The Nation Newspaper

Category: Energy

  • Govt prosecutes 23 for oil theft, illegal bunkering

    The Federal Government is prosecuting 23 cases involving the use of barges and vessels for oil theft and illegal oil bunkering, the Commander, Joint Task Force (JTF), Major-General, Emmanuel Atewe, has said.

    Atewe said the cases are at the Federal and State High Courts in Yenagoa, Bayelsa  State capital, and Federal High Court, Port Harcourt, Rivers State.

    He said the cases are at various levels of litigation, adding that the JTF is pursuing the cases vigorously with a view to ensuring that people found culpable are brought to book.

    He said the barges and vessels were used to steal crude oil worth several billions of naira, adding that speedy hearing and adjudication of the cases would help in tackling the problem. He said the cases regarding oil theft and illegal oil bunkering are delayed in Nigeria, urging the judiciary to help in fast-tracking the process of hearing the cases to ensure speedy delivery of judgment.

    The jurisdiction to entertain such criminal cases, Atewe said, lies in the higher courts, stressing that JTF’s responsibilities include securing the waterways and oil installations, arresting vandals and thieves, handing them over for prosecution and ensuring that they were charged to court.

    Atewe said: “The goals of the JTF are to secure oil wells and others, and not to try offenders in the court. Only the courts have the jurisdiction to try such people. This is after due process by way of carrying out investigation. Despite this, several cases of oil thefts are pending in courts.”

    The senior partner, Falana & Co, Mr. Femi Falana, blamed those involved in oil theft and bunkering for delaying the process of hearing the cases. He said people that engage in oil theft have huge financial resources with which  they frustrate cases regarding stealing and transporting crude oil outside the country.

    He said: “Bunkering can be problematic when one considers the fact that people involved in it have the economic wherewithal to frustrate their trials. The legal system has been taken over by these people to frustrate their trials. They do this by raising objections and filling interlocutory injunctions. When this happens, they have succeeded in delaying hearing and judgments.”

    According to him, cases can be delayed for years before they were heard. The lawyer said by the time oil theft cases move from one court to another, the judges handling the cases might have been transferred.

    Also, sources close to the National Judicial Council (NJC) said lawyers should be blamed for delaying the process of hearing criminal cases, and not the judges. The sources, who craved anonymity, said lawyers often file interlocutory injunctions to halt proceedings in a case.

    “At times, lawyers file interlocutory injunctions to stop a case for reasons best known to them. In the course of filing injunctions to stop hearing in a case, lawyers look for technical reasons to straighten their defence and get justice for their clients. When this happens, cases are delayed for a year, two or more, “the sources added.

  • ‘Pipeline vandalism threatens Gas Master Plan’

    The various acts of vandalism being carried out on the gas pipeline infrastructure across the country may derail the goal of the national Gas Master Plan, the Group Executive Director, Gas and Power, Nigerian National Petroleum Corporation (NNPC), Dr. David Ige has said.

    He said the activities of vandals, which  have been on the increase lately, threatens the success of the Gas Master Plan, especially gas supply across the country.

    While speaking at a stakeholders’ forum in Lagos, he said vandals have helped in destroying many laudable programmes initiated by the government to make wheeling of gas from producers to users, especially power companies possible.

    He said: “The Trans Forcados gas pipeline’s vandalism is almost every week now, and it has been going on for some time. In fact, from the 1st January till February this year, the pipeline has been vandalised several times, and each time we have to fix the pipelines, we spend days on it.

    “The pipeline has been vandalised consistently. What happened is that people go there and drill holes in multiple points on the pipe; in most cases, they kill the security operatives that have come to intervene. This is how gruesome it has become.”

    He said the implication of the activities of the vandals is clear. “It is a major outreach. It evacuates most of the crude oil from our production facilities at Oben, Sapele, Utorogu, and so on through Forcados, which is the main export terminal,” he said, adding that pipeline vandalism is an albatross which NNPC is contending with.

    The Federal Government introduced the Gas Master Plan, to maximise the production and the usage of gas, regarded as a major raw material for power firms, fertiliser, and petrochemical companies, among others.

  • US record crude stocks set to decline

    United States (U.S) crude oil stocks have grown over 30 million barrels each month this year, leading to a series of record highs and most recently reaching 471 million barrels of crude on March 27,  oil and gas analyst Wood Mackenzie’s latest outlook has shown.

    Even so, Wood Mackenzie’s latest outlook estimates that the US has about 200 million barrels of unused crude storage capacity.

    The Senior Research Analyst for Americas Refining and Oil Product Markets at Wood Mackenzie, Afolabi Ogunnaike said: “Wood Mackenzie does not expect the US to run out of crude storage. On the contrary, we anticipate that the uptick in refinery crude runs and exports will exceed the growth in supply eventually leading to stock withdrawals.”

    Wood Mackenzie forecasts refinery crude runs will rise significantly in April as refineries exit seasonal maintenance and gear up for the summer driving season. “Refinery crude runs could increase over 1.7 million barrels per day (b/d) from the spring lows to the summer high and set new records. The ramp up in crude runs is expected to be the largest factor impacting the trajectory of US crude stocks. As US refineries increase their throughputs, we anticipate they will also increase their imports of crude oil from the March 2015 levels,” said Ogunnaike.

    The low crude oil prices have contributed to slower growth of US crude oil supply. Wood Mackenzie expects this growth will be counterbalanced by increasing exports of crude oil and minimally processed condensate. These exports are supported by a wider Brent-WTI differential.

    Although the US has ample crude storage capacity available, Cushing is now about 80 per cent full, according to Wood Mackenzie: “The April 2015 start up of the 250,000 b/d Cactus pipeline from the Permian into the Gulf Coast is expected to reduce pressure on Cushing. This pipeline bypasses Cushing, and moves light crude to the Gulf Coast refining and storage hub. Rising Cushing crude stocks could also reach the Gulf Coast by accessing the 1.55 million b/d pipelines connecting the two regions,” Ogunnaike adds.

    US crude storage capacity has grown significantly as tight oil supply and takeaway capacity increased. “As storage hubs like Cushing approach capacity, crude may need to be transported further to access available storage sites. These sites could charge higher fees and may be more costly to reach. This logistics factor has a widening impact on Brent-WTI. We anticipate the narrowing impact of the rising crude runs, however, outweighs some of these challenges and compresses the Brent-WTI differential this summer,” noted Ogunnaike.

    Wood Mackenzie’s outlook reiterates that despite the rise in crude oil stocks this year, US storage is not close to reaching capacity. “Record high crude stocks will be pulled down this summer as US refinery crude runs rise over 1.5 million barrels per day,” said Ogunnaike.

  • Fed Govt plans deregulated gas price regime

    Fed Govt plans deregulated gas price regime

    THE  Nigerian National Petroleum Corporation (NNPC) and the Department of Petroleum (DPR) have advised manufacturers using gas to prepare for a ‘deregulated gas price’ mechanism.

    The new regime may be introduced before the implementation of the Nigerian Gas Transporation Network Code (NGTNC).

    The Group Executive Director,  Gas and Power, NNPC, Dr David Ige, who made this known in Lagos, said the time had come for manufacturers and other domestic gas users to buy the product at varying prices.

    NNPC and DPR are asking foreign and indigenous firms to prepare for a market where price would be determined by supply and demand and not by the government as the NGTNC gets underway.

    The execution of the NGTNC code, according to DPR, is in three stages: The manual (2015); partial auto (2016) and full auto implementation in 2017.

    NGTNC is  being introduced by NNPC nad DPR, following complaints by the Manufacturers Association of Nigeria (MAN) that its members that the supply of gas is not transparent.

    The government fixed the price of gas at $2.5 per 1000 standard cubic feet (scf) for power plants; methanol, fertiliser and petrochemical firms will buy at $3 for 1000 scf.

    Ige said the manufacturers complaints that the exchange rate of  one dollar to N197 (official price) had eaten deep into their production costs was understandable, urging them to wait for the code.

    He said the differential rates were bound to come up because of the government’s efforts at making operators access the product.

    Customers he said, could buy gas at  $2.5, $2.8, and $3, depending on the sellers.

    Ige, represented by the General Manager, Gas Pipeline Infrastructure, NNPC, Sam Mbakwe, said  buyers and sellers would start choosing from various customers in the market.

    He said: “We are heading to a period where there would be willing buyers and willing sellers in the gas industry. The government regulated price is going to disappear soon. The regulated price is there because there are no commercial structures in place to guide the operation of the market. Once there are structures that would guide commercial activities, there would be change in the ways transactions are conducted. This will be made possible by the Nigerian Gas Transportation Network Code.

    “You don’t expect somebody to bring his money, invest it by laying gas pipelines and charge lower prices for transporting gas from his base to where users or buyers would use the product. The economy is becoming market driven. What the government is saying is that people should handle gas from the commercial point of view.”

    The Deputy Director, Gas Monitoring and Regulation, DPR, Antigha Ekaluo, said: “The goal of the code is to allow the forces of demand and supply to govern the market. DPR wants to reduce its intervention in the sector by taking a back seat. Though the DPR would perform its oversight functions or roles of ensuring that everything works out fine in the oil and gas industry, the body will take a back seat position to encourage growth.”

    He said gas price fixing was out-side DPR’s purview, stressing that the industry would decide the price. “If you are a manufacturer and you have an item to sell, you fix your price and sell. Whoever is willing to buy your product would come and vice-versa. The same thing is what we are advocating for in the gas sector. The slogan is free entry, free exit.”

    Ekaluo allayed fears that manufacturers would leave the market, saying the market is big to accommodate many players. He said no gas producers would sell at a fixed price.

    The Director-General, Lagos Chamber of Commerce and Industry ((LCCI), Mr. Muda Yusuf, said manufacturers were using their own power plants because electricity supply is irregular. He said plants use gas, noting that  the huge cost of gas is inhibiting economic growth.

    Yusuf said: “Manufacturers rely on alternative source of energy for growth. But the questions are: At what rate are they buying diesel to power their generators? At what price are they procuring gas for their power plants? The price is huge. This informed the decision of manufacturers to use advocacy as a tool of making the government reduce electricity tariff.’’

  • Ikeja Electric to upgrade customer data

    The Ikeja Electric Distribution Plc,  in conjunction with its technical partner, Korea Electricity Power Limited (KEPCO), has concluded arrangements to enumerate its customers to drive its metering programme.

    The firms signed a contract at the Ikeja Electric’s headquarters in Lagos to kick-start the project.

    Egbin Power  Plc, which KEPCO technically oversees, and Ikeja Electric, are owned by  Sahara Group, an integrated energy firm.

    Director, Sahara Group Mr. Kola Adesina said  the deal would involve mapping the location, coordinating each of the electrical networks, including 132kv/33kv system, 11kv system, distribution transformers and poles.

    It would also involve the indexing of Ikeja Electric’s distribution assets, such as power transformers, feeder pillars, high tension poles and distribution transformers, he added.

    He said: “This is going to be a thorough project that would ensure a solid foundation for efficient, equitable and transparent power supply to our esteemed customers. The customer and consumer indexing will be carried out through door-to-door survey. We are appealing to all our customers and the good people of Lagos to support the project by cooperating with the enumerators and provide accurate information that would empower Ikeja Electric to give the best service possible to all customers.”

    Adesina said that the project would provide a platform for assessing and deploying transformers and electricity equipment required in a community, noteing that this would address challenges faced by customers that would translate to improved power supply.

    He said that the project would ensure effective customer segmentation of high and low density areas and will support seamless update of the company’s customer data base.

    “We are transiting into an era where new technology will drive the campaign against energy theft and distortion of electrical equipment. The signing of the contract with KEPCO would also fast-track effective metering process.With this contract, l can boldly say that the kick-starting of our robust metering project has commenced,” he added.

    The Chief Executive Officer of Ikeja Electric, Abiodun Ajifowobaje, said that the signing of the contract was in compliance with the directive of the Nigerian Electricity Regulatory Commission (NERC) to distribution companies to conduct customer enumeration to update their data base.

    He said the exercise would enable the company upgrade its system for better service delivery.

  • NUPENG to ensure safe cooking gas use

    The Liquefied Petroleum Gas Retailers Association of Nigeria (LPGARAN), a branch of the National Union of Petroleum and Natural Gas Workers (NUPENG), has restated its commitment to safe use of cooking gas.

    Its Chairman, Comrade Chika Michael Umudu made the pledge  after his inauguration in Lagos.

    Thanking members for reelecting him, he said his administration would focus on innovation, adding: “Our administration will bring good things, safety of our members. We shall ensure our members do the business in a manner that will make gas usage safer and encourage more people to embrace gas for their commercial, industrial and domestic needs.”

    His administration, he said, would strive to ensure that the association maintained its standards and ethics in the industry. “As we move into a new era I seek support of all and indeed our executives at various levels,” he added.

    Others elected are Comrade Chijioke Ogboka Deputy Chairman 1; Comrade Mohammed Omede Deputy Chairman 2; Comrade Musa Ibrahim Mekud Vice Chairman; Comrade Monday Nwatu Secretary; Kayode Solomon Asst. Secretary; Comrade Phillips Agbo Treasurer; ComradeTunde Omoarevbokha Trustee; Comrade James Ikhelia Financial Secretary; and Comrade Yeroowo Onosigho Public Relation Officers.

    Others were Comrade Ifeanyi Okoli Product Inspection Officer; Comrade James Adetayo Auditor 1; Comrade Chukwujekwu Okafor Auditor 2; Comrade Uchenna Ofoegbu Chief Whip; Comrade Okwudili Nnamami Asst. Chief Whip; and Comrade David Ariyo Welfare Officer.

  • NIPCO posts N2.916b profit

    NIPCO Plc has declared a profit before tax of N2.916 billion for the financial year ended December 31, 2014, representing a three per cent increase over the N2, 827 billion declared in 2013.

    Its Chairman, Plc, Chief Bestman Anekwe shareholders at the company’s 11th Annual General Meeting (AGM) in Abuja, said the company’s profit after tax also rose by 11 per cent from N2,089 billion in 2013 to N2,314 billion in the year under review.

    In a statement by its Manager, Corporate Affairs, Lawal Taofeek, Chief Anekwe described the performance as good, considering the challenging operating environment in 2014, adding that the company is emerging stronger, bigger and more committed to excellent services.

    According to him, the company recorded a turnover of N145.174 billion in 2014 as against N137.851 billion in 2013, which represents an increase of N7.32 billion.

    He noted that in view of the performance, the Board recommended a dividend of 375kobo per share, totalling N703.756 million representing a seven per cent increase over the 350 kobo paid in 2013. The amount was unanimously approved by shareholders.

    The chairman explained that the impressive result is a fallout of the commitment, dedication, diligence and prudent management of resources and the numerous marketing strategies put in place by the company. He stated that the result is a reflection of the resolve of the board and the management to brace all odds in achieving a superior shareholders’ value in the industry.

    Reviewing the downstream sector last year, Anekwe said because domestic requirement of refined petroleum products could not be met locally due to poor state of the refineries, it made import regime unavoidable. “The above scenario coupled with the difficulties associated with the processing of subsidy claims impacted negatively on downstream operator’s margins resulting in low returns on investment,” he said.

    Its Managing Director, Mr Venkataraman Venkatapathy said the company was able to put in place initiatives, which improved its service delivery to stakeholders, stressing that the workforce played a key role in this direction. He said the company’s operations continued to be in tandem with international best practices, noting that the focus will propel the firm to exceptional performance this year.

    Venkatapathy stated that NIPCO’s passion for safety continued to pay off and earned it scores of recognitions, the most recent being Nigeria Ports Authority (NPA) Best HSE compliant terminal award for the fourth consecutive year. He assured shareholders that the company’s transformation agenda is on course and shall remain committed to meeting their needs in line with the corporate mission.

  • ‘Smart meters ‘ll address estimated billing, others’

    The management of Ikeja Electricity Distribution Plc now known as Ikeja Electric,  has said  the planned introduction of smart metering infrastructure will ultimately address the problem of estimated billing and energy theft. The meters will also enable prompt and improved response to vandalism of power distribution facilities.

    Speaking during a customer forum in Lagos, its Managing Director/Chief Executive, Abiodun Ajifowobaje , said the necessary financial and technical commitment needed to achieve new metering regime has since been put in place. “We have and will continue to make investments in this regard and assure all our customers that the impending roll-out of smart meters will drive effective and transparent billing system within the network. We will surely work with all customers to ensure the success of the project even as we remain committed to continued engagements on the issue of estimated billing,” he said.

    Ikeja Electric, he said, has concluded a comprehensive study and technical evaluation of the network through the assistance of its technical partner, Korean Electricity Power Company (KEPCO). The company is also carrying out Asset GIS mapping and customer enumeration. The completion of these exercises will facilitate effective planning for future development and reduction of technical and commercial loss levels.

    Its Head, Communication Strategy, Pekun Adeyanju in a statement, said Ajifowobaje told the customers that Ikeja Electric has introduced  new payment channels, which have made payment of electricity bills easy and less stressful. With the introduction of such new services, some operational glitches will be brought to the attention of management and promptly addressed. He further added that customers can always reach its contact centre through the dedicated helplines  07000225543, 014483900, or email:customercare@ikejaelectric,com for prompt solutions to queries and enquiries.

    The Ikeja Electric chief attributed the drop in power supply to low allocation of power to the company from the national grid. He craved the  understanding of customers saying Ikeja Electric remains committed to equitable distribution of the power it receives from the grid.

    “Ikeja Electric requires at least 1,250 megawatts (Mw) to effectively serve customers within its network, but we consistently receive only about 400Mw for the past two weeks. You all are aware of the gas challenges as well as the activities of vandals. The government and stakeholders in the sector are  working assiduously to  tackle these issues and ultimately with the reform, we will transform power supply in Nigeria.

    “Equipment vandalism remains one of the greatest factors militating against stable  power supply within the network of the company.  In 2015 alone, over 70 transformers have been lost to vandalism within Ikeja Electric’s network,” he said.

    Ajifowobaje decried the increase in vandalism and called on the community to assist the company in stemming the menace. “Whilst we will continue to partner with security agencies to protect our equipment, it is not feasible to man all our equipment across the network for 24 hours a day. We, therefore, call on community leaders through vigilance groups to assist in this regard,” he added.

     

  • JTF vows to deal with oil thieves in Niger Delta

    The Commander of the Joint Task Force (JTF) in the Niger Delta, Major General Emmanuel Atewe, has warned oil thieves, sea robbers, kidnappers, and other crime perpetrators in the region and its environs to stay clear or risk being crushed.

    Atewe told The Nation that the agency is committed to its mandate of checking illegal activities on the waterways and oil installations and checkpoints in the area, adding that anybody caught would face the law. He said the body has arrested one of the biggest bunkerers, adding that efforts are ongoing to nip in the bud activities of people that pose as threat to – the  socio-economic wellbeing of the country.

    He said over 100 vessels that were being used for nefarious activities, have been arrested in line with the goals of the JTF to rid the region of criminals. According to him, the communities have been supportive as evident by the ways they participate in issues that would help reduce crimes.

    “The communities are on our side. They are supporting our activities. The JTF has so far  intercepted  and arrested several illegal oil bunkering vessels and suspects and handed them over to prosecuting agencies for prosecutions,” he said.

    The JTF commander urged stakeholders to join hands in fighting crude oil theft and other criminal activities in the region.

    On his zero-tolerance campaign against oil-theft and illegal oil bunkering in the Niger Delta, Atewe reiterated his commitment to total eradication of oil-related crimes.

    The Federal Government established the JTF few years ago to curb activities such as kidnapping, oil theft and others that have brought huge loss to the economy. The Nigerian Extractive Industries Transparency Initiative (NEITI) said the nation has lost  over 1.38million barrels of crude oil estimated at $10.9billion through pilfering and sabotage from 2009 to 2013. It added that the figure of losses in crude theft represents about 7.7 per cent of the total revenue  that accrued to the federation account within the period.

  • Seven Energy begins gas supply to fertiliser firm

    An indigenous oil and gas company, Seven Energy International Limited, has commenced supply of natural gas to Notore Chemical Industries Plc, a fertiliser and agro-allied company in Nigeria.

    The commercial delivery of gas to Notore in Onne, Rivers State, is being executed through Accugas, a wholly-owned subsidiary of Seven Energy. The company said 25 million cubic feet per day (mmcf/d) of gas is supplied as part of the feedstock to Notore’s fertiliser plant. By this supply arrangement, Seven Energy is helping Notore fertiliser plant to improve its operational efficiency and enhance the plant’s output, it said. Natural gas is a major component in the production of fertiliser.

    The Chief Executive Officer, Seven Energy, Phillip Ihenacho, said: “We are happy to announce the formal commencement of gas deliveries to Notore Chemical Industries Plc through our subsidiary, Accugas, a clear demonstration of our commitment to drive the industrialisation of Nigeria through the development of the country’s  huge natural gas resources. Through the supply of our processed gas, we are providing a new source of feedstock to meet the company’s increasing requirements, whilst directly enabling the production of fertiliser that Nigeria’s burgeoning agriculture sector desperately needs to grow.”

    The Managing Director, Accugas Stephen Tierney, said: “This milestone represents another significant step for Accugas in our effort to increase domestic supply and utilisation of gas for the good of the Nigerian people and its economy. By providing a clean, dependable, quality source of gas supply to the Notore plant, and doing so via an integrated end to end solution, we are demonstrating our clear commitment and execution performance toward enhancing domestic gas consumption for broader industrialisation.”

    Seven Energy has continued to champion the Nigerian gas and industrial revolution through the exploration and production of natural gas, and its commercialisation through processing and distribution infrastructure, where it has invested over $1 billion in the southeast region of the Niger Delta in the last five years, it added. This enables Seven Energy to reach the end-user and to support Nigeria’s evolving power sector and meet the growing energy needs of the industrial sector.In 2014 President Goodluck Jonathan commissioned the Uquo Gas Processing facility owned by Seven Energy. The facility currently supplies gas to five industrial customers.