The Nation Newspaper

Category: Energy

  • Shell awards contracts to Nigerian firms

    The Shell Petroleum Development Company of Nigeria Limited (SPDC) has awarded maturation studies services contracts to four Nigerian firms, which would help them, build their capacity in that key aspect of the oil and gas industry.

    These pioneer contracts, according to the Corporate Media Relations Manager, Tony Okonedo, would enable the four companies – Laser Engineering and Consultancy Nigeria Limited, Ankorpointe Nigeria Limited, Integrated Data Services Limited, a subsidiary of the Nigerian National Petroleum Corporation (NNPC) and Nubian Nigeria Limited to conduct front-end subsurface maturation studies in SPDC’s onshore eastern operations for over two-years.

    Maturation studies involve evaluation of subsurface data to build a picture of the hydrocarbon reservoirs and are vital to determining major oil and gas development plans.

    In the past, there was a tendency to conduct some maturation studies overseas as a way of meeting planned targets. However, in line with Nigerian Content Development objectives, SPDC is working to domesticate these studies, thereby empowering Nigerian companies to acquire the necessary expertise while also significantly providing jobs in-country and reducing costs.

    SPDC’s Manager, Geosolutions, Nedo Osayande, representing General Manager, Development, Bayo Ojulari said at the contract signing ceremony in Port Harcourt: “It has been a long journey; we liaised with the contractors on the conduct of subsurface studies, understanding their challenges and working to resolve them to a point where they can now render the required services. This is a top moment for Nigerian contractors in the oil and gas sector, and the four pioneers must seize this opportunity and prove that the investment in time and resources has been worthwhile.”

    The managing directors of the four companies signed on behalf their organisations, thanking SPDC for the opportunity and promising to execute the contracts efficiently.

    In 2011, SPDC also inspired in-country manufacture of carbon steel pipes when it awarded a $37 million contract to SCC Nigeria Limited, a move that led to the establishment of the first line pipe manufacturing facility in Nigeria.

    Meanwhile, Shell companies in Nigeria have been given an award as the “Most Local Content Friendly International Oil Company” at the 10th anniversary celebration of the Nigerian Chamber of Shipping in Lagos. The award is in recognition of their “constant drive to source maritime materials and equipment within Nigeria, and giving priority consideration to Nigerian companies in evaluation of bids for maritime contracts.”

    General Manager, Nigerian Content, SPDC, Igo Weli, said: “We are grateful for the award which is further confirmation of the leadership role of Shell companies in Nigeria in NCD development.”

    Shell companies in Nigeria have won three awards this year in recognition of their local content performance.

  • Lagos okays test for sand mining, dredging sites

    LAGOS government has made geochemical test for sand sites compulsory for operators.

    Commissioner for Energy and Mineral Resources, Taofiq Tijani, stated this at a meeting with managers and miners in Lagos.

    He said the geochemical/geophysical analysis is to help determine the mineral content of the sand samples, including filling, sharp and plastering sands obtained at different strategic locations.

    The move, he said, had become imperative to ascertain the ‘real content value’ of the sand samples.

    He said: “At a meeting, we had with the governor, we brought up the issue of mineral content of sand samples and why it has become necessary to carry out a test on sand samples to determine their true worth. Realising the relevance of the issue, the governor gave approval and instructed that we put up a modality for getting this done. This, in fact, informed our meeting today with all of you who are managers and operators of these sites.

    “One thing we want all of you to know is that most of the sands being stockpiled could be more than what you think they are. Some of these sands could be silica sands which is useful for the manufacture of glass. Besides, some which are used for plastering may be better being used for concreting and vice- versa. So, unless we make effort toward evaluating all dredging sentiments it may be difficult to ascertain the mineral contents and their significance.”

    Tijani noted that it might be true that lack of right mineralogy of sand may have been responsible for the high frequencies of building collapses in the state.

    Allaying fears on the exercise, he said the mineralogy test would rather facilitate a win-win scenario as economic benefit would accrue to both the state and the owner and manager of the site where such economic mineral is located.

    The benefit for the state, he said, had started becoming feasible as evident in an investor who had approached the ministry on the possibility of exploiting our silica sand deposit for the manufacture of glass adding that preliminary work on it would soon start.

    He hinted that the geochemical analysis and geological test had to be contracted to a thoroughbred professional consultant and his team of sedimentologists so as to prevent any form of interference and ensure that the exercise is meticulously carried out. Directing operators of the sites to liaise with the consultant on the best approach, which can be adopted to get the exercise done, Tijani said they should see decision on the exercise as irreversible.

    “We must all come to terms with the fact the test has come to stay. What I expect we should be talking about is how best to get the exercise done in a cost-effective way. So I expect that you liaise with our consultant and some of our staff when they come visiting at your various sites on how best you think the exercise could be carried out. You should discuss on whether it would be better done in clusters or groups so that the cost to be borne by you would be minimized,” he said.

  • Customers decry PHCN’s ‘crazy’ bills

    Customers decry PHCN’s ‘crazy’ bills

    The billing system of the electricity distribution companies of the unbundled Power Holding Company of Nigeria (PHCN) has gone arwy and customers are complaining, writes EMEKA UGWUANYI.

    Customers of the electricity distribution companies unbundled from the Power Holding Company of Nigeria (PHCN) are angry over what they described as unreasonable bills from the utility provider.

    The customers, particularly those who don’t use prepaid meters, are paying through their noses even when the expected uninterrupted power supply promised by the government remains a dream.

    Following complaints from the customers, our correspondent visited some undertakings and business units of the distribution companies in Lagos to ascertain the cause of the recent exorbitant bills. It was discovered that customers affected in the high billing include those in Residential One and Two (R1&2) category of MYTO 11 (Multi-Year-Tariff-Order), who according to the Electricity Power Sector Reform Act, are not only expected to pay low tariff, but also be protected from undue high tariff in order to enable them have access to power supply.

    At the undertaking and business unit levels, half of the customers acc osted came with complaints of high billings. Some of the bills were as high as N30,000 for households of two and three bedroom flats, who don’t even use air-conditioners in their houses.

    Some of the customers said the high billing started from September. For instance, Ajibola Akande who lives within the network of Festac Business Unit said in September he was billed N14,000, in October, over N18,000 and in November, ove N27,000. Also a customer under the Shomolu Buisness Unit, Mr. Julius Ogbonna said he got N14,000 in October and N29,000 in November. He said when he complained, he was asked to go and pay first so they (PHCN) would find a way of resolving future bills.

    The implication of this outrageous billing is that it might make customers lose confidence and trust in the power sector reform and promises of the government in making power affordable by low income earners, he added.

    Some of the officials of the Buisness Units who spoke in confidence to The Nation, said the marketers create a lot of problems for them by not reading the meters. They noted that even if customers have faulty meters or their meters are inaccessible, they (marketers) should endeavour and properly determine the consumption level of a customer before estimating his bill.

    “When we see customers mill around here, we don’t feel good because what we preach and expect to attain is commendable service delivery and customer satisfaction but we are working on resolving this issue of crazy billing but you know this cannot be achieved overnight,” they said.

    At the Quarterly Power Summit in Lagos organised by the Power Ministry, the Chief Executive Officer, Benin Electricity Distribution Company Effiong Umoren also highlighted on the issue of tariff. He said that it is very imperative to get the issue tariff right in order to get the privatisation and reform aspirations right.

    In his paper entitled: Market performance under the implementation of MYTO 11, prospects and challenges: Operator’s perspectives,’ he noted that the tariff structure needs to be slightly adjusted.

    He said: “Unless we are banking on periodical government bailout, the tariff structure is one single component in the power equation that decides the survival or otherwise of the electricity supply chain, we must get it right.”

    He identified major features of MYTO 11 as increase in energy and fixed charges across the various tariff class, abolished payment for meters and connection fees by customers, abolished meter maintenance fees effective from December 2011, disallowed payment of statutory charges for maximum demand (MD) customers: inspection and survey fees, testing fees, metering and commissioning fees, reduced tariff classes from 19 to 14, merger of all the low energy users in each class: R, C, D, and A and collapse of all charges in each category into only two components: Fixed charge and Energy charge and removal of KVA component from MD bills.

    He also noted the major benefits of MYTO 11, which he said discourages fraudulent classification of customers from R3 to R2 by under declaration of load demand and reduction in energy theft. He said that due to free meters, customers stealing energy are now coming out for free meters and regularisation of supply status.

    On challenges of MYTO 11, he identified among others, the unrealistically high fixed charge of N139,466 for a wide segment of D2 customers: small scale industrial customer, saw millers, aluminium and steel product makers, confectionary manufacturers adding that on high fixed charge of N25,018 on R3, “we have some instances where fixed charge is up to three times the energy charge; particularly on “seasonal and weekend” residential houses.

    He said that kva as a component of a tariff encourages more efficient machinery, thus improving system voltage profile noting that its abolition in MYTO II will increase ‘power factor indiscipline’ putting avoidable burden on terminal equipments. Power factor efficiency requires additional investment on the part of customer. There is no more incentives for this investment, he added.

    To discourage energy theft or illegal connection, the stakeholders said the tariff structure should be properly addressed and has to start from elimination of crazy billing.

  • Firm for FTSE Index

    Eland Oil & Gas, an upstream petroleum company, will be a part of the FTSE AIM 50 Index from December 24 2012, a statement said.

    FTSE AIM 50 Index comprises the 50 largest United Kingdom incorporated companies on AIM by market capitalisation. Eland qualified for the FTSE AIM 50 by dint of its high market capitalisation (approximately £ 150 mn) and strong liquidity.

    Inclusion in the index increases the company’s visibility to investors and triggers analyst coverage; widens the investor base by attracting newer classes of investors; helps in comparing the company’s performance against a peer group and supports liquidity and future capital raising.

    Eland Oil & Gas was admitted to AIM, the London Stock Exchange’s specialised market for growth companies, on September 3 2012 having raised £ 118 million.

    It has a significant financial and operational interest in the OML-40 field located onshore within the Niger Delta.

    Commenting on Eland’s inclusion in FTSE AIM-50, Ibukun Adebayo, Head of Primary Markets for Africa at London Stock Exchange said: “Eland Oil and Gas has qualified for FTSE AIM 50, an index of top UK incorporated AIM companies, within three months of joining the market. This is a clear demonstration of the exciting growth potential for smaller Nigerian companies and testament to London and international investors’ willingness to support ambitious, fast-growing companies.”

    AIM is the London Stock Exchange’s international market for smaller growing companies. A wide range of businesses including early stage, venture capital backed as well as more established companies join AIM seeking access to growth capital, making it the most successful growth market in the world.

    Since its launch in 1995, over 3,000 firms from across the globe have chosen to join AIM.

  • How to solve power crisis, by experts

    How to solve power crisis, by experts

    As the country continues to suffer from daily power cuts, experts are looking for alternative energy-saving options. DANIEL ESSIET writes

    Despite efforts to boost electricity, homes and companies are still experiencing lengthy power outages. The government attributes this to increased electricity demand.

    For watchers, there is too little power available. Supply isn’t catching up with the demand. Household electricity accounts for the bulk of electricity usage, followed by industry and public facilities.

    For watchers, Nigeria needs more power stations, but these take time to build and for too long the investments in updating existing stations haven’t been made.

    In response, the Managing Director of Niger Delta Power Holding Company Limited (NDPHC), James Olotu, said challenges facing power generation and energy, are traceable to the many years of ill-advised strategic planning, investment and delays in infrastructure construction.

    He said 10 new power projects, which are projected to deliver additional 4,770 Mega Watts (MW) to national grid will come on stream.

    Olotu, who stated this investment scheme during the inauguration of the 150MVA transmission station in Ikeja West, Lagos said these facilities have continued to impact positively on power supply in the country.

    He said: “This initiative is expected to bring into existence 10 more power stations that will give Nigerians not less than 4,770 MW of power, when completed. We are also building hundreds of thousands of kilometre of transmission lines across the nooks and crannies of this country, including substations to support the transmission lines.

    “We are also building several thousand kilometres for distribution in addition to infrastructure and substations to support it. These projects also include the gas pipelines within the same fund to ensure that gas flows into the generating plants.

    “Out of the 10 power plants, four are on stream, such as Olorunshogo in Ogun State, Omotosho in Ondo State, Sapele in Delta State and Alaoji in Abia State has added new units of power into the grid.”

    Total capacity from this new unit is about 1,150 MW. As part of the unit delivery, we expect that every month those power stations would be delivering the balance from their units into the grid. So that by December, we will be looking at about 1,500MW. Other six power generation stations are at about 80 per cent completed, and we will get to inaugurate them soon. So by the end of the year, we are expecting additional 2,500MW from all these stations I have mentioned,” he said.

    But watchers said all these will not tackle the consumption challenges. The savings in the form of led negawatts, a theoretical unit of power representing energy saved, would reduce the need to build more fossil-fuel power stations.

    Speaking with The Nation, he Director-General, Kaduna Business School,Alhaji Dahiru Sani said small changes, such as setting air conditioners a few degrees higher or turning off lights in unused rooms, can help reduce the load on the grid.

    He said Nigerians should look for short-term solutions to reduce the strain on the country’s electricity grids. Consequently, more Nigerians who buy a refrigerator, freezer, washing machine, air conditioner or electric water heater, check the energy labels. He said education and more awareness campaigns are needed if the country is to ever change its consumption patterns.

    He said with solar panels or wind turbines attached to buildings , even if a disaster takes out a plant, commercial enterprises will be able to continue to work.

    These ideas, Sani explained is gaining popularity in other countries where the cost of electricity is high and there is strong financial incentive to provide one’s own power.

    As the energy problem grows, he said more Nigerians need to turn to green technologies in their homes.

    According to him, the government needs to be thinking about how to create different policies to encourage innovations and improve grid reliability and resilience.

    Sani said the government should work out plans to reduce domestic and non-domestic electricity demand across the nation, beyond that expected from activities already in place, by a range of measures.

    According to him, innovative uses of real time energy consumption data combined with targeted recommendations can encourage households to reduce their electricity consumption.

    In the non-domestic building sector, he noted there appears to be significant potential to drive more electricity savings through measures such as high efficiency lighting, lighting controls and HVAC controls.

    He stressed that cutting the amount of electricity used will not only save money on bills and reduce the need for new generation capacity, nut it makes good business sense too.

    According to him, there are a number of critical input that either have to be maintained or further developed to realise the nation’s ambitious energy goals. At a national level, consumers will be required to radically evolve the way that they power, heat and light their homes.

    He urged the government to encourage micro-hydro programs to support broader community and economic growth..

    He said local residents can organize the labour efforts and took a personal stake in the project.

    Sani said a pragmatic energy policy is necessary as the country experiences challenges with power generation, and this handicap has the potential of throwing the economy out of gear, as well as undermining foreign direct investment into the country. Additionally, critical industriaisation policy might be in limbo if measures are not instituted to address this shortfall. That is why, he noted, has become critical to diversify energy-generation sources.

    For a longer-term, more sustainable energy mix and set of policies, the Vice-Chancellor, Federal University of Technology, Akure (FUTA), Prof Biyi Daramola, said the government needs to explore options around renewable and clean energy generation (wind, wave, solar), energy conservation (including introduction of smart grids, smart power metering and LED lights), pumped water storage.

    He said there are several renewable energy resources in the country andthe government should encourage the development of these resources.

    Demand for renewable energy has been held back in emerging economies like Ghana by high costs, but a recent glut of solar panels on the world market has seen prices tumble downwards, much to the advantage of countries like Ghana. The country’s forward-thinking strategy puts it in a strong position to lead the renewable energy revolution in sub-Sahara Africa.

    He said the energy technology roadmaps should point the way to a sustainable energy future for the nation.

    He said the roadmaps should play an important role in helping identify opportunities and challenges, and in accelerating efforts at the national level.

    As yuletide season approaches, Nigerians have continued to groan under intense electric power outage. As if the heat accompanied by this massive power blackout is not enough, the nation’s power utility company, Power Holding Company of Nigeria (PHCN), has continued to distribute outrageously high bills, popularly known as crazy bills, to virtually all consumers.This is coming even as the Transmission Company of Nigeria (TCN), the connecting company between generation and distribution, claims that it is currently transmitting over 4,000 Megawatts to distribution companies across the country.The reasons for the current situation has been blamed on system collapse, which occurred on Thursday, November 29, due to a fault on the 330kv transmission line from Benin to Onitsha and the shutdown of Escravos Gas Plant, causing the combined nationwide shutdown of 3,716MW, the shutdown of three units of the Egbin Power Station and the closure of transmission stores, which house maintenance spare parts for PHCN facilities.

  • ‘Why govt must tackle oil spill’

    A call has been made to the Federal Government to strengthen the oil spill agency to enhance safety, and improve environmental protection.

    A lecturer in the Department of Maritime Management Technology, Federal University of Technology, Owerri (FUTO), Chinedum Onyemechi, called for an overhaul of oil spill regulatory framework to meet the international standards; including the polluter pays all principle in under the legislation.

    Speaking at a lecture entitled: “Oil Spill Contingency Planning and Control Techniques” Onyemechi, who is also Chairman, Port Technology Consultancy Services, stressed the need for the government to enforce a sustainable oil spill plan, incorporating a control system where oil spill consciousness was properly internalised by corporations working in the oil industry and exclusive economic zone (EEZ).

    Because of increasing cases of oil spills, he maintained that the marine environment and the seashore are at risk of pollution .

    To this end, he urged coastal state governments to ensure that a workable emergency plan was put in place to stop oil spill incidence.

    In addition, he canvassed a supervising national body whose role shall be ensuring that all major petroleum carrying facilities including, refineries, and ships endorse and implement an oil pollution emergency plan.

  • Empower indigenous operators, says NSE chief

    Chief Executive Officer, Nigerian Stock Exchange (NSE), Mr Oscar Onyema, said indigenous operators need financial support to move into new areas and explore opportunities in the oil and gas sector.

    Speaking at the Annual General Meeting of the Financial Markets Dealers Association(FMDA) in Lagos , Oscar said, indigenous firms need to explore opportunities offered by the capital market to invest in upstream assets.

    According to him, several local firms have are posed to make significant investments in marginal fields and seize opportunities to participate in the oil and gas business.,

    He said indigenous oil and gas producers need to meet some conditions to develop marginal fields and also boost indigenous production.

    He said the capital market is favourable for oil and gas companies, adding that financially robust companies are reducing debt, increasing the capital available for other companies.

    Consequently, he said the Nigerian Stock Exchange (NSE) is engaging marginal oil field operators and other indigenous oil and gas firms to use the capital market to source funds. He said the market provides patient capital that is well suited to capitalize these opportunities and assist a new generation of oil and gas value creators to achieve their potential.

    Onyema said the NSE was also considering opportunities inherent in the Local Content Development Act to encourage Nigerian-owned oil and gas firms to list their shares.

    He expressed hope that the passage of the Petroleum Industry Bill(PIB) will enable other subsidiaries of the Nigerian National Petroleum Corporation(NNPC) to be listed separately . He noted that the government needs to encourage companies to list on the NSE through incentives and amenable legislations.

  • NNPC will meet 250,000 bpd target, says GMD

    NNPC will meet 250,000 bpd target, says GMD

    The Nigerian National Petroleum Corporation (NNPC) has said its aspiration to attain 250,000 barrels of oil per day (bpd) production by 2015 is on.

    He said it would government’s policy to unbundle the NNPC as provided in the Petroleum Industry Bill (PIB) now before the National Assembly.

    The production target would be achieved through NNPC’s subsidiary in charge of exploration and production (E&P), National Petroleum Development Company (NPDC).

    The Group Managing Director of NNPC, Andrew Yakubu, had on assumption of office assured he would ensure aggressive transformation of the corporation and its subsidiaries to be globally competitive and carry out its operations in line with global best practices.

    Yakubu during his inaugural town hall meeting with management and staff of the NNPC said the management team under his watch would introduce new business models in all its Strategic Business Units (SBUs) and Corporate Service Units (CSUs) to ensure the commercial viability of the corporation in order to remain competitive in the global oil and gas industry. Yakubu stated that the management team would reposition the NNPC to become a commercially focused and profit-driven organization that is governed by best management practices using current technology, pursue and maintain competitive operational and business efficiency, cost effectiveness, input/output optimization, revenue maximization and profitability.

    Before 2010, the NPDC was producing about 65,000bpd but by 2010, the company was given a target to attain 250,000 bpd production by 2015. In compliance with this directive, the company has ever continued to rev up production and currently stands at 130,000 bpd.

    According to the NPDC, the bulk of the recent production level is from the oil mining leases (OMLs) assigned to the company following the divestment of by some of the Joint Venture partners such as Shell. This kind of growth was described by the Managing Director of NPDC, Mr. Victor Briggs, as “not being organic,” thus the need for NPDC to commence aggressive drilling programme to grow its production in an organic fashion.

    In view of the desire to attain the target, Briggs said the NPDC has activated a plan to drill 40 wells in the next five years, which is an average of eight wells per year. This plan is significant and ambitious considering that through the last five years NPDC drilled only 10 years, an average of two wells per year, he added. He said the aggressive drilling programme has commenced with the drilling of Okono 6 and 7 wells in OML 119, he said.

    Briggs said: “These two new wells are producing 12,000bpd. “The only way we can increase our production is really by going out there and do the work. It is either you are repairing a well that has gone down because there are technical issues or you are drilling a well. In the case of Okono, it is the latter because we know there are potentials and all we did was to go out there and drill. I consider Okono 6 and 7 a success because the two wells combined are delivering over 12,000 barrels per day and that by any standard is significant especially in an area where most of the wells around are producing an average of 2,000bpd to 3000bpd.

    “Under the able leadership of the former Managing Director who is now Group Executive Director Exploration and Production, Engr. Abiye Membere, our production grew from between 60,000bpd and 65,000bpd to about 130,000bpd. That is about 100 percent growth. For us to meet the 250,000bpd target by 2015, we will have to do another 100 percent growth from our current production. And that is what we are trying to do. First, we tried to repair some of the wells to restore their production capacities. For instance, in OML 26, between when that asset was handed over to NPDC in June and now the production of that field was doubled. All of these have added up to the 130,000bpd production that we are talking about today.

    “To meet the 250,000bpd target by 2015 means doubling our production as I said earlier, but I am confident that we will meet the target because the resources are there and the reserves are there, and we have the people. Everything is therefore set for us to meet the target. For example, in the last five years NPDC drilled 10 wells, but we have a target to drill about 40 wells in the next five years. We have two rigs on site today, one offshore and the other one onshore and by the middle of next year we will bring in one more rig and towards the end of the year we will bring in the fourth rig. I believe we shall keep those rigs for the next two years.”

    The company said that the drilling of Okono 6 and 7 wells is significant in that it represents a realistic step towards growing the company’s production as well as national production positively. In furtherance of this plan, NPDC has two rigs in site as at today, one is working on Okono 8 while the other is a drilling at Oredo in OML 111.

    More rigs will be deployed by next year and also key to this programme is efforts to grow reserves, Briggs said. He noted that while the company is drilling to increase production, the management is also working hard to boost reserves because it is the only way to ensure sustainability. For instance, he said that in one of NPDC’s wells in Okono, the company is drilling deeper to assess its potential. That drilling is going on very well as at today; and if we find what I think we will find, and I think we will find it, that will give us more reserves in that field, Briggs added.

    NPDC is also breaking grounds in keeping with its vision to play a leading role in meeting the Federal Government’s aspiration to provide enough gas for domestic use especially in power generation. The Phase 1 of the Oredo Gas Handling Facility situated near Ologbo within the OML 111 has been completed. It currently supplies 65 million standard cubic feet (mmscf) per day of gas to the Nigerian Gas Company (NGC) for onward transmission to Power Holding Company of Nigeria (PHCN) and the National Integrated Power Project (NIPP) Power plants.

    The facility was originally designed to gather and process gas from the very prolific Oredo field (OML 111) and supply to the Ihonvbor Power Plant, but the plant has not been completed. The second phase is billed to come on stream by the end of the first quarter of 2013. That will bring an additional 100mmscfd from the plant.

    The Phase 2, according the company, would also see the completion of the liquefied petroleum gas (LPG) component of the gas plant, which will deliver about 4000 metric tons of LPG to enhance the drive to get every home to adopt LPG as its domestic cooking fuel as a way to combat deforestation and environmental pollution arising from the use of firewood and kerosene.

    The support of the Federal Government under the leadership of President Goodluck Jonathan has been instrumental to these achievements, Briggs said, adding that under President Jonathan and the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, the trend of asset stripping that was the norm under previous administrations has been halted. In fact, assets have rather been handed over to it which is partly responsible for the achievements. The future of NPDC is very rosy and it is well on its way to actualizing the vision of its founding fathers as a major player in the upstream sector of the oil and gas sector.

  • Ghanaian oil revenue hits $340 million

    Ghana’s petroleum revenue accruing to the state this year has hit USD340 million following the announcement of a third quarter receipt of USD64.91 million.

    The third quarter receipt, published by the Ministry of Finance and Economic Planning (MOFEP), plus USD236.76 million of petroleum revenue released for the first and second quarters of this year brings the total receipts from petroleum to about USD340million.

    Of the total receipts, USD146.5 million representing 42.7 per cent was transferred to the Ghana National Petroleum Corporation (GNPC).

    The Ministry of Finance is yet to report on third-quarter transfers to the Ghana Petroleum Funds (GPF), which, according to the Petroleum Revenue Management Act, should receive any excess revenues above the quarterly Annual Budget Funding Amount (ABFA) – the share of revenues spent directly on the annual budget.

    The ABFA should be at most 70% of the oil revenues excluding transfers to GNPC, also known as the benchmark revenue.

    In quarters where transfers are made to the GPF, it means the bench mark revenue fell short of the quarterly ABFA.

    In the first half of the year, GHC 24 million and GHC 7.2 million were transferred into the Stabilization Fund and Heritage Fund respectively.

    Bank of Ghana data show that the Ghana Petroleum Funds as at January 2012 had an opening book value of USD 54.8 million and USD 14.4 million, while the closing book value as at June 30, 2012 stood at USD 54.9 million and USD 14.44 million for the Stabilization Fund and Heritage Funds respectively.

    The Stabilisation Fund was established to cushion the impact on the annual budget and sustain public-expenditure capacity during periods of unanticipated petroleum revenue shortfalls, while the Heritage Fund is meant to ensure Ghana’s oil wealth benefits posterity.

    Meanwhile, the Energy Commission has explained the 400 million dollar Photovoltaic (PV) solar power would be critical in the country’s bid to achieve optimum levels in energy generation.

    The plant is expected to produce an additional 155Mega Watts – representing 6 percent of the country’s current power generation capacity of 2000 Mega Watts.

    It is to be located in the Western Region and will be the largest solar power plant in Africa when completed by October 2015.

    An indigenous firm, Mere Power Nzema Limited is building this plant in collaboration with foreign renewable energy developers like Blue Energy. The Head of Renewable Energy at the Energy Commission, Kwabena Otu Danquah gave more details in an interview with Joy Business.

    “At the moment they have been granted a provisional licence which has a life span of 1 year – meaning after one year, if they are unable to mobilize funding and start construction, it would expire. Government has a policy target of 10 percent from renewable energy regarding the country’s energy mix by the year 2020. So bringing in a155 Mega Watts solar plant means that we would heading towards achieving this target” he said.

    Construction works are scheduled to begin by the end of next year and the plant is projected to provide electricity to more than a 100 thousand homes. According to Mr Otu Danquah, the need for the country to develop its renewable energy sources cannot be overemphasized.

    “We have several renewable energy resources in the country. We have wind, biomass, hydro and solar as well and so we are going to encourage the development of all these resources. As a nation we have to diversify and one of advantage of renewable energy is that it is environmentally-friendly the resource is indigenous and so the need to develop it for energy security,” he added.

  • SON to enforce LPG cylinders requalification

    Hard times await importers and marketers of substandard and old Liquefied Petroleum Gas (LPG) cylinders as the Standards Organisation of Nigeria (SON) and other stakeholders are set to enforce the implementation of requalification programmes for LPG cylinders to enhance safety for the users.

    The regulatory agency dropped the hint at the Second Nigeria Liquefied Petroleum Gas Association (NLPGA) Conference in Lagos entitled: “The Cylinder: A vital tool for LPG growth in Nigeria.”

    Head, Metrology Department of the agency, Obiorah Manafa, who spoke on the enforcement and protection of the LPG sector with emphasis on cylinders, revealed that plans are afoot to constitute a technical committee comprising members from all sectors to develop a framework for the workability of the requalification scheme.

    He noted that the situation in the country where cylinders are either imported or produced locally and sold to users without any programme for their maintenance and requalification by marketers is not healthy for the industry and the country.

    He said the absence of such programme had caused more substandard and old cylinders of 15 years and above to be in circulation in the country, a development responsible for the safety issues that LPG has had to contend with over the years.

    Citing the cases of China and India where requalification is working, he said it would be advisable for Nigeria to adopt the China’s model where cylinders are owned by individuals unlike India were cylinders are owned by marketers.

    He, however, tasked stakeholders including plant owners, marketers and retailers to cooperate for the programme to succeed in Nigeria.

    He listed some of the benefits of requalification of cylinders to include enhancing safety of lives and properties in the industry, creating more confidence in the minds of the users, boosting the LPG business and providing more business for indigenous cylinder manufacturers as well as eliminating most of the sub-standard and old cylinders from circulation.

    President, Alhaji Auwalu Ilu, said the focus of this year’s conference on cylinders was apt because Nigeria uses LPG mostly for domestic purpose.

    He said until recently, most cylinders were unbranded and owned by the consumers hence bestowing upon them the responsibility of ensuring that the cylinders are fit and safe for use.

    He added that because consumers lack idea on the maintenance and requalification of cylinders, they see nothing wrong in purchasing second hand cylinders.

    He noted that the association is about to review the LPG standard with SON as a result of the safety challenges that were observed with the imported LPG from Niger Republic.

    Speaking on opportunities, which Nigeria stands to realise by switching to LPG, Yomi Awobokun, Managing Director, Oando Marketing said a large portion of the $1.1b investment required is to be gained in exports of the gas and its cylinder.