The Nation Newspaper

Category: Energy

  • IPMAN urges DSS to stop fuel price enforcement

    The Independent Petroleum Marketing Association of Nigeria (IPMAN) has appealed to  Director of State Security (DSS) operation to leave fuel price for its Task Force on Petroleum Monitoring in Kogi State.

    The Federal Government directed that the Premium Motor Spirit (PMS) be sold at N86.50 per litre.

    Leader of the IPMAN task force in the state, Mr. Nwozuzu Henscchenl, whose operatives with men from the Nigerian Security and Civil Defence Corps (NSCDC), moved  around fuel outlets across the state, said interference by some DSS officers hampered their work.

    The team sealed some petrol stations in Lokoja, the state capital, for selling fuel above the approved price.

    Other infractions by the filling stations, he said, include shortchanging of customers through adjustment of dispensing meters and selling at an average of N110 per litre.

    He said the taskforce’s operations, which lasted two days, led to the shutting of some petrol stations, including three in Lokoja. He alleged that he was inundated by calls from people claiming to be DSS operatives, requesting that they either release those arrested or reopen sealed outlets.

    Asked to identity those who called him, Henschenl said he did not know them. He however said when he called the DSS office in Lokoja, he was assured that none of their operatives would engage in any illegality.

    “The places we visited so far, what we saw on their meters is N86.50, but that is in disguise. Mostly, they use calculator and sell at N110; we have our exhibits. Not only that, most of them shortchange customers by dubiously adjusting their meters; when you buy say 10 litres, what you get could be nine litres.

    “We experienced a lot of interference. For example, when we embarked on night enforcement, a lot of the stations had closed, having gotten wind of our operations during the day. After a while, some came, saying they were officers from the DSS, and I had to soft-pedal to manage the situation,’’ Henschenl said.

    He said he had called the DSS headquarters in Abuja to ascertain their identity and complained about their nefarious activities in the state.

  • ‘Why gas import thrives’

    ‘Why gas import thrives’

    The importation of liquefied petroleum gas (LPG) from  neighbouring countries by some operators persists because of the huge profit they make.

    This is despite the efforts of the Nigeria Liquefied Natural Gas Limited (NLNG) to increase LPG supply and reduce the price, The Nation has learnt.

    It was gathered that some operators bring the product from Niger Republic and Chad.

    Sources, who spoke to The Nation on condition of anonymity, said importers of LPG create the impression that there is scarcity. They said such firms bring LPG from Niger and Chad to make more money, and not to help grow the market.

    Such firms try to give the impression that there is inadequate LPG in the country; as a result, they import to complement supply from the NLNG.

    The sources said: “There was no iota of truth in that claim. The reason is because NLNG has the capacity to double supply of the product in the country. In fact, the company has what it takes to provide more than one million tonnes of Liquefied Petroleum Gas to the market. After all, NLNG started supply with 150,000 tonnes, and later increased it to 300,000 tonnes. Given this, the firm can provide more than a million tonnes of LPG as far as the market is ready to absorb it.”

    The Manager, Marketing/Development, NLNG, Abdulkadir Ahmed, corroborated this assertion during  a stakeholders’ forum in Lagos,  saying the   company has increased the supply of the product from 150,000 metric tonnes in 2007 to 350,000 metric tonnes in 2014.

    He said the firm was able to achieve this feat, despite problems, such as lack of inadequate vessels, that would bring the product from NLNG’s base in Port Harcourt to Lagos, inefficiency in shipping operation and its attendant huge freight cost, and uneven distribution channels.

    He said other challenges include absence of functional gas cylinder manufacturing companies in Nigeria, importation  of cylinders and other accessories into the country, poor funding caused by inability of  many people to get capital  to start the business, and delays at the LPG terminals, among others.

    He said analysis of the LPG supply chain and key problems in the sub- sector carried out by NLNG, shows that the commodity is not without market. He said the problems are surmountable, stressing that NLNG was working to fix the problems.

    Also, the Federal Government has ordered the North Oil Jetty (NOJ) and NAFGAS, the two terminals in Lagos, to give priority to the supply of Premium Motor Spirit (PMS) otherwise known as petrol to reduce scarcity of fuel in the country. The development has affected the distribution delay of LPG at the terminals

  • Fed Govt urged to extend forex allocation to power firms

    For a stable power supply, the Federal Government should allocate foreign exchange to the power sector.

    This, according to the chairman, Egbin Power Plc, Mr. Kola Adesina,  will  help the sector’s players to perform better.

    He urged the Federal Government to allocate foreign exchange (forex) to power sector, as it does to their oil and gas counterparts, to enable them provide stable power.

    At a stakeholders’ forum in Lagos, he appealed to the government to help power firms recover some of their debts  to enable them improve their productivity.

    He said the allocation of forex and recovery of debts  were two major issues that should  be addressed to boost the industry.

    Adesina said access to foreign exchange by operators was critical to the growth of the sector. He said the failure of the government to provide the sector with incentives meant the growth of the sector would further be impeded.

    He said investors were operating in a harsh foreign exchange regime, in view of the significant drop in the value of naira, adding that this has negatively impacted on their operations.

    He said operators need foreign exchange to buy equipment from the Original Equipment Manufacturers (OEMs) abroad.

    He said: “One of the most critical issues bedeviling the operation of power firms is unfavorable foreign exchange mechanism. At the point of acquisition of the assets of Power Holding Company of Nigeria (PHCN) in 2013, the exchange rate was N155 per dollar. Thereafter, the rate fell to N199 per dollar at the official market.

    “Invariably, there is the need for the government to allocate foreign exchange to both the operators of both the power generation companies (GenCos) and power distribution companies (DisCos) in the country; the same way it provides for operators in the oil and gas industry.”

    He said this would enable power firms to get the  energy mix right, as well as help the country to record industrial growth.

    Adesina said the management has started feasibility studies on how to double the capacity of Egbin power s plant. He said the company’s growth plans include increasing electricity generation, construction of industrial power park and investing in renewable energy in the Northern.

    According to him, the park would help in promoting the small, medium and large scale enterprises and further move the  economy forward.

    “We, at (Egbin), would definitely overcome some of our challenges. As soon as the coast gets clearer, we would invest more in the sector. We, at Sahara Group, Egbin and KEPCO, are committed to the vision of electrifying Nigeria,” he said.

    The sector had tried to reduce its debt burden, caused by failure of some customers to pay their bills. Also, the operators have been asking for concessions to import equipment into the country for increased production.

  • Acorn okays N4b public offer

    Acorn okays N4b public offer

    The shareholders of Acorn Petroleum Plc have approved an increase of the firm’s share capital by over 200 per cent.

    At an Extra-Ordinary General Meeting (EGM) held in Lagos, the shareholders endorsed raising the share capital from N1.5 billion, N4.5 billion.

    The shareholders resolved to increase the share capital by the creating an addition six billion ordinary shares of 50kobo each to the company’s existing share capital. They said the increase would help  reposition the company for strong competition in the downstream sector of the oil and gas industry.

    Acorn’s Acting Company Secretary, Mr. Deoye Ajidahun said: “The new shares are to rank parri passu with the company’s ordinary shares.

    The shareholders also granted the Board of Director’s approval to raise additional equity capital of N4 billion to new investors upon terms and conditions to be determined by the directors and in compliance with the relevant laws and regulations.

    Acorn Petroleum Plc was established in 1981. Its business includes trading in refined petroleum products in and out of Nigeria, distribution of refined products through its chain of Acorn branded retail outlets, aviation fueling business and storage and terminal operations.

  • How to boost oil, gas reserves, by operators

    President Muhammdu Buhari has been asked to  encourage exploration and production to boost oil and gas reserves.

    Oil chiefs gave the charge at Petroleum Technology Association of Nigeria (PETAN) dinner/awards, night in Lagos.

    They issued robust  and continuous consultations with the government to create an all-inclusive and implementable policies that would keep the sector productive and competitive.

    PETAN Chairman Mr. Emeka Ene, who is also the managing director of  Oildata Energy Group, said the crude oil reserves might not enable the country realise its long-term economic objectives if urgent measures were not taken to boost exploration and increase oil reserves, which were being depleted.

    He noted that robust oil and gas reserves form the basis for increased production, adding that exploration and drilling is best done during periods of low oil prices, which is now.

    He urged the government to follow the steps of other oil producers in the Middle East and North Africa (MENA), where he said that drilling rig counts have sharply risen since the fall in oil prices began resulting also in reduced cost of services.

    Ene, the immediate past Chairman of the Nigerian Council of Society of Petroleum Engineers (SPE), said Nigeria’s long-term economic aspirations were at stake because investments in exploration had fallen resulting in drastic reduction in fields, which gave rise to redundancy and massive staff lay-offs across the industry’s value chain.

    He said PETAN can provide leadership in the service sector by providing a model for value-added local content, which guarantees significant cost reduction, and a stimulus for increased drilling and production activities.

    He urged the government to provide stable medium to long-term economic aspirations by diligently working to actualise the planned oil reserves of 40 billion barrels, daily production of four million barrels per day, monetisation of gas resources, and increase in local content activities for the advancement of indigenous capacity and job creation.

    Managing Director Seplat Petroleum Development Company Plc and former President of Nigerian Association of Petroleum Explorationists (NAPE), Mr. Austin Avuru, said low oil reserves is not good for Nigeria considering the contribution of the oil and gas sector to the economy.

    He said Nigeria is seriously feeling the impact of oil price crash because it failed to build a robust sovereign wealth fund that would have cushioned price fall shock.

    He said the Organisation of Petroleum Exporting Countries (OPEC) countries were driving exploration and production with sovereign wealth funds despite the low oil prices, while Nigeria is cash constrained to carry out such activities.

    Avuru corroborated Ene’s position on the need for medium to long-term economic plans, adding that little or no exploration in the industry means the nation’s lean oil and gas reserves can no longer provide support for economic projections.

    Avuru said oil production from onshore and shallow water environments has fallen from 2.4 million barrels per day to 1.2 million barrels per day (mbpd), adding that production from the deepwater which should have increased the  production has merely ended up only stabilising output at 2.4 mbpd.

    Domestic gas demand, according to him, has jumped from the previous 300 million standard cubic feet per day (mscf/d) to 1.0 billion scf/d. He projected that demand will jump to 3.0 billion scf/d by 2017. “The projected domestic gas demand is about four times more than what the country’s estimated gas reserves can support,” he added.

    Outstanding industry players conferred with awards include the  late Dr Rilwanu Lukman, Dr Emmanuel Egbogah, Gaius Obaseki, Sanni Bello, and Mutiu Sunmonu, Mrs. Callista Azogu, Charles Ngoka and Ugo Ralph Ekezie.

    Others include Shawley Coker, Pedro Egbe, Steven Aribeana, Sam Adegboyega, Dr Diran Fawibe and Emeka Okwuosa.

    Corporate award winners include Shell Petroleum Development Company (SPDC), Neconde Limited and First bank Plc. They recognised for their contributions to the development of the oil industry in 2015.

    The event ended with meetings, conferences and other industry forums with members of PETAN, Nigerian Association of Indigenous Petroleum Companies (NAIPEC), Nigerian Association of Petroleum Explorationists (NAPE) and the Society of Petroleum Engineers (SPE), among others in attendance.

  • Policies to cushion oil price fall under way, says Kentebe

    Bracing for the challenges of falling oil prices, the Nigerian Content Development and Monitoring Board (NCDMB) has initiated steps to fashion out strategies to protect local capacities developed by oil and gas service companies in the past five years of implementing the Nigerian Content Act, its Executive Secretary, Mr. Denzil Kentebe, has said.

    He stated this at an event to mark the load out and sail away (taking the platform to the point of operations) of the Sonam non-associated gas wellhead platform (NWP) topside at the Nigerdock Yard on Snake Island, Lagos. The topside is for the Chevron/Nigerian National Petroleum Corporation’s Domestic Supply Obligation (DSO) gas project.

    Celebrating the feat by Nigerdock in fabricating the topside, which is the largest in Nigeria, weighing about 2,700 tons, Kentebe harped on the need to ensure that such achievements are sustained and the gains recorded not eroded as a result of the crash in oil prices and cutbacks on capital expenditures and projects.

    “While we celebrate the feats, we are mindful of the current economic environment, lull in business and threat to these capacities,” he said.

    Kentebe said the new strategies would require stakeholders to work together to see that new projects come on stream to sustain jobs and capacity in fabrication yards and other facilities. He added that the Federal Government was taking steps to bring stakeholders to the table to work out solutions to the challenge.

    Kentebe hailed the commitment of Nigerdock to the development of Nigerian Content, recalling that the company had recorded many firsts on several projects, including modules fabricated on USAN and Ofon for Total, Abang and Itut topsides for ExxonMobil and Meren and Sonam topsides for Chevron.

    He said: “The capacity has not only been sustained but increased over time. Thousands of Nigerians have continued to be employed and trained. Nigerian suppliers have also been built up on the back of these projects and activities.”

    An example is Wellmann Nigeria Limited, which has developed the capacity to load out heavy fabricated modules by investing in the acquisition and operation of Self Propelled Modular Trailers (SPMTs), he said.

    The Executive Secretary challenged other service providers to take a cue from Nigerdock and deliver quality and efficient service when given the opportunity, noting that every stakeholder has a part to play in making Nigerian Content work.

    Nigerdock Chairman, Mr. Anwar Jamarkani said there had been a dramatic increase in the capability of indigenous companies since the signing of the Nigerian Content Act in 2010.

    He said: “Many companies in Nigeria were inspired by the bold steps taken by Nigerdock and the Jagal Group.”

    Jamarkani said the company was ready to take on more ambitious projects, stressing that Nigeria must domesticate its work in-country to be able to develop, build its future and train its youths. He lamented that the lull in industry activities had taken a toll on the company, noting that it does not have job orders ahead of six months, a situation that is threatening the job security of the company’s 1000 employees.

    He charged regulators and operators to come up with initiatives to ensure that the enormous infrastructural and human capacity built up in the company and other service companies are not lost.

    “We are national assets and we are committed to the success of this government; we want more from Nigerian Content and we have to keep the engines of our companies running,” he added.

  • Benin DisCo votes N2.7b for meter acquisition

    The Benin Electricity Distribution Company (BEDC) has set aside N2.7 billion to acquire smart meters for the over 741,000 customers in its network, The Nation has learnt.

    The Chief Executive Officer, (BEDC), Mrs. Funke Osibodu, stated this during an interaction session with reporters in Lagos. She said the company will start with installation of over 100,000 customers in the first instance.

    She  said the firm is aggressively addressing the operations, maintenance, and human resources challenges it inherited from the defunct Power Holding Company of Nigeria (PHCN). She listed some of the operations and maintenance issues BEDC inherited to include, aged and poorly maintained system, unreliable and overloaded system, low demand side management (DSM) initiative, corporate governance challenges, lack of technology intervention to curb revenue leakage and lack of skilled manpower.

    She noted that since takeover of the utility in November 2013, several upgrades have been carried out, and still ongoing, while reliable energy audit figures are unknown. Revenue Assurance Unit commenced with 250 feeder check meters in place for energy accounting, while enumeration and customer regular energy audit have commenced, she added.

    Osibodu stated that major improvement in safety practice has also begun to address the poor safety practices and unsafe network for the public, caused by non-abidance to standard safety procedures and regulations before undertaking network maintenance work, adding that improvement in safety standards and equipment are impressively in progress.

    On manpower challenges the company inherited, according to Osibodu, include untrained manpower to handle preventive and breakdown network maintenance, indulgence in unethical activities by the field force leading to customer mistrust in the DisCo, de-motivation amongst employees leading to lack of will to perform, lack of performance oriented culture, and large workforce with inadequate skill set, among others. The BEDC chief, however, said large scale training has commenced at all levels, and commercial disciplinary process put in place while performance-oriented culture has been entrenched with recruitment of over 500 skilled workforce.

    Osibodu said the BEDC has 741,376 customers and to give top service to them, the firm has recruited 250 young graduates, adding that the recruitment was carried out in two batches. The first batch consisted of 100 young graduates who have since completed their training, while the second batch of 150 young graduates are currently undergoing training.

    She expressed confidence that the N2.7 billion investment in metering project will adequately address customers meter challenges. She lamented that the BEDC took the blame for every problem in the power sector because it directly interfaces with the power consumers, adding that the customers don’t know that the distribution company doesn’t have control over the generation and transmission companies.

    “We don’t have control over generation and transmission. We are like collection agents for the entire power industry. Across the power supply value chain in the Nigeria Electricity Supply Industry (NESI), we collect the entire money but just get 25 per cent of the total collections.

    “Once we collect the billing from the customers, the generation companies (GenCos) get 60 per cent and pays the gas suppliers, Transmission Company of Nigeria (TCN) gets 11 per cent, while the regulator, bulk trader and market operator get the remaining four per cent.

    “We are directed to meter all our customers within one year, but we are constrained by the limit of capital expenditure (capex) that we can invest. We at BEDC cannot spend above N4 billion per year as capital expenditure and if we invest above that, we won’t be able to recover our investment due to the present tariff structure,” she added.

  • ‘Solar can provide electricity to 90m Nigerians’

    ‘Solar can provide electricity to 90m Nigerians’

    The Council for Renewable Energy of Nigeria (CREN) has said solar energy can provide electricity for about 90 million Nigerians. This will speed up business investments in the country and create opportunities for employment, it added.

    The President of the council, Anita Okuribido, said ‘’when people are sure that they could get 24 hours of electricity supply from off-grid sources such as solar, they would buy into it.Therefore, we need to be producing solar panels in quantum in-country.

    “It goes beyond looking for power production from solar, we should really take it seriously and invite solar panel manufacturers and experts from Germany, China, and other countries of the world to come and establish their companies here in Nigeria,” she said.

    The United Nations had warned that by the end of the millennium there would be no fossil fuel, therefore, this is the time to actually prepare for that period when all of us would certainly go into renewable energy to produce electricity, she said.

    Speaking on the theme: Renewable energy development – Option for sustainable investment, Okuribido stressed the commitment of the council to ensure appropriate implementation of renewable energy technologies in the country, adding the council would address the challenges of awareness, availability and cost.

    She also said the council would create public awareness and foster the emerging availability of reliable, economically viable renewable energy systems by supporting policy information and implementation, research, development and use of such systems.

    According to her, the council would facilitate the planning and partnerships necessary to achieve large-scale, renewable energy implementation in the country, adding it would enhance government and public awareness of renewable energy technologies.

    She said efforts are ongoing to advance renewable energy curriculum development in primary, secondary and tertiary educational institutions, enhance renewable energy initiatives of its members as well as establish a strong member base representative of all renewable energy stakeholders.

    The former Director-General, Energy Commission and former Vice Chairman, World Energy Council, Abubakar Sambo said with the implementation of renewable energy policy, the country would be more secured for sustainable growth and development. He said renewable energy is a subject that has to be deployed in all countries of the world including Nigeria.

    He said: “If you go to other countries of the world, you will lament over Nigeria, the giant of Africa, because it is really weighed down by the scale of globalisation.” He said other African countries are far ahead of us in terms of renewable energy policy implementation including Ghana, Egypt, Morocco, Tunisia, Algeria, Liberia, Kenya and South Africa.

  • Tackling plunging oil price dominates OWA confab

    Discussions on mitigating the impact of the plummeting global oil price dominated presentations and panel sessions at the ongoing 20th Offshore West African Conference and Exhibition (OWA) in Lagos.

    The three-day conference started yesterday and the concerns on the prevailing reality in the oil and gas industry were expressed by big and small players. The industry operators were sharing ideas on how tackle the plunged oil price that has refused to rally. They discussed various cos- efficient measures, and encouraging government policies that would keep them in business and sustain investments.

    The speakers were not optimistic that oil prices will rise, and said there is need for the West African sub-region to take urgent action that will address the problem in the short term while plan and strategise for the long term and the future.

    The Managing Director and Chief Executive, Total Exploration and Production (E&P) Nigeria, Nicolas Terraz; Chief Executive Officer, Ghana National Petroleum Corporation, Alexander K. M. Mould; General Manager, Deep Water Operations & Joint Interest Assets, Esso Exploration & Production, Nigeria, Oladotun Isiaka; Director-General, Federal Institute of Food and Industrial Research Oshodi, Gloria Elemo; and the Managing Director PennWell International, Glenus Ensar, among others were speakers at the event yesterday.

    Ensar said: “Guessing the oil price rebounding soon is a max game, with Iran coming online in the market and lack of demand from China, we assume that these relatively low oil price is going to stay for a while, therefore the participants at the OWA conference this year are intellectually looking at the best way forward to survive in the really tough moment.

    “Nigeria as an oil producer needs to continue to increase in transparency and make the act of doing business within its territory easy and sustain that process. The big word here is cost control; you need to bring down the price at which you continue to produce to maximize profit.”

    The Chief Executive Officer, Ghana National Petroleum Corporation, Alexander K. M. Mould, said the oil-producing firms should plan for longer period of low oil prices. He urged African governments on policy stability and consistency, noting that the long term of political risk in the continent has largely impacted negatively on businesses.

    He said countries such as Nigeria, Ghana and Libya are having relative high cost of production especially in the offshore and may have to shut down some wells and reduce production at a particular point. He said the United States would not relent in the shale oil production because it is a private sector. Private sector will only relent if they cannot meet the cost of production but they have presently reduced their cost to around $20 per barrel.

    It’s not a government policy, but in Nigeria, it’s a government policy, OPEC can make a policy and reduce the production but countries like Ghana will be based on economics, if our cost of production is high, we will have to shut down some wells. He said the cost of producing from Jubilee oil field is less that $10 per barrel.

    The 20th Offshore West Africa Conference and Exhibition, according to the organizers, PennWell International, began with over 2,400 attendees from more than 35 countries.

  • Group explores LPG impact on economy, environment

    The vital role liquefied petroleum gas (LPG) could play in helping Nigeria to reduce fossil fuel emissions, and develop its economy is one of many issues explored by the Oxford Business Group (OBG) in its latest economic report on the country.

    Speaking to OBG’s research team in the report titled ‘Nigeria 2016,’ the President of the Nigeria Liquefied Petroleum Gas Association (NLPGA), Mr. Dayo Adeshina, said much more could be done to “actively promote cleaner, safer LPG” at a time when combating climate change was high on the global agenda.

    “Nigeria is one of the largest producers of LPG in Africa, yet its per-capita consumption is one of the lowest on the continent,” he said. “While annual production stands at four million tonnes, Nigeria’s total yearly consumption is just 350,000 tonnes.”

    The NLPGA’s Deputy President, Mr. Nuhu Yakubu, who spoke in the report, also noted that aside from having the potential to assist the government as it targets bringing down fossil fuel emissions by 20 per cent within five years, LPG was also “tremendously versatile. LPG can be used for cooking, auto gas, heating, cooling and power generation,” he said, adding that with the right policies in place, the domestic LPG industry could really take off.

    With speculation mounting that President Muhammadu Buhari’s government plans to overhaul Nigeria’s subsidy system this year against a backdrop of lower global oil prices, OBG’s report will consider whether subsidies for kerosene, which cost the government an estimated N1.7trillion, could be among those removed. Oil is by far is the biggest contributor to Nigeria’s economy, accounting for two thirds of the country’s revenue and 90 per cent of foreign exchange earnings. However, plummeting prices have taken their toll on government income, giving weight to the government’s drive to diversify the economy.

    These and many other topical issues will be analysed in detail in the report: Nigeria 2016, which is due to be published in the coming months. The publication will contain a detailed, sector-by-sector guide for investors, alongside contributions from leading personalities.

    “We believe LPG has significant potential in Nigeria and that with the right enabling environment it can make a strong contribution to the national effort to reduce carbon emissions,” said Izabela Kruk, Country Director for OBG in Nigeria.

    The report, Nigeria 2016, will be a vital guide to the many facets of the country, including its macroeconomics, infrastructure, banking and other sectoral developments. Oxford Business Group’s publication will be produced in partnership with the Nigerian Economic Summit Group and the law firm Ajumogobia and Okeke and will be available in print or online, he added

    The Federal Government has just stopped kerosene subsidy, and the price has gone up from N50 per litre to N83.