The Nation Newspaper

Tag: gas sector

  • Fed Govt won’t accept job loss in oil, gas sector, says Ngige

    Fed Govt won’t accept job loss in oil, gas sector, says Ngige

    Minister of Labour and Employment Senator Chris Ngige has emphasised that the Federal Government will not accept any job loss in the oil and gas sector.

    He assured unions in the sector that the government would forestall any threat to industrial harmony.

    Ngige spoke at a meeting with members of the National Union of Petroleum and Natural Gas Workers (NUNPENG), Petroleum & National Gas Senior Staff Association of Nigeria (PENGASSAN) and contractors in oil and gas in his office.

    He said if new jobs could not be created in the sector or other sectors, efforts must be made to keep the present jobs.

    He said: “We all know that the backbone of the Nigerian economy for now is still the oil and gas. As the Minister of Labour and Employment, I am committed to forestalling any issue that could bring industrial unrest in the sector or threaten job security in the country.

    “I wish to put on record that the Buhari administration has zero-tolerance for any form of job loss. If the oil and gas sector or any other sector for that matter cannot create new jobs, they must go the extra-mile to retain the existing ones. Any job loss has multiple adverse effects on the population.

    “I have before me petitions, which border on industrial and employment relations – retrenchment, casualisation, redundancy as well as unfair treatment of Nigerians in the employ of the oil majors.

    “I have, therefore, summoned this meeting for us to properly ventilate the issues and make a way for a speedy resolution, after which we shall hold stakeholders’ summit.”

    On the vexed issue of expatriate quota, the minister said the ministry was already discussing with the Ministry of Interior to check the abuse of the nation’s immigration/labour laws and promised that the displacement of qualified Nigerians by foreigners would soon become a thing of the past.

    Minister of State, Labour and Employment James Ocholi (SAN) harped on the readiness of the ministry to sustain industrial peace and harmony, stressing that the economic realities on the ground have made any job cut very unpalatable in view of its negative consequences on Nigerians.

    NUPENG President Comrade Igwe Achese said the drop in the international price of oil was not a tenable reason for the continued enslavement of Nigerian workers through contract staffing and casualisation.

    He argued that nowhere in the world are workers subjected to harsh and unfriendly labour environment as done by the oil majors in Nigeria.

    PENGASSAN National President Comrade Francis Johnson called for the urgent passage of the Petroleum Industrial Bill (PIB) as a roadmap to the maintenance of peace and harmony in the oil and gas sector.

  • CBN: Oil, gas sector owes 23.8% of N13.5tr bank loans

    CBN: Oil, gas sector owes 23.8% of N13.5tr bank loans

    Oil and gas owes 23.8 per cent of the N13.5 trillion loans given by banks to key sectors of the economy, the Central Bank of Nigeria (CBN) has said.

    The statistics, contained in the Financial Stability Report released by the CBN said 50 per cent of the oil and gas loans were on default, noting that after a top-down (TD) balance sheet stress tests on the 22 licensed banks (DMBs), the industry is still resilient.

    Its Director, Financial Policy and Regulation Department, Kelvin Amugo, said the report, which is for last June, indicated that although the proportion of credit to the sector declined by 0.6 percentage points against December last year position, credit to the sector grew by 26.3 per cent in absolute terms, similar to the rate of the total credit growth.

    He said the industry Capital Adequacy Ratio (CAR) remained above the prudential hurdle rate at 13.55 per cent but was 0.52 percentage points lower than it was in December under the same scenario.

    He said the stress tests assessed the resilience of banks to a wide range of risk factors, including credit, interest rate, foreign exchange rate and liquidity risks.

    The stress tests quantified the impacts that shocks on these risk factors, based on historical antecedents and expert judgments, could have on the capital positions of the banks. Resilience of the banking system to the shocks was assessed against defined prudential hurdle rates.

    The TD stress tests are usually applied on a bank-by-bank basis and on an aggregate basis to determine the impact of specific stress scenarios on the banks.

    He said vulnerability to credit concentration in the oil and gas sector manifested under the shock scenario of a 100 per cent credit default. Under this shock scenario, industry CAR declined to negative 0.45 per cent, reflecting 3.68 percentage point decrease compared to the same situation in December last year. This deterioration in the industry resilience was driven by increased vulnerability of the large and medium banks to credit concentration in the oil and gas sector.

    Furthermore, banks were classified into three broad groups for systemic and peer assessment. Banks in the “large” category had assets greater than or equal to N1 trillion. The “medium” category comprised banks with assets less than N1 trillion but more than N500 billion while the “small” category comprised  banks with assets less than N500 billion.

    Furthermore, the test showed that capital position of ‘three small banks’ have fallen below regulatory threshold. The CARs of the affected banks were below five per cent regulatory position. The three banks are not among the domestic systemically important banks (D-SIBs).

    CBN Deputy Governor, Financial System Stability, O. J. Nnanna, said the goal of financial system regulators remains the enhancement of the stability of the financial system and its resilience to withstand unexpected adverse shocks while contributing to the growth of the real economy.

    “A stable financial system should facilitate economic growth and development necessary for improved standard of living. This edition of the Financial Stability Report has highlighted the need for effective coordination among fiscal, monetary and regulatory authorities, which would help in the achievement of policy goals and targets while ensuring sustainable economic growth,” he said.

     

  • FAAC calls for review of laws, price regime in gas sector

    FAAC calls for review of laws, price regime in gas sector

    The Federal Account Allocation Committee (FAAC) has called for the speedy review of laws, fiscal regime, licenses and price regime of petroleum products in the country.

    The committee in a communiqué at the end of its National Seminar held in Benin said that a quick passage of the Petroleum Industry Bill (PIB) would fast track the holistic implementation of the Gas Master Plan.

    It also asked government to strive to create a balance between export of gas and the usage in the domestic market by encouraging local gas consumption as a stimulus for development of our economy.

    It also advised government to expedite the power transmission project to enable the power plants evacuate the power so that stranded gas could be utilized.

    Government, it stressed, should deliver the required infrastructure to link offshore gas to existing/ planned facility while synergies between operators need to be driven by the regulators to deliver stranded gas.

     

  • Oil workers urge Buhari on gas sector development

    oil workers acting under the aegis of Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) have urged the Federal Government to make gas its major source of earnings.

    In a statement signed by Comrades Francis Johnson and Bayo  Olowoshile,( President and General Secretary respectively), the group, said it is high time the country diversified its economy, by giving more attention to gas exploration and exportation for growth.

    It said Nigeria’s proven gas reserves estimated at 5.2 trillion cubit metres (tcm)/183 trillion cubic feet(tcf) is huge and capable of bringing huge revenue to the Federal Government if well harnessed.

    It said the annual gas flared estimated at 31.5 billion cubit metres bcm/ 1.1 trillion cubit feet(tcf) valued at $2.5billion is also a huge economic waste, adding that the waste can be prevented if the right policies are in place.

    “With 172million estimated population and our vast growing, but grossly under exploited gas markets, the global campaign for the promotion of more environment friendly energy, emphasis on the activities of gas will preserve our forest, curtail diversification, and generate more revenues for the country. Based on this, the government of President Muhammad Buhari will be recording a far more success in the area of improving fiscal resources for the growth of the economy,’’ it said.

    It explained that the depleted fortune of Nigeria’s foreign reserves and failure of the Federal Government to meet budgetary expectations in recent time, was as a result of the fact that the country depends majorly on oil.

    According to the body, there is the need for a paradigm shift from oil to gas to grow the economy well, stressing that billions of dollars being  by Nigeria is not good enough.

  • ‘Non-passage of PIB delaying investments in oil, gas sector’

    There has not been any major investment in the oil and gas sector in the last four years, due to the non-passage of the Petroleum Industry Bill (PIB) by the National Assembly, the Managing Director and Chief Executive Officer, Frontier Oil Limited, Dada Thomas, has said.

    He said Nigerians should hold the lawmakers responsible for the non-passage of the PIB.

    Thomas said: “I don’t believe that the bill would be passed into law before this National Assembly goes. I think the PIB will have to be addressed by the incoming National Assembly.’’

    He said as long as there is uncertainty surrounding the bill’s passage, the exploration and production firms might not want to invest.

    “The damage is that there has not been any exploration in Nigeria to find new oil or gas reserves. We need to make sure that the cloud of uncertainty, which is the lack of passage of the PIB is removed so that people know, the rule of the game. With the uncertainty removed, the regulators will be able to know what their roles and responsibilities are, and every stakeholder, including the communities, will know the rules of the game in the operation of the industry,” he said.

    Thomas urged political leaders   to put politics aside and think of the economic well-being of the people and the nation. He said: “They should put politics aside and do what is good for Nigerians and investors so that we have a bill that would address all the concerns and needs of the various stakeholders including the investors. We need to show commitment to the growth of the industry.”

    Also, the Managing Director, Treasure Energy Resources Limited, Rivers State owned Oil and Gas Company, Eddie Wikina, in a telephone interview, agreed that the government is prolonging investments in the country due to the non-passage of the bill.

    He also listed corruption and insecurity as other major factors affecting investments in the sector.

    According to him, if the bill is passed into law, it will help to check corruption in the Nigerian National Petroleum Corporation (NNPC). He said that the government has  misapplied the funds appropriated to the corporation by put them in wrong priority areas.

    Since the NNPC is not autonomous of the Federal Government, it acts on instructions.

    Wikina claimed the government was aware of this and continued to play down the passage of the bill.

    “Such a bill as the PIB has been shrouded in so much secrecy that certain unscrupulous elements begin to profit from the quagmire. Such a bill should be openly debated in the Senate and passed immediately in the interest of the nation,” he stated, urging the lawmakers to pass the bill before they go in May.

  • N/Assembly accused of delaying investment in oil, gas sector

    There has not been any major investment in the Nigerian oil and gas sector at least in the last four years and there has not been additional increase in the nation’s oil and gas reserves in the last ten years due to non- passage of the Petroleum Industry Bill (PIB), which has been before the National Assembly for many years, the Managing Director and Chief Executive Officer, Frontier Oil Limited, Dada Thomas has said.

    Thomas said that Nigerians should hold the National Assembly accountable for lack of passage of the Petroleum Industry Bill. He noted that the bill has been in the making for more than four years until now we have only May 29, 2015 for this current regime to be over. “I don’t believe that the bill would be passed into law before then, I think the PIB will have to be addressed by the incoming National Assembly,” he stated adding that the country has lost so much for the non-passage of the bill.

    The Federal Government has over the years set a target to achieve oil reserves of 40 billion barrels 4 million barrels per day production but how this vision could be realised remains doubtful as the government lacks the political will to pass the important bill into law, industry stakeholders said.

    Speaking with The Nation at an oil and gas event in Lagos, Thomas stated that as long as there is a cloud of uncertainty as to whether or not to pass the bill, the exploration and production companies may not want to invest as they ought.

    “The damage is that there has not been any exploration in Nigeria to find new oil or gas reserves. We need to make sure that the cloud of uncertainty which is the lack of passage of the PIB is removed so that people know the rule of the game. With the uncertainty removed, the regulators will be able to know what their roles and responsibilities are, and every stakeholder including the communities will know the rules of the game in the operation of the industry,” he said.

    Thomas urged those at the corridors of power to put politics aside and think of the economic wellbeing of the people and the nation first and foremost. He said: “They should put politics aside and do what is good for Nigerians and investors so that we have a bill that would address all the concerns and needs of the various stakeholders including the investors. We need to show commitment to the growth of the industry.”

    The Managing Director, Treasure Energy Resources Limited, Rivers State owned Oil and Gas Company, Eddie Wikina, in a telephone interview also agreed that the government is prolonging investments in the country due to non-passage of the bill, which he described as prolonging the evil day.

    He also mentioned corruption and insecurity as other major factors that push investment out of the country. According to him, if the bill is passed into law it would help to check the level of corruption in the Nigerian National Petroleum Corporation (NNPC). He said that the government has severally mismanaged the funds appropriated to the corporation by having wrong priorities.

    Since the NNPC is not autonomous of the federal government, it acts on instructions. Wikina said that the government is aware of this and continues to play down on the passage of the bill so that corruption would continue to thrive in the system

    “Such a bill as the PIB has been shrouded in so much secrecy that certain unscrupulous elements begin to profit from the quagmire. Such a bill should be openly debated in the Senate and passed immediately in the interest of the nation,” he stated urging the government to pass the bill within the remaining three months.

  • ‘Infrastructure deficit inhibits growth in gas sector’

    Inadequate infrastructural facilities such as pipelines, pressure station, and Central Processing Unit (CPUs), is hindering the growth of the gas sector, the President, Liquefied Petroleum Gas Association of Nigeria (LPGAN), Mr. Dayo Adesina, has said.

    Other  challenges, he said, include lack of gas stripping plants and effective regulatory mechanisms, among others.

    Adesina said the problems are ineffective utilisation of gas, which makes it impossible for critical sectors of the economy to access the product for growth. He said the country is finding it difficult to take the gas to where it is needed, processed and used to achieve the desired results.  He lamented that Nigeria is flaring gas without considering its socio-economic implications.

    He said: “The country is flaring millions of metric tonnes of gas daily, because there is no infrastructure in place to capture it for productive usage.  And to take the gas to where it is needed, the government has not done much  in that regard. Facilities such as Central Processing Units (CPUs), gas stripping plants, pressure stations and others are lacking in the country. What is considered a waste in the gas sector can be turned around and be useful in other sectors, if there are adequate infrastructural facilities in place.”

    According to him, the gas  being flared can power the whole of Africa, if the right policies are in place.

    Also, the Director-General, Bureau of Public Enterprise (BPE), Benjamin Dikki in an interview with The Nation, said gas shortage has affected the operation of the power sector. Dikki said infrastructural deficit in the gas industry is having spillover effects in the power sector. “Instead of wasting gas by flaring it, we can channel it to the power sector. Due to gas shortage, the power sector cannot generate enough electricity. We are producing less than 6,000MW of electricity. We are hovering between 4,000MW to 5,000MW of electricity; when we are supposed to generate 10,000MW.We have been targetting 10,000MW for some time now and we are yet to achieve it.

    The Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, and her counterpart in the Power Ministry, Prof. Chinedu Nebo, the Group Managing Director, Nigerian National Petroleum Corporation (NNPC), and other relevant stakeholders had in Abuja, discussed how to make gas available to the power sector.

  • ‘Inject $600m capital into gas sector’

    ‘Inject $600m capital into gas sector’

    About $600million new capital investment is required to grow the Nigerian liquefied natural gas value chain to an enviable height, the Managing Director, Rivers Bank Capital, Mr Akinyemi Osinubi has said.

    Speaking to The Nation, Osinubi said the industry’s growth has been hampered by poor funding, occasioned by the refusal of local and international financial institutions to provide enough facility to the gas operators.

    He said: ‘’Liquefied Natural Gas value chain needs between $525million and $600million to make the nation’s gas sector compete with its counterparts in the developed economies.

    Unfortunately, accessing the required facility for the production, processing and delivery of gas to the consumers has been a task. The banks are not ready to provide credits to gas operators that are not high networth,’’

    According to him, banks are not going to provide loans to operators in the gas industry with low credit rating. He said banks would impose 25 per cent interest rate or more on companies that have such problems.

    ‘’Lack of project financing mechanism, and low credibility ratings of gas’ firms are some of the challenges in the sector. When banks know that a company that is planning to get loans from them have high default rate, they withdraw their services immediately, he said.

    The Managing Director, Bgl Securities Limited,Mr Sunday Adebola said though the management of the Nigerian Stock Exchange (NSE) is trying to bring in oil and gas operators to the market to raise capital for growth, there are impediments.

    He said equity financing represent a viable option for companies intending to raise capital, advising operators in the gas value chain to do the necessary things before coming to the market.

    According to him, foreign companies would like to look at the equity profiles of the local firms before striking a deal with them. He said the market is deep to accommodate as many companies as possible, advising gas operators to come for listing for growth.

    He said oil and gas sector will increase market capitalisation by over N1 trillion, once the operators show readiness to tap the opportunities in the market well.