Remove petrol subsidy, expert urges FG

By Solomon Asowata

An oil and gas expert, Mr James Gooder, has advised the Federal Government to remove subsidy on Premium Motor Spirit (PMS), petrol, in order to discourage smuggling of the product across Nigeria’s borders.

Gooder, Vice President, Crude and African Markets, Argus Media, United Kingdom, gave the advice while speaking at a virtual media workshop organised by the Major Oil Marketers Association of Nigeria (MOMAN) on Thursday.

The News Agency of Nigeria (NAN) reports that the Federal Executive Council had approved N3 trillion for subsidy on PMS in 2022.

He said the ongoing war between Russia and Ukraine had led to a surge in crude oil prices at the international market with Brent Crude currently trading at over 120 dollars per barrel.

According to him, while the landing cost of PMS, also known as petrol is currently above N400 per litre, the government is spending huge amounts subsidising the product to retail at N165 per litre.

He said: “Capped retail prices for PMS may be popular, or even expected,

among those that can afford to own a car.

“But current delivered prices for PMS are around three times as high as the pump price. Is this sustainable? Is financing this the best use of Nigerian taxpayers’ money?

“There is an unfortunate but clear incentive to smuggle subsidised

fuel out of Nigeria to neighbouring countries where retail prices are higher.”

Gooder said Nigeria and her West African neighbours lacked sufficient  regional refining capacity and imported majority of their PMS from Europe.

“In a global market, product flows are directed by price. Nigeria is competing with other destinations for products.

“But even if Nigeria had sufficient refining capacity with the coming on stream of the 650,000BPD Dangote Refinery and others, it  would still be in a competitive market and exposed to import parity prices,” he said.

Gooder said the government should engage the media and the citizens on the need to allow market forces to determine the price of petrol in the country.

He said in the longer term, government could improve public transport and attract investment for infrastructure – whether refining or storage and distribution.

Gooder, however, noted that the crude oil market was volatile and unpredictable, stressing that the measures were only aimed at mitigating its impact on the ordinary citizens.

He explained that the increase in prices of diesel and aviation fuel was higher than the increase in petrol prices globally because the supply of diesel and aviation fuel (middle distillates) was mainly from Russian refineries, which were currently under sanctions.

Gooder said petrol was from Northwestern Europe refineries, which was readily available.

He advised the Nigerian government to ensure that the right pricing benchmark was used to import PMS from Europe.

“In Europe, the Argus Eurobob daily price is the primary PMS benchmark

– ‘the Brent of gasoline.’

“80-90 per cent of Nigeria’s gasoline imports are priced on Argus Eurobob along the supply chain.

“Argus publishes prices in all other source regions for comparison, as

well as delivered to Nigeria.

“The price used for delivery into Nigeria is still often 95 RON – leading to price distortions.

“This may benefit international traders, but it never benefits importers, consumers or taxpayers because it is inflated,” said Gooder.

Mr Clement Isong, Executive Secretary, MOMAN, said the distribution margin for marketers was very small despite their huge investment in the oil and gas industry.

He said: “The backbone of distribution is based on diesel, from transport (vessels and trucks) to energy costs (depots and stations). This affects not just petrol distribution but also the distribution of aviation fuel.

“Total distribution margin under the current PMS pricing template accounts for 11.5 per cent of the PMS pump price despite significant increase in costs.

“Operators are struggling along the supply chain to get petrol out of the nuzzles into the cars, which is difficult to sustain.” (NAN) (www.nannews.ng)

NBC promotes sustainable manufacturing, powers plants by solar

(L-R) Mr Matthieu Seguin, Managing Director, Nigerian Bottling Company (NBC)Ltd., Mrs Oluwatoyin Agbenle, Controller of Environment in Lagos State, Federal Ministry of Environment, Mrs Omotunde Adeola, Deputy Director, Pollution Control and Environment Health Department and Mr Ike Ekeleme, Plant Manager, NBC Ikeja Plant, during a tour of the facility on Wednesday.

By Solomon Asowata

 The Nigerian Bottling Company (NBC) Ltd. says all its manufacturing plants will be powered in part by solar energy by December as its contribution to sustainable manufacturing.

Mr Matthieu Seguin, Managing Director, NBC, said this during a media tour of the company’s plant at Agidingbi, Ikeja on Wednesday.

Seguin said: “NBC is part of the Coca-Cola Hellenic Bottling Company group (CCHBC), which has an uncompromising commitment to minimise our environmental footprint whilst enriching the communities where we operate

“In line with this, CCHBC has instigated a set of sustainability commitments ahead of 2025 that address six major areas.

“They include the reduction of emissions, water use and stewardship, working towards a world without waste, ingredients sourcing, nutrition, people and communities.

“Advancing towards these commitments, NBC has mainstreamed sustainability into every aspect of our operations.”

He said NBC was committed to achieving net zero carbon emissions by 2040 and had so far reduced 3,600 tons from its annual carbon footprint.

Seguin said the NBC plants in Challawa, Maiduguri, Abuja and Asijere were being powered in part by solar energy and were delivering up to 3,640-Kilowatt peak (KWp)power output to the facilities.

He said Ikeja, Benin, Owerri and Port Harcourt plants would be powered by solar energy by Dec. 2022, noting that the company was targeting to increase its solar generation capacity to 15,947KWp.

“Beyond the direct impact on reduced emissions, another indirect positive outcome of this project is that over 167,000 trees have been saved.

“The evolution and the implementation has supported the creation of 300 jobs with an additional 480 jobs forecast to be created in support of the system this year,” Seguin said.

He said NBC was also optimising its operations through heavy investments in Combined Heat and Power Plants (CHP) plants.

“With the technology of the CHP, after electricity is generated using gas to power the gas generators in the plant, the resultant exhaust gas and

heat is redirected from going into the atmosphere to generate steam.

“The heat from the steam is used as a secondary energy source to further power some aspects of our manufacturing operations.

“Today, we have six CHP plants in five of our eight manufacturing plants including Port-Harcourt, Ikeja, Benin, Owerri and Asejire Plants, all resulting in a significant reduction of our carbon footprints across the country.

“Overall, the six CHP plants generate 25.5MW of power delivering 125,267MWh of electrical energy including 68,267MWh as steam energy, as a bye product, which without the CHP would have been produced with fossil fuel.

“Collectively, the business invests over N1.7 billion in running the six CHPs annually,” Seguin said.

He added that the company had also embarked on fleet conversion/replacement to Compressed Natural Gas (CNG trucks) and already had 10 CNG trucks in its fleet.

Seguin said the constraint was the availability of CNG, and that government should encourage the setting up of more CNG filling stations across the country.

He said NBC had also started transitioning its diesel-powered forklifts to models powered by electricity; contributing further to our CO2 emissions savings as a business.

“So far 109 forklifts have transitioned, with a plan for all 200 forklifts used in the business to be transitioned by the end of this year, 2022,” Seguin said.

On her part, Mrs Oluwatoyin Agbenle, Controller of Environment in Lagos State, Federal Ministry of Environment, lauded NBC for taking the bold step to promote sustainable manufacturing.

She said the ministry would continue to encourage manufacturers to optimise use of natural resources and raw materials to reduce environmental impact in their operations. (NAN) (www.nannews.ng)

FG, stakeholders intensifying efforts to address power challenges – NERC

By Solomon Asowata

Lagos, March 21, 2022 (NAN) Mr Sanusi Garba, Chairman, Nigerian Electricity Regulatory Commission (NERC), says the Federal Government and stakeholders in the power industry have intensified efforts to address the current challenges facing the sector.

Garba made this known during an interactive session with journalists after the Nigerian Electricity Supply Industry (NESI) meeting on Monday in Lagos.

The News Agency of Nigeria (NAN) reports that the meeting was attended by top officials of NERC, Transmission Company of Nigeria, Generation Companies (GenCos) and electricity Distribution Companies (DisCos).

He said the meeting was in line with the directive of the Minister of Power, Mr Abubakar Aliyu, for stakeholders to work together not only to restore normal supply of electricity but to improve on supply nationwide.

Garba said the issue of shortage gas supply to power plants, collapse of the national grid, illiquidity of the industry, huge metering gap and infrastructure deficit were some of the challenges confronting the sector.

He said the plan of the government was to ensure that the thermal power plants were working optimally and to ensure that there was stability in the grid.

Garba said NERC had approved a special gas pricing for emergency contracting of gas from the Nigerian Gas Marketing Company Ltd., for the Niger Delta Power Holding Company (NPDHC), to optimise utilisation of its power plants.

According to him, it is expected that about 800MW will be generated from the NDPHC plants.

Garba said the gas pipeline affected by acts of vandalism had been restored and the Okpai Power Plant had resumed power generation and currently contributing an average of 300MW.

He added that the “pigging” of the gas pipeline supplying gas to the Odukpani Power Plant was scheduled for completion on March 21 thus ramping up generation by about 400MW.

On metering, Garba said about 900,000 prepaid meters were installed for customers under the Phase Zero of the National Mass Metering Programme (NMMP) of the Federal Government.

He said engagement was already ongoing with local meter manufacturers for the implementation of the phase one of the programme which had a target of four million meters.

Garba said the World Bank was also providing finance for another four million meters which would help the nation close the metering gap with about eight million meters in the next three years.

He added thatvNERC had approved a five-year Performance Improvement Plans for the DisCos which would lead to more investments in electricity distribution to end-users.

Garba explained that the minor tariff review approved for the DisCos was in line with the tariff methodology adopted by NERC for periodic adjustments of tariffs based on inflation, exchange rates and gas pricing.

Also speaking, the Managing Director, TCN, Mr Sule Abdulaziz, said the current administration had spent over N1 trillion on strengthening the transmission network.

Abdulaziz said the TCN had the capacity to wheel 8,000MW but was currently receiving 3,500MW from the GenCos.

While apologising for the recent system collapse of the national grid, he noted that grid collapse could be caused by a myriad of factors but the most important thing was the restoration period.

He noted that contrary to public perception, the collapse of the grid had reduced in the past few years.

The TCN boss recalled that the grid collapsed 12 times in 2018, nine times in 2019, four times in 2020, twice in 2021 and so far three times in 2022. (NAN) (www.nannews.ng)
ASO/JNC
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Edited by Chinyere Joel-Nwokeoma

NUPRC to deploy modern technology to curb oil theft

Mr Gbenga Komolafe, Chief Executive, NUPRC

By Solomon Asowata

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) says it is upgrading and deploying the National Production Monitoring System (NPMS) facility toward curbing crude oil theft in Nigeria.

Mr Gbenga Komolafe, Chief Executive, NUPRC, spoke recently in Abuja on efforts by the commission to address the menace of crude oil theft.

Komolafe said the deployment of  NPMS, which is an electronic system used in monitoring oil and gas production in Nigeria, was being carried out in collaboration with other relevant agencies.

According to him, this ensures accurate and reliable reporting of crude oil production.

He noted that the National Data Repository (NDR) within the NUPRC serves as the data warehouse for Nigeria’s oil and gas industry.

Komolafe said, “The Value of Information (VOI) is for purpose of oil and gas investment decision.

“For example, NDR facilitates data for bid rounds in line with the statutory mandates of the NUPRC under the PIA to prospective investors, thus enabling informed investment decision and shortening upstream business lifecycles.”

He also said that NUPRC had taken technological advancements into consideration in its work processes.

Komolafe said that currently, the Technological Adaptation Unit within Engineering and Standards Department engages service providers on new technologies that could be implemented in the petroleum industry.

“In addition, we have established more data related initiatives in the NDR such as National Improved Oil Recovery Centre (NIORC).

“This focuses on utilising big data to drive reduction in cost per barrel.

“Also, the Integrated Data Mining and Analytics Centre (IDMAC) was setup to assess and analyse data for informed business decisions,” he said. (NAN)(www.nannews.ng)

Expert urges NASS to expedite legislation on decentralised national grid

Mr Kola Balogun,  Chairman, Momas Electricity Meter Manufacturing Company (MEMMCOL)

By Solomon Asowata

Lagos, March 16, 2022 (NAN) A power expert, Mr Kola Balogun, has urged the National Assembly to expedite action on its move to decentralise the National Grid due to incessant system collapse.

Balogun, who is the Chairman, Momas Electricity Meter Manufacturing Company (MEMMCOL), made the urge in an interview with the News Agency of Nigeria (NAN) on Wednesday, in Lagos.

NAN reports that the national grid had suffered two system collapses within the last three days, resulting in blackouts in some parts of the country.

Balogun commended the efforts by the national assembly to move electricity generation and distribution from Exclusive to the Concurrent List in the ongoing amendment of the 1999 Constitution of the Federal Republic of Nigeria.

“Honestly, they have taken the right step. This has been my advocacy ever since, but it took them a long time to listen to us.

“We have over 30 years experience in the power sector downstream and we made recommendations that the grid should be decentralised as a matter of urgency.

“We have seen that the grid system has failed us. Everytime we have system collapse because of decayed infrastructure. We need a lot of replacement.

“We need substation enhancement, distribution substations, injection substations, transmission substations and network expansion of the transmission substations.

“So, it is good that we are now moving to separate the grid to allow state and local governments interested in the sector to come in.” he said.

Balogun, however, warned that it was not enough to clamour for the decentralisation of the national grid, stressing that past mistakes recorded in the power sector privatisation must be avoided.

He said, “We must ensure that only people with pedigree, right technical skills and financial competence will be allowed to manage the cascaded separation of grid.

“They are to manage the sub-sector of the network and this means we have to sit down and do a proper restructuring of decentralisation to ensure that the right people are given the task.”

According to him, even some personnel who have retired from the power sector but are still technically sound can be consulted in this regard.

Balogun said there should also be a time frame and deliverables to appraise the players from time to time.

“We can do an appraisal that will show that a particular local government or state has become a success story in managing its grid with the area having uninterrupted power supply.

“That will serve as a learning curve to others and will lead to adopting their methods.

“So, the national assembly has put in a remarkable effort to decentralise the grid and they should license people on kilowatt hour.

“Those businesses that are surviving in Nigeria today are licensed.

“Banks are licensed businesses,  so also are telecoms. We can have same in the power sector but they must be thoroughly scrutinised.” (NAN) (www.nannews.ng)

Marketers, airlines dialogue over aviation fuel price hike – MOMAN

Lagos, March 16, 2022 (NAN) The Major Oil Marketers Association of Nigeria (MOMAN) says it is holding talks with domestic airlines for steady supply of aviation fuel for their operations.

Mr Clement Isong, Executive Secretary, MOMAN, confirmed the development in an interview with the News Agency of Nigeria (NAN) on Wednesday in Lagos.

He said the engagement followed the intervention by the House of Representatives and supervision by the Nigerian Midstream and Downstream Petroleum Regulatory Authority.

The executive secretary empathised with all stakeholders, including ordinary Nigerians who are struggling with the consequences of the increment in the price of crude oil at the international market.

Isong blamed the hike in the price of crude oil and its derivatives such as aviation fuel, petrol, diesel and kerosene on the ongoing hostilities between Russia and Ukraine.

“We understand their pains even the Federal Government that is paying a higher cost to subsidise petrol.

“The rise and fall of oil prices is cyclical. We have been here before and we are hoping that within a short period that international supply of crude will adjust to meet demand and prices will come down to more acceptable levels,” he said.

According to him, the situation can also abate if marketers are able to get foreign exchange at decent rates instead of sourcing from the parallel market.

Isong, however, advised the domestic airlines to change the way they do business to enable them get steady supply of aviation fuel to run their operations.

He urged the airline operators to clear their debts and adopt a pricing formula for procurement of aviation fuel in line with international best practices.

Isong said: “There is aviation fuel in the country. However, the product is expensive. Many of us who have contracts with international airlines have to keep stocks for them.

“Now, international airlines pay for their products based on a pricing formula, so it is predictable. There is no quarrel on the price. It is Platts plus Premium.

“The Premium is fixed. The Platts, which is a price benchmark service for the oil industry, goes up and down depending on the international market price.”

The executive secretary said the pricing template is transparent and predictable.

“I should also add that we buy the product in forex and the foreign airlines pay in forex. So there is no forex risk.

“For the local airlines, there are two challenges. First of all they don’t like signing binding contracts based on pricing formula. They prefer running from one marketer to another trying to get products at cheaper rates.

“Secondly, many of them are owing. They are owing millions of naira to the industry not just marketers alone. When they finish from one marketer, they run to another one.”

According to him, the marketers are demanding that the airlines  pay up their debts because the burden on the industry is becoming too much.

Explaining further, he said adopting a pricing formula meant that the marketer must commit to a volume of products that would be supplied to the the airline within a specific period.

“The pricing formula means that you buy over a period of one month a certain quantity of products and the airline must pick that product.

“So when they have agreed, you go and buy that volume and you keep for them but if they don’t agree, you can’t keep that volume for them,” he said.

He explained that the domestic airlines had to change the way they did business.

“This is what the Group Managing Director of Nigerian National Petroleum Company Ltd., Mele Kyari has asked them to do.

“There are international best practices that they need to adhere to in running their businesses.

“This include a pricing based formula committing to volumes and also clearing their outstanding debts to ensure smooth operations in the sector.

“If they adopt this method, marketers can take the risk of buying products and keeping for them in our tank farms but they need to commit to volume because that is how the business is done,” said Isong.

The executive secretary said he had nothing but respect for the domestic airlines who had over time invested in leasing more modern aircraft to improve the quality of their service to their passengers.

He added that he equally understood the challenges in charging airfares that were reasonable but allowed them to meet their obligations to their vendors. (NAN) (www.nannews.ng)

CSR: Ikeja Electric upgrades electrical workshop at Ikorodu Technical College

Mrs Folake Soetan, Chief Executive Officer, Ikeja Electric Plc, flanked by other dignitaries unveiling the upgraded electrical workshop at Government Technical College, Ikorodu on Tuesday in Lagos.

By Solomon Asowata 

Ikeja Electric (IE) has renovated and upgraded the electrical workshop at Government Technical College, Ikorodu, as part of efforts to support the improvement of technical capacity building in Lagos State.

The News Agency of Nigeria (NAN) reports that the workshop was inaugurated by Mrs Folake Soetan, the Chief Executive Officer, Ikeja Electric, on Tuesday in Lagos.

Soetan noted that the gesture was aimed at boosting technical education in the state, while complementing the efforts of government through its Corporate Social Responsibility (CSR) initiatives.

She emphasised that the electricity distribution company remains passionate about giving back to communities where it operates.

Soetan said: “We care about our customers and we look for every opportunity to support them, through our CSR platform, which has touched thousands of lives positively.

“We acknowledge the efforts of the federal, state and local governments in providing quality education for our children and raising the future leaders of tomorrow.

“No doubt, the responsibility being handled by government is huge and demand is enormous. Government cannot do it all alone.

“That is why private organisations like Ikeja Electric throw their weight behind initiatives that support government and drive development. At IE we give back to the societies where we operate.

“Therefore, in line with our commitment toward education, we decided to rehabilitate the electrical workshop at Government Technical College, Ikorodu.”

According to her, the upgraded workshop will enhance technical capacity building and create a conducive learning environment for the students.

Speaking further, Soetan noted that education was the bedrock of development for any nation.

“Clearly, when technical skills are encouraged among young people, it helps a nation to develop in terms of technology, economy, manpower, self-sustenance, creation of job and reduction of unemployment,” Soetan said.

The Lagos State Commissioner for Education, Mrs Folashade Adefisayo, commended Ikeja Electric for the initiative which would add value to the college.

Adefisayo, represented by Dr Olufunke Oyetola, Director of Policy, Planning, Research and Statistics, Lagos State Ministry of Education, called for more partnership between the DisCo and the state.

She said the impact would definitely be meaningful to the students because the quality of learning would improve thereby enhancing their capabilities and potential.

On her part, Ms Moronke Azeez, Executive Secretary, Lagos State Technical and Vocational Education Board (LASTVEB), said the board’s mission was to provide industry response and gender inclusive technical and vocational education.

Azeez said the board was not only interested in the training of the students but was also engaging technical partners to help create start-ups and employment opportunities for them.

She said the state currently had about 400 partners involved in the exercise, adding that there was a need for more private sector support of technical and vocational education in the state.

Earlier, Mrs Adegboyin Kenku, Principal, Government Technical College, Ikorodu, lauded Ikeja Electric for expending resources and time in order to impact on the lives of students and teachers.

Kenku said: “The students feel very comfortable in the workshop, they are excited to learn because of the conducive environment.

“Therefore, we want to express our gratitude to Ikeja Electric for being our partner in progress in nurturing and supporting the talents that will graduate from this college.

“We want to reassure them that we will maintain it. And we believe you hear positive news about our students,” she said.(NAN) (www.nannews.ng)

 

Eko DisCo appoints Sanda Deputy CEO

Dr Tinuade Sanda, Deputy Managing Director, EKEDC.

By Solomon Asowata

The Board of Directors of Eko Electricity Distribution Company (EKEDC) has approved the appointment of Dr Tinuade Sanda, as the Deputy Managing Director of the company.

The company made the announcement in a statement issued by its General Manager, Corporate Communications, Mr Godwin Idemudia, on Monday in Lagos.

The statement said prior to her appointment, Sanda was the Chief Accounting Officer, a position she had occupied since 2013.

According to the statement, Sanda’s appointment is in line with the company’s strategies and procedures.

It said the board and the management were confident in her proficiency and capacity to assist in leading the company toward its vision of becoming the leading and customer-centric electricity distribution company in Africa.

The statement quoted the Board Chairman, EKEDC, Mr Oritsedere Otubu, as saying the DisCo was proud to appoint Sanda as its first female Deputy Chief Executive Officer (CEO).

“Her appointment has proven the resilience of our succession planning mechanisms and the value we place on our corporate governance practices, which underpin our philosophy of building and recognising home-grown talents,” the statement also quoted Otubu as saying.

It said Sanda was a senior executive with vast experience in financial reporting, treasury management, taxation, mergers and acquisitions, finance regulation, risk management and financial modeling.

The statement said: “Prior to joining EKEDC in 2013, she was the Head, Finance and Administration at Vanguard Energy Resources, a leading oil and gas trading services company.

“In 2001, she joined the banking sector at the Chartered Bank of Nigeria where she rose through the ranks before joining Access Bank, as the Head of Retail Risk Management till 2012 when she left the sector.

“She earned her bachelor’s degree in Financial Accounting from Obafemi Awolowo University, and Master’s Degree in Business Administration from the Heriot-Watt University in Edinburgh.

“She also attended Strategic Financial Analysis for Business Evaluation Programme at the Harvard Business School in 2015.

“She is a Fellow of the Institute of Chartered Accountants in Nigeria; Institute of Management Consultants, United States; and Institute of Professional Financial Managers, London.”

It said she was also an Associate Member of Risk Management Association of Nigeria; Financial Reporting Council of Nigeria; and the Institute of Directors, Nigeria.

The statement added that in 2020, Sanda was awarded a Doctor of Philosophy in Financial Management and Entrepreneurship from the ICON University of Management Science and Technology, Benin Republic.

Reacting to her appointment, Sanda expressed her gratitude toward her new responsibility in the company.

She said: “I appreciate the board’s belief in my ability as I look forward to supporting the CEO in developing Eko DisCo further with the formidable workforce.

“We know our role in the electricity industry; hence, I am going to give my best to ensure EKEDC continues to deliver on its promise to our customers.

“We will enhance collaboration with stakeholders to bring about further growth and development in the Nigerian Electricity Supply Industry.” (NAN) (www.nannews.ng)

IWD: EKEDC boss calls for end to gender-based violence

Mr Adeoye Fadeyibi, Managing Director, Eko Electricity Distribution Company in a group photograph with staffers of the DisCo during the International Women’s Day celebration on Tuesday in Lagos.

By Solomon Asowata

Mr Adeoye Fadeyibi, Managing Director, Eko Electricity Distribution Company (EKEDC), has called for an end to gender-based violence and all forms of discrimination against women.

Fadeyibi made the call during the review of a book titled: “She Triumphs: A Story of Faith, Hope and Restoration,” authored by Mrs Rita Akpata on Tuesday in Lagos.

The News Agency of Nigeria (NAN) reports that the review was part of activities by EKEDC to mark the 2022 International Women’s Day (IWD).

Fadeyibi said the IWD was a special day to celebrate women and their outstanding contributions to the society and humanity.

He said there should be concerted efforts to abolish gender-based violence and all forms of discrimination against women.

Fadeyibi noted that there was still work to do in achieving this despite some significant progress made to close the gender gap.

On her part, Akpata said the 39-page book was written to encourage women who had gone through bad marriages and divorce not to give up on life and love.

She said divorced women and single mothers often faced stigmatisation from the society, which could force them into depression and having suicidal thoughts.

Akpata said hope in God made her triumph as she was blessed with another husband and had been able to set up a foundation to assist other women facing similar challenges. (NAN) (www.nannews.ng)

African countries engage DFIs to fund oil, gas projects

Chief Timipre Sylva, Minister of State for Petroleum Resources

By Solomon Asowata

Lagos, March 7, 2022 (NAN) Nigeria and other petroleum producing countries in Africa have begun engagements with Developmental Finance Institutions (DFIs) to fund critical oil and gas projects in the continent.

The Minister of State for Petroleum Resources, Chief Timipre Sylva, made this known while declaring open the first African Local Content Investment Forum (ALCIF) on Monday in Lagos.

The forum was organised by the Nigerian Content Development and Monitoring Board (NCDMB), with the theme: “Pan-African Strategy Towards Sustainable Funding of Africa Oil and Gas Projects”.

Sylva, represented by Dr Nasir Sani-Gwarzo, Permanent Secretary, Ministry of Petroleum Resources, said the countries were engaging the Afrexim Bank, African Development Bank and other institutions to finance their projects.

He said that the move was necessitated by the refusal of international finance institutions to approve funding for development of hydrocarbons due to the global push for transition to cleaner sources of energy.

According to Sylva, Africa has 120 billion barrels of proven crude oil and about 600 trillion cubic feet of proven gas reserves that must be harnessed for the continent’s socio-economic development.

 

The minister said: “Without doubt, the emerging trend is that leading multinational financial institutions are factoring Environmental, Social, and Corporate Governance (ESG) in their lending decisions.

“The seeming freezing of equity investment in upstream field development projects by International oil companies is a wakeup call for Africa to provide alternative funding to sustain hydrocarbon development and secure our energy future.”

He noted that governments of Africa Petroleum Producing Organisations (APPO) member countries were heavily dependent on oil and gas revenues to meet their socio-economic obligations.

According to him, dearth of funds, limitations in technology mastery, high-end skills gap, undeveloped internal market for hydrocarbon derivatives and inadequate energy infrastructure are some of the challenges facing the industry.

He said the continent’s oil and gas infrastructure requirements include upstream field development projects; pipelines; depots; terminals; refineries; petrochemical plants; and research and development among others, which required huge funding.

Also, Mr Simbi Wabote, Executive Secretary, NCDMB,  said that more than 640 million people, representing about half of the total population in Africa, had no access to electricity while the other half with access had unreliable supply of electricity.

“The challenge of inadequate energy is partly the reason why Africa is faced with poverty, conflicts, migration, brain drain and ranks very low on Human Development Index,” he said.

Wabote said that the Afrexim Bank and the AfDB had the opportunity of taking advantage of Africa’s abundant hydrocarbon resources by providing funding for oil and gas development.

The Secretary General, APPO,  Dr Omar Ibrahim, said Africa’s contribution to green house gas emissions was about four per cent, and it was, therefore, unjust for the continent to be railroaded into the global energy transition timeline.

He called for the setting up of an African Energy Investments Corporation (AEICorp) which would fund oil and gas projects as the traditional financiers withdraw from the industry.

Ibrahim said: “But we are realistic. AEICorp cannot do it alone. No financial institution in Africa can do it alone. But through cooperation and collaboration, we are confident that Africa shall succeed.

“If we see energy security as critical to our national security, we should enact laws that provide for a portion of windfalls from oil and gas sales to be re-invested in the industry.

“We need to find a way or ways of getting African oil and gas producing countries governments to commit to a certain percentage of the windfalls to a special fund for the sustenance of the oil and gas industry during the transition period.”

Also, Dr Benedict Oramah, Managing Director, Afrexim Bank, represented by Mr Ibrahim Sagna, Head, Advisory and Capital Markets, Afrexim Bank, said that the bank would continue to support the development of oil and gas projects.

Oramah said that the bank had provided funding to the Nigerian National Petroleum Company Ltd and the Dangote Refinery as well as other players in the sector. (NAN)(www.nannews.ng)

ASO/DOE/SOA

NURPC highlights implications of global change from fossil fuels

Mr Gbenga Komolafe, Chief Executive, NUPRC

The Nigeria Upstream Petroleum Regulatory Commission (NUPRC) says the goal of the global change to move completely away from fossil fuels has its implications.

Mr Gbenga Komolafe, the Chief Executive, NUPRC, said this on Thursday in Abuja at the ongoing fifth Nigeria International Energy Summit (NIES 2022) with the theme “Revitalising the Industry: Future Fuels and Energy Transition.”

Komolafe, represented by his Senior Technical Adviser and Assistant Director, NUPRC, Mr Abel Nsa spoke on  “Fundamental Shifts in NUPRC in a Time of Transition.”

He said that all nations were being jointly held responsible for environmental impact of fossil fuels, while oil producing nations that have the appropriate economic model may escape a lot of impact.

Komolafe noted that oil producing nations without the appropriate economic model, might be worst hit in spite of their endowment with abundance of fossil resources.

“Responsive nations can still make the proper shift even in the seemingly short time left,” he added.

He said the growing concern around energy transition affected all economies of the world especially those most dependent on fossil fuels for their energy needs and national revenue.

Komolafe said the targeted state of net-zero emission might be challenging to attain but a lot of effort was being put into curtailing fossil fuels and advancing cleaner alternatives by developed countries.

He said in Nigeria’s case, the quest for sustainable development had two dimensions; quest to get the best economic model for harnessing oil and gas resources and to balance the environmental demands of the comity of nations.

To this end, Komolafe said Nigeria commenced a holistic reform of the industry in the 2000s to address the first problem, along the line the second issue took centre stage.

“But gladly the Petroleum Industry Act (PIA) 2021 was progressively adapted to address both issues,” he added.

According to him, Nigeria has indeed commenced the necessary shift toward sustainability.

He noted that the passage of the PIA, 2021, offered fundamental shifts in the regulatory architecture of the NUPRC.

Komolafe said the Act provided for legal, governance, administrative framework and attractive fiscal regime.

“In a clear departure from the past, the law provides clarity on areas that were hitherto uncertain or ambiguous in the regulation of upstream operations.

“Empowered by the PIA, the commission naturally tapped into its wealth of experience, expertise and institutional memory that it has garnered over the years to implement the desired change and bring about monumental shifts.

He outlined some of the strategic focus of the NUPRC toward attaining the desired change as envisaged in the PIA 2021 as Development of Regulations, Environmental Remediation Fund and Field Development Plan, among others.

“Committee on Implementation of the PIA (STEERCO) is developing draft regulations for effective implementation of the Act. In this respect also, NUPRC is in consultation with upstream stakeholders to ensure all-inclusiveness and robustness.

“Some of these regulations are being developed to address critical industry issues such as, acreage administration, decommissioning and abandonment, commingling of stacked reservoirs, oil and gas royalty administration and host communities development trust, amongst others.

“The process of stakeholder’s engagement has commenced, and the commission has requested input from various stakeholder groups which will be evaluated for adoption in the regulations. In a short while, the commission will publish.

“The PIA has vested in the commission, the power to set up an environmental remediation fund into which licensee and lessees will make financial contributions as determined by the commission toward potential degradation or damage to the environment.

“Towards meeting the government aspiration of 40 billion barrels of oil reserves, 220TSCF of gas reserves and three million bop production target, innovative ways are being employed by the commission in collaboration with industry players,” he said.

This, he said, would ensure maximum economic recovery through exploration and resources maturation, improved oil recovery, reserves maturation and production optimisation, asset stewardship and risk management.

He said with the focused implementation of these initiatives, it was confident that the NUPRC could drive the attainment of the Nation’s Reserves and Production target. (NAN)

Nigeria can use mass data to meet energy needs, increase reserves - NUPRC boss

Mr Gbenga Komolafe, Chief Executive, NUPRC

By Solomon Asowata

Mr Gbenga Komolafe, Chief Executive, Nigerian Upstream Petroleum Regulatory Commission (NUPRC) says Nigeria can utilise mass data to meet its energy needs and increase its hydrocarbon reserves.

Komolafe spoke at a panel session on "Data to Barrel” at the ongoing 5th Nigeria International Energy Summit in Abuja.

He said: " According to U.S. Energy Information Administration (EIA), Petroleum energy remains the largest source of energy, though its share of world marketed energy is in decline from 33 per cent in 2015 and projected at 31 per cent in 2040. 

"With this huge opportunity, the key challenge is using mass data to meet Nigeria’s energy needs and increase proven reserves by ensuring that our oil and gas resources are not left behind in the subsurface without being beneficial in a timely manner for the Nation. 

"No era lasts forever, so Nigeria must make haste to harness fossil fuel energy while its still relevant."

Komolafe noted that the upstream industry was facing challenges that require the need for mass data in high-precision reservoir modelling and surveillance. 

"Consequently, superb computing power, high-performance storage capacity, powerful and integrated mapping applications are required to be able to turn big data into barrels and value for money.

"Hence, the key challenge for service providers in producing oil companies is to demonstrate the value that gathering additional data will bring to the asset. 

"So, it is not just about gathering more data, but equally about the Value of the Information (VOI) from the data gathered," he said.

According to him, the development and use of Artificial Intelligence (AI), through generating new and robust mapping applications, requires big data and supercomputing technology.

He said this helps to decide investment in the right prospects, development of a robust Field Development Plan (FDP), drilling and completions in safe and cost-efficient operations, all in order to optimise production and meet daily deliverables. 

"Big data only makes sense when it leads to safer operations, cost efficiency, and increased profit margins," Komolafe noted.

He said the NUPRC has taken technological advancements into consideration in its work processes.

Komolafe said currently, the Technological Adaptation Unit within Engineering and Standards Department engages service providers on new technologies that could be implemented in the Nigerian Petroleum Industry.

" In addition, we have established more data related initiatives in the NDR such as National Improved Oil Recovery Centre (NIORC) focussed on utilizing big data to drive reduction in cost per barrel.

" Also, the Integrated Data Mining and Analytics Centre (IDMAC) was setup to assess and analyse data for informed business decisions," he said. (NAN)

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