The Nation Newspaper

Category: Business

  • Power generation to exceed 7,000MW by December

    Data from the Power Holding Company of Nigeria (PHCN) facilities and the National Integrated Power Project (NIPP), show that the Federal Government will exceed power generation capacity of 7,000 megawatts (MW) by end of the year.

    The Managing Director of Niger Delta Power Holding Company (NDPHC), which superintends the NIPP, Mr James Olotu, said the NIPP plant would supply at least 2500MW by year end. Generation from the PHCN facilities stood at 4477MW as at last month.

    While the government is making effort to rehabilitate dysfunctional units Egbin and other power plants, the NDPHC is also working to bring on stream new units from its power plants.

    Given this scenario, generation is expected to well exceed the current targeted combined generation of 6977MW.

    Olotu, who spoke at the inauguration of a newly built 150MVA transmission facility at the Ikeja West Transmission Station in Lagos, said four of the 10 plants supervised by NDPHC, are currently operational and generate 1150MW into the national grid. The four plants are Olorunsogo in Ogun State, Omotosho in Ondo State, Sapele in Delta State and Alaoji in Abia State.

    He assured that the improvement in power supply would be sustainable, adding that the NIPP henceforth would be inaugurating a new power facility either from generation or transmission or distribution every month.

    But categorically noted that each month new facilities would be commissioned to improve supply.

    Speaking during the inauguration of the 150MVA transmission facility at the Ikeja West Transmission Station, which brought the total capacity of the station to 750MVA, the General Manager, Transmission Company of Nigeria, Lagos Region, Oyeleke Adeoye, said the same 150MVA facility is being replicated at Akangba Transmission Station in Lagos.

    He said: “Ikeja West is a major station in Lagos. We have another one in Akangba and as you can see the leap achieved with this new facility, this additional capacity will affect the whole of Lagos State and part of Ogun State, up to Abeokuta. We have increased capacity now, before we had 4x150MVA, which translates to 600MVA and we now have additional 150MVA. So we have 750MVA here. With this, we will have increased power supply, which we are already experiencing in Lagos. If you live around Lagos, you could have noticed that.

    “In terms of maintenance, just like in the older transformers, we have maintenance programme for all of them. For us in Transmission we have always had equipment maintenance programme and that is why we have been able to keep the older transformers for over 40 years. We are having another intervention of 150MVA at Akangba.”

    Olotu also added that by next month, the NDPHC will commission more projects like this in Ibadan and Benin and will continue to commission new projects till end of the year. Every month, we will commission a new project in one part of the country to improve power supply that is our promise to Nigerians. However, he noted that the issue of gas supply has become a problematic one but is being addressed at the highest level.

    “The President, the Vice President, Ministers of Petroleum Resources and Power and all stakeholders sit on daily basis over this issue. All efforts are being put in place through this integrated mechanism to ensure that some emergency gas is delivered between now and December.

    “The Nigerian Gas Company has said that between 300 million standard cubic feet (mscf) and 500 mscf would be made available under this emergency period and would be dedicated to NIPP power plants. If we get that, we will get more power into the grid. This intervention is aimed at enhancing the efficiency of power delivery,” he added.

    He said that Alaoji is a 1074mw plant when completed and two units out of the six are ready now and will and be wheeled into the grid subject to availability of gas. He added that actions are being taken by the government to rehabilitate dysfunctional power stations to make them effective. “We have had shortage of capacity at the generation, transmission and distribution ends and the population of Nigeria is increasing, which calls for more supply,” he said.

  • Eland Oil raises N29.5b to buy Nigeria’s OML 40

    Scottish firm, Eland Oil and Gas has successfully raised N29.5 billion (118 million pounds) to buy some shares in Oil Mining Lease (OML) 40 in Nigeria. This was after being listed in the Alternative Investment Market (AIM ) in London, three years after the company was founded.

    OML 40 covers some 500 square kilometres and is located onshore in the Niger Delta and contains light ‘sweet’ oil. Since 1964, 18 wells have been drilled there, with 15 finding hydrocarbons. One field, Opuama, was formerly in production for over 30 years, from 1975 to 2006.

    Eland plans to target production from existing wells at Opuama that will be restarted at an expected initial gross rate of at least 2,500 barrels of oil per day (bopd) in the next six months.

    By late 2013, the company also plans to explore two wells. Within four years, it hopes to reach gross production of 50,000 bopd. The company also seeks to acquire and develop under-exploited upstream assets in Nigeria.

    “OML 40 is an asset with production and exploration potential and with independently certified gross recoverable 2P Reserves of 71.5 million barrels, 3P Reserves of 117 million barrels in the Opuama and Gbetiokun Fields and Mean Contingent Resources of a further 16.7 million barrels in the Abiala and Ugbo Fields,” an official of the company said.

    Expressing his gratitude to the company’s shareholders, Les Blair, CEO of Eland Oil & Gas, said: “I am extremely grateful to the shareholders of the company who have supported us to complete this milestone transaction. The fundraising of £118 million is the largest on an AIM IPO for over three years and highlights the exciting prospects for OML 40 and Nigeria as a whole.”

    The 45 per cent stake acquired by Eland and Starcrest Nigeria Energy Limited in OML 40 was previously held by Royal Dutch Shell, Total and Eni-Agip. Shell owned 30 per cent stake in the joint venture for OML 40 while Total Exploration and Production held 10 per cent and Agip Oil held five per cent and the Nigerian National Petroleum Corporation (NNPC) held 55 per cent.
    The Federal Government and the Nigerian National Petroleum Corporation, NNPC granted all relevant approvals for the sale of the 45 per cent interest to the buyers.
    Shell JV sold the 45 per cent interest in OML 40 to Elcrest Exploration and Production Nigeria (EEPN) for $102 million. EEPN is a consortium of Starcrest Nigeria Energy and Eland Oil and Gas.

    With the purchase, Eland will own an initial 20.25 percent, with 24.75 percent held by its Nigerian joint venture partner, Starcrest. The remaining 55 percent is held by the Nigerian government through NNPC subsidiary – National Petroleum Development Company.

    Commenting on the sale, Shell Nigeria Country Chairman Mutiu Sunmonu said the divestment is part of the company’s strategy to refocus its asset portfolio. “SPDC is positioned well for investment and growth opportunities in all areas, including domestic gas, which will be delivered with the support of our government, partners and the people of Nigeria,” he added.

  • PHCN to retrieve £2.24m  from Barclays Bank

    Nigeria may approach the United Kingdom government to retrieve about £2.24 miliion (N593.25million) belonging to the Power Holding Company of Nigeria  (PHCN).
    The money is said to be with the Barclays Bank of London.Chairman of the Panel on the Status of PHCN  Pension, Joseph Ajiboye, made this disclosure in Abuja, while presenting his report to the Minister of State for Power, Darius Ishaku, yesterday.
    He said the status of the fund is not in dispute, explaining that it is what the expatriates of the Electricity Company of Nigeria and the Niger Dam Authority were supposed to pay to the workers over the years.
    He said: “We picked this information from the Superannuation audit we have. The fund is not in dispute. There were bottlenecks . The Nigeria High Commission in London can be of assistance to retrieve that money from Barclays Bank.”
    The panel also recommended that the PHCN refund the money it collected from market operators to the Electricity Generation companies s (GENCOs), as well as the  Electricity Distribution Companies (DISCOs). Besides, it also called for the audit of all the money paid to the DISCOs.
    He said : “Money from DISCOs and GENCOs be refunded to the market operators. We call for the full audit of all the money paid to the DISCOs.”
    On PHCN pension, he stated that pensions and gratuities from 1990 to 1999 in the NEPA Superannuation fund was N 1.788billion .
    The report added that the pensions and gratuities paid under the fund between 2000 to 2010 was N51.279billion, stating that for 21 years, the total pensions and gratuities paid to the workers was N53. 067billion.
    Ajiboye, said there is N107.2billion actuarial valuation for the workers that none of them has been paid. He explained that it is fund meant for contingency in case the workers decide to sign off.
    He said: “ For 21 years running, the total gratuity and pension paid under the Supernnuation fund to all pensioners was N53.067billion. These accounts have been audited from 2000 to 2006, so the figure we have are  the figures that were  being paid.
    “If all the workers signed off from work and they were to be paid, the acturial valuation was N107.2billion. But that is contingent and nobody has been paid that money .
    “We had an issue of N107.2billion  which was an actuarial valuation. That is for contingency, it is not as if anybody has been paid.”
    He explained that the difference between the PHCN and other ministries pension systems is that the PHCN is not funded from the budget.
    Ajiboye said since PHCN made losses in most of the years, not much was set aside.
    His words: “It is not from appropriation.  It is not budgetary allocation, it is from whatever the PHCN can make  that was used to pay the workers. It was found out that PHCN made some loses for a number of years. So since they were unable to make profit,  they didn’t have much as pension contribution to the Superannuation Fund.”
    The panel chairman added that from meetings held with the workers and pensioners, right from the Niger Dam Authority to Electricity Company of Nigeria, there was no pension deducted from any worker’s salary till April this year, stressing that the 25per cent deduction was not done by PHCN.
    The Ajiboye led panel revealed that there was also a
    But PHCN, according to the report, had set aside a housing estate in Kado, which remain uncompleted, abandoned till date.
    Besides, he note that the second building that was to raise fund for PHCN in Lagos was confiscated by the Federal Inland Revenue Service because of the debt it was owing.

  • Korea to partner Fed Govt on rail transport

    Government of the Republic of Korea has commenced talks with the Federal Government to partner in transforming the nation’s rail transportation sector.

    The Minister of Transportation, Sen. Idris Umar, said government has initiated a feasibility study for the establishment of new railway corridor.

    Umar spoke yesterday while receiving delegates from Korea, led by the Korean Ambassador to Nigeria, Amb. Jong-hyan Choi in Abuja.

    Describing Public Private Partnership (PPP) as imperative to achieving the set goals, he said the ministry has launched a-25 year action plan to transform the sector.   Umar said: “The Ministry has commenced feasibility study for new railway corridors where we believe either with private sector or several countries of the world will be coming to partner with Nigeria.

    “One of these new corridors is the Lagos to Abuja high speed rail line. We are looking at where train can leave Lagos for Abuja between three hours and can compete with airlines. Also a line from Lagos through Sagamu to Benin , Awka, Asaba, Nnewi, Aba then to Obudu ranch.”

    The Minister who was represented by the Permanent Secretary of the ministry, Engr. Nebollisa Emordi identified inadequate funding as major challenge affecting the projects.

    He informed that the ministry is presently rehabilitating 3, 500 kilometers narrow gauge line.

    “The ministry has developed a 25 year plan which its first stage entails rehabilitation and building of standard gauge railway system. The final stage will be system consolidation after the rehabilitation and modernization,” he added.
    In his opinion, the Ambassador stated that the Nigeria is blessed with abundant potentials such that both countries can explore for national development.

    He said the objective of visiting the ministry is to seek partnership to develop the nation’s transport sector especially the rail line.

  • NAPE to Ondo: Exploit other solid minerals

    The Nigerian Association of Petroleum Explorationists (NAPE) has advised the Ondo State government to exploit other minerals in the state other than crude oil.
    President of NAPE Dr. Mayowa Afe when the association paid a courtesy call on the state Governor, Dr. Olusegun Mimiko at the government house Alagbaka Akure, said only three out of 11 minerals in the state are categorised as strategic, while the remaining don’t get the required attention.

    Afe said: “The Geological Survey of Nigeria has identified eleven solid minerals in the state. Only three which are bitumen, coal and limestone are categorized as on the Federal Government’s strategic minerals for development while others – kaolin, gemstone, gypsium, feldspar, granite, clay, glass-sand, and dimension stones, are classified as non strategic.

    “There is need to ensure these strategic minerals are evaluated and exploited to its full benefit for the state and the federation.
    “Ondo is also known to have the largest deposit of tar sand in the country and if the contents of the proposed Petroleum Industry Bill (PIB) is anything to go by, this huge resource will soon be managed by the Ministry of Petroleum Resources and who knows, the state could become a force in the area of bitumen production with the potential of making the state an investment haven. I therefore urge your Excellency to argue the transfer of this asset from solid minerals to petroleum ministry as it is done in other parts of the world.”

    Afe in a statement also explained what the association stands for and the need for the state to partner. “NAPE is a foremost professional organization in the oil and gas industry committed to promoting the teaching and practice of the geosciences in relation to the exploration and exploitation of petroleum resources. As explorationists, our ideas indeed find oil and gas.

    “The membership of the association includes students in tertiary institutions and individual practitioners, government institutions as well as operators in the oil and gas industry, mining industry and other energy sector. Established in 1975, NAPE is an affiliate of the American Association of Petroleum Association (AAPG) with membership spread across the globe.

    I am pleased to inform you that the current President of NAPE, Dr. Mayowa Afe is from Akure, Ondo State.
    “One of the goals of the association is to visit tertiary institutions as well as corporate and government institutions that employ geoscientists in different parts of the country to drum up support for our Annual International Conference and Exhibition(AICE) that comes up in November this year. Based on the involvements of the State in exploration and production activities and its vast oil and gas resources, a substantial part of which is yet to be exploited, the association is extending its hand of fellowship to the state for mutually beneficial relationship.”

    “It is important to let you know that as a state with an Exploration and Production company, i.e. Owena Oil and Gas which owns 45 percent in Ororo field and substantial interest in OML 241, in deepwater Dahomey basin, the State is an ally of the association and a potential corporate member of NAPE. Ondo state also has several tertiary institutions where the geosciences are taught and therefore captures the attention of the association as a fertile ground for attracting young geoscientists to NAPE.”
    NAPE also advised the state government to ensure well demarcated/defined and established coastal boundaries with others because of the issue of offshore dichotomy up to/beyond 200 metres water depth and also insist Federal Government retains the current fiscal agreement on offshore dichotomy.”

  • PHCN Molete relocates to Oluyole Industrial Estate (part 2)

    The executive and legislative arms of government should come together and harmonise their varying positions on the Petroleum Industry Bill (PIB) regardless of the number of versions in circulation.

    The advice was given by the former Senior Special Adviser to Dr. Goodluck Jonathan on Literacy programmes, Dr Kune Igoni, who criticised the politicisation of the matter.
    He said that the passage of the bill shouldn’t be a Herculean task if only the executive and legislative arms of government would come together and harmonise their varying positions on the bill.

    In an interview with The Nation in Lagos, Igoni said it was rather inconceivable that the country is still contemplating the passage of a bill five years after its creation at a time when other countries are churning out programmes to enhance new technology and discoveries such as the shale gas.

    Recalling how the bill had started generating controversies since birth, Igoni said: “It all started from the period of Dr. Rilwan Lukman’s revered oil and gas reform committee’s report of 2008, which led to the first Petroleum Industry Bill (PIB).

    The issues raised in that bill are fundamental as well as controversial in some cases, but the issue remains that, politics took the larger part of all the controversies. What we now see is that some interest groups are working hard to make sure the bill does not succeed, thereby making new investment in the petroleum sector difficult.

    “And based on the so called controversies, the Federal government has had to set up a federal inter-agency committee, which was headed by Dr. Timothy Okon to review the bill. The outcome of the report again, caused more controversies, rather than solving it. The Senate also set up its committee to review the document in 2011 and the House of Representative followed suit and submitted its version in 2011.However, it is unfortunate that we are still foot-dragging on the bill till this day because we want a perfect document which is not obtainable anywhere in the world.

    “But the truth of the matter is that both the executive and legislative arms of government are elected to represent the interest of the people. It is therefore not acceptable that both arms cannot come to agreement in passing the bill, even if we have one thousand versions of it. The first bill, as it were, seeks to replace all the existing petroleum industry acts that provides for the management of fiscal policies in the oil and gas sector.

    “When one critically examines the objectives of the bill, it covers very fundamental areas including deregulation, funding and restructuring of the NNPC, enhancement of exploration, production and exploitation, thereby setting out to eliminate funding bottlenecks and unnecessary bureaucracies, thereby encouraging investments in the sector.”

    He admitted that as varying and imperfect as the different versions of the document are, one interesting thing is that they all have clauses and provisions for protecting the immediate environments.

    “We must appreciate the fact that the various versions of the draft bill have clauses meant to protect the immediate environments. I mean the oil and gas producing areas. Even if the bill is in- adequate for now, clauses in the bill such as the setting up of the Petroleum Host Communities Fund (PHCF) wherein 10 percentage of the net profit of the oil and gas companies is set aside in the pool for the development of the host communities as well setting a deadline to end gas flaring are highly welcomed as they would help protect the health and safety of the environment.”

    He said the 223-page document is a proactive piece of legislation, which also seek to promote transparency and openness in the administration of policies in the Nigerian oil and gas industry and most importantly, deregulating and liberalising the downstream sector.

    He said the country cannot afford to continue to lose investments in the hydrocarbon industry by the non-passage of the bill, which is meant to engender reforms for the country to take full advantages of its resources and potentials.

    Doing so according to him, would mean hampering commercial and employment opportunities in the country as investments would be driven away to other investment friendly countries such as Ghana, Angola, Libya and even South Sudan.

    He, therefore, called on the executive and legislative arms to articulate thoughts and make necessary amendments on the grey areas of the bill with the intention of passing the bill on time for the industry to start witnessing the free flow of investments.

  • Samsung to float academy in Ekiti

     Electronics Giants, Samsung is set to establishing an Engineering Academy in Ado Ekiti, the state capital as part of its partnership arrangement with the state government.

    This according to a statement, was part of the Memorandum of Understanding (MoU) signed by the state government and the management of Samsung in Seoul, South Korea yesterday.

    Ekiti State Governor, Dr Kayode Fayemi signed for the state government, while Mr. Seongwoo Nam, Executive Vice President (IT Solutions Business), signed on behalf of Samsung at a brief ceremony at the company’s head office in Seoul.
    Other areas of collaboration between Ekiti State and Samsung as agreed in the MoU, include e-governance, healthcare, technology park,  smart city and safe city initiatives of the Ekiti State Government.

    Governor Fayemi said the partnership with Samsung will boost the state government’s ICT plans, especially its e-school, e-payment and e-government projects.

    Samsung is one of the major partners in the state government’s Computer-per – child  initiatives (e-School project), which is designed to put a laptop computer on the desk of every student in the state’s public secondary school by 2014. Already, 33,000 laptop computers of the planned 100,000 are being distributed across the state in the first phase of the project.

  • PHCN Molete relocates to Oluyole Industrial Estate

    The Power Holding Company of Nigeria Plc, Molete Business Unit under Ibadan Electricity Distribution Company, has relocated from its former office at Orita Challenge, Ibadan to an office complex along 7up Road, Oluyole Industrial Estate, Ibadan.

    The Senior Manager, Public Affairs, Molete Business Unit, Mr. Tokunbo Peters said the office complex is part of the multi million naira edifice built by the management of Ibadan Electricity Distribution Company as part of its effort to provide a conducive business environment for its customers and employees.

    The new office complex according to the statement, has a modern cash office for the payment of electricity bills and a standard and fully equipped customer care centre where customers can lodge complaints bothering on billing, metering and power supply.

    While addressing the staff of the Business Unit, the Business Manager, Mr. James Osikoya, an engineer, said Molete Business Unit was being repositioned to serve its customers better. He enjoined the employees to brace up to the challenges of providing total quality service to the company’s customers.

    He implored the company’s customers at Oluyole, Elebu, Challenge, Odo-Ona and environs to visit the new office complex for the transaction of business and experience the customer friendly atmosphere.

  • Kwara’s N70b rice project starts in December

     Kwara State’s N70 billion rice cultivation and processing project is to be unveiled in December, its foreign partner has said.

    The partner, Valsolar S.L. 2006 of Spain, said it has secured funds for the project that has an initial life span of 4 years.
    Reacting to the news, Kwara State Governor, Alhaji Abdulfatah Ahmed welcomed the development as the project is key to his administration’s efforts to provide food for the people, jobs for the youths and inputs for agro-allied industries, while at the same time growing the state’s economy through agriculture.

    “ I am particularly pleased that this project will be generating 12,000 jobs across the value chain as well as substantially growing the state’s economy. Our farmers will also benefit from the technology transfer component of the project. No doubt, this huge project is one of several envisaged under the Kwara State Agricultural Modernization Plan (KAMP) the implementation of which is soon to commence”, he said.

    The Senior Special Assistant to the Governor on Investment, Policy and Strategy,  Abayomi Ogunsola, said under the terms of the joint venture Memorandum of Agreement  the company is to invest N70billion in the project over the next four years, while the state will provide 20,000 hectares of land as well as infrastructural support for the project which will operate under a registered joint venture company, Valsolar-Kwara Limited.  According to Ogunsola, each annual module of the project will  see the company cultivate 5000 hectares of land and produce 40000 tons of rice for local and international consumption.

    Following satellite and laboratory soil analyses earlier in the year, Valsolar-Kwara has decided to site the projects in communities along the River Niger in Kwara North, namely Tsonga, Pategi, Bacita and Lafiagi, he said.

  • Oando’s rig marks three years of uninterrupted operation

    Oando Energy Services Limited (OESL), a subsidiary of Oando Plc, said its swamp drilling rig has recorded a safety milestone of three years of continuous operations without a Lost Time Injury (LTI) on its flagship rig, OES Integrity, last month.

    The achievement, the Head, Corporate Communications, Meka Olowola said, reflects Oando’ s commitment to health, safety, and environment (HSE) values, and affirms the company’s determination to remain a leading service provider in Nigeria’s oil and gas industry. LTI is an industry key performance indicator (KPI), which measures adherence to safety and environmental requirements by evaluating the number of injury-bearing incidents capable of preventing a worker from performing or continuing with a task or resulting in downtime in operations.

    OES Integrity rig was contracted to a leading international oil company in December 2009 and has successfully drilled, completed and worked over more than 14 wells, without any show-stopping incident. With a 3,000 hp modern swamp barge equipped with 15,000 psi Blowout Preventers (BOP), OES Integrity is the only rig in Nigeria capable of drilling in high pressure/high temperature (HPHT) wells to depths of 30,000 feet.

    Commenting, Mr Badejo Bandele, Chief Executive Officer, OESL said: “We are pleased with this feat achieved on the strength of our zero tolerance policy for stopping incidents in all our operations. The OES Integrity team has demonstrated their competence in world-class drilling operations and sound HSE values. We are committed to delivering consistent value to our clients’ drilling operations to the highest safety standards.”

    Chief Environment, Health, Safety Security and Quality (EHSSQ) Officer, Oando PLC Mr Chijoke Akwukwuma, said: “The health and safety of our employees are of the utmost importance to us. We strive to always be a bastion in oil and gas operations in terms of safety and environmental-friendliness, and we ensure our employees are always well-versed in the Oando culture of uncompromised safety and environment protection. We are committed to deploying best practice that meets global standards across our operations in conformity with world-class aspirations.”

    Oando has embraced vibrant policies and procedures covering product quality, safety, environment, health, security and emergency readiness to ensure that all its operations meet international safety requirements, guided by its “14 life-saving rules.” The company according to the statement, has a robust and strong environment, health and safety framework for employees that include training, regulatory certifications and a “stop work” policy which empowers employees to halt an operation on the account of unsafe work conditions. In addition, it hosts an annual safety week to deepen awareness and strengthen an incidence-free work life culture.

    OESL have three major offerings, which include drilling and completion fluids services, drill bits and engineering services, and drilling rigs.
    The company has five swamp rigs – OES Teamwork, OES Respect, OES Integrity, OES Passion and OES Professionalism – making it the largest swamp rigs fleet operator in Nigeria.