The Nation Newspaper

Category: Energy

  • Crude metering: Over 50% of oil firms yet to comply

    Three months after the introduction of the metering policy by the Federal Government to ensure that actual volume of crude oil production is recorded and to further entrench transparency in the sector, 15 oil companies are yet to comply with the policy, The Nation has learnt.

    The policy was introduced to clear doubts and allegations that the actual volume of oil being lifted from the oil terminals for export is not being properly captured.

    The policy, it was learnt, was not acceptable to many of the oil firms as they refused to subject their terminals for inspection and measurement of their crude oil production.

    When contacted on phone, a Consultant to the Ministry of Industry, Trade and Investment on crude oil metering policy, Yusuf Yagabi Sani, said many oil companies have not complied with the policy. Sani said only 11 out of the 26 oil firms have fully complied with the policy.

    He said the level of compliance by the International Oil Companies (IOCs) is not impressive because they are not ready to conform to the provisions of the policy.  The policy, he said, states that all metering systems used by oil companies should be verified and certified fit for usage.

    He said: “The level of compliance is not appreciable. Many foreign oil companies have not complied as expected.  Part of what we need to verify is the equipment used by the companies.

    “This is necessary to determine whether the equipment meets international standard. As far as I am concerned,  they are not ready to comply with the policy,” he said

    Also, the Director, Weights and Measures Department in the Ministry, Oluyinka Sikuade, said oil companies that have complied with the policy are not up to 12.

    Sikuade said Shell, Agip, Addax and a few others have complied with the policy in line with the government’s decision to ensure accountability in the oil and gas sector.

    He said verification of the meters used by oil companies is the main responsibility of the department, and not installation.

    “The constitution requires the Ministry‘s Weights and Measures Department to be custodian of the national primary standards to which other standards in Nigeria must be traced. The measuring instrument used for trade in the oil and gas sector must be within the maximum permissible error margin which the law recognises. We ensure that all metering systems used by the oil firms function within the allowed margin,” he said.

    Sikuade said calibration of meters is of importance to the department, adding that the companies must obtain calibration certificate from the department.

    He said the pre-shipment Act and weight and measures Act are within the metering policy, adding that the companies are required to give their terminal off-loading programmes to the department to ascertain the volume of crude oil produced.  Sikuade said there are varying degrees of punishments for companies that fail to comply with the provisions of the metering Act.

  • Ikeja DISCO needs 1351Mw to meet customers’ demand

    WHY have the distribution companies (DISCOS) not made an impact six months after their coming? It is because of inadequate power supply, says Managing Director/Chief Executive Officer, Ikeja Electricity Distribution Company (IKEDC) Mr Abiodun Ajifowobaje.

    Speaking when the Senate Committee on Privatisation visited the company yesterday, Arifowobaje said IKEDC is receiving 345 megawatt (MW) of power supply daily instead of 1351MW.

    “This shortage of 700MW places a huge strain on daily distribution,” he said, even as he decided the vandalism of the firm’s installations and facilities.

    In the last six months, Ajifowobaje said IKEDC embarked on rehabilitation of vandalised transformers, replacement of undersised overhead conductors, completion of abandoned distribution projects and reduction in estimated billing issues.

    IKEDC has also centralised its billing system to drive accuracy and introduced the Automatic Meter Reading system which drives remote access to meters for efficiency and effective monitoring.

    Arifowobaje said: “I am however happy to report that IKEDC is involved in ongoing talks with several partners to explore supply from embedded power generation, Independent Power Projects and other sources to improve supply. We are equally working on a robust metering model that will promote transparency in billing and eradicate energy theft,” he added.

    The firm, he said, is working with its technical partners, Korea Electric Power Company (KEPCO), to ensure meter accuracy and loss reduction within its network.

    Ajifowobaje said KEPCO was spearheading an exhaustive review of IKEDC’s network to achieve the introduction of effective meters as well as promote reduction of energy losses through continuing upgrade and optimisation of the company’s installations and facilities.

    “IKEDC is working with KEPCO to provide a strategic solution to metering that takes cognisance of the needs of all customers within the network. I am happy to report that with the adoption of new technology we have made substantial progress in this regard and remain committed to ensuring that all our customers are adequately metered,” he said.

    The committee Chairman Senator Gbenga Obadara, said the panel was committed to working with all stakeholders to ensure a robust power sector.

    “Our oversight function has seen us embark on visits to the various PHCN successor companies in line with our resolve to facilitate an accelerated march towards transforming the nation’s economy through uninterrupted power supply. Those visits have thrown up several issues. But I remain confident that the nation will ultimately achieve its objectives in the power sector,” he said.

    In a chat with  The Nation , he said the company has upgraded its contact centre to entertain calls from customers in the major Nigerian languages as well as forums with customers and Community Development Associations (CDAs) is indicative of a healthy development that will enhance the desired growth of the sector.

    Ajifowobaje also said the company had since the handover adopted innovative approach to achieving quick wins in the face of the challenges of inadequate power supply, vandalism, energy theft and gas shortage.

    He said: “We are working in conjunction with our technical partners to come up with a robust metering system that will serve all classes of customers effectively. This system will enhance automation on the network, eradicate the complaints of estimated billing and check energy theft being perpetrated by people tinkering with the pre-paid meters. What we are assuring our esteemed customers that our metering strategy is an ongoing project and will ensure they are adequately and efficiently metered.

    “The distribution companies are at the end of the energy value chain and can only distribute the power generated and transmitted by Gencos and Transcos. The power situation has been grossly affected by the activities of vandals on NNPC pipelines and incessant vandalisation of our facilities and installation.”

    He also noted that the company has ageing workforce, which is a challenge but noted that the utility firm plans to recruit at least 300 young Nigerians especially engineers and technicians to take over the ageing workforce.

  • Brazil firm yet to leave Nigeria

    Brazil firm yet to leave Nigeria

    THe  Brazilian state oil company Petroleo Brasileiro SA (Petrobras) is still in Nigeria, one year after it said it was leaving, it was learnt.

    Last May, Petrobras said it was divesting its interests in Chevron’s operated Agbami oil field in oil mining lease (OML) 127 and Total operated Akpo field in OML 130. It has eight per cent in Agbami and 20 per cent stake in Akpo, where it invested about $2.4 billion. Its divestment is expected to yield about $5 billion.

    The Minister of Petroleum Resources, Mrs Diezani Alison-Madueke, said in Houston, United States that the oil firm is yet to divest the assets.

    Last year, Petrobras said it decided to sell its Nigerian assets to enable it to concentrate on oil assets in Brazil, to realise the government’s self-sufficiency goal in energy.

    According to the report, “Petrobras is divesting from its Nigeria’sassets and redirecting investment towards higher-return activities, such as exploration and production to finance a five-year $237 billion capital spending plan, the world’s largest corporate investment programme, which it hopes to tripple its oil and gas production by the start of the next decade to about 5.2 million barrels of oil equivalent a day, and also help Brazil become self-sufficient in refined products as well.

    “Therefore, it has started the process to auction off its stakes in Nigerian oil fields to raise cash for domestic projects, a deal that may fetch it up to $5 billion (£3.3 billion pounds). The state-controlled company has hired Standard Chartered to run the process, which will kick off in the next two months.

    Oil production from the Agbami fields began in 2008. Output from the block is about 200,000 barrels per day (bpd) and holds estimated reserves of 900 million barrels.

    Akpo began production in 2009 and has output of 175,000 bpd of crude and condensate and nine million cubic metres of gas with reserves of about 620 million barrels of crude and condensate and more than 28 billion cubic metres of gas.

  • Schneider, Mikano to boost DISCOs’ activities

    Schneider, Mikano to boost DISCOs’ activities

    Two energy solution firms   Schneider Electric and Mikano International Limited have signed an aggrement  to boost activities of the 11 power distribution companies (DISCOs).

    The firms, at the signing of the deal in Lagos, said they  are leveraging on their successes to make equipment, such as transformers, circuit breakers, panel builders and voltage regulators available for the  power companies.

    The Vice President, Retail Business, Schneider Electric, Tonye Briggs said the partnership would help in strengthing the relationship with the DISCOs.

    Briggs said his fim  has partnered with the Federal Government to ensure stable and reliable distribution of power at the national grid, adding that partnership would help  a lot.

    He said Mikano has a wider reach in Nigeria, adding that the idea would help in improving electricity distribution and transmission in Nigeria.

    He said:  “While Schneider Electric is a global specialist in energy management, Mikano has a wider reach in Nigeria where it provides power solution apparatus to homes and industries. We are leveraging on Mikano’s huge presence in Nigeria to provide equipment to energy service companies.

    ‘’Schneider Electric is a global specialist in energy management, Mikano has a wider reach in Nigeria where it provides power solution apparatus to homes and industries. We are leveraging on Mikano’s huge presence in Nigeria to provide equipment to energy service companies, especiallythe new power investors. Through this, we would impact more on the ector. It is a case of two of the major players coming together to chieve mutual growth. The partners, power firms and consumers would benefit.

    Also, the Managing Director, Mikano International Limited, Christiane Farine said the partnership is timely, giving the on-going privatisation of the power sector.

    Farine said: “Through the partnership, we want to provide a afer, reliable and economical energy services to consumers.This ould boost the activities of the ower Holding Company of Nigeria’s (PHCN) successor compan s and the 10 National Independent Power Plants (NIPPs) when they are eventually privatised son.  Gas is not the only problem facing the power sector. There istribution and transmission challenges. Transmission should be given due consideration by the power regulators.

    “No matter the volume of electricity generated from the turbine and hydro plants, it is of no use if the transmission mechanism is not in place. Electricity must bedistributed to the consumers at the right time for growth,’’ he added.

    Farine said the firm deals in ower generation, solution, steel fabrication and heavy constru ion equipment, adding that the four areas are critical to the growth of the sector.

    He said the partnership ensures that Mikano supply critical electricity components to homes and industries for growth. He explained that high power voltage s destroyed many appliances because consumers do not have means of controlling it.

    He said the partnership was on distributorship, adding that Schneider Electric plans to establish offices in 15 cities in the country to grow the scheme. According to him, the idea would help in complementing the partnership the Schneider Electric has with the Federal Government, especially in ensuring stable and reliable distribution of power at the grid level.

  • Board, PTDF urged to build operators’ capacity

    Worried by weak capacity building mechanism and the attendant jobs’ loss among indigenous oil and gas operators, stakeholders have advised the Nigerian Content Development Monitoring Board(NCDMB) and Petroleum Trust Development Fund (PTDF) to collaborate to train players in the industry.

    The stakeholders said the level of participation by Nigerian firms in the sector, particularly in contract service retention, would be in excess of $10 billion per year, if the right capacity building programmes were in place.

    The stakeholders, amongst them, the President, International of Association Energy Economics (IAEE) Nigerian Chapter, Prof Adeola Akinnisiju and President, International Association of Drilling Contractors (IADC), Mr Sola Falodun, said billions of dollars can be generated from oil and gas services.

    Akinnisiju, said the Board is into advocacy through which it is seeking local participation in oil and gas, while PTDF empowers stakeholders to achieve results. When they work together, they would be able to compliment each other well. This would build the capacity of local operators and further give them the opportunity to compete with their foreign counterparts, he said.

    ‘’ There are huge opportunities in the sector, but that can only translate to capital gains for local operators when they equip themselves. With the right training in place, local companies should be able to handle big-ticket jobs hitherto given to foreign companies.’’

    Also, Falodun said the drive by the Nigerian Content Development Monitoring Board will attract investments to the petroleum industry if it is sustained. He said capacity building is the gateway to success in the industry, adding that the association is planning to organise skills acquisition programmes for drilling operators for growth.

  • Electricity cable thieves jailed

    Two electricity cable thieves, Hope Sukuma and Samaila Choji (both aged 23) have been sentenced by a Tinubu Magistrate court to jail terms of four years and one year respectively.

    According to the Assistant General Manager, Public Affairs, Eko Electricity Distribution Company (EKEDC), Godwin Idemudia, the jail sentences were passed on the duo for stealing and receiving  72 metres of electricity armoured cable valued at N1,400,000 belonging to EKEDC.

    He said the thieves committed the offence in December 2013 at Alaba Oniru and Jide Oki 500KVA distribution sub-stations in the Victoria Island area of Lagos.

    The presiding Magistrate, Mrs. Y. R.  Pinehero, in her judgment found Sukuma guilty of the two- count charge of felony and stealing. He was sentenced to four years imprisonment, which will however, run for a concurrent term of two years.

    Samaila Choji was found guilty of dishonestly receiving from Hope Sukuma, the stolen cable even after knowing that it was a stolen item. He was subsequently sentenced to one year imprisonment. The judgment was without options of fine.

    Commenting on the judgment, the Assistant General Manager, Idemudia said it was a welcome development that would serve as a good deterrent for other perpetrators of such criminal acts of theft and vandalism of electricity equipment.

    He also described the judgment as a vindication of workers of the company who were usually wrongly accused by some members of the public of being the brain behind vandalism of electricity equipment. He added that none of the two convicted persons was ever a member of staff of the utility firm.

  • IPMAN president seeks constant supply of products

    The newly elected president of the  Independent Petroleum Marketers Association of Nigeria (IPMAN), Elder Chinedu Okoronkwo has urged the members to work, as a team to ensure regular supply of fuel at the filling stations.

    He said he would engage all aggrieved members in a dialogue to bring sanity to the downstream petroleum sector.

    Okoronkwo, who spoke after the election of the new executives in Abuja, said under his leadership, IPMAN will improve members’ capacity for product delivery, and as well build on the achievements of his predecessors, urging members to freely relate with him to register their complaints about any misgiving.

    He said the days when the body was ridden with crisis are over, especially now that members are concerned  about ensuring free flow of petroleum products such as kerosene from depots.

    He said with the cooperation of members, the association would ensure that IPMAN’s stations are always wet with products, pledging that he will partner with the Minister of Petroleum Resources, Mrs Diezani Alison-Madueke, the Group Managing Director of the Nigerian National Petroleum Resources Andrew Yakubu and  Chief Executive of the Pipeline Products Marketing Company, Prince Haruna Momoh and other officials to deliver products to the door steps of end-users.

    Other elected national officials are: Alhaji Abubakar Maigandi Shettima, as Deputy President, Alhaji Danladi Pasali National Secretary, Mr Bola Adeleke National Treasurer, Alhaji Hammed Fashola, Assistant Secretary and Dr. Leo Nkameme National Organising Secretary.

    Others are:  Alhaji Yakubu Dimka National Auditor, Alhaji Umar Baba Kano National Legal Adviser, Chief Ezekwesili Madogana Chief Whip,  Alhaji Yakubu Sulaiman National PRO and Chief Joseph Obini as Financial Secretary.

    The elections which took place at the Command Guest House, Abuja, witnessed high turnout of IPMAN members from the 36 states,  including the Federal Capital Territory.

  • OPEC urges Nigeria, others to invest $40b upstream

    OPEC urges Nigeria, others to invest $40b upstream

    The Organisation of Petroeum Exporting Countries (OPEC) has advised  Nigeria, Libya, Algeria, and 10 other members to invest an average of between $35 billion and $40 billion in the upstream sector over the next 10 years to prevent shortfall in global crude production.

    OPEC’s Secretary Abdalla S. El-Badri, in a paper entitled: ‘Global Oil Outlook for OPEC and Non-OPEC Members,’ said a  long-term investment of over $50billion is also expected from the members, while the non-OPEC countries will invest more than $170 billion to meet demands.

    He said: ‘’In terms of the upstream, most of the investment will be made in non-OPEC countries. In the medium-term, non-OPEC members  will invest more than $170 billion each year. OPEC, on the other hand, would need to invest an average of $35 and $40 billion annually in the coming decade, and then over $50 billion annually in the long-term.

    ‘’It is important to underscore just what investments we are talking about. In OPEC’s World Oil Outlook (WOO) 2013, it is estimated that global upstream investment requirements between 2012 and 2035, are $5.2 trillion. Combined with expected requirements in the midstream and refining industries, this number approaches $8 trillion.’’

    He said OPEC liquids would increase by over 10 million barrels a day, from around 37 million in 2018 to over 47 million barrels a day  by 2035, adding that the figure is higher than the expected increase in non-OPEC liquids supply over the same period, at just under nine million barrels a day.

    ‘’ In terms of OPEC crude production, it is currently close to 30 million barrels a day. This is what is required by the market. The Organisation is making sure its consumer’s needs are met. In the medium-term, the call remains fairly steady – at around 29-to-30 million barrels a day. It means that OPEC spare capacity is expected to rise, although expectations are that this will be towards comfortable levels.’’ he added.

    El-badri said OPEC will continue to invest in existing capacity and new productions, stressing that the investments would be influenced by factors such as policies, and crude oil’ prices.

    According to him,  Brazil, Kazakhstan and other non- OPEC regions are also expected to see strong supply growth, both in the medium- and long-term.

    He said forecast on the oil glut in the third and fourth quarter of 2013 was not true, noting that supply and demand was relatively balanced during the period.  He said the need to focus on where oil supplies and long-term investments are coming from is imperative to determine the future of the market.

    He said OPEC targets stable price oil because it wants the stakeholders in the market to benefit.

    ‘’Our priority is a stable price – at a level that does not affect global economic growth and, at the same time, that allows producers to receive a reasonable income and invest in supply to meet future demand.

    ‘’Talking about the price, we also need to understand the cost of the marginal barrel. Specifically,  we asked ourselves at what price levels are expensive  projects become unworkable. It is clear that for some projects – for example, deepwater and Arctic fields, as well as most tight oil and oil sand play are expensive. ‘’ he added.

  • Electricity unions to protest casualisation

    Electricity unions to protest casualisation

    Five days after the expiration of the April 30 deadline given workers of the defunct Power Holding Company of Nigeria (PHCN) by the new power firms, Organised Labour under the aegis of the National Union of Electricity Employees (NUEE) and Senior Staff Association of Electricity and Allied Companies (SSAEAC), said it would protest any move to turn its members to casual workers.

    The President, National Union of Electricity Employees, Mansur Musa, and General  Secretary, Senior Staff Association of Electricity Employees and Allied Companies, Gbenga Ogunsegha in separate interviews with The Nation, said the protest is going to be nationwide given the fact that the firms have presence in the six geo-political zones of the country.

    Musa said the resistance is necessary to make the companies abide with globally acceptable industrial laws, adding that the union has been inundated with reports that the companies are planning to introduce casualisation through the backdoor. He said the workers would resist the idea and that  the union is working on a status report of its members, adding that the identity of the sacked workers will be made known soon.

    Musa said: ‘’ The issue of getting the identity of those that were sacked and retained after the deadline is on-going.  Very soon, we would know them. The government has outlawed casualisation. But we understand that the 15 power generation companies (GENCOs) and distribution companies (DISCOs) are planning to introduce a subtle way of casualising some of their operations.  It is illegal. We have fought it to a standstill before and would do it again.  We are waiting for updates on the status of workers. Very soon, we would know those that are retained by the firms, and their conditions of service.’

    Ogunsegha said the unions are holding consultation with one another to forestall anti-labour practices from the firms. One of such practices, he said, is the planned introduction of casualisation through the backdoor.

    ‘’ There are two categories of workers.  First, are those disengaged by the Bureau of Public Enterprises (BPE) and the management of the new power firms in November 2013. The second are those that were retained and given temporary employment by the power firms. These workers were given a deadline of six months within which the management of utility firms would  determine their manpower level.

    ‘’ The competent workers have been sacked prior to the take-over of the power firms last November. Those retained lacked technical depth the sector requires. They were retained based on their connection with government’s officials. The firms may not sack them on compassionate ground, but may convert them to casual or contract staff after determining their competence level.  It is better for them to sack, than introduce casualisation,’’ he added.

    According to him, the unions’ grouse with the GENCOs and DISCOs is non- payment of bulk rent owed the disengaged staff in December 2013, and not the severance package.  Ogunsegha said payment of the bulk rent is the responsibily of the government since they bought the assets and the liabilities of PHCN.

    He explained that bulk rent was monthly housing allowance for workers, noting that the management of PHCN saved and aggregated the payment.

    ‘’ Before privatisation, electricity workers were paid bulk rent once a year and this covered January to December.  Due to the huge volume, the management decided to pay it quarterly. Before December 2013, new investors took over the power sector and stopped the payment of bulk rent.  PHCN’s authority has saved the money for the last quarter of 2013, but the power companies refused to pay the workers. This is the problem we are having with the firms.’’ he said.

  • NERC hailed over fixed charges directive

    The directive that power distribution companies should stop collecting the N750 fixed charges from consumers who do not enjoy power supply for a cumulative period of 15 days will boost the confidence of consumers, stakeholders have said. They include the Director, Infrastructural Development, Manufacturers Association of Nigeria (MAN), Reginald Odiah and former Chairman, Community Development Council (CDC) in Surulere, Lagos, Olukayode Adeyemi

    Odiah said the new power investors and NERC are on the path of restoring confidence into the sector by improving electricity supply. He said consumers’ confidence has waned, following the epileptic power supply and inability to resolve the problem.

    He said privatisation and policies introduced by the Commission to address billing problems are good ones capable of restoring confidence in the industry.

    The investors, and other stakeholders in the sector are making efforts to proffer solutions to the lingering power problems, adding that the directive is a relief to consumers.

    He said: ‘’ With time, the sector would get over infrastructural challenges facing it and produce the required energy for growth.  Once the gas problem is solved, the turbines would help in improving electricity generation. Thereafter,  distribution companies would supply electricity with ease.’’

    Also, Adeyemi said huge charges is one of the problems facing consumers, noting that NERC has boosted industry’s confidence by stopping DISCOs from collecting fixed charges from consumers who do not enjoy electricity for sometime.

    He said illegal disconnection and irregular power supply are a big problem in the sector, adding that the development made the residents of Iponri Estate and its environs to organise a protest least week.

    ‘’ We have made up our mind to stop illegal disconnection in the estate and other areas. We would resist  any official who disconnects light illegally in the area. We have reported the matter to the District Manager of Eko Electricity Distribution Company (EKEDC) in Masha. We would not hesitate to deal with the company‘s staff who disconnects our light wrongly, ”he added.

    He said residents spend about N9.5million monthly to fuel their generators, adding that the problem is affecting them.He said the cost of providing energy is high, adding that it impacted  negatively on cosnumers.