The Nation Newspaper

Category: Energy

  • Forte Oil rebrands lubricant

    Nigeria’s energy solution provider, Forte Oil Plc has rebranded its new VISCO 2000.

    The launch, coincided with the unveiling of Tiwa Savage as the company’s new Ambassador in Lagos, was one of the company’s innovative ways of enhancing performance.

    Speaking at the event, the Company’s Group Chief Executive Officer, Akin Akinfemiwa said the lubricant was produced to offer automobile and generator’ users quality services.

    He said the processes and formulations of the lubricant was of high standards, adding that the company would take advantage of its over 500 retail outlets and authorised lubricant distributors nationwide to grow the product.

    He said the company was spurred by the need to promote local content initiatives, as evident by the production and marketing of its range of energy-solution products and services. He said Nigerians have important roles to play in driving the local content policy by patronizing products and services coming from the oil and gas sector.

    According to him, the company takes local content value into consideration when producing energy solution products, urging Nigerian to assist the growth of indigenous oil and gas operators.

    He said the company has metamorphosed from British Petroleum (AP) to African Petroleum to Forte Oil, adding that its evolution has been historical and challenging.

    The company, he said, has experienced transformation in areas such as philosophy and processes, adding that the development has endeared its services to people in Nigeria and beyond.

    He said: “At Forte we are committed to excellence and quality, we do our things in a peculiar way that make us stand out as a brand. Our core values are being committed, openness, responsiveness and respect as seen in our activities at both the downstream and upstream segment of the sector.’’

    Also, the Company’s Head Product Marketing, Bayo Akinwunmi said Forte Oil has rebranded its processes and philosophy to achieve growth.

    ‘’Our heritage is with the British Petroleum. We are still blending our products under BP. We have fact Standard Organisation of Nigeria (SON) certification which tallies with the International Standard organization (ISO) certification. This has enhanced the company’s profitability,” he added.

  •  Ikeja power warns cable vandals

    The Business Manager, Ikeja Business Unit of Ikeja Electricity Distribution Company (IKEDC), Mr. Lateef Olaleye, has warned those behind the incessant vandalism of electric cables and accessories in his network to desist or meet their waterloo.

    The Senior Manager, Public Affairs, of the Business Unit, Rotimi Afolayan, said Olaleye described the cable thieves and their sponsors as vermins who are not fit to live in any decent society, adding that the company would soon put in place sterner measures that would make it very difficult for the vandals to tamper with its installations.

    Olaleye, who was alarmed at the recurring rate of the vandalism of the company’s transformer distribution substations in the last few weeks, said that such acts were nothing but sabotage because no person in his right senses would want to risk his life by cutting and taking away live electrical materials that would at the end of the day earn them less than N50, 000 in the market.

    Olaleye, who spoke at an enlarged meeting of the management and staff of the Business Unit, including the service managers and their distribution and marketing managers, directed the undertakings’ staff to enlighten their customers to be more vigilant over electrical installations in their areas.

    He explained that the security of electricity facilities is not the duty of only the new owners of the power companies but everyone.

    He said within the last one month, three substations had been vandalised. “As I am speaking to you, I just received a call that our Emmanuel 500kVA substation at Maryland, an area that is very close to the Ikorodu express, has been vandalised,” he said warning that this wanton destruction of the company’s facilities just has to stop.

     

  • Marketers allege inadequate supply of products

    The Nigerian National Petroleum Corporation (NNPC) is yet to fix the Ijegun pipeline supplying products to Mosimi from Atlas Cove, weeks after it was vandalised, the Zonal Trustee, Independent Marketers Branch (IMB) of National Union of Petroleum and Natural Gas Workers(NUPENG), Kofoworola Olasehinde, has said.

    This, Oil Marketers Association of Nigeria (MOMAN), and Independent Petroleum Marketers Association of Nigeria (IPMAN), claim is affecting them as they do not get enough supply from the depot.

    Olasehinde said marketers were allotted 20 tankers at the weekend, instead of the usual 80 to 90 tankers per day. The same situation prevailed last Thursday when marketers shared 30 trucks. The marketers, the sources added, shared less than 30 trucks among themselves on Wednesday after waiting for hours for the product.

    Sources said independent marketers got six trucks on Monday, major marketers (five) and mega marketers (five) last tMonday.

    The sources said: “Low stocks exist in Mosimi NNPC’s depot since three weeks ago when the pipelines got vandalised. The reason is because the depot cannot access enough fuel from Atlas Cove Jetty for onward distribution to Ejigbo, Ibadan, Ilorin and Ore depots.

    Before now the depot supplied 80 trucks per day (400 trucks) per week to marketers since it operates between Monday to Friday. Nigerians have not been feeling the effects because many marketers still have oil in their tanks. If the trend continues, there would be scarcity of petroleum products in Ibadan and Ilorin depots since they got their supplies from Mosimi.”

    Olasehinde said the depot has been struggling to meet the needs of the marketers since the pipeline was vandalised in Ijegun.

    Oladehinde said the pipeline is the link between Atlas Cove Jetty, Lagos and Warri Refinery, adding that the development has affected fuel supply to Mosimi depot.

    He said the Ijegun pipeline vandalism worsened the problem, noting that the Ore pipeline has being vandalised making it difficult for marketers to get fuel from that end.

    ‘’When fuel is coming from Warri Refinery, it passes through the pipeline in Ijegun.”

  • Shell cites insecurity for loss in earnings, production

    Shell cites insecurity for loss in earnings, production

    Oil giant Shell Petroleum Development Company (SPDC) has explained that it suffered a loss last year because of insecurity in the Nigeria Delta.

    In its 2013 report, the Royal Dutch firm claimed that its upstream earnings and oil production as well as liquefied natural gas (LNG) equity sales volumes dropped following the worsening operating environment in Nigeria. It said production dropped in 2013 to 3,199,000 barrels equivalent per day (boe/d) from 3,262,000 (boe/d) in 2012.

    It said: “Compared with 2012, upstream earnings excluding identified items reflected higher exploration expenses, increased operating expenses, higher depreciation as well as lower liquids and LNG realisations. Earnings were also impacted by the deteriorated operating environment in Nigeria and the impact of the weakening Australian dollar on a deferred tax liability. This was partly offset by the contribution of Pearl gas-to-liquid (GTL), and higher gas realisations in the Americas.

    “Global liquids realisations were six per cent lower than in 2012. In Canada, synthetic crude oil realisations were seven per cent higher than in 2012. Global natural gas realisations were six per cent higher than in 2012, with a 27 per cent increase in the Americas and a three per cent increase outside the Americas.”

    Thefirm added: “2013 production was 3,199,000 barrels of oil equivalent per day (boe/d) compared with 3,262,000 (boe/d) in 2012. Liquids production was down six per cent and natural gas production increased by two per cent compared with 2012. The deteriorated operating environment in Nigeria impacted production volumes by some 50 thousand boe/d compared with 2012.

    “Excluding the impact of divestments, production sharing contract (PSC) price effects and the deteriorated operating environment in Nigeria, production volumes in 2013 were in line with 2012. Production volumes were impacted by higher maintenance and asset replacement activities.

    “New field start-ups and the continuing ramp-up of existing fields, in particular Pearl GTL in Qatar, contributed some 170 thousand boe/d to production in 2013.

    “Equity LNG sales volumes of 19.64 million tonnes were three per cent lower than in 2012, mainly reflecting lower volumes from Nigeria LNG due to reduced feedgas supply as a result of the deteriorated operating environment in Nigeria. Excluding the impact of the challenging operating environment in Nigeria, equity LNG sales volumes were in line with 2012”

    According to the report, the full year upstream earnings excluding identified items were $15,117 million compared with $20,107 million in 2012 reflecting a decline of $4,990 million. Identified items were a net charge of $2,479 million, compared with a net gain of $2,137 million in 2012, it added.

    The report showed that upstream earnings excluding identified items were $2,477 million compared with $4,401 million a year ago. Identified items were a net charge of $631 million, compared with a net gain of $1,801 million in the fourth quarter 2012.

     

  • Row over’ missing’ $20b oil fund, kerosene subsidy removal deepens

    The row over the removal and re-introduction of kerosene subsidy and alleged missing $20billion oil money has deepened.

    A document obtained by The Nation at the weekend claimed that the late President Umaru Yar’Adua initiated the removal of kerosene subsidy through a letter to the minister of Petroleum, Nigeria National Petroleum Corporation (NNPC), Petroleum Products Pricing Regulatory Agency (PPPRA) and other agencies

    Governor of Central Bank of Nigeria (CBN) Mallam Sanusi Lamido Sanusi kicked off the storm when he told the Senate Committee on Finance about the missing $20 billion.

    He said oil revenues, which should accrue to the Federation Account from the Nigeria Petroleum Development Company (NPDC) were directed to private companies, including Atlantic Energy and Seven Energy.

    Sanusi said he had evidence of a Presidential directive stopping kerosene subsidy, adding that money paid for such subsidy was illegal and should be refunded to the Federation Account.

    He calculated that of the $67 billion earned from crude oil, only $47 billion was accounted for, leaving a $20 billion balance, which should have been refunded by NNPC and its subsidiary, NPDC.

    But the purported letter by the late President Yar’Adua, removing kerosene subsidy, was said to have been concealed from the public to prevent protests by the public over incessant hike in the prices of kerosene and other petroleum products.

    The letter reads: “Sequel to the meeting with Mr President on Deregulation of the Downstream Petroleum subsector, I forward to you a copy of the Presidential directives conveyed to the minister of Petroleum Resources and copied to relevant state officials.

    “We have confirmed from the Registry that the directives were received and acknowledged in the offices of the minister of Petroleum Resources, minister of state, Petroleum Resources and group managing director of NNPC. Consequently, the NPPC should not be entitled to claim from the Petroleum Support Fund (PSP) in respect of kerosene with effect from the date of Mr President’s approval, that is, September, 15, 2009.

    The late president purportedly directed the agencies, such as NNPC, Ministry of Petroleum Resources and PPPRA to continue kerosene importation.

    The Budget Office told the committee that from the reconciliation, $20 billion is the amount that was not been remitted, adding that NNPC made progress in providing documentation to justify the expenditure of $20 billion. He also stated that more time was needed to complete the reconciliation.

    The secret withdrawal of subsidy on kerosene led to the withdrawal of marketers from kerosene importation until President Goodluck Jonathan rescinded the order in 2010.

    The committee resumes sitting.

  • Oando foresees brighter future with new acquisition

    Oando Plc will more than double its pre-tax profit to over N100 billion following it acquisition of ConocoPhilips (Cop) Nigerian assets.

    Its Group Chief Executive, Mr. Wale Tinubu, said Oando’s post-acquisition earnings before interest, taxes, depreciation and amortisation (EBITDA) would rise from the annual average of N45 billion to N100 billion.

    He said the increase in earnings would lead to an improvement in dividend payout to shareholders in the near term and enhance the company’s growth initiatives.

    “While Oando has concluded financial considerations for the $1.55 million acquisition, due process in the form of regulatory approval is required to officially close the deal. All we require now is the consent of the minister, which is the legal requirement. The transaction will not be fully consummated until the minister’s consent is received.”

    The assets acquisition will be a game changer for Oando, as it will position the company as the largest indigenous oil producer in Nigeria. Oando, through Oando Energy Resources (OER) produces 4,500 barrels of crude oil per day from two fields, but with this acquisition it will start producing about 50,000 barrels per day from six fields.

    Tinubu said: “We are excited by what the future holds for our organisation, as this acquisition will not only provide significant growth in size and scale, but also strengthen our position in the upstream sector.

    “Oando embodies a multifaceted approach, and we aim to maintain our dominant positioning in the midstream and downstream sectors, but this acquisition holds unprecedented opportunities for our upstream business.”

    He also explained the rationale behind the company’s proposed N250 billion capital raise as a fresh capital-raising basket that would provide flexibility to aid growth plans in the medium term.

    “The Rights Issue process will commence immediately after the Oando extraordinary general meeting (EGM) on February 18, and conclude in the first half of the year. Proceeds from the raise will be used primarily to lever the group’s balance sheet, which is a long-term goal of management and replenish its working capital, which was used partly to fund OER’s CoP acquisition.

    “As we mature, we seek to optimise our balance sheet with the view of releasing additional value to shareholders, through debt refinancing, asset sales and equity raises,” he said.

    Oando has experienced exponential growth in its asset base since 2003 (N36billion) to (N515billion) in 2013 due to the diversification efforts from its maiden Downstream business that was acquired in the early 2000s to the fully integrated platform with major assets in the Midstream and Upstream.

  • Court adjourns case to March 11

    Justice Chukujekwu Aneke of the Federal High Court, Lagos has adjourned to March 11 hearing in a suit between Lagos Deep Offshore Logistics and Samsung/Total over a $3.8billion Egina floating production, storage and off loading (EPSO) oil platform.

    The adjournment followed the opposing lawyers’ argument on the court’s jurisdiction to hear the case.

    The Total operated deepwater oil field, Egina, is located in Oil Mining Lease (OML) 130 and the FPSO is a platform that would produce oil from the deepwater asset, which is expected to begin production in 2017.

    According to an industry stakeholder, Mr. Alex Akao, the contract awarded to Samsung Heavy Industry and LADOL by Total for the integration of a Floating Production Storage and Offloading (FPSO) platform to be cited at LADOL base in Lagos, assumed litigation following alleged schemes by Samsung to exclude the indigenous firm from the juicy job.

    The development prompted LADOL to seek injunctions against Samsung and Total based on the emerging controversy. Also joined in the suite are Total Upstream Nigeria Limited (Total), Nigerian Content Monitoring Board (NCDMB), and the Minister of Petroleum Resources.

    The case assumed a fresh dimension last week when counsel to the first and second defendants, Wole Olanipekun SAN, and Adewale Atake, in their submissions argued that the court lacked jurisdiction to entertain the case.

  • Stable power: Why June deadline is not feasible, by DISCOs

    Stable power: Why June deadline is not feasible, by DISCOs

    Can the new power firms meet the Federal Government’s deadline to ensure stable electricity by June? They cannot, say some stakeholders in the industry, who spoke with The Nation.

    President, Nigerian Liquefied Natural Gas Association, Mr. Dayo Adeshina, said the deadline was not realisable because of the recurring gas problems in the country. He said the inability to get enough gas to fire the turbines was affecting electricity generation and distribution.

    He said there was no end in sight to power outage because of the infrastructural decay, adding that it would be difficult to meet the electricity need of Nigerians, with power generation fluctuating between 3,000 megawatt (MW) and 6,000MW in the past two years.

    Adeshina said: “Meeting the June deadline for provision of stable power is practically impossible because the gas needed to feed the power plants is not available. A lot of plants are idle because there is not enough gas. The firms cannot produce at optimal capacity because they cannot get gas, a feedstock required in the industry.”

    According to him, failure to construct enough gas pipelines has prevented the firms from improving power. “Low investment in gas pipelines and vandalism have affected the firms’ capacity to increase power output and meet the need of the population. To improve power supply, the government should provide more pipelines in the next five years. Distribution companies need to invest in infrastructure to help in improving power supply,” he added.

    An official of Sahara Energy Resource, Neye Shonubi, said the Nigerian Electricity Regulatory Commission (NERC) was in the best position to speak on the issue. Shonubi, whose company owns Egbin Power Station and Ikeja Electricity Distribution Company, said the Commission knows whether the companies can provide stable power or not.

    The President, National Union of Electricity Employees (NUEE), Mansur Musa, said it was not possible for the firms to meet the deadline going because of the infrastructural decay in the sector. He said the deadline was a facade to cover up some issues.

    He said: “The water level in the dams rises in June and July every year. When this happens, there would be enough water for use by the hydro stations. If the thermal plants were able to access gas for operations during that period, the development would lead to an appreciable power supply and Nigerians would have no choice than to believe that the power is stable. However, there is a problem. Immediately the water level drops between August and December, the country would relapse into darkness and the reality would dawn on people that the country‘s power is yet to improve.”

    Musa urged the government to invest in infrastructure to grow the sector, adding that the firms do not have enough money for operation. The companies, he said, borrowed money from local and foreign banks to acquire the assets of the Power Holding Company of Nigeria (PHCN) and need to pay back at an agreed rate and period.

    ‘’That is why investment in infrastructure should not be seen as the major responsibility of the power firms. The government should come to their aid if meaningful growth would be recorded in electricity generation and distribution. For Nigeria to enjoy stable power in the next three or five years, the government should assist in providing infrastructure as recorded in its agreement with the companies on the issue,’’ he said.

    A worker of Eko Electricity Distribution Company, who pleaded not be named said stable power supply was far-fetched, because Nigeria relies on gas-powered plants.

    “Many of the plants are thermal, only Shiroro, Kainji and Afam are hydro- powered stations. With the stations experiencing a drop in water level, and the thermal plants battling shortage of gas, it is difficult to guarantee stable power in Nigeria,” he added.

  • Marginal fields output low, say experts

    OIL and gas operators are worried over what they call marginal fields poor contribution to the national output, which hovers between 2.1 million and 2.4 million barrels per day.

    At a workshop on marginal field hosted by EIL-UK in collaboration with Lonadek Consulting and Baba Energy Limited in Lagos, they said it was unsatisfactory that the fields’ contribution was put at only two per cent 10 years after their first marginal fields’ bid round was held.

    Defending themselves, the feild owners said of the 24 oil fields awarded in 2003, only seven are producing at an average of 27,200 barrels of oil per day (bopd) and 35 million standard cubic feet per day of gas), which are about two per cent of national production.

    The Chief Operating Officer, Xenergi Limited, Mr. Debo Fagbami, said lack of access to funds is the major challenge facing marginal field owners. He said most of the field owners have not been able to raise about $30 million to invest in their oil fields.

    He also identified lack of technical know-how as another key challenge, saying these are responsible for the field owners’ inability to create credible and bankable business plans that can convince banks to give them credit.

    Some of the oil field owners, he said, have “uncooperative partners”, which stall whatever decisions that could have led to their take-off.

    The Managing Director, Millennium Oil and Gas Company Limited, Mr. Chiedu Ebie, said lack of collaboration among Nigerian entrepreneurs, was affected the non -development of most of the fields. The industry, he said, was highly technical and capital intensive, requiring collaboration funding and technical know-how.

    Ebie accused some host communities of making unnecessary demands on the oil companies different from the memorandum of understanding (MoU) signed with them, adding that in the process, they set the companies against the youth of the communities. He urged host communities to show restraint and understanding to enable the companies operate without hindrance.

    Director, Pillar Oil Limited, Mr. Seye Fadahunsi, said the 2003 marginal field bid round was successful because professionals did the exercise.

    He also said cooperation and pooling of resources and services were important in the development of oil fields. “When you get the right people to do the right thing, you achieve a positive result,” he said.

    Three of the seven producing companies, he said, had participated in the International Oil Companies’ (IOCs) divestment process and were progressing into mid-sized independent companies.

    “This has resulted in substantial employment for Nigerians and local service firms with its multiplier effect on the economy,” he said.

    He said the bid round represents an opportunity to spread the participation base, as well as encourage serious players in the industry. “From that stand point, licensing rounds have to be more frequent,” he said.

     

  • PPPRA, marketers keep mum on import allocation

    FOR marketers, mum is the word on the non-release of import allocation for the first quarter of the year by the Petroleum Products Pricing Regulatory Agency (PPPRA).

    The non-release of allocation and non-payment of over N220billion subsidy to major oil marketers has been causing concerns in the industry.

    The Chairman, Independent Petroleum Marketers Association of Nigeria (IPMAN), Southwest Zone, Comrade Olumide Ogunmade, said he had been warned not to speak on the matter. He described the matter as ‘’sensitive’’, and as such, should be handled with care.

    He said: “There is an embargo on the issue of non-release of import allocation to oil marketers and others because of their sensitive nature. I have been directed not to speak to the media on such issues.”

    PPPRA’s spokesman, Lanre Oladele, also declined to comment when contacted.