The Nation Newspaper

Category: Energy

  • PENGASSAN, NUPENG to protest refineries’sale

    PENGASSAN, NUPENG to protest refineries’sale

    Any attempt by the Federal Government to revisit the privatisation of refineries in the future would be resisted by the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) and the National Union of Petroleum and Natural Gas Workers (NUPENG), PENGASSAN’s spokesman, Oluwaseyi Gambo has said.

    He told The Nation that the two unions were not unaware of the undercover moves by the government to re-open the issue of selling Kaduna, Warri and Port Harcourt 1&2 refineries in the future, and we were ready to resist such ideas.

    He said the two unions have agreed to engage the government in ideological battle, in case it revisits the issue in the near future, adding that the bodies would organise a roundtable discussion, as well as set conditions for the government on the issue.

    He called for the evaluation of the assets of the refineries by an independent organisation and listing of the refineries’ assets on the floor of the Nigerian Stock Exchange (NSE), making Nigerians eligible to buy shares in the refineries. These are the conditions the two bodies are planning to set before the government, in the event that such idea comes up again, he said.

    Others are ensuring that the government, the core investors and the two unions supervise the pre and post privatisation process, as well as guaranteeing the jobs of workers of the two unions.

    ‘’ The two unions: NUPENG and PENGASSAN that are operating in these refineries on behalf of Nigerians must be on the committee that would decide on the privatisation model to be used, should the issue come up in the future. We would ensure that Nigerians have greater participation in the operation of these national assets by way of public quotation on the Stock Exchange.

    ‘’ We would jointly evaluate the worth of the assets so that Nigerians would not be short-changed as there are valid reasons that the refineries would be sold in the future to government’ cronies. We would like to know the nature of the core investors, their capacity to turn around the refineries in case the idea is re-appears on the radar of the government.’’

    He said the sale of Eleme Petrochemical Limited was shrouded in secrecy, adding that the two unions do not want that to happen to the refineries in the event that the government offers them for sale in the future.

    Security of workers, he said, must be ensured to encourage economic growth.

    ‘’We have to agree on the welfare of our members who have been on the front-line risking their lives in the hydro-carbon environment for years,’’ he added.

  • National Assembly raises hope on PIB

    National Assembly raises hope on PIB

    The National Assembly has raised hope on the passage of the Petroleum Industry Bill (PIB).

    Its Committees on Gas Resources, Upstream, and Downstream at the Nigerian Oil and Gas Conference in Abuja, said they were holding technical sessions on the bill to pass it into law. They spoke during a discussion on the ‘’Petroleum Industry Bill, its Passage and implementation- How will it move the Nigerian oil and gas sector to the next level? ’’ at the just concluded Nigerian Oil and Gas Conference in Abuja.

    They were represented by their Chairpersons, Nkechi Nwogu (Gas Resources, Senate), Emmanuel Paulker (Upstream, Senate) and Muraina Ajibola (Upstream, House of Representatives) at the session.

    The sessions, they said, were looking at the interests of stakeholders, such as the indigenous operators, International Oil Companies (IOCs), oil producing communities, impact and evaluation programmes, to move the industry forward.

    Nwogu said the sessions were examining issues hindering the passage of the bill, as well as helping to address them. She said the three committees were analysing the bill, improving its contents to boost performance of the industry.

    She said: “The bill has gone through public hearing and second reading. We, the (Chairmen), have gone to our different committees to hold technical sessions. In my committee, we are trying to see whether the contents of the gas are good enough or not. We are comparing the developments in the gas sector to what the government has proposed to be the best practices.

    “We are looking at gas production and exploration, and what PIB is talking about it. How would investors choose Nigeria as gas market’s destination ahead of other countries, is one of the questions we are asking ourselves at the committee. PIB is everybody’s concern since it is the only way of redefining the oil and gas operations. We would try and pass the PIB, even though there are other important issues waiting for approval. One of them is the issue of 2014 budget.’’

    Ajibola said a sub-committee had been constituted by the House to hold a technical session on PIB, adding that the Committee was looking at the upstream as it relates to PIB.

    He said the interests of local operators would be galvanised when the bill is passed.

    ‘’By paying attention to technical details of the bill, we hope to come out with a bill that Nigerians would be proud of; a bill that would protect and promote investment in the oil and gas sector and further ensure Nigeria is in a good position in Africa.

    “We know that oil and gas investments are at a standstill because the bill has not been passed. We are aware that Ghana, Benin Republic and Uganda are joining the league of oil producing nations soon. They have just discovered oil. The development is going to have a far-reaching consequence on Nigeria in the future if we address the problems in the industry and pass the bill.’’

    According to Paulker, the PIB is of importance to the National Assembly, going by the efforts being made to ensure its passage.

    Paulker said the Senate would do everything possible to pass the bill and further re-define the oil and gas.

    He said with the technical session in progress, Nigeria is getting to a level where the bill would be passed.

  • Ikeja Disco invests N600m in power supply

    Ikeja Disco invests N600m in power supply

    •Ibadan firm restores metering scheme

    To improve power supply, the Ikeja Electricity Distribution Company (IKEDC) has injected about N600million into its operation.

    Its Managing Director/Chief Executive Officer, Abiodun Ajifowobaje, said at the firm’s customers’ forum in Lagos that this was a quick intervention to ensure short-term customer satisfaction.

    The management, he said, was continuing with its long term plan for sustainable electricity supply.

    He explained that the essence of the forum was to create mutual interaction between the firm and its customers, and to identify areas that would enable the company serve the customers better.

    He said the forum would be held regularly as a communication window and feedback mechanism.

    He said: “We conduct customers’ forum in all our business units so that we can use the opportunity to meet with them and tell them what we are doing and our plans for the future. We also want to create a two-way mutual interaction aimed at finding ways to improve service and serve our customers better.

    “Our board under the quick win-win intervention, approved about N600 million for us to do all projects including metering, inauguration of on-going transformer projects, replacement of vandalised transformers, re-metering and also do some overhead line clearance, which often cause network disability.”

    Ajifowobaje also said about 30 transformers had been installed to cushion electricity supply, and about 115 transformer installation projects were on-going and would be completed within the next one month.

    He said about 30 transformers parked up, while about 42 were vandalised before the new management took over last November, adding that all the bad transformers had been repaired.

    “The Board has approved installation of some transformers under what we call ‘win-win’ approach to address customers’ complaints and to replace all the bad transformers. Going forward, we will be repairing all bad transformers and reinstalling them, as well as completing all pending transformer installation projects in all sites within the network. With all these, we assure customers within our network of stable power supply when completed.

    “Our technical partners have commenced evaluation of meter system and very soon, we will come out with very robust metering system, but pending the completion of this arrangement, the company is installing meters for customers who have paid for meters.

    “About 6,000 customers have paid for prepaid meters and we have commenced metering them, while we also target about 7,000 customers to be metered by next month,” he said.

    He appealed to customers to alert the management of any suspicious movement from anybody, adding that protecting the equipment would help to ensure stable power supply.

    He said the management of IKEDC sought the assistance of the Nigerian Army, State Security Service, Nigeria Security and Civil Defence Corps, Nigerian Police and the state government in protecting its equipment.

    Meanwhile, the Ibadan Electricity Distribution Company (IBEDC) has revitalised its Credited Advance Payment for Metering Implementation (CAPMI) scheme to hasten the metering of customers’ houses.

    Its spokesman, Tokunbo Peters, explained that under the scheme, which was first introduced by the Nigerian Electricity Regulatory Commission (NERC), customers who make advance payment for meters would be attended to within 45 days from the date of payment.

    The amount advanced by customers for the meter would be refunded with a nominal interest over a period of not more than three years through rebate in the monthly fixed charge component of their electricity bills, he said.

    He encouraged customers on estimated billing and prospective ones to visit their office and apply.

    “The revitalisation of CAPMI scheme is a demonstration of the company’s commitment to metering all its customers and ultimately eradicating estimated billing in its entire franchise area,” he said.

    Ibadan DISCO area is Ogun, Oyo, Osun and Kwara states, as well as parts of Ekiti, Kogi and Niger states.

     

  • Firms seek govt’s intervention in deepwater lease renewal

    Firms seek govt’s intervention in deepwater lease renewal

    International Oil Companies (IOCs) have called for a review of the 20-year grace for renewing deepwater acreage leases.

    The Vice President, Nigeria-Gabon Shell Upstream International, Markus Droll, said during the presentation of a paper at the just-concluded Nigerian Oil and Gas Conference in Abuja that the review had become imperative to ensure oilfirms’ survival.

    According to operators, it takes between 10 and 15 years to develop a deepwater acreage and about 15 years to recover costs of investment; therefore, to renew deepwater lease within 20 years, as stipulated by the guidelines, is not viable as operators of such fields are yet to recoup their investments.

    Droll, called on the government to revisit lease renewal periods of deep-water assets, adding that the deep-water acreage has a shorter window compared to the period in which it is developed into a more productive usage.

    He said: ‘’We see that there are many leases that will expire in a few years’ time. Given the number of time required for developing resources and then the time required for recovering costs, the industry often needs 10-15 years or more to make confident investment decisions, especially when we are talking about green-field type of developments. I do believe that the industry’s stakeholders, including companies and regulators need to work together productively to avoid this issue stifling investments into perfectly good projects.’’

    Droll also identified other challenges facing IOCs and local operators, including oil theft, security, funding, production leases and fiscal environment. He added that despite these challenges, Shell has contributed in various ways to advance the growth of the industry.

    He said: “A difficult and growing problem is the issue of oil theft. 2013’s production was badly affected by the direct impact of thieves placing illegal oil tapping connections on oil infrastructure. In SPDC alone, we removed around 300 such connections during the year.

    “Security is a concern for many of us on a daily basis. Over the years, the industry has learned and adapted well to the threats, but it comes at a cost. It is hard to put an accurate figure on this issue, but clearly both development and then operating costs are substantially higher than in many other operating environments due to this issue.

    “On funding, our belief is that for Nigeria to fulfill its oil and gas potential, more funding is required by the industry than we have seen in recent years. We are in a high cost environment, and in order to collectively climb towards significantly higher production levels, we need to find better ways to fund development. Decline rates in the industry can be as high as 15-20 per cent, and you will appreciate to simply replace natural production decline rates requires much of the funding that is currently available.”

    On fiscal environment, he said it was important that fiscal environments are reviewed to maintain a fair investment climate for all stakeholders in the industry. “Fiscal stability and predictability are absolutely key in ensuring investors of all sizes can commit confidently, government revenues can be forecast reliably, and a capable service industry is maintained with steady workload. We cannot succeed on this; my fear is that we will not attract as much capital to Nigeria as we need,” he added.

  • Local content: Erring firms will face sanction, says Board

    Local content: Erring firms will face sanction, says Board

    The Nigerian Content Development and Monitoring Board (NCDMB) will sanction any firm that flouts the local content regulations, its Executive Secretary, Ernest Nwapa has warned.

    Nwapa said in Abuja, that those who fail to comply with the Nigerian Content Act would not go scot free.

    He said work stoppage would be applied to ensure compliance with the Act, noting that the Board had dialogued, corrected and cautioned non-compliance in the past.

    He said the NCDMB had given operators adequate opportunity to comply, and that it would ensure the the law was complied with.

    Nwapa said the operators were given enough time to adjust to meet NCDMB’s goals.

    He said the Board focuses on consolidating its Capacity Development Intervention (CDI) initiatives, and creating awareness on the Nigerian Content.

    He lamented the slow pace of development of the manufacturing capacity of indigenous players, stating that if the manufacturing capacity of the firms is not developed, all the achievements recorded under Local Content would fizzle out.

    According to Nwapa, the performance level of indigenous operators, in engineering is 90 per cent, fabrication – 60 per cent, while manufacturing is 10 per cent.

    “If the manufacturing capacity of the indigenous players is not raised, we will not get the much needed growth of Nigerian content,” he said.

    He said $5 billion (N800 billion) had been invested in the development of new yards and upgrade of existing ones since the introduction of the Nigerian Content initiative, adding that the solution to growing indigenous capacity through local content lied in taking and keeping value.

    According to him, Nigeria should focus on developing indigenous capacity instead of looking for assistance, adding that the country has lost a lot of money, as a result of failure of companies to develop local capacity.

  • ‘How to meet 10,000Mw power target’

    ‘How to meet 10,000Mw power target’

    To meet the 10,000 megawatts (Mw) of electricity target by next year, the Federal Government requires about three million standard cubit feet of gas daily (mmscf/d) to fire the turbines across the country, experts have said.

    The Chief Executive Officer, Niger Delta Exploration and Production Company (NDEPC), Lai Fatona, and the President, Petroleum and Technology Association of Nigeria (PETAN), Emeka Ene, said the only viable option to improve electricity supply is to provide the plants with the required volume of gas.

    Fatona said the cubit of gas needed to place the plants in utmost capacity is in millions, adding that 200,635 standard cubit feet of gas is needed per day to produce 1,000 megawatts, while 2.635million standard cubic feet of gas per day would give the country 10,000 megawatts of electricity.

    He said: ‘’10,031 standard cubit of gas would produce 50megawatts; 20,063 standard cubit feet of gas would provide 100 megawatts; and 200,635 standard cubic feet of gas would be needed to generate 1,000 megawatts. To generate 10,000 megawatts, the power plants would need 2.635 standard cubit of gas.’’

    He said power generation companies must access gas constantly, if they want to perform optimally. He explained that infrastructure is inhibiting the growth of the power sector, arguing that inability to address the problem is affecting generation and distribution.

    Investment in infrastructure, he said, requires a paradigm shift to enable the government to meet the electricity needs of its people.

    Fatona said power firms must be discouraged from fixing the price of gas if the sector would record growth.

    ‘’Infrastructure is the major problem in the sector. As a way of addressing the problem, the utilities firms must be prevented from fixing the price of gas. They have no right fixing the price. The time has come for the companies to completely hand-off such responsibilities. They need to allow people to invest in gas infrastructure. When this happens, the firms would not have problems accessing gas for operation.’’ he added.

    Ene said 80 per cent of the power plants are gas-based, stating that they need un-impeded access to gas to survive. He said each of the turbines need certain amounts of gas to function well since they have different capacities. He said the turbines are designed to meet certain production targets, stressing that gas is critical to their success.

    He said there is enough installed capacity in power plants to increase electricity generation from 6,000 to 10,000 megawatts if enough gas can be supplied.

    He said: “What I know is that millions of standard cubit of gas would be needed by the turbines to function well. Due to the complex nature of their production, the turbines need volumes of gas to survive.”

    He advised the government and private operators to help in fast-tracking gas projects across the country, saying that such investment would boost the power sector operation.

     

  • Firms seek govt’s intervention in deepwater lease renewal

    Firms seek govt’s intervention in deepwater lease renewal

    International Oil Companies (IOCs) have called for a review of the 20-year grace for renewing deepwater acreage leases.

    The Vice President, Nigeria-Gabon Shell Upstream International, Markus Droll, said during the presentation of a paper at the just-concluded Nigerian Oil and Gas Conference in Abuja that the review had become imperative to ensure oilfirms’ survival.

    According to operators, it takes between 10 and 15 years to develop a deepwater acreage and about 15 years to recover costs of investment; therefore, to renew deepwater lease within 20 years, as stipulated by the guidelines, is not viable as operators of such fields are yet to recoup their investments.

    Droll, called on the government to revisit lease renewal periods of deep-water assets, adding that the deep-water acreage has a shorter window compared to the period in which it is developed into a more productive usage.

    He said: ‘’We see that there are many leases that will expire in a few years’ time. Given the number of time required for developing resources and then the time required for recovering costs, the industry often needs 10-15 years or more to make confident investment decisions, especially when we are talking about green-field type of developments. I do believe that the industry’s stakeholders, including companies and regulators need to work together productively to avoid this issue stifling investments into perfectly good projects.’’

    Droll also identified other challenges facing IOCs and local operators, including oil theft, security, funding, production leases and fiscal environment. He added that despite these challenges, Shell has contributed in various ways to advance the growth of the industry.

    He said: “A difficult and growing problem is the issue of oil theft. 2013’s production was badly affected by the direct impact of thieves placing illegal oil tapping connections on oil infrastructure. In SPDC alone, we removed around 300 such connections during the year.

    “Security is a concern for many of us on a daily basis. Over the years, the industry has learned and adapted well to the threats, but it comes at a cost. It is hard to put an accurate figure on this issue, but clearly both development and then operating costs are substantially higher than in many other operating environments due to this issue.

    “On funding, our belief is that for Nigeria to fulfill its oil and gas potential, more funding is required by the industry than we have seen in recent years. We are in a high cost environment, and in order to collectively climb towards significantly higher production levels, we need to find better ways to fund development. Decline rates in the industry can be as high as 15-20 per cent, and you will appreciate to simply replace natural production decline rates requires much of the funding that is currently available.”

    On fiscal environment, he said it was important that fiscal environments are reviewed to maintain a fair investment climate for all stakeholders in the industry. “Fiscal stability and predictability are absolutely key in ensuring investors of all sizes can commit confidently, government revenues can be forecast reliably, and a capable service industry is maintained with steady workload. We cannot succeed on this; my fear is that we will not attract as much capital to Nigeria as we need,” he added.

  • National Assembly raises hope on PIB

    The National Assembly has raised hope on the passage of the Petroleum Industry Bill (PIB).

    Its Committees on Gas Resources, Upstream, and Downstream at the Nigerian Oil and Gas Conference in Abuja, said they were holding technical sessions on the bill to pass it into law. They spoke during a discussion on the ‘’Petroleum Industry Bill, its Passage and implementation- How will it move the Nigerian oil and gas sector to the next level? ’’ at the just concluded Nigerian Oil and Gas Conference in Abuja.

    They were represented by their Chairpersons, Nkechi Nwogu (Gas Resources, Senate), Emmanuel Paulker (Upstream, Senate) and Muraina Ajibola (Upstream, House of Representatives) at the session.

    The sessions, they said, were looking at the interests of stakeholders, such as the indigenous operators, International Oil Companies (IOCs), oil producing communities, impact and evaluation programmes, to move the industry forward.

    Nwogu said the sessions were examining issues hindering the passage of the bill, as well as helping to address them. She said the three committees were analysing the bill, improving its contents to boost performance of the industry.

    She said: “The bill has gone through public hearing and second reading. We, the (Chairmen), have gone to our different committees to hold technical sessions. In my committee, we are trying to see whether the contents of the gas are good enough or not. We are comparing the developments in the gas sector to what the government has proposed to be the best practices.

    “We are looking at gas production and exploration, and what PIB is talking about it. How would investors choose Nigeria as gas market’s destination ahead of other countries, is one of the questions we are asking ourselves at the committee. PIB is everybody’s concern since it is the only way of redefining the oil and gas operations. We would try and pass the PIB, even though there are other important issues waiting for approval. One of them is the issue of 2014 budget.’’

    Ajibola said a sub-committee had been constituted by the House to hold a technical session on PIB, adding that the Committee was looking at the upstream as it relates to PIB.

    He said the interests of local operators would be galvanised when the bill is passed.

    ‘’By paying attention to technical details of the bill, we hope to come out with a bill that Nigerians would be proud of; a bill that would protect and promote investment in the oil and gas sector and further ensure Nigeria is in a good position in Africa.

    “We know that oil and gas investments are at a standstill because the bill has not been passed. We are aware that Ghana, Benin Republic and Uganda are joining the league of oil producing nations soon. They have just discovered oil. The development is going to have a far-reaching consequence on Nigeria in the future if we address the problems in the industry and pass the bill.’’

    According to Paulker, the PIB is of importance to the National Assembly, going by the efforts being made to ensure its passage.

    Paulker said the Senate would do everything possible to pass the bill and further re-define the oil and gas.

    He said with the technical session in progress, Nigeria is getting to a level where the bill would be passed.

  • Ikeja Disco invests N600m in power supply

    •Ibadan firm restores metering scheme

    TO improve power supply, the Ikeja Electricity Distribution Company (IKEDC) has injected about N600million into its operation.

    Its Managing Director/Chief Executive Officer, Abiodun Ajifowobaje, said at the firm’s customers’ forum in Lagos that this was a quick intervention to ensure short-term customer satisfaction.

    The management, he said, was continuing with its long term plan for sustainable electricity supply.

    He explained that the essence of the forum was to create mutual interaction between the firm and its customers, and to identify areas that would enable the company serve the customers better.

    He said the forum would be held regularly as a communication window and feedback mechanism.

    He said: “We conduct customers’ forum in all our business units so that we can use the opportunity to meet with them and tell them what we are doing and our plans for the future. We also want to create a two-way mutual interaction aimed at finding ways to improve service and serve our customers better.

    “Our board under the quick win-win intervention, approved about N600 million for us to do all projects including metering, inauguration of on-going transformer projects, replacement of vandalised transformers, re-metering and also do some overhead line clearance, which often cause network disability.”

    Ajifowobaje also said about 30 transformers had been installed to cushion electricity supply, and about 115 transformer installation projects were on-going and would be completed within the next one month.

    He said about 30 transformers parked up, while about 42 were vandalised before the new management took over last November, adding that all the bad transformers had been repaired.

    “The Board has approved installation of some transformers under what we call ‘win-win’ approach to address customers’ complaints and to replace all the bad transformers. Going forward, we will be repairing all bad transformers and reinstalling them, as well as completing all pending transformer installation projects in all sites within the network. With all these, we assure customers within our network of stable power supply when completed.

    “Our technical partners have commenced evaluation of meter system and very soon, we will come out with very robust metering system, but pending the completion of this arrangement, the company is installing meters for customers who have paid for meters.

    “About 6,000 customers have paid for prepaid meters and we have commenced metering them, while we also target about 7,000 customers to be metered by next month,” he said.

    He appealed to customers to alert the management of any suspicious movement from anybody, adding that protecting the equipment would help to ensure stable power supply.

    He said the management of IKEDC sought the assistance of the Nigerian Army, State Security Service, Nigeria Security and Civil Defence Corps, Nigerian Police and the state government in protecting its equipment.

    Meanwhile, the Ibadan Electricity Distribution Company (IBEDC) has revitalised its Credited Advance Payment for Metering Implementation (CAPMI) scheme to hasten the metering of customers’ houses.

    Its spokesman, Tokunbo Peters, explained that under the scheme, which was first introduced by the Nigerian Electricity Regulatory Commission (NERC), customers who make advance payment for meters would be attended to within 45 days from the date of payment.

    The amount advanced by customers for the meter would be refunded with a nominal interest over a period of not more than three years through rebate in the monthly fixed charge component of their electricity bills, he said.

    He encouraged customers on estimated billing and prospective ones to visit their office and apply.

    “The revitalisation of CAPMI scheme is a demonstration of the company’s commitment to metering all its customers and ultimately eradicating estimated billing in its entire franchise area,” he said.

    Ibadan DISCO area is Ogun, Oyo, Osun and Kwara states, as well as parts of Ekiti, Kogi and Niger states.

  • The other side of fuel scarcity

    The other side of fuel scarcity

    In the last two weeks, the public has virtually been going through hell getting fuel, despite the claim of the Nigerian National Petroleum Corporation (NNPC) that there is enough stock in circulation. Is it a case of hoarding by retail outlets? Is it sabotage of the government’s efforts or operational hiccups? Assistant Editor EMEKA UGWUANYI reports.

    OR the Nigerian National Petroleum Corporation (NNPC), it was a testy two weeks. Fuel scarcity virtually paralysed parts of the country despite its claim that there is enough stock to go ground. As the country seems to be getting over the crisis, it is not clear how long the respite will last because many outlets are still not selling

    Investigation by The Nation revealed that while Lagos residents suffered the scarcity, many filling stations, including those belonging to major and independent oil marketers, had stocks, but refused to sell to create artificial scarcity to enable them sell above the N97 per litre pump price. They opened at night when they were sure that the regulatory agencies were not on duty and sold at between N110 and N120 per litre and above. For those with jerry cans, some stations collected extra N500 to fill 25-litre cans.

    The question is:Why should these retail station owners engage in such malpractice when the product was bought at the normal price, and will attract subsidy reimbursement from the government?

    The Department of Petroleum Resources (DPR), experts said, also needs to wake up to its responsibility and ensure that in such situations, even if they entail working beyond the normal working hours, appropriate punishment should be meted to those marketers that tend to disrupt economic activities by creating artificial scarcity, such as hoarding.

    Operating licences of such marketers can as well be revoked or retail stations found flouting the guidelines closed for a reasonable period, they added.

    They also added that the regulators should allow the government concentrate on how to tackle and eliminate crude and product theft and pipeline vandalism. Recently, the NNPC said it was deploying horizontal directional drilling (HDD) technology to solve the continual pipeline vandalism at Arepo in Ogun State and Ije-Ododo in Lagos.

     

    How the fuel scarcity battle was fought

    The Executive Director, Commercials, Product and Pipeline Marketing Company (PPMC), Mr. Gbenga Komolafe, told The Nation that the scarcity, which he described as artificially-induced, was an embarrassment to the government and because of that, the Minister of Petroleum Resources Mrs. Diezani Alison-Madueke, directed him to relocate to Lagos with a mandate to dismantle the queues and eliminate the scarcity within 48 hours.

    He said: “The government is concerned and worried about the supply shortage situation in Lagos and to that extent, the Minister of Petroleum Resources directed that as the Executive Director, Commercial, that I should temporarily relocate to Lagos despite my busy schedule to ensure that the queue situation is dismantled. Arising from that directive, I arrived in Lagos on Monday. The first thing I did on getting to Lagos was to contact all the stakeholders in the supply-chain.

    Ordinarily, most people think that the job of supply of petroleum is limited to the NNPC and the major marketers, but the truth of the matter is that the supply chain (making petroleum products available to the populace) involves the NNPC, major marketers and other marketers, including depot owners.

    Under the supply arrangement, the NNPC is expected to supply about 50 per cent of the national requirement as approved by the PPPRA through its marketing operational arm – the PPMC, while the other marketers, supply the balance.

    “That has been the arrangement and suddenly, the nation noticed disruption in supply that was characterised by the queues in some cities, including Lagos and Abuja. The Abuja supply shortage started around the commencement of the centenary celebration and on the directive of the minister, NNPC and other stakeholders rose to the situation and were able to contain the situation before we witnessed the shortage in Lagos and the ministerial directive was that I should come and coordinate the resolution of the problem.”

     

    NNPC’s strategy

    He continued: “On arrival in Lagos, I quickly contacted all the relevant parties, including the Major Oil Marketers Association of Nigeria (MOMAN) led by its Executive Secretary, Mr. Obafemi Olawore, representatives of independent marketers, officials of the PPMC, mainly depot managers, vessel receipt programming managers and officials of NNPC Retail.

    “From the Monday night, we put in strategic measures aimed at quickly resolving the problem and we gave ourselves a deadline of 48 hours to clear the queues starting from Tuesday. We started by embarking on intensive monitoring of the various outlets in Lagos and continued with it till Thursday while monitoring discharge of vessels at various terminals and the distribution of products.”

    He said the strategy team set up comprised representatives of PPMC, MOMAN, Independent Petroleum Marketing Association Nigeria (IPMAN) and NNPC Retail because fuel supply is the responsibility of all stakeholders in the downstream, adding that at the end of each day, they held a meeting to assess the impact of what we have done.

    “Part of the reason for monitoring was to establish reason for the sudden queues and try to address such issue with the ultimate aim of dismantling the queue. One of the things we established is that the queues witnessed in Lagos, had with attitudinal problems of some Nigerians, in the sense that we experienced an abusive process that, ordinarily, should not arise in the process of petroleum products retailing and dispensing.

    “People were apprehensive based on the level of information they have that probably there was not enough supply and people tend to buy more than they need stockpile them. We witnessed that and can substantiate that with a number of cases.

    “On the supply side, all the jetties are wet as the BOB, Capital Oil and New Atlas Cove Jetty, among others. They have vessels discharging there. There is no reason for panic-buying by the public.

    “This is aside other marketers that are doing something to bring their cargoes and these will neutralise any queue that may remain,” Komolafe said.

    He said between Tuesday and Sunday, some vessels, including Alizea (22,000 metric tonnes) received about 30 million litres. Others were Ocean Centuria, NIPCO (22 million litres); United Enterprises (22 million litres), Conoil 22 million litres, bringing the total volumes distributed to 96 million litres.

    He said this week, NNPC would bring in three cargoes totalling 90MT while Conoil will bring in another 22 million litres, Mobil 18 million litres and NIPCO another 22 million litres aside what the independents and depot owners will bring in.

    Mrs. Alison-Madueke said the Federal Government is committed to ensuring that the country is wet with petroleum products, adding that the ministry had sustained this feat in the past three years and that nobody or group would distract it from this important national assignment.

    She said she would ensure that the Petroleum Products Pricing Regulatory Agency (PPPRA) maintain strict internal control and processes on import allocation and subsidy payments.

    Mrs Alison-Madueke on Saturday and Sunday inspected filling stations in Lagos to find out how the scarcity problem was tackled, know the level of supply and establish the cause of the problem. She alleged that diversion of products by petroleum truck drivers as what contributed to the scarcity. She said products don’t reach their designated destination, assuring that she would address the issue. She was satisfied that the matter had been solved.

    She also restated her commitment to collaborating with the military personnel to fight other acts of sabotage, such as crude and products theft, which have grave economic impacts on the economy.

    Part of the collaboration led to the arrest of some oil thieves. For instance, the spokesman of the military Joint Task Force (JTF) charged with stemming the oil theft scourge in the Niger Delta region, Lt.-Col. Onyema Nwachukwu, last year said the taskforce arrested 29 alleged oil thieves and destroyed 127 illegal refineries in the region.

    He explained that in Bayelsa State, troops of the 343 Regiment of the JTF in southern Ijaw Local Government Area clamped down on 98 illegal crude oil distillation sites, which were operating with 119 illegal distillation tanks and 37 large open wooden boats (Cotonou boats) laden with stolen crude oil and illegally-distilled automated gas oil (AGO).

    Nwachukwu added that men of the 29 Battalion and the Gun Boat Patrol Company also arrested a barge with three crew members and a vessel christened MT Tora Eagle with 11 crew members in Bodo waterways and Akassa creek in Rivers and Bayelsa states.

    He said: “The barge was intercepted while conveying some quantity of illegally sourced crude oil, while the vessel was laden with 3,600 drums of stolen petroleum product. The troops also destroyed five illegal crude oil distillation sites and 10 Cotonou boats filled with stolen crude oil along Lewe, Bodo, Elem Sagangama, Oluwasiri and Bodo West in Rivers State.”

    He said the JTF’s Operation Pulo Shield, 19 and 3 Battalions’troops covering Edo and Delta states scuttled 24 illegal oil distillation camps and 73 Cotonou boats. Thirty-one of such boats were arrested at an illegal crude oil loading point close to an abandoned oil well in Warri North, while 27 of the arrested boats were intercepted in Egara Creek along the NNPC pipeline in Warri South Local Government Area.

    “The operation also swept through Ajide, Lagos; Makara, Egwu Aghara watersides in Warri-North, Warri North-West, Warri South West and Ethiope West Local Government areas of Delta, where oil stealing was also found to be thriving.

    “The outfit intercepted 61 pieces of 75 HP speed boats and a truck laden with 33,000 litres of AGO while they were still lifting the stolen products. Five hundred and two drums, 22 steel tanks, four plastic surface tanks, 77 metal drums laden with stolen crude oil and illegally distilled AGO and four pumping machines used by the oil thieves were also seized during the operations,” Nwachukwu added.