Category: Energy

  • Total Nigeria’s new helmsman resumes

    Total Nigeria’s new helmsman resumes

    The new Managing Director of Total Nigeria Plc, Dr. Samba Seye, has assumed duties. He replaced Mr.  Imrane Barry, who has been re-assigned to TotalEnergies SE Headquarters, Paris, France.

    Seye holds a doctorate in Fluid Mechanics from the University of Sciences and Techniques,  Lille, France, where he worked as an assistant lecturer from 1990 until 1993, before joining Shell.

    At Shell, he worked in various capacities. In 2014, he joined Total Marketing and Services as a project manager in the Strategy Department.

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    In 2015, he was appointed deputy executive vice president, West Africa, a position he held until his appointment as vice- president, Specialties/General Trade Total MS /Africa, in 2016.

    Thereafter, he was appointed Executive Vice President West Africa, Total MS /Africa, in 2017. He has been a member of the TotalEnergies SE Ethics Committee since 2019.

    Seye is coming at a time when TotalEnergies remains the only International Oil Company (IOC) in the country’s downstream oil sub-sector. It further noted that given his experience, the new helmsman is set to lead a company that has weathered the storms in the sector, as capitalise on the business advantage in the Petroleum Industry Act (PIA) to move the company to a greater height.

  • NEMSA to revive legacy assets

    NEMSA to revive legacy assets

    The Minister of State for Power, Goddy Agba, has assured Nigerians of better service.

    Agba gave this assurance during a tour by the Governing Board of the Nigerian Electricity management Services Agency (NEMSA) of facilities it inherited from the defunct National Electric Power Authority (NEPA).

    The tour took the minister to the Ijora facility of the agency, including its chemical laboratory in the same complex.

    “The essence of this tour is to see what facilities NEMSA has and with a view to improving them for better services to Nigerians. I have come, I have seen and I will go and consider. I think it is possible to reactivate most of these things that have broken down here with a view to making it better for the people. For instance, we can reactivate the transformer repair centre and we can use it to improve our transformer processing. If that place works we should be able to repair our transformer internally and we use that for the local communities to boost power in those communities. If we fix what we have seen we should have better services for the Nigerians,”Agba said.

    Read Also; Electricity consumer groups task new power minister

    The Chairman of the Governing Board, Suleiman Yahaya, said the agency’s tour of the facility was aimed at assessing how its legacy assets can be revived.

    “We came to see how we can revive all the legacy assets transferred to NEMSA at the onset to make them work. Most of what we are seeing here looks like scraps, but they can be turned around to generate revenue for the agency. We have resolved to make good use of all the facilities we have seen today especially the central workshop, we have a jetty there which can be very useful to us and also generate good revenue,” Yahaya said, adding that the agency has done its homework and is confident to make everything work and position itself as an attraction for investors.’’

    NEMSA Managing Director, Peter Ewesan, said the tour was aimed at ensuring that the agency delivered on its mandate to Nigerians. He explained that the agency had conceived what government could and could not do.

    He said NEMSA was working on the idea of a public-private partnership (PPP), which he reckoned has the minister of state’s nod, especially in areas which are not key for the operator. For example, the printing  press facility, though not part of the agency’s core mandate, can be a revenue generating asset to the firm if  an investor could be got on a PPP basis, he explained.

    “These facilities were used when power was solely in the hands of government. So the facilities were really needed then to ensure good turnaround; but now, we are thinking of turning it around to generate revenue. It doesn’t have direct consequences on our operations as spelt out in our mandate. When it was solely one business – generating, transmitting and distributing – then it was understandable and the facility then was required. But, as it is now, it really doesn’t have much impact on us other than for us to use it for revenue generation. It has now been privatised,” he added.

    Ewesan said it was the responsibility of the agency to ensure the technical enforcement of standards on any equipment – mechanical or electrical- used for producing electricity. For example, he said, only meters that have been tested and certified by NEMSA were allowed for use.

    This is aside ensuring that power supply from the grid gets to consumers safely through stable and safe networks.

  • LPG: The new burden

    LPG: The new burden

    The rising cost of cooking gas across the country has been blamed on the shortfall in supply and the exchange rate of the naira against other currencies. But events on the international scene are indicative of what lies ahead in the global market, MUYIWA LUCAS reports.

    It has become worrisome among the populace. Over the last one month, the cost of filling a 12.5kg cylinder of the Liquefied Petroleum Gas (LPG) has risen by over 50 per cent.

    But aside the cost of the commodity, consumers have complained of the rate at which the gas gets exhausted.  For instance, at an Nigerian National Petroleum Corporation (NNPC) filling station in Lagos, a 12.5kg gas cylinder sold for N6,000. In Arepo, a sprawling suburb along the Lagos-Ibadan Expressway, the same sold for N6,500. About a month ago, the commodity sold for N4,200.

    More gas, less availability

    The volume of available gas in the country, according to the Department of Petroleum Resources (DPR) as at June, this year, stood at 206.53 trillion cubic feet. The figure, which represents a marginal increase of 1.16tcf or 0.57 per cent from the 202tcf recorded in 2019, implies a growth of over three trillion.

    But given the volume of gas reserves in the country, would it not have been right if gas is sold at a more reduced rate? Experts in the sector hold divergent views on this.

    For instance, the Chairman, Nigeria Gas Association (NGA), Ed Ubong, at the Nigeria International Petroleum Summit last June in Abuja, agreed that the country might be sitting on a large reserve of gas, but wondered what her production capacity of same was.

    “Nigeria is sitting on a large, huge resource base of gas, but how much gas are we producing? We are a Top 10 country when we talk of what we have, but when you talk of what we are actually producing, we begin to sit back, we are in the top 20 range. Gas only accounts for five per cent of Africa energy mix,” he said.

    Statistics from the NNPC indicated that, in April, this year, 209.27billion cubic feet (bcf) of natural gas was produced, translating to an average daily production of 6,975.72 million standard cubic feet per day (mmscfd). It further revealed the natural gas off-take, whether commercialisation or utilisation, out of the 206.40bcf supplied,  126.83bcf was commercialised, consisting of 42.92bcf and 83.91bcf for the domestic and export markets. These translate to 1,430.90mmscfd of gas to the domestic market and 2,976.94mmscfd supplied to the export market for the month.

    NLNG’s efforts

    There has, however, been blame trading on the development. For instance, stakeholders said the shortfall in gas supply led to the high cost of the commodity.

    DPR Director, Auwalu Sarki, said at the Nigeria International Petroleum Summit, last June, in Abuja, that indigenous oil and gas firms were contributing about 30 per cent of gas reserves.

    The Nigeria LNG Limited (NLNG) says it is not responsible for the supply shortfall of LPG, also known as cooking gas, and the consequent price hike across the country.

    A statement by its General Manager, External Relations and Sustainable Development, Mrs. Eyono Fatayi-Williams, said it was grossly inaccurate to state that NLNG produced 22 million tonnes per annum (MTPA) of LPG.

    According to her, NLNG is primarily an export company that produces 22 MTPA of Liquefied Natural Gas (LNG) and five MTPA of Natural Gas Liquids (NGLs).

    She said: “The price of LPG in the domestic market is dependent on several factors, including the forces of demand and supply. According to her, on the supply side, NLNG plays a pivotal role in the Nigerian domestic LPG market in line with the commitment it made to help deepen the market. This commitment, she explained, made the firm to recently increase the volume of its annual commitment to the market from 350,000 to 450,000 metric tons, which is about 100 per cent of its Butane production.

    “Butane gas is less volatile and is, therefore, suitable for cooking. In 2020 alone, NLNG supplied over 80 per cent of its LPG sales (Butane/cooking gas) to the Nigerian market. By committing 100 per cent of its Butane production, NLNG has prioritised the domestic market, thus realising its domestic supply target safely,” Mrs Fatayi-Williams said, adding that NLNG’s maximum Butane production meets about 40 per cent of domestic demand.

    She further said to achieve NLNG’s aspiration for the domestic supply, a dedicated 13,000 metric tonne vessel, LPG Alfred Temile, delivers the product to the market through Lagos and Port Harcourt terminals. However, the vessel’s delivery to these terminals is occasionally hampered by challenges at the terminal, including storage capacity, terminal access, draft restrictions and prioritisation of other products over LPG.

    Pricing

    Several factors are said to determine the cost of gas. They include the Value Added Tax, Forex, etc., which impact the pricing of the product even as indexed to the international pricing model.

    “NLNG’s domestic LPG pricing is most competitive compared to all other alternatives (imported and domestic supply),” Mrs. Fatayi-Williams said.

    She noted that NLNG’s drive towards deepening the domestic LPG market was pivotal in line with its vision of helping to build a better Nigeria, saying the company was optimistic that the completion of its Train 7 Project would further deepen the domestic LPG market.

    Global trend

    Globally, having cheap natural gas may have become a thing of the past. According to a report by Oilprice.com, the era of cheap natural gas might be gone for good.  U.S. natural gas futures climbed to a 31-month high of 4.16/MMBtu at some point, especially occasioned by forecasts for hotter weather over the next two weeks and soaring global gas prices ensuring that U.S. liquefied natural gas (LNG) exports will remain at record highs. It is being projected that average gas demand, including exports, will climb from 90.9 bcfd in the current week to 94.5 bcfd next week as cooling demand keeps rising. The report further showed that between January and June, this year, U.S. LNG exports jumped by 42 percent year-on-year to an average of 9.6 billion cubic feet per day (Bcf/d), compared with the first half of 2020. Asia remained the top buyer of U.S. LNG, accounting for 46 per cent of exports through the end of May.

  • AOS Orwell completes Shell ANOH ICSS project

    AOS Orwell completes Shell ANOH ICSS project

    AN indigenous oilfield and energy servicing company, AOS Orwell, has completed an Integrated Factory Acceptance Test (IFAT) for Shell ANOH Integrated Control and Safety System (ICSS) project.

    This feat, which started at AOS Orwell’s ICSS facility in Port Harcourt, the Rivers State capital, was concluded at the Onne Free Zone Port, with the IFAT.

    The final delivery of the project will take place at the project site located at the Assa North-Ohaji South (ANOH) in the Ohaji- Egbema Local Government Area of Imo State.

    The project, which sits on 200 hectares extending in 719.84km square meter, is located approximately 25km from Owerri and 75km from Port Harcourt. Stakeholders in the sector have, however, described the project as one of the largest “Greenfield gas condensate” development project to have been undertaken in the country.

    For instance, the Project Lead at AOS Orwell, Abumenre Odigie, an engineer, explained that the entire project was executed by his firm in collaboration with Emerson. “AOS Orwell has been a very instrumental partner to Shell for the delivery of the scope for the ICSS and our management is so delighted to have been part of this project; in fact, it speaks to capacity development and contribution to the local content initiative of the Nigerian Content Development and Management Board (NCDMB),” Odigie said.

    He noted that the firm is proud to be part of the prestigious project, adding that, in conjunction with its technical partner, Emerson, it has been responsible for the delivery of the Integrated Control & Safety System (ICSS) project scope. Odigie further revealed that AOS Orwell is continuously propelled by the unflinching backing from NCDMB in its resolve to deliver on true local content on all projects as demonstrated on the ANOH project.

    “The project has further demonstrated AOS Orwell’s management commitment to continue to support the local content initiative of the Federal Government/NCDMB,” he added.

    Read Also:  NPDC, Ogoni collaborate on production

    Similarly, Shell Petroleum Development Company (SPDC), project representative, Babalola Adewale, said the firm is proud to have worked with the duo on the projecr, describing the delivery of the as “sterling.”

    “AOS Orwell, partnering Emerson in delivering the entire suite of the control system, is remarkable and for the first time, most of the fabrication and testing including some standardisation of ATEX certification were done locally by AOS Orwell. Beyond this, the entire project was seamless, with the firm demonstrating world class delivery and we are happy with what we have seen so far,” he said.

    The Department of Petroleum Resources (DPR) representative on the project, Emmanuel Akinyemi, also praised the firm for being the driver of the project. He said the DPR, as a government representative, is proud to have supported the Nigerian Local Content, which he said, constituted an integral part of the project.

    “Our aim is to make sure that as business enablers we empower and encourage organisations like this to do more than what they are currently doing. This project is a proof that going forward, we can say beyond boundary what we are capable of doing in-country regardless of  where any partner is located, we can deliver world class projects and the result can show for itself,” Akinyemi said.

    The overall ICSS scope comprised the delivery of a suite of Distributed Control System (DCS), Instrumented Protective System (IPS) and the Fire and Gas System (FGS) subsystems for the monitoring, control and safeguarding of the production facility.

    AOS Orwell’s scope covered the engineering, procurement, assembly, fabrication and testing of the ICSS cabinets and provision of other ancillary products and services. The assembly, fabrication and testing of the ICSS cabinets were locally executed at AOS Orwell’s ICSS Cabinet assembly facility located in Trans Amadi, Port Harcourt, in compliance with the local content requirement. The overall assembly, fabrication and testing activities brought together Nigerian nationals with various skill sets all knitted together to deliver on the project expectation.

  •  NPDC, Ogoni collaborate on production

     NPDC, Ogoni collaborate on production

    After an initial disagreement on resumption of exploration and production in its community, leaders of Ogoniland, Rivers State, under the auspices of the Ogoni Liberation Initiative (OLI), have pledged to cooperate with the Nigerian Petroleum Development Company (NPDC) in the exploration and production of oil and gas resources in its territory.

    The pledge was made at the Ogoni Liberation Day, which held in Bori earlier in the week.

    OLI convener Revd. Douglas Fabeke commended the Court of Appeal for the judgment confirming NPDC as the valid operator of Oil Mining Lease (OML) 11, stressing that the Ogoni people welcomed with joy the intervention of the Federal Government and the takeover of the assets by NPDC following the Appeal Court judgment in Abuja.

    He said the judgment that handed OML11 to NPDC was liberation for the Ogoni people, stressing that the people of Ogoni have “looked forward to this freedom over the years”.

    He further praised President Muhammadu Buhari for his administration’s commitment to the development of Ogoniland, adding that his people would support efforts aimed at restoring the environment and exploring its huge natural resources for the benefit of all.

    “The Ogoni people are ready for oil and gas business in the land to entrench development in partnership with the NNPC and the Federal Government of Nigeria through a transformed template and practical community development delivered by the host communities. The Ogoni people are ready to do all forms of businesses with the State, Federal and Global Corporate Communities for the development of their land, provided the business is anchored upon Ogoni development,” he said, adding that Ogoni leaders have resolved to eschew bitterness and work with the Federal Government to ensure that the people benefited from the resources in their land.

    Fabeke presented a communique on behalf of the people of Ogoni to the Federal Government as the request of Ogoni people and as condition for the mutual relationship between the people and NPDC. The communique, among other things, requested that “the issue of clean-up in Ogoniland should be re-visited and the government should mandate the handling agency to expedite actions and clean the land in tune with the UNEP Report’s recommendation or allow the Ogoni people to bring experts that would perfectly implement the recommendations of the UNEP Report to the letter”.

    It also called on the Federal Government to expedite action on the provisions of infrastructure to the Ogoni people. He warned that his people would not work under any political manipulation that would affect the development and smooth operation in the land without capturing the interest of the people. “We stand by every word drafted here and will implement it to the letter, and also ready to give the Federal Government maximum cooperation to achieve its aim for the success and benefit of the nation and the Ogoni people.” the communique stated.

    Read Also: NECA: Closely monitor PIA implementation

    The Managing Director of NPDC, Mr. Mohammed Ali-Zarah, said the NDPC understood the yearnings of the Ogoni and shared in their pain. He said NPDC and the Federal Government would work with the Ogoni to bring development, employment and growth to the land, remediate the environment and ensure that future exploration and production did not impact negatively on the environment.

    The NDPC boss noted that the large turn-out of people, including traditional rulers at the event, was a huge moral boost to NPDC’s confidence in its re-entry plan. “Indeed, this is a clear testimonial and demonstration of the strong cordial relationship that has existed between us over the years. This, for us, is our social license to operate in this peace-loving community,” he said.

    He said it was in the best interest of the country to restore Ogoniland and create the needed condition for the social economic development of the communities.

    “As a viable partner, we would join you to pursue the greater good of our people and the nation. We stand with you and would work with you to achieve this within the shortest possible time,” he said.

    On the communique, Ali-Zarah said he would send the document to the management of the Nigerian National Petroleum Corporation for transmission to the relevant quarters, including the Presidency.

    Oil production operations were suspended in Ogoniland in the early 1990s due to disruptions caused by local unrest. The oilfields and other installations have since largely remained dormant.

    Hope was, however, rekindled last week following the Appeal Court judgment that paved the way for NPDC to take over oil assets in Ogoniland from Shell.

    The Appeal Court sitting in Abuja upturned the August 23, 2019, ruling of the Federal High Court, Abuja which held that the Shell Petroleum Development Company (SPDC) was entitled to the renewal of the Lease on OML 11.

    In the ruling, the Appellate Court held that the Minister of Petroleum Resources has the discretion whether or not to renew the OML 11 Lease in favour of SPDC. The court further held that the minister rightly exercised his discretion in awarding the OML 11 Lease to NPDC, a subsidiary of the Nigeria National Petroleum Corporation (NNPC)

     

  • NNPC and burden of ‘subsidy’

    NNPC and burden of ‘subsidy’

    Amid fluctuating crude oil prices in the international market, landing cost of petroleum products has continued to rise. This has been further compounded by the weakening of the naira against the dollar. How long can the Nigeria National Petroleum Corporation (NNPC) continue to apply the brakes on the pricing mechanism of the commodity? asks MUYIWA LUCAS.

    Until last week when it experienced a slip, crude oil price enjoyed some form of stability, peaking at $72.83 per barrel last June – the highest since May 20, 2019. Earlier in the week, oil prices rose more than five per cent as a weaker dollar and strong global equities markets boosted crude futures after seven days of declines. Brent crude climbed $3.64, or 5.6 per cent, to $68.82 a barrel.

    For the country, the rising price of crude represents a double-edged sword. While it guarantees increased revenue for the country, on the flip side, it constitutes a drain on the same revenue earned. This is because of the continued dependence on importation of petroleum products for domestic consumption, especially in subsidy payment to marketers.

    Since March, this year, the Nigerian National Petroleum Corporation (NNPC) has held the brakes on fuel price increase as was the tradition prior to this period. This, therefore, presupposes that the corporation has been subsidising the product heavily. Last Monday, the landing cost of Premium Motor Spirit (PMS) petrol, was put at N249/ litre.

    Although the NNPC has not been able to give any official data on domestic petrol consumption, the Group Managing Director, NNPC, Mele Kyari, said petroleum consumption wais not up to 60 million litres daily, but that the corporation supplied as much as that.

    “We always plan with 60 million litres, because anytime we do below that, there is a crisis. When borders were shut last year, consumption fell to 52 to 53 million litres per day. And during the thick of the COVID-19 lockdown in 2020, the number fell to about 42 million litres. If everything works well and consumption is limited to our country, we are dealing with about 42 million litres,” Kyari said on a national television station in June.

    His position is in contrast with that of the Major Oil Marketers Association of Nigeria (MOMAN), who in May, said the local consumption of petrol jumped to 72.72million liters daily from 57.44 million litres sold in April- blaming the surge in consumption to the “thriving activities of smugglers” in the nation’s petroleum industry.

    In March, Kyari disclosed at a ministerial briefing that the Corporation pays between N100-120 billion monthly to keep the pump price of PMS at the current level of N160- N165 per liter. This was at a time he said the product price could have been anywhere between N211 and N234 to the litre. Recall that the Petroleum Products Pricing Regulatory Agency (PPPRA) had released a template increasing petrol price to N212 per litre, but the template was later deleted.

    Read Also: Many feared dead, injured as helicopter shoots local boat in Rivers

    By implication, the NNPC’s subsidy burden in the last three months may have soared to as high as N500 billion, using the monthly N120 billion subsidy and N234 / litre land cost as benchmark.

    Although the NNPC continues to be the burden bearer, Kyari had emphasised the NNPC can no longer bear the burden of underpriced sales of PMS, meaning that at some point the market price will have to be implemented. NNPC is the sole importer of petrol into the country for more than three years now. The NNPC has maintained an ex-depot price of N148/litre since February. Ex-depot price is the cost of petrol at depots, from where filling stations purchase the commodity before dispensing to final consumers.

    Since last May, the corporation has continued bearing the burden of making up for the shortfall in the actual cost of the product.  ”As we speak today, I will not say we are in a subsidy regime but we are in a situation where we are trying to exit this subsidy or underpriced sale of PMS until we get in terms with the full value of the product in the market. When that will happen, I do not know. But I know that engagements are going on. The government is very concerned about the natural impact of price increases on transportation and other consumer segments of our society and as soon as those engagements are taken to logical conclusion, I am sure that the market price of PMS will be allowed to play at the right time,” Kyari said at the Ministerial briefing at the Aso Villa in March. How long can the NNPC hold on to the brakes?

  • NNPC records N43.57b trading surplus

    NNPC records N43.57b trading surplus

    By Muyiwa Lucas

    The Nigerian National Petroleum Corporation (NNPC) has announced a trading surplus of N43.57 billion in April, this year, representing a 23.64 per cent increase over the N35.24billion surplus it recorded in March.

    This is contained in the April 2021 edition of the NNPC Monthly Financial and Operations Report (MFOR).

    Trading surplus or trading deficit is derived after deduction of the expenditure profile from the revenue accrued for the period under review.

    According to the report, the NNPC Group’s operating revenue in April as compared to March, increased by 17.73 per cent or N80.67 billion to stand at N535.61b. Similarly, expenditure for the month increased by 17.24 per cent or N72.34billion to stand at N492.05billion, while expenditure as a proportion of revenue stood at 0.92 per cent, same as last month’s.

    The report attributed the rise in trading surplus to the activities of the corporation’s upstream subsidiary, the Nigerian Petroleum Development Company (NPDC), such as crude oil lifting from OML 119 (Okono Okpoho) and OMLs 60, 61, 62, 63 (Nigerian Agip Oil Company), as well as increase in gas sales. The positive outlook was further consolidated by the robust gains of two other subsidiaries namely: Duke Oil and the National Engineering and Technical Company (NETCO).

    In the Downstream, to ensure uninterrupted supply and effective distribution of fuel across the country, a total of 1.67billion litres of Premium Motor Spirit (PMS) translating to 55.79mn liters/day were supplied in the month under review.

    The report also showed a 34.29 percent reduction in the number of pipeline points vandalised from 70 in the previous month of March 2021 to 46 in April 2021. While Port Harcourt area accounted for 54 percent, Mosimi area accounted for 46 percent of the vandalised points.

    Read Also: NNPC transfers $1.27b to JV cash call 

     

    In the gas sector, a total of 209.27 billion cubic feet (bcf) of natural gas was produced in the month under review, translating to an average daily production of 6,975.72 million standard cubic feet per day (mmscfd).

    From April, last year to April, this year, a total of 2,902.52bcf of gas was produced, representing an average daily production of 7,369.76mmscfd during the period.

    Period-to-date production from Joint Ventures (JVs), Production Sharing Contracts (PSCs) and NPDC contributed about 62.07 percent, 19.95 percent and 17.98 percent respectively to the total national gas production.

    In terms of natural gas off-take, commercialisation and utilisation, out of the 206.40bcf supplied in April 2021, a total of 126.83bcf of gas was commercialised consisting of 42.92bcf and 83.91bcf for the domestic and export markets respectively. This translates to a total supply of 1,430.90mmscfd of gas to the domestic market and 2,976.94mmscfd of gas supplied to the export market for the month.

    This implies that 61.45 percent of the average daily gas produced was commercialised while the balance of 38.55 percent was either re-injected, used as upstream fuel gas or flared. Gas flare rate was 9.74 percent for the month under review (i.e. 670.19mmscfd) compared with average gas flare rate of 7.42 percent (i.e. 542.22mmscfd) from April, last year to April, this year.

    A total of 795mmscfd was delivered to gas-fired power plants in April to generate an average power of about 3,416 MW.

  • Death knell for cheap natural gas?

    Death knell for cheap natural gas?

    The race for cleaner energy usage may have sounded a goodbye message to cheaper liquefied natural gas, SUNDAY OMONIYI reports.

    As a caterer, Nkechi Chukwu is a high user of the Liquefied Natural Gas (LPG), otherwise known as domestic or cooking gas, used in homes. But her trip to the gas plant at the weekend to refill her cylinder left her stunned. Reason? Within a space of 10 days, the cost of filling a 12.5kg cylinder of gas had risen from N4,500 to N5,625 in her Akute, Ogun State area.

    “This is getting to much; just within two weeks prices have increased. This is a commodity that two months ago I used to buy at N3, 400 or N3,700,” Chukwu lamented.

    The rate of price increase of LPG is assuming a phenomenal dimension. This is despite the volume of available gas in the country which the Department of Petroleum Resources (DPR) put at 206.53 trillion cubic feet as at June 11, 2021.

    Director of DPR, Auwalu Sarki, said at the Nigeria International Petroleum Summit, last June, in Abuja, that indigenous oil and gas companies were contributing about 30 per cent of gas reserves. The new figure which represents a marginal increase of 1.16tcf or 0.57 per cent from the 202tcf recorded in 2019 implies a growth of over three trillion.

    But given the volume of gas reserves in the country, would it not have been right if gas sold at a more reduced rate? Experts in the sector hold divergent views on this. For instance, the Chairman of Nigeria Gas Association (NGA), Ed Ubong, at the Abuja event, agreed that the country might be sitting on a large reserve of gas, but wondered what her production capacity of same was.

    “Nigeria is sitting on a large, huge resource base of gas, but how much gas are we producing? We are a top 10 country when we talk of what we have, but when you talk of what we are actually producing, we begin to sit back, we are in the top 20 range. Gas only accounts for five per cent of Africa energy mix,” he said.

    Statistics from the Nigerian National Petroleum Corporation (NNPC) indicated that in April, this year, a total of 209.27billion cubic feet (bcf) of natural gas was produced, translating to an average daily production of 6,975.72 million standard cubic feet per day (mmscfd). It further revealed the natural gas off-take, whether commercialisation and utilisation, out of the 206.40bcf supplied, a total of 126.83bcf of gas was commercialised consisting of 42.92bcf and 83.91bcf for the domestic and export markets. This translates to a total supply of 1,430.90mmscfd of gas to the domestic market and 2,976.94mmscfd of gas supplied to the export market for the month.

    Globally, having cheap natural gas may have become a thing of the past. According to a report by Oilprice.com, the era of cheap natural gas might be gone for good.  U.S. natural gas futures climbed to a 31-month high of 4.16/MMBtu within the week, especially occasioned by forecasts for hotter weather over the next two weeks and soaring global gas prices ensuring that U.S. liquefied natural gas (LNG) exports will remain at record highs. It is being projected that average gas demand, including exports, will climb from 90.9 bcfd in the current week to 94.5 bcfd next week as cooling demand keeps rising.

    The report further revealed that between January and June, this year, U.S. LNG exports jumped by 42 percent year-on-year to an average of 9.6 billion cubic feet per day (Bcf/d), compared with the first half of 2020. Asia remained the top buyer of U.S. LNG, accounting for 46 percent of exports through the end of May.

    Supply crunch                

    According to a report in the Financial Times, natural gas prices have climbed sharply across Europe and Asia owing to tighter supplies, lower production volumes in Europe, as well as lower exports from Russia. Consequently, natural gas prices in Europe have surged to about 40 euros per mWh (~14/MMBtu) for the first time ever, with UK gas prices at the highest levels in 16 years. Asia is said to even be paying more as gas prices have hit $15/MMBtu. The supply crunch is only expected to intensify over the coming weeks.

    “If anything it’s surprising there hasn’t been more concern. In terms of additional supply there aren’t many options on the table globally. Russia is really the only discretionary source of supplies out there but we don’t know when additional deliveries might start. So traders around the world, from Japan to Brazil, are starting to watch European prices too,” Tom Marzec-Manser at ICIS told FT.

    Natural gas demand has rebounded across the globe in part due to economic recovery as economies reopen but also due to a spate of extreme weather events. A long winter in Europe as well as droughts in places like Brazil has elevated natural gas consumption.

    The bullish short-term outlook could, however, come under pressure.

    The bridge

    Oilprice.com further revealed that natural gas and LNG are now being viewed as the bridge in the transition to renewable energy thanks to their more favourable emissions profile, as it generates 30 percent less carbon dioxide than fuel oil and 45 percent less than coal. And, this is very likely to become a long-term trend.

    Whereas a combination of several short-term tailwinds such as supply disruptions, the global economic rebound, and a pause in new LNG export plants have been driving the natural gas rally, there is a growing consensus that structural changes led by the clean energy transition mean that this is likely to become the new norm.

    To exacerbate matters, investments in new gas fields have been falling over the years amid calls from climate-conscious investors and governments. For instance, high carbon prices in Europe are forcing utilities to quickly switch to natural gas; China is ready to be more reliant on gas than ever, while scores of governments in South and Southeast Asia are planning dozens of new gas plants to meet rapidly growing electricity needs. Further, the switch to natural gas can be made relatively quickly with limited capital deployments. With few other viable options, the world will continue to rely more heavily on cleaner-burning gas to help achieve short-term green goals.

    “No matter how you look at it, gas will be the transitional fuel for decades to come as major economies commit to meeting carbon emission targets. The price of gas is more likely to remain high in the medium term and increase in the long term,” Chris Weafer, the CEO of Macro-Advisory Limited., has told Bloomberg.

    Indeed, natural gas is the only fossil fuel that’s expected to record significant growth in the current decade, with demand forecast to increase seven percent from pre-Covid-19 levels by 2024, according to the International Energy Agency. LNG demand, in particular, is expected to remain strong, with LNG demand forecast to grow 3.4 percent annually through 2035, according to an analysis by McKinsey & Co.

    The report noted that a lack of capital investments, however, means that natural gas supply is likely to remain tight. For instance, few new LNG export projects have been approved since early 2020, save for a massive expansion in Qatar. Meanwhile, Saudi Arabia has planned to develop the giant Jafurah gas field, but a good chunk of that gas is likely to end up in its green hydrogen project.

  • Oriental Energy Resources get new MD

    Oriental Energy Resources get new MD

    An indigenous oil exploration and production company, Oriental Energy Resources Limited, has announced the appointment of Mustafa Indimi has its new Managing Director.

    Mustafa takes over from Mr. Ignatius Ifelayo, who served the company for seven years.

    Prior to the new appointment, Mustafa was the company’s Executive Director (Technical).  He brings with him an in-depth knowledge of the business and he is well-positioned to drive the company forward.

    A master’s degree holder in Petroleum Production Engineering from Robert Gordon University Aberdeen, Mustafa has an impressive track record of leading teams to deliver outstanding performance and results.

    Read Also: JAMB, NUC, UBEC, others get acting heads

     

    On his new challenge, Mustafa said: “It is an exceptional privilege to be appointed as Managing Director at a time that provides great opportunity to take the company to new heights. I am looking forward to working with the Board, Management and staff to strengthen and grow the company by building on the solid foundation to generate significant value for all stakeholders.

    ‘’Underpinning everything is my commitment to the company’s vison to set the standards that all other E&P companies in the oil and gas industry will be compared with.’’

  • Ikeja Electric upgrades app

    Ikeja Electric upgrades app

    The Ikeja Electric Plc (IE) has upgraded its IE Mobile App. It is a multi-functional app designed to allow customers make enquiries, check and pay bills, report/resolve complaints, and promptly contact customer care representatives. It also offers live chat and account management functions.

    The Chief Executive Officer (CEO), Ikeja Electric, Folake Soetan, said: “The latest IE Mobile App is a demonstration that company is forward-thinking, innovative and customer-centric. We are a vibrant brand. We are bold and excited to always aim for greatness in order to bring development to the power sector. We dare to consistently improve our services in order to improve customer experience and achieve better results.

    “As a company, we are pleased to present this latest version of IE Mobile App to our customers across the network thereby giving them seamless access to our services with convenience and at the same time enriching their experience. This is a testament that the Management and Staff of Ikeja Electric continuously yearn to deliver quality services and ensure direct access to us through various channels in line with our mantra, Customer first; Technology now. It is a mobile app positioned as a one-stop shop for customers to interact with Ikeja Electric for prompt responses,” she said, adding that the initiative is part of IE’s goal was to continue to use technology in delivery of quality customer experience.

    The app is expected to further strengthen Ikeja Electric’s position in the power sector as a pioneer in providing solutions for customer satisfaction, as well as creating value and exceptional service delivery.

    Unregistered customers within IE network can also use IE Mobile App to access information and resolve complaints without visiting IE office.