The Nation Newspaper

Category: Energy

  • Reform too early to be assessed, says MAN

    It is too early to assess the power sector reform, the Manufacturers Association of Nigeria (MAN), has said

    Its Chairman, Infrastructure Committee, Reginald Odiah, told The Nation that the body wants to observe the unfolding situation before passing judgment on issues relating to the power sector reforms.

    He said: “As regard the issue of privatisation of the Power Holding Company of Nigeria (PHCN), it is a good development in the history of Nigeria’s energy sector. The idea is aimed at repositioning the sector for growth to enable it compete with others in the emerging economies.

    “Though we believe that the National Electricity Regulatory Commission (NERC) is competent to regulate the sector and further make it work, we are still studying the situation. We want to see how the whole thing plays out before stating our position on the matter.”

    Odiah said the body presently generates about 550 megawatts (Mw) of power in the three out of its eight delineated industrial clusters.

    He said the association grouped the country into eight industrial clusters, out of which three were picked for the location of power plants after careful appraisal of developments. He said the three clusters located in Ota/ Abeokuta axis of Ogun State have functional power plants, adding that the Ota/Abeokuta axis was chosen because of its relatively huge concentration of industries.

    “We are looking at areas with high concentration of industries and after necessary investigations, we arrived at a decision to choose Ota/ Abeokuta axis. Besides, we discovered that the cost implication of having power plants in the area is not much compared to others.  In the three industrial clusters located in the Ota/ Abeokuta axis, we have three power plants with an output of 550Mw,” he added.

  • Body faults NCP, BPE on power sector privatisation

    The Senior Staff Association of Electricity Workers and Allied Companies (SSAEAC) has faulted the privatisation of the power sector by the National Council on Privatisation (NCP) and the Bureau of Public Enterprises (BPE) ,picking holes in their claims of carrying out due diligence on the new power investors’ financial and technical capabilities.

    Speaking to The Nation, the General Secretary of Association, Abiodun Ogunsegha said the claims were false and misleading, in view of the financial and technical problems being experienced in the sector and the poor electricity supply across the country.

    He said: “Had it been that NPC and BPE conducted a thorough financial and technical due diligence on the investors, they would know that many investors are not financially prepared for the electricity business. Many are struggling to pay back the banks that gave them loans to purchase the assets of Power Holding Company of Nigeria (PHCN).  Some of the distribution firms cannot provide money to carry repairs of facility because they could not generate enough revenue.

    “Many investors are technically deficient. They do not have deep knowledge of operations of the sector. They were not properly advised on the issue of technical partners needed for growth. They thought they would recoup their money within three months. However, events and circumstances have proved them wrong.”

    Ogunsegha said the sector is suffering because the investors are not ready to commit additional funds.   He said it is illogical for investors to use money realised from other business to finance the loans, adding that the sector would continue to suffer.

    According to him, the pre and post-privatisation mistakes committed by the BPE and NCP have culminated in the problems facing the sector.   He said consumers are protesting because they could not get regular power, adding that protests would not stop until there is improvement in electricity supply.

    However, the BPE’s spokesman, Joe Anichebe said the allegations that proper due diligence was not carried out on the bidders were not true. Anichebe said the bodies consulted on wide range of issues before taking decisions, noting that they spent months in examining the bidders’ proposals.

  • OPEC on diplomatic visits over oil price concerns

    The Organisation of Petroleum Exporting Countries (OPEC) producers are stepping up their diplomatic visits before the group’s meeting next week, potentially seeking a consensus on how to react to oil prices that have plunged to a four-year low.

    According to Bloomberg quoting the official Saudi Press Agency, Libyan Prime Minister Abdullah al-Thani flew to Riyadh at the weekend just as Iraqi President Fouad Masoum left the kingdom after a two-day visit where he met with King Abdullah, and Venezuela’s foreign minister and representative to OPEC, Rafael Ramirez held talks in Qatar as Saudi Arabian Oil Minister Ali Al-Naimi tours Latin America.

    The Saudis will not walk the road alone, they want to see everyone share the burden with them,” Kuwait-based analyst Kamel al-Harami said by phone. Saudi Arabia, the world’s biggest oil exporter, is trying to build consensus among fellow members of the OPEC before they meet on November 27 in Vienna, Austria.

    Brent crude extended losses below $80 a barrel, dropping to a four-year low amid signs that OPEC’s biggest members will refrain from reducing output to ease a supply glut. WTI settled at $77.18 last week, the lowest close since October 2011.

    Falling oil prices are straining state budgets among OPEC members, including Iraq’s government, which is leading a costly war against Islamist militants, and Libya that is struggling to keep crude output steady amid political divisions and violence.

    Saudi Arabia remains committed to seeking a stable oil price and speculation of a battle between crude producers has no basis, Al-Naimi said in Mexico after a visit to Venezuela.

    OPEC members Libya, Venezuela and Ecuador have called for action to prevent crude from falling further. Libya’s OPEC governor Samir Kamal said last month that the group must cut daily output by 500,000 barrels as the market is oversupplied by about 1 million barrels a day.

    Venezuela’s Ramirez discussed crude prices and stability of oil markets with Qatar’s Prime Minister Abdullah bin Nasser bin Khalifa Al Thani and Energy Minister Mohammed Bin Saleh Al Sada in Doha as part of a tour of oil-producing countries, Venezuela’s foreign ministry said in statement on website. Ramirez had visited Algeria, and is scheduled to travel to Iran and Russia, the ministry said.

  • ‘Infrastructure deficit inhibits growth in gas sector’

    ‘Infrastructure deficit inhibits growth in gas sector’

    Inadequate infrastructural facilities, such as pipelines, pressure station, and Central Processing Unit (CPUs), are hindering the growth of the gas sector, the President, Liquefied Petroleum Gas Association of Nigeria (LPGAN), Mr. Dayo Adesina, has said.

    Other  challenges, he said, include lack of gas stripping plants and effective regulatory mechanisms, among others.

    Adesina said the problems are ineffective utilisation of gas, which makes it impossible for critical sectors of the economy to access the product for growth. He said the country is finding it difficult to take the gas to where it is needed, processed and used to achieve the desired results.  He lamented that Nigeria is flaring gas without considering its socio-economic implications.

    He said: “The country is flaring millions of metric tonnes of gas daily, because there is no infrastructure in place to capture it for productive usage.  And to take the gas to where it is needed, the government has not done much  in that regard. Facilities such as Central Processing Units (CPUs), gas stripping plants, pressure stations and others are lacking in the country. What is considered a waste in the gas sector can be turned around and be useful in other sectors, if there are adequate infrastructural facilities in place.”

    According to him, the gas  being flared can power the whole of Africa, if the right policies are in place.

    Also, the Director-General, Bureau of Public Enterprise (BPE), Benjamin Dikki, in an interview with The Nation, said gas shortage has affected the operation of the power sector. Dikki said infrastructural deficit in the gas industry is having spillover effects in the power sector. “Instead of wasting gas by flaring it, we can channel it to the power sector. Due to gas shortage, the power sector cannot generate enough electricity. We are producing less than 6,000MW of electricity. We are hovering between 4,000MW to 5,000MW of electricity; when we are supposed to generate 10,000MW.We have been targetting 10,000MW for some time now and we are yet to achieve it.

    The Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, and her counterpart in the Power Ministry, Prof. Chinedu Nebo, the Group Managing Director, Nigerian National Petroleum Corporation (NNPC), and other relevant stakeholders had in Abuja, discussed how to make gas available to the power sector.

  • Arco targets offshore business, adopts holding structure

    Arco Group Plc is seeking a wider spot in the international oil and gas market in line with its new business strategies of stimulating growth within and outside the country, the Chairman, Joseph Akpieyi, has said.

    Speaking on the sidelines of the company’s annual general meeting held in Lagos, Akpieyi said the company hitherto known as Arco Petrochemical Engineering Plc, will explore opportunities across African continent.

    He said: “Prior to the incorporation of Arco Group, Arco Petrochemical Engineering Company Plc (APEC) was coordinating Arco companies in addition to its maintenance and engineering services. APEC will now formally cease to exist. The newly incorporated Arco Maintenance and Engineering Limited (AMEL) will take over the maintenance and engineering functions. By this, AMEL becomes a subsidiary of Arco Group Plc.”

    He said Arco Pipeline Solution Limited, one of the subsidiaries of Arco Group, had in 2013 executed an offshore contract, adding that the group wants to consolidate its footprints in the international market.

    “Arco Pipeline Solutions Limited has successfully obtained the ISO 9001:2008 Quality Management Certification with Bureau Veritas in 2013, through which it was able to get international contract.  All companies within Arco Group have commenced the process of getting ISO certification for growth. We are leveraging on the success of Arco Pipeline Solutions to successfully obtain ISO Certification. We believe the Certification will improve Arco’s competitive edge in delivering high quality products and services within Nigeria and overseas, especially in West and Central Africa,” he said.

    Akpieyi said the company has a five-year strategic plan that would chart the course of the organisation towards sustainability.

    The Managing Director, Arco Group, Alfred Okoigun, said 35 companies have been incorporated as subsidiaries of Arco Group Plc to engage in businesses ranging from oil and gas, electricity, manufacturing, construction, fabrication, to technology and entertainment.

  • NAPE confab begins

    NAPE confab begins

    The 32nd annual international conference and exhibition of the Nigerian Association of Petroleum Explorationists (NAPE) has started  at the Eko Hotel and Suites, Lagos. It will end on November 13.

    The conference with the theme: “The future of hydrocarbon exploration:Drilling deeper, searching wider”, will bring experts together to discuss on exploring emerging and revolutionary technologies for hydrocarbon exploration, the commercialisation and exploration strategies for deepwater plays as well as portfolio growth and diversification of hydrocarbon potentials in inland basins.

    It will also deliberate on ways to drive executable gas flare-out agenda for Nigeria’s oil and gas industry as well as examine the effectiveness in the existing policies to drive growth in the oil and gas industry so as to come up with initiatives for the development of roadmaps and new policy initiatives.

    NAPE President, Adedoja Ojelabi, while talking to reporters on the conference, stated that the event will host speakers who are high level industry practitioners, key personnel in government and academia that will deliver papers on six  sub-themes including; play diversity, characterisation and operational challenges of HPHT (high pressure high temperature) and deep plays; Frontier exploration and analogues: Gulf of Guinea and West Africa transform margin basins;  Emerging technology and commercialisation strategies for deepwater plays; Searching wider and exploration growth: New exploration targets in brown field conventional play; Portfolio growth and diversification – hydrocarbon potential of inland basins and exploration strategies; and Safety, Health, Security and Environmental challenges in hydrocarbon exploration.

    Speakers include Minister of Power, Prof Chinedu Nebo; Director, Department of Petroleum Resources, George Osahon; Dr Olayiwola Fatona, Managing Director, Niger Delta Petroleum Resources Limited; Vice President, Gas Shell, Mr. Ubaka Emelumadu and Group Executive Director, Gas and Power, NNPC, Dr David Ige.

  • ‘Refining crude in-country will help grow economy’

    The Independent Petroleum Marketers Association of Nigeria (IPMAN) has urged the Federal Government to boost in-country refining of crude to enhance growth of the economy, especially in this period of oil price decline.

    IPMAN National President, Chief Chinedu Okoronkwo, gave the advice during the association’s zonal meeting and swear-in of the new western zone’s vice-chairman held in Lagos.

    Okoronkwo stated that the  decline of crude price in the international market should not disturb Nigerians, noting that if crude is substantially refined locally, it would eliminate expenditures on importation and other processes of ensuring petroleum products availability in the country as well as boost value creation, Gross Domestic Product (GDP) and job creation.

    According to him, over 243 byproducts are derived from crude oil but only three are exploited in Nigeria. He said: “We should not entertain any fear on the current decline in crude oil prices globally. IPMAN is working seriously to ensure that the proposed $3 billion refineries in Kogi and Bayelsa states come on stream by 2016 to reduce refining outside the country.

    “We are proposing to build two refineries in Nigeria; one in Bayelsa State and another in Kogi State to ease fuel scarcity. This is part of the present administration’s agenda. We are in discussion with our foreign investors.

    “We will ensure that petroleum products get to all nooks and crannies of the country. It will also grow the GDP of the country because capital flight will reduce drastically. Nigeria spends $60 billion in importing refined products, the proposed refineries will reduce the cost and stress of exporting crude to bring in refined products.”

    He said that when the refineries come on stream it would continue to build and maintain healthy products reserves for the country. It will also create jobs for Nigerian youths. It will also reduce incessant kidnapping in the country, he added.

    Okoronkwo stated that the proposed refineries would go a long way in opening up the socio-economic growth of the country, which would also key into the transformation agenda of President Goodluck Jonathan.

    He said that Nigeria, Africa’s largest crude oil producer, is unarguably the biggest importer of refined petroleum products in the continent, creating lucrative market for refineries in Europe and the United States.

    He expressed confidence that the refineries hold enormous economic benefits for the states where they will be located and entire Nigeria. For instance, there is no way we can put down over $3billion without making sure that the refineries work.

    The newly elected vice-chairman, western zone of IPMAN, Alhaji Debo Ahmed, lauded government’s effort in combating pipeline vandalism. He assured members of total support in ensuring effective monitoring and distribution of petroleum products. He urged members to embrace peace and support one another in moving the association forward, adding that internal wrangling will not help the collective interest of the association.

    “I will ensure that the integrity and harmonisation of members become paramount. I’m going to work with my zonal chairman and national executives to find lasting solution to challenges in products availability and distribution within the western zone,” he said.

  • Reform too early to be assessed, says MAN

    Reform too early to be assessed, says MAN

    It is too early to assess the power sector reform, the Manufacturers Association of Nigeria (MAN), has said

    Its Chairman, Infrastructure Committee, Reginald Odiah, told The Nation that the body wants to observe the unfolding situation before passing judgment on issues relating to the power sector reforms.

    He said: “As regard the issue of privatisation of the Power Holding Company of Nigeria (PHCN), it is a good development in the history of Nigeria’s energy sector. The idea is aimed at repositioning the sector for growth to enable it compete with others in the emerging economies.

    “Though we believe that the National Electricity Regulatory Commission (NERC) is competent to regulate the sector and further make it work, we are still studying the situation. We want to see how the whole thing plays out before stating our position on the matter.”

    Odiah said the body presently generates about 550 megawatts (Mw) of power in the three out of its eight delineated industrial clusters.

    He said the association grouped the country into eight industrial clusters, out of which three were picked for the location of power plants after careful appraisal of developments. He said the three clusters located in Ota/Abeokuta axis of Ogun State have functional power plants, adding that the Ota/Abeokuta axis was chosen because of its relatively huge concentration of industries.

    “We are looking at areas with high concentration of industries and after necessary investigations, we arrived at a decision to choose Ota/ Abeokuta axis. Besides, we discovered that the cost implication of having power plants in the area is not much compared to others.  In the three industrial clusters located in the Ota/ Abeokuta axis, we have three power plants with an output of 550Mw,” he added.

  • Shell’s global deepwater holds 675b bbls recoverable oil, says IEA

    Shell’s global deepwater holds 675b bbls recoverable oil, says IEA

    The Royal Dutch Shell’s global deepwater assets have been said to contain estimated 675 billion barrels of recoverable oil.

    In its latest monthly publication called Shell World,published by Shell companies in Nigeria, the company quoted the International Energy Agency (IEA) as putting Shell’s global deepwater proven reserves at about 675 billion barrels. In the publication, Shell confirmed that it has enjoyed decades of successful projects and some landmark moments in 2014 in global deepwater.

    It stated that its Nigerian Bonga North West (BNW) Field, which achieved first oil in August, is part of Shell’s long-standing commitment to developing deepwater engineering skills in Nigeria, adding that the investments made by Shell Nigeria Exploration and Production Company (SNEPCo) and its other project partners in the Bonga North West project include upgrades of local contractors’ facilities and providing specialised training for Nigerians to work in the energy industry.

    Oil from the Bonga North West field, according to Shell, is transported by a new subsea flowline to the existing Bonga subsea infrastructure while additional equipment and control systems were installed and integrated with Bonga Main topsides.

    The publication noted that a significant part of the project was carried out by Nigerian companies including an indigenous contractor that fabricated and installed the BNW topsides equipment.

    Commenting on the BNW achievement, Shell’s Vice President Nigeria & Gabon, Markus Droll, said: “It is significant to note that the project leadership and majority of staff working on the BNW project are Nigerians – testament to the growth of deepwater engineering experience in SNEPCo. Above all, we are pleased that the project has so far been delivered without lost time injury (LTI) with SNEPCo and contractor staff working safely on various aspects of the project in about 10 different locations in the United States, Europe and Nigeria.

    “This programme – on top of the ongoing Phase 2 drilling and after the start-up of Bonga North-West barely two months ago – further underlines our commitment to Nigeria and leadership in deepwater production.”

    The Corporate Media Relations Manager, Precious Okolobo, also said that SNEPCo has announced plans to drill eight more wells in the Bonga field to help maximise deepwater production in Nigeria. This third phase of the Bonga Main development is expected to add about 40,000 barrels of oil equivalent per day through the existing Bonga floating production, storage and offloading (FPSO) facility.

    Okolobo stated that Phase 3 is an expansion of the existing Bonga Main development and will involve drilling four oil producing and four water injection wells. Drilling is expected to start in 2015. Output from the new wells will be transported through existing pipelines to the FPSO facility. The facility has the capacity to produce more than 200,000 barrels of oil and 150 million standard cubic feet of gas a day.

    The Phase 3 work will be executed by several contractors including Nigerian companies that have developed deepwater expertise through the provision of similar services for SNEPCo. The Bonga field, which began producing oil and gas in 2005, was Nigeria’s first deep-water development in depths of more than 1,000 metres. Bonga has produced over 500 million barrels of oil to date.

    The Bonga project is operated by SNEPCo as contractor under a production sharing contract with the Nigerian National Petroleum Company, which holds the lease for OML 118, in which the Bonga field is located. SNEPCo holds a 55 per cent, Esso Exploration & Production Nigeria Limited 20 per cent, Total E&P Nigeria Limited 12.5 per cent and Nigerian Agip Exploration Limited 2.5 per cent.

  • Power Ministry to Kano Govt: Follow due process

    The Ministry of Power has advised Kano State Government to follow due process in obtaining all requisite approvals before commencement of any hydro electricity project in the state.

    The Special Adviser to the Minister of Power on Investment, Finance and Donor, Olajuwon Olaleye, told The Nation at a conference in Lagos that as much as the ministry encourages the growth of the sector by seeking private and public participation in electricity projects, due process is required of Kano State Government before it can access water for power generation purpose.

    He said the Federal Ministry of Water Resources is charged with approving the use of water for power generation, therefore, he advised the Kano State Government to approach the Water Resources Ministry for such approvals.

    Olaleye, who was responding to allegations of non-approval of licence for hydro power generation raised by the Special Adviser to the Kano State Governor, Amisi Abdullahi, insisted that due process must be followed to get needed approvals. He said there is a director in the Water Ministry that the Kano State Government needs to interface with to get the approvals.

    He said: “The Federal Ministry of Water Resources also has an agency that is being funded by bilateral organisations. The agency works on dam projects especially dams that are meant for power generation. On the issue of licensing for power generation, there is a process that needs to be followed, especially for a private company that wants to be involved in electricity generation.”

    He said the state government needs to look inward by tapping into opportunities in solar energy.

    In a related development, Abdullahi said that Kano State Government is targeting 10 megawatts (Mw) of electricity by December 2014. He said the 10ms would be added to the 250mw of electricity, which the state is currently getting from the national grid.

    He stated that the state government will use the 10mw of electricity to provide street lights, noting that the government relies on alternative source of energy for sustenance.

    “We are targeting 10mw of electricity by December 2014.  We will use it to power our street lights. We are using diesel generators, which virtually everybody is using in Nigeria to augment supply from the grid.  The government is facing challenges such as failure to get approvals to generate power through hydro means,” he said.

    Abdullahi said the state government is taking a proactive approach towards improving electricity generation, adding that hydro power generation holds much prospects for the state.