The Nation Newspaper

Category: Energy

  • Workers’ protest may stall PHCN handover to GENCOs, DISCOs

    Workers’ protest may stall PHCN handover to GENCOs, DISCOs

    Despite making all payments, the 13 generation and distribution companies(GENCOs and DISCOs) may still have a hurdle to clear before taking over the assets of the Power Holding Company of Nigeria(PHCN).

    The workers are threatening to stop the takeover until the Federal Government implements its agreements with them before PHCN’s privitisation began a few years ago. The agreement included the payment of their severance package and re-employment by the new operators, among others.

    Earlier, the workers protested the handing over of the Transmission Company of Nigeria (TCN) in Abuja to Manitoba Hydro International, a Canadian firm.

    The Chairman, National Union of Electricity Workers, Lagos Chapter, Mr Adeleke Ibrahim, said workers had not receive their severance package because of the Federal Ministry of Power’s inability to put its record straight.

    He urged the committee and government agencies charged with computing the allowance to speed up and ensure that it is paid in time. The payment, he said, would placate the workers and avert problems in the future.

    The union, he said, would resist any further delay in payment because the workers had waited long enough for it and were now worried.

    The Chairman, Nigerian Electricity Regulatory Commission, Dr Sam Amadi, believes the workers’ action cannot scuttle the reforms in the sector. The workers had no power stopping Nigerians from benefitting from the reforms.

    He said the 13 GENCOs and DISCOs had met the requirements for operating as private entities, adding that the threat cannot stop them from starting operations.

    The workers, Amadi said, had not been justifying their earnings because they could not provide light for the country.

    He said it was time the workers left the sector for private companies to improve electricity supply in Nigeria.

    Amadi said: “The workers have been collecting salaries for years, yet they could not guarantee power supply. The government has paid N400billion as severance package, in addition to 50 per cent increase in their salaries. In spite of this, they are unable to justify the payment. Do we have light in the country? No. They have no choice than to leave for the new operators to come in to improve power supply.

    “I believe in the workers’ welfare, but I do not support any strategy that would destroy the successes recorded in the power reforms. The workers should go because issues relating to their outstandings have been sorted out. They cannot stop the private-sector- led initiative introduced to enhance productivity in the power sector.”

    The spokesperson in the Ministry of Power, Mr Timothy Oyedeji urged the workers not to lose sleep over the matter since the government has agreed to pay, adding that there are laid down structures for the payment.

    He urged the workers to refrain from doing anything that could affect the privatisation process.

    The workers’ actions, he said, would not prevent the companies from starting their operations, adding that some people were against privatising the sector.

    He said laid down procedures were followed to drive privitisation, urging workers to show enough understanding for the growth of the power sector.

    The former President, Senior Staff Association of the defunct National Electric Power Authority, Mr Godwin Ifenacho, said the protest followed the uncertainty surrounding the fate of the workers. He said the workers were provoked by the slow pace of payment, adding that only 40 per cent of the workers have received their emoluments.

    He said workers in Abuja among other cities had been paid, while others have not.

    He said: “The problems lie in the ways in which the workers are paid their emoluments. A situation where some workers have been paid, while others have not, is not good enough. This has created room for suspicion and fear. Based on this, the workers have no choice than to threaten to sabotage the efforts of the government.”

    The workers, he said, did not want what happened to the workers of the moribound Nigerian Airways and the Nigerian Telecommunication Limited(NITEL) to happen to them. After the liquidation of the Nigerian Airways and NITEL, the government failed to fulfill its promises of re-absorbing the workers”.

    “Workers are afraid of being thrown into the labour market. Their argument is that when the companies eventually take over the assets of PHCN, they would not employ them. To avert this, they want to stop the companies from starting operations,” he said.

    He urged the government to fast-track payment to dispel rumours that it has a hidden agenda, adding that the government must speed up the payment process, because the period for handing over the assets of PHCN to the private operators is near.

  • ‘Our expectations of power firms’

    ‘Our expectations of power firms’

    Will the 13 power generation and distribution companies meet the yearnings of manufacturers? This is the question real sector operators are asking as the firms prepare for operations.

    Some operators said the new generating and distribution companies must charge reasonable bills, provide efficient metering regime, good distribution networks, and access enough gas for electricty generation.

    They called for improved power supply, increased access to electricity and resolving the lingering labour issues.

    The Director-General, Lagos Chamber of Commerce and Industry Mr Muda Yusuf, said there was the need for improved power supply to lift the precarious state of manufacturing concerns.

    He said the firms needed to provide private-sector driven mechanisms/expertise and improved productivity to meet the expectations of manfacturers, adding that they cannot afford to fail because of the stringent processes that culiminated in their selection.

    The companies are West Power and Gas; NEDC/KPECO; 4Power Consortium; Vigeo Consortium; and Aura Energy; Others are Integrated Energy Distribution and Marketing Company;Sahelian Power; Transcorp/Woodrock Consortium; Amperion; Mainstream Energy Limited;Kainji Power Plc and CMEC/EUAFRIC JV.

    He said individual and corporate consumers had long been expecting an efficient power sector, arguing that power has caused a setback to the economy.

    He said manufacturers’ expectations were high, considering that they had been battling shortage of power for a long time.

    Yusuf said: “We expect the GENCOs and DISCOs to generate and distribute enough electricity, and further bring good expertise on board to grow the sector,” adding that the sector has suffered lethargy and required people that could demonstrate a high level of competence.”

    He noted that the regulators and operators must put in place measures to protect consumers and further grow the sector, stressing that they need to guide against the exploitation of consumers. They must provide effective consumer protection policy to prevent consumers from paying ‘crazy’bills, urging that the Power Holding Company of Nigeria(PHCN) successor firms must ensure speedy resolution of labour issues, as it would help them in providing opitmal services to consumers.

    The LCCI’s boss said the re-integration of former PHCN’s workers and other issues must be resolved to grow the sector. He called for synergy between the companies and the government to solve the problem of gas supply.

    Yusuf said this would prevent problems such as power drops, shedding of loads on transmission plants and power outage that characterised the PHCN regime.

    Former President, Neimeth Pharmaceutical Plc Mr Mazi Ohuabunwa said with the coming of the companies, manufacturers would no longer provide their power generation firms.

    Ohuabunwa said both the Small and Medium Scale Enterprises (SMEs) and bigger firms have experienced low power supply and capacity utilisation, saying the expectation is that the new entrants will turn things around.

    “Owning of power plants should not be the responsibiity of the manufacturers, it is not even advisable for two or more industries to come together and own a plant. The reason is because they are not consuming the same volume of electricity. This is aside the cost and the process of securing a plant. It is a government issue, hence the decision to allow the Bureau of Public Enterprises to handle the privitisation of the power sector. Now that the sector has been privitised, we should expect improved power supply.”

    He said the informal sector operators need stable power to function, arguing that they would grow their businesses, if things go according to plans.

    The Managing Director, KNB Global Services, Mr Kayode Agunbiade said the cost of providing an alternative source of power has eaten deep into his income.

    He added that provision of pre-paid metres would help consumers monitor their consumption and grow their businesses.

  • Govt advised to seek more gas buyers

    Govt advised to seek more gas buyers

    The Federal Government has been advised to look for buyers for its crude, following the discovery of Shale Gas in the United States.

    The President, Divcon Engineering Group, Andy Ikekhide spoke during the company’s Annual General Meeting (AGM) in Lagos.

    He said Shale Gas was a game changer that would result in prosperity for some nations and adversity for others, adding that Nigeria should look inwards and make the best of opportunities in the global market.

    “As a player in the Nigerian oil and gas industry, I make bold to say that the discovery of shale gas in the US, China and other countries, is a game changer that can have a mixed fortune for countries across the world,” he said.

    Ikekhide said the production of thev gas in commercial quantity in the US would lead to a drop in the prices of gas from Nigeria and other producers.

    With the gas reserves in the United Kingdom put at 266 trillion cubic feet, France: 137 trillion cubic feet, Poland: 148 trillion, Ikekhide said Nigeria could turn the impending adversity to prosperity through timely diversification to exploration and exploitation of non-oil natural endowments. He added that available natural resources are in huge quantities in various zones of the country.

    He said the country could also add value to its crude oil production by building more refineries, creating employment and exporting white products to earn foreign exchange.

    On the Petroleum Industry Bill (PIB), Ikekhide appealed to the National Assembly to put the country above personal interests, and defend their mandates by the speedy passage of the bill, adding that many investors were sitting on the fence while the scramble for investable petro-dollar was becoming highly competitive by the day.

    ” I, therefore, urge our friends in the National assembly to put economic benefits to the nation ahead of selfish, sectional, and political consideration and give urgent attention to the passage of the PIB), “ he said, adding that every opportunity will be explored by the law makers to write their names in gold by resisting external and ethnic pressures from the enemies of Nigeria and pass the PIB for the good of the nation.”

  • Allison-Madueke, others for confab

    THE International Conference on Petroluem Refining and Petrochemicals will hold at the University of Port Harcourt, Rivers State be tween September 28 and 29.

    Top government functionaries, including the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, and Executive Director Petroleum Technology Department, Dr. Oluwole Oluleye, are expected to deliver papers at the event.

    The theme of the conference is: Creating wealth through diversification, transformation and development of our refineries and petrochemical industries.

    A statement by Prof. Godwin Igwe, Executive Conference Chairman, and Director of the Centre for Gas, Refining and Petrochemicals of UNIPORT, said one of the lead paper presenters would be Mr. N. John Erinne, the immediate past president of the Nigerian Society of Chemical Engineers. He will speak on: “Realising Nigeria’s Petrochemicals Potential.’

    Others expected are the former Minister of State for Petroleum Resources, Mr. OdeinAjumogbia; former Minister of Science and Technology, Prof Itabassey-Ewa, Director-General/CEO, NOTAP, Federal Ministry of Science & Technology, and Managing Director of Indorama Eleme Petrochemicals Limited (IEPL), Dr. Umar Buba Bindir.

    Others are the former Minister of State for Petroleum Resources, Mr. OdeinAjumogbia; Minister of Science and Technology, Prof Itabassey-Ewa, Director-General/CEO, NOTAP, Federal Ministry of Science & Technology, and Managing Director of Indorama Eleme Petrochemicals Limited (IEPL), Dr. Umar Buba Bindir.

  • N100b subsidy claims outstanding, say operators

    THE Major Oil Marketers Association of Nigeria (MOMAN) said over N100billion subsidy’s claims, excluding interest are outstanding.

    Its Secretary, Femi Olawore told The Nation that the amount would be higher when the cost of obtaining loans is factored in.

    He said operators borrow to finance the importation of petroleum products, adding that they are expected to pay an agreed interests on the facilities.

    He said the government has failed to meet its obligations of paying the fuel subsidies promptly, adding that the development is affecting their operations.

    He said the government has not been meeting its obligations of paying subsidies regularly to the 26 approved firms that import fuel in the country, urging that it should publish the names and the amount it has paid, adding that there has been conflicting reports on payment of subsidies.

    He said the association has tried to get the subsidies paid to the members to no avail.

    “We have written the government on the importance of paying the subsidies acruing to major oil marketers. We have told the government that deregulation is the final solution to the problems in the downstream sector,” adding that without deregulation, the players in the downstream sector will continue to experience operational hitches.

    He said once the sector is deregulated and the refineries are put to optimal use, the problem in the industry would reduce.

    Efforts to speak to Paul Nwabuikwu, the Special Assistant to the Minister of Finance, and Coordinating Minister for the Economy, Dr Ngozi Okonjo-Iweala on the issue proved abortive.

    However, the government said it has paid N240, 587, 579.248 to the oil marketers. It said N48, 085,299,281.50 was paid to 19 oil marketers in July, this year.

  • Govt urged on private refineries

    An oil and gas expert Mrs. Rageidah Adedimeji said the privatisation of the refineries would create more jobs for youths. Mrs. Adedimeji, Managing Director, Bromshy Communication, spoke at a briefing in Lagos.

    She advised the Federal Government to hasten the privatisation of the three refineries to boost the socio-economic growth of the country.

    She said the development would provide jobs and reduce crude oil theft and pipeline vandalism.

    She said: “If we have more refineries functioning, the country will have enough petroleum products for local consumptions, while we also export outside the country. We need more youth participation in oil and gas sector, this will keep them away from participating in pipelines vandalism and crude oil theft.We need to develop and motivate our youth; they need to use the talent they have got to develop themselves so as to set up their own small scale enterprises,’’

    Mrs. Adedimeji said the firm was partnering with the Petroleum Technology Association of Nigeria (PETAN) to organise a conference on youth training in oil and gas sector.

    She added that the conference would be tailored around five stakeholders in the oil and gas sector.

    “The CEOs of the five companies will use their own backgrounds and success story to develop and motivate the youth on how they have been able to overcome problems relating to their businesses,” she added.

  • Egbin now generates 220MW

    The Egbin Thermal Station in Lagos is now adding 220 megawatts (MW) to the national grid following the repair of its faulty sixth turbine unit (T-06)

    The power plant, which has installed capacity of 1,320Mw, had suffered setback for some years because of ageing parts and paucity of funds to upgrade the facility. It was generating about 700MW, before it collapsed.

    The Chief Executive Officer of the power plant, Mike Uzoigwe, said: “The power would be restored in a short while, due to its new ‘black-starting’ mechanism. Before now, system collapse takes power plants in Nigeria about five days to restore electricity, but the black-starting technology would make it possible within hours.

    Uzoigwe said the power plant would be operating at full capacity soon, after about seven years of partial operation. It was build about 30 years ago to operate on six turbine units at 220MW each, until 2006, when the unit six exploded due to some water tube challenges.

    He said the contract to fix the unit was awarded to the Original Equipment Manufacturer(OEM)- Hitachi of Japan, adding that the company had spent so much money to secure some parts of the plant, but between 2011 and last year, it ordered and replaced all the cannibalised spares and also awarded contract for the final repairs at approximately N1 billion.

    “Unit six job will last for 90 days after which the unit should be handed over completely and ready for operation. Works effectively started on July 1, this year and still going on. This will lay to rest the rumours that money meant for ST-06 repairs was diverted some times in the past,” he said.

    He explained that the delay in starting the job was because it did not get the nod of the Bureau for Public Procurement (BPP) early enough to award the contract due to their exhaustive procedure of making sure the contract price was right.

    “We have started anyway and it is hoped we will deliver on time. We are in the interim discovering everyday some other parts we need to replace. This will cost some more money andwe will soon take it up with the minister of power to source for more funds,” he said.

    Uzoigwe welcomed the privatisation, adding that although the taking over of the assets would soon happen, the management have a philosophy of continuation with all what it is suppose to be doing until the day the new investors take over.

    The Nation visit to the plant showed that serious works were ongoing; the experts handling different parts of the turbine, ready to be fixed up any moment. Some of the new parts were seen strategically laid around the affected turbine.

    Uzoigwe said repair of damaged boiler was awarded to KEPCO at $17,950 million and 100 per cent completed; Dry storage awarded to Igodi at N9.8 million, emergency repairs of generator rotor and BFP motor rotors awarded to Maurubeni at $6,791 million; replacement of damaged reheater outlet coils and comprehensive inspection of reheater inlet coils was awarded to KEPCO at $4,943 million and N74,615 million; supply of new AVR cubicle for thyristor excitation system was awarded to Marubeni at 117,926 million Yen and reapir of LP turbine rotor journals awarded to G.E at $1,524 million among the list of 11 projects, are all 100 per cent completed, except for the supply of cannibalised items which were at 80 per cent completion.

  • Sambo, others for conference

    Vice President Namadi Sambo and the Chief Executive officer, Nigerian Electricity Regulatory Commission (NERC) Dr Sam Amadi will address participants at the WorldStage Power Conference taking place in Lagos on September 24.

    The theme of the conference is: Moving electricity power sector forward.

    Amadi is scheduled to present a paper, Power sector liberalisation and regulatory challenges.

    According to the President, WorldStage, Mr Segun Adeleye, the conference is coming on the heels of the decision of the 13 consortia to meet the deadline for the payment of their 75 per cent before they can take over the assets of the Power Holding Company of Nigeria (PHCN).

  • Residents oppose plans to install electricity poles in estate

    Residents of an estate in Arepo, Ogun State, have opposed the proposed in installation of high tension poles in the area.

    The Journalists’ Estate Residents’ Development Association (JERDA) said the plan was inimical to environmental, urban and physical planning laws of the state.

    In a petition to the Chief Executive Officer, Ikeja Electricity Distribution Company, PHCN Zonal Headquarters, Alausa Ikeja, the residents said the action was also against the mandatory set back for high tension cables going through residential areas as stipulated in the state’s building plan regulations.

    They said the minimum setback for power lines shall not be less than 11Kv or 8 metres, 33Kv or 10 metres, 132kv or 15 metres, and 330kv or 50 metres, arguing that the erection of high tension wire in front of the houses would subject the occupants to untold health hazards, including exposure to high level radiation which may cause cancer, infertility due to discharges from high tension wire, electrocution, lung and respiratory related ailments associated with high tension cable installation.

    From preliminary investigation, the initial approval for the project was nowhere near the journalists’ estate. But the contractor handling the project had decided to cut cost and opted for an easy way out by running the cable through a side street adding that such move would bring about environmental hazard not only to the residents but to the entire community

    The residents have therefore appealed to the executive officer to use his good office stop the project and call the contractor handling the project to order by doing the needful, to avoid a breakdown of law and order

    “We appeal to you to halt the execution of this project and direct the contractor to explore alternative routes outside populated areas in view of perceived health and safety hazards to residents. We request that a proper Environmental Impact Assessment of this project be demanded from the developer and the contractor.”

  • ‘Nigeria incurs huge cost on imported oil equipment’

    ‘Nigeria incurs huge cost on imported oil equipment’

    Nigeria is spending a fortune on the importation of oil and gas equipment because of the poor state of local market. At an energy forum in Lagos last week, participants said the country spends billions of dollars on the importation.

    Among the participants are Executive Secretary, Nigerian Content Development and Monitoring Board, Ernest Nwapa, the Managing Director, the National Petroleum Development Company(NPDC) Mr Victor Briggs and former Director, Department of Petroleum Resources, Tony Chukwueke.

    Nwapa said efforts were now geared towards domesticating manufacturing of these equipment.

    He said there were equipment that could be manufactured locally, adding that the government and operators were planning to ensure such facilities are produced in Nigeria. The need to keep a higher percentage of the yearly oil spend within, he said, was imperative to move the country forward, adding that the country would realise a lot of money from production of vessels, pipe and others.

    He said the pilot project of a pipe mill would soon be launched, adding that the idea will help in encouraging local expertise, provide jobs, and save the country a lot of money.

    Nwapa said: “We are working with the operators to establish pipe mills for the carriage of crude. Projects worth billions of dollars are going on across the country. We want to see a revamp of the dockyards and subsequent construction of oil vessels. Indigenous marine vessel operators include Aero Marine, Britannia, Vigeo and others. We want to see an expansion of local segment of the oil and industry in the next few years.

    “We want to see a situation whereby rigs and fabricated yards are owned by Nigerians, and not foreign oil services companies. We should get our people owing these assets for growth. We are trying to increase what we are doing in terms of facilities and human resources deployed to the sector. That is the fundamental thing the Board is doing. Nigeria has been buying ideas and equipment, a development that has resulted in capital flight and loss of opportunities to employers locally.

    Nwapa said the nation was moving towards entrenching the Nigerian Content Perspective in the industry, saying the Board has engaged the managing directors of International Oil Companies (IOCs) on the issue. “We are training people holistically, Thereafter, we attach them to a company to demonstrate what they have taught,” he said.

    Nwapa said the Petroleum Industry Bill (PIB) has resulted in a change in the mindset of operators, suppliers and vendors, stressing that they have a local content benchmark in what they are doing in the industry.

    Briggs said the PIB was having a spillover effect on other sectors, noting that many organisations were introducing local content policies.

    He said hitherto, indigenous oil production accounted for less than ten per cent of the upstream operations, but added that local producers have increased their output to over 30 per cent.

    “Local producers produce lower quantities of oil because there is shortage of blocks. There is an aspect of PIB that make provision for increase in the production of indigenous companies. When the bill is passed, there would be blocks for operators to work with. The bill ensures that idle blocks are made productive. We are looking at a tax regime of between 55 per cent and 57 per cent for small operators, as against 88 per cent tax rate imposed on them. There is provision for tax holidays as well, explaining that based on this, small firms would be able to play well and grow their businesses.

    He lamented the government inability to get enough oil royalties, stressing that things would change when the bill is passed. He said there are lots of gas export projects compared to domestic gas market, adding that PIB will remove cross- subsidisation of gas market and its attendant inefficiency.

    “There is an aspect of PIB that is devoted to strengthening of the domestic market.The bill will galvanise the interest of the stakeholders when passed into law,” he said.

    Chukwueke urged the government to improve oil production for growth, saying no crude oil producer would like the price to crash because of the benefits derived from it.

    He advised the government to put in place measures that would improve production, arguing that the development will help the country absorb volatilities in the market.

    “The reason oil price has not fallen to $6 per barrel is because countries are not ready to crash for the sake of their economies. They need high price of crude. If Nigeria does not do something now, when the price is crashed, the impact will be on the country, “ he said.