The Nation Newspaper

Category: Energy

  • NIPCO gets new MD

    NIPCO Plc has approved the appointment of Suresh Kumar as the new managing director of the company.

    According to the Assistant General Manager, Corporate Affairs, NIPCO, Mr. Lawal Taofeek, Kumar replaces Sanjay Teotia, now the Managing Director, NIPCO Gas Limited, with the mandate to drive NIPCO’s operations and expansion moves across the country, adding that the appointment took effect from February 1.

    Also appointed into the executive management cadre of the company is Roka Chiranjibi, who doubles as the Chief Operating Officer as well as Chief Finance Officer. He was formerly the chief finance officer of the company.

    Kumar has been a key member of NIPCO’s top management for about 15 years, serving as immediate past chief operating officer.

    Suresh, who has over two decades’ experience, has worked with two managing directors. He is expected to propel the organisation with innovative ways in its quest for continuous growth.

    The new managing director has been a major driving force in the entire operations of the company, especially in his last position as COO, which seems to have prepared him for the task as well as making him a natural next-in-line to pilot the company to greater heights.

    The appointments are geared towards increasing the stake of the company, especially at the retail end of the business to maximise the  benefits in the downstream sector of the industry.

    On his appointment, Suresh pledged to run an open administration with top notch management of resources in the interest of stakeholders. He praised the outgoing MD, describing him as a guru whose wealth of experience would give the company more fillip.

  • TCN to acquire multi-million dollar equipment

    By Akinola Ajibade

    The Transmission Company of Nigeria (TCN) is on the verge of purchasing the Supervisory Control and Data Acquisition(SCADA) to enable it monitor the performance of the grid.

    Its Managing Director, Mr Mohammed Usman,gave this indication during a stakeholders conference in Abuja.
    He said the challenges posed by system collapse in the sector must be put to an end, adding that the body would need several million of dollars to provide the device, stressing that the idea would help in putting a stop to incessant collapse of the grid in Nigeria.

    According to him, the new SCADA would cost TCN an estimated $650milllion. It would be recalled that the country has recorded 100 cases of grid collapse since2013, when the sector was privatised by the Federal Government in 2013, in order to promote efficiency in the sector.

    READ ALSO: Electricity workers threaten strike over failed agreement with Fed Govt

    Also, the development has resulted in name calling among stakeholders in recnt times. While some stakeholders, especially the power distribution companies(DIsCos) are accusing the government of not doing the needful, by procuring SCADA, others are were of the view that TCN is negligence in the ways and manners, in which the grid is monitored.

  • Electricity workers tackle Fed Govt over delayed compensation

    The power sector is fraught with problems, such as shortage of gas, meters, paucity of funds, and poor generation. This happens amid plans by the electricity workers to resume industrial actions in the next two weeks, if the Federal Government fails to compensate the over 2,000 workers, who were disengaged during the privatisation of the sector in 2013, among others, writes AKINOLA AJIBADE

    The power sector is yet to get over its manpower problems, caused by the sales of the unbundled assets of the defunct Power Holding Company of Nigeria(PHCN) in 2013.

    Caused by the failure of the Federal Government to re-instate and compensate the over 2,000 workers sacked during the sales of the sector, the issue has continued to pitch the government against the stakeholders in the value chain.

    While the National Union of Electricity Employees (NUEE), an umbrella body of   workers in the sector, is not ready to bulge on the issue, the government is not ready for either the compensation or any other things.

    While this lasted, NUEE is planning to resume its strike in the next two weeks, if nothing is done to ameloriarate the condition of the families, whose employment have been terminated by the government, coupled with the fact that nothing was done, by the government, to compensate them.

    Addressing the media last week, in Lagos, NUAEE National President, Mr Joe Ajaero, said the stakeholders have reneged on their promise to provide for welfare of the affected workers of defunct PHCN.

    According to him, the union has taken it upon itself the responsibility of building schools for the children of the workers, who disengaged from service, adding that many of the children are orphaned.

    He said it is not the duty of neither the power generation companies(GenCos) nor the distribution companies(DisCos) to take over the administration of the schools, adding that a separate body should be constituted to manage the schools and other activities, which concerns the families of the sacked workers.

    He said the government has failed compensate the workers and other aggrements that were reached last December 11, adding that the development is one of the reasons the union is resuming its strike action, this year.

    He said union would be force to seize power installations across the country, among taking other drastic measures on the issues.

    Prior to this, critical stakeholders, such as BPE, the DisCos and the GenCos and others have waded into the  matter to resolve it amicably.

    However, the issue has remained unresolved, as the Federal Government and the electricity workers were unable to agree on the modalities of paying the compensation, among solving other issues, no thanks to the last-minute disaggrements on the issue during a meeting with the Presidency and the union.

    Origin of the impasse

    The crises dated back to the pre-privatisation era, when the investors were at logger heads over whether to purchase the assets and the liabilities of the assets of the defunct PHCN.Though the Federal Government through the  assets committee set up, to provide a seamless transition to the privately governed power  sector from a 100 per cent publicly owned electricity sector, aggred on what sizes or portions of the assets, which the new investors must be holding in the privatised programme, the issue did not go down well with all the stakeholders, especially the electricity workers union.

    Power Sector Reform Act 2005

    One major cause of the impasse between the Federal Government and the workers is the issue of rightful applications of the provisions of the Act, which set up the power sector programme.

    According to the act, power stations, which were owned by the new private investors, who bought the defunct Power Holding Company of Nigeria, should be transffered to the owners- the investors, and not the schools that were originally established by the workers union.

    This, Ajaero said, was uncalled for, adding the money used in establishing schools for the union, was donations from the members, and not from the sales of the power assets.

    Stakeholders’opinions

    The Chief Executive Officer, Change Partners International International, Mr Akachukwu Okafor, said the sector does not have enough money and as a result, it would be difficult for the operators to garner enough funds for the emerging activities in the sector.

    He said the electricity workers were asking for their rights.

    Okafor said: “The electricity workers were demanding what is rigtfully theirs. Unfortunately, the sector is not solvent and as a result, it would be difficult to determine where and how the government would raise the funds, to meet their needs.

    He, however, said it is the responsibility of the Federal Government to keep the national grid stable.

    He said it is expected of the government to keep actors and stakeholders engaged to supply electricity to Nigerians, provided that they were ready to pay for it.

    Also, the Chief Executive officer, Power Cam Nigeria Limited, Mr Biodun Ogunleye, said payment of oustanding, owed stakeholders would engender growth.

    He said compensation of the former workers of PHCN is key for the growth of the sector, urging the government to fast-track the paying the money and other emoluments, which they need to live a good life.

    Preserving power installations

    Nigeria, the former Country’s President, Inteenational Association of Energy Economists(IAEE), Prof Adeola Akininisiju, said the country is battling with poor liquidity, going by the crises in the oil global market, adding that the country does not have money to keep provide new electricity installations in the country.This, Akinnisiju said, is the reason the government must try and protect its assets.

  • Fresh concerns over budget 2020 implementation

    Stakeholders are worried over falling oil prices at the international market. As at last week, the price has dipped below the oil price benchmark for 2020 budget. Concerns are hinged on fears that sustained slide in oil price will threaten the implementation of the budget, reports EMEKA UGWUANYI.

    The first trading week in the month saw oil price fell from over $60 per barrel to $51 per barrel. The price of the global benchmark grade – Brent Crude, only gained and rose above $54 per barrel on February 5, when news filtered out that the vaccine that prevents the deadly Coronavirus has been developed.

    However, even at $54 per barrel, the price is still below the $57 per barrel budget benchmark on which Nigeria’s N10.6 trillion 2020 budget was based. The Coronavirus threat in China has been blamed for the dip in oil prices.

    The sliding oil price portends serious negative economic implication for Africa’s most populous nation, which depends majorly on proceeds from oil exports for sustenance of its economy. Currently, the country is experiencing a revenue shortage and a budget deficit of 1.52 per cent to the estimated gross domestic product (GDP).

    Nigeria’s problem beyond Coronavirus

    There is more to the problem of budget implementation aside coronavirus and the consequent fall in price of crude. Not only is crude oil price low, but Nigeria is also being restricted by the Organisation of Petroleum Exporting Countries (OPEC) from meeting the 2.18 million barrels of crude per day on which the 2020 budget was based.

    The restriction is due to OPEC’s last December output cut of 1.7 million, which was taken to forestall crude inventory buildup that was not favourable to prices.

    There is probably more to worry about because the virus is yet to be contained.China is among Nigeria’s top 10 foreign trade partners that buys crude oil which it uses to power its industries. But as Coronavirus threat has resulted in many Chinese companies remaining shut down, which results in less oil consumption, this is not good for a country like Nigeria that needs to export crude to China in order to earn foreign exchange.

    Another issue to worry about is the likelihood of further output cut for OPEC member countries. A recent report noted that the oil cartel is planning further large production cut of about 500,000 barrels to cushion the effect of the collapsing price, which the Coronavirus has occasioned. As an OPEC member, Nigeria is required to comply with OPEC’s output cut, which in turn means that it could soon be exporting lesser barrels, far below its 2020 budget benchmark.

    Why OPEC may not change output cut soon

     

    In the meantime, Nigeria is looking to raising money through various means, including exploring tax options that were hitherto unexplored. Nigeria is also borrowing money to finance the budget, with the Finance Minister insisting that the country does not have a debt problem despite the rising debt.

    The budget oil price benchmark was based on reference price of $57 per barrel with the expectation that the volatile market could remain stable for the greater part of the year.

    Stakeholders’ views

    To the Director-General, Lagos Chamber of Commerce and Industry (LCCI), Mr Muda Yusuf, noted that the sustained decline in oil prices since late last month, has been as a result of weak energy demand from China following the outbreak of coronavirus. He said oil price, which stood at $54.6 per barrel as at last week, is now below the budget benchmark of $57 per barrel, and this has serious implications for our fiscal and external position as a nation.

    According to him, the continuous drop in global oil price put the realisation of the Federal Government revenue projections in the 2020 budget at risk. ‘’We note that the Federal Government intends to generate N2.64 trillion from crude oil in 2020. We also have the problems of lower crude production and there is likelihood that OPEC and its allies will deepen production cut to support oil prices,’’ he added.

    The LCCI chief said: “The implication is that we will be forced to produce below our current quota of 1.77 million barrels per day (mbpd). If this happens, we will have to struggle with relatively low oil production and prices.

    “This means lower revenue for the Federal Government to carry out its obligations. In the circumstances, the Federal Government may be propelled to raise additional debt to finance the budget, which would further worsen our debt portfolio and fiscal position.

    “We note that the downward movement of oil prices would weaken our foreign reserves. Our external reserves depleted by $129 million in the final week of January 2020. This might affect the capacity of the Central Bank of Nigeria (CBN) to inject liquidity in the currency market, which would further put the exchange rate under pressure. There is also the risk of exchange rate depreciation which would also put pressure on prices.

    “Overall, this development once again underlines the fact that we are still vulnerable to external shocks and should oil prices tumble, the economy may risk another recession.

    “We have had warnings from the International Monetary Fund (IMF) and World Bank as well as Fitch and Moody on the need to diversify the economy to high-impact non-oil sectors to stimulate growth and attract investments. We note the intervention of the Central Bank of Nigeria in this direction, especially in addressing the challenge of high interest rate and access to credit.”

    Also, the Chairman, Major Oil Marketers Association of Nigeria (MOMAN), Mr Tunji Oyebanji, said: “If you have planned some certain revenue based on the oil price and the oil price is no longer reaching that amount, what that tells you is that your budget is already in trouble.

    “Already, you are borrowing so much for your finances, so your borrowing is either to increase even beyond the level that it has reached, or you have to reduce your expenditures, therefore, you will not be able to achieve the objectives that you have set out in your budget.

    “So, it’s unfortunate that the country so much depended on oil, and immediately there is fall in price, you start having budget and revenue pressures, and your chances of having successful budget circle will reduce significantly.’’

    Oyebanji, who is also the Managing Director/Chief Executive Officer, 11 Plc, said there will be pressure on the naira because “we don’t have dollars as much again.”

    To address the issues, Oyebanji said: “It is like every other company or individual. If your revenue is not coming as expected, you have to reduce your expenditures but unfortunately for us as a country, we have increased the minimum wages, we have continued to subsidise petroleum product and power and borrow more money and service the increase, so the end result is that money that the will be spent on capital and infrastructures is going to be reduced. Because the other overhead had taken the money as well as the high wage government has to pay for, the only thing government can do is to cut recurrent expenditures.

    “The government has to reduce its expenditure, if it wants to continue to meet its mandate. If the government is infrastructure handicap, it means that they have to reduce their expenditure but it also has some implications.

    “All these big salaries people earn and government officials travelling with entourage of over 50 people outside the country have to be addressed. Meanwhile, our population is growing, all these do not go well with the country.”

    Foreign analysts

    According to Peter Hanks, Junior Analyst for DailyFX.com, crude oil narrowly escaped bear market territory, defined as a decline of 20 per cent or more from a recent high, on February 5 as it climbed from the previous day’s lows of about $49.50 to reclaim the $51 mark. While crude has escaped the technical designation of a bear market for the time being, the commodity’s outlook remains in question.

    The spread of Coronavirus has resulted in quarantined cities and reduced economic activity in China, a key source of crude oil demand. In turn, crude oil prices plummeted and have been buoyed by technical support around $50 and the potential for deeper production cuts. To that end, OPEC officials engaged in meetings last week to discuss possible options for the members to pursue. If the group can agree to further reduce production, it could result in a boost in crude oil prices, but Russia has already voiced opposition.

    That being said, the prospect of deeper production cuts providing a lifeline for crude oil prices looks thin at the time being. Therefore, the growth-linked commodity may struggle to reclaim lost ground until virus fears cool and growth forecasts level off. If a rebound does occur, initial resistance may reside around $53.90, followed by the Fibonacci level at $55.57.

    On the other hand, a break beneath – and daily close below – the psychologically significant $50 could translate to further crude oil weakness. Should it occur, subsequent support is rather sparse which could see losses accelerate toward the December 2018 low around $42.43.

    Oil prices jumped more than two per cent after media reports that scientists had developed a drug against the fast-spreading coronavirus that continues to weigh heavily on global economic activity.The World Health Organisation (WHO) played down the media reports, saying there is “no known effective therapeutics” against the virus.

    Lending further support to oil was news that OPEC and its producer allies are considering further output cuts to counter a potential squeeze on global oil demand.

    China’s Changjiang Daily newspaper reported on February 4 that a team of researchers led by Zhejiang University Prof. Li Lanjuan had found that drugs Abidol and Darunavir can inhibit the virus.

    Separately, Sky News reported that a British scientist has made a significant breakthrough in the race for a vaccine by reducing part of the normal development time from two to three years to only 14 days.

    Still, refineries, including China’s Sinopec, Asia’s top refiner, have slashed throughput as the virus cuts demand for refined fuels.

    Fears of a slump in global oil demand had pushed U.S. crude and Brent futures into contango – a structure in which longer-dated oil futures trade at a premium that encourages traders to keep crude in storage for more profitable resale in the future.

    “Based on our forecast that China’s GDP growth will slow to just three per cent year-over-year in first quarter (Q1) 2020 and assuming that the virus is brought under control relatively quickly, we have tentatively pencilled in a 10 per cent drop in the country’s oil consumption in Q1,” Capital Economics analysts said, adding: “This pushes the global market into a small surplus in the first half of 2020.”

    Falling demand for jet fuel worldwide because of the deadly coronavirus has also hit U.S. prices for the product, which dropped to their lowest seasonally in five years, market participants said. Companies including Royal Dutch Shell and Phillips 66 have limited business travel to China.

    Demand impact

    A slowdown in the global economy resulting from the outbreak is expected to reduce 2020 worldwide oil demand growth by 300,000-500,000 barrels per day (bpd), about 0.5 per cent of total demand, BP’s Chief Financial Officer Brian Gilvary said.

    “The Chinese economy will be weakened for some time to come as quarantines, social distancing and travel restrictions remain in place,” BNP Paribas analyst Harry Tchilinguirian told the Reuters Global Oil Forum.

    “But as financial markets are anticipatory, one can see how favourable news in relation to potential medical solutions, or indications that we have reached a turning point in the progress of the virus outbreak, are likely to be interpreted positively.”

    OPEC and allies led by Russia, a group known as OPEC+, considered the impact on global oil demand and economic growth from the coronavirus at a meeting on Wednesday.

  • Uncertainty as OPEC may cut 500,000bpd

    Our Reporter

    There are indications that Organisation of Petroleum Exporting Countries (OPEC), and  `its allies, especially Russia, will further cut oil supply by 500,000 barrels per day (bpd), a situation that would worsen economic realities in Nigeria.

    In the proposed Nigeria’s 2020 budget is predicated on 2.18 million bpd at a price of $57 per barrel, while the exchange rate is expected to remain N305/$1.

    Dropping by about $10 due to the outbreak of Coronavirus in China, Brent yesterday stood at $54.76, falling below Nigeria’s expectation in the face of looming further cut in Nigeria’s OPEC quota, which last stood at 1.774 million barrels per day (bpd).

    Although OPEC and non-OPEC panel called the Joint Technical Committee (JTC), which is ending today, the cartel is reportedly looking to hold emergency ministerial meeting on February 14.  It had earlier agreed with partners to cut output further by 500,000bpd from January to March 2020. This is different from the previous cut of 1.2 million bpd already agreed.

    Also,stakeholders, especially oil market analysts and economists had told The Nation that current development is capable of leading Nigeria’s economy into another recession and shortage of foreign exchange, given that the nation’s foreign reserve has depleted to about $40.95 billion.

    In December last year, Nigeria’s crude oil production fell to 1.57 million bpd day, a development which is far below budget projection and indeed, OPEC quota for the country.

    Read Also:‘Higher non-OPEC output will keep prices honest’

     

    While the aggregate revenue available to fund the 2020 budget is projected at N8.155 trillion (seven per cent or N561.2 billion more than the 2019 budget of N7.59 trillion), nothing less than N7.602trillion was expected to come from oil revenue.

    The coronavirus outbreak in China could cut oil demand by more than 250,000bpd in the first quarter, Bloomberg quoted analysts and traders as saying.

    Iran’s oil minister, Bijan Zanganeh, had on Monday said: “The oil market is under pressure and prices have dropped to under $60 a barrel and efforts must be made to balance it.”

    Iraq’s oil ministry spokesman Assem Jihad had also told AFP that “Depending on the needs of the market and how it’s been affected by the coronavirus, will a cut be necessary? This is being discussed as the technical reports are presented.

    “The technical committees are discussing the recommendations, which they will elevate to their ministers. Any further cut to outputs would only be announced in a ministerial meeting.”

     

  • African energy ministers for NIPS 2020

    Our Reporter

     

    The Nigeria International Petroleum Summit (NIPS) will attract top African Energy Ministers to the International Conference Centre, Abuja from February 9-12.

    The event is the third. It has as theme “Widening the integration circle: technology, knowledge, sustainability, partnership.’’

    Some ministers have confirmed their attendance. They include Minister of Oil, Gas and Hydrocarbons, Gabon, Noel Mboumba; Minister of Petroleum, Republic of Niger, Foumakoye Gado; Libya Minister of Petroleum and Chairman of NOC, Mustapha Sanalla, and Minister of Hydrocarbon, Republic of Congo, Jean-Marc Thystere.

    “It has been our tradition from inception. We gather the best brains and key policy makers from across the continent to chart the way forward and posit strategies for the management of Africa’s huge hydrocarbon resources,” says Mr. James Shindi, Managing Director, Brevity Anderson, who is the event producer.

    The summit will be declared open by President Muhammadu Buhari, with the Minister of State for Petroleum Resources, Chief Timipre Sylva as chief host.

    Read Also: Shift to gas will knock out petroleum subsidy – Sylva

     

    It will feature key industry players from the oil and gas sector. They include Managing Director, Nigeria LNG Limited, Tony Attah;  Managing Director, SPDC/Chairman, Shell Companies in Nigeria, Osagie Okunbor; Managing Director & Chief Executive, Total E&P Nigeria Limited (TEPNG), Michael Sangster; Managing Director, Exxonmobil, Paul McGrath; Executive Secretary, Nigeria Content Development & Monotoring Board (NCDMB), Simbi K. Wabote;  and Group Managing Director, Nigeria National Petroleum Corporation (NNPC), Mele Kolo Kyari.

     

  • DPR automates downstream operation

    Our Reporter

     

    The Department of Petroleum Resources (DPR) has inaugurated its digitilisation initiative for downstream operations under its Automated Downstream System (ADS) programme.

    According to the DPR spokesman, Paul Osu, the initiative was designed to improve the efficiency and accelerate DPR Downstream Regulatory perform-ance by reducing application processing time, enhance transparency, provide platform for accurate downstream statistics, integrate with other stakeholders for document verification purposes and improve revenue collection.

    The ADS is in line with DPR’s alignment with government’s ease of doing business policy, which is geared towards growth.

    The initiative comprises, among others, the following licences and permits: Retail Outlet Monitoring (ROMS) license for kerosene peddlers, Retail stations and industrial consumers; Import/Export Permit (IMPEX) for Petroleum products; Coastal Vessel Licence (CVL); Lube Oil Blending Plant Licence (LOBL); Depot Licence (DL); and Refining Processing Licence (RPL).

    He said: “WIth the automated downstream system in place, the DPR no longer accepts manual processing of downstream applications as all Applications for license and permits have been migrated to digital platforms.

    Read Also: Petroleum minister commits to sector’s growth

     

    “Applicants are, therefore, expected to visit the Electronic license and Permit System (ELPS) portal on our website (www.dpr.gov.ng) and take the following steps: Create your company account by completing your corporate profile; Apply for license or Permit Required; Pay application fee online or through bank branches nationwide; Upload required documents in PDF or TIFF file format; Review and submit application for processing; and DPR issuance of Licence or Permit.

    “The department has also introduced the Smart Inspector solution to ease technical inspection, real-time data gathering and monitoring of oil and gas facilities to ensure safety and regulatory compliance.

    “These digitilisation initiatives of the DPR are integrated into the Corporate Enterprise Resource Planning (ERP) application system which is the platform for our business system automation.

    “DPR will continue to provide robust regulatory oversight for the oil and gas industry in Nigeria in furtherance of its vision to be a leading Regulator in the global oil and gas space.”

  • Driving oil, gas industry with digital technology

    An online platform, EnergyHub, have made its debut. The new digital energy hub can drive the industry’s operations. The platform can also be used by students, businessmen, reporters, among others, in the oil and gas industry. CLINTON OBETO, who at the inauguration, reports.

     

    TECHNOLOGY is vital to the energy sector. It is against this background that a new energy portal, EnergyHub, was unveiled in Lagos.

    Its Lead Promoter, Dr Felix Amieyeofori, said the new  EnergyHub will drive growth in the sector.

    Amieyeofori said the energy digital marketplace will provide collaborations among industry players in the sector, including service providers, operators, original equipment manufacturers (OEMs), investors, regulators, academia, renewable energy, energy information and technology providers.

    He said the digital marketplace  was designed to empower Business to Business (B2B), Business to Companies (B2C) and Companies to Companies (C2C) collaborations for businesses that provide energy.

    He said the platform provides the digital space for Original Equipment Manufacturers (OEMs), vendors and suppliers, service and technology providers, Free Zone operators, oil and gas operators, regulators and government agencies, the academia, professional associations and  stakeholders in the energy spectrum, to interact and collaborate.

    According to him, for any developed country, an industry must have a relationship with the institutions.

    He said: ‘’An industry has to come from innovation, creativity and l noticed that our high institutions are isolated and disconnected. There is no feedback mechanism. Many times l challenge my friends in the service oil industry. l said Nigeria has been producing oil since 1958, how come by now we don’t have a Nigerian oil gas technology, something that belongs to us?’’

    Amieyeofori, who is the Chairman, Entek Integrated Resources Limited, continued: “That symbiotic relationship in thinking as one industry and coming together are still lacking. On the other hand, l see that lots of people both in and out were not able to access information in the industry.  They don’t know what is happening in the industry or how to access vessels or materials for their operations. This, among others, called for the creation of an EnergyHub or ‘Collaboration Room’.

    “The platform provides a space where energy stakeholders can enquire, acquire, lease, sell, advertise, and market their products and services just at the push of the button. Our vision is to see stakeholders in the oil and gas, and the broader energy spectrum to efficiently transact their businesses within a digital community at any time.’’

    Amieyeofori, a former MD/CEO of Energia, also highlighted the benefits that Energyhub brings to the academia as it makes interactions between the school and the industry easy.

    He said the platform also offers territory institutions the opportunity to showcase their creativities in research and development (R&D) to a wider audience and business community for recognition and partnership, adding that the platform will also facilitate the placement of students’ internship, and even employment opportunities in the Industry.

    “EnergyHub will eventually bring the needed technology transfer and domestication not only within Nigeria, but also on the African continent as global technology providers come into the collaboration room to interact with Indigenous players.

    READ ALSO: Digital technology key to women empowerment, says minister

     

    We created a digital EnergyHub that will bring everybody together to display their services. With time there will be interactions, knowledge sharing and with time there will be “Big Data” and data analytics.

    “As it progresses, we don’t need to search for information and services because it is a digital marketplace that we can search for information anywhere in the world.The EnergyHub has already been receiving global acceptance.”

    He noted that with EnergyHub, they could create a digital Offshore Technology Conference (OTC), Society of Petroleum Engineers’ (SPE) conference and for NAPE, among others.

    ‘’It gives opportunity to the universities to show any ground breaking research to the world as well as upload their best I. T. students for employers to contact.

    ‘’It will make sure that universities are aware of the challenges of the industries and tailor research topics at masters, doctorate, and bachelor levels to find solutions to such challenges and problems,’’ he added.

    The Corporate Business Manager, Ms Blessing Muoneme, pointed out that Energyhub will further provide topical energy news and updates, events/conferences and business intelligence for all its partners.

    She said this was to ensure that  partners were kept abreast with information that would enhance their business decisions.

    She added: “The benefits of the EnergyHub are massive. The vision is to offer opportunities for research based economy where both oil and gas operators, academics and researchers can tap into the opportunities.

    “It’s also beneficial to the media, for instance, if they have breaking news on the oil and gas sector, we would pull it out from their website, post on the EnergyHub website with the newspapers names accredited and because it is a hub that brings people together, we are also looking at collaboration with the media houses.”

  • Ikeja Electric cuts losses, improves supply

    By  Emeka Ugwuanyi

     

    Despite challenges in the power sector, Ikeja Electric Plc (IE) has recorded reduction in its Aggregate Technical, Commercial and Collection (ATC&C) losses with the introduction of e-billing system and improved sustainable power supply through its bilateral agreements.

    IE’s Chief Operating Officer (COO), Folake Soetan, who made this known while giving highlights of the electricity distribution company’s (DisCo’s) performance, also noted that IE took a bold step to improve sustainable power through the bilateral initiative.

    According to her, the company had  reduced her ATC&C losses from about 31.3 per cent last year to 24.5 per cent. ATC&C refers to Aggregated Technical and Commercial Loss reduction, which is the difference between the amount of electricity received by a distribution company from the Transmission Company and the amount of electricity for which it invoices its customers plus the adjusted collections loss.

    Soetan said: “2019 was a phenomenal year for us at Ikeja Electric. Despite the huge challenges we thrived and flourished. We tested new waters, learnt amazing lessons and set the pace in the power industry.

    We were able to reduce our ATC&C losses from 31.3 per cent to 24.5 per cent, introduced e-billing, started the experiment towards improved sustainable power through the bilateral initiative and optimised our existing systems through innovations.”

    She continued: “We are committed to providing access to affordable and reliable power supply in line with the SDG 7 as we pursue our vision of being the provider of choice where energy is consumed.

    “In 2020, we will deliver exceptional service to our customers, improve the quality of power supply and partner with the key industry players to build a sustainable power sector in Nigeria. We are Ikeja Electric, We bring Energy to Live.’’

    Read Also: Ikeja Electric’s unlawful disconnection of Ifesowapo

     

    According to Soetan, the company was committed to providing access to affordable and reliable power supply in line with the Sustainable Development Goals (SDGs 7) in pursuance of its vision of being the provider of choice where ever energy is consumed.

    The Disco has continued to demonstrate its commitment to improved service delivery by working in line with Meter Asset Provider (MAP) Scheme to close the metering gap.

    It introduced E-billing (electronic billing) system, which enables effective delivery of bills to customers via SMS, email and USSD platforms. And recently announced the IE Mobile App which allows customers to view their bills, make complaints, request connection, check supply availability and chat live.

    With its customers spread across the northern part of Lagos and Ogun states, IE operates through the six Business Units located in Ikeja, Oshodi, Akowonjo, Ikorodu, Shomolu and Abule-Egba.

    The largest electricity distribution company, IE came into being on November 1, 2013, following the handover of the defunct Power Holding Company of Nigeria to NEDC/KEPCO Consortium under the privatisation scheme.

  • How 7.5 % VAT will affect power sector

    The Federal Government has started the implementation of 7.5 per cent Value Added Tax (VAT), a development, which is expected to have far-reaching consequences on businesses, including electricity distribution and generation. With implementation of the VAT increase, electricity consumers will pay more for meters and electricity tariff as indicated by electricity distribution companies (DisCos), writes AKINOLA AJIBADE.

     

    The Federal Government began the implementation of the 7.5 per cent Value Added Tax (VAT) last week. Indications from the electricity distribution companies (DisCos) are that the cost of electricity meters and tariffs would be appropriately reviewed to reflect the increase as it would affect the cost of purchase of power, electricity equipment and facilities including meters.

    Currently, consumers, on the average, pay N26 on electricity per kilowatt (Kwh), and this will go up, as the power distribution companies(DisCoS) spread the cost of 7.5 Value Added Tax on their operation.

    Precisely on February 1, this year, the government started the implementation of its 7.5 per cent increase in VAT, which was raised from five per cent in the last quarter of last year.

    By implications, businesses that are approved and operate in line with the constitution of the country must comply with it, which is the reason businesses are eager to implement the VAT increase on their operations.

    Activities in the power sector were also affected by the development as the sector’s operators import most of their machineries from abroad aside generating and distributing electricity to the consumers.

    For instance, the 11 power distribution companies (DisCos) have also joined the race to implement the new VAT rates in their operations. The Abuja Electricity Distribution Company ( AEDC), Ibadan Electricity Distribution Company(IBEDC) and Eko Electricity Distribution Company (EKEDC) have given notice of their plans to adjust cost of their services and meters.

    Expectedly, the charges per kilowatts of electricity consumed by individuals or organisations will be more as the implementation begins. Though the full weight of the increase in VAT from five per cent to 7.5 per cent is yet to be felt, the issue, no doubt, must be complied with by Nigerians.

    Based on this, The Nation examined the positions of the stakeholders in the value chain to know their compliance vis-a-vis how the increase would affect the sector and the economy.

     

    ANED’s position

    The Association of Nigerian Electricity Distributors (ANED) is the umbrella body of the 11 DisCos in Nigeria. Its Executive Director, Research and  Advocacy, Mr Sunday Oduntan, said the body has never directed its members on the implemention of the 7.5 per cent VAT, adding that members who do so are just obeying the laws of the land.

    In an interview on phone, he said the issue of compliance with VAT  is a must for every business operator.

    Oduntan said: “We need to clarify this view. ANED, as an umbrella body of all the power distribution companies, has not issued any statement on the implementation of 7.5 per cent VAT.  The Federal Government is in charge of the administration of VAT and it is the only one that can fix and administer VAT in the country.’’

    According to him, activities of the DisCos are subjected to the laws of the country and as a result, the DisCos have no choice than to abide by the laws. “It is only Ibadan Electricity Distribution Company (IBEDC) I know that has unfolded plans on how to implement the 7.5 per cent VAT. But I know that other DisCos would follow suit since VAT is a policy of the Federal Government, which they must abide with.” he added.

     

    Power sector subsidies

    The Federal Government, Oduntan said, subsidises the cost of electricity that is consumed in the country. He said many people (consumers) do not bother to look at the two sides of the coin when issues about the power sector are at stake.

    Read Also: Consumers to pay 7.5% VAT on meters

     

    The consumers, Oduntan said, do not consider what the operators do in the sector, vis-a-vis, the roles played by the government in subsidisng the cost of electricity.

     

    GenCos’ defence

    The Association of Power Generation Companies (APGC), the umbrella body of power generating companies (GenCos), had on several occasions, complained about the rising cost of producing electricity in the country. The body has  complained about the scarcity of gas, a feedstock used in generating electricity.

    Its Executive Secretary, Dr Joy Ogaji, said the scarcity is caused by the price of the product, urging the Federal Government to prevail on the Nigerian Bulk Electricity Trading Company (NBET) to rescind its decision to charge the power generation firms additional fees on operation.

    Specifically, she said the imposition of 0.75 per cent administrative charges on the firms by the government would compound the firms’ problems. The charges, she said, were for all the gas collated and submitted for transportation to the thermal plants, stressing that they are adding more problems to the thermal operators, not reducing them.

    On taxes, Ogaji said, the new increase might affect the firms’ operation, adding that the power generation firms would spread the cost of the VAT on their operation.

    An official of one of the thermal plants, who craved anonymity, said the effect of the new VAT on the firms was long-term. Power generation companies, he said, purchase gas to provide electricity.

    “Gas market is not the same thing as tomatoes or pepper market where people can go any time and get what they need. That is why users of gas (thermal plant operators) buy the product and keep it in stock until there is the need for it again,” he added. It may be six months or one year, depending on the quantity, which gas suppliers provide to them.

    The product, he said, is used over a long period, adding that operators of thermal plants buy gas at prevailing market rates. He said suppliers of natural gas could only spread the cost of the new increase on the product, when thermal plants operators had exhausted their supplies.

     

    Other operators

    The Chief Executive Officer, PowerCam Nigeria Limited, Mr Biodun Ogunleye, said noted that such policies or directives from that cadre of the government must be abided with by operators of businesses that are concerned.

    The activities of the government, Ogunleye said, must be run to record growth and the only way through which the government could achieve this, is impose to levies and taxes on people.

    The Minister of Finance, Mrs Zainab Shamsuna Ahmed, who broke the news to Nigerians, said VAT increase on consumables and non-consumables was to drive the earnings of the Federal Government and provide enough money for its capital projects.