The Nation Newspaper

Category: Energy

  • ‘Oil still dominates Nigeria’s export market’

    Nigeria’s export market is still dominated by crude oil despite an appreciable improvement in the non-oil export, the Executive Director/Chief Executive Officer, Nigerian Export Promotion Council (NEPC), Olusegun Awolowo, has said.

    Nigeria is the world’s seventh biggest crude exporter. The country sustains its economy through oil, deriving a substantial amount of its capital expenditure from the product.

    Awolowo, who spoke at a stakeholders’ forum in Lagos, said oil is Nigeria’s biggest product for export, given the fact that Nigeria has huge crude reserves. However, he said the government has shown its readiness to increase the non-oil sector for growth.

    He said the country realised $2.970 billion from non-oil export in 2013, a 15.9 per cent increase over the non-oil export proceeds in 2012.

    He said the non-oil export potential had not been fully exploited. Besides, Nigeria is endowed with natural resources, including solid minerals and agriculture, he said, adding that some of the challenges facing the non-oil sector are infrastructure, energy, finance, skills, security and capacity.

    He said: “The non-export challenges in Nigeria are infrastructural deficiency, poor standardisation of products, high cost of production, falsification of documents, weak linkages to chain supply, unwholesome trade practices, and exports dominated by primary products. Others are inability to meet export orders and restricted access to credit and trademark.’’

    He said for Nigeria to position itself effectively in the global market, its goods for export must meet the competitiveness and standards required.  He said the country must identify international benchmarks, invest in skills, technology and innovation, provide conducive and stable export policy and environment to be able to compete well.

    Awolowo said there was no better time than now to critically address issues that would enhance the development and promotion of the country’s non-oil export.

  • Sector lacks engineers, NAPTIN chief

    The Director-General, National Power Training Institute of Nigeria (NAPTIN), Rueben Okeke, has  decried the dearth of qualified engineers in the power sector.

    Speaking during a conference in Lagos, Okeke said there is shortage of manpower in the sector following the sack of 60 per cent of workers of the defunct Power Holding Company of Nigeria (PHCN) by private investors this year.

    He said many of the workers were sacked due to old age, though many of them were good.  He said the development made the government to recruit more engineers to fill the gap in the industry.

    Okeke said NAPTIN has graduated 241 engineers since 2012, adding that more engineers would be trained to handle the technical and critical component areas in the electricity industry.

    He said: “The sector is far from having enough trained engineers to man the huge expansion that we have in Nigeria today. From the manpower planning, which we did in 2012 to support 20,000 megawatts (MW) of power, you will require no fewer than 6,750 engineers. And you will be looking at 17,441 technical personnel to support the planned 20,000MW generation.

    “Since the inception of NAPTIN in 2009 to 2012, we only trained those that were already in the sector; that is, existing workers. But from 2012 to date, we have graduated 241 engineers. These are fresh engineers from the university who have completed their National Youth Service Corps.

    “And we have in enrolment 336 and these ones should be graduating in October, this year. We have another set supported by SURE-P, 220 in number; they were inducted in April this year. They will graduate by March, next year. We have about 520 engineers recruited by the Transmission Company of Nigeria. So, if you check these figures, we will only have about 1,140 plus. The existing personnel, that is, the old engineers in the industry who keep the industry working, are less than 1,500 across the country.’’

  • Poor gas supply stalls 224 substations’ activation

    Poor gas supply stalls 224 substations’ activation

    Gas supply shortage is stalling the activation of 224 distribution substation built by the Federal Government to boost electricity supply, it was learnt.

    The Director-General, National Power Training Institute of Nigeria (NAPTIN), Reuben Okeke, said gas supply from the Nigerian Gas Company, a subsidiary of the Nigerian National Petroleum Corporation (NNPC), is inadequate.

    Okeke said the 224 substations could not operate optimally due to gas shortage. He said: “Though the stations are ready to help move the country from its current 4,500 megawatts (MW) supply level to 20,000MW in the next few years. However, it has been impossible to achieve this feat, due to gas shortage. Shortage of gas has stalled the various projects initiated by the government to wheel electricity into the national grid.”

    Many of the power generating plants built under the National Integrated Power Project (NIPP), he said, have not come on stream because of gas shortage. “Aside the fact that the country is targeting 5,000MW from the NIPP,  6,000MW is expected from the privatised successor companies unbundled from the Power Holding Company of Nigeria (PHCN). However, gas is impeeding the country’s ability to generate electricity,” he said.

    Okeke explained that there is no way the country’s energy needs can be achieved without being complemented through renewable sources of power supply.

    Nigeria, he said, requires substantial electricity for sustenance, stressing that thermal and hydro power plants remain the major sources of the country’s power supply.

    “Renewable energy sources such as solar, wind, coal and biomass would generate small amount of electricity. The energy from these sources is small and could not facilitate economic growth. Renewable energy should be for the rural areas and should not be relied upon to speed up economic process,” he said.

    Okeke said the decision of developed countries such as Germany and Canada to assist Nigeria develop its renewable energy system was purely selfish. He explained that such countries have developed renewable energy sources to an enviable height and are looking for markets where they would dump their equipment.

    According to him, Nigeria is one of the markets those countries hope to get buyers for their renewable energy products.

    The NAPTIN’s boss said Israel generates 100 per cent energy from coal, while South Africa meets part of its energy needs through coal. “While the renewable energy is good and capable of galvanising activities in communities across the country, it should not be seen as complementing the hydro and solar sources of generating electricity in Nigeria,” he said.

    Meanwhile, the Ministries of Power and Petroleum Resources are collaborating to improve gas supply as part of ongoing efforts to boost power generation.  The development, however, is yet to impact positively on the national grid, as irregular power supply continues.

    The Minister of Power, Prof. Chinedu Nebo, had reiterated government’s determination to ensure stable power supply before President Goodluck Jonathan completes his term next year.

    The current synergy between both minstries on gas supply, he said, would make Nigerians  enjoy steady and sustainable power supply.

  • ‘PIB will address gas supply constraints’

    n industry operator has called for the partial passage of the Petroleum Industry Bill (PIB) to open up the petroleum industry, especially the gas sector, to reinforce activities that depend on gas for fuel.

    The Senior Business Development Manager, Oando Gas and Power, Mr. Oga Adejo-Ogiri, who spoke on the gas sector requirements, said the undue delay of the bill’s passage has stalled activities in the oil and gas industry and overall economic development.

    He said if passing the entire PIB document is difficult, the National Assembly could approve some parts of it that would help move the industry forward.

    The PIB, he said, would adequately address issues concerning gas development, noting that the country does not have the legal framework for gas sector operation, which makes it difficult for operators and investors to invest in the sector.

    Adejo-Ogiri said partial approval of the PIB would strengthen institutional and regulatory frameworks to guide operations in the sector.

    He noted that policy inconsistency militates against the actualisation of government’s goals on utilisation and monetisation of the huge gas resources in Nigeria as well as the objectives of the Gas Master Plan (GMP), targeted at driving industrialisation and economic development.

    He explained that the lack of legal framework accounts for violation of some agreements entered with the government for the development of the gas sector through private sector participation. He said the government gave franchise to some firms to develop and control their areas within a given period.

    According to him, the franchises were in both the western and eastern areas of the Niger Delta and some parts of the country. Each firm has exclusive right to develop gas supply infrastructure in its area within a given period without government’s intrusion.

    But the government, he said, has brought in independent firms to build infrastructure in the franchise areas without consulting the franchisees as the agreement stipulated.

    He noted that because there is no commission or body in charge of the sector, it is difficult to complain to anyone.  He therefore, advised the Federal government to set up a body, like in the power sector, to drive the gas industry development and implementation of the GMP.

    Such a body, he said, would take responsibility for the coordination and implementation of the master plan and enable operators to have a specific entity to channel their concerns.  “As it is, the GMP has no ownership, nobody takes responsibility for anything,” he added.

  • ‘Cost-reflective tariff only possible with stable power’

    There cannot be a cost-reflective tariff until a significant improvement in power supply is attained, the Director-General, Bureau of Public Enterprise(BPE), Benjamin Dikki, has said.

    The new power investors are seeking for a hike in tariffs to improve their earnings and compensate for the cost of doing business. However, the Nigerian Electricity Regulatory Commission (NERC) said it would not be right to increase tariffs in the face of poor electricity supply.

    Dikki said a lot still needed to be done to improve power, given his assessment of the operations of the power companies.

    The firms, he said, are trying to fix infrastructural problems to improve electricity supply, adding that it would take some time to achieve that goal.

    He said as much as BPE and NERC would be willing to look into the possibility of having a cost-effective tariff in the industry, the present power supply situation in the country may not make it possible for now.

    According to him,  NERC came up with Multi-Year-Tariff-Order (MYTO), after considering the variables involved in the production and distribution of power.

    He said: “For there to be increased tariffs, NERC has to look at the variables again, analyse them and see whether they align with the prevailing situation in the industry. MYTO is scientifically determined. This implies that the tariffs need to be painstakingly handled to achieve the desired results.

    “Once there is an improvement in power supply, consumers would not hesitate to pay the tariffs issued by NERC. Conversely, consumers would fault any attempt to increase tariffs as long as they having poor power supply.”

    He explained that gas has been a problem in the sector, adding that attempts to proffer solution  would require galvanising activities of the operators.

    “Gas is one of the variables in the industry. If all the variables are well taken care of, there would be an improvement in power generation, distribution and transmission. Once this happens, businesses would improve,” he said.

  • SAPETRO redevelops Seme field

    South Atlantic Petroleum (SAPETRO), an indigenous independent exploration and production (E&P) company, has reached the depth of the first of the three development wells it planned to drain in the Seme field, block 1, off Benin Republic.

    According to this month’s Africa Oil + Gas Report, the well was being prepared for wireline operations. The well, CS-1, TD’d at 1,996metres measured depth, was drilled with the rig named Paragon L783 (formerly Noble Tommy Craighead).

    It said: “SAPETRO, a Nigerian independent, is redeveloping the only field ever produced in this poor West African country. Seme was abandoned in 1997. The redevelopment plan sees peak production at around 6,000 barrels of oil per day (bopd) after the field returns on line. The three wells would be drilled back to back from the same platform.

    “CS-1 is to drain the central accumulation of the field. Two more wells would still be drilled to drain the western and the eastern accumulations. The company drilled Perle C-1, an exploratory well last year, but that location is not in Seme field; it is in the far eastern side of Block -1.

    According to the report, “the Seme field was shut-in after 14 years of production by a succession of companies including Saga Petroleum, Pan Ocean and Ashland. It produced over 21 million barrels and was delivering, over several times, more water than it was producing oil at the time of field dismantlement.

    It said: “The field produced 7,627 bopd at its peak in 1984. At the lowest in 1997, just before abandonment, it was delivering only 1,207 bopd. SAPETRO took over the block in 2004, acquired three dimensional seismic data and conducted extensive interpretation, reservoir characterisation and modeling.”

    It continued: “The studies, it is hoped, would enable the company optimise production and carry out more efficient reservoir management practices than previous operators. The new data revealed two more culminations (West and Central), apart from the lone (Eastern) culmination, which the previous operator produced from, meaning that there’s more bypassed oil than the initial data suggested.

    “A total of 9,000 barrels of liquids per day is expected to be produced at peak, of which 3,000 barrels of liquids per day will be water and 6,000 per day is forecasted to be oil.”

    SAPETRO, the report said, expected that the field could still be drained optimally for another 16 years.

    The oil exploration and producing company, owned by General Theophilus Danjuma (rtd), holds a 15 per cent stake, about 24 per cent, while Brazil’s Petrobras  has 16 per cent and China National Offshore Oil Corporation (CNOOC) has 45 per cent. The oil block is located in oil mining lease (OML) 246.

  • Flour Mills to generate 12.5mw with GE’s diesel engine

    The general Electric (GE)’s  distributed power business arm has said the United Kingdom (UK)-based power provider, Clarke Energy, is supplying its new diesel engines to Flour Mills of Nigeria Plc for the generation of 12.5 megawatts, enough for 33,000 homes.

    The deal will solve the energy needs of the company, reduce pressure on supply from the national grid and encourage growth in the sector.

    This deal, according to the company, was the first sale of GE’s new 616 diesel engine globally. The engine delivers higher fuel efficiency and extended service intervals than many other engines. Clarke Energy said this at the East African Power Industry Convention in Nairobi, Kenya.

    “As Nigeria continues to grow its industrial might in the global economy, we have opted to invest in GE’s new 616 diesel engines to deliver higher fuel efficiency at our sites in Lagos and Kano. We have been working with Clarke Energy since 2005, and we are confident in its ability to support us in the engineering installation and maintenance of the units,” said Flour Mills’ Chief Executive Officer,   Paul Gbededo,

    The company’s  project will include five of GE’s 616 units, delivering up to 12.5 megawatts (MW) of power. Two of the units will be used at the Kano facility in northern Nigeria, where natural gas access is limited and where older, less-efficient diesel units have been used in order to maintain power for production. The new GE engines will deliver 5 MW of baseload electrical power, with an expected capital payback in less than 12 months on diesel fuel cost savings alone.

    The other three GE engines will be at Flour Mills’ facility in Apapa, where Clarke Energy opened its first sub-Saharan Africa site about a decade ago. This site features 11 GE’s J620 gas engines, and the diesel units will provide back-up capacity during the  maintenance of its equipment or in the event of supply failure.

    “The sale of the engines to our valued long-term customer Flour Mills of Nigeria demonstrates the significant benefits of reduced fuel consumption and extended maintenance intervals from GE’s new 616 diesel platform,” said Alan Fletcher, main board director, Clarke Energy.

    Clarke Energy, he said, has had a long history in sub-Saharan Africa. Its first office was opened in 2005 in Apapa, Lagos, and over 250 MW of gas-fueled power plants have since been installed to meet expansion of Nigeria’s domestic gas supplies. Since inception, Clarke Energy’s Nigerian operations have expanded and moved to Ikeja GRA, opening a new branch office in Port Harcourt in 2012.

    GE’s 616 diesel engine is based upon the highly successful Jenbacher Type 6 reciprocating engine and GE Transportation’s P616 locomotive diesel engine. The engine’s design is characterised by its world-class efficiency and extended maintenance intervals, which result in lower fuel consumption and higher levels of availability.

    “Our new 616 diesel engine is the first high-speed model for power generation, allowing us to serve customers with a wider reciprocating engine portfolio. We are honoured by the trust Flour Mills of Nigeria has extended to Clarke Energy and GE as collaborators in providing power generation for their growth. Flour Mills will benefit from the 616, which couples medium-speed engine fuel economy with the lower costs of high-speed engines and helps customers improve their total life cycle costs,” said Cory Nelson, general manager, diesel engines of GE’s Distributed Power business.

    GE Power & Water’s Distributed Power business is a leading provider of power equipment, engines and services, focused on power generation at or near the point of use. Distributed Power’s product portfolio includes GE’s aeroderivative gas turbines and reciprocating engines, which generate 100 kilowatts to 100 MW of power for numerous industries globally.

  • Lubricant sector needs govt’s assistance

    Lubricant sector needs govt’s assistance

    Operators of the lubricant sector of the downstream oil and gas industry are seeking the intervention of the Federal Government to enable the industry contribute significantly to the growth of the economy.

    They want the government and the regulators to protect the sector from imported substandard lubricants.

    Some of the operators, who spoke to The Nation, during their summit in Lagos, urged the government to  ban imported lubricants. They argued that a law would enable the local market to not only grow but also generate employment.

    They sought incentives that would encourage lubricant marketers and blenders.

    The Lubricants Producers Association of Nigeria (LUPAN), in their position paper, said: “It is worrisome to note that the market is also a dumping ground for substandard and off-specification imported lubes of questionable quality. All these infractions are, indeed, a threat to the survival of lube manufacturers in Nigeria.

    “The indigenous lubricant industry, which employs over 5,000 workers, has the potential to generate over 50,000 additional jobs if the lubricant blending plants work at full installed capacities.”

    The Managing Director, Lubeservices Associates, Mr. Kayode Sote, said: “The government should use its might to end the influx of substandard lubes, provide level playing ground for local lube makers to produce the product needed to fast-track the development of the Nigerian economy.”

    He said Nigeria is the third largest consumer of lubricating oils, over 600 million litres, which is one per cent of the world’s total demand, with gross earnings hitting N150 billion last year.

    Sote noted that there are 32 blending plants in the country with total installed capacity of about 965 million litres per year, which  produce at a cumulative average of 45 per cent of their total installed capacity.

    He said: “The cumulative asset base of the blending plants is about N20 billion, generating about N45 billion profits in 2013. It has been estimated that 75 per cent of the total need of lubricating oil is produced locally, while the balance  comprised specialised products imported by the marketing companies into the country.”

    The Chairman and Technical Adviser to Lubcon Group, Jani Ibrahim, said the lubricant sub-sector of the oil and gas industry operated at an average of 45 per cent of their total installed capacity thereby leading to job losses, which is not healthy for the development of the economy.

    He urged the government to reduce import duty on raw materials for lubricants such as additives and base oil and packaging materials, as well as eliminate multiple taxations.

    He urged the National Assembly to fast-track the passage of Petroleum Industry bill (PIB) in order to stem capital flight and attract more foreign investments.

    The Minister of Trade and Investment, Olusegun Aganga, said the Federal Government has launched a national lubricant policy as part of its agenda to boost the use of lubricants.

    He said the objectives of the policy besides checking the influx and sale of substandard and fake lubricants to end-users, are to make Nigeria self-sufficient in lubricant production and encourage export.

    He said modalities for the implementation of the policy were being worked out in consultation with other government ministries and agencies to enhance effective participation of all the stakeholders.

    He said the government was desirous of opening new opportunities in the exploration of bitumen, tar sands as an alternative source of base oil in Nigeria.

    The Managing Director of NNPC Retail Limited, Chris Osarumwense, who represented the Minister of Petroleum Resources, said the protection of the lube sector was important because it is used in almost all the sectors, particularly in the industrial and the manufacturing sector.

  • Ajimobi inaugurates N150m substation in Ibadan

    Ajimobi inaugurates N150m substation in Ibadan

    •IBEDC prepares workers  for service delivery

    The Oyo State Governor, Senator Abiola Ajimobi, has inaugurated a N150million 2×15 MVA Injection Power Substation at Akanran, in Onaran Local Government Area in Ibadan, Oyo State.

    Built by the Ibadan Electricity Distribution Company (IBEDC), the rehabilitated substation is a replacement for the one vandalised by protesters in 2012.

    Inaugurating the substation, Ajimobi urged residents and community leaders to protect the power infrastructure and make it sustainable. He praised the management of IBEDC for the rehabilitation.

    Ajimobi spoke mainly in Yoruba.

    Earlier, the Chairman, IBEDC,  Tunde Ayeni, represented by the Managing Director, Fortunato Leynes, assured of the readiness of the firm to provide  a minimum of 18-hour  power supply daily.

    He said the decision by the company to rehabilitate the substation, set ablaze by some youths in 2012 in the course of the anti-subsidy protest, was a testimony to its readiness to improve the standard of life of its customers through unparalleled services.

    He said: “As an organisation bound by our core values of teamwork, innovation, excellence, integrity and dependability, we are committed to building a world class utility company where performance and exceptional service delivery comes naturally.

    ”To transform the industry we are operating today, we need the support of the government at every level, including relevant stakeholders and especially our consumers that we seek to serve. Permit me to use this opportunity to appeal to the residents to take ownership of this installation to forestall any unfortunate recurrence. I call on all community leaders to work in partnership with IBEDC to nip vandalism in the bud. We all cannot move forward if nothing is done to stop this evil doing.”

    On his part, the Deputy Managing Director of IBEDC, John Darlington, while expressing his appreciation to the stakeholders, urged its customers to pay their bills and avoid short-changing the company via bypassing prepaid metres and engaging in illegal connections.

    He said: “We cannot move forward without you. We will need your support as we role out our metering scheme. As our customers, we will do everything possible to make life confortable for you.” He urged the customers to pay their bills “so we can serve you better.

    He assured that IBEDC will join hands with the government and make a difference in power distribution,

    Meanwhile, IBEDC has begun attitudinal reorientation of its workers as part of efforts to position the company for improved customer service.

    Addressing the workers and other stakeholders at a programme organised by the company in Ibadan, Darlington, said it is only the right, skilled, committed and motivated workforce that would be able to make the company’s current journey to the promise land successful.

    Quoting a former United States Defence Secretary, Mr. Donald Rumsfeld, Darlington said: “you go to war with the army you have, not army you might wish to have at a later time,” saying the statement could not be more true and precise for the journey IBEDC has just started.

    “Truly, people are our greatest asset on the journey to our defined promise land. Therefore, we have no choice other than creating teams,” he added.

    He said it would be a waste of time to articulate ideas about values and culture if the company does not model and reward behaviour that aligns with those goals, adding that IBEDC must reward good performance and as well sanction poor performance.

    One of the resource persons at the event, Dr. Tayo Aduloju, who spoke on “Imperatives for strategic transformation from public to private enterprise,” urged the workers to create a new organisational culture.

    He explained that the firm’s transformation to a private enterprise involves new rules of engagement and charged the company and its workers to map out the vision, scope and nature of transformation.

    He reminded the management and workers that, “your success in life is not based on your ability to change,  rather, it is based in your ability to change faster than your competition, customers, and business.”

    The special guest and Vice Chancellor of the University of Ibadan, Prof. Isaac Folorunso Adewole, urged the workers to be guided by the company’s mission and vision.

     

  • Inadequate funds hamper Technova’s $200m pipe mill

    Funding has stalled the implementation of a $200-million Technova pipe mill project in Ologun, Edo State, the Executive Secretary, Nigerian Content Development and Monitoring Board (NCDMB), Ernest Nwapa, has said.

    The mill is a 200,000-metric tonne per year capacity pipe mill and coating facility being constructed by Technova Africa Group (TAG) Limited. It is designed to produce cheaper wielded steel pipes for the oil and gas sector.

    TAG, an indigenous company, signed a multilevel Original Equipment Manufacturer (OEM) and service Agreement with PSL, the largest Helical Submerged Arc Welded Pipe manufacturer in India, for a fully integrated  pipe mill and coating plant in Nigeria.

    Nwapa told The Nation that though the mill was opened last year, it is yet to start operations because of finance.

    He said: “In Edo State,  a pipe mill known as Technova is in the making. It has gone beyond construction of infrastructural facilities. They are only waiting for some funding support so that they can start putting equipment and people in place.  The NCDMB wants to ensure that pipe mill is established to produce for the oil and gas industry.

    “Besides, the Board is putting in place modalities for the establishment of a brand new 250,000 metric tonnes pipe mill. These are being done to improve infrastructure, quicken operations of companies and improve the economy.”

    He said the pipe mill, which is in Abuja, has moved from one to two lines, adding that efforts are being intensified to make pipe mills effective.

    He explained that the Board was encouraging the resuscitation of old pipe mills and expansion of new ones in line with the government’s decision to develop local initiatives.

    “The country needs to progress from a level where it cannot produce some products for local needs, to a level where it can maximise its potentials for economic growth.” he said.