Discos Renewable Energy Firms Sign MoU on Mini-Grids

25th October 2018

Global Energy Transition Program to Gulp $1trn Investment in Metals Over 15yrs

Power distribution companies are entering into partnerships with renewable energy firms for the development of mini-grids to boost the supply of electricity in Nigeria.

According to officials from the Rural Electrification Agency and stakeholders in the renewable energy space, already, they have signed memorandum of understanding for the execution of the project, adding that the move will reduce the poor power supply situation in communities not energised by the national grid.

Speakingat the breakfast meeting on Financing Off-grid Energy Projects and the inauguration of Nigerian Mini-grid Investment Report at the 24th Nigerian Economic Summit in Abuja on Tuesday, the Chief Executive Officer, Rubitec Solar Nigeria Limited, a renewable energy firm, Bolade Soremekun, stated that interconnected mini-grids were being established by some Discos.

He said, “We signed an MoU with Benin Disco for developing interconnected mini-grids and it took time to educate the Disco and understand what their needs are and how to manage them. It is a territory that has been on concession to them (Discos), so in terms of interconnected mini-grids, we need to work with them.

“In terms of isolated mini-grids, they need to know that we are doing projects on them and not necessarily for us to get their permission because the NERC (Nigerian Electricity Regulatory Commission) regulation allows us to do isolated mini-grids.”

Soremekun added, “So what the interconnected mini-grid policy does is that if there are areas that are already under the grid but not energised, or if there is a distribution line that is not energised or has no electricity, we can come in and supply electricity through renewable energy, mostly solar.

“We will then meter the customers with prepaid meters and use the Discos’ distribution lines. Now, these distribution lines may need to be upgraded and we lease the lines and pay the Discos for it. With the MoUs being signed, I think more Discos will begin to have increased confidence to work with us.”

The President, Renewable Energy Association of Nigeria, Segun Adaju, said there were opportunities in the mini-grids space and urged the Discos to take advantage of it.

He said, “There is an opportunity clearly in this space, provided Discos are not seeing it as an encroachment into their territories. I can give you an example, there is one of our members, Rubitec Solar, who has developed a mini-grid in partnership with a Disco. That is a test case.

On whether the mini-power grid sector had been favourable to investors, he stated, “The sector is better than what it was three years ago.”

Adaju added, “There is a major improvement. For example, there is a mini-grid policy framework that is seen as one of the best in Africa and was developed by NERC. It has made the sector attractive, although there are still many grounds to cover.

“There is a market in Nigeria and mini-grids are running efficiently. People are paying and this is to the surprise of many stakeholders. So, this is to say that Nigeria is ready; it is a market where investments should come to and there is an estimated $500bn funding in the development space that can be accessed.”

The Manager, Rocky Mountain Institute, James Sherwood, a contributor to the report, said the mini-grids sector could attract investments worth $9bn annually to Nigeria.

He said, “What this report shows is that there is a very strong mini-grid industry getting started here in Nigeria and there are some clear opportunities to grow that industry going forward. It has the opportunity to be a $9bn per year industry and with a little bit of additional work, we can quickly move this to open up opportunities to use mini-grids as a tool for energy access.”

Limited Access to Electricity worsening Poverty Situation in Nigeria – NAEE

OrientEnergyReview

25th October 2018

Oge Obi

The Nigeria Association for Energy Economics (NAEE) has said that citizens’ low access to electricity has worsened the poverty situation in the country.

The Association disclosed data obtained from the Trading Economics 2018, showed that over 40 per cent of Nigerians do not have access to electricity.

Speaking at the 2018 World Energy Day in Abuja, the President of NAEE, Prof. Wumi Iledare disclosed that poor access to electricity would undoubtedly leads to diminished social and economic status of any country.

He said, “For instance, studies have shown that countries with low access to energy tend to have low access to modern energy services. Additionally, lack of access to modern energy services tends to limit households’ purchasing power potential from income generating opportunities.

“Thus, without access to adequate electricity and modern forms of energy services, it may be difficult to evolve low-income economy, promote economic growth and employment as well as support human development.”

Speaking further, Iledare called for amendments to the 2005 Electric Power Sector Reform Act that will enable energy regulatory bodies and policy institutions function with zero tolerance to political interference. “Let me offer some way forward to attaining sustainable and affordable access to electricity in order to derive maximum energy services required for sustainable economic growth and development in Nigeria.

“This begins with a review and perhaps some amendments to the 2005 Electric Power Sector Reform Act with respect to sections on institutions and governance as well as market reform. There is a need to avoid overlap among energy regulatory and policy institutions and NERC (Nigerian Electricity Regulatory Commission) must be allowed to function as an institution with zero tolerance to political interference.

“NERC must be apolitical. Lessons can certainly be learnt from the apolitical nature to a large extent of the regulatory authority of the Central Bank of Nigeria to regulate financial institutions in Nigeria with its absolute power to manage money supply in the economy. Although there are still some disturbances in the conduct of financial market in Nigeria, they are a far cry from the huge disturbances in the electricity market.”

NEITI, CAC Set to Unveil Nigerian Oil Well, Mining Asset Owners in 2019

OrientEnergyReview

23rd October 2018

NEITI, CSOs Canvass Transparency in Oil, Mining Contracts

Oge Obi

December 31, 2019 has been set by Extractive Industries Transparency Initiative (NEITI) and Corporate Affairs (CAC) to release a comprehensive register of beneficial owners of oil wells, gas and mining companies in Nigeria.

The Executive Secretary, NEITI, Dr. Waziri Adio, disclosed this in Abuja at a one-day stakeholders’ engagement meeting on the implementation of the beneficial ownership roadmap in extractive industries in Nigeria.

According to Adio, the move would help entrench transparency and accountability in the extractive sectors; adding that such information will enable Nigerians to know the real persons having significant influence directly or indirectly in the nation’s extractive sectors.

“We are going to have the register of all the companies operating in Nigeria by December 31, 2019. A lot of discussions have been going on both at the level of the EITI and at the level of the Open Government Partnership (OGP) and the Corporate Affairs Commission (CAC). We have had a lot of discussions. We need to stop talking; we need to start acting,” he said

Speaking further, the Executive Secretary noted that allowing the ownership of such investments to be shrouded in secrecy could encourage sponsorship of conflict, terrorism, money laundering, and drug financing. He noted that such act could benefit only the minority elite in the country.

“We know that hidden ownership can be used as a mast for conflict of interest; it can be used as a mast for abuse of office; it can also be used to facilitate corruption; it can be used to facilitate tax evasion, it can also be used to perpetrate money laundering, drug financing and terrorism financing,” Adio added.

The ES, however, expressed concerns about the challenges of adopting beneficial ownership disclosure in Nigeria. He has concerned ranged from lack of legislation on beneficial ownership disclosure; low level of awareness on the issue, and lack of capacity and readiness to comply with the disclosure of beneficial owners.

Also speaking at the forum, the Director, Legal and Compliance, Corporate Affairs Commission (CAC), Alhaji Garba Abubakar, explained that the fact that Nigeria has no register of beneficial owners does not mean that the laws do not allude to it.

Abubakar revealed that there were sections of the Company and Allied Matters Act (CAMA) that compel businessmen to disclose their shareholders and the capacity of ownership of the shareholders.

He said the commission was proposing a law that would make it mandatory for companies to disclosure their beneficial owners, noting that “already, we have designed the beneficial owners’ form register.”

“Disclosure of beneficial owners has been one area that Nigeria has recorded non-conformity. People whose original interest is to hide will never comply with this,” he said.

According to him, the register which might have some challenges arising from coincidence of name would however, have the date of birth differentiating the owners of the companies throughout country

Nationwide Blackout Looms as DSS Allegedly Aids Seizure of TCN’s Facility

OrientEnergyReview

23rd October 2018

Thisday newspaper has reported that national electricity supplies may witness another round of disruptions from the transmission end of the loop if reported takeover of the fibre optic infrastructure of the Transmission Company of Nigeria (TCN) by a private telecommunication firm-Phase 3, despite a subsisting court order over franchise tussle for the network, is allowed to stay,

The paper sited a petition obtained from the Office of the Attorney General of the Federation (AGF) and Minister of Justice, Mr. Abubakar Malami, that the operations of the TCN is looking likely to be impaired by a forced takeover of its fibre optic network by Phase 3 Telecom-a concessionaire it is presently in court with for allegedly failing to abide by the terms of a $40 million fibre optic network infrastructure deal they signed in March 2006.

The petition, reportedly claimed that the Department of State Security (DSS) has helped the telecoms firm to take over and man the TCN’s fibre optic infrastructure against a court order.

It came at a time about 2187.7 megawatts (MW) of electricity could not be supplied to Nigerians on account of constraints specifically from the grid.

When contacted over the matter, the spokesperson of the DSS, Peter Afunanya, promised to get back to our correspondent but he did not respond to the allegation as at press time.

In the petition, the legal representatives of the TCN were reported to have informed the AGF that in the spirit of public private partnership (PPP), the TCN entered into a 15-year concession agreement with Phase 3 for the latter’s use of its fibre optic network infrastructure.

It equally explained that the agreement involved Phase 3 paying a concession fee of $40 million to the federal government through it for the right of access and use of the fibre optic network for the 15-year period, in addition to paying a 2.5 per cent royalty on its gross revenue from its use of the network among other charges.

However, the telecoms firm, TCN told Malami, paid only $3.5 million out of $40 million, and allegedly sub-concessioned the network to a third-party for periods longer than what it agreed with it. Based on these, the TCN said it opted to cancel the agreement, hence the court actions which the DSS reportedly ignored in its alleged connivance with the Phase 3 to gain access and take over its transmission facilities.

According to the petition, the DSS had despite a June 2018 Court of Appeal notice for a stay of execution on interlocutory injunctive orders granted Phase 3 by the High Court of the Federal Capital Territory (FCT) in May 2018, allegedly helped the telecom firm to take over the fibre optic infrastructure in TCN’s transmission substations located in Keffi, Nasarawa State; Suleja in Niger State and Katampe in Abuja.

It suggested the telecoms firm was on the verge of taking over others across the federation.

The three takeovers at the moment, the petition stated, were done on October 8, 2018, with men of the DSS who were reportedly heavily armed, chasing away TCN workers at the substations and equally threatening to shoot and kill any of them who dared to stop Phase 3 from repossessing the concession shelter of TCN’s fibre optics infrastructure.

Already, the TCN in the petition reported that in March 2018 when Phase 3 allegedly created unauthorised access points into its fibre optic networks during the pendency of the suit it instituted against it for cancelling the $40 million concession deal, it recorded system collapses around its Olorunsogo and Ikeja West transmission zones. This, by implication, it suggested, meant the national grid was now at the risk of being compromised since it no longer has absolute control of its fibre optic infrastructure.

The fibre optic network, it explained, enables it to monitor and control the operations of the national power grid, especially with regards to the operations of the Supervisory Control and Data Acquisition (SCADA) system which helps it interface with the operators in the grid.

While TCN was not available to comment on the petition which reportedly sought the intervention and clarification of Malami on alleged claims by the DSS that it was carrying out his (Malami) orders, THISDAY spoke to the Head of Corporate Communications of Phase 3, Morayo Nwabufo, who said the firm was in court with TCN and would not speak on the issues raised.

He said: “Thank you again for your call, and please be informed that there is a subsisting interlocutory injunction issued by FCT High Court against TCN in this matter, and other court processes are going on in this regard. Phase 3 in honour of the courts is unable to give comments, as this matter is now before competent court of the land.”

Notwithstanding, a daily report of the operations of Nigeria’s electricity sector THISDAY obtained from the Advisory Power Team in the Office of the Vice President, Prof. Yemi Osinbajo, showed that while the country’s power supply witnessed a slight increase last Friday to 4115MW, it however could not supply almost half of that (3,494MW) to the grid due to constraints which included gas and grid constraints.

The report indicated that grid constraints resulted to 2187.7MW not been generated and supplied, while the balance of 1305.8MW was occasioned by gas constraints-gas not available to generate power.

It noted that 10 gas power plants had issues of poor gas supply, while five of them were completely shut down on account of gas supply shortages. The total amount of money the sector could not gain on account of these was N1.677 billion.

Culled From Thisday

President Buhari to Visit Seme Border Tomorrow

OrientEnergyReview

22nd October 2018

Winners of Nigeria 2020 Marginal Bid Round Awaiting Buhari’s Nod

President Muhammadu Buhari and his Republic of Benin counterpart, Patrice Talon, will tomorrow perform the official handover of the new Economic Community of West African States (ECOWAS) Border Posts at Seme-Krake and Neope-Akanu in Badagry, Lagos.

In a statement issued yesterday, the Lagos State Government said all necessary arrangements to ensure hitch-free unveiling ceremony had been put in place, while President Buhari would be accompanied to the venue by the state Governor, Akinwunmi Ambode.

According to the statement, the President would be received at the airport by the governor, while the duo would thereafter proceed to the venue.

“Already, all necessary security and logistic arrangements have been firmed up by the state government in partnership with relevant federal government agencies.

“To this effect, the state government is soliciting the support and cooperation of the state residents throughout the visit,” the statement stated.

Kachikwu inaugurates Nigerian Content Research & Development Council

OrientEnergyReview

22nd October 2018

The Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu recently in Abuja inaugurated the Nigerian Content Research and Development Council (NCRDC).

The Council is expected to advise the Nigerian Content Development and Monitoring Board (NCDMB) on matters relating to Research, Development and Innovation strategy for the oil and gas industry.

The council’s terms of reference are said to “advise the Board on criteria and methodology for prioritizing market cum demand-driven research projects, advise the Board on the appropriate strategies and governance arrangements to attract funding for research projects and advise the Board on criteria for the award of research grants and review progress on impact of such grants on Research projects, Product development and Innovation.”

Kachikwu commended NCDMB for accomplishing the commitment it made at the 2017 Research and Development Fair. He described the R&D council as a timely innovation that would deepen the achievements recorded in Nigerian Content implementation.

Continuing, the Minister charged members of the council to deliver on their mandate, stressing that it will help redress the fallings of the oil and gas sector to the Nigerian economy.

“After 50 years, we still cannot refine enough petroleum products and we cannot provide enough electricity for our 190million populace. In the eyes of the general public, oil is failing the country. Some of the bold steps NCDMB is taking, to create research and create focus will internalize growth and development.”

The Minister underlined that NCDMB had transitioned from just being a policy maker to also functioning as a project promoter. He commended the Board for investing in the Waltersmith Modular refinery, developing industrial parks in Bayelsa and Cross River States and catalyzing the partial integration of the Egina FPSO.

Speaking further, Kachikwu added that the NCDMB is focused on increasing Nigerian participation in oil and gas projects and engendering business opportunities locally. “The new NCDMB is more dynamic and focused, to a point where the National Assembly is now considering whether Local Content should be implemented across sectors because of the success we have brought to the oil and gas industry. Even the world, especially African countries have taken notice.”

In his remarks, the Executive Secretary of NCDMB, Engr. Simbi Wabote explained that the framework of the Board’s research and development provides that all research topics or thematic areas must be based on industry challenge or needs.

He said. “The Board will be more involved in applied research to give room for product development and would encourage prototype development of products.

“The Board would be involved as well as encourage commercialization of products or research endeavours. The Board would ensure that every product that is commercialized at the back of oil and gas activities is accepted and utilized.”

The Council which is chaired by the Executive Secretary of NCDM, has other members including Engr. Patrick Olimna, representing the Oil Producers Trade Section (OPTS); Mr. Uzochi Nwagwu, representing the Petroleum Contractors Trade Section (PCTS); Dr. S.B Ramon Yusuf from the National Universities Commission (NUC) and Mr. Isa Yusuf Maikanma from the National Board for Technology Incubation (NBTI).

Other members include Dr. John Erinne, representing the Petroleum Technology Association of Nigeria (PETAN); Mr. Dele Aikihonbare, representing Independent Petroleum Producers Group (IPPG) and Mr. Tandama Adamu Abu from the National Office for Technology Acquisition and Promotion (NOTAP).

Problems of electricity can’t be solved by magic – Fashola

OrientEnergyReview

19th October 2018

Oge Obi

The Minister of Power, Works and Housing, Mr. Babatunde Fashola has said that the problems of electricity in the country are slowly being solved, adding that no magic can be done in tackling the issues.

Fashola said this on Thursday while inaugurating the 2x100MVA, 132/33kV power transformers at the Ejigbo Transmission Substation in Lagos.

Commending the Transmission Company of Nigeria for the ongoing projects across the country, the minister said out of the 800 containers of power equipment abandoned at the port for about 10 years, 690 have been recovered and will be put to use for ongoing projects.

Continuing, Fashola said there are about 90 more projects being carried out by the Transmission Company of Nigeria (TCN) across the country.

“We have come to hand over this expanded transmission substation, the Ejigbo Transmission Substation to the Ikeja Electricity Distribution Company. This substation was built in 1970. The capacity was 60MVA then, except for the addition of another 60MVA. This community has grown exponentially, so, they have exceeded the installed capacity here,” the minister said.

“Between that time and when President Buhari came three years ago, some people were there. But they will come back to you; so, when they come back, ask them if they didn’t know where to buy transformers.

“The problems of electricity are slowly being solved, one by one. Anybody will tell you he will do magic; tell him, ‘How?’ He should explain to you. We inherited 800 containers for power equipment left in the port for 10 years. President Buhari gave us approval, and we have recovered 690.

“If you look at it, between 2015 and now, you ask yourself honestly: Are you spending more on diesel now or before? Are you running your generators for longer today or yesterday? So, are you seeing the power slowly staying longer? If you are truthful to yourself, you will know that it is better than yesterday. And we haven’t finished.”

Speaking also, the Managing Director of TCN, Mr. Usman Mohammed, said that the two units of 100MVA transformers installed at the Ejigbo Transmission Substation was funded by the World Bank through the firm’s project management unit.

He stated, “With the increase in the Ejigbo substation’s capacity, the TCN has substantially increased bulk electricity available in the substation for the Ikeja Electricity Distribution Company to take to its customers. Consequently, electricity consumers in Ejigbo, Egbe, Oke-Afa, Shasha, Ikotun, Ijegun, and Idimu town will now have improved power supply from Ikeja Electric.”

“Other benefits include relieve of some overloaded feeders in Egbe, Shasha and Oke-Afa. Also, the Lagos airport will now have more load allocated to it. Improved power supply in these areas will positively impact the socio-economic development of the areas in particular and the economy at large.”

NNPC extends $6bn oil swap contracts by 6 months

OrientEnergyReview

19th October 2018

Oge Obi with agency report

Few months to the expiration of the National Petroleum Corporation’s (NNPC) 2018 crude-for-oil products contracts worth about $6 billion, the Corporation has again extended the oil swap deals by another six months – to June 2019.

Quoting unnamed sources, Reuters reported that the Corporation has extended the contracts – which serves as a major avenue for Nigeria in meeting up with her petrol need to end in June 2019.

The NNPC’s crude swap deals, which were previously referred to as offshore crude oil processing agreements (OPAs) and crude-for-products exchange arrangements, are now known as Direct Sale-Direct Purchase Agreements (DSDP).

Under the deals, the NNPC supplies crude oil to selected local and international oil traders and refineries in exchange for petrol and diesel.

The deals, which had expired by the end of July 2018, were extended until the end of this year.

In May 2017, the Corporation signed the deals with local and international traders to exchange about 330,000 barrels per day (bpd) of crude oil for imported petrol and diesel, as part of measures to sustain the supply of petroleum products across the country.

The crude oil swap contracts currently account for about 70 percent of Nigeria’s imports while 30 percent is done through the spot market, one of the sources added.

The Group Managing Director of the corporation, Dr. Maikanti Baru, had previously announced an extension for the expiry of the deals to the end of this year.

A list of the 10 DSDP groupings include: Trader/Refinery Local partner(s) Volume (minimum expected) Trafigura AA Rano 33,000 bpd; Petrocam Rainoil/Falcon 33,000 bpd; Crest Mocoh Heyden 33,000 bpd; Cepsa Oando 33,000 bpd; Sahara SIR 33,000 bpd; Mercuria Matrix/Rahmaniya 33,000 bpd; Socar Hyde 33,000 bpd; Litasco MRS 33,000 bpd; Vitol Varo 33,000 bpd; and Total 33,000.

Despite having a refining capacity of about 445,000 barrels per day, NNPC’s facilities have been underperforming for years, making Nigeria totally dependent on imports to meet its domestic petrol and diesel needs. Statistics show that the country’s fuel consumption is roughly 40 million litres per day.

Unlike the 2016 contracts, which included only companies with refineries so as to cut out middlemen, the beneficiaries of 2017 contracts include international trading houses, and not just refineries.

However, under the current deals, each of the selected 10 oil traders/refineries partnered local Nigerian companies to win 33,000 barrels per day allocations.

US legal threat prompts change at OPEC

OrientEnergyReview

18th October 2018

The Organisation of Petroleum Exporting Countries has urged its member nations, not to mention oil prices when discussing policy in a break from the past, as the oil-producing group seeks to avoid the risk of US legal action for manipulating the market, sources close to OPEC said.

Proposed US legislation, known as “NOPEC” which could open the group up to anti-trust lawsuits, has long lain dormant, with previous American presidents signalling that they would veto any move to make it law.

But US President, Donald Trump, has been a vocal critic of the OPEC, blaming it for high oil prices and urging it to increase output to relieve pressure on a market hovering around four-year highs.

That has made OPEC and its unofficial leader, Saudi Arabia, nervous about what it might mean for the cartel.

The decision to refrain from discussing a preferred oil price level — one way the group can guide market expectations — underlines how Trump’s aggressive stance on the oil market is unsettling OPEC and testing ties between allies in Riyadh and Washington.

SOURCE: NAN

Chevron Calls on Stakeholders to Support willing seller, buyer gas pricing model

OrientEnergyReview

18th October 2018

Oge Obi –

The Managing Director of Chevron Nigeria Limited, (CNL) Jeff Ewing has called on the stakeholders in the gas industry to support and enable the willing seller – willing buyer gas pricing model, to ensure the viability of the sector.

Ewing who spoke in Abuja at the 11th Edition of the Nigerian Gas Association Conference and Exhibition, also called for the privatization of the various value chain sectors, as part of measures to untangle the bottle necks in the industry.

Represented by the Director, Downstream Gas, Mr. Sanjay Narasimhalu, Ewing stated that opportunities for investments into the Nigerian gas sector were enormous.

According to him, “The opportunities include transitioning from an oil-based economy to a more integrated oil and gas economy and end routine gas flaring. “Deliberate exploration for non-associated gas to support the Nigeria Gas Master Plan, with a focus on high liquid yield non-associated gas resources to optimise the gas development project economics; and growth of new industries made possible from the abundant resources and competitively priced gas supply.”

Speaking further, Ewing noted that CNL has contributed immensely to the Nigerian government’s gas master plan through the various gas projects it has embarked on and that the company is the highest contributor of high quality gas to the domestic market in Nigeria since 2015.

While appreciating the talents in the industry, the workforce that make things happen he stated that through investments in gathering and processing of associated gas, routine flaring has been reduced by over 90% from 2008 to 2017 in CNL’s operations.

He said the company has made significant effort in the gas sector development in Nigeria, adding that “CNL is optimistic about the future of oil and gas business in Nigeria. We have been making significant investments in the country for over 50 years and expect to do so for many more years to come”

NCDMB Commends, Declares Support for Dangote Refinery on Local Content Implementation

OrientEnergyReview

18th October 2018

President Buhari Renews Appointments of NCDMB, PTDF, PEF Bosses

Oge Obi

The Nigerian Content Development and Monitoring Board (NCDMB) has commended the management of Dangote Petroleum Refinery and Petrochemical Free Trade Zone Enterprises (DPRP) for abiding by the local content law in the execution of its refinery project.

The Director, Monitoring & Evaluation, NCDMB, Mr. Akintunde Adelana, who represented the Board’s Executive Secretary Dr. Simbi Wabote, made this known during the DPRP Nigerian Content Sensitization/Awareness Creation Programme, titled: “Let’s Walk the Nigerian Content Talk Together,” at Lekki Free Trade Zone, Lagos.

Wabote said that the Dangote Refinery upon completion would close a major gap in the supply of petroleum products in the country. Continuing he declared the Board’s intention to partner with the Dangote Refinery for effective implementation of Local Content policy in the country.

“We consider this as a very important project and we are willing to partner with the company to ensure full implementation of the local content policy. We embarked on this journey with the company a long time ago and we are ready to partner with the Dangote Group.

“Part of what you see to today is part of our efforts to ensure that the company and its contractors comply with the local content policy and they have put in a lot of efforts in this regard”, he said.

Speaking further, Wabote stated that the Local Content Act was a major legislative instrument created to add value to the Nigerian economy by a systematic development of capacity and capabilities of the people, through deliberate utilization of Nigerian human, material resources and services in the Nigerian oil and gas industry.

Wabote noted that prior to the enactment of the local content law; Nigeria experienced loses arising from jobs executed abroad by International Oil Companies (IOCs).

“The narrative then was that nothing can be done in-country. Plants and modules were fully fabricated offshore without any structure in place to achieve knowledge transfer. Before 2010, we had no active dry-dock facilities. The few we had were abandoned and left to rot away. Today, we have four active dry docking facilities in Port Harcourt, Onne, and Lagos,” he added.

Wabote reiterated the board’s mandate to be to develop local capacity in key areas such as manufacturing and fabrication and promote indigenous ownership of assets and utilization of indigenous assets in oil and gas operations.

Adding that the Board’s responsibility also includes linking the oil and gas industry with other sectors of the economy, enhance multiplier effect of oil and gas investments in the economy and develop a pool of competitive supply chain rooted in oil-bearing communities.

The Executive Secretary, however warned that defaulters of the Nigerian Content Policy risks suspension of their projects/contracts, a penalty of five percent of project sum, withdrawal of NCDMB’s services, and project cancellation unrecoverable sunk cost.

Also, other penalties for non-compliance, according to the ES, includes withdrawal or suspension of license, withdrawal of approvals or de-classification of the contractor from pre-qualification list, application of the full weight of the law in accordance with Section 68, and publication of non-compliant operators in newspapers and professional gazettes.

Also speaking, the Chief Operating Officer, DPRP, Mr. Giuseppe Surace, said the programme was organized to create awareness among the company’s contractors on the requirements of NCDMB, as part of moves to ensure full compliance to the local content policy in their day to day operation.

“The programme was organised to ensure that our contractors are well informed about the Nigerian Content Act and this is expected to assist them with the execution of not just the Dangote project, but other projects in their portfolio,” he added.

Oil Marketers Call for Regular Review of Oil Price

OrientEnergyReview

16th October 2018

Oge Obi

The Major Oil Marketers Association of Nigeria has said that there is need for a regular review of the pricing template for Premium Motor Spirit (PMS) to ensure that the price of the commodity reflects the reality on the ground.

The Chairman, MOMAN and Managing Director, MRS Oil Nigeria Plc, Mr Andrew Gbodume, said this on Monday at a press briefing, stressing that the nation’s current business model for the distribution of petroleum products was unsustainable.

He said, “We have a template and we are expected to follow the template. But what we should be looking at is a situation whereby the template is regularly visited, because we know that as of the time the template was worked upon and we had a price of N145, the price we are buying crude and petroleum products is not the same.

“The time is now to encourage a well-informed and honest debate among ourselves as Nigerians on our downstream pricing policy, showing sensitivity to the fears of Nigerians and the challenges we face as a people and as an economy to arrive at an equitable but sustainable business model.

“So, we should look at a situation whereby the template will be visited regularly, maybe every month or every quarter, to ensure that the price we have has to do with the reality on the ground.

“When we get to start looking at that, the issue of whether there is subsidy or not will come into play, because today, nobody can categorically say that this is the subsidy that is on fuel because we are not importing; it is only the government that is importing. So, it is only the government that can actually tell you that this is the actual price”, Gbodume said.

The MOMAN Chairman noted that the Petroleum Products Pricing Regulatory Agency, in its Downstream Monitor for January to April 2018, indicated that petrol price had continued to rise at the international market, pushing the expected open market price in the country far beyond the recommended pump price of N145/litre.

According to Gbodume, one of the major challenges the Nigerian downstream petroleum sector is still facing is the non-payment of the long outstanding fuel subsidy to oil marketers.

“We appreciate the efforts of the National Assembly, but the non-payment creates a significantly negative impact on the operational efficiency of the downstream sector of the oil industry, thereby placing a severe strain on its efforts to continually invest in infrastructure and raise industry standards. We hope that the debts will be paid in full to the oil marketers as soon as possible,” he added.

However, Gbadume commended the Pipelines and Product Marketing Company, a subsidiary of the NNPC, for its efforts over the last few months in ensuring consistent supply of petroleum products within the country.

Oil turns lower as weaker demand outlook weighs

OrientEnergyReview

15th October 2018

Oil prices gave back early gains and turned lower on Friday after the International Energy Agency (IEA) deemed supply adequate and the outlook for demand weakening, sinking even as equities rebounded from a slump Thursday.

The West’s energy watchdog said in its monthly report that the market looked “adequately supplied for now” and trimmed its forecasts for world oil demand growth this year and next.

“This is due to a weaker economic outlook, trade concerns, higher oil prices and a revision to Chinese data,” said the IEA, which advises industrialised countries on energy policy.

Brent crude fell 56 cents a barrel to $79.70 by 12:16 p.m. EDT (1616 GMT), after dropping 3.4 percent on Thursday. U.S. crude futures fell 2 cents to $70.95.

“The weaker outlook has gotten a raised profile in the market, but there’s potential for a real supply crunch toward the end of this year,” said John Kilduff, a partner at Again Capital Management in New York. “The demand outlook is hurt right now because of the situation with the U.S. and China in particular.”

Both benchmarks were headed for their first weekly drop in five weeks, pressured by a big rise in U.S. inventories and fading concerns about shrinking global supplies due to looming U.S. sanctions on Iran’s oil exports.

The IEA report is the latest official forecaster to predict weaker demand ahead and conclude that supply is adequate. The Organization of the Petroleum Exporting Countries (OPEC) made a similar move on Thursday.

“The bearish alarm bells are ringing for next year’s oil balance as market players brace for the return of a supply surplus,” said Stephen Brennock of oil broker PVM.

Early in the session, crude rose as global equities were set for their biggest daily gain in nearly a month. Declining equities amid wider risk-off investor sentiment had pressured oil on Thursday.

A drop in U.S. oil production this week supported prices. In the U.S. Gulf of Mexico, companies cut output by 40 percent on Thursday because of Hurricane Michael, even as some began returning crews to offshore platforms.

Michael made landfall in Florida on Wednesday as the third most powerful hurricane to strike the U.S. mainland, though it has since weakened to a tropical storm.

Oil traders will watch for the weekly U.S. drilling rig count, an indicator of upcoming production, which is due at about 1 p.m. from Baker Hughes.

Jessica Resnick-Ault; Aaron Sheldrick & Alex Lawler; Editing: Marguerita Choy & David Gregorio – Reuters

Pipeline Explosion: Police Puts Death Toll at 24 dead

OrientEnergyReview

14th October 2018

The death toll from the pipeline explosion that occurred in Umuaduru and Umuimo communities, Osisioma Local Government Area in the early hours on Friday has been put at 24 by the Commissioner of Police in Abia State, Mr. Anthony Ogbizi.

The Commissioner of Police gave the figure after he visited the scenes of the explosion at the two communities.

He said the explosion occurred due to spillage from a pipeline used to pump petrol from the Nigerian National Petroleum Corporation depot in Aba.

“According to the information from the NNPC depot manager in Aba, the spillage occurred from a pipeline that was undergoing maintenance.

“He said they were instructed to test run the pipeline to ascertain its level of functionality. When we visited the two communities, we were informed that 14 people were reported dead at Umuimo village, while 10 died at Umuduru community.

“Some of the victims who sustained various degrees of burns were said to be asleep when the incident occurred. They were said to have been taken to nearby hospitals and traditional medicine homes for treatment.’’

Ogbizi said the police and other security agencies in the state were investigating the possible cause of the explosion.

The state governor, Okezie Ikpeazu, has also visited the two communities affected by the explosion.

In a statement by his Chief Press Secretary, Enyinnaya Appolos, the governor directed the state Commissioner for Petroleum Resources, Mr Chizurum Kanu, to immediately inaugurate a Commission of Inquiry to unravel the immediate and remote causes of the explosion.

Ikpeazu also directed the state Commissioner for Heath, Dr. John Ahukannah and Chairman of Osisioma Local Government, Ihenyinna Mgbeahuru, to visit the survivors in the various hospitals and ensure adequate provision of medical care for them and payment of their bills.

NNPC blames vandals for Aba oil pipeline fire

OrientEnergyReview

13th October 2018

The fire outbreak at the Nigerian National Petroleum Corporation (NNPC) oil pipeline along Osisioma axis, near Aba depot in the Corporation’s System 2E pipeline network has been blamed on pipeline vandals and petroleum products thieves.

The Group General Manager, Public Affairs Division, Mr. Ndu Ughamadu, disclosed this in a statement. Ughamadu confirmed fatalities and loss of properties in the ensuing inferno.

He stated that safety experts of the NNPC, along with men of the Abia State Fire Service, had swung into action to contain the situation, promising to provide updates on the situation as events unfold.

Stating that the activities of vandals might have caused the inferno, Ughamadu said that the oil thieves might have hacked into the line to intercept flow of petrol from Port Harcourt to Aba.

Also speaking on the incident, Group Managing Director of the NNPC, Mr. Maikanti Baru, expressed shock at the wanton wilful destruction of lives and properties occasioned by the incident.

Baru prayed that God reposes the souls of the innocent ones that perished in the incident, even as he warned members of the public against tampering with oil and gas facilities many of which he said were inflammable.

He also called on host communities to create avenues to moderate criminal tendencies of a few bad eggs living among them.

African Circle acquires 16 new trucks for cleaner territorial waters

OrientEnergyReview

12th October 2018

Oge Obi

To maintain its high standard service which has aimed Nigeria a seat in the International Maritime Organization (IMO), as a council member, African Circle Pollution Management Limited (ACPML) recently acquired 16 additional trucks for more efficient and effective service delivery.

ACPML, a MARPOL 73/78 waste reception facility operator for Nigerian Ports Authority which manages ship-generated waste on behalf of the Federal Government noted that it’s continued effort at improving its facilities as well as the human resources were aimed at keeping Nigerian waters free of dirt and pollution, while retaining the country’s dignified position in the comity of maritime nations.

Speaking at the unveiling of the 16 brand new trucks at the Apapa office of ACPML, the Managing Director, Nigerian Ports Authority (NPA), Hadiza Bala-Usman commended the organisation on the giant strides it has continued to attain. The MD who was represented by the NPA General Manager, Security, Mr. Nasir Anas Mohammed said that it was NPA’s greatest pleasure to identify with a result-oriented team as ACPML, adding that the Authority was confident that the additional vehicles would further enhance the organisation’s efforts in keeping Nigerian territorial waters clean.

In his opening remarks, the Acting Coordinating Officer of ACPML, Ahmadu Fidi Ahmadu said that increase in demand of its services as well as the need to maintain international best practices in its service delivery prompted the procurement of the trucks.

He further hinted that the Mercedes Benz trucks were fitted with modern technology specially designed for its kind of services, adding that eight trucks would be sent to its Port Harcourt while eight tucks will be retained in Lagos.

Speaking also, the District Manager, Lagos, Mrs. Latifat Ibrahim, said that ACPML in its strives for excellence carries out routine upgrade of its facilities in order to keep up with the IMO requirements for adequacy of port reception facility. Ibrahim noted that the wear and tear on older facilities makes the procurement of new ones inevitable for optimum service delivery.

She noted through years of sensitisation, the port reception facility has established its presence in the Nigerian navigational districts, created a platform and services that is acknowledged in the international community. Adding that establishment of the company’s presence involves having right equipment and personnel and timely response to request, among others.

“Here, we strive for excellence in our service delivery. When we came on board with the NPA, awareness was very low, we worked on it, sensitised vessel captains as we meet them, and we had our presence established.

“There was no better way of establishing our presence than having equipment on ground that people can see and having also the human resources to work with the equipment, such that we were able to even go above and beyond what people expected of us. As it, there is no request that will come that we are unable to deal with. We get requests for services even at Lagos anchorage. I can tell you categorically that it wasn’t like this four years ago, it has been a steady improvement – scaling up our equipment and services.”

According to the District Manager, the accolades and recognition from the international community gave Nigeria a Council Seat in the International Maritime Organisation. “Also, we need to ensure that Nigeria is not flagged for inadequacy. It is important to note that what we do and the statistics we have on ground is the information with which Nigeria bid to be a council member of the IMO.

“The difference between being a floor member and a council member on the IMO is that as a Council member, you are involved in decision making and as decision making member, you will stand for the things that affect your country such that it is taken into consideration before a decision is taken.

Speaking further, Ibrahim disclosed that the company enjoys tremendous support from the Ministry of Transportation. She however hinted that local legislation will further enhance its performance.

“Again one of the things that will enhance what we do is having local legislation that supports what we do. We already have international legislation which is the MARPOL 73/78 regulation that governs what we do internationally. When there is local legislation, it is possible to have our waters very clean without a trace of dirt. There are countries who have achieved that. They did that with additional local legislation, she said.”

Nigerian Content Receives a Boost as Waltersmith builds Modular Refinery

OrientEnergyReview

12th October 2018

Oge Obi

The Local Content initiative of the Nigerian government in the oil and gas industry again, received a boost as an indigenous refinery by Waltersmith Refining and Petrochemical Company Limited gets ready to contribute about 271 million litres of refined products annually towards the development of Nigeria’s economy.

The 5,000 bpd modular refinery in its first phase of development is located at Ibigwe field in the Ohaji/Egbema Council Area of Imo state is getting set for in-country crude oil refining and making products available for domestic market.

The Chairman and Chief Executive Officer, Waltersmith Petroman Oil Limited, Mr Abdulrazaq Isa, said that the modular refinery is being built to create direct and indirect employment. Adding it is also aimed at reducing the demand for foreign exchange for fuel importation.

He hinted that the 5,000 bpd refinery currently in its first phase of development was conceptualised in 2011 to mitigate the frequent outage of the third-party export Trans Niger Pipeline and to optimise the full value of the firm’s produced crude through in-country refining and provide petroleum products for the domestic market.

The Minister of State for Petroleum Resources, Dr Ibe Kachikwu in his remarks, commended the firm for the refinery project. He said that the project was a good step in the right direction that will reposition the nation’s refineries.

“We have processed excess of one million barrels in this country and a refining technical team and a clutch-free mechanism would soon be put in place for increased oil production.”

The Executive Secretary, Nigerian Content Development and Monitoring Board, Mr Simbi Wabote, who congratulated Waltersmith on the groundbreaking event, called for more partnerships as part of its initiatives to increase Nigerian content in the oil and gas sector to 70 per cent within the next 10 years.

He said, “Beyond our interventions in the local supply chain for in-country capacity utilisation, we have broadened our focus to include in-country resource utilisation. We believe that oil production should be refined using modular refineries.

“Our doors are still open and we welcome more proposals for consideration and support in line with the published guidelines. The capacities of modular refineries we are willing to consider are in the range of a minimum of 1,000bpd and maximum of 5,000bpd.”

“High cost of solar systems stalling full embrace of alternative energy by Nigerians”

OrientEnergyReview

10th October 2018

Oge Obi.

While available statistics in the country has shown that Nigerians are willing to switch over to alternative sources of energy, it has however been discovered that the initial high cost of setting up a chosen source such as the solar system has been responsible for the inability to go for the desired power source.

This was made known to Orient Energy Review by a Sales Representative of Solar Blaid, Mr. Bamigbade Akinsanya during the 2018 edition of Power Nigeria in Lagos, recently. Akinsanya said that Nigerians were longer in doubt on the energy source that would best meet their needs, but the inability to mobilise the needed fund for the initial installation has been responsible for the delay in switching over to their preferred power source.

“In Nigeria, we have moved from the stage of people asking if we actually need other sources of energy. It is now obvious to Nigerians that we need renewable energy to overcome our power challenge, create employment and help grow our economy.

“At the moment, why everybody is sceptical about renewable energy is because of the high cost. But over time, it will get reduced when we start to produce locally. One of the few key things we need to look into in Nigeria is how best to procure locally.

“Of course, our exchange rate today is not helping matters because most of all these materials are brought in from China. So, what we will try to do as a company is to make sure that we set up a factory that couples these things locally to actually reduce the cost”, Akinsanya said.

Nigeria, having set an ambitious goal to shift her reliance on fossil fuel sources to alternative energy, it has been said that Nigeria targets to add 13GW of off-grid solar power by 2030, as announced by officials during COP21 in Paris. According to the Sales Representative, there is no appropriate time for the financial institutions in the country to take advantage of the investment opportunities available in the renewable energy than now.

“We want to encourage the financial institutions to key into renewable energy. Yes, it is capital intensive but over time, we will benefit from it because by the time we start to mass-produce these things, we will get return on investment. This is the peak period for investment into renewable energy, because from now onwards, what you will witness is increase in awareness, acceptance and adaptability by the people.

“One of the things we notice in our industry is that diesel consumption and the cost of general maintenance of the conventional street lights are enormous. A lot of people have issues with the on-grid power source, in some remote areas, power is hardly available and so the people depend on generator with the attendant risks such as theft and harmful fumes. But if have the solar system is installed; you don’t have to be bothered about these risks.

Akinsanya noted Solar Blaid as a Nigerian-based company through its various products has come to bring a lasting solution to the Nigerian perennial power problems. “We are a Nigerian-based company in partnership with a Chinese company that produces all in one solar street lights.

“We are here at the 2018 Power Nigeria to showcase one of our innovations and products which is Solar street lights and we have different types of the products.

We have the blade street light series, batman series. We also have the garden light. The features and designs are different. The advantage you have with our street lights is that it is all in one. It is all incorporated into one. Unlike the conventional ones we see around that has its panel and batteries separate.”

In our expansion, we have brought local content to bear – Skipper

OrientEnergyReview

10th October 2018

Power Nigeria Sponsorship is a Way of giving back to the country

Oge Obi

The 2018 Power Nigerian exhibition and conference that held at Landmark Centre, VI, Lagos between from September 25 to 27 was indeed a convergence of key players in the entire power value chain in the country. The three-day event which brought together a wide range of key stakeholders from power manufacturers, suppliers, wholesalers and distributors, to thousands of visitors from across Nigeria, neighbouring countries and other parts of the world, offered an participants and stakeholders the opportunity to deliberate on the latest trends in the industry, interact and learn about the investment potentials in the sector.

The 2018 edition of ‘Power Nigeria’ also welcomed some of the longest standing exhibitors such as Skipper Seil, Schneider Electric, among others. For these companies, their annual presence at the event is a testament to their strength and leadership in the sector. As industry experts, manufacturers and service providers converged to chart the way forward through the Power Nigeria Agenda, participants were also provided with free, educational CPD-credited sessions that was designed to improve their knowledge and skills.

The Exhibition Manager at Informa Group had earlier hinted that the establishment appreciates the importance of bringing the industry together every year to interact and see the potential the power generation investment will offer to participants.

Orient Energy Review (OER) in a chat with an Executive of the Skipper, Mr. Anietie Udoh, revealed that the company has come a long way as a global brand. He noted that the company has been around for 15 years, describing the Skipper Nigeria Limited experience in the country as being worthwhile; stressing that the business recorded growth and expansion, resulting in the establishment of a manufacturing plant in Ikorodu. Udoh told OER that Skipper was at the 2018 edition of Power Nigeria to showcase their latest range of industry products and services.

According to him, Skipper, in her 15 years of operating in Nigeria has remained committed to being part of the solutions for the nation’s power problems. Adding that the company has also allowed its growth and expansion to positively impact the country, by way of job creation, introduction of innovative products and services that best address the power need in the country.

He said, “Business has been good, we have also expanded our scope. At the initial stage when we came into Nigeria, it was mainly on the sales aspect of the business, but currently our business has expanded. We have ventured into EPC – Engineering, Procurement and Construction. We are also into power generation.

“At the moment, we have ventured into renewable energy. We are working with Kaduna and Taraba State governments in energizing their hospitals and street lighting through solar power.

Speaking further, Udoh attributed part of the strides Skipper has so far attained to the friendly environment Nigeria offers to investors, good policies and availability of skilled labour, among others; Adding that the company’s decision to be a major sponsor of the ‘Power Nigeria’ was just a way of giving back to the country.

He also stated that, the company in its support for the Nigeria’s Local Content Law, aimed at building the Nigeria’s economy, now carries out in-country manufacturing of its goods; Adding that the factory employs over 50 Nigerians.

“We have taken from the Nigerian government, what we want to do is to give back to the government and the people of Nigeria for opening their doors to us to invest in the country’s power sector. In our Ikorodu factory, we manufacture fibre cross arm. It is handled by our sister company – GTA and it employs over 50 Nigerians.

Speaking on the benefits of the annual event to the power sector, Udoh said, ‘Power Nigeria’ is a very fruitful event, because every year, it brings various players in the entire power value chain together in Nigeria. They come around to exhibit their products, network, gain more knowledge about the investment opportunities in the country. In fact, a lot companies find it convenient to invest in Nigeria. Before now, most companies only engage in sales of their goods but today we have many participating in-country production.

Udoh observed that despite the challenges faced by the nation’s power sector, that it has maintained a steady growth. “Government has invested a lot of money in the sector towards the attainment of stable power supply in the country. And I can say that power has improved tremendously than what it used to be in the past.”

“Nigerians are eager to switch to more-effective alternatives”

OrientEnergyReview

8th October 2018

Solar and Wind Reach 67% of New Power Capacity Added Globally in 2019, while Fossil Fuels Slide to 25%

Oge Obi

As the awareness on alternative energy increases in the country, Nigerians are beginning to show strong interest to switch over to better and more effective sources of energy for their homes and businesses. This may also not be unconnected to the huge benefits these alternative sources of energy offers which include, being cheaper and cleaner energy; environmental friendly, employment, economic growth propeller.

The Rural Electrification Agency in a recent assessment of the Nigeria’s mini-grid market has disclosed that Nigeria is still far from meeting the energy need of her teeming population. It noted that a significant amount of the economy is powered largely by small-scale generators (10-15GW) and almost 15 per cent of the population has limited or no access to the grid.

According to the report, Nigerians and their businesses spend almost $14 billion annually on inefficient generation that is expensive (0.40/kWh or N140/kWh or more), poor quality, noisy and polluting. Adding that many rural households spend more than $6/month (N2,100/month) on kerosene or battery powered torches, making case for solar homes systems.

The REA findings from some select communities also revealed that there are high densities of power use, large latent demand, and a strong willingness by the people to switch to more-effective alternatives.

“Some communities indicated both the ability and willingness to contribute to the up-front cost of electricity infrastructure. Many not the on-grid communities are still underserved and are interested in alternative electricity sources.

“There is a huge opportunity for the development of underserved areas and that many of the on-grid communities are still underserved and are interested in alternative sources.

“So, developing off-grid alternatives to complement the grid creates a $9.2B/year market opportunity for minigrids and solar home systems that will save $4.4B/year for Nigerian homes and businesses.

The report noted the that it is high time investors took advantage of the opportunity the renewable energy offers to the world, especially to the African continent. Stressing that getting off-grid solutions to scale and commercial viability in Nigeria will unlock an enormous market opportunity in sub-Saharan Africa across 350 million people in countries with smaller demand and/or less-robust economies.

The independent assessment of the Nigerian mini-grid market which is as a result of a partnership between Rural Electrification Agency, the World Bank (EnergyTeam), and Rocky Mountain Institute concluded that the Nigerian market alone is enough to bring mini grid to scale.

The report further stated that the Government is prioritising the off-grid solution as part of the country’s overall power sector recovery plan. Adding that “Nigeria has been recognised as the biggest and most attractive off-grid opportunity in Africa, with one of the best locations in the world for mini grid. With an enabling environment, continued cost reductions, and targetted finance, the Nigerian mini-grid market can scale rapidly to over 10,000 sites by 2023, powering 14 per cent of the population with capacity up to 3,000mw.

According to an industry stakeholder and President of Green Elec, Mr. Marcel Hochet, Nigeria requires a combination of different sources of power in order to boost the electricity supply in the country. He noted that it is not enough for Nigeria to depend solely on the traditional methods of generating power such as gas and hydro. According to Hochet, the use of renewable energy source such as solar, wind, biomass and coal is also important. Adding that a combination of off-grid and on-grid sources of generating power would help in improving pose supply in Nigeria.