The Nation Newspaper

Category: Energy

  • Panasonic holds training in Lagos, Enugu

    To boost its after-sales support capacity, Panasonic Middle East & Africa Division and Panaserv Nigeria Limited, promoters of the Panasonic brand of electronics, have organised a special training in Lagos and Enugu for its key technical staff members, channel partners and freelance technicians and engineers on air conditioners installation and repairs.

    The training, which took place this week, was facilitated by delegates and engineers from Panasonic Japan, Malaysia Factory & UAE as major resource persons, in conjunction with the best of the company’s core technical staff members at all Panaserv service centres in Lagos, Abuja, Kano, Port Harcourt and Enugu.

    On the reason for the training, one of the two chief trainers from Panasonic, Mr. Premsankar Vijayan, said delivering the skill enhancement for technical partners was an activity ingrained in the culture of the organisation, noting that the company would continue to empower more technicians with requisite skills.

    Read Also: Panasonic India mulls hike in phones, consumer appliances prices

    Vijayan explained: “These training sessions offer participants the opportunity to update their skills in residential air conditioner installation and the use of ultra-modern tools for accurate diagnoses and repairs of air conditioners. This is why among the equipment being deployed for practical demonstrations here includes the latest models of gas leakage detectors, digital temperature thermometers, and vacuum machines, automated gas refilling machines, portable welding machines, clamp meters and several others.”

    Vijayan further explained that the training would deepen the pool of well-trained technicians that would not only assist the company in offering after-sale services to its customers but also help to bridge the technical skills gap in Nigeria.

  • ‘Intensify fight against building LPG skids at filling stations’

    The Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM) has called on the federal and state governments to heighten the fight against indiscriminate deployment of liquefied petroleum gas (LPG) skids at filling stations without considering the safety element. To them, the merging of LPG and petrol is a time bomb waiting to explode. They say the earlier stakeholders stood up against this deadly practice, the better, writes EMEKA UGWUANYI

    The fight against building liquefied petroleum gas (LPG) skids at petrol stations has been on in the past few years. However, owing to the increasing indiscriminate deployment of such skids at fuel retail outlets, it has become a great concern to players in the industry.

    The Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM) has taken the fight to states. They had written almost all state governments and are partnering some, such as Ondo, Ekiti, Nasarawa and Ogun, to ensure that LPG, also known as cooking gas, is not sold in the same place with petrol.

    After their latest council meeting in Lagos, NALPGAM urged stakeholders, including federal and state governments, regulatory organisations and industry players to fight the menace.

    Its Executive Secretary, Mr. Bassey Essien, said: “The LPG industry is growing in an exponential manner with increasingly being embraced by Nigerians. Currently, the number of households that have embraced LPG has risen significantly compared to the last five years.

    “The governing council of the association has met and, having risen from an emergency council meeting, has resolved to commend the Federal Government on the removal of Value Added Tax (VAT) on domestic LPG and to draw the attention of the Federal and state governments to the increasingly indiscriminate deployment of LPG skids in petrol stations and refill outlets without taking into consideration the risk element involved in this.

    “We also resolved to align our association’s position with all relevant government agencies, particularly the Department of Petroleum Resources (DPR) to curb this increasing menace. We want to appeal to the government that in as much as the association is doing so much to complement the deepening of LPG consumption in Nigeria, we are asking the government to create the enabling environment for players, so that we can actually go further to encourage more embrace and usage of LPG in many households in the country.

    “We want to appeal to the government in terms of representation that have been made on behalf of the industry as we have we noticed that such representations have not been inclusive because the industry is not well represented when issues  are being discussed with the government . There are several facets of the value chain and we are requesting that in subsequent dialogues, discussions and workshops, every facet of the value chain must be well represented so that issues and conclusions taken will be all embracing.”

    Read Also: NIPCO to extend gas facility to 25 off-takers

    Buttressing what Essein said, a council member, John Yakubu, noted: “What we have across the world is LPG bottling plants and not filling stations and what that entails is that for LPG bottling plant to exist anywhere, there are certain standards that must be met by the operators – either you have a mini-LPG bottling plant or standard LPG bottling plant.

    “There is nowhere fire and petrol co-habit; that is, what the association is saying; and that is the standard we adopt in building our plants. We are appealing to those deploying the skids either by their filling stations or their eateries to, please, adhere strictly to standard operating procedures as laid down by the DPR. You don’t have your own standard procedure, so that Nigeria will be safe and we will be safe as a people. We should not because of profit or what we want to benefit set this nation on fire. There is nowhere LPG is sold alongside petrol in the world.”

    The association’s National Deputy President, Oladapo Olatunbosun, said the removal of VAT has brought down the cost of LPG considerably. He noted that LPG value chain includes the terminals, engineers and the plant owners, but the key factor in the chain is the plant owners.

    “They are closest to the end-users. They serve as intermediaries between the terminal owners and the end users and if anything goes wrong, they answer for it.

    “They have ample investment. Our association’s membership is over 600 and their investment is in billions of naira, far more than you can imagine. Without plant owners, there will be no effective distribution of cooking gas anywhere in the world. The bottling plant companies are the ones that bottle the gas to make accessible to end-users or households. So, the plant owners cannot be left out in any decision-making process because it touches other facets.

    “The other facets of the value chain, such as the engineers and importers, don’t work directly in distribution and deepening of us-age of gas. As a very important part of the value chain, our interest has to be properly and fully represented. We don’t want to be represented by proxy in important decision making processes in the LPG industry. We (plant owners) are the key stakeholder in the LPG industry because we invested huge resources to ensure that the product gets to every part of the country. Therefore, decision-making in the industry must be inclusive of all players in the LPG value chain. Making portfolio investors represent the entire value chain in decision-making is not progressive because they don’t know the industry inside out in terms of operation and safety requirements.

    “DPR has given a deadline to all skid owners to move their skids from petrol stations because it agreed that marriage of LPG and petrol is a time bomb waiting to explode. DPR has directed them to migrate to mini plants if they couldn’t afford big plants before the expiration of the deadline next year. The regulator noted that such mini plants must be built away from petrol retail outlets. Adherence to that directive will ensure that necessary safety infrastructure and facilities are built in the mini or standard plants but because of the gain, some people are not adhering to the regulatory directive.

  • ‘Why power generation is low’

    Though gas shortage is the main problem of electricity generation firms, experts say other challenges, such as the rising debts profile of the power firms, gas price and transmission bottlenecks, are also threatening the sector, writes AKINOLA AJIBADE

    THE power sector is in dire straits. With a population of close to 200 million people, experts say the country needs between 50,000 megawatts (mw) and 60,000 Mw of electricity to survive. Although the industry has an installed generation capacity of 12,962mw, it generates 7,562 mw, of which only 5,375mw is available for transmission. Generating companies (GenCos) do not have the incentive to increase their capacity, because the country’s capacity for transmission is limited to about 8,100mw.

    In all these, the country relies on two energy sources, gas-fired and hydro power plants for survival, while its off-grid electricity segment is still at the infancy stage. While the hydro power stations are not more than five, representing about 20 per cent of the country’s generation, the gas-fired or fossil fuel plants are 32, which represent 80 per cent of the power being generated in the country.

    The hydro power plants are Kainji (760mw), Jebba (576.8Mw), Shiroro (600mw), all in Niger State; Zungeru (700mw), Kadin Kowa hydro (480mw), and Mambila Power Plant in Taraba State which is under construction.

    On the other hand, the gas-fired plants are in Lagos, Ogun, Ondo, Delta, Cross-River, Akwa Ibom,  Edo, Abia, and Rivers states, among  others. There are also Egbin (1,320mw), Sapele (1,020mw), Transcorp-Ugbelli (972mw), Afam 1-4 Power Station (977mw), Geregu 1 Power Station (414mw), Omotosho 1 Power Station (335Mw), Olorunsogo (335mw), Kwale Okpai (480mw), Afam V1 (642mw), Akwa-Ibom Power Station (500mw), AES Barge (270mw), Omoku (150mw) and Trans Amadi(136mw) and Rivers State Generator( 180mw).

    Others are Aba Power Plant (140mw), Geregu 11 (434mw), Sapele (450mw), Olorunsogo (675mw), Egbema (338mw), Calabar (561mw), Ihovbor (450mw) and Azura (450mw).

    Read Also: Clean power generation for Nigeria

    Worse still, is that the country is surviving on less than 5,000mw, a far cry from what South Africa is generating to meet the needs of its 56.7 million population.

    One issue, which has been canvassed by stakeholders, as the major hindrance to the growth of the power sector, is the shortage of gas and its cumulative effects on the production of electricity in the country.  Though the issue has been discussed at local and international fora, with a view to proffering solutions to it, the solution appears not in sight.

    According to close watchers of unfolding events in the sector, making gas available for production of electricity remains a challenge, because stakeholders, including the Federal Government, have not deemed it fit to address what they termed ‘specific problems’ in the sector.

    They said the problems are debts, rising cost of transporting gas to generation companies, where it is needed to produce electricity, poor storage facilities and difficulties in evacuating power to power distribution firms by the Transmission Company of Nigeria (TCN), among others.

    The Association of Power Generation Companies (APGC) Executive Secretary, Dr. Joy Ogaji, said the growth of the electricity industry was endangered, because the debts owed generation companies were yet to be paid.

    She said the payment of debts owed generation firms is key to their growth, adding that the delay in paying the debts has untold effects in their businesses. According to her, power output would continue to be low for as long as the GenCos are still being owed in the industry.

    Dr. Ogaji said: “Where do you expect generation firms to recoup the money spent on procuring gas for production? She said neither the energy distribution firms nor the Nigerian Bulk Electricity Trading Company (NBET) Limited was making moves to offset the debts.

    “The power generation companies are  being owed over N1 trillion by DisCos and NBET. The energy distribution firms paid 16 per cent and 17 per cent of the debts in  June and July, this year. How can the GenCos survive under this environment? “

    NBET was set up by the Federal Government to administer and control energy pool. She said the debts were accumulated because the DisCos decided to take electricity on credit from the GenCos. She said the GenCos have enough gas to produce power at the moment.

    Energy, Dr. Ogaji said, is not a physical product  that can be displayed in the shop, arguing that operators, such as DisCos, should be able to pay for the electricity given to them by the power generation firms.

    Another problem, which the sector is facing, she said, has to do with energy transmission.The transmission capacity, she said, is limited and the development is hindering the ability of TCN to transmit enough electricity to DisCos.

    “What is the benefit of generating energy, which cannot be transmitted to DisCos  for onward supply to consumers? The problems in the sector vary from one section to another. The three arms – transmission, distribution and generation – have their own challenges. But it would be good if the money owed the power generation firms is paid to enable them stay in business.”

    However, the former Chief Executive officer, Nigerian Gas Company(NGC), Dr. Godswill Ihetu, said gas is not a problem. he the country is blessed with huge gas reserves to grow its economy.

    With  600 trillion of unproven gas reserves and over 187 trillion of proven gas reserves, he said the country has enough gas.

    Ihetu said: “If it is to meet the needs of the international and domestic market, the country has enough gas to do so. He said the Nigerian Liquefied and Natural Gas (NLNG) Limited was not established to meet domestic needs like providing gas to the power firms.”

    Ihetu, also a former managing director of NLNG, said the firm only provides Liquefied Petroleum Gas (LPG) to the country, not natural gas.

    “This explains why some International Oil Companies (IOC) that are operating in the country and their local counterparts are made to provide gas for the power generation firms in the country,” he said, adding that the sector has problems, such as pipeline vandalism, a development that has made it difficult to supply gas to thermal plants.

  • TCN, Eko Atlantic seal deal on 1000Mw power supply

    The Transmission Company of Nigeria (TCN) and the management of Eko Atlantic have sealed a deal for the supply of 1,000 megawatts (mw) of electricity from the national grid to Eko Atlantic City, under the Eligible Customers Arrangement.

    TCN Managing Director Dr. Usman Gur Mahammed stated this when he visited to the city on Victoria Island at the weekend.

    Mohammed told reporters that TCN had conducted a study for supply of power from the grid to Eko Atlantic City, adding that under such power supply, the DisCos were not eligible to undertake such supply because it comes from a much-higher voltage line.

    He said: “The study conducted showed that gradually the energy required by the city would be close to 1,000mw but it will take a long time before we reach there. Therefore, TCN will build a 330kva double circuit line from Lekki to the city, but we are going to step down and supply them at 132KV line so that when the need for 330kv line comes up in future, we don’t need to build a new line. We will only add the transformers, meaning that we will just build a substation at 330kv.’’

    Mohammed said TCN had earlier placed an advert for the prequalification of contractors for both lines and the substation.

    Read Also: DisCos blame TCN for interruptions despite $1.6b

    “We have already advertised for the prequalification of contractors for both lines and substation. We are working with the Lagos State Government and they have given us all the support we need and the ‘Right of Way’ has been established and we are working to ensure that we realise it.

    “At present, we will connect them to about 30mw but will ramp it up to 1,000mw gradually as the city grows. All arrangements that will make it reach 1,000mw are what we are putting in place,” he added.

    The TCN chief said the city would be connected to the grid under the Eligible Customer Arrangement of former Minister of Power, Work and Housing, Mr. Babatunde Raji Fashola (SAN).

    “Under the Eligible Customer Arrangement, Eko Atlantic City is going to be connected directly to the grid. So, there is no distribution company’s requirement. At present, we have about eight companies under eligible customers’ arrangement and what we signed for them is closed to 200Mw.

    “But they are not taking up to 200Mw because some of them being steel companies are not operating at their optimum,” he said.

    The Utility Manager, South Energyx, for Eko Atlantic City, Mr Khaled Bader, said the company was committed to providing all the infrastructural facilities, including supply to their partners in the city.

    “With TCN, we will be able to realise this under the Eligible Customers arrangement. All facilities related to power distribution within the city are almost ready,” he said.

  • Benin DisCo trains 134

    Benin Electricity Distribution Company (BEDC) has turned out another set of 60 graduate trainees and 74 technician trainees in its 2018/19 edition, a programme targeted at improving service delivery to customers and bridging skills gap in the power sector.

    It also announced take-off locations for the Meter Asset Provider (MAP) scheme in Delta State.

    BEDC Managing Director/Chief Executive Officer Mrs. Funke Osibodu disclosed these  at the fourth graduation for trainees held at the Crescendo Conference Centre, Asaba.

    The take-off locations, which will be handled by Inlaks Power Solution sequentially, based on location, street by street are Government House and Cabinet area, Express, Anwai, SPC, Ezenei, SIO all around Asaba Township and Headbridge.

    Mrs. Osibodu said BEDC believes that the recruitment of new workforce and training of workers would help improve service delivery to customers and also build capacity in the power sector.

    “Our yearly recruit new employees under the Graduate Management Trainee and Technician Trainee schemes continue to grow as we lead in the drive to bridge the capacity and skills gap in the power sector. Our goal is to attract and train 1,500 young and new employees with the aim of helping to improve the quality of service to customers and also help reduce youth unemployment in our society,” she stated.

    Declaring that BEDC will leave no stone unturned in its desire to meet customer expectations, Mrs. Osibodu disclosed that between  last year and now, BEDC has connected 112 communities without electricity supply in its coverage areas to the national grid out of which 55 of such connections were done in Delta State.

    She solicited the cooperation of customers in respect of the ongoing enumeration exercise which she said was a precondition for them to benefit from the MAP scheme, stressing that this would enable the company plan properly for network expansion, improve quality of power supply, adding that nearly 400,000 households have been enumerated.

    In his welcome address, Chairman Board of Directors Victor Osibodu said the training schemes were conceived after the power sector privatisation in 2013 to enable BEDC respond to immediate talent needs of the sector, disclosing that within four years of its existence over 600 persons have been recruited.

    “BEDC aims to build a technically competent organisation with the required technical and functional competency, As such the two training programmes are blended learning experiences designed to equip new staff with the skills set needed to deliver excellent services to customers,” the chairman stated.

  • PwC: why mining sector is not growing

    Impact of the Solid Minerals Development Fund (SMDF) is yet to be felt in the industry, despite its rejiging as many issues continue to constitute setbacks to the sector.

    Head, Advisory and Mining Sector Lead, PricewaterhouseCoopers (PwC) Nigeria, Cyril Azobu, who stated this, also said commercial banks had remained doubtful and continued to see the industry as high risk. In addition, the existence of multiple regulations is reducing investor confidence as the cost and requirements have contributed to a seeming lack of interest in the industry.

    Established by the 2007 Mining Act and inaugurated in 2013, the Solid Minerals Development Fund (SMDF) had struggled to take off, despite its good intentions.

    The government’s goal is for the solid minerals sector to contribute three per cent to the gross domestic product (GDP) by 2025, currently, it contributes less than half a per cent.

    Objectives of the SMDF are to develop human and physical capital; geo-scientific data gathering, storage, and retrieval; the purchase of equipment by state-owned mining institutions; the provision of infrastructure; and the provision of extension services to small-scale and artisanal mining operations.

    It is expected to catalyse the minerals sector mainly by providing access to financial resources and training and by formalising the status of artisanal miners, this activity is envisaged as a way to reach the three-percent target. The first solid minerals roadmap, developed in 2015, had the objective of raising the sector’s contribution to the gross domestic product (GDP) to five percent by 2015, and 10 percent by 2020. Unfortunately, this target proved to be unattainable, and it was lowered to three percent by 2025.

    Azobu told The Nation in Lagos that data, which was at the heart of the industry was not robust enough to support investment inflows and key infrastructure such as access roads, dedicated rail lines, power, among others remain a challenge.

    He, however, expressed optimism that if the government maintained the drive and make the right choices, the solid minerals sector could contribute up to three per cent of GDP by 2025 as predicted in the roadmap, up from a current contribution of just about 0.5 per cent.

    Azobu agreed that there had been some notable achievements in the sector in the last few years. For instance, there have been efforts to improve the sector’s regulatory framework with enactment of new laws and establishment of the National Council of Mining and Mineral Resources Development.

    Notably, the Nigerian Institute of Mining and Geo-sciences, Jos (Establishment) Act was assented to by the President in November 2018 for training of manpower for the sector and research.  In addition, the Federal Government in the same year presented a roadmap for the “Development of Nigeria’s Industrial Minerals”, developed by the World Bank-assisted Mineral Sector Support for Economic Diversification (MinDiver) Project. Also, the National Gold development efforts saw the issuance of the first gold refining licence in the year.

    Furthermore, efforts to curb illegal mining had been ramped up by the provision of surveillance vehicles for mine inspectors across the country, and increased inter-agency co-operation.

    “The ministry has also continued on its journey to transform its processes by digitising some of its key activities,” Azobu said, adding that efforts were ongoing to automate the ministry’s activities with the provision of geographic information system (Egis) web portal and electronic submission of licences, permits and certificates to improve efficiency and speed-up the processing of transactions.

    GIS is a framework for gathering, managing, and analysing data. Imbedded in the science of geography, GIS integrates many types of data. It analyses spatial location and organises layers of information into visualisations using maps and 3D scenes.

    Azobu said: “This has become even more critical in the light of the African Continental Free Trade Area Agreement (AfCFTA) Agreement coming into force.”

    According to him, the fixation on extraction and exporting of raw minerals and ores at the expense of value addition is a big disservice especially as Nigeria continues to depend on importation of finished products.

    This, he stated, had further worsened by other African countries potentially taking advantage of the AfCFTA to invade our economy. “We must assess how competitive Nigeria will be against other more developed mining territories on the continent,” he added.

  • Saudi attack threat to global oil industry

    The attack on two major oil facilities in Saudi Arabia may be a pointer to an emerging trend that may adversely upset global energy security, if not swiftly checked. There are speculations that the incident may be a cross-border attack which may be seen from the prism of terrorism. EMEKA UGWUANYI looks at the incident.

    The global oil and gas industry was taken aback with the report of attacks on two major oil facilities by drones in the early hours of last Saturday in Saudi Arabia.

    Saudi Arabian local news network – Al Arabiya – had reported that two oil processing centres in Abqaiq and Khurais were attcked before dawn on Saturday, noting that the Saudi Interior Ministry reported fires at the two centres, which were later put off.

    According to reports, Yemen’s Houthi rebels, funded for years by Iran, claimed responsibility for the bombing while another report claimed the missiles or drones were launched from Iraq. However, a Houthi spokesman, Brig.-Gen. Yahya Sare’e, reportedly said the group’s forces “carried out a massive offensive operation of 10 drones targeting Abqaiq and Khurais refineries but he did not specifically say that they launched the drones from Yemen. Houthi movement is an Islamic political and armed organisation that seeks greater autonomy for Houthi majority regions in Yemen.

    Yemen’s state-controlled press claims Houthi rebels have been trained in Iranian-run camps.

    Reacting to the Saudi oil facilities attack, the United States President Donald Trump had said the US is “locked and loaded” and ready to respond to attacks on petroleum processing facilities in Saudi Arabia, as US officials said the evidence pointed to Iranian involvement.

    The US President did not mention Iran, but wrote on Twitter that he had “reason to believe that we know the culprit” behind the series of attacks on the Abqaiq facility, which is the world’s largest petroleum processing plant. The attacks disrupted more than half of the kingdom’s oil output and will affect global supplies.

    Trump tweeted: “(We) are locked and loaded depending on verification, but are waiting to hear from the Kingdom (of Saudi Arabia) as to who they believe was the cause of this attack and under what terms we would proceed!”

    The US government has produced satellite photos showing what officials said were at least 19 points of impact on Saturday at the two Saudi energy facilities, including damage at the heart of the kingdom’s crucial oil processing plant at Abqaiq. Officials told US media the photos showed impacts consistent with the attacks coming from the direction of Iran or Iraq, rather than from Yemen to the south. Iraq denied that its territory was used for an attack on the kingdom. US officials said a strike from there would be a violation of Iraq’s sovereignty.

    The US officials said additional devices, which apparently didn’t reach their targets, were recovered northwest of the facilities and were being jointly analysed by Saudi and American intelligence. The officials, who spoke on condition of anonymity, did not address whether the weapons could have been fired from Yemen, then taken a round-about path, but did not explicitly rule it out.  As a result of the attack oil price rose by almost $12 a barrel to $71.95 on Monday.

    In reaction to Trump’s comment, a senior commander from Iran’s Revolutionary Guards warned that the Islamic republic was ready for “full-fledged” war. “Everybody should know that all American bases and their aircraft carriers in a distance of up to 2,000km around Iran are within the range of our missiles,” the head of the Revolutionary Guards Corps’ aerospace force, Amirali Hajizadeh, was quoted as saying by the semi-official Tasnim news agency.

    However, Saudi de facto ruler Crown Prince Mohammed bin Salman has said the kingdom was “willing and able” to respond to this “terrorist aggression.”

    Reports say Saudi Arabia’s oilfields and pipelines have been targeted by rebels over the past year but never on such a scale and causing such disruption. Analysts warned that global supplies of oil are likely to suffer a “major jolt” following the attack. Aramco said the attacks would cut output by 5.7 million barrels daily, more than five per cent of global crude supply.

    Although Aramco’s Chief Executive Officer, Amin Nasser, said work was underway to restore production and that it would take weeks to return to full production capacity at the damaged facilities.

    Looking beyond Saudi attack

    According to industry analysts, the attack on Saudi oil facilities should be a concern to the global energy industry. They noted that oil producing countries should not jubilate over the increase in crude price necessitated by the attacks as there would be energy crisis should such attack be carried out on two more major oil producers simultaneously. To them, the sudden rise in crude price, especially if caused by incidents such as the Saudi attacks, will have long-term negative impact on the global economy. Therefore, there should be collective concerted efforts to prevent such attacks in all oil producing country.

    “If this incident is not tackled frontally to prevent future occurrence not just in Saudi but in all oil producing country through a collective effort, the perpetrators may extend it to other oil producing country and that will have damaging ripple effect. Every effort must be made to stop terrorist attack in any form on oil facilities. Oil is central to efficient global activities, therefore, besides astronomic rise in price, attacks on oil facilities especially cross-border attacks that target large facilities have to be nipped in the bud.

    “Remember that Saudi Arabia used to have the world’s largest oil reserves before it was overtaken by Venezuela in 2011. Currently, Venezuela is in crisis and most of this reserves are shut-in. Venezuela as at 2011 had reserves of more than 300 billion of proven reserves. Saudi Arabia’s reserves were 269 billion barrels as January of 2016. Also Iran and Iraq are among the world’s top oil reserves holders with 158 billion barrels and 143 billion barrels as at 2016.

    “In terms of daily production, according to statistics from the Energy Information Administration (EIA) at the end of last year, Saudi Arabia’s daily oil production was 12,419,000 barrels. Although United States’ daily output was more at 17,886,000 barrels per day, its consumption was more at 19.88 million barrels daily. Therefore, any major attack on one more big producers will create a major supply gap.”

  • ‘How refineries can function optimally’

    Over the years, Federal Government-owned refineries have suffered neglect, resulting in their inability to process crude at their installed capacities, despite efforts by the Nigerian National Petroleum Corporation (NNPC) to put them back into shape. However, experts say the refineries can still function optimally once NNPC is able to garner enough funds, build expertise and ensure the passage of the Petroleum Industry Governance Bill (PIGB), among others, writes AKINOLA AJIBADE

    The Group Managing Director, Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari, seems to have hit the ground running with his plans to fix the four state-owned refineries by 2023, and return them to their combined capacity of 445,000 barrels of crude oil daily.

    The refineries are Warri Refinery and Petrochemical Company (WRPC), Kaduna Petrochemical Refinery Company (KPRC) and Port Harcourt Refineries 1 & 2.

    The plans include the establishment of condensate refineries  to fast-track the supply of petroleum products across the country, supporting Dangote Petrochemical Refineries to actualise its dream of processing 650,000 barrels of crude daily and other private investors in the refinery business, in addition to ensuring that Nigeria becomes a net exporter of fuel globally.

    Expectedly, the plans were greeted with  applause by stakeholders who believed the idea would open a vista of opportunities for the refineries, which are on the verge of collapse, due to several years of neglect by various governments.

    Against this backdrop, there is the need to consider salient issues that border on the establishment of refineries by the Federal Government.

    Cost of refineries

    The refineries were estimated to have cost the government about $1.5 billion in the 70s and 80s, as the project were spread over time. Of note is that the refineries have become the most-prized national assets in Nigeria, despite their inability to process sufficient fuel for the daily running of the economy.

    With the exchange rate at N350 per dollar, the cost of putting a refinery in place is expected to be much higher. The former Managing Director, Nigerian Liquefied and Natural Gas (NLNG) Limited, Mr Godswill Ihetu, said refineries are multi-billion dollar projects and, as such, cannot be allowed to waste by any government that places the welfare of its citizens as a priority. The investment, he said, runs into billions of dollar and the government cannot afford to do away with it.

    Challenges

    Problems, such as bureaucratic bottlenecks, poor corporate governance, shortage of funds and obsolete equipment, are believed to have hindered the refineries from good performance.

    Others are lack of reforms in the industry and difficulties in getting suitable partners to repair the refineries.

    The Director, Energy Information Division, Centre for Energy Studies, Nigeria, Prof Omowunmi Iledare, told The Nation that the inability of the stakeholders, including the Federal Government, to  reform the oil and gas sector has caused a drawback to the refineries.

    He said lack of reforms has prevented the sector from having a clear-cut policy on the operation of some aspects that are key to its growth, adding that the issue makes monitoring of the sector difficult for the NNPC and other regulators in the industry.

    According to him, NNPC and other institutions saddled with supervising the industry depend on political expediency, adding that the issue was preventing them to use what he described as ‘rational economic decision determinants’ to stimulate growth in the industry.

    This, he said, was affecting the revenue base of the refineries and other areas. “The great barrier to the attainment of economy of scale in the petroleum industry is political interference, adding that the issue is affecting growth across the value chain,” he said.

    Maintenance

    The Federal Government has spent $1.6 billion on turnaround maintenance (TAM) of the refineries in the past 15 years. The figure, the immediate past Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, said was ridiculous in view of the state of the economy, adding that the cost of maintaining the refineries should be reviewed downward to grow the economy well.

    Kachikwu, who spoke at a stakeholders’ forum in Lagos, advocated the timely repair of the refineries to end fuel import.

    Similarly, the Southwest Chairman, National Union of Petroleum and Gas Workers Union (NUPENG), Mr. Tayo Aboyeji, said the billions of dollars spent on the maintenance of the refineries was ridiculous. The Federal Government, he said, should try and fix the refineries, adding that the cost of maintaining the refineries was too high. By fixing the refineries, he said, the country would have enough fuel for its citizens, adding that fuel importation was killing the economy.

    Dormant refineries

    Some of the refineries are dormant, a development which requires urgent attention to put them back into use. In fact, the output of the refineries have continued to plummet as they posted losses for nine consecutive months, the NNPC has said.

    Findings from NNPC’s latest monthly financial and operational report showed the refineries recorded continuous monthly losses from May, last year to January, this year. Further analyses by the NNPC report showed that since January, last year, only Warri Refinery Petrochemical Company was able to make profits in February (N127.91million) and Augus, last year (N578.16million).

    The report showed that Kaduna Refinery and Petrochemical Company (KRPC) posted the highest loss of N374 billion for January 2019 as it stayed dormant and failed to refine any crude from January 2018 to January, this year.

    The Port Harcourt Refinery recorded loss of N2.11 billion in January 2011 and the refinery was idle from July 2018 to January this year as it could not refine a drop of crude for seven months.

    Also, WRPC lost N2.513 billion in January 2019 but the report showed that of the four refineries managed by NNPC, only Warri refinery was able to process some volume of crude oil from January, last year to January this year. In January, this year, Warri refinery processed 104.459 metric tonnes of crude and posted capacity utilisation of 19.76 per cent.

    Way forward

    Experts said Nigeria is fuel-dependent; as a result, it uses the product for domestic and industrial activities. Nigeria consumes an estimated 35 million litres of fuel daily as against 50-60 million litres before the Federal Government shut its borders to countries, such as  Benin Republic, Ghana, Togo, and Niger in the sub-region where the product was allegedly smuggled to.

    Ihetu said it is imperative that NNPC shop for investors to improve the production from the refineries.  NNPC, Ihetu said, must put in place structures that allow corporate governance to thrive, adding that the idea would help in developing the refineries better.  “Lack of good corporate governance has impacted negatively on the operation of the refineries owned 100 per cent by the Federal Government,” he added.

    Iledare urged the government to reduce interference in the control of oil business. When this happens, operators would not lack the petroleum policy framework needed to survive in the sector.

    “Once the industry is freed from political interference, operators would be able to work well.  Operators would be able to guide themselves by the provisions of the PIGB. With the PIGB, there would be distinctions between policy, regulatory and commercial functions,” he said.

    He said selling the refineries in their current state is not the best option, arguing that the country would benefit when the refineries are fixed. “Selling or repairing the refineries should be a technical board decision not a management or ministerial decision, but if NNPC goes ahead to fix the refineries, the better for the country. In future, NNPC can leverage the refineries to achieve more growth,” he said.

    The Managing Partner, Zenera Consulting, Mr Meka Olowola, said the plans by NNPC to fix the refineries by 2023 could only be feasible when the country and the industry, in particular, were rid of the challenges facing them. Factors responsible for the continuous interruptions in the industry must be dealt with first before the refineries are fixed, he added..

    The problems, he said, include lakaidasical attitude of those in government and poor corporate governance, adding that the problems have resulted in the deterioration of facilities, pipelines vandalism that supply crude to the refineries and government’s inconsistent regulatory approach.

    The government, Olowola said, needs to put a better performance to stop irate youths from destroying pipelines and other facilities if the refineries should operate well in the country.

    “Refineries are set up to produce specified quantities of agreed products. If for whatever reason, operations are interrupted and they are unable to achieve production goals, the aims have been defeated. To prevent this from happening, when the refineries are fixed, the government has to put up a good performance with a view to stop the operation of the so-called vandals,” he added.

    Contracts for the surveillance, Olowola said, must be given to the right firms, adding that the idea would help in gaining the confidence of the communities in which the oil facilities are located.

  • Why Nigeria’s electricity challenge is financial, not technical – Khalil Woli

    Why Nigeria’s electricity challenge is financial, not technical – Khalil Woli

    By Opeoluwa Ademola

    Nigeria’s electricity sector continues to grapple with a longstanding paradox: despite producing significant amounts of power, the supply reaching homes and businesses remains unreliable.

    Analysts increasingly contend that the crisis is less about technology and more about economics, a mix of weak tariff structures, poor revenue recovery, and persistent policy uncertainty that keeps the national grid fragile.

    Energy analyst Khalil Woli, who has gained first-hand experience in Nigeria’s transmission networks, believes that understanding this financial dimension is key to solving the country’s power problem.

    “Even the most efficient power plants cannot deliver consistent electricity if the transmission system is underfunded or poorly managed,” he said. “The grid is only as strong as the economic and policy frameworks that support it.”

    Drawing from his time with the Transmission Company of Nigeria (TCN), Woli highlights how well-structured investments in transmission infrastructure can expand access for underserved regions.

    He was part of the team involved in commissioning a 330kV transmission line and a high-capacity transformer, projects aimed at boosting grid stability and connectivity. “Commissioning isn’t only a technical task,” he explained.

    “It ensures the infrastructure can handle operational stress and integrate seamlessly with the national grid.” He also points to the growing role of technological modernisation, particularly the adoption of Supervisory Control and Data Acquisition (SCADA) systems, which allow operators to monitor the grid in real time.

    “SCADA transforms data into actionable insights,” Woli noted. “It enables faster fault detection, reduces downtime, and prevents cascading system collapses that can cripple supply.”

    Yet, according to Woli, no amount of technology can offset the sector’s financial imbalance. He describes tariff misalignments and revenue collection inefficiencies as chronic obstacles to progress.

    “If tariffs do not reflect the real cost of maintaining and expanding the grid, investment will always lag behind demand,” he said. “Strong engineering alone cannot solve the problem. Sound financial planning and policy clarity are essential to sustain the system.”

    For Woli, effective transmission investments are more than infrastructure projects; they are instruments of social and economic change. “When a line goes live and thousands of people gain electricity for the first time, it shows how finance, policy, and engineering must work together,” he reflected.

    “Each connection represents both an improvement in quality of life and an opportunity for local enterprise.” As Nigeria strives to stabilise its grid and expand access, Woli’s perspective reinforces a growing consensus among experts: technical capacity is not the country’s limitation.

    The real challenge lies in building a transparent, predictable, and financially sustainable energy framework. Strengthening these foundations, he argues, is essential not only for lighting homes but for powering industries and enabling inclusive growth.

  • Ikeja Electric begins e-bills for customers’ convenience

    Ikeja Electric Plc (IE) has introduced electronic billing (e-billing) platform, which enables customers to receive electricity bills promptly and conveniently, via channels, such as SMS, USSD, email, IE Bill portal and IE mobile Application.

    The e-billing initiative is part of the firm’s desire to leverage innovation and technology to improve customer experience. It is designed to deliver electronic bills directly to the customer thereby eradicating challenges such as misplaced bills or delayed delivery and other issues which are associated with distribution of physical bills.

    The company said that very soon, e-bills will be the dominant mode of bill delivery considering its numerous advantages, as well as the company’s mass metering of customers across its network.

    The Head,  Corporate Communications for Ikeja Electric, Felix Ofulue, said: “What we have done with e-billing is to create different platforms through which post-paid customers can easily access their bills. As a forward thinking organisation, we understand that a critical element of product development is customer convenience and ease to access. This is what we intend to achieve by providing post-paid customers with easier options of receiving monthly bills via SMS, e-mail, USSD, IE Bill Portal and IE mobile app.”

    Ofulue also stated: “We believe that our customers appreciate innovative services that offer convenience, eliminate hitches and also fit their lifestyle; which is what e-billing guarantees. Therefore, this initiative was driven largely with interest of customers at the heart of our business.”

    He further pointed out that from an environmental perspective, e-billing will help IE take a step towards greater environmental sustainability, and for customers, e-bills will help reduce unwanted clutter and strenuous filings. The e-bills will also enable customers access historical data of their bills including consumption patterns.

    The e-billing service is free. The SMS is delivered to the registered phone numbers of customers while PDF bills are delivered to emails submitted by customers. PDF can also be downloaded via the website. The App is available on Android and will soon be available on other operating systems. There is also a billing portal which customers can access to download their bills on a monthly basis.

    Customers can update their contacts by visiting the company’s website, Customer Care Unit or the nearest IE service centres. For customers who do not have contact details on IE website, account managers will ensure all bills delivered to valid contacts provided by such customers.

    With the introduction of e-billing system, bills are delivered faster, it helps customers to reduce unwanted clutter of papers in their home, it eliminates manual printing and distribution of bills with all its attendant challenges, the risk of bills being lost in transit or affected by bad weather is also avoided, while it offers electronic tracking of bills delivery.  In addition, the e-billing initiative is a step towards greater environmental sustainability.

    The e-billing initiative is the first in the industry and complies with regulatory requirements.