The Nation Newspaper

Category: Energy

  • Host communities back modular refinery project

    Leaders of the Onisiwo Island near Takwa Bay, Lagos, where the proposed modular refinery of Integrated Oil and Gas Limited will be located, have backed the project.

    At a public forum in Lagos, a leader of the baales and other members of the communities, Lateef Akinsode,  condemned the petitions against the project.

    In a communiqué after the stakeholders’meeting, the communities gave their support to the construction of the refinery. A resolution was reached between integrated oil and gas and the communities.

    Akinsode condemned the alleged petition and sponsored media attacks by Raymond Gold and Christina Armstrong Ogbonna against the project. The community leaders described the allegations as “deceitful and untrue” and dissociated themselves and their communities from it.

    He said the communities supported the proposed Tomaro Island refinery development project, adding that the  development that will follow the construction of the project will be enormous.

    The community leader said the communities disassociated themselves from the petition by Raymond Gold and Christina Armstrong Ogboon, asking the duo to apologise to the communities and the oil firm.

    “We, the Baales of the various communities on the Onisowo Island and the Onisowo family, hereby disassociate ourselves from this false representation of events on the island and would also wish to publicly apologise to the chairman of Integrated Oil and Gas for the embarrassment caused by the publication.”

    Contrary to the claim of Gold, the community leaders said they were aware of the plans of Integrated Oil and Gas for the island and had been carried along in all the discussions.

    “We are aware of the plans of Integrated Oil and Gas Limited for the island and we have had several engagements with the management over the last two years, including the meeting we held last month with the representatives of the Federal Ministry of Environment from Abuja as part of the initial preparation for the Environmental Impact Assessment (EIA).

    “Integrated Oil & Gas has always engaged with our communities through us, the Baales, and we have always passed down the information to members of our communities on their plans for the island. We know that these projects will bring development like roads, borehole water, electricity, among others, to the island and provide jobs for our youths.

    “It is clear that some people do not want progress to come to this island but instead they would wish to blackmail Integrated Oil and Gas in the hope to make money for themselves, hence the wicked letter and publication by these fellows,”they said.

    The Group Managing Director of Integrated Oil and Gas Limited, Mr. Anthony Iheanacho, said on April 2, its $116 million modular refinery would come on stream before the end of the year, adding that the company had been given provisional licence to commence preliminary work for a 20,000-barrel capacity modular refinery.

  • TCN bars website on power generation

    TCN bars website on power generation

    The Transmission Company of Nigeria (TCN) has barred access to its website on the volumes of electricity generated, distributed and transmitted in the country.

    This is coming as generation dropped to below 3,000 megawatts (Mw) in recent times, a development which has negatively impacted on electricity supply in Nigeria.

    Known as www.nsong.org, the website, which provided information on what the state of turbines and their output are; how many megawatts of electricity are generated; the volume of power that is distributed, transmitted and projections made in respect of electricity production in the country, has been shut, with no explanation offered by TCN management.

    The Nation’s findings revealed that visitors to the website have since last week been unable to access the site.

    It was further gathered that the development has left stakeholders including journalists who use the site as a source for their stories disappointed.

    Efforts to get TCN’s spokesman, Seun Olagunju, to speak on the issue proved abortive as calls and text messages made to her were not replied.

  • Why fuel scarcity persists

    Fuel scarcity and long queues are not new to Nigerians, but lately, the situation has become worrisome to the extent that the lowly and the mighty complain. Valuable man-hours are being spent at retail outlets; people park their vehicles at fuel stations overnight, engage in fisticuffs, all in their bid to buy fuel.

    However, major causes of the lingering and seemingly intractable fuel scarcity include policy error, marketers’ lack of patriotism and greed.

    The Petroleum Products Pricing Regulatory Agency (PPPRA) initiated the misstep when it advised the government to assume the sole status of fuel importer even when it knew that the government through the Nigerian National Petroleum Corporation (NNPC) had limitations in terms of logistics, storage facilities and distribution network. The allocation of 78 per cent import of the country’s total consumption to the NNPC was ill-advised by the PPPRA. It was a serious pricing policy somersault, and the timing was also wrong.

    The most regrettable of the situation is that Nigerians are suffering from the biting fuel shortage at a time the world is paying less for the same product, with oil producers seeking ways to stem oil glut and low price.

    The Nation gathered that due to low oil prices at the international market, the Federal Government enjoyed uninterrupted five months of over-recovery in line with the PPPRA pricing template. Over-recovery is simply a period when the landing cost of imported fuel is far less than the subsidy level (the open market price or pump price).

    Therefore, within the five months (November 2015 – March 2016), the government made at least N4.20 on every litre of fuel imported. When this is multiplied by the 40 million litres estimated to be the national daily consumption, government would be saving N168 million daily. With this level of saving, the government should not be talking about subsidy now as the savings suppose to offset the current increase in price of importation, following a marginal increase in price of crude oil.

    Considered from whichever angle, the PPPRA misled the government.  The NNPC imports and stores the product in privately-owned depots and pays N3 on every litre. It distributes the product to privately owned retail outlets and pays the marketers some margins for using their facilities. It also pays demurrage for delays in discharge of their imports at the ports. Cargos brought in by NNPC are not cleared speedily like those of the private marketers.

    PPPRA’s advice could have worked if the refineries are working.

    Besides, the Central Bank of Nigeria (CBN) is a member of PPPRA Board. The institution failed to advise the government on the need to issue foreign exchange (forex) to the marketers, knowing that the non-issuance of forex would discourage marketers from importation.

    The PPPRA position was that if NNPC alone imports, government will not pay subsidy, a decision that compounded the fuel supply situation.

    What the CBN ought to have done was to offer forex to the marketers, but effectively monitor and track the deals to ensure that such forex were not diverted.

    Some members of the Major Oil Marketers Association of Nigeria (MOMAN) also cashed in on their lack of access to forex and decided to sabotage fuel distribution by diverting supplies from NNPC to areas where fuel is sold at very high prices.

    In some instances, they sell off the fuel allocated to them at the depot to independent marketers, who are willing to pay more because they sell above the regulated price. They also supply to dealer-owned filling stations, branded in their names. These dealers are independent marketers, whose filling stations bear the brand names of these major marketers.

    But, with the latest sharing of import allocation of 41.73 per cent to NNPC and 58.27 per cent to marketers and the decision of the International Oil Companies (IOCs) to make forex available to importers , there are hopes that normalcy will return to fuel distribution in a few days.

  • Kachikwu for offshore conference in U.S.

    Kachikwu for offshore conference in U.S.

    The Minister of State for Petroleum Resources and Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Ibe Kachikwu will declare Nigeria’s pavilion at this year’s offshore technology conference (OTC) holding in Houston, Texas, United States.

    Also, the Petroleum Technology Association of Nigeria (PETAN) that leads Nigeria’s delegation to the yearly event will address current realities and hidden opportunities in Nigerian oil and gas industry.

    The conference is scheduled for May 2-5.

    PETAN’s Publicity Secretary, Mr. Nik Odinuwe said the conference has as theme: The Nigerian oil and gas industry: Current realities, hidden opportunities.

    He said PETAN is expected to consolidate achievements recorded by the association in driving partnership of indigenous oil and gas companies by international oil and gas companies. The conference is an annual gathering of people from around the world with interest in oil and gas, comprising policy makers, operators, professionals, manufacturers, business executives, entrepreneurs and visitors, he added.

    Odinuwe said Kachikwu will declare the Nigerian pavilion open, while the Managing Director, Shell Nigeria Exploration and Production Company (SNEPCo) Mr. Bayo Ojulari and the Managing Director,  Seplat Petroleum Development Company, Austin Avuru, among other would be in attendance.

    He said that the OTC avails the attendees an opportunity for engagement with key players in the industry, adding that Nigeria’s delegation in this year’s edition includes the NNPC, Independent Oil Companies (IOCs), independent, international and indigenous service companies, investors and representatives of government agencies.

    He said PETAN is again at the forefront co-coordinating the Nigerian Pavilion. The OTC was founded in 1969 and now attracts over 150,000 visitors and 3,700 exhibitors from around the world each year.

    The OTC’s daily technical programme of presentations and the innovative breakfast and lunch sessions provide a dynamic forum for discussing the technical challenges facing the offshore oil and gas industry, he said, adding that PETAN members have exhibited at the OTC every year since 1999 making OTC 2016 its 17th.

    Speaking on the success of 2015 conference, PETAN President, Mr. Bank-Anthony Okoroafor stated that the conference creat opportunity for people to meet and interact with serious Nigerian players, business men, entrepreneurs and technocrats who have been in business for over two decades.

    Okoroafor said this was why PETAN is taking this extra step to bring Nigerian companies to exhibit and make new business negotiations.

    “We arranged elaborate programme through the OTC week. We had plenary session as well as a workshop with Nigerian oil professionals abroad, where issues in the country’s oil and gas will also be discussed.

  • Shiroro power to increase generation by 300mw

    Shiroro power to increase generation by 300mw

    The Shiroro Hydro Power Station (SHPS) will soon double its operating capacity of 300mw through solar plant.

    Alhaji Dauda Abdulaziz, SHPS Chief Operating Officer, disclosed this on Thursday in Shiroro to a team from Infrastructure Concessions Regulatory Commission (ICRC), Nigeria Electricity Regulatory Commission (NERC) and Bureau for Public Enterprises (BPE).

    Abdulaziz said that the new solar plant would be digitally controlled instead of the conventional manual system.

    “This new solar form of energy generation we are introducing will generate additional 300mw. With this progress, Nigerians will henceforth enjoy more power supply.

    “It is a project that has prospect of employment for skilled young Nigerians,” he added.

    Abdulaziz said that consultation on the procurement process for the solar energy project was ongoing with relevant agencies and the host community to reach agreement for commencement of work.

    He told the team that each hydro power station in Nigeria was mandated to generate 3000mw per annum, adding that Shiroro had been generating 2,360mw.

    Abdulaziz said that the shortfall was due to the repairs and the upgrade of facilities after the handing over of the company in Nov. 1, 2013.

    “The annual energy generation currently is 2,260mw. Installed capacity is 600mw, 4 units each that generate 150mw.

    “There are four units meant to generate power, but right now we only use two to generate 300mw because the other two units are under maintenance and are not generating energy for now,” he said.

    Earlier, Alhaji Aminu Diko, the ICRC Director General, had expressed optimism with the upgrade and repairs of infrastructure to enable the station to generate 3000mw.

    “I am happy with what we are seeing. The new system of bringing in ICT and capital to invest for Nigerians to enjoy maximum power supply is a way forward.

    “What is now mitigating the generation of sufficient energy generation is the certain repairs and operation that needs to be carried which includes bringing in extensive experts from the USA.

    “The plan to have additional 300MW of power generation using solar can only be achieved through government partnership with the private sector.

    “This 30 years concession is for the power station to invest money, give the desired power generation and recover their investment within the period of 25 to 30 years.

    “It is after these years of investment that they will refer back to government to ascertain if there has been an improvement with sufficient manpower to run the company or not.

    “The essence of Public-Private Partnership (PPP) is that come let us partner, we will agree and disagree, but we have a strategic objective.

    ”If the concessionaire is no longer up to the agreement, there are clauses in the agreement that require us to take certain action of termination of agreement”, he said.

    Diko called for immediate completion of the maintenance works since the two units currently working was not enough to generate the needed energy consumption.

    “Having only two functional units in the whole system is a setback; It is not enough.

    “There has to be an improvement. Shutting down unit every evening to allow divers to work under water is not good for the present situation the country is in.

    “This overhauling has to be fixed so that it will be easy to increase capacity generation,” he said.

     

  • IPMAN disowns fuel scarcity claim

    IPMAN disowns fuel scarcity claim

    The National Operations Controller and immediate past National Secretary of Independent Petroleum Marketers Association Nigeria (IPMAN), Mr Mike Osatuyi has debunked a report that the association was responsible for the fuel scarcity. The report was credited to  Mr. Lawson Ngoa, who claimed to be the interim management secretary of IPMAN.

    Osatuyi in a statement after IPMAN’s national executive council (NEC) meeting in Abuja, said Lawson Ngoa is not a member of IPMAN, but an agent of the Ministry of Petroleum Resources brought in to mediate in the internal crisis of IPMAN.

    He said while the intervention of the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu in resolving the internal crisis in IPMAN is appreciated and commendable, the forefathers, past presidents, leaders of IPMAN and the general members of IPMAN nationwide will not allow Mr. Lawson Ngoa, who is not a marketer let alone being an IPMAN member, to use IPMAN’s name as a shield to defend or protect a system failure of the Nigerian national Petroleum Corporation (NNPC).

    He said: “It is pure defamation of IPMAN’s name to go on air that IPMAN has accepted the responsibility for the scarcity of petroleum products and that Nigerians should hold IPMAN responsible for the scarcity. Crisis in IPMAN with government’s intervention is not new.  Previous government agencies have intervened in IPMAN crisis without blackmail from the agencies concerned right from the time of Alhaji Jarfau Paki, the then Special Assistant to President Olusegun Obasanjo on Petroleum Matters, Dr. Oluwole Oluleye, the former Executive Secretary of Petroleum Products Pricing Regulatory Agency (PPPRA), had intervened in IPMAN matters without blackmailing the Association.

    “Some former Managing Directors of Products and Pipeline Marketing Company (PPMC) had also intervened in IPMAN matters without destroying IPMAN’s name. IPMAN controls over 80 per cent of the retail outlets in the country and IPMAN has partnered with previous governments to solve previous fuel crisis without damaging the association name.”

    He continued: “It is also on record that no member of IPMAN has voiced out against peace since this government stepped in to resolve its crisis few days ago. That is evidence that IPMAN and all members want peace and are ready to embrace peace for seamless operation of the association’s administration and by extension the Nigerian oil industry.

    “IPMAN doesn’t want any government agents, representatives, coordinators that will add more wound to the association’s injury or destroy the association’s name that was established over 35 years ago. IPMAN members nationwide have invested trillions of Naira in the Nigerian downstream oil sector.

    He added: “Lawson is not aware or knowledgeable of the gravity of his statement to IPMAN and Nigerians who are suffering for weeks for somebody’s system and planning failure. It is unfair statement and he has to apologize to IPMAN and Nigerians for deceiving the populace.

    “Lawson should tell the public if IPMAN issues import permit, allocate foreign exchange (forex) for import, or involved in import planning of NNPC and import allocation formula, among others? He has no authority or mandate to use IPMAN’s name to shield any of the government agencies for any operational or administrative mismanagement. IPMAN is ready to work with the government in ensuring products availability.”

  • Monopoly adds to cost of oil production, says Nigerdock chief

    Monopoly adds to cost of oil production, says Nigerdock chief

    The monopoly in the oil and gas logistics and supply services sector is largely responsible for high cost of oil production, a stakeholder has said. It also adds an extra $3-$5 to per barrel of crude produced, Nigerdock and Jagal Group Chair, Anwar Jamarkani said.

    He spoke when the Comptroller-General of the Nigeria Customs Service, Col. Hameed Ali (rtd) , Customs Deputy Comptroller-General and other senior officers of the service paid a working visit to the Nigerdock and Snake Island Integrated Free Zone on Snake Island, Lagos.

    According to Jamarkani, the dominant monopoly in the Nigerian oil and gas logistics and supply services has existed for over 20 years, sabotaging the national economy, conspiring and working against any potential competitors and against Snake Island Integrated Free Zone (SIIFZ).

    He noted that the monopoly has consistently and aggressively used various government institutions to compromise, maintain and entrench its monopoly with impunity. Regrettably, attempts according to him, have been made in times past to also use the customs. “We, therefore, appreciate the fact that President Muhammadu Buhari’s administration is aggressively doing away with such impunity,” he said, urging the Customs chief to encourage investors by creating a level play ground for them.

    Jamarkani said: “The net effects of the monopoly’s actions are numerous. This monopoly adds extra cost of $3-$5 per barrel produced in Nigeria, which translates to over $1.5 billion per annum. This monopoly is a  toll gate. They have forced the oil and gas industry and the nation into capitulation, and driven away investments from Nigeria.

    “The oil and gas supply and logistics service in Nigeria is the most expensive in the world because of this entrenched monopoly. This monopoly seriously damages the international reputation of Nigeria. The monopoly has over the last 20 years used a non-existent law to justify the assertion and false claim that “all oil and gas cargo must first be discharged at their ports of preference.”

    He continued: “The monopoly has consistently used this non-existent law to coerce the industry and service providers into dosing their bidding and thereby undermining the Nigerian economy. If this law indeed exists, the Federal Government would not have encouraged other critical players like SIIFZ to make huge investment in the country. SIIFZ and Nigerdock are open for competitive business and we are determined to bring down your operational costs by at least 30 per cent.

    “In line with the Federal Government’s vision for free and fair competition, there is no room for the continued monopoly in Nigeria as it is sabotaging the industry and the national interest.”

    Jamarkani said SIIFZ and Nigerdock have created more than 6000 direct jobs, delivered landmark projects for Shell, Chevron, ExxonMobil, Total, Hyundai and Samsung, as well as first fabrication for Total/Samsung Egina floating production, storage and offloading (FPSO) vessel. “The facility has also trained over 6000 people for the oil industry and delivered over 27, 000 training programmes. It is the largest shipyard facility in West Africa,” he added.

    The Customs chief, while addressing the workers, said: “No business can grow without committed workers. You have added great value to this company. On behalf of the Federal Government, I congratulate you and appreciate what you are doing. I assure you that whatever we can do as a government to support this company, we will do it. There is need to encourage companies like this to create more employment and assure you of government’s readiness to provide the enabling environment.”

    He added that with the presence of a company like SIIFZ, Nigeria will not have to carry its vessels and machineries to Korea for repair, painting and maintenance.

  • Meter manufacturers lose N10b to power sector issues

    Not less than N10billion has been lost by five meter manufacturing companies due to the problems in the nation’s power sector, The Nation has learnt.

    According to investigation, the five companies include MEMCOL Nigeria Limited; MOJEK Nigeria Limited; UNISTAR Nigeria Limited; EMCON Nigeria Limited and SWEDEN Nigeria Limited.

    It was gathered that the firms approved by the Federal Government in the wake of reforms in the sector few years ago, lost the money to problems such as poor patronage from the power distribution companies (DisCos), erratic electricity supply and unfavourable foreign exchange regime, among others.

    The Executive Secretary, Electricity Meters Manufacturing Association of Nigeria (EMMAN), Mr. Muideen Ibrahim said the firms have lost several billions of naira to crisis plaguing the power sector.

    He said each of the five companies lost a whopping N2billion, which amounted to N10billion.

    He said: ‘’ Given the fact that power supply is erratic in the country, and that the firms were using alternative sources of power, the firms no doubt have lost huge amount of money. The firms were relying on generators to stay in business, implying that they have spent a lot of money on procurement of diesel.”

    He said the DisCos have not been patronising manufacturers of meters in the country, adding that the issue is affecting production from the companies.

    “Apart from losing to poor power supply, the firms have lost to poor patronage caused by the refusal of the DisCos to buy meters from them. When you go to the factories that are owned by the firms, you see unsold meters in large quantities. Who bears the cost? It is the manufacturers of the meters,” he added.

    Also, the Managing Director, MEMCOL Nigeria Limited, Mr. Kola Balogun said $20million was invested in his company at inception out of which the firm has lost over N2billion to the problems in the sector.

    He said the problems include poor patronage by the failure of DisCos to buy meters from his firm and others, dwindling power supply, abysmal foreign exchange mechanism and others.

    He said MEMCOL has not been accessing power from the grid, stressing that the issue made the firm to use generator for its operation. “MEMCOL Nigeria Limited has lost over N2billion to the crisis in the sector in recent times. To give the total amount of money that was lost by the five meter manufacturers would be difficult. However, I know as a matter of fact that the other four organisations have their own share of the problems in the industry. They must have lost a lot of money,” he said.

    According to him, many of the firms have lost to lack of patronage because they hardly receive orders from buyers especially power distribution entities in the country.

    This, he said, is evident in the large quantities of meters, which the firms are having in their stocks.

    Balogun said many of the firms are having negative portfolios since they could not raise funds to finance their operation.

    The Nigerian Electricity Regulatory Commission (NERC) approved more than 10 companies to manufacture meters in the country. Out of this, five were operating, while others have closed shops due to bad economic climate.

  • ‘NNPC, subsidiaries must adopt financial controls, transparency’

    ‘NNPC, subsidiaries must adopt financial controls, transparency’

    The Natural Resource Governance Institute (NRGI) has advised the management of the Nigerian National Petroleum Corporation (NNPC) to adopt proper financial controls, transparency measures in all of its subsidiaries, if it intends to be profitable.

    The Institute in a report said despite the current global low oil prices, the Corporation could still net several billions of dollars per year for the nation’s treasury if it follows certain standard operational steps in its reforms.

    It said the government must first put in place a clear, legally enforceable rule that will govern revenues the NNPC can keep, adding that previous efforts at reforming and restructuring the NNPC did not follow this step.

    The NNPC must adopt new financial controls and transparency measures for its subsidiaries. This will apply not only to the Nigerian Petroleum Development Company (NPDC), but equally to the Corporation’s half-dozen oil trading subsidiaries, none of which the Institute disclosed what they earn or how they share earnings.

    The group said there is no public accounting for the money that NNPC’s downstream arm, the Pipelines and Product Marketing Company (PPMC), makes from selling refined products including the billions of dollars in gasoline imported each year through oil-for-product swaps

    In the NRGI report made available to The Nation, the Director, Governance Programmes, Alexandra Gillies said the domestic crude allocation should be eliminated by the government, and agree to a new way of supplying oil to the refineries as part of its efforts to find new ownership and management structures for them. She noted that NNPC could remain the largest or even sole supplier under several different models.

    These include tolling, where the NNPC would grant the refineries operational independence and lease refining capacity from them in exchange for crude; repurchase agreements, where the Corporation would buy crude from its upstream partners on behalf of the refineries; or further inter-company sales, with volumes restricted at the refineries’ actual needs instead of 445,000 barrels per day – an amount she said far exceeded the small volumes (often under 100,000 bpd) they can process.

    She said if the NNPC continues to do oil-for-product swaps; it could simply allocate parts of its regular export sales to those deals.

    The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu had announced the unbundling or restructuring of the Corporation into  seven divisions and 30 independent companies with their own managing directors. Gillies agreed it was a step toward turning NNPC into a more appropriately-sized, profit-driven firm, but nevertheless pointed out the proposal did not explain how the new companies would fund their operations or share their earnings with the government.

    She said such a rule was also missing from the current plans to break the long delayed Petroleum Industry Bill (PIB) into smaller pieces for passage, adding drafts of a first, senate-led installment were already making the rounds. However, senate leadership said debate would start soon.

    She noted the new bill envisions an NNPC split into two partially privatized companies: the Nigeria Petroleum Assets Management Company and a national oil company. She said the latest drafts talk variously about these entities retaining unspecified shares of earnings, charging the government ‘management fees,’ receiving federal budget appropriations to cover some un-enumerated costs, and paying dividends to the Federation Account based on policies to be agreed down the road.

  • Buhari to open oil & gas confab

    Buhari to open oil & gas confab

    President Muhammadu Buhari  is to deliver the Presidential Address at this year’s edition of the country’s Oil and Gas Conference and Exhibitions (NOG16) slated for June in Abuja, its organisers, CWC Group, have said.

    The event holds between June 13 to 16, at the International Conference Centre (ICC), Abuja.

    Some industry players said the President’s participation at the event is highly anticipated as they seek the Federal Government’s intervention in the face of global challenges.

    The price of crude has dropped to record levels, forcing many firms in the industry to cancel or suspend key projects and investments as well as record significant job cuts

    NOG16 will serve as a platform for the government to showcase the direction it is taking the oil and gas industry in the years to come.

    Venezuela’s former Minister of Mines and Energy,  and Member of Board, CWC Group, Dr. Alirio Parra,  said: “NOG now in its 16th year has become an extraordinary event in the Nigerian and international energy calendars. It brings together policy makers, operating oil companies, technology innovators and local manufacturers in an open and free discussion and debate that has the potential for developing new strategies for growth and investment.”

    Alongside President Buhari, other high-level government officials, who will be participating in the four-day event, include the Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu as well as other ministers, senators, senior government representatives from the Ministry of Petroleum Resources, Nigerian National Petroleum Corporation (NNPC) and its subsidiaries.

    Also participating will be leaders and top management of international oil companies, independent producers, international and indigenous service providers and associations.