The Nation Newspaper

Category: Energy

  • Shell supports flood victims with $1m

    The Shell Petroleum Development Company of Nigeria Limited (SPDC) said it has donated $1 million to support flood displaced persons in 24 states.

    The company’s Corporate Media Relations Manager, Tony Okonedo, said the cash was part of the oil giant’s support programme to the International Federation of the Red Cross and Red Crescent, in conjunction with the Nigerian Red Cross Society, towards effective post flood disaster relief operations in the country.

    The support will be enhanced by funds collected through employee donation programme, in which the company will match contributions by its staff.

    The SPDC’s Managing Director and Country Chair for Shell Companies in Nigeria, Mutiu Sunmonu, said: “We are deeply touched by the stories and images of the hardship the floods have brought upon our brothers and sisters in many parts of the country and our thoughts and prayers are with all affected persons at this most difficult time. I’m also happy that staff are voluntarily contributing to the employee donation programme we launched for the flood victims.”

    The planned support operations with the Red Cross, according to the company, would cover areas including relief management, camp coordination and management, water, sanitation and hygiene promotion, healthcare, especially maternal and child health, emergency shelter, livelihood support and early recovery, family reunification, psychosocial support and risk reduction. These will form part of the immediate and medium term activities to be embarked upon in order to ease the hardship suffered by the flood affected persons and manage their return to normal life, it added.

    Commenting on the support from SPDC, Secretary-General of the Nigerian Red Cross, Bello Hamman Diram said: “The Nigerian Red Cross Society welcomes the response and cooperation from Shell to our plan of action for the 2012 floods operation. It will certainly go a long way towards helping us meet our obligations to affected persons, volunteers and our staff, as well as to respond quickly and adequately to this emergency. We enjoin other well meaning individuals and corporate bodies to do likewise.”

    Prior to the Red Cross support initiative, SPDC had complemented the work of the authorities by providing helicopter flights, geomatics expertise, satellite imagery and maps of affected areas to aid proper relief operations planning and execution, it added.

  • Chrone Group donates $250,000 to Rotary

    The Executive Vice Chairman of Chrome Group, an integrated oil and gas conglomerate, Sir Emeka Offor, has contributed $250,000 to Rotary International in support of the humanitarian group’s global programme in peace studies and conflict resolution.

    According to a statement from Rotary International, the gift will endow fellowships to the Rotary Peace Centre at Chulalongkorn University in Bangkok, Thailand.

    The programme each year offers a three-month professional development certificate in peace and conflict studies to up to 50 mid-level professionals from related fields, such as public health, education, international law, economic development, journalism, and social justice. Preference will be given to qualified applicants from Nigeria and other African countries, it added.

    The other five Rotary Centres for International Studies offer one-to-two year graduate level programmes on the campuses of leading universities in Australia, England, Japan, Sweden, and the United States.

    “My hope is that the fellows who benefit from this gift will not only use it to sharpen and enhance their academic and professional skills in peace studies, but also use what they learn and internalise to become practitioners – drum majors – for peace, reconciliation, and development,” said Offor, who is Executive Vice Chairman of the Chrome Group, an oil and gas service conglomerate. He also heads the Sir Emeka Offor Foundation, which focuses on poverty alleviation through literacy and education programmes in poor communities.

    “In West Africa, we have witnessed the destructive, heart-wrenching, and deadly effects that communal, sectarian, and political conflict and violence have on innocent people,” Offor, a member of the Rotary Club of Awka G.R. A., said, adding: “We should never give in to the notion that world peace is unattainable.”

    Commenting, Rotary Foundation Chair Wilfrid Wilkinson, said: “We are extremely grateful for Sir Emeka Offor’s generous gift recognising our commitment to equip a network of world leaders with the skills to resolve and prevent conflict and bring about sustainable peace. Thanks to such strong support, nearly 700 Peace Centre alumni are applying lessons learned and best practices in key decision-making positions across the globe.”

    Rotary clubs have long embraced the call for peace at the grassroots level by addressing the underlying causes of conflict and violence, such as hunger, poverty, disease, and illiteracy. Ten years ago, the international humanitarian organisation of service clubs decided to take a direct approach to world understanding by providing future leaders with the tools they need to “wage peace” on the global stage.

    In addition to the certificate programme in Thailand, Rotary clubs yearly sponsor up to 60 scholars for one to two years of study to earn master’s-level degrees at the Rotary Centres for International Studies at Uppsala University, Sweden; University of Bradford, England; University of Queensland, Australia; International Christian University, Japan; and Duke University and the University of North Carolina at Chapel Hill, United States.

    Offor also supports Rotary’s effort to eradicate the crippling disease polio, the organisation’s top priority as a spearheading member of the Global Polio Eradication Initiative. Nigeria is one of only three countries where the wild poliovirus has never been stopped. The other polio endemic countries are Afghanistan and Pakistan. When the initiative began, polio infected about 350,000 children a year, compared with fewer than 700 for all of 2011, a case reduction of more than 99 per cent.

  • EPIC to begin construction of refinery

    An indigenous company, EPIC Refinery and Petrochemical Industries Limited and its partner, Sino Asia Energy Group Company Limited, are set to begin the construction of its 150,000 barrels per day refinery.

    The company’s Managing Director/Chief Executive Officer, Mr Barango Matthew Wenke (Jnr), disclosed this in Lagos.

    He said site clearing had begun but for the flooding, which overtook the area, substantial work could have been done by now but he noted that as soon as the flood dries up, they would resume work at the site.

    He said: “The flooding of the site of the refinery in Bayelsa State is a natural issue, but as soon as the water dries, the team will return to continue with site works while waiting for the Department of Petroleum Resources (DPR) to give them licence after full construction will commence.”

    He maintained that the 150,000 barrel a day capacity refinery will come on stream in two years time. He said that some prominent Nigerians want to come on the EPIC board but they (the management) are being careful on who comes on board. “For now, the only person who has been allowed to join the board is Mr. Timi Alaibe, the former Managing Director of the Niger Delta Development Commission (NDDC), ” he said.

    He added that the refinery’s joint venture board meeting is slated for end of November.

    He noted that the company is making efforts to begin fuel importation. He said their partner has a refinery, which refines products and when they start importing, they would crash the price of petrol as they landing cost would be cheaper.

    He said: “We are set to crash the prices of refined petroleum products imported into the country and bring an end to the national embarrassment often associated with petroleum products scarcity and its attendant hardship on Nigerians. For a start, we will sell petrol at the rate of N75 per litre, which is sold at a subsidised price of N97. “

    Wenke (Jnr), who just returned to the country from a business trip to South Korea and some other Asian countries, said he went to inspect the refinery’s design and other technology to be employed in the building of EPIC refinery and Petroleum industries. He said it is imperative to crash fuel prices the government has a lot of things to do with money, which will be beneficial to Nigerians.

    On how EPIC would crash the prices, Wenke said while waiting for the release of their license from the Department of Petroleum Resources (DPR) before commencing construction, the company has gone ahead and written to the government for approval to bring in refined petroleum products at a rate far below what the current importers are quoting for which the government pays billions of naira as subsidy.

    He said: “The pump price of petrol will be N75 per litre instead of the current N97.After the tour of Asia, we have written to the Ministry of Petroleum Resources and copied the Ministry of Trade and Investment about our intention to help alleviate the sufferings of Nigerians as a result of the high cost of refined petroleum products. We have as partner, a 348,000 barrel daily capacity refinery out there in Asia. We have worked out all the modalities and discovered that the current importers lie to Nigerians about the landing cost of these products. We have put all our cost together and our price for petrol will not be more than N75 per litre.

    “When EPIC refinery comes on stream two years from now, the price of petrol will further be brought down to N65 per litre. We want to help with cheaper refined products before the coming on stream of EPIC refinery whose products will further bring down the price, we sent in out letters last week to the government and await their approval.”

    Wenke said they are not asking for subsidy, all the support they want from the government to get petrol to consumers at N75 is to use the NNPC distribution networks since it is being done with national interest instead of profit motivation.”

    Wenke said there is nothing like cabal. He said the EPIC team has decided to work in line with the requirements of the government and to serve Nigerians.

    “Any responsible citizen should be committed to the good policies that govern his country and this is what the EPIC team stands for and therefore fears nobody,” he said.

    He said the team is doing due diligence on banks to identify the bank that will warehouse the $30 billion which is ready for the entire project.

  • Need to speedy up passage of PIB

    Need to speedy up passage of PIB

    The Petroleum Industry Bill (PIB) has become the subject matter of most of oil and gas industry’s fora. The Ministry of Petroleum Resources under Mrs. Diezani Alison-Madueke is gradually delivering on its promises but the PIB is where the attention ought to focus, writes EMEKA UGWUANYI.

    Hardly does any oil and gas forum hold without a mention of the Petroleum Industry Bill (PIB) and the consequences of its non-passage into law by the National Assembly. As the bill, stands, it doesn’t need only quick passage, it also needs to be thoroughly deliberated upon so that on passage it should be a balanced Act that would benefit all stakeholders in order to attract the desired investments into the oil and gas industry.

    The non-passage of the PIB, according to experts, is responsible for lack of new investment in the upstream sector of the industry in the last couple of years. Industry operators had continued to stress the diversion of investment in the sector to Ghana, Angola, Equitorial Guinea, and Mozambique as well as other emerging countries where oil have been found.

    The Minister of Petroleum Resources made efforts in the past even to the point that she assured Nigerians that the bill would be passed into law by the sixth assembly. But the efforts and promises were fruitless as the National Assembly could not pass it. Nigerians are expectant that the seventh assembly would make history by deliberating on the document and passing it into law. The ministry, it was learnt, has begun to make fresh efforts to see the passage of the bill.

    Upstream

    The Director, Department of Petroleum Resources (DPR), Osten Olorunsola, at a forum said that in the past five years no new investment has been made in the upstream sector. He also noted that in recent times oil is being found in commercial quantities in many parts of Africa apart from countries in the Gulf of Guinea, an area believed to be still holding substantial reserves of hydrocarbon. He said that the earlier Nigeria maximizes the benefits of this natural resources, the better for all Nigerians because investors including those in Nigeria are increasingly considering all these emerging options.

    The implication of this development is that as there is no exploration, the country depends on existing reserves. When the reserves are depleted without replacement, we should be worried as a country, said the President of the Nigerian Association of Petroleum Explorationists (NAPE), Dr. Afe Mayowa.

    Mayowa said that there was urgent need to replace consumption through aggressive exploration to ensure growth in reserves, energy security and sustained revenue inflow, especially as the country’s main source of revenue is oil and gas.

    According to these experts, the passage of PIB is the only reliable option to unlock the potentials of the petroleum sector as well as the attendant benefits for Nigerians. The PIB, which when passed into law, is believed would remove the bottlenecks, bureaucracies and inefficiencies associated with government controlled entities. It as it would also release many agencies and policies from the strangle-hold of the government.

    Alison-Madueke constituted committees made up of experts to work on the bill before it was submitted to the National Assembly for consideration. The essence of the committees’ inputs is to address some grey areas and contentious provisions.

    Downstream

    With what has been happening in the downstream sector of the industry since the beginning of the year especially the marketing arm, the probe and counter probe of transactions necessitated by the House of Representatives’ adhoc committee’s oil subsidy programme probe, which unveiled the rot in the sector, transparency is gradually being engendered into the downstream.

    The passage of PIB will bring about deregulation, which will open up the downstream and put an end to the undue fleecing of Nigerians by a few marketers and privileged Nigerians. In the past couple of weeks, fuel scarcity has been lingering in different parts of the country because it is the Nigerian National Petroleum Corporation (NNPC) alone that has been importing petrol. The marketers have refused to import as a result of non-payment of their outstanding subsidy claims put at about N200 billion. Some retail outlets have in view of the fuel scarcity been selling the product above the regulated pump price of N97 per litre. Some stations sell at between N110 and N140 per litre in the hinterland.

    Besides, some unscrupulous people cash in on the situation to sell adulterated fuel to the unsuspecting motorists, while others hawk the products at exorbitant prices. According to industry operators, the passage of the PIB would address the problems.

    Gas development

    In the power sector, there has been a significant improvement in power supply following increased gas supply to thermal power plants. In the recent past, inadequate gas supply had almost crippled the power sector cutting generation to almost half to a little over 2000 megawatts (MW).

    The Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, in order to ensure increased gas supply to facilitate power generation in the country, had ordered an aggressive implementation of the ongoing 12-month gas emergency timeline for a speedy expansion of the gas-to-power programme, which the international oil companies (IOCs) bought into.

    The minister had pledged the Federal Government’s commitment to work with IOCs to meet the gas to power aspirations. She noted that a speedy gas to power can only be attained if the oil majors work in concert with local Nigerian service providers.

    She said: “We can only build a reliable oil and gas sector through the effective participation of competent Nigerian service providers and operators. Thank God the IOCs and the indigenous companies and some Nigerian professionals are already keying into this opportunity made possible by the Nigerian Content Act.”

    The Managing Director, Shell Petroleum Development Company (SPDC) and chairman Shell Companies in Nigeria, Mutiu Sunmonu, said that Shell has taken adequate steps to improve gas supply to the power plants in the country.

    Sumonu said that the company was already keying into the Federal Government’s 12 months gas emergency plan meant to boost power generation. “We at Shell are committed to realizing government’s gas emergency plan so as to boost gas supply in the country,” he said.

     

  • How to achieve growth in extractive industry

    Unless stakeholders including the private sector and the government engage each other in transparency and accountability, sustaining economic growth in the extractive industries may be a tall dream.

    The High Commissioner of Canada to Nigeria, Chris Cooter disclosed this at a seminar on Corporate Social Responsibility (CSR) in the extractive industries in Lagos.

    At the seminar entitled: Sustainability in the extractive industries: Managing your value chain, Cooter noted that the bane of the extractive industries over the years has been the absence of early and open engagement among stakeholders including communities, which are affected by oil, gas and mine operations.

    He said the time had come for stakeholders to collaborate to ensure that most operations in the oil, gas and mining industries were carried out in line with international best practices and standards.

    Cooter said the era of shrouding the sectors’ activities in secrecy had to be dispensed with if the desired growth was to take place through investments.

    He assured of his country’s desire to support Nigeria in its quest to entrench accountability and transparency in the management and administration of its abundant natural resources by providing the template adopted by his country and other advanced countries for consideration for use.

    Besides, he said Canada is poised to bring more investments to shore up its $3billion worth of investments that had been made in the country. “So far, we have attained a major feat in our business relationship with Nigeria going by the kind of investments that we have brought here. The fact is that trade values have tripled during this period while investment is growing rapidly by the day. We are also expecting that significant new investments will come very soon to increase the $3 billion worth of investments that has been made already,” he said.

    He noted that the business relationship between the countries was expected to grow by the recent launch of the bi-national commission, which was signed sometimes in April.

    The high commissioner said the commission, which focuses on security, economic and critical components of the economy would provide the framework for adding momentum to the business relationship between the two countries to facilitate opportunities, particularly in the extractive industries.

    The General Manager, Policy, Government and Public Affairs (PGPA), Chevron Nigeria Limited, Deji Haastrup,said sustaining growth in the extractive industries should not be left to private sector as the government and other stakeholders, including Non-Governmental Organisations (NGOs) had roles to play in ensuring that the huge revenues realised from oil, gas and mining operations were monitored and channelled into other worthwhile projects.

    He also said the country’s future lies in the diversification of the economy and the encouragement of the spirit of entrepreneurship among the youth to reduce over dependence on oil.

    He enjoined stakeholders to work together so that the challenges militating against achieving transparency and accountability in the extractive industries, which include lack of respect for rule of law and sanctity of agreements, poverty, corruption and inadequate infrastructure, can be overcome.

  • Uduaghan to engineers: find solution to power

    The Nigeria Institution of Electrical and Electronics Engineers (NIEEE) has been challenged to find sustainable solutions to the power problems.

    Delta State Governor, Dr. Emmanuel Uduaghan, gave the advice during the Eighth International Conference and Exhibition on Power and Telecommunication (ICEPT 2012) in Warri, Delta State,

    Thr governor, who was represented by the Commissioner for Energy, Charles Emetulu at the event, urged the electrical engineers to devise new ways of tackling the country’s problems.

    The conference’s objective was how to address the problems in power and telecoms sectors, which were identified as the most important sectors the country needs to fix in order to drive development.

    Emetulu said indigeneous engineers were among the best in the world and prayed for guidance to help the engineers come up with solutions to address the energy problems facing the nation.

    The President of Council for Regulation of Engineering in Nigeria (COREN), Ibikunle S. Ogunbayo, who was represented by the Director of Professional Development, Mayas Adoyi, charged the engineers to address the poor services in the telephone and internet by thinking of ways of improving both.

    He said what had been achieved in the telecoms sector was also possible in the power sector. He added that the improvement in energy supply is not a mirage, but it is bound to continue to improve.

    NIEE’s National President, Adekunle Makinde, said the conference’s theme: Transformation in power and telecommunication through public-private partnership, addressed the yearnings of the average Nigerian for better living standards, and identified with the transformation agenda of President Goodluck Jonathan’s administration.

  • PowerCell plans $2m investment in UPS equipment

    An indigenous power solutions company, Powercell Limited, said it plans to invest $2million in Uninterruptible Power Supply (UPS) equipment to ensure that corporate organisations and individuals don’t lose data as a result of power failure or fluctuations.

    UPS system is a device that supplies battery backup power to computers, servers and network equipment, among others.

    The Managing Director of the company, Mr Tayo Balogun, said UPS power backups sub-sector is grossly underutilised as about 85 per cent of the sector remains untapped.

    Balogun, who addressed reporters in Lagos, stressed the importance of UPS in safety of electrical materials and data. He said Powercell is partnering with Newave, which recently teamed up with ABB Group, which is globally known in power construction and equipment.

    Newave is globally known for UPS and it pioneered production of modular UPS – a new technology in the UPS world, which is capable of sustaining small and medium companies and currently, Powercell is the only company licensed to sell its products.

    Balogun said the company has standalone UPS and modular UPS, which exists in single and three phases of 10KVA to 2.7MVA as well as other ranges, adding that before end of this month the first set of products will arrive Nigeria.

    He said: “On capacity building, we are sending our sales engineers to Switzerland for training. Our products are user and pocket friendly because we will sale, maintain and promote Newave products in Nigeria. In the long term, we are also looking to bring Newave to open shop in Nigeria, assemble and manufacture its equipment and some components here. It will help to stall capital flight.

    “At the moment, we are partnering the best power back-up company in the world, Newave, which is a subsidiary of ABB Group. All Newave products are of highest quality and modular UPS is the king of UPS because it enables the user to expand.”

  • NAPIMS backs stakeholders’ alliance to sustain govt’s projects

    NAPIMS backs stakeholders’ alliance to sustain govt’s projects

    The National Petroleum Investment Management Services (NAPIMS), a subsidiary of the Nigerian National Petroleum Corporation (NNPC), has said for government’s projects to be sustained, stakeholders including the benefiting communities, local and state governments, must be involved in protecting such projects.

    Speaking with The Nation during this year’s Shell’s sustainable development and community relations road show and exhibition, with the theme Delivering value together, held in Lagos, the Manager, Public Affairs Department, NAPIMS, Dr. Kennie Obateru, called for the collaboration.

    He stressed the need to engage more of the people who have the traditional responsibility to provide these amenities, including the local and state governments. He noted that those who provide these amenities to the communities cannot run the projects forever.

    According to him, there must be a kind of engagement whereby after the project had been delivered the local/state government that has the traditional responsibility to provide these amenities in the first instances could then take over and run the project that had been delivered.

    He said currently oil companies involve both the local and state governments in whatever projects they do, therefore, the state and local governments as well as the communities have to show appreciation by buying more into these projects through ensuring adequate protection.

    He said: “We get to see why they need to take over and impact of this. We still have instances where even if you go to the communities and ask the local government to provide security they ask you to bring money. I think they have to see themselves as partners rather than doing us a favour because it is about serving the people and they have the constitutional right to serve the people while we also have the responsibility to also give back to the community where we operate.”

    He added that the communities are allowed to pick the projects that they wanted while the company worked with them to deliver the projects

    The Team Leader, Education, Information, Communication and Capacity Building, Shell, Uwem Owomite, agreed that Shell had been in the forefront of the implementation of the Nigerian Content including the provision of finance to local contractors, who according to him, would otherwise not have had the money to do business.

    He said Shell doesn’t only give money to contractors doing business with it, but also to other companies that do business with it, which it would be able to use the finance to help to grow.

    Mr Owomite recalled that Shell had introduced a new scholarship programme called credit to career whereby every year the company takes about 60 brilliant students from host communities who according to him, would not have had access to basic education.

    He added that yearly about 2,700 secondary school pupils get the firm’s scholarships while another 750 students of universities are also awarded, adding that the idea of the road show was to create awareness on what Shell companies in Nigeria are doing.

    “Most often what people hear about Shell is the negative aspect but there are good and positive stories about what the company is doing in the communities and how much it has changed lives and transformed communities through the social performance projects, he said.

     

  • Why power sector privatisation

    Why power sector privatisation

    As the power sector privatisation draws to a close, the protests over the emergence of preferred bidders for the distribution assets may rubbish thes exercise adjudged to be one the most transparent by local and international observers, EMEKA UGWUANYI Assistant Editor (Energy) writes.

    Nigerians are increasingly getting expectant of the day electricity would be stable as the privatisation process of the power sector gets completed by the end of this month.

    The Federal Government as well as other stakeholders believes the takeover of operation and management of the electricity industry would remedy the age long problem of the sector.

    Since the past four decades the power sector has been owned and controlled by the government through the Power Holding Company of Nigeria (PHCN), and despite enormous funds channelled toward improving supply and service delivery, no significant result has been achieved. This informed the government’s decision to privatise the industry.

     

    The selection process

    To ensure that utmost transparency was applied and due diligence process followed in the entire privatisation process, Chairman, Technical Committee of the National Council on Privatisation (NCP), Mr. Atedo Peterside, said in his opening remarks of commercial bids for the privatisation of the PHCN successor distribution companies in Abuja on October 16, 2012, that all the prequalified bidders were given access to the virtual data room from 1st September 2011 to the proposal submission date of July 31, 2012. Pre-qualified bidders were also allowed to visit the distribution companies and physical data rooms that were located within the franchise area of each distribution company, he added.

    To further ensure transparency in the process, Peterside said that the NCP formed three committees to evaluate the bids that were received. Each of the committees had seven members drawn from the following agencies: BPE; Nigeria Electricity Regulatory Commission; Federal Ministry of Power; CPCS Transcom – advisers on the transaction; NEXANT—USAID-funded power sector consultants providing support to the BPE; and NIAF—DFID-funded infrastructure support programme to the Nigerian government.

    Besides, he said the officials of the Economic and Financial Crimes Commission (EFCC), the Independent Corrupt Practices Commission (ICPC) and Directorate of State Security Services (DSSS) also observed the process from bid submission to the conclusion of evaluation. They were therefore witnesses to the fact that all late-comers were turned back.

    Besides, the BPE said the reason the privatisation deadline was shifted from February to October was based on the demand of bidders who had claimed they were not carried along on some issues. The Bureau also said because the privatisation was intended to be market driven, it shifted the deadline to make room for any investor to clarify any issue of his interest.

    Furthermore, state governments already have opportunity to own 30 per cent stake in assets within their areas and the Federal Government promised to release more stakes from its own to the states depending on the quantum of investment they made in the assets.

     

    The protest

    The consortium to which the governments of Edo, Delta, Ondo and Ekiti states have interests – Southern Electricity Distribution Company – was unable to score the highest mark in Aggregate Technical, Commercial and Collection (ATC&C) losses reduction, which was a major test for the bidders and consequently lost to another competitor, Vigeo Power Consortium. The governors of the four states had at a press conference dismissed the result of the privatisation exercise for distribution companies as fraudulent.

    “The entire process was a racket that is inconsistent with running a transparent government. The BPE used a set of criteria that have never been used before,” the governors said.

    Governors Adams Oshiomhole (Edo), Emmanuel Uduaghan (Delta) and Kayode Fayemi (Ekiti) in Abuja last week said that apart from the privatisation process lacking transparency, Vigeo Power Consortium lacks the necessary technical competence and financial capability to run the Benin Disco.

    Oshiomhole said the process was rigged to favour Vigeo because during the technical evaluation of the bid process, Southern Electricity scored 898 points as against Vigeo’s 847 points. He questioned how Vigeo emerged the preferred bidder at last.

    Fayemi said: “Our major complaint is competence. We are disappointed that the company that was awarded the preferred bid has no technical competence and the process by the BPE was not transparent. We are not going to sit idly and show lack of concern because the process was not transparent. We will take that up with those concerned. This is the handiwork of a racket.”

    The three governors said they had made their complaints known to President Goodluck Jonathan.

     

    BPE’s position

    BPE, in a statement, faulted the governors’ position, stating that accusation of a flawed process and irregularities against the privatisation bureau was unfounded and reckless. “The bidding process was transparent and we followed the bible of our transaction in doing that. We did not deviate from the norm when dealing with the bidding. I think the governors are bad losers,” it added.

    In a bid to give the press an opportunity to ask questions about the allegations levelled against the BPE, the Bureau has also slated a press conference that held yesterday.

     

    Vigeo’s defence

    Also reacting to the governors’ statement, the Chief Executive Officer of Global Utilities Management Company Limited (GUMCO), Mr. Abu Ejoor, said that his company, which is Vigeo’s local technical partner, has been involved in virtually all the public-private partnership initiatives in the distribution sub-sector starting from revenue cycle management (RCM). He said RCM is an outsourced management contract, which the company participated and ran in the Shomolu, Ikorodu and Ojodu districts of Ikeja Disco between 2002 and 2007.

    “During this period, the company was involved in the entire revenue cycle management from metering to revenue collection, assisting the zone to boost its revenue collection and reducing commercial losses.

    “In 2006, GUMCO, under the National Prepaid Metering Programme, introduced prepaid metering and billing to Benin Electricity Distribution Company. It started from Benin City and later extended its operations to Warri, Asaba, Ondo and Ekiti.

    “Today GUMCO has presence in all the four states in Benin Disco, helping PHCN in the management of its commercial operations, including vending management. What the company does is to bring management and investment into improving the billing and collection of discos.

    “Of all the companies that bided, only Vigeo Power has local experience in utility management through its local partner GUMCO,” he added.

    On Vigeo’s foreign technical partner, he said the success of the Delhi model in the consortium is NDPL, a Tata Power Delhi distribution company providing efficiency.

    “We believe in the transparency of the process of BPE, the integrity of the members of the bid process, and the trust the president has in them to have given them this herculean task. So it is wrong for anybody to allege that we don’t have experience to run distribution companies,” he said.

    Besides, he said: “With the TATA partnership, a private interest operator in India, stakes for excelling are high. They operate a reform that the Nigerian power sector is modeled around. They have the objective to perform and are not saddled with the bureaucracy of government, the same reason the federal government is running from with the privatization.

    “The foreign technical partner, TPDDL is the success story of the Delhi Reform reducing ATC&C Losses from 50 percent to 11 percent within 10years. The only Industry leader in India and Asia that is known to the world and major international institutions is TPDDL, having won consistently in the last six years the Asian Power Award.”

    The company emerged the preferred bidder for the Benin Disco, for scoring an average technical, commercial and collection (ATC&C) loss reduction projection or efficiency ratio of 21.78 per cent, as against Southern Electricity’s 17.72 per cent.

    The Vigeo Power Consortium is made up companies with track records of successful performance, including Vigeo Holdings, GUMCO, Africa Finance Corporation (AFC) and Tata Power Delhi Distribution Limited (TPDDL).

     

    Stakeholders’ perspective

    The Nigerian Economic Summit Group (NESG) has urged governors of the states that lost out in the bid for the discos not to play politics with the privatisation exercise.

    The Chairman, NESG, Mr. Foluso Phillips, who spoke on behalf of the Group, questioned why the governors are trying to stall the privatisation exercise despite the fact that all the bidders were given equal opportunities.

    He said: “We had a bidding process in which everybody participated. If they (the governors) have a problem with the process, the issues should have been raised at the beginning of the process. Why is it that they are now complaining after the process had been concluded?

    “We are not in a military era. I don’t really know what they are complaining about because they already have 30 per cent stake in the project. Nothing should stop the privatisation exercise because the Summit believes in the deregulation of the Nigerian economy. The whole economy should be deregulated because government in all aspect has shown that it is not capable of running a commercial entity.

    “See what happened in the telecoms sector. We need deregulation so that the private sector can create good jobs and provide better services.”

    Besides, he said States and the Federal Government should not be allowed to be much involved in the power sector because they will not be able to add value.

    “If the states and Federal Government participate, it will be more complicated because they will start fighting themselves over who sits on the board instead of looking at the commercial entity,” he said.

    Frontline financial expert, Mr. Bismarck Rewane also commended the Federal Government for opening up the power sector to private firms. Rewane, who is the Managing Director of Financial Derivatives Company Limited, stated that private owned firms were far better than public owned. “State monopoly is the worst structure in any country. As long as people are paying for what they using, Nigeria will be better off,” he said.

    Chairman, Technical Committee, NCP, Atedo Peterside has also challenged those that lost out to state the specific rules that were breached in the privatisation exercise.

    Peterside, who is also the Chairman of Stanbic/IBTC Bank, said if the losers read and understood the rules of privatization process, they would realize that rules were followed to the latter. He said: “It is sad that in year 2012 some Nigerians will not go and read the rules before they (losers) rush to make comments. The rules (Request for Proposal) are in 72 pages. They should sight which rules were breached. If they read and understood the rules, they will comprehend that the rules were followed to the latter from the very first day of the transactions. They all took part in a race and the final results have not been announced. So, if they are now faulting the entire process, it shows that something is wrong.”

    An engineer and former Executive Director (ED) of the PHCN, Mr. Bisi Oyinloye also said the process for the selection of the Discos was very transparent and urged the BPE to muster enough courage to follow through the entire process.”From what I saw on the television, the process could not have been more transparent than that. Guidelines were given to everybody and they also took a risk. Some quoted low loss rates while others quoted high loss rates. So, I don’t know why the losers are kicking against the process. Nigerians will always be critical but the truth is that everyone was given the guidelines and they all had equal opportunities. The issue thereafter is if the selected distribution companies will be able to meet their loss rates,” he said.

     

    Conclusion

    Given the transparent way the privatisation of the power sector is being handled, President Goodluck Jonathan should be commended for giving the BPE and the National Council on Privatisation (NCP), the political will to privatise the power sector. Mr. President however, should not allow the process to be truncated by political pressure.

    The NCP under the chairmanship of Vice President Namadi Sambo, should also be commended for mustering enough courage to follow through the entire process diligently.

    Some stakeholders are of the view that the 30 per cent allocated to states may be a cog in the wheel of Nigerians’expectations to see quick achievement of stable power supply. They noted that the 30 per cent given to the states can be detrimental to the privatisation process. The governors faulting and questioning the criteria for the selection process will draw the privatisation programme backward because the companies they promoted also had equal opportunities.

    The protest by the governors may also drive away both local and foreign investors needed for the power sector that needs an annual investment of $10billion for the next 10 years.

    The aggrieved governors should demonstrate good sportsmanship and work together with the preferred bidders to fix the power sector problems and provide reliable power supply to Nigerians or in alternative they (governors) should go to court of law to challenge the result instead of threatening to truncate the privatisation programme by making operation difficult for the preferred bidders.

    Also, given the fact the Vigeo Consortium is very familiar with the terrain, having been in operation for over 11 years, it makes logical and economic sense to allow the company to continue in a seamless manner that would further add value to the consumers.

  • UK Group to establish oil and gas firm in Koko

    MOSS Group, an oil and gas company, made up of three investors from the United Kingdom is set to establish a project in Delta State in response to the Federal Government’s call for increased investment in the industry.

    The Chairman/Chief Executive of the company, Mr Steven Igbinose, who disclosed this during an interview with The Nation, said the firm would sanitise the sector by introducing a transparent and people-oriented business. He said: “We are in Nigeria to throw light on what we intend to do in the country. It is an investment, an oil and gas project that we are about to establish in Koko, Delta State. We are building six mega ultra-modern oil tank farms in that oil rich community.”

    He said a careful study of oil business environment revealed that the Koko town is both strategic and central for such business because a major chunk of Nigeria’s oil is produced in Delta State. Consequently, he said citing the project in the community would make things easier for the oil firm and more beneficial to Nigerians.

    On how the company would operate, Igbinose said he envisaged a departure from the norm because they intend to separate the oil company from the rest. “But the main purpose here is that we are trying to establish a business that would be based on pure transparency, which is what will stand us out from other existing firms in the oil and gas industry in the country. The ultimate purpose for our investing in Nigeria is for us to introduce a different business brand that is out of normal in Nigeria.”

    He explained that his group was encouraged by Federal Government’s efforts in addressing some salient issues relating to investment and economic development. He said he would bring his global experience in oil and gas matters to bear on the initiative.

    He said: “We intend to go global with my experience and the right contacts that we have. Having stayed in England for many years and considering the efforts of the Nigerian government in addressing certain anomalies in various sectors, I was inspired to come home and contribute to the economy of our great country. And with me in Nigeria are my friends and co-investors, Neoclis and Garey. They came down with me from the United Kingdom.”

    Igbinose said the firm would be involved in bulk sales and broking as well as developing a network of retail service stations. “There would be a loading gantry with six product pumps that have the capacity to dispense 150,000 litres of petroleum product each per hour. Our oil tanker that is already on ground and the oil tanker fleet is ready too, which will facilitate ship to ship bulk transfer.

    “We are also planning to establish MOSS leisure and wellness centre, medical centre as well as a boxing centre where our youths would be offered international standard training in boxing alongside normal national curricular. We shall also provide the best fire safety system and equipment within the Koko community,” he added.

    He said the project would provide jobs for many and bring development, social welfare and innovative healthcare to the people. “We also intend to go global with our subsidiary firm in UK. With my international investors that will take care of the leisure and ultra-modern boxing school respectively and the right fund at our disposal, we will not disappoint Nigerians. That will be our uniqueness,” he said.

    Explaining reason for choosing Koko, Igbinose said: “I realised that the Koko community is an investment area with rich potentials that were just lying untapped. So, I immediately thought of putting up an oil and gas firm there. I pursued the business idea and got it registered in 2008 as MOSS Petroleum. And being a native, it will afford me ample opportunity to make some positive impact on my people.”