cent from hydro plants, adding that the output from the two sources is not enough to meet the people’s needs.

    Ilo said: “It is safer, cheaper and reliable to use solar form of electricity for the two filling stations that were situated in Igando and Lekki- Ajah Expressway, both in Lagos. Nature has endowed us with sun, hence the decision to position our outlets in such a way that they would access solar well. Sun is God’s gift. It is free and left for people to see how they can tap the opportunities in it for power generation.”

    Ilo whose firm has partnership with Petrocam South African, an oil trading firm, said people are sure of getting fuel for their vehicles, generators and other equipment regularly, adding that the issue of epileptic power supply, which is common with grid electricity, does not arise with solar.

  • Why cooking gas price is high, by NLNG

    Why cooking gas price is high, by NLNG

    Infrastructure bottlenecks and not scarcity are the real reason behind the rising cost of cooking gas or Liquefied Petroleum Gas (LPG) nationwide, the General Manager, External Relations, Dr. Kudo Eresia-Eke has said.

    Eresia-Eke in a telephone interview with The Nation said three factors namely; shortage of terminals for the discharge of LPG in the country, storage facilities at the terminals and delays in getting the product from the terminals, have resulted in increase of price, from N2,700 to between N4,000 and N4,200 for a  12.5 kilogramme (kg) cylinder in Lagos and environs.

    He stated that hitches in areas such as transportation of LPG from the NLNG’s base in Bonny, Rivers State to Lagos and distribution of the product to consumers, is the bane of the sub-sector.

    The issue, he said, made people to conclude that LPG is scarce in the country. “The increase in price of LPG was caused by infrastructure problems, and not scarcity of the product. Only two terminals were dedicated for the supply of LPG in Nigeria. The terminals, which are based in Lagos, are NAFGAS Terminal and the Northern Oil Jetty (NOJ), which is being managed by the Products and Pipeline Marketing Company (PPMC) on behalf of the Nigerian National Petroleum Corporation (NNPC).

    “The terminals are not only limited, but were made to give priority to supply of white products such as petrol, diesel and kerosene. This has made it difficult for LPG vessels to discharge its content promptly enough,” Eresia-Eke said.

    Other problems, according to him, are lack of adequate facilities for storage of LPG at the terminals and delays in accessing the product from the terminals.

    He said the decision by the Federal Government, to give the terminals priority to discharge white products first, is affecting supply of LPG. “The idea made LPG vessels to queue for days or weeks, ditto operators that are waiting to collect the product for onward distribution to the consumers,” he added.

    Eresia-Eke noted that NLNG has increased domestic supply of LPG from 150,000 metric tonnes (mt) annually to 250,000 metric tonnes annually in recent times. The issue, he said, attests to the fact that  NLNG has the  capacity to meet LPG consumption requirement in the country.

    He urged stakeholders including the government, to expedite actions on measures that would enable consumers to get the product regularly.

    The National Association of Liquefied Petroleum Gas Marketers (NALPGAM), had in May, 2016, raised concerns over what it described as astronomical increase in the price of cooking gas. NALPGAM’s Chairman, Mr. Bassey said the money paid on demurrage and other costs incurred by the operators have increased, thereby making it difficult for them to get the product.

    He said the issue has compelled marketers to increase the price above what they used to sell the product.

  • OPEC losing market control on oversupply

    OPEC losing market control on oversupply

    The refusal of the Organisation of Petroleum Exporting Countries (OPEC) to impose production limits on its members has dimished clout. and an evolving global marketplace signal diminished its clout for the oil cartel.

    According to Africa-ME report, OPEC ministers’ failure to agree on production limits to bolster oil  prices early this month,  was yet another signal that the days of oil cartel’s dominance in the global market  are over.

    Members of the OPEC may continue to be important players in the oil markets, but the cartel has lost its priveledge ability to to control global oil prices. “according to Global Risk Insights, which accesses political and business risk around the world, the report said.

    OPEC nations, led by Saudi Arabia, traditionally have been the world’s swing oil producers, with enough reserves and daily production to control the price of oil. But that has changed  in recent years as the United States, Russia and other smaller non-OPEC countries increased production.

    Total OPEC production is about 37 million barrels a day compared to non-OPEC production of nearly 57 million barrels daily, according to Global Risk Insights.

    Despite waning influence, OPEC’s refusal to set production limits has played a major role in creating an oil glut, precipitating a two-year crisis that has seen the price of oil drop to as low as $26 per barrel earlier this year before climbing to $52 this month. That compares to prices of about $110 per barrel in 2014, when the crisis began.

    Some OPEC nations, led by Saudi Arabia, have been willing to absorb the financial shocks of plummeting oil prices in order to preserve market share, reasoning that the low prices would drive competitors, notably U.S. shale oil producers, out of business.

    OPEC has rebuffed calls to limit production by members Algeria and Venezuela, which have been hard hit by the slump. Saudi Arabia itself has not been immune to the financial impact of low oil prices.

    The Gulf nation has spent more than $150 billion of its reserves in less than two years and posted a deficit of $98 billion last year. Earlier this year, the Saudis borrowed $10 billion from a consortium of international banks, its first foreign debt in 25 years. The government also was considering asking creditors to take IOUs because it cannot pay its bills.

  • ‘Nigerians need to develop energy conservation culture’

    ‘Nigerians need to develop energy conservation culture’

    Stakeholders  have advocated for discreet usage of power, following limited generation and other problems in the sector. They spoke during the  13th edition of the Distinguished Electrical and Electronics Engineers Lecture (DEEEAL) in Lagos, EMEKA UGWUANYI was there.

    •Procurement for Mambilla’s 3,000mw hydro plant begins

    Considering the numerous challenges including security, pipeline and equipment vandalism and power theft that militate against government’s aspiration of attaining stable power supply, it has become imperative for Nigerians to optmise available generation by cultivating energy conservation culture while the government finds sustainable solution to the problems, the Managing Director and Chief Executive Officer, Eko Electricity Distribution Company (EKEDC), Dr Oladele Amoda has advised.

    Amoda was the guest lecturer at the 13th Distinguished Electrical and Electronics Engineers Annual Lecture (DEEEAL) held in Lagos. In his paper titled: “Power distribution demand side management in developing economies,” Amoda stressed the importance of energy conservation, which can be achieved by switching off devices, lightings and other equipment when not in use.

    The paper dealt with basic concept of demand side management (DSM) and its proposed use as a tool to mitigate power shortages in Nigeria. To underscore the importance of DSM, Amoda said at an estimated annual economic growth rate of between seven per cent and 13 per cent, as well as an urbanisation rate of 3.8 per cent, Nigeria’s electricity demand is projected to grow from 15,730 megawatts (mw) in 2016 to 41,133mw and 88,282mw by the end of 2018 and 2020 respectively.

    He also noted that the increase in demand for electric power is noticeable in the residential sector. This is due to increase in population, greater need for housing and rural electrification. The demand by the industrial sector is difficult to estimate due to the fact most of the medium to large scale industries rely heavily on self-generated power, which is generally believed to be in excess of 40,000mw, he said, adding that energy is the central force behind our productivity, our leisure and our environment.

    Amoda said: “Low cost energy was abundant in the past, which made the cost of energy a small fraction of the cost of finished product. Use of low cost energy for home comfort became very predominant. The subsequent increase in oil prices increased the energy cost in every sector, domestic, commercial and industrial, among others. However, our energy resources are fast getting depleted. Thus energy saving or conservation is essential in developed and developing countries.”

    According to him, the goal of DSM is to encourage the consumer to use less energy during peak hours, or to move the time of energy use to off-peak times such as nighttime and weekends. The DSM is an energy conservation mechanism, which concentrates action at the user’s end rather than at the supplier’s side. At the supplier’s side, electric energy consumption can be controlled using a number of actions carried out by the utility on its own installations to manage electricity supply, he added.

    Amoda listed some energy conservation measures, which include building design that permits most of the spaces to be day lighted, adding that using day lighting reduces energy consumption by replacing electric lights with natural light, capable of reducing 40-60 per cent of electricity for lighting needs. Provision of enough windows for cross ventilation, can also reduce the use of air-conditioners in homes and offices, he said.

    “Substituting incandescent lamps with energy saving lamps is good energy conservation measure. Compact fluorescent lamps (CFLs) are generally considered best for replacement of lower incandescent lamps at homes, offices, commercial and industrial outfits,” he added.

    The Minister of Power, Works and Housing, Mr. Babatunde Fashola, who was the guest of honour at the event, corroborated Amoda. He said the Federal Government is considering a new building code that would promote usage of glass buildings to enable utilisation of day light, more widows and use of materials that will keep the building illuminated and cool.

    Fashola said the new building code becomes imperative because the nation’s power generation remains at the lowest ebb. He also noted that the government is working on energy mix that will enable the country tap electricity from different sources because dependence on gas holds the country to ransom.

    He said: “Government will access any available source of energy in order to achieve not only affordable energy but also national energy security so that we are not dependent on one source of fuel. Our vulnerability to gas has been responsible for the developments we see today, so one of the things that the energy mix will do is not just taking power plants closer to fuel source but also help us to achieve national energy security.

    “So we will go beyond solar to some coal, to a lot of hydro – finishing hydro plants such as Zungeru and starting the biggest hydro power plant, Mambilla, which will give us in one place 3000 megawatts (mw). We are finalising procurement now. We will also explore biomass. There is a sugar processing and sugarcane plantation in Adamawa.  We are talking to the proprietors to see how we can use some of that to produce energy.”

  • ‘How to realise natural gas potentials’

    ‘How to realise natural gas potentials’

    •Sector has $55b investment opportunities

    To fully tap the potentials of natural gas resource in the country, the President of Nigerian Gas Association (NGA) and Chief Executive Officer, Oando Gas & Power, Bolaji Osunsanya, said the government needs to promote investment in the sector, tackle disruptions of gas supply and partner the private sector.

    Osunsanya stated this, while addressing reporters in Lagos.

    He said the sector is being grossly under-exploited, noting that the  body has held separate sessions with the Senate and House Committees on Gas to present its view on gas policy framework required to spur sector diversification, power generation and subsequent economic growth.

    He said for a sector with over $55 billion worth of investment opportunities, the Association is extremely positive of growth in the economy and the potentials for growth in key areas such as exploration and production, processing, supply and distribution.

    Turning natural gas into a profit-making venture requires huge investments in infrastructure that address the five component areas of gas availability, affordability, deliverability, funding and legal and regulatory framework. Government and operators alike recognize that the first step is to provide a legal and regulatory framework that will enable the removal of persistent obstacles. To this end, we have scheduled a follow-up roundtable with the National Assembly later in the year, he added.

    Osunsanya said: “The demand for gas in Nigeria is estimated at about 6.6 billion standard cubic feet per day (bscf/d). This number includes about 3bscf/d for domestic utilisation (gas-to-power, industrial and commercial consumers), and about 3.6bscf/d for export to international markets via Liquefied Natural Gas (LNG) and to the West African region via the West African Gas Pipeline.  Total supply into the market has been about 4.3bscf/d with most of this going to meet the export demand, particularly LNG.  This has meant that the domestic market only receives about 1.3bscf/d leaving a supply gap of 1.7bscf/d.  This supply situation has been further worsened by the supply disruptions caused by the recurring acts of sabotage on the gas pipeline infrastructure.

    “The continued government focus on gas is generating a lot of excitement and creates a unique opportunity to capitalize on the gas monetization agenda to propel the economic growth of the country. Prior to the recent reduction in gas supply, we were making steady progress, as the private sector was implementing workable solutions to counter the gas supply imbalance. Unfortunately, due to lower gas supply, marketers have been forced to adopt a more pragmatic approach by rationing the available supply.  This has had a direct effect on Industrial users who have had to scale back production and endure low capacity utilization.  In addition, the limited supply has affected power generation leading to a severe curtailment of power supply to the national grid.  This has led to increased use of more expensive alternative fuels by manufacturing industries across the country, which in many cases has resulted in downsizing to reduce overheads. Now, we require an industry-wide concerted effort to address the lingering challenges.

    “Pragmatic pricing, the ingenuity of indigenous firms to ramp up supply from varied sources to provide assurance of reliability will quickly position gas as the long term solution to our energy concerns.”