The Nation Newspaper

Category: Energy

  • Renewable energy: Govt ends survey of solar power sites

    Renewable energy: Govt ends survey of solar power sites

    There may soon be stable power supply through the use of solar energy.

    The Federal Government has conducted a survey using a Global Positioning System(GPS) to determine the  sites where solar equipment will be installed to improve the off-grid transmission of electrcity.

    The government used a space-based satellite navigation system to determine the topography of the country’s land mass of 923,678 square kilometres, its weather conditions, areas where solar facilities, such as poles and panels, can be erected to maximally make use of the sun for power generation, among other benefits.

    The study revealed that the government and private firms want to explore the opportunities in solar power, which experts say, is a better source of renewable energy.

    The reason is that Nigeria has a huge sun density, and it is yet to tap into the opportunities available in coal, bio-mass, wind and other renewable energy sources.

    The Special Adviser to the Minister of Power on Investments, Finance and Donor Relations, Olajuwon Olaleye, said the government had contracted two foreign companies to provide a detailed description of the country’s topography.

    He did not name the firms.

    Olaleye said: “We are working with two companies that did the whole solar map or Global Positioning System (GPS) of Nigeria.The map shows areas that are corrosive and those that are not.They are at the dimension where all the sub-stations and transformers are.The companies are working to situate the map well.They have done all these for companies that want to invest in solar to use.

    “When you want to provide a solar form of electricity, you need to know the corrosive nature of the land. Facilities would be deployed in the 774 councils, as part of efforts to provide energy. Nigeria is endowed with natural soruces of generating energy, and it’s working towards achieving success in that area. That is why the government wants to provide a Renewable Energy and Efficiency Policy.’’

    He said the Federal Government, through the Ministry of Power, was working with the states on how to acquire land and deploy facilities in solar projects.

    Olaleye said getting the land approval from the state governments was crucial to the implementation of solar energy initiatives in Nigeria.

    ‘’Regarding the renewable energy system, Nigeria is endowed. The country has a lot of natural resources that can be used to generate eletricity.Efforts are being geared toward achieving that objective. The government believes in maximising the potential in the on-grid  and off-grid transmission of electrcity to achieve results. While on-grid has to do with the electricity generated from hydro and turbines means and subsequently pass through the national grid, the off-grid relates to power generated through the sun,wind and other natural sources.’’ Olaleye added.

    Officials of the German Development Bank, during a visit to Nigeria,  said the bank earmarked $200 milion for the development of renewable energy   in the country.

    The leader of the delegation, Renate Von Bodden, said the German government would continue to support the various energy-related initiatives in Nigeria.

    The development is line with the Federal Government’s decision to introduce and implement energy mix programmes and further improve power supply.

  • How to improve power supply

    THE drop in power generation will continue unless the Gas Master Plan and other initiatives introduced by the Federal Government are fast-tracked, stakeholders have said.

    Speaking against the backdrop of the inability of the government to supply enough gas to power generation companies, the President, International Association of Energy Economics(IAEC), Prof Adeola Akinnisiju, said the government should implement policies to improve supply.

    He said the Escravos Gas Project could not be relied upon to provide enough gas for the power sector.

    Akinnisiju said: “There is a frequent drop in power generation, occassioned by low supply of gas to the thermal plants. Escravos does not have the capacity to provide enough gas to the power firms. Now that the government has privatised the sector and handed over the assets of the Power Holding Company of Nigeria (PHCN) to the new investors, the government must fast-tracked the implementation of gas policies for growth of the power sector. Besides, the capacity of Escravos must be improved. Bigger volumes of gas must come from the plant.’’

    He said Escravos’inability to provide gas sufficient gas to Afam IV, Rivers Independent Power Plant, Olorunsogo Power Plant, among others, had affected electricity generation.

    He said the occassional low water level at the hydro power plants had also contributed to the problems in the sector.

  • Firms seek loans restructuring to cushion oil price slump

    Oil exploration and production companies are trimming their loans’portfolios and projects to survive following the slump oil price from N120 to N61 per barrel.

    The firms are approaching their banks to reduce their loans’ portfolios, among other cost-cutting measures.

    Speaking at a sensitisation programme by the Department of Petroleum Resources (DPR) in Lagos, the Head, Oil and Gas, Fidelity Bank Plc, Abolore Solebo, said firms were making frantic moves to reduce their credit lines, to save costs and manage their investments.

    He said an operator of a marginal oil field had asked the bank to cut  the amount of loans needed for the operation.

    He said: “A customer who operates one of the marginal oil fields has asked the bank for a reduction of the loan needed from the bank, due to falling oil price. He put in a call and I discussed the issue with the Board.‘’

    He said the declining price of crude oil was having ripple effects on stakeholders in the industry, adding that operators were trying to avert further losses by taking proactive measures.

    “The fall in price of crude oil is taking its toll on the industry’s operators. An operator, who got a credit for his business when the price was, for instance, $116 per barrel, never envisaged that the price could drop to $62 per barrel. The business was good then. Mind you, he needs to service the loan. But the question is at what cost, giving the fact that there is a glut in the crude oil market?

    ‘’As the prices of crude oil fall to abysmal level, the oil producing firms are finding it difficult to mitigate the cost of production. Their profit base is shrinking, and there is the need to for ways of reducing their cost.’’

    Also, an official of a first generation bank, who spoke on condition of annoymity, said banks were making efforts to reduce their debts overhang. He said financial institutions set up oil and gas departments, and appoint competent people to manage it to make money from the sector.

    “The global oil market is experiencing one of its moments, and the lenders are at the receiving end. Some financial institutions gave out big loans to oil firms,with the belief that they would continue to manke money from the transactions. But things are going awry. The market is no longer bouyant.  Banks are conerned with two things.  First is recouping the loans given oil and gas firms. Secondly, they are reducing the loan advances to operators in the petroleum industry,’’ he said.

    Nigeria had scaled down the crude oil benchmark for the 2015 budget from $78 to $73 per barrel, earmarked $2billion for the three-tiers of the government, among other measures taken in the wake of the falling crude oil price.

    Its  Coordinating Minister of the Economy and Minister of Finance, Dr Ngozi Okonjo-Iweala, said the measures would insulate  sthe economy from the falling crude oil prices.

  • Ikeja DISCO to tackle payment problems

    The Ikeja Electricity Distribution Company (IKEDC)  is addressing problems which  customers are facing on its new payment channels, its Managing Director/ Chief Executive Officer, Mr Abiodun Ajifowobaje, has said.

    In a statement, he said the company’s technical experts were working to ensure that the channels offer seamless payment services for its customers.

    He said the company regretS any inconvience the issue might have caused to its customers, stressing that the problem would soon be over.

    He said: “While wishing everybody a merry Christman and New Year ahead, the company will ensure that customers access good services. With the new payment channels, on-going infrastructure upgrade and investment in new technology, Ikeja Electricity Distribution Company will continue to work towards providing sustainable and equitable power supply to all its customers.”

  • Govt urged to set up fund for operators

    The Federal Government has been urged to set up a special fund for indigenous oil and gas operators.

    The  Managing Director, Del-Sigma Petroleum, Soky Amachree, gave the advice duirng an interview wth The Nation.

    He said the development became imperative to enable domestic operators to improve their operations and compete with their counterparts in other countries.

    He said the International Oil Companies (IOCs) in Nigeria and the local banks needed to evolve a partnership through which they would support their marginal field operators.

    Amachree said many of the marginal field operators were in need of technical and financial assistance, adding that their problems would be reduced once the fund is set up.

    He said such operators go about sourcing funds after their licence had been approved by the government.

  • Delta Gas Park of controversy

    Delta Gas Park of controversy

     

    The  Ijaw and the Itsekiri are quarelling over the Ogidigben Oil and Gas Park. They are accusing each other of playing politics with the $16billion project,  writes AKINOLA AJIBADE

    The row between the Itsekiri and Ijaw in Delta  State over  the $16billion Ogidigben Oil and Gas Park is growing. Last weekend, the communities  traded words  over the issue.

    The Itsekiri are claiming prioprietary rights over where the plant is located in Ogidigben; they are not ready to share the project with the Ijaw. The Ijaw, on the other hand, are  accusing the Itsekiri of trying to monopolise the facility.

    The arch-rivals are locked in a battle over the project,  which is expected to sit on a 2,560-hectares of land.

    The two communities have been at each other’s throat over the matter  since August, when the Petroleum Minister, Mrs Deazani Alison-Madueke, and the Chief Executive Officer, Nigerian Content Development Monitoring Board (NCDMB), Ernest Nwapa,   unfolded the government’s plans to establish oil and gas parks in nine states.

    The states are Bayelsa, Rivers , Ondo, Cross Rivers, Akwa Ibom, Imo  Delta,Ondo and Edo.

    The cancellation of the ground breaking  ceremony of the facility two months ago by Mrs Alison-Madueke has not doused the tension  between the communities.

    An Itsekiri leader and Ajuwaoy-Iboyami of Warri Kingdom, Delta State, Chief Ayiri Emani, said  Ogidigben belongs to the Itsekiri and, therefore, has the right to host the facility, reputed to be one of the biggest in West Africa.

    Emani said based on this, Ogidigben has the right to host the project.

    He claimed that Ogidigben is an Itsekiri land, going by the geography of the state and do not need to share the facility with another community.

    Emani said: “Traditionally, Ogidigben  belonged to the Itsekiri. The Ogidigben land was acquired by the Delta State government under Dr Emmanuel Uduaghan in 2012.  For record purpose, Ogidigben was part of Ugborodo in Itsekirir land. There are five subclans in Ugborodo. They are Ogidigben, Madangho, Ajudaibo, Arunto, and Ode-Ugborodo. Based on this,  Ogidigben has every right to host and answer the name of the project.’’

    He said the plan to establish the park in Ogidigben and subsequently named it after the community would not degenerate into crisis, as long as the government followed due process.

    “I do not foresee any problem once the government is willing to do the right thing. Nobody wants to take laws into his hands by formenting trouble in the country. I understand that some people are trying to distract the attention of the government on this issue,’’ he said.

    On the sharing of the project, Emani said it would not be right for bothe comunities because the government has committed  a lot of money to the facility.

    He said any attempt, by the government to ensure that the two communities share the project would amount to a waste of time.

    However, a human right activist and  and an Ijaw youth leader, Comrade Sherif Malade, holds a contrary view. He said the two communities have equal right to host the project, when one considers the size of the facility.

    He said a big chunk of the land approved for the project falls within the Gbaramatu Kingdom in Ijaw land, adding that Ogidigben can only boast of the smaller fraction of the land.

    He said Ijaw communities, such as   Ikpokpo, Opuede, Tebujor, Okpelama,Opuedebubor, Oporoza, Sokebolou, Yokiri, and Adedegbene are close to Ogidigben and are expected to benefit from the project.

    Malade said:  “For instance, if the government wants to cite a project in Opebi, Ikeja, Lagos, and found out that Opebi does not have enough land to accomodate the project. There is no way the project would not spill over areas, such as Toyin Street, Allen Avenue, Balogun, Awolowo, and other, neighbouring communities in Ikeja.  Does that make the project an Opebi project? No. The same thing is applicable to the Ogidigben oil and gas park. The land in Ogidigben is small and cannot accomodate the facility. The project will spill over to the  Ijaw communities listed above. That is the reason behind the calls by the Ijaw, that the project should be shared by the Itsekiri and Ijaw.  However, the Ijaw are saying no. We want a sharing formula agreed and acceptable to the two tribes.

    He added: “We do not want the facility to be known as Ogidigben Oil and Gas Park. We want the name of the project to be boldly proclaimed and which we believe should be called  Delta Gas City, Gbaramatu/Ogidigben. Gbaramatu is in Ijaw land, and by this the Ijaw are sharing the name of the project with the Itsekiri. However, the Itsekiri are saying no. That is where the problem is.  The Itsekiri have a lega right to host the facility, so also the Ijaw. Based on this, a sharing formula should be adopted.’’

    He said the project offers more economic benefits to the people, than political, advising people  to stop playing politics with it. He added that some politicians are using their infuence to make the government establish  the park in Ogidigben.

    He urged the government to proffer solutions to the problems, arguing that failure to do so might cause serious crisis in the Niger Delta region and the country. He said the government is yet  to curtail the activities of the Boko Haram, the Islamic insurgents  group, and should not add more to it.

    Malade said the region has witnessed several cases of killings and wanton destruction of properties, urging the government not to allow the Ogidigben issue snowball into a bigger crisis.

    The Spokesman, Nigerian Content Development Monitoring Board, Eze Obinna, said the Board cannot comment on the issue now. He said the Board was not permitted to say anthing until the issues  were resoved.

    President Goodluck Jonathan has waded into the matter to ensure the take-off of the project. His spokesman, Dr Rueben Abati, said the government had set up a committee to settle the matter.

  • Electricity managers to punish errant DISCOs  

    Electricity managers to punish errant DISCOs  

    The Electricity Management Services Limited (EMSL) has vowed to sanction any distribution company that fails to follow  the rules over suspended equipment.

    Its Managing Director,  Peter Ewesor, who spoke during a visit to the Ibadan Electricity Distribution Company (IBEDC),  said it was impossible to punish the Federal Government when it was in charge of electricity.  It is easier to do now because electricity management is in the hands of private firms.

    EMSL is the government’s regulatory agency inspecting and approving technical equipment of electricity distribution companies in the country ýwith a view to maintaing the standards.

    Ewesor said: “We are in Ibadan to continue an awareness of the agency to make known its functions and activities in the industry. We will also establish relationship with the distribution company by ensuring that they use standard materials and equipment in the course of doing their business and we shall collaborate to ensure that good products are used for their services.”

    According to him, technical problem is the major challenges confronting the power sector.He pointed out that faulty equipment hamper the discharge of power to consumers.

    He insisted that introduction of any new equipment by the electricity distribution company must be inspected by the agency for endorsement.

    Ewesor noted that distribution companies  should work with common standards that would work with the country’s system to avoid crisis.

    The EMSL boss added:  ”Usage of substandard equipment results in loss of revenue, equipment and supply,” adding: “it may even result in loss of lives in some cases.’’

    He continued: “When the equipment of the electricity distribution companies are standardised, there will be an improvement in power supply and it will also improve their revenue generation.

    “There is need to have power supply improvement instead of having power supply wastage, especially when the line is going through vegetation by resting on trees that are alive, thereby consuming the light that ought to be distributed. Also using aluminium and copper together does not work. It only result in power wastage.

    “When the government was controlling the affairs of electricity in the country, there was no way the agency can sue them. But now that it is owned  by private individuals, it is easier to sanction them. I know they will follow the laid down rules because they will also want to make profit out of their investments. So, they cannot afford to make such mistakes.’’

    The Managing Director, Ibadan Electricity Diatribution Company, Fortunato Leynes, promised that his firm would cooperate with the agency to keep standards.

  • GE, Heirs to boost upstream investments

    GeneraL Electric and Heirs Holdings have agreed to expand their  relationship in the upstream and downstream sectors of the oil and gas industry.

    In a statement, GE said its collaboration with Heirs Holdings had focused on the power sector and, specifically, the expansion of Transcorp Ughelli, Nigeria’s largest power station.

    The move, however, is a demonstration of a new approach by multinationals to develop meaningful and long-term deals with credible and strong indigenous companies across sectors, according to the firm.

    The statement quoted the Chairman, Heirs Holdings, Mr. Tony O. Elumelu, as saying that the expansion of the relationship with GE represented a pivotal moment for the oil and gas and for the nation as a whole.

    He added that this marked a major milestone in the company’s strategy to domesticate value across the energy sector.

    He said: “Partnerships like this capture the spirit of what I have termed Africapitalism and bring together global entities and world-class Nigerian companies. These are the kinds of investments we need to create employment and ensure economic value.”

    The agreement will ensure the development of local capacity, technology transfer and leverage the best of global technology to deliver a solution fit for the African market.

  • How to cushion effect of declining oil price, by Dangote

    How to cushion effect of declining oil price, by Dangote

    BUSINESS mogul Aliko Dangote has suggested ways out of the woods amid declining oil prices.

    Speaking during the International Conference & Exhibition of the Nigerian Association of Petroleum Explorationists (NAPE) in Lagos, the President, Dangote Group  cited some causes of the continued fall in oil price, and suggested how the Federal Government would best deploy proceeds from oil sales in sustainable development.

    He said increasing exploitation of shale oil by oil consumer countries, such as the United States, increased exploration and production of oil following high price of crude fuelled by emerging economies in Asia, discoveries of oil in new climes and power play in the global oil business, among others, were responsible for the continued drop in price of oil.

    The Dangote chief, however, said proper investment of oil proceeds by the government would cushion the effect of adverse situations, such as periods of poor pricing of crude, which is the mainstay of Nigeria’s economy.

    Primary among the options is the diversification of the economy and exiting the mono-economy.

    He mentioned some vital decisions to make the petroleum industry have a marked impact on the economy. They include giving attention to the  reform of the oil and gas policy and regulatory environment and ensuring that the much anticipated and long awaited Petroleum Industry Bill (PIB) is passed into law.

    Dangota said: “This affects the source of the bulk of national foreign exchange earnings. This is critical to the transformation of the sector and its repositioning to play an effective role in the new economy.

    “The second critical imperative is the removal of petroleum fuel subsidy. In reality, this subsidy of gasoline fuel benefits the more affluent, but small minority of the population. It has social governance as well as economic development ramifications. The subsidy diverts resources to the well off, while starving much needed funding from the sorely needed infrastructure developments.

    “The third policy imperative has to do with Nigeria’s inability to monetise its enormous natural gas resources. This has been a major policy failure in view of the great potential of gas to accelerate economic growth. The huge deficit in our energy consumption especially electricity, which has constrained our economic growth can be easily eliminated. The key is to adopt a pricing regime for gas that will encourage investment in gas infrastructure.  Whilst the gas policy and Gas Master Plan have been developed, progress has been limited by inability or unwillingness to implement.

    “A fourth imperative is the growing incidence of sea piracy in the Gulf of Guinea, with Nigeria reportedly being the home of most of the pirates. The Gulf of Guinea cannot evolve into a substantial Intercontinental Petroleum Trading Centre, with the threat of piracy looming largely over tankers plying the Gulf on petroleum trading voyages. Nigeria, being the largest trading partner on the Gulf and having the largest Navy must take decisive action to stamp out piracy completely.

    “Lastly, indigenous participation in all areas and sectors of the oil and gas industry must continue to attract focused attention and encouragement from the government.”

    He said  Dangote Group intends to contribute to the economic value chain in the petroleum industry through a Joint Venture (JV) partnership with First Exploration & Production (E&P) in a vehicle called West African E&P (WAEP), which will focus in upstream assets to provide feedstock to the midstream and downstream businesses. In the downstream, the Dangote Group plans to build 500,000 barrels per day oil refinery, largest in sub-Saharan Africa; 750,000 tonnes per annum (TPA) polypropylene petrochemical complex; fertiliser plant; and 2.8 million tons per annum (mtpa) Urea and Ammonia plant. The company plans to build gas infrastructure to support the Federal Government’s Gas Revolution and supplement the Gas Master Plan that delivers gas to the domestic market.

    “The Dangote Group and its partners are committed to delivering these projects before the end of this decade.  Our decision to embark on these investments is motivated by a strong desire to help transform the industry into a veritable driver of national economic growth and industrialisation. We are confident that public policy will continue to move in the direction that will expand the space for private sector to assume leadership in the economic development arena. Nigeria will be uniquely positioned to begin to exert geopolitical influence in global energy policies and power play if it can strengthen its internal governance structure, carry out long delayed policy and regulatory reforms, address social iniquities, and create a conducive environment for the private sector to play a lead role in our economic transformation journey,” he added.

  • Operators decry lack of data on local content

    Operators in the exploration and production arm of the oil industry and those in the services sector have criticised lack of data on local content that will   be accessed as one stop portal to determine  capabilities, capacities and other achievements.

    According to the operators, such data will help new and existing firms to easily find all information they need on any indigenous firm in terms of  capabilities and capacities. The operators spoke during a panel session at the just concluded fourth annual Practical Nigerian Content Forum held in Yenagoa, Bayelsa State.

    The President of Petroleum Technology Association of Nigeria (PETAN), Mr. Emeka Ene who spoke to The Nation,  said that  lack of such data poses serious chalenge to the  operators,  urging  the Nigerian Content Development and Monitoring Board (NCDMB) to create reliable robust and comprehensive data on local content activities and achievements for operators to access.

    He said: “Regarding the issue of data; data is a challenge in Nigeria; it is a real bid challenge, not just the availability of data, but the application of data to create change. There was a speaker asked if there is any one place, we can look at the work that is available in a particular area for the next five years in this industry. Let me contrast it with Brazil. What Brazil did when they approached local content, was that they looked at all the work for the next 20 years; they looked all the way to 2022 or 2025; they counted the number of rigs; number of jackets; number of flow-stations. They listed them, and asked how can we create the local industry that can provide all these overtime? So, they started building the shipyards required to fix the structures.

    “The NCDMB has done a lot in trying to kick off this process. They have created the Joint Qualification System (JQS), an e-market place, but the reality is that there is still disconnect between what the NCDMB is doing and what the NIPEX group is doing. In trying to integrate it on one electronic platform in such a place that we can access data, I think that we should also try to deepen the type of data we are acquiring; to distinguish between in-country investment versus representative investment, that is, agency representation because agency representation may have the same quantum in terms of spend but may not actually reflect the true local content in terms of Nigerians deployed on such projects. So, data has to be integrated to be affective. So, Petroleum Technology Development Fund (PTDF), NCDMB, international oil companies (IOCs), National Petroleum Investment Management Services (NAPIMS), and Nigerian Petroleum Exchange (NipeX), should be on one interrelated platform to be effective.”

    On how the Nigerian Content Fund has helped indigenous operators to access funds, Ene said: “Funding is actually a challenge. The bottom line is that for Nigerian companies to be competitive, they need to access long term, low cost funding without hiccups. They have to access technology acquisition funding. This is how other countries have done it. So, if a company has been in business for 20 years, it is trying to grow capacity, it is trying to manufacture hardware and it needs to acquire some technology and buy a blueprint for which it can manufacture components here in Nigeria, it should get direct support. It is not something the company can work with two-year contract to fund equipment that requires at least 10 years to recover. Many companies have crashed because of that disconnect. I did not say that the Nigerian Content Fund has not helped but what I mean is that we need to go beyond just funding contract. Right now, NCDMB has picked up quite rightly in funding short-term contracts; we need to go beyond that and begin to fund long term capacity growth in this industry.”