Category: Energy

Oil giant, Shell Plc has paid $4,480,547,560 in taxes, and royalties to the government.

This is contained in its 2021 Sustainability Report, 2022 Industry Associations Climate Review Update and 2021 Payments to Governments Report published in the week.

A breakdown of the payment shows that $2,885,571,789 came from production entitlements, $511,270,685 from taxes and $573,430,812 from royalties while $510,274,274 from fees.

Shell’s Chief Financial Officer, Sinead Gorman, said: “Our operations generate revenue through taxes and royalties for governments around the world.These taxes and royalties are often used by governments to fund essential public services like education, transport and health care.

“Since 2016 Shell has made mandatory disclosures under the UK’s Reports on Payments to Governments Regulations 2014 (amended December 2015). We have published the revenue that our operations generate through taxes and royalties on a voluntary basis since 2012. We believe that being open about our tax payments helps people to understand how much we pay and why.

“In 2021, Shell paid $58.7 billion to governments. We paid $6 billion in corporate income taxes and $6.6 billion in government royalties. In addition, we collected $46.1 billion in excise duties, sales taxes and similar levies on our fuel and other products on behalf of governments.

“The 2021 Payments to Governments Report details payments in 25 countries where Shell has Upstream operations, including the basis of reporting and a breakdown by country. The report is prepared in accordance with the UK’s Reports on Payments to Governments Regulations 2014 (amended December 2015). This is the seventh report issued by Shell under such regulations.

“Shell publishes its Tax Contribution Report. It outlines our approach to taxes paid and cover 99 countries and locations across all our businesses. For the detailed basis of reporting of these publications we refer to the Payments to Governments Report and the Shell Tax Contribution Report.”

Shell has been reporting on sustainability-related performance for 25 years, with the aim of being transparent about activities that are important to investors, governments, and civil society. The 2021 Shell Sustainability Report outlines the progress towards many of its Powering Progress strategic ambitions, and shares related social, safety and environmental performance data.

Renewable energy and energy efficiency are key ingredients for the new phase of power as the global focus is shifting  from fossil fuel to that of cleaner energy use, stakeholders have said

They spoke at the first career fair for the clean energy sector entitled: Energise held in the week.

The fair was designed to facilitate the matching of competences with available opportunities within Nigeria’s clean energy sector.

The Minister of Power, Abubakar Aliyu, represented by the Director, Renewable and Rural Power Access, Abubakar Ali-Dapshima, noted: “The Nigerian renewable energy (RE) and energy efficiency (EE) sector has continued to grow rapidly, leading to a heightened need for a skilled workforce to support the strengthening of power and energy access initiatives of government, sector actors and partners.”

Welcoming participants on behalf of the Renewable Energy and Energy Efficiency Associations – Alliance (REEEA-A) Steering Committee, Dr. Aminu Isa, noted the importance of sectoral collaborations as a key driver of the expected growth in the energy sector.

“As an Alliance of associations within the RE and EE sector, we are very much interested in joining synergy to improve the quality and standards of RE and EE technologies, while also strengthening capacity in terms of knowledge generation and skills distribution,” he said.

The Head of Section, Green and Digital Economy, European Union (EU) Delegation to Nigeria and ECOWAS, Ms Inga Stefanowicz, said: “ Youth and job creation is a major Key Performance Index for the EU in Nigeria and we are happy to support the implementation of this activity that contributes to multiple Sustainable Development Goals in one go, particularly the creation of decent work within the renewable energy and energy efficiency sector to foster economic growth in the country.”

The Head of Programme, Nigerian Energy Support Programme (NESP), Duke Benjamin represented by Olumide Fatoki, Head of Unit, Sustainable Energy Access, NESP, emphasised the commitment of the programme to reinforcing the skills and capacity force in the sector.

“With the support of our funding and implementation partners, this career fair is only the first step we are taking towards establishing a skills-matching collaboration platform that will end up creating career pathways and quality opportunities for the skilled workforce in the rapidly growing power sector,” he said.

The fair was organised, in collaboration with NESP, a technical assistance programme co-funded by the EU, the German Federal Ministry for Economic Cooperation and Development (BMZ) and implemented by Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH and the Federal Ministry of Power.

Human Resources (HR) advisory was provided by Phillips Consulting Limited (pcl.) and West Africa Vocational Education (WAVE), a social venture focused on screening, training, and placing talents.

The fair, which targets two major cities, kickstarted in Lagos with the participation of over 25 firms in the renewable energy and energy efficiency sector and over 115 professionals seeking to pivot or advance their careers in the clean energy sector.

NESP is a 48 million Euro technical assistance programme co-funded by the EU and the BMZ and implemented by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH in collaboration with the FMP. It aims to foster investments for renewable energy and energy efficiency and to improve access to electricity for disadvantaged, rural communities.

There seems to be no solution in sight to the crisis between Lekoil Limited and Lekoil Nigeria, with the former saying it has rejected the offer by the latter to purchase loan in the Oil Prospective Licence (OPL) 310.

It would be recalled that Lekoil  had earlier secured Savannah Investment’s £.9million loan at five per cent per annum interest for the deal, but was stopped by Lekoil Nigeria through litigation.

Subsequently, Lekoil Nigeria, last week, offered to buy the OPL 310 loan and to repay the outstanding amount under the Savannah Energy Investments Limited Convertible Facility Agreement (Savannah and Savannah CFA).

In rejecting the offer, Lekoil Limited maintained that the offer, if accepted, will place the firm in breach of written is binding obligations to Savannah Investment, another party to the deal.

In a statement, the company’s Interim Executive Chairman, Anthony Hawkins, explained: “The offer by Lekoil Nigeria to purchase the OPL 310 loan and the outstanding amount under the Savannah Convertible Facility Agreement is not capable of acceptance as it would put the Company in breach of its legally binding contractual obligations to Savannah.”

Hawkins noted that even if the offer was capable of acceptance, it was not clear that it would be a superior offer. This position, he further explained, is based on the following reasons that Lekoil Nigeria has not demonstrated the capability to fund the offer; it has not, since 2013, shown any evidence of the ability to fund the appraisal and/or development of OPL 310 (the licence for which is due to expire in August 2022 due to inactivity); it would be using Group cash to which the shareholders already have an entitlement to; it has chosen to conduct the negotiation process by way of public announcement rather than private dialogue with the company.

“For these reasons, the offer should not be seen as a serious attempt to provide an alternative to the company and its shareholders but as an attempt to muddy the waters prior to the Extraordinary General Meeting (EGM). I would encourage shareholders to vote by way of proxy at the EGM in favour of the resolutions,” the statement said.

The Board of Directors of Eko Electricity Distribution Company (EKEDC) has announced the appointment of its female  Managing Director/CEO, Dr. Tinuade Sanda.

She takes over from Adeoye Fadeyibi, an engineer, who was in the saddle for four years.

She joined the company in 2013 as the Chief Treasury and Taxation Officer and later became the Chief Accounting Officer.

Sanda, a Fellow of the Institute of Chartered Accountants of Nigeria (ICAN), Institute of Management Consultants, United States and Institute of Professional Financial Managers, London, among other professional bodies, is expected to lead the next phase of EKEDC’s growth by aggressively reducing Aggregate, Technical, Commercial and Collection (ATC&C) losses, increasing energy reliability/availability and improving the Company’s customer satisfaction index.

In similar vein, the Abuja Electricity Distribution Company (AEDC) has  appointed Adeoye Fadeyibi as its new Chief Executive officer.

Fadeyibi, has over 20 years experience, succeeds Akinwumi Bada, who served as AEDC’s Interim Managing Director since last year.

Before joining AEDC, Fadeyibi was the Managing Director of EKEDC (ATC&C) losses.

Also, Kassim Burkullu has been appointed as the new Chief Technical Officer (CTO) of AEDC, replacing Oluwafemi Zacchaeus.

Burkullu, who joined AEDC from Kano Electricity Distribution Company (KEDCO), where he was Head, Corporate Technical Operations Services, brings in over 25 years’ experience.

A statement by AEDC read: “These appointments are necessary steps in further positioning AEDC towards efficiency in customer service delivery and ensuring the effectiveness of turn-around embarked by the new management of the company. Furthermore, these changes will ensure that the strategic vision of the Board is  aligned with how the company operates going forward.”

The Nigerian National Petroleum Company Limited is  working on building pipelines that will deliver gas from Nigeria to Europe.

Its Group Managing Director, Mele Kyari, made this known at the Atlantic Council Global Energy Forum hosted in the United Arab Emirates (UAE).

He stated that Nigeria was moving from dirtier fuel to cleaner energy, adding that gas had been picked by the Federal Government as Nigeria’s transition fuel.

Kyari said: “What we are doing is some kind of replacement such that we move from the dirtier fuel to cleaner fuel which is gas.

“And what we had to do is to build the enormous gas infrastructure required to ensure that there is sufficient supply of gas into the domestic market and provide some for the international market.

“And more than that, within the West African context, you will see that energy inefficiency and poverty that you see in Nigeria is also in many West African countries around us.”

He added: “Therefore, we are trying to see how we can build a network of pipeline infrastructure that will deliver gas and potentially to jump into Europe through Morocco or through Algeria.”

The Minister of State Petroleum Resources, Timipre Sylva, has decried the rapid drop in foreign investment flow to Nigeria’s oil and gas sector.

He equally decried the speed at which Europe has been pushing back against investment in fossil fuel, stressing that the Russia and Ukraine war has thought the world a big lesson, especially in the energy sector.

“One of the biggest problems we have in the sector has been investments. In the last 10 years, over $70 billion worth of investments came to Africa. But, sadly, less than $4 billion came to Nigeria, which is surprisingly the biggest country in Africa. If we cannot attract investments to Nigeria, you know where we are heading,” Sylva told a delegation of the European Union (EU), who paid a visit to his office in Abuja.

Speaking during the visit by EU ambassadors led by Samuela Isopi, Sylva said Nigeria was ready to step in as an alternative gas supplier to Europe but urged the EU to encourage its oil and gas companies such as Shell, Eni, Total Energies to scale up investments.

“One of the things we warned against earlier was the speed at which the EU was taking away investments in fossil fuels.We warned that the speed was faster than they were developing renewable energy. You can see that what we were warning against is what is happening,” he said.

According to Slyva, the absence of fresh investment was stunting the growth of oil and gas in Nigeria and called for a change of attitude if the requests by the EU to increase supplies to Europe are to be realised.

“As of today, our gas reserve is one of the biggest in the world. We have a proven gas reserve of 206 tcf, and if we focus on gas exploitation we can get up to 600 tcf. Nigeria is, arguably, the best territory to invest in. We are already building gas infrastructures such as the Ajaokuta-Kaduna-Kano (AKK) pipeline project, which is expected to take gas to Algeria and the West Africa Gas Pipeline project designed to take gas to Morocco.

“As you can see, we are already building infrastructure that will take gas to Europe. All we need is investments. We acknowledge that there are challenges in the sector but we should partner to help solve the problems,” Sylva said.

He noted that Europe needs a buffer or an alternative source of gas and that Nigeria could work with the continent to create the buffer.

The African Petroleum Producers Organisation (APPO) is hopeful that the Dangote Oil Refinery will cut the continent’s import of petroleum products by about 36 per cent. The APPO also believes that the success of the Dangote Refinery project could serve as incentive for similar projects across Africa, despite the focus on energy transition. Okwy Iroegbu-Chikezie reports.

What would African economies gain when the Dangote Refinery becomes fully operational? Simple! A 36 per cent cut in the continent’s import of petroleum products, thereby saving huge  foreign exchange.

This and the calculation that the refinery shall be supplying over 12 per cent of Africa’s products demand when it becomes operational are reasons that have made the African Petroleum Producers Organisation (APPO) upbeat about the project.

Such prospect has continued to excite APPO Secretary-General Dr. Omar Farouk Ibrahim. According to him, to appreciate the impact that the Dangote Refinery is going to have on African economies, especially on the supply of petroleum products and to some extent the conservation of scarce foreign exchange, a look at some statistics on the continent’s petroleum products demand and supply is in order.

“Africa’s daily petroleum demand is 4.3 million barrels per day (mbd). Of this volume, 57 per cent is produced locally (on the continent) while 43 per cent is imported. When Dangote is fully operational, the percentage of Africa’s products import shall drop to 36 percent. This is even as the total volume of products demand rises to 5.4 mbd. You can therefore see the huge impact that Dangote Refinery shall be making to overall products supply in Africa. Dangote shall be supplying over 12 percent of Africa’s products demand,” Ibrahim explained.

He is, therefore, convinced that the development would mean a huge savings for a continent that has scarce foreign exchange and little to export. Besides, he further noted, it means good savings from buying abroad and from shipping and insurance costs, adding that the success of Dangote Refinery could incentivise the rise of similar projects, irrespective of the race towards energy transition.

Ibrahim also hailed Dangote’s decision to go ahead with the construction of crude oil refinery despite a campaign against fossil fuels, adding that the demand for fossil fuel is going to continue for several decades to come.

“We believe that Dangote made a very wise decision to proceed with the project, despite the campaign against fossil fuels. There will be demand for petroleum products for many decades to come. Indeed, we see petroleum products prices rising steadily in the next few years for at least two decades.

“This is because new refineries are not coming up in Europe and North America, where Africa imports 34 percent of its supplies, because their governments have embraced energy transition, some willingly, others due to pressure. So, some of the sources of Africa’s imports are going to dry up. At the same time, Africa will not be in a position to fast track the development of non-fossil fuels.

“In fact, even the developed countries will not be able to move as fast as is projected. We see Africa and many regions of the world continuing to rely on fossil fuel energy at a time when deliberate decisions are being made to stop funding fossil fuel projects. The world risks abandoning fossil for renewable, but in the end not getting the renewables, and at the same time losing the fossils due to deliberate neglect”, he explained.

Ibrahim urged African refiners to invest more on technology and develop the right expertise to manage their refineries, which would serve the continent as western refiners halt the establishment of more refineries.

He stated:“African refiners have no cause to worry about their investments. All they need to do is to ensure that they have developed the right expertise to manage their refineries, get honest managers and staff to run their business and come together to join APPO’s initiative to establish foundries and other equipment manufacturing plants to service their refineries. Once they have these, the market is there for their products.

“For the next three decades or more, Africa shall continue to use fossil fuel-driven vehicles and with its population projected to double within that period, there will be a huge market for petroleum products. Africa cannot rapidly transit into electric vehicles, as the bulk of the vehicles on our roads today and in the next 20-30 years are going to be non-electric. There is the market, and we should not be discouraged from thinking positively,” the APPO scribe noted.

He said APPO is working with its Member Countries to construct cross border energy infrastructure like pipelines for crude and products as well as for oil and gas terminals, depots etc.

“Once we have this infrastructure on the ground, the markets for African refiners shall not be limited to their home countries. Fortuitously, the African Continental Free Trade Agreement, which came into force in 2021, is there to support this initiative,” he added.

Eggheads of power agencies have met to find ways to ensure stability in electricity supply. While the meeting emphasised that there is a statutory electricity tariff review every six months, it also discussed efforts being made to stabilise the commodity across the three levels of generation, transmission and distribution across the country, MUYIWA LUCAS reports.

For electricity consumers, the ripple effect of other economic factors prevalent in the country will ensure that they pay more for electricity consumption.

This is because the Nigerian Electricity Regulatory Commission (NERC) has made it clear that it will conduct a minor tariff review every six months to reflect the economic situation, especially given the disparity between the local currency- the naira and other major international currencies, especially the United States dollar.

NERC Chairman, Sanusi Garba,  explained that the minor tariff review approved for the DisCos was in line with the tariff methodology adopted by NERC for periodic adjustments of tariffs based on inflation, exchange rates and gas pricing.

“We will adjust the rate every six months to take care of the foreign exchange component of costs, and also inflation.This is absolutely a very straight-forward thing,” Garba said. He debunked the insinuation that the Commission was implementing tariff review in secrecy.

Garba, however, added a caveat that while the review “might not necessarily be an upward review,” the country’s foreign exchange rate has maintained an upward path as the naira is being devalued. Inflation, he said, has also remained on the high side.

The implication of this, experts explained, is that should these economic indexes continue to rise, then the electricity tariff review would have to follow a similar trend and vice-versa.

Garba noted that the prevailing situation, especially pipelines vandalism, has been affecting gas supply to power plants, adding that the development remained a major reason for the worsening state of electricity in the country. He said discussions are on to bring new gas plants on the grid to address the shortfall currently being witnessed in the grid.

The commission blamed the loss of about 400 megawatts and challenges on some networks for the double collapse of the grid recently. According to him, stakeholders, including the Nigerian National Petroleum Company Limited, are working hard to resolve prevailing challenges.

The NERC boss said Distribution Companies (DisCos) are being forced to pay back to consumers where they have been billed illegally, adding that the company will do everything possible to protect the interest of consumers. For instance, NERC, he said, ensured that Jos DisCo refunded N200 million to consumers for poor service, adding that capping of estimated bills is also to protect consumers against arbitrary charges. Admitting that the generation firms are being owed legacy debts, he noted that the government is clearing other debts.

Garba said the issue of shortage of gas supply to power plants, collapse of the national grid, illiquidity of the industry, huge metering gap and infrastructure deficit were some of the challenges confronting the sector.

He said the plan of the government was to ensure that the thermal power plants were working optimally and to ensure that there was stability in the grid.

Garba said NERC had approved a special gas pricing for emergency contracting of gas from the Nigerian Gas Marketing Company Limited for the Niger Delta Power Holding Company (NPDHC), to optimise utilisation of its power plants.

According to him, it is expected that about 800MW will be generated from the NDPHC plants.

He said the gas pipeline affected by acts of vandalism had been restored and the Okpai Power Plant had resumed power generation and  contributing an average of 300MW. He added that the “pegging” of the gas pipeline supplying gas to the Odukpani Power Plant had been scheduled for completion thus ramping up generation by about 400MW.

On metering, the NERC boss made it known that about 900,000 prepaid meters were installed for customers under the Phase Zero of the National Mass Metering Programme (NMMP) of the Federal Government. He said engagement was ongoing with local meter manufacturers for the implementation of the phase one of the programme which had a target of four million meters.

Besides, he said the World Bank was also providing finance for another four million meters which would help the nation close the metering gap with about eight million meters in the next three years.

NERC, he further added, had approved a five-year Performance Improvement Plans for the DisCos which would lead to more investments in electricity distribution to end-users.

Similarly, the Managing Director, Transmission Company of Nigeria (TCN), Mr Sule Abdulaziz, said the  administration had spent over N1 trillion on strengthening the transmission network.

He said the TCN had the capacity to wheel 8,000MW but was receiving 3,500MW from the GenCos.

Apologising for the recent system collapse of the national grid, he noted that it was caused by several factors but the most important thing was the restoration period.

He noted that contrary to public perception, the collapse of the grid had reduced in the past few years. Justifying the reduction claims, Abdulaziz recalled that the grid collapsed 12 times in 2018, nine times in 2019, four times in 2020, twice in 2021 and so far, three times this year.

The Minister of Power, Abubakar Aliyu, noted that the challenges of electricity supply were being resolved with the restoration of normal operations.

According to him, the energy crisis confronting some key sectors also contributed to the problems in the power sector.

“We are where we are also because of the increasing vandalism of pipelines that also supply gas to the power plants. This, too, is being resolved in collaboration with the relevant agencies. NNPC and other gas suppliers are working relentlessly to restore gas supply for optimum power supply. The government is doing everything – working with the relevant security agencies – to stop vandalism of pipelines,” Aliyu said.

The minister said the challenges do not in any way indicate that the  rehabilitation of the national grid by the government is not yielding results, adding that despite the challenges, the government was recording successes and the grid is being restored to full operation.

He, therefore, solicited the support of Nigerians, stressing that efforts would continue to be made towards increasing and stabilising electricity supply across the country.

Power Generation Companies (GenCos) have lambasted the Nigerian Bulk Electricity Trading Company over claims that the investors were duly paid.

In a statement, the GenCos accused NBET of redirecting the focus from its  obligations, which has thrown the GenCos in a financial quagmire, by focusing its insistence on the payments from the Payment Assurance Facility (PAF).

“It is imperative to state that the PAF payments were never envisioned in the power purchase agreement (PPA). However, due to the bulk trader’s inability to fulfill its payment obligations, the Federal Government introduced the PAFs as interventions. Nevertheless, these interventions neither fully settled (dual involvement of capacity and energy) the GenCos’ invoices nor settled the historical debts,” the GenCos said.

The Coalition for Affordable and Regular Electricity (CARE), has lampooned the leadership of the Nigeria Labour Congress (NLC) and the Trade Union Congress of Nigeria (TUC), saying it has betrayed the people by allowing the government to withdraw electricity subsidy.

The group, in a statement, stated that the action of the union leaders is a punishment for hundreds of thousands of workers in the country who will now forcefully pay higher tariffs twice yearly as power companies now have the liberty to hike tariff periodically.

Coordinator of the group, Chinedu Bosah and national secretary, Soyombo Monsuru, in the statement expressed discontent over the situation in the power sector and the failure of the labour leaders to protest incremental tariffs therein.

The statement read: “The most worrisome is the fact that the President of the Nigeria Labour Congress (NLC), Ayuba Wabba, the President of the Trade Union Congress (TUC), Quadri Olaleye and other key labour leaders have kept quiet only for the government to quietly remove the so-called subsidy that practically implies that power companies can go-ahead to increase tariff so often and unjustifiably.

“Labour leaders threatened to embark on strike on September 28, 2020 over increment in the price of electricity and petrol only to back down and resorted to talks with the government. Talks with the government led to the setting up of a Technical Committee comprising six representatives of government / DisCos and three representatives of NLC and TUC. However, CARE regrets that the only thing labour leaders got from the talks was a delay in the implementation of the then tariff hike for a month and government acceptance to have labour represented in NERC.

According to the group, labour leaders have agreed with the government to have electricity tariff increased so often despite growing poverty and cost of living. It also said  labour leaders went into talks with the government but never reported back to Nigerian workers on what was agreed upon as they have chosen to remain quiet.

It is the same manner NLC and TUC barked for a struggle but refused to bite and undemocratically called off strikes. In October 2020, labour unfortunately and openly endorsed privatisation and deregulation and so, it is not shocking to endorse tariff hikes, though quietly. Labour leaders have left the flood gate open for numerous attacks on the working people. “Diesel and kerosene have been deregulated and the prices have steadily moved up and currently, about 720 per litre and over N500 per litre respectively and this does not worry labour leaders.” It added that there have been three electricity tariff hikes since NLC threatened to go  on strike in September 2020 but labour leaders have quietly looked the other way.

The group also carpeted government’s claim that it was subsidising the power sector, saying in reality, the government was only bailing out the corruption, expensive lifestyle of the directors and top managers and unsustainable debts incurred by the power companies.

It noted  that the N6 billion released by Central Bank of Nigeria (CBN) to the Ibadan Electricity Distribution Company (IBEDC) was subjected to insiders abuse and sharp practices in 2017 wherein IBEDC gave a loan of about N6 billion to its parent company (Integrated Energy Distribution and Marketing Group).

It said: “In a profit-first system there will always be unjust hikes in petrol and electricity prices just like other essential commodities. The bourgeois ruling class and their private collaborators always clamour for higher rates and prices to guarantee super profit. The power companies have shown obvious incapacity to develop the sector, they are only interested in higher tariff and outrageous estimated billing while power infrastructure and facilities are in decrepit conditions triggering incessant system collapse and leaving communities mostly in darkness. In fact, hike in tariff is a reward for failure and inefficiency. “In the last 15 years, the government has spent over $15 billion on power and nothing to show for it fundamentally except darkness. Since the power sector was privatised in November 2013, electricity tariff has been steadily hiked from about N12.50 to about N48 representing a whopping 280 percent increment.”