Sylva lays foundation stone of DPR’s new headquarters in Abuja

Chief Timipre Sylva, Minister of State for Petroleum Resources on Thursday performed the ground breaking and foundation laying ceremony of the the Department of Petroleum Resources (DPR) permanent headquarters building in Abuja.

Speaking at the event which held physically and virtually,  Sylva said the 

building located at Plot 32, Cadastral Zone, Central Business District, Abuja was tagged "The Barrel”.

He said the project was another milestone achievement by President Muhammadu Buhari  in the area of infrastructural development and its commitment to reposition the oil and gas industry for effective service delivery. 

Sylva said : "The DPR, as a critical agency of government, regulates and monitor activities of the Nigerian oil and gas industry which drives all other sectors of the economy. 

"DPR exercises its mandate by providing opportunities and enabling businesses using service instruments – Licenses, Permits and Approvals. 

"This edifice – the barrel, when completed, will provide a conducive environment to support oil and gas business across the value chain for operators, service providers, investors, relevant government agencies, international collaborators, and other stakeholders. "

According to him, with its fascinating design, the building  reflects a state-of-the-art, innovative and timeless architectural masterpiece, that honors the history of the Abuja Central Business District landscape.  

”This product of ingenious craftsmanship will provide a comfortable, safe and efficient work ambience, for a 21st century regulatory agency, that is fully equipped to enable business and drive foreign direct investments in Nigeria," he added.

Also, Mr Sarki Auwalu, Director, DPR, commended the president for approving the construction of the new headquarters and Sylva for his commitment to the administration's vision for the oil and gas industry.

Auwalu said : "As a department, we will continue to justify the confidence reposed in us by government. 

"Rest assured that this building will support DPR’s commitment to enabling businesses and creating opportunities for the industry to thrive, using our robust regulatory framework and service instrument.” (NAN)

Buhari inaugurates National Oil and Gas Excellence Centre in Lagos

President Muhammadu Buhari on Thursday inaugurated the National Oil and Gas Excellence Centre (NOGEC) Lagos, aimed at strengthening Nigeria’s position as a regional leader in the oil and gas industry.

Buhari said the establishment of NOGEC, situated at the Lagos Annex of the Department of Petroleum Resources (DPR), would enhance safety, value and cost efficiency in Nigeria’s petroleum sector.

He said: “NOGEC aligns with the administration’s commitment to fostering stability, growth and sustainability of the Nigerian oil and gas industry for economic development.

“You will recall that at the inception of this administration, we set a clear road map for the oil and gas sector in order to increase revenue.”

The President said the centre would boost the nation’s Gross Domestic Product (GDP), generate employment and poverty reduction.

“It is therefore another milestone in the development of the oil and gas sector and its utilisation for the greater good of the country.

“The establishment of NOGEC is an indication that the Nigerian oil and gas industry has come of age despite the odds,” he added.

He said the Federal Government had made some significant achievements in the oil and gas industry in spite of the impact of the COVID-19 pandemic which affected global economies, including Nigeria’s, in 2020.

The achievements, Buhari said, included the signing of the Final Investment Decision on the Nigerian Liquified Natural Gas Company Train 7, construction of the Ajaokuta-Kaduna-Kano gas pipeline project and inauguration of the 5,000BPD Waltersmith Refinery in Imo State.

“While acknowledging our achievements, we must not relent but redouble our efforts to combat the challenges of global energy dynamics.

”I, therefore, urge you all to rededicate yourself to nation building and take advantage of the establishment of the centre to address the challenges confronting the sector.

”On our part, we will spare no effort to ensure that Nigeria benefits hugely from its natural resources.

“We will continue to leverage on oil and gas development and pursue our economic diversification drive,” the President said.

Also, Chief Timipre Sylva, Minister of State for Petroleum Resources, said the ministry under Buhari’s leadership had continued to implement sustainable reforms and policy directives in the Nigerian oil and gas industry .

Sylva said: “This is targeted at driving optimum value from our petroleum resources for Nigerians.

“NOGEC which is being inaugurated today is a testament to the successes achieved in this regard.

”NOGEC has been carefully designed to support the achievement of the ministerial priorities significant amongst which are cost reduction, increase in production, and value maximisation in the industry.

“The centre, under the direct supervision of the DPR, will leverage the existing capacity of the National Data Repository as the principal data warehouse of the industry to drive initiatives that will enhance safety.”

The minister said the flagship centres were Search, Rescue and Surveillance Command and Control Centre and National Improved Oil Recovery Centre.

Others, according to him, are Oil and Gas Dispute Resolution Centre, Oil and Gas Competence Development Centre and Integrated Data Mining and Analytics Centre.

He said when fully operational, the centre would contribute to reducing the cost of doing business in the oil and gas industry, enhance safety of the work force and provide data that were critical for prospective investors.

Earlier, in his address of welcome, Mr Sarki Auwalu, Director of DPR, said NOGEC encompasses industry-focussed programmes that would drive strategic mediation in operations, skills and competence development.

Auwalu said it also included the use of Big Data, Internet of Things and Artificial Intelligence for decision making, deployment of proven technology for secondary and tertiary oil recovery as well as coordinated response for emergency.

He said : “Today, we have concluded the framework and implementation modalities for successful take-off of these Programmes within NOGEC.

“We have no doubt that the industry now has the resource and platform to interact, cooperate and collaborate on salient industry issues that remain impediments to cost reduction, safe operations and optimum value optimisation.”

Auwalu also lauded the President for his visionary  leadership and stewardship to drive Nigeria’s energy security and economic sustainability agenda and Sylva for his commitment to the growth of the industry. (NAN)

A Review of Nigeria's Oil and Gas Industry in 2020By Solomon Asowata, News Agency of Nigeria (NAN)

A Review of Nigeria's Oil and Gas Industry in 2020

By Solomon Asowata, News Agency of Nigeria (NAN)

The year 2020 can be described as one of the most difficult years for the oil and gas industry globally in the last few decades.

The year witnessed the Coronavirus pandemic which necessitated countries and states to lock down their borders thereby preventing movement of persons, goods and services for months unless under special circumstances.

This restriction of movement affected many sectors of the economy but one of the worst hit was the oil and gas industry which fuels mobility of mankind and businesses across the globe.

So, with a sharp drop in air and land movement, the demand for Jet A1 (Aviation fuel) , Diesel and Premium Motor Spirit (PMS) also known as petrol declined drastically. 

Also, during the period, there was an oil price war between Russia and Saudi Arabia which further led to a crash in the price of crude oil at the international market.

A combination of both factors affected the revenue of countries like Nigeria which is largely dependent on crude oil to sustain its economy thus it was not a surprised when the country went into recession.

However, in spite of these challenges, the industry recorded some positive achievements that could be consolidated on in 2021 to not only boost revenue accruing from the sector but also help to diversify its economy to reduce the dependency on oil.

Below is a review of some major issues and events which occurred in the sector in the outgoing year.

Crash in Crude Oil prices

The crash in crude oil prices caused by COVID-19 pandemic and price war between big oil producers was one of the major challenges faced by the industry in 2020.

Prices at the international market according to available data have hovered from $40 to $50 per litre for most part of the year and was at a negative at the height of the pandemic.

Minister of State for Petroleum Resources, Chief Timipre Syla says with the current second wave of the pandemic, the situation is not expected to change in the coming months.

This had compelled the Nigerian government to adjust its 2020 budget while also borrowing to fund some parts of the 2021 budget.

Removal of Petrol Subsidy

In April, Mr Mele Kyari, Group Managing Director, Nigerian National Petroleum Corporation (NNPC) announced that the federal government will no longer be subsidising petrol.

Although the move was opposed by Organised Labour, the government stuck to the decision which it says can save the country one trillion naira annually to be deployed to other critical sectors of the economy.

Mr Tunji Oyebanji, Chairman, Major Oil Marketers Association of Nigeria (MOMAN) and Mr Chinedu Okoronkwo, President, Independent Petroleum Marketers Association of Nigeria (IPMAN) believe the removal of subsidy is in the interest of the country.

They say it will open up the sector for Foreign Direct Investment which will be beneficial to Nigerians in the long term.

However, the situation has led to an unstable fuel price regime with prices varying every other month after the announcement. The pump price of PMS which was N145 per litre in January 2020 is now between N164 to N172 across the country.

Transmission of PIB to the National Assembly 

The transmission of the Petroleum Industry Bill (PIB) to the National Assembly in September by the president according to industry stakeholders shows a willingness to reposition the oil and gas industry.

Kyari is confident that the bill which has passed second reading will be passed into law in 2021.

The PIB which has been mooted for almost two decades will provide a clear fiscal environment for the sector thereby attracting investors and increasing governments revenue.

Declaration of 2020 as the Year of Gas

The declaration of 2020 by the Federal Government as the Year of Gas was one of the key policies that shaped activities of the oil and gas sector in 2020.

With 203 Trillion Cubic Feet (tcf) of proven natural gas reserve, Nigeria according to Sylva can best be described as a gas country hence the need to deepen its domestic utilisation for economic growth and sustainability.

This necessitated the creation of the National Gas Expansion Programme (NGEP) in January, a committee that has been driving the implementation of the objective.

On Aug. 10, the "Go-Live" of the 

National Gas Transportation Network Code (NGTNC) was inaugurated by Sylva to unlock the potential of gas as a resource and revenue earner for Nigeria.

``It is believed that the implementation of the code will provide for investors in gas, the confidence to invest heavily in the sector and enable Nigeria consolidate on the multiplier effect of gas on the economy, says Mr Justice Derefaka, Technical Adviser, Gas, to the Minister.

Also on Dec. 1, President Muhammadu Buhari rolled out the deployment of autogas in the country with the inauguration of five gas-powered Mass Transit Buses handed over to the Nigeria Labour Congress (NLC).

According to the NGEP),  autogas  (Compressed Natural Gas) service stations are already in operations in the Federal Capital Territory Abuja , Kano and Kaduna States.

Others are Kogi, Kwara, Ogun, Ondo, Oyo, Lagos, Edo, Delta, Rivers and Bayelsa States and the government is targeting free conversion of one million vehicles from petrol to gas.

The committee says the scheme is a way of reducing Nigeria's dependence on oil while at the same time providing a cheaper and cleaner alternative source of energy for Nigerians.

Dr Mohammed Ibrahim, Chairman, NGEP says the autogas scheme and domestic utilisation of Liquefied Petroleum Gas will create about 12.5 million direct and indirect jobs.

In June, the president flagged off the construction of the Ajaokuta -Kaduna-Kano (AKK) pipeline project which will create job opportunities for Nigerians.

Mr Sarki Auwalu, Director, Department of Petroleum Resources (DPR) says  connecting the entire country with gas networks such as Escravos Gas Pipeline System (ELPS), Obiafu-Obrikon-Oben(OB3) and Ajaokuta -Kaduna-Kano (AKK) pipelines is part of the strategic agenda to bring gas to the people.

Similarly in June, Final Investment Decision (FID) was taken on the 

NLNG Train 7 project which is expected to ramp up NLNGs production capacity by 35 per cent from 22 million Tonnes Per Annum (MTPA) to around 30 MTPA. 

Mr Tony Attah Managing Director, NLNG, says, ``the   project   is anticipated to create about 10,000 new jobs during the construction stage, and on completion, help to further diversify the revenue portfolio of the federal government and increase its tax base.

Inauguration of Waltersmith Modular Refinery

On Nov. 24, Buhari inaugurated the 5,000BPD Waltersmith Modular Refinery at Ibigwe, in Imo State and also performed the groundbreaking for the companys 45,000BPD Refinery.

The refinery was constructed with the support of the Nigerian Content Development and Monitoring Board and will supply kerosene to the state and its environs.

Inauguration of Oredo  Integrated Gas Handling Facility

On Dec. 22, Buhari inaugurated the Integrated Gas Handling Facility and LPG Processing and Dispensing Plants built and operated by the Nigerian Petroleum Development Company, an Upstream Subsidiary of NNPC in Oredo, Edo State.

The president said : “The Oredo Integrated Gas Handling Facility will be delivering 240,000 metric tons of commercial grade Liquefied Petroleum Gas and Propane. It will also deliver about 205 million standard cubic feet per day of lean gas to the domestic market.

Marginal oil field bid round

In June, Nigeria opened bid round for 57 marginal oil fields in the country with over 600 companies applying for prequalification.

Mr Paul Osu,Head , Public Affairs, DPR says the objective of bid round is to deepen the participation of indigenous companies in the upstream segment of the industry and provide opportunities for technical and financial partnerships for investors.

Gas Explosions and Fire Incidents 

The year 2020 witnessed an increase in gas explosion and fire outbreaks caused by petroleum products leading to fatalities and destruction of property worth billions of naira.

On Jan. 19, a Nigerian National Petroleum Corporation (NNPC) pipeline at Ile Epo axis of Alimosho Local Government Area of Lagos State exploded leading to the death of five persons according to the National Emergency Management Agency (NEMA). 

Similarly, on March 15, NEMA confirmed the death 15 persons when an explosion occurred at Abule Ado, in Trade Fair axis of Lagos State.

No fewer than 60 students of Bethlehem Girls College located within the area also sustained injuries while over 50 buildings were destroyed.

Also on Sept. 25, 44 persons sustained various degree of injuries when a gas tanker exploded in Iju area of the state.

A few weeks later, on Oct. 8, that five persons lost their lives when a gas plant exploded at Baruwa area of Alimosho while eight persons were rescued alive with various degrees of injuries.

According to NEMA, 44 buildings were also destroyed in the inferno which started at about 5:40am when a a LPG tanker was in the process of discharging at the Best Roof Gas Plant Station located within the densely populated area.

Another inferno also occurred on Nov. 5 at the OVH Energy tank farm at Marine Beach, Ijora area of Lagos State. However no life was lost in the incident.

Reacting to the upsurge in fire incidents and gas explosions, Dr Kennie Obateru, Group General Manager, Group Public Affairs Division, NNPC says operators of gas plants and other petroleum products facilities in the country must ensure strict adherence to safety rules and regulations.

Also, Auwalu says the DPR will begin the enforcement of the Minimum Industry Safety Training for Downstream Operations (MISTDO) at petroleum facilities nationwide from January 2021.

``The growth of Nigerias downstream sector has resulted in increase of incidents leading to loss of lives, damage to property and environmental pollution. 

``Some of these incidents have come from fallen tankers, petrol station fires, gas explosion and vandalism. 

``Our records show that 70 per cent of accidents in the Nigerian oil and gas industry between 2013 and 2019 occurred in the downstream sector, he says.

2021 Projection for the industry

In their projections for the future, experts believe that the foundation laid in 2020 in spite of the enormous challenges will help the country actualise its vision for the oil and gas industry.

The experts say the autogas policy, increase in domestic utilisation of gas, full deregulation of PMS and coming on stream of the Dangote Refinery in Lagos and other modular refineries in Bayelsa, Rivers and Edo portends good omen for the country.

They also wants quick passage of the PIB to provide the legislative framework that will usher in a new era for Nigerias oil and gas industry and transform the country into a petroleum product refining hub. (NAN)

A Review of the Nigerian Power Sector in 2020 By Solomon Asowata, News Agency of Nigeria (NAN)

A Review of the Nigerian Power Sector in 2020 

By Solomon Asowata, News Agency of Nigeria (NAN)

The power sector is a critical aspect of the economy and getting it right will help transform Nigeria into an industrialised country hence successive governments have continued to make massive investments and implement several policies to actualise this objective.

The year 2020 marked seven years since the privatisation of the Nigeria Electricity Supply Industry but unfortunately, Nigerians are yet to feel the impact of the privatisation exercise.

Power generation still hovers around 5,000MW while transmission and distribution to end users is constantly being plagued by disruptions caused by obsolete equipment and vandalising of power infrastructure.

However, in spite of these challenges and the COVID-19 pandemic, the sector recorded some significant achievements which could serve as a launching pad to making electricity available for majority of Nigerians in the coming years.

Below is a review of some of the major issues which occurred in the sector in the outgoing year.

Siemens $2bn Power Deal 

In February, the Federal Government signed a deal with German electricity giant, Siemens Group to find a lasting solution to Nigerias energy crisis.

The deal which was signed on behalf of the country by the late Chief of Staff to the President, Mr Abba Kyari, before his unfortunate demise a few months later, will not only enhance the distribution network but will also increase generation capacity to the tune of 40,000MW.

The deal, signed under the Presidential Power Initiative (PPI) is expected to save the nation $1 billion annually with Siemens providing general technical training for employees of Electricity Distribution Companies, Transmission Company of Nigeria and the regulators.

The Federal Government also approved the sum of N8.64 billion as part of counterpart funding for the Phase 1 of the PPI which includes projects in transmission, distribution, metering, simulation and training.

Mr Saleh Mamman, Minister of Power, says, This significant, timely and high-level intervention between President Muhammadu Buhari and Chancellor Angela Merkel addresses critical infrastructure deficits in the value chain and helps reposition the power sector to become more attractive, viable and investable.

Similarly, Mr Adeola Samuel-Ilori, National Coordinator, All Electricity Consumers Protection Forum, says the deal can help Nigeria put its energy woes behind if properly implemented.

``The contract as signed, will enhance not only the distribution networks but also increase generation capacity to the tune of 40,000MW.

``Another beautiful thing about the contractual agreement is the elimination of middlemen and subcontractors which characterised past government efforts and led to humongous fraud.

``The deal with Siemens is government to government tripartite agreement.”

He insists the Buhari-led administration will largely be remembered for the success or failure of the deal just like its predecessors which spent millions on the power sector with nothing or little results.

Service Reflective Tariffs (SRT)

On Sept. 1, the Nigerian Electricity Regulatory Commission (NERC) approved Service Reflective Tariffs (SRT) for the 11 DisCos which led to increment in electricity tariffs for customers enjoying 12 hour supply and above daily.

The increment was opposed by labour groups and following talks between the government and the union leaders, its implementation was suspended on Sept. 28 for a period of three weeks.

However on Nov. 1, after an agreement was reached by the parties and slight adjustments made by the DisCos, the implementation of the revised SRT took effect.

Mr Dafe Akpeneye, Commissioner, Legal Licensing and Compliance, NERC, says the Multi Year Tariff Order (MYTO) 2020 was approved by NERC for the DisCos with effect from Sept. 1 after series of dialogue with all stakeholders in the industry.

He explains that the last MYTO was done in 2015 but became effective in 2016, adding that the new review was done to ensure that rates charged by DisCos are fair to customers.

Akpeneye says it is also to ensure that DisCos operate efficiently to recover the full cost of their activities, including a reasonable return on the capital invested in the business.

According to the commissioner, the rationale behind the SRT is to ensure that the issue of blank increment in tariffs for all customers is removed.

``The SRT is an innovation to remove unfairness in billing customers. The customers have been placed in Bands A, B, C, D and E depending on their hours of electricity supply.

"Only customers enjoying daily supply of 12 hours of electricity and above are affected by the increment and the DisCos must guarantee these hours of supply to the locations, he says.

National Mass Metering Programme 

With 59.6 per cent of electricity customers on estimated billing, the president on Oct. 30 flagged off the National Mass Metering Programme (NMMP) targeting 6 million households.

The key objectives of the NMMP are to: increase Nigerias metering rate, elimination of arbitrary estimated billing; and strengthening the local meter value chain by increasing local meter manufacturing, assembly and deployment capacity.

The programme also aims to support Nigerias economic recovery by creating jobs in the local meter value chain, reduction of collection losses and increasing financial flows to achieve 100 per cent market remittance obligations of the DisCos.

It will further improve network monitoring capability and availability of data for market administration and investment decision making.

 Mrs Folake Soetan, Acting Chief Executive Officer, Ikeja Electric Plc, says the Disco will meter 106,000 customers under the scheme in the first phase.

``For the first phase of the programme, which will run till the end of the year, Ikeja Electric is rolling out over 106,000 prepaid meters to customers across its six Business Units - Ikeja, Abule-Egba, Akowonjo, Oshodi, Ikorodu and Shomolu."

According to her, beneficiaries of this programme, which will cut across all locations in IE network, will not be required to pay upfront for the installation of meters. 

Similarly, Mr Adeoye Fadeyibi, Managing Director, Eko Electricity Distribution Company (EKEDC), says 100,000 customers under its network will get pre-paid meters during the first phase.

``The mass metering programme is a welcome development and a boost to the deepening of the Nigeria Electricity Supply Industry (NESI). 

"The programme couldnt have come at a better time than now given the impact of the COVID-19 pandemic on businesses and household income. 

``We are happy for the initiative and acknowledge governments renewed desire to improve the power supply and bridge the metering gap. 

``Electricity as we all know is an important essential needs of any society and we all have acknowledge the menace of the estimated billing both on the customers and even us as a business.

``It is my belief that with this mass metering initiative we can begin to say we are on a path to better days ahead. 

``In the next 18 to 24 months, over six million meters will be distributed across households in the country and for us at Eko, we will be rolling out over 100,000 meters in the next few weeks in the first phase of the programme, Fadeyibi says. 

Mr Uche Ike, Executive Director, The Energy Forum, believes that investments and policies made in 2020 will begin to yield the desired results in power supply and distribution in the near future.

"Hopefully, we will begin to see the benefits of the Siemens deal in the second or third quarter of 2021 but Nigeria must continue to pay its counterpart funding for the project," he says.

Also, Samuel-Ilori says NERC must live up to its statutory obligations to enable Nigerians enjoy stable power supply.

He says the regulatory agency should ensure they the DisCos are not shortchanging customers, especially with the way they went about the implementation of the SRT.(NAN)