The Nation Newspaper

Category: Energy

  • Seplat, Eland Oil stakeholders resolve acquisition issues

    Stakeholders of Seplat and Eland Oil & Gas have resolved the misunderstanding in the acquisition of the Eland by Nigeria’s independent – Seplat Petroleum Development Company Plc, reports MUYIWA LUCAS

     

    Stakeholders in the Seplat Petroleum Development Company Plc and some aggrieved stakeholders in Eland Oil & Gas Plc, which was recently acquired by Seplat, have amicably resolved the misunderstanding making the transaction acceptable to all stakeholders.

    On October 15, 2019, Seplat Petroleum Development Company Plc’s planned acquisition of Eland Oil & Gas, an independent exploration company, hit the news space.

    According to the terms of the agreement, Seplat will pay 166 pence a share for Eland in a purchase valuing the London-traded company at about $484 million. Eland’s directors recommended that shareholders vote in favour of the deal, which represents a premium of 33 per cent to the six-month average share price.

    It was also stated that any shareholder of Eland Oil & Gas whose name appeared on the register as at close of business on Friday, October 18, would stand a chance of receiving and retaining the interim dividend, which the company had planned to pay on October 31, 2019.

    It was understood that Eland’s board of directors signed an undertaking, which makes it almost a done deal. In effect, Seplat Petroleum received an irrevocable undertaking. But Starcrest Nigeria Energy Limited, one of the stakeholders, issued caution on the proposed acquisition of Eland Oil and Gas Plc by Seplat Petroleum Development Company.

    According to Starcrest, the caution was issued on many grounds but mainly because of fundamental misrepresentations, or material omissions in representation, which have been made to the market in general and to the respective shareholders. However, it was reliably gathered that Emeka Offor, the Chairman of Starcrest Nigeria Energy Limited, George Maxwell, CEO of Eland and Bryant Orjiako, Chairman of Seplat met in London to settle the impasse resulting in a favourable outcome for all parties while the acquisition process continues.

    The meeting may have prompted Eland Oil & Gas shareholders to give overwhelming backing to the takeover of the Aberdeen-based firm. Also, the Boards of Eland and Seplat announced that at the Court Meeting and the General Meeting held on November 20, 2019 by Eland and convened in relation to the proposed scheme, all the proposed resolutions for the take-over were duly passed by the requisite majorities.

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    Commenting on the deal, the Chief Executive Officer of Eland, George Maxwell, said: “We are glad to have contributed immensely to the growth of the Nigerian oil and gas industry. Eland has, in a period which has seen a significant cyclical downturn in our industry, outperformed most of its peers on the AIM Oil & Gas Index.”

    Seplat’s Company Secretary, Edith Onwuchekwa, in a statement issued to the Nigerian Stock Exchange, stated that “the Boards of Seplat and Eland are pleased to announce that they have reached agreement on the terms of a recommended cash acquisition of the entire issued and to be issued ordinary share capital of Eland by Seplat.”

    The upsides

    Eland, whose main asset is the oil mining lease (OML) 40 in the Niger Delta, was founded in 2009 and “listed on AIM          w, the London Stock Exchange’s growth market. The acquisition will boost Seplat’s production to 64,000 barrels of oil equivalent a day and this will propel Seplat to become Nigeria’s biggest oil exploration and production company.

    So far, Seplat has remained profitable this year, with half-year 2019 profit increasing 152.6 per cent to N37.5 billion. The deal represents a big boost to the Nigerian Local Content Act, which stipulates that Nigerian operators and indigenous service companies shall be given first consideration in award of oil blocks, licences and works in the sector.

    “Eland has contributed greatly to helping the Federal Government achieve its mission of growing local participation in the sector. This is reflected in our choice of Seplat to acquire Eland,” says Maxwell.

     

  • Electricity problems are beyond generator importation

    The Senate has opposed ban on importation of generators. This development has helped in diffusing the notion that generator importers are behind the problems in the power sector. Also, the development has brought to the fore the need to fix the sector to boost the economy, writes AKINOLA AJIBADE.

     

    Penultimate week, the Senate rejected a motion which sought to ban the importation of generators. The rejection, which was announced by the leadership of the Senate, has helped in disabusing the minds of many who thought that importers of generators were fuelling the crisis in the power sector.

    Raised by Senator Chukwuka Utazi of Enugu North Senatorial District, and supported by Senator Francis Fadahunsi from Osun State, the motion was turned down by the Senate for lacking credibility, more so that the accusation that generator importers were stifling initiatives in the power sector was not true.

    The Senate President, Ahmed Lawan,  called for a vote voice on the issue and, thereafter, asked the House to set up a committee on the matter and report their findings in the next four weeks.

    Prior to this, there were complaints from various quarters regarding importation of generators into Nigeria. While many had accused importers of generators of conniving with power sector operators to frustrate attempts at resuscitating the power sector, others did not, as they see importation of generators as a business, which Nigerians can venture into, provided the importer meets the requirements as laid down by the Federal Government.

    While this lasted, controversy has continued to trail the importation of generators in the country with accusing fingers being pointed at stakeholders especially business operators and government officials.

    To downplay the issue and further redirect attention to the sector, the Senate opposed the motion that sought to ban importation of generators into the country but called on the government to fix the power sector, which has not been able to provide stable power for six years after it was privatised.

    Industry observers were of the view that  the sector lacked enough infrastructural facilities, urging stakeholders including the Federal Government to help in providing facilities in the key areas of the sector – generation, distribution and transmission.

     

    Improvement in transmission

     

    The Federal Government is wholly in control of the transmission segment of the sector, a development, which has informed the decision of many Nigerians to advise government on the issue. A senator from Cross River State, Mr. Gershon Bassey, urged the government to replace the old transmission facilities with the new ones, adding that the measure would help to fast-track the growth of the sector.

    According to him, the issue of developing transmission infrastructure is key to the growth of the nation’s power sector, adding that when the Federal Government improves on the electricity transmission mechanism, the sector would be better for it.

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    Nigeria’s electricity transmission facilities are not strong enough to take large volume of energy to the 11 power distribution companies (DisCos) operating in the country. When this happens, DisCos would not be able to distribute power to the offices and homes, a development, which has hindered many Nigerians from accessing power for use.

    The Transmission Company of Nigeria (TCN), Bassey said, does not have the capacity to transmit huge volume of electricity that is being produced by the power generation companies (GenCos).

    Presently, the industry boasts of installed capacity of 12,522 megawatts (Mw) of electricity. Out of this, TCN can only wheel 7,500Mw, a figure, which is too small to promote efficiency in the sector. It is on this basis that Bassey advised the Federal Government to build on the existing infrastructural framework inherited from past administrations in order to record growth in the power sector.

    Also, the Founder, Change Partners International, Mr Arachukwu Okafor, advised the government to invigorate the transmission segment of the industry, stressing that the development would help in promoting efficiency in TCN.  “Issues such as low capacity of transmission equipment would become a thing of the past when government focuses more on purchasing new equipment for TCN,” he said.

    Federal Government, he said, would not even think of imposing ban on the importation of generators once it is able to fix the sector. Generator importers, Akachukwu said, would naturally leave the business once they realise that they do not have people to sell generators to any longer.

     

    Manufacturers’ reactions

     

    The President, Manufacturers Association of Nigeria (MAN), Mr. Mansur Ahmed, urged the Federal Government to put in place measures that would help in accelerating growth of the sector. He said the issue of returning the sector to productivity is inevitable in order to achieve the growth of the economy.

    According to him, the government through the Senate can ban importation of generators and leave those manufactured in-country unbanned, arguing that it is important to fix the sector in order to grow the economy.

    Ahmed said: “The ban on importation of generators as contemplated by the Upper Chamber of the National Assembly should not be made to affect a range of generators that are being assembled or produced in Nigeria. By so doing, the government is helping to develop local content policy in Nigeria.  Invariably, the government is boosting production activities in the country. Larger generators used in powering industries should not be affected by the ban if the Federal Government intends to grow the economy.”

     

    Gas to power initiative

     

    This scheme must be run in such a way that its goals of providing gas to thermal plants unhindered would be realised, Akachukwu said, adding that Nigeria has gas in abundance as it is one of the largest producers of natural gas in the world.

    He said the country’s problem lies in the area of transporting gas to thermal plants for generation of electricity. According to him, the government alongside other stakeholders need to ease the process of transporting gas to plants in need of it.

    He advised stakeholders in the value chain to attach more importance to what is known as Collocation, in industry parlance. He said through this means, gas plants would be located around the power plants, with a view to ensuring accessibility of gas.

    Similarly, a source who does not want to be mentioned, said shortage of gas is the main problem of the power sector. He said the power plants in the country are not without gas problem. He said the scarcity of gas in the sector has resulted in lack of activities in many of the plants

  • ‘Direct payment of the 13 percent fund to oil producing communities’

    Bolaji Ogundele, Abuja

    The oil and gas producing communities of Egbema Kingdom in Warri North council area of Delta State have called on President Muhammadu Buhari to effect the payment of the 13% Derivation Funds directly to oil producing communities.

    The communities, who are within the OML 40 and 49 areas, in an open letter, addressed to President Buhari, lamented the fact that their people have consistently had to live in some of the most deplorable economic and social states, despite the huge mineral resources they are contributing to the nation’s economy.

    The communities, under the aegis of Egbema Oil Producing Communities (EOPC), in the letter signed by their representatives, led by their Coordinator, Dr Euyabarate Teacher, urged the President to direct the appropriate departments under the Executive arm to start the direct payment of the fund to the communities, as prescribed by the 1999 Constitution, as amended.

    The communities, including Ogbudugbudu, Opuama, Ogbinbiri, Tsekelewu/Polobubo, Adagbrasa and Abadegbene, listed the facilities within their domains as Olero, Opuekeba, Dibi Fields, Opuama flow stations, all operated by Chevron Nigeria Limited (CNL) and the Nigerian Petroleum Development Company (NPDC).

    Emphasising the need for the federal government to immediately commence the payment of the fund to the communities where the oil resources are drilled from, the communities noted that the current practice of paying to the state governments had wrecked poverty and degradation on the communities.

    “Based on the enormous contribution of Egbema Kingdom to the national economy, with little or nothing to show for it, we strongly demand with emphasis that Mr. President should pay the 13% oil derivation fund to the oil producing communities directly.

    “Mr. President sir, we must note in this press statement that available statistics clearly show that Egbema Kingdom has been at the mercy of the yoke of underdevelopment. It is indeed lamentable that irrespective of the huge contributions from our kingdom, we still lack electricity, no motorable roads, no hospital, and the water on which we defecate is the same water we drink.

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    “To underscore the urgent need for the money to be paid directly to the communities, the absence of medical facilities in our area has led to a very high mortality rate as pregnant women die frequently during delivery, due to the absence of qualified medical personnel like doctors and nurses.

    “It is also very regrettable to inform you that these oil producing communities of Egbema Kingdom have lost their flourishing fishing and farming industries, which were destroyed by the activities of international oil companies. The biting effect of oil exploration and exploitation cut across many thorny issues like corrosion of roofing sheets, reduction of life expectancy, among others.

    “Sir, according to the 1999 Constitution of the Federal Republic of Nigeria, as amended, the 13% Derivation Fund is the first line charge of the federal account. It is therefore painful and illegal to allocate it through the state governors, who are third party to the oil producing communities,” the letter read.

  • Total donates equipped science laboratory block to school in Ogun

    It was a day of fulfillment for management and students of Tonyo High School in Ere, Ado-Odo Local Government Area of Ogun State, when the management of Total Upstream Company Nigeria Limited (TUPNI) donated a block of five science laboratories for physics, chemistry, biology, agriculture and home economics to the school.

    Besides the laboratories being equipped, Total donated some equipment and chemicals that will be used by the students to carry out practical tests of what they are taught. The French oil giant noted that it places education and human capacity development as priorities in its corporate social responsibility (CSR) projects hence it was pleased to donate the facility to the school.

    In his remarks during the commissioning and handover of the block and laboratories, the Deputy Managing Director, Deep Water District, Total Exploration and Production Nigeria Limited, Ahmadu-Kida Musa, who was represented by the Executive General Manager, CSR and Medical Services, Vincent Nnadi, assured the school and the community of TUPNI’s support to developing the educational sector in Nigeria.

    He said the company had invested a lot in education because it remains the key to human development. According to him, the completion and commissioning of the project is in furtherance of the company’s CSR.

    “As you may know, according to some extant regulations, deep water operations adopt the entire country as host especially for its CSR activities. This edifice was put together in collaboration with the Nigerian National Petroleum Corporation (NNPC), PETROBRAS, SAPETRO and CNOOC to support the education sector.

    “Our education intervention has gone full circle with impacts all over the country and beyond. We have intervened in Catch-Them -Young programme for primary school pupils, post- primary, post- secondary and post- graduate scholarships with some tenable abroad, teacher training programme, NYSC support scheme, skills acquisition programme, and business development programme..

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    “We also conducted book reading programmes to inspire students as well as provision of education infrastructure, among others.” he said.

    He said the laboratories was just one out of the many embarked upon by NNPC/Total and its partners in the current plan period. “As we hand over this project to the beneficiary, we implore you to ensure the sustainable use so as to impact on the students positively. We want to start seeing excellence in your results.

    “The sustainability barometer shall be seen during the impact assessment exercise, when the company will come back to check on how the project has helped to improve the studies in this institution,” he said.

    Governor of Ogun State, Dapo Abiodun, who was represented by the Director, Department of Primary and Higher Education, Ministry of Science and Technology, by Dr Waheed Olanloye, commended Total Upstream and its joint venture partners for investing massively in education and enhancing studies in schools in Nigeria.

    Olanloye said Abiodun is an education-friendly governor who supports public, private partnership (PPP), adding that the Total partnership with the state government keyed into the programme of the governor. He said the governor has been doing a lot in improving education in the state.

    Acting Principal, Toyon High School, Mrs Sabaina Bolanle Akoniyon ,thanked Total for the science laboratories with standard equipment. “The management team is impressed as the science laboratories would assist the school in improving its standard in science studies. However, we appeal to the state government to assign science teachers to the school to improve the quality and performance of students.

     

  • Osinbajo, Attah, Wabote for NLPGA summit

    Vice President Prof. Yemi Osinbajo (SAN) will be the Special Guest of Honour at the Nigeria Liquefied Petroleum Gas Association (NLPGA) LPG Summit 2019.

    Hosted by NLPGA, in partnership with Singapore’s LPG Summit, the summit 2019, the 9th Annual Conference & Exhibition of the association, will hold from November 26 to 27t, at the Balmoral Hall of the Federal Palace Hotel, Lagos.

    Its theme is “Harmonizing Development and Growth in Nigeria and Africa.” It will host stakeholders, experts, exhibitors from South East Asia, and the international gas community to a discourse on issues, developments, policies and innovations around liquefied petroleum gas (LPG) markets.

    Other experts scheduled to speak at the event include the Minister of State for Petroleum Resources, Chief Timipre Sylva; Managing Director of the Nigeria LNG Limited, Mr Tony Attah; Executive Director, Commercial Operations of Falcon Corporation Limited, Mrs Audrey Joe-Ezigbo; Executive Secretary, Nigerian Content Development and Monitoring Board, Engr. Simbi Kesiye Wabote; Chief Information Officer, Manufacturing, Sub-Saharan Africa, Agri-Business and Service Department, International Finance Corporation, World Bank Group, Mr Kalim Shah; Deputy Managing Director, World LPG Association, Mr Michael Kelly; Chief Operating Officer, Downstream Nigerian National Petroleum Corporation, Mr Adeyemi Adetunji and Chief Executive Officer, Forte Oil Plc, Mr Olumide Adeosun, among several other local and international speakers.

     

    Read also: FG unveils projects to stop petroleum revenue leakages

     

    The President, NLPGA, Mr Nuhu Yakubu, said the event provides the needed platform for stakeholders and experts to discuss issues surrounding deepening of LPG adoption on the continent.

    “Over the years, we advocated the adoption of LPG as an enabler of quality living for Nigerians and citizens across the continent.

    This year’s summit in partnership with Singapore’s LPG Summit will host the largest number of international delegates, critical stakeholders, experts and exhibitors in West Africa.

    The robust representation of participants promises to provide a crosscurrent of ideas and learnings from different markets and climes.

    Having the Vice President to join in these rich conversations further bolster the confidence that this will shape the policy environment on harnessing LPG opportunities for the benefits of our people,” Yakubu said.

     

    The Director of LPG Summit, Mrs Neasa Hapiak, noted that the summit provides a platform for the LPG industry and organisations both in the upstream, midstream and downstream sectors in the developing world to connect and seek new ways to grow the LPG industry.

    “Blessed with a vast gas resource, every stakeholder must seek innovative ways to harness the tremendous endowment of this very clean domestic fuel for use in Africa.

    We have partnered with the Nigeria Liquefied Petroleum Gas Association (NLPGA) to host this world-class event that is not only gathering the brightest minds in the gas industry globally but also to collaborate to find solutions to the LPG challenges that are unique to the global markets.

    I look forward to welcoming participants to this event as I am confident of a very positive and impactful outcome,” Ms Hapiak said.

  • Adopt automated truck tracking, expert urges marketers

    Vehicle tracking devices could be the edge over competitors. Investing in them enables oil marketing companies keep track of cargo to ensure timely delivery of products and services, reports AMBROSE NNAJI. 

     

    To check products diversion and other unethical practices, oil marketing firms have been advised to adopt trackers to monitor their fuel trucks.

    An aviation expert, Adewale Sanni, gave this advice at the Total Nigeria Plc Africa Customers Week, in Lagos.

    Sanni, the Country Station Manager of Lufthansa, who spoke on the theme: “Aviation Fuelling Challenges – Special Focus on Nigerian Market,” said  automated trucking on haulage was in line with international best practices.

    This, he said, is “to standardise and regulate the process of transportation of petroleum through tracking of trucks using available best practices in the aviation industry.”

    He said: “Tracking system should be embraced; fuel haulage should be tracked at any time through an App. We are still doing manual tracking rather than automated. Airlines are the lifeblood of the aviation market. When airlines succeed and prosper, the rest of the markets prosper”.

    “Over the past decade, as the global economy has improved, airlines have grown in profitability, matured in terms of employing better capacity management and cost controls years,’’ he added.

    Sanni said in airline business, passenger travel has continued to grow above the long-term 10-year average of 5.5 per cent, adding that the latest Economic Performance of the airlines industry report, from the International Air Transport Association (IATA), showed a slight cooling in passenger demand.

    “In 2018, demand measured in revenue per kilometer grew by 6.5 per cent, down from 8.0 per cent growth in 2017. IATA expects passenger demands to drop to 6.0 per cent growth in 2019. Capacity measured in available seat kilometers rose by 6.0 per cent in 2018 compared to 6.6 per cent in 2017, with predictions for 5.8 per cent growth in 2019”.

    “Passenger load factors have therefore continued their slight upward trend from 81.5 per cent in 2017 to 81.9 per cent in 2018 and are forecast to reach 82.1 per cent in 2019,’’ he stated.

    Sanni, nevertheless, admonished oil marketing companies to embrace automated invoicing system approach in the aviation industry than invoicing manually.

    He urged the companies to consider international best practices on automated invoicing system, adding that it would help to fast-trace payment process.

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    Sanni advised Total to embrace the model and get the App to commence on automated invoicing to reduce manual invoicing. “You have the resources and facility because that’s what we should be promoting in the aviation industry,’’ he insisted.

    Managing Director of Aero Contractors, Capt. Ado Sanusi urged Total downstream to be more strategic and goal driven toward customers’ satisfaction and to always put customers first at the front their business.

    Sanusi made a presentation on “Operational Excellence in Airline Operation-A Focus on Customer Centricity.” He commended the management of Total Nigeria Plc for their effective customer service delivery, adding that true customer-centric organisations identify their most valuable customers and ensure their satisfaction.

    “In order to do this, organisations gather customer data from multiple sources and channels and target their most profitable customers with relevant offers at the right time.”Customer-centric is an approach to doing business that focuses on providing a positive customer experience both at the point of sale and after the sale in order to drive profit and gain competitive advantage, which Total is doing to us. Another potential benefit of a customer-centric business strategy is that it can increase customer satisfaction.

    Also, Managing Director, Total Nigeria Plc, Imrane Barry, commended the aviation operators for surviving the business in spite of huge challenges in the industry. He said the “Africa Customers Week’’ became necessary to appreciate stakeholders and valued customers for consistence patronage. According to him, Total is the only International Oil Company in the downstream sector in Nigeria   because the group firmly believes in the country. “We believe in Africa”.

     

  • ‘Poor exploration threatens oil reserves, production targets’

    It was the gathering of oil and gas industry chief executives and stakeholders at the  Nigerian Association of Petroleum Explorationists (NAPE) conference, where the wellbeing of the industry took the front burner. As the special guest of honour, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari, spoke on the amended Deep Offshore Act, oil bid rounds and Nigeria’s oil reserves and production targets, among others, EMEKA UGWUANYI was there

     

    Nigeria’s aspiration to achieve 40 billion barrels of oil reserves and three million barrels of oil per day production by 2023 may be a mirage until industry players go back to exploration, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari, has said.

    Kyari, who was the special guest of honour at the ongoing 37th Annual Conference and Exhibition of the Nigerian Association of Petroleum Explorationists (NAPE) in Lagos, identified unresolved fiscal policies and investor apathy, among others, as the cause of the lull in exploration for oil.

    He also noted that this year’s theme “Expanding Nigeria’s petroleum landscape: Digitalisation, innovation and emerging new technologies”, is apt considering the current realities in the industry.

    Kyari said: “Our target is to hit 40 billion barrels by 2023, but not until we go back to exploration, we may not achieve that target. Despite the fact that oil production is ongoing, the additions are not matching production. With lack of exploration, the country will be on the verge of depleting its oil reserves, which currently is 37 billion barrels.

    “The lull in exploration activities by oil companies was responsible for the inability of the country to meet the 40 billion barrels reserve target it set some years ago. The inability of oil companies to go into fresh exploration activities was due to lack of a fiscal regime for the industry.

    “Since 1999, we have been trying to work on a new legislation for the oil industry to no avail and this has negatively impacted the oil sector because a lot of investors are just sitting on the fence watching the direction the country will embrace. I assure you all that all issues around the fiscal regime should have been sorted out latest by middle of 2020.”

    The NNPC chief said the reserves have remained at 37 billion barrels over the years because of the lull in exploration, adding that investor apathy is another reason for lull  as they ask critical questions relevant to their operations and interest. Some of the questions are: Can I recoup my investment or get reasonable figures on Return on Investment? If the answers to these are not in the affirmative, they tend to explore other investment havens.

    He expressed worry that competition from other energy sources, such as renewable, has made it difficult for oil companies to look more deeply into exploration activities. However, Kyari said he didn’t believe oil would become insignificant by 2040. He said: “There will still continue to be need for fossil fuel. Though, there is competition against fossil fuel, especially coming from renewable but that cannot replace the place of fossil fuel. Crude oil will still remain relevant beyond international agencies’ forecast of 2040. Increasing population and growing demand will always remain a factor, which implies there will still be at least an oil consumption of 100 million barrels per day by 2040.”

    Read Also: NNPC boss justifies amendment of Deep Offshore Act

     

    On innovation and latest technology in oil exploration, he said the recent discovery of oil in Kolmani Well 2 in the Gongola Basin remained the biggest indication that modern technology helps in accelerating oil find. He said for over 35 years, the industry could not find oil in the frontier basin but with the deployment of latest technology and innovation using the best and latest  digital solutions, the NNPC was able to strike oil in that region.

    The NNPC chief also stated that Nigeria will conduct bid round in the ultra-deepwater province, adding that the ultra-deepwater area is completely unexplored, a development that may soon create investment opportunities for players in the sector. “The ultra-deepwater is completely unexplored today but the end of next year there will be some form of bid rounds in ultra-deepwater terrain,” he added.

    Deepwater fields are water depths of more than 1,000 feet while ultra-deepwater fields are in water depths greater than 5,000 feet.

    NAPE President, Mr. Ajibola Oyebamiji, said the association would not relent in its efforts aimed at ensuring that all hands are on deck to grow exploration activities in the country. He said the job of explorationists was to find oil wherever it may be, assuring the government and the industry that NAPE would step up the game in the quest to develop the industry.

     

     

  • Much ado about tariff regime

    Electricity consumers nationwide will faceg a much-bigger problem soon. The reason is the Federal Government is planning to implement what its describes as major tarrif adjustment next year.  This, no doubt, will worsen the plight of the average consumers of electricity, who are daily experiencing power outages and its attendant effects on the economy, writes AKINOLA AJIBADE

     

    The Federal Government is to carry out a review of electricity tarrifs next month, which will be implemented  in January. This to promote efficiency in the sector currently battling problems such as illiquidity and poor service delivery due to lack of many deficient consumables required to deliver power to consumers.

    Electricity tarriffs that are integral to the growth of the sector vary from one firm to another, depending on how customers are classified.

    Before now, the government, through the Nigerian Electricity Regulatory Commission (NERC), this year approved five minor electricity tarriff reviews, that were pending since June 2016, a development which has caused a spike in the cost of electricity.

    In its latest reports, NERC said the reviews approved were for the periods before 2018, adding that it was yet to approve a review of the tarriff for the first half of 2019. It said the tarriffs covered more than eight million customers in the books of the 11 power distribution companies (DisCos) in the country.

    The issue has generated public outcry, as members of the organised labour have criticised the measure, describing the development as unfortunate. It argued that  industry was struggling to provide enough power to meet the growing needs of Nigerians.

    While this lasted, the commission is working on how to review major tarriffs by  next month, which would be implemented in January.

    Investigation revealed that the implementation of major tarriffs would, like others before it, follow a progressive pattern, which means that NERC would increase the tarriffs in relation to the quantum of energy allocated by each distribution company and consumed by the end users.

    Findings further showed that the sector, on the average, has recorded an increase in tarriffs in the past five years.  It is on record that electricity consumers paid between N10 per kilowatt hour and N24.20 kobo per kilowatt hour within a period of five years – 2015 to 2019, without substantial improvement in electricity supply.

    Based on this, the industry will likely  witness increase in tarriffs in future, as NERC, in line with the constitution, is obliged to review tarriffs every six months, as stated in the Act, which established the Multi-Year-Tarrif Order (MYTO).

    MYTO was designed by the Federal Government to provide correct pricing, taking into consideration the key principles of cost reflectiveness and affordability, among others.

    Stakeholders said any attempts by NERC to increase tarriffs next year without ensuring a corresponding improvement in the supply of electricity,  would be an error of judgement..

    The stakeholders, who are drawn from the distribution arm of the power, manufacturing and allied sectors of the economy, berated the government for increasing tarriffs, in the face of irregular supply of electricity and low productivity.

     

    DisCos

    The 11 power distribution companies (DisCos) are in tandem with the Federal Government to implement major tarriffs in the sector. The firms, in the second quarter of 2019, was to hold a meeting with NERC on the issue. Though the meeting was postponed, the firms resolved that consumers must pay tarriffs as and when due.

    The Director, Research and Advocacy, Association of Nigerian Energy Distributors (ANED),  Sunday Oduntan, said the firms recorded a shortfall in tarriffs of N384 billion ilast year, saying the government should address the shortfall to enable DisCos perform their obligations.

    Read Also: NERC yet to approve hike in electricity tariff

     

    He said the sector had a tarriff gap of N1.3 trillion, arguing that the development had made it difficult for the power companies to perform the aggrements with the Federal Government.

    He said:” The tarrif gap is between what government has specified as the cost of electricity that we ( DisCos) distribute or retail and the cost of the product. It is the gap that has solely contributed to the excess of N1.3 trillion, which DisCos are carrying on their books.”

    Oduntan said the firms were not advocating for increase in tarrifs, but calling on the government to bridge the gap recorded by operators. He said when this happens, the firms would improve their services, maintain and build new networks, buy new equipment, solve metering problems and put in place other measures that would help in improving operational efficiency.

     

     

    Manufacturers’ opinons

    Consumers – industrial and domestic – are at the receiving end of problems in the sector. Industrial consumers are firms which provide services and produce goods.

    The President, Manufacturers Association of Nigeria(MAN), Mansur Ahmed, said manufacturers were burdened by poor regulation of the power sector and tarriff regime, saying the sector was unable to provide regular electricity despite it being privatised  six years ago.

    Ahmed said:” We ( manufacturers) are frustrated by issues such as poor regulation and tarrif regime. We all know that power is not available in Nigeria,” wondering  why  government is asking consumers to pay tarriffs on energy that is not adequately provided for them.

    He added:  “Both the minor and major tarriff reviews that have been conducted in the time past, do not reflect in the quality of electricity, that is being supplied to Nigerians.They are short of expectations.

    He said the priority of the government should be on how to administer the tarriffs well and not increasing them without corresponding services to the people.

    “If power is available 24 fours in Nigeria, people would not be forced to pay for the energy which they are consuming. It is wrong to continue to impose tarriffs on people amid poor electricity supply in the country.” he added.

    He said tarriffs should reflect the cost of energy consumed by users, stating that consumers would be encouraged to pay when they have cost-reflective tarriffs.

    The economy, Ahmed said, is constrained by problems in the energy sector, stressing that the country may witnesss another round of recession, if it failed to significantly improve its power generation, distribution and transmission process.

     

    Labour kicks

    Organised Labour Unions, including Nigerian Labour Congress (NLC), Trade Union Congress (TUC) and allied movements are protesting the plans to implement new tarriffs, saying such moves  demonstrated  that the government was not sensitive to the plight of masses.

    NLC President Mr. Ayuba Wabba, urged Nigerians to resist attempts by the government to hike  tarriffs, alleging that the Ministry of Power had conspired with electricity companies to create new tarriffs.

    Also, TUC President Mr. Bala Kaigama also alleged that NERC and electricity firms were trying to undercut Nigerians, by ensuring that they paid tarriffs not proportinate to the services they are giving to the people.

  • ICCDI, Bio-Stark Green Solutions emerge winners of Sage Climate Pitch Competition

    The International Climate Change Development Initiative (ICCDI), a youth-led organization on a mission to build climate-smart generation through education, empowerment across Africa has clinched the grand prize of Seven Hundred Thousand Naira in the 2019 SAGE Climate Pitch Competition, while Bio-Stark Green Solutions, a waste recycling company that recycles organic waste into Bio-Energy emerged first runner up and took home the sum of Three Hundred Thousand Naira.

    The SAGE Climate Pitch Competition is an initiative of the Social Accelerator for a Green Economy (S.A.G.E) Innovation Centre, a non-profit organization that empowers entrepreneurs to build and scale bold solutions in the fight against climate change. The winners emerged after a fierce pitching competition that held at Oriental Hotel in Lagos.

    Nazanin Alakija, founder of SAGE Innovation Center congratulated the winners while stating that the pitching competition was aimed at seeking entrepreneurs with innovative ideas and solutions to fight climate change. She also revealed that the winners are worthy entrepreneurs whose ideas have demonstrated viable solutions to make the planet safer. “The SAGE pitching competition was opened to all social entrepreneurs with viable and innovative ideas to help our environment safer, and it is amazing to witness the success of this day as the winners have come up with unmatched ideas to making the world a safer place for all. I congratulate all the winners and the finalists,” she said.

    READ ALSO: Nazanin Alakija’s S.A.G.E Innovation Centre Launches Climate Pitch Competition For Social Entrepreneurs

    Abikoye Abimbola, Campaign Lead for ICCDI Africa, and winner of the grand prize of the pitching competition expressed her profound gratitude to SAGE Innovation Center for giving climate advocates a platform to showcase their ideas to fighting issues affecting the environment. “On behalf of ICCDI Africa, I want to express our profound gratitude to SAGE Innovation Centre for providing us this wonderful platform to showcase the solutions we are providing to helping our environment become safer and healthier for all. With this funding, we will be able to upscale our activities and solutions in the fight against climate change by engaging in more educational and community empowerment initiatives,” she stated.

    Jeremiah Hinmikaye, founder of Bio-Stark Green Solutions and first runner up at the competition revealed that SAGE Innovation Center has set the pace for other climate advocacy groups by supporting entrepreneurs who have sustainable solutions to fighting climate change. He further calls on other companies to emulate SAGE Innovation Centre to come up with such platforms to help more social entrepreneurs scale up their practices in the fight against climate change.

    The SAGE Pitching Competition had a total of 17 viable entries, out of which the top five pitched at the competition and two winners emerged, going home with a total of One Million Naira. All top five contestants were also given certificates of participation by the Social Accelerator for a Green Economy.

  • Local content ’ll cut unit cost of crude oil production, says Sylva

    Nigeria’s high production cost per barrel of crude oil, considered one of the highest in the world, is a concern to the Federal Government. In view of this challenge, the Minister of State for Petroleum Resources, Chief Timpre Sylva, has promised that the government would deepen implementation and compliance with local content to reduce the cost of producion. EMEKA UGWUANYI reports.

     

    The Federal Government has pledged to deepen the implementation of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act to lower high crude oil production cost, the Minister of State for Petroleum Resources, Chief Timpre Sylva, has said.

    He stated this during his first visit to the Nigerian Content Development and Monitoring Board’s (NCDMB) head office in Yenagoa, Bayelsa State.

    He visited the Board’s new 17-storey headquarters, which is nearing completion, and other project sites.

    Emphasising that the government’s primary target in the sector was to significantly reduce the unit cost of producing a barrel of crude oil, Sylva stated that “local contractors tend to be cheaper than expatriates and international contractors and that’s why we want to encourage local content and give more opportunities to local contractors. By extension we will reduce the cost of doing business in the oil and gas industry in Nigeria.

    “Local Content is part of cost reduction strategy. That’s why I came here, to encourage more local participation in the activities of the industry.”

    The minister also praised the NCDMB for epitomising its mandate by using an indigenous contractor to develop its new headquarters.

    He described the edifice as world class and a clear demonstration of the capacity of contractors. Such superlative performance on projects would pave way for the engagement of other local contractors in the oil and gas and construction sectors, he said.

    “When you have seen one contractor perform this good, you are encouraged to patronise more local contractors,” he added.

    He expressed confidence that the new NCDMB structure will attract a flurry of oil industry activities to Bayelsa State, noting: “The problem we have had over the years was that the region where oil production takes place did not have proper structures to promote lots of events. That’s why you see oil and gas events going to Abuja and Lagos.

    But when you have a befitting facility here, going forward, there will be a lot of oil and gas related activities in the Niger Delta.”

    Sylva commended the NCDMB for the numerous achievements it had recorded in the implementation of the NOGICD Act.

    Read Also: NNPC: Depot fire will not affect petroluem supply

     

    He said: “I am quite impressed with what they have done in a very short time of existence. The new headquarters building is a testament to that impressive performance and of course, you have the 10 megawatts (Mw) independent power plant. It is a modular plant that can be increased up to 25Mw.”

    NCDMB Executive Secretary of NCDMB, Simbi Kesiye Wabote, confirmed that local content implementation lowers the cost of crude oil production, particularly in the long run.

    He listed other key elements that contribute to high crude oil production cost in Nigeria to include security and infrastructural challenges as well as protracted contracting cycle.

    He noted that several Nigerian oil service companies had executed several projects at costs much lower than their international counterparts, adding that countries such as Brazil, Malaysia and Norway that had practiced local content in their oil sector for decades had long enjoyed significant cost reduction in their per barrel cost.

    Wabote explained that local content serves as an opportunity cost for the Federal Government to empower its citizens and get them involved in the activities of the oil and gas industry.

    He added that local content guarantees security of supply in the industry, recalling that local service companies and skilled Nigerians personnel ensured that operations of the oil and gas industry continued apace during the height of restiveness in the Niger Delta region a few years ago when most foreign companies and their staff had pulled out.

     

     

    Providing details on the new NCDMB facility, NCDMB chief reiterated that it will be ready in December 2019 but relocation of staff will be in phases. He stated that the project recorded huge impact on the local community.

    According to him, “when we started, we took about 50 youths from the host communities and trained them in carpentry, masonry, laying of tiles and other skills.

    Today, those youths are working on the facility and because of the skills they have acquired, the contractor will take them to other projects.

    “In terms of Corporate Social Responsibility, we worked with the contractor and built a town hall for the Swali community which we commissioned last year.

    Many members of community also supplied sand, granite and other inputs. They have been an integral part of the construction.”

    The Executive Secretary also said NCDMB had developed a sustainability plan for the facility, which includes renting out some of the floors to reputable oil and gas organisations. “Currently we have two applications from operating companies,” he added.