The Nation Newspaper

Category: Energy

  • GE’s Angbazo is American Business Council president

    The President and Chief Executive Officer,  GE Nigeria, Lazarus Angbazo has been elected president of the American Business Council (ABC) in Nigeria.

    The American    Business   Council was set up with the core objective of promoting the development of commerce and investments between the United States of America and the Federal Republic of Nigeria while also providing a forum in which American business executives in Nigeria and other business executives with American interests may identify, discuss, and pursue common interests affecting their activities.

    The ABC was conceived as more of a “think tank” rather than the duplication of the Nigerian-American Chamber of Commerce (NACC) with which it has a synergistic relationship with the President of NACC invited to all ABC functions and activities, including Board meetings.

    Membership of the ABC includes but is not limited to Coca Cola, IBM, Schlumbeger, NCR, Pepsi, KPMG, Capital Alliance, Dubri Oil, Mobil, Procter and Gamble, Intel, Motorola and many others.

    The ABC has since its inception in February, 2007, focused on three broad areas where it hopes its impact would be felt in the medium and long term development of Nigeria and they include Education, Infrastructure and Institution Building.  Angbazo’s election thus fits perfectly into the over-all aim of the council since GE is in the forefront of helping to rehabilitate Nigeria’s infrastructure from oil and gas to health and power amongst others.

    Angbazo said: “It is an honour to have been elected by my peers to serve. The focus of the ABC, aside from promoting business between the US and Nigeria, remains to aid Nigeria’s development in Education, Infrastructure and Institution Building. These are areas where GE has unique expertise and I will work with members of the board as well as of the standing committees to make this happen.”  Angbazo takes over from Dick Kramer who has led the American Business Council since its inception in 2007.

  • ‘Why we plan energy centre in Nigeria’

    The Society of Petroleum Engineers (SPE) Nigeria Council and the Petroleum Technology Association of Nigeria (PETAN) have said the objective of building an energy centre in Nigeria is to encourage the growth of local content, capacity and capability in the oil and gas industry as well as other sectors of the economy.

    The multi-million dollars project will provide opportunities for production of local content materials used in the sector. It is an initiative of SPE and PETAN, and the centre would complement the efforts of the Nigerian Content Development Monitoring Board (NCDMB) established to drive the use of local content (human and materials) in the nation’s energy sector, the Chairman, SPE Nigeria, Emeka Ene said.

    Ene said the centre is a product of collaboration between the SPE and PETAN, adding the two institutions decided to come up with the initiative in order to enhance the growth of the industry, by developing the skills of stakeholders across the value chain.

    He said the centre would be cited within the University of Port Harcourt, which donated one hectare of land for the project. “Apart from the fact that the centre would provide opportunities for research into local content materials, it would assist in knowledge sharing among various professionals in the industry. There is going to be interactions between the professionals in the industry and the academia that are expected to bring their wealth of experience on board for the growth of the industry. The industry thrives on collaborations among bodies whose roles are critical to the development of onshore, offshore and deep offshore initiatives.

    In this case, PETAN and SPE will provide major technical and professional inputs that are necessary for the growth of the sector. We strongly believe that there would be a cross fertilisation of idea that would help in developing technology in the sector.

    Ene, also the President of PETAN, said latest technologies used by both the local and international oil firms will be showcased at the centre, which would boast of museum, conference halls, meeting rooms, learning rooms, and hotel.

    “We are going to replicate the centre in universities across the country. We have done the ground breaking ceremony of the proposed energy centre in the University of Port Harcourt. We are expectant of the success, which the centre will record. Major oil service companies- local and international have promised to buy into the initiative.” he added.

  • Price fall: Oil majors hold back $200b spending

    Global oil and natural-gas producers have delayed $200 billion of investment in more than 45 projects following the slump in crude prices, according to Wood Mackenzie Limited.

    According to Bloomberg, the deferrals “create a substantial hole in the industry’s investment pipeline,” accounting for about 20 billion barrels of reserves, the Edinburgh-based researcher said in an e-mailed report.

    Brent crude prices have dropped by half in a year after the Organisation of Petroleum Exporting Countries (OPEC) decided to maintain output to defend market share amid a global supply glut.

    More than 50 per cent of the affected reserves are in deep-water projects, while almost 30 per cent are in Canadian oil sands, the report showed.

  • More oil workers lose jobs as glut takes its toll on Nigeria

    More workers will  lose their jobs in the oil and gas  sector  as the full impact of continued drop in oil prices  comes to bear on the industry, the President, Association of Outsourcing Professionals of Nigeria (AOPN), Dr Austin Nweke has said.

    Petroleum Technology Association of Nigeria(PETAN), Mr. Emeka Ene says that over  6,000 jobs were lost  in the oil services segment of the industry as at first quarter of this year.  Many oil firms have lost their expatriate workers to recession because they are unable to raise enough money to maintain them.

    Nweke said the highly technical workers such as geologists, engineers and others have lost their jobs, adding that those in maintenance and security may lose their jobs if there is no improvement in the sector.

    He said the outcome of a research titled Challenges in the Oil and Gas  Industry in Nigeria conducted by AOPN shows that losses to oil theft, pipeline vandalism, and other untoward practices contribute to a shrink in turnover and profits of players in the industry.

    He said: “From the research, oil and gas firms are ready to keep low income workers such as security and maintenance officers. They are contract staff which the oil companies outsourced.  They are needed to secure assets such as pipelines and oil installation equipment, among others. Going by the current development in the industry, many companies would have no choice than to prune down the number of workers they outsourced.”

    He said clerical officers will also be affected since the companies would not like to maintain a moderate expenditure. According to him, contract workers are easy to get unlike the highly skilled workers such as engineers and technicians, stressing that oil firms can sack such workers and employ new ones when the need arises.

    He said recession in the global market has worsened the problems of oil companies operating in Nigeria, with resultant effects on their employees adding that outsourcing companies are owed by their clients due to the bad economy, and many of them are not ready to compound their woes.

  • Techno Oil eyes 5m cylinders yearly from N3b plant

    Techno Oil Limited has said its cooking gas cylinder manufacturing plant being built at Lekki in Lagos will produce five million units of cylinders yearly.

    The liquefied petroleum gas (LPG) cylinder manufacturing plant valued at over N3 billion, according to the company, is expected to create no fewer than 1,000 jobs.

    The company said the machines, fabrication and construction of the plant, are being monitored in strict compliance with regulatory standards as stipulated by the Standards Organisation of Nigeria (SON), Department of Petroleum Resources (DPR), and Cotechna, among others.

    Its Executive Vice-Chairman, Mrs. Nkechi Obi, said the plant was being constructed in partnership with a European firm, which has built similar plants in over 15 African and Asian countries.

    She said her company embarked on the project as part of its contribution to the Federal Government’s drive to deepen LPG consumption and encourage more Nigerians to embrace the use of the commodity, which is clean, safe and affordable.

    Although the use of cooking gas has increased by about 36.8 per cent in the past three years in the country, over 80 per cent of households still rely on kerosene, firewood and other energy sources that are not environment friendly, she said, adding that Nigeria has a population of over 170 million people, yet it has less than one million cooking gas cylinders in circulation.

    “The huge capital expended annually on the importation of LPG cylinders is a monumental loss to this country. With the completion of this project, Nigeria will curb this huge capital flight, which is estimated at N5 billion annually and further reduce the depletion of our foreign reserves,” she said.

    Obi said she is hopeful that the manufacturing plant would assist in checking capital flight suffered by Nigeria in importing cylinders adding that the huge kerosene subsidy estimated at over N150 billion annually, would be saved.  According to her, the plant will save the government funds expended yearly on importation of LPG cylinders from India, China, Turkey and other Asian countries.

    “This gap is what Techno Oil has positioned itself to provide solution to by making sure that high quality LPG cylinders are produced locally. The plant will be completed by November this year. We have the capacity to cater for the need of the Nigerian/West African populace. Hence, we do not foresee any organisation importing cylinders in the nearest future,” she said.

    Obi said there was need to exploit Nigeria’s huge gas reserves estimated at over 187 trillion cubic feet (Tcf). She lamented that Nigeria still ranked lowest in sub-Saharan Africa in per capita usage of LPG, consuming 1.1kg compared with Ghana at 3.0kg. South Africa consumes 5.5kg, while Morocco consumes 44kg per capita, she added.

    She also appealed to the government to handle the issue of awareness and also provide enabling environment, financial and infrastructural incentives, while the private sector undertakes the projects.  Government should do a one-off subsidy intervention by subsidising cylinders to households. We also commend the government for the Central Bank of Nigeria’s small, medium enterprise (SME) facility.

    “Cooking gas users find it extremely difficult to refill their cylinders. Sometimes they travel as far as 200km before they can access facilities to refill their cylinders. Our desire is for government to provide incentives for investors to build refilling plants and terminals and DPR to incorporate LPG plants in all mega stations within reach of communities so that people can refill their cylinders with ease and at affordable cost.

    “In furtherance to our advocacy in the last five years, to increase the number and popularise cooking gas usage among women, we have distributed over 50,000 units of gas stoves at discounted prices through market women across the country, and also donated to some indigent households,” she said.

  • Why govt should invest in oil industry, by SPE

    Nigeria’s oil and gas industry needs huge investments to be competitive and stand firm in times of global oil price crash, the Chairman, Society of Petroleum Engineers (SPE), Nigeria Council, Mr. Emeka Ene, has said.

    He said in the short term, huge investments can be made in the brown fields (fields which production have dropped substantially due to age), marginal fields and independents.

    In Ene’s view, investors and operators need to do infield drilling and work-over on all the brown fields, wells that have been developed already to get cheap barrels. Through this approach, he said, Nigeria could increase oil production by up to 20-30 per cent.  That is what the country needs now to boost its production, he argued.

    Ene said Nigeria’s oil industry lacks the required investment that will make it competitive like other oil producing countries, adding that this period of low oil price is the best time for the government to invest in and attract investors into the industry.

    He said common business sense requires investing in period of low price and selling in period of high price, lamenting that Nigeria is not doing but depleting the reserve it has.

    He said what makes other oil producing countries thick is that they invest heavily in their oil industry in periods of downturn and reap heavily when oil price is high. It is natural that oil price falls at certain periods and rise again with time, he said, adding that when the price of oil goes down, the cost of production per barrel goes down and that is the best time to invest, he added.

    Commenting on what Nigeria should  do in a period of low price as being experienced now, Ene said: “Supply and demand in the oil industry has not changed. Currently, supply exceeds demand but if you look at the forecast by the Energy Information Administration (EIA), we expect that by 2016, the gap will start to narrow.

    “So this is a time for Nigeria to actually do the opposite of what it is doing, which is to invest. If the country doesn’t invest, when demand will exceed supply, we will not have the barrels to meet that demand. Common business sense tells us that we buy low and sell high. This is the time to invest in our industry.

    “As we speak, Kuwait is investing $34 billion over the next three years in its oil industry to improve production; United Arab Emirates (UAE) is doing $36 billion, Saudi Arabia is also doing the same thing but in Nigeria, we are cutting back on our investments by over 30-40 per cent. To counter the effect from further oil glut, Nigeria is to take action by investing in its oil industry to boost production and become a competitive market place.”

    He said diversification of our economy is in order but it is not what can be achieved overnight but investing in the industry for tomorrow’s profit can start now.

    “Diversifying the economy is a great idea but it requires coordinated efforts to achieve. Right now, we are facing challenges of restructuring and reforming the industry to be leaner, more efficient and to produce cheaper barrels at a time when the industry is low so that we position the industry to reap the benefits when the industry is high.

    “We need to look at brown fields, marginal fields and independents. All the brown fields, wells, that have been developed already, we need to do infield drilling, work-over, and we get cheap barrels. Through this we can increase our production by up to 20-30 per cent just by investing in that. That is what we need to know as a country, there is need for campaign to boost production. Short term oil gain should be the target,” he added.

  • Power firms target September for adequate gas delivery

    Investors in power sector are banking on the appointment of key government’s officials in September to get gas to improve electricity supply, The Nation has learnt.

    It was gathered that investors who bought the 10 power plants built under the National Integrated Power Project (NIPP) by the Niger Delta Power Holding Company of Nigeria (NDPHC) on behalf of the Federal Government, and the successor companies from the defunct Power Holding Company of Nigeria (PHCN), believe that President Muhammadu Buhari will appoint people who would formulate policies that would help power firms to access  gas for optimal performanance .

    The Chief Executive officer, Abuja Power Station, Abaji, Jammel Jammal, said the September date slated for appointment of ministers and heads of parastatals by the president would determine where the pendulum swings in the nation’s energy sector.

    He said investors in the gas powered plants are waiting for the president to appoint officials  that would fix the pipelines in order to ensure the turbines access gas for power generation. He said many of the plants have not been accessing gas due either to pipeline breakage or what he described as collocation – that is lack of proximity between where the pipelines and the turbines are located.

    He said his firm has the capacity to generate 500 megawatts (Mw) of electricity but the company has not been generating power since March  this year, due to lack of gas.

    He said: “We in Abuja Power Station plan to resume production in September, that is six months after we stopped electricity generation. Our decision is based on the statement by President Buhari that he would appoint members of his  cabinet in September. When the president appoints his ministers, the sector would witness positive developments.”

    Jammal said the pipelines and other components vital to the distribution of gas to the power plants are bad, stressing that the appointment of key officials that would manage the sector is the only thing the investors are waiting for. “It is on record that those contacted by the past government to secure the pipelines have been stopped. However, there is need to hire people that would fix and protect the gas pipelines from vandals,” he added.

    Also, the Chief Executive officer, Sahara Power Company (owners of Ikeja Electric and Egbin Power Plant), Kola Adesina said activities in the sector will be improved if President Buhari fixes the sector’s infrastructure. He said gas is a feedstock in the sector and urged the government to give provision and usage of gas priority in order to improve power generation and supply.

    He said the problems facing the sector are many, adding that gas is the major one. According to him, the industry is looking up at the new government to tackle infrastructure problems especially gas to improve electricity generation.

    He urged stakeholders to see power as an economic and not political issue, arguing that it is by doing the right pricing mechanism or model that the power firms will benefit as well as gas producers, and consumers.

    The spokesman, Niger Delta Power Holding Company, Yakubu Lawal said the company has built the power plants under its custody, stressing that gas is delaying the take -off of the plants. He said the company does not concern itself with gas production and distribution, stressing that it has successfully carried out its mandate of building and preparing the plants for investors to take them over, upon meeting all the criteria prepared by the Bureau of Public Enterprises (BPE) for the sale of the plants.

  • Nigerian Content chief hails EWT on vessel fabrication

    The Executive Secretary, Nigerian Content Development and Monitoring Board (NCDMB), Mr. Denzil Kentebe has commended the Energy Works Technology Limited (EWT), a subsidiary of the Nestoil Group for fabricating the first 90mm stainless steel clad vessel in Nigeria.

    The asset also known as a separator was designed for Shell Petroleum Development Company of Nigeria Limited’s (SPDC’s) Soku Field Development plan, which is internally clad with 316L stainless steel, with internal proprietary separation devices and weighs 83 tons.

    Speaking at the commissioning of the project, Kentebe hailed the growth of EWT within the past five years from a light fabrication company to one of the foremost pressure vessel, process equipment manufacturers and heavy fabrication yards in Nigeria.

    While pledging the Board’s commitment to help companies like EWT further develop their capacity, he commended operators especially SPDC, Total and Seplat that put work in the facility and charged other operators to support all service providers that have demonstrated competence and invested in developing their capacity in Nigeria.

    He praised his predecessor, Dr. Ernest Nwapa for laying a good foundation and driving laudable programmes, acknowledging that many of these Nigerian Content successes were birthed before he assumed leadership of the NCDMB.

    He assured that the Board under his leadership will continue to implement already established frameworks and initiate programmes that will build on the accomplishments. He reiterated that investments like the ones made by EWT were critical to achieving the Board’s vision to use Nigerian Content as a platform to industrialize Nigeria and also Government’s aspirations to create jobs and empower Nigerians on the back of oil and gas projects.

    He added that the Board “will continue to promote the establishment and utilization of Nigerian facilities and Nigerian owned assets. We will also leverage the Nigerian Content Development Fund (NCDF) to implement Capacity Development Initiatives that will create opportunities in manufacturing, engineering, fabrication, marine, subsea, drilling and well services and all other activities across the value chain.”

    The Managing Director of EWT, Mr. Emeka Nnadi credited the success of the project to the determination of SPDC, National Petroleum Investment Management Services (NAPIMS) and NCDMB to fabricate the 90mm stainless steel clad vessel in Nigeria even when the capability was novel to local services companies.

    “With this achievement, EWT has acquired the technical know-how of forming, assembling, welding and testing all ranges of thick welled pressure vessels,” he said.

    He also stated that all activities relating to the execution of the project were carried out by Nigerians, which demonstrated that Nigerian Content was viable and its impact on the Nigerian economy was worth the price.

    He announced plans by the company to begin motivating and supporting small scale fabricators to attain sophisticated capabilities as growth of this category will have a multiplier effect on the aggregate in-country potential.

  • Manufacturers, others laud Buhari on improved power supply

    Manufacturers, others laud Buhari on improved power supply

    •Seek privatisation of Transmission Company

    Manufacturers acting under the aegis of Manufacturers Association of Nigeria (MAN), commercial and residential consumers of electricity, have praised President Muhammadu Buhari  over  current improvement in power supply in the country. They urged the government to sustain the tempo and improve on it.

    Major consumers of electricity in the country including the industrial, commercial and residential customers that spoke with The Nation lauded the improvment, saying it will lead to job creation.

    The manufacturers that fall under the industrial or maximum demand customers consume the greatest volume of electricity. At the time of very low generation and supply that category of consumers depended solely on generators.

    President of MAN, Dr Frank Jacobs confirmed that power supply has really improved. He told The Nation that his members are excited over the development, and urged President Buhari to sustain and improve the supply.

    He said: “Most of our members that I spoke to on this issue confirmed that there has been significant improvement in electricity supply unlike in the past when we may not have electricity for some days.

    “I will like to advise the government not to relax as much is needed to be done. Government should ensure that there is adequate supply of gas, and at very affordable price. This will go a long way to help stabilise the improvement we are witnessing now.

    “The Federal Government should also privatise the Transmission Company of Nigeria (TCN). This will not only help to fully achieve the goals of privatisation but also help the private firms to invest in that segment of power supply value chain. With the investment from the private sector, the transmission network will be expanded speedily and the problem of system collapses will be drastically reduced.

    “The control of the transmission arm of the power sector by the government is slowing down the attainment of the privatisation goals because of the bureaucratic bottlenecks associated with running public owned and controlled organisations.”

    The Director-General, Nigeria Textile Manufacturers Association (NTMA), Mr. Jaiyeola Olarewaju said power supply has improved but added that much is still required to make the desired impact.

    He said: “Power has improved but not up to 30-40 per cent of our requirement. About 70-80 per cent of the power we use ought to come from the national grid, so we still heavily depend on generators.

    “Even though supply has improved in some places but we still cannot give them pas mark. The Federal Government shouldn’t relent on its efforts to supply adequate supply to the industrial sector. Government should also look at the private companies that bought the successor companies of the defunct Power Holding Company of Nigeria (PHCN). The investors whose companies are not doing the right thing should forefeit their licences.”

    Some artisans including welders, hair dressers, barbing salon operators at Berger and Ikeja in Lagos who spoke to The Nation also confirmed that supply has improved and has boosted their business. Operators  of cold rooms at Ijora and Oshodi said the hours of supply has improved but they still complement with their personal generators.

    The increase in generation at Egbin Power plant is responsible for the huge improvement witnessed in Lagos State and its environs. The power plant a few months ago, was generating below 500 megawatts (Mw) but currently it generates over 1050Mw.

    The Chairman, Egbin Power Plc, Mr. Kola Adesina said the improvement being witnessed is part of the benefits and success of the privatisation process and power sector reform in Nigeria. He attributed the achievement partly to the direct intervention of the Federal Government in its determination to resolve the power crisis, which has resulted in recent improvement in gas supply.

    “This is driving the increase in power supply in the nation, boosting socio-economic development. Prior to this, we had invested heavily and had the plant ready to generate power at full capacity but there was no gas to do so. This is indeed a good development for the power sector in Nigeria,” he said. He commended the government for the intervention in the gas situation that has impacted on power generation positively, and called for more dynamic policies and incentives for sustainable gas supply across the nation.

    Its Chief Executive Officer, Dallas Peavey said the transformation in Egbin commenced following its acquisition by Kepco Energy Resource Limited (KERL), in collaboration with its technical partners, Korea Electric Power Corporation (KEPCO).

  • Total begins production from Dalia field

    Total begins production from Dalia field

    Total said it has started production from Dalia Phase 1A, a new development on the offshore operated Block 17, located 83 miles off the coast of Angola.

    The Dalia Phase 1A project involves the drilling of seven infill wells tied back to the Dalia Floating Production Storage and Offloading (FPSO) unit. The project will develop additional reserves of 51 million barrels and will contribute 30,000 barrels per day to the Block’s production, according to Total.

    Total President Exploration & Production, Arnaud Breuillac, said: “The Dalia FPSO came on stream nearly nine years ago and with the addition of Phase 1A will still produce around 200,000 barrels per day. It is the latest milestone in the success story of Block 17, Total’s most prolific licence with cumulative production reaching two billion barrels in May 2015. Dalia Phase 1A demonstrates Total’s commitment to maximising value through the optimal use of existing facilities. These types of profitable satellite tie-back developments play an important role in maintaining production levels and generating additional free cash flow for the group.”

    Total operates Block 17 with a 40 per cent interest alongside Statoil, which holds a 23.33 per cent interest, Esso Exploration Angola Block 17 Limited, which holds a 20 per cent interest, and BP Exploration Angola Limited, which holds a 16.67 per cent interest.

    Through Blocks 17, 0 and 14, Total’s equity production reached 200,000 barrels of oil equivalent per day in 2014. The company’s operated production exceeded 700,000 barrels of oil equivalent per day in 2015, making it Angola’s leading oil operator.