The Nation Newspaper

Category: Energy

  • Uganda seeks NCDMB’s local content model

    A delegation from the Republic of Uganda has visited the Nigerian Content Development and Monitoring Board (NCDMB) in its quest to model the development of Uganda’s local content policies after the Nigerian Oil and Gas Industry Content Development (NOGICD) Act, considered to have achieved immense benefits for the Nigerian economy.

    The 20-man delegation was led by the Director of Petroleum in the Ugandan Ministry of Energy and Mineral Development, Mr. Ernest Rubondo and the Counselor, Ugandan High Commission in Nigeria, Mr. Nurh Byarufu. Other members  included regulators, bankers, oil industry executives among others and they sought strategies for local vendor development, capacity building of their citizens to meet industry standards, ensuring compliance by operating and service companies, transparent bidding process among other subjects.

    In his remarks, Rubondo said the East African country was at the cusp of investing $20billion in the development of 15 oil fields, construction of a refinery and an export pipe line- projects, expected to be completed within five years.

    According to him, the leadership of the country were determined to retain a substantial part of the $20 billion spent within the country, hence their mission to share Nigeria’s experience in local content which would help their country succeed in that regard.

    Welcoming the delegation, the Acting Executive Secretary, Mr. Daziba Patrick Obah commended the Ugandan Government for identifying Nigeria as a shining example in the implementation of local content, noting that other African countries such as Kenya and Congo Brazzaville had also sought Nigeria’s mentorship of their local content initiatives.

    He also extolled the Ugandan officials for deciding to institutionalise local content at the onset of their oil and gas industry as it would guarantee tangible benefits for their citizens aside the revenue that would accrue from the sale of crude oil and gas.

    He said Nigerian Content has helped the government and the Nigerian people to reverse the flight of industry to foreign countries in the form of personnel, materials, equipment, fabrication and engineering designs. The Executive Secretary further said Nigerian government was the driving force behind the implementation process, stressing that strong political will was necessary to overcome powerful forces opposed to the implementation of local content.

    He advised the Ugandans to develop robust regulations  applicable to the state of their industry and technological base while encouraging collaboration with local and international stakeholders to domicile capacity in-country.

    Manager, Strategy and Policy Development Division (SPDD), Mr. Abdulmalik Halilu, said the percentage of Nigerian Content in the oil and gas industry had increased from less than five per cent before 2010 to 14 per cent in 2014 and 35 per cent in 2015. He added that the Board’s interventions were expected to increase local content levels to 50 per cent by 2017.

    According to him, contracts awarded by operating companies to Nigerian service companies had also increased from about 40 per cent of total contracts before 2010 to 75 per cent in 2015, while the target was to achieve 85 per cent by 2017.

  • S/Africa’s Petrocam to build refinery in Nigeria

    The list of International Oil Companies (IOCs) wishing to build refineries in Nigeria has swollen with the latest interest coming from Petrocam, a South African-based oil firm.

    The company, which is known in crude oil trading in Africa and beyond, said its decision was borne out of the need to explore opportunities in crude oil processing in Nigeria.

    The United States (US)-owned oil giants – Chevron and ExxonMobil – as well as Royal Dutch Shell and Italian oil giant, Eni, have indicated interests in building refineries in Nigeria to boost fuel supply and add value to the industry.

    The Chief Executive Officer, Petrocam Trading Nigeria Limited, a partner to Petrocam South Africa, Mr. Patrick Ilo said his firm would like to improve the production and supply of fuel in the country by building a refinery.

    According to him, Petrocam would look at the guidelines for building refineries, and afterwards go ahead to set up a refinery immediately it is satisfied with the guidelines.

    Ilo said: “We, at Petrocam would not hesitate to have our own refinery in Nigeria once we are satisfied with the guidelines, introduced by the Federal Government to guide the operation of refineries.  We would, in the first place, set up a modular refinery and thereafter, build a bigger refinery in order to process crude oil in large quantities and further help in improving supply of petroleum products in the country.”

    On competition, Ilo said his firm would stave off competition from other companies that are investing in refineries if it sets up a refinery. He said the more investors in refineries, the better for the downstream segment of the industry.

    ‘’Competition is good for the development of any nation’s economy.  For a country’s economy to develop, it must accommodate many players. Anything short of this will affect growth.  As regards private refineries, there will be competition among the operators, and the competition will in turn drive the growth of the industry. In view of this, competition is welcome,” he said.

    Ilo said a company in search of growth must create a niche for itself, especially in a highly competitive and sensitive sector such as oil and gas.

    Petrocam, he said, has carved a niche for itself by building solar-powered fuel retail outlets in Nigeria, adding that the firm is not afraid of competition from rivals such as Conoil, MRS and others.

    He said Petrocam constructed solar-powered outlets in order to make a difference and further ensure an uninterrupted supply of fuel.

    Also, a former President, International Association of Energy Economists (IAEE), Prof. Adeola Akinnisiju, said the decision of the Federal Government to allow private institutions to operate refineries would boost fuel supply and further engender competition in the industry.

    Firms such as Seplat, Integrated Oil Nigeria Limited, and Dangote Group have shown interests to build refineries. Dangote Petrochemical Refinery Limited is expected to refine over 600,000 million barrels of crude daily when it begins operation. In addition, other investors will produce various quantities from their refineries, signaling an end to the nation’s fuel problem.

  • Ikeja Electric launches power lines monitoring for safety

    Ikeja Electric launches power lines monitoring for safety

    To boost safety measures for lives and properties, Ikeja Electric has launched a novel network safety monitoring initiative.

    This initiative allows for round-the-clock electrical asset surveillance across its network by special teams, specifically set up for this purpose. The teams made up of safety specialists and technicians, divided into monitoring units, patrol the entire network armed with multimedia gadgets which enables them to capture damaged assets and imminently dangerous connections in real time.

    The data captured is relayed to a central control unit from where it is passed on to the nearest Undertaking where the Network Operations log the information and ensures resolution within the shortest possible time.

    Speaking on the initiative, the company’s Head of Corporate Communications, Felix Ofulue, stated that safety in a high risk sector, such as the electricity industry cannot be over-emphasized because if the safety standards are compromised, the resultant effect could be disastrous leading to damage to property and even loss of human lives.

    Ofulue said: “Ikeja Electric will not compromise on safety. It is a high risk environment and coupled with the rains and high winds of this season, we have to continue the campaign of safety across our network. We are also aware that by putting forward these initiatives we are raising the bar of safety across the entire company with other industry players also raising their own standards of safety. In the end if we are able to keep people safe, we will be justified.”

    He noted that in consonance with the company’s health and safety mandate, it has issued series of weather alerts, calling public attention to common dangers associated with the inclement weather and these public alerts are put out in order that consumers may be more aware of their surroundings and adopt better and higher safety precautions in order to remain safe.

    “The monitoring team is a roving one, constantly on the move, scouting for unsafe and damaged assets: he said, while pointing out that managing the assets of the company was integral to the company’s ability to deliver safe supply of energy to homes and businesses.

    “The management solicits the support of the public in ensuring that the initiative is a success by urging residents who notice any dangerous asset, such as leaning poles, snapped or low hanging cables to take pictures and send to HSE@ikejaelectric.com, carefully noting the location of the asset with possible landmarks if necessary. Others can simply call our customer care lines, 01-448-3900, 0700-022-5543, 01-7000-250.”

    Ofulue also cautioned against conducting commercial activities under power lines, warning of the imminent danger associated with sustained activities underneath cables that may be under stress from strong winds and rains.

    Ikeja Electric was awarded the prize for Company with the Best Health and Safety Initiatives, 2015/16 at the Nigerian Risk Award -Economic and Social Risk Summit. This award follows an earlier recognition at the 2015 Nigeria Safety Award for Excellence, Hall of Fame (9jaSAFE AWARDS), where the company also bagged the Award for Company with the best HSE Practices in the Power sector, he added.

  • NLNG showcases CSR system to Korean community

    NLNG showcases CSR system to Korean community

    Upon request by the Embassy of South Korea, Nigeria Liquefied Natural Gas Limited (NLNG) has presented the model of its corporate social responsibility (CSR) to the  Business Community, revealing its strategies and key success factors.

    The invitation was inspired by the enviable impact of NLNG’s efforts in improving the lives of its host communities and numerous stakeholders in the country, the firm said in a statement.

    NLNG’s General Manager, External Relations, Dr. Kudo Eresia-Eke, said the main secret to the company’s CSR success was its commitment to being a trusted partner to all its stakeholders for the sustainable development of Nigeria and its host communities.

    Eresia-Eke attributed NLNG’s success to its corporate values of integrity, excellence, teamwork and caring, especially the company’s ability to listen to the stakeholders, learn from them, be fact-based, think sustainability and put the people and country first in all its CSR considerations.

    He said: “We are pleased for the opportunity to present our CSR model to the leadership of the Korean Embassy and business community. We view the invitation to do so as welcome recognition of the unique and effective projects we run in the communities and elsewhere as part of our corporate vision of a global LNG company helping to build a better Nigeria.”

    He illustrated with some of the company’s programmes/projects including sponsorship of the most prestigious literary and science prizes in Africa, The Nigeria Prize for Science and The Nigeria Prize for Literature, which come with cash prize of $100,000 each; the $12 million University Support Programme through, which it is implementing the construction and equipping of engineering laboratories in six selected Nigerian universities drawn from the country’s geo political zones, to mention a few.

    Eresia-Eke also praised NLNG’s host communities for providing the conducive environment for the company to do business, and actualise its CSR initiatives.

    The Korean Ambassador to Nigeria, Noh Kyu-duk, who led the delegation of top Korean diplomats and senior executives of the major Korean companies in Nigeria to the event commended the company’s CSR and thanked them for honouring its invitation. Korean companies represented at the presentation included Samsung, Daewoo, Hyundai, and Korean Energy Management Company Limited (KEMCO).

    Nigeria-South Korea trade and bilateral relationship have continued to grow since the establishment of ties in 1980. Today, the volume of trade between both countries has risen to over $4 billion, while Nigeria has also become South Korea’s 52nd largest export market and its 30th biggest source of imports.

    Recently, Nigeria LNG acquired six new build Dual Fuel Diesel Electric vessels from South Korea’s Samsung Heavy Industries (SHI) and Hyundai Heavy Industries (HHI) for $1.6billion.

  • NDPHC gets new boss

    NDPHC gets new boss

    A new helsman has been appointed for the Niger Delta Power Holding (NDPHC). He is Mr. Chiedu Ugbo, who would act as it managing director.  The NDPHC supervises the National Integrated Power Project (NIPP).

    Ugbo replaces the former boss of NDPHC, Mr. James Olotu, who handed over last weekend at the company’s headquarters in Abuja.

    When Olotu was the helmsman at the NDPHC, he was able to build 10 mini power stations under the NIPP, including, 750mw Olorunsogo II, 450mw Sapele, 434mw Geregu II, 450mw Omotosho II, 450mw Ihovbor, 450mw Alaoji, 563mw Calabar and 225mw Gbarain, among others.

    NDPHC’s management and its Transmission Company of Nigeria (TCN) counterpart are in talks to sign an agreement on provision of 265mw of power to be specifically kept as spinning reserve to guard against system collapse caused by frequent attack on gas pipelines.

  • Nigerian oil production at historic low, says OPEC

    Nigerian oil production at historic low, says OPEC

    Militant attacks in the Niger Delta region have pushed Nigerian crude oil production to its lowest level in more than a decade, a report from the Organisation of Petroleum Exporting Countries (OPEC) has said.

    The body, in its last month’s report, said Nigerian output slumped to levels not seen in over a decade on the back of a wave of militant activity.”

    It said the country’s crude oil production for May averaged 1.4 million barrels per day, down 15 percent from the previous month, adding that crude oil production averaged 1.8 million bpd during the fourth quarter of last yearThe International Monetary Fund (IMF), in its latest survey, said the challenges for Nigeria’s economy are “substantial” in view of the fact the country relies heavily on crude oil production for sustenance. The body estimates that Nigerian economy will decline for the rest of the year, while inflation runs close to 10 percent, adding the government’s deficit has doubled and total exports are down roughly 40 percent.

  • Govt needs review of approach to energy access, says PwC

    Govt needs review of approach to energy access, says PwC

    The time is right for policymakers to reappraise their approach to accessing energy, a report from PricewaterhouseCooper (PwC) has advised.

    The report said going by the trends, two-thirds of the world’s population will be without electricity by 2030, which is the target year to achieve the newly agreed post-2015 UN Sustainable Development Goal of universal access to energy.

    The PwC report titled: “Electricity beyond the grid: accelerating access to sustainable power for all”, said a new approach that better recognises the part that off-grid technology can play is needed.

    Partner and leader, Power & Utilities unit of PwC Nigeria, Pedro Omontuemhen, said: “For the millions of people, who do not currently have access to electricity, the old assumption that they will have to wait for grid extensions is being turned on its head by new technological possibilities. There are currently 634 million people without electricity in Africa and in Nigeria. We estimate that only one in five persons has access to power from the electricity grid.  This leaves four in five people living in urban and rural communities, having to fend for themselves with makeshift and localised power solutions. Faster progress is needed, and we believe it can be achieved if national energy policies adopt a more comprehensive approach to energy access, embracing the new starting points for energy provided by stand alone renewable technology and mini-grids.”

    Current electrification strategies tend to focus on national grid extension plan, but Olumide Adeosun, Associate Director in the firm’s advisory practice, said: “It is critical that Nigerians take steps to understand and embrace the new starting points for energy provided by stand-alone renewable technology and mini-grids as discussed in this report. We believe these solutions provide a viable, bottom-up solution to the patchy availability of electricity in Nigeria.

    Some of the enablers, such as mature mobile payment platforms and data analytics capabilities are already in place.  Others will require investors and communities engaging policy makers to formulate an integrated energy access strategy, work together in their communities to accelerate momentum in the electrification of Nigeria’s urban and semi-rural locations.”

    The report foresees a major transformation of the electricity sector in the period ahead and sets out five recommendations for accelerating the increase of electrification. One of them is to develop an integrated energy access plan and map – so that everyone can plan with more certainty for either off-grid or grid extension solutions.

    Another is to create an enabling environment for off-grid development – including clearer criteria for mini-grid development, support for skills and training and more supportive regulation to allow private players to unlock the off-grid market potential.

    There is also the need, according to the report, to recognise the value of and promote the growth of mobile infrastructure, microloans and payment solutions in supporting energy access – mobile infrastructure is proving crucial in the take-up of stand-alone home systems, giving providers a low-cost channel for customer relations and an ability to automatically manage non-payment.

    Establishing an off-grid innovation and development fund – a highly visible development and innovation fund, the report said, can play an important part in spurring off-grid growth in each country.

    Also, having a high-level energy access champion that can drive results – to cut through bottlenecks and monitor results.

  • Firm to produce 525mmscfd of natural gas daily

    Firm to produce 525mmscfd of natural gas daily

    Independent oil giant Seplat, has begun to assemble equipment for the expansion of its Oben Phase 11 plant to increase natural gas plant to produce 525 million standard cubic feet  (mmscf/d) daily.

    Seplat, an exploration and production (E&P) company,  completed the expansion of the Oben gas plant phase last year. The expansion raised the company’s overall processing capacity from about 150mmscf/d to 300mmscf/d.

    Seplat Chairman, ABC Orjiako confirmed the expansion plan when he addressed shareholders at the firm’s annual general meeting in Lagos.

    He said: “The Oben gas plant phase II expansion is underway with additional processing modules ordered. Once installed, the additional processing modules will take gross processing capacity to an expected minimum level of 525 mmscfd.”

    Orjiako said the company’s management, despite the headwinds facing the oil and gas industry, made progress on all aspects of its strategy delivering best-in-class production and reserve growth.

    “We were able to transform our gas business, which achieved 185 per cent year-on-year growth,” he said.

    He added: “In a significant step forward for its gas business, during mid-year 2015, Seplat successfully completed and commissioned the Oben gas plant phase I expansion. This expansion saw the company’s overall gross processing capacity double to 300mmscfd.

    “Alongside the significant increase in gas production, the positive2  financial impact of Seplat’s gas business was evident as revenues from gas sales increased to  185 per cent year-on-year to $77 million.

    “Our (Seplat’s) position as Nigeria’s leading independent E&P company has been reinforced in the past 12 months during which we delivered on corporate performance target despite the oil price volatility. Our resilience is testament to the quality of our business, our strategy, our management team and staff, and our adherence to strong corporate governance policies.”

    Seplat’s Chief Executive Officer CEO, Austin Avuru said the company’s corporate governance stance and transformation initiatives helped to shield it from being heavily impacted by the global low oil price regime. He noted that the company recorded growth in oil and gas production, but lamented the renewed attacks on oil and gas facilities by the Niger Delta militants.  The attacks have led to shutting of Shell’s Forcados terminal a few times, which resulted in shut-in of Seplat’s output.

    According to Avuru, the Forcados frequent closures have affected the 2016 financial year projections.

    He said: “In 2015 we delivered on what was in our control, posting best-in-class reserves and production growth and taking our gas business across a transformational threshold with further expansion still to come. We acted quickly and decisively in response to the weak oil price environment, adjusting our work programme and cost structures.  Against a bleak industry backdrop, we remained profitable with a strong balance sheet underpinning us.

    “Our 2016 full year production expectation has been impacted by the current shut-in of the Forcados terminal. However, we are much better positioned to withstand such interruptions than in prior years. Our gas business takes on additional importance by providing a continuous revenue stream that is de-linked from the oil price. Our enlarged portfolio offers us the scope for greater diversification.

    “I would like to re-emphasise that our strong focus remains on protecting the business and managing value through effective cost reductions, optimising operations, leveraging and strengthening the balance sheet. This will strategically position the company to take advantage of opportunities that will inevitably follow this current downturn.”

    On production figures, he noted that the company’s working interest 2P (proven and probable) reserves at the end of 2015 had increased by 71 per cent year-on-year to 480mmboe, with a further 98mmboe recognised as 2C resources bringing the total reserves to 578mmboe. Recoverable resources discovered, but uncommercialised gas fields are classified as contingent resources and 2C denotes the best estimate of contingent resources.

    Avuru said average working interest production in 2015 averaged 43,372 barrels of oil equivalent per day (boepd), adding that oil and condensate production accounted for 29,003 barrels of oil per day (bopd) up 20 per cent year-on-year while natural gas production was 86 mmscfd, up by 119 per cent year-on-year.

    All  the natural gas produced, he added, was supplied to the domestic market for industrial and power sector use. According to him, gross revenue for the 2015 full-year, stood at $570 million, down by 26 per cent year-on-year. Net profit stood at $67 million and cash flow from operations before movements in working capital stood at $190 million as against capital investments of $152 million. Cash at bank and net debt stood at $326 million and $573 million respectively.

    He also stated that Seplat’s senior partner in the joint venture (JV) operation, Nigerian Petroleum Development Company’s (NPDC) net receivables balance stood at $435 million, down from $463 million at the end of 2014. Further receipts post-period end reduced the net NPDC receivables balance to a current level of about $350 million, he added.

    He said the company has set a production target of between 41,000 and 48,000 boepd in the 2016 financial year and expects its capital expenditures to be around $130 million.

  • Marketers worried over forex guidelines’ delay

    Marketers are worried  over the failure of the Federal Government to release the guidelines on the “flexible foreign exchange (Forex) regime” which provides them with multiple windows of accessing forex for fuel importation.

    They said they were yet to benefitt from the provision weeks after the guidlines were issued. Independent Petroleum Marketers Association of Nigeria (IPMAN), National President Chief Chinedu Okoronkwo, said his members were waiting for directives on  how to source for forex.

    His members, he said, had been importing fuel before  flexible forex was introduced, adding that they hoped the initiative would boost their operation.

    Okoronkwo said “Already, marketers have been placing orders for fuel abroad, and do bring fuel into the country. We have not stopped importing petroleum products. However, we are waiting to know the full details of the new scheme tagged: “Flexible forex regime” as contained in the guidelines.  We would like to have indepth knowledge of the scheme before we let the public know how our members intend to key into it.”

    The Chief Executive Officer, Petrocam Trading Nigeria Limited, a downstream operator, Mr. Patrick Ilo, said marketers are anxious to know what the  guidelines on ‘flexible forex regime’ looked like in view of the fact that it was expected to impact positively on their activities

    He said his firm, like others in the sector, are banking on the guidelines to improve growth.

    Ilo in a chat with The Nation during the opening of Petrocam solar powered mega station in Ajah, Lagos, said the guidelines would favour marketers who would import fuel into the country.

    He said with the guidelines in place, marketers are sure of accessing forex for fuel importation, thereby improving supply. Ilo said: “Though Petrocam started operation before acute shortage of forex began a few months ago, the firm has managed to survive.  Amid this, the Federal Government brought the idea of flexible forex regime.  We at Petrocam are waiting for the guidelines on the regime. I’m confident that the period of waiting for the guidelines would be over soon. When this happens, marketers would source forex at relatively cheaper rates and import more fuel into the country.’’

    The Federal Government introduced ‘flexible forex’ in order to enable marketers source forex independently.  The idea replaced the old and cumbersome method of sourcing forex from the Central Bank of Nigeria (CBN) window by marketers.

    “Flexible forex is said to be a less cumbersome and varied means of sourcing for forex by importers of fuel and other consumables into Nigeria. But we are waiting to see the guidelines that would provide clarity on the issue, he added,” he said.

    The flexible forex was introduced following the increase in price of fuel from N86.50 per litre to N145 per litre and high exchange rate of dollar to naira.

  • NLNG disowns link to looted funds recovery

    NLNG disowns link to looted funds recovery

    Nigeria Liquefied Natural Gas Limited (NLNG) said its attention has denounced  the alleged link with the reported N115 billion loot published in the media, saying it was in bad taste to taint its image.

    According to its General Manager, External Relations Division, Kudo Eresia-Eke, the said media report titled: “N115 billion loot: Ex Air chiefs, politicians top refund list”, was said to have quoted an unnamed public official,  that “$3.1 billion was intercepted in the accounts of NNPC and NLNG and was yet to be moved to the Central Bank of Nigeria in line with the Transaction Single Account (TSA) policy”, defied the ethics of the profession..

    He said: “NLNG views this statement with utmost seriousness and wishes to denounce it as misleading and untrue.

    “To our knowledge, no NLNG’s accounts are the subject of any recovery effort by the EFCC or any other similar authority, more especially as NLNG is a private company and not a government agency or parastatal.

    “We are surprised that these misleading reports continue to be rehashed despite categorical statements by ourselves and third parties, including the Nigerian Extractive Industries Transparency Initiative (NEITI) to the effect that NLNG has no outstanding obligations to government.

    “We wish to use this medium to appeal to all concerned stakeholders to take the necessary care of checking the accuracy of information before publication.”