The Nation Newspaper

Category: Energy

  • Lagos restates commitment to mining standards

    •Warns illegal sand miners

    The Lagos State Government has restated commitment to ensuring that miners comply with internationally acceptable standards in the sand mining industry in the state.

    The Director, Human Resources and Administration, Mr. Fashola Adeyemi Taofik, said this during an on-the-spot- assessment of some sand mining sites in the Ajah/Lekki axis of the state.

    He said the Ministry is poised to ensure that miners operate according to  regulations to ensure sustainable development in the state.

    In a statement, the Public Relations Officer of the Ministry, Olaoye Olusegun, Taofik noted that to obtain the mining standard, the Ministry has to continually monitor the activities of sand miners and ensure that rules are followed strictly.

    He said: “In furtherance of the Ministry’s mandate to ensuring a sustainable mining operation, constant monitoring and  clinical review of mining methods and its impacts, taking stock of degraded area as well as putting in place a restoration plan is being done by the Ministry.

    “The objectives of the mining site monitoring and evaluation was also to locate and delineate the extent of land degradation at mining sites, initiate and develop land use programme for the identified area, for example, fish farming, agricultural cultivation, coconut plantation, and landscaping. It is also meant to identify the derivable impact of the exercise on affected communities as well as develop mining methods and proper documentation that will ensure sustainable development.”

  • NNPC embarks on recovery measures

    NNPC embarks on recovery measures

    For several years, the Nigerian National Petroleum Corporation (NNPC) was an epitome of corruption as it was hardly accountable and transparent to tax payers. The new management is battling to address these issues, writes JOHN OFIKHENUA.

    The Nigerian National Petroleum Corporation (NNPC) now churns out press releases almost every day on its activities; a departure from the past when the corporation’s operation was shrouded in secrecy. Previously, little or no news emanated from the information unit of the corporation, but now the unit is super-active.

    The NNPC made the security of pipeline the responsibility of private individuals for no justifiable reason other than outright shirking of the duty of the police and navy, but according to an analyst, the step was a measure to placate kinsmen and political allies. Now it is no more business as usual.

    Several years of alibi for why the country could not refine crude in its refineries, and undue dependence on imported fuel suddenly seems to be coming to an end as the refineries have become functional.

    The body language of the Presidency and the changes already made, point to how the corporation can flourish in the next four years. President Muhammadu Buhari’s first action to transforming the NNPC, was the removal of a near dormant Group Managing Director (GMD), Dr. Joseph Dawha. It was either the former NNPC boss was bereft of ideas about how to run the corporation or someone weighed him down, and made the office suffer neglect.

    But on August 3, Buhari  returned the corporation to the path of revival , competitiveness and profitability with the appointment of Dr, Emmanuel Ibe Kachikwu as the new NNPC and the retirement of eight Group Executive Directors ( GEDs) namely:  Mr. Bernard Otti, GED Finance and Accounts; Dr. Timothy Okon, Acting GED Exploration and Production, who also doubles as Coordinator, Corporate Planning & Strategy; Engr. Adebayo Ibirogba, Engineering and Technology; Dr. David Ige, Gas and Power; Ms. Aisha Abdurrahman, Commercial and Investment; Dr. Dan Efebo, Corporate Services; Engr. Ian Udoh, Refining & Petrochemicals; and Dr. Attahiru Yusuf, Business Development.

    Prior to their retirement, analysts were already clamouring that the Presidency should purge NNPC of all the players that have run it like a personal business. The populace was tired of the mystery that surrounded the operation of the corporation and the deluge of fraudulent allegations.

    The media were awash with various stories of mismanagement and corruption in the Corporation, which made the cleansing of the top echelon necessary.

    The Presidency in a one fell swoop pruned the directorates from eight to four. With the approval of the presidency four new GEDs and Chief Executive Officers were appointed for some of the NNPC subsidiaries. Those appointed were Dr. Maikanti Baru, Group Executive Director, Exploration & Production; Mr. Isiaka Abdulrazaq, Group Executive Director, Finance & Services; Engr. Dennis Nnamdi Ajulu, Group Executive Director, Refining & Technology; and Dr. Babatunde Victor Adeniran, Group Executive Director, Commercial & Investment.

    New Company Secretary/Legal Adviser and Managing Directors were also appointed for the Strategic Business Units (SBUs). They are Chidi Momah, Group General Manager, Company Secratarty & Legal Adviser; Mrs. Esther Nnamdi Ogbue, Managing Director, Pipelines and Products Marketing Company (PPMC); Engr. Chinedu Ezeribe, Managing Director, Warri Refinning & Petrochemicals Company (WRPC); Mr. Babatunde Bakare, Managing Director, Nigerian Gas Company (NGC); Mr. Inuwa Ibrahim Waya, Managing Director, Hyson; Mr. Abubakar Mai-Bornu, Managing Director, Nigerian Petroleum Development Company (NPDC); and Mr. Ladipo Fagbola, Managing Director, NNPC Retail.

    Others are: Mr. Rowland Ewubare, Managing Director, Integrated Data Services Ltd (IDSL); Mr. Modupe Bammeke, Managing Director, NNPC Prpoerties; Mr. Abdulkadir Saidu, Managing Director, Duke Oil; and Mr. Dafe Sejebor, Group General Manager, Nigerian Petroleum Investment Management Services (NAPIMS).

    Besides his intimidating curriculum vitae, it was evident that Kachikwu’s job was already cut out for him with strident terms of reference. With his private sector background, he has started running the corporation with his eyes on profit for the benefit of the citizenry. His actions since assumption of office on August 4 have shown that he is ready to live long in the hearts of Nigerians. Critics, especially labour economists, may view the reduction of the Directorates from eight to four and the retirement of 38 top management staff as inimical to the economy, especially now that there is global economic downturn. But the GMD’s explanation is that he wants to reposition the NNPC. The new NNPC, according to him, should take a leap from its civil servant orientation to a business-driven entity. With this conception, he has employed 12 personnel from the private sector to jump-start a new business outlook to intensify operational space as a profit-driven business.

    The Group General Manager, Group Public Affairs Division, Mr. Ohi Alegbe clearly explained this in a statement saying: “the new appointments are in line with the Federal Government’s aspiration to transform the Corporation into a lean, efficient, business-focused, transparent and accountable national oil company in keeping with international best practices.”

    Besides, one thing, however, goes for him, his principal, President Buhari, is also bent on leaving indelible legacies in the country’s oil and gas sector. He has demystified the longstanding politics of turnaround maintenance without results without results. Surprisingly, NNPC on July 29 announced that the Port Harcourt and Warri refineries have been successfully re-streamed after a nine-month phased rehabilitation exercise conducted by its in-house engineers and technicians.

    The Corporation said with the successful re-streaming of the PHRC and WRPC attention has now moved to the 110, 000 barrels per day Kaduna Refining and Petrochemicals Company, which is billed to come on stream soon.”

    Kachikwu has also vowed that all Production Sharing Contracts (PSCs) and Joint Venture Agreements and all other contracts between the NNPC and its various partners would be reviewed to reflect current day realities in the global oil and gas industry. The decision, according to him, is to put in place efficient, transparent and profit-oriented processes and not to embark on a mass retrenchment of the workforce.

    The Corporation has cancelled the current contract for supply of crude to Nigerian refineries due to exorbitant cost and inappropriate process of engagement and appointed NIDAS Marine Limited to handle the job in the interim. It also terminated the Offshore Processing Agreement (OPA), entered into with Duke Oil Company Inc., Aiteo Energy Resources Limited and Sahara Energy Resources Nigeria Limited and the process of engaging new contractors is ongoing.

  • ‘Why Nigeria cannot use renewable energy’

    The Director-General, National Power Training  Institute of Nigeria(NAPTIN), Engineer Rueben Okeke and the Managing Director, Ikeja Electric, Mr. Abiodun Ajifowobaje, have said Nigeria cannot get the required volume of  electricity from renewable energy sources such as solar, coal, biomass and wind.

    They said solar, coal, and biomass cannot generate megawatts of electricity that can meet the power demands of the 170 million Nigerians. They spoke to The Nation at different fora. Okeke said the three renewable energy sources put together cannot generate one third of electricity that either hydro or thermal would provide.

    He said the money, which the government would spend in providing 10 or 20 megawatts (Mw) of electricity from solar, biomass, wind or coal can generate an appreciable number of megawatts when hydro or thermal form of generation is used.

    He said the country is not ripe for renewable energy, urging the government and other investors to concentrate on hydro and gas powered plants for growth. He said it is impossible to grow the economy with  renewable energy, arguing that conventional sources of energy is the best and widely acceptable means of generating electricity globally.

    Okeke said the country boasts of 70 per cent gas power, and 30 per cent hydro electricity, advising that the two should be developed to meet the growing energy needs of the populace.

    Ajifowobaje also said solar, biomass and coal provide insignificant quantum of electricity megawatts, and as such, cannot meet the needs of the masses.

  • ‘Power will stabilise by 2018’

    Power supply will stabilise by the end 2018 when the electricity firms must have fully implemented their five- year turnaround business plan, the Group Managing Director, Aiteo Power, Dr Ransome Owan has said.

    He said power firms took over the unbundled assets from the Power Holding Company of Nigeria (PHCN) on November 1, 2013, and as a result of this, have not spent two years generating and distributing  electricity in. Nigeria.

    Owan said: “Let us give power companies 60 months from today to execute their business turnaround programmes, and I believe that power would stabilise before the expiration of that 60 months, which by implication marks the end of their five- year turnaround plan.”

    He was optimistic that the power situation would normalise by the end 2018 in view of the efforts being made by the Federal Government to remove the problems hindering generation, transmission and distribution of electricity in the country.

    He said electricity consumers in the country would enjoy soon, noting that they have been in darkness for sometime due to power outage. “I’ m optimistic that power would improve in the next three to five years. The government and the private sector operators have come to realise that power is key to economic development, and are working towards achieving stable power supply.

    Owan said when power normalises, the economy would improve and by extension the Gross Domestic Product (GDP) would improve. This according him, would bring growth to operators at both the formal and informal sectors of the economy.

    He stated that people should try and pay for the electricity they consume because it costs a lot of money to provide power, adding that electricity costs money to produce

    He stressed the need to match resources with long-term plans because it is imperative for the growth of the sector, and noted there is a disconnect between what was expected in terms of gas supply and power generation and distribution.

  • Operators decry losses from non-passage of PIB

    Operators decry losses from non-passage of PIB

    Operators of the Nigerian oil and gas industry are counting their losses arising from the non-passage of the Petroleum Industry Bill (PIB), which has been before the National Assembly for over a decade.

    The non-passage and its consequences, according to them, include uncertainties over investment in exploration and production, which boosts oil output and reserves as well as funding of operations.

    The bill has been undergoing changes from one legislative assembly to another as a result of disagreements between stakeholders over fiscal and structural provisions in the bill. The development led to abandonment of decisions in taking risks to make new discoveries, developing existing acreages and injecting new technologies, therefore, activities have been very low in the industry over the years.

    The lingering bill has created uncertainty that has continued to hang on the business environment, compelling foreign and local investors to cancel or delay business decisions that would have kept activities in the industry alive and growing.

    The Managing Director of Seplat Petroleum Development Company, Mr. Austin Avuru said: “There are too many contending issues that are lumped into one piece of legislation including issues that were never in dispute; including issues that we didn’t need to revisit. And in the process they have thrown the industry into an impasse; you can’t move forward because everybody, especially the multinationals operating in the deep offshore and who have to make multibillion dollar investments, are in an uncertain business climate. Clearly they have pulled back their pen and they are not taking final investment decision (FID).

    “What is stopping the industry from moving forward is the uncertainty created by the possibility of a new legislation that is not clearly understood. And, therefore, you can’t take the risk of making heavy investments because you can’t be certain until that piece of legislation becomes law. And so, as long as there is suspense, there will be a lull. The entire industry is in suspense. Every month, you hear about dwindling revenues in the federation account. Yes, it will continue,” he pointed out.

    On the whole, he said: “our survey of oil industry challenges in the wake of the oil price fall exposed crippling challenges that are eroding profitability.”

    Avuru also said: “Across the industry, cost has gone up 10 fold from where we were 25 years ago. As a young well-site geologist in the 1980s, and if you recall those terms of the 1985 and 1987 memoranda of understanding (MoUs) nominal technical cost was pegged at $3.50 per barrel. It was expected that average technical cost (operating expenditure and capital expenditure) was $3.50 per barrel. That means you have to be operating below $3.50 to be efficient. If you are doing above $3.50 you are considered expensive.

    “Today, that cost has gone up to $30.50 per barrel. So, in the past 30 years, we have allowed a lot of things to creep in. There is the crisis in the Niger Delta; increase in the security apparatus to do the business, there is an increase in everything. All the costs have piled up onto the cost of production.

    “And one of the biggest issues, why there appears to be a disagreement between government and operators over the PIB is because government believes that the fiscal regime cannot be predicated on $35 per barrel. And you can understand their frustration. They were there when the cost was $3.50 per barrel.

    “But the industry is saying the cost is the cost. If it is $35 per barrel then it is $35 per barrel.  People don’t realise that this is where the disagreement resides. The debate is on the cost parameters used to model the fiscal regime.  So, the industry has undergone a huge escalation in cost. Unfortunately, nobody has tried to stem that tide because it has escalated beyond control.”

    However, beyond the arguments is the fact that the domestic operating environment appears to be losing the necessary conditions required for commercial investments to make appreciable returns and deliver profits to shareholders.

  • Shell to train 150 Niger Delta youths

    Shell Petroleum Development Company of Nigeria Limited (SPDC) operated Joint Venture, said 150 youths from the Niger Delta are to benefit from its 2015 LiveWIRE programme, bringing the total number of beneficiaries to over 6,000 since the launch of the programme in 2003.

    LiveWIRE is a flagship youth enterprise development programme which provides access to training, business development services and start-up capital.

    “LiveWIRE presents a good opportunity for bright young people to bring their ideas to fruition,” said SPDC’s General Manager External Relations, Igo Weli. “We are pleased to see the youths transform to employers of labour after going through intensive business training that is reinforced with theoretical and practical sessions.”

    The two-week training slated for September will be held for the selected youths in Rivers, Delta and Bayelsa states. Media Relations Manager of Shell, Mr. Precious Okolobo, said in a statement that the programme is open to university and polytechnic graduates with innovative business ideas from the three states.

    The curriculum includes business planning and management and post start-up mentoring, incubation and market linkages. Successful candidates will be linked to third parties such as Non Governmental Organisations (NGOs), banks, and allied financial institutions and provided a volunteer mentoring programme.

    Okolobo said in 2014, the Livewire scheme was broadened to include a specific focus on people with physical impairments. Some 180 physically challenged people had already benefited from training and grants.  Shell Companies in Nigeria work with government, communities and civil society to implement programmes that have a lasting impact on lives in the Niger Delta and beyond. “Social investment activities are focused in particular on community and enterprise development, education and health,” he added.

  • Fed Govt urged to key into process technology

    The Federal Government’s efforts to overhaul the petroleum industry has been commended. Giving the commendation was the Principal Consultant, Lonadek Oil and Gas, Dr Ibilola Amao, who said process technology must be given  given urgent  attention to exploit the abundant natural resources including oil and gas, which the country is endowed with.

    Process technology is basically taking crude and putting it into a process whereby it is translated from its natural state to finished products. Amao said lack of process technology strategy was the end result of poverty, unemployment and lack of value creation ravaging the nation’s economy.

    She stated that the energy and power equation would be solved when gas is utilised appropriately to drive the Independent Power Projects (IPPs), adding this would ensure uninterrupted power supply in the country. According to her, with process technology in place, crude and other mineral resources would rather be refined in-country and be exported as finished products

    The oil and gas sector accounts for about 35 per cent of gross domestic product while petroleum export revenue represents over 90 per cent of total exports revenue. Economic analysts say Nigeria is losing so much money by exporting the crude to other countries and importing them as finished products. “According to them, when you export crude you are at the same time exporting other by-products” she said.

    Amao, who spoke with The Nation on telephone, said Nigeria is wasting money exporting crude oil blaming the development on lack of process technology strategy. “With process technology strategy in place, our refineries and the petrochemical plants would be working. We will be optimising our natural resources, and with this, the country would become an industrial and agro-based economy,” she said.

    She said the country does not have enough qualified personnel to understudy the experts and also lack  the zeal and passion to acquire knowledge. If this development is not checked, she noted, technology transfer would only be  a mirage, documented on paper with little or no result.

    “We really need to get carrier counseling in place, people with the right passion to acquire technology and deploy them with a strategic roadmap that will give the succession plan a minimum number of years,” she said.

    She also said there was the need to address the calibre and number of human resources in the regulatory arm of the hydrocarbon industry in the country. This, she said, would help to address some of the anomalies that currently plague the industry. She said some of the regulatory bodies such as the Department of Petroleum Resources (DPR); Nigerian Content Development and Monitoring Board (NCDMB); Nigerian Maritime Administration and Safety Agency (NIMASA) and National Oil Spill Detection and Response Agency (NOSDRA) charged with the responsibility of developing, communicating and enforcing regulation as well as supervising compliance through monitoring and evaluation, are, however, do not focus on certification, competency and field development.

    According to her, some of the regulatory bodies do not have the right manpower to do their jobs effectively, which she said makes it possible for people to practise what they like and get away with it.

    “We really need to be focused on the development and socio-economic transformation of the nation, but if you and I go about soliciting for our own comfort and our private well-being, we will continue to be in economic decay in this country,” she said.

  • Oil glut: GE, others explore non-oil sectors

    Oil glut: GE, others explore non-oil sectors

    Multinational oil service firms, inc luding General Electric and Schlumberger are investing and consolidating their non-oil investments in order to lessen the impact of the fall in price of crude oil.

    The glut in the global oil market has exceeded a year, a development which made the companies to review their portfolios by way of increasing investment in non- oil sectors. The new-found sectors by oil firms include transportation, construction, aviation and healthcare, among others.

    The Chief Operating Officer, General Electric, West Africa, Uzochi Nwagwu, said the firm will not scale down its operation in response to the slump in the oil price, because it has invested considerably in many areas outside oil. He listed the areas to include aviation, health, power and water resources.

    He said the organisation is supplying and servicing equipment used in hospitals, servicing aviation operators such as Arik, Kenyan and Ethiopian Airways, among other airlines. He said the firm is equally providing equipment and services to power generation companies (GenCos); and exploring opportunities in rail transportation by moving heavy goods across the country in order to help reduce hazards, occasioned by road and water transportation.

    Nwagwu, while speaking during a tour of GE facility in Onne, Rivers State, said the firm has diversified its operation, so as to have a balanced portfolio and further reduce whatever shocks that are coming from the tumble in the oil market.

    “We at GE have created a balanced portfolio as part of efforts to guide against turbulence in the oil and gas sector. A downturn period is a period that is actually meant for investment. During turbulent times, we invest more because we are looking for more friends or customers. It is during such period that an organisation knows its true friends,” he said.

    He explained that the fall in global oil crisis has resulted in lack of new investment and reduction in number of activities carried out by operators, noting that GE has positioned itself in such a way that it can actually prevent a spillover effect of the fall in oil prices on its operation.

    “In terms of value proposition, GE is there. The firm is providing services to multiple companies or institutions. Apart from rendering services to oil majors such as Shell, ExxonMobil, Agip, Seplat, and others, GE provides services for the Niger Delta Development Company (NDDC) and other local operators in the oil and gas industry. That is why the company is not bothered as such,” he said.

    Also, Schlumberger is said to be considering investment in rail construction as part of its divestment programmes. The company, which has a long record of service in the nation’s oil and gas has intimated Nigerians of its plan to diversify its operations, with a view to expand its growth.

    Efforts made to speak to Mr. Tonye Briggs, Vice President, Africa, Schneider Electric on measures his organisation is putting in place to reduce the shocks created by the slump in oil price proved abortive as he neither picked his calls, nor replied to the short messages (sms) sent to him on the issue.

    The President, Petroleum and Technology Association of Nigeria (PETAN), Emeka Ene, said it is normal for companies to strategise during a turbulent period by looking for areas where they can maximise their potentials in order to improve their earnings.

    He said the decline in the prices of oil is impacting negatively on operation of both local and foreign owned oil service  companies operating in Nigeria, adding that firms rejig their portfolios to enable them turn their  weaknesses into strengths.

    He said a well diversified portfolio is a good option to foreign conglomerates operating in Nigeria because they want to continue in business. He noted that indigenous oil servicing firms are witnessing what he described as a period of realignment of ideas, as a result of challenges facing the sector.

    Ene listed the problems to include the divestment of shares in the industry by the International Oil Companies (IOCs), absence of new business, reviewing of the old contracts by operators, fall in the global oil price, and many others.

     

  • Total E&P to fix vandalised oil export pipeline

    Total Exploration and Production Nigeria Limited (TEPNL) has begun repairing its vandalised export pipeline in Rivers State.

    The company in a statement signed by its Deputy General Manager, Media & Public Affairs, Charles Ogan, said: “Following the oil spill reported at Kilometre 25 and 27 locations on our Obagi – Rumuekpe oil export pipeline, on August 16, 2015, a Joint Investigation Visit (JIV), in accordance with the extant regulations, was carried out on the oil spill locations, with relevant regulatory agencies including the Department of Petroleum Resources (DPR), NOSDRA, and Rivers State Ministry of Environment). The JIV team recorded that the oil spill incident was due to third-party interference (sabotage).

    “Total mobilised intervention teams to clamp the leaks on the pipeline. Relevant agencies and service providers were also mobilised and have deployed containment booms to contain the spill and prevent further spread.

    “TEPNG is committed to preventing further spread of the spill and to restore the environment. Total will continue to work with the relevant government authorities and communities, to ensure that this is achieved.

    “Further updates shall be provided in due course. Total E&P Nigeria operates oil mining lease (OML) 58 with a 40 per cent interest, alongside the Nigerian National Petroleum Corporation with 60 per cent.”

    On August 17, this year, the company reported it had stopped the expedition of crude on its Obagi-Rumuekpe oil export pipeline, after observing an oil spill at Kilometre 25 and 27 locations and said relevant authorities were informed immediately.